/raid1/www/Hosts/bankrupt/TCRLA_Public/141106.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
Thursday, November 6, 2014, Vol. 15, No. 220
Headlines
A R G E N T I N A
ARGENTINA: Black Market Peso Rallies to Strongest in Two Months
TELECOM ARGENTINA: Posts ARS2,684M Net Income for 9-Month Period
B R A Z I L
BANCO GMAC: Moody's Upgrades Deposit Ratings to Ba2
MARFRIG GLOBAL: Fitch Raises IDR to 'B+'; Outlook Stable
OI SA: Apax Said to Prepare US$8.8BB Bid for Oi Portugal Assets
PETROLEO BRASILEIRO: Said to Win Support to Raise Gasoline Prices
SIFCO SA: Noteholders Fail to Stymie Ch. 15 Recognition
C A Y M A N I S L A N D S
ARCHER CAPITAL: Shareholders Receive Wind-Up Report
AMBI INVESTMENT: Placed Under Voluntary Wind-Up
IPGIS CENTRAL: Commences Liquidation Proceedings
KINESIS GLOBAL: Shareholders Receive Wind-Up Report
KUWAIT RESORTS: Shareholder to Receive Wind-Up Report on Nov. 7
LIONGATE PBA: Commences Liquidation Proceedings
OFFSHORE ASSET: Shareholder to Receive Wind-Up Report on Nov. 14
REDWOOD REINSURANCE: Commences Liquidation Proceedings
SUTHERLAND FUND: Shareholder to Receive Wind-Up Report on Nov. 17
TRITTON DEVELOPMENT: Commences Liquidation Proceedings
J A M A I C A
ACCESS FINANCIAL: Affected by Jamaica Gov't Late Payments
M E X I C O
EMPRESAS ICA: Oil Platform Accord With Shell Signals Energy Shift
FIDEICOMISO MAQUINARIA: S&P Cuts Rating on US$160MM Notes to D
GRUPO FERTINAL: S&P Lowers CCR to 'CCC-'; Outlook Remains Negative
MONTERREY, MEXICO: Moody's Affirms Ba2 Issuer Rating
S U R I N A M E
SURINAME: Macroeconomic Conditions Weakens in 2013, IMF Says
- - - - -
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A R G E N T I N A
=================
ARGENTINA: Black Market Peso Rallies to Strongest in Two Months
---------------------------------------------------------------
Charlie Devereux at Bloomberg News reports that Argentina's peso
rose to a two-month high in black-market trading after the
government began a crack down on illegal street transactions in
central Buenos Aires.
The peso strengthened 2.4 percent to 13.59 per dollar at 2:43 p.m.
on Nov. 5 in Buenos Aires, its strongest level since Aug. 22, says
the report. The gap with the official exchange rate of ARS8.5077
per dollar, which Argentines need government permission to access,
has narrowed to 59 percent from 89 percent on Sept. 24, Bloomberg
News relates.
The report discloses that the black market peso has strengthened
15 percent since the appointment of central bank President
Alejandro Vanoli on Oct. 1, who took office vowing to strictly
enforce foreign exchange rules.
Argentines turn to the black market to buy dollars to evade limits
in the official market and avoid registering their purchases with
tax authorities, Bloomberg News relays.
A crackdown on illegal currency operations "can in some
circumstances in the short-term close the exchange rate gap and
calm tensions," said Gustavo Quintana, a currency trader at
Rabello y Cia SA in Buenos Aires, Bloomberg News notes. "But
these are short-term effects and while the causes aren't fixed the
black market isn't going to disappear."
Argentines also are buying fewer dollars as high inflation and
lackluster growth crimps cash available for saving, Mr. Quintana
said, Bloomberg News relays. Some Argentines who can buy dollars
at the official rate are then turning around and selling the
currency on the black market for a quick profit, according to Mr.
Quintana added, notes the report.
"You can buy on the official market at the beginning of the month
and when you need cash sell on the parallel market," Bloomberg
News quoted Mr. Quintana as saying. "It takes away demand from
the black market and at the same time creates a greater supply of
dollars."
* * *
TCRLA on Aug. 1, 2014, reported that Argentina defaulted on some
of its debt late July 30 after expiration of a 30-day grace period
on a US$539 million interest payment. Earlier that day, talks
with a court-appointed mediator ended without resolving a standoff
between the country and a group of hedge funds seeking full
payment on bonds that the country had defaulted on in 2001. A
U.S. judge had ruled that the interest payment couldn't be made
unless the hedge funds led by Elliott Management Corp., got the
US$1.5 billion they claimed. The country hasn't been able to
access international credit markets since its US$95 billion
default 13 years ago.
As a result, reported the TCR-LA on Aug. 1, Standard & Poor's
Ratings Services lowered its unsolicited long-and short-term
foreign currency sovereign credit ratings on the Republic of
Argentina to selective default ('SD') from 'CCC-/C'.
The TCR-LA, on Aug. 4, 2014, also reported that Fitch Ratings
downgraded Argentina's Foreign Currency Issuer Default Rating
(IDR) to 'RD' from 'CC', and its Short-Term Foreign Currency
Issuer Default Rating to 'RD' from 'C'.
Meanwhile, Moody's Investors Service affirmed Argentina's Caa1
issuer rating, which also applies to domestic law bonds, confirmed
the (P)Caa2 rating for its foreign law bonds, and affirmed the Ca
rating on the original defaulted bonds. The long-term issuer
rating was placed on negative outlook, reported the TCR-LA on Aug.
5, 2014.
On Aug. 8, 2014, the TCR-LA reported that Moody's Latin America
Agente de Calificacion de Riesgo affirmed the deposit, debt,
issuer and corporate family ratings on Argentina's banks and
financial institutions, both on the global and national scales.
The outlook on these ratings has been changed to negative from
stable. At the same time, the rating agency has affirmed the
banks' Caa2 foreign-currency deposit ratings and Not-
Prime short-term ratings. The banks' standalone E financial
strength ratings corresponding to caa1 baseline credit assessments
(BCA) have also been affirmed.
The TCR-LA, On Aug. 6, 2014, also reported that 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.
On Nov. 3, 2014, the TCR-LA reported that Fitch Ratings downgraded
Argentina's rating on Par Bonds issued under Foreign Law to 'D'
from 'C' as Argentina has not been able to cure the missed coupon
payments on its par bonds issued under foreign law after the
expiration of the 30-day grace period on Oct. 30. According to
Fitch's criteria, this constitutes an event of default and Fitch
has downgraded the affected securities to 'D'. In addition, Fitch
has affirmed:
-- Foreign Currency Issuer Default Rating (IDR) at 'RD';
-- Local Currency IDR at 'CCC';
-- Short-term Foreign Currency IDR at 'RD';
-- Country Ceiling at 'CCC'.
