/raid1/www/Hosts/bankrupt/TCRLA_Public/150610.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, June 10, 2015, Vol. 16, No. 113
Headlines
A R G E N T I N A
BUENOS AIRES: Moody's Rates US$1,033MM Sr. Unsec. Notes Issue Caa2
FIDEICOMISO FINANCIERO: Moody's Rates ARS55.559MM Certs at Caa3
RAGHSA S.A.: Moody's Rates US$100MM Sr. Unsec. Notes 'Baa3.ar'
RAGHSA S.A.: Moody's Puts Caa1 Global FC Rating to $100MM Notes
YPF SA: Finds Unconventional Gas in Southern Argentina
B R A Z I L
BIOSEV S.A.: Moody's Withdraws B1 CFR for Business Reasons
C A Y M A N I S L A N D S
AGRICOLA SENIOR: Moody's Assigns (P)Ba2 Rating to Notes Issuance
BLUE SKY: Creditors' Proofs of Debt Due June 15
GS PEP II: Shareholder to Hear Wind-Up Report on July 3
GS PEP III: Shareholder to Hear Wind-Up Report on July 3
GS PRIVATE: Shareholders' Final Meeting Set for July 3
HAV3 (10): Shareholder to Hear Wind-Up Report on July 3
MAHOGANY LTD: Shareholders' Final Meeting Set for June 26
PRESTIGE AIRCRAFT: Creditors' Proofs of Debt Due June 30
RENUK LIMITED: Creditors' Proofs of Debt Due June 15
SHAMROCK: Members to Hold Final Meeting on June 22
VENTRA (BARBADOS): Shareholders' Final Meeting Set for July 21
C H I L E
LATAM AIRLINES: Moody's Rates Prop. $500MM Sr. Unsec. Notes at Ba3
SMU S.A.: Moody's Upgrades CFR & $300M Unsec. Notes Rating to Caa1
C O S T A R I C A
BANCO DE COSTA RICA: Moody's Affirms Ba1 LT Sr. Unsec. Debt Rating
D O M I N I C A N R E P U B L I C
* DOMINICAN REPUBLIC: Big Business Wants Customs Law Passed Now
J A M A I C A
OLINT CORP: Court Urges to Drop US Extradition Request for Ex Head
* JAMAICA: Service Interruption Remains Main Problem for Utilities
P U E R T O R I C O
PUERTO RICO CABLE: Moody's Withdraws B2 CFR After Acquisition
T R I N I D A D & T O B A G O
CL FIN'L: CLICO Former Directors Paid Millions
CL FIN'L: Wrong to Pay CLICO Directors, Ex Finance Minister Says
TRINIDAD & TOBAGO: Postal Workers Want 18.5% More
U R U G U A Y
ADMINISTRACION NACIONAL: S&P Raises CCR to 'BB+'; Outlook Stable
- - - - -
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A R G E N T I N A
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BUENOS AIRES: Moody's Rates US$1,033MM Sr. Unsec. Notes Issue Caa2
------------------------------------------------------------------
Moody's Investors Service assigned a Caa2 (Global Scale Foreign
Currency) ratings to the Senior Unsecured Notes to be issued by
the Province of Buenos Aires for up to USD1,033 million
approximately. The ratings are in line with the province's long
term foreign currency issuer ratings, which carry a negative
outlook.
On June 2, 2015 the Province of Buenos Aires priced some USD500
million of these new Notes at a 9.95% coupon rate. The bond
issuance has been authorized by the Provincial Law N14652, by
Governor's Decree N§59 of 2015 and by Resolution N106 of the
provincial Ministry of Economy. The Province of Buenos Aires will
use the proceeds to prepay outstanding provincial debt as well as
to fund infrastructure and/or social projects during 2015. At the
same time, the Province launched a bond exchange offer for up to
USD500 million under a USD1,050 million 11.75% coupon rate Notes
maturing in October 2015. After the settlement of the first
tranche of these new Notes for USD500 million and conclusion of
the mentioned exchange, both tranches will be consolidated and
will form a single bond series of up to USD1,033 million.
The rated bonds, which constitute direct, general, unconditional
and unsubordinated obligations of the province, will be
denominated and payable in US dollars with a maturity of six
years. The bonds will amortize in two annual installments
equivalent to 50% of the outstanding principal in 2020 and in 2021
and pay 9.95% annual interest rate on a semi-annual basis. The
bonds will be subject to the State of New York Law.
The assigned ratings are based on preliminary documentation
received by Moody's as of the rating assignment date. Moody's does
not expect changes to the documentation reviewed over this period
nor anticipates changes in the main conditions that the bonds will
carry. Should issuance conditions and/or final documentation of
these bonds deviate from the original ones submitted and reviewed
by the rating agency, Moody's will assess the impact that these
differences may have on the ratings and act accordingly.
Given the negative outlook on the issuer ratings, Moody's does not
expect upward pressures in the Province of Buenos Aires's ratings
in the near to medium term. However, a change in Argentina's
sovereign outlook back to stable could lead to a change in the
outlook back to stable of the Province of Buenos Aires.
Conversely, a sharp deterioration of the Province of Buenos
Aires's financial results, coupled with materially higher debt
levels could add downward pressure to the assigned ratings. The
province of Buenos Aires could also be downgraded if the negative
outlook on the sovereign rating materializes into a rating
downgrade.
FIDEICOMISO FINANCIERO: Moody's Rates ARS55.559MM Certs at Caa3
---------------------------------------------------------------
Moody's Latin America Agente de Calificacion de Riesgo S.A. rated
Fideicomiso Financiero Pvcred Serie XXIII. This transaction will
be issued by TMF Trust Company (Argentina) S.A. -- acting solely
in its capacity as issuer and trustee.
The securities for this transaction have not yet been placed in
the market. The transaction is pending approval from the Comision
Nacional de Valores, if any assumption or factor Moody's considers
when assigning the ratings change before closing, the ratings may
also change.
-- ARS116,327,000 in Class A Floating Rate Debt Securities
(VRDA TV) of "Fideicomiso Financiero Pvcred Serie XXIII",
rated Aaa.ar (sf) (Argentine National Scale) and B1 (sf)
(Global Scale, Local Currency)
-- ARS1,736,000 in Class B Floating Rate Debt Securities (VRDB
TV) of "Fideicomiso Financiero Pvcred Serie XXIII", rated
Baa2.ar (sf) (Argentine National Scale) and Caa1 (sf)
(Global Scale, Local Currency)
-- ARS55,559,000 in Certificates (CP) of "Fideicomiso
Financiero Pvcred Serie XXIII", rated Caa1.ar (sf)
(Argentine National Scale) and Caa3 (sf) (Global Scale,
Local Currency).
The rated securities are payable from the cashflow coming from the
assets of the trust, which is an amortizing pool of approximately
11,692 eligible personal loans denominated in Argentine pesos,
bearing fixed interest rate, originated by Pvcred, a financial
company owned by Comafi's Group in Argentina. Only the
installments due after October 31, 2015 will be assigned to the
trust.
The VRDA TV will bear a floating interest rate (BADLAR plus
400bps). The VRDA TV's interest rate will never be higher than 32%
or lower than 20%. The VRDB will also bear a floating interest
rate (BADLAR plus 500bps). The VRDB TV's interest rate will never
be higher than 34% or lower than 22%.
Overall credit enhancement is comprised of subordination, various
reserve funds and excess spread.
The transaction has initial subordination levels of 29.64% for the
VRDA TV and 28.59% for the VRDB TV, calculated over the pool's
principal balance as of October 31, 2015. The subordination levels
will increase overtime due to the turbo sequential payment
structure. The transaction will have a grace period for principal
and interest payment until December 2015.
The transaction also benefits from an estimated 48.11% annual
excess spread, before considering losses, taxes or prepayments and
calculated at the caps of 32% for the VRDA TV and 34% for the VRDB
TV.
Factors that would lead to an upgrade or downgrade of the rating:
Factors that may lead to a downgrade of the ratings include an
increase in delinquency levels beyond the level Moody's assumed
when rating this transaction. Although Moody's analyzed the
historical performance data of previous transactions and similar
receivables originated by Pvcred, the actual performance of the
securitized pool may be affected, among others, by the economic
activity, high inflation rates compared with nominal salaries
increases and the unemployment rate in Argentina.
Factors that may lead to an upgrade of the ratings include the
building of credit enhancement over time due to the turbo
sequential payment structure, when compared with the level of
projected losses in the securitized pool.
Moody's considered the credit enhancement provided in this
transaction through the initial subordination levels for each
rated class, as well as the historical performance of Pvcred
portfolio. In addition, Moody's considered factors common to
consumer loans securitizations such as delinquencies, prepayments
and losses; as well as specific factors related to the Argentine
market, such as the probability of an increase in losses if there
are changes in the macroeconomic scenario in Argentina.
These factors were incorporated in a cash flow model that takes
into account all the relevant features of the transaction's assets
and liabilities. Monte Carlo simulations were run, which
determines the expected loss for the rated securities.
Moody's analyzed the historical performance data of previous
transactions and similar receivables originated by Pvcred, ranging
from January 2011 to December 2014. Moody's believes that
inflation will accelerate and that nominal increases in salaries
and pensions will not keep up with inflation. A decline in real
income will deteriorate the credit quality of peso-denominated
collateral like the personal loans securitized in this
transaction. As a result, Moody's has increased some of the
default assumptions in the securitized pools to account for this
scenario. Moody's notes that there is significant uncertainty
around key macroeconomic variables in Argentina, including
inflation rates, salary increases compared to inflation, and
economic activity, which have an impact on future performance of
this transaction.
In assigning the rating to this transaction, Moody's assumed a
lognormal distribution of losses for each one of the different
securitized subpools: for the PVCred loans, a mean of 18% and a
coefficient of variation of 60%; for the "Cuotas Ya" loans, a mean
of 28% and a coefficient of variation of 60% and for the
"Refinanciados" loans, a mean of 41% and a coefficient of
variation of 60%. Also, Moody's assumed a lognormal distribution
for prepayments with a mean of 45% and a coefficient of variation
of 70%.
Servicer default was modeled by simulating the default of Banco
Comafi S.A. as the servicer consistent with its current rating of
Caa1/Baa1.ar. In the scenarios where the servicer defaults,
Moody's assumed that the defaults on the pool would increase by 20
percentage points.
The model results showed 1.61% expected loss for Class A Floating
Rate Debt Securities, a 13.72% for the Class B Floating Rate Debt
Securities and 32.08% for the Certificates.
Moody's also evaluated the back-up servicing arrangements in the
transaction. If Pvcred is removed as collection agent, Banco
Comafi will be appointed as the back-up collection agent.
Stress Scenarios:
Moody's ran several stress scenarios, including increases in the
default rate assumptions. If default rates were increased 6% from
the base case scenario, the ratings of the Class A Floating Rate
Securities, the Class B Floating Rate Securities and of the
Certificates would likely be downgraded to B2 (sf), Caa3 (sf) and
Ca (sf) respectively.
The principal methodology used in this rating was "Moody's
Approach to Rating Consumer Loan-Backed ABS " published in January
2015.
RAGHSA S.A.: Moody's Rates US$100MM Sr. Unsec. Notes 'Baa3.ar'
--------------------------------------------------------------
Moody's Latin America assigned a Baa3.ar national scale foreign
currency rating to Raghsa S.A.'s proposed USD100 million senior
unsecured notes. At the same time Moody's Investors Service has
assigned a Caa1 global foreign currency rating to the proposed
notes. The proposed notes have final maturity in 2021, being 50%
due in 2020 and the remaining 50% at maturity. The outlook on the
ratings is negative.
