/raid1/www/Hosts/bankrupt/TCRLA

/raid1/www/Hosts/bankrupt/TCRLA_Public/110323.mbx T R O U B L E D C O M P A N Y R E P O R T E R L A T I N A M E R I C A Wednesday, March 23, 2011, Vol. 12, No. 58 Headlines B A H A M A S CABLE & WIRELESS: Protest Fails To Block Bahamas Telecoms Deal B E R M U D A CBS-CSI DISTRIBUTION: Creditors' Proofs of Debt Due April 4 CBS-CSI DISTRIBUTION: Member to Hear Wind-Up Report on April 19 CBS STUDIOS: Creditors' Proofs of Debt Due April 4 CBS STUDIOS: Member to Hear Wind-Up Report on April 19 CBS WORLDVISION: Creditors' Proofs of Debt Due April 4 CBS WORLDVISION: Member to Hear Wind-Up Report on April 19 B R A Z I L FUNDO DE INVESTIMENTO: Moody's Raises Ratings on Senior Shares C A Y M A N I S L A N D S AC98 LIMITED: Shareholders' Final Meeting Set for April 13 BUSHMILL INTERNATIONAL: Members to Hear Wind-Up Report on March 25 CONSTANCE LIMITED: Members to Hear Wind-Up Report on March 29 EGL-3D HOLDINGS: Members to Hear Wind-Up Report on March 29 HALLIBURTON PRODUCTS: Members' Final Meeting Set for April 14 MATTERHORN VENTURES: Shareholders' Final Meeting Set for April 5 MCC INTERNATIONAL: Shareholders' Final Meeting Set for April 15 MCC INTERNATIONAL: Shareholders' Final Meeting Set for April 15 MEDLEY MACRO: Shareholder to Hear Wind-Up Report on April 15 MEDLEY MACRO: Shareholder to Hear Wind-Up Report on April 15 PHILLIPS CAPITAL: Shareholder to Hear Wind-Up Report on March 25 QUEENNIE LIMITED: Members to Hear Wind-Up Report on March 29 RAVEN CREDIT: Shareholders' Final Meeting Set for April 15 ROSANNA LIMITED: Members to Hear Wind-Up Report on March 29 RYADA MULTI-STRATEGY: Shareholders' Final Meeting Set for April 5 SILKSKY LIMITED: Members to Hear Wind-Up Report on March 29 SINNAMARY INTERNATIONAL: Members' Final Meeting Set for April 21 TUCK INVESTMENTS: Members to Hear Wind-Up Report on March 29 US BINNEY: Members to Hear Wind-Up Report on March 29 C O L O M B I A ECOPETROL SA: S&P Raises Corporate Credit Rating From 'BB+' J A M A I C A DIGICEL GROUP: Claro Deal May Close in 2nd Quarter, Worries LIME M E X I C O FINANCIERA INDEPENDENCIA: Fitch Keeps 'BB-' Issuer Default Ratings P E R U INKIA ENERGY: Fitch Assigns 'BB-' Issuer Default Rating INKIA ENERGY: Moody's Assigns 'B1' Corporate Family Rating - - - - - ============= B A H A M A S ============= CABLE & WIRELESS: Protest Fails To Block Bahamas Telecoms Deal -------------------------------------------------------------- The RJR News reports that Bahamas' parliamentarians have voted in favor of Cable & Wireless Communications plc's acquisition of a 51% stake in Bahamas Telecoms Company. As reported by the Troubled Company Reporter-Latin America on Dec. 30, 2010, the Royal Gazette said that CWC signed a non- binding memorandum of understanding with the Government of the Commonwealth of the Bahamas to acquire the 51% interest in BTC. Under the MOU, the Royal Gazette said, it is proposed that CWC will acquire the majority equity stake in BTC, including management control of the business, for $210 million, and that CWC will work with the Government and the management of BTC to develop a business plan for BTC, addressing its plans for the modernization of telecommunications throughout the Bahamas and for the development of BTC following privatization. According to the Royal Gazette, the MOU also stipulates a restructuring of the workforce of BTC soon after completion of the transaction, which will be carried out on a voluntary basis. The Royal Gazette related that subject to completion, the acquisition is expected to be funded from CWC's existing cash balances and debt facilities. According to the RJR News, Bahamians protested against the deal on Monday, but failed to convince parliamentarians to snub the deal. About Cable & Wireless Cable & Wireless Communications PLC is a global provider of telecommunication and Internet services. The Group's global communication services offer IP voice and hosting services to businesses located the UK, USA, Europe. Cable & Wireless telecommunication services provide fixed and mobile voice, data and IP services to consumers and business located in the Caribbean. * * * As of February 14, 2011, the Company continues to carry Standard and Poor's "B" short-term issuer credit ratings. The Company also continues to carry Moody's "B1" senior unsecured debt rating. ============= B E R M U D A ============= CBS-CSI DISTRIBUTION: Creditors' Proofs of Debt Due April 4 ----------------------------------------------------------- The creditors of CBS-CSI Distribution (Bermuda) Ltd. are required to file their proofs of debt by April 4, 2011, to be included in the company's dividend distribution. The company commenced wind-up proceedings on March 16, 2011. Ernest Morrison is the company's liquidator. CBS-CSI DISTRIBUTION: Member to Hear Wind-Up Report on April 19 --------------------------------------------------------------- The sole member of CBS-CSI Distribution (Bermuda) Ltd. will receive on April 19, 2011, at 10:00 a.m., the liquidator's report on the company's wind-up proceedings and property disposal. The company commenced wind-up proceedings on March 16, 2011. Ernest Morrison is the company's liquidator. CBS STUDIOS: Creditors' Proofs of Debt Due April 4 -------------------------------------------------- The creditors of CBS Studios (Bermuda) Ltd. are required to file their proofs of debt by April 