/raid1/www/Hosts/bankrupt/TCRLA

/raid1/www/Hosts/bankrupt/TCRLA_Public/130318.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, March 18, 2013, Vol. 14, No. 54 Headlines B R A Z I L COSAN LUXEMBOURG: Fitch Rates Sr. Unsecured Notes at 'BB+' C A Y M A N I S L A N D S BIRMINGHAM HOLDINGS: Placed Under Voluntary Wind-Up CARNAUBA FUND: Placed Under Voluntary Wind-Up HARVEST ORION III: Commences Liquidation Proceedings IVY DEFENDERS 1099: Commences Liquidation Proceedings JPMP SK HOLDINGS: Commences Liquidation Proceedings LIONTRUST DIVERSITY: Commences Liquidation Proceedings LIONTRUST DIVERSITY GENERAL: Commences Liquidation Proceedings LIONTRUST SORBUS: Commences Liquidation Proceedings LIONTRUST SORBUS FUND: Commences Liquidation Proceedings MAPLEWOOD C.I: Commences Liquidation Proceedings PRS GLOBAL: Placed Under Voluntary Wind-Up RHOMBUS CAPITAL: Commences Liquidation Proceedings SKY CORP: Placed Under Voluntary Wind-Up STONE BEACH: Placed Under Voluntary Wind-Up SUSQUEHANNA TRADING: Commences Liquidation Proceedings TECH ALPHA: Commences Liquidation Proceedings TERRA BANGLADESH: Commences Liquidation Proceedings THIRD AVENUE: Placed Under Voluntary Wind-Up TOMKINS MANAGEMENT: Placed Under Voluntary Wind-Up VINCI HIGH: Placed Under Voluntary Wind-Up D O M I N I C A N R E P U B L I C * DOMINICAN REPUBLIC: Needs to Boost Logistics Coordination H O N D U R A S * HONDURAS: S&P Assigns 'B+' Rating to Planned $500MM Bond Issue J A M A I C A * JAMAICA: Confident of IMF Deal by End of March M E X I C O BANCO G&T: S&P Affirms 'BB/B' ICRs; Outlook Stable BANCO INDUSTRIAL: S&P Affirms 'BB' ICR; Outlook Stable BANCO PANAMENO: S&P Assigns 'BB' Issuer Credit Rating CEMEX SAB: S&P Assigns 'B' Rating to $600MM Senior Secured Notes CEMEX SAB: Fitch Assigns 'B+' Rating to New High Yield Notes GRUPO ACP: Fitch Affirms 'BB-' Issuer Default Rating GRUPO KUO: Fitch Affirms 'BB' LT Issuer Default Rating SIDERURGICA DEL TURBIO: S&P Lowers CCR to 'CC' & Withdraws Rating P A N A M A AES EL SALVADOR: Fitch Assigns 'BB' Rating to $310MM Debt Issue AES EL SALVADOR II: Moody's Assigns Ba2 CFR; Outlook is Stable T R I N I D A D & T O B A G O PETROTRIN: OWTU Head Accuses Firm of Shutting Down Good Oil Wells X X X X X X X X * BOND PRICING: For the Week March 11 to March 15, 2013 - - - - - =========== B R A Z I L =========== COSAN LUXEMBOURG: Fitch Rates Sr. Unsecured Notes at 'BB+' ---------------------------------------------------------- Fitch rates Cosan Luxembourg S.A.'s senior unsecured notes issue, in the amount of BRL500 million and coupon of 9.5%, due 2018, 'BB+'. The notes will be unconditionally and irrevocably guaranteed by Cosan S.A. Industria e Comercio and will rank equally with all Cosan's unsecured indebtedness. Net proceeds will be used to prepay a portion of Cosan's BRL3.3 billion debentures issued to finance the acquisition of Comgas. KEY RATING DRIVERS: Cosan's ratings reflect the increasing contribution of a more diversified asset portfolio and more predictable cash flow businesses on a consolidated basis, which partially soften the impacts of the volatility of the sugar and ethanol industry. Cosan's ratings fundamental has been positively enhanced by the creation of a joint-venture with Shell Brazil Holdings BV (Raizen), under conservative financial terms, and it is strongly linked to Raizen's credit profile, given the relevance of this joint venture compared to Cosan's consolidated performance (55% of 2013 EBITDA, as per Fitch estimates). Cosan's pro forma credit ratios, considering the last 12 months (LTM) EBITDA of Comgas, its robust liquidity position and its manageable debt profile further support the ratings. The high volatile sugar & ethanol industry fundamentals, exposure to climatic conditions and challenges related to the ethanol's industry dynamics in Brazil, currently strongly linked to gasoline regulated prices and governmental policies related to this issue, are further incorporated into the ratings. Increased Diversification & Lower Exposure to Sugar & Ethanol: Comgas' acquisition was strategically positive for Cosan, as it contributes to broader business diversification and should lessen its cash flow volatility. This transaction also enhanced Cosan's presence in the energy segment, which, together with logistics, are the main focus on the company's business plan going forward. As per Fitch estimates, the contribution of more stable business for Cosan's cash flow should range from 52% in the 2011/2012 harvest period to the 65%-75% range in the next three years, depending on the sugar and ethanol prices behavior and speed of planned expansion projects. Fitch estimates Cosan's 2013 EBITDA breakdown by segment as follows: 35% natural gas distribution, 32% sugar and ethanol, 19% fuel distribution, 8% logistics and 6% others. Leverage on a Declining Trend as Expected: Cosan's pro forma net debt/EBITDA considering Comgas' LTM EBITDA is 3.2x, despite lower than historical EBITDA margins of the acquired company in that period, due to some cost mismatches to be passed through its tariffs. Considering a normalized EBITDA for Comgas, Cosan's pro forma net leverage on a consolidated basis would be around 3.1x. This ratio compares favorably with the 3.3x pro forma net leverage ratio as of March, 2012. Fitch's debt calculations also consider rescheduled taxes net of credits to be received from ExxonMobil, pension fund obligations (mostly migrated from Comgas) and intercompany loans. Considering the mid-point of the sugar and ethanol price cycle, Fitch estimates that Cosan should maintain its net leverage around 3.0x while preserving a robust liquidity position to reduce the risks related to the inherent cyclicality of some of its businesses. Robust Liquidity Essential to Support Ratings: Cosan has maintained robust liquidity. As of Dec. 31, 2012, its consolidated cash position amounted to BRL2.3 billion and covered its short-term debt of BRL1.8 billion by 1.3x. Considering also cash flow from operations (CFFO), the cash+CFFO/short-term debt ratio would be strong at 3.0x. Debt maturity profile was adequately distributed, with concentration in the long term. Fitch expects that Cosan will continue to adequately manage its short-term debt maturities and to preserve a robust liquidity, in order to be prepared for occasional market downturns. The favorable terms of the financing line obtained to finance the Comgas acquisition, characterized by an eight-year tenor with a two-year grace period, also positively contributed to the company's financial profile. Increased Cash Flow Generation: Cosan presented a robust operational performance on a consolidated basis in the LTM period ended December 2012. Net revenues, EBITDA and CFFO amounted to BRL27.3 billion, BRL2.5 billion and BRL3.1 billion, respectively, which compare positively to BRL24.1 billion, BRL2.1 billion and BRL2 billion reported in March 2012, excluding the non-recurring effects of the creation of Raizen (BRL3.2 billion). Cosan's EBITDA expansion reflects, among other factors, the strong performance of the fuel distribution activities, which benefited from advances in the gas stations rebranding process and a favorable product mix and higher operational margins in the sugar, ethanol and cogeneration business, driven mainly by a greater crushing volume, adequate price hedging strategy and increased cogeneration revenues in that period. The beginning of consolidation of the agricultural land development business, conducted through the subsidiary Radar, also contributed with an incremental EBITDA of BRL96 million. Pending Negotiations on Acquisition of ALL Shares: Cosan is also negotiating the purchase of a 5.7% stake on America Latina Logistica (ALL), for BRL896.5 million, which was not incorporated in Fitch's financial projections. The transaction is still dependent upon the approval of other signatories of ALL's shareholders agreement and also from the Brazilian Transport Regulatory Agency (ANTT) and the Brazilian Antitrust Council (CADE). In case the acquisition is concluded, Fitch estimates that Cosan's consolidated net debt/EBITDA ratio on a pro forma basis would range between 3.0x and 3.3x depending on the funding strategy for this transaction. RATING SENSITIVITIES: A positive rating action could be driven in the medium term by lower than expected leverage, coupled with the maintenance of more stable and predictable cash flows. Any action related to Raizen's ratings could have an impact on Cosan's ratings. Factors that could lead to a negative rating action include further acquisitions or investments not contemplated in the current business plan that could result in leverage levels beyond expectations and/or material refinancing needs. Should net leverage exceed Fitch expectations