/raid1/www/Hosts/bankrupt/TCRLA_Public/140806.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
Wednesday, August 6, 2014, Vol. 15, No. 154
Headlines
A R G E N T I N A
ARGENTINA: DBRS Cuts LT Foreign Currency Issuer Rating to 'SD'
B A R B A D O S
* BARBADOS: Jamaican Businessman Concerned About Economic Model
B O G O T A
EMPRESA DE TELECOMUNICACIONES: Moody's Affirms Ba2 CFR
B R A Z I L
JBS S.A.: Moody's Affirms B3 Global Scale Rating; Outlook Neg.
* BRAZIL: Bahia to Get $200MM IDB Loan for Health Care Sector
C A Y M A N I S L A N D S
DEX GLOBAL: Creditors' Proofs of Debt Due Aug. 22
FLETCHER INCOME: Creditors to Hold Annual Meeting on Aug. 19
HEALTH PROCESSORS: Placed Under Voluntary Wind-Up
ICEBERG ALTERNATIVE I: Creditors' Proofs of Debt Due Aug. 25
ICEBERG ALTERNATIVE II: Creditors' Proofs of Debt Due Aug. 25
ICEBERG ALTERNATIVE MASTER: Creditors' Proofs of Debt Due Aug. 25
NIAGARA ELITE: Creditors' Proofs of Debt Due Aug. 19
PETROEXPORT LIMITED: Creditors & Contributories to Meet on Aug. 14
UNIVERSA BLACK: Creditors' Proofs of Debt Due Aug. 18
UNIVERSA BLACK OFFSHORE: Creditors' Proofs of Debt Due Aug. 18
C H I L E
CORPORACION NACIONAL: Chile to Fund $4BB of Record Copper Spend
J A M A I C A
PAN-JAMAICAN INVESTMENT: To Refinance $600MM Debt
P U E R T O R I C O
PUERTO RICO: Seeks Dismissal of U.S. Bond Funds' Lawsuit
PUERTO RICO: Restructuring Law Faces Another Challenge
PUERTO RICO: Defends New Law on Debt Restructuring
PUERTO RICO: Moody's Views Liquidity Sufficient for 'B2' Rating
- - - - -
=================
A R G E N T I N A
=================
ARGENTINA: DBRS Cuts LT Foreign Currency Issuer Rating to 'SD'
--------------------------------------------------------------
DBRS Inc. has downgraded Argentina's long-term foreign currency
issuer rating from CC to Selective Default (SD). The short-term
foreign currency rating has been downgraded to Default (D), from
R-5. The long-term and short-term local currency issuer ratings
have been confirmed at B (low) and R-5, respectively. The trend
on the long-term local currency rating is Negative, and the trend
on the short-term local currency rating is Stable.
The 30 day grace period for paying interest due on some of
Argentina's exchange bonds expired on July 30. Although Argentina
attempted to make the payment to the trustee (Bank of New York-
Mellon) at the end of June, the New York District Court ruling
effectively barred the trustee from executing the payment to
exchange bondholders, resulting in a default on those securities.
The court's ruling was an attempt to force Argentina to negotiate
a settlement with holdout bondholders and bring a long-running
legal dispute to an end. However, Argentina has thus far remained
unwilling to grant holdout creditors more favorable terms than
those extended to participants in the 2005 and 2010 debt
exchanges. At this stage, only some of Argentina's outstanding
foreign currency bonds have been affected by the default.
Although a failure to resolve the dispute with holdout creditors
could eventually affect all bonds issued under foreign law, DBRS
is presently treating this as a Selective Default on long-term
foreign currency debt.
DBRS believes that Argentina will continue making scheduled
payments on local law bonds, including those denominated in U.S.
Dollars.
However, a prolonged period of default on foreign law bonds could
have adverse implications for macroeconomic stability, potentially
resulting in increased capital flight. DBRS believes that policy
measures to restore price stability have thus far been inadequate.
Consequently, the trend on the long-term local currency rating
remains Negative.
Argentina's default could be cured quickly, either by means of a
settlement with holdout bondholders or through some other mediated
solution that allows interest payments on performing debt to
resume.
If a resolution is found, DBRS is likely to raise the foreign
currency ratings. However, in the absence of such an agreement
and particularly in the event of acceleration of Argentina's
foreign-law bonds, Argentina could remain in default for a
considerable period of time.
