/raid1/www/Hosts/bankrupt/TCRLA

/raid1/www/Hosts/bankrupt/TCRLA_Public/110809.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 Tuesday, August 9, 2011, Vol. 12, No. 156 Headlines A N T I G U A & B A R B U D A STANFORD INT'L: Liquidators Win Bid to Get US$20MM in U.K. Assets B R A Z I L BANCO BVA: Fitch Affirms Foreign Currency IDR at 'B-' BANCO PINE: Fitch Affirms LT Issuer Default Rating at 'BB-' INVEPAR: Fitch Assigns 'BB-' Issuer Default Ratings OURINVEST: Moody's Withdraws (P)Ba2(sf) LC Rating of Sr. Shares C A Y M A N I S L A N D S CARNAUBA FUND CLASS E: Shareholders' Final Meeting Set for Aug. 31 CARNAUBA FUND CLASS S: Shareholders' Final Meeting Set for Aug. 31 CIGMA ABSOLUTE: Shareholder Receives Wind-Up Report CIGMA CHINA: Shareholder Receives Wind-Up Report CIGMA GLOBAL: Shareholder Receives Wind-Up Report EPIC CAPITAL: Shareholders' Final Meeting Set for August 19 FOUNDERS CORPORATION: Shareholders' Final Meeting Set for Aug. 16 FRANCK MULTI-ADVISOR CLASS E: Final Meeting Set for August 31 FRANCK MULTI-ADVISOR CLASS S: Final Meeting Set for August 31 ONEWAVE INC: Shareholders' Final Meeting Set for August 9 ONEWAVE LIMITED: Shareholders' Final Meeting Set for August 16 PAN CHINA: Shareholders' Final Meeting Set for August 9 PEQUOT COSMOS OFFSHORE: Shareholders' Final Meeting Set for Aug 19 PEQUOT COSMOS MASTER: Shareholders' Final Meeting Set for Aug. 19 PONTIS LTD: Shareholders' Final Meeting Set for August 19 T R I N I D A D & T O B A G O CL FINANCIAL: CLICO Pays Millions to Two Regional Banks X X X X X X X X * S&P Lowers Rating on United States to 'AA+'; Outlook Negative * 15 Companies in S&P List of Defaulters in Second Quarter * Large Companies With Insolvent Balance Sheets - - - - - =============================== A N T I G U A & B A R B U D A =============================== STANFORD INT'L: Liquidators Win Bid to Get US$20MM in U.K. Assets ----------------------------------------------------------------- Kit Chellel at Bloomberg News reports that London's Central Criminal Court Judge Elizabeth Gloster ordered the release of US$20 million of Stanford International Bank Limited assets frozen in the United Kingdom, with US$5 million to be made available to Grant Thornton, liquidators of the Antigua-based bank. The bank is the center of a multi-billion Ponzi scheme allegedly orchestrated by its owner Robert Allen Stanford, who is currently in jail facing criminal and civil charges. Grant Thornton said it will use the money to fund lawsuits against banks and advisers who worked with Stanford International Bank, according to Bloomberg. The report relates that Grant Thornton lawyers said the accounting firm also hopes to clawback funds from investors who profited from the alleged fraud. As reported in the Troubled Company Reporter-Latin America on Aug. 5, 2011, The Financial Times said Grant Thornton made an application for US$20 million to be released from an estimated US$100 million of assets frozen in the United Kingdom so they can help recover other assets for victims of Mr. Stanford's alleged Ponzi scheme. The court heard that the liquidators would make use of the funds for lawsuits and to help manage and market property assets in the West Indies, according to The Financial Times. The report noted that the liquidators' application was opposed by lawyers for the United Kingdom Serious Fraud Office (SFO) on behalf of the U.S. Department of Justice (DOJ) that said the money should ultimately be repatriated to the U.S. The Financial Times recalled that the assets, mostly invested in hedge funds, were frozen after an earlier Court of Appeal ruling. About Stanford International Bank Domiciled in Antigua, Stanford International Bank Limited -- http://www.stanfordinternationalbank.com/-- is a member of Stanford Private Wealth Management, a global financial services network with US$51 billion in deposits and assets under management or advisement. Stanford Private Wealth Management serves more than 70,000 clients in 140 countries. On Feb. 16, 2009, the U.S. District Court for the Northern District of Texas, Dallas Division, signed an order appointing Ralph Janvey as receiver for all the assets and records of Stanford International Bank, Ltd., Stanford Group Company, Stanford Capital Management, LLC, Robert Allen Stanford, James M. Davis and Laura Pendergest-Holt and of all entities they own or control. The February 16 order, as amended March 12, 2009, directs the Receiver to, among other things, take control and possession of and to operate the Receivership Estate, and to perform all acts necessary to conserve, hold, manage and preserve the value of the Receivership Estate. The U.S. Securities and Exchange Commission on Feb. 17, 2009, charged before the U.S. District Court in Dallas, Texas, Mr. Stanford and three of his companies for orchestrating a fraudulent, multi-billion dollar investment scheme centering on a US$8 billion Certificate of Deposit program. A criminal case was also pursued against Mr. Stanford in June 2009 before the U.S. District Court in Houston, Texas. Mr. Stanford pleaded not guilty to 21 charges of multi-billion dollar fraud, money-laundering and obstruction of justice. Assistant Attorney General Lanny Breuer, as cited by Agence France-Presse News, said in a 57-page indictment that Mr. Stanford could face up to 250 years in prison if convicted on all charges. Mr. Stanford surrendered to U.S. authorities after a warrant was issued for his arrest on the criminal charges. The criminal case is U.S. v. Stanford, H-09-342 (S.D. Tex.). The civil case is SEC v. Stanford International Bank, 09-cv-00298 (N.D. Tex.). =========== B R A Z I L =========== BANCO BVA: Fitch Affirms Foreign Currency IDR at 'B-' ----------------------------------------------------- Fitch Ratings has affirmed these ratings for Banco BVA S.A.