/raid1/www/Hosts/bankrupt/TCRLA_Public/160826.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
Friday, August 26, 2016, Vol. 17, No. 169
Headlines
A R G E N T I N A
ARGENTINA: Macri Expresses Concern Over Low Employment Rate
B A R B A D O S
BARBADOS: Nudges Banks With Increased Tax
BARBADOS: Real GDP Grew by 0.8 Percent in 2015, IMF Says
B R A Z I L
COMPANHIA SIDERURGICA: Moody's Says Sale Has No Impact Caa1 Rating
HSBC BANK: S&P Affirms Then Withdraws 'BB/B' Issuer Credit Ratings
JALLES MACHADO: S&P Revises Outlook to Pos. & Affirms 'BB-' CCR
STATE OF RIO: S&P Lowers ICR to 'CCC-' & Removes from Watch Neg.
SUL AMERICA: Fitch Affirms 'BB-' IDR; Outlook Negative
C A Y M A N I S L A N D S
ANDOR MASTER: Shareholder to Hear Wind-Up Report on Sept. 6
ANDOR OPPORTUNITY: Shareholder to Hear Wind-Up Report on Sept. 6
BEDFORD INVESTMENT: Shareholder to Hear Wind-Up Report on Sept. 19
FROG'S BREATH: Shareholder to Hear Wind-Up Report on Sept. 16
GRANT INTERNATIONAL: Member to Hear Wind-Up Report on Sept. 16
GRAYS PEAK: Shareholders' Final Meeting Set for Oct. 10
GRAYS PEAK MASTER: Members' Final Meeting Set for Oct. 10
GUGGENHEIM ADVISORS: Shareholders' Final Meeting Set for Sept. 12
GUGGENHEIM PORTFOLIO VIII: Shareholders' Meeting Set for Sept. 12
GUGGENHEIM PORTFOLIO XXXVI: Shareholders' Meeting Set for Sept. 12
PLATINUM PROPERTIES: Court Hears Petition to Wind Up
WREN LIMITED: Member to Hear Wind-Up Report on Sept. 6
J A M A I C A
* JAMAICA: PIOJ Predicts Continued Strengthening of Economy
N I C A R A G U A
NICARAGUA: Fitch Affirms 'B+' Issuer Default Rating
P U E R T O R I C O
SPORTS AUTHORITY: Renewed Bonus Plan Provokes Protest
- - - - -
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A R G E N T I N A
=================
ARGENTINA: Macri Expresses Concern Over Low Employment Rate
-----------------------------------------------------------
EFE News reports that President Mauricio Macri expressed concern
that Argentina's employment rate "barely exceeds" 40 percent and
criticized previous administrations for creating 750,000
government jobs to hide what he said was its inability to grow the
economy.
"There are real economic figures (that) have to worry us," such as
the fact that the proportion of the population that is effectively
employed in Argentina "barely exceeds" 40 percent, President Macri
said at the Buenos Aires Grain Exchange, according to EFE News.
The report notes that President Macri contrasted that with other
regional countries, whose employment rates (the proportion of
working age adults who are employed) are higher than 50 percent.
Argentina's employment rate totaled 41.7 percent in the second
quarter, according to figures released by the National Census and
Statistics Institute, or INDEC, the report notes.
Those figures, the first official labor market data to be released
since President Macri took office last December, also indicated
that Argentina's unemployment rate stood at 9.3 percent, the
report relays.
The employed population includes some 750,000 public jobs created
over the past decade, "which in most cases were (intended) to
conceal the inability to grow," President Macri added, the report
notes.
"Turning the past on so many years of populism isn't easy, but
there's no question you get out of populism with less populism,"
the president said, adding that his administration was focused on
the creation of "real employment," technology and a return to
reliable economic figures, the report says.
President Macri also stressed the need to seek out new markets
through steps to bolster trade and investment with the United
States, Japan and the European Union, although he said the
exchange of offers in trade-deal negotiations with the latter were
still "poor," the report discloses.
"I hope that in this growing exchange there's also a greater
opening to products with greater value added than what we're
currently exporting," President Macri said, the report notes.
The president said that due to "years of misguided policies" and
the "myopia" of previous leftist administrations there were
sectors facing special difficulties, citing dairy farmers and
fruit and vegetable producers in particular, the report adds.
* * *
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 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 A R B A D O S
===============
BARBADOS: Nudges Banks With Increased Tax
-----------------------------------------
Caribbean360.com reports that Minister of Finance Chris Sinckler
has announced an increase in a tax on bank assets, on the heels of
banking institutions not passing on to customers the benefits of
the elimination of a minimum interest rate.
Minister Sinckler said the 0.15 per cent increase in the Bank
Asset Tax -- up from 0.2 per cent to 0.35 per cent -- is expected
to raise an additional BDS$14.3 million (US$7.15 million) in
revenue, according to Caribbean360.com.
Delivering the 2016 Budget, Minister Sinckler complained that
although the April 1, 2015 removal of the minimum 2.5 per cent
interest rate by the Central Bank of Barbados was intended to
ultimately benefit consumers, which had not happened, the report
relays.
"It was hoped that by freeing banks of this requirement, that as
banking institutions received the benefits of a lesser cost burden
at this end, it would have fed through for a faster and deeper
benefit for consumers of banking services in many other critical
portfolios," the report quoted minister as saying. "To date,
however, I must confess that like the average Barbadian, I am
particularly unimpressed with the efforts made by the banks in
this regard. As such, and as a little reminder to them of the need
to share their new found and much appreciated benefits from the
liberalization of the minimum savings rate, I have decided to use
a little more concrete persuasion to nudge them along in the
desired direction," he added.
