/raid1/www/Hosts/bankrupt/TCRLA_Public/121101.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
L A T I N A M E R I C A
Thursday, November 1, 2012, Vol. 13, No. 218
Headlines
A R G E N T I N A
AIRES PLUS: Creditors' Proofs of Debt Due Nov. 6
CALL CENTER: Creditors' Proofs of Debt Due Nov. 22
JULAN SRL: Creditors' Proofs of Debt Due Nov. 27
LA BORDONA: Creditors' Proofs of Debt Due Nov. 19
* REPUBLIC OF ARGENTINA: S&P Cuts Sovereign Credit Ratings to 'B-'
B R A Z I L
CONCESSIONARIA BAHIA: Moody's Assigns 'B1' CFR; Outlook Stable
INVEPAR: Fitch Affirms 'BB-' Issuer Default Rating
TELEMAR PARTICIPACOES: Moody's Cuts Global Scale Rating to 'Ba1'
C A Y M A N I S L A N D S
APT SATELLITE: Commences Liquidation Proceedings
APT SATELLITE LINK: Commences Liquidation Proceedings
BLACKSTONE HBL: Creditors' Proofs of Debt Due Nov. 6
GLENWOOD FOCUS: Members' Final Meeting Set for Nov. 5
HSBC LION: Creditors' Proofs of Debt Due Nov. 13
HSBC ROSE: Creditors' Proofs of Debt Due Nov. 13
HSBC ROSE INVESTMENT: Creditors' Proofs of Debt Due Nov. 13
PLAINFIELD CAPITAL: Creditors' Proofs of Debt Due Nov. 8
WISE ACRE: Commences Liquidation Proceedings
E L S A L V A D O R
* EL SALVADOR: Gets $30MM IDB Loan to Improve Productivity
J A M A I C A
LIME JAMAICA: Forkes Out $30 Million for Repairs Following Sandy
M E X I C O
HILASAL MEXICANA: Files for Bankruptcy, to Keep 620 Staff
T R I N I D A D & T O B A G O
CARIBBEAN AIRLINES: ATR Examines 6-Week Old Aircraft Problem
X X X X X X X X
* Upcoming Meetings, Conferences and Seminars
- - - - -
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A R G E N T I N A
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AIRES PLUS: Creditors' Proofs of Debt Due Nov. 6
------------------------------------------------
Susana Luisa Erusalimsky, the court-appointed trustee for Aires
Plus SA's bankruptcy proceedings, will be verifying creditors'
proofs of claim until Nov. 6, 2012.
Ms. Erusalimsky will present the validated claims in court as
individual reports. The National Commercial Court of First
Instance No. 12 in Buenos Aires, with the assistance of Clerk
No. 23, 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 Luisa Erusalimsky
Espinosa 2501
Argentina
CALL CENTER: Creditors' Proofs of Debt Due Nov. 22
--------------------------------------------------
Eva Mabel Bogado, the court-appointed trustee for Call Center
Buenos Aires SA's bankruptcy proceedings, will be verifying
creditors' proofs of claim until Nov. 22, 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
JULAN SRL: Creditors' Proofs of Debt Due Nov. 27
------------------------------------------------
Oscar Alfredo Arias, the court-appointed trustee for Julan SRL's
bankruptcy proceedings, will be verifying creditors' proofs of
claim until Nov. 27, 2012.
Mr. Arias will present the validated claims in court as individual
reports. The National Commercial Court of First Instance No. 18
in Buenos Aires, with the assistance of Clerk No. 35, 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:
Oscar Alfredo Arias
Carlos Pellegrini 1063
Argentina
LA BORDONA: Creditors' Proofs of Debt Due Nov. 19
-------------------------------------------------
Alberto J. Gimenez, the court-appointed trustee for La Bordona
SA's bankruptcy proceedings, will be verifying creditors' proofs
of claim until Nov. 19, 2012.
Mr. Gimenez will present the validated claims in court as
individual reports. The National Commercial Court of First
Instance No. 8 in Buenos Aires, with the assistance of Clerk
No. 16, will determine if the verified claims are admissible,
taking into account the trustee's opinion, and the objections and
challenges that will be raised by the company and its creditors.
The Trustee can be reached at:
Alberto J. Gimenez
Rosario 814
Argentina
* REPUBLIC OF ARGENTINA: S&P Cuts Sovereign Credit Ratings to 'B-'
------------------------------------------------------------------
Standard & Poor's Ratings Services lowered its unsolicited long-
term sovereign credit ratings on the Republic of Argentina to 'B-'
from 'B'. The outlook on the long-term ratings is negative. S&P
also lowered its transfer and convertibility assessment on
Argentina to 'B-' from 'B'.
Rationale
"The downgrade reflects our view that the government of Argentina
could face increasing debt management risks. This follows the
ruling by the Second Circuit Court of Appeals of the U.S.
affirming the judgment of the New York District Court granting
summary judgment to plaintiffs on their claims for breach of an
equal treatment provision in the terms of the bonds. This ruling
could effectively increase Argentina's liabilities and the
government's debt service. In addition, we consider that recent
negative events highlight the increasing challenges the government
of Argentina will likely continue to face to define its economic
policy management and financial program over the near term. These
events include the payment in local currency of a province
liability denominated in U.S. dollars issued under Argentinean law
and the blocking of a navy ship in Ghana by litigants from the
2001 sovereign default," S&P said.
"Although we don't expect the Appeal Court rule in New York to
have an immediate impact on debt service because the procedure for
implementing the equal treatment provision has not yet been
defined, it will make it more difficult for Argentina to normalize
its relationship with private, bilateral, and multilateral
lenders. Argentina has now been in default with Paris Club lenders
for 11 years," S&P said.
