/raid1/www/Hosts/bankrupt/TCRLA_Public/120409.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
Monday, April 9, 2012, Vol. 13, No. 070
Headlines
A R G E N T I N A
AXG GROUP: Creditors' Proofs of Debt Due May 15
CERRADURAS DE PRECISION: Creditors' Proofs of Debt Due May 4
DI PASQUO SACIFIA: Creditors' Proofs of Debt Due May 21
EMPRESA DISTRIBUIDORA: Moody's Cuts CFR to 'B3'; Outlook Negative
FEED-BACK ELECTRONICS: Creditors' Proofs of Debt Due April 25
LA AURACANIA: Creditors' Proofs of Debt Due May 11
NUTRIFROST SA: Creditors' Proofs of Debt Due May 28
SOLTEX SAICA: Creditors' Proofs of Debt Due May 9
ZAREH CHULOIAN: Applies for Bankruptcy Protection
B A R B A D O S
REDJET: Leaves 149 People in Lurch, Group Says
B E R M U D A
64 DEGREES: Owners Say They Had No Choice But to Close Down
B R A Z I L
BRF BRASIL: S&P Lifts Ratings from BB+ on Stronger Credit Metrics
GOL LINHAS: S&P Lowers Global-Scale Corp. Credit Rating to 'B+'
RODOVIAS DO TIETE: Moody's Assigns '(P)Ba2' Issuer Ratings
G U Y A N A
UC RUSAL: To Expand Bauxite Operations in Guyana
U R U G U A Y
* URUGUAY: S&P Raises Sovereign Credit Rating From 'BB+'
M E X I C O
COMISION DE AGUA: Moody's Downgrades Issuer Ratings to 'B1'
T R I N I D A D & T O B A G O
PETROTRIN: Mulls Sale of GTL Plant as Scrap Iron
X X X X X X X X
* BOND PRICING: For the Week April 2 to April 6, 2012
- - - - -
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A R G E N T I N A
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AXG GROUP: Creditors' Proofs of Debt Due May 15
-----------------------------------------------
Jose Luccchetti, the court-appointed trustee for AXG Group SA's
bankruptcy proceedings, will be verifying creditors' proofs of
claim until May 15, 2012.
Mr. Luccchetti will present the validated claims in court as
individual reports. The National Commercial Court of First
Instance No. 15 in Buenos Aires, with the assistance of Clerk
No. 29, will determine if the verified claims are admissible,
taking into account the trustee's opinion, and the objections and
challenges that will be raised by the company and its creditors.
Creditors will vote to ratify the completed settlement plan
during the assembly on Feb. 22, 2013.
The Trustee can be reached at:
Jose Luccchetti
Av. Cordoba 539
Argentina
CERRADURAS DE PRECISION: Creditors' Proofs of Debt Due May 4
------------------------------------------------------------
Eva Mabel Bogado, the court-appointed trustee for Cerraduras de
Precision SA's bankruptcy proceedings, will be verifying
creditors' proofs of claim until May 4, 2012.
Ms. Bogado will present the validated claims in court as
individual reports. The National Commercial Court of First
Instance No. 2 in Buenos Aires, with the assistance of Clerk
No. 4, will determine if the verified claims are admissible,
taking into account the trustee's opinion, and the objections and
challenges that will be raised by the company and its creditors.
The Trustee can be reached at:
Eva Mabel Bogado
Paraguay 1465
DI PASQUO SACIFIA: Creditors' Proofs of Debt Due May 21
-------------------------------------------------------
Miriam Graciela De Luca, the court-appointed trustee for Di
Pasquo Sacifia ahora Di Pasquo SACI's bankruptcy proceedings,
will be verifying creditors' proofs of claim until May 21, 2012.
Ms. De Luca will present the validated claims in court as
individual reports. The National Commercial Court of First
Instance No. 14 in Buenos Aires, with the assistance of Clerk
No. 28, will determine if the verified claims are admissible,
taking into account the trustee's opinion, and the objections and
challenges that will be raised by the company and its creditors.
The Trustee can be reached at:
Miriam Graciela De Luca
Viamonte 1715
Argentina
EMPRESA DISTRIBUIDORA: Moody's Cuts CFR to 'B3'; Outlook Negative
-----------------------------------------------------------------
Moody's Latin America has downgraded Edenor's corporate family
and senior unsecured ratings to B3 from B2 and its national scale
rating to Baa2.ar from A1.ar. In addition, Moody's has changed
the outlook to negative from stable.
Ratings Rationale
The downgrade and outlook change have been prompted by Edenor's
poor operating performance in 2011 and the ongoing issue of
frozen tariffs. The negative outlook reflects Moody's view that,
if the frozen tariff situation is not addressed by the
government, the declining trend in Edenor's operating margins and
negative cash generation will lead to unsustainable operations
sometime in 2013.
In particular, 2011 fiscal year-end results came in below Moody's
expectations with several factors adding substantial pressure on
the company's cash flows. including the apparent drawback in the
government's reduction in energy subsidies, pending tariffs
claims from distribution companies and the upcoming negotiations
with electricity labor unions for salary increases.
The B3 and Baa2.ar ratings reflect Edenor's still acceptable
levels of cash generation although rapidly deteriorating and
relatively comfortable debt profile as well as Edenor's leading
position as the largest distribution utility in the domestic
electricity market.
Moody's continues to have concerns with the overall regulatory
environment in Argentina, which remains a major constraint on the
ratings given the lack of transparency and predictability of the
current regulatory framework. Edenor's tariffs and other terms
of its concession are subject to regulation by the Secretariat of
Energy and the Argentine National Electricity Regulator (ENRE).
