/raid1/www/Hosts/bankrupt/TCRLA

/raid1/www/Hosts/bankrupt/TCRLA_Public/140403.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 Thursday, April 3, 2014, Vol. 15, No. 66 Headlines A N T I G U A & B A R B U D A LIAT: David Evans Confirmed as Chief Executive Officer A R G E N T I N A YPF SOCIEDADA: Moody's Assigns Caa1 Foreign Currency Bond Rating C A Y M A N I S L A N D S ABL CAPITAL: Creditors' Proofs of Debt Due April 30 DAR AL-ARKAN: Creditors' Proofs of Debt Due April 28 DRAWBRIDGE MINING: Creditors' Proofs of Debt Due April 28 EFG-HERMES: Creditors' Proofs of Debt Due April 28 EFG-HERMES MASTER: Creditors' Proofs of Debt Due April 28 EFG-HERMES MENA FI: Creditors' Proofs of Debt Due April 28 ELSWORTHY GENERAL: Creditors' Proofs of Debt Due April 25 FUKUOKA PREFERRED: Creditors' Proofs of Debt Due April 27 HB QUANTITATIVE: Creditors' Proofs of Debt Due April 25 MENA FI: Creditors' Proofs of Debt Due April 28 C O L O M B I A AVIANCA HOLDINGS: S&P Retains 'B' Rating on $300MM Unsecured Notes DEPARTMENT OF CALDAS: Fitch Upgrades Rating to 'BB (col)' D O M I N I C A N R E P U B L I C DOMINICAN REP: Electricity Fee Stays Put; Subsidy Soars to RD$1.2B M E X I C O GRUPO GAYOSSO: S&P Withdraws 'B+' CCR Due to Insufficient Info. GUADALUPE MUNICIPALITY: Fitch Assigns 'BB (mex)' Rating MAXCOM TELECOMUNICACIONES: S&P Raises Corp. Credit Rating to 'B-' MEXICALI MUNICIPALITY: Fitch Affirms 'BB + (mex)' Rating P U E R T O R I C O PUERTO RICO INFRASTRUCTURE: S&P Affirms 'BB' Rating; Off Watch V E N E Z U E L A MERCANTIL: Fitch Cuts LT Currency IDRs to 'B'; Outlook Neg. PROVINCIAL DE REASEGUROS: Fitch Assigns Initial 'B' IFS Rating X X X X X X X X X LATAM: IDB Sustainability Lending Hits US$2.8 Billion in 2013 - - - - - =============================== A N T I G U A & B A R B U D A =============================== LIAT: David Evans Confirmed as Chief Executive Officer ------------------------------------------------------ Trinidad Express reports that Leeward Islands Air Transport, known as LIAT, on March 31, confirmed the appointment of British national David Evans as its new chief executive officer, replacing Captain Ian Brunton, who resigned last September. LIAT said that its new chief executive, whose appointment becomes effective from April 22, "is a results-driven executive with more than 35 years of experience in senior roles within the aviation industry," according to Trinidad Express. As reported in the Troubled Company Reporter-Latin America on March 28, 2014, Caribbean360.com said several sources independently confirmed that Mr. Evans was approved following "internal checks" but the leaders of the four shareholder governments of LIAT are expected to ratify their choice. The report noted that Mr. Evans, from Knutsford in northwest English county of Cheshire, has worked with British Airways and two fledgling carriers in the Middle East, Nile Air Airlines in Egypt and Kuwait's Wataniya Airways. About LIAT Headquartered in V. C. Bird International Airport in Saint George Parish, Antigua, Leeward Islands Air Transport, known as LIAT, operates high-frequency interisland scheduled services serving 22 destinations in the Caribbean. The airline's main base is VC Bird International Airport, Antigua and Barbuda, with bases at Grantley Adams International Airport, Barbados and Piarco International Airport, Trinidad and Tobago. * * * As reported in the Troubled Company Reporter-Latin America on Jan. 3, 2012, Antigua Caribarena related that former Antigua Aviation Minister Robin Yearwood wants to see a merger between Leeward Islands Air Transport (LIAT) and the Trinidad and Tobago- owned Caribbean Airlines Limited, as he believes this is the only way the Antigua-based regional carrier can survive. Mr. Yearwood's call came against the background of media reports out of Port of Spain that suggested CAL's management may be eyeing expansion into the OECS territories, according to Antigua Caribarena. ================= A R G E N T I N A ================= YPF SOCIEDADA: Moody's Assigns Caa1 Foreign Currency Bond Rating ---------------------------------------------------------------- Moody's Investors Service has assigned Caa1 global foreign currency bond rating to YPF Sociedada Anonima's (YPF) proposed issuances of between USD 500 million and USD 1 billion in 10-year Obligaciones Negociables Clase XXVIII to be issued in Argentina, amortizing in years 8 (30%), 9 (30%) and 10 (40%). The rating outlook is stable. The proposed Obligaciones Negociables will be issued under YPF's medium term issuance program (Programa Global de Emisi▋ de T﹀ulos de Deuda de Mediano Plazo) registered on March 27, 2014 with Argentina's Comisi▋ Nacional de Valores (CNV) for an amount of maximum USD 5 billion. Ratings Rationale YPF's ratings are based on the company's strong financial track record under majority ownership and control of the Argentine government. Since the government of Argentina partially nationalized YPF in April 2012, YPF has successfully eliminated its exposure to change-of-control and/or nationalization clauses in its debt agreements, repaid maturing debt obligations and extended the company's debt maturity profile. The company has also demonstrated modest access to the international capital markets through an agriculture export financing structure and has signed a number of investment partnership agreements with international companies. Moody's acknowledges that YPF's track record since the nationalization is still fairly short and that the Argentina government has a history of interference in the energy sector, with several actions taken by the government indicating a highly unpredictable operating environment. Nevertheless, Moody's believes that one of the government's goals continues to be to keep YPF's financial strength intact. YPF's ratings reflect the