/raid1/www/Hosts/bankrupt/TCRLA

/raid1/www/Hosts/bankrupt/TCRLA_Public/090506.mbx T R O U B L E D C O M P A N Y R E P O R T E R L A T I N A M E R I C A Wednesday, May 6, 2009, Vol. 10, No. 88 Headlines A N T I G U A & B A R B U D A STANFORD INT'L BANK: U.S. SEC Opposes Release of Owner's Funds A R G E N T I N A ABRIL SALUD: Proofs of Claim Verification Due on September 1 ALIAR AGREGADOS: Trustee Verifying Proofs of Claim Until June 22 ARCIDIACONO SA: Trustee Verifies Proofs of Claim ASOCIACION MUTUAL: Trustee Verifying Proofs of Claim Until May 29 BANCO PATAGONIA: S&P Affirms 'B-' Counterparty Credit Rating CELI CONSTRUCCIONES: Creditors' Proofs of Debt Due on May 13 COMFRIX SRL: Trustee Verifying Proofs of Claim Until June 3 EMPRESAS UNIDAS: Trustee Verifying Proofs of Claim Until June 5 LOGISTICA DIGITAL: Trustee Verifying Proofs of Claim Until June 29 NEGOCIOS AGROPECUARIOS: Asks for Declaration of Bankruptcy OPEN SPORTS: Trustee Verifying Proofs of Claim Until June 16 TRANSPORTES INTEGRADOS: Creditors' Proofs of Debt Due on June 12 YPF SA: Parent Firm's Union Calls Off Strike at 3 Refineries YPF SA: S&P Withdraws 'B+' Rating at Company's Request B R A Z I L BANCO BRADESCO: Visanet Plans IPO in the Next 90 Days BANCO DO BRASIL: Unit to Hold IPO in the Next 90 Days BNDES: Approves BRL665 Million Financing For Comgas SA GOL LINHAS: Fitch Downgrades Issuer Default Ratings to 'B+' MINERVA SA: Fitch Downgrades Issuer Default Rating to 'B' ODEBRECHT SA: Ecuador Files Arbitration Claim Against Firm TAM SA: Fitch Downgrades Issuer Default Ratings to 'BB-' TELECOM ARGENTINA: To Hold 1Q Earnings Conference Call on May 8 TELE NORTE: Begins BRL3 Billion Debenture Issue C O L O M B I A ECOPETROL SA: Inks Plant Construction Deal With Union Temporal C O S T A R I C A * COSTA RICA: Tourism Sector Drops 13% in 1Q on World Crisis D O M I N I C A N R E P U B L I C * DOMINICAN REP: Exports & Tourist Arrivals Drop in First 2 Months E L S A L V A D O R BANCO AGRICOLA: Fitch Affirms Individual Rating at 'C/D' BANCO HSBC: Fitch Affirms Individual Rating at 'C/D' SCOTIABANK EL: Fitch Affirms Individual Rating at 'C/D' G U Y A N A CL FIN'L: Guyana Hires Attorney to Press Claim in CLICO Bahamas M E X I C O BANCOPPEL SA: Moody's Downgrades Currency Deposit Rating to 'B2' CEMEX SAB: Creditors May Agree to Refinance Debt * MEXICO: Credit Suisse Analyst Forecasts 6% Decline in Economy P A R A G U A Y * PARAGUAY: May Sue Brazil Over Itaipu Dam Debt T R I N I D A D & T O B A G O PETROTRIN: Incurs Losses Amid Drop in Oil Prices - - - - - =============================== A N T I G U A & B A R B U D A =============================== STANFORD INT'L BANK: U.S. SEC Opposes Release of Owner's Funds -------------------------------------------------------------- The U.S. Securities and Exchange Comission (SEC) has filed with the U.S. District Court in Dallas to oppose Stanford International Bank Limited (SIBL) owner Robert Allen Stanford's efforts to have US$10 million released to pay his legal fees, Caribbean Net News reports. "Stanford is not entitled to use his ill-gotten gains to pay for his defense," the filing said, citing the executive's lack of cooperation with a court-appointed receiver and his failure to provide an accounting of investor funds, Caribbean Net News relates. According to the report, Mr. Stanford has asked an appeals court to review the lower court's order. The report notes the government argued in the filing that because of that appeal, the lower court does not have jurisdiction over the legal fee dispute. As reported in the Troubled Company Reporter-Latin America on April 21, 2009, Bloomberg News said Mr. Stanford has asked a judge to unlock frozen assets so he can hire defense attorneys. The same report related, in a filing with the Dallas federal court, Jack C. Nickens, Mr. Stanford’s civil lawyer, said the court-ordered freeze left Mr. Stanford “with no money to retain counsel to defend himself from an avalanche of allegations in civil actions not just across the country, but around the world, not to mention a possible criminal indictment.” The Securities and Exchange Commission (SEC), on Feb. 17, charged Mr. Stanford and three of his companies for orchestrating a fraudulent, multi-billion dollar investment scheme centering on an US$8 billion Certificate of Deposit program. Mr. Stanford's companies include SIBL, Stanford Group Company (SGC), and investment adviser Stanford Capital Management. As reported in the Troubled Company Reporter-Latin America on April 8, 2009, Bloomberg News said U.S. District Judge David Godbey seized all of Mr. Stanford’s corporate and personal assets and placed them under the control of court-appointed SGC receiver Ralph Janvey. Houston criminal defense attorney Dick DeGuerin, Mr. Stanford’s lawyer, told Bloomberg News in an interview: “It’s not fair that the government can take away everything so you don’t even have money for a lawyer.” About Stanford International Domiciled in Antigua, Stanford International Bank Limited -- http://www.stanfordinternationalbank.com/-- is a member of Stanford Private Wealth Management, a global financial services network with US$51 billion in deposits and assets under management or advisement. Stanford Private Wealth Management serves more than 70,000 clients in 140 countries. ================= A R G E N T I N A ================= ABRIL SALUD: Proofs of Claim Verification Due on September 1 ------------------------------------------------------------ Natalio Mandan, the court-appointed trustee for Abril Salud S.A.'s bankruptcy proceedings, will be verifying creditors' proofs of claim until September 1, 2009. Mr. Mandan will present the validated claims in court as individual reports. The National Commercial Court of First Instance No. 14 in Buenos Aires, with the assistance of Clerk No. 26, 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 the company and its creditors. The Trustee can be reached at: Natalio Mandan Maipu 42 Buenos Aires, Argentina ALIAR AGREGADOS: Trustee Verifying Proofs of Claim Until June 22 ---------------------------------------------------------------- The court-appointed trustee for Aliar Agregados Livianos y Filtrantes Argentinos S.A.'s bankruptcy proceedings will be verifying creditors' proofs of claim until June 22, 2009. The trustee will present the validated claims in court as individual reports on August 19, 2009. 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 the company and its creditors. Inadmissible claims may be subject to appeal in a separate proceeding known as an appeal for reversal. A general report that contains an audit of the company's accounting and banking records will be submitted in court on September 30, 2009. ARCIDIACONO SA: Trustee Verifies Proofs of Claim ------------------------------------------------ The court-appointed trustee for Arcidiacono S.A.'s reorganization proceedings verified the creditors' proofs of claim on May 4, 2009. The trustee will present the validated claims in court as individual reports on June 17, 2009. 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 the company and its creditors. Inadmissible claims may be subject to appeal in a separate proceeding known as an appeal for reversal. A general report that contains an audit of the company's accounting and banking records will be submitted in court on August 18, 2009. ASOCIACION MUTUAL: Trustee Verifying Proofs of Claim Until May 29 ----------------------------------------------------------------- The court-appointed trustee for Asociacion Mutual Juramento's reorganization proceedings will be verifying creditors' proofs of claim until May 29, 2009. The trustee will present the validated claims in court as individual reports on June 29, 2009. 