/raid1/www/Hosts/bankrupt/TCRLA

/raid1/www/Hosts/bankrupt/TCRLA_Public/140901.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 Monday, September 1, 2014, Vol. 15, No. 172 Headlines B R A Z I L OI SA: Taps Banco BTG to Review Alternatives to Buying TIM Shares OI SA: Moody's Assigns Ba1/ Aa2.br Corporate Family Rating VIRGOLINO DE OLIVEIRA: S&P Affirms 'B' CCR; Outlook Negative C A Y M A N I S L A N D S APACHE GP II: Creditors' Proofs of Debt Due Sept. 25 BLUE SEA: Creditors' Proofs of Debt Due Sept. 24 CHATAIGNE LIMITED: Creditors' Proofs of Debt Due Sept. 15 CHINA ORIENWISE: Placed Under Voluntary Wind-Up CONOCOPHILLIPS INDONESIA: Placed Under Voluntary Wind-Up HBK CORPORATE: Commences Liquidation Proceedings KEEPER RESOURCES: Commences Liquidation Proceedings KEEPER RESOURCES INTL: Creditors' Proofs of Debt Due Sept. 15 LANX OFFSHORE: Creditors' Proofs of Debt Due Sept. 15 WHITING HOLDINGS: Placed Under Voluntary Wind-Up C O L O M B I A EMPRESA DE ENERGIA: S&P Ups Sr. Unsec. Debt Rating From 'BB+' E C U A D O R * ECUADOR: Seeks to Renew US$1.5 Billion China Credit Line J A M A I C A UC RUSAL: Returns to Profit, Sees Bullish Outlook for Alum. Prices M E X I C O GRUPO PAPELERO: Moody's Says Buyout Deal No Impact on B1 CFR GRUPO PAPELERO: S&P Puts 'B+' CCR on CreditWatch Developing OFFICE DEPOT DE MEXICO: Fitch Affirms 'BB+' Long-Term IDR T R I N I D A D & T O B A G O CARIBBEAN AIR: Taps George Reeleder as VP of Commercial Operations X X X X X X X X X * BOND PRICING: For the Week From August 25 to August 29, 2014 - - - - - =========== B R A Z I L =========== OI SA: Taps Banco BTG to Review Alternatives to Buying TIM Shares ----------------------------------------------------------------- Oi S.A. disclosed to its shareholders and the market that on Aug. 26, it engaged Banco BTG Pactual S.A. to act as agent to review alternatives with the purpose of enabling a viable proposal for the acquisition of the shares of TIM Participacoes S.A. indirectly held by Telecom Italia SpA. This is in compliance with the rules and restrictions provided in law and regulations and decisions issued by the Brazilian National Telecommunications Agency and the Brazilian Administrative Council for Economic Defense, in addition to other applicable regulations. About Oi S.A. Oi S.A., through its subsidiaries, provides integrated telecommunication services for residential customers, companies, and governmental agencies in Brazil. The company was formerly known as Brasil Telecom S.A. and changed its name to Oi S.A. in February 2012. Oi S.A. was founded in 1963 and is headquartered in Rio de Janeiro, Brazil. * * * As reported in the Troubled Company Reporter-Latin America on July 22, 2014, Standard & Poor's Ratings Services lowered its corporate credit and debt ratings on Oi S.A. to 'BB+' from 'BBB-' on global scale and to 'brAA+' from 'brAAA' on national scale, and removed them from CreditWatch with negative implications, where they were placed on July 4, 2014. The outlook on the corporate credit ratings is stable. The downgrade reflects the somewhat weaker credit metrics than S&P previously expected in its base-case scenario, following the nonpayment of the EUR897 million commercial paper from Rio Forte Investments S.A. (Rio Forte) held by Portugal Telecom (PT), Oi's subsidiary. S&P incorporated this amount in its previous forecast as part of PT's cash position that would be used to prepay debt on the merger between Oi and PT. As a result, S&P now expects a lower debt reduction at Oi, pressuring its credit metrics, which were already tight for the 'BBB-' ratings. OI SA: Moody's Assigns Ba1/ Aa2.br Corporate Family Rating ---------------------------------------------------------- Moody's America Latina has assigned a Ba1/Aa2.br corporate family rating to Oi SA based on the company's reduced financial flexibility and weak credit metrics, which Moody's believes will result in a weakening of Oi's competitive position. Oi has articulated plans to reduce capital spending and may not fully participate in the upcoming 4G spectrum auction in Brazil. In addition, Oi could face operational, competitive or financial challenges related to the quickly evolving competitive environment, which includes an opportunity for consolidation through M&A. Moody's believes that Oi's base business in Brazil faces margin pressure from an unfavorable product mix shift to pay TV and broadband and the price pressure inherent in its value segment target market. In Portugal, Moody's expects continued revenue weakness and margin pressure due to competition and the same unfavorable