/raid1/www/Hosts/bankrupt/TCRLA_Public/100121.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
Thursday, January 21, 2010, Vol. 11, No. 014
Headlines
A R G E N T I N A
LENGUAS MODERNAS: Creditors' Proofs of Debt Due on March 8
METROPOLIS COMPANIA: Moody's Assigns 'E+' Bank Strength Rating
B E R M U D A
CENTRAL EUROPEAN MEDIA: Sells Ukrainian Operations for US$300MM
B R A Z I L
AES CORP: Closer to Giving Up 14% Stake in Cemig
BANCO NACIONAL: May Buy Hypermarcas Stake
BANCO SANTANDER BRASIL: Will Launch Brazil Card Venture
CAMARGO CORREA: To Join Forces With Odebrecht to Build Dam
COMPANHIA ENERGETICA: AES Closer to Giving Up 14% Stake in Firm
COSAN SA: Walmart to Take Steps if Firm Returns to Blacklist
MINERVA SA: Moody's Assigns 'B3' Rating on $250 Mil. Senior Notes
MINERVA SA: Fitch Assigns 'B/RR4' Rating on $250 Mil. Senior Notes
MINERVA OVERSEAS: S&P Assigns 'B-' Rating on $250 Mil. Notes
* BRAZIL: Economy Forecasted to Grow More Than 5% in 2010
C A Y M A N I S L A N D S
ABN AMRO: Members Receive Wind-Up Report
ACADIA MASTER: Shareholders Receive Wind-Up Report
AFORISMOS INV: Members Receive Wind-Up Report
BLUEPOINT TARGETED: Shareholder Receives Wind-Up Report
DIAMOND JAUNE: Members Receive Wind-Up Report
IMOSANO FUND: Shareholder Receives Wind-Up Report
MBNA AMERICA: Members Receive Wind-Up Report
NATIONAL DEVELOPMENT: Members Receive Wind-Up Report
OCTONION I CDO: Members Receive Wind-Up Report
PA CONSULTING: Members Receive Wind-Up Report
PREMIERE FUNDING: Members Receive Wind-Up Report
ROSE BAY: Members Receive Wind-Up Report
SCP NEWPORT: Members Receive Wind-Up Report
SKYTECH-AIC AIRCRAFT: Members Receive Wind-Up Report
SOLID HOLDINGS: Members Receive Wind-Up Report
STADIA CAPITAL: Members Receive Wind-Up Report
STADIA CAPITAL: Members Receive Wind-Up Report
SUN FUNDING: Members Receive Wind-Up Report
TOB CAPITAL: Members Receive Wind-Up Report
TORUS (IG): Members Receive Wind-Up Report
TOWER HILL: Members Receive Wind-Up Report
TOWER HILL: Members Receive Wind-Up Report
TOWERLINE INVESTMENTS: Members Receive Wind-Up Report
TRIMARAN CLO: Members Receive Wind-Up Report
UNITED GLOBAL: Members Receive Wind-Up Report
VP-2 SPC I: Members Receive Wind-Up Report
VP-1 SPC II: Members Receive Wind-Up Report
VP-1 SPC I: Members Receive Wind-Up Report
VP-2 SPC II: Members Receive Wind-Up Report
VTC HOLDINGS: Members Receive Wind-Up Report
C O L O M B I A
ECOPETROL SA: Gets US$1 Billion U.S. Export-Import Loan
E C U A D O R
* ECUADOR: Gov't Sees Public Investments of US$5.88BB for 2010
G U A T E M A L A
* GUATEMALA: Economy Starting to Recover After Crisis
J A M A I C A
AIR JAMAICA: Government to Wrap Up Operations by June
AIR JAMAICA: S&P Downgrades Corporate Credit Rating to 'SD'
SUPREME VENTURES: Makes 11 Jobs Redundant at Acropolis May Pen
M E X I C O
SERVICIOS CORPORATIVOS: Fitch Assigns 'BB-/RR3' Rating on Notes
SMURFIT-STONE: Gets Nod for Smurfit Kappa Settlement
URBI DESARROLLOS: Sells US$300 Million of 10-Year Bonds
P E R U
IIRSA NORTE: Moody's Upgrades Ratings on Senior Notes From 'Ba1'
INTEROCEANICA IV: Moody's Raises Rating on Senior Notes From 'Ba1'
PERU ENHANCED: Moody's Upgrades Ratings on Senior Notes From 'Ba1'
T R I N I D A D & T O B A G O
CL FINANCIAL: Another Top Executive Resigns
X X X X X X X X
* Upcoming Meetings, Conferences and Seminars
- - - - -
=================
A R G E N T I N A
=================
LENGUAS MODERNAS: Creditors' Proofs of Debt Due on March 8
----------------------------------------------------------
The court-appointed trustee for Lenguas Modernas S.R.L.'s
bankruptcy proceedings, will be verifying creditors' proofs of
claim until March 8, 2010.
The trustee will present the validated claims in court as
individual reports on April 28, 2010. 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
June 25, 2010.
METROPOLIS COMPANIA: Moody's Assigns 'E+' Bank Strength Rating
--------------------------------------------------------------
Moody's Investors Service assigned a bank financial strength
rating of E+ (plus) to Metropolis Compania Financiera S.A. At the
same time, Moody's assigned long- and short-term global local-
currency deposit ratings of B3 and Not Prime, as well as long- and
short-term foreign-currency deposit ratings of Caa1 and Not Prime.
Moody's has also assigned a Baa1.ar local-currency and a Ba1.ar
foreign-currency deposit rating to Metropolis on the Argentine
national scale.
The outlook on all the ratings is stable.
Moody's noted that Metropolis' B3 global local currency deposit
rating does not benefit from any form of parental or systemic
support, and thus, it is also a measure of the bank's intrinsic
financial standing.
The rating agency said that the E+/B3 ratings reflect Metropolis'
very modest market share and small, niche business franchise,
which constraints earnings generation. Metropolis is primarily
focused on foreign exchange operations, and it is now expanding
into factoring services for small and medium-sized businesses,
following its acquisition of Tutelar Compania Financiera in 2008.
Metropolis' loan and deposit concentration has been somewhat
reduced, as management refocus its business target towards more
granular loans. In the meantime, however, the entity faces
transition risk, which has affected its asset quality and earnings
generation. Non-performing loans remain high, and profitability
is volatile, also reflecting market conditions and increasing
competition.
Moody's also indicated that Metropolis is challenged to enhance
its risk management framework, and corporate governance issues,
such as those that arise from its private ownership and lack of
board independence.
Metropolis Compania Financiera S.A. is headquartered in Buenos
Aires, Argentina, and it had assets of ARS71.4 million, deposits
for ARS36.3 million and equity of ARS22.7 million as of September
2009.
These ratings were assigned to Metropolis Compania Financiera S.A.
* Bank Financial Strength Rating: E+, stable outlook.
* Long- and short-term global local-currency deposit ratings: B3
and Not Prime, stable outlook.
* Long- and short-term foreign-currency deposit ratings: Caa1 and
Not Prime, stable outlook.
* Long-Term National Scale Local-Currency Deposit Rating: Baa1.ar,
stable outlook.
* Long -Term National Scale Foreign Currency Deposit Rating:
Ba1.ar, stable outlook.
=============
B E R M U D A
=============
CENTRAL EUROPEAN MEDIA: Sells Ukrainian Operations for US$300MM
---------------------------------------------------------------
Central European Media Enterprises Ltd. has entered into an
agreement with Harley Trading Limited to sell 100% of the Studio
1+1 and Kino channels for cash consideration of US$300 million
plus an estimated US$19 million to fund cash expenses of the
Studio 1+1 group between signing and closing of the transaction.
The purchaser will make a payment of US$30 million to CME on
February 1, 2010, and the balance of the purchase price will be
paid at closing. The transaction is expected to close in the
second half of April 2010.
Adrian Sarbu, President and CEO of CME, commented, "The sale of
our Ukrainian operations is the best strategic option for CME in
the current environment. It will allow us to concentrate on our
existing operations in the European Union and EU accession
countries. The sale will provide us with greater operational and
strategic flexibility, increase our liquidity and sharpen our
focus on developing our broadcasting, Internet and content
business. I look forward to continuing to work with Igor
Kolomoisky, who will remain a director and shareholder of CME."
Igor Kolomoisky, added, "I have been working with CME for three
years and I have great respect for their achievements in the
Ukrainian market. CME built a strong brand with Studio 1+1 in
Ukraine and developed a lot of talent over the last 13 years. I
will continue to develop the TV stations successfully managed by
CME in the past."
CME is a vertically integrated media company operating leading
broadcasting, internet and TV content businesses in seven Central
and Eastern European countries with an aggregate population of
approximately 97 million people. CME's television stations are
located in Bulgaria (Pro.bg and Ring.bg), Croatia (Nova TV), Czech
Republic (TV Nova, Nova Cinema, Nova Sport and MTV Czech), Romania
(PRO TV, PRO TV? International, Acasa, PRO Cinema, Sport.ro and
MTV Romania), Slovakia (TV MarkA?za, Doma), Slovenia (POP TV,
Kanal A and TV Pika) and Ukraine (Studio 1+1, Studio 1+1
International and Kino). CME is traded on the NASDAQ and the
Prague Stock Exchange under the ticker symbol "CETV."
About Central European Media
Headquartered in Bermuda, Central European Media Enterprises Ltd.
-- http://www.cetv-net.com/-- invests in, develops and operates
commercial television channels in Central and Eastern Europe. At
present, the Company has operations in Bulgaria, Croatia, the
Czech Republic, Romania, the Slovak Republic, Slovenia and
Ukraine. The Company holds its assets through a series of Dutch
and Netherlands Antilles holding companies. It has ownership
interests in license companies and operating companies in each
market in which it operates. Operations are conducted either by
the license companies themselves or by separate operating
companies. The Company generates revenues primarily through
entering into agreements with advertisers, advertising agencies
and sponsors to place advertising on air of the television
channels that it operates.
* * *
As reported in the Troubled Company Reporter-Latin America on
November 13, 2009, Standard & Poor's Ratings Services said it has
lowered its long-term corporate credit rating on Bermuda-based
emerging markets TV broadcaster Central European Media Enterprises
Ltd. to 'B-' from 'B'. The outlook is negative.
===========
B R A Z I L
===========
AES CORP: Closer to Giving Up 14% Stake in Cemig
------------------------------------------------
The AES Corporation is closer to giving up its five seats on the
14 member board of directors at major Companhia Energetica de
Minas Gerais SA (Cemig), Kenneth Rapoza at Dow Jones Newswires
reports. The report relates that if AES passes on its BRL2.1
billion (US$1.17 billion) debt owed to the National Development
Bank BNDES, associated with Cemig, conglomerate Andrade Gutierrez
will assume the AES loan, taking over the 14% stake and voting
rights on the Cemig board held by AES.
According to the report, citing Valor Economico business daily,
Andrade had indeed assumed AES's debt to BNDES and would take the
electric power company's stake in Cemig. The report notes that
Andrade Gutierrez said that the company was not commenting on the
deal.
About Companhia Energetica
Companhia Energetica de Minas Gerais a.k.a. Cemig --
http://www.cemig.com.br/-- is an electric energy utility in
Brazil. Cemig's concession area extends throughout nearly 96.7%
of Minas Gerais. Cemig owns and operates 52 power plants, of
which six are in partnership with private enterprises, relying
on a predominantly hydroelectric energy matrix. Electric energy
is produced to supply more than 17 million people living in the
state's 774 municipalities. In addition to those 52 plants,
another three are currently under construction.
