/raid1/www/Hosts/bankrupt/TCRLA

/raid1/www/Hosts/bankrupt/TCRLA_Public/140627.mbx T R O U B L E D C O M P A N Y R E P O R T E R L A T I N A M E R I C A Friday, June 27, 2014, Vol. 15, No. 126 Headlines B R A Z I L OAS FINANCE: Moody's Rates $400MM Sr. Unsecured Notes 'B1' OAS FINANCE: S&P Assigns 'BB-' Rating to Proposed Sr. Notes C A Y M A N I S L A N D S CALLIDUS DEBT: Commences Wind-Up Proceedings DKR WOLF: Creditors' Proofs of Debt Due July 8 DKR WOLF HOLDING: Creditors' Proofs of Debt Due July 8 ELUSTRIA CAPITAL: Creditors' Proofs of Debt Due July 17 EUCLID MASTER: Creditors' Proofs of Debt Due July 8 EUCLID OFFSHORE: Creditors' Proofs of Debt Due July 8 FAIRFIELD WILSHIRE: Shareholders' Final Meeting Set for July 9 VINCI GAS: Creditors' Proofs of Debt Due July 8 VINCI GAS MASTER: Creditors' Proofs of Debt Due July 8 VINCI GAS OFFSHORE: Creditors' Proofs of Debt Due July 8 D O M I N I C A N R E P U B L I C DOMINICAN REPUBLIC: Energy Supply 'Seriously Vulnerable' XSTRATA PLC: Dominican Rep Poised to Dash Glencore's Mine Plan G U Y A N A * GUYANA: To Get $37.6MM IDB Loan to Strengthen Electricity System M E X I C O CORPOVAEL S.A.: Moody's Assigns Ba3 Rating to MXN300MM Certs. P E R U INRETAIL SHOPPING: Moody's Assigns Ba2 Senior Unsecured Rating P U E R T O R I C O CUE & LOPEZ: Oriental Bank Wants to Continue State Court Action PUERTO RICO: Governor Aims to Revamp Debt of Public Corporations T R I N I D A D & T O B A G O CARIBBEAN AIRLINES: Share of US Market Plunged Last Year - - - - - =========== B R A Z I L =========== OAS FINANCE: Moody's Rates $400MM Sr. Unsecured Notes 'B1' ---------------------------------------------------------- Moody's Investors Service has assigned a B1 foreign currency rating to the proposed USD400 million 7-year senior unsecured notes to be issued by OAS Finance Limited (OFL), a wholly-owned finance subsidiary of OAS S.A. (OAS). The notes will be unconditionally and irrevocably guaranteed by OAS, Construtora OAS S.A. and OAS Investimentos S.A. The outlook for the rating is stable. The proceeds from the note will be primarily used for liability management at OAS. The rating of the proposed notes assumes that the final transaction documents will not be materially different from draft legal documentation reviewed by Moody's to date and that these agreements are legally valid, binding and enforceable. Ratings assigned: Issuer: OAS Finance Limited (OFL) USD400 million senior unsecured notes due 2021: B1 Ratings unchanged: Company: OAS S.A. (OAS) Corporate Family Rating: B1 Issuer: OAS Finance Limited (OFL) USD500 million Perpetual Notes: B1 Issuer: OAS Investments GmbH (OIG) USD875 million senior unsecured notes due 2019: B1 The outlook for all ratings is stable. Ratings Rationale OAS's B1 rating reflects the company's good position in the Brazilian construction market, experienced management team, solid track record of execution, and strong construction backlog of BRL20.2 billion that provides visibility for near term revenue generation. The rating also considers the recent improvement in the company's liquidity position and evolving corporate governance practices. The positive prospects for the construction industry in Brazil, related to significant infrastructure development needs, further support the rating and stable outlook. Constraining OAS' rating is its high leverage resulting from the debt-funded expansion of the concession business and the company's decision to expand its construction segment internationally in recent years. While Moody's expect a gradual leverage reduction over the following years, the rating remains constrained by OAS's relative small size when compared to its global and local peers, both in terms of revenues and backlog. The proposed USD400 million issuance is part of the company's liability management strategy, as the majority of the net proceeds will be used to prepay existing banking debt of OAS, comprising local secured and unsecured debentures and financings issued in Brazilian reais. Moody's sees no immediate impact on cash flow generation nor significant change in leverage following the issuance. The proposed issuance will contribute to an improvement in OAS consolidated debt maturity profile and a reduction in its overall cost of debt. On the other hand, it will increase the amount of foreign currency debt in the company's capital structure to approximately 52% of the total outstanding debt , up from 41% by the end 2013. According to the management, the company will continue to pursue its hedging strategy for protection of the cash flow impact of foreign exchange variations over the next 5 years. Moody's believes that the company is well protected in a scenario of up to 27% devaluation of the local currency. The stable outlook is based on Moody's expectations that OAS will be successful in maintaining its presence and market share both in the construction and infrastructure businesses. The outlook also incorporates our expectation that the company's leverage will decline overtime, with the increased contribution of dividends from new projects, as well as stronger cash flows at the construction segment. The rating could be upgraded if OAS is able to sustain revenue growth and adequate operating performance, while diversifying its backlog into countries and regions other than Brazil (currently representing 66% of total backlog). Quantitatively, an upgrade of the rating would require leverage, as measured by gross debt to adjusted EBITDA, to remain below 4.25x (7.8x as of December 31, 2013), and interest coverage, as measured by adjusted EBITA to interest expense, to increase 2.25x (1.0x as of