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 the company and its creditors. BANCO PATAGONIA: S&P Affirms 'B-' Counterparty Credit Rating ------------------------------------------------------------ Standard & Poor's Ratings Services said that it affirmed its 'B-' counterparty credit rating on Banco Patagonia S.A. The outlook is stable. "The ratings on Banco Patagonia S.A. primarily reflect the risk inherent in the operating environment in Argentina," said Standard & Poor's credit analyst Sebastián Liutvinas. "The bank is further challenged to increase its still-low market participation and to sustain revenue diversification." However, he noted, "These weaknesses are counterbalanced by the bank's solid financial standing, evidenced by good asset quality, above-market-average profitability, ample liquidity, and high capitalization." Given increasing uncertainties about the Argentine economy amid decelerating economic activity, S&P believes that the close linkage between the credit quality of the Republic of Argentina (B-/Stable/C) and that of the country's financial system will directly affect the bank's business and future results. CELI CONSTRUCCIONES: Creditors' Proofs of Debt Due on May 13 ------------------------------------------------------------ Eva Bogado, the court-appointed trustee for Celi Construcciones S.A.'s bankruptcy proceedings, will be verifying creditors' proofs of claim until May 13, 2009. Ms. Bogado will present the validated claims in court as individual reports. The National Commercial Court of First Instance No. 2 in Buenos Aires, with the assistance of Clerk No. 4, 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 the company and its creditors. The Trustee can be reached at: Eva Bogado Paraguay 1465 COMFRIX SRL: Trustee Verifying Proofs of Claim Until June 3 ----------------------------------------------------------- The court-appointed trustee for Comfrix S.R.L.'s bankruptcy proceedings will be verifying creditors' proofs of claim until June 3, 2009. The trustee will present the validated claims in court as individual reports on August 21, 2009. 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 the company and its creditors. Inadmissible claims may be subject to appeal in a separate proceeding known as an appeal for reversal. A general report that contains an audit of the company's accounting and banking records will be submitted in court on October 2, 2009. EMPRESAS UNIDAS: Trustee Verifying Proofs of Claim Until June 5 --------------------------------------------------------------- The court-appointed trustee for Empresas Unidas del Oeste S.A.'s bankruptcy proceedings will be verifying creditors' proofs of claim until June 5, 2009. LOGISTICA DIGITAL: Trustee Verifying Proofs of Claim Until June 29 ------------------------------------------------------------------ The court-appointed trustee for Logistica Digital S.A.'s bankruptcy proceedings will be verifying creditors' proofs of claim until June 29, 2009. The trustee will present the validated claims in court as individual reports on August 26, 2009. 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 the company and its creditors. Inadmissible claims may be subject to appeal in a separate proceeding known as an appeal for reversal. A general report that contains an audit of the company's accounting and banking records will be submitted in court on October 7, 2009. NEGOCIOS AGROPECUARIOS: Asks for Declaration of Bankruptcy ---------------------------------------------------------- Negocios Agropecuarios S.A. asked for the declaration of its bankruptcy before the National Commercial Court of First Instance No. 16 in Buenos Aires, with the assistance of Clerk No. 31. OPEN SPORTS: Trustee Verifying Proofs of Claim Until June 16 ------------------------------------------------------------ The court-appointed trustee for Open Sports Business S.A.'s bankruptcy proceedings will be verifying creditors' proofs of claim until June 16, 2009. TRANSPORTES INTEGRADOS: Creditors' Proofs of Debt Due on June 12 ---------------------------------------------------------------- Alberto Ladaga, the court-appointed trustee for Transportes Integrados Centro S.A.'s bankruptcy proceeding, will be verifying creditors' proofs of claim until June 12, 2009. Mr. Ladaga will present the validated claims in court as individual reports. The National Commercial Court of First Instance No. 18 in Buenos Aires, with the assistance of Clerk No. 36, 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 the company and its creditors. The Trustee can be reached at: Alberto Ladaga Tucuman 2166 Buenos Aires, Argentina YPF SA: Parent Firm's Union Calls Off Strike at 3 Refineries ------------------------------------------------------------ Unions have called off a strike that had been scheduled for three refineries in Spain of oil firm Repsol YPF SA, the parent company of Argentina-based YPF S.A, Madrid bureau of Dow Jones Newswires reports, citing Repsol press official. According to the report, the unions canceled the planned strike after reaching a preliminary agreement in salary negotiations with the company. The strike, the report relates, would have affected Repsol's Tarragona, Puertellano and La Coruna refineries, which usually have a combined production of about 400,000 barrels a day. About Repsol Repsol YPF, S.A. is an integrated oil and gas company engaged in all aspects of the petroleum business, including exploration, development and production of crude oil and natural gas, transportation of petroleum products, liquefied petroleum gas and natural gas, petroleum refining, petrochemical production and marketing of petroleum products, petroleum derivatives, petrochemicals and natural gas. The company operates in four segments: Exploration and Production, Refining and Marketing, Chemicals, and Gas and Electricity. About YPF SA Headquartered in Buenos Aires, Argentina, YPF S.A. is an integrated oil and gas company engaged in the exploration, development and production of oil and gas, natural gas and electricity-generation activities (upstream), the refining, marketing, transportation and distribution of oil and a range of petroleum products, petroleum derivatives, petrochemicals and liquid petroleum gas (downstream). The company is a subsidiary of Repsol YPF, S.A., a Spanish company engaged in oil exploration and refining, which holds 99.04% of its shares. Its international operations are conducted through its subsidiaries, YPF International S.A. and YPF Holdings Inc. YPF SA: S&P Withdraws 'B+' Rating at Company's Request ------------------------------------------------------ Standard & Poor's Ratings Services said that it withdrew its 'B+' ratings on Argentina-based integrated oil and gas company YPF S.A. at the company's request. Spain-based Repsol-YPF S.A. (BBB/Stable/A-2) currently controls 84.04% of YPF. Argentina-based Petersen Group (the Eskenazi family) holds about a 15.4% stake. =========== B R A Z I L =========== BANCO BRADESCO: Visanet Plans IPO in the Next 90 Days ----------------------------------------------------- Brazil-based Visanet, which is 40% controlled by Banco Bradesco S.A., is planning an initial public offering of shares on the Sao Paulo Stock Exchange (BM&FBovespa) in the next 90 days, Rogerio Jelmayer of Dow Jones Newswires reports, citing Banco bradesco Vice President Milton Vargas. "The decision to hold an IPO has been taken by the controllers," the report quoted Mr. Vargas as saying. "Over the next few days, Visanet will send the necessary documents to the Brazilian Securities and Exchange Commission." According to the report Mr. Vargas said Visanet's controllers haven't yet decided how many shares they will offer under the IPO. DJ Newswires, citing local press reports, notes Visanet's IPO could raise between BRL5 billion (US$2.33 billion) and BRL10 billion. About Visanet Headquartered in Brazil, Visanet is a credit-card networking- services provider that is 40% controlled by Bradesco and 32% by state-run Banco do Brasil SA. The Brazilian subsidiary of Banco Santander (STD), through its local ABN Banco Real unit, holds 14%, while Visa International has 10% and other investors have 4%. About Banco Bradesco Headquartered in Sao Paulo, Brazil, Banco Bradesco S.A. (NYSE: BBD) -- http://www.bradesco.com.br/-- prides itself on serving low-and medium-income individuals in Brazil since the 1960s. Bradesco is Brazil's largest private bank, with more than 3,000 banking branches, and also a leader in insurance and private pension management. Bradesco has branches throughout Brazil as well as one in New York, and Japan. Bradesco offers Internet banking, insurance, pension plans, annuities, credit card services (including football-club affinity cards for the soccer- mad population), and Internet access for customers. The bank also provides personal and commercial loans, along with leasing services. * * * As of March 24, 2009, Banco Bradesco S.A. continues to carry Moody's "Ba2" long-term foreign bank deposits and "B-" bank financial strength rating with a stable outlook. BANCO DO BRASIL: Unit to Hold IPO in the Next 90 Days ----------------------------------------------------- Brazil-based Visanet, which is 32% controlled by state-run Banco do Brasil SA, is planning an initial public offering of shares on the Sao Paulo Stock Exchange (BM&FBovespa) in the next 90 days, Rogerio Jelmayer of Dow Jones Newswires reports, citing Banco bradesco Vice President Milton Vargas. "The decision to hold an IPO has been taken by the controllers," the report quoted Mr. Vargas as saying. "Over the next few days, Visanet will send the necessary documents to the Brazilian Securities and Exchange Commission." According to the report Mr. Vargas said Visanet's controllers haven't yet decided how many shares they will offer under the IPO. DJ Newswires, citing local press reports, notes Visanet's IPO could raise between BRL5 billion (US$2.33 billion) and BRL10 billion. About Visanet Headquartered in Brazil, Visanet is a credit-card networking- services provider that is 40% controlled by Bradesco and 32% by state-run Banco do Brasil SA. The Brazilian subsidiary of Banco Santander (STD), through its local ABN Banco Real unit, holds 14%, while Visa International has 10% and other investors have 4%. About Banco do Brasil Banco do Brasil SA 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. * * * As reported by the Troubled Company Reporter-Latin America on Jan. 20, 2009, Fitch Ratings affirmed Banco do Brasil S.A.'s Individual Rating at 'C/D'. BNDES: Approves BRL665 Million Financing For Comgas SA ------------------------------------------------------ Banco Nacional de Desenvolvimento Economico e Social SA (BNDES) has approved a BRL665 million (US$310 million) financing for local gas distributor Comgas SA, Rogerio Jelmayer of Dow Jones Newswires reports. Comgas SA, the report relates, will use the credit line to finance part of its investment program in the 2009-2011 period. According to the report, the loans provided by BNDES are attractive because the bank offers lower interest rates than local private banks. The report notes BNDES loans are calculated in accordance with the government's long-term interest rate (TJLP), which is 6.25%, plus an average spread of 2%. About BNDES Banco Nacional de Desenvolvimento Economico e Social SA is Brazil's national development bank. It provides financing for projects within Brazil and plays a major role in the privatization programs undertaken by the federal government. * * * As of April 22, 2009, Banco Nacional continues to carry a Ba2 foreign long-term bank deposit rating from Moody's Investors Service. The rating was assigned in August 2007. GOL LINHAS: Fitch Downgrades Issuer Default Ratings to 'B+' ----------------------------------------------------------- Fitch Ratings has downgraded and placed on Rating Watch Negative Gol Linhas Aereas Inteligentes S.A.'s ratings: -- Foreign and Local Currency long-term Issuer Default Ratings to 'B+' from 'BB'; -- Long-term National Rating to 'BBB(bra)' from 'A+(bra); -- US$200 million perpetual notes to 'B/RR5' from 'BB; -- US$200 million senior notes due 2017 to 'B/RR5' from 'BB. The rating downgrades reflect continued deterioration of GOL's credit profile due to higher leverage levels than previously anticipated, as a result of the sharp devaluation of the Brazilian currency, and a slowdown of demand for air transportation in Brazil. The downgrade of the company's unsecured debt to 'B/RR5' was due to the subordination of the debt to secured debt that was obtained to finance aircraft. The Negative Rating Watch reflects Fitch's growing concerns about GOL's ability to improve its liquidity position in the short term through cash flow, which makes the company's debt repayment ability increasingly reliant upon banks and capital markets. As of Dec. 31, 2008, GOL had BRL7.9 billion of total adjusted debt and BRL415 million of cash and marketable securities. These numbers compare unfavorably versus BRL6.287 billion of debt and BRL1.293 billion of cash and marketable securities at the end of 2007. GOL's debt consists of off-balance debt associated with operating lease obligations (BRL4.5 billion), finance leases (BRL1.6 billion), capital market issuances (BRL896 million) and pre-delivery payment loans (BRL698 million). Total 2009 debt payments include BRL967 million of on balance sheet debt payments, including BRL698 million of PDP loans, and BRL796 million of operating lease payments. Excluding the PDP loans, the total cash payments for 2009 will be about BRL1.016 billion. GOL generated BRL682 million of EBITDAR during 2008, an increase from BRL591 million in 2007. Results for full year 2008 were positively affected by increase in yields (15%). Margins declined, however, to 10.6% during 2008 from 12% during 20017 due to higher fuel cost, lower aircraft utilization and aircraft return expenses. The spread between RASK-CASK weakened to negative BRL0.2 cents from negative BRL0.1 cents in 2007. The total adjusted net debt-to-EBITDAR ratio of GOL was 11.01 times (x) at the end of December 2008, an increase from 8.28x at the end of 2007 and 1.41x at the end of 2006. The increase in leverage was primarily due to weakening of the Brazilian real versus the U.S. dollar, which increased the Brazilian real amount of the company's dollar denominated debt, and BRL255 million of capital expenditures and BRL36 million of dividends, which resulted in a negative free cash flow of BRL125 million. GOL is expected to struggle during 2009 due to lower demand and higher industry capacity. The combination of these two factors is expected to intensify competition and should limit GOL's ability to continue to increase yields and, consequently, to improve margins and cash flow generation. To avoid further downgrades GOL will need to successfully roll over its short-term debt. The company has renegotiated its PDP financing. On March 20, 2009, it announced a capital increase of BRL203.5 million. Additional liquidity may be provided by the company's BRL345 million receivables portfolio. GOL is a low cost airline providing frequent service on routes linking the main cities of Brazil (49 destinations) and South America (10 destinations). At Dec. 31, 2008, the total fleet was 115 aircraft, of which 90 were operating leases and 25 were recorded as finance leases. By the end of 2008, the entire fleet consisted entirely of Boeing 737NGs, with an average fleet age to 6.8 years. MINERVA SA: Fitch Downgrades Issuer Default Rating to 'B' --------------------------------------------------------- Fitch Ratings has downgraded the ratings of Minerva S.A. (formerly Industria e Comercio de Carnes Minerva Ltda) and Minerva Overseas Ltd (a special-purpose vehicle wholly owned by Minerva and incorporated in the Cayman Islands): Minerva S.A. -- Local currency Issuer Default Rating (IDR) to 'B' from 'B+'; -- Foreign currency IDR to 'B' from 'B+' ; -- National rating to 'BBB-(bra)' from 'BBB(bra)'. Minerva Overseas Ltd -- US$200 million senior unsecured notes due 2017 to 'B/RR4' from 'B+/RR4'. All these ratings remain on Rating Watch Negative. The downgrade follows the significant increase in leverage in 2008 due to weak operating trends, negative operating cash flow and significant capital expenditures. Also, Fitch believes that Minerva's credit metrics will remain under pressure because of the company's large exposure to the export market, the global recession, and lack of credit available from the Brazilian government banks. The Rating Watch Negative stems from the tight liquidity available in the market and the increasing difficulty to rolling over short- term debt given export revenue declines and lower expected cash flow generation in 2009 and 2010. In addition, Minerva is increasingly vulnerable to protein substitution in the domestic market given the slowing local economy as well as weak demand and price volatility in the international market as key importers such as Russia cope with the crisis. Minerva's ratings are supported by the company's business position as the third-largest Brazilian exporter of fresh beef, its low cost structure, its increasing grade of product customization and its diversified and growing export revenue base. The ratings are constrained by the high leverage of the company, its