/raid1/www/Hosts/bankrupt/TCRLA_Public/160127.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, January 27, 2016, Vol. 17, No. 18
Headlines
A R G E N T I N A
BUENOS AIRES: Moody's Assigns Caa1 Rating on Class 16 Notes
C A Y M A N I S L A N D S
AUTOPISTAS DEL NORDESTE: Fitch 'B+' Rating on $162M Notes Affirmed
CONDOR OVERSEAS: Members Receive Wind-Up Report
EGYPTAIR CAPITAL: Commences Liquidation Proceedings
GLOBAL JET: Shareholders Receive Wind-Up Report
HARBERT VALUE: Placed Under Voluntary Wind-Up
HARVESTON GREATER: Placed Under Voluntary Wind-Up
ISOLA GROUP: Commences Liquidation Proceedings
KATIMBA CORPORATION: Members Receive Wind-Up Report
MSREF VII: Commences Liquidation Proceedings
MSREF VII JAPAN: Commences Liquidation Proceedings
MSREFF VII JAPAN ASSET: Members Receive Wind-Up Report
OPTIMA FOCUS: Placed Under Voluntary Wind-Up
PERSPECTIVE ASSET: Commences Liquidation Proceedings
RED DRAGON: Members Receive Wind-Up Report
SAN ANTONIO: Members Receive Wind-Up Report
UPSIDE GROWTH: Placed Under Voluntary Wind-Up
C O S T A R I C A
INSTITUTO COSTARRICENSE: Fitch Affirms 'BB+' IDRs
D O M I N I C A N R E P U B L I C
DOMINICAN REP: Fastest-Growing Economy in the Region, ECLAC Says
J A M A I C A
UC RUSAL: Chief Pessimistic About Aluminum Price
P U E R T O R I C O
PUERTO RICO: House Works on Plan That Faces Skepticism in Senate
X X X X X X X X
LATAM: IDB Closes 2015 With $11.3 Billion in Financing Approvals
- - - - -
=================
A R G E N T I N A
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BUENOS AIRES: Moody's Assigns Caa1 Rating on Class 16 Notes
-----------------------------------------------------------
Moody's Latin America Agente de Calificacion de Riesgo has
assigned Caa1 -- Global Scale local currency debt rating -- and
Baa1.ar rating -- on Argentina National Scale in local currency --
to Class 16 Notes for up to the equivalent in local currency of
Euro 60 million, to be issued by the City of Buenos Aires under
its Local Financing Program. The ratings are in line with the
City's long term local currency ratings, which carry positive
outlook.
RATINGS RATIONALE
The creation of the Local Financing Program was authorized by Laws
4315,4431 and 4472 of 2012, Laws 4810 and 4885 of 2013, Law 4949
of 2014 and Law 5496 of 2016. Class 16 to be issued under the
program, will constitute direct, unconditional, unsecured and
unsubordinated obligation of the city, ranking at all times pari
passu without any preference among other debts.
The bond will be issued and payable in Argentine Pesos for an
equivalent amount of Euro 60 million and sold in the local capital
market. It will pay interest on a quarterly basis and amortize in
four semiannual and equal installments starting two and a half
years after the issuance date with final maturity of 4 years. The
assigned ratings are in line with the city's Caa1 (global scale)
and Baa1.ar (Argentina's national scale) local currency debt
ratings.
According to the term sheet reviewed by Moody's, the expected
amount under Class 16 will represent less than 1% of the City's
total revenues budgeted for 2016. Given the relatively small
amount under this Class 16 and the expected increase in the City
of Buenos Aires' total revenues for the current fiscal year,
Moody's does not anticipate a relevant increase in the ratio of
total debt divided by total revenues for the end of 2016.
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
notes 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' 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.
==========================
C A Y M A N I S L A N D S
==========================
AUTOPISTAS DEL NORDESTE: Fitch 'B+' Rating on $162M Notes Affirmed
------------------------------------------------------------------
Fitch Ratings has affirmed Autopistas del Nordeste (Cayman) Ltd's
(AdN) US$162 million senior secured notes at 'B+'. The Rating
Outlook is revised to Positive from Stable.
The Outlook revision to Positive from Stable follows the rating
action taken on the sovereign rating in December 2015, which
reflects the continued positive economic performance relative to
peers, the reduction of external vulnerabilities, and progress on
gradual fiscal consolidation.
