/raid1/www/Hosts/bankrupt/TCRLA

/raid1/www/Hosts/bankrupt/TCRLA_Public/140212.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 12, 2014, Vol. 15, No. 30 Headlines A R G E N T I N A ARGENTINA: Elliott Clashes With Gramercy Over Debt BUENOS AIRES: S&P Lowers Global Scale Currency Rating to 'CCC+' B R A Z I L OGX PETROLEO: Bondholders to Pump $215 Million Into Firm PETROLEO BRASILEIRO: Struggles to Meet Targets by Odebrecht C A Y M A N I S L A N D S BIG SHRIMP: Shareholders Receive Wind-Up Report BROOKLANDS 2004-1: Fitch Lowers Rating on Class D Notes to Dsf CAPULA INVESTMENTS: Members Receive Wind-Up Report CNS CAYMAN: Shareholders Receive Wind-Up Report COANDA LEASING: Shareholders Receive Wind-Up Report CRAFT 2012-2: Shareholders Receive Wind-Up Report CRAFT 2012-2 MEZZ: Shareholders Receive Wind-Up Report FUTURA INITIAL: Shareholders Receive Wind-Up Report GALENA CDO I: Shareholders Receive Wind-Up Report GREENE INVESTMENTS: Shareholders Receive Wind-Up Report IB K4D-15V FEEDER: Shareholders Receive Wind-Up Report IB K4D-15V TRADING: Shareholders Receive Wind-Up Report INA CBO 1999-1: Shareholders Receive Wind-Up Report MA ISAM: Shareholders Receive Wind-Up Report MA TRENDHEDGE: Shareholders Receive Wind-Up Report ROTTERDAM DREDGING: Shareholders Receive Wind-Up Report S.A.C. PEI CB: Shareholders Receive Wind-Up Report S.A.C. PEI CB II: Shareholders Receive Wind-Up Report SEQUOIA FUNDING: Shareholders Receive Wind-Up Report TRENDHEDGE SPMA: Shareholders Receive Wind-Up Report TRENDHEDGE TRADING: Shareholders Receive Wind-Up Report M E X I C O SATELITES MEXICANOS: Moody's Hikes CFR & Senior Sec. Rating to Ba1 TENEDORA NEMAK: Fitch Hikes Issuer Default Rating to 'BB' P U E R T O R I C O AES PUERTO RICO: Moody's Cuts Rating on $194MM Bonds to Ba2 UNIV. OF PUERTO RICO: Moody's Cuts System Revenue Bonds to Ba3 - - - - - ================= A R G E N T I N A ================= ARGENTINA: Elliott Clashes With Gramercy Over Debt -------------------------------------------------- John Carrey, writing for Daily Bankruptcy News, reports that as Argentina struggles to stave off a second debt default in 13 years, two U.S. hedge funds are playing central but opposing roles in the country's efforts to untangle itself from the previous crisis. The two firms, Gramercy Funds Management LLC and Elliott Management Corp., have hundreds of millions of dollars at stake as Argentina tries to wrap up a saga that dates back to its decision to give up on its debt payments in December 2001, according to Daily Bankruptcy News. However, the report relates that the firms have taken conflicting tacks in trying to get their money back. As reported in the Troubled Company Reporter-Latin America on Jan. 17, 2014, Daily Bankruptcy Review said that investors are pulling out of Argentina's currency and bonds as its financial situation deteriorates. Bloomberg News disclosed that prices fell as the state pensions agency Anses sold bonds to local investors, including 2018 notes for the first time, in an attempt to strengthen the peso rate that is implied from financial transactions, known as the blue-chip swap. Investors also dumped the country's notes as the central bank's foreign currency reserves and the parallel peso tumbled in spite of government measures, reversing December gains, Bloomberg News relayed. A TCRLA report on Dec. 10, 2013, citing Daily Bankruptcy Review, relayed that the U.S. government has urged the Supreme Court to intervene in Argentina's fight over paying up on its defaulted debt, saying a lower court ruling against the country was wrong. Bloomberg News said that Argentina lost its bid for a rehearing of a federal appeals court ruling against it in litigation over $1.5 billion in the nation's defaulted bonds. The U.S Court of Appeals for the Second Circuit in Manhattan on Nov. 18 rejected Argentina's request that a larger panel of circuit judges reconsider a decision that a three-judge panel reached in August, according to Bloomberg News. BUENOS AIRES: S&P Lowers Global Scale Currency Rating to 'CCC+' -------------------------------------------------------------- Standard & Poor's Ratings Services lowered its global scale local currency rating on the city of Buenos Aires to 'CCC+' from 'B-'. At the same time, S&P affirmed its 'CCC+' global scale foreign currency rating on the city. The outlooks remain negative. "The downgrade follows our review of the cross-default clauses included in the dollar-linked bonds that the city of Buenos Aires recently issued in the local market," said Standard & Poor's credit analyst Delfina Cavanagh. On Dec. 20, 2013, the city issued a series 5, dollar-linked bond for $113 million. On Jan. 28, 2014, it issued a series 6 dollar-linked bond for $147 million. Assuming that local currency debt payment with cross-default clauses would accelerate upon the city's first material foreign currency default, it would not have sufficient liquidity to meet its foreign currency obligations or its local currency obligations with cross-default clauses. =========== B R A Z I L =========== OGX PETROLEO: Bondholders to Pump $215 Million Into Firm -------------------------------------------------------- Luciana Magalhaes at Daily Bankruptcy Review reports that a group of bondholders of Oleo e Gas Participacoes SA formerly known as OGX Petroleo e Gas Participacoes SA have agreed to invest $215 million in the company as part of a restructuring plan to try to help it emerge from bankruptcy proceedings, the firm