/raid1/www/Hosts/bankrupt/TCRLA

/raid1/www/Hosts/bankrupt/TCRLA_Public/150527.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 Wednesday, May 27, 2015, Vol. 16, No. 103 Headlines A R G E N T I N A ARGENTINA: It's Deja Vu for Bond Traders as CPI is Deemed Unreal GALILEO GLOBAL: Moody's Rates Global Scale Bond Fund at B-bf YPF SA: Strikes Oil in Southern Province of Rio Negro B R A Z I L USIMINAS: Moody's Says Halt of Blast Furnaces is Credit Negative C A Y M A N I S L A N D S ACT INVESTMENT: Shareholders' Final Meeting Set for June 9 ECP GALAXY: Shareholders' Final Meeting Set for June 2 H&F SENSOR 1: Shareholders' Final Meeting Set for June 2 H&F SENSOR 2: Shareholders' Final Meeting Set for June 2 INVESTAR SEMICONDUCTOR: Members' Final Meeting Set for June 8 INVESTAR SEMICONDUCTOR (II): Members' Final Meeting Set for June 8 JAPAN HOSPITALITY: Members' Final Meeting Set for June 4 LEHMAN BROTHERS: Members' Final Meeting Set for June 4 SSP ENERGY: Members' Final Meeting Set for June 2 TANGERINE INTERNATIONAL: Members' Final Meeting Set for June 2 D O M I N I C A N R E P U B L I C DOMINICAN REPUBLIC: Exec Says Mining Must Reflect Reality J A M A I C A JAMAICA: Government Employment Declines JAMAICA: BOJ Reveals Growth in Construction Sector in Jan-March M E X I C O ELEMENTIA S.A.: Fitch Affirms 'BB+' IDR; Outlook Stable GRUPO TMM: Auditor Expresses Going Concern Doubt RAMOS ARIZPE: Moody's Ups Issuer Ratings to Ba3/Baa1.mx - - - - - ================= A R G E N T I N A ================= ARGENTINA: It's Deja Vu for Bond Traders as CPI is Deemed Unreal ---------------------------------------------------------------- Camila Russo at Bloomberg News reports that barely a year after re-jiggering its inflation statistics to make them more credible, Argentina is again losing traders' confidence the numbers reflect reality. Securities linked to consumer prices are falling by the most in nine months as the gap widens between the official and private estimates for everything from food to education costs, according to Bloomberg News. The debt has tumbled 2.5 percent in the past month, the biggest drop on a 30-day rolling basis since August, while similar bonds in Latin America gained, according to Barclays Plc, Bloomberg News relates. Bloomberg News says that Argentina unveiled new inflation data in February 2014 after getting censured by the International Monetary Fund. The bonds rallied on speculation the decision would prompt the government to start reporting inflation that was closer to private estimates, which are currently running at 29 percent, Bloomberg News notes. That hasn't happened. What's more, a slumping economy is causing official inflation to slow, cutting into returns, Bloomberg News notes. "It's become clear that the government still isn't willing to recognize reality," said Maximiliano Castillo, a former central bank economist, who's now director of Buenos Aires-based research firm ACM SA, Bloomberg News relays. Yields on benchmark peso bonds rose to a two month high of 8.2 percent after the government on May 15 reported monthly inflation of 1.1 percent in April, or an annual rate of 15.8 percent, Bloomberg News notes. That's about half private economists' estimates. Congress Index Economy Minister Axel Kicillof said inflation this year may be as low as 15 percent while 14 economists surveyed by Bloomberg estimate consumer prices will increase 19.7 percent. Mr. Kicillof has said the new nationwide index accurately reflects rural and urban realities and not just costs in the capital of Buenos Aires, Bloomberg News relates. The government began to underreport price increases in 2007 when then President Nestor Kirchner overhauled staff at the National Statistics Institute, Bloomberg News says. In 2011, the government fined private consulting firms that published inflation estimates contradicting theirs, Bloomberg News notes. Two years later, Argentina became the first nation to be censured by the IMF for failing to report accurate data, Bloomberg News relays. Investors in the country's inflation-linked bonds have lost out on $14 billion since 2007, according to estimates by ACM Consultores, as the returns increase in line with the official consumer price index, Bloomberg News notes. "The bonds aren't attractive anymore because official inflation is slowing to an annual 15 percent from 25 percent, so they're losing 10 points," said Jorge Podesta, a