/raid1/www/Hosts/bankrupt/TCRLA_Public/140529.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, May 29, 2014, Vol. 15, No. 105
Headlines
A R G E N T I N A
INDUSTRIAS METALURGICAS: S&P Affirms 'CCC+' Rating; Outlook Neg.
B R A Z I L
BIOSEV SA: Fitch Withdraws 'BB-' Rating on Unit's US500MM Notes
JBS SA: Begins Process for Selling Shares of Unit
C A Y M A N I S L A N D S
CONTINENTAL TRUSTEES: Fitch Ups Rating on Sr. Sec. Notes to BB+
EAGLE RIVER: Creditors' Proofs of Debt Due June 19
FOURESS LIMITED: Creditors' Proofs of Debt Due June 23
ION ISRAEL: Commences Liquidation Proceedings
NAAMAN LIMITED: Creditors' Proofs of Debt Due June 23
SALIDA ACCELERATOR: Creditors' Proofs of Debt Due June 10
SETTEMBRINI LIMITED: Creditors' Proofs of Debt Due June 20
SOFAER CAPITAL: Creditors' Proofs of Debt Due June 10
VALINOR CREDIT: Creditors' Proofs of Debt Due June 10
VISION CAPITAL: Creditors' Proofs of Debt Due June 18
WOLFGANG INTERNATIONAL: Creditors' Proofs of Debt Due June 6
D O M I N I C A N R E P U B L I C
DOMINICAN REPUBLIC: Gov't Places US$1.25BB Bond as Debt Spirals
J A M A I C A
JAMAICA: To Provide Billion Dollar Financing Package for MSMEs
LIME: Cuts Losses to J$3.5 Billion in Year Ended March 2014
P E R U
BANCO DE CREDITO: Fitch Raises Rating on Jr. Sub. Debt to 'BB'
BANCO INTERNACIONAL: Fitch Raises Rating on Jr. Sub. Debt to BB
T R I N I D A D & T O B A G O
TRINIDAD & TOBAGO: US$ Worries to End Soon, Governor Says
- - - - -
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A R G E N T I N A
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INDUSTRIAS METALURGICAS: S&P Affirms 'CCC+' Rating; Outlook Neg.
----------------------------------------------------------------
Standard & Poor's Ratings Services affirmed its 'CCC+' ratings on
Industrias Metalurgicas Pescarmona S.A.I.C. y F. (IMPSA) and its
subsidiary, WPE International Cooperatief U.A. (WPEIC). The
outlook remains negative. The rating action follows S&P's
ordinary annual review.
S&P's ratings on IMPSA and WPEIC are based on its view that the
group would continue to face relatively high refinancing risk,
weak liquidity, and a highly leveraged financial profile.
In 2013, the group has completed its corporate reorganization,
under which IMPSA has transferred its subsidiary, Wind Power
Energia S.A. (WPE), to its new Luxembourg-based holding company,
Venti S.A. As a result, WPE is now IMPSA's sister company.
IMPSA's and WPEIC's debt have cross guarantees that Venti now
guarantees. From an analytical standpoint, S&P bases its
financial analysis on consolidated figures, as S&P sees that all
the companies bear a single-default risk due to the group's high
integration, shared controlling shareholder and top management,
and cross-guarantees. S&P's analysis excludes cash flows and debt
from its project-financed wind parks, because their debt is
structured as "nonrecourse" and matched with the assets' cash
flows.
"The ratings reflect our assessment of a "weak" business risk
profile and "highly leveraged" financial risk profile. Our
assessment of a "weak" business risk profile reflects the group's
narrower geographic diversification than of its global peers,
which leads to volatile operating performance to some extent.
Also, the group has exposure to intense competition and
technological and logistic challenges, as the market for
engineering, procurement, and construction services for wind farms
is relatively new. The group partly mitigates these negative
factors by focusing on hydro- and wind-power generation projects
in Latin America, where it has competitive advantages such as
existing facilities and solid relationships with major electric
utilities and financial institutions. Expectations of sizable
debt levels and volatile working capital requirements, which
result in fluctuating and often negative free cash flow
generation, underpin IMPSA's "highly leveraged" financial risk
profile," S&P said.
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B R A Z I L
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BIOSEV SA: Fitch Withdraws 'BB-' Rating on Unit's US500MM Notes
---------------------------------------------------------------
Fitch Ratings has withdrawn the expected rating of 'BB-' assigned
to Biosev Finance International B.V.'s (Biosev Finance) USD500
million 2020 proposed senior unsecured notes issuance. Biosev
Financial is a fully owned subsidiary of Biosev S.A. (Biosev).
The note would be fully guaranteed by Biosev and its subsidiaries.
The withdrawal of the rating follows unfavorable market conditions
to sell the notes. As there is no set time frame for resuming the
issuance process, no rating is required at this time. Fitch will
provide investors with further information on the notes if and
when the issuer resumes the sale process.
