T R O U B L E D C O M P A N Y R E P O R T E R L A T I N A M E R I C A Tuesday, February 26, 2008, Vol. 9, No. 40 Headlines A R G E N T I N A ALITALIA SPA: AirOne SpA Appeals Lazio Court Ruling ARVINMERITOR: DBRS Confirms 'BB(low)' Ratings on Unsec. Notes DALBER SA: Proofs of Claim Verification is Until April 10 DANA CORPORATION: Inks US$2,080,000,000 Exit Facility Agreements FIAT SPA: Expects to Sell 8,000 High Performance Cars Annually FRYDMAN JUAN: Proofs of Claim Verification Ends on April 15 PETERSEN ENERGIA: Moody's Rates US$1.026-Billion Term Loan at B1 TERRAMED SRL: Trustee Verifies Proofs of Claim Until April 30 TOLENTINO SRL: Court Appoints Alicia Beatriz Morillo as Trustee UPES SA: Proofs of Claim Verification Deadline is March 12 B A R B A D O S CHC HELICOPTER: Inks CN$3.7-Bil. Merger Deal With First Reserve CHC HELICOPTER: Moody's Reviews Ba3 Rating For Likely Downgrade CHC HELICOPTER: S&P Puts 'BB-' Rating on Developing CreditWatch HILTON HOTELS: Inks Franchise Pact to Launch Unit in Italy B E R M U D A SCOTTISH RE: New Strategic Focus Didn't Affect Ratings, S&P Says SCOTTISH RE: Subprime Losses Cue Fitch's Rating Cut & WatchNeg B O L I V I A BANCO MERCANTIL: To Offer Health & Life Microinsurance in 2Q B R A Z I L AMERICAN AXLE: To Pay US$0.15 Per Share Dividend on March 28 BANCO DO BRASIL: Brasilprev Eyes Growth in New Contributions COMPANHIA DE SANEAMENTO: Board Okays Dividend Payment Proposal EMPRESA ENERGETICA: Moody's Rates US$250-Mln Joint Notes at Ba3 ENERGISA SA: Moody's Affirms Corporate Family Rating at Ba3 SOCIEDADE ANONIMA: Moody's Rates US$250-Mln Joint Notes at Ba3 TRW AUTOMOTIVE: Earns US$56MM for 2007 Fourth Qtr. Ended Dec. 31 C A Y M A N I S L A N D S BASSO PRIVATE: To Hold Final Shareholders Meeting on March 6 BROADWAY FINANCE: Sets Final Shareholders Meeting on March 6 BROWARD FINANCE: To Hold Final Shareholders Meeting on March 6 CATHEDRAL LIMITED: Final Shareholders Meeting Set on March 6 CHAMBERS STREET: To Hold Final Shareholders Meeting on March 6 FS CLO: Sets Final Shareholders Meeting on March 6 GLASGOW MACKINTOSH: Sets Final Shareholders Meeting on March 6 MANE (CAYMAN): Proofs of Claim Filing Deadline is March 6 MANE (CAYMAN): Sets Final Shareholders Meeting for March 6 NEWTON RE: AM Best Puts BB Rating on US$150-Mln Class A Notes NEWTON RE: S&P Rates US$150MM Class A Notes Due Jan. 2011 at BB PARMALAT SPA: Banca Monte dei Paschi Settles for EUR79.5 Million SCOTTISH RE: Market Conditions Cues Board to Change Strategy SFCPX FUNDING: Proofs of Claim Filing is Until March 6 TTB FINANCE: Sets Final Shareholders Meeting on March 6 C H I L E EASTMAN KODAK: Dennis Strigl Elected on Board of Directors GMAC LLC: Weak Operating Environment Cues S&P's Rtng. Downgrades NOVA CHEMICALS: Fitch Affirms 'BB-' Issuer Default Rating C O L O M B I A GERDAU SA: Inks Purchase Accord for Cleary Holdings C O S T A R I C A SIRVA INC: Asks Court to Extend Schedules Filing Deadline D O M I N I C A N R E P U B L I C CERVECERIA NACIONAL: Offering DOP4.55 Bln. in Four-Year Bonds PRC LLC: Files Chapter 11 Plan of Reorganization PRC LLC: Wants Court to Fix May 1 as General Claims Bar Date PRC LLC: Wants to File Disclosure Statement by March 13 G U A T E M A L A BRITISH AIRWAYS: Enters Conciliation Process Over Strike Action HUNTSMAN CORP: Incurs US$172.1-Million Net Loss in 2007 G U Y A N A DELTA AIR: Awards Workers with US$158,000,000 for Profit-Sharing DELTA AIR: Earns US$1,600,000 in Full-Year Ended December 31 DELTA AIR: FMR LLC and Lord Abbett Declare Stake Ownership DELTA AIR: To Launch Guyana-US One-Way Flights J A M A I C A AIR JAMAICA: Gives Partial Payment of Workers' Deductions M E X I C O BALLY TOTAL: Latham & Watkins Withdraws as Bankruptcy Counsel BLUE WATER: Creditors Panel Wants to Hire Schafer as Counsel BLUE WATER: Gets Court Permission to Use Cash Collateral BLUE WATER: Wants Deadline to File Schedules Moved to March 28 CKE RESTAURANTS: Moody's Keeps All Ratings; Assigns Neg Outlook EPICOR SOFTWARE: Moody's Withdraws All Ratings GLOBAL POWER: Moody's Assigns Low-B Ratings, Stable Outlook GRUMA SAB: Moody's Withdraws Ba1 Corporate Family Rating MCDERMOTT INT'L: Unit to Deliver Scrubbers to Maryland Plants ODYSSEY RE: Earns US$587.2 Million in Fiscal Year Ended Dec. 31 ODYSSEY RE: To Pay US$0.0625 Per Share Dividend on March 28 TIMKEN CO: Adds Steel Products; Completes Boring Acquisition VALASSIS COMMS: Reports US$20.6 Mil. Earnings in Fourth Quarter P E R U QUEBECOR: Ernst & Young Submits Updates on CCAA Proceedings QUEBECOR WORLD: Loses US$210-Mln Rogers Deal to Transcontinental QUEBECOR WORLD: Suppliers Balk at Reclamation Procedures P U E R T O R I C O FIRST BANCORP: May Acquire R&G Financial, Says Sterne Agee MACY'S INC: Declares 13 Cents Per Share Quarterly Dividend R&G FINANCIAL: Potential Takeover Target, Says Sterne Agee SEARS HOLDINGS: Ex-Dell Head and CEO Joins Board of Directors V E N E Z U E L A CITGO PETROLEUM: Earns US$1.1 Billion in First Half of 2007 CITGO PETROLEUM: Four Workers Hurt by Hot Oil from Crude Unit CITGO PETROLEUM: Faces Lawsuit From Road Ranger PETROLEOS DE VENEZUELA: Eyes Settlement With ConocoPhillips PETROLEOS DE VENEZUELA: Asset Freeze to be Extended PETROLEOS DE VENEZUELA: Reaches Settlement With Total & Statoil X X X X X X * Large Companies with Insolvent Balance Sheet - - - - - ================= A R G E N T I N A ================= ALITALIA SPA: AirOne SpA Appeals Lazio Court Ruling --------------------------------------------------- AirOne S.p.A. has appealed the Feb. 20, 2008 ruling of the Italian Regional Administration Court of Lazio that rejected its petition to declare null and void Italy's Ministry of Economy and Finance's decision to commence exclusive talks to sell the government's 49.9% stake to Air France-KLM SA, Guy Dinmore writes for the Financial Times. According to FT, the Lazio court is also expected to reject AirOne's petition to oblige Alitalia S.p.A. to restart negotiation with each other. As reported in the TCR-Europe on Jan. 17, 2008, Alitalia and Italy have commenced exclusive sale talks with Air France-KLM. The carriers have until mid-March to reach an agreement, which would be approved by the government. Air France said it will seek approval from the new Italian government chosen following the April 13-14, 2008 snap elections, for any agreement to acquire Italy's stake in Alitalia. Air France Managing Director Pierre Henri Gourgeon said that the exclusive talks may go beyond the April elections due to various procedural steps, Radiocor relates. AirOne said it would present a binding offer once it wins its appeal, adding that its offer would be financially backed by Intesa Sanpaolo S.p.A., Goldman Sachs Group Inc., Morgan Stanley and Nomura Holdings Plc. TPG Inc. and Pirelli & S.p.A. chairman Marco Tronchetti Provera may join AirOne in its Alitalia bid. Reuters said MyChef may also participate in the offer. AirOne chairman Carlo Toto is inviting businessmen from the Lombardy region to join the airline's bid. About Alitalia Headquartered in Rome, Italy, Alitalia S.p.A. -- http://www.alitalia.it/-- provides air travel services for passengers and air transport of cargo on national, international and inter-continental routes. The Italian government owns 49.9% of Alitalia. The company has operations in Argentina. Despite a EUR1.4 billion state-backed restructuring in 1997, Alitalia posted net losses of EUR256 million and EUR907 million in 2000 and 2001 respectively. Alitalia posted EUR93 million in net profits in 2002 after a EUR1.4 billion capital injection. The carrier booked annual net losses of EUR520 million in 2003, EUR813 million in 2004, EUR168 million in 2005, and EUR625.6 million in 2006. Italian Transport Minister Alessandro Bianchi has warned that Alitalia may file for bankruptcy if the current attempt to sell the government's 49.9% stake fails. ARVINMERITOR: DBRS Confirms 'BB(low)' Ratings on Unsec. Notes ------------------------------------------------------------- DBRS confirmed the ratings for the Senior Unsecured Notes and Convertible Senior Unsecured Notes of ArvinMeritor Inc. The trends have been changed from Stable to Negative, reflecting ARM's recent losses and extensive working capital usage, with limited prospects for debt reduction in the near term given adverse industry conditions and the Company's ongoing expansion and restructuring activities. However, ARM's earnings should improve over the medium term in line with an expected spike in Class 8 truck demand in 2009 in North America, with the Company also slated to reap eventual rewards from its restructuring efforts. In 2007, ARM completed the divestitures of its light vehicle aftermarket and emissions technology businesses, with proceeds being applied toward debt reduction and pension contributions. While the divestitures effectively remove two lower-margin businesses and have resulted in a reduction in debt levels, in DBRS's opinion this is partly offset by ARM's increased exposure to the highly volatile commercial vehicle industry, with the commercial vehicle systems segment now accounting for approximately two-thirds of total revenues. Accordingly, F2007 earnings deteriorated significantly year- over-year given the sharp drop (30%) in Class 8 truck production following extensive pre-buying activity in 2006 in advance of new emissions regulations. This has been compounded by economic concerns in the United States that have considerably delayed the rebound in demand/production, with this trend expected to continue well into 2008. While ARM's light vehicle systems segment generated modestly higher earnings in F2007, margins will remain pressured in F2008 given ongoing pricing cutbacks demanded by OEMs, combined with more aggressive production declines of the Detroit 3 given their increased flexibility in this regard as a result of their revised agreements with the United Auto Workers. In response to the challenging environment, ARM has persisted with restructuring activities and launched Performance Plus in 2007, which aims to improve the Company's global footprint and cost competitiveness through various measures including the elimination of up to 2,800 positions in North America and Europe. ARM is also expanding its presence in low-cost countries and seeking to benefit from growth prospects in Asia as it presently has numerous investments underway in China and India with the goal of achieving US$1.6 billion in regional sales by F2012, (almost triple the level of F2007 regional sales). Additionally, the Company recently improved its liquidity through the December 2007 renegotiation of its senior secured revolving credit facility. The availability of the former facility was somewhat compromised due to covenants; the new facility (although reduced in size from US$900 million to US$700 million) has an amended covenant package that significantly enhances availability. Over the medium term, as the North American Class 8 truck market rebounds and ARM's cost position improves, firmer margins should result. DBRS expects only modest earnings improvement over the near term, with debt levels remaining constant. However, in the event that working capital requirements or persistent losses result in further deterioration of the financial profile, a ratings downgrade would be considered. Debt Rating Issuer Rated Action Rating ------ ----- ------- ------ ArvinMeritor Inc. Conv. Sr. Trend Change BB (low)Neg Unsec. Notes ArvinMeritor Inc. Sr. Unsec. Trend Change BB (low)Neg Notes Headquartered in Troy, Michigan, ArvinMeritor, Inc. (NYSE: ARM) -- http://www.arvinmeritor.com/-- supplies integrated systems, modules and components to the motor vehicle industry. The company serves light vehicle, commercial truck, trailer and specialty original equipment manufacturers and certain aftermarkets. ArvinMeritor employs about 29,000 people at more than 120 manufacturing facilities in 25 countries. These countries are: China, India, Japan, Singapore, Thailand, Australia, Venezuela, Brazil, Argentina, Belgium, Czech Republic, France, Germany, Hungary, Italy, Netherlands, Spain, Sweden, Switzerland, United Kingdom, among others. DALBER SA: Proofs of Claim Verification is Until April 10 --------------------------------------------------------- Roberto Di Martino, the court-appointed trustee for Dalber S.A.'s bankruptcy proceeding, will be verifying creditors' proofs of claim until April 10, 2008. Mr. Di Martino will present the validated claims in court as individual reports on May 23, 2008. The National Commercial Court of First Instance in Buenos Aires 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 Dalber 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 