/raid1/www/Hosts/bankrupt/TCRLA_Public/160714.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
Thursday, July 14, 2016, Vol. 17, No. 138
Headlines
A N T I G U A & B A R B U D A
BANK OF AMERICA: To Sever Ties With Local Banks
A R G E N T I N A
ARGENTINA: JPMorgan's Big Bet is Paying Off
B R A Z I L
BRAZIL: Credit Freeze Deepens as Banks Slash Lending to Farmers
BANCO NACIONAL: S&P Affirms 'BB' FC, LC Global Scale Ratings
ITAIPU BINACIONAL: S&P Affirms 'BB' National Scale Ratings
C A Y M A N I S L A N D S
ALPHAGEN NORTHERN: Shareholders' Final Meeting Set for Aug. 19
ALTERA MANAGEMENT: Shareholders' Final Meeting Set for July 27
AP OPPORTUNITIES: Shareholders' Final Meeting Set for Aug. 19
BAYVIEW VENTURE: Members' Final Meeting Set for Aug. 8
BRANTA HOLDINGS: Shareholders' Final Meeting Set for July 27
EDDINGTON TRIPLE: Shareholders' Final Meeting Set for July 27
FIRST PRINCIPLES: Shareholders' Final Meeting Set for July 29
GATEWAY CO-INVESTMENT: Shareholders' Final Meeting Set for July 27
LIBERTYVIEW CREDIT: Shareholders' Final Meeting Set for Aug. 19
ODEBRECHT FINANCE: Moody's Confirms B2 Rating on Sr. Unsec. Notes
OHSF FINANCING: Shareholders' Final Meeting Set for July 29
SANGAMON TRANSPORTATION: Shareholders' Meeting Set for July 27
SOUTH FERRY: Shareholders' Final Meeting Set for July 29
SOUTH FERRY MASTER: Shareholders' Final Meeting Set for July 29
C U B A
CUBA: Venezuela Crisis is Hurting Economy
D O M I N I C A N R E P U B L I C
DOMINICAN REPUBLIC: Commonwealth Nations Are Top Foreign Investors
P U E R T O R I C O
PUERTO RICO AQUEDUCT: S&P Lowers Rating on Revenue Bonds to 'CC'
PUERTO RICO HIGHWAY: S&P Lowers LT Rating on Revenue Bonds to 'D'
PUERTO RICO INVESTMENT: Plan Outline Approval Hearing on August 24
VILLAS DEL MAR: Hearing Approving Plan Outline Set for Nov. 1
- - - - -
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A N T I G U A & B A R B U D A
===============================
BANK OF AMERICA: To Sever Ties With Local Banks
-----------------------------------------------
The Daily Observer reports that the Central Bank Governor Dr.
Gobind Ganga has confirmed that US bank -- Bank of America has
indicated that it will be severing ties with local banks in
Antigua & Barbuda as early as next month.
However, Mr. Ganga says the pullout may not have any implications
for the country as other banks from North America and Europe have
already expressed an interest in filling the void, according to
The Daily Observer.
"If the void is filled, then there will not be any implications,"
said Mr. Ganga in an interview with News Source Guyana, the report
notes.
According to Mr. Ganga, only the indigenous banks are affected and
the reasons for severing ties were few, the report notes.
"There are a number of factors, one would be that they are talking
about de-risking, another factor would be the high level of
liquidity, they want to concentrate more on larger customers. So
there are a number of factors," Mr. Ganga said, the report relays.
Mr. Ganga said the US institution that has also severed ties with
other financial institutions in the Caribbean and across the
world, the report notes.
"If you have to do a transaction in the U.S, you have to make a
payment or receive a payment, that cheque or swift message to be
done by a corresponding bank in the U.S, in particular Bank of
America, that wouldn't happen. You will have to go somewhere else
to find someone that will accept that funds," he explained, the
report notes.
Banks in Guyana had depended on Bank of America to allow for the
smooth flow of transactions between Guyana and North America, the
report relays.
Mr. Ganga, while refusing to name the likely replacements, said
the other banks are looking to move in before the Bank of America
makes its exit, the report adds.
=================
A R G E N T I N A
=================
ARGENTINA: JPMorgan's Big Bet is Paying Off
-------------------------------------------
Carolina Millan at Bloomberg News reports that JPMorgan Chase &
Co.'s bid to become Argentina's top banker started back in early
2015, long before the country became the investor favorite it is
today.
The nation was mired in default and home to a thicket of currency
controls that had long repelled many investors when the New York-
based bank announced plans in May of that year to triple its staff
in Buenos Aires to 1,000 and make the city its hub for Latin
America, according to Bloomberg News. With presidential elections
later that year, JPMorgan was betting that change was on the way,
Bloomberg News notes.
