/raid1/www/Hosts/bankrupt/TCRLA

/raid1/www/Hosts/bankrupt/TCRLA_Public/141113.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 13, 2014, Vol. 15, No. 225 Headlines A N T I G U A & B A R B U D A CARIBBEAN DEVELOPMENT: APUA Pulls Plug on Jolly Harbor A R G E N T I N A ARGENTINA: Tax Authorities Raid Banks, Currency Exchanges B A H A M A S COLUMBUS INT'L: CWC-Flow Deal Raises Questions, Says Gonsalves B R A Z I L BRAZIL: Incoming Government Faces Cash Crunch PETROLEO BRASILEIRO: Overpaid by US$1.2BB, Tribunal Probe Shows C A Y M A N I S L A N D S AMBI INVESTMENT: Shareholder to Receive Wind-Up Report on Nov. 17 BIH LIMITED: Shareholders Receive Wind-Up Report BLUE BLUFF: Shareholder to Receive Wind-Up Report on Nov. 21 COLLARD GLOBAL: Shareholders Receive Wind-Up Report DANOSO INVESTMENT: Members Receive Wind-Up Report DV ABSOLUTE: Shareholders Receive Wind-Up Report FUKUOKA PREFERRED: Members Receive Wind-Up Report LANEKA INVESTMENTS: Shareholder Receives Wind-Up Report LDK SOLAR: Court Sanctions Cayman Islands Schemes of Arrangement RDM INSURANCE: Shareholder Receives Wind-Up Report UPTON GREY: Shareholders to Receive Wind-Up Report Today C H I L E CHILE: Experts Cut Growth Forecast for 2014 to 1.8% D O M I N I C A N R E P U B L I C DOMINICAN REPUBLIC: Approves 2015 budget of US$14.3 Billion J A M A I C A NATIONAL COMMERCIAL BANK: Can Afford 16% Salary Increase, IDT Says SAGICOR GROUP: Records Lower 3rd Quarter Profit M E X I C O ELEMENTIA S.A.: Moody's Upgrades Corporate Family Rating to Ba2 X X X X X X X X X LATAM: Corporates to Face Challenging Conditions, Fitch Says - - - - - =============================== A N T I G U A & B A R B U D A =============================== CARIBBEAN DEVELOPMENT: APUA Pulls Plug on Jolly Harbor ------------------------------------------------------ Antigua Observer reports that all the services offered by the Antigua Public Utilities Authority (APUA) to scores of residents and guests of Jolly Harbor have been disconnected, leaving them without light, water or telephone. A number of guests have prematurely ended their stay at the Caribbean Development Antigua Limited (CDAL)-owned property, according to Antigua Observer. While Antigua Observer is unable to ascertain when the disconnections occurred, minister with responsibility for APUA Robin Yearwood, who confirmed the withdrawal of the services, said APUA is willing to reconnect them as soon as an agreement with CDAL is reached. "CDAL has a contract with APUA for the provision of services; electricity, water, telephone; and APUA has disconnected these services. APUA is willing and able to turn those services back on immediately as long as there is an agreement between CDAL and APUA," Antigua Observer quoted Minister Yearwood as saying. Minister Yearwood advises that residents should contact CDAL to register their concerns and not the utility company, the report relates. In a notice sent to residents, dated November 6, and signed "CDAL Management," the company said it was experiencing difficulties with water and that residents should switch to pumping water from personal cisterns, the report relays. Despite the confirmation that APUA had pulled the plug on CDAL, residents and businesses have not experienced any signs of disconnection as the management company is using its own sources, the report says. However, a reliable source has informed Antigua Observer that government will be looking into reports that Jolly Harbor has been utilizing its own generator to provide power. Under law, it is illegal for residents and businesses to procure their own electricity whether via generator or other means without permission from APUA, the report relates. Meantime, the owner of Remax Antigua Ltd Ronald Chapman, reportedly the largest real estate brokers for Jolly Harbour properties, said that many guests and residents "are becoming near the end of their breaking point," the report says. Jolly Harbor has over 600 villas and properties, which are occupied or rented from mere days to months. ================= A R G E N T I N A ================= ARGENTINA: Tax Authorities Raid Banks, Currency Exchanges --------------------------------------------------------- EFE reports that Argentina's AFIP revenue service carried out searches at 71 banks, currency exchanges and other financial entities suspected of money laundering, the government said. More than 250 agents took part in the operation, which involved institutions in this capital and in the provinces of Buenos Aires, Mendoza and Cordoba, AFIP said in a statement obtained by EFE. * * * The Troubled Company Reporter-Latin America, 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'. ============= B A H A M A S ============= COLUMBUS INT'L: CWC-Flow Deal Raises Questions, Says