/raid1/www/Hosts/bankrupt/TCRLA_Public/130826.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, August 26, 2013, Vol. 14, No. 168
Headlines
A R G E N T I N A
* ARGENTINA: Loses U.S. Appeal of Defaulted Bonds Case
B A H A M A S
ULTRAPETROL (BAHAMAS): Posts Second Quarter 2013 Results
B E R M U D A
PINK BEACH: PBC Buys Firm Out of Receivership; To Cut 40+ Jobs
B R A Z I L
JBS SA: Moody's Confirms Ba3 Rating; Changes Outlook to Negative
OGX PETROLEO: Faces Ibovespa Removal in Proposed Index Shift
C A Y M A N I S L A N D S
AMZ INDUSTRIES: Members' Final Meeting Set for Sept. 3
BAM ESPRESSO: Shareholders' Final Meeting Set for Sept. 27
BIGHORN INVESTMENTS: Member to Hear Wind-Up Report on Sept. 20
CAPE COLD: Shareholders' Final Meeting Set for Sept. 12
CAPITAL ALLIANCE: Shareholder to Hear Wind-Up Report on Sept. 2
CHINA MASS: Shareholders' Final Meeting Set for Sept. 3
CHINA MASS HOLDINGS: Shareholders' Final Meeting Set for Sept. 3
CIBC ARGENTINA: Shareholders' Final Meeting Set for Sept. 5
HALBIS US: Shareholder to Hear Wind-Up Report on Sept. 13
KINKIHOME REAL: Shareholder to Hear Wind-Up Report on Sept. 12
KTBEST TECHNOLOGY: Shareholder to Hear Wind-Up Report on Sept. 10
MISTRAL INC: Shareholder to Hear Wind-Up Report on Sept. 20
ONSLOW MACRO: Members' Final Meeting Set for Sept. 3
SB MADAGASCAR: Shareholder to Hear Wind-Up Report on Sept. 12
STG MANAGEMENT: Shareholders' Final Meeting Set for Sept. 20
G U A T E M A L A
EMPRESA ELECTRICA: Moody's Lifts Senior Unsecured Rating to Ba2
J A M A I C A
* JAMAICA: BoJ Reports Marginal Growth in Construction Sector
* Absence of Growth Agenda Contributes to Unstable Currency
M E X I C O
GRUPO FERTINAL: S&P Lowers Corporate Credit Rating to 'CCC+'
X X X X X X X X
BOND PRICING: For the Week From Aug. 19 to Aug. 23, 2013
* Reinsurers' Underwriting Gains Offset By Unrealised Losses
- - - - -
=================
A R G E N T I N A
=================
* ARGENTINA: Loses U.S. Appeal of Defaulted Bonds Case
------------------------------------------------------
Bob Van Voris at Bloomberg News reports that Argentina lost its
appeal of a ruling that would force it to pay holders of US$1.5
billion in defaulted bonds when it makes a payment to investors
who took discounted restructured debt.
The U.S. Court of Appeals in New York said it would delay the
effect of its ruling until the U.S. Supreme Court decides whether
to review the case, according to Bloomberg News.
Bloomberg News notes that a three-judge appeals court panel,
referring to the nation as "a uniquely recalcitrant debtor,"
rejected Argentina's arguments that a ruling in favor of the
defaulted debt-holders, led by billionaire hedge fund manager Paul
Singer's NML Capital Ltd. and Aurelius Capital Management, would
violate its sovereignty and expose it to a fresh financial crisis
by threatening a default of the new bonds.
Argentina has vowed never to pay holders of its defaulted bonds,
whom the country's leaders have called "vultures," and its
legislature passed a law in 2005 barring payment of the defaulted
bonds, says the report. The Aug. 24 ruling leaves Argentina with
the unlikely prospect of persuading the appeals court to overrule
itself or the Supreme Court to consider the case, the report
added.
"What the consequences predicted by Argentina have in common is
that they are speculative, hyperbolic and almost entirely of the
Republic's own making," U.S. Circuit Judge Barrington Parker wrote
in the Court's opinion, Bloomberg News relays.
Deep Discount
Bloomberg News recalls that Argentina in 2001 defaulted on a
record $95 billion of foreign debt. Holders of about 91 percent of
the bonds agreed to take new exchange bonds in 2005 and 2010, at a
deep discount, it added.
The Court also disagreed with Argentina's arguments that a ruling
against it would hamper future efforts by overwhelmed debtor
nations to restructure their debt, the report notes.
Bloomberg News says holders of the defaulted bonds have won U.S.
court rulings recognizing their right to be paid. They asked the
appeals court to uphold rulings by U.S. District Judge Thomas
Griesa in Manhattan that they said give them the ability to
collect the $1.5 billion they said they're owed.
