/raid1/www/Hosts/bankrupt/TCRLA

/raid1/www/Hosts/bankrupt/TCRLA_Public/150127.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 Tuesday, January 27, 2015, Vol. 16, No. 018 Headlines B R A Z I L BRAZIL: December Current Account Deficit Wider Than Forecast COSAN SA: Rallies as Gasoline Tax Jump Adds to Ethanol Allure C A Y M A N I S L A N D S BBGP COINMACH: Shareholders Receive Wind-Up Report BBGP PARKING: Shareholders Receive Wind-Up Report BLUESUNBURY MULTISTRATEGY: Shareholders Receive Wind-Up Report CHINA ENVIRONMENT: Members Receive Wind-Up Report FALCON GROUP: Fitch Raises IDR to 'B+'; Outlook Stable FULLLAND SPIRIT: Shareholders Receive Wind-Up Report INTERNATIONAL MILLING: Members Receive Wind-Up Report ITAU LATIN: Shareholder Receives Wind-Up Report K&S RUSSIA: Members Receive Wind-Up Report K&S RUSSIA YIELD: Members Receive Wind-Up Report KCS LIGHTNING: Members Receive Wind-Up Report SOLO EDUCATION: Members Receive Wind-Up Report TOM JONES: Members Receive Wind-Up Report VASSOS LTD: Shareholders Receive Wind-Up Report ZIR INTERNATIONAL: Members Receive Wind-Up Report C H I L E BANCO PENTA: Bonds Rally After Owners Add Capital GEOPARK LATIN: Fitch Affirms 'B' IDR & Revises Outlook to Neg. C O S T A R I C A INSTITUTO COSTARRICENSE: Fitch Affirms 'BB+' IDR; Outlook Now Neg. J A M A I C A JAMAICA: To Continue Energy Program, Despite Oil Price Drop P E R U PERU: Currency Drops to Lowest Since 2009 After Surprise Rate Cut V E N E Z U E L A PETROLEOS DE VENEZUELA: Citgo Plans to Raise $2.5B for Parent VENEZUELA: Drivers Rue Maduro Call to Change World's Cheapest Gas X X X X X X X X X * Large Companies With Insolvent Balance Sheets - - - - - =========== B R A Z I L =========== BRAZIL: December Current Account Deficit Wider Than Forecast ------------------------------------------------------------ Mario Sergio Lima at Bloomberg News reports that Brazil's current account gap widened last month more than economists forecast, as weaker commodity prices hurt the country's terms of trade. The deficit in the current account, the broadest measure of trade in goods and services, widened in December to $10.3 billion from $9.3 billion a month earlier, the central bank said in a report distributed Jan. 23 in Brasilia, according to Bloomberg News. That compares with the median estimate of a $9.7 billion gap from 28 analysts surveyed by Bloomberg. The deficit for the full year was $90.9 billion, the biggest ever, Bloomberg News relates. Brazil's current account eroded last year as commodity prices fell, a weaker real increased the price of imports and growth slowed, Bloomberg News says. President Dilma Rousseff's new economic team, led by Finance Minister Joaquim Levy, is struggling to regain investor confidence and boost the economy through spending cuts, tax increases and higher borrowing costs, the report adds. Swap rates on the contract due in January 2017, the most traded in Sao Paulo Friday, Jan. 23, 2015, rose five basis points, or 0.05 percentage point, to 12.44 percent at 10:40 a.m. local time. The real weakened by 0.6 percent to 2.5900 per U.S. dollar, Bloomberg News says. According to the report, foreign direct investment rose to $6.7 billion from $4.6 billion the month prior, the central bank said, less than the median estimate of $6.9 billion. Latin America's largest economy attracted $62.5 billion of direct investment last year. Analysts surveyed monthly by Bloomberg cut their 2015 growth estimate by 0.3 percentage point in January to 0.6 percent as they forecast faster inflation and a wider budget and current account gap, says the report. They estimate gross domestic product expanded 0.2 percent last year, which would be the worst performance since 2009, Bloomberg News discloses. The central bank on Jan. 21 boosted the benchmark interest rate for a third straight meeting, to 12.25 percent, to tame consumer prices, Bloomberg News says. That's the highest level since 2011. Inflation in mid-January accelerated to 0.89 percent from 0.79 percent in the previous month, pushing the annual rate to 6.69 percent, Bloomberg News relates. The central bank targets annual inflation of 4.5 percent, plus or minus two percentage points, Bloomberg News notes. COSAN SA: Rallies as Gasoline Tax Jump Adds to Ethanol Allure ------------------------------------------------------------- Gerson Freitas Jr. at Bloomberg News reports that Cosan SA Industria & Comercio advanced the most in a month as Brazil's plan to boost gasoline taxes bolstered the outlook for ethanol use. Bloomberg News says the company controlled by billionaire Rubens Ometto surged 8 percent to BRL26.56 in the biggest intraday gain since Dec. 17 before climbing 4.4 percent as of 3:20 p.m. on Jan. 21, in Sao Paulo. Sao Martinho SA increased 5.1 percent to BRL34.59, and Tereos Internacional gained 2.8 percent to BRL1.10. Higher gasoline taxes will allow ethanol producers to raise prices by as much as 15.4 centavos per liter, according to Plinio Nastari, the founder of sugar and ethanol consultancy Datagro in Sao Paulo, Bloomberg News relays. Finance Minister Joaquim Levy announced Jan. 19 after the close of markets that Brazil will resume collection of the so-called Cide tax and increase the PIS/Cofins tax on gasoline as part of an effort to reduce budget deficits, Bloomberg News relays. In Brazil, most cars can run on gasoline or ethanol. "Brazil's policy support is rising for biofuel producers," James Evans, a clean-energy analyst at Bloomberg Intelligence, said in a research report, notes Bloomberg News. The increase in gasoline taxes will boost Sao Martinho's yearly earnings before interest, taxes, depreciation and amortization by BRL100 million ($38 million), Itau BBA analysts Giovana Araujo and Antonio