/raid1/www/Hosts/bankrupt/TCRLA

/raid1/www/Hosts/bankrupt/TCRLA_Public/140718.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, July 18, 2014, Vol. 15, No. 141 Headlines A R G E N T I N A ARGENTINA: High Court Ruling Isn't Win for NML Capital CONVEXITY PESOS: Moody's Assigns B-bf Global Bond Fund Rating FIDEICOMISO FINANCIERO: Moody's Rates ARS17.5MM Certs. 'Ba2.ar' B A H A M A S ULTRAPETROL (BAHAMAS): Southern Cross to Acquire Sipsa Interest B O L I V I A BANCO DE DESARROLLO: Moody's Affirms Ba3 Issuer & Debt Ratings BANCO GANADERO: Moody's Rates Bs.35MM Sub. Debt 3rd Issuance 'B2' B R A Z I L BROOKFIELD INCORPORACOES: Moody's Confirms B1 Global Scale CFR GOL LINHAS: Discloses Codeshare Agreement With Etihad OI S.A.: Fitch Lowers IDR to 'BB+' & Removes from CreditWatch Neg. C A Y M A N I S L A N D S BLACKLEAF HOLDINGS: Shareholders' Final Meeting Set for July 31 BOUTON LTD: Shareholder to Receive Wind-Up Report on July 23 CARILLON GREENFIELD: Shareholders' Final Meeting Set for Aug. 14 FALCON GROUP: S&P Puts 'B+' LT Counterparty Credit Rating FMIM DYNAMIC: Creditors' Proofs of Debt Due Aug. 14 FMIM DYNAMIC MASTER: Creditors' Proofs of Debt Due Aug. 14 GPI LDC: Shareholder to Receive Wind-Up Report on July 29 M2M HELLAS: Shareholders' Final Meeting Set for July 28 MARATHON LEGACY: Creditors' Proofs of Debt Due Aug. 5 MEZZANINE CAPITAL: Members' Final Meeting Set for Aug. 4 SAPIC III: Creditors' Proofs of Debt Due Aug. 11 D O M I N I C A N R E P U B L I C XSTRATA PLC: Glencore Could Take Country to Court, Economist Warns J A M A I C A CIBONEY GROUP: Racks Up Higher Losses * JAMAICA: World Bank Provides Funds to Enhance Public Services M E X I C O GRUPO POSADAS: Moody's Changes B2 CFR Outlook to Negative GUASAVE: Moody's Affirms Ba3 Global Scale Local Currency Rating SARE HOLDING: Moody's Cuts Issuer & Senior Debt Ratings to C/C.mx UNIFIN FINANCIERA: S&P Retains BB- Rating Following $100MM Add-On P U E R T O R I C O FERRETERIA Y AGROCENTRO: Case Summary & 20 Top Unsec. Creditors UNIVERSITY OF PUERTO RICO: S&P Cuts Revenue Bond Rating to 'BB' - - - - - ================= A R G E N T I N A ================= ARGENTINA: High Court Ruling Isn't Win for NML Capital ------------------------------------------------------ Law360 reported that the Republic of Argentina told the Ninth Circuit that NML Capital Ltd. is overstating a U.S. Supreme Court ruling allowing discovery for assets held by a foreign sovereign debtor, arguing against a lower court ruling that the country has to pay $1.4 billion to the hedge fund. According to the Law360 report, Argentina had appealed the lower court decision arguing that the discovery of assets sought by NML was improper because it did not take into account assets protected by the Foreign Sovereign Immunities Act, or FSIA. NML moved for summary affirmance in the Ninth Circuit after the Supreme Court denied Argentina's petition for certiorari in the case in June, Law360 related. Ken Parks, writing for The Wall Street Journal, reported that Argentine officials meet again with a court appointed mediator in New York as the country tries to negotiate a solution to a high stakes dispute over unpaid debts, according to a senior government official. Economy Minister Axel Kicillof met for several hours with Daniel Pollack, the lawyer that a U.S. judge named in June to oversee negotiations between Argentina and a small group of hedge funds that is suing to collect on defaulted Argentine bonds, the Journal related. According to the Journal, during the meeting, Mr. Kicillof asked that U.S. District Court Thomas Griesa suspend his ruling, which bars the country from paying investors who own restructured bonds unless it also pays the hedge funds. Complying with the judge's order is "impossible", the government said in a statement after the meeting, the Journal further related. Hugh Bronstein, writing for Reuters, reported that Argentina has accused the U.S. judge overseeing its bond dispute of being biased in favor of hedge funds that have sued the South American country for full repayment of defaulted bonds. The case is Republic of Argentina v. NML Capital Ltd. et al., case number 12-17738, in the U.S. Court of of Appeals for the Ninth Circuit. CONVEXITY PESOS: Moody's Assigns B-bf Global Bond Fund Rating ------------------------------------------------------------- Moody's Latin America Agente de Calificacion de Riesgo has assigned bond fund ratings to Convexity Pesos Plus, a newly launched fund that will be managed by local asset manager Convexity SGFCI S.A.. The ratings assigned are as follows: - Global scale bond fund rating: B-bf - National scale bond fund rating: A-bf.ar Ratings Rationale "The fund ratings are based on Moody's expectation that Convexity Pesos Pus will maintain an average of 30% of invested assets in Treasury bills and bonds issued by the Argentinean Central Bank and 20% in ABS securities with an average rating of B3/A1.ar- A3.ar. The remainder of the fund's assets will be allocated to similarly-rated corporate bonds, time deposits and municipal securities. This portfolio will target a return on par with the BADLAR interest rate with maximum annual volatility of 2% and an average duration not exceeding one year," said Moody's lead analyst Carlos de Nevares. The new fund expects key shareholders to be institutional investors such as local insurance companies which are clients of affiliates of Convexity Securities SGFI S.A... The principal methodology used in this rating was Moody's Revised Bond Fund Rating Methodology and Symbols published in May 2013. Convexity SGFCI S.A., the asset management arm of Advanced Capital Securities, a local brokerage group, is an independent asset manager in the Argentinean mutual fund Industry with a 0.2% market share. As of June 2014, Convexity AM manages approximately AR$205 million or approximately $25.1 million. FIDEICOMISO FINANCIERO: Moody's Rates ARS17.5MM Certs. 'Ba2.ar' --------------------------------------------------------------- Moody's Latin America Agente de Calificacion de Riesgo rates Fideicomiso Financiero Supervielle Creditos 81, a transaction that will be issued by TMF Trust Company (Argentina) S.A. -- acting solely in its capacity as Issuer and Trustee. The securities for this transaction have not yet been placed in the market. The transaction is pending approval from the Comision Nacional de Valores. If any assumption or factor Moody's considered when assigning the ratings change before closing, the ratings may also change. ARS 232,500,000 in Floating Rate Debt Securities of "Fideicomiso Financiero Supervielle Creditos 81", rated Aaa.ar (sf) (Argentine National Scale) and B1 (sf) (Global Scale, Local Currency) ARS 17,500,000 in Certificates of "Fideicomiso Financiero Supervielle Creditos 81", rated Ba2.ar (sf) (Argentine National Scale) and Caa2 (sf) (Global Scale, Local Currency) Ratings Rationale The rated securities are payable from the cash flow coming from the assets of the trust, which is an amortizing pool of approximately 25,388 eligible personal loans denominated in Argentine pesos, with a fixed interest rate, originated by Banco Supervielle, in an aggregate amount of ARS 250,010,061.66. These personal loans are granted to pensioners that receive their monthly pensions from ANSES (Argentina's National Governmental Agency of Social Security - Administraci¢n Nacional de la Seguridad Social). The pool is also constituted by loans granted to government employees of the Province of San Luis. Banco Supervielle is the payment agent entity and automatically deducts the monthly loan installment directly from the employee's paycheck and pensioner's payment. Overall credit enhancement is comprised of 7% of subordination for the Class A Floating Rate Debt Securities. In addition, the transaction has various reserve funds and excess spread. Factors that would lead to an upgrade or downgrade of the rating: Factors that may lead to a downgrade of the ratings include an increase in delinquency levels beyond the level Moody's assumed when rating this transaction, and