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/raid1/www/Hosts/bankrupt/TCRLA_Public/130823.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 Friday, August 23, 2013, Vol. 14, No. 167 Headlines B O L I V I A BANCO FIE: Moody's Affirms Local Currency Sr. Debt Rating at Ba3 B R A Z I L GOL LINHAS: Reveals Prelim. Air Traffic Figures for July 2013 MARFRIG ALIMENTOS: Complies With Provision of Article 12 of CVM C A Y M A N I S L A N D S ADVENT OXEA: Shareholders to Hear Wind-Up Report on Sept. 10 BIBI INVESTMENTS: Creditors' Proofs of Debt Due Sept. 12 DIA BARCELONA: Members to Hear Wind-up Report on Sept. 16 DIA MADRID: Members to Hear Wind-up Report on Sept. 16 DUNE EQUITY: Shareholders' Final Meeting Set for Oct. 15 DUNE HOLDINGS: Shareholders' Final Meeting Set for Oct. 15 ED EQUITY: Shareholders' Final Meeting Set for Oct. 15 ELYN CORPORATION: Members Receive Wind-Up Report EMERALD DUNES: Shareholders' Final Meeting Set for Oct. 15 EMERALD EQUITY: Shareholders' Final Meeting Set for Oct. 15 EMERALD INVESTMENTS: Shareholders' Final Meeting Set for Oct. 15 FIVE POINTS: Shareholder to Hear Wind-Up Report on Sept. 20 FRONTIER SECURITIZATION: Member to Hear Wind-Up Report on Sept. 20 KE U SIMJO: Shareholder to Hear Wind-Up Report on Sept. 20 KEY FUND: Shareholder to Hear Wind-Up Report on Sept. 2 E L S A L V A D O R * EL SALVADOR: To Get US$25MM IDB Loan to Boost Coastal Tourism J A M A I C A SAGICOR LIFE: Expands Mandate With Citi for Fund Administration * JAMAICA: Upcoming Fare Increase Will Impact Inflation Rate M E X I C O DESARROLLADORA HOMEX: Hires Restructuring Advisers SANLUIS RASSINI: S&P Raises CCR to 'B+'; Outlook Stable X X X X X X X X * Fitch Says Return on Equity Negative for Latam Corporates - - - - - ============= B O L I V I A ============= BANCO FIE: Moody's Affirms Local Currency Sr. Debt Rating at Ba3 ---------------------------------------------------------------- Moody's Latin America affirmed all ratings for Banco FIE S.A. These are the E+ bank financial strength rating, which maps to a baseline credit assessment of b1, the Ba3/Not Prime global local currency and the B1/Not Prime global foreign currency deposit ratings, for long and short-term respectively. At the same time, the Ba3 and B2 global local currency senior and subordinated debt ratings were affirmed. Additionally, the long and short-term local currency Aa1.bo/BO-1 and foreign currency Aa2.bo/BO-1 national scale deposit ratings were affirmed, as well as the Aa3.bo long-term national scale rating assigned to FIE's local currency subordinated debt. The outlook on all ratings is stable. The following ratings assigned to Banco FIE S.A. (Bolivia) were affirmed: Bank Financial Strength Rating: E+ Global Local Currency Deposit Rating: Ba3/NP Global Local Currency Senior Debt Rating: Ba3 Global Local Currency Subordinated Debt Rating: B2 Global Foreign Currency Deposit Rating: B1/NP Long Term Local Currency National Scale Deposit Rating: Aa1.bo Short Term Local Currency National Scale Deposit Rating: BO-1 Local Currency National Scale Senior Debt Rating: Aa1.bo Local Currency National Scale Subordinated Debt Rating: Aa3.bo Long Term Foreign Currency National Scale Deposit Rating: Aa2.bo Short Term Foreign Currency National Scale Deposit Rating: BO-1 Ratings Rationale: In affirming FIE's ratings, Moody's noted its well-established franchise within the Bolivian microfinance industry, which has been bolstered by its transition to a full-fledged bank operation in early 2010, with benefits to its product mix and funding profile, as it has permitted FIE to get funding at lower cost and increase the granularity of its deposits (98% of saving accounts and 75% of term deposits outstanding balance is lower than $5.000). The ratings also incorporate FIE's increased lending appetite and growing market share, as evidenced by a compound average loan growth rate of 34% over the past three years, which is higher than the banking system average of 23% and a multiple of 1.45x of Bolivia's 23.5% nominal annual economic expansion in the same period. FIE has traditionally been a microfinance lender, but since obtaining its bank license in 2010, it has sought to diversify its loan portfolio mix, by focusing also on lending to small and medium-sized companies (SMEs), therefore continuing to bank its customers as they move up the income ladder. Loans to SMEs have come to represent about 20% of loans as of December 2012. The portfolio growth has been accompanied by the expansion of FIE's branch network and workforce, in an attempt to boost its presence in rural areas of the country. While Moody's acknowledges FIE's strategy of leveraging