/raid1/www/Hosts/bankrupt/TCRLA_Public/130927.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, September 27, 2013, Vol. 14, No. 192
Headlines
A N T I G U A & B A R B U D A
LIAT: Accepts Resignation of Chief Executive Officer
A R G E N T I N A
YPF SA: Fitch to Rate Proposed $150-Mil. Debt Issuance at 'B-'
B R A Z I L
BESI BRASIL: S&P Puts 'BB-' Ratings on CreditWatch Negative
ESPIRITO SANTO: S&P Puts 'BB+' Ratings on CreditWatch Negative
OSX BRASIL: Confirms US$12 Million Interest Payment to Bondholders
SCHAHIN OIL: S&P Affirms 'BB+' Corporate Credit Rating
* BRAZIL: Depreciating Real Has Minimal Impact on Non-Fin'l Cos.
C A Y M A N I S L A N D S
ALTPOINT CAPITAL: Creditors' Proofs of Debt Due Oct. 23
ARCO IRIS: Creditors' Proofs of Debt Due Oct. 24
BARNSLEY INVESTMENTS: Creditors' Proofs of Debt Due Oct. 23
CHINA BROAD: Creditors' Proofs of Debt Due Oct. 14
GOLDENTREE SPECIAL: Commences Liquidation Proceedings
HADAR FUND: Creditors and Contributories to Meet on Oct. 8
HYUNDAI CAPITAL: Creditors' Proofs of Debt Due Oct. 23
MARIN INTERNATIONAL: Commences Liquidation Proceedings
SEMPRA CAYMAN: Commences Liquidation Proceedings
SEMPRA CHILEAN: Commences Liquidation Proceedings
SUPERIOR PROVIDERS: Commences Liquidation Proceedings
TRINIDAD INSURANCE: Commences Liquidation Proceedings
C O L O M B I A
BBVA: Will Add 700 to Colombia Staff in Pursuit of Market Share
D O M I N I C A N R E P U B L I C
* DOMINICAN REPUBLIC: Free Zones to Settle US$32MM Gov't Loan Soon
J A M A I C A
DIGICEL GROUP: To Invest JM$4 Billion on Network
SAGICOR LIFE: X Fund Earnings Will be Swayed by Tourism Market
* JAMAICA: Government Scheduled to Repay JM$1.25 Billion to IMF
M E X I C O
CEMEX SAB: Fitch Rates Two Proposed Senior Secured Notes at 'BB-'
X X X X X X X X
* Moody's Comments on Future of Bond Issuers in Post-QE World
* Moody's Outlines Risks in Four RMBS Markets
- - - - -
==================================
A N T I G U A & B A R B U D A
==================================
LIAT: Accepts Resignation of Chief Executive Officer
----------------------------------------------------
Caribbean360.com reports that the regional airline, Leeward
Islands Air Transport, known as LIAT, said it had accepted the
resignation of its chief executive officer, Ian Brunton, more than
a week after it promised a "formal announcement" on the issue.
However, the report relates that the brief statement gave no
reasons for Mr. Brunton's resignation, saying that Julie Reifer-
Jones has been appointed to act in the position.
Trinidadian-born Mr. Brunton had taken up the position on Aug. 1
2012.
The report relates that Mr. Brunton, whose resignation takes
effect from October 1, had been spearheading LIAT's US$100-million
re-fleeting exercise.
The report relays that last month, LIAT signed a US$65 million
loan with the Barbados-based Caribbean Development Bank (CDB) to
finance the purchase of new, French-made ATR aircraft.
As reported in the Troubled Company Reporter-Latin America on
Jan. 3, 2012, Antigua Caribarena related that former Antigua
Aviation Minister Robin Yearwood wants to see a merger between
Leeward Islands Air Transport (LIAT) and the Trinidad and Tobago-
owned Caribbean Airlines Limited, as he believes this is the only
way the Antigua-based regional carrier can survive. Mr.
Yearwood's call came against the background of media reports out
of Port of Spain that suggested CAL's management may be eyeing
expansion into the OECS territories, according to Antigua
Caribarena.
About LIAT
Headquartered in V. C. Bird International Airport in Saint George
Parish, Antigua, Leeward Islands Air Transport, known as LIAT,
operates high-frequency interisland scheduled services serving 22
destinations in the Caribbean. The airline's main base is VC
Bird International Airport, Antigua and Barbuda, with bases at
Grantley Adams International Airport, Barbados and Piarco
International Airport, Trinidad and Tobago.
=================
A R G E N T I N A
=================
YPF SA: Fitch to Rate Proposed $150-Mil. Debt Issuance at 'B-'
--------------------------------------------------------------
Fitch expects to rate YPF S.A.'s (YPF) proposed secured debt
issuance for up to USD150 million 'B-/RR4'. The proceeds will be
used to refinance existing debt and to fund capital investments
for developing natural gas production in the province of Neuquen.
The notes rank pari-passu in security of payment with all other of
YPF's senior unsecured debt and will benefit from a first priority
security interest in a six-month debt service reserve account.
The debt service (collateral) account will be held offshore and
funded with flows from YPF's agro exports in order to help the
company access foreign currency to service its debt.
The collateral account will receive approximately USD400 million
per year of flows from YPF's agro exports to four international
grain-trading companies. These funds will first be used to
service the notes principal and interest payments before
repatriating the balance. It will also maintain 125% of the next
two principal and interest payments. The notes will have a one-
year principal grace period and will then amortize in 17 equal
quarterly payments.