Gonsalves -------------------------------------------------------------- Jamaica Gleaner reports that Prime Minister of St Vincent & the Grenadines, Dr. Ralph Gonsalves, said the acquisition of Columbus International Inc. by Cable and Wireless Communications Plc (CWC) raises the specter of the monopolization of Internet services. Last week, both companies announced the deal in a joint statement, saying the proposed acquisition, valued at US$3.025 billion would enable the combined company to significantly accelerate growth and strengthen its position against competitors, according to Jamaica Gleaner. During a press conference, Mr. Gonsalves said the Ministry of Telecommunications as well as the National Telecommunications Regulatory Commission and the Eastern Caribbean Telecommunications Authority would advise the Cabinet ahead of its deliberations on the deal and its implications, the report notes. "But clearly, on the face of it, it raises questions, which have to be satisfied, because we have a law, which we passed in 2001 in the Parliament of St Vincent and the Grenadines, which opened the door for competition to move away from Cable and Wireless having a monopoly. What we are now having is a monopoly in the country - the Internet services," the report quoted Mr. Gonsalves as saying. "So, on the face of it, some issues of a monopoly have entered the picture and the regulatory authority would have to take this matter into consideration in managing that - regulating that monopoly as we are going forward. And I would suspect that you would have similar instincts on the face of it," Mr. Gonsalves told reporters, the report relates. Liberalization The prime minister said his comments were not to be taken as an official position, but rather he was speaking generally about the purpose of liberalization, notes the report. "We still have competition with voice telephony, but we are now going to have a monopoly in relation to the Internet, and, therefore, in data?" queried Mr. Gonsalves, the report relays. Mr. Gonsalves added that were such a monopoly to emerge, there were legal avenues through which the interest of consumers could be safeguarded, the report says. "The law has provisions for monopolies, dominant providers, and how to address those. There is a legal framework and, if needs be, we will strengthen the legal framework, to make sure that dominant providers, and monopolies do not provide substandard services and at prices which normally would not be competitive if you had another provider in the marketplace," Jamaica Gleaner quoted Mr. Gonsalves, who is also minister of legal affairs, as saying. CWC's main competitor, Digicel Group, has said it will be pushing for a rigorous review of the deal by regulators, the report adds. CWC trades in the Caribbean as LIME, while Columbus International operates mainly as Flow and Columbus Business Solutions. About Columbus International Columbus International Inc. is a privately held diversified telecommunications company based in Barbados. The Company provides digital cable television, broadband Internet and digital landline telephony in Trinidad, Jamaica, Barbados, Grenada, St. Vincent & the Grenadines, St. Lucia and Curacao under the brand name Flow and in Antigua under the brand name Karib Cable. As reported in the Troubled Company Reporter-Latin America on Nov. 10, 2014, Standard & Poor's Ratings Services placed its 'B' corporate credit and issue-level ratings on Columbus International Inc. (Columbus) on CreditWatch with positive implications. =========== B R A Z I L =========== BRAZIL: Incoming Government Faces Cash Crunch --------------------------------------------- Global Insolvency citing The Wall Street Journal, reports that Brazil's next finance minister, to be appointed within weeks, must wrestle with a growing government problem: not enough money. Shoring up Brazil's books is crucial for the nation to avoid a potential credit rating downgrade, which would increase its costs of borrowing, according to Global Insolvency. But there are short-term economic pitfalls as well as political challenges for President Dilma Rousseff, who faces a more conservative and divided Congress than she did in her first term, the report notes. Among her first tasks is avoiding Brazil's version of the fiscal cliff, the report relates. In coming weeks, the nation's lawmakers must vote to loosen legally binding requirements forcing Brasilia to end the year with a fat government surplus, the report discloses. According to this law, Brazil was supposed to post savings to pay down public debt, the so-called primary surplus, of BRL99 billion (US$38.6 billion) this year, or 1.9% of gross domestic product, the report relays. Figures through September show Brazil running a BRL15.3 