its customer base, it views its rapid loan growth with concern as it increases risks to its future asset quality, particularly as the bank broadens its business scope and footprint. Moreover, this strategy has led to deterioration in its efficiency indicators because of higher administrative and personnel costs, which caused the cost-to-income ratio to reach 76.7% as of June 2013, from 66.7% as of YE2012. As the bank expands and diversifies, its profitability has been sound but declining, evidencing the costs of its expansion, as shown by an increase in operating expenses of 30% in 2012 and the effect of increasing competition on margins, reflected in higher growth in interest expense (38% in 2012) than in interest income (29% in 2012). Moody's believes that going forward financial margins are going to come under pressure, as for other banks in the Bolivian banking system, because of higher taxes on earnings and the potential impact of the new financial services law, which is expected to be passed in the coming weeks. The law is likely to reduce banks' profitability through the imposition of caps on lending rates for productive sectors and housing financing, as well as minimum deposit rates. Moody's notes that FIE maintains high loan and deposit granularity, and a balance sheet with limited mismatches in its term structure or currency denomination of assets and liabilities. Moreover, the bank presents adequate capitalization levels, with a total capital ratio of 13.01% and a Tier 1 ratio of 8.58% as of June 2013. Those ratios reflect its shareholders' extraordinary capital contributions in 2011 and 2012 of $5 million and $4.5 million respectively, and the issuance of BS 70M of subordinated debt in November 2012, to support its expansion strategy, as well as a policy of reinvesting a high proportion of earnings. Moody's also notes that FIE's deposit ratings incorporate one notch of uplift from its stand-alone baseline credit assessment of b1, reflecting Moody's assessment of the probability of systemic support because of its increasing market share in deposits. The principal methodology used in this rating was Global Banks published in May 2013. 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 ".mx" for Mexico. Banco FIE S.A. is headquartered in La Paz, Bolivia, and had BS 7.3 billion in assets, BS 5.5 billion in deposits, and BS 0.55 billion in shareholders' equity as of June 2013. =========== B R A Z I L =========== GOL LINHAS: Reveals Prelim. Air Traffic Figures for July 2013 ------------------------------------------------------------- GOL Linhas Aereas Inteligentes S.A. disclosed its preliminary air traffic figures for July 2013. PRASK, Yield and Fuel Prices Net PRASK presented an 18% growth over July/12, even with a supply reduction of 4.8% in the domestic market in the period. This is the highest PRASK increase of the last two years, and demonstrates the Company's efforts in optimizing its supply and maximizing the profitability of its routes. Net yield in July posted a 28% increase year-over-year, to between R$24.5 and R$25.0 cents, in line with GOL's strategy of upgrading its services and attracting business and leisure passengers during the winter holidays high season. Fuel prices moved up by 4% in the month when compared to July/12, driven by the depreciation of the Real against the Dollar in the last months comprising the jet fuel price formation period, which carries a time lag. With the recent Dollar hike, the company expect record fuel prices for the next months. Domestic Market In July, GOL maintained its strategy of optimizing domestic supply, leading to a 4.8% reduction in the domestic market when compared to July/12. International Market In July, supply moved up by 26.4%, when compared to the same month in 2012, mainly due to the flights to Santo Domingo, Miami and Orlando launched in December/12. Gol said that in the second half it will study the opening of new destinations in the U.S., which currently includes just Miami and Orlando, the report discloses. * * * As reported in the Troubled Company Reporter-Latin America on Feb. 7, 2013, Fitch Ratings assigned an expected rating of 'B/RR5(exp)' to Gol Linhas Aereas Inteligentes S.A.'s proposed unsecured notes. Fitch also assigns a 'B+' rating to its foreign and local currency long-term Issuer Default Ratings. MARFRIG ALIMENTOS: Complies With Provision of Article 12 of CVM --------------------------------------------------------------- Marfrig Alimentos SA disclosed to shareholders and the market, in complying with the main provision of article 12 of Brazilian Securities Commission (CVM) Ruling No. 358 dated Jan. 3, 2002, that