The increase in the Bank Asset Tax took effect immediately, with
the assessment for the assets starting from April 1, 2016, the
report notes.
"The expected intake from the tax for a full financial year is
estimated to be $33.3 million using the 2015 asset base of the
banking system," Minister Sinckler said, the report notes.
President of the Barbados Economic Society (BES) Jeremy Stephen
has warned that customers could end up hurting more as a result of
the tax increase, the report relays.
"Banks are not in the business of absorbing taxes, so more than
likely this will be passed on to consumers, and as such you can
expect even further interest rate cuts, unless consumers decide to
move their money out of that liquid banking system and into say,
Government debt, which is really what I believe is the intent
here," he told online newspaper Barbados TODAY, the report notes.
And President of the Barbados Bankers' Association (BBA) David
Noel has called for the tax to be shared equitably across the
entire financial sector, the report adds.
As reported in the Troubled Company Reporter-Latin America on
April 5, 2016, Moody's Investors Service downgraded Barbados'
government bond rating and issuer rating to Caa1 and changed the
outlook to stable.
BARBADOS: Real GDP Grew by 0.8 Percent in 2015, IMF Says
--------------------------------------------------------
On August 22, 2016, the Executive Board of the International
Monetary Fund (IMF) concluded the Article IV consultation 1 with
Barbados.
The economy appears to have turned the corner with activity
picking up. Real GDP grew by 0.8 percent in 2015, underpinned by
an increase in private investment and surge in tourism arrivals,
which increased by 14 percent, among the highest in the Caribbean.
This boosted employment by 2 percent, while the unemployment rate
fell to 11.3 percent. Inflation eased owing to lower import
prices, with end-period prices falling by 2.5 percent, compared
with an increase of 2.3 percent in 2014. The external current
account position improved significantly, reflecting improved terms
of trade, as the deficit narrowed from 9.9 percent of GDP in 2014
to 6.7 percent in 2015, primarily reflecting lower oil and other
prices. Exports of goods and services rose mainly due to higher
tourism receipts. Net inflows in the capital and financial account
fell, driven by large official amortization payments and lower
FDI. As a result, net international reserves dropped to US$469
million at end-April 2016 (2.8 months of imports).
The fiscal situation remains challenging despite ongoing
government adjustment efforts. The FY 2015/16 budget deficit was
broadly unchanged at about 7 percent of GDP. Revenue measures,
though raising revenue by 1 percent of GDP, fell short of target
due to implementation delays. On the expenditure side progress on
reducing transfers to State Owned Enterprises was also slower than
anticipated, partially attributable to the unbudgeted debt service
of one enterprise and transfers to support infrastructure
investment financed by external sources. At end-FY2015/16, central
government debt excluding (including) securities held by the
National Insurance Scheme (NIS) reached the equivalent of 105.5
(141.6) percent of GDP, from 98.0 (132.3) percent in FY2014/15.
The large funding requirements, totaling about 45 percent of GDP,
have been mostly met by the Central Bank of Barbados (CBB), the
NIS, and growing arrears.
The financial sector remains stable while commercial bank
liquidity continues to rise. Private sector credit growth turned
modestly positive in 2015, following two years of decline while
NPLs declined further. Withdrawal of Correspondent Banking
Relationships has directly affected a small number of entities in
the International Business and Financial Services (IBFS) sector,
whose growth has stagnated since the global financial crisis.
Monetary policy has been driven by fiscal considerations, as the
CBB continued to fund the government through money creation and
with commercial banks' excess reserves. Interest rates have begun
to rise, with reduced direct intervention by the central bank in
the Treasury Bill auctions.
Executive Board Assessment
The Executive Directors welcomed the pickup in economic growth led
by the tourism sector and the improvement in the external
position. At the same time, notwithstanding the authorities'
consolidation efforts, they noted that the large fiscal deficit
and a further increase in public debt remain a challenge. They
stressed that continued fiscal adjustment and public sector
reforms are necessary to bring public debt on a downward path,
preserve external sustainability, and improve investor sentiment.
They also underscored the need to eliminate impediments to
stronger long term growth and bolster competitiveness.
Directors commended the authorities' commitment to fiscal
adjustment and reforms. They noted that further efforts are needed
to put the high and growing public debt on a sustainable path,
while minimizing the negative impact on growth and preserving
social cohesion. They welcomed the new measures in the August 2016
budget, including reductions in current expenditure and new
revenue measures, although they cautioned that a further increase
in tax exemptions could erode revenues. Directors underscored the
importance of completing the reform of the revenue authority to
improve tax administration and increase compliance. They stressed
that stronger efforts are also needed to reform state -owned
enterprises through better governance, consideration of user fees,
and potential divestment and consolidation of public entities.
They also called for swift action to eliminate government arrears.
Directors emphasized that the continued financing of the fiscal
deficit by the Central Bank of Barbados (CBB) is inconsistent with
maintenance of the exchange rate anchor. They encouraged the CBB
to allow domestic interest rates to rise in line with increases in
U.S. interest rates and ensure adequate international reserve
buffers.
Directors welcomed the recent improvement in the non-performing
loan ratio and banks' liquid and well-capitalized balance sheets.
They encouraged continued close supervision of the financial
sector, particularly of non-bank institutions, including credit
unions and insurance companies. Directors noted that domestic
banks have not experienced a decline in correspondent banking
relationships and welcomed the authorities' efforts with regional
partners to understand the issue. They recommended taking quick
action on any shortcomings that might be identified by the
upcoming AML/CFT evaluation.
Directors agreed that a comprehensive growth strategy is needed to
lift the country's long-term competitiveness in the key tourism
sectors. Priorities for raising growth include timely
implementation of tourism investment and infrastructure projects,
improving public service efficiency and streamlining business
regulation, increasing labor market flexibility, and unlocking
agriculture's growth potential.