and be above 3.5x on a recurring basis, it would trigger a negative rating action. Fitch currently rates Cosan as follows: Cosan: -- Foreign and local currency Issuer Default Ratings (IDRs) 'BB+'; -- National scale rating 'AA-(bra)'. Cosan Overseas: -- Foreign currency IDR 'BB+'; -- Perpetual notes 'BB+'. The Rating Outlook of the corporate ratings is Stable. ========================== C A Y M A N I S L A N D S ========================== BIRMINGHAM HOLDINGS: Placed Under Voluntary Wind-Up --------------------------------------------------- On Dec. 21, 2012, the sole shareholder of Birmingham Holdings, Ltd. resolved to voluntarily wind up the company's operations. Only creditors who were able to file their proofs of debt by Jan. 21, 2013, will be included in the company's dividend distribution. The company's liquidator is: Ogier c/o Michael Lubin Telephone: (345) 815 1793 Facsimile: (345) 949 9877 89 Nexus Way, Camana Bay Grand Cayman KY1-9007 Cayman Islands CARNAUBA FUND: Placed Under Voluntary Wind-Up --------------------------------------------- On Dec. 19, 2012, the sole shareholder of The Carnauba Fund resolved to voluntarily wind up the company's operations. Only creditors who were able to file their proofs of debt by Jan. 18, 2013, will be included in the company's dividend distribution. The company's liquidator is: MBT Trustees Ltd. Telephone: 945-9808 Facsimile: 949-9793/4 P.O. Box 30622 Grand Cayman KY1-1203 Cayman Islands HARVEST ORION III: Commences Liquidation Proceedings ---------------------------------------------------- On Dec. 21, 2012, the sole shareholder of Harvest Orion III (Cayman) Limited resolved to voluntarily liquidate the company's business. Only creditors who were able to file their proofs of debt by Jan. 30, 2013, will be included in the company's dividend distribution. The company's liquidator is: Gerald Yung Harvest Capital Partners Limited China Resources Building, 37th Floor 26 Harbour Road Wanchai, Hong Kong Telephone: (852) 2131 2180 IVY DEFENDERS 1099: Commences Liquidation Proceedings ----------------------------------------------------- On Dec. 18, 2012, the sole shareholder of Ivy Defenders 1099 Access Fund Ltd. resolved to voluntarily liquidate the company's business. Only creditors who were able to file their proofs of debt by Jan. 29, 2013, will be included in the company's dividend distribution. The company's liquidator is: Peter D. Anderson c/o Omar Grant Telephone: (345) 949 7576 Facsimile: (345) 949 8295 P.O. Box 897 Windward 1 Regatta Office Park Grand Cayman KY1-1103 Cayman Islands JPMP SK HOLDINGS: Commences Liquidation Proceedings --------------------------------------------------- On Dec. 21, 2012, the shareholders of JPMP SK Holdings Company Limited resolved to voluntarily liquidate the company's business. Only creditors who were able to file their proofs of debt by Jan. 30, 2013, will be included in the company's dividend distribution. The company's liquidator is: Ian D. Stokoe c/o Aaron Gardner Telephone: (345) 914 8655 Facsimile: (345) 945 4237 PO Box 258 Grand Cayman KY1-1104 Cayman Islands LIONTRUST DIVERSITY: Commences Liquidation Proceedings ------------------------------------------------------ On Dec. 19, 2012, the sole shareholder of Liontrust Diversity Fund Inc. resolved to voluntarily liquidate the company's business. Only creditors who were able to file their proofs of debt by Jan. 30, 2013, will be included in the company's dividend distribution. The company's liquidator is: Mourant Ozannes Cayman Voluntary Liquidators Limited Reference: Christine Fletcher Telephone: +1 (345) 949 4123 Facsimile: +1 (345) 949 4647; or Mourant Ozannes Cayman Voluntary Liquidators Limited Reference: Peter Goulden Telephone: +1 (345) 949 4123 Facsimile: +1 (345) 949 4647 94 Solaris Avenue, Camana Bay P.O. Box 1348 Grand Cayman KY1-1108 Cayman Islands LIONTRUST DIVERSITY GENERAL: Commences Liquidation Proceedings -------------------------------------------------------------- On Dec. 18, 2012, the sole shareholder of Liontrust Diversity General Partner Inc. resolved to voluntarily liquidate the company's business. Only creditors who were able to file their proofs of debt by Jan. 30, 2013, will be included in the company's dividend distribution. The company's liquidator is: Mourant Ozannes Cayman Voluntary Liquidators Limited Reference: Christine Fletcher Telephone: +1 (345) 949 4123 Facsimile: +1 (345) 949 4647; or Mourant Ozannes Cayman Voluntary Liquidators Limited Reference: Peter Goulden Telephone: +1 (345) 949 4123 Facsimile: +1 (345) 949 4647 94 Solaris Avenue, Camana Bay P.O. Box 1348 Grand Cayman KY1-1108 Cayman Islands LIONTRUST SORBUS: Commences Liquidation Proceedings --------------------------------------------------- On Dec. 19, 2012, the sole shareholder of Liontrust Sorbus General Partner Inc. resolved to voluntarily liquidate the company's business. Only creditors who were able to file their proofs of debt by Jan. 30, 2013, will be included in the company's dividend distribution. The company's liquidator is: Mourant Ozannes Cayman Voluntary Liquidators Limited Reference: Christine Fletcher Telephone: +1 (345) 949 4123 Facsimile: +1 (345) 949 4647; or Mourant Ozannes Cayman Voluntary Liquidators Limited Reference: Peter Goulden Telephone: +1 (345) 949 4123 Facsimile: +1 (345) 949 4647 94 Solaris Avenue, Camana Bay P.O. Box 1348 Grand Cayman KY1-1108 Cayman Islands LIONTRUST SORBUS FUND: Commences Liquidation Proceedings -------------------------------------------------------- On Dec. 19, 2012, the sole shareholder of Liontrust Sorbus Fund Inc. resolved to voluntarily liquidate the company's business. Only creditors who were able to file their proofs of debt by Jan. 30, 2013, will be included in the company's dividend distribution. The company's liquidator is: Mourant Ozannes Cayman Voluntary Liquidators Limited Reference: Christine Fletcher Telephone: +1 (345) 949 4123 Facsimile: +1 (345) 949 4647; or Mourant Ozannes Cayman Voluntary Liquidators Limited Reference: Peter Goulden Telephone: +1 (345) 949 4123 Facsimile: +1 (345) 949 4647 94 Solaris Avenue, Camana Bay P.O. Box 1348 Grand Cayman KY1-1108 Cayman Islands MAPLEWOOD C.I: Commences Liquidation Proceedings ------------------------------------------------ On Dec. 18, 2012, the sole shareholder of Maplewood C.I. Limited resolved to voluntarily liquidate the company's business. Only creditors who were able to file their proofs of debt by Jan. 29, 2013, will be included in the company's dividend distribution. The company's liquidator is: Peter D. Anderson c/o Omar Grant Telephone: (345) 949 7576 Facsimile: (345) 949 8295 P.O. Box 897 Windward 1 Regatta Office Park Grand Cayman KY1-1103 Cayman Islands PRS GLOBAL: Placed Under Voluntary Wind-Up ------------------------------------------ On Dec. 21, 2012, the sole shareholder of PRS Global Income Fund resolved to voluntarily wind up the company's operations. Only creditors who were able to file their proofs of debt by Jan. 21, 2013, will be included in the company's dividend distribution. The company's liquidator is: Ogier c/o Michael Lubin Telephone: (345) 815 1793 Facsimile: (345) 949 9877 89 Nexus Way, Camana Bay Grand Cayman KY1-9007 Cayman Islands RHOMBUS CAPITAL: Commences Liquidation Proceedings -------------------------------------------------- On Dec. 19, 2012, the shareholders of Rhombus Capital Overseas Fund Ltd. resolved to voluntarily liquidate the company's business. Only creditors who were able to file their proofs of debt by Feb. 14, 2013, will be included in the company's dividend distribution. The company's liquidator is: DMS Corporate Services Ltd c/o 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 SKY CORP: Placed Under Voluntary Wind-Up ---------------------------------------- At an extraordinary general meeting held on Dec. 21, 2012, the shareholder of Sky Corp Ltd. resolved to voluntarily wind up the company's operations. The company's liquidator is: Commerce Corporate Services Limited P.O. Box 694 Grand Cayman KY1-1107 Cayman Islands Telephone: 949 8666 Facsimile: 949 0626 P.O. Box 694 Grand Cayman KY1-1107 Cayman Islands STONE BEACH: Placed Under Voluntary Wind-Up ------------------------------------------- On Dec. 20, 2012, the sole shareholder of Stone Beach Mortgage Opportunity Master Fund Ltd. resolved to voluntarily wind up the company's operations. Only creditors who were able to file their proofs of debt by Jan. 21, 2013, will be included in the company's dividend distribution. The company's liquidator is: Ogier c/o Jo-Anne Maher Telephone: (345) 815 1762 Facsimile: (345) 949 9877 89 Nexus Way, Camana Bay Grand Cayman KY1-9007 Cayman Islands SUSQUEHANNA TRADING: Commences Liquidation Proceedings ------------------------------------------------------ On Dec. 19, 2012, the sole shareholder of Susquehanna Trading Services, Inc. resolved to voluntarily liquidate the company's business. Only creditors who were able to file their proofs of debt by Jan. 29, 2013, will be included in the company's dividend distribution. The company's liquidator is: Peter D. Anderson c/o Omar Grant Telephone: (345) 949 7576 Facsimile: (345) 949 8295 P.O. Box 897 Windward 1 Regatta Office Park Grand Cayman KY1-1103 Cayman Islands TECH ALPHA: Commences Liquidation Proceedings --------------------------------------------- On Dec. 20, 2012, the sole shareholder of Tech Alpha Fund, Ltd resolved to voluntarily liquidate the company's business. Only creditors who were able to file their proofs of debt by Jan. 29, 2013, will be included in the company's dividend distribution. The company's liquidator is: Peter D. Anderson c/o Omar Grant Telephone: (345) 949 7576 Facsimile: (345) 949 8295 P.O. Box 897 Windward 1 Regatta Office Park Grand Cayman KY1-1103 Cayman Islands TERRA BANGLADESH: Commences Liquidation Proceedings --------------------------------------------------- On Sept. 24, 2012, the sole shareholder of Terra Bangladesh Fund Ltd. resolved to voluntarily liquidate the company's business. Only creditors who were able to file their proofs of debt by Jan. 21, 2013, will be included in the company's dividend distribution. The company's liquidator is: Appleby Trust (Cayman) Ltd. Clifton House, 75 Fort Street PO Box 1350 Grand Cayman KY1-1108 Cayman Islands THIRD AVENUE: Placed Under Voluntary Wind-Up -------------------------------------------- On Dec. 20, 2012, the sole shareholder of Third Avenue Value Equity Offshore Fund, Ltd resolved to voluntarily wind up the company's operations. Only creditors who were able to file their proofs of debt by Jan. 29, 2013, will be included in the company's dividend distribution. The company's liquidator is: Ogier c/o Daniella Skotnicki Telephone: (345) 949 9876 Facsimile: (345) 949 9877 89 Nexus Way, Camana Bay Grand Cayman KY1-9007 Cayman Islands TOMKINS MANAGEMENT: Placed Under Voluntary Wind-Up -------------------------------------------------- On Dec. 20, 2012, the sole shareholder of Tomkins Management resolved to voluntarily wind up the company's operations. Only creditors who were able to file their proofs of debt by Jan. 18, 2013, will be included in the company's dividend distribution. The company's liquidator is: MBT Trustees Ltd. Telephone: 945 8859 Facsimile: 949 9793/4 P.O. Box 30622 Grand Cayman KY1-1203 Cayman Islands VINCI HIGH: Placed Under Voluntary Wind-Up ------------------------------------------ On Dec. 20, 2012, the sole shareholder of Vinci High Income Fund resolved to voluntarily wind up the company's operations. Only creditors who were able to file their proofs of debt by Jan. 21, 2013, will be included in the company's dividend distribution. The company's liquidator is: Ogier c/o Michael Lubin Telephone: (345) 815 1793 Facsimile: (345) 949 9877 89 Nexus Way, Camana Bay Grand Cayman KY1-9007 Cayman Islands ================================== D O M I N I C A N R E P U B L I C ================================== * DOMINICAN REPUBLIC: Needs to Boost Logistics Coordination ----------------------------------------------------------- To cope with the larger vessels that will transit through the Panama Canal when its expansion is complete in 2015, Central American countries must dramatically improve their intermodal road and port network infrastructure, the quality of their trucking services and strengthen their institutional coordination, two studies issued by the Inter-American Development Bank show. The first study, Assessment of Port Performance and Port Connectivity Study in Belize, Central America and the Dominican Republic, evaluates port performance and the connectivity of 18 ports in Belize, Central America and the Dominican Republic. The second report, Trucking services in Belize, Central America and the Dominican Republic: performance analysis and policy recommendations, assesses the trucking industry and makes recommendations going forward. The reports were released at a seminar on logistics at the IDB's Annual Meeting in Panama City. The IDB called for countries to establish national logistics agendas to improve policy coordination and tackle bottlenecks that hurt the region's ability to compete in the global marketplace. Efficient logistics performance requires the public sector to act at the regional, national and local levels, under a coordinated agenda, with shared priorities and objectives, based on consistent information that aids in defining public policies and allows continuous monitoring. The need for more coordination is especially urgent as the expansion of the Panama Canal will accommodate post-Panamax vessels that carry 12,600 containers, against 4,500 for the current ones. Today only two countries can handle post-Panamax vessels in the region: the Dominican Republic through the port of Caucedo, and the Panama terminals. New Freight Transportation Dynamics Post-Panamax vessels will profoundly change the dynamics of freight transportation. Instead of ships calling on multiple ports and handling small cargo loads, post-Panamax vessels will be serviced with much greater volumes into a hub and spokes system. This system will require ports and roads to handle larger cargo loads more quickly and efficiently. "The region needs to change course in the way it handles freight logistics to enhance its integration with the world and continue to grow," said Alexandre Meira da Rosa, manager of the IDB's Infrastructure and Environment Sector. "Companies may be extremely efficient producing goods at low prices, but if there are inefficiencies in shipping and transporting these goods within the country, by the time they ship abroad they lose their competitive advantage." High transport costs also prevent the country's products from effectively competing in the global market. For example, in Central America, transport and logistics can account for up to 20- 60 percent of delivered food prices. The study assesses the readiness of 18 ports in 7 countries in Central America plus the Dominican Republic, in areas that range from transport and trade regulations to geography. For instance, only one-Caucedo-received a "very good" rating in land connectivity, which factors in road congestions, security and the number of lanes at port gates, among other. Six ports received "good" ratings, four were "adequate" and seven were "poor." "Transportation in the mainland of Central America is complex," the study on ports says, "as the region is too small and does not have enough volume for a dense short-sea shipping maritime network but too big and lacking in road infrastructure to be adequately served by land for national and international trade needs." The report recommends countries develop a national coordinating body to oversee both sea and land transport, and highlights that an integrated sea-land intermodal transportation network is crucial for future development of the region. The second study looks at the trucking industry, from regulations to cargo security and border crossings. Trucking rates are expensive and security costs high, the report finds, and the lack of low-sulfur diesel fuel inhibits fleet renewal investments with the latest more efficient engine technologies. The percentage of paved roads in countries like Honduras and Belize stands at 22%, and in Nicaragua it does not exceed 15%. "It is often said that the supply chain is only as good as its weakest link and the roads are often this link," according to the study. Border crossing coordination needs improvement and countries need to tackle difficult domestic issues, such as laws that protect national fleets by prohibiting foreign trucks from transporting domestic cargo on their return routes, making the service more expensive for everyone. =============== H O N D U R A S =============== * HONDURAS: S&P Assigns 'B+' Rating to Planned $500MM Bond Issue ---------------------------------------------------------------- Standard & Poor's Ratings Services said it assigned its 'B+' foreign currency senior unsecured debt rating to the Republic of Honduras' planned $500 million bond issue. This is Honduras' first international bond issue. The 7.5% fixed-rate notes mature March 15, 2024, with the principal amortizing in three equal installments during the last three years to maturity. Proceeds of the bond are designated for general budget purposes as well as payment of Honduras' domestic debt and "deuda flotante" (domestic arrears). The country's weak political institutions, as well as deterioration of the central government fiscal deficit during 2012 to 6% of GDP, constrain S&P's ratings on