/raid1/www/Hosts/bankrupt/TCRLA_Public/160223.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, February 23, 2016, Vol. 17, No. 37
Headlines
A R G E N T I N A
ARGENTINA: In Conditional Victory Against 'Holdout' Hedge Funds
ARGENTINA: Says Injunctions Being Used As 'Club' In Deal Talks
B R A Z I L
BANCO DE DESENVOLVIMENTO: S&P Lowers Global Scale Rating to 'BB-'
BRAZIL LOAN 1: S&P Cuts Sr. Sec. Pass-Through Notes Rating to 'BB'
CELESC DISTRIBUICAO: Moody's Lowers Issuer Rating to 'Ba2
CEMIG DISTRIBUICAO: S&P Cuts GS Issuer Credit Rating to 'BB-'
SETE BRASIL: Plans Bankruptcy if No Petrobras Lease Proposal
SUL AMERICA SA: S&P Cuts Global Scale Issuer Credit Rating to B+
C A Y M A N I S L A N D S
BAOLUN CAPITAL: Shareholders Receive Wind-Up Report
BILLUND LEASING III: Shareholders Receive Wind-Up Report
C8 SYSTEMATIC: Shareholders Receive Wind-Up Report
C8 SYSTEMATIC MASTER: Shareholders Receive Wind-Up Report
CENTURION CDO II: Shareholders Receive Wind-Up Report
CHEYNE MANAGED: Shareholders Receive Wind-Up Report
COMMODORE CDO I: Shareholders Receive Wind-Up Report
COMMODORE CDO II: Shareholders Receive Wind-Up Report
DELACROIX MANAGED: Shareholders Receive Wind-Up Report
OPHIR PARTNERS: Shareholders Receive Wind-Up Report
PIQUANT ENA: Shareholders Receive Wind-Up Report
RAMIUS CONVERTIBLE: Shareholders Receive Wind-Up Report
RAMIUS MULTI-STRATEGY: Shareholders Receive Wind-Up Report
RAMIUS PB: Shareholders Receive Wind-Up Report
RAMIUS PORTSIDE: Shareholders Receive Wind-Up Report
RAMIUS VINTAGE: Shareholders Receive Wind-Up Report
SAMENA ASIA: Members Receive Wind-Up Report
SAMENA ASIA MASTER: Members Receive Wind-Up Report
VIOLET 2005-1: Shareholders Receive Wind-Up Report
ZEPHYR RECOVERY: Members Receive Wind-Up Report
C O L O M B I A
PACIFIC EXPLORATION: Fitch Says 'C' IDR Could Move to 'RD'
D O M I N I C A N R E P U B L I C
DOMINICAN REP: Pact Aims to Boost Agro-Industrial, Farm Exports
G U A T E M A L A
BANCO INDUSTRIAL: S&P Affirms 'BB' ICR; Outlook Stable
P U E R T O R I C O
ANNA'S LINENS: Brutzkus Gubner Files Rule 2019 Statement
DORAL FINANCIAL: Meeting of Creditors Set for March 3
S T. L U C I A
ST. LUCIA: IMF Says Unaddressed Vulnerabilities Hold Back Recovery
- - - - -
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A R G E N T I N A
=================
ARGENTINA: In Conditional Victory Against 'Holdout' Hedge Funds
---------------------------------------------------------------
Benedict Mander at The Financial Times reports that after winning
a victory in its decade-long battle with a group of US hedge funds
in a New York court, attention now switches to Argentina's
congress.
Judge Thomas Griesa said that he would lift a controversial
financial blockade preventing Argentina's access to the
international capital markets, according to The Financial Times.
The ruling was made on the condition that Argentina repeals laws
stopping it from paying "holdout" creditors that refused debt
restructurings after its 2001 default on $100 billion, and then
pays in full those holdouts that reach an agreement with Buenos
Aires before the end of February, the report notes.
The injunction was put in place after the holdouts, led by US
billionaire Paul Singer's Elliott Management, won a legal victory
in 2012 in which Judge Griesa ordered Argentina to pay them in
full at the same time as holders of restructured debt, the report
relates. The refusal to pay the holdouts by former president
Cristina Fernandez precipitated the eighth default in Argentina's
history in 2014, the report discloses.
But the victory of the market-friendly Mauricio Macri in
November's presidential elections led to a radical change in
Argentina's approach, with an offer to pay the holdouts $6.5
billion earlier this month for claims of $9 billion, the report
notes.
"Put simply, President Macri's election changed everything," wrote
Judge Griesa in the ruling, explaining why he was willing to lift
the injunctions, the report says. "The injunctions must not be
turned through changing circumstances into an instrument of
wrong," he added.
Although Judge Griesa currently lacks jurisdiction to lift the
injunction immediately due to a pending appeal, the indicative
ruling made clear how he will proceed when he does have
jurisdiction, the report notes.
Observers were surprised by the speed of the 85-year-old judge's
35-page ruling, which came just a day after the holdouts filed
lengthy arguments to the court justifying why the injunctions
should remain in place, at Argentina's request, the report
discloses. There was no oral hearing despite requests for one by
the holdouts, noted the report.
The center-right Mr. Macri, who is on a mission to attract much-
needed foreign investment, must now convince Argentina's congress
to revoke the laws currently preventing payouts to holdouts as
requested, the FT says.
Congress is likely to support Mr. Macri, according to Juan
Germano, a political analyst, even if there may be a noisy
negotiation process, the report relates. "We are on course to
untangle this conflict," Mr. Macri said.
"For Argentina, this is very important. It clears the way for the
solution of the problems we are trying to solve," the report
quoted Daniel Marx, a former finance secretary, as saying. It
will allow Argentina to return to the international stage after a
long period of isolation, Mr. Marx said, while enabling the
country to borrow at lower interest rates and finance the economic
transition that is under way after a decade of populist and
interventionist policies, notes the report.
Nicolas Dujovne, an economist, explained that Argentina's ability
to borrow abroad again would help in its battle to reduce
inflation of about 30 per cent, which many analysts see as the
biggest challenge facing Mr. Macri as sensitive wage negotiations
with trade unions begin, the report relays.
While the previous government resorted to printing money to
finance a bulging fiscal deficit, which only fueled inflation, a
resolution to the holdouts saga would enable the government to
issue foreign debt instead, the FT discloses.
Although a removal of the injunction would put an end to
Argentina's 2014 default and allow it to resume paying the owners
of restructured debt, it would not guarantee an end to the dispute
with the holdouts, as they could appeal against the judge's
decision, the report relays. "This may turn into a pyrrhic
victory if indeed litigation now swamps further negotiations,"
said Charles Blitzer, a former IMF official, notes the report.
But Mr. Dujovne is optimistic, arguing that there is willingness
on both sides to reach a deal, and that their positions are not
far apart, the report relays. Mr. Dujovne said that Argentina was
offering a similar deal to the one that the holdouts allegedly
accepted before the default in 2014, which the government then
withdrew, the report notes.
"It seems difficult for there not to be a deal," said Mr. Dujovne,
venturing that an agreement could even be announced by the end of
the month, the report says.
If Argentina succeeds in overturning the legislation as requested
by the judge and proceeds to pay the holdouts who accept a deal, a
lifting of the injunction would weaken the holdouts' leverage in
the negotiations, the report notes.
But they could appeal against the move, potentially triggering a
renewed legal battle that could make what has been dubbed the
"trial of the century" for sovereign debt drag on for even longer
if a swift deal is not reached, the report adds.
* * *
The Troubled Company Reporter-Latin America reported in Nov. 27,
2015, that Moody's Investors Service has changed the outlook on
Argentina's Caa1 issuer rating to positive from stable. The
outlook on Argentina's (P)Caa2 foreign legislation and
restructured local legislation foreign currency obligations is
also changed to positive from stable. The outlook change is based
on Moody's view that the accession of president-elect Mauricio
Macri of the Cambiemos ("Let's Change") coalition will raise the
probability of credit positive policies being implemented,
including arriving at a resolution with holdout creditors, one of
Argentina's key credit constraints.