===============
B A R B A D O S
===============
* BARBADOS: Jamaican Businessman Concerned About Economic Model
---------------------------------------------------------------
RJR News reports that Richard Byles, a prominent Jamaican
businessman and Co-Chairman of the country's Economic Programme
Oversight Committee (EPOC), has expressed concern about the
economic management model adopted by Barbados, which has resulted
in the country being downgraded by rating agency, Moody's.
The Barbadian government is facing a fiscal crisis with its debt
projected to rise above 100 per cent of GDP next year, and
pressure is mounting on the country to devalue its currency,
according to RJR News.
That situation is similar to one Jamaica found itself in, which
forced a return to the IMF, and Mr. Byles said the latest
developments he was observing in Barbados were not good, the
report notes.
"Many people; I included, years ago, used to hold up Barbados as
an economy that was well managed and making progress -- and their
GDP per capita is like twice ours," the report quoted Mr. Byles as
saying.
But according to the respected Jamaican businessman, the economic
model now being pursued by Barbados does not work, "and the
quicker they come to that reality is the better," the report
relates.
===========
B O G O T A
===========
EMPRESA DE TELECOMUNICACIONES: Moody's Affirms Ba2 CFR
------------------------------------------------------
Moody's Investors Service changed the outlook on Empresa de
Telecomunicaciones de Bogata S.A. ESP ("ETB")'s ratings to stable
from negative and, at the same time, affirmed ETB's Ba1 senior
unsecured and corporate family ratings.
Ratings Rationale
The change in ETB's ratings outlook to stable from negative
reflects ongoing steady EBITDA margins and sustained revenue
despite strong competitive and operating pressures. The stable
outlook also assumes that financial and operating metrics will
remain in line with the current rating category, even as large
capex investments are carried out. High capital investments over
the next 24 months will continue to generate negative free cash
flow, while at the same time strengthening the company's
competitive position and allowing for greater revenue
diversification. In addition to ETB's stable operating
performance, the change in ratings outlook also follows the
upgrade to Baa2, stable from Baa3, positive of the City of
Bogota's (Bogota, Distrito Capital) ratings, the company's main
shareholder with over 86% of its stock.
ETB's Ba1 ratings and stable outlook reflect the application of
Moody's joint default rating methodology for government-related
issuers (GRIs). ETB's rating combines: (i) ETB's underlying
baseline credit assessment (BCA) of ba, and (ii) the willingness
and ability of the City of Bogota to provide credit support to ETB
in a distress scenario. Accordingly, the model incorporates the
expectation of a very high default correlation and a strong
expected level of support by the City of Bogota in the event of
financial stress.
ETB's ba1 BCA reflects the company's leading fixed line and
broadband market position in Bogata, its comfortable debt profile
and low leverage. On the other hand, ETB's BCA reflects the
anticipation of continued negative free cash flow over the next 24
months in line with its aggressive capex program. In 2014 and
2015, the company anticipates that it will carry out capital
expenditures totaling between USD 430 and USD 470 million. The BCA
also incorporates execution risks associated with ETB's changing
business model, where it will face intense competition in the
mobile and pay TV segments from larger, better capitalized
operators. ETB's modest size compared to global peers, the risk of
political interference and highly competitive nature of the
Colombia telecom industry also impact the BCA.
The Ba1 ratings could be downgraded if pressures from competitors,
including wireline, wireless, and cable TV players as well as
alternative technologies such as IP telephony, result in lower
than anticipated revenue growth or EBITDA margins, and higher
working capital needs. In addition, if ETB's adjusted EBITDA
margin falls to below 40% or if adjusted leverage increases to
close to 2.5 times, its rating could come under pressure. ETB's
ratings could also be downgraded if Moody's believe that the
current strong support level from the City of Bogota declines or
if liquidity weakens.
A ratings upgrade is unlikely in the medium term because of the
competitive environment in which ETB operates and the execution
risk related to its business strategy aiming at expanding mobile
services, which places pressure on revenues, margins and credit
protection metrics. However, if ETB turns out to be better able to
combat competitive pressures than anticipated and executes its
business strategy successfully, as demonstrated by stable
broadband market share, growing mobile revenues and stable
operating margin together with an adjusted leverage sustained
under 1.5 times, the ratings could be upgraded. In order to
consider a positive rating action, Moody's would need to ascertain
management and shareholder commitment to maintaining the company's
conservative financial strategy consistent with an investment
grade rating.
ETB's liquidity is adequate. As of March 31st, 2014, the company
had approximately USD 305 million cash on hand, comparing
favorably to about USD 200,000 in short-term debt. The company has
no committed credit facilities but since its assets are
unencumbered, it should be able to pledge or sell certain
properties or stake holdings to raise cash in case of need.