application of Moody's joint default rating methodology for government-related issuers (GRIs). The Caa1 rating combines YPF's underlying baseline credit assessment of b3 rating, the Caa1 local currency rating and stable outlook of the Argentine government, moderate support and high dependence. YPF's underlying baseline credit assessment reflects the company's exposure to Argentine economic instability, including an unpredictable government policy framework, and exposure to foreign currency convertibility and transfer risk. The baseline credit assessment is supported by the company's status as the largest industrial corporation and energy company in Argentina. YPF benefits from upstream/downstream integration and other business diversification, and sizeable oil and gas reserves, including sizable shale resources in the longer-term. The stable outlook for YPF's ratings mainly reflects Moody's stable outlook for Argentina's government bond rating and Moody's view that YPF's and the government's ratings are closely linked since YPF is a government-related issuer and also due to the negative impact of the government's involvement in the energy sector. YPF's ratings could be downgraded if it is unable to maintain sufficient liquidity and access to foreign currency in order to meet its debt service obligations. The ratings could also be downgraded if the government of Argentina's Caa1 rating were to be downgraded. There is limited upside for YPF's ratings over the near-term. Over the longer term, an improvement in Argentina's Caa1 rating and continued demonstration of a strong financial track record could result in a ratings upgrade. The principal methodology used in this rating was the Global Integrated Oil & Gas Industry Methodology published in November 2009. Other methodologies used include the Government-Related Issuers methodology published in July 2010. YPF Sociedad An▋ima, headquartered in Buenos Aires, is the largest energy company in Argentina. ========================== C A Y M A N I S L A N D S ========================== ABL CAPITAL: Creditors' Proofs of Debt Due April 30 --------------------------------------------------- The creditors of ABL Capital Fund Limited are required to file their proofs of debt by April 30, 2014, to be included in the company's dividend distribution. The company commenced liquidation proceedings on March 14, 2014. The company's liquidator is: Matthew Wright c/o Omar Grant Telephone: (345) 949 7576 Facsimile: (345) 949 8295 P.O. Box 897 Windward 1 Regatta Office Park Grand Cayman KY1-1103 Cayman Islands DAR AL-ARKAN: Creditors' Proofs of Debt Due April 28 ---------------------------------------------------- The creditors of Dar Al-Arkan International Sukuk Company are required to file their proofs of debt by April 28, 2014, to be included in the company's dividend distribution. The company commenced liquidation proceedings on March 26, 2014. The company's liquidator is: Natasha Morgan c/o Maples Liquidation Services (Cayman) Limited P.O. Box 1093, Boundary Hall Grand Cayman KY1-1102 Cayman Islands DRAWBRIDGE MINING: Creditors' Proofs of Debt Due April 28 --------------------------------------------------------- The creditors of Drawbridge Mining Holdings Ltd are required to file their proofs of debt by April 28, 2014, to be included in the company's dividend distribution. The company commenced liquidation proceedings on March 25, 2014. The company's liquidator is: Mervin Solas c/o Maples Liquidation Services (Cayman) Limited P.O. Box 1093, Boundary Hall Grand Cayman KY1-1102 Cayman Islands EFG-HERMES: Creditors' Proofs of Debt Due April 28 -------------------------------------------------- The creditors of EFG-Hermes Mena Fixed Income Fund, Ltd. are required to file their proofs of debt by April 28, 2014, to be included in the company's dividend distribution. The company commenced liquidation proceedings on March 26, 2014. The company's liquidator is: Mervin Solas c/o Maples Liquidation Services (Cayman) Limited P.O. Box 1093, Boundary Hall Grand Cayman KY1-1102 Cayman Islands EFG-HERMES MASTER: Creditors' Proofs of Debt Due April 28 --------------------------------------------------------- The creditors of EFG-Hermes Mena Fixed Income Master Fund Limited are required to file their proofs of debt by April 28, 2014, to be included in the company's dividend distribution. The company commenced liquidation proceedings on March 26, 2014. The company's liquidator is: Mervin Solas c/o Maples Liquidation Services (Cayman) Limited P.O. Box 1093, Boundary Hall Grand Cayman KY1-1102 Cayman Islands EFG-HERMES MENA FI: Creditors' Proofs of Debt Due April 28 ---------------------------------------------------------- The creditors of EFG-Hermes Mena Fi Management Limited are required to file their proofs of debt by April 28, 2014, to be included in the company's dividend distribution. The company commenced liquidation proceedings on March 26, 2014. The company's liquidator is: Mervin Solas c/o Maples Liquidation Services (Cayman) Limited P.O. Box 1093, Boundary Hall Grand Cayman KY1-1102 Cayman Islands ELSWORTHY GENERAL: Creditors' Proofs of Debt Due April 25 --------------------------------------------------------- The creditors of Elsworthy General Partner Inc. are required to file their proofs of debt by April 25, 2014, to be included in the company's dividend distribution. The company commenced liquidation proceedings on March 10, 2014. The company's liquidator is: Matthew Wright c/o Omar Grant Telephone: (345) 949 7576 Facsimile: (345) 949 8295 P.O. Box 897 Windward 1 Regatta Office Park Grand Cayman KY1-1103 Cayman Islands FUKUOKA PREFERRED: Creditors' Proofs of Debt Due April 27 --------------------------------------------------------- The creditors of Fukuoka Preferred Capital Cayman Limited are required to