TCRLA_Public/140205.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

           Wednesday, February 5, 2014, Vol. 15, No. 25


                            Headlines



B R A Z I L

BTG PACTUAL RESSEGURADORA: Fitch Affirms 'BB+' Int'l IFS Rating
OGX PETROLEO: Batista Slashes Price on Colombian Mining Projects


C A Y M A N  I S L A N D S

AMERASIAN CAPITAL: Placed Under Voluntary Wind-Up
BRONTOLINI CORPORATION: Placed Under Voluntary Wind-Up
BSI SERVICES: Placed Under Voluntary Wind-Up
BUCKINGHAM BLUE: Placed Under Voluntary Wind-Up
CT DIRECTOR: Placed Under Voluntary Wind-Up

DEEPSIX LTD: Placed Under Voluntary Wind-Up
DELVEST INC: Placed Under Voluntary Wind-Up
EVERETT LLC: Placed Under Voluntary Wind-Up
EXECUTIVE INVESTMENTS: Placed Under Voluntary Wind-Up
HESPERUS HOLDINGS: Placed Under Voluntary Wind-Up

ISIDRO INTERNATIONAL: Placed Under Voluntary Wind-Up
JADE OPPORTUNITIES: Placed Under Voluntary Wind-Up
LIMESTONE FUND: Placed Under Voluntary Wind-Up
PINEBRIDGE CAPITAL: Commences Liquidation Proceedings
PRUDENCE TRADING: Placed Under Voluntary Wind-Up

REGENT INVESTMENTS: Placed Under Voluntary Wind-Up
RIDLEY INTERNATIONAL: Commences Liquidation Proceedings
ROLLING HILLS: Placed Under Voluntary Wind-Up
SUCGP (F) LTD: Placed Under Voluntary Wind-Up
SUNTECH POWER: Names Deyong He as Acting Chief Financial Officer

WISDOM INVESTMENT: Placed Under Voluntary Wind-Up


J A M A I C A

* JAMAICA: Borrowing Less Than Planned


P U E R T O   R I C O

PUERTO RICO: S&P Cuts GO Debt Rating to 'BB+'; Still on Watch Neg


                            - - - - -


===========
B R A Z I L
===========


BTG PACTUAL RESSEGURADORA: Fitch Affirms 'BB+' Int'l IFS Rating
---------------------------------------------------------------
Fitch Ratings has affirmed the Insurer Financial Strength (IFS)
ratings of BTG Pactual Seguradora S.A. (BTG Seguradora) and BTG
Pactual Resseguradora S.A. (BTG Resseguradora), and revised the
Outlooks on the ratings to Positive from Stable. The rating action
follows the recent revision of the outlook on the ratings of their
parent Banco BTG Pactual S.A. (BTG Pactual; local currency long-
term IDR 'BBB-'/Outlook Positive).

KEY RATING DRIVERS

The IFS ratings of BTG Seguradora and BTG Resseguradora are based
on support from their ultimate parent, BTG Pactual. Both companies
are wholly owned subsidiaries of BTG Pactual Holding de Seguros
S.A., which is fully owned by BTG Pactual.

As per its rating criteria 'Rating FI Subsidiaries and Holding
Companies', Fitch considers both BTG Seguradora and BTG
Resseguradora as strategically important subsidiaries of BTG
Pactual, due to the strong synergies and high level of management
and operational integration, largely fungible capital, full
ownership, and common branding. In assessing support, Fitch views
positively the close alignment of the current and target client
base of the new insurance operations to that of BTG Pactual, and
the fact that they are part of its strategy to provide full range
of services to its customer base.

BTG Seguradora and BTG Resseguradora operate from BTG's main
offices and are considered a division of the bank. Therefore, they
benefit from expense synergies, the bank's information technology
platform, internal controls and corporate governance structure, as
well as its solid local and international reputation. The
ownership structure also provides potential access to the parent's
wide range of clients and cross selling opportunities for the
group.

BTG Seguradora

BTG Seguradora started underwriting in February 2013. Its main
focus is on surety (60% of premiums in November 2013), which is
complemented by engineering risks (10%). It also participates in
the DPVAT (mandatory third-party liability for road accidents)
consortium (30%). In November 2013, with BRL58 million surety
premiums underwritten, its market share in the segment was 6%
(ranking 6th).

The insurer plans to start underwriting in other segments related
to infrastructure (such as hull and petroleum) over the short to
medium term, but the core focus will remain surety.