4, 2011, to be included in the company's dividend distribution. The company commenced wind-up proceedings on March 16, 2011. Ernest Morrison of Cox Hallett Wilkinson Limited is the company's liquidator. CBS STUDIOS: Member to Hear Wind-Up Report on April 19 ------------------------------------------------------ The sole member of CBS Studios (Bermuda) Ltd. will receive on April 19, 2011, at 10:00 a.m., the liquidator's report on the company's wind-up proceedings and property disposal. The company commenced wind-up proceedings on March 16, 2011. Ernest Morrison of Cox Hallett Wilkinson Limited is the company's liquidator. CBS WORLDVISION: Creditors' Proofs of Debt Due April 4 ------------------------------------------------------ The creditors of CBS Worldvision (Bermuda) Ltd. are required to file their proofs of debt by April 4, 2011, to be included in the company's dividend distribution. The company commenced wind-up proceedings on March 16, 2011. Ernest Morrison of Cox Hallett Wilkinson Limited is the company's liquidator. CBS WORLDVISION: Member to Hear Wind-Up Report on April 19 ---------------------------------------------------------- The sole member of CBS Worldvision (Bermuda) Ltd. will receive on April 19, 2011, at 10:00 a.m., the liquidator's report on the company's wind-up proceedings and property disposal. The company commenced wind-up proceedings on March 16, 2011. Ernest Morrison of Cox Hallett Wilkinson Limited is the company's liquidator. =========== B R A Z I L =========== FUNDO DE INVESTIMENTO: Moody's Raises Ratings on Senior Shares -------------------------------------------------------------- Moody's America Latina has upgraded the ratings of the Senior Shares of Fundo de Investimento em Direitos Creditorios Nao- Padronizados Companhia de Paulista de Trens Metropolitanos to Aa1.br (sf) from Aa3.br (sf) (Brazilian National Scale) and to Baa3 (sf) from Ba2 (sf) (Global Scale, Local Currency). FIDC CPTM is a securitization transaction by means of a closed- ended FIDC and backed by future collections of certain train tickets sold by Companhia Paulista de Trens Metropolitanos (CPTM) in a number of predefined eligible train stations. The senior and subordinated shares, issued in March 2007, have a legal final maturity scheduled for March 2014 (36 months remaining). The fund is currently in the amortization period and making monthly principal and interest payments on the Senior Shares. Issuer: FIDC CPTM * Senior Shares -- upgraded to Aa1.br (sf) from Aa3.br (sf) (National Scale) & Baa3 (sf) from Ba2 (sf) (Global Scale, Local Currency) Ratings Rationale The rating action is based on the transaction's performance to date, which has been according to expectations. The DSCR, which is calculated by dividing monthly cash collections by the next projected monthly amortization to be made on the Senior Shares, was at 4.40x as of 12/31/2010, well above the 2.0x trigger level. Since closing, the DSCR has remained above 3.4x. The transaction benefits from a Debt Service Coverage Ratio (DSCR) trigger, which requires a minimum coverage of 2.0x of eligible collections over the next projected payment of principal and interest. If this trigger is breached, an revision event is automatically triggered and a shareholders' meeting will be called in which investors can decide to early amortize the transaction. The upgrade also reflects the improved ability of CPTM, as a company controlled by the State of Sao Paulo, to provide continued train transportation services within Sao Paulo's metropolitan region. The ratings of the State of Sao Paulo were upgraded to Baa3 from Ba2 (Global Scale Long-term Issuer Rating, Foreign Currency) in November 29, 2010 and remain with a stable outlook. Moody's performed a break-even analysis to assess the maximum inflation rate (IPCA) that the transaction can support before senior shareholders suffer losses. For example, a 20% sudden flat decrease of monthly cash collections, would require a corresponding IPCA index increase to circa 10.3% per month for the Senior Shares to experience a loss. This is because the transaction is maturing in 36 months and the DSCR is currently robust at 4.40x. The main uncertainty for the transaction is the inflation level in Brazil. The senior shares are adjusted according to the IPCA index, while ticket fares and therefore collections may not necessarily increase in the same amount as inflation. However, the risk is mitigated due to the robust DSCR that the transaction enjoys and the relatively short time to maturity, as the break- even analysis indicates. Finally, Moody's also considered the continued importance of CPTM's train system as a vital means of transportation for more than 1.5 million commuters within Sao Paulo's metropolitan area. Moody's Investors Service did not receive or take into account a third-party due diligence report on the underlying assets or financial instruments related to the monitoring of this transaction in the past six months. =========================== C A Y M A N I S L A N D S =========================== AC98 LIMITED: Shareholders' Final Meeting Set for April 13 ---------------------------------------------------------- The shareholders of AC98 Limited will hold their final meeting on April 13, 2011, at 11:00 a.m., to receive the liquidator's report on the company's wind-up proceedings and property disposal. The company's