a disruption in the flow of payments from ANSES or the Government of San Luis to pensioners and employees respectively. Factors that may lead to an upgrade of the ratings include the building of credit enhancement over time due to the turbo sequential payment structure, when compared with the level of projected losses in the securitized pool. Loss and Cash Flow Analysis: Moody's considered the credit enhancement provided in this transaction through the initial subordination levels for each rated class, as well as the historical performance of Supervielle's portfolio. In addition, Moody's considered factors common to consumer loans securitizations such as delinquencies, prepayments and losses; as well as specific factors related to the Argentine market, such as the probability of an increase in losses if there are changes in the macroeconomic scenario in Argentina. These factors were incorporated in a cash flow model in order to determine the expected loss for the rated securities. In assigning the rating to this transaction, Moody's assumed a lognormal distribution for defaults on the main pool with a mean of 2.5% and a coefficient of variation of 50%. Also, Moody's assumed a lognormal distribution for prepayments with a mean of 25% and a coefficient of variation of 70%. These assumptions are derived from the historical performance to date of the Supervielle's pools. Servicer default was modeled by simulating the default of the Banco Supervielle as the servicer consistent with its current rating of Caa1/Baa1.ar. In the scenarios where the servicer defaults, Moody's assumed that the defaults on the pool would increase by 20 percentage points. The model results showed 2.17% expected loss for the Floating Rate Debt Securities and 17.37% for the Certificates. Finally, Moody's also evaluated the back-up servicing arrangements in the transaction. If Banco Supervielle is removed as servicer, TMF Trust Company (Argentina) S.A. will be appointed as the back- up servicer. Stress Scenarios: Moody's ran several stress scenarios, including increases in the default rate assumptions. If default rates were increased 6% from the base case scenario for the pool (i.e., mean of 8.5% and a coefficient of variation of 50%), the ratings of the Floating Rate debt securities and of the Certificates would likely be downgraded to B2 (sf) and Ca (sf) respectively. The principal methodology used in this rating was "Moody's Approach to Rating Consumer Loan ABS Transactions" published in May 2013. Moody's National Scale Credit Ratings (NSRs) are intended as relative measures of creditworthiness among debt issues and issuers within a country, enabling market participants to better differentiate relative risks. NSRs differ from Moody's global scale credit ratings in that they are not globally comparable with the full universe of Moody's rated entities, but only with NSRs for other rated debt issues and issuers within the same country. NSRs are designated by a ".nn" country modifier signifying the relevant country, as in ".mx" for Mexico. For further information on Moody's approach to national scale credit ratings, please refer to Moody's Credit rating Methodology published in June 2014 entitled "Mapping Moody's National Scale Ratings to Global Scale Ratings". ============= B A H A M A S ============= ULTRAPETROL (BAHAMAS): Southern Cross to Acquire Sipsa Interest --------------------------------------------------------------- The major shareholders of Ultrapetrol (Bahamas) Limited ("Ultrapetrol" or the "Company) entered into a share purchase agreement with respect to the sale of shares of Ultrapetrol and of certain affiliates of the major shareholders between such shareholders. Under the agreement, Sparrow Capital Investments Ltd.,a subsidiary of Southern Cross Latin America Private Equity Funds III and IV, reached an agreement with Hazels (Bahamas) Investments Inc. and Inversiones Los Avellanos S.A., each a subsidiary of SIPSA S.A to purchase all of Hazels' and Los Avellanos' outstanding equity interests in the Company, increasing Southern Cross' interest in the Company from 67% to 85%. Under the terms of the agreement, Sparrow will acquire from Hazels, Los Avellanos, and certain entities affiliated with them, the rights to 25,326,821 shares of common stock of the Company. The price has been agreed at the equivalent of $4.00 per share of Common Stock. Upon completion of the transaction, the capital of the Company will be comprised exclusively of single voting shares. Ultrapetrol (Bahamas) Limited, headquartered in Nassau, Bahamas, is a diverse international marine transportation company. The company operates in three segments: River, Offshore Supply, and Ocean. Last twelve months ended June 30, 2013, revenues totaled $369 million. * * * As reported in the Troubled Company Reporter-Latin America on May 22, 2014, Standard & Poor's Ratings Services raised its ratings on Ultrapetrol (Bahamas) Ltd., including the corporate credit rating to 'B' from 'B-'. The outlook is stable. ============= B O L I V I A ============= BANCO DE DESARROLLO: Moody's Affirms Ba3 Issuer & Debt Ratings -------------------------------------------------------------- Moody's Latin America Agente de Calificacion de Riesgo affirmed Banco de Desarrollo Productivo S.A.M. (BDP)'s long- and short-term global local currency issuer ratings at Ba3 and Not Prime respectively. In addition, Moody's affirmed BDP's long-term global local and foreign currency debt ratings at Ba3, corresponding to a national scale rating of Aa1.bo The outlook on all ratings is stable. The following ratings of Banco de Desarrollo Productivo S.A.M. were affirmed: Global Long Term Local Currency Issuer Rating: Ba3 Global Short Term Local Currency Issuer Rating: Not Prime National Scale Long Term Local Currency Issuer Rating: Aa1.bo National Scale Short Term Local Currency Issuer Rating: BO-1 Global long term local and foreign currency debt MTN ratings: (P)Ba3 National Scale long term local and foreign currency debt MTN ratings: Aa1.bo Global long term local currency debt rating: Ba3 National Scale long term local currency debt rating: Aa1.bo Ratings Rationale In affirming BDP's ratings, Moody's noted the alignment of the bank's policies with those of its main shareholder, the Plurinational State of Bolivia, to support the development of microfinance institutions, as well as of small- and medium-size enterprises. The bank's policy role leads to Moody's assessment of very high dependence on and strong support from the government, with resulting two-notch uplift to the bank's baseline credit assessment (BCA) of b2. Although there is no explicit government guarantee in place to support BDP's obligations, the government's 80% ownership control leads to BDP's issuer ratings being at the same level as Bolivia's government bond ratings, or Ba3. BDP's standalone rating incorporates its good asset quality that derives from predominant on-lending operations to other banks in the system, although this strategy leads to large loan exposures. BDP's robust capitalization, however, supports further growth and could withstand loan losses in case of stress. Relative to the banking system, BDP's profitability is modest, a direct consequence of the entity's social mission. Moody's observes that BDP has made efforts to diversify its funding mix away from multilateral institutions, by issuing bonds in the domestic market. In part, this move helps reduce the significant currency mismatch BDP faces as it borrows foreign currency loans from multilateral institutions, while it lends in local currency. Multilateral loans are extended through the Ministry of Finance, and currently account for about half of the bank's total funding. Moody's expect BDP to continue to access market funds also as a consequence of regulatory changes introduced by the financial services law, which now allows BDP to take deposits from the public. A potential expansion of BDP's footprint and franchise, however, while benefiting its funding mix, is not without risks to its asset quality, controls and