According to preliminary figures, BTG Seguradora accumulated a
loss of BRL3 million through November 2013. The negative result
was due to both technical and financial income losses. The former
is normal at the early stage of operations due to heavy technical
reserve accumulation, while the latter is explained by the
unrealized mark-to-market losses on the long term securities in
the investment portfolio. Claims in the surety and engineering
segment were well below the market averages.

Fitch expects technical results to gradually improve in 2014 with
the stabilization of technical reserve development, however, given
the expectations for further interest rate increases, there could
be more losses in the investment portfolio.

BTG Resseguradora

BTG Resseguradora is BTG Seguradora's captive reinsurer. It
started operations in May 2013, with BRL100 million capital. It
has one statutory employee and only reinsures premiums ceded by
BTG Seguradora. As a reinsurer, BTG Resseguradora is not subject
to regulatory maximum retention limits per risk, and therefore
offers a significant growth potential for the group.

BTG Resseguradora's growth will be directly linked to BTG
Seguradora in the short term. Thereafter, within the next one to
two years, the reinsurer plans to obtain licenses from the
authorities in Colombia, Peru, Chile and Argentina, offering
reinsurance services for Brazilian companies operating in these
countries. In the next stage of its business plan, in three to
four years, it aims to become a full reinsurance company
reinsuring premiums from all segments in Brazil. BTG Pactual's
BRL250 million capital injection in August 2013 demonstrates its
commitment to the future development of the reinsurance company.

According to preliminary figures, in November 2013, BTG
Resseguradora's reinsurance premiums (net of commissions) reached
BRL36 million (about 1% of local reinsurance market premiums) and
leverage remains very low (net liabilities/equity was about 10%).
The reinsurer accumulated profits of BRL8.1 million through
November 2013, mainly stemming from the financial income in the
investment portfolio.

RATING SENSITIVITIES

Changes in parent's ratings: Changes in BTG Pactual's ratings or
propensity to support its subsidiaries would affect the ratings of
BTG Seguradora and BTG Resseguradora.

Changes in strategic importance: Changes in Fitch's evaluation of
the strategic importance of BTG Seguradora and BTG Resseguradora
could lead to changes in their ratings.

Fitch has taken the following rating actions:

BTG Seguradora:

-- National IFS affirmed at 'AA-(bra)'; Outlook revised to
   Positive from Stable.

BTG Resseguradora:

-- International IFS affirmed at 'BB+'; Outlook revised to
   Positive from Stable;

-- National IFS affirmed at 'AA-(bra)'; Outlook revised to
   Positive from Stable.


OGX PETROLEO: Batista Slashes Price on Colombian Mining Projects
----------------------------------------------------------------
Matthew Cowley at Daily Bankruptcy Review reports that Brazilian
entrepreneur Eike Batista slashed the price of his Colombian coal-
mining assets by more than two-thirds under a new deal signed with
Turkey's Yildirim Holding A.S., as his company failed to meet some
of its objectives since a preliminary agreement was signed last
year.

Eike Batista is the owner of Oleo e Gas Participacoes SA formerly
known as OGX Petroleo e Gas Participacoes SA.

As reported in the Troubled Company Reporter-Latin America Oct.
31, 2013, Peter Millard and Juan Pablo Spinetto at Bloomberg News
said that Eike Batista, facing bankruptcy protection proceedings
at an oil venture, agreed to sell his coal projects in Colombia to
Turkey's Yildirim Holding AS for about US$450 million.  Under a
preliminary agreement, CCX Carvao da Colombia SA, Batista's coal
unit, will sell its Canaverales and Papayal open pit mines to
Yildirim for about US$50 million, the company said in a regulatory
filing obtained by Bloomberg News.  It also agreed to negotiate
the sale of its San Juan undeground mine and logistics project for
about US$400 million, CCX said, according to Bloomberg News.

Bloomberg News noted that the deal is worth more than four times
CCX's market value, which stood at BRL233.1 million (US$106.7
million) as of Oct. 29's close.

                          About OGX Petroleo

Based in Rio de Janeiro, Brazil, OGX Petroleo e Gas Participaaoes
S.A. is an independent exploration and production company with
operations in Latin America.

OGX filed for bankruptcy in a business tribunal in Rio de Janeiro
on Oct. 30, 2013, case number 0377620-56.2013.8.19.0001.  The
bankruptcy filing puts $3.6 billion of dollar bonds into default
in the largest corporate debt debacle on record in Latin America.
The filing by the oil company that transformed Eike Batista into
Brazil's richest man followed a 16-month decline that wiped out
more than $30 billion of his personal fortune.