Raghsa is offering bondholders of its 8.50% notes due 2017 the
possibility to exchange any and all of their holdings for newly
issued 8.0% notes due 2021. For each USD1.0 in principal amount of
existing notes bondholders will receive USD1.0 in principal amount
of proposed notes. As a result, Raghsa will not receive any cash
proceeds from the issuance of the proposed notes and its
indebtedness will not be increased. The deal is dependent on the
participation of at least 70% of the series' bondholders and will
not bind dissenting creditors. The deal is also dependant on
obtaining consent of at least 50% of the series' bondholders to a
proposed amendment to conform certain restrictive covenants and
events of default under the existing notes to the corresponding
terms and conditions of the proposed notes.
The rating of the proposed notes assumes that the final
transaction documents will not be materially different from draft
legal documentation reviewed by Moody's to date and assume that
these agreements are legally valid, binding and enforceable.
The Caa1/Baa3.ar ratings reflect Raghsa's strong brand name and
position in the local market, good asset quality and its
management's solid track record in the industry. The company's
high occupancy rates and healthy tenants base also support the
ratings and business model. Other factors supporting the ratings
are Raghsa's good credit metrics and moderate leverage for the
rating category.
Key rating challenges are Raghsa's small size relative to industry
peers, its portfolio concentration in the city of Buenos Aires and
historical margin volatility. Raghsa's aggressive growth plans are
also a key rating challenge, in particular for a private, family
owned company, with limited access to external financing. This
challenge is somewhat mitigated by the expected increase in lease
revenues, which represents a more stable earnings source. Raghsa
is exposed to FX risk, although this is mitigated by the fact that
lease fees are set in US dollars but are payable in Argentine
pesos.
In the proposed transaction, Raghsa offers to bondholders of its
8.50% notes due 2017 the possibility to exchange any and all of
their holdings for newly issued U.S. Dollar-denominated 8% notes
due 2021. The deal is dependent on the participation of at least
70% of the series' bondholders and will not bind dissenting
creditors. Raghsa's primary purpose for the exchange offer is to
extend the maturity of its outstanding financial debt.
Accordingly, the issuance of the proposed notes will not result in
any increase in Raghsa's indebtedness.
The deal is also dependant on obtaining consent of more than 50%
of the series' bondholders to a proposed amendment to conform
certain restrictive covenants and events of default under the
existing notes to the corresponding terms and conditions of the
proposed notes. Main amendments to the indenture are: (i) Raghsa
will not incur in any indebtedness unless the consolidated
interest coverage ratio is no less than 2.0 times (previously
stated as total consolidated assets to net debt of no less than
2.0 times); (ii) the increase of total Indebtedness allowed "for
the purpose of acquiring or financing all or any part of the
purchase price or cost of construction or improvement of property
or equipment" to USD90 million, from USD50 million; (iii) the
increase in other "additional indebtedness" allowed to USD30
million, from USD10 million. The notes have other various
covenants including: other limitations on the incurrence of
additional debt, guarantees and restricted payments, which are not
subject to amendment.
The negative outlook mainly reflects Moody's negative outlook for
the government of Argentina and the view that the creditworthiness
of the company cannot be completely de-linked from the credit
quality of the Argentine government, and thus its ratings need to
closely reflect the risk that they share with the sovereign.
Moody's believes that a weaker sovereign has the potential to
create a ratings drag on companies operating within its borders,
and therefore it is appropriate to limit the extent to which
issuers can be rated higher than the sovereign, according to
Moody's Rating Implementation Guidance "How Sovereign Credit
Quality May Affect Other Ratings" published on 16 March 2015, and
available on www.moodys.com.
The ratings could experience upward pressure if Argentina's Caa1
government bond rating would be upgraded. In addition, upward
rating momentum could occur should the company continue to make
progress in its growth strategy accompanied by material
improvements in reducing margins volatility. Quantitatively a
rating upgrade would require that total assets get closer to
USD500 million (USD605 million as of fiscal year ended on February
28, 2015) and EBITDA margin volatility is reduced to less than 10%
(58.6% as of fiscal year ended on February 28, 2015).
A rating downgrade would likely result from continued margins
volatility or from a significant decline on Raghsa's profit
margins such that adjusted EBITDA margin drops below 35% (96.3% as
of fiscal year ended on February 28, 2015). Any increase in debt
or encumbering of its portfolio could also prompt a rating
downgrade. In particular, if debt to adjusted EBITDA exceeds 8.0
times (4.0 times as of fiscal year ended on February 28, 2015) or
if the ratio of debt to gross assets exceeds 80% (17.5% as of
fiscal year ended on February 28, 2015), the ratings could be
subject to downward pressure.
Mainly located in the city Buenos Aires, Raghsa is an Argentine
family owned fully integrated developer that has been engaged in
the construction, development, ownership and leasing premium
office, commercial and residential buildings for more than 45
years. Raghsa currently owns four office buildings, comprising
93,634 square meters (sqm) of leasable area. In addition, Raghsa
has two projects underway, one office building expected to be
finished in the first half of 2016 (with a total leasable area of
approximately 15,000 sqm) and another still to begin construction
(which is expected to add 64,000 sqm of leasable office area). For
the fiscal year ended on February 28, 2015, Raghsa's reported
total assets of ARS5.3 billion (approximately USD605 million) and
equity of ARS3.0 billion (approximately USD341 million).
RAGHSA S.A.: Moody's Puts Caa1 Global FC Rating to $100MM Notes
---------------------------------------------------------------
Moody's Investors Service assigned a Caa1 global foreign currency
rating to Raghsa S.A.'s proposed USD100 million senior unsecured
notes. The proposed notes have final maturity in 2021, being 50%
due in 2020 and the remaining 50% at maturity. The outlook is
negative.
Raghsa is offering bondholders of its 8.50% notes due 2017 the
possibility to exchange any and all of their holdings for newly
issued 8.0% notes due 2021. For each USD1.0 in principal amount of
existing notes bondholders will receive USD1.0 in principal amount
of proposed notes. As a result, Raghsa will not receive any cash
proceeds from the issuance of the proposed notes and its
indebtedness will not be increased. The deal is dependent on the
participation of at least 70% of the series' bondholders and will
not bind dissenting creditors. The deal is also dependant on
obtaining consent of at least 50% of the series' bondholders to a
proposed amendment to conform certain restrictive covenants and
events of default under the existing notes to the corresponding
terms and conditions of the proposed notes .
The rating of the proposed notes assumes that the final
transaction documents will not be materially different from draft
legal documentation reviewed by Moody's to date and assume that
these agreements are legally valid, binding and enforceable.
The Caa1 rating reflects Raghsa's strong brand name and position
in the local market, good asset quality and its management's solid
track record in the industry. The company's high occupancy rates
and healthy tenants base also supports the rating and business
model. Other factors supporting the rating are Raghsa's good
credit metrics and moderate leverage for the rating category.
Key rating challenges are Raghsa's small size relative to industry
peers, its portfolio concentration in the city of Buenos Aires and
historical margin volatility. Raghsa's aggressive growth plans are
also a key rating challenge, in particular for a private, family
owned company, with limited access to external financing. This
challenge is somewhat mitigated by the expected increase in lease
revenues, which represents a more stable earnings source. Raghsa
is exposed to FX risk, although this is mitigated by the fact that
lease fees are set in US dollars but are payable in Argentine
pesos.
In the proposed transaction, Raghsa offers to bondholders of its
8.50% notes due 2017 the possibility to exchange any and all of
their holdings for newly issued US Dollar-denominated 8.0% notes
due 2021. The deal is dependent on the participation of at least
70% of the series' bondholders and will not bind dissenting
creditors. Raghsa's primary purpose for the exchange offer is to
extend the maturity of its outstanding financial debt.
Accordingly, the issuance of the proposed notes will not result in
any increase in Raghsa's indebtedness.
The deal is also dependant on obtaining consent of at least 50% of
the series' bondholders to a proposed amendment to conform certain
restrictive covenants and events of default under the existing
notes to the corresponding terms and conditions of the proposed
notes. Main amendments to the indenture are: (i) Raghsa will not
incur in any indebtedness unless the consolidated interest
coverage ratio is no less than 2.0 times (previously stated as
total consolidated assets to net debt of no less than 2.0 times);
(ii) the increase of total Indebtedness allowed "for the purpose
of acquiring or financing all or any part of the purchase price or
cost of construction or improvement of property or equipment" to
USD90 million, from USD50 million; (iii) the increase in other
"additional indebtedness" allowed to USD30 million, from USD10
million. The notes have other various covenants including: other
limitations on the incurrence of additional debt, guarantees and
restricted payments, which are not subject to amendment.
The negative outlook mainly reflects Moody's negative outlook for
the government of Argentina and the view that the creditworthiness
of the company cannot be completely de-linked from the credit
quality of the Argentine government, and thus its ratings need to
closely reflect the risk that they share with the sovereign.
Moody's believes that a weaker sovereign has the potential to
create a ratings drag on companies operating within its borders,
and therefore it is appropriate to limit the extent to which
issuers can be rated higher than the sovereign, according to
Moody's Rating Implementation Guidance "How Sovereign Credit
Quality May Affect Other Ratings" published on 16 March 2015, and
available on www.moodys.com.
The rating could experience upward pressure if Argentina's Caa1
government bond rating would be upgraded. In addition, upward
rating momentum could occur should the company continue to make
progress in its growth strategy accompanied by material
improvements in reducing margins volatility. Quantitatively a
rating upgrade would require that total assets get closer to
USD500 million (USD605 million as of fiscal year ended on February
28, 2015) and EBITDA margin volatility is reduced to less than 10%
(58.6% as of fiscal year ended on February 28, 2015).
A rating downgrade would likely result from continued margins
volatility or from a significant decline on Raghsa's profit
margins such that adjusted EBITDA margin drops below 35% (96.3% as
of fiscal year ended on February 28, 2015). Any increase in debt
or encumbering of its portfolio could also prompt a rating
downgrade. In particular, if debt to adjusted EBITDA exceeds 8.0
times (4.0 times as of fiscal year ended on February 28, 2015) or
if the ratio of debt to gross assets exceeds 80% (17.5% as of
fiscal year ended on February 28, 2015), the ratings could be
subject to downward pressure.
Mainly located in the city Buenos Aires, Raghsa is an Argentine
family owned fully integrated developer that has been engaged in
the construction, development, ownership and leasing premium
office, commercial and residential buildings for more than 45
years. Raghsa currently owns four office buildings, comprising
93,634 square meters (sqm) of leasable area. In addition, Raghsa
has two projects underway, one office building expected to be
finished in the first half of 2016 (with a total leasable area of
approximately 15,000 sqm) and another still to begin construction
(which is expected to add 64,000 sqm of leasable office area). For
the fiscal year ended on February 28, 2015, Raghsa's reported
total assets of ARS5.3 billion (approximately USD605 million) and
equity of ARS3.0 billion (approximately USD341 million).
YPF SA: Finds Unconventional Gas in Southern Argentina
------------------------------------------------------
EFE News reports that Argentine state-controlled oil company YPF
SA said it found unconventional gas in the Vaca Muerta shale play
in the southern province of Neuquen.
The La Ribera x-1 well is located about 25 kilometers (15 miles)
from the town of Anelo and some 90 kilometers (56 miles) from the
capital of the province, YPF SA said in a statement obtained by
EFE News.
