/raid1/www/Hosts/bankrupt/TCRLA

/raid1/www/Hosts/bankrupt/TCRLA_Public/140912.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, September 12, 2014, Vol. 15, No. 181 Headlines A N T I G U A & B A R B U D A LIAT: Defends Flight Cancellations Record LIAT: Returns Commercial Department Jobs to Antigua LIAT: Former Director to Address Dismissal From Airline A R G E N T I N A CLISA-COMPANIA: S&P Affirms 'CCC-' CCR & Rates $120MM Notes 'CCC-' B R A Z I L OI SA: America Movil to Hold Talks Over Potential Tim Brasil Bid C A Y M A N I S L A N D S ATACAMA FINANCE: Shareholders' Final Meeting Set for Sept. 17 CHATAIGNE LIMITED: Members' Final Meeting Set for Sept. 17 CONOCOPHILLIPS INDONESIA: Members' Final Meeting Set for Sept. 25 ENERGEX CO: Shareholders' Final Meeting Set for Sept. 17 HBK CORPORATE: Shareholders' Final Meeting Set for Sept. 16 LANX OFFSHORE: Shareholder to Receive Wind-Up Report on Sept. 17 PIP4PX COPA: Shareholder to Receive Wind-Up Report on Oct. 10 SLZ CAPITAL: Shareholder to Receive Wind-Up Report on Sept. 23 SLZ OFFSHORE: Shareholder to Receive Wind-Up Report on Sept. 23 WHITING HOLDINGS: Shareholders' Final Meeting Set for Sept. 25 D O M I N I C A N R E P U B L I C XSTRATA PLC: 'Go Back to Canada', Bishop Tells Glencore * DOMINICAN REPUBLIC: Big Business Says No Wage Hike for Now G U Y A N A * GUYANA: Estimated External Debt Drops 1.6% at US$1.23 Billion M E X I C O AXTEL SAB: Fitch Assigns 'B+/RR3' Rating on USD150MM Sr. Notes AXTEL SAB: S&P Affirms 'B-' CCR & Cuts Rating on Sr. Notes to 'B-' P E R U MAESTRO PERU: Fitch Lowers IDR to 'B'; Outlook Negative P U E R T O R I C O AES PUERTO RICO: Fitch Maintains 'CC' Ratings on Watch Negative PMC MARKETING: Santa Rosa Mall's Bid for Summary Judgment Tossed PMC MARKETING: Downtown Dev't Bid for Summary Judgment Rejected PMC MARKETING: SUR CSM's Bid for Summary Judgment Tossed - - - - - ================================ A N T I G U A & B A R B U D A ================================ LIAT: Defends Flight Cancellations Record ----------------------------------------- The Daily Observer reports that LIAT, operating as Leeward Islands Air Transport, is defending its record in the face of fierce criticism from a Barbados based union general secretary. Dennis Clarke of the National Union of Public Workers in Barbados described LIAT as bedlam and called for a review of operations after getting stuck in Antigua when flying with LIAT, according to The Daily Observer. However, LIAT has defended its record, saying its flight cancellations are low as compared to the global standard, the report notes. In a statement, the airline said its average on time record over the last six years is 67 per cent, the report discloses. The Daily Observer notes that the airline added it has been forced to cancel only between one and two flights a day compared to a higher global average. The report relays that the airline said those delays and cancellations happen for many unavoidable reasons such as maintenance, bad weather, crew availability, airport handling, air traffic control, government clearance procedures and others. The airline said that going forward it is looking to simplify the schedule and reduce flights, which will help cut down on delays and cancellations, the report adds. About LIAT LIAT, operating as Leeward Islands Air Transport, is an airline headquartered on the grounds of V. C. Bird International Airport in Antigua. It operates high-frequency inter-island scheduled services serving 21 destinations in the Caribbean. The airline's main base is VC Bird International Airport, Antigua and Barbuda, with bases at Grantley Adams International Airport, Barbados and Piarco International Airport, Trinidad and Tobago. * * * As reported in the Troubled Company Reporter-Latin America on March 10, 2014, Caribbean360.com said that Leeward Islands Air Transport (LIAT) said it will take "decisive action" to deal with unprofitable routes as the Antigua-based airline seeks to make its operations financially variable. On Sept. 23, 2013, the TCRLA, citing Trinidad and Tobago Newsday, reported that there's much upheaval at the highest levels of LIAT -- the Board and the Executive. Following the sudden resignation of Chief Executive Officer Captain Ian Brunton, comes the news from highly reliable sources that long time chairman Jean Holder was all set to follow. David Evans replaced Mr. Brunton as chief executive officer. LIAT: Returns Commercial Department Jobs to Antigua --------------------------------------------------- The Daily Observer reports that changes to the Commercial Department in LIAT, operating as Leeward Islands Air Transport, are resulting in the return of six jobs at its Antigua office. Reports in the Barbados media late July claimed that LIAT's revenue management and scheduling departments were coming back to Antigua; after those same departments were relocated from Antigua last November, according to The Daily Observer. In a news release, LIAT announced that it was adjusting its commercial structure in order to focus more on revenue generation, the report notes. It appears as if the revenue and scheduling functions have been