/raid1/www/Hosts/bankrupt/TCRLA

/raid1/www/Hosts/bankrupt/TCRLA_Public/160112.mbx T R O U B L E D C O M P A N Y R E P O R T E R L A T I N A M E R I C A Tuesday, January 12, 2016, Vol. 17, No. 7 Headlines A R G E N T I N A BUENOS AIRES CITY: Moody's Rates 2016 Treasury Bills Program Caa1 GPAT COMPANIA: Moody's Puts 'B2' GSR on ARS250MM Sr. Debt Issuance OPTIMUM RENTA: Moody's Assigns Initial Caa-bf Rating on New Bond B R A Z I L BRAZIL: Rejects From Ibovespa Reflect Changing Market MASISA SA: Commences Tender Offer For Up to US$100MM in 2019 Notes MASISA SA: S&P Affirms 'B+' Rating; Outlook Negative SETE BRASIL: Said to Mull Bankruptcy Filing in Brazil TOV CORRETORA: Gets Order to Liquidate in Money Laundering Fight C A Y M A N I S L A N D S COI PROPERTY: Members Receive Wind-Up Report COI PROPERTY SLP: Members Receive Wind-Up Report EDWARDS INTERNATIONAL: Shareholders Receive Wind-Up Report EUROPEAN RETAIL: Shareholder Receives Wind-Up Report GHISOLFA INVESTMENT: Shareholders Receive Wind-Up Report H&F SOFTWARE: Shareholders Receive Wind-Up Report INDOCHINA INDUSTRIAL: Shareholder Receives Wind-Up Report LANGARA CAPITAL: Shareholders Receive Wind-Up Report LEDA CAYMAN: Shareholders Receive Wind-Up Report METIS CAYMAN: Shareholders Receive Wind-Up Report PRENTICE CAPITAL: Shareholder Receives Wind-Up Report PRENTICE LONG/SHORT: Shareholder Receives Wind-Up Report ROSSLYN ASSET: Shareholder Receives Wind-Up Report SAFI CONSULTANTS: Sole Member Receives Wind-Up Report SOFAER CAPITAL: Shareholders Receive Wind-Up Report SOUTHWEST ASSURANCE: Shareholders Receive Wind-Up Report P U E R T O R I C O PUERTO RICO: Assured Guaranty Files Suit to Stop "Clawback" SPANISH BROADCASTING: Closes Exchange of Stations in Puerto Rico V I R G I N I S L A N D S HOVENSA LLC: Seeks to Honor Consultant Agreements, Pay Bonuses HOVENSA LLC: Has Exclusive Right to File Plan Until March 14 - - - - - ================= A R G E N T I N A ================= BUENOS AIRES CITY: Moody's Rates 2016 Treasury Bills Program Caa1 ----------------------------------------------------------------- Moody's Latin America Agente de Calificacion de Riesgo has assigned a (P)Caa1 (Global Scale local currency) and Baa1.ar (Argentina National Scale) ratings to the 2016 Short-Term Treasury Bills Program of the City of Buenos Aires for up to ARS5,000 million. The assigned ratings are in line with the City's long term local currency debt ratings. RATINGS RATIONALE The 2016 program, authorized by law N§5.495 considers a maximum issuance of ARS5,000 million. The assigned debt ratings reflect the capacity of the City of Buenos Aires to honor these short-term treasury bills as captured in the current Caa1/Baa1.ar debt ratings. The City of Buenos Aires intends to issue twelve series of short term bills in the domestic market, the first of which -Series 1- is scheduled for January 13th and the others throughout the rest of the current fiscal year being all the planned Series payable in local currency. Series 1 in turn will have two classes and present bullet amortization in the months of April of this year and in January of 2017 respectively. The total amount that could be issued under this program represents approximately 4.5% of the City's 2016 expected total revenues. 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 or anticipates changes in the main conditions that the bills will carry. Should issuance conditions and/or final documentation of any of the series under this program 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. WHAT COULD CHANGE THE RATING UP/DOWN Given the strong macroeconomic and financial linkages between the Government of Argentina's and Sub-sovereigns economic and financial ratings, and upgrade of Argentina's sovereign bonds ratings and/or the improvement of the country's operating environment could lead to an upgrade of the City of Buenos Aires ratings. Conversely, a downgrade in Argentina's bond ratings and/or further systemic deterioration or idiosyncratic risks arising in the City of Buenos Aires --such as a rapid increase in the debt to total revenues ratio of the City-- could exert downward pressure on the ratings assigned and could translate in to a downgrade in the near to medium term. GPAT COMPANIA: Moody's Puts 'B2' GSR on ARS250MM Sr. Debt Issuance ------------------------------------------------------------------ Moody's Latin America Agente de Calificacion de Riesgo has assigned a B2 global scale rating (GSR) and a Aa2.ar national scale rating (NSR) to GPAT Compania Financiera (GPAT)'s takedown under its senior debt program of ARS 1500 million. The issuance, for up to ARS250 million, will be due in 18 months. The outlook on all ratings is positive. These ratings were assigned to GPAT Compania Financiera S.A.'s ARS 250 million senior unsecured debt issuance: B2 Global Local Currency Debt Rating Aa2.ar Argentina National Scale Local Currency Debt Rating RATINGS RATIONALE The global scale senior unsecured debt rating considers the challenging operating environment in Argentina, balanced by the very high probability that GPAT will receive support from its foreign-owned