earnings, in a very competitive banking environment. Banco de Desarrollo Productivo S.A.M., headquartered in La Paz, Bolivia, had $309 million in assets, $106 million in deposits, and $66 million in shareholders' equity as of March 2014. The principal methodology used in this rating was Global Banks published in May 2013. Moody's National Scale Credit Ratings (NSRs) are intended as relative measures of creditworthiness among debt issues and issuers within a country, enabling market participants to better differentiate relative risks. NSRs differ from Moody's global scale credit ratings in that they are not globally comparable with the full universe of Moody's rated entities, but only with NSRs for other rated debt issues and issuers within the same country. NSRs are designated by a ".nn" country modifier signifying the relevant country, as in ".mx" for Mexico. For further information on Moody's approach to national scale credit ratings, please refer to Moody's Credit rating Methodology published in June 2014 entitled "Mapping Moody's National Scale Ratings to Global Scale Ratings". BANCO GANADERO: Moody's Rates Bs.35MM Sub. Debt 3rd Issuance 'B2' ----------------------------------------------------------------- Moody's Latin America Agente de Calificacion de Riesgo has assigned Banco Ganadero S.A. (Ganadero)'s Bs. 35 million subordinated debt third issuance, a global local currency subordinated debt rating of B2 and a national scale subordinated debt rating of Aa3.bo. The outlook on all ratings is stable. The following ratings were assigned to Banco Ganadero: Third issuance up to Bs. 35 million Global Local Currency Subordinated Debt Rating: B2, stable outlook Bolivia National Scale Local Currency Subordinated Debt Rating: Aa3.bo Ratings Rationale Moody's explained that the B2 local currency subordinated debt rating derives from Ganadero's b1 baseline credit assessment that maps from its bank financial strength rating of E+ and takes into account the seniority of the notes. Ganadero's ratings reflect its well-established corporate and commercial-oriented franchise based in Santa Cruz de la Sierra, and growing housing finance operation, a business mix that provides income diversification, good asset quality and access to core deposit funding. The ratings however, are constrained by Ganadero's geographical and loan concentrations, which expose its asset quality and earnings to potential swings in the regional economy, by the lower than banking system core capitalization ratio and the complex regulatory environment that will affect profitability for Bolivian banks. Ganadero's focus in the corporate and SME segments yields relevant non-interest income from foreign exchange trading and money transfers. This operation represents an important earnings driver enhancing the bank's profitability, which has been consistently higher than the banking system's average since 2009. As to funding, institutional and corporate funding obtained through term deposits and demand accounts have supported Ganadero's business development. With a total capitalization ratio of 12.04%, and Tier 1 ratio at 8.78% as of March 2014, Ganadero's capital stands lower that the banking system's average. However, Moody's considers that current level of capitalization provides adequate loss absorption capacity in stressed scenarios. Banco Ganadero S.A. is located in Santa Cruz de la Sierra, Bolivia, and had $988 million in assets, $785 million in deposits and $54.7 million in equity as of March 2014. The principal methodology used in this rating was Global Banks published in May 2013. =========== B R A Z I L =========== BROOKFIELD INCORPORACOES: Moody's Confirms B1 Global Scale CFR -------------------------------------------------------------- Moody's America Latina has confirmed the ratings assigned to Brookfield Incorporacoes S.A. (Brookfield) and its unsecured debentures at B1 on the global scale and Baa2.br on the Brazilian national scale. The outlook for all the ratings is negative. Ratings confirmed: - Corporate Family Rating: B1 (global scale) and Baa2.br (national scale) - BRL300 million senior unsecured debentures due in 2015 and 2016 (4th issue): B1 and Baa2.br - BRL300 million senior unsecured debentures due in 2015 and 2016 (3rd issue): B1 and Baa2.br This rating action concludes the review for possible downgrade that commenced on April 16, 2014. Ratings Rationale The confirmation of the B1/Baa2.br ratings reflects the recent developments in Brookfield's liquidity following the execution of an agreement of advance for future capital increase between the company and its controlling shareholder in the amount of BRL500 million, for which the cash proceeds have been entirely transferred to the company last June. Although the financial support from the controlling shareholder is credit positive, the ratings outlook is negative given the company's ongoing challenges to improve profitability and deleverage its balance sheet on a timely basis, amid evolving industry fundamentals and potential changes in its governance structure. The B1/Baa2.br ratings reflect Brookfield's position among the largest homebuilders in Brazil, with strong brand name, long track record in real estate development and good diversity in terms of product offering ranging from economic to high income apartments and office buildings. The ratings also consider the indirect benefit of having Brookfield Asset Management Inc. (BAM; Baa2/ stable) as the largest individual shareholder. On the other hand, Brookfield's high leverage and ongoing execution risks constrain the ratings, as does the sizeable land bank, which is not entirely suitable for its current business strategy. Brookfield reported negative gross margin of 1.7% for the twelve months that ended on 31 March 2014 (vs. 8.4% in fiscal year-end 2012), while the leverage measured by total adjusted debt to book capitalization ratio deteriorated to 65% (vs. 62% in fiscal year- end 2012). The company's weak operating performance was mainly due to the impact of cost overruns, land bank impairments, provisions for future losses due to construction delays and softer than expected sales performance. Those adjustments led to higher than expected leverage and interest rates, which prevented an anticipated improvement in the company's credit metrics. On the other hand, the company's Free Cash Flow (FCF) generation has been improving. Moody's calculates BRL325 million of negative FCF, during the last twelve months ended March 31 2014 (vs. BRL861 billion negative FCF in fiscal year-end 2012). The cash burn reduction reflects the successful transfer of BRL2.1 billion in contracts to financial institutions (up 147% year-over-year), as well as lower working capital pressures from the reduced launches of BRL1.0 billion (down 65% year-over-year). Moody's revised projections incorporate expectations that FCF will continue to improve but remain negative in 2014 and become positive only in 2015. The expected improvement in FCF generation is supported by the high number of project deliveries and relatively lower contract terminations over the next twelve months. The limited internal cash flow generation is tempered by an adequate availability of project loans under the Sistema Financeiro de Habitacao (SFH). According to the management there are BRL2.4 billion undrawn committed facilities under the SFH that puts the company in a comfortable position to meet more than 70% of its ongoing project commitments. The BRL500 million received from the shareholders last June enhanced Brookfield's cash position of BRL564 million as reported on 30 March 2014. As a result, the company's liquidity position is manageable in 2014, but refinancing pressures remain high given that the company still needs to address about BRL1.3 billion in corporate debt maturing until mid 2015. A ratings upgrade is unlikely in the near term, but Moody's will consider an outlook stabilization should Brookfield successfully execute its deleveraging and asset monetization strategy over the next few quarters. An outlook