negative free cash flow generation, significant debt maturities and commodity risk. Also considered in the ratings are the challenging situation for the industry given the global recession and lack of credit availability. Despite robust growth in both revenues and EBITDA the company has reported negative free cash flows due to growing working-capital requirements, capital expenditures and tax credit generated by exports. In 2009, Fitch expects Minerva to dramatically reduce the cash drain from operations as the company gains market share in Brazil, significantly reduces capex and improves working capital management. The company should benefit from competitors that have filed for bankruptcy which represent about 25% of the production capacity of the industry. Margins should benefit from higher capacity utilization and better supply-demand dynamics within the current cyclical cattle shortage. Minerva capital structure is aggressively leveraged with total- debt-to-EBITDA of 7.3 times (x) compared to 4.9x in 2007, after a dramatic increase in capital expenditures in 2008 to US$191 million from US$53 million in 2007 primarily on greenfield projects including the Dawn Farms joint venture. Fitch anticipates that these investments will generate very limited incremental cash flow in 2009 and 2010, so credit metrics will continue to be under pressure. At the end of December 2008, the company had US$202 million in cash on its balance sheet; therefore, net leverage was 4.9x compared to 1.5x a year earlier. Over the first nine months of 2009, liquidity should increase by approximately US$45 million from government loans recently approved which are secured by investments made in 2008. Liquidity is healthy but refinancing risk is a concern given the lack of credit and significant debt maturities of US$155 million, US$87 million and US$84 million in 2009, 2010 and 2011, respectively. New government loans to the industry and cash on hand of US$202 million mitigate this risk. However, free cash flow could continue to be negative and bond covenants might restrict further debt increases to finance capital expenditures and working capital needs. The US$93 million in loans from BNDES and Banco da Amazonia granted to Minerva in January 2009 highlight the government support to the sector which has made more than US$3.5 billion in equity investments to the industry. The ratings also reflect Minerva's exposure to the volatility of raw material costs and of domestic and international beef prices, supply and demand imbalances in the protein market due to factors such as disease and adverse weather conditions, unfavorable global economic conditions, changes in beef consumption habits, government-imposed sanitary and trade restrictions, and competitive pressures from other Brazilian or international beef producers and exporters. Some of these risks are accentuated during the current global recession, as lower disposable income and credit availability have a negative impact on consumption of highly priced proteins such as beef. The company's activities are significantly export oriented, with approximately 65% of gross revenues earned during 2008 from foreign markets, allowing Minerva to earn hard currency and mitigate transfer and convertibility risk. The export revenue base has increasingly diversified, with sales in approximately 80 countries and less concentration recently in European countries than in the past. Diversification of sales by country is important in order to mitigate risks related to the imposition of sanitary restrictions and other systemic country risks. Minerva is more exposed to sanitary restrictions than other top competitors because of its plant locations. Forty percent of current capacity is located in the States of Sao Paulo and Mato Grosso do Sul, which are Brazilian States that face more global restrictions. The company has only one plant located outside of Brazil; this plant is in Paraguay and represents only 10% of its total capacity. Minerva's favorable business position is underscored by Brazil's vast competitive advantages in cattle grazing and beef production, including cattle-raising costs that are the lowest worldwide due to favorable geographic and weather conditions, the availability and low cost of grazing land, and low cattle-feeding costs. Other inputs, such as energy and labor, are also abundant and attractively priced. These advantages highlight the rapid growth of Minerva's exports, which increased to US$800 million in 2008 from US$93 million in 2002. Product diversification is improving but continues to be concentrated in one product (fresh meat) with relatively low value added. ODEBRECHT SA: Ecuador Files Arbitration Claim Against Firm ---------------------------------------------------------- Ecuador-owned power firm Hidropastaza is seeking US$250 million arbitration claim against Norberto Odebrecht SA, for the work done by the company on the San Francisco hydroelectric plant and for the illegal raising of the price it charged for the work, Mercedes Alvaro of Dow Jones Newswires reports. The report relates the claim, which was filed at the Ambato Chamber of Commerce, is based on an audit of the plant carried out by Italian firm Eletroconsult. According to the report, Jorge Glas, president of the state-run Fondo de Solidaridad (Solidarity Fund), said that the amount would cover economic loss, money invested to repair the plant and interest, among other things. The San Francisco plant, the report recalls, was built by Norberto Odebrecht and began operations in mid-2007, but last year has been shut down for around three months because of construction problems. Another four-month shutdown is scheduled for September, DJ Newswires says. About Odebrecht Construtora Norberto Odebrecht SA is a Latin American engineering and construction company fully owned by the Odebrecht Group, one of the 10 largest Brazilian private groups. Construtora Norberto is the world's largest builder of hydroelectric plants, of sanitary and storm sewers, water treatment and desalination plants, transmission lines and aqueducts. The Group's main businesses are heavy engineering and construction based in Rio de Janeiro, Brazil, and Braskem S.A., its chemicals/petrochemicals company, based in Sao Paulo, Brazil. * * * As of May 5, 2009, the company continues to carry Standard and Poor's BB Issuer Credit ratings, and Fitch Rating's BB+ Issuer Default ratings and BB+ Senior Unsecured Debt ratings. TAM SA: Fitch Downgrades Issuer Default Ratings to 'BB-' -------------------------------------------------------- Fitch Ratings has downgraded TAM S.A's credit ratings: -- Foreign and Local Currency long-term Issuer Default Ratings to 'BB-' from 'BB'; -- US$300 million senior unsecured note due to 2017 to 'BB-' from 'BB; -- Long-term National rating to 'A-(bra)' from 'A+(bra); -- BRL500 million Debentures Issuance due 2012 to 'A-(bra)' from 'A+(bra). The Rating Outlook for the long-term corporate ratings is Negative. The downgrades reflect the deterioration in TAM's credit profile, a result of the combination of high leverage and greater use of its formerly robust but still satisfactory liquidity position to finance its business. The maintenance of the Negative Outlook reflect concern about the severity and duration of the slowdown of demand for air transportation in Brazil and the resulting impact in TAM's credit and operational metrics (load factor and yield). The company's challenge during 2009 will be to manage the fall in demand with intensified competition. Within this context, the company will also have to generated enough cash flow to support the negative impact of extraordinary capital disbursements to settle fuel hedge contracts without significantly deteriorating its liquidity position. TAM's ratings continue to reflect the company's 50% domestic market share and its 87% share of the international market (considering only Brazilian carries). The ratings also take into consideration the company's satisfactory liquidity position as an important support for the volatility in its business and a manageable debt profile during 2009. As of Dec. 31, 2008, TAM had BRL8.1 billion of total debt, comprised mainly of aircraft leases and capital market operations. The company's total adjusted debt was BRL11.1 billion. This debt includes off balance sheet operating