/raid1/www/Hosts/bankrupt/TCRLA_Public/070509.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, May 9, 2007, Vol. 8, Issue 91
Headlines
A R G E N T I N A
CALZADOS SAN RAFAEL: Proofs of Claim Verification Ends on July 2
CASARES AUTOMOTORES: Proofs of Claim Verification Ends on Aug. 3
CHAMPAGNAT COOPERATIVA: Individual Reports Filing Is on June 21
CIRCULO DE SUBOFICIALES: Seeks Reorganization Approval in Court
CROSBAR SA: Proofs of Claim Verification Deadline Is July 16
EASTMAN KODAK: Moody's Confirms B1 Corporate Rating After Review
DAIMLERCHRYSLER: Magna Is Chrysler's Sole Serious Bidder
DANA CORP: Wants Section 1113/1114 Ruling Deferred Until May 31
DANA CORP: Wants Open-Ended Deadline to Remove Court Actions
PEREZ BARIZONE: Trustee To File Individual Reports on July 5
PINNACLE ENTERTAINMENT: Morgan Joseph Reiterates "Buy" Rating
SUPERMERCADOS SHALOM: Claims Verification Deadline Is June 29
TRANSPORTADORA DE GAS: Fitch Assigns B Rating on US$500MM Notes
* ARGENTINA: President Asks Hugo Chavez To Leave Sidor Alone
B A H A M A S
COGNIS GMBH: Fitch Affirms IDR at B with Stable Outlook
B E R M U D A
ASPEN INSURANCE: Earns US$121.9 Million in First Quarter 2007
DILMUN CAPITAL: Proofs of Claim Filing Ends on May 16
DILMUN CAPITAL: Will Hold Final General Meeting on June 8
ECLECTIC AUSTRALIA: Proofs of Claim Filing Is Until May 23
ECLECTIC AUSTRALIA: Will Hold Final General Meeting on May 31
ENDURANCE SPECIALTY: Credit Suisse Maintains "Outperform" Rating
ENDURANCE SPECIALTY: Earns US$101.8 Mil. in First Quarter 2007
LAWRENCEVILLE RE: Proofs of Claim Filing Deadline Is May 16
LORAL LICENSING: M. Morrison & C. Thresh are Named Liquidators
LORAL SPACE: Court Names Morrison & Thresh as Liquidators
SCOTTISH RE: S&P Raises Counterparty Credit Rating to B+ from B
TAYLOS INVESTMENTS: Proofs of Claim Filing Is Until May 16
TAYLOS INVESTMENTS: Will Hold Final General Meeting on June 8
WOODBOURNE PLACE: Proofs of Claim Filing Deadline Is May 16
WOODBOURNE PLACE: Will Hold Final General Meeting on June 6
B O L I V I A
* BOLIVIA: Jinal Steel Has Until July to Provide Mutun Documents
B R A Z I L
AMR CORP: Pays US$285-Mil. Balance of Sr. Secured Revolving Loan
BANCO BRADESCO: Eyes Up to 25% Boost in Lending This Year
BANCO BRADESCO: Posts 11.4% Rise in First Qtr. 2007 Net Income
BANCO NACIONAL: Okays US$199.8-Million Loan to Dofcon Navegacao
DRESSER-RAND: Lehman Bros. Maintains "Overweight" Rating on Firm
EMI GROUP: Confirms Approach of Potential Bidders
NORTEL NETWORKS: Posts US$103 Mln Net Loss in First Quarter 2007
NRG ENERGY: Earns US$65 Million in 2007 First Quarter
NRG ENERGY: Fitch Says Common Dividend Plan Won't Affect Ratings
NRG ENERGY: Moody's Holds Corporate Family Rating at Ba3
NRG ENERGY: S&P Lifts Rating on US$4.7 Billion Unsec. Bonds to B
PETROLEO BRASILEIRO: Gives Final Offer for Bolivian Refineries
ROYAL AHOLD: Fitch Lifts Ratings to BB+ on Foodservice Disposal
STRATOS GLOBAL: Moody's Confirms Ratings After CIP Deal Review
C A Y M A N I S L A N D S
CABLE & WIRELESS: Clients To Have Access to ZoneAlarm Internet
JAIC-SOMERLEY: Will Hold Final Shareholders Meeting on June 4
LATTICE MASTER: Sets Final Shareholders Meeting for June 25
LATTICE PARTNERS: Holding Final Shareholders Meeting on June 25
C H I L E
COEUR D'ALENE: Approves Amended Service Pact with Dennis Wheeler
CONSTELLATION BRANDS: S&P Keeps BB- Rating Amidst Share Buyback
METHANIX CORP: Board Okays 12% Quarterly Dividend Increase
SHAW GROUP: Will Build 600MW Power Plant for American Electric
C O L O M B I A
ARMOR HOLDINGS: Selling Assets to BAE Systems for US$4.1 Billion
BANCOLOMBIA SA: First Quarter 2007 Net Income Drops 29.8%
C O S T A R I C A
ARMSTRONG WORLD: Earns US$26 Million in Quarter Ended March 31
D O M I N I C A N R E P U B L I C
HANESBRANDS INC: Will Shut Down Three Dominican Operations
* DOMINICAN REPUBLIC: Using Verizon Payment in 2007 Budget
E C U A D O R
* ECUADOR: Gets Support from IDB on Civil Society Groups
* ECUADOR: Scraps Investment Treaty Extension with U.S.
E L S A L V A D O R
AES CORP: Court Postpones Hearing on Firm's Property Tax Break
M E X I C O
CLEAR CHANNEL: Units Ink Asset Purchase Deal with GoodRadio.TV
EMPRESAS ICA: Inks MXN116-Million Deal to Build New Stadium
FORD MOTOR: Plans to Open Banking Unit in Russia, Aksakov Says
FORD MOTOR: U.S. Sales Decreased 13% to 228,623 in April
GENERAL CABLE: Names Mark Thackeray Sr. VP of North American Ops
GENERAL MOTORS: Credit Suisse Maintains Neutral Rating on Shares
GLOBAL POWER: Consulting Pacts with Past Execs Get Extension
GLOBAL POWER: Court Moves Exclusive Plan Filing Period to May 17
INNOPHOS HOLDINGS: Earns US$136.7MM in First Quarter 2007 Sales
MCDERMOTT INT'L: Completes Acquisition of Marine Mechanical
PORTRAIT CORP: Plan Confirmation Hearing Scheduled for May 21
SCHEFENACKER PLC: Bondholder Deal Rids EUR200 Million in Debts
VALASSIS COMM: Reports US$11.2 Mil. Net Profit in First Quarter
N E T H E R L A N D S A N T I L L E S
PETROLEOS DE VENEZUELA: Shuts Down Isla Refinery Units
P E R U
IMPSAT FIBER: Extends Tender Offer Expiration Date to May 9
NUTRO PRODUCTS: Inks Pact Selling Pet Food Operations to Mars
P U E R T O R I C O
R&G FINANCIAL: Fitch Lowers Issuer Default Rating to BB- from BB
U R U G U A Y
ROYAL & SUN: Policyholders Have Until May 22 to Cancel Insurance
V E N E Z U E L A
INTERNATIONAL PAPER: Earns US$434 Million in 2007 First Quarter
* VENEZUELA: Bonds Rise As Threat of IMF Withdrawal Lessens
* VENEZUELA: Conoco Hopes to Reach Compensation Pact with Gov't
* VENEZUELA: Nestor Kirchner Defends Sidor
* Large Companies with Insolvent Balance Sheets
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A R G E N T I N A
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CALZADOS SAN RAFAEL: Proofs of Claim Verification Ends on July 2
----------------------------------------------------------------
Carlos Guido Martino, the court-appointed trustee for Calzados
San Rafael SRL's bankruptcy proceeding, verifies creditors'
proofs of claim until July 2, 2007.
Mr. Martino will present the validated claims in court as
individual reports. The National Commercial Court of First
Instance No. 5 in Buenos Aires, with the assistance of Clerk
No. 9, will determine if the verified claims are admissible,
taking into account the trustee's opinion, and the objections
and challenges that will be raised by Calzados San Rafael and
its creditors.
Inadmissible claims may be subject for appeal in a separate
proceeding known as an appeal for reversal.
A general report that contains an audit of Calzados San Rafael's
accounting and banking records will be submitted in court.
La Nacion did not state the reports submission dates.
Mr. Martino is also in charge of administering Calzados San
Rafael's assets under court supervision and will take part in
their disposal to the extent established by law.
The debtor can be reached at:
Calzados San Rafael SRL
Bartolome Mitre 1131
Buenos Aires, Argentina
The trustee can be reached at:
Carlos Guido Martino
Avenida Presidente Roque Saenz Pena 651
Buenos Aires, Argentina
CASARES AUTOMOTORES: Proofs of Claim Verification Ends on Aug. 3
----------------------------------------------------------------
Guido Maria Salvadori, the court-appointed trustee for Casares
Automotores C. y F. S.A.'s reorganization proceeding, verifies
creditors' proofs of claim until Aug. 3, 2007.
The National Commercial Court of First Instance in Trenque
Lauquen, Buenos Aires, approved a petition for reorganization
filed by Casares Automotores, according to a report from
Argentine daily Infobae.
Mr. Salvadori will present the validated claims in court as
individual reports. The court will determine if the verified
claims are admissible, taking into account the trustee's
opinion, and the objections and challenges that will be raised
by Casares Automotores and its creditors.
Inadmissible claims may be subject for appeal in a separate
proceeding known as an appeal for reversal.
A general report that contains an audit of Casares Automotores'
accounting and banking records will be submitted in court.
Infobae did not state the reports submission dates.
The debtor can be reached at:
Casares Automotores C. y F. S.A.
9 de Julio y Maipu, Carlos Casares
Buenos Aires, Argentina
The trustee can be reached at:
Guido Maria Salvadori
Pereyra Rozas 21, Trenque Lauquen
Buenos Aires, Argentina
CHAMPAGNAT COOPERATIVA: Individual Reports Filing Is on June 21
---------------------------------------------------------------
Analia Virginia Dominguez, the court-appointed trustee for
Champagnat Cooperativa de Vivienda Credito y Consumo Ltda.'s
bankruptcy proceeding, will present creditors' validated claims
as individual reports in the National Commercial Court of First
Instance in San Isidro, Buenos Aires, on June 21, 2007.
The court will determine if the verified claims are admissible,
taking into account the trustee's opinion and the objections and
challenges raised by Champagnat Cooperativa and its creditors.
Inadmissible claims may be subject for appeal in a separate
proceeding known as an appeal for reversal.
Ms. Dominguez verified creditors' proofs of claim until
May 8, 2007.
Ms. Dominguez will also submit to court a general report
containing an audit of Champagnat Cooperativa's accounting and
banking records on Aug. 8, 2007.
The debtor can be reached at:
Champagnat Cooperativa de Vivienda
Credito y Consumo Ltda.
Gervasio Posadas 970, Florida
Buenos Aires, Argentina
The trustee can be reached at:
Analia Virginia Dominguez
Belgrano 313, San Isidro
Buenos Aires, Argentina
CIRCULO DE SUBOFICIALES: Seeks Reorganization Approval in Court
---------------------------------------------------------------
Circulo de Suboficiales del Servicio Penitenciario Federal
Argentino has requested for reorganization before the National
Commercial Court of First Instance No. 3 in Buenos Aires after
failing to pay its liabilities since March 15, 2007.
The reorganization petition, once approved by the court, will
allow the Circulo de Suboficiales to negotiate a settlement with
its creditors in order to avoid a straight liquidation.
Clerk No. 6 assists the court in this case.
The debtor can be reached at:
Circulo de Suboficiales del Servicio Penitenciario
Federal Argentino
Emilio Lamarca 790/92
Buenos Aires, Argentina
CROSBAR SA: Proofs of Claim Verification Deadline Is July 16
------------------------------------------------------------
Adrian Martin Ponce, the court-appointed trustee for Crosbar
SA's bankruptcy proceeding, verifies creditors' proofs of claim
until July 16, 2007.
Mr. Ponce will present the validated claims in court as
individual reports. The National Commercial Court of First
Instance No. 7 in Buenos Aires, with the assistance of Clerk
No. 14, will determine if the verified claims are admissible,
taking into account the trustee's opinion, and the objections
and challenges that will be raised by Crosbar and its creditors.
Inadmissible claims may be subject for appeal in a separate
proceeding known as an appeal for reversal.
A general report that contains an audit of Crosbar's accounting
and banking records will be submitted in court.
La Nacion did not state the reports submission dates.
Mr. Ponce is also in charge of administering Crosbar's assets
under court supervision and will take part in their disposal to
the extent established by law.
The debtor can be reached at:
Crosbar SA
Suipacha 255
Buenos Aires, Argentina
The trustee can be reached at:
Adrian Martin Ponce
Bernardo de Irigoyen 330
Buenos Aires, Argentina
EASTMAN KODAK: Moody's Confirms B1 Corporate Rating After Review
----------------------------------------------------------------
Moody's Investors Service has confirmed Eastman Kodak Company's
B1 corporate family rating, concluding a review for possible
downgrade, which had been prompted by Eastman Kodak's May 2006
announcement of its health business sale. On April 30, 2007,
Kodak sold its health imaging business to Onex Healthcare
Holdings and received about US$2.35 billion cash (excluding
Eastman Kodak's opportunity to earn an additional US$200 million
if Onex realizes an internal rate of return in excess of 25% on
its investment). The rating outlook is stable.
The B1 corporate family rating reflects the significant
challenges that Eastman Kodak faces to replace revenue and cash
flow from its declining legacy film businesses, as well as the
company's market position, operating profit margin and free cash
flow volatility, asset returns (net of cash), financial
leverage, and liquidity.
The stable rating outlook reflects Moody's expectation that
Eastman Kodak will continue to maintain liquidity and generate
earnings sufficient to withstand further secular declines of its
legacy film businesses, lack of substantial profitability in
certain of its digital businesses, and its sizeable new business
start up costs.
The ratings would experience downward rating pressure if the
company were to resume stock purchases, restructuring payments
were to exceed the company's forecast (range of US$575 million
to US$625 million in 2007), digital earnings were to decline,
cash balances were to fall below US$1 billion, or the company's
ratio of debt to EBITDA were to exceed 4.0x. The ratings would
experience upward rating pressure if the company's recurring
digital operating earnings were to grow in excess of US$350
million and the company's ratio of debt to EBITDA were to
represent 3.9x or less on a sustained annual basis. By Moody's
estimates, Eastman Kodak had an approximate 2.2x ratio of debt
to pre restructuring charge EBITDA for the twelve months ended
March 2007, adjusted for leases, under funded pensions, the
health business sale, and repayment of US$1.15 billion term
loans.
Rating upgraded:
-- US$1 billion 5 Yr Revolving Credit Facility (expires
2010), Secured, Ba3 --> Ba1, LGD2, 18%
Ratings confirmed:
-- B1 Corporate Family Rating
-- US$500 million Senior Notes due 2013, Unsecured,
B2 LGD4, 68%
-- US$3 million Senior Term Note Debenture due 2018,
Unsecured, B2 LGD4, 68%
-- US$575 million Convertible Senior Notes due 2033,
Unsecured, B2 LGD4, 68%
-- US$250 million Senior Medium Term Notes due 2008,
Unsecured, B2 LGD4, 68%
-- US$10 million Senior Notes due 2021, Unsecured,
B2 LGD4, 68%
Headquartered in Rochester, New York, Eastman Kodak Company --
http://www.kodak.com/-- is a worldwide vendor of imaging
products and services. The company is committed to a digitally
oriented growth strategy focused on four businesses: Digital &
Film Imaging Systems - providing consumers, professionals, and
cinematographers with digital and traditional products and
services; Health -- supplying the medical and dental professions
with traditional and digital imaging and information systems, IT
solutions, and services; Graphic Communications - providing
customers with a range of solutions for prepress, traditional
and digital printing, document scanning, and multi-vendor IT
services; and Display & Components - supplying original
equipment manufacturers with imaging sensors as well as
intellectual property and materials for the organic light-
emitting diode and LCD display industries.
The company has operations in Argentina, Chile, Denmark, Greece,
Jordan, Yemen, Australia, China among others.
DAIMLERCHRYSLER: Magna Is Chrysler's Sole Serious Bidder
--------------------------------------------------------
Canadian auto parts supplier Magna International Inc. is
currently the "only party seriously interested in Chrysler,"
Reuters quoted German newspaper Automobilwoche's report on
Saturday, citing a source familiar with the negotiations.
As reported on May 2, Magna leads the race for DaimlerChrysler
AG's Chrysler Group and could grab a much larger stake in the
ailing unit, potentially taking a direct minority ownership
stake of between 25% and 50%.
According to the Reuters report, investment bankers are
intentionally leaking talks with private equity firms Cerberus
and Blackstone but these are being held "only for tactical
reasons."
Daimler is expected to make a decision this month, with a sale
to Magna slated to conclude in two months, Reuters states,
citing Automobilwoche as its source. The German paper reported
that Daimler would initially continue to hold a stake in the
loss-making unit. The paper also wrote that insiders say Magna
will probably sell Chrysler again once the restructuring is
successfully concluded, Reuters notes.
About DaimlerChrysler
Based in Stuttgart, Germany, DaimlerChrysler AG (NYSE:DCX) (FRA:
DCX) -- http://www.daimlerchrysler.com/-- develops,
manufactures, distributes, and sells various automotive
products, primarily passenger cars, light trucks, and commercial
vehicles worldwide. It primarily operates in four segments:
Mercedes Car Group, Chrysler Group, Commercial Vehicles, and
Financial Services.
The company's worldwide operations are located in: Canada,
Mexico, United States, Argentina, Brazil, Venezuela, China,
India, Indonesia, Japan, Thailand, Vietnam, and Australia.
The Chrysler Group segment offers cars and minivans, pick-up
trucks, sport utility vehicles, and vans under the Chrysler,
Jeep, and Dodge brand names. It also sells parts and
accessories under the MOPAR brand.
The Chrysler Group is facing a difficult market environment in
the United States with excess inventory, non-competitive legacy
costs for employees and retirees, continuing high fuel prices
and a stronger shift in demand toward smaller vehicles. At the
same time, key competitors have further increased margin and
volume pressures -- particularly on light trucks -- by making
significant price concessions. In addition, increased interest
rates caused higher sales & marketing expenses.
In order to improve the earnings situation of the Chrysler Group
as quickly and comprehensively, measures to increase sales and
cut costs in the short term are being examined at all stages of
the value chain, in addition to structural changes being
reviewed as well.
DANA CORP: Wants Section 1113/1114 Ruling Deferred Until May 31
---------------------------------------------------------------
Dana Corp. and its debtor-affiliates, the International Union,
United Automobile, Aerospace and Agricultural Implement Workers
of America and the United Steelworkers delivered to the United
States Bankruptcy Court a joint letter asking Judge Burton
Lifland to defer ruling on their Section 1113/1114 disputes
until May 31, 2007.
Judge Lifland previously said that he would rule on the labor
disputes by the end of April.
The Debtors and the Unions stated in the joint letter that the
extension is needed "in light of ongoing discussions" between
them.
On the other hand, Judge Lifland approved the settlement between
the Debtors and the International Association of Machinists and
Aerospace Workers Union, wherein the Debtors agreed to allocate
US$2,250,000 to resolve all IAMAW claims.
Toledo, Ohio-based Dana Corp. -- http://www.dana.com/-- designs
and manufactures products for every major vehicle producer in
the world, and supplies drivetrain, chassis, structural, and
engine technologies to those companies. Dana employs 46,000
people in 28 countries. Dana is focused on being an essential
partner to automotive, commercial, and off-highway vehicle
customers, which collectively produce more than 60 million
vehicles annually. Dana has facilities in China, Argentina and
Italy.
The company and its affiliates filed for chapter 11 protection
on Mar. 3, 2006 (Bankr. S.D.N.Y. Case No. 06-10354). As of
Sept. 30, 2005, the Debtors listed US$7,900,000,000 in total
assets and US$6,800,000,000 in total debts.
Corinne Ball, Esq., and Richard H. Engman, Esq., at Jones Day,
in Manhattan and Heather Lennox, Esq., Jeffrey B. Ellman, Esq.,
Carl E. Black, Esq., and Ryan T. Routh, Esq., at Jones Day in
Cleveland, Ohio, represent the Debtors. Henry S. Miller at
Miller Buckfire & Co., LLC, serves as the Debtors' financial
advisor and investment banker. Ted Stenger from AlixPartners
serves as Dana's Chief Restructuring Officer.
Thomas Moers Mayer, Esq., at Kramer Levin Naftalis & Frankel
LLP, represents the Official Committee of Unsecured Creditors.
Fried, Frank, Harris, Shriver & Jacobson, LLP serves as counsel
to the Official Committee of Equity Security Holders. Stahl
Cowen Crowley, LLC serves as counsel to the Official Committee
of Non-Union Retirees.
The Debtors' exclusive period to file a plan expires on
Sept. 3, 2007. They have until Nov. 2, 2007, to solicit
acceptances of that plan.
DANA CORP: Wants Open-Ended Deadline to Remove Court Actions
------------------------------------------------------------
Dana Corp. and its debtor-affiliates ask the U.S. Bankruptcy
Court for the Southern District of New York to further extend
the time by which they may file notices of removal with respect
to any actions to federal court under Section 1452 of the
Judicial Procedure Code and Rule 9027 of the Federal Rules of
Bankruptcy Procedure until the date a plan of reorganization is
confirmed.
The Debtors seek that the Removal Period Extension be without
prejudice to:
(a) any position they may take regarding whether Section 362
of the Bankruptcy Code applies to stay any Actions; and
(b) their right to seek further extensions of time to remove
all Actions.
The Debtors continue to require more time to decide whether the
possible removal of any of the Actions would promote their
interests in the context of their overall restructuring process,
Corinne Ball, Esq., at Jones Day, in New York, tells the Court.
Ms. Ball relates that the Debtors are currently focused on a
host of key reorganization and business activities, including
developing a reorganization plan. Developing a reorganization
plan would entail attending to numerous and significant tasks
like completing the divestitures of certain businesses and
assets, securing the profit improvements from the various
"Restructuring Initiatives," refining the Debtors' business
plan, completing their proceedings under Sections 1113 and 1114
of the Bankruptcy Code, and determining the proper capital
structure of the Reorganized Debtors.
The Debtors are also reviewing and analyzing more than 15,000
claims filed against them, Ms. Ball adds. The Debtors aim to
efficiently and timely resolve all the disputed claims. Ms.
Ball contends that the outcome of the claim review and analysis
bears directly on the Debtors' decision whether to remove the
Actions.
Moreover, the Debtors must oversee and implement the day-to-day
operation of their businesses as debtors-in-possession. Given
the current distress in the U.S. automotive industry, this task
cannot be underestimated, Ms. Ball asserts.
Because of the reasons stated, the Debtors have not yet reached
the point where they can make final decisions relating to the
potential removal of the Actions, Ms. Ball says.
About Dana Corp.
Toledo, Ohio-based Dana Corp. -- http://www.dana.com/-- designs
and manufactures products for every major vehicle producer in
the world, and supplies drivetrain, chassis, structural, and
engine technologies to those companies. Dana employs 46,000
people in 28 countries. Dana is focused on being an essential
partner to automotive, commercial, and off-highway vehicle
customers, which collectively produce more than 60 million
vehicles annually. Dana has facilities in China, Argentina and
Italy.
The company and its affiliates filed for chapter 11 protection
on Mar. 3, 2006 (Bankr. S.D.N.Y. Case No. 06-10354). As of
Sept. 30, 2005, the Debtors listed US$7,900,000,000 in total
assets and US$6,800,000,000 in total debts.
Corinne Ball, Esq., and Richard H. Engman, Esq., at Jones Day,
in Manhattan and Heather Lennox, Esq., Jeffrey B. Ellman, Esq.,
Carl E. Black, Esq., and Ryan T. Routh, Esq., at Jones Day in
Cleveland, Ohio, represent the Debtors. Henry S. Miller at
Miller Buckfire & Co., LLC, serves as the Debtors' financial
advisor and investment banker. Ted Stenger from AlixPartners
serves as Dana's Chief Restructuring Officer.
Thomas Moers Mayer, Esq., at Kramer Levin Naftalis & Frankel
LLP, represents the Official Committee of Unsecured Creditors.
Fried, Frank, Harris, Shriver & Jacobson, LLP serves as counsel
to the Official Committee of Equity Security Holders. Stahl
Cowen Crowley, LLC serves as counsel to the Official Committee
of Non-Union Retirees.
The Debtors' exclusive period to file a plan expires on
Sept. 3, 2007. They have until Nov. 2, 2007, to solicit
acceptances of that plan.
PEREZ BARIZONE: Trustee To File Individual Reports on July 5
------------------------------------------------------------
Jorge Ricardo Orizi, the court-appointed trustee for Perez
Barizone S.R.L.'s reorganization proceeding, will present
creditors' validated claims as individual reports in the
National Commercial Court of First Instance in Venado Tuerto,
Santa Fe, on July 5, 2007.
The court will determine if the verified claims are admissible,
taking into account the trustee's opinion and the objections and
challenges raised by Perez Barizone and its creditors.
Inadmissible claims may be subject for appeal in a separate
proceeding known as an appeal for reversal.
Mr. Orizi verified creditors' proofs of claim until May 2, 2007.
He will submit to court a general report containing an audit of
Perez Barizone's accounting and banking records on
Sept. 6, 2007.
The debtor can be reached at:
Perez Barizone S.R.L.
Sarmiento 362, San Eduardo
Santa Fe, Argentina
The trustee can be reached at:
Jorge Ricardo Orizi
Moreno 671, Venado Tuerto
Santa Fe, Argentina
PINNACLE ENTERTAINMENT: Morgan Joseph Reiterates "Buy" Rating
-------------------------------------------------------------
Newratings.com reports that Morgan Joseph & Co. analysts have
reaffirmed their "buy" rating on Pinnacle Entertainment Inc.'s
shares.
According to Newratings.com, the target price was set at US$39.