product mix shift. Oi has detailed operational plans to offset this margin pressure through expense savings initiatives, which Moody's estimates will result in a modest improvement in credit metrics. However, Moody's estimates that leverage will remain above 4.5x (Moody's adjusted) and the company will continue to consume cash until at least 2016. As part of this rating action, Moody's has also downgraded the ratings on unsecured debt at Oi SA to Ba2/Aa3.br, one notch below the corporate family rating due to their junior position in the capital structure. The company has significant indebtedness at subsidiary holding companies which have a priority claim on the majority of operating cash flows. Moody's has also downgraded unsecured debt at Portugal Telecom International Finance, BV to Ba2, also one notch below the CFR. Moody's believes that these notes are junior to other debt at PT Portugal SGPS SA and are pari passu to unsecured debt at to the parent and guarantor, Oi SA. Moody's has downgraded three specific note issuances at Oi SA which benefit from a subsidiary guarantee from Telemar Norte Leste SA (Telemar) to Ba1. These three issuances, the 5.5% US$ notes due 2020, the 9.5% US$ notes due 2019 and the 5.125% EUR notes due 2017 were originally issued by Telemar but transferred to Oi SA. Moody's believes that the Telemar guarantee is sufficient to differentiate the creditworthiness of these issuances versus other unsecured obligations of Oi SA. Lastly, Moody's has withdrawn all ratings for Telemar Participacoes S.A. upon repayment of all debt following the recent recapitalization transaction. These actions conclude the review for downgrade initiated on July 18, 2014. Oi's negative outlook reflects its ongoing operational and strategic challenges and the uncertainty and distractions related to its recent investment loss at the Portugal Telecom subsidiary. Ratings Rationale Ratings withdrawn: Issuer: Telemar Participacoes S.A. - Senior unsecured - USD 219 mln BRAZILIAN BOND due 2018 - USD 219 mln BRAZILIAN BOND due 2019 Issuer: Oi S.A. - Issuer rating - Senior unsecured Ratings assigned: Issuer: Oi S.A. - Corporate Family Rating: Ba1/Aa2.br Ratings downgraded: Issuer: Oi S.A. - USD 771 mln BRAZILIAN BOND due 2014: to Ba2/Aa3.br from Baa3/Aa1.br - USD 175 mln BRAZILIAN DEBENTURES due 2017: to Ba2/Aa3.br from Baa3/Aa1.br - USD 1,033 mln BRAZILIAN DEBENTURES due 2018: to Ba2/Aa3.br from Baa3/Aa1.br - USD 108 mln BRAZILIAN BOND due 2020: to Ba2/Aa3.br from Baa3/Aa1.br - USD 703 mln BRAZILIAN DEBENTURES due 2020: to Ba2/Aa3.br from Baa3/Aa1.br The outlook for all ratings is negative Oi's Ba1 corporate family rating reflects its scale, geographic diversity, broad asset base and network coverage and strong margins. These strengths are offset by the company's challenges to upgrade its network in Brazil to meet shifting consumer demand, the highly competitive markets in both Brazil and Portugal, the margin pressure it faces from an unfavorable product mix shift and the company's limited financial flexibility. Moody's forecasts Oi's leverage will approach 5x (Moody's adjusted) at year-end 2014 and fall towards 4.5x (Moody's adjusted) at year end 2016. Moody's expects Oi to continue to consume cash through 2016. Oi's recent merger with Portugal Telecom succeeded in simplifying its equity ownership, dramatically reduced its dividend commitment and raised a large amount of equity capital to reduce debt. However, the unexpected commercial paper investment lost by PT has resulted in higher consolidated leverage for Oi. The R$3 billion loss has also impacted Oi's ability to raise capital which may force the company to cut capital investment further and Moody's believes it may influence Oi's decision on whether to participate in the upcoming 4G spectrum auction. These actions to reduce network investment would negatively impact Oi's competitive position and would occur at exactly the wrong time for the company. Oi's main competitors, Telefonica Brazil and America Movil remain well capitalized and are investing heavily in Brazil for growth, both organically with capex and on spectrum and through M&A. Moody's believes that Oi has adequate liquidity to meet its obligations over the next 12 to 18 months. Moody's forecasts that Oi will continue to consume cash through 2016, excluding any potential spectrum purchases. Oi had approximately RUSD6 billion in cash at June 30 and access to approximately R$7.5 billion in comlnitted credit facilities. The company has upcoming maturities of R$5.5b in 2014 and R$3.4 billion in 2015. Oi's debt