Cemig is also active in several other states, through ventures
for the generation or the commercialization of energy in these
Brazilian states: in Santa Catarina (generation), Rio de Janeiro
(commercialization and generation), Espirito Santo (generation)
and Rio Grande do Sul (commercialization).
* * *
As of October 19, 2009, the company continues to carry Moody's Ba1
LC currency Issuer rating.
About AES Corporation
The AES Corporation (NYSE:AES) -- http://www.aes.com/-- is one of
the world's largest global power companies, with 2007 revenues of
US$13.6 billion. With operations in 29 countries on five
continents, AES's generation and distribution facilities have the
capacity to serve 100 million people worldwide.
* * *
As reported in the Troubled Company Reporter-Latin America on
April 7, 2009, Fitch Ratings affirmed The AES Corporation's long-
term Issuer Default Rating at 'B+' with a Stable Rating Outlook.
BANCO NACIONAL: May Buy Hypermarcas Stake
-----------------------------------------
Banco Nacional de Desenvolvimento Economico e Social SA is in
talks to buy a minority stake in Hypermarcas to strengthen the
domestic pharmaceutical industry and help the company fund
overseas takeovers, Elzio Barreto at Reuters reports, citing O
Estado de S.Paulo.
According to the report, the newspaper said that BNDESpar, the
bank's investment holding subsidiary, may buy between 10% and 30%
of Hypermarcas and spend BRL1 billion (US$563.7 million) to BRL1.5
billion. The report relates that Hypermarcas agreed to pay BRL1.3
billion in December to buy drugmaker Neo Quimica to expand further
in over-the-counter medicines. The takeover was Hypermarcas'
fifth acquisition in 2009 and its fourth in the over-the-counter
medicine sector, where drugs are sold without medical
prescription, the report notes.
"We are talking. It would make a lot of sense if BNDES could
capitalize Hypermarcas so that the company can make new
acquisitions, including takeovers abroad," the report quoted Pedro
Palmeira Filho, head of the bank's department in charge of
pharmaceuticals and chemicals, as saying.
The newspaper, the report notes, said that possible takeover
targets abroad include biotechnology companies in the United
States.
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.
* * *
Banco Nacional continues to carry a Ba2 foreign long-term bank
deposit rating from Moody's Investors Service.
BANCO SANTANDER BRASIL: Will Launch Brazil Card Venture
-------------------------------------------------------
Daniela Machado at Reuters reports that Banco Santander's Brazil
unit, Banco Santander Brasil SA, will launch a venture to process
credit card transactions as the government seeks to break a
duopoly in the industry and trim fees.
According to the report, the Brazilian bank and GetNet plans to
offer clearing and processing of debit and credit card
transactions. An unnamed source told Reuters that the venture's
operations would initially include the MasterCard brand, without
elaborating.
Reuters says that the plan would pit Banco Santander's venture
against Redecard. The report points out that the move comes as
Brazil, Latin America's most populous country, moves to heighten
competition in the US$190 billion credit card industry, where
customers and merchants complain about exorbitant costs and a
dearth of options.
About Banco Santander (Brasil)
Banco Santander Brasil SA attracts deposits and offers retail,
commercial and private banking, and asset management services.
The bank offers consumer credit, mortgage loans, lease financing,
mutual funds, insurance, commercial credit, investment banking
services, and structured finance.
* * *
As of September 3, 2009, the company continues to carry Moody's
"Ba2" Foreign LT bank Deposits rating.
CAMARGO CORREA: To Join Forces With Odebrecht to Build Dam
----------------------------------------------------------
Camargo Correa SA and Odebrecht will join forces in a bid to build
the Belo Monte dam, Kenneth Rapoza at Dow Jones Newswires reports.
The report relates that the Belo Monte dam is a proposed power
station to be built on the Xingu River in Para state in north
Brazil.
According to the report, the dam's construction costs are
projected to be BRL16 billion (US$9.03 billion). The report
relates that the environmental protection agency (Ibama) said that
early environmental permits are in their final phase of study, but
added that no date has been set for the permits to be issued.
Once those permits are issued, the government can then auction the
rights to build the power station to competing companies, the
agency added.
Dow Jones notes that Camargo Correa said that a group of
investors, including pension funds and energy companies, would
partner with the two conglomerates in a bid for Belo Monte. The
report adds that competing consortiums are also being formed and
tracking Ibama's approval of the project.
About Camargo Correa
Camargo Correa SA is one of the largest private industrial
conglomerates in Brazil. The company is a holding company with
interests in cement, engineering and construction, textiles,
footwear and sportswear manufacturing. It also owns non-
controlling equity interests in the energy, transportation
(highway concessions) and steel businesses. During the last
12 months through June 2007, Camargo Correa had net sales of
BRL9.2 billion and EBITDA of BRL1.4 billion.
* * *
As reported in the Troubled Company Reporter-Latin America on
November 26, 2009, Fitch Ratings currently rates Camargo and its
special-purpose vehicle CCSA Finance Limited:
-- Foreign currency Issuer Default Rating 'BB';
-- Local currency IDR 'BB';
COMPANHIA ENERGETICA: AES Closer to Giving Up 14% Stake in Firm
---------------------------------------------------------------
The AES Corporation is closer to giving up its five seats on the
14 member board of directors at major Companhia Energetica de
Minas Gerais SA (Cemig), Kenneth Rapoza at Dow Jones Newswires
reports. The report relates that if AES passes on its BRL2.1
billion (US$1.17 billion) debt owed to the National Development
Bank BNDES, associated with Cemig, conglomerate Andrade Gutierrez
will assume the AES loan, taking over the 14% stake and voting
rights on the Cemig board held by AES.
According to the report, citing Valor Economico business daily,
Andrade had indeed assumed AES's debt to BNDES and would take the
electric power company's stake in Cemig. The report notes that
Andrade Gutierrez said that the company was not commenting on the
deal.
About AES Corporation
The AES Corporation (NYSE:AES) -- http://www.aes.com/-- is one of
the world's largest global power companies, with 2007 revenues of
US$13.6 billion. With operations in 29 countries on five
continents, AES's generation and distribution facilities have the
capacity to serve 100 million people worldwide.
* * *
As reported in the Troubled Company Reporter-Latin America on
April 7, 2009, Fitch Ratings affirmed The AES Corporation's long-
term Issuer Default Rating at 'B+' with a Stable Rating Outlook.
About Companhia Energetica
Companhia Energetica de Minas Gerais a.k.a. Cemig --
http://www.cemig.com.br/-- is an electric energy utility in
Brazil. Cemig's concession area extends throughout nearly 96.7%
of Minas Gerais. Cemig owns and operates 52 power plants, of
which six are in partnership with private enterprises, relying
on a predominantly hydroelectric energy matrix. Electric energy
is produced to supply more than 17 million people living in the
state's 774 municipalities. In addition to those 52 plants,
another three are currently under construction.
Cemig is also active in several other states, through ventures
for the generation or the commercialization of energy in these
Brazilian states: in Santa Catarina (generation), Rio de Janeiro
(commercialization and generation), Espirito Santo (generation)
and Rio Grande do Sul (commercialization).
* * *
As of October 19, 2009, the company continues to carry Moody's Ba1
LC currency Issuer rating.
COSAN SA: Walmart to Take Steps if Firm Returns to Blacklist
------------------------------------------------------------
Fabiola Moura at Bloomberg News reports that Wal-Mart Stores Inc.
will "take the necessary measures" if Cosan SA Industria &
Comercio returns to the Brazilian government's slavery blacklist.
"If they go back to the list, we will need to talk to them again,"
the report quoted Hector Nunez, chief executive officer of
Wal-Mart Brasil, as saying.
As reported in the Troubled Company Reporter-Latin America on
January 11, 2010, Bloomberg News said that Wal-Mart Stores
suspended a supply contract with Cosan SA after the Brazilian
sugar maker was added to a government slavery "blacklist." The
report related that Cosan SA said that it won an injunction
ordering it be removed from the list. According to the report,
Walmart is the first retailer to come out with sanctions against
Cosan SA after the sugar producer was added December 31 to a
Brazilian Labor Ministry's list of companies whose workers operate
in slave-like conditions. The report noted that Walmart's local
unit said it temporarily suspended purchases of Cosan's Acucar
Uniao and Acucar da Barra sugar brands.
About Cosan SA
Headquartered in Piracicaba, Brazil, Cosan S.A. Industria e
Comercio -- http://www.cosan.com.br/en/ir/-- produces sugar and
ethanol. The company cultivates harvests and processes sugarcane,
the main raw material for sugar and ethanol manufacturing. With
17 manufacturing units and two port terminals in the city of
Santos, Cosan says it is currently the largest individual group in
the world in terms of sugarcane byproducts manufacturing. With
capacity to grind more than 40 million tonnes of sugarcane, the
group represents 12% of overall production in the mid-southern
region of the country.
* * *
As of January 12, 2010, the company continues to carry Moody's Ba3
LT Corp Family rating and Senior Unsecured debt rating. The
company also continues to carry S&P's BB- Issuer credit ratings;
and Fitch ratings' BB LT Issuer default ratings.
MINERVA SA: Moody's Assigns 'B3' Rating on $250 Mil. Senior Notes
-----------------------------------------------------------------
Moody's Investors Service assigned a B3 foreign currency rating to
Minerva S.A.'s proposed issuance of US$250 million in senior
unsecured notes due in 2020. At the same time, Minerva's B3 local
currency Corporate Family Rating and its existing senior unsecured
rating were affirmed. The rating outlook is stable.
The proposed 2020 notes, issued by Minerva Overseas II Ltd, is
unconditionally and irrevocably guaranteed by Minerva. Proceeds
from the proposed notes will be used to refinance existing short-
term debt. Moody's has reviewed preliminary draft legal
documentation for the proposed notes and the assigned ratings
assume that there will be no material variation from the drafts
reviewed and that all agreements will be legally valid, binding
and enforceable.
"Minerva's B3 rating reflects its small size, high leverage, raw
material sourcing nearly exclusively in Brazil and less
diversified product portfolio, as compared to Brazilian and global
rated peers. The rating also reflects the company's weak and
volatile funds from operations as well as its reliance on the
export market, which may experience margin pressure if the Real
remains strong" explained Moody's VP Senior Analyst, Soummo
Mukherjee.
"On the other hand, these negative factors are balanced by the
company's position as one of the largest exporters of Brazilian
beef, its ability to weather a financial and industry crisis that
caused many of its peers to go into bankruptcy in the last 18
months, as well as the benefits of operating in Brazil, which
enjoys good fundamentals in the beef industry," added Mr.
Mukherjee.
With an aggregate daily slaughter capacity of 7,300 heads of
cattle at eight beef production facilities within seven Brazilian
states and Paraguay, Minerva is smaller and less diversified in
terms of product offering, number of plants and states where it
operates, than any other rated domestic or international beef
processor. The company also relies heavily on the export market
(68% of revenues for Q3 2009), making it more vulnerable to
disruptions in the beef export markets and a stronger Real than
many of its higher rated peers. Most of its exports consist of
fresh beef sales, although the export of live cattle, which has
historically produced better margins than the fresh beef division,
is a growing segment that has accounted for more than 10% of total
sales since 2008. The more stable margin valued-added processed
products segment is still small and accounted for less than 2% of
total sales at the end of Q3 2009. Processed product sales could
grow to close to 25% of total revenues in 2011 according to
Minerva's management, as a result of the company's investments in
a joint-venture with Dawn Farm that focuses on the sale of value-
added products from beef, poultry and pork products (including
meatballs, pizza toppings, boneless chicken, ground beef and
frozen hamburgers) for the food services segment.