(BVA): -- Foreign currency Issuer Default Rating (IDR) at 'B-'; Outlook Stable; -- Short-term foreign currency IDR at 'B'; -- Local currency IDR at 'B-'; Outlook Stable; -- Short-term local currency IDR at 'B'; -- Individual rating at 'D/E'; -- Viability rating at 'b-'; -- Support rating at '5'; -- Support rating floor at 'No floor'; -- National long-term rating at 'BB(bra)'; Outlook Stable; -- National short-term rating at 'B(bra)'; -- Senior unsecured Debt at 'B-/RR4'. BVA's ratings reflect its guarantee's follow-up controls, wide expertise over its medium and small customer's portfolios, and acceptable liquidity. However, they also consider its high leverage, considerable concentration of assets and liabilities, the bank's overall revenue generation dependency on credit origination, low products and regional diversification, fast growth in recent years and small size. After being able to sustain a stable deposits base during the 2008 crisis, albeit with reduced profitability due to lower credit origination, BVA has tripled its credit portfolio, following the resumption of Brazil's GDP growth since 2H'09. Nonetheless, Fitch notes that the bank's provisioning coverage decreased along with this aggressive growth. Its focus continues to be on Middle Market companies, offering plain vanilla credits facilities, primarily Cedulas de Credito Bancario (CCBs), which are securitizable, receivables discount and other financial services. The bank has lengthened its credit portfolio considerably since 2008, mainly with funding from corporate and individual depositors, and sales of portfolios to other securitization vehicles (FDICs). BVA is using close to 100% of its DPGE issuance limit (BRL577 million in December 2010) set by Brazil's Central Bank (Bacen) and, therefore, has low room for further deposits lengthening through the use of this facility, which represent 19% of total deposits. BVA's asset quality indicators are distorted by the fast loan growth in recent years. BVA reduced its credit portfolio growth from 242% in 2009 to a still aggressive 68% in 2010, while NPLs as a share of total loans grew to 5.25% in FY10, from 3.9% in FY09. Thus, Fitch notes that the real quality of BVA's portfolio will be known only after it is seasoned, which might occur in 2011 and 2012 following economic tightening from the government. BVA's results have improved in 2009 and 2010, as lower Net Interest Margins due to growing competition were compensated by higher revenues from CCB issuances (BRL 245 million in 2010 and BRL243 million in 2009), which only occur when new credits are originated. From 2008 to 1Q'11, BVA received capital injections of BRL338 million and paid no dividends in order to support its growth. However, given BVA' hybrid instruments which Fitch deducted on its Fitch core capital ratio, of 11.6% in 1Q'11 (7.4% in 2010), the agency highlights BVA's elevated leverage. Slower portfolio growth, increasing funding sources, as well as funding tenor and costs, aligned with an improvement in Fitch Core Capital to closer to peer average (provided asset quality remains stable), could trigger an upgrade. Further deterioration on these aspects could trigger a downgrade. Fitch believes BVA would seek support from its shareholders in case of difficulties. Nevertheless, Fitch believes this support is possible but not certain, even though some capital injections were made by shareholders recently. Launched in 1994, and based in Sao Paulo, BVA focuses its activities on middle market companies with sales mostly concentrated in the local market. BANCO PINE: Fitch Affirms LT Issuer Default Rating at 'BB-' ----------------------------------------------------------- Fitch Ratings has affirmed the ratings of Banco Pine S.A. (Pine): -- Long-term Issuer Default Rating (IDR) at 'BB-'; Stable Outlook; -- Short-term IDR at 'B'; -- Local currency Long-Term IDR at 'BB-'; Stable Outlook; -- Local currency Short-Term IDR at 'B'; -- Individual rating at 'C/D'; -- Viability rating at 'bb-' -- Support rating at '5'; -- Support rating Floor 'NF' -- National long-term rating at 'A(bra)'; Stable Outlook; -- National short-term rating at 'F1(bra)' -- Banco Pine S.A. USD 125million Subordinated notes at 'B'. Fitch also withdraws its expected rating of 'BB-(exp)' that was previously assigned to an expected Senior Unsecured Note issuance that was postponed by the issuer prior to the issuance. The above ratings reflect Pine's continued strengthening of its position in its operating niche which focuses primarily on upper middle and low corporate segments, its focused strategy further improved profitability through the cross selling of products other than loans which now represent over 30% of revenues, its strong asset quality and conservative provisioning, its liquidity and greater diversification of funding sources. The bank's ratings are driven by the Viability Rating that reflects the above mentioned strengths and also takes into account the still concentrated funding and capital base that is slightly inferior to its peers. Fitch continues to be comfortable with regard to Pine's strategy, risk management controls and systems combined with its conservative provisioning. Also the continuous diversification of its revenue mix is a positive trend. Pine has shown a healthy growth in its loan portfolio while maintaining asset quality. It faces the challenge of maintaining performance consistency in view of the expected greater competition stemming from banks that are increasing their focus to the middle-market corporate segment. Despite recent improvements, funding diversification and the maintenance of a stronger capital base are other challenges for the bank. The bank has been able to access alternative sources of funding; however, its funding still remains