The filing, which in Brazil is called a judicial recovery, follows
months of negotiations to restructure the dollar bonds, in which
OGX sought to convert debt to equity and secure as much as $500
million in new funds. OGX said Oct. 29 that the talks concluded
without an agreement. The company's cash fell to about $82 million
at the end of September, not enough to sustain operations further
than December.


==========================
C A Y M A N  I S L A N D S
==========================


AMERASIAN CAPITAL: Placed Under Voluntary Wind-Up
-------------------------------------------------
On Dec. 6, 2013, the shareholders of Amerasian Capital Corp.
resolved to voluntarily wind up the company's operations.

Creditors are required to file their proofs of debt to be included
in the company's dividend distribution.

The company's liquidator is:

          Trident Liquidators (Cayman) Ltd
          c/o Eva Moore
          Telephone: (345) 949 0880
          Facsimile: (345) 949 0881
          One Capital Place, 4th Floor
          P.O. Box 847, George Town
          Grand Cayman KY1-1103
          Cayman Islands


BRONTOLINI CORPORATION: Placed Under Voluntary Wind-Up
------------------------------------------------------
On Dec. 4, 2013, the sole shareholder of Brontolini Corporation
Ltd. resolved to voluntarily wind up the company's operations.

Only creditors who were able to file their proofs of debt by
Dec. 27, 2013, will be included in the company's dividend
distribution.

The company's liquidator is:

          MBT Trustees Ltd.
          Telephone: 945-8859
          Facsimile: 949-9793/4
          P.O. Box 30622 Grand Cayman KY1-1203
          Cayman Islands


BSI SERVICES: Placed Under Voluntary Wind-Up
--------------------------------------------
At an extraordinary meeting held on Nov. 25, 2013, the shareholder
of BSI Services (Cayman) Limited resolved to voluntarily wind up
the company's operations.

Creditors are required to file their proofs of debt to be included
in the company's dividend distribution.

The company's liquidator is:

          Ronald Kellum
          P.O. Box 569 Mountain View
          Wyoming 82939
          USA
          Telephone: (307) 782 6754
          Facsimile: (307) 782 7298


BUCKINGHAM BLUE: Placed Under Voluntary Wind-Up
-----------------------------------------------
On Dec. 4, 2013, the sole shareholder of Buckingham Blue Ltd.
resolved to voluntarily wind up the company's operations.

Only creditors who were able to file their proofs of debt by
Dec. 27, 2013, will be included in the company's dividend
distribution.

The company's liquidator is:

          MBT Trustees Ltd.
          Telephone: 945-8859
          Facsimile: 949-9793/4
          P.O. Box 30622 Grand Cayman KY1-1203
          Cayman Islands


CT DIRECTOR: Placed Under Voluntary Wind-Up
-------------------------------------------
At an extraordinary meeting held on Nov. 28, 2013, the
shareholders of CT Director Ltd resolved to voluntarily wind up
the company's operations.

Creditors are required to file their proofs of debt to be included
in the company's dividend distribution.

The company's liquidator is:

          Commerce Corporate Services Limited
          P.O. Box Grand Cayman
          Cayman Islands
          Telephone: 949 8666
          Facsimile: 949 0626


DEEPSIX LTD: Placed Under Voluntary Wind-Up
-------------------------------------------
On Dec. 3, 2013, the shareholders of Deepsix Ltd resolved to
voluntarily wind up the company's operations.

Creditors are required to file their proofs of debt to be included
in the company's dividend distribution.

The company's liquidator is:

          Commerce Corporate Services Limited
          P.O. Box 694 Grand Cayman
          Telephone: 949 8666
          Facsimile: 949 0626
          P.O. Box 694 Grand Cayman
          Cayman Islands


DELVEST INC: Placed Under Voluntary Wind-Up
-------------------------------------------
At an extraordinary meeting held on Dec. 6, 2013, the shareholders
of Delvest Inc resolved to voluntarily wind up the company's
operations.

Creditors are required to file their proofs of debt to be included
in the company's dividend distribution.

The company's liquidator is:

          Commerce Corporate Services Limited
          P.O. Box Grand Cayman
          Cayman Islands
          Telephone: 949 8666
          Facsimile: 949 0626


EVERETT LLC: Placed Under Voluntary Wind-Up
-------------------------------------------
At an extraordinary meeting held on Dec. 6, 2013, the shareholders
of Everett LLC resolved to voluntarily wind up the company's
operations.

Creditors are required to file their proofs of debt to be included
in the company's dividend distribution.