The analysts said in a research note published on May 7 that
Pinnacle Entertainment is expected to report US$227.2-million
first quarter 2007 revenues, US$43.8-million EBITDA and US$0.12
earnings per share, indicating a year-on-year decline.
The decrease was due to the "return to normalized operations,
particularly at Pinnacle Entertainment's New Orleans and Lake
Charles properties," the analysts told Newratings.com.
Headquartered in Las Vegas, Nevada, Pinnacle Entertainment Inc.
(NYSE: PNK) -- http://www.pnkinc.com/-- owns and operates
casinos in Nevada, Louisiana, Indiana and Argentina, owns a
hotel in Missouri, receives lease income from two card club
casinos in the Los Angeles metropolitan area, has been licensed
to operate a small casino in the Bahamas, and owns a casino site
and has significant insurance claims related to a hurricane-
damaged casino previously operated in Biloxi, Mississippi.
Pinnacle opened a major casino resort in Lake Charles, Louisiana
in May 2005 and a new replacement casino in Neuquen, Argentina
in July 2005.
* * *
As reported in the Troubled Company Reporter on Oct. 4, 2006,
Moody's Investors Service's confirmed Pinnacle Entertainment
Inc.'s B2 Corporate Family Rating.
At the same time, Standard & Poor's Ratings Services affirmed
its 'BB-' rating and '1' recovery rating following Pinnacle
Entertainment Inc.'s US$250 million senior secured bank facility
add-on.
SUPERMERCADOS SHALOM: Claims Verification Deadline Is June 29
-------------------------------------------------------------
Ruben Scaletta, the court-appointed trustee for Supermercados
Shalom SRL's bankruptcy proceeding, verifies creditors' proofs
of claim until June 29, 2007.
Mr. Scaletta will present the validated claims in court as
individual reports. The National Commercial Court of First
Instance No. 17 in Buenos Aires, with the assistance of Clerk
No. 33, will determine if the verified claims are admissible,
taking into account the trustee's opinion, and the objections
and challenges that will be raised by Supermercados Shalom and
its creditors.
Inadmissible claims may be subject for appeal in a separate
proceeding known as an appeal for reversal.
A general report that contains an audit of Supermercados
Shalom's accounting and banking records will be submitted in
court.
La Nacion did not state the reports submission dates.
Mr. Scaletta is also in charge of administering Supermercados
Shalom's assets under court supervision and will take part in
their disposal to the extent established by law.
The debtor can be reached at:
Supermercados Shalom SRL
Corrientes 4671/75
Buenos Aires, Argentina
The trustee can be reached at:
Ruben Scaletta
Piedras 1077
Buenos Aires, Argentina
TRANSPORTADORA DE GAS: Fitch Assigns B Rating on US$500MM Notes
---------------------------------------------------------------
Fitch Ratings has assigned a 'B' rating to Transportadora de Gas
del Sur's or TGS proposed US$500 million senior unsecured notes.
This proposed debt issuance has also been assigned a Recovery
Rating (RR) of 'RR4', which indicates average recovery prospects
in the event of default. The long-term foreign and local
currency Issuer Default Ratings were also recently affirmed at
'B'. Concurrent with these actions, Fitch has upgraded TGS'
National Scale Rating to 'A+(arg)' from 'A-(arg)'. All ratings
have a Stable Outlook.
The 10-year notes will carry a fixed interest rate and four
equal annual payments starting in the year 2014. The proceeds
of the notes will be used to repay existing debt, and for
financing costs and repayment premiums. As a result, TGS'
financial position is expected to improve by reducing debt to a
manageable level of US$500 million from US$631 million, extend
the average life to 8.5 years, and reduce the financial cost of
its debt. With this level of debt and a normalized cash flow
generation of around US$200 million, Fitch projects the company
leverage, as measured by total debt to EBITDA, will be below
2.5x and interest coverage as measured by EBITDA to interest
expenses higher than 5x.
The assigned rating reflects TGS' position as the largest
pipeline operator in Argentina, long-term capacity firm
contracts with good credit quality offtakers, an increasing
portion of revenues from its non-regulated liquefied natural gas
or LNG business, and enhanced projected debt service coverage.
The rating also considers moderate regulatory risk, commodity
price risks, inflation pressure over cost structure, and
currency risks.
Fitch's Recovery Ratings are a relative indicator of creditor
recovery prospects on a given obligation within an issuers'
capital structure in the event of a default.
Headquartered in Buenos Aires, Argentina, Transportadora de Gas
del Sur SA -- http://www.tgs.com.ar-- is a transporter of
natural gas; having a 7,419-kilometer (4,610 miles) pipeline
system with a firm contracted capacity of 62.5 million cubic
meters per day (MMm3/d) with an installed power of 538.220
horsepower. Substantially all of Transportadora de Gas'
capacity is subscribed for under firm long-term transportation
contracts. Transportadora de Gas is also a processor of natural
gas and marketer of natural gas liquids in Argentina. The
company operates the General Cerri gas processing complex and
the associated Galvan loading and storage facility in Bahia
Blanca in the Buenos Aires Province (the Cerri Complex) where
natural gas liquids are separated from gas transported through
the Company's pipeline system and stored for delivery.
Transportadora de Gas is engaged in midstream activities and the
provision of telecommunication services in Argentina. The
company operates the largest pipeline transmission system in
Argentina, which accounts for roughly 60% of the country's total
natural gas consumption.
* ARGENTINA: President Asks Hugo Chavez To Leave Sidor Alone
------------------------------------------------------------
Published reports say that Argentina's President Nestor Kirchner
has called his Venezuelan counterpart Hugo Chavez over the
weekend, asking him not to nationalize steel company Siderurgica
del Orinoco S.A. or Sidor.
As reported in the Troubled Company Reporter-Latin America on
May 8, 2007, President Chavez, after threatening to Sidor, urged
the steel maker to increase local sales of steel to avoid a
government intervention. The Venezuelan leader admitted that he
didn't want to nationalize the firm, but Sidor refused to supply
domestic companies and gives preference to exports. Ternium is
a unit of Argentine-Italian conglomerate Techint. Venezuela's
government currently owns 21% of Sidor's shares, while workers
hold roughly a 20% stake.
Reuters relates that Techint is the biggest industrial group in
Argentina.
Reports say that Techint executives approached the members of
President Kirchner's cabinet, complaining that President Chavez
threatened to use the company's possible involvement in an
alleged public works bribery scandal in Argentina as a reason to
throw Ternium out of Venezuela.
The Financial Times Limited relates that a government gas
regulator presented a full-page advertisement in newspapers
implicating Techint in the bribery scandal. Swedish
construction company Skanska has admitted to paying bribes.
The Argentine judiciary is investigated the matter.
According to the reports, President Kirchner then asked
President Chavez "not to mix the two things together."
The Financial Times Limited relates that President Kirchner and
President Chavez are political allies. The two leaders recently
sealed a joint oil exploration deal in Venezuela.
Techint's owner, Paolo Rocca, will travel to Venezuela to meet
with President Chavez from May 14-16, reports in Argentine
dailies La Nacion and Clarin say.
Meanwhile, President Kirchner tried denying that the Skanska
affair was a case of corruption between private firms and the
government, The Financial Times says. The Argentine leader
denied any involvement. Cabinet chief Alberto Fernandez met
with a senior Techint official twice. There were speculations
that the government tried to persuade Techint to take the blame
publicly.
Political analyst Carlos Germano told The Financial Times, "I
think you have to separate the domestic side of things from the
international. Kirchner's position [on Sidor] is in defense of
national companies. I don't think for an internal conflict he
would change the rules of the game internationally."
Commentators predict that Venezuela's nationalization threat
will stop, as Mr. Rocca will agree to sell steel in Venezuela at
below international prices in exchange for keeping control of
Sidor, The Financial Times states.
* * *
Fitch Ratings assigned these ratings on Argentina:
Rating Rating Date
------ -----------
Country Ceiling B+ Aug. 1, 2006
Local Currency
Long Term Issuer B Aug. 1, 2006
Short Term IDR B Dec. 14, 2005
Long Term IDR RD Dec. 14, 2005
=============
B A H A M A S
=============
COGNIS GMBH: Fitch Affirms IDR at B with Stable Outlook
-------------------------------------------------------
Fitch Ratings affirmed Germany-based Cognis GmbH's Issuer
Default rating at 'B' with a Stable Outlook. The rating action
follows Cognis's recent announcement to refinance its existing
EUR1.29 billion senior secured and second lien facilities as
well as EUR350 million of the existing payment-in-kind notes.
At the same time, Fitch has assigned Cognis's new undrawn
EUR250 million super senior secured revolving facility
'BB'/'RR1' ratings and new EUR1.65 billion cash-pay senior
secured floating-rate notes and loans 'BB-'/'RR2' ratings. This
follows the successful consent of the bondholders of its 9.5%
high yield notes maturing in 2014 for the proposed refinancing.
Cognis's existing EUR345 million high-yield notes and Cognis
Holding GmbH's remaining EUR344 million PIK notes are affirmed
at 'CCC+'/'RR6' and 'CCC'/'RR6' respectively.
Furthermore, Fitch has affirmed the ratings of 'BB'/'RR1' on the
refinanced senior secured facilities and 'B-'/'RR5' on the
refinanced second lien facilities issued by Cognis Deutschland
GmbH & Co KG and its local subsidiaries and withdrawn them.
The IDR reflects Cognis's global leading position in care
chemicals and nutrition and health, which together represent
over 65% of its EBITDA. The rating is also supported by the
company's overall improved operating performance and the
additional financial flexibility from the back-ended refinancing
that reduces financial charges including cash interest and debt
amortization by approximately EUR55 million to EUR60 million
annually. The rating, however, is constrained by Cognis's
higher gross cash-pay financial leverage at 5.8x, compared to
4.8x before the transaction, based on the reported FY2006-
EBITDA. As a further result of the refinancing proposal major
debt reduction in the short to medium term will be unlikely,
delaying the de-leveraging process.
Cognis is a worldwide supplier of innovative specialty chemicals
and nutritional ingredients. The company employs about 7,700
people and operates production sites and service centres in 30
countries. Cognis generated revenues of EUR3.372 billion and
EBITDA of EUR365 million in FY06.
=============
B E R M U D A
=============
ASPEN INSURANCE: Earns US$121.9 Million in First Quarter 2007
-------------------------------------------------------------
Aspen Insurance Holdings Limited reported quarterly results for
the quarter ended March 31, 2007. The company's net income
increased 97% to US$121.9 million in the first quarter 2007,
compared to US$61.8 million for the same quarter in 2006.
Aspen Insurance disclosed these results:
-- earnings per ordinary share of US$1.27 versus US$0.59 for
the same period in 2006, up 115%;
-- underwriting income in the first quarter of 2007
increased by 134% to US$90.5 million compared to US$38.7
million the first quarter 2006;
-- net investment income in the first quarter of 2007
increased by 52% to US$67.5 million against US$44.5
million in the first quarter of 2006;
-- the combined ratio for the first quarter of 2007 was
79.4% versus 90.4% for the same quarter in 2006, a 12%
improvement.
-- book value per ordinary share at March 31, 2007, is
US$23.62 versus US$19.40 at March 31, 2006, up 22%; and
-- annualized return on average equity for the quarter was
22.9%.
"I am delighted to report an excellent first quarter, with all
our product segments performing well and a very strong
contribution from investments. In addition we have recently
announced a number of significant new appointments to our
management team, including Glyn Jones as Chairman, Richard
Houghton as CFO with two outstanding underwriting talents,
Nathan Warde and Matt Yeldham assuming leadership roles for our
insurance operations. I look forward to working with them as we
build on a terrific start to the year," Aspen Insurance Chief
Executive Officer Chris O'Kane said.
Headquartered in Hamilton, Bermuda, Aspen Insurance Holdings
Limited (NYSE: AHL) (BSX: AHL BH) is the holding company of the
Aspen Group the principal operating entities of which are Aspen
Insurance UK Limited and Aspen Insurance Limited, both rated A2
for insurance financial strength. At the end of September 2006,
Aspen Group reported net income of US$259 million and
shareholders' equity of US$2.3 billion.
* * *
As reported in the Troubled Company Reporter on Nov. 14, 2006,
Moody's Investors Service assigned a Ba1 rating to the proposed
US$200 million Perpetual Non-Cumulative Preference Shares to be
issued by Aspen Insurance Holdings Limited, the existing
perpetual "PIERS" of which were rated Ba1 by Moody's.
DILMUN CAPITAL: Proofs of Claim Filing Ends on May 16
-----------------------------------------------------
Dilmun Capital Recovery Holdings Ltd.'s creditors are given
until May 16, 2007, to prove their claims to Robin J. Mayor, the
company's liquidator, or be excluded from receiving any
distribution or payment.
In their proofs of claim, creditors must indicate their full
names, addresses, the full particulars of their debts or claims,
and the names and addresses of their lawyers, if any.
Dilmun Capital's shareholder agreed on April 30, 2007, to place
the company into voluntary liquidation under Bermuda's Companies
Act 1981.
The liquidator can be reached at:
Robin J Mayor
Messrs. Conyers Dill & Pearman
Clarendon House, Church Street
Hamilton, HM DX, Bermuda
DILMUN CAPITAL: Will Hold Final General Meeting on June 8
---------------------------------------------------------
Dilmun Capital Recovery Holdings Ltd.'s final general meeting
will be at 9:30 a.m. on June 8, 2007, or as soon as possible,
at:
Messrs. Conyers Dill & Pearman
Clarendon House, Church Street
Hamilton, Bermuda
These agendas will be taken during the meeting:
-- accounting on the manner in which the winding-up of
the company has been conducted and its property
disposed of and of hearing any explanation that may
be given by the liquidator;
-- deciding on the manner in which the books, accounts
and documents of the company and of the liquidator
shall be disposed of; and
-- by resolution dissolving the company.
ECLECTIC AUSTRALIA: Proofs of Claim Filing Is Until May 23
----------------------------------------------------------
The Eclectic Australia B Fund Limited's creditors are given
until May 23, 2007, to prove their claims to Nicholas Hoskins,
the company's liquidator, or be excluded from receiving any
distribution or payment.
In their proofs of claim, creditors must indicate their full
names, addresses, the full particulars of their debts or claims,
and the names and addresses of their lawyers, if any.
Eclectic Australia's shareholder agreed on April 24, 2007, to
place the company into voluntary liquidation under Bermuda's
Companies Act 1981.
The liquidator can be reached at:
Nicholas Hoskins
Wakefield Quin
Chancery Hall, 52 Reid Street
Hamilton, Bermuda
ECLECTIC AUSTRALIA: Will Hold Final General Meeting on May 31
-------------------------------------------------------------
The Eclectic Australia B Fund Limited's final general meeting
will be at 10:00 a.m. on May 31, 2007, or as soon as possible,
at:
Wakefield Quin
Chancery Hall, 52 Reid Street
Hamilton, Bermuda
These agendas will be taken during the meeting:
-- accounting on the manner in which the winding-up of
the company has been conducted and its property
disposed of and of hearing any explanation that may
be given by the liquidator;
-- deciding on the manner in which the books, accounts
and documents of the company and of the liquidator
shall be disposed of; and
-- by resolution dissolving the company.
ENDURANCE SPECIALTY: Credit Suisse Maintains "Outperform" Rating
----------------------------------------------------------------
Newratings.com reports that Credit Suisse analyst V. Misquith
has kept his "outperform" rating on Endurance Specialty
Holdings' ratings.
According to Newratings.com, the target price for Endurance
Specialty's shares was set at US$41.
Mr. Misquith said in a research note published on May 3 that
Endurance Specialty's first quarter 2007 earnings per share were
ahead of estimates, due to favorable reserve releases as well as
higher-than-expected investment income from other ventures.
Mr. Misquith told Newratings.com that though Endurance Specialty
Holdings' margins increased year-on-year, they dropped
successively in the first quarter 2007.
Endurance Specialty bought back 860,100 shares worth US$30.1
million in the first quarter 2007, "which was sooner than
expected," Newratings.com reports, citing Mr. Misquith.
Based in Pembroke, Bermuda, Endurance Specialty Holdings Ltd.
(NYSE: ENH) -- http://www.endurance.bm/-- is a provider of
property and casualty insurance and reinsurance. Through its
operating subsidiaries, Endurance currently writes property per
risk treaty reinsurance, property catastrophe reinsurance,
casualty treaty reinsurance, property individual risks, casualty
individual risks, and other specialty lines.
* * *
As reported in the Troubled Company Reporter on Dec. 15, 2006,
AM Best affirmed these debt ratings:
Endurance Specialty Holdings, Ltd.
-- "bbb-" on US$250 million 7.0% senior unsecured notes,
due 2034;
-- "bbb-"on US$200 million 6.15% senior notes, due 2015; and
-- "bb" on US$200 million Series A non-cumulative preferred
shares
These indicative debt ratings have been affirmed for securities
available under the shelf registration:
Endurance Specialty Holdings, Ltd.
-- "bbb-" on senior unsecured;
-- "bb+" on subordinated; and
-- "bb" on preferred stock
Endurance Holdings Capital Trust I Ltd.-(guaranteed by
Endurance Specialty Holdings)
-- "bb" on preferred securities
Endurance Holdings Capital Trust II Ltd.-(guaranteed by
Endurance Specialty Holdings)
-- "bb" on preferred securities
ENDURANCE SPECIALTY: Earns US$101.8 Mil. in First Quarter 2007
--------------------------------------------------------------
Endurance Specialty Holdings Ltd. reported net income of
US$101.8 million and US$1.36 per diluted common share for the
first quarter 2007, versus net income of US$107.0 million and
US$1.45 per diluted common share in the first quarter 2006.
Operating highlights for the quarter ended March 31, 2007,
include:
-- total premiums written of US$576.5 million, which include
gross premiums written and deposit premiums, decreased
14.0% over the same period in 2006;
-- total ceded premiums were US$39.6 million versus US$28.4
million in the first quarter of 2006;
-- a combined ratio of 86.7% which includes 14.8 percentage
points of favorable prior year loss reserve development
and 9.6 percentage points of net catastrophe losses
related to Windstorm Kyrill;
-- net investment income of US$74.8 million increased 21.6%
over the same period in 2006;
-- operating income, which excludes after-tax realized
investment gains and losses and foreign exchange gains
and losses, was US$105.2 million and US$1.41 per diluted
common share; and
-- operating return on average common equity for the quarter
was 4.8%, or 19.0% on an annualized basis.
Endurance Specialty Chairperson and Chief Executive Officer
Kenneth J. LeStrange commented, "I am pleased with the strong
operating earnings we generated this quarter. During the first
quarter we also continued to build a diversified book of
business by expanding in niche markets that remain profitable
while selectively reducing our exposure in some reinsurance
lines as profit margins are coming under pressure."
Operating Results
Total premiums written in the first quarter of 2007 were
US$576.5 million, a decrease of US$94.0 million or 14.0%. The
decrease in total premiums written is attributable to intended
reductions in premium writings in the company's reinsurance
business segment, offset in part by growth in Endurance's
Insurance business segment.
Net premiums earned for the first quarter of 2007 were US$377.0
million, a decrease of US$43.2 million, or 10.3%, from the first
quarter of 2006. The decrease in net premiums earned in the
current quarter resulted from increased reinsurance purchases,
including premiums ceded to the company's catastrophe bond and
loan facility, Shackleton Re, and an absence of the positive
earned premium adjustments that benefited the first quarter of
2006. Endurance Specialty's combined ratio was 86.7% in the
first quarter of 2007 versus 85.2% for the first quarter of
2006.
The current quarter operating results were positively impacted
by US$55.9 million of favorable prior year loss reserve
development. The company's current quarter operating results
were adversely affected by losses from Windstorm Kyrill, which
resulted in a gross loss of US$40 million and a net loss of
US$33.9 million after reinstatement premiums and taxes.
Insurance Business Segment
Gross premiums written in Endurance Specialty's Insurance
business segment for the first quarter of 2007 were US$147.0
million, compared to US$80.2 million in the same period in 2006.
This growth was largely driven by the continued development of
the company's workers' compensation business that began in the
second quarter of 2006, yielding US$61.6 million of additional
gross premiums written in the first quarter of 2007. The
remaining lines of business in the insurance segment grew 6.5%
over the same period in the prior year, with the company's
professional and casualty lines of business providing the
majority of the growth. The company's growth in the insurance
segment was partially offset by a decline in premiums in the
company's healthcare liability line of business, as the company
declined business that did not meet its required return
characteristics.
Endurance Specialty's combined ratio was 90.3% for its insurance
business segment in the first quarter of 2007 versus a 61.6%
combined ratio in the first quarter 2006. In the first quarter
2007, the combined ratio was impacted by a change in the mix of
business, with substantially more premium associated with our
workers' compensation business, and an increase in reinsurance
purchases, including premiums ceded to Shackleton Re, over the
last twelve months. The insurance business segment recorded
favorable prior year loss reserve development of US$26.5 million
or 24.0 percentage points for the first quarter of 2007 compared
to US$27.9 million or 30.8 percentage points for the first
quarter of 2006. The first quarter 2007 prior period
development was due to favorable claims emergence in both short
and long tail lines of business across all accident years.
Growth in acquisition and general and administrative expense
ratios in the Insurance business segment for the first quarter
2007 compared to the same period in 2006 was due to continued
expansion of Endurance Specialty's U.S. insurance operations,
changes in allocation methodology, changes in Endurance
Specialty's mix of business, and slower earned premium growth
due to the increase in reinsurance purchases. Windstorm Kyrill
contributed a gross loss of US$1.2 million to the property line
of business in the insurance business segment.
Reinsurance Business Segment
Gross premiums written, including deposit premiums, in Endurance
Specialty's reinsurance business segment for the first quarter
2007 were US$429.5 million, a decrease of 27.3% from the
US$590.4 million premiums written in the same period in 2006.
This decline was partially driven by the non-renewal of several
international casualty and property treaties with premiums of
US$46.9 million that no longer met the company's margin
requirements. In addition, the company completed its transition
away from the offshore energy business with the non-renewal of
contracts representing US$33.7 million of premiums. Gross
premiums written during the current quarter also do not reflect
US$112.0 million of premiums predominately related to policy
extensions and premium adjustments recorded in the first quarter
2006 in connection with two large treaty contracts. These
declines were partially offset by continued growth in the
company's agriculture and catastrophe lines of business.
In the first quarter 2007, the reinsurance segment's combined
ratio was 88.4% versus 91.6% in the first quarter 2006, an
improvement of 3.2 percentage points. Despite a gross loss of
US$38.8 million resulting from Windstorm Kyrill, the current
quarter combined ratio decreased due to the low level of
catastrophe losses outside of Europe and favorable loss
emergence in several lines of business. The reinsurance
business segment recorded favorable prior year loss reserve
development of US$23.1 million and US$16.9 million for the first
quarters 2007 and 2006, respectively. Prior year development in
both 2007 and 2006 was primarily related to lower than expected
claims emergence in the reinsurance business segment's short
tail lines of business.
Investments
Endurance Specialty's net investment income increased 21.6% in
the first quarter 2007 due to a combination of higher portfolio
yields, growth in the company's invested assets and strong
alternative investment performance. Endurance Specialty ended
the quarter with cash and invested assets of US$5.6 billion, an
increase of 2.0% from Dec. 31, 2006. Net operating cash flow
was US$122.8 million for the current quarter versus US$174.8
million for the first quarter 2006.
Capitalization and Shareholders' Equity
At March 31, 2007, Endurance Specialty's GAAP shareholders'
equity was US$2.4 billion or US$30.19 per diluted common share
versus US$2.3 billion or US$28.87 per diluted common share at
Dec. 31, 2006. During the quarter, the company repurchased
860,100 of its common shares in the open market for US$30.1
million.
Based in Pembroke, Bermuda, Endurance Specialty Holdings Ltd.
(NYSE: ENH) -- http://www.endurance.bm/-- is a provider of
property and casualty insurance and reinsurance. Through its
operating subsidiaries, Endurance currently writes property per
risk treaty reinsurance, property catastrophe reinsurance,
casualty treaty reinsurance, property individual risks, casualty
individual risks, and other specialty lines.
* * *
As reported in the Troubled Company Reporter on Dec. 15, 2006,
AM Best affirmed these debt ratings:
Endurance Specialty Holdings, Ltd.
-- "bbb-" on US$250 million 7.0% senior unsecured notes,
due 2034;
-- "bbb-"on US$200 million 6.15% senior notes, due 2015; and
-- "bb" on US$200 million Series A non-cumulative preferred
shares
These indicative debt ratings have been affirmed for securities
available under the shelf registration:
Endurance Specialty Holdings, Ltd.
-- "bbb-" on senior unsecured;
-- "bb+" on subordinated; and
-- "bb" on preferred stock
Endurance Holdings Capital Trust I Ltd.-(guaranteed by
Endurance Specialty Holdings)
-- "bb" on preferred securities
Endurance Holdings Capital Trust II Ltd.-(guaranteed by
Endurance Specialty Holdings)
-- "bb" on preferred securities
LAWRENCEVILLE RE: Proofs of Claim Filing Deadline Is May 16
-----------------------------------------------------------
Lawrenceville Re, Limited's creditors are given until
May 16, 2007, to prove their claims to Allen D. Wilen, the
company's liquidator, or be excluded from receiving any
distribution or payment.
In their proofs of claim, creditors must indicate their full
names, addresses, the full particulars of their debts or claims,
and the names and addresses of their lawyers, if any.
Lawrenceville Re's shareholder agreed on April 19, 2007, to
place the company into voluntary liquidation under Bermuda's
Companies Act 1981.
The liquidator can be reached at:
Allen D. Wilen
c/o Liquidations, Messrs. Conyers Dill & Pearman
Clarendon House, Church Street
Hamilton, HM DX, Bermuda
LORAL LICENSING: M. Morrison & C. Thresh are Named Liquidators
--------------------------------------------------------------
The Supreme Court of Bermuda has appointed Michael W. Morrison
and Charles Thresh as liquidators of Loral Licensing Ltd.