"Our rating on Argentina is also based on our view that policies
enacted since the October 2011 presidential elections could, over
time, increase the risk of a deterioration in the country's
macroeconomic framework, put pressure on its external liquidity,
and weaken its medium-term growth prospects. These policies
include rising restrictions on international trade and access to
foreign currency, a modification to the Central Bank charter, and
growing public-sector intervention into different sectors of the
economy," S&P said.
"We believe that these actions could exacerbate the existing
weaknesses in Argentina's economy, including high inflation (which
continues to appreciate Argentina's real exchange rate) and
increasingly rigid government expenditures, and result in a
deteriorating medium-term fiscal outlook and investment
conditions. We expect real GDP to expand about 1.5% in 2012," S&P
said.
"Although Argentina had $45.3 billion of international reserves at
the end of September 2012, equal to five months of current account
payments, we see risks to the nation's external liquidity over the
medium term. The combination of a weak global economy, growing
uncertainty from both foreign and local market participants, and
restricted access to foreign financing could, over time, raise the
risk of a loss of external liquidity," S&P said.
"High inflation contributed to a decrease in the real value of
government local currency debt over the past five years. That,
along with balanced budgets or small deficits until 2011 and rapid
GDP growth, led to a decline in debt versus GDP since 2007.
Argentina's gross general government debt is falling toward 39% of
GDP at the end of 2012 from 60% in 2007. The central government
relies on public-sector entities to refinance maturing market
debt, a policy that has moderated its rollover risk. In addition,
principle payments on capital market debt are expected to decrease
significantly in 2013. However, the government will still need to
service a significant payment on the GDP warrants bond on Dec. 15,
2012, for a combination of US$2.8 billion denominated in U.S.
dollars and US$834 million denominated in Argentinean pesos. After
that, we expect external debt payments with private creditors
(excluding multilateral and bilateral entities) to fall from $7.0
billion in 2012 (about 1.4% of GDP) to $4.0 billion in 2013 (0.7%
of GDP) and $2.0 billion in 2014 (0.3% of GDP). We assume
government agencies will continue to cover financing for budget
deficits," S&P said.
Outlook
The negative outlook indicates at least a one-in-three chance of a
downgrade over the next 12 months. We could consider lowering our
ratings as a result of increasing risks on external debt payments
stemming from the legal actions against Argentina in international
courts; a worsening external position, mostly likely from
financial outflows; or additional policy actions that exacerbate
political polarization and further diminish Argentina's growth
prospects. On the other hand, the ratings could stabilize if we
see that the government takes actions that restore investor
confidence about the economy's medium-term prospects (on the
monetary or structural front) and, thus, reduce uncertainty about
its external liquidity position.
Ratings List
Downgraded
To From
Republic of Argentina
Sovereign Credit Rating B-/Negative/B B/Negative/B
T&C Assessment B- B
===========
B R A Z I L
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CONCESSIONARIA BAHIA: Moody's Assigns 'B1' CFR; Outlook Stable
--------------------------------------------------------------
Moody's America Latina Ltda assigned a B1 corporate family rating
on the global scale and a Baa1.br corporate family rating on the
Brazilian national Scale to ConcessionAria Bahia Norte S.A.
("CBN"). At the same time, Moody's assigned a B1 rating on the
global scale and Baa1.br rating on the Brazilian National scale to
BRL38 million senior secured non-convertible amortizing debentures
with maturity of 7 years that will be issued by CBN in the
domestic market. The outlook is stable for all ratings. This is
the first time Moody's has assigned ratings to CBN.
Ratings Rationale
The proceeds of the debentures will be used to partially finance
CBN's capital expenditures (CAPEX) program. Pursuant to the
concession contract, CBN has the obligation to invest BRL1.7
billion (nominal) over the life of the concession (2010 to 2035),
of which BRL456 million need to be invested between 2012 and 2017,
primarily related to road duplication works mandated by the
concession contract. The largest portion of the long-term
financing (up to BRL326 million) will be provided by the Banco do
Nordeste do Brasil ("BNB"), a Brazilian regional development bank;
the remaining debt portion will be provided by the State of
Bahia's development agency - DESENBAHIA (BRL35 million), and the
proceeds of another tranche of debentures (BRL35 million), which
were issued in May 2012.
The debentures will be secured by the pledge of the company's
shares and its concession rights including cash and receivables
resulting from the operation of the concession. These guarantees
will be equally shared with BNB and Desenbahia. The debentures'
indentures will not contain any cross default provisions with
immediate and ultimate shareholders, nor with BNB's loan. The B1
and the Baa1.br ratings reflect the important service that CBN
provides through its 121.5 kilometer (km) road system, which
serves a robust economic area near the metropolitan area of
Salvador, the capital city of the State of Bahia (the largest
state in Northeast Brazil as measured by GDP and population). The
relatively stable regulatory environment that has prevailed in the
State of Bahia, without any record of unilateral actions against
private toll road concessionaires, and the company's access to
long-term funding at subsidized rates to support its CAPEX program
further supports the ratings.
Notwithstanding the absence of other competing modes of
transportation, the existence of a competing route near one of the
system roads (BA526) somewhat constrains the rating. In addition,
the lack of a significant traffic track record, the relatively
high concentration of freight traffic, which is typically highly
correlated with GDP, as well CBN's high leverage and its sizeable
CAPEX program, further constrain the ratings. As a result, Moody's
traffic projections are slightly more conservative than those
prepared by CBN. Moody's expects that leverage, as measured by
Funds from Operations (FFO)-to-Debt will remain high over the
medium-term horizon, given the sizeable CAPEX program.
