/raid1/www/Hosts/bankrupt/TCRLA

/raid1/www/Hosts/bankrupt/TCRLA_Public/140314.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, March 14, 2014, Vol. 15, No. 52 Headlines B R A Z I L RB CAPITAL: Moody's Affirms (P)Ba1 Global Scale Rating on Certs. C A Y M A N I S L A N D S ARVIN CAYMAN ISLANDS: Shareholders' Final Meeting Set for April 24 EMERAUDE HEDGE: Shareholders' Final Meeting Set for March 19 GOLDEN AMERICAS: Fitch Affirms, Withdraws 'BB' FC IDR LUFT 476: Shareholder to Receive Wind-Up Report on April 4 OLYMPIA GLOBAL: Shareholders' Final Meeting Set for April 3 OLYMPIA GLOBAL MASTER: Shareholders' Final Meeting Set for April 3 OLYMPIA LONG: Shareholders' Final Meeting Set for April 3 OLYMPIA LONG MASTER: Shareholders' Final Meeting Set for April 3 OLYMPIA MARKET: Shareholders' Final Meeting Set for April 3 OLYMPIA MARKET MASTER: Shareholders' Final Meeting Set for April 3 D O M I N I C A N R E P U B L I C DOMINICAN REPUBLIC: Low Tax Pressure, Energy Sector Woes Worry IMF XSTRATA PLC: Arbitration Court Deals Nickel Mine a Major Setback E L S A L V A D O R AES EL SALVADOR TRUST: Fitch Affirms 'BB' IDR; Outlook Negative J A M A I C A JAMAICA: Public Debt Jumps to Record Level NATIONAL COMMERCIAL BANK: Admits to Increasing Fees M E X I C O JAVER S.A.P.I.: Fitch Affirms 'B' Issuer Default Rating - - - - - =========== B R A Z I L =========== RB CAPITAL: Moody's Affirms (P)Ba1 Global Scale Rating on Certs. ---------------------------------------------------------------- Moody's America Latina has affirmed the provisional ratings of (P)Aa2.br (National Scale, Local Currency) and of (P)Ba1 (Global Scale, Local Currency) assigned to the 97th, 98th and 99th Series of real estate certificates to be issued by RB Capital Companhia de Securitizacao S.A. (RB Capital, the Issuer or the Securitizadora). Issuer / Securitizadora: RB Capital Companhia de Securitiza‡ao S.A. 97th, 98th and 99th Series for a total amount of BRL 403,200,000 in CRIs; ratings affirmed at (P)Aa2.br / (P)Ba1 Ratings Rationale The rating affirmation follows the completion of the bookbuilding process. The transaction has not closed yet. The series issuances will be issued as follows: 97th Series -- R$ 209,700,000 with a coupon of IPCA + 6.34%, maturing on March 7, 2024 98th Series -- R$ 70,800,000 with a coupon of IPCA + 6.71%, maturing on March 6, 2026 99th Series -- R$ 122,700,000 with a coupon of IPCA + 7.04%, maturing on March 7, 2029 The transaction rating is based on the rating of BR Malls Participacoes S.A. (BR Malls). The ratings of the certificates are based, among others, on the following factors: The ability and willingness of BR Malls, which has a senior unsecured rating of Aa2.br (Brazilian National Scale) and Ba1 (Global Scale, Local Currency), to make payments due under the guarantee. The irrevocable and unconditional guarantee issued by BR Malls in favor of the Issuer and consequently to the investors of the CRI, obligating itself as guarantor and principal payer, together with the tenants, for full and timely payments of the real estate credits ultimately backing the CRI; The structure of the transaction whereby payments under the guaranteed Real Estate Credits match payments under the CRI; Legal and structural features, including (i) mandatory repurchase events defined in transaction documents which obligate the Sellers (Ecisa, Nattca and Ecisa Engenharia, fully controlled by BR Malls) to repurchase automatically any outstanding credit rights and (ii) non-automatic and automatic early redemption events. The assigned ratings reflect the guarantee provided by BR Malls S.A and are based on its ability to make payments under the guarantee, as reflected by its senior unsecured rating. Any future change in the senior unsecured rating of BR Malls will lead to a change in the ratings of the CRI. In assigning the ratings, Moody's has not given credit to the pledged real estate backing the certificates, or the pledged real estate receivables (pledged tenancy revenues). The CRI are backed by real estate credits rights derived from two shopping malls located in Brazil ("Real Estate Credits") and benefit from: (i) a guarantee (fian‡a) provided by BR Malls Participacoes S.A. ("BR Malls") on the Real Estate Credits, (ii) a pledge of the Real Estate Assets (aliena‡ao fiduciaria) in favor of the issuer, (iii) a pledge of cash flows derived from the shopping mall operation, including the parking lot (cessao fiduciaria), and (iv) a pledge