Directors encouraged continued efforts, with Fund technical
assistance, to resolve outstanding data issues and improve the
dissemination of statistics.
As reported in the Troubled Company Reporter-Latin America on
April 5, 2016, Moody's Investors Service downgraded Barbados'
government bond rating and issuer rating to Caa1 and changed the
outlook to stable.
===========
B R A Z I L
===========
COMPANHIA SIDERURGICA: Moody's Says Sale Has No Impact Caa1 Rating
-----------------------------------------------------------------
Moody's Investors Service comments that Companhia Siderurgica
Nacional S.A.'s (Caa1 negative) announced sale of Companhia
Metalic Nordeste for USD 98 million (BRL 314 million) is credit
positive because it indicates CSN's commitment to divest assets in
an effort to reduce leverage at a time when tough market
conditions have constrained its operating performance and cash
generation. Nevertheless, the deal has no impact on the ratings or
negative outlook given its relative small size and marginal impact
on credit metrics.
HSBC BANK: S&P Affirms Then Withdraws 'BB/B' Issuer Credit Ratings
------------------------------------------------------------------
S&P Global Ratings affirmed its 'BB/B' global scale issuer credit
ratings on HSBC Bank Brasil S.A. In addition, S&P withdrew the
ratings at issuer's request. At the time of the withdrawal, the
outlook was negative.
On Aug. 3, 2015, HSBC Holdings PLC (A/Negative/A-1) announced the
sale of its Brazilian subsidiary to Banco Bradesco S.A.
(BB/Negative/B) for $5.2 billion. S&P viewed HSBC Bank Brasil as
a core entity of Bradesco, therefore, S&P equalized its ratings to
those of its controlling shareholder.
JALLES MACHADO: S&P Revises Outlook to Pos. & Affirms 'BB-' CCR
---------------------------------------------------------------
S&P Global Ratings revised the outlook on Jalles Machado S.A. to
positive from stable. S&P also affirmed its 'BB-' global scale
and 'brA' national scale corporate credit ratings on the company.
The outlook revision reflects a possible upgrade in the next 12-18
months, stemming from improved liquidity profile due to robust FFO
generation, manageable capex level in the 2018 harvest, and proven
track record of lower leverage ratios even amid downward cycles in
global sugar prices, unfavorable weather conditions, or volatility
of the Brazilian real.
Jalles has posted stronger EBITDA and positive free operating cash
flow (FOCF) which reduced its debt in the past two harvests thanks
to the significant rebound in sugar and ethanol prices since the
middle of 2015. The company has consistently posted above-average
profitability with high productivity at its fields, enabling
Jalles to operate close to full capacity and dilute fixed costs.
An offsetting factor is its still lower scale than those of its
industry peers and other Brazilian companies in the same rating
category, which combined with the lack of track record on
sustaining lower leverage and it's still less than adequate
liquidity. These factors have led S&P to assign a negative
comparable rating analysis.
STATE OF RIO: S&P Lowers ICR to 'CCC-' & Removes from Watch Neg.
----------------------------------------------------------------
S&P Global Ratings lowered its long-term issuer credit rating on
the state of Rio de Janeiro (Rio) to 'CCC-' from 'B-'. At the
same time, S&P lowered its national scale rating on the state to
'brCCC-' from 'brB-'. S&P also removed ratings from CreditWatch
negative, where it placed them on May 30, 2016. The outlook is
negative.
RATIONALE
The downgrade reflects the heightened risk of default given that
S&P now detects more uncertainties over Rio's debt payments coming
due within the next six months. Because of Rio's weak liquidity
position, its capacity to pay the estimated R$2.5 billion in debt
service within the next six months (R$1.5 billion in interest and
around R$1 billion in amortization payment) is doubtful.
Among others debt payments, the state will be facing debt service
totaling R$164 million for its outstanding loan from Credit Suisse
in September and October of 2016, which the federal government
fully guarantees. If Rio misses the payment on this loan on its
due date and S&P don't believe payment is likely within the next
five business days (either by the state or the federal government)
S&P would downgrade the state to 'SD' (selected default).
Out of total debt, Rio owes 67% of it to the federal government,
19% to public banks, and 12% to multilateral lending agencies and
commercial banks as of June 2016. The sovereign guarantees the
majority of Rio's debt. Under the guarantee mechanism, the state
relinquishes ownership on all of its revenue--own tax revenue or
the transfers it's entitled to receive from the central government
according to the constitution, until repayment of the state's debt
has occurred and the central government decides to release the
remaining funds. S&P believes the national treasury will continue
to cover Rio's debt service on time, according to terms and
conditions of the loan contracts. However, if either level of the
government fails to pay the obligation within the stated grace
period (or five business days if there is no stated grace period),
S&P would downgrade Rio to 'SD', according to our General
Criteria: Methodology: Timeliness Of Payments: Grace Periods,
Guarantees, And Use Of 'D' And 'SD' Ratings, Oct. 24, 2013. This
would occur even if the central government makes the payment under
the guarantee mechanism established in the loan contracts.
In addition, the state has several loans from public banks -- the
Brazilian Development Bank (BNDES) and Banco do Brasil. However,
S&P considers all credit lines from these lenders as
intergovernmental transfers because they represent loans from
government-related entities (GREs). S&P don't consider as a
default the failure to pay intergovernmental obligations that a
non-U.S. local and regional government (LRG) owes to either the
central or regional government, or to public-sector enterprises
related to the LRG or to the central government.
The ratings on Rio reflect a deep financial stress, as seen in
fiscal data as of June 2016, a deteriorating cash position, and
greater uncertainty over the state's capacity and willingness to
make full and timely payments on its financial obligations.