Court Order
Bank of New York Mellon Corp., the indenture trustee for
restructured bonds, argued that it shouldn't be forced to halt
payments to holders of those bonds if Argentina refuses to comply
with a court order to pay the defaulted bonds. The court on
Aug. 24 agreed with Judge Griesa's ruling that Bank of New York
and other institutions involved in the restructured bond payments
can't act in concert with Argentina to violate his orders, reports
Bloomberg News.
"Our decision affirms a proposition essential to the integrity of
the capital markets: borrowers and lenders may, under New York
law, negotiate mutually agreeable terms for their transactions,
but they will be held to those terms," Judge Parker said in his
opinion, Bloomberg News notes.
Bloomberg News recalls that Argentina has spent the past decade
opposing claims brought in U.S. courts by holders of the defaulted
bonds.
A three-judge panel of the U.S. Court of Appeals heard arguments
in the case from both sides in February.
The judges on the appeals panel are Rosemary Pooler, appointed by
President Bill Clinton, a Democrat; Reena Raggi and Parker, both
named to the court by George W. Bush, a Republican.
The case is NML Capital Ltd. v. Republic of Argentina, 12-00105,
U.S. Court of Appeals for the Second Circuit (New York).
=============
B A H A M A S
=============
ULTRAPETROL (BAHAMAS): Posts Second Quarter 2013 Results
--------------------------------------------------------
On Aug. 13, 2013, Ultrapetrol (Bahamas) Limited disclosed its
financial results for the second quarter ended June 30, 2013.
The company recorded second quarter 2013 revenues of $121.8
million.
The company recorded adjusted EBITDA of $32.6 million in the
second quarter of 2013; which includes adjusted EBITDA of $20.5
million from its River Business, adjusted EBITDA of $6.8 million
from Offshore Supply Business segment, adjusted EBITDA of $0.2
million from Ocean Business segment, and adjusted EBITDA of $5.2
million from other activities-primarily foreign currency exchange
cash gains.
A full text copy of the company's financial results is available
free at:
http://is.gd/vqGJFL
* * *
Ultrapetrol (Bahamas) Limited (Nasdaq:ULTR), is an industrial
transportation company serving marine transportation needs in
three markets (River Business, Offshore Supply Business and Ocean
Business).
As reported in the Troubled Company Reporter-Latin America on
May 7, 2012, Moody's Investors Service downgraded Ultrapetrol
(Bahamas) Limited's Corporate Family to Caa1 from B3.
Concurrently, the company's $180 million senior secured notes due
November 2014 were downgraded to Caa1 from B3. A speculative
grade liquidity rating of SGL-3 has been assigned reflecting an
adequate liquidity profile. The ratings outlook is stable.
=============
B E R M U D A
=============
PINK BEACH: PBC Buys Firm Out of Receivership; To Cut 40+ Jobs
--------------------------------------------------------------
The Royal Gazette reports that more than 40 hotel workers are set
to lose their jobs at the end of the month when the Pink Beach
Club shuts down for extensive renovations under new ownership, it
has been confirmed.
But the Bermuda Government insists that the new owners will be
seeking to take on more than 200 employees when the revamped
resort opens again next summer, according to The Royal Gazette.
The report notes that the hotel was placed in receivership three
years ago, but last month Government confirmed that a deal to sell
off the property had been reached. The report notes that sweeping
concessions were offered for the BM$12.5 million sale; with new
owner PBC Holdings awarded BM$6.5 million of tax breaks over five
years.
Media reports claimed that hotel staff was now facing the axe as a
result of the sale, the report discloses.
The report notes that a Tourism Ministry spokesman said the new
owner, a subsidiary of Stoneleigh Capital LLC, had gone into
partnership with the Capella Hotel Group "to undertake extensive
renovations during this winter and spring 2014 to create a 95-
room, five-star Capella Resort".
"The reopen date is scheduled for May 2014," the spokesman added,
the report relays.
"All staff was formally notified at the end of July that the hotel
will be closed effective Aug. 31, 2013 and all staff will receive
full redundancy. . . . Pink Beach currently has 42 employees and
it is envisioned the fully completed and operational Capella
Resort will employ approximately 215 individuals," the report
quoted the spokesman as saying.
The resort was under the control of Butterfield Bank while in
receivership, but the company relinquished responsibility for Pink
Beach after it was sold, the report adds.
===========
B R A Z I L
===========
JBS SA: Moody's Confirms Ba3 Rating; Changes Outlook to Negative
----------------------------------------------------------------
Moody's Investors Service has confirmed the long-term ratings for
JBS S.A. and its wholly-owned subsidiaries. At the same time, the
outlook for all the ratings have been changed to negative. This
concludes the rating review which began on June 10, 2013 following
the announcement of the proposed acquisition of Seara Brasil and
Zenda leather operations from Marfrig.