Honduras. S&P projects that fiscal pressures during the 2013 election year, recurrent financial losses of public-sector utilities, and Honduras' limited revenue base will lead to a central government deficit of about 6% of GDP, higher than the government's 4.5% target. S&P expects net general government debt to rise to 32% of GDP in 2013 from 28% of GDP in 2011. Shallow domestic capital markets and an increase of domestic debt in 2009-2010 during Honduras' extraordinary political events, which coincided with the temporary loss of concessional financing from the international financial community, have also contributed to the steepening of the central government's domestic yield curve. External liquidity of Honduras' small, open economy diminished during 2012. Honduras' net international reserves declined by 12% (to US$2.5 billion from US$2.8 billion, according to central bank figures) between June 2012 and Feb. 21, 2013. S&P expects the bond issue will strengthen Honduras' external liquidity, but a coffee fungus that has reduced Central American coffee exports will continue to pose downside risks for external liquidity this year. Honduras' low $2,200 per capita GDP and 1% per capita real GDP growth, high poverty rates, high crime and violence rates in urban areas, and significant human capital and infrastructure investment needs continue to pose long-term challenges for higher, sustainable growth. S&P expects 3% growth in 2013. RATINGS LIST Republic of Honduras Sovereign Credit Rating B+/Negative/B New Rating Republic of Honduras Senior unsecured notes B+ ============= J A M A I C A ============= * JAMAICA: Confident of IMF Deal by End of March ------------------------------------------------ RJR News reports that the Jamaican government is confident that it will have the recently concluded deal with the International Monetary Fund (IMF), approved by the entity's board, before the end of this month. A Finance Ministry official, said the Letter of Intent was sent to the IMF earlier this week and it is expected that the IMF's Executive Board will review the deal on March 25, according to RJR News. The report notes that the Letter of Intent was sent after the government fulfilled certain criteria, such as a successful debt exchange program, a wage agreement with the public sector and legislation to withdraw J$45.6 billion from the National Housing Trust (NHT) over the next four years. The report relates that the government is seeking a four year Extended Fund Facility from the IMF, with a proposal for US$750 million of inflows to come in, over that period. The IMF deal is also critical, to give a stamp of approval to Jamaica's economic program, which will give other international financiers confidence to provide temporary support to the U.S. dollar starved Jamaican economy, the report notes. =========== M E X I C O =========== BANCO G&T: S&P Affirms 'BB/B' ICRs; Outlook Stable -------------------------------------------------- Standard & Poor's Ratings Services affirmed its 'BB/B' issuer credit ratings on Banco G&T Continental S.A. (BG&TC). The stand- alone credit profile (SACP) remains at 'bb+'. The outlook is stable. The ratings reflect BG&TC's "strong" business position, S&P's "moderate" capital and earnings assessment, "moderate" risk position, and "average" funding with "adequate" liquidity. "Our bank criteria uses the Banking Industry Country Risk Assessment's (BICRA) economic and industry risk scores to determine a bank's anchor, the starting point in assigning an issuer credit rating. The anchor for a commercial bank operating in Guatemala is 'bb+'. Our economic risk score of '7' on Guatemala reflects its limited fiscal flexibility stemming primarily from a low tax base, likely higher debt over the next several years, the absence of any measures to strengthen tax revenue and boost GDP growth, and very high credit risk primarily because of high foreign currency lending. Our industry risk score of '5' is based on Guatemala's still developing regulatory, and institutional framework, as well as low competitive risk as private banks dominate the Guatemalan banking system as a result of a low market presence of nonbank finance companies," S&P noted. "Despite a stable and growing core customer deposit base, access to external funding is limited and the Guatemalan debt capital market remains undeveloped," said Standard & Poor's credit analyst Jesus Sotomayor. BANCO INDUSTRIAL: S&P Affirms 'BB' ICR; Outlook Stable ------------------------------------------------------ Standard & Poor's Ratings Services affirmed its 'BB' long-term and 'B' short-term issuer credit ratings on Banco Industrial S.A. (BI). The bank's stand-alone credit profile (SACP) is 'bb+'. The outlook is stable. The ratings on BI reflect its "strong" business position in the low-banking-penetrated Guatemalan banking system, S&P's expectation of "moderate" risk-adjusted capital (RAC) ratios and earnings capacity, and a "moderate" risk position. The ratings also reflect its "average" funding and "adequate" liquidity. "Our bank criteria uses the Banking Industry Country Risk Assessment's (BICRA) economic and industry risk scores to determine a bank's anchor, the starting point in assigning an issuer credit rating. The anchor for a commercial bank operating in Guatemala is 'bb+'. Our economic risk score of '7' on Guatemala reflects its limited fiscal flexibility stemming primarily from a low tax base, likely higher debt over the next several years, the absence of any measures to strengthen tax revenue and boost GDP growth prospects, and very high credit risk in the economy, primarily due to high foreign currency lending. Our industry risk score of '5' is based on Guatemala's still- developing regulatory, supervisory, and institutional framework, as well as its low competitive risk as private banks dominate the Guatemalan banking system as a result of low market presence of nonbank finance companies. "Despite a stable and growing core customer deposit base, access to external funding is limited and the Guatemalan debt capital market remains undeveloped," said Standard & Poor's credit analyst Jesus Sotomayor. BANCO PANAMENO: S&P Assigns 'BB' Issuer Credit Rating ----------------------------------------------------- Standard & Poor's Ratings Services assigned its 'BB' issuer credit rating to Banco Panameno de la Vivienda S.A. (Banvivienda). The outlook is stable. S&P's rating on Banvivienda reflects the bank's "moderate" business position, "adequate" capital and earnings, "adequate" risk position, "below average" funding, and "adequate" liquidity, as S&P's criteria define these terms. In 2009, Banvivienda and its shareholder Grupo Mundial initiated significant organizational changes. These modifications significantly improved the bank's capitalization, liquidity, and asset quality metrics, and strengthened risk and corporate governance practices. The bank continues to work to improve its profitability and efficiency amid heavy competition. Grupo Mundial supported Banvivienda through capital infusions totaling $30 million between 2009 and 2011 and capitalization of profits. CEMEX SAB: S&P Assigns 'B' Rating to $600MM Senior Secured Notes ---------------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'B' issue-level rating and a recovery rating of '3' to CEMEX S.A.B. de C.V.'s proposed $600 million senior secured notes due 2019. The recovery rating of '3' indicates that bondholders can expect a meaningful (50% to 70%) recovery in the event of a payment default. CEMEX (B/Positive/--) intends to use the net proceeds from the offering to repay in full the remaining debt under the 2009 Financing Agreement and for the purchase of outstanding eurobonds due 2014. The notes will benefit from a security package on the same terms as in the company's all other senior capital markets debt. The security package includes the full and unconditional guarantee, on a joint and several basis and on a general senior basis, by CEMEX Mexico S.A. de C.V., CEMEX Espana S.A., CEMEX Corp., New Sunward Holding B.V., and other subsidiaries owned directly or indirectly by CEMEX. According to S&P's criteria, it considers this bond issuance as an opportunistic refinancing proposal, rather than a distressed restructuring. In S&P's view, CEMEX does not depend on the issuance of the proposed notes to mitigate the risk of an insolvency or bankruptcy scenario in the near term. RATINGS LIST CEMEX S.A.B. de C.V. Corporate credit rating B/Positive/-- Ratings Assigned CEMEX S.A.B. de C.V. $600 million senior secured notes due 2019 B Recovery rating 3 CEMEX SAB: Fitch Assigns 'B+' Rating to New High Yield Notes ------------------------------------------------------------ Fitch Ratings has assigned a 'B+/RR3' rating to