/raid1/www/Hosts/bankrupt/TCRLA

/raid1/www/Hosts/bankrupt/TCRLA_Public/170712.mbx T R O U B L E D C O M P A N Y R E P O R T E R L A T I N A M E R I C A Wednesday, July 12, 2017, Vol. 18, No. 136 Headlines A N T I G U A A N D B A R B U D A ANTIGUA AND BARBUDA: Banks Adversely Affected By De-Risking A R G E N T I N A AMES X: Moody's Rates ARS22.94MM Certificates Ca(sf) CMA ARGENTINA: Moody's Affirms B-bf Global Scale Ratings B O L I V I A BOLIVIA: Fitch Affirms B Short-Time Foreign and Local Currency IDR B R A Z I L BR PROPERTIES: Fitch Affirms BB- Long-Term IDR; Outlook Negative COSAN LIMITED: Fitch Affirms BB Long-Term IDR; Outlook Stable CYRELA COMMERCIAL: Fitch Ups IDR to BB-; Revises Outlook to Stable OI SA: Stalled Legislation Hampers Recovery Process C A Y M A N I S L A N D S LIFE PREMIUM: Chapter 15 Case Summary C O L O M B I A BANCO DE BOGOTA: Moody's Changes Outlook to Stable M E X I C O COACALCO MUNICIPALITY: Moody's Affirms Caa1 Local Currency Rating P U E R T O R I C O SHORT BARK: Case Summary & 20 Largest Unsecured Creditors WEST WINDOWS: Taps Heriberto Acevedo as Accountant - - - - - =================================== A N T I G U A A N D B A R B U D A =================================== ANTIGUA AND BARBUDA: Banks Adversely Affected By De-Risking ----------------------------------------------------------- antiguaobserver.com reports that the Economic Commission for Latin America and the Caribbean (ECLAC) says 67% of the banks in Antigua and Barbuda have been adversely affected by de-risking. This is the outcome of a regional study that is looking at the economic impact of de-risking on the economies of the Caribbean, according to the report. antiguaobserver.com relates that the study, conducted by ECLAC, an agency of the United Nations, said that on the other hand, in the nonbanking sector the figure has been considerably lower, standing at 35 per cent. According to the report, Belizian national Dr Ydahlia Metzgen, an economist, who is leading the study, said they just completed a visit to St John's where they conducted a series of interactions with representatives from local, off-shore banks and foreign-owned banks, credit unions, money transfer operations, financial regulators, and private sector Non-Governmental Organisations (NGOs) among others. Belize and St Kitts Nevis are also being used as part of the case study for the project, the report states. antiguaobserver.com relates that Dr. Metzgen said a study among the banking sector and the non-banking financial services sector in all three territories revealed that many have been adversely affected by derisking. "The survey results based on these entities which responded by completing the questionnaire, showed that 64 per cent of the banking sector had been adversely affected while the figure for the non-banking sector stood at 51 per cent," the report quotes Dr. Metzgen as saying. The economist said the Caribbean needs to have a healthy banking sector in order for it to achieve it wider goals of providing a higher standard of living for its people, the report relays. For Antigua and Barbuda, she said from the information gleaned so far, it appears that the country is ahead of most with respect to its banks which have been taking the necessar steps not only to upgrade their systems, but also to appoint compliance officers, antiguaobserver.com relays. She said the role of these officers is to ensure that the banks are compliant with the latest advisories coming from local legislators as well as from the external banks and watchdog agencies, adds antiguaobserver.com. In the case of Belize, that was hit early and hard by the de- risking problem, she said the banks have been able to cope by putting in place an updated AML/CTF framework and to move to automated software systems that automatically trigger suspicious activities, antiguaobserver.com reports. ================= A R G E N T I N A ================= AMES X: Moody's Rates ARS22.94MM Certificates Ca(sf) ---------------------------------------------------- Moody's Latin America Agente de Calificacion de Riesgo S.A. (Moody's) rates Fideicomiso Financiero AMES X, a transaction that will be issued by TMF Trust Company (Argentina) S.A. - acting solely in its capacity as Issuer and Trustee. This credit rating is subject to the fulfillment of contingencies that are highly likely to be completed, such as finalization of documents and issuance of the securities. This credit rating is based on certain information that may change prior to the fulfillment of such contingencies, including market conditions, financial projections, transaction structure, terms and conditions of the issuance, characteristics of the underlying assets or receivables, allocation of cash flows and of losses, performance triggers, transaction counterparties and other information included in the transaction documentation. Any pertinent change in such information or additional information could result in a change of this credit rating. - ARS 38,085,915 in Class A Floating Rate Debt Securities (VRD) of "Fideicomiso Financiero AMES X", rated Aaa.ar (sf) (Argentine National Scale) and Ba3 (sf) (Global Scale). - ARS 22,949,205 in Certificates (CP) of "Fideicomiso Financiero AMES X", rated Ca.ar (sf) (Argentine National Scale) and Ca (sf) (Global Scale). RATINGS RATIONALE The rated securities are payable from the cash flow coming from the assets of the trust, which is an amortizing pool of approximately 1,589 eligible personal loans denominated in Argentine pesos, with a fixed interest rate, originated by the Asociacion Mutual de la Econom°a Solidaria ("AMES"), for a principal amount of ARS 30,373,807. The VRD will bear a floating interest rate (BADLAR plus 300 bps). The VRD's interest rate will never be higher than 29.0% or lower than 22.0%. These personal loans are granted to employees of the City of Buenos Aires (rated B3/Baa1.ar) using a "Codigo de Descuento". The "Codigo de Descuento" is an identifier granted by a government- related entity (in this case the City of Buenos Aires) that allows deducting a personal loan's installment directly from the borrowers' paycheck. The originator access an Internet-based system to verify the borrower's disposable income and originate the personal loan. The maximum DTI ratio established by the City of Buenos Aires is 50%. In this transaction, the City of Buenos will be instructed to send, on a monthly basis, the scheduled principal and interest on the securitized loans directly to the trust account. In turn, the trustee, based on the master servicer's reports will reconcile any amounts that belong to the originator. The automatic deduction of the loans' installments reduces significantly the probability of default of the loans, which is not dependent on the borrower's willingness to pay. In this type of loan the main causes of delinquency are: (i) termination of the work relationship between the borrower and the Government of the City of Buenos Aires, (ii) judicial embargos, that may limit the maximum disposable income that can be deducted by the GCBA, (iii) increases in the Minimum Wage that increases the minimum disposable income that the employee must receive net of deductions, (iv) variable components of the wages that are not collected in a particular month and therefore decreases the disposable income (v) and unpaid work licenses. Initial negative overall credit enhancement is mitigated by a turbo sequential structure, which allows for the building of credit enhancement since first coupon payment. In addition the transaction has various reserve funds and excess spread. Factors that would lead to an upgrade or downgrade of the ratings: Factors that may lead to a downgrade of the ratings include an increase in delinquency and prepayment levels higher than Moody's original expectations, or a disruption in the flow of payments from the City of Buenos Aires. Factors that may lead to an upgrade of the ratings include the building of credit enhancement over time due to the turbo sequential payment structure, when compared with the level of projected