consolidated under the supervision of one executive, the report says. Lloyd Carswell has been hired as the airline's chief commercial officer on an interim basis for three to four months, the release noted, The Daily Observer relays. A director of commercial operations (DCO), who is responsible for revenue management, network planning and scheduling, distribution, and global sales, will report to Mr. Carswell. The DCO will be based in Antigua, while a director of commercial delivery (DCD), with responsibility for sales & marketing, customer experience, and cargo, will be based in Barbados. There have been rumors, stoked by Barbados Tourism Minister Richard Sealy, that more of LIAT's departments would be moved away from the headquarters in Antigua, The Daily Observer says. Former Aviation Minister John Maginley dismissed such a suggestion, saying that LIAT was "here to stay" for the foreseeable future, The Daily Observer notes. Mr. Maginley said the airline had presented the government with its plan to build a hangar to be used in Antigua for the next 20 years, the report adds. About LIAT LIAT, operating as Leeward Islands Air Transport, is an airline headquartered on the grounds of V. C. Bird International Airport in Antigua. It operates high-frequency inter-island scheduled services serving 21 destinations in the Caribbean. The airline's main base is VC Bird International Airport, Antigua and Barbuda, with bases at Grantley Adams International Airport, Barbados and Piarco International Airport, Trinidad and Tobago. * * * As reported in the Troubled Company Reporter-Latin America on March 10, 2014, Caribbean360.com said that Leeward Islands Air Transport (LIAT) said it will take "decisive action" to deal with unprofitable routes as the Antigua-based airline seeks to make its operations financially variable. On Sept. 23, 2013, the TCRLA, citing Trinidad and Tobago Newsday, reported that there's much upheaval at the highest levels of LIAT -- the Board and the Executive. Following the sudden resignation of Chief Executive Officer Captain Ian Brunton, comes the news from highly reliable sources that long time chairman Jean Holder is all set to follow. David Evans replaced Mr. Brunton as chief executive officer. LIAT: Former Director to Address Dismissal From Airline ------------------------------------------------------- The Daily Observer reports that George Arthurton, former Director of Flight Operations LIAT, operating as Leeward Islands Air Transport, is not taking his dismissal from the company lying down. Mr. Arthurton's lawyers confirmed for OBSERVER media that "he is taking further steps in the matter" but declined to divulge what action is being taken and on what grounds, according to The Daily Observer. The report notes that the regional carrier severed ties with Mr. Arthurton on July 25, 2014, months after an independent probe by a retired Judge found him guilty of endangering the airline's license. The action in question occurred last November when Mr. Arthurton reportedly ordered a test flight to be carried out by an unauthorised captain in breach of the company's Operations Manual, the report relates. This resulted in the Eastern Caribbean Civil Aviation Authority fining LIAT EC$30,000 for breaching regulations, the report notes. Retired Barbados Judge Leroy Inniss QC agreed with LIAT's pilots that Mr. Arthurton acted in a high-handed manner and invoked the authority of his office in many cases, rather than having regard to relevant rules and regulations, the report discloses. In terminating Mr. Arthuton, LIAT went a step further than the QC's recommendation to replace and if possible place him in a position where there is a minimal direct contact with pilots, the report adds. About LIAT LIAT, operating as Leeward Islands Air Transport, is an airline headquartered on the grounds of V. C. Bird International Airport in Antigua. It operates high-frequency inter-island scheduled services serving 21 destinations in the Caribbean. The airline's main base is VC Bird International Airport, Antigua and Barbuda, with bases at Grantley Adams International Airport, Barbados and Piarco International Airport, Trinidad and Tobago. * * * As reported in the Troubled Company Reporter-Latin America on March 10, 2014, Caribbean360.com said that Leeward Islands Air Transport (LIAT) said it will take "decisive action" to deal with unprofitable routes as the Antigua-based airline seeks to make its operations financially variable. On Sept. 23, 2013, the TCRLA, citing Trinidad and Tobago Newsday, reported that there's much upheaval at the highest levels of LIAT -- the Board and the Executive. Following the sudden resignation of Chief Executive Officer Captain Ian Brunton, comes the news from highly reliable sources that long time chairman Jean Holder is all set to follow. David Evans replaced Mr. Brunton as chief executive officer. ================= A R G E N T I N A ================= CLISA-COMPANIA: S&P Affirms 'CCC-' CCR & Rates $120MM Notes 'CCC-' ------------------------------------------------------------------ Standard & Poor's Ratings Services affirmed its 'CCC-' corporate credit and issue-level