stabilization would also require more visibility over the company's capital structure and long term business strategy post completion of its planned tender offer for outstanding public shares. On the other hand, Brookfield's ratings could be downgraded if the company proves unable to improve its liquidity position during the second half of this year to address its corporate debt maturing in 2015, or fails to indicate a clear deleveraging trend. A material increase in the relative amount of secured or project level debt in Brookfield's consolidated capital structure could also trigger a downgrade of the ratings assigned to the senior unsecured debentures. The principal methodology used in this rating was the Global Homebuilding Industry published in March 2009. Moody's National Scale Ratings (NSRs) are intended as relative measures of creditworthiness among debt issues and issuers within a country, enabling market participants to better differentiate relative risks. NSRs differ from Moody's global scale ratings in that they are not globally comparable with the full universe of Moody's rated entities, but only with NSRs for other rated debt issues and issuers within the same country. NSRs are designated by a ".nn" country modifier signifying the relevant country, as in ".mx" for Mexico. For further information on Moody's approach to national scale ratings, please refer to Moody's Rating Methodology published in June 2014 entitled "Mapping Moody's National Scale Ratings to Global Scale Ratings". Headquartered in Rio de Janeiro, Brookfield Incorporacoes S.A. (Brookfield) is the result from the combination of Brascan, Company and MB Engenharia, all strong brand names with over 25 year experience in the Brazilian homebuilding market. Brookfield develops, builds, and sells residential projects in virtually all price segments, as well as, office buildings. The largest shareholder is Brookfield Asset Management (Baa2/Stable) with an indirect stake of 44.17% of the shares. The company currently has 91 projects under development to be delivered between 2014 and 2016, mainly in the states of Sao Paulo, Rio de Janeiro, Paran and the mid-west region of Brazil, including the Federal District. In the twelve months that ended 31 March 2014, Brookfield reported net revenues of BRL2.8 billion (USD1.2 billion) and net losses of BRL713 million (USD316 million). GOL LINHAS: Discloses Codeshare Agreement With Etihad ----------------------------------------------------- GOL Linhas Aereas Inteligentes S.A. has signed a codeshare agreement with Etihad Airways, an airline headquartered in Abu Dhabi, in the United Arab Emirates. The agreement depends on approval from ANAC (National Civil Aviation Agency) and CADE (Brazil's antitrust authority). The companies already have an interline agreement and the expansion of the partnership through the codeshare agreement will initially allow Etihad Airways to include its code on flights operated by GOL, giving its customers a greater number of connections for destinations in Brazil and South America. "GOL has been investing in partnerships that are ensuring greater benefits for our customers and strengthening the alliance with Etihad will do precisely that," said Paulo Kakinoff, GOL's CEO. Both companies will soon sign a Frequent Flyer Program (FFP) agreement offering all their customers the benefits of their respective mileage programs - GOL's Smiles and Etihad's Etihad Guest. GOL Linhas Aereas Inteligentes S.A. is a low-cost and low-fare airline in Latin America, offers around 970 daily flights to 65 destinations in 10 countries in South America, Caribbean and the United States under the GOL and VARIG brands, using a young, modern fleet of Boeing. * * * As reported in the Troubled Company Reporter-Latin America on March 21, 2014, Fitch Ratings has affirmed the ratings of Gol Linhas Aereas Inteligentes S.A.'s Foreign and local currency long- term Issuer Default Ratings (IDRs) at 'B-'. OI S.A.: Fitch Lowers IDR to 'BB+' & Removes from CreditWatch Neg. ------------------------------------------------------------------ Fitch Ratings has downgraded Oi S.A.'s (Oi) long-term foreign and local currency Issuer Default Ratings (IDR) and Portugal Telecom SGPS's (PT) long-term IDR to 'BB+' from 'BBB-'. Fitch has also downgraded Oi's national long-term rating and national long-term debentures to 'AA(bra)' from 'AA+(bra)'. The Rating Outlook on the IDRs and national long-term ratings is Stable. Fitch has also downgraded Oi's senior unsecured and secured debt, and the senior unsecured notes issued by Portugal Telecom International Finance BV to 'BB+' from 'BBB-'. The Rating Watch Negative on all ratings has been removed. KEY RATING DRIVERS High Risk Investment Strategy: The downgrade follows Oi's announcement on July 16, 2014, that PT's EUR847 million commercial paper (CP) investment issued by Rio Forte Investments S.A., was not paid on the due date of July 15, 2014 and the recovery value is highly uncertain. Based on the assumption that Oi does not recover any cash from the defaulted Rio Forte CP, net leverage for the merged entity will increase a modest 0.2x-0.3x. While the increase in net leverage is not alone sufficient to warrant a ratings downgrade, PT's decision to invest a significant amount of cash, close to 40% of its total cash and equivalents at end-2013, into the debt security of a 10% shareholder raises several concerns, and may indicate a higher risk tolerance for its investments, and a more aggressive management strategy that are not in line with an investment grade category risk profile. Despite this event, Fitch believes that the proposed merger between Oi and PT will proceed given Oi and PT signed a new agreement to slightly adjust the economics of the merger agreement by which PT will transfer Oi's shares to Oi in the amount equivalent to the face value of the CP. In return, Oi will transfer the CP to PT, with an option for PT to purchase back the shares. Further, the merger process is substantially complete with Oi already completing its capital increase, PT's operating assets have been transferred to Oi, Oi has guaranteed for PT's debt, and approvals by the shareholders and the regulatory bodies for the merger have been received. Weak Financial Profile: The downgrade primarily reflects the financial profile of the post-merger entity between Oi and PT that is not able to initially support an investment grade rating given the operational challenges faced in both Brazil and Portugal. Further, any material or immediate improvement in the financial profiles of the pro forma merged entity may prove challenging despite the management's intention to delever. Due to the forecast negative free cash flow (FCF), net leverage of the merged entity is likely to hover around 4.0x in the short to medium term and that the merger synergy may not be strong enough to curb weakening operating trends. Domestic Pressure Ongoing: For Oi, profitability erosion was evident in 2013 due to the competitive pressure in the Brazil telecom market with its recurring EBITDA margin falling to 28.5% from 31.5% in 2012. In addition, any meaningful deleveraging in the short term is unlikely based on Fitch's expectation of negative FCF generation in 2014 due to high capex, other investment cash outflows including judicial deposits, and falling margins. The company has taken on a series of asset disposals to raise cash since late 2012 but the impact on its net debt has been small. While PT's domestic businesses performed in line with Fitch's 2013 expectations, financial pressures remain - Portuguese EBITDA was down by 9.1%. The company's residential fixed-line operations perform more strongly than most European incumbent businesses, benefiting from an early investment in fibre, and TV and bundled services that have proven attractive and popular with consumers. Its mobile and enterprise divisions nonetheless remain under pressure and further negative trends are expected. Merger Synergies: Given the different operational geographies, operational integration that could