Minerva's leverage as measured by Total Debt to EBITDA (5.8x) and
Net Debt to EBITDA (4.0x) for the last twelve months ("LTM")
ending on September 30, 2009 is higher than most of its peers (all
ratios according to Moody's standard definitions and adjustments).
Leverage, however, could come down to the extent that the company
is successful in growing its revenues and EBITDA based on the
successful execution of the company's growth strategy and recovery
of Brazilian beef export markets in 2010, allowing the company to
increase export volumes of fresh beef and live cattle. Minerva
has traditionally been able to charge higher prices than its peers
due to the benefits of the company's international sales offices
and ability to highly customize its products depending on client
needs. Going forward, the increased capillarity of its
distribution network domestically and internationally, as well as
the contributions from its joint-venture with Dawn Farms for the
sale of higher and more stable-margin processed products, could
boost revenues and earnings.
The general corporate governance and transparency levels of
Minerva have improved since the company became a listed company
and issued its first public bonds in 2007. The company, however,
remains 68% family owned and its board of directors consists of
seven members, four of which are from the Vilela de Queiroz
family, while three are independent. The company does not
currently have a fiscal council or audit committee, although the
company's by-laws provide for a non-permanent fiscal council to be
installed at the request of the company's shareholders. The board
of directors currently has no other committees.
The proposed bond issuance of US$250 million due in 2020 would
allow Minerva's liquidity to strengthen meaningfully, since
proceeds would be used entirely to repay short-term debt.
Additionally, the company raised BRL159 million recently through
an equity offering , thus improving its cash balance to
BRL407 million as of September 30, 2009, versus total short-term
debt of BRL 417 million, of which 90% is related to trade-finance
lines that are normally rolled-over.
The proposed senior unsecured notes issued by Minerva Overseas II
Ltd, is guaranteed by Minerva S.A. and therefore rated at the same
level as Minerva's corporate family rating. Moody's expect that
senior unsecured debt will account for the bulk of the company's
debt after proceeds from the proposed issuance are used to
amortize short-term secured debt. However, if the level of
secured debt or other debt deemed to have priority over unsecured
debt (ACC/ACE, cash balances in off-shore reserve accounts related
to pre-export facilities) increases significantly, the rating of
the senior unsecured notes may come under pressure.
The stable outlook is based on the expectation that Minerva will
benefit from improved export volumes in 2010 as a result of a
global economic recovery, which will allow the company to generate
strong top-line and EBITDA growth and reduce its leverage.
Minerva's rating or outlook would likely be downgraded if its
liquidity deteriorates, if a strong Real causes operating margins
to decline sharply or if Total Debt to EBITDA climbs above 8.0
times on an LTM basis (LTM September 2009 was 5.8 times) for two
consecutive quarters. All ratios are adjusted according to
Moody's standard analytic adjustments.
The ratings or outlook could be upgraded if there is a trend
towards greater diversification of Minerva's revenue and cash flow
streams, with increased participation of processed products and
reduced concentration of its export markets. Quantitatively,
upward pressure could arise if Minerva is able to reduce Total
Debt / EBITDA (according to Moody's standard adjustments) to below
5.0 times, EBITA to Gross Interest Expense above 1.5 times and CFO
/ Net Debt above 10% on a sustainable basis.
Moody's last rating action on Minerva was on December 2nd, 2009,
when Moody's assigned first time B3 corporate family and senior
unsecured bond ratings, both with a stable outlook.
Minerva, headquartered in Barretos, Sao Paulo, is one of Brazil's
leaders in the production and sale of fresh beef, leather and live
cattle. With net revenues of BRL2.6 billion (approximately
US$1.5billion) at the end of 2009 and daily installed slaughter
capacity of 7,300 heads per day, Minerva is the third largest
Brazilian exporter of beef and beef byproducts and has eight beef
production facilities within seven Brazilian states and Paraguay.
MINERVA SA: Fitch Assigns 'B/RR4' Rating on $250 Mil. Senior Notes
------------------------------------------------------------------
Fitch Ratings has assigned a 'B/RR4' rating to Minerva's proposed
US$250 million senior unsecured notes due 2020 to be issued by
Minerva Overseas II Ltd (a special-purpose vehicle wholly-owned by
Minerva and incorporated in the Cayman Islands), which is
unconditionally guaranteed by Minerva S.A. Proceeds are expected
to be used to refinance debt maturities in 2010 and 2011. Fitch
also maintains these ratings on Minerva, which remain on Rating
Watch Negative:
Minerva S.A.
-- Local currency Issuer Default Rating 'B';
-- Foreign currency IDR 'B';
-- National rating 'BBB-(bra)'.
Minerva Overseas Ltd
-- US$200 million senior unsecured notes due 2017 'B/RR4'.
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 flexible 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. In addition, the ratings reflect the risks associated to
the appreciation in the BRL and disease outbreaks.
Minerva is more exposed to these risks than top competitors given
that exports represent about 70% of revenues and approximately 40%
of capacity is concentrated in Brazilian states that face more
sanitary restrictions. Minerva operating and financial profile
holds the potential over the next several quarters, which will
result in improved credit metrics and possibly stabilize credit
quality, although the magnitude of these improvements is
uncertain. Minerva is positioned to benefit from gains in market
share, the generation of incremental cash flow from significant
high margin green field investments made in 2008, as well as an
improving cattle cycle in Brazil and the global recovery.
Leverage Improves, Remains High:
Leverage showed slight improvement but remains high for the
ratings. The issuance of the 10-year bond would positively
improve both the liquidity and debt profile of the company. As of
September 2009, net adjusted leverage decreased to 6.1 times from
6.4x in the prior quarter (and 4.9x in 2008) driven by among other
things high capacity utilization, a favorable hedging strategy and
US$87 million equity issuance in the quarter which reduced net
debt levels. Pro forma the acquisition announced on Jan. 4, 2010
of a cattle slaughter plant (Campina Verde) with a slaughter
capacity of 700 heads per day for a total investment of about
US$27 million net leverage was 6.4x. This transaction will be
financed with 10- or 15-year loans, increase Minerva's capacity by
10% and expand its operations to the state of Minas Gerais.
Increased credit availability in Brazil has reduced somewhat
refinancing concerns and together with US$230 million cash on hand
mitigate this risk given significant debt maturities of
US$84 million, US$164 million and US$108 million in 4Q'09, 2010
and 2011, respectively. Minerva also has outstanding in-the-money
two-year American call options which could represent an
incremental US$90 million equity infusion by September 2011 and
approximately US$57 million long-term government loans to be
disbursed in 2010, which will be secured by investments made in
2008.
Ratings Remain on Watch Negative:
Fitch expects to resolve Minerva's Rating Watch Negative over the
next six to 12 months. Fitch could assign a Stable Outlook should
a reduction in net leverage materialize over the course of 2010, a
decline in the cash burn rate which totaled US$132.7 million in
the LTM ended September 2009, and liquidity improvement toward
which this issuance is an important step. A downgrade could occur
if net leverage remains at currently elevated levels, liquidity as
well as the debt profile do not improve, and the company continues
to generate negative free cash flow.
MINERVA OVERSEAS: S&P Assigns 'B-' Rating on $250 Mil. Notes
------------------------------------------------------------
Standard & Poor's Ratings Services said that it has assigned its
'B-' rating to the forthcoming $250 million senior unsecured notes
due 2020 to be issued by Minerva Overseas II Ltd., a wholly owned
subsidiary of Brazil-based beef company Minerva S.A. The notes
will be unconditionally and irrevocably guaranteed by
Minerva.
S&P has assigned the notes the same rating as Minerva's corporate
credit rating reflecting the corporate guarantee from the parent
company and the fact that Minerva's secured debt currently does
not imply significant subordination to senior unsecured
noteholders.
The ratings on Minerva reflect: the company's leveraged financial
profile; its dependence on the successful ramp-up of its
expansions and greenfield projects (including Minerva Dawn Farms)
to maintain improving cash flows; its exposure to the highly
competitive global meat industry; and its still relatively weak
(though improving) credit metrics. These negative rating factors
are partly mitigated by: Minerva's increasingly product and
geographical diversity; some strengthening of the company's
capital structure following an equity offer and the issuance of
longer-term debt; and improving market and cash flow trends.
The positive trend for beef demand and prices, a more-balanced
sales mix between export and local markets, and lower cattle cost
have resulted in stronger EBITDA in recent quarters, helping
Minerva reduce total debt-to-EBITDA to 5.9x (annualized) in third-
quarter 2009 from 11.2x in first-quarter 2009. Minerva's EBITDA
interest coverage also recovered to 1.7x in the third quarter from
nearly 1.0x at the beginning of 2009. On the other hand, the
R$160-million equity injection and current issuance of longer-term
debt will contribute to further reduce the company's interest
burden and provide it with a stronger capital structure.
Therefore, S&P assumes that the proceeds of the notes will be used
to pay down existing more-expensive bank debt. The operations of
the recently acquired Campina Verde plant and production ramp-up
at projects that started late in 2009 should also support stronger
cash flows in 2010.
As its base-case scenario, S&P assumes that Minerva will benefit
from more-stable market conditions for beef to boost revenues and
profitability, with positive effects on credit measures. As such,
S&P expects its EBITDA-to-total debt and funds from operations-to-
total debt ratios to be around 5.5x-6.0x and 10%, respectively, by
year-end 2010.
Ratings List
Minerva S.A.
Corporate credit rating B-/Stable
New Rating
Minerva Overseas II Ltd.
$250 mil sr unsec notes due 2020 B-
* BRAZIL: Economy Forecasted to Grow More Than 5% in 2010
---------------------------------------------------------
Brazil's economy is on track to grow more than 5% in 2010,
according to the most recent weekly analyst survey of the Central
Bank of Brazil. Speaking on a call with international media and
financial analysts on January 20, Central Bank Governor Henrique
Meirelles pointed to several macroeconomic indicators showing
Brazil's success navigating through the 2009 global financial
crisis.
"After several decades of low growth and macroeconomic
vulnerability, Brazil's economy is now in its strongest
macroeconomic position ever," stated Governor Meirelles. "The
sound macroeconomic policies adopted during the last years,
including firm regulatory controls, inflation targeting, a
floating exchange rate regime and a fiscal policy that enabled the
public debt-to-GDP ratio to decline during the period, enabled
Brazil to achieve strong economic fundamentals."
"Our sound macroeconomic steering through the global financial
crisis in 2009 ensured that we only briefly experienced technical
recession. This bodes well for the year ahead. Our survey of
analysts points to growth of at least 5 percent GDP for Brazil in
2010," he added.
2009 In Review
In spite of the anti-cyclical measures taken by the government
against the crisis, public net debt remained under control in
2009. The Central Bank forecasts that Brazil's net debt
represented 44.1% of GDP at the end of 2009. Foreign direct
investment (FDI) for the year 2009 reached US$ 25.9 billion.
Industrial output fell strongly due to the global crisis but
recovered quickly, demonstrating 10 consecutive months of growth
immediately after the decline. In addition, unemployment decreased
substantially in 2009 to reach the lowest levels in recent
history. According to the last Inflation Report of the Central
Bank, Brazil's economic growth forecast is 0.2% in 2009. The final
results will only be released in March 2010 by the Brazilian
Institute of Geography and Statistics (IBGE).