parent, B1 rated Banco Patagonia, in the event of stress. While GPAT's GSR compares poorly with global peers, its NSR is one of the highest in the country. Despite the increased probability of credit positive policies being implemented under the new administration, there are still ongoing uncertainties around the economic environment in Argentina, characterized by high inflation and weak economic growth. These credit challenges outweigh fundamental credit strengths including GPAT's key role as the financial agent for General Motors Argentina and its strong commercial and strategic importance to the corporation, as well as its good asset quality, profitability and capital metrics. GPAT's ratings also consider risks associated with the company's monoline business model and its funding structure, which is heavily reliant on senior debt issuances. In line with the positive outlook on the sovereign, the outlook for all GPAT's ratings is positive, reflecting our expectations that new administration will continue to implement credit positive policies, which in turn should positively affect GPAT's business prospects and earning generation capacity. The ratings could face upward pressure if Banco Patagonia's ratings are upgraded due to an upgrade in both Argentina's government bond rating and country ceiling as a result of an improvement in the country's economic or institutional strength, or a reduction in its susceptibility to event risk. Reflecting the positive outlook, downward rating pressure is unlikely at this time. GPAT is 99% owned by Banco Patagonia (local currency deposit rating B1 stable, BCA caa1). The one-notch differential between the B1 local currency deposit rating for Banco Patagonia and the B2 debt rating for GPAT reflects the structural subordination of GPAT's bondholders to all liability holders of Banco Patagonia. GPAT Compania Financiera S.A. is headquartered in Buenos Aires, Argentina, and reported ARS 2,029 million of total assets and ARS 739 million of shareholders' equity as of September 2015. OPTIMUM RENTA: Moody's Assigns Initial Caa-bf Rating on New Bond ---------------------------------------------------------------- Moody's Latin America Agente de Calificacion de Riesgo has assigned initial bond fund ratings to Optimum Renta Mixta Flexible FCI, a new bond fund that will be managed by BNP Paribas Investment Partners Argentina SGFCI SA in Argentina. The global scale and national scale ratings assigned are: -- Optimum Renta Mixta Flexible FCI; rating of Caa-bf/ Baa-bf.ar. RATINGS RATIONALE "The fund ratings are based on the fund's model portfolio composition that show over 65% of invested assets in Argentinian government bonds with ratings of Caa/Baa.ar", said Moody's analyst Carlos de Nevares. The remainder of the fund's asset allocation is expected to be in local T-bills or corporate bonds. Based on this portfolio composition, the fund is expected to maintain a maturity-adjusted weighted average credit quality consistent with the assigned rating. The rating agency commented that Optimum Renta Mixta Flexible is a new fund with no prior track record, but is managed by an experienced manager. The fund's portfolio will have an average duration between three and five years. Moody's analysis was performed on a model portfolio provided by the fund sponsor. The rating agency expects the fund to be managed in line with the model portfolio. However, Moody's noted that if the fund's invested portfolio deviates materially from the model portfolio, the fund's rating could be changed. The fund is expected to be launched to the market. The fund anticipates significant growth with future investments from institutional investors, such as local insurance companies and large corporates, who have historically been clients of BNPP IP Argentina SGFCI. BNPP IP Argentina, is the local subsidiary of the international group BNP Paribas Investment Partners which has a 2.6% market share in the Argentinian asset management industry. As of November 2015, BNP Paribas IP Argentina managed investments of approximately AR$ 5.71 billion or roughly $429.0 million. =========== B R A Z I L =========== BRAZIL: Rejects From Ibovespa Reflect Changing Market ----------------------------------------------------- Denyse Godoy and Fabiola Moura at Bloomberg News report that for evidence of just how far Brazil has fallen, look no further than the changing face of the Ibovespa index. Gol Linhas Aereas Inteligentes SA nd Centrais Eletricas Brasileiras SA, Latin America's largest electric utility, were ejected from the shrinking benchmark stock gauge in the latest quarterly reshuffling last week, according to Bloomberg News. Weg SA, a little known industrial-machinery maker whose market value has swollen to BRL24.2 billion ($6 billion), 35 times that of Gol's, was added, Bloomberg News notes. Gol and Eletrobras, as the state-run utility is known, join a list of more than 20 stocks that are no longer on the index but at the start of the decade were posting stock gains of as much as 50 percent a year, Bloomberg News relays. Other once-mighty companies have seen their weighting on the