losses in the securitized pool. Loss and Cash Flow Analysis: Moody's considered the historical performance of AMES's portfolio, factors common to consumer loans securitizations such as delinquencies, prepayments and losses; as well as specific factors related to the Argentine market, such as the probability of an increase in losses if there are changes in the macroeconomic scenario in Argentina. These factors were incorporated in a cash flow model that takes into account all the relevant features of the transaction's assets and liabilities. Monte Carlo simulations were run, which determines the expected loss for the rated securities. In assigning the rating to this transaction, Moody's assumed a lognormal distribution for defaults on the main pool with a mean of 7% and a coefficient of variation of 70%. Also, Moody's assumed conditional prepayment rate (CPR) of 20.5%. These assumptions are derived from the historical performance to date of AMES' pools and prior transactions. The model results showed 0.7% expected loss for VRD and 62.1% for the Certificates. Stress Scenarios: Moody's ran several stress scenarios, including increases in the default rate assumptions. If default rates were increased 3% from the base case scenario for the pool (i.e., mean of 10% and a coefficient of variation of 70%), the ratings of VRD would likely decreased to B1 (sf). The rating of the Certificates would be unchanged. Moody's also applied a stress to the cash flows by assuming an interruption of the salary payments of the City of Buenos Aires. The assigned ratings are consistent with this stress scenario. The principal methodology used in these ratings was "Moody's Approach to Rating Consumer Loan-Backed ABS " published in September 2015. For more information on this transaction, please refer to the Pre- Sale Report to be published in moodys.com.ar. Moody's National Scale Credit Ratings (NSRs) are intended as relative measures of creditworthiness among debt issues and issuers within a country, enabling market participants to better differentiate relative risks. NSRs differ from Moody's global scale credit ratings in that they are not globally comparable with the full universe of Moody's rated entities, but only with NSRs for other rated debt issues and issuers within the same country. NSRs are designated by a ".nn" country modifier signifying the relevant country, as in ".za" for South Africa. For further information on Moody's approach to national scale credit ratings, please refer to Moody's Credit rating Methodology published in May 2016 entitled "Mapping National Scale Ratings from Global Scale Ratings". While NSRs have no inherent absolute meaning in terms of default risk or expected loss, a historical probability of default consistent with a given NSR can be inferred from the GSR to which it maps back at that particular point in time. For information on the historical default rates associated with different global scale rating categories over different investment horizons. CMA ARGENTINA: Moody's Affirms B-bf Global Scale Ratings -------------------------------------------------------- Moody's Latin America Agente de Calificacion de Riesgo (Moody's) upgraded the bond fund national scale rating (NSR) of seven bond funds, and affirmed their global scale ratings (GSR). The following is a list of the rating actions related to these funds: * CMA Argentina FCI's NSR was upgraded to Aa-bf.ar from A-bf.ar; its GSR was affirmed at B-bf * Consultatio Renta Local's NSR was upgraded to Aa-bf.ar from A- bf.ar; its GSR was affirmed at B-bf * Consultatio Renta Mixta FCI's NSR was upgraded to Aa-bf.ar from A-bf.ar; its GSR was affirmed at B-bf * Galileo Renta Fija FCI's NSR was upgraded to Aa-bf.ar from A- bf.ar; its GSR was affirmed at B-bf * Goal Ahorro Max FCI's NSR was upgraded to Aa-bf.ar from A-bf.ar; its GSR was affirmed at B-bf * 1822 Raices Renta en Pesos FCI's NSR was upgraded to Aa-bf.ar from Baa-bf.ar; its GSR was affirmed at B-bf * IAM Renta Crecimiento FCI's NSR was upgraded to A-bf.ar from Baa-bf.ar; its GSR was affirmed at B-bf RATINGS RATIONALE The upgrades of the national scale ratings reflect a sustained improvement in the Funds' maturity-adjusted weighted average credit quality profiles. Changes to investment strategy which have led to increased exposure to LEBACs (local TBILLs) has lifted the Funds' global scale rating profile within the B-bf rating category. The Funds' elevated positioning within the B-bf global scale rating category results in higher national scale ratings based on Moody's national scale rating mapping for Argentenian bond funds. The upgrades to the national scale ratings are further supported by Moody's expectations that the funds will sustain their improved credit profiles. The principal methodology used in these ratings was Moody's Bond Fund Rating Methodology published in May 2013. Moody's National Scale Credit Ratings (NSRs) are intended as relative measures of creditworthiness among debt issues and issuers within a country, enabling market participants to better differentiate relative risks. NSRs differ from Moody's global scale credit ratings in that they are not globally comparable with the full universe of Moody's rated entities, but only with NSRs for other rated debt issues and issuers within the same country. NSRs are designated by a ".nn" country modifier signifying the relevant country, as in ".za" for South Africa. For further information on Moody's approach to national scale credit ratings, please refer to Moody's Credit rating Methodology published in May 2016 entitled "Mapping National Scale Ratings from Global Scale Ratings". While NSRs have no inherent absolute meaning in terms of default risk or expected loss, a historical probability of default consistent with a given NSR can be inferred from the GSR to which it maps back at that particular point in time. For information on the historical default rates associated with different global scale rating categories over different investment horizons. ============= B O L I V I A ============= BOLIVIA: Fitch Affirms B Short-Time Foreign and Local Currency IDR ------------------------------------------------------------------ Fitch Ratings has affirmed Bolivia's sovereign ratings as follows: -- Long-Term Foreign and Local Currency Issuer Default Ratings (IDRs) at 'BB-', Outlook Stable; -- Senior unsecured Foreign and Local Currency bonds at 'BB-'; -- Country Ceiling at 'BB-'; -- Short-Term Foreign and Local Currency IDRs at 'B'. KEY RATING DRIVERS Bolivia's ratings are supported by its strong external balance sheet, firm economic growth, and moderate public debt burden with low refinancing risk and debt service costs. These strengths are balanced by high fiscal and external deficits stemming from a structural terms-of-trade shock and expansionary policy response, involving steady erosion of buffers, and structural weaknesses in terms of low per-capita income and weak indicators of governance and the business climate relative to peers. The Stable Outlook reflects Fitch's view that the authorities will be able to contain the on-going erosion in fiscal and external balance sheets, which should remain strong relative to 'BB' category peers in the forecast period. Moreover, liquidity and solvency metrics have eroded at a pace broadly in line with Fitch's prior expectations incorporated in last year's downgrade from 'BB' to 'BB-'. However, beyond the two-year forecast horizon it is unclear if policies will be implemented that will stabilize the deterioration in the fiscal and external balance sheets. Bolivia's economic growth moderated to 4.3% in 2016 from 4.9% in 2015, below the official and Fitch's own prior forecasts, but marking a continued strong and stable performance. Lower government spending in the face of reduced natural gas revenues implied a somewhat reduced fiscal impulse, but broader monetary, credit and salary policies have remained supportive of growth. Fitch projects continued firm growth of 4% in 2017-2018. Inflation has fallen to low levels (1.8% in the 12 months through June) and