ratings on CLISA-Compania Latinoamericana de Infrastructura & Servicios S.A. (CLISA). At the same time, S&P assigned its 'CCC-' rating to the company's proposed three-year, up to $120 million senior unsecured notes. The outlook remains negative. "The rating affirmation follows CLISA's announcement to offer to exchange its $120 million note that amortizes in three equal annual installments starting Dec. 2014 for a senior unsecured notes bullet due 2017," said Standard & Poor's credit analyst Cecilia Fullone. In accordance with our criteria, we don't view the proposed exchange offer as a distressed restructuring. Although the 'CCC-' ratings indicate a realistic possibility of default over the next six to 12 months, in our view, CLISA will be able to pay the first installment of its $120 million note due Dec. 2014 with internal funds generation and loans with local banks. Additionally, the transaction, which will be carried out at par, shouldn't represent a material loss of value for current debt holders. The 'CCC-' foreign currency ratings on CLISA reflect S&P's belief that the entity would not be able to continue honoring its foreign currency obligations under potential restrictions to access to foreign currency and/or restrictions on the ability to transfer money abroad. The 'CCC-' local currency rating reflects S&P's belief that the company won't be able to generate enough local currency resources to honor all of their financial obligations under S&P's base-case scenario, which is heavily influenced by the sovereign's selective default and its implications on the economic environment that the entity will be facing in the near and intermediate term," S&P said. S&P's ratings on CLISA continue to reflect its assessment of its "vulnerable" business risk profile and "highly leveraged" financial risk profile. =========== B R A Z I L =========== OI SA: America Movil to Hold Talks Over Potential Tim Brasil Bid ----------------------------------------------------------------- TeleGeography News reports that Reuters said America Movil Chief Financial Officer Carlos Garcia Moreno said the Mexican telecoms holding group of the billionaire Carlos Slim, America Movil (AM), is planning to hold talks with Brazilian-owned telco Oi SA (Oi) concerning a possible joint bid for fellow operator TIM Participacoes (TIM Brasil). In an email, Mr. Moreno said: "Oi presented an offer for TIM and has said that they could include other operators,' adding, 'We have decided in principle to explore this option. We will be talking with them," according to TeleGeography News. Earlier, Mr. Moreno told Bloomberg that financing a deal for TIM Brasil -- the country's second-biggest wireless company by subscribers -- would not be a problem, although AM would likely incur some debt, TeleGeography News discloses. In August this year, TeleGeography's CommsUpdate that Oi SA was reviewing its options to acquire a USD8 billion stake in TIM Brasil as consolidation in the LatAm market ratchets up another notch. At the time, Oi SA instructed BTG Pactual to review its options 'with the purpose of enabling a viable proposal for the acquisition of the shares of TIM' indirectly held by Telecom Italia (TI), which owns about 67% of TIM Brasil, which has a market value of more than USD12 billion, the report notes. TeleGeography News discloses that Oi SA has launched the review as rivals Telefonica Brasil (Vivo) and TIM Brasil seek to enlarge their own circle through the purchase of broadband provider Global Village Telecom (GVT) from French media group Vivendi. The report relays that Oi SA is obviously keen not to be dwarfed by its rivals' acquisition efforts and sees a bid for TIM -- Brazil's second largest cellular operator -- as a means to achieve this. Oi SA, Telefonica, and AM have been discussing a potential joint bid for TIM Brasil since late last year, several sources told Reuters earlier this year, the report notes. However, the report discloses that any move to consolidate the mobile market would face intense scrutiny from antitrust regulators, which have expressed concern over any reduction in sector competition. The development comes as Portugal Telecom (PT) announced that its shareholders have voted to accept the revised terms of a merger with Oi SA, under which PT will have a smaller stake in their new joint company CorpCo, the report adds. 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 Sept. 1, 2014, 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. ========================== C A Y M A N I S L A N D S ========================== ATACAMA FINANCE: Shareholders' Final Meeting Set for Sept. 17 ------------------------------------------------------------- The shareholders of Atacama Finance Co. will hold their final meeting on Sept. 17, 2014, at 10:05 a.m., to receive the liquidator's report on the company's wind-up proceedings and property disposal. The company's liquidator is: Raul Arteaga Errazuriz c/o Barnaby Gowrie Empresa Nacional de Electricidad S.A. (ENDESA) Santa Rosa 76, Santiago Chile Telephone: +1 (345) 914 6365 CHATAIGNE LIMITED: Members' Final Meeting Set for Sept. 17 ---------------------------------------------------------- The members of Chataigne Limited will hold their final meeting on Sept. 17, 2014, to receive the liquidator's report on the company's wind-up proceedings and property disposal. 