Edenor's regulated tariffs have remained frozen for several years
and while the Argentinean regulators authorized adjustments of
Edenor's VAD (value added for distribution) in 2007 and 2008, the
expected cost recovery mechanism (CMM) after those initial
adjustments is not working as anticipated. The absence of a
workable cost recovery mechanism in a climate of growing
inflation is clearly hurting Edenor's operating profits and cash
generation. Not only high inflation rates but also a recent
change in Edenor's service providers' official status has hurt
the company's operating expenses as those increased costs are not
being recovered through the tariffs.
To offset the delays in the CMM, the Energy Secretariat allowed
Edenor to retain funds from the Program for the Rational Use of
Electric Power (PUREE), in order to reimburse the company for the
amounts it is owed under requested CMM increases, which are not
yet reflected in the distribution margin. While this
compensation mechanism may not be sustainable and is less clear
and less transparent than it could have been with the timely
application of the CMM as originally designed, it has allowed
Edenor to maintain its cash generation capacity to some extent.
For the fiscal year ending December, 2011, PUREE funds reached
ARS338 million (approximately US$76 million). While the higher
electricity prices paid by a portion of Edenor's consumers
following the elimination of subsidies will increase the PUREE
funds retained by the company in 2012, those amounts are growing
at a slower pace than inflation. Therefore, the compensation
mechanism established by the PUREE has become less effective in
protecting Edenor's cash flows from growing expenses.
A mitigating factor for Edenor's declining margin trend has been
the acquisition from AEI of several distribution companies that
are regulated by provincial regulatory agencies which have proven
to be more proactive in terms of tariff adjustment and more
supportive of utilities than have the federal regulators.
However, Edenor has sold two of those companies, reducing the
positive impact of a more supportive tariff environment at the
consolidated level.
While Edenor's revenues are in local currency, most of its debt
is dollar denominated, un-hedged, and is, therefore, exposed to
devaluation risk. Historically, Edenor has hedged its upcoming
interest payments but not the principal amounts and Moody's
expectation is that the company will continue to follow the same
policy going forward.
The negative outlook reflects Moody's view that Edenor's margins
and cash flows will continue to experience negative pressure,
given the high inflation rates prevailing in Argentina,
significant cost pressures and the prolonged delay of receiving
any of the many requested tariff adjustments.
If Edenor's margins and cash generation continue their downward
trend and additional cost pressures are not addressed by an
increase or adjustment to its tariffs, the ratings could be
downgraded further. Additionally, any sudden change to the
company's ability to retain cash amounts collected under the
PUREE on its balance sheet while the CMM is not applied could
also negatively affect ratings.
In addition, since Edenor's revenues are in local currency and
its bonds are dollar-denominated, its financial profile could be
substantially and adversely affected by a major devaluation of
the Argentine peso which could add downward rating pressure.
In light of the negative rating outlook, near-term prospects for
the rating to be upgraded are limited. To stabilize the ratings,
Edenor will need to be able to recover its increased costs to
some extent and begin to reverse the negative margin trend on a
sustainable basis.
Longer-term, a rating upgrade will require a more predictable
tariff regime and a more transparent regulatory environment for
the company's operations. In addition, a material change in debt
currency denomination that would reduce dollar exposure by at
least 50% could also have a positive impact.
Empresa Distribuidora Norte S.A (Edenor), headquartered in Buenos
Aires, Argentina, is the country's largest electricity
distribution company. For the last twelve months ending,
December 2011, Edenor reported total revenues of ARS2.2 billion
(approximately US$500 million).
Edenor's ultimate parent, Pampa Energia S.A. (not rated), is the
largest, fully-integrated electricity company in Argentina.
Through its subsidiaries, the company is engaged in the
generation, transmission and distribution of electricity within
the country. Pampa has an installed capacity of approximately
2,187 MW, which represents about 8% of the country's installed
capacity. It also co-controls Transener (not rated), the largest
high-voltage electricity transmission system in Argentina.
FEED-BACK ELECTRONICS: Creditors' Proofs of Debt Due April 25
-------------------------------------------------------------
Susana Mabel Costa, the court-appointed trustee for Feed-Back
Electronics Group SA's bankruptcy proceedings, will be verifying
creditors' proofs of claim until April 25, 2012.
Ms. Costa will present the validated claims in court as
individual reports. The National Commercial Court of First
Instance No. 19 in Buenos Aires, with the assistance of Clerk No.
38, will determine if the verified claims are admissible, taking
into account the trustee's opinion, and the objections and
challenges that will be raised by the company and its creditors.
The Trustee can be reached at:
Susana Mabel Costa
Alicia Moreau de Justo 2030
Argentina
LA AURACANIA: Creditors' Proofs of Debt Due May 11
--------------------------------------------------
Rosa Fernandez, the court-appointed trustee for La Auracania SA's
bankruptcy proceedings, will be verifying creditors' proofs of
claim until May 11, 2012.
Ms. Fernandez will present the validated claims in court as
individual reports. The National Commercial Court of First
Instance No. 11 in Buenos Aires, with the assistance of Clerk
No. 22, will determine if the verified claims are admissible,
taking into account the trustee's opinion, and the objections and
challenges that will be raised by the company and its creditors.
The Trustee can be reached at:
Rosa Fernandez
Av. Corrientes 676
Argentina
NUTRIFROST SA: Creditors' Proofs of Debt Due May 28
---------------------------------------------------
Estudio Stolkiner y Asociados, the court-appointed trustee for
Nutrifrost SA's reorganization proceedings, will be verifying
creditors' proofs of claim until May 28, 2012.
The Trustee will present the validated claims in court as
individual reports. The National Commercial Court of First
Instance No. 14 in Buenos Aires, with the assistance of Clerk
No. 28, will determine if the verified claims are admissible,
taking into account the trustee's opinion, and the objections and
challenges that will be raised by the company and its creditors.
Creditors will vote to ratify the completed settlement plan
during the assembly on March 21, 2013.