confirmed. The agreement signed is part of a bankruptcy protection plan for Oleo e Gas which will now be presented to a judge by Feb. 17, according to a person familiar with the company's plans, according to Daily Bankruptcy Review. As reported in the Troubled Company Reporter-Latin America on Feb. 4, 2014, Daily Bankruptcy News said that Oleo e Gas Participacoes confirmed Jan. 30 that it has postponed for the second time the presentation of its judicial recovery plan. The Troubled Company Reporter-Latin America, citing Daily Bankruptcy Review, reported on Jan. 28, 2014, that Oleo e Gas said bondholders had agreed to extend a deadline to finalize a restructuring deal until Jan. 31. OGP and bondholders had originally set a Friday deadline to reach a deal on additional financing to maintain the firm's operations, according to Daily Bankruptcy Review. The report added that OGP was then expected to submit its restructuring plan to a Rio de Janeiro bankruptcy court. The Troubled Company Reporter, citing The Wall Street Journal, reported on Jan. 24, 2014, that a crucial deadline for the restructuring agreement of Oleo e Gas Participacoes SA might not be met. In one of Latin America's largest bankruptcy cases, OGP filed for protection from creditors in late October. In December, the company announced a deal with creditors to exchange debts valued at some $5.8 billion for shares, and to give bondholders an option to invest an additional $200 million to $215 million in the company. 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. PETROLEO BRASILEIRO: Struggles to Meet Targets by Odebrecht ----------------------------------------------------------- Juan Pablo Spinetto at Bloomberg News reports that Petroleo Brasileiro SA, the most indebted oil company, is facing difficulties meeting its goal of doubling output by 2020, said supplier Odebrecht Oleo & Gas SA. Petrobras has a "full plate" and may face financial limitations to speed up development, Roberto Ramos, head of Odebrecht's oil equipment unit, said Jan. 30 during a meeting organized by the Norwegian-Brazilian Chamber of Commerce (NBCC), according to Bloomberg News. "Petrobras is doing what they can to mobilize gear, equipment and capex, and an enormous concentration of FPSOs are coming into production in 2014 and 2015, but is it soon enough?" Mr. Ramos said, Bloomberg News notes. "The Petrobras balance sheet could also limit the increase of development speed. The current logistic systems can't cope and won't be able to cope as Petrobras doubles its production," Mr. Ramos added, Bloomberg News relays. Petrobras, the biggest producer in waters deeper than 1,000 feet, needs to deliver on its business plan for Brazil to recover investor credibility, Mr. Ramos said, Bloomberg News relates. "What is lacking the most in Brazil, is confidence," Mr. Ramos was quoted as saying, Bloomberg News notes. "To get confidence back, Petrobras has to deliver. 2014 is not a year to rock the boat. 2015 will be a year for adjustments. From 2016, we might see improvements. The question is how Petrobras will handle this," Mr. Ramos said, Bloomberg News adds. OOG, as the company that started offshore drilling operations in 1979 is known, supplies seven offshore rigs to Petrobras, according to data published by Rigzone. Diamond Offshore Drilling (DO) Inc. is the largest of Petrobras's 16 offshore rig suppliers, followed by Queiroz Galvao Oleo & Gas SA, the data show. Odebrecht SA is the holding controlling OOG. Based in Rio de Janeiro, Brazil, Petroleo Brasileiro S.A. -- Petrobras (Brazilian Petroleum Corporation) -- explores for oil and gas and produces, refines, purchases, and transports oil and gas products. The Company has proved reserves of about 14.1 billion barrels of oil equivalent and operates 16 refineries, an extensive pipeline network, and more than 8,000 gas stations. * * * As reported in the Troubled Company Reporter-Latin America on Oct. 7, 2013, Moody's Investors Service downgraded Petroleo Brasileiro's multiple seniority shelf to (P)Ba1 from (P)Baa3. ========================== C A Y M A N I S L A N D S ========================== BIG SHRIMP: Shareholders Receive Wind-Up Report ----------------------------------------------- The shareholders of Big Shrimp, Ltd received on Feb. 4, 2014, the liquidator's report on the company's wind-up proceedings and property disposal. The company's liquidator is: Britannia Corporate Management Ltd c/o Gary F. Oakley 196 Raleigh Quay, Grand Cayman, KY1-1104 Telephone (345) 949 2700 BROOKLANDS 2004-1: Fitch Lowers Rating on Class D Notes to Dsf -------------------------------------------------------------- Fitch Ratings has downgraded Euro Reference-Linked Notes 2004-1 Limited (Brooklands 2004-1)'s class D notes and affirmed the others, as follows: Class A2 (ISIN XS0193141891) affirmed at 'CCsf' Class B (ISIN XS0193142436) affirmed at 'Csf' Class C-E (ISIN XS0193142782) affirmed at 'Csf' Class C-Y (ISIN XS0193142865) affirmed at 'Csf' Class D (ISIN XS0193143590) downgraded to 'Dsf' from 'Csf' Class E (ISIN XS0193143913) affirmed at 'Dsf' KEY RATING DRIVERS The class D notes have been downgraded as EUR11.3 million has been written off their notional as part of credit protection payments made on the reference pool. Furthermore the entire notional balance (EUR13.5 million) of the class E notes has now been written off as part of the same series of payments. The affirmation of the class A2 to C-Y and class E notes reflects the