lead to an immediate improvement of the competitive positions of Oi and PT in their respective markets will prove challenging. Positively, the merged entity's credit profile should benefit from increased scale with an over-100 million subscriber base and geographic diversification of cash flows, as well as some merger synergies in terms of cost savings and sharing of best practices over the medium to long term. In addition, the rights issue in May 2014, of which over BRL3 billion could be used for deleveraging, will support its high capex plans in 2014 and 2015. The merger will also substantially improve the new company's corporate governance structure by eliminating Oi's current complex shareholding structure and restructuring it with one class of shares of one listed entity, Telemar (Corpco), with same voting rights and dividends. The company has disclosed that it expects to achieve BRL5.5 billion of synergy on a net-present-value basis, of which the majority should come from the improved efficiency of its operations. In addition, the company expects to gain some fiscal benefits, mainly tax credits, from the merger, although these benefits could prove to be one-off items and eventually be exhausted. RATING SENSITIVITIES Fitch expects the merged entity to be able to generate positive FCF and improve leverage during 2016 and onward. A further downgrade of the ratings could occur if the net leverage ratio remains above 4.0x over the medium to long term and in the absence of any meaningful improvement in key operating metrics. While any positive rating action is unlikely at this time, Fitch would consider a positive rating action should the company's net leverage improve to below 3.5x along with improvements in key operating metrics on a sustained basis. ========================== C A Y M A N I S L A N D S ========================== BLACKLEAF HOLDINGS: Shareholders' Final Meeting Set for July 31 --------------------------------------------------------------- The shareholders of Blackleaf Holdings Limited will hold their final meeting on July 31, 2014, to receive the liquidator's report on the company's wind-up proceedings and property disposal. The company's liquidator is: Citron 2004 Limited Telephone: + 44 1534 282276 Facsimile: + 44 1534 282400 c/o Clifton House, 75 Fort Street P.O. Box 1350 Grand Cayman KY1-1108 Cayman Islands BOUTON LTD: Shareholder to Receive Wind-Up Report on July 23 ------------------------------------------------------------ The shareholder of Bouton Ltd. will receive on July 23, 2014, at 11:10 a.m., the liquidator's report on the company's wind-up proceedings and property disposal. The company's liquidator is: Ogier c/o Justin Savage Telephone: (345) 815 1816 Facsimile: (345) 949-9877 CARILLON GREENFIELD: Shareholders' Final Meeting Set for Aug. 14 ---------------------------------------------------------------- The shareholders of Carillon Greenfield SPC will hold their final meeting on Aug. 14, 2014, at 4:00 p.m., to receive the liquidator's report on the company's wind-up proceedings and property disposal. 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 FALCON GROUP: S&P Puts 'B+' LT Counterparty Credit Rating --------------------------------------------------------- Standard & Poor's Ratings Services said that it assigned its 'B+' long-term and 'B' short-term counterparty credit ratings to Falcon Group Holdings (Cayman) Ltd. (Falcon), a nonbank trade finance provider incorporated in the Cayman Islands. The outlook is stable. "Our ratings on Falcon reflect our view of its focused business profile as a niche player in the large trade finance market. We acknowledge, however, that it has established good relationships with clients and with the financial institutions and other counterparties that hedge and fund its transactions. The ratings also incorporate our view that its leverage and debt-servicing capacity, by our metrics, will likely be consistent with the current rating level, based on the proposed financing strategy. The ratings are supported by our view that Falcon will likely continue to deliver relatively predictable recurring earnings with low credit losses. We see no close peers to Falcon among our current rated universe. We principally compare it with other rated finance companies, particularly in the U.K. and U.S.," S&P said Falcon is a nonoperational intermediate holding company. S&P's ratings on Falcon reflect the 'b+' group credit profile (GCP), which is its view of the creditworthiness of the consolidated group. S&P do not believe there are any material barriers to cash flows from the operating subsidiaries to Falcon. S&P therefore do not notch down the ratings on Falcon from its view of the GCP. Founded in 1994, Falcon currently conducts business primarily in the Middle East and Asia. Although its business model does not require it to be regulated, it voluntarily maintains a regulated subsidiary in Dubai that arranges and may advise on certain transactions. Falcon specializes in financing corporate clients through short-term transactions that are generally too bespoke or too small to be a focus for many banks. It expanded relatively quickly during the global financial crisis as bank competitors faced capital and funding constraints. The ongoing strengthening of bank regulation may offer Falcon continued growth opportunities. Nevertheless, with $2.4 billion of transactions originated during the financial year ending Jan. 31, 2014, S&P views it as a niche player in the global trade finance market. Falcon has strengthened its corporate governance and internal control functions in recent years, and S&P considers that further enhancements would be warranted as it expands further. S&P views "key man" risk as a rating factor since the founder of the company is the sole shareholder and executive chairman, but it considers that it is partly mitigated by the experienced personnel in other senior positions. S&P believes that Falcon has a disciplined underwriting process, and it additionally hedges the vast majority of the credit risk on its transactions with investment-grade banks and other hedging counterparties. As a result, on the $12 billion of transactions it has originated in its 20-year history, Falcon reports that it has incurred about $55 million of defaults but just $1 million of net losses (after recoveries). This strong asset quality record is a supporting factor in our view of Falcon's debt-servicing capacity. Currently, Falcon mostly funds its transactions through a panel of financial institutions shortly after origination. However, S&P understands from the company that it is contemplating a benchmark term debt issue to fund a diversified on-balance-sheet asset portfolio that may subsequently be refinanced through other means, such as a securitization program. This adjustment in the funding strategy would cause Falcon's balance sheet to expand from historical levels. Falcon currently has no outstanding nontransactional debt and its earnings and balance sheet metrics are consequently strong. S&P has reflected the potential change in financing strategy in its financial projections, and the ratings partly anticipate the leverage and interest coverage levels that might arise. For example, a $250 million term debt issue would be 2.1x Falcon's reported tangible equity as of Jan. 31, 2014, which S&P views as an adequate leverage multiple at this rating level. If the issue had an interest rate of 8%, for example, Falcon's EBITDA in the financial year ending Jan. 31, 2014 would cover the annual cash interest expense by 2.7x, which would compare satisfactorily with most rated finance companies. The stable outlook reflects S&P's expectation that Falcon will maintain a solid earnings performance and a controlled expansion strategy, and that it will likely operate with leverage and interest coverage metrics that are consistent with the current rating level. It also assumes that the company will continue to enhance its corporate governance and internal control functions as it grows. S&P could lower the ratings if