The company's liquidator is:

          Commerce Corporate Services Limited
          P.O. Box Grand Cayman
          Cayman Islands
          Telephone: 949 8666
          Facsimile: 949 0626


EXECUTIVE INVESTMENTS: Placed Under Voluntary Wind-Up
-----------------------------------------------------
At an extraordinary meeting held on Dec. 4, 2013, the shareholder
of Executive Investments Inc resolved to voluntarily wind up the
company's operations.

Creditors are required to file their proofs of debt to be included
in the company's dividend distribution.

The company's liquidator is:

          Commerce Corporate Services Limited
          P.O. Box Grand Cayman
          Cayman Islands
          Telephone: 949 8666
          Facsimile: 949 0626


HESPERUS HOLDINGS: Placed Under Voluntary Wind-Up
-------------------------------------------------
At an extraordinary meeting held on Dec. 2, 2013, the shareholder
of Hesperus Holdings, Ltd resolved to voluntarily wind up the
company's operations.

Creditors are required to file their proofs of debt to be included
in the company's dividend distribution.

The company's liquidator is:

          Commerce Corporate Services Limited
          P.O. Box Grand Cayman
          Cayman Islands
          Telephone: 949 8666
          Facsimile: 949 0626


ISIDRO INTERNATIONAL: Placed Under Voluntary Wind-Up
----------------------------------------------------
On Dec. 6, 2013, the sole shareholder of Isidro International Ltd.
resolved to voluntarily wind up the company's operations.

Only creditors who were able to file their proofs of debt by
Dec. 27, 2013, will be included in the company's dividend
distribution.

The company's liquidator is:

          MBT Trustees Ltd.
          Telephone: 945-8859
          Facsimile: 949-9793/4
          P.O. Box 30622 Grand Cayman KY1-1203
          Cayman Islands


JADE OPPORTUNITIES: Placed Under Voluntary Wind-Up
--------------------------------------------------
On Dec. 6, 2013, the sole shareholder of Jade Opportunities Ltd.
resolved to voluntarily wind up the company's operations.

Only creditors who were able to file their proofs of debt by
Dec. 27, 2013, will be included in the company's dividend
distribution.

The company's liquidator is:

          MBT Trustees Ltd.
          P.O. Box 30622 Grand Cayman KY1-1203
          Cayman Islands
          Telephone: 945-8859
          Facsimile: 949-9793/4


LIMESTONE FUND: Placed Under Voluntary Wind-Up
----------------------------------------------
On Dec. 5, 2013, the sole shareholder of Limestone Fund SPC
resolved to voluntarily wind up the company's operations.

Creditors are required to file their proofs of debt to be included
in the company's dividend distribution.

The company's liquidator is:

          Avalon Management Limited
          Avalon Ltd.
          Reference: GL
          Telephone: +1 (345) 769 4422
          Facsimile: +1 (345) 769 9351
          Landmark Square, 1st Floor
          64 Earth Close West Bay Beach
          P.O. Box 715, George Town
          Grand Cayman KY1-1107
          Cayman Islands


PINEBRIDGE CAPITAL: Commences Liquidation Proceedings
-----------------------------------------------------
On Nov. 25, 2013, the sole shareholder of Pinebridge Capital
Recovery Partners, Ltd. resolved to voluntarily liquidate the
company's business.

Only creditors who were able to file their proofs of debt by
Dec. 30, 2013, will be included in the company's dividend
distribution.

The company's liquidator is:

          Pinebridge Investments LLC
          399 Park Avenue
          New York NY 10022
          USA


PRUDENCE TRADING: Placed Under Voluntary Wind-Up
------------------------------------------------
On Dec. 4, 2013, the sole shareholder of Prudence Trading Ltd
resolved to voluntarily wind up the company's operations.

Only creditors who were able to file their proofs of debt by
Dec. 27, 2013, will be included in the company's dividend
distribution.

The company's liquidator is:

          MBT Trustees Ltd.
          Telephone: 945-8859
          Facsimile: 949-9793/4
          P.O. Box 30622 Grand Cayman KY1-1203
          Cayman Islands


REGENT INVESTMENTS: Placed Under Voluntary Wind-Up
--------------------------------------------------
On Dec. 6, 2013, the shareholders of Regent Investments resolved
to voluntarily wind up the company's operations.

Creditors are required to file their proofs of debt to be included
in the company's dividend distribution.

The company's liquidator is:

          Trident Liquidators (Cayman) Ltd
          c/o Eva Moore
          Telephone: (345) 949 0880
          Facsimile: (345) 949 0881
          One Capital Place, 4th Floor
          P.O. Box 847, George Town Grand Cayman KY1-1103
          Cayman Islands


RIDLEY INTERNATIONAL: Commences Liquidation Proceedings
-------------------------------------------------------
At an extraordinary meeting held on Dec. 4, 2013, the shareholders
of Ridley International Ltd. resolved to voluntarily liquidate the
company's business.