monetary policy has remained expansionary. Credit growth remains high as banks have aimed to meet quotas under the Financial Services Law. Indicators of solvency, asset quality and profitability in the banking sector remain sound. Reduced fiscal revenues and execution challenges pose increasing constraints to the state-led growth model and could make medium- term prospects more dependent on private investment trends. Key bottlenecks include a rigid labour market and weak confidence in the legal framework according to surveys, which continue to weigh on the business climate despite government measures to improve it. Private investment at 8% of GDP in 2016 remains low. Ambitious public industrialization projects may result in a more limited economic boost than expected, in Fitch's view. Finished projects are operating below capacity, and others scheduled to open face uncertain timing, profitability and buyer commitments. The key gas sector is facing supply and demand challenges. Production is faltering on declines in mature fields (more than offsetting the boost from the new Incahuasi field) and more volatile Brazilian demand. Argentina fined Bolivia for sending gas below the contractual minimum in 2016. Production after 2019 is unclear in the absence of major discoveries and reserves that have not been certified since 2013, but the authorities aim to ramp up exploration with private companies. Weak gas prices and faltering volumes kept the current account deficit high at 5.5% of GDP in 2016, and foreign direct investment has continued falling. Capital outflows compounded these pressures in 2016, resulting in a USD3 billion fall in foreign reserves to USD10 billion. These FX pressures have persisted in 2017, but reserves have been kept above USD10 billion so far in the year due to one-off boosts from a sovereign bond issuance and changes in commercial bank reserve requirements benefitting the central bank's (BCB) balance sheet. Fitch expects external borrowing and policy actions (e.g. a recent hike in the commission on capital outflows) could ease the pace of reserve declines, but risks persist amid sluggish gas export volumes and prices, and hard-to-predict capital outflows. The sovereign's net foreign creditor position is set to reverse in the forecast period. However, the external liquidity ratio should remain far above the 'BB' median given low external debt service needs and still ample commercial bank and BCB assets. The public sector deficit fell to 6.6% of GDP in 2016 from 6.9% in 2015, balancing a lower general government deficit (3% in 2016, down from 4.5%) with higher deficits among SOEs. This outturn was better than Fitch's prior forecast, as greater-than-expected spending reductions (non-payment of a salary bonus, lower social spending and central and local-government capex) offset a sharp drop in gas revenues. Some payroll and pension obligations normally paid in January had been paid early in December 2015. With this effect eclipsed, the public sector and general government deficits rose to 9.1% and 4.3% of Fitch-estimated GDP, respectively, in the 12 months through March 2017. Fitch expects the fiscal deficit will rise back to higher levels in 2017-2019, reflecting the trend of weak gas revenues seen so far in 2017 and spending pressures that could intensify as 2019 elections approach or if execution of the five-year development plan (PDES) improves. General government debt rose to 32% of GDP in 2016 from 30% in 2015. Fitch projects the debt burden will rise to 38% of GDP by 2019 but remain below the current 'BB median of around 50%. The pace of deposit drawdown has slowed as deficit financing has relied increasingly on borrowing. General government deposits stood at 15% of GDP at end-2016, down from 23% in 2013, but remain relatively high. The indebtedness of public companies has risen considerably in recent years, and debt explicitly guaranteed by the treasury rose to 7.4% of GDP in 2016 from 3.2% in 2014. While this represents a source of contingent liability risk to the sovereign in the context of these companies' broadly weaker profitability, the intra-public sector nature of this debt (namely low-interest central bank loans) is a mitigating factor. Bolivia's public debt profile remains favourable. Refinancing risks are mitigated by low maturities in the coming years averaging 1.6% of GDP, and solid access to multilateral and bilateral lenders (e.g. China), capital markets (evidenced by a successful USD1 billion bond issuance in March), and a captive local market. Interest costs represent just 3.5% of revenues, below a 'BB' median near 9%, reflecting the concessional nature of the bulk of external debt and favourable local interest rates. SOVEREIGN RATING MODEL (SRM) and QUALITATIVE OVERLAY (QO) Fitch's proprietary SRM assigns Bolivia a score equivalent to a rating of 'BB' on the Long-term Foreign Currency IDR scale. Fitch's sovereign rating committee adjusted the output from the SRM to arrive at the final Long-Term Foreign Currency IDR by applying its QO, relative to rated peers, as follows: -- Macroeconomic Performance and Policy Management: -1 notch, to reflect maintenance of expansionary policies (fiscal, monetary, salary, quasi-fiscal) and a stable currency in the face of a structural terms-of-trade shock that is supporting growth at the cost of high fiscal and external deficits, eroding buffers and raising economic vulnerability. 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 Foreign Currency 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 Fitch criteria that are not fully quantifiable and/or not fully reflected in the SRM. RATING SENSITIVITIES The following risk factors individually, or collectively, could trigger a negative rating action: -- Greater than expected deterioration of fiscal and external balance sheets (for example, due to a secular deterioration in the gas production profile); -- Signs of increased macroeconomic instability or stress in the financial system; -- Evidence of external financing constraints. The following risk factors individually, or collectively, could trigger a positive rating action: -- Sustained fiscal deficit reduction that improves public debt dynamics; -- Reduction in the current account deficit and improvement in external solvency and liquidity metrics; -- Evidence of improvement in governance and the business climate that supports stronger investment and growth prospects. KEY ASSUMPTIONS -- Fitch expects Brent oil prices to average USD52.5/b in 2017 and USD55/b in 2018, from USD45.1 in 2016, affecting Bolivian gas prices linked to global oil benchmarks. =========== B R A Z I L =========== BR PROPERTIES: Fitch Affirms BB- Long-Term IDR; Outlook Negative ---------------------------------------------------------------- Fitch Ratings has removed BR Properties S.A.'s from Rating Watch Negative and affirmed the Long-Term Foreign and Local Currency Issuer Default Ratings (IDRs) at 'BB-' and National scale long- term rating at 'A(bra)'. The Rating Outlook for the corporate ratings is Negative. KEY RATING DRIVERS Fitch removed the ratings from Negative Watch following the announcement that BR Properties concluded a capital increase in the amount of BRL953 million in July 2017 and the expected positive impact on the company's high leverage ratios and liquidity. Proceeds will be used to finance the company's asset acquisitions during the last six months of BRL1.2 billion and future acquisitions, and for debt amortization. In July 2017, BR Properties approved the acquisition of condominium Centenario Plaza for BRL433.4 million. On a pro forma basis, net leverage should reduce to about 6.0x considering the capital increase and properties acquisition, from 8.2x in March 2017. The proceeds from the capital increase reduced the strong downgrade pressure in the short term, but the challenges to gradually reduce leverage remains. Ratings pressure could increase if leverage reduction is not addressed in the medium term. BR Properties' strategy for future acquisitions and the successful increase in EBITDA