Moody's estimates the FFO-to-Debt at -0.4% in 2013, starting to
improve to 1.0% in 2016, finally reaching 2.8% in 2018. The
forecasted growth in FFO is expected to come mainly from annual
traffic growth, which Moody's has conservatively estimated to be
in line with Brazilian GDP growth. Moody's also estimates that
Interest Coverage will deteriorate to 0.9x in 2014 from 1.1x in
2012, when it starts to recover, reaching 1.0x in 2015, and 1.1x
in 2016.
In spite of CBN's high leverage, Moody's expects that the company
will have a satisfactory liquidity position in light of the
committed long-term funding from BNB, which will finance about 72%
of CBN's CAPEX program between 2012 and 2017. The proceeds of the
BRL38 million debentures will further strengthen the company's
liquidity position not only by strengthening the company's debt
profile but also because of its back-ended amortization schedule,
which will concentrate the payment of larger amounts of principal
in the last four years of the life of the debentures.
CBN's toll tariffs are adjusted annually by inflation, as measured
by the consumer price index (IPC-A). Also pursuant to the
concession contract, tariffs are sufficiently insulated from
events outside the control of the concessionaire so that CBN can
request the rebalancing of the contract in case such events occur.
Any additional capital expenditures that the government may
require CBN to undertake outside the scope of the concession
contract will give CBN the right to request financial-economic
equilibrium of the contract, either through tariff adjustments
and/or the extension of the concession period. The stable outlook
reflects Moody's opinion that CBN will be able to secure long-term
funding as represented by CBN, and that traffic will grow in line
with the Brazilian GDP.
The ratings could be upgraded if traffic volume increases above
Moody's forecast so that FFO / Debt stays above 5% and interest
coverage exceeds 1.6x on a sustainable basis.
The rating could be downgraded if traffic volume consistently
stays below Moody's forecast, so that FFO / Debt becomes lower
than 1.0%, and interest coverage goes below 1.0x on a sustainable
basis.
On August 17, 2010, Concessionaria Bahia Norte S.A. (CBN) signed
the concession contract with the: (i) Agencia Estadual de Servi‡os
P£blicos de Energia, Transporte e Comunicacoes do Estado da Bahia
("AGERBA"), (ii) Departamento de Infra-Estrutura de Transportes da
Bahia ("DERBA"), and (iii) Secretaria de Infra-Estrutura do Estado
da Bahia ("SEINFRA") to expand, operate and maintain the 121.5 km,
BA093 road system, which includes the BA 093/512/521/524/526/535
roads in the eastern region of the State of Bahia, Northeast
Brazil, for a 25-year period.
CBN operates five toll plazas. In the LTM 06/2012, CBN had net
sales of BRL66 million, and net profit of BRL3 million, as
compared to 2011, when CBN reported net sales of BRL42 million,
and a net loss of BRL12 million.
INVEPAR: Fitch Affirms 'BB-' Issuer Default Rating
--------------------------------------------------
Fitch Ratings has affirmed Investimentos e Participacoes em
Infraestrutura S.A.-Invepar's (Invepar) foreign and local currency
Issuer Default Ratings (IDRs) at 'BB-' and the long-term national
scale rating at 'A(bra)'. The Rating Watch Negative has been
removed and the Rating Outlook is Stable.
The removal of the Rating Watch Negative and affirmation of the
ratings reflects the continued financial support of Invepar's
shareholders to finance the group's aggressive business expansion.
The capital injection of BRL1.3 billion that took place during
March 2012 will help Invepar to expand its operations while
maintaining its debt at manageable levels and bolstering its
balance sheet.
Fitch expects that the company will fund its significant
investment program over the next few years with project finance
debt that has no-recourse to Invepar, thus preserving the
company's credit quality. The main investment projects for
Invepar during 2012 were the addition of 45.9% in the concession
of Guarulhos Airport in Brazil and 100% of Linea Amarilla S.A.C.'s
(Via Parque Rimac), a highway in Peru, capitalized by OAS in March
2012. These two projects will require equity from Invepar of
BRL1.1 billion in total.
Low Business Risk
Invepar's ratings continue to reflect the group's diversified
portfolio within Brazil's infrastructure sector. These assets
have a stable track record of operations with robust cash flow
generation and also provide a high degree of future cash flow
earnings visibility.
The ratings also reflect the aggressive expansion strategy of
Invepar and the proven financial support of its shareholders.
These include the three largest pension funds in the country,
namely Previ, Funcef and Petros, alongside Group OAS (IDR 'B' /
national rating 'A-(bra)'), one of the largest companies in
Brazil's heavy construction sector. During 2009 to 2012, these
entities jointly provided around BRL3 billion of cash to Invepar,
highlighting their strong commitment to the group.
Invepar's mature businesses in the toll road and urban mobility
segments, namely Linha Amarela S.A.-LAMSA (Linha Amarela),
Concessao Metroviaria do Rio de Janeiro S.A.(Metro) and
Concessionaria Rio-Teresopolis (CRT), should support a consistent
improvement in the company's consolidated operating cash
generation. In turn, Lamsa and CRT's cash generation is expected
to be reflected in the flow of dividends to the holding company
from 2012 onwards.
Leverage Should Remain High
According to Fitch's base case, Invepar's consolidated net
adjusted debt to EBITDAR ratio excluding project finance debt is
expected to remain close to 4.0x by the end of 2012, and increase
to 5.0x by 2015. These expectations compare with actual net
adjusted debt to EBITDAR ratios of 5.9x in 2011 and 6.0x in 2010.
On a consolidated basis including project finance debt, Invepar's
net adjusted debt to latest 12 months (LTM) EBITDAR ratio is
expected to increase to 15.0x by the end of 2012 from 4.5x in June
2012, and 7.2x in 2011, according to Fitch's methodology.
Increasing leverage ratios are partially mitigated by the low
level of corporate debt and by the positive track record of
tangible shareholder support. In addition, the potential cash
generation from the projects currently under development should
also benefit the group's credit profile.