Ibovespa wither, Bloomberg News discloses. In March 2010, when the Ibovespa reached a record high, Petroleo Brasileiro SA was preparing for a record-breaking share sale, miner Vale SA accounted for almost 17 percent of the gauge's weighting and OGX, the oil startup of Brazil's then-richest man, Eike Batista, was among the most-traded stocks, Bloomberg News says. Today, OGX (now named Ogpar) trades at 3 centavos after filing for bankruptcy protection, Petrobras has lost almost 80 percent of its value and Vale's weighting has fallen to a little more than 5 percent of the Ibovespa, Bloomberg News notes. "Five years ago, we could have imagined that prices of commodities would fall a little, but not as dramatically as they have," said Paulo Figueiredo, an economist at asset management firm FN Capital in Petropolis, Brazil, Bloomberg News discloses. It has "changed the Ibovespa portfolio in a huge way. That's the portrait of the transformation of the Brazilian economy," he added. Bloomberg News says that Gol, which in 2010 was rated a buy by 90 percent of the analysts that covered it, lost 83 percent in 2015 and is expected to post its fifth straight annual loss amid surging dollar debt and fuel costs and weaker demand. Bloomberg News notes that Eletrobras lost more than three-quarters of its value in the past five years after the government forced it to cut prices in exchange for generating-concession renewals. Gol and Eletrobras's press offices declined to comment. Among companies no longer on the Ibovespa's portfolio since 2010, seven were acquired, including credit-card processor Redecard SA and air carrier TAM SA, Bloomberg News relays. Homebuilders Rossi Residencial SA and PDG Realty SA lost their spots in the index after debt surged and they had to scale back operations. Batista's mining venture, MMX Mineracao e Metalicos SA, also filed for bankruptcy protection, Bloomberg News recalls. As oil and metals prices tumbled, Brazil's key raw-materials producers suffered, Bloomberg News notes. Both West Texas Intermediate crude and the S&P GSCI index of commodities are down by more than half in the past five years, Bloomberg News relays. That has reduced the weighting of commodities companies on the index to about 20 percent from 50 percent in 2010, Bloomberg News adds. MASISA SA: Commences Tender Offer For Up to US$100MM in 2019 Notes ------------------------------------------------------------------ Masisa S.A. disclosed the commencement of a tender offer to purchase for cash up to US$100,000,000 in aggregate principal amount of its outstanding 9.500% Senior Notes due 2019. The Offer is being made by Masisa pursuant to the offer to purchase dated January 6, 2016 and the related letter of transmittal. The Offer will expire at 11:59 p.m., New York city time, on February 3, 2016, unless extended or earlier terminated. The early tender deadline for the Offer will be 5:00 p.m., New York City time, on January 20, 2016. Holders of the Notes must validly tender their Notes prior to or at the Early Tender Time in order to be eligible to receive the Early Tender Payment in addition to the Purchase Price. The Notes tendered may be withdrawn prior to 5:00 p.m., New York City time, on January 20, 2016, but not thereafter, except as required by applicable law. A full text copy of the press release is available free at: http://is.gd/ny3qCS MASISA SA: S&P Affirms 'B+' Rating; Outlook Negative ---------------------------------------------------- Standard & Poor's Ratings Services affirmed its 'B+' ratings on Masisa S.A. The outlook remains negative. The rating affirmation follows Masisa's announcement of a planned cash tender for up to $100 million of its 9.5% $300 million senior unsecured bond due 2019 at a price of $95 per $100 in nominal value on early exercise by Jan. 20, 2016, and $90 per $100 in nominal value afterwards and until Feb. 3, 2016. The company will finance the tender offer with proceeds from non-core asset sale. S&P views the proposed offer as an opportunistic liability management transaction. Despite the below-par offer--but above current market prices of about $90-- S&P don't expect likelihood of a conventional default in the near term if the transaction doesn't occur. Moreover, S&P views the transaction as part of the strategy of reducing debt with proceeds of asset sales, and the tendered bonds are among the most expensive debt the company holds. After Masisa reduces the debt, its debt to EBITDA will likely drop to 4x within the next two years. This could lead S&P to revise the outlook to stable in the short term. Nevertheless, S&P will reassess the company's credit quality once the transaction is complete, incorporating our expectations of operating performance, liquidity, and cushion under the existing covenants (mainly net debt to EBITDA of 4.5x and EBITDA interest coverage of 3x). SETE BRASIL: Said to Mull Bankruptcy Filing in Brazil ----------------------------------------------------- Francisco Marcelino and Cristiane Lucchesi at Bloomberg News report that Grupo BTG Pactual and other investors in a troubled drilling-rig supplier will meet this month