/raid1/www/Hosts/bankrupt/TCRLA

/raid1/www/Hosts/bankrupt/TCRLA_Public/140324.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, March 24, 2014, Vol. 15, No. 58 Headlines A R G E N T I N A ARGENTINA: Posts Biggest Annual Current Account Gap Since 2000 CAPEX S.A.: S&P Affirms 'B-' Local Currency Rating; Outlook Neg. B R A Z I L MINERVA S.A.: Fitch Rates Local Currency IDR at 'BB-' C A Y M A N I S L A N D S GELSOMINA FINANCE: Placed Under Voluntary Wind-Up HIGGS CAPITAL: Creditors' Proofs of Debt Due April 10 MAPLE LEAF 7: Placed Under Voluntary Wind-Up MAPLE LEAF 8: Placed Under Voluntary Wind-Up MAPLE LEAF 9: Placed Under Voluntary Wind-Up MAPLE LEAF 10: Placed Under Voluntary Wind-Up OROX CAPITAL: Creditors' Proofs of Debt Due March 31 PRAGMA UNIVERSAL: Creditors' Proofs of Debt Due April 11 PRAGMA UNIVERSAL 3: Creditors' Proofs of Debt Due April 11 SWAN ABSOLUTE: Placed Under Voluntary Wind-Up C O S T A R I C A INSTITUTO COSTARRICENSE: Fitch Affirms IDR at 'BB+' C O L O M B I A * COLOMBIA: To Get US$12MM IDB Loan to Improve Tax Collection D O M I N I C A * DOMINICA: Raises EC$20 Million on Regional Securities Market G U A T E M A L A BANCO INDUSTRIAL: S&P Affirms LT ICR at 'BB'; Outlook Stable M E X I C O BANCO AZTECA: Moody's Assigns D- Standalone Bank Financial Rating CORPORACION GEO: Files for Bankruptcy in Mexico FINANCIERA INDEPENDENCIA: S&P Revises Outlook & Affirms B+ Rating P E R U CORPORACION PESQUERA: Fitch Affirms FC IDR at 'B+'; Outlook Stable X X X X X X X X X BOND PRICING: For the Week From March 17 to March 21, 2014 - - - - - ================= A R G E N T I N A ================= ARGENTINA: Posts Biggest Annual Current Account Gap Since 2000 -------------------------------------------------------------- Charlie Devereux at Bloomberg News reports that Argentina posted the biggest current account deficit last year since 2000, the year before it defaulted on a record US$95 billion in debt. The South American nation had US$4.33 billion deficit last year, the national statistics agency said, according to Bloomberg News. That's the biggest since a US$9 billion gap in 2000. For the fourth quarter, Argentina had a current account deficit of US$1.7 billion, beating the US$1.4 billion median estimate of six analysts surveyed by Bloomberg. Bloomberg News notes that Argentina in January devalued the peso 19 percent to boost exports and is seeking to mend relations with international investors in a bid to issue debt for the first time since the default with reserves at a seven-year low. Government spending jumped 46 percent in January even after Argentina in 2013 posted the biggest primary budget deficit in at least 21 years, Bloomberg News relates. "It's not going to be easy to reverse this situation," Bloomberg News quoted Mariano Lamothe, an economist at abeceb.com in Buenos Aires, as saying. "The government is already addressing the issue of the external account but now it needs to deal with the fiscal deficit." The deficit was led by repayment of debt and multinationals repatriating dividends, Mr. Lamothe said, Bloomberg News notes. Since 2010, President Cristina Fernandez de Kirchner's government, which has avoided borrowing internationally at rates that would be among the highest in emerging markets, has drained reserves to US$27.3 billion to pay foreign-currency obligations, says the report. Argentina's trade surplus fell 92 percent to US$44 million in February from the same period a year earlier as grain exports fell 54 percent and fuel imports rose 43 percent, Bloomberg News reports. Argentina's trade surplus of US$33 million in January was the smallest since 2001, Bloomberg News discloses. According to Bloomberg, consumer prices rose 3.4 percent in February, the highest monthly gain in the region after the government introduced a new inflation index Feb. 13 to assuage criticism by the International Monetary Fund that it misreports economic data. Locked out of international debt markets since the default in 2001, the government is seeking to repair relations with the IMF, World Bank and the Paris Club of creditors to access new financing, Bloomberg News relays. President Fernandez has promoted measures to curb the decline in foreign currency holdings used to pay international creditors, including raising a tax on credit-card purchases abroad for Argentines and promoting a bill to raise taxes on luxury imports, Bloomberg News notes. The capital account deficit was US$1.9 billion in the fourth quarter of 2013 and US$3.9 billion in 2013, the statistics agency said, Bloomberg News adds. CAPEX S.A.: S&P Affirms 'B-' Local Currency Rating; Outlook Neg. ---------------------------------------------------------------- Standard & Poor's Ratings Services affirmed its 'B-' local currency and 'CCC+' foreign currency ratings on CAPEX S.A. The outlook remains negative. The 'B-' local currency rating reflects S&P's expectation that the company will continue to honor its financial obligations under stressful conditions associated with a sovereign default thanks to its dollar-denominated cash holdings. On the other hand, the 'CCC+' foreign currency rating is limited by Standard & Poor's Transfer and Convertibility Assessment on Argentina, which is currently at 'CCC+'. The ratings also reflect S&P's view of CAPEX's "vulnerable" business risk profile and its "aggressive" financial risk profile. S&P's analysis incorporates the high regulatory risk the company faces in Argentina and low electricity prices compared with those across the region. "However, CAPEX's integrated business as a power producer, which has its own natural gas production, and supplies part of its power plant fuel needs, partly