December 31, 2013), along with an adequate liquidity profile. OAS' ratings could be downgraded if credit metrics or liquidity deteriorate without expectation of improving in the near term, for example, due to a deterioration in the operating environment (stemming from economic slowdown and/or increased competition), negatively impacting OAS' margins and revenue growth. Quantitatively, negative pressure could come from funds from operations to adjusted debt remaining in levels below 5% (7.2% as of December 31, 2013) for a prolonged period. The principal methodology used in this rating was Global Construction Methodology published in November 2010. Headquartered in Sao Paulo, Brazil, OAS S.A. (OAS) is a major engineering, construction and infrastructure investment company in Brazil. The company has presence in 19 countries, with construction works in 16 countries: Brazil, 10 countries in Latin America and five countries in Africa. OAS also has 23 infrastructure projects in its portfolio. In 2013, the company generated consolidated net revenues of about BRL7.9 billion (USD3.7 billion) and adjusted EBITA of BRL855 million (USD398 million). OAS FINANCE: S&P Assigns 'BB-' Rating to Proposed Sr. Notes ----------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'BB-' rating to OAS Finance Limited's proposed senior notes. OAS Finance is a wholly-owned finance subsidiary of OAS S.A. (OAS). The notes will benefit from unconditional guarantee from OAS, Construtora OAS S.A., and OAS Investimentos S.A. S&P expects the company to use the proceeds of this issuance for refinancing activities amid to reduce its debt cost. The issue-level rating reflects the credit quality of OAS (BB- /Negative/--). Although OAS is a nonoperating holding company entitled only to the residual net worth of the operating companies, S&P believes the potential structural subordination is mitigated by the upstream guarantee from all of its operating subsidiaries. S&P's 'BB-' rating on OAS reflects its experience and favorable track record in the Brazilian engineering and construction industry. The group also has more than R$20 billion in backlog as of March 2014 that, in S&P's view, provides a relatively high predictability for revenues and cash generation in the next two years. The negative outlook is based on group's slower-than expected debt reduction due to losses in its homebuilding division and some delays in Brazilian public-sector projects backlog. The outlook indicates a one-notch downgrade potential if OAS fails to improve its credit metrics to levels more consistent with our "aggressive" financial profile (net debt to EBITDA lower than 5x and FFO to net debt of about 12%). RATINGS LIST OAS S.A. Corporate credit rating BB-/Negative/-- Rating Assigned OAS Finance Limited Senior notes BB- ========================== C A Y M A N I S L A N D S ========================== CALLIDUS DEBT: Commences Wind-Up Proceedings -------------------------------------------- At an extraordinary general meeting held on May 27, 2014, the shareholders of Callidus Debt Partners CDO Fund I, Ltd resolved to voluntarily wind up the company's operations. Creditors are required to file their proofs of debt to be included in the company's dividend distribution. The company's liquidator is: Commerce Corporate Services Limited P.O. Box 694 Grand Cayman Cayman Islands Telephone: 949 8666 Facsimile: 949 0626 DKR WOLF: Creditors' Proofs of Debt Due July 8 ---------------------------------------------- The creditors of DKR Wolf Point Fund Ltd. are required to file their proofs of debt by July 8, 2014, to be included in the company's dividend distribution. The company commenced wind-up proceedings on June 5, 2014. The company's liquidator is: Richard Fear c/o Daniel Woolston Telephone: (345) 814 7782 Facsimile: (345) 945 3902 P.O. Box 2681 Grand Cayman KY1-1111 Cayman Islands DKR WOLF HOLDING: Creditors' Proofs of Debt Due July 8 ------------------------------------------------------ The creditors of DKR WOLF Point Holding Fund Ltd. are required to file their proofs of debt by July 8, 2014, to be included in the company's dividend distribution. The company commenced wind-up proceedings on June 5, 2014. The company's liquidator is: Richard Fear c/o Daniel Woolston P.O. Box 2681 Grand Cayman KY1-1111 Cayman Islands Telephone: (345) 814 7782 Facsimile: (345) 945 3902 ELUSTRIA CAPITAL: Creditors' Proofs of Debt Due July 17 ------------------------------------------------------- The creditors of Elustria Capital Partners Offshore Fund Ltd. are required to file their proofs of debt by July 17, 2014, to be included in the company's dividend distribution. The company commenced liquidation proceedings on May 25, 2014. The company's liquidator is: Intertrust SPV (Cayman) Limited 190 Elgin Avenue, George Town Grand Cayman KY1-9005 Cayman Islands c/o Kim Charaman/Jennifer Chailler Telephone: (345) 943-3100 EUCLID MASTER: Creditors' Proofs of Debt Due July 8 --------------------------------------------------- The creditors of Euclid Master Fund Ltd. are required to file their proofs of debt by July 8, 2014, to be included in the company's dividend distribution. The company commenced wind-up proceedings on June 3, 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 EUCLID OFFSHORE: Creditors' Proofs of Debt Due July 8 ----------------------------------------------------- The creditors of Euclid Offshore Feeder Fund Ltd are required to file their proofs of debt by July 8, 2014, to be included in the company's dividend distribution. The company commenced wind-up proceedings on June 3, 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 