Only creditors who were able to file their proofs of debt by
Jan. 30, 2014, will be included in the company's dividend
distribution.

The company's liquidator is:

          Tim Cartwright
          Hawksford, 15, Esplanade
          St. Helier Jersey
          Channel Islands, JE1 1RB,
          Telephone: +44 1534 740170
          Facsimile: +44 1534 740074


ROLLING HILLS: Placed Under Voluntary Wind-Up
---------------------------------------------
At an extraordinary meeting held on Nov. 29, 2013, the shareholder
of Rolling Hills Company resolved to voluntarily wind up the
company's operations.

Only creditors who were able to file their proofs of debt by
Dec. 16, 2013, will be included in the company's dividend
distribution.

The company's liquidator is:

          Commerce Corporate Services Limited
          P.O. Box Grand Cayman
          Cayman Islands
          Telephone: 949 8666
          Facsimile: 949 0626


SUCGP (F) LTD: Placed Under Voluntary Wind-Up
---------------------------------------------
On Dec. 6, 2013, the sole shareholder of SUCGP (F) Ltd. resolved
to voluntarily wind up the company's operations.

Creditors are required to file their proofs of debt to be included
in the company's dividend distribution.

The company's liquidator is:

          Avalon Ltd.
          Reference: GL
          Telephone: +1 (345) 769 4422
          Facsimile: +1 (345) 769 9351
          Landmark Square, 1st Floor
          64 Earth Close
          West Bay Beach
          P.O. Box 715, George Town Grand Cayman KY1-1107
          Cayman Islands


SUNTECH POWER: Names Deyong He as Acting Chief Financial Officer
----------------------------------------------------------------
Suntech Power Holdings Co., Ltd. disclosed that Deyong He has been
appointed as the fourth member of Suntech's Board of Directors, as
well as acting Chief Financial Officer.  Mr. He joins Messrs.
Michael Nacson, Kurt Metzger and Dr. Zhengrong Shi on Suntech's
Board.

The Board also appointed Mr. Metzger as the second member of the
Audit, Compensation and Nominating Committees joining Mr. Nacson
on each of these committees.

Mr. He has served as Corporate Finance/Treasury Director of
Suntech since 2012. Prior to Suntech, Mr. He served as Treasury
Director / Managing Director of IMC Pan Asia Alliance (China) Co.,
Ltd. / IMC-GATX Financial Leasing (Shanghai) Co., Ltd. from 2008
to 2012, Head of Treasury of LANXESS Chemical (China) Co., Ltd
from 2006 to 2008, and Head of Treasury of Chia Hsin Cement
Greater China Holdings Co., Ltd. from 2000 to 2006. Prior to 2000,
he served as a project manager in various entities in the
development of real estate and civil engineering.

Mr. He has in-depth corporate finance experience and multicultural
exposure across manufacturing, shipping, real estate and logistics
and leasing industries with European, American and Asian
companies.  Mr. He holds a Bachelor of Science degree from Tongji
University and Masters of Business Administration degree from
Fudan University.

                      About Suntech

Wuxi, China-based Suntech Power Holdings Co., Ltd., produces solar
products for residential, commercial, industrial, and utility
applications.  Suntech has delivered more than 25,000,000
photovoltaic panels to over a thousand customers in more than 80
countries.

Suntech Power Holdings Co., Ltd., received from the trustee of its
3 percent Convertible Notes a notice of default and acceleration
relating to Suntech's non-payment of the principal amount of
US$541 million that was due to holders of the Notes on March 15,
2013.  That event of default has also triggered cross-defaults
under Suntech's other outstanding debt, including its loans from
International Finance Corporation and Chinese domestic lenders.

Suntech Power had involuntary Chapter 7 bankruptcy proceedings
initiated against it on Oct. 14, 2013, in U.S. Bankruptcy Court in
White Plains, New York (Bankr. S.D.N.Y. Case No. 13-bk-13350), by
holders of more than $1.5 million of defaulted securities under a
2008 $575 million indenture.  The Chapter 7 Petitioners are
Trondheim Capital Partners, L.P., Michael Meixler, Longball
Holdings, LLC, and Jiangsu Liquidators, LLC.  They are represented
by Jay Teitelbaum, Esq., at Teitelbaum & Baskin LLP, in White
Plains, New York.