The principal methodology used in rating ETB was the Global
Telecommunications Industry Methodology published in December
2010.
Owned by the City of Bogota, ETB is an incumbent wireline service
provider of local and long distance telephone services, Internet
services to residential subscribers and data services to
corporations mainly in the City of Bogota. It also offers pay TV
and mobile services. During 2013, local telephony was the main
income generator, represented about 44% of total revenues,
followed by internet & data services at 38%, and long distance
services at 8%. During the last twelve months ending on March 31,
2014, ETB generated approximately USD 713 million in revenues and
USD 361 million in adjusted EBITDA, which includes Moody's
adjustments for operating leases.
===========
B R A Z I L
===========
JBS S.A.: Moody's Affirms B3 Global Scale Rating; Outlook Neg.
--------------------------------------------------------------
Moody's Investors Service has affirmed JBS's Ba3 ratings (global
scale) and revised the ratings outlook to stable from negative.
The stabilization of the outlook reflects the improvements in
credit metrics given the rapid and efficient integration of Seara,
the maintenance of an adequate liquidity position and our
expectations that metrics will converge to pre-acquisition levels
by year-end.
Ratings affirmed as follows:
Issuer: JBS S.A.
CFR: Ba3 (global scale)
USD 300 mln notes due 2016: Ba3 (global scale)
Issuer: Bertin S.A.
USD 350 mln bonds due 2016: Ba3 (global scale)
Issuer: JBS Finance II Ltd
USD 900 mln bonds due 2018: Ba3 (global scale)
Issuer: JBS USA, LLC
USD 475 mln secured term loan B due 2018: Ba2 (global scale)
USD 500 mln secured term loan due 2020: Ba2 (global scale)
USD 700 mln notes due 2020: Ba3 (global scale)
USD 500 mln notes due 2021: Ba3 (global scale)
USD 650 mln notes due 2021: Ba3 (global scale)
USD 750 mln notes due 2024: Ba3 (global scale)
The outlook for all ratings is stable.
Ratings Rationale
JBS's Ba3 ratings reflect the global strength of its operations as
one of the world's largest protein producers and its
diversification in terms of protein products, raw material
sourcing, and sales. The strategy to increase its footprint in the
global processed food business and invest on strong domestic
brands via JBS Foods should also improve the business profile and
lead to higher and more stable margins over time. On the other
hand, the company's aggressive growth strategy and M&A activity
constrain the ratings, although execution risks are mitigated by a
proven track record of assets integration and expansion. Also
offsetting the positive attributes is the inherent volatility of
the protein industry, which is subject to risk factors such as
animal cycles and diseases, weather conditions, political
influence and supply imbalances.
After the acquisition of Seara for BRL 5.85 billion in June 2013,
JBS was able to rapidly integrate the business, extracting
synergies and improving operating performance. In the 1Q14 JBS
Foods (comprising mainly the former Seara operation) posted an
EBITDA margin of 13.7%, up from a historical estimated level of
mid single digit range. Such improvements, coupled with active
liability management and a positive momentum for beef exports and
the US poultry operations, supported the reduction in adjusted
leverage to 4.5x (in the LTM ending Mar/14), from 5.3x at the time
of the acquisition.
Going forward, we expect JBS to continue deleveraging, as it
benefits from the full impact of the consolidation of JBS Foods
and from the positive fundamentals for its JBS Mercosul and US
poultry operations. The USA beef and pork segments, however,
should continue to be challenged by animal availability
constrains. Still, we estimate that, absent of any major debt-
funded acquisition, JBS's adjusted leverage should decline to 4.0x
at the end of 2014, the lowest level since the end of 2012. A
possible IPO of JBS Foods with proceeds majorly channeled to debt
reduction would be a positive development.
The stable outlook incorporates Moody's expectations that JBS will
continue to deleverage its balance sheet. Furthermore, it reflects
our assumption that the company will prudently manage Capex,
acquisitions and dividend distributions to preserve its liquidity
profile.
An upgrade to the ratings could occur if JBS reports stronger and
less volatile consolidated cash flows and proves able to improve
operating margins. An upgrade would require the company to report
consistently healthy free cash flow, while maintaining CFO to Net
Debt above 16% and adjusted Debt-to-EBITDA below 4.0x on a
sustained basis.