The Trustee can be reached at:
Estudio Stolkiner y Asociados
Av. Cordoba 1367
Argentina
SOLTEX SAICA: Creditors' Proofs of Debt Due May 9
-------------------------------------------------
Estudio Aguilar Pinedo, the court-appointed trustee for Soltex
Saica's reorganization proceedings, will be verifying creditors'
proofs of claim until May 9, 2012.
The Trustee will present the validated claims in court as
individual reports. The National Commercial Court of First
Instance No. 6 in Buenos Aires, with the assistance of Clerk
No. 12, will determine if the verified claims are admissible,
taking into account the trustee's opinion, and the objections and
challenges that will be raised by the company and its creditors.
Creditors will vote to ratify the completed settlement plan
during the assembly on March 1, 2013.
The Trustee can be reached at:
Estudio Aguilar Pinedo
Rascado Fernandez y Asociados
Argentina
ZAREH CHULOIAN: Applies for Bankruptcy Protection
-------------------------------------------------
Zareh Chuloian SACIF applied for bankruptcy protection. The
company has defaulted on its payments last Dec. 16, 2011.
===============
B A R B A D O S
===============
REDJET: Leaves 149 People in Lurch, Group Says
----------------------------------------------
NationNews reports that after shelling out more than a quarter
million dollars for a chartered flight to Panama on REDjet
(Airone Caribbean/Airone Ventures Limited) and for hotel rooms
and tours, a group of 149 people say they've been left high and
dry by the airline, with no answers about how they will be
compensated or accommodated.
The group from the Sagicor and TMR Sports Clubs was scheduled to
fly out this morning for the planned April 5 to 9 trip, but up to
Tuesday had no idea what their next move would be, according to
NationNews.
The report relates that Club members, speaking on condition of
anonymity, revealed that US$128,885 was paid in full for the
Easter weekend charter flight, and bookings made for
accommodation at Hotel El Panama and tours at an additional cost
of US$169,115.
However, NationNews notes that REDjet subsequently announced on
March 16 that it was suspending all services. NationNews says
that even after that development, one woman said, REDjet gave
assurances that the flight would still take off.
CEO Says Operations to Resume
Chief Executive Officer Ian Burns said he expects the air carrier
to shortly resume operations, according to RJR News.
RJR News relates that Mr. Burns wrote to employees, informing
them that a solution appears to be on the horizon. RJR News
notes that Mr. Burns states in the letter that there are
encouraging signals from the Barbados Government and there is
hope that a resolution will be found in a short period.
As reported in the Troubled Company Reporter on April 2, 2012,
Trinidad Express related that Trinidad and Tobago Transport
Minister Devant Maharaj said REDjet's license to fly has been
revoked by the Trinidad and Tobago Civil Aviation Authority
(TTCAA), since the Barbados Civil Aviation Department (BCAD) by a
letter dated March 20 had advised REDjet that they were
suspending the Air Operators Certificate (AOC) issued the
airline.
About REDjet
REDjet (Airone Caribbean/Airone Ventures Limited) is a startup
low-cost carrier (LCC) based at the Grantley Adams International
Airport in Christ Church, Barbados, near Bridgetown.
Incorporated in Barbados, the privately owned airline features a
fleet of McDonnell Douglas MD-82 and MD-83 aircraft.
* * *
As reported in the Troubled Company Reporter-Latin America on
March 26, 2012, RJR News reports that REDjet's decision to
suspend all flights came a day after the airline announced the
addition of its new route to Antigua and Barbuda. REDjet
officials are calling on the Barbadian government for close to
$8,000,000 in assistance, and to receive the same subsidies as
other airlines, RJR News noted. The report disclosed that Mr.
Maharaj said governments cannot continue to expose themselves as
a guarantor to private enterprises.
=============
B E R M U D A
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64 DEGREES: Owners Say They Had No Choice But to Close Down
-----------------------------------------------------------
The Royal Gazette Online reports that a spokesperson for 64ø at
Port Royal Golf Course said that the bar and restaurant's
controlling shareholders had no choice but to close it down after
they became aware of mounting issues surrounding the lease and
relating to former Managing Director Claudio Vigilante.
Thai restaurant Silk, which was part of Mr. Vigilante's Fresco's
group up until October 2011, has also closed and it's not known
at this time whether it will reopen, according to The Royal
Gazette Online. The report relates that the two restaurants had
employed about 18 staff in total.
The Royal Gazette Online says that a slew of legal actions have
been filed by and against Mr. Vigilante arising from the change
in control last year of 64ø and Silk, formerly part of the
Fresco's marketing group.
The spokesperson for 64ø told The Royal Gazette in an interview
that the shareholders had become aware of unpaid renovation
bills, and also could not overcome issues with the terms of the
64ø lease and the restaurant's design, which included long terms
of operation seven days a week, a large staff, and a golf check-
in procedure that didn't require golfers to come through the main
doors where the bar and restaurant was located. The Royal
Gazette Online relates that in addition, one of the shareholders
in 64ø also recently suffered a serious health issue and had to
go abroad.
The spokesperson said that the staff employed at 64ø would all be
paid through their last pay period and the entity that owns the
restaurant would most likely be wound up, The Royal Gazette
Online notes.
The report relays that Fresco's group at one time included
Fresco's (now Maria's) restaurant, as well as Opus Bar & Lounge
(O Bar), Silk, Aqua and 64ø.
However, The Royal Gazette Online notes that in 2011, 64ø and
Silk had a change in controlling shareholders and Mr. Vigilante
left.
The Royal Gazette Online says that Aqua had closed down and its
holding company, Associated Ventures, was deregistered. Each of
the restaurants had separate and different shareholders, the
report disclose. Mr. Vigilante kept Fresco's and renamed it
Maria's Ristorante, and also took over the space previously
occupied by Bar One trading as Opus Bar & Lounge, The Royal
Gazette Online adds.
Each of the restaurants was owned by groups of various
shareholders but managed by Mr. Vigilante.
The Royal Gazette Online recalls that a judgment in default was
made in January this year against Mr. Vigilante in the amount of
BM$267,985.86 for renovation work done at 64ø by M&M
Construction.