and decide whether Sete Brasil Participacoes SA will file for bankruptcy protection after oil prices collapsed and it was cited in a sprawling corruption scandal, four people with direct knowledge of the matter said. Shareholders may vote to seek legal protection from creditors for the venture in a Jan. 21 meeting, which would be the first step toward an eventual liquidation of the Rio de Janeiro-based company's assets, according to the people, who asked not to be identified discussing a private matter, Bloomberg News notes. One of the people said a vote for a filing is unlikely this month, adding that under Brazilian law the company might also avoid liquidation through a restructuring either inside or outside the bankruptcy process, according to Bloomberg News. Bloomberg News relays that Sete Brasil, which once boasted of ambitions to build the world's biggest deep-water drilling fleet, joins more than a dozen companies crippled by a 22-month-old corruption investigation that has helped tip Brazil into recession and left the nation's leaders fighting for their political survival. A possible bankruptcy filing could mark the beginning of a new wave of financial pain for Brazilian companies as key Sete shareholders that include Petroleo Brasileiro SA, Brazil's biggest banks and pension funds would be forced to write off loans or stakes in the rig supplier, Bloomberg News says. Many have already booked some of those losses. 'Viable Restructuring' Bloomberg News notes that the company fell into financial distress after it was unable to secure long-term financing from state development bank BNDES amid allegations of kickbacks and after its only client, state-run oil producer Petrobras, started slashing overall investments. Sete Brasil said in a e-mailed statement that it "continues to work to put together a viable restructuring plan, while shareholders weigh the different strategic scenarios to be pursued," Bloomberg News adds. As reported in the Troubled Company Reporter-Latin America on Dec. 29, 2015, Standard & Poor's Ratings Services affirmed and then withdrew its global and national scale corporate credit ratings on Sete Brasil Participacoes S.A. at its request. At the time of the withdrawal, all corporate credit ratings were 'SD' and the R$1.85 billion debenture issuance rating was 'brCC' with a negative CreditWatch. TOV CORRETORA: Gets Order to Liquidate in Money Laundering Fight ---------------------------------------------------------------- Denyse Godoy and Paula Sambo at Bloomberg News report that Brazil's central bank ordered TOV Corretora to liquidate amid allegations it didn't follow rules to prevent money laundering, making it at least the sixth currency broker in recent months to be forced to close. The central bank cited "serious violations of legal rules" in a decree ordering the liquidation, according to Bloomberg News. TOV allegedly engaged in foreign-exchange contracts for import and financial transfers abroad for significant amounts that weren't compatible with the size of its clients, while also not consistently identifying its customers, the central bank's press office said in an e-mail to Bloomberg News. Pocos de Caldas, Brazil-based TOV declined to comment on the liquidation or the accusations. "In doing so, the brokerage firm took advantage of its status as an institution of the national financial system to perform illegitimate and atypical transactions," Bloomberg News quoted the central bank as saying. "It failed to adopt measures required by current regulations aimed at preventing money laundering and terrorist financing," the central bank added. TOV, which also acts as a stock broker with about 400 employees, joins at least five other brokerages that have been ordered to halt operations and return cash to clients since October for alleged "atypical" transactions, Bloomberg News notes. It comes as the central bank steps up efforts to fight money laundering against a backdrop of a sweeping corruption scandal that began at the state-run oil giant Petroleo Brasileiro SA and is reshaping Brazil's political and business landscape, Bloomberg News adds. ========================== C A Y M A N I S L A N D S ========================== COI PROPERTY: Members Receive Wind-Up Report -------------------------------------------- The members of COI Property GP Limited received on Dec. 23, 2015, the liquidator's report on the company's wind-up proceedings and property disposal. The company's liquidator is: CDL Company Ltd. P.O. Box 31106 Grand Cayman KY1-1205 Cayman Islands COI PROPERTY SLP: Members Receive Wind-Up Report ------------------------------------------------ The members of COI Property SLP received on Dec. 23, 2015, the liquidator's report on the company's wind-up proceedings and property disposal. The company's liquidator is: CDL Company Ltd. P.O. Box 31106 Grand Cayman KY1-1205 Cayman Islands EDWARDS INTERNATIONAL: Shareholders Receive Wind-Up Report ---------------------------------------------------------- The shareholders of Edwards International Holdings Ltd. received on Dec. 21, 2015, the liquidator's report on the company's