The confirmation of the Ba3 rating reflects Moody's view that the
company will benefit from a more diversified business profile and
be able to integrate and capture synergies from the Seara and
Zenda acquisitions. The confirmation also incorporates
expectations that JBS will be able to restore its credit metrics
to levels prior to the transaction within a period of 12-18
months. The negative outlook reflects the heightened leverage
following the acquisitions and the task of integrating the
operationally challenged Seara business. The negative outlook also
reflects the resumption of an aggressive acquisition and financial
policies of JBS.
The following rates have been confirmed:
JBS SA:
- CFR / Senior Unsecured Rating: Ba3
Issuer: JBS USA:
- $ 650 M 7.250% senior notes due 2021, guaranteed by JBS USA
Holdings, JBS SA, JBS Hungary Holdings Kft: Ba3
- $ 700 M 11.625% senior notes due 2014, guaranteed by JBS USA
Holdings, JBS SA, JBS Hungary Holdings Kft : Ba3
- $ 475 M senior term loan B due 2018, guaranteed by JBS USA
Holdings, JBS SA, JBS Hungary Holdings Kft : Ba2
- $ 700 M 8.250% global notes due 2020, co-issued by JBS USA
Finance and guaranteed by JBS USA Holdings, JBS SA, JBS Hungary
Holdings Kft : Ba3
Issuer: JBS Finance II
- $ 900 M 8.250% global bonds due 2018, guaranteed by JBS Hungary
Holdings Kft and JBS SA : Ba3
Issuer: JBS SA
- $ 300 M 10.500% global notes due 2016, guaranteed by JBS Hungary
Holdings Kft, JBS USA Holdings, JBS USA LLC and Swift Beef Company
: Ba3
Issuer: Bertin SA
- $ 350 M 10.250% senior notes due 2016, guaranteed by JBS Hungary
Holdings Kft : Ba3
The outlook for all ratings is negative.
Ratings Rationale:
JBS' Ba3 ratings reflect the improvement in the company's credit
metrics over the last few quarters, particularly the strong
performance of the Brazilian beef segment and the more recent
recovery in its US poultry division. The company's ratings are
also supported by the global strength of its operations as one of
the world's largest protein producers and by its diversification
in terms of protein products, raw material sourcing, and sales.
Offsetting these positive attributes are the inherent volatility
of the protein industry, which is subject to risk factors such as
animal cycles and diseases, weather conditions and supply
imbalances. Additionally, the company's aggressive growth
strategy, in the form of several acquisitions made over the years,
also pose additional constraint for the ratings.
On June, 2013, JBS announced the proposed acquisition of Marfrig's
Seara Brasil and Zenda leather operations for BRL 5.85 billion.
The agreement involved the assumption of Marfrig's bank debt
maturing from 2013 to 2017 by JBS. The transaction is expected to
close by the end of September 2013 following the review of CADE
(Conselho Administrativo de Defesa Economica), the Brazilian anti-
trust authority.
Moody's expects JBS to focus on the integration of the new assets
and in the improvement of credit metrics mainly through enhanced
operational efficiencies. So far, the company announced to the
market that it has already been able to renegotiate most of the
debt involved in the deal in order to reduce interest cost and
increase average maturity.
In the short-term credit metrics will be negatively impacted,
since total debt will increase by BRL 5.85 billion while earnings
and cash flow would only capture roughly four months of Seara and
Zenda's operations in 2013. With that, Adjusted Debt-to-EBITDA
ratio could reach up to 4.7x in 2013, compared to 4.3x in 2012.
In assigning a negative outlook Moody's indicates that it will
monitor the company's commitment to reduce its financial leverage,
post positive free cash flow and maintain liquidity at near
current levels, while integrating recently acquired assets.
A downgrade to the rating could be caused by sustained financial
leverage, a weaker liquidity profile, or if the company fails to
generate free cash flow on a consistent basis. Quantitatively, a
downgrade could occur if Debt-to-EBITDA is sustained above 4.0x,
EBITA/Interest below 2.0x or RCF to Net Debt below 15%. All credit
metrics are adjusted according to Moody's standard adjustments and
definitions.
An upgrade to the ratings could occur if JBS reports stronger and
less volatile consolidated cash flows and proves able to improve
operating margins. An upgrade would require the company to report
consistently healthy free cash flow, while maintaining RCF to Net
Debt above 22% and adjusted Debt-to-EBITDA below 6.5x on a
sustained basis.
The principal methodology used in this rating was the Global
Protein and Agriculture Industry published in May 2013.
Headquartered in Sao Paulo, Brazil, JBS S.A. is the world's
largest protein producer in terms of revenues, slaughter capacity
and production. It is the leader beef, chicken and leather player
and a leading lamb producer on a global basis, besides being the
third largest pork producer in the USA. The company has large
scale and diversification, with presence in more than 100
countries.