concentrated. In addition, high dividend payout ratios have reduced Fitch Core Capital to 13.6%, reflecting a slightly weaker capital base. As of March 31, 2011 Pine's total regulatory capital BIS ratio was 17.1%. A more diversified funding base and a more comfortable Tier I capital ratio combined with the continuation of favorable liquidity, asset quality and profitability could lead to an improvement in the ratings. Founded in 1997, Pine is controlled by Noberto Pinheiro and is listed on the Sao Paulo stock exchange (Bovespa) since 2007. The bank operates through 10 branches and focuses its activities to middle-market companies, especially the upper-middle and low corporate segments (whose net sales exceed BRL500 million). INVEPAR: Fitch Assigns 'BB-' Issuer Default Ratings --------------------------------------------------- Fitch Ratings has assigned foreign and local currency Issuer Default Ratings (IDRs) of 'BB-' to Investimentos e Participacoes em Infraestrutura S.A. (Invepar). Fitch has also assigned Invepar a Long-Term National Scale Rating of 'A(bra)'. The Rating Outlook is Stable. These ratings reflect the group's solid business profile, based on a diversified portfolio of strong cash-generating assets in the Brazilian infrastructure sector. Invepar's ratings are also based on the robust and already proven financial support capacity of its main shareholders, which include the largest pension funds in the country. The ratings are constrained by the company's highly leveraged capital structure, resulting from a high level of investments. The company has a weak liquidity position. The ratings incorporate Fitch's expectations that Invepar will be successful in rolling over its short-term debt. Invepar's asset portfolio comprises: control of Concessao Metroviaria do Rio de Janeiro S.A. (Metro Rio), which accounted for around 48% of pro forma EBITDA and 63% of pro forma debt in 2010; Linha Amarela S/A - LAMSA (Lamsa), which accounted for around 32% of the pro forma EBITDA and 4.5% of pro forma debt; Concessionaria Litoral Norte S.A. (CLN) (approximately 2% of pro forma EBITDA and 1% of the pro forma debt); and Concessionaria Auto Raposo Tavares (CART) (around 15% of pro forma EBITDA and 29% of pro forma debt). The latter three companies are toll road companies. Invepar's portfolio also includes two joint ventures with the Odebrecht group (50% participation): Concessionaria Bahia Norte S.A. (CBN) and Concessionaria Rota do Atlantico S.A. (Rota do Atlantico), which are still pre-operational, and a 24.9% participation in Concessionaria Rio Teresopolis S.A. (CRT). Adequate Business Profile Sustains the Group's Fund Generating Capacity Invepar's business profile benefits from its strong and diversified portfolio of assets in the toll road and public transportation sectors. These businesses offer relatively predictable cash flows. For the latest 12 months (LTM) ended March 31, 2011, Invepar generated BRL329 million of consolidated EBITDA and BRL193 million of cash flow from operations (CFFO). Fitch expects Invepar's EBITDA to climb to about BRL400 million during 2011. Invepar's consolidated free cash flow (FCF) has been negative since 2009, due to a high level of investments. During 2009 and 2010, the group invested about BRL2.9 billion in new projects, resulting in negative FCF of about BRL1.7 billion in 2009 and BRL796 million in 2010. Investments of around BRL2.7 billion until 2015 should continue to pressure the group's cash flow and will lead to additional debt. Commitment of Invepar Shareholders Supports the Group's Financial Flexibility Invepar is controlled by Previ, Funcef and Petros, the three largest pension funds in Brazil, and by group OAS, one of the largest of the heavy construction companies in the country. Since 2009, they have jointly injected around BRL1.73 billion of cash into Invepar, through capital increases (BRL1.4 billion) and the subscription of debentures (BRL338 million). Determining factors for the assigned ratings were the high financial support capacity of Invepar's shareholders and their proven support for Invepar. This support has allowed the company to expand its operations. Aggressive Volume of Investments Should Maintain High Leverage Invepar's consolidated leverage is high for the rating category; most of it is associated with projects under development. The risk of high leverage is partially mitigated by the historical support from shareholders, as well as by the potential capacity of future cash generation by the company from projects under development. On a consolidated basis, the company reported leverage, as measured by the ratio of net debt/EBITDA, of 7.0 times (x) for the LTM ended March 31, 2011. During this period, total consolidated debt was BRL2.4 billion, while cash and marketable securities was BRL132 million. At the holding company level, total debt was BRL481 million, with BRL54 million falling due in the next 12 months. Cash was low at BRL6 million. The company has already contracted long-term financing in order to roll over its short-term debt, and a few others credit lines are being contracted, which helps to mitigate refinancing risks. Debt Service Coverage Ratio at the Holding Company is Manageable In 2010, Invepar covered debt service at the holding company by a ratio of 4.5x through dividends received from Lamsa and interest received on a debenture issued by Metro Rio, which was acquired by Invepar. Fitch projects this ratio to weaken to about 1.2x by 2012, when the company starts to amortize long-term debt. This coverage metric could fall below 1.0x if only the dividend from Lamsa was considered. Currently, the cash flow from Metro Rio is under pressure due to significant investments. Key Rating Drivers A potential rating upgrade may take place in the case of consistent improvement