2010 Forecasts
For 2010, Governor Meirelles stated that Brazil is already on the
path of strong growth. The industrial output is expected to
increase by 8% according to market projections. The public net
debt is expected to continue its downward trend to reach 43% by
year-end 2010 and 41% by year-end 2011. Foreign direct investment
is forecasted to reach US$ 45 billion.
The Secretariat for Social Communication (SECOM) of the Presidency
of Brazil is responsible for coordinating the public relations
activities for the government of Brazil.
==========================
C A Y M A N I S L A N D S
==========================
ABN AMRO: Members Receive Wind-Up Report
----------------------------------------
The members of ABN AMRO Services Cayman Limited received, on
December 29, 2009, the liquidator?s report on the company?s wind-
up proceedings and property disposal.
The company?s liquidator is:
Victor Murray
c/o Maples Finance Limited
PO Box 1093, Boundary Hall
Grand Cayman KY1-1102, Cayman Islands
ACADIA MASTER: Shareholders Receive Wind-Up Report
--------------------------------------------------
The shareholders of Acadia Master Fund II, Ltd received, on
December 30, 2009, the liquidator?s report on the company?s wind-
up proceedings and property disposal.
The company?s liquidator is:
Graham Robinson
Telephone: (345) 949-7576
Facsimile: (345) 949-8295
P. O. Box 897, One Capital Place
George Town, Grand Cayman KY1-1103
Cayman Islands
AFORISMOS INV: Members Receive Wind-Up Report
---------------------------------------------
The members of Aforismos Inv. Ltd received, on December 16, 2009,
the liquidator?s report on the company?s wind-up proceedings and
property disposal.
The company?s liquidator is:
Buchanan Limited
P.O. Box 1170, George Town, Grand Cayman
BLUEPOINT TARGETED: Shareholder Receives Wind-Up Report
-------------------------------------------------------
The shareholder of Bluepoint Targeted Return Volatility Arbitrage
Fund SPC received, on December 17, 2009, the liquidator?s report
on the company?s wind-up proceedings and property disposal.
The company?s liquidator is:
K. D. Blake
c/o Gerhard Albertyn
Telephone: 345-914-4395
Facsimile: 345-949-7164
P.O. Box 493, Grand Cayman KY1-1106
Cayman Islands
Telephone: 345-949-4800
Facsimile: 345-949-7164
DIAMOND JAUNE: Members Receive Wind-Up Report
---------------------------------------------
The members of Diamond Jaune Limited received, on December 16,
2009, the liquidator?s report on the company?s wind-up proceedings
and property disposal.
The company?s liquidator is:
Buchanan Limited
P.O. Box 1170, George Town, Grand Cayman
IMOSANO FUND: Shareholder Receives Wind-Up Report
-------------------------------------------------
The shareholder of Imosano Fund received, on December 17, 2009,
the liquidator?s report on the company?s wind-up proceedings and
property disposal.
The company?s liquidator is:
Keith Blake
c/o Gerhard Albertyn
Telephone: 345-914-4395
Facsimile: 345-949-7164
P.O. Box 493, Grand Cayman KY1-1106
Cayman Islands
Telephone: 345-949-4800
Facsimile: 345-949-7164
MBNA AMERICA: Members Receive Wind-Up Report
--------------------------------------------
The members of MBNA America European Structured Offerings No.1
received, on December 29, 2009, the liquidator?s report on the
company?s wind-up proceedings and property disposal.
The company?s liquidator is:
Jess Shakespeare
c/o Maples Finance Limited
PO Box 1093, Boundary Hall
Grand Cayman KY1-1102, Cayman Islands
NATIONAL DEVELOPMENT: Members Receive Wind-Up Report
----------------------------------------------------
The members of National Development Company received, on
December 29, 2009, the liquidator?s report on the company?s wind-
up proceedings and property disposal.
The company?s liquidator is:
Victor Murray
c/o Maples Finance Limited
PO Box 1093, Boundary Hall
Grand Cayman KY1-1102, Cayman Islands
OCTONION I CDO: Members Receive Wind-Up Report
----------------------------------------------
The members of Octonion I CDO, Ltd. received, on December 29,
2009, the liquidator?s report on the company?s wind-up proceedings
and property disposal.
The company?s liquidator is:
Jess Shakespeare
c/o Maples Finance Limited
PO Box 1093, Boundary Hall
Grand Cayman KY1-1102, Cayman Islands
PA CONSULTING: Members Receive Wind-Up Report
---------------------------------------------
The members of PA Consulting (Cayman Islands) Limited received, on
December 29, 2009, the liquidator?s report on the company?s wind-
up proceedings and property disposal.
The company?s liquidator is:
Victor Murray
c/o Maples Finance Limited
PO Box 1093, Boundary Hall
Grand Cayman KY1-1102, Cayman Islands
PREMIERE FUNDING: Members Receive Wind-Up Report
------------------------------------------------
The members of Premiere Funding International received, on
December 30, 2009, the liquidator?s report on the company?s wind-
up proceedings and property disposal.
The company?s liquidator is:
Victor Murray
c/o Maples Finance Limited
PO Box 1093, Boundary Hall
Grand Cayman KY1-1102, Cayman Islands
ROSE BAY: Members Receive Wind-Up Report
----------------------------------------
The members of Rose Bay Limited received, on December 16, 2009,
the liquidator?s report on the company?s wind-up proceedings and
property disposal.
The company?s liquidator is:
Buchanan Limited
P.O. Box 1170, George Town, Grand Cayman
SCP NEWPORT: Members Receive Wind-Up Report
-------------------------------------------
The members of SCP Newport Fund, Ltd. received, on December 29,
2009, the liquidator?s report on the company?s wind-up proceedings
and property disposal.
The company?s liquidator is:
Ogier
c/o Jonathan McLean
Telephone: (345) 815 1805
Facsimile: (345) 949 1986
SKYTECH-AIC AIRCRAFT: Members Receive Wind-Up Report
----------------------------------------------------
The members of Skytech-AIC Aircraft Fund Limited received, on
December 29, 2009, the liquidator?s report on the company?s wind-
up proceedings and property disposal.
The company?s liquidator is:
Victor Murray
c/o Maples Finance Limited
PO Box 1093, Boundary Hall
Grand Cayman KY1-1102, Cayman Islands
SOLID HOLDINGS: Members Receive Wind-Up Report
----------------------------------------------
The members of Solid Holdings Limited received, on December 16,
2009, the liquidator?s report on the company?s wind-up proceedings
and property disposal.
The company?s liquidator is:
Buchanan Limited
P.O. Box 1170, George Town, Grand Cayman
STADIA CAPITAL: Members Receive Wind-Up Report
----------------------------------------------
The members of Stadia Capital Master Fund, Ltd. received, on
December 30, 2009, the liquidator?s report on the company?s wind-
up proceedings and property disposal.
The company?s liquidator is:
Victor Murray
c/o Maples Finance Limited
PO Box 1093, Boundary Hall
Grand Cayman KY1-1102, Cayman Islands
STADIA CAPITAL: Members Receive Wind-Up Report
----------------------------------------------
The members of Stadia Capital Limited received, on December 30,
2009, the liquidator?s report on the company?s wind-up proceedings
and property disposal.
The company?s liquidator is:
Victor Murray
c/o Maples Finance Limited
PO Box 1093, Boundary Hall
Grand Cayman KY1-1102, Cayman Islands
SUN FUNDING: Members Receive Wind-Up Report
-------------------------------------------
The members of Sun Funding Limited received, on December 28, 2009,
the liquidator?s report on the company?s wind-up proceedings and
property disposal.
The company?s liquidator is:
Jess Shakespeare
c/o Maples Finance Limited
PO Box 1093, Boundary Hall
Grand Cayman KY1-1102, Cayman Islands
TOB CAPITAL: Members Receive Wind-Up Report
-------------------------------------------
The members of TOB Capital Amazon, Ltd. received, on December 29,
2009, the liquidator?s report on the company?s wind-up proceedings
and property disposal.
The company?s liquidator is:
Victor Murray
c/o Maples Finance Limited
PO Box 1093, Boundary Hall
Grand Cayman KY1-1102, Cayman Islands
TORUS (IG): Members Receive Wind-Up Report
------------------------------------------
The members of Torus (IG) II-D Limited received, on December 30,
2009, the liquidator?s report on the company?s wind-up proceedings
and property disposal.
The company?s liquidator is:
Victor Murray
c/o Maples Finance Limited
PO Box 1093, Boundary Hall
Grand Cayman KY1-1102, Cayman Islands
TOWER HILL: Members Receive Wind-Up Report
------------------------------------------
The members of Tower Hill CDO, Ltd. received, on December 29,
2009, the liquidator?s report on the company?s wind-up proceedings
and property disposal.
The company?s liquidator is:
Victor Murray
c/o Maples Finance Limited
PO Box 1093, Boundary Hall
Grand Cayman KY1-1102, Cayman Islands
TOWER HILL: Members Receive Wind-Up Report
------------------------------------------
The members of Tower Hill CDO II, Ltd. received, on December 30,
2009, the liquidator?s report on the company?s wind-up proceedings
and property disposal.
The company?s liquidator is:
Victor Murray
c/o Maples Finance Limited
PO Box 1093, Boundary Hall
Grand Cayman KY1-1102, Cayman Islands
TOWERLINE INVESTMENTS: Members Receive Wind-Up Report
-----------------------------------------------------
The members of Towerline Investments Limited received, on
December 16, 2009, the liquidator?s report on the company?s wind-
up proceedings and property disposal.
The company?s liquidator is:
Buchanan Limited
P.O. Box 1170, George Town, Grand Cayman
TRIMARAN CLO: Members Receive Wind-Up Report
--------------------------------------------
The members of Trimaran CLO VIII Ltd. received, on December 29,
2009, the liquidator?s report on the company?s wind-up proceedings
and property disposal.
The company?s liquidator is:
Jess Shakespeare
c/o Maples Finance Limited
PO Box 1093, Boundary Hall
Grand Cayman KY1-1102, Cayman Islands
UNITED GLOBAL: Members Receive Wind-Up Report
---------------------------------------------
The members of United Global Investments Grade CDO II Limited
received, on December 29, 2009, the liquidator?s report on the
company?s wind-up proceedings and property disposal.
The company?s liquidator is:
Victor Murray
c/o Maples Finance Limited
PO Box 1093, Boundary Hall
Grand Cayman KY1-1102, Cayman Islands
VP-2 SPC I: Members Receive Wind-Up Report
------------------------------------------
The members of VP-2 SPC I received, on December 29, 2009, the
liquidator?s report on the company?s wind-up proceedings and
property disposal.
The company?s liquidator is:
Jess Shakespeare
c/o Maples Finance Limited
PO Box 1093, Boundary Hall
Grand Cayman KY1-1102, Cayman Islands
VP-1 SPC II: Members Receive Wind-Up Report
-------------------------------------------
The members of VP-1 SPC II received, on December 29, 2009, the
liquidator?s report on the company?s wind-up proceedings and
property disposal.
The company?s liquidator is:
Jess Shakespeare
c/o Maples Finance Limited
PO Box 1093, Boundary Hall
Grand Cayman KY1-1102, Cayman Islands
VP-1 SPC I: Members Receive Wind-Up Report
------------------------------------------
The members of VP-1 SPC I received, on December 29, 2009, the
liquidator?s report on the company?s wind-up proceedings and
property disposal.
The company?s liquidator is:
Jess Shakespeare
c/o Maples Finance Limited
PO Box 1093, Boundary Hall
Grand Cayman KY1-1102, Cayman Islands
VP-2 SPC II: Members Receive Wind-Up Report
-------------------------------------------
The members of VP-2 SPC II received, on December 29, 2009, the
liquidator?s report on the company?s wind-up proceedings and
property disposal.