-- Performing Foreign Law Exchanged Securities (Global 17) at
'C';
-- Local Currency exchanged bonds under Argentine Law at 'CCC';
-- Foreign and Local Currency non-exchanged securities under
Argentine Law at 'CCC';
-- Discount Bonds issued under Foreign Law at 'D'.
TELECOM ARGENTINA: Posts ARS2,684M Net Income for 9-Month Period
----------------------------------------------------------------
Telecom Argentina SA disclosed a net income of ARS2,684 million
for the nine-month period ended September 30, 2014, or +13.7% when
compared to the same period last year. Net income attributable to
Telecom Argentina amounted to ARS2,644 million (+13.8% vs. 9M13).
A full text copy of the company's financial results is available
free at:
http://is.gd/cPcBlF
Headquartered in Buenos Aires, Telecom Argentina S.A. --
http://www.telecom.com.ar/index-flash.html-- provides telephone-
related services, such as international long-distance service and
data transmission and Internet services, and through its
subsidiaries, wireless telecommunications services, international
wholesale services and telephone directory publishing.
As reported by the Troubled Company Reporter-Latin America on
May 16, 2014, Moody's Latin America Calificadora de Riesgo has
assigned a first time Corporate Family Rating of Caa1 on its
Global Scale and Ba1.ar on its Argentina National Scale to Telecom
Argentina S.A. (Telecom). The outlook is stable.
===========
B R A Z I L
===========
BANCO GMAC: Moody's Upgrades Deposit Ratings to Ba2
---------------------------------------------------
Moody's Investors Service has affirmed the standalone bank
financial strength ratings (BFSR) of Banco GMAC S.A. and Banco
Ford S.A., and maintained their respective baseline credit
assessments (BCA) at ba3. At the same time, Moody's affirmed the
issuer and corporate family ratings of Companhia de Credito,
Financiamento e Investimento RCI Brasil (RCI Brasil), and
maintained its BCA at ba3. Moody's also upgraded the long-term
global local currency and foreign currency deposit ratings of
Banco GMAC to Ba2, from Ba3, and the long-term global local
currency and foreign currency deposit ratings of Banco Ford to
Ba1, from Ba2. The short-term global local currency and foreign
currency deposit ratings of both banks remained at Not Prime. In
addition, Moody's upgraded Banco GMAC's Brazilian national scale
deposit ratings to A1.br and BR-1, from A3.br and BR-2, long- and
short-term, respectively, and Banco Ford's long-term Brazilian
national scale deposit rating to Aa1.br, from Aa2.br. Banco Ford's
short-term Brazilian national scale deposit rating remained at BR-
1. Moody's also affirmed RCI Brasil's long-term Brazilian national
scale issuer rating at Aa1.br. The outlook on all ratings remains
stable.
List Of Affected Ratings
The following ratings were affirmed by today's rating action:
Banco GMAC S.A.:
Bank financial strength rating of D-, equivalent to a baseline
credit assessment (BCA) of ba3, with stable outlook
Short-term global local-currency deposit rating of Not Prime
Short-term foreign-currency deposit rating of Not Prime
Banco Ford S.A.:
Bank financial strength rating of D-, equivalent to a BCA of ba3,
with stable outlook
Short-term global local-currency deposit rating of Not Prime
Short-term foreign-currency deposit rating of Not Prime
Short-term Brazilian national scale deposit rating of BR-1
Companhia de Credito, Financiamento e Investimento RCI Brasil
Long-term global local currency issuer rating of Ba1, with stable
outlook
Long-term Brazilian national scale local currency issuer rating of
Aa1.br, with stable outlook
Long-term global local currency corporate family rating of Ba1,
with stable outlook
The following ratings were upgraded by today's rating action:
Banco GMAC S.A.:
Long-term global local-currency deposit rating: to Ba2, from Ba3,
with stable outlook
Long-term foreign-currency deposit rating: to Ba2, from Ba3, with
stable outlook
Long-term Brazilian national scale deposit rating: to A1.br, from
A3.br, with stable outlook
Short-term Brazilian national scale deposit rating: to BR-1, from
BR-2
Banco Ford S.A.:
Long-term global local-currency deposit rating: to Ba1, from Ba2,
with stable outlook
Long-term foreign-currency deposit rating: to Ba1, from Ba2, with
stable outlook
Long-term Brazilian national scale deposit rating: to Aa1.br, from
Aa2.br, with stable outlook
Ratings Rationale
Affirmation Of Standalone Ratings
In affirming the standalone ratings of Banco GMAC and Banco Ford
at D-/ba3 and maintaining the baseline credit assessment of RCI
Brasil at ba3, Moody's acknowledges these lenders' ability to
maintain loan origination and adequate financial metrics despite
the decline in car production and sales during the first half of
2014. By virtue of their role as captive car lenders, Banco GMAC
and RCI Brasil have benefited from car sales campaigns by the
respective manufacturers, which resulted in a boost to loan
origination. In the 12 months to June 2014, Banco GMAC grew loans
by 41.5%, while Banco Ford and RCI Brasil increased lending by
21.5% and 16%, respectively, a contrast to the 9.1% reduction in
car sales overall.
Moody's also notes that loan delinquencies reported by Banco GMAC,
Banco Ford and RCI Brasil remain comfortably below the average for
the banking system's vehicle financing portfolios. This
performance reflects the conservative loan underwriting standards
of the specialized vehicle lenders, the high quality of their
targeted borrowers, and the stronger credit profile of their loan
books, which are mainly composed of lower-risk new car financings.
Their close relationship with authorized dealers and the recent
tightening of their credit underwriting requirements also help
maintain their asset quality. Other important risk mitigants
include the lenders' solid capital and reserve buffers that are
available to absorb potentially higher losses.
Moody's said that the affirmation of Banco GMAC's D- standalone
rating incorporates its strong market positioning as the lead loan
originator of General Motors' financed sales in Brazil and as the
largest operation among Moody's rated Brazilian vehicle lenders.
The affirmation also reflects the bank's diverse funding
structure, which includes a high proportion of loan sales
agreements with other financial institutions and receivables funds
(FIDCs), because of the low risk and good quality of the loan
book. While higher loan sales to other financial institutions in
the first half of 2014 led the bank's profits down in the period,
this effect was balanced by its consistent and robust loan
origination.
Banco Ford is engaged in financing the acquisition of new cars and
trucks by Ford's authorized dealers, and is focused solely on the
wholesale segment. Because of its narrow product base, the bank
has a less diversified revenue structure than other vehicle
lenders. However, its lean operations have benefited its
profitability, particularly when compared with peers'. Its close
relation with authorized Ford dealers has supported its low
delinquency levels, and together with its above average
capitalization, also support the affirmation of its D- standalone
rating.