FAIRFIELD WILSHIRE: Shareholders' Final Meeting Set for July 9 -------------------------------------------------------------- The shareholders of Fairfield Wilshire Portable Alpha Fund, Ltd. will hold their final meeting on July 9, 2014, at 12:30 p.m., to receive the liquidator's report on the company's wind-up proceedings and property disposal. The company commenced liquidation proceedings on June 5, 2014. The company's liquidator is: Stuarts Walker Hersant Telephone: (345) 949 3344 Facsimile: (345) 949 2888 P.O. Box 2510 Grand Cayman KY1-1104 Cayman Islands VINCI GAS: Creditors' Proofs of Debt Due July 8 ----------------------------------------------- The creditors of Vinci Gas Discovery Fund are required to file their proofs of debt by July 8, 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: Ogier c/o Jonathan Turnham Telephone: (345) 815 1839 Facsimile: (345) 949-9877 89 Nexus Way, Camana Bay Grand Cayman KY1-9007 Cayman Islands VINCI GAS MASTER: Creditors' Proofs of Debt Due July 8 ------------------------------------------------------ The creditors of Vinci Gas Discovery Master Fund are required to file their proofs of debt by July 8, 2014, to be included in the company's dividend distribution. The company commenced wind-up proceedings on May 26, 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 VINCI GAS OFFSHORE: Creditors' Proofs of Debt Due July 8 -------------------------------------------------------- The creditors of Vinci Gas Discovery Offshore Fund are required to file their proofs of debt by July 8, 2014, to be included in the company's dividend distribution. The company commenced wind-up proceedings on April 24, 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 =================================== D O M I N I C A N R E P U B L I C =================================== DOMINICAN REPUBLIC: Energy Supply 'Seriously Vulnerable' -------------------------------------------------------- Dominican Today reports that Dominican Republic is "seriously vulnerable" to the supply of energy since it consumes 140 million barrels of oil daily, which it has to import. Energy and Mines Minister Pelegrin Castillo said that the country's liquid fuel reserves would last only one week; propane gas for 12 days and 21 of natural gas, according to Dominican Today. The report notes that Mr. Castillo said it could be a bit more if private storage infrastructure is included, "but they never exceed the critical level, in a region full of risk and volatility." The report relates that Mr. Castillo also warned against having the country's energy infrastructure "dangerously stacked along its southern coastline," between San Pedro in the east and Ocoa Bay in the west. The report notes that Mr. Castillo said the State must deal with energy security through an active policy to explore for oil and natural gas on land and sea. Mr. Castillo added that the country will have to diversify its energy base and cited as an example the conversion to natural gas of existing power plants and the installation of coal-fired plants, the report discloses. XSTRATA PLC: Dominican Rep Poised to Dash Glencore's Mine Plan -------------------------------------------------------------- Dominican Today reports that Chamber of Deputies president Abel Martinez said the bill to create Loma Miranda National Park will not be sent to Commission and would be immediately read as approved by the Senate, announcement which dashes the planned mine at the Central Mountain site by Glencore's local operation, Falcondo. Mr. Martinez said the full floor adopted the decision despite calling a "straightjacket" the legislation sent by the Senate, according to Dominican Today. "The legislature is coming to an end (in July) so we in the Chamber of Deputies must be cautious but above all uphold the spirit of the law to declare Loma Miranda a National Park which started in the Chamber of Deputies so that this can become a reality," the report quoted Mr. Martinez as saying. The lawmaker said however that the Special Senate Committee report reveals that the bill was amended in all its parts that makes it a "straightjacket" for the deputies, the report notes. "What would have here is a new law, obviously mounted on a legislative fast track process which started in the Chamber of Deputies, this for us constitutes a straitjacket," Mr. Martinez said, the report discloses. As reported in the Troubled Company Reporter-Latin America on Jan. 22, 2014, Dominican Today said that Chief Executive Officer of Xstrata PLC's Falcondo reiterated that the company's presence in the country depends on a long term mining, with cheap electricity available, to produce and compete in world markets. David Soares said they pin their hopes of extracting nickel at the controversial site of Loma Miranda, between La Vega and Bonao (central), for which they expect to get the mining permit, according to Dominican Today. But environmental and civil society groups could keep them from carrying out the project, after the Chamber of Deputies agreed with the protesters and passed a bill which declares Loma Miranda a protected area, arguing that much of the Cibao region's (north) water depends on it, the report related. Xstrata PLC is the operator of Falconbridge Dominicana, C. por A. ("Falcondo") with an 85.26% ownership. Falcondo is a ferronickel surface mining operation located in the Dominican Republic with operations dating since 1971. Headquartered in Zug, Switzerland, Xstrata PLC is a major producer of coal, copper, nickel, primary vanadium and zinc and the largest producer of ferrochrome =========== G U Y A N A =========== * GUYANA: To Get $37.6MM IDB Loan to Strengthen Electricity System ------------------------------------------------------------------ The Inter-American Development Bank approved loans totaling approximately $37.6 million and has also secured non-reimbursable investment financing from the European Union totaling approximately $26.9 million to help boost the efficiency and reliability of Guyana's power system through electricity loss reduction measures, improvements in the operational capabilities, and strengthening the management and corporate performance of the country's utility, Guyana Power and Light, Inc. (GPL). Reducing overall electricity losses can improve GPL's financial performance, while alleviating the government's fiscal commitments about the energy sector. Guyana is expecting a significant increase in electricity consumption during the next decade because of the growth of its residential and commercial sectors and the expected return of large customers to the national power grid. GPL is now facing various challenges in trying to provide additional electricity on an efficient and reliable basis, which include high levels of electricity losses. As Guyana's energy demand increases, the distribution infrastructure will experience greater stresses, and in turn, this will challenge GPL's management and its ability to manage electricity supply. Previous IDB experience in Guyana and other countries in the Latin America and Caribbean region have proven the importance of approaching electricity reduction measures in a way that tackles both technical and commercial losses, while highlighting the value of supporting improvements in management practices and operational systems. The Power Utility Upgrade Program is designed as a holistic, integrated approach to support GPL with financing for critical infrastructure investments and technical support for GPL's key business areas. This support should increase GPL's overall performance, reinforce GPL's operational capabilities, and the achievement of a sustained trend in overall loss reduction. The three main components of this loan reflect this approach with the following expected results: (1) a sustained trend in overall loss reduction; (2) an improved and accountable management performance against consistent Key Performance Indicators and within minimum international standards; and (3) more modern, efficient, and reliable operational systems in GPL.This new program will rehabilitate approximately 830 kilometers of GPL's distribution network by implementing an integral approach to tackle overall losses while strengthening GPL's management and technical capabilities. Under the IDB's new and innovative Grant Leverage Mechanism, the Guyana Power Utility Upgrade Program will be the first to be co- financed with IDB resources and those to be provided on a non- reimbursable basis by the European Union's Caribbean Investment Facility (CIF). The total estimated budget is US$64,573,000. The IDB's financing will consist of up to US$22,500,000 in credit from Ordinary Capital loan resources for a 30-year term, a 6-year grace period. A second IDB credit will total up to US$15,141,750 Ordinary Capital/Fund for Special Operations "parallel loans" for a 40-year term with a 40-year grace period.,. The European Union is expected to contribute EUR19,375,000 (equivalent to US $26,931,250) through a Project Specific Grant (PSG), which will be administered by the IDB. =========== M E X I C O =========== CORPOVAEL S.A.: Moody's Assigns Ba3 Rating to MXN300MM Certs. ------------------------------------------------------------- Moody's de Mexico has assigned Ba3 global scale and A3.mx national scale ratings to Corpovael, S.A. de C.V. ("CADU")'s proposed MXN 300 million certificados bursatiles due 2017. In addition, Moody's affirmed CADU's B1 corporate family rating and the Ba3/A3.mx rating on its existing certificados burs tiles (CADU 12). The rating outlook is stable. The following ratings were assigned: MXN 300 million proposed Certificados Bursatiles due 2017 . . . Ba3 / A3.mx The following ratings were affirmed: Corpovael, S.A. de C.V. B1 Corporate Family Rating MXN 300 million Certificados Bursatiles due 2015 (CADU 12). . . Ba3 / A3.mx Ratings Rationale Corpovael's B1 CFR reflects its track record of solid earnings growth, coupled with efficient operating processes and cost controls in the midst of a challenging environment for Mexican homebuilders. These positive factors are offset by the substantial geographic concentration in the State of Quintana Roo, whose economy is largely reliant on the tourism sector. Moreover, mortgages used as take-out financing on the majority of Corpovael's construction loans are allocated almost exclusively by Mexican Workers' Housing Fund (INFONAVIT) and there is a relevant reliance on the Mexican government's support for the housing sector. The Ba3 / A3.mx ratings for Corpovael's certificados burs tiles (Mexican local bonds) consider the partial guarantee provided by Sociedad Hipotecaria Federal (SHF, A3 stable). The partial guarantee provides for full recovery on 50% of the instrument's value in the event of default, while the other 50% is effectively subordinated to secured debt in the company's capital structure and at risk for high losses in the event of default. Absent the partial guarantee, the certificados bursatiles would have been rated below the B1 CFR, on the global scale. For the last twelve months (LTM) ended in March 31, 2014, Corpovael had revenues of USD 197 million, positioning the company in the bottom of the homebuilders rated universe in terms of scale. Moreover, Corpovael has a high concentration