Fitch continues to rate Biosev as follows:
-- Foreign and local currency Issuer Default Ratings 'BB-';
-- National scale long-term rating 'A+(bra)'.
The Rating Outlook is Stable.
JBS SA: Begins Process for Selling Shares of Unit
-------------------------------------------------
Jeffrey T. Lewis at The Wall Street Journal reports that JBS SA
said it has begun the process of selling shares in its JBS Foods
unit.
The Brazilian company asked Brazil's market regulator to register
the initial public share offering, according to the WSJ. The
company didn't say when the sale will take place or how much of
the unit JBS will sell, though it will probably be a minority
stake, according to a company spokesman, the WSJ notes.
JBS Foods is a new unit of JBS that combines the company's
chicken, pork and prepared-foods businesses.
JBS SA is a multinational food processing company, producing
factory processed beef, chicken and pork, and also selling by-
products from the processing of these meats. It is headquartered
in Sao Paulo. It was founded in 1953 in Anapolis, Goias. The
company has 150 industrial plants around the world.
* * *
As reported in the Troubled Company Reporter-Latin America on
April 3, 2014, Fitch Ratings has assigned an expected rating of
'BB-' to proposed benchmark-size senior unsecured notes offering
by JBS Investments GmbH. These notes will be unconditionally
guaranteed by JBS S.A. and JBS Hungary Holdings Kft. The notes
will rank equally in right of payment with all other present and
future senior unsecured obligations of the issuer and of the
guarantors.
==========================
C A Y M A N I S L A N D S
==========================
CONTINENTAL TRUSTEES: Fitch Ups Rating on Sr. Sec. Notes to BB+
---------------------------------------------------------------
Fitch Ratings has completed its review of Peru's four largest
banks and their related entities. As a result of the review, the
Viability Ratings (VRs) and Issuer Default Ratings (IDRs) of Banco
de Credito del Peru (BCP), BBVA Banco Continental (BC) and Banco
Internacional del Peru (Interbank) have been upgraded while the
ratings of Scotiabank Peru (SBP) were affirmed. The rating
actions are summarized at the end of this press release.
The banks covered in this review comprised about 84% of Peru's
banking system's assets at YE13; their business volumes - largely
concentrated in Peru - ranked between USD35 billion and
USD10.6 billion at the same date. Besides the individual factors
detailed below, the upgrades considered the positive economic and
regulatory environment, GDP growth prospects and positive trends
in terms of employment and GDP per capita.
For more details on each individual bank and its affiliates'
rating drivers and sensitivities, please refer to the respective
press release published along with this one.
KEY RATING DRIVERS
VR, IDRs AND SENIOR DEBT
BCP
BCP's, VR and IDRs were upgraded as the bank maintained its solid
performance and strong balance sheet while achieving a healthy
growth amid a quite stable environment. The bank's strong market
positioning and track record of performance through the cycle, as
well as its sound credit origination and generally cautious
approach to business point to the stability of its credit metrics.
Based on its strong market positioning and diversification, BCP
was able to maintain very strong asset quality with 90-day PDLs
below 2% of the gross portfolio for more than five years and
reserve coverage above 2 times(x) 90-day PDLs. At the same time,
the bank's operating ROAA was consistently above 2%.
BCP's, VR IDR and senior debt ratings are driven by its leading
franchise; consistent, sound performance; diversified balance
sheet and revenues; strong asset quality; adequate capital and
reserve cushions; broad, low cost deposit base; positive operating
and regulatory environment; ample liquidity; and moderate
efficiency.
BC
The upgrade of BC's, VR and IDRs is driven by the bank's
consistently solid performance; sustained, healthy growth that
contributes to strengthen its balance sheet. BC's cautious
approach to business and track record of adequate risk management
underpin its credit metrics and provide stability amid a benign
operating environment.
BC boasts one of the highest efficiency levels in the region with
operating expenses consuming just 35%-37% of operating revenues in
the last few years and 90-day PDL levels below 2% of gross loans
for more than five years with reserve coverage of about 3x 90-day
PDLs.
BC's viability rating and Issuer Default Ratings reflect its
robust franchise; solid performance; strong profitability; high
efficiency; solid asset quality and ample reserves; wide and low
cost deposit base and adequate capital.
Interbank
Interbank's VR and IDR were upgraded considering that the bank has
maintained its strong performance; sound underwriting policies and
risk management tools and consistent, good asset quality while
growing its franchise in a healthy, balanced manner.
In the past few years, Interbank achieved leading positions in
retail lending while containing 90-day PDLs below 2% of gross
loans. The bank's well contained credit cost bolstered operating
ROAA above 3% for more than five years.
Interbank's VR and IDR ratings are driven by its consistent,
strong performance; robust credit process; good asset quality;
sound franchise; adequate capital; positive economic and
regulatory environment; and improving funding base. The ratings
also consider the fierce competition the bank faces and its
business model that leads to more concentration in the retail
segment.