According to the judgment, the report relates Mr. Vigilante
unsuccessfully argued to set aside that judgment, contending the
company that had employed him as general manager should assume
responsibility for paying the money owed to M&M.
The Royal Gazette Online notes that another contractor, GSC Ltd,
issued a writ again Mr. Vigilante, while Bristol Cellar and
another vendor have separately issued writs against Associated
Cuisine.
Mr. Vigilante said the GSC writ has since been withdrawn.
Rosemarie Madeiros, who was Fresco's group vice-president and
accountant, with Church Bay Trust as trustee of Ariel Trust,
filed a writ against Christopher Trott, Andrea Dismont, Royal
Cuisine and Associated Express, The Royal Gazette Online says.
Meanwhile, the report relates that Mr. Vigilante has filed writs
against Royal Cuisine Ltd, Christopher Trott et al, Associated
Express Ltd and Christopher Trott alone.
Associated Express is the company linked to Silk Thai Cuisine
while Royal Cuisine is the company linked to 64ø, The Royal
Gazette Online notes.
Last February, Mr. Pettingill issued a minority shareholder's
writ in the matter of Royal Cuisine Ltd, in which he raised a
number of concerns including the alleged transfer of funds from
Royal Cuisine to Bar One and/or Associated Cuisine without formal
authorization of the board of directors, The Royal Gazette Online
adds.
The petition stated that Royal Cuisine had had a demand loan
facility with a local bank for up to BM$1 million, The Royal
Gazette Online discloses.
===========
B R A Z I L
===========
BRF BRASIL: S&P Lifts Ratings from BB+ on Stronger Credit Metrics
-----------------------------------------------------------------
Standard & Poor's Ratings Services raised its ratings on BRF
Brasil Foods S.A. to 'BBB-' from 'BB+'.
"At the same time, we assigned our 'brAAA' Brazilian national
scale corporate credit rating to the company," S&P said.
"We also raised our ratings on the 2020 and 2017 bonds of
subsidiaries BFF International Ltd. and Sadia Overseas Ltd.," S&P
said.
Total rated debt is US$1 billion. The outlooks are stable.
"The upgrade reflects our view that BRF's business profile has
improved following the full integration of Sadia and BRF," said
Standard & Poor's credit analyst Flavia Bedran.
"Due to its strong branded portfolio, efficient hedging strategy,
and leading market positions in most of the segments in which it
operates in Brazil, BRF has been able to pass on raw material
price increases to end products, resulting in resilient cash
flows and higher margins, which are consistently above 10%," S&P
said.
"The higher cash flows have contributed to a gradual reduction in
debt, which we expect to be flat for next couple of years despite
the company's growth strategy," S&P said.
"We assess BRF's financial profile as intermediate," S&P said.
"The stable outlook reflects our expectation that BRF will
maintain its financial discipline, even if M&A transactions
occur, and will continue to pass on raw material price hikes to
end customers," S&P said.
GOL LINHAS: S&P Lowers Global-Scale Corp. Credit Rating to 'B+'
---------------------------------------------------------------
Standard & Poor's Ratings Services lowered its 'BB-' global-scale
corporate credit rating on Sao Paulo-based Gol Linhas Aereas
Inteligentes S.A. (Gol) to 'B+'. "We also lowered the 'brA'
Brazil national scale rating to 'brBBB'. The outlook is
negative," S&P said.
"The rating action reflects the deterioration in Gol's financial
risk profile and our expectation that its credit metrics will
improve slowly as a result of low yields, stemming from price
competition and high fuel costs. We view the company's business
risk profile as weak, and its financial profile as highly-
leveraged. The ratings also reflect the company's exposure to
the
cyclicality and capital intensity of the air transport industry,
which leads to high financial leverage. Gol's prudent liquidity
strategy, which includes sound cash reserves and low debt
maturities during the next two years, and its solid market
position in the Brazilian airline industry, partially offset
these risks," S&P said.
"We see Gol's business profile as weak, given the intrinsic
cyclicality of the industry. While domestic demand fundamentals
are favorable, low fares and high fuel prices have hurt the
company's profitability and cash generation, decreasing its
credit metrics to less than our expectations. Gol lost some
market share in 2011 and has recently presented decreased load
factors in its domestic flights as it begins to adjust ticket
prices to cope with higher fuel costs. We expect that its
profitability will improve following its recently-announced
strategy to reduce capacity, including fleet reduction, route
rearrangement, and labor force cuts. However, we understand that
it might take more than a few quarters to turn around the
negative EBIT and achieve the high range of the company's
guidance: a 7% margin for 2012. On the positive side, we believe
that its low-cost business model, still supports its competitive
position, especially its CASK (cost per available seat per
kilometer) ex-fuel of about Brazilian Real (R$) 9, the lowest in
the industry in Brazil," S&P said.
RODOVIAS DO TIETE: Moody's Assigns '(P)Ba2' Issuer Ratings
----------------------------------------------------------
Moody's America Latina Ltda assigned (P)Ba2 issuer ratings on the
global scale and Aa3.br on the Brazilian national scale to
Concessionaria Rodovias do Tiete S.A. At the same time, Moody's
assigned a (P)Ba2 rating on the global scale and a Aa3.br rating
on the Brazilian National scale to Rodovias do Tiete's proposed
BRL650 million senior secured amortizing debentures with a final
maturity in 12 years that will be issued in the domestic market.
Assignment of the final rating is predicated on a review of
documents and verification of the final financing structure. The
outlook is stable for all ratings. This is the first time
Moody's has assigned ratings to Rodovias do Tiete.
The BRL650 million debentures will be secured by the pledge of
the concessionaire's equity shares, future receivables of its
toll revenues and indemnification rights over the concession
assets. The debenture holders will also benefit from a cash
reserve account for debt service, which will be funded three
months in advance of each scheduled semi-annual interest and
principal payment. The concessionaire will also need to maintain
a three-month cash reserve for all operating and maintenance
expenses. The debentures will not contain any type of cross
default provision with immediate and ultimate shareholders or its
affiliates.