offsets these negative factors. CAPEX also benefits from its oil and liquid processed natural gas operations that continue to be the main contributors of its EBITDA generation, and from a debt maturity profile with no significant maturities until 2018 when its $200 million notes mature, which adds some flexibility in the short term," said Standard & Poor's credit analyst Andrea Zombory. =========== B R A Z I L =========== MINERVA S.A.: Fitch Rates Local Currency IDR at 'BB-' ----------------------------------------------------- Fitch Ratings has assigned an expected rating of 'BB-'(Exp) to Minerva Luxembourg S.A.'s proposed perpetual notes. The purpose of the notes is to repay outstanding indebtedness and for general purpose. The notes are issued by Minerva Luxembourg S.A. and guaranteed by Minerva S.A. The notes will be unsecured, unsubordinated obligations of the issuer and will rank equally in right of payment with unsecured and unsubordinated indebtedness. The notes are perpetual with no fixed final maturity date and will be repaid only in the event the issuer redeems or repurchases the notes or upon acceleration following an event of default. Key Rating Drivers Positive Industry Fundamentals The fundamentals of the Brazilian beef industry remain positive due to the abundant cattle herd, low cost structure and positive revenue momentum derived from strong revenue growth from exports, a situation that Fitch does not expect to change in the short- term. The industry has been through a consolidation process over the last few years that culminated in the creation of three large export players. Fitch expects this consolidation process to give more stability to the industry at the end of the positive cattle cycle in Brazil. Positive Performance Minerva reported improving revenues and EBITDA in 2013. The company's net revenue reached BRL5.5 billion in 2013, which is 25% higher than in 2012. The beef division performed well during the year with domestic sales growing by 17% and exports increasing by 29%. Minerva's EBITDA increased 16% to BRL551 million from BRL475 million in 2012. EBITDA margins remained relatively flat at 10.1% compared to 10.3% in 2012. The company benefits from a comfortable liquidity position with cash and cash equivalents of BRL1.5 billion. The next material maturity date is 2023 when the USD850 million unsecured notes are due. Improve Credit Metrics Expected Fitch expects Minerva's net debt to EBITDA ratio to improve toward or below 3x over the next two years (3.3x as of the FYE13), as a result of improved EBITDA due to strong international demand for beef and the company's focus on free cash flow generation despite bolt-on acquisition to increase its production capacity. During 2013 the company, inaugurated two distribution centers (of a total of six to be opened by 2015), started the investments for the expansion of Minerva Fine Foods and announced the acquisition of two plants from BRF in Mato Grosso State. In early 2014, the company announced the acquisition of a slaughtering and deboning plant in Janauba, Minas Gerais state for BRL40 million and in Uruguay, of Frigorifico Matadero Carrasco S.A. for USD37 million. Product and Country Concentration Risks The ratings incorporate risks associated with geographic and product concentration in beef protein. Being mainly an exports company, Minerva's performance is exposed to exchange rate variations; a downturn in the economy of a given export market; imposition of increased tariffs or commercial or sanitary barriers; strikes or other events that may affect the availability of ports and transportation. Minerva is more exposed to these risks than Brazilian competitors such as JBS S.A. and Marfrig S.A. because of its higher export concentration. Exports represented about 70% of revenues at FYE13. Rating Sensitivities A negative rating action could occur as a result of a sharp contraction of the group's performance, increased of net leverage as a result of either a large debt-financed acquisition, or as a result of a sharp operational deterioration due to disruptions in exports. A positive rating action could be triggered by additional geographic and protein diversification and substantial decrease in gross and net leverage. Fitch rates the following: Minerva S.A.: -- Local Currency Issuer Default Rating (IDR) 'BB-'; -- Foreign currency IDR 'BB-'; -- National scale rating 'A-(bra) '; Minerva Luxembourg S.A.: -- Local currency IDR 'BB-' '; -- Foreign currency IDR 'BB-''; -- Senior unsecured notes due in 2017, 2019, 2022 and 2023 'BB-'. -- Perpetual notes 'BB-' (Exp) The corporate Rating Outlook is Stable. ========================== C A Y M A N I S L A N D S ========================== GELSOMINA FINANCE: Placed Under Voluntary Wind-Up ------------------------------------------------- On Feb. 19, 2014, the shareholders of Gelsomina Finance Limited resolved to voluntarily wind up the company's operations. Creditors are required to file their proofs of debt to be included in the company's dividend distribution. The company's liquidator is: Commerce Corporate Services Limited P.O. Box 694 Grand Cayman Telephone: 949 8666 Facsimile: 949 0626 HIGGS CAPITAL: Creditors' Proofs of Debt Due April 10 ----------------------------------------------------- The creditors of Higgs Capital Master Fund Limited are required to file their proofs of debt by April 10, 2014, to be included in the company's dividend distribution. The company commenced liquidation proceedings on Feb. 27, 2014. The company's liquidator is: Highwater Limited c/o Nicole Gagliano Telephone: (345) 943 2295 Facsimile: (345) 943 2294 Grand Pavilion Commercial Centre 1st