Consolidated net revenues totaled BRL 82.7 billion for the last
twelve months period ended June, 2013, with adjusted EBITDA margin
of 7.3% in the same period. JBS USA, represented by beef
operations in the US and Australia, is the company's largest
business segment in terms of revenues, representing 45% of total.
JBS Mercosul, represented by beef and more recently poultry
operations mainly in Brazil, accounts for 25% of revenues.
Pilgrim's Pride, the company's poultry business in the US,
accounts for 21% of revenues, while the US Pork business
contributes the balance of 9%.
OGX PETROLEO: Faces Ibovespa Removal in Proposed Index Shift
------------------------------------------------------------
Denyse Godoy & Ney Hayashi at Bloomberg News report that OGX
Petroleo e Gas Participacoes SA, the oil producer founded by Eike
Batista that has lost 82 percent of its market value this year,
would be dropped from the Ibovespa under proposed changes to the
Brazilian benchmark.
BM&FBovespa SA (BVMF3) would exclude any companies whose shares
trade for less than BRL1 (41 cents) as part of planned changes in
the way it determines the relative importance of individual stocks
in the index, the exchange operator said in a statement, according
to Bloomberg News.
Bloomberg News notes that OGX is currently the only one on the
index below that threshold.
While OGX's plunge this year has made it one of the ten smallest
companies on the 71-member Ibovespa, it has been responsible for
about a third of the index's 16 percent decline, Bloomberg News
notes. Its impact on the gauge has been caused partly by the
exchange's reliance on trading volume for determining the
weighting of individual stocks in addition to market value,
Bloomberg News says.
OGX Weighting
OGX accounts for 2.2 percent of the Ibovespa's weighting on Aug.
23, according to data compiled by Bloomberg. Under the current
methodology, it would increase to 4.3 percent in September from
the current 2.1 percent, according to an Aug. 16 preview of
changes, Bloomberg News relates.
The final decision on the changes will be announced by Sept. 13,
according to BM&FBovespa's statement. A committee of exchange
executives and bank and brokerage-firm officials wrote the
proposal, Bloomberg News discloses.
Based in Rio de Janeiro, Brazil, OGX is an independent exploration
and production company with operations in Latin America.
* * *
As reported in the Troubled Company Reporter-Latin America on
July 17, 2013, Moody's Investors Service downgraded OGX Petroleo e
Gas Participaaoes S.A.'s Corporate Family Rating to Ca from Caa2
and OGX Austria GmbH's senior unsecured notes ratings to Ca from
Caa2. The rating outlook remains negative.
==========================
C A Y M A N I S L A N D S
==========================
AMZ INDUSTRIES: Members' Final Meeting Set for Sept. 3
------------------------------------------------------
The members of AMZ Industries Ltd. will hold their final meeting
on Sept. 3, 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:
AMR Abdul Majid Zahid
c/o Maples and Calder, Attorneys-at-law
PO Box 309, Ugland House
Grand Cayman KY1-1104
Cayman Islands
BAM ESPRESSO: Shareholders' Final Meeting Set for Sept. 27
----------------------------------------------------------
The shareholders of Bam Espresso Fund SPC will hold their final
meeting on Sept. 27, 2013, at 4:00 p.m., to receive the
liquidator's report on the company's wind-up proceedings and
property disposal.
The company's liquidator is:
DMS Corporate Services Ltd
c/o Ronan Guilfoyle
Telephone: (345) 946 7665
Facsimile: (345) 946 7666
dms House, 2nd Floor
P.O. Box 1344 Grand Cayman KY1-1108
Cayman Islands
BIGHORN INVESTMENTS: Member to Hear Wind-Up Report on Sept. 20
--------------------------------------------------------------
The member of Bighorn Investments Limited will receive on
Sept. 20, 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:
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
CAPE COLD: Shareholders' Final Meeting Set for Sept. 12
-------------------------------------------------------
The shareholders of Cape Cold Investors will hold their final
meeting on Sept. 12, 2013, at 11:00 a.m., to receive the
liquidator's report on the company's wind-up proceedings and
property disposal.