Proceeds from Rodovias do Tiete's proposed debentures will be
used to finance capital expenditure (capex) needs over the life
of the concession, including 96.5 kilometers of road expansion
over the next four years. The Brazilian Ministry of
Transportation has approved this project as a priority investment
for the development of road transportation infrastructure in the
country. As a result, the project's proposed debt issue
qualifies for tax incentives for investors under the framework of
Law 12,431/2011.
In the immediate term, however, the company will use a portion of
the proceeds to pay off existing short-term debt of approximately
BRL480 million. Rodovias do Tiete took on this existing short-
term debt with a pool of five banks primarily to finance the
payment of around BRL517 million in concession fees to the
government of the state of Sao Paulo during the period May 2009
through October 2010.
Ratings Rationale
The (P)Ba2 and Aa3.br ratings reflect the diversified role of the
Rodovias do Tiete's road system, which connects the cities of
Bauru, Piracicaba and Campinas and other major routes in the
state of Sao Paulo. Through its 415-kilometer extension,
Rodovias do Tiete serves a relatively small but evolving service
area. The ratings also consider an implied support from Rodovias
do Tiete's ultimate shareholders. The stable regulatory
environment prevailing in the state of Sao Paulo further supports
the ratings.
The existence of important competing routes, comprising the SP-
280, SP-075 and SP-348 roads, along with Rodovias do Tiete's
currently weak asset features, constrain the ratings. The
limited track record for traffic at the nine existing toll
plazas, as well as the increases in leverage expected as the
capital expenditures program remains sizable until 2016, further
constrain the ratings.
The (P) provisional ratings will remain in place until the full
disbursement of the BRL650 million for Rodovias do Tiete. Should
the company fail to obtain the full amount as described above,
Moody's will review all ratings accordingly. These 12-year
debentures are crucial to implementing the concessionaire
investment program successfully and to improving Rodovias do
Tiete's liquidity position.
The issuer ratings reflect Moody's assessment of Rodovias do
Tiete overall credit quality and ability to honor long-term
senior unsecured financial obligations and contracts. The
proposed debentures benefit from several structural features such
as step-in-rights in the event of default and restriction on
dividend payments according to the performance of certain
financial covenants. These credit enhancements allow creditors
to quickly detect deterioration in the company's operating
performance, but do not provide enough support to justify a
rating uplift.
Rodovias to Tiete's road system serves a relatively small but
evolving service area. Current asset features are relatively
weak, which aggravates the impact that existing large competing
routes are having on the system. Nevertheless, Rodovias do
Tiete's diversified traffic profile could eventually insulate its
cash flows against potential economic volatility. Contributing
60% of consolidated traffic, the western section carries mostly
agricultural freight. The eastern section generates 25% of
consolidated traffic, and features diversified industries and
commuters. The middle section is less developed and accounts only
for 15% of total traffic.
Nine toll plazas have been in operation since November 2009, but
the track record for toll traffic has been moderately weak. In
2011, the company reported toll traffic of 42.2 million
equivalent vehicles, which was just 1.2% higher than in 2010.
Performance in 2011 was negatively affected by the work on
pavement recovery, which restricted the access of heavy trucks on
SP-300 between the cities of Botucatu and Tiete. Going forward,
Moody's expects investments in expansion and Brazilian GDP growth
to support material improvement in traffic. Since the initial
works for road recovery have been completed, Rodovias do Tiete's
accumulated traffic volume during the first two months of 2012
was already 4.6% higher than the traffic volume in the same
period of the previous year.
Moody's forecasts that Rodovias do Tiete's leverage will remain
high over the medium term given a sizeable capital expenditures
program, which Management's estimates at approximately BRL 1.3
billion throughout the concession period. The next four years
are particularly critical since Rodovias do Tiete is expected to
invest around BRL400 million for 96.5 kilometers in expansion,
primarily on the construction of second lanes on the roads SP-101
(Campinas -- Tiete) and SP-308 (Piracicaba-Salto) and a detour
around the cities of Piracicaba and Maristela.
At the same time, Moody's expects a significant improvement in
traffic volumes over the next four years, supported by these
investments in expansion and Brazil's projected growth rates in
GDP of approximately 3%-4% per year. Annual tariff increases in
line with inflation as measured by the consumers price index
(IPC-A) will also support top line revenue growth. Additionally,
the average tariffs at certain toll plazas are expected to grow
above inflation from 2013 through 2015. According to the
regulatory framework in the state of Sao Paulo, toll roads with
double lanes are entitled to a 40% higher tariff than toll roads
with only a single lane.
Going forward, Moody's expects Funds From Operations (FFO) to
consistently grow throughout the projected period, from BRL4
million in 2011, or 0.7% of total debt, to BRL97 million in 2014,
or 12% of total debt. Moody's expects interest coverage to
improve from 1.0x in 2011 to 2.7x in 2014. The major risks to
these projections are traffic volumes falling below expectations
and cost overruns, which are typical of toll road concessions
during the ramp-up phase.
In spite of its high leverage in the near term, Moody's expects
Rodovias do Tiete to have an adequate liquidity position in light
of the proposed long-term amortizing debentures, which feature a
tailor-made payment schedule with a 24-month grace period until
the first principal payment and higher debt payments towards the
final maturity. The company also applied for a BRL150 million
credit line with the BNDES for unexpected cash needs. If
approved this loan will share the same guarantees provided by the
debenture-holders and will rank pari-passu in terms of seniority
and payment schedule.