As of June 30, 2012, Invepar's total consolidated debt was BRL3.5
billion and cash plus marketable securities was BRL1.8 billion.
Total corporate debt totaled BRL2.1 billion and there was no debt
at the holding company level for the period. The new projects of
Guarulhos Airport and Via Parque Rimac should add around BRL2.7
billion of new debt, including BRL2.3 billion of concession
obligation, according to Fitch's methodology, by the end of 2012.
This debt will fund the expected capex for these projects that
will total BRL6.9 billion combined from 2012 to 2016.
Fitch's base case scenario estimates that Invepar's subsidiaries
will distribute around BRL120 million of dividends to the group by
2016. This is based on historical payments seen within the group.
Supporting this expectation, Invepar received BRL66 million of
dividends from mature assets such as Lamsa and CRT during 2011.
Dividends received are likely to be around BRL80 million during
2012.
Guarulhos Project: High Risks But Good Opportunities
The Guarulhos Airport project is risky due to the uncertainties
surrounding the airport regulatory environment in Brazil. This
project is part of the first lot of airport concessions in the
country. In addition, this project is significantly leveraging,
with projected capex of BRL5.8 billion from 2012 to 2016 and a
concession grant fee of BRL16.3 billion throughout the 20 years of
concession totaling around BRL800 million per year. This project
is expected to cost Invepar around BRL956 million from 2012 to
2016, in total. The likelihood of a positive rate of return for
this project strongly depends on the ability of Invepar to capture
a high level of commercial revenues at the airport.
The Guarulhos project has a high potential for future growth that
depends on significant investments to increase its operating
capacity. The expectation of increasing cash flow is based on the
fact that Guarulhos is the busiest airport in Latin America and
the main access to international flights in Brazil. The airport
benefits from its location in the metropolitan region of Sao Paulo
serving a population of 19.7 million people. Sao Paulo is the
highest income region in the country responsible for 33% of
Brazilian GDP.
Strong EBITDAR Generation By 2015
Fitch believes that the potential for higher cash generation for
Invepar is high from 2015 onwards, following the maturity of
projects currently in their ramp-up phase. Consolidated EBITDAR
should reach BRL1.5 billion to BRL1.8 billion in 2016, with close
to 60% of EBITDAR deriving from Guarulhos Airport. Invepar
generated consolidated EBITDAR of BRL378 million and funds from
operations (FFO) of negative BRL187 million during the LTM to June
30, 2012. These results compare with EBITDAR of BRL314 million
and FFO of BRL52 million in 2010.
Key Rating Drivers
A positive rating action is not likely until the company matures
its investments.
The ratings could be downgraded following a change in shareholder
policy of supporting the company through capital injections, as
needed. The ratings could also be downgraded in the case of a
substantial deterioration in the performance of the group's
operating subsidiaries. Increased corporate net leverage ratio
above 6.0x, and relevant acquisitions/investments not expected by
the agency could also result in a negative rating action.
TELEMAR PARTICIPACOES: Moody's Cuts Global Scale Rating to 'Ba1'
----------------------------------------------------------------
Moody's Investors Service and Moody's Latin America (jointly
Moody's) have downgraded Oi S.A. (Oi)'s ratings to Baa3 from Baa2
on its global scale and to Aa1.br from Aaa.br on its national
scale. Concurrently, Moody's has downgraded the ratings of Telemar
Participacoes S.A., Oi's holding company and owner of 56% of its
common shares, to Ba1 from Baa3 on its global scale and to Aa2.br
from Aa1.br on its national scale.
The ratings downgrades were triggered by Oi's elevated leverage
and the fact that the company will take longer to deleverage than
Moody's expected. The outlook on the ratings is negative. These
actions complete the ratings review initiated by Moody's on August
16, 2012.
In addition, Moody's has withdrawn the Baa2 rating of Telemar
Norte Leste S.A, a wholly owned subsidiary of Oi S.A.
Ratings downgraded:
Oi S.A.
- Senior unsecured issuer rating: to Baa3 from Baa2 (global
scale); to Aa1.br from Aaa.br (national scale)
- EUR750 million 5.125% senior unsecured foreign currency notes
due in 2017: to Baa3 from Baa2 (global scale)
- USD1.0 billion 5.500% in Senior Unsecured Foreign Currency
Notes due in October 2020: to Baa3 from Baa2 (global scale)
- USD142 million 9.500% in Senior Unsecured Foreign Currency
Notes due 2019: to Baa3 from Baa2 (global scale)
- BRL540 million senior unsecured local currency debentures due
in 2013: to Baa3 from Baa2 (global scale); to Aa1.br from
Aaa.br (national scale)
- BRL2.25 billion in senior unsecured local currency debentures
issued in two series due in 2014 and 2020 : to Baa3 from Baa2
(global scale); to Aa1.br from Aaa.br (national scale)
- BRL2.0 billion senior unsecured debentures issued in two series
due in 2017 and 2020: to Baa3 from Baa2 (global scale); to
Aa1.br from Aaa.br (national scale)
- BRL2.35 billion 7-year senior unsecured debentures due in 2018:
to Baa3 from Baa2 (global scale); to Aa1.br from Aaa.br
(national scale)
- BRL1.1 billion 9.75% 5-year global notes due in 2016: to Baa3
from Baa2 (foreign currency rating)
- USD1.5 billion 5.75% senior unsecured notes due 2022: to Baa3
from Baa2 (global scale);
Telemar Participacoes S.A.
- BRL500 million in 7-year senior unsecured debentures: to Ba1
from Baa3 (global scale); to Aa2.br from Aa1.br (national
scale)
- BRL500 million in senior unsecured debentures with final
maturity in October 2018: to Ba1 from Baa3 (global scale); to
Aa2.br from Aa1.br (national scale)
Ratings withdrawn:
Telemar Norte Leste S.A.