RCI Brasil's good capitalization and good asset quality support
the maintenance of the company's ba3 standalone BCA. The captive
finance operation of automakers Renault and Nissan has improved
its funding diversification by tapping into the domestic debt
market through issuance of letras financeiras, instruments with
longer tenors than time deposits. While the larger volume of debt
issued in the first half of the year reduced the company's
profitability, it remained adequate because of strong loan
generation.
Moody's said it does not expect changes in the business model
employed by vehicle lenders despite present contraction of car
production. They will continue to be specialized, mono-product
lenders, with close ties to automakers. Their standalone ratings
continue to be constrained by limited revenue diversification, due
to their narrow product mix, comprised either of auto loans to
individuals or floor-plan financing to car dealers, or both. Their
wholesale funding structures with high participation of interbank
and/or time deposits, which pressures funding costs upwards, are
also a key constraint to the standalone ratings.
Upgrade Of Banco GMAC's And Banco Ford's Supported Ratings
In upgrading Banco GMAC's deposit ratings to Ba2, from Ba3,
Moody's acknowledges that resources made available by the
automaker General Motors Company (Ba1/STA) to the bank's parent
General Motors Financial Company, Inc (ba3, Ba1/STA) could be
extended to the Brazilian subsidiary. As such, the additional
notch applied to Banco GMAC's deposit ratings reflect the support
capacity of the automaker transmitted through the bank's parent.
The upgrade of Banco Ford's deposit ratings to Ba1, from Ba2, also
reflects the strong relation between its US-based parent Ford
Motor Credit Company LLC (ba2, Baa3/STA) and the automaker Ford
Motor Company (Baa3/STA). This support is backed by a keep-well
agreement established between the two parties. Similar to Banco
GMAC's ratings, the deposit ratings of Banco Ford benefit from an
uplift of one notch that reflects the additional capacity of
support made available to the bank.
Methodology Used & Last Rating Actions
The last rating action on Banco Ford was on 26 June 2014, when
Moody's assigned a BFSR of D-, equivalent to a ba3 BCA, to Banco
Ford. At the same time, Moody's assigned long- and short-term
global local- and foreign-currency deposit ratings of Ba2 and Not-
Prime, respectively, as well as long- and short-term national
scale ratings of Aa2.br and BR-1, respectively, to Banco Ford. The
outlook on all ratings was stable.
The last rating action on Banco GMAC was on 10 October 2013, when
Moody's affirmed Banco GMAC's BFSR at D-, equivalent to a ba3 BCA.
Moody's also affirmed the local and foreign currency deposit
ratings at Ba3 and Not Prime, long- and short-term, respectively,
and the national scale deposit ratings at A3.br and BR-2, long-
and short-term, respectively. The outlook on all ratings was
stable.
The last rating action on RCI Brasil occurred on 26 October 2012,
when Moody's affirmed RCI Brasil's long-term global local currency
issuer rating at Ba1 and the local currency issuer rating on the
Brazilian national scale at Aa1.br. Moody's assigned a long-term
local currency corporate family rating (CFR) of Ba1 to RCI Brasil
and also maintained the company's BCA at ba3. All ratings had a
stable Outlook.
The principal methodology used in rating Banco GMAC and Banco Ford
was Global Banks published in July 2014.
The principal methodology used in rating RCI Brasil was the
Finance Company Global Rating Methodology published in March 2012.
Moody's National Scale Ratings (NSRs) are intended as relative
measures of creditworthiness among debt issues and issuers within
a country, enabling market participants to better differentiate
relative risks. NSRs differ from Moody's global scale ratings in
that they are not globally comparable with the full universe of
Moody's rated entities, but only with NSRs for other rated debt
issues and issuers within the same country. NSRs are designated by
a ".nn" country modifier signifying the relevant country, as in
".za" for South Africa. For further information on Moody's
approach to national scale credit ratings, please refer to Moody's
Credit rating Methodology published in June 2014 entitled "Mapping
Moody's National Scale Ratings to Global Scale Ratings".
Banco Ford S.A. is headquartered in Sao Bernardo do Campo, Brazil.
As of 30 June 2014, Banco Ford had total assets of BRL1.46 billion
($661 million) and shareholders' equity of BRL292 million ($132
million).
Banco GMAC is headquartered in Sao Paulo, Brazil. As of 30 June
2014, Banco GMAC had total assets of BRL13.7 billion ($6.2
billion) and shareholders' equity of BRL1.4 billion ($657
million).
RCI Brasil is headquartered in Curitiba, Brazil. As of 30 June
2014, the finance company had total assets of approximately BRL8.8
billion ($4.0 billion) and equity of BRL1.2 billion ($534
million).
MARFRIG GLOBAL: Fitch Raises IDR to 'B+'; Outlook Stable
--------------------------------------------------------
Fitch Ratings has upgraded Marfrig Global Food S.A.'s (Marfrig)
Issuer Default Rating (IDR) and Senior Unsecured Notes to 'B+'
from 'B'. Fitch has also upgraded the foreign currency (FC) IDR
of Marfrig Overseas Ltd. This IDR has subsequently been withdrawn
by Fitch because Marfrig Overseas is a special purpose company and
the ratings of this entity are no longer considered by Fitch to be
relevant to the agency's coverage. In addition to these rating
actions, Fitch has upgraded Marfrig's National Scale rating to
'BBB+(bra)' from 'BBB(bra)'.
The corporate Rating Outlook is Stable.
The upgrade reflects Marfrig's lower leverage and adequate
liquidity position. The upgrade incorporates Fitch's expectation
that the company will generate positive free cash flow (FCF) in
the next two years thanks to increased EBITDA, lower interest
expenses and better working capital management. Fitch expects
Marfrig to report strong performance in 2014 thanks to positive
fundamental of the beef industry, robust international demand, and
lower grain costs.
KEY RATING DRIVERS:
Improving Credit Metrics:
Fitch expects Marfrig Global Foods S.A.'s (Marfrig) net
debt/EBITDA ratio to fall toward 4x by 2015 from 5.2x at year-end
2013. The improved metrics are partially related to the
divestment of the Seara Brasil and Zenda leather businesses to JBS
S.A. for BRL5.8 billion in 2013. Future debt reduction should be
achieved by better asset and logistics management, a reduction in
capex, lower working capital requirements and decreased interest
expense.
Simplified Business Profile:
Positive industry fundamentals, which include relatively low grain
prices, and a focus on operational improvements should spur
organic cash flow growth. Marfrig is implementing a strategy
called 'Focus to Win,' which aims to improve profitability and
revenues with the focus of its commercial strategy on the rapid
development of the food service and retail channels. Marfrig has
simplified its organizational structure and decreased execution
risk with the divestment of Seara Brazil.