CEMEX S.A.B. de C.V.'s proposed senior secured high yield notes due in 2019. The notes will be guaranteed by CEMEX Mexico, S.A. de C.V.; CEMEX Concretos, S.A. de C.V.; Empresas Tolteca de Mexico, S.A. de C.V.; CEMEX Espana, S.A.; New Sunward Holding B.V.; CEMEX Asia B.V.; CEMEX Corp.; CEMEX Egyptian Investments B.V.; CEMEX France Gestion; CEMEX Research Group AG; CEMEX Shipping B.V.; and CEMEX UK. The guarantees are full and unconditional for both principal and interest payment. Proceeds from the issuance will be used to repay debt remaining under the 2009 Financing Agreement and for general corporate purposes. The Rating Outlook for CEMEX is Stable. Key Rating Drivers High Leverage and Modest Free Cash Flow The 'B' ratings of CEMEX and its subsidiaries continue to reflect the company's high leverage and limited free cash flow from operations. CEMEX generated $2.6 billion of EBITDA in 2012, an improvement from $2.3 billion in 2011. The growth in EBITDA was due to stronger performance by the company's operations in the U.S. and in Central and South America. Growth in taxes and interest expense led to a decline in CEMEX's cash flow from operation (CFFO) to $428 million in 2012 from $521 million in 2011. Free cash flow from operations for debt reduction was flat due to $426 million of capex. Through the IPO of 26.65% of the company's subsidiary, CEMEX Latam Holding, CEMEX was able to raise $960 million that it used to lower its net debt to $16.3 billion at the end of 2012 from $17.1 billion at the end of 2011. As a result of the aforementioned, CEMEX's net debt/EBITDA ratio declined to 6.3x in 2012 from 7.2x in 2011. Leverage to Remain High Through 2014 Fitch expects CEMEX's leverage to remain high through the end of 2014. Fitch projects that CEMEX will generate about $2.8 billion in 2013, and $3.1 billion in 2014. Fitch projects free cash flow after capex and the payment of coupons on the company's perpetual notes to be $250 million in 2013 and $600 million in 2014. At these levels, absent asset sales, CEMEX's leverage will not fall below 5.0x until the second half of 2014. Manageable Debt Amortizations CEMEX has a manageable debt amortization schedule as a result of the refinancing of its 2009 Financing Agreement during September, the successful issuance of a $1.5 billion note due in 2022 during October, and the IPO during November. The company had $582 million of debt maturing in 2013 as of Dec. 31, 2012, of which $536 million was related to the securitization of receivables. During 2014 and 2015, CEMEX's amortizations total $564 million and $753 million, respectively. The company is expected to repay most of the debt falling due in 2013 and 2014 with proceeds from the proposed note issuance. Above-Average Recovery Prospects The 'RR3' Recovery Rating (RR) on the company's capital market's debt indicates above-average recovery prospects in the event of default (anticipated to be in the range of 50% to 70%). CEMEX and its subsidiaries have issued debt instruments from Mexico, the United States, the British Virgin Island, the Netherlands and Spain. The guarantors of these instruments are also domiciled in various countries. As a result of the complexity of the company's capital structure and the various legal jurisdictions, Fitch does not envision a bankruptcy scenario for CEMEX that would result in liquidation in the event of default. In Fitch's opinion, the most likely scenario under additional stress would be a negotiated restructuring of the debt subject to the Financing Agreement and the company's additional capital markets debt. In deriving a distressed enterprise valuation to determine the recovery under this scenario, Fitch discounted the company's LTM EBITDA to $2 billion, a level that would just cover operating leases, interest expenses and maintenance capital expenditures. A 30% decline in EBITDA to this level would most likely be driven by a marked deterioration of the eurozone, which would send the U.S. into a double-dip recession, and have a negative impact on CEMEX'S Mexican operations. In determining a projected recovery in the event of default, Fitch applied a 6x distressed EBITDA multiple. The low multiple reflects the high leverage within the industry, which would hamper a competitive bidding process. It also reflects the fact that if Europe would deteriorate to the point that the U.S. entered a double-dip recession, the core operations of some potential bidders would also be hemorrhaging cash, limiting their ability to pursue the purchase of CEMEX or some of its larger assets. Key Rating Drivers Positive rating actions could result from the continued recovery of the company's U.S. operations. A stabilization in risks related to the eurozone and Egypt would also be positive. Debt reduction through the sale of non-core assets or the issuance of additional equity would also accelerate deleveraging and would likely lead to positive rating actions in 2013. A number of factors could lead to a negative rating action. They include a downturn in the company's businesses in Mexico and Central/South America, which have been crucial in offsetting weakening of the company's northern European division and Mediterranean divisions. Fitch currently rates CEMEX as follows: CEMEX -- Foreign and local currency IDR 'B'; -- Senior unsecured notes 'B+/RR3'; -- National scale long-term rating 'BB-(mex)'; -- National scale short-term rating 'B (mex)'. In addition to the aforementioned ratings of CEMEX, Fitch also maintains the 'B' foreign currency IDRs of the following entities that CEMEX has used to issue debt, as well as 'B+/RR3' ratings of debt issued by them: Cemex Espana S.A. CEMEX Finance LLC CEMEX Finance Europe B.V., which is incorporated in the Netherlands CEMEX Materials Corporation, a limited liability company incorporated in the U.S. C5 Capital (SPV) Limited, a British Virgin Island restricted- purpose company C8 Capital (SPV) Limited, a British Virgin Island restricted- purpose company C10 Capital (SPV) Limited, a British Virgin Island restricted- purpose company C-10 Euro Capital (SPV) Limited, a British Virgin Island restricted-purpose company GRUPO ACP: Fitch Affirms 'BB-' Issuer Default Rating ---------------------------------------------------- Fitch Ratings has affirmed Grupo ACP Inversiones y Desarrollo's Issuer Default Rating (IDR) at 'BB-'. The Rating Outlook is Positive. KEY RATING DRIVERS - IDRs, VRs and SUPPORT RATING ACP's ratings reflect its industry leading expertise, consistent expansion strategy and expected changes in legal structure that will strengthen its balance sheet. The aforementioned changes will offset ACP's weaker financial performance, as well as delays in the implementation, growth and consolidation of the commercial strategies of its main subsidiaries. Fitch believes external support cannot be relied upon due to the entity's non-profit nature, underpinning ACP's Support Rating of '5'. ACP had an operative loss at end-2012 due to the decline of dividend income as well as to the increase in operating expenses. The decline in dividend income was largely due to a similar trend in the profitability of ACP's main revenue generator, Mibanco, which was not able to offset weak financial performance of the smallest subsidiaries as in past periods. In Fitch's opinion, ACP should be able to reverse its negative results during 2013, supported by an improvement and consolidation of Mibanco's results. ACP has invested considerable resources to support some key subsidiaries. However these subsidiaries - especially in Mexico and Brazil - have yet to mature and consolidate hence affecting ACP's cash flow generation which fell short of expectations. Fitch expects that the performance of these investments will pick up in the mid-term. As a non-for-profit organization ACP cannot raise capital, hence the decision to create a holding company (Grupo ACP Corp, ACPC) and open its capital to well know partners that already cooperate with ACP. As part of the transaction, ACP will transfer its operating subsidiaries to the aforementioned new holding company ACPC. As the group raised funds in international markets, its 'double leverage' (investment in subsidiaries + goodwill/ equity) increased to a peak of 171% in 2012. The cash flow projections consider a fresh capital injection from the new shareholders of ACPC, which once completed should bring ACP's double leverage close to 120%. In addition, it improves liquidity and cover ACP's cash flow needs for the next four years. ACP has a leading expertise in microcredit since 1969. ACP created Peru's largest microcredit bank (Mibanco) and invested in several microcredit ventures throughout the region amassing a significant expertise and in-depth knowledge of the economic environment