fixed-income analyst at Buenos Aires-based brokerage Allaria Ledesma y Cia, Bloomberg News discloses. "We don't think this will change in the next few months," Bloomberg News quoted Mr. Podesta as saying. Changes Ahead? The consensus among economists is that a new administration, which will take office in December after elections Oct. 25, will improve economic data reporting, Bloomberg News notes. Still, investors aren't willing to take the risk due to the political uncertainty, ACM's Castillo said, Bloomberg News relays. "Whoever is elected needs to make data transparent," said Mr. Castillo, notes the report. "Everyone knows it needs to be done. The question is how and when," Mr. Castillo added. * * * 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'. On April 22, 2015, Moody's Investors Service expanded the portion of Argentina's debt that is rated (P)Caa2. The (P)Caa2 rating reflects the higher risk of default for both Argentina's restructured foreign legislation debt (as before) and, additionally now, its restructured local legislation foreign currency obligations, as compared with the risk of default on other debt instruments issued by Argentina. Argentina's local currency debt and its non-restructured foreign currency debt are rated Caa1. The debt that remains in default since Argentina's 2001 default is rated Ca. GALILEO GLOBAL: Moody's Rates Global Scale Bond Fund at B-bf ------------------------------------------------------------ Moody's Latin America Agente de Calificacion de Riesgo has assigned bond fund ratings to Galileo Global FCI, a newly launched fund that will be managed by Galileo Argentina SGFCI SA. The ratings assigned are as follows: -- Global scale bond fund rating: B-bf -- National scale bond fund rating: A-bf.ar "The ratings are based on the Fund's model portfolio composition that shows an adequate diversification of invested assets mainly in government, corporates and sub-sovereign bonds and asset backed securities with global ratings between B-bf/Aa-bf.ar and Caa- bf/Baa-bf.ar. The more liquid portion of the Fund is expected to be invested in local mutual funds and sight accounts. Based on this portfolio composition, the Fund is expected to maintain a maturity-adjusted weighted average credit quality consistent with a rating level of B-bf/A-bf.ar. This portfolio will attempt to provide a return similar to the local inflation rate with an average duration between one and three years," said Moody's lead analyst Carlos de Nevares. The new fund expects key shareholders to be institutional investors such as local insurance companies and high net worth individuals who have historically been clients of Galileo. Galileo Argentina SGFISA, part of a well-known local and independent mid-sized asset manager in the Argentinean mutual fund Industry with a market share of 1.0%. As of April 2015, Galileo managed approximately AR$1,681.7 million in assets. YPF SA: Strikes Oil in Southern Province of Rio Negro ----------------------------------------------------- Jorge Otaola at Reuters reports that Argentine state-controlled energy company YPF SA said it has discovered a conventional oil field in the southern province of Rio Negro with reserves of around 40 million barrels of oil. The "Manzano Grande x-1" well was drilled to a depth of around 3,000 meters (9,850 feet) and is the company's second discovery in the Los Caldenes block, YPF SA said in a statement obtained by Reuters. YPF has had the concession for the area since 2001, recently renewed to 2036. Argentina nationalized YPF in 2012 after accusing its former parent, Spain's Repsol SA, of under-investing and thereby generating a costly energy deficit for Latin America's No. 3 economy, the report ntoes. The country hopes that by increasing investment in the vast Vaca Muerta formation, also in southern Patagonia, it will be able to reduce energy imports, which are draining its low foreign reserves, the report adds. * * * As reported in the Troubled Company Reporter-Latin America on April 27, 2015, Fitch Ratings expects to assign a rating of 'CCC' to YPF S.A.'s (YPF) proposed senior unsecured bond issuance of up to USD1.5 billion with a 10-year bullet maturity. On April 22, the company announced in the Argentine Comision Nacional de Valores (CNV) it intended to issue up to USD500 million in international bonds; however, based on increased market interest the company is now looking to issue up to