/raid1/www/Hosts/bankrupt/TCRLA_Public/140210.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
Monday, February 10, 2014, Vol. 15, No. 28
Headlines
A R G E N T I N A
CORDOBA: Moody's Assigns (P)B3 Rating to ST Treasury Note Program
FIDEICOMISO FINANCIERO PVCRED: Moody's Rates ARS18.5MM Certs 'Ca'
B R A Z I L
BRAZIL: Fitch Says Power Distribution Firms Again Under Pressure
ENERGISA S.A: Fitch Maintains IDRs on Negative Watch
SABESP: Fitch Says Consumption Reduction to Impact Cash Flow
C A Y M A N I S L A N D S
360 GLOBAL: Shareholders Receive Wind-Up Report
AMLOGIC LTD: Shareholders Receive Wind-Up Report
CATEQUIL OVERSEAS: Shareholders Receive Wind-Up Report
CHINA WUHAN: Shareholders Receive Wind-Up Report
FALCON GROUP: Fitch Affirms LT Issuer Default Rating at 'B'
FARMHOUSE GLOBAL: Shareholder Receives Wind-Up Report
GAIEN PROPERTIES: Shareholders Receive Wind-Up Report
GONDWANA FUND: Shareholders Receive Wind-Up Report
HELIUM ASSET: Shareholders Receive Wind-Up Report
JAPAN CORE: Shareholders Receive Wind-Up Report
JOETSU INVESTMENTS: Shareholders Receive Wind-Up Report
L CAPITAL: Shareholders Receive Wind-Up Report
LONGWAY CAPITAL: Shareholders Receive Wind-Up Report
MSREF VI RIVER FIVE: Shareholders Receive Wind-Up Report
MSREF VI RIVER SIX: Shareholders Receive Wind-Up Report
NEWPORT FINANCE: Shareholders Receive Wind-Up Report
NWQ CONCENTRATED: Shareholders Receive Wind-Up Report
NWQ CONCENTRATED MASTER: Shareholders Receive Wind-Up Report
PRINCETON ASIA: Shareholders Receive Wind-Up Report
SOMERSET LTD: Shareholder Receives Wind-Up Report
TAS ENERGY: Shareholders Receive Wind-Up Report
D O M I N I C A N R E P U B L I C
DOMINICAN REP: Maritime Trade Strategy flounders, Expert Warns
J A M A I C A
FIRSTCARIBBEAN INTERNATIONAL: May Be Delisted From JSE Soon
* JAMAICA: Gets US$80MM IDB Loan to Strengthen Sustainability
M E X I C O
CONTROLADORA MABE: Fitch Affirms Foreign Currency IDR at 'BB+'
P U E R T O R I C O
PUERTO RICO: S&P Cuts Rating on PRIFA's Revenue Bonds to 'BB'
PUERTO RICO: Moody's Downgrades GO Rating to 'Ba2'; Outlook Neg.
V E N E Z U E L A
VENEZUELA: Fitch Says Performance Deterioration Expected for Banks
X X X X X X X X X
BOND PRICING: For the Week From Feb. 3 to Feb. 7, 2014
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A R G E N T I N A
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CORDOBA: Moody's Assigns (P)B3 Rating to ST Treasury Note Program
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Moody's Latin America Agente de Calificacion de Riesgo has
assigned a (P)B3 (global scale local currency) and Baa2.ar
(Argentina National Scale) ratings to the 2014 Short-Term Treasury
Note Program of the Municipality of Cordoba. The ratings are in
line with the municipality's long term local currency issuer
ratings, which carry a negative outlook.
Ratings Rationale
The 2014 program, authorized by laws N 12.270 and Mayor's Decree N
096/14 considers a maximum issuance of ARS330 million.
The assigned debt ratings reflect Moody's view that the
willingness and capacity of the Municipality of Cordoba to honor
these short-term treasury notes is in line with the municipality's
long-term credit quality as captured in the B3/Baa2.ar issuer
ratings.
The first issuance under the 2014 program (Series VIII, for up to
ARS35 million) will mature within a period of 120 days and will be
backed by the Contribution over Commerce, Industry, and Service
Companies. The amount to be issued represents less than 1% of the
municipality's 2014 expected total revenues.
In addition to Series VIII, the Municipality intends to issue
another four tranches throughout the current fiscal year.
The assigned ratings are based on preliminary documentation
received by Moody's as of the rating assignment date. Moody's does
not expect changes to the documentation reviewed over this period
or anticipates changes in the main conditions that the notes will
carry. Should issuance conditions and/or final documentation of
any of the series under this program deviate from the original
ones submitted and reviewed by the rating agency, Moody's will
assess the impact that these differences may have on the ratings
and act accordingly.
What Could Change The Rating Up/Down
Moody's does not expect upward pressures in the Municipality of
Cordoba's ratings in the near to medium term. Notwithstanding, a
change of the sovereign outlook back to stable could lead to a
change in the outlook of the municipality of Cordoba back to
stable. The city could be downgraded if the negative outlook on
the sovereign rating materializes into a rating downgrade.
The principal methodology used in this rating was Regional and
Local Governments published in January 2013.
Moody's National Scale Credit 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 credit ratings in that they are not globally comparable with
the full universe of Moody's rated entities, but only with NSRs
for other rated debt issues and issuers within the same country.
NSRs are designated by a ".nn" country modifier signifying the
relevant country, as in ".mx" for Mexico. For further information
on Moody's approach to national scale credit ratings, please refer
to Moody's Credit rating Methodology published in October 2012
entitled "Mapping Moody's National Scale Credit Ratings to Global
Scale Credit Ratings.
FIDEICOMISO FINANCIERO PVCRED: Moody's Rates ARS18.5MM Certs 'Ca'
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Moody's Latin America Agente de Calificacion de Riesgo has rated
the new structure of Fideicomiso Financiero Pvcred Serie XIX. This
transaction will be issued by TMF Trust Company (Argentina) S.A.-
acting solely in its capacity as issuer and trustee.
Moody's notes that the securities contemplated by this transaction
have not yet settled. If any assumptions or factors considered by
Moody's in assigning the ratings change before closing, Moody's
could change the ratings assigned to the notes.
Moody's has withdrawn the ratings of the Class VRDB because the
liability structure of the transaction has changed before issuance
and as a result the rating of VRDB tranche will change. Moody's
has assigned new ratings to this tranche as follows. Please refer
to the Moody's Investors Service's Policy for Withdrawal of Credit
ARS 90,563,000 in Class A Floating Rate Debt Securities (VRDA TV)
of "Fideicomiso Financiero Pvcred Serie XIX", rated Aaa.ar (sf)
(Argentine National Scale) and Ba3 (sf) (Global Scale, Local
Currency)
ARS 6,966,000 in Class B Debt Securities (VRDB) of "Fideicomiso
Financiero Pvcred Serie XIX", rated Ba1.ar (sf) (Argentine
National Scale) and Caa1 (sf) (Global Scale, Local Currency)
ARS 18,577,000 in Certificates (CP) of "Fideicomiso Financiero
Pvcred Serie XIX", rated Ca.ar (sf) (Argentine National Scale)
and Ca (sf) (Global Scale, Local Currency).
Ratings Rationale
The rated securities are payable from the cashflow coming from the
assets of the trust, which is an amortizing pool of approximately
15,469 eligible personal loans denominated in Argentine pesos,
bearing fixed interest rate, originated by Pvcred, a financial
company owned by Comafi's Group in Argentina.
The VRDA TV will bear a floating interest rate (BADLAR plus
400bps). The VRDA TV's interest rate will never be higher than 30%
or lower than 16%. The VRDB will bear a fixed interest rate of
26%.
Overall credit enhancement is comprised of subordination, various
reserve funds and excess spread.
The transaction has initial subordination levels of 15.76% for the
VRDA TV and 9.28% for the VRDB, calculated over the pool's
principal balance and accrued interest as of the cut off date. The
subordination levels will increase overtime due to the turbo
sequential payment structure.
The transaction also benefits from an estimated 40.67% annual
excess spread, before considering losses, trust expenses, taxes or
prepayments and calculated at the cap of 30% for the VRDA TV.