"This discovery raises the expectations about the wealth and
productivity of the Vaca Muerta formation in areas near those
currently undergoing massive development," YPF SA said, the report
discloses.
Initial tests indicate high potential for gas production, the oil
company said, the report relates.
This is the second unconventional resource discovery made in less
than a month in Argentina, the report says.
YPF SA said on May 25 that it discovered unconventional oil in Rio
Negro, another province in southern Argentina, the report relates.
YPF disclosed the discovery of non-conventional oil and natural
gas reserves in Vaca Muerta in 2011 after successful results in
the exploration phase, 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.
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B R A Z I L
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BIOSEV S.A.: Moody's Withdraws B1 CFR for Business Reasons
----------------------------------------------------------
Moody's Investors Service has withdrawn the corporate family
rating assigned to Biosev S.A. as well as the stable outlook.
Moody's has withdrawn the rating for its own business reasons.
The last rating action on Biosev was taken on Feb. 28, 2014 when
Moody's downgraded the company's corporate family rating to B1
from Ba3, outlook stable.
Biosev is the second largest sugar and ethanol producer in Brazil,
with a sugarcane crushing capacity of 36.4 million tons. The
company generated BRL 3.9 billion in revenues for the LTM period
ended in December 2014 with EBITDA margin of 28%. About 77% of the
company's sugar sales volumes are exported to large international
trading houses. Domestically, the company commercializes sugar
through two regional brands and key clients include large domestic
and international food and beverage companies. Around 80% of the
company's ethanol production is sold domestically to large
retailers such as Petrobras, Raizen, Ipiranga and Ale.
The company is part of the Louis Dreyfus Commodities Holdings
Group (LDCH) (unrated), which has over 160 years of presence in
the global commodities market, over 70 years in Brazil, and is a
major player in the sugar, rice, cotton, orange juice, soybeans
and derivatives, corn and wheat markets, among others.
==========================
C A Y M A N I S L A N D S
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AGRICOLA SENIOR: Moody's Assigns (P)Ba2 Rating to Notes Issuance
----------------------------------------------------------------
Moody's Investors Service assigned a (P)Ba2 foreign currency
senior debt rating to a proposed issuance of 5-year fixed rate
senior notes by Agricola Senior Trust, a Cayman Islands-based
trust established for the sole purpose of acquiring a 100%
participation interest in a senior unsecured loan made by Bank of
America, N.A. (BofA) to El Salvador's Banco Agricola, S.A.
(deposits Ba2, stable / BCA ba3). Agricola Senior Trust will thus
provide a pass through of both interest and principal payments on
the BofA loan to the Agricola Senior Trust noteholders. The rating
assigned to Agricola Senior Trust is subject to receipt and review
of final documentation related to the note issuance.
The outlook on the rating is stable.
In addition, Moody's assigned Counterparty Risk (CR) assessments
of Ba1(cr) / Not Prime(cr) to Banco Agricola, S.A., in line with
its new bank rating methodology.
The following rating was assigned to Agricola Senior Trust:
-- Foreign currency senior debt: (P)Ba2, stable outlook.
The (P)Ba2 foreign currency senior debt rating assigned to
Agricola Senior Trust's proposed notes equals Banco Agricola's Ba2
foreign currency deposit rating, in line with Moody's approach to
rating senior obligations and the expected transaction terms and
conditions. According to the proposed transaction documents, the
notes will pay interest semiannually in amounts equivalent to the
amount payable by Banco Agricola, S.A. to BofA under the senior
loan. Payment of principal and interest on the notes will be
absolutely, unconditionally, and irrevocably guaranteed by Banco
Agricola. An event of default under the senior loan would
constitute an event of default under the notes.
The notes, the loan agreement and the guarantee will be governed
by the laws of the State of New York.
The Ba2 foreign currency deposit rating of Banco Agricola, S.A.
incorporates one notch of uplift from the bank's ba3 BCA given the
high probability that its parent, Bancolombia (BCA baa3), will
provide the bank support in light of Banco Agricola's importance
to Bancolombia's Central American expansion strategy. Because El
Salvador is a legally dollarized economy without a lender of last
resort, the Ba2 deposit rating does not benefit from government
support.
The ba3 BCA incorporates Banco Agricola's very strong
profitability and strong capitalization and asset quality. These
credit strengths are balanced by moderate, though well managed
funding and liquidity risks, along with El Salvador's weak
operating environment.
Moody's has also assigned CR assessments to Banco Agricola. CR
assessments are opinions of how counterparty obligations are
likely to be treated if a bank fails, and are distinct from debt
and deposit ratings in that they (1) consider only the risk of
default rather than expected loss and (2) apply to counterparty
obligations and contractual commitments rather than debt or
deposit instruments. The CR assessment is an opinion of the
counterparty risk related to a bank's covered bonds, contractual
performance obligations (servicing), derivatives (e.g., swaps),
letters of credit, guarantees and liquidity facilities.
The CR Assessment takes into account the issuer's standalone
strength as well as the likelihood of affiliate and government
support in the event of need, reflecting the anticipated seniority
of these obligations in the liabilities hierarchy. The CR
Assessment also incorporates other steps authorities can take to
preserve the key operations of a bank should it enter a
resolution.
In most cases, the starting point for the CR assessment, which is
an assessment of the bank's ability to avoid defaulting on its
operating obligations, is one notch above the bank's adjusted BCA,
to which Moody's then typically adds the same notches of support
uplift as applied to deposit and senior unsecured debt ratings.
This reflects Moody's views that authorities are likely to honor
the operating obligations the CR Assessment refers to in order to
preserve a bank's critical functions and reduce potential for
contagion. Banco Agricola's long-term Ba1(cr) CR assessment is one
notch above the bank's ba2 adjusted BCA and does not benefit from
government support. The Ba1(cr) translates to a short term CR
assessment of Not Prime(cr).
The last rating action on Banco Agricola, S.A. was on 12 May 2015,
when Moody's assigned the bank first time ratings.
The principal methodology used in these ratings was Banks
published in March 2015.
Banco Agricola, S.A. is domiciled in San Salvador, El Salvador,
and is the largest bank in the country with market shares of 27%
in loans and deposits. As of March 2015, Banco Agricola, S.A.
reported consolidated assets of USD3.9 billion, deposits of USD2.7
billion, and shareholders' equity of USD496 million. Agricola
Senior Trust is a Cayman Islands special purpose trust governed by
the laws of the Cayman Islands.
BLUE SKY: Creditors' Proofs of Debt Due June 15
-----------------------------------------------
The creditors of Blue Sky are required to file their proofs of
debt by June 15, 2015, to be included in the company's dividend
distribution.
The company commenced liquidation proceedings on May 13, 2015.
The company's liquidator is:
CDL Company Ltd.
P.O. Box 31106 Grand Cayman KY1-1205
Cayman Islands
GS PEP II: Shareholder to Hear Wind-Up Report on July 3
-------------------------------------------------------
The shareholder of GS PEP II Offshore Advisors, Inc. will hear on
July 3, 2015, at 9:15 a.m., the liquidator's report on the
company's wind-up proceedings and property disposal.
The company's liquidator is:
Intertrust SPV (Cayman) Limited
190 Elgin Avenue, George Town
Grand Cayman KY1-9005
Cayman Islands
c/o Jennifer Chailler
Telephone: (345) 943-3100
GS PEP III: Shareholder to Hear Wind-Up Report on July 3
--------------------------------------------------------
The shareholder of GS Pep III Offshore Advisors, Inc. will hear on
July 3, 2015, at 8:45 a.m., the liquidator's report on the
company's wind-up proceedings and property disposal.
The company's liquidator is:
Intertrust SPV (Cayman) Limited
190 Elgin Avenue, George Town
Grand Cayman KY1-9005
Cayman Islands
c/o Jennifer Chailler
Telephone: (345) 943-3100
GS PRIVATE: Shareholders' Final Meeting Set for July 3
------------------------------------------------------
The shareholders of GS Private Equity Management Offshore, Inc.
will hold their final meeting on July 3, 2015, at 8:30 a.m., to
receive the liquidator's report on the company's wind-up
proceedings and property disposal.
The company's liquidator is:
Intertrust SPV (Cayman) Limited
190 Elgin Avenue, George Town
Grand Cayman KY1-9005
Cayman Islands
c/o Jennifer Chailler
Telephone: (345) 943-3100
HAV3 (10): Shareholder to Hear Wind-Up Report on July 3
-------------------------------------------------------
The shareholder of HAV3 (10) Limited will hear on July 3, 2015, at
9:30 a.m., the liquidator's report on the company's wind-up
proceedings and property disposal.
The company's liquidator is:
Intertrust SPV (Cayman) Limited
190 Elgin Avenue, George Town
Grand Cayman KY1-9005
Cayman Islands
c/o Jennifer Chailler
Telephone: (345) 943-3100
MAHOGANY LTD: Shareholders' Final Meeting Set for June 26
---------------------------------------------------------
The shareholders of Mahogany Ltd. will hold their final meeting on
June 26, 2015, to receive the liquidators' report on the company's
wind-up proceedings and property disposal.
The company's liquidators are:
Sarah Bell
Mark Bouteloup
Citron 2004 Limited
Telephone: + 44 1534 282276
Facsimile: + 44 1534 282400
23-25 Broad Street St Helier, Jersey, JE4 8ND
PRESTIGE AIRCRAFT: Creditors' Proofs of Debt Due June 30
--------------------------------------------------------
The creditors of Prestige Aircraft Leasing (Pal), Inc. are
required to file their proofs of debt by June 30, 2015, to be
included in the company's dividend distribution.
The company commenced liquidation proceedings on May 16, 2015.
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
RENUK LIMITED: Creditors' Proofs of Debt Due June 15
----------------------------------------------------
The creditors of Renuk Limited are required to file their proofs
of debt by June 15, 2015, to be included in the company's dividend
distribution.
The company commenced liquidation proceedings on May 15, 2015.
The company's liquidator is:
CDL Company Ltd.
P.O. Box 31106 Grand Cayman KY1-1205
Cayman Islands
SHAMROCK: Members to Hold Final Meeting on June 22
--------------------------------------------------
The members of Shamrock will hold their final meeting on June 22,
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
VENTRA (BARBADOS): Shareholders' Final Meeting Set for July 21
--------------------------------------------------------------
The shareholders of Ventra (Barbados) SRL will hold their final
meeting on July 21, 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:
Britannia Corporate Management Ltd
Gary F. Oakley
196 Raleigh Quay, Grand Cayman, KY1-1104
Cayman Islands
Telephone: (345) 949 2700
=========
C H I L E
=========
LATAM AIRLINES: Moody's Rates Prop. $500MM Sr. Unsec. Notes at Ba3
------------------------------------------------------------------
Moody's Investors Service assigned a Ba3 foreign currency rating
to the proposed up to USD500 million senior unsecured notes to be
issued by LATAM Airlines Group S.A (LATAM Airlines, Ba2 stable).
Proceeds will be used for liability management and for other
general corporate purposes. The rating outlook is stable.
The rating of the proposed notes assumes that the final
transaction documents will not be materially different from draft
legal documentation reviewed by Moody's to date and assume that
these agreements are legally valid, binding and enforceable.