Dalber's accounting and banking records will be submitted in court on July 8, 2008. Mr. Di Martino is also in charge of administering Dalber's assets under court supervision and will take part in their disposal to the extent established by law. The trustee can be reached at: Roberto Di Martino Avenida Callao 449 Buenos Aires, Argentina DANA CORPORATION: Inks US$2,080,000,000 Exit Facility Agreements ---------------------------------------------------------------- Dana Holding Corporation, successor to Dana Corporation, said in a filing with the U.S. Securities and Exchange Commission that on Jan. 31, 2008, the effective date of the Third Amended Joint and Consolidated Plan of Reorganization of Dana and its debtor- subsidiaries, the company entered into exit facility agreements with Citicorp USA, Inc., Lehman Brothers Inc., and Barclays Capital, for post-bankruptcy financing of up to US$2,080,000,000. The exit facility consists of: Loan Type Loan Amount --------- -------------- Term Loan US$1,430,000,000 Revolving Loan 650,000,000 According to Marc S. Levin, Dana's general counsel and secretary, the company has drawn US$1,350,000,000 from the Term Facility on the Effective Date, and US$80,000,000 on Feb. 1, 2008. Mr. Levin says there were no borrowings under the Revolving Facility but US$200,000,000 was utilized for existing letters of credit. Term Loan Agreement Amounts outstanding under the Term Loan will be payable in equal quarterly amounts on the last day of each fiscal quarter at a rate of 1% per annum of the original principal amount of the Term Facility advances prior to Jan. 31, 2014, with the remaining balance due in equal quarterly installments in the final year of the Term Facility and final maturity on Jan. 31, 2015. Certain term loan prepayments are subject to a prepayment call premium before Jan. 31, 2010. The Term Loan will bear interest at a floating rate based on, at Dana's option, the base rate or LIBOR rate plus a margin of 2.75% in the case of base rate loans or 3.75% in the case of LIBOR rate loans. Under the Term Facility, Dana is required to maintain compliance with financial covenants measured on the last day of each fiscal quarter: (a) commencing as of Dec. 31, 2008, a maximum leverage ratio of not greater than 3.10 to 1.00 at Dec. 31, 2008, decreasing in steps to 2.25 to 1.00 as of June 30, 2013, based on the ratio of consolidated funded debt to the previous 12-month consolidated EBITDA; (b) commencing as of Dec. 31, 2008, minimum interest coverage ratio of not less than 4.50 to 1.00 based on the previous 12-month consolidated EBITDA to consolidated interest expense for that period; and (c) a minimum EBITDA of US$211,000,000 for the six months ending June 30, 2008, and of US$341,000,000 for the nine months ending Sept. 30, 2008. The Term Facility Security Agreement grants a second priority lien on accounts receivable and inventory and a first priority lien on substantially all of Dana and the guarantors' remaining assets, including a pledge of 65% of the stock of each foreign subsidiary owned by the company and each guarantor, as of the Effective Date. Revolving Loan Agreement Amounts outstanding under the Revolving Loan Agreement, on the other hand, may be borrowed, repaid and reborrowed with the final payment due and payable on Jan. 31, 2013. The Revolving Loan will bear interest at a floating rate based on, at Dana's option, the base rate or LIBOR rate, plus a margin based on the undrawn amounts available under the Revolving Facility: Borrowing Base Rate LIBOR Rate Availability Margin Margin ------------ --------- ---------- Greater than US$450,000,000 1.00% 2.00% Greater than US$200,000,000 but less than or equal to US$450,000,000 1.25% 2.25% US$200,000,000 or less 1.50% 2.50% Dana will pay a commitment fee of 0.375% per annum for unused committed amounts under the Revolving Facility. Up to US$400,000,000 of the Revolving Facility may be applied to letters of credit. Issued letters of credit are treated as borrowed funds and reduce availability. Dana will pay a fee for issued and undrawn letters of credit in an amount per annum equal to the applicable LIBOR margin based on availability under the Revolving Facility and a per annum fronting fee of 0.25% payable quarterly. The Revolving Facility requires Dana to comply with a minimum fixed coverage ratio of not less than 1.10 to 1.00, measured quarterly, in the event availability under the Revolving Facility falls below US$75,000,000 for five consecutive business days. The Revolving Facility Security Agreement grants a first priority lien on Dana and the guarantors' accounts receivable and inventory and a second priority lien on substantially all of their remaining assets, including a pledge of 65% of the stock of each foreign subsidiary owned by the company and each guarantor. For the first 24 months after the Effective Date, the LIBOR rates in each of the Revolving Facility and the Term Facility will not be less than 3.00%. Interest is due quarterly in arrears with respect to base rate loans and at the end of each interest period with respect to LIBOR loans. For LIBOR loans with interest periods greater than 90 days, interest is payable every 90 days from the first day of that interest period and on the date that loan is converted or paid in full. Under the Exit Facility, Dana will be required to comply with customary covenants, including: * affirmative covenants as to corporate existence, compliance with laws, after-acquired property or subsidiaries, environmental matters, insurance, payment of taxes, access to books and records, use commercially reasonable efforts to have credit ratings, use of proceeds, maintenance of cash management systems, priority of liens in favor of the lenders, maintenance of assets, interest rate protection and monthly, quarterly, annual and other reporting obligations; and * negative covenants, including limitations on liens, additional indebtedness, guarantees, dividends, transactions with affiliates, investments, asset dispositions, nature of business, capital expenditures, mergers and consolidations, amendments to constituent documents, accounting changes, and limitations on restrictions affecting subsidiaries and sale and lease- backs. The Exit Facility also includes customary events of default, including failure to pay principal, interest or other amounts when due, breach of representations and warranties, and breach of any covenant under the Exit Facility. Upon the occurrence and continuance of an event of default, Dana's Exit Lenders may have the right, among other things, to terminate their commitments under the Exit Facility, accelerate the repayment of all of Dana's obligations under the Exit Facility and foreclose on the collateral granted to them. The Exit Facility is guaranteed by substantially all of Dana's domestic subsidiaries other than Dana Credit Corporation, Dana Companies, LLC, and their respective subsidiaries. The Exit Facility contains mandatory prepayment requirements in certain circumstances on the sale of assets, insurance recoveries, the incurrence of debt, the issuance of equity securities and excess cash flow as defined in the agreement, subject to certain permitted reinvestment rights, in addition to the ability to make optional prepayments. A full-text copy of the Term Facility is available for free at http://ResearchArchives.com/t/s?2853 A full-text copy of the Revolving Facility is available for free at http://ResearchArchives.com/t/s?2854 Intercreditor Agreement In connection with the Exit Facility, as of the Effective Date Dana also entered into an Intercreditor Agreement, which establishes the relationship between the security agreements under the Exit Facility Agreement. Mr. Levin says a portion of the proceeds from the Exit Facility was used to repay Old Dana's Senior Secured Superpriority DIP Credit Agreement, make other payments required upon exit from bankruptcy protection, and provide liquidity to fund working capital and other general corporate purposes before original issue discount. As of Feb. 5, 2008, Mr. Levin said the amount outstanding under the Term Facility was US$1,430,000,000, and the amount utilized under the Revolving Facility was US$200,000,000 attributable to issued but undrawn letters of credit. Cancellation of Debt Securities Pursuant to the Plan, the outstanding debt securities of Old Dana were canceled, and the indentures and other agreements governing those debt securities were terminated: * Indenture for Senior Securities, dated Dec. 15, 1997, between Dana and Citibank, N.A, as supplemented, relating to Dana's: -- US$150,000,000 of 6.5% notes due March 15, 2008; -- US$350,000,000 of 6.5% notes due March 1, 2009; -- US$200,000,000 of 7% notes due March 15, 2028; and -- US$400,000,000 of 7% notes due March 1, 2029; * Note Agreements, dated April 8, 1997, between Old Dana and the purchasers party thereto, relating to Old Dana's 7.18% notes due April 8, 2006; * Note Agreements, dated Aug. 28, 1997, between Old Dana and the purchasers party thereto, relating to Old Dana's 6.88% notes due Aug. 28, 2006; * Note Agreements, dated Dec. 18, 1998, between Old Dana and the purchasers party thereto, relating to Old Dana's 6.59% notes due Dec. 1, 2007; * Note Agreement, dated Aug. 16, 1999, between Old Dana and the purchaser party thereto, relating to Old Dana's 7.91% notes due Aug. 16, 2006; * Indenture, dated as of Aug. 8, 2001, among old Dana, Citibank, N.A. and Citibank, N.A., London Branch, as supplemented, relating to Old Dana's: -- US$575,000,000 of 9% notes due Aug. 15, 2011; and -- EUR200,000,000 of 9% notes due Aug. 15, 2011; * Indenture, dated as of March 11, 2002, between Old Dana and Citibank, N.A., as supplemented, relating to Old Dana's US$250,000,000 of 10.125% notes due March 15, 2010; and * Indenture for Senior Securities, dated as of Dec. 10, 2004, between Old Dana and Citibank, N.A., as supplemented, relating to Old Dana's US$450,000,000 of 5.85% notes due Jan. 15, 2015. Mr. Levin says holders of the notes have received or will receive Dana Holding common stock in satisfaction of their unsecured nonpriority claims against Old Dana. About Dana Based in Toledo, Ohio, Dana Corporation -- 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 in the Asia-Pacific, Argentina in the Latin-American regions and Italy in Europe. The company and its affiliates filed for chapter 11 protection on March 3, 2006 (Bankr. S.D.N.Y. Case No. 06-10354). As of Nov. 30, 2007, the Debtors listed US$7,131,000,000 in total assets and US$7,665,000,000 in total debts resulting in a total shareholders' deficit of US$534,000,000. 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, represented the Debtors. Henry S. Miller at Miller Buckfire & Co., LLC, served as the Debtors' financial advisor and investment banker. Ted Stenger from AlixPartners served as Dana's Chief Restructuring Officer. Thomas Moers Mayer, Esq., at Kramer Levin Naftalis & Frankel LLP, represented the Official Committee of Unsecured Creditors. Fried, Frank, Harris, Shriver & Jacobson, LLP served as counsel to the Official Committee of Equity Security Holders. Stahl Cowen Crowley, LLC served as counsel to the Official Committee of Non-Union Retirees. The Debtors filed their Joint Plan of Reorganization on Aug. 31, 2007. On Oct. 23, 2007, the Court approved the adequacy of the Disclosure Statement explaining their Plan. Judge Burton Lifland of the U.S. Bankruptcy Court for the Southern District of New York entered an order confirming the Third Amended Joint Plan of Reorganization of the Debtors on Dec. 26, 2007. The Debtors' Third Amended Joint Plan of Reorganization was deemed effective as of Jan. 31, 2008. Dana Corp., starting on the Plan Effective Date, operated as Dana Holding Corporation. (Dana Corporation Bankruptcy News, Issue No. 71; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000) * * * As reported in the Troubled Company Reporter-Latin America on Feb. 13, 2008, Standard & Poor's Ratings Services assigned its 'BB-' corporate credit rating to Toledo, Ohio-based Dana Holding Corp. following the company's emergence from Chapter 11 on Feb. 1, 2008. The outlook is negative. At the same time, Standard & Poor's assigned Dana's US$650 million asset-based loan revolving credit facility due 2013 a 'BB+' rating (two notches higher than the corporate credit rating) with a recovery rating of '1', indicating an expectation of very high recovery in the event of a payment default. In addition, S&P assigned a 'BB' bank loan rating to Dana's US$1.43 billion senior secured term loan with a recovery rating of '2', indicating an expectation of average recovery. FIAT SPA: Expects to Sell 8,000 High Performance Cars Annually -------------------------------------------------------------- Luca De Meo, Fiat SpA Chief Marketing Officer, said that the company expects to sell 8,000 high-performance Abarth cars annually, Bloomberg News reports. Since its introduction in October 2007, 1,500 orders have been placed. Abarth was founded in 1949 and acquired by Fiat in 1971. Abarth currently has 35 dealers in Italy and plans to put up 60 showrooms in 12 countries. About Fiat S.p.A. Headquartered in Turin, Italy, Fiat S.p.A. -- http://www.fiatgroup.com/-- is one of the largest industrial groups in Italy and the fourth largest European-based automobile manufacturer, with revenues of EUR33.4 billion in the first nine months of 2005. Fiat's creditors include Banca Intesa, Banca Monte dei Paschi di Siena, Banca Nazionale del Lavoro, Capitalia, Sanpaolo IMI, and UniCredito Italiano. Fiat operates in Argentina, Australia, Austria, Belgium, Brazil, Bulgaria, China, Czech Republic, Denmark, France, Germany, Greece, Hungary, India, Ireland, Italy, Japan, Lituania, Netherlands, Poland, Portugal, Romania, Russia, Singapore, Spain, among others. * * * As reported in the TCR-Europe on Nov. 6, 2007, Moody's Investors Service changed the outlook on Fiat S.p.A. and subsidiaries' Ba3 Corporate Family Rating to positive from stable and affirmed its Ba3 long-term senior unsecured ratings as well as the short-term non-Prime rating. On Oct. 4, 2007, Fitch Ratings affirmed Fiat S.p.A.'s Issuer Default and senior unsecured ratings at BB- and Short-term rating at B. The company carries Standard & Poor's Ratings Services' BB long- term corporate credit rating. The compay also carries B short- term rating. S&P said the outlook is stable. FRYDMAN JUAN: Proofs of Claim Verification Ends on April 15 ----------------------------------------------------------- Benjamin Jorge Alaluf, the court-appointed trustee for the bankruptcy proceeding of Frydman Juan (s/Extension de Quiebra de Frydman Hermanos S.A.), will be verifying creditors' proofs of claim until April 15, 2008. Mr. Alaluf will present the validated claims in court as individual reports on May 28, 2008. The National Commercial Court of First Instance in Cordoba 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 Frydman Juan 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 Frydman Juan's accounting and banking records will be submitted in court on Aug. 6, 2008. Mr. Alaluf is also in charge of administering Frydman Juan's assets under court supervision and will take part in their disposal to the extent established by law. The trustee can be reached at: Benjamin Jorge Alaluf Coronel Olmedo 51, Ciudad de Cordoba Cordoba, Argentina PETERSEN ENERGIA: Moody's Rates US$1.026-Billion Term Loan at B1 ---------------------------------------------------------------- Moody's Investors Service has assigned a B1 rating to the US$1.026 billion senior secured term loan of Petersen Energia S.A. The rating outlook is stable. Proceeds from the term loan, which closed on Feb. 21, 2008, financed a portion of Petersen's US$2.235 billion purchase of a 14.9% stake in YPF S.A. (rated Baa2, GLCR, negative outlook; Ba2 FCR), the Argentine integrated petroleum company, from Repsol YPF, S.A. (rated Baa1, negative outlook). Petersen Energia is a Spanish Corporation indirectly and wholly-owned by the Eskenazi family, which also controls Grupo Petersen, a construction and banking conglomerate. Petersen's sole function is to hold the Eskenazi's 14.9% stake in YPF. The B1 rating reflects the single asset risk and elevated financial leverage attached to Petersen's minority stake in YPF, and its dependence on a dividend stream from YPF as the primary source of debt service on the term loan. With the closing of the loan, Petersen owns 14.9% of YPF as a highly leveraged entity, with debt to capitalization of about 95%, including a subordinated seller note and US$110 million of equity. Petersen also has the option over the next four years to increase its holding in YPF up to a level of 25%. However, as a minority interest holder, Petersen does not control YPF's dividends, and the level of dividends will remain subject to YPF's earnings volatility, underlying production volumes, commodity price risk, and rising capital needs. In addition, the term loan, which matures in May 2012, will be subject to refinancing risk on a potentially sizable unpaid principal balance at maturity, after mandatory debt amortization. The B1 rating also factors in Argentine political risk and instability, with YPF's earnings and dividend stream subject to the risk of continued government interference in the energy sector. Argentine industry regulations have depressed commodity and fuel prices, raised export taxes, restricted export volumes and discouraged sector investment. YPF is also exposed to a high degree of currency convertibility and transfer risk, as indicated by Argentina's B2 long-term foreign currency ceiling and B3 foreign currency bond rating, both with a positive outlook. Factors that mitigate these risks and support the B1 rating include a security interest for senior lenders in the majority of Petersen's shares in YPF; a number of structural features that enhance lender protection; a strong Shareholder Agreement between Petersen and Repsol YPF, S.A.; and YPF's cash flow position and historical dividend payment record. Senior lenders to Petersen are secured by a first lien in approximately 12.4% of YPF's shares outstanding, which provides 1.75 asset coverage at closing based on a US$15 billion implied market value for YPF, as well as security in Petersen's own stock and other assets, including cash collateral accounts and a debt service reserve account. The security and collateral value reduce refinancing risk, as the shares could be sold to cover dividend shortfalls or to pay off unamortized debt at maturity, although the share price is exposed to substantial valuation risk. In addition, liquidity and transparency on the market value of the YPF shares will be enhanced with Repsol YPF's expected IPO of up to 25% of YPF in 2008. Structural features that enhance protection for the term loan include scheduled mandatory semi-annual principal amortization, a cash flow sweep provision, and a debt service reserve funded at closing. The mandatory amortization is supported by US$850 million of special dividends already declared to be paid in 2008 and 2009, as well as by YPF's ordinary dividends. The sweep provision requires specified levels of free cash flow to be used to prepay principal. A debt service reserve account is in place to provide liquidity in the event of time lags between dividends and debt service. The debt service reserve account is sized at approximately US$55 million to cover six months interest and a small portion of principal. All collateral and future dividend payments are held in US dollars in accounts outside of Argentina for the benefit of the lenders. Any draw on the reserve requires prompt replenishment at the head of the payment waterfall. The term loan also contains financial covenants requiring a minimum collateral coverage ratio of 1.75 over the loan life and a minimum debt service coverage ratio that escalates from 1.05 in 2008. In addition to the senior term loan, US$1.015 billion of the share acquisition prices was funded through a subordinated seller note provided by Repsol YPF. Debt service on the note is subordinated to the term loan, with no cash payments or mandatory amortization through year five while the term loan is outstanding. While Repsol YPF retains a first priority interest in the 2.5% of YPF shares pledged to the seller note, dividends on those shares will also be fully available for debt service on the senior term loan until its maturity. The Shareholder Agreement provides a sound governance framework and incentives to maintain YPF's dividends, as well as evidence that the Eskenazi family, through Petersen, is likely to remain a long-term investor in YPF. Under the terms of the Agreement, Petersen appoints four board positions and has super majority rights over a number of key areas, including capital issuance, mergers, re-structuring, and decisions on YPF's debt and capital spending. Petersen appoints YPF's Vice Chairman and Chief Executive Officer, to be filled by Enrique Eskenazi and Sebastian Eskenazi, respectively. Petersen also controls important YPF strategic planning and budgeting functions. A lock-up provision prevents Petersen from selling its shares in YPF for the next five years, except in certain circumstances to cover loan debt service if there is a dividend shortfall. Importantly, the Agreement also commits both shareholders to maintaining YPF's dividend payout at 90% of net income at least through the payoff of the senior loan, and any change in that provision is an event of default under the term loan. In addition, while Grupo Petersen has no legal obligation to support Petersen in the event of dividend shortfalls, it has the financial capacity to do so to protect its investment. Moody's also notes that even though Grupo Petersen does not have prior experience in the petroleum industry, it has longstanding investments in construction and finance and experience operating in Argentina's economic and regulatory environment, which could benefit YPF in its post-IPO evolution. Finally, in assessing YPF dividend risk as the basis for Petersen's debt service, Moody's notes that on a standalone basis YPF is Argentina's largest integrated oil company, albeit ranking smaller among its global peers, with approximately 1.3 billion BOE of proved oil and gas reserves, and controlling approximately half of Argentina's downstream market. The company's Baa2 global local currency rating does not measure certainty of dividends, but from a credit perspective, its sizable cash flows from relatively mature businesses, and modest financial leverage indicate a continuing capacity to generate dividends. The company used internal cash flow to reduce debt in recent years, while paying out dividends at a high rate averaging well above 70% of net income since 2003. YPF to date has never been affected by currency controls in remitting dividends to its parent. YPF's challenge, given its poor reserve replacement record and general investment conditions in Argentina, will be to increase and productively deploy its capital spending in exploration and production while committing to a high dividend payout in future years. Petersen Energia, S.A., a Spanish corporation, is headquartered in Madrid, Spain. YPF, S.A. is located in Buenos Aires, Argentina, and its parent company, Repsol YPF in Madrid, Spain. TERRAMED SRL: Trustee Verifies Proofs of Claim Until April 30 ------------------------------------------------------------- Mirta Addario, the court-appointed trustee for Terramed SRL's reorganization proceeding, will be verifying creditors' proofs of claim until April 30, 2008. Ms. Addario will present the validated claims in court as individual reports. The National Commercial Court of First Instance No. 11 in Buenos Aires, with the assistance of Clerk No. 22, 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 Terramed 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 Terramed's accounting and banking records will be submitted in court. La Nacion didn't state the reports submission deadlines. Creditors will vote to ratify the completed settlement plan during the assembly on Feb. 18, 2009, 2008. The debtor can be reached at: Terramed SRL Terrada 1242 Buenos Aires, Argentina The trustee can be reached at: Mirta Addario Lavalle 1454 Buenos Aires, Argentina TOLENTINO SRL: Court Appoints Alicia Beatriz Morillo as Trustee --------------------------------------------------------------- The National Commercial Court of First Instance in Rosario, Santa Fe, has appointed Alicia Beatriz Morillo as Tolentino S.R.L.'s bankruptcy proceeding. Ms. Morillo will verify creditors' proofs of claim and 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 Tolentino 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 Tolentino's accounting and banking records will be submitted in court. Ms. Morillo will also be in charge of administering Tolentino's assets under court supervision and will take part in their disposal to the extent established by law. The trustee can be reached at: Alicia Beatriz Morillo Cordoba 3969, Rosario Santa Fe, Argentina UPES SA: Proofs of Claim Verification Deadline is March 12 ---------------------------------------------------------- Leonor Haydee Veiga, the court-appointed trustee for Upes S.A.'s bankruptcy proceeding, will be verifying creditors' proofs