notes' levels of credit enhancement relative to the reference portfolio credit quality. Fitch considers it unlikely that principal will be repaid at maturity. The reference pool currently consists of 47.8% (EUR279 million) sub-investment grade assets and 7% (EUR41m) assets rated 'CCC' or below. Credit protection payments were made on two assets Deco 6-UK2X C and Deco 6-UK2X D, which were classified as defaulted in November 2012. The payment amount for the two assets was determined on the last auction date at EUR14.9 million. There are now no credit protection payments outstanding. Seven credit protection payments have been made over the lifetime of the deal for a total EUR47.5m on EUR47.8m of assets. The issuer, Brooklands, is a special purpose vehicle incorporated with limited liability under the laws of the Cayman Islands. Brooklands provides protection to UBS AG, London Branch on a portfolio of reference credits with an initial notional value of EUR750 million. The class A to E notes' ratings address the full and timely payment of interest and ultimate payment of principal by the final maturity. The class A1-b notes were redeemed in full in June 2013. The scheduled maturity date for the remaining notes is in June 2014 and the legal final maturity date is in 2054. The margins for any notes still outstanding after the scheduled maturity date are to increase. Rating Sensitivities All the outstanding notes are at distressed rating levels and as such are unlikely to be affected by any further deterioration in the respective underlying asset portfolios. CAPULA INVESTMENTS: Members Receive Wind-Up Report -------------------------------------------------- The members of Capula Investments (US) Limited received on Jan. 8, 2014, the liquidator's report on the company's wind-up proceedings and property disposal. The company's liquidator is: Ogier Employee Benefit Services Limited Ogier Employee Benefit Services Limited Ogier House The Esplanade St Helier Jersey JE4 9WG CNS CAYMAN: Shareholders Receive Wind-Up Report ----------------------------------------------- The shareholders of CNS Cayman Holdings One Limited received on Jan. 17, 2014, the liquidator's report on the company's wind-up proceedings and property disposal. The company's liquidator is: David Dyer Telephone: (345)949-8244 Facsimile: (345)949-5223 P.O. Box 1984 Grand Cayman KY1-1104 Cayman Islands COANDA LEASING: Shareholders Receive Wind-Up Report --------------------------------------------------- The shareholders of Coanda Leasing Limited received on Jan. 17, 2014, the liquidator's report on the company's wind-up proceedings and property disposal. The company's liquidator is: David Dyer Telephone: (345)949-8244 Facsimile: (345)949-5223 P.O. Box 1984 Grand Cayman KY1-1104 Cayman Islands CRAFT 2012-2: Shareholders Receive Wind-Up Report ------------------------------------------------- The shareholders of Craft 2012-2, Ltd received on Jan. 17, 2014, the liquidator's report on the company's wind-up proceedings and property disposal. The company's liquidator is: David Dyer Telephone: (345)949-8244 Facsimile: (345)949-5223 P.O. Box 1984 Grand Cayman KY1-1104 Cayman Islands CRAFT 2012-2 MEZZ: Shareholders Receive Wind-Up Report ------------------------------------------------------ The shareholders of Craft 2012-2 Mezz, Ltd. received on Jan. 17, 2014, the liquidator's report on the company's wind-up proceedings and property disposal. The company's liquidator is: David Dyer Telephone: (345)949-8244 Facsimile: (345)949-5223 P.O. Box 1984 Grand Cayman KY1-1104 Cayman Islands FUTURA INITIAL: Shareholders Receive Wind-Up Report --------------------------------------------------- The shareholders of Futura Initial Investor Limited received on Jan. 29, 2014, the liquidator's report on the company's wind-up proceedings and property disposal. The company's liquidator is: Ian D. Stokoe c/o Sarah Moxam Telephone: (345) 914 8634 Facsimile: (345) 945 4237 P.O. Box 258 Grand Cayman KY1-1104 Cayman Islands GALENA CDO I: Shareholders Receive Wind-Up Report ------------------------------------------------- The shareholders of Galena CDO I (Cayman No.1) Limited received on Jan. 17, 2014, the liquidator's report on the company's wind-up proceedings and property disposal. The company's liquidator is: David Dyer Telephone: (345)949-8244 Facsimile: (345)949-5223 P.O. Box 1984 Grand Cayman KY1-1104 Cayman Islands GREENE INVESTMENTS: Shareholders Receive Wind-Up Report ------------------------------------------------------- The shareholders of Greene Investments Limited received on Jan. 17, 2014, the liquidator's report on the company's wind-up proceedings and property disposal. The company's liquidator is: David Dyer Telephone: (345)949-8244 Facsimile: (345)949-5223 P.O. Box 1984 Grand Cayman KY1-1104 Cayman Islands IB K4D-15V FEEDER: Shareholders Receive Wind-Up Report ------------------------------------------------------ The shareholders of IB K4D-15V Feeder I Limited received on Jan. 17, 2014, the liquidator's report on the company's wind-up proceedings and property disposal. The company's liquidator is: David Dyer Telephone: (345)949-8244 Facsimile: (345)949-5223 P.O. Box 1984 Grand Cayman KY1-1104 Cayman Islands IB K4D-15V TRADING: Shareholders Receive Wind-Up Report ------------------------------------------------------- The shareholders of IB K4D-15V Trading Limited received on Jan. 17, 2014, the liquidator's report on the company's wind-up proceedings and property