The notes are rated the same as all senior unsecured obligations
of YPF. While positive, the credit enhancement of the
transaction's structure is not sufficient to merit a rating uplift
given the short track record of YPF's agro exports and the short-
term nature of sale contracts with traders.
Key Ratings Drivers
YPF's ratings reflect its strong linkage with the credit quality
of the Republic of Argentina (Fitch local and foreign currency
IDRs of 'B-', Outlook Negative) and the company's low reserve
life. The ratings also factor in YPF's strong business position
in the local market as well as its relatively strong credit
protection measures.
Linkage to Sovereign
YPF's ratings reflect the close linkage with the Republic of
Argentina resulting from the company's ownership structure as well
as recent government interventions. The Republic of Argentina
controls the company through its 51% participation after it
nationalized the company on April 2012 by expropriating the
controlling ownership previously owned by Repsol S.A. Since the
expropriation, the company's strategy and business decisions are
governed by the Republic of Argentina and at times may go against
profit maximization.
Low Hydrocarbon Reserve Life
The ratings consider the company's relatively weak operating
metrics characterized by low reserve life and historically
declining production levels. As of year-end 2012, YPF reported
proven reserves of 979 million barrels of oil equivalent (boe) and
average production of 485,000 boe per day. During the first half
of 2013, the company reported production of 480,000 boe per day.
Production has been stable during the past three quarters. This
translates into a reserve life of approximately 5.5 years, which
is significantly below optimal levels and has the potential to
create significant operational challenges in the medium to long
term. During 2012, the company's reserve replacement ratio was
approximately 85%.
Strong Business Position
YPF benefits from a strong business position supported by its
vertically integrated operations and dominant market presence in
the Argentine hydrocarbons' market. Fitch anticipates that YPF
will continue exercising an active role in domestic fuel and gas
supply.
Adequate Credit Protection Metrics
The ratings reflect YPF's relatively solid credit protection
metrics, characterized by moderate leverage and a manageable debt
amortization schedule. As of the last 12 months (LTM) ended June
30, 2013, total financial leverage, as measured by total debt-to-
EBITDA, reached 1.3x, which is considered low for the assigned
rating. As of year-end 2012, leverage (as measured by total debt-
to-total proven reserves) was average at USD3.5 per boe. Total
debt as of June 30, 2013 amounted to approximately USD4.466
million, of which approximately USD970 million was short-term.
Total cash and equivalents amounted to approximately USD954
million as of June 30, 2013. EBITDA for the LTM ended June 2013
was approximately USD3.364 million. During recent years, the
company's leverage has been increasing, mostly as a result of
increases in debt. The company's stated strategy is to maintain
its net leverage below 1.5x.
The 'RR4' Recovery Rating reflects an average expected recovery
given default and is in line with the RR soft cap established for
Argentina. The structure put in place by the company for the
proposed issuance supports access to foreign currency for debt
service given that the Argentine central bank has allowed the
company to create a collateral account to hold foreign currency
funds abroad. The company will maintain funds equal to 125% of
the next two quarterly amortization payments. YPF will fund the
collateral account using proceeds from grain exports to four
trading companies, which have signed letters of notice and
acknowledgment to deposit their payment in the collateral account.
Rating Sensitivities
YPF's ratings could be negatively affected by a combination of the
following: a downgrade of the Republic of Argentina's ratings; a
significant deterioration of credit metrics; and/or the adoption
of adverse public policies that can affect the company's business
performance in any of its business segments.
A positive rating action in the short-to-medium term is considered
unlikely given the linkage with sovereign credit quality and the
Negative Rating Outlook for all foreign and local currency IDRs.
===========
B R A Z I L
===========
BESI BRASIL: S&P Puts 'BB-' Ratings on CreditWatch Negative
-----------------------------------------------------------
Standard & Poor's Ratings Services placed its 'BB-/B' global scale
and 'brA/brA-2' Brazilian national scale issuer credit ratings on
BES Investimento do Brasil (BESI Brasil) on CreditWatch with
negative implications.
The CreditWatch placement on BESI Brasil followed the same action
on the company's parents, Portugal-based Banco Espirito Santo S.A.
(BES; BB-/Watch Neg/B) and Banco Espirito Santo de Investimento
S.A. (BESI; BB-/Watch Neg/B) on Sept. 20, 2013. This followed
S&P's Sept. 18, 2013, CreditWatch negative placement of the
Republic of Portugal (BB/Watch Neg/B). BESI Brasil's stand-alone
credit profile is 'bb', one notch above the parent's current
rating and the group credit profile (GCP). Therefore, BESI
Brasil's issuer credit ratings reflect no notches of support.
According to S&P's criteria for group ratings, it generally don't
rate a subsidiary higher than the GCP. Consequently, a downgrade
of BESI Brasil's parent would cause an immediate downgrade of the
Brazilian bank.
ESPIRITO SANTO: S&P Puts 'BB+' Ratings on CreditWatch Negative
--------------------------------------------------------------
Standard & Poor's Ratings Services placed the 'BB+' global scale
and 'brAA+' national scale corporate credit ratings on electricity
distribution company, Espirito Santo Centrais Eletricas S.A.
(Escelsa), on CreditWatch negative. S&P also placed placed the
'brAA+' national scale corporate credit rating on Escelsa's sister
company, Bandeirante Energia S.A. (Bandeirante), on CreditWatch
negative.