it sees evidence of a marked deterioration in credit losses, risk appetite, or competitive position. S&P could also lower the ratings if the ratio of debt to tangible equity should rise above 2.5x as a result of the potential change in financing strategy. S&P could raise the ratings if Falcon executes its growth plan successfully, maintains strong asset quality, and strengthens its business risk profile, including its corporate governance. A positive rating action could also arise if Falcon does not proceed with the contemplated term debt transaction, or if the issue is significantly smaller than S&P has assumed. FMIM DYNAMIC: Creditors' Proofs of Debt Due Aug. 14 --------------------------------------------------- The creditors of FMIM Dynamic Macro Fund Ltd. are required to file their proofs of debt by Aug. 14, 2014, to be included in the company's dividend distribution. The company commenced liquidation proceedings on June 17, 2014. The company's liquidator is: KRyS Global Governors Square, Building 6, 2nd Floor 23 Lime Tree Bay Avenue P.O. Box 31237 Grand Cayman KY1-1205 c/o Christopher Smith Telephone: (345) 947 4700 FMIM DYNAMIC MASTER: Creditors' Proofs of Debt Due Aug. 14 ---------------------------------------------------------- The creditors of FMIM Dynamic Macro Master Fund Ltd. are required to file their proofs of debt by Aug. 14, 2014, to be included in the company's dividend distribution. The company commenced liquidation proceedings on June 17, 2014. The company's liquidator is: KRyS Global Governors Square, Building 6, 2nd Floor 23 Lime Tree Bay Avenue P.O. Box 31237 Grand Cayman KY1-1205 c/o Christopher Smith Telephone: (345) 947 4700 GPI LDC: Shareholder to Receive Wind-Up Report on July 29 --------------------------------------------------------- The shareholder of GPI LDC will receive on July 29, 2014, at 9:00 a.m., the liquidator's report on the company's wind-up proceedings and property disposal. 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 M2M HELLAS: Shareholders' Final Meeting Set for July 28 ------------------------------------------------------- The shareholders of M2M Hellas Limited will hold their final meeting on July 28, 2014, at 10:00 a.m., to receive the liquidator's report on the company's wind-up proceedings and property disposal. The company's liquidator is: Russell Homer c/o Tanya Armstrong Telephone: (345) 946-0820 Facsimile: (345) 946-0864 P.O. Box 2499, George Town, KY1-1104 Grand Cayman Cayman Islands MARATHON LEGACY: Creditors' Proofs of Debt Due Aug. 5 ----------------------------------------------------- The creditors of Marathon Legacy Securities Public-Private Investment Fund Ltd. are required to file their proofs of debt by Aug. 5, 2014, to be included in the company's dividend distribution. The company commenced wind-up proceedings on June 10, 2014. The company's liquidator is: Ogier c/o Joanne Huckle Telephone: 345 949 9876 Facsimile: (345) 949-9877 89 Nexus Way, Camana Bay Grand Cayman KY1-9007 Cayman Islands MEZZANINE CAPITAL: Members' Final Meeting Set for Aug. 4 -------------------------------------------------------- The members of Mezzanine Capital Corporation Limited will hold their final meeting on Aug. 4, 2014, at 10:30 a.m., to receive the liquidator's report on the company's wind-up proceedings and property disposal. The company's liquidator is: David A.K. Walker c/o Paul Anderton/ Jodi Jones Telephone: (345) 914 8694 Facsimile: (345) 945 4237 P.O. Box 258 Grand Cayman KY1-1104 Cayman Islands SAPIC III: Creditors' Proofs of Debt Due Aug. 11 ------------------------------------------------ The creditors of SAPIC III JPY Open Reference Fund Limited are required to file their proofs of debt by Aug. 11, 2014, to be included in the company's dividend distribution. The company commenced liquidation proceedings on June 20, 2014. The company's liquidator is: CDL Company Ltd. P.O. Box 31106 Grand Cayman KY1-1205 Cayman Islands =================================== D O M I N I C A N R E P U B L I C =================================== XSTRATA PLC: Glencore Could Take Country to Court, Economist Warns ------------------------------------------------------------------ The Dominican Today reports that Economist Bernardo Vega warned that Glencore Falcondo's weak defense to attacks from the Congress and society over Loma Miranda reveals its future intent to sue Dominican Republic in international arbitration cours. "They could make more with a lawsuit abroad that what they can produce here with mining," said the also former Dominican envoy to Washington, according to The Dominican Today. The report notes that Mr. Vega cautioned the government against pushing Falcondo's planned mine in haste, "because in the same way we lost in court to the contractors of two major highways, the case of Falcondo appears to be headed on the same path." Divided Church Mr. Vega noted however, that the country's Catholic Church is divided on topics of the environment. "It's odd that while a bishop in the south region leads the demand to build a road across the Central Mountains, the one in La Vega heads the war against Falcondo," the report quoted Mr. Vega as saying. 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 ============= J A M A I C A ============= CIBONEY GROUP: Racks Up Higher Losses ------------------------------------- RJR News reports that Ciboney Group racked up higher losses during its financial year ended May 31. The struggling hotel operator suffered an $8.7 million loss, up from a $3.2 million loss a year ago, according to RJR News. During the twelve months, Ciboney earned income of $584,000, versus $1.1 million in 2013, the report relates. * JAMAICA: World Bank Provides Funds to Enhance Public Services --------------------------------------------------------------- Caribbean360.com reports that the World Bank said Jamaicans will benefit from improved service delivery and enhanced business climate as a result of a US$37 million project for public sector transformation. The Washington-based financial institution said that the project will improve customs administration and standardization, and modernize the public sector by strengthening government capacity and effectiveness in service delivery, according to Caribbean360.com. "Together with the Jamaican government and development partners, we are working to help drive necessary reforms that will increase efficiency and maximize the use of available resources to create a more vibrant business environment and boost the economy," the report quoted Sophie Sirtaine, World Bank Country Director for the Caribbean, as saying. The report notes that Ms. Sirtaine said the Strategic Public Sector Transformation project will specifically strengthen the Public Investment Management System and improve monitoring through citizens' participation. It will also implement results-based budgeting to make more efficient and strategic allocation of resources for public investments, roll out new standard operating procedures for customs to reduce the time and lower transaction costs for trading internationally, the report relates. Additionally, the report discloses, Ms. Sirtaine said the project will strengthen the Bureau of Standards to provide improved services to the trading community. "Without public sector reform, we cannot effectively create the vibrant business environment needed to expand our economy and provide real opportunities for jobs and investment to secure our future," said Jamaica's Minister of Finance, Dr. Peter Phillips, the report relays. As Jamaica recovers from the effects of the 2008 global crisis, the World Bank said the government has also reaffirmed its commitment to tackle some of the key public sector challenges, the report notes. The bank said the project builds on ongoing efforts in public financial management and customs administration supported by other grants from Canada and the United Kingdom Department for International Development (DFID), the report adds. =========== M E X I C O =========== GRUPO POSADAS: Moody's Changes B2 CFR Outlook