The rating is supported by the minimum revenue guarantee (MRG)
paid by the government of the Dominican Republic, ('B+', Positive
Outlook). This guarantee kicks in as current and expected future
toll revenues fall far below levels required to service debt and
cover project costs, which has been the case since the debt was
initially issued in 2006. The rating affirmation is based on the
internal credit enhancement available to the transaction,
deferrable principal payments and the expectation that the
government will continue to honor its obligation, albeit on a
delayed basis.
Repeated delays in the payment of the MRG have not eroded the
ability of the project to comply with its debt service obligations
given the credit enhancements available, such as reserve funds, a
stand-by letter of credit (SBLC) provided by the government upon
the concession and about US$15 million of internal liquidity in
the form of working capital contributed by the concessionaire's
stockholders. Fitch believes the delays are not signs of the
sovereign's incapacity or unwillingness to pay, but rather a
manner to make use of the financial flexibility offered by the
liquidity position of the project. If such a buffer was not
available, Fitch believes the government would try and reduce the
payment cycle. The presence of Multilateral Investment Guarantee
Agency (MIGA) insurance may also incentivise the government to
treat the MRG as a senior expenditure.
KEY RATING DRIVERS
Adequate Governmental Support: The government of the Dominican
Republic pledged an MRG that protects noteholders from the risk of
insufficient traffic over the life of the notes. The government
has continued to honor this pledge, and Fitch expects required
payments to be made over the life of the notes. The government
also offers a SBLC required under the concession agreement to
provide additional support to the transaction.
Financial Guarantee: The notes benefit from a partial political
risk guarantee provided by the MIGA, a member of the World Bank
Group. A failure by the government to honor the MRG would be
covered under this guarantee; however, disbursements can be
delayed and internal liquidity is essential to the project's
capacity to service debt. Fitch believes the MIGA guarantee
provides additional incentives for the government to honor its
obligations under the concession.
Low Volume Touristic Asset [Revenue Risk - Volume: Weaker]: The
toll road connects Santo Domingo and the northern province of
Samana. The road provides an efficient route but has competing
free alternatives. Moreover, despite robust gains in recent years,
actual traffic remains far below initial projections requiring
substantial payments via the MRG. This dependence on external
revenues is expected to continue in the near to intermediate term.
Regular Toll Increases [Revenue Risk - Price: Midrange]: The
operator of the road is able to increase tolls under the
concession agreement and has historically completed annual rate
adjustments to account for inflation without issue.
Predictable Operating Costs [Infrastructure Development & Renewal:
Midrange]: A fixed operation-and-maintenance agreement with an
experienced operator partially mitigates substantial cost
escalations. Additionally, the project benefits from oversight
from an independent engineer who provides quarterly reports to
investors on the overall condition of the toll road and current
and future maintenance needs.
Conservative Debt Structure [Debt Structure: Stronger]: The notes
are fully amortizing, fixed-rate obligations with an adequate
covenant package. Liquidity available within the structure
includes a six-month debt service reserve account and a major
maintenance reserve account. These reserves account for liquidity
to cover approximately 12 months of debt service. Additional
flexibility is also available as targeted principal amortization
on the notes is deferrable.
Peer Group: The transaction's dependence on revenues from the
Dominican Republic effectively caps the rating at the level of the
sovereign; however, financial metrics such as debt service
coverage ratio (DSCR) and net-debt to cash flow available for debt
service are generally consistent with higher rated peers such as
ENA Este, S.A.
RATING SENSITIVITIES
Positive: A positive rating action on the sovereign, to the extent
that project fundamentals and financial metrics support a rating
improvement.
Negative: A negative rating action on the sovereign.
Negative: Delays in the payment of the MRG that result in material
deterioration of project liquidity.
SUMMARY OF CREDIT
In 2015, traffic on the toll road increased 15.3% versus 2014 and
O&M expenses were practically at the targeted level. The stronger
growth in volume reflects an increased touristic activity in the
Samana region from local and international tourists, coupled with
improved economic prospects in the country. The increased levels
of traffic benefit the transaction by providing additional
liquidity to deal with delays in the payment of the MRG, but are
not sufficient to undermine the importance of the MRG payments.
During 2015, the government continued having heavy delays in the
payment of the MRG. However, there was no need to draw upon the
reserve fund or the SBLC the government provides upon the
concession. The increased cash generation as a result of the
significant traffic growth and the approximately US$15 million in
the form or working capital AdN maintains allowed for timely debt
service. The latter was retained by the shareholders and moved out
of the dividends account to provide additional liquidity to the
project during the months no MRG payment from the government is
received.