SBP
SBP is considered a strategic subsidiary of the Bank of Nova
Scotia (BNS, rated 'AA-'/Stable by Fitch Ratings). Hence, in
Fitch's opinion, there is a high probability that SBP would
receive support from its parent, should it be required, provided
that SBP does not suffer from a systemic risk event. BNS's
potential support underpins SBP's IDRs and support rating.
SBP's, VR rating is driven by its sound capital; ample margin and
consistent performance; robust asset quality and reserves;
strengthened franchise; improved funding structure and cost;
positive operating and regulatory environment and heightened
competition.
SUPPORT RATING AND SUPPORT RATING FLOOR
Peru's ability to provide support to these banks is reflected in
its Sovereign Rating ('BBB+/A-') and underpins their Support and
Support Rating Floor ratings; the latter were upgraded to reflect
Peru's last sovereign upgrade during 4Q13.
BCP
BCP's 30% market share in deposits and its outsize presence in all
business segments make it a crucial part of Peru's financial
sector. Support from the government should be forthcoming in case
of need.
BC
BC's 22% market share in deposits and its strong presence in all
business segments make it a key player in Peru's financial sector.
Support from the government should be forthcoming in case of need.
Interbank
Interbank has an 11.5% market share in deposits and a sizable
presence in all business segments. Support from the government
should be forthcoming in case of need.
RATING SENSITIVITIES
VR, IDRs AND SENIOR DEBT
BCP
Sustained Financial Strength: BCP's VR and IDRs are highly
correlated with the strength of the Peruvian economy; should the
economic environment continue to improve, as is reflected in its
sovereign ratings, and the bank maintain a consistent performance
and its structural strengths, including a FCC above 12% BCP's
ratings could be upgraded.
Significantly Weaker Performance: Though not Fitch's base case,
BCP's VR and IDRs could suffer if operating environment
deterioration materially affects the bank's asset quality and
performance to levels worse than the market average, and leads to
an erosion of the bank's reserve and capital cushions (FCC below
9.5% and or Operating ROAA below 1%).
BC
Sustained Performance and Balance Sheet Strength: BC's VR and LC
IDR could be upgraded if the bank is able to maintain its balance
sheet strength and performance while improving its capitalization
(FCC above 12%).
In addition, its BC's IDR could benefit from a significant
improvement of its parent's ability to provide support, as
evidenced by BBVA's IDR.
Significant Deterioration of its Performance: BC's VR and IDRs
would be pressured by a sharp deterioration of the bank's
performance or a larger than expected decline in asset quality
that would erode the capital/ reserves cushion (90-day PDLs above
3% and FCC consistently below 9.5%).
SBP
Sovereign Upgrade: SBP's foreign currency IDR would be upgraded
should Peru's sovereign rating and country ceiling be upgraded.
Downward risk for the bank's IDRs is limited given its parent
support but the IDRs could also change if Fitch's assessment of
BNS's ability or willingness to support SBP changes.
SBP's VR could be upgraded if the bank maintains good asset
quality and a solid performance amid a stable environment as
evidenced by the sovereign rating. On the other hand, should
asset quality deteriorate (90-day PDLs above 3.5%) or
profitability sharply decline (operating ROAA below 2%), its VR
would be pressured downwards.
Interbank
Given its current rating, there is little upside potential for
Interbank's VR and IDRs.
On the other hand, Interbank's ratings could be downgraded if a
severe decline in asset quality (PDLs above 4%) or weak
profitability erode its capital (FCC below 9%) and reserve
cushion.
SUPPORT RATING AND SUPPORT RATING FLOOR
BCP, BC AND Interbank
SRs and SRFs could be affected if Fitch changes its view of Peru's
ability or willingness to support these banks.
Fitch has taken the following rating actions:
Banco de Credito del Peru
--Long-term foreign currency IDR upgraded to 'A-' from 'BBB+',
Stable Outlook;
--Short-term foreign currency IDR upgraded to 'F1' from 'F2';
--Long-term local currency IDR upgraded to 'A-' from 'BBB+',
Stable Outlook;
--Short-term local currency IDR upgraded to 'F1' from 'F2';
--Viability rating upgraded to 'a-' from 'bbb+';
--Support rating affirmed at'2';
--Support floor revised to 'BBB' from 'BBB-';
--Senior unsecured debt at upgraded to 'A-' from 'BBB+';
--Subordinated debt upgraded to 'BBB+' from 'BBB';
--Junior subordinated debt upgraded to 'BB' from 'BB-'.
In addition, Fitch has upgraded the following rating for BCP
Emisiones Latam 1 S.A.:
--Senior unsecured notes upgraded to 'AA+' from 'AA(cl)'.
BBVA Banco Continental
--Long-term foreign currency IDR upgraded to 'A-' from 'BBB+',
Stable Outlook;
--Short-term foreign currency IDR upgraded to 'F1' from 'F2';
--Long-term local currency IDR upgraded to 'A-' from 'BBB+',
Stable Outlook;
--Short-term local currency IDR upgraded to 'F1' from 'F2';
--Viability rating upgraded to 'a-' from 'bbb+';
--Support rating affirmed at'2';
--Support floor revised to 'BBB' from 'BBB-';
--Senior unsecured debt at upgraded to 'A-' from 'BBB+';
Continental Trustees (Cayman) Ltd.