Floor, 802 West Bay Road P.O. Box 31855 Grand Cayman KY1-1207 Cayman Islands MAPLE LEAF 7: Placed Under Voluntary Wind-Up -------------------------------------------- At an extraordinary general meeting held on Feb. 19, 2014, the shareholders of Maple Leaf Leasing 7 Limited resolved to voluntarily wind up the company's operations. Creditors are required to file their proofs of debt to be included in the company's dividend distribution. The company's liquidator is: Commerce Corporate Services Limited P.O. Box 694 Grand Cayman Telephone: 949 8666 Facsimile: 949 0626 MAPLE LEAF 8: Placed Under Voluntary Wind-Up -------------------------------------------- At an extraordinary general meeting held on Feb. 19, 2014, the shareholders of Maple Leaf Leasing 8 Limited resolved to voluntarily wind up the company's operations. Creditors are required to file their proofs of debt to be included in the company's dividend distribution. The company's liquidator is: Commerce Corporate Services Limited P.O. Box 694 Grand Cayman Telephone: 949 8666 Facsimile: 949 0626 MAPLE LEAF 9: Placed Under Voluntary Wind-Up -------------------------------------------- At an extraordinary general meeting held on Feb. 19, 2014, the shareholders of Maple Leaf Leasing 9 Limited resolved to voluntarily wind up the company's operations. Creditors are required to file their proofs of debt to be included in the company's dividend distribution. The company's liquidator is: Commerce Corporate Services Limited P.O. Box 694 Grand Cayman Telephone: 949 8666 Facsimile: 949 0626 MAPLE LEAF 10: Placed Under Voluntary Wind-Up --------------------------------------------- At an extraordinary general meeting held on Feb. 19, 2014, the shareholders of Maple Leaf Leasing 10 Limited resolved to voluntarily wind up the company's operations. Creditors are required to file their proofs of debt to be included in the company's dividend distribution. The company's liquidator is: Commerce Corporate Services Limited P.O. Box 694 Grand Cayman Telephone: 949 8666 Facsimile: 949 0626 OROX CAPITAL: Creditors' Proofs of Debt Due March 31 ---------------------------------------------------- The creditors of Orox Capital Management are required to file their proofs of debt by March 31, 2014, to be included in the company's dividend distribution. The company commenced liquidation proceedings on Feb. 24, 2014. The company's liquidator is: Appleby Trust (Cayman) Ltd. c/o George Bashforth Telephone: +1 (345) 949 4900 75 Fort Street P.O. Box 1350, George Town Grand Cayman KY1-1108 Cayman Islands PRAGMA UNIVERSAL: Creditors' Proofs of Debt Due April 11 -------------------------------------------------------- The creditors of Pragma Universal Fund Limited are required to file their proofs of debt by April 11, 2014, to be included in the company's dividend distribution. The company commenced liquidation proceedings on Feb. 19, 2014. The company's liquidator is: KRyS Global, Governors Square Building 6, 2nd Floor 23 Lime Tree Bay Avenue P.O. Box 31237 Grand Cayman KY1-1205 c/o Christopher Smith Telephone: (345) 947 4700 PRAGMA UNIVERSAL 3: Creditors' Proofs of Debt Due April 11 ---------------------------------------------------------- The creditors of Pragma Universal Fund (Series Three) Limited are required to file their proofs of debt by April 11, 2014, to be included in the company's dividend distribution. The company commenced liquidation proceedings on Feb. 14, 2014. The company's liquidator is: KRyS Global, Governors Square Building 6, 2nd Floor 23 Lime Tree Bay Avenue P.O. Box 31237 Grand Cayman KY1-1205 c/o Christopher Smith Telephone: (345) 947 4700 SWAN ABSOLUTE: Placed Under Voluntary Wind-Up --------------------------------------------- On Feb. 28, 2014, the sole member of Swan Absolute Return Fund Limited resolved to voluntarily wind up the company's operations. Only creditors who were able to file their proofs of debt by March 10, 2014, will be included in the company's dividend distribution. The company's liquidator is: Consuelo Nardon Telephone: +31 88 146 0100 c/o Arcari Fund Solutions BV Suikersilo-Oost 21 1165 MS Halfweg The Netherlands ==================== C O S T A R I C A ==================== INSTITUTO COSTARRICENSE: Fitch Affirms IDR at 'BB+' --------------------------------------------------- Fitch Ratings has affirmed Instituto Costarricense de Electricidad y Subsidiarias' (Grupo ICE) foreign and local-currency Issuer Default Ratings (IDRs) at 'BB+' as well as its national scale ratings at 'AAA(cri)' and 'AAA(slv)'. The Rating Outlook is Stable. Concurrently, Fitch affirmed Compania Nacional de Fuerza y Luz's (CNFL) ratings at 'AAA(cri)'. Key Rating Drivers Grupo ICE's ratings are supported by the company's linkage to the Sovereign rating of Costa Rica (FC and LC IDRs rated 'BB+'/Stable Outlook by Fitch) which stems from government ownership. The link between Grupo ICE and the government also reflects the company's political risk resulting from its tariff approval process and government-mandated strategy to assure the country's electric supply, which temper the ratings to that of the sovereign. The ratings also reflect the government's implicit and explicit support, the company's diversified portfolio of assets, and its adequate financial profile. Also factored into Grupo ICE's ratings is its aggressive capital expenditure program oriented toward increasing renewable generation capacity and maintaining a strong market share position in the telecommunications business. Diversified Asset Portfolio: Grupo ICE has a diversified portfolio of assets and a strong business position in electricity and telecommunications markets in Costa Rica. The