- Senior unsecured issuer rating: Baa2 (global scale)
Ratings Rationale
"The ratings downgrades were based on Oi's elevated leverage,"
says Nymia Almeida, a Moody's Vice President - Senior Analyst and
lead analyst for Oi. "During the last twelve months ended June 30,
2012, Oi's adjusted gross debt leverage was at 4.1x, which
negatively compares with other telecommunications companies in the
same rating category," explains Ms. Almeida. "In addition, Oi's
ability to deleverage significantly in the near term will be
limited given the competitive environment in the Brazilian
telecoms industry and strong regulatory pressure on the country's
telecoms companies to undertake high capital expenditure, as well
as by the company's rigid dividend commitments."
Moody's believes that Oi's business model is solid and supportive
of the company's operating margins given the strong pent-up demand
for data and pay-TV services in Brazil and the absence of a price
war among the country's telecom operators. However, the highly
competitive nature of the telecoms industry in Brazil (at least
three strong operators per type of service) forces telcos to
immediately pass on operating savings to consumers, limiting the
ability of these companies to materially grow revenue and improve
margins. In addition, the strong regulatory pressure on Brazilian
telcos, including Oi, to undertake high levels of capital
expenditure, in order to ensure continuing service improvements
and coverage expansion, exerts negative pressure on their free
cash flow. Moreover, Oi has high dividend payout commitments vis-
a-vis its net profit generation. For these reasons, Moody's
believes that Oi will be able to deleverage only gradually.
Oi's ratings reflect (1) the leading market position of its
incumbent wireline operations; (2) a sound EBITDA margin, albeit
declining; (3) the company's prudent financial policies, which
contribute to its overall strong debt protection metrics; and (4)
its good level of corporate governance standards when compared
with other Brazilian companies. The ratings also reflect Moody's
expectation that Oi will be able to sustain its current margins by
continuing to bundle services and increasing the proportion of its
total service revenues that comprises data services, thereby
reducing churn of fixed and mobile subscribers and improving its
revenue mix. This way, the company would manage to reduce
operating costs in a business environment characterized by
declining prices. At the same time, the ratings are principally
constrained by Oi's current high leverage and the challenges the
company faces to address the decline in its higher-margin fixed-
line telephony revenues, as well as the fierce competition in the
Brazilian telecoms industry.
Oi's liquidity position is good. As of June 30, 2012, the
company's cash on hand plus projected cash flow for the following
18 months were sufficient to cover interest payments, debt
maturities, taxes, working capital, capex and dividends. As of
that date, Oi also had sizeable committed and undrawn credit
facilities amounting to around BRL11 billion (USD5.5 billion).
Oi's revolving credit facilities not only support the company's
liquidity position but also highlight its conservative financial
policies.
Moody's standard adjustments to Oi's debt and EBITDA include those
related to operating leases; pension funds; foreign exchange
derivatives; refinanced taxes; and Anatel credit lines.
The ratings of Telemar Participacoes S.A. are based on the
structural subordination of its debt to the debt at Oi. Moody's
estimates that, as of June 2012, Telemar Participacoes' total debt
represented 10% of the aggregate debt of the group.
The negative ratings outlook is based on Moody's view that Oi may
find it more difficult to deleverage its balance sheet than the
rating agency initially anticipated, as a result of which the
company's credit metrics may remain weak for the Baa3 rating
category for an extended period of time.
What Could Change The Ratings Down/Up
Moody's could downgrade Oi's ratings if management's efforts to
reduce debt leverage via sales of assets or other initiatives are
not successful in the next 12-18 months. Negative revenue growth
or a decline in the company's market share due to a stronger
competitive environment than anticipated could also result in
negative rating pressure. Specifically, the ratings may come under
downward pressure if (1) Oi's adjusted debt/EBITDA ratio stay
close to 4.0x for an extended period of time; or (2) the company's
adjusted EBITDA minus capex/interest deteriorates below 1.5x.
However, a stabilization of Oi's ratings could result if the
company deleverages to the extent that its adjusted gross debt
decreases well below current 4.1x, provided such deleveraging is
not a consequence of a significant decline in capex relative to
revenue. Therefore, positive revenue growth and stable margins at
current levels are conditions that must precede a positive ratings
action.
The principal methodology used in rating Oi, Telemar Participacoes
S.A., and Telemar Norte Leste S.A. was the Global
Telecommunications Industry Methodology published in December
2010.
Moody's National Scale Ratings (NSRs) are intended as relative
measures of creditworthiness among debt issues and issuers within
a country, enabling market participants to better differentiate
relative risks. NSRs differ from Moody's global scale ratings in
that they are not globally comparable with the full universe of
Moody's rated entities, but only with NSRs for other rated debt
issues and issuers within the same country. NSRs are designated by
a ".nn" country modifier signifying the relevant country, as in
".br" for Brazil.
Headquartered in the city of Rio de Janeiro, Oi is a publicly
traded company (52% free float) whose main shareholder is Portugal
Telecom (Ba2 negative) with direct and indirect stake of 23.3% as
of June 30, 2012. Oi is Brazil's largest incumbent local exchange
carrier by number of fixed lines in service (13 million as of June
30, 2012). As of June 2012, Oi held 45% of Brazil's lines in
service; 30% of the country's fixed broadband subscribers; and 19%
of its mobile subscribers. It also provides pay-TV on a smaller
scale (487,000 subscribers -- representing a market share of
approximately 4% -- as of June 30, 2012). In the first six months
of 2012, residential services (voice, broadband access and pay-TV)
represented 36% of Oi's revenues; mobile services represented 32%;
and business services represented 30%. The company reported net
revenues of BRL28.2 billion (approximately $13.9 billion) for the
last twelve months ended June 30, 2012.