Barreto said in a research report, Bloomberg News discloses. "That's a move in the right direction," Elizabeth Farina, the head of ethanol producers group Unica, told journalists in Sao Paulo, Bloomberg News notes. "That's going to make ethanol more competitive." As reported in Troubled Company Reporter-Latin America on July 3, 2014, Fitch Ratings has affirmed Cosan S.A. Industria e Comercio's (Cosan) foreign and local currency Issuer Default Rating (IDR) at 'BB+' as well as its National long-term rating at 'AA(bra)'. The corporate Rating Outlook is Stable. ========================== C A Y M A N I S L A N D S ========================== BBGP COINMACH: Shareholders Receive Wind-Up Report -------------------------------------------------- The shareholders of BBGP Coinmach Holdings Limited received on Jan. 5, 2014, the liquidator's report on the company's wind-up proceedings and property disposal. The company's liquidators are: Dwight Dube Michael Wheaton Telephone (345) 640 5555 P.O. Box 31661 2nd Floor, Regatta Office Park, Windward III Grand Cayman KY1-1207 Cayman Islands BBGP PARKING: Shareholders Receive Wind-Up Report ------------------------------------------------- The shareholders of BBGP Parking Holdings Limited received on Jan. 5, 2014, the liquidator's report on the company's wind-up proceedings and property disposal. The company's liquidators are: Dwight Dube Michael Wheaton Telephone (345) 640 5555 P.O. Box 31661 2nd Floor, Regatta Office Park, Windward III Grand Cayman KY1-1207 Cayman Islands BLUESUNBURY MULTISTRATEGY: Shareholders Receive Wind-Up Report -------------------------------------------------------------- The shareholders of Bluesunbury Multistrategy Fund received on Dec. 1, 2014, the liquidator's report on the company's wind-up proceedings and property disposal. The company's liquidator is: Appleby Trust (Cayman) Ltd. c/o Richard Gordon Telephone: +1 (345) 949 4900 75 Fort Street P.O. Box 1350 Grand Cayman KY1-1108 Cayman Islands CHINA ENVIRONMENT: Members Receive Wind-Up Report ------------------------------------------------- The members of China Environment Fund 2002 Management Ltd. received on Dec. 24, 2014, the liquidator's report on the company's wind-up proceedings and property disposal. The company's liquidator is: Donald Chang Ye B23-B, UBP, No.10 Jiuxianqiao Road Chaoyang District, Beijing 10015 China FALCON GROUP: Fitch Raises IDR to 'B+'; Outlook Stable ------------------------------------------------------ Fitch Ratings has upgraded Falcon Group Holdings (Cayman) Limited's (Falcon) Long-term Issuer Default Rating (IDR) to 'B+' from 'B'. The Outlook is Stable. The Short-term IDR has been affirmed at 'B'. The upgrade of the Long-term IDR reflects improvements to Falcon's organizational structure, including the development of a formal risk management framework as well the company addressing some of its corporate governance weaknesses. KEY RATING DRIVERS Falcon's IDRs reflect its niche, but expanding franchise and undiversified business model. As a specialized financer, Falcon's business continued to grow by volume and geography during 2014, translating into an improving financial performance. Another key rating driver is Falcon's corporate governance, which continues to constrain the rating at this level. Falcon is an unregulated, non-bank financial institution. In Fitch's view, corporate governance remains evolving. Fitch believes Falcon has made good progress strengthening corporate governance in 2014, including the appointment of two independent directors to its board and the introduction of a number of policies and procedures. The founder, Chairman and sole shareholder, Kamel Alzarka, remains closely involved in the business, but his day-to-day influence is reducing as senior management take on more responsibilities. Also during 2014, Falcon strengthened its management team by appointing several senior individuals in London to head key divisions. Specifically, Fitch considers the improved risk framework positive to Falcon's ratings following the appointment of a new chief risk officer who has developed a formalised risk analysis and monitoring process. While Falcon remains focused on expansion and diversification, Fitch believes growth should be in line with the existing expertise of the business. The IDRs also consider Falcon's adequate financial profile; in particular asset quality and leverage. Earnings are improving, but remain concentrated to a fairly small number of customers. Funding sources have been diversified somewhat in 2014, but remain reliant on wholesale funding. RATING SENSITIVITIES Falcon's IDRs are sensitive to a change in Fitch's view of its company profile, which could arise from a change in its strategy and a shift in business direction, specifically into non-core or unrelated activities. A stronger company profile and further improvements in the governance and risk frameworks could benefit the ratings. FULLLAND SPIRIT: Shareholders Receive Wind-Up Report ---------------------------------------------------- The shareholders of Fullland Spirit Holdings Limited received on Jan. 5, 2015, the liquidator's report on the company's wind-up proceedings and property disposal. The company's liquidators are: Sarah Baudet Paula Hegarty c/o Citron 2004 Limited Telephone: + 44 1534 282276/ 1 345 814 2059 Facsimile: + 44 1534 282400 75 Fort Street P.O. Box 1350 Grand Cayman KY1-1108 Cayman Island INTERNATIONAL MILLING: Members Receive Wind-Up Report ----------------------------------------------------- The members of International Milling Limited received on Dec. 29, 2014, the liquidator's report on the company's wind-up proceedings and property disposal. The company's liquidators are: Juan Antonio Quiroga Salvador Vargas