On Aug. 1, 2014, the TCR-LA reported that Argentina defaulted on
some of its debt late July 30 after expiration of a 30-day grace
period on a US$539 million interest payment. Earlier that day,
talks with a court-appointed mediator ended without resolving a
standoff between the country and a group of hedge funds seeking
full payment on bonds that the country had defaulted on in 2001.
A U.S. judge had ruled that the interest payment couldn't be made
unless the hedge funds led by Elliott Management Corp., got the
US$1.5 billion they claimed. The country hasn't been able to
access international credit markets since its US$95 billion
default 13 years ago.
As a result, reported the TCR-LA on Aug. 1, Standard & Poor's
Ratings Services lowered its unsolicited long-and short-term
foreign currency sovereign credit ratings on the Republic of
Argentina to selective default ('SD') from 'CCC-/C'.
The TCR-LA, on Aug. 4, 2014, also reported that Fitch Ratings
downgraded Argentina's Foreign Currency Issuer Default Rating
(IDR) to 'RD' from 'CC', and its Short-Term Foreign Currency
Issuer Default Rating to 'RD' from 'C'.
Meanwhile, Moody's Investors Service affirmed Argentina's Caa1
issuer rating, which also applies to domestic law bonds, confirmed
the (P)Caa2 rating for its foreign law bonds, and affirmed the Ca
rating on the original defaulted bonds. The long-term issuer
rating was placed on negative outlook, reported the TCR-LA on Aug.
5, 2014.
On Aug. 8, 2014, the TCR-LA reported that Moody's Latin America
Agente de Calificacion de Riesgo affirmed the deposit, debt,
issuer and corporate family ratings on Argentina's banks and
financial institutions, both on the global and national scales.
The outlook on these ratings has been changed to negative from
stable. At the same time, the rating agency has affirmed the
banks' Caa2 foreign-currency deposit ratings and Not-
Prime short-term ratings. The banks' standalone E financial
strength ratings corresponding to caa1 baseline credit assessments
(BCA) have also been affirmed.
The TCR-LA, On Aug. 6, 2014, also reported that DBRS Inc. has
downgraded Argentina's long-term foreign currency issuer rating
from CC to Selective Default (SD). The short-term foreign
currency rating has been downgraded to Default (D), from R-5. The
long-term and short-term local currency issuer ratings have been
confirmed at B (low) and R-5, respectively. The trend on the
long-term local currency rating is Negative, and the trend on the
short-term local currency rating is Stable.
On Nov. 3, 2014, the TCR-LA reported that Fitch Ratings downgraded
Argentina's rating on Par Bonds issued under Foreign Law to 'D'
from 'C' as Argentina has not been able to cure the missed coupon
payments on its par bonds issued under foreign law after the
expiration of the 30-day grace period on Oct. 30. According to
Fitch's criteria, this constitutes an event of default and Fitch
has downgraded the affected securities to 'D'. In addition, Fitch
has affirmed:
-- Foreign Currency Issuer Default Rating (IDR) at 'RD';
-- Local Currency IDR at 'CCC';
-- Short-term Foreign Currency IDR at 'RD';
-- Country Ceiling at 'CCC'.
-- Performing Foreign Law Exchanged Securities (Global 17) at
'C';
-- Local Currency exchanged bonds under Argentine Law at 'CCC';
-- Foreign and Local Currency non-exchanged securities under
Argentine Law at 'CCC';
-- Discount Bonds issued under Foreign Law at 'D'.
On April 22, 2015, Moody's Investors Service expanded the portion
of Argentina's debt that is rated (P)Caa2. The (P)Caa2 rating
reflects the higher risk of default for both Argentina's
restructured foreign legislation debt (as before) and,
additionally now, its restructured local legislation foreign
currency obligations, as compared with the risk of default on
other debt instruments issued by Argentina. Argentina's local
currency debt and its non-restructured foreign currency debt are
rated Caa1. The debt that remains in default since Argentina's
2001 default is rated Ca.
ARGENTINA: Says Injunctions Being Used As 'Club' In Deal Talks
--------------------------------------------------------------
Jonathan Randles at Law360.com reports that Argentina shot back
against NML Capital and Aurelius Capital Partners' opposition to
the country's multibillion-dollar proposal to end debt default
litigation with holdout creditors, saying in a New York court
filing that the private equity firms are using prior injunctions
that the republic wants lifted as a "club" in settlement talks.
The parties are battling over whether injunctions dictating how
Argentina is able to restructure its debts should be vacated in
light of a $6.5 billion settlement offer that some holdouts have
already accepted, according to Law360.com.
* * *
The Troubled Company Reporter-Latin America reported in Nov. 27,
2015, that Moody's Investors Service has changed the outlook on
Argentina's Caa1 issuer rating to positive from stable. The
outlook on Argentina's (P)Caa2 foreign legislation and
restructured local legislation foreign currency obligations is
also changed to positive from stable. The outlook change is based
on Moody's view that the accession of president-elect Mauricio
Macri of the Cambiemos ("Let's Change") coalition will raise the
probability of credit positive policies being implemented,
including arriving at a resolution with holdout creditors, one of
Argentina's key credit constraints.
On Aug. 1, 2014, the TCR-LA reported that Argentina defaulted on
some of its debt late July 30 after expiration of a 30-day grace
period on a US$539 million interest payment. Earlier that day,
talks with a court- appointed mediator ended without resolving a
standoff between the country and a group of hedge funds seeking
full payment on bonds that the country had defaulted on in 2001.
A U.S. judge had ruled that the interest payment couldn't be made
unless the hedge funds led by Elliott Management Corp., got the
US$1.5 billion they claimed. The country hasn't been able to
access international credit markets since its US$95 billion
default 13 years ago.
As a result, reported the TCR-LA on Aug. 1, Standard & Poor's
Ratings Services lowered its unsolicited long-and short-term
foreign currency sovereign credit ratings on the Republic of
Argentina to selective default ('SD') from 'CCC-/C'.
The TCR-LA, on Aug. 4, 2014, also reported that Fitch Ratings
downgraded Argentina's Foreign Currency Issuer Default Rating
(IDR) to 'RD' from 'CC', and its Short-Term Foreign Currency
Issuer Default Rating to 'RD' from 'C'.
Meanwhile, Moody's Investors Service affirmed Argentina's Caa1
issuer rating, which also applies to domestic law bonds, confirmed
the (P)Caa2 rating for its foreign law bonds, and affirmed the Ca
rating on the original defaulted bonds. The long-term issuer
rating was placed on negative outlook, reported the TCR-LA on Aug.
5, 2014.
On Aug. 8, 2014, the TCR-LA reported that Moody's Latin America
Agente de Calificacion de Riesgo affirmed the deposit, debt,
issuer and corporate family ratings on Argentina's banks and
financial institutions, both on the global and national scales.
The outlook on these ratings has been changed to negative from
stable. At the same time, the rating agency has affirmed the
banks' Caa2 foreign-currency deposit ratings and Not-
Prime short-term ratings. The banks' standalone E financial
strength ratings corresponding to caa1 baseline credit assessments
(BCA) have also been affirmed.
The TCR-LA, On Aug. 6, 2014, also reported that DBRS Inc. has
downgraded Argentina's long-term foreign currency issuer rating
from CC to Selective Default (SD). The short-term foreign
currency rating has been downgraded to Default (D), from R-5. The
long-term and short-term local currency issuer ratings have been
confirmed at B (low) and R-5, respectively. The trend on the
long-term local currency rating is Negative, and the trend on the
short-term local currency rating is Stable.