On Sept. 18, 2013, S&P placed the 'BB' long-term sovereign rating
on the Republic of Portugal on CreditWatch negative.
Consequently, on September 20, S&P placed the 'BB+' long-term
rating on EDP - Energias de Portugal S.A. (EDP) on CreditWatch
negative because it views that utilities are generally constrained
by the rating on the sovereign where they are domiciled.
Exceptions are those, such as EDP, that have extraordinary credit
strength or other characteristics that mitigate domestic risk
factors. S&P believes there is a reasonable likelihood EDP would
be able to withstand Portugal's default. S&P has stress-tested
EDP's business and financial risk profiles in a hypothetical
Portuguese default scenario. S&P believes the utility's ability
to service and repay debt is superior to that of the sovereign.
S&P believes that the credit quality of Bandeirante and Escelsa is
integrally linked with that of its direct parent company, EDP
Energias do Brasil (not rated), which is in turn linked to its
controlling shareholder and ultimate parent, EDP. The linkage
between Escelsa and Bandeirante and EDP is based on S&P's view
that EDP manages its subsidiaries under an integrated financial
strategy and it is actively engaged in managing each of their
operations. S&P believes that deterioration of EDP's credit
quality can pressure those of its Brazilian subsidiaries by taking
a more aggressive financial strategy through increasing leverage
and more aggressive dividend upstream.
The negative CreditWatch placement mirrors that on EDP. A
downgrade of EDP could trigger a downgrade of Escelsa and
Bandeirante. S&P aims to resolve the CreditWatch on Escelsa and
Bandeirante after resolving the CreditWatch on EDP within the next
three months.
As part of the CreditWatch resolution, S&P expects to review
Escelsa's and Bandeirante's strength in light of the potential
deterioration of EDP's creditworthiness, as well as reviewing if
creditors to the Brazilian subsidiaries enjoy certain protections
against potentially significant cash upstream that could allow
them to be rated higher than that of their ultimate parent.
OSX BRASIL: Confirms US$12 Million Interest Payment to Bondholders
------------------------------------------------------------------
Reuters reports that an unnamed spokesman said OSX Brasil SA, the
shipbuilder controlled by Brazilian tycoon Eike Batista, paid on a
Sept. 20 deadline about US$12 million in interest to holders of
the company's bond maturing in 2015. The company faces another
payment on the US$500 million debt this December, according to
Reuters.
Reuters notes that prices on the 9.25 percent bond closed at a
near-record low 76.5 cents on the dollar on Sept. 25, on concern
sister company and oil producer OGX Petroleo e Gas Participacoes
SA will run out of cash within weeks and fail to pay OSX for the
use of a vessel. The vessel guarantees the OSX bond. If OGX
defaults on US$3.6 billion of debt, OSX creditors might be forced
to seize the vessel to recoup their money, Reuters relates.
Reuters discloses that OGX, also controlled by Batista, a former
billionaire whose fortune has almost been wiped out by a crisis of
confidence in his companies, has denied repeatedly that it plans
to restructure its debt.
As reported in the Troubled Company Reporter-Latin America on
June 26, 2013, Reuters said that OSX Brasil denied a report it
failed to make payments on debt held by Spanish infrastructure
group Acciona. The local Folha da S.Paulo newspaper reported that
Batista's OSX Brasil was struggling to avoid bankruptcy after it
defaulted on some BRL500 million ($222 million) in debt held by
Acciona, according to Reuters.
SCHAHIN OIL: S&P Affirms 'BB+' Corporate Credit Rating
------------------------------------------------------
Standard & Poor's Ratings Services affirmed its 'BB+' corporate
credit rating on Schahin Oil & Gas Ltd. (Schahin O&G) and withdrew
its 'BB+' issue-level rating on its proposed bond issue. S&P
withdrew the issue-level rating, which was subject to its review
of the final documentation, following the company's decision to
postpone the proposed issue. The outlook remains stable.
The rating actions follow the postponement of Schahin O&G's
proposed bond issue due to market conditions. Although S&P
understands that the company intends to launch a new corporate
issue in the short to medium term, the exact timing is uncertain
at the moment.
Schahin O&G intended to use the proceeds of the proposed bond to
refinance existing debt at the holding and subsidiaries level, and
to a lesser extent, for other corporate purposes. S&P believes
that Schahin O&G's postponement of the refinancing of its existing
debt will not pressurize its liquidity at least in the near term,
as the company has already repaid its $50 million maturities for
2013 with a new loan that's due 2015. No additional debt will
mature between August 2013 and 2015.
* BRAZIL: Depreciating Real Has Minimal Impact on Non-Fin'l Cos.
----------------------------------------------------------------
The ongoing depreciation of the Brazilian real is having little
impact on the credit quality of most Brazilian non-financial
companies and is likely to be positive for some sectors over the
long term, says Moody's Investors Service in the report "Brazilian
Corporates: Brazilian Currency Depreciation Has Neutral or
Positive Effect on Most Sectors." Exporters such as in the protein
and pulp sectors will gain as their goods become priced more
competitively, while a depreciation will be most challenging to
industries with high levels of foreign debt relative to their
foreign revenues such as the airlines, and the oil and steel
sectors.
Moody's views the depreciation-the Brazilian real has declined
10.8% in value against the US dollar since the start of the year-
as a short-term negative pressure on a weakening Brazilian
economy. The companies rated by Moody's, however, generally have
good liquidity buffers, hedging programs and US dollar-denominated
revenues that help offset the direct effects of the weaker
domestic currency.