covenants include a 4x leverage maintenance test. The company expects to maintain cushion under this covenant as it measures EBITDA including the gains from asset disposals. Moody's views this as a material weakness over the longer term as it could motivate management to sell assets to avoid a covenant breach. However, the company's planned tower sale which will close in 4Q'14 will provide near term covenant cushion for the twelve month measurement period starting in 4Q. Moody's rates unsecured debt at Oi S.A. Ba2, one notch below the corporate family rating due to its junior position in the capital structure. Certain note issuances at Oi (the 5.5% US$ notes due 2020, the 9.5% US$ notes due 2019 and the 5.125% EUR notes due 2017) which benefit from an upstream guarantee from its main Brazilian subsidiary Telemar Norte Leste S.A. (Telemar) are rated Ba1 reflecting their priority claim on approximately two thirds of Oi's Brazilian operating cash flows and assets. Moody's rates the unsecured debt at Portugal Telecom International Finance B.V. (PTIF) Ba2, also one notch below the CFR due to their junior claim on the cash flows of the Portugal subsidiary and the significant indebtedness at PT Portugal SGPS SA which is senior to PTIF. The notes at PTIF do benefit from a guarantee from Oi SA. Moody's could lower Oi's ratings further if leverage remains above 4.5x (Moody's adjusted) for an extended period or if the company is not on a trajectory to produce sustainable positive free cash flow. Oi's ratings could be upgraded if leverage can be sustained comfortably below 4x (Moody's adjusted) and the company produces sustained positive free cash flow. In addition, an upgrade would be predicated upon the company's willingness and ability to continue investing (both network capex and spectrum acquisition) at a level which will improve its competitive position. Alternatively, Moody's could consider an upgrade if the company's asset-light strategy is successful in retaining market share and result in EBITDA growth such that it meets the financial metrics above. The principal methodology used in this rating was Global Telecommunications Industry published in December 2010. 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". VIRGOLINO DE OLIVEIRA: S&P Affirms 'B' CCR; Outlook Negative ------------------------------------------------------------ Standard & Poor's Ratings Services affirmed its 'B' global scale corporate credit and issue-level ratings and its 'brBB+' Brazilian national scale corporate credit ratings on Virgolino de Oliveira S.A.-Acucar e Alcool (GVO). The outlook remains negative. The company has $735 million of rated bonds outstanding. The negative outlook still reflects GVO's sizable debt and difficulty to reduce debt amid uncertain crushing volumes and sugar and ethanol prices, hampering its ability to generate consistent FOCF. Unlike S&P's previous expectation, the company generated sound positive FOCF in fiscal 2014 ended April 30, 2014, of R$272 million. GVO used it, along with debt refinancing and the issuance of a $135 million secured bond to cover short-term debt maturities and interest payments. The company started to crush cane in early March and benefited from somewhat better ethanol profitability, and has implemented cost-cutting initiatives and a more efficient working capital management. However, the challenges to generate consistent stronger FOCF in fiscal 2015 -- amid still pressured sugar prices and limited upside in crushing volumes-and high annual interest payments and maintenance capital expenditure can result in higher refinancing needs, which could lead to a downgrade. ========================== C A Y M A N I S L A N D S ========================== APACHE GP II: Creditors' Proofs of Debt Due Sept. 25 ---------------------------------------------------- The creditors of Apache GP II Limited are required to file their proofs of debt by Sept. 25, 2014, to be included in the company's dividend distribution. The company commenced liquidation proceedings on July 31, 2014. The company's liquidator is: Intertrust SPV (Cayman) Limited 190 Elgin Avenue, George Town Grand Cayman KY1-9005 Cayman Islands c/o Jennifer Chailler Telephone: (345) 943-3100 BLUE SEA: Creditors' Proofs of Debt Due Sept. 24 ------------------------------------------------ The creditors of Blue Sea Holdings Limited are required to file their proofs of debt by Sept. 24, 2014, to be included in the company's dividend distribution. The company commenced wind-up proceedings on Aug. 8, 2014. The company's liquidator is: Buchanan Limited c/o