billion deficit, notes Global Insolvency. Some economists project Brasilia will end 2014 with its first primary deficit since the economy was stabilized from hyperinflation in the mid-1990s, the report adds. PETROLEO BRASILEIRO: Overpaid by US$1.2BB, Tribunal Probe Shows --------------------------------------------------------------- Anna Edgerton at Bloomberg News reports that Petroleo Brasileiro SA allowed suppliers in refinery projects and oil platforms to over charge by about BRL3 billion (US$1.2 billion), according to preliminary findings of a tribunal overseeing state spending. The figure includes an estimated US$792 million in over billing at the Pasadena refinery in the U.S. as well as surplus payments at the Comperj and Abreu e Lima plants being built in Brazil, Augusto Nardes, president of the TCU tribunal, told reporters in Brasilia, according to Bloomberg News. Bloomberg News notes that Petrobras is being investigated in Brazil by a congressional committee, the federal police and the TCU after a former director was arrested earlier this year for his alleged involvement in a laundering operation. Former head of refining Paulo Roberto Costa has alleged that builders formed a cartel to overcharge for projects and divert money to politicians, Bloomberg News relates. Mr. Nardes said he spoke with Ricardo Lewandowski, president of Brazil's Supreme Court, about reviewing a 1998 executive decree that allows Petrobras to skip the normal licensing process for contracts, notes the report. Willingness from President Dilma Rousseff to examine the issue could signal that Brazil supports greater transparency at the country's largest state-run company, Mr. Nardes said, Bloomberg News relates. 'Reckless' "The Supreme Court should make a decision because this issue has been costly for Brazil," Bloomberg News quoted Mr. Nardes as saying. "It facilitates, leaves room for graft and fraud, which is why it's necessary for the Supreme Court to decide." Bloomberg News notes that Petrobras will pay US$21.6 billion to complete the Comperj complex that's scheduled to open in 2016, Jose Jorge, a member of the TCU tribunal, said in documents released last month. Management has been "reckless" in skipping technical analysis, overpaying for contracts and lacking effective controls, according to the audit, says the report. Petrobras said in an April 16 statement that, just like Abreu e Lima, Comperj suffered a series of changes in its initial project, Bloomberg News discloses. The cost in that statement was US$13.5 billion, Bloomberg News adds. 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. ========================== C A Y M A N I S L A N D S ========================== AMBI INVESTMENT: Shareholder to Receive Wind-Up Report on Nov. 17 ----------------------------------------------------------------- The shareholder of AMBI Investment Management Ltd. will receive on Nov. 17, 2014, at 12:00 p.m., the liquidator's report on the company's wind-up proceedings and property disposal. The company's liquidator is: Ogier c/o Jonathan Turnham 89 Nexus Way, Camana Bay Grand Cayman KY1-9007 Cayman Islands Telephone: (345) 949 9876 Facsimile: (345) 949 9877 BIH LIMITED: Shareholders Receive Wind-Up Report ------------------------------------------------ The shareholders of BIH Limited received on Nov. 6, 2014, the liquidator's report on the company's wind-up proceedings and property disposal. The company's liquidator is: Paul Sistare c/o Maples and Calder, Attorneys-at-law P.O. Box 309, Ugland House Grand Cayman KY1-1104 Cayman Islands BLUE BLUFF: Shareholder to Receive Wind-Up Report on Nov. 21 ------------------------------------------------------------ The shareholder of Blue Bluff Limited will receive on Nov. 21, 2014, the liquidator's report on the company's wind-up proceedings and property disposal. The company's liquidator is: Commerce Corporate Services Limited P.O. Box 694 Grand Cayman Cayman Islands Telephone: 949 8666 Facsimile: 949 0626 COLLARD GLOBAL: Shareholders Receive Wind-Up Report --------------------------------------------------- The shareholders of Collard Global Macro Fund received on Nov. 7, 2014, the liquidator's report on the company's wind-up proceedings and property disposal. The company's liquidator is: Alric Lindsay Artillery Court Shedden Road P.O. Box 11371, George Town Grand Cayman KY1-1008 Cayman Islands DANOSO INVESTMENT: Members Receive Wind-Up Report ------------------------------------------------- The members of Danoso Investment Company received on Nov. 3, 2014, the liquidator's report on the company's wind-up proceedings and property disposal. The company's liquidator is: CDL Company Ltd. P.O. Box 31106 Grand Cayman KY1-1205 Cayman Islands DV ABSOLUTE: Shareholders Receive Wind-Up Report ------------------------------------------------ The shareholders of DV Absolute Return Fund received on Nov. 5, 2014, the liquidator's report on the company's wind-up proceedings and property disposal. The company's liquidator is: Mark Bloom Telephone: +65 6223 2480 6 Marina Boulevard #56-52 the Sail @ Marina Bay (Central Park Tower) Singapore 018985 FUKUOKA PREFERRED: Members Receive Wind-Up Report ------------------------------------------------- The members of Fukuoka Preferred Capital 2 Cayman Limited received on Oct. 29, 2014, the liquidator's report on the company's wind-up proceedings and property disposal. The company's liquidator is: Mervin Solas c/o Maples Liquidation Services (Cayman) Limited P.O. Box 1093, Boundary Hall Grand Cayman KY1-1102 Cayman Islands LANEKA INVESTMENTS: Shareholder Receives Wind-Up Report ------------------------------------------------------- The shareholder of Laneka Investments Limited received on Nov. 10, 2014, the liquidator's report on the company's wind-up proceedings and property disposal. The company's liquidator is: Fonseca Management Ltd. c/o Dr. Hans Bodmer Telephone: +41 44 711 7171 Facsimile: +41 44 711 7111 P.O. Box 958 Tortola British Virgin Islands LDK SOLAR: Court Sanctions Cayman Islands Schemes of Arrangement ---------------------------------------------------------------- LDK Solar CO., Ltd. in provisional liquidation and its Joint Provisional Liquidators, Tammy Fu and Eleanor Fisher, both of Zolfo Cooper (Cayman) Limited, announced on Nov. 10 that, on November 7, 2014, the Grand Court of the Cayman Islands sanctioned the Cayman Islands schemes of arrangement of LDK Solar and its subsidiary, LDK Silicon & Chemical Technology Co., Ltd., each as previously approved by scheme creditors at their class meetings held on October 16, 2014. "We are very pleased that the Grand Court of Cayman Islands has sanctioned our Cayman Islands schemes of arrangement, and this represents a significant step in our offshore restructuring," stated Xingxue Tong, Interim Chairman, President and CEO of LDK Solar. "We now focus on also obtaining sanction from the High Court of Hong Kong with respect to our Hong Kong schemes of arrangement, together with the recognition of our LDK Solar Cayman scheme of arrangement and approval of the terms of our pre- packaged plan of reorganization from the U.S. Bankruptcy Court. We look forward to the completion of our restructuring transactions as may eventually be approved through these judicial processes. While we are mindful of difficulties ahead, we remain committed to rebuilding LDK Solar and repositioning ourselves in the PV marketplace to grow our business," concluded Mr. Tong. The U.S. Bankruptcy Court will hold a hearing on November 21, 2014 to consider confirmation of the prepackaged plan of reorganization and recognition of the Cayman Island scheme of arrangement of LDK Solar. About LDK Solar LDK Solar Co., Ltd. -- http://www.ldksolar.com-- based in Hi- Tech Industrial Park, Xinyu City, Jiangxi Province, People's Republic of China, is a vertically integrated manufacturer of photovoltaic products, including high-quality and low-cost polysilicon, solar wafers, cells, modules, systems, power projects and solutions. LDK Solar was incorporated in the Cayman Islands on May 1, 2006, by LDK New Energy, a British Virgin Islands company wholly owned by Xiaofeng Peng, LDK's founder, chairman and chief executive officer, to acquire all of the equity interests in Jiangxi LDK Solar from Suzhou Liouxin Industry Co., Ltd., and Liouxin Industrial Limited. LDK Solar CO., Ltd. in provisional liquidation and its Joint Provisional Liquidators, Tammy Fu and Eleanor Fisher, both of Zolfo Cooper (Cayman) Limited, on Oct. 22 disclosed that on October 21, 2014 three U.S. subsidiaries of LDK Solar, LDK Solar Systems, Inc., LDK Solar USA, Inc. and LDK Solar Tech USA, Inc. filed voluntary petitions to reorganize under Chapter 11 of the United States Bankruptcy Code in the United States Bankruptcy Court for the District of Delaware. The lead case is In re LDK Solar Systems, Inc. (Bankr. D. Del., Case No. 14-12384). The U.S. Debtors' General Counsel is Jessica C.K. Boelter, Esq., at Sidley Austin LLP, in Chicago, Illinois. The U.S. Debtors' Delaware counsel is Robert S. Brady, Esq., Maris J. Kandestin, Esq., and Edmon L. Morton, Esq., at Young, Conaway, Stargatt & Taylor, LLP, in Wilmington, Delaware. The U.S. Debtors' financial advisor is Jefferies LLC. The Debtors' voting and noticing agent is Epiq Bankruptcy Solutions, LLC. The U.S. Debtors commenced the Chapter 11 Cases in order to implement the prepackaged plan of reorganization, with respect to which the U.S. Debtors launched a solicitation of votes on September 17, 2014 from the holders of LDK Solar's 