and microcredit business in the region. In addition, the creation of ACPC and the incorporation of shareholders/ partners with significant expertise and clout in the microfinance business will enrich ACP's corporate governance and overall technical expertise. RATING SENSITIVITIES - IDRs, VRs and SUPPORT RATING ACP's ratings upside potential is largely dependent on a sustained improvement in financial performance of its operating companies and/or improvement of its double leverage ratios to around 120%. A severe deterioration of profitability or assets quality of its key operating companies, together with a higher leverage would place downward pressure on ACP's ratings. ACP is a non-for profit civil association active in microcredit throughout the region. It controls Mibanco, Peru's largest microfinance bank and has several related investments in Peru and seven countries in the region. Fitch has affirmed these ratings for ACP: -- Long-term foreign currency IDR at 'BB-'; Outlook Positive; -- Short-term foreign currency IDR at 'B'; -- Long-term local currency IDR at 'BB-'; Outlook Positive; -- Short-term local currency IDR at 'B'; -- Viability Rating at 'bb-'; -- Support Rating at '5'; -- Support Rating Floor at 'NF'. GRUPO KUO: Fitch Affirms 'BB' LT Issuer Default Rating ------------------------------------------------------ Fitch Ratings has affirmed Grupo Kuo, S.A.B. de C.V.'s ratings as follows: -- Long-term foreign currency Issuer Default Rating (IDR) at 'BB'; -- Long-term local currency IDR at 'BB'; -- Long-term national scale rating at 'A(mex)'; -- USD325 million senior notes due 2022 at 'BB'; -- MXN700 million Certificados Bursatiles due in 2015 at 'A(mex)'; -- MXN700 million Certificados Bursatiles due in 2019 at 'A(mex)'. The Rating Outlook is Stable. KEY RATING DRIVERS The ratings affirmation continues to reflect Kuo's strong operating performance, stable financial profile, solid liquidity and improved debt maturity profile. The ratings incorporate the company's diversified revenue stream, hard currency generation with 47% of total sales coming from exports and subsidiaries located outside of Mexico in 2012, and joint ventures (JVs) with international industry leaders. The ratings are limited by the exposure to volatility in demand and input costs related to commodity prices across business lines. Kuo's revenue growth has been supported by the integration of acquisitions and organic growth; while profitability has remained relatively stable. During 2012, revenues and EBITDA in dollar terms increased 6% and 16% to USD2.2 billion and USD215 million, when compared to full year 2011, driven mainly by higher volumes from the acquisitions of Fritec and Fresherized Foods in its automotive and consumer sectors, respectively, that fully offset the decrease of 2% in sales from the chemical sector mainly as a result of lower volume and flat prices. EBITDA margin, excluding the effect of a non-recurrent income of USD8 million coming from the registration of the brand Fritec, remained flat in around 9% in 2012. Fitch estimates that Kuo's free cash flow (FCF) generation to be negative to neutral in the following 12 to 24 months as it deploys its investing plan of around USD100 million in 2013. Fitch anticipates that current projects will be financed with cash on hand and internally generated funds. During the last five years, the average FCF generation estimated by Fitch after capital expenditures and dividends was negative for approximately USD30 million. Kuo's credit metrics in dollar terms remained stable in 2012. Total debt to EBITDA and net debt to EBITDA for year-end 2012 were 2.3x and 2.0x compared to 2.3x and 2.1x at year-end 2011. Total debt balance was USD496 million. Fitch anticipates that Kuo will maintain these ratios relatively stable in the absence of large debt financed acquisitions. However, Fitch believes that the company's current financial strength provides flexibility in case of pursuing merger and acquisitions opportunities. Management continues with its long-term target of net debt to EBITDA between 1.5x and 2.5x. Liquidity is ample and the debt maturity profile is manageable. At the end of 2012, Kuo had a cash balance of USD73 million, available committed credit lines of approximately USD20 million and short-term debt of USD15 million. In addition, the company's cash balance will be supported by additional USD54 million received in March 2013 from the sale of assets of its particleboard and laminates business to Maderas y Sinteticos de Mexico, S.A. de C.V. (Masisa). Kuo's next significant debt maturities are in 2015 and 2016 when MXN700 million (USD54 million) of Certificados Bursatiles and USD54 million of bank loans come due, respectively. RATING SENSITIVITIES Positive factors for the ratings include a combination of stable profitability across business segments, neutral to positive FCF generation through the cycle and consistent leverage below current levels. In contrast, negative ratings actions could arise by a combination of sustained deterioration of volume demand and profitability, or large debt financed acquisitions, leading to a net leverage above the company's long-term target. SIDERURGICA DEL TURBIO: S&P Lowers CCR to 'CC' & Withdraws Rating ----------------------------------------------------------------- Standard & Poor's Rating Services lowered its long-term corporate credit and senior unsecured issue ratings on Siderurgica del Turbio, S.A. (Sidetur) to 'CC' from 'CCC-' after first removing them from CreditWatch with negative implications, where the ratings were placed on Dec. 4, 2012. S&P then withdrew the ratings at Sidetur's request. The outlook at the time of the withdrawal was negative. "The downgrade reflects our opinion that Sidetur's ability to meet its financial obligations is very limited and will continue deteriorating in the next few months, as the reserve account associated with the company's senior unsecured notes will only cover the next principal and interest payment scheduled for April 20, 2013," said Standard & Poor's credit analyst Bernardo Gonzalez. In addition, the government of Venezuela has not yet provided any clarity as to the timing or the amount of compensation it will offer for the expropriation of Sidetur's assets. In S&P's view, the company relies entirely on this compensation to pay down its debt. =========== P A N A M A =========== AES EL SALVADOR: Fitch Assigns 'BB' Rating to $310MM Debt Issue --------------------------------------------------------------- Fitch Ratings expects to rate AES El Salvador Trust II's USD310 million debt issuance 'BB(EXP)'. Fitch has also assigned foreign and local currency Issuer Default Ratings (IDRs) of 'BB' to AES El Salvador Trust II. The Rating Outlook is Stable. The company expects to use the proceeds from the issuance to refinance all AES El Salvador Trust outstanding debt. AES El Salvador Trust II (AES El Salvador) is a special-purpose vehicle (SPV) located in Panama that was created to issue USD310 million of notes on behalf of AES El Salvador Group. AES El Salvador's ratings are based on the combined credit quality of AES Corp.'s operating assets in El Salvador: Compania de Alumbrado Electrico de San Salvador, Empresa Electrica de Oriente, AES CLESA y Cia, and Distribuidora Electrica de Usulutan. These operating companies will guarantee, on a joint and several basis, AES El Salvador's proposed debt issuance. KEY RATING DRIVERS AES El Salvador's ratings are based on the combined credit strength of the operating assets that guarantee its debt and reflect the group's relatively large size compared to the market, low business risk profile, and its predictable cash flow generation. The ratings also reflect the distribution companies' high exposure to government intervention risk, and the continued sovereign risk exposure through subsidies and regulation. The ratings also take into account the weakening macroeconomic conditions in El Salvador. The notes benefit from six-month debt- service reserve account in the form of cash funded from the guarantors or alternatively by a letter of credit provided by a financial institution. LARGE MARKET POSITION AND LOW BUSINESS RISK AES El Salvador's low business risk results from its stable customer base and a predictable cash flow. Although distribution service territories are not exclusive and distributors are free to compete for customers, the risk of new competition is low given that distribution companies possess significant economies of scale that make it inefficient for more than one company to operate in any particular geographic area. The company's operations are considered efficient compared with other distribution companies in the region. Although energy loses increased during 2012, to 