Issuer: LATAM Airlines Group S.A (LATAM Airlines)
-- USD500 million senior unsecured notes due 2020: Ba3 foreign
currency rating
The outlook is stable
The Ba3 rating assigned for the unsecured notes stand one notch
lower than LATAM Airlines' Ba2 corporate family rating (CFR) in
order to reflect the effective subordination of those unsecured
creditors to the company's other existing secured debt. LATAM
Airlines' consolidated debt is composed mainly of long-term
secured bank obligations and capital leases collateralized by
aircrafts, representing about 70% of its total debt as of fiscal
year end 2014. As such, the proposed unsecured notes will rank
below all the company's existing and future secured claims.
The Ba2 CFR reflects LATAM Airlines' significant market position
in Latin America with a well diversified business portfolio of air
transportation services, superior network connectivity and
strategic alliances, along with an improving operating structure
that allows them to remain competitive going forward. Adequate
liquidity, good financial disclosures and a conservative approach
to risk management are additional credit positives for this
company.
Constraining the ratings is LATAM Airlines' revenue and cash
generation exposure to weak currencies in Latin America not fully
mitigated by the company's hedging strategies, which contrast to a
large component of costs and capital expenditures in US dollars.
The company is also exposed to a slowing macroeconomic environment
throughout Latin America, particularly in Brazil, which will
likely strain demand growth in 2015 and increase pressure on air
carriers to reduce yields and/or reduce capacity to maintain
profitability. Moody's also see some execution risks related to
the full integration of LAN and TAM operations, reduction of
certain operating overlaps, along with evolving regulatory changes
and consolidated high leverage.
The stable outlook reflects Moody's expectation that LATAM
Airlines will gradually improve its financial profile over the
next 12-to-18 months, as a result of its increased focus on cost
reduction and favorable trends for fuel costs, which will support
healthier operating margins going forward. The geographic and
business diversity provides the company with exposure to different
demand dynamics that should help offset near term challenges
related to economic slowdowns in Brazil, foreign currency
volatility and increasing competition in the region.
Although not envisioned in the near term, a rating upgrade could
be considered if LATAM Airlines is able to successfully execute
its growth strategy and strengthen its financial profile, such
that adjusted debt-to-EBITDA improves to less than 4.0 times on a
sustained basis, along with improvement to a stronger liquidity
profile, as illustrated by a cash-to-revenue position closer to
25%.
Conversely, the rating could be downgraded if the company's
liquidity is strained due to a prolonged market downturn or
significant cost pressures, which combined with the its aircraft
acquisition program would lead to weaker free cash flow
generation. Downward pressure on the rating could occur if LATAM
Airlines' adjusted EBITDA margins falls below 20% (20% in the last
twelve months ended March 31, 2015) or adjusted leverage remains
above 6.0 times (5.6 times in the last twelve months ended March
31, 2015) for a sustained period.
The principal methodology used in these ratings was Global
Passenger Airlines published in May 2012.
LATAM Airlines Group S.A. (LATAM Airlines) is a Chilean-based
airline holding company formed by the business combination of LAN
Airlines S.A. of Chile and TAM S.A. of Brazil in June 2012, which
remain operating as two separate brands. LATAM Airlines is the
larger airline group in South America with local presence for
domestic passenger service in six countries (i.e. Brazil, Chile,
Peru, Ecuador, Argentina, Colombia). The company also provides
intra-regional and international passenger services and it also
has a cargo operation that is carried out through the use of belly
space on passenger flights and dedicated freighter service. In
2014, LATAM Airlines generated around USD12 billion in net
revenues and carried over 67.8 million passengers and 1.1 million
tons.
SMU S.A.: Moody's Upgrades CFR & $300M Unsec. Notes Rating to Caa1
------------------------------------------------------------------
Moody's Investors Service upgraded SMU S.A's global corporate
family rating and its US$300 million senior unsecured notes rating
to Caa1 from Caa2. The outlook is stable.
SMU's upgrade to Caa1 primarily reflects the observed improvement
in the company's operating performance over the last quarters.
Accordingly, leverage measured by adjusted debt/EBITDA reduced to
9.8x in March 2015 (from 10.9x in 2014) and EBITDA margin reached
6.5% (versus 6%) in the same period. Going forward, we expect
further - although gradual - improvements in metrics.
SMU's ratings are supported by the company's exposure to the
defensive food industry through its extensive supermarket
footprint in Chile, which potentially reduces revenue and margin
volatility. The track record of strong support from its main
shareholder is also viewed as a credit positive and has been key
to SMU's ratings. Although Moody's acknowledges the company's
improvements during the last quarters, SMU's Caa1 ratings are
constrained by the company's high leverage and weak credit
metrics, amidst a still challenging operating environment.
The stable outlook reflects Moody's expectation that SMU will
gradually improve its credit and financial profile over the coming
quarters. The stable outlook also considers Moody's expectations
about the company's ability to manage its exposure to economic
slowdowns in Chile and Peru, without materially affecting its
operating margins.
An upgrade could occur if SMU continues to improve its overall
credit metrics, cash generation and operational performance. More
specifically, an upgrade would require a substantial reduction in
leverage ratios and interest coverage of at least 1.0x on a
sustained basis.
On the other hand, the ratings could be downgraded in case of
further deterioration in SMU's credit metrics, operating
performance or liquidity.
The principal methodology used in this rating was Global Retail
Industry published in June 2011.
Based in Santiago, Chile, SMU is a diversified retailer with
operations across the entire country and Peru. The company's
multi-brand and multi-sector strategy focuses on supermarkets,
wholesale, home improvement, convenience stores and e-grocery
outlets, as well as wholesale and retail outlets in the
construction market. As of last twelve months ended March 31, 2015
SMU reported total revenues of approximately USD 3.4 billion.
==================
C O S T A R I C A
==================
BANCO DE COSTA RICA: Moody's Affirms Ba1 LT Sr. Unsec. Debt Rating
------------------------------------------------------------------
Moody's Investors Service concluded its rating reviews on Banco de
Costa Rica (BCR), Banco Nacional de Costa Rica (BNCR), Panama's
Banco Internacional de Costa Rica (BICSA), Guatemala's Banco
Industrial (Industrial) and Banco de Reservas de la Republica
Dominicana (Banreservas). These reviews were initiated on March
17, 2015, following the publication of Moody's new bank rating
methodology.
The rating agency lowered the baseline credit assessments (BCA)
and adjusted BCAs of BCR, BNCR and Industrial. In addition, it
lowered the adjusted BCAs of Banreservas and BICSA.
Further, Moody's has downgraded the following ratings:
-- Industrial's long and short term local currency deposit
ratings and foreign currency junior subordinate debt rating
-- Industrial Senior Trust's foreign currency senior debt
rating and Industrial Subordinated Trust's foreign currency
subordinated debt rating
-- BICSA's long-term foreign currency deposit rating
The banks' other ratings have been affirmed.
The rating agency has also lowered Guatemala's Macro Profile to
Weak from Weak+, in line with the outlook change to negative on
the country's Ba1 government bond rating, on May 26, 2015.
In addition, Moody's has affirmed with a stable outlook the
ratings of Guatemala's Banco de los Trabajadores (Bantrab) and
those of Panama-based Global Bank Corporation and Subsidiaries
(Global Bank), and Banco Latinoamericano de Comercio Exterior
(Bladex).
In general, the rating changes do not reflect either an
improvement or a deterioration in the affected issuers' credit
fundamentals. Rather, the changes are a consequence of the
implementation of Moody's new bank methodology, published on 16
March 2015. The new methodology highlighted these issuers as being
either positive or negative outliers at their previous rating
levels. Moody's considers these issuers to be more appropriately
positioned at their current revised rating levels.
Moody's has also assigned Counterparty Risk (CR) assessments to
all of these eight banks, in line with its new bank rating
methodology.
Moody's has withdrawn the outlooks on the foreign currency junior
subordinate debt rating of Banco Industrial as well as on the
foreign currency subordinate debt ratings of Industrial
Subordinated Trust, Bantrab Capital Notes Trust, and Banreservas,
for its own business reasons. Outlooks, which provide an opinion
on the likely rating direction over the medium term, are now
assigned only to long-term deposit and senior unsecured debt
ratings. Except for Industrial and Industrial Senior Trust, the
long-term deposit and senior debt of which have a negative
outlook, the outlook on the other affected banks' debt and deposit
ratings is stable.
The new bank rating methodology includes a number of elements that
Moody's has developed to help accurately predict bank failures and
determine how each creditor class is likely to be treated when a
bank fails and enters resolution. These new elements capture
insights gained from the crisis and the fundamental shift in the
banking industry and its regulation.
In light of the new methodology, Moody's rating actions generally
reflect the following considerations: (1) the macro profiles of
each of the countries where the banks operate; (2) the banks' core
financial ratios; and (3) the likelihood of affiliate and
government support for these institutions.
BANCO DE COSTA RICA AND BANCO NACIONAL DE COSTA RICA'S BCA
LOWERED; DEPOSIT AND DEBT RATINGS AFFIRMED:
Moody's lowered the BCA and adjusted BCAs of BCR and BNCR to ba2
from ba1. These changes primarily considered the banks' adjusted
capitalization levels, which compare unfavorably with global
peers, notwithstanding reported capital ratios that are somewhat
stronger and that provide adequate cushions relative to the
minimum regulatory requirements in Costa Rica. Moody's ratio of
Tangible Common Equity to Risk-Weighted Assets is designed to
provide a globally consistent measure of capitalization and
thereby enhance the comparability of banks operating under
different regulatory regimes. Moody's ratio, which has an
important weight in the new methodology, closely mirrors Basel III
guidelines and is stricter in many respects than the current Costa
Rican standard.
The lower BCA also takes into account the banks' weak
profitability owing to high operating costs and mandatory
transfers to government-related entities. Asset quality remains
sound, though pressures may arise from Costa Rica's current
economic slowdown and rising unemployment, as well as the
significant amount of foreign currency lending to local currency
earners, in the event of a depreciation in the Colon. However, BCR
and BNCR both benefit from an explicit government guarantee of
their obligations per Article 4 of the Banking Law, including
deposits, which has provided them with superior access to retail
funding. In addition, both maintain ample liquid resources. The
ratings also consider Costa Rica's Moderate (-) Macro Profile,
which reflects the relatively diversified economy, adequate if
slowing GDP growth, and strong institutions that provide a high
degree of policy predictability.
The affirmation with a stable outlook of both banks' Ba1/Not Prime
local currency deposit ratings and their Ba1 foreign currency
senior debt ratings are based on the government guarantee. The
banks' Ba2/Not Prime foreign currency deposit ratings, which are
constrained by Costa Rica's sovereign ceiling for foreign currency
deposits, were also affirmed with a stable outlook, in line with
the stable outlook on Costa Rica's government bond rating. In
addition, Moody's assigned Ba1(cr)/Not Prime(cr) CR assessments to
Banco de Costa Rica and Banco Nacional de Costa Rica.
Given the government guarantee and the foreign currency deposit
ceiling constraint, the banks' deposit and debt ratings would be
sensitive only to rating actions on Costa Rica's sovereign rating.
Further changes in the banks' BCAs will not impact on their
ratings.
BICSA'S ADJUSTED BCA AND DEPOSIT RATING DOWNGRADED:
Moody's lowered BICSA's adjusted BCA to ba2 from ba1, the same
level as the bank's BCA, which was affirmed. As a result of the
lower adjusted BCA, BICSA's foreign currency deposit rating was
downgraded to Ba2/Not Prime from Ba1/Not Prime, with a stable
outlook. The action reflects a change of the rating anchor Moody's
uses to assess affiliate support to the Ba2 foreign currency
deposit rating of BCR, BICSA's controlling parent, from BCR's Ba1
local currency deposit rating. Moody's has hence aligned BCR's
ability to provide support to BICSA in foreign currency in Panama
to BCR's capacity to cover its own foreign currency deposit
obligations in its home market of Costa Rica. Moody's continues to
believe there is a high likelihood that BCR will provide support
to BICSA if necessary.