10% Senior Notes due 2014, as guarantors of the Senior Notes, and required such holders of the Senior Notes to return their ballots by October 15, 2014. Holders of the Senior Notes voted overwhelmingly in favor of accepting the Prepackaged Plan. Contemporaneously with the filing of the Chapter 11 Cases, on October 21, 2014, LDK Solar filed a petition in the same U.S. Bankruptcy Court for recognition of the provisional liquidation proceeding in the Grand Court of the Cayman Islands, as previously announced by LDK Solar, as a foreign main proceeding under Chapter 15 of the United States Bankruptcy Code. The Chapter 15 case is In re LDK Solar CO., Ltd. (Bankr. D. Del., Case No. 14-12387). RDM INSURANCE: Shareholder Receives Wind-Up Report -------------------------------------------------- The shareholder of RDM Insurance Group, Ltd. received on Oct. 28, 2014, the liquidator's report on the company's wind-up proceedings and property disposal. The company's liquidator is: William G. Rosier c/o Global Captive Management Ltd. Building 3, 2nd Floor, Governors Square 23 Lime Tree bay Avenue P.O. Box 1363 Grand Cayman KY1-1108 Cayman Islands Telephone: +1 (345) 949 7966 Facsimile: +1 (345) 949 8068 UPTON GREY: Shareholders to Receive Wind-Up Report Today -------------------------------------------------------- The shareholders of Upton Grey Holdings Limited will receive today, Nov. 13, 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: Christopher Kennedy c/o Omar Grant Telephone: (345) 949-7576 Facsimile: (345) 949-8295 P.O. Box 897 Windward 1 Regatta Office Park Grand Cayman KY1-1103 Cayman Islands ========= C H I L E ========= CHILE: Experts Cut Growth Forecast for 2014 to 1.8% --------------------------------------------------- EFE reports that experts lowered their forecast for Chile's growth in 2014 to 1.8 percent, down from 1.9 percent in the previous Central Bank survey. They also cut their expectations for Chile's growth in 2015 by one-tenth of a percentage point to 3 percent, according to November's Monthly Survey of Economic Expectations, which polled 60 economists, academics and financial-sector executives, according to EFE. =================================== D O M I N I C A N R E P U B L I C =================================== DOMINICAN REPUBLIC: Approves 2015 budget of US$14.3 Billion ----------------------------------------------------------- Dominican Today reports that after several hours of debate, the Chamber of Deputies approved the bill for the 2015 Budget, of RD$630.0 billion (US$14 .3 billion), which had already passed in the Senate. The deputies of the ruling party PLD and of the pro-government PRSC were enough to pass the legislation, which president Danilo Medina is expected to sign into law, according to Dominican Today. The report notes that the bill passed 101 votes to 50, with seven abstentions. The opposition PRM party's 50 deputies had voted against, after having requested a RD$20.0 billion allocation to raise wages of government workers who earn the minimum salary, and RD$500.0 million for the Santo Domingo State University, UASD, among other entities, the report notes. ============= J A M A I C A ============= NATIONAL COMMERCIAL BANK: Can Afford 16% Salary Increase, IDT Says ------------------------------------------------------------------ Jamaica Observer reports that the Industrial Disputes Tribunal (IDT) has awarded a pay increase to employees of the National Commercial Bank (NCB) of 16 per cent, compounded over the two-year period, October 1, 2012 to September 30, 2014. The award is for an eight percent increase, effective October 1, 2012, and a further eight percent increase effective October 1, 2013, which means that the benefits, which also include a number of allowances, will have to be paid retroactively, according to Jamaica Observer. The report notes that the workers were seeking a nine percent increase each of the two years, while the bank had offered five per cent and four per cent, respectively. The IDT panel, which made the award after hearing from representatives of both the NCB and the NCB Staff Association (NCBSA), said it made the award on the basis that the bank has the ability to pay the increases as it is enjoying increased profits and all key performance indicators are pointing in the right direction, the report relates. The report discloses that the tribunal's award brought to an end nearly two years of wage negotiations, which began in December, 2012 and included a brief work stoppage on May 27, 2013, which ended after an urgent intervention by the Ministry of Labour and Social Security. However, the ministry was unable to conclude the negotiations, and it was referred to the IDT, the report notes. The report discloses that the panel looked