liquidator is: Trident Liquidators (Cayman) Limited c/o Mrs. Eva Moore Trident Trust Company (Cayman) Limited Telephone: (345) 949 0880 Facsimile: (345) 949 0881 P.O. Box 847, George Town Grand Cayman KY1-1103 Cayman Islands BUSHMILL INTERNATIONAL: Members to Hear Wind-Up Report on March 25 ------------------------------------------------------------------ The members of Bushmill International Ltd. will receive on March 25, 2011, at 12:00 noon, the liquidator's report on the company's wind-up proceedings and property disposal. The company's liquidator is: MBT Trustees Ltd. Telephone: 945-8859 Facsimile: 949-9793/4 P.O. Box 30622, Grand Cayman KY1-1203 Cayman Islands CONSTANCE LIMITED: Members to Hear Wind-Up Report on March 29 ------------------------------------------------------------- The members of Constance Limited will receive on March 29, 2011, 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 Cayman Islands EGL-3D HOLDINGS: Members to Hear Wind-Up Report on March 29 ----------------------------------------------------------- The members of EGL-3D Holdings Limited will receive on March 29, 2011, 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 Cayman Islands HALLIBURTON PRODUCTS: Members' Final Meeting Set for April 14 ------------------------------------------------------------- The members of Halliburton Products & Services Limited will hold their final meeting on April 14, 2011, at 10:00 a.m., to receive the liquidator's report on the company's wind-up proceedings and property disposal. The company's liquidator is: Nadeem Ashfaq Halliburton Energy Services, Inc. 10200 Bellaire Blvd. Houston, Texas 77072 USA MATTERHORN VENTURES: Shareholders' Final Meeting Set for April 5 ---------------------------------------------------------------- The shareholders of Matterhorn Ventures SPC will hold their final meeting on April 5, 2011, at 9:00 a.m., to receive the liquidator's report on the company's wind-up proceedings and property disposal. The company's liquidator is: Richard Finlay c/o Krysten Lumsden Telephone: (345) 814 7366 Facsimile: (345) 945 3902 P.O. Box 2681, Grand Cayman KY1-1111 Cayman Islands MCC INTERNATIONAL: Shareholders' Final Meeting Set for April 15 --------------------------------------------------------------- The shareholders of MCC International Holdings III, Ltd., will hold their final meeting on April 15, 2011, at 8:30 a.m., to receive the liquidator's report on the company's wind-up proceedings and property disposal. The company's liquidator is: Walkers Corporate Services Limited Walker House, 87 Mary Street, George Town Grand Cayman, Cayman Islands KY1 9002 Cayman Islands MCC INTERNATIONAL: Shareholders' Final Meeting Set for April 15 --------------------------------------------------------------- The shareholders of MCC International Holdings II, Ltd., will hold their final meeting on April 15, 2011, at 8:45 a.m., to receive the liquidator's report on the company's wind-up proceedings and property disposal. The company's liquidator is: Walkers Corporate Services Limited Walker House, 87 Mary Street George Town, Grand Cayman KY1 9002 Cayman Islands MEDLEY MACRO: Shareholder to Hear Wind-Up Report on April 15 ------------------------------------------------------------ The shareholder of Medley Macro Fund Ltd. will receive on April 15, 2011, at 1:00 p.m., the liquidator's report on the company's wind-up proceedings and property disposal. The company's liquidator is: Ogier c/o Danielle Walker Telephone: (345) 815-1880 Facsimile: (345) 949-9877 MEDLEY MACRO: Shareholder to Hear Wind-Up Report on April 15 ------------------------------------------------------------ The shareholder of Medley Macro Master Fund Ltd. will receive on April 15, 2011, at 1:00 p.m., the liquidator's report on the company's wind-up proceedings and property disposal. The company's liquidator is: Ogier c/o Danielle Walker Telephone: (345) 815-1880 Facsimile: (345) 949-9877 PHILLIPS CAPITAL: Shareholder to Hear Wind-Up Report on March 25 ---------------------------------------------------------------- The sole shareholder of Phillips Capital Ltd. will receive on March 25, 2011, the liquidator's report on the company's wind-up proceedings and property disposal. The company's liquidator is: Darryl Myers Telephone: +1 345 949 0699 Facsimile: +1 345 949 8171 c/o Thorp Alberga Harbour Place, 2nd Floor 103 South Church Street, George Town Grand Cayman KY1-1106 Cayman Islands QUEENNIE LIMITED: Members to Hear Wind-Up Report on March 29 ------------------------------------------------------------ The members of Queennie Limited will receive on March 29, 2011, 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 Cayman Islands RAVEN CREDIT: Shareholders' Final Meeting Set for April 15 ---------------------------------------------------------- The shareholders of Raven Credit Opportunities Offshore Fund, Ltd., will hold their final meeting on April 15, 2011, at 9:00 a.m., to receive the liquidator's report on the company's wind-up proceedings and property disposal. The company's liquidator is: Walkers Corporate Services Limited Walker House, 87 Mary Street George Town, Grand Cayman KY1 9002 Cayman Islands ROSANNA LIMITED: Members to Hear Wind-Up Report on March 29 ----------------------------------------------------------- The members of Rosanna Limited will receive on March 29, 2011, 