ratings reflect the company's low business risk resulting from its business diversification and positive characteristics as a utility service provider. Grupo ICE has a legal monopoly in the electricity sector in Costa Rica. The issuer is the largest power generator and electric distribution company in the country. As of year-end 2013, Grupo ICE had an installed electric generation capacity of 2,067 megawatts (MW) (national capacity of 2,731MW) and was the exclusive owner of the national transmission grid. The national electric industry includes private generation, municipal distribution and electric cooperatives that can generate energy in coordination with Grupo ICE or sell their energy to Grupo ICE. The company is expected to remain a leader in the telecommunications industry in the country, notwithstanding recent changes that opened the industry to competition. Although this has resulted in increased competition, it is also expected to enhance regulatory transparency. ICE's market share in terms of subscribers is approximately 100% in fixed telephony and 70% in mobile. During the last 12 months (LTM) ended September 2013, the company generated revenues and EBITDA of CRC1,314,436 million and CRC388,299 million, respectively (CRC1,184,950 million and CRC326,506 million in year 2012). The company's electricity segment represented approximately 61% of revenues, with the telecommunications division contributing the rest. Fitch expects ICE's electricity business to increase its contribution given current and future expansion projects, as well as its relatively stable results in the telecommunications segment. Moderated Leverage Driven By Capex: Grupo ICE's ratings reflect the company's moderate leverage and adequate interest coverage, yet with some exposure to foreign exchange risk. In the last few years, the company's leverage weakened as a result of the ongoing large capital expenditures program, which has been financed mainly with debt. Fitch expects the company will be able to reduce leverage as new generation projects, such as PH Reventazon, come online in the next few years, absent significant changes in the tariff scheme. As of September 2013, Grupo ICE reported consolidated debt of USD3.5 billion, of which USD352 million was short-term and nearly 79% was denominated in USD. The company benefits from a very favorable debt maturity schedule - only 32% of total financial debt matures in the next five years. For the LTM ended September 2013, financial leverage, as measured by total adjusted debt-to- EBITDAR, totaled 5.1x (vs. 5.8x in December 2012). Aggressive Capital Expenditure Plan: Grupo ICE's capital investment plan is considered aggressive and could weaken the company's financial profile, without increased cash flow generation and adequate tariff adjustments. The company plans to invest approximately USD3.7 billion over the next five years to increase renewable generation capacity and maintain its leadership position in telecommunications in Costa Rica. Going forward, Grupo ICE's credit metrics could deteriorate significantly. Leverage could increase consistently to over 6.0x if the company finances its capital investment plan heavily with debt and the revenues associated with these investments are delayed beyond the expected ramp-up timeframe or do not receive tariff adjustments. Grupo ICE expects to finance its investments with a combination of internal cash flow, debt, Build Operate and Transfer (BOT) transactions, project finance vehicles and operating leases. High Exposure To Regulatory And Political Interference: Grupo ICE is highly exposed to regulatory interference risk given the lack of clear and transparent electricity tariff schedules. Each year, the company proposes electricity tariffs for end-users to the regulator; in previous years, regulatory and political interference affected the tariff adjustment process. Since 2013, tariffs reflect fossil fuel cost variations on a quarterly basis. This change had a positive impact on Grupo ICE's cash generation and reduced its exposure to hydrology risk. Previously, tariffs did not fully recognize the company's moderate exposure to fuel prices which is borne by its thermoelectric generation business (8%-10% of annual generation on average). The recent Telecom regulatory framework considers changes in tariffs and competition rules. Fitch expects that new regulations could enhance regulatory transparency. Nevertheless, telecommunications tariffs have been unchanged since 2006. Despite the regulatory risk, Grupo ICE has managed to maintain relative stable cash flow generation. Also, the company is exposed to political interference given that the government appoints and removes ICE's directors and executives, sets and approves the company's tariffs, and regulates its budget. Ratings Sensitivity -- Grupo ICE's ratings could be negatively affected by any combination of the following factors: sovereign downgrades; weakening of legal, operational and/or strategic ties with the government; or regulatory intervention that negatively affects the company's financial performance. -- Grupo ICE's ratings could be positively affected by an upgrade of Costa Rica's sovereign rating, or if the company is materially isolated from government interference. Fitch has affirmed the following ratings for Grupo ICE: -- Long-term FC IDR at 'BB+'; Stable Outlook; -- Long-term LC IDR at 'BB+'; Stable Outlook; -- Senior unsecured debt at 'BB+'; -- Long-term national scale (Costa Rica) at 'AAA(cri)'; Stable Outlook; -- Senior unsecured domestic long-term debt (Costa Rica) at 'AAA(cri)'; Stable Outlook; -- Short-term debt at 'F1+(cri)'; -- Long-term national scale (El Salvador) at 'AAA(slv)'; Stable Outlook -- Senior unsecured domestic long-term debt (El Salvador) at 'AAA(slv)'. Fitch has also affirmed the following ratings for ICE Subsidiary, Compania Nacional de Fuerza y Luz S.A. (CNFL): -- Long-term national scale (Costa Rica) at 'AAA(cri)'; Stable Outlook; -- Senior unsecured domestic long-term debt (Costa Rica) at 'AAA(cri)'. =============== C O L O M B I A =============== * COLOMBIA: To Get US$12MM IDB Loan to Improve Tax Collection ------------------------------------------------------------- The Inter-American Development Bank (IDB) has approved a US$12 million loan to Colombia that will allow it to develop and implement a system of electronic invoicing, which will increase the country's tax and customs-duty collection capability and will ease Colombia's insertion into the international economy. The Promotion and Extension of an Electronic Invoice in Colombia will be a vital tool in the government's efforts to combat tax evasion, which in the case of VAT stands at about 25 percent. Besides reducing companies' costs in complying with tax regulations, electronic invoicing will enhance the interoperability of billing systems with other countries in the region, which will contribute to the goal of increasing and facilitating trade within Latin America. The project calls for the design and implementation of an electronic invoicing technological platform, and includes the provision of free computer services to small-and medium-size companies that are less developed from a business standpoint. The IDB loan for US$12 million will have a bullet repayment in 2029, a grace period of 15.25 years and an interest rate based on LIBOR. =============== D O M I N I C A =============== * DOMINICA: Raises EC$20 Million on Regional Securities Market -------------------------------------------------------------- Caribbbean360.com reports that Dominica raised EC$20 million on the Regional Government Securities Market (RGSM) on March 17, with with Prime Minister Roosevelt Skerrit saying it represents confidence in the policies of his administration. The money was raised at a record low 1.999 per cent through the first of a series of three 91-day Treasury Bill offerings, according to Caribbbean360.com. "Many countries in the developed world especially in Europe have had difficulty in raising monies at concessionary rates. The discount rate achieved in Monday's Treasury bill offering means that government can now raise the financing it needs at a lower cost to the taxpayers of Dominica," the report quoted Mr. Skerrit, who is also finance minister, as saying. Prime Minister Skerrit said his administration has had to grapple with Dominica's own challenges "but we have worked actively to build a strong platform for sustained economic growth." "Our prudent fiscal and economic policies have insulated the country from the more severe effects of the global recession," Prime Minister Skerrit added, the report notes. The report relates that a government statement said that the rate of 1.999% is 50 basis points below the previous record of 2.49 per cent. "Investors view the purchase of the 91 day Treasury bill as a low- risk investment opportunity. The low Treasury bill rate demonstrated the ability of the Government of Dominica to raise money at relatively low cost," the statement said, the report notes. It said that as a result, the government will seek to raise an additional EC$65 million on the RGSM through the remaining two, 91 day Treasury bills and one five year, EC$25 million bond, the report discloses. "This is to finance part of government's operating budget and refinance existing government debt, the interest rate on which is much higher than the interest rate government obtains on its Treasury bills. Treasury Bills present an avenue to invest outside of the normal banking system," the statement added, the report says. ================== G U A T E M A L A ================== BANCO INDUSTRIAL: S&P Affirms LT ICR at 'BB'; Outlook Stable ------------------------------------------------------------ Standard & Poor's Ratings Services affirmed its Long-term 'BB' and short-term 'B' issuer credit ratings on Banco Industrial S.A. (BI). The stand-alone credit profile (SACP) is 'bb+'. The outlook is stable. The ratings reflect BI's "strong" business position, S&P's "moderate" capital and earnings assessment, the bank's "moderate" risk position, "average" funding and "adequate" liquidity. The ratings on the Republic of Guatemala limit the ratings on the bank because, in S&P's view, neither BI nor its subsidiaries could withstand a liquidity shortage without any government support. Furthermore, BI is highly exposed to the sovereign. S&P's bank criteria uses its Banking Industry Country Risk Assessment (BICRA) economic risk and industry risk scores to determine a bank's anchor, the starting point in assigning an issuer credit rating (ICR). The anchor for a bank operating only in Guatemala is 'bb+'. In S&P's view, economic risk in Guatemala has not changed since its last revision. S&P's economic risk score reflects the country's limited fiscal flexibility, primarily stemming from a low tax base. Although sovereign debt levels will remain low relative to GDP, total debt will likely increase over the next several years unless the government successfully implements tax reforms and boosts GDP growth prospects. Poor economic performance has prevented any significant income improvements and continues to limit private-sector debt capacity, which, combined with significant foreign currency lending, results in very high credit risks in the economy. Industry risks in Guatemala have also remained