Telemar Participacoes S.A. is a holding company and owner of 56%
of Oi's common stock and 18% of the company's total shares. The
main shareholders of Telemar Participacoes are Portugal Telecom,
with a 12% share of the capital; Andrade Gutierrez Telecom with
19%; and La Fonte with 19%.
Moody's has withdrawn the ratings on Telemar Norte Leste S.A. for
its own business reasons.
==========================
C A Y M A N I S L A N D S
==========================
APT SATELLITE: Commences Liquidation Proceedings
------------------------------------------------
On Sept. 20, 2012, the members of APT Satellite Enterprise Limited
resolved to voluntarily liquidate the company's business.
Creditors are required to file their proofs of debt to be included
in the company's dividend distribution.
The company's liquidator is:
Lo Kin Hang, Brian
c/o Maples and Calder, Attorneys-at-law
The Center, 53rd Floor
99 Queen's Road Central
Hong Kong
APT SATELLITE LINK: Commences Liquidation Proceedings
-----------------------------------------------------
On Sept. 20, 2012, the members of APT Satellite Link Limited
resolved to voluntarily liquidate the company's business.
Creditors are required to file their proofs of debt to be included
in the company's dividend distribution.
The company's liquidator is:
Lo Kin Hang, Brian
c/o Maples and Calder, Attorneys-at-law
The Center, 53rd Floor
99 Queen's Road Central
Hong Kong
BLACKSTONE HBL: Creditors' Proofs of Debt Due Nov. 6
----------------------------------------------------
The creditors of Blackstone HBL Offshore Fund Ltd. are required to
file their proofs of debt by Nov. 6, 2012, to be included in the
company's dividend distribution.
The company commenced liquidation proceedings on Sept. 24, 2012.
The company's liquidator is:
Sean Flynn
45 Market Street, Camana Bay
PO Box 242 Grand Cayman KY1-1104
Cayman Islands
GLENWOOD FOCUS: Members' Final Meeting Set for Nov. 5
-----------------------------------------------------
The members of Glenwood Focus CAD Bonds Ltd will hold their final
general meeting on Nov. 5, 2012, to receive the liquidator's
report on the company's wind-up proceedings and property disposal.
The company commenced liquidation proceedings on Sept. 10, 2012.
The company's liquidator is:
Beverly Mathias
c/o Argonaut Limited
Argonaut House, 5 Park Road
Hamilton HM 09
Bermuda
Telephone: 441-292-7979
HSBC LION: Creditors' Proofs of Debt Due Nov. 13
------------------------------------------------
The creditors of HSBC Lion Funding (UK) Limited are required to
file their proofs of debt by Nov. 13, 2012, to be included in the
company's dividend distribution.
The company commenced wind-up proceedings on Sept. 6, 2012.
The company's liquidators are:
Samit Ghosh
Alex Johnston
P.O. Box 1109 Grand Cayman KY1-1102
Cayman Islands
c/o Isabel Mason
Telephone: 949-7755
Facsimile: 949-7634
HSBC ROSE: Creditors' Proofs of Debt Due Nov. 13
------------------------------------------------
The creditors of HSBC Rose Funding (UK) Limited are required to
file their proofs of debt by Nov. 13, 2012, to be included in the
company's dividend distribution.
The company commenced wind-up proceedings on Sept. 6, 2012.
The company's liquidators are:
Samit Ghosh
Alex Johnston
P.O. Box 1109 Grand Cayman KY1-1102
Cayman Islands
c/o Isabel Mason
Telephone: 949-7755
Facsimile: 949-7634
HSBC ROSE INVESTMENT: Creditors' Proofs of Debt Due Nov. 13
-----------------------------------------------------------
The creditors of HSBC Rose Investment (UK) Limited are required to
file their proofs of debt by Nov. 13, 2012, to be included in the
company's dividend distribution.
The company commenced wind-up proceedings on Sept. 6, 2012.
The company's liquidators are:
Samit Ghosh
Alex Johnston
P.O. Box 1109 Grand Cayman KY1-1102
Cayman Islands
c/o Isabel Mason
Telephone: 949-7755
Facsimile: 949-7634
PLAINFIELD CAPITAL: Creditors' Proofs of Debt Due Nov. 8
--------------------------------------------------------
The creditors of Plainfield Capital Limited are required to file
their proofs of debt by Nov. 8, 2012, to be included in the
company's dividend distribution.
The company commenced liquidation proceedings on Sept. 20, 2012.
The company's liquidator is:
DMS Corporate Services Ltd.
Bernadette Bailey-Lewis
Telephone: (345) 946 7665
Facsimile: (345) 946 7666
dms Corporate Services Ltd.
dms House, 2nd Floor
P.O. Box 1344 Grand Cayman KY1-1108
Cayman Islands
WISE ACRE: Commences Liquidation Proceedings
--------------------------------------------
On Sept. 17, 2012, the members of Wise Acre Limited resolved to
voluntarily liquidate the company's business.
Creditors are required to file their proofs of debt to be included
in the company's dividend distribution.
The company's liquidator is:
Varun Bery
Unit A, 8th Floor, World Trust Tower
50 Stanley Street
Central
Hong Kong
====================
E L S A L V A D O R
====================
* EL SALVADOR: Gets $30MM IDB Loan to Improve Productivity
----------------------------------------------------------
El Salvador will get a $30 million loan from the Inter-American
Development Bank (IDB) to strengthen public agencies responsible
for innovation policies and develop mechanisms to foster
innovation and technological development in the productive sector.
The program will finance the design and implementation of an
institutional framework to coordinate efforts to support
innovation in El Salvador and provide management capacity at
government agencies. The project will also support the
development of instruments to promote investment in innovation and
technology, including grant co-financing for innovation projects
undertaken by firms, development of an incubator system for start-
ups and creation of networks of angel investors.