from greenfield assets recently acquired will be key for leverage ratios and determinant for future rating actions. BR Properties' ratings remain supported by the company's position as the largest Brazilian commercial properties company, with high quality of the properties and of its tenant base. The ratings are also supported by the estimated market value of properties of BRL7.1 billion in March 2017 (excluding projects under development), covering in 2.8x the company's net debt, and BR Properties' conservative liquidity strategy. The Negative Outlook reflects BR Properties' important challenges to recover its cash flow generation and preserve leverage at more conservative levels for a longer period, to avoid continued pressure on its ratings. In Fitch's opinion, BR Properties still has to demonstrate its commitment to maintain leverage at lower levels. The company's cash flow generation reduced in the last couple of years, due to the negative business environment and lower scale of operations, which resulted in an increase in leverage and lower interest coverage ratios, and was intensified by relevant properties acquisitions of about BRL1.2 billion from December 2016 to July 2017. Fitch expects EBITDA generation to more significantly improve only in 2018. If BR Properties is not successful in reducing vacancy rates and recovering cash flow generation during the next two years, the ratings will be pressured. BR Properties generated BRL313 million of EBITDA and cash flow from operations (CFFO) was negative BRL135 million in the latest 12 months (LTM) ended March 31, 2017, pressured by high financial expenses of about BRL419 million. In this period, total debt/EBITDA and net debt/EBITDA ratios were 12x and 8.2x, respectively, and compare with 6.1x and 4.0x in 2015. Interest coverage, measured as EBITDA/interest ratio, remains weak and fell to 0.7x in the LTM ended March 31, 2017, from 0.8x in 2016 and 1.5x in 2015. DERIVATION SUMMARY BR Properties is the largest commercial properties company in Brazil, with high quality of the properties and of its tenant base. The company has an estimated market value of properties of BRL7.1 billion in March 2017 (excluding projects under development), with a gross leasable area of 533,144 sqm. BR Properties sold several properties between 2014 and 2016, including the industrial warehouse and retail portfolio, and some office buildings, resulting in lower scale of operations and reduced flexibility during difficult market conditions, as the portfolio is now concentrated in office buildings. As other commercial properties companies in Brazil, BR Properties' vacancy is high, pressured by negative business environment. KEY ASSUMPTIONS Fitch's key assumptions within Fitch ratings case for the issuer include: -- Vacancy rate slowly reducing during 2017 and 2018; -- Sale of assets of BRL240 million in February 2017; -- Properties acquisition of BRL482 million in 2017; -- Net leverage below 6x by the end 2018; -- Maintenance of adequate liquidity. RATING SENSITIVITIES Future Developments That May, Individually or Collectively, Lead to Positive Rating Action A rating upgrade for BR Properties is not likely in the near future. A sustainable recovery of cash flow generation and maintenance of leverage at more conservative levels for a longer period could result in a stabilization of the Rating Outlook. Future Developments That May, Individually or Collectively, Lead to Negative Rating Action -- Net leverage consistently above 6.0x, without the expectation of a reduction trend in the following years; -- EBITDA to gross interest expense coverage ratio consistently \ below 1.0x; -- Liquidity falling to levels that considerably weaken short- term debt coverage; -- Vacancy rates consistently above 20% and higher delinquency rates, which could result in a reduction in operational cash generation; -- Sale of assets that results in a weaker portfolio of properties, with a significant reduction of the company's cash flow generation capacity, absent a strong leverage reduction. LIQUIDITY BR Properties' liquidity was strong as of March 31, 2017, benefitting from the sale of assets. Total cash and marketable securities was BRL1.2 billion and total debt was BRL3.8 billion. Cash covered short-term debt by 1.8x and was used to finance the company's negative free cash flow. FULL LIST OF RATING ACTIONS Fitch has affirmed the following ratings: BR Properties S.A. -- Long-Term Foreign Currency IDR at 'BB-'; -- Long-Term Local Currency IDR at 'BB-'; -- USD285 million senior unsecured perpetual notes at 'BB-'; -- Long-term national scale rating at 'A(bra)'. The ratings have been removed from Rating Watch Negative, and the Outlook for the corporate ratings is Negative. COSAN LIMITED: Fitch Affirms BB Long-Term IDR; Outlook Stable ------------------------------------------------------------- Fitch Ratings has affirmed the Long-Term Foreign and Local Currency Issuer Default Ratings (IDRs) of Cosan Limited at 'BB'. The Rating Outlook is Stable. KEY RATING DRIVERS Cosan Limited's ratings reflect its low leverage and robust liquidity position on a standalone basis, as well as the expected comfortable debt service coverage through the dividends coming from its main subsidiary, Cosan S.A Industria e Comercio (Cosan; Foreign and Local Currency IDRs of 'BB+' and Long-Term National Scale Rating 'AA+(bra)'). Cosan and its subsidiaries accounted for around 90% of Cosan Limited's consolidated pro-forma revenues, 75% of pro-forma EBITDA and 100% of dividends received in the latest- 12-months (LTM) ended March 31 2017. The one-notch difference compared to Cosan's ratings continues to incorporate the holding company nature and inherent structural subordination of Cosan Limited's debt to dividends received from Cosan. Cosan Limited's credit profile is also supported by a diversified asset portfolio. The company's investments include operations in energy generation from biomass, distribution of natural gas, fuel and lubricants. These businesses enjoy predictable cash flow that partly softens the inherent volatilities of its sugar and ethanol business. The company also operates in the logistic industry, which is not expected to distribute dividends over the next four years though it presents strong growth potential. Robust Asset Portfolio Cosan Limited is a non-operating holding company that carries a robust and diversified asset portfolio that reduces sector concentration risks. The company holds a 62% interest in Cosan, the holding company that is engaged in sugar, ethanol and energy production, and distribution of natural gas, lubricants and fuel. Its three main assets and source of dividends are companies with robust credit quality. Raizen Combustiveis S.A. (Raizen Combustiveis; Foreign and Local Currency IDRs 'BBB', National Scale Rating 'AAA(bra)') is the second largest fuel distributor in Brazil, with predictable operational cash generation. Despite its more volatile results, Raizen Energia S.A. (Raizen Energia; rated the same as Raizen Combustiveis) is the largest sugar and ethanol company in Brazil and as such it benefits from business scale, which somewhat mitigates the frequent challenging scenario for the sector. Companhia de Gas de Sao Paulo (Comgas; Foreign Currency IDR 'BB+', Local Currency IDR 'BBB-', National Scale Rating 'AAA(bra)') is the largest natural gas distributor in Brazil, with high growth potential and robust financial profile. The other asset that Cosan invests in is Cosan Lubrificantes S.A., which adds to business diversification. All of Cosan's businesses managed to report strong credit profiles in LTM ended March 2017, despite the challenging macroeconomic scenario in Brazil. During the LTM ended March 2017, Comgas's normalized EBITDA was BRL1.5 billion, which positively compares with BRL1.4 billion and BRL1.3 billion, reported respectively in 2015 and 2014. In the same period, Raizen Combustiveis and Raizen Energia reported consolidated revenues and EBITDAR of BRL79 billion and BRL6.5 billion, respectively, 7% and 9% higher than previous year. Cosan