However, S&P believes that the institutional framework in Brazil,
though confronting increasing risks, continues to provide support
to Brazilian LRGs including Rio at the current rating level. In
addition, the framework's level of predictability, transparency,
and accountability corresponds to our assessment as evolving and
unbalanced. The prevailing weakening trend in Brazil's
institutional framework reflects its fiscal challenges for
Brazilian states' ability to ensure medium- and long-term fiscal
sustainability.
Between May and July 2016, Rio missed service payments of
guaranteed debt to bilateral and multilateral agencies and the
Brazilian government-owned banks totaling R$535 million. On this
and other similar occasions, the central government stepped in and
serviced debt on Rio's behalf. As long as the intergovernmental
relations in Brazil and agreements continue prioritizing debt
repayment while LRGs adhere to the Fiscal Responsibility Law, S&P
believes the institutional framework isn't likely to deteriorate
further.
The framework that defines intergovernmental relationships in
Brazil displays a wide array of ongoing support mechanisms that
the central government provides to the LRGs. S&P would typically
consider as systemic ongoing support a well-established legal
framework that enables the central government to honor LRG's
financial obligations on a timely basis, either as a direct
transfer to creditors or by providing cash to an LRG prior to
upcoming maturities, or by diverting the latter's cash (either own
revenues or transfers from the central government). As one of the
alternatives, the central government may use the LRG's own revenue
(tax revenue, shared revenue, and transfers), and/or use some of
the transfers owed to the LRG under the general framework; such
latter payment being subsequently deducted from the next
installment. In such cases, S&P views as not a meaningful
distinction whether the central government pays directly to the
creditor (to then be reimbursed by the LRG), or gives support to
the LRG in advance, in order for the LRG to make the payment
directly to the creditor.
S&P had previously stated that it didn't consider missed payments
from a LRG to a non-domestic official entity as a default. Such
statement is inconsistent with S&P's criteria. However, this
hasn't impacted on the rating, given the institutional framework
in Brazil as stated above.
Rio's plummeting liquidity position reflects the deepening of the
state's fiscal crisis, which culminated in the declaration of
financial emergency in early June. At the same time, Rio received
R$2.9 billion in extraordinary support from the federal government
to fund expenses related to the Olympic Games preparation,
particularly for security. This action underscores central
government's support. In the first half of 2016, Rio's revenue
collection declined 22%, widening the operating deficit to 34% of
operating revenue.
S&P expects Rio to continue posting very weak budgetary
performance. S&P estimates that the state's operating deficit
will reach at least R$8.4 billion or 17% of operating revenues in
2016 and maintain similar deficits over the next 12-18 months,
depending on Rio's capacity to implement fiscal reforms. Deficits
after capital expenditures are likely to be close to 21% of total
revenue, depending on the state's capacity to cut and postpone
investments.
S&P views Rio's budgetary flexibility as weak. Although own-
source revenues account for around 90% of the state's operating
revenues, Rio has limited ability to cut expenditures due to high
share of operating spending as well as large-scale infrastructure
projects. According to S&P's base-case scenario for 2016, the
state's budgetary flexibility will remain weak due to difficulties
in controlling operating spending amid an economic recession
that's squeezing Rio's tax revenue collection.
Rio's tax-supported debt is very high, reflecting the decrease in
revenues while debt in absolute terms has remained relatively
unchanged. S&P's base case for 2016 assumes Rio's tax-supported
debt to be about 215% of consolidated operating revenue. The
state owes almost 70% of its debt to the federal government, and
S&P's projections incorporate the potential outcome of the current
debt renegotiation between the central government and LRGs, which
could trim debt service payments of the latter in the next two
years.
Even during a recession, Rio's GDP per capita continues to be
higher than that of other Brazilian states such as Minas Gerais.
Overall, S&P considers Rio's economy as weak compared with that of
international peers. According to S&P's estimates, Rio's GDP per
capita was around $12,817 in fiscal 2015.
Rio has moderate contingent liabilities because most of GREs are
part of the state's budget and debt, including cross-default
clauses in BNDES' debt agreements with GREs. Companhia Estadual de
Aguas e Esgotos, a sewage and water utility, is Rio's largest-
owned entity, which S&P considers as self-supporting.
Liquidity
S&P views the state's liquidity as weak because Rio has no free
cash (cash that's not required to meet daily operating needs or
planned capital costs) and its internal cash flow generation
capability is limited due to a deficit after capital accounts of
about 21% of total revenue in 2016. Because of Rio's weak
liquidity position, S&P views the state's capacity to pay the
estimated R$2.5 billion in debt service within the next six months
as doubtful.
OUTLOOK
The negative outlook on Rio reflects the likelihood of a further
downgrade based on increasing risk of delayed debt service
payments. If either the federal government or Rio fails to make
upcoming debt service payments during the next six months, S&P
would downgrade Rio to 'SD'.
S&P could revise its outlook on the state to stable if risks to
debt servicing were to unexpectedly diminish, combined with a
sustainable financial and fiscal plan that boosts liquidity to
meet debt obligations over the medium term. However, such a
scenario is unlikely in the next six months.
RATINGS LIST
Downgraded; CreditWatch/Outlook Action
To From
Rio de Janeiro (State of)
Issuer Credit Rating CCC-/Neg./-- B-/Watch Neg/--
Brazil National Scale brCCC-/Neg./-- brB-/Watch Neg/--
SUL AMERICA: Fitch Affirms 'BB-' IDR; Outlook Negative
------------------------------------------------------
Fitch Ratings has affirmed Sul America S.A.'s (SASA) Long-Term
Local and Foreign Currency Issuer Default Ratings at 'BB-' and its
Short-Term Local and Foreign Currency IDRs at 'B'. At the same
time, Fitch also affirmed SASA's long-term National Rating at 'AA-
(bra)', short-term National Rating at 'F1+(bra)', and long-term
National Rating of its debentures due 2017, 2019 and 2022 at
'A+(bra)'. The Rating Outlook on SASA's Long-Term IDRs and
National Rating is Negative and mirrors the Negative Outlook of
Brazil's sovereign ratings (Long-Term IDR 'BB'/Outlook Negative).