No Major Acquisitions Anticipated:
Fitch does not foresee any major acquisitions for Marfrig in the
next 18 months, as the company's management is focused on
deleveraging its balance sheet, improving cash flow generation and
reducing interest expenses through liabilities management. Key
initiatives will be the optimization of plants and distribution by
Marfrig Beef, the geographic expansion of Keystone and the growth
of Moy Park through multiprotein retail sales in markets across
the U.K. and continental Europe.
Strong Diversification:
Marfrig's ratings incorporate its broad product and geographic
diversification which helps to reduce risks related to disease,
trade restrictions and currency fluctuation. The company is
structured into three business units: Marfrig Beef (46% of
revenues), the world's third largest beef producer; Moy Park
(26%), one of the largest poultry-based processed product
suppliers in the UK; and Keystone Foods (28%), which processes
food for major restaurant chains (notably McDonald's).
RATING SENSITIVITIES
A negative rating action could be precipitated by Marfrig's
inability to generate positive FCF over the next 24 months and to
maintain net leverage above 4.5x on a sustainable basis.
An upgrade could result from the company building a track record
of generating positive FCF, demonstrating the resilience of its
group's operating margin as a result of its business
diversification, while a consistent net leverage ratio near or
below 3.5x also would be viewed positively.
Fitch has taken these rating actions:
Marfrig:
-- Foreign & local currency IDR upgraded to 'B+' from 'B';
-- National scale rating upgraded at 'BBB+ (bra)' from 'BBB
(bra)'.
Marfrig Holdings Europe B.V.:
-- Foreign currency IDR upgraded to 'B+' from 'B';
-- Notes due 2017, 2018, 2019, 2021 upgraded to 'B+/RR4' from
'B/RR4'.
Marfrig Overseas Ltd:
-- Foreign currency IDR Upgraded to 'B+' from 'B' and
Withdrawn;
-- Notes due 2016, 2020 upgraded to 'B+/RR4' from 'B/RR4'.
OI SA: Apax Said to Prepare US$8.8BB Bid for Oi Portugal Assets
---------------------------------------------------------------
Cristiane Lucchesi and Christiana Sciaudone at Bloomberg News
report that Apax Partners LLP is planning to offer about EUR7
billion (US$8.8 billion) for Oi SA's assets in Portugal in
partnership with CVC Capital Partners Ltd. and Bain Capital
Partners LLC, according to a person with direct knowledge of the
matter.
The private-equity fund is looking at the company's numbers in
detail with the aim to match a proposal made by billionaire
Patrick Drahi on Nov. 2, the person said, asking not to be
identified because the discussions are private, according to
Bloomberg News. The funds are betting the Portuguese government
would be in favor of them, the person said, Bloomberg News
relates. The firms are considering raising debt to help finance
the transaction, the person added.
Bloomberg News notes that Oi SA will wait to get more offers for
its Portuguese assets before deciding what to do, another three
people said.
According to the report, Altice SA (ATC), Drahi's Luxembourg-based
cable holding company, would finance the EUR7 billion bid with
cash and debt, it said on Nov. 2. The price includes two sets of
EUR400 million-euro payments that will depend on future revenue
and cash flow, Bloomberg News says.
Altice SA's offer doesn't include the EUR897 million in short-term
debt defaulted by Espirito Santo's Rioforte Investments SA that
will be kept in Oi SA's hands, Bloomberg News notes. The Apax
proposal also wouldn't include Rioforte debt, the person said,
Bloomberg News relates.
Paring Debt
In a filing, says Bloomberg News, Oi SA said it has sent Altice's
proposal to its board for analysis. The company aims to complete
a transaction by the end of this year, people familiar with the
matter said.
Rio de Janeiro-based Oi is seeking at least EUR7 billion euros for
the assets, people familiar with the matter said, Bloomberg News
relates.
Proceeds from the sale would help Oi SA pare its US$19 billion
debt and take part in consolidating Latin America's biggest
telecommunications market, notes Bloomberg News. A successful bid
by Altice or Apax would also unwind Portugal Telecom SGPS SA and
Oi SA's yearlong merger that was marred by defaulted debt at a
unit of Grupo Espirito Santo and a CEO change, Bloomberg News
relays.
Portugal Telecom SGPS has veto rights over a sale of the
Portuguese assets, according to two people familiar with the
matter, Bloomberg News relates.
Oi SA and Portugal Telecom agreed a year ago on the combination to
create a carrier with 100 million customers to compete against
Telefonica SA (TEF) and Carlos Slim's America Movil SAB, Bloomberg
News notes. In July, the companies renegotiated the transaction
to give Portugal Telecom a smaller stake in the combined entity
after it emerged that the Lisbon-based partner was holding debt
defaulted by Rioforte Investments.
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.
PETROLEO BRASILEIRO: Said to Win Support to Raise Gasoline Prices
-----------------------------------------------------------------
Sabrina Valle at Bloomberg News reports that Petroleo Brasileiro
SA (Petrobras), the world's most indebted publicly traded crude
producer, received support from Brazil's Finance Minister Guido
Mantega to raise gasoline prices, said a person familiar with the
matter.
Petrobras didn't set a date or an amount for the increase at a
board meeting in Brasilia, said the person, who asked not to be
named because the information isn't public, according to Bloomberg
News. While the company presented charts during the meeting based
on an eight percent increase, details of the measure probably
won't be announced, the person said, the report relates. Minister
Mantega is also Petrobras's chairman.
Petrobras, which booked US$44 billion in operating losses from
selling fuel at below-market prices during President Dilma
Rousseff's first term, is set to raise fuel prices even as crude's
25 percent plunge this year has brought international benchmarks
more into line with its subsidized refinery gate prices, Bloomberg
News relays. The decision comes after Preident Rousseff won re-
election by the narrowest margin in Brazil's history and the
central bank raised interest rates sooner than expected.
"It could be read as a sign of more market-friendly behavior,"
Pedro Galdi, head strategist at brokerage SLW Corretora, told
Bloomberg News in a telephone interview.
Fuel-price increases "are not announced, they are carried out,"
Chief Executive Officer Maria das Gracas Foster said when asked
about the adjustment after the board meeting, Bloomberg News
discloses. In a regulatory filing, the company said that, while
gasoline and diesel price adjustments are often discussed by
management and board, there is no decision to report, Bloomberg
News relays.
Meeting Reconvened
At the previous month's board meeting, Ms. Foster said the company
needs at least a 10 percent increase in fuel prices, a person with
knowledge of the matter said at the time, Bloomberg News relays.
The board reconvened Nov. 4 after suspending an Oct. 31 meeting in
which it failed to reach a decision on a proposal to dismiss an
executive cited in a money-laundering and bribery investigation
that has put President Rousseff, who was Petrobras chairwoman from
2003 to 2010, on the defensive, Bloomberg News notes.