"Companies are facing higher funding costs owing to higher
interest rates and servicing costs for US dollar-denominated
debt," says Barbara Mattos, a Moody's Vice President and Senior
Analyst. "Over time, however, a weaker real should lead to higher
export volumes and stronger GDP growth, leading to a positive
effect on the Brazilian economy."
The currency depreciation is an immediate credit negative in that
52% of total debt outstanding for Moody's-rated non-financial
companies in Brazil is denominated in US dollars, and a weaker
local currency immediately increases the cost of debt service as
well as leverage. But about 42% of their total revenue is
denominated in dollars, mitigating the risk, which companies also
offset through hedging strategies.
Further, over the past few years Brazilian companies have tapped
accommodating capital markets at low rates to strengthen their
liquidity, leaving little immediate refinancing risk, says
Moody's.
In the report Moody's identifies the protein, pulp & paper, metals
& mining sectors and petrochemicals as least exposed to foreign
currency risk, and possible beneficiaries as their goods become
more competitive.
Sectors that are at neutral risk include building materials, heavy
construction, sugar & ethanol and media & telecom.
In turn, the sectors most exposed to a prolonged currency
depreciation are the airlines, the oil & gas industry, and the
steel industry, as they are relatively exposed to US dollar-
denominated debt relative to their dollar-denominated revenues and
earnings.
==========================
C A Y M A N I S L A N D S
==========================
ALTPOINT CAPITAL: Creditors' Proofs of Debt Due Oct. 23
-------------------------------------------------------
The creditors of Altpoint Capital Offshore Holdings Ltd are
required to file their proofs of debt by Oct. 23, 2013, to be
included in the company's dividend distribution.
The company commenced liquidation proceedings on Sept. 9, 2013.
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
ARCO IRIS: Creditors' Proofs of Debt Due Oct. 24
------------------------------------------------
The creditors of Arco Iris Fund (SPC) Ltd are required to file
their proofs of debt by Oct. 24, 2013, to be included in the
company's dividend distribution.
The company commenced liquidation proceedings on Sept. 10, 2013.
The company's liquidator is:
Michael Penner
Yvonne Lorimer, Deloitte & Touche
Citrus Grove Building, 4th Floor
Goring Avenue, George Town KY1-1109
Cayman Islands
Telephone: +1 (345) 814 2214
Facsimile: +1 (345) 949 8258
BARNSLEY INVESTMENTS: Creditors' Proofs of Debt Due Oct. 23
-----------------------------------------------------------
The creditors of Barnsley Investments Limited are required to file
their proofs of debt by Oct. 23, 2013, to be included in the
company's dividend distribution.
The company commenced liquidation proceedings on Sept. 10, 2013.
The company's liquidator is:
Matthew Wright
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
CHINA BROAD: Creditors' Proofs of Debt Due Oct. 14
--------------------------------------------------
The creditors of China Broad Media Corporation are required to
file their proofs of debt by Oct. 14, 2013, to be included in the
company's dividend distribution.
The company commenced liquidation proceedings on Sept. 3, 2013.
The company's liquidator is:
Lau Chung Ki Lynda
Two Pacific Place, Suites 2516-20
88 Queensway
Hong Kong
Telephone: (852) 2918 2200
Facsimile: (852) 2234 9116
GOLDENTREE SPECIAL: Commences Liquidation Proceedings
-----------------------------------------------------
On Sept. 11, 2013, the sole shareholder of Goldentree Special
Holdings IV Ltd resolved to voluntarily liquidate the company's
business.
Creditors are required to file their proofs of debt to be included
in the company's dividend distribution.
The company's liquidator is:
GTAM TS Investment LLC
John O'Driscoll
Walkers
190 Elgin Avenue, George Town
Grand Cayman KY1-9001
Cayman Islands
Telephone: +1 (345) 914 4229
HADAR FUND: Creditors and Contributories to Meet on Oct. 8
----------------------------------------------------------
The creditors and contributories of Hadar Fund Limited will hold
their meeting on Oct. 8, 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:
Tammy Fu
c/o Joel Edwards
Zolfo Cooper
P.O. Box 776 10 Market Street
Camana Bay
Grand Cayman KY1 9006
Cayman Islands
Telephone: +1 (345) 814 4017
HYUNDAI CAPITAL: Creditors' Proofs of Debt Due Oct. 23
-----------------------------------------------------
The creditors of Hyundai Capital Auto Funding VII Limited are
required to file their proofs of debt by Oct. 23, 2013, to be
included in the company's dividend distribution.
The company commenced liquidation proceedings on Aug. 28, 2013.
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
MARIN INTERNATIONAL: Commences Liquidation Proceedings
------------------------------------------------------
On Sept. 4, 2013, the sole shareholder of Marin International Ltd.
resolved to voluntarily liquidate the company's business.
Creditors are required to file their proofs of debt to be included
in the company's dividend distribution.
The company's liquidator is:
UBS Nominees Ltd
Stephen R. Nelson
Telephone: 949-4544
Facsimile: 949-7073
Charles Adams Ritchie & Duckworth
Zephyr House, 122 Mary Street
P.O. Box 709 Grand Cayman KY1-1107
Cayman Islands
SEMPRA CAYMAN: Commences Liquidation Proceedings
------------------------------------------------
On Sept. 9, 2013, the sole shareholder of Sempra Cayman Americas
Ltd. resolved to voluntarily liquidate the company's business.