disposal. The company's liquidator is: David Dyer Telephone: (345)949-8244 Facsimile: (345)949-5223 P.O. Box 1984 Grand Cayman KY1-1104 Cayman Islands INA CBO 1999-1: Shareholders Receive Wind-Up Report --------------------------------------------------- The shareholders of INA CBO 1999-1 Ltd. received on Jan. 17, 2014, the liquidator's report on the company's wind-up proceedings and property disposal. The company's liquidator is: David Dyer Telephone: (345)949-8244 Facsimile: (345)949-5223 P.O. Box 1984 Grand Cayman KY1-1104 Cayman Islands MA ISAM: Shareholders Receive Wind-Up Report -------------------------------------------- The shareholders of MA Isam Limited received on Jan. 17, 2014, the liquidator's report on the company's wind-up proceedings and property disposal. The company's liquidator is: David Dyer Telephone: (345)949-8244 Facsimile: (345)949-5223 P.O. Box 1984 Grand Cayman KY1-1104 Cayman Islands MA TRENDHEDGE: Shareholders Receive Wind-Up Report -------------------------------------------------- The shareholders of MA Trendhedge Limited received on Jan. 17, 2014, the liquidator's report on the company's wind-up proceedings and property disposal. The company's liquidator is: David Dyer Telephone: (345)949-8244 Facsimile: (345)949-5223 P.O. Box 1984 Grand Cayman KY1-1104 Cayman Islands ROTTERDAM DREDGING: Shareholders Receive Wind-Up Report ------------------------------------------------------- The shareholders of Rotterdam Dredging Company Ltd received on Jan. 17, 2014, the liquidator's report on the company's wind-up proceedings and property disposal. The company's liquidator is: David Dyer Telephone: (345)949-8244 Facsimile: (345)949-5223 P.O. Box 1984 Grand Cayman KY1-1104 Cayman Islands S.A.C. PEI CB: Shareholders Receive Wind-Up Report -------------------------------------------------- The shareholders of S.A.C. PEI CB Investment GP, Limited received on Jan. 6, 2014, the liquidator's report on the company's wind-up proceedings and property disposal. The company's liquidator is: S.A.C. Capital Advisors, L.P c/o Alison O'Shea 72 Cummings Point Road Stamford, CT 06902 U.S.A. Telephone: (203) 890-3584 S.A.C. PEI CB II: Shareholders Receive Wind-Up Report ----------------------------------------------------- The shareholders of S.A.C. PEI CB Investment II, Limited received on Jan. 6, 2014, the liquidator's report on the company's wind-up proceedings and property disposal. The company's liquidator is: S.A.C. Capital Advisors, L.P c/o Alison O'Shea 72 Cummings Point Road Stamford, CT 06902 U.S.A. Telephone: (203) 890-3584 SEQUOIA FUNDING: Shareholders Receive Wind-Up Report ---------------------------------------------------- The shareholders of Sequoia Funding Limited received on Jan. 17, 2014, the liquidator's report on the company's wind-up proceedings and property disposal. The company's liquidator is: David Dyer Telephone: (345)949-8244 Facsimile: (345)949-5223 P.O. Box 1984 Grand Cayman KY1-1104 Cayman Islands TRENDHEDGE SPMA: Shareholders Receive Wind-Up Report ---------------------------------------------------- The shareholders of Trendhedge SPMA Limited received on Jan. 17, 2014, the liquidator's report on the company's wind-up proceedings and property disposal. The company's liquidator is: David Dyer Telephone: (345)949-8244 Facsimile: (345)949-5223 P.O. Box 1984 Grand Cayman KY1-1104 Cayman Islands TRENDHEDGE TRADING: Shareholders Receive Wind-Up Report ------------------------------------------------------- The shareholders of Trendhedge Trading Limited received on Jan. 17, 2014, the liquidator's report on the company's wind-up proceedings and property disposal. The company's liquidator is: David Dyer Telephone: (345)949-8244 Facsimile: (345)949-5223 P.O. Box 1984 Grand Cayman KY1-1104 Cayman Islands =========== M E X I C O =========== SATELITES MEXICANOS: Moody's Hikes CFR & Senior Sec. Rating to Ba1 ------------------------------------------------------------------ Moody's Investors Service has upgraded Satmex's corporate family rating and the senior secured rating of Satmex' global notes to Ba1 from Caa1. This action concludes Satmex rating review process started on August 2, 2013, when Moody's placed all Satmex's ratings on review for upgrade. The outlook on the ratings is stable. The following summarizes Satmex' ratings and the rating actions: Issuer: Satelites Mexicanos, S.A. de C.V. Corporate Family Rating, Upgraded to Ba1 from Caa1 Senior Secured Regular Bond/Debenture May 15, 2017, Upgraded to Ba1 from Caa1 Outlook Actions: Issuer: Satelites Mexicanos, S.A. de C.V. Outlook, Changed To Stable from Rating Under Review For Upgrade Ratings Rationale The rating action follows Eutelsat Communication (Eutelsat, unrated)'s successful acquisition of 100% of the share capital of Sat'lites Mexicanos, S.A. de C.V. ("Satmex") announced last January 2, 2014. As a fully owned subsidiary of Eutelsat, Satmex's Ba1 ratings consider Moody's expectation of its support to Satmex. The rating also reflects Moody's understanding that Eutelsat will be looking to refinance Satmex's debt at Eutelsat SA (Baa3 stable), although it was not confirmed either by Eutelsat or Satmex. Moody's expects Eutelsat to be strongly motivated by its own self-interest to ensure that payments on Satmex's outstanding notes are made on a timely basis. Moody's has not equalized Satmex's ratings with those of Eutelsat SA because support is less certain than would be the case if the latter guaranteed or legally assumed the