in consolidated credit measures and a sustained improvement in the company's liquidity position. The ratings might be lowered if shareholders do not continue supporting the company through capital injections. The ratings may also be downgraded if the performance of the group's operating subsidiaries deteriorates. Increases of consolidated leverage ratios above those initially estimated by Fitch could also lead to negative rating action, as would large investments or acquisitions not anticipated by Fitch. OURINVEST: Moody's Withdraws (P)Ba2(sf) LC Rating of Sr. Shares --------------------------------------------------------------- Moody's America Latina has withdrawn the definitive ratings of the senior shares of Ourinvest Fundo de Investimento em Direitos Creditorios Financeiros -- Suppliercard ("Ourinvest FIDC -- Suppliercard"). Details on the relevant notes are provided below: Issuer: Ourinvest FIDC - Suppliercard Senior Shares, Withdrawn; previously on Feb 15, 2007 assigned preliminary ratings of (P) Ba2 (sf) (Global Scale, Local Currency) and (P) Aa2.br (sf) (National Scale, Local Currency) Senior Shares, Withdrawn; previously on Dec 21, 2007 assigned definitive ratings of Ba2 (sf) (Global Scale, Local Currency) and Aa2.br (sf) (National Scale, Local Currency) =========================== C A Y M A N I S L A N D S =========================== CARNAUBA FUND CLASS E: Shareholders' Final Meeting Set for Aug. 31 ------------------------------------------------------------------ The shareholders of The Carnauba Fund-Class E will hold their final meeting on August 31, 2011, at 12:00 noon, to receive 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 CARNAUBA FUND CLASS S: Shareholders' Final Meeting Set for Aug. 31 ------------------------------------------------------------------ The shareholders of The Carnauba Fund-Class S will hold their final meeting on August 31, 2011, at 12:00 noon, to receive 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 CIGMA ABSOLUTE: Shareholder Receives Wind-Up Report --------------------------------------------------- The sole shareholder of Cigma Absolute Strategies Fund received on August 8, 2011, the liquidator's report on the company's wind-up proceedings and property disposal. The company's liquidator is: Ogier c/o Barry Wang Chi Lau Telephone: (852) 2217 3487 Facsimile: (345) 949-9877 89 Nexus Way Camana Bay Grand Cayman KY1-9007 Cayman Islands CIGMA CHINA: Shareholder Receives Wind-Up Report ------------------------------------------------ The sole shareholder of Cigma China Evolution Fund Limited received on August 8, 2011, the liquidator's report on the company's wind-up proceedings and property disposal. The company's liquidator is: Ogier c/o Barry Wang Chi Lau Telephone: (852) 2217 3487 Facsimile: (345) 949-9877 89 Nexus Way Camana Bay Grand Cayman KY1-9007 Cayman Islands CIGMA GLOBAL: Shareholder Receives Wind-Up Report ------------------------------------------------- The sole shareholder of Cigma Global Strategies Fund received on August 8, 2011, the liquidator's report on the company's wind-up proceedings and property disposal. The company's liquidator is: Ogier c/o Barry Wang Chi Lau Telephone: (852) 2217 3487 Facsimile: (345) 949-9877 89 Nexus Way Camana Bay Grand Cayman KY1-9007 Cayman Islands EPIC CAPITAL: Shareholders' Final Meeting Set for August 19 ----------------------------------------------------------- The shareholders of Epic Capital Offshore Inc. will hold their final meeting on August 19, 2011, at 10:30 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 KY1-9002 Cayman Islands FOUNDERS CORPORATION: Shareholders' Final Meeting Set for Aug. 16 ----------------------------------------------------------------- The shareholders of Founders Corporation will hold their final meeting on August 16, 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: Kazuhiko Yoshida 15A, Taggart, 109 Repulse Bay Road Hong Kong Telephone: (852) 2528 5016 Facsimile: (852) 2528 5020 FRANCK MULTI-ADVISOR CLASS E: Final Meeting Set for August 31 ------------------------------------------------------------- The shareholders of Franck Multi-Advisor Growth-Class E will hold their final meeting on August 31, 2011, at 12:00 noon, to receive 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 FRANCK MULTI-ADVISOR CLASS S: Final Meeting Set for August 31 ------------------------------------------------------------- The shareholders of Franck Multi-Advisor Growth-Class S will hold their final meeting on August 31, 2011, at 12:00 noon, to receive 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 ONEWAVE INC: Shareholders' Final Meeting Set for August 9 --------------------------------------------------------- The shareholders of Onewave Inc. will hold their final meeting on August 9, 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 ONEWAVE LIMITED: Shareholders' Final Meeting Set for August 16 -------------------------------------------------------------- The shareholders of Onewave Limited will hold their final meeting on August 16, 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: Sun Yilang Telephone: (86 21) 6142 1822 Facsimile: (86 21) 6181 8388 Mirae Asset Tower, 6th Floor No. 166, Lujiazui Ring Rd. Shanghai, PRC 200120 PAN CHINA: Shareholders' Final Meeting Set for August 9 ------------------------------------------------------- The shareholders of Pan China Land (Holdings) Corporation will hold their final meeting on August 9, 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 PEQUOT COSMOS OFFSHORE: Shareholders' Final Meeting Set for Aug 19 ------------------------------------------------------------------ The shareholders of Pequot Cosmos Offshore Fund, Ltd. will hold their final meeting on August 19, 2011, at 11:15 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 