unchanged. Recent amendments continue to strengthen the regulatory framework, and other projects, such as extending supervision over microfinance institutions, are in the pipeline. "Competitive dynamics" risks remain moderate thanks to the banking sector's sound profitability, a focus on traditional banking products, and absence of significant market distortions. Guatemala's banking system has a historically stable core customer deposit base and access to external credit lines, but the underdeveloped domestic capital debt markets constrain funding diversification. "The stable outlook mirrors that on the sovereign. We expect BI to keep its leading position in the Guatemalan banking system, and maintain its moderate capital and earnings during the next 12 to 18 months, while it expands its loan portfolio and boosts internal capital generation," said Standard & Poor's credit analyst Jesus Sotomayor. =========== M E X I C O =========== BANCO AZTECA: Moody's Assigns D- Standalone Bank Financial Rating ----------------------------------------------------------------- Moody's de Mexico assigned a D- (D minus) standalone bank financial strength rating (BFSR) to Banco Azteca, S.A. (Banco Azteca), which maps to a standalone baseline credit assessment (BCA) of ba3. At the same time, Moody's assigned long and short term local and foreign currency deposit ratings of Ba1/Not Prime, respectively, to the bank. Moody's also assigned long and short term Mexican National Scale deposit ratings of Aa3.mx/MX-2 to Banco Azteca. The outlook on all ratings is stable. List Of Ratings Assigned The following ratings were assigned to Banco Azteca: Bank financial strength rating of D- (D minus), stable outlook Long term local currency deposit rating: Ba1, stable outlook Short term local currency deposit rating: Not Prime Long term foreign currency deposit rating: Ba1, stable outlook Short term foreign currency deposit rating: Not Prime Long term Mexican National Scale rating: Aa3.mx, stable outlook Short term Mexican National Scale rating: MX-2 Ratings Rationale Standalone Ratings Banco Azteca's standalone BFSR of D- mapping to a ba3 standalone BCA takes into account the bank's strong market share in the consumer lending segment in Mexico, which is balanced by a higher risk profile overall. Particularly, Moody's cited the bank's strong know-how and specialization in providing financing to low- income consumers in Mexico Banco Azteca's deep knowledge and expertise in lending to a higher risk lending segment has allowed it to be among the largest consumer finance banks in Mexico. Moreover, Banco Azteca's core target segment provides good growth prospects given the large critical mass of potential customers inherent to this segment and because it is largely unattended by the large universal banks in Mexico. The rating agency also mentioned that Banco Azteca's nationwide branch network and synergies with retail subsidiaries of parent company Grupo Elektra, S.A.B. de C.V. (Elektra, Ba3 stable) have allowed it to build a defensible geographic footprint and attract an ample and stable base of low-cost core deposits. Moreover, the bank holds a good ability to generate ample and consistent intermediation spreads (NIM of 49.4% as of year-end 2013) from its core customers. Moody's noted that the bank's strong loan collection practices have been instrumental in limiting credit losses over time despite relative high NPLs that result from rapid growth of loans to high risk customers. However this also leads to high collection costs that consume around 80% of revenues, ultimately leading to profitability ratios that are in line with those of most universal banks in Mexico despite Azteca's higher NIM. Moody's also cited that while the bank has ample liquidity and its capitalization levels are relatively strong, with a reported Tier 1 ratio of 13.3% as of end 31 December 2013, the standalone BCA is nevertheless constrained by potential high credit risks posted by the bank's small, yet highly concentrated commercial portfolio composed of high-risk profile companies, and notable exposure to related-party loans. Effectively, these credit exposures offset the benefits derived from the bank's very granular consumer loan portfolio. Moody's noted that the bank's 20-largest credit exposures are significant at 183% Tier 1 capital. Loans to related parties increased to 48% of Tier 1 capital at the end of 2013, from a 3-year average of 31%. The high level of related-party lending, although within regulatory limits, underscores concerns in terms of potential risks in corporate governance stemming from the bank's closely-held family-based ownership structure, which could make it more difficult for the board or management to handle resulting conflicts of interest. Moody's also noted the negative trend in the bank's asset quality metrics derived from a still unseasoned microfinance business, which overall brought the bank's delinquency ratio to 8.35% at end 2013, from 6.52% a year before. While management has taken measures to reduce the level of delinquencies in its microfinance portfolio, the effectiveness of such measures is yet to be proven. Separately, additional deterioration in asset quality could result if the bank faces pressure to increase its consumer loan portfolio in order to support increased sales at Elektra stores. Deposit Ratings Banco Azteca's Ba1 deposit ratings benefit from two notches of uplift from the bank's standalone BCA of ba3, in line with Moody's assessment of high systemic support probability owing to the bank's important market share within the consumer lending business and focus on low income depositors, both of which