WISDOM INVESTMENT: Placed Under Voluntary Wind-Up
-------------------------------------------------
On Dec. 6, 2013, the sole shareholder of Wisdom Investment Ltd.
resolved to voluntarily wind up the company's operations.

Only creditors who were able to file their proofs of debt by
Dec. 27, 2013, will be included in the company's dividend
distribution.

The company's liquidator is:

          MBT Trustees Ltd.
          P.O. Box 30622 Grand Cayman KY1-1203
          Cayman Islands
          Telephone: 945-8859
          Facsimile: 949-9793/4


=============
J A M A I C A
=============


* JAMAICA: Borrowing Less Than Planned
--------------------------------------
RJR News reports that the Jamaican government said it has been
borrowing less than it had planned.

Data released by the Ministry of Finance show loan receipts at the
end of December were J$54.5 billion, according to RJR News.   The
report relates that this was J$1.4 billion lower than planned.

The report notes that this was due to the government borrowing far
less on the international markets than it had planned.  So far,
lower than expected interest rates have resulted in J$5 billion in
savings on the debt, the report relays.


=====================
P U E R T O   R I C O
=====================


PUERTO RICO: S&P Cuts GO Debt Rating to 'BB+'; Still on Watch Neg
-----------------------------------------------------------------
Standard & Poor's Ratings Services has lowered its rating on the
Commonwealth of Puerto Rico's general obligation (GO) debt to
'BB+' from 'BBB-'.  "At the same time, we have downgraded
Commonwealth appropriation secured debt and Employee Retirement
System (ERS) debt to 'BB'.  All of our ratings remain on
CreditWatch with negative implications," S&P said.

"The downgrades follow our evaluation of liquidity for the
Commonwealth, including what we believe is a reduced capacity to
access liquidity from the Government Development Bank (GDB) of
Puerto Rico. In a related action, we downgraded the GDB to 'BB',
and the rating remains on CreditWatch with negative implications.
We also believe that the Commonwealth's access to liquidity either
through GDB or other means will remain constrained in the medium
term, even in the event of a potential issuance of debt planned
next month. We believe that these liquidity constraints do not
warrant an investment-grade rating," S&P said.

The negative CreditWatch reflects uncertainties relating to the
Commonwealth's constrained access to the market, as well as our
assessment of the size and timing of potential additional
contingent liquidity needs.

"That the rating is not lower is due to the progress the current
administration has made in reducing operating deficits, and what
we view as recent success with reform of the public employee and
teacher pension systems, which had been elusive in recent years.
We view the reform as significant and could contribute to a
sustainable path to fiscal stability. We view the current
administration's recently announced intent to further reduce
appropriations in fiscal 2014 by $170 million and budget for
balanced operations in fiscal 2015 as potentially leading to
credit improvement in the long run, but subject to near-term
implementation risk that could lead to further liquidity pressure
to the extent deficits continued. We also note the sustained
commitment through a range of financial and economic cycles to
funding debt obligations and providing what we view as strong
bondholder security provisions," S&P said.

"In our view, Puerto Rico has limited liquidity without access to
the debt market by either GDB or directly by the Commonwealth for
sizeable amounts of debt, and may also need further market access
to finance a potential fiscal 2015 operating deficit,
notwithstanding current efforts to close the deficit.  The planned
near-term sale of sizeable Commonwealth tax-backed debt will
refinance existing GDB loans into long term debt at potentially
high interest costs, adding to an already high debt service
burden," S&P said.

"While we believe such a sale would provide temporary liquidity
into fiscal 2015 and could be an important stabilizing factor, we
believe there remain implementation risks over the next year in
light of continued economic weakness.  In our view, there is
little margin for error over the next two years in its plan to
reduce operating deficits, and potential difficulty financing
future deficits larger than currently projected by the
Commonwealth. Pending legislation would also raise the
authorization of GDB to sell debt with a Commonwealth GO guarantee
to $2.0 billion from $500 million, although the GDB has said that
it plans to make only limited use of this option," S&P said.

"We have lowered the appropriation and ERS-secured bond ratings
further than the GO rating to reflect our view that liquidity and
market access risk have been heightened following our downgrade of
the Commonwealth, making it less likely that the Commonwealth
would prioritize appropriation debt payments in order to preserve
market access for GO debt," S&P said.