of claim until March 12, 2008. Ms. Veiga will present the validated claims in court as individual reports on April 29, 2008. The National Commercial Court of First Instance in Buenos Aires 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 Upes 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 Upes' accounting and banking records will be submitted in court on June 11, 2008. Ms. Veiga is also in charge of administering Upes' assets under court supervision and will take part in their disposal to the extent established by law. The trustee can be reached at: Leonor Haydee Veiga Bartolome Mitre 1711 Buenos Aires, Argentina =============== B A R B A D O S =============== CHC HELICOPTER: Inks CN$3.7-Bil. Merger Deal With First Reserve --------------------------------------------------------------- CHC Helicopter Corporation disclosed that First Reserve Corp. has entered into an agreement to acquire CHC. CHC and First Reserve believe that the all-cash transaction, which values the company at an adjusted enterprise value of CN$3.7 billion, is the largest-ever buyout in the oilfield services industry. "I'm glad to see that First Reserve recognized the value that was created in CHC over the years, and was able to translate that value into a fair offer for all shareholders," Mark Dobbin, CHC's chairman of the board, commented. "I'm also very pleased to see that First Reserve will carry on CHC's legacy of entrepreneurship, as it builds upon CHC's position as a world class helicopter company." "This partnership will help us realize our growth potential," Sylvain Allard, president and chief executive officer of CHC, said. "First Reserve is an investment company with deep knowledge of the energy industry and views CHC as a great investment platform." "First Reserve has strong conviction in the merits of the strategy that has led to CHC's success and will work in partnership with us to continue to execute that same plan and achieve our long-term objectives," Mr. Alard continued. "CHC is an extraordinary company," Mark McComiskey, managing director of First Reserve Corporation, added. "The European and global leader in oil and gas and search and rescue helicopter services, with the world's largest independent helicopter support business, CHC has a worldwide footprint, the best safety record in the industry and a dynamic management team executing an exciting growth strategy." Under the terms of the transaction, an affiliate of the First Reserve fund will acquire all outstanding class A subordinate voting shares and all of the outstanding class B multiple voting shares of CHC for CN$32.68 per class A share and class B share for an aggregate consideration of approximately CN$1.5 billion. After completion of the transaction CHC's class A shares and class B shares will be de-listed and no longer traded publicly. CHC's headquarters will remain in Vancouver, Canada. The board of directors of CHC has unanimously approved the entry by CHC into the agreement and recommends that shareholders vote in favor of the transaction. Merrill Lynch Canada Inc. and Scotia Capital are financial advisors to CHC. Ogilvy Renault LLP and DLA Piper USA LLP are legal counsel to CHC. Simpson Thacher & Bartlett LLP, Blake, Cassels & Graydon LLP and Slaughter and May are legal counsel to the First Reserve fund. About CHC Helicopter Corporation Headquartered in Richmond, British Columbia, in Canada, CHC Helicopter Corporation (TSE:FLY.A)V7B - http://www.chc.ca/-- is a commercial helicopter operator. The company, through its subsidiaries, operates in over 30 countries, on all seven continents and in most of the offshore oil and gas producing regions of the world. The company's operating units are based in the United Kingdom, Norway, the Netherlands, South Africa, Australia, Barbados, Brazil and Canada. It provides helicopter transportation services to the oil and gas industry for production and exploration activities through its European and global operations segments. It also provides helicopter transportation services for emergency medical services and search and rescue activities and ancillary services, such as flight training. The company's Heli-One segment is a non- original equipment manufacturer helicopter support company, providing repair and overhaul services, aircraft leasing, integrated logistics support, helicopter parts sales and distribution and other related services. CHC HELICOPTER: Moody's Reviews Ba3 Rating For Likely Downgrade --------------------------------------------------------------- Moody's Investors Service placed under review for possible downgrade the Ba3 corporate family rating and probability of default rating for CHC Helicopter Corporation. The review will also cover the B1 (LGD 5, 72%) rating on CHC's US$400 million senior subordinated notes. These actions follow the announcement that a fund managed by First Reserve Corporation has entered into an agreement to acquire CHC. "Our review of CHC will focus on obtaining more clarity regarding the transaction's financing structure and also on First Reserve's growth strategy and financial policies for CHC following the acquisition," commented Pete Speer, Moody's Vice- President/Senior Analyst. In January 2008, Moody's changed CHC's rating outlook to negative due to the company's substantial increase in leverage to fund its major fleet expansion and its future commitments to purchase 85 more helicopters for delivery through 2012. In addition to the transaction's potential effect on the company's capital structure, Moody's is concerned that CHC's fleet expansion might be further accelerated while continuing to be substantially all debt funded. As part of Moody's review, it will discuss with First Reserve and CHC management their post acquisition plans including their operating philosophy, growth objectives and financial policies. First Reserve has agreed to acquire all of CHC's outstanding equity shares for approximately CN$1.5 billion. The overall transaction will be financed through a combination of equity which has been committed by the First Reserve Fund and debt financing that has been committed by Morgan Stanley International and affiliates, in each case subject to the terms of those commitments. The closing of the transaction will take place after satisfaction or waiver of all conditions, including the approvals and confirmations from aviation regulatory authorities. CHC currently expects the transaction to close in the second calendar quarter of 2008, subject to the terms of the agreement. CHC's 7-3/8% senior subordinated notes due 2014 contain a change of control provision. Within 30 days of the completion of the First Reserve acquisition, CHC will be required to offer to purchase all of the remaining notes outstanding at a price equal to 101% of the principal amount and accrued interest. About CHC Helicopter Corporation Headquartered in Richmond, British Columbia, in Canada, CHC Helicopter Corporation (TSE:FLY.A)V7B - http://www.chc.ca/-- is a commercial helicopter operator. It is one of the world's largest providers of helicopter services to the offshore exploration and production industry, according to Moody's Investors Service. The company, through its subsidiaries, operates in over 30 countries, on all seven continents and in most of the offshore oil and gas producing regions of the world. The company's operating units are based in the United Kingdom, Norway, the Netherlands, South Africa, Australia, Brazil, Barbados and Canada. It provides helicopter transportation services to the oil and gas industry for production and exploration activities through its European and global operations segments. It also provides helicopter transportation services for emergency medical services and search and rescue activities and ancillary services, such as flight training. The company's Heli-One segment is a non-original equipment manufacturer helicopter support company, providing repair and overhaul services, aircraft leasing, integrated logistics support, helicopter parts sales and distribution and other related services. CHC HELICOPTER: S&P Puts 'BB-' Rating on Developing CreditWatch --------------------------------------------------------------- Standard & Poor's Ratings Services placed its 'BB-' long-term corporate credit and 'B' subordinated debt ratings on Vancouver- based CHC Helicopter Corp., on CreditWatch with developing implications, following the announcement that a fund managed by First Reserve Corp. has entered into an agreement to acquire CHC. "The developing CreditWatch placement reflects the uncertainty regarding the ultimate composition of CHC's prospective capital structure, following completion of the acquisition. The buyout will be financed through a combination of equity committed by the First Reserve Fund and debt financing committed by Morgan Stanley International and affiliates," said Standard & Poor's credit analyst Jamie Koutsoukis. "The rated senior subordinated notes will presumably be redeemed, as provisions within the indenture require CHC to offer to purchase the remaining notes issued and outstanding," Ms. Koutsoukis added. S&P does not expect to resolve the CreditWatch placement until the transaction closes and S&P is able to consult with CHC's management and have greater certainty regarding the new capital structure of the company. About CHC Helicopter Corporation Headquartered in Richmond, British Columbia, in Canada, CHC Helicopter Corporation (TSE:FLY.A)V7B - http://www.chc.ca/-- is a commercial helicopter operator. It is one of the world's largest providers of helicopter services to the offshore exploration and production industry, according to Moody's Investors Service. The company, through its subsidiaries, operates in over 30 countries, on all seven continents and in most of the offshore oil and gas producing regions of the world. The company's operating units are based in the United Kingdom, Norway, the Netherlands, South Africa, Australia, Barbados, Brazil and Canada. It provides helicopter transportation services to the oil and gas industry for production and exploration activities through its European and global operations segments. It also provides helicopter transportation services for emergency medical services and search and rescue activities and ancillary services, such as flight training. The company's Heli-One segment is a non-original equipment manufacturer helicopter support company, providing repair and overhaul services, aircraft leasing, integrated logistics support, helicopter parts sales and distribution and other related services. HILTON HOTELS: Inks Franchise Pact to Launch Unit in Italy ---------------------------------------------------------- Hilton Hotels Corporation has signed a franchise agreement with DIMATOUR to open the new Hilton Garden Inn(R) Bologna/San Lazzaro in Italy. The 152-room property which is expected to open in September 2008 is set to increase the mid-price hotel brand's growing presence in Italy, joining the Hilton Garden Inn(R) Florence Novoli, the Hilton Garden Inn(R) Rome Airport and the Hilton Garden Inn(R) Matera. Two additional Hilton Garden Inn properties are scheduled to open in the cities of Bari in Summer 2008 and Lecce in 2009. Welcoming the announcement, Wolfgang Neumann, president of Hilton Hotels - Europe, said, �With 11 existing Hilton Family properties located in key Italian destinations and regional centers as well as agreements in place to open six more, the addition of this new Hilton Garden Inn hotel in Bologna reaffirms our commitment to providing our world-class portfolio of quality hotels across Italy and throughout Europe.� �Travelers looking for a new kind of lodging option has provided Hilton Garden Inn with a wonderful opportunity to introduce our mid-priced brand to new markets like Bologna,� said Adrian Kurre, senior vice president � brand management, Hilton Garden Inn. �Our hotels offer an ideal combination of quality and affordability for both corporate and leisure guests.