wind-up proceedings and property disposal. The company's liquidator is: Ita Bank and Trust Company Ltd. Suite 4210 Canella Court 48 Market Street, Camana Bay P.O. Box 32203 Grand Cayman KY-1208 Cayman Islands EUROPEAN RETAIL: Shareholder Receives Wind-Up Report ---------------------------------------------------- The shareholder of European Retail Property Fund Ltd received on Dec. 28, 2015, the liquidator's report on the company's wind-up proceedings and property disposal. The company's liquidator is: Sporagnium Limited c/o Maitland Luxembourg S.A. 58, Rue Charles Martel L-2134 Luxembourg GHISOLFA INVESTMENT: Shareholders Receive Wind-Up Report -------------------------------------------------------- The shareholders of Ghisolfa Investment Ltd. received on Dec. 21, 2015, the liquidator's report on the company's wind-up proceedings and property disposal. The company's liquidator is: Morval Bank & Trust Cayman Ltd. Telephone: +1 (345) 949-9808 P.O. Box 30622 Grand Cayman KY1-1203 Cayman Islands H&F SOFTWARE: Shareholders Receive Wind-Up Report ------------------------------------------------- The shareholders of H&F Software Holdings (Cayman), Ltd. received on Dec. 15, 2015, the liquidator's report on the company's wind-up proceedings and property disposal. The company's liquidator is: Arrie R. Park Intertrust Corporate Services (Cayman) Limited 190 Elgin Avenue, George Town Grand Cayman KY1-9005 Cayman Islands c/o Niall Hanna Walkers 190 Elgin Avenue George Town Grand Cayman KY1-9001 Cayman Islands Telephone: +1 (345) 914 4201 INDOCHINA INDUSTRIAL: Shareholder Receives Wind-Up Report --------------------------------------------------------- The shareholder of Indochina Industrial Quang Nam Properties received on Dec. 21, 2015, the liquidator's report on the company's wind-up proceedings and property disposal. The company's liquidator is: Michael Paul Piro 06 Thai Van Lung street, District 1, 10th Floor Ho Chi Minh City Vietnam Telephone: +84 8 3520 2030 Facsimile: +84 8 3520 2036 LANGARA CAPITAL: Shareholders Receive Wind-Up Report ---------------------------------------------------- The shareholders of Langara Capital Partners Ltd. received on Dec. 18, 2015, the liquidator's report on the company's wind-up proceedings and property disposal. The company's liquidator is: Alric Lindsay Artillery Court Shedden Road P.O. Box 11371, George Town Grand Cayman KY1-1008 Cayman Islands e-mail: alric@caymanfs.com LEDA CAYMAN: Shareholders Receive Wind-Up Report ------------------------------------------------ The shareholders of Leda Cayman Limited received on Dec. 23, 2015, the liquidator's report on the company's wind-up proceedings and property disposal. The company's liquidator is: Sanjeev Dave Harneys Services (Cayman) Limited Harbour Place, 4th Floor 103 South Church Street P.O. Box 10240 Grand Cayman KY1-1002 Cayman Islands METIS CAYMAN: Shareholders Receive Wind-Up Report ------------------------------------------------- The shareholders of Metis Cayman Limited received on Dec. 23, 2015, the liquidator's report on the company's wind-up proceedings and property disposal. The company's liquidator is: Sanjeev Dave Harneys Services (Cayman) Limited Harbour Place, 4th Floor 103 South Church Street P.O. Box 10240 Grand Cayman KY1-1002 Cayman Islands PRENTICE CAPITAL: Shareholder Receives Wind-Up Report ----------------------------------------------------- The shareholder of Prentice Capital Long/Short Equity Fund, Ltd. received on Dec. 16, 2015, the liquidator's report on the company's wind-up proceedings and property disposal. The company's liquidator is: John Sutlic Telephone: (345) 938-2707 P.O. Box 30902 Grand Cayman, KY1-1204 Cayman Islands PRENTICE LONG/SHORT: Shareholder Receives Wind-Up Report -------------------------------------------------------- The shareholder of Prentice Long/Short Equity Fund Intermediate, LP received on Dec. 16, 2015, the liquidator's report on the company's wind-up proceedings and property disposal. The company's liquidator is: John Sutlic Telephone: (345) 938-2707 P.O. Box 30902 Grand Cayman, KY1-1204 Cayman Islands ROSSLYN ASSET: Shareholder Receives Wind-Up Report -------------------------------------------------- The shareholder of Rosslyn Asset Management Greater Asia Fund received on Dec. 21, 2015, the liquidator's report on the company's wind-up proceedings and property disposal. The company's liquidator is: Lynne Margaret Ross The River House, 17 Ward Street Tewantin Queensland 4565 Australia Telephone: (61) 7 5442 4298 Facsimile: (61) 7 5442 4298 SAFI CONSULTANTS: Sole Member Receives Wind-Up Report ----------------------------------------------------- The sole member of Safi Consultants Limited received on Jan. 5, 2016, the liquidator's report on the company's wind-up proceedings and property disposal. The company's liquidator is: Lion International Management Limited Craigmuir Chambers Road Town Tortola VG1110 British Virgin Islands SOFAER CAPITAL: Shareholders Receive Wind-Up Report --------------------------------------------------- The shareholders of Sofaer Capital Pacific Private Equity Fund received on Dec. 14, 2015, the