KEY RATING DRIVERS
The affirmation of SASA's ratings reflects the resilience of its
technical results and other credit metrics to the ongoing economic
downturn in Brazil, its strong and stable franchise led by a
significant presence in the health and auto segments, adequate
liquidity and capitalization, and robust risk management
practices. The rating action also takes into account the
constraints posed by Brazil's sovereign ratings on SASA's IDRs
reflecting the full concentration of its operations in Brazil and
its large Brazilian government securities holdings (approximately
1.9 times its total capital at June 2016).
SASA posted solid premium and contribution growth of 13% in 2015,
compared with sector growth of 12% (both excluding the saving
bonds segment). This enabled it to maintain its ranking as the
second and fourth largest insurer in health and auto insurance
segments, with market shares of 9.5% and 10.3%, respectively, at
year-end 2015. In the first half of 2016, SASA's growth slowed
down sharply in all segments except health, in line with sector
growth. Fitch believes that SASA will maintain its leadership in
its key businesses.
SASA's performance remained adequate and stable through June 2016,
despite the severe recession that has led to a significant
increase in company defaults and deterioration in consumers'
purchasing power. Return on average assets (ROAA) was 3.8% in
2015 and 2.3% at June 2016, compared to an average of 3.1% in 2014
and 2013. This was a result of both solid technical results
(combined ratio was 99% and 101%, respectively, in 2015 and June
2016) and high financial income.
SASA's leverage, measured by the net liabilities/equity ratio, and
operating leverage, measured by net earned premiums/equity, is
higher than peer averages in Latin America. At June 2016, these
stood at 3.4x and 3.3x, respectively, slightly lower than the
levels of a year ago, while financial leverage (debt-to-total
capital) fell to 19% in June 2016 from 24% in December 2015.
Fitch expects leverage to stabilize at the existing levels, but
any continued increase could become a negative rating driver in
the future.
SASA's liquidity remained adequate at June 2016. Its liquid
assets/net technical reserves ratio was 1.13x, up from an average
of 1.11x in 2015-2014. A bank loan of BRL200 million, raised at
end-2015, and proceeds from portfolio sales in 2015, partially
offset debt amortizations that started in 2015.
Exceptional notching for a ring-fenced regulatory environment was
applied between the implied insurance operating company ratings
and holding company IDRs. Notching was compressed by two relative
to standard notching, as sovereign-related risks have so far not
materially affected SASA's key credit metrics.
RATING SENSITIVITIES
In case of an additional downgrade to Brazil's sovereign ratings,
SASA's IDRs would be subject to a review that could result in a
range of rating actions from affirmation to a two notch downgrade
based on Fitch's insurance rating criteria that allows flexibility
on how sovereign considerations are factored into insurance rating
notching. The ultimate decision would be driven by the rationale
for the sovereign rating action and Fitch's view of how this
impacts SASA's operating environment, investment risk and overall
creditworthiness.
In addition, a sustained and material deterioration in
profitability, characterized by an ROAA below 0.5%; the
deterioration of the liabilities/equity ratio to above 5.0x; an
increase in the financial leverage to above 25% for a sustained
period; a fall in the interest coverage ratio to below 3.0x; or a
significant reduction in the holding's liquidity, could negatively
affect the ratings.
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C A Y M A N I S L A N D S
==========================
ANDOR MASTER: Shareholder to Hear Wind-Up Report on Sept. 6
-----------------------------------------------------------
The shareholder of Andor Opportunity Master Fund Ltd will hear on
Sept. 6, 2016, at 11:00 a.m., the liquidator's report on the
company's wind-up proceedings and property disposal.
The company's liquidator is:
Andor Capital Management, LLC
c/o Joanne Huckle
Ogier, Attorneys
89 Nexus Way, Camana Bay
Grand Cayman KY1-9009
Cayman Islands
Telephone: +1 (345) 949 9876
Facsimile: +1 (345) 949 9877
ANDOR OPPORTUNITY: Shareholder to Hear Wind-Up Report on Sept. 6
----------------------------------------------------------------
The shareholder of Andor Opportunity Offshore Fund Ltd will hear
on Sept. 6, 2016, at 11:15 a.m., the liquidator's report on the
company's wind-up proceedings and property disposal.
The company's liquidator is:
Andor Capital Management, LLC
c/o Joanne Huckle
Ogier, Attorneys
89 Nexus Way, Camana Bay
Grand Cayman KY1-9009
Cayman Islands
Telephone: +1 (345) 949 9876
Facsimile: +1 (345) 949 9877
BEDFORD INVESTMENT: Shareholder to Hear Wind-Up Report on Sept. 19
------------------------------------------------------------------
The shareholder of Bedford Investment Fund will hear on Sept. 19,
2016, at 10:00 a.m., the liquidator's report on the company's
wind-up proceedings and property disposal.
The company's liquidators are:
EFG Capital Advisors, Inc.,
c/o Tim Cone
Telephone: +1 (345) 949 9876
Facsimile: +1 (345) 949 9877
FROG'S BREATH: Shareholder to Hear Wind-Up Report on Sept. 16
-------------------------------------------------------------
The shareholder of Frog's Breath Holdings Limited will hear on
Sept. 16, 2016, at 10:00 a.m., the liquidator's report on the
company's wind-up proceedings and property disposal.