As reported in the Troubled Company Reporter-Latin America on
Feb. 7, 2007, Messrs. Morrison and Thresh of KPMG Financial
Advisory Services Ltd were Loral Licensing's provisional
liquidators.
The liquidators can be reached at
Mike Morrison
Charles Thresh
Attn: Chris Giddens
KPMG Financial Advisory Services Ltd
P.O. Box HM 906
Hamilton, Bermuda HM DX
Tel: 441 294-2653
Fax: 441 295-8280
LORAL SPACE: Court Names Morrison & Thresh as Liquidators
---------------------------------------------------------
The Supreme Court of Bermuda has appointed Michael W. Morrison
and Charles Thresh as liquidators of Loral Space &
Communications Ltd.
As reported in the Troubled Company Reporter-Latin America on
Feb. 7, 2007, Messrs. Morrison and Thresh of KPMG Financial
Advisory Services Ltd were Loral Space's provisional
liquidators.
The liquidators can be reached at
Mike Morrison
Charles Thresh
Attn: Chris Giddens
KPMG Financial Advisory Services Ltd
P.O. Box HM 906
Hamilton, Bermuda HM DX
Tel: 441 294-2653
Fax: 441 295-8280
SCOTTISH RE: S&P Raises Counterparty Credit Rating to B+ from B
---------------------------------------------------------------
Standard & Poor's Ratings Services raised its counterparty
credit rating on Scottish Re Group Ltd. to 'B+' from 'B' and
removed it from CreditWatch with developing implications, where
it was placed on Dec. 6, 2006. (The CreditWatch implications
had been revised twice since the ratings were originally placed
on CreditWatch on July 31, 2006.)
Standard & Poor's also said that it raised its counterparty
credit and financial strength ratings on Scottish Re's operating
companies as well as its ratings on dependent unwrapped
securitized deals related to Scottish Re to 'BB+' from 'BB' and
removed them from CreditWatch developing.
The outlook on Scottish Re and its operating companies is
developing.
In addition, Standard & Poor's affirmed its ratings on
securitizations that are wrapped or independent of the credit
quality of Scottish Re.
"The upgrades reflect the completed transaction with MassMutual
Capital Partners LLC and affiliates of Cerberus Capital
Management L.P.," explained Standard & Poor's credit analyst
Neil T. Strauss. In this transaction, an equity investment of
US$600 million (US$300 million from each) was obtained in
exchange for a 68.7% stake in Scottish Re. After the repayment
of a liquidity facility and other expenses, the proceeds provide
Scottish Re with strong capital and good liquidity for the in-
force business. "The upgrades also reflect that virtually all
of the company's level term policies subject to Regulation XXX
reserve requirement will soon be pre-funded with respect to
collateral needs," Mr. Strauss added.
The transaction significantly improves Scottish Re's financial
condition and settles much of the financial-related uncertainty
that has plagued the company since last summer. However,
Standard & Poor's expect that earnings will remain sub-par over
the near term, as underlying profitability will take time to
emerge, and several nonrecurring items will be recorded. The
company posted an after-tax US$377 million loss in 2006. On the
business side, the company has been able to maintain the third-
largest market position in U.S. life reinsurance market for in-
force business as of Dec. 31, 2006. Nevertheless, selling new
reinsurance business will be challenging as the company looks to
regain its credibility in the market.
The company has begun to address the issues of weak enterprise
risk management as it improves its inadequate operational
processes, which led to earnings surprises over the past several
quarters. Corporate governance will benefit from a renewed
focus from a new board of seasoned executives under a new
structure, which should provide a strong oversight role.
The developing outlook means that the ratings could go up, stay
the same, or go down in the short to medium term. Standard &
Poor's will likely raise the ratings if operational issues are
resolved such that earnings volatility decreases, new sales
grow, and management is able to provide leadership to the
company and thereby recover from the events of the past several
quarters. If financial management remains strong but sales and
earnings are stagnant, the ratings will likely remain unchanged.
If earnings volatility remains high, revenue growth remains low,
and management is unable to refocus the company on consistent,
profitable growth, the ratings will probably be lowered.
Standard & Poor's expects Scottish Re's capital to remain
strong. Liquidity should remain good.
Scottish Re Group Ltd. -- http://www.scottishre.com/-- is a
global life reinsurance specialist. Scottish Re has operating
businesses in Bermuda, Grand Cayman, Guernsey, Ireland, the
United Kingdom, United States, and Singapore. Its flagship
operating subsidiaries include Scottish Annuity & Life Insurance
Company (Cayman) Ltd. and Scottish Re (US), Inc. Scottish Re
Capital Markets, Inc., a member of Scottish Re Group Ltd., is a
registered broker dealer that specializes in securitization of
life insurance assets and liabilities
TAYLOS INVESTMENTS: Proofs of Claim Filing Is Until May 16
----------------------------------------------------------
Taylos Investments Limited's creditors are given until
May 16, 2007, to prove their claims to Robin J. Mayor, the
company's liquidator, or be excluded from receiving any
distribution or payment.
In their proofs of claim, creditors must indicate their full
names, addresses, the full particulars of their debts or claims,
and the names and addresses of their lawyers, if any.
Taylos Investments' shareholder agreed on April 30, 2007, to
place the company into voluntary liquidation under Bermuda's
Companies Act 1981.
The liquidator can be reached at:
Robin J. Mayor
Messrs. Conyers Dill & Pearman
Clarendon House, Church Street
Hamilton, HM DX, Bermuda
TAYLOS INVESTMENTS: Will Hold Final General Meeting on June 8
-------------------------------------------------------------
Taylos Investments Limited's final general meeting will be at
9:30 a.m. on June 8, 2007, or as soon as possible, at:
Messrs. Conyers Dill & Pearman
Clarendon House, Church Street
Hamilton, Bermuda
These agendas will be taken during the meeting:
-- accounting on the manner in which the winding-up of
the company has been conducted and its property
disposed of and of hearing any explanation that may
be given by the liquidator;
-- deciding on the manner in which the books, accounts
and documents of the company and of the liquidator
shall be disposed of; and
-- by resolution dissolving the company.
WOODBOURNE PLACE: Proofs of Claim Filing Deadline Is May 16
-----------------------------------------------------------
Woodbourne Place Ltd.'s creditors are given until May 16, 2007,
to prove their claims to Robin J. Mayor, the company's
liquidator, or be excluded from receiving any distribution or
payment.
In their proofs of claim, creditors must indicate their full
names, addresses, the full particulars of their debts or claims,
and the names and addresses of their lawyers, if any.
Woodbourne Place's shareholder agreed on April 30, 2007, to
place the company into voluntary liquidation under Bermuda's
Companies Act 1981.
The liquidator can be reached at:
Robin J. Mayor
Messrs. Conyers Dill & Pearman
Clarendon House, Church Street
Hamilton, HM DX, Bermuda
WOODBOURNE PLACE: Will Hold Final General Meeting on June 6
-----------------------------------------------------------
Woodbourne Place Ltd.'s final general meeting will be at 9:30
a.m. on June 6, 2007, or as soon as possible, at:
Messrs. Conyers Dill & Pearman
Clarendon House, Church Street
Hamilton, Bermuda
These agendas will be taken during the meeting:
-- accounting on the manner in which the winding-up of
the company has been conducted and its property
disposed of and of hearing any explanation that may
be given by the liquidator;
-- deciding on the manner in which the books, accounts
and documents of the company and of the liquidator
shall be disposed of; and
-- by resolution dissolving the company.
=============
B O L I V I A
=============
* BOLIVIA: Jinal Steel Has Until July to Provide Mutun Documents
----------------------------------------------------------------
Prensa Latina reports that the Bolivian administration has set
60-day limit for Indian firm Jindal Steel to disclose required
original documents for a Mutun iron-mining contract.
Mining minister Pedro Mariovo told reporters that Jindal, so
far, has only provided one original document. Mr. Mariovo
concluded that the negotiation process is cut short. He said
that Jindal has all facilities for the project to be
materialized.
Mr. Mariovo, however, noted that Jindal Steel and Power Ltd.
complied with one of the 14 necessary requirements to ink a
contract to exploit the country's largest iron field, Prensa
Latina asserts.
* * *
Fitch Ratings assigned these ratings on Bolivia:
Rating Rating Date
Country Ceiling B- Jun. 17, 2004
Long Term IDR B- Dec. 14, 2005
Local Currency
Long Term Issuer
===========
B R A Z I L
===========
AMR CORP: Pays US$285-Mil. Balance of Sr. Secured Revolving Loan
----------------------------------------------------------------
AMR Corporation provided an update on actions taken in the first
quarter of 2007 as part of its ongoing efforts to strengthen its
balance sheet and build a stronger financial foundation.
The company's subsidiary, American Airlines, has paid in full
the US$285 million principal balance of its senior secured
revolving credit facility, which had been fully drawn since its
establishment in December 2004. AMR's US$444 million term loan
facility remains outstanding.
The company said that the revolving credit facility may be
redrawn, subject to certain conditions, and repaid from time to
time depending on various factors, such as economic and industry
conditions and the company's financial condition.
American Eagle Airlines Inc., its wholly owned subsidiary, has
prepaid US$79 million in principal amount of aircraft debt. The
prepayment, which occurred in February, is incremental to AMR's
US$1.3 billion in scheduled principal payments in 2007.
AMR anticipates ending the first quarter of 2007 with US$5.8
billion in cash and short-term investments, including a
restricted balance of nearly US$500 million, compared to a cash
and short-term investment balance of US$4.8 billion, including a
restricted balance of US$510 million, in the first quarter of
2006.
AMR also said that it expects to complete by mid-April the
refinancing of US$350 million in municipal bonds that originally
were issued in 1990 to help fund the development of American's
Alliance Maintenance and Engineering Base in Fort Worth, Texas.
The closing of the transaction is subject to certain government
approvals. The refinanced bonds, to be issued by
AllianceAirport Authority Inc., will have a blended interest
rate of 5.46%, down from a rate of 7.5% in the current bonds,
and a final maturity of Dec. 1, 2029.
AMR estimates that by paying down the revolving credit facility
balance, prepaying the aircraft debt and refinancing the
maintenance facility bonds, as described above, it will
eliminate US$15 million of its annual net interest expense.
"The company believes that these actions illustrate its
continued progress in strengthening its balance sheet, which is
an important component of the company's Turnaround Plan that has
helped to position the company for long-term success," Thomas W.
Horton, executive vice president of finance and planning and
chief financial officer of AMR said. "While there is more work
to do, the company is building a stronger company by reducing
debt and increasing liquidity while continuing to find ways to
grow revenue and reduce costs."
AMR's balance sheet improvement include:
* more than US$1.1 billion, raised through three equity
issuances in the past 17 months, including the sale of
13 million new shares in January that raised US$500
million;
* reduced total debt, which includes the principal
amount of airport facility tax-exempt bonds and the present
value of aircraft operating lease obligations, to
US$18.4 billion at the end of the fourth quarter of 2006,
compared to US$20.1 billion a year earlier, the company
expects to end the first quarter of 2007 with total debt of
US$17.6 billion;
* reduced net debt, which is defined as total debt less
unrestricted cash and short-term investments, from
US$16.3 billion at the end of 2005 to US$13.6 billion at
the end of 2006, the Company expects to end the first
quarter of 2007 with net debt of US$12.3 billion.
American Airlines -- http://www.AA.com/-- is the world's
largest airline. American, American Eagle and the
AmericanConnection regional airlines serve more than 250 cities
in over 40 countries with more than 3,800 daily flights.
American Airlines flies to Belgium, Brazil, Japan, among others.
The combined network fleet numbers more than 1,000 aircraft.
American Airlines is a founding member of the oneworld Alliance,
whose members serve more than 600 destinations in over 135
countries and territories.
At Dec. 31, 2005, AMR Corporation's equity deficit doubled to
US$1.478 billion from a US$581 million deficit from
Dec. 31, 2004.
* * *
As reported in the Troubled Company Reporter-Latin America on
April 17, 2007, Standard & Poor's Ratings Services affirmed its
ratings on AMR Corp. (B/Positive/B-2) and subsidiary American
Airlines Inc. (B/Positive/--). S&P revised AMR's rating outlook
to positive from stable.
BANCO BRADESCO: Eyes Up to 25% Boost in Lending This Year
---------------------------------------------------------
Banco Bradesco Chief Executive Officer Marcio Cypriano said in a
conference call that the bank expects to increase lending by
20% to 25% in 2007, compared to 2006.
Mr. Cypriano told Business News Americas, "Lending growth is
tied to economic growth. If GDP grows 4% to 4.1% this year,
then our loan book will certainly grow 25%."
Banco Bradesco expects an up to 30% boost in retail lending on
more home loans and vehicle funding operations. It also sees an
up to 22% growth in commercial lending, BNamericas notes, citing
Investor Relations Manager Milton Vargas.
Banco Bradesco said in its financial statements that its
lending, including receivables, increased 25.1% to BRL122
billion at the end of March 2007, compared to March 2006.
Lending in March 2007 grew 5.30%, compared to December 2006.
According to BNamericas, higher lending led increased Banco
Bradesco's net profits 11.4% in the first quarter 2007, compared
to the same quarter in 2006.
"Our challenge was to increase lending with tighter margins and
that's what we did last quarter," Mr. Cypriano told BNamericas.
Headquartered in Sao Paulo, Brazil, Banco Bradesco S.A. (NYSE:
BBD) -- http://www.bradesco.com.br/-- prides itself on serving
low-and medium-income individuals in Brazil since the 1960s.
Bradesco is Brazil's largest private bank, with more than 3,000
banking branches, and also a leader in insurance and private
pension management. Bradesco has branches throughout Brazil as
well as one in New York, and Japan. Bradesco offers Internet
banking, insurance, pension plans, annuities, credit card
services (including football-club affinity cards for the soccer-
mad population), and Internet access for customers. The bank
also provides personal and commercial loans, along with leasing
services.
* * *
As reported in the Troubled Company Reporter-Latin America on
Jan. 26, 2007, Fitch Ratings affirmed these issuer default
ratings on Bradesco, with a Stable Outlook: Long-term foreign
currency at 'BB+'; Long-term local currency at 'BBB-';
Individual rating at 'B/C'; Local currency short-term at 'F3';
Short-term at 'B'; Support rating of '4'; National short-term
rating 'F1+(bra)'; and National long-term rating 'AA+(bra)'.
As reported in the Troubled Company Reporter-Latin America on
Nov. 27, 2006, Standard & Poor's Ratings Services maintained the
'BB+' ratings on both of Banco Bradesco SA's foreign and local
currency counterparty credit rating, however it changed the
ratings outlook to positive from stable on both ratings:
-- Foreign currency counterparty credit rating
* to BB+/Positive/B from BB+/Stable/B
-- Local currency counterparty credit rating
* to BB+/Positive/B from BB+/Stable/B
-- Brazil national scale rating
* to brAA+/Positive/brA-1 from brAA+/Stable/brA-
BANCO BRADESCO: Posts 11.4% Rise in First Qtr. 2007 Net Income
--------------------------------------------------------------
Banco Bradesco reported first quarter 2007 results.
Highlights:
-- Net Income in 1Q07 was BRL1.705 billion, 11.4% compared
to 1Q06 (equivalent to BRL0.85 per share).
-- In the three-month period of 2007, the annualized Return
on Average Stockholders' Equity stood at 30.2% and
at 34.6% in 1Q06.
-- Total Assets reached BRL281.944 billion in March 2007,
30.3% compared to March 2006 and 6.2% compared to
December 2006, BRL101.473 billion or 36.0% of which
represented by Loan and Leasing Operations.
-- Unrealized Net Income, represented by the difference
between market values of assets and liabilities and
their respective book values, totaled BRL3.877 billion
in March 2007 against BRL1.822 billion in March 2006,
a BRL2.055 billion increase (note 32b to the Financial
Statements).
-- Net Income Breakdown in 1Q07 was: 31.0% originated by
Insurance, Private Pension Plans and Certificated
Savings Plans, 25.3% by Loan Operations, 29.5% by Fee
Income, 7.5% by Securities and Treasury and 6.7% by
Funding Results.
-- Adjusted Net Interest Income reached BRL5.019 billion
in 1Q07, a 0.9% increase compared to 1Q06 and a 0.5%
decrease compared to 4Q06.
-- Fee Income totaled BRL2.559 billion, increasing by
BRL519 million, or 25.4% against 1Q06. Compared to
4Q06, it grew by BRL135 million, or 5.6%.
-- Operating Efficiency Ratio, for the accumulated 12-month
period, continued to present consistent improvement,
standing at 42.1% in March 2007, against 44.1%, in
March 2006.
-- Remuneration to Stockholders as Interest on Own
Capital/Dividends paid and provisioned, related to the
year 2007, amounted to BRL601 million (BRL$539 million
in the same period of 2006).
-- On April 27, Moody's Investors Service upgraded
Bradesco's Bank Financing Strength Rating from C-
to B-. This rating is the highest one granted to
Brazilian banks in that category.
-- On March 30, 2007, Banco Bradesco's Market Capitalization
reached BRL83.507 billion, corresponding to a 15.6% jump
compared to the same period of 2006. Based on the most
recent stock price, as of May 4, 2007, Bradesco's Market
Cap stood at BRL90.169 billion.
Headquartered in Sao Paulo, Brazil, Banco Bradesco S.A. (NYSE:
BBD) -- http://www.bradesco.com.br/-- prides itself on serving
low-and medium-income individuals in Brazil since the 1960s.
Bradesco is Brazil's largest private bank, with more than 3,000
banking branches, and also a leader in insurance and private
pension management. Bradesco has branches throughout Brazil as
well as one in New York, and Japan. Bradesco offers Internet
banking, insurance, pension plans, annuities, credit card
services (including football-club affinity cards for the soccer-
mad population), and Internet access for customers. The bank
also provides personal and commercial loans, along with leasing
services.
* * *
As reported in the Troubled Company Reporter-Latin America on
Jan. 26, 2007, Fitch Ratings affirmed these issuer default
ratings on Bradesco, with a Stable Outlook: Long-term foreign
currency at 'BB+'; Long-term local currency at 'BBB-';
Individual rating at 'B/C'; Local currency short-term at 'F3';
Short-term at 'B'; Support rating of '4'; National short-term
rating 'F1+(bra)'; and National long-term rating 'AA+(bra)'.
As reported in the Troubled Company Reporter-Latin America on
Nov. 27, 2006, Standard & Poor's Ratings Services maintained the
'BB+' ratings on both of Banco Bradesco SA's foreign and local
currency counterparty credit rating, however it changed the
ratings outlook to positive from stable on both ratings:
-- Foreign currency counterparty credit rating
* to BB+/Positive/B from BB+/Stable/B
-- Local currency counterparty credit rating
* to BB+/Positive/B from BB+/Stable/B
-- Brazil national scale rating
* to brAA+/Positive/brA-1 from brAA+/Stable/brA-
BANCO NACIONAL: Okays US$199.8-Million Loan to Dofcon Navegacao
---------------------------------------------------------------
Banco Nacional de Desenvolvimento Economico e Social aka BNDES
approved a US$199.8 million financing to Dofcon Navegacao Ltda.,
for the acquisition of two vessels specialized in submarine
construction, maintenance and inspection, destined to service
the oil and gas industry, to be built by Aker Promar S.A - RJ
shipyard. This acquisition has the financial support of Fundo
da Marinha Mercante -- Merchant Marine Fund -- through BNDES.
These will be the first vessels of this kind to be built in
Brazil, relying on DOF Group submarine construction technology.
BNDES financing accounts for 90% of the ship value.
The operation will bring savings in foreign currency, due to
replacement of the services currently rendered by foreign flag
ships and contribute for the development and technologic
capacity of the national shipyard base, besides maintaining 500
direct employments during the construction phase. Another 60
new working posts should be generated for the operation of each
unit. Another positive aspect will be the possibility to attend
the demand for submarine construction vessels, thus increasing
the fleet of offshore vessels under the national flag.
The DOF Group is headquartered in Storebo, Norway, and started
its activities of naval support in 1981. It currently ranks as
7th in the worldwide ranking of the naval support segment, with
a fleet of 56 ships, already including the units under
construction. This fleet comprises 22 PSV (Platform Supply
Vessels -- vessels used to supply offshore platforms), 9 AHTS
(Anchor Handling Tug and Supply -- tugs used to supply and
handle anchors for platforms) and 25 MPSV (Multipurpose Supply
Vessel -- multipurpose vessels) equipped for construction,
maintenance and repair of submarine facilities.
DOF has been present in Brazil through its controlled companies,
Noskan Offshore Ltda. and Skannor Offshore Ltda., owners of four
naval support Brazilian vessels, in operation for Petrobras, two
of which are PSV and two AHTS, besides another two AHTS under
construction. DOFCON ASA, controller of DOFCON Navegacao Ltda.,
is an open capital company established in Norway in 2006 by the
DOF Group, for the purpose of investing in special vessels for
the submarine construction and maintenance market.
DOFCON Navegacao Ltda. is headquartered in Rio de Janeiro,
jointly with the other companies of the DOF Group, and was
incorporated in 2006 for the purpose of opening a subsidiary of
its Norwegian controller DOFCON ASA, in Brazil. The present
financing marks the consolidation of DOFCON Navegacao Ltda.
activities in Brazil. Its operating base in Macae should also
be shared by the other companies of the Group.
About BNDES
Banco Nacional de Desenvolvimento Economico e Social is Brazil's
national development bank. It provides financing for projects
within Brazil and plays a major role in the privatization
programs undertaken by the federal government.
* * *
As reported on Nov. 27, 2006, Standard & Poor's Ratings Services
changed the ratings outlook to Positive from Stable on Banco
Nacional de Desenvolvimento Economico e Social SA's BB Foreign
currency counterparty credit rating and BB+ Local currency
counterparty credit rating.
DRESSER-RAND: Lehman Bros. Maintains "Overweight" Rating on Firm
----------------------------------------------------------------
Newratings.com reports that Lehman Brothers analyst James C.
West has kept his "overweight" rating on Dresser-Rand Group
Inc's shares.
Newratings.com relates that the target price for Dresser-Rand's
shares was increased to US$37 from US$31.
Mr. West said in a research note published on May 7 that
Dresser-Rand's first quarter 2007 operating earnings per share
were ahead of the estimates due to higher-than-anticipated
operating income in two segments.
Mr. West told Newratings.com that Dresser-Rand is considered as
"the main beneficiary of the global energy infrastructure build-
out that is currently taking place."
The earnings per share estimate for 2007 was increased to
US$1.70 from US$1.65, while estimate for 2008 was raised to
US$2.25 from US$2.10.
Dresser-Rand Group Inc. (NYSE: DRC) is among the largest
suppliers of rotating equipment solutions to the worldwide oil,
gas, petrochemical, and process industries. It operates
manufacturing facilities in the United States, France, Germany,
Norway, India, and Brazil, and maintains a network of 24 service
and support centers covering 105 countries.
* * *
Standard & Poor's Ratings Services raised on Sept. 13, 2006, its
corporate credit rating on rotating equipment maker Dresser-Rand
Group Inc. to 'BB-' from 'B+' and revised the outlook on the
rating to stable from positive.
EMI GROUP: Confirms Approach of Potential Bidders
-------------------------------------------------
EMI Group PLC confirmed May 4, that it received a number of
preliminary indications of interest to acquire the company.
According to Wall Street Journal reporters, Daniel Thomas and
Jessica Hodgson, although EMI didn't identify the potential
bidders, recent reports have suggested that U.S. private-equity
firm One Equity has approached it on a takeover that would value
the company at about GBP3 billion.
EMI also faces takeover interest from two other U.S. private
equity firms, Fortress and Cerberus, Reuters reports, citing the
Financial Times as its source.
According to the report, all three private equity firms has sent
letters expressing interest in buying EMI, and that the music
group would open its books to all three bidders which are
expected to make presentations to the board next week.
The FT also said that EMI gave the three groups until May 23 --
the time of its annual results -- to make fully financed, formal
offers.
EMI shares went up 18.75 pence to 246.25 pence on the London
Stock Exchange on May 4.
EMI stated that there could be no certainty that any offer will
ultimately be made.
On March 2, EMI rejected Warner Music Group's GBP2.1 billion
non-binding takeover bid, saying that the price of 260 pence per
share in cash for EMI is inadequate.
About EMI
Headquartered in London, United Kingdom, EMI Group PLC --
http://www.emigroup.com/-- is the world's largest independent
music company, operating directly in 50 countries and with
licensees in a further 20. The group has operations in Brazil,
China, and Hungary. The group employs over 6,600 people.
Revenues in 2005 were near EUR2 billion and operating profit
generated was over EUR225 million.
At March 31, 2006, EMI Group's consolidated balance sheet
revealed GBP1.817 billion in total assets, GBP2.544 billion in
total liabilities and GBP726.6 million in shareholders' deficit.
* * *
As reported on March 1, Standard & Poor's Ratings Services
placed its ratings on Warner Music Group Corp., including the
'BB-' corporate credit rating, on CreditWatch with negative
implications, following the company's statement that it is
exploring a possible merger agreement with EMI Group PLC
(BB-/Watch Neg/B), which EMI management has confirmed.
As reported on Jan. 17, Moody's Investors Service downgraded EMI
Group Plc's Corporate Family and senior debt ratings to Ba3 from
Ba2. All ratings remain under review for possible further
downgrade.
NORTEL NETWORKS: Posts US$103 Mln Net Loss in First Quarter 2007
----------------------------------------------------------------
Nortel Networks Corp. released its financials results for the
first quarter ended March 31, 2007, prepared in accordance with
United States generally accepted accounting principles.
Nortel posted US$103 million in net losses against US$2.5
billion in revenues for the first quarter ended March 31, 2007,
compared with US$171 million in net losses against US$2.4
billion in revenues for the same period in 2006.
At March 31, 2007, the Company's balance sheet showed
US$18.7 billion in total assets, US$15.2 billion in total
liabilities and US$2.7 billion in stockholders' equity.