On Nov. 3, 2014, the TCR-LA reported that Fitch Ratings downgraded
Argentina's rating on Par Bonds issued under Foreign Law to 'D'
from 'C' as Argentina has not been able to cure the missed coupon
payments on its par bonds issued under foreign law after the
expiration of the 30-day grace period on Oct. 30. According to
Fitch's criteria, this constitutes an event of default and Fitch
has downgraded the affected securities to 'D'. In addition, Fitch
has affirmed:
-- Foreign Currency Issuer Default Rating (IDR) at 'RD';
-- Local Currency IDR at 'CCC';
-- Short-term Foreign Currency IDR at 'RD';
-- Country Ceiling at 'CCC'.
-- Performing Foreign Law Exchanged Securities (Global 17) at
'C';
-- Local Currency exchanged bonds under Argentine Law at 'CCC';
-- Foreign and Local Currency non-exchanged securities under
Argentine Law at 'CCC';
-- Discount Bonds issued under Foreign Law at 'D'.
On April 22, 2015, Moody's Investors Service expanded the portion
of Argentina's debt that is rated (P)Caa2. The (P)Caa2 rating
reflects the higher risk of default for both Argentina's
restructured foreign legislation debt (as before) and,
additionally now, its restructured local legislation foreign
currency obligations, as compared with the risk of default on
other debt instruments issued by Argentina. Argentina's local
currency debt and its non-restructured foreign currency debt are
rated Caa1. The debt that remains in default since Argentina's
2001 default is rated Ca.
===========
B R A Z I L
===========
BANCO DE DESENVOLVIMENTO: S&P Lowers Global Scale Rating to 'BB-'
-----------------------------------------------------------------
Standard and Poor's Ratings Services said it lowered its global
scale rating on Banco de Desenvolvimento de Minas Gerais (BDMG) to
'BB-' from 'BB'. Additionally, S&P lowered its national scale
rating to 'brA' from 'brA+' following a similar action on its
parent. The outlook is negative.
The rating action on BDMG follows a similar action on the state of
Minas Gerais, which owns the entity. S&P lowered its ratings on
the Brazilian state of Minas Gerais due to the state's weaker
budgetary performance, as seen in wide fiscal deficits during 2015
that are likely to continue in 2016. Further, the state has had a
consistently weak liquidity position in relation to its financial
obligations. Finally, its debt is higher than those of domestic
peers such as Sao Paulo and Santa Catarina.
S&P is lowering the long term ratings on BDMG with a negative
outlook due to the deterioration of its controlling shareholder's
finances, and S&P's view that its weakened financial condition
could limit the ratings on the bank due to its very strong link
with its shareholder. Additionally, S&P sees the potential that
the state could negatively intervene in the bank if Minas Gerais'
budgetary performance continues to deteriorate, limiting its
ability to support the bank with capital injections.
The negative outlook on BDMG for the next 12 months reflects the
potential downgrade of the State of Minas Gerais, its main
controller. Therefore, S&P could downgrade the entity following
similar action on its parent.
The negative outlook on the state of Minas Gerais reflects S&P's
expectation that the state will be unable to narrow its fiscal
deficits, which will remain wider than those of its peers in the
next two years, in part due to a likely deeper and longer economic
contraction. In addition, S&P expects the state's finances to
stagnate in 2016. A subsequent downgrade is possible if its
deficits after borrowing are consistently wider than S&P's
expectations.
S&P could revise the outlook on the bank to stable following
similar action on the state.
BRAZIL LOAN 1: S&P Cuts Sr. Sec. Pass-Through Notes Rating to 'BB'
------------------------------------------------------------------
Standard & Poor's Ratings Services lowered its ratings on three
synthetic asset-backed securities (ABS) transactions, two of which
have unconditional guarantees from the Federative Republic of
Brazil and one of which has one from Votorantim S.A.
The rating actions follow the Feb. 17, 2016, lowering of S&P's
long-term foreign currency sovereign credit rating on Brazil to
'BB' from 'BB+' and S&P's long-term local currency sovereign
credit rating to 'BB' from 'BBB-'. As a result, various rating
actions were taken on Brazilian corporate and infrastructure
entities on Feb. 17, 2016.
The downgrade on the Federative Republic of Brazil reflects S&P's
view that the sovereign's credit profile has weakened further
since Sept. 9, 2015, when S&P last lowered the ratings. The
political and economic challenges Brazil faces remain
considerable. S&P now expects a more prolonged adjustment process
with a slower correction in fiscal policy, as well as another year
of steep economic contraction.
Regarding the subsequent downgrade of Votorantim S.A., S&P still
views this company as partly insulated from Brazil's economy due
to its ownership of foreign assets, robust cash position, and
stand-by credit facilities. However, the higher rating potential
is limited to one notch because its cement operations and banking
operations are exposed to Brazil. The latter could create a
contingent of high severity under a sovereign distress.
BRAZIL LOAN TRUST 1 AND BRAZIL MINAS SPE
S&P lowered its ratings on Brazil Loan Trust 1's US$661,967,121
senior secured pass-through fixed-rate notes due 2023 and on
Brazil Minas SPE's US$1.27 billion 5.333% fixed-rate notes due
2028 to 'BB' from 'BB+'. The note issuances are both repackaged
pass-through securities. For Brazil Loan Trust 1, all cash flows
are derived from assigned interest in a loan that Bank of America
N.A. (BofA) extended to the Brazilian State of Maranhao. For
Brazil Minas SPE, all cash flows are derived from assigned
interest in a loan that Credit Suisse A.G., Nassau Branch (CS)
extended to the Brazilian state of Minas Gerais (foreign currency
rating: 'BB-/Negative/--'). Both transactions also include an
unconditional guarantee from the Federative Republic of Brazil.
VOTO-VOTORANTIM OVERSEAS TRADING OPERATIONS IV LTD.
S&P lowered its rating on Voto-Votorantim Overseas Trading
Operations IV Ltd.'s (VOTO's) US$400 million 7.75% notes to 'BB+
(sf)' from 'BBB-(sf)', based on the relevant counterparty's rating
as guarantor.
In June 2005, VOTO issued US$400 million of notes on behalf of
Votorantim Group, a Brazilian industrial conglomerate. Votorantim
Participacoes S.A. (VPAR), Votorantim Celulose e Papel S.A. (VCP),
and Cimento Rio Branco S.A. (CRB) jointly, severally,
unconditionally, and irrevocably guarantee the timely payment of
all amounts due on the notes. However, VCP's and CRB's liability
is limited to 50% of the notes' outstanding amount while VPAR
fully guarantees 100% of the notes' outstanding amount.
On Jan. 13, 2016, S&P withdrew its 'BBB-' global scale and 'brAAA'
national scale corporate credit ratings on VPAR following the
merger of VPAR and Votorantim Industrial S.A. (VID). VID is
currently the ultimate holding company of the Votorantim group and
changed its name to Votorantim S.A. As a result, S&P's 'BB+'
rating on the notes now reflects the rating on Votorantim S.A.
S&P will continue to monitor the ratings on these structured
finance transactions and revise the ratings as necessary to
reflect any changes in the transactions' underlying credit
quality.
RATINGS LOWERED
Brazil Loan Trust 1
Series Rating
To From
Senior Secured Pass Through BB BB+
Brazil Minas SPE
Series Rating
To From
5.33% notes due 2028 BB BB+
Voto-Votorantim Overseas Trading Operations IV Ltd.
Series Rating
To From
Notes BB+ (sf) BBB- (sf)
CELESC DISTRIBUICAO: Moody's Lowers Issuer Rating to 'Ba2
---------------------------------------------------------
Moody's America Latina Ltda downgraded the issuer ratings of
Celesc Distribuicao S.A. (CELESC D) to Ba2/A1.br from Ba1/Aa2.br.
At the same time, Moody's downgraded the ratings of the senior
unsecured 6-year amortizing BRL300 million debentures issued by
CELESC D with final maturity on May 15, 2019 to Ba2/A1.br from
Ba1/Aa2.br. Moody's also downgraded the issuer rating of Centrais
Eletricas de Santa Catarina S.A (CELESC) to Ba3/A3.br from
Ba2/Aa3.br to reflect the issuer rating downgrade of its main
subsidiary CELESC D. The outlook was changed to negative from
stable for all ratings.