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 CONOCOPHILLIPS INDONESIA: Members' Final Meeting Set for Sept. 25 ----------------------------------------------------------------- The members of Conocophillips Indonesia SE Barakan Ltd. will hold their final meeting on Sept. 25, 2014, at 11:00 a.m., to receive the liquidator's report on the company's wind-up proceedings and property disposal. 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 ENERGEX CO: Shareholders' Final Meeting Set for Sept. 17 -------------------------------------------------------- The shareholders of Energex Co. will hold their final meeting on Sept. 17, 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: Raul Arteaga Errazuriz c/o Barnaby Gowrie Telephone: +1 (345) 914 6365 HBK CORPORATE: Shareholders' Final Meeting Set for Sept. 16 ----------------------------------------------------------- The shareholders of HBK Corporate Feeder Fund Ltd will hold their final meeting on Sept. 16, 2014, at 12:00 p.m., to receive the liquidator's report on the company's wind-up proceedings and property disposal. The company's liquidator is: HBK Capital Ltd. c/o CO Services Cayman Limited P.O. Box 10008 Willow House, Cricket Square Grand Cayman KY1-1001 Cayman Islands LANX OFFSHORE: Shareholder to Receive Wind-Up Report on Sept. 17 ---------------------------------------------------------------- The shareholder of Lanx Offshore Partners (QP), Ltd will receive on Sept. 17, 2014, at 10:00 a.m., the liquidator's report on the company's wind-up proceedings and property disposal. The company's liquidator is: Ogier c/o Jody Powery-Gilbert Telephone: (345) 815-1763 Facsimile: (345) 949-9877 PIP4PX COPA: Shareholder to Receive Wind-Up Report on Oct. 10 ------------------------------------------------------------- The shareholder of PIP4PX Copa Portum (Cayman) Ltd. will receive on Oct. 10, 2014, at 10:00 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 Jennifer Chailler Telephone: (345) 943-3100 SLZ CAPITAL: Shareholder to Receive Wind-Up Report on Sept. 23 -------------------------------------------------------------- The shareholder of SLZ Capital Opportunity Fund, Ltd. will receive on Sept. 23, 2014, at 10:15 a.m., the liquidator's report on the company's wind-up proceedings and property disposal. The company's liquidator is: Ogier c/o Joanne Huckle Telephone: (345) 815 1895 Facsimile: (345) 949 9877 SLZ OFFSHORE: Shareholder to Receive Wind-Up Report on Sept. 23 --------------------------------------------------------------- The shareholder of SLZ Capital Offshore Fund, Ltd will receive on Sept. 23, 2014, at 10:00 a.m., the liquidator's report on the company's wind-up proceedings and property disposal. The company's liquidator is: Ogier c/o Joanne Huckle Telephone: (345) 815 1895 Facsimile: (345) 949 9877 WHITING HOLDINGS: Shareholders' Final Meeting Set for Sept. 25 ---------------------------------------------------------------- The shareholders of Whiting Holdings Ltd. will hold their final meeting on Sept. 25, 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: 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 =================================== D O M I N I C A N R E P U B L I C =================================== XSTRATA PLC: 'Go Back to Canada', Bishop Tells Glencore ------------------------------------------------------- Dominican Today reports that hundreds of people are taking part in a rally in La Vega's Duarte Park to support the creation of Loma Miranda National Park. La Vega Diocese bishop Antonio Camilo hosts the event, and reaffirmed the church's commitment to defend the natural resources, according to Dominican Today. The senior prelate told president Danilo Medina that respect isn't the same as surrender to (Glencore) Falconbridge Dominicana, C. por A. ("Falcondo"), which derived from the Canadian based miner, Xstrata Nickel. "They have much land in Canada, they should go back there," the bishop said in the rally attended by activists, community organizations, environmentalists, political leaders, students and other supporters of the national park, the report notes. The report discloses that national police agents armed with weapons of various calibers and tear gas canisters have cordoned off the protest site, with no reports of confrontations at the gathering for the peaceful demonstration. About (Glencore) Falcondo 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. * DOMINICAN REPUBLIC: Big Business Says No Wage Hike for Now ------------------------------------------------------------ Dominican Today reports that National Business Council (Conep) Executive Director Rafael Paz called the labor unions' subpoena to force an increase in wages "untimely." Mr. Paz noted that wages were raised just last year and in that occasion, it was agreed that the next increase would take place in two years, according to Dominican Today. "Therefore the last review done last year was a 14% increase