Sergio Machado, head of the producer's transport unit Transpetro,
said on Nov. 3 he will take 31 days unpaid leave, Bloomberg News
discloses. That followed a refusal by auditor
PricewaterhouseCoopers to sign off on the company's quarterly
results bearing his signature, said two people with knowledge of
the issue, Bloomberg News notes. Mr. Machado said he's done
nothing wrong and called the allegations absurd.
Price Parity
Petrobras shares lost 0.2 percent to BRL14.82 on Nov. 4 in Sao
Paulo as West Texas Intermediate crude fell to a three-year low.
"We have parity, so it's not like there's urgency here," Eric
Conrads, a money manager at ING Groep NV in New York who helps
oversee about US$500 million of Latin American stocks, told
Bloomberg News by telephone, referring to the gap between imported
fuel and local price caps in Brazil. "It's another positive
signal," Mr. Conrads added.
About Petroleo Brasileiro
Based in Rio de Janeiro, Brazil, Petroleo Brasileiro S.A. --
Petrobras (Brazilian Petroleum Corporation) -- explores for oil
and gas and produces, refines, purchases, and transports oil
and gas products. The Company has proved reserves of about 14.1
billion barrels of oil equivalent and operates 16 refineries, an
extensive pipeline network, and more than 8,000 gas stations.
* * *
As reported in the Troubled Company Reporter-Latin America on
Oct. 23, 2014, Moody's Investors Service downgraded Petrobras
S.A.'s (Petrobras)'s Preferred Shelf (Foreign Currency) rating to
(P)Ba1 from (P)Baa3.
SIFCO SA: Noteholders Fail to Stymie Ch. 15 Recognition
-------------------------------------------------------
Law360 reported that U.S. Bankruptcy Judge Robert Gerber in New
York granted Brazilian auto parts manufacturer Sifco SA's petition
for recognition of its foreign bankruptcy proceeding as a "foreign
main proceeding" under Chapter 15 of the U.S. Bankruptcy Code,
over the objection of a group of noteholders that contended Sifco
couldn't be trusted to treat them fairly.
According to the report, the noteholder group holding about $23.7
million of the principal amount of the senior secured notes raised
questions about whether Sifco or its foreign representative,
Rubens Leite, can provide sufficient protection to noteholders.
Judge Gerber allowed Leite to serve as foreign representative,
ordered that the collateral account be left in its current state,
and didn't condition recognition on the appointment of an
examiner.
About SIFCO SA
Brazilian company SIFCO SA began its operations in 1958, and today
it believes that it is the sole producer and supplier of front
axles and I-beams for trucks and buses in South America. SIFCO's
management and engineers are located outside Sao Paulo, Brazil in
the City of Jundiai, Brazil, where it also maintains manufacturing
and foundry facilities.
In the 1960s, SIFCO was dedicated to supplying the then-recently
created domestic Brazilian automotive industry. Eventually, SIFCO
began producing high technology forging components in compliance
with the most comprehensive requirements of several automotive
industry segments, such as tractors and agricultural machines,
among others.
SIFCO commenced a bankruptcy restructuring in Brazil on April 22,
2014. A day later, on April 23, it filed a Chapter 15 petition in
U.S. Bankruptcy Court (Bankr. S.D.N.Y. Case No. 14-bk-11179) in
Manhattan, New York.
SIFCO distributes products in the U.S. through Westport Axle
Corp., which was a subsidiary until it was sold in late 2013. The
petition shows assets of less than $500 million and debt exceeding
$500 million. SIFCO has $75 million outstanding on senior secured
notes with Bank of New York Mellon Corp. as agent.
SIFCO is owned by Sifco Metals Participacoes S.A. which is a
privately owned company.
SIFCO is represented in the U.S. proceedings by Duane Morris LLP,
in New York.
==========================
C A Y M A N I S L A N D S
==========================
ARCHER CAPITAL: Shareholders Receive Wind-Up Report
---------------------------------------------------
The shareholders of Archer Capital Offshore Fund II, Ltd. received
on Oct. 30, 2014, the liquidator's report on the company's wind-up
proceedings and property disposal.
The company's liquidator is:
Neil Wiesenberg
Archer Capital Management L.P.
570 Lexington Avenue,40th Floor
New York 10022
United States of America
Telephone: +1 (212) 319 2775
AMBI INVESTMENT: Placed Under Voluntary Wind-Up
-----------------------------------------------
On Sept. 26, 2014, the sole shareholder of AMBI Investment
Management 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:
Ogier
c/o Jonathan Turnham
Telephone: (345) 949 9876
Facsimile: (345) 949-9877
89 Nexus Way Camana Bay
Grand Cayman KY1-9007
Cayman Islands
IPGIS CENTRAL: Commences Liquidation Proceedings
------------------------------------------------
On Aug. 6, 2014, the shareholders of IPGIS Central London Income
(Cayman) Limited resolved to voluntarily liquidate the company's
business.
Only creditors who were able to file their proofs of debt by
Oct. 31, 2014, will be included in the company's dividend
distribution.
The company's liquidator is:
Garry John Hope
Suite 601-6, 6th Floor
Harcourt House
39 Gloucester Road
Wanchai
Hong Kong
Telephone: +852 3965 9310
Facsimile: +852 3965 9399
KINESIS GLOBAL: Shareholders Receive Wind-Up Report
---------------------------------------------------
The shareholders of Kinesis Global General Partner Inc received on
Oct. 31, 2014, the liquidator's report on the company's wind-up
proceedings and property disposal.
The company's liquidator is:
Mourant Ozannes Cayman Liquidators Limited
c/o Jo-Anne Maher
Telephone: (345) 814 9255
Facsimile: (345) 949 4647
94 Solaris Avenue, Camana Bay
P.O. Box 1348 Grand Cayman KY1-1108
Cayman Islands
KUWAIT RESORTS: Shareholder to Receive Wind-Up Report on Nov. 7
---------------------------------------------------------------
The shareholder of Kuwait Resorts Sub-Leasing Limited will receive
on Nov. 7, 2014, at 8:30 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
LIONGATE PBA: Commences Liquidation Proceedings
-----------------------------------------------
On Sept. 22, 2014, the sole shareholder of Liongate PBA Limited
resolved to voluntarily liquidate the company's business.
Only creditors who were able to file their proofs of debt by
Nov. 6, 2014, will be included in the company's dividend
distribution.