� Located in northern Italy, Bologna is famed for its Renaissance architecture and perhaps best known as the home of Ducati and Lamborghini. The city is well served by air, rail and road transport links and is host to numerous international and national exhibitions and trade fairs. The newly built Hilton Garden Inn Bologna/San Lazzaro will be situated in the San Lazzaro area, a short drive from the city center and will offer guests a fitness area, as well as a restaurant, bar and spacious meeting facilities. The Hilton Garden Inn Bologna/San Lazzaro announcement reflects the Hilton Garden Inn brand's fast moving expansion across the region, with plans to introduce new properties in four more European countries in the next 24 months, including Rzeszow, Poland; Frankfurt, Germany; Diyarbakir, Turkey; as well as Perm, Russia. Hilton Hotels Corporation currently operates 11 hotels in Italy with locations in Rome, Sicily, Venice, Milan, Florence and Matera. In addition to the Hilton Garden Inn Bologna/San Lazzaro, the company is expecting to open five more Hilton Family hotels by 2009 that includes the opening of Europe's first Doubletree by Hilton property, which is set to open in Milan in Fall 2008. About Hilton Hotels Headquartered in Beverly Hills, California, Hilton Hotels Corp. -- http://www.hilton.com/-- together with its subsidiaries, engages in the ownership, management, and development of hotels, resorts, and timeshare properties, as well as in the franchising of lodging properties in the United States and internationally, including Australia, Austria, Barbados, Costa Rica, Finland, India, Indonesia, Trinidad and Tobago, Philippines and Vietnam. * * * As reported in the Troubled Company Reporter-Latin America on Oct. 29, 2007, Moody's Investors Service downgraded Hilton Corporation's Corporate Family Rating and senior unsecured ratings to B3 and Caa1, respectively. ============= B E R M U D A ============= SCOTTISH RE: New Strategic Focus Didn't Affect Ratings, S&P Says ---------------------------------------------------------------- Standard & Poor's Ratings Services said that its ratings and CreditWatch negative status on Scottish Re Group Ltd. (B/Watch Neg/--) and related entities were not affected by the company's announcement of a new strategic focus recognizing its deteriorated financial strength. On Jan. 31, 2008, S&P lowered its ratings on Scottish Re and placed them on CreditWatch with negative implications because of the company's continuing exposure to increasing investment losses and meaningful risk of losing some reserve credits secured through Ballantyne Re plc. These concerns are not affected by the company's announcement. As previously stated, S&P will resolve the CreditWatch when it completes the process of refining its view of expected losses and assesses the risk of the company incurring loss of reserve credits. If and when the company disposes of certain lines of business, the proceeds would likely provide only a modest offset to the erosion of capital caused by its investments in subprime and Alt-A MBS. In addition, in S&P's recent action, it noted that the "deterioration in the company's financial condition has severely disrupted Scottish Re's ability to generate new [insurance] business�." This observation anticipated the company's prospective focus on leveraging its non-risk-taking competencies to drive shareholder value. Scottish Re Group Ltd. -- http://www.scottishre.com/-- is a holding company organized under the laws of the Cayman Islands with its principal executive office in Bermuda. Scottish Re has operating businesses in 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. SCOTTISH RE: Subprime Losses Cue Fitch's Rating Cut & WatchNeg -------------------------------------------------------------- Fitch Ratings has downgraded Scottish Re Group Limited's Issuer Default Rating to 'B' from 'BB-' and the Insurer Financial Strength ratings of its primary operating subsidiaries to 'BB' from 'BBB-'. All ratings have been placed on Rating Watch Negative with the exception of Scottish Re Limited which has been placed on Rating Watch Evolving. The actions follow the group's announcement of a change in strategic focus. The downgrades reflect Fitch's heightened concern over continued subprime losses in the consolidated investment portfolio, uncertainty over the company's strategic direction and the potential impact to the Reg. XXX securitization structures. In addition, the ratings of the holding company and the United States operating companies have been placed on Rating Watch Negative. The IFS rating of Scottish Re Limited has been placed on Rating Watch Evolving reflecting its plans to pursue a disposition of that business. The resolution of the Rating Watch will depend on the success of that pursuit and the financial strength of a potential buyer. Fitch has downgraded and placed these ratings on Rating Watch Negative: Scottish Re Group Ltd.: -- Issuer Default Rating to 'B' from 'BB-'; -- 7.25% non-cumulative perpetual preferred stock to 'CCC+/RR6' from 'B/RR6'. Scottish Annuity & Life Insurance Company (Cayman) Ltd.: --Insurer Financial Strength rating to 'BB' from 'BBB-'. Scottish Re (U.S.) Inc.: -- Insurer Financial Strength rating to 'BB' from 'BBB-'. Stingray Pass-Through Trust: -- US$325 million 5.902% collateral facility securities due Jan. 12, 2015, to 'BB' from 'BBB-'. Fitch has downgraded and placed this rating on Rating Watch Evolving: Scottish Re Limited: -- Insurer Financial Strength rating to 'BB' from 'BBB-'. Scottish Re Group Ltd. -- http://www.scottishre.com/-- is a holding company organized under the laws of the Cayman Islands with its principal executive office in Bermuda. Scottish Re has operating businesses in 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. ============= B O L I V I A ============= BANCO MERCANTIL: To Offer Health & Life Microinsurance in 2Q ------------------------------------------------------------ Banco Mercantil Santa Cruz's deputy product manager Raul Urquiola told Business News Americas that the bank will launch health and life microinsurance for small and medium-sized enterprises and individuals in the second quarter 2008. According to BNamericas, the health insurance policy would cost US$10 per month. It would be aimed at small and medium-sized enterprises and employees in the informal sector. It would cover: -- 80% of medical outpatient expenses, -- 100% of inpatient medical expenses, and -- US$3,000 benefit in case of accidental death. Mr. Urquiola told BNamericas that the life insurance product would cost US$20 per month. It is for small and medium-sized enterprises and independent professional employees. This policy would cover: -- disability, -- benefit of up to US$30,000 in case of death, and -- the double in case of accidental death. Banco Mercantil Santa Cruz is the resulting entity of the merger between Bolivia's second biggest bank Banco Mercantil and Banco Santa Cruz. * * * On Jan. 23, 2008, Moody's assigned a global local currency deposit rating of Ba3 to Banco Mercantil Santa Cruz S.A. On April 2007, Moody's affirmed Banco Mercantil's Caa1 foreign currency deposit rating. =========== B R A Z I L =========== AMERICAN AXLE: To Pay US$0.15 Per Share Dividend on March 28 ------------------------------------------------------------ American Axle & Manufacturing Holdings, Inc. announced a cash dividend of US$0.15 per share payable on March 28, 2008, to stockholders of record on all of the company's issued and outstanding common stock as of March 7, 2008. Headquartered in Detroit, Michigan, American Axle & Manufacturing Holdings Inc. (NYSE:AXL) -- http://www.aam.com/-- and its wholly owned subsidiary, American Axle & Manufacturing, Inc., manufactures, engineers, designs and validates driveline and drivetrain systems and related components and modules, chassis systems and metal-formed products for light trucks, sport utility vehicles and passenger cars. In addition to locations in the United States (in Michigan, New York and Ohio), the company also has offices or facilities in Brazil, China, Germany, India, Japan, Luxembourg, Mexico, Poland, South Korea and the United Kingdom. * * * As reported in the Troubled Company Reporter on Nov. 27, 2007, Moody's Investors Service affirmed American Axle & Manufacturing Holdings, Inc.'s Corporate Family rating of Ba3 as well as the senior unsecured rating of Ba3 to American Axle & Manufacturing Inc.'s notes and term loan. At the same time, the rating agency revised the rating outlook to stable from negative and renewed the Speculative Grade Liquidity rating of SGL-1. BANCO DO BRASIL: Brasilprev Eyes Growth in New Contributions ------------------------------------------------------------ The chief executive officer of Banco do Brasil private pension provider, Brasilprev, told Business News Americas that the unit expects new contributions to maintain double-digit growth for the next 10 years. New contributions would increase 20% in 2008. Pension assets under management would total BRL22 billion by the end of this year, BNamericas says, citing Mr. Godoy. According to BNamericas, Brasilprev reported that new contributions rose 24.1% to BRL3.25 billion. Its Vida Gerador de Beneficios Livres plans -- combination of life insurance and survivors' benefit contracts -- increased 43.0% to BRL1.63 billion, while its Plano Gerador de Beneficios Livres) -� similar to a 401,000 plan in the US -- grew 21.9% to BRL995 million. Pension assets under management increased 29.6% to BRL16.2 billion in 2007, compared to 2006, BNamericas states. Banco do Brasil is Brazil's federal bank and is the largest in Latin America with some 20 million clients and more than 7,000 points of sale (3,200 branches) in Brazil, and 34 offices and partnerships in 26 other countries. In addition to its traditional retail banking services, Banco do Brasil underwrites and sells bonds, conducts asset trading, offers investors portfolio management services, conducts financial securities advising, and provides market analysis and research. * * * On Nov. 6, 2007, Moody's assigned a Ba2 foreign currency deposit rating to Banco do Brasil. On Aug. 23, 2007, Moody's assigned a Ba2 long-term bank deposit rating on the bank with a stable outlook. In May 2007, Standard & Poor's Ratings Services raised its long- term foreign currency counterparty credit rating on Brazilian government-related entity Banco do Brasil to 'BB+' from 'BB', after Brazil's foreign currency sovereign credit rating was upgraded to BB+. COMPANHIA DE SANEAMENTO: Board Okays Dividend Payment Proposal -------------------------------------------------------------- Companhia de Saneamento Basico do Estado de Sao Paulo Board of Directors approved the Full Executive Board proposal, after hearing the Fiscal Council, pursuant to Article 37, paragraph 2 of its Bylaws, thedeclaration of payment of dividends in the form of interest on own capital, referring to the period from October to December 2007 to shareholders of record on Feb. 27, 2008. The dividends as interest on own capital, totaling BRL31,897,127.22 corresponding to BRL0.14 per common share, will be paid no later than 60 days after the 2008 Annual Shareholders' Meeting. Income tax shall be withheld from payment of dividends as interest on own capital, pursuant to the laws in vigor, except for the immune or exempt shareholders proving such condition until March 31, 2008, and providing the corresponding documents, which shall be sent to the company's headquarters. Referring to the entities of Supplementary Private Pension, Insurance Companies and Fapi, such proof shall occur by means of Declaration, a model of which is available at the Investors Area, in the item Information to Shareholders on the company's website. Said interest on own capital will be declared and computed in the calculation of the mandatory minimum dividends, as provided in Article 37, Paragraph 2 of the Company's Bylaws and in Article 9, paragraph 7 of the Law 9249/95. The shares now are traded ex-interest from Feb. 28, 2008. Companhia de Saneamento Basico do Estado de Sao Paulo, aka Sabesp (Bovespa: SBSP3; NYSE: SBS) -- http://www.sabesp.com.br -- is one of the largest water and sewage service providers in the world based on the population served in 2005. It operates water and sewage systems in Sao Paulo, Brazil. * * * As reported in the Troubled Company Reporter-Latin America on Sept. 12, 2007, Fitch Ratings has affirmed the 'BB' Local Currency and Foreign Currency Issuer Default Ratings and the Long-Term National Scale Rating 'A+(bra)' of Companhia de Saneamento Basico do Estado de Sao Paulo. In addition, Fitch has affirmed the 'BB' Long-Term International Rating for US$140 million in notes issued by the company, as well as the 'A+(bra)' on National Scale for its sixth debenture issuance. Fitch said the rating outlook is stable. EMPRESA ENERGETICA: Moody's Rates US$250-Mln Joint Notes at Ba3 --------------------------------------------------------------- Moody's Investors Service assigned a Ba3 rating to the existing 7-year US$250 million Notes Units jointly issued by Empresa Energetica de Sergipe aka. Energipe (US$162.5 million) and Sociedade Anonima de Eletrificacao da Paraiba aka. Saelpa (US$87.5 million) and guaranteed by Energisa S.A. In addition, Moody's affirmed the Ba3 local currency