The company's liquidator is:
Trident Liquidators (Cayman) Limited
c/o Mrs. Eva Moore
Trident Trust Company (Cayman) Limited
Telephone: (345) 949 0880
Facsimile: (345) 949 0881
P.O. Box 847, George Town
Grand Cayman KY1-1103
Cayman Islands
CAPITAL ALLIANCE: Shareholder to Hear Wind-Up Report on Sept. 2
---------------------------------------------------------------
The shareholder of Capital Alliance Private Equity, 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:
Samuel Oniovosa
Plot 1684, Sansui Fafunwa Street
Victoria Island
Lagos, Nigeria
CHINA MASS: Shareholders' Final Meeting Set for Sept. 3
-------------------------------------------------------
The shareholders of China Mass Media Corp. will hold their final
meeting on Sept. 3, 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:
Wang Shengcheng
c/o Maples and Calder, Attorneys-at-law
PO Box 309, Ugland House
Grand Cayman KY1-1104
Cayman Islands
CHINA MASS HOLDINGS: Shareholders' Final Meeting Set for Sept. 3
----------------------------------------------------------------
The shareholders of China Mass Media Holdings Limited will hold
their final meeting on Sept. 3, 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:
Wang Shengcheng
c/o Maples and Calder, Attorneys-at-law
PO Box 309, Ugland House
Grand Cayman KY1-1104
Cayman Islands
CIBC ARGENTINA: Shareholders' Final Meeting Set for Sept. 5
-----------------------------------------------------------
The shareholders of CIBC Argentina Management II LDC will hold
their final meeting on Sept. 5, 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:
CIBC Private Equity Management, Inc.
Kathryn Casparian/Peter Martin
c/o CIBC World Markets Corp.
425 Lexington Avenue, 2nd Floor
New York 10017
United States of America
Telephone: +1 (416) 594 7506
HALBIS US: Shareholder to Hear Wind-Up Report on Sept. 13
---------------------------------------------------------
The shareholder of Halbis U.S. Credit Alpha Master Fund, Ltd. will
receive on Sept. 13, 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:
Ogier
c/o Jo-Anne Maher
Telephone: (345) 815 1762
Facsimile: (345) 949 9877
KINKIHOME REAL: Shareholder to Hear Wind-Up Report on Sept. 12
--------------------------------------------------------------
The shareholder of Kinkihome Real Estate Investment will receive
on Sept. 12, 2013, at 10:30 a.m., the liquidator's report on the
company's wind-up proceedings and property disposal.
The company's liquidators are:
Samit Ghosh
Simon Owiti
c/o Adam Fox
Telephone: 949-7601
KTBEST TECHNOLOGY: Shareholder to Hear Wind-Up Report on Sept. 10
-----------------------------------------------------------------
The shareholder of Ktbest Technology, Inc. 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:
Chung, Chia-Pao
No. 6 Technology Road 5
HsinChu Science Park
HsinChu, Taiwan 30078
Telephone: +011 (8863) 578 2345
Facsimile: +011 (8863) 577 3261
MISTRAL INC: Shareholder to Hear Wind-Up Report on Sept. 20
-----------------------------------------------------------
The shareholder of Mistral Inc. will receive on Sept. 20, 2013, at
9:30 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
ONSLOW MACRO: Members' Final Meeting Set for Sept. 3
----------------------------------------------------
The members of Onslow Macro Fund No. 2 Limited will hold their
final meeting on Sept. 3, 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:
Gene Dacosta
c/o Noel Webb
Telephone: (345) 814 7394
Facsimile: (345) 945 3902
P.O. Box 2681 Grand Cayman KY1-1111
Cayman Islands
SB MADAGASCAR: Shareholder to Hear Wind-Up Report on Sept. 12
-------------------------------------------------------------
The shareholder of SB Madagascar GP Ltd. will receive on Sept. 12,
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:
Ogier
c/o Jo-Anne Maher
Telephone: (345) 815 1762
Facsimile: (345) 949 9877
STG MANAGEMENT: Shareholders' Final Meeting Set for Sept. 20
------------------------------------------------------------
The shareholders of STG Management will hold their final meeting
on Sept. 20, 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:
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
=================
G U A T E M A L A
=================
EMPRESA ELECTRICA: Moody's Lifts Senior Unsecured Rating to Ba2
---------------------------------------------------------------
Moody's Investors Service upgraded the Corporate Family Rating
and senior unsecured rating of Empresa Electrica de Guatemala S.A.
(EEGSA) to Ba2 from Ba3. The rating outlook remains positive.
Ratings Rationale:
"The upgrade to Ba2 of EEGSA's ratings and positive outlook
reflect Moody's expectation that EEGSA's credit metrics will
remain robust for the Ba-rating category" said Natividad Martel,
Vice-President/Senior Analyst at Moody's. This expectation is
driven by the reasonable outcome in terms of credit supportiveness
of the recent VAD-tariff review which will remain in place until
the end of July 2018 further enhancing EEGSA's cash flow
visibility. The rating action further incorporates the assumption
that upon completion of EEGSA's strategic planning review later
this year its capital structure will not change significantly over
the medium term in terms of a significant increase in its
financial leverage. In this regard, the rating action assumes that
despite management's aggressive target dividend payout ratio of
90% EEGSA will be able to report 3-year average interest coverage
of at least 3.5x and CFO pre/WC to debt in the very high teens
with Retained cash flow (RCF) to debt in the low teens.