A downgrade to the rating could be caused by sustained financial
leverage, a weaker liquidity profile, or if the company fails to
generate free cash flow on a consistent basis. Quantitatively, a
downgrade could occur if Debt-to-EBITDA is sustained above 5.5x,
EBITA/Interest below 2.0x or CFO to Net Debt below 10%. All credit
metrics are adjusted according to Moody's standard adjustments and
definitions
Headquartered in Sao Paulo, Brazil, JBS S.A. ("JBS") is the
world's largest protein producer in terms of revenues, slaughter
capacity and production. It is the leader beef, chicken and
leather player and a leading lamb producer on a global basis,
besides being the third largest pork producer in the USA. The
company has large scale and diversification, with presence in more
than 100 countries.
* BRAZIL: Bahia to Get $200MM IDB Loan for Health Care Sector
-------------------------------------------------------------
The Inter-American Development Bank (IDB) has approved a $200
million loan designed to strengthen the health care system in the
Brazilian state of Bahia, with a special focus on the Salvador
metropolitan region and reducing the prevalence of chronic
diseases affecting the most vulnerable segments of its population.
That metropolitan area is home to nearly four million people and
in recent years it has confronted problems associated with
demographic and epidemiological change. The population is aging
quickly; the number of people over the age of 50 has doubled
between 1980 and 2012.
Doctors have also observed a rise in risk factors associated with
chronic diseases and the incidence of them. In 2010, 40 percent of
the population of Salvador was overweight, and in 2012, 42 percent
of deaths in the metropolitan region were caused by cardiovascular
illnesses or cancer. The poorest people were particularly hard
hit.
In order for the structure of the health care system to be in a
stronger position to address these challenges, the program will
finance the creation of an integrated services network with a
focus on primary care as the gateway to broadening access to and
the quality, continuity and efficiency of the network's services.
The program will finance investment to boost management and
enhance access to and quality of all the phases of the health care
services chain.
With an eye to prevention and primary care, the plan calls for
building 13 public gymnasiums (so-called health academies), nine
social and mental health care centers, 11 basic health care
clinics and a facility specializing in the health of workers. As
for specialized care, seven new integrated health care centers
will be built, and the existing network of hemotherapy -- the use
of blood or blood derivatives -- will be boosted so as to improve
emergency care.
The program will also finance the construction and equipping of
the region's Hospital Metropolitano. It will provide Bahia with
cutting-edge services for intermediate care and long-term patients
with chronic diseases. At least three hospitals that are part of
the network dealing with chronic disorders, maternal and child
health and emergencies will be upgraded.
The loan is over 25 years, with a grace period of 5.5 years and an
interest rate pegged to the LIBOR. The local contribution is $85
million. The state of Bahia will execute the loan through its
Secretariat of Health, and the guarantor is the Brazilian federal
government.
==========================
C A Y M A N I S L A N D S
==========================
DEX GLOBAL: Creditors' Proofs of Debt Due Aug. 22
-------------------------------------------------
The creditors of Dex Global Fund, Ltd are required to file their
proofs of debt by Aug. 22, 2014, to be included in the company's
dividend distribution.
The company commenced wind-up proceedings on July 15, 2014.
The company's liquidator is:
Ogier
c/o Justin Savage
Telephone: (345) 815 1816
Facsimile: (345) 949-9877
89 Nexus Way, Camana Bay
Grand Cayman KY1-9007
Cayman Islands
FLETCHER INCOME: Creditors to Hold Annual Meeting on Aug. 19
------------------------------------------------------------
The creditors of Fletcher Income Arbitrage Fund Ltd will hold an
annual meeting on Aug. 19, 2014.
The company's liquidator is:
Robin Lee Mcmahon
c/o Louise Kitching
Ernst & Young Ltd
62 Forum Lane, Camana Bay
P.O. Box 510 Grand Cayman KY1 -1106
Cayman Islands
Telephone +1 (345) 814 9077
e-mail louise.kitching@ky.ey.com
HEALTH PROCESSORS: Placed Under Voluntary Wind-Up
-------------------------------------------------
On July 14, 2014, the sole shareholder of Health Processors
(Holdings), 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:
Handsel B. Minyard
c/o Marsh Management Services Cayman Ltd.
23 Lime Tree Bay Avenue
Governors Square, Building 4, Floor 2
P.O. Box 1051 Grand Cayman KY1-1102
Cayman Islands
Telephone: +1 (345) 949 7988
Facsimile: +1 (345) 949 7849
ICEBERG ALTERNATIVE I: Creditors' Proofs of Debt Due Aug. 25
------------------------------------------------------------
The creditors of Iceberg Alternative Real Estate I Fund Limited
are required to file their proofs of debt by Aug. 25, 2014, to be
included in the company's dividend distribution.