BICSA's ba2 BCA considers the bank's healthy core capitalization
and well managed liquidity. While delinquencies remain low, the
bank faces growing asset quality risk in light of the deceleration
of the economies of Costa Rica and Panama, which constitute about
two-thirds of BICSA's loan book, as well as the bank's rising
exposure to a number of weakening South American economies. Credit
challenges also include a heavy reliance on US dollar wholesale
funding, which exposes the bank to repricing and refinancing risks
in light of the expected normalization of monetary policy in the
US. In addition, BICSA's profitability remains pressured owing to
intensifying competition.
BICSA's deposit rating does not benefit from government support,
Panama being a legally dollarized economy without a true lender of
last resort. Moody's assigned Ba1(cr) and Not Prime(cr) CR
assessments to BICSA.
BICSA's stable outlook reflects the stable outlook on its
controlling parent, BCR. BICSA's foreign currency deposit rating
would be sensitive to a further change in its parent's rating.
BANCO INDUSTRIAL'S BCA AS WELL AS ITS DEPOSIT AND DEBT RATINGS
DOWNGRADED:
Moody's lowered Banco Industrial's BCA and adjusted BCA to ba3
from ba1. The downgrade primarily captures Industrial's adjusted
capitalization levels, which as with those of the Costa Rican
banks compare unfavorably with global peers, even though reported
capital ratios are somewhat stronger and provide adequate cushions
relative to the minimum regulatory requirements in Guatemala.
Moody's Tangible Common Equity to Risk-Weighted Assets ratio,
which has an important weight in the new methodology, closely
mirrors Basel III guidelines and is stricter in many respects than
the current Guatemalan standard. The weak capital is due to the
bank's high loan growth and hefty dividend payments, although the
latter have been in part offset by intermittent capital
injections.
The lower BCA also reflects the change in Guatemala's Macro
Profile to "Weak" from "Weak+," following the change in outlook on
Guatemala's Ba1 government bond rating to negative from stable on
26 May 2015. The macro profile reflects the country's low GDP per
capita notwithstanding steady growth in recent years, and poor
institutional strength that is weak overall despite relatively
strong monetary and fiscal institutions. The change in both the
macro profile and the government's outlook reflect increasing
concerns about the strength of the country's institutional
framework in light of ongoing corruption scandals implicating high
ranking government officials that have led to widespread street
demonstrations. Credit growth has been robust over the past
several years, fueled by the still steadily growing economy.
Competition within the banking system has recently tightened, in
line with the entrance of strong regional franchises.
At the same time, Industrial's BCA continues to reflect a number
of important credit strengths, including the bank's historically
strong asset quality, its ample base of relatively low-cost core
deposits and proven access to international capital markets, as
well as substantial liquid resources and growing earnings that
leverage the bank's leading position in the Guatemalan banking
system.
Moody's also downgraded Industrial's local currency deposit
ratings to Ba1/Not Prime from Baa3/Prime-3, and also downgraded
the foreign currency senior debt rating of Industrial Senior Trust
to Ba1 from Baa3. These downgrades reflect a change in the anchor
rating for government support to Guatemala's Ba1 government bond
rating, based on Moody's revised assessment of the government's
capacity to provide support to banks. Previously, when imputing
government support assumptions in bank ratings, deposit and senior
unsecured debt ratings were, in certain cases, positioned above
their relevant sovereign rating, as was the case for Banco
Industrial. This reflected an expectation that the extensive
policy tools available to central banks to support domestic banks
could result in a capacity for the sovereign to provide support to
its country's banks that is higher than its own creditworthiness.
However, insights gained from historical experiences showed that
when a crisis is prolonged, these measures remain insufficient to
restore confidence in the system and an outright recapitalization
of the banks is necessary.
Industrial's Ba2/Not Prime foreign currency deposit rating was
affirmed and remains constrained by the Ba2 sovereign ceiling for
foreign currency deposits.
As a result of the lower adjusted BCA, Moody's downgraded the
foreign currency subordinated debt rating of Industrial
Subordinated Trust to B1 from Ba3. The subordinate debt rating is
notched down from the bank's adjusted BCA to reflect higher
expected loss severity in the event of a default. In addition,
Moody's downgraded Industrial's foreign currency junior
subordinate debt rating to B3(hyb) from B1(hyb). The three-notch
differential between that rating and the bank's ba3 adjusted BCA
also reflects the notes' non-cumulative coupon -skip mechanism and
optional deferral features.
Industrial Senior Trust and Industrial Subordinated Trust are
Cayman Islands-based vehicles, guaranteed by Banco Industrial.
Moody's also assigned Ba1(cr) and Not Prime(cr) CR assessments to
Banco Industrial and withdrew the rating outlook on both Banco
Industrial's foreign currency junior subordinate debt rating and
Industrial Subordinated Trust's foreign currency subordinated debt
rating for Moody's own business reasons.
The outlook on all senior debt and deposit ratings was changed to
negative, in line with the outlook on Guatemala's government bond
rating. A downgrade of the sovereign bond rating would drive a
further downgrade of the bank's deposit and senior debt ratings.
Upward changes on the BCA and the subordinated and junior
subordinated debt ratings would hinge on a sustained and
substantial increase in capital, increasing earnings generation
and continued strong asset quality. Further downward pressure on
the BCA and on the ratings could emerge should Industrial continue
to grow robustly without the ongoing assistance from its
shareholders. A significant decline in asset quality or
profitability could also trigger a downgrade in those ratings.
BANRESERVAS'S ADJUSTED BCA LOWERED; ALL OTHER RATINGS AFFIRMED:
Banreservas's adjusted BCA was lowered to b3 from b1 and is now in
line with the bank's BCA, as Moody's reclassified support from the
bank's owner, the Dominican government, to public support from
affiliate support. While public support is reflected in the bank's
debt and deposit ratings, it is not captured in the adjusted BCA
as is affiliate support. The b3 BCA reflects the bank's modest
capital, high single-borrower concentrations, and net interest
margins that are below the system average. While capitalization
has been enhanced by the passage of a law in December 2014 that
aims to nearly double the bank's reported paid-in capital by 2016
from year-end 2014 levels, it is expected to remain weak due to
continued rapid loan growth, which also increases asset quality
risks. These credit challenges are in part offset by the bank's
access to captive sources of funding, particularly from the
national government and government-related entities, as well as
its healthy liquidity buffers. The BCA also considers the DR's
Weak macro profile, which incorporates the country's weak
institutions, reflected by its low World Bank governance
indicators and a mixed track record of macroeconomic stability. In
addition, weak external finances and low levels of foreign
exchange reserves leave the country vulnerable to event risks.
These challenges are only partly mitigated by the country's
economic dynamism.
Banreservas's B1/Not Prime local currency deposit ratings and
B2/Not Prime foreign currency deposit ratings and the B2 foreign
currency subordinated debt rating were affirmed. The local
currency deposit rating receives two notches of uplift from the
BCA owing to Moody's assumption of full government support, based
on the government's full ownership of the bank, the close
financial and business links between the bank and the government,
and the importance of Banreservas's deposit and lending franchise.
The foreign currency deposit rating remains constrained by the B2
sovereign ceiling for foreign currency deposits. The bank's
foreign currency subordinated debt rating is one notch below the
bank's local currency deposit rating, benefiting from an
assumption of high government support.
In addition, Moody's assigned B1(cr) and Not Prime(cr) CR
assessments to Banreservas and withdrew the outlook on Banreservas
foreign currency subordinate debt rating for Moody's own business
reasons.
The bank's deposit ratings carry a stable outlook, reflecting the
government's stable outlook. Given the expectation of full
government support, the bank's ratings would only be likely to
change following a change in the Dominican Republic's sovereign
rating.
BANCO DE LOS TRABAJADORES'S RATINGS AFFIRMED; COUNTERPARTY RISK
ASSESSMENTS ASSIGNED:
Moody's affirmed the BCA and adjusted BCA of b1 and affirmed with
a stable outlook the Ba3/ Not Prime local and foreign currency
deposit ratings of Bantrab. The BCA considers Bantrab's well
managed asset quality, which owes in part the bank's preferential
creditor status in Guatemala, coupled with its relatively stable
and granular deposit funding. Key constraints to the BCA are its
weak core capital and very limited business diversification, with
the loan book highly concentrated in consumer loans to Guatemalan
public sector workers. The Ba3 local and foreign currency deposit
ratings incorporate one notch of uplift due to the assessment of a
moderate probability of government support, based on the bank's
importance as a lender to Guatemalan public sector workers.
The Ba3 foreign currency senior debt rating assigned to Bantrab
Senior Trust was affirmed, as was the B2 foreign currency
subordinated debt rating assigned to Bantrab Capital Notes Trust,
which remains one notch below the bank's b1 adjusted BCA. Bantrab
Senior Trust and Bantrab Capital Notes Trust are Cayman Islands-
based vehicles, guaranteed by Bantrab. Moody's also assigned a
Ba2(cr) and Not Prime(cr) CR assessments to Bantrab and withdrew
the rating outlook on Bantrab Capital Notes Trust foreign currency
subordinate debt rating for Moody's own business reasons.
The outlook on the deposit and senior debt ratings is stable.
Upward pressures on the bank and trust ratings could occur if core
capital increases substantially and sustainably, coupled with the
management of a high pace of growth without a deterioration in
asset quality. The ratings could face downward pressure if asset
quality deteriorates rapidly, resulting in weaker earnings and
capitalization.
GLOBAL BANK'S RATINGS AFFIRMED; COUNTERPARTY RISK ASSESSMENTS
ASSIGNED:
Moody's affirmed the BCA and adjusted BCA of ba1 and affirmed with
a stable outlook the Ba1/Not Prime foreign currency deposit
ratings of Global Bank. The BCA reflects the bank's expanding
profitability and its stable retail deposit funding structure. The
key rating constraint relates to asset quality risk deriving from
above system-average loan growth, especially in the context of a
decelerating economy, the potential rise in US interest rates and
high single-borrower concentrations.
The BCA also considers Panama's Moderate macro profile, which
reflects its moderate GDP per-capita and good prospects for
continued sustainable growth. However, the country's high degree
of economic openness and large current account deficit leave it
moderately susceptible to event risks. While dollarization has
been fundamental to the country's success, it also creates funding
risks for its banks given the absence of a lender of last resort.
As a result of this, as is the case with BICSA, Global Bank does
not benefit from public support.
The bank's ratings could face upward pressure if the loan growth
slows to a more sustainable pace without a deterioration in
profitability indicators and slower economic growth does not
result in deterioration in asset quality. On the other hand,
downward rating pressure could emerge if non-performing loans, and
hence loan loss provisions, increase by more than Moody's expects.
Moody's assigned the bank Baa3(cr)/Prime-3(cr) CR assessments.