to Negative --------------------------------------------------------- Moody's Investors Service changed to negative from stable the outlook on Grupo Posadas, S.A.B. de C.V.'s (Posadas) B2 corporate family rating and senior unsecured debt ratings. Outlook Actions: Issuer: Grupo Posadas, S.A.B. de C.V. Outlook, Changed To Negative From Stable Affirmations: Issuer: Grupo Posadas, S.A.B. de C.V. Corporate Family Rating, Affirmed B2 Senior Unsecured Regular Bond/Debenture Jan 15, 2015, Affirmed B2 Senior Unsecured Regular Bond/Debenture Nov 30, 2017, Affirmed B2 Senior Unsecured Regular Bond/Debenture (add-on) Nov 30, 2017, Affirmed B2 Ratings Rationale The change in outlook was prompted by Posadas' weaker than expected credit metrics year-to-date, mainly due to the lower than anticipated EBITDA resulting from the sale of 14 hotels to the REIT Fibrahotel in the first half of 2013. Also affecting the company's operation is the increase in taxes in the context of the Mexican fiscal reform. Particularly affecting the lodging industry are the higher income taxes and boarder region VAT that starting 2014, have reduced consumers' purchasing power. To a lesser extent, Posadas' operations have also been impacted by the weaker than anticipated economic environment in both Mexico and the U.S. as well as by accounting changes in Mexico, mainly related with fiscal consolidation and REITs. As a result of the aforementioned events, adjusted Debt / EBITDA ratio remained above 5.5x and as of March 30, 2014 it has peaked at 6.1x. Posadas' B2 rating reflects its high leverage, small operating scale relative to global industry peers, and low geographic diversification as it operates almost entirely in Mexico. The rating also considers our view that future growth could be affected by a subdued global economic environment and financial constraints to its investment program. The company's leading position, brand equity and nationwide coverage in Mexico balance the rating. Also supporting Posadas' B2 rating is its segment diversification across different hotel classes, varying business models and service business growth. The hotels sale to Fibrahotel is part of the company's recent measures to reduce leverage. This strategy started in 2012, when the company sold its South American operation to Accor. Posadas debt reduction strategy also included changes in their asset management - the hotels sold to Fibrahotel will continue to be operated by Posadas - and the sale and lease of its headquarters. The measures have resulted in a more than 30% debt reduction when compared with 2011 reported debt. Liquidity has also improved with a more manageable maturity profile, stronger capital structure and a MXN 1,390 million cash position as of the 1Q14. Nevertheless, we note that a large part of the proceeds from the divestitures will not be used for debt reduction but to partly fund its capital expenditure program. As a consequence, we expect credit metrics to remain weaker than anticipated for the next 12 -- 18 months, with leverage above 5.0x until at least the end of 2015. Posadas' investment plan includes around MXN 528 million related with the refurbishment of owned or leased hotels and MXN 428 million to turn owned properties into the all inclusive format under its Vacation Club (FAVC) segment. We view such initiatives as positive in the long run in the sense they will support the maintenance of the company's competitive position and represent more diversification into the fast growing (in terms of revenue per available room - RevPar) Vacation Club business. In our view, the aforementioned investments could pressure Posadas' liquidity; overall, we expect 2014 capex to range between MXN 600 million and MXN 1,200 million. Currently, the company's liquidity is adequate and, as of March 31, 2014, the total debt at around MXN 4.6 billion (USD 362 million) was solely comprised of senior unsecured notes maturing in 2015 and 2017. The next debt amortization is scheduled to January 2015, amounting to MXN 670 million (USD 51 million). Posadas internal sources of liquidity are comprised of its cash position of MXN 1,392 million as of the end of the 1Q14 and cash from operations of MXN 462 million for the last twelve months ended in March of 2014. Moreover, alternative sources of liquidity would include around USD 60 million fully available under factoring facilities to discount receivables related to the vacation club (FAVC) and the around USD 30 million payment still pending to be received from the sale of the South American division and the company's headquarters. The company is also refinancing committed bank lines amounting MXN 550 million (USD 40 million). The outlook could stabilize as a result of the ramp up of Posadas current projects and a consequent improvement in credit profile, particularly with a visible trend of deleveraging towards adjusted Debt / EBITDA metrics around 5.0x. In order for the outlook to stabilize, liquidity should also remain adequate with internal and external resources being enough to cover upcoming debt maturities. Ratings could be downgraded if Posadas' liquidity deteriorates or if Moody's adjusted debt/EBITDA remains above 5.0 times with no clear de-lever trend over the next few quarters. Although not envisioned in the medium term, positive ratings pressure would result from Posadas maintaining adequate liquidity and improving adjusted Debt/EBITDA below 4.5 times and EBIT/Interest above 2.0 times, both on a sustainable basis. The principal methodology used in this rating was " Global Lodging & Cruise Industry Rating Methodology" published in December 2010. Grupo Posadas, S.A.B. de C.V. (Posadas), headquartered in Mexico City, is a leading hotel operator in Mexico. Posadas owns, leases and manages 115 hotels with 19,623 rooms in well located urban and costal destinations throughout Mexico and a single hotel in Texas. It operates key 5- and 4- star Fiesta Americana and Fiesta Inn business-class formats, a 3-star format (One Hotels), the luxury class Live Aqua, and the Fiesta Americana Vacation Club timeshare business. For the last twelve months ended March 31, 2014, Posadas reported revenues of MXN5,633 million excluding asset sales. GUASAVE: Moody's Affirms Ba3 Global Scale Local Currency Rating --------------------------------------------------------------- Moody's de Mexico affirmed the Ba3 (global scale, local currency) and Baa1.mx (Mexico national scale) ratings of the municipality of Guasave. At the same time, Moody's revised Guasave's outlook to stable from negative. Ratings Rationale The municipality of Guasave managed to redress its finances in 2013 and posted positive operating results equivalent to 2% of operating revenues. The municipality's consolidated results also improved in 2013 with Guasave posting its first cash financing surplus in the last 4 years. The stable outlook reflects the municipality's capacity to revert the deterioration seen in 2012 and Moody's view that Guasave is somehow better positioned to maintain a stable trend within its rating category in the near to medium term. In 2013, Guasave improved its liquidity position to -1.3% of total expenditures from -9.6% in 2013. The municipality's liquidity position remains tight but above the median Ba3 rated peers. Debt levels as a percentage of operating revenues are expected to remain stable at around 42% of operating revenues. Debt service costs are estimated to reach a maximum of 4% of total revenues in 2014, a low level. The municipal water company (JUMAPAG) exerted significant expenditure pressures on the municipality in 2012, however Moody's do not expect at this stage that JUMAPAG will require similar support in the near future. What Could Move The Ratings Up/Down Further improvements in the collection of own source revenues and containing a still rigid cost structure could exert upward pressure on the ratings. A return to operating and financial deficits that result in higher borrowing needs and weaken Guasave's liquidity position, could exert downward pressure on the ratings. The