the current government has prioritized as key sectors for increasing intermediation in Mexico. In terms of parental support, notwithstanding the important synergies between Banco Azteca and Elektra, the deposit rating incorporates no parent or group extraordinary support benefit because the holding company depends for nearly 70% of its revenues from Banco Azteca. The principal methodology used in this rating was Global Banks published in May 2013. The period of time covered in the financial information used to determine Banco Azteca's rating is between 1 January 2006 and 31 December 2013 (source: Moody's, Issuers' financial statements, CNBV and Banxico). The sources and items of information used to determine the rating include 2012 and 2013 interim financial statements (source: Moody's and Issuers' financial statements); year-end 2012 and 2013 audited financial statements (source: Moody's and Issuers' annual audited financial statements); information on market position (source: CNBV); regulatory capital information (source: Banxico). 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 M'xico. For further information on Moody's approach to national scale ratings, please refer to Moody's Rating Methodology published in October 2012 entitled "Mapping Moody's National Scale Ratings to Global Scale Ratings". The long term Mexican National Scale rating of Aa3.mx indicates issuers or issues with very strong creditworthiness relative to other domestic issuers. The short term Mexican National Scale rating of MX-2 indicates issuers or issues with above average ability to repay short-term senior unsecured debt obligations relative to other domestic issuers. Banco Azteca is headquartered in Mexico City. As of December 2013, it had Mx$100.3 billion in assets. CORPORACION GEO: Files for Bankruptcy in Mexico ----------------------------------------------- Amy Guthrie at The Wall Street Journal reports that Corporacion GEO SAB de CV said it filed for bankruptcy protection in Mexico with a prearranged restructuring plan it hopes will get the struggling company building again. In a statement, GEO SAB said several bank creditors and bondholders signed off on the plan, according to The Wall Street Journal. The WSJ notes that GEO SAB said the banks on board are Citigroup's Mexican unit, Banamex; HSBC; Mexican bank Banorte; Santander; Carlos Slim's Inbursa; and BBVA Bancomer. GEO SAB is one of three major Mexican home builders-along with Urbi Desarrollos Urbanos SAB and Desarrolladora Homex SAB -- struggling with serious cash restraints amid drastic changes in Mexico's low-income housing sector, the report notes. As reported in the Troubled Company Reporter on March 14, 2014, The WSJ said that Corporacion GEO SAB is preparing to file for bankruptcy protection in Mexico to restructure a roughly US$1.5 billion debt load that has brought its output to a near- standstill, people familiar with the company's plans said. According to the report, Geo, hurt by problems in Mexico's low- income housing sector, is preparing to file a streamlined bankruptcy in a Mexican court. The company was in talks with a creditor group on a US$200 million to US$300 million loan to fund its restructuring, some of these people said. Geo has been in talks for months with creditors based in Mexico, the U.S. and elsewhere, the people said. The company has negotiated with its bank lenders to reopen construction lines of financing that had been frozen, these people said, the report related. The funding would help Geo undertake more than 20 projects and essentially restart its construction business, they added. Geo's debt includes just over US$700 million in U.S. dollar-denominated bonds as well as loans from some of Mexico's biggest commercial banks, WSJ said. Last April, the WSJ recalls, Geo stopped making bond payments and fell behind on its loans. In May, Mexico's Infonavit, which originated three-quarters of Geo's mortgage loans, cut off payments to the builder to comply with court orders secured by creditors, the WSJ relays. Law360.com disclosed that Cleary Gottlieb Steen & Hamilton LLP will represent GEO SAB in its US$1.5 billion insolvency, the first of its kind under the country's recently revised bankruptcy laws. About Corporacion GEO Corporacion GEO Sab de CV, through its sunsidiaries, designs and contructs entry-level housing communities in Mexico and Chile. GEO acquires land, obtains permits, installs infrastructure improvements, and builds and markets hoising developments. Fitch Ratings downgraded Corporacion GEO, S.A. de C.V. (GEO)'s Foreign Currency Issuer Default Rating (IDR) to 'RD' from 'C' and Local Currency IDR to 'RD' from 'C'. The company's MXN400 million Certificados Bursatiles due 2014 is also downgraded to 'D(Mex)' from 'C(Mex).' FINANCIERA INDEPENDENCIA: S&P Revises Outlook & Affirms B+ Rating ----------------------------------------------------------------- Standard & Poor's Ratings Services revised its outlook on Financiera Independencia S.A.B. de C.V. SOFOM E.N.R. (Findep) to positive from stable. At the same time, S&P affirmed its 'B+' global scale and 'mxBBB/mxA-3' Mexican national scale ratings on the company. S&P also affirmed its 'B+' rating on Findep's $200 million senior unsecured notes due March 2015. The outlook revision reflects S&P's opinion that Findep has adequately addressed the causes that led to a deterioration of its loan portfolio in the past two years. S&P believes the company will improve its bottom-line results as it resumes loan portfolio growth, aligning the profitability and capitalization metrics with the risk it underwrites. S&P's ratings on Findep reflect its below-average asset quality