USD1.5 billion. The proceeds will be used to fund fixed asset investments in Argentina and working capital requirements. =========== B R A Z I L =========== USIMINAS: Moody's Says Halt of Blast Furnaces is Credit Negative ---------------------------------------------------------------- Moody's Investors Service commented that the temporary halt of blast furnaces is credit negative for Usinas Siderurgicas de Minas Gerais S.A. (Ba3 stable) because will reduce the company's annual pig iron output by 1.4 million tons and annual EBITDA generation capacity by an estimated BRL386 million (based on current EBITDA per ton), despite the cost savings related to the shutdown. ========================== C A Y M A N I S L A N D S ========================== ACT INVESTMENT: Shareholders' Final Meeting Set for June 9 ---------------------------------------------------------- The shareholders of Act Investment Ltd. will hold their final meeting on June 9, 2015, at 9:00 a.m., to receive the liquidator's report on the company's wind-up proceedings and property disposal. The company's liquidator is: Delio Jose De Leon Mela Salduba Building Top Floor East 53rd Street Urbanizacion Panama City Republic of Panama Telephone: (507) 269-2641 Facsimile: (507) 263-8079 ECP GALAXY: Shareholders' Final Meeting Set for June 2 ------------------------------------------------------ The shareholders of ECP Galaxy Holdings Limited will hold their final meeting on June 2, 2015, at 10:00 a.m., to receive the liquidator's report on the company's wind-up proceedings and property disposal. The company's liquidator is: Alex T. Krueger c/o Matt Bernardo One Lafayette Place, 3rd Floor Greenwich, Connecticut, 06830 United States of America Telephone: +1 (345) 914 4268 H&F SENSOR 1: Shareholders' Final Meeting Set for June 2 -------------------------------------------------------- The shareholders of H&F Sensor Cayman 1 Limited will hold their final meeting on June 2, 2015, at 10:00 a.m., to receive the liquidator's report on the company's wind-up proceedings and property disposal. The company's liquidator is: Arrie Park H&F Corporate Investor VI (Cayman), Ltd. Intertrust Corporate Services (Cayman) Limited 190 Elgin Avenue George Town Grand Cayman, KY1-9005 Cayman Islands c/o Niall Hanna Walkers 190 Elgin Avenue, George Town Telephone: +1 (345) 914 4201 H&F SENSOR 2: Shareholders' Final Meeting Set for June 2 -------------------------------------------------------- The shareholders of H&F Sensor Cayman 2 Limited will hold their final meeting on June 2, 2015, at 10:00 a.m., to receive the liquidator's report on the company's wind-up proceedings and property disposal. The company's liquidator is: Arrie Park H&F Corporate Investor VI (Cayman), Ltd. Intertrust Corporate Services (Cayman) Limited 190 Elgin Avenue George Town Grand Cayman, KY1-9005 Cayman Islands c/o Niall Hanna Walkers 190 Elgin Avenue, George Town Telephone: +1 (345) 914 4201 INVESTAR SEMICONDUCTOR: Members' Final Meeting Set for June 8 ------------------------------------------------------------- The members of Investar Semiconductor Development Fund, Inc. will hold their final meeting on June 8, 2015, to receive the liquidators' report on the company's wind-up proceedings and property disposal. The company's liquidators are: Susan Craig Lorna Carroll CDL Company Ltd. P.O. Box 31106 Grand Cayman KY1-1205 Cayman Islands INVESTAR SEMICONDUCTOR (II): Members' Final Meeting Set for June 8 ------------------------------------------------------------------ The members of Investar Semiconductor Development Fund, Inc. (II) LDC will hold their final meeting on June 8, 2015, to receive the liquidators' report on the company's wind-up proceedings and property disposal. The company's liquidators are: Susan Craig Lorna Carroll CDL Company Ltd. P.O. Box 31106 Grand Cayman KY1-1205 Cayman Islands JAPAN HOSPITALITY: Members' Final Meeting Set for June 4 -------------------------------------------------------- The members of Japan Hospitality Management Inc. will hold their final meeting on June 4, 2015, at 11:45 a.m., to receive the liquidator's report on the company's wind-up proceedings and property disposal. The company's liquidator is: Krys Global VL Services Limited Governor's Square, Building 6, 2nd Floor 23 Lime Tree Bay Avenue P.O. Box 21237 Grand Cayman KY1-1205 Cayman Islands LEHMAN BROTHERS: Members' Final Meeting Set for June 4 ------------------------------------------------------ The members of Lehman Brothers Private Convertible Fund Limited will hold their final meeting on June 4, 2015, at 11:15 a.m., to receive the liquidator's report on the company's wind-up proceedings and property disposal. The company's liquidator is: Krys Global VL Services Limited Governor's Square, Building 6, 2nd Floor 23 Lime Tree Bay Avenue P.O. Box 21237 Grand Cayman KY1-1205 Cayman Islands SSP ENERGY: Members' Final Meeting Set for June 2 ------------------------------------------------- The members of SSP Energy Ltd. will hold their final meeting on June 2, 2015, at 9:00 a.m., to receive the liquidator's report on the company's wind-up proceedings and property disposal. The company's liquidator is: Richard Fear c/o Tania Dons Telephone: (345) 814 7766 Facsimile: (345) 945 3902 P.O. Box 2681 Grand Cayman KY1-1111 Cayman Islands TANGERINE INTERNATIONAL: Members' Final Meeting Set for June 2 -------------------------------------------------------------- The members of Tangerine International Limited will hold their final meeting on June 2, 2015, at 10:00 a.m., to receive the liquidator's report on the company's wind-up proceedings and property disposal. The company's liquidator is: Jess Shakespeare c/o Kinetic Partners (Cayman) Limited The Harbour Centre 42 North Church Street P.O. Box 10387 Grand Cayman KY1-1004 Cayman Islands Telephone: (345) 623 9900 Facsimile: (345) 943 9900 =================================== D O M I N I C A N R E P U B L I C =================================== DOMINICAN REPUBLIC: Exec Says Mining Must Reflect Reality --------------------------------------------------------- Dominican Today reports that Dominican Republic Energy and Mines Minister Antonio Isa Conde demanded that sectors pick up the pace to pass the Land Use Law as soon as possible, as starting point for a comprehensive mining policy based on Dominican Republic's reality. Mr. Conde said mining shouldn't be managed like a ship adrift and instead developed with the island's fragile environment in mind, the people's development and their habitat, according to Dominican Today. "We live on an island whose ecosystem has been severely beaten and our reality isn't similar to other countries such as Chile, Argentina and Peru, with remarkable development in extractive mining," the report quoted Mr. Conde as saying. The report notes that Mr. Conde said despite that mining exploration and concessions in the country are being carefully studied, a Land Use Law is absolutely needed as a consistent policy. "Very dear people work in this project but I must say that it marches like syrup, very slow and should be accelerated, because it's an emergency in the country," the official said in an interview by journalists Edith Febles and Marino Zapete on Colorvision Channel 9, the report relays. In another topic, Mr. Conde revealed that he has already spoken with Barrick Gold Pueblo Viejo representatives to find solutions to the contaminated residues dam El Yagal, which he affirms requires urgent cleanup to reduce environmental risks, the report adds. ============= J A M A I C A ============= JAMAICA: Government Employment Declines --------------------------------------- RJR News reports that the number of people employed by the Jamaican State fell by 13 per cent last year. That's the finding of the 2014 Economic and Social Survey of Jamaica, according to RJR News. The report notes that the survey found that the number of government employees was under 146,000 at the end of the year. The decline has been attributed to efforts to reduce the number of public sector workers, to attrition or the elimination of vacant posts to reduce the wage bill as a percentage of Gross Domestic Product (GDP), the report notes. During the same period, the number of persons employed by the private sector increased by 2 per cent, the report relays. * * * As reported in the Troubled Company Reporter-Latin America on Feb. 23, 2015, Fitch Ratings has affirmed Jamaica's long-term foreign and local currency Issuer Default Ratings (IDRs) at 'B-'. The issue ratings on Jamaica's senior unsecured foreign and local currency bonds are also affirmed at 'B-'. The Rating Outlooks on the long-term IDRs are revised to Positive from Stable. The Country Ceiling is affirmed at 'B' and the short-term foreign currency IDR at 'B'. JAMAICA: BOJ Reveals Growth in Construction Sector in Jan-March --------------------------------------------------------------- RJR News reports that the Bank of Jamaica disclosed that the construction sector recorded growth during the January to March quarter this year. This was in keeping with a trend observed since the March 2013 quarter. The Central Bank said the industry's performance occurred in a context of infrastructural projects under the Major Infrastructural Development Program and greater expenditure on hotel projects, according to RJR News. Economic activity in the industry was however moderated by lower expenditure on some major infrastructure projects, particularly Highway 2000, as well as a contraction in housing starts by the National Housing Trust, the report notes. Mining, Quarrying During the first three months of this year there was also marginal growth in the Mining and Quarrying sector, in contrast to declines for the preceding three quarters, the report relates. The BoJ, in its quarterly monetary policy report, said the industry's performance was underpinned by marginal increases in alumina and crude bauxite production, the report discloses. This resulted from increased utilization at one alumina plant, the report says. Regarding crude bauxite, the expansion for the March 2015 quarter continued the upward trend, evident since the March 2014 quarter, although at a pace significantly below the average growth recorded in the previous three quarters, the report adds. * * * As reported in the Troubled Company Reporter-Latin America on Feb. 23, 2015, Fitch Ratings has affirmed Jamaica's long-term foreign and local currency Issuer Default Ratings (IDRs) at 'B-'. The issue ratings on Jamaica's senior unsecured foreign and local currency bonds are also affirmed at 'B-'. The Rating Outlooks on the long-term IDRs are revised to Positive from Stable. The Country Ceiling is affirmed at 'B' and the short-term foreign currency IDR at 'B'. =========== M E X I C O =========== ELEMENTIA S.A.: Fitch Affirms 'BB+' IDR; Outlook Stable ------------------------------------------------------- Fitch Ratings has affirmed Elementia, S.A. de C.V.'s (Elementia) foreign and local currency Issuer Default Ratings (IDRs) at 'BB+' as well as its long-term national scale rating at 'A+(mex)'. The Rating Outlook is Stable. Elementia's ratings reflect its strong business profile characterized by geographic and product line diversification, leading market shares in the regions where it has presence, supported by highly recognized brands and a well-developed distribution network, stable operating results and its shareholders' strength. Factors that limit Elementia's ratings are the company's history of high leverage, industry cyclicality and input cost volatility. KEY RATING DRIVERS Continued Business Diversification The company's business position is supported by its diversified revenue base. For the LTM ended March, 2015 net sales and EBITDA contribution by business line was: metals division (mainly copper products) 48% and 32% respectively, building systems (including plastics division) 38% and 42% respectively, and Cement 13% and 21%, respectively. Elementia's cash flow and profitability are supported by its pricing strategy and by the contribution of its cement division, its highest margin business. In its metal segment, the company applies a cost-plus margin formula, allowing it to pass-through metal price variations to end customers. The company's strategy will continue to focus on growing its current operations and through acquisitions. In December 2014, Elementia finalized the acquisition of the remaining 47% stake in ELC Tenedora de Cementos, S.A.P.I. de C.V., its joint venture with Financiere Lafarge S.A.S. (Lafarge), and has paid USD180 million of the USD225 million total purchase price. The purchase agreement contemplates a final payment of the USD45 million remaining in December 2015, a year after completion of the transaction. Negative FCF during 2015-2016 During 2014, the company's free cash flow (FCF), measured as cash flow from operations after interest paid (CFFO), capex and dividends was positive MXN749 million comparing favorably to negative MXN100 million during 2013, primarily as a result of lower capex. Fitch expects Elementia's FCF to be negative in aggregate during 2015 and 2016 as a result of expansionary investments in the company's cement business. These investments will increase Elementia's cement capacity by 1.5 