/raid1/www/Hosts/bankrupt/TCRLA_Public/170228.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
L A T I N A M E R I C A
Tuesday, February 28, 2017, Vol. 18, No. 42
Headlines
A R G E N T I N A
FBA RENTA: Moody's Assigns 'B-bf' Global Scale Bond Fund Rating
STONEWAY CAPITAL: Fitch Rates $500MM Senior Secured Notes at 'B'
B R A Z I L
AUTOVIAS SA: Moody's Assigns Ba2 GS Rating to BRL100MM Debentures
BANCO DAYCOVAL: S&P Affirms 'BB-/B' ICRs; Outlook Remains Negative
CENTROVIAS SISTEMAS: Moody's Assigns Ba3 Corporate Family Rating
CONCESSIONARIA DE RODOVIAS: Moody's Affirms Ba2 Sr. Unsec. Rating
MASISA SA: S&P Affirms B+ CCR on Weaker-Than-Expected Performance
ULTRAPAR PARTICIPACOES: Moody's Affirms Ba1 CFR; Outlook Negative
VIANORTE SA: Moody's Affirms Ba3 Corp. Family Rating
C A Y M A N I S L A N D S
AES OCEAN: Shareholders Receive Wind-Up Report
ALLIANCE SPRINT: Shareholders Receive Wind-Up Report
ALTEDGE DIVERSIFIED: Shareholders Receive Wind-Up Report
ANDEAN CAPITAL: Shareholder Receives Wind-Up Report
ANDEAN CAPITAL MANAGEMENT: Shareholder Receives Wind-Up Report
ANDEAN CAPITAL (GP): Shareholders Receive Wind-Up Report
BORDEAUX WINE: Shareholders Receive Wind-Up Report
FREEDOM KEY: Members Receive Wind-Up Report
GC CAYMAN: Shareholders Receive Wind-Up Report
LAWRENCE CLARKE: Shareholders Receive Wind-Up Report
J A M A I C A
CABLE & WIRELESS: Liberty Global Still Awaiting Regulatory Review
M E X I C O
CONSUBANCO SA: Fitch Affirms 'BB' Issuer Default Ratings
CREDITO REAL: Fitch Affirms 'BB+' IDRs; Outlook Stable
MEXICO: Top U.S. Officials Met With Defiance in Visit to Mexico
MEXICO: Talks with U.S. Clouded by Mixed Message
P U E R T O R I C O
PUERTO RICO: Governor Says Years Needed to Fix Island Budget
S U R I N A M E
SURINAM AIRWAYS: Lack of Bilateral Deal Affecting Profitability
X X X X X X X X X
LATAM: CDB, IDB Sign Agreement to Foster Caribbean Development
- - - - -
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A R G E N T I N A
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FBA RENTA: Moody's Assigns 'B-bf' Global Scale Bond Fund Rating
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Moody's Latin America Agente de Calificacion de Riesgo has
assigned bond fund ratings to FBA Renta Pesos Plus FCI (the Fund),
a new short term bond fund domiciled in Argentina and managed by
BBVA Frances Asset Management S.A FGCI.
The ratings assigned are:
- Global scale bond fund rating: B-bf
- National scale bond fund rating: Aa-bf.ar
RATINGS RATIONALE
The bond fund ratings are based on Moody's expectation that the
fund will largely invest Term Deposits (both, callable or not),
and Local Central Bank REPOs, all denominated in local currency.
The Fund's average duration is not expected to exceed 30 days.
The rating agency noted that FBA Renta Pesos Plus is a new fund
with few track record, but managed by an experienced investment
manager. Moody's analysis was performed on a model portfolio
provided by the fund sponsor. The rating agency expects the fund
to be managed in line with this portfolio. However, Moody's noted
that if the fund's portfolio deviates materially from the rated
portfolio, the fund's ratings could change.
"Based on the Fund's portfolio, the Fund's credit quality profile
is consistent with other Time Deposit rated funds", said Assistant
Vice President Carlos de Nevares.
BBVA Frances AM., is an Argentina-domiciled subsidiary of Grupo
Financiero BBVA Banco Frances. As of January 2017, BBVA Frances AM
managed investments of approximately AR$ 21,938 million(
approximately $1,388.5 million.)
STONEWAY CAPITAL: Fitch Rates $500MM Senior Secured Notes at 'B'
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Fitch Ratings has assigned a rating of 'B' to Stoneway Capital
Corporation's $500 million senior secured notes due 2027. The
Rating Outlook is Stable.
Proceeds from the notes, together with $136.5 million in equity
funded at closing, will be used to pay engineering, procurement,
construction and development costs of four power plants, land
purchase and rental costs and provide the initial funding of the
interest during construction (IDC) Account. Of the total equity
$115 million has been financed by the Sponsor through a loan under
a credit facility from Siemens Financial Services, Inc.
The rating reflects Stoneway's power purchase agreement (PPA) with
sole off-taker CAMMESA, moderate operating risks established
through fixed-priced operation and maintenance (O&M) and overhaul
costs with an experienced counterparty, and the project's pre-
completion status mitigated through a fixed-price engineering,
procurement, construction (EPC) agreement signed with Siemens
Energy Inc.
The project benefits from an adequate debt structure, with fixed
interest rate, adequate covenants and reserves. While DSCR results
are consistent with a higher rating category, the rating is
ultimately capped by Fitch's view on the credit quality of the
revenue stream derived through payments by CAMMESA as sole off-
taker and Argentina's 'B' country ceiling.
KEY RATING DRIVERS
Low Complexity of Works; Fixed Price, Date-Certain EPC Agreement
[Completion Risk: Midrange]:
The greenfield project benefits from individual full EPC turnkey-
lump sum contracts with a strong counterparty (Siemens) and other
contractors on a joint and several basis. The simple-cycle
technology nature of the oil & gas thermal plants is considered as
low complexity and scale, with the technology widely established.
Contract terms and scope are adequate and encompass all needed
activities, delivery date of Dec. 1, 2017 is challenging but
achievable, liquidated damages (LDs) provisions and delivery dates
are in line with PPA obligations, and funded contingencies are
approximately 5% of EPC costs. Delay risks that lead to PPA
termination (+180 days delayed) are viewed as very unlikely due to
the low complexity of works, contractor expertise, and adequate
LDs.
Experienced Operator and Defined Overhaul Costs [Operations Risk:
Midrange]:
All four plants benefit from O&M agreements and long-term services
agreements (LTSAs) with Siemens S.A. for the entire tenor of the
debt. Plants benefit from a defined overhaul routine with fixed
prices for up to 60,000 hours (Las Palmas/San Pedro plants) and
75,000 hours (Lujan/Matheu plants), which is consistent with the
high dispatch scenario expected. Weaknesses of contract structure
are the exposure to foreign exchange (FX) risk, as a major part of
the O&M fixed fee is denominated in Argentine pesos (ARS), and
LTSAs for Las Palmas/San Pedro plants are in Swedish kronas (SEK),
and expected to be hedged only after the commercial operations
date (COD). Nevertheless, the project can withstand a very high
increase in the overhaul routines denominated in SEKs of 171.6%,
or an appreciation of ARS to the order of 400%.
Supply Risk Embedded in the Offtake Agreement [Supply Risk:
Midrange]:
Both oil and gas will be fully supplied by CAMMESA, the project's
sole off-taker. As per the PPA, in case of any supply failure the
project is not obligated to dispatch and still receives its fixed
capacity payment.
Weak Counterparty with Sufficient Capacity Payments [Revenue Risk:
Weaker]:
The project's sole off-taker is CAMMESA, the wholesale power
market administrator in Argentina. CAMMESA is considered to be a
counterparty with a weak financial profile and is dependent on
sovereign subsidies to honor its commitments. Most of the
project's revenues will come from fixed capacity payments that
cover fixed costs and debt service. The project also benefits from
a one-year tail on its PPA.
Adequate Debt Structure with Overhaul Provisions [Debt Structure:
Stronger]:
The fixed-rate debt is fully amortizing and senior ranking, and
benefits from a six-month debt service reserve account (DSRA),
which will be funded with cash generation, and a 1.40x DSCR
distribution test. The debt structure includes an O&M reserve
account, which accumulates overhaul provisions whenever the
project is dispatched and will be used to make scheduled major
maintenance payments. Additional debt can only be issued with a
rating confirmation after giving pro forma effect to such new
debt.
Low Leverage with Strong Credit Metrics:
The project presents very low leverage, with the rating case,
which considers a higher dispatch scenario, yielding debt/EBITDA
of 3.5x in 2018, the first full year of operations, deleveraging
to 2.6x in 2021. Rating case minimum and average DSCRs of 1.15x
and 1.55x are consistent with higher ratings. In addition, the
project also presents very strong breakevens: (i) 171.6% increase
in overhaul linked to the SEK, (ii) 375% increase on O&M costs
linked to the ARS and (iii) 370% increase in SG&A costs.
Rating Constrained at Country Ceiling:
Revenues are indexed to the USD but received in ARS. The project
is therefore exposed to transfer and convertibility risks. The
rating is ultimately constrained by Argentina's 'B' country
ceiling.
Peer Analysis:
The transaction's rating is capped by the credit quality of the
off-taker and the country ceiling of Argentina. There are no other
transactions in Fitch's Latin American portfolio with a similar
profile.
Criteria Variation:
For this transaction, a criteria variation to the 'Rating Criteria
for Infrastructure and Project Finance,' dated July 8, 2016, is
being applied with respect to the section 'Contractor Rating and
Credit Enhancement' in 'Appendix 1 - Completion Risk in Project
Finance.' The criteria does not specify which Issuer Default
Rating (IDR) should be used for the contractor rating in the case
of important subsidiaries of strong global or regional
multinational companies, with a solid reputation and widely
recognized expertise in a certain sector or industry. The
variation considers that when a regional or country subsidiary of
a multinational corporation that meets the aforementioned
conditions and is part of a strategic business line of such
multinational company is a contractual counterparty of an EPC
agreement, the IDR that will be used for the purposes of the
completion risk analysis will be the one of the ultimate parent
company.