9.36% from 8.71% in 2011 due to higher energy prices, the company is still considered efficient and losses low. The ratings factor in the key player position of AES El Salvador in the country as the largest electric distributor utility group in El Salvador. The company's market share position is high, serving 80% of El Salvador's electricity distribution area, and supplying 67% of the total energy demand in the country during 2012. The company serves approximately 1.2 million customers with 976 employees; in 2012 it sold 3.497 gigawatt hours (GWh) (2011: 3.440). The long-term power purchase agreements (PPAs) with generation companies contracts were established in a variable cost production based regulation since August 2011. The distribution companies in El Salvador are now required to contract at least 70% of expected demand by year end 2017. AES El Salvador has contracts for approximately 66% of its maximum average demand. This contractual requirement increases distribution companies contractual risks as customers are currently free to transfer between electricity suppliers, still paying wheeling fees to the incumbent distribution company. HIGH EXPOSURE TO GOVERNMENT INTERVENTION The ratings incorporate AES El Salvador's high exposure to regulatory risk, and receipt of government subsidies. The weakening macroeconomic conditions in El Salvador could affect large subsidies due to pressures on country fiscal accounts. Nevertheless, energy subsidies for residential customers are considered a priority for the government. The Salvadorian government subsidizes consumers with a monthly consumption of 99KWh or less. Additionally, the government implemented an extraordinary subsidy for users with consumption below 200 kilowatts (KWh). The permanence or modifications of this extraordinary subsidy is reviewed quarterly by the government. The country's users connected to the distribution system with energy consumption of 99KWh or less represent 66.6% of total users, which accentuate the importance of the government subsidies in the country. The state owned utility company, Comision Ejecutiva Hidroelectrica del Rio Lempa - (CEL) has been providing the funding for these subsidies. Subsidies are relevant to AES El Salvador as 63% of its total customers as of December 2012 have a monthly energy consumption of 99KWh or less. Total subsidies (consumption 99KWh or less, and extraordinary subsidy for consumption between 99KWh and 200KWh) for 2012 amounted USD135.2 million for the company (2011:106.7 million). The government has transferred subsidies to distribution companies in a timely manner. Any future payment delay that will impact AES El Salvador's leverage due to working capital financial needs, could pressure the ratings. TARIFF RESET SUPPORTS CREDIT FUNDAMENTALS The company's credit profile is supported by its stable and predictable cash flow generation and strengthening credit metrics as result of higher EBITDA levels as outcome of the tariff reset for the 2013-2017 period. The tariff reset was determined as per the new methodology that considers real costs of the companies based on El Salvador distribution grid instead of an optimized company model as it was considered in the past methodology. The recently implemented tariff reset is expected to increase the company's cash flow generation over the next four years, starting in 2013, by approximately 23% from previous years. EBITDA is expected to increase to approximately USD85 million by the end of 2013, and to average between USD90-95 million going forward. Total debt as of December 2012 amounted to USD297.3 million, maturing in 2016, and USD13 million of short-term banking debt. Fitch expects AES El Salvador leverage ratio to strengthen and to range between 3.5x and 4-0x as result of the new tariff regime. AES El Salvador's interest coverage will improve to 4.0x on average, from 2.5x-3.0x in the 2008-2012 period due to the higher EBITDA generation. AES El Salvador's liquidity is supported by its cash on hand, which as of year-end 2012 was approximately USD20.6 million, and a USD43.5 million short-term bank credit facility to buy electricity from generators. Historically, AES El Salvador has been able to access bank and debt capital markets. The long term debt maturity is expected to be extended to 2023 as per the issuance by AES El Salvador Trust II. Liquidity could be affected in case of higher energy prices for final users that could lead to higher ageing account receivables. Should distribution companies be forced to issue additional debt to fund their working capital requirements, while they continue distributing dividends, their credit quality could deteriorate. RATINGS SENSITIVITY -- AES El Salvador's ratings could be negatively affected by any combination of the following factors: deterioration of macroeconomic conditions in El Salvador that could affect subsidies payments from the government; deterioration of credit metrics; shortages of electricity supply resulting in lower consumption and lower cash flow generation; further political or regulatory intervention that negatively affects the company's financial performance; -- AES El Salvador's ratings could be positively affected by a sustainable leverage reduction; regulatory stability; and improving macroeconomic conditions in El Salvador. AES EL SALVADOR II: Moody's Assigns Ba2 CFR; Outlook is Stable -------------------------------------------------------------- Moody's Investors Service assigned a Ba2 Corporate Family Rating to the Panamanian AES El Salvador Trust II. Concurrently, Moody's also assigned a Ba2 senior unsecured rating to the proposed issuance of up to US$310 million 10-year senior unsecured notes to be issued by Trustco II. This is the first time Moody's has assigned a rating to AES El Salvador Trust II. The rating outlook is stable. Proceeds from Trustco II's offering will be used to fund the early redemption of the outstanding US$300 million senior unsecured Notes issued in 2006 by AES El Salvador Trust (Trustco) which are due in 2016 (2016 Notes) following the successful completion of a concurrent tender offer to purchase those 2016 notes for cash. Similar to the current structure, Trustco II's bullet Notes due in 2023 will be jointly, unconditionally and severally guaranteed by the following four electricity distribution affiliated companies: Compania de Alumbrado Electrico de San Salvador, S.A. de C.V. (CAESS) and its 98.29%-owned subsidiary of CAESS, Distribuidora Electrica de Usulutan, S.A. de C.V. (DEUSEM); AES CLESA S. en C. de C.V. (CLESA); and Empresa Electrica de Oriente, S.A. de C.V. ("EEO"). Ratings Rationale: "The Ba2 ratings reflect Moody's expectation that the guarantors will continue to report credit metrics that are robust for the current rating category" said Natividad Martel, a Moody's Assistant Vice President. The Ba2 ratings are based on the guarantors' consolidated credit profile due to Trustco's dependence on their payments under promissory notes to service the senior unsecured bonds and, if required, under their guarantees which represent a senior unsecured obligation of the guarantors. This is the only long-term debt of Trustco and the guarantors. Given the infrastructure nature of the companies' operations their financial results are closely tied to local economic and market conditions. Consequently, the Ba2 ratings are constrained by the government ratings of El Salvador that were downgraded to Ba3 in November 2012 with a stable outlook. In accordance with Moody's previously published guidance, infrastructure and utility companies would not normally be expected to have a rating more than two notches higher than that of the government of the country in which the majority of their business is located. In the case of AES El Salvador Trust, a one-notch, rather than two-notch, differential between the Ba2 ratings and the Ba3 government rating is considered appropriate given the absence of any non-domestic revenues at the guarantors. The Ba2 rating are underpinned by the regulated nature of the guarantors' revenues, the relatively low business risk profile of their distribution operations, their leading market position in El Salvador despite their overall modest size. Albeit subject to some inconsistency, the rating further captures Moody's opinion that the regulatory framework is overall credit supportive as evidenced by the overall fair outcome of the guarantors' recent tariff review that became effective January 1, 2013. The rating also acknowledges the progressive implementation of several regulatory initiatives to enhance the electric system's mechanisms including the requirement of the guarantors to procure over 70% of their power load under medium and long-term Power Procurement Agreements (PPA) along with their ability to recover energy costs on a more- timely basis. The Ba2 ratings also consider some structural features for the debt securities, including a debt service reserve account, and the assumption that the guarantors will be able to renew their committed bank credit facilities that aggregate US$16.5 million before their scheduled expiration in January 2014, and that they collectively will maintain significant cash balances amid an appropriate dividend policy managed by AES. The retention of sufficient cash balances is particularly relevant until there is an improvement in the country's energy mix that results in less volatile spot power prices. In this regard, maintaining a robust liquidity profile remains key for the ratings and the one-notch difference with the government rating. The latter also considers the limited moratorium risk given that the country's economy is officially dollarized driving the current Ba1 Foreign Currency bond and deposit ceiling ratings of El Salvador. The stable rating outlook reflects Moody's expectation that the guarantors will be prudently managed, and that the recent tariff adjustments will allow the credit metrics to remain commensurate with the low-range of the Baa-rating category despite the aggressive historical dividend payout-ratio. It also assumes that ample liquidity with adequate committed bank facilities and cash balances will be maintained to cope with any external shocks. Given the guarantors' dependence on El Salvador's economic and political environment, the stable outlook also incorporates the expectation that the sovereign rating will not be further downgraded given its current stable outlook. Limited prospects for a rating upgrade exist over the near to medium term since the ratings are effectively capped by the current Ba3 government sovereign rating. Over the longer term, the ratings could be upgraded if the government sovereign rating is upgraded and the guarantors' consolidated CFO pre-W/C interest coverage and RCF to debt metrics are above 3.5x and 17%, respectively, on a sustainable basis. Trustco II's ratings could be downgraded if Moody's perceives that the liquidity arrangements are insufficient to comfortably cope with potential external shocks. Negative rating momentum could result from unexpected changes in the regulatory framework that further reduces the predictability or consistency in which regulation is applied, or if the El Salvadorian sovereign ratings were to experience a further downgrade and/or if AES' ratings were to experience a multi-notch downgrade. Evidence of deterioration in the consolidated credit metrics, such that the consolidated interest coverage ratio and the CFO pre-W/C to debt fell below 2.5x and 8.5%, respectively, for an extended period or the continuation of AES' aggressive distribution policy results in RCF to debt falling below 4.5% for an extended period, could also result in a downgrade. The principal methodology used in this rating was the Regulated Electric and Gas Utilities Industry Methodology published in August 2009. The guarantors' service territory extends over 80% of the country while their market share in terms of the national electricity demand exceeds 65%. They are subject to the regulatory overview of the Superintendencia General de Electricidad y Telecomunicaciones (SIGET). The guarantors' ultimate parent company is AES Corp (AES; CFR: Ba3, stable), headquartered in Arlington, Virginia, which holds indirect ownership stakes ranging between 64.15% and 89.11%. =============================== T R I N I D A D & T O B A G O =============================== PETROTRIN: OWTU Head Accuses Firm of Shutting Down Good Oil Wells ----------------------------------------------------------------- Carolyn Kissoon at Trinidad Express reports that Oilfields Workers' Trade Union (OWTU) President General Ancel Roget has accused state oil firm Petroleum Company of Trinidad and Tobago (Petrotrin) of working with government to shut down producing oil wells located along the proposed path of the Solomon Hochoy Highway extension to Point Fortin. Mr. Roget said more than 65 wells were being capped to facilitate development in the Penal area, according to Trinidad Express. The report notes that Mr. Roget said, "They are reducing our ability to produce by putting down these complex in areas where you have productive wells. They want to run that highway in the pathway of productive wells which will cut the company's production." Mr. Roget, the report relates, said a survey showed the wells could be reactivated to add to the company's crude oil production. The report discloses that Mr. Roget challenged the oil company to explain why it was capping the wells to make way for major projects including a judicial complex, university and highway. Petrotrin President Khalid Hassanali said in December only 46 barrels of oil a day would be lost if the company capped 39 wells to facilitate the $7.5 billion highway project, the report recalls. The capping of the wells is being undertaken at a cost of US$60 million, the report adds. 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 related 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$12 billion lawsuit by World GTL Inc. against Petrotrin, the report added. =============== X X X X X X X X =============== * BOND PRICING: For the Week March 11 to March 15, 2013 ------------------------------------------------------- Issuer Coupon Maturity Currency Price ------ ------ -------- -------- ----- ARGENTINA --------- ARGENT-$DIS 8.28 12/31/2033 USD 57.5 ARGENT-$DIS 8.28 12/31/2033 USD 58 ARGENT-$DIS 8.28 12/31/2033 USD 58 ARGENT-$DIS 8.28 12/31/2033 USD 58.491 ARGENT-$DIS 8.28 12/31/2033 USD 60 ARGENT- PAR 1.18 12/31/2038 ARS 45.344 ARGENT- DIS 7.82 12/31/2033 EUR 45 ARGENT- DIS 7.82 12/31/2033 EUR 50 ARGENT- DIS 7.82 12/31/2033 EUR 50.5 ARGENT- DIS 4.33 12/31/2033 JPY 35.5 ARGENT- DIS 4.33 12/31/2033 JPY 36 ARGENT- PAR 0.45 12/31/2038 JPY 15 ARGENT-PAR&GDP 0.45 12/31/2038 JPY 8 ARGENTINA 9 11/29/2018 USD 74.875 ARGNT-BOCON PRE9 2 3/15/2014 ARS 152.5 BANCO MACRO SA 9.75 12/18/2036 USD 71.25 BANCO MACRO SA 9.75 12/18/2036 USD 71.03 BANCO MACRO SA 9.75 12/18/2036 USD 72.1 CAPEX SA 10 3/10/2018 USD 73.9 CAPEX SA 10 3/10/2018 USD 73.375 CIA LATINO AMER 9.5 12/15/2016 USD 66 EMP DISTRIB NORT 9.75 10/25/2022 USD 46 EMP DISTRIB NORT 10.5 10/9/2017 USD 95.001 EMP DISTRIB NORT 9.75 10/25/2022 USD 46.125 METROGAS SA 8.875 12/31/2018 USD 72.875 PROV BUENOS AIRE 9.625 4/18/2028 USD 61.664 PROV BUENOS AIRE 9.625 4/18/2028 USD 61.625 PROV BUENOS AIRE 9.375 9/14/2018 USD 67.25 PROV BUENOS AIRE 9.375 9/14/2018 USD 67.127 PROV BUENOS AIRE 10.875 1/26/2021 USD 70.263 PROV BUENOS AIRE 10.875 1/26/2021 USD 70.245 PROV DE FORMOSA 5 2/27/2022 USD 62.25 PROV DE MENDOZA 5.5 9/4/2018 USD 74.42 PROV DE MENDOZA 5.5 9/4/2018 USD 74.375 PROV DEL CHACO 4 12/4/2026 USD 27.25 PROV DEL CHACO 4 11/4/2023 USD 54.75 TRANSENER 9.75 8/15/2021 USD 46.69 TRANSENER 8.875 12/15/2016 USD 41 TRANSENER 9.75 8/15/2021 USD 42.75 CAYMAN ISLAND ------------- BANCO BPI (CI) 4.15 11/14/2035 EUR 71.75 BCP FINANCE CO 4.239 45.917 BCP FINANCE CO 5.543 45.7 BES FINANCE LTD 4.5 65 BES FINANCE LTD 5.58 69.167 CAM GLOBAL FIN 6.08 12/22/2030 EUR 71.25 CHINA FORESTRY 10.25 11/17/2015 USD 52 CHINA FORESTRY 10.25 11/17/2015 USD 52.5 CHINA SUNERGY 4.75 6/15/2013 USD 59.141 ERB HELLAS CAYMA 9 3/8/2019 EUR 16 ESFG INTERNATION 5.753 56.6 GOL FINANCE 8.75 77 JINKOSOLAR HOLD 4 5/15/2016 USD 66.899 LDK SOLAR CO LTD 10 2/28/2014 CNY 69.071 LUPATECH FINANCE 9.875 31 LUPATECH FINANCE 9.875 30.95 PUBMASTER FIN 6.962 6/30/2028 GBP 63.086 RENHE COMMERCIAL 11.75 5/18/2015 USD 74.5 RENHE COMMERCIAL 13 3/10/2016 USD 78.75 RENHE COMMERCIAL 13 3/10/2016 USD 72.75 RENHE COMMERCIAL 11.75 5/18/2015 USD 75.005 SUNTECH POWER 3 3/15/2013 USD 33 SUNTECH POWER 3 3/15/2013 USD 44.75 CHILE ----- ALMENDRAL TEL 3.5 12/15/2014 CLP 43.436 CHILE 3 1/1/2042 CLP 65.066 CHILE 3 1/1/2042 CLP 65.066 CHILE 3 1/1/2040 CLP 66.564 CHILE 3 1/1/2040 CLP 66.564 COLBUN SA 3.2 5/1/2013 CLP 25.26 TALCA CHILLAN 2.75 12/15/2019 CLP 65.673 PUERTO RICO ----------- PUERTO RICO CONS 6.2 5/1/2017 USD 58.5 PUERTO RICO CONS 6.5 4/1/2016 USD 69.48 VENEZUELA --------- PETROLEOS DE VEN 5.5 4/12/2037 USD 69.75 PETROLEOS DE VEN 5.375 4/12/2027 USD 69.35 *********** 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., Washington, D.C., USA, Marites O. Claro, Joy A. Agravante, Rousel Elaine T. Fernandez, Valerie U. Pascual, Julie Anne L. Toledo, Frauline S. Abangan, and Peter A. Chapman, Editors. Copyright 2013. 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$775 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 A. Chapman at 215-945-7000 or Nina Novak at 202-241-8200. * * * End of Transmission * * *