The company?s liquidator is:
Jess Shakespeare
c/o Maples Finance Limited
PO Box 1093, Boundary Hall
Grand Cayman KY1-1102, Cayman Islands
VTC HOLDINGS: Members Receive Wind-Up Report
--------------------------------------------
The members of VTC Holdings received, on December 22, 2009, the
liquidator?s report on the company?s wind-up proceedings and
property disposal.
Christopher D. Johnson is the company?s liquidator.
===============
C O L O M B I A
===============
ECOPETROL SA: Gets US$1 Billion U.S. Export-Import Loan
-------------------------------------------------------
Heather Walsh and Mark Drajem at Bloomberg News report that
Ecopetrol SA received US$1 billion in preliminary financing from
the U.S. Export-Import Bank as the company seeks to almost double
output. The report relates that Ecopetrol will use the loans to
buy goods and services from U.S. businesses to develop oil and gas
reserves and upgrade refineries.
According to the report, oil output at Ecopetrol will almost
double to 1 million barrels daily by 2015 as the company drills
more wells in Colombia and neighboring South American nations.
The company, the report notes, will boost spending by 11% to
US$6.9 billion this year by tapping funds from banks, bonds and
possible asset sales.
"Ecopetrol is being aggressive in exploration and production," the
report quoted David Aldana, an analyst at Bogota-based brokerage
Ultrabursatiles SA, as saying. "They are getting an early start
on financing," he added.
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. under the symbol ECOPETROL. Colombia owns 90% of
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 in the Troubled Company Reporter-Latin America on
July 15, 2009, Fitch Ratings assigned a 'BB+' rating to Ecopetrol
S.A.'s proposed issuance of at least US$1 billion senior unsecured
notes due 2019. Proceeds will be used for investments and general
corporate purposes.
According to Moody's Investors Service, Venezuela continues to
carry a B2 foreign currency rating and a B1 local currency rating
with stable outlook.
As reported in the Troubled Company Reporter-Latin America on
September 7, 2009, Fitch Ratings affirmed Colombia's sovereign
ratings:
-- Long-term foreign currency Issuer Default Rating at 'BB+';
-- Short-term foreign currency IDR at 'B';
-- Long-term local currency IDR at 'BBB-';
-- Outstanding senior unsecured debt at 'BB+';
-- Country ceiling at 'BBB-'.
=============
E C U A D O R
=============
* ECUADOR: Gov't Sees Public Investments of US$5.88BB for 2010
--------------------------------------------------------------
Ecuador's government expects public-sector investments to total
US$5.88 billion during 2010, Mercedes Alvaro at Dow Jones
Newswires reports, citing National Planning Secretary Rene
Ramirez.
According to the report, Mr. Ramirez said that the resources for
the forecasted investment will come from taxes, oil revenues,
external financing from friendly countries, and other sources.
The report, citing an official data, notes in 2009 the government
invested around US$5.07 billion, especially in strategic sectors
like oil, electricity, transport, and communications.
Dow Jones notes that the data for 2009 and 2010 includes expected
investments in state-owned company Petroecuador.
Mr. Ramirez, the report adds, said the public sector spending has
cut the unemployment rate in Ecuador, and without public
investment the unemployment rate would have been around 15%.
=================
G U A T E M A L A
=================
* GUATEMALA: Economy Starting to Recover After Crisis
-----------------------------------------------------
The Executive Board of the International Monetary Fund concluded
the Article IV consultation with Guatemala.
Background
The Guatemalan economy was negatively affected by the global
crisis, but there are signs that the economy is beginning to
recover. After growing 5.8% during 2006?07, on average, economic
growth decelerated to 4.0% in 2008 and continued to slow down in
2009. The global crisis affected the Guatemalan economy through a
decline in exports, remittances, tourism receipts, and net private
capital inflows. Annual inflation fell to -0.6% in October, from
9.4% at end-2008, reflecting weak demand and the decline in
commodity prices. Despite the external shock, domestic and
external stability have been preserved and the authorities are
treating an 18-month Stand-By Arrangement as precautionary.
The authorities' economic policies in 2009 have aimed at
safeguarding macroeconomic stability and mitigating the impact of
the global crisis. The authorities' strategy has consisted in
adopting moderately countercyclical policies, maintaining exchange
rate flexibility, advancing reforms to further strengthen the
financial sector, and refocusing public expenditures toward social
and infrastructure spending (as set out in the National Program of
Emergency and Economic Recovery).
Fiscal policy has struck a reasonable balance between supporting
demand and preserving public debt sustainability. The fiscal
deficit of the central government reached 1.4% of gross domestic
product (GDP) in January?September of 2009 due to a decline in
revenues of about 7.5% and an increase in spending (mainly social
and infrastructure expenditure). The government's financing
requirements were met through domestic bond issuance, use of
government deposits at the central bank, and external loans from
multilaterals. At end-2009, the central government deficit is
expected to reach 3.4 % of GDP, up from 1.6% of GDP in 2008.
Monetary conditions were eased gradually in 2009 to support the
economic recovery and avoid disorderly adjustments in the exchange
rate. As inflationary pressures eased, the central bank reduced
its policy interest rate by 275 basis points to 4.50% (7.25% at
end-2008). The nominal exchange rate has depreciated by 6 1/2%
since end-2008, contributing to cushion the impact of the global
crisis. The central bank has intervened occasionally to smooth
exchange rate volatility.
Despite the economic slowdown, the financial sector has remained
sound. In the face of the global crisis, several measures were
adopted to reduce the risks to the financial system, including
continuous onsite supervision, temporary and enhanced liquidity
provisioning mechanisms, and tighter provisioning requirements.
While nonperforming loans have risen and profitability declined,
liquidity and solvency ratios have remained adequate. As banks'
deposits are growing and credit is stagnant, overall liquidity is
ample, inducing banks to repay foreign credit lines.
Executive Board Assessment
Executive Directors commended the authorities for their strong
performance under the Fund-supported program, which has helped
preserve macroeconomic stability and mitigate the impact of the
global crisis. Directors welcomed the prospect of a gradual
recovery and the declining downside risks as global financial
conditions stabilize. They noted nevertheless that Guatemala's
near-term outlook is subject to the pace of recovery in the United
States, calling for continued vigilance. Over the longer term,
raising growth and reducing poverty while safeguarding fiscal
sustainability require a comprehensive strategy, including
measures to raise revenues and structural reforms aimed at
enhancing the business environment.
Directors emphasized that fiscal policy should continue to strike
a balance between supporting domestic demand and keeping public
debt dynamics in check. They endorsed the authorities' deficit
target of 3.1 % of GDP for 2010 and called on them to continue
working with Congress to ensure prompt approval of a law to
finance the expenditure plans. To stabilize the public debt-to-
GDP ratio and to address long-standing weaknesses in education,
health, security, and infrastructure, it will be important to
strengthen tax administration and implement a comprehensive
package of revenue-enhancing measures.
Directors supported the gradual easing of monetary policy. They
encouraged the authorities to remain vigilant in their conduct of
monetary policy, standing ready to adjust the policy rate as
needed, and to continue improving communications with the market
in order to anchor better inflation expectations. Directors
stressed the need to strengthen the interest rate channel of
monetary transmission, by further developing public and private
securities markets and enhancing monetary operations.
Directors welcomed the commitment to a flexible exchange rate,
pointing to its crucial role in cushioning the impact of external
shocks and strengthening the credibility of the inflation-
targeting framework. They noted the staff's assessment that the
real effective exchange rate may be somewhat overvalued, and
supported the authorities' intention to limit intervention in the
foreign exchange market to smoothing out excessive volatility,
allowing exchange rate movements to be driven by fundamentals.
Directors encouraged the authorities to press ahead with
structural reforms aimed at improving external competitiveness.
Directors emphasized that advancing the banking sector reform
agenda remains a high priority. Recent efforts to strengthen
supervision and regulation of the financial sector have
contributed to its resilience in the face of the global crisis.
Congressional approval and decisive implementation of the proposed
amendments to the banking law would help reduce risks from
offshore operations and connected lending, enhance the enforcement
power of supervisors, and improve bank resolution procedures.
Directors welcomed plans to implement regulations on liquidity and
foreign credit management in early 2010.
=============
J A M A I C A
=============
AIR JAMAICA: Government to Wrap Up Operations by June
-----------------------------------------------------
The Jamaican government has committed to wrapping up the
operations of Air Jamaica Limited by June, if a deal with Trinidad
and Tobago to take the loss making airline falls through,
RadioJamaica reports.
According to the report, the administration revealed its intention
to initiate liquidation of the airline by June in the Letter of
Intent sent off to the International Monetary Fund. The report
relates that talks are ongoing with the Trinidad state-owned
Caribbean Airlines to take Air Jamaica of government books.
The report notes that a deal was expected to be signed over the
past weekend to that end, but it never materialized. The report
points out that rumor has emerged that there were some sticking
points in the negotiation which prevented a final agreement on the
divestment of Air Jamaica to Caribbean Airlines. However, the
report relates, there is still hope that the airline will go to
the Trinidadians before the end of January. The government is
spending JM$27 billion in redundancy, aircraft lease and other
payments, the report adds.
As reported in the Troubled Company Reporter-Latin America on
January 19, 2010, RadioJamaica said that the National Democratic
Movement is calling on the Jamaican government to immediate
disclose to the public, the details of the pending sale of Air
Jamaica Limited to Trinidad and Tobago's Caribbean Airlines. The
report related that NDM General Secretary, Michael Williams, said
that the party is concerned that Air Jamaica may be sold without
public knowledge and at a ridiculous price. The government needs
to clarify several issues about the sale of the national airline,
he added.
About Air Jamaica
Headquartered in Kingston, Jamaica, Air Jamaica Limited --
http://www.airjamaica.com/-- was founded in 1969. It flies
passengers and cargo to almost 30 destinations in the Caribbean,
Europe, and North America. Air Jamaica offers vacation packages
through Air Jamaica Vacations. The company closed its intra-
island services unit, Air Jamaica Express, in October 2005. The
Jamaican government owned 25% of the company after it went private
in 1994. However, in late 2004, the government assumed full
ownership of the airline after an investor group turned over its
75% stake. The Jamaican government does not plan to own Air
Jamaica permanently.
* * *
As reported in the Troubled Company Reporter-Latin America on
November 5, 2009, Standard & Poor's Ratings Services said that it
lowered its long-term corporate credit rating on Air Jamaica Ltd.
to 'CCC' from 'CCC+'. The outlook is negative.
AIR JAMAICA: S&P Downgrades Corporate Credit Rating to 'SD'
-----------------------------------------------------------
Standard & Poor's Ratings Services lowered its long-term corporate
credit rating on Jamaican national airline Air Jamaica Ltd. to
'SD' from 'CCC'. At the same time, S&P is affirming its 'CCC'
rating on its notes due 2015 and 2027. S&P assesses Air Jamaica's
stand-alone credit profile at 'B-'.
"Jamaica has announced a domestic debt exchange program for all
categories of the Jamaican domestic debt except Treasury Bills.
As a result, S&P has revised its sovereign credit ratings on
Jamaica to 'SD' from 'CCC/C'. S&P's long-term corporate credit
rating on Air Jamaica is aligned with its long-term foreign
currency sovereign credit rating on Jamaica, given the
government's unconditional guarantee of both principal and
interest payments on the airline's notes," said Standard & Poor's
credit analyst Carolina Duran.