Factors that would lead to an upgrade or downgrade of the rating
Factors that may lead to a downgrade of the ratings include an
increase in delinquency levels beyond the level Moody's assumed
when rating this transaction. Although Moody's analyzed the
historical performance data of previous transactions and similar
receivables originated by Pvcred, the actual performance of the
securitized pool may be affected, among others, by the economic
activity, high inflation rates compared with nominal salaries
increases and the unemployment rate in Argentina.
Factors that may lead to an upgrade of the ratings include the
building of credit enhancement over time due to the turbo
sequential payment structure, when compared with the level of
projected losses in the securitized pool.
Loss and Cash Flow Analysis
Moody's considered the credit enhancement provided in this
transaction through the initial subordination levels for each
rated class, as well as the historical performance of Pvcred
portfolio. In addition, Moody's considered factors common to
consumer loans securitizations such as delinquencies, prepayments
and losses; as well as specific factors related to the Argentine
market, such as the probability of an increase in losses if there
are changes in the macroeconomic scenario in Argentina.
These factors were incorporated in a cash flow model that takes
into account all the relevant features of the transaction's assets
and liabilities. Monte Carlo simulations were run, which
determines the expected loss for the rated securities.
Moody's analyzed the historical performance data of previous
transactions and similar receivables originated by Pvcred, ranging
from January 2007 to November 2013. Given the recent 20%
devaluation of the Argentine peso, Moody's believes that inflation
will accelerate and that nominal increases in salaries and
pensions will not keep up with inflation. A decline in real income
will deteriorate the credit quality of peso-denominated collateral
like the personal loans securitized in this transaction. As a
result, Moody's has increased some of the default assumptions in
the securitized pools to account for this scenario. Moody's notes
that there is significant uncertainty around key macroeconomic
variables in Argentina, including inflation rates, salary
increases compared to inflation, and economic activity, which have
an impact on future performance of this transaction.
In assigning the rating to this transaction, Moody's assumed a
lognormal distribution of losses for each one of the different
securitized subpools: (a) for the PVCred, "Cuotas Bonificadas" and
the "Staff" loans, a mean of 16% and a coefficient of variation of
60%; (b) for the "Cuota Ya" and "Provenclick" loans, a mean of 28%
and a coefficient of variation of 60% and (c) for "Refinanced"
loans, mean of 41% and a coefficient of variation of 60%. Also,
Moody's assumed a lognormal distribution for prepayments with a
mean of 45% and a coefficient of variation of 70%.
Servicer default was modeled by simulating the default of Banco
Comafi as the servicer consistent with its current rating of
B2/A1.ar. In the scenarios where the servicer defaults, Moody's
assumed that the defaults on the pool would increase by 20
percentage points.
The model results showed 0.44% expected loss for Class A Floating
Rate Debt Securities, a 11.28% for the for Class B Fixed Rate Debt
Securities and 46.39% for the Certificates.
Moody's also evaluated the back-up servicing arrangements in the
transaction. If Pvcred is removed as collection agent, Banco
Comafi will be appointed as the back-up collection agent.
Stress Scenarios
Moody's ran several stress scenarios, including increases in the
default rate assumptions. If default rates were increased 8% from
the base case scenario, the ratings of the Class A Floating Rate,
and the Class B would likely be downgraded to B1 (sf) and Caa3
(sf) respectively. The ratings of the Residual would likely be
unchanged.
The principal methodology used in this rating was "Moody's
Approach to Rating Consumer Loan ABS Transactions" published in
May 2013.
For more information on this transaction, please refer to the Pre
Sale Report to be published in moodys.com.
Moody's National Scale Credit 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 credit ratings in that they are not globally comparable with
the full universe of Moody's rated entities, but only with NSRs
for other rated debt issues and issuers within the same country.
NSRs are designated by a ".nn" country modifier signifying the
relevant country, as in ".mx" for Mexico. For further information
on Moody's approach to national scale credit ratings, please refer
to Moody's Credit rating Methodology published in October 2012
entitled "Mapping Moody's National Scale Credit Ratings to Global
Scale Ratings".
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B R A Z I L
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BRAZIL: Fitch Says Power Distribution Firms Again Under Pressure
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Fitch Ratings believes that the currently weak hydrology scenario,
combined with the high power consumption, leads to unbalanced
power supply, significantly higher short-term power prices (PLD),
and cash-burn by the power distribution companies (Power DisCos)
in order to support the unexpected spot market prices.
On a probability scale of low, medium, reasonable, or likely,
Fitch considers the risk of a rationing event to be reasonable.
If a rationing scenario develops without any substantial measures
by the regulator to avoid deterioration in the sector's financial
profile, negative rating actions could be taken on Brazilian
power. Fitch believes it is highly likely that government support
will be on par with the 2013 disbursement of interest-free
financing to Power DisCos, but persistent drought would require
additional support in order to avoid sector downgrades.
The current hydrology scenario has caused dispatches of almost the
entire capacity of thermal power plants, boosting the price of
energy on the spot market (PLD). Short-term energy prices should
remain under pressure, at least during the next few weeks, as
initial forecasts for February indicate a low rainfall. In
January, power prices at the spot market increased to
BRL484.43/MWh, from BRL249.22/MWh. The regulatory PLD cap of
BRL822.83/MWh was reached in the first week of February. These
prices compare to BRL413.95/MWh and BRL214.54/MWh, recorded in
January and February 2013, and to an annual average of
BRL262.53/MWh in 2013.
The next couple of months will be crucial in defining the
hydrology scenario for the entire year of 2014, and consequently
for crystalizing rationing risks. A continued drought until the
start of April, when the dryer season starts, would impact the
recovery of Brazil's most important reservoirs, such as those in
the Southern and Southeastern regions, and would likely result
more restrictive consumption measures. In January 2014, the level
of these reservoirs were 58.6% and 40.6%, respectively, which
compares to 43.8% and 37.5% during the same period in 2013 and to
63.3% and 76.2% in 2012.
The government has a few options to manage the current scenario.
Among the already known forms of compensation are the Annual
Tariff Readjustments, Extraordinary Readjustments and Government
contributions to companies through specific funds (via Energy
Development Account - CDE). The Government budget for 2014,
provides for BRL 9 billion (USD4.1 billion) to be passed on from
the National Treasury to CDE, and it is most likely that the
Government will, once more, make use of these funds to support the
Power DisCos. In 2013, the funds used to support the power
distribution companies were approximately BRL 9.5 billion (USD4.4
billion).
The Annual Tariff Readjustment allows the higher power purchase
costs to be fully passed on to the tariff on the tariff
readjustments scheduled dates. Within this scenario, companies
with their annual readjustments scheduled until April/May would be
able to recover their capacity to generate operating cash flow.
However, Power DisCos with readjustments scheduled for the
following months would continue with their liquidity strongly
pressured for longer periods, thus increasing the systemic risk of
default. Among those companies with readjustments scheduled for
the second semester, which should be mostly affected in case the
Government decides not to support DisCos with CDE funds are:
Eletropaulo, Celpa, Cemar, CPFL - Piratininga and Light .
Authorization for an extraordinary tariff readjustment for all
Power DisCos would be viewed as positive, although unlikely. Both
readjustment options imply increased inflation pressures. The
Government has given clear signs that inflation control is a
priority, even if this result in fiscal pressure on public
accounts, reduced operating cash flow generation and investing
capacity, and a weakened regulatory environment.