As many as 100 firms are expected to receive project support to
execute innovation projects and innovation management and another
50 firms are expected to receive support to hire professionals on
a temporary basis to solve technological problems.
Moreover, the project will reduce the human capital gap in science
and engineering by supporting training abroad for scientific and
technological staff from research centers, universities and firms
in El Salvador. It will also support the design of national
postgraduate programs in science and engineering as well as the
creation of a postgraduate fellowship program for professionals
linked to research in the priority areas. As many as 75
fellowships are expected to be awarded to doctoral programs
targeting full-time researchers with employment contracts at
research centers, universities, or firms.
The IDB loan is for a 25-year term and with a 66-month grace
period. The interest rate is based on LIBOR.
=============
J A M A I C A
=============
LIME JAMAICA: Forkes Out $30 Million for Repairs Following Sandy
----------------------------------------------------------------
RJR News reports that LIME Jamaica Limited (formerly Cable &
Wireless Jamaica Limited) has so far forked out $30 million for
repairs to its infrastructure which was impacted by Hurricane
Sandy.
The company is still calculating costs associated with repair or
replacement of damaged or unserviceable equipment, according to
RJR News.
The report relates that LIME said while its landline, mobile and
internet platforms fared well during the passage of the
hurricane, damage to the JPS grid in the east severely disrupted
service to Portland, St. Thomas, St. Mary and parts of rural St.
Andrew.
LIME said it has managed to restore service to most major towns in
Portland and St. Thomas -- the two worst-hit parishes, RJR News
notes.
However, the report relates that the company said access to its
equipment in the more remote areas in those parishes has been
restricted due to landslides, fallen trees and downed power lines.
About LIME Jamaica
Headquartered in Kingston, Jamaica, LIME Jamaica Limited
(formerly Cable & Wireless Jamaica Limited) is a subsidiary of
Cable & Wireless plc. The company is involved in providing
domestic and international telecommunications services to both
individual and businesses enterprise customers.
* * *
As reported in the Troubled Company Reporter on Feb. 6, 2012,
the Board of Directors of LIME released the unaudited
consolidated results of the company, Jamaica Digiport
International Limited (101), and other subsidiaries, for the
quarter ended Sept. 30, 2009. The report related that revenue
for the quarter declined 10% to JM$5,104 million from JMS5,567
million for the same period in 2008. Jamaica Gleaner noted that
LIME's accumulated deficit has climbed to more than
JM$17 billion. Concurrently, its equity base has diminished to
JM$2 billion on its December 2011 unaudited balance sheet,
reflecting book value of two cents per share, the report added.
===========
M E X I C O
===========
HILASAL MEXICANA: Files for Bankruptcy, to Keep 620 Staff
---------------------------------------------------------
Jonathan Roeder at Bloomberg News reports that Hilasal Mexicana
SAB, said bankruptcy proceedings have begun in a court in Jalisco,
Mexico.
Hilasal will keep its more than 620 employees during the
proceedings and will "honor the resulting commitments from the
bankruptcy process," according to a statement to the Mexican stock
exchange, Bloomberg News relates.
Hilasal Mexicana SAB is a producer of towels and bathrobes.
===============================
T R I N I D A D & T O B A G O
===============================
CARIBBEAN AIRLINES: ATR Examines 6-Week Old Aircraft Problem
------------------------------------------------------------
RJR News reports that Caribbean Airlines Limited said that the
aircraft which suffered engine problems moments after take off
last week is just six weeks old.
Bound for Venezuela, flight BW 300 was forced to return to the
Piarco International Airport in Trinidad mere minutes after
takeoff, according to RJR News. The report relates that Caribbean
Airlines later confirmed that part of the plane's engine became
dislodged.
The airline's Communications Manager Clint Williams revealed that
the aircraft was purchased just a month and a half ago, the report
notes. RJR News relays that Mr. Williams said several experts
from ATR in France are now conducting tests on the plane in order
to determine what may have caused the engine to dismount
Caribbean Airlines Limited -- http://http://www.caribbean-
airlines.com/ -- provides passenger airline services. It also
specializes in the shipment of fresh cut flowers and packaged
meats, hatching eggs, chocolates, fruits and vegetables, frozen
and chilled fish, vaccines, newspapers, and magazines within the
Caribbean, as well as to North America and Europe.
* * *
As reported in the Troubled Company Reporter on March 21, 2012,
RJR News said that Caribbean Airlines Limited owes nearly
US$30 million to Trinidad and Tobago's fuel provider National
Petroleum. Trinidad Express said CAL enjoys a seven-day credit
facility for aviation fuel from the company, according to RJR
News. However, the report related that the airline has not been
able to pay the full amount when invoiced and instead has been
issuing partial payments to sustain the account. RJR News notes
that Trinidad Express reported that the arrears were built up
over the last six weeks as no payments have been made despite an
attractive fuel subsidy which the airline has enjoyed since it
began operations in January 2007.
===============
X X X X X X X X
===============
* Upcoming Meetings, Conferences and Seminars
---------------------------------------------
Nov. 1-2, 2012
AMERICAN BANKRUPTCY INSTITUTE
Corporate Restructuring Competition
Wharton University of Pennsylvania, Philadelphia, Pa.
Contact: 1-703-739-0800;
http://www.abiworld.org/
Nov. 1-3, 2012
TURNAROUND MANAGEMENT ASSOCIATION
TMA Annual Convention
Westin Copley Place, Boston, Mass.
Contact: http://www.turnaround.org/
Nov. 12, 2012
AMERICAN BANKRUPTCY INSTITUTE
Detroit Consumer Bankruptcy Conference
[Location Undetermined]
Contact: 1-703-739-0800;
http://www.abiworld.org/
Nov. 26, 2012
BEARD GROUP, INC.