Four MRG payments were received in 2015 for the months of June
2014 to May 2015 with 145 days of collection in average. Payments
for the months of June to December 2015 have not been received to
date.
The transaction benefits from a partial credit guarantee from MIGA
which supports debt service payments should the government not
comply with their obligations. The guarantee pays 51% of debt
service not honored up to a maximum of 51% of the total principal
balance. The guarantee is not payable on a timely basis though,
and the transaction depends on the liquidity available internally
to meet debt service obligations prior to receipt of MIGA funds.
Currently, 25% of AdN's shares are held by two companies of the
Grodco group, which is in the process to sell its total
participation in the project to two companies of the Odinsa group
and to Caribbean Basin Construction Company. Once the share
acquisition is completed, Odinsa's participation in the equity of
AdN will go up to 66.31%. In Fitch's opinion, no negative impact
is expected on the project as a result of the abovementioned.
The toll road, completed in 2009, extends along 106 kilometers
(approximately 66 miles), connects Santo Domingo with the northern
province of Samana, and includes three toll plazas. In comparison
to alternative roads in the region, it considerably reduces the
travel distance between Santo Domingo and Samana. AdN is the
issuer, created under the laws of the Cayman Islands, and is an
exempted limited liability company.
CONDOR OVERSEAS: Members Receive Wind-Up Report
-----------------------------------------------
The members of Condor Overseas Holdings Ltd. received on Dec. 30,
2015, the liquidator's report on the company's wind-up proceedings
and property disposal.
The company's liquidator is:
Appleby Trust (Cayman) Ltd.
c/o Richard Gordon
Appleby Trust (Cayman) Ltd., 75 Fort Street
P.O. Box 1350 Grand Cayman KY1-1108
Cayman Islands
Telephone: +1 (345) 949 4900
EGYPTAIR CAPITAL: Commences Liquidation Proceedings
---------------------------------------------------
On Nov. 26, 2015, the sole shareholder of Egyptair Capital
Services 2004 resolved to voluntarily liquidate the company's
business.
Only creditors who were able to file their proofs of debt by
Dec. 29, 2015, will be included in the company's dividend
distribution.
The company's liquidator is:
Ellen J. Christian
c/o BNP Paribas Bank & Trust Cayman Limited
Royal Bank House, 3rd Floor
Shedden Road George Town
P.O. Box 10632 Grand Cayman KY1-1006
Cayman Islands
GLOBAL JET: Shareholders Receive Wind-Up Report
-----------------------------------------------
The shareholders of Global Jet Ltd. received on Jan. 8, 2016, the
liquidator's report on the company's wind-up proceedings and
property disposal.
The company's liquidator is:
Raymond E. Whittaker
FCM Ltd.
Telephone: (345) 946-5125
Facsimile: (345) 946-5126
P.O. Box 1982 Grand Cayman KY-1104
Cayman Islands
HARBERT VALUE: Placed Under Voluntary Wind-Up
---------------------------------------------
On Nov. 27, 2015, the sole shareholder of Harbert Value Class L
Holdings (Cayman), Ltd. resolved to voluntarily wind up the
company's operations.
Creditors are required to file their proofs of debt to be included
in the company's dividend distribution.
The company's liquidator is:
Harbert Value Fund GP, LLC
c/o Madeleine Welham
Ogier
89 Nexus Way Camana Bay
Grand Cayman KY1-9009
Cayman Islands
Telephone: +1 (345) 949 9876
Facsimile: +1 (345) 949-9877
HARVESTON GREATER: Placed Under Voluntary Wind-Up
-------------------------------------------------
On Nov. 27, 2015, the sole member of Harveston Greater China
Special Opportunity Fund resolved to voluntarily wind up the
company's operations.
Only creditors who were able to file their proofs of debt by
Dec. 28, 2015, will be included in the company's dividend
distribution.
The company's liquidator is:
Richard Fear
c/o Ryan Charles
P.O. Box 2681 Grand Cayman KY1-1111
Cayman Islands
Telephone: (345) 814 7364
Facsimile: (345) 945 3902
ISOLA GROUP: Commences Liquidation Proceedings
----------------------------------------------
On Nov. 4, 2015, the sole shareholder of Isola Group Ltd. resolved
to voluntarily liquidate the company's business.
Only creditors who were able to file their proofs of debt by
Dec. 29, 2015, will be included in the company's dividend
distribution.