it has received notice, to the effect that shareholder Capital Research Global Investors, ("CRGI"), acting in the capacity of holding company for a number of overseas investment management companies, now holds 4.87% of common shares of stock issued by Marfrig Alimentos, such that it now manages a total of 25,384,300 common shares of stock issued and outstanding. The Company's total capital stock is currently represented by 520,747,405 common shares. The communication received from "CRGI" further states that, in addition to the abovementioned ownership interest, Capital Group International, Inc. ("CGII"), a company belonging to the same economic group as "CRGI", manages 27.294.200 common shares representing 5.29% of the Company's shares of stock issued and outstanding. Moreover, neither "CGII", nor Capital Research Global Investors, or any person related thereto, is a contracting party to any agreement purporting to regulate shareholder voting rights or the buying and selling of securities issued by the Company. About Marfrig Alimentos Marfrig Alimentos SA (formerly Marfrig Frigorificos e Com de Alimentos SA) is a Brazil-based company engaged in the processing and distribution of meat and poultry products. Its products include cooked beef, bacon, sausages, beef cubes, minced knuckles, steaks and other food items including pre-cooked and frozen potato, frozen vegetables, canned meat, fish and ready meals. The Company operates in 13 countries, and exports its products to more than 100 destinations worldwide. * * * As reported in the Troubled Company Reporter - Latin America on May 13, 2013, Standard & Poor's Ratings Services lowered its global scale corporate credit rating to 'B' from 'B+' and its national scale rating to 'brBBB-' from 'brBBB+' on Marfrig Alimentos S.A. The outlook is negative. ========================== C A Y M A N I S L A N D S ========================== ADVENT OXEA: Shareholders to Hear Wind-Up Report on Sept. 10 ------------------------------------------------------------ The shareholders of Advent Oxea (Cayman) Limited will receive on Sept. 10, 2013, at 10:00 a.m., the liquidator's report on the company's wind-up proceedings and property disposal. The company's liquidator is: Delta FS Limited c/o Janeen Aljadir Telephone: (345) 743 6626 PO Box 11820 Grand Cayman KY1-1009 Cayman Islands BIBI INVESTMENTS: Creditors' Proofs of Debt Due Sept. 12 -------------------------------------------------------- The creditors of Bibi Investments Limited are required to file their proofs of debt by Sept. 12, 2013, to be included in the company's dividend distribution. The company commenced wind-up proceedings on July 23, 2013. The company's liquidator is: Buchanan Limited c/o Allison Kelly Telephone: (345) 949 0355 Facsimile: (345) 949 0360 P.O. Box 1170, George Town Grand Cayman KY1-1102 Cayman Islands DIA BARCELONA: Members to Hear Wind-up Report on Sept. 16 --------------------------------------------------------- The members of Dia Barcelona Leasing Ltd will receive on Sept. 16, 2013, at 10:00 a.m., the liquidator's report on the company's wind-up proceedings and property disposal. The company's liquidator is: Sophia Richards 69 Dr. Roy's Drive, George Town PO Box 1043 Grand Cayman KY1-1102 Cayman Islands DIA MADRID: Members to Hear Wind-up Report on Sept. 16 ------------------------------------------------------ The members of Dia Madrid Leasing Ltd. will receive on Sept. 16, 2013, at 10:00 a.m., the liquidator's report on the company's wind-up proceedings and property disposal. The company's liquidator is: Sophia Richards 69 Dr. Roy's Drive, George Town PO Box 1043 Grand Cayman KY1-1102 Cayman Islands DUNE EQUITY: Shareholders' Final Meeting Set for Oct. 15 -------------------------------------------------------- The shareholders of Dune Equity Limited will hold their final meeting on Oct. 15, 2013, at 9:30 a.m., to receive the liquidator's report on the company's wind-up proceedings and property disposal. The company's liquidator is: Westport Services Ltd. c/o Bonnie Willkom Telephone: (345) 949 5122 Facsimile: (345) 949 7920 P.O. Box 1111 Grand Cayman KY1-1102 Cayman Islands DUNE HOLDINGS: Shareholders' Final Meeting Set for Oct. 15 ---------------------------------------------------------- The shareholders of Dune Holdings Limited will hold their final meeting on Oct. 15, 2013, at 9:45 a.m., to receive the liquidator's report on the company's wind-up proceedings and property disposal. The company's liquidator is: Westport Services Ltd. c/o Bonnie Willkom Telephone: (345) 949 5122 Facsimile: (345) 949 7920 P.O. Box 1111 Grand Cayman KY1-1102 Cayman Islands ED EQUITY: Shareholders' Final