of the escrow account where rental payments are deposited (cessao fiduciaria). BR Malls is the largest owner and manager of shopping centers in Brazil. The company has grown significantly to BRL18.1 billion in gross assets at 3Q13 from BRL 2.8 billion at YE07. BR Malls currently owns interests in 51 malls plus it has five projects in development. The malls are geographically diversified across the country and diversified across consumer income groups. Another credit strength is the portfolio's high occupancy of 97.6% and its solid adjusted EBITDA margins at 80.3% as of 3Q13. The principal methodology used in this rating was "Rating Transactions Based on the Credit Substitution Approach: Letter of Credit backed, Insured and Guaranteed Debts" published in March 2013. Factors that would lead to an upgrade or downgrade of the rating: Any future changes in the senior unsecured rating of BR Malls Participacoes S.A. will lead to a change in the CRI's ratings. ========================== C A Y M A N I S L A N D S ========================== ARVIN CAYMAN ISLANDS: Shareholders' Final Meeting Set for April 24 ------------------------------------------------------------------ The shareholders of Arvin Cayman Islands, Ltd. will hold their final meeting on April 24, 2014, at 10:00 a.m., to receive the liquidator's report on the company's wind-up proceedings and property disposal. The company's liquidator is: Paget-Brown Trust Company Ltd. c/o Ica Eden Telephone: (345)-949-5122 Facsimile: (345)-949-7920 P.O. Box 1111 Grand Cayman KY1-1102 Cayman Islands EMERAUDE HEDGE: Shareholders' Final Meeting Set for March 19 ------------------------------------------------------------ The shareholders of Emeraude Hedge Fund will hold their final meeting on March 19, 2014, at 10:00 a.m., to receive the liquidator's report on the company's wind-up proceedings and property disposal. The company's liquidator is: Ricardo Carneiro Monteiro Telephone: +1 (345) 949 8599 Facsimile: +1 (345) 949 4451 Harbour Place, 4th Floor 103 South Church Street P.O. Box 10240 Grand Cayman KY1-1002 Cayman Islands GOLDEN AMERICAS: Fitch Affirms, Withdraws 'BB' FC IDR ----------------------------------------------------- Fitch Ratings has affirmed and withdrawn the following ratings of Termocandelaria Power Ltd. (Termocandelaria) and Golden Americas Ltd. (Golden Americas): Termocandelaria: -- Foreign Currency (FC) and Local Currency (LC) Issuer Default Rating (IDR) at 'BB+'; Outlook Stable; -- Senior Secured Notes at 'BB+'. Golden Americas: -- FC IDR at 'BB'; Outlook Stable -- Senior Secured Notes at 'BB'. Key Ratings Drivers Affirm and Withdraw: Fitch has simultaneously affirmed and withdrawn its ratings as the issuers prepaid their long-term debt and do not have long-term debt outstanding, and due to a lack of market interest. The affirmation for Termocandelaria's ratings reflects the company's strong credit metrics characterized by low leverage levels, stable and predictable cash flow generation, a somewhat diversified asset base and relatively strong market share position in Colombia's thermoelectric generation capacity. Also factored into the ratings are the company's relatively modest liquidity levels and moderate exposure to credit availability to finance potential working capital needs. Termocandelaria's ratings reflect the combined financial and operational profile of its two subsidiaries - Termocandela and TEBSA, in which the company holds a 100% and 57% participation, respectively. LUFT 476: Shareholder to Receive Wind-Up Report on April 4 ---------------------------------------------------------- The shareholder of Luft 476 Limited will receive on April 4, 2014, at 8:30 a.m., the liquidator's report on the company's wind-up proceedings and property disposal. The company's liquidator is: Intertrust SPV (Cayman) Limited 190 Elgin AvenueGeorge Town Grand Cayman KY1-9005 Cayman Islands c/o Kim Charaman/Jennifer Chailler Telephone: (345) 943-3100 OLYMPIA GLOBAL: Shareholders' Final Meeting Set for April 3 ----------------------------------------------------------- The shareholders of Olympia Global Macro Fund 1 Limited will hold their final meeting on April 3, 2014, at 11:45 a.m., to receive the liquidator's report on the company's wind-up proceedings and property disposal. The company's liquidator is: Newington, Ltd. c/o J. Andrew Murray Telephone: 345-949-9710 P.O. Box 2075 Grand Cayman KY1-1105 Cayman Islands OLYMPIA GLOBAL MASTER: Shareholders' Final Meeting Set for April 3 ------------------------------------------------------------------ The shareholders of Olympia Global Macro Master Fund Limited will hold their final meeting on April 3, 2014, 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: Newington, Ltd. c/o J. Andrew Murray Telephone: 345-949-9710 P.O. Box 2075 Grand Cayman KY1-1105 Cayman Islands OLYMPIA LONG: Shareholders' Final Meeting Set for April 3 --------------------------------------------------------- The shareholders of Olympia Long Short Equity Fund 1 Limited will hold their final meeting on April 3, 2014, at 1:15 p.m., to receive the liquidator's report on the company's wind-up proceedings and property disposal. The company's liquidator is: Newington, Ltd. c/o J. Andrew Murray Telephone: 345-949-9710 P.O. Box 2075 Grand Cayman KY1-1105 Cayman Islands OLYMPIA LONG MASTER: Shareholders' Final Meeting Set for April 3 ---------------------------------------------------------------- The shareholders of Olympia Long Short Equity Master Fund Limited will hold their final meeting on April 3, 2014, at 12:30 p.m., to receive the liquidator's report on the company's wind-up proceedings and property disposal. The company's liquidator is: Newington, Ltd. c/o J. Andrew Murray Telephone: 345-949-9710 P.O. Box 2075 Grand Cayman KY1-1105 Cayman Islands OLYMPIA MARKET: Shareholders' Final Meeting Set for April 3 ----------------------------------------------------------- The shareholders of Olympia Market Neutral Fund 1 Limited will hold their final meeting on April 3, 2014, at 2:45 p.m., to receive the liquidator's report on the company's wind-up proceedings and property disposal. The company's liquidator is: Newington, Ltd. c/o J. Andrew Murray Telephone: 345-949-9710 P.O. Box 2075 Grand Cayman KY1-1105 Cayman Islands OLYMPIA MARKET MASTER: Shareholders' Final Meeting Set for April 3 ------------------------------------------------------------------ The shareholders of Olympia Market Neutral Master Fund Limited will hold their final meeting on April 3, 2014, at 2:00 p.m., to receive the liquidator's report on the company's wind-up proceedings and property disposal. The company's liquidator is: Newington, Ltd. c/o J. Andrew Murray Telephone: 345-949-9710 P.O. Box 2075 Grand Cayman KY1-1105 Cayman Islands =================================== D O M I N I C A N R E P U B L I C =================================== DOMINICAN REPUBLIC: Low Tax Pressure, Energy Sector Woes Worry IMF ------------------------------------------------------------------ The Dominican Today reports that the International Monetary Fund has expressed concern with the electricity sector's spiraling deficit and the low tax pressure in Dominican Republic's revenue system. A source quoted by listin.com.do said the IMF mission visiting the country as part of the annual review noted that Dominican Republic's tax pressure is low because of the numerous laws that include tax breaks, which in their view should be forged into a single legislation, according to The Dominican Today. The report notes that in the process to evaluate the economy, whose results would be disclosed in a statement issued when they depart, the Fund's mission will address the public debt's sustainability, the quasi fiscal deficit and the exchange rate. It was learned that the Dominican economy's performance has been called positive and the government's economic policies "head in the direction to address concerns thus far," the report relates. XSTRATA PLC: Arbitration Court Deals Nickel Mine a Major Setback ---------------------------------------------------------------- Dominican Today reports that the Superior Arbitration Court (TSA) ordered all government agencies to immediate halt any effort or authorization involving mining at Loma Miranda. It also set the hearing on an injunction sought by the plaintiffs against the Senate, the Environment Ministry and the Mining Agency for April 2, to halt the exploitation of Loma Miranda, and subpoenaed Xstrata Nickel Falcondo to appear in court, according to Dominican Today. The report notes that the Justice and Transparency Foundation (FJT), which filed the request for the injunction, called the Court ruling respectful of the constitutional right to a healthy environment. The report notes that FJT lawyers Jose Marte Piantini, Ricardo de la Cruz and Consuelo Despradel said it's the third time that a court upholds the ban on exploiting Loma Miranda, and that