The company commenced liquidation proceedings on July 10, 2014.
The company's liquidator is:
Andrew Childe
c/o Trudy-Ann Scott
Fund Solution Services Limited,
Harbour Centre, 2nd Floor
42 North Church Street,
George Town, Grand Cayman
10 Market Street, #769 Camana Bay
Grand Cayman KY1-9006
Cayman Islands
Telephone: +1 (345) 947 5854
e-mail: trudyann.scott@fundsolutionservices.com
ICEBERG ALTERNATIVE II: Creditors' Proofs of Debt Due Aug. 25
-------------------------------------------------------------
The creditors of Iceberg Alternative Real Estate II Fund Limited
are required to file their proofs of debt by Aug. 25, 2014, to be
included in the company's dividend distribution.
The company commenced liquidation proceedings on July 10, 2014.
The company's liquidator is:
Andrew Childe
c/o Trudy-Ann Scott
Fund Solution Services Limited,
Harbour Centre, 2nd Floor
42 North Church Street,
George Town, Grand Cayman
10 Market Street, #769 Camana Bay
Grand Cayman KY1-9006
Cayman Islands
Telephone: +1 (345) 947 5854
ICEBERG ALTERNATIVE MASTER: Creditors' Proofs of Debt Due Aug. 25
-----------------------------------------------------------------
The creditors of Iceberg Alternative Real Estate Master Fund
Limited are required to file their proofs of debt by Aug. 25,
2014, to be included in the company's dividend distribution.
The company commenced liquidation proceedings on July 10, 2014.
The company's liquidator is:
Andrew Childe
c/o Trudy-Ann Scott
Fund Solution Services Limited,
Harbour Centre, 2nd Floor
42 North Church Street,
George Town, Grand Cayman
10 Market Street, #769 Camana Bay
Grand Cayman KY1-9006
Cayman Islands
Telephone: +1 (345) 947 5854
NIAGARA ELITE: Creditors' Proofs of Debt Due Aug. 19
----------------------------------------------------
The creditors of Niagara Elite Fund Ltd. are required to file
their proofs of debt by Aug. 19, 2014, to be included in the
company's dividend distribution.
The company commenced wind-up proceedings on July 8, 2014.
The company's liquidator is:
Priestleys
c/o Martina de Lima
Unit 11, Galleria Plaza
638 West Bay Road
P.O. Box 30310 Grand Cayman KY1-1202
Cayman Islands
Telephone: (345) 946-1577
PETROEXPORT LIMITED: Creditors & Contributories to Meet on Aug. 14
------------------------------------------------------------------
The creditors and contributories of Petroexport Limited will hold
a meeting on Aug. 14, 2014, at 10:00 a.m.
The company's liquidator is:
Rob McMahon
c/o Tom Bussanich
Ernst & Young Ltd.
62 Forum Lane, Camana Bay
P.O. Box 510 Grand Cayman KY1-1106
Cayman Islands
Telephone: (345) 814 8977
Facsimile: (345) 949 8529
e-mail: tom.bussanich@ky.ey.com
UNIVERSA BLACK: Creditors' Proofs of Debt Due Aug. 18
-----------------------------------------------------
The creditors of Universa Black Swan Protection Protocol-Inflation
I Ltd are required to file their proofs of debt by Aug. 18, 2014,
to be included in the company's dividend distribution.
The company commenced liquidation proceedings on July 10, 2014.
The company's liquidator is:
CDL Company Ltd.
P.O. Box 31106 Grand Cayman KY1-1205
Cayman Islands
UNIVERSA BLACK OFFSHORE: Creditors' Proofs of Debt Due Aug. 18
--------------------------------------------------------------
The creditors of Universa Black Swan Protection Protocol Offshore
III Ltd. are required to file their proofs of debt by Aug. 18,
2014, to be included in the company's dividend distribution.
The company commenced liquidation proceedings on July 10, 2014.
The company's liquidator is:
CDL Company Ltd.
P.O. Box 31106 Grand Cayman KY1-1205
Cayman Islands
=========
C H I L E
=========
CORPORACION NACIONAL: Chile to Fund $4BB of Record Copper Spend
---------------------------------------------------------------
Matt Craze at Bloomberg News reports that Chile allocated state-
owned Corporacion Nacional del Cobre -- Codelco -- $4 billion over
the next five years to overhaul its aging copper mines.
About $3 billion will come from treasury bonds and the other $1
billion from reinvestment of company profit, Finance Minister
Alberto Arenas and Mining Minister Aurora Williams told reporters
in Santiago, according to Bloomberg News.