--Senior secured junior subordinated loan participation notes
upgraded to 'BB+' from 'BB'.
Continental Senior Trustees (Cayman) Ltd
--Senior secured loan participation notes upgraded to 'A-' from
'BBB+'.
Continental Senior Trustees II (Cayman) Ltd.
--Senior secured loan participation notes upgraded to 'A-' from
'BBB+'.
Scotiabank Peru
--Long-term foreign currency IDR at 'A-'; Outlook Stable;
--Short-term foreign currency IDR at 'F1';
--Long-term local currency IDR at 'A+'; Outlook Stable;
--Short-term local currency IDR at 'F1';
--Support rating at '1';
--Subordinated debt at 'A-';
--Viability rating at 'bbb+'.
Banco Internacional del Peru
--Long-term foreign currency IDR upgraded to 'BBB+' from 'BBB',
Stable Outlook;
--Short-term foreign currency IDR affirmed at 'F2' ;
--Long-term local currency IDR upgraded to 'BBB+' from 'BBB',
Stable Outlook;
--Short-term local currency IDR affirmed at 'F2';
--Viability rating upgraded to 'bbb+' from 'bbb';
--Support rating upgraded to '2' from '3';
--Support floor revised to 'BBB' from 'BB+';
--Senior unsecured debt upgraded to 'BBB+' from 'BBB';
--Subordinated debt upgraded to 'BBB' from 'BBB-';
--Junior subordinated debt at upgraded to 'BB' from 'BB-'.
EAGLE RIVER: Creditors' Proofs of Debt Due June 19
--------------------------------------------------
The creditors of Eagle River Credit And Event Fund Ltd. are
required to file their proofs of debt by June 19, 2014, to be
included in the company's dividend distribution.
The company commenced liquidation proceedings on May 6, 2014.
The company's liquidator is:
DMS Corporate Services Ltd.
c/o Nicola Cowan
Telephone: (345) 946 7665
Facsimile: (345) 949 2877
dms House, 2nd Floor
P.O. Box 1344 Grand Cayman KY1-1108
Cayman Islands
FOURESS LIMITED: Creditors' Proofs of Debt Due June 23
------------------------------------------------------
The creditors of Fouress Limited are required to file their proofs
of debt by June 23, 2014, to be included in the company's dividend
distribution.
The company commenced wind-up proceedings on May 5, 2014.
The company's liquidator is:
Eagle Holdings Ltd.
c/o Barclays Private Bank & Trust (Cayman) Limited
FirstCaribbean House, 4th Floor
P.O. Box 487 Grand Cayman KY1-1106
Cayman Islands
Telephone: (345) 949-7128
ION ISRAEL: Commences Liquidation Proceedings
---------------------------------------------
On May 5, 2014, the sole shareholder of Ion Israel Partners Ltd
resolved to voluntarily liquidate the company's business.
Creditors are required to file their proofs of debt to be included
in the company's dividend distribution.
The company's liquidator is:
Russell Homer
Telephone: (345) 946-0820
Facsimile: (345) 946-0864
PO Box 2499, George Town
Grand Cayman KY1-1104
Cayman Islands
NAAMAN LIMITED: Creditors' Proofs of Debt Due June 23
-----------------------------------------------------
The creditors of Naaman Limited are required to file their proofs
of debt by June 23, 2014, to be included in the company's dividend
distribution.
The company commenced wind-up proceedings on May 5, 2014.
The company's liquidator is:
Eagle Holdings Ltd.
c/o Barclays Private Bank & Trust (Cayman) Limited
FirstCaribbean House, 4th Floor
P.O. Box 487 Grand Cayman KY1-1106
Cayman Islands
Telephone: (345) 949-7128
SALIDA ACCELERATOR: Creditors' Proofs of Debt Due June 10
---------------------------------------------------------
The creditors of Salida Accelerator Fund (International) Limited
are required to file their proofs of debt by June 10, 2014, to be
included in the company's dividend distribution.
The company commenced wind-up proceedings on May 7, 2014.
The company's liquidator is:
Ogier
c/o Jonathan Turnham
Telephone: (345) 815 1839
Facsimile: (345) 949-9877
89 Nexus Way, Camana Bay
Grand Cayman KY1-9007
Cayman Islands
SETTEMBRINI LIMITED: Creditors' Proofs of Debt Due June 20
----------------------------------------------------------
The creditors of Settembrini Limited are required to file their
proofs of debt by June 20, 2014, to be included in the company's
dividend distribution.
The company commenced wind-up proceedings on April 2, 2014.