closely at the issue of the bank's ability to pay, based on the case made by the NCBSA that NCB had the ability to pay the nine per cent increase, as it would not impair its profitability. The NCBSA also submitted that while the financial sector was impacted by the global financial crisis, the impact was minimal, as concluded by a "stress test" undertaken by the International Monetary Fund (IMF), the Bank of Jamaica (BOJ) and the Ministry of Finance and Planning, the report relays. The NCBSA said that, in addition, the Jamaica Debt Exchange (JDX) had no significant impact on the bank's profitability as a financial sector stability fund, provided by the international lending institutions, was not utilized by local banks as there was no need for them to draw down on the fund, the report relays. The report says that the NCBSA insisted that private sector wage increases should be driven by ability to pay, as a wage freeze in that sector could have a negative impact on the economy. "The argument that a nine per cent salary increase could have a negative impact on the bank, as it would be a "large increase" is flawed, as that would translate into an increase below the rate of inflation, and an increase below the rate of inflation could not be considered excessive," the association argued, the report notes. The staff association also noted that, according to the BOJ Prudential Indicators of Commercial Banks 2013, in terms of "profitability, liquidity, asset quality and capital adequacy", the banking sector is "extremely strong and resilient," the report relays. However, NCB claimed that the NCBSA's claims were "unreasonable", and not in accordance with increases given within the financial sector, and that the bank was not in a position to pay those increases, which it saw as "contrary to the national interest," the report relates. The bank said that its offer of five per cent in year one, and four per cent in year two of a new contract, was made against the background of a deteriorating environment, with net profit down, ratios trending in the wrong direction, capital adequacy falling and cost to income ratios increasing, the report notes. The bank also said that the NCBSA's claim that it had the ability to pay was made without any concern about actually confirming that it had the ability to pay, and that it failed to seriously consider the effect of the increase on customers and shareholders, the report says. Jamaica Observer relays that the NCB also insisted that both the JDX and the National Debt Exchange (NDX), as well as the public debt exchange, have had significant impact on its profitability. It said that evidence of this was that between 2011 and 2013 its share price declined on the Jamaica Stock Exchange and there was a decline in net profit of 14.9 per cent n 2013 and a decrease in earnings per stock unit, as well as an increase in cost to income ratio from 47 per cent to 56 percent, notes the report. However, the IDT sided with the NCBSA, stating that "the evidence in this matter points to an institution which is enjoying increased profits and, more importantly, all the key performance indicators are pointing in the right direction," the report discloses. The IDT panel was chaired by Norman Wright, and also included Rion Hall and Trevor McNish. The NCB was represented by attorneys-at- law Walter Scott and Anna Gracie, and the NCBSA by Danny Roberts, industrial relations consultant, and Paul Stewart, its chairman. Headquartered in Kingston, Jamaica, National Commercial Bank Jamaica Limited -- http://www.jncb.com/-- together with its subsidiaries, provides various banking and financial products and services primarily in Jamaica. * * * As reported in the Troubled Company Reporter-Latin America on May 23, 2014, Fitch Ratings affirmed the long-term foreign currency and local currency IDRs for National Commercial Bank Jamaica Ltd. (NCBJ) at 'B-'. Fitch has also revised NCBJ's Rating Outlook to Stable from Negative. Additionally, Fitch has affirmed NCBJ's Viability Rating (VR) at 'b-' and revised its Support Rating Floor (SRF) to 'B-' from 'CCC.' SAGICOR GROUP: Records Lower 3rd Quarter Profit ----------------------------------------------- RJR News reports that there was a decline in third quarter profit at Sagicor Group. It amounted to a little over J$1 billion, compared to J$1.52 billion during the corresponding period last year. Sagicor Group said the latest results were affected by large costs for re-branding as well as rationalizing operations following the RBC Jamaica acquisition, higher taxes and lower unrealized foreign exchange when compared to last year, according to RJR News. The report notes that the 2013 results included the negative impact of the National Debt Exchange (NDX). Headquartered in