Fitch currently assigns the following ratings to companies
operating with power distribution:
Eletropaulo
--Long-Term Foreign Currency IDR (Issuer Default Rating) 'BB+' (BB
plus); Outlook Negative
--Long-Term Local Currency IDR 'BB+' (BB plus); Outlook Negative
--Long-Term National Rating 'AA(bra)'; Outlook Negative
Cemig
--Long-Term National Rating 'AA(bra)'; Outlook Negative
Cemig D
--Long-Term National Rating 'AA(bra)'; Outlook Negative
CPFL Energia:
--Long-Term National Rating 'AA+(bra)'; Outlook Stable
CPFL Paulista:
--Long-Term National Rating 'AA+(bra)'; Outlook Stable
CPFL Piratininga:
--Long-Term National Rating 'AA+(bra)'; Outlook Stable
RGE:
--Long-Term National Rating 'AA+(bra)'; Outlook Stable
Copel
--Long-Term National Rating 'AA+(bra)'; Outlook Stable
Light
--Long-Term National Rating 'AA-(bra)'; Outlook Negative
Light Sesa:
--Long-Term National Rating 'AA-(bra)'; Outlook Negative
Energisa
--Long-Term Foreign Currency IDR 'BB' (BB); Outlook Negative
--Long-Term Local Currency IDR 'BB' (BB); Outlook Negative
--Long-Term National Rating 'A+(bra)'; Outlook Negative
Energisa Paraiba - Distribuidora de Energia S/A (Energisa
Paraiba):
--Long-Term Foreign Currency IDR 'BB+'; Outlook Negative
--Long-Term Local Currency IDR 'BB+'; Outlook Negative
--Long-Term National Rating 'AA-(bra)', Outlook Negative;
Energisa Sergipe - Distribuidora de Energia S/A (Energisa
Sergipe):
--Long-Term Foreign Currency IDR 'BB+'; Outlook Negative
--Long-Term Local Currency IDR 'BB+'; Outlook Negative
--Long-Term National Rating 'AA-(bra)'; Outlook Negative;
Energisa Minas Gerais - Distribuidora de Energia S/A (Energisa
Minas Gerais):
--Long-Term Foreign Currency IDR 'BB+'; Outlook Negative
--Long-Term Local Currency IDR 'BB+'; Outlook Negative
--Long-Term National Rating 'AA-(bra)'; Outlook Negative;
Cemar
--Long-Term National Rating 'AA-(bra)'; Outlook Stable
Celpa
--Long-Term Foreign Currency IDR 'B-' (B minus); Outlook Stable
--Long-Term Local Currency IDR 'B-' (B minus); Outlook Stable
--Long-Term National Rating 'BB+(bra)'; Outlook Stable
ENERGISA S.A: Fitch Maintains IDRs on Negative Watch
----------------------------------------------------
Fitch Ratings has maintained Energisa S.A.'s (Energisa) and its
subsidiaries' Issuer Default Ratings (IDRs) on Watch Negative.
KEY RATING DRIVERS
Energisa one step closer to complete the acquisition of Grupo
Rede.
On January 28th, 2014 Energisa received the regulatory approval
from Brazilian Regulatory Agency (ANEEL) for its acquisition and
investment plan of Grupo Rede. Energisa has 75 days to fulfill
other precedent conditions of the bankruptcy protection plan,
after which the target companies shares will be released for
negotiation by the local court and the acquisition can be
completed.
On December 10, 2013 Fitch has placed Energisa's and Subsidiaries'
IDRs on Negative Watch reflecting the expected pressure of the
potential acquisition of Grupo Rede on Energisa's consolidated
credit metrics. The reorganization and investment plan of Grupo
Rede comprises the incorporation of BRL4.8 billion of Grupo Rede's
net debt, after the write-off of part of debt at Grupo Rede's
holdings level, and operating integration with its eight
distribution companies. This integration poses a significant
credit and operational challenge to Energisa since Grupo Rede's
subsidiaries operate in an extensive area with an operational
performance below average. The conclusion of the acquisition
could result in a one-notch downgrade of all ratings, if a firm
proposal of capital increase of Energisa is not carried out in the
near term or is insufficient to make credit metrics compatible
with current ratings.
The ratings reflect Energisa's ability to keep its consolidated
leverage ratios at levels consistent with the assigned rating
category, even during a time of higher capital expenditures. The
group currently presents a solid financial profile, underpinned by
a robust liquidity position, and a lengthened debt maturity
profile. The analysis also incorporates Energisa's robust
operational cash flow generation, with the negative impact of the
third tariff review cycle in its distribution companies to be
partially offset by potential new efficiency gains and increase in
the generation business.
The group's credit profile is also bolstered by its diversified
power distribution concessions, which dilutes business risk, and
the benefits of a growing client base. Fitch considers the
investments in the generation segment as positive, based on asset
diversification and more predictable cash flow generation. The
generation segment has improved the group's business profile and
should represent 20% - 25% of its consolidated EBITDA in 2015,
considering the current asset base. Energy generation activities
benefit from long-term energy sales contracts with fixed prices
adjusted for inflation, which mitigate the cash flow volatility
related to periodical tariff reviews of Energisa's energy
distribution subsidiaries.
The one-notch difference between Energisa's ratings and those of
its subsidiaries is based on the relevance and structural
subordination of the holding company's debt compared to that of
the operating companies. The holding company debt represented
approximately 22% of net consolidated debt as of Sept. 30, 2013.
Leverage to Increase After Grupo Rede Acquisiton
Fitch expects the acquisition of Grupo Rede will have a material
impact on Energisa's leverage ratios. On a pro forma basis, Fitch
expects a consolidated net leverage between 4.0 times (x) and
4.5x, considering a recurring EBITDA for Grupo Rede of BRL1.0
billion, the incorporation of BRL4.8 billion in net debt of the
acquired group including the upfront payment of BRL500 million for
Grupo Rede's creditors, and potential new debt issuance to finance
immediate capital expenditures at the acquired distribution
companies. In the last twelve months (LTM) ended Sept. 30, 2013,
Energisa presented a total debt-to-EBITDA ratio of 4.1x and a net
debt-to-EBITDA ratio of 3.0x. Fitch expects Energisa to fund the
acquisition and new capex requirements with appropriate funding
and potential equity contribution from shareholders, as well as
refinance the existing debt at Grupo Rede's subsidiaries at lower
interest rate and lengthened maturity profile.
Sound Operational Profile
Energisa's consolidated cash flow has benefited from a higher than
expected increase in energy consumption in the group's concession
areas, and, to a lesser extent, from the gradual improvement of
its operational indicators. Energy distributed in its concession
areas increased 4.7% in 2012 and 11.9% in the first nine months of
2013 compared with the same period of the previous year. The
group has consistently reduced its energy losses, both on a
consolidated basis and individually. Currently, all of Energisa's
distribution companies report losses below the maximum percentages
established by the Aneel, which is an important factor regarding
their operating cash flow.
Fitch expects a moderate negative impact on Energisa's
consolidated operational cash generation in the next years as a
consequence of the third tariff review in all its five
distribution companies in 2012 - 2013. This effect can be
partially offset by the start-up of some generation projects,
which should increase the group's energy generation installed
capacity from current 253 MW to 363 MW by 2017. On Sept. 2013,
150MW of new generation installed capacity were available to
operate and are expected to add BRL80-90 million to the group's
consolidated net revenues in a yearly basis. In the LTM ended
Sept. 30, 2013, consolidated net revenues and EBITDA reached BRL3
billion and BRL688 million, respectively, excluding construction
revenues, which favorably compares with BRL2.9 billion and BRL640
million reported in 2012.
High Capex Needs to pressure FCF
Energisa's free cash flow (FCF) is expected to stay negative in
the following years as a result of high capital expenditures and
dividend distribution. Fitch considers the investments in the
generation segment as positive, based on more predictable cash
flow generation. Cash flow from operations (CFFO) was BRL828
million for the LTM ended Sept. 30, 2013. Cash generation was
used to fund capital expenditures of BRL648 million and the
dividend distribution of BRL181 million, resulting in a slightly
negative FCF of BRL1 million. The acquisition of Grupo Rede can
put more pressure on Energisa's cash flow in the first years as a
result of additional capex requirements. Operational improvements
and synergies should be obtained gradually.
Robust Liquidity and Adequate Debt Profile
Energisa presents comfortable liquidity levels on a consolidated
basis. As of Sept. 30, 2013, the group reported BRL767 million of
cash and marketable securities, which covered its short-term debt
by 2.3x. For the same period, the cash + CFFO-to-short-term debt
ratio was 3.7x, evidencing the company's adequate debt repayment
schedule. Debt is concentrated in the long term, with maturities
well-distributed over time.
RATING SENSITIVITIES
The ratings could be downgraded by one-notch after the conclusion
of Grupo Rede's acquisition. After this event, Fitch will monitor
Energisa's operational performance in the new distributors, with
potential improvements in cash flow generation and credit metrics
to benefit the overall credit profile of the group. An upgrade in
the ratings is not likely in the short-term.
Fitch has maintained the following ratings on Negative Watch:
Energisa
--Foreign currency IDR 'BB';
--Local currency IDR 'BB';
--Long-term national scale rating 'A+(bra)'; and
--Long-term national rating of the third debentures issuance, in
the amount of BRL150 million, due in 2014, 'A+(bra)'.