file their proofs of debt by April 27, 2014, to be included in the company's dividend distribution. The company commenced liquidation proceedings on March 26, 2014. The company's liquidator is: Mervin Solas c/o Maples Liquidation Services (Cayman) Limited P.O. Box 1093, Boundary Hall Grand Cayman KY1-1102 Cayman Islands HB QUANTITATIVE: Creditors' Proofs of Debt Due April 25 ------------------------------------------------------- The creditors of HB Quantitative Equity Strategies Limited are required to file their proofs of debt by April 25, 2014, to be included in the company's dividend distribution. The company commenced liquidation proceedings on March 11, 2014. The company's liquidator is: Matthew Wright c/o Omar Grant Telephone: (345) 949 7576 Facsimile: (345) 949 8295 P.O. Box 897 Windward 1 Regatta Office Park Grand Cayman KY1-1103 Cayman Islands MENA FI: Creditors' Proofs of Debt Due April 28 ----------------------------------------------- The creditors of Mena FI Cayman Limited are required to file their proofs of debt by April 28, 2014, to be included in the company's dividend distribution. The company commenced liquidation proceedings on March 26, 2014. The company's liquidator is: Mervin Solas c/o Maples Liquidation Services (Cayman) Limited P.O. Box 1093, Boundary Hall Grand Cayman KY1-1102 Cayman Islands =============== C O L O M B I A =============== AVIANCA HOLDINGS: S&P Retains 'B' Rating on $300MM Unsecured Notes ------------------------------------------------------------------ Standard & Poor's Ratings Services said that its 'B' issue-level rating on Avianca Holdings S.A.'s $300 million senior unsecured notes remains unchanged following the company's announcement to increase these notes by up to $250 million. S&P believes that the company will use the proceeds of the add-on to fund its significant fleet renewal and expansion program, which will result in increased debt that S&P's current ratings and outlook already incorporate. Therefore, S&P still believes that the company will keep improving its key financial ratios thanks to its strong operating performance. Particularly, S&P expects debt to EBITDA slightly below 4.0x in 2014 and about 3.5x by the end of 2015, and funds from operations to debt improving to about 21% in 2014 and 23% by the end of 2015. Ratings List Avianca Holdings S.A. Corporate Credit Rating B+/Positive/-- Senior Unsecured B DEPARTMENT OF CALDAS: Fitch Upgrades Rating to 'BB (col)' --------------------------------------------------------- Fitch upgraded to 'BB (col)' the rate of credit risk of ability to pay (National Long-Term Rating) of the Department of Caldas and revises outlook to positive. Also upgraded to 'B (col)' the Short Term Ratings. The extraordinary review arises from the commencement of operation of the agreement to restructure liabilities under the framework of Law 550 of 1999 and the revival of the debt payments as agreed in the business plan of the agreement. Similarly, the rate of positive response to the Department's perspective is mainly due to management being done by the department to refine and validate the obligations agreed in the agreement of restructuring of liabilities and the possibility of dissaving FONPET resources (Decree 2191/2013) to cover unpaid assessments (main liability of the Department), which could significantly reduce the obligations of the agreement of restructuring liabilities, also favor available to service the debt and repayment capacity of the entity. Similarly, we take into consideration the good desempenio tax revenues and a policy of effective oversight, which maintain that dynamic could favor the generation of savings for the department. Key Rating Factors Restructuring liabilities mitigates liquidity risk Caldas Department opted to restructure their financial and non- financial liabilities, under the framework of Law 550/99, as a mechanism to curb judicial liens against coursing. This agreement established a financial plan that includes total obligations of $ 197,741,000, which $ 72,891 million related to financial liabilities between capital and interest. The repayment term of the agreement was established until 2022. Restoring the debt service payments Payment of debt service was restored once the agreement came into operation in mid restructuring of liabilities in the fourth quarter of 2013. In December 2013, the debt service was COP3.868 million, mostly for cover left unpaid interest on such effect. In January 2014, the balance of the debt is $ 54,181,000. Purification of the Debentures Due to disability and purification of certain obligations under the agreement of restructuring liabilities, the department has reduced its liabilities by $ 3.736 million. This situation has limited the strict compliance with the payment schedule and financial plan has forced him to make an exhaustive analysis of liabilities in order to determine the real value of their duties and based on this to make adjustments to the financial plan of arrangement . Close Fiscal surplus of December 2013, according to what was reported in CHIP fiscal closure of the Department of Caldas reflects resources free recipients available for $ 32,148,000, these resources support the commitments of the agreement restructuring of outstanding liabilities to execute on behalf of the purification that Lead. Current Revenues Resumed Trend Positive control policies and collection have resumed importance in the department and as a result the collection of own revenue department for the end of 2013 shows an increase of 12.9% from the previous anions. This effect, coupled with the operating costs remained lower growth, resulting in improved operational savings set. Fitch expects this trend to continue in the medium term and achieve reverse the negative trend of the previous Anios. Limited