"We have also lowered various ratings on the Puerto Rico Highways
and Transportation Authority (HTA) to the same rating as the
Commonwealth GO at 'BB+', and kept it on CreditWatch with negative
implications, to reflect the potential diversion of gas tax-
derived revenue to pay GO debt service under the Puerto Rico
constitution. We have not taken a rating action on sales tax-
secured debt of the Puerto Rico Sales Tax Financing Corp.
(COFINA), but have retained our negative outlook on our COFINA
ratings reflecting our view of the economic outlook and that
COFINA sales tax is not subject to the prior diversion of revenue
for GO debt service payments," S&P said.

"In our view, contingent liquidity risks totaling $940 million in
the event of a downgrade include $257 million of potential GO
variable rate demand obligation (VRDO) debt acceleration, $39
million of additional GO interest rate swap collateral posting,
$575 million of HTA debt acceleration, and $69 million of
additional swap collateral posting. Puerto Rico calculates that
$375 million of HTA bond anticipation notes currently outstanding
in the amount of $400 million would remain outstanding following a
180-day acceleration provision, while the remaining debt
accelerations would need to be paid within 30 days of a downgrade.
We understand that the GDB is currently negotiating to have
certain debt holders waive acceleration provisions and arranging
for new multi-year external bank credit lines that could mitigate
near-term liquidity risks. The $940 million total includes only
the current additional capital requirements in the event of a one-
notch downgrade," S&P said.

"Also not included in the $940 million total is the need to
finance the remaining portion of the fiscal 2014 Commonwealth
operating deficit not already financed by GDB, or a potential 2015
deficit, if one were to develop. We believe the Puerto Rico
Electric Power Authority would not have to post additional
collateral in the event of a one-notch downgrade. The Commonwealth
has reported that general fund revenues and expenses are
performing better than originally budgeted in the first half of
fiscal 2014, with revenues $93 million better than budgeted
through December 2013, and expenses $19 million under budget
through November. However, we believe this may not fully reflect
sales taxes that are under budget, since sales taxes do not flow
into the general fund in the first part of the year until COFINA
annual debt service is fully paid," S&P said.

"The Commonwealth may also potentially need monthly cash flow
financing in fiscal 2015, following use of $1.2 billion of credit
line draws for cash flow purposes in fiscal 2014. We could see
some inflows of public-sector deposits to GDB in the coming months
as a result of a proposed bill authorizing GDB to require certain
public-sector entities to transfer their deposits, which are
currently held at private local banks, to GDB," S&P said.

"The Commonwealth GO rating is also based on our view of:

The Commonwealth's substantial economy of 3.62 million people,
whose gross product is centered on manufacturing, and the
government sector contributing to significant employment. Tourism
is a growing sector, although still a modest part of the overall
economy, which we see as having weak economic trends that began in
fiscal 2007, including population declines and economic
contraction in real terms in every year except one since 2006;

Puerto Rico's strong ties to the U.S. economy, resulting in a
significant flow of trade and income transfers;

Structural deficits in the Commonwealth's general fund for more
than a decade;

Recent willingness to tackle long-term structural issues, as
indicated by enactment of substantial pension reform, elimination
of subsidies for the water and sewer authority, and large recent
tax increases. The current administration just announced an
intention to take additional mid-year actions to reduce the
current-year deficit and to introduce a balanced budget in April
for fiscal 2015, which would be the first balanced budget in many
years;

The high level of debt and retirement liabilities; and

A governmental framework that constitutionally places repayment of
GO debt ahead of other expenses, and broad legal authority to
adjust revenues and expenditures," S&P said.

"We understand that the Commonwealth has sharply reduced its
estimate of its fiscal 2013 budget operating deficit from an
initial $2.2 billion. The Commonwealth has budgeted for an $820
million operating deficit in fiscal 2014, or about 8% of budgetary
expenses. However, the current administration has just announced
an intention to take additional budget actions which would reduce
the 2014 budget deficit by an additional $170 million, to a $650
million deficit, and also to pass a balanced budget for fiscal
2015. The 2014 operating deficit follows a long string of
operating deficits for over a decade," S&P said.

Economic Profile

"We believe the economy is moderately diverse in terms of
employment. While manufacturing represented 45.6% of GDP in 2012,
it was only 9.0% of nonfarm employment. The largest nonfarm
employment sector was government at 27.8%, followed by education
and health at 12.6%. Net payments abroad accounted for
approximately $31.6 billion (31.2% of GNP) in 2012, on a
preliminary basis," S&P said.

According to the GDB, income transfers from the U.S. government to
the Commonwealth total about 25% of Puerto Rico income. Non-farm
wage and salary employment was down 4.2% as of November 2013 from
a year earlier.