or nearly 40% above inflation and the accumulated consumer price index, then the law is that a review which should proceed is during the coming year, so if the National Wage Committee hasn't issued any call that's because it's being done been in compliance with the law," Mr. Paz said, the report relays. The business leader said that currently there are no conditions for an increase in salaries in the private sector, because that depends on inflation and companies cannot afford it now, the report notes. =========== G U Y A N A =========== * GUYANA: Estimated External Debt Drops 1.6% at US$1.23 Billion --------------------------------------------------------------- Caribbean360.com, citing a 2014 mid-year economic report, discloses that Guyana's external debt is estimated at US$1.23 billion, down 1.6 per cent over the 2013, figure. The report showed that the decline in the debt stock follows the conclusion of a fourth Debt Compensation Agreement with Venezuela under the Petro Caribe deal and the Wind-up Agreement of the Caribbean Community (CARICOM) Multilateral Clearing Facility (CMCF), during the first quarter of the year, according to Caribbean360.com. Caribbean360.com notes that under the fourth Debt Compensation Agreement with Venezuela, Guyana's debt was reduced by US$55.5 million corresponding to the value of rice and paddy shipped under the Guyana-Venezuela Rice Trade Agreement from October 2013 to February 2014. According to the economic report, under the CMCF Wind-up Agreement, Guyana secured additional enhanced Heavily Indebted Poor Countries (HIPC) debt relief through the cancellation of the outstanding US$35.9 million debt, Caribbean360.com relays. Caribbean360.com says that a government statement said that in addition, principal repayments to external creditors increased by 10.8 percent to US$16.9 million as at June. "Actual external debt service payments totaled US$24.8 million, which was 12.6 per cent greater than the US$22 million as at June 2013. The increased total debt service payments for the first half of 2014 is mainly the result of higher principal and interest payments to multilateral creditors," the statement said, Caribbean360.com relays. Caribbean360.com discloses that the statement said at the end of June 2014, Guyana's domestic debt stock stood at US$422.7 million which was 11.8 percent below the end 2013 position. The decline was primarily due to a reduction in Treasury bill issuance by the Bank of Guyana, Caribbean360.com notes. The economic report noted that as at June 2014, actual domestic debt service payments totaled three million US dollars, a significant reduction by 67.1 per cent compared with the US$9.2 million made during the first half of 2013, Caribbean360.com adds. =========== M E X I C O =========== AXTEL SAB: Fitch Assigns 'B+/RR3' Rating on USD150MM Sr. Notes -------------------------------------------------------------- Fitch Ratings has assigned a 'B+/RR3' rating to Axtel, S.A.B. de C.V's (Axtel)'s proposed USD150 million reopening of its senior secured notes due 2020. The proceeds will be used for general corporate purposes, mainly capex. With the proposed reopening, the 2020 notes will have outstanding approximately USD565 million, with USD545 million in senior secured notes and the remainder of senior convertible notes. These notes are secured by first priority liens on all capital stock of subsidiary guarantors and substantially all assets. The ratings reflect Axtel's improved liquidity by the successful recapitalization during 2013 through debt exchange and tower sales which resulted in lower leverage and extended debt maturities. The company's total net debt decreased to MXN7.3 billion as of June 30, 2014, which compares to MXN10.9 billion at year-end 2012. Axtel's ratings are tempered by the company's weak cash generation due to high investment to strengthen its enterprise business and to cope with the intense competitive environment. Fitch does not foresee any material improvement in free cash flow generation and the leverage ratio over the medium term. The stability of the ratings will hinge on Axtel's ability to sustain EBITDA growth from the data and internet revenue growth, mainly from the enterprise sector and fully mitigate pressures on the traditional fixed-voice service. The company improved its EBITDA in 2013 and the first half of 2014 (1H14), and the continued growth should help support its working capital requirement and capex without any significant need for further external financing. Fitch also views the passage of a new telecommunications law in Mexico to have some positive effects to Axtel's operation in the medium term. Improved Liquidity Position: Following Axtel's successful recapitalization in 2013, Fitch does not foresee any serious liquidity problem in the short to medium term as the company does not face any sizable debt maturity until 2017. The company's cash balance of MXN795 million as of June 30, 2014 as well as its committed credit facility worth of USD35 million (equivalent to approximately MXN450 million) should provide comfortable support in its liquidity management. As of June 30, 2014 the