in Quintana Roo, with more than 60% of total homes titled in that state for the same period. Quintana Roo's economy is heavily reliant on the tourism industry, home to the popular destinations of Cancun and Playa del Carmen. As a result, the company's clients mainly consist of workers directly or indirectly affiliated with the tourism industry. While Cancun and Playa del Carmen have maintained strong growth in local and foreign investments, concentration in a region that is dependent on tourism is credit negative. Mitigating the concentration risk is the fact that the company has been able to gradually increase its geographic diversification. In 2012, 95% of its revenues were generated in the Quintana Roo state as compared to around 70% in 2013 and the estimated 60% of total revenues in 2014. Moody's would view further decrease in Quintana Roo's home titles, to around 50%, as a credit positive for the company. Corpovael ratings have been supported by its historically solid credit metrics and operating margins. The company operates under a fully integrated business model, in which it does not utilize subcontractors, and has demonstrated therefore better cost controls. Moreover, the company's leading position in its main market has also supported performance stability over time. Nevertheless, Cadu's profitability has been deteriorating over the last few quarters. For the full year ended in 2013, the company's EBIT margin was 17.9%, which negatively compares with the 21.7% reported in the previous year, and came further down to 15.3% for the LTM ended in March 31, 2014, as a consequence of weak first quarter results. According to Cadu, performance in 2013 was affected by the strategy of increasing its footprint. The learning curve of entering in new markets resulted in lower operating efficiency, which should gradually normalize as it gains more experience operating in the new regions. However, in Moody's view profitability might not get back to historical levels, considering the more challenging competitive environment. Moreover, the weak 1Q14 , with revenues 14% below the same quarter of 2013, was driven by the low inventory levels as a result of a much stronger than anticipated demand in the 4Q13. Moving forward, Moody's expect the company to be able to re-build inventories in order to meet its business plan for 2014. As a consequence of the recent deterioration in profitability, Corpovael's leverage and capital structure have weaken. For the LTM ended in March 31, 2014, the company's debt to total capitalization ratio was 47%, which negatively compares to 41% in 2012. Interest coverage was also reduced in the LTM to 4.0x from 5.1x in 2012. Although these current credit metrics are still commensurate with the B1 rating category, they do not provide much cushion for further softening. Liquidity is weak mainly due to large debt maturities in the upcoming years. As of March 31, 2014 Corpovael's short-term debt represented approximately 42.5% of total debt, which could create liquidity challenges if not refinanced timely. In April 2014, the company paid down out of cash MXN 150 million related to a partial amortization of its CADU 12 local notes. Also, part of the proceeds from the proposed notes would be directed to refinance bank debt. Approximately, MXN 70 million maturing in the short term and MXN 70 million that have amortizations until 2018 and collateral that will be released after the payment. Although the recent actions will result in lower liquidity risk, it will still be pressured by the around MXN 350 million in bank debt maturities in 2015. These maturities are mainly tied to its development projects, which amortize as the projects are sold. Mortgage financing, used for construction loan take-outs, comes mainly from the Mexican Workers' Housing Fund (INFONAVIT), a potential concern because if the take-out financing for newly built homes delays, could create liquidity pressures. Somewhat enhancing Corpovael's liquidity are the around MXN 1.4 billion construction credit lines (MXN 1 billion available) signed with Banamex and SHF maturing in 2016 and 2018, respectively. The company's four year land bank also supports its liquidity position, since it allows for mid-term growth without major capital commitment needs. The stable outlook is supported by Moody's expectation that Corpovael will be able to continue to grow in accordance with its business plan while at least maintaining interest coverage, leverage (as measured by Debt / Total Capitalization) and gross margin ratios at 2013 full year levels. The stable outlook also reflects Moody's expectation that Corpovael will improve its liquidity through a timely refinancing of its upcoming debt maturities and that it will continue to reduce its exposure to Quintana Roo through expansion into other states in Mexico. Rating improvements are not envisioned in the medium-term, given the company's relatively small scale and low geographic diversification. Moreover, a positive rating action would require broader access to the capital markets and terming out its short- term construction financing while moving towards a more unsecured debt capital structure. Upward movement in the rating would also require maintenance of its current credit metrics and operating margins with a decrease in geographic concentration in the State of Quintana Roo to closer to 50%. Downward rating pressure would result from substantial missteps in its growth and geographic diversification strategy, such as significant postponement of new launches, construction delays and reduction in new home sales. In addition, downward rating movements