Limited also holds 72% interest in Cosan Logistica S.A (Cosan Logistica), which owns 28% of Rumo S.A. (Rumo; Foreign and Local Currency IDRs 'BB-', National Scale Rating 'A(bra)'). While still highly levered, Fitch expects Rumo to embark on a fast deleverage trend following the company's ongoing gains of scale and improving operating profitability. Fitch does not expect Rumo to pay dividends over the next four years due to the massive capex necessary to improve operations. The presence of Rumo contributes to broader business diversification and helps the group to further lessen the cash flow volatility derived from the sugar and ethanol business. Low Leverage at Holding Level As of March 31 2017, Cosan Limited posted low leverage on a standalone basis. At the holding company level, Cosan Limited's leverage measured as net debt-to-dividends received was 0.9x as per Fitch's calculations, in line with 0.8x as of Dec. 31, 2016. The one-notch difference from Cosan's incorporates the structural subordination of Cosan Limited's debt. Its main dividends provider - Cosan - receives dividends from Raizen Energia, Raizen Combustiveis and Comgas and must serve or manage its own debt before paying dividends to its shareholders. On a consolidated basis, Cosan Limited's leverage is also adequate for the rating category even with the consolidation of Rumo. The net adjusted debt-to-EBITDAR was at 3.1x when dividends received from non-consolidated subsidiaries are factored into EBITDAR figures. Fitch expects the logistics division to slow down the deleveraging process of the group, and for Cosan Limited's consolidated net debt-to-EBITDAR plus dividends received to stay at 2.9x and 2.7x in 2017 and 2018, respectively. KEY ASSUMPTIONS -- Increased flow of dividends coming from Comgas, Raizen Combustiveis and Raizen Energia to Cosan, over the next two years, reaching around BRL1.5 billion per year. -- Cosan Logistica not to pay meaningful dividends over the next four years. -- No additional investments coming from Cosan Limited. -- Flexibility of Cosan Limited to reduce the payouts to its shareholders if necessary. RATING SENSITIVITIES Future developments that may, individually or collectively, lead to a negative rating action include: -- Expectation of debt service coverage ratio at Cosan Limited level below 0.5x when the debt matures in 2018, based on reduced dividends to be received; -- Cosan Limited entrance in new investments financed by debt; and -- Deterioration of the credit profile of either Cosan or Cosan Logistica. Future developments that may, individually or collectively, lead to a positive rating action include: -- Improvement of the credit profile of either Cosan or Cosan Logistica; and -- Expectation of stronger than anticipated debt service coverage ratio at Cosan Limited based on more robust dividends received LIQUIDITY Cosan Limited posted healthy debt service coverage ratios on a standalone basis as of March 31, 2017, with cash plus dividends received-to-short-term debt ratio at 29x. At the same date, the company reported a cash position of BRL214 million and total debt of BRL704 million, of which short-term debt was BRL26 million. Dividends received amounted to BRL543 million in the LTM ended March 31, 2017. Cosan Limited's total debt consisted of bank debt taken on to finance the acquisition of Cosan Logistica shares. The group's strong financial flexibility relative to its access to the debt and capital markets, in combination with dividends received from Comgas, Raizen Energia and Raizen Combustiveis, ensures strong refinancing capacity for Cosan Limited. Fitch believes Cosan Limited has the flexibility to reduce the payouts to its shareholders if necessary FULL LIST OF RATING ACTIONS Fitch has affirmed the following ratings: Cosan Limited -- Long-Term Foreign and Local Currency IDRs at 'BB'. The Rating Outlook is Stable. CYRELA COMMERCIAL: Fitch Ups IDR to BB-; Revises Outlook to Stable ------------------------------------------------------------------ Fitch Ratings has upgraded Cyrela Commercial Properties S.A. Empreendimentos e Participacoes' (CCP) Long-Term Foreign and Local Currency Issuer Default Ratings (IDR) to 'BB-' from 'B+' and its National Long-Term rating to 'A(bra)' from 'BBB+(bra)'. The Rating Outlook for the corporate ratings is revised to Stable from Negative. KEY RATING DRIVERS The rating upgrades follow the announcement that CCP concluded the transaction to sell and exchange assets with Canada Pension Plan Investment Board (CPPIB) and Prologis, and the material positive impact expected on the company's capital structure. Fitch considered the expected proceeds from the sale of assets, in the amount of BRL1.13 billion, will be used to amortize about BRL1 billion of debt in 2017, reducing leverage to significantly more conservative levels and improving interest coverage ratios. The rating action incorporates Fitch's expectation that CCP will preserve more conservative leverage on a recurring basis, when the transaction is concluded and relevant volume of debt is amortized. On July 4, 2017, CCP announced two transactions with its partners in the logistics warehouses business. The transactions include: (i) CCP will transfer to CPPIB 33% equity interest in the companies which own the CCP corporate offices portfolio; (ii) In exchange, CPPIB will transfer to CCP its equity interest in the companies which own the logistic warehouses portfolio; (iii) Establish guidelines for the creation of new joint ventures between CCP and CPPIB towards new investments in corporate offices in the amount of up to USD400 million; and (iv) CCP will sell to Prologis 100% of CCP's interest (considering CPPIB transaction) in CCP Logistica Empreendimentos Imobiliarios S.A. (CCP Logistica), for BRL1.2 billion, of which CCP will receive BRL1.13 billion. CCP's high leverage will significantly reduce following the sale of assets. On a pro forma basis, net debt/adjusted EBITDA (including dividends received) ratio will improve to 5.1x, from 8.9x reported in the latest 12 months (LTM) ended March 2017 and 8.4x in 2016, and incorporates a net debt reduction of about BRL1 billion and lower annual EBITDA generation of about BRL46 million. This compares with the previous expected reduction of net leverage to about 7.0x by the end 2018, during the March 2017 rating review that included the expectation of asset sales close to BRL500 million. CCP still has the challenge to improve cash flow generation in less favorable macroeconomic conditions. Fitch expects free cash flow (FCF) to remain highly pressured by weak operational cash generation, despite lower cash burn from reduced financial expenses and investments. Vacancy rates should remain high and lease spreads in rental contracts below inflation in 2017, which should continue to limit company's cash flow generation. The sale of 33% equity interest in the companies which own the CCP corporate offices portfolio and the sale of CCP Logistica will also negatively affect cash flow generation. High volume of lease contracts expiring or with market alignment expected in the short term also presents challenges to CCP. CCP generated BRL235 million of adjusted EBITDA and cash flow from operations (CFFO) was BRL34 million in the LTM ended March 31, 2017, pressured by high financial expenses of about BRL229 million. During this period, total debt/EBITDA and net debt/EBITDA ratios were 10.1x and 8.9x, respectively, and compare with 8.5x and 6.6x in 2015. Interest coverage, measured as EBITDA/interest ratio, was 1x in the LTM ended March 31, 2017, stable compared with 2016. CCP's ratings continue to benefit from the company's high quality portfolio and adequate financial flexibility, that has been tested and remain preserved based on the company's continued access to new credit lines, in a scenario of restricted credit. This positive access limited refinancing risk. During the last three years, the company received BRL400 million of capital increase from shareholders and BRL220 million from the sale of assets, in addition to the recent