PEQUOT COSMOS MASTER: Shareholders' Final Meeting Set for Aug. 19 ----------------------------------------------------------------- The shareholders of Pequot Cosmos Master Fund, Ltd. will hold their final meeting on August 19, 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: Walkers Corporate Services Limited Walker House 87 Mary Street, George Town Grand Cayman KY1-9002 Cayman Islands PONTIS LTD: Shareholders' Final Meeting Set for August 19 --------------------------------------------------------- The shareholders of Pontis Ltd. will hold their final meeting on August 19, 2011, at 10:45 a.m., to receive the liquidator's report on the company's wind-up proceedings and property disposal. The company's liquidator is: Walkers SPV Limited Walker House 87 Mary Street, George Town Grand Cayman KY1-9002 Cayman Islands =============================== T R I N I D A D & T O B A G O =============================== CL FINANCIAL: CLICO Pays Millions to Two Regional Banks ------------------------------------------------------- Jada Loutoo at Trinidad & Tobago Newsday reports that Colonial Life Insurance Company (Trinidad) Limited (CLICO) has paid out millions to regional banks, Bank of Nevis (BN) and Bank of Nevis International (BNI) Limited, after a default judgment was entered against the company in the local courts. CLICO is a subsidiary of CL Financial Limited. CLICO had been taken to court by the two regional banks for the full repayment of all outstanding principal, and interest payments, according to T&T Newsday. The report relates that both banks held Executive Flexible Premium Annuity policies. T&T Newsday notes that the banks' lawsuits were dated May 17, 2010, and judgment was awarded in default of appearance by Clico's attorneys on June 14, 2010. The court ordered Clico to pay BNI the sum of GBP550,003, EUR851,189, and US$2,000,010, and BN GBP150,002 and EUR200,000, T&T Newsday discloses. The insurance company was placed under direct control of the Central Bank in 2009. The report notes that on July 8, 2010, Central Bank filed an application seeking to have the default judgment set aside. As part of its argument, T&T Newsday relates, Clico maintained that BNI was not entitled to the payment of the US$$2,000,010 sum under the EFPA policy as the guaranteed interests rate was 2%, and not 8%, as the bank sought to surrender the EFPA on March 17, 2010, and not March 18, 2010, which was the calculated maturity date for the policy. T&T Newsday discloses that in an apparent change of heart, Clico was given leave on October 10, 2010, to withdraw its objection to the default judgment, and agreed to pay. According to the banks' consolidated financial statements for the year ended June 30, 2010, noted that at the time of approval of the statements, all payments had been honored. This about turn by Clico is now troubling EFPA policyholders, who are now questioning a recent decision by Finance Minister Winston Dookeran, to appeal a similar judgment of the high court that compelled the insurance company to pay six EFPA policy holders more than TT$58.7 million, T&T Newsday relates. As reported in the Troubled Company Reporter-Latin America on July 28, 2011, Caribbean News Now said the Trinidad and Tobago Ministry of Finance has advised CLICO intends to appeal the July 22 High Court judgment against the company. The judgment arose out of claims brought against CLICO by the following claimants: -- St. Christopher and Nevis Social Security Board; -- Alvin Fitzpatrick; -- Darryl Goede and Nancy Goede; -- Lesley-Ann Lucky-Samaroo; -- Vindra Amar; and -- David Knott The High Court found that, while the six claims were different in form, they substantially related to the repayment or return of monies paid by the claimants to CLICO under CLICO's Executive Flexible Premium Annuity Plans (the EFPA agreements), according to Caribbean News Now. Madam Justice Rajnauth-Lee issued a judgment in favor of each of the claimants and against CLICO in respect of the EFPAs, the report related. About CL Financial CL Financial Group Limited is a privately held conglomerate in Trinidad and Tobago. Founded as an insurance company by Cyril Duprey, Colonial Life Insurance Company 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 August 10, 2009, A.M. Best Co. downgraded the financial strength rating to C (Weak) from B (Fair) and issuer credit rating to "ccc" from "bb" of Colonial Life Insurance Company (Trinidad) Limited (CLICO) (Trinidad & Tobago). The ratings remain under review with negative implications. CLICO is an insurance member company of CL Financial Limited (CL Financial), a diversified holding company based in Trinidad & Tobago. According to a TCR-LA report on Feb. 20, 2009, citing Trinidad and Tobago Express, Tobago President George Maxwell Richards 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 =============== * S&P Lowers Rating on United States to 'AA+'; Outlook Negative --------------------------------------------------------------- Standard & Poor's Ratings Services on Friday lowered its long-term sovereign credit rating on the United States of America to 'AA+' from 'AAA'. Standard & Poor's also said that the outlook on the long-term rating is negative. At the same time, Standard & Poor's affirmed its 'A-1+' short-term rating on the U.S. In addition, Standard & Poor's removed both ratings from CreditWatch, where they were placed on July 14, 2011, with negative implications. The transfer and convertibility (T&C) assessment of the U.S. -- S&P's assessment of the likelihood of official interference in the ability of U.S.