The company's liquidator is:
Eagle Holdings Ltd.
c/o Barclays Private Bank & Trust (Cayman) Limited
FirstCaribbean House, 4th Floor
P.O. Box 487 Grand Cayman KY1-1106
Cayman Islands
Telephone: (345) 949-7128
SOFAER CAPITAL: Creditors' Proofs of Debt Due June 10
-----------------------------------------------------
The creditors of Sofaer Capital Global Private Equity Fund are
required to file their proofs of debt by June 10, 2014, to be
included in the company's dividend distribution.
The company commenced liquidation proceedings on May 9, 2014.
The company's liquidator is:
Appleby (Cayman) Ltd.
c/o Sophie Benbow
Telephone: (345) 949 4900
P.O. Box 190 Clifton House, 75 Fort Street
Grand Cayman, KY1-1104
Cayman Islands
VALINOR CREDIT: Creditors' Proofs of Debt Due June 10
-----------------------------------------------------
The creditors of Valinor Credit Partners Offshore, Ltd. are
required to file their proofs of debt by June 10, 2014, to be
included in the company's dividend distribution.
The company commenced wind-up proceedings on May 8, 2014.
The company's liquidator is:
Ogier
c/o Nicosia Lawson
Telephone: (345) 815 1787
Facsimile: (345) 949-9877
89 Nexus Way, Camana Bay
Grand Cayman KY1-9007
Cayman Islands
VISION CAPITAL: Creditors' Proofs of Debt Due June 18
-----------------------------------------------------
The creditors of Vision Capital Limited are required to file their
proofs of debt by June 18, 2014, to be included in the company's
dividend distribution.
The company commenced liquidation proceedings on May 8, 2014.
The company's liquidator is:
Lawson
c/o James Macfee
Century Yard, Level 2
Cricket Square
PO Box 493 Grand Cayman KY1-1106
Cayman Islands
Telephone: +1 (345) 914-4465/ +1 (345) 949-4800
Facsimile: +1 (345) 949-7164
WOLFGANG INTERNATIONAL: Creditors' Proofs of Debt Due June 6
------------------------------------------------------------
The creditors of Wolfgang International Inc. are required to file
their proofs of debt by June 6, 2014, to be included in the
company's dividend distribution.
The company commenced wind-up proceedings on May 5, 2014.
The company's liquidator is:
MBT Trustees Ltd.
Telephone: 945-8859
Facsimile: 949-9793/4
P.O. Box 30622 Grand Cayman KY1-1203
Cayman Islands
===================================
D O M I N I C A N R E P U B L I C
===================================
DOMINICAN REPUBLIC: Gov't Places US$1.25BB Bond as Debt Spirals
---------------------------------------------------------------
Dominican Today reports that Presidency Administrative Minister
Jose Ramon Peralta affirmed that the Government had already placed
a US$1.25 billion bond, with US$250 million remaining, aside from
an issue in pesos, all to shore up this year's budget.
The official said payment commitments are of great concern for the
government, which had no other solution than to seek more loans,
according to Dominican Today. "The debt problem is very serious
for this country, this administration and future administrations,
because the debt amount has overflowed, and to pay that debt, the
Dominican people then have to take more loans," the report quoted
Minister Peralta as saying.
Dominican Today relates that Minister Peralta said the government
takes fewer funds from loans than it pays to amortize, "as
evidenced by the fact that more than half of its revenue goes to
pay off debt."
The report notes that Minister Peralta said that if close to
US$4 billion of the debt is being paid, a bit more than half is
only interest. Minister Peralta said US$170 billion has been paid
just for the debt this year, the report discloses.
The Central Bank has placed the current debt at US$27.1 billion,
the report adds.
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J A M A I C A
=============
JAMAICA: To Provide Billion Dollar Financing Package for MSMEs
--------------------------------------------------------------
RJR News reports that the government of Jamaica will provide one
billion dollars in loan financing to Micro, Small and Medium-Sized
Enterprises (MSME's).
This, according to Anthony Hylton, Minister of Industry,
Investment & Commerce, is in keeping with the Government's
commitment to increasing support to the sector, RJR News notes.
Mr. Hylton recently disclosed that the money will be disbursed
through the Self-Start Fund, which will offer a number of new loan
products, customized to meet the needs of the sector, according to
RJR News.
This, the Minister said, was part of the government's plan to
reform and reposition critical agencies engaged in lending and
financial advisory services for the MSME sector, the report adds.
LIME: Cuts Losses to J$3.5 Billion in Year Ended March 2014
-----------------------------------------------------------
RJR News reports that LIME has announced that its losses were cut
to J$3.5 billion dollars in the year ending March, 2014.
The losses declined even as the company faced lower revenues,
chiefly as a result of reduced earnings from its directory
business and corporate solutions, according to RJR News.
On the positive side, notes RJR News, LIME reported that it added
165,000 new mobile subscribers to its network, boosting that
number to more than 530,000.
The report relates that despite lower call costs, the company said
earnings from its mobile business was up 28 per cent.