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 Cayman Islands RYADA MULTI-STRATEGY: Shareholders' Final Meeting Set for April 5 ----------------------------------------------------------------- The shareholders of Ryada Multi-Strategy Fund will hold their final meeting on April 5, 2011, at 10:00 a.m., to receive the liquidator's report on the company's wind-up proceedings and property disposal. The company's liquidator is: Michael Pearson c/o Trudy-Ann Baines Deloitte P.O. Box 1787, Grand Cayman KY1-1109 Cayman Islands SILKSKY LIMITED: Members to Hear Wind-Up Report on March 29 ----------------------------------------------------------- The members of Silksky Limited will receive on March 29, 2011, 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 Cayman Islands SINNAMARY INTERNATIONAL: Members' Final Meeting Set for April 21 ---------------------------------------------------------------- The members of Sinnamary International Financing Corp. will hold their final meeting on April 21, 2011, at 11:00 a.m., to receive the liquidator's report on the company's wind-up proceedings and property disposal. The company's liquidator is: Ian Stokoe c/o Adam Keenan Telephone: (345) 914 8743 Facsimile: (345) 945 4237 P.O. Box 258, Grand CaymanKY1-1104 Cayman Islands TUCK INVESTMENTS: Members to Hear Wind-Up Report on March 29 ------------------------------------------------------------ The members of Tuck Investments Limited will receive on March 29, 2011, 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 Cayman Islands US BINNEY: Members to Hear Wind-Up Report on March 29 ----------------------------------------------------- The members of U.S. Binney Limited will receive on March 29, 2011, 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 Cayman Islands =============== C O L O M B I A =============== ECOPETROL SA: S&P Raises Corporate Credit Rating From 'BB+' ----------------------------------------------------------- Standard & Poor's Ratings Services said that it raised its long- term corporate credit rating and its senior unsecured debt rating on Ecopetrol S.A. to 'BBB-' from 'BB+'. The outlook is stable. "The rating action follows the raising of S&P's foreign-currency sovereign credit rating on the Republic of Colombia to 'BBB-' from 'BB+'," said Standard & Poor's credit analyst Jose Coballasi. The rating on Ecopetrol is based on the company's stand-alone credit profile, which S&P assess to be 'bb+', and on its opinion that there is a high likelihood that the government of the Republic of Colombia would provide timely and sufficient extraordinary support to Ecopetrol in the event of financial distress. In accordance with S&P's criteria for government-related entities, its view of a high likelihood of extraordinary government support is based on its assessment of Ecopetrol's: a. very important role in the economy, Colombia's current 89.9% ownership in the company, Ecopetrol's position as the largest company in the country, and its position as the main supplier of oil-derived products in the local market; and b. strong link with the government, along with the company's clear corporate governance and independent management team. The rating on Ecopetrol also reflects the company's leading position in Colombia's oil and gas industry, increased production, low production costs, and adequate liquidity. It also considers Ecopetrol's position relative to other national oil companies, its exposure to commodity price volatility, and aggressive expansion plans. The stable outlook reflects S&P's outlook on Colombia. The outlook on Colombia incorporates its expectation of continuity in key economic policies in the medium term, along with a stabilizing debt burden because of good prospects for both GDP growth and fiscal revenues. The recent gains in public confidence resulting from an improved security environment are likely to persist. S&P believes that Ecopetrol will continue to play a significant role in the Colombian economy and keep operating as a profit-seeking enterprise. A positive rating action on Colombia could lead to a positive rating action on Ecopetrol. Ratings could be pressured downward if Ecopetrol's stand-alone credit quality deteriorates significantly. This could result from a significant decrease in production or financial performance being weaker than S&P expects. ============= J A M A I C A ============= DIGICEL GROUP: Claro Deal May Close in 2nd Quarter, Worries LIME ---------------------------------------------------------------- The RJR News reports that if the government approves Digicel Group Limited's acquisition of America Movil's Claro business in Jamaica, the deal could close in the second calendar quarter. As reported by the Troubled Company Reporter-Latin America on March 14, 2011, RadioJamaica said that Digicel signed the agreement with America Movil. The deal will also see Digicel selling its business in El Salvador and Honduras to America Movil, according to RadioJamaica. "We have received the request letter from Digicel and Claro jointly, and it is something that the government will have to look at very keenly in terms of the current landscape (in telecommunications sector). In due course we will address it," The RJR News quoted Daryl Vaz, the Minister with responsibility for Information, as saying. The RJR News relates that telecommunication company LIME Jamaica has asked the government, the