In the absence of the BNDES credit line, the company would need
to rely on strong support from its current shareholders to cover
any unexpected cash needs, such as a breach of financial
covenants because of prolonged weak traffic volumes. Rodovias do
Tiete is currently owned by a joint venture of the Cibe
Investimentos e Participacoes - CIBEPAR (50%) and ASCENDI
International Holdings B.V. (50%). ASCENDI is a large Portuguese
concession group with interests in 18 toll roads with over 3,000
kilometers of road, mainly in Europe. CIBEPAR is a Brazilian
holding company incorporated by the Bertin group for investments
in infrastructure. CIBEPAR currently participates in the capital
of four toll road concessions in the states of Sao Paulo and
Minas Gerais. The Bertin group has recently announced a joint
venture with the Italian group Atlantia (A3, stable), one of the
largest toll road operators in Europe, to consolidate its toll
road investments in Brazil. Moody's views this association as a
positive development for the relatively weak credit profile of
the Bertin group. Atlantia has committed to subscribing new
shares for BRL64 million in the new intermediary holding company
that will own a 50% interest in Tiete.
ARTESP, the transportation regulatory agency in the state of Sao
Paulo, has been responsible for the regulation and oversight of
transportation concessions since 2002. In spite of the
relatively short track record, ARTESP has fostered a transparent
and stable regulatory framework in the state of Sao Paulo, which
Moody's deems as the most supportive regulatory environment for
toll road concessions in Brazil.
The stable outlook reflects Moody's expectation that Rodovias do
Tiete will secure long-term funding as planned and that traffic
volume will grow in line or above the growth of the Brazilian
GDP.
The ratings could be upgraded if traffic volume increases above
Moody's forecasts so that FFO over debt stays above 14% and
interest coverage exceeds 2.5x on a sustainable basis.
The ratings could be downgraded if traffic volume consistently
stays below Moody's forecast so that FFO remains lower than 8%
over debt and interest coverage stays below 1.8x for an extended
period.
Concessionaria Rodovias do Tiete S.A. holds a 30-year toll road
concession to expand, operate and maintain five roads in the
interior of Sao Paulo, which the state regulatory agency ARTESP
granted under a single concession in April 2009. The road system
operated by Rodovias do Tiete consists of 415 kilometers and
includes the following road sections: SP-300 (Corredor Marechal
Rondon Leste), SP-308 (Rodovia do Acucar), SP-101, SP-113 and SP-
209. The service area includes 24 municipalities, where the
largest cities are Bauru, Campinas, and Piracicaba. R odovias do
Tiete reported Net Sales of BRL145 million (USD87 million) and
EBITDA of BRL85 million (USD51 million) in 2011.
Rodovias do Tiete is currently owned by a joint venture of the
Cibe Investimentos e Participacoes - CIBEPAR (50%) and ASCENDI
International Holdings B.V. (50%).
===========
G U Y A N A
===========
UC RUSAL: To Expand Bauxite Operations in Guyana
------------------------------------------------
Caribbean News Now reports that the Bauxite Company of Guyana
Inc. (BCGI)/ RUSAL has invested over US$21 million in additional
equipment for its operations at Aroiama, Region 10. The company
is a subsidiary of United Company RUSAL Plc.
Prime Minister Samuel Hinds said that the company plans to expand
its operations into new areas and mining, according to Caribbean
News Now.
The report notes that RUSAL/BCGI General Manager Ruslan Volokhov
said that equipment will aid the company to expand its operations
in the Upper Berbice River area, thus creating more jobs and
wealth for the people of Guyana.
In 2007, Caribbean News Now recalls that RUSAL sealed an
agreement with the government of Guyana, which saw the
commencement of the Aroaima operations. The agreement gives the
government of Guyana control over 10 percent share in the
company, which produces over 2.2 million tons of bauxite
annually, the report relays.
United Company RUSAL Plc -- http://www.rusal.com-- engages in
the production and sale of aluminum products. The company
engages in bauxite and nepheline ore mining and processing;
alumina refining; and aluminum smelting and refining operations.
It also involves in the sale of bauxite and alumina; and various
primary aluminum products, including alloys, as well as value-
added products, such as aluminum sheets, ingots, and billets.
* * *
As reported in the Troubled Company Reporter-Europe on March 21,
2012, The Financial Times said that two Russian billionaires have
clashed publicly over corporate governance at the world's largest
aluminium company, after Viktor Vekselberg said United Company
Rusal was in "deep crisis" because of bad management and a heavy
debt load. The FT related that Mr. Vekselberg resigned as
Rusal's chairman on March 14, saying it had been transformed from
"a world leader in the aluminum industry into a company
overburdened by debt and involved in a huge number of legal
battles and social conflicts".
=============
U R U G U A Y
=============
* URUGUAY: S&P Raises Sovereign Credit Rating From 'BB+'
--------------------------------------------------------
Standard & Poor's Ratings Services raised its long-term foreign
and local currency sovereign credit ratings on the Oriental
Republic of Uruguay to 'BBB-' from 'BB+'. "We also raised our
short-term foreign and local currency ratings to 'A-3' from 'B'
on the Republic. The outlook on the long-term ratings is stable,"
S&P said.
"Standard & Poor's also changed its transfer and convertibility
assessment on Uruguay to 'BBB+' from 'BBB'. As per our sovereign
rating methodology, we are withdrawing our recovery rating of '2'
on Uruguay. Our recovery analysis is only applicable to
speculative-grade issuers," S&P said.
"At the same time, we are equalizing our rating on the Central
Bank of Uruguay with the sovereign rating by raising our long-
term foreign and local currency ratings on the Central Bank of
Uruguay to 'BBB-' from 'BB-'," S&P said.
"We also raised our long-term corporate credit rating on state-
owned Administracion Nacional de Combustibles Alcohol y Portland
(ANCAP) 'BB' from 'BB-'. The outlook is stable. This rating
action results from our assessment of a 'very high' likelihood
that the government of Uruguay would provide timely and
sufficient extraordinary support to the company in the event of
financial distress, and from our 'b+' stand-alone credit profile
(SACP) on ANCAP," S&P said.