million tons per year to 3.5 million tons per year. Fitch's base case FCF projection incorporates CFFO of approximately MXN1.6 billion in 2015 and MXN1.9 billion in 2016, and no dividend payments. The company plans to finance its USD250 million expansion of its Tula, Hidalgo cement plant through a combination of internal and external funding sources including an equity issuance. Management has filed documentation for an initial public offering (IPO) in the Mexican Bolsa. While Fitch has not included an equity issuance in its base case, equity proceeds used to fund the company's growth plans would be viewed positively for Elementia's credit quality as it would support deleveraging the balance sheet and help stabilize its credit metrics. High Leverage Constrains Rating Elementia's leverage has been historically volatile partly due to greenfield investments in the company's cement division as well as asset acquisitions and dispositions within the company's business portfolio. Just during the last eight quarters, Elementia's net leverage on a LTM basis has fluctuated between a peak of 3.4x in September 2013 to a low of 1.5x in September 2014. As of March, 2015 net leverage was 2.7x, above management's long-term target of 2.0x, primarily due to the purchase of the Lafarge assets. Gross leverage as of March 2015 was 3.8x, higher than the 2.9x registered in the same period a year ago and similar to the 3.9x recorded as of Dec. 31, 2014. In Fitch's view, leverage volatility should moderate considering the full contribution of Elementia's cement business and an equity issuance would further increase its flexibility to finance current projects and pay down existing debt. Although Fitch considers that Elementia currently has flexibility within its 'BB+' rating to continue to finance its growth strategy without raising equity, deterioration in leverage ratios or large debt financed acquisitions or investments could pressure the company's credit profile. Adequate Liquidity As of March 31, 2015, the company had sufficient liquidity to meet its upcoming debt obligation of MXN3.0 billion of Certificados Bursatiles due in October 2015. Cash and cash equivalent balance was MXN3.1 billion and covers its short-term debt by 1.0x; the company has no other significant debt maturities until 2025. Further supporting the company's liquidity position are USD300 million of undrawn committed credit lines maturing in 2018. Fitch expects that Elementia's internally generated cash flows and financial flexibility will allow it to manage its debt profile. Environmental Regulations Could Limit Operations The company uses chrysotile fibers (the sole form of asbestos still in use) for part of its production of fiber-cement products, which are sold locally where permitted in the North and South American regions. Elementia has been investing in capacity production to use different fibers, such as cellulose fiber and polyvinyl alcohol (PVA), with the majority of its manufacturing facilities already aligned to produce with different technologies. The use of this fiber is in line with international standards and local environmental regulations. Even though Elementia has not been subject to legal claims regarding the use of chrysotile in its products, future claims cannot be ruled out, resulting in uncertain litigation risk. KEY ASSUMPTIONS -- Low double digit revenue growth in 2015 reflecting higher capacity utilization and price improvement in cement division; stable to low single digit volumes growth and strong USD in metals division; -- Mid to high single digit revenue growth for 2016-2017; -- EBITDA margin around 17% from 2015-2017; -- Cash and cash equivalents balances of around MXN1 billion; -- Partial use of committed credit lines to fund debt payments or investments; -- Net debt/EBITDA at or below 2.8x for 2015-2016. RATING SENSITIVITIES Negative factors that could affect the company's credit profile include, among others, declining market shares along business lines and loss of competitive position, reduced operating cash flows and profitability; and reduced liquidity; reaching or exceeding financial covenants could also put additional pressure on the company's credit quality. Expectations of total debt/EBITDA above 4x or net debt/EBITDA above 3.5x would likely result in negative rating actions. Positive rating actions could be driven by strengthening of Elementia's business and financial