Creditors are required to file their proofs of debt to be included
in the company's dividend distribution.
The company's liquidator is:
Randall L. Clark
c/o Campbells Corporate Services Limited
Cricket Square, Willow House
Grand Cayman KY1-1104
P.O. Box 268, Cayman Islands
Telephone: +1 (345) 949 2648
Facsimile: +1 (345) 949 8613
SEMPRA CHILEAN: Commences Liquidation Proceedings
-------------------------------------------------
On Sept. 9, 2013, the sole shareholder of Sempra Chilean Equity
III Ltd. resolved to voluntarily liquidate the company's business.
Creditors are required to file their proofs of debt to be included
in the company's dividend distribution.
The company's liquidator is:
Randall L. Clark
c/o Campbells Corporate Services Limited
Cricket Square, Willow House
Grand Cayman KY1-1104
P.O. Box 268, Cayman Islands
Telephone: +1 (345) 949 2648
Facsimile: +1 (345) 949 8613
SUPERIOR PROVIDERS: Commences Liquidation Proceedings
-----------------------------------------------------
At an extraordinary meeting held on Sept. 6, 2013, the members of
Superior Providers Insurance Company SPC, Ltd. resolved to
voluntarily liquidate the company's business.
The company's liquidator is:
Kieran Mehigan
Marsh Management Services Cayman Ltd.
Governors Square
Building 4, 2nd Floor
23 Lime Tree Bay Avenue
P.O. Box 1051, Grand Cayman KY1-1102
Cayman Islands
TRINIDAD INSURANCE: Commences Liquidation Proceedings
-----------------------------------------------------
On Aug. 5, 2013, the shareholders of Trinidad Insurance Group Ltd
resolved to voluntarily liquidate the company's business.
The company's liquidators are:
Fernando Beckles
Ian Pascall
Marsh Management Services Cayman Ltd
Telephone: (345) 914 5746
Facsimile: (345) 949 7849
===============
C O L O M B I A
===============
BBVA: Will Add 700 to Colombia Staff in Pursuit of Market Share
---------------------------------------------------------------
Christine Jenkins at Bloomberg News reports that Oscar Cabrera,
Colombia bank unit president, said that Banco Bilbao Vizcaya
Argentaria SA (BBVA) will add 700 employees this year in Colombia
as it opens 47 new offices.
Mr. Cabrera said the hires will increase staff at BBVA Colombia to
5,500 by the end of the year, according to Bloomberg News.
Bloomberg News relates that bank plans to spend US$445 million to
expand in Colombia and add 2,000 workers through 2016.
"It has the objective of significantly improving our market share
and presence in Colombia. . . . Our operations here have powerful
profit generation and capital generation, and we're going to be
able to eat our cake without having to ask for additional capital
from our parent," Bloomberg News quoted Mr. Cabrera as saying.
Bloomberg News discloses that Mr. Cabrera said BBVA Colombia is
looking to add 3 percentage points to its market share.
* * *
As reported in the Troubled Company Reporter-Europe on May 13,
2013, Fitch Ratings has assigned Banco Bilbao Vizcaya Argentaria's
(BBVA) USD1.5bn non-step-up non-cumulative perpetual tier 1
capital securities (preferred securities) with fully discretionary
coupons and pre-set triggers for contingent conversion a final
rating of 'BB-'.
===================================
D O M I N I C A N R E P U B L I C
===================================
* DOMINICAN REPUBLIC: Free Zones to Settle US$32MM Gov't Loan Soon
------------------------------------------------------------------
Dominican Today reports that Fernando Capellan, the president of
the Grupo M manufacturing group, revealed that free zone companies
met with Dominican Republic Finance Minister Simon Lizardo to pay
the money they owe the government and affirmed that the others are
open to payment agreement.
Mr. Capellan said export free zones executives met with the
official to discuss the Government's loan in 2007, to review the
status of each company and make sure those funds are repaid,
according to Dominican Today. The report notes that Mr. Capellan
said representatives of companies which took at least RD$25
million of the US$32 million bailout attended the meeting.
Interviewed on Tele-Antillas TV, Mr. Capellan said three groups of
companies took loan, "nine that are up to date on payments,
another which are open to a pay arrangement and a third which went
broke," the report relates.
The report says Mr. Capellan noted that some free zone companies
are going through a difficult economic situation while others are
willing to enter a repayment agreement.
Recovery and Strengthening
Mr. Capellan added that recent reports show the export free zones
sector in frank recovery and strengthening, by reaching out to
markets abroad, boosting their position to generate even more
earnings in the coming years, based on its ongoing diversification
process, Dominican Today relays.
=============
J A M A I C A
=============
DIGICEL GROUP: To Invest JM$4 Billion on Network
------------------------------------------------
Jamaica Observer reports that Digicel Group Limited is undertaking
a JM$4-billion network upgrade.
Barry O'Brien, chief executive officer of Jamaica operations, said
that the investment this year follows JM$7 billion spending on
capital projects over the last two years, according to Jamaica
Observer. "This level of investment is what continues to drive the
quality of service we offer," the report quoted Mr. O'Brien as
saying.
The report notes that the firm is also expanding its customer
service operations with the recruitment of an additional 200
agents to the Jamaica business, while it says it is now
aggressively pursuing the fixed line market.