Siemens Energy Inc., counterparty to the EPC agreement, is the
U.S.-based subsidiary of Siemens AG which consolidates the power
and gas business unit for Siemens A.G. ('A'/Outlook Stable) for
the Americas. The Americas segment represents +30% of total
Siemens A.G. consolidated revenues. The Power and Gas business
line, which Siemens Energy Inc. ultimately reports to, is the
largest revenue contributor, with over EUR16 billion in sales in
2016.
For purposes of the contractor IDR under the 'Contractor Rating
and Credit Enhancement' section of the 'Rating Criteria for
Infrastructure and Project Finance', this analysis considers
Siemens A.G.'s 'A'/Outlook Stable IDR.
RATING SENSITIVITIES
Positive
-- An improvement in the credit quality of CAMMESA as sole off-
taker to the revenue stream combined with an upgrade of
Argentina's country ceiling could result in a positive rating
action.
Negative
-- Deterioration in the credit quality of CAMMESA as sole off-
taker to the revenue stream and/or a downgrade of Argentina's
country ceiling could result in negative rating action;
-- Significant delays in the completion schedule which could
ultimately lead to the possibility of PPA cancellation could lead
to a negative rating action;
-- Delays from CAMMESA on the PPA payments leading to a
deterioration of the project's liquidity could lead to a negative
rating action;
-- Although unlikely in the near term, significant appreciation
of the Argentine peso, leading to an increased share of contracted
O&M expenses as a percentage of revenues, and consequently,
deteriorating DSCRs.
The notes are senior and secured by a first-priority security
interest on all existing and future tangible and intangible
assets, including but not limited to all physical assets of the
project, all inventory, machinery and equipment and all accounts,
real estate rights under land agreements.
TRANSACTION SUMMARY
Stoneway is a private company constituted with the purpose of
constructing, owning and operating four simple-cycle power-
generating plants with a total installed capacity of 686.5MW,
through two indirect subsidiaries, Araucaria Energy S.A.
(Araucaria) and SPI Energy S.A. (SPI).
Stoneway thermal plants will be dual-fired and will utilize diesel
& heavy fuel oil or natural gas to provide electricity to the
wholesale electricity market in Argentina. Each of these plants
benefits from 10-year PPAs with CAMMESA the Argentinean entity in
charge of the management of the wholesale market and the dispatch
of electricity to the country's power grid.
PPAs are USD-denominated and have a fixed price based on
contracted capacity and a variable charge; the majority of the
project's revenues are anticipated to be derived from fixed
capacity payments. Under the terms of the PPAs, plants are
required to achieve a commercial operation date (COD) by Dec. 1,
2017. If COD is not attained within 180 days of Dec. 1, 2017, the
PPAs shall be automatically terminated without the need of any
notice whatsoever and without the right of any claim of any kind.
Maximum delay penalties as per PPA are fully covered by a
performance bond placed by the sponsor.
Two out of the four plants will be constructed by a consortium of
Siemens Energy, Inc., Siemens S.A. and affiliates of Duro Felguera
S.A.; the other two plants will be constructed by a consortium of
Siemens Energy, Inc., Siemens S.A., SoEnergy International Inc.
and SoEnergy Argentina S.A. Each plant has individual EPCs on a
turn-key basis.
Stoneway has also engaged individual O&M Contracts with Siemens
S.A. to perform the services necessary for the proper O&M of the
plants, and long-term maintenance contracts with Siemens Energy,
Inc. and Siemens Industrial Turbomachinery AB, for the annual
inspections and overhaul routines of the engines. All contracts
cover the tenor of the debt.
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B R A Z I L
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AUTOVIAS SA: Moody's Assigns Ba2 GS Rating to BRL100MM Debentures
-----------------------------------------------------------------
Moody's America Latina has assigned ratings of Ba2/Aa2.br
(respectively, in global scale and Brazil's national scale) to
Autovias S.A.'s planned BRL100 million senior secured debentures
due in 2019. Moody's also affirmed Autovias' senior unsecured and
senior secured ratings at Ba2/Aa2.br. At the same time, Moody's
assigned a Ba2/Aa2.br corporate family rating (CFR) to Autovias
and withdrew its Ba2/Aa2.br issuer rating. The outlook remains
negative.
Autovias will issue senior secured debentures in March 2017 to
fund working capital needs and capital investments. The debentures
will have a 18-month tenor and two principal payments, 50% twelve
months after issuance and the remaining at maturity. Interest
payments will occur every three months following issuance. The
debentures will have cross-default clauses with other debt at
Autovias and will include acceleration clauses such as: (i) the
non-payment of any financial obligation above BRL 7 million, (ii)
change of control and termination of the concession contract (iii)
granting intercompany loan or issuing new debt, (iv) dividend
payments above the minimum required by Brazilian Corporate Law if
the company is not in compliance with its obligations including
financial covenants (v) covenant breach by the issuer considering
a Net Debt/(EBITDA -- Fixed Concession Fee) equal or below 1.6x
until Sep/2017, 1.3x until Dec/2017 and 1.0x until the maturity
date and DSCR equal or above 1.20x and (vi) covenant breach by the
parent, Arteris S.A. ("Arteris", not rated) considering a Net
Debt/(EBITDA -- Fixed Concession Fee) equal or below 4.25x.
This debenture issuance will benefit from a corporate guarantee
from Arteris starting from August 2017 (after the current
outstanding debentures due date) up to maturity. Other Autovias'
debentures do not benefit from a similar guarantee. In Moody's
opinion a ratings differentiation is not warranted at this point
as Moody's considers the company will adequately meet its
obligations.
The assigned ratings are based on preliminary documentation.
Moody's does not anticipate changes in the main conditions that
the debentures will carry. Should issuance conditions and/or final
documentation deviate from the original ones submitted and
reviewed by the rating agency, Moody's will assess the impact that
these differences may have on the ratings and act accordingly.
RATINGS RATIONALE
The Ba2/Aa2.br rating reflects the strong asset features of
Autovias' road system, which is located in a relatively small but
well-developed and economically diversified region in the State of
Sao Paulo (Ba2, negative). Moody's expects the company's credit
metrics to remain strong for the rating category until the end of
the concession given its mature nature. The strong ultimate
shareholders further support the ratings.
On the other hand, the ratings are constrained by (i) the traffic
profile concentrated on heavy vehicles, which are more volatile
and highly correlated with GDP performance; (ii) short remaining
life of concession, that matures in 2019; (iii) track record of
high dividend; (iv) relatively tight liquidity to fund parent
company investment activity with still remaining amount of
intercompany loans to be received from Arteris. Brazil's sovereign
rating also constrains Autovias' rating. The negative outlook
reflects the domestic nature of the company's operations which are
exposed to the domestic economic conditions.
Our analysis does not consider a renewal or extension of the
concession or any reimbursements from the Government of the State
of Sao Paulo for the non-depreciated assets, as embedded in the
concession contract.
What Could Change the Rating -- Up/ Down
The company's ratings and outlook are constrained by the sovereign
rating given the domestic nature of the company's operations,
therefore a stabilization of Brazil's rating could also lead to a
stabilization of Autovias' outlook.
A downgrade of Brazil's sovereign rating could exert downward
pressure on Autovias' rating. A rapid or significant downturn in
the company's credit metrics could also prompt a rating downgrade
as well as the degradation of the liquidity and overall credit
quality of Arteris. A deterioration in the supportiveness of the
concession and regulatory framework could also prompt a downward
action. Moody's also assume that neither Arteris nor any of its
subsidiaries will incur new debt containing cross default
provisions that could affect Autovias' ratings.
Autovias is an operating subsidiary of Arteris, a holding company
with approximately 3,250 kilometers of operating toll roads under
concession in Brazil, consisting of four concessions in the State
of Sao Paulo and five federal concessions in the States of Sao
Paulo (Ba2, negative), Minas Gerais (B1, negative), Rio de Janeiro
(not rated), Parana (Ba3, negative) and Santa Catarina (not
rated). The combined tolled traffic was 487 million equivalent
vehicles (VEQ) in the first nine months of 2016, presenting a 4.5%
decrease on an accumulated basis mainly driven by the federal
concessions performance which fell 4.9% while state concessions
fell -3.5%. In the last twelve months ending in September 2016,
Autovias' revenues and EBITDA represented 14% and 17% of Arteris
consolidated results, respectively, as Autovias reported net sales
of BRL 319 million and EBITDA of BRL263 million as per Moody's
standard adjustments.
Autovias is indirectly controlled by Abertis Infraestructuras S.A.
(Abertis, not rated) and by Brookfield Brazil Motorways Holdings
SRL, (Brookfield Brazil, not rated) through their respective
ownerships of 51% and 49% in Participes en Brasil S.L.
(Participes, not rated), which owns 85.1% of Arteris.
BANCO DAYCOVAL: S&P Affirms 'BB-/B' ICRs; Outlook Remains Negative
------------------------------------------------------------------
S&P Global Ratings Services affirmed its 'BB-/B' global scale and
'brA/brA-2' Brazilian national scale issuer credit ratings on
Banco Daycoval S.A. The outlook remains negative. The bank's
stand-alone credit profile (SACP) remains at 'bb-'.
The ratings on Daycoval reflect its somewhat concentrated business
profile given its focus on middle-market and payroll. S&P also
bases its analysis of Daycoval on S&P's expectation of maintenance
of its internal capital generation, leading to a forecasted risk-
adjusted capital [RAC] ratio of about 8.0% for the next two years.
Moreover, the bank has maintained a diversified client base and
sound asset quality metrics, particularly its credit losses, which
are lower than the banking system's average and of international
banks that operate in the same economic risk score as Daycoval.