Affordability According to the financial plan of arrangement restructuring of liabilities, projected available reflects the limited capacity of the department to incur new debt, at least for the next three Anios. In the future any additional debt contracted by the department to be subordinated pursuant to the agreement of restructuring liabilities Rating Sensitivity Increased rate of Caldas Department would be linked to the ability to significantly reduce debug and obligations of the arrangement of restructuring liabilities, coupled with a favorable financial desempenio and sustainable debt levels. =================================== D O M I N I C A N R E P U B L I C =================================== DOMINICAN REP: Electricity Fee Stays Put; Subsidy Soars to RD$1.2B ------------------------------------------------------------------ Dominican Today reports that Dominican Republic Electricity Superintendence said that the electricity fee for April will remain unchanged, for which the State will allocate a RD$1.2 billion subsidy to maintain the price to users. It said Superintendence resolution SIE-013-2014-TF disclosed the Fuel Oil-6, one of the variables which determine the electricity fee index, went from US$88.23 / Bbl to US$90.34 / Bbl, or 2.39% higher, and Natural Gas rose from US$4.25 / MMBTU to US$4.49/MMBTU, according to Dominican Today. The resolution adds that coal stood at US$71.51 per ton, while the monthly average exchange rate climbed from RD$43.15 to RD$43.25 per dollar, the report relates. =========== M E X I C O =========== GRUPO GAYOSSO: S&P Withdraws 'B+' CCR Due to Insufficient Info. --------------------------------------------------------------- Standard & Poor's Ratings Services withdrew its 'B+' corporate credit rating on Mexico-based funeral services provider Grupo Gayosso S.A. de C.V. at the company's request and due to lack of adequate information to maintain S&P's surveillance. At the same time, S&P withdrew its 'B+' issue-level rating and '4' recovery rating on the company's proposed seven-year $150 million unsecured notes, which the company did not place in the market. GUADALUPE MUNICIPALITY: Fitch Assigns 'BB (mex)' Rating ------------------------------------------------------- Fitch Ratings has assigned a 'BB (mex)' to the municipality of Guadalupe, Zacatecas. The Outlook is Stable. Key Rating Factors The credit quality of Guadalupe is based on the following factors: the projected level of long-term debt manageable; favorable indicators of municipal investment, although backed by financing from short and long term, and low level of social marginalization. In contrast, among the limitations of the rating include the history of selective default on a bank loan short term revolving April 2013; weak administrative practices in previous years; collection efficiency indicator below the median GMF (Group of Municipalities rated by Fitch), reflected in a greater reliance on federal resources; deficit balances and weak liquidity position, reflected in the recurrent recruitment of short-term loans to commercial banks and / or payment of shares with the State of Zacatecas ['BBB-(mex)' pcp]. At end 2013, the company recorded a balance of public debt MXN66 million, corresponding MXN26 million credit with commercial banks, which has fixed profile increased amortization, maturing in October 2014 and whose pay rate is through an irrevocable trust administration and payment source (affecting 63% of the shares), taking as guarantor and joint debtor to the State of Zacatecas. The remainder relates to a loan by the latter shares a preview of maturing December 2014. This year, it plans to hire a long-term financing for up MXN180 million which will be used to restructure and / or refinance existing debt as well as the implementation of productive public investment. Under the new credit profile and assuming some conditions of contract, debt indicators and sustainability would rise to 0.40 times disposable income and debt service would represent about 40% of the projected domestic savings. Fitch believes that these reasons are manageable for the company and will monitor the restructuring process. Regarding financial performance, total revenues presented Guadalupe MXN517 million in 2013, of which 17% represent own income (GMF, 27.5%) and other federal and state income than were similar to previous years. Within the farm added tax MXN22.5 million, and observe a sluggish compared to previous years. The current administration will seek to increase their own income through improved revenue from property taxes and fees. Regarding federal revenues, they often resort to advance the town of shares to meet its payment obligations by year end. In 2013, a lower financial deficit by 2012, equivalent to 3% of the total income of the municipality covered through greater availability of cash and no bank debt was recorded. In this regard, short-term liabilities related to public works are kept in controlled amounts, not debts with creditors under federal law. To meet this condition, the entity proceeded to sign payment agreements to settle debts, and Fitch expects a reduction of non- bank liabilities for the coming years. Liquidity at the end of the previous years is limited, averaging 7% of total revenues in 2013, for this, the company resorted to short-term bank loans. In one of them presented a brief delay in payment in 2013, and was later cleared both the delay as the remaining monthly payments. Derived from this event that reflects Fitch weak controls and administrative practices, the rating assigned indicates that the ability to pay remains more vulnerable to adverse economic change over time. It is noteworthy that the current administration does not intend to use short-term loans for the coming years. Domestic saving the entity