a company's profits cannot be placed above Dominican Republic's interests. "We have no doubt that the Court will assume this national desire to protect Loma Miranda from the clutches of international capitalism as its own," the report quoted FJT President Trajano Potentini, who noted the support by opposition PRD party leader Luis Abinader, the Dominican Party for Change and the Socialist Green Party (PASOVE), as saying. As reported in the Troubled Company Reporter-Latin America on Jan. 22, 2014, Dominican Today said that Chief Executive Officer of Xstrata PLC's Falcondo reiterated that the company's presence in the country depends on a long term mining, with cheap electricity available, to produce and compete in world markets. Mr. Soares said they pin their hopes of extracting nickel at the controversial site of Loma Miranda, between La Vega and Bonao (central), for which they expect to get the mining permit, according to Dominican Today. But environmental and civil society groups could keep them from carrying out the project, after the Chamber of Deputies agreed with the protesters and passed a bill which declares Loma Miranda a protected area, arguing that much of the Cibao region's (north) water depends on it, the report related. Xstrata PLC is the operator of Falconbridge Dominicana, C. por A. ("Falcondo") with an 85.26% ownership. Falcondo is a ferronickel surface mining operation located in the Dominican Republic with operations dating since 1971. Headquartered in Zug, Switzerland, Xstrata PLC is a major producer of coal, copper, nickel, primary vanadium and zinc and the largest producer of ferrochrome. ==================== E L S A L V A D O R ==================== AES EL SALVADOR TRUST: Fitch Affirms 'BB' IDR; Outlook Negative --------------------------------------------------------------- Fitch Ratings has affirmed AES El Salvador Trust II's foreign and local currency Issuer Default Ratings (IDRs) at 'BB'. The rating action applies to the company's USD310 million senior unsecured notes due 2023. The Rating Outlook is Negative. Concurrently, Fitch affirmed Compania de Alumbrado Electrico de San Salvador, SA de C.V. y Subsidiarias (CAESS) and Empresa Electrica de Oriente, SA de C.V. y Subsidiarias (EEO) at 'A+(slv)'. AES El Salvador Trust II (AES El Salvador) is a special-purpose vehicle (SPV) located in Panama that was created to issue USD310 million of notes on behalf of AES El Salvador Group. AES El Salvador's ratings are based on the combined credit strength of the operating companies that guarantee its debt and reflect the group's strong market position, low business risk profile, and its predictable cash flow generation. The ratings also reflect the exposure to high regulatory risk and to sovereign risk through subsidies. A significant portion of AES El Salvador's cash flow generation comes from government subsidies, which exposes the company to El Salvador's creditworthiness and payment ability. The Negative Outlook reflects the Negative Outlook on El Salvador's 'BB-' sovereign rating. Key Rating Drivers Large Market Position And Low Business Risk AES El Salvador's low business risk results from its stable customer base and predictable cash flows. Although distribution service territories are not exclusive and distributors are free to compete for customers, the risk of new competition is low given that distribution companies possess significant economies of scale that make it inefficient for more than one company to operate in any particular geographic area. The ratings factor in the strong market position of AES El Salvador as the largest electric distribution group in the country. The group serves approximately 1.3 million customers and covers 80% of El Salvador's electricity distribution area. The group supplied 63% of the total energy demand in the country during 2013 (66% in 2012). The company's operations are considered efficient compared with other distribution companies in the region. In 2013, non-technical losses reduced to 1.73% from 2.04% in 2012. This bodes well for the company's credit quality as it limits its exposure to costs that are not completely recognized through the tariffs. High Exposure To Government Intervention The ratings incorporate AES El Salvador's high exposure to regulatory risk and receipt of government subsidies. The Salvadorian government currently subsidizes residential users with a monthly consumption of 99 kilowatt hours (kWh) or less. Additionally, the