The ratings also reflect S&P's view of the bank's funding
structure that lacks depositor and funding sources
diversification, and its liquidity position that provides adequate
cushion to cope with cash outflows over the next 12 months.
CENTROVIAS SISTEMAS: Moody's Assigns Ba3 Corporate Family Rating
----------------------------------------------------------------
Moody's America Latina assigned ratings of a Ba3/A1.br
(respectively, in global scale and Brazil's national scale) to
Centrovias Sistemas Rodoviarios S.A.'s planned BRL100 million
senior secured debentures due in 2019. Moody's also affirmed
Centrovias' senior unsecured and senior secured ratings at
Ba3/A1.br. At the same time, Moody's assigned a Ba3/A1.br
corporate family ratings (CFR) to Centrovias and withdrew the
company's Ba3/A1.br issuer rating. Finally, Moody's changed the
outlook to positive from negative.
Centrovias plans to issue the senior secured debentures in March
2017 to help meeting its working capital and investment needs. The
debentures will mature in 24 months and will have two principal
payments, 50% in eighteen months after issuance and the remaining
at maturity. Interest payments will take place every three months
from the issuance date. The debentures will have cross-default
clauses with other debt at Centrovias and will include
acceleration clauses such as: (i) the non-payment of any financial
obligation above BRL 7 million, (ii) change of control and
termination of the concession contract (iii) granting any
intercompany loan or issuing new debt, (iv) dividend payments
above the minimum required by Brazilian Corporate Law if the
company is not in compliance with its obligations including its
financial covenants (v) covenant breach on the following: Net
Debt/(EBITDA -- Fixed Concession Fee) maintained at levels equal
or below 2.0x until Dec/2017, 1.5x until Jun/2018 and 1.0x until
the maturity date and debt service coverage ratio equal or above
1.20x and (vi) covenant breach by the parent, Arteris S.A.
("Arteris", not rated) considering a Net Debt/(EBITDA -- Fixed
Concession Fee) equal or below 4.25x.
The debenture will have a corporate guarantee from Arteris
starting from June 2018 (after the current outstanding debentures
due date) up to maturity. Other Centrovias' debentures do not
benefit from similar guarantee. In Moody's opinion a ratings
differentiation is not warranted at this point as Moody's
considers the company will adequately meet its obligations.
The assigned ratings are based on preliminary documentation.
Moody's does not anticipate changes in the main conditions that
the debentures will carry. Should issuance conditions and/or final
documentation deviate from the original ones submitted and
reviewed by the rating agency, Moody's will assess the impact that
these differences may have on the ratings and act accordingly.
RATINGS RATIONALE
The Ba3/A1.br rating reflects the long history of tolling
operations of Centrovias and the company's strong credit metrics
for the rating category. Centrovias is located in a well-developed
and economically diversified region in the State of Sao Paulo
(Ba2, negative). Moody's expects Centrovias to post relatively
stable cash flows during the remaining life of the concession. The
ratings are further supported by Moody's assessments of company's
shareholders.
Centrovias' ratings are constrained by: (i) a traffic profile
highly concentrated on heavy vehicles, which tend to be volatile
and correlated with GDP trends; (ii) the short remaining life of
Centrovias' concession expiring in 2019; (iii) a track record of
high dividend distributions; (iv) relatively tight liquidity to
fund parent company (Arteris) investment activity with remaining
amount of intercompany loans to be received from Arteris.
The positive outlook reflects Moody's views that the economy's
gradual return to growth in 2017 will exert upward pressure on
Centrovias' traffic volume in the next 12 to 18 months, after two
years of decline. Moody's note that during the economic crisis,
Centrovias' traffic proved to be more resistant compared to other
concessions within the group. Moody's also expects the dividend
and intercompany loan flows will be prudently managed and lower
cash outflows could further improve Centrovias' liquidity.
Our analysis does not consider a renewal or extension of the
concession or any reimbursements from the Government of the State
of Sao Paulo for the non-depreciated assets, as embedded in the
concession contract.
What Could Change the Rating -- Up/ Down
Moody's could upgrade the rating if Moody's expectations of a
stronger operational performance with traffic volume recovery
materializes due to the gradual economic recovery. A stronger
liquidity profile driven by lower outflows to the parent company
could also exert upward pressure on the rating.
A rapid or significant downturn in the company's credit metrics
could prompt a rating downgrade as well as the degradation of the
liquidity and overall credit quality of Arteris. A deterioration
in the supportiveness of the concession and regulatory framework
could also prompt a downward action. Moody's also assume that
neither Arteris nor any of its subsidiaries will incur new debt
containing cross default provisions that could affect Centrovias'
ratings.
Centrovias is an operating subsidiary of Arteris, a holding
company with approximately 3,250 kilometers of operating toll
roads under concession in Brazil, consisting of four concessions
in the State of Sao Paulo and five federal concessions in the
States of Sao Paulo (Ba2, negative), Minas Gerais (B1, negative),
Rio de Janeiro (not rated), Parana (Ba3, negative) and Santa
Catarina (not rated). The combined tolled traffic was 487 million
equivalent vehicles (VEQ) in the first nine months of 2016,
presenting a 4.5% decrease on a consolidated basis mainly driven
by the federal concessions performance which fell 4.9% while state
concessions fell -3.5%. In the last twelve months ending September
2016, Centrovias' revenues and EBITDA represented 15% and 18% of
Arteris consolidated results, respectively, as Centrovias reported
net sales of BRL 344 million and EBITDA of BRL288 million as per
Moody's standard adjustments.
Centrovias is indirectly controlled by Abertis Infraestructuras
S.A. (Abertis, not rated) and by Brookfield Brazil Motorways
Holdings SRL, (Brookfield Brazil, not rated) through their
respective ownerships of 51% and 49% in Participes en Brasil S.L.
(Participes, not rated), which owns 85.1% of Arteris.
CONCESSIONARIA DE RODOVIAS: Moody's Affirms Ba2 Sr. Unsec. Rating
-----------------------------------------------------------------
Moody's America Latina affirmed Concessionaria de Rodovias
Interior Paulista S.A.'s senior unsecured ratings at Ba2/Aa2.br.
At the same time, Moody's assigned a Ba2/Aa2.br corporate family
rating (CFR) to Intervias and withdrew its Ba2/Aa2.br issuer
rating. The outlook remains negative.
RATINGS RATIONALE
The Ba2/Aa2.br rating reflects Intervias' robust asset features
servicing the city of Sao Paulo and linking Arteris' closely
located concessions. The rating also considers limited competition
from alternative routes in a relatively small but well-developed
and economically diversified region in the State of Sao Paulo,
(Ba2, negative). Moody's expects Intervias'cash flow to stay
relatively stable despite the company's significant expansion
CAPEX. The strong financial backup from shareholders in case of
need further sustains the rating.
The ratings are constrained by (i) the traffic profile
concentrated on heavy vehicles, which tend to be more volatile and
highly correlated with GDP; (ii) track record of high dividend
distributions that will continue in the future; (iii) relatively
tight liquidity to fund the investment activity of the parent
company and the relatively significant amount of intercompany
loans to be received from Arteris. In addition, the judicial
dispute of the company's concession amendment granted in 2006,
extending its concession to 2028 from 2020, further weighs on the
rating. Brazil's sovereign rating constrains Intervias' rating.
What Could Change the Rating -- Up/ Down
The company's ratings and outlook are constrained by the sovereign
rating given the domestic nature of its operations, therefore a
stabilization of Brazil's rating could also lead to a
stabilization of Intervias.
A downgrade of Brazil's sovereign rating could exert downward
pressure on Intervias' rating. A rapid or significant downturn in
the company's credit metrics could prompt a rating downgrade as
well as the degradation of the liquidity and overall credit
quality of Arteris. A deterioration in the supportiveness of the
concession and regulatory framework could also prompt a downward
action. Moody's also assume that neither Arteris nor any of its
subsidiaries will incur new debt containing cross default
provisions that could affect Intervias' ratings. Moody's doesn't
incorporate in the current ratings any concession life reduction
from a potential negative outcome of the ongoing judicial dispute
with ARTESP.
Intervias is an operating subsidiary of Arteris, a holding company
with approximately 3,250 kilometers of operating toll roads under
concession in Brazil, consisting of four concessions in the State
of Sao Paulo and five federal concessions in the States of Sao
Paulo (Ba2, negative), Minas Gerais (B1, negative), Rio de Janeiro
(not rated), Parana (Ba3, negative) and Santa Catarina (not
rated). The combined tolled traffic was 487 million equivalent
vehicles (VEQ) in the first nine months of 2016, presenting a 4.5%
decrease on a consolidated basis mainly driven by the federal
concessions performance which fell 4.9% while state concessions
fell -3.5%. In the last twelve months ending September 2016,
Intervias' revenues and EBITDA represented 16% and 25% of Arteris
consolidated results, respectively, as Intervias reported net
sales of BRL 368 million and EBITDA of BRL 396 million as per
Moody's standard adjustments.
Intervias is indirectly controlled by Abertis Infraestructuras
S.A. (Abertis, not rated) and by Brookfield Brazil Motorways
Holdings SRL, (Brookfield Brazil, not rated) through their
respective ownerships of 51% and 49% in Participes en Brasil S.L.
(Participes, not rated), which owns 85.1% of Arteris.
MASISA SA: S&P Affirms B+ CCR on Weaker-Than-Expected Performance
-----------------------------------------------------------------
S&P Global Ratings affirmed its 'B+' corporate credit rating on
Masisa S.A. The outlook remains stable. S&P also affirmed its
'B+' issue-level rating in the senior unsecured notes.
S&P currently believes that the investors in the senior notes
don't face a significant disadvantage as creditors of the holding
company, because although S&P estimates priority liabilities
represent around 15% of net tangible assets, the holding is also
an operating company that generates cash flows on its own which is
a mitigating factor.