has been variable but sufficient to cover its long-term obligations, standing at 10.5% / OFR average of the last 3 years, similar to the median GMF (10.4%). Regarding the pension and retirement obligations, the town holds regular contributions to IMSS and ISSSTEZAC state agency, responsible for providing social workers of the municipality, so that such obligations do not represent a direct contingency municipal finances. At the end of 2013, these contributions amounted to MXN61 million (15.2% / OFR). Moreover, water services, sewerage and drainage are provided by the Inter-Board Water and Sewer Zacatecas (JIAPAZ), which operates in four municipalities in the region. Although the statutes marked as intermunicipal agency, the State exerts high influence in its operation, financially supported by the State Committee for Water and Sewerage Zacatecas (CEAPA) and has direct interference in the appointment of the flowchart board. The municipality does not transfer to the operation of the agency and it is now not a direct contingency for the entity. Rating Sensitivity Greater control on the level of current spending through effective administrative policies, a strengthening local revenue in order to increase the budget level, and an improvement in the liquidity position of incurring less in short-term financial obligations, would support an improvement in the credit outlook. Moreover, among the elements that would push down the rating of the issuer and / or outlook, there are: a greater amount of non-bank liabilities, further increases in current spending levels in a greater proportion than available revenues, which would cause a deterioration in the generation of domestic savings. Also, hiring more debt both short-and long-term indicators deteriorate leverage and sustainability MAXCOM TELECOMUNICACIONES: S&P Raises Corp. Credit Rating to 'B-' ----------------------------------------------------------------- Standard & Poor's Ratings Services raised its long-term corporate credit rating on Maxcom to 'B-' from 'D'. At the same time, S&P assigned its 'B-' issue-level rating and recovery rating of '3' to the company's $175.7 million senior secured stepped-up notes due 2020. The outlook is stable. "The rating upgrade follows Maxcom's completion of its debt restructuring and capitalization. The debt restructuring extends the maturity date of its debt until 2020, and reduces the company's coupon payments improving its financial flexibility. Additionally, the company's MXN$2.2 billion capitalization will allow it to follow through with its capital expenditure program, which will lead to modest revenue growth in the coming years," said Standard & Poor's credit analyst Marcela Duenas. MEXICALI MUNICIPALITY: Fitch Affirms 'BB + (mex)' Rating -------------------------------------------------------- Fitch Ratings has affirmed the 'BB + (mex)' of the Municipality of Mexicali, Baja California. The Rating outlook is Stable. Also, the specific grade of 'A-(mex) vra' bank financing contracted by the Municipality with Banobras in 2011 (Banobras 11) for an initial amount of MXN814.5 million was ratified. Rating Key Factors The high financial deficit results from the high current expenditure heading down specifically by personal service, has marked a continued deterioration in the public finances of Mexicali, a situation reflected in their current grade. Additionally, other factors that constrain the rating are the important indicator of damage to municipal domestic savings and investment, high levels of leverage and sustainability of direct debt and liabilities increased circulating weak liquidity position, as well as any liabilities quotas. Moreover, its strengths are the good terms and conditions of direct long-term debt, the fair share of own revenues, the economic importance of the Municipality in the national context and good indicators of social well-being of its population. It is noteworthy that the new administration is in the process of implementing a plan of financial adjustment to boost revenues and cut current spending. Among the measures taken is the new Tax Street lights and measures to improve the collection of property taxes. The spending cuts are anticipated operating coupled with greater control. Fitch will carefully evaluate the impact of new administrative policies in the financial flexibility of the company, so that in the course of the coming months will be a new review. Structurally the Municipality has an important dynamic for personal services, which has resulted in a bulky operating expense, which exceeds the uptake of disposable income (OFR). In addition, local revenue has had little dynamism, with an average annual growth rate of 0.9% during the analysis period. Therefore, since 2009 the company has incurred financial and fiscal deficits have pushed his generation of domestic savings (flow of free resources) and liquidity position, reflected in the use of passive short and long term. As regards public debt, the company recorded a moderate level at the end of 2013 showed a balance of debt MXN964.1 million, equivalent to 0.36 times-x-OFR. While the terms and conditions of the debt are favorable, leverage and sustainability indicators relating to the generation of domestic savings are high, due to previous low financial flexibility of the municipality. In addition, the indirect debt contracted by the Municipal Council of Private Mexicali (CUMM) reached MXN92.7 million at year end, and is part of a 10-year loan for up MXN150 million, of which the municipality acts as joint debtor. "We plan to have the rest of the funding for paving, a situation which will follow Fitch," they sais. Direct debt made up of two loans Banobras, the first (Banobras 11) with balance MXN770.3 million at the end of the year and maturing in April 2031, has an