The wager has paid off as President Mauricio Macri has restored
investor confidence in the country by ending a decade-long legal
battle with disgruntled creditors and jettisoning most of the
restrictions on the peso, Bloomberg News relays. The moves have
helped turn Argentina into the biggest bond issuer in emerging
markets this year with almost $25 billion of sales from the
nation's borrowers, Bloomberg News notes. JPMorgan has been in
prime position to capitalize on the surge, becoming the biggest
underwriter of the country's debt sales in 2016, Bloomberg News
says.
"Even when the situation in Argentina was difficult, JPMorgan
continued to bet on Argentina," Lisandro Miguens, the head of
Latin American debt capital markets said, Bloomberg News
discloses. "We've been preparing for this change over the past
year. We added employees, analyzed the situation with the holdouts
and spent more time visiting clients," Bloomberg News quoted Mr.
Miguens as saying.
JPMorgan is in the process of increasing its Argentina staff from
its 2015 levels as part of a three-year plan to make the country
its regional hub, Bloomberg News relays. It had hired
approximately 450 employees in the country as of the end of June.
Mr. Miguens, an Argentina native, predicts Argentina bond issuance
will climb to $30 billion by year-end, Bloomberg News notes.
The bank is coordinating investor meetings for companies including
power generator Albanesi SA and bank Banco de Galicia y Buenos
Aires SA, said people familiar with the plans who asked not to be
identified because the talks are private, Bloomberg News notes.
JPMorgan was one of four global coordinators in Argentina's record
$16.5 billion bond sale in April, which marked the country's
return to overseas credit markets for the first time since its
2001 default, Bloomberg News notes. It was also one of the
foreign banks that together lent Argentina $5 billion to bolster
its reserves in January, a month after President Macri took
office, Bloomberg News relays.
Several of Argentina's top finance officials have also worked at
JPMorgan. The list includes Finance Minister Alfonso Prat-Gay,
Finance Secretary Luis Caputo, Finance Undersecretary Santiago
Bausili and Finance Ministry chief of staff Vladimir Werning,
Bloomberg News discloses.
"When the new government took office, they called us immediately
and we had everything planned out, presentations -- numbers,
strategies," Bloomberg News quoted Mr. Miguens as saying. "This
gave us great credibility with them. It also helped that we
already knew them well," he added.
* * *
On April 19, 2016, the Troubled Company Reporter-Latin America
reported that Moody's Investors Service upgraded on April 15,
2016, Argentina's government bond rating to B3 from Caa1, with the
outlook changed to stable from positive. The key drivers for the
upgrade are (i) Moody's expectation that Argentina will settle
holdout creditor claims which will result in a lifting of court
injunctions and clear the way for Argentina to access
international capital markets, as well as the likelihood that
Argentina will make payments to restructured bondholders increased
significantly following an April 13, US circuit court ruling in
favor of Argentina, and (ii) the economic policy improvements
since Mauricio Macri's administration took office last December.
The new government lifted capital controls and allowed the peso to
float more freely, reduced energy and transportation subsidies and
has begun to address longstanding macroeconomic imbalances.
As previously reported by the TCR-LA, Argentina defaulted on some
of its debt late July 30, 2014, 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.
On March 30, 2016, after more than 12 hours of debate in the
Senate, Argentina's Congress passed a bill that will allow the
government to repay holders of debt that the South American
country defaulted on in 2001, including a group of litigating
hedge funds that won judgments in a New York court. The bill
passed by a vote of 54-16.
On March 24, 2016, Fitch Ratings has upgraded Argentina's Long-
term local-currency Issuer Default Rating (LT LC IDR) to 'B' from
'CCC', with a Stable Outlook. Fitch has affirmed Argentina's Long-
term foreign-currency (FC) IDR at 'RD' and the short-term FC IDR
at 'RD'. In addition, Fitch has upgraded the Country Ceiling to
'B' from 'CCC'.
===========
B R A Z I L
===========
BRAZIL: Credit Freeze Deepens as Banks Slash Lending to Farmers
----------------------------------------------------------------
Gerson Freitas Jr and Tatiana Freitas at Bloomberg News report
that Brazil's deepening economic turmoil is now engulfing farmers.
Banks slashed credit to farmers by 9.1 percent in inflation-
adjusted terms for the crop year that started this month, Brazil's
agriculture ministry said July 1, according to Bloomberg News.
That's the first contraction since at least the 2002-2003 crop
season, Bloomberg News notes.
The pullback comes as Latin America's biggest economy suffers its
longest recession in more than a century. Brazil -- the world's
largest exporter of soybeans, beef, coffee, sugar and orange juice
-- depends on the agriculture industry for about 20 percent of its
gross domestic product and 40 percent of its exports, Bloomberg
News relays.
The retreat by banks is prompting companies such as Plymouth,
Minnesota-based fertilizer producer Mosaic Co. to provide
financing of their own, Bloomberg News notes.
"As credit gets tighter, suppliers of agricultural inputs have
been forced to finance their clients," said Daniel Magalhaes, an
associate at RB Capital in Sao Paulo, Bloomberg News notes.