liquidator's report on the company's wind-up proceedings and property disposal. The company's liquidator is: Winnie Leung 13th Floor LKF 29 29 Wyndham Street Central, Hong Kong Telephone: +011 852 2521 8882 SOUTHWEST ASSURANCE: Shareholders Receive Wind-Up Report -------------------------------------------------------- The shareholders of Southwest Assurance Company, Ltd. received on Dec. 24, 2015, the liquidator's report on the company's wind-up proceedings and property disposal. The company's liquidator is: Russell Smith c/o Antoine Powell BDO CRI (Cayman) Ltd. Floor 2-Building 3, Governors Square 23 Lime Tree Bay Ave P.O. Box 31229 Grand Cayman, KY1-1205 Cayman Islands Telephone: (345) 815-4558 ====================== P U E R T O R I C O ====================== PUERTO RICO: Assured Guaranty Files Suit to Stop "Clawback" ----------------------------------------------------------- Bond insurance subsidiaries of Assured Guaranty Ltd. (together with its subsidiaries, Assured Guaranty) have filed suit challenging the constitutionality of the revenue clawback instituted by the Commonwealth of Puerto Rico (Commonwealth) late last year. Assured Guaranty believes the clawback of revenues pledged to bond issues violates the U.S Constitution by illegally interfering with Assured Guaranty's contractual rights. In December, the Commonwealth announced that in order to fund its general obligation (GO) bond payments it would begin clawing back revenues pledged to other bond issues, including those of the Puerto Rico Highways and Transportation Authority (HTA), the Puerto Rico Convention Center District Authority (PRCCDA) and the Puerto Rico Infrastructure Financing Authority (PRIFA). This action has caused a payment default on PRIFA bonds and will eventually force the HTA and PRCCDA bonds into default. Such actions threaten the credibility of Puerto Rico and its government, undermine the markets' confidence in Puerto Rico's willingness to honor its financial commitments and limit its opportunities for economic recovery. According to Puerto Rico's Constitution and its related laws, the clawback may be implemented only to pay GO debt and only in the event that the Commonwealth's revenues are insufficient to pay the debt. The Commonwealth may not clawback pledged revenues to pay any of its other obligations. Debt service on Puerto Rico's GO bonds amounts to only approximately 19% of the Commonwealth's annual budgeted revenues. The clawback is not necessary to make GO bond payments. Yet the Commonwealth has invoked an option that not only ignores its own laws, but is unconstitutional and impairs the contracts entered into by holders and insurers of HTA, PRCCDA, and PRIFA debt. "The Commonwealth has not satisfied the preconditions to the clawback and is disregarding the priorities of its own Constitution and the rule of the law. This confiscation of revenues pledged to bondholders is illegal. We encourage the Commonwealth to instead focus on measures that build market credibility and develop specific fiscal plans to address its critical issues, including revenue collection," said Dominic Frederico, President and Chief Executive Officer of Assured Guaranty. "These actions stand in contrast to the consensual agreement that we and other creditors recently reached with Puerto Rico's electric utility, PREPA. That agreement provides for the reform and efficient recapitalization of PREPA. Assured Guaranty continues to stand ready to work constructively with Puerto Rico in a consensual way, in keeping with our long term support of the island," Frederico added. The suit, filed in United States District Court for the District of Puerto Rico, names Governor Alejandro Garcia Padilla and a host of government officials and seeks to have the clawback declared unconstitutional and asks the Court to issue an injunction against its implementation. As reported in the Troubled Company Reporter-Latin America on Dec. 28, 2015, Moody's Investors Service has downgraded $1.09 billion of Puerto Rico appropriation bonds issued by the Public Finance Corporation (PFC) to C from Ca, while maintaining other ratings assigned to the US territory's debt. SPANISH BROADCASTING: Closes Exchange of Stations in Puerto Rico ---------------------------------------------------------------- Spanish Broadcasting System, Inc., completed the exchange of three of its radio stations in Puerto Rico, WIOA-FM, WZET-FM and WIOC- FM, plus $1.9 million for three full power television stations in Puerto Rico, WTCV-DT - Channel 32, WVEO-DT - Channel 17 and WVOZ- DT - Channel 47, with International Broadcast Corp. The transaction will qualify as a like-kind exchange under Section 1031 of the Internal Revenue Code. The Company intends to file applications to participate in the FCC's television spectrum incentive auction with all three of the acquired licenses to monetize the potential excess value of the station swap option and maximize the potential cash proceeds that are expected to be created by the auction process. As participants in the FCC's television spectrum incentive auction, the Company will be subject to the FCC's