BLADEX'S RATINGS AFFIRMED; COUNTERPARTY RISK ASSESSMENTS ASSIGNED:
Moody's affirmed the baa2 BCA and adjusted BCA of Bladex as well
as its Baa2/Prime-2 foreign currency deposit and debt ratings with
a stable outlook, reflecting the bank's strong asset quality and
capitalization. Bladex benefits from its specialized expertise in
trade finance in Latin America and the Caribbean, with financial
institutions, corporations and middle-market companies across the
region. The bank also benefits from preferential creditor status
with most countries given its ownership and control by the
region's central banks or their designees.
Asset quality may nevertheless come under pressure as a result of
the bank's strong loan growth and large borrower concentrations
amid slower growth of Latin America's economies. This risk is
partly mitigated by the bank's emphasis on trade finance and its
growth focus in more stable and strategic industries and
countries. The bank also faces challenges related to its narrow
net interest margins, owing to the bank's emphasis on short-term
trade lending, a very competitive and low margin business, as well
as its heavy reliance on short-term wholesale funding,
particularly as the bank has no true lender of last resort.
Refinancing risk is balanced in part by relatively stable deposit
funding from its shareholders and efforts to diversify funding
sources and extend liability maturities by issuing debt in
regional and global markets.
Given the heavy reliance of the bank's business model on wholesale
funding, the ratings are unlikely to face upward pressure.
Downward rating pressure could result if asset quality,
capitalization or profitability deteriorates.
While Bladex's BCA incorporates the implicit support of its Class
A shareholders, the 23 central banks in the region or their
designees, its deposit and debt ratings do not derive further
uplift from the BCA owing to parental support because of the
consortium nature of the ownership structure and the fact that the
bulk of the bank's shares are publicly traded. There is also no
government support uplift because Bladex is a dollar-based
supranational bank without a true lender of last resort. Moody's
also assigned Baa1(cr)/Prime-2(cr) CR assessments to Bladex.
RATIONALE FOR COUNTERPARTY RISK ASSESSMENTS:
Moody's has also assigned CR assessments to all the eight
aforementioned banks. CR assessments are opinions of how
counterparty obligations are likely to be treated if a bank fails,
and are distinct from debt and deposit ratings in that they (1)
consider only the risk of default rather than expected loss and
(2) apply to counterparty obligations and contractual commitments
rather than debt or deposit instruments. The CR assessment is an
opinion of the counterparty risk related to a bank's covered
bonds, contractual performance obligations (servicing),
derivatives (e.g., swaps), letters of credit, guarantees and
liquidity facilities.
The CR Assessment takes into account the issuer's standalone
strength as well as the likelihood of affiliate and government
support in the event of need, reflecting the anticipated seniority
of these obligations in the liabilities hierarchy. The CR
Assessment also incorporates other steps authorities can take to
preserve the key operations of a bank should it enter a
resolution.
In most cases, the starting point for the CR Assessment, which is
an assessment of the bank's ability to avoid defaulting on its
operating obligations, is one notch above the bank's adjusted BCA,
to which Moody's then typically adds the same notches of support
uplift as applied to deposit and senior unsecured debt ratings.
This reflects Moody's views that authorities are likely to honor
the operating obligations the CR Assessment refers to in order to
preserve a bank's critical functions and reduce potential for
contagion. However, since most Central American banks have deposit
and senior debt ratings at par with the sovereign ratings, Moody's
has assigned a CR Assessment at the same level for most of the
aforementioned banks.
List of All of the Affected Ratings:
Banco de Costa Rica
- Long-term global local currency deposit rating: Affirm at Ba1,
stable outlook
- Short-term global local currency deposit rating: Affirm at Not
Prime
- Long-term foreign currency deposit rating: Affirm at Ba2,
stable outlook
- Short-term foreign currency deposit rating: Affirm at Not
Prime
- Long-term foreign currency senior unsecured debt rating:
Affirm at Ba1, stable outlook
- Baseline credit assessment: Lower to ba2 from ba1
- Adjusted baseline credit assessment: Lower to ba2 from ba1
- Long-term counterparty risk assessment: Assigned at Ba1(cr)
- Short-term counterparty risk assessment: Assigned at Not
Prime(cr)
- Outlook: Stable
Banco Nacional de Costa Rica
- Long-term global local currency deposit rating: Affirm at Ba1,
stable outlook
- Short-term global local currency deposit rating: Affirm at Not
Prime
- Long-term foreign currency deposit rating: Affirm at Ba2,
stable outlook
- Short-term foreign currency deposit rating: Affirm at Not
Prime
- Long-term foreign currency senior unsecured debt rating:
Affirm at Ba1, stable outlook
- Baseline credit assessment: Lower to ba2 from ba1
- Adjusted baseline credit assessment: Lower to ba2 from ba1
- Long-term counterparty risk assessment: Assigned at Ba1(cr)
- Short-term counterparty risk assessment: Assigned at Not
Prime(cr)
- Outlook: Stable
Banco Internacional de Costa Rica, S.A.
- Long-term foreign currency deposit rating: Downgrade to Ba2
from Ba1, stable outlook
- Short-term foreign currency deposit rating: Affirm at Not
Prime
- Baseline credit assessment: Affirmed at ba2
- Adjusted baseline credit assessment: Lower to ba2 from ba1
- Long-term counterparty risk assessment: Assigned at Ba1(cr)
- Short-term counterparty risk assessment: Assigned at Not
Prime(cr)
- Outlook: Stable
Banco Industrial, S.A.
- Long-term global local currency deposit rating: Downgrade to
Ba1 from Baa3, negative outlook
- Short-term global local currency deposit rating: Downgrade to
Not Prime from Prime-3
- Long-term foreign currency deposit rating: Affirm at Ba2,
negative outlook
- Short-term foreign currency deposit rating: Affirm at Not
Prime
- Long-term foreign currency junior subordinate debt rating:
Downgrade to B3(hyb) from B1(hyb)
- Baseline credit assessment: Lower to ba3 from ba1
- Adjusted baseline credit assessment: Lower to ba3 from ba1
- Long-term counterparty risk assessment: Assigned at Ba1(cr)
- Short-term counterparty risk assessment: Assigned at Not
Prime(cr)
- Outlook: Negative
Industrial Senior Trust
- Long-term global foreign currency senior debt rating:
Downgrade to Ba1 from Baa3, negative outlook
- Outlook: Negative
Industrial Subordinated Trust
- Long-term global foreign currency subordinated debt rating:
Downgrade to B1 from Ba3
Banco de Reservas de la Republica Dominicana
- Long-term global local currency deposit rating: Affirm at B1,
stable outlook
- Short-term global local currency deposit rating: Affirm at Not
Prime
- Long-term foreign currency deposit rating: Affirm at B2,
stable outlook
- Short-term foreign currency deposit rating: Affirm at Not
Prime
- Long-term foreign currency subordinate debt rating: Affirm at
B2
- Baseline credit assessment: Affirm at b3
- Adjusted baseline credit assessment: Lower to b3 from b1
- Long-term counterparty risk assessment: Assigned at B1(cr)
- Short-term counterparty risk assessment: Assigned at Not
Prime(cr)
- Outlook: Stable
Global Bank Corporation and Subsidiaries
- Long-term foreign currency deposit rating: Affirm at Ba1,
stable outlook
- Short-term foreign currency deposit rating: Affirm at Not
Prime
- Baseline credit assessment: Affirm at ba1
- Adjusted baseline credit assessment: Affirm at ba1
- Long-term counterparty risk assessment: Assigned at Baa3(cr)
- Short-term counterparty risk assessment: Assigned at
Prime-3(cr)
- Outlook: Stable
Banco de los Trabajadores
- Long-term global local currency deposit rating: Affirm at Ba3,
stable outlook
- Short-term global local currency deposit rating: Affirm at Not
Prime
- Long-term foreign currency deposit rating: Affirm at Ba3,
stable outlook
- Short-term foreign currency deposit rating: Affirm at Not
Prime
- Baseline credit assessment: Affirm at b1
- Adjusted baseline credit assessment: Affirm at b1
- Long-term counterparty risk assessment: Assigned at Ba2(cr)
- Short-term counterparty risk assessment: Assigned at Not
Prime(cr)
- Outlook: Stable
Bantrab Senior Trust
- Long-term global foreign currency senior debt rating: Affirm
at Ba3, stable outlook
- Outlook: Stable
Bantrab Capital Notes Trust
- Long-term global foreign currency subordinated debt rating:
Affirm at B2
Banco Latinoamericano de Comercio Exterior
- Long-term foreign currency deposit rating: Affirm at Baa2,
stable outlook
- Short-term foreign currency deposit rating: Affirm at Prime-2
- Long-term foreign currency senior unsecured MTN program
rating: Affirm at (P)Baa2
- Short-term foreign currency senior unsecured MTN program
rating: Affirm at (P)Prime-2
- Long-term foreign currency senior unsecured debt rating:
Affirm at Baa2, stable outlook
- Baseline credit assessment: Affirm at baa2
- Adjusted baseline credit assessment: Affirm at baa2
- Long-term counterparty risk assessment: Assigned at Baa1(cr)
- Short-term counterparty risk assessment: Assigned at
Prime-2(cr)
- Outlook: Stable
Last rating actions
The last rating action on Banco de Costa Rica was on March 17,
2015, when the bank's ba1 BCA and adjusted BCA were placed on
review for possible downgrade.
The last rating action on Banco Nacional de Costa Rica was on
March 17, 2015, when the bank's ba1 BCA and adjusted BCA were
placed on review for possible downgrade.
The last rating action on Banco Internacional de Costa Rica was on
March 17, 2015, when the bank's ba1 adjusted BCA and the Ba1
foreign currency deposit rating were placed on review for possible
downgrade.
The last rating action on Banco Industrial was on March 17, 2015,
when Moody's placed on review for possible downgrade the bank's
BCA, adjusted BCA, local currency deposit rating and foreign
currency junior subordinate debt rating.
The last rating action on Industrial Senior Trust was on March 17,
2015, when the Baa3 foreign currency senior debt rating was placed
on review for possible downgrade.
The last rating action on Industrial Subordinated Trust was on
March 17, 2015, when the Ba3 foreign currency subordinated debt
rating was placed on review with direction uncertain.
The last rating action on Banco de Reservas de la Republica
Dominicana was on March 17, 2015, when the bank's b1 adjusted BCA
was placed on review for possible downgrade.
The last rating action on Global Bank Corporation and Subsidiaries
was on December 17, 2014, when the bank's ratings were affirmed.
The last rating action on Banco de los Trabajadores was on April
17, 2015, when the bank's ratings were affirmed.
The last rating action on Bantrab Senior Trust was on April 17,
2015, when the Ba3 foreign currency senior debt rating was
affirmed.
The last rating action on Bantrab Capital Notes Trust was on April
17, 2015, when a B2 foreign currency subordinated debt rating was
assigned.
The last rating action on Bladex was on May 1, 2015, when Moody's
assigned the bank a Baa2 long-term foreign currency senior
unsecured debt rating.
===================================
D O M I N I C A N R E P U B L I C
===================================
* DOMINICAN REPUBLIC: Big Business Wants Customs Law Passed Now
---------------------------------------------------------------
Dominican Today reports that the National Business Council (Conep)
reiterated its call on Congress to pass the Customs Law and asked
the Chamber of Deputies to vote for the bill already approved by
the Senate.
CONEP called the proposed legislation a cornerstone to
institutionalize and modernize the Customs Agency, according to
Dominican Today.
It reiterated the need to legislate to ensure transparency in the
management of funds and due process in customs proceedings, "in
line with already established principles in the Constitution and
various ruling from the Constitutional, Supreme and Arbitration
courts," notes the report.