The report recalls that back in 2001, when Digicel first launched
its services, it took just a year for it to become the largest
mobile operator.
The report relays that Mr. O'Brien is also optimistic about the
prospects for data services.
The report notes that Digicel claims that it has seen strong
customer growth across all key business segments, following the
introduction of a series of new plans in the market.
Headquartered in Jamaica, Digicel Group Limited is a
telecommunications provider with over 13 million customers across
its 31 markets in the Caribbean, Central America and Asia Pacific.
* * *
As of Sept. 15, 2013, the company continues to carry Moody's
"Caa1" Senior Unsecured Debt rating and "B2" long-term ratings,
long-term corporate family rating, and probability of default
rating.
SAGICOR LIFE: X Fund Earnings Will be Swayed by Tourism Market
--------------------------------------------------------------
Marcella Scarlett at Jamaica Gleaner reports that with more than
half of the Sagicor Sigma Real Estate Portfolio being hotel
properties, income to the X Fund will be heavily influenced by the
performance of the seasonal tourism sector.
Sagicor Life Jamaica has made an offer of shares in the Sagicor
Real Estate X Fund at JM$5 per share, according to Jamaica
Gleaner. The offer closes October 18.
The report notes that for 2013, Sagicor is projecting that 79 per
cent of real estate revenue will come from the hotel properties.
By 2017, the report says, the company expects that the hotels will
earn 84 per cent of revenue for the portfolio.
The report relays that Sagicor also projects that net profit will
more than triple from JM$591 million to JM$1.86 billion in the
same period.
"We have made our projections on conservative room rates. These
rates are below US$300 and from what we are seeing these targets
are attainable. . . . We have made our projections based on
occupancy of under 80 per cent for all properties and we are
operating at more than that right now," the report quoted Rohan
Miller, executive vice-president of Sagicor Life, as saying.
The report notes that the offer document for the Sagicor Real
Estate X Fund shows projections of occupancy levels rising from 62
per cent in 2012 to 76 per cent in 2017 and average daily room
rates increasing from US$196 per night to US$259 per night.
The report further discloses that the Sigma Real Estate Portfolio
currently owns three hotel properties, each operated under the
Jewel brand.
"The earnings from the tourism component are generated in US
dollars and provide a hedge against devaluation in the local
currency," the report quoted Ms. Brenda-Lee Martin, assistant
vice-president at Sagicor Jamaica, as saying.
The report says for 2013, Sagicor is projecting total revenue from
the hotel properties to be US$37.12 million and expenses of
US$31.96 million. The company expects net profit of US$5.14
million.
The report notes that most of the profits for this year will come
from Jewel's Dunn's River (US$3.6m), with Jewel Paradise Cove
projected to make a loss of US$25,000, but turn a profit in 2014.
The latter property is expected to open for business next month,
the report says.
About Sagicor Life Jamaica
Sagicor Life Jamaica is a life insurance group. 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). Sagicor
Life offers life and health insurance, fund management and
investments services in the Caribbean.
* * *
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: Government Scheduled to Repay JM$1.25 Billion to IMF
---------------------------------------------------------------
Jamaica Gleaner reports that Jamaica is scheduled to make a
payment of US$12.19 million, about JM$1.25 billion, to the
International Monetary Fund (IMF), as it continues to pay down the
debt under the February 2010 Stand-by Agreement (SBA).
The date, indicated in the IMF's projected payments schedule as at
August 31, comes ahead of the executive board's discussions on the
first quarterly review for Jamaica under the current four-year
extended fund facility, according to Jamaica Gleaner. The meeting
is tentatively set for Monday, September 30.
The report notes that the repayments are denominated in Special
Drawing Rights (SDRs), and according to the IMF's schedule,
Jamaica is projected to repay SDR7, 962,500 this month.
The report discloses that the 2010 SBA agreement saw Jamaica
drawing down SDR541.8 million, according to IMF data on Jamaica's
financial position in the Fund, but that is now worth about
US$830.11 million or about JM$84.8 billion.
===========
M E X I C O
===========
CEMEX SAB: Fitch Rates Two Proposed Senior Secured Notes at 'BB-'
-----------------------------------------------------------------
Fitch Ratings has assigned 'BB-/RR3' ratings to CEMEX S.A.B. de
C.V.'s (CEMEX) proposed floating rate senior secured notes due in
2018 and senior secured notes due in 2021.
The 2018 and 2021 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 Egyptian Investments II 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 for
general corporate purposes and to repay debt.
The Rating Outlook for CEMEX is Stable.
KEY RATING DRIVERS
Strong Business Positions
The ratings of CEMEX and its subsidiaries reflect the company's
strong and diversified business position. The company is one of
the largest producers of cement, ready mix, and aggregates in the
world. Key markets include the U.S., Mexico, Colombia, Panama,
Spain, Egypt, Germany, France, and the U.K. The company's product
and geographic diversification offset some of the volatility
associated with the building product industry. CEMEX's main
markets during 2012 in terms of EBITDA were Mexico (43%), Central
and South America (25%), the Mediterranean (13%), and Northern
Europe (14%).
High Leverage
CEMEX's Issuer Default Ratings (IDRs) are constrained at 'B+' due
to the company's high leverage. CEMEX had USD16.947 billion of
total debt and USD746 million of cash and marketable securities as
of June 30, 2013. During the latest 12 months (LTM) ended June
30, 2013, the company generated USD2.6 billion of EBITDA, which is
an improvement from USD2.4 billion for the LTM ended June 30,
2012. The increase in CEMEX's EBITDA during the past 12 months,
along with a USD817 million reduction in net debt, resulted in an
improvement in the company's net leverage ratio to 6.3x from 7.0x.