The affirmation reflects S&P's view that following a weaker-than-
expected 2016 performance, Masisa will improve its credit metrics
starting in 2017. The company's profitability has dropped in the
previous two years due to the economic slowdown in the main
markets it operates as well as due to the sharp depreciation of
domestic currencies. S&P believes that higher volumes--especially
the new capacity stemming from the new MDF plant in Mexico--and
more stable local currencies will be the key drivers for Masisa's
improved cash generation and leverage reduction.
Despite the company's efforts to increase exports to offset the
economic slowdown in Brazil (10% of total EBITDA), Venezuela (10%)
and Argentina (25%), its recurring margins deteriorated. S&P
believes that Masisa's exposure to high-risk jurisdictions, mainly
Venezuela and Argentina, exposes it to high cash flow volatility
and a less flexible cost structure because high inflation hampers
the company's ability to pass through cost increases. The reduced
operating efficiency prompted us to revise Masisa's business risk
profile to weak from fair. As mitigating factors to Masisa's
business model, the company has the solid position in the markets
in which it operates, the sizable installed capacity in Latin
America, and its vertical integration, from forestry to
distribution.
ULTRAPAR PARTICIPACOES: Moody's Affirms Ba1 CFR; Outlook Negative
-----------------------------------------------------------------
Moody's Investors Service affirmed the Ba1 corporate family
ratings of Ultrapar Participacoes S.A and the Ba1 rating assigned
to the USD 750 million senior unsecured notes due 2026 issued by
Ultrapar International S.A, irrevocably and unconditionally
guaranteed by Ultrapar and by Ipiranga Produtos de Petr¢leo S.A.
The outlook for all ratings is negative.
Ratings Affirmed
Issuer: Ultrapar Participacoes S.A
Corporate Family Rating: Ba1
Issuer: Ultrapar International S.A.
USD 750 million Senior Unsecured Notes due 2026: Ba1
The outlooks are negative.
RATINGS RATIONALE
Ultrapar's ratings reflect primarily the company's solid business
model, low risk profile, stable cash flows and leading position in
different segments. Over the past few years the company
demonstrated its ability to post robust growth across all business
lines and to sustain conservative credit metrics and strong cash
generation even under adverse market conditions and sizable
investment plan.
On the other hand, the ratings are primarily constrained by
Brazil's sovereign government bond rating. The company's
acquisitive growth strategy and its dependence on a few key
suppliers for raw materials are additional negative rating
considerations. To a lesser extent, the more cyclical nature of
its specialty chemicals business is also viewed as credit
negative.
Ultrapar's Ba1 Corporate Family Rating rating stands one notch
above Brazil's government bond rating of Ba2. Granted only on an
exceptional basis, the notching represents a fundamental corporate
profile that is stronger than the sovereign's government bond
rating. This is evidenced by the resilient nature of Ultrapar's
cash flows and financial flexibility, which allow it to withstand
Brazil's weakened economic and fiscal condition.
The negative outlook on Ultrapar's rating mirrors Brazil's
sovereign ratings outlook.
Although unlikely in the short term, an upgrade of Ultrapar's
rating would depend on an upgrade of Brazil's sovereign rating and
on the maintenance by Ultrapar of strong credit metrics and
liquidity profile.
Negative pressure on the rating could arise from a deterioration
in the group's liquidity position or an increase in leverage (debt
to EBITDA above 4.0x) without prospects of deleveraging in the
near term. A drop in interest coverage as measured by EBIT to
interest expense below 2.5x for a prolonged period of time, and
operating margins below 3.0%, could negatively pressure the
rating. Additional negative actions on Brazil's sovereign rating
would also trigger a downgrade of Ultrapar's ratings.
Ultrapar Participacoes S.A., headquartered in Sao Paulo, Brazil,
is engaged in fuel (Ipiranga) and liquefied petroleum gas
(Ultragaz) distribution, specialty chemicals production (Oxiteno),
storage for liquid bulk (Ultracargo) and retail drugstore
(Extrafarma). In the last twelve months ended December 2016,
Ultrapar reported consolidated net revenues of BRL 77.4 billion
(about USD 22.2 billion). Fuel distribution is the group's largest
business segment, representing 86% of consolidated net revenues
and 73% of EBITDA in the same period.
VIANORTE SA: Moody's Affirms Ba3 Corp. Family Rating
----------------------------------------------------
Moody's America Latina affirmed Vianorte S.A.'s senior unsecured
and senior secured ratings at Ba3/A1.br. At the same time, Moody's
assigned a Ba3/A1.br corporate family rating (CFR) to Vianorte and
withdrew its Ba3/A1.br issuer rating. The outlook changed to
stable from negative.
RATINGS RATIONALE
The Ba3/A1.br rating of Vianorte reflects the mature nature of the
concession, as evidenced by its historically solid and stable
tolling performance that supports strong credit metrics for the
rating category. The concession is located in a well-developed
region although its toll road system serves a smaller area in the
interior of the State of Sao Paulo (Ba2, negative) when compared
to closely located toll roads.
Vianorte's concession contract expires in the beginning of 2018.
During the remaining months Moody's expects the company to post
relatively stable cash flows with relatively low CAPEX
requirements due to its maturity. Notwithstanding the strong
fundamentals of the concession, the ratings are somewhat
constrained by: (i) the traffic profile more concentrated on heavy
vehicles, which tend to be more volatile and highly correlated
with GDP performance; (ii) short remaining life of concession;
(iii) track record of high dividend distributions and outstanding
intercompany loans to be received from Arteris.
The stable outlook reflects Moody's views that the economy's
gradual return to growth in 2017 will exert upward pressure on
Vianorte's traffic volume in the next 12 to 18 months, after two
years of decline. Moody's also expects the dividend and
intercompany loan flows will be prudently managed so that
Vianorte's credit quality and liquidity remain adequate for the
rating category.
Our analysis does not consider a renewal or extension of the
concession or any reimbursements from the Government of the State
of Sao Paulo for the non-depreciated assets, as embedded in the
concession contract.
What Could Change the Rating -- Up/ Down
In light of the proximity to the concession maturity, an upgrade
of the rating is unlikely in the near to medium term.
A rapid or significant downturn in the company's credit metrics
could prompt a rating downgrade as well as the degradation of the
liquidity and overall credit quality of Arteris. A deterioration
in the supportiveness of the concession and regulatory framework
could also prompt a downward action. Moody's also assume that
neither Arteris nor any of its subsidiaries will incur new debt
containing cross default provisions that could affect Vianorte's
ratings.
Vianorte is an operating subsidiary of Arteris, a holding company
with approximately 3,250 kilometers of operating toll roads under
concession in Brazil, consisting of four concessions in the State
of Sao Paulo and five federal concessions in the States of Sao
Paulo (Ba2, negative), Minas Gerais (B1, negative), Rio de Janeiro
(not rated), Parana (Ba3, negative) and Santa Catarina (not
rated). The combined tolled traffic was 487 million equivalent
vehicles (VEQ) in the first nine months of 2016, presenting a 4.5%
decrease on a consolidated basis mainly driven by the federal
concessions performance which fell 4.9% while state concessions
fell -3.5%. In the last twelve months ending September 2016,
Vianorte's revenues and EBITDA represented 13% and 18% of Arteris
consolidated results, respectively, as Vianorte reported net sales
of BRL 295 million and EBITDA of BRL226 million as per Moody's
standard adjustments.
Vianorte is indirectly controlled by Abertis Infraestructuras S.A.
(Abertis, not rated) and by Brookfield Brazil Motorways Holdings
SRL, (Brookfield Brazil, not rated) through their respective
ownerships of 51% and 49% in Participes en Brasil S.L.
(Participes, not rated), which owns 85.1% of Arteris.
==========================
C A Y M A N I S L A N D S
==========================
AES OCEAN: Shareholders Receive Wind-Up Report
----------------------------------------------
The shareholders of AES Ocean Springs, Ltd. received on, Jan. 25,
2017, the liquidator's report on the company's wind-up proceedings
and property disposal.
The company's liquidator is:
Tina Wang
c/o Maples and Calder
Attorneys-at-law
P.O. Box 309, Ugland House
Grand Cayman KY1-1104
Cayman Islands
ALLIANCE SPRINT: Shareholders Receive Wind-Up Report
----------------------------------------------------
The shareholders of Alliance Sprint Holdings Ltd received on,
Jan. 26, 2017, the liquidator's report on the company's wind-up
proceedings and property disposal.
The company's liquidator is:
Avalon Ltd.
Landmark Square, 1st Floor, 64 Earth Close
PO Box 715, Grand Cayman KY1-1107
Cayman Islands
Facsimile: +1 (345) 769-9351
ALTEDGE DIVERSIFIED: Shareholders Receive Wind-Up Report
--------------------------------------------------------
The shareholders of Altedge Diversified Fund SPC received on,
Jan. 24, 2017, the liquidator's report on the company's wind-up
proceedings and property disposal.
The company's liquidator is:
Matthew Wright
c/o Omar Grant
Windward 1, Regatta Office Park
P.O. Box 897 Grand Cayman KY1-1103
Cayman Islands
Telephone: (345) 949-7576
Facsimile: (345) 949-8295
ANDEAN CAPITAL: Shareholder Receives Wind-Up Report
---------------------------------------------------
The shareholder of Andean Capital Investment, Ltd. received on,
Jan. 26, 2017, the liquidator's report on the company's wind-up
proceedings and property disposal.
The company's liquidator is:
Andean Capital Management, Ltd.
c/o Sterling Trust (Cayman) Limited
Whitehall House
238 North Church Street
P.O. Box 1043 George Town
Grand Cayman KY1-1102
Cayman Islands
Telephone: +1 (571) 642 0568
ANDEAN CAPITAL MANAGEMENT: Shareholder Receives Wind-Up Report
--------------------------------------------------------------
The shareholder of Andean Capital Management, Ltd. received on,
Jan. 26, 2017, the liquidator's report on the company's wind-up
proceedings and property disposal.