The company's liquidator is:
Mike Rafford
3100 West Ray Road, Suite 301
Chandler, AZ 85226
USA
KATIMBA CORPORATION: Members Receive Wind-Up Report
---------------------------------------------------
The members of Katimba Corporation received on Jan. 8, 2016, 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
MSREF VII: Commences Liquidation Proceedings
--------------------------------------------
On Nov. 19, 2015, the shareholder of MSREF VII Japan Asset XVI
L.P. resolved to voluntarily liquidate the company's business.
Creditors are required to file their proofs of debt to be included
in the company's dividend distribution.
The company's liquidator is:
Stephen Nelson
Collas Crill & CARD
Willow House, Cricket Square
P.O. Box 709 Grand Cayman KY1-1107
Cayman Islands
Telephone: (345) 949.4544
Facsimile: (345) 949.8460
MSREF VII JAPAN: Commences Liquidation Proceedings
--------------------------------------------------
On Nov. 19, 2015, the sole shareholder of MSREF VII Japan Asset
XVII L.P. resolved to voluntarily liquidate the company's
business.
Creditors are required to file their proofs of debt to be included
in the company's dividend distribution.
The company's liquidator is:
Stephen Nelson
Collas Crill & CARD
Willow House, Cricket Square
P.O. Box 709 Grand Cayman KY1-1107
Cayman Islands
Telephone: (345) 949.4544
Facsimile: (345) 949.8460
MSREFF VII JAPAN ASSET: Members Receive Wind-Up Report
------------------------------------------------------
The members of MSREFF VII Japan Asset I GP Ltd received on
Dec. 29, 2015, the liquidator's report on the company's wind-up
proceedings and property disposal.
The company's liquidator is:
Stephen Nelson
Telephone: 949-4544
Facsimile: 949-7073
Collas Crill & CARD
Willow House, 2nd Floor, Cricket Square
P.O. Box 709 Grand Cayman, KY1-1107
Cayman Islands
OPTIMA FOCUS: Placed Under Voluntary Wind-Up
--------------------------------------------
On Nov. 27, 2015, the sole member of The Optima Focus Master Ltd
resolved to voluntarily wind up the company's operations.
Only creditors who were able to file their proofs of debt by
Dec. 28, 2015, will be included in the company's dividend
distribution.
The company's liquidator is:
Richard Fear
c/o Ryan Charles
P.O. Box 2681 Grand Cayman KY1-1111
Cayman Islands
Telephone: (345) 814 7364
Facsimile: (345) 945 3902
PERSPECTIVE ASSET: Commences Liquidation Proceedings
----------------------------------------------------
On Nov. 26, 2015, the shareholders of Perspective Asset Management
Limited resolved to voluntarily liquidate the company's business.
Creditors are required to file their proofs of debt to be included
in the company's dividend distribution.
The company's liquidator is:
Summit Management Limited
c/o David Egglishaw
Governor's Square, Suite # 4-210
P.O. Box 32311 Grand Cayman KY1-1209
Cayman Islands
Telephone: (345) 945 7676
RED DRAGON: Members Receive Wind-Up Report
------------------------------------------
The members of Red Dragon Corporation received on Jan. 8, 2016,
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
SAN ANTONIO: Members Receive Wind-Up Report
-------------------------------------------
The members of San Antonio Investment Company received on Jan. 8,
2016, 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
UPSIDE GROWTH: Placed Under Voluntary Wind-Up
---------------------------------------------
On Nov. 27, 2015, the sole shareholder of Upside Growth Fund, SPC
resolved to voluntarily wind up the company's operations.
Creditors are required to file their proofs of debt to be included
in the company's dividend distribution.
The company's liquidator is:
Upside Gestao De Recursos Ltda.
c/o Ben Gillooly
Ogier
89 Nexus Way, Camana Bay
Grand Cayman KY1-9009
Cayman Islands
Telephone: +1 (345) 949 9876
Facsimile: +1 (345) 949-9877
===================
C O S T A R I C A
===================
INSTITUTO COSTARRICENSE: Fitch Affirms 'BB+' IDRs
-------------------------------------------------
Fitch Ratings has affirmed Instituto Costarricense de Electricidad
y Subsidiarias' (Grupo ICE) foreign- and local-currency Issuer
Default Ratings (FC/LC IDRs) at 'BB+' and its National Scale
ratings at 'AAA(cri)'. The Rating Outlook remains Negative. A
complete list of rating actions follows at the end of this
release.