Guajardo Calzada del Valle #407 Col. del Valle, 66220 San Pedro Garza Garcia Nuevo Leon, Mexico ITAU LATIN: Shareholder Receives Wind-Up Report ----------------------------------------------- The shareholder of Itau Latin America Diversified Managers received on Dec. 22, 2014, the liquidator's report on the company's wind-up proceedings and property disposal. The company's liquidator is: Ogier c/o Anna Cummings Telephone: (345) 815 1858 Facsimile: (345) 949-9877 89 Nexus Way, Camana Bay Grand Cayman KY1-9007 Cayman Islands K&S RUSSIA: Members Receive Wind-Up Report ------------------------------------------ The members of K&S Russia Mixed Investment Fund received on Jan. 15, 2015, the liquidator's report on the company's wind-up proceedings and property disposal. The company's liquidator is: DMS Corporate Services Ltd. Nicola Cowan Telephone: (345) 946 7665 Facsimile: (345) 949 2877 dms House, 2nd Floor P.O. Box 1344 Grand Cayman KY1-1108 Cayman Islands K&S RUSSIA YIELD: Members Receive Wind-Up Report ------------------------------------------------ The members of K&S Russia Yield Fund received on Jan. 15, 2015, the liquidator's report on the company's wind-up proceedings and property disposal. The company's liquidator is: DMS Corporate Services Ltd. Nicola Cowan Telephone: (345) 946 7665 Facsimile: (345) 949 2877 dms House, 2nd Floor P.O. Box 1344 Grand Cayman KY1-1108 Cayman Islands KCS LIGHTNING: Members Receive Wind-Up Report --------------------------------------------- The members of KCS Lightning Opportunity Fund Ltd. received on Dec. 29, 2014, the liquidator's report on the company's wind-up proceedings and property disposal. The company's liquidator is: David Steinhardt c/o Maples and Calder, Attorneys-at-law P.O. Box 309, Ugland House Grand Cayman KY1-1104 Cayman Islands SOLO EDUCATION: Members Receive Wind-Up Report ---------------------------------------------- The members of Solo Education Limited received on Dec. 1, 2014, the liquidator's report on the company's wind-up proceedings and property disposal. The company's liquidator is: Buchanan Limited P.O. Box 1170, George Town Grand Cayman KY1-1102 Cayman Islands TOM JONES: Members Receive Wind-Up Report ----------------------------------------- The members of Tom Jones International Ltd. received on Dec. 10, 2014, the liquidator's report on the company's wind-up proceedings and property disposal. The company's liquidator is: Jeffrey D. Johnstone c/o Broadhurst LLC P.O. Box 2503 40 Linwood Street Grand Cayman KY1-1104 Cayman Islands Telephone: (345) 949-7237 Facsimile: (345) 949-7725 VASSOS LTD: Shareholders Receive Wind-Up Report ----------------------------------------------- The shareholders of Vassos Ltd. received on Jan. 7, 2015, the liquidator's report on the company's wind-up proceedings and property disposal. The company's liquidator is: Trident Liquidators (Cayman) Limited c/o Eva Moore Telephone: (345) 949 0880 Facsimile: (345) 949 0881 One Capital Place, 4th Floor P.O. Box 847, George Town Grand Cayman KY1-1103 Cayman Islands ZIR INTERNATIONAL: Members Receive Wind-Up Report ------------------------------------------------- The members of Zir International Ltd. received on Dec. 23, 2014, the liquidator's report on the company's wind-up proceedings and property disposal. The company's liquidator is: Buchanan Limited P.O. Box 1170, George Town Grand Cayman KY1-1102 Cayman Islands ========= C H I L E ========= BANCO PENTA: Bonds Rally After Owners Add Capital ------------------------------------------------- Eduardo Thomson at Bloomberg News reports that Banco Penta bonds rose after the bank at the center of a tax evasion and political financing scandal in Chile completed a $112 million capital increase following a jump in its borrowing costs. Yields of its inflation-adjusted F series bonds due in 2018 fell 33 basis points to 3.86 percent at 11:10 a.m., according to data from the Santiago stock exchange, notes Bloomberg News's Jan. 24 report. The Santiago-based bank, which has CLP1.3 trillion ($2.1 billion) of total assets, focuses on corporate lending, money management and securities brokerage, Bloomberg News says. The private holding company that owns Banco Penta completed the capital injection Jan. 24 and plans to invest a further 100 billion pesos, according to regulator filings, Bloomberg News discloses. The statement didn't say what the money would be used for. The bank's short-term funding costs had more than doubled after a prosecutor said Jan. 8 it would charge controlling shareholders Carlos Alberto Delano and Carlos Eugenio Lavin for tax evasion and bribery. Yields on Penta's F bonds jumped 1.78 percentage points between Jan. 8 and Jan. 15 to a record 4.63 percent, while the return investors demanded to buy the bank's short-term commercial paper in pesos in the secondary market leaped to 0.59 percent on Jan. 20 from 0.26 percent, Bloomberg News notes. Seeks Buyers Banco Penta's owners have hired JPMorgan Chase & Co. to seek a buyer for the lender, Diario Financiero reported Jan. 23, citing company documents, according to Bloomberg News. The bank regulator said Jan. 14 that the bank's financial position was solid. "The pressure over the bonds has been moderating this week and the news today is a good sign, so the correction in prices should continue," Emiliano Urrutia, head of fixed-income trading at Tanner Corredores de Bolsa SA, said in a phone interview on Jan. 24 from Santiago, Bloomberg News relays. Bloomberg News says that the bank's owners, which sold control of pension fund manager AFP Cuprum SA for about $1.5 billion to Principal Financial Group Inc. in 2013, are under investigation for expensing fake receipts issued by their wives and other family members to lower their