That funding typically takes the form of barter trading: Suppliers
provide fertilizers and chemicals to farmers ahead of the planting
season and receive part of the harvest as payment months later.
Those suppliers often fund these kinds of transactions by issuing
certificates of agricultural receivables, or CRAs, Bloomberg News
says. The certificates, which are sold to retail investors
through securitization companies, are backed by the crops farmers
deliver as payment, Bloomberg News notes.
Mosaic plans to raise as much as BRL300 million ($91 million) by
selling CRAs, said two people with direct knowledge of the matter
who asked not to be identified because the information is private,
Bloomberg News relays.
RB Capital's Magalhaes estimates that as much as BRL1.5 billion of
new CRAs are in the works, most of which will be issued by
companies seeking to provide financing to farmers, Bloomberg News
discloses. Sales of the certificates have already reached BRL5.4
billion this year, exceeding 2015's total, Bloomberg News relays.
In March, Monheim-based chemicals makers Bayer CropScience AG
raised BRL107 million by selling CRAs, Bloomberg News notes.
"With banks retreating, we need to find alternatives," said Paulo
Soares, a manager at Bayer. "Barter trading strengthens in
periods of uncertainty and tight credit," he added, Bloomberg News
says.
As reported in the Troubled Company Reporter-Latin America on
March 29, 2016, severe contraction that was preceded by several
years of below-trend growth has impaired Brazil's (Ba2 negative)
underlying economic strength, despite the country's large and
diversified economy, says Moody's Investors Service. The
country's credit rating is also coming under pressure from the
government's high level of mandatory spending.
BANCO NACIONAL: S&P Affirms 'BB' FC, LC Global Scale Ratings
------------------------------------------------------------
S&P Global Ratings affirmed its 'BB' foreign and local currency
global scale ratings on Banco Nacional de Desenvolvimento
Economico e Social S.A. (BNDES). S&P also affirmed its 'brAA-'
national scale issuer credit rating. The outlook on both scale
remains negative. At the same time, S&P affirmed its 'brAA-'
issuer credit rating on the bank's core subsidiary, BNDESPar. The
outlook on this rating also remains negative. BNDES' SACP remains
at 'bbb'.
The ratings on BNDES reflect its strong business position because
it's the key player in Brazil's private equity, infrastructure
investment, and corporate cross shareholding structures that
government uses to foment the country's overall investments.
Potential volatility in its revenue and greater lending
concentration than among its peers, given Brazil's prolonged
recession, is pressuring BNDES' business position. The ratings
also reflect the bank's weak capital and earnings, given the
higher risk-weighted assets, stemming from a weaker Banking
Industry Country Risk Assessment on Brazil and the latter's
downgrades in the past few years. S&P still views BNDES' risk
position as strong given its good asset quality, despite a
volatile equity portfolio following considerable losses in the
past few years. S&P also continues to view the bank's funding as
above average, given cheap and abundant loans from Brazil's
Treasury, and its liquidity as strong. However, it's currently
unclear if the recent announcement that Treasury plans to withdraw
R$100 billion from BNDES will affect S&P's view of the bank's
above-average funding. Moreover, S&P views BNDES as a GRE with an
almost certain likelihood of receiving extraordinary government
support under a financial distress scenario. The negative outlook
on BNDES is based on S&P's outlook on Brazil, and S&P expects the
ratings on the bank to move in tandem with those on the sovereign,
given S&P's view that the bank is a GRE with almost certain
likelihood of receiving government support under a financial
distress scenario.
A downgrade of Brazil and BNDES could stem, in particular, from
potential key policy reversals given the fluid political dynamics,
including lack of cohesion within the cabinet, inconsistent policy
initiatives, and uncertainties during or following the impeachment
process. A downgrade could also result from greater economic
turmoil than S&P currently expects, either due to governability
issues or global economic jitters.
S&P could revise the outlook to stable on Brazil and BNDES if the
country's political uncertainties and conditions for consistent
policy execution were to improve across branches of government to
stanch fiscal deterioration and strengthen GDP growth prospects.
S&P expects these improvements to 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.
ITAIPU BINACIONAL: S&P Affirms 'BB' National Scale Ratings
----------------------------------------------------------
S&P Global Ratings affirmed its global scale 'BB' and 'brAA-'
national scale ratings on Itaipu Binacional. The outlook remains
negative on both scales. The company's stand-alone credit profile
(SACP) remains at 'bb+'.
Brazil (global scale: BB/Negative/B; national scale:
brAA-/Negative/--) and Paraguay (BB/Stable/B) jointly own the
company, and Itaipu Treaty's terms offset the risk of government
intervention if either sovereign were to suffer from a financial
stress. Nevertheless, S&P continues to view Itaipu as Brazil's
government-related entity (GRE) because S&P believes the company
could benefit from extraordinary government support if necessary,
which could enhance its capacity and willingness to meet its
financial commitments. This assessment is based on the Brazilian
government's restructuring of Itaipu's debt in 1997 and the
Brazilian Treasury's current holding and/or guarantee 100% of
Itaipu's debt. Under a financial stress, the latter could
liquidate the due payments with the energy delivered to offset a
debt payment default, according to the terms of the 2000 financing
agreement of Itaipu's debt. Therefore, S&P continues to view the
link between the Brazilian government and Itaipu as very strong.