"The upgrade is based on Uruguay's sound economic growth
prospects and improving external and fiscal indicators, as
foreign direct investment strengthens and improves economic
diversification," said Standard & Poor's credit analyst Sebastian
Briozzo.
"Prudent economic policies in recent years, backed by a broad
political consensus, have allowed Uruguay to grow rapidly and
reduce its main credit vulnerabilities. Per capita real GDP
growth averaged about 6% between 2006 and 2011. In contrast with
much of South America, Uruguay managed to grow rapidly without a
significant improvement in its terms of trade in the last
decade," S&P said.
"The stronger external performance provides policy flexibility to
withstand the impact of a potential external shock, especially
from negative developments transmitted through Uruguay's still
significant economic links with Argentina (B/Stable/B). Economic
diversification and more market-oriented policies have reduced
the relative importance of Uruguay's financial and trade links
with its neighbor. The combination of stronger external
accounts, gradually lower levels of dollarization (now 50% of
total loans and 72% of total deposits), and the fruits of a
sovereign debt management strategy that has materially reduced
roll-over risk in the next five years provides greater scope for
the government to maintain stability in the event of potential
external shocks," S&P said.
===========
M E X I C O
===========
COMISION DE AGUA: Moody's Downgrades Issuer Ratings to 'B1'
-----------------------------------------------------------
Moody's de Mexico downgraded Comision de Agua Potable y
Alcantarillado de Quintana Roo (CAPA) issuer ratings to B1
(Global Scale, local currency) and Baa2.mx (Mexico National
Scale) from Ba3 and Baa1.mx, respectively. The outlook was
revised to negative from stable.
At the same time, Moody's downgraded debt ratings to Ba2 (Global
Scale, local currency) and A2.mx (Mexico National Scale) from
Baa3 and Aa2.mx to CAPA's MXN 315 million (original face value)
enhanced loan from IDEFIN.
Ratings Rationale
The rating action to downgrade CAPA's issuer rating was prompted
by the recent decision to downgrade the ratings of the State of
Quintana Roo to B1/Baa2.mx from Ba2/A2.mx, negative outlook.
CAPA has a public mandate to provide water and sewage services in
the state and, therefore, shares the same own-source revenue
base. The rating action also reflects (i) CAPA's ties with the
State of Quintana Roo, as it subsidizes CAPA's infrastructure
projects, and (ii) the State's role in the management decisions
of the company.
The negative outlook reflects uncertainty on the margin of action
that CAPA will have to impose future tariff increases to cover
its operating expenditures and infrastructure projects. The
outlook also reflects the negative outlook on Quintana Roo's
issuer ratings.
The downgrade of the debt ratings to Ba2/A2.mx from Baa3/Aa2.mx
to CAPA's enhanced loan of MXN 315 million (original face value)
from IDEFIN, reflects the downgrade of Quintana Roo's issuer
ratings, as it is backed by 5% of state's federal participations.
The ratings rationale reflects the strengths derived from credit
enhancements embedded in the loan contracts, offset by Moody's
assessment that underlying contract enforcement risks, economic
risks and credit culture risks (for which the issuer rating acts
as a proxy) are embedded in the loans ratings.
What Could Change The Ratings Up/Down
Deterioration in CAPA's financial performance, owing to either
insufficient tariff increases and/or higher capital expenditures
that lead to further increases in debt levels, could exert
downward pressure on the ratings. A downgrade of the State of
Quintana Roo issuer ratings (B1/Baa2.mx, negative outlook) could
also exert downward pressure on CAPA's ratings.
Albeit unlikely in the medium term, an upgrade of the State of
Quintana Roo's issuer ratings could also exert upward pressure on
the ratings, provided that CAPA succeeds in improving its
liquidity position, cash financing balances, and debt metrics.
Given the links between the enhanced loan and the credit quality
of the obligor, a further downgrade of the State of Quintana
Roo's issuer ratings could exert further downward pressure on the
ratings for the loan. Conversely, an upgrade of the State of
Quintana Roo's issuer ratings could result in an upgrade of the
ratings on the loan.
===============================
T R I N I D A D & T O B A G O
===============================
PETROTRIN: Mulls Sale of GTL Plant as Scrap Iron
------------------------------------------------
RJR News reports that Petroleum Company of Trinidad and Tobago
(Petrotrin) is reportedly considering selling the controversial
$2.8 billion World Gas to Liquids (GTL) plant at its Pointe-a-
Pierre refinery as scrap iron.
RJR News, citing Trinidad Newsday, relates that Chairman Lindsay
Gillette said: "We are actually considering right now whether we
should use this plant as scrap iron. That's a lot of money and
that money could have been better spent in looking for crude."
Trinidad Newsday reports that Mr. Gillette reportedly added that
if some use cannot be made of the plant, the only other options
were to "scrap and sell it out or we just let it rot," according
to RJR News.
RJR News notes that saying it was wrong for the company to have
given foreign shareholders control of the US$2.8 billion spent to
build the plant, Mr. Gillette said the matter is currently in
arbitration and he had no idea whether Petrotrin will recover any
money.
About Petrotrin
Petroleum Company of Trinidad and Tobago is the major state-owned
oil company in Trinidad and Tobago. The company was established
in 1993 by the merger of Trintopec and Trintoc, two state-owned
oil companies. Petrotrin's main holdings are extensive, mature
onshore fields located across southern Trinidad. Large areas
have been leased out to small private producers who are able to
make a profit on wells that are unprofitable for Petrotrin,
giving it higher labor costs. The company operates a refinery at
Pointe- Pierre, just north of San Fernando in south Trinidad.
Most crude petroleum produced in Trinidad is exported without
being refined. The refinery depends on imported crude (mostly
from Venezuela), which is either used domestically or exported.