"I am very pleased with our revenue and gross margin performance
to start the year. Our first quarter revenues grew 4 percent
year over year or 12 percent if you consider that we divested
our UMTS Access business at the end of last year, and we showed
positive cash flow from operations for the second quarter in a
row excluding the impact of the litigation settlement" Mike
Zafirovski, President and CEO, Nortel, said. "While our first
quarter results demonstrated significantly improved financial
performance, we must and will continue our relentless pursuit of
customer satisfaction and business transformation to deliver on
our 2007 business plan."
Outlook
"For the full year 2007, we continue to expect revenues to be
flat to down slightly compared to 2006, reflecting a decrease in
revenues as a result of the UMTS Access disposition. We expect
full year 2007 gross margin to be in the low 40's, as a
percentage of revenues, and operating margin to be at 5 percent,
or higher, of revenues, David Drinkwater, interim chief
financial officer, Nortel said.
"For the second quarter of 2007, we expect revenues to be flat
to down slightly compared to the year ago quarter. We expect
second quarter of 2007 gross margin to be around 40, as a
percentage of revenue, and operating expenses (SG&A and R&D) to
be down by high single digits, compared to the year ago
quarter," Mr. Drinkwater added.
About Nortel
Headquartered in Ontario, Canada, Nortel Networks Corporation
(NYSE/TSX: NT) -- http://www.nortel.com/-- is a recognized
leader in delivering communications capabilities that enhance
the human experience, ignite and power global commerce, and
secure and protect the world's most critical information.
Serving both service provider and enterprise customers, Nortel
delivers innovative technology solutions encompassing end-to-end
broadband, Voice over IP, multimedia services and applications,
and wireless broadband designed to help people solve the world's
greatest challenges Nortel does business in more than 150
countries including the United Kingdom, Denmark, Russia, Norway,
Australia, Brazil, China, Singapore, among others.
* * *
Dominion Bond Rating Service confirmed the long-term ratings of
Nortel Networks Capital Corporation, Nortel Networks
Corporation, and Nortel Networks Limited at B (low) along with
the preferred share ratings of Nortel Networks Limited at Pfd-5
(low). All trends are Stable.
DBRS confirmed B (low) Stb Senior Unsecured Notes; B (low) Stb
Convertible Notes; B (low) Stb Notes & Long-Term Senior Debt;
Pfd-5 (low) Stb Class A, Redeemable Preferred Shares; and Pfd-5
(low) Stb Class A, Non-Cumulative Redeemable Preferred Shares.
Additionally, Moody's Investors Service affirmed the B3
corporate family rating of Nortel; assigned a B3 rating to the
proposed US$2billion senior note issue; downgraded the US$200
million 6.875% Senior Notes due 2023 and revised the outlook to
stable from negative.
Standard & Poor's also affirmed its 'B-' long-term and 'B-2'
short-term corporate credit ratings on the company, and assigned
its 'B-' senior unsecured debt rating to the company's proposed
US$2 billion notes. S&P said the outlook is stable.
NRG ENERGY: Earns US$65 Million in 2007 First Quarter
-----------------------------------------------------
NRG Energy, Inc. reported a US$65 million net income for the
three months ended March 31, 2007, compared with US$26 million
for the same period last year.
The 2007 improvement primarily resulted from the inclusion of
three months of operating results for NRG Texas, which was
acquired by NRG in February 2006, increased generation and
pricing in the Northeast region, and US$107 million in after-tax
refinancing expenses in 2006 associated with the acquisition of
NRG Texas. MtM changes, primarily associated with economic
hedges on our baseload assets, unfavorably impacted net income
in 2007 by US$55 million while benefiting 2006 earnings by US$44
million. Quarterly cash flow from operations of US$106 million
was impacted by US$120 million of cash collateral outflows.
First quarter 2006 adjusted operating cash flow of US$313
million benefited from US$230 million of collateral inflows.
Operating cash flows, exclusive of collateral movements,
increased by US$143 million versus the same period last year.
This improvement reflects NRG Texas' contributions for the
entire quarter in 2007. In addition, current year cash flow
from operations benefited from US$39 million in higher contract
prices that resulted from last November's hedge reset
transaction.
"Over the past 3-1/2 years, our continuous focus on executing a
multi-faceted growth plan off a foundation of strong commercial
and plant operations has brought NRG to a much stronger place
financially and strategically," David Crane, NRG President and
Chief Executive Officer said. " NRG's operational effectiveness
and the promise of our ongoing growth initiatives have put us in
the position where we can both initiate a recurring cash
dividend and generate the capital to reinvest in our business
through repowering NRG and other core initiatives."
About NRG
A Fortune 500 company, NRG Energy, Inc. (NYSE: NRG)
-- http://www.nrgenergy.com/-- owns and operates a diverse
portfolio of powergenerating facilities, primarily in Texas and
the Northeast, South Central and West regions of the
United States. Its operations include baseload, intermediate,
peaking, and cogeneration and thermal energy production
facilities. NRG also has ownership interests in generating
facilities in Australia, Germany and Brazil.
NRG ENERGY: Fitch Says Common Dividend Plan Won't Affect Ratings
----------------------------------------------------------------
According to Fitch Ratings, NRG Energy Inc.'s (NRG; Issuer
Default Rating [IDR] 'B', with a Stable Rating Outlook)
announcement that it plans to pay a common dividend beginning
2008 through the creation of a holding company structure does
not immediately affect the company's ratings or rating Outlook.
As proposed, NRG would create a parent holding company that
would issue up to US$1 billion in debt, the proceeds from which
would be used to pay down the existing Term Loan B at the
operating company level. On a consolidated basis, NRG's total
debt outstanding is expected to remain unchanged at
approximately US$8.8 billion. The new holding company debt
would be structurally subordinated to the existing operating
company debt. By reducing debt at the operating company level,
NRG believes it will have sufficient room under the restricted
payments basket to pay a common dividend of approximately US$150
million annually.
Fitch is in the process of reviewing NRG's ratings, including an
updated recovery analysis based on recent forward commodity
prices, which may result in more robust valuations for NRG's
merchant generation portfolio. In Fitch's view, the reduction
of the Term Loan B could improve the ratings of the unsecured
bonds. The current ratings of NRG are supported by its hedged
base-load capacity and relatively diverse generation portfolio.
As described in Fitch's 'U.S. Power and Gas 2007 Outlook', the
outlook for competitive generation has improved, and this should
benefit NRG.
NRG ENERGY: Moody's Holds Corporate Family Rating at Ba3
--------------------------------------------------------
Moody's Investors Service affirmed the ratings of NRG Energy,
Inc., including its Corporate Family Rating at Ba3, the
Probability of Default Rating at Ba3, the senior unsecured debt
at B1, and its Speculative Grade Liquidity Rating of SGL-2,
following the company's announcement to return more capital to
shareholders in the form of existing and future share
repurchases and to begin paying a common dividend during the
first quarter of 2008.
Moody's also affirmed NRG's Ba1 bank loan rating for the
company's secured revolving credit and term loan facility, which
is being amended and re-priced. The rating outlook for NRG
remains negative.
Additionally, Moody's has assigned a (P)B2 rating to a planned
US$1 billion delayed draw secured term loan at NRG Holdings,
Inc., a new holding company being formed, which will own the
common stock of NRG.
"While the rating affirmation incorporates our expectation that
the company will be able to generate meaningful free cash for
the next few years, the company's announcement concerning
capital allocation indicates a continuing shift towards
shareholder rewards, at a time when future capital requirements
for the sector and the company have increased and are expected
to remain so for the foreseeable future, " said A.J. Sabatelle,
Vice President -- Senior Credit Officer of Moody's.
The rating affirmation reflects relatively stable cash flows
expected at NRG given the company's competitive position in
several key markets and the degree of forward hedges in place
for the next five years. NRG's cash flow (CFO pre-W/C) to total
adjusted debt was 13.7% during 2006 which should improve further
during 2007 given a full year benefit of higher cash flows from
the hedge reset program executed by the company in November
2006. NRG's expects to generate nearly US$900 million of free
cash flow during 2007. Given the degree of forward hedges
entered into by the company and the prospects for continuing
relatively high natural gas prices, Moody's expects that under
most reasonable scenarios, the company's cash flow (CFO pre-W/C)
to total adjusted debt is expected to achieve at least a 13%
level over the next several years, which remains consistent with
the existing Ba3 Corporate Family Rating.
The rating affirmation also considers several initiatives
announced by the company designed to return more capital to
shareholders. These initiatives include the commencement of an
annual common dividend of US$0.50 per share, paid quarterly
beginning in the first quarter 2008, and the continuation of
share repurchase programs after the current authorized share
buyback program is completed. To help facilitate these
shareholder friendly objectives, NRG's intends to amend and
restate its existing revolving credit and term loan facility and
to form NRG Holdings, which together with a delayed draw US$1
billion term loan will substantially increase capacity under the
restricted payments basket in the company's existing indentures.
Under the planned refinancing, NRG will become a wholly owned
operating subsidiary of NRG Holdings. NRG Holdings will borrow
up to US$1 billion under a term loan and will downstream the net
proceeds to NRG as an equity contribution. NRG will use the net
proceeds for the prepayment of a portion of its existing Term B
loan. Upon completion, the restricted payments capacity under
NRG's bond indentures will increase by an amount equal to the
equity contribution from NRG Holdings to NRG, thereby allowing
NRG to return more capital to shareholders in the future. Upon
the formation of NRG Holdings, existing NRG common and preferred
shares will be exchanged for identical NRG Holdings level
securities.
The NRG Holdings term loan is being syndicating as a new
US$1 billion delayed draw term loan to NRG's existing secured
revolver and term loan lenders as part of the amendment and re-
pricing request. Current NRG lenders will be asked to
simultaneously commit to a strip of new NRG Holdings term loans,
which will be funded once the holding company is formed. Since
certain regulatory approvals are required in order for NRG
Holdings to be formed, NRG does not expect the formation to
occur until the fourth quarter 2007. The (P) B2 rating assigned
to NRG Holdings' secured term loan incorporates Moody's current
understanding of the proposed refinancing, and reflects the
structural subordination of this creditor class to senior
unsecured and senior secured creditors at NRG.
NRG's negative rating outlook reflects, in Moody's opinion, a
trend by management to steadily implement shareholder friendly
initiatives within the past year. Since August 2006, NRG has
amended financing documents and has executed financings to
return more capital to the shareholders either by increasing the
restricted payments basket or by structuring financings that
allow capital to flow to shareholders outside of the restricted
payments basket. Additionally, the negative outlook
incorporates the higher permanent debt levels at NRG incurred in
November 2006 as part of the hedge reset. While cash margins,
generation values, and hedging opportunities for independent
power companies have all increased within the recent past, the
capital needs of companies in the sector, including NRG, have
also continued to move in an upward direction, particularly for
future environmental related capital expenditures. With a
higher permanent level of debt embedded in the capital
structure, an increasing shareholder focus by management, and
the cost of future capital investment programs increasing, NRG's
credit quality could weaken, particularly if the company's
future margins compress due to lower natural gas prices, lower
market heat rates, or successful efforts key stakeholders to re-
regulate segments of the sector.
In light of the negative rating outlook as well as the company's
capital investment program, share repurchase plan and other
related initiatives, limited near-term prospects exist for the
rating to be upgraded; however, the rating outlook could
stabilize if the company makes meaningful progress towards using
free cash flow to permanently reduce debt over the next several
years, and/or if the company finances its anticipated large
capital investment program in a relatively conservative manner
resulting in a adjusted cash flow (CFO pre-W/C) to total
adjusted debt rising to the mid-teens level on a sustainable
basis. Moody's understands that the company's secured credit
facilities will continue to require lenders to accept for
prepayment 50% of any excess cash flow offered by NRG, which
should help to facilitate debt repayment.
The rating could be downgraded if the degree of shareholder
initiatives further accelerates over the next twelve to eighteen
months without meaningful progress towards reducing consolidated
debt or if the company chooses to finance its capital investment
program with higher than anticipated levels of debt.
Additionally, should margins compress across NRG's existing
generation fleet or should additional leverage be incurred to
finance shareholder rewards causing adjusted cash flow (CFO pre-
W/C) to total adjusted debt to fall below 10% for an extended
period, the rating could be downgraded.
Ratings affirmed:
NRG Energy, Inc.
* Corporate family rating at Ba3;
* Probability of default rating at Ba3;
* Speculative Grade Liquidity Rating of SGL-2;
Ratings affirmed/LGD assessments revised;
NRG Energy, Inc.
* Senior unsecured notes at B1 (LGD 5, 78% from LGD5, 77%);
* Shelf registration for senior unsecured debt at
(P) B1 (LGD 5, 78% from LGD5, 77%);
Ratings and assessments affirmed:
NRG Energy, Inc.
* Senior secured revolving credit and term loan facility at
Ba1 (LGD2, 22%)
* Preferred stock at B2, LGD 6, 98%;
* Shelf registration for senior secured debt at
(P) Ba1 (LGD 2, 22%)
* Shelf registration for subordinated debt at
(P)B2, LGD 6, 97%;
* Shelf registration for preferred stock at (P)B2, LGD 6,
98%;
Rating assignment:
NRG Holdings, Inc.
* Senior secured term loan at (P)B2
Headquartered in Princeton, New Jersey, NRG Energy, Inc. owns
and operates power generating facilities, primarily in Texas and
the northeast, south central and western regions of the United
States. NRG also owns generating facilities in Australia,
Brazil, and Germany.
NRG ENERGY: S&P Lifts Rating on US$4.7 Billion Unsec. Bonds to B
----------------------------------------------------------------
Standard & Poor's Ratings Services raised its rating on NRG
Energy Inc.'s US$4.7 billion unsecured bonds to 'B' from 'B-'
and assigned its 'B-' rating to the proposed US$1 billion
delayed-draw term loan B at NRG Holdings Inc., a newly created
holding company that would own 100% of NRG's equity.
In addition, Standard & Poor's affirmed the 'B+' corporate
credit rating on NRG and affirmed the 'BB-' rating on NRG's
US$3.148 billion term loan B; the 'CCC+' rating on the company's
preferred stock, and the 'B-2' short-term rating. The outlook
on all ratings is stable. The proceeds of the term loan B can
only be used to pay down the existing term loan B debt at NRG,
creating room for the planned dividends under the restricted
payments basket of the unsecured bond indenture.
"The raised rating on NRG's senior unsecured bonds is a result
of our asset coverage test," said Standard & Poor's credit
analyst Swami Venkataraman. "The term loan B at NHI is rated
'B-', reflecting its subordination to more than US$8.6 billion
of debt at NRG."
These rating actions follow NRG's announcement that it will
create a new holding company to facilitate the payment of a
common dividend of US$100 million-US$150 million per year
starting in the first quarter of 2008. NHI will borrow up to
US$1 billion from the term B market and pay the net proceeds to
NRG as an equity contribution. NRG will use the net proceeds to
prepay portion of its existing term B loan, resulting in no
change to the company's consolidated debt levels.
On completion, the restricted payments capacity under NRG's
unsecured bond indentures will increase by an amount equal to
the equity contribution from the holding company to NRG. The
recovery rating of '5' on NHI's debt reflects its negligible
recovery prospects since lenders are secured only by the equity
interest in NRG and are effectively subordinated to all debt at
NRG, including the US$4.7 billion unsecured bonds. If the
funding occurs, Standard & Poor's expect to raise the rating on
the remaining US$2.148 billion NRG term loan B to 'BB' from 'BB-
', reflecting the greater overcollateralization of the term loan
by NRG's assets and related stronger recovery in the event of a
default.
NRG is primarily engaged in the ownership, development,
construction and operation of power generation facilities, the
trading of energy, fuel, capacity and related products in the
United States and internationally. As of Dec. 31, 2006, NRG
owned 24,175 MW of generating capacity and had about US$8.7
billion in debt.
PETROLEO BRASILEIRO: Gives Final Offer for Bolivian Refineries
--------------------------------------------------------------
Petroleo Brasileiro SA aka Petrobras, in a letter addressed to
Yacimientos Petroliferos Fiscales Bolivianos, the state-owned
petrol company of Bolivia, and to the Bolivian Hydrocarbons
Ministry, has presented the terms of its final proposal for the
sale of the Guillermo Elder Bell Refinery, in Santa Cruz de La
Sierra, and of the Gualberto Villaroel Refinery, in Cochabamba,
Bolivia. The offer is for the full sale of Petrobras' share
participation in both refineries.
Aiming at reaching an agreement with YPFB, Petrobras' offer was
for the lowest value possible, which would still be compatible
with the refineries' revenue-generation capacity. Petrobras
hopes it will be possible to transfer the refineries via a
negotiated solution.
Petrobras will wait for 48 hours for an answer to the offer it
made on Monday.
If an agreement cannot be reached, Petrobras will appeal to all
suitable legal stages to preserve its shareholders' rights.
Headquartered in Rio de Janeiro, Brazil, Petroleo Brasileiro SA
aka Petrobras -- http://www2.petrobras.com.br/ingles/index.asp
-- was founded in 1953. The company explores, produces,
refines, transports, markets, distributes oil and natural gas
and power to various wholesale customers and retail distributors
in Brazil. Petrobras has operations in China, India, Japan, and
Singapore.
Petroleo Brasileiro SA's long-term corporate family rating is
rated Ba3 by Moody's.
Fitch Ratings assigned these ratings on Petroleo Brasileiro's
senior unsecured notes:
Maturity Date Amount Rate Ratings
------------- ------ ---- -------
April 1, 2008 US$400,000,000 9% BB+
July 2, 2013 US$750,000,000 9.125% BB+
Sept. 15, 2014 US$650,000,000 7.75% BB+
Dec. 10, 2018 US$750,000,000 8.375% BB+
Fitch upgraded the foreign currency rating of Petrobras to BB+
from BB, with positive outlook, in conjunction with Fitch's
upgrade of the long-term foreign and local currency IDRs of the
Federative Republic of Brazil to BB, from BB- on June 29, 2006.
ROYAL AHOLD: Fitch Lifts Ratings to BB+ on Foodservice Disposal
---------------------------------------------------------------
Fitch Ratings upgraded the Issuer Default and senior unsecured
ratings of Royal Ahold N.V. (nka Koninklijke Ahold N.V.) to
'BB+' from 'BB'. The Outlook on the Issuer Default rating
remains Positive. Its Short-term rating is affirmed at 'B'.
This rating action follows the announcement of the disposal of
its US foodservice operation to a consortium led by Clayton,
Dubilier & Rice Fund VII, L.P and Kohlberg Kravis Roberts & Co
L.P. for US$7.1 billion. The deal is expected to close in H207.
"The disposal fulfils Ahold's strategic review announced in
November 2006 and enables the group to execute its strategy more
effectively as a more focused food retailer," says Johnny Da
Silva, Director in Fitch's European Retail Leisure Consumer
Products team. "Disposal of other non-core businesses, a
strengthening of the US food retail business and the details of
a strategic plan to be implemented by the future CEO are key
considerations for a further improvement in the ratings."
In FY06 the group improved its financial profile with a lease-
adjusted net debt/EBITDAR of 3.6x. Further improvements in
financial ratios are expected after the disposal of the US
foodservices operations. At FYE06, net debt reduced to
EUR4.6 billion. Once the disposal is completed, approximately
EUR3 billion are expected to be returned to shareholders and
another EUR2 billion are expected to be applied to debt
reduction. Fitch regards this as a balanced move in terms of
evenly benefiting shareholders and bondholders.
Excluding US foodservices, the group should generate pro forma
sales of approximately EUR28 billion with a more balanced split
between the US and Europe - the latter representing
approximately 43% of group sales.
With regards to the US retail operations, as at Q406, Stop&Shop
and Giant Landover posted a like-for-like sales decline of 2%
and 2.1% respectively. The group continues to implement its
value improvement program aimed at repositioning the group in
price and product offerings. The sales performance of
Giant-Carliste/Top Arena was mixed with good growth sales trends
at Giant-Carlisle but negative at Tops. In Europe, the Albert
Heijn Dutch operations posted strong Q406 lfl sales growth of
9%.
STRATOS GLOBAL: Moody's Confirms Ratings After CIP Deal Review
--------------------------------------------------------------
Moody's Investors Service confirmed Stratos Global Corporation's
B1 corporate family, Ba2 senior secured and B3 senior unsecured
ratings and lowered the company's speculative grade liquidity
rating to SGL-4 from SGL-3. The outlook is negative. The long
term ratings reflect a B1 probability of default and loss-given
default assessments of LGD 2, 24% on the senior secured debt and
LGD 5, 77% on the senior unsecured notes.
The rating action follows Moody's review of the pending
transaction in which CIP Canada Investment Inc. plans to acquire
Stratos Global with indirect funding from a subsidiary of
Inmarsat plc. Inmarsat will have a call option to acquire
Stratos Global from CIP Canada beginning in April 2009, prior to
which time Stratos Global will be controlled by an independent
trust and expected to retain its existing debt capital
structure.
The ratings confirmation reflects Moody's belief that Inmarsat
(Ba2/ Negative) is likely to exercise its call option once it is
able to do so in 2009 and that Stratos Global's operating
prospects and debt capital is unlikely to be negatively impacted
by the transaction in the interim period. The rating also
considers the reduction in risk associated with the renewal of
the distribution agreement in 2009 and Moody's expectation that
Stratos Global is likely to improve its cash flow generation
through the next couple of years, which may reduce its adjusted
leverage ratio towards 4.3x by the end of 2008 and produce free
cash flow to adjusted debt of roughly 3% in that year.
The negative outlook considers Moody's view that Stratos' key
credit metrics position the company weakly within the B1 rating
category and risks exist to the continued improvement in
operating performance required to sustain the current rating.
Specifically, while the intensely competitive pricing
environment, which persisted through much of 2005 and the first
half of 2006 has shown signs of stabilizing, the potential for
future results to again become volatile remains possible, in
Moody's opinion. Should a shortfall to Moody's current
expectations occur, Stratos Global's rating is likely to be
lowered. Additionally, the negative outlook and SGL-4 liquidity
rating signal Moody's view that Stratos Global's liquidity is
weak. While the company has sufficient cash and operating lines
to cover modest expected cash consumption through the next year,
Moody's believes there is an elevated possibility that the
company will not be able to maintain compliance with financial
maintenance covenants through the 12 month horizon of the SGL
rating.
Downgrades:
Issuer: Stratos Global Corporation
-- Speculative Grade Liquidity Rating, Downgraded to SGL-4
from SGL-3
-- Senior Secured Bank Credit Facility, Downgraded to
24 - LGD2 from 23 - LGD2
Outlook Actions:
Issuer: Stratos Global Corporation
-- Outlook, Changed To Negative From Rating Under Review
Confirmations:
Issuer: Stratos Global Corporation
-- Probability of Default Rating, Confirmed at B1
-- Corporate Family Rating, Confirmed at B1
-- Senior Secured Bank Credit Facility,
Confirmed at Ba2
-- Senior Unsecured Regular Bond/Debenture,
Confirmed at B3
Headquartered in Bethesda, Maryland, Stratos Global Corporation
(TSX:SGB) -- http://www.stratosglobal.com/-- is a publicly
traded company that provides a range of mobile and fixed-site
remote communications solutions for users operating beyond the
reach of traditional networks. The company has offices in
Canada, Brazil, the United Kingdom, Norway, Germany, the
Netherlands, Sweden, Italy, Spain, Turkey, Russia, Kenya, South
Africa, United Arab Emirates, India, Hong Kong, Japan,
Singapore, Australia and New Zealand.
===========================
C A Y M A N I S L A N D S
===========================
CABLE & WIRELESS: Clients To Have Access to ZoneAlarm Internet
--------------------------------------------------------------
Cable & Wireless (Cayman Islands) told Cayman Net News that it
has partnered with Check Point Software Technologies Ltd, the
worldwide leader in securing the Internet, to provide broadband
subscribers access to Check Point's ZoneAlarm Internet Security
Suite.
Cayman Net News relates that ZoneAlarm is an award-winning
Internet security package that will arm clients with the most
advanced security software available. It will provide
comprehensive, proactive protection against new and emerging
spyware, hacker attacks, identity thieves and viruses.
It will be available to Cable & Wireless' residential and
business clients. ZoneAlarm will provide residential clients
with protection like firewall, antivirus and antispyware for
US$5.95 a month. Subscribers will get Internet content
filtering that will let parents block specific Web sites they
consider inappropriate for their children.
According to Cayman Net News, Cable & Wireless accelerated
Internet connection for all subscribers and launched "Business
Plans" to cater to the increasing needs of Cayman Islands'
business community.
Greg Ross, Cable & Wireless Product Portfolio Manager of
Broadband, told Cayman Net News, "We are very pleased with this
new relationship. Partnering with such a reputable company like
Check Point will only serve to provide our customers with world-
class protection and further enhance our Broadband Product.
Protecting our customers is our number one priority."
About Check Point
Check Point Software Technologies Ltd is a leader in securing
the Internet. The company is a market leader in the worldwide
enterprise firewall, personal firewall, data security and VPN
markets.
About Cable & Wireless
Headquartered in London, Cable & Wireless PLC --
http://www.cw.com/new/-- provides voice, data and IP (Internet
Protocol) services to business and residential customers, as
well as services to other telecoms carriers, mobile operators
and providers of content, applications and Internet services.
Its principal operations are in the United Kingdom, continental
Europe, Asia, the Caribbean, Panama and the Middle East.
* * *
Cable & Wireless Plc carry these ratings:
* Moody's Investors Service
-- Long-Term Corporate Family Rating: Ba3
-- Senior Unsecured Debt: B1
-- Short-Term: NP
-- Outlook: Negative
* Standard & Poor's
-- Long-Term Foreign Issuer Credit Rating: BB-
-- Long-Term Local Issuer Credit Rating: BB-
-- Short-Term Foreign Issuer Credit Rating: B
-- Short-Term Local Issuer Credit Rating: B
-- Outlook: Negative
JAIC-SOMERLEY: Will Hold Final Shareholders Meeting on June 4
-------------------------------------------------------------
Jaic-Somerley Corporate Development Fund Ltd. will hold its
final shareholders meeting on June 4, 2007, at 10:00 a.m., at:
10th Floor
The Hong Kong Club Building
3A Chater Road, Central
Hong Kong
These matters will be taken during the meeting:
1) accounting of the liquidation process showing how the
winding up has been conducted during the preceding year,
and
2) hearing any explanation that may be given by the
liquidators.