irrevocable trust administration and payment, whose source of payment for 28.5% of the general fund of the municipality shares, reserve fund and interest rate hedging. Credit ratings provides good coverage observed during the analysis period, the average was 3.63x debt service and reserves considering 9.08x. Stresses that according to the contract, currently being in breach of an obligation to make related to the minimum level of qualification, so that the City requested an extension of 24 months to extend the period of healing, and prevent the acceleration of credit. Fitch will monitor this situation, and if it reflected in the credit rating of the municipality and / or bank credit. The second loan was contracted in June 2013 for an amount of up MXN401.5 million, of which to date have had MXN193.7 million. The Municipality is in the process of defining the possible disposal of the remainder of the loan. Fitch will monitor the issue. As a result of the limited liquidity during the last financial year, the growth of non-bank liabilities for contingencies resulted in Mexicali. Stresses the debt with the Institute of Security and Social Services Government and Municipality of the State of Baja California (ISSSTECALI) totaling MXN631.7 million as of 2013. The new administration is in the process of negotiating with the state to rectify this historical debt. Moreover, the low flow of resources hampered the execution of works investment in urban transport "Bus Rapid Transit" program agreed in the agreement made with the National Infrastructure Fund (FONADIN), also in the resolution process. Rating Sensitivity A further rise in as short and / or long term, maintaining the deterioration in the generation of domestic savings, and increased financial pressures contingencies presented by the Municipality, are factors that could have a negative effect on the level rating. Moreover, the implementation of a plan of financial adjustment resulting in a strengthening liquidity position, financial flexibility and resolution of contingent liabilities are factors that can positively affect the credit quality of the municipality. With regard to credit rating, this is closely linked to movements in the credit quality of the Municipality, so any movement in the latter could be reflected directly in the same sense in the specific category of bank credit. Additionally, the conditions of the 24-month extension requested by the City related to the failure to credit rating will be reviewed. ===================== P U E R T O R I C O ===================== PUERTO RICO INFRASTRUCTURE: S&P Affirms 'BB' Rating; Off Watch -------------------------------------------------------------- Standard & Poor's Ratings Services affirmed its 'BB' rating on Puerto Rico Infrastructure Financing Authority's (Ports Authority project) series 2011B and 2011C revenue bonds and removed the rating from CreditWatch, where it was placed with negative implications on Feb. 6, 2014. This action follows Standard & Poor's March 14, 2014, removal of its ratings on Government Development Bank for Puerto Rico from CreditWatch, where they were placed with negative implications on Feb. 4, 2014. The 2011B and C bonds are supported by a letter of credit provided by Government Development Bank for Puerto Rico. 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 our view, there are no representations, warranties and enforcement mechanisms available to investors. ================= V E N E Z U E L A ================= MERCANTIL: Fitch Cuts LT Currency IDRs to 'B'; Outlook Neg. ----------------------------------------------------------- Fitch Ratings has taken rating actions on the following six private-sector Venezuelan banks following the downgrade of the sovereign's Issuer Default Ratings (IDRs): -- Banesco, Banco Universal, CA (BBU); -- Banco Provincial, S.A., Banco Universal (Provincial); -- Mercantil, C.A. Banco Universal (Mercantil); -- Banco Occidental de Descuento (BOD); -- Banco del Caribe, C.A. Banco Universal (Bancaribe); -- Banco Exterior, C.A. Banco Universal (Exterior). These rating actions follow the downgrade of Venezuela's IDRs to 'B' from 'B+'. The Rating Outlooks on the sovereign's IDRs remain Negative. The banks' ratings are constrained by the sovereign due to the negative effects of government control over the financial sector and the broader economy (reflected in Venezuela's 'B'/Negative Outlook) and high exposure to the public sector. Key Rating Drivers - IDRS, Vrs And National Ratings These entities are the six largest private sector universal commercial banks in Venezuela, with operations primarily in the country. All of these banks' Viability Ratings (VRs), or standalone intrinsic financial strengths, drive their IDRs and do not take into account either institutional or state support. High inflation, which reached 53% at year-end 2013 (metropolitan Caracas), distorts financial ratios compared with other emerging market universal/commercial banks with a VR in the 'b' category. BBU BBU's ratings balance its solid profitability (even when adjusting for inflation) and asset quality indicators, as well as its adequate liquidity and capitalization relative to domestic and international peers. BBU is the main subsidiary of Banesco Holding, S.A. PROVINCIAL Provincial's ratings reflect its strong franchise and financial profile compared with both domestic and international peers. The ratings also incorporate the bank's conservative risk management and operational support from Spain's Banco Bilbao Vizcaya Argentaria (BBVA). Provincial's majority shareholder is BBVA, which has a 55% stake in the bank. MERCANTIL Mercantil's ratings reflect its strong performance (even when adjusting for inflation), manageable liquidity risk and resilient credit risk profile. The strength of its balance