19th Annual Distressed Investing Conference
The Helmsley Park Lane Hotel, New York, N.Y.
Contact: 240-629-3300 or http://bankrupt.com/
Nov. 29-30, 2012
MID-SOUTH COMMERCIAL LAW INSTITUTE
33rd Annual Bankruptcy & Commercial Law Seminar
Nashville Marriott at Vanderbilt, Nashville, Tenn.
Contact: 1-703-739-0800;
http://www.abiworld.org/
Nov. 29 - Dec. 1, 2012
AMERICAN BANKRUPTCY INSTITUTE
Winter Leadership Conference
JW Marriott Starr Pass Resort & Spa, Tucson, Ariz.
Contact: 1-703-739-0800;
http://www.abiworld.org/
Dec. 4-8, 2012
AMERICAN BANKRUPTCY INSTITUTE
ABI/SJUSL Mediation Training Symposium
St. John's University, Queens, N.Y.
Contact: 1-703-739-0800;
http://www.abiworld.org/
Feb. 20-22, 2013
AMERICAN BANKRUPTCY INSTITUTE
VALCON
Four Seasons Las Vegas, Las Vegas, Nev.
Contact: 1-703-739-0800;
http://www.abiworld.org/
Apr. 10-12, 2013
TURNAROUND MANAGEMENT ASSOCIATION
TMA Spring Conference
JW Marriott Chicago, Chicago, Ill.
Contact: http://www.turnaround.org/
Apr. 18-21, 2013
AMERICAN BANKRUPTCY INSTITUTE
Annual Spring Meeting
Gaylord National Resort & Convention Center,
National Harbor, Md.
Contact: 1-703-739-0800;
http://www.abiworld.org/
June 13-16, 2013
AMERICAN BANKRUPTCY INSTITUTE
Central States Bankruptcy Workshop
Grand Traverse Resort, Traverse City, Mich.
Contact: 1-703-739-0800;
http://www.abiworld.org/
July 11-13, 2013
AMERICAN BANKRUPTCY INSTITUTE
Northeast Bankruptcy Conference
Hyatt Regency Newport, Newport, R.I.
Contact: 1-703-739-0800;
http://www.abiworld.org/
July 18-21, 2013
AMERICAN BANKRUPTCY INSTITUTE
Southeast Bankruptcy Workshop
The Ritz-Carlton Amelia Island, Amelia Island, Fla.
Contact: 1-703-739-0800;
http://www.abiworld.org/
Aug. 8-10, 2013
AMERICAN BANKRUPTCY INSTITUTE
Mid-Atlantic Bankruptcy Workshop
Hotel Hershey, Hershey, Pa.
Contact: 1-703-739-0800;
http://www.abiworld.org/
Aug. 22-24, 2013
AMERICAN BANKRUPTCY INSTITUTE
Southwest Bankruptcy Conference
Hyatt Regency Lake Tahoe, Incline Village, Nev.
Contact: 1-703-739-0800;
http://www.abiworld.org/
Oct. 3-5, 2013
TURNAROUND MANAGEMENT ASSOCIATION
TMA Annual Convention
Marriott Wardman Park, Washington, D.C.
Contact: http://www.turnaround.org/
Nov. 1, 2013
AMERICAN BANKRUPTCY INSTITUTE
NCBJ/ABI Educational Program
Atlanta Marriott Marquis, Atlanta, Ga.
Contact: 1-703-739-0800;
http://www.abiworld.org/
Dec. 2, 2013
BEARD GROUP, INC.
19th Annual Distressed Investing Conference
The Helmsley Park Lane Hotel, New York, N.Y.
Contact: 240-629-3300 or http://bankrupt.com/
Dec. 5-7, 2013
AMERICAN BANKRUPTCY INSTITUTE
Winter Leadership Conference
Terranea Resort, Rancho Palos Verdes, Calif.
Contact: 1-703-739-0800;
http://www.abiworld.org/
***********
Monday's edition of the TCR-LA delivers a list of indicative
prices for bond issues that reportedly trade well below par.
Prices are obtained by TCR-LA editors from a variety of outside
sources during the prior week we think are reliable. Those
sources may not, however, be complete or accurate. The Monday
Bond Pricing table is compiled on the Friday prior to publication.
Prices reported are not intended to reflect actual trades. Prices
for actual trades are probably different. Our objective is to
share information, not make markets in publicly traded securities.
Nothing in the TCR-LA constitutes an offer or solicitation to buy
or sell any security of any kind. It is likely that some entity
affiliated with a TCR-LA editor holds some position in the
issuers' public debt and equity securities about which we report.
Tuesday's edition of the TCR-LA features a list of companies with
insolvent balance sheets obtained by our editors based on the
latest balance sheets publicly available a day prior to
publication. At first glance, this list may look like the
definitive compilation of stocks that are ideal to sell short.
Don't be fooled. Assets, for example, reported at historical cost
net of depreciation may understate the true value of a firm's
assets. A company may establish reserves on its balance sheet for
liabilities that may never materialize. The prices at which
equity securities trade in public market are determined by more
than a balance sheet solvency test.
A list of Meetings, Conferences and Seminars appears in each
Thursday's edition of the TCR-LA. Submissions about insolvency-
related conferences are encouraged. Send announcements to
conferences@bankrupt.com
***********
S U B S C R I P T I O N I N F O R M A T I O N
Troubled Company Reporter-Latin America is a daily newsletter
co-published by Bankruptcy Creditors' Service, Inc., Fairless
Hills, Pennsylvania, USA, and Beard Group, Inc., Frederick,
Maryland USA, Marites O. Claro, Joy A. 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 * * *