A member entitled to attend and vote at the meeting will be
allowed to appoint a proxy, who need not be a member, in his
stead.
The liquidators can be reached at:
Martin Nevil Sabine
Leung Mei Han
Yoshiki Sasaki
Yoshiaki Hasegawa
Au Yip Hang
10th Floor, The Hong Kong Club Building
3A Chater Road, Central
Hong Kong
LATTICE MASTER: Sets Final Shareholders Meeting for June 25
-----------------------------------------------------------
Lattice Master Fund Ltd. will hold its final shareholders
meeting on June 25, 2007, at 10:00 a.m., at:
5th Floor, Bermuda House
Dr. Roy's Drive, George Town
Grand Cayman, Cayman Islands
These matters will be taken during the meeting:
1) accounting of the liquidation process showing how the
winding up has been conducted during the preceding year,
and
2) authorizing the liquidator to retain the company's
records for a period of five years from its dissolution,
after which they may be destroyed.
A member entitled to attend and vote at the meeting will be
allowed to appoint a proxy, who need not be a member, in his
stead.
The liquidator can be reached at:
Terry W. Carson
Grant Thornton (Cayman)
P.O. Box 1044
George Town, Grand Cayman KY1 1102
Cayman Islands
Telephone: (345) 949-8588
Fax: (345) 949-7325
LATTICE PARTNERS: Holding Final Shareholders Meeting on June 25
---------------------------------------------------------------
Lattice Partners Ltd. will hold its final shareholders meeting
on June 25, 2007, at 11:00 a.m., at:
5th Floor, Bermuda House
Dr. Roy's Drive, George Town
Grand Cayman, Cayman Islands
These matters will be taken during the meeting:
1) accounting of the liquidation process showing how the
winding up has been conducted during the preceding year,
and
2) authorizing the liquidator to retain the company's
records for a period of five years from its dissolution,
after which they may be destroyed.
A member entitled to attend and vote at the meeting will be
allowed to appoint a proxy, who need not be a member, in his
stead.
The liquidator can be reached at:
Terry W. Carson
Grant Thornton (Cayman)
P.O. Box 1044
George Town, Grand Cayman KY1 1102
Cayman Islands
Telephone: (345) 949-8588
Fax: (345) 949-7325
=========
C H I L E
=========
COEUR D'ALENE: Approves Amended Service Pact with Dennis Wheeler
----------------------------------------------------------------
Coeur d'Alene Mines Corporation's Board of Directors approved
May 2 an amendment to the company's employment agreement with
Dennis E. Wheeler, Chairman of the Board, President and Chief
Executive Officer of the Company, to provide for a term of
employment through May 2010. The employment agreement
previously provided for a term of employment through
Dec. 31, 2008.
Under the second amendment, the employment agreement will be
further amended in Section 2 to read that the term of employment
will be a set term, ending on the date of the company's Annual
Shareholder's meeting in May 2010 as duly set by the Board of
Directors with no automatic extensions or renewals.
All other provisions in the Employment Agreement as amended
remain unchanged and all defined terms are hereby incorporated
by reference.
Coeur d'Alene Mines Corp. (NYSE:CDE) (TSX:CDM) --
http://www.coeur.com/-- is the world's largest primary silver
producer, as well as a significant, low-cost producer of gold.
The company has mining interests in Nevada, Idaho, Alaska,
Argentina, Chile, Bolivia and Australia.
* * *
Coeur d'Alene Mines Corp.'s US$180 Million notes due
Jan. 15, 2024, carry Standard & Poor's B- rating.
CONSTELLATION BRANDS: S&P Keeps BB- Rating Amidst Share Buyback
---------------------------------------------------------------
Standard & Poor's Ratings Services said that there would be no
effect on the ratings or outlook of Constellation Brands Inc.
(BB-/Stable/--) following the announcement that it has entered
into an accelerated share repurchase transaction with Citibank
N.A. to repurchase a minimum of 16.9 million shares of
Constellation Brands Class A common stock for US$421.1 million
on May 8, 2007. The company has already repurchased 3.5 million
shares of its Class A common stock at a cost of US$78.9 million
through open market purchases. These transactions will fully
utilize Constellation Brands' recently authorized US$500 million
share repurchase program.
Standard & Poor's March 1, 2007, downgrade had already factored
into the current ratings the expectation for a near-term buyback
of company shares under its repurchase authorization. While the
company's financial profile will weaken somewhat as a result of
the accelerated repurchase transaction, there still remains some
flexibility under Constellation Brands' current ratings for
additional acquisitions, investments, and joint ventures.
Headquartered in Fairport, New York, Constellation Brands Inc.
(NYSE:STZ, ASX:CBR) -- http://www.cbrands.com/-- produces and
markets beverage alcohol brands with a broad portfolio across
the wine, spirits and imported beer categories. The company
also operates in the United Kingdom, Canada, Australia, Japan,
and New Zealand. One of Constellation Brands wine and grape
processing facilities is located in Casablanca, Chile.
METHANIX CORP: Board Okays 12% Quarterly Dividend Increase
----------------------------------------------------------
Methanex Corporation's Board of Directors has approved a 12
percent increase in its quarterly dividend to shareholders, from
US$0.125 per share to US$0.14 per share. The increased dividend
will apply commencing with the dividend payable on
June 30, 2007, to holders of common shares of record on
June 15, 2007.
Bruce Aitken, President and CEO of Methanex commented, "We have
increased our dividend every year since 2002. Our decision to
increase the dividend again reflects our continued confidence in
the outlook for the methanol industry going forward."
In addition, our Board of Directors has also approved a new
normal course issuer bid that will commence on the expiration of
our existing normal course issuer bid. Under the new bid, the
Company may repurchase up to 8,709,978 common shares of the
Company representing ten percent of the total public float of
the issued and outstanding shares. Under the existing bid,
which expires on May 16, 2007, the Company has purchased
7,039,200 shares as of May 4, 2007, at an average price of
CDN$27.06 (US$23.76). As of May 4, 2007, there were 103,152,092
Methanex common shares issued and outstanding.
Mr. Aitken stated, "Over the last decade we have retired close
to half of our outstanding shares. Our announcement of a new
normal course issuer bid reaffirms our strategy of a balanced
approach to cash utilization, which includes a continued
commitment to returning excess cash to shareholders. With $474
million of cash on hand at the end of the first quarter of 2007,
we have the financial strength and flexibility to meet our
commitments for the Egypt Project and other strategic
initiatives and continue to return excess cash to shareholders."
The normal course issuer bid repurchase program will be carried
out through the facilities of the TSX and is subject to
regulatory approval by the TSX. Purchases under the program
will commence on May 17, 2007, and terminate on the earlier of
May 16, 2008, and the date upon which the Company has acquired
the maximum number of common shares permitted under the purchase
program or otherwise decided not to make further purchases.
Purchases will be made from time to time at the then current
market price of the Company's common shares as traded on the TSX
and the common shares purchased will be cancelled.
Headquartered in Vancouver, British Columbia, Methanex Corp. --
http://www.methanex.com-- is a producer and marketer of
methanol. The company has locations in Belgium, Chile, China,
Japan, Trinidad and the United Kingdom, among others.
* * *
As reported in the Troubled Company Reporter on Nov. 13, 2006,
Moody's Investors Service affirmed its Ba1 Corporate Family
Rating for Methanex Corp.
SHAW GROUP: Will Build 600MW Power Plant for American Electric
--------------------------------------------------------------
The Shaw Group Inc. has been awarded an engineering, procurement
and construction or EPC contract by Southwestern Electric Power
Company, a unit of American Electric Power or AEP, to build a
new 600 MW electric generating plant in Hempstead County,
Arkansas. Southwestern Electric is seeking the necessary
regulatory approvals to build the plant from various Arkansas,
Texas and Louisiana authorities. The John W. Turk, Jr. - Unit 1
facility will use an ultra-supercritical advanced pulverized
clean coal combustion technology. By increasing steam pressure
and temperatures, the facility will require less fuel per
megawatt hour, resulting in increased efficiency and reduced
emissions. The new plant is scheduled to be completed in
mid-2011 at a total cost of approximately US$1.3 billion. Shaw
Group's EPC contract is valued at approximately US$700 million.
J.M. Bernhard, Jr., Chairman, President and Chief Executive
Officer of Shaw Group, said, "We are very pleased to have been
selected by AEP to design, engineer and construct this highly
efficient, environmentally sound facility. We are proud to
combine Shaw's leadership in fossil power with our expertise in
high alloy piping materials, which are designed to withstand the
high steam temperatures and pressures at the new facility. AEP
is a leader in the use of this technology and we look forward to
successfully delivering this generating plant to this valued
client."
Southwestern Electric serves over 464,000 customers in three
states: 112,000 in western Arkansas, 176,000 in Northwest
Louisiana, and 176,000 in East and North Texas.
About American Electric Power
American Electric Power, an electric utility in the United
States, delivers electricity to more than 5 million customers in
11 states. AEP's utility units operate as AEP Ohio, AEP Texas,
Appalachian Power (in Virginia and West Virginia), AEP
Appalachian Power (in Tennessee), Indiana Michigan Power,
Kentucky Power, Public Service Company of Oklahoma, and
Southwestern Electric Power Company (in Arkansas, Louisiana and
east and north Texas). AEP's headquarters are in Columbus,
Ohio.
About The Shaw Group Inc.
Based in Baton Rouge, Louisiana, The Shaw Group Inc. (NYSE: SGR)
-- http://www.shawgrp.com/-- provides services to the
environmental, infrastructure and homeland security markets,
including consulting, engineering, construction, remediation and
facilities management services to governmental and commercial
customers. It is also a vertically integrated provider of
engineering, procurement, pipe fabrication, construction and
maintenance services to the power and process industries. The
company segregates its business activities into four operating
segments: Environmental & Infrastructure; Energy & Chemicals;
Maintenance, and Fabrication, Manufacturing & Distribution. In
January 2005, the company sold substantially all of the assets
of its Shaw Power Technologies, Inc. and Shaw Power Technologies
International, Ltd. units to Siemens Power Transmission and
Distribution Inc., a unit of Siemens AG.
The company has operations in Chile, China, Malaysia, the United
Kingdom and, Venezuela, among others.
* * *
Standard & Poor's Ratings Services affirmed its 'BB' corporate
credit rating on The Shaw Group Inc. and removed it from
CreditWatch, where it was placed with negative implications in
October 2006. S&P said the outlook is stable.
In addition, 'BB' senior secured debt rating was affirmed after
the US$100 million increase to the company's revolving credit
facility.
===============
C O L O M B I A
===============
ARMOR HOLDINGS: Selling Assets to BAE Systems for US$4.1 Billion
----------------------------------------------------------------
Armor Holdings, Inc. entered into a definitive merger agreement
to be acquired by BAE Systems, Inc., a wholly owned subsidiary
of BAE Systems plc, for US$4.1 billion, or a price per common
share of US$88 through a one-step merger.
The transaction is subject to approval of Armor Holdings, Inc.
shareholders and to customary closing conditions, including
compliance with The Hart-Scott-Rodino Antitrust Improvements Act
of 1976 and approval under the Exon-Florio National Security
Test for Foreign Investment. The transaction is expected to
close in the third quarter.
"We are exceptionally pleased to join forces with BAE Systems
plc, a global leader in the defense industry," Warren B.
Kanders, Chairman and Chief Executive Officer of Armor Holdings,
Inc. said. "We would like to thank our shareholders for the
constant support they have shown our company through numerous
transactions and business initiatives that have enabled us to
deliver superior investment returns. Importantly, we would also
like to thank our management team and our Board of Directors for
their dedication and stewardship over the years."
"We are excited to move this business to the next phase of its
development," Robert R. Schiller, President of Armor Holdings,
Inc., commented. "We have no doubt that BAE Systems will place
the needs of our customer and those of the men and women in
uniform who depend on our products at the center of their
ongoing effort. We owe a special thanks and a deep debt of
gratitude to each of our over 8,000 employees around the world.
Their tireless commitment to excellence and innovation has and
will continue to make this organization strong for many years
into the future."
Armor Holdings was advised by Goldman, Sachs & Co., Inc. and
Merrill Lynch & Co., Inc., as financial advisors and Kane
Kessler, P.C., as legal counsel.
Headquartered in Jacksonville, Florida, Armor Holdings, Inc.
(NYSE: AH) -- http://www.armorholdings.com/-- manufactures and
distributes security products and vehicle armor systems for the
law enforcement, military, homeland security, and commercial
markets. The company's mobile security division is located in
Mexico, Venezuela, Colombia and Brazil.
* * *
Moody's Investors Service's confirmed its Ba3 Corporate Family
Rating for Armor Holdings Inc. Additionally, Moody's affirmed
its B1 ratings on the company's 2% Convertible Senior
Subordinated Notes Due 2024 and 8.25% Senior Subordinated Notes
Due 2013. Moody's assigned those debentures an LGD5 rating
suggesting noteholders will experience a 77% loss in the event
of default.
BANCOLOMBIA SA: First Quarter 2007 Net Income Drops 29.8%
---------------------------------------------------------
Bancolombia S.A. reported financial results for the first
quarter of fiscal year 2007, ended March 31, 2007.
Highlights:
-- Net income for the quarter ended March 31, 2007,
totaled COP200 billion, representing a 29.8% decrease
as compared to COP284.9 billion for the fourth quarter
of 2006 and a 6.6% decrease as compared to COP214.1
billion for the first quarter of 2006.
-- As of March 31, 2007, Bancolombia's net loans and
financial leases totaled COP24.870 billion,
representing an increase of 4.4% as compared to
COP23.811 billion for the fourth quarter of 2006 and an
increase of 35.4% on a year-to-year basis from COP18,365
billion as of March 31, 2006.
-- Investments in debt securities for the quarter ended
March 31, 2007, totaled COP4.977 billion, representing
a decrease of 10.0% as compared to the fourth quarter
of 2006 and a decrease of 38.8% as compared to the first
quarter of 2006.
-- Net interest income for the quarter ended March 31, 2007,
totaled COP538.6 billion, representing a 4.1% decrease
as compared to the fourth quarter of 2006 and a 17.5%
increase as compared to the first quarter of 2006.
-- As of March 31, 2007, Bancolombia's ratio of past due
loans to total loans was 2.7%, and the ratio of
allowances to past due loans was 130.4%.
Bancolombia is Colombia's largest full-service financial
institution, formed by a merger of three leading Colombian
financial institutions. Bancolombia's market capitalization is
over US$5.5 billion, with US$13.8 billion asset base and US$1.4
billion in shareholders' equity as of Sept. 30, 2006.
Bancolombia is the only Colombian company with an ADR level III
program in the New York Stock Exchange.
* * *
As reported in the Troubled Company Reporter-Latin America on
May 04, 2007,
Fitch Ratings has downgraded and removed from Rating Watch
Negative Bancolombia's long-term and short-term local currency
Issuer Default Ratings and Individual rating:
-- Individual rating to 'C/D' from 'C';
-- Local currency long-term IDR to 'BB+' from 'BBB-'; and
-- Local currency short-term rating to 'B' from 'F3';
In addition, Fitch affirms these ratings:
-- Foreign currency long-term IDR at 'BB+';
-- Foreign currency short-term rating at 'B'; and
-- Support rating at '3'.
Fitch says the Rating Outlook is Stable.
===================
C O S T A R I C A
===================
ARMSTRONG WORLD: Earns US$26 Million in Quarter Ended March 31
--------------------------------------------------------------
Armstrong World Industries, Inc., reported first quarter 2007
net sales of US$863.4 million, up 5 percent, from US$822.2
million in the same period for 2006. The sales increase
includes a US$15 million benefit from foreign exchange.
Reported operating income from continuing operations grew to
US$65.5 million from US$47.2 million in the first quarter of
2006. Adjusted operating income from continuing operations of
US$61.7 million increased 28 percent compared to US$48.2 million
in the prior year quarter on the same basis.
The Company uses adjusted income from operations in managing the
business, and believes the adjustments provide users of this
financial information with meaningful comparisons of operating
performance between periods. Adjusted income excludes the impact
of fresh-start reporting, restructuring charges and related
costs, and certain other gains and losses to allow meaningful
comparisons of operating performance. These adjustments
amounted to a benefit of US$3.8 million in the first quarter of
2007 compared to charges of US$1.0 million in the first quarter
of 2006.
First quarter 2007 adjusted operating income grew US$14 million
year-over-year despite significant weakness in the U.S.
residential markets. Growth in the company's commercial products
and in its international businesses combined with improved
manufacturing performance more than offset the impact of lower
sales of many residential products.
Segment Highlights
Resilient Flooring net sales were US$290.6 million in the first
quarter of 2007 and US$294.2 million in the same period of 2006.
Excluding the favorable impact of foreign exchange rates, net
sales decreased four percent. The decline was due to decreased
volume for residential vinyl products and lower laminate prices
in North America, partially offset by growth in Europe and Asia.
Reported operating income was US$10.8 million in the quarter
compared to a reported loss in the first quarter of 2006 of
US$3.9 million. Adjusted operating income of US$8.4 million
improved compared to income of US$5.3 million on the same basis
in the prior year period. The improvement was realized as
reduced manufacturing expense and lower SG&A expense offset the
decline in sales.
Wood Flooring net sales of US$199.2 million in the first quarter
declined 3 percent from US$205.2 million in the prior year as
volume declines related to the residential housing market
slowdown more than offset the benefit from previously announced
acquisitions. Reported operating income of US$8.4 million in the
quarter was below income of US$11.5 million reported in the
first quarter of 2006. Adjusted operating income of US$5.0
million declined from income of US$11.5 million on the same
basis in the prior year period. The reduction in operating
income was due to the decline in sales volume, unfavorable
product mix and higher lumber prices.
Building Products net sales of US$313.9 million in the first
quarter of 2007 increased from US$267.9 million in the prior
year. Excluding the effects of favorable foreign exchange rates
of US$8 million, sales increased by 14 percent due to price,
volume growth in Europe and the Pacific Rim and improved product
mix in North America. Reported operating income increased to
US$53.7 million from US$40.0 million in the first quarter of
2006. Adjusted operating income of US$57.5 million grew from
income of US$40.4 million on the same basis in the prior year
period. The growth was driven by improved price realization,
international volume growth, better product mix and improved
manufacturing productivity. These benefits were only partially
offset by inflation in raw materials and by increased investment
in SG&A to support the sales growth.
Cabinets net sales in the first quarter of 2007 of US$59.7
million increased 9 percent from US$54.9 million in 2006 on
increased volume. Reported operating income for the first
quarter of US$0.9 million improved from US$0.2 million in the
prior year, driven by the sales growth, partially offset by
increased investment in SG&A to support the sales growth. There
were no material adjustments to operating income in either
period.
Unallocated corporate expense of US$8.3 million in 2007
increased from US$0.6 million in 2006. Adjusted expense of
US$10.8 million increased from US$9.2 million on the same basis
in the prior year, primarily due to a lower U.S. pension credit
driven by unfavorable demographic changes.
Outlook
Global macroeconomic indicators suggest a diverse outlook for
the company's key markets for 2007. Based on these indicators,
the company expects flat to modest growth across North American
and European commercial markets, and sustained growth in the
Pacific Rim. The outlook for North American residential markets
is uncertain due to the continuing weakness in U.S. housing
starts and mixed indicators for renovation. On a consolidated
basis, improved prices and increased manufacturing productivity
are anticipated to offset cost inflation.
About Armstrong
Based in Lancaster, Pennsylvania, Armstrong World Industries,
Inc. -- http://www.armstrong.com/-- the major operating
subsidiary of Armstrong Holdings, Inc., designs, manufactures
and sells interior floor coverings and ceiling systems, around
the world.
The company has Asia-Pacific locations in Australia, China, Hong
Kong, Indonesia, Japan, Malaysia, Philippines, Singapore, South
Korea, Taiwan, Thailand and Vietnam. It also has locations in
Colombia, Costa Rica, Greece and Iceland, among others.
* * *
The Troubled Company Reporter - Asia Pacific reported that
Standard & Poor's Ratings Services assigned its 'BB' bank loan
rating to the proposed US$1.1 billion senior secured bank
facility of Armstrong World Industries Inc. (D/--/--), based on
preliminary terms and conditions.
As reported in the Troubled Company Reporter on Oct. 9, 2006,
Standard & Poor's Ratings Services raised its corporate credit
rating on Armstrong World Industries Inc. to 'BB' from 'D',
following the Company's emergence from bankruptcy on
Oct. 2, 2006. S&P said the outlook is stable.
===================================
D O M I N I C A N R E P U B L I C
===================================
HANESBRANDS INC: Will Shut Down Three Dominican Operations
----------------------------------------------------------
Undergarments maker Hanesbrands Inc. told Dominican Today that
it will stop production at its three sewing and assembly
operations in Itabo, Dominican Republic, by September 2007.
Fibre2fashion.com relates that the closures are part of its
efforts to boost efficiency.
Hanesbrands explained to Dominican Today that it is
consolidating sewing production into fewer facilities aligned
with textile fabric production and can run more efficiently as
larger operations.
Hanesbrands admitted to Dominican Today that the shutting down
of the Dominican operations will result to layoffs of about
1,400 workers. Dismissed employees will get severance payments.
According to Dominican Today, Hanesbrands expects to pay
restructuring and related charges of US$3 million for the
closing down of the operations, including:
-- severance,
-- lease termination costs, and
-- accelerated depreciation of fixed assets.
Hanesbrands Executive Vice President and Chief Global Supply
Chain Officer Gerald Evans told Dominican Today, "We are fully
engaged in our global supply chain strategy of doing business
around the world in lower-cost countries. We continually review
how to remain most competitive in every country and region
around the world in which we operate, particularly as we begin
to add operations in Asia to balance our supply chain in the
Western Hemisphere. A key opportunity for us is to operate
fewer facilities that are larger in order to most effectively
utilize our assets. We regret the loss of jobs for our
employees in Itabo. This was a difficult decision driven by
competitive business needs and a compelling opportunity to take
advantage of cost reduction."
Dominican Today notes that Hanesbrands has added in the past two
years new, inexpensive textile production in the Dominican
Republic and Central America. It is "aligning its sewing
operations around those fabric production centers."
Hanesbrands also runs the Dos Rios textile manufacturing plant
in Bonao, and six other sewing and intimate apparel assembly
operations in the Dominican Republic, Dominican Today states.
Hanesbrands Inc. -- http://www.hanesbrands.com/-- markets
innerwear, outerwear and hosiery apparel under consumer brands,
including Hanes, Champion, Playtex, Bali, Just My Size, barely
there and Wonderbra. The company designs, manufactures, sources
and sells T-shirts, bras, panties, men's underwear, children's
underwear, socks, hosiery, casual wear and active wear.
Hanesbrands has approximately 50,000 employees in 24 countries,
including India and China.
* * *
As reported in the Troubled Company Reporter-Latin America on
Dec. 8, 2006, Standard & Poor's Ratings Services assigned its
'B-' senior unsecured debt rating to Winston-Salem, North
Carolina-based intimate apparel and activewear maker Hanesbrands
Inc.'s proposed US$500 million senior notes to be issued as a
combination of fixed- and floating-rate notes.
* DOMINICAN REPUBLIC: Using Verizon Payment in 2007 Budget
----------------------------------------------------------
Dominican Republic's Minister of Economy, Planning and
Development, Temistocles Montas, told DR1 Newsletter that the
government has included US$20 million of Verizon Communications'
tax windfall in the 2007 budget.
Dominican Today relates that Verizon Communications paid the
Dominican government on Dec. 1, 2006, about US$170 million,
after an agreement was reached to free the company from paying
over US$500 million in taxes for the sale of its Dominican
assets to America Movil.
According to Dominican Today, the government may use up to US$85
million of the amount paid by Verizon Communications this year.
Minister Montas told Dominican Today that the government had a
joint agreement with the International Monetary Fund to use up
to 50% of the funds in 2007.
Minister Montas told DR1 Newsletter that half of the remaining
funds would be used in fiscal year 2008.
However, the Dominican government will have to submit a bill
before the congress specifying where the money will be used, DR1
Newsletter notes.
Dominican today says that the funds weren't included in the
Internal Taxes Agency's taxes on income. They were deposited in
an official Reservas bank account.
The fund is available for any need, Minister Montas told
Dominican Today.
* * *
As reported in the Troubled Company Reporter-Latin America on
May 4, 2007, Moody's Investors Service upgraded the Dominican
Republic government's foreign- and local-currency bond ratings
to B2 from B3. The Dominican Republic's foreign-currency
country ceiling was upgraded to Ba3 from B1. The country's
ceiling for foreign-currency bank deposits was also upgraded to
B3 from Caa1. Moody's said all ratings have stable outlook.
=============
E C U A D O R
=============
* ECUADOR: Gets Support from IDB on Civil Society Groups
--------------------------------------------------------
The Inter-American Development Bank's Multilateral Investment
Fund has approved a US$715,000 technical cooperation grant for a
program to strengthen civil society organizations in Argentina,
Ecuador and Peru to build their sustainability.
The program will be carried out by the international
organization Nonprofit Enterprise and Self-Sustainability Team.
This organization developed a work methodology, which provides
training and financial contributions to support the development
of social enterprise activities with a high social impact aimed
at increasing the organization's financial sustainability.
"Civil society organizations in the three countries
participating in this program need to work with alternative
sources of funding to offset reductions in traditional
international cooperation sources," said IDB Team Leader Mar¡a
Victoria Saenz. "The NESsT Venture Fund experience in several
Eastern European countries and in Chile over the past nine years
shows its potential to promote innovative solutions."
"The NESsT process consists of three stages: local assessment,
initial stage portfolio and advanced stage portfolio, " added
Saenz. "Before building the portfolio, during the first stage,
the legal framework in the country and sector financing are
studied, and a business consulting network composed of
businessmen, academics, bankers and technical experts is
created."