Leverage to Remain High through Year-End 2014
Fitch expects CEMEX's leverage to remain high through the end of
2014. Fitch projects that CEMEX will generate about USD2.8
billion of EBITDA in 2013, USD3.1 billion in 2014, and USD3.3
billion in 2015. CEMEX's net debt is not projected to change
materially in the next two years despite the projected upturn in
EBITDA due to rising working capital needs associated with growth,
increasing capex, and higher taxes. Absent asset sales in excess
of USD100 million per year, Fitch projects CEMEX's net leverage
ratio will be 6.0x in 2013 and 5.1x in 2014. The projected
conversion of CEMEX's USD715 million subordinated convertible
notes due in 2015 will be a key factor in net leverage reaching
4.4x in 2015.
U.S. Market Remains Key to Recovery
The U.S. market has historically been the company's strongest
market. On a pro forma basis, as if Rinker were consolidated for
all of 2007, this market used to generate USD2.3 billion of EBITDA
for CEMEX. CEMEX's U.S. operations were very weak in 2012,
generating only USD25 million of EBITDA. Fitch is forecasting an
improvement in the EBITDA CEMEX generates in the U.S. to USD300
million in 2013, USD500 million in 2014, and USD600 million in
2015. A key contributor to the projected growth in EBITDA is the
gradual rebound in the U.S. housing sector. For 2013, Fitch is
projecting a 20% increase in housing starts to 940,000 units and
in 2015 is forecasting an additional 8% increase in housing starts
to 1.1 million units. CEMEX's high operating leverage should
drive EBITDA growth in excess of sales volumes growth. During the
first half of 2013, CEMEX's sales volumes increased by 3%
(cement), 11% (ready mix) and 12% (aggregates), while prices for
these products were up by 4%, 6% and 1%, respectively. These
factors resulted in a USD124 million increase in sales to USD1.604
billion from USD1.480 billion in the prior year and a USD96
million increase in EBITDA to USD99 million from USD3 million.
Manageable Debt Amortization Schedule
As of June 30, 2013, CEMEX had USD746 million of cash and
marketable securities. The company's debt repayment schedule is
manageable with only USD382 million of debt amortization through
the end of 2014 and USD1.5 billion falling due in 2015, of which
USD714 million is related to convertible subordinated debentures.
During the second half of 2012, CEMEX refinanced USD6.7 billion of
the USD7.2 billion of debt related to the 2009 Financing
Agreement. CEMEX followed this transaction with the IPO of CEMEX
Latam Holdings and USD2.1 billion of debt capital markets
transactions. Proceeds from these transactions were used to
prepay the creditors of the 2009 Financing Agreement that did not
participate in the exchange offer and to reduce the new credit
facility to USD4.1 billion from USD6.1 billion, as well as the
cost of this facility to Libor plus 4.5% from Libor plus 5.25%.
Above Average Recovery Prospects
CEMEX and its subsidiaries have issued debt instruments from
Mexico, the U.S., the British Virgin Islands, 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 scenario in which CEMEX's creditors would want it
to enter a bankruptcy (quiebra) or insolvency (concurso mercantil)
process in Mexico in the event of additional financial distress,
as there would be a high degree of uncertainty regarding the
outcome. In Fitch's opinion, the most likely scenario under
additional stress would be an out of court negotiated debt
restructuring. In deriving a distressed enterprise valuation to
determine the recovery under this scenario, Fitch discounted the
company's EBITDA to USD2.2 billion, which is a level that would
just cover operating leases, interest expenses, and maintenance
capital expenditures, and applied a conservative EBITDA multiple
of 6x. This calculation resulted in an anticipated recovery level
of 81% for the company's senior secured debt, which would be
consistent with an 'RR2'.
The recovery prospects are bolstered by CEMEX's issuance of USD2.4
billion of convertible subordinated notes, which can only be
replaced by equity or similar quasi equity instruments according
to the Facilities Agreement. Fitch typically caps recovery
ratings of Mexican corporates at the level of 'RR3' to account for
concerns about various aspects of the bankruptcy framework from a
creditor's perspective even when its bespoke analysis indicates it
could be higher. CEMEX's rating has also been capped at the level
of 'RR3', which is consistent with recovery prospects anticipated
to be in the range of 50% to 70% in the event of default.
RATING SENSITIVITIES
A number of factors could individually or collectively 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 to offset weakening of the company's Northern European
division and Mediterranean division; a loss of the positive moment
in the U.S. market would have a material impact upon the company's
ability to generate free cash flow (FCF) in 2014 and 2015; a lack
of capital market access during 2013 and 2014.
Factors that could contribute to Positive Rating Watches
individually, or collectively, include: an acceleration of the
U.S. economy that would result in CEMEX's FCF exceeding USD500
million before 2015; an equity issuance; or the conversion of the
company's subordinated debt to equity.
Fitch currently rates CEMEX as follows:
CEMEX
-- Foreign and local currency IDR 'B+';
-- Senior secured notes 'BB-/RR3';
-- National scale long-term rating 'BBB-(mex)';
-- National senior unsecured notes 'BBB-(mex);
-- National scale short-term rating 'F3(mex)'.