Air Jamaica is a wholly owned subsidiary of Air Jamaica Holdings
Ltd., which is also incorporated in Jamaica. The Jamaican
government is currently seeking to divest itself of the airline.
S&P is closely reviewing the possible privatization of Air Jamaica
and its potential impact on the ratings.
In accordance with S&P's criteria for government-related entities,
its ratings are based on its view of Air Jamaica's: "limited
importance" to the government, as its business could easily be
undertaken by a private sector entity or another larger GRE if the
airline were to cease to exist; and the company's "limited" link
with the government due to the ongoing privatization efforts and
expected significant reduction in government ownership.
"Any rating action on the sovereign would affect the ratings on
Air Jamaica. Overall, the ongoing sovereign domestic efforts and
multilateral support for Jamaica (including an expected IMF stand-
by program of $1.25 billion) should help the government of Jamaica
manage its long-standing fiscal and structural problems.
Therefore, S&P expects to assign a 'B-' sovereign credit rating to
Jamaica and a 'B-' debt rating to its new bonds upon the
completion of the debt restructuring and issuance of the new
bonds, scheduled for Feb. 16, 2010. In this context, Air
Jamaica's CCR would also be raised to 'B-'," Ms. Duran added.
SUPREME VENTURES: Makes 11 Jobs Redundant at Acropolis May Pen
--------------------------------------------------------------
Supreme Ventures Limited will have a restructuring exercise at its
Clarendon-based gaming lounge, RadioJamaica reports. The report
relates that 11 people will lose their jobs at the Acropolis May
Pen under Supreme Venture's redundancy exercise.
According to the report, Supreme Ventures said that 37 employees
at the gaming lounge will be retained or re-deployed to other
areas within its operations.
The company, the report notes, explained that the exercise will
realize savings in energy utilization and a reduction in non-
productive hours and is aimed at improving efficiencies in its
operations and by extension its profitability.
RadioJamaica says that starting January 20, the lounge will be
open Wednesdays to Sundays from 3pm to 11pm and will be closed on
Mondays and Tuesdays.
About Supreme Ventures
Supreme Ventures Ltd. is a locally owned company and was formed in
1995 by the late Peter Stewart, Paul Hoo and Ian Levy. On
January 1, 2007, a new company -- Supreme Ventures Lotteries
Limited -- was formed and the licenses for all the lottery game
brands were transferred to that entity.
===========
M E X I C O
===========
SERVICIOS CORPORATIVOS: Fitch Assigns 'BB-/RR3' Rating on Notes
---------------------------------------------------------------
Fitch Ratings has assigned a 'BB-/RR3' rating to Servicios
Corporativos Javer, S.A.P.I. de C.V. proposed add-on issuance of
up to US$30 million senior unsecured notes due 2014. These notes
are an additional offering to the US$180 million 13.0% senior
unsecured notes due 2014. Proceeds from the proposed issuance
will be applied to debt repayment and for general corporate
purposes.
Fitch currently rates Javer:
-- Local currency Issuer Default Rating at 'B+';
-- Foreign currency IDR at 'B+'.
The Rating Outlook is Stable.
The ratings are based on Javer's important market position in the
Mexican state of Nuevo Leon; geographic and product
diversification; significant land reserve and its good financial
profile. On the other hand, the ratings are constrained by a
challenging operating environment, high dependency on financing of
government-related mortgage funding of low-income homes and
important working capital requirements related to the company's
operation. The 'BB-/RR3' rating to the proposed senior notes
reflects good recovery prospects in the range of 50%-70% given
default.
In 2009, the company adopted in advance the Mexican Accounting
Standards Board rule 'INIF 14: Construction Contracts, Sale of
Real Estate and Rendering of Related Services'. With this
adoption, Javer ceased to use the percentage of completion method
for revenue recognition and moved towards recognizing revenues
when the contract for the sale of a housing unit is notarized and
actual, resulting in the legal title passing to the buyer. INIF
14 required Javer to adopt its provisions retroactively, as a
result the company's Financial Statements for 2006, 2007 and 2008
have been restated for comparative purposes.
In Fitch's opinion, Javer's geographic diversification strategy,
which enlarged its operating scope to four Mexican states (Nuevo
Leon, Aguascalientes, Jalisco and Tamaulipas) has allowed the
company to gradually diminish its sales concentration in Nuevo
Leon, which provides flexibility in the event of adverse regional
events. Despite the aforementioned, a high concentration in
construction and sales is still present in the state of Nuevo
Leon, which at 2008 year-end represented approximately 80% of
units sold and 75% of total revenues. Conversely, the operating
diversification towards different customer segments -- low-income,
middle-income and residential -- substantially mitigates the
inherent risks of commercializing one type of product. However, a
high dependence on the sector lender Infonavit (the major
Institute to grant mortgage loans for the low-income housing
segment) is observed within the home sales mix, hovering at around
85%.
At Sept. 30, 2009, Javer maintained an important land bank
representing around six years of operations, which in Fitch's
view, is high in relation to the current volume of homes sold.
The company manages two acquisition schemes, direct land purchase
and joint-agreements (off-balance), each representing about 50% of
the company's land bank. Fitch believes the joint-agreements
broaden the company's leeway by reducing working capital needs,
reducing risks related to property ownership and allowing for
higher disposal of free cash flow for other purposes.
Considering the information required with the new INIF 14, the
company has shown sustained growth during the last three years in
terms of number of houses sold, which increased from 6,417 in 2006
to 13,904 at year-end 2008. This growth resulted in important
revenue and operating EBITDA increases during the same period of
real compounded annual growth rates of 46.7% and 84.9%,
respectively. EBITDA margins have shown an improvement, moving
from 15.5% in 2006 to 24.6% in 2008, which reflects management's
strategy by catering to different market segments, a higher
participation of commercial lots sales, and a strict control over
costs and expenses. Fitch's expectation points to lower revenue
growth rates and pressure on margins in relation to historical
levels, given the company's strategy to target its sales primarily
to the housing segments of lesser value.
During the 2006-2008 periods (information with new INIF 14),
interest coverage and debt to EBITDA ratios showed a positive
trend, moving from 1.9 times to 4.3x, and from 5.1x to 2.0x,
respectively. For the last 12 months ended Sept. 30, 2009, the
interest coverage ratio decreased to 3.6x as a result of an
increase in interest expenses due to higher average debt along
with a stable EBITDA. On the other hand, the debt to EBITDA ratio
was 2.4x. Fitch estimates that this indicator will remain around
the same level by year-end and expects that this ratio will
gradually strengthen during 2010, which, if not achieved could
affect the current ratings.
As of Sept. 30, 2009, the company had total debt of
MXP$2,811 million, an increase of 30% compared to the same date in
2008 as a result of higher working capital needs. At the same
date, Javer had a sound debt profile, currently being 90% long-
term, which on a pro-forma basis will be almost 100% long-term
incorporating the proposed add-on issuance. Javer's liquidity is
adequate with cash and cash equivalents of MXP$528 million at
Sept. 30, 2009.
Javer is a leading homebuilder in northeastern Mexico,
particularly in the state of Nuevo Leon. Through a targeted
expansion strategy, Javer continues to expand its presence and
play an increasingly important role in other attractive states
such as Aguascalientes, Jalisco and Tamaulipas. The company
primarily participates in the affordable entry-level, middle-
income, and to a lesser extent the residential home segments.
During 2008 it generated MXP$4,473 million of revenues and
registered sales of 13,904 units.
SMURFIT-STONE: Gets Nod for Smurfit Kappa Settlement
----------------------------------------------------
Smurfit-Stone Container Corp. and its units sought and obtained
authority from the U.S. Bankruptcy Court to enter into a
settlement
agreement with Smurfit International B.V., Smurfit Kappa Packaging
LLC, Smurfit Carton Y Papel DeMexico, S.A. DE C.V., and Smurfit
Services Limited t/a Smurfit Group Services.
In addition, the Debtors were authorized by the Court to assume a
certain supply agreement.
James F. Conlan, Esq., at Sidley Austin LLP, in Chicago,
Illinois, relates that in February 2003, Smurfit B.V., an
affiliate of Smurfit Kappa, purchased the European operations of
Smurfit-Stone Container Corporation, one of the Debtors, which
include Europa Carton AG, a German paperboard and corrugated
container company, pursuant to a certain stock purchase
agreement.
The terms of the Stock Purchase Agreement provided, among other
things, that SSCC would indemnify Smurfit B.V. for any losses
arising from certain potential tax liabilities related to Europa
Carton. In conjunction with the execution of the Stock Purchase
Agreement, SSCC entered into a Containerboard Supply Agreement
with an affiliate of Smurfit B.V., Smurfit Carton.
Mr. Conlan says that the Supply Agreement (i) obligates the
Smurfit Kappa Entities to purchase a minimum number of tons of
containerboard from SSCC annually, and (ii) currently expires on
September 30, 2013.
In March 2009, the German taxing authority finalized its
assessment of a EUR5,876,705 tax deficiency claim against Europa
Carton. On August 26, 2009, Smurfit B.V. timely filed a proof of
claim against SSCC for the Assessed Tax Deficiency based upon
SSCC's agreement to indemnify Smurfit B.V. in connection with the
Stock Purchase Agreement.
Mr. Conlan discloses that throughout the Chapter 11 cases,
Smurfit Kappa and the Debtors have been involved in good faith,
arm's-length discussions regarding the Assessed Tax Deficiency
and the terms of the Supply Agreement. As a result of the
discussions, Smurfit Kappa and the Debtors have reached a global
resolution to resolve all issues relating to the Assessed Tax
Deficiency and Supply Agreement which manifests itself through
the parties' entry into an amendment to the Supply Agreement and
the Settlement Agreement.
The key provisions of the resolution are:
(a) The Debtors will pay EUR4,300,000 to Smurfit Kappa in full
satisfaction of its prepetition claim, within seven
calendar days after execution of the Settlement Agreement.
(b) In consideration for payment of the Indemnity Claim,
Smurfit Kappa agrees to withdraw, with prejudice, the
claim previously asserted against the Debtors. Smurfit
Kappa further agrees not to file or otherwise assert
against the Debtors any lien related in any way to any
remaining prepetition amounts allegedly owed to SK by the
Debtors. Furthermore, if Smurfit Kappa has taken steps to
file or assert a lien prior to entering into the
Agreement, they agree to take the necessary steps to
remove the lien as soon as practicable after receipt of
payment of the Indemnity Claim.
(c) In further consideration for payment of the Indemnity
Claim, Smurfit Kappa agrees to enter into an amendment to
the Supply Agreement which provides for a three year
extension of the Supply Agreement and an adjustment of the
payment terms under the Supply Agreement in favor of the
Debtors.
About Smurfit-Stone
Smurfit-Stone Container Corp. -- http://www.smurfit-stone.com/--
is one of the leading integrated manufacturers of paperboard and
paper-based packaging in North America and one of the world's
largest paper recyclers. The Company operates 162 manufacturing
facilities that are primarily located in the United States and
Canada. The Company also owns roughly one million acres of
timberland in Canada and operates wood harvesting facilities in
Canada and the United States. The Company employs roughly 21,250
employees, 17,400 of which are based in the United States. For
the quarterly period ended September 30, 2008, the Company
reported roughly $7.450 billion in total assets and $5.582 billion
in total liabilities on a consolidated basis.
Smurfit-Stone and its U.S. and Canadian subsidiaries filed for
Chapter 11 protection on January 26, 2009 (Bankr. D. Del. Lead
Case No. 09-10235). Certain of the company's affiliates,
including Smurfit-Stone Container Canada Inc., a wholly owned
subsidiary of SSCE, and certain of its affiliates, filed to
reorganize under the Companies' Creditors Arrangement Act in the
Ontario Superior Court of Justice in Canada.