Internet revenues reportedly grew as well, going up by 16 per cent
while the company said it had virtually no reduction in the amount
of fixed lines on its network, RJR News adds.
LIME is a telecommunications company in Jamaica.
=======
P E R U
=======
BANCO DE CREDITO: Fitch Raises Rating on Jr. Sub. Debt to 'BB'
--------------------------------------------------------------
Fitch Ratings has upgraded Banco de Credito del Peru S.A.'s (BCP)
viability (VR) and Issuer Default Ratings (IDRs) to 'a-' and 'A-',
respectively. A full list of rating actions follows at the end of
this press release.
KEY RATING DRIVERS
VR, IDRs AND SENIOR DEBT
Fitch has upgraded BCP's VR and IDRs because the bank has
maintained its solid performance and strong balance sheet while
achieving a healthy growth amid a quite stable environment. The
bank's strong market positioning and track record of performance
through the cycle, as well as its sound credit origination and
generally cautious approach to business point to the stability of
its credit metrics.
Based on its strong market positioning and diversification, BCP
was able to maintain very strong asset quality with 90-day PDLs
below 2% of the gross portfolio for more than five years and
reserve coverage above 2 times (x) 90-day PDLs. At the same time,
the bank's operating ROAA was consistently above 2%.
BCP's, VR IDR and senior debt ratings are driven by its leading
franchise; consistent, sound performance; diversified balance
sheet and revenues; strong asset quality; adequate capital and
reserve cushions; broad, low cost deposit base; positive operating
and regulatory environment; ample liquidity; and moderate
efficiency.
BCP has long had the country's largest branch/ ATM network and
customer base. Boasting a dominant franchise, BCP offers a wide
array of banking products and has achieved leading market shares
in almost all segments.
The bank's franchise and strong perception as a safe haven have
allowed it to build, maintain, and grow a wide and low-cost
deposit base. This is one of the bank's key strengths as it
provides stability to its balance sheet and underpins its margins.
BCP has a quite liquid balance sheet and robust asset and
liability management processes. In addition, the bank has ample
access to local and international capital markets which it taps
regularly to fund growth and manage its liabilities.
BCP is well diversified on both sides of the balance sheet and has
a stable, recurrent, diversified revenue stream proper of a
leading domestic commercial bank. Future expansion into retail
lending, as well as the integration of Mibanco, should further
diversify revenues and balance sheet.
BCP's core capital continues to compare well with that of its
peers (around 10% in the last five years). Sustained
profitability and earnings retention underpin BCP's capital which
should be viewed in the light of its ample reserve coverage
(reserves exceed 90-day PDLs in an amount equivalent to about 15%
of Fitch Core Capital), sound profitability, and robust asset
quality.
Peru's economy shows strong growth momentum based on sound macro
fundamentals. In addition, a proactive regulator, eager to take
the lead and apply pre-emptive remedies, has created a strong
regulatory environment.
The Stable Outlook reflects Fitch's belief that the bank's strong
balance sheet and performance are resilient to eventual downturns
and even though some credit metrics may see a slight
deterioration, they are likely to remain compatible with its
current rating.
SUPPORT RATING AND SUPPORT RATING FLOOR
BCP's 30% market share in deposits and its outsize presence in all
business segments make it a crucial part of Peru's financial
sector. Support from the government should be forthcoming in case
of need; Peru's ability to provide such support is reflected in
its Sovereign Rating ('BBB+/A-') and underpins BCP's Support and
Support Rating Floor ratings; the latter was upgraded to reflect
Peru's last sovereign upgrade during 4Q13.
SUBORDINATED DEBT AND OTHER HYBRID SECURITIES
BCP's subordinated bonds are plain vanilla and lack the features
that would earn them equity credit following Fitch's criteria. In
Fitch's opinion, their probability of non-performance is
equivalent to that of BCP's senior bonds, but they would entail a
higher loss in case of default due to their subordinated nature.
Hence, they are rated only one notch below the bank's VR.
BCP's junior subordinated bonds, rated five notches below the
bank's VR, have very strong equity-like features including the
non-cumulative deferral of the coupons and a deeper subordination.
This notching reflects the incremental non-performance risk
relative to that captured by the VR and the loss severity (two
notches) given its deeper subordination.
BCP EMISIONES LATAM 1
BCP Emisiones Latam 1 (BCPEL1) is a special purpose vehicle
incorporated in Chile with the sole purpose of issuing local bonds
guaranteed by promissory notes from BCP. Hence, BCPEL1's bond
ratings are tied to BCP's VR. The national scale rating of the
issuances of this vehicle were upgraded to AA+(cl) aligned with
the upgrade of the bank's VR.
RATING SENSITIVITIES
VR, IDRs AND SENIOR DEBT
Sustained Financial Strength: BCP's VR and IDRs are highly
correlated with the strength of the Peruvian economy; should the
economic environment continue to improve, as is reflected in its
sovereign ratings, and the bank maintain a consistent performance
and its structural strengths, including a FCC above 12% BCP's
ratings could be upgraded.