taxable income. The tax regulator's probe also uncovered that Delano and Lavin, through holding company Empresas Penta, had approved illegal payments to fund political campaigns of candidates mostly from the Independent Democratic Union party, a party founded by former civilian members of Augusto Pinochet's dictatorship, Bloomberg News notes. Pablo Wagner, a former deputy mining minister in the government of Sebastian Pinera, allegedly received payments from Empresas Penta during his time in the government, Bloomberg News adds. GEOPARK LATIN: Fitch Affirms 'B' IDR & Revises Outlook to Neg. -------------------------------------------------------------- Fitch Ratings has affirmed the foreign and local currency Issuer Default Rating (IDR) of GeoPark Latin America Limited Agencia en Chile (GeoPark) at 'B'. These rating actions affect USD300 million of outstanding international bonds due on February 2020. The Rating Outlook is revised to Negative from Stable. KEY RATING DRIVERS GeoPark's ratings reflect the company's small scale of production and relatively small reserve profile as well as its production concentration, in the face of depressed global oil prices. The Negative Outlook reflects expected pressure to the company's liquidity and credit profile. The company has sufficient liquidity to withstand a short-term oil price shock, however if current prices are sustained and/or prices decline below USD45/bbl in the near term, the company's credit profile could be significantly harmed. Negative Outlook on Oil Price Declines The revision of GeoPark's Outlook to Negative primarily reflects the negative pressure on GeoPark's credit profile due to expectations for sustained low oil prices in 2015. Since June 2014, WTI spot prices have declined by more than 50%, which has negatively impacted the global oil & gas industry throughout its value chain. In December 2014, Fitch revised the sector outlook for Latin American Oil & Gas to Negative from Stable. The revision was due to expectations that pressure from lower crude prices should continue to negatively affect equity prices and credit spreads for integrated, exploration and production (E&P), and drilling and service companies. The Ratings Outlook revision for GeoPark is consistent with Fitch's belief that this pricing pressure will more negatively affect high-yield E&P issuers. Capex Step-back Given the decline in oil prices seen during the last four months, the company plans to significantly scale back its capex program for 2015. The goal is to align 2015's capex with GeoPark's EBITDA generation. Previously, assuming USD80/bbl prices, the company was considering budgeting 85 projects as part of its 2015 work program and budget. The company scaled back its capex plan to accommodate 20-25 projects at USD65/bbl prices and five to 10 projects at USD45-50bbl prices. The company's base budget assumes USD45-50/bbl prices and the fully funded capex program would be USD60-70 million with flat to 5% production growth over 2014. The USD60-70 million capex plan represents approximately a roughly 70% decrease in capex on a year-on-year basis. As part of this plan, the company is focusing on the Tigana and Tua oil fields in the Llanos 34 block in Colombia where USD15-20/bbl netbacks can be expected at the projected oil prices. Capex could be increased to USD100-120 million (10-15% production growth) if prices recover to USD65/bbl and USD200-220 million (20-25% production growth) if prices increase further to USD80/bbl. Reserve Life Stressed The capex reduction is an appropriate step for the company to preserve liquidity. Negatively, given the company's small scale operations, the step-back in capex will significantly lower the company's ability to replenish and/or grow its reserves. Based on Fitch's estimates and current production trends, the company has a reserve life of approximately six years. GeoPark's reserve life is relatively small but could be enough to absorb a one-year capex decline. However, a significant, multi-year sustained step-back in Capex may lead to the rapid depletion of the company's reserves. Small, Concentrated Production Profile GeoPark's ratings reflect the company's production concentration and relatively small reserve base. Although the company has exploration and production interest in 30 blocks in Colombia, Chile, Brazil, and Argentina, 93% of the company's 2013 net production was concentrated in four blocks (Fell in Chile, La Cuerva, Llanos 34 in Colombia and the Manati field in Brazil). This limited diversification exposes the company to operational macroeconomic risks, such as the current global price declines, associated with small-scale oil and gas production. Increasing geographic diversification is positive for the company's credit quality. For this reason, GeoPark's foray into Brazil via the acquisition of Rio das Contas, winning new concession licenses in Brazil and Colombia, and the recently announced Peruvian investment, which Fitch is not including in its forecast, have represented positive steps for GeoPark. Negatively, the company's diversification efforts will have to be stepped back in the near to medium term if current oil prices persist, and this will pressure the company's reserve life. Cash Flow Preservation Focus The company has reported negative annual FCF over the past seven years, mainly as a result of its aggressive growth strategy, though improvements had been recently evident. For the LTM ended Sept. 30, 2014, FCF was -USD4M (above -USD88M in 2013), as the company's 2012 Colombian asset acquisitions and its 2014 Brazilian acquisition have proved to be FCF accretive fairly quickly. Prior to the oil price decline, GeoPark was on pace to record positive FCF by 2016. Fitch is