leases of BRL3 billion. About 93% of TAM's total adjusted debt was denominated in U.S. dollars or linked to the dollar. With about 35% of its revenues tied to the dollar, the company does not hedge the currency of its debt. TAM's EBITDA grew to BRL1.613 billion during 2008 from BRL1.214 billion during 2007. The company was successful in mitigating higher oil prices during the past year and was able to increase its RASK-CASK spread to BRL1.2 cents from BRL0.9 cents in 2007. As a result, the company's EBITDAR margin increased to 15.2% from 14.9%. TAM continues to maintain a growth strategy, expecting a market recovery in 2010. As a result, the company has not revised its fleet plan and is expected to add three new aircraft in 2009, translating into an 8% increase in its capacity in the domestic market and 20% internationally. Fitch expects that in 2009 TAM will experience deterioration in operating margins due to a fall in the company's RASK. The gradual liberation in international fare prices by the Brazilian Government adds further pressure to the company's ability to sustain profitability. The efficiency in controlling costs and capital expenditures, coupled with marketing strategies to promote demand and an efficient yield management policy will be crucial to avoid losses in this scenario. Capital expenditures amounted to BRL831 million during 2008. At the end of 2008, TAM had BRL1.914 billion of cash and marketable securities and BRL928 million of on balance sheet short-term debt. TAM's liquidity position is expected to be pressured in 2009 by settlement of fuel hedge derivative contracts that totaled BRL1.2 billion at the end of 2008. In March, the company announced the renegotiation of its hedge contracts, changing the payment profile by extending some of the maturities from 2009 to 2010. Assuming an average cost of the WTI barrel at US$55 Fitch expects that TAM will incur expenses of about BRL700mm in 2009 andBRL400mm in 2010 to liquidate its hedging position. TAM S.A is a holding company that operates through its wholly owned operating subsidiaries, TAM Linhas Aereas and Mercosur. With 129 airplanes, it provides regular air transportation services in Brazil and overseas. TAM is the leader in the Brazilian market, with a local market share of about 50% and 37% of the international market. The company provides nationwide coverage, directly serving 47 destinations in Brazil and another 34 through regional alliances with other airlines. TAM flies direct to 17 international destinations and offers connections to several other international destinations through code-share agreements with Air France, LAN, TAP and Lufthansa, among others and is a member of Star Alliance. TELECOM ARGENTINA: To Hold 1Q Earnings Conference Call on May 8 --------------------------------------------------------------- Telecom Argentina S.A. will hold its first quarter 2009 earnings conference call on Friday, May 8, 2009 at 11:00 am (ET) - 12 pm (Buenos Aires Time) at http://www.videonewswire.com/event.asp? id=58443. For more information, contact: Solange Barthe Ruth Fuhrmann sbarthe@ta.telecom.com.ar or rfuhrmann@ta.telecom.com.ar (54 11) 4968 3752 (54 11) 4968 4448 About Telecom Argentina Headquartered in Buenos Aires, Telecom Argentina S.A. -- http://www.telecom.com.ar/index-flash.html-- provides telephone-related services, such as international long-distance service and data transmission and Internet services, and through its subsidiaries, wireless telecommunications services, international wholesale services and telephone directory publishing. * * * As reported in the Troubled Company reporter-Latin America on Feb. 16, 2009, Standard & Poor's Ratings Services lowered Telecom Argentina SA's foreign currency rating to B-/Stable/ and local currency rating to B/Stable/. The outlook on both ratings is stable. TELE NORTE: Begins BRL3 Billion Debenture Issue ----------------------------------------------- Tele Norte Leste Participacoes S.A. (aka Oi) started its BRL3 billion (US$1.4 billion) debenture issue, Rogerio Jelmayer of Dow Jones Newswires reports. According to the report, the debentures will be issued through two tranches: -- the first tranche, totaling BRL964 million, will mature on May 30, 2011, and the company will pay an annual interest rate of 15 basis points over the local interbank rate (DI). -- the second tranche, worth BRL2.036 billion, will mature on April 6, 2012, and Oi will pay 20 basis points over the DI. DJ Newswires notes Oi said that it will use the money raised from the debentures to pay off debt. About Tele Norte Headquartered in Rio de Janeiro, Brazil, Tele Norte Leste Participacoes S.A. (aka Oi)-- http://www.telemar.com.br-- is a provider of fixed-line telecommunications services in South America. The company markets its services under its Telemar brand name. Tele Norte's subsidiaries include Telemar Norte Leste SA; TNL PCS SA; Telemar Internet Ltda.; and Companhia AIX Participacoes SA. * * * The company continues to carry Standard and Poors's “BB+” long- term issuer credit rating. =============== C O L O M B I A =============== ECOPETROL SA: Inks Plant Construction Deal With Union Temporal -------------------------------------------------------------- Ecopetrol S.A. said it finished drilling the Gibraltar 3 well, located in the Siriri block in the Northeastern Region of Colombia. The Gibraltar well was drilled to delimit the Gibraltar gas field as well as to prove the existence of structures and reservoirs in the deeper zones of the field. The results of Gibraltar 3 well, combined with those of the Gibraltar 1 and 2 wells, guarantee the supply of the gas volumes the Company had previously (30 mcfd) and give way to the possibility of commercializing additional gas production in the future. In order to commence gas production at the Gibraltar field, Ecopetrol said it entered into an agreement with the firm Union Temporal Gas Gibraltar to carry out the design, construction, operation and maintenance of a treatment plant, with a 30 mcfd capacity, which is estimated to start operations later this year. Similarly, it signed an agreement with Gas Natural E.S.P. for the commercialization of the gas production. Consequently, Gas Natural E.S.P. has entered into an agreement with TransOriente E.S.P. for the construction of the gas pipeline that will transport gas from the Gibraltar field to Bucaramanga Refinery, where it will connect with our national gas transport system. About Ecopetrol S.A. Ecopetrol S.A. -- http://www.ecopetrol.com.co.-- is the largest company in Colombia as measured by revenue, profit, assets and shareholders' equity. The company is Colombia's only vertically integrated crude oil and natural gas company with operations in Colombia and overseas. Ecopetrol is one of the 40 largest petroleum companies in the world and one of the four principal petroleum companies in Latin America. It is majority owned by the Republic of Colombia and its shares trade on the Bolsa de Valores de Colombia S.A. (BVC) under the symbol ECOPETROL. The company divides its operations into four business segments that include exploration and production; transportation; refining; and marketing of crude oil, natural gas and refined-products. * * * As reported by the Troubled Company Reporter-Latin America on November 12, 2008, Fitch Ratings affirmed Ecopetrol S.A.'s foreign and local currency issuer default ratings at 'BB+' and 'BBB-', respectively. The Rating Outlook is Stable. ================== C O S T A R I C A ================== * COSTA RICA: Tourism Sector Drops 13% in 1Q on World Crisis ------------------------------------------------------------ Costa Rica's tourism sector saw a decline in visitors by 13% to 551.000 during the first quarter of 2009 from 634.000 visitors for the same period in 2008, due to the world economic crisis, Inside Costa Rica News reports. According to the report, Ministro de Turismo Carlos Benavides said the majority of the decrease is of American visitors that make up 54% of all tourism in Costa Rica. The report relates the situation is worrisome to tourism operators, especially hotel owners who report lower occupancy this year than over the same period last year. The Camara Costarricense de Hoteles (CCH), the report notes, said that at least 23% of the hotels polled reported empty rooms. Pablo Solano, head of the CCH, says