Downgrades:
Issuer: Celesc Distribuicao S.A
Issuer Rating, Downgraded to Ba2 from Ba1
Issuer Rating, Downgraded to A1.br from Aa2.br
Senior Unsecured Regular Bond/Debenture, Downgraded to Ba2 from
Ba1
Senior Unsecured Regular Bond/Debenture, Downgraded to A1.br
from Aa2.br
Issuer: Centrais Eletricas de Santa Catarina S.A.
Issuer Rating, Downgraded to Ba3 from Ba2
Issuer Rating, Downgraded to A3.br from Aa3.br
Outlook Actions:
Issuer: Celesc Distribuicao S.A
Outlook, Changed To Negative From Stable
Issuer: Centrais Eletricas de Santa Catarina S.A.
Outlook, Changed To Negative From Stable
RATINGS RATIONALE
The downgrade of CELESC D's ratings reflects the company's much
weaker than expected performance, mainly in the past two quarters
of 2015, along with Moody's expectation that CELESC D is not
likely to materially improve its operating and financial
performance over the medium term. Moody's assessment that the
company's performance will not dramatically change during this
period stems from an expected further decline in sales volume in
2016, the company's high cost structure and expected lower
electricity tariffs from the fourth periodic tariff review in July
2016.
CELESC's Ba3/A3.br issuer ratings are one notch lower than the
Ba2/A1.br issuer ratings of its subsidiary Celesc D to reflect the
potential structural subordination of its debt to the existing
debt at the level of its operating subsidiary. Lenders to
operating subsidiaries generally have superior claims on the cash
flow generated at the operating level than do debt holders at the
holding company level.
The company's poor financial performance is evidenced by the
CFO -- Pre-WC over debt ratio of just 2.9% in the last 12 months
ended on Sept. 30, 2015, down from the 22.3% recorded in 2014.
Moody's attributes the significant deterioration in this cash flow
metric to the combination of lower sales volume along with the
lower collection of certain federal taxes during the first nine
months of 2015. In addition, the company is reviewing its
reporting on the costs associated with regulatory charge CDE which
could result in an additional cash flow.
Despite its poor cash flow in 2015, CELESC D was able to maintain
a relatively healthy net debt level of BRL1,179 million as of
Sept. 30, 2015, down from BRL1,329 million as of Dec. 31, 2014.
The company's total debt includes BRL758 million in pension fund
liabilities, in accordance with Moody's standard adjustments.
Moody's estimates that the company's net debt level as of
Sept. 30, 2015 is underestimated by around BRL450 million. This
is the amount the company is likely to pay to Centrais Eletricas
Brasileiras SA. (ELETROBRAS, Ba2 RUR) during 2016 related to the
non-collection of the regulatory charge CDE.
Moody's understands that CELESC D is negotiating with the local
banking and capital markets over the borrowing of long term debt
worth between BRL300 million and BRL600 million to lengthen is
debt profile, pay off the existing CDE related liability and meet
its relatively sizeable annual capital expenditures program of
around BRL 320million over the next couple of years.
The expectation of a significant reduction in regulatory assets as
a result of lower energy acquisition costs from the expected lower
dispatch of thermal power, along with management's stated
intention to implement an employee severance program in 2016,
could help to improve the company's cash flow. Moody views this
cash flow strategy as feasible but challenging should the company
not improve its internal cash generation as measured by funds from
operations (FFO).
Moody's will continue to keep monitoring the company's performance
over the short term to evaluate its ability to improve its
internal cash generation as well as its ability to secure timely
and adequate long-term debt.
WHAT COULD CHANGE THE RATINGS UP/DOWN
Moody's would consider a further downgrade action if CELESC D is
not able to rapidly turnaround its financial performance so that
the CFO Pre- WC over debt ratio becomes higher than 12% on a
sustainable basis or if the company fails in securing adequate and
timely long-term debt as planned.
Moody's would stabilize the outlook if the company successfully
improve its liquidity position by securing long term debt and
improve its cash flow so that CFO Pre WC over debt becomes higher
than 20% on a sustainable basis.
Celesc Distribuicao S.A. (CELESC D) is a full subsidiary of
Centrais Eletricas de Santa Catarina (CELESC), which is a holding
company with interests in some hydro power plants. CELESC is
controlled by the state government of Santa Catarina (unrated),
which holds 50.2% of CELESC's voting capital and 20.2% of its
total capital. In 1999, the regulator ANEEL granted CELESC D a
concession to distribute electricity to 264 municipalities in the
state of Santa Catarina, which represent around 92% of the state's
area. This concession expired on July 7, 2015, but it was renewed
for another 30 years in December 2015.
CELESC D in its present form was created in 2006 as a result of
the split of the generation and distribution businesses from
CELESC to comply with the local regulation that required the
separation of different operating activities. CELESC D is the
sixth largest distribution company in Brazil in terms of energy
distributed and the 10th largest in terms of number of consumers.
The company is CELESC's main subsidiary, accounting for
approximately 98% of the group's net revenues.
In 2014, CELESC D posted net sales of BRL5,750 million, not
including BRL347 million of construction revenues, EBITDA of
BRL904 million and net profit of BRL384 million, considering
Moody's standard adjustments. In the last twelve months ended on
Sept. 30, 2015, CELESC D posted net sales of BRL6,718 million,
which does not include construction revenues of BRL378 million,
EBITDA of BRL 976.8 million and a net profit of BRL 421.7 million.
The principal methodology used in these ratings was Regulated
Electric and Gas Utilities published in December 2013.
CEMIG DISTRIBUICAO: S&P Cuts GS Issuer Credit Rating to 'BB-'
-------------------------------------------------------------
Standard & Poor's Ratings Services took several rating actions on
utilities, which are government-related entities (GREs) linked to
three Brazilian state governments.
S&P downgraded these entities:
-- Companhia Energetica de Minas Gerais S.A. (Cemig) and on its
operating subsidiaries, Cemig Distribuicao S.A. (Cemig D)
and Cemig Geracao e Transmissao S.A. (Cemig GT), to 'BB-'
from 'BB' on the global scale and to 'brA' from 'brAA-' on
the national scale.
-- CESP-Companhia Energetica de Sao Paulo to 'BB' from 'BB+' on
the global scale and to 'brAA-' from 'brAA+' on the national
scale.
S&P affirmed its 'BB' global scale rating on Companhia de
Saneamento Basico do Estado de Sao Paulo (Sabesp). S&P also
revised the outlook on this rating to negative from stable. At
the same time, S&P lowered its national scale rating on the
company to 'brA+' from 'brAA-'. S&P also lowered its national
scale rating on Companhia Pernambucana de Saneamento - Compesa to
'brA' from 'brA+'.
The outlook on all these GREs is negative, mirroring the outlook
on the states these utilities are linked to.
The ratings on the Brazilian states pose a limitation on these
entities they control. S&P attributes varying degrees of
likelihood of support from the states to these utilities.
However, S&P also believes states might intervene by redirecting
resources to the government and therefore weaken the GREs' credit
quality, especially amid challenging fiscal conditions.
Therefore, following the downgrade of the state of Sao Paulo, S&P
lowered the global scale ratings on CESP to 'BB' from 'BB+' and
the national scale ratings to 'brAA-' from 'brAA+'. S&P also
affirmed its 'BB' global scale rating of Sabesp, but downgraded it
on the national scale to 'brA+'. This rating action reflects
S&P's view that Sabesp's stand-alone credit profile (SACP) is
weaker than those of other utilities that S&P also downgraded to
'BB' on the global scale and to 'brAA-' on the national scale
following the downgrade on the sovereign.