Grupo ICE's ratings are supported by its linkage to the Sovereign
rating of Costa Rica (FC and LC IDRs rated 'BB+'/Negative Outlook)
which stems from the government ownership and government's
implicit and explicit support. ICE's Negative Outlook reflects the
Negative Rating Outlook on Costa Rica's Sovereign rating. The
company has strategic importance for the government given the
growing demand for electricity in the country and the government's
plans to increase renewable generation and reduce exposure to
fluctuations in fossil fuel prices. The ratings also reflect the
company's diversified portfolio of assets, adequate financial
profile, aggressive capital expenditure program oriented toward
increasing renewable generation capacity and maintaining a strong
market share position in the telecommunications business.
KEY RATING DRIVERS
DIVERSIFIED ASSET PORTFOLIO
Grupo ICE is a vertically integrated monopoly in the electricity
industry and the incumbent player in the telecommunications
industry in Costa Rica. ICE's mobile market share in terms of
subscribers was approximately 60% at the end of 2014. The ratings
reflect the company's low business risk resulting from its
business diversification and positive characteristics as a utility
service provider.
The company recorded an installed capacity of 2,338 megawatts (MW)
as of August 2015, including plants of its subsidiary, Compania
Nacional de Fuerza y Luz (CNFL). ICE is the exclusive owner of the
national transmission grid. The National Electric System (SEN) is
composed of Grupo ICE, CNFL, two municipal companies, and four
rural electrification cooperatives. There are also private
generators that sell energy to Grupo ICE. The SEN installed
capacity is 3,013MW as of August 2015.
For the LTM ended September 2015 the company generated CRC397,458
million in EBITDA (2014 EBITDA: CRC419.282 million). The company's
electricity segment represented approximately 56.7% of total
revenues as of September 2015 (2014: 57.7%) and the
telecommunications division contributed with 43.1% (2014: 42.1%),
supplemental services represented 0.2% (2014: 0.2%). Fitch expects
ICE's electricity business to increase its contribution given the
current and future expansion projects, as well as relatively
stable results in the telecommunications segment.
LEVERAGE DRIVEN BY CAPEX
Grupo ICE's ratings reflect the company's leverage, adequate
interest coverage and exposure to foreign exchange risk. In the
last few years, the company's leverage has weakened as result of
the ongoing large capital expenditure program, which has been
financed mainly with debt. Debt related to electricity projects
represents approximately 90% of the total debt and the remaining
funds are allocated to projects in the telecommunications sector.
The 305MW Reventazon project (currently financed through
Reventazon Finance Trust) is expected to begin operations in 2016.
Reventazon project will represent close to 10% of Costa Rica's
electricity installed capacity matrix. The Reventazon asset and
the associated debt will be incorporated in ICE's financial
statements when operation begins. Fitch forecasts a peak leverage
calculated as adjusted debt / EBITDAR of 5.9x during 2016 due to
Reventazon's incorporation to ICE's balance sheet. Fitch expects
the company will be able to reduce leverage in 2017 to 5.4x absent
of new large generation projects, and tariff recognition of the
debt service of the generation plants that will start operations.
Grupo ICE's consolidated debt as of September 2015 was
CRC1,947,006 million. The debt adjusted for operating leases was
CRC2,515,566 million for the same period. The leverage ratio for
the last 12 months, as of September 2015 was 5.4x (2014: 5.2x,
2013: 5.8x). Approximately 85% of total financial debt is
denominated in US dollars, which exposes the company to
fluctuations in the exchange rate. The company benefits from a
very favourable debt schedule, as approximately 48.6% of its
balance debt as of September 2015 matures after five years, 40.2%
between two and five years, and 11.2% in less than two years. The
Costa Rican government guarantees some loans from international
development banks, which represent approximately 12% of total
indebtedness. The figures consider consolidated debt with the
group's subsidiaries.
Grupo ICE recorded charges for currency exchange losses of
CRC3,411 million during the nine months period as of 2015, which
is well below the annual figure of CRC151,577 million during
fiscal year 2014. A devaluation of the local currency would
generate an increase in debt service payments and the debt service
coverage ratios could deteriorate. The debt service coverage ratio
measured as EBITDA/debt service was 1.6x for the LTM ended as of
September 2015 (2014: 1.8x).
AGGRESSIVE CAPITAL EXPENDITURE PLAN
Grupo ICE's capex investment plan is considered aggressive and
could weaken the company's financial profile, absent increased
cash flow generation and adequate tariff adjustments. The
company's capex plan considers investments by approximately USD3.2
billion during 2016-2020 in order to increase renewable generation
capacity and maintain its leadership position in
telecommunications in Costa Rica, if all the planned projects are
executed. Grupo ICE expects to finance its investments with a
combination of internal cash flow, debt, Build Operate and
Transfer (BOT) transactions, and special purpose vehicles.