The program will introduce a methodology in the three countries,
which goes beyond competing for funds to finance the socially-
based sector activities, and will also generate a window of
opportunity for the private sector as well.
Local counterpart funding by NESsT will total US$478,000.
MIF, an autonomous fund administered by the IDB, supports
private sector development in Latin America and the Caribbean,
focusing on microenterprise and small business.
* * *
As reported in the Troubled Company Reporter on Jan. 25, 2007,
Fitch Ratings downgraded the long-term foreign currency Issuer
Default Rating of Ecuador to 'CCC' from 'B-', indicating that
default is a real possibility in the near term.
In addition, these ratings were downgraded:
-- Uncollateralized foreign currency bonds to
'CCC/RR4' from 'B-/RR4';
-- Collateralized foreign currency Par and Discount
Brady bonds to 'CCC+/RR3' from 'B/RR3'; and
-- Short-term foreign currency IDR to 'C' from 'B'.
Fitch also affirmed the Country ceiling rating at 'B-'.
* ECUADOR: Scraps Investment Treaty Extension with U.S.
-------------------------------------------------------
Ecuador President Rafael Correa is not willing to renew a
bilateral investment agreement with the United States, the
Associated Press reports, citing Maria Fernanda Espinosa, the
country's foreign minister.
AP relates that the treaty, signed in 1993, which expires this
week, is defined to encourage and protect investments. The
announcement arrived less than a week before John Negroponte, a
U.S. Deputy Secretary of State, is set to visit the country.
Ms. Espinosa said in an interview that the government is open
for talks about alternative to protect investments from both
nations.
"It has really caused many problems for our country," said Ms.
Espinosa adding that the treaty "does not respect national
interests."
Reuter states that the U.S. lawmakers wanted the program
extended, expecting to pass legislation before July, which
waives import duties on thousands of products from Ecuador,
Colombia, Peru and Bolivia. Their aim is to discourage illicit
drug crops in the region.
Citing Roberto Aspiazu, head of the Ecuadorean Businesses
Committee, Reuters relates that the move could serve as
ammunition for Republicans in Congress to oppose the extension
of the program.
Last year, Washington broke off free-trade deal with Ecuador
following the country's scrapping of contract with Occidental
Petroleum Corp. The company sought in damages over Ecuador
after it took over the oilfields. Ecuador claimed the company
of selling part of an oil block without government
authorization, Reuters notes.
* * *
As reported in the Troubled Company Reporter on Jan. 25, 2007,
Fitch Ratings downgraded the long-term foreign currency Issuer
Default Rating of Ecuador to 'CCC' from 'B-', indicating that
default is a real possibility in the near term.
In addition, these ratings were downgraded:
-- Uncollateralized foreign currency bonds to
'CCC/RR4' from 'B-/RR4';
-- Collateralized foreign currency Par and Discount
Brady bonds to 'CCC+/RR3' from 'B/RR3'; and
-- Short-term foreign currency IDR to 'C' from 'B'.
Fitch also affirmed the Country ceiling rating at 'B-'.
=====================
E L S A L V A D O R
=====================
AES CORP: Court Postpones Hearing on Firm's Property Tax Break
--------------------------------------------------------------
Thomas J. Prohaska at Buffalo News reports that the U.S. State
Supreme Court Justice Richard C. Kloch Sr. has postponed a
hearing on the multiple lawsuits over the AES Corp. property tax
break.
The Niagara county, the Town of Somerset and the Barker Central
School District have filed a lawsuit against AES and the
Industrial Development Agency over the "payment-in-lieu-of-taxes
deal," which will cost the taxing entities US$43.4 million over
12 years, compared with what they would collect from AES if the
firm's Lake Road power plant continued to be taxed at the
current rate, Mr. Prohaska at Buffalo News relates.
If one assumes a 3% yearly tax raise, the lost revenue tops
US$90 million, Mr. Prohaska at Buffalo News says, citing those
who are against the deal.
Buffalo News' Mr. Prohaska says that the hearing was postponed
indefinitely. Attorneys in the case say that the proceedings
may resume in August or later.
Judge Kloch is involved in a jury trial in a civil case that
might take six weeks. The judge and the attorneys have also
scheduled summer vacation, Buffalo News' Mr. Prohaska notes,
citing Niagara County Attorney Claude A. Joerg.
Meanwhile, the town of Somerset attorney Edwin J. Shoemaker
commented to Buffalo News' Mr. Prohaska, "It would certainly not
be before mid-August. Right now it looks like this thing might
not be decided until early next year. [Kloch] won't decide
until he has a hearing, and he won't tell you when the hearing
is."
Buffalo News' Mr. Prohaska relates that the hearing for the AES
case was expected to take at least two weeks, as Judge Kloch
looked for information on whether the Industrial Development
Agency breached its procedural rules in October 2006 when it
granted a 12-year tax break to AES.
AES is Niagara's biggest property taxpayer, according to Buffalo
News' Mr. Prohaska.
Buffalo News' Mr. Prohaska notes that AES will still be paying
US$192.6 million over the life of the deal. But its yearly bill
will decrease to US$17.3 million in 2008 and US$15.8 million by
2011, from US$19.6 million in this year.
AES' legal representatives are trying to get Judge Kloch to
cancel subpoenas the complainants issued for company documents
and this will have to be decided before the hearing, according
to Buffalo News' Mr. Prohaska.
Judge Kloch said in a public statement that he dismissed all
segments of the lawsuits that asserted the Industrial
Development Agency didn't have the authority "to grant a tax
break" to a firm that didn't offer to make new jobs or
investment.
Buffalo News' Mr. Prohaska states that Judge Kloch had
encouraged both parties to reach an out-of-court settlement,
which seemed to fail. AES offered to pay the taxing entities an
extra US$1.5 million, which the complainants rejected.
"We haven't had any response from them, other than they didn't
like our last [offer]," AES Somerset President Kevin R. Pierce
told Buffalo News' Mr. Prohaska.
AES Corp. -- http://www.aes.com/-- is a global power company.
The company operates in South America, Europe, Africa, Asia and
the Caribbean countries. Generating 44,000 megawatts of
electricity through 124 power facilities, the company delivers
electricity through 15 distribution companies.
AES Corp.'s Latin America business group is comprised of
generation plants and electric utilities in Argentina, Brazil,
Chile, Colombia, Dominican Republic, El Salvador, Panama and
Venezuela. Fuels include biomass, diesel, coal, gas and
hydro. The group also pursues business development activities
in the region. AES has been in the region since May 1993, when
it acquired the CTSN power plant in Argentina.
* * *
In Oct. 20, 2006, Moody's Investors Service's downgraded its B1
Corporate Family Rating for AES Corporation in connection with
the implementation of its new Probability-of-Default and Loss-
given-default rating methodology. Additionally, Moody's revised
its probability-of-default ratings and assigned loss-given-
default ratings on the company's loans and bond debt obligations
including the B1 rating on its senior unsecured notes 7.75% due
2014, which was also given an LGD4 loss-given default rating,
suggesting noteholders will experience a 55% loss in the event
of a default.
===========
M E X I C O
===========
CLEAR CHANNEL: Units Ink Asset Purchase Deal with GoodRadio.TV
--------------------------------------------------------------
Clear Channel Communications Inc.'s subsidiaries have entered
into an assets purchase agreement with GoodRadio.TV LLC for the
sale of 187 radio stations, along with the stations' FCC
licenses, real property and station contracts.
The subsidiaries are Clear Channel Broadcasting Inc., Clear
Channel Broadcasting Licenses Inc., CC Licenses LLC, Capstar
Radio Operating Company, Capstar TX Limited Partnership, AMFM
Radio Licenses LLC, Citicasters Co., Citicasters Licenses LP and
Jacor Broadcasting Corporation.
GoodRadio.TV will pay approximately US$452 million in cash and
will assume certain liabilities, including existing business
contracts and licenses with the U.S. Federal Communications
Commission.
Based in San Antonio, Texas, Clear Channel Communications Inc.
(NYSE:CCU) -- http://www.clearchannel.com/-- is a global media
and entertainment company specializing in "gone from home"
entertainment and information services for local communities and
premiere opportunities for advertisers. The company's
businesses include radio, television and outdoor displays.
Outside U.S., the company operates in 11 countries -- Norway,
Denmark, the United Kingdom, Singapore, China, the Czech
Republic, Switzerland, the Netherlands, Australia, Mexico and
New Zealand.
* * *
As reported in the Troubled Company Reporter on April 23, 2007,
Standard & Poor's Ratings Services lowered its corporate credit
and senior unsecured debt ratings on Clear Channel
Communications Inc. to 'B+' from 'BB+'. The ratings remain on
CreditWatch with negative implications, where they were placed
on Oct. 26, 2006, following the company's announcement that it
was exploring strategic alternatives to enhance shareholder
value.
EMPRESAS ICA: Inks MXN116-Million Deal to Build New Stadium
-----------------------------------------------------------
Empresas ICA, S.A. de C.V. has signed a contract for the
foundation work for a new stadium for the Chivas de Guadalajara
professional soccer team. The value of the fixed price contract
is MXN116 million.
The project will be constructed in the area known as "El Baj¡o
del Arenal" within the JVC Center, an integrated cultural,
sports, and business complex outside Guadalajara, Jalisco. The
foundation project will be executed over a term of four months.
In addition, ICA has signed a letter of intent with the client
for undertaking the entire stadium construction project, which
is expected to be formalized within the next 90 days. The terms
of the agreement for the second stage will be announced at the
appropriate time.
Empresas ICA -- http://www.ica.com.mx/-- the largest
engineering, construction, and procurement company in Mexico,
was founded in 1947. ICA has completed construction and
engineering projects in 21 countries. ICA's principal business
units include civil construction and industrial construction.
Through its subsidiaries, ICA also develops housing, manages
airports, and operates tunnels, highways, and municipal services
under government concession contracts and/or partial sale of
long-term contract rights.
* * *
As reported in the Troubled Company Reporter-Latin America on
Aug. 23, 2006, Standard & Poor's Ratings Services revised its
long-term corporate credit rating on Empresas ICA S.A. de C.V.
to 'BB-' from 'B'. The ratings were removed from CreditWatch
Positive, where they were placed on April 7, 2006. S&P said the
outlook is stable.
FORD MOTOR: Plans to Open Banking Unit in Russia, Aksakov Says
--------------------------------------------------------------
A financial department of Ford Motor Company is mulling over
plans to open a subsidiary bank in Russia, said Anatoly Aksakov,
deputy chairman of the State Duma Committee for Credit
Organizations and Financial Markets, RIA Novosti relates.
According to the report, the Russian parliament member said he
learned about the company's plan during a meeting with Ford
representatives within the framework of the U.S.-Russia Business
Council in Washington. Ford Russia President Henrik Nenzen
earlier said the company intends to open seven new plants in
Russia and reach annual production capacity of over one million
cars after 2010.
About Ford Motor Co.
Headquartered in Dearborn, Michigan, Ford Motor Co. (NYSE: F) --
http://www.ford.com/-- manufactures or distributes automobiles
in 200 markets across six continents. With about 260,000
employees and about 100 plants worldwide, the company's core and
affiliated automotive brands include Ford, Jaguar, Land Rover,
Lincoln, Mercury, Volvo, Aston Martin, and Mazda. The company
provides financial services through Ford Motor Credit Company.
* * *
As reported in the Troubled Company Reporter on Dec. 12, 2006,
Standard & Poor's Ratings Services affirmed its 'B' bank loan
and '2' recovery ratings on Ford Motor Co.
As reported in the Troubled Company Reporter on Dec. 7, 2006,
Fitch Ratings downgraded Ford Motor Company's senior unsecured
ratings to 'B-/RR5' from 'B/RR4'.
As reported in the Troubled Company Reporter on Dec. 6, 2006,
Moody's Investors Service assigned a Caa1, LGD4, 62% rating to
Ford Motor Company's US$3-billion of senior convertible notes
due 2036.
FORD MOTOR: U.S. Sales Decreased 13% to 228,623 in April
--------------------------------------------------------
Ford Motor Co. disclosed in a regulatory filing with the
Securities and Exchange Commission that the company's April U.S.
sales totaled 228,623, down 13% compared with a year ago.
"With April behind us, we remain focused on getting the word out
about the strength of our new products, and our marketing
offensive is moving into high gear," said Mark Fields, Ford's
President of The Americas. "Customers are responding very
positively to our new 'Ford Challenge' ads that pit Ford
vehicles against the best of the competition, so we're
accelerating our plans."
Currently, Ford said it began airing two new F-Series truck ads
starring Mike Rowe, creator and star of the Discovery Channel's
hit show "Dirty Jobs." The ads demonstrate the clear advantages
of Ford Tough trucks in safety, strength and capability.
Ford's internal data show that the Ford Challenge campaign has
generated a strong response in product favorability, purchase
consideration and sales. Following the start of the successful
"Fusion Challenge" ads in January, the Ford Fusion posted
double-digit sales increases throughout the first quarter.
Strong Crossover Growth Continues
Although April sales for most products were lower than a year
ago, new crossover utilities helped Ford increase its share of
the industry's fastest growing category. Ford Edge sales were
9,134, and Lincoln MKX sales were 2,901. In addition, Land
Rover introduced its first crossover utility, the LR2, and first
month sales were 1,302. Total Ford Motor Company crossover
sales were 28 percent higher than a year ago during April.
"The success of our newest products - Ford Fusion, Edge, Lincoln
MKX, Ford Super Duty and Ford Expedition - gives us
encouragement that we're creating the products our customers
really want, and we're beginning to stabilize our retail market
share," Fields said.
"Three years ago, 70 percent of new Ford Motor Company vehicles
sold in the U.S. were trucks and traditional SUVs. Today, the
balance is nearly 50 percent cars and crossovers, and 50 percent
trucks and SUVs," Fields explained. "We will continue to
introduce new crossovers and even more small cars in the U.S.,
as they represent the consumer growth segments going forward."
About Ford Motor Co.
Headquartered in Dearborn, Michigan, Ford Motor Co. (NYSE: F) --
http://www.ford.com/-- manufactures or distributes automobiles
in 200 markets across six continents. With about 260,000
employees and about 100 plants worldwide, the company's core
and affiliated automotive brands include Ford, Jaguar, Land
Rover, Lincoln, Mercury, Volvo, Aston Martin, and Mazda. The
company provides financial services through Ford Motor Credit
Company.
* * *
As reported in the Troubled Company Reporter on Dec. 12, 2006,
Standard & Poor's Ratings Services affirmed its 'B' bank loan
and '2' recovery ratings on Ford Motor Co.
As reported in the Troubled Company Reporter on Dec. 7, 2006,
Fitch Ratings downgraded Ford Motor Company's senior unsecured
ratings to 'B-/RR5' from 'B/RR4'.
As reported in the Troubled Company Reporter on Dec. 6, 2006,
Moody's Investors Service assigned a Caa1, LGD4, 62% rating to
Ford Motor Company's US$3 billion of senior convertible notes
due 2036.
GENERAL CABLE: Names Mark Thackeray Sr. VP of North American Ops
----------------------------------------------------------------
General Cable Corp. has appointed Mark A. Thackeray as Senior
Vice President of North American Operations. The company also
named appointed him to the Leadership Team.
Mr. Thackeray, formerly Vice President of Supply Chain, will
replace Larry E. Fast, who plans to retire from General Cable in
June of 2007. Mr. Thackeray will report to Gregory B. Kenny,
President and Chief Executive Officer of General Cable.
"Over the past nine years since joining our Company, Larry Fast
has built a superb Operations organization," Mr. Kenny said. "I
would match our team against the best manufacturers in North
America as evidenced by our strong plant performance and
numerous INDUSTRYWEEK Best Plants awards over the past five
years. Larry's vision for Manufacturing Excellence will
continue to guide our operations team to even higher levels of
performance."
"Mark has proven to be an outstanding leader and has tackled
numerous projects to bring manufacturing and logistics expertise
to our operations all over the world," Mr. Kenny continued.
"I look forward to many years of Mark's counsel and leadership,
and his high expectations and execution of continuous
improvement."
Since joining General Cable in 2001, Mr. Thackeray has served as
Vice President of Advanced Manufacturing Engineering, Vice
President of Manufacturing for our Communications and Assembly
plants, and most recently served as Vice President of Supply
Chain.
Mr. Thackeray holds a bachelor's degree in Industrial &
Systems Engineering from the Georgia Institute of Technology and
has a Master of Business Administration from Xavier University.
He is also a certified Six Sigma Champion. Prior to joining
General Cable in April 2001, he was President of Cincinnati
Industrial Consulting, a consulting firm that specialized in
operations and process improvement technology using Lean and Six
Sigma methodologies.
Mr. Thackeray was Vice President of R.D. Garwood Inc., a leading
supply chain and operations consulting firm, from August 1996
through January 1998.
He has also held numerous manufacturing operations and plant
manager positions during his career, including serving as
Operations Manager for Tomkins Industries.
About General Cable
Headquartered in Highland Heights, KY, General Cable Corp. --
http://www.generalcable.com/-- makes aluminum, copper, and
fiber-optic wire and cable products. Brand names include Carol
and Brand Rex. It also produces power cables, automotive wire,
mining cables, and custom-designed cables for medical equipment
and other products.
The company also operates in France, Turkey, Spain, Portugal,
Norway, China, Australia, New Zealand, Brazil, Angola, Dominican
Republic, Mexico, and Canada.
* * *
As reported on March 13, Moody's Investors Service assigned a
rating of B1 to the proposed US$325 million senior unsecured
notes of General Cable Corporation consisting of $125 million of
floating rate notes and US$200 million fixed rate notes.
Concurrently, Moody's affirmed all other ratings for this
issuer. Moody's said the rating outlook remains stable.
GENERAL MOTORS: Credit Suisse Maintains Neutral Rating on Shares
----------------------------------------------------------------
Credit Suisse analyst C. Ceraso has kept his "neutral" rating on
General Motors Corp.'s shares, Newratings.com reports.
Newratings.com relates that the 12-month target price for
General Motors' shares was decreased to US$29 from us$33.
Mr. Ceraso said in a research note published on May 4 that
General Motors' first quarter 2007 earnings per share were
"significantly short of the estimates and the consensus."
Mr. Ceraso told Newratings.com that the underperformance was due
to its poor North American results that resulted from:
-- increasing raw material costs,
-- a weak US sales environment, and
-- high costs related to the expensive new products.
The earnings per share estimate for 2007 was decreased to
US$3.04 from US$3.82, while estimate for 2008 was reduced to
US$3.51 from US$4.10.
General Motors Corp. (NYSE: GM) -- http://www.gm.com/-- is the
world's largest automaker and has been the global industry sales
leader for 76 years. GM currently employs about 280,000 people
around the world. GM manufactures its cars and trucks in 33
countries. In 2006, nearly 9.1 million GM cars and trucks were
sold globally under these brands: Buick, Cadillac, Chevrolet,
GMC, GM Daewoo, Holden, HUMMER, Opel, Pontiac, Saab, Saturn and
Vauxhall.
* * *
As reported in the Troubled Company Reporter on Dec. 15, 2006,
Standard & Poor's Ratings Services affirmed its 'B' corporate
credit rating and other ratings on General Motors Corp. and
removed them from CreditWatch with negative implications, where
they were placed March 29, 2006. S&P said the outlook is
negative.
As reported in the Troubled Company Reporter on Nov. 14, 2006,
Moody's Investors Service assigned a Ba3, LGD1, 9% rating to the
US$1.5 billion secured term loan of General Motors Corp.
As reported in the Troubled Company Reporter on Nov. 14, 2006,
Moody's Investors Service assigned a Ba3, LGD1, 9% rating to the
US$1.5 billion secured term loan of General Motors Corp.
GLOBAL POWER: Consulting Pacts with Past Execs Get Extension
------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware approved
Global Power Equipment Group Inc. and its debtor-affiliates'
request for extension of their consulting agreements, as
modified, with their former executives -- Larry Edwards and
James P. Wilson -- for an additional 6 months commencing on
April 15, 2007.
Last month, the Court entered a bridge order extending the
Consulting Agreements until May 2, 2007.
The Official Committee of Unsecured Creditors consented to both
extensions.
In their request, the Debtors told the Court that they need
Messrs. Edward's and Wilson's services particularly in relation
to the continuing transition in senior management of the
Debtors.
Although their full-time services are no longer required, the
Debtors explained that the consulting agreements provide the
Debtors with the flexibility to continue to take advantage of
Messrs. Edward's and Wilson's significant experience and
expertise in a manner that will provide significant benefits to
the Debtors' estates while minimizing costs.
Effective Nov. 21, 2006, Mr. Edwards resigned from his officer
position as president and chief executive officer of the
Debtors. He continues to serve as a non-executive member of
Global Power's Board of Directors.
Also effective Nov. 21, 2006, Mr. Wilson resigned from his
officer position as vice president of finance and chief
financial officer of Global Power. Mr. Wilson joined the
company in 1986.
Based in Tulsa, Oklahoma, Global Power Equipment Group Inc. aka
GEEG Inc. -- http://www.globalpower.com/-- provides power
generation equipment and maintenance services for its customers
in the domestic and international energy, power and
infrastructure and service industries. The company designs,
engineers and manufactures a range of heat recovery and
auxiliary equipment primarily used to enhance the efficiency and
facilitate the operation of gas turbine power plants as well as
for other industrial and power-related applications. The
company has facilities in Plymouth, Minnesota; Tulsa, Oklahoma;
Auburn, Massachusetts; Atlanta, Georgia; Monterrey, Mexico;
Shanghai, China; Nanjing, China; and Heerleen, The Netherlands.
The company and 10 of its affiliates filed for chapter 11
protection on Sept. 28, 2006 (Bankr. D. Del. Case No 06-11045).
Attorneys at White & Case LLP and The Bayard Firm, P.A.,
represent the Debtors. Adam G. Landis, Esq., and Kerri K.
Mumford, Esq., at Landis Rath & Cobb LLP represents the Official
Committee of Unsecured Creditors. As of Sept. 30, 2005, the
Debtors reported total assets of US$381,131,000 and total debts
of US$123,221,000.
GLOBAL POWER: Court Moves Exclusive Plan Filing Period to May 17
----------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware entered a
second bridge order extending Global Power Equipment Group Inc.
and its debtor-affiliates' exclusive periods to:
a) file a plan until a hearing set for May 17, 2007; and
b) solicit acceptances of that plan until July 17, 2007.
The Court's first bridge order, issued last month, extended the
Debtors' exclusive period to file a plan until May 2, 2007.
In their motion, the Debtors requested an August 24, 2007
extension of their exclusive period to file a plan.
The Debtors told the Court that they have continued to make
substantial progress in addressing major issues facing their
estates, including:
a) stabilizing each of the Debtors' major business segments
and developing new business opportunities;
b) addressing issues regarding the wind down of Deltak LLC
and Deltak Construction Services Inc.'s heat recovery
steam generation business segment;
c) reaching additional accommodation agreements with key
customers; and
d) developing a five-year business plan, which was recently
presented to the Debtors' Official Committee of Unsecured
Creditors.
Notwithstanding the substantial progress to date, the Debtors
explained that a significant amount of work remains to be done
before they will be able to propose a plan consistent with their
fiduciary duties to maximize value, including, inter alia, the
refinement and testing of their business plan, evaluation and
reconciliation of claims filed against them, and an analysis of
their intercompany assets and liabilities.
Moreover, the Debtors said they continue to meet with the
Committee on a regular basis, and in anticipation of preparing a
chapter 11 plan of reorganization, are now preparing a plan term
sheet, which they intend to share with the Committee in the near
future.
Based in Tulsa, Oklahoma, Global Power Equipment Group Inc. aka
GEEG Inc. -- http://www.globalpower.com/-- provides power
generation equipment and maintenance services for its customers
in the domestic and international energy, power and
infrastructure and service industries. The company designs,
engineers and manufactures a range of heat recovery and
auxiliary equipment primarily used to enhance the efficiency and
facilitate the operation of gas turbine power plants as well as
for other industrial and power-related applications. The
company has facilities in Plymouth, Minnesota; Tulsa, Oklahoma;
Auburn, Massachusetts; Atlanta, Georgia; Monterrey, Mexico;
Shanghai, China; Nanjing, China; and Heerleen, The Netherlands.
The company and 10 of its affiliates filed for chapter 11
protection on Sept. 28, 2006 (Bankr. D. Del. Case No 06-11045).
Attorneys at White & Case LLP and The Bayard Firm, P.A.,
represent the Debtors. Adam G. Landis, Esq., and Kerri K.
Mumford, Esq., at Landis Rath & Cobb LLP represents the Official
Committee of Unsecured Creditors. As of Sept. 30, 2005, the
Debtors reported total assets of US$381,131,000 and total debts
of US$123,221,000.
INNOPHOS HOLDINGS: Earns US$136.7MM in First Quarter 2007 Sales
---------------------------------------------------------------
Innophos Holdings, Inc. reported consolidated financial results
for the first quarter 2007.
First Quarter Results:
* Sales for the quarter ended March 31, 2007 were US$136.7
million, an increase of US$6.4 million, or 4.9%, as
compared to US$130.3 million for the first quarter 2006.
* Operating income for the quarter ended March 31, 2007
was US$10.0 million, a decrease of US$1.1 million,
or 9.9%, as compared to US$11.1 million of operating
income for the comparable period in 2006. Included in
first quarter 2007 operating income results was a charge
of US$1.4 million for a reduction in benefits and
severance for certain personnel that was recorded as part
of the negotiated reorganization of its Mexican
workforce. Included in 2006 results were US$1.5 million
of unusual expenses related to various professional fees,
and an unfavorable US$3.0 million impact of a planned
non-annual sulfuric acid plant maintenance outage at its
Coatzacoalcos facility.