Smurfit-Stone joined pulp- and paper-related bankruptcies as
rising Internet use hurts magazines and newspapers. Corporacion
Durango SAB, Mexico's largest papermaker, sought U.S. bankruptcy
in October. Quebecor World Inc., a magazine printer and Pope &
Talbot Inc., a pulp-mill operator, also sought cross-border
bankruptcies for their operations in the U.S. and Canada.
James F. Conlan, Esq., Matthew A. Clemente, Esq., Dennis M.
Twomey, Esq., and Bojan Guzina, Esq., at Sidley Austin LLP, in
Chicago, Illinois; and Robert S. Brady, Esq., and Edmon L. Morton,
Esq., at Young Conaway Stargatt & Taylor in Wilmington, Delaware,
serve as the Debtors' bankruptcy counsel. PricewaterhouseCooper
LLC, serves as the Debtors' financial and investment consultants.
Lazard Freres & Co. LLC acts as the Debtors' investment bankers.
Epiq Bankruptcy Solutions LLC acts as the Debtors' notice and
claims agent.
Bankruptcy Creditors' Service, Inc., publishes Smurfit-Stone
Bankruptcy News. The newsletter tracks the Chapter 11 proceeding
and ancillary foreign proceedings undertaken by Smurfit-Stone
Container Corp. and its various affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000)
URBI DESARROLLOS: Sells US$300 Million of 10-Year Bonds
-------------------------------------------------------
Veronica Navarro Espinosa at Bloomberg News reports that Urbi
Desarrollos Urbanos SAB sold US$300 million of 10-year bonds
overseas after boosting the offering by 20%. Urbi sold the bonds
to yield 9.75%, according to Bloomberg data.
According to the report, an unnamed source said that the yield is
below an initial guidance of 9.875%. Deutsche Bank AG and Banco
Santander SA managed the offering, the source added.
Bloomberg News notes that Mexicali, Mexico-based Urbi and other
Latin American companies are selling debt overseas to lock in
lower borrowing costs before central banks around the world begin
to raise interest rates. The report adds that the extra yield
investors demand to own emerging-market corporate debt instead of
U.S.
About Urbi Desarrollos
Urbi Desarrollos Urbanos is a publicly traded, fully integrated
homebuilder engaged in the development, construction, marketing
and sale of affordable housing in Mexico. The firm reported
assets of approximately $30.8 billion Mexican pesos and equity of
approximately $16 billion Mexican pesos at June 30, 2009.
* * *
As reported in the Troubled Company Reporter-Latin America on
October 23, 2009, Moody's has affirmed Urbi Desarrollos Urbanos,
S.A.B. de C.V.'s Ba3 global scale, local and foreign currency,
senior unsecured debt rating and A3.mx national scale rating, as
well as Urbi's short-term MX-2 national scale rating (Not Prime,
global scale). The rating outlook remains stable. The company's
Ba3 corporate family rating was also affirmed.
=======
P E R U
=======
IIRSA NORTE: Moody's Upgrades Ratings on Senior Notes From 'Ba1'
----------------------------------------------------------------
Moody's Investors Service has upgraded to Baa3 with a stable
outlook from Ba1 the foreign currency senior secured Notes issued
by IIRSA Norte Finance Limited. This action follows Moody's
upgrade of the foreign currency bond rating of the Government of
Peru to Baa3 from Ba1 with a stable outlook. For a discussion of
Moody's upgrade of Peru's foreign currency ratings, please refer
to Moody's Rating Action dated December 16, 2009.
The IIRSA Amazonas Norte Road concession extends from Paita, the
second largest port in Peru to Yurimaguas, a port on the Amazon
River. The Concession Agreement between the Government of Peru
and Concesionaria IIRSA Norte S.A. (the company) in June 2005 is
for a period of 25 years. The road is operational and the project
consists mainly of upgrades of existing facilities, construction,
operation and maintenance of the toll road of approximately 960
kilometers in northern Peru. The construction phase of the
concession is divided in two phases. Under the agreement, Phase 1
(352 kilometers) was required be completed by March 2008 and Phase
2 (603.2 kilometers of which only 407 kilometers will involve
works) was to be completed no later than 24 months from its
commencement or March 2009. Some delays in construction due
primarily to weather related events have pushed completion of
Phase 2 to March 2010.
The rating on the Notes reflects the importance of the toll road
projects that are the subject of a concession agreement between
Concesionaria IIRSA Norte S.A. and the Government of Peru through
the Ministry of Transportation and Communications. Under the
concession agreement the GOP has agreed to make annual payments
for the full and timely payment of debt service on the Notes
through the issuance of Certificados de Reconocimiento de Derechos
del Pago Anual Por Obras. Monthly, the company will request that
Ositran, the Supervising Body for the investment in Transportation
Infrastructure for Public Use (the Regulator) issue Works Progress
Certificates (Certificados de Avance de Obras - CAO) in
recognition of the government's acceptance of construction
progress. When a Works Progress Certificate is issued, the
Ministry of Transportation and Communications issues a Pago Anual
Por Obras certificate, and for each PAO, the GOP will deliver to
the company a series of CRPAOs. CRPAOs acknowledge the company's
right to collect the PAO and the government's obligation to make
such PAO payments to the Peruvian trustee. Each CRPAO
unconditionally and irrevocably entitles the holder to a one-time
payment of a fixed, US dollar-denominated amount. Once issued,
the right of the CRPAO holder to collect the GOP payment is not
subject to the company's performance levels or by any other
circumstances including: destruction of the works performed,
change of control of the company, or breach or termination of the
Concession Agreement. The GOP may not voluntary prepay any
CRPAOs.
While the government's payment obligations are expressly stated
not to be sovereign indebtedness of the Republic of Peru pursuant
to Article 75 of the Constitution, the rating incorporates Moody's
expectation that the GOP will include the payment obligations
under the concession agreement in its budgets and appropriations
for each fiscal year until debt maturity. The rating also
considers the benefits from an Inter-American Development Bank
(IDB, rated Aaa) liquidity facility provided to the GOP that is
sized to cover approximately two years of debt service payments.
In the event of payment shortfalls, payments will be made by the
IDB to the Peruvian trustee. Upon replenishment of any IDB draws
by the government, those amounts are then available for future
needs.
The transaction is structured with minimum structural protections
and relies on the IDB guaranty for liquidity. The Rule 144 A
notes are sculpted to mirror the future payment of CRPAOs with
semi annual principal and interest payments and a final maturity
in 2024. Interest was capitalized through November 2008 when the
first principal payments began. The company assigned its
collection rights to CRPAOs, tolls revenues and IBD payments to
the trustee and there are no restricted payments to the company
for the life of the debt. There is a Reserve Fund but it is sized
to primarily cover trustee, IDB and other fees after construction
completion.
Phase 1 of the construction program has been completed. All of
the Phase 1 CRPAOs have been issued, delivered and purchased. As
of December 2009, Phase 2 achieved a 85% progress level related to
the CRPAO program. Construction is due to be completed by March
2010, which is within the extension granted by the GOP due to
delays related to weather related events along the road. The
delays in construction have not had an effect on note holder
payment.
The members of Concesionaria IIRSA Norte S.A. include Constructora
Norberto Odebrecht S.A., Odebrecht Investimientos en Enfra-
Estructura Ltda. and Grana y Montero S.A. The company was
incorporated in June, 2005 to enter into the concession agreement
with the Government of Peru to provide for the construction,
maintenance and operation of the IIRSA Norte toll road project.
The rating was assigned by evaluating factors believed to be
relevant to the credit profile of the Project such as i) the
business risk and competitive position of the project versus
others within its industry or sector, ii) the capital structure
and financial risk of the project, iii) the projected performance
of the project over the near to intermediate term, and iv) the
project's history of achieving consistent operating performance
and meeting budget or financial plan goals. These attributes were
compared against other projects both within and outside of the
issuer's core peer group and the rating is believed to be
comparable to that assigned to projects of similar credit risk.
INTEROCEANICA IV: Moody's Raises Rating on Senior Notes From 'Ba1'
------------------------------------------------------------------
Moody's Investors Service has upgraded to Baa3 with a stable
outlook from Ba1 the foreign currency zero coupon senior secured
Notes Series 2007-1 due in 2025 and the zero coupon senior secured
Notes Series 2007-2 due 2018 issued by Interoceanica IV Finance
Limited. This action follows Moody's upgrade of the foreign
currency bond rating of the Government of Peru to Baa3 from Ba1
with a stable outlook. For a discussion of Moody's upgrade of
Peru's foreign currency rating, refer to Moody's Rating Action
dated December 16, 2009.
The last rating action on Interoceanica was on November 6, 2008
when the rating was upgraded to Ba1 from Ba2, following the
previous upgrade of the foreign currency rating of the Government
of Peru. The Baa3 rating on Interoceanica IV Finance Limited and
the rating outlook are based on the fact that, subject to certain
conditions, the ultimate sources of debt repayments are
unconditional payment certificates issued by the GOP.
Under the Concession Agreement between Intersur Concesiones S.A.
(the concessionaire) and the GOP, through the Ministry of
Transportation and Communications, the government granted a 25
year concession in 2005 to Intersur for the improvement,
maintenance and operation of the Corredor Vial Interoceanico Sur,
Segment 4, a 306 kilometer toll road connecting Inambari to
Azangaro. Improvements on the highway facility, consisting of
work on the main highway, service roads, protective barriers and
equipment, are being done through the concessionaire's EPC
contract with Constructura del Sur S.A. Upon acceptance of the
works progress, the GOP issues Certificados de Reconocimiento de
Derechos del Pago Annual por Obras to the concessionaire
acknowledging the company's right to collect fixed annual
construction payments denominated in US dollars. In accordance
with the CRPAO Purchase Agreement between Interoceanica IV CRPAO
Purchaser LLC, a special purpose company wholly owned by
Interoceanica IV Finance Ltd, and Intersur, the concessionaire
sells the CRPAOs to the CRPAO Purchaser as they become available.
Note proceeds are being used for the purchase of CRPAOs. At the
end of the construction period, Note proceeds will either be
covered by CRPAO payment obligations or by amounts still held in
the investment vehicle, a total return swap with Goldman Sachs.
Note proceeds remaining at the end of the scheduled purchase
period will be redeemed so that the amount of Notes outstanding
will be sufficiently covered by the annual payment obligations of
the government
Once issued, the right of the CRPAO holder to collect payments due
is not linked to performance of the concessionaire or by any
circumstances related to the project including destruction of the
works, force majeure, a change of control or termination of the
concession agreement. CRPAOs are direct, general, irrevocable,
unconditional, unsubordinated and unsecured obligations of the
Government of Peru as the grantor of the concession. Law No.
28880 enacted in September, 2006 amends the National Budgetary
System Law to expressly provide that annual CRPAO payments cannot
be cancelled once they allocated in the appropriate ministry
budget. Furthermore, if any CRPAOs issued for subsequent
concessions contain more favorable terms, then such terms shall be
deemed to apply to all other CRPAOs issued under the same program.
However, CRPAOs are not sovereign indebtedness of the Republic of
Peru pursuant to Article 75 of the Constitution and Law No.
28,563.
The rating reflects a number of credit factors including the
nature and structure of the CRPAO program, the level of
concessionaire support, and the availability of liquidity in the
event of temporary payment delays. Overall, the mechanics of the
CRPAO program provide some degree of advance notice in the event
of potential problems. The GOP budget is timed such that the
budget must be approved by November 30th for the next fiscal year.