Office of Utilities Regulations, and the Fair Trading Commission to assess the deal. LIME said that assessment should be done before approval of the deal is given by the relevant minister, the RJR News states. The government should implement regulations to govern call termination rates and cross network charges, to ensure the preservation of a competitive landscape in the Jamaican telecoms market for voice services, the Jamaica Observer reports, citing the Opposition People's National Party. According to the Jamaica Observer, Senator Mark Golding, Opposition Spokesperson for Industry & Commerce said, "The Opposition fears that with one mobile operator having a dominant market position and enjoying an unregulated ability to set call termination rates and cross network charges, the exit of Claro may well signal the end of a competitive telecoms market for voice services." Digicel Group Limited -- http://www.digicelgroup.com/-- is renowned for competitive rates, unbeatable coverage, superior customer care, a wide variety of products and services and state- of-the-art handsets. By offering innovative wireless services and community support, Digicel has become a leading brand across its 31 markets worldwide. Digicel is incorporated in Bermuda and now has operations in 31 markets worldwide. Its Caribbean and Central American markets comprise Anguilla, Antigua & Barbuda, Aruba, Barbados, Bermuda, Bonaire, the British Virgin Islands, the Cayman Islands, Curacao, Dominica, El Salvador, French Guiana, Grenada, Guadeloupe, Guyana, Haiti, Honduras, Jamaica, Martinique, Panama, St Kitts & Nevis, St. Lucia, St. Vincent & the Grenadines, Suriname, Trinidad & Tobago and Turks & Caicos. The Caribbean company also has coverage in St. Martin and St. Barths. Digicel Pacific comprises Fiji, Papua New Guinea, Samoa, Tonga and Vanuatu. * * * As of January 14, 2010, the company continues to carry Moody's "Caa1" senior unsecured debt rating. =========== M E X I C O =========== FINANCIERA INDEPENDENCIA: Fitch Keeps 'BB-' Issuer Default Ratings ------------------------------------------------------------------ Fitch Ratings has affirmed Financiera Independencia's 'BB-' long- term Issuer Default Ratings following the announcement that FINDEP has completed the acquisition of its smaller competitor Apoyo Economico Familiar and a U.S.-based entity named Apoyo Financiero Inc. for a combined amount of MXN1.18 billion. The ratings were removed from Rating Watch Negative. The Rating Outlook for the long-term ratings is Stable. In addition, Fitch affirmed the long- and short-term national scale ratings of FINDEP at 'A(mex)'/'F1(mex)', as well as those of its wholly owned subsidiary Financiera Finsol, S.A. de C.V. at 'BBB+(mex)'/'F2(mex)' with a Stable Outlook. The acquired entities are small relative to FINDEP's size. On a pro forma and consolidated basis, the integration of AEF and AFI will expand FINDEP's loans and assets by 15% and 24%, respectively, based on figures as of December 2010 (4Q'10). Given the proposed terms of the transactions (all cash) and the goodwill arising, FINDEP's core capital ratio will deteriorate materially, to roughly 15% from 27% on a pro forma basis. However, Fitch expects that FINDEP will partially rebuild this ratio to roughly 20% over the next two years, even considering the relatively conservative earnings projections over that period. Fitch considers that current and projected capital ratios remain consistent with FINDEP's risk profile and its rating level, especially under a scenario of moderate dividend pay-outs. Moreover, Fitch is also less concerned on other effects of the acquisitions as compared to when these were announced in December 2010, since the impact on liquidity is moderate, execution risk seems low, and the strategic value and profitability prospects of the acquired entities are aligned to the relatively high premium that FINDEP agreed to pay. Fitch has also indicated in the past that the integration of AEF and AFI could have some neutral or slightly positive effects on consolidated asset quality and business risk. Fitch has affirmed these ratings with a Stable outlook: FINDEP: -- Long-term foreign and local currency IDRs at 'BB-'; -- Short-term foreign and local currency IDRs at 'B'; -- US$200 million senior guaranteed notes due 2015 at 'BB-'; -- National-scale long-term rating at 'A(mex)'; -- National-scale short-term rating at 'F1(mex)'; -- National-scale long-term rating for local issues of senior unsecured debt at 'A(mex)'. Finsol: -- National-scale long-term rating at 'BBB+(mex)'; -- National-scale short term rating at 'F2(mex)'. ======= P E R U ======= INKIA ENERGY: Fitch Assigns 'BB-' Issuer Default Rating ------------------------------------------------------- Fitch Ratings has assigned a foreign and local currency Issuer Default Rating of 'BB-' to Inkia Energy Ltd. In addition, Fitch has assigned a 'BB-' long-term rating to the company's proposed US$300 million senior unsecured debt issuance. The Rating Outlook is Stable. Proceeds from the expected issuance would be used to repay approximately US$83 million of outstanding debt and fund an equity contribution of approximately US$150 million into its Cerro del Aguila power project, a 402 MW run of the river hydro electric generation unit. The balance of the funds will be kept in the company to enhance liquidity. The ratings are supported