The company's liquidator is:
Andean Capital Management, Ltd.
c/o Sterling Trust (Cayman) Limited
Whitehall House
238 North Church Street
P.O. Box 1043 George Town
Grand Cayman KY1-1102
Cayman Islands
Telephone: +1 (571) 642 0568
ANDEAN CAPITAL (GP): Shareholders Receive Wind-Up Report
--------------------------------------------------------
The shareholders of Andean Capital Management (GP), Ltd. received
on, Jan. 26, 2017, the liquidator's report on the company's wind-
up proceedings and property disposal.
The company's liquidator is:
Andean Capital Management, Ltd.
c/o Sterling Trust (Cayman) Limited
Whitehall House
238 North Church Street
George Town
P.O. Box 1043 Grand Cayman KY1-1102
Cayman Islands
Telephone: +1 571 642 0568
BORDEAUX WINE: Shareholders Receive Wind-Up Report
--------------------------------------------------
The shareholders of Bordeaux Wine Fund Ltd. received on, Jan. 25,
2017, the liquidator's report on the company's wind-up proceedings
and property disposal.
The company's liquidator is:
Kenneth Stewart
c/o Apex Fund Services (Cayman) Ltd.
161a Artillery Court, Shedden Road
P.O. Box 10085, Grand Cayman KY1 1001
Cayman Islands
Telephone: (345) 747 2739
FREEDOM KEY: Members Receive Wind-Up Report
-------------------------------------------
The members of Freedom Key Ltd. received on Feb. 6, 2017, 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
GC CAYMAN: Shareholders Receive Wind-Up Report
----------------------------------------------
The shareholders of GC Cayman Holding 1 Corp. received on
Jan. 25, 2017, 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, Grand Cayman, KY1-9008
Cayman Islands
LAWRENCE CLARKE: Shareholders Receive Wind-Up Report
----------------------------------------------------
The shareholders of Lawrence Clarke Diversified Fund received on,
Jan. 25, 2017, the liquidator's report on the company's wind-up
proceedings and property disposal.
The company's liquidator is:
Richard Fear
c/o Kevin Butler
P.O. Box 2681 Grand Cayman KY1-1111
Cayman Islands
Telephone: (345) 814 7374
Facsimile: (345) 945 3902
=============
J A M A I C A
=============
CABLE & WIRELESS: Liberty Global Still Awaiting Regulatory Review
-----------------------------------------------------------------
RJR News reports that Liberty Global's acquisition of Cable &
Wireless Communications (CWC) last year is still awaiting
regulatory review and approval in several Caribbean jurisdictions,
including Jamaica.
The revelation is contained in Liberty Global's annual filing with
US regulators, according to RJR News. It said the regulatory
authorities have not completed their review, the report notes.
Liberty Global said it expects to receive all outstanding
approvals. However, it said the approvals may include binding
conditions or requirements that could have an adverse impact on
CWC's operations and financial condition, the report adds.
As reported in the Troubled Company Reporter-Latin America on
Sept. 12, 2016, Caribbean360.com said that minority share-
holders of Cable & Wireless Jamaica have defied the board of
directors and voted against a resolution to set pay for auditor
KPMG. Their move was aimed at making a wider point on
transparency. Voting on the resolution was adjourned for 30 days
when C&WJ shareholders can vote via poll on the matter, according
to Caribbean360.com.
On Feb. 16, 2015, TCRLA, citing RJR News, reported that
restructuring and legal costs during the October to December
quarter resulted in Cable & Wireless Jamaica racking up a huge
financial loss.
The company incurred J$1.5 billion in operating exceptional items
during the three months, according to RJR News. As a result, it
ended the period with a J$1.89 billion loss, the report relates.
Revenues increased by 14 per cent to J$5.6 billion.
===========
M E X I C O
===========
CONSUBANCO SA: Fitch Affirms 'BB' Issuer Default Ratings
--------------------------------------------------------
Fitch Ratings has affirmed the Long- and Short-Term Foreign- and
Local-Currency Issuer Default Ratings (IDRs) of Consubanco, S.A.,
Institucion de Banca Multiple 'BB'/ 'B'. The Viability Rating (VR)
is affirmed at 'bb'. Fitch has also affirmed Consubanco's long-
and short-term National ratings at 'A(mex)'/'F1(mex)'.
In addition Fitch has withdrawn the National long-term 'A(mex)'
rating of a planned debt issuance (CSBanco 16), since the company
no longer intends to place this issue.
The Rating Outlook on the Long-Term ratings is stable. See the
full list of rating actions at the end of this release.
KEY RATING DRIVERS
VR, IDRS, NATIONAL RATINGS AND SENIOR DEBT
The bank's IDRs, National and senior debt ratings reflect the
bank's well-known but still small franchise in its areas of
influence that places it among the leaders in the pay-roll-
deducted loans segment, its consistent profitability track record
throughout the economic cycle, and its manageable impaired loans
levels. The ratings also weigh in the company's steady and strong
profitability that supports its acceptable capital base, which
still provides good loss absorption capacity. Funding and
liquidity remain as a major challenge, as it its wholly reliant on
wholesale funding. Consubanco's ratings are still constrained by
the challenging operating and competitive environment of its
business segment, and the operational and political risks inherent
to the sector.
The bank's financial performance track record is characterized by
its consistent and robust profitability reached over the years,
supported by its high net interest margin (NIM), the containment
of its credit costs and adequate operating cost control despite
the upward trend shown in 2016. As of December 2016 its operating
ROAA and ROAE were 9.5% and 32.4%, respectively, lower than those
reached in 2015 (11.0% and 43.2%), due to higher fees paid to
brokers and a decrease in net interest income. NIM remains strong,
although moderately affected in recent periods by increased
competition and recent reference interest rate increases in Mexico
given the rate mismatches between its loans and funding; it stood
at 35.2% (2015:37.6%).
Consubanco's asset quality has been improving during the past
years, due to the strengthening of its underwriting standards and
its strategy to focus on public entities whose payroll
disbursements are done by the federal government, which has proven
successful in decreasing loan delinquency related to the
unwillingness of public sector entities to timely and fully
disburse retained collections. The bank's non-performing loan
(NPL) ratio is manageable for the segment it targets. As of
December 2016, the impairment ratio stood at 6.5%, while this
ratio adjusted for gross charge-offs (impaired loans + gross
charge-offs / gross loans + gross charge-offs) was 11.5% (2015:
7.6% and 9.9%, respectively). Loan loss reserves remain at
adequate levels underpinned by Consubanco's policy to fully
reserve all receivable from employers overdue by 90 days or more.
As of December 2016, the reserve coverage ratio was 143.3% (2015:
155.8%).
Consubanco's funding and liquidity have remained stable; however,
as it is wholly reliant on wholesale funding it might face
challenges to access the market under uncertain and volatile
conditions as happened during the last trimester of 2016.
Consubanco's funding base is constituted of unsecured issuances
such as long-term unsecured debt issuances (45%) and certificates
of deposits (44%). Despite its banking license, deposits represent
only 6% of its funding mix; Consubanco foresees smooth deposit
growth in the medium term as the expansion of its saving accounts
product will be deployed slowly along the year.
Consubanco maintains active surveillance over its liquidity levels
in compliance with Basel III requirements. The company has met
this regulatory ratio at satisfactory levels and above the minimum
mandatory level of 70%, reflecting the proactive measures to
optimize its liquidity. Consubanco's cumulative liquidity gap is
positive considering total assets; however, there are some
individual negative gaps at each unsecured senior issuance
maturity date.]
In Fitch's view Consubanco's steady and strong profitability
supports its acceptable capital base, which still provides good
loss absorption capacity given its current loan loss reserves and
its low borrower concentration. During 2016, the company saw a
minor improvement in its capitalization metrics as its internal
capital generation exceeded its total assets growth. Despite this
progress, there is still room for improvement, since its capital
adequacy could be pressured by any accelerated loan growth and its
inherent prepaid fees to brokers. By year-end 2016, FCC (Fitch
Core Capital) to weighted-risks ratio stood at 12.1% (2015:
11.5%).
Fitch considers that, other than traditional credit risks,
Consubanco is also somewhat exposed to operational, political and
event risk. Failure to properly implement agreements with
employers or unwillingness of public sector entities to timely and
fully disburse retained collections, changes in municipal and
federal leadership, among others, are potential risk factors that
could affect Consubanco under certain circumstances].
RATING SENSITIVITIES
VR, IDRS, NATIONAL RATINGS AND SENIOR DEBT
Fitch believes that Consubanco's ratings upside potential is
limited in the short term. Fitch would consider upgrading these
ratings in the medium term, when the bank's business volume
increases as it achieves important balance sheet diversification
on both sides of its balance sheet, while maintaining asset and
liability tenors relatively matched, and a comfortable cash flow
schedule.
The bank's VR, IDRs, National and senior debt ratings could be
downgraded if asset quality declines to such an extent that it
generates a relevant deterioration of its operating ROA or if its
FCC ratio (adjusted for capitalized fee expenses) decreases below
10%. A material impact derived from negative developments in
political and/or business risks could also affect the ratings.]
SUPPORT RATING AND SUPPORT RATING FLOOR
[Given the limited systemic importance of the bank and negligible
share of retail deposits, Fitch believes that the SR and SRF are
unlikely to change in the foreseeable future.
Fitch has affirmed the following ratings:
Consubanco, S.A., Institucion de Banca Multiple
-- Long-Term foreign currency IDR at 'BB';
-- Short- Term foreign currency IDR at 'B';
-- Long- Term local currency IDR at 'BB';
-- Short- Term local currency IDR at 'B';
-- Viability rating at 'bb';
-- Long-term senior unsecured notes at 'BB';
-- Support rating at '5';
-- Support rating floor at 'NF';
-- Long-term National-scale rating at 'A(mex)';
-- Short-term National-scale rating at 'F1(mex)';
-- Long-term National-scale rating for local unsecured debt at
'A(mex)'.