These strong credit metrics help to mitigate Moody's concern
regarding the degree of credit supportiveness of the regulatory
environment. Moody's acknowledges that until the next tariff
review in 2018 the utility's exposure to new regulatory decisions
is substantially limited, and considers the recent VAD-tariff
review that progressed in a significantly smoother fashion
compared to the 2008 VAD-tariff review, a credit positive. This
also evidences, in Moody's opinion, an improved relationship
between the Guatemalan regulatory body, the CNEE, and EEGSA,
following the utility's change in ownership at the end of 2010,
and the appointment of the new head members of the CNEE's Board
last summer after the change in government in January 2012.
Nevertheless, Moody's assessment regarding the regulatory
environment considers that the tariff review process is exposed to
some degree to the outcome of presidential elections (next one
expected at the end of 2015) given the possible impact on the
composition of CNEE's Board. This potential political interference
reduces the transparency and predictability of the regulatory
framework, a credit negative.
Further regulatory features supporting Moody's opinion include
that EEGSA's authorized return of 7% on its distribution assets
compares poorly with the returns allowed in other regional
jurisdictions. While some regulatory mechanisms enhance EEGSA's
ability to recover certain operational costs, they do not fully
insulate its cash flows from some regulatory lag exposure.
Consequently, on a global basis, Moody's continues to rank the
Guatemalan regulatory framework below average in terms of
predictability, consistency, and overall credit supportiveness.
The rating could be upgraded by one notch to Ba1, the same as the
Guatemalan sovereign rating, if EEGSA's financial policy upon
completion of the company's strategic planning review update
mentioned earlier allows the issuer to record credit metrics that
remain robust with the Ba-rating category. Specifically, if going
forward EEGSA's 3-year average interest coverage remains above
3.5x and CFO pre/WC to debt and RCF to debt stays in the very high
and low teens' range, respectively, upward rating pressure would
increase. In addition, an upgrade of the rating could be triggered
if EEGSA's liquidity profile remains robust with a well-defined
strategy to address the refinancing risk associated with the
maturity of the 8.5% senior unsecured 144-A notes well in advance
of their scheduled maturity in December 2014 ($68 million
currently outstanding).
A change in the outlook to stable and/or a rating downgrade could
be triggered by signals of a substantial deterioration in the
Guatemalan regulatory framework that negatively affects EEGSA's
ability to recover costs on a timely basis. A change in the
outlook and/or a rating downgrade is likely if EEGSA does not
manage its internal liquidity in a prudent fashion and/or chooses
to increase its financial leverage to fund significant dividend
distributions that results in a deterioration in EEGSA's credit
metrics. Specifically, a rating downgrade could be triggered if
EEGSA's RCF to debt and interest coverage falls below 10% and
3.5x, respectively, for an extended period.
The principal methodology used in this rating was Moody's Global
Regulated Electric Utilities published in August 2009.
Headquartered in Guatemala City, EEGSA is the largest electric
utility in the country in terms of GWh distributed. EEGSA owns
100% of the distribution assets within its service area and
operates under an Authorization Agreement expiring in 2048, to
provide electric distribution services to the Departments of
Guatemala, Escuintla and Sacatepequez. EEGSA is indirectly 80.9%
owned by EPM (Baa3, stable) since October 22, 2010. The balance is
held by the Guatemalan government (14.2%), by individual
shareholders (3%), and by EEGSA employees (2%). At the end of
March 2013, EEGSA recorded total assets of Q4,568 million (around
$570 million) and cash flow from operations of Q283 million
(around $35 million) for last twelve months ended in March.
=============
J A M A I C A
=============
* JAMAICA: BoJ Reports Marginal Growth in Construction Sector
-------------------------------------------------------------
RJR News reports that the Bank of Jamaica is reporting that the
construction sector recorded marginal growth during the April to
June quarter. This is compared to a 4.2 per cent contraction last
year, according to RJR News.
The report relates that the performance of the industry mainly
reflected the impact of infrastructural development programs and
hotel projects such as Highway 2000, Riu Palace Jamaica and
Memories White Sand Resort Phase One.
In the meantime, the report notes, the mining and quarrying sector
is also estimated to have recorded growth during the three months
in contrast to a 9.7 per cent decline in 2012.
RJR News notes that the Bank of Jamaica said the improvement
reflected normalization at one alumina plant that had encountered
technical difficulties in the corresponding period last year.
Against this background, total alumina production increased by 8.6
per cent, the report relates. Total bauxite production grew by
2.2 per cent during the period, the report says.