Bloomberg News notes that the proposal will be sent to Congress
later this month, replacing a mechanism whereby Codelco requests
funding on an annual basis.
The multi-year arrangement allows Codelco to pursue a record $23.5
billion of projects needed to retain its status as the world's
biggest copper miner, the report discloses. It has spent about $9
billion in the past two years with funding from company and bank
debt and accelerated depreciation, Bloomberg News relays.
Codelco, which appointed Nelson Pizarro as chief executive
officer, is undertaking seven projects through 2018 and is on
track to reach a 2 million metric ton annual production target by
2025, Mr. Williams said, Bloomberg News discloses.
The company has provided Chile with $112 billion in the 43 years
since it was nationalized, Bloomberg News relays. The government
returned $200 million to the company earlier this year.
Mr. Pizarro, a former manager of Codelco's Chuquicamata mine with
more than 50 years experience in the industry, will lead the
expansions, the report notes.
'Potent Signal'
According to Bloomberg News, Codelco sought a candidate with mine
management expertise to oversee development of two of the world's
largest underground mine projects as the company digs deeper to
profitable ore. Pizarro, a mining engineer who also once worked
for Antofagasta Plc, ran Codelco's Andina and Chuquicamata mines,
both more than a century old, between 1990 and 1997.
Codelco will continue to tap bond and loan markets to finance
expansions, Chairman Oscar Landerretche told reporters in
Santiago, notes the report.
"The government has given a potent signal," the report quoted Mr.
Landerretche as saying. "These are technically challenging
projects."
About Codelco
Corporacion Nacional del Cobre -- Codelco -- explores, develops,
mines and processes copper in Chile. The principal product of the
company is Grade A copper cathodes. The company, which is owned
by Chilean government, exports most of its production to companies
in Europe and Asia.
=============
J A M A I C A
=============
PAN-JAMAICAN INVESTMENT: To Refinance $600MM Debt
-------------------------------------------------
Jamaica Gleaner reports that Pan-Jamaican Investment Trust said
arrangements have been made to refinance a $600 million debt,
representing part of the funds used to acquire shares in Sagicor
Life Jamaica two years ago, which became due just under two weeks
ago.
However, it gave no indication about how the arrangement will be
structured, according to Jamaica Gleaner.
In a market filing, the report notes, Pan-Jamaican advised the
Jamaica Stock Exchange that its acquisition of shares in Sagicor
Life Jamaica in 2012, for a consideration of $3.05 billion, was
funded in part with proceeds from a private placement of $2.5
billion in secured notes, with maturities ranging from two to five
years.
The first tranche of $600 million matured on July 22, 2014 "and
arrangements have been made to refinance the said amount with
effect from July 23, 2014 for a further two years," it said,
reports Jamaica Gleaner.
The report discloses that with the acquisition of the shares, Pan-
Jamaican Investment Trust increased its stake in Sagicor Life
Jamaica to one-third of the life insurance company in a deal
struck with its Barbadian parent, Sagicor Financial Corporation.
Pan-Jamaican reportedly bought just over 299 million units at the
time, the report relays.
=====================
P U E R T O R I C O
=====================
PUERTO RICO: Seeks Dismissal of U.S. Bond Funds' Lawsuit
--------------------------------------------------------
Tom Hals and Nick Brown, writing for Reuters, reported that the
U.S. commonwealth of Puerto Rico asked a federal court to dismiss
as premature a lawsuit filed by U.S. mutual funds that sought to
strike down a recently enacted Puerto Rican law that the funds
said posed a threat to American investors. According to the
report, Puerto Rico said the lawsuit, brought by bond funds run by
Franklin Templeton and OppenheimerFunds, was untimely because
Puerto Rico's electric authority, known as PREPA, had not sought
to restructure its debt.
The lawsuit "should be dismissed on ripeness grounds unless and
until PREPA files for relief under the act," the commonwealth said
in a filing in federal court in San Juan, Reuters related.