debt of Satmex. "Moody's have upgraded Satmex's ratings given our consideration of implicit support from Eutelsat, despite the lack of a guarantee to the company's debt," says Nymia Almeida, a Moody's Senior Credit Officer and lead analyst for Satmex. The acquisition amounted USD 831 million, that Eutelsat ultimately financed with part of the proceeds of the EUR 930 million local notes issued by its subsidiary Eutelsat SA (Baa3 stable) in December 2013. Currently, Satmex's USD 360 million notes, due in 2017, remain outstanding and do not bear any guarantee from its parent company. Despite the lack of guarantees, the Ba1 rating on Satmex's notes is reflective of the implicit support Moody's expects Satmex to receive from Eutelsat, in the context of the latter's expansionary business strategy in Latin America. Satmex Ba1 rating is in line with the Ba1 rating of the senior unsecured bank facilities at Eutelsat Communications SA, reflecting the structural subordination to the debt and other claims at Eutelsat SA. Prior to the acquisition, Satmex's standalone rating was being driven by the large credit risk posed by its satellite launch program. The program included the satellites Satmex 7 and Satmex 9, expected to be launched in 2015, with a total cost of approximately USD 170 million each. As of September 30, 2013, Moody's estimates that more than USD 200 million were unfunded and without clear funding sources. Following the transaction, Satmex credit profile has significantly improved as it is now part of a larger and better capitalized company. Eutelsat's solid business position as a multi-regional satellite service provider, its ability to achieve revenue growth, and its solid liquidity should support Satmex's satellite launch program. Moreover, Moody's evaluates Eutelsat's willingness to support its new subsidiary based on the perceived relevance Satmex has to Eutelsat's strategy to complement its footprint in fast- growing markets, and securing future sources of growth. However, the ratings are also cognizant of Eutelsat's exposure to industry- typical technology risks, and are tempered by near-term constraints on free cash flow generation given the company's ongoing capex program and high dividend payouts. The stable outlook on the ratings reflects our consideration of implicit support from Eutelsat, as well as the parent's solid business profile, good operating performance and track record of predictable revenues. An upgrade on Satmex's ratings will depend on Eutelsat's ratings. Moody's do not expect any immediate upward rating pressure, given Eutelsat's increased leverage resulting from the Satmex acquisition as well as free cash flow absorption through shareholder remuneration and capex. Positive rating pressure could develop over time if Eutelsat's debt/EBITDA ratio (as adjusted by Moody's) decreases below 3.25x on a sustainable basis. Conversely, negative pressure could arise if Eutelsat's performance weaken, in the context of a negative free cash flow over the next couple of years. The negative pressure would be developing in the event of a significant deterioration in operating performance (growth rate, margin) and in case of increasing leverage such that the Debt / EBITDA ratio (as adjusted by Moody's) sustainably exceeds 3.75x. Satmex's standalone credit profile is much weaker than when incorporating support from its parent company. Therefore, any change in our consideration of the support from the parent company could result in negative pressure for Satmex ratings. Support could be revised for example due to a change in Satmex relevance within Eutelsat's overall strategy, evidence of lack of support from Eutelsat to any of its subsidiaries or to Satmex's funding needs. Based in Mexico, Satmex is a satellite operator providing fixed satellite services (standard C- and Ku-band services) to local and international broadcasting and telecom firms as well as to government-related entities. Satmex operates three satellites in geo-synchronous orbital slots allocated to Mexico, covering the Americas. The company's satellite fleet includes Satmex 5, Satmex 6 and the recently launched Satmex 8. As of September 30, 2013, the company's last twelve month revenue amounted to about USD 137 million, of which fixed satellite services represented around 84%. Moody's adjusted EBITDA for the same period was USD 91.5 million (66.6% margin). Starting January 2014, the company will fully consolidate within the accounts of Eutelsat Communications. Headquartered in Paris, France, Eutelsat Communications is a leading operator of communications satellites, providing satellite capacity to broadcasters and broadcasting associations, pay-TV operators, video, data and Internet service providers, enterprises and government agencies. Through its fleet comprised by 34 satellites, Eutelsat covers Europe, the Middle East, Africa, Asia- Pacific and the Americas. As of June 30, 2013, the company's last twelve months revenues amounted to about EUR 1,284 million. Moody's adjusted EBITDA for the same period was EUR 1,020 million (79.5% margin). The principal methodology used in this rating was the Global Communications Infrastructure Rating Methodology published in June 2011. TENEDORA NEMAK: Fitch Hikes Issuer Default Rating to 'BB' --------------------------------------------------------- Fitch Ratings has upgraded Tenedora Nemak, S.A. de C.V.'s (Nemak) ratings as follows: -- Foreign currency Issuer Default Rating (IDR) to 'BB' from 