by the strength of the credit quality of its most important subsidiary, Kallpa, which is a 561 MW Peruvian thermoelectric generation company. Inkia has a 75% participation in Kallpa, whose credit quality is supported by its contractual position and competitive cost structure. Inkia's ratings also incorporate the geographic diversification of its assets, large expansion project and expected improvements in its financial profile following the completion of these projects. Credit Profile Linked to Kallpa Kallpa's credit quality is supported by its competitive cost structure and its contracted position. Kallpa has entered into 34 power purchase agreements. Combined, these PPAs amount to about 650MW of contracted capacity per year on average over the next 12 years. These agreements add to cash flow stability and predictability. They are denominated in US$, reducing the company's exposure to foreign exchange risk, as the bulk of the company's debt is denominated in the same currency. The company is currently undergoing an expansion project, which will strengthen its financial profile. The expansion will increase installed capacity to 854 MW from 566 MW through the installation of a 288 MW combined cycle unit. This project is scheduled to be completed in 2012 and will conclude the final phase of the construction at this facility which began production in 2007 with an initial capacity of 184 MW. The project is fully funded. Following completion, Kallpa will represent approximately 40% of cash flow to the holding company and more than half of consolidated EBITDA; EBITDA should increase by approximately US$100 million to US$150 million and decrease leverage at this subsidiary to between 2.5 - 3.0 times. High Proforma Leverage Inkia's pro forma stand alone financial profile is currently weak for the rating category. Following the debt issuance and equity infusion, representing 75% equity interest, into the Cerro del Aguila project, proforma consolidated leverage is expected to increase to approximately 5.1 times, excluding non-recourse project finance debt at the Cerro level. The Cerro project is expected to cost US$700 million and is expected to be funded with non-recourse project-like debt and equity contribution from Inkia and its partner. In 2012, consolidated leverage, excluding Cerro, is expected to improve to approximately 3.5 times as Kallpa enters commercial operation. As of Dec. 31, 2010, Inkia's consolidated EBITDA (plus dividends) and funds from operations were US$130 million and US$71 million, respectively. Inkia had a total consolidated debt of US$580 million as of Dec. 31, 2010. After giving equity credit to a US$177 million intercompany loan, from parent, Israel Corp., Inkia's adjusted debt is US$403 million resulting in a leverage ratio, as measured by total debt with equity credit to EBITDA (plus dividends), of 3.1x. Adequate Liquidity Position Inkia's liquidity position is adequate. As of Dec. 31, 2010, the company's consolidated cash position amounted to US$120 million, of which US$39 million was at the holding company and US$81 million was at consolidated subsidiaries, US$40 million of which was at Kallpa to fund the combined cycle expansion project. Restricted cash amounted to US$7 million. The company's liquidity position is supported by dividends and disbursements, ranging between US$20 million and US$30 million, from its different subsidiaries as well as by readily monetizable assets. Inkia owns 21% of Edegel, which is the largest generation company in Peru with a current market capitalization of approximately US$1.6 billion. The company also benefits from favorable access to the local capital markets to finance investment projects at the subsidiaries' level. Currently, the company has been able to secure 100% of the required funds to finance Kallpa's combined cycle expansion by issuing debt in the local market and raising committed equity through partners. The holding company also benefits from the financial flexibility provided by its intercompany debt as it does not carry a fixed amortization schedule and does not share collateral (shares on assets) with Inkia's bonds. Asset Diversification: Inkia's ratings also take into consideration the company's geographic diversification. Excluding its Peruvian operations, the company generated over 50% of its 2009 consolidated EBITDA (plus dividends) from assets located in Bolivia (rated 'B+' by Fitch), the Dominican Republic (rated 'B' by Fitch), Jamaica (rated 'B-' by Fitch), and El Salvador (rated 'BB' by Fitch). Over the next two years, cash flow from these assets will be of strategic importance for Inkia, until the Kallpa expansion is completed and begins to distribute dividends (second half of 2012). The consolidated credit metrics of Inkia should continue to be characterized by relatively high leverage ratios in the medium term, as the company continues its expansion strategy and finances growth with debt both at project level and holding company level. On a stand alone basis, Inkia's holding company credit metrics will improve to levels consistent with the assigned rating once the current conversion to a combined cycle plant at Kallpa enters commercial operations. Debt Structurally Subordinated Inkia's debt is structurally subordinated to debt at the operating companies. As of Sept. 30, 2010, total debt at the subsidiary level amounted to