CRPAO payments to the trustee are due each April and October and
payable in US dollars while debt service payments are scheduled
for each May and November. Once issued, CRPAO obligations are not
subject to any conditionality. CRPAO payments are made by the
government directly to the Peruvian trustee.
The notes offer minimum investor protections. The concessionaire
is providing support in the form of a Make Whole Agreement that
can be drawn upon in the event of concession termination due to
sponsor failure to perform. In the event that Notes are redeemed
prior to issuance of all scheduled CRPAOs, the Make Whole will
provide additional funding if Note proceeds remaining in the
investment vehicle are insufficient. Each project sponsors is
responsible for its pro rata share of the Make Whole obligation
which is currently US$11.3 million provided in the form of a BNP
Paribas stand-by letter of credit. Additional liquidity is
provided by a debt service reserve equal to 6 months of debt
service payments through a credit default swap with Goldman Sachs.
Note holders do not have direct rights of enforcement against the
Government of Peru. Nevertheless, in Moody's view, it is likely
that the GOP will support the project, continue to issue CRPAOs in
a timely manner as construction milestones are achieved, and will
budget and make CRPAO payments as scheduled. This project is part
of the Initiative for the Integration of Regional Infrastructure
in South America. IIRSA is multilateral program started in 2000
by 12 South American countries to coordinate, develop and
implement priority infrastructure projects deemed critical to the
region's economic development. The current toll road concession
is one of 31 priority projects. The construction risk is expected
to be manageable given that the project consists primarily of
upgrades to an existing facility. The likelihood that the GOP
will continue to support the project is further enhanced by the
fact that the aggregate annual maximum amount of CRPAO obligations
to be paid by the government is currently capped by law at 0.5% of
GDP, limiting the potential for political or budgetary pressures
on program payments.
As of January 15, 2010 (the most recent CRPAO issue date), 94% of
CRPAOs have been issued and purchased compared to the projected
schedule of 83%. The higher than anticipated proportion of issued
CRPAOs is due to acceleration in the speed of construction over
the second half of 2009. The project construction is expected to
be completed by September 2010, which is the originally projected
date, if not before.
Intersur Concesiones S.A. is a Peruvian entity constituted solely
for the purpose of undertaking the concession. The company is
owned by Constructora Andrade Gutierrez S.A. (33.33%), Construcoes
e Comercio Camargo Correa S.A. (33/33%), and Constructora Queiroz
Galvao S.A. (33.33%).
The rating was assigned by evaluating factors believed to be
relevant to the credit profile of the Project such as i) the
business risk and competitive position of the project versus
others within its industry or sector, ii) the capital structure
and financial risk of the project, iii) the projected performance
of the project over the near to intermediate term, and iv) the
project's history of achieving consistent operating performance
and meeting budget or financial plan goals. These attributes were
compared against other projects both within and outside of the
issuer's core peer group and the rating is believed to be
comparable to that assigned to projects of similar credit risk.
PERU ENHANCED: Moody's Upgrades Ratings on Senior Notes From 'Ba1'
------------------------------------------------------------------
Moody's Investors Service has upgraded to Baa3 with a stable
outlook from Ba1 the foreign currency senior secured discount
Notes issued by the Peru Enhanced Pass-Through Finance Limited.
This action follows Moody's upgrade of the foreign currency bond
rating of the Government of Peru to Baa3 from Ba1 with a stable
outlook. For a discussion of Moody's upgrade of Peru's foreign
currency rating, please refer to Moody's Rating Action dated
December 16, 2009.
Peru Enhanced Pass-Through Finance Limited is a special purpose
entity established to issue the project notes to finance the
construction of two segments of Corredor Vial Interoceanica Sur
Toll Road, sections 2 and 3. Sections 2 and 3 comprise
approximately 700 miles of the 2,603 km road that extends from the
southern coast of Peru to the border with the Brazilian state of
the Acre.
The rating of the notes reflects the importance of the highway
segments which are the subject assets of the 25 year concession
agreements between the concession companies -- Concesionaria
Interoceanica Sur, Tramo 2, S.A. and Concesionaria Interoceanica
Sur, Tramo 3 -- and the Government of Peru. The concession
agreements provide for the construction, maintenance and operation
of the two segments. However, the sources of repayment for the
notes are annual payments from the GOP. As construction
milestones are achieved, the GOP will issue payment obligation
certificates -- Certificados de Reconocimiento de Derechos de Pago
Anual por Obras - which represent annual payment obligations of
the Ministry of Transportation and Communications and which are
budgeted in accordance with Law 28411.
Payments under the CRPAOs, once issued, are not subject to any
conditionality with respect to the concession company's
performance or on the condition or status of the toll road
segments. The notes have additional liquidity from a debt service
reserve account equal to six months of debt service payments
provided through an insurance policy from Merrill Lynch Credit
Reinsurance Limited, rated A2.
Peru Enhanced Pass-Through Finance Limited implemented Amendment 3
to the CRPAO Purchase Agreement in June 2009 to provide for some
adjustments in the CRPAO purchase schedule. The revisions are due
to earlier than expected issuance of CRPAOs. The structure of the
notes did not change. As of June 2009, all of the CRPAOs for this
project that are necessary to cover debt service payments had been
issued by the GOP, as completion of the roads to which these were
tied was achieved. The remaining construction is progressing as
scheduled and is expected to conclude by the end of the current
year.
Concesionaria Interoceanica Sur, Tramo 2, S.A. and Concesionaria
Interoceanica Sur, Tramo 3, S.A. are special purpose entities
owned by a consortium consisting of Constructora Norberto
Odebrecht S.A., Odebrecht Investimentos em Infra-Estructura Ltda.,
Grana y Montero S.A.A., JJC Contratista Generales S.A. and
Ingenieros Civiles y Contratistas S.A.
The rating was assigned by evaluating factors believed to be
relevant to the credit profile of the Project such as i) the
business risk and competitive position of the project versus
others within its industry or sector, ii) the capital structure
and financial risk of the project, iii) the projected performance
of the project over the near to intermediate term, and iv) the
project's history of achieving consistent operating performance
and meeting budget or financial plan goals. These attributes were
compared against other projects both within and outside of the
issuer's core peer group and the rating is believed to be
comparable to that assigned to projects of similar credit risk.
===============================
T R I N I D A D & T O B A G O
===============================
CL FINANCIAL: Another Top Executive Resigns
-------------------------------------------
CL Financial Limited board member, Michael Carballo, has joined
the list of top CL executives who have been exiting the
financially embattled holding company, Trinindad Express reports.
The report relates that a release on Mr. Carballo's departure from
his post as CL's group financial officer was issued by CL
Financial Ltd.
The report notes that the Mr. Carballo's resignation will be
effective on January 31. The report relates that Mr. Carballo
will be replaced by Winston Millet, who will assume the duties of
group CFO immediately.
As reported in the Troubled Company Reporter-Latin America on
January 14, 2010, The Guardian News said that CL Financial's
interim Chief Executive Officer, Steve Bideshi, is leaving after
the Government failed to come to terms with him with regard to a
three-year compensation package. Mr. Bideshi was in the CEO
position for six months.
The Express recalls that late last year, former Government-
appointed CL head Dr Euric Bobb resigned as chairman, although he
remains a director of the group once led by billionaire
businessman Lawrence Duprey. The report relates that Mr. Bobb was
replaced by Dr Shafeek Sultan-Khan.
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.
* * *
As reported in the Troubled Company Reporter-Latin America on
Feb. 20, 2009, the Trinidad and Tobago Express said Central Bank
Governor Ewart Williams disclosed that an examination of insurance
company CLICO, dissolved finance house CLICO Investment Bank and
other CL Financial companies, showed a deficit between $6 billion
and $8 billion.
Tobago President George Maxwell Richards, The Express related,
signed bailout bills for CL Financial, giving the government the
authority to control the company's unit, Colonial Life Insurance
Company, and giving the central bank extensive powers to treat
with CL Financial's collapse and the consequent systemic crisis.
===============
X X X X X X X X
===============
* Upcoming Meetings, Conferences and Seminars
---------------------------------------------
January 27-29, 2010
TURNAROUND MANAGEMENT ASSOCIATION
Distressed Investing Conference, Bellagio, Las Vegas
Contact: http://www.turnaround.org/
Feb. 21-23, 2010
INSOL
International Annual Regional Conference
Madinat Jumeirah, Dubai, UAE
Contact: 44-0-20-7929-6679 or http://www.insol.org/
April 20-22, 2010
TURNAROUND MANAGEMENT ASSOCIATION
Sheraton New York Hotel and Towers, New York, NY
Contact: http://www.turnaround.org/
Apr. 29-May 2, 2010
AMERICAN BANKRUPTCY INSTITUTE
Annual Spring Meeting
Gaylord National Resort & Convention Center, Maryland
Contact: 1-703-739-0800; http://www.abiworld.org/
June 17-20, 2010
AMERICAN BANKRUPTCY INSTITUTE
Central States Bankruptcy Workshop
Grand Traverse Resort and Spa, Traverse City, Michigan
Contact: 1-703-739-0800; http://www.abiworld.org/
July 7-10, 2010
AMERICAN BANKRUPTCY INSTITUTE
Northeast Bankruptcy Conference
Ocean Edge Resort, Brewster, Massachusetts
Contact: 1-703-739-0800; http://www.abiworld.org/
July 14-17, 2010
AMERICAN BANKRUPTCY INSTITUTE
Southeast Bankruptcy Conference
The Ritz-Carlton Amelia Island, Amelia, Fla.
Contact: http://www.abiworld.org/
Aug. 5-7, 2010
AMERICAN BANKRUPTCY INSTITUTE
Mid-Atlantic Bankruptcy Workshop
Hyatt Regency Chesapeake Bay, Cambridge, Maryland
Contact: 1-703-739-0800; http://www.abiworld.org/
Oct. 6-8, 2010
TURNAROUND MANAGEMENT ASSOCIATION
TMA Annual Convention
JW Marriott Grande Lakes, Orlando, Florida
Contact: http://www.turnaround.org/
Dec. 2-4, 2010
AMERICAN BANKRUPTCY INSTITUTE
22nd Annual Winter Leadership Conference
Camelback Inn, Scottsdale, Arizona
Contact: 1-703-739-0800; http://www.abiworld.org/
Mar. 31-Apr. 3, 2011
AMERICAN BANKRUPTCY INSTITUTE
Annual Spring Meeting
Gaylord National Resort & Convention Center, Maryland
Contact: 1-703-739-0800; http://www.abiworld.org/
June 9-12, 2011
AMERICAN BANKRUPTCY INSTITUTE
Central States Bankruptcy Workshop
Grand Traverse Resort and Spa
Traverse City, Michigan
Contact: http://www.abiworld.org/
October 25-27, 2011
TURNAROUND MANAGEMENT ASSOCIATION
Hilton San Diego Bayfront, San Diego, CA
Contact: http://www.turnaround.org/
Dec. 1-3, 2011
AMERICAN BANKRUPTCY INSTITUTE
23rd Annual Winter Leadership Conference
La Quinta Resort & Spa, La Quinta, California
Contact: 1-703-739-0800; http://www.abiworld.org/
***********
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, Marites O. Claro, Joy A. Agravente, Rousel Elaine C.
Tumanda, Valerie C. Udtuhan, Frauline S. Abangan, and Peter A.
Chapman, Editors.
Copyright 2010. 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 * * *