'BB-'; -- Local currency IDR to 'BB' from 'BB-'; -- Long-term national scale rating to 'A(mex)' from 'A-(mex)'; -- USD500 million senior unsecured notes due 2023 to 'BB' from 'BB-'; -- MXN3,500 million Local Certificados Bursatiles due 2017 to 'AA-(mex)' from 'A+(mex)'. The Rating Outlook is Stable. The ratings upgrade reflects Nemak's strengthened credit profile, its strong business position as a large Tier-1 supplier of aluminum components, increased size, regional and product- portfolio diversification, and reduced concentration of Detroit three original equipment manufacturers (OEMs). In the last five years, Nemak has doubled its revenue and EBITDA, maintained relatively stable debt levels and improved its working capital cycle considerably, and as result its credit metrics have strengthened significantly. In addition, the company has shown an ability to generate cash flow consistently, even with adverse economic conditions. Fitch expects that Nemak will continue to show positive momentum in revenues and EBITDA as a result of continued recovery in the U.S and an improved outlook for automobile demand in Europe, and estimates that by the end of 2014 Nemak's gross leverage will be at or below 2.4x. Also considered in the ratings is Nemak's geographic diversification of cash flows and its good liquidity position. The ratings are tempered by cyclicality of the automotive industry and by the company's still large concentration in North America as well as to some OEMs. The rating of the Certificados Bursatiles issuance takes into account the partial guarantee granted by Bancomext equivalent to 29% of the principal amount and 100% of the first interest payment in case of anticipated or scheduled maturity. Fitch believes that a Partial Credit Guarantee (PCG) can reduce loss severity given default and uplifts the guaranteed issuance's rating by some notches above the issuer's stand-alone rating. The overall recovery estimate considering the execution of the guarantee and the proceeds from company liquidation determine the number of notches for the uplift. Key Rating Drivers Strong Global Business Position Nemak's ratings reflect the company's strong position in high-tech aluminum components for the automotive industry in North American, South American and European markets; its presence in high-growth regions, such as Asia and its high percentage of installed capacity in low-costs countries. The ratings also reflect Nemak's long-term customer relationships, and its position as an essential supplier for Detroit three OEMs and in several of the largest global engine platforms. Geographical Diversification Will Likely Strengthen Operating Results The company's expansion in Europe, South America and Asia -- through organic growth and the acquisitions made in 2007 -- increases its geographical diversification, scale and ties to manufacturers. Fitch believes, these investments will continue to improve Nemak's revenue and cash flow generating ability. In Fitch's view, auto sales in Europe are likely to bottom out in 2014 and to rebound moderately throughout the year. In addition, the company's presence in China and its recently announced plans to expand operations in Russia, provide attractive growth opportunities and diversification. In the U.S., Fitch expects Nemak to benefit from projected low-single digit light vehicle sales growth. Higher Volumes and Favorable Pricing Trends Support Results During the past four years, Nemak's volumes, revenues and EBITDA generation have grown consistently as a result of new programs awarded with OEMs in America, Europe and Asia, along with increased market share of American OEMs. Nemak's results have also been driven by higher consumer confidence, in conjunction with a better sales mix, improved productivity and higher fixed costs absorption, as well as by the incorporation of the JL French operations acquired in 2012. Fitch estimates, Nemak's 2013 EBITDA above USD600 million compared to the USD309 million that the company reported in 2008, before the global financial crisis. Improved Leverage Fitch expects year-end 2013 gross leverage including parent company loans to be 2.5x and to strengthen below 2.4x by 2014. In Fitch's opinion, parent loans provided flexibility to service and amortize its debt. These loans are subordinated by contract from the rest of Nemak's senior debt and amortize pro rata with senior creditors. During the past four years, Nemak's leverage metrics have improved significantly as a result of the company's larger scale and increased EBITDA generation. Fitch expects neutral to slightly negative free cash flow (FCF) as a result of higher capex related to the construction of the company's new plant in Russia. Fitch's FCF estimate also considers that dividend payments will not exceed USD70 million in 2014. During the last 12 months to Sept. 30, 2013, Nemak generated USD207 million in FCF and total debt as of the third quarter of 2013 was USD1.4 billion. Adequate Liquidity and Extended Debt Maturity Profile As of Sept. 30, 2013, the company's short-term debt was USD247 million and cash balances were USD86 million. The company maintains good access to bank loans and debt capital markets, which in conjunction with cash balances, FCF generation and available committed revolving credit lines of approximately USD190 million maturing in 2015 and 2016, Fitch believes, will be sufficient to face short-term debt maturities. In February 2013, Nemak issued USD500 million