projecting that based on the company's capex and opex cut-backs in 2015, the company should be break-even in terms of FCF for the year. This should help the company slow- down its cash burn during 2015 in the face of oil price shocks. The company has sufficient liquidity to meet its short-term debt obligations. GeoPark reported cash on hand in January 2015 totaling USD130 million, which is 6x its short-term debt obligations. Interest expense for the company's USD300 million international bond and USD70 million Itau loan, should total USD25-USD30 million in 2015. Despite GeoPark's aggressive capex program and corresponding cash burn, the company's liquidity was helped by the 2014 IPO which raised USD95 million in cash. Furthermore, the Brazilian acquisition, which closed in 1Q'14, was FCF accretive in the first year. Financial Metrics to Deteriorate GeoPark's credit metrics had been improving over the past few years as a result of the company's growth strategy. As of the LTM ended Sept. 30, 2014, leverage ratio, as measured by total debt/EBITDA, reached 1.8x, down from 2.1x in 2013 and 2012. Given expectations of an average oil price of USD45/bbl and a stepped back capex plan, Fitch is forecasting capex of USD70 million in 2015, which is down 70% versus the LTM September 2014 level. Incorporating lower oil prices and the stepped back capex plan, EBITDA for 2015 should total USD50-USD60 million, which is down approximately 80% YoY. Based on the lower forecast, total debt/EBITDA for the year would spike to above 6x with EBITDA coverage ratio declining to 2x versus 6x in 2013. Debt on a reserve basis remains high and will rise. Fitch estimates that total debt/total proved reserves stands close to USD8/barrel of oil equivalent (boe), which is an improvement versus USD18.0/boe in 2013. On a proved and developed reserves basis the company's debt per barrel stands high at USD24/boe, and Fitch expects this to rise further in 2015 as the company is not able to add reserve levels as it moves to preserve cash. Expected Covenant Breach At expected leverage levels of 6x, the company would record financial leverage metrics above its international bond's debt covenants, which include: consolidated debt to consolidated EBITDA ratio not higher than 2.5x for the remaining life of the notes, and consolidated EBITDA to consolidated interest expenses over 3.5x. This is an incurrence covenant, that would prevent the company from raising additional debt, though the bond's covenants do have exceptions for lines of credit or working capital facilities up to 8% of total assets (approximately USD80 million). Given current trends, the company is on pace to breach the covenant by the third quarter of 2015. RATING SENSITIVITIES Drivers for a negative rating action could be if current, depressed oil prices are maintained for more than one year and/or prices decline below USD45/bbl in the short-term, thereby leading to significant harm to the company's credit profile. If current low oil prices persist for 2015, the company's potential covenant breach of its international bond could be a negative rating trigger. Long-term, a significant increase in leverage, driven by an increase in debt for exploration combined with a low success rate of discoveries could lead to a negative rating action. In the short-term, a recovery of oil prices to USD80/bbl or more would help to improve the company's credit profile and stabilize the company's negative outlook. Long-term, drivers for a positive rating action or outlook include increased diversification of the company's production profile, and consistent growth in both production and reserves while maintaining adequate financial metrics. A substantial reduction in the debt/proved-reserves ratio would also be viewed favorably. ================== C O S T A R I C A ================== INSTITUTO COSTARRICENSE: Fitch Affirms 'BB+' IDR; Outlook Now Neg. ------------------------------------------------------------------ Fitch Ratings has affirmed Instituto Costarricense de Electricidad y Subsidiarias' (Grupo ICE) foreign- and local-currency Issuer Default Ratings (IDRs) at 'BB+' as well as its national scale ratings at 'AAA(cri)' and 'AAA(slv)'. The Rating Outlook was revised to Negative from Stable. These rating actions follow the revision of the sovereign rating of Costa Rica (FC and LC IDRs 'BB+') to Negative from Stable on Jan. 22, 2015. This revision reflects Costa Rica's high structural fiscal deficits, slower economic growth and difficulties in implementing tax reforms over the last decade have led to worsening debt dynamics. The sovereign maintains access to debt markets and multilateral credit lines. However, financing conditions are deteriorating due to the lower absorption capacity of the domestic public sector investor base and the rising pressure on international interest rates. Grupo ICE's ratings reflect the strong linkage between the company and the government, which derives from government's full ownership and implicit and explicit support. The company holds strategic importance for the government given the growing demand of electricity in the country and government's plans to increase renewable generation. The ratings also reflect company's legal monopolistic position in the electricity industry, moderated indebtedness and aggressive capital expenditure program oriented to increase its generation capacity and to maintain a strong market share in the telecommunications business. RATINGS SENSITIVITY -- Grupo ICE's ratings could be negatively affected by any combination of the following factors: sovereign downgrades; weakening of legal, operational and/or strategic ties with the government; or regulatory intervention that negatively affects the company's