announcement. DERIVATION SUMMARY CCP is one of the largest companies of investment, lease and commercialization of commercial properties in Brazil, with a diversified and high quality portfolio. The diversification of revenues from shopping centers, office buildings, industrial warehouses and services adds more flexibility to the company. Following the conclusion of the transaction, the company will have an estimated market value of properties of BRL3.3 billion (excluding projects under development), with a gross leasable area of 279,278 sqm. As other commercial properties companies in Brazil, CCP's vacancy is high, pressured by negative business environment. KEY ASSUMPTIONS Fitch's key assumptions within Fitch ratings case for the issuer include: -- Vacancy rates between 10% and 20% for office and warehouse and 8% for shopping in 2017; -- Reduction in average rent up to 10% in 2017; -- Closure of transactions with CPPIB and Prologis in 2017; -- Net leverage around 5.0x in 2017; -- Low investments of BRL65 million in 2017 and 2018. Investments in the JV with CPPIB are not considered. RATING SENSITIVITIES Future Developments That May, Individually or Collectively, Lead to Positive Rating Action Positive rating actions are unlikely due to the difficult business environment. However, the following factors could lead to positive rating actions. -- Significant improvement in the company's cash flow generation; -- Net leverage consistently below 5.0x; -- EBITDA to gross interest expense coverage ratio above 1.3x, on a recurring basis. Future Developments That May, Individually or Collectively, Lead to Negative Rating Action -- Net leverage consistently above 6.0x, without the expectation of a reduction trend in the following years; -- EBITDA to gross interest expense coverage ratio consistently below 1x; -- Liquidity falling to levels that considerably weaken short- term debt coverage; -- Sale of assets that results in a weaker portfolio of properties, with a significant reduction of the company's cash flow generation capacity, and not followed by a strong leverage reduction. LIQUIDITY CCP's liquidity will improve with the proceeds from the sale of assets and part of the proceeds will be used to prepay about BRL1 billion of debt, materially minimizing the refinancing pressure during the next couple of years. As of March 31, 2017, cash and marketable securities totaled BRL293 million and total debt, BRL2.4 billion. The company has BRL381 million of debt maturing in the short term and BRL306 million from April to December 2018, of which BRL127 million and BRL192 million, respectively, consisted of corporate debt. FULL LIST OF RATING ACTIONS Fitch has upgraded the following ratings: Cyrela Commercial Properties S.A. Empreendimentos e Participacoes -- Long-term Foreign Currency IDR to 'BB-, from' 'B+'; -- Long-term Local Currency IDR to 'BB-', from 'B+'; -- Long-term National Scale rating to 'A(bra)', from 'BBB+(bra)'; -- Fifth debenture issuance, in the amount of BRL200 million, due in 2019, to 'A(bra)', from 'BBB+(bra)'; -- Eighth debenture issuance, in the amount of BRL200 million, due in 2020, to 'A(bra)', from 'BBB+(bra)'. The Rating Outlook for the corporate ratings was revised to Stable, from Negative. OI SA: Stalled Legislation Hampers Recovery Process --------------------------------------------------- Fabiola Moura at Bloomberg News reports that for more than a year, Oi SA has struggled to reach a deal with various factions jockeying for a leg up in its US$19 billion bankruptcy case. Almost entirely absent from that process is the company's single biggest creditor, Bloomberg notes. According to Bloomberg, Brazil's government claims that Oi owes telecom regulator Anatel as much as BRL20 billion (US$6.1 billion), but current law forbids the agency from accepting any sort of haircut or extending the payment schedule. Now, two pieces of legislation that would free up the regulator to negotiate are stalled as Brazil President Michel Temer and hundreds of politicians fight for their political survival following a new round of graft allegations, Bloomberg discloses. "Nothing is getting done," Bloomberg quotes Anatel President Juarez Quadros as saying in a telephone interview from Brasilia. "Because of that, we're unable to offer any guidance or say anything." The paralysis that's gripped the nation's capital is stymieing Oi's recovery process, Bloomberg states. While the telecom giant says it's meeting regularly with creditors and shareholders to work out the final details, the Anatel debt has become a major sticking point, Bloomberg relays. According to Bloomberg, without that final piece, Oi may not be able to hold a planned general assembly by September, raising the chances the government will have to step in to rescue the nation's largest operator of landlines. Potential investors are reluctant to pour new money into the embattled phone operator until they know that the Anatel debt can be renegotiated, Bloomberg relays, citing a person close to the negotiations. The person said the legislative delay is also making debt holders hesitant to agree to a haircut, Bloomberg notes. Held hostage by the crisis is a presidential decree that would allow Anatel to extend the payment schedule on the debt to 20 years from the current seven-year limit, and pave the way for exchanging part of the fines for investments, Bloomberg discloses. The trustee overseeing the bankruptcy case has said Anatel is entitled to claim BRL11.1 billion in the negotiations, Bloomberg relates. Also in limbo is legislation that would free Oi up from some of the onerous regulation that led to that monstrous bill in the first place, Bloomberg notes. About Oi SA Headquartered in Rio de Janeiro, and operating almost exclusively within Brazil, the Oi Group provides services like fixed-line data transmission and network usage for phones, internet, and cable, Wi-Fi hot-spots in public areas, and mobile phone and data services, and employs approximately 142,000 direct and indirect employees. On June 20, 2016, pursuant to Brazilian Law No. 11.101/05 (the "Brazilian Bankruptcy Law"), Oi S.A. and certain of its subsidiaries filed for recuperas judicial (judicial reorganization) in Brazil. On June 21, 2016, OI SA and its affiliates Telemar Norte Leste S.A. and Oi Brasil Holdings Cooperatief U.A. commenced Chapter 15 proceedings (Bankr. S.D.N.Y. Lead Case No. 16-11791). Ojas N. Shah, as foreign representative, signed the petitions. Coop and PTIF are also subject to proceedings in the Netherlands. The Chapter 15 cases are assigned to Judge Sean H. Lane. In the Chapter 15 cases, the Debtors are represented by John K. Cunningham, Esq., and Mark P. Franke, Esq., at White & Case LLP, in New York; and Jason N. Zakia, Esq., Richard S. Kebrdle, Esq., and Laura L. Femino, Esq., at White & Case LLP, in Miami, Florida. On July 22, 2016, the New York Court recognized the Brazilian Proceedings as foreign main proceedings with respect to the Chapter 15 Debtors, and granted certain additional related relief. =========================== C A Y M A N I S L A N D S =========================== LIFE PREMIUM: Chapter 15 Case Summary ------------------------------------- Chapter 15 Petitioner: Andrew Richard Victor Morrison FTI Consulting (Cayman) Limited 53 Market Street, Suite 3212 P.O. Box 30613 Camana Bay Grand Cayman, KY1-1203 Cayman Islands Tel: 212-488-1200 Foreign Proceeding in which appointment of the foreign representative occurred: Fin. Servs. Div. of the Grand Ct. Cayman Is., Cause No. FSD 3 of 2015 (AJJ) Chapter 15 Debtor: Life Premium Fund, SPC FTI Consulting 53 Market Street, Suite 3212 P.O. Box 30613 Camana Bay Grand Cayman KY1-1203 Cayman Islands Chapter 15 Case No.: 17-11899 About the Debtor: Life Premium Fund was incorporated on May 8, 2007, in the Cayman Islands as a closed-ended exempted segregated portfolio company under the laws of the Cayman Islands. The Company has an authorized share capital of $50,000 divided into 100 "voting shares" and 4,999,900 "non- voting participating shares", with all shares having a nominal value of $0.01 each. The Company carried on business as an investment fund. It was formed to procure and pool: (1) life insurance policies that insure the lives of elderly persons who were either terminally or chronically ill; and (2) rights to receive death benefits that would otherwise have been paid to the beneficiary of the insured or the original owner, capitalizing on their maturity, or selling the assets prior to their maturity. The Company initially established and operated three segregated portfolios denominated as LS1, LS2 and LS3. An additional portfolio, LS4, was later established in or around August 2011. A winding up order was made in relation to Life Premium Fund, SPC on March 6, 2015. In accordance with the provisions of the Order, David Griffin and Andrew Morrison (FTI Consulting (Cayman) Ltd) were appointed as Joint Official Liquidators. Website: http://www.lpfliquidation.com/ Chapter 15 Petition Date: July 10, 2017 Court: United States Bankruptcy Court Southern District of New York (Manhattan) Judge: Hon. Stuart M. Bernstein Chapter 15 Petitioner's Counsel: David Farrington Yates, Esq. KOBRE & KIM LLP 800 Third Avenue New York, NY 10022 Tel: (212) 488-1211 Email: farrington.yates@kobrekim.com Estimated Assets: Not Indicated Estimated Debts: Not Indicated A full-text copy of the Chapter 15 petition is available at: http://bankrupt.com/misc/nysb17-11899.pdf =============== C O L O M B I A =============== BANCO DE BOGOTA: Moody's Changes Outlook to Stable -------------------------------------------------- Moody's Investors Service has changed Banco de Bogota S.A.'s outlook to stable, from negative. At the same time, Moody's affirmed all of the bank's ratings, including its Baa2 deposit ratings. Moody's also changed the outlooks of Grupo Aval Acciones y Valores, S.A. (Grupo Aval) and Grupo Aval Limited to stable, from negative and affirmed their ratings, including Grupo Aval's Ba2 issuer rating and Grupo Aval Limited's Ba2 senior unsecured debt rating. Issuer: Banco de Bogota S.A. -- LT Senior Unsecured Deposit Rating , Affirmed Baa2, Stable -- ST Deposit Rating, Affirmed P-2 -- Subordinate Regular Bond/Debenture, Affirmed Ba2 -- Adjusted Baseline Credit Assessment, Affirmed ba1 -- Baseline Credit Assessment, Affirmed ba1 -- LT Counterparty Risk Assessment , Affirmed Baa1(cr) -- ST Counterparty Risk Assessment , Affirmed P-2(cr) -- Outlook, Changed To Stable From Negative Issuer: Grupo Aval Acciones y Valores S.A. -- LT Issuer Rating, Affirmed Ba2, Stable -- ST Issuer Rating, Affirmed NP -- Outlook, Changed To Stable From Negative Issuer: Grupo Aval Limited -- Backed Senior Unsecured Regular Bond/Debenture, Affirmed Ba2, Stable -- Outlook, Changed To Stable From Negative RATINGS RATIONALE BANCO DE BOGOTA The change in Banco de Bogota's outlook and affirmation of its ratings consider that the bank has maintained a significantly improved, albeit still modest, level of capital since completing its corporate restructuring in June 2016, and is likely to continue to do so going forward, sustained by sound earnings generation and lower capital consumption as asset growth slowed from previous years. The stable outlook additionally considers that the bank's asset quality remains strong despite a modest increase in delinquencies over the past year, while its liquidity position and funding structure have both improved slightly. Banco de Bogota's adjusted capital ratio has been relatively stable at is March 2017 level of 8.3% for the past year. While this is still modest by global and regional standards, it is considerably stronger than the 4.7% that Moody's estimated as of March 2016. Net income equaled a robust 1.6% of tangible assets in 2016 after adjusting for one-offs, in line with the bank's performance the prior year. Profitability is expected to remain strong this year due to the bank's large interest margins and low operating costs, despite pressures from Colombia's still weak economic environment, continued high credit costs, and slight margin compression arising from the declining policy rates in Colombia. Despite a 40 basis point jump in the first quarter related to some of the bank's large corporate borrowers, NPLs remained modest at 2.1% in March 2017. Nevertheless, the increase highlights the risks stemming from the bank's high single borrower concentration. These delinquencies could further pressure asset risk and profitability if the problems faced by these troubled borrowers do not abate or if the loss rate proves to be higher than currently incorporated into the bank's stock of loan loss reserves. However, Moody's anticipates that any further deterioration will be limited. Due to the slowdown in loan growth, market funds have fallen to just 19% of tangible banking assets as of March, from a peak of 25% in September 2015, while liquid assets have risen to 22.6% of tangible banking assets from 17.5%. Once loan growth starts to accelerate, however, Moody's expect these figures to revert to historical levels. The Baa2 deposit ratings also reflect Moody's assessment that there remains a very high probability that Banco de Bogota will benefit from government support in a situation of stress given the bank's position as the country's second largest deposit taker. The stable outlook of Banco de Bogota's ratings considers that its current financial profile is resilient to potential negative pressures arising from asset risk and profitability in the near term. Also, it incorporates Moody's expectation that capitalization will remain around current levels. Moreover, asset risk pressures should start easing and loan growth should accelerate in 2018 with a gradual recovery of the economy, while profits will benefit from a scheduled decline income tax rates. WHAT COULD CHANGE THE RATING -- DOWN/UP Banco de Bogota's ratings could be downgraded if its capital ratio weakens, or if the bank posts higher-than-expected deterioration in asset risk and profitability. An upgrade of its ratings could derive from a further improvement in its capital position coupled with its ability to preserve asset risk and profitability. GRUPO AVAL AND GRUPO AVAL LIMITED The change in Grupo Aval and Grupo Aval Limited's outlook and affirmation of their ratings is in line with the similar actions taken on Banco de Bogota's outlook and ratings. Grupo Aval's ratings incorporate the structural subordination of the bank holding company's liabilities versus the liabilities of the bank and its other subsidiaries and are notched off the Banco de Bogota's baseline credit assessment. Banco de Bogota is the group's chief operating entity and accounted for nearly 60% of the total dividends paid to the holding company in 2016. The stable outlook and affirmation also acknowledge Grupo Aval's relatively stable leverage ratios, and ample liquidity, with liquid assets sufficient to cover a meaningful portion of debt maturities in the next three years. Moody's does not incorporate governmental support in the holding company's ratings. Grupo Aval Limited's debt ratings are based on Grupo Aval's irrevocable and unconditional guarantee of Grupo Aval Limited's liabilities under the indentures. WHAT COULD CHANGE THE RATING -- DOWN/UP Upward/downward pressures on Grupo Aval and Grupo Aval Limited's ratings would be associated with similar pressures on Banco do Bogota's BCA. The ratings could also face downward pressures following a significant increase in the group's double leverage and debt to cash dividends ratios. The principal methodology used in these ratings was Banks published in January 2016. =========== M E X I C O =========== COACALCO MUNICIPALITY: Moody's Affirms Caa1 Local Currency Rating ----------------------------------------------------------------- Moody's de Mexico affirms the Caa1 (Global Scale, local currency) ratings of the Municipality of Coacalco and upgrades its Mexico's National Scale Issuer Rating to B2.mx from B3.mx. The outlook changed to positive from stable. RATINGS RATIONALE The affirmation of Coacalco's Caa1 issuer ratings reflects very low liquidity, relatively high debt levels and