anti-collusion rule, which prohibits certain communications during a "quiet period." The quiet period will end when the FCC issues a public notice announcing the completion of the reverse and the forward auctions, which will likely be sometime in late 2016. There can be no assurance that the FCC's television spectrum incentive auction will be successfully completed or any potential excess value and/or cash proceeds will be subsequently realized. * * * In November 2010, Moody's Investors Service upgraded the corporate family and probability of default ratings for Spanish Broadcasting System, Inc., to 'Caa1' from 'Caa3' based on improved free cash flow prospects due to better than anticipated cost cutting and the expiration of an unprofitable interest rate swap agreement. Moody's said Spanish Broadcasting's 'Caa1' corporate family rating incorporates its weak capital structure, operational pressure in the still cyclically weak economic climate, generally narrow growth prospects (though Spanish language is the strongest growth prospect) given the maturity and competitive pressures in the radio industry, and the June 2012 maturity of its term loan magnify this challenge. In July 2010, Standard & Poor's Ratings Services raised its corporate credit rating on Miami, Fla.-based Spanish Broadcasting System Inc. to 'B-' from 'CCC+', based on continued improvement in the company's liquidity position. The rating outlook is stable. "The rating action reflects S&P's expectation that, despite very high leverage, SBS will have adequate liquidity over the intermediate term to meet debt maturities, potential swap settlements, and operating needs until its term loan matures on June 11, 2012," said Standard & Poor's credit analyst Michael Altberg. =========================== V I R G I N I S L A N D S =========================== HOVENSA LLC: Seeks to Honor Consultant Agreements, Pay Bonuses -------------------------------------------------------------- Hovensa L.L.C. seeks authority from the District Court of the Virgin Islands Bankruptcy Division to honor agreements it entered into with 10 consultants, who were retained to effectively maintain and market its assets through a sale process, transition into the Chapter 11 case, complete the sale of its assets and wind down the Debtor's business and estate. According to the Debtor, now that the order for the sale of its assets to Limetree Bay Holdings, LLC, has been entered, the Debtor is at a critical stage in its chapter 11 case; a stage that requires reliable, dedicated, and most importantly, knowledgeable assistance. The Consultants have proven to be indispensable and essential to the results achieved to date, and their wealth of institutional knowledge has substantially reduced the administrative costs borne by the estate. Going forward, the Debtor will continue to rely on the Consultants as it works towards: (a) the close of the sale of its assets to Limetree; (b) the confirmation of a plan of liquidation; and (c) the orderly wind own of the Debtor's remaining business and otherwise resolving its remaining obligations and liabilities. The Debtor asserts that attempting to replicate the Consultants' institutional knowledge would be impossible, and replacing the Consultants with individuals lacking knowledge of the Debtor's operations would be inefficient and detrimental to the chapter 11 case -- particularly given that the Debtor must move on an expedited basis to accomplish these tasks. The Debtor also seeks authority from the Court to pay Contractual Bonuses to the Consultants conditioned on an agreement with each of the Consultants to extend his or her Consultant Agreement through January 31, 2016. Eight of the Consultant Agreements included a bonus component, which is scheduled to be paid on December 31, 2015. The Contractual Bonuses total $160,800, in the aggregate. The Debtor proposes to pay the Contractual Bonuses as well as a slight increase in each Consultant's monthly consulting fee in order to induce the Consultants to remain with the Debtor through this critical period. The total potential increase in monthly consulting fees to all Consultants is approximately $28,000, in the aggregate. The Debtor is represented by: Richard H. Dollison, Esq. LAW OFFICES OF RICHARD H. DOLLISON, P.C. 48 Dronningens Gade, Suite 2C St. Thomas, U.S. Virgin Islands 00802 Tel: (340) 774-7044 Fax: (340) 774-7045 -- and -- Lorenzo Marinuzzi, Esq. Jennifer L. Marines, Esq. William M. Hildbold, Esq. MORRISON & FOERSTER LLP 250 West 55th Street New York, NY 10019 Tel: (212) 468-8000 Fax: (212) 468-7900 About Hovensa Hovensa, L.L.C, owns an oil refinery and an oil storage facility business, both located on the island of St. Croix, U.S. Virgin Islands, and both of which are currently idled. The refinery and storage facilities span approximately 2,000 acres of land located on the south shore of St. Croix, including approximately 300 acres of undeveloped land to the east of the refinery and storage. Hovensa currently maintains its headquarters at 1 Estate Hope, Christiansted, St. Croix, USVI. Hovensa was formed in June 1998 and, through a series