financial performance; -- Grupo ICE's ratings could be positively affected by an upgrade of Costa Rica's sovereign rating, or if the company is materially isolated from government interference. Fitch has affirmed these ratings: -- Long-term FC IDR at 'BB+'; Outlook revised to Negative from Stable; -- Long-term LC IDR at 'BB+'; Outlook revised to Negative from Stable; -- Senior unsecured debt at 'BB+'; -- Long-term national scale (Costa Rica) at 'AAA(cri)'; Outlook Stable; -- Senior unsecured domestic long-term debt (Costa Rica) at 'AAA(cri)'; -- Short-term debt at 'F1+(cri)'; -- Long-term national scale (El Salvador) at 'AAA(slv)'; Outlook Stable; -- Senior unsecured domestic long-term debt (El Salvador) at 'AAA(slv)'. ============= J A M A I C A ============= JAMAICA: To Continue Energy Program, Despite Oil Price Drop ----------------------------------------------------------- RJR News reports that Jamaica Energy Minister Phillip Paulwell has vowed that the Jamaican Government will continue to explore alternative and renewable energy solutions, despite the fall in oil prices. Mr. Paulwell declared that the move towards energy conservation and diversification will continue with newer, cleaner fuels, according to RJR News. The report notes that the Energy Minister was speaking at the signing ceremony for two Memoranda of Understanding between the Governments of Jamaica and the United States. One of the MOUs is to support the implementation of clean sustainable energy initiatives for Jamaica, the report relates. Global oil prices have been trending down since July last year and are expected to continue into next year, RJR News says. Mr. Paulwell has acknowledged concerns that energy prices in Jamaica are too high, despite the recent positive trend, the report adds. As reported in the Troubled Company Reporter-Latin America on Sept. 23, 2014, Standard & Poor's Ratings Services affirmed its 'B-' long-term foreign and local currency and 'B' short-term foreign and local currency sovereign credit ratings on Jamaica. At the same time, S&P revised the outlook on the long-term sovereign credit ratings to positive from stable. In addition, S&P affirmed its 'B' transfer and convertibility (T&C) assessment. ======= P E R U ======= PERU: Currency Drops to Lowest Since 2009 After Surprise Rate Cut ----------------------------------------------------------------- John Quigley at Bloomberg News reports that Peru's sol slid to a five-year low after the central bank unexpectedly cut borrowing costs as lower fuel prices gave policy makers room to boost flagging growth. The sol fell 0.4 percent to 3.015 per U.S. dollar at the close of trading in Lima, the weakest since July 2009, according to Datatec prices, Bloomberg News reported on Jan 17. The drop is the steepest among Latin America's major currencies, it added. The central bank reduced the overnight rate by a quarter-point to 3.25 percent Thursday, Jan. 15, the third reduction in seven months, surprising all 18 economists surveyed by Bloomberg, who forecast borrowing costs would stay at 3.50 percent. The pace of sol depreciation led policy makers to keep rates unchanged last month and announce new reserve rules to limit currency derivatives trading and lending in U.S. currency, Bloomberg News said. "The new instruments give the central bank more control over the currency and room to lower the rate," Humberto Tijero, a fixed- income trader at Andes Advanced Securities SAB in Lima, said in a phone interview with Bloomberg News. According to Bloomberg News, slower growth in China and Europe is damping demand for copper, which accounts for almost a quarter of Peru's exports. After dropping 17 percent in 2014, copper has lost a further 7.2 percent in 2015. Peru is the world's third- largest producer of the metal. Reduced output at the country's biggest copper mine, tighter rules on gold exports and smaller fishing catches have compounded the slowdown, Bloomberg News says. Policy Mix Economic activity rose 0.3 percent in November from the same month a year earlier, the slowest pace since 2009, the statistics agency said, Bloomberg News says. The country has posted a trade deficit for nine straight months. Policy makers see inflation slowing to below 3 percent by February and 2 percent by the middle of this year following the decline in international crude oil prices, central bank research director Adrian Armas told reporters during a conference call, Bloomberg News says. November probably marked the trough in the economic cycle, Mr. Armas said. Consumer prices rose 3.22 percent in December from a year earlier, the fastest pace in five months, relates Bloomberg News. The central bank targets inflation in a range of 1 percent to 3 percent. Sol volatility eased this month compared with December, partly because of the central bank's reserve requirement measures, and fewer overseas investors are betting against the sol, Bloomberg News quoted Mr. Armas as saying. Rate Outlook While another rate cut isn't imminent, the central bank has left the door open to further easing, Fernando Palma, a strategist at Banco de Credito del Peru, said in an e-mailed research note to clients after Jan. 22's decision, Bloomberg News says. Palma accurately forecast the quarter-point reduction, says the report. Peru's sol-denominated notes due 2023 rose 0.23 centimo to 98.54 centimos per sol, the highest level in a month, according to data prices compiled by Bloomberg. The yield fell 0.04 percentage point to 5.4 percent, Bloomberg News relays. The central bank said on its website that it sold COP900 million ($299 million) of currency swaps Jan. 23 and for the first time issued securities designed to allow banks to increase sol lending using dollars held