Energisa Paraiba - Distribuidora de Energia S/A (Energisa Paraiba)
--Foreign currency IDR 'BB+';
--Local currency IDR 'BB+';
--Long-term national scale rating 'AA-(bra)'; and
--Long-term national rating of the first debentures issuance, in
the amount of BRL80 million, due in 2014, 'AA-(bra)'.
Energisa Sergipe- Distribuidora de Energia S/A (Energisa Sergipe)
--Foreign currency IDR 'BB+';
--Local currency IDR 'BB+';
--Long-term national scale rating 'AA-(bra)'; and
--Long-term national rating of the second debentures issuance, in
the amount of BRL60 million, due in 2014, 'AA-(bra)'.
Energisa Minas Gerais - Distribuidora de Energia S/A (Energisa
Minas Gerais)
--Foreign currency IDR 'BB+';
--Local currency IDR 'BB+';
--Long-term national scale rating 'AA-(bra)'; and
--Long-term national rating of the seventh debentures issuance, in
the amount of BRL60 million, due in 2014, 'AA-(bra)'.
In accordance with Fitch's policies the issuer appealed and
provided additional informationto Fitch that resulted in a rating
action that is different tha the original rating committee
outcome."
SABESP: Fitch Says Consumption Reduction to Impact Cash Flow
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Companhia de Saneamento Basico do Estado de Sao Paulo's (Sabesp)
operating cash generation should be marginally affected by the
incentive program for water consumption reduction proposed by the
company on Feb. 03, 2014, according to Fitch Ratings. This
program applies for the clients supplied by the Cantareira water
production system, Sabesp's most important system.
Through this program, established due to the low water levels at
Cantareira's reservoirs, Sabesp is to grant a tariff discount of
30% to all clients (residential, industrial and commercial) who
reduce by 20% the volume of water consumed compared with the
average during the LTM ended in January 2014.
Fitch believes that the estimated revenue reduction should not
significantly impact Sabesp's credit metrics. The agency
estimates the company's annual revenue to fall by around 4% to 7%
as a result of the program implementation. On a pro forma basis,
and considering revenue reduction of 7%, Sabesp's net adjusted
leverage is 2.7x compared with 2.5x reported during the LTM
September 2013.
The negative impact of the water consumption reduction incentive
program may be partially offset by the higher volume of water
billed registered within other regions not under the program, due
to the high weather temperatures and expected population growth
for Sabesp's operating region.
Fitch assumed that between 50% and 80% of the consumers under the
program should successfully achieve the established water
reduction and therefore have discounted bills. Fitch will monitor
the water level of Sabesp's reservoirs and assess potential
additional measures of water consumption reduction that may affect
more severely the revenue and EBITDA generation for the company.
By the end of January 2014, the Cantareira water production system
reported only 21% of its water storage capacity, which compares
with 52%, 76% and 93%, respectively registered in 2013, 2012 and
2011. The system generates around 34% of the total volume
produced by the company and supplies approximately 47% of the
metropolitan region of Sao Paulo. The incentive program for water
consumption reduction is valid between February and August or
until the water reservoirs resume to normal levels
Fitch currently rates Sabesp and related issuances as follows:
--Long term Foreign Currency IDR 'BB+';
--Local currency IDR 'BB+';
--Long Term National Scale Rating 'AA(bra)';
--Senior Unsecured Notes due in Nov. 2016 and Dec.2020, 'BB+'.
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C A Y M A N I S L A N D S
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360 GLOBAL: Shareholders Receive Wind-Up Report
-----------------------------------------------
The shareholders of 360 Global Capital Ltd. received on Jan. 7,
2014, the liquidator's report on the company's wind-up proceedings
and property disposal.
The company's liquidator is:
Enrique Abeyta
Walkers
190 Elgin Avenue, George Town
Grand Cayman KY1-9001
Cayman Islands
Telephone: (345) 914 6365
AMLOGIC LTD: Shareholders Receive Wind-Up Report
------------------------------------------------
The shareholders of Amlogic Ltd. received on Jan. 7, 2014, the
liquidator's report on the company's wind-up proceedings and
property disposal.
The company's liquidator is:
Raymond Wong
Telephone: +1 (408) 850-9688
Facsimile: +1 (408) 850-9687
2518 Mission College Blvd
Ste 120 Santa Clara
CA 95054, U.S
CATEQUIL OVERSEAS: Shareholders Receive Wind-Up Report
------------------------------------------------------
The shareholders of Catequil Overseas Partners Limited received on
Jan. 7, 2014, the liquidator's report on the company's wind-up
proceedings and property disposal.
The company's liquidator is:
Jess Shakespeare
c/o Kinetic Partners (Cayman) Limited
The Harbour Centre, 42 North Church Street
P.O. Box 10387 Grand Cayman KY1-1004
Cayman Islands
Telephone: (345) 623 9903
Facsimile: (345) 943 9900
CHINA WUHAN: Shareholders Receive Wind-Up Report
------------------------------------------------
The shareholders of China Wuhan Holdings received on Jan. 8, 2014,
the liquidator's report on the company's wind-up proceedings and
property disposal.
The company's liquidator is:
Stephen Nelson
Telephone: 949-4544
Facsimile: 949-7073
Charles Adams Ritchie & Duckworth
Zephyr House, 2nd Floor, 122 Mary Street
P.O. Box 709 Grand Cayman, KY1-1107
Cayman Islands
FALCON GROUP: Fitch Affirms LT Issuer Default Rating at 'B'
-----------------------------------------------------------
Fitch Ratings has affirmed Falcon Group Holdings (Cayman) Ltd.'s
(Falcon/the group) Long-term Issuer Default Rating (IDR) at 'B'
and its Short-term IDR at 'B'. The Outlook on the Long-term IDR
is Stable.
KEY RATING DRIVERS - IDRS
Falcon's IDRs are constrained by its company profile and weak
corporate governance. The group has significant related-party
transactions with the shareholder, while the key role and
importance of the chairman/sole shareholder to the business weaken
the position of potential debt holders within the corporate
structure. Corporate governance is therefore viewed as a rating
constraint.
Falcon's IDRs also reflect its niche franchise in its core Middle
East and Asian markets, the low risk nature of its trade finance
business and low leverage, supported by strong internal capital
generation, which provides a buffer for potential debt issuance.
However, the absolute size of capital is small. Falcon has also
demonstrated a strong track record of performance through the
cycle including a solid profit generation capability on rising
turnover with limited asset quality deterioration.
Fitch considers the group as a niche player in the trade finance
business, without a clear competitive advantage and with limited
pricing power in the global market. Barriers to entry within the
trade finance business are low. Asset quality of the core
business benefits from hedging of credit risk, but there have been
past instances of opportunistic investment strategies that could
have put the group at risk from potential high losses. While
internal compliance and risk management functions have been
strengthened, Fitch believes that efforts to address these issues
are still a work in progress.
Liquidity is supported by strong cash and equivalent balances, and
the structure of the balance sheet is quite flexible due to the
short-term nature of transactions in which it engages. Liquidity
needs are limited, due to the self-funded nature and close
funding/asset term match of trade finance transactions.
RATING SENSITIVITIES - IDRS
Negative pressure on the ratings could arise from a worsening risk
profile, resulting from, for example, rapid expansion outside its
core competences or a heightened risk appetite or material
acquisition. Although there is currently some headroom, the
ratings would also be negatively affected by significantly
increased leverage resulting from higher dividend payout ratios or
sustained falls in profitability.
The ratings are also sensitive to increased operational risk
resulting from a rapid, uncontrolled expansion outside the group's
core geographical areas of the Middle East and Asia.
The ratings could be positively impacted by improved risk
management practices, including a demonstrated track record of
adhering to more conservative internal limits and investment
policies; improved corporate governance policies, practices and
board level committees and limiting related-party transactions.
The group is unregulated and is privately owned by its founder
Kamel Alzarka who acts as its chairman and is an executive
director of the company. Falcon was established in 2013 in the
Cayman Islands to act as the new holding company for the group
while the Falcon group operates since 1994 as a finance provider
for small and mid-sized corporate clients seeking alternative
short-term trade finance.
FARMHOUSE GLOBAL: Shareholder Receives Wind-Up Report
-----------------------------------------------------
The shareholder of Farmhouse Global Partners Ltd received on
Jan. 6, 2014, the liquidator's report on the company's wind-up
proceedings and property disposal.