St. Michael, Barbados, Sagicor Financial Corporation -- http://www.sagicorlife.com/-- is a financial services company, and through its subsidiaries, offers life and health insurance, annuities, pensions, property and casualty insurance, and banking services in the Caribbean, Latin America, the United Kingdom, and the United States. Its Sagicor Life Inc segment offers life and health insurance, annuities, and pension investment administration services in Barbados, Eastern Caribbean, Dutch Caribbean, Bahamas, Central America, and Trinidad and Tobago. * * * As reported in the Troubled Company Reporter-Latin America on Nov. 27, 2013, Standard & Poor's Ratings Services said that the 'BB+' financial strength and counterparty credit ratings on Sagicor Life Inc. (Sagicor) and its 'BB-' issue-level ratings on Sagicor Finance Ltd. remain on CreditWatch with negative implications where S&P placed them on Feb. 13, 2012. =========== M E X I C O =========== ELEMENTIA S.A.: Moody's Upgrades Corporate Family Rating to Ba2 --------------------------------------------------------------- Moody's de Mexico upgraded to Ba2 from Ba3 Elementia, S.A.'s corporate family rating. At the same time, Moody's upgraded to Ba2/A1.mx from Ba3/A3.mx senior unsecured ratings on its certificados burs tiles ELEMENT 10. The ratings outlook is stable. Ratings Affected - Corporate family rating: Rating upgraded to Ba2 from Ba3. Stable outlook. - MXN 3,000 million certificados burs tiles due 2015: Rating upgraded to Ba2 / A1.mx from Ba3 / A3.mx. Stable outlook. Rating Rationale The upgrade reflects Elementia's improved credit profile following a de-leveraging process after sizeable investments and acquisitions. The reduction in leverage not only reflects the company's ability to integrate new businesses but is also in line with its commitment to quickly de-lever following acquisitions. The rating is also supported by its solid market position in Latin America, diverse product diversification and positive business prospects in its region of operations. Balancing these positives is the volatile nature of the construction segment and raw materials, resulting in business cyclicality. Event risk given the high acquisitive profile of the company also affects the rating. Moody's expectation that cash generation will remain pressured by additional capacity projects is also considered. Elementia's credit metrics are adequate for the rating category with Moody's adjusted leverage (debt/EBITDA) of 2.7x and EBITA / Interest expense of 3.2x as of September 30, 2014. Moreover, the company has been able to reduce leverage from 3.6x in 2011, despite the challenging operating conditions in the Mexican market and the sizeable acquisitions and high capital expenditures related with the start up of its cement division. EBITA margin of around 9.9% is adequate for the rating and Moody's expect to continue to improve as the cement division increases its contribution to overall results and efficiency weights in Elementia's profitability. Currently Elementia's liquidity is tempered by committed payments to Lafarge following acquisition of its 47% stake in Fortaleza and upcoming debt maturities. Internal cash needs are adequately covered by the company's cash on hand of USD 100 million and free cash flow of (USD 140 million for the last twelve months (LTM) ended in September 2014), coupled by USD 300 million available under committed lines. But by the end of 2014, Elementia will need to pay USD 180 million to Lafarge and the following year USD 45 million. Also in 2015, the company will face the maturity of its MXN 3 billion (around USD 230 million) local notes due in October. These extraordinary cash needs pose liquidity pressures. Elementia is currently planning a global placement. Use of proceeds will be to fund the payments to Lafarge and to refinance debt. Successfully placed, the issuance will result in a strong liquidity profile given a comfortable maturity profile and increased ability to conduct investment plans. The most relevant plan includes the addition of a new cement line that will increase capacity in 1.3 million tons, resulting in a 65% increase in current capacity, and will allow Elementia to increase its market share to 8% from 5%. The project's total investment amounts USD 273 million, with USD 82 million expected in 2015 and USD 139 million in 2016. Additionally, the company is planning to have an IPO in the following year that could further improve its liquidity supporting its ability to continue its growth strategies. The stable rating outlook reflects Moody's expectation that business prospects in Elementia's regions of operations will remain strong in upcoming years, given large infrastructure projects and positive housing fundamentals. These