Allison Kelly Telephone: (345) 949-0355 Facsimile: (345)949-0360 P.O. Box 1170 George Town, Grand Cayman Cayman Islands KY1-1102 CHATAIGNE LIMITED: Creditors' Proofs of Debt Due Sept. 15 --------------------------------------------------------- The creditors of Chataigne Limited are required to file their proofs of debt by Sept. 15, 2014, to be included in the company's dividend distribution. The company commenced wind-up proceedings on Aug. 12, 2014. The company's liquidator is: Eagle Holdings Ltd. c/o Barclays Private Bank & Trust (Cayman) Limited FirstCaribbean House, 4th Floor P.O. Box 487 Grand Cayman KY1-1106 Cayman Islands Telephone: (345) 949-7128 CHINA ORIENWISE: Placed Under Voluntary Wind-Up ----------------------------------------------- On Aug. 6, 2014, the Grand Court of the Cayman Islands entered an order to voluntarily wind up the operations of China Orienwise Financial Holding Limited. Creditors are required to file their proofs of debt to be included in the company's dividend distribution. The company's liquidator is: Hugh Dickson c/o Peter Bigwood Telephone: +1 (345) 769 7210 Facsimile: +1 (345) 949 7120 10 Market Street P.O. Box #765 Camana Bay Grand Cayman KY1- 9006 Cayman Islands CONOCOPHILLIPS INDONESIA: Placed Under Voluntary Wind-Up -------------------------------------------------------- On Aug. 25, 2014, the shareholders of Conocophillips Indonesia SE Barakan 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: Trident Liquidators (Cayman) Ltd c/o Eva Moore Telephone: (345) 949 0880 Facsimile: (345) 949 0881 One Capital Place, 4th Floor P.O. Box 847, George Town Grand Cayman KY1-1103 Cayman Islands HBK CORPORATE: Commences Liquidation Proceedings ------------------------------------------------ On Aug. 11, 2014, the shareholders of HBK Corporate Feeder Fund Ltd. resolved to voluntarily liquidate the company's business. Creditors are required to file their proofs of debt to be included in the company's dividend distribution. The company's liquidator is: HBK Capital Ltd. c/o Carey Olsen P.O. Box 10008, Willow House, Cricket Sq. Grand Cayman KY1-1001 Cayman Islands KEEPER RESOURCES: Commences Liquidation Proceedings --------------------------------------------------- On Aug. 9, 2014, the sole shareholder of Keeper Resources Inc. resolved to voluntarily liquidate the company's business. Creditors are required to file their proofs of debt to be included in the company's dividend distribution. The company's liquidator is: Beat Schurch c/o Maples and Calder, Attorneys-at-law The Center, 53rd Floor 99 Queen's Road Central Hong Kong KEEPER RESOURCES INTL: Creditors' Proofs of Debt Due Sept. 15 ------------------------------------------------------------- The creditors of Keeper Resources International Inc. are required to file their proofs of debt by Sept. 15, 2014, to be included in the company's dividend distribution. The company commenced liquidation proceedings on Aug. 12, 2014. The company's liquidator is: Beat Schurch c/o Maples and Calder, Attorneys-at-law 53rd Floor, The Center 99 Queen's Road Central Hong Kong LANX OFFSHORE: Creditors' Proofs of Debt Due Sept. 15 ----------------------------------------------------- The creditors of Lanx Offshore Partners (QP), Ltd are required to file their proofs of debt by Sept. 15, 2014, to be included in the company's dividend distribution. The company commenced wind-up proceedings on Aug. 7, 2014. The company's liquidator is: Ogier c/o Jody Powery-Gilbert Telephone: (345) 815-1763 Facsimile: (345) 949-9877 89 Nexus Way, Camana Bay Grand Cayman KY1-9007 Cayman Islands WHITING HOLDINGS: Placed Under Voluntary Wind-Up ------------------------------------------------ On Aug. 13, 2014, the shareholders of Whiting 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: Trident Liquidators (Cayman) Ltd c/o Eva Moore Telephone: (345) 949 0880 Facsimile: (345) 949 0881 One Capital Place, 4th Floor P.O. Box 847, George Town Grand Cayman KY1-1103 Cayman Islands =============== C O L O M B I A =============== EMPRESA DE ENERGIA: S&P Ups Sr. Unsec. Debt Rating From 'BB+' ------------------------------------------------------------- Standard & Poor's Ratings Services affirmed its 'BBB-'corporate credit rating on Empresa de Energia de Bogota S.A. E.S.P. (EEB). S&P also raised its ratings on EEB's senior unsecured debt to 'BBB-' from 'BB+'. The outlook on the corporate credit rating is stable. The rating on EEB reflects its 'bbb-' stand-alone credit profile (SACP) which stems from S&P's view of its "satisfactory" business risk profile. Its financial risk profile remains "intermediate" and its liquidity is "adequate". The rating also reflects S&P's opinion that there is a high likelihood that the city of Bogota, (Bogota Distrito Capital; BBB- /Stable/--), would provide timely and sufficient extraordinary support to EEB in the event of financial distress given the link between the two entities. In accordance with S&P's criteria for government-related entities (GREs), the government's support is based on S&P's assessment of EEB's important role as Bogota's integrated energy provider, its very strong link with the government due to its majority shareholder position (76.3%), and the city's influence on the company's strategic and business plans. "The rating on EEB's senior unsecured debt reflects the diversity of EEB's assets both geographically and in the industries in which its subsidiaries participate. S&P believes this provides EEB with greater opportunities for asset dispositions, transfers, or recapitalization of subsidiaries in case of financial distress," said Standard & Poor's credit analyst Maria del Sol Gonzalez. EEB also has operating assets at the holding company and its debt is fairly concentrated at its subsidiary Transportadora de Gas Internacional S.A. E.S.P. (TGI; BBB-/Stable/--), which are mitigants of its structural subordination. ============= E C U A D O R ============= * ECUADOR: Seeks to Renew US$1.5 Billion China Credit Line ---------------------------------------------------------- Nathan Gill at Bloomberg News reports that Ecuador, the OPEC nation that uses most of its oil output to pay off loans from China, is seeking to renew a US$1.5 billion credit line with the Asian country to help finance next year's budget. Finance Minister Fausto Herrera met with officials from China Development Bank Corp. on Aug. 22 in Quito to review investment projects financed by the bank and discuss the renewal of the credit line, the South American nation's Finance Ministry said in an e-mailed statement obtained by Bloomberg News. The funds would be used to help pay for budgeted public works projects in 2015, according to the statement. The ministry didn't provide more details about the credit line. Bloomberg News relates that Ecuador, faced with the highest borrowing costs in South America after Venezuela and Argentina, has relied on Chinese lending to help cover swelling budget deficits since defaulting on US$3.2 billion of its foreign debt almost six years ago. The loans from China have helped Ecuador boost spending on infrastructure projects, including a series of hydroelectric dams that will help the nation reduce subsidies on imported fuel used to generate electricity, according to the statement, Bloomberg News reports. "We are continuing to work to broaden our financial relationship," Mr. Herrera said, according to the statement, notes Bloomberg News. "With the help of China, Ecuador has been able to push forward with necessary projects in strategic sectors that have been delayed for decades." Bloomberg News says that the credit line would be on top of a $2 billion loan signed in May with Unipec Asia Co., a unit of China Petroleum and Chemical Corp., known as Sinopec. That deal was guaranteed by oil from state-run PetroEcuador over an unspecified timeframe, Bloomberg News notes. International Bonds In June, the government sold international bonds for the first time since the default, tapping investors for US$2 billion or almost triple the amount originally planned, according to Finance Ministry data, Bloomberg News discloses. Ecuador produced an average 555,300 barrels of crude per day in June, according to the most recent data from the country's central bank. About 70 percent of that goes to pay off loans from China, Ramiro Aguilar, a legislator and member of the congressional economic commission, said in a July interview with Bloomberg News. ============= J A M A I C A ============= UC RUSAL: Returns to Profit, Sees Bullish Outlook for Alum. Prices ------------------------------------------------------------------ RJR News reports that UC Rusal said it returned to profit for the first time in five quarters. It also gave a bullish outlook for aluminum prices, driven by growing demand from carmakers and supply cuts outside China, according to RJR News. The report notes that the aluminum giant emerged from the red thanks to higher aluminum prices, cost cuts, smelter closures and forecast further gains, as it sees a global supply deficit more than doubling in the second half of the year to 1.5 million tons. UC Rusal completed a crucial restructuring of US$5.1 billion in debt and