Significantly Weaker Performance: Though not Fitch's base case,
BCP's VR and IDRs could suffer if operating environment
deterioration materially affects the bank's asset quality and
performance to levels worse than the market average, and leads to
an erosion of the bank's reserve and capital cushions (FCC below
9.5% and or Operating ROAA below 1%).
SUPPORT RATING AND SUPPORT RATING FLOOR
BCP's SR and SRF could be affected if Fitch changes its view of
Peru's ability or willingness to support the bank.
SUBORDINATED DEBT AND OTHER HYBRID SECURITIES
The Subordinated and Junior Subordinated debt ratings would move
in line with BCP's VR.
BCP EMISIONES LATAM 1
BCPEL1's bond ratings would move in line with BCP's VR.
Fitch has taken the following rating actions on BCP:
--Long-term foreign currency IDR upgraded to 'A-' from 'BBB+',
Stable Outlook;
--Short-term foreign currency IDR upgraded to 'F1' from 'F2';
--Long-term local currency IDR upgraded to 'A-' from 'BBB+',
Stable Outlook;
--Short-term local currency IDR upgraded to 'F1' from 'F2';
--Viability rating upgraded to 'a-' from 'bbb+';
--Support rating affirmed at'2';
--Support floor revised to 'BBB' from 'BBB-';
--Senior unsecured debt at upgraded to 'A-' from 'BBB+';
--Subordinated debt upgraded to 'BBB+' from 'BBB';
--Junior subordinated debt upgraded to 'BB' from 'BB-'.
In addition, Fitch has upgraded the following rating for BCP
Emisiones Latam 1 S.A.:
--Senior unsecured notes upgraded to 'AA+' from 'AA(cl)'.
BANCO INTERNACIONAL: Fitch Raises Rating on Jr. Sub. Debt to BB
---------------------------------------------------------------
Fitch Ratings has upgraded Banco Internacional del Peru S.A.A.'s
(Interbank) viability (VR) and Issuer Default Ratings (IDRs) to
'bbb+' and 'BBB+', respectively. A full list of rating actions
follows at the end of this press release.
KEY RATING DRIVERS
VR, IDRs AND SENIOR DEBT
Interbank's VR and IDR were upgraded considering that the bank has
maintained its strong performance; sound underwriting policies and
risk management tools; and consistent, good asset quality.
Interbank also continues to grow its franchise in a healthy,
balanced manner.
Interbank's VR and IDR ratings are driven by its consistent,
strong performance; robust credit process; good asset quality;
sound franchise; adequate capital; positive economic and
regulatory environment; and improving funding base. The ratings
also consider the fierce competition the bank faces and its
business model that leads to more concentration in the retail
segment.
Interbank has developed information-intensive credit scoring
models and modern monitoring tools. Credit origination policies
are conservative and collection efforts effective. A sound risk
management team helps maintain very good asset quality. Past-due
loans (15- or 30-day PDLs for most products) stood at 1.75% at
YE13 while 90-day PDLs did not exceed 2% of gross loans for the
past five years.
Interbank's performance has been consistently strong driven by
loan growth, high margins, adequate expense control and moderate
credit costs. This bolstered operating ROAA above 3% for more
than five years.
The bank has built an efficient retail franchise and positioned
itself as a top contender in most retail products. Moreover, the
bank has not neglected its corporate business, which appears well-
focused and competitive, bringing balance and diversification to
Interbank's balance sheet and revenue stream.
Besides consistently retaining 55% of its net income, the bank
maintains ample reserve coverage thus creating a strong capital/
reserves cushion against unexpected losses. Along with its strong
profitability, this allows Interbank to confidently face an
eventual downturn.
Peru's economy shows strong growth momentum based on sound macro
fundamentals. In addition, a proactive regulator has created a
strong regulatory environment that fosters cautious credit
policies. Competition and government's efforts to tame growth and
curb inflation keep margins below pre-crisis levels.
Interbank seeks to underpin its margins and bottom line by cross-
selling its existing customers and seeking operating efficiency.
Interbank does not have as diversified a deposit base as its
larger competitors but has made significant efforts to widen its
deposits base and change its structure. Funding costs have
declined as demand deposits increased; in addition, the bank has
reversed the growing trend in its institutional funding while
remaining an active issuer in capital markets.
Larger financial institutions and smaller, specialized and quite
aggressive banks and consumer finance companies have somewhat
curbed margin growth. Competition in this high growth market has
heightened, and Interbank competes without compromising its credit
criteria. Growth potential remains sound due to Peru's still low
banking penetration.
The Stable Outlook reflects Fitch's belief that the bank's strong
performance and margins are resilient to eventual downturns and
even though some credit metrics may see a slight deterioration,
they are likely to remain compatible with its current rating.