-based public- and private-sector issuers to secure foreign exchange for debt service -- remains 'AAA'. "We lowered our long-term rating on the U.S. because we believe that the prolonged controversy over raising the statutory debt ceiling and the related fiscal policy debate indicate that further near-term progress containing the growth in public spending, especially on entitlements, or on reaching an agreement on raising revenues is less likely than we previously assumed and will remain a contentious and fitful process. We also believe that the fiscal consolidation plan that Congress and the Administration agreed to this week falls short of the amount that we believe is necessary to stabilize the general government debt burden by the middle of the decade," S&P said in a statement. "Our lowering of the rating was prompted by our view on the rising public debt burden and our perception of greater policymaking uncertainty, consistent with our criteria (see "Sovereign Government Rating Methodology and Assumptions," June 30, 2011, especially Paragraphs 36-41). Nevertheless, we view the U.S. federal government's other economic, external, and monetary credit attributes, which form the basis for the sovereign rating, as broadly unchanged. "We have taken the ratings off CreditWatch because the Aug. 2 passage of the Budget Control Act Amendment of 2011 has removed any perceived immediate threat of payment default posed by delays to raising the government's debt ceiling. In addition, we believe that the act provides sufficient clarity to allow us to evaluate the likely course of U.S. fiscal policy for the next few years. "The political brinksmanship of recent months highlights what we see as America's governance and policymaking becoming less stable, less effective, and less predictable than what we previously believed. The statutory debt ceiling and the threat of default have become political bargaining chips in the debate over fiscal policy. Despite this year's wide-ranging debate, in our view, the differences between political parties have proven to be extraordinarily difficult to bridge, and, as we see it, the resulting agreement fell well short of the comprehensive fiscal consolidation program that some proponents had envisaged until quite recently. Republicans and Democrats have only been able to agree to relatively modest savings on discretionary spending while delegating to the Select Committee decisions on more comprehensive measures. It appears that for now, new revenues have dropped down on the menu of policy options. In addition, the plan envisions only minor policy changes on Medicare and little change in other entitlements, the containment of which we and most other independent observers regard as key to long-term fiscal sustainability. "Our opinion is that elected officials remain wary of tackling the structural issues required to effectively address the rising U.S. public debt burden in a manner consistent with a 'AAA' rating and with 'AAA' rated sovereign peers (see Sovereign Government Rating Methodology and Assumptions," June 30, 2011, especially Paragraphs 36-41). In our view, the difficulty in framing a consensus on fiscal policy weakens the government's ability to manage public finances and diverts attention from the debate over how to achieve more balanced and dynamic economic growth in an era of fiscal stringency and private-sector deleveraging (ibid). A new political consensus might (or might not) emerge after the 2012 elections, but we believe that by then, the government debt burden will likely be higher, the needed medium-term fiscal adjustment potentially greater, and the inflection point on the U.S. population's demographics and other age-related spending drivers closer at hand (see "Global Aging 2011: In The U.S., Going Gray Will Likely Cost Even More Green, Now," June 21, 2011)." "Standard & Poor's takes no position on the mix of spending and revenue measures that Congress and the Administration might conclude is appropriate for putting the U.S.'s finances on a sustainable footing. The act calls for as much as US$2.4 trillion of reductions in expenditure growth over the 10 years through 2021. These cuts will be implemented in two steps: the US$917 billion agreed to initially, followed by an additional US$1.5 trillion that the newly formed Congressional Joint Select Committee on Deficit Reduction is supposed to recommend by November 2011. The act contains no measures to raise taxes or otherwise enhance revenues, though the committee could recommend them. "The act further provides that if Congress does not enact the committee's recommendations, cuts of US$1.2 trillion will be implemented over the same time period. The reductions would mainly affect outlays for civilian discretionary spending, defense, and Medicare. We understand that this fall-back mechanism is designed to encourage Congress to embrace a more balanced mix of expenditure savings, as the committee might recommend. "We note that in a letter to Congress on Aug. 1, 2011, the Congressional Budget Office (CBO) estimated total budgetary savings under the act to be at least US$2.1 trillion over the next 10 years relative to its baseline assumptions. In updating our own fiscal projections, with certain modifications outlined below, we have relied on the CBO's latest "Alternate Fiscal Scenario" of June 2011, updated to include the CBO assumptions contained in its Aug. 1 letter to Congress. In general, the CBO's "Alternate Fiscal Scenario" assumes a continuation of recent Congressional action overriding existing law. "We view the act's measures as a step toward fiscal consolidation. However, this is within the framework of a legislative mechanism that leaves open the details of what is finally agreed to until the end of 2011, and Congress and the Administration could modify any agreement in the future. Even assuming that at least US$2.1 trillion of the spending reductions the act envisages are implemented, we maintain our view that the U.S. net general government debt