The downgrade of the state of Minas Gerais to 'BB-' on the global
scale and to 'brA' on the national scale now limits the ratings on
CEMIG and its core operating entities, Cemig D and Cemig GT, which
S&P previously rated at 'BB' and 'brAA-'. The outlooks on these
three utilities are now negative to reflect the one on the state.
The downgrade of Compesa reflects S&P's view of a potential
intervention from its controlling shareholder, the state of
Pernambuco (not rated), in a downside-case scenario amid current
economic woes. The negative outlook on Compesa reflects the
state's currently weak economy, which could deteriorate further.
RATINGS LIST
Ratings Lowered
To From
CESP-Companhia Energetica de Sao Paulo
Issuer Credit Rating
Global Scale BB/Negative/-- BB+/Negative/--
Brazilian National Scale
brAA-/Negative/-- brAA+/Negative/--
Companhia Energetica de Minas Gerais S.A.Issuer Credit Rating
Global Scale BB-/Negative/-- BB/Stable/--
Brazilian National Scale
brA/Negative/-- brAA-/Stable/--
Cemig Distribuicao S.A.
Issuer Credit Rating
Global Scale BB-/Negative/-- BB/Stable/--
Brazilian National Scale
brA/Negative/-- brAA-/Stable/--
Cemig Geracao e Transmissao S.A.
Issuer Credit Rating
Global Scale BB-/Negative/-- BB/Stable/--
Brazilian National Scale
brA/Negative/-- brAA-/Stable/--
Companhia de Saneamento Basico do Estado de Sao Paulo
Issuer Credit Rating
Global Scale BB/Negative/-- BB/Stable/--
Brazilian National Scale
brA+/Negative/-- brAA-/Stable/--
Companhia Pernambucana de Saneamento - Compesa
Issuer Credit Rating
Brazilian National Scale
brA/Negative/-- brA+/Stable/--
SETE BRASIL: Plans Bankruptcy if No Petrobras Lease Proposal
------------------------------------------------------------
Guillermo Parra-Bernal at Reuters reports that Sete Brasil
Participacoes SA plans to file for bankruptcy protection if state-
controlled oil producer Petroleo Brasileiro SA, the rig builder's
sole client, fails to present a final lease contract proposal in a
week's time, three sources with direct knowledge of the matter
said.
Both Sete Brasil and Petrobras declined to comment, notes the
report.
Petrobras, as the oil company is known, asked for seven days to
deliver the proposal, shareholders of Rio de Janeiro-based Sete
Brasil were told at a meeting earlier, said the sources, who
requested anonymity to speak freely about the matter, according to
Reuters.
Luiz Carneiro, Sete Brasil's chief executive officer, delivered
the message on behalf of Petrobras, the sources said. The fate of
Sete Brasil, which was created in 2008 by Petrobras, pension
funds, banks and other partners to build the world's biggest deep-
water drilling fleet order, hinges on Petrobras' willingness to
sign a long-term rent contract for the rigs, Reuters notes.
Shareholders, who have their combined 95 percent stake in an
investment vehicle known as FIP Sondas, will request a judge to
accept their bankruptcy protection request should Petrobras fail
to deliver the proposal, as promised, one of the sources said, the
report relays. The shareholders include pension funds Previ,
Funcef and Petros, banks Grupo BTG Pactual SA and Banco Bradesco
SA, and investment firms, the report relates.
"If no proposal is extended within the agreed deadline, Sete
Brasil will ask for creditor protection," the same source said,
the report discloses.
A bankruptcy filing by Sete Brasil would be devastating not only
for the banks, funds and investors that backed the project, but
also for dozens of shipbuilders and manufacturers supplying the
company, Reuters relays. More than 800,000 local shipbuilding
jobs could be lost, sparking about BRL40 billion ($10 billion) in
losses for the economy, the same source added, the report notes.
Sete Brasil owes about BRL18 billion to banks, a national workers'
severance fund and suppliers, according to company data.
Other Sete Brasil shareholders include Caixa's workers pension
fund Funcef, EIG Global Energy Partners and Fundacao Valia, the
workers' pension fund of mining company Vale SA, the report notes.
None of them had an immediate comment.
At Loggerheads
Reuters recalls that the $80 billion, government-backed project
began to sour in 2014 when Petrobras and Sete Brasil became
engulfed in a massive corruption scandal in Brazil. Fallout from
the so-called Operation Car Wash scandal deprived Sete Brasil from
obtaining long-term financing, forcing Brazil's top lenders to
roll over about BRL14 billion ($3.48 billion) in loans for the
past 1-1/2 years, the report notes.
Petrobras Chief Executive Officer Aldemir Bendine and officials at
the company's exploration and production division are at
loggerheads over the Sete Brasil contract, Reuters has reported,
citing sources. The tussle has forced BTG Pactual and creditors,
which include Itau Unibanco Holding SA and Bradesco, to write off
part of the value of their investments and loans to Sete Brasil.
This month, Itau, Bradesco, Banco Santander Brasil SA and state
lenders Caixa Economica Federal and Banco do Brasil SA agreed to
renew almost BRL15 billion's worth of standstill loans until May
in exchange for access to BRL4.3 billion in collateral at
government-backed naval fund CDFMM, two of the sources said, the
report relays.
According to the sources, about BRL2.8 billion were already
withdrawn from the fund, with the remaining likely to be available
within days, Reuters says.
Petrobras, which owns 5 percent of Sete Brasil, also requested
Sete Brasil to replace restructuring adviser Alvarez & Marsal
Holdings LLC with Rothschild & Co, two of the sources said, adds
the report.
SUL AMERICA SA: S&P Cuts Global Scale Issuer Credit Rating to B+
----------------------------------------------------------------
Standard & Poor's Ratings Services took several rating actions on
nine Brazilian insurers and reinsurers. These actions follow the
downgrade of the Federative Republic of Brazil to 'BB' from 'BB+'
(long-term foreign currency) and to 'BB' from 'BBB-' (long-term
local currency).
S&P lowered its global and national scale ratings and maintained
negative outlook on these entities:
-- Allianz Global Corporate & Specialty Resseguros Brasil S.A.;
-- Sul America Cia Nacional de Seguros; and
-- Sul America S.A.
S&P also lowered the national scale rating and maintained the
negative outlook on Bradesco Seguros S.A.
Finally, S&P placed the ratings on these insurers and reinsurers
on CreditWatch negative:
-- Austral Resseguradora S.A.;
-- Austral Seguradora S.A.;
-- J. Malucelli Resseguradora S.A.;
-- J. Malucelli Seguradora S.A.; and
-- Terra Brasis Resseguros S.A.
S&P believes Brazil's credit profile has weakened further since
its Sept. 9, 2015, downgrade. The political and economic
challenges Brazil faces remain considerable. S&P now expects a
more prolonged adjustment process with a slower correction in
fiscal policy as well as another year of steep economic
contraction.
S&P rarely rates insurance and reinsurance companies above the
sovereign because of the high exposure of the insurance industry
to government debt, particularly in Brazil, where many insurers'
investment portfolio are highly concentrated in government bonds,
which could affect the insurers' capital base and liquidity during
a sovereign distress. None of the Brazilian insurers and
reinsurers S&P rates, including those with a stand-alone credit
profiles higher than the sovereign rating, pass S&P's stress test
to have higher ratings than the sovereign's.
S&P placed several companies on CreditWatch negative given the
sovereign downgrade's potential risks for the insurance sector and
on the insurers' business risk profile amid domestic economic
woes, as well as on the overall asset credit quality of each rated
entity in the sector. Over the next few weeks S&P will assess to
what extent the deterioration of these companies' investment
portfolio's credit quality could pressure their financial risk
profiles and liquidity ratios.
The negative outlook reflects the at least one-in-three
probability that S&P will lower the global scale ratings on these
entities in 2017 following a similar rating action on the
sovereign.