that hotels in San Jose, Guanacaste and San Carlos (La Fortuna) are the ones reporting most affected by the downturn in tourism, the report relates. * * * The country continues to carry Moody's Ba1 foreign and local currency rating with a positive outlook. =================================== D O M I N I C A N R E P U B L I C =================================== * DOMINICAN REP: Exports & Tourist Arrivals Drop in First 2 Months ------------------------------------------------------------------ Renowned economist Henri Hebrard said Dominican exports to the United States fell 20.8% to US$464 million in the first two months of this year from US$585 million in the same period in 2008, as the result of its economic downturn, a report posted on Dominican Today’s Web site says. The report relates tourist arrivals from that country fell 8.6% to 278,620 in the first two months of 2009, down from last year’s 304,747. According to the report, Mr. Hebrard refers to the U.S. Bureau of Economic Analysis (BEA) estimate of the U.S. gross domestic product (GDP), which reveals a 6.1% deceleration of growth in the first quarter. The report notes Dominican exporters grouped in Adoexpo recently said that until the U.S. economy starts to recover, demand will remain low. ==================== E L S A L V A D O R ==================== BANCO AGRICOLA: Fitch Affirms Individual Rating at 'C/D' -------------------------------------------------------- Fitch Ratings has affirmed Banco Agricola's Individual and long- term Issuer Default Rating at 'C/D' and 'BB+', respectively. The Outlook remains Stable. Agricola's IDRs are underpinned by the bank's sound financial condition and are not constrained by El Salvador's sovereign rating. The bank's IDRs and Individual rating reflect its robust franchise, sound operating profitability and improved loss- absorption capacity (capital adequacy and reserves), but also consider the challenges from the currently adverse economic conditions and the likely negative impact of this environment on liquidity, asset quality and profitability. Adequate margins, relatively contained provisions and outstanding operating efficiency underpin Agricola's sound performance, but higher provisions and potentially tighter margins will increasingly affect profitability going forward, although Fitch expects this will remain reasonable. Weakening economic prospects are pressuring the level of delinquency (2008: 1.8%), despite growing charge-offs. A continuously enhanced risk management framework and well-balanced loan portfolio partially mitigates the expected increase in non-performing assets. External shocks and the political climate have affected system-wide liquidity to some extent, which is exacerbated by the dollarized nature of the economy. Positively, additional credit facilities at the disposal of Salvadorian banks provide some relief, as does Agricola's ample and stable customer deposit base. The equity-to-assets ratio has steadily increased and stood at 11.9% at end-2008. Moreover, declining non-earning assets have further improved capital adequacy. Agricola is El Salvador's largest bank (28% of the system's assets at end-2008). Inversiones Financieras Banco Agricola owns a 94% stake in Agricola and majority stakes in subsidiaries in the insurance, brokerage and pension fund management sectors. In turn, Bancolombia directly or indirectly owns over 98% of Agricola. Bancolombia's IDRs and Individual ratings are 'BB+' and 'C/D', respectively. Fitch affirms Banco Agricola's ratings: -- Long-term IDR at 'BB+'; -- Short-term IDR at 'B'; -- Individual at 'C/D'; -- Support at '3'; -- National long-term rating at 'AA+(slv)'; -- National short-term rating at 'F1+(slv)'. -- National-scale rating for local issues of senior unsecured debt at 'AA+(slv)'; -- National-scale rating for local issues of senior secured debt at 'AAA(slv)'. The Rating Outlook is Stable. BANCO HSBC: Fitch Affirms Individual Rating at 'C/D' ---------------------------------------------------- Fitch Ratings has affirmed Banco HSBC Salvadoreno's Individual and long-term Issuer Default rating at 'C/D' and 'BBB-', respectively. The Outlook remains Stable. HSBCSal's Support rating and IDRs are driven by Fitch's view that the bank would receive support from its highly rated parent, HSBC Holdings (IDR 'AA', Negative Outlook), if required. The Individual rating reflects its adequate loss absorption capacity, growing delinquency and the worsening economic outlook. Ample loan growth in previous years (shifting toward retail), coupled with a rapidly worsening environment, are negatively affecting HSBCSal's asset quality. Delinquency ratios have increased twofold since 2006 to 3.54% at end-2008 and the loss reserve coverage has weakened to 98% of past-due loans. Its ample portfolio of commercial loans is still to be tested under a GDP contraction in 2009. Fitch also notes some concentrations in sectors more exposed to the economic downturn. Provisions have increased markedly (2008: 2.7% of average loans; 42% of net interest income and 60% of pre-tax and pre-provisions profits), which is affecting profitability. Going forward, this trend is likely to exacerbate, as Fitch expects increasing pressures on margins, relatively high provisions and limited ability to improve revenue diversification; operating profits are expected to be low but positive. Tenor mismatches are ample, but liquidity is sound, driven by the bank's cushion of liquid assets and parent support. Capital adequacy has improved on higher earnings in previous years and a slowdown in asset growth in 2008. Given HSBC's global capital strategies, Fitch does not expect capital ratios to improve from current levels. Rather, Fitch considers that these could eventually decline in view of adverse economic conditions, but capital is expected to remain adequate and support from HSBC would be forthcoming, if required. HSBCSal is El Salvador's third largest bank with 16% of the system's assets at end-2008. It is owned by Inversiones Financieras HSBC. In November 2006, HSBC acquired Grupo Banistmo [later merged with and renamed HSBC Bank (Panama)], which in turn had acquired a controlling stake in IFHSBC in February 2006 (wholly owned at present). Fitch affirms these, with a Stable Outlook: -- Long-term IDR at 'BBB-'; -- Short-term IDR at 'F2'; -- Individual rating at 'C/D'; -- Support at '2'; -- National long-term rating at 'AAA(slv)'; -- National short-term rating at 'F1+(slv)'. SCOTIABANK EL: Fitch Affirms Individual Rating at 'C/D' ------------------------------------------------------- Fitch Ratings has affirmed Scotiabank El Salvador's Individual rating and long-term Issuer Default rating at 'C/D' and 'BBB-', respectively. The Rating Outlook remains Stable. SES' IDR and support rating reflect Fitch's view that support from its parent, Bank of Nova Scotia (Fitch IDR of 'AA-' with a Stable Outlook), would be forthcoming, if required. In turn, SES' Individual rating is driven by adequate capital and comfortable asset quality but also factors in its ample funding concentrations, tightening liquidity, low and declining earnings, and the worsening economic outlook. Fitch considers that downside risks on the Individual rating are escalating. SES' funding is more wholesale-based, and the mix has gradually weakened, a trend exacerbated by sustained loan growth and declining deposits. A high and increasing reliance on related- party funding and sizeable tenor mismatches are additional sources of liquidity risk, partially mitigated by the proven support of BNS. SES's performance has been historically constrained by relatively tight interest margins and weaker-than-peers operating efficiency. More recently, gradually growing provisions are further pressuring core earnings. The bank could be able to sustain small but positive operating profits. Unlike other banks, SES's asset quality has not been dramatically affected so far by the economic downturn, given its ample and stable share of mortgage loans, but Fitch believes this will gradually worsen. Credit costs have remained roughly unchanged, although these are likely to gradually increase, especially as the level of restructured loans is rapidly growing. Moreover, credit losses in the commercial and corporate portfolio could also be pressured. Capital levels are adequate and stable, but the portion of