sheet, management's experience in dealing with the inherently volatile operating environment in Venezuela, and its ample market share and strong franchise allow the bank to maintain a relatively stable deposit base. Mercantil is the largest subsidiary of Mercantil Servicios Financieros. BOD BOD's ratings incorporate a history of volatile profitability, capitalization, and asset quality indicators relative to both domestic and international peers. With the exception of liquidity, the bank's financial metrics are weaker than other large universal commercial banks in Venezuela. The bank is controlled by Cartera de Inversiones Venezuela (CIV), a diversified holding company with interests in financial and nonfinancial companies. CARIBE Bancaribe's ratings reflect its resilient performance, stable asset quality indicators and adequate liquidity risk. It also incorporates a strengthening of capital ratios in 2013, following pressures related to high nominal asset growth in recent years. Scotiabank has a minority stake of 27% in Bancaribe. EXTERIOR Exterior's ratings reflect its solid asset quality and profitability ratios (even when adjusting for inflation). Liquidity and capitalization remain adequate, though weaker than some of its larger domestic peers. Grupo Bancario Ignacio Fierro has an 84% stake in Exterior. Rating Sensitivities - IDRS, VRS And National Ratings Government intervention that pressures financial performance of these banks could negatively affect the banks' IDRs, VRs and National ratings. A sustained deterioration in profitability or asset quality that pressures capitalization ratios could also be negative for their ratings. Additionally, a downgrade of the sovereign's IDRs would result in a similar action on the IDRs and VRs of these banks, which are currently capped at the sovereign. There is no upside potential to any of the banks' international ratings in the near term as the sovereign currently has a Negative Rating Outlook. Key Rating Drivers And Sensitivities - Support Rating And Support Rating Floor The banks' Support Rating (SR) of '5' and Support Rating Floor (SRF) of 'NF' reflect Fitch's expectation of no support. Despite these banks' systemic importance, support cannot be relied upon given Venezuela's speculative-grade rating and lack of a consistent policy on bank support. Government interference in the banking system could also negatively influence shareholder support if these banks were to require financial assistance. Venezuela's propensity or ability to provide timely support to these banks is not likely to change given the sovereign's low speculative-grade ratings. As such, the SR and SRF have no upgrade potential, particularly as the sovereign has a Negative Outlook. Fitch has taken the following rating actions: BBU --Long-term foreign and local currency IDRs affirmed at 'B'; Outlook revised to Negative from Stable; --Short-term foreign and local currency ratings affirmed at 'B'; --Viability affirmed at 'b'; --Support affirmed at 5; --Support Floor affirmed at NF; --Long-term national-scale rating affirmed at 'A+(ven)'; --Short-term national-scale rating affirmed at 'F1(ven)'. Provincial --Long-term foreign and local currency IDRs downgraded to 'B' from 'B+'; Outlook Negative; --Short-term foreign and local currency ratings affirmed at 'B'; --Viability downgraded to 'b' from 'b+'; --Support affirmed at 5; --Support Floor affirmed at NF; --Long-term national-scale rating affirmed at 'AA+(ven)'; --Short-term national-scale rating affirmed at 'F1+(ven)'. Mercantil --Long-term foreign and local currency IDRs downgraded to 'B' from 'B+'; Outlook Negative; --Short-term foreign and local currency ratings affirmed at 'B'; --Viability downgraded to 'b' from 'b+' --Support affirmed at 5; --Support Floor affirmed at NF; --Long-term national-scale rating affirmed at 'AA+(ven)'; --Short-term national-scale rating affirmed at 'F1+(ven)'. BOD --Long-term foreign and local currency IDRs affirmed at 'B'; Outlook revised to Negative from Stable; --Short-term foreign and local currency ratings affirmed at 'B'; --Viability affirmed at 'b'; --Support affirmed at 5; --Support Floor affirmed at NF; --Long-term national-scale rating affirmed at 'BBB(ven)'; --Short-term national-scale rating affirmed at 'F3(ven)'. Caribe --Long-term foreign and local currency IDRs affirmed at 'B'; Outlook revised to Negative from Stable; --Short-term foreign and local currency ratings affirmed at 'B'; --Viability affirmed at 'b'; --Support affirmed at 5; --Support Floor affirmed at NF; --Long-term national-scale rating affirmed at 'A+(ven)'; --Short-term national-scale rating affirmed at 'F1(ven)'. Exterior --Long-term foreign and local currency IDRs downgraded to 'B' from 'B+'; Outlook Negative; --Short-term foreign and local currency ratings affirmed at 'B'; --Viability downgraded to 'b' from 'b+' --Support affirmed at 5; --Support Floor affirmed at NF; --Long-term national-scale rating affirmed at 'AA(ven)'; --Short-term national-scale rating affirmed at 'F1+(ven)'. PROVINCIAL DE REASEGUROS: Fitch Assigns Initial 'B' IFS Rating -------------------------------------------------------------- Fitch Ratings has assigned an initial 'B' Insurer Financial Strength (IFS) rating to Provincial de Reaseguros, C.A. (Pro Re). The Rating Outlook is Negative. Key Rating Drivers The rating is based on Pro Re's sustained good technical performance, with a combined ratio consistently below 100% and better than that of peers. Fitch also considers Pro Re's adequate liquidity position, solid retrocession coverage and improved capital quality. The rating is limited by its small scale compared with global and regional reinsurance companies, and the challenges posed by its large business concentration in Venezuela, which may result in significant volatility in the