corporate family and A3.br Brazil National Scale corporate family ratings for Energisa SA. The rating outlook is stable. Moody's assigned and affirmed these ratings: -- 10.5% US$250 million Notes Units due 2013: Ba3 -- Corporate Family Rating: Ba3; -- Brazil National Scale Corporate Family Rating: A3.br. The Ba3 rating considers Energisa's monopoly position in the electricity markets in the states of Paraiba, Sergipe and some areas in the states of Minas Gerais and Rio de Janeiro in addition to its strong credit metrics for the rating category. The rating also incorporates an evolving regulatory environment and relatively weak liquidity management given the lack of any committed standby credit facilities in place and potential uncertainty with regard to the company's ability to continue to access local capital markets. Energisa's rating also takes into consideration the group's recent corporate restructuring and reflects Moody's expectation that debt reduction will continue over the coming years. Most of the recent improvement in capital structure has resulted from the sale of generation assets to comply with the federal regulation requiring segregation of generation, distribution and non-regulated assets as well as to provide for a more balanced level of indebtedness. Energisa now represents the consolidation of all of the operating companies within the "Cataguazes-Leopoldina group", as per the name of the predecessor holding company, Companhia Forca e Luz Cataguazes- Leopoldina, which is now a fully owned subsidiary of Energisa SA. Over the past seven years, Energisa's leverage increased due to the Saelpa and other minority share acquisitions, increased capital expenditures and lower consumer demand resulting from the 2001-2002 electricity rationing program. With total generation asset divestiture proceeds of over BRL500 million expected by year-end 2007 and with most of this amount being used for debt reduction, Energisa's credit metrics will be materially stronger. During the last twelve months ending on Sept. 30, 2007, FFO reached BRL300 million (18.3% of adjusted debt, which reflects the receipt of BRL300 million in divestiture proceeds). The result is interest coverage of 2.1, which is appropriate for the Ba rating category. Nevertheless, the ratings are constrained by uncertainty related to the scheduled tariff reviews in 2008-2009. Moody's has assumed a 5- 10% tariff reduction in 2008, but a drop in sales of only 3-5%, since stable demand growth in the residential and commercial segments, which combined make up 64% of retail revenues, should mitigate the impact of lower tariffs, together with the continued reduction of electricity loss at Saelpa. However, a decrease in the operating margin from its current high level of 37% is likely. Through Energisa's recent asset sales and simplified corporate structure, the controlling shareholders, in Moody's opinion, have signaled their firm commitment to a stronger capital structure. However, one of the challenges facing Energisa going forward is continued reduction in electricity losses while maintaining tight operating cost controls and satisfactory service quality. The group may also be tempted to make electricity generation investments, since many projects are likely to undergo bidding over the next several years. Moody's expects that Energisa will prudently balance the interests of shareholders and creditors as it analyzes these possible generation investment opportunities while continuing to prioritize debt reduction. Moody's opinion is that Energisa should be analyzed on a consolidated basis, given the concentration of strategic and financial decisions at the holding company and its ability to control cash dividend distributions at the operating companies. The formal guarantee on the existing Note Units also support this view, as does Energisa's additional BRL120 million capitalization of Empresa Energetica by year-end 2007 with proceeds coming from asset sales and a planned 6-year (4-year grace period) BRL150 million debenture, which is pending improved market conditions. Moody's believes that the holding company will continue to be able to meet its debt service obligations with cash flow upstreamed from the operating companies through dividend payments and service agreements. Moody's recognizes that Energisa has taken measures to foster improved disclosure and corporate governance practices, but also believes that there is room for further improvement, such as the release of annual and quarterly cash flow statements and greater disclosure regarding the breakdown of financial expenses and income. Currently, Energisa's shares are not listed under any of the Bovespa's enhanced levels of corporate governance standards but the company provides tag-along rights to minority shareholders. The most important factor constraining the ratings is the Brazilian regulatory framework, which has undergone substantial change over the past several years and has a history of being unpredictable. The federal utility regulatory body in Brazil (Aneel) is part of the Brazilian government, which holds a Ba1 foreign currency and local currency bond rating. In terms of cost recovery, rate increases and decreases, all are undergoing a period of significant uncertainty due to ongoing reviews and revisions by the regulator of existing asset and cost bases. When evaluating this factor, Moody's also considered potential future electricity shortages due to a tight reserve margin, limited independence of the regulator and minimal jurisprudence backing the new regulatory framework. Energisa does not have committed bank credit facilities to help fund unexpected cash disbursements. As of Sept. 30, 2007, Energisa had BRL152 million in cash and marketable securities and BRL434 in short term debt, both on a consolidated basis. In the last quarter of 2007, the company received approximately BRL220 million and reduced bank debt by an additional BRL52 million (transfer of debt) from the recent sale of generation assets. Energisa plans to raise approximately BRL400 million in the local capital markets, of which a BRL150 million receivables securitization was completed in October. Financial institutions have already extended the remaining portion through bridge loans, which are expected to be taken out as soon market conditions allow, mostly through the issuance of local debentures. According to management, firm commitment has already been received from the bank that is underwriting the issuance. Energisa intends to use these proceeds to pay down short term debt, thus reducing its overall cost of debt and further extending its maturity profile. The stable outlook reflects Moody's expectation that Energisa will reduce total debt and maintain credit metrics adequate for the Ba3 rating category, even though expected tariff reductions in 2008 and 2009 are unlikely to be fully offset by demand growth and further reductions in electricity losses. Moody's would consider an upgrade if Energisa achieves consistent improvement in cash flow metrics so that RCF/Adjusted debt ratio remains above 20% and interest coverage is over 3.0 on a sustainable basis. A downgrade could result from the maintenance of total debt of above BRL1.5 billion or deterioration in cash flow metrics, with RCF/Adjusted debt falling below 10% and interest coverage declining below 2.0 for an extended period. Energisa, based in Cataguases, Minas Gerais, is a holding company that controls five electricity distribution utilities in four Brazilian states, serving approximately two million consumers. During the nine month period ending on Sept. 30, 2007, Energisa sold 4,956 MW, equivalent to approximately 2% of all electricity distributed in Brazil. Energisa is listed on the Brazilian stock market and is controlled by the Botelho family. ENERGISA SA: Moody's Affirms Corporate Family Rating at Ba3 ----------------------------------------------------------- Moody's Investors Service assigned a Ba3 rating to the existing 7-year US$250 million Notes Units jointly issued by Empresa Energetica de Sergipe aka. Energipe (US$162.5 million) and Sociedade Anonima de Eletrificacao da Paraiba aka. Saelpa (US$87.5 million) and guaranteed by Energisa S.A. In addition, Moody's affirmed the Ba3 local currency corporate family and A3.br Brazil National Scale corporate family ratings for Energisa SA. The rating outlook is stable. Moody's assigned and affirmed these ratings: -- 10.5% US$250 million Notes Units due 2013: Ba3 -- Corporate Family Rating: Ba3; -- Brazil National Scale Corporate Family Rating: A3.br. The Ba3 rating considers Energisa's monopoly position in the electricity markets in the states of Paraiba, Sergipe and some areas in the states of Minas Gerais and Rio de Janeiro in addition to its strong credit metrics for the rating category. The rating also incorporates an evolving regulatory environment and relatively weak liquidity management given the lack of any committed standby credit facilities in place and potential uncertainty with regard to the company's ability to continue to access local capital markets. Energisa's rating also takes into consideration the group's recent corporate restructuring and reflects Moody's expectation that debt reduction will continue over the coming years. Most of the recent improvement in capital structure has resulted from the sale of generation assets to comply with the federal regulation requiring segregation of generation, distribution and non-regulated assets as well as to provide for a more balanced level of indebtedness. Energisa now represents the consolidation of all of the operating companies within the "Cataguazes-Leopoldina group", as per the name of the predecessor holding company, Companhia Forca e Luz Cataguazes- Leopoldina, which is now a fully owned subsidiary of Energisa SA. Over the past seven years, Energisa's leverage increased due to the Saelpa and other minority share acquisitions, increased capital expenditures and lower consumer demand resulting from the 2001-2002 electricity rationing program. With total generation asset divestiture proceeds of over BRL500 million expected by year-end 2007 and with most of this amount being used for debt reduction, Energisa's credit metrics will be materially stronger. During the last twelve months ending on Sept. 30, 2007, FFO reached BRL300 million (18.3% of adjusted debt, which reflects the receipt of BRL300 million in divestiture proceeds). The result is interest coverage of 2.1, which is appropriate for the Ba rating category. Nevertheless, the ratings are constrained by uncertainty related to the scheduled tariff reviews in 2008-2009. Moody's has assumed a 5- 10% tariff reduction in 2008, but a drop in sales of only 3-5%, since stable demand growth in the residential and commercial segments, which combined make up 64% of retail revenues, should mitigate the impact of lower tariffs, together with the continued reduction of electricity loss at Saelpa. However, a decrease in the operating margin from its current high level of 37% is likely. Through Energisa's recent asset sales and simplified corporate structure, the controlling shareholders, in Moody's opinion, have signaled their firm commitment to a stronger capital structure. However, one of the challenges facing Energisa going forward is continued reduction in electricity losses while maintaining tight operating cost controls and satisfactory service quality. The group may also be tempted to make electricity generation investments, since many projects are likely to undergo bidding over the next several years. Moody's expects that Energisa will prudently balance the interests of shareholders and creditors as it analyzes these possible generation investment opportunities while continuing to prioritize debt reduction. Moody's opinion is that Energisa should be analyzed on a consolidated basis, given the concentration of strategic and financial decisions at the holding company and its ability to control cash dividend distributions at the operating companies. The formal guarantee on the existing Note Units also support this view, as does Energisa's additional BRL120 million capitalization of Empresa Energetica by year-end 2007 with proceeds coming from asset sales and a planned 6-year (4-year grace period) BRL150 million debenture, which is pending improved market conditions. Moody's believes that the holding company will continue to be able to meet its debt service obligations with cash flow upstreamed from the operating companies through dividend payments and service agreements. Moody's recognizes that Energisa has taken measures to foster improved disclosure and corporate governance