low own-source revenues. In 2016, cash to current liabilities stood at 0.17 times and the municipality continues to rely on short-term debt. Coacalco's net direct and indirect debt was equivalent to 49.8% of operating revenues versus the B3-Caa1 peers average of 35.4% and its own-source revenues to operating revenues ratio of 29.1% is much lower than the peers average of 44%. The change of outlook to positive from stable and the upgrade of the National Scale issuer rating to B2.mx from B3.mx reflects Coacalco's improvement of its operating balances and consolidated financial results. The gross operating balance increased to 14.5% of operating revenues in 2016 from -14.5% in 2014 and it recorded cash financing surpluses in 2015 and 2016 that averaged 16.9% of total revenues. Financial results for April 2017 show operating revenues growing at 17.9% compared to April 2016, however, operating expenditures are more than doubling. If this trend continues, gross operating balances will decrease significantly to around -0.2% of operating revenues. As a result, Moody's expects that operating expenditures will rise more than in previous years and that gross operating balances will decline in 2017 and 2018, but within levels that are in line with its Caa1 rating. WHAT COULD CHANGE THE RATINGS UP/DOWN If Coacalco's gross operating balances stay positive, its liquidity improves further and debt levels remain stable, issuer ratings could be upgraded. Given the positive outlook a downgrade on Coacalco's issuer ratings is not expected. However, a sudden decrease in cash reserves in combination with more short term debt could exert downward pressure on the ratings. The principal methodology used in this rating was Regional and Local Governments published in January 2013. The period of time covered in the financial information used to determine Municipality of Coacalco's rating is between 01/01/2012 and 12/31/2016. Moody's National Scale Credit Ratings (NSRs) are intended as relative measures of creditworthiness among debt issues and issuers within a country, enabling market participants to better differentiate relative risks. NSRs differ from Moody's global scale credit ratings in that they are not globally comparable with the full universe of Moody's rated entities, but only with NSRs for other rated debt issues and issuers within the same country. NSRs are designated by a ".nn" country modifier signifying the relevant country, as in ".za" for South Africa. For further information on Moody's approach to national scale credit ratings, please refer to Moody's Credit rating Methodology published in May 2016 entitled "Mapping National Scale Ratings from Global Scale Ratings". While NSRs have no inherent absolute meaning in terms of default risk or expected loss, a historical probability of default consistent with a given NSR can be inferred from the GSR to which it maps back at that particular point in time. For information on the historical default rates associated with different global scale rating categories over different investment horizons. ==================== P U E R T O R I C O ==================== SHORT BARK: Case Summary & 20 Largest Unsecured Creditors --------------------------------------------------------- Affiliated Debtors that filed separate Chapter 11 bankruptcy petitions: Debtor Case No. ------ -------- EXO SBI, LLC 17-11501 1209 Orange Street Wilmington, DE 19801 Short Bark Industries, Inc. 17-11502 SBI PR Building 1 Parque Industrial Cienaga Carr. 322 Km 0.4 Lot #7 Guanica, PR 00647 Type of Business: Short Bark Industries, Inc. -- http://www.shortbark.com/-- provides military apparels for the Department of Defense, law enforcement industry. The Company's current or previously manufactured items in the military category include but are not limited to military MOLLE, medium and large rucksacks, assault packs, IWCS, ACU, ABU, BDU, helmet covers, FROG, A2CU and more. The Company offers men and boys suits, over garments, bag, and coats. Short Bark Industries holds over 120,000+ square feet of manufacturing capacity with operations in Florida, Puerto Rico and Tennessee. Chapter 11 Petition Date: July 10, 2017 Court: United States Bankruptcy Court District of Delaware (Delaware) Debtors' Counsel: David M. Klauder, Esq. BIELLI & KLAUDER, LLC 1204 N. King Street Wilmington, DE 19801 Tel: 302-803-4600 Fax: 302-397-2557 Email: dklauder@bk-legal.com Estimated Estimated Assets Liabilities ---------- ----------- EXO SBI, LLC $0-$50k $0-$50k Short Bark Industries $10M-$50M $10M-$50M The petition was signed by Phil Williams, CEO and Chairman. Full-text copies of the petitions are available for free at: http://bankrupt.com/misc/deb17-11501.pdf http://bankrupt.com/misc/deb17-11502.pdf A. List of EXO SBI, LLC's Three Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Anthony J. Gallo Consulting Unknown Law Office of Anthony J. Gallo services Corporation Trust Company Registered Agent Unknown services Delaware Secretary of State Unknown B. List of Short Bark Industries's 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ AGMA Security Services Services $27,420 Atlantic Diving Supply, Inc. Trade $709,063 621 Lynnhaven Pkwy., Ste. 400 Virginia Beach, VA 23453 Fax: 757-481-2039 Bornquen Container Group Trade $17,432 Carter Enterprises, LLC Trade $22,477 Consolidated Waste Services Services $14,468 Diversitex, Inc. Trade $953,542 376 Hollywood Ave. Ste. 203 Fairfield, NJ 07004 Fax: 973-808-6261 FedEx Freight Services $14,468 Global Enterprises Trade $3,165,350 Co., Ltd. Shia Bian No. 91, Zao Shang Ind. Wetang District, Dongcheng, D China 52312 (86769) 22081980 Hayne Surridge Company Trade $68,496 LSQ Funding Group, L.C. Loan $3,376,177 c/o Gary Soles, Esquire Lowndes, Drosdick, Doster, Kantor & Reed 215 N. Eola Dr. Orlando, FL 32801 Tel: 407-843-4600 Millken & Company Trade $451,197 PO Box 1926 Spartanburg, SC 29304 Tel: 864-503-2100 MMI Textiles, Inc. Trade $490,264 29260 Clemens Rd., Bldg. II, Ste. B Westlake, OH 44145 Tel: 440-899-8055 Old Dominion Freight Services $25,188 Email: odinvoicing@odfl.com Pine Belt Processing, Inc. Trade $234,408 Propper International Trade $14,082 Southeast Freight Services $51,005 Lines, Inc. Email: rburleson@sefl.com SSM Industries Trade $292,317 211 Ellis Ave. Spring City, TN 37381 Tapecraft Trade $266,815 PO Box 2027 Anniston, AL 36202 Tel: 256-832-3152 Tencate Southern Mills Trade $225,082 Warmkraft, Inc. Trade $26,660 Taylorsville-Apparel WEST WINDOWS: Taps Heriberto Acevedo as Accountant -------------------------------------------------- West Window Films Corp. and Eric William Toro, the company's president, have filed an application seeking court approval to hire an accountant. In a filing with the U.S. Bankruptcy Court in Puerto Rico, the Debtors propose to hire Heriberto Reguero Acevedo to prepare their financial statements, cash flow projections, monthly operating reports and tax returns, and provide other accounting services related to their Chapter 11 cases Mr. Acevedo will charge an hourly fee of $150 while his associates who may assist him will charge $75 per hour. In a court filing, Mr. Acevedo disclosed that he and his employees and associates are "disinterested" as defined in section 101(14) of the Bankruptcy Code. Mr. Acevedo maintains an office at: Heriberto Reguero Acevedo 105 Avenue Borinquen Base Ramey Aguadilla, PR 00603 About West Windows Films Corp. West Window Films Corp. and Eric William Maurosa Toro, the company's president, sought protection under Chapter 11 of the Bankruptcy Code (Bankr. D. P.R. Case Nos. 17-03607 and 17-03604) on May 23, 2017. Mr. Toro signed the petitions. The cases are substantially consolidated pursuant to an order issued on June 16, 2017. At the time of the filing, West Window disclosed that it had estimated assets of less than $100,000 and liabilities of less than $500,000. The Debtors are represented by Gloria Justiniano Irizarry, Esq., at the Justiniano's Law Office. *********** 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 Joseph Cardillo at 856-381-8268. * * * End of Transmission * * *