The company's liquidator is:
Mourant Ozannes Cayman Liquidators Limited
c/o Mourant Ozannes
Reference: RD
Telephone: +1 (345) 949 4123
Facsimile: +1 (345) 949 4647
or;
Mourant Ozannes Cayman Liquidators Limited
Reference: Peter Goulden
Telephone: +1 (345) 949 4123
Facsimile: +1 (345) 949 4647
94 Solaris Avenue Camana Bay
P.O. Box 1348
Grand Cayman KY1-1108
Cayman Islands
OFFSHORE ASSET: Shareholder to Receive Wind-Up Report on Nov. 14
---------------------------------------------------------------
The shareholder of Offshore Asset Holding Vehicle B, Ltd will
receive on Nov. 14, 2014, at 8:30 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
REDWOOD REINSURANCE: Commences Liquidation Proceedings
------------------------------------------------------
On Sept. 26, 2014, the sole shareholder of Redwood Reinsurance
SPC, 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:
Keiran Hutchinson
Barnaby Gowrie
c/o Walkers
190 Elgin Avenue
George Town
Grand Cayman KY1-9001
Cayman Islands
Telephone: +1 (345) 914 6365
SUTHERLAND FUND: Shareholder to Receive Wind-Up Report on Nov. 17
-----------------------------------------------------------------
The shareholder of Sutherland Fund, Ltd. will receive on Nov. 17,
2014, at 11:00 a.m., the liquidator's report on the company's
wind-up proceedings and property disposal.
The company's liquidator is:
Ogier
c/o Tim Cone
Telephone: (345) 815 1767
Facsimile: (345) 949-9877
TRITTON DEVELOPMENT: Commences Liquidation Proceedings
------------------------------------------------------
On Sept. 26, 2014, the sole shareholder of Tritton Development
Fund Ltd. resolved to voluntarily liquidate the company's
business.
Only creditors who were able to file their proofs of debt by
Nov. 6, 2014, will be included in the company's dividend
distribution.
The company's liquidator is:
Mourant Ozannes Cayman Liquidators Limited
c/o Mourant Ozannes
Reference: RD
Telephone: +1 (345) 949 4123
Facsimile: +1 (345) 949 4647
or;
Mourant Ozannes Cayman Liquidators Limited
Reference: Peter Goulden
Telephone: +1 (345) 949 4123
Facsimile: +1 (345) 949 4647
94 Solaris Avenue Camana Bay
P.O. Box 1348
Grand Cayman KY1-1108
Cayman Islands
=============
J A M A I C A
=============
ACCESS FINANCIAL: Affected by Jamaica Gov't Late Payments
---------------------------------------------------------
http://rjrnewsonline.com/business/access-financial-affected-by-
governments-late-payment-of-public-sector-salary-deductions
(rousel/revise)
RJR News reports that credit provider, Access Financial Services,
has felt some of the effects of the delayed payment of public
sector salary deductions.
The company, in its recently released third quarter results,
states that delays in the remittance of employee contributions,
particularly those in the public sector, continue to negatively
affect its allowances for credit losses, according to RJR News.
The report notes that there was an improvement, however, during
the three months, due to a J$20 million reduction when compared to
the previous three months.
The government has in recent months been struggling to pay
hundreds of millions of dollars in outstanding salary deductions,
the report relates.
===========
M E X I C O
===========
EMPRESAS ICA: Oil Platform Accord With Shell Signals Energy Shift
-----------------------------------------------------------------
Adam Williams at Bloomberg News reports that Empresas ICA SAB's
contract to supply engineering services for Royal Dutch Shell Plc
in Canada is signaling to investors that the Mexican construction
company is seeking energy projects abroad to cut debt and boost
profit.
Mexico's largest construction company surged 4.6 percent in the
past two sessions, the biggest back-to-back increase in more than
five months, after announcing a US$264 million contract with
partner Fluor Corp. to build well pads for heavy-oil extraction at
Shell's Carmon Creek project in Alberta, according to Bloomberg
News. The worst performer among Mexico's industrial and
construction stocks this year, ICA has tumbled about 10 percent,
while global peers gained about 19 percent, Bloomberg News notes.
The contract with Shell, Europe's biggest oil company, will boost
ICA's net income and open the door for increased participation in
crude projects domestically and abroad through the joint venture
with Fluor, Monex Casa de Bolsa analyst Roberto Solano said,
Bloomberg News says.
"This type of contract is like a key that can open opportunities
to similar projects in the future," Mr. Solano told Bloomberg News
in an interview from Mexico City. "Participating in this project
generates a favorable scenario for the company when considering
new projects in Mexico as the energy sector opens," Mr. Solano
added.
Mexico's landmark 2013 energy law opens the country's energy
industry to private competition for the first time since 1938 to
help stem declining crude production, Bloomberg News relays.
Bitumen Output
The 13 well pads for Shell will be ready in December 2017, Mexico
City-based ICA said in an Oct. 30 statement obtained by Bloomberg
News. Shell expects Carmon Creek to produce about 80,000 barrels
of bitumen a day, according to its website.
The modules for the well pads will be built in Mexico and shipped
to Canada, Eric Krantz, a spokesman for ICA-Fluor (FLR), told
Bloomberg News in a telephone interview from Houston. The venture
expects to continue to provide services to international oil
producers, ICA Chief Executive Officer Alonso Quintana said in an
e-mailed response to questions from Bloomberg News.
Income from the Shell project could boost ICA's net income,
according to Mr. Solano, Bloomberg News relays. The company's net
debt ratio fell to 6.7 times earnings before interest, taxes,
depreciation and amortization at the end of last quarter, from 7
times Ebitda at the end of last year, Chief Financial Officer
Victor Bravo said Oct. 27, Bloomberg News notes.
Bloomberg News discloses that Mr. Bravo said in August that the
company is considering selling water and highway projects to lower
net debt. The proceeds will be used to pay debt and fund
investments, Bravo said Oct. 27 on a quarterly earnings call,
Bloomberg News relays.
The contract with The Hague-based Shell strengthens ICA's ability
to compete for international energy projects, according to Mexico
City-based Intercam Casa de Bolsa analyst Sofia Robles, Bloomberg
News notes.
Asset Sales
"We consider this to be excellent news for ICA at the net income
level," Mr. Robles said in an Oct. 31 research note to clients,
Bloomberg News relays. The contract "is being added to a
portfolio of projects that will generate resources quickly to
strengthen liquidity," Mr. Robles added.
ICA is recovering after a housing-market collapse and delays in
public spending led sales to plunge, Bloomberg News notes. Last
year ICA raised more than US$600 million in asset sales after
credit rating cuts by Moody's Investors Service and Standard &
Poor's. In May, ICA sold US$700 million of bonds due in 2024.
Moody's rates the company B2, five steps below investment grade,
S&P ranks it B+, four steps lower than investment quality. The
company reported on Oct. 24 a third-quarter net loss of 769
million pesos (US$56.9 million), compared with a profit of 241
million pesos a year earlier.
Pipeline Connections
Though ICA's contract with Shell signals the company has the
ability to form relationships with the oil industry's biggest
players, the payout won't contribute much to reduce high debt
levels, according to Javier Gayol, Mexico City-based analyst at
Corporativo GBM SAB.