Fitch expects the company will be able to reduce leverage as capex
requirements decrease in the medium term (2016-2018), absent large
new generation projects, and tariff recognition of the debt
service of the generation plants that will start operations in the
next few years.
During the nine months period as of September 2015, capital
expenditures of CRC208.930 million represented 21% of revenues.
During the years 2010 through 2013, this ratio was 44.2% per year
on average, which indicates that the largest investment phase of
the projects has been completed. Fitch forecasts that capex
investment for the years 2016 - 2018 could average 21% of total
revenues.
Going forward, leverage could increase consistently to over 6x if
the company finances its capex investment plan heavily with debt
and the revenues associated with these investments are delayed
beyond the expected ramp-up timeframe or do not received the
tariff adjustments opportunely.
HIGH EXPOSURE TO REGULATORY AND POLITICAL INTERFERENCE
Grupo ICE is exposed to regulatory interference risk given the
lack of clear and transparent electricity tariff schedules. The
company annually proposes to the regulator electricity tariffs for
end-users; in previous years, the regulatory and political
interference affected the tariff adjustment process.
Electricity tariffs are set using two mechanisms: through the
quarterly adjustment of variable costs of fuel (CVC) in place
since 2013, and the ordinary tariff review that considers the
operating costs. ICE cash flow benefits from the tariffs
adjustments to recognized expenses from previous years related to
fuel expenses, exchange rate difference for fuel oil purchases,
and energy import expenses, through deferred quarterly
adjustments.
The funding requirement of working capital by ICE Group depends on
the lag in cost recognition that may arise in both tariff reviews.
The telecom regulatory framework considers the price ceiling
methodology in tariffs, and grants operators authority to review
and adjust rates for some services in order to promote
competition.
Despite the regulatory risk, Grupo ICE has managed to maintain a
relative stable cash flow generation. Also, the company is exposed
to political interference given that the government appoints and
removes ICE's directors and executives, sets and approves the
company's tariffs, and regulates its budget.
KEY ASSUMPTIONS
-- The strong linkage between the Sovereign of Costa Rica and ICE
continues;
-- Grupo ICE remains important to the government as a strategic
asset for the country;
-- Fuel variable-cost tariff revision and ordinary tariff
adjustments are in place;
-- The Reventazon project begins operations by the end of 2016.
-- The 2016 tariff review considers the debt service and revenue
from Reventazon hydroelectric project;
-- Grupo ICE will continue to support its subsidiaries in terms
of its financial obligations, and as advisor on operational or
technical issues, when is needed or required.
RATING SENSITIVITIES
-- Grupo ICE's ratings could be negatively affected by any
combination of the following: sovereign downgrades; weakening
of legal, operational and/or strategic ties with the
government; or regulatory intervention that negatively affects
the company's financial performance;
-- Grupo ICE's ratings could be positively affected by an upgrade
of Costa Rica's sovereign rating.
Fitch has affirmed the following ratings:
Instituto Costarricense de Electricidad y Subsidiarias' (Grupo
ICE)
-- Long-term FC IDR at 'BB+'; Negative Outlook;
-- Long-term LC IDR at 'BB+'; Negative Outlook;
-- Senior unsecured debt at 'BB+';
-- Long-term national scale (Costa Rica) at 'AAA(cri)'; Stable
Outlook;
-- Short-term debt at 'F1+(cri)';
-- Senior unsecured domestic long-term debt (Costa Rica) at
'AAA(cri)'.
===================================
D O M I N I C A N R E P U B L I C
===================================
DOMINICAN REP: Fastest-Growing Economy in the Region, ECLAC Says
----------------------------------------------------------------
Dominican Today reports that new data from the United Nations
Economic Commission for Latin America and the Caribbean (ECLAC)
revealed that the Dominican Republic is the fastest-growing
economy in the Caribbean, with a GDP growth of 6.6 percent in
2015.
The country was followed by St Kitts and Nevis (with a 5.2 percent
increase in GDP) and Cuba (4 percent), according to Dominican
Today.
According to the ECLAC report, the region's slowest economies
during last year were Barbados (0.5 percent), Trinidad and Tobago
(0.2 percent) and Dominica, which experienced a contraction of 2.7
percent, the report adds.