* Absence of Growth Agenda Contributes to Unstable Currency
-----------------------------------------------------------
RJR News reports that Francis Kennedy, president of the Jamaica
Chamber of Commerce (JCC) said the absence of a growth agenda is
contributing to the continued instability in the foreign currency
market.
Mr. Kennedy was commenting on the average selling rate for
American currency reaching JM$102, according to RJR News. The
local currency has lost 10 per cent of its value since the start
of the year, the report relates.
RJR News notes that Mr. Kennedy said until the growth agenda is in
place further movement should be expected in the exchange rate.
===========
M E X I C O
===========
GRUPO FERTINAL: S&P Lowers Corporate Credit Rating to 'CCC+'
------------------------------------------------------------
Standard & Poor's Ratings Services lowered its global scale
corporate credit rating on Grupo Fertinal S.A. de C.V. (Fertinal)
to 'CCC+' from 'B-'. The outlook is negative.
"The downgrade reflects the company's increased liquidity
pressures, weak near-term operating outlook and further
deteriorated financial metrics, which we do not expect to
significantly recover during 2013 and which will likely persist
during part of 2014," said Standard & Poor's credit analyst
Francisco Gutierrez. A sluggish recovery in still depressed
fertilizer prices and high raw materials prices, particularly
ammonia--in spite of signs of declining costs of this feedstock--
pressure Fertinal's liquidity. S&P believes this weak financial
performance will continue to constrain the company's liquidity and
could put further downward pressure on the ratings.
===============
X X X X X X X X
===============
BOND PRICING: For the Week From Aug. 19 to Aug. 23, 2013
--------------------------------------------------------
Issuer Coupon Maturity Currency Price
------ ------ -------- -------- -----
Argentine Republic Government 7.82 12/31/2033 EUR 56
International Bond
Argentine Republic Government
International Bond 7.82 12/31/2033 EUR 55.5
Argentine Republic Government
International Bond 8.28 12/31/2033 USD 55
Provincia de Buenos
Aires/Argentina 10.9 1/26/2021 USD 69.8
Argentine Republic Government
International Bond 8.28 12/31/2033 USD 57.5
Provincia de Buenos
Aires/Argentina 9.38 9/14/2018 USD 68.4
Empresa Distribuidora Y
Comercializadora Norte 9.75 10/25/2022 USD 51
Banco Macro SA 9.75 12/18/2036 USD 67.8
Provincia de Buenos
Aires/Argentina 9.63 4/18/2028 USD 63
Capex SA 10 3/10/2018 USD 71
Cia Latinoamericana de
Infraestructura & Servicios SA 9.5 12/15/2016 USD 63
Cia de Transporte de
Energia Electrica en Alta 8.88 12/15/2016 USD 47.6
Tension Transe
Provincia de Mendoza
Argentina 5.5 9/4/2018 USD 74
Argentine Republic Government
International Bond 1.18 12/31/2038 ARS 43.7
Argentine Republic
Government International Bond 8.28 12/31/2033 USD 55
Argentine Republic
Government International Bond 7.82 12/31/2033 EUR 45
Cia de Transporte de
Energia Electrica en 9.75 8/15/2021 USD 50
Alta Tension Transe
Argentina Bocon 2 3/15/2014 ARS 32.5
Empresa Distribuidora Y
Comercializadora Norte 9.75 10/25/2022 USD 50
Argentine Republic
Government International Bond 4.33 12/31/2033 JPY 36.5
Argentine Republic
Government International Bond 8.28 12/31/2033 USD 59.9
Cia de Transporte de
Energia Electrica en 9.75 8/15/2021 USD 45.4
Alta Tension Transe
MetroGas SA 8.88 12/31/2018 USD 65.5
Provincia de Buenos
Aires/Argentina 10.9 1/26/2021 USD 70
Empresa Distribuidora Y
Comercializadora Norte 10.5 10/9/2017 USD 51.3
Argentine Republic
Government International Bond 4.33 12/31/2033 JPY 36
Banco Macro SA 9.75 12/18/2036 USD 67.8
City of Buenos
Aires Argentina 3.98 3/15/2018 USD 68.6
Capex SA 10 3/10/2018 USD 67.6
Provincia de Buenos
Aires/Argentina 9.38 9/14/2018 USD 68.8
Provincia de Buenos
Aires/Argentina 9.63 4/18/2028 USD 63
MetroGas SA 8.88 12/31/2018 USD 63.4
Argentine Republic
Government International Bond 0.45 12/31/2038 JPY 8