"There is a lot of leverage that could limit the company from
investing in new infrastructure and energy projects," Mr. Gayol
told Bloomberg News in a phone interview. "The company continues
to need to sell assets to return its capital to a balanced level,"
Mr. Gayol added.
Nine analysts have buy recommendations on the stock, while three
say hold and four sell, according to data compiled by Bloomberg.
ICA could bolster its natural-gas pipeline business as Mexico's
government expects US$50 billion in private-sector energy
investments, Mr. Bravo said in August, Bloomberg News notes.
Mexico's state-run utility, known as CFE, said in August it will
auction US$4.9 billion in pipeline and electricity projects by
next year, Bloomberg News adds.
Pipeline Proposals
ICA has received proposals from companies that seek local
associates to construct pipelines in Mexico, and could decide to
jointly operate those pipelines if the companies ask them to do
so, Mr. Bravo said, Bloomberg News discloses. While the company
has never distributed gas before, it signed a contract with TAG
Pipelines in April to build the US$743 million Ramones II Sur Gas
Pipeline in a joint venture with Irving, Texas-based Fluor,
Bloomberg News says.
ICA has worked previously with Shell, Marathon Oil Corp (MRO),
Chevron Corp. (CVX) and Valero Energy Corp (VLO) on projects,
Chief Executive Officer Quintana said, Bloomberg News relays. ICA
is working with Petroleos Mexicanos to develop the onshore field
of Chicontepec as well as several drilling and production
platforms for the state-owned operator, Mr. Quintana said,
Bloomberg News notes.
"ICA has already been active the last two years incorporating
energy projects," Bloomberg News quoted Mr. Solano as saying.
"The company is well positioned to participate in future projects
as Mexico's energy reforms are implemented," Mr. Solano added.
About Empresas ICA
Empresas ICA, S.A.B. de C.V. is an infrastructure company in
Mexico. ICA carries out large-scale civil and industrial
construction projects and operates a portfolio of long-term
assets, including airports, toll roads, water systems, and real
estate. Founded in 1947, ICA is listed on the Mexican and New
York Stock exchanges.
* * *
As reported in the Troubled Company Reporter-Latin America on Oct.
24, 2014, Standard & Poor's Ratings Services lowered its Mexican
national scale rating on Empresas ICA, S.A.B de C.V. (ICA) to
'mxBBB-' from 'mxBBB' following the revised national scale
criteria and mapping guidelines. The outlook remains negative.
Additionally, S&P has removed the "under criteria observation"
identifier from the rating. The rating action solely reflects
implementation of the new criteria and doesn't reflect any change
in S&P's assessment of the company's fundamental credit quality.
The rating action doesn't affect S&P's 'B+' issuer rating and
outlook and S&P's 'B' senior unsecured rating on global scale
rating on ICA.
FIDEICOMISO MAQUINARIA: S&P Cuts Rating on US$160MM Notes to D
--------------------------------------------------------------
Standard & Poor's Ratings Services lowered its rating on
Fideicomiso Maquinaria Especializada MXO Trust Agreement No.
F/00762's (Geo Maquinaria Trust's) US$160 million fixed-rate
secured notes series 2011 to 'D (sf)' from 'CC (sf)'. The
issuance is an asset-backed securities transaction secured by the
rights of the service agreement between Maquinaria Especializada
MXO S.A. de C.V. and Corporacion Geo S.A.B. de C.V. (Geo) and its
subsidiaries.
The rating action reflects missed interest and principal payments
of approximately US$3.6 million and US$1.6 million, respectively,
that were due on Nov. 3, 2014. According to a notice issued by
The Bank of New York Mellon (the indenture trustee for the
transaction), the controlling party directed the trustee to retain
the available amounts in the trust to pay current and anticipated
fees, expenses, and indemnities in lieu of making the scheduled
principal and interest payments to the noteholders.
Per the latest distribution report, after covering this period's
expenses, the trust has cash reserves of US$4 million; however,
due to the controlling party's decision mentioned above, this will
be retained in the trust to pay future fees and expenses incurred
from the liquidation of the construction equipment related to the
service agreement. The proceeds from the liquidation could then
ultimately help to pay down part of the outstanding note balance.
The notes were issued on May 2, 2011, by trust no. 762 on CIBanco
S.A. (formerly The Bank of New York Mellon S.A., Institucion de
Banca Multiple) totaling US$160 million due in 2021 and with a
fixed interest rate of 9.625%. The outstanding balance is
currently US$148.69 million.
GRUPO FERTINAL: S&P Lowers CCR to 'CCC-'; Outlook Remains Negative
------------------------------------------------------------------
Standard & Poor's Ratings Services lowered its corporate credit
rating on Grupo Fertinal S.A. de C.V. (Fertinal) to 'CCC-' from
'CCC+'. The outlook remains negative.
"The downgrade reflects the deterioration of Fertinal's liquidity
position given its weak operating performance as a result of
declining prices for DAP and MAP," said Standard & Poor's credit
analyst Fabiola Ortiz. S&P views that the inherent volatility in
fertilizer prices hampers the company's cash flow generation,
which could result in failure to honor its financial commitments.
S&P expects Fertinal to cover its next coupon payment for about
$10 million due Dec. 2014 only by using an additional credit line
from Banco Azteca, but the company remains highly vulnerable in
the short term.
Fertinal's operating performance has been steadily slipping given
the persistently low DAP and MAP prices and unexpected force
majeure events (Odile Hurricane). Additionally, the price for
ammonia, the most important purchased raw material for the
company, continues to increase, weakening Fertinal's EBITDA
margins. In addition, the company won't likely generate the
minimum EBITDA generation requirement of $15 million at the end of
2014 as part of its financial covenant. However, it would likely
obtain a waiver from its main creditor. For the 12 months ended
Sept. 30, 2014, Fertinal posted a loss in EBITDA generation of
$5.4 million.
MONTERREY, MEXICO: Moody's Affirms Ba2 Issuer Rating
----------------------------------------------------
Moody's de Mexico affirms Monterrey's issuer ratings at Ba2
(Global Scale, local currency) and A2.mx (Mexico National Scale)
and changes the outlook to stable from negative.
Ratings Rationale
The affirmation of Monterrey's issuer ratings at Ba2/A2.mx and the
change of outlook to stable was prompted by the recent decision to
change the State of Nuevo Leon's outlook to stable.
Given the strategic role of Monterrey as capital city of the State
on Nuevo Leon, Monterrey's ratings incorporate Moody's assessment
that there is a moderate likelihood that the State of Nuevo Leon
would act to prevent a default in the event that the city faced
acute liquidity stress. The state's stable outlook is directly
reflected in Monterrey's ratings.