* Depreciation and amortization, excluding deferred
financing amortization expense, for the quarter ended
March 31, 2007 was US$11.6 million, an increase of
US$0.5 million, as compared to US$11.1 million for the
First quarter of 2006. Net interest expense, including
deferred financing amortization expense, for the quarter
ended March 31, 2007 was US$9.9 million, a decrease of
US$3.5 million, compared to US$13.4 million for the same
period in 2006. The favorable improvement in interest
expense was due to the reduction of net debt levels. Tax
expense for the quarter ended March 31, 2007 was US$2.2
million, an increase of US$3.1 million, as compared to
a benefit of US$0.9 million for the comparable period
in 2006. Income from Mexico is fully taxable, so
increases in its Mexican earnings, as we had in the
first quarter 2007, would normally be expected to result
in increased income tax expense.
* Net loss for the quarter ended March 31, 2007 was US$2.1
million, compared to a net loss of US$1.3 million for
the same period in 2006.
* At March 31, 2007, Innophos Holdings had a cash and cash
equivalents balance of US$15.7 million. Net debt
(total debt including accrued interest on floating rate
notes, less cash) at the end of the first quarter 2007
was US$377.2 million, a decrease of US$96.8 million
versus US$474.0 million at March 31, 2006. In the first
quarter of 2007 the company made an optional prepayment
of US$8.0 million on its bank debt. Capital expenditures
for the quarter ended March 31, 2007 were US$4.6 million
versus US$2.7 million in the same quarter of 2006. This
increased spending level is primarily due to the
company's Coatzacoalcos cogeneration project, which
continues to be on budget and schedule.
* Innophos Holdings had 20.74 million shares issued and
outstanding at March 31, 2007.
Subsequent Events
* On April 16, 2007, the company issued US$66.0 million of
9.5% Senior Unsecured notes due 2012, and used the net
proceeds plus approximately US$0.5 million of cash on
hand for full redemption of the remaining US$60.8 million
Floating Rate Senior notes issued by a subsidiary. While
this transaction was subsequent to March 31, 2007, and
had no effect on the company's consolidated financial
position or results of operations as of March 31, 2007,
it will significantly reduce the company's financing
costs in 2007.
Segment Results 1Q 2007 versus 1Q 2006
* U.S. - Sales revenues declined 3.6% for the first
quarter 2007 versus the prior year due to somewhat weaker
pricing and lower volumes. Operating income decreased
by US$8.0 million from US$8.7 million in the first
quarter of 2006 to US$0.7 million in the first quarter
of 2007. This decrease was due to increases in raw
material prices and freight costs in combination with
somewhat unfavorable volume and selling prices.
* Mexico - Sales revenue increased by 18.7% due primarily
to higher volumes. Operating income increased by US$6.3
million year over year, from US$1.6 million in 2006
to US$7.9 million in the first quarter of 2007. This
improvement was due to increased selling prices and
higher sales volume driven by increased demand,
partially offset by the increased cost associated with
the previously mentioned reduction in benefits and
severance of certain personnel. In addition, results
for the first quarter 2006 were unfavorably affected
by US$3.0 million of expense associated with the
planned non-annual sulfuric acid maintenance.
* Canada - Sales revenue increased by 12.2% due primarily
to stronger volumes, which led to a US$0.6 million
increase in operating income, from US$0.8 million in
Q1 2006 to US$1.4 million in Q1 2007.
"This was a solid quarter for Innophos," said Randy Gress, Chief
Executive Officer. "Now that we have completed our IPO and
variable rate note refinancing, we are focused on the
opportunities ahead, with an emphasis on improving business
performance in the balance of 2007."
Innophos Holdings, Inc. is the parent holding company of
Innophos Investments Holdings, Inc., which is also a holding
company that owns 100% of Innophos, Inc. Innophos, Inc.
(including its subsidiaries) is the largest North American
manufacturer of specialty phosphate salts, acids and related
products serving a diverse range of customers across multiple
applications, geographies and channels. Innophos offers a broad
suite of products used in a wide variety of food and beverage,
consumer products, pharmaceutical and industrial applications.
Headquartered in Cranbury, New Jersey, Innophos has plant
operations in the US, Canada and Mexico. Its revenues for the
12 months ended Dec. 31, 2006 were roughly US$542 million.
Innophos publicly listed its shares in November 2006.
* * *
As reported in the Troubled Company Reporter-Latin America on
April 18, 2007, Moody's Investors Service assigned a B1
corporate family rating to Innophos Holdings, Inc., and a B3
rating to the company's new US$66 million senior unsecured notes
due 2012. The new notes are being issued by Innophos Holdings,
Inc. to refinance US$61 million of debt of its subsidiary,
Innophos Investments Holdings, Inc. The corporate family rating
assignment is being made to transfer the corporate family rating
to Innophos Holdings, Inc. from Innophos Investments Holdings,
Inc. An SGL- 2 speculative grade liquidity rating and a stable
rating outlook were also assigned to Innophos.
These summarizes the ratings activity:
Innophos Holdings, Inc.
Ratings assigned:
-- Corporate family rating, B1
-- Probability of default rating, B1
-- Speculative grade liquidity rating, SGL-2
-- US$66 million senior unsecured notes due 2012, B3,
LGD6, 93%
Innophos, Inc.
Ratings affirmed:
-- US$50 million guaranteed senior secured revolver due 2009,
Ba1, LGD2, 18%
-- US$220 million guaranteed senior secured term loan B due
2010, Ba1, LGD2, 18%
-- US$190 million 8.875% guaranteed senior subordinated
notes due 2014, B2, LGD5, 71%
MCDERMOTT INT'L: Completes Acquisition of Marine Mechanical
-----------------------------------------------------------
McDermott International, Inc.'s Government Operations
subsidiary, BWX Technologies, Inc. has completed its previously
announced acquisition of Marine Mechanical Corporation for
approximately US$75 million.
McDermott will operate Marine Mechanical as a unit of BWXT's
Nuclear Operations Division.
In addition, McDermott International shared the results of its
annual meeting of stockholders, held on May 5, 2007 in Houston,
Texas.
The company's nominees for election as Class III directors were
John F. Bookout III, Ronald C. Cambre, Bruce DeMars, and Robert
W. Goldman. Each of these existing board members received a
minimum affirmative vote of approximately 99 percent of the
votes cast by stockholders. All other proposals submitted were
approved, including the ratification of Deloitte & Touche LLP as
independent registered public accounting firm for the year
ending Dec. 31, 2007.
About Marine Mechanical Corporation
Headquartered in Euclid, Ohio, MMC designs, manufactures and
supplies electro-mechanical equipment used by the United States
Navy. Marine Mechanical, employing approximately 250 people,
generated revenues in 2006 of approximately US$50 million and
ended the year with backlog of approximately US$165 million.
About McDermott International, Inc.
McDermott International, Inc. (NYSE:MDR)
-- http://www.mcdermott.com/--is a leading worldwide energy
services company. McDermott's subsidiaries provide engineering,
construction, installation, procurement, research,
manufacturing, environmental systems, project management and
facility management services to a variety of customers in the
energy and power industries, including the U.S. Department of
Energy. The company operates in most major offshore producing
regions throughout the world, including the U.S. Gulf of Mexico,
Mexico, the Middle East, India, the Caspian Sea and Asia
Pacific. Operations in this segment are primarily conducted
through its subsidiary, J. Ray McDermott, S.A.
* * *
As reported in the Troubled Company Reporter on Oct. 6, 2006,
Moody's Investors Service's confirmed its B1 Corporate Family
Rating for McDermott International Inc.
PORTRAIT CORP: Plan Confirmation Hearing Scheduled for May 21
-------------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of New York
in White Plains will convene a hearing on May 21, 2007, at 2:30
p.m., in Courtroom 520, to consider confirmation on Portrait
Corporation of America Inc. at its debtor-affiliates' Amended
Chapter 11 Plan of Reorganization.
Treatment of Claims
The Plan, as published in the Troubled Company Reporter on
Feb. 8, 2007, provides that holders of Allowed Administrative
Expense Claims will be paid in full and in cash.
On the Plan's effective date, the DIP obligations will be deemed
allowed and paid indefeasibly in full in accordance with the
terms of the DIP Agreement and DIP Order. Upon full payment of
all DIP Obligations, all liens and security interests granted to
secure those obligations will be terminated. Provided, however,
that the particular provisions of the DIP Agreement that are
specified to survive will survive. Existing letters of credit
issued pursuant to the DIP Agreement will be cancelled and
replaced with new letters of credit to be issued pursuant to the
Exit Facility.
Holders of Allowed Priority Tax Claim will receive cash on the
later of the plan effective date or the date the claim became
allowed, or equal annual cash payments together with interest to
be determined by the Bankruptcy Court.
Holders of Class A Allowed Priority Non-Tax Claims will also be
paid in full in cash.
At the sole option of the Debtors, holders of Class B Allowed
Other Secured Claims will:
(a) receive payment in full in cash plus post-commencement
date interest;
(b) have a reinstated claim;
(c) receive the collateral securing their claim; or
(d) receive a treatment that renders the claim unimpaired
pursuant to Section 1124 of the Bankruptcy Code.
Holders of Class C Allowed Second Lien Notes Claims will
receive, in full satisfaction of their claim, their pro rata
share of 100% of Reorganized Portrait Corp of America common
stock.
Holders of Class D Allowed Senior Notes and Other Unsecured
Claims will receive their pro rata distribution of new warrants.
Holders of Class E Allowed Convenience Class Claims will receive
1% of their allowed claim as payment.
Holders of Class F Allowed Goldman Note Claims, Class G Allowed
Old Preferred Equity Interests, Class H Allowed Old Common
Equity Interests, and Class I Allowed Old Common Subsidiary
Equity Interests will not receive anything under the plan.
Goldman Note Claims refer to:
-- the 13.75% Senior Subordinated Notes due 2010, issued to
GS Mezzanine Partners II L.P. and GS Mezzanine Partners II
Offshore L.P. These notes were guaranteed by Portrait
Corporation of America Inc., American Studios Inc., PCA
National LLC, PCA National of Texas LP, PCA Photo
Corporation of Canada Inc., Photo Corporation of America
Inc., and PCA Finance Corp; and
-- the 16.5% Senior Subordinated Notes due 2010, issued to
GS Mezzanine Partners II L.P. and GS Mezzanine Partners II
Offshore L.P.
About Portrait Corp.
Portrait Corporation of America Inc. -- http://pcaintl.com/--
provides professional portrait photography products and services
in North America. The Company operates portrait studios within
Wal-Mart stores and Supercenters in the United States, Canada,
Mexico, Germany, and the United Kingdom. The company also
operates a modular traveling business providing portrait
photography services in additional retail locations and to
church congregations and other institutions.
Portrait Corporation and its debtor-affiliates filed for Chapter
11 protection on Aug. 31, 2006 (Bankr S.D. N.Y. Case No.
06-22541). John H. Bae, Esq., at Cadwalader Wickersham & Taft
LLP, represents the Debtors in their restructuring efforts.
Berenson & Company LLC serves as the Debtors' Financial Advisor
and Investment Banker. Kristopher M. Hansen, Esq., at Stroock &
Stroock & Lavan LLP represents the Official Committee of
Unsecured Creditors. Peter J. Solomon Company serves as
financial advisor for the Committee. At June 30, 2006, the
Debtor had total assets of US$153,205,000 and liabilities of
US$372,124,000.
SCHEFENACKER PLC: Bondholder Deal Rids EUR200 Million in Debts
--------------------------------------------------------------
Schefenacker Plc has successfully concluded its refinancing
after bondholders have agreed to the modified refinancing
proposal presented on April 5.
"A resolution was passed which effectively removes EUR200
million of debt from the balance sheet and significantly reduces
the amount of our cash that has to be used to pay interest. This
result is a massive step along the way to restoring the groups'
finances and allows us to refocus on the development of our
business," said Stephen Taylor, CEO of Schefenacker.
As a result of the refinancing, senior creditors now holding 70
percent of the Group's equity have agreed to a substantial
reduction of their cash interest payments and have also
contributed EUR35 million of fresh money to the company.
Bondholders have agreed to exchange their Bond against a
EUR7.5 million cash payment, a five-percent equity stake and
additional warrants that if exercised could increase that stake
to around 15 percent.
Dr. Alfred Schefenacker has contributed EUR20 million of fresh
money and his personal equity stake in Schefenacker-subsidiary
Engelmann. In addition Dr. Schefenacker has cancelled over
EUR100 million of shareholder loans and will retain 25 percent
of the Group's equity. Schefenacker's main customers have
expressed their support to the refinancing and new shareholder
structure.
"I would specifically like to thank our customers and our
employees who have supported the management in the difficult
negotiations over the past months", said acting CEO Stephen
Taylor. "Together we have kept the company on track and set a
restructuring pace that is already showing effect in a solid
first quarter performance."
About Schefenacker
Headquartered in Hampshire, United Kingdom, Schefenacker Plc
(fka Schefenacker AG) -- http://www.schefenacker.com/--
develops, produces and supplies rear vision systems, lighting
systems and sound systems to the world's automotive
manufacturers. The company employs 7,900 people and operates 27
sites in Australia, China, France, Hungary, India, Japan, Korea,
Mexico, Romania, Slovenia, Spain, the United Kingdom, and the
U.S.A.
* * *
As reported on Feb. 15, Moody's Investors Service downgraded the
Corporate Family Rating of Schefenacker AG to Ca from Caa2, the
rating on the company's senior subordinated notes to C from Ca
and the rating for the senior secured facility from Caa1 to
Caa2. Moody's said the outlook has been changed to stable.
In December 2006, Standard & Poor's Ratings Services lowered its
long-term corporate credit rating on German automotive parts
supplier Schefenacker AG to 'SD' (selective default) from 'CCC'.
At the same time, the rating was removed from CreditWatch, where
it had been placed with negative implications on Sept. 12, 2006,
following the company's announcement that it had appointed
financial-restructuring experts.
S&P said the 'C' long-term debt rating on the Schefenacker's
EUR200-million subordinated notes maturing in 2014 remains on
CreditWatch with negative implications.
VALASSIS COMM: Reports US$11.2 Mil. Net Profit in First Quarter
---------------------------------------------------------------
Valassis Communications Inc. recorded quarterly revenues of
US$361.3 million, up 45.9% from the first quarter of 2006,
primarily due to the acquisition of ADVO, Inc. that occurred on
March 2, 2007. First-quarter net earnings were US$11.2 million,
or US$0.23 in earnings per share. Earnings, prior to charges of
US$3.0 million (US$1.9 million, net of tax) related to the
acquisition of ADVO, were US$13.1 million. For the quarter,
operating income was US$26.9 million and adjusted EBITDA was
US$39.6 million. Adjusted free cash flow was US$18.4 million
for the quarter.
"Our emphasis is on improving profitability and free cash flow,
with the goal of reducing our net debt to EBITDA ratio to 3:1,"
said Alan F. Schultz, Valassis Chairman, President and CEO. "We
are pleased with the progress made to deliver the US$18 million
in cost synergies previously identified for 2007, and are
confident in our ability to exceed that goal. The collaboration
and tireless effort from all associates have been exemplary and
are key to achieving our near- and long-term integration
objectives.
"We have developed a comprehensive plan for integrating the two
companies and maximizing profitability. Key components of this
integration plan are as follows:
-- Drive ADVO package and profit optimization by minimizing
unused postage and eliminating unprofitable ADVO
distribution;
-- Execute a ShopWise wrap sales improvement plan;
-- Eliminate the detached address label by printing the
address directly on the reformatted wrap;
-- Pass along related postal rate case cost increases to
clients;
-- Exceed planned cost synergies;
-- Implement Valassis' strategic sourcing, capital
expenditure and Information Technology project policies
and approval processes throughout the combined company;
-- Print the ShopWise wrap in-house at our three
manufacturing facilities;
-- Develop a proactive, comprehensive newspaper alliance
strategy;
-- Rebuild ADVO's internal graphic print capability;
-- Integrate marketing for the combined company and create a
company-wide targeting system;
-- Stabilize and optimize business processes and enterprise
systems; and
-- Align our associates' 'Total Rewards Program' to our goal
of maximizing free cash flow."
Outlook
On Feb. 7, 2007, Valassis provided its outlook for 2007 for the
combined company on a pro forma basis, assuming the closing of
the ADVO acquisition occurred on Jan. 1, 2007. Based on the
actual March 2, 2007 closing date of the transaction, the
following updated outlook is being provided to reflect the
partial year impact of the acquisition:
-- Revenue of US$2.25 billion to US$2.35 billion;
-- Adjusted EBITDA of approximately US$255.0 million
(includes cost synergies, but does not include one-time
expenses associated with cost-to-achieve synergies).
Expected one-time cost-to-achieve synergies of
US$25.0 million to be incurred in 2007, which includes
US$10.5 million of capital expenditures;
-- Expected cost synergies of US$20.0 million for 2007
(increased from the previous forecast of US$18.0 million);
cost synergies expected to increase to US$32.0 million for
2008 and US$40.0 million for 2009;
-- Expected capital expenditures of US$53.6 million for 2007;
2008 and 2009 are expected to be approximately
US$35.0 million each year. Capital expenditures for the
first quarter of 2007 were US$5.6 million;
-- Expected depreciation and amortization for 2007 of
US$63.7 million, including US$8.3 million of amortization
of intangible assets related to the purchase of ADVO.
Depreciation and amortization for the first quarter was
US$7.4 million; and
-- Expected tax rate for 2007 is 37.2%.
Business Segment Discussion
-- Market Delivered Free-Standing Insert (FSI): Co-op FSI
revenues for the first quarter were US$109.6 million, down
4.9% from the first quarter of 2006, due to a reduction in
FSI pricing. Management noted that Valassis pages
produced were up by a percentage in the mid-single digits
year over year, due to unit growth in the co-op FSI
industry of approximately 2.0% and a modest improvement in
market share. FSI cost of goods sold was down for the
quarter on a cost per thousand basis, due to reductions in
media costs.
-- Neighborhood Targeted Products: The Neighborhood Targeted
segment now includes the Run of Press (ROP) business,
previously reported as a separate business segment.
Revenues for the first quarter were US$100.5 million, up
15.3% from the prior year quarter, due to increases in ROP
and preprints primarily in the telecommunications,
financial services and franchise food customer verticals.
As a result, segment profits were up 48.6% to US$11.0
million for the quarter.
-- Household Targeted Products: Household Targeted product
revenues for the first quarter were US$11.2 million, down
38.5% from the first quarter of 2006, due to the continued
phasing-out of the loyalty marketing agency business and
softness in solo direct mail sampling programs. This
segment experienced a US$1.0 million loss for the quarter,
due to revenue declines and increased SG&A in the segment
associated with the company's investment in its online
media planning and placement and the company's new
interactive initiative.
-- International & Services: International & Services
revenues are comprised of NCH Marketing Services, Valassis
Canada, Promotion Watch and in-store. International &
Services reported revenues of US$27.9 million for the
first quarter, up 3.7%. Segment profits were up 28.6% to
US$2.7 million, driven by higher coupon clearing volumes
in the United States and the United Kingdom.
-- ADVO: ADVO revenues from March 2, 2007, the date of the
closing of the ADVO acquisition, through March 31, 2007,
were US$112.1 million and operating income was US$5.3
million. However, these operating results are not
indicative of ADVO's financial performance for the full
three-month period ended March 31, 2007. For the full
quarter ended March 31, 2007, ADVO revenues were US$337.8
million, down 4.8% versus the same quarter a year ago, due
to a significant reduction in spending by two specific
customers and a 3.1% reduction in shared mail packages.
Pieces per package were up 3% for the quarter, with a
slight decline in total shared advertising pieces and
revenue per thousand pieces. ADVO's operating income,
excluding acquisition-related costs and prior billing
and collection adjustments, for the time period in 2007
prior to the close of the transaction was approximately
US$1.0 million.
About Valassis Communications
Headquartered in Livonia, Michigan, Valassis Communications Inc.
(NYSE: VCI) -- http://www.valassis.com/-- provides marketing
services to consumer-packaged goods manufacturers, retailers,
technology companies and other customers with operations in the
United States, Europe, Mexico and Canada. Valassis' products
and services portfolio includes: newspaper-delivered promotions
and advertisements such as inserts, sampling, polybags and
on-page advertisements; direct-to-door advertising and sampling;
direct mail; Internet-delivered marketing; loyalty marketing
software; coupon and promotion clearing; and promotion planning
and analytic services.
* * *
As reported in the Troubled Company Reporter-Latin America on
Feb. 27, 2007, Standard & Poor's Ratings Services assigned its
'B-' rating to Valassis Communications Inc.'s proposed USUS$590
million senior unsecured notes.
As reported in the Troubled Company Reporter-Latin America on
Feb. 19, 2007, Moody's Investors Service assigned a B3 rating to
Valassis Communications, Inc.'s proposed USUS$590 million of
fixed and floating rate senior unsecured notes due 2015.
Moody's Feb. 12, 2007, rating action on Valassis contemplated
the issuance of USUS$590 million of junior debt in conjunction
with the acquisition of ADVO and the company's existing ratings
are not affected by the issuance of the new senior unsecured
notes. Valassis' Corporate Family rating is B1 and the rating
outlook remains stable.
======================================
N E T H E R L A N D S A N T I L L E S
======================================
PETROLEOS DE VENEZUELA: Shuts Down Isla Refinery Units
------------------------------------------------------
Venezuelan state-owned oil firm Petroleos de Venezuela SA has
closed down some units at its Isla plant in Curacao for four
weeks due to maintenance, Bloomberg News reports.
Petroleos de Venezuela said in a statement that a unit called
the catalytic reformer, which increases gasoline quality, will
be shut down for catalyst regeneration. A crude-distillation
unit and a vacuum-distillation unit will undergo maintenance.
Isla will compensate for some of the reduced capacity by using a
thermal cracker, which can distill light-medium crude.
According to Bloomberg News, Petroleos de Venezuela has started
promoting gasoline exports, as the firm picked up operations
after a series of plant outages.
The shutting down of the units at Isla won't affect Petroleos de
Venezuela's international supply contracts, Bloomberg News
states, citing a Petroleos de Venezuela spokesperson.
Petroleos de Venezuela SA -- http://www.pdv.com/-- is
Venezuela's state oil company in charge of the development of
the petroleum, petrochemical and coal industry, as well as
planning, coordinating, supervising and controlling the
operational activities of its divisions, both in Venezuela and
abroad. The company has a commercial office in China.
* * *
Standard & Poor's said on July 17 that it may lower the
company's B+ foreign-currency debt rating in part because of the
absence of timely financial and operating information.
=======
P E R U
=======
IMPSAT FIBER: Extends Tender Offer Expiration Date to May 9
-----------------------------------------------------------
IMPSAT Fiber Networks Inc.'s previously announced cash tender
offer, consent solicitation and waiver for its Series A 6%
Senior Guaranteed Convertible Notes due 2011 and its Series B 6%
Senior Guaranteed Convertible Notes due 2011 has been extended.
The Offer is being made pursuant to an Offer to Purchase and
Consent Solicitation Statement, dated Jan. 29, 2007, and an
accompanying Letter of Transmittal and Consent, as amended by a
supplement dated Feb. 15, 2007, and a second supplement dated
Feb. 26, 2007. The expiration date of the Offer is now 5:00
p.m., New York City time, on May 9, 2007. As of 5:00 p.m., New
York City time, on May 4, 2007, which was the previous
expiration date, Impsat had received valid tenders from holders
of US$66,733,586, or approximately 99% of the outstanding Series
A Notes and US$25,374,000, or approximately 99% of the
outstanding Series B Notes.
The Offer had been previously amended to reflect that if the
Offer is extended beyond March 15, 2007, holders of Notes on
March 15, 2007, will receive the normal interest payment for the
Notes and thereafter the purchase price for each US$1,000
principal amount of Notes will be US$1,010, plus an amount equal
to US$0.17 per US$1,000 of principal amount of Notes for each
day after March 15, 2007, to, but excluding, the date on which
the Notes are purchased. Therefore, as a result of this
extension, a holder of US$1,000 of principal amount of Notes
should expect to receive an additional US$9.35, for a total
consideration of US$1,019.35, unless the Offer is further
extended, in which case holders of Notes will receive an
additional US$0.17 per US$1,000 of principal amount of Notes for
each day the Offer is extended after May 9, 2007 to, but
excluding, the date on which the Notes are purchased. Payment
made in respect of any Notes validly tendered (and not
previously validly withdrawn) is expected to be promptly
following the Expiration Time.
On Oct. 25, 2006, Impsat entered into an Agreement and Plan of
Merger with Global Crossing Limited and GC Crystal Acquisition,
Inc. pursuant to which Impsat would be acquired by Global
Crossing. The Offer is being made in connection with the
proposed merger, and the Offer is conditioned upon the
consummation of the proposed merger upon satisfaction or waiver
of the conditions to closing of the merger. The consent
solicitation with respect to the Series A Notes is conditioned
upon the receipt by Impsat of valid consents from holders of a
majority in principal amount of the Series A Notes outstanding
and unaffiliated with Impsat. The consent solicitation with
respect to the Series B Notes is conditioned upon the receipt by
Impsat of holders of a majority in principal amount of the
Series B Notes outstanding and unaffiliated with Impsat. The
waiver with respect to the Series A Notes is conditioned upon
the receipt by Impsat of valid waivers from holders of two-
thirds in principal amount of the Series A Notes outstanding and
unaffiliated with Impsat. The waiver with respect to the Series
B Notes is conditioned upon the receipt by Impsat of valid
waivers from holders of two- thirds in principal amount of the
Series B Notes outstanding and unaffiliated with Impsat.
The proposed amendments and waivers will not become operative
until the closing of the merger. There is no separate payment
for the consent solicitation and waiver, and satisfaction of the
consent solicitation and waiver is not a condition for the
closing of the tender offer. The Offer may be extended or
terminated by Impsat at its option.