In addition, S&P continues to view Itaipu's role as critical to
Brazil because the company supplies around 15% of the country's
total electricity demand. These assessments reflect S&P's view of
an extremely high likelihood that the Brazilian government would
provide extraordinary, timely, and sufficient support to Itaipu in
a financial distress.
The negative outlook on Itaipu reflects the one on Brazil. If S&P
was to downgrade Brazil in the next 12 months, S&P expects to do
the same on Itaipu. Even though S&P sees a limited risk of
intervention from either government, Itaipu doesn't have a higher
rating than Brazil, given S&P's view of a very strong link with
it.
S&P could revise the outlook on Itaipu to stable following the
same rating action on Brazil. Although unlikely in the short
term, an upgrade could also stem from S&P's reassessment of the
link with the Brazilian government to strong or lower, which would
allow S&P to run a stress test scenario, while other factors
remain unchanged. The company could have a higher rating than the
sovereign if the former can pass the stress test under the
sovereign's hypothetical default.
==========================
C A Y M A N I S L A N D S
==========================
ALPHAGEN NORTHERN: Shareholders' Final Meeting Set for Aug. 19
--------------------------------------------------------------
The shareholders of The Alphagen Northern Pines Fund Limited will
hold their final meeting on Aug. 19, 2016, at 4:00 p.m., to
receive the liquidator's report on the company's wind-up
proceedings and property disposal.
The company's liquidator is:
DMS Corporate Services Ltd.
c/o Nicola Cowan
dms House, 2nd Floor
P.O. Box 1344 Grand Cayman KY1-1108
Cayman Islands
Telephone: (345) 946 7665
Facsimile: (345) 949 2877
ALTERA MANAGEMENT: Shareholders' Final Meeting Set for July 27
--------------------------------------------------------------
The shareholders of Altera Management Company Limited will hold
their final meeting on July 27, 2016, at 10:00 a.m., to receive
the liquidator's report on the company's wind-up proceedings and
property disposal.
The company's liquidator is:
Trident Liquidators (Cayman) Ltd.
c/o Lisa Thoppil
One Capital Place, 4th Floor
P.O. Box 847, George Town
Grand Cayman KY1-1103
Cayman Islands
Telephone: (345) 949 0880
Facsimile: (345) 949 0881
AP OPPORTUNITIES: Shareholders' Final Meeting Set for Aug. 19
-------------------------------------------------------------
The shareholders of A.P. Opportunities Fund, Ltd. will hold their
final meeting on Aug. 19, 2016, at 4:00 p.m., to receive the
liquidator's report on the company's wind-up proceedings and
property disposal.
The company's liquidator is:
Nicola Cowan
DMS Corporate Services Ltd.
dms House, 2nd Floor
P.O. Box 1344 Grand Cayman KY1-1108
Cayman Islands
Telephone: (345) 946 7665
Facsimile: (345) 949 2877
BAYVIEW VENTURE: Members' Final Meeting Set for Aug. 8
------------------------------------------------------
The members of Bayview Venture Partners Master Fund III, Ltd. will
hold their final meeting on Aug. 8, 2016, to receive 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
BRANTA HOLDINGS: Shareholders' Final Meeting Set for July 27
------------------------------------------------------------
The shareholders of Branta Holdings Limited will hold their final
meeting on July 27, 2016, at 10:00 a.m., to receive the
liquidator's report on the company's wind-up proceedings and
property disposal.
The company's liquidator is:
Stephen Nelson
Telephone: 949-4544
Facsimile: 949-7073
Collas Crill, Willow House, 2nd Floor
Cricket Square
P.O. Box 709 Grand Cayman, KY1-1107
Cayman Islands
EDDINGTON TRIPLE: Shareholders' Final Meeting Set for July 27
-------------------------------------------------------------
The shareholders of Eddington Triple Alpha Funds Ltd. will hold
their final meeting on July 27, 2016, at 11:30 a.m., to receive
the liquidator's report on the company's wind-up proceedings and
property disposal.
The company's liquidator is:
Doran & Associates
59/60 O' Connell Street Limerick
Ireland
Telephone: 00353 61 430000
Facsimile: 00353 61 408613
FIRST PRINCIPLES: Shareholders' Final Meeting Set for July 29
-------------------------------------------------------------
The shareholders of First Principles Treasury Fund I Limited will
hold their final meeting on July 29, 2016, at 10:20 a.m., to
receive the liquidator's report on the company's wind-up
proceedings and property disposal.