Banco Macro SA 9.75 12/18/2036 USD 67.8
Provincia de Mendoza Argentina 5.5 9/4/2018 USD 73.5
Provincia del Chaco 4 11/4/2023 USD 53.8
Provincia del Chaco 4 12/4/2026 USD 25.5
Formosa Province of Argentina 5 2/27/2022 USD 61.9
Argentine Republic
Government International Bond 8.28 12/31/2033 USD 61.8
Cia Energetica de Sao Paulo 9.75 1/15/2015 BRL 64.6
Gol Finance 8.75 USD 60
Banco Bonsucesso SA 9.25 11/3/2020 USD 73.5
Sifco SA 11.5 6/6/2016 USD 50.3
Gol Finance 8.75 USD 58.3
Banco Bonsucesso SA 9.25 11/3/2020 USD 72.5
Cia Sud Americana de
Vapores SA 6.4 10/1/2022 CLP 69.8
Almendral
Telecomunicaciones SA 3.5 12/15/2014 CLP 33
Cia Cervecerias Unidas SA 4 12/1/2024 CLP 58.2
Aguas Andinas SA 4.15 12/1/2026 CLP 72.5
Quinenco SA 3.5 7/21/2013 CLP 12.9
Talca Chillan Sociedad
Concesionaria SA 2.75 12/15/2019 CLP 60.8
Empresa de Transporte de
Pasajeros Metro SA 5.5 7/15/2027 CLP 4.58
Hidili Industry International
Development Ltd 8.63 11/4/2015 USD 71.5
Renhe Commercial
Holdings Co Ltd 13 3/10/2016 USD 62.8
Renhe Commercial
Holdings Co Ltd 11.8 5/18/2015 USD 63.1
China Forestry
Holdings Co Ltd 10.3 11/17/2015 USD 37
JinkoSolar Holding Co Ltd 4 5/15/2016 USD 66.3
Renhe Commercial
Holdings Co Ltd 13 3/10/2016 USD 56
Hidili Industry International
Development Ltd 8.63 11/4/2015 USD 71.8
Renhe Commercial
Holdings Co Ltd 11.8 5/18/2015 USD 63.8
China Forestry
Holdings Co Ltd 10.3 11/17/2015 USD 37
BES Finance Ltd 5.58 EUR 65.5
Bank Austria Creditanstalt
Finance Cayman Ltd 1.61 EUR 49.7
ERB Hellas Cayman
Islands Ltd 1.8 6/8/2017 EUR 55.2
Bank Austria Creditanstalt
Finance Cayman Ltd 2 1.84 EUR 49.9
BCP Finance Co Ltd 5.54 EUR 41.7
ESFG International Ltd 5.75 EUR 50.8
BCP Finance Co Ltd 4.24 EUR 42.8
BES Finance Ltd 3.03 EUR 74.3
Banco Finantia
International Ltd 2.46 7/26/2017 EUR 44.1
BES Finance Ltd 4.5 EUR 56.4
Caixa Geral De
Depositos Finance 1.02 EUR 34.7
BCP Finance Bank Ltd 5.31 12/10/2023 EUR 66.3
ERB Hellas Cayman
Islands Ltd 9 3/8/2019 EUR 31.9
Banif Finance Ltd 1.58 EUR 44
BCP Finance Bank Ltd 5.01 3/31/2024 EUR 63.5
Banco BPI SA/Cayman Islands 4.15 11/14/2035 EUR 41.6
Petroleos de Venezuela SA 5.38 4/12/2027 USD 60.2
Venezuela Government
International Bond 7 3/31/2038 USD 67.3
Petroleos de Venezuela SA 5.5 4/12/2037 USD 58.8
Venezuela Government
International Bond 7.65 4/21/2025 USD 74.6
Venezuela Government
International Bond 6 12/9/2020 USD 74.2
Bolivarian Republic of
Venezuela 7 3/31/2038 USD 66.8
* Reinsurers' Underwriting Gains Offset By Unrealised Losses
------------------------------------------------------------
Fitch Ratings says reinsurers' solid underwriting gains in H113
were offset by increased unrealised investment losses, according
to a newly-published report.
The global reinsurers that Fitch rates improved their underwriting
combined ratio to 85.9% in H113, compared with 87.7% in H112, as
catastrophe-related losses were manageable and loss reserve
development remained favourable.
The global reinsurance industry experienced below-average natural
catastrophe losses of USD13bn in H113, below the 10-year average
of USD22bn. The majority of losses were from flooding in Europe,
Canada and Australia, and severe thunderstorms in the US.
Solid underwriting profitability was offset by increased
unrealised investment losses on fixed maturities, resulting in
shareholders' equity growth of only 1.3% for non-life reinsurers
during H113. Underwriting opportunities remained somewhat limited,
resulting in only marginal growth in premiums written.
Several individual reinsurance product lines continued to
experience unfavourable reserve development during H113, primarily
longer-tail casualty and liability lines.
However, earnings continue to be supported by surpluses from
prior-year reserves. Reserve releases were equivalent to 6.4% of
earned premiums in H112, against 6.6% at end-2012.
***********
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 * * *