* * *
The Troubled Company Reporter, on July 4, 2014, reported that
Moody's Investors Service has downgraded the Commonwealth of
Puerto Rico to B2 from Ba2, affecting $14.4 billion of outstanding
general obligation (GO) bonds. Concurrently, commonwealth agencies
and public corporations have been downgraded, affecting about $46
billion of non-GO bonds, including $15.6 billion of senior- and
subordinate-lien bonds issued by the Sales-Tax Financing
Corporation (COFINA), which respectively were lowered to Ba3 and
B1. The Puerto Rico Electric Power Authority (PREPA) was
downgraded to Caa2 from Ba3, while the Puerto Rico Aqueduct and
Sewer Authority (PRASA) was downgraded to Caa1 from Ba3. The
Puerto Rico Highway and Transportation Authority (PRHTA) was
downgraded to Caa1 (senior 1998 resolution and 1968 resolution)
from Ba3, and to Caa2 from B1 (subordinate 1998 resolution). For
PREPA, PRHTA and PRASA, the newly lowered ratings remain under
review for possible further downgrade. The debt of the Government
Development Bank (GDB) was downgraded to B3 from Ba2, and the debt
of the University of Puerto Rico was downgraded to Caa1 and Caa2.
The outlook for the GDB as well as for commonwealth GO and related
debt remains negative.
The TCR, on Aug. 4, 2014, reported that Standard & Poor's Ratings
Services has affirmed its 'BB' general obligation (GO) and 'BB-'
appropriation ratings on the Commonwealth of Puerto Rico following
an examination of Puerto Rico's enacted fiscal 2015 budget,
updated quarterly disclosure, and current and projected liquidity
position. The outlook is negative.
PUERTO RICO: Restructuring Law Faces Another Challenge
------------------------------------------------------
Law360 reported that investment firm BlueMountain Capital
Management LLC sued the governor of Puerto Rico and others in
federal court, alleging that a law the commonwealth's government
enacted last month allowing certain public agencies to restructure
their debt violates both the U.S. and Puerto Rico Constitutions.
According to the report, BlueMountain, which manages funds that
collectively hold more than $400 million of power revenue bonds
issued by the Puerto Rico Electric Power Authority, is seeking a
declaratory judgment that the Puerto Rico Public Corporations Debt
Enforcement and Recovery Act is invalid in its entirety and an
injunction blocking enforcement or implementation of the act.
The case is BlueMountain Capital Management LLC v. Garcia-Padilla
et al., case number 3:14-cv-01569, in the U.S. District Court for
the District of Puerto Rico.
* * *
The Troubled Company Reporter, on July 4, 2014, reported that
Moody's Investors Service has downgraded the Commonwealth of
Puerto Rico to B2 from Ba2, affecting $14.4 billion of outstanding
general obligation (GO) bonds. Concurrently, commonwealth agencies
and public corporations have been downgraded, affecting about $46
billion of non-GO bonds, including $15.6 billion of senior- and
subordinate-lien bonds issued by the Sales-Tax Financing
Corporation (COFINA), which respectively were lowered to Ba3 and
B1. The Puerto Rico Electric Power Authority (PREPA) was
downgraded to Caa2 from Ba3, while the Puerto Rico Aqueduct and
Sewer Authority (PRASA) was downgraded to Caa1 from Ba3. The
Puerto Rico Highway and Transportation Authority (PRHTA) was
downgraded to Caa1 (senior 1998 resolution and 1968 resolution)
from Ba3, and to Caa2 from B1 (subordinate 1998 resolution). For
PREPA, PRHTA and PRASA, the newly lowered ratings remain under
review for possible further downgrade. The debt of the Government
Development Bank (GDB) was downgraded to B3 from Ba2, and the debt
of the University of Puerto Rico was downgraded to Caa1 and Caa2.
The outlook for the GDB as well as for commonwealth GO and related
debt remains negative.
The TCR, on Aug. 4, 2014, reported that Standard & Poor's Ratings
Services has affirmed its 'BB' general obligation (GO) and 'BB-'
appropriation ratings on the Commonwealth of Puerto Rico following
an examination of Puerto Rico's enacted fiscal 2015 budget,
updated quarterly disclosure, and current and projected liquidity
position. The outlook is negative.
PUERTO RICO: Defends New Law on Debt Restructuring
--------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that Puerto Rico's new law to permit restricting debt
owing by the island's government-owned entities doesn't violate
the U.S. Constitution, according to papers filed by the
commonwealth's Department of Justice.
The report recalled that in late June, Puerto Rico adopted the
Public Corporation Debt Enforcement and Recovery Act,
theoretically enabling the commonwealth's public corporations to
restructure their debt in a manner akin to Chapter 11
reorganization. Bond funds affiliated with Franklin Resources
Inc. and Oppenheimer Rochester Funds, owning more than $1.7
billion in Puerto Rico Electric Power Authority bonds, initiated a
lawsuit on June 28 asking the U.S. District Court in San Juan to
declare that the new act violates the U.S. Constitution and is
void "in its entirety," the report related.