The company's liquidator is:
Walkers Liquidations Limited
Cayman Corporate Centre
27 Hospital Road, George Town
Grand Cayman KY1-9008
Cayman Islands
Telephone: +1 (345) 949 0100
GATEWAY CO-INVESTMENT: Shareholders' Final Meeting Set for July 27
------------------------------------------------------------------
The shareholders of Gateway Co-Investment II Limited will hold
their final meeting on July 27, 2016, at 9:00 a.m., to receive the
liquidator's report on the company's wind-up proceedings and
property disposal.
The company's liquidator is:
Richard Fear
c/o Ryan Charles
P.O. Box 2681 Grand Cayman KY1-1111
Cayman Islands
Telephone: (345) 814 7364
Facsimile: (345) 945 3902
LIBERTYVIEW CREDIT: Shareholders' Final Meeting Set for Aug. 19
---------------------------------------------------------------
The shareholders of Libertyview Credit Alpha Offshore Fund, L.P.
will hold their final meeting on Aug. 19, 2016, at 4:00 p.m., to
receive the liquidator's report on the company's wind-up
proceedings and property disposal.
The company's liquidator is:
Nicola Cowan
DMS Corporate Services Ltd.
dms House, 2nd Floor
P.O. Box 1344 Grand Cayman KY1-1108
Cayman Islands
Telephone: (345) 946 7665
Facsimile: (345) 949 2877
ODEBRECHT FINANCE: Moody's Confirms B2 Rating on Sr. Unsec. Notes
-----------------------------------------------------------------
Moody's Investors Service confirmed the B2 foreign currency rating
assigned to the senior unsecured notes issued by Odebrecht Finance
Ltd. (OFL) and guaranteed by Odebrecht Engenharia e Construcao
S.A. (OEC). At the same time, Moody's has confirmed the B2
corporate family rating assigned to OEC. The outlook for all
ratings is negative. This rating action concludes the review
process initiated on May 3, 2016.
The rating confirmation reflects the reduced risk of debt
acceleration after the publication of delayed audited financial
statements as of fiscal year end 2015.
Ratings confirmed:
Issuer: Odebrecht Engenharia e Construcao S.A. (OEC), Brazil
-- Corporate Family Rating: B2 (Global Scale Rating)
Issuer: Odebrecht Finance Limited (OFL), Cayman Islands
-- BRL500 million (BRL500 million outstanding) senior unsecured
guaranteed notes due 2018: B2 foreign currency rating
-- USD500 million (USD72.7 million outstanding) senior
unsecured guaranteed notes due 2020: B2 foreign currency
rating
-- USD600 million (USD143 million outstanding) senior unsecured
guaranteed notes due 2022: B2 foreign currency rating
-- USD800 million (USD101.6 million outstanding) senior
unsecured guaranteed notes due 2023: B2 foreign currency
rating
-- USD550 million (USD518.6 million outstanding) senior
unsecured guaranteed notes due 2025: B2 foreign currency
rating
-- USD500 million (USD500 million outstanding) senior unsecured
guaranteed notes due 2029: B2 foreign currency rating
-- USD850 million (USD850 million outstanding) senior unsecured
guaranteed notes due 2042: B2 foreign currency rating
-- USD750 million (USD750 million outstanding) senior unsecured
guaranteed perpetual notes: B2 foreign currency rating
RATINGS RATIONALE
OEC's B2 rating reflects its current strong debt protection
metrics and still adequate liquidity cushion. The rating also
incorporates the company's backlog that provides some revenue
visibility for the next 2 to 3 years and limited exposure to
Brazil's government. The rating is constrained by the evolving
corruption investigations in the country, with potential monetary
fines and other business sanctions to OEC, as well as the
challenging fundamentals for E&C companies throughout Latin
America. The rating confirmation reflects the reduced risk of
debt acceleration after the publication of delayed audited
financial statements as of fiscal year end 2015.
The negative outlook reflects the challenges ahead of OEC's
management to maintain a solid credit profile for the company amid
the evolving corruption investigations in the country, with
potential monetary fines and other business sanctions affecting
the company's liquidity position and operating sustainability.
Uncertainties over contingencies that may arise from Lava Jato
investigations are the primary credit concern to OEC's credit.
While the investigations are ongoing, the company is experiencing
reputational challenges and weaker investor sentiment, as public
and private capital markets, developing banks and multilateral
financing agencies increase their scrutiny on the companies'
committed funding and new contracts.
Moody's believes that eventual penalties and fines may not
significantly affect OEC's liquidity profile in the short term,
since any fines that Brazilian prosecutors or regulators could
impose for unlawful activity, as well as investigations and
shareholder litigation, will likely take years to resolve. But
limitations to do business in Brazil could spread negative
consequences to its operating contracts abroad. Conversely,
monetary fines arising from a leniency agreement or settlement to
resolve ongoing legal proceedings could take a toll on OEC's
current liquidity, prospective cash flow generation and credit
metrics, but it would help resolve most of its near-term
uncertainties to support business continuity.