under reserve requirement rules, Bloomberg News adds. ================= V E N E Z U E L A ================= PETROLEOS DE VENEZUELA: Citgo Plans to Raise $2.5B for Parent ------------------------------------------------------------- Cordell Eddings and Pietro D. Pitts at Bloomberg News report that Citgo Petroleum Corp. is planning to raise $2.5 billion that it will use to shore up the finances of its state-owned parent company, Petroleos de Venezuela SA, according to a person with knowledge of the matter. The U.S. oil refining and marketing unit of PDVSA is seeking to sell $1.5 billion of bonds and obtain a $1 billion loan, according to the person, who asked not to be identified because the information is private, according to Bloomberg News. While Citgo's debt ratings were cut to six levels below investment grade by Moody's Investors Service on concern Venezuela will default, it's still three steps higher than the government's rating, Bloomberg News relates. Using Citgo to sell debt would mark a new strategy to raise cash for Venezuela after the government said in October that it had scrapped a plan to sell the Houston-based company, Bloomberg News discloses. Venezuela owes $2.3 billion to Exxon Mobil Corp. and Gold Reserve Inc. after losing arbitration cases tied to expropriations, and those rulings would make it difficult for the government to sell Citgo without having to pay them off, according to Russell Dallen, a managing partner at Caracas Capital Markets in Miami, Bloomberg News notes. The only reason Citgo would issue the debt "is if they're going to default on it," Mr. Dallen said in a telephone interview with Bloomberg News. "And then the bank or the company they issued it to would be able to foreclose and take the property. It's a back- door way of Venezuela selling the company," Mr. Dallen added. Currency Reserves Bloomberg News discloses that Venezuelan President Nicolas Maduro is also seeking to stave off default by courting investments from China after he failed to rally support from other OPEC members to cut output amid the 56 percent plunge in crude prices over the past six months. Oil's drop has increased the chances that Venezuela will default in the coming two years as foreign currency reserves decline and the economy contracts, according to a Jan. 15 statement from Moody's Investors Service. Venezuela said in October that it had scrapped a plan to sell Citgo in deals with price tags estimated from $7 billion to $15 billion, according to court papers, Bloomberg News relays. Still, Citgo's representatives approached potential buyers as recently as November, said people familiar with the sales campaign who asked not to be identified because the talks are private, Bloomberg News notes. Default Swaps "With crude prices dropping a lot of energy producers are under pressure," Bloomberg News quoted Sam Margolin, a New York-based analyst for Cowen & Co, as saying. "There are refineries interested in the company and their assets, but there are still a lot of questions that have made the atmosphere challenging for bidders and Citgo alike," Mr. Margolin added. The cost to protect Venezuela's bonds against non-payment soared to a record 67.51 percent upfront at 3:32 p.m. in New York on Jan. 21, 2015, according to CMA, a McGraw Hill Financial Inc. unit that compiles dealer quotes in the privately negotiated market, Bloomberg News says. That means investors would pay $6.75 million initially and $500,000 annually to protect $10 million of Venezuelan debt for five years, Bloomberg News notes. Oil provides more than 90 percent of the country's hard-currency earnings, the most among the Organization of the Petroleum Exporting Countries, Bloomberg News relays. The government and state-run oil company owe $21 billion on overseas bonds by the end of 2016, an amount equal to about 100 percent of reserves, Bloomberg News says. Moody's reduced Citgo's corporate family rating to B3 from B1 on Jan. 15, following a 13 cut of the Venezuelan government's debt rating to Caa3 from Caa3. It also trimmed PDVSA's rating to Caa3 from Caa1. Standard & Poor's grades Citgo B-, equivalent to the new Moody's level. PDVSA bought half of Citgo in 1986 from Southland Corp., which also owned the 7-Eleven retail chain. The Venezuelan company acquired the rest in 1990. About PDVSA Petroleos de Venezuela S.A. -- http://www.PDVSA.com/-- engages in the exploration, production, refining, transport, and commerce of hydrocarbons. The company was founded in 1975 and is based in Caracas, Venezuela. * * * As reported in the Troubled Company Reporter-Latin America on Jan. 19, 2015, Moody's Investors Service downgraded the long term issuer rating and senior unsecured notes of Petroleos de Venezuela (PDVSA) to Caa3 from Caa1 and changed the outlook on the ratings to stable from negative. Moody's also downgraded CITGO Petroleum Corporation's Corporate Family Rating to B3 from B1; its Probability of Default rating to B3-PD from B1-PD; and its senior secured ratings on term loans, notes and industrial revenue bonds to B3 from B1. VENEZUELA: Drivers Rue Maduro Call to Change World's Cheapest Gas ----------------------------------------------------------------- Pietro D. Pitts at Bloomberg News reports that Venezuelan drivers like filling up their gas tanks for 6 cents a gallon. The country's president said they can't afford it much longer. With Venezuelan oil prices down 60 percent since June and the country suffering from shortages of everything from toilet paper to dollars, President Nicolas Maduro said that it was time to "open the debate" on raising fuel prices, according to Bloomberg News. Though it will hurt their pocketbooks, some Caracas residents said he's right. It's a risky move, notes the