practices, but also believes that there is room for further improvement, such as the release of annual and quarterly cash flow statements and greater disclosure regarding the breakdown of financial expenses and income. Currently, Energisa's shares are not listed under any of the Bovespa's enhanced levels of corporate governance standards but the company provides tag-along rights to minority shareholders. The most important factor constraining the ratings is the Brazilian regulatory framework, which has undergone substantial change over the past several years and has a history of being unpredictable. The federal utility regulatory body in Brazil (Aneel) is part of the Brazilian government, which holds a Ba1 foreign currency and local currency bond rating. In terms of cost recovery, rate increases and decreases, all are undergoing a period of significant uncertainty due to ongoing reviews and revisions by the regulator of existing asset and cost bases. When evaluating this factor, Moody's also considered potential future electricity shortages due to a tight reserve margin, limited independence of the regulator and minimal jurisprudence backing the new regulatory framework. Energisa does not have committed bank credit facilities to help fund unexpected cash disbursements. As of Sept. 30, 2007, Energisa had BRL152 million in cash and marketable securities and BRL434 in short term debt, both on a consolidated basis. In the last quarter of 2007, the company received approximately BRL220 million and reduced bank debt by an additional BRL52 million (transfer of debt) from the recent sale of generation assets. Energisa plans to raise approximately BRL400 million in the local capital markets, of which a BRL150 million receivables securitization was completed in October. Financial institutions have already extended the remaining portion through bridge loans, which are expected to be taken out as soon market conditions allow, mostly through the issuance of local debentures. According to management, firm commitment has already been received from the bank that is underwriting the issuance. Energisa intends to use these proceeds to pay down short term debt, thus reducing its overall cost of debt and further extending its maturity profile. The stable outlook reflects Moody's expectation that Energisa will reduce total debt and maintain credit metrics adequate for the Ba3 rating category, even though expected tariff reductions in 2008 and 2009 are unlikely to be fully offset by demand growth and further reductions in electricity losses. Moody's would consider an upgrade if Energisa achieves consistent improvement in cash flow metrics so that RCF/Adjusted debt ratio remains above 20% and interest coverage is over 3.0 on a sustainable basis. A downgrade could result from the maintenance of total debt of above BRL1.5 billion or deterioration in cash flow metrics, with RCF/Adjusted debt falling below 10% and interest coverage declining below 2.0 for an extended period. Energisa, based in Cataguases, Minas Gerais, is a holding company that controls five electricity distribution utilities in four Brazilian states, serving approximately two million consumers. During the nine month period ending on Sept. 30, 2007, Energisa sold 4,956 MW, equivalent to approximately 2% of all electricity distributed in Brazil. Energisa is listed on the Brazilian stock market and is controlled by the Botelho family. SOCIEDADE ANONIMA: Moody's Rates US$250-Mln Joint Notes at Ba3 -------------------------------------------------------------- Moody's Investors Service assigned a Ba3 rating to the existing 7-year US$250 million Notes Units jointly issued by Empresa Energetica de Sergipe aka. Energipe (US$162.5 million) and Sociedade Anonima de Eletrificacao da Paraiba aka. Saelpa (US$87.5 million) and guaranteed by Energisa S.A. In addition, Moody's affirmed the Ba3 local currency corporate family and A3.br Brazil National Scale corporate family ratings for Energisa SA. The rating outlook is stable. Moody's assigned and affirmed these ratings: -- 10.5% US$250 million Notes Units due 2013: Ba3 -- Corporate Family Rating: Ba3; -- Brazil National Scale Corporate Family Rating: A3.br. The Ba3 rating considers Energisa's monopoly position in the electricity markets in the states of Paraiba, Sergipe and some areas in the states of Minas Gerais and Rio de Janeiro in addition to its strong credit metrics for the rating category. The rating also incorporates an evolving regulatory environment and relatively weak liquidity management given the lack of any committed standby credit facilities in place and potential uncertainty with regard to the company's ability to continue to access local capital markets. Energisa's rating also takes into consideration the group's recent corporate restructuring and reflects Moody's expectation that debt reduction will continue over the coming years. Most of the recent improvement in capital structure has resulted from the sale of generation assets to comply with the federal regulation requiring segregation of generation, distribution and non-regulated assets as well as to provide for a more balanced level of indebtedness. Energisa now represents the consolidation of all of the operating companies within the "Cataguazes-Leopoldina group", as per the name of the predecessor holding company, Companhia Forca e Luz Cataguazes- Leopoldina, which is now a fully owned subsidiary of Energisa SA. Over the past seven years, Energisa's leverage increased due to the Saelpa and other minority share acquisitions, increased capital expenditures and lower consumer demand resulting from the 2001-2002 electricity rationing program. With total generation asset divestiture proceeds of over BRL500 million expected by year-end 2007 and with most of this amount being used for debt reduction, Energisa's credit metrics will be materially stronger. During the last twelve months ending on Sept. 30, 2007, FFO reached BRL300 million (18.3% of adjusted debt, which reflects the receipt of BRL300 million in divestiture proceeds). The result is interest coverage of 2.1, which is appropriate for the Ba rating category. Nevertheless, the ratings are constrained by uncertainty related to the scheduled tariff reviews in 2008-2009. Moody's has assumed a 5- 10% tariff reduction in 2008, but a drop in sales of only 3-5%, since stable demand growth in the residential and commercial segments, which combined make up 64% of retail revenues, should mitigate the impact of lower tariffs, together with the continued reduction of electricity loss at Saelpa. However, a decrease in the operating margin from its current high level of 37% is likely. Through Energisa's recent asset sales and simplified corporate structure, the controlling shareholders, in Moody's opinion, have signaled their firm commitment to a stronger capital structure. However, one of the challenges facing Energisa going forward is continued reduction in electricity losses while maintaining tight operating cost controls and satisfactory service quality. The group may also be tempted to make electricity generation investments, since many projects are likely to undergo bidding over the next several years. Moody's expects that Energisa will prudently balance the interests of shareholders and creditors as it analyzes these possible generation investment opportunities while continuing to prioritize debt reduction. Moody's opinion is that Energisa should be analyzed on a consolidated basis, given the concentration of strategic and financial decisions at the holding company and its ability to control cash dividend distributions at the operating companies. The formal guarantee on the existing Note Units also support this view, as does Energisa's additional BRL120 million capitalization of Empresa Energetica by year-end 2007 with proceeds coming from asset sales and a planned 6-year (4-year grace period) BRL150 million debenture, which is pending improved market conditions. Moody's believes that the holding company will continue to be able to meet its debt service obligations with cash flow upstreamed from the operating companies through dividend payments and service agreements. Moody's recognizes that Energisa has taken measures to foster improved disclosure and corporate governance practices, but also believes that there is room for further improvement, such as the release of annual and quarterly cash flow statements and greater disclosure regarding the breakdown of financial expenses and income. Currently, Energisa's shares are not listed under any of the Bovespa's enhanced levels of corporate governance standards but the company provides tag-along rights to minority shareholders. The most important factor constraining the ratings is the Brazilian regulatory framework, which has undergone substantial change over the past several years and has a history of being unpredictable. The federal utility regulatory body in Brazil (Aneel) is part of the Brazilian government, which holds a Ba1 foreign currency and local currency bond rating. In terms of cost recovery, rate increases and decreases, all are undergoing a period of significant uncertainty due to ongoing reviews and revisions by the regulator of existing asset and cost bases. When evaluating this factor, Moody's also considered potential future electricity shortages due to a tight reserve margin, limited independence of the regulator and minimal jurisprudence backing the new regulatory framework. Energisa does not have committed bank credit facilities to help fund unexpected cash disbursements. As of Sept. 30, 2007, Energisa had BRL152 million in cash and marketable securities and BRL434 in short term debt, both on a consolidated basis. In the last quarter of 2007, the company received approximately BRL220 million and reduced bank debt by an additional BRL52 million (transfer of debt) from the recent sale of generation assets. Energisa plans to raise approximately BRL400 million in the local capital markets, of which a BRL150 million receivables securitization was completed in October. Financial institutions have already extended the remaining portion through bridge loans, which are expected to be taken out as soon market conditions allow, mostly through the issuance of local debentures. According to management, firm commitment has already been received from the bank that is underwriting the issuance. Energisa intends to use these proceeds to pay down short term debt, thus reducing its overall cost of debt and further extending its maturity profile. The stable outlook reflects Moody's expectation that Energisa will reduce total debt and maintain credit metrics adequate for the Ba3 rating category, even though expected tariff reductions in 2008 and 2009 are unlikely to be fully offset by demand growth and further reductions in electricity losses. Moody's would consider an upgrade if Energisa achieves consistent improvement in cash flow metrics so that RCF/Adjusted debt ratio remains above 20% and interest coverage is over 3.0 on a sustainable basis. A downgrade could result from the maintenance of total debt of above BRL1.5 billion or deterioration in cash flow metrics, with RCF/Adjusted debt falling below 10% and interest coverage declining below 2.0 for an extended period. Energisa, based in Cataguases, Minas Gerais, is a holding company that controls five electricity distribution utilities in four Brazilian states, serving approximately 2 million consumers. During the nine month period ending on Sept. 30, 2007, Energisa sold 4,956 MW, equivalent to approximately 2% of all electricity distributed in Brazil. Energisa is listed on the Brazilian stock market and is controlled by the Botelho family. Sociedade Anonima and Energetica de Sergipe are two of the five electricity distribution companies that form the Energisa Group. The group distributes electricity to more than 2 million consumers in 352 municipalities in Brazil, accounting for 9% of total electricity distributed in the Northeast region and 2% of the total electricity distributed in the country. TRW AUTOMOTIVE: Earns US$56MM for 2007 Fourth Qtr. Ended Dec. 31 ---------------------------------------------------------------- TRW Automotive Holdings Corp. (NYSE: TRW), the global leader in active and passive safety systems, reported fourth-quarter 2007 financial results with sales of US$3.9 billion, an increase of 18.8 percent compared to the same period a year ago. The Company reported fourth quarter net earnings of US$56 million, which compares to the prior year result of US$33 million. The Company's full-year 2007 sales grew to a record US$14.7 billion, an increase of 11.9 percent compared