has no payments due until January 2016, the report notes. The deal gives it flexibility to pre-pay debt when cash flows are strong and pay less when London Metal Exchange prices fall, the report relates. UC Rusal controls 65 per cent of Jamaica's alumina production capacity and operates three of the island's four alumina refineries. UC Rusal owns three alumina plants in Jamaica -- the Windalco mines at Ewarton in St. Catherine and Kirkvine in Manchester, and Alpart at Nain in St. Elizabeth. Kirkvine and Alpart were closed at the height of the world economic crisis several years ago, however, and despite several projected re-openings, they remain closed, with no firm date set for their reopening. * * * As reported in the Troubled Company Reporter-Latin America on March 31, 2014, RJR News said that UC Rusal reported a massive increase in net losses in the year to December 31. This was due mainly to a large impairment cost and one-off restructuring charges combined with lower production and a fall in aluminum prices, according to RJR News. The report said the company reported a net loss of US$3.2 billion. It suffered a US$528 million loss in 2012. =========== M E X I C O =========== GRUPO PAPELERO: Moody's Says Buyout Deal No Impact on B1 CFR ------------------------------------------------------------ Moody's said that it does not expect at this time any change in Grupo Papelero Scribe, S.A. de C.V. (Scribe)'s B1 corporate family rating and senior unsecured rating on its rated global notes or stable outlook from the announcement made by Bio Pappel, S.A.B. de C.V. (Pappel - unrated), that Grupo Bio Pappel (GBP - unrated), its main shareholder, reached an agreement to acquire 100% of Corporacion Scribe's shares. The transaction is contingent on the approval of the Anti-Trust Commission and Scribe's bondholders and Moody's expect it to close by mid 2015. Grupo Papelero Scribe, S.A. de C.V. (Scribe) is Mexico's largest producer of printing and writing paper and notebooks based on sales volume, with MXN 6.0 billion of revenues in the last twelve months ended in June 30, 2014 (LTM). Grupo Bio Pappel, S.A. de C.V. (GBP) is a private company having a controlling interest in Bio Pappel, S.A.B. de C.V. (Pappel) the largest paper manufacturer in Mexico. GRUPO PAPELERO: S&P Puts 'B+' CCR on CreditWatch Developing ----------------------------------------------------------- Standard & Poor's Ratings Services placed its 'B+' long-term corporate credit and issue-level ratings on Mexico-based paper products manufacturer, Grupo Papelero Scribe (Scribe), on CreditWatch with developing implications. The CreditWatch listing follows the announcement that Grupo Bio Pappel S.A. de C.V. (not rated) reached an agreement to acquire 100% of Corporacion Scribe S.A.P.I. de C.V., parent company of Scribe. Terms of the transaction were not disclosed, and the deal is still subject to regulatory approvals. The CreditWatch listing reflects currently limited information regarding the details of the transaction. Therefore, S&P's uncertain about the transaction's effect on Scribe's cash flow and credit protection measures. The CreditWatch also reflects the limited visibility that S&P has on the credit profile of Grupo Bio Pappel, as Scribe's new parent company. S&P considers that Scribe's integration into Grupo Bio Pappel could result in greater scale, diversification, and potential synergies for the combined entity. However, S&P do not expect a significant short-term improvement in Scribe's business risk profile because the paper products market in Mexico remains soft in light of sluggish consumption trends and slow government spending, particularly in the notebooks and printing and writing paper segment where Scribe operates. OFFICE DEPOT DE MEXICO: Fitch Affirms 'BB+' Long-Term IDR --------------------------------------------------------- Fitch Ratings has affirmed the following ratings of Office Depot de Mexico S.A. de C.V. (ODM): -- Foreign currency long-term Issuer Default Rating (IDR) at 'BB+'; -- Local currency long-term IDR at 'BB+'; -- USD350 million senior notes due 2020 at 'BB+'. The Rating Outlook is Stable. The ratings reflect ODM's leadership position in the office products super-store segment, diversified geographical footprint and consistent cash flow generation. The rating also incorporates an expectation of leverage levels of around 2.5x debt-to-EBITDA and adjusted debt-to-EBITDAR of 3.5x in the medium term. Key Rating Drivers ODM's operating profile is supported by its national retail presence in Mexico, as well as its operations in Central