approximately US$300 million or 75% of consolidated adjusted debt. The bulk of this debt is represented by notes issued by Kallpa to fund the capacity expansion. This project-finance like debt that has a standard covenants package including dividend restrictions and limitations on additional indebtedness. Specifically, Kallpa is restricted from making dividend payments to Inkia if its debt service coverage ratio falls below 1.2 times. Fitch's expects Kallpa's DSCR to reach its lowest point in 2014 at 1.5x. Rating Drivers A negative rating action could be triggered by a combination of these factors; leverage does not moderate at Kallpa after it completes its combined cycle expansion project; Inkia pursues additional opportunities in generation without an adequate amount of additional equity; or the company's asset portfolio becomes more concentrated in countries with high political and economic risk. Although a positive rating action is not expected in the near future, any combination of this factor could be considered; the Peruvian operation's cash flow contribution increases beyond current expectations; and/or leverage declines materially. Inkia is an energy holding company incorporated in Bermuda in 2007 by Israel Corp. with the purpose of acquiring Globeleq Americas Ltd's electric generation assets in Latin America. Israel Corp.'s total investment in Inkia amounted to approximately US$543 million and was financed with equity and intercompany loans for the most part. Inkia holds majority (4) and minority (3) participations on seven electricity generating companies located in six Latin American countries. Inkia owns approximately 75% of Kallpa energy and holds a 21% stake on Edegel S.A.A. INKIA ENERGY: Moody's Assigns 'B1' Corporate Family Rating ---------------------------------------------------------- Moody's Investors Service has assigned a B1 Corporate Family Rating and a FC B1 senior unsecured debt rating on the Global Scale to Inkia Energy Ltd's planned issuance of up to US$300 million of senior unsecured notes to be issued under a 144(A) registration. This is the first time Moody's has rated Inkia. The rating outlook is stable. Ratings Rationale The B1 CFR and senior unsecured debt rating reflects Moody's assessment of Inkia's historical and projected consolidated credit metrics, which Moody's believe position the company at the upper end of the B-rating category for unregulated power companies. Over the last three years, Moody's calculates that the company's cash flow before working capital changes (CFO pre-W/C) and cash flow coverage of interest expense were below 12% and 3.0x, respectively, while the company experienced negative free cash flow due principally to various capital investment programs. Prospectively, Moody's believes that these financial metrics will trend downward through 2012, as the company completes its multi- year construction program at Kallpa, a Peruvian based generation subsidiary, which is converting its existing open-cycle natural gas facility (consisting of three turbines) to a combined-cycle plant configuration (CC conversion). The company anticipates the CC conversion will be completed during 2012 which should not only improve the plant's operating efficiency but also its competitive position in the Peruvian power market. Over this timeframe of continuing negative free cash flow, Moody's anticipate that the ratio of CFO pre-W/C to debt will average in the mid-to-high single digits with CFO pre-W/C coverage of interest expense of approximately 2.5x. Moody's notes that Inkia has committed subsidiary level financing arrangements at the Kallpa level, which will help fund this negative free cash flow. While the rating incorporates the importance of the Peruvian subsidiaries including not only the future expected cash flows from Kallpa but also from its 21.1% economic interest in Edegel, the largest generator in Peru, the rating also acknowledges the asset concentration that exists at Kallpa which is somewhat balanced with the geographic diversity of Inkia's cash flow stream from its investments in other Latin American and Caribbean countries. The rating recognizes the predictability of Kallpa's future cash flows, which is underpinned by the existence of Power Purchase Agreements for the bulk of its available energy that include certain cost indexation clauses, which help to mitigate the impact of substantial variations in certain costs such as fuel that the company may experience over the life of the PPAs. The B1 rating also considers the degree of structural subordination that exists at Inkia as a holding company and its full reliance on its subsidiaries' dividend distributions to service its debt. In particular, the rating points to the fact that Kallpa, the most important Inkia subsidiary, is not anticipated to provide dividends to Inkia while the CC conversion is being completed, and that Inkia's access to cash payouts from its other prominent cash flow contributor, Edegel, is limited until the outstanding bonds of its indirect intermediate parent holding-company subsidiary, Southern Cone Power Peru S.A. become due in 2012. Therefore, Inkia bondholders will further rely over the near to medium term upon dividends for debt service and other holding company obligations from a variety of smaller subsidiaries. While annual holding company needs are expected to be relatively modest