Meeting Set for Oct. 15 ------------------------------------------------------ The shareholders of ED Equity Limited will hold their final meeting on Oct. 15, 2013, at 10:00 a.m., to receive the liquidator's report on the company's wind-up proceedings and property disposal. The company's liquidator is: Westport Services Ltd. c/o Bonnie Willkom Telephone: (345) 949 5122 Facsimile: (345) 949 7920 P.O. Box 1111 Grand Cayman KY1-1102 Cayman Islands ELYN CORPORATION: Members Receive Wind-Up Report ------------------------------------------------ The members of Elyn Corporation received on Aug. 22, 2013, the liquidator's report on the company's wind-up proceedings and property disposal. The company's liquidator is: Wang Chin-Po c/o Michelle R. Bodden-Moxam Telephone: (345) 946 6145 Facsimile: (345) 946 6146 Portcullis TrustNet (Cayman) Ltd. The Grand Pavilion Commercial Centre Oleander Way, 802 West Bay Road P.O. Box 32052 Grand Cayman, KY1-1208 Cayman Islands EMERALD DUNES: Shareholders' Final Meeting Set for Oct. 15 ---------------------------------------------------------- The shareholders of Emerald Dunes Finance Limited will hold their final meeting on Oct. 15, 2013, at 10:15 a.m., to receive the liquidator's report on the company's wind-up proceedings and property disposal. The company's liquidator is: Westport Services Ltd. c/o Bonnie Willkom Telephone: (345) 949 5122 Facsimile: (345) 949 7920 P.O. Box 1111 Grand Cayman KY1-1102 Cayman Islands EMERALD EQUITY: Shareholders' Final Meeting Set for Oct. 15 ----------------------------------------------------------- The shareholders of Emerald Equity Limited will hold their final meeting on Oct. 15, 2013, at 9:00 a.m., to receive the liquidator's report on the company's wind-up proceedings and property disposal. The company's liquidator is: Westport Services Ltd. c/o Bonnie Willkom Telephone: (345) 949 5122 Facsimile: (345) 949 7920 P.O. Box 1111 Grand Cayman KY1-1102 Cayman Islands EMERALD INVESTMENTS: Shareholders' Final Meeting Set for Oct. 15 ---------------------------------------------------------------- The shareholders of Emerald Equity Investments Limited hold their final meeting on Oct. 15, 2013, at 9:15 a.m., to receive liquidator's report on the company's wind-up proceedings and property disposal. The company's liquidator is: Westport Services Ltd. c/o Bonnie Willkom Telephone: (345) 949 5122 Facsimile: (345) 949 7920 P.O. Box 1111 Grand Cayman KY1-1102 Cayman Islands FIVE POINTS: Shareholder to Hear Wind-Up Report on Sept. 20 ----------------------------------------------------------- The shareholder of Five Points Offshore Fund, Ltd. will receive on Sept. 20, 2013, at 8:30 a.m., the liquidator's report on the company's wind-up proceedings and property disposal. The company's liquidator is: Intertrust SPV (Cayman) Limited 190 Elgin Avenue, George Town Grand Cayman KY1-9005 Cayman Islands c/o Kim Charaman/Jennifer Chailler Telephone: (345) 943 3100 FRONTIER SECURITIZATION: Member to Hear Wind-Up Report on Sept. 20 ------------------------------------------------------------------ The member of Frontier Securitization XVI Limited will receive on Sept. 20, 2013, at 8:45 a.m., the liquidator's report on the company's wind-up proceedings and property disposal. The company's liquidator is: Intertrust SPV (Cayman) Limited 190 Elgin Avenue, George Town Grand Cayman KY1-9005 Cayman Islands c/o Kim Charaman/Jennifer Chailler Telephone: (345) 943 3100 KE U SIMJO: Shareholder to Hear Wind-Up Report on Sept. 20 ---------------------------------------------------------- The shareholder of Ke U Simjo will receive on Sept. 20, 2013, at 9:15 a.m., the liquidator's report on the company's wind-up proceedings and property disposal. The company's liquidator is: Intertrust SPV (Cayman) Limited 190 Elgin Avenue, George Town Grand Cayman KY1-9005 Cayman Islands c/o Kim Charaman/Jennifer Chailler Telephone: (345) 943 3100 KEY FUND: Shareholder to Hear Wind-Up Report on Sept. 2 ------------------------------------------------------- The shareholder of Key Fund Ltd. will receive on Sept. 2, 2013, at 10:00 a.m., the liquidator's report on the company's wind-up proceedings and property disposal. The company's liquidator is: Appleby Trust (Cayman) Ltd Clifton House, 75 Fort Street PO Box 1350 Grand Cayman KY1-1108 Cayman Islands ===================== E L S A L V A D O R ===================== * EL SALVADOR: To Get US$25MM IDB Loan to Boost Coastal Tourism --------------------------------------------------------------- El Salvador's Ministry of Tourism will receive a US$25 million loan from the Inter-American Development Bank to finance the development of tourism