of 2023 senior unsecured notes and used the proceeds to refinance existing bank debt with shorter maturity. RATING SENSITIVITY: Future developments that may, individually or collectively, lead to a negative rating action include, a material decline in volumes that leads to a reduction in EBITDA resulting in higher leverage ratios for a sustained period of time could pressure the ratings. In addition, a material deterioration in FCF could also pressure the ratings. Positive rating actions seem limited in the medium term given this upgrade. However, significant strengthening in EBITDA generation and consistent positive FCF generation resulting in improvement of leverage levels across the cycle could have positive implications for credit quality. ==================== P U E R T O R I C O ==================== AES PUERTO RICO: Moody's Cuts Rating on $194MM Bonds to Ba2 ----------------------------------------------------------- Moody's Investors Service downgraded the rating of approximately $194 million of secured bonds issued by the Puerto Rico Industrial, Tourist, Educational, Medical, and Environmental Control Facilities Financing Authority on behalf of AES Puerto Rico L.P (AES PR) to Ba2 from Ba1 and revised the outlook to negative. The rating action is driven by Moody's recent rating downgrade of Puerto Rico Electric Power Authority (PREPA: Ba2, negative) revenue bonds. Ratings Rationale AES PR's revenues are entirely dependent upon PREPA which in turn is heavily dependent on the economic health of Puerto Rico. On February 7th, Moody's downgraded the ratings of both these entities to Ba2 with a negative outlook. The rating actions reflected continued weakness in the economy of Puerto Rico which Moody's expect will weigh heavily on PREPA's ability to meet numerous important initiatives or to improve its weak credit metrics and liquidity position. Although Moody's recognize the strategic importance of the project to PREPA as a source of fuel diversity and relatively low-cost base-load power coupled with the priority of PREPA's contractual payments to AES PR as an operating expense, ultimately the financial strength of AES PR is dependent upon the financial health of its off-taker and its ability to make timely payments. AES PR's own operational and financial performance continues to be generally consistent with our expectations; however, the amount and timing of payments from PREPA continue to be somewhat erratic, periodically impacting cash flow metrics. For the twelve months ending November 2013, AES PR calculated a cash based debt service coverage ratio (DSCR) of 1.12x -- this ratio includes the impact of a one-time charge for higher legal expenses and the receipt of a PREPA payment four days after the end of the reporting period. Adding back the delayed payment, the ratio would have been 1.26x; further adding back the one-time charge brings the ratio to approximately 1.31x. For the twelve months ending September 2013 Moody's calculate a DSCR of about 1.40x. Going forward, on the basis of earned revenue, Moody's expect AES PR should be able to demonstrate DSCR's that are above 1.30x; for the twelve months ending November 2014, AES projects a cash based DSCR of about 1.26x. The negative outlook for AES PR is consistent with the negative outlook for PREPA and reflects the potential for the rating to move downward in the event the Ba2 rating of PREPA was to be downgraded. Downward pressure on the rating could also develop if the project were to experience prolonged operating difficulties which result in reductions to PREPA's capacity payments or if increases in unrecovered operating and/or capital costs cause debt service coverage ratios to fall below 1.20x for an extended period. In light of the negative outlook, the rating is not likely to revised upward over the near-to-medium term and is currently upwardly constrained by the Ba2 rating and negative outlook of PREPA. In the event the rating outlook at PREPA stabilized, the outlook for AES PR would also likely be revised to stable. Longer term, upward pressure on the rating could develop if the rating of PREPA were to be revised upward and if the project is able to demonstrate debt service coverage ratios above 1.3x on a sustainable basis. AES PR, an indirect wholly owned subsidiary of AES Corporation (AES: Ba3, stable), owns and operates a 454 megawatt (MW) coal- fired cogeneration facility located on the southeastern coast of Puerto Rico. The project sells all of its firm energy and capacity pursuant to a 25-year power purchase agreement to the PREPA, a public corporation and governmental agency of the Commonwealth of Puerto Rico. The project began operating in 2002. The principal methodology used in this rating was the Power Generation Projects published in December 2012. UNIV. OF PUERTO RICO: Moody's Cuts System Revenue Bonds to Ba3 -------------------------------------------------------------- Moody's Investors Service has downgraded the University of Puerto Rico's University System Revenue Bonds to Ba3 from Ba1 and Educational Facilities Revenue Bonds, 2000 Series A issued through AFICA to B1 from Ba2. The rating differential reflects the subordinate pledge and lease structure of the 2000 Series A bonds. The rating action affects $561 million of rated debt. The outlook is negative. Summary Rating Rationale The downgrade of the University of Puerto Rico's bonds follows the downgrade of the Commonwealth of Puerto Rico and the Government Development