S&P could revise the outlook to stable if similar action occurs on
the sovereign. The stable outlook is possible if Brazil's
political uncertainties and conditions for consistent policy
execution were to improve across branches of government to staunch
fiscal deterioration and strengthen GDP growth prospects. S&P
expects that these improvements would support a quicker turnaround
and could help Brazil exit from the current recession,
facilitating improved fiscal performance and providing more room
to maneuver in the face of economic shocks.
S&P aims to resolve the CreditWatch listings on five companies
within 90 days upon S&P's evaluation of the negative impact of the
sovereign's downgrade on the insurance sector's risks and
prospects, and on assessment of each entity's asset portfolio
credit quality and its potential impact on their liquidity ratios.
S&P may lower the long-term ratings on some companies by more than
one notch.
RATINGS LIST
To From
Allianz Global Corporate & Specialty Resseguros Brasil S.A.
Issuer Credit Rating
Global Scale BB/Negative/-- BBB-/Negative/--
Brazilian National Scale
brAA-/Negative/-- brAAA/Negative
Financial Strength Rating
Global Scale BB/Negative/-- BBB-/Negative/--
Brazilian National Scale
brAA-/Negative/-- brAAA/Negative/--
Bradesco Seguros S.A.
Issuer Credit Rating
brAA-/Negative/-- brAA+/Negative/--
Financial Strength Rating
brAA-/Negative/-- brAA+/Negative/--
J. Malucelli Seguradora S.A.
J. Malucelli Resseguradora S.A.
Austral Seguradora S.A.
Austral Resseguradora S.A.
Issuer Credit Rating
brAA-/Watch Neg/-- brAA-/Stable/--
Terra Brasis Resseguros S.A.
Issuer Credit Rating
brA+/Watch Neg/-- brA+/Stable/--
Sul America Cia Nacional de Seguros
Issuer Credit Rating
Global Scale BB/Negative/-- BB+/Negative/--
Brazilian National Scale
brAA-/ Negative/-- brAA+/Negative/--
Sul America S.A.
Issuer Credit Rating
Global Scale B+/Negative/-- BB-/Negative/--
Brazilian National Scale
brBBB+/ Negative/-- brA/Negative/--
Sr Unsecured brBBB+ brA
==========================
C A Y M A N I S L A N D S
==========================
BAOLUN CAPITAL: Shareholders Receive Wind-Up Report
---------------------------------------------------
The shareholders of Baolun Capital Fund Limited Partnership
received on Jan. 12, 2016, the liquidator's report on the
company's wind-up proceedings and property disposal.
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
BILLUND LEASING III: Shareholders Receive Wind-Up Report
--------------------------------------------------------
The shareholders of Billund Leasing III Limited received on
Jan. 22, 2016, the liquidator's report on the company's wind-up
proceedings and property disposal.
The company's liquidator is:
David Dyer
P.O. Box 1984 Grand Cayman KY1-1104
Cayman Islands
Telephone: (345)949-8244
Facsimile: (345)949-5223
C8 SYSTEMATIC: Shareholders Receive Wind-Up Report
--------------------------------------------------
The shareholders of C8 Systematic Multi-Strategy Fund Limited
received on Jan. 12, 2016, the liquidator's report on the
company's wind-up proceedings and property disposal.
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
C8 SYSTEMATIC MASTER: Shareholders Receive Wind-Up Report
---------------------------------------------------------
The shareholders of C8 Systematic Multi-Strategy Master Fund
Limited received on Jan. 12, 2016, the liquidator's report on the
company's wind-up proceedings and property disposal.
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
CENTURION CDO II: Shareholders Receive Wind-Up Report
-----------------------------------------------------
The shareholders of Centurion CDO II, Ltd. received on Jan. 22,
2016, the liquidator's report on the company's wind-up proceedings
and property disposal.
The company's liquidator is:
David Dyer
P.O. Box 1984 Grand Cayman KY1-1104
Cayman Islands
Telephone: (345)949-8244
Facsimile: (345)949-5223
CHEYNE MANAGED: Shareholders Receive Wind-Up Report
---------------------------------------------------
The shareholders of Cheyne Managed CSO Fund Limited received on
Jan. 22, 2016, the liquidator's report on the company's wind-up
proceedings and property disposal.
The company's liquidator is:
David Dyer
P.O. Box 1984 Grand Cayman KY1-1104
Cayman Islands
Telephone: (345)949-8244
Facsimile: (345)949-5223
COMMODORE CDO I: Shareholders Receive Wind-Up Report
----------------------------------------------------
The shareholders of Commodore CDO I Ltd. received on Jan. 22,
2016, the liquidator's report on the company's wind-up proceedings
and property disposal.
The company's liquidator is:
David Dyer
P.O. Box 1984 Grand Cayman KY1-1104
Cayman Islands
Telephone: (345)949-8244
Facsimile: (345)949-5223
COMMODORE CDO II: Shareholders Receive Wind-Up Report
-----------------------------------------------------
The shareholders of Commodore CDO II Ltd. received on Jan. 22,
2016, the liquidator's report on the company's wind-up proceedings
and property disposal.
The company's liquidator is:
David Dyer
P.O. Box 1984 Grand Cayman KY1-1104
Cayman Islands
Telephone: (345)949-8244
Facsimile: (345)949-5223
DELACROIX MANAGED: Shareholders Receive Wind-Up Report
------------------------------------------------------
The shareholders of Delacroix Managed Credit Fund Limited received
on Jan. 22, 2016, the liquidator's report on the company's wind-up
proceedings and property disposal.
The company's liquidator is:
David Dyer
P.O. Box 1984 Grand Cayman KY1-1104
Cayman Islands
Telephone: (345)949-8244
Facsimile: (345)949-5223
OPHIR PARTNERS: Shareholders Receive Wind-Up Report
---------------------------------------------------
The shareholders of Ophir Partners Master Fund, Ltd. received on
Jan. 14, 2016, the liquidator's report on the company's wind-up
proceedings and property disposal.
The company's liquidator is:
Ophir Partners, LLC
c/o Barnaby Gowrie
Telephone: +1 (345) 914 6365
PIQUANT ENA: Shareholders Receive Wind-Up Report
------------------------------------------------
The shareholders of Piquant Ena received on Jan. 13, 2016, the
liquidator's report on the company's wind-up proceedings and
property disposal.
The company's liquidator is:
Walkers Liquidations Limited
27 Hospital Road, George Town
Grand Cayman KY1-9008
Cayman Islands
RAMIUS CONVERTIBLE: Shareholders Receive Wind-Up Report
-------------------------------------------------------
The shareholders of Ramius Convertible Arbitrage Fund Ltd.
received on Jan. 11, 2016, the liquidator's report on the
company's wind-up proceedings and property disposal.
The company's liquidator is:
Ramius Advisors, LLC
c/o Michael Benwitt
599 Lexington Avenue, 19th Floor
New York, NY 10022
USA
Telephone: (212) 823 0226
RAMIUS MULTI-STRATEGY: Shareholders Receive Wind-Up Report
----------------------------------------------------------
The shareholders of Ramius Multi-Strategy Master FOF Ltd. received
on Jan. 11, 2016, the liquidator's report on the company's wind-up
proceedings and property disposal.
The company's liquidator is:
Ramius Advisors, LLC
c/o Michael Benwitt
599 Lexington Avenue, 19th Floor
New York, NY 10022
USA
Telephone: (212) 823 0226
RAMIUS PB: Shareholders Receive Wind-Up Report
----------------------------------------------
The shareholders of Ramius PB Segregated Ltd received on Jan. 11,
2016, the liquidator's report on the company's wind-up proceedings
and property disposal.
The company's liquidator is:
Ramius Advisors, LLC
c/o Michael Benwitt
599 Lexington Avenue, 19th Floor
New York, NY 10022
USA
Telephone: (212) 823 0226
RAMIUS PORTSIDE: Shareholders Receive Wind-Up Report
----------------------------------------------------
The shareholders of Ramius Portside Segregated Ltd received on
Jan. 11, 2016, the liquidator's report on the company's wind-up
proceedings and property disposal.