Recent economic news is mixed. The U.S. Bureau of Labor Statistics
released preliminary data showing December 2013 total employment
was down slightly, nonfarm wage and salary employment was up
slightly, and the preliminary December unemployment rate had risen
to 15.4%. The GDB economic activity index was up for three
consecutive months through November 2013, although down year over
year. On a yearly basis, the Commonwealth has suffered economic
contraction for every year except one since 2006. Income levels
are well below U.S. state averages, although good compared to some
Caribbean island nations.

Debt And Liabilities

"Deficit financing has been the primary reason for the recent
increase in Puerto Rico's tax-supported debt levels in our view.
We calculate that since 2009, the Commonwealth's tax-supported
debt has risen by $12.7 billion, or 49.2% at fiscal end 2013. Our
calculation of tax-supported debt includes $10.6 billion of GO
debt, $4.0 billion of appropriation and tax-supported debt, $2.9
billion of pension bonds, $15.2 billion COFINA sales tax debt, and
$5.6 billion of guaranteed debt, totaling $38.4 billion of total
tax-supported debt at June 30, 2013. The majority of this increase
($8.9 billion) is attributable to debt issued by COFINA, whose
corporate purpose was to fund the identified accumulated deficits
through fiscal 2012, but whose authority to issue debt has just
been expanded for fiscal 2014," S&P said.

"Our calculation of the Commonwealth's current tax-supported debt
level of approximately $38.4 billion at fiscal year end June 30,
2013, or $10,635 per capita and 38% of GDP, are significantly
higher than the median for the states of $1,036 per capita and
2.3% of gross state product. Total public sector debt is much
larger, and includes $25.6 billion of revenue debt issued by the
Commonwealth's public corporations and agencies (some of which
previously received support from the general fund). This debt
calculation does not include the potential for additional tax-
backed debt expected to be sold shortly, or the pending expansion
of a Commonwealth GO guarantee to GDB debt to $2.0 billion from
$500 million," S&P said.

Puerto Rico recently enacted various reforms to the Teachers
Retirement System similar to the ERS reforms. This sparked a two-
day teacher strike and a court stay of implementation while union
litigation is resolved. Puerto Rico expects the Teachers
Retirement System litigation to be resolved by the end of
February, well before implementation of the important part of the
legislation on July 1, which would be positive from a credit
standpoint. The ERS reform significantly reduced future benefit
disbursements, but requires a $140 million higher general fund
contribution in fiscal 2014 and afterward to forestall much higher
contributions that were projected by 2020 when the pension system
would otherwise have exhausted its cash and reverted to a pay-as-
you-go system. All active employees are now in a defined
contribution  retirement system

"Combined, the employees, teachers, and judicial pension systems
had what we consider a large unfunded actuarial liability of $37.0
billion, and a combined funded ratio of 8.4% at their June 30,
2012, actuarial valuation date. The ERS alone had a 4.5% funded
ratio. The unfunded pension liability amounts to about $10,240 per
capita. The Commonwealth's unfunded other postemployment liability
is not as large, but also significant in our opinion at $2.9
billion, or about $809 per capita," S&P said.

"Based on the analytical factors we evaluate for U.S. states and
territories, on a scale of '1.0' (strongest) to '4.0' (weakest),
we have assigned a composite score of '3.2'. Based on our
criteria, an overall score of '3.2' is associated with an
indicative credit level in the 'BBB' category. Our criteria also
specify overriding factors that may result in a rating different
from the indicative credit level. In the case of the Commonwealth,
we view the system support score, level of unfunded pension
liabilities, liquidity, and market access as overriding factors
that result in a rating below the indicative credit level," S&P
said.

Creditwatch

The ratings remain on CreditWatch with negative implications. The
current pressures on funding access heighten our concern about the
Commonwealth's overall liquidity profile and the timing and
magnitude of potential contingent liquidity requirements that may
develop. Our ratings reflect an expectation that either the
Commonwealth or GDB will access the market in the near future,
while the CreditWatch reflects the risk Puerto Rico may not be
able to access the market in a manner to maintain sufficient
liquidity on a timely basis.

"We would view a debt placement by either GDB or the Commonwealth
sufficient to cover potential near-term liquidity and contingent
risks, currently estimated around $1 billion or more, as an
important credit stabilizing factor-the Commonwealth is currently
contemplating a sizeable bond sale in the near future. The ratings
could be further lowered if there is an inability to raise funding
in the next few months or to otherwise improve cash flows.  We
expect to resolve or address the CreditWatch within the next
couple of months," S&P said.


                            ***********


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.

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, and Peter A.
Chapman, Editors.

Copyright 2014.  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.


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