burden (all levels of government combined, excluding liquid financial assets) will likely continue to grow. Under our revised base case fiscal scenario--which we consider to be consistent with a 'AA+' long-term rating and a negative outlook--we now project that net general government debt would rise from an estimated 74% of GDP by the end of 2011 to 79% in 2015 and 85% by 2021. Even the projected 2015 ratio of sovereign indebtedness is high in relation to those of peer credits and, as noted, would continue to rise under the act's revised policy settings. Compared with previous projections, our revised base case scenario now assumes that the 2001 and 2003 tax cuts, due to expire by the end of 2012, remain in place. We have changed our assumption on this because the majority of Republicans in Congress continue to resist any measure that would raise revenues, a position we believe Congress reinforced by passing the act. Key macroeconomic assumptions in the base case scenario include trend real GDP growth of 3% and consumer price inflation near 2% annually over the decade. "Our revised upside scenario--which, other things being equal, we view as consistent with the outlook on the 'AA+' long-term rating being revised to stable--retains these same macroeconomic assumptions. In addition, it incorporates US$950 billion of new revenues on the assumption that the 2001 and 2003 tax cuts for high earners lapse from 2013 onwards, as the Administration is advocating. In this scenario, we project that the net general government debt would rise from an estimated 74% of GDP by the end of 2011 to 77% in 2015 and to 78% by 2021. Our revised downside scenario--which, other things being equal, we view as being consistent with a possible further downgrade to a 'AA' long-term rating--features less-favorable macroeconomic assumptions, as outlined below and also assumes that the second round of spending cuts (at least US$1.2 trillion) that the act calls for does not occur. This scenario also assumes somewhat higher nominal interest rates for U.S. Treasuries. We still believe that the role of the U.S. dollar as the key reserve currency confers a government funding advantage, one that could change only slowly over time, and that Fed policy might lean toward continued loose monetary policy at a time of fiscal tightening. Nonetheless, it is possible that interest rates could rise if investors re-price relative risks. As a result, our alternate scenario factors in a 50 basis point (bp)-75 bp rise in 10-year bond yields relative to the base and upside cases from 2013 onwards. In this scenario, we project the net public debt burden would rise from 74% of GDP in 2011 to 90% in 2015 and to 101% by 2021. "Our revised scenarios also take into account the significant negative revisions to historical GDP data that the Bureau of Economic Analysis announced on July 29. From our perspective, the effect of these revisions underscores two related points when evaluating the likely debt trajectory of the U.S. government. First, the revisions show that the recent recession was deeper than previously assumed, so the GDP this year is lower than previously thought in both nominal and real terms. Consequently, the debt burden is slightly higher. Second, the revised data highlight the sub-par path of the current economic recovery when compared with rebounds following previous post-war recessions. We believe the sluggish pace of the current economic recovery could be consistent with the experiences of countries that have had financial crises in which the slow process of debt deleveraging in the private sector leads to a persistent drag on demand. As a result, our downside case scenario assumes relatively modest real trend GDP growth of 2.5% and inflation of near 1.5% annually going forward." "When comparing the U.S. to sovereigns with 'AAA' long-term ratings that we view as relevant peers -- Canada, France, Germany, and the U.K. -- we also observe, based on our base case scenarios for each, that the trajectory of the U.S.'s net public debt is diverging from the others. Including the U.S., we estimate that these five sovereigns will have net general government debt to GDP ratios this year ranging from 34% (Canada) to 80% (the U.K.), with the U.S. debt burden at 74%. By 2015, we project that their net public debt to GDP ratios will range between 30% (lowest, Canada) and 83% (highest, France), with the U.S. debt burden at 79%. However, in contrast with the U.S., we project that the net public debt burdens of these other sovereigns will begin to decline, either before or by 2015. "Standard & Poor's transfer T&C assessment of the U.S. remains 'AAA'. Our T&C assessment reflects our view of the likelihood of the sovereign restricting other public and private issuers' access to foreign exchange needed to meet debt service. Although in our view the credit standing of the U.S. government has deteriorated modestly, we see little indication that official interference of this kind is entering onto the policy agenda of either Congress or the Administration. Consequently, we continue to view this risk as being highly remote." "The outlook on the long-term rating is negative. As our downside alternate fiscal scenario illustrates, a higher public debt trajectory than we currently assume could lead us to lower the long-term rating again. On the other hand, as our upside scenario highlights, if the recommendations of the Congressional Joint Select Committee on Deficit Reduction -- independently or coupled with other initiatives, such as the lapsing of the 2001 and 2003 tax cuts for high earners -- lead to fiscal consolidation measures beyond the minimum mandated, and we believe they are likely to slow the deterioration of the government's debt dynamics, the long-term rating could stabilize at 