The company has retained Goldman, Sachs & Co. to serve as Dealer
Manager and Solicitation Agent, Georgeson Inc. to serve as
Information Agent and The Bank of New York to serve as
Depositary Agent for the Offer. Requests for documents may be
made directly to Georgeson Inc. by telephone at: (212) 440-9800
(banks and brokers) or (866) 277-5068 (toll free), or in writing
at 17 State St. 10th Floor, New York, NY 10004. Questions
regarding the solicitation of consents may be directed to
Goldman, Sachs & Co. by telephone at: (800) 828-3182 (toll free)
or (212) 357-0775 (collect), or in writing at One New York
Plaza, 48th Floor, New York, New York 10004, Attention: Credit
Liability Management Group.
IMPSAT Fiber Networks Inc. (OTC: IMFN.OB) --
http://www.impsat.com/-- provides private telecommunications
networks and Internet services in Latin America. The company
owns and operates 15 metropolitan area networks in some of the
largest cities in Latin America and has 15 facilities to provide
hosting services, providing services to more than 4,500 national
and multinational client. IMPSAT has operations in Argentina,
Colombia, Brazil, Venezuela, Ecuador, Chile, Peru and the United
States.
Going Concern Doubt
In its audit report on the consolidated financial statements for
year ended Dec. 31, 2006, auditors working for Deloitte & Touche
LLP noted that IMPSAT Fiber Networks, Inc.'s current liquidity
position, high debt obligations, and negative operating results
raise substantial doubt as to its ability to continue as a going
concern.
NUTRO PRODUCTS: Inks Pact Selling Pet Food Operations to Mars
-------------------------------------------------------------
Nutro Products Inc. has signed a definitive agreement with Mars
Incorporated, pursuant to Mars' acquisition of the global pet
food operations.
Bain Capital Partners LLC, a global private investment firm, has
advised the closing of the purchase of Nutro from funds, subject
to normal regulatory approvals and is expected to complete
within a few months. Terms of the deal were not disclosed.
The transaction will bring together two of the most recognized
names in the petcare industry. Nutro will operate as a stand-
alone organization within the Mars family of companies and will
maintain its commitment to the pet specialty channel.
"This acquisition will enhance the company's business by
providing Mars with Nutro's high quality brands," Bob Gamgort,
North American president for Mars, said. "These brands are
known for quality ingredients, unsurpassed nutrition and high
consumer loyalty. Nutro's product portfolio, exceptional sales
force, operational excellence, and strong focus on customer
service will be an outstanding addition to Mars' business," said
Gamgort.
"Together with the current management team, Nutro will continue
to operate the business from its headquarters in City of
Industry, California, Nutro president and CEO David Kravis,
said. "The company is proud of its relationship with Nutro pet
parents, and of the long-standing, mutually supportive
relationships, the company has developed with its specialty pet
store partners. The company looks forward to building on those
strengths and the company's continued commitment to them with
the support of Mars," Kravis said.
Goldman, Sachs & Co. is serving as financial advisor, and
Skadden, Arps, Slate, Meagher & Flom LLP is acting as counsel to
Mars, Incorporated.
JP Morgan Chase is serving as financial advisor, and Ropes &
Gray LLP is acting as counsel to Nutro Products.
About Nutro Products Inc.
Based in City of Industry, California, Nutro Products, Inc. --
http://www.nutroproducts.com/-- formulates and manufactures dry
and canned food, biscuits, and treats for dogs and cats. The
company's brand names include Natural Choice, MAX, and Gourmet
Classics. Its products are available in feed stores and pet
supply shops, such as Petco and PetSmart, across the US and
Canada. Nutro Products' products are also distributed
worldwide, including Indonesia, Peru and Austria, among others.
* * *
As reported in the Troubled Company Reporter-Latin America on
May 7, 2007, Moody's Investors Service changed its review for
possible downgrade of the ratings of Nutro Products, Inc.
following the announcement that Mars, Incorporated will acquire
the global pet food operations of Nutro, subject to regulatory
approvals. Terms of the acquisition by Mars have not been
disclosed. Loss-given-default assessments are also subject to
change.
Ratings under review for possible upgrade:
-- Corporate family rating at B2
-- Probability of default rating at B2
-- Senior secured bank term loan at Ba3
-- Senior secured bank revolving credit agreement at Ba3
-- Senior unsecured notes at B3
-- Senior subordinated notes at Caa1
=====================
P U E R T O R I C O
=====================
R&G FINANCIAL: Fitch Lowers Issuer Default Rating to BB- from BB
----------------------------------------------------------------
Fitch Ratings downgraded the long-term issuer default rating of
R&G Financial Corporation to 'BB-' from 'BB'. This downgrade
reflects a longer-than-expected delay in releasing its audited
financials, regulatory and legal issues, deteriorating operating
results in 2006 and ongoing concerns regarding the mix and level
of capitalization. The Rating Outlook remains Negative.
R&G Financial is lagging its Puerto Rican peers in the
resolution of its accounting issues. In late March 2007, R&G
Financial announced that it will not file its 2004 10-K/A in
1Q07 as previously expected. Reports for subsequent years will
not be filed until after the 2004 10-K/A. R&G Financial reports
that it has made substantial progress on the restatement
process, but continues to not express a view regarding the
completion of this process. In the aftermath of its accounting
and regulatory issues, new management is in place, including a
new CEO and CFO, among others.
In 2006, R&G Financial reported after-tax losses (based on its
regulatory filings) versus profits in the prior year.
Performance was hampered by NIM pressure, lower non-interest
income, and accounting and legal costs. Capital ratios declined
substantially in 2006, following estimated accounting
restatement charges and the unwinding of its mortgage sales.
Capital ratios still exceed regulatory minimums, but high
portions of trust preferred securities and preferred stock are
in the capital structure. Unless R&G is able to issue
additional common equity, its capital position will likely
remain comparatively weak.
Resolution of the Negative Rating Outlook will be driven by
these factors:
-- the establishment of timely audited financial statements,
-- resolution of regulatory issues, as well as greater
clarity regarding the potential negative impact of an
SEC investigation and
-- shareholder class action suit.
Furthermore, a stabilization of operating performance and an
improvement in the level and mix of capitalization would have to
be attained.
Fitch downgrades these ratings with a Negative Outlook:
R&G Financial Corporation
-- Long-term IDR to 'BB-' from 'BB';
-- Preferred stock to 'B-' from 'B'.
R-G Premier Bank
-- Long-term IDR to 'BB-' from 'BB';
-- Long-term deposits to 'BB' from 'BB+';
-- Individual to 'D' from 'C/D'.
R-G Crown Bank
-- Long-term IDR to 'BB-' from 'BB';
-- Long-term deposits to 'BB' from 'BB+';
-- Individual to 'D' from 'C/D'.
R&G Mortgage
-- Long-term IDR to 'BB-' from 'BB'.
Fitch affirms these ratings:
R&G Financial Corporation
-- Individual at 'D';
-- Support at '5'.
R-G Premier Bank
-- Short-term Issuer at 'B';
-- Short-term Deposits at 'B';
-- Support at '5'.
R-G Crown Bank
-- Short-term Issuer at 'B';
-- Short-term Deposits at 'B';
-- Support at '5'.
Headquartered in Hato Rey, Puerto Rico, R&G Financial Corp.
(NYSE: RGF) -- http://www.rgonline.com/-- is a diversified
financial holding company with operations in Puerto Rico and the
United States, providing banking, mortgage banking, investments,
consumer finance and insurance through its wholly owned
subsidiaries, R-G Premier Bank, R-G Crown Bank, R&G Mortgage
Corporation, Puerto Rico's second largest mortgage banker, R-G
Investments Corporation, the Company's Puerto Rico broker-
dealer, and R-G Insurance Corporation, its Puerto Rico insurance
agency. At June 30, 2006, the Company operated 37 bank branches
in Puerto Rico, 35 bank branches in the Orlando, Tampa/St.
Petersburg and Jacksonville, Florida and Augusta, Georgia
markets, and 49 mortgage offices in Puerto Rico, including 37
facilities located within R-G Premier Bank's banking branches.
=============
U R U G U A Y
=============
ROYAL & SUN: Policyholders Have Until May 22 to Cancel Insurance
----------------------------------------------------------------
Sun Alliance Insurance Overseas Limited has transferred all its
rights, obligations and liabilities under insurance policies
written by it to Royal & Sun Alliance Insurance plc. The
transfer, sanctioned by the High Court of Justice in England and
Wales, became effective on March 31.
Policyholders whose insurance policies have been transferred to
Royal & Sun Alliance may cancel their policy, if they want to do
so, on or before May 22. In the event of cancellation, Royal &
Sun Alliance shall refund to such policyholders the proportion
of any prepaid premium, which relates to the unexpired term of
their policy.
The company can be reached at:
Royal & Sun Alliance Insurance plc
St. Mark's Court
Chart Way
Horsham
West Sussex
RH12 1XL
England
About Royal & Sun Alliance
Headquartered in London, England, Royal & Sun Alliance Insurance
Group PLC -- http://www.royalsunalliance.com/-- is a FTSE 100
company, listed on the London Stock Exchange and in New York.
The group consists of three regions -- U.K., Scandinavia, and
International -- with operations in 30 countries, providing
general insurance products to over 20 million customers
worldwide. In Latin America, it operates in Brazil, Chile,
Colombia, Mexico, Uruguay, and Venezuela. In Asia, the company
operates in Hong Kong, Singapore, and Saudi Arabia.
* * *
As of Feb. 22, Royal & Sun Alliance Insurance Group PLC carries
Moody's Ba1 preferred stock rating.
=================
V E N E Z U E L A
=================
INTERNATIONAL PAPER: Earns US$434 Million in 2007 First Quarter
---------------------------------------------------------------
International Paper Co. reported preliminary first-quarter 2007
net earnings of US$434 million compared with fourth-quarter net
earnings of US$1.98 billion and a loss of US$1.2 billion in the
first quarter of 2006. Amounts in all periods include special
items, including the receipt of proceeds from the sale of the
majority of the company's U.S. forestlands in the fourth quarter
of 2006.
Earnings from continuing operations and before special items in
the first quarter of 2007 were US$203 million compared with
US$216 million in the fourth quarter of 2006 and up from
US$58 million in the first quarter a year ago.
Quarterly net sales were US$5.2 billion, compared with US$5.3
billion in the fourth quarter of 2006, and US$5.5 billion in the
first quarter of 2006, primarily reflecting lower forestland
sales.
Industry segment operating profits continued to rise to
US$530 million for the 2007 first quarter versus US$425 million
in the 2006 fourth quarter and US$411 million in the first
quarter of 2006. The increase reflects continued strong average
price realizations and strong manufacturing operations.
"We've hit the ground running in 2007 with our best first
quarter since 2000 and operational margins up nearly 300 basis
points versus the first quarter last year," said Chairman and
Chief Executive Officer John Faraci. "Our pricing momentum
remains strong, with volumes flat overall as we took some
downtime and shifted product among global markets to match our
supply with our customers' demand. Our manufacturing operations
performed well and improvements in cost and mix more than offset
some overall increases in input costs. We've also now bought
more than US$800 million in shares on the open market, which has
brought our outstanding share count down."
Commenting on the second quarter of 2007, Mr. Faraci said, "We
expect somewhat higher earnings from continuing operations in
the second quarter, with seasonally stronger volumes and
improvements in average price realizations. We continue to
improve the performance of our global manufacturing operations,
and we'll realize earnings from our first full quarter of
operations from the Luiz Antonio mill in Brazil. We expect that
input costs will remain high and also expect to have slightly
higher maintenance outage expense in the second quarter."
Segment Information
Operating profits for Printing Papers were US$231 million, up
from fourth quarter 2006 operating profits of US$191 million,
excluding special items. The increase is attributable to
improved results across our global paper businesses, including
record first-quarter performance from European Papers and the
addition of the Luiz Antonio mill in Brazil. Pulp earnings also
grew in the first quarter, resulting from higher shipments,
improved operations at the Riegelwood, North Carolina mill, and
higher prices.
Industrial Packaging operating profits were US$103 million,
compared with US$130 million in the prior quarter. The decrease
was principally due to a change in accounting treatment for
planned mill maintenance outages in the first quarter. Box
volumes were slow early in the quarter, with substantial pick-up
in March. Strong manufacturing performance offset most of the
impact from higher fiber costs through the quarter. The
European container business had record first-quarter earnings
thanks to better volumes, higher prices and strong manufacturing
operations.
Consumer Packaging operating profits were US$61 million in the
first quarter, up from US$27 million in the 2006 fourth quarter,
due to higher earnings in U.S. and European coated paperboard
and foodservice businesses, as well as contributions from the
IP-Sun Paper joint venture in China. The foodservice business
had its best quarter in eight years with strength in volumes,
price and cost control. Higher earnings in the U.S. business
reflect, in part, the change in accounting treatment for planned
mill maintenance outages. Shorewood Packaging is seasonally
slow in the first quarter, but posted better results due to the
absence of a one-time non-cash charge that impacted fourth-
quarter results.
The company's distribution business, xpedx, reported record
first-quarter operating profits of US$29 million compared with
operating profits in the prior quarter of US$31 million. Sales
revenues were slightly down versus the fourth quarter of 2006
because of seasonal slowdowns in volumes.
Forest Products operating profits declined to US$100 million
from fourth-quarter operating profits of US$162 million.
Second-quarter Forest Products operating profits could be
slightly down from first quarter due to timing of some land sale
transactions. The company's objective in managing the sale of
its remaining lands is to earn maximum value for shareowners.
Net corporate expense totaled US$164 million for the quarter,
essentially even with US$166 million in the 2006 fourth quarter
and well below US$180 million for the 2006 first quarter.
Compared with the fourth quarter, the benefit of lower pension
expense was largely offset by higher benefits-related costs and
the effect of a fourth-quarter favorable inventory-related
adjustment. Lower pension expense net of inventory-related
adjustments were the major factors in the decline versus the
2006 first quarter.
Effective Tax Rate
The effective tax rate from continuing operations and before
special items for the first quarter of 2007 was 32 percent,
compared with a tax rate of 28 percent in the fourth quarter of
2006 and 26 percent in the first quarter of 2006. The increase
reflects the higher percentage of total company earnings
generated from U.S. operations.
Discontinued Operations
Discontinued operations for the 2007 first quarter included a
US$21 million pre-tax gain (US$9 million after taxes) relating
to the sale of wood products operations, a pre-tax loss of US$9
million (US$35 million after taxes) for adjustments to the
losses on sales of the beverage packaging and kraft papers
businesses, a pre-tax credit of US$10 million (US$6 million
after taxes) for additional duty refunds received related to our
former Weldwood of Canada Limited business, and the operating
results of the beverage packaging and wood products businesses
during the quarter.
Amounts recorded in the 2006 fourth quarter included pre-tax
charges of US$102 million and US$18 million (US$69 million and
US$11 million after taxes) to adjust the carrying values of the
wood products and beverage packaging businesses, a US$38 million
pre-tax credit (US$23 million after taxes) for Canadian duty
refunds received, a US$3 million pre-tax charge (US$2 million
after taxes) to adjust prior discontinued operations estimates,
and the quarterly operating results of the kraft papers, wood
products and beverage packaging businesses.
Discontinued operations in the 2006 first quarter included a
US$100 million pre-tax charge (US$61 million after taxes) to
reduce the carrying value of the kraft papers business, and the
operating results for the quarter of the kraft papers, Brazilian
coated papers, wood products and beverage packaging businesses.
Effects of Special Items
Special items in the first quarter of 2007 included an
US$18 million pre-tax charge (US$11 million after taxes) for
severance and other charges associated with the company's
Transformation Plan, a pre-tax gain of US$205 million (US$164
million after taxes) relating to the assets exchanged for the
Luiz Antonio mill in Brazil, a pre-tax gain of US$103 million
(US$96 million after taxes) from the sale of the Arizona
Chemical business, and a US$6 million pre- tax credit (US$4
million after taxes) for adjustments relating to the coated
papers business.
Special items in the 2006 fourth quarter included a pre-tax gain
of US$4.4 billion (US$2.7 billion after taxes) from sales of
U.S. forestlands included in the company's transformation plan,
a charge of US$759 million (before and after taxes) for the
impairment of goodwill in the company's coated paperboard and
Shorewood Packaging businesses, a US$128 million pre-tax
impairment charge (US$84 million after taxes) to reduce the
carrying value of the company's Saillat, France, mill, a US$111
million pre-tax charge (US$69 million after taxes) for
restructuring and other corporate charges, a US$6 million pre-
tax credit (US$4 million after taxes) for interest received on
Canadian duty refunds, a US$21 million pre-tax charge (zero
after taxes) relating to smaller asset sales, and a US$5 million
pre-tax credit (US$3 million after taxes) for reductions of
reserves no longer required.
Special items in the 2006 first quarter included a US$1.3
billion pre-tax charge (US$1.2 billion after taxes) to reduce
the carrying value of the company's coated papers business, an
US$18 million pre-tax charge (US$11 million after taxes) for
organizational restructuring charges related to the company's
transformation plan, an US$8 million pre-tax charge (US$5
million after taxes) for losses on early debt extinguishment,
and an US$18 million pre-tax charge (US$11 million after taxes)
for legal reserves.
Based in Stamford, Connecticut, International Paper Co.
(NYSE:IP) -- http://www.internationalpaper.com/-- is in the
forest products industry for more than 100 years. The company
is currently transforming its operations to focus on its global
uncoated papers and packaging businesses, which operate and
serve customers in the US, Europe, South America and Asia. Its
South American operations include, among others, facilities in
Argentina, Brazil, Bolivia, and Venezuela. These businesses are
complemented by an extensive North American merchant
distribution system. International Paper is committed to
environmental, economic and social sustainability, and has a
long-standing policy of using no wood from endangered forests.
* * *
Moody's Investors Service assigned a Ba1 senior subordinate
rating and Ba2 Preferred Stock rating on International Paper Co.
on Dec. 5, 2005.
* VENEZUELA: Bonds Rise As Threat of IMF Withdrawal Lessens
-----------------------------------------------------------
As a result of Venezuelan Hugo Chavez's declaration that his
country is withdrawing from the International Monetary Fund and
the World Bank, the South American nation's bonds and currency
fell as investors fear that the withdrawal would cause a default
on the country's debts.
Lester Pimentel at Bloomberg News reported Monday that
Venezuela's dollar bonds rose for the first time in five days as
investors say the South American country won't pull out of the
International Monetary Fund, avoiding default on its debt.
"We don't think Venezuela is likely to default on its bonds,"
David Bessey, who manages more than US$6 billion of emerging-
market securities for Prudential Financial Inc. in Newark, New
Jersey, told Bloomberg in an interview. "The comments by Chavez
were made before he fully understood the consequences of
withdrawing from the IMF. We think the sell-off is overdone."
The yield on Venezuela's 9-1/4 percent dollar bonds due
September 2027 rose 6 basis points, or 0.06 percentage point, to
7.18 percent at 5:05 p.m. on May 2 in New York, according to
JPMorgan Chase & Co. On Monday, the yield on Venezuela's
benchmark 9-1/4 percent dollar bonds due 2027 fell 2 basis
points, or 0.02 percentage point, to 7.40 percent at 4:15 p.m.
in New York, according to JPMorgan Chase & Co.
* * *
As reported in the Troubled Company Reporter on Nov. 20, 2006,
Fitch Ratings affirmed Venezuela's long-term foreign and local
currency Issuer Default Ratings at 'BB-'. At the same time, the
agency also affirmed the short-term foreign currency IDR at 'B'
and the Country Ceiling at 'BB-'. Fitch said the outlook on the
ratings remains stable. Moody's Investors Service has a B2
rating on Venezuela's long-term debt.
* VENEZUELA: Conoco Hopes to Reach Compensation Pact with Gov't
---------------------------------------------------------------
Jim Mulva, ConocoPhillips chief executive officer, told The
Financial Times in an interview, that his company hopes to agree
with the Venezuelan government on the amount of compensation
that the company will get as a result of the expropriation of
its assets in the country.
ConocoPhillips, the third-largest U.S. oil company and the
biggest investor in Venezuela's oil sector, has not initialed a
memorandum of understanding transferring to state oil firm
Petroleos de Venezuela control over four oil upgrading projects
in heavy crude oil Orinoco belt currently being nationalized, El
Universal says.
The company's chief executive told the FT that the corporation
recognizes the nationalization decree issued by President Hugo
Chavez, but it has yet to agree to the terms surrounding the
transfer. Mr. Mulva has expressed concern that the company
might not get a fair value for the expropriated assets. He
added that if negotiations failed, the company would proceed to
arbitration.
* * *
As reported in the Troubled Company Reporter on Nov. 20, 2006,
Fitch Ratings affirmed Venezuela's long-term foreign and local
currency Issuer Default Ratings at 'BB-'. At the same time, the
agency also affirmed the short-term foreign currency IDR at 'B'
and the Country Ceiling at 'BB-'. Fitch said the outlook on the
ratings remains stable.
* VENEZUELA: Nestor Kirchner Defends Sidor
------------------------------------------
Published reports say that Argentina's President Nestor Kirchner
has called his Venezuelan counterpart Hugo Chavez over the
weekend, asking him not to nationalize steel company Siderurgica
del Orinoco S.A. or Sidor.
As reported in the Troubled Company Reporter-Latin America on
May 8, 2007, President Chavez, after threatening to Sidor, urged
the steel maker to increase local sales of steel to avoid a
government intervention. The Venezuelan leader admitted that he
didn't want to nationalize the firm, but Sidor refused to supply
domestic companies and gives preference to exports. Ternium is
a unit of Argentine-Italian conglomerate Techint. Venezuela's
government currently owns 21% of Sidor's shares, while workers
hold roughly a 20% stake.
Reuters relates that Techint is the biggest industrial group in
Argentina.
Reports say that Techint executives approached the members of
President Kirchner's cabinet, complaining that President Chavez
threatened to use the company's possible involvement in an
alleged public works bribery scandal in Argentina as a reason to
throw Ternium out of Venezuela.
The Financial Times Limited relates that a government gas
regulator presented a full-page advertisement in newspapers
implicating Techint in the bribery scandal. Swedish
construction company Skanska has admitted to paying bribes.
The Argentine judiciary is investigated the matter.
According to the reports, President Kirchner then asked
President Chavez "not to mix the two things together."
The Financial Times Limited relates that President Kirchner and
President Chavez are political allies. The two leaders recently
sealed a joint oil exploration deal in Venezuela.
Techint's owner, Paolo Rocca, will travel to Venezuela to meet
with President Chavez from May 14-16, reports in Argentine
dailies La Nacion and Clarin say.
Meanwhile, President Kirchner tried denying that the Skanska
affair was a case of corruption between private firms and the
government, The Financial Times says. The Argentine leader
denied any involvement. Cabinet chief Alberto Fernandez met
with a senior Techint official twice. There were speculations
that the government tried to persuade Techint to take the blame
publicly.
Political analyst Carlos Germano told The Financial Times, "I
think you have to separate the domestic side of things from the
international. Kirchner's position [on Sidor] is in defense of
national companies. I don't think for an internal conflict he
would change the rules of the game internationally."
Commentators predict that Venezuela's nationalization threat
will stop, as Mr. Rocca will agree to sell steel in Venezuela at
below international prices in exchange for keeping control of
Sidor, The Financial Times states.
* * *
As reported in the Troubled Company Reporter on Nov. 20, 2006,
Fitch Ratings affirmed Venezuela's long-term foreign and local
currency Issuer Default Ratings at 'BB-'. At the same time, the
agency also affirmed the short-term foreign currency IDR at 'B'
and the Country Ceiling at 'BB-'. Fitch said the outlook on the
ratings remains stable.
* Large Companies with Insolvent Balance Sheets
-----------------------------------------------
Total
Shareholders Total
Equity Assets
Company Ticker (US$MM) (US$MM)
------- ------ ------------ -------
Arthur Lange ARLA3 (8.88) 56.71
Kuala ARTE3 (33.57) 11.86
Bombril BOBR3 (781.53) 473.67
Chiarelli SA CCHI3 (58.72) 36.44
Ceper-Inv CEP (7.77) 120.08
Ceper-B CEP/B (7.77) 120.08
CIC CIC (1,883.69) 22,312.12
Telefonica Hldg CITI (1,481.31) 307.89
Telefonica Hldg CITI5 (1,481.31) 307.89
SOC Comercial PL COME (738.69) 456.86
D H B DHBI3 (458.09) 175.07
DTCOM-DIR To CO DTCY3 (6.05) 10.04
Aco Altona EALT3 (64.92) 92.96
Angel Estrada ESTR (68.23) 68.97
Estrela SA ESTR3 (63.08) 112.36
Estrada-A ESTR5 (68.23) 68.97
F Guimaraes FGUI3 (224.56) 24.63
CIMOB Partic SA GAFP3 (44.38) 121.74
Gazola GAZ03 (43.13) 22.28
Hercules HETA3 (233.64) 33.23
DOC Imbituba IMBI3 (19.84) 192.80
IMPSAT Fiber Networks IMPTQ (17.16) 535.01
Kepler Weber KEPL3 (22.20) 478.81
Minupar MNPR3 (83.99) 62.75
Wetzel SA MWET3 (21.35) 116.85
Nova America SA NOVA3 (266.34) 42.47
Telebras-CM RCPT RCTB30 (139.38) 235.03
Schlosser SCL03 (55.17) 51.93
Teka TEKA3 (236.45) 540.81
Telebras SA TELB3 (139.38) 235.03
Telebras-CM RCPT TELE31 (139.38) 235.03
Telebras SA TLBRON (139.38) 235.03
Tectoy TOYB3 (51.84) 18.72
TEC Toy SA-Pref TOYB5 (51.84) 18.72
TEC Toy SA-PF B TOYB6 (51.84) 18.72
Tectoy SA TOYBON (51.84) 18.72
Texteis Renaux TXRX3 (65.19) 75.90
Varig SA VAGV3 (8,194.58) 2,169.10
FER C Atlant VSPT3 (151.49) 1,914.18
WIEST WISA3 (107.73) 92.66
***********
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., Frederick,
Maryland USA. Marjorie C. Sabijon, Sheryl Joy P. Olano, Rizande
delos Santos, Christian Toledo, and Junald Ango, Editors.
Copyright 2007. All rights reserved. ISSN 1529-2746.
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