The company's liquidator is:
Ramius Advisors, LLC
c/o Michael Benwitt
599 Lexington Avenue, 19th Floor
New York, NY 10022
USA
Telephone: (212) 823 0226
RAMIUS VINTAGE: Shareholders Receive Wind-Up Report
---------------------------------------------------
The shareholders of Ramius Vintage Multi-Strategy FOF Ltd.
received on Jan. 11, 2016, the liquidator's report on the
company's wind-up proceedings and property disposal.
The company's liquidator is:
Ramius Advisors, LLC
c/o Michael Benwitt
599 Lexington Avenue, 19th Floor
New York, NY 10022
USA
Telephone: (212) 823 0226
SAMENA ASIA: Members Receive Wind-Up Report
-------------------------------------------
The members of Samena Asia Credit Fund received on Jan. 15, 2016,
the liquidator's report on the company's wind-up proceedings and
property disposal.
The company's liquidator is:
Avalon Ltd.
Landmark Square, 1st Floor, 64 Earth Close
P.O. Box 715 Grand Cayman KY1-1107
Cayman Islands
Facsimile: +1 (345) 769-9351
SAMENA ASIA MASTER: Members Receive Wind-Up Report
--------------------------------------------------
The members of Samena Asia Credit Master Fund received on Jan. 15,
2016, the liquidator's report on the company's wind-up proceedings
and property disposal.
The company's liquidator is:
Avalon Ltd.
Landmark Square, 1st Floor, 64 Earth Close
P.O. Box 715 Grand Cayman KY1-1107
Cayman Islands
Facsimile: +1 (345) 769-9351
VIOLET 2005-1: Shareholders Receive Wind-Up Report
--------------------------------------------------
The shareholders of Violet 2005-1 SPC received on Jan. 13, 2016,
the liquidator's report on the company's wind-up proceedings and
property disposal.
The company's liquidator is:
Michael Szymanski
2 Bridge Avenue, Suite 322
Red Bank
New Jersey 07701
ZEPHYR RECOVERY: Members Receive Wind-Up Report
-----------------------------------------------
The members of Zephyr Recovery (Cayman) 2004 received on Jan. 13,
2016, the liquidator's report on the company's wind-up proceedings
and property disposal.
The company's liquidator is:
Michael Szymanski
2 Bridge Avenue, Suite 322, Red Bank
New Jersey 07701
===============
C O L O M B I A
===============
PACIFIC EXPLORATION: Fitch Says 'C' IDR Could Move to 'RD'
----------------------------------------------------------
Fitch Ratings says that the agency could downgrade its ratings on
Pacific Exploration and Production Corp. (Pacific; Long-term
Foreign and Local Currency Issuer Default Ratings of 'C') to
restricted default (RD). This could occur after the expiration of
the recently negotiated extension with bondholders of the time in
which to declare principal due and payable on certain notes. Fitch
considers the extension of multiple waivers or forbearance periods
upon a payment default a restricted default given they represent a
material reduction in terms compared with the original contractual
terms. Furthermore, the extension of multiple waivers can be
interpreted as a tool that is being conducted in order to avoid
bankruptcy.
On Jan. 19, 2016, Pacific announced it had reached an agreement
with a portion of the 2019 and 2025 noteholders to extend the
period to deem principal amount due and payable until March 31 of
this year. These notes had interest payments due on January 19,
and January 26, 2016, respectively, with a 30-day grace period,
which the company opted to use.
Fitch downgraded Pacific's FC and LC ratings, as well as those for
all the company's senior unsecured notes, to 'C' from 'CCC' after
the company's announcement on Jan. 14, 2016 that it elected not to
make its scheduled interest payments on its 5.625% notes due Jan.
19, 2025 and its 5.375% notes due Jan. 26, 2019.
===================================
D O M I N I C A N R E P U B L I C
===================================
DOMINICAN REP: Pact Aims to Boost Agro-Industrial, Farm Exports
---------------------------------------------------------------
Dominican Today reports that Dominican Republic Export and
Investment Center (CEI-RD) and the Dominican Agricultural Market
Suppliers (MERCADOM), agreed to turn Merca Santo Domingo and the
National Food Network (RENA) into a platform to advance the
country's agro-industrial and farm exports to the various markets
abroad.
The partnership aims to promote local and foreign trade by raising
the volume of Dominican exports, to improve the Dominicans'
income, according to Dominican Today.
CEI-RD Executive Director Jean A. Rodriguez and MERCADOM general
manager Claudio Jimenez signed the agreement at the MERCADOM
complex located 22 kilometers north of the capital on the Duarte
highway, the report notes.
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'.
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'.
=================
G U A T E M A L A
=================
BANCO INDUSTRIAL: S&P Affirms 'BB' ICR; Outlook Stable
------------------------------------------------------
Standard & Poor's Ratings Services said it affirmed its long- and
short-term issuer credit ratings on Guatemala-based Banco
Industrial S.A. (BI) at 'BB' and 'B', respectively. The stand-
alone credit profile (SACP) remains 'bb+'. The outlook is stable.
The ratings reflect BI's strong business position as the largest
financial institution in the country, resulting in solid business
stability. They also reflect S&P's expectation of a moderate
risk-adjusted capital (RAC) ratio of 5.2%-5.3% for the next two
years, supported by a capital injection from its shareholders and
by its internal capital generation capacity. S&P's assessment
also takes into account its moderate risk position as a result of
a balance sheet with above-average dollarization, and its average
funding and adequate liquidity. It has a highly reliable customer
deposit funding base, with manageable short-term obligations. The
ratings on the Republic of Guatemala (BB/Stable/B) limit those on
BI because S&P do not believe this entity would withstand a stress
scenario for capital and liquidity, considering the significant
exposure that the bank has in Guatemala (in terms of government
bonds and loans to local enterprises). Its highly dollarized
balance sheet may not tolerate a potential significant currency
depreciation scenario.
The stable outlook on BI reflects that on the sovereign; the
current SACP is 'bb+', one notch above the sovereign rating. The
stable outlook also continues to reflect S&P's expectation that
its business position remain strong, considering its market
position in the country and its ability to maintain moderate
capital and earnings through capital injections and internal
capital generation. S&P also expects high dollarization levels
will remain while adequate asset quality metrics continue.
Because the ratings on the sovereign constrain those on BI, an
upgrade would only follow a similar action on the sovereign.
A downgrade on Banco Industrial is unlikely, because S&P would
also have to revise the bank's SACP downward by two notches--
because the SACP is one notch above the sovereign foreign currency
rating. In this sense, the ratings will move in tandem with those
on the sovereign.
======================
P U E R T O R I C O
======================
ANNA'S LINENS: Brutzkus Gubner Files Rule 2019 Statement
--------------------------------------------------------
Brutzkus Gubner Rozansky Seror Weber LLP, as attorneys for an
informal group of vendors which provided goods to Anna's Linens,
Inc., submitted a statement under F.R.B.P. Rule 2019 in connection
with its representation of vendors in the Chapter 11 case of
Anna's Linens.
The Vendors are four of the Debtor's prepetition vendors that each
holds administrative and unsecured claims against the Debtor's
bankruptcy estate on account of goods delivered to the Debtor
prepetition.
The Vendors are:
* Welcome Industrial Corporation
95 Marcus Blvd. Deer Park, NY 11729
Administrative claim of not less than $780,391
General unsecured claim of not less than $9,954,979
* Panda Home Fashions, LLC
10 Crescent Drive Albertson, NY 11507
Administrative claim of not less than $165,481
General unsecured claim of not less than $2,592,330
* Shewak Lajwanti Home Fashions, Inc.
5601 Downey Road Vernon, CA 90058
Administrative claim of not less than $623,243
General unsecured claim of not less than $7,455,735
* P & A Marketing, Inc.