company's total debt was MXN8 billion, mainly comprised of MXN659 million and MXN1.3 billion of 2017 and 2019 unsecured notes, respectively, and MXN5.2 billion and MXN270 million of 2020 Secured notes, including convertible notes. Other debt included loans and financial leases. Following the reopening, the total debt will increase to about MXN9.9 billion. EBITDA Turnaround; Positive Revenue Mix Change Axtel resumed its EBITDA growth in 2013 and 1H14 from a year ago and this trend is likely to continue over the medium term driven by strong performance in the enterprise/public sector businesses. In addition, the company's focus on fiber-to-the-home (FTTH) with the recent launch of IPTV should enable steady subscriber and revenue growth in the broadband segment, while protecting existing residential customers. These segments should fully offset the ongoing revenue contraction in the traditional fixed-voice service, which has been tempered by competition and price pressure. Axtel's ongoing revenue mix change is positive with an increasing proportion from the enterprise segment, which has a stable demand outlook. The mass-market segment, where the competitive pressure remains high, now only represents about 30% of the total revenues. This will allow more stable cash generation from operations going forward. In 2013 and 1H14, Axtel generated EBITDA of MXN2.8 billion and MXN1.4 billion, respectively, which were 10% and 4% growth from a year ago, respectively. EBITDA margins are likely to trend down below 25%, however, as the proportion of higher gross margin businesses, mainly traditional fixed-voice services, will continue to fall. Weak Cash Generation to Continue: Fitch forecasts continued negative free cash flow generation over the medium term due to high capex. As the enterprise business represents Axtel's key growth area, the investments for infrastructure and equipment to support the business will remain high in 2H14 and 2015, about MXN2.8 billion per year which is higher than the 2013 level of MXN2.1 billion accounting for about 25% of total revenues. In addition, working capital requirement will continue to increase with a higher volume of business with the public entities, placing some pressure on cash flow from operations (CFFO). However, Fitch does not expect Axtel to need any further significant external financing as the proceeds from the proposed notes issuance, its CFFO, cash on hand, and credit facility should be able to cover it. Relatively Stable Leverage: Axtel's financial leverage is forecast to remain stable over the medium term with the adjusted leverage ratio slightly over 4.0x. The net debt level is likely to increase modestly due to negative FCF but it should be compensated by EBITDA improvement. As of June 30, 2014, total adjusted net debt to EBITDAR improved to 3.8x from 4.8x at end-2012, reflecting significant gross debt reduction from the recapitalization. This ratio is likely to reach around 4.2x following the proposed bond issuance. Excluding the off- balance sheet adjustment for rental expenses, the company's total net debt to EBITDA improved to 2.5x from 4.3x at end-2012 during the same period. The secured notes rated at 'B+/RR3' reflect good recovery prospects given default. These notes are secured by first priority liens on all capital stock of subsidiary guarantors and substantially all assets. Securities rated 'RR3' are considered good recovery prospects given default and have characteristics consistent with securities historically recovering 51% - 70% of current principal and related interest. Conversely, the remaining unsecured notes rated 'B-/RR5' are structurally subordinated to senior debt. 'RR5' rated securities have characteristics consistent with securities historically recovering 11% - 30% of current principal and related interest. RATING SENSITIVITIES A negative rating action could be considered in case of deterioration in liquidity, or weak performance due to competitive pressure leading to persistent negative FCF generation and higher leverage. A positive rating action is unlikely in the short term given the recent distressed debt exchange. However, positive factors to credit quality include improvement in the operating performance, margins, cash generation, and competitive position. Fitch currently rate Axtel as follows: -- Foreign and Local Currency Issuer Default Ratings 'B'/Outlook Stable; -- National Long-term Ratings 'BB-(mex)'/Outlook Stable; -- Senior secured notes due 2020 'B+/RR3'; -- Senior secured convertible notes due 2020 'B+/RR3'; -- Senior unsecured notes due 2019 'B-/RR5'; -- Senior unsecured notes due 2017 'B-/RR5'. AXTEL SAB: S&P Affirms 'B-' CCR & Cuts Rating on Sr. Notes to 'B-' ------------------------------------------------------------------ Standard & Poor's Ratings Services affirmed its 'B-' long-term corporate credit rating on Axtel S.A.B. de C.V. At the same time, S&P lowered its issue-level rating on Axtel's existing senior secured notes due 2020 to 'B-' from 'B' and revised its recovery rating to '3' from '2', indicating S&P's expectation of substantial recovery (70%-90%) for creditors in the event of payment