positions. Positive FCF generation and stable operating results through industry and economic cycles resulting in leverage levels of total debt/ EBITDA around 2.5x and net debt/EBITDA below 2x would have positive implications for the rating. Significant delevering resulting from an IPO would improve the company's financial position and would be viewed positively. Fitch has affirmed Elementia's ratings as: -- Long-term Issuer Default Rating (IDR) at 'BB+'; -- Long-term Local Currency IDR at 'BB+'; -- Long-term National Scale Rating at 'A+(mex)'; -- Sr. unsecured USD425 million notes issuance at 'BB+'; -- MXN3,000 million Local Certificados Bursatiles due in 2015 at 'A+(mex)'. GRUPO TMM: Auditor Expresses Going Concern Doubt ------------------------------------------------ Grupo TMM, S.A.B., reported a net loss of MXN515 million on MXN2.87 billion of revenue from transportation in 2014, compared with a net loss of MXN551 million on MXN2.83 billion of revenue from transportation in the prior year. Salles, Sainz-Grant Thornton, S.C., expressed substantial doubt about the Company's ability to continue as a going concern, citing that the Company has incurred recurring losses, principally as a result of its comprehensive financing cost. The Company's balance sheet at Dec. 31, 2014, showed MXN12.9 billion in total assets, MXN12.3 billion in total liabilities and total stockholders' equity of MXN637 million. A copy of the Form 20-F for the year ended Dec. 31, 2014, filed with the U.S. Securities and Exchange Commission is available at: http://is.gd/orAeHI Mexico City-based Grupo TMM, S.A.B. (OTC: GTMAY and BMV: TMM A) is a Latin American intermodal transportation company. Through its branch offices and network of subsidiary companies, TMM provides ocean and land transportation services. RAMOS ARIZPE: Moody's Ups Issuer Ratings to Ba3/Baa1.mx ------------------------------------------------------- Moody's de Mexico upgraded the Municipality of Ramos Arizpe issuer ratings to Ba3/Baa1.mx from B1/Baa2.mx. The outlook on the ratings is stable. The upgrade of Ramos Arizpe's ratings reflects (1) the municipality's persistently high own-source revenues, (2) positive gross operating balances, and (3) declining debt levels. Between 2010 and 2014, Ramos Arizpe's discretionary own source revenues averaged 55.7% of operating revenues, one of the highest levels among Mexican municipalities rated by Moody's. This has resulted in an improvement in liquidity above the level exhibited by B1-rated municipalities. Between 2010 and 2014, Ramos Arizpe's operating revenues increased at a CAGR of 11% or roughly the same pace of operating expenditures (CAGR of 12%). This resulted in high operating balances averaging 17.2% of operating revenues throughout that period and well above the median of Mexican municipalities rated in the B1 category. Although Moody's expect Ramos Arizpe's operating balances to moderate in 2015 and 2016, they will still be in line with the credit profile of municipalities rated in Ba3. Moody's also expect that the municipal water company (Compa¤¡a de Aguas de Ramos Arizpe, COMPARA, unrated) will exert pressure on the municipality's finances in the long-run. Ramos Arizpe's debt levels declined from 42% to 12% of operating revenues between 2010 and 2014, a low level. The change in the municipality's financing mix from short-term debt to long-term banking obligations has resulted in lower debt servicing needs, passing from 7% in 2011 to 3.7% of total revenues in 2014. Ramos Arizpe's policy of not contracting debt is balanced by an expansion in current and capital expenditures. As a result, Moody's expect Ramos Arizpe to exhibit roughly balanced gross operating balances in the next two years. Sustained recording of gross operating surpluses, combined with declining debt levels and sustained improvements in the municipality's liquidity position could exert upward pressure on Ramos Arizpe's issuer ratings. Conversely, persistent deterioration in the municipality's gross operating results, increasing debt levels, and deterioration in the liquidity position, and/or reliance on short-term financing, would exert downward pressure on Ramos Arizpe's issuer ratings. The principal 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 Municipality of Ramos Arizpe's rating is between Jan. 1, 2010 and Dec. 31, 2014. *********** 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 * * *