report. From Nigeria to Bolivia, leaders have backed down on plans to raise fuel costs when confronted by public protests, Bloomberg News relates. Just a year ago, President Maduro faced violent street rallies over his economic policies and the shortage of basic goods which left more than 40 people dead, Bloomberg News relays. Venezuela, home to the world's largest oil reserves, encountered riots, looting and a military crackdown that eventually helped propel Hugo Chavez to the presidency when then-President Carlos Andres Perez increased gasoline prices in 1989, notes Bloomberg News. Fearing a repeat of the so-called Caracazo riots, Chavez never boosted gas prices during the 14 years he served as president, Bloomberg News discloses. The last price increase was in 1996. As a result, cheap fuel is an assumed part of life in Venezuela, Bloomberg News says. Caracas residents will sometimes drive a few hundred meters to a coffee shop instead of walking, Bloomberg News relays. Too Late The price for Venezuela's Octane 95 gasoline, the most popular fuel, is 0.097 bolivar a liter, or $0.06 a gallon, at the official exchange rate, Bloomberg News notes. For the elite who have access to dollars and can change money at the black market rate of 183 per dollar, fuel is essentially free, says the report. Analysts said a fuel price rise is part of package of measures needed to aid the economy but that it might be coming too late, Bloomberg News discloses. The economy shrank 2.8 percent last year, President Maduro said, while the International Monetary Fund forecasts gross domestic product will contract 7 percent in 2015. "If these measures were introduced a year ago then the market reaction would have been euphoric," Siobhan Morden, head of Latin America strategy at Jefferies LLC, said in a note to clients, Bloomberg News relays. Not all drivers trust the government to spend any new revenue wisely, notes the report. "What will they do with all that extra income," asked Ysnaldi Chaguan, a former pharmacist who said he turned to driving taxis after Chavez's government nationalized his company, Bloomberg News notes. "The government continues to say they are investing in social missions but has the quality of life for most Venezuelans improved? The answer is no," Mr. Chaguan added. Adolfo Sandoval, topping up his car in the San Ignacio neighborhood, called cheap prices an "unnecessary gift" from the government, Bloomberg News says. "The government should give away something else other than gasoline," Mr. Chaguan said, Bloomberg News relays. ================= X X X X X X X X X ================= * Large Companies With Insolvent Balance Sheets ----------------------------------------------- Total Total Shareholders Assets Equity Company Ticker (US$MM) (US$MM) ------- ------ --------- ------------ AGRENCO LTD AGRE LX 339244073 -561405847 AGRENCO LTD-BDR AGEN33 BZ 339244073 -561405847 AGRENCO LTD-BDR AGEN11 BZ 339244073 -561405847 ARTHUR LAN-DVD C ARLA11 BZ 11642254.9 -17154460.3 ARTHUR LAN-DVD P ARLA12 BZ 11642254.9 -17154460.3 ARTHUR LANGE ARLA3 BZ 11642254.9 -17154460.3 ARTHUR LANGE SA ALICON BZ 11642254.9 -17154460.3 ARTHUR LANGE-PRF ARLA4 BZ 11642254.9 -17154460.3 ARTHUR LANGE-PRF ALICPN BZ 11642254.9 -17154460.3 ARTHUR LANG-RC C ARLA9 BZ 11642254.9 -17154460.3 ARTHUR LANG-RC P ARLA10 BZ 11642254.9 -17154460.3 ARTHUR LANG-RT C ARLA1 BZ 11642254.9 -17154460.3 ARTHUR LANG-RT P ARLA2 BZ 11642254.9 -17154460.3 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WIEST WISA3 BZ 34107195.1 -126993682 WIEST SA WISAON BZ 34107195.1 -126993682 WIEST SA-PREF WISAPN BZ 34107195.1 -126993682 WIEST-PREF WISA4 BZ 34107195.1 -126993682 *********** Monday's edition of the TCR-LA delivers a list of indicative prices for bond issues that reportedly trade well below par. Prices are obtained by TCR-LA editors from a variety of outside sources during the prior week we think are reliable. Those sources may not, however, be complete or accurate. The Monday Bond Pricing table is compiled on the Friday prior to publication. Prices reported are not intended to reflect actual trades. Prices for actual trades are probably different. Our objective is to share information, not make markets in publicly traded securities. Nothing in the TCR-LA constitutes an offer or solicitation to buy or sell any security of any kind. It is likely that some entity affiliated with a TCR-LA editor holds some position in the issuers' public debt and equity securities about which we report. Tuesday's edition of the TCR-LA features a list of companies with insolvent balance sheets obtained by our editors based on the latest balance sheets publicly available a day prior to publication. At first glance, this list may look like the definitive compilation of stocks that are ideal to sell short. Don't be fooled. Assets, for example, reported at historical cost net of depreciation may understate the true value of a firm's assets. A company may establish reserves on its balance sheet for liabilities that may never materialize. The prices at which equity securities trade in public market are determined by more than a balance sheet solvency test. Submissions about insolvency-related conferences are encouraged. Send announcements to conferences@bankrupt.com *********** S U B S C R I P T I O N I N F O R M A T I O N Troubled Company Reporter-Latin America is a daily newsletter co-published by Bankruptcy Creditors' Service, Inc., Fairless Hills, Pennsylvania, USA, and Beard Group, Inc., Washington, D.C., USA, Marites O. Claro, Joy A. Agravante, Rousel Elaine T. Fernandez, Valerie U. Pascual, Julie Anne L. Toledo, and Peter A. Chapman, Editors. Copyright 2015. 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. * * * End of Transmission * * *