of agreements dated October 30, 1998, became a joint venture between Hess Oil Virgin Islands Corporation ("HOVIC"), a subsidiary of Hess Corporation (f/k/a Amerada Hess Corporation), and PDVSA V.I., Inc. ("PDV-VI" and together with HOVIC, the "JV Parties"), a subsidiary of Petroleos de Venezuela, S.A. ("PDVSA"), the national oil company of Venezuela. Hovensa L.L.C. filed a Chapter 11 bankruptcy petition in the U.S. Bankruptcy Court for the District of the Virgin Islands (Bankr. D. V.I. Case No. 15-10003) on Sept. 15, 2015, with a deal to sell most of the assets. Judge Mary F. Walrath is assigned to the case. The Debtor estimated assets of $100 million to $500 million, and liabilities of more than $1 billion. The Debtors tapped Morrison & Foerster LLP as bankruptcy counsel; The Law Offices of Richard H. Dollison as local bankruptcy counsel; Alvarez & Marsal North America, LLC to provide Thomas E. Hill as chief restructuring officer; Lazard Freres & Co. LLC as investment banker; White & Case LLP as special mergers and acquisitions counsel; and Prime Clerk LLC as claims and noticing agent and as administrative agent. The Official Committee of Unsecured Creditors tapped Dentons US LLP counsel; Hamm Eckard, LLP as its local/co-counsel; and Berkeley Research Group, LLC as its financial advisor. The Debtor's owners, HOVIC and PDV-VI, have agreed to provide DIP financing in an amount not to exceed $40 million. The DIP facility requires the Debtors to achieve certain milestones, including closing of the sale by Dec. 31, 2015. * * * Hovensa, L.L.C., has reached a deal to sell most of its assets to Limetree Bay Holdings, LLC for $220 million. The Debtor has filed a liquidating plan. The combined hearing to consider final approval of the Disclosure Statement and confirmation of the Plan is on Jan. 19, 2016, at 10:00 a.m. (prevailing Eastern Time). HOVENSA LLC: Has Exclusive Right to File Plan Until March 14 ------------------------------------------------------------ Cara Salvatore at Bankruptcy Law360 reported that the Hess-linked oil refinery at the center of a U.S. Virgin Islands bankruptcy tangle will maintain control of its bankruptcy for a bit longer, a federal judge ruled on Jan. 4, 2015, extending Hovensa LLC's exclusivity period to March 14. Hovensa filed for bankruptcy in September, citing poor economic conditions, "intense competition," and approximately $1.3 billion in losses between 2009 and 2011, according to first-day filings. The St. Croix refinery, which processed crude oil from Venezuela and other places, is dually owned by Hess Corp. and Petroleos de Venezuela. About Hovensa Hovensa, L.L.C, owns an oil refinery and an oil storage facility business, both located on the island of St. Croix, U.S. Virgin Islands, and both of which are currently idled. The refinery and storage facilities span approximately 2,000 acres of land located on the south shore of St. Croix, including approximately 300 acres of undeveloped land to the east of the refinery and storage. Hovensa currently maintains its headquarters at 1 Estate Hope, Christiansted, St. Croix, USVI. Hovensa was formed in June 1998 and, through a series of agreements dated October 30, 1998, became a joint venture between Hess Oil Virgin Islands Corporation ("HOVIC"), a subsidiary of Hess Corporation (f/k/a Amerada Hess Corporation), and PDVSA V.I., Inc. ("PDV-VI" and together with HOVIC, the "JV Parties"), a subsidiary of Petroleos de Venezuela, S.A. ("PDVSA"), the national oil company of Venezuela. Hovensa L.L.C. filed a Chapter 11 bankruptcy petition in the U.S. Bankruptcy Court for the District of the Virgin Islands (Bankr. D. V.I. Case No. 15-10003) on Sept. 15, 2015, with a deal to sell most of the assets. Judge Mary F. Walrath is assigned to the case. The Debtor estimated assets of $100 million to $500 million, and liabilities of more than $1 billion. The Debtors tapped Morrison & Foerster LLP as bankruptcy counsel; The Law Offices of Richard H. Dollison as local bankruptcy counsel; Alvarez & Marsal North America, LLC to provide Thomas E. Hill as chief restructuring officer; Lazard Freres & Co. LLC as investment banker; White & Case LLP as special mergers and acquisitions counsel; and Prime Clerk LLC as claims and noticing agent and as administrative agent. The Official Committee of Unsecured Creditors tapped Dentons US LLP counsel; Hamm Eckard, LLP as its local/co-counsel; and Berkeley Research Group, LLC as its financial advisor. The Debtor's owners, HOVIC and PDV-VI, have agreed to provide DIP financing in an amount not to exceed $40 million. The DIP facility requires the Debtors to achieve certain milestones, including closing of the sale by Dec. 31, 2015. * * * Hovensa, L.L.C., has reached a deal to sell most of its assets to Limetree Bay Holdings, LLC for $220 million. The Debtor has filed a liquidating plan. The combined hearing to consider final approval of the Disclosure Statement and confirmation of the Plan is on Jan. 19, 2016, at 10:00 a.m. (prevailing Eastern Time). *********** 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. 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