The company's liquidators are:
Fiona Crellin
c/o Samantha Powell
Equitas Limited
Clifton House, 75 Fort Street
P.O. Box 1350 Grand Cayman KY1-1108
Cayman Islands
GRANT INTERNATIONAL: Member to Hear Wind-Up Report on Sept. 16
--------------------------------------------------------------
The member of Grant International Holdings Limited will hear on
Sept. 16, 2016, at 10:00 a.m., the liquidator's report on the
company's wind-up proceedings and property disposal.
The company's liquidators are:
Fiona Crellin
c/o Samantha Powell
Equitas Limited
Clifton House, 75 Fort Street
P.O. Box 1350 Grand Cayman KY1-1108
Cayman Islands
GRAYS PEAK: Shareholders' Final Meeting Set for Oct. 10
-------------------------------------------------------
The shareholders of Grays Peak Fund Ltd. will hold their final
meeting on Oct. 10, 2016, at 11:00 a.m., to receive the
liquidator's report on the company's wind-up proceedings and
property disposal.
The company's liquidator is:
Highwater Limited
c/o Nicole Gagliano
Telephone: (345) 943 2295
Facsimile: (345) 943 2294
Grand Pavilion Commercial Centre, 1st Floor
802 West Bay Road
P.O. Box 31855, Grand Cayman, KY1-1207
Cayman Islands
GRAYS PEAK MASTER: Members' Final Meeting Set for Oct. 10
---------------------------------------------------------
The members of Grays Peak Master Fund LP will hold their final
meeting on Oct. 10, 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:
Highwater Limited
c/o Nicole Gagliano
Grand Pavilion Commercial Centre
1st Floor, 802 West Bay Road
P.O. Box 31855 Grand Cayman KY1-1207
Cayman Islands
Telephone: (345) 943 2295
Facsimile: (345) 943 2294
GUGGENHEIM ADVISORS: Shareholders' Final Meeting Set for Sept. 12
-----------------------------------------------------------------
The shareholders of Guggenheim Advisors EOF (Cayman) Ltd. will
hold their final meeting on Sept. 12, 2016, to receive the
liquidator's report on the company's wind-up proceedings and
property disposal.
The company's liquidator is:
Jean Ebanks
c/o Jane Fleming or Jean Ebanks
Queensgate Bank and Trust Company Ltd.
103 Harbour Place
South Church Street, George Town
P.O. Box 30464 Grand Cayman KY1-1202
Cayman Islands
Telephone: (345) 945-2187
Facsimile: (345) 945-2197
GUGGENHEIM PORTFOLIO VIII: Shareholders' Meeting Set for Sept. 12
-----------------------------------------------------------------
The shareholders of Guggenheim Portfolio Company VIII (Cayman)
Ltd. will hold their final meeting on Sept. 12, 2016, to receive
the liquidator's report on the company's wind-up proceedings and
property disposal.
The company's liquidator is:
Jean Ebanks
c/o Jane Fleming or Jean Ebanks
Queensgate Bank and Trust Company Ltd.
103 Harbour Place
South Church Street, George Town
P.O. Box 30464 Grand Cayman KY1-1202
Cayman Islands
Telephone: (345) 945-2187
Facsimile: (345) 945-2197
GUGGENHEIM PORTFOLIO XXXVI: Shareholders' Meeting Set for Sept. 12
------------------------------------------------------------------
The shareholders of Guggenheim Portfolio Company XXXVI (Cayman)
Ltd. will hold their final meeting on Sept. 12, 2016, to receive
the liquidator's report on the company's wind-up proceedings and
property disposal.
The company's liquidator is:
Jean Ebanks
c/o Jane Fleming or Jean Ebanks
Queensgate Bank and Trust Company Ltd.
103 Harbour Place
South Church Street, George Town
P.O. Box 30464 Grand Cayman KY1-1202
Cayman Islands
Telephone: (345) 945-2187
Facsimile: (345) 945-2197
PLATINUM PROPERTIES: Court Hears Petition to Wind Up
----------------------------------------------------
The Grand Court of Cayman Islands heard on Aug. 23, 2016, a
petition to wind up the operations of Platinum Properties Value
Arbitrage Fund (International) Limited.
The petition was filed by Parris Investments Limited. The
petition seeks an order that Matthew James Wright and Christopher
Barnett Kennedy be appointed as official liquidators of the
company.
WREN LIMITED: Member to Hear Wind-Up Report on Sept. 6
------------------------------------------------------
The member of Wren Limited will hear on Sept. 6, 2016, at
12:16 p.m., the liquidator's report on the company's wind-up
proceedings and property disposal.
The company's liquidator is:
Susan Lo Yee Har
c/o Desmond Chisholm
Hopewell Centre, Level 54
1 83 Queen's Road East
Hong Kong
Telephone: (345) 814 5469
Facsimile: (345) 949 8080
=============
J A M A I C A
=============
* JAMAICA: PIOJ Predicts Continued Strengthening of Economy
-----------------------------------------------------------
RJR News reports that the Planning Institute of Jamaica (PIOJ)
says the outlook for the Jamaican economy is positive.
For the July to September quarter, growth is projected at 0.5 to
1.5 per cent, according to RJR News.
The PIOJ says continued strengthening in the performance of most
sectors within the Goods Producing and Services Industries is
expected, and will be supported by improved investment prospects
and increased investor confidence, the report notes.
However, Dr. Wayne Henry, Director-General of the PIOJ, has
cautioned that threats from possible weather-related shocks could
derail growth, the report relays.