Puerto Rico responded with papers giving U.S. District Judge
Francisco A. Besosa multiple reasons why he should dismiss the
suit out of hand, the report said. The commonwealth's papers
began by explaining how Puerto Rico's government-owned companies,
like the water and power companies, aren't eligible under any of
the various chapters of the U.S. Bankruptcy Code, and cited
precedents showing that Congress hasn't barred states from dealing
with the insolvency of their entities simply because they aren't
eligible for federal bankruptcy, the report further related.
The funds' lawsuit is Franklin California Tax-Fee Trust v.
Commonwealth of Puerto Rico, 14-cv-01518, U.S. District Court,
District of Puerto Rico (San Juan).
* * *
The Troubled Company Reporter, on July 4, 2014, reported that
Moody's Investors Service has downgraded the Commonwealth of
Puerto Rico to B2 from Ba2, affecting $14.4 billion of outstanding
general obligation (GO) bonds. Concurrently, commonwealth agencies
and public corporations have been downgraded, affecting about $46
billion of non-GO bonds, including $15.6 billion of senior- and
subordinate-lien bonds issued by the Sales-Tax Financing
Corporation (COFINA), which respectively were lowered to Ba3 and
B1. The Puerto Rico Electric Power Authority (PREPA) was
downgraded to Caa2 from Ba3, while the Puerto Rico Aqueduct and
Sewer Authority (PRASA) was downgraded to Caa1 from Ba3. The
Puerto Rico Highway and Transportation Authority (PRHTA) was
downgraded to Caa1 (senior 1998 resolution and 1968 resolution)
from Ba3, and to Caa2 from B1 (subordinate 1998 resolution). For
PREPA, PRHTA and PRASA, the newly lowered ratings remain under
review for possible further downgrade. The debt of the Government
Development Bank (GDB) was downgraded to B3 from Ba2, and the debt
of the University of Puerto Rico was downgraded to Caa1 and Caa2.
The outlook for the GDB as well as for commonwealth GO and related
debt remains negative.
The TCR, on Aug. 4, 2014, reported that Standard & Poor's Ratings
Services has affirmed its 'BB' general obligation (GO) and 'BB-'
appropriation ratings on the Commonwealth of Puerto Rico following
an examination of Puerto Rico's enacted fiscal 2015 budget,
updated quarterly disclosure, and current and projected liquidity
position. The outlook is negative.
PUERTO RICO: Moody's Views Liquidity Sufficient for 'B2' Rating
---------------------------------------------------------------
The chances that the Commonwealth of Puerto Rico and its
Government Development Bank (GDB) will not have the liquidity they
are forecasting are significant and growing, says Moody's
Investors Service. Moody's views the liquidity as currently
forecasted by the GDB, Puerto Rico's fiscal agent, as narrow but
marginally sufficient for the commonwealth's current B2 rating.
The GDB is forecasting declining, but marginally adequate,
liquidity through the end of fiscal 2015, which ends June 30,
2015, with $1.68 billion in cash available at that date.
Moody's adjusted scenario, reflecting downside risks to the
forecast, shows near-total depletion of available liquidity by
June 30. A more rapid drop in cash balances than the GDB
anticipates would further pressure the commonwealth's credit
ratings.
The downside risks to the forecast include possible cash outlays
to support public corporations despite passage of the new debt
restructuring law, tax revenue shortfalls, and the difficulty the
commonwealth would likely face if it turned to the capital markets
for another liquidity boost, Moody's explains in the report,
"Puerto Rico's Liquidity Remains at Risk Despite Recent Borrowing
and Restructuring Law."
On June 28, the commonwealth enacted legislation permitting
certain public corporations -- including those that provide the
island's essential electric, transportation and water and sewer
service -- to restructure their debt, which could include default
on bonds. The law aims to end these corporations' frequent
reliance on financial support from the central government, through
the GDB.
Moody's believes the benefits of the restructuring law to the
commonwealth may be somewhat limited. First, debt defaults under
the law will further hamper market access, preventing or limiting
transactions that could otherwise replenish GDB liquidity. Second,
even if the public corporations are able to shrink debt service
burdens by imposing new terms on creditors, the public
corporations may still need more financial assistance to continue
operations.
Revenue shortfalls are another key risk to the GDP's forecast. For
fiscal 2014 the commonwealth reported a preliminary general fund
shortfall of $488 million, or 5% versus budget. Moody's projects
that a 5% shortfall in general funds would almost deplete
liquidity in March 2015, when only $212 million in available cash
would remain.
***********
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 * * *