attractions in La Libertad and Usulutan coastal regions. Tourism is a young but dynamic sector in El Salvador, as the number of hotels and restaurants grew by 30 percent over the past seven years, and the number of international tourist arrivals climbed to 1.25 million in 2012. Domestic tourism accounts for over 4 million trips a year. However, most of the country's beaches and other coastal attractions lack the infrastructure required to increase the number of overnight visitors or to treat wastewater generated by such activities. The national development plan has made tourism a priority to improve job opportunities. Coupled with other projects being carried out as part of a broader coastal development strategy, the IDB-financed project will help El Salvador boost tourism revenue and employment in La Libertad, which is known as a destination for surfers, and Usulut n, which is home to the largest mangroves in Central America. The project will finance multiple infrastructure works such as boardwalks, piers, wharfs, handcraft markets, scenic outlooks, visitor centers and wildlife observation points. The goal is that such public amenities will enable further private investments in lodging and other tourism services that will attract more visitors for longer stays. In addition, the project will support local micro, small and medium-sized businesses in improving their services for tourists and will help strengthen the institutions responsible for tourism and environmental management in the coastal regions. The project will also finance improvements in wastewater treatment in key tourism centers, including Alegr�a, El Tunco, Jiquilisco and Puerto El Triunfo. Land use plans and other environmental studies will also be carried out for the B lsamo Coast and the Jiquilisco Bay. The IDB loan is for a 25-year term, with a 5.5-year grace period and an interest rate based on LIBOR. ============= J A M A I C A ============= SAGICOR LIFE: Expands Mandate With Citi for Fund Administration --------------------------------------------------------------- Citi has expanded its mandate from Sagicor Life Jamaica to provide a comprehensive suite of fund administration, global custody and treasury services for Sagicor Investment Jamaica Limited (SIJL): Sagicor Sigma Funds (Unit Trust) and Sagicor Investments (Securities Dealer), as well as Sagicor Bank Jamaica Limited's (SBJL) proprietary assets. With a proud history dating back to 1840, Sagicor views itself as a dynamic group which has been redefining financial services in the Caribbean, building a strong base from which it has expanded into the international financial services market. Citi currently provides daily securities valuation, reconciliation, fund accounting, reporting and custody services for Sagicor Life Jamaica and Sagicor Life Cayman Islands. "We are very pleased to extend our relationship with Citi for these additional assets," said Ivan Carter, CFO, Sagicor Jamaica. "Citi's local presence, proprietary global sub-custody network and proven expertise as a fund administrator were all important factors in our decision to expand our relationship further." With US$13.4 trillion in assets under custody and US$1.9 trillion assets under administration, Citi is a leading service provider to the global financial services industry. Citi's full suite of investment service solutions delivered through Citi OpenInvestor lets managers focus on their core activities of managing assets and serving their clients. "This new mandate from Sagicor is further evidence that managers in emerging markets, like the Caribbean, are increasingly recognizing the value of outsourcing investment services and treasury functions," said Neeraj Sahai, Global Head, Securities and Fund Services, Citi. Peter Moses, Jamaica Citi Country Officer, added "We are pleased to help Sagicor become more efficient and expand their business by leveraging our global scale and operational expertise." Citi Open Investor provides institutional, alternative and wealth managers with middle-office, fund services, custody, investing and financing solutions that are focused on their specific challenges and customized to their individual needs. About Sagicor Sagicor Life Jamaica is the leading life insurance group in the country. The company commenced operations in 1970 as Life of Jamaica Limited, the first locally owned life insurance company and the first life insurance company to be listed on the Jamaica Stock Exchange (JSE). Since its inception, Sagicor Life has gained a solid reputation as an innovator and leader in the Caribbean life insurance industry. The company continues to be the market leader among life