Fitch has withdrawn the following rating:
-- Long-term national-scale rating for local unsecured debt
(CSBanco16) of 'A(mex)'.
The Rating Outlook is Stable.
CREDITO REAL: Fitch Affirms 'BB+' IDRs; Outlook Stable
------------------------------------------------------
Fitch Ratings has affirmed Credito Real S.A.B. de C.V. Sofom,
E.R.'s Long- and Short-Term Local- and Foreign-Currency Issuer
Default Ratings (IDRs) at 'BB+' /'B'. The Rating Outlook is
Stable.
KEY RATING DRIVERS
IDRS, NATIONAL RATINGS AND SENIOR DEBT
The affirmation and Stable Outlook consider Credito Real's strong
competitive positioning in several of its business lines, the
gradual diversification of its business model, its robust and
sustained profitability metrics supported by high-yield products
and volume growth, as well as its peer-superior asset quality and
adequate funding flexibility.
The ratings are constrained by the company's low participation in
the Mexican financial system, increased leverage as a result of
its most recent acquisitions, risks inherent to its rapid growth
strategy, and operational, political and reputational risks
related to its payroll business. Ratings are also limited by
Credito Real's above-average risk appetite, reflected in its
inorganic growth strategy.
Credito Real's participation in the Mexican financial system is
low; however, it continues to be the market leader in the public
payroll loans segment in Mexico and maintains adequate brand
recognition and competitive positioning in most of its business
lines.
At approximately 63% of its portfolio, payroll loans still
represent its core offering; however, the company has diversified
gradually toward other types of consumer lending, such as used car
loans and personal loans in Mexico, the U.S. and Central America
through acquisitions.
Credito Real's particular business model attributes, such as the
sharing of income and risk with its distributors, together with
its concentration in federal government entities in its payroll
portfolio, has resulted in asset quality ratios that compare
favourably to those of its peers. Fitch expects that asset quality
ratios remain fairly stable during 2017, as the company is still
heavily concentrated in payroll loans, which tend to exhibit a
steady performance throughout the economic cycle. Furthermore, the
company will be more restrictive with SME and used car loans in
Mexico, which are relatively more sensitive to deterioration in
the operating environment.
Non-Performing Loans represented 2.5% of gross loans as of the
third quarter of 2016 (3Q16), a level which Fitch considers
adequate for Credito Real's segments. The impaired loan ratio
adjusted by gross charge-offs of the last nine months was 5.4%,
above the 4.3% registered at the close of 2015. Fitch calculates
an impaired loan ratio adjusted for the amounts owed by
distributors. This adjusted ratio stood at 4.9% as of 3Q16 (2015:
4.8%) and at 7.7% if charge-offs are considered (2015: 6.6%). Loan
loss reserve coverage continues to be adequate; it stood at 142.2%
as of 3Q16.
The concentration of its payroll portfolio per employer/agreement
decreased to 0.6x its equity as of 3Q16, compared to 1.2x in 2015;
this concentration risk is mitigated by the fact that the main
agreements are held with federal government entities.
Credito Real's sound profitability ratios continue to represent
one of its main strengths. The company's net interest margin (NIM;
net interest income as a percentage of average earning assets)
proved to be resilient during 2016 despite the increases in
Mexico's reference interest rates; it stood at 19.5% as of 3Q16
compared to 18.4% in 2015. This moderate improvement was mainly
driven by the contribution of Instacredit's wider margins.
However, NIM is below that of its closes peers as a result of the
company's income-sharing model with its distributors and the
company faces the challenge of sustaining NIMs amid the
possibility of more interest rate hikes in Mexico.
Its operating return over assets (ROA) decreased to 7% as of
September 2016, compared to 8% in 2015. This was mainly caused by
increased operating costs as a result of the consolidation of
recent acquired businesses, which have higher operating costs
compared to Credito Real's original businesses that rely on third-
parties for loan distribution. Additionally, the company
experienced a negative carry derived from unused funds from the
issuance of the senior notes due 2023; this resulted in an
additional interest expense of MXN66 million during 3Q16.
Credito Real's leverage, measured as debt to tangible equity, has
exhibited an increasing trend over the past few years as a result
of the acquisition of businesses that generate goodwill. However,
Fitch believes they are still adequate for its rating level.
Credito Real plans to maintain a debt to equity ratio below 4x. As
of September 2016, this ratio was 2.8x, while its debt to tangible
equity ratio increased to 5x from 4.3x in 2016, and stands at 5.3x
after adding back debt issuance costs that are netted from the
balance sheet debt. Its high balance sheet growth which exceeds
capital generation also affected leverage.
Credito Real's funding mix is concentrated in wholesale funding;
nevertheless, it has a diverse base of funding sources that
include local and international commercial banks, local
development banks, as well as local and international unsecured
bond issuances; this compares favorably with other rated non-bank
financial institutions (NBFIs). Approximately 86% of Credito
Real's funding is unsecured, which adds flexibility to its funding
mix. Additionally, its subsidiaries in the U.S. and Central
America have access to their own funding sources, except for Don
Carro, one of its used car loans subsidiaries in the U.S.
Credito Real successfully refinanced 38% of its debt during 2016
and was able to extend its maturity; as a result, it has a
relatively more comfortable amortization schedule. Credito Real's
positive maturity gaps which benefit from a loan portfolio with an
average tenor of 1.6 years, financed with debt with average
maturity of 3.9 years, mitigate refinancing and liquidity risk.
RATING SENSITIVITIES
IDRS, NATIONAL RATINGS AND SENIOR DEBT
Ratings could be downgraded if Credito Real's leverage ratio (debt
to tangible equity) increases consistently above 7x as a result of
pressure from goodwill of potential acquisitions, organic growth
or deterioration of financial performance. A weakening of asset
quality metrics that result in relevant pressure of its operating
ROA, increased unhedged exposure to foreign currency debt and a
deterioration of its liquidity position could also adversely
affect ratings.
Fitch could upgrade Credito Real's ratings in the medium term if
the company is able to diversify its loan portfolio and maintain
strong financial performance. This would be reflected in an
operating ROA consistently above 8% and internal capital
generation that is sufficient to maintain its debt to tangible
equity ratio consistently below 5x with loan loss reserves
covering at least 100% of impaired loans. At the same time,
Credito Real must maintain adequate asset and liability management
as reflected in positive liquidity gaps.
Fitch affirmed these ratings:
Credito Real S.A.B. de C.V. Sofom, E.R.
-- Long-Term Foreign Currency IDR at 'BB+';
-- Short-Term Foreign Currency IDR at 'B';
-- Long-Term Local Currency IDR at 'BB+';
-- Short-Term Local Currency IDR at 'B';
-- Long-term senior unsecured notes due 2023 at 'BB+'.
-- National long-term rating at 'A+(mex)';
-- National short-term rating 'F1(mex)';
-- National long-term rating for senior unsecured local notes at
'A+(mex)';
-- National short-term rating for short term debt program at
'F1(mex)'.
The Rating Outlook is Stable.
MEXICO: Top U.S. Officials Met With Defiance in Visit to Mexico
---------------------------------------------------------------
Felicia Schwartz and Jose De Cordoba at The Wall Street Journal
report that top U.S. officials arrived for talks to find a defiant
Mexican government refusing to accept President Donald Trump's
tougher immigration and deportation policies.
"I want to make it emphatically clear that neither Mexico's
government or the Mexican people have any reason to accept
provisions that have been unilaterally imposed by one government
on the other," Mexico's Foreign Minister Luis Videgaray said at a
ceremony, according to The Wall Street Journal.
"We won't accept it because we don't have to," he added, in an
apparent reference to U.S. plans to return illegal migrants to
Mexico, regardless of their nationality, the report notes.
The report relays that Mr. Videgaray's declaration spelled trouble
for Secretary of State Rex Tillerson and Homeland Security
Secretary John Kelly, who a White House official said were sent to
"talk through the implementation" of Mr. Trump's guidelines.
Mexico City's objection was the latest blow to U.S.-Mexico
relations, which have frayed amid Mr. Trump's vow to build a
border wall estimated to cost $21 billion at Mexico's expense and
his plan to renegotiate the North American Free Trade Agreement
between the U.S., Canada and Mexico, the report notes. The
rupture resulted in the cancellation of a state visit last month
by Mexican President Enrique Pena Nieto, the report relays.
The White House brushed aside the ramped-up tensions between the
two countries, the report notes. "The relationship with Mexico is
phenomenal right now," White House press secretary Sean Spicer
said, the report relays.
Messrs. Tillerson and Kelly met with Mr. Videgaray and other
government officials, and were scheduled to meet with Mr. Pena
Nieto, the report notes. Mr. Tillerson also will meet again with
Mr. Videgaray and other officials then, the report adds.
Mr. Trump's new guidelines, which flesh out executive orders
signed by the president last month, call for enlisting local U.S.
authorities to enforce immigration law, jailing more people
pending hearings, and sending border-crossers back to Mexico to
await proceedings, even if they aren't Mexican, the report notes.
It is that detail of the new plan that has kindled the most
acrimony in Mexico, notes the report. Mexican officials said it
meant the U.S. would deposit Mexicans and non-Mexicans alike on
the southern side of the border, whether Mexico agreed to the plan
or not. Mexican officials view the plan as an affront to Mexican
sovereignty.
U.S. statistics show most of those entering the U.S. illegally
through the southwest border are from countries other than Mexico,
the report says.
Of more than 400,000 people apprehended in the year ending Sept.
30, more than 220,000 weren't from Mexico, according to U.S.
Customs and Border Protection, the report notes. Most were
fleeing violence and poverty in Central America, the report
discloses.
Mr. Videgaray said that the new guidelines would be the main topic
of the high-level discussions with Messrs. Tillerson and Kelly.
He said Mexico would use all legal means to protect the rights of
Mexicans in the U.S., and could call on the United Nations and
other international institutions to that end, the report relays.