government implemented an extraordinary subsidy for users with consumption below 200 kWh. The permanence or modification of this extraordinary subsidy is reviewed quarterly by the government. The state owned utility company, Comision Ejecutiva Hidroelectrica del Rio Lempa - (CEL), partly finances these subsidies. In 2013, subsidies received by AES El Salvador totaled USD 136.9 million, representing approximately 16% of its consolidated revenues (USD135.2 million and 17%, respectively in 2012). Approximately 87% of the company's residential customers received subsidies in the last year. Although the government has been paying subsidies in a timely manner, payment delays or a significant extension of the collection period may impact AES El Salvador's financial profile and pressure the ratings. Strengthening Credit Fundamentals Supported By Tariff Structure The company's credit profile is supported by its stable and predictable cash flow generation and strengthening credit metrics as result of higher EBITDA levels as outcome of the tariff reset for the 2013-2017 period. The tariff reset was determined as per the new methodology that considers real costs of the companies based on El Salvador distribution grid instead of an optimized company model as it was considered in the past methodology. Fitch considers that although the new methodology is positive for the issuer, it continues to be exposed to government intervention. In 2013, the issuer recorded consolidated EBITDA and EBITDA margin of USD86 million and 10%, respectively (vs. USD 69.7 million and 8.2% in 2012). Leverage, measure as total debt / EBITDA, reduced to 3.5x in December 2013 from 4.5x in Dec. 2012. Fitch expects the company will be able to maintain a similar leverage ratio in the next years, absent of new debt or changes in the operating environment. Adequate Liquidity AES El Salvador's liquidity is supported by its cash on hand, which as of year-end 2013 was approximately USD32.7 million, and USD32.7 million short-term bank credit facilities to buy electricity from generators. Liquidity could be affected in case of higher energy prices for final users that could lead to higher ageing account receivables. Should distribution companies be forced to issue additional debt to fund their working capital requirements, while they continue distributing dividends, their credit quality could deteriorate. Ratings Sensitivity -- AES El Salvador's ratings could be negatively affected by any combination of the following factors: further sovereign downgrades; weakening of credit metrics; deterioration of the operating environment resulting from shortages of electricity supply or further political or regulatory intervention that negatively affects the company's financial performance; -- AES El Salvador's ratings could be positively affected by a sustainable leverage reduction; regulatory stability; and improving macroeconomic conditions in El Salvador. ============= J A M A I C A ============= JAMAICA: Public Debt Jumps to Record Level ------------------------------------------ RJR News reports that the government said the public debt jumped to a record 1 trillion 938 billion dollars[sic] at the end of last year. The increase was due to higher borrowings by the government as well as the impact of the sliding dollar on the external portion of the debt, according to RJR News. The report notes that the currency depreciation caused the country's external debt to rise almost eight percent. NATIONAL COMMERCIAL BANK: Admits to Increasing Fees --------------------------------------------------- RJR News reports that National Commercial Bank has admitted for the first time that it increased fees in the aftermath of losses it incurred from the government's debt exchanges in 2010 and 2012. Patrick Hylton, Managing Director of NCB, answered questions on the matter when he appeared before the Economic and Production Committee of Parliament, according to RJR News. Mr. Hylton, the report notes, added however that the fee increase was not significant in relation to the losses the bank suffered due to the Jamaica Debt Exchange or the National Debt Exchange. About National Commercial Bank Headquartered in Kingston, Jamaica, National Commercial Bank Jamaica Limited -- http://www.jncb.com/-- together with its subsidiaries, provides various banking and financial products and services primarily in Jamaica. * * * As reported in the Troubled Company Reporter-Latin America on