would occur should total debt to total capitalization levels rise closer to 50%, with gross margins below the mid-20% range on a sustained basis and interest coverage including capitalized interests falling consistently below 3.0x. Further weakening of the company's liquidity profile, due to delays in refinancing of upcoming debt maturities could also lead to a negative rating action. Headquartered in the city of Cancun in the Mexican state of Quintana Roo, Corpovael, S.A. de C.V. is a privately owned homebuilding company, controlled by the Vaca Elguero family and operating through an integrated business model in the Mexican states of Quintana Roo, Jalisco, Estado de M‚xico, Aguascalientes and Guanajuato. The company is focused in the low income housing segment and has a leading market position in the state of Quintana Roo that will represent around 70% of Corpovael's total titled houses in 2013. For the LTM ended in March 31, 2014 the company had revenues of MXN 2,539 million and an EBITDA margin of around 15.6%. The principal methodology used in this rating was Global Homebuilding Industry published in March 2009. The period of time covered in the financial information used to determine Corpovael, S.A. de C.V.'s rating is between 12/31/2009 and 3/31/2014 (source: Bolsa Mexicana de Valores and the company). ======= P E R U ======= INRETAIL SHOPPING: Moody's Assigns Ba2 Senior Unsecured Rating -------------------------------------------------------------- Moody's Investors Service has assigned a Ba2 senior unsecured rating to InRetail Shopping Malls, a Peruvian trust (fideicomiso de titulizacion) that owns certificates of participation granting rights to the proceeds from shopping malls owned by Interproperties Holding and Interproperties Holding II. Interproperties Holding and Interproperties Holding II control Interproperties Peru, which owns all of the assets. The rating outlook is stable. This is the first rating assigned to InRetail Shopping Malls by the rating agency. Concurrently, Moody's has affirmed the Ba3 senior secured rating of Interproperties Finance Trust with a stable outlook and will subsequently withdraw it. Ratings Rationale InRetail Shopping Malls will issue up to US$300 million of senior unsecured notes with a seven year maturity. The notes will have a full and unconditional guarantee from InRetail Real Estate Corp., Interproperties Holding, Interproperties Holding II, InRetail Properties Management S.R.L and Real Plaza S.R.L. The notes will be pari passu to other existing and future unsecured debt of InRetail Shopping Malls and the guarantors. Bondholders will have claims to all assets owned by Interproperties Peru. The proceeds will be used to redeem a US$185 million secured bond issued by Interproperties Finance Trust, a subsidiary of InRetail Shopping Malls, as well as to purchase land for a future development and capex. The interest and principal payments on the notes are not hedged. This creates foreign currency risk, which is somewhat mitigated by InRetail Shopping Malls' collection of approximately one-third of base rents in US dollars. Also, recent history supports a stable Peruvian currency and Peru's financial system is approximately 40% dollarized. However, any substantial currency movements that would stress InRetail Shopping Malls' ability to repay the bonds' debt service will place negative pressure on the rating. InRetail Shopping Malls' portfolio consists of 19 shopping malls, of which three are solely managed, totaling approximately 554,000 square meters (m2) located in Lima and other provinces throughout Peru. Moody's Ba2 senior unsecured rating incorporates the company's industry leadership in the Peruvian shopping mall sector, high occupancy, low near-term debt maturities, well- laddered lease maturity schedule and experienced management team with a proven track record in retail and development. These strengths are mitigated by the company's small size in terms of total assets, weak liquidity profile and high tenant, geographic and asset concentration. The stable rating outlook reflects Moody's expectation that InRetail Shopping Malls will continue to prudently grow its current portfolio while maintaining stable credit metrics and adequate liquidity. Positive ratings movement is unlikely in the intermediate term, however would be predicated upon fully loaded fixed charge coverage (interest expense, capitalized interest and principal amortization) consistently above 3.0x, an increase in unencumbered asset pool to above 80% of gross assets, secured debt levels below 5% and the development pipeline less than 15% of gross assets on a sustained basis through real estate cycles. Negative rating pressure would likely result from any material difficulty with the execution and lease-up of the development pipeline (specifically Puruchuco mall), rapid deceleration of tenants sales and increase in mall vacancies, an inability to show adequate liquidity for the next 24 months and Net Debt/EBITDA consistently above 5x. The following rating was assigned with a stable outlook: InRetail Shopping Malls -- Senior unsecured rating at Ba2 The following rating was affirmed with a stable outlook and will subsequently be withdrawn: Interproperties Finance Trust -- Senior secured rating at Ba3 Moody's last rating action with respect to Interproperties Finance Trust was on November 8, 2011 when Moody's assigned a Ba3 senior secured rating with a stable outlook. InRetail Shopping Malls, is a shopping center owner and operator in Peru with a total owned portfolio of 16 assets, representing 495,000 square meters (m2) of GLA. As of March 31, 