The company's liquidator is:
Peter Ort
600 Alexander Road, Suite 2-4A
Princeton, NJ 08540
United States
Telephone: +1 (609) 454 3571
Facsimile: +1 (609) 454 3665
GAIEN PROPERTIES: Shareholders Receive Wind-Up Report
-----------------------------------------------------
The shareholders of Gaien Properties Ltd. received on Jan. 8,
2014, the liquidator's report on the company's wind-up proceedings
and property disposal.
The company's liquidator is:
Stephen Nelson
Telephone: 949-4544
Facsimile: 949-7073
Charles Adams Ritchie & Duckworth
Zephyr House, 2nd Floor, 122 Mary Street
P.O. Box 709 Grand Cayman, KY1-1107
Cayman Islands
GONDWANA FUND: Shareholders Receive Wind-Up Report
--------------------------------------------------
The shareholders of Gondwana Fund Limited received on Jan. 10,
2014, the liquidator's report on the company's wind-up proceedings
and property disposal.
The company's liquidator is:
Avalon Management Limited
Landmark Square, 1st Floor
64 Earth Close, West Bay Beach
P.O. Box 715 Grand Cayman KY1-1107
Cayman Islands
Facsimile: +1 (345) 769-9351
HELIUM ASSET: Shareholders Receive Wind-Up Report
-------------------------------------------------
The shareholders of Helium Asset Management received on Jan. 15,
2014, the liquidator's report on the company's wind-up proceedings
and property disposal.
The company's liquidator is:
Syquant Capital
Laurent Boscherel
c/o Syquant Capital
67 rue la Boetie
75008 Paris
France
Telephone: +331.42.56.56.27
JAPAN CORE: Shareholders Receive Wind-Up Report
-----------------------------------------------
The shareholders of Japan Core Acquisitions I, Ltd received on
Jan. 8, 2014, the liquidator's report on the company's wind-up
proceedings and property disposal.
The company's liquidator is:
Stephen Nelson
Telephone: 949-4544
Facsimile: 949-7073
Charles Adams Ritchie & Duckworth
Zephyr House, 2nd Floor, 122 Mary Street
P.O. Box 709 Grand Cayman, KY1-1107
Cayman Islands
JOETSU INVESTMENTS: Shareholders Receive Wind-Up Report
-------------------------------------------------------
The shareholders of Joetsu Investments Limited received on Jan. 8,
2014, the liquidator's report on the company's wind-up proceedings
and property disposal.
The company's liquidator is:
Stephen Nelson
Telephone: 949-4544
Facsimile: 949-7073
Charles Adams Ritchie & Duckworth
Zephyr House, 2nd Floor, 122 Mary Street
P.O. Box 709 Grand Cayman, KY1-1107
Cayman Islands
L CAPITAL: Shareholders Receive Wind-Up Report
----------------------------------------------
The shareholders of L Capital EWJ Cayman Ltd. received on Jan. 22,
2014, the liquidator's report on the company's wind-up proceedings
and property disposal.
The company's liquidator is:
Muhammad Aslam Koomar
Ebene Esplanade, 5th Floor
24 Cybercity Ebene
Mauritius
Telephone: +230 401 2359
Facsimile: +230 401 2301
LONGWAY CAPITAL: Shareholders Receive Wind-Up Report
----------------------------------------------------
The shareholders of Longway Capital Fund received on Jan. 8, 2014,
the liquidator's report on the company's wind-up proceedings and
property disposal.
The company's liquidator is:
Gene Dacosta
c/o Jonathan McLean
Telephone: (345) 814 7376
Facsimile: (345) 945 3902
P.O. Box 2681 Grand Cayman KY1-1111
Cayman Islands
MSREF VI RIVER FIVE: Shareholders Receive Wind-Up Report
--------------------------------------------------------
The shareholders of MSREF VI River Five, Limited received on
Jan. 7, 2014, the liquidator's report on the company's wind-up
proceedings and property disposal.
The company's liquidator is:
Stephen Nelson
Telephone: 949-4544
Facsimile: 949-7073
Charles Adams Ritchie & Duckworth
Zephyr House, 2nd Floor, 122 Mary Street
P.O. Box 709 Grand Cayman, KY1-1107
Cayman Islands
MSREF VI RIVER SIX: Shareholders Receive Wind-Up Report
-------------------------------------------------------
The shareholders of MSREF VI River Six, Limited received on
Jan. 7, 2014, the liquidator's report on the company's wind-up
proceedings and property disposal.
The company's liquidator is:
Stephen Nelson
Telephone: 949-4544
Facsimile: 949-7073
Charles Adams Ritchie & Duckworth
Zephyr House, 2nd Floor, 122 Mary Street
P.O. Box 709 Grand Cayman, KY1-1107
Cayman Islands
NEWPORT FINANCE: Shareholders Receive Wind-Up Report
----------------------------------------------------
The shareholders of Newport Finance received on Jan. 8, 2014, the
liquidator's report on the company's wind-up proceedings and
property disposal.
The company's liquidator is:
Avalon Ltd.
Landmark Square, 1st Floor
64 Earth Close, West Bay Beach
P.O. Box 715 Grand Cayman KY1-1107
Cayman Islands
Facsimile: +1 (345) 769-9351
NWQ CONCENTRATED: Shareholders Receive Wind-Up Report
-----------------------------------------------------
The shareholders of NWQ Concentrated Fund Limited received on
Jan. 7, 2014, the liquidator's report on the company's wind-up
proceedings and property disposal.
The company's liquidator is:
John E. Conlin
c/o Barnaby Gowrie
Telephone: +1 (345) 914 6365
NWQ CONCENTRATED MASTER: Shareholders Receive Wind-Up Report
------------------------------------------------------------
The shareholders of NWQ Concentrated Master Fund Limited received
on Jan. 7, 2014, the liquidator's report on the company's wind-up
proceedings and property disposal.
The company's liquidator is:
John E. Conlin
c/o Barnaby Gowrie
Telephone: +1 (345) 914 6365
PRINCETON ASIA: Shareholders Receive Wind-Up Report
---------------------------------------------------
The shareholders of Princeton Asia (Cayman) Limited received on
Jan. 14, 2014, the liquidator's report on the company's wind-up
proceedings and property disposal.
The company's liquidator is:
Trident Liquidators (Cayman) Limited
c/o Eva Moore
Telephone: (345) 949 0880
Facsimile: (345) 949 0881
One Capital Place, 4th Floor
P.O. Box 847, George Town
Grand Cayman, KY1-1103
Cayman Islands
SOMERSET LTD: Shareholder Receives Wind-Up Report
-------------------------------------------------
The shareholder of Somerset Ltd received on Jan. 23, 2014, the
liquidator's report on the company's wind-up proceedings and
property disposal.
The company's liquidator is:
Ogier
c/o Shameer Jasani
Telephone: (345) 815 1802
Facsimile: (345) 949 9877
TAS ENERGY: Shareholders Receive Wind-Up Report
-----------------------------------------------
The shareholders of Tas Energy China Limited received on Feb. 4,
2014, the liquidator's report on the company's wind-up proceedings
and property disposal.
The company's liquidator is:
Zheng Shi
Unit 5-1-1501
Guanhu Guoji
No. 88 East Fourth Ring Road North
Beijing 100022
Telephone (+86) 10 5109 6188
===================================
D O M I N I C A N R E P U B L I C
===================================
DOMINICAN REP: Maritime Trade Strategy flounders, Expert Warns
--------------------------------------------------------------
Dominican Today reports that damaged port infrastructure, an
obsolete law on ports and the lack of a logistics strategy on
maritime trade activities have taken the Dominican Republic to the
brink of losing profitable market opportunities.
The thrust of international maritime trade resulting from the
Panama Canal's expansion and the upswing in regional competition
from the recent opening of the "Door to the Americas" container
terminal in Cuba, forces the country to improve port access, adapt
port infrastructure to provide dynamic, efficient, development-
oriented logistics, according to Dominican Today.
The report notes that AP Marine Cargo President Anibal Pina said
the Panama Canal's expansion and the competition from Cuba's new
port should spur the Government to rethink its policy to
capitalize on global markets.
President Pina, the report notes, criticized the official sector's
failure to respond to the region's port and maritime market's
reality. "The Dominican Government must develop a strategy to
respond to these phenomena which spur challenges, but also
opportunities," the report quoted President Pina as saying.