principal methodology used in this rating was Regional and Local Governments published in January 2013. The period of time covered in the financial information used to determine municipality of Guasave rating is between 1 of January 2009 and 31 December 2013. Moody's National Scale Ratings (NSRs) are intended as relative measures of creditworthiness among debt issues and issuers within a country, enabling market participants to better differentiate relative risks. NSRs differ from Moody's global scale ratings in that they are not globally comparable with the full universe of Moody's rated entities, but only with NSRs for other rated debt issues and issuers within the same country. NSRs are designated by a ".nn" country modifier signifying the relevant country, as in ".mx" for Mexico. For further information on Moody's approach to national scale ratings, please refer to Moody's Rating Methodology published in October 2012 entitled "Mapping Moody's National Scale Ratings to Global Scale Ratings". SARE HOLDING: Moody's Cuts Issuer & Senior Debt Ratings to C/C.mx ----------------------------------------------------------------- Moody's de Mexico downgraded Sare Holding, S.A.B. de C.V.'s long term issuer rating and its senior unsecured debt ratings to C / C.mx from Caa1 / Caa1.mx. The following ratings were downgraded: Downgrades: Issuer: Sare Holding, S.A.B. de C.V. Issuer Rating, Downgraded to C from Caa1 Issuer Rating, Downgraded to C.mx from Caa1.mx; Senior Unsecured Regular Bond/Debenture Dec 30, 2016 (SARE 08), Downgraded to C from Caa1; Senior Unsecured Regular Bond/Debenture Dec 30, 2016 (SARE 08-2), Downgraded to C from Caa1; Senior Unsecured Regular Bond/Debenture Dec 30, 2016 (SARE 08), Downgraded to C.mx from Caa1.mx; Senior Unsecured Regular Bond/Debenture Dec 30, 2016 (SARE 08-2), Downgraded to C.mx from Caa1.mx; Outlook Actions: Issuer: Sare Holding, S.A.B. de C.V. Outlook, Changed To No Outlook From Negative Ratings Rationale The ratings downgrade was prompted by the conclusion of Sare's debt exchange offer for its MXN 315 million 2008 notes, which represented a 70% loss to the company's bondholders. The offer involved its outstanding local notes, SARE 08 and SARE 08-2, and was completed with approximately 77% of the total outstanding amount being exchanged. Moody's viewed the transaction as a distressed exchange, as it resulted in a diminished financial obligation relative to the original obligation and should allow Sare to avoid a payment default in the future. The loss incurred by the bondholders is in line with the C rating assigned. Prior to rating action, Sare's ratings outlook was negative, driven by its limited liquidity and cash generation, as well as by the uncertainties related to the company's operating performance and its development capabilities. Subsequent to rating actions, Moody's will withdraw all the ratings of Sare because of the recent distressed exchange of the rated notes and Sare's overall debt restructuring process. Sare Holding, S.A.B de C.V, based in Mexico City, Mexico, is a fully integrated, diversified homebuilder engaged in the development, construction, marketing, consulting, and sales of affordable, middle- and upper-income housing developments in Mexico. Sare was founded in 1967 and first developed single-family homes and office buildings in 1977. As of March 31, 2014, Moody's estimates Sare's sales excluding assets sold at around MXN 96 million. The principal methodology used in this rating was Global Homebuilding Industry rating methodology published in March, 2009. The period of time covered in the financial information used to determine Sare Holding, S.AB. de C.V.'s rating is between December 31, 2009 and March 31, 2014. (source: Mexican Stock Exchange). Moody's National Scale Credit Ratings (NSRs) are intended as relative measures of creditworthiness among debt issues and issuers within a country, enabling market participants to better differentiate relative risks. NSRs differ from Moody's global scale credit ratings in that they are not globally comparable with the full universe of Moody's rated entities, but only with NSRs for other rated debt issues and issuers within the same country. NSRs are designated by a ".nn" country modifier signifying the relevant country, as in ".mx" for Mexico. For further information on Moody's approach to national scale credit ratings, please refer to Moody's Credit rating Methodology published in October 2012 entitled "Mapping Moody's National Scale Credit Ratings to Global Scale Credit Ratings". UNIFIN FINANCIERA: S&P Retains BB- Rating Following $100MM Add-On ----------------------------------------------------------------- Standard & Poor's Ratings Services said that its 'BB-' issue-level rating on Unifin Financiera, S.A.P.I. de C.V. SOFOM, E.N.R.'s (Unifin; global scale: BB-/Stable/--; national scale: mxA- /Stable/mxA-2) senior unsecured notes due 2019 remains unchanged following the $100 million add-on. The outstanding principal totals $400 million. In S&P's opinion, the increase will boost Unifin's financial position because the company will improve its debt maturity profile and further ease short-term refinancing pressures. With this issuance, funding mix will consist of a 77% market debt and 23% banking debt. But S&P believes that Unifin's market debt won't represent more than 70% of its total funding structure in the next few quarters and that it won't issue short-term market debt. The 'BB-' rating on the $400 million notes is the same as the long-term global scale issuer credit rating on Unifin, and indicates that the notes will rank equally in right of payment with all of the company's existing and future senior unsecured notes. S&P expects the company to use the proceeds to repay total market debt of about $154 million; securitization by $25.5 million and $116.5 million in bank credit lines. Unifin will use any remaining proceeds for general corporate purposes, including loan portfolio. The rating on the notes incorporates a full cross- currency swap on the principal and interest through the notes' term. RATINGS LIST Unifin Financiera, S.A.P.I. de C.V. SOFOM, E.N.R.'s Issuer credit rating Global scale BB-/Stable/-- National scale mxA-/Stable/mxA-2 Sr. unsec. notes BB- ===================== P U E R T O R I C O ===================== FERRETERIA Y AGROCENTRO: Case Summary & 20 Top Unsec. Creditors --------------------------------------------------------------- Debtor: Ferreteria Y Agrocentro El Siete, Inc. RR-3 BOX 10168 TOA Alta, PR 00953 Case No.: 14-05795 Chapter 11 Petition Date: July 15, 2014 Court: United States Bankruptcy Court District of Puerto Rico (Old San Juan) Debtor's Counsel: Victor Gratacos-Diaz, Esq. VICTOR GRATACOS-DIAZ LEGAL OFFICE P O Box 7571 Caguas, PR 00726 Tel: 787 746-4772 Email: bankruptcy@gratacoslaw.com Total Assets: $1.94 million Total Liabilities: $1.91 million The petition was signed by Jose L Rodriguez Cruz, president. A list of the Debtor's 20 largest unsecured creditors is available for free at http://bankrupt.com/misc/prb14-05795.pdf UNIVERSITY OF PUERTO RICO: S&P Cuts Revenue Bond Rating to 'BB' --------------------------------------------------------------- Standard & Poor's Ratings Services lowered its long-term rating and underlying rating (SPUR) to 'BB' from 'BB+' on the University of Puerto Rico's (UPR) existing university system revenue bonds. S&P also lowered the stand-alone credit profile (SACP) on the university, to 'bb' from 'bb+'. Some of these bonds were issued by the Puerto Rico Industrial, Tourist, Educational, Medical, & Environmental Control Facilities Finance Authority. All ratings have been removed from CreditWatch and assigned a negative outlook. "Per our government-related entities criteria, a rating or outlook change on Puerto Rico (BB/Negative) would result in a rating or outlook change to the University of Puerto Rico given the high likelihood of extraordinary support," said Standard & Poor's credit analyst Bianca Gaytan-Burrell. *********** 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 * * *