and health insurance, fund management and investments services. * * * As reported in the Troubled Company Reporter-Latin America on Aug. 7, 2013, The Gleaner said that Sagicor Jamaica has got court approval to restructure its operations under which all companies within the group will become subsidiaries of a new holding company. Under the new scheme the new Sagicor Jamaica Group will become the parent of insurance company Sagicor Life Jamaica Limited, securities dealer Sagicor Investments Jamaica Limited, and commercial bank Sagicor Bank Jamaica Limited, according to The Gleaner. Sagicor Jamaica commenced operations in 1970 as Life of Jamaica Limited. The insurance company was bailed out by the Jamaican Government in the 1990s and subsequently sold to a Barbados operation. Its name and that of other local subsidiaries were later changed to align with the brand identity of ultimate parent Sagicor Financial Corporation. * JAMAICA: Upcoming Fare Increase Will Impact Inflation Rate ------------------------------------------------------------ RJR News reports that concern is being raised about the impact of the upcoming increase in bus and taxi fares on the country's inflation rate. It has been disclosed that effective Sunday, August, 25, there will be 25 per cent hike in fares, according to RJR News. The report relates that economist, Dr. Davidson Daway, said with transportation costs weighing heavily on the Consumer Price Index (CPI) there will be a spike in inflation. Data released earlier this month showed the pace of price increases in July was more than double that of June, RJR News notes. RJR News discloses that the Statistical Institute of Jamaica (Statin) reported that prices rose 0.5 per cent compared to 0.2 per cent in June. July's inflation increased the rate for the last 12 months to 4.4 per cent, the report adds. =========== M E X I C O =========== DESARROLLADORA HOMEX: Hires Restructuring Advisers -------------------------------------------------- Emily Glazer and Amy Guthrie at The Wall Street Journal report that a group of bondholders in struggling Mexican homebuilder Desarrolladora Homex has hired restructuring advisers, people familiar with the matter said. Investment bank Blackstone Group and law firm Akin Gump Strauss Hauer & Feld LLP, along with local law firm Cervantes Sainz, are working with some Homex bondholders, these people said, according to The Wall Street Journal. The group includes both U.S. and foreign financial institutions representing close to 50% of Homex debt, one of these people said, the report relates. The Wall Street Journal notes that investor sentiment has soured in recent months toward Mexican builders such as Homex, Urbi Desarrollos Urbanos SAB and Corporacion Geo SAB that focus on low- income housing. The report relates that the builders have attempted to stay in business as cash flow turned negative and credit evaporated. The Wall Street Journal discloses that the bondholder group is willing to fund a new business plan for Culiacan-based Homex but so far efforts to work with the Mexican banks haven't succeeded, this person said. Plans may materialize in the coming months after the bondholder group has access to more information on the company, this person said. In May, Homex said it hired J.P. Morgan Securities as a financial adviser to "analyze alternatives" that could strengthen the company's financial position, the report relates. Homex defaulted in July on payments to holders of its $250 million in 2019 bonds, the report notes. The builder also has $250 million in notes due 2015 and $400 million due 2020 that ratings agencies consider nonperforming, the report says. Fitch Ratings expects that Homex bondholders might be able to recover somewhere between 30% to 50% of their investments. The Mexican government, the report notes, faced with widespread social problems from poorly planned and often isolated new communities, began in 2011 to limit subsidies for developments it sees contributing to urban sprawl or that otherwise aren't likely to thrive. Consumers have also increasingly rejected such homes, which often lack comprehensive services and require long commutes to work, the report relays. The shift in government support and consumer demand has pushed home builders like Homex into severe financial distress, the report says. Homex reported dismal second-quarter financial results that Deutsche Bank analyst Esteban Polidura said increases the likelihood of the builder entering into bankruptcy proceedings, the report relays. The report says that Homex sold just 710 homes during the April- June period as it struggled to finance operations on thin cash