America and Colombia, its mix of large corporate customers, small businesses and consumers. It has a leading position among Mexican office supply super stores, while non-Mexican sales represent about 15% of total revenue. In addition, its wide distribution network, preponderance of cash sales and mostly local sourcing of inventory, further supports ODM's business profile. Stable Cash Flow Generation The company has shown consistent growth over the past 12 years, with solid EBITDA generation even during economic downturns. Same store sales (SSS) fell -3.6% in 2013, in part due to week GDP growth, while EBITDA margins improved by 53 basis points (bps) compared to full year 2012. SSS declines seem to be moderating, for the first six months of 2014, SSS declined -2.3%. EBITDA margin has dipped to 10.4% for second quarter of 2014 (2Q'14) on a last 12 months (LTM) basis, but EBITDA generation is expected to be about MXN1.6 billion pesos for full year 2014, basically unchanged from full year 2013. Going forward, Fitch expects EBITDA margin to be around 10%. Potential For Industry Consolidation Fitch believes there are growth opportunities for penetration in smaller cities, as well as some gains achievable in taking away market share from mom & pops and wholesalers. The Mexican office supply industry is very fragmented, with the potential for consolidation by big players such as ODM. Going forward, ODM will pursue a robust growth strategy, with an estimated 30 store openings per year on average, most of them within Mexico. Fitch expects these openings to be funded with internally generated cash flow, as the company has done in the past. Leverage Temporarily Above Expectations The ratings include expectations that ODM's debt to EBITDA leverage should be around 2.5x (adjusted debt-to-EBITDAR: 3.5x) in the medium term. For June 30, 2014 LTM, debt to EBITDA was 2.9x, (adjusted debt to EBITDAR: 3.7x). Leverage is expected to improve as SSS stabilize, and EBITDA generation from the recent Marchand acquisition in April 2014 is taken into account. While Fitch envisions short-term deviations from its expected leverage levels due to strategic initiatives, sustained leverage levels above expectations will add pressure to the ratings. Adequate Liquidity With cash and cash equivalents of approximately MXN709 million as of 2Q'14 and no material debt maturities until 2020, ODM's liquidity position is manageable. Free cash flow (FCF) before dividends has been mostly positive over the past five years, and Fitch expects modest pre-dividend FCF generation going forward, with Capex around MXN600 million per year in the medium term. Aside from the shareholder loan to Grupo Gigante and its related non-cash shareholder dividends, ODM is able to pay cash dividends in an amount of up to 50% of net income according to covenants. Given this, Fitch would expect for cash to accumulate and to possibly be used for gross debt reduction. Rating Sensitivities Factors that could be detrimental to credit quality include weaker-than-expected SSS, lower EBITDA margin, debt-financed acquisitions or other factors that could lead to sustained leverage levels above 3.5x adjusted debt to EBITDAR and 2.5x debt to EBITDA in the medium term. Factors that could improve creditworthiness include stronger-than- expected operating results or lower debt levels that lead to adjusted debt-to-EBITDAR ratios below 2.5x, as well a commitment from a financial policy standpoint to permanently maintain leverage at this lower level. ================================ T R I N I D A D & T O B A G O ================================ CARIBBEAN AIR: Taps George Reeleder as VP of Commercial Operations ------------------------------------------------------------------ Vernon Khelawan at Trinidad and Tobago Newsday reports that another Canadian national has been added to the executive team at State owned Caribbean Airlines Limited. New Chief Executive Officer Michael Di Lollo, also a Canadian citizen, took up office last May. George Reeleder took up the position of Vice President, Commercial Operations. Unofficial sources told Trinidad and Tobago Newsday that Mr. Reeleder has a solid aviation background, but as of last night Caribbean Airlines has remained silent on the appointment. The position of Vice-President, Commercial has been vacant since former holder Robert Corbie was made acting Chief Executive Officer in November 2011, the report notes. Mr. Corbie resigned suddenly last October. Over the past two weeks, CAL has published advertisements seeking persons to fill the positions of Vice