In addition to the aforementioned ratings of CEMEX, Fitch also
maintains 'B+' foreign currency IDRs of the following entities
that CEMEX has used to issue debt, as well as 'BB-/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 EUR Capital (SPV) Limited, a British Virgin Island
restricted-purpose company
===============
X X X X X X X X
===============
* Moody's Comments on Future of Bond Issuers in Post-QE World
-------------------------------------------------------------
While Latin American debt issuers will face higher funding costs
and reduced availability of credit as the US Federal Reserve
eventually tapers quantitative easing, bond issuers in the region
have become better prepared to face these challenges. Brazil,
Chile, Colombia, Mexico and Peru and their banking systems have
become more creditworthy, which also supports the credit quality
of corporates and other bond issuers in these market , says
Moody's Investors Service in a new report titled "Latin America:
Strengthened Sovereigns, Banking Systems Will Help Region Navigate
a Post-QE World"
"The region is more resilient to rising interest rates and
investment outflows than it was during the financial crises of the
1990s and early 2000s," says Mauro Leos, a Moody's Vice President
-- Senior Credit Officer and an author of the report. "Although
the changing environment will not affect all borrowers in Latin
America uniformly, the credit quality of the strongest Latin
American sovereigns, sub-sovereigns, banks, corporates and
infrastructure issuers should prove durable."
Among the LATAM 5 sovereigns -- Brazil, Chile, Colombia, Mexico
and Peru-- strong balance-of-payments buffers and reduced reliance
on cross-border funding will limit the impact of higher interest
rates. Moody's expects post-QE funding costs for the LATAM 5 to
rise 100-150 basis points over the next 12-18 months.
Moody's views Mexico as the most exposed to the reduced capital
flows likely in the post QE-era, owing to the large inflows of
capital into Mexico during the QE era. Like the rest of LATAM 5,
however, Mexico's vulnerability to tighter funding is in fact low
because there is room for policy-makers in the government and
central banks to make adjustments and intervene.
Although banks in the LATAM 5 have increased their exposure to
capital markets through using market funds to support loan growth,
Moody's views their credit risk as contained . The banks do not
rely on external markets for funding, which instead is largely
based on domestic deposits and ample access to local liquidity.
The credit strength of the LATAM 5 sovereigns as well as banks in
turn will support corporate credit quality, says Moody's, where
rated companies are adequately positioned to manage in the post-QE
era. One reason is that the vast majority took advantage of
accommodating capital markets and low interest rates to refinance
debt, reducing the risk that refinancing usually poses.
Most of the risk foreign-currency debt creates in turn has been
offset at least partially through hedges such as foreign currency
revenues. Moody's identifies airlines, steel and telecoms as the
sectors most vulnerable to declines in the value of local
currencies.
Latin American issuance of structured finance transactions in turn
may increase as banks and corporates look for alternative sources
of funding.
* Moody's Outlines Risks in Four RMBS Markets
---------------------------------------------
Moody's Investors Service says that the residential mortgage-
backed securities markets for Australia, Japan, the Netherlands
and the UK show clear diversity in their levels of credit and
operational risk.
For example, while Japanese and Dutch collateral profile risk is
lower than for Australian and UK deals, operational risks are
lower in the Japanese and Australian markets compared with the UK
and the Netherlands.
Moody's made its conclusions in its report comparing the four
jurisdictions, which are some of the largest RMBS markets outside
the US. The report is titled "A Comparison of Japanese,
Australian, Dutch and UK RMBS and Mortgage Markets."
"In terms of operational risks, Australian and Japanese RMBS deals
have more certainty in terms of back-up servicer arrangements
because they identify from closing which entity is legally liable
to perform the role of back-up servicer," says Karabatsos on
behalf of the team.
"Conversely, UK and Dutch transactions usually rely on the credit
strength of the servicer to avoid the need for a back-up
servicer," adds Karabatsos.
In addition, Japanese and Australian interest-only loans do not
expose borrowers to bullet repayment risk because they are
typically interest only for less than five years in Australia and
less than one year in Japan, before fully amortizing.
In contrast, UK and Dutch interest-only loans expose investors to
bullet repayment risks because borrowers pay only the interest
portion for the entire life of the loan.
Moody's report says set-off risk is most significant in Dutch RMBS
transactions -- than in the other three markets -- because Dutch
tax law encouraged the use of interest-only mortgages in
combination with repayment vehicles, which are usually savings or
insurance policies provided by an insurance company.
In such cases, if the insurer becomes bankrupt, the borrower can
set off the value of the policy against the outstanding amount of
the mortgage loan (the insurance set-off risk). Over time, this
risk increases because the value of the policy increases.
Moody's report also points out that credit risks are mitigated in
Australian and Dutch RMBS deals because of lender's mortgage
insurance (LMI).
Most Australian RMBS loans have LMI, and the two largest LMI
providers are private companies rated Aa3 and A1. In the
Netherlands, NHG Guarantee, backed by a Aaa-rated government-
sponsored entity, provides LMI to loans meeting certain criteria.
"However, the NHG guarantee amortizes on a 30-year repayment basis
and does not match the actual amortization profile of interest-
only loans, creating a coverage gap for such loans that increases
over time," says Karabatsos.
"In contrast, UK lenders do not use LMI, and lenders in Japan
typically obtain a guarantee, generally from a subsidiary. While
we generally do not rate such subsidiaries, in many instances, we
rate their parent banks," adds Karabatsos.
***********
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 * * *