2014, InRetail Shopping Malls had total book assets of US$890 million and shareholder equity of $578 million. The principal methodology used in this rating was Global Rating Methodology for REITs and Other Commercial Property Firms published in July 2010. ===================== P U E R T O R I C O ===================== CUE & LOPEZ: Oriental Bank Wants to Continue State Court Action --------------------------------------------------------------- Oriental Bank and Trust asks the Bankruptcy Court to enter judgment granting the continuance of a state court action against Cue & Lopez Construction, Inc., et al.'s guarantors. On March 20, 2013, Oriental filed a complaint against the Debtors, contractors and co-defendants, as guarantors, with the Court of First Instance of Puerto Rico, San Juan Section. The State Court Action has been stayed against Cue & Lopez as a result of its Chapter 11 filing. The co-defendants are: * Frank Cue Garcia; * Frank Cue Fernandez; * Mario R. Lopez Bernal; * Mario R. Lopez Reinante, his spouse Juana Bernal Quintana and their conjugal partnership; * Jose M. Lopez Bernal his spouse Miriam Sanchez Salgado and their conjugal partnership; * Jesus O. Lopez Bernal, his spouse Myrna Toro Torres and their conjugal partnership. The complaint in the State Court Action is for the collection of money, foreclosure of pledge and mortgage and movable lien, with six causes of action based on loans to Cue & Lopez for the principal amount of $3,975,000 for a line of credit, evidenced by promissory notes guaranteed by first mortgages over the Debtor's realty, consisting of residential penthouse apartment 515, Hillsview Plaza Condominium, Los Frailes Ward, Guaynabo, Puerto Rico; lot 23 of Grand Palm II Development, Sabana Ward, Vega Alta, Puerto Rico; apartment number 633 in Las Vistas of Gurabo Condominium, Navarro Ward, Gurabo, Puerto Rico; and a second mortgage on lots at Cupey Ward consisting of 450 square meters, 1,492 square meters; guaranteed by the co-defendants. The outstanding principal amount of $3,975,000 is also secured by the retainages relative to the Casa Maggiore construction project up to $311,587. Oriental Bank and Trust is represented by: William Santiago Sastre, Esq. DE DIEGO LAW OFFICES, PSC P.O. Box 79552 Carolina, PR 00984-9552 About Cue & Lopez San Juan, Puerto Rico-based Cue & Lopez Construction, Inc., sought protection under Chapter 11 of the Bankruptcy Code on Oct. 4, 2013 (Case No. 13-08297, Bankr. D.P.R.). The case is assigned to Judge Brian K. Tester. Cue & Lopez Contractors, Inc., filed a separate Chapter 11 petition (Case No. 13-08299) on the same date. The Debtors are represented by Charles Alfred Cuprill, Esq., at Charles A. Curpill, PSC Law Office, in San Juan, Puerto Rico. CPA Luis R. Carrasquillo & Co., P.S.C., serves as accountant. Cue & Lopez Construction scheduled $13,334,151 in total assets and $17,520,089 in total liabilities. The Chapter 11 petitions were signed by Frank F. Cue Garcia, president. PUERTO RICO: Governor Aims to Revamp Debt of Public Corporations ---------------------------------------------------------------- Michael Corkery, writing for The New York Times' DealBook, reported that Puerto Rico's governor, signaling worsening financial trouble for the island, proposed a legal means to revamp the debt of some its largest public corporations, which provide vital services like electricity. According to the report, the new law is meant to quell concerns that Puerto Rico's inability to file for federal bankruptcy protection would set off a chaotic scramble among creditors in the case of a default. The proposal made by Gov. Alejandro Garcia Padilla raises the specter that one of Puerto Rico's agencies could falter soon, the DealBook said, citing investors. "The absence of an orderly process would threaten the Puerto Rico government's capacity to safeguard the public and promote the general welfare of the people," the report quoted David H. Chafey Jr., chairman of the Government Development Bank for Puerto Rico, the island's fiscal agent, as saying. The bill comes as one of the island's most indebted public corporations -- Puerto Rico Electric Power Authority -- faces increasingly tense talks with its lenders, the DealBook related, citing people briefed on the matter. Failure to renew credit lines from its banks could hinder the authority's ability to buy oil to generate electricity for the island's 3.6 million people, these people said, the report further related. The authority also has a bank loan that it is hoping to extend in August, one of the people said, the report added. In a call with reporters, the report said, Mr. Chafey did not indicate that a default was imminent but noted that many public corporations were facing "financial difficulty." The report related that Puerto Rico continues to struggle with chronically high unemployment and a sluggish economy, while shouldering one of the highest debt loads of any municipal borrower. Regulators on the mainland United States worry that a missed debt payment by Puerto Rico or one of its public corporations would set off losses in the municipal market because the island's bonds are held widely by investors. In a speech, William Dudley, president of the Federal Reserve Bank of New York, said that Puerto Rico's persistent budget gaps and increasing debt load had "led to serious concerns about whether the island's fiscal position is sustainable," the DealBook said. The report stated that such concerns have driven down the price of Puerto Rico bonds, attracting hedge funds and other opportunistic investors. On June 25, the report said, Puerto Rico's most