Meanwhile, the Planning Institute says agriculture as well as the
electricity and water supply sectors were key contributors to the
1.1 per cent economic growth for the April to June quarter this
year, the report notes.
This was due mainly due to favorable weather conditions and the
strengthening of the global economy, adds the report.
* * *
As reported in the Troubled Company Reporter-Latin America on
Feb. 15, 2016, Fitch Ratings has upgraded Jamaica's Long-term
foreign and local currency IDRs to 'B' from 'B-' and revised the
Rating Outlooks to Stable from Positive. In addition, Fitch
upgraded Jamaica's senior unsecured Foreign- and Local-Currency
bonds to 'B' from 'B-'. The Country Ceiling has been affirmed at
'B' and the Short- Term Foreign-Currency IDR affirmed at 'B'.
=================
N I C A R A G U A
=================
NICARAGUA: Fitch Affirms 'B+' Issuer Default Rating
---------------------------------------------------
Fitch Ratings has affirmed Nicaragua's Long-Term Foreign and Local
Currency Issuer Default Ratings (IDRs) at 'B+' with a Stable
Outlook. The Country Ceiling is affirmed at 'B+'. The Short-Term
Foreign and Local Currency IDRs are affirmed at 'B'.
KEY RATING DRIVERS
Nicaragua's credit ratings are underpinned by its positive
economic growth trend, track record of prudent fiscal policy and
debt reduction, and consistent exchange rate and fiscal policies
that have supported macroeconomic improvement and declining
inflation since the mid-1990s. The ratings are constrained by
structural weaknesses including low per capita income, a shallow
domestic capital market, social and governance indicators, and
external vulnerabilities.
Nicaragua maintains a disciplined fiscal policy. Fitch expects
the general government to post a 1.1% of GDP overall deficit and a
primary balance in 2016, after a primary surplus of 0.1% of GDP in
2015. Successive Nicaraguan administrations have delivered a
track record of primary surpluses over the past 25 years as well
as timely tax and expenditure adjustment. Government revenues are
growing faster than the economy during 2014-2016 to 25.5% of GDP
in 2016 greater than the 'B' median, supporting expenditure
growth. The sovereign demonstrates greater predictability of
fiscal policy through the election cycle than most 'B'-rated
peers.
General government debt is projected to decline, to 41.2% of GDP
in 2016 below the 'B' median at 52.4% of GDP, due primarily to the
retirement of domestic debt held by the central bank and privately
held historical compensation bonds. The interest burden is low
and sustainable at 4.3% of revenues in 2016-2017. The foreign
currency share of general government debt is high at 81.9% in 2016
above the 'B' median of two-thirds, although the concessional
nature of most of Nicaragua's external debt reduces refinancing
risks. Expanded access to multilateral and official financing is
expected to cover the government's USD242 million external
financing needs Fitch forecasts for 2016.
Growth is forecast to moderate from 4.5% in 2016 to 4.0% in 2018.
This reflects rising oil prices, slowing credit growth, the
expectation that gradually rising USD interest rates and weak
economic conditions in key bilateral partners will constrain
foreign investment (we forecast net FDI conservatively at around
5.5% of GDP in 2016-2018) and loan financing flows to the private
sector. Nicaragua's five-year average growth of 4.8% exceeds the
'B' median, supported by increased investment, economic and export
diversification as well as relative security and lower labor costs
than regional peers. Low oil prices spurred a pick-up in
construction and consumption in 2015, contributing to 4.9%
economic expansion. Construction and credit growth slowed in the
first half of 2016 (1H16).
Inflation dropped to a record-low average 4.0% in 2015 driven by
low oil prices, and average consumer prices are expected to rise
by just 3.8% in 2016. Headline and core inflation were 4.11% and
3.89% year-over-year (yoy), respectively, in July. Inflation
expectations are anchored to the crawling exchange rate peg to the
USD with 5% annual depreciation. However, Nicaragua's
vulnerability to food and energy price shocks contributes, in
part, to the country's higher 5.6% five-year average inflation
than the 'B' median of 4.5%.
Nicaragua's governance indicators are in line with the 'B' median.
Political developments during June-August point to the
consolidation of power over the governing Sandinista National
Liberation Front (FSLN) party and government institutions by
President Daniel Ortega, in Fitch's opinion. Several opposition
legislators were dismissed from the National Assembly, the
president and vice presidential candidates of the minority
opposition party coalition were disqualified for upcoming
elections on Nov. 6, 2016, and the leader of the largest
opposition party removed by judicial institutions. The FSLN
nominated the First Lady to be the vice presidential candidate.
Some opposition parties may boycott the election.
Fitch expects a third consecutive term for President Ortega would
support continuity in economic policy. Nicaragua's macroeconomic
policy framework has been broadly consistent across two decades
and administrations of opposite ideological leanings, and through
economic and political cycles. The government's consultative
mechanism with the private sector on economic policymaking
continues to function and financial system deposits are stable.
The impact of political events on investor expectations is too
early to discern.
Nicaragua's external finances remain vulnerable to shocks. The
large current account deficit (CAD), expected to rise from 7.8% of
GDP in 2016 to 8.5% of GDP in 2018, is financed primarily with
foreign direct investment (FDI). The CAD plus net FDI is forecast
at 2.0% of GDP in 2016, on par with the 'B' median. Net external
debt at 50.6% of GDP in 2015 exceeds the 'B' median at 21.2% of
GDP. The Heavily Indebted Poor Countries (HIPC) initiative has
lowered public external debt but PetroCaribe financing has driven
private-sector net external debt to 30.8% of GDP in 2015.
External interest payments are low at 3.4% of CXR in 2016.
Financial dollarization is among the highest in the rating
category, at 73% of deposits.