As reported in the Troubled Company Reporter-Latin America on
Dec. 3, 2015, Fitch Ratings affirmed the Dominican Republic's
long-term foreign and local currency Issuer Default Ratings (IDRs)
at 'B+'. The Rating Outlooks on the long-term IDRs are revised to
Positive from Stable. The issue ratings on the Dominican
Republic's senior unsecured foreign and local currency bonds are
affirmed at 'B+'. The Country Ceiling is affirmed at 'BB-' and the
short-term foreign currency IDR at 'B'.
=============
J A M A I C A
=============
UC RUSAL: Chief Pessimistic About Aluminum Price
------------------------------------------------
RJR News reports that UC Rusal, the Russian aluminum company which
operates the Alpart and Windalco refineries in Jamaica, is
forecasting base-metal prices to remain low for a while because of
a glut in supply from China.
Oleg Deripaska, Rusal's President, has declared that aluminum
producers need to focus on high-tech alloys and new types of
material to compete with low-cost metal coming from China,
according to RJR News.
Aluminum prices have been sliding for five years, although the
metal has been more resilient than oil in the recent commodity
slump, the report notes.
Aluminium was trading at US$1,471 per ton on the London Metal
Exchange on Jan. 20, says the report.
Citibank cut its 2016 aluminum forecast to US$1,435 a ton, the
report adds.
* * *
As reported in the Troubled Company Reporter-Latin America on
June 24, 2015, RJR News said Jamaica Mining Minister Phillip
Paulwell, who returned to Jamaica from his trip to Russia, has
declared that all is well with the arrangements that have been
made for full restoration of operations at the Alumina Partners of
Jamaica (Alpart) bauxite/alumina plant at Nain in St. Elizabeth.
After being closed for six years, work resumed at the plant
earlier this year, but only in respect of mining of the ore for
shipment to Russia, in the first instance, according to RJR News.
The phased resumption plan should see the resumption of alumina
refining towards the end of 2016, the report said.
TCRLA, citing RJR News, reported on April 30, 2015, that UC Rusal
has re-ignited its war of words with the London Metal Exchange,
saying it has allowed financial speculators to distort prices.
Vladislav Soloviev, Chief Executive Officer of the heavily
indebted Russian group, said the price of aluminum traded on the
LME has been depressed by as much as 30 per cent by the actions of
money-market players, according to RJR News.
UC Rusal has been involved in a bitter legal wrangle with the LME
over plans to reform the exchange's warehousing system and
introduce rules to tackle long queues that built up in the
aftermath of the global financial crisis, the report said.
======================
P U E R T O R I C O
======================
PUERTO RICO: House Works on Plan That Faces Skepticism in Senate
----------------------------------------------------------------
Kasia Klimasinska at Bloomberg News reports that it took a pair of
defaults, but House Republicans may finally be turning their
attention to the deepening debt crisis in Puerto Rico.
After avoiding Democrats' calls for action last year, lawmakers
are now responding to Speaker Paul Ryan's promise to address it by
the end of this quarter, according to Bloomberg News. Senate
leaders remain noncommittal when it comes to Puerto Rico, but the
House is set to hold a second hearing Feb. 2 aimed at finding a
solution that would help the U.S. territory pay $70 billion in
debt and revive its economy, Bloomberg News notes.
Bloomberg News relays that Puerto Rico's non-voting delegate,
Democrat Pedro Pierluisi, said members are circulating draft bills
containing ideas ranging from an outside board overseeing island's
finances to cutting the island's minimum wage.
The Obama administration has been pushing hard for Congress to
allow Puerto Rican agencies to file for bankruptcy to escape from
some of the territory's debt, but Republicans have been leery,
Bloomberg News discloses.
Oversight Board
Some Republicans in both the House and Senate are now considering
creating a federal authority that would supervise the island's
spending and budget, which is projected to fall $23.9 billion
short for debt payments over the next decade, Bloomberg News says.
Such a board will be the focus of a House Natural Resources
subcommittee hearing on Feb. 2, Bloomberg News notes.
Witnesses for the hearing include Simon Johnson, a Massachusetts
Institute of Technology professor who spoke in favor of "a
powerful monitoring body" to improve Puerto Rico's fiscal
management, Bloomberg News relays. Anthony Williams, former mayor
and chief financial officer of Washington, D.C., is also scheduled
to testify, according to a congressional aide, Bloomberg News
notes.
A senior Obama administration official said the White House has
been encouraged by some of the recent signals, but Senate leaders
have been more noncommittal, Bloomberg News discloses.