* * *
As reported in the Troubled Company Reporter-Latin America on
June 9, 2010, Trinidad Express said that four members of
Petrotrin submitted their resignation letters. According to the
report, Malcom Jones resigned as chairman of Petrotrin and from
the State boards. The report related board members Lawford
Dupres, who chaired the National Petroleum board, attorney Kerwin
Garcia and Andrew McIntosh had also resigned. Prime Minister
Kamla Persad-Bissessar, the report noted, said that Cabinet had
ordered a forensic audit of Petrotrin as there were "grounds for
suspicion of misconduct" at Petrotrin similar to what may have
transpired at special-purpose State enterprise UDeCOTT. The
report said that the company was experiencing serious financial
difficulties resulting in high cost overruns of its refinery
upgrade. The situation was exacerbated by a US$12 billion
lawsuit by World GTL Inc. against Petrotrin, the report added.
===============
X X X X X X X X
===============
* BOND PRICING: For the Week April 2 to April 6, 2012
-----------------------------------------------------
Issuer Coupon Maturity Currency Price
------ ------ -------- -------- -----
ARGENTINA
---------
ARGENT-$DIS 8.28 12/31/2033 USD 71.5
ARGENT-$DIS 8.28 12/31/2033 USD 75.5
ARGENT-PAR 1.18 12/31/2038 ARS 43.97
ARGENT-EURDIS 7.82 12/31/2033 EUR 56
ARGENT-EURDIS 7.82 12/31/2033 EUR 65
ARGENT-EURDIS 7.82 12/31/2033 EUR 62.39
ARGENT-JPYDIS 4.33 12/31/2033 JPY 42
ARGENT-JPYPAR 0.45 12/31/2038 JPY 15
ARGENT-JPYPAR&GDP 0.45 12/31/2038 JPY 8
ARGNT BOGAR 2 2/4/2018 ARS 141
ARGNT-BOCON PRE9 2 3/15/2014 ARS 74.1
EMP DISTRIB NORT 9.75 10/25/2022 USD 58
EMP DISTRIB NORT 9.75 10/25/2022 USD 58.25
PROV BUENOS AIRE 9.625 4/18/2028 USD 65.89
PROV BUENOS AIRE 9.375 9/14/2018 USD 72.57
PROV BUENOS AIRE 9.375 9/14/2018 USD 72.75
PROV BUENOS AIRE 10.875 1/26/2021 USD 73.59
BRAZIL
------
BANCO CRUZEIRO 8.875 9/22/2020 USD 80
REDE EMPRESAS 11.125 USD 54
REDE EMPRESAS 11.125 USD 52.88
REDE EMPRESAS 11.125 USD 38.02
CAYMAN ISLAND
-------------
BANCO BPI (CI) 4.15 11/14/2035 EUR 46.38
BANCO BPI (CI) 4.15 11/14/2035 EUR 60.88
BCP FINANCE BANK 5.01 3/31/2024 EUR 54.25
BCP FINANCE BANK 5.31 12/10/2023 EUR 56.63
BCP FINANCE CO 5.543 EUR 30.83
BCP FINANCE CO 4.239 EUR 32.63
BES FINANCE LTD 6.625 EUR 97.75
BES FINANCE LTD 4.496 2/7/2035 EUR 40.94
BES FINANCE LTD 5.58 EUR 43.83
BES FINANCE LTD 4.5 EUR 53
CAM GLOBAL FIN 6.08 12/22/2030 EUR 71.5
CHINA AUTOMATION 7.75 4/20/2016 USD 75.02
CHINA FORESTRY 10.25 11/17/2015 USD 56
CHINA FORESTRY 10.25 11/17/2015 USD 55.88
CHINA SUNERGY 4.75 6/15/2013 USD 52
EFG ORA FUNDING 1.7 10/29/2014 EUR 52.42
ESFG INTERNATION 5.753 EUR 34.94
JINKOSOLAR HOLD 4 5/15/2016 USD 55.15
LDK SOLAR CO LTD 4.75 4/15/2013 USD 49.26
LDK SOLAR CO LTD 4.75 4/15/2013 USD 49.26
LDK SOLAR CO LTD 10 2/28/2014 CNY 57
LDK SOLAR CO LTD 4.75 4/15/2013 USD 85.32
LUPATECH FINANCE 9.875 USD 71
LUPATECH FINANCE 9.875 USD 72.5
PUBMASTER FIN 5.943 12/30/2024 GBP 73.32
PUNCH TAVERNS 4.767 6/30/2033 GBP 72.68
RENHE COMMERCIAL 11.75 5/18/2015 USD 60.05
RENHE COMMERCIAL 13 3/10/2016 USD 62
RENHE COMMERCIAL 11.75 5/18/2015 USD 60.38
RENHE COMMERCIAL 13 3/10/2016 USD 60.88
SOLARFUN POWER H 3.5 1/15/2018 USD 66.13
SOLARFUN POWER H 3.5 1/15/2018 USD 67.5
CHILE
-----
AGUAS NUEVAS 3.4 5/15/2012 CLP 1.265
CGE DISTRIBUCION 3.25 12/1/2012 CLP 20.1
ESVAL S.A. 3.8 7/15/2012 CLP 12.6
MASISA 4.25 10/15/2012 CLP 20.42
QUINENCO SA 3.5 7/21/2013 CLP 25.54
PUERTO RICO
-----------
PUERTO RICO CONS 6.5 4/1/2016 USD 69.98
VENEZUELA
---------
PETROLEOS DE VEN 5.5 4/12/2037 USD 59.28
PETROLEOS DE VEN 5.37 4/12/2027 USD 56
VENEZUELA 7 3/31/2038 USD 70.65
VENEZUELA 7 3/31/2038 USD 70.5
VENEZUELA 6 12/9/2020 USD 73
***********
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, Ivy B. Magdadaro, Frauline S.
Abangan, and Peter A. Chapman, Editors.
Copyright 2012. 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 Peter Chapman at 240/629-3300.
* * * End of Transmission * * *