President Strategic Management and Manager, Corporate Communications, Trinidad and Tobago Newsday discloses. Clint Williams, who served as the airline's corporate communications manager for the past two years left the company a month ago, the report relays. Meanwhile, the report says, the airline's board seems to be paying greater attention to the operation of the domestic airbridge service, the report notes. Sources disclosed that for the second time in a few months board members took time to surveying and monitoring the way passengers were being handled at the check-in counters all the way to the boarding activity, the report discloses. The airbridge has come under much scrutiny recently, when Chief Secretary of the Tobago House of Assembly (THA) Orville London accused CAL of not treating with the airbridge operations as it should and called for a separate airline to operate the domestic services, the report adds. Caribbean Airlines Limited -- http://www.caribbean-airlines.com/ -- provides passenger airline services in the Caribbean, South America, and North America. The company also offers freighter services for perishables, fish and seafood, live animals, human remains, and dangerous goods. In addition, it operates a duty free store in Trinidad. Caribbean Airlines Limited was founded in 2006 and is based in Piarco, Trinidad and Tobago. As reported in the Troubled Company Reporter-Latin America on May 20, 2013, Caribbean360.com said Trinidad and Tobago Finance Minister Larry Howai said Caribbean Airlines Limited recorded losses estimated at US$70 million in 2012. In 2011, CAL had recorded losses of US43.7 million. ================= X X X X X X X X X ================= * BOND PRICING: For the Week From August 25 to August 29, 2014 -------------------------------------------------------------- Issuer Coupon Maturity Currency Price ------ ------ -------- -------- ----- BES Finance Ltd 2.9 EUR 211913000 PDVSA 6 11/15/2026 USD 4500000000 ESFG International Ltd 5.8 EUR 52950000 PDVSA 6 5/16/2024 USD 5000000000 PDVSA 5.4 4/12/2027 USD 3000000000 Mongolian Mining Corp 8.9 3/29/2017 USD 600000000 PDVSA 5.5 4/12/2037 USD 1500000000 Hindili Industry 8.6 11/4/2015 USD 380000000 BES Finance Ltd 4.5 EUR 95767000 Automotores Gildemeister SA 8.3 5/24/2021 USD 400000000 SMU SA 7.8 2/8/2020 USD 300000000 NQ Mobile Inc 4 10/15/2018 USD 172500000 Inversiones Alsacia SA 8 8/18/2018 USD 347300000 Venezuela Governement 7.7 4/21/2025 USD 1599817000 Glorious Property Holdings Ltd 13 3/4/2018 USD 400000000 Renhe Commercial 13 3/10/2016 USD 600000000 Bank Austria 1.9 EUR 97608000 China Precisoin 7.3 2/4/2018 HKD 1028000000 BCP Finance Co 2.4 EUR 99063406.25 Automotores Gildemeister SA 6.8 1/15/2023 USD 300000000 BA-CA Finance Cayman 2 Ltd 2 EUR 51481000 Argentina Bonar Bonds 26 9/10/2015 ARS 5424358000 Inversora de Electrica 6.5 9/26/2017 USD 130263886 BCP Finance Co 4.2 EUR 72112000 Mongolian Mining Corp 8.9 3/29/2017 USD 600000000 Argentina Government 4.3 12/31/2033 JPY 5840497000 PDVSA 6 5/16/2024 USD 5000000000 Argentina Boden Bonds 2 9/30/2014 ARS 930445250 PDVSA 6 11/15/2026 USD 4500000000 Greenfields Petroleum Corp 9 5/31/2017 CAD 23750000 Hindili Industry 8.6 11/4/2015 USD 380000000 Argentina Government 4.3 12/31/2033 JPY 2553017000 Argentina Bocon 2 1/3/2016 ARS 1608749924 Argentina Government 0.5 12/31/2038 JPY 21037843000 Automotores Gildemeister SA 8.3 5/24/2021 USD 400000000 Caixa Geral De Depositos Finance 1 EUR 44885000 SMU SA 7.8 USD 300000000 Renhe Commercial 13 3/10/2016 USD 600000000 Caixa Geral De Depositos Finance 2 EUR 65843000 Inversiones Alsacia SA 8 8/18/2018 USD 347300000 Automotores Gildemeister SA 6.8 1/15/2023 USD 300000000 BPI Capital Finance Ltd 2.9 EUR 15290000 Banif Finance Ltd 1.6 EUR 42234000 Banco BPI SA/Cayman Islands 4.2 11/14/2035 EUR 20000000 Empresas La Polar SA 3.8 10/10/2017 CLP 5000000 City of Buenos Aires Argentina 2 1/28/2020 USD 146771000 Aguas Andinas SA 4.2 12/1/2026 CLP 3289471.68 City of Buenos Aires Argentina 2 12/20/2019 USD 113229000 Venezuela Governement 7 3/31/2038 USD 1250003000 Empresa de Transporte 5.5 7/15/2027 CLP 3732799.8 Cia Cervecerias Unidas SA 4 12/1/2024 CLP 1050000 Almendral Telecomunicaciones SA 3.5 12/15/2014 CLP 644441.04 Cia Sud Americana de Vapores SA 6.4 10/1/2022 CLP 607142.76 Decimo Primer 4.5 10/25/2041 USD 37800000 Provincia del Chaco 4 12/4/2026 USD 10111047.85 Ruta de Bosque 6.3 3/15/2021 CLP 5062781.25 Talcan Chillan 2.8 12/15/2019 CLP 2978764.16 EMP Ferrocarriles Estado 6.5 1/1/2026 CLP 788572.14 *********** 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 * * *