President Pina, the report relates, suggests adequate port
infrastructure, terminals and a system of services to compete.
Meanwhile, the port logistics expert affirms that the private
sector has done its job to boost competitiveness in maritime trade
in the last 10 years, investing more than US$1.2 billion and
capitalizing on opportunities, but notes that the government has
yet to define clear strategies and refocus resources, the report
relates.
=============
J A M A I C A
=============
FIRSTCARIBBEAN INTERNATIONAL: May Be Delisted From JSE Soon
-----------------------------------------------------------
Jamaica Gleaner reports that FirstCaribbean International Bank
(FCB) Limited, the regional group owned by CIBC of Canada, said
that it is likely to be delisted from the Jamaica Stock Exchange
(JSE) in the near future.
The decision, it said, is linked to the assessment of the company
as being in breach of JSE rule 402 relating to holdings of
ordinary shares, of which they were notified in October 2013,
according to Jamaica Gleaner.
"The Jamaica Stock Exchange notified the bank that it did not meet
the minimum listing requirement, i.e. the percentage of shares
held other than by the bank's majority shareholder was less than
20 per cent, and the average total traded volume for the 36 months
before we received the correspondence from the JSE was below two
per cent," the bank said in response to queries from the Financial
Gleaner.
In response to questions sent to the bank, Chief Executive Officer
of CIBC FirstCaribbean, Rik Parkhill, said "it is important to
point out that we did not decide that we no longer wish to
maintain our listing on the JSE," the report notes.
The report discloses that having reviewed the situation, the bank
said it invited the JSE to let matters take its course.
FCIB stock, which is now trading at J$88 per unit, lost 2.2 per
cent of its value between January and December 2013. No trading
has occurred since the start of 2014, the report says.
The bank has just over 1.52 billion units listed on the JSE with
current market value of J$134.21 billion, the report discloses.
Jamaica Gleaner relates that arrangements are being made for
trading of its common shares on the Barbados Stock Exchange, the
bank said. Its ordinary shares are listed on the stock exchanges
of Trinidad, Barbados and the Organisation of Eastern Caribbean
States.
The report relays that for the year ended October 2013, CIBC
FirstCaribbean Jamaica reported a net loss of J$903 million.
Earlier in the year, the parent company announced that it would be
injecting US$70 million into the Jamaica operations, for which
FirstCaribbean Jamaica issued 528 million ordinary 'A' shares to
its parent, the report recalls.
Consequently, the bank's share capital rose from J$1.4 billion to
J$8.46 billion and its capital base almost doubled from J$7.9
billion to J$14 billion, the report adds.
* JAMAICA: Gets US$80MM IDB Loan to Strengthen Sustainability
-------------------------------------------------------------
The Government of Jamaica will strengthen its fiscal
sustainability path and promote higher economic growth with an
US$80 million loan from the Inter-American Development Bank (IDB).
Jamaica faces a significant challenge in terms of achieving
economic growth and fiscal sustainability. It is important to
modernize a tax system that is complex, discretionary and
outdated. A more effective tax administration will improve the
efficiency and transparency of Jamaica's public sector
institutions.
This is the first operation of a policy-based loan (PBL), which
provides flexible support for institutional and policy reforms by
means of a fast disbursement of resources. The program's goal
will be achieved by reducing tax distortions, which hinder private
investment, employment and competitiveness; strengthening revenue
collection through broadening tax bases and reducing tax rates;
enhancing the Government's control over budgetary expenditures;
improving the fiscal sustainability of the National Insurance
Scheme (NIS); and strengthening Jamaica's Fiscal Responsibility
Framework (FRF).
The operation will include the simplification of the tariff
structure by reducing tariff dispersion, increase tax revenues by
establishing a cap of 50 percent on claims for deduction of tax
losses, and reduce economic distortions and promote economic
growth by lowering the corporate income tax rate from 30 percent
to 25 percent for unregulated companies.
The Government of Jamaica will improve its efficiency and lower
its wage bill as a percentage of its gross domestic product,
thereby allowing greater investment in activities that promote
economic growth. These tax reforms will reduce the fiscal drain
and contingent liabilities by rationalizing their structure and
improve accounting practices.
This first loan will also support the preparation of a concept
paper that will address options for possible reforms of the
National Insurance Scheme, including its contribution rate,
pension benefits and coverage indicators with the goal of reducing
the program's deficit from 6 percent to 4 percent by 2018.
The IDB loan has a 20-year maturity, a 5.5-year grace period and
an interest rate based on LIBOR.
===========
M E X I C O
===========
CONTROLADORA MABE: Fitch Affirms Foreign Currency IDR at 'BB+'
--------------------------------------------------------------
Fitch Ratings has affirmed the ratings of Controladora Mabe, S.A.
de C.V. (Mabe):
--Foreign currency Issuer Default Rating (IDR) at 'BB+';
--Local currency IDR at 'BB+';
--6.5% senior unsecured notes due 2015 at 'BB+';
--7.875% senior unsecured notes due 2019 at 'BB+'.
The Rating Outlook is revised to Stable from Positive.
The Outlook revision reflects recent EBITDA declines associated
with a competitive environment and weak demand in Latin America as
well as higher leverage and financing costs resulting from
reorganization related expenditures which contributed to lower-
than-expected cash flow generation. In addition, the revision
reflects Fitch's expectation of gross leverage above 2.5x for the
next 12-24 months.
Mabe's ratings reflect its geographic diversification and strong
business position across all markets where it has a presence which
in turn has allowed it to maintain revenue growth and solid
pricing power. The ratings continue to be supported by the
company's long-term relationship and joint venture with General
Electric (GE), which provides access to joint development of
products and services, as well as efficiencies in the supply
chain. Mabe's ratings are tempered by a highly competitive
environment, exposure to commodity prices and foreign exchange
volatility as well by its leverage levels and poor cash flow
generation in the last few years as a result of reorganization
charges and expenses.
KEY RATING DRIVERS
Higher Profitability in a Challenging Environment
Fitch expects Mabe's results to improve given higher profitability
as a result of the deconsolidation of Mabe Brazil and an improved
housing outlook in the United States. In domestic markets,
volumes will likely increase moderately, and strong pricing
initiatives in conjunction with a better sales mix, expense
reduction efforts and a stable commodity price environment will
likely support operating margins. Strong competition in all
markets, in conjunction with lower growth in Latin America and
foreign exchange volatility, are expected to remain as the main
challenges for the company. In 2013, EBITDA margin improved to
9.2% from the 8.6% registered in 2012, but volumes-excluding
Brazil-declined 2%.
Strong Market Position
Mabe holds a strong business position in most of the Latin
American markets in which it is present. The company has 14
manufacturing facilities located in Mexico, Canada, Costa Rica,
Ecuador, Colombia and Argentina, which allow it to serve different
markets under competitive conditions. Mabe continues to focus on
offering a wide product portfolio under a multi-brand strategy
that targets all socioeconomic levels, in conjunction with the
long-term manufacturing and export agreements with General
Electric (GE).
Long-Term Relationship with GE
Mabe's ratings continue to be supported by the long-term
relationship with GE. The company signed a 10-year agreement with
GE in 2012 for the production of dryers in its Saltillo plant in
Mexico. The project considers production capacity of 1.6 million
units per year; at the end of 2013 the run-rate reached 1 million,
in line with expectations.
Leverage Expected to Stabilize in 2014
Fitch believes gross leverage will likely stabilize in 2014 at
around 3.0x and will decline modestly in 2015 as scheduled debt
amortizations along with reductions in financing costs and in non-
recurring reorganizational charges take place. Fitch also expects
the company will use cash flows to support capex of approximately
USD115 million a year for the next two years, resulting in neutral
to slightly positive free cash flow and stable debt levels. As of
Dec. 31, 2013, total debt-to-EBITDA was 3.1x, a 0.4x increase to
the 2.7x registered at the end of 2012.
Adequate Liquidity and Extended Debt Maturity Profile
The company's total debt was USD844 million at Dec. 31, 2013, with
short-term debt of USD24 million and cash balances of USD90
million. The company maintains good access to bank loans and debt
capital markets and recently announced the refinancing of USD270
million of debt maturing in the following 12-24 months through
five-year term loans. Mabe's total debt as of Dec. 31, 2012 was
USD833 million.