strong fundamentals should help Elementia achieve its projected growth and profitability improvement as well as its deleveraging plan. Elementia's ratings could be upgraded if the company's profitability improves beyond current expectations given stronger than anticipated business fundamentals in the regions in which operates with lower competitive pressures than currently anticipated. Quantitatively, an upgrade would require adjusted EBITA margin close to 14% and adjusted debt/EBITDA below 2.5 times and interest coverage close to 5.0x. The ratings could be downgraded if the company's margins deteriorates such that EBITA margin falls below 10%, or if leverage increases, for example due to a debt-finance acquisition, above 3.5x on a sustained basis with no clear plan to de-lever. A deterioration in liquidity or an acquisition that is not accretive could also lead to a downgrade. Elementia is a major manufacturer of semi-finished copper, alloy, fiber cement, cement, and plastic products with consolidated revenues of close to USD1.1 billion for the 12 months ended September 30, 2014. The company has four business segments: metals, building systems (fiber cement products), plastics, and cement. Although the majority of Elementia's operations are in Mexico, it also has presence in seven Latin American countries (Peru, Colombia, Ecuador, Bolivia, Costa Rica, Honduras, El Salvador and Colombia). Elementia is majority owned (51%) and controlled by the Del Valle family through Grupo Empresarial Kaluz (not rated). Grupo Carso (not rated) holds a 46% interest and the remaining 3% is held by private investors. The principal methodology used in these ratings was Global Manufacturing Companies published in July 2014. The period of time covered in the financial information used to determine Elementia S.A.'s rating is between January 1, 2009 and September 30, 2014 (source: Bolsa Mexicana de Valores (BMV)). ================= X X X X X X X X X ================= LATAM: Corporates to Face Challenging Conditions, Fitch Says ------------------------------------------------------------ Latin American corporates are facing challenging conditions in 2015, according to a new Fitch Ratings report. 'Latin America corporate credit quality has been weakening during the past two years. A reversal of this trend is not on the horizon for 2015,' said Joe Bormann, Managing Director at Fitch. 'Cash flow is expected to remain under pressure due to weak domestic demand and soft commodity prices. Downgrades will likely outpace upgrades. Refinancing risk is high for small issuers rated in the 'B' category.' Brazilian corporates face a difficult environment. Downgrades could outpace upgrades by a ratio of 2:1x in 2015. Default risk will remain high for corporates in the sugar and ethanol sector. Domestic demand should remain weak as business and consumer confidence are not projected to recover significantly. Inflation is projected to remain high in Brazil during 2015. Energy rationing is an outlying risk that could accelerate the level of negative rating actions. Scaling back capex and controlling costs will be key corporate initiatives in the absence of growing revenues. Downgrades are also expected to outpace upgrades during 2015 in Chile and Peru. In Chile, macroeconomic conditions remain challenging and domestic demand should be subdued. Energy costs are elevated and will not decline in the near term. Tax changes will further pressure corporate cash flow. Peruvian corporates continue to adjust to slower growth than projected for 2014. The weak economic performance in 2014 has sapped the spending power of middle and lower income Peruvian consumers. The near-term outlook for Colombian corporates is stable. Liquidity is strong and rollover risk is low. The benign credit environment is due to strong economic fundamentals. Both consumer and industrial confidence continue to be positive and slightly higher than in the previous year. Unemployment, while in the neighborhood of 10%, has been trending lower. Mexico stands out as the market where upgrades are likely to outpace downgrades. Macroeconomic conditions are improving. Most Mexican corporates have adequate liquidity positions to face upcoming debt amortizations. Fitch projects that corporate free cash flow will remain mildly positive. Corporate governance remains a concern for many 'B' rated issuers. The 2015 Argentine corporate outlook is negative. Corporate default risk is high. The risk that companies will be prohibited from transferring dollars abroad or converting pesos into U.S. dollars or euros to service debt remains high, as capital controls continue to increase. *********** 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. 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