recently issued general obligation bond was trading at a yield of 9.3 percent, up from 8.6 percent when it was sold to investors in March, according to Thomson Reuters Municipal Market Data. Those yields, which move in the opposite direction from the price, are roughly three times higher than a benchmark of top-rated general obligation bonds. According to DealBook, the new law intends to create an organized process through which some debt can be cut or reduced. It would apply to at least $22 billion of debt owed by public corporations including the electric authority, the aqueduct and sewerage authority and the highway authority. The legislation does not apply to Puerto Rico's general obligation debt, which officials say carries constitutional protections that bondholders must be repaid. Despite those repeated assurances, some investors worry that the new law signals that Puerto Rico officials are willing to change the ground rules when facing severe financial stress, the report related. "What is at stake is the commonwealth's credibility given past statements regarding the island's sanctity of debt," the report quoted Robert Donahue, managing director at Municipal Market Advisors, a research firm, as saying. Still, the report noted that some investors say they were heartened somewhat by the government's efforts to prevent a free- for-all in the case of a default. Others worried that the law could accelerate restructurings by troubled public corporations. Some hedge funds have bought the electric authority's bonds, hoping that the agency would be privatized, people briefed on the investments said, the report disclosed. The idea is that private operators could run the power plants more efficiently than the government authority, ultimately increasing the value of the hedge funds' debt. But the proposed law could complicate such arbitrage because one of its provisions says that if creditors cannot agree on restructuring terms during a nine-month period, the matter goes before a judge in Puerto Rico, the report said. Analysts say a local judge would be more likely to side with government officials seeking to keep control of a public utility than with Wall Street investors, the report added. Mr. Chafey said he expected the Legislature to pass the bill soon. But the proposal could draw the political ire of public sector unions, DealBook said. The public corporations employ thousands of people who could face pay cuts in a restructuring, the report further disclosed. Even if it passes, analysts say, the law could face court challenges because it would allow the government to alter legally protected contracts, the report said. =============================== T R I N I D A D & T O B A G O =============================== CARIBBEAN AIRLINES: Share of US Market Plunged Last Year -------------------------------------------------------- Jamaica Observer reports that Caribbean Airlines Limited saw its share of the US-Jamaica market plunge 27 per cent in 2013. It meant that the Trinidad-based airline fell from the number two carrier of passengers to Jamaica, from the US, to number four, according to Jamaica Observer. The report relates that Delta Airlines, with its 14.6 per cent market share, carried just 700, or three per cent less passengers than Caribbean. The Atlanta-based carrier saw its passenger count grow by 29 per cent, or over 50,000 persons, the report notes. It increased the number of flights to the island by 31 per cent, particularly as it ramped up service to New York (from 40 flights in 2012 to 360 last year), the report discloses. With the introduction of new Kingston flights in 2014, Delta likely surpassed Caribbean this year, the report says. Caribbean cut the number of flights to New York by 30 per cent last year, along with a 35 per cent reduction in flights from Fort Lauderdale, the report notes. It also shed the Miami and Philadelphia routes from its service, the report discloses. The reduction in flights allowed the Trinidad-based airline to improve its load factor (the percentage of seats filled) from 70.2 per cent in 2012 to 76.8 per cent last year, the report says. But it still remained well below the average of 82.8 per cent for airlines traversing the US-Jamaica routes in 2013, the report relays. American Airlines independently maintained its number one spot with 330,000 passengers, or 21.7 per cent of travellers to and from the US, as it held on to its dominance over the Miami-Jamaica market, the report notes. Its merger with US Airways pushes the combined entity's passenger count over 560,000, or 37 per cent of the travellers to and from the US, the report relates. But US Airways held the number three spot on its own, the report notes. JetBlue, which has been expanding its share of the New York and Fort Lauderdale markets, held the number two spot last year, the report adds. Caribbean Airlines Limited -- http://www.caribbean-airlines.com/ -- provides passenger airline services in the Caribbean, South America, and North America. The company also offers freighter services for perishables, fish and seafood, live animals, human remains, and dangerous goods. In addition, it operates a duty free store in Trinidad. Caribbean Airlines Limited was founded in 2006 and is based in Piarco, Trinidad and Tobago. As reported in the Troubled Company Reporter-Latin America on May 20, 2013, Caribbean360.com said Trinidad and Tobago Finance Minister Larry Howai said Caribbean Airlines Limited recorded losses estimated at US$70 million in 2012. In 2011, CAL had recorded losses of US43.7 million. *********** 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 * * *