In 2015, OEC already experienced a 17% backlog reduction as
compared to fiscal year end 2014. Going forward, we anticipate
continued pressure on backlog replacement rates due to the
challenging industry fundamentals for engineering and construction
companies in Brazil and Latin America. For other countries in
Latin America, Moody's expects only moderate increase in
infrastructure spending over the next couple years, since the
region's economic growth is also constrained by lower commodity
prices trends in the metals and mining and oil and gas industries.
Even though Brazil has a huge need to relieve its infrastructure
bottlenecks in transportation and logistics, and to address poor
sanitation and expensive energy availability, Moody's expects few
infrastructure projects going up for auction through 2016, with
more frequent project delays and some cancelations due to the
country's ongoing fiscal adjustment, weak growth rate and
political instability.
OEC's USD28.1 billion portfolio of contracted projects provides
reasonable revenue visibility for the next two to three years.
Historically, the company has been able to maintain relatively
stable profitability, with EBITA margins within 9% - 10% range on
a sustainable basis, even under weaker market conditions in Brazil
and abroad, which reflects its effective revenue diversification.
The company also benefits from low leverage, which has remained
in. the 2.0x - 3.0x range, as measured by total adjusted gross
debt (adjusted for off-balance sheet guarantees) to EBITDA, and a
longer debt maturity profile with no refinancing pressure over the
next three years. But the prospective ability for the company to
support those credit metrics is less certain. Moody's base case
projections consider continued pressure on the company's backlog,
high working capital needs and moderate leverage increase through
at least mid-2017.
As of Dec. 31, 2015, OEC's reported a cash position of USD2.5
billion, covering 71% of its total adjusted debt considering the
off-balance bonds guaranteed and serviced by OEC.
A rating upgrade is unlikely at this point, however, rating
stabilization may occur in the event of a constructive resolution
of the corruption investigation, along with Moody's assessment of
progress towards frequent and timely delivery of audited financial
statements. Rating stabilization would also require OEC to
improve or, at least, maintain a sound liquidity profile enough to
support the business throughout the anticipated challenging
business environment in 2016 and 2017.
OEC's ratings could be downgraded if Moody's perceives a higher
risk arising from the developments of the legal proceedings, such
as larger than expected monetary fines, business sanctions or
contract cancelations leading to backlog deterioration that would
prospectively result in a higher leverage and lower liquidity to
meet its debt service requirements.
The principal methodology used in these ratings was Construction
Industry published in November 2014.
Odebrecht Engenharia e Construcao S.A. (OEC), is the largest
engineering and construction company in Latin America, with
BRL57.5 billion (USD17.1 billion) in net revenues during the last
twelve months ended Dec. 31, 2015. The company's project backlog
of BRL110 billion (USD28 billion) is diversified into 162
contracts comprising large-scale construction projects in the
transportation segment, energy and sewage infrastructures,
buildings and industrial facilities, of which 21% is located in
Brazil, 58% in other Latin American countries and 20% in Africa.
OHSF FINANCING: Shareholders' Final Meeting Set for July 29
-----------------------------------------------------------
The shareholders of OHSF Financing Ltd. will hold their final
meeting on July 29, 2016, at 10:30 a.m., to receive the
liquidator's report on the company's wind-up proceedings and
property disposal.
The company's liquidator is:
Walkers Liquidations Limited
Cayman Corporate Centre
27 Hospital Road, George Town
Grand Cayman KY1-9008
Cayman Islands
Telephone: +1 (345) 949 0100
SANGAMON TRANSPORTATION: Shareholders' Meeting Set for July 27
--------------------------------------------------------------
The shareholders of Sangamon Transportation Group Cayman Islands
Venture 1 will hold their meeting on July 27, 2016, at 9:00 a.m.,
to receive the liquidator's report on the company's wind-up
proceedings and property disposal.
The company's liquidator is:
Yinit Pena
c/o Andre Slabbert
Estera Trust (Cayman) Limited
75 Fort Street
P.O. Box 1350 Grand Cayman KY1-1108
Cayman Islands
Telephone: +1 (345) 949 4900
SOUTH FERRY: Shareholders' Final Meeting Set for July 29
--------------------------------------------------------
The shareholders of South Ferry Capital Fund Ltd. will hold their
final meeting on July 29, 2016, at 10:00 a.m., to receive the
liquidator's report on the company's wind-up proceedings and
property disposal.
The company's liquidator is:
Walkers Liquidations Limited
Cayman Corporate Centre
27 Hospital Road, George Town
Grand Cayman KY1-9008
Cayman Islands
Telephone: +1 (345) 949 0100
SOUTH FERRY MASTER: Shareholders' Final Meeting Set for July 29
---------------------------------------------------------------
The shareholders of South Ferry Capital Master Fund Ltd. will hold
their final meeting on July 29, 2016, at 10:10 a.m., to receive
the liquidator's report on the company's wind-up proceedings and
property disposal.