SUPPORT RATING AND SUPPORT RATING FLOOR
Interbank has an 11.5% market share in deposits and a sizable
presence in all business segments. Support from the government
should be forthcoming in case of need. Peru's ability to provide
such support is reflected in its Sovereign Rating ('BBB+/A-') and
underpins Interbank's Support and Support Rating Floor ratings;
the latter was upgraded to reflect Peru's last sovereign upgrade
during 4Q13.
SUBORDINATED DEBT AND OTHER HYBRID SECURITIES
Interbank's subordinated bonds are plain vanilla and lack the
features that would earn them equity credit following Fitch's
criteria. In Fitch's opinion, their probability of non-
performance is equivalent to that of Interbank's senior bonds but,
they would entail a higher loss in case of default due to their
subordinated nature. Hence, they are rated only one notch below
the bank's VR.
Interbank's junior subordinated bonds, rated four notches below
the bank's VR, have strong equity-like features including the non-
cumulative deferral of the coupons and a deeper subordination.
This notching reflects the incremental non-performance risk
relative to that captured by the VR and the loss severity (two
notches) given its deeper subordination.
RATING SENSITIVITIES
VR, IDRs AND SENIOR DEBT
Given its current rating, there is little upside potential for
Interbank's VR and IDRs.
Interbank's ratings could be downgraded if a severe decline in
asset quality (PDLs above 4%) or weak profitability erode its
capital (FCC below 9%) and reserve cushion.
SUPPORT RATING AND SUPPORT RATING FLOOR
Interbank's SR and SRF could be affected if Fitch changes its view
of Peru's ability or willingness to support the bank.
SUBORDINATED DEBT AND OTHER HYBRID SECURITIES
The Subordinated and Junior Subordinated debt ratings would move
in line with Interbank's VR.
Fitch has taken the following rating actions on Interbank:
--Long-term foreign currency IDR upgraded to 'BBB+' from 'BBB',
Stable Outlook;
--Short-term foreign currency IDR affirmed at 'F2' ;
--Long-term local currency IDR upgraded to 'BBB+' from 'BBB',
Stable Outlook;
--Short-term local currency IDR affirmed at 'F2';
--Viability rating upgraded to 'bbb+' from 'bbb';
--Support rating upgraded to '2' from '3';
--Support floor revised to 'BBB' from 'BB+';
--Senior unsecured debt upgraded to 'BBB+' from 'BBB';
--Subordinated debt upgraded to 'BBB' from 'BBB-';
--Junior subordinated debt at upgraded to 'BB' from 'BB-'.
===============================
T R I N I D A D & T O B A G O
===============================
TRINIDAD & TOBAGO: US$ Worries to End Soon, Governor Says
---------------------------------------------------------
Carla Bridglal at Trinidad Express reports that the recent
tightness in the domestic foreign exchange market will soon be at
an end, possibly before the end of the week, Central Bank Governor
Jwala Rambarran said.
"With the sizable intervention we have made we have cleared all of
the accumulated demand and put more in to clear the demand going
forward. We have put enough into the system to clear out all of
the demand for the period ahead. June is usually a very liquid
month for foreign exchange. And we've changed how we sell in that
we will be making more timely interventions than before-even
before tightness in the market, we will be coming in," Trinidad
Express quoted Governor Rambarran as saying.
The report notes that the quantity of foreign exchange in the
commercial banking system (from customer deposits) is about US$4
billion. The overall demand is about US$6 billion -- a difference
of US$2 billion that is usually picked up by the Central Bank, the
report relates.
The report discloses that for the first five months of 2014, the
Bank has injected US$610 million into the financial system.
Governor Rambarran hit back at critics who had blamed the apparent
shortage in the financial system on the Bank's new auction system
to authorized dealers, the report relays.
"There have been many opinions circulating on this topic and I
will say in most cases these opinions have been uninformed,"
Governor Rambarran said, the report notes.
The report discloses that Governor Rambarran noted that the
"sensitive issue" entered the political domain via comments made
by "those who displayed little knowledge and understanding about
the Central Bank's role in the domestic foreign exchange market".
Governor Rambarran assured the country that the dollar was not in
danger of being devalued, and that the country had sufficient
foreign exchange to meet demand, the report relates. Foreign
exchange reserves, Governor Rambarran said, amounted to US$10.5
billion, or more than a year of import cover.
Governor Rambarran explained the Bank's new system, introduced in
April, and which replaced the previous 21-year-old system
instituted after the liberalization of the market in April 1993,
the report adds.
***********
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
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Nothing in the TCR-LA constitutes an offer or solicitation to buy
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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
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***********
S U B S C R I P T I O N I N F O R M A T I O N
Troubled Company Reporter-Latin America is a daily newsletter
co-published by Bankruptcy Creditors' Service, Inc., Fairless
Hills, Pennsylvania, USA, and Beard Group, Inc., Washington, D.C.,
USA, Marites O. Claro, Joy A. Agravante, Rousel Elaine T.
Fernandez, Valerie U. Pascual, Julie Anne L. Toledo, and Peter A.
Chapman, Editors.
Copyright 2014. All rights reserved. ISSN 1529-2746.
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