capital in the form of restructured loans is mounting. In view of expected loan growth and likely declining earnings, capital ratios could fall moderately. SES entered into El Salvador with a small acquisition in 1997; it became the country's fourth largest bank with the purchase of Banco de Comercio in May 2005 (16% market share by assets at end- 2008). It is the leading player in residential mortgages. Fitch affirms Scotiabank El Salvador's ratings: -- Long-term IDR at 'BBB-'; -- Short-term IDR at 'F2'; -- Individual at 'C/D'; -- Support at '2'; -- National long-term rating at 'AAA(slv)'; -- National short-term rating at 'F1+(slv)'. The Rating Outlook is Stable. =========== G U Y A N A =========== CL FIN'L: Guyana Hires Attorney to Press Claim in CLICO Bahamas --------------------------------------------------------------- The Guyanese government hired attorney John Wilson of McKinney Ban-croft & Hughes to fight court-appointed liquidator Craig 'Tony' Gomez on the matter regarding Mr.Gomez's classification of a US$34 million investment in CLICO Bahamas Limited by CLICO Life and General Insurance Company South America Limited (CLICO Guyana) as a "related party" loan, Candia Dames of the Freeport News reports. The report recalls weeks ago, not long after CLICO had been placed into liquidation, the Guyanese government had reportedly entered discussions with other Bahamian attorneys and firms about representation, but never followed through with those relationships. According to the report, the Guyana government is reportedly looking to be a part of any creditors committee that may be established. Freeport News notes Guyanese President Bharrat Jagdeo said former CLICO Guyana CEO Geeta Singh-Knight can prove that Guyana's investment was indeed a policy. "When the liquidator of CLICO Bahamas said we didn't have a policy, (and that) it was an inter- company loan, (Singh-Knight) showed us — because of her knowledge —she got the documents and made it clear that it was a policy rather than a loan," the report quoted Mr. Jagdeo as saying. "If it is classified as an inter-company loan, then in the settlement of the liabilities, it will go down the hierarchy. So first of all, from disposal of assets, they will settle policies and then whatever remains they'll settle these other transactions." On April 1, 2009, the Troubled Company Reporter-Latin America, citing Trinidad and Tobago Express, reported Mr. Gomez said in his report that CLICO Guyana and CLICO Suriname are claiming policy packages of US$34 million and US$15.5 million respectively with CLICO Bahamas. Mr. Gomez, as cited by Freeport News, said: "My preliminary review of these packages supports the view that Guyana and Suriname did conduct business with The Bahamas office of CLICO." "However, a preliminary review of the contracts forwarded to me reveals that the respective entities may have had policy contracts with their customers and then the funds were forwarded to (CLICO Bahamas), principally the Turks & Caicos branch. It appears that while the funds forwarded to The Bahamas were recorded in (the records of CLICO Bahamas,) the cash actually appeared to have flowed into the United States of America bank account directly from Guyana and Suriname." Freeport News relates Mr. Gomez said that unfortunately the contracts entered into with CLICO Bahamas do not appear to have been standard policy contracts, but in many cases could easily appear to be the transfer of funds to the Bahamas that could easily be classified as related party loans rather than policies. "I have received substantial evidence to support my view that most of the funds were received into a United States bank account," Freeport News quoted Mr. Gomez as saying. "I am continuing to examine this matter." About CL Financial According to Wikipedia, CL Financial Limited is the largest privately held conglomerate in Trinidad and Tobago and one of the largest privately held corporations in the entire Caribbean. Founded as an insurance company, Colonial Life Insurance Company (CLICO) by Cyril Duprey, it was expanded into a diversified company by his nephew, Lawrence Duprey. CL Financial is now one of the largest local conglomerates in the region, encompassing over 65 companies in 32 countries worldwide with total assets standing at roughly US$100 billion. =========== M E X I C O =========== BANCOPPEL SA: Moody's Downgrades Currency Deposit Rating to 'B2' ---------------------------------------------------------------- Moody's downgraded Bancoppel, S.A.'s long-term global local currency and foreign currency deposit ratings to B2 from Ba3. The ratings remain on review for further possible downgrade. On its Mexican National Scale, Moody's also downgraded BanCoppel's long- and short-term ratings to Ba1.mx/MX-4 from A3.mx/MX-2 and placed the long-term rating on review for further possible downgrade. Moody's also placed BanCoppel's bank financial strength rating of E+ on review for possible downgrade. Moody's noted that the rating actions were based on concerns regarding the ability and willingness of Grupo Coppel to provide extraordinary support for the bank's obligations in light of the recent payment default of Hipotecaria Crédito y Casa (rated Ca/Not Prime), a major entity of Grupo Coppel and a sister company of BanCoppel. The agency also indicated that Bancoppel's deposit ratings no longer incorporate the potential extraordinary support the bank might receive from Coppel S.A. de C.V. and therefore reflect the bank's stand-alone creditworthiness. Coppel ranks among Mexico's largest retailer store chains catering to low and medium income customers. The review for possible downgrade of the bank's BFSR was based on a weaker than expected performance of Bancoppel including very modest financial fundamentals and higher than expected credit costs in the context of a deteriorating economic environment, which may also potentially weaken the bank's financial flexibility and loss absorption capacity. Moreover, the bank's continuing net losses still reflect its start up stage. The rating review will consider the overall financial performance of the bank, focusing on profitability and management's plans and strategies to reach breakeven. The review will also consider the asset quality of BanCoppel's credit card business, its capital adequacy and its capacity to develop alternative funding sources. The last rating action on BanCoppel was on September 9, 2008 when Moody's downgraded Bancoppel's long-term global local currency deposit rating to Ba3 from Ba2. At the same time, the bank's long-term foreign currency deposit rating was downgraded to Ba3 from Ba2. On its Mexican National Scale, Moody's downgraded BanCoppel's long-term rating to A3.mx from A2.mx. The long-term Mexican National Scale rating of Ba1.mx indicates issuers or issues with below-average creditworthiness relative to other domestic issuers. The short-term Mexican National Scale rating of MX-4 indicates that the issuer has a below average ability to repay short-term senior unsecured debt obligations relative to other domestic issuers. BanCoppel is headquartered in Mexico City. As of December 2008, the bank had around Mx$2.7 billion in assets. These actions were taken: -- Long term global local currency deposits: Downgraded to B2 from Ba3, on review for possible further downgrade -- Long term foreign currency deposits: Downgraded to B2 from Ba3, on review for possible further downgrade -- Long term Mexican National Scale: Downgraded to Ba1.mx from A3.mx, on review for possible further downgrade -- Short term Mexican National Scale: Downgraded to MX-4 from MX-2 -- Bank financial strength rating: E+, placed on review for possible downgrade -- Global local currency deposits, short term: Not Prime, affirmed -- Foreign currency deposits, short term: Not Prime, affirmed CEMEX SAB: Creditors May Agree to Refinance Debt ------------------------------------------------ Cemex S.A.B de C.V may reach a refinancing deal with its creditors, Hugh Collins of Bloomberg News reports. The report relates Excelsior newspaper reported May 5 that the company is in negotiations with Banco Santander SA and Banco Bilbao Vizcaya Argentaria SA’s Bancomer unit on loans to help it cover debt obligations due this year. “Rumors of debt restructuring” are helping the stock, the report quoted Francisco Suarez, head of