Monterrey's credit profile is characterized by a strong local
economy, which supports a productive tax base and high levels of
own-source revenue that represent a high 47.4% of operating
revenues. Monterrey's issuer ratings also reflect high debt levels
and tight gross operating balances. Net direct and indirect debt
stood at 62.7% of operating revenues in 2013 and gross operating
balances were equivalent to 0.7% of operating revenues.
What Could Change The Ratings Up/Down
If Monterrey registers a sustained improvement in its operating
margins, which in turn leads to decreasing debt levels the ratings
could be upgraded. Also, an upgrade to the State of Nuevo Leon
(Ba2/A2.mx, stable) could exert upward pressure on Monterrey's
ratings.
Weakening of operating results and deterioration of consolidated
financial results leading to higher debt levels, could exert
downward pressure on ratings. Also, a downgrade of the State of
Nuevo Leon's issuer ratings could exert downward pressure on
Monterrey's ratings.
The methodology used in these ratings was Regional and Local
Governments published in January 2013.
The period of time covered in the financial information used to
determine Monterrey's rating is between 1/1/2009 and 12/31/2013.
Moody's National Scale Credit Ratings (NSRs) are intended as
relative measures of creditworthiness among debt issues and
issuers within a country, enabling market participants to better
differentiate relative risks. NSRs differ from Moody's global
scale credit ratings in that they are not globally comparable with
the full universe of Moody's rated entities, but only with NSRs
for other rated debt issues and issuers within the same country.
NSRs are designated by a ".nn" country modifier signifying the
relevant country, as in ".za" for South Africa. 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".
===============
S U R I N A M E
===============
SURINAME: Macroeconomic Conditions Weakens in 2013, IMF Says
------------------------------------------------------------
On October 1, 2014, the Executive Board of the International
Monetary Fund (IMF) concluded the Article IV consultation with
Suriname.
Suriname's macroeconomic conditions weakened in 2013 as gold and
oil prices declined. With those prices falling below recent
peaks, the large fiscal and external sector exposures to the
mineral sector continued their deterioration in 2013, along with a
significant decline in international reserves. Thus, the main
challenges the authorities are addressing continue to be to
strengthening institutions and adjusting policies to reverse the
recent deterioration and strengthen external stability.
Growth is estimated at a robust 4 percent in 2013, supported by
fiscal relaxation and strong credit growth. In contrast with
recent years, however, export volumes declined, subtracting from
GDP growth. Gold export volume growth (three-fifths of total
export of goods) contracted by 1.3 percent in 2013, down from
positive growth of almost 6 percent in 2012, as gold prices
declined. Moreover, exports of the other two main commodities
continued to be weak-contracting 5 percent for alumina and
increasing by 1.3 percent for oil-reflecting persistently low
alumina prices and limited oil reserves. Inflation remained low
in 2013, averaging 2 percent but has picked up to about 3 percent
in May 2014 largely because of higher food and fuel prices.
Following increased reserve requirements in September 2013, bank
credit growth to the private sector has declined from its peak of
20 percent (y/y) in October 2013 to 13.4 percent in July 2014.
Deposit and credit dollarization have remained broadly stable.
Banks are profitable and liquid. Bank capital adequacy remained
broadly unchanged at 12.4 percent of risk weighted assets, above
the regulatory 8 percent minimum, but well below the regional
average of 20 percent. Non-performing loan (NPL) ratios were
somewhat high at 5.9 percent in 2013.
However, fiscal deterioration continued in 2013. The overall
fiscal balance fell by 2.8 percentage points of GDP to a deficit
estimated at 6.8percent of GDP. Much of the deterioration
reflected a significant decline in mineral revenues, but fiscal
expenditures also increased. Strong fiscal consolidation is being
implemented in 2014, and the fiscal deficit is expected to decline
to 3.7 percent of GDP this year. Public debt is rising but
remains relatively low at about 30 percent of GDP.
The external balance has also declined considerably. The current
account balance fell 7.3 percentage points to a deficit of 4
percent of GDP in 2013, primarily reflecting the substantial
adverse impact of falling gold prices on exports. In addition,
domestic demand pressures manifested in strong goods imports,
which offset the beneficial impact of declining imports for large
projects on the current account balance. Alongside, international
reserves declined to 3.4 months of imports.
Executive Board Assessment
Executive Directors welcomed Suriname's robust economic growth and
commended the authorities for their recent consolidation efforts
to address the widening fiscal and external imbalances, and the
progress made on financial sector reform. Noting the challenges
posed by the exposure to uncertain commodity prices, Directors
called for continued prudent policies and reforms to ensure
macroeconomic stability, support diversification, and make growth
more inclusive.
Directors welcomed the authorities' recent expenditure control and
tax collection efforts and called for continued resolve in the run
up to the 2015 elections. They encouraged the authorities to
target a fiscal surplus over the medium term to bolster the
external position and help build buffers. Directors underscored
that successful fiscal consolidation will require additional
measures, supported by a rules-based framework, incorporating a
fiscal anchor. They encouraged the authorities to exercise
expenditure restraint by phasing out untargeted subsidies,
containing the wage bill, and prioritizing spending on goods and
services and capital projects while protecting the vulnerable.
Timely implementation of the VAT, together with further reform and
modernization of the customs and tax structure, will strengthen
revenues. Directors also encouraged the authorities to ensure the
sustainability of the newly established national pension and
health care system.
Directors considered the monetary policy stance to be appropriate
but advised the authorities to stand ready to tighten monetary
policy, if needed, to safeguard external stability. They
encouraged pushing ahead with plans to establish open market
operations, which will expand available monetary policy tools.
Directors noted that the fixed exchange rate regime remains an
appropriate anchor for policymaking for now, but requires a
substantial fiscal tightening to support the current level of the
currency. They encouraged the authorities to phase out existing
multiple currency practices as soon as possible, and to improve
data collection on foreign currency lending to better inform
regulation.
Directors commended the progress in upgrading financial sector
resilience. They looked forward to the implementation of the
Financial Sector Assessment Program (FSAP) recommendations,
focusing on further improvements in prudential standards,
supervision, the Anti-Money Laundering/Combating the Financing of
Terrorism (AML/CFT regime), and continued efforts to bolster the
institutional capacity and effectiveness of the central bank.
Directors supported plans to establish a credit bureau and deposit
insurance, modernize the payment and settlement system, and
strengthen the insurance sector regulatory framework.
Directors welcomed the authorities' focus on improving
competitiveness and diversifying the economy. They looked forward
to the timely passage of the draft legislation spearheaded by the
Competitiveness Unit, which will modernize the business
environment. They also saw scope for increased labor market
flexibility, supported by a well-targeted social safety net, to
foster job creation. Directors advised a cautious approach
regarding the planned increases in the minimum wage. Further
progress in strengthening the data quality would enable sound
policymaking.
***********
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.
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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
202-362-8552.
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