default. The revision reflects higher outstanding senior secured debt at default. S&P's ratings on Axtel continue to reflect the company's "vulnerable" business risk profile and "highly leveraged" financial risk profile. "Axtel plans to use proceeds from the add-on for capital expenditures, working capital, and general corporate purposes," said Standard & Poor's credit analyst Luisa Vilhena. ======= P E R U ======= MAESTRO PERU: Fitch Lowers IDR to 'B'; Outlook Negative ------------------------------------------------------- Fitch Ratings has downgraded Maestro Peru S.A.'s (Maestro) ratings as follows: -- Foreign currency Issuer Default Rating (IDR) to 'B' from 'B+'; -- Local currency IDR to 'B' from 'B+'; -- Senior unsecured notes to 'B/RR4' from 'BB-/RR3'. The Rating Outlook remains Negative. The ratings downgrade reflects the deterioration in Maestro's credit metrics. The company's weak operational results and negative free cash flow (FCF) trend during the last 12-month period (LTM) ended June 30, 2014 has resulted in Maestro's total adjusted debt-to-EBITDAR consistently above 5x, together with low liquidity levels at June 30, 2014. The Negative Outlook reflects credit concerns regarding the company's capacity to reverse the negative trend in margins, leverage, and liquidity during the next 12-month. The ratings incorporate Maestro's leading market position, high leverage and low liquidity. The ratings also consider the sensitivity of the construction and home improvements industry to economic cycles. The 'B/RR4' rating of the company's unsecured public debt reflects average recovery prospects in the event of a default. KEY RATING DRIVERS Low Liquidity: Maestro's liquidity is viewed as weak considering its cash level relative to its short-term debt, declining interest coverage, and the FCF generation trend. The company's cash and equivalents were USD5.8 million while its short-term debt was USD16.4 million at June 30, 2014. Maestro's interest coverage ratio, measured as EBITDAR/(interest expenses plus rents), has declined reaching 2.5x, 1.8x, and 1.4x during 2012, 2013, and LTM June 2014, respectively. Maestro generated cash flow from operations (CFFO) of USD16.2 million during the LTM ended June 30, 2014. FCF was negative USD5.8 million after capital expenditures (capex) of USD22 million. The FCF calculation considers CFFO minus capex. The company has adjusted down its 2014 capex plan, and no store openings are scheduled during this year. During 2015, Maestro plans to resume new openings but it will depend on the sales of non-core fixed assets. Margins Decline: During 2013 and LTM June 2014, the company's EBITDA margins declined to 8.2% and 7.5%, respectively, from a stable 9% in 2011 and 2012. EBITDAR margins which considered rentals - USD8.3 million in LTM June 2014 and USD7.3 million in June 2013 - were 9.0% and 9.5%, respectively. Maestro's revenues of USD543 million in 2013 increased 15.4% compared to 2012, but for LTM June 2014 remained around USD544 million. Lower sales growth and higher operational expenses as seven new stores were opened during 2013 explained the margin reductions. Due to the economic slowdown and cannibalism from new stores, same store sales (SSS) fell 2.9% during the first semester of 2014. Adjusted Leverage Above Expectations: Maestro's gross adjusted leverage, measured by total adjusted debt divided by EBITDAR, and net adjusted leverage ratios were 5.9x and 5.8x for LTM June 2014, respectively. This compared negatively with gross adjusted leverage levels of 4.5x and 5.5x in December 2012 and December 2013, respectively. The company's total adjusted debt was approximately USD290 million at the end of June 2014. This debt includes USD232 million in on-balance-sheet debt, mostly compounded by the USD200 million unsecured notes issued in September 2012. Total off-balance-sheet debt of USD58 million is calculated by adjusting by 7x the company's rental payments of USD8.3 million during LTM June 2014. Covenants Restrict Additional Indebtedness but Carveouts: The company's USD200 million bond indenture considers a limit on additional indebtedness of a consolidated debt-to-consolidated EBITDA ratio no greater than 4.5x prior to year two after issuance, 4x in year two and prior to year three, and 3.5x thereafter. The indenture also includes carveouts that allow for additional new debt - up to USD40 million - despite being above the maximum financial leverage covenant. As of June 2014 the company's financial leverage ratio was 5.3x, above the covenant maximum limit, and the additional new debt incurred was S/.51.8 million (USD20 million) below the maximum allowed for additional indebtedness (USD40 million). Market Position Incorporated: The ratings factor in Maestro's business position as a leading local player in the Peruvian retail home improvement sector. Maestro is one of the two largest modern home improvement retailers in Peru. The company has an estimated market share of 40% of the modern retail channel. Maestro maintains an established and recognized brand and is well positioned as a low- price specialist. Maestro's ratings positively consider the solid