to the prior year. Net earnings for the year were US$90 million, which compares to 2006 earnings of US$176 million. "In 2007, TRW delivered solid operating results, including record sales and outstanding cash flow, that exceeded the business objectives set at the beginning of the year," said John Plant, president and chief executive officer. "Our achievements in 2007 related to our financial performance, together with steady expansion overseas, debt refinancing and safety advancements have helped the Company grow stronger despite challenging industry conditions." Mr. Plant added, "We have performed remarkably well since becoming an independent company, providing solid results to our stakeholders and capitalizing on our position as the world's preeminent active and passive safety systems supplier. Now in 2008, we are a significantly larger, more diverse enterprise that is reaching further into the world's growing markets with a portfolio of safety technology that is unrivaled in the marketplace. We continue to build for the future and are focused on moving the Company forward profitably over the long term." Fourth Quarter 2007 The company reported fourth-quarter 2007 sales of US$3.9 billion, an increase of US$614 million or 18.8 percent over the prior year period. Foreign currency translation benefited sales in the quarter by approximately US$328 million. Fourth quarter sales excluding the impact of foreign currency translation increased approximately US$286 million or 8.7 percent over the prior year period. This increase can be attributed to higher customer vehicle production in Europe and China and the continued growth of safety products in all markets (including a higher mix of lower margin modules). These positive factors were partially offset by pricing provided to customers and the continued decline in North American customer vehicle production. Operating income for fourth-quarter 2007 was US$149 million, which compares favorably to US$126 million in the prior year period. Restructuring and asset impairment expenses in the 2007 quarter were US$19 million, which compares to US$8 million in 2006. Operating income excluding these expenses from both periods was US$168 million in 2007, which represents an increase of 25.4 percent compared to the 2006 result of US$134 million. The year-to-year increase was driven primarily by higher product volumes and savings generated from cost improvement and efficiency programs, including reductions in pension and OPEB related costs and a measurable improvement in the Company's Automotive Components segment. These positive factors were in part offset by pricing provided to customers, higher commodity costs and other unfavorable business items. Net interest and securitization expense for the fourth quarter of 2007 totaled US$56 million, which compares favorably to US$66 million in the prior year. The year-to-year decline can be attributed to the benefits derived from the Company's 2007 debt recapitalization which was completed during the second quarter of 2007. Tax expense in the 2007 quarter was US$39 million, resulting in an effective tax rate of 41 percent, which compares to US$32 million or 49 percent in the prior year period. The 2007 quarter included a FAS 109 adjustment related to pension and OPEB gains recorded through other comprehensive earnings that resulted in a non-cash tax benefit of US$11 million. The prior year quarter included a US$17 million tax benefit related to a bond redemption transaction that was completed during the first quarter of 2006. Excluding these items from both years, the effective tax rate was 53 percent in 2007, which compares to 75 percent in the 2006 quarter. The lower tax rate in the fourth quarter of 2007 can be attributed to a change in the Company's geographic earnings mix. The Company reported fourth-quarter 2007 net earnings of US$56 million or US$0.55 per diluted share, which compares to net earnings of US$33 million or US$0.32 per diluted share in 2006. Net earnings excluding the previously mentioned tax items from both periods were US$45 million or US$0.44 per diluted share in 2007, which compares to US$16 million or US$0.16 per diluted share in 2006. Earnings before interest, securitization costs, loss on retirement of debt (where applicable), taxes, depreciation and amortization, or EBITDA, were US$300 million in the fourth quarter, which compares to the prior year level of US$267 million. Full Year 2007 For full-year 2007, the Company reported sales of US$14.7 billion, an increase of US$1.6 billion or 11.9 percent compared to prior year sales of US$13.1 billion. Foreign currency translation benefited sales in 2007 by approximately US$856 million. Full year 2007 sales excluding the impact of foreign currency translation increased approximately US$702 million or 5.3 percent over the prior year period. This increase resulted primarily from higher product volumes related to new product growth and robust industry sales in overseas markets, partially offset by the decline in North American customer vehicle production and pricing provided to customers. Operating income in 2007 was US$624 million, which compares to US$636 million in the prior year. Restructuring and asset impairment expenses in 2007 were US$51 million, which compares to US$30 million in 2006. Operating income excluding these expenses from both periods was US$675 million in 2007, which represents an increase of US$9 million compared to the 2006 result. This year- to-year improvement can be attributed to savings generated from cost improvement and efficiency programs, including reductions in pension and OPEB related costs, and higher product volumes globally. These positive factors more than offset pricing provided to customers, considerably higher commodity costs and a challenging first quarter operating environment, in which operating income declined significantly compared to the prior year due to weak industry production in North America and an unfavorable mix of products sold in the 2007 quarter. The company posted year-to-year improvements in operating income in each of the remaining three quarters in 2007 which helped offset the first quarter decline. Net interest and securitization expense for 2007 totaled US$233 million, which declined from the prior year total of US$250 million primarily due to the benefits derived from the Company's debt recapitalization completed during the second quarter of 2007. As a reminder, actions related to the debt recapitalization included a US$1.5 billion Senior Note offering, the tender for substantially all of the Company's outstanding US$1.3 billion Notes and the refinancing of its US$2.5 billion credit facilities. In 2007, the Company incurred charges related to these transactions of US$155 million for loss on retirement of debt. In 2006, the Company incurred charges of US$57 million also related to debt retirement. Tax expense in 2007 was US$155 million, resulting in a 63 percent effective tax rate, which compares to US$166 million or 49 percent in 2006. The effective tax rate in 2007 excluding debt retirement charges and the FAS 109 tax benefit was 42 percent. This compares to an effective tax rate, excluding debt retirement charges and the related tax benefit, of 46 percent in 2006. Full-year 2007 net earnings were US$90 million, or US$0.88 per diluted share, which compares to US$176 million or US$1.71 per diluted share in 2006. Net earnings excluding the previously mentioned debt retirement charges and tax items from both periods were US$234 million or US$2.28 per diluted share in 2007, which compares to US$216 million or US$2.10 per diluted share in 2006. EBITDA in 2007 totaled US$1,190 million, which represents a US$24 million improvement over the prior year result of US$1,166 million. Cash Flow and Capital Structure Net cash provided by operating activities during the fourth quarter was US$826 million, which compares to US$397 million in the prior year period. Fourth quarter capital expenditures were US$174 million compared to US$195 million in 2006. For full-year 2007, net cash flow from operating activities was US$737 million, which compares to US$649 million in the prior year. Capital expenditures were US$513 million in 2007, which compares to US$529 million in 2006. Full year 2007 operating cash flow after capital expenditures, referred to as free cash flow, was US$224 million, which compares to US$120 million in 2006. As mentioned previously, the Company completed its debt recapitalization plan during the second quarter of 2007, including the refinancing of its US$2.5 billion credit facilities on May 9, 2007. Additionally, on March 26, 2007, the Company completed its US$1.5 billion Senior Note offering and repurchased substantially all of the existing US$1.3 billion Notes through a tender offer. The Company incurred debt retirement charges of approximately US$155 million in 2007 related to these transactions. On Feb. 2, 2006, the company's wholly owned subsidiary, Lucas Industries Limited, completed the tender for its outstanding GBP 94.6 million 10-7/8% bonds. As a result of the transaction, the Company incurred a US$57 million charge for loss on retirement of debt. As of Dec. 31, 2007, the Company had US$3,244 million of debt and US$899 million of cash and marketable securities, resulting in net debt (defined as debt less cash and marketable securities) of US$2,345 million. This net debt outcome is US$98 million lower than the balance at the end of 2006. About TRW Automotive Headquartered in Livonia, Michigan, TRW Automotive Holdings Corp. (NYSE: TRW) -- http://www.trw.com/-- ranks among the world's leading automotive suppliers. The company, through its subsidiaries, operates in 28 countries and employs approximately 63,800 people worldwide, including Brazil, China, Germany and Italy. TRW Automotive products include integrated vehicle control and driver assist systems, braking systems, steering systems, suspension systems, occupant safety systems (seat belts and airbags), electronics, engine components, fastening systems and aftermarket replacement parts and services. * * * As reported in the Troubled Company Reporter-Latin America on Jan. 25, 2008, Moody's Investors Service affirmed the ratings of TRW Automotive Inc.: Corporate Family Rating, Ba2; senior secured bank credit facilities, Baa3; and senior unsecured notes, Ba3, but revised the rating outlook to negative from stable. TRW Automotive Holdings carries Fitch Ratings' 'BB' long term issuer default rating with a stable outlook. The rating was assigned in October 2005. ========================== C A Y M A N I S L A N D S ========================== BASSO PRIVATE: To Hold Final Shareholders Meeting on March 6 ------------------------------------------------------------ Basso Private Opportunities Fund Ltd. will hold its final shareholders' meeting on March 6, 2008, at the registered office of the company. These matters will be taken up during the meeting: 1) accounting of the winding-up process; and 2) giving explanation thereof. Basso Private's shareholders decided on Dec. 4, 2007, to place the company into voluntary liquidation under The Companies Law (2004 Revision) of the Cayman Islands. The liquidator can be reached at: Joshua Grant Maples Finance Limited P.O. Box 1093, George Town Grand Cayman, Cayman Islands BROADWAY FINANCE: Sets Final Shareholders Meeting on March 6 ------------------------------------------------------------ Broadway Finance Limited will hold its final shareholders' meeting on March 6, 2008, at 10:30 a.m. at the registered office of the company. These matters will be taken up during the meeting: 1) accounting of the winding-up process; and 2) authorizing the liquidators to retain the records of the company for a period of six years from the dissolution of the company, after which they may be destroyed. Broadway Finance's shareholders decided on Jan. 23, 2008, to place the company into voluntary liquidation under The Companies Law (2004 Revision) of the Cayman Islands. The liquidator can be reached at: Westport Services Ltd. Attn: Evania Ebanks Paget-Brown Trust Company Ltd. Boundary Hall, Cricket Square P.O. Box 1111, Grand Cayman KY1-1102 Cayman Islands Telephone: (345)-949-5122 Fax: (345)-949-7920 BROWARD FINANCE: To Hold Final Shareholders Meeting on March 6 -------------------------------------------------------------- Broward Finance Limited will hold its final shareholders' meeting on March 6, 2008, at 10:30 a.m. at the registered office of the company. These matters will be taken up during the meeting: 1) accounting of the winding-up process; and 2) authorizing the liquidators to retain the records of t