'AA+'." On Monday, S&P will issue separate releases concerning affected ratings in the funds, government-related entities, financial institutions, insurance, public finance, and structured finance sectors. * 15 Companies in S&P List of Defaulters in Second Quarter ---------------------------------------------------------- Globally, 15 companies (13 public and two confidentially rated) defaulted in the second quarter of 2011. The volume of rated debt affected by defaulters in the second quarter was US$39.5 billion, up from five defaults in the first quarter with US$3.6 billion in debt, said an article published Friday by Standard & Poor's Global Fixed Income Research, titled "Quarterly Global Corporate Default Update And Rating Transitions." Of the 15 defaults in second-quarter 2011, eight were domiciled in the U.S., two in Canada, two in New Zealand, and one each in U.A.E, Russia, and France. "On a trailing-12-month basis, the global speculative-grade default rate as of June 2011 was 2%, down slightly from 2.08% at the end of March and 5.12% at the same time in 2010," said Diane Vazza, head of Standard & Poor's Global Fixed Income Research. "The default rate is now at its lowest point since August 2008, the last reading prior to the collapse of Lehman Brothers and the ensuing recession in the U.S." "Overall, credit quality has, in our view, continued to stabilize over the past 18 months, as the number of downgrades has decreased slightly across all regions," said Ms. Vazza. "The downgrade-to- upgrade ratio fell to 0.64% in second-quarter 2011 from 1.10% in the previous quarter." The decrease from the first quarter is the result of a slight uptick in upgrades -- to 3.5% from 2.45% -- along with a decrease in downgrades--to 2.25% from 2.7%. * Large Companies With Insolvent Balance Sheets ----------------------------------------------- Total Total Shareholders Assets Equity Company Ticker (US$MM) (US$MM) ------- ------ --------- ------- ARGENTINA IMPSAT FIBER-$US IMPTD AR 535007008 -17164978 IMPSAT FIBER-CED IMPT AR 535007008 -17164978 IMPSAT FIBER-BLK IMPTB AR 535007008 -17164978 IMPSAT FIBER-C/E IMPTC AR 535007008 -17164978 IMPSAT FIBER NET XIMPT SM 535007008 -17164978 IMPSAT FIBER NET 330902Q GR 535007008 -17164978 IMPSAT FIBER NET IMPTQ US 535007008 -17164978 SOC COMERCIAL PL COMED AR 175824387.4 -338338057 SOC COMERCIAL PL CAD IX 175824387.4 -338338057 SOC COMERCIAL PL COMEC AR 175824387.4 -338338057 SOC COMERCIAL PL CADN SW 175824387.4 -338338057 COMERCIAL PLA-BL COMEB AR 175824387.4 -338338057 SOC COMERCIAL PL CADN EO 175824387.4 -338338057 SOC COMERCIAL 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BZ 21287489 -183535527 NOVA AMERICA-PRF NOVAPN BZ 21287489 -183535527 NOVA AMERICA-PRF 1NOVPN BZ 21287489 -183535527 NOVA AMERICA SA NOVA3 BZ 21287489 -183535527 NOVA AMERICA SA 1NOVON BZ 21287489 -183535527 NOVA AMERICA-PRF NOVA4B BZ 21287489 -183535527 NOVA AMERICA-PRF NOVA4 BZ 21287489 -183535527 CAF BRASILIA-PRF CAFE4 BZ 21097369.71 -903951461 CAFE BRASILIA-PR CSBRPN BZ 21097369.71 -903951461 CAFE BRASILIA SA CSBRON BZ 21097369.71 -903951461 CAF BRASILIA CAFE3 BZ 21097369.71 -903951461 TECEL S JOSE-PRF SJOS4 BZ 19067323.42 -52580501.1 TECEL S JOSE SJOS3 BZ 19067323.42 -52580501.1 TECEL S JOSE-PRF FTSJPN BZ 19067323.42 -52580501.1 TECEL S JOSE FTSJON BZ 19067323.42 -52580501.1 NORDON METAL NORDON BZ 15354597.14 -26859636.7 NORDON MET NORD3 BZ 15354597.14 -26859636.7 NORDON MET-RTS NORD1 BZ 15354597.14 -26859636.7 B&D FOOD CORP BDFC US 14423532 -3506007 LATTENO FOOD COR LATF US 14423532 -3506007 REII INC REIC US 14423532 -3506007 B&D FOOD CORP BDFCE US 14423532 -3506007 CHIARELLI SA CCHON BZ 14300741.22 -46729432.5 CHIARELLI SA CCHI3 BZ 14300741.22 -46729432.5 CHIARELLI SA-PRF CCHPN BZ 14300741.22 -46729432.5 CHIARELLI SA-PRF CCHI4 BZ 14300741.22 -46729432.5 HERCULES HETA3 BZ 12689117.49 -170680899 HERCULES SA-PREF HERTPN BZ 12689117.49 -170680899 HERCULES-PREF HETA4 BZ 12689117.49 -170680899 HERCULES SA HERTON BZ 12689117.49 -170680899 GAZOLA GAZO3 BZ 12452144.11 -40298531.2 GAZOLA SA-PREF GAZPN BZ 12452144.11 -40298531.2 GAZOLA SA-DVD PF GAZO12 BZ 12452144.11 -40298531.2 GAZOLA SA GAZON BZ 12452144.11 -40298531.2 GAZOLA SA-DVD CM GAZO11 BZ 12452144.11 -40298531.2 GAZOLA-RCPT PREF GAZO10 BZ 12452144.11 -40298531.2 GAZOLA-PREF GAZO4 BZ 12452144.11 -40298531.2 GAZOLA-RCPTS CMN GAZO9 BZ 12452144.11 -40298531.2 ARTHUR LANGE-PRF ARLA4 BZ 11642255.92 -17154461.9 ARTHUR LANGE SA ALICON BZ 11642255.92 -17154461.9 ARTHUR LAN-DVD C ARLA11 BZ 11642255.92 -17154461.9 ARTHUR LANGE ARLA3 BZ 11642255.92 -17154461.9 ARTHUR LANG-RT P ARLA2 BZ 11642255.92 -17154461.9 ARTHUR LAN-DVD P ARLA12 BZ 11642255.92 -17154461.9 ARTHUR LANG-RT C ARLA1 BZ 11642255.92 -17154461.9 ARTHUR LANGE-PRF ALICPN BZ 11642255.92 -17154461.9 ARTHUR LANG-RC C ARLA9 BZ 11642255.92 -17154461.9 ARTHUR LANG-RC P ARLA10 BZ 11642255.92 -17154461.9 FERREIRA GUIM-PR FGUIPN BZ 11016542.14 -151840377 FERREIRA GUIMARA FGUION BZ 11016542.14 -151840377 F GUIMARAES-PREF FGUI4 BZ 11016542.14 -151840377 F GUIMARAES FGUI3 BZ 11016542.14 -151840377 CHILE EMPRESA DE LOS F 2940894Z CI 1933599104 -50416404 TELMEX CORP-ADR CSAOY US 1156945109 -122555290 CHILESAT CORP SA TELEX CI 1156945109 -122555290 CLARO COM SA CHILESAT CI 1156945109 -122555290 TELEX-A TELEXA CI 1156945109 -122555290 CHILESAT CO-ADR TL US 1156945109 -122555290 TELEX-RTS TELEXO CI 1156945109 -122555290 CHILESAT CO-RTS CHISATOS CI 1156945109 -122555290 PUERTO RICO TEXTIL SAN CRI-C SNCRISC1 PE 59428057.88 -8824587.31 TEXTIL SAN CRI-C SNCR/C PE 59428057.88 -8824587.31 *********** 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. Agravante, Rousel Elaine T. Fernandez, Valerie U. Pascual, Psyche A. Castillon, 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. 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 * * *