Bank (GDB) to Ba2 from Baa3. The outlook is negative. Driving the two-notch downgrade of the University of Puerto Rico (UPR) is its extraordinarily high reliance on the commonwealth for operating revenue (67% of revenues) and for governance coupled with its reliance on GDB for liquidity and financial management support. The university has weak liquidity and limited ability to grow other revenue sources, conditions that Moody's expect to continue given generally stagnant enrollment and historic resistance to tuition increases. The rating action is parallel to the 2 notch downgrade of the commonwealth's appropriation-backed debt and reflected the high reliance of the university system on commonwealth funding relative to the commonwealth's other government owned enterprises. The Ba3 rating reflects ongoing enrollment pressures, exposure to Pell Grant reductions, the need for ongoing capital and infrastructure investment and significant pension and OPEB liabilities. It also reflects susceptibility to possible reduction in federal funding and/or reductions or delays in operating appropriations. The rating favorably incorporates University of Puerto Rico's role as the commonwealth's only public higher education institution and an essential contributor to the commonwealth's economic activity through its academic, medical and research programs. All debt is fixed rate and amortizing and there are no immediate debt plans. Further, debt service coverage from pledged revenues supports the rating. Challenges University of Puerto Rico is highly reliant on commonwealth operating support which represents 66.9% of total operating revenues (compared to the public university median of 25.9% in fiscal year (FY) 2012) and that dependence is projected to increase. Liquidity is weak with only $99 million of unrestricted monthly liquidity or 32 monthly days for FY 2012. The university has relied on the Government Development Bank for liquidity and financial management support. No additional financial support has been provided during the past two years, although the GDB permitted conversion of a previous working capital revolving facility to a ten-year term loan. The university owns and operates Servicios Medicos Universitarios (SMU), its academic medical center with a 55% Medicaid payor share that produced substantial operating losses and reported a $20.4 million accumulated deficit at June 30, 2012. In addition to hospital patient care revenue, 10% of the university's operating revenues are derived from patient care. Enrollment has been stagnant, with fall 2012 enrollment of over 54,000 full-time equivalents (FTEs) down from prior years. Enrollment growth may prove challenging given the large outmigration of younger professionals and smaller high school graduating classes. The university is subject to political changes that can impact operations and cash flow. Following the governor's inauguration in 2013, he replaced the university's Board of Trustees with a new, smaller governing board. The president of the university was also replaced. Two-thirds of university students receive Pell Grants. As such, the university is exposed to possible reductions in Pell Grant awards, which amounted to $174 million for the university in FY 2012. *The rising unfunded pension and OPEB liabilities -- $197 million and $1.58 billion, respectively, for FY 2012 -- will exert continued funding pressure from operating cash flow. Strengths The university has a key role as Puerto Rico's public university system, enrolling a significant share of commonwealth high school graduates from both public and private high schools. The commonwealth's annual appropriations are legislatively mandated as a percentage of general fund revenues. University operations produced improved cash flow, with a 10.8% operating cash flow margin that is up from 4.4% in FY 2010. The University of Puerto Rico is a major research site in the commonwealth. The National Science Foundation lifted its suspension of research funding at the Central Administration and Mayaguez campuses in November 2013. SMU generated operating cash flow margins of 10.0% and 10.7% for FY 2011 and FY 2012, respectively, following a negative 1.5% for FY 2009 (and weaker results prior to FY 2009) that resulted in a "Going Concern" note in SMU's FY 2010 statements. Outlook The negative outlook reflects both the commonwealth's negative outlook and concerns about pressures on enrollment and Pledged Revenues, failure to grow balance sheet liquidity and uncertainty about ability to maintain positive hospital operating performance. What Could Make The Rating Go Up (Return To Stable) Absent a sustained and material improvement in the commonwealth economy, a rating upgrade is not likely. What Could Make The Rating Go Down Further downgrade of the University of Puerto Rico could result from credit deterioration of the Commonwealth of Puerto Rico. A downgrade could also result if there were a notable weakening in fundamental elements of the university's profile such as enrollment or tuition, or contraction in liquidity or deterioration in hospital operations. Moreover, any adverse change in commonwealth support could negatively impact the rating. Rating Methodology The principal methodology used in this rating was U.S. Not-for- Profit Private and Public Higher Education published in August 2011. *********** 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. 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