reserves and operate under legal restrictions. That compares with more than 5,400 homes sold during the first three months of the year and over 11,000 homes in the second quarter of 2012, the report notes. The report relates that revenue from home sales dwindled to MXN290 million from MXN4.40 billion in the year-ago quarter, curbed by a moratorium on payments to the builder by Mexico's largest mortgage lender, Infonavit. The company reported a net loss of MXN10 billion for the second quarter compared with a year-earlier net profit of MXN2 billion, the report adds. * * * As reported in the Troubled Company Reporter-Latin America on April 18, 2013, Fitch Ratings downgraded Desarrolladora Homex, S.A.B. de C.V.'s ratings: -- Foreign currency Issuer Default Rating (IDR) to 'B' from 'BB-'; -- Local currency IDR to 'B' from 'BB-'; -- USD250 million in senior notes due 2015 to 'B/RR4' from 'BB-'; -- USD250 million in senior notes due 2019 to 'B/RR4' from 'BB-'; -- USD400 million in senior notes due 2020 to 'B/RR4' from 'BB-'. SANLUIS RASSINI: S&P Raises CCR to 'B+'; Outlook Stable ------------------------------------------------------- Standard & Poor's Ratings Services raised its long-term corporate credit rating on SANLUIS Rassini S.A. de C.V. (SANLUIS Rassini) to 'B+' from 'B'. The outlook is stable. "The rating action reflects SANLUIS Rassini's improved credit metrics and the gradual reduction of debt supported by the company's effective financial management," said Standard & Poor's credit analyst Luis Manuel Martinez. It also reflects the company's positive and sustainable medium-term growth prospects amid more favorable industry fundamentals, and new contracts in hand that should lead to stable revenue growth and margins. The rating action also incorporates S&P's expectations that the company will increase cash flow generation and reduce its leverage metrics in the next 12 to 18 months. The rating on SANLUIS Rassini reflects S&P's assessment of the company's "weak" business risk profile, "aggressive" financial risk profile, and "adequate" liquidity. S&P's assessment of SANLUIS Rassini's "weak" business risk profile reflects the company's exposure to the cyclicality of the automotive industry, as well as the company's limited product portfolio and narrow geographic diversification. The partly offsetting factors are the company's high market shares in components for suspensions and brakes in NAFTA and Brazil, which are supported by a competitive cost structure, its longstanding relationships with its key customers, and enhanced technological additions throughout the manufacturing process to improve quality standards. S&P believes SANLUIS Rassini's relatively high operating margins, when compared to its peers, also support the rating. =============== X X X X X X X X =============== * Fitch Says Return on Equity Negative for Latam Corporates ----------------------------------------------------------- With return on equity (ROE) down for Latin American corporates, shareholder pressure similar to that experienced in the U.S. could emerge over the near term, according to a new Fitch Ratings report. "The trend for ROE turned negative in 2012, with 45 percent of Latin America corporates with international ratings reporting ROE of less than 8 percent," said Joe Bormann, a Managing Director at Fitch Ratings. "The largest negative factor was region-specific, with Brazil and Chile corporates the undisputed laggards. Median ROE levels are in the mid-single digit levels in Chile and Brazil, well below historical averages, and compares unfavorably with 12 percent in Mexico and Peru, and 10 percent in Colombia and Argentina." ROE was down in 2012 across nearly all rating categories, but particularly among investment-grade names and in spite of growing EBITDA. Higher-rated corporates continue to offer better average ROE. Among the weakest in the investment-grade category, 50 percent are family owned or controlled and 16 percent are state owned. The high prevalence of family-controlled corporates in Latin America mitigates shareholder pressure for dividends and share buybacks. Pulp and paper, and steel companies were among the most consistent underperformers in Latin America. Pulp companies were hit by excess capacity and weak demand in Europe. Steel companies, particularly those in Brazil, bucked the Latin American growth trend, with declining EBITDA levels and tighter margins, due to rising costs and more imported steel in the market. Energy companies also showed only modest returns, particularly state owned or those exposed to political pressure. *********** 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 * * *