operating environment. Pro Re is not only exposed to underwriting risks from the operating environment, but also investment risks from its significant holdings of Venezuelan sovereign debt (foreign currency Issuer Default Rating [FC IDR] 'B'/Outlook Negative). In addition, the potential for government intervention in the private sector remains high. The Negative Rating Outlook applied to Pro Re mirrors the sovereign Rating Outlook. Pro Re's profitability is driven by its good combined ratio (81% as of June 2013), which is better than its relevant peers in Venezuela (89%). The combined ratio reflects good performance on the net loss ratio (33% average in the last five years) offsetting a high expense structure. Fitch expects Pro Re's quality of capital to improve given its good operating performance, high reinvestment of profits and lower unrealized gains from revaluation of real estate assets. The last item is due to the sale of the largest fixed-asset in the portfolio. However, the agency believes that sustained high premium growth in the company will make its leverage ratios remain similar to peer averages, and above the median of higher rated reinsurance companies around the world. Pro Re exhibits liquid assets/net reserves and liquid assets/liabilities ratios of 1.4x and 1.0x, respectively, which are similar to the sector's averages as of December 2013. Fitch expects the company to maintain an adequate liquidity position, due to the allocation of its investment portfolio in fixed-income instruments, the absence of financial debt and the reasonable behavior of its retrocessionaires. The exposure to non-liquid investments and Venezuela's sovereign debt is sizable compared to the company's capital base (around 100% as of December 2013); which may limit its flexibility in times of stress. Pro Re's retained risks are protected trough excess-loss treaties. The company has long-standing relationships with internationally renowned reinsurers that have good credit quality. Pro Re's capital exposures per risk and event are reasonable. Rating Sensitivities Additional negative movements in the sovereign rating may trigger negative movements in Pro Re's rating due to its exposures in the country, while a change in the sovereign Outlook to Stable, could also lead to a Stable Outlook for the company. Aside from sovereign considerations, Pro-Re's rating could be downgraded after a sustained deterioration in Pro Re's operating performance with a combined ratio above 100%, a significant deterioration in its operating leverage ratio exceeding 3.5x, and a reduction in liquid asset/net reserves ratio to less than 1.0x. Fitch does not anticipate an upgrade in the near term given the aforementioned sovereign constrains. Under a higher sovereign rating scenario, rating triggers that could lead to an upgrade include a significant improvement in operating leverage ratio below 3.0x and a liquid asset/net reserves ratio sustained above 2.0x. ================= X X X X X X X X X ================= LATAM: IDB Sustainability Lending Hits US$2.8 Billion in 2013 ------------------------------------------------------------- The Inter-American Development Bank committed US$2.8 billion in 2013 for projects that address climate change, sustainable energy and environmental sustainability, according to its annual Sustainability Report, a detailed overview of its progress in investing in and safeguarding sustainability in Latin America and the Caribbean. That number accounts for 20 percent of the Bank's overall lending last year, and puts the IDB on target to meet its goal of 25 percent by 2015. The Sustainability Report is issued on the side of the IDB's Annual Meeting, which this year is taking place in Costa do Sauipe, in Brazil. The report provides data and context on the IDB's efforts to invest in and safeguard sustainability by integrating environmental and social considerations throughout its project portfolio. For example, of projects with high environmental and social risks, 87 percent rated satisfactory in the implementation of safeguard measures in 2013, exceeding the Bank's goal of 85 percent by 2015. Additionally, the report examines the challenges of the rapid urbanization of the region and the Bank's strategies to address them, including a newly approved Infrastructure Strategy and advances in its Emerging and Sustainable Cities Initiative. A sustainable and efficient infrastructure-the buildings, roads and services necessary for a modern society to operate smoothly-is essential for improving the quality of life for people in the region. Latin America and the Caribbean region faces major challenges in protecting its environment and tackling climate change. Demand for electricity is expected to double by 2030 and annual damages from natural disasters total US$3.6 billion. The new Infrastructure Strategy balances environmental, social and fiscal concerns, and new guidance on agriculture and natural resources, urban development and housing, is consistent with existing Bank strategies including the Climate Change and Clean Energy Strategy. In the past year, more than one million people have gained access to low-carbon forms of public transportation. Sixty percent of the power generated by IDB projects was from low carbon sources. The report also features the accomplishments of the region's people and environment. The case study of Mar del Plata, Argentina, shows the value of environmentally and socially inclusive infrastructure planning. In Brazil, the people of Serra do Mar offer an inspiring look at how community spirit and participation have improved lives and the outcome of a project to restore the natural environment. The IDB is the main source of multilateral financing for the region. *********** 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 * * *