metrics compared with those of its rated peers, the highly competitive market in which it operates, its moderate profitability, and the burden of intangibles in its adjusted capitalization. S&P continues to consider the company's business profile, underpinned by its good market position and geographic diversification, as well as its satisfactory liquidity risk management as positive rating factors. S&P considers Findep's below-average asset quality compared with those of its rated peers as its major rating weakness, reflecting the nature of its business--unsecured personal loans--and its riskier customer profiles. The revised policies and procedures for new originations since the fourth quarter of 2012 and the focus on early delinquencies improved the company's asset quality performance in 2013. Findep made additional enhancements to its origination and collection practices during the year, such as increasing the proportion of loans to the formal segments, cancelling unused revolving lines, and realigning incentives in its internal collection area. ======= P E R U ======= CORPORACION PESQUERA: Fitch Affirms FC IDR at 'B+'; Outlook Stable ------------------------------------------------------------------ Fitch Ratings has affirmed the ratings for Copeinca ASA (Copeinca) and its wholly-owned subsidiary Corporacion Pesquera Inca SAC (COPEINCA) as follows: Copeinca --Foreign Currency Issuer Default Rating (IDR) at 'B+'; Outlook Stable. Copeinca --Foreign Currency IDR at 'B+'; Outlook Stable; --USD250 million senior unsecured notes at 'B+/RR4'. The 'B+' rating reflects the strategic importance of Copeinca for China Fishery Group Limited (CFGL, 'BB-'/Outlook Negative), which is in process of refinancing its bridge loan and integrating its Peruvian operations with those of Copeinca. Importance of China Fishery: The 'B+' rating incorporates the strategic and material importance of Copeinca for CFGL due to its recent acquisition by CFGL. Fitch estimates that CFGL's Peruvian operations (including Copeinca) will represent about half of CFGL's total EBITDA. CFGL's credit profile has weakened following the acquisition of Copeinca ASA for USD778 million in August 2013. CFGL net leverage reached 4.9x at FYE13. Fitch understands that CFLG is working on its refinancing and aims to deleverage. Refinancing of CFGL: CFGL has proposed the delisting of Copeinca. CFGL is expected to refinance its bridge loan with its core banks with medium-to long-term bank loans. In Copeinca's bond documentation a merger, or Copeinca's providing guarantees, triggers the repayment of its outstanding bonds if bondholders do not provide a waiver. The repayment of these credits is expected to facilitate the integration of the Peruvian operations of both companies. Industry Risk and Product Concentration: Copeinca's ratings reflect the company's solid market position as the second largest producer in the Peruvian fishmeal industry, with a 10.7% fishing quota in Peru's northern zone. The ratings are constrained by seasonality, industry risks such as price fluctuation on fishmeal and fish oil products, climatic events such as El Nino and La Nina, and unexpected migrations of the anchovy biomass. The company's product and customer diversification are limited. Fishmeal and fish oil represent 100% of the company's sales, and China is the company's main market. Increased Leverage: Copeinca net leverage increased to 5.9x from 1.8x as a result of the decline of its operating performance in 2013 because of lower beginning inventory of fishmeal and fish oil from the second fishing season of 2012 due to significant reduction in the quota awarded (810,000 Metrics Tons [MT] in 2012 versus 2,500,000 in 2011). The deterioration of Copeinca's net leverage is also the consequence of an increase of its inventories, short-term borrowings and transfer of funds to intermediate holding company. Fitch notes an increase of USD220 million which is reported as an amount due from intermediate holding company in Copeinca's balance sheet as of FYE13 which follows its acquisition from China Fishery. Fitch expects Copeinca's performance to improve in 2014 thanks to an increase of its fishmeal production. Debt Structure and Short-Term debt: The group's liquidity position is more aggressive given Copeinca's increase of short-term debt and limited cash balance, which was reduced to USD8 million as of FYE13 from USD39 million in FYE12. Copeinca's debt includes USD250 million of unsecured notes due in 2017 and short-term debt, mainly working capital lines and inventory financing (USD130 million in total as of FYE13). Rating Sensitivities: Negative Rating Action: Factors that could result in a negative rating action include significant disruptions or failure of the integration of Copeinca's operations within CFGL. A further increase in net leverage of CFGL would also be viewed negatively, as would adverse performance due to climatic conditions, declining fishmeal and fish oil prices and weak liquidity position not supported by bank lines. Positive Rating Action: Factors that could trigger a positive rating action include a good visibility on the group's future financial and business strategy under the new shareholder structure with a significant reduction in leverage levels on a sustained basis. ================= X X X X X X X X X ================= BOND PRICING: For the Week From March 17 to March 21, 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 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. 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, and Peter A. Chapman, Editors. Copyright 2014. 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 * * *