34 Crest Hollow Lane Albertson, NY 11507
Administrative claim of not less than $369,520
General unsecured claim of not less than $3,680,855
Attorneys for Informal Group of Vendors:
Steven T. Gubner, Esq.
Reed Bernet, Esq.
BRUTZKUS GUBNER ROZANSKY SEROR WEBER LLP
21650 Oxnard Street, Suite 500
Woodland Hills, CA 91367
Telephone: (818) 827-9000
Facsimile: (818) 827-9099
E-mail: sgubner@brutzkusgubner.com
rbernet@brutzkusgubner.com
About Anna's Linens
Anna's Linens is a specialty retailer offering home textiles,
furnishings and decor at attractive prices. Headquartered in
Costa Mesa, California, operates a chain of 268 company owned
retail stores throughout 19 states in the United States (including
Puerto Rico and Washington, D.C.) generates over $300 million in
annual revenue and employs a workforce of over 2,500 associates.
Anna's Linens sought Chapter 11 bankruptcy protection (Bankr. C.D.
Cal. Case No. 15-13008) in Santa Ana, California, on June 14,
2015.
The case is assigned to Judge Theodor Albert. The Debtor tapped
Levene, Neale, Bender, Yoo & Brill LLP as counsel. The Debtor
estimated assets of $50 million to $100 million and debt of $100
million to $500 million.
The U.S. trustee overseeing the Chapter 11 case of Anna's Linens
Inc. appointed seven creditors to serve on the official committee
of unsecured creditors.
DORAL FINANCIAL: Meeting of Creditors Set for March 3
----------------------------------------------------
The meeting of creditors of Doral Properties Inc., an affiliate of
Doral Financial Corp., is set to be held on March 3, 2016, at 3:00
p.m., according to a filing with the U.S. Bankruptcy Court for the
Southern District of New York.
The meeting will be held at the Office of the U.S. Trustee, 4th
Floor, 80 Broad Street, New York.
The court overseeing the bankruptcy case of a company schedules
the meeting of creditors usually about 30 days after the
bankruptcy petition is filed. The meeting is called the "341
meeting" after the section of the Bankruptcy Code that requires
it.
A representative of the company is required to appear at the
meeting and answer questions under oath. The meeting is presided
over by the U.S. trustee, the Justice Department's bankruptcy
watchdog.
About Doral Financial
Doral Financial Corporation is a holding company whose primary
operating asset was equity in Doral Bank. DFC maintains offices
in New York City, Coral Gables, Florida and San Juan, Puerto Rico.
DFC has three wholly-owned subsidiaries: (i) Doral Properties,
Inc., (ii) Doral Insurance Agency, LLC ("Doral Insurance"), and
(iii) Doral Recovery, Inc.
On Feb. 27, 2015, regulators placed Doral Bank into receivership
and named the Federal Deposit Insurance Corp. as receiver. Doral
Bank served customers through 26 branches located in New York,
Florida, and Puerto Rico.
DFC sought Chapter 11 protection (Bankr. S.D.N.Y. Case No.
15-10573) in Manhattan on March 11, 2015. The case is assigned to
Judge Shelley C. Chapman.
DFC estimated $50 million to $100 million in assets and $100
million to $500 million in debt as of the bankruptcy filing.
The Debtor tapped Ropes & Gray LLP as counsel.
The U.S. trustee overseeing the Chapter 11 case of Doral Financial
Corp. appointed five creditors of the company to serve on the
official committee of unsecured creditors. The Committee is
represented by Brian D. Pfeiffer, Esq., and Taejin Kim, Esq., at
Schulte Roth & Zabel LLP.
On Nov. 25, 2015, Doral Properties filed a voluntary petition with
the Court for relief under Chapter 11 of the Bankruptcy Code.
The Office of the U.S. Trustee appointed five creditors to the
official committee of unsecured creditors. Schulte Roth & Zabel
LLP represents the committee.
===============
S T. L U C I A
===============
ST. LUCIA: IMF Says Unaddressed Vulnerabilities Hold Back Recovery
------------------------------------------------------------------
On February 5, the Executive Board of the International Monetary
Fund concluded the 2015 Article IV consultation with St. Lucia.
Background
On the back of strong tourism inflows and lower oil prices, the
St. Lucian economy has returned to growth after experiencing a
recession in 2012 and close-to-zero growth in 2013. GDP growth
reached 0.5 percent in 2014, with transportation and hotels mostly
contributing to the economic recovery. The current account deficit
is estimated to have narrowed from 11.2 to 6.7 percent of GDP in
2014. Inflation increased to 3.5 percent, mainly owing to higher
food prices. For the first time since FY2008/092, the primary
balance switched to a small surplus of 0.1 percent of GDP in
FY2014/15, reflecting somewhat higher revenues, including from
policy measures, restraint on current spending, and cuts to
capital expenditures. Nevertheless, debt continued to rise to
almost 80 percent of GDP reflecting non-concessional interest
rates and low growth.
Despite moderate economic recovery, unemployment rose to 24.4
percent in 2014. Youth unemployment, in particular, reached 41.8
percent. Despite some reduction in nonperforming loans, credit to
private sector continued to decline. Compounded by robust deposit
growth, the fall in credit continued to add onto liquidity
accumulation in the banking system, raising excess reserves to an
all-time high. The February 2015 decision by the Eastern Caribbean
Currency Union Monetary Council to lower the minimum saving
deposit interest rate from 3 to 2 percent (effective May 2015)
alleviated pressures on bank profitability and allowed some easing
of monetary conditions while the exchange rate, which is pegged to
the U.S. dollar, appreciated by 3 percent as of September 2015 in
real effective terms from a year ago.
Executive Board Assessment
Executive Directors welcomed the recent uptick in economic
activity and the positive short-term outlook on the back of
stronger tourist arrivals and lower oil prices, but noted that
unaddressed vulnerabilities are holding back the pace of the
recovery. Accordingly, Directors encouraged the authorities to
persevere with their efforts to improve the fiscal position,
revive bank intermediation, and push ahead with the reform agenda.
Actions on all these fronts hold the key to reducing unemployment,
boosting competitiveness, and strengthening St. Lucia's growth
prospects over the medium term.
Directors welcomed progress in tackling financial sector
weaknesses, but observed that non-performing loans remain high and
bank credit to the private sector continues to decline. They
agreed that cleaning up banks' balance sheets and facilitating a
resumption of lending should be top policy priorities. While some
efforts require regional coordination, key steps for the St.
Lucian authorities to consider include a reform of the foreclosure
and insolvency legislation and the ratification of all the
elements of the regional strategy for bank resolution,
particularly the law on the Eastern Caribbean Asset Management
Corporation. Directors welcomed the progress so far on complying
with the international standards against money laundering and the
financing of terrorism.
Directors noted recent improvements in the fiscal balance, but
concurred that St. Lucia's high public indebtedness limits the
room for policy maneuver and poses risks. They encouraged the
authorities to formulate without delay a strong medium-term plan
to achieve the regional debt target and secure the sustainability
of public finances. Directors generally agreed that the fiscal
adjustment should be based for the most part on current
expenditure reductions and aim at preserving priority capital
spending and creating buffers against natural disasters.
Directors took note of the newly launched Citizenship by
Investment Program. They welcomed the emphasis on transparency in
the governing legislation, noting that the highest integrity
standards could help prevent abuses of the program. Directors
underscored the importance of a prudent deployment of the
associated revenues which may be volatile, for example to finance
key infrastructure projects or retire public debt.
Directors underscored the importance of ambitious structural
reforms to reduce unemployment, improve the business environment,
and foster higher and more inclusive growth. They shared the view
that continued efforts are needed to diversify energy sources,
reduce the costs of doing business, and improve efficiency,
including in port operations and customs. Furthermore, education
reform would help address skills mismatches in the labor market
***********
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 * * *