At a news conference in Guatemala before continuing to Mexico, Mr.
Kelly said Mr. Trump's executive order in January was aimed at
returning undocumented immigrants to their countries of origin,
the report relays. Mr. Kelly said the order "emphasized the
mission of intercepting irregular immigrants from many countries
on our borders, treat them humanely and return them to their
countries of origin as fast as possible," the report notes.
The Journal discloses that Mr. Kelly's message in Guatemala was
aimed at discouraging people from making the trip to the U.S. by
telling them they would quickly be returned, officials said. The
guidelines issued separately suggested the U.S. would seek to have
people arriving from countries other than Mexico await their
deportation proceedings in Mexico rather than in the U.S, the
report relays. At the end of that process, those people would be
returned to their country of origin, officials said.
Ahead of the trip by Messrs. Tillerson and Kelly, senior
administration officials sought to play down the rift with Mexico,
saying Mr. Tillerson and Mr. Kelly aimed to clarify U.S. policy
and find ways to work together with the country, according to The
Journal.
"This trip is focusing on how we can build a constructive
relationship, work through our common interests on security, on
migration, on the economic elements of the relationship," a senior
administration official said, the report notes. "The wall is just
one part of a broader relationship that we have," the official
added.
Another administration official said the visit aimed to "help our
counterparts in Mexico understand clearly what is happening and
how we see things, and not just relying on rumor or stories that
they hear elsewhere," the report relays.
The directive also includes a review of all federal aid the U.S.
provides to Mexico. In his Jan. 25 executive order, Mr. Trump
ordered every executive department and agency to identify and
quantify all sources of direct and indirect aid to the Mexican
government over the last five years, the report notes. That
includes funding for development projects as well as economic,
humanitarian and law-enforcement assistance, the report relays.
Agencies have until the end of this month to report back to Mr.
Tillerson, who is to submit a summary report to the White House,
the report says.
U.S. officials said trade would be part of the talks in Mexico,
but top U.S. and Mexican trade officials aren't attending the
meetings, the report relays. Ahead of the visit, Mexican
officials suggested that a U.S. pullout from Nafta would affect
all aspects of U.S.-Mexico ties, the report notes.
"Logically, there wouldn't be incentives to continue collaborating
on the issues most important to national security in North
America, such as the issue of migration," Mexico's economy
minister, Ildefonso Guajardo, told local newspaper Milenio in an
interview published, The Journal relates.
In addition to tariff-free cross-border trade, Mexico and the U.S.
have collaborated for decades on efforts to fight drug cartels,
police the border and prevent terror attacks, the report
discloses.
Mark Feierstein, a former senior aide to President Barack Obama on
Latin America, said the measures represent a "dramatic and frankly
unnecessary shift," the report relays. "It's pretty hard to screw
up the U.S.-Mexico relationship and they managed to do it in a
matter of days," he added.
Mexican officials want to use issues including national security
and migration as leverage for future talks about Nafta, experts
said, the report notes. The U.S., in examining aid to Mexico,
also appears to be searching for leverage in future talks, the
report relays. The U.S. pledged $135 million in assistance to
Mexico this year, the report says.
"Mexico wants to link those issues in a way that has rarely been
done before," the report quoted Duncan Wood, director of the
Mexico Institute at the Wilson Center, a Washington think tank, as
saying. "There's never been a need for that and Mexico has
avoided it as much as possible, but now there is a need, so
they're doing it," Mr. Wood added.
MEXICO: Talks with U.S. Clouded by Mixed Message
------------------------------------------------
Felicia Schwartz, Jose De Cordoba and Robbie Whelan at The Wall
Street Journal report that top Trump administration officials
tried to soften the message on expanded U.S. immigration-
enforcement efforts during talks here, but Mexican officials
signaled little progress had been made in bridging differences
that threaten to further fray ties between the two countries.
Secretary of State Rex Tillerson and Homeland Security Secretary
John Kelly faced a skeptical Mexican government as they sought to
explain Washington's decision to step up the enforcement of
immigration laws, outlining policies to enlist local authorities
in the U.S. to jail and deport more people and to send detainees
back to Mexico -- even if they aren't Mexican, according to The
Wall Street Journal.
Meanwhile in Washington, President Donald Trump made comments that
seemed to sharpen the tone.
"All of a sudden for the first time we're getting gang members
out, we're getting drug lords out, we're getting really bad dudes
out of this country at a rate that nobody's ever seen before," the
president said during a White House event with manufacturing
executives. "And it's a military operation because they're
allowed to come into our country."
"We're going to have a good relationship with Mexico I hope," Mr.
Trump said. "And if we don't, we don't."
In midday meetings in Mexico City, the U.S. cabinet members
delivered two key assurances to their Mexican counterparts: that
they wouldn't institute "mass deportations," and that the U.S.
military wouldn't take part in rounding up and ejecting illegal
migrants, the report notes.
The report relays that Gabriela Cuevas, the head of the Mexican
Senate's foreign relations committee, said she was deeply troubled
by the apparent discrepancy between what the U.S. envoys said in
Mexico City and Mr. Trump's actions and words.
"I see a different message coming from the White House and from
the secretaries visiting here," she said. "One doesn't know if
Secretary Tillerson and Secretary Kelly are telling the truth or
not. It's a problem of credibility. Did they come to tell lies?
Or are they just not coordinating with their boss? Who do you
believe?"
The White House sought to walk back Mr. Trump's use of the word
"military" in reference to the immigration enforcement, the report
notes.
"The president was using that as an adjective. It's happening with
precision and in a manner in which it's being done very, very
clearly," said Sean Spicer, the White House press secretary, at a
news briefing, the report relays. "The president was clearly
describing the manner in which this was being done," the report
notes.
Nonetheless, Mr. Trump's comments had the effect of driving home
his administration's determination to up the tempo of enforcement
and deportation operations, regardless of their effect on the
U.S.'s southern neighbor, The Journal relays.
Raul Benitez, a security analyst at the National Autonomous
University of Mexico, said while mass deportations haven't begun,
Mr. Trump's statements and the newly published U.S. guidelines
have sown fears among the U.S.'s 55 million-person Hispanic
community, says the report.
"There's a very toxic climate of terror," said Mr. Benitez.
"Whatever they agree to here seems of dubious value for the
relationship," the report discloses.
Messrs. Kelly and Tillerson met with their Mexican counterparts,
Foreign Minister Luis Videgaray and Interior Minister Miguel Angel
Osorio Chong, later meeting with President Enrique Pena Nieto, the
report says. The meeting between the U.S. officials and the
president went ahead even after a top Mexican official had
suggested earlier that Mr. Pena Nieto might cancel, the report
notes.
Mr. Pena Nieto's office said the president stressed to the U.S.
envoys that Mexico's priority was protecting the citizens' rights
in the U.S., adding that the meetings underscored both
governments' desire to work past the current turbulence, the
report notes.
Mr. Videgaray, speaking to reporters alongside Messrs. Tillerson,
Kelly and Osorio, emphasized the anger and "irritation" that Mr.
Trump's policies and statements have caused among Mexicans, the
report notes.
He called for talks dealing with the entire relationship, linking
immigration and security issues to the continued trade
relationship, the report says.
"Reaching agreements with the U.S. will be a long road, but today
we have taken a step in the right direction," Mr. Videgaray said
after the meeting. "The differences persist, and we will continue
to work on issues of interest for Mexicans as they will continue
to do so for Americans," he added.
Mr. Videgaray said the talks were taking place at a "complicated
moment," adding both countries agreed on the need to continue
talks, the report notes. Mr. Tillerson said the sides both aired
their grievances.
"We jointly acknowledged that, in a relationship filled with
vibrant colors, two strong sovereign countries from time to time
will have differences. We listened closely and carefully to each
other as we respectfully and patiently raised our respective
concerns," Mr. Tillerson said, notes The Journal.
The Trump administration earlier this week unveiled the new
immigration and deportation policies, based on an executive order
issued by Mr. Trump last month, the report relays. The policy
calls for enlisting local U.S. authorities to enforce immigration
law, jailing more people while they wait for their hearings, and
trying to send border crossers back to Mexico to await
proceedings, the report discloses. The latter rule would apply
even to those who are not Mexican.
The report notes that Mr. Videgaray said he told the U.S.
officials that it was "legally impossible" for the U.S. to take
unilateral decisions affecting both countries. Such decisions
should be taken jointly and be the result of a process of dialogue
and mutual agreement, the foreign secretary said, the report
relays.
One Mexican official described Mr. Kelly's assertion that "there
will be no use of military forces in immigration" as encouraging,
seeing it as an apparent contradiction to Mr. Trump's earlier
statement, the report notes.
The report discloses that Mr. Kelly said his statements were
intended to correct inaccurate reporting by journalists, even
though one appeared to contradict Mr. Trump. Opponents of Mr.
Trump's immigration policies often refer to expanded U.S. efforts
in such terms, the report relays.
Mr. Tillerson said the U.S. reiterated its commitment to stopping
the illegal flow of weapons and cash on the border, the report
relays. "There is no mistaking that the rule of law matters along
both sides of our shared border," he said.
The officials discussed efforts to curtail irregular migration, by
securing Mexico's southern border and supporting efforts of
Guatemala, Honduras and El Salvador to improve conditions there,
the report notes.
Mr. Videgaray said Mexico was no longer producing illegal
migrants, who are now coming from Central America, the report
discloses. More than 220,000 migrants, most from Central
America, were detained by the U.S. Border Patrol in the past
fiscal year, the report notes. Last year, Mexico in turn deported
some 140,000 Central American migrants who were headed to the U.S,
the report adds.
======================
P U E R T O R I C O
======================
PUERTO RICO: Governor Says Years Needed to Fix Island Budget
------------------------------------------------------------
William Selway and Kasia Klimasinska at Bloomberg News report that
Puerto Rico Governor Ricardo Rossello said the government needs as
long as five years to close a more than $7 billion budget
shortfall, saying the deep spending cuts envisioned by the
island's federal overseers would deal a devastating blow to an
already sputtering economy.