In a statement, CONEP said that after the confrontations with
Customs director Fernando Fernandez there've been no further
contact with the official, "but we're open to a dialogue and
technical depth to the content of the Draft of the Customs Law,"
the report relays.
Dominican Republic's leading business organization adds that it
seeks to bolster the free enterprise system, "actively
participating as an agent of change and transformation in the
consolidation of democracy and its institutions," the report adds.
=============
J A M A I C A
=============
OLINT CORP: Court Urges to Drop US Extradition Request for Ex Head
------------------------------------------------------------------
The Daily Observer reports that David Smith, the former head of
the failed Jamaican investment scheme, Olint, will know on June 18
whether he will be ordered extradited to the United States.
Mr. Smith, who is challenging his extradition, appeared in court
here on June 5 where his attorney, Oliver Smith urged Magistrate
Clifton Warner to reject the extradition request by the US
government, according to the Daily Observer.
The report notes that Mr. Smith, who completed a three-year prison
sentence earlier this year, is accused of defrauding thousands of
customers of more than US$220 million.
The Olint investment scheme that extended across the United States
and the Caribbean and had about 6,000 investors, was a massive
ponzi scheme, in which Smith paid returns to investors not from
profit but from their own money or that paid by subsequent
investors, the report recalls.
The funds, transferred to his own personal bank accounts,
reportedly enabled Smith to live a lavish lifestyle, the report
notes.
A raid by authorities in Jamaica in 2007, forced him to shut down
his business and relocate to the Turks and Caicos Islands, the
report relays.
In 2010, Mr. Smith was sentenced to six years in a Grand Turk
prison, however, he only spent four years because of good
behavior, notes the report.
In 2011, Mr. Smith was extradited to the US where he pleaded
guilty to 18 counts of money laundering, four counts of wire fraud
and one count of conspiracy to commit money laundering, the report
relays.
At the time, the US court ordered that the prison term should run
at the same time with the sentence in the TCI, the report
discloses. Mr. Smith was then sent back to the TCI to continue
the sentence.
Olint Corporation Limited was an investment club owned by David
Smith.
* * *
As reported in the Troubled Company Reporter-Latin America on
Aug. 31, 2010, RadioJamaica said United States authorities sought
to extradite Mr. Smith from Turks and Caicos Islands for his
involvement in financial fraud cases. The Jamaica Gleaner said
that Mr. Smith was indicted on 23 charges in the United States.
The report related that the indictment handed down in the U.S.
District Court for the Middle District of Florida, Orlando
Division, charged Mr. Smith with four counts of wire fraud, one
count of conspiracy to commit money laundering and 18 counts of
money laundering to conceal specified unlawful activity.
Caribbean News Now related that Mr. Smith defrauded more than
US$200 million from thousands of investors in Jamaica, the Turks
and Caicos Islands and Florida.
* JAMAICA: Service Interruption Remains Main Problem for Utilities
------------------------------------------------------------------
RJR News reports that Jamaica's Office of Utilities Regulation
(OUR) has disclosed that service interruption was one of the main
complaints it received from utility consumers during the January
to March quarter this year.
Contacts relating to interruption of service increased by two
percentage points to 14 per cent, when compared to the preceding
quarter, according to RJR News.
The report notes that telecommunications provider LIME continued
to account for the greatest share of service interruption, at nine
per cent, which was a three percentage point increase over the
October to December quarter.
The OUR said other telecommunications providers, the electricity
supplier -- JPS, and the National Water Commission accounted for
the remainder of the service interruption contracts, the report
notes.
Billing Related
The OUR also reported that billing related matters, including
adjustments that were applied to customers' accounts, high
consumption, retroactive billing, disputed charges and estimated
billings still top contacts to its consumer affairs unit, the
report says.
The complaints represent 51 per cent of total contacts and an
eight per cent increase in similar contacts when compared to the
previous reporting period, the report discloses.
For JPS and NWC, contacts relating to billing for each provider
represented 59 per cent and 70 per cent respectively, the report
adds.
* * *
As reported in the Troubled Company Reporter-Latin America on
June 5, 2015, Standard & Poor's Ratings Services raised its long-
term foreign and local currency sovereign credit ratings on
Jamaica to 'B' from 'B-'. In addition, S&P affirmed the 'B'
short-term ratings on Jamaica. The outlook on the long-term
ratings is stable. S&P also raised the transfer and
convertibility assessment to 'B+' from 'B'.
======================
P U E R T O R I C O
======================
PUERTO RICO CABLE: Moody's Withdraws B2 CFR After Acquisition
-------------------------------------------------------------
Moody's Investors Service has withdrawn all ratings and LGD
assessments of Puerto Rico Cable Acquisition Company, Inc. (dba
"Choice Cable") following the completion of its acquisition by
Liberty Cablevision of Puerto Rico LLC ("LCPR") (B3 stable) on
June 3, 2015 for approximately $273 million.
Choice Cable's ratings were withdrawn because the company's bank
obligations are no longer outstanding.
The following ratings and assessments were withdrawn:
-- Corporate Family Rating -- B2
-- Probability of Default Rating -- B2-PD
-- $15.0 Million First Lien Revolving Credit Facility due 2018
B1 (LGD-3)
-- $178.5 Million First Lien Term Loan due 2018 B1 (LGD-3)
-- $ 41.5 Million Second Lien Term Loan due 2019 Caa1 (LGD-6)
Outlook, changed to Withdrawn from Negative
Puerto Rico Cable Acquisition Company, Inc., operating under the
brand name Choice Cable, provides video, high speed data, and
voice services to approximately 113,900 residential and commercial
customers in the southern and western regions of Puerto Rico.
Annual revenue is approximately $85 million.
Liberty Cablevision of Puerto Rico LLC provides video, high speed
data, and telephone services to residential and commercial
customers in Puerto Rico. The company is indirectly 60% owned by
LGI Broadband Operations, Inc. an entity 100% owned by Liberty
Global plc (Ba3 stable) and 40% owned by Searchlight Capital
Partners L.P. Annual revenue is approximately $300 million, and as
of of March 31, 2015 LCPR had approximately 220,400 video, 214,000
high speed data and 166,500 phone RGUs.
Liberty Global plc, headquartered in London, England is an
international communications provider of video, broadband internet
and telephony services, with consolidated broadband communications
and/or direct-to-home satellite operations in 14 countries. When
combined with Ziggo, the company has approximately 27 million
customers and operates primarily in Europe and Chile. Its consumer
brands include Virgin Media, UPC, Unitymedia, Kabel BW, Telenet,
VTR, Ziggo, and Liberty Puerto Rico.
===============================
T R I N I D A D & T O B A G O
===============================
CL FIN'L: CLICO Former Directors Paid Millions
----------------------------------------------
Verne Burnett at Trinidad and Tobago Newsday reports that
documents released by the Clico Policyholders Group show the
Colonial Life Insurance Company (Clico) paid out millions of
dollars to holders of its Executive Flexible Premium Annuity
policies in April and May.
One policyholder, Ian Garcia, received a First Partial
Distribution of 85 percent amounting to TT$5,627,556.46, on May 4,
on one policy and another payment of TT$2,145,186.47 on another on
May 5, according to Trinidad and Tobago Newsday.
The report notes that the documents show another payment, also
dated May 4, of US$1,031,494.18 to a company, Events Unlimited, at
the same 22 Glenco Estate, La Horquetta Road, Glencoe address
given for Garcia.
That payment was made on a US Executive Flexible Premium Annuity
11 policy. The documents also show payments of US$305,599.49 to
Nigel Salina and Associates on May 5 and to Clinton Ramberansingh
of TT$1,133,316.69 on May 7, the report discloses.
Other documents e-mailed to Newsday lists payments in US and TT
dollars to dozens of individuals between April 30 and May 8
totaling $36,188,690.90 in one case and TT$63,207,849.78 in
another, the report relates. The names Garcia, Nigel Salina and
Martina and Clinton Ramberansingh, along with Eugene Fred or Mary
Rose Dziadyk feature repeatedly in the listings, the report adds.
The report says that the information was released by Peter
Permell, chairman of the Clico Policyholders Group, in response to
media reports of what he described as the uncertainty by the
Minister of Finance "and by extension the Government" as to
whether any payments were made to former Clico directors. Mr.
Permell said in a release that this "seems to suggest that the
left hand (the Ministry of Finance) does not know everything that
the right hand (the Central Bank and Clico) is doing," the report
notes.
Mr. Permell also objected to other media reports which he said
suggested that the Government had changed the policy established
in 2009 when it came to Clico's rescue that it would pay strictly
third party policy holders and creditors of Clico, "and as such by
definition excludes former directors and senior managers of Clico,
their immediate family members and private companies," the report
relays.
The release added, "In fact, it appears that the 'floodgates' have
now been opened to include all former directors with only one
minor exception -- persons who are subject to civil proceedings
initiated by the State. It therefore begs the question who, when
and most importantly why," the report relates.
However, in a statement, the Central Bank said it had no legal
basis to withhold payments from former Clico directors and
officers against whom no legal action had been taken, the report
adds.
The statement followed a similar one made in Parliament by the
Minister of Finance on media reports that Clico had allocated
TT$48.5 million to repay the policies of ten directors and their
companies, the report notes. The Central Bank said that in the
case of persons against whom neither the bank nor Clico had
considered or started any litigation to date, "there would be no
legal basis on which Clico may now withhold payment to them as
policyholders/creditors at the point of liquidating its debts to
creditors from its own assets," the report discloses.
The statement stressed that the payments are not being made with
public funds but entirely from the proceeds of the sale of its
assets, the report relays. The statement said, "These payments
are being made from the monetisation of Clico's MHTL shares and
the eventual sale of other Clico assets, the report relays.
"Unlike Government's bailout, the 2015 Clico Resolution Plan is
not funded by Government. No Government funds are being used to
make payments to creditors and policyholders of Clico including
related parties, under the Clico Resolution Plan," the report
quoted the Central Bank as saying.
It added that "Under the terms of Government's bailout of Clico in
2009 and 2011, related parties which included directors and
officers of Clico were not to be paid with public funds, on the
principle that these parties may have contributed to the financial
collapse of the institution," the report notes.
The decision to withhold payment from these former directors and
officers of Clico, who are policyholders, resulted in them
remaining creditors on the books of Clico, the report relates.
Clico, by law, has to treat with all classes of creditors as part
of its resolution strategy, the report says. It added that "Under
the 2015 Clico Resolution Plan, Clico is making payments to its
policyholders and creditors entirely from the proceeds of the sale
of its assets," the report discloses.
About CLICO International
Colonial Life Insurance Company Ltd. (CLICO) is a member of the CL
Financial Group. CL Financial Limited is a privately held
conglomerate in Trinidad and Tobago. Founded as an insurance
company by Cyril Duprey, Colonial Life Insurance Company was
expanded into a diversified company by his nephew, Lawrence
Duprey. CL Financial is now one of the largest local
conglomerates in the region, encompassing over 65 companies in 32
countries worldwide with total assets standing at roughly US$100
billion.
* * *
As reported in the Troubled Company Reporter-Latin America on July
7, 2014, Trinidad Express said that the Central Bank has placed
the responsibility of voluntary separation package (VSEP)
negotiations for workers at insurance giant Colonial Life
Insurance Company Ltd. (CLICO) with the company's board, after
which it will review accordingly, the bank said in a statement.
The bank's statement follows protest action by CLICO workers,
supported by their union, the Banking, Insurance and General
Workers' Union (BIGWU), outside the Central Bank in Port of Spain,
according to Trinidad Express.