RATINGS SENSITIVITY
Future developments that may, individually or collectively, lead
to a negative rating action include:
Large debt-financed acquisitions, deterioration in profitability
and cash flow generation from lower demand, competitive and/or
input cost pressures, resulting in the expectation of gross
leverage levels consistently above 3.0x.
Future developments that may, individually or collectively, lead
to a positive rating action include:
A firm management commitment to maintain total debt-to-EBITDA at
or below 2.5x in the mid- to long-term, in conjunction with robust
cash flow generation, stable profitability and strong liquidity.
====================
P U E R T O R I C O
====================
PUERTO RICO: S&P Cuts Rating on PRIFA's Revenue Bonds to 'BB'
-------------------------------------------------------------
Standard & Poor's Ratings Services has lowered its rating on
Puerto Rico Infrastructure Financing Authority's series 2011B and
2011C revenue bonds, issued for the Ports Authority project, by
two notches to 'BB' from 'BBB-'. At the same time, Standard &
Poor's has placed the rating on CreditWatch with negative
implications. These issues are supported by letters of credit
provided by Government Development Bank for Puerto Rico.
These actions follow Standard & Poor's Jan. 24, 2014, placement of
its ratings on Government Development Bank for Puerto Rico on
CreditWatch with negative implications, and Standard & Poor's
Feb. 4, 2014, lowering of its rating on Government Development
Bank for Puerto Rico to 'BB/B' from 'BBB-/A-3'.
STANDARD & POOR's 17g-7 DISCLOSURE REPORT
SEC Rule 17g-7 requires an NRSRO, for any report accompanying a
credit rating relating to an asset-backed security as defined in
the Rule, to include a description of the representations,
warranties and enforcement mechanisms available to investors and a
description of how they differ from the representations,
warranties and enforcement mechanisms in issuances of similar
securities.
There is no Standard & Poor's 17g-7 Disclosure Report included in
this credit rating report because, in S&P's view, there are no
representations, warranties and enforcement mechanisms available
to investors.
PUERTO RICO: Moody's Downgrades GO Rating to 'Ba2'; Outlook Neg.
----------------------------------------------------------------
Moody's Investors Service has downgraded the general obligation
(GO) rating of the Commonwealth of Puerto Rico to Ba2 from Baa3.
Ratings that are capped by or linked to the commonwealth's GO
rating were also downgraded two notches, with the exception of the
Puerto Rico Aqueduct and Sewer Authority (PRASA) Revenue Bonds,
which were downgraded to Ba2 from Ba1. At the same time, Moody's
downgraded the Puerto Rico Sales Tax Financing Corporation's
(COFINA's) senior-lien bonds to Baa1 from A2 and its junior-lien
bonds to Baa2 from A3. The outlooks for ratings on the GO and the
related bonds, as well as the COFINA bonds, are negative. For the
ratings affected by this action, all of which were placed on
review on December 11, 2013, see the list at the end of this
report.
Summary Rating Rationale
The problems that confront the commonwealth are many years in the
making, and include years of deficit financing, pension
underfunding, and budgetary imbalance, along with seven years of
economic recession. These factors have now put the commonwealth in
a position where its debt load and fixed costs are high, its
liquidity is narrow, and its market access has become constrained.
In the face of these problems, the administration has taken strong
and aggressive actions to control spending, reform the retirement
systems, reduce debt issuance, and promote economic development.
Despite these accomplishments, however, in our view the
commonwealth's credit profile is no longer consistent with
investment grade characteristics.
While some economic indicators point to a preliminary
stabilization, Moody's do not see evidence of economic growth
sufficient to reverse the commonwealth's negative financial
trends. Without an economic revival, the commonwealth will face
difficult decisions in coming years, as its debt and pension costs
rise. The negative outlook signals the remaining challenges facing
the commonwealth.
The commonwealth's general obligation bonds and all the notched
and related ratings were downgraded by two notches, with the
exception of the Puerto Rico Aqueduct and Sewer Authority (PRASA)
Revenue Bonds, which were downgraded one notch, to Ba2. This
brings them to the same rating as the commonwealth general
obligation rating, which reflects recent rate increases enacted by
the legislature that will improve net revenues and are expected to
reduce the authority's reliance on commonwealth support.
Credit Strengths
Politically and economically linked to the US, with benefit of the
nation's strong financial, legal, and regulatory systems
Large economy, with gross product exceeding that of 15 US states
and population exceeding that of 22 US states
Broad legal powers to raise revenues, adjust spending programs,
and borrow to maintain fiscal solvency
Major actions taken to stabilize commonwealth finances, including
significant reform to main pension system, and tax increases to
reduce budget deficit
Credit Challenges
Ongoing economic weakness due to long-term decline in dominant
manufacturing sector, decreased competitiveness as a result of
expired federal tax benefits, and high energy costs
Dependence on capital markets financing to fund operating expenses
and debt service during period of increased risk of reduced market
access
Very large unfunded pension liabilities relative to revenues, even
after major reforms to two main plans that helped reduce cash-flow
pressure
Very high government debt, equal to more than 50% of gross
domestic product
Multi-year trend of large general fund operating deficits relative
to revenues, financed by deficit borrowing
Action Affects Multiple Credits
The downgrade and negative outlook affect general obligation bonds
of the commonwealth and of related entities listed below.
Downgraded To Ba2 From Baa3
General obligation bonds
Public Building Authority Bonds
Pension funding bonds
Puerto Rico Infrastructure Finance Authority (PRIFA) Special Tax
Revenue Bonds
Convention Center District Authority Hotel Occupancy Tax Revenue
Bonds
Government Development Bank (GDB) Senior Notes
Municipal Finance Authority (MFA) Bonds
Puerto Rico Highway and Transportation Authority (PRHTA)
Transportation Revenue Bonds
Puerto Rico Aqueduct and Sewer Authority (PRASA) Commonwealth
Guaranteed Bonds
Downgraded To Ba2 From Ba1
Puerto Rico Aqueduct and Sewer Authority (PRASA) Revenue Bonds
Downgraded To Baa1 From A2
Commonwealth of Puerto Rico Sales Tax Financing Corporation Senior
Lien Bonds
Downgraded To Baa2 From A3
Commonwealth of Puerto Rico Sales Tax Financing Corporation Junior
Lien Bonds
Downgraded To Ba1 From Baa2
Puerto Rico Highway and Transportation Authority (PRHTA) Highway
Revenue Bonds
Downgraded To Ba3 From Ba1
Puerto Rico Public Finance Corporation (PRPFC) Commonwealth
Appropriation Bonds
Puerto Rico Highway and Transportation Authority (PRHTA)
Subordinate Transportation Revenue Bonds
Outlook
The rating outlook is negative, based on our expectation of
continued economic stagnation or decline. The outlook also
incorporates continuing demands on liquidity, increased
refinancing risk and constrained market access.
What Could Make The Rating Go Up
Strong rebound in economic growth leading to improved and
sustained financial performance
A trend of declining debt
What Could Make The Rating Go Down
Evidence of further constraints on market access or significant
further weakening of GDB liquidity
Indication that total fixed costs, including pension contributions
and debt service on bonded debt, have become unaffordable
Steep growth in structural budget gap and an increase in GAAP
deficits, solved with non-recurring solutions
Economic weakness resulting in declining revenues and continued
out-migration
Reacceleration of growth in government debt
The principal methodology used in rating the Puerto Rico Sales Tax
Financing Corporation bonds was the US Public Finance Special Tax
Methodology published in March 2012. The principal methodology
used in rating the other Puerto Rico (Commonwealth of) bonds was
the US States Rating Methodology published in April 2013. The
additional methodology used in rating the Government Development
Bank for Puerto Rico was Rating Transactions Based on the Credit
Substitution Approach: Letter of Credit backed, Insured and
Guaranteed Debts published in March 2013. The additional
methodology used in rating the Puerto Rico Public Finance
Corporation appropriation debt was The Fundamentals of Credit
Analysis for Lease-Backed Municipal Obligations published in
December 2011. The additional methodology used in rating the
Puerto Rico Highway and Transportation Authority bonds, the Puerto
Rico Convention Center Authority Hotel Occupancy Tax Revenue bonds
and the Puerto Rico Infrastructure Finance Authority Special Tax
Revenue bonds was the US Public Finance Special Tax Methodology
published in March 2012. The additional methodology used in rating
the Puerto Rico Aqueduct and Sewer Authority was the Analytical
Framework for Water and Sewer System Ratings published in August
1999.