Oct. 1, 2013, Standard & Poor's Ratings Services raised its issuer credit ratings on National Commercial Bank Jamaica Ltd. (NCBJ) to 'B-/B' from 'CCC+/C'. The upgrade follows Jamaica's entrance into an IMF (International Monetary Fund) program, which along with additional external funding from other multilateral lenders, improved the country's external liquidity and bolstered investor confidence. S&P removed the ratings on the bank from the CreditWatch negative and assigned a stable outlook. NCBJ's 'b' stand-alone credit profile (SACP) remains unchanged. =========== M E X I C O =========== JAVER S.A.P.I.: Fitch Affirms 'B' Issuer Default Rating ------------------------------------------------------- Fitch Ratings has affirmed Servicios Corporativos Javer, S.A.P.I. de C.V.'s (Javer) ratings as follows: -- Foreign currency Issuer Default Rating (IDR) at 'B'; -- Local currency IDR at 'B'; -- USD320.25 million senior unsecured notes due 2021 at 'B+/RR3'; -- USD6.33 million senior unsecured notes due 2014 at 'B+/RR3'. The Rating Outlook is Stable. Javer's 'B' ratings reflect a consistent business strategy that is oriented to the affiliated low-income segment, with Infonavit as its main mortgage provider. This strategy has allowed Javer to collect its receivables and manage its working capital needs. The company funding strategy of relying primarily upon long-term public debt with almost no secured debt is also unique for the industry and has led to an 'RR3' rating of its public bonds. Further considered in the company's ratings are its solid cash position, focus on free cash flow (FCF) generation and manageable debt amortization schedule. In Fitch's view, Javer's ratings are constrained by its limited geographic diversification, high financial gross leverage levels, low interest coverage levels and declining margins in the last two years. Key Rating Drivers: Higher Leverage and Absolute Debt Levels: The ratings are limited by the growing trend in the company's gross leverage during past years driven by increasing levels of debt. According to Fitch's calculations Javer's gross leverage was 5.4x as of Dec. 31, 2013, which compares negatively with 4.9x in 2012 and 4.3x in 2011, and with expectations previously incorporated in the ratings. Javer's EBITDA for 2013 was MXN795 million, a 9.3% increase when compared with MXN728 million registered in 2012. Total debt increased to MXN4,272million at the end of 2013 from MXN3,590 at the end of 2012, due to the issuance of USD50 million in senior notes during 1Q'13 which were intended to be used for acquisitions that did not occur during 2013. The rating affirmation incorporates Javer's capacity to maintain focus on FCF generation, and improving its cash position coupled with its manageable debt maturity profile. Fitch estimates that Javer's gross leverage will be around 5.0x and net leverage will be around 3.8x during 2014, and improve to 4.5x in 2015; deviations from these expectations could result in negative rating actions. Focus on FCF Expected to Continue in 2014: Positively factored into Javer's ratings is the company's ability to adjust its business strategy during 2013 to face the industry's challenging operating environment. During 2013, the company increased middle-income and residential housing production, reaching a total of 8,816 units sold in this segment at year end (50.7% of its total units during 2013); this represents an increase of 26% over the 6,998 middle-income and residential units sold in 2012. This strategy was put in place to overcome the lack of subsidies from the federal government in the first months of 2013, which in conjunction with the 145 unit decrease in total units sold, allowed the company to have slightly higher margins and maintain manageable working capital needs to generate a higher positive FCF during 2013 of MXN315 million, compared to the positive FCF of MXN98 million in 2012. FCF calculation considers cash flow from operations less interests paid less capital expenditures. Fitch expects the company's FCF to be negative in 2014, but return to positive in 2015 and 2016. Limited Geographic Diversification: Javer's limited geographic diversification constrains its ratings; around 83% in 2013 and 85% in 2012 of Javer's total revenue was generated in the states of Nuevo Leon and Jalisco. This concentration increases the company's dependence upon specific local and municipal governments to secure land and permits, and translates