The company's liquidator is:
Walkers Liquidations Limited
Cayman Corporate Centre
27 Hospital Road, George Town
Grand Cayman KY1-9008
Cayman Islands
Telephone: +1 (345) 949 0100
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C U B A
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CUBA: Venezuela Crisis is Hurting Economy
-----------------------------------------
Trinidad Express reports that Raul Castro acknowledged that the
crisis in Venezuela, Cuba's key ally and main trade partner, is
having a negative spillover effect on the island's economy, days
after officials began ordering energy-saving measures for the
coming months.
According to a transcript of Mr. Castro's speech to Members of
Parliament posted by the official website Cubadebate, the Cuban
leader said the economy grew just one per cent in the first part
of the year, half of what the government had planned for, the
report notes.
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D O M I N I C A N R E P U B L I C
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DOMINICAN REPUBLIC: Commonwealth Nations Are Top Foreign Investors
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Dominican Today reports that the nations of the British-led
Commonwealth account for the highest foreign investment in the
Dominican Republic, with capital of around US$6.2 billion in the
past 10 years in sectors such as mining, rum distilleries energy
among others.
Fernando Gonzalez Nicolas, president of the Roundtable of
Commonwealth countries in the Dominican Republic provided the
figure in his opening remarks for the seminar "The impact of legal
security on foreign investment in the Dominican Republic,"
according to Dominican Today.
The business leader said three of Dominican Republic's top five
exports markets are Commonwealth countries, the report relays.
Mr. Nicolas said foreign investment is not only a source of wealth
but also the transfer of technology and knowledge, the report
notes. "In 2015 the main destinations for exports from the
Dominican Republic were the United States, with US$4.5 billion;
Haiti, US$1.0 billion; Canada, US$700 million; India, US$565
million and Great Britain, 127 million dollars," the report
discloses
Mr. Gonzalez said Canada, India and Great Britain are Commonwealth
members where the country exported bananas, tobacco, sugar, rum,
cocoa and industrial free zones and other items, the report
relays.
Speaking in the seminar held at Sheraton hotel, Gonzalez said
Dominican Republic's exports to all Commonwealth countries was
nearly US$1.5 billion in 2015, for which "the protection of
foreign investment is not only the responsibility of the State but
also of society which must demand clarity from its government,"
the report adds.
As reported in the Troubled Company Reporter-Latin America on
July 1, 2016, Moody's Investors Service has changed the outlook on
the Dominican Republic's long term issuer and debt ratings to
positive from stable. The ratings have been affirmed at B1.
======================
P U E R T O R I C O
======================
PUERTO RICO AQUEDUCT: S&P Lowers Rating on Revenue Bonds to 'CC'
----------------------------------------------------------------
S&P Global Ratings lowered its ratings on Puerto Rico Aqueduct &
Sewer Authority's (PRASA) series 2008 and 2012 senior-lien revenue
bonds two notches to 'CC' from 'CCC-'. The outlook is negative.
At the same time, S&P lowered to 'D' from 'CCC-' the rating on
PRASA's obligations that also carry a Commonwealth of Puerto Rico
guarantee, as well as those obligations that are commonwealth-
supported. S&P removed the ratings from CreditWatch, where they
where placed with negative implications on Aug. 18, 2015.
S&P views PRASA to be a government-related entity of the
commonwealth.
"The downgrade is based on our view that PRASA's role and link
with the commonwealth and the commonwealth's financial distress
have caused a weakening in PRASA's financial risk profile, as
evidenced by its diminished liquidity and large accounts payable
that by management's estimates will take more than one fiscal year
to fully address," said S&P Global Ratings credit analyst Theodore
Chapman.
Because of the commonwealth's ongoing financial distress and
uncertainty regarding the resolution of that distress, and the
difficulties PRASA faces by its association with the commonwealth,
the authority has been unable since 2014 to execute a planned
revenue bond sale, all while facing a large capital improvement
plan driven mainly by unfunded regulatory mandates from the U.S.
Environmental Protection Agency and the Puerto Rico Dept. of
Health for the sanitary sewer and drinking water systems,
respectively. PRASA management and those environmental regulators
recently reached agreements on extensions of some of the deadline-
certain mandates, which could provide some measure of relief to
the timing and magnitude of future capital investments.