and Moody's anticipate internal sources of holding company liquidity to remain adequate, the increased reliance on the smaller and less predictable subisidaries for debt service over this timeframe is a constraining factor in this rating assignment. Beginning in 2013, Moody's anticipates SCPP and Kallpa will be able to provide meaningful cash flow contributions to the parent beginning in 2013, once Kallpa's CC conversion is completed and SCPP's bonds mature. The B1 rating further considers the company's fairly sizeable growth and development strategies currently centered around the construction of Cerro del Aguila, a 402 megawatt hydro project, planned to be completed in 2015. While the company's future performance may benefit from the construction of this cost- competitive asset, Moody's observe that Inkia's management has limited project development expertise, particularly as it relates to the construction of a multi-year hydro project. Moreover, Moody's has limited insights into other potential investment projects that Inkia's management may pursue outside of the Cerro project. The rating acknowledges Inkia's parent company Israel Corporation's sizeable capital commitment to help fund Inkia's growth and development; however, such support is balanced by Moody's understanding of the terms and conditions of the shareholder loans between IC and Inkia, which Moody's consider to be somewhat akin to subordinated debt-like obligations in Moody's rating assessment of Inkia. That being said, Moody's observe that the terms and conditions of the unsecured notes limit, among others things, the incurrence of additional debt and place restrictions on payments to the shareholder (both dividends and payments under the shareholder loans) which enhances Inkia's financing flexibility, particularly through 2012. Proceeds of this offering are expected to be used for the repurchase of Inkia's outstanding Nuevos-soles 9.25% senior secured bonds due in 2015 (about US$82.8 million), for working capital purposes, to finance its expected equity contribution in Cerro and for other projects and acquisitions that the company may pursue in the future. Moody's has reviewed preliminary draft legal documentation for the proposed senior unsecured notes and the assigned rating assumes that there will be no material variation from the draft reviewed and that all agreements will be legally valid, binding and enforceable. The stable rating outlook reflects Moody's opinion that Inkia's rating is likely to remain well positioned within the B-rating category based upon Moody's expectations for future consolidated credit metrics over the next few years, particularly, with the CC conversion project well underway at Kallpa, the related dividend limitations that are expected to persist during this timeframe, and an anticipated increase in consolidated indebtedness associated with the funding of new growth projects such as Cerro. Inkia's ratings could see some positive momentum after completion of the CC conversion expansion and receipt of some steady dividend distributions from this critical subsidiary.To that end, once the Kallpa CC conversion nears completion, a positive rating action could surface if, as Moody's expect, Inkia's consolidated credit metrics (including any new project finance debt) improve such that cash flow coverage of interest expense, cash flow to debt and retained cash flow to achieve levels in excess of 2.5x, 13% and 8%, respectively, on a sustainable basis. Additionally, any improvement in Inkia's consolidated financial performance will be balanced against Moody's assessment of the company's growth and development initiatives underway at that time. Complications in the completion of Kallpa's combined cycle expansion program, and/or political or operational problems at some of the other key subsidiaries that result in a material deterioration in the anticipated dividend distributions to Inkia and/or in the consolidated credit metrics could put downward pressure on the ratings. Specifically, if Inkia reports consolidated cash flow to debt, and RCF to debt below 7% and 3%, respectively, and cash flow interest coverage of less than 1.5x, on a sustainable basis. Headquartered in Lima, Peru, Inkia is an international holding company incorporated in Bermuda that holds ownership stakes in power generation companies in Peru (Government bond rating: Baa3, stable), Bolivia (Government bond rating: B1, positive), Dominican Republic (Government bond rating: B1, stable), El Salvador (Government bond rating: Ba1, negative), Jamaica (Government bond rating: B3, stable) and Panama (Government bond rating: Baa3, stable). Inkia has net ownership of 1,191MW (adjusted to account for its proportional ownership interest) of effective generation capacity. At year-end 2010, Inkia reported consolidated assets of around US$1.2 billion and cash flow from operations of around US$104 million. *********** 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. 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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. Agravante, Rousel Elaine T. Fernandez, Valerie U. Pascual, Psyche A. Castillon, Julie Anne G. Lopez, Ivy B. Magdadaro, Frauline S. Abangan, and Peter A. Chapman, Editors. Copyright 2011. 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. 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