into exposure to individual market dynamics. The company accounts for 16.3% of mortgages granted by Infonavit in Nuevo Leon and 17.7% in Jalisco. This is somewhat mitigated through the company's long-term strategy to overweight the affiliated affordable entry-level segment with Infonavit as its main mortgage provider, because this segment usually presents more demand and government support programs in the form of subsidies. This strategy has allowed Javer to have a shorter working capital cycle. Low Refinance Risk: Javer has a manageable debt payment schedule with no material debt maturities during the next few years. Javer's cash position as of Dec. 31, 2013 was MXN1,309 million. This was an increase from MXN417 as of Dec. 31, 2012, due to the reopening of the notes during the 1Q'13. The company issued USD50 million to repay ViveICA's short-term debt, but the agreement to merge ICA's housing business with Javer was terminated, due to both parties' lack of agreement on conditions for closing the transaction. The company does not factor in any of its account receivables embedded in its cash position. Javer's debt of MXN4.3 billion consists primarily of its USD320.25 million (MXN4.1 billion) senior unsecured notes due in 2021. Javer's remaining debt balance consists of the USD6.33 million notes due in 2014 and capital leases. Debt payments due in 2014 and 2015 are approximately MXN111.7 million and MXN16.3 million, respectively. Declining Margins and Low Interest Coverage: Javer's EBITDA margins have declined during the last two years reaching 14.7% and 14.3% during 2013 and 2012, respectively, compared to the average of 21.2% during 2008-2011. This margin compression reflects deterioration in the business environment during 2012 and 2013 in terms of limited government-subsidy availability in the company's area of operations, as well as its strategic decision to increase the size of its labor force because of the expected merger with ViveICA; as the combination did not take place, a human resources downsizing translated to termination costs that increased Javer's SG&A in 2013. This situation is not expected to continue in 2014; the ratings incorporate the expectation that the company's EBITDA margin will remain at around 14.5% during 2014 as a result of Javer's strategy of increased production of affordable entry-level housing, which traditionally carries lower margins. Javer's interest coverage levels are low with ratios around 1.5x. According to Fitch's calculations, the funds from operations (FFO) interest coverage ratio was 1.4x at the end of 2013 and 1.1x at the end of 2012. EBITDA/gross interest expense was 1.5x at the end of 2013 and 1.4x at the end of 2012. Stable Business Position, Adequate Land Reserves: Javer was the second-largest supplier of Infonavit homes in the country at year end 2013. The company is also the largest supplier of Infonavit loans in the states of Nuevo Leon and Jalisco with a 16.3% and 17.7% market share, respectively. Javer's land reserves were equivalent to 94,061 homes as of Dec. 31, 2013, which represents about five years of production. Around 45% of Javer's land reserves are inside the urban perimeters established by the new Urban Development and Housing Policy and the rest are land reserves with infrastructure and/or housing already on them already authorized to operate as housing developments. The split of these reserves between owned land reserves and land reserves through land trust agreements is approximately 63%/37%. Javer's strategy is to invest approximately MXN500 million per year in land reserves replacement. Rating Sensitivities: A negative rating action could be triggered by further deterioration in the company's credit protection measures and cash position due to weak operational results and/or capex levels substantially above expectations, deterioration in FCF generation driven by increasing working capital needs, and continued decline in EBITDA margins. Total debt-to-EBITDA consistently above 5.0x in 2014 and 4.5x in 2015 will also pressure Javer ratings. Conversely, a positive rating action could be triggered by a combination of the following factors: material improvement in FCF generation resulting in consistently positive FCF levels, stable operational performance, and significant strengthening in the company's leverage and interest coverage metrics. *********** 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. * * * End of Transmission * * *