While PRASA has maintained adequate cash from operations and for
the most part also at least adequate cash reserves throughout the
commonwealth's downward spiral, the lack of market access caused
PRASA two main problems:
-- Use of much of its cash reserves to pay off two committed
lines of credit. PRASA had historically used these lines as
interim financing mechanisms for approved capital projects,
with the intent to retire draws on the lines with the
issuance of long-term debt. This does not include an
operating reserve requirement that had previously been
satisfied with a line of credit with the Puerto Rico
Government Development Bank (GDB). While PRASA currently
has no draws against that line, it expired on June 30, 2016,
and GDB will not be renewing or extending it. PRASA will be
satisfying the operating reserve requirement with equal
monthly payments over five years; and
-- A strain on the operating budget; PRASA has had to expense
items that under permitted use of tax-exempt debt would
normally have been capitalized or reimbursed with bond
proceeds. Instead, these outlays have either flowed through
the operating budget or payment deferred altogether. It is
S&P's understanding that PRASA's decision not to self-
support the commonwealth-guaranteed and supported
obligations is because it intends to use those funds to
address $150 million of accounts payable to construction
firms, vendors, and suppliers that have provided goods and
services related to PRASA's capital program.
PRASA's roughly $3.4 billion in series 2008 and 2012 senior-lien
bonds are secured by a gross-lien pledge of the revenues of its
retail waterworks and sanitary sewer system. Under its master
agreement of trust (MAT) supporting those bonds, failure to pay
principal of or interest on commonwealth-guaranteed debt or
commonwealth-supported obligations is not an event of default.
The $248 million in rated commonwealth-guaranteed debt and
$162 million in rated commonwealth-supported obligations are
intended to be paid from the net revenues of PRASA, subordinate to
any obligations under the MAT. Should those net revenues be
insufficient, the obligations carry a general obligation (GO)
pledge and an appropriation pledge, respectively. However, Puerto
Rico defaulted on its July 1, 2016, general obligation (GO) and
appropriation-backed bond principal and interest payments. As
such S&P Global Ratings lowered its 'CC' GO rating to 'D',
reflecting a default, except on the series 2008 revenue refunding
commonwealth-guaranteed bonds. PRASA did make the full and timely
interest payment on that series; principal does not begin to
amortize until July 2021. While PRASA is not obligated to pay on
the commonwealth-guaranteed debt or commonwealth-supported
obligations issued on behalf of the authority, S&P is also
revising PRASA's stand-alone credit profile (SACP) to 'sd' to
reflect a selective default. The SACP is S&P Global Ratings'
opinion of PRASA's general creditworthiness regardless of any role
or link to the commonwealth, and is not a rating but instead a
component of one.
PUERTO RICO HIGHWAY: S&P Lowers LT Rating on Revenue Bonds to 'D'
-----------------------------------------------------------------
S&P Global Ratings has lowered its long-term rating and underlying
rating on the Puerto Rico Highway and Transportation Authority's
subordinated transportation revenue bonds, series 1998, state
infrastructure bank, to 'D' (default) from 'CC', following a
default on scheduled debt service due July 1, 2016. These bonds
were issued under a 1998 resolution, and had a debt service
reserve held within the Puerto Rico State Infrastructure Bank
Trust Fund.
PUERTO RICO INVESTMENT: Plan Outline Approval Hearing on August 24
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The U.S. Bankruptcy Court for the District of Puerto Rico is set
to hold a hearing on August 24, at 9:00 a.m., to consider the
disclosure statement detailing Puerto Rico Investment, S.E.'s
Chapter 11 plan.
Objections to the disclosure statement must be filed not less than
14 days prior to the hearing.
Puerto Rico Investment can be reached through:
Carmen D. Conde Torres, Esq.
C. Conde & Assoc.
254 San Jose Street, 5th Floor
San Juan, PR 00901-1523
Tel: 787-729-2900
Fax: 787-729-2203
Email: condecarmen@condelaw.com
About Puerto Rico Investment
Puerto Rico Investment, S.E. sought protection under Chapter 11 of
the Bankruptcy Code (Bankr. D. P.R. Case No. 16-01734) on March 3,
2016. The petition was signed by John Hernandez Vazquez, vice
president and treasurer.
The case is assigned to Judge Mildred Caban Flores.
At the time of the filing, the Debtor disclosed $2.58 million in
assets and $2.92 million in liabilities.
VILLAS DEL MAR: Hearing Approving Plan Outline Set for Nov. 1
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The U.S. Bankruptcy Court for the District of Puerto Rico is set
to hold a hearing on November 1, at 10:00 a.m., to consider
approval of the disclosure statement detailing Villas Del Mar Hau,
Inc.'s Chapter 11 plan.
Objections to the disclosure statement must be filed not less than
14 days prior to the hearing.
Villas Del Mar Hau can be reached through:
Victor Gratacos Diaz, Esq.
Gratacos Law Firm, P.S.C.
P.O. BOX 7571
Caguas, PR 00726
Tel: 787 746-4772
Email: bankruptcy@gratacoslaw.com
About Villas Del Mar
Villas Del Mar Hau, Inc. filed for Chapter 11 bankruptcy
protection (Bankr. D.P.R. Case No.: 15-10146) on December 22,
2015. The petition was Myrna Hau Rodriguez, president/owner. The
Hon. Enrique S. Lamoutte Inclan presided over the case.
The Debtor estimated total assets of $3.80 million and estimated
total debts of $4.46 million.
***********
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 comillionercial 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 * * *