medium-term fundamentals of Peru's home improvement industry reflected in increasing purchasing power of households and the industry's low penetration. RATING SENSITIVITIES Negative Rating Action: A combination of the following would result in a rating downgrade: further deterioration of the company's gross adjusted leverage and interest coverage due to poor operational performance. Positive Rating Action: A combination of the following would result in revising the Negative Outlook and affirming the ratings: stable operational performance reflecting improvement in SSS combined with a balance between capex, liquidity and capital structure resulting in the company's total gross adjusted leverage in the range of 5-5.5x and interest coverage in the range of 1.5x to 1.75x. ==================== P U E R T O R I C O ==================== AES PUERTO RICO: Fitch Maintains 'CC' Ratings on Watch Negative --------------------------------------------------------------- Fitch Ratings has maintained the Rating Watch Negative on the following AES Puerto Rico L.P. (AES PR) securities issued through Puerto Rico Industrial, Tourist, Educational, Medical & Environmental Control Facilities Financing Authority: -- $161.87 million cogeneration facility revenue bonds, series A (tax-exempt bonds) due June 2026 at 'CC'; -- $33.1 million cogeneration facility revenue bonds, series B (taxable bonds) due June 2022 at 'CC'. The rating affirmation reflects Fitch's view of the credit quality of Puerto Rico Electric Power Authority (PREPA). PREPA is the revenue counterparty under AES PR's power purchase agreement and its ratings at 'CC', Rating Watch Negative constrain the rating of AES PR. PMC MARKETING: Santa Rosa Mall's Bid for Summary Judgment Tossed ---------------------------------------------------------------- Bankruptcy Judge Brian K. Tester rejected a motion for summary judgment filed by the defendant in the avoidance action, NOREEN WISCOVITCH RENTAS CHAPTER 7 TRUSTEE, Plaintiff, v. SANTA ROSA MALL LLC, Defendant(s), Adv. Proc. No. 12-00167 (Bankr. D.P.R.). Ms. Rentas is the Chapter 7 Trustee for PMC Marketing Corp. On March 2, 2012, the Chapter 7 Trustee filed an adversary proceeding to recover $32,171.90 against Santa Rosa Mall. The Defendant answered, claiming that the three rent payments made by the Debtor on Jan. 15, 2009, February 13, 2009, and February 28, 2009, all occurred during the ordinary course of business and thus cannot be returned to the Debtor's estate. A copy of the Court's Sept. 5, 2014 Opinion and Order is available at http://is.gd/s4j7E4from Leagle.com. PMC Marketing Corp. filed a Chapter 11 bankruptcy petition on March 18, 2009 (Bankr. D.P.R. Case No. 09-02048). The case was converted into a Chapter 7 proceeding on May 19, 2010. On May 20, 2010, Noreen Wiscovitch-Rentas was appointed the Chapter 7 trustee. PMC MARKETING: Downtown Dev't Bid for Summary Judgment Rejected --------------------------------------------------------------- Bankruptcy Judge Brian K. Tester denied a motion for summary judgment filed by the defendant in the avoidance action, NOREEN WISCOVITCH RENTAS CHAPTER 7 TRUSTEE, Plaintiff, v. DOWNTOWN DEVELOPMENT CORP, Defendant(s), Adv. Proc. No. 12-00147 (Bankr. D. P.R.). Ms. Rentas is the Chapter 7 Trustee for PMC Marketing Corp. On March 2, 2012, the Chapter 7 Trustee filed an adversary proceeding to recover $41,361.02 against Downtown Development. The Defendant filed a Motion to Dismiss for a more definitive statement on June 4, 2012. The Court denied that motion on Aug. 13, 2012. A copy of the Court's Sept. 5, 2014 Opinion and Order is available at http://is.gd/EP0lwMfrom Leagle.com. PMC Marketing Corp. filed a Chapter 11 bankruptcy petition on March 18, 2009 (Bankr. D.P.R. Case No. 09-02048). The case was converted into a Chapter 7 proceeding on May 19, 2010. On May 20, 2010, Noreen Wiscovitch-Rentas was appointed the Chapter 7 trustee. PMC MARKETING: SUR CSM's Bid for Summary Judgment Tossed -------------------------------------------------------- Bankruptcy Judge Brian K. Tester denied a motion for summary judgment filed by the defendant in the avoidance action, NOREEN WISCOVITCH RENTAS CHAPTER 7 TRUSTEE, Plaintiff, v. SUR CSM PLAZA INC, Defendant(s), Adv. Proc. No. 12-00094 (Bankr. D. P.R.). Ms. Rentas is the Chapter 7 Trustee for PMC Marketing Corp. On March 2, 2012, the Chapter 7 Trustee filed an adversary proceeding to recover $32,171.90 against SUR CSM Plaza. The Defendant answered the Trustee's adversary proceeding on April 5, 2012, claiming that the rent payments made by the Debtor occurred during ordinary course of business and thus cannot be returned to the Debtor's estate. A copy of the Court's Sept. 5, 2014 Opinion and Order is available at http://is.gd/wA7LKBfrom Leagle.com. PMC Marketing Corp. filed a Chapter 11 bankruptcy petition (Bankr. D.P.R. Case No. 09-02048) on March 18, 2009. The case was converted into a Chapter 7 proceeding on May 19, 2010. On May 20, 2010, Noreen Wiscovitch-Rentas was appointed the Chapter 7 trustee. *********** 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. 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