The central bank has strengthened its external liquidity, raising
international reserves to four months CXP and maintains a USD200
million contingent liquidity line from the Central American Bank
for Economic Integration (BCIE). Nicaragua's international
liquidity ratio, estimated at 220% for 2016, is stronger than the
'B' median, and its gross external financing needs have remained
less than international reserves since 2009.
SOVEREIGN RATING MODEL (SRM) and QUALITATIVE OVERLAY (QO)
Fitch's proprietary SRM assigns Nicaragua a score equivalent to a
rating of 'B' on the Long-Term FC IDR scale. Fitch's sovereign
rating committee adjusted the output from the SRM to arrive at the
final Long-Term FC IDR by applying its QO, relative to rated
peers, as follows:
-- Public finances: +1 notch, to reflect Nicaragua's track
record of prudent public financial management that has
supported improving macro conditions and domestic debt
reduction.
Fitch's SRM is the agency's proprietary multiple regression rating
model that employs 18 variables based on three year centred
averages, including one year of forecasts, to produce a score
equivalent to a Long-Term FC IDR. Fitch's QO is a forward-looking
qualitative framework designed to allow for adjustment to the SRM
output to assign the final rating, reflecting factors within our
criteria that are not fully quantifiable and/or not fully
reflected in the SRM.
RATING SENSITIVITIES
The main factors that could, individually or collectively, lead to
a rating action are:
Negative:
-- Political developments that undermine growth prospects,
external financing, and policy continuity;
-- Weakening of the external balance sheet and/or external
liquidity, potentially reflecting a reduction in
effectiveness of the crawling peg exchange rate regime;
-- Deterioration of public financial management and government
debt dynamics;
-- Emergence of increased macroeconomic imbalances or financial
instability.
Positive:
-- Sustained improvement in structural weaknesses, including
stronger governance and social indicators, as well as a more
robust business environment;
-- Faster growth that reduces Nicaragua's per-capita income gap
relative to peers;
-- Sustained reduction of external vulnerabilities.
KEY ASSUMPTIONS
-- Fitch forecasts that U.S. economic growth of 1.8% in 2016
and 2.1% in 2017 (lower than our last review) will support
Nicaragua's economic growth and external accounts, given the
strong trade and financial linkages between the two
countries. Economic and fiscal challenges in Venezuela and
Brazil will restrict foreign investment and project
financing from these countries during 2016. Fitch does not
factor development of the proposed interoceanic canal into
its economic forecasts.
-- Fitch's latest projections also factor in adjustment of the
average Brent oil price to USD35 in 2016 and USD45 per
barrel in 2017, maintaining reductions of the fuel imports
and effective electricity and transportation subsidies.
======================
P U E R T O R I C O
======================
SPORTS AUTHORITY: Renewed Bonus Plan Provokes Protest
-----------------------------------------------------
Peg Brickley, writing for The Wall Street Journal Pro Bankruptcy,
reported that federal bankruptcy watchdog, Andrew Vara, filed a
protest to Sport Authority's amended bonus proposal for its top
executives.
According to the report, Sports Authority is back with a demand
for up to $1.5 million in bonuses to wrap up the final stages of a
bankruptcy that closed hundreds of stores and cost thousands of
jobs, but Mr. Vara is back, too, with a protest similar to the
objection that scuttled Sports Authority's original bonus
proposal.
Mr. Vara, a U.S. Trustee, said in court papers that the defunct
retailer is "prioritizing insider executives above all other
parties in interest, including unsecured creditors and the
thousands of employees who have already lost their jobs," the
report related.
The revised bonus program for the failed Englewood, Colo.,
retailer and the renewed objection from Mr. Vara set the stage for
round two of a battle over bonuses for top insiders in bankruptcy,
the report further related.
The Troubled Company Reporter, citing Bankruptcy Law360, reported
that U.S. Bankruptcy Judge Mary F. Walrath gave Sports Authority
the nod on Aug. 2, 2016 for a settlement that resolves both a rent
fight with landlords and unsecured creditors' bid to convert the
case to Chapter 7, but rejected a move to pay the Company's
executives up to $2.8 million in bonuses.
During a hearing in Wilmington, U.S. Bankruptcy Judge Mary F.
Walrath ruled that the plan to award certain Sports Authority
executives bonuses would be an improper transfer of estate
property to insiders.
About Sports Authority Holdings
Sports Authority Holdings, et al., are sporting goods retailers
with roots dating back to 1928. The Debtors currently operate 464
stores and five distribution centers across 40 U.S. states and
Puerto Rico. The Debtors offer a broad selection of goods from a
wide array of household and specialty brands, including Adidas,
Asics, Brooks, Columbia, FitBit, Hanesbrands, Icon Health and
Fitness, Nike, The North Face, and Under Armour, in addition to
their own private label brands. The Debtors employ 13,000 people.
Sports Authority and six of its affiliates filed Chapter 11
bankruptcy petitions (Bankr. D. Del. Case Nos. 16-10527 to
16-10533) on March 2, 2016. The petitions were signed by Michael
E. Foss as chairman & chief executive officer.
The Debtors have engaged Gibson, Dunn & Crutcher LLP as general
counsel, Young Conaway Stargatt & Taylor, LLP as co-counsel,
Rothschild Inc. as investment banker, FTI Consulting, Inc., as
financial advisor and Kurtzman Carson Consultants LLC as notice,
claims, solicitation, balloting and tabulation agent.
Andrew Vara, Acting U.S. trustee for Region 3, appointed seven
creditors of Sports Authority Holdings Inc. to serve on the
official committee of unsecured creditors. Lawyers at Pachulski
Stang Ziehl & Jones LLP represent the Official Committee of
Unsecured Creditors.
***********
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 * * *