=================
V E N E Z U E L A
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VENEZUELA: Fitch Says Performance Deterioration Expected for Banks
------------------------------------------------------------------
Some performance deterioration in 2014 is expected for Venezuelan
banks due to severe macroeconomic imbalances, which will
contribute to operating environment risks, according to a Fitch
Ratings report.
"A seasoning of credit portfolios, following high nominal loan
growth that has exceeded more than 40% on average over the past
three years could also result in a deterioration of Venezuelan
banks' credit metrics," said Theresa Paiz Fredel, Senior Director,
Financial Institutions.
"Further government regulations and intervention could create
additional challenges."
Nevertheless, absent a material increase in government
intervention or a severe macroeconomic adjustment, bank financial
metrics should remain well within the norm of similarly rated
peers.
Venezuelan banks have a large, negative mismatch between short-
term assets and liabilities, while funding greater than one year
is limited. However, this position is manageable under Venezuela's
current scheme of foreign exchange controls.
Weaker profitability and internal capital generation could
pressure capital ratios in the short term if growth does not
decelerate from current levels.
Asset quality ratios have been stable to improving as nominal
gross loan growth, driven by high inflation, has significantly
outpaced growth of restructured and impaired loans.
Many banks have been proactively increasing reserves for impaired
loans in order to face current macroeconomic imbalances. Given
unseasoned loan growth, however, an economic shock could easily
reverse asset quality trends.
=================
X X X X X X X X X
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BOND PRICING: For the Week From Feb. 3 to Feb. 7, 2014
------------------------------------------------------
Issuer Coupon Maturity Currency Price
------ ------ -------- -------- -----
Aguas Andinas SA 4.15 12/1/2026 CLP 72.61
Aguas Andinas SA 4.15 12/1/2026 CLP 69.55
Almendral
Telecomunicaciones SA 3.5 12/15/2014 CLP 22.19
Argentina Bocon 2 1/3/2016 ARS 9.05
Argentina Bocon 2 3/15/2014 ARS 13.8
Argentina Boden Bonds 2 9/30/2014 ARS 55.13
Argentine International Bond 7.82 12/31/2033 EUR 67.75
Argentine International Bond 7.82 12/31/2033 EUR 66.7
Argentine International Bond 8.28 12/31/2033 USD 67.5
Argentine International Bond 1.18 12/31/2038 ARS 42.26
Argentine International Bond 8.28 12/31/2033 USD 70.5
Argentine International Bond 7.82 12/31/2033 EUR 67.63
Argentine International Bond 8.28 12/31/2033 USD 71.5
Argentine International Bond 4.33 12/31/2033 JPY 39.5
Argentine International Bond 4.33 12/31/2033 JPY 39.5
Argentine International Bond 0.45 12/31/2038 JPY 15.5
Argentine International Bond 8.28 12/31/2033 USD 69
Automotores Gildemeister SA 6.75 1/15/2023 USD 72.14
BA-CA Finance Cayman 2 Ltd 1.838 EUR 68.5
BCP Finance Co Ltd 5.543 EUR 50.75
BCP Finance Co Ltd 4.239 EUR 50.42
BES Finance Ltd 4.5 EUR 71.17
Banco BPI SA/Cayman Islands 4.15 11/14/2035 EUR 57.38
Banco BVA SA 9.125 2/7/2014 USD 10.01
Banif Finance Ltd 1.663 EUR 44
Bank Austria Creditanstalt
Finance Cayman Ltd 2.156 EUR 68.25
Bolivarian Republic
of Venezuela 9.25 9/15/2027 USD 73.68
Bolivarian Republic of
Venezuela 7 3/31/2038 USD 60.12
CA La Electricidad
de Caracas 8.5 4/10/2018 USD 74.7
Caixa Geral De
Depositos Finance 1.064 EUR 41.14
Caixa Geral De
Depositos Finance 1.094 EUR 39
China Forestry
Holdings Co Ltd 10.25 11/17/2015 USD 38.6
China Forestry
Holdings Co Ltd 10.25 11/17/2015 USD 36.5
China Precious Metal
Resources Holdings Co Ltd 7.25 2/4/2018 HKD 69.78
Cia Cervecerias Unidas SA 4 12/1/2024 CLP 55.51
Cia Sud Americana
de Vapores SA 6.4 10/1/2022 CLP 65.75
Transener S.A 9.75 8/15/2021 USD 68
Transener S.A 9.75 8/15/2021 USD 67.13
City of Buenos
Aires Argentina 3.95 5/17/2019 USD 73
ERB Hellas Cayman
ERB Hellas Cayman Islands Ltd 9 3/8/2019 EUR 56
ESFG International Ltd 5.753 EUR 59
Empresa Distribuidora
Y Comercializadora Norte 9.75 10/25/2022 USD 66.5
Empresa Distribuidora
Y Comercializadora Norte 10.5 10/9/2017 USD 64.5
Empresa Distribuidora
Y Comercializadora Norte 9.75 10/25/2022 USD 63.63
Formosa Province of Argentina 5 2/27/2022 USD 71.25
Gol Finance 8.75 USD 67.5
Gol Finance 8.75 USD 67.38
Hidili Industry International
Development Ltd 8.6 11/4/2015 USD 75.63
Inversiones Alsacia SA 8 8/18/2018 USD 72.53
Inversora de Electrica
de Buenos Aires SA 6.5 9/26/2017 USD 43.75
MTR Corp Cayman Islands Ltd 3.25 3/12/2043 HKD 73.01
MTR Corp Cayman Islands Ltd 3.25 1/28/2043 HKD 72.13
Petroleos de Venezuela SA 6 11/15/2026 USD 55.75
Petroleos de Venezuela SA 5.37 4/12/2027 USD 53.25
Petroleos de Venezuela SA 5.25 4/12/2017 USD 72
Petroleos de Venezuela SA 9.75 5/17/2035 USD 70
Petroleos de Venezuela SA 9 11/17/2021 USD 73
Petroleos de Venezuela SA 5.5 4/12/2037 USD 50
Petroleos de Venezuela SA 6 11/15/2026 USD 55.16
Petroleos de Venezuela SA 9 11/17/2021 USD 71.46
Petroleos de Venezuela SA 9.75 5/17/2035 USD 68.66
Provincia del Chaco 4 11/4/2023 USD 62.38
Provincia del Chaco 4 12/4/2026 USD 33
Renhe Commercial Holdings
Co Ltd 13 3/10/2016 USD 69.13
Renhe Commercial
Holdings Co Ltd 11.75 5/18/2015 USD 72.38
Renhe Commercial
Holdings Co Ltd 13 3/10/2016 USD 69.88
Renhe Commercial
Holdings Co Ltd 11.75 5/18/2015 USD 72.38
SMU SA 7.75 2/8/2020 USD 73.03
SMU SA 7.75 2/8/2020 USD 72.63
Sifco SA 11.5 6/6/2016 USD 33.5
Talca Chillan Sociedad
Concesionaria SA 2.75 12/15/2019 CLP 55.64
Venezuela International Bond 7.75 10/13/2019 USD 71.75
Venezuela International Bond 9 5/7/2023 USD 70
Venezuela International Bond 9.375 1/13/2034 USD 69.75
Venezuela International Bond 7 12/1/2018 USD 73.75
Venezuela International Bond 9.25 5/7/2028 USD 69
Venezuela International Bond 8.25 10/13/2024 USD 66
Venezuela International Bond 7.65 4/21/2025 USD 64.25
Venezuela International Bond 6 12/9/2020 USD 64.25
Venezuela International Bond 9.25 9/15/2027 USD 72.25
Venezuela International Bond 7 3/31/2038 USD 60.5
Virgolino de Oliveira
Finance Ltd 10.5 1/28/2018 USD 67
Virgolino de Oliveira
Finance Ltd 11.75 2/9/2022 USD 66.45
Virgolino de Oliveira
Finance Ltd 10.5 1/28/2018 USD 65
Virgolino de Oliveira
Finance Ltd 11.75 2/9/2022 USD 65.13
***********
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
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***********
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.
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Chapman, Editors.
Copyright 2014. All rights reserved. ISSN 1529-2746.
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