Senate Majority Leader Mitch McConnell of Kentucky hasn't
addressed the issue and Majority Whip John Cornyn, a Texas
Republican, told reporters there isn't any "clear path forward" on
how to help Puerto Rico, Bloomberg News notes.
"The sticking point for Puerto Rican legislation is very likely
going to be in the Senate, where pulling together votes for any
package will be a tall task," Bloomberg News quoted Daniel Hanson,
an analyst with Washington-based broker-dealer Height Securities,
as saying. "That said, if the House is able to cobble together a
coalition around a handful of conservative-friendly proposals, it
will pressure Senate leadership to pick up the House's bill,"
Bloomberg News relays.
Rippling Effects
Puerto Rico's Government Development Bank owes investors $422
million in May and the commonwealth and its agencies need to pay
back $2 billion on July 1, on the heels of an anticipated $923
million negative cash balance in June, Bloomberg News notes.
Governor Alejandro Garcia Padilla delayed tax rebates and payments
to suppliers to pay creditors and began closing about 100 schools
to help balance the fiscal 2015 budget, Bloomberg News discloses.
The island defaulted on some payments in January and last year,
Bloomberg News relays.
"In order to assist the 3.5 million Americans who call this island
home, Congress must pass legislation for the president to sign
into law without delay," Treasury Secretary Jacob J. Lew said
during a visit to San Juan, Bloomberg News notes. "Without
congressional action, Puerto Rico will face a long and difficult
recovery that could have harmful consequences," he added.
The Obama administration and Garcia Padilla said federal oversight
can only be paired with granting the island's municipalities
access to an orderly restructuring process that would help Puerto
Rico cut its liabilities and avoid protracted litigation,
Bloomberg News relays. Such a solution is opposed by investors
and bond insurers and portrayed by the conservative Heritage
Foundation as a bailout, Bloomberg News notes.
The bill, S. 2381, proposed last year by Republican Senators Orrin
Hatch of Utah, Chuck Grassley of Iowa and Lisa Murkowski of
Alaska, didn't have any restructuring provisions, notes Bloomberg
News.
Avoiding a Repeat
Bloomberg News discloses that Mr. Grassley, whose committee
oversees changes in bankruptcy law, told reporters he wants to
find a compromise that would ensure such a crisis won't happen
again in five or six years. Such a proposal might include a
financial control board, coupled with "some variation" of
bankruptcy protection, he added.
"The feeling is if we just did a straight Chapter 9, we'd be right
back here in five or six years doing it again," Mr. Grassley said,
referring to the process that provides municipalities protection
from creditors, Bloomberg News relays. "The most important thing
is that the spending habits of the Puerto Rican government have to
change," he added.
Bloomberg News notes that Mr. Hatch's proposal includes an
"assistance authority" that has borrowing authority and subpoena
power.
Bloomberg News says that Mr. Pierluisi described such a proposal
as a "mega-board on steroids" and said Democrats would only
support this kind of oversight if it's paired with a restructuring
mechanism or more federal assistance.
Republicans, who have enough votes in the House to pass bills,
need some Democratic support to pass most legislation in the
Senate, Bloomberg News adds.
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.
===============
X X X X X X X X
===============
LATAM: IDB Closes 2015 With $11.3 Billion in Financing Approvals
----------------------------------------------------------------
The Inter-American Development Bank approved loans and guarantees
totaling $11.3 billion and disbursed $10.4 billion to borrowing
countries in Latin America and the Caribbean during 2015.
Hewing to its mandate to support the region's smaller and
vulnerable economies, the IDB devoted 50 percent of the resources
approved last year to borrowers of those characteristics, a 14
percentage point increase over the previous year.
Last year's lending was concentrated in priority areas established
in the IDB's 2010 capital increase agreement: 39 percent went to
projects involving infrastructure and the environment, 32 percent
to institutional development, 21 percent to social sector programs
and 8 percent to trade and integration projects.
During 2015 the IDB completed the process of consolidating its
private sector activities into the Inter-American Investment
Corporation. The expanded IIC, which began operations earlier
this month, aims to approve up to $2.9 billion in its first year
of merged activities.
In addition, the IDB began to implement an exposure exchange
agreement with other multilateral finance institutions, which
enables regional development lenders to lower their geographic
concentration by diversifying their risk.
The IDB also took a series of administrative austerity measures,
reflecting similar steps taken by many of its member countries to
adjust to changing global economic conditions. These internal
cost-saving efforts will continue in 2016.
***********
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 2016. 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 * * *