In a separate TCRLA report on June 26, 2014, Caribbean360.com said
that the Trinidad and Tobago government has welcomed an Appeal
Court ruling that the Attorney General Anand Ramlogan said saves
the country from paying out more than TT$1 billion (TT$1 = US$0.16
cents) to policyholders of the cash-strapped CLICO. The Appeal
Court overturned the ruling of a High Court that ruled members of
the United Policyholders Group (UPG) were entitled to be paid the
full sums of their polices. CLICO financially caved in on itself
at the end of 2008 after the investment instruments of major
policyholders matured and they wanted hundreds of millions of
dollars they were owed.
On Aug. 6, 2013, the TCR-LA, citing Caribbean360.com, said that
over TT$8 billion worth of CLICO's profitable business will be
transferred to Atruis, a new company that will be owned by the
state. The Trinidad Express said that the Cabinet approved the
transfer as the Finance and General Purposes Committee continues
to discuss a letter of intent hammered out by the Ministry of
Finance and CL Financial's 400 shareholders, which envisions
taxpayers will recover the more than TT$20 billion Government has
injected since 2009 to keep CL subsidiary CLICO and other
companies afloat.
At its annual general meeting in Sept. 2013, CL Financial
shareholders voted to extend the agreement with Government until
August 25, 2014, while Cabinet decides on a new framework accord
to recover the debt owed to Government through divestment of CL
subsidiaries, including Methanol Holdings, Republic Bank,
Angostura Holdings, CL World Brands and Home Construction Ltd.,
Caribbean360.com related. Proceeds from the divestment of these
assets will go toward Government's recovery of the billions it
pumped into CLICO.
CL FIN'L: Wrong to Pay CLICO Directors, Ex Finance Minister Says
----------------------------------------------------------------
Ria Taitt at Trinidad Express reports that until the policyholders
of Colonial Life Insurance Company Ltd. (CLICO) "are made whole
(i.e. paid all their money), none of those persons who ran the
company into the ground should be allowed to benefit," former
Finance Minister Karen Nunez-Tesheira said.
Minister Nunez-Tesheira was commenting on CLICO's decision to pay
more than $63 million to former directors, inclusive of their
companies and connected parties, according to Trinidad Express.
"Based on my information of what is in the Bob Lindquist forensic
report on CL Financial, which the Government and the Governor of
the Central Bank have copies of, there is absolutely no way from a
legal or moral perspective that they should have made those
payments," stated Ms. Nunez-Tesheira who was finance minister at
the time of the CL Financial collapse in 2009, the report notes.
Recalling that it was the Central Bank which commissioned
Lindquist to do a report on CL Financial, Ms. Nunez-Tesheira said
the report demonstrated that the persons running the company did a
number of things which did not benefit the policyholders and which
caused the policyholders to be in the position that they are
today, the report discloses.
"So what you are doing (by paying the former directors) is
rewarding them for alleged wrongdoing," Ms. Nunez-Tesheira stated,
the report notes.
The report discloses that Ms. Nunez-Tesheira pointed out that
significantly, the report of the Commission of Enquiry into CLICO
and HCU, chaired by Sir Anthony Colman, had not been made public,
"after two years."
Ms. Nunez-Tesheira hypothesized that government had not released
the report because it would make the payments to the former
directors even less justifiable, the report relays.
"Some of the people who benefitted (from payments) were those who
chose to pay the TT$2,000 (penalty for failure to appear) rather
than attend the Commission of Enquiry," she said, the report
discloses.
"Until those persons have been cleared of any wrongdoing, no
monies should be paid to them," Ms. Nunez-Tesheira stated, the
report discloses.
Ms. Nunez-Tesheira noted that the former Governor of the Central
Bank (Ewart Williams) had taken key members of CL Financial under
civil proceedings in 2011, the report says.
"I don't know what has become of those proceedings," Ms. Nunez-
Tesheira said, the report relays.
"This Government has used some sort of rationale, based on the
policy statement that they created, to make payments and that is
going against the spirit and intent of the MOU (Memorandum of
Understanding signed in 2009)," she said, the report discloses.
"If you look at the Central Bank Act, one of the provisions is
basically that people deemed to be responsible for the demise or
financial difficulties of a company cannot be allowed to benefit
and that at least such benefits can only come at the very end when
everyone else has been made whole," Ms. Nunez-Tesheira said, the
report discloses.
Ms. Nunez-Tesheira stated further that when the Central Bank
Governor was given authority over insurance companies, by virtue
of the amendment of the Central Bank Act in 2009, a policy was
drafted with respect to the definition of third parties in keeping
with international standards, according to the report.
"I understand that this Government crafted a new policy and it
seems to me, based on the names called, those are persons who seem
to be associated with this current Government," the report relays.
"And one has to wonder whether this new policy was deliberately
crafted to be able to pay these persons money, something which
cannot be right under any circumstances. There can be no
justification for this," Ms. Nunez-Tesheira said, the report
notes.
The report notes that Ms. Nunez-Tesheira said Government was also
being "opaque" over the amount of money it received in profits
from the CL Financial companies.
"You (the Government) are only telling us about how much it cost
(to bail out CL Financial). Tell us how much revenue the
Government has obtained from the Methanol company, from Republic
Bank and other companies since 2009," Minister Nunez-Tesheira
stated, the report adds.
About CLICO International
Colonial Life Insurance Company Ltd. (CLICO) is a member of the CL
Financial Group. CL Financial Limited is a privately held
conglomerate in Trinidad and Tobago. Founded as an insurance
company by Cyril Duprey, Colonial Life Insurance Company was
expanded into a diversified company by his nephew, Lawrence
Duprey. CL Financial is now one of the largest local
conglomerates in the region, encompassing over 65 companies in 32
countries worldwide with total assets standing at roughly US$100
billion.
* * *
As reported in the Troubled Company Reporter-Latin America on July
7, 2014, Trinidad Express said that the Central Bank has placed
the responsibility of voluntary separation package (VSEP)
negotiations for workers at insurance giant Colonial Life
Insurance Company Ltd. (CLICO) with the company's board, after
which it will review accordingly, the bank said in a statement.
The bank's statement follows protest action by CLICO workers,
supported by their union, the Banking, Insurance and General
Workers' Union (BIGWU), outside the Central Bank in Port of Spain,
according to Trinidad Express.
In a separate TCRLA report on June 26, 2014, Caribbean360.com said
that the Trinidad and Tobago government has welcomed an Appeal
Court ruling that the Attorney General Anand Ramlogan said saves
the country from paying out more than TT$1 billion (TT$1 = US$0.16
cents) to policyholders of the cash-strapped CLICO. The Appeal
Court overturned the ruling of a High Court that ruled members of
the United Policyholders Group (UPG) were entitled to be paid the
full sums of their polices. CLICO financially caved in on itself
at the end of 2008 after the investment instruments of major
policyholders matured and they wanted hundreds of millions of
dollars they were owed.
On Aug. 6, 2013, the TCR-LA, citing Caribbean360.com, said that
over TT$8 billion worth of CLICO's profitable business will be
transferred to Atruis, a new company that will be owned by the
state. The Trinidad Express said that the Cabinet approved the
transfer as the Finance and General Purposes Committee continues
to discuss a letter of intent hammered out by the Ministry of
Finance and CL Financial's 400 shareholders, which envisions
taxpayers will recover the more than TT$20 billion Government has
injected since 2009 to keep CL subsidiary CLICO and other
companies afloat.
At its annual general meeting in Sept. 2013, CL Financial
shareholders voted to extend the agreement with Government until
August 25, 2014, while Cabinet decides on a new framework accord
to recover the debt owed to Government through divestment of CL
subsidiaries, including Methanol Holdings, Republic Bank,
Angostura Holdings, CL World Brands and Home Construction Ltd.,
Caribbean360.com related. Proceeds from the divestment of these
assets will go toward Government's recovery of the billions it
pumped into CLICO.
TRINIDAD & TOBAGO: Postal Workers Want 18.5% More
-------------------------------------------------
Michelle Loubon at Trinidad Express reports that postal workers
are appealing to Chief Personnel Officer (CPO) Stephanie Lewis to
intervene and fast track their request for an "18.5 per cent
increase to their basic salary." They are also appealing to both
Lewis and Public Utilities Minister Nizam Baksh to intervene and
speed up their negotiations before Parliament is prorogued on June
17, according to Trinidad Express.
The report notes that Reginald Crichlow, general secretary of the
Trinidad and Tobago Postal Workers Union, union president David
Forbes and workers staged a protest outside the CPO's office at St
Vincent Street, Port of Spain.
To date, Mr. Crichlow said they have only dealt with "non-cost
items" (health and safety issues) and are yet to move to cost
items like increase in salaries and vacation, the report
discloses.
Mr. Crichlow said: "We are asking for an 18.5 per cent increase in
a number of job positions. The job evaluation is 18.5 per cent to
the basic salary to bring us concurrent with the international
market. There are no comparators in Trinidad and Tobago. We have
to go on an international level. We are looking at about 52 posts
including managers, monthly paid staff, delivery, mail and
transport officers.", the report relays.
Mr. Crichlow said they would only implement strike action if all
their other options were exhausted, the report notes.
Mr. Crichlow said: "Strike action remains the tool of any worker.
Because of the lack of proper responses, we would seek discussion
and negotiation until we reach the point where we are comfortable.
We are not going back to normalcy. Normalcy does not mean we might
not be on the job. But we would not be normal until we resolve the
issue. We are now in 2015. Workers are underpaid," the report
relates.
Via a telephone interview, Public Utilities Minister Nizam Baksh
said: "They sent me a letter and the PS (Jacinta Bailey-Sobers)
sent it to the CPO. The matter has been sent to the CPO. They are
looking for quick action from the CPO, the report notes.
"We would want to settle as quickly as possible. I had some
meetings with the Finance Minister (Larry Howai). But we are
waiting on the CPO. This is one of the current ones. And we are
trying to get it settled. We already have a benchmark by which
unions are settling. We want to bring it about as fast as
possible," Mr. Baksh added.
=============
U R U G U A Y
=============
ADMINISTRACION NACIONAL: S&P Raises CCR to 'BB+'; Outlook Stable
----------------------------------------------------------------
Standard & Poor's Ratings Services raised its long-term corporate
credit rating on Administracion Nacional de Combustibles, Alcohol
y Portland to 'BB+' from 'BB'. The outlook is stable.
The rating action on ANCAP follows the upgrade of Uruguay to 'BBB'
from 'BBB-'. S&P believes that there is a "very high" likelihood
that the government would provide timely and extraordinary support
to ANCAP, in case of financial distress.
ANCAP's 'b' stand-alone credit profile (SACP), in turn,
incorporates the company's dominant market position due to its
law-protected monopoly position as the nation's sole petroleum
importer, refiner, and supplier of refined products to Uruguay's
distributors. S&P also incorporates the volatility and
cyclicality in refining margins and operating challenges as a
result of the company's operation of a single, small refinery,
with a total installed capacity of 50,000 barrels per day.
Additionally, S&P includes the company's very small or negative
operating cash flow generation in its analysis.
S&P's assessment of a "very high" likelihood of extraordinary
government support is based on S&P's assessment of ANCAP's "very
important" role as the sole petroleum importer, refiner, and
supplier of refined products. The company also has a "very
strong" link with the government, particularly regarding budget
approval process, debt authorization, and tax payments.
***********
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 * * *