Mr. Rossello's comments, made in an interview in Washington,
signal a potential rift with the U.S. oversight board that was
given broad power over Puerto Rico's finances after it defaulted
on a growing share of its $70 billion of debt, according to
Bloomberg News. With his administration preparing to submit
fiscal plans to the board, he estimated it will take three to five
years to erase the government's chronic deficits, compared with
the two-year time frame initially proposed by the board, Bloomberg
News notes.
"You could do it in two years, but the net effect would be a
devastating blow on the economy, social unrest and a devastating
blow, quite frankly, on revenues," he said, notes the report.
"We're saying, let's get some runway so the public policy we've
designed can get executed."
Bloomberg News relates that the long timeline underscores the need
for Puerto Rico to renegotiate debt left from years of borrowing
to pay bills as it remained mired in a recession. Even with steps
to address the deficit, he said the island will only have $800
million to $1.3 billion a year available to cover debts -- less
than half the more than $3 billion it will owe annually over the
next decade, notes the report.
Bloomberg News discloses that Mr. Rossello said the island's
negotiations with bondholders won't get underway in earnest until
the board backs his fiscal blueprint, which may happen by the
middle of next month. If it's approved, the governor said he'll
move aggressively to secure a voluntary agreement with creditors
to cut what it owes, Bloomberg News relays. A temporary stay that
has sheltered the island from bondholder lawsuits is set to lapse
in May.
"My hope is that we can renegotiate in good terms," the report
quoted Mr. Rossello as saying. "I'm hopeful that once we have
that fiscal plan in place we'll have a better understanding of how
far we need to go," he added.
Since taking office, Mr. Rossello has also sought to revisit the
debt-restructuring deal that the Puerto Rico Electric Power
Authority, the government utility, struck more than a year ago. He
declined to comment on what further concessions the island may be
seeking, Bloomberg News notes.
"Bondholders, I feel, recognize that there is space to
renegotiate," he said, notes Bloomberg News. "There is
willingness on the stakeholders side to revisit some of the
pillars -- and we're excited about the possibility that we can
reach an agreement."
Bloomberg News reocunts that Puerto Rico's debt crisis erupted
nearly two years ago, when then-Governor Alejandro Garcia Padilla
said the government's debts were too vast to repay. He went on
default on a wide swath of bonds to avoid drastic spending cuts he
said would fall heavily on an island where nearly half live in
poverty.
The U.S. government stepped in last year, enacting legislation
that established the federal board and gave the island bankruptcy-
like authority to have debt discharged in court, enhancing its
bargaining power with creditors, Bloomberg News recalls. The
board in January suggested that the island could eliminate the
budget shortfall by fiscal 2019 -- excluding debt payments -- by
raising taxes by $1.5 billion and cutting $4.5 billion in
spending, Bloomberg News notes.
The report relates that Mr. Rossello said the board's suggested $1
billion cut to health-care spending would have a devastating
impact, and he wants to implement a progressive pension-tax plan
that would spare low-income retirees.
Mr. Rossello said the island will need time to stabilize its
economy before it can sufficiently deal with the fiscal strains,
Bloomberg News discloses.
"Otherwise what we're doing is shoving people out of the island in
a massive exodus that won't fix the fiscal problem, that will
certainly be a deterrent to economic growth and will -- of course
-- be a source of social collapse," he added, says the report.
* * *
The Fiscal Agency and Financial Advisory Authority of Puerto Rico
has selected Dentons US as its legal advisor on all aspects of its
restructuring and revitalization efforts, including development
and implementation of the Fiscal Plan, restructuring and
renegotiation of municipal bond debt, communications with
creditors and with the PROMESA Oversight Board, among others.
The Troubled Company Reporter-Latin America reported on June 15,
2016, that the U.S. Supreme Court struck down a Puerto Rico law
that would have let its public utilities restructure their debt
over the objection of creditors leaving it to Congress to help the
island resolve its fiscal crisis. Siding with bondholders
challenging the law, the court ruled 5-2 that the measure was
barred under federal bankruptcy law.
Puerto Rico is struggling with $72 billion in debt and has argued
that it needs to restructure at least some of it under Chapter 9,
the part of the bankruptcy code for insolvent local governments.
But Puerto Rico is not permitted to do so, because Chapter 9
specifically excludes it.
The federal law, Justice Thomas wrote, "bars Puerto Rico from
enacting its own municipal bankruptcy scheme to restructure the
debt of its insolvent public utilities." Chief Justice John G.
Roberts Jr. and Justices Anthony M. Kennedy, Stephen G. Breyer and
Elena Kagan joined him.
Consequently, Puerto Rico opted to default on $911 million in
constitutionally guaranteed debt, or roughly half of the $2
billion in principal and interest that came due July 1, EFE News
reported.
The reported further noted that Puerto Rico enacted a debt
moratorium due to liquidity restraints -- a move that coincided
with a new U.S. law signed by President Obama that installs a
financial control board to restructure the island's debt and
provides a retroactive stay on lawsuits by bondholders.
On July 11, 2016, the TCR-LA reported that S&P Global Ratings
downgraded the Commonwealth of Puerto Rico's general obligation
secured debt to 'D' (default) from 'CC' following the
commonwealth's default.
On July 7, 2016, Fitch Ratings has downgraded the Commonwealth of
Puerto Rico's Long-Term Issuer Default Rating (IDR) to 'RD' from
'C' and general obligation (GO) bond rating to 'D' from 'C'
following the payment default on certain GO bonds on July 1, 2016.
===============
S U R I N A M E
===============
SURINAM AIRWAYS: Lack of Bilateral Deal Affecting Profitability
---------------------------------------------------------------
Ray Chickrie at Caribbean News Now reports that Surinam Airways
(SLM) director, Robbi Lachmising, told Eliezer Pross of De Ware
Tijd, a daily newspaper, that the national carrier has a "problem
expanding its wings because Suriname has insufficient aviation
agreements with countries in the region."
Mr. Lachmising added, "The possibilities are endless, but without
an aviation treaty, we cannot do anything. That's why SLM
requires that the ministry of foreign affairs, and if necessary,
an aviation arm within the foreign or the transportation ministry
be put in place to advocate intensively for more flight deals,"
according to Caribbean News Now.
It is not the first time that SLM has made such claims, the report
relays.
Bilateral air agreements with key countries have been stalled and
some ministries are performing poorly and have accomplished very
little, the report notes. This is why President Desi Bouterse
dismissed five cabinet members recently, adds the report.
For over five years now, Suriname has been working to conclude new
and more favorable air agreements with Argentina, Brazil, Chile,
Canada, Colombia, Cuba, France, Portugal, Panama, UAE, Qatar,
Turkey, among other countries. Unfortunately, according to
information coming out of Paramaribo, final agreements have
remained elusive, the report relays.
According to Caribbean News Now, SLM wants to be the first
regular-schedule airline to link Cuba with the Guianas and is now
looking to expand. The airline is also looking to put to action
its agreement with Eastern Airline to cooperate on Guyana-New York
route, since Eastern has the type of aircraft to ply the route.
Thus, SLM is urging the government to conclude air agreements with
Guyana, Cuba, Panama, and other countries especially in the
region, the report discloses.
The report relates that a bilateral agreement with Turkey has been
delayed because of dysfunction in Paramaribo. The last visit by a
Surinamese delegation to Turkey, some years ago, ended in a fiasco
because the document to conclude the agreement wasn't ready or was
"left "in Paramaribo, the report says.
The national carrier is of the opinion that the transportation and
foreign ministry of Suriname has never been serious about raising
the profile of SLM, notes the report. But on the other hand, SLM
has always colluded with the government to close the airspace of
Suriname to competition. The airline has served the interest and
needs of governments in power since 1975. After all, the company
is owned by the government, and over decade-old corruption and
political interference has plagued SLM, says the report.
Caribbean News Now discloses that two reports by the Organisation
of Islamic Cooperation (OIC) and the Inter-American Development
Bank (IDB) concluded that there are "barriers affecting the
tourism industry of Suriname", such as "low government
prioritization of travel and tourism, aviation infrastructure,
political instability, visa requirements, aviation safety and
security, and low air service (few carriers)," the report relays.
However, safety and security have improved, and Suriname's Johan
Pengel Airport (JAP) is now Category 1 according to the US
Department of Transportation rubric, the report notes.
According to the World Economic Forum (WEF), Suriname's government
policy does not place a high priority on travel and tourism (3.6
on a scale of 7, ranked 114 out of 140 countries), the report
discloses. This lack of prioritization by the government on
travel and tourism is also reflected in the small share of the
government budget, only 1.7%, devoted to the sector, the report
says.
This underinvestment, especially when compared to established
tourism markets such as Qatar and the United Arab Emirates, which
each spend 5.6% and 5.5% of their national budgets, respectively,
could make the development of future air service a challenge, the
report adds.
=================
X X X X X X X X X
=================
LATAM: CDB, IDB Sign Agreement to Foster Caribbean Development
--------------------------------------------------------------
RJR News reports that the Caribbean Development Bank and the
Inter-American Development Bank have signed a memorandum of
understanding to strengthen their ongoing partnership in
addressing the Caribbean's development priorities.
Through the MOU, signed at the IDB's headquarters in Washington,
D.C., both institutions have renewed their commitment to
collaborating on programs and projects that contribute to
sustainable economic development in the region, according to RJR
News.
The agreement formalizes their cooperation in CDB borrowing member
countries that are also members of the IDB, and countries in the
Organization of Eastern Caribbean States (OECS), the report notes.
Through a unique charter provision, IDB resources are channeled to
OECS countries that are not members of the Washington-based bank,
through CDB, the report relays.
***********
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, Ivy B.
Magdadaro, and Peter A. Chapman, Editors.
Copyright 2017. 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 * * *