equity research at Mexican money manager Actinver SA, as saying. “There is optimism that Cemex will reach a deal.” As reported in the Troubled Company Reporter-Latin America on March 11, 2009, Bloomberg News said Cemex started discussions with banks to renegotiate about US$14.5 billion of debt after postponing its bond sale. Company spokesman Jorge Perez, as cited by Bloomberg News, said the US$14.5 billion is all of Cemex’s bank debt and doesn’t include any bonds. At the end of December, Cemex had total debt of US$18.8 billion, the report noted. According to Reuters, Cemex has been slammed by debt problems after its ambitious Rinker takeover in 2007, slumping sales, and losses on derivatives amid turmoil caused by the global credit crisis. About Cemex S.A.B Cemex S.A.B de C.V is the third-largest cement producer in the world based on production capacity of approximately 97 million metric tons and operates in more than 50 countries. The company is also the global leader in the ready mix concrete market with sales of over 80.5 million cubic meters, and an important global player in the aggregates business with sales of 222.7 million tons. In 2008, Cemex generated US$4.370 billion of EBITDA on US$21.8 billion of sales revenues. * * * As reported by the Troubled Company Reporter-Latin America on March 2, 2009, Standard & Poor's Ratings Services said that its 'BB+' long-term corporate credit ratings on Cemex S.A.B de C.V. and its key operating subsidiaries (Cemex Espana S.A., Cemex Mexico S.A. de C.V., and Cemex Inc.) remain on CreditWatch, where they were placed with negative implications on Jan. 21, 2009. At the same time, S&P assigned a 'BB+' rating to Cemex's intermediate-maturity notes in the amount of about US$500 million. The recovery rating is '3', indicating that lenders can expect substantial (70% to 90%) recovery in the event of a payment default. * MEXICO: Credit Suisse Analyst Forecasts 6% Decline in Economy --------------------------------------------------------------- Credit Suisse Group AG is forecasting Mexico’s economy will shrink more than it previously estimated after reports showed weaker- than-expected economic activity in the first quarter and because of the swine flu outbreak, Valerie Rota of Bloomberg News reports. According to the report, Credit Suisse Group AG economist Alonso Cervera wrote in a note that gross domestic product will decline 6% this year. The report recalls Mr. Cervera previously estimated the economy would contract 3.5% in 2009. =============== P A R A G U A Y =============== * PARAGUAY: May Sue Brazil Over Itaipu Dam Debt ----------------------------------------------- The Paraguay government is threatening to take Brazil to international courts over a US$4.19 billion debt dispute related to the Itaipu Dam, which lies on the border between the two countries, LatinFrance reports, citing Ricardo Canese, chief negotiator for Paraguay on the issue, in an interview with Brazilian daily Valor. The daily, the report relates, said the challenge is based on the fact that Brazil power distributors, Eletrosul and Furnas, have allegedly been paying Paraguay a tariff for the hydro power that was well below the rate agreed upon in documents signed in 1985 and 1986. * * * According to Moody's Website, the country continues to carries Moody's B3 foreign and local currency ratings with stable outlooks. =============================== T R I N I D A D & T O B A G O =============================== PETROTRIN: Incurs Losses Amid Drop in Oil Prices ------------------------------------------------ Petroleum Company of Trinidad and Tobago Limited (“Petrotrin”) needs global crude oil price averages of at least US$68 a barrel in order for it to "survive" as it struggles to recover from its loss-making ways of the last six months, Oscar Ramjeet of Caribbean Net News reports. The report relates Energy Minister Conrad Enill said that he has "about three or four proposals" regarding a new US$3-4 billion oil refinery targeted for Pointe-a-Pierre, close to the Petrotrin refinery complex. According to the report, Mr. Enill said the ongoing international financial crisis that triggered the drastic decline in global oil prices from its record average of US$147.25 a barrel was not the issue. Mr. Enill, as cited in the report, added there have been no new refineries built in the last 30 years and none in the Western hemisphere because of the challenges surrounding the financing and the output. Caribbean Net News, citing Petrotrin Executive Chairman Malcolm Jones, said the company went from making a profit of US$2 billion in 2007 to losing US$200 million in the last three months of 2008 alone. About Petrotrin Petroleum Company of Trinidad and Tobago Limited (“Petrotrin”) -- http://www.petrotrin.com-- is an integrated Oil and Gas Company. It is a limited liability company that is wholly owned by the Government of the Republic of Trinidad and Tobago. Its principal activities are the exploration for, development of and production of hydrocarbons and the manufacturing and marketing of petroleum products. The company was incorporated on January 21, 1993 to consolidate and operate the petroleum producing, refining and marketing assets of State-owned enterprises: Trinidad and Tobago Oil Company Limited (Trintoc) and Trinidad and Tobago Petroleum Company Limited (Trintopec). In 2000, Petrotrin acquired the assets of Texaco Inc. in the joint venture Trinmar Limited, making that entity a part of its Exploration and Production operations. *********** Monday's edition of the TCR-LA delivers a list of indicative prices for bond issues that reportedly trade well below par. Prices are obtained by TCR-LA editors from a variety of outside sources during the prior week we think are reliable. Those sources may not, however, be complete or accurate. The Monday Bond Pricing table is compiled on the Friday prior to publication. Prices reported are not intended to reflect actual trades. Prices for actual trades are probably different. Our objective is to share information, not make markets in publicly traded securities. Nothing in the TCR-LA constitutes an offer or solicitation to buy or sell any security of any kind. It is likely that some entity affiliated with a TCR-LA editor holds some position in the issuers' public debt and equity securities about which we report. Tuesday's edition of the TCR-LA features a list of companies with insolvent balance sheets obtained by our editors based on the latest balance sheets publicly available a day prior to publication. At first glance, this list may look like the definitive compilation of stocks that are ideal to sell short. Don't be fooled. Assets, for example, reported at historical cost net of depreciation may understate the true value of a firm's assets. A company may establish reserves on its balance sheet for liabilities that may never materialize. The prices at which equity securities trade in public market are determined by more than a balance sheet solvency test. A list of Meetings, Conferences and Seminars appears in each Thursday's edition of the TCR-LA. Submissions about insolvency- related conferences are encouraged. Send announcements to conferences@bankrupt.com *********** S U B S C R I P T I O N I N F O R M A T I O N Troubled Company Reporter - Latin America is a daily newsletter co-published by Bankruptcy Creditors' Service, Inc., Fairless Hills, Pennsylvania, USA, and Beard Group, Inc., Frederick, Maryland USA. Marie Therese V. Profetana, Marites O. Claro, Joy A. Agravente, Pius Xerxes V. Tovilla, Rousel Elaine C. Tumanda, Valerie C. Udtuhan, Frauline S. Abangan, and Peter A. Chapman, Editors. Copyright 2009. All rights reserved. ISSN 1529-2746. This material is copyrighted and any commercial use, resale or publication in any form (including e-mail forwarding, electronic re-mailing and photocopying) is strictly prohibited without prior written permission of the publishers. Information contained herein is obtained from sources believed to be reliable, but is not guaranteed. The TCR Latin America subscription rate is US$625 per half-year, delivered via e-mail. Additional e-mail subscriptions for members of the same firm for the term of the initial subscription or balance thereof are US$25 each. For subscription information, contact Christopher Beard at 240/629-3300. * * * End of Transmission * * *