/raid1/www/Hosts/bankrupt/TCRLA_Public/140602.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
L A T I N A M E R I C A
Monday, June 2, 2014, Vol. 15, No. 107
Headlines
A R G E N T I N A
ARGENTINA: Creditors Say Memo Shows Plan to Defy Courts
ARGENTINA: Paris Club Deal to Bring Investment, Kicillof Says
B R A Z I L
BANCO DO BRASIL: Plans Overseas Bond Issue
BANCO DO BRASIL: Moody's Rates Capital Securities 'Ba3(hyb)'
RB CAPITAL: Moody's Assigns Ba1 Rating to 97th, 98th, 99th CRI
C A Y M A N I S L A N D S
ASTRY LIMITED: Members' Final Meeting Set for June 23
BELMONT MANAGED: Members' Final Meeting Set for June 11
CAROFRED LIMITED: Members' Final Meeting Set for June 23
CUMULUS FAHRENHEIT: Member to Receive Wind-Up Report on July 4
HSBC ALPHA: Shareholder to Receive Wind-Up Report on June 18
HSBC EUROPEAN: Shareholder to Receive Wind-Up Report on June 18
KNO (CAYMAN ISLANDS): Members' Final Meeting Set for June 20
METHOD CREDIT: Shareholders' Final Meeting Set for June 20
PORTOLAN PILOT: Members' Final Meeting Set for June 11
ZAIS MORTGAGE: Shareholder to Receive Wind-Up Report on June 17
D O M I N I C A N R E P U B L I C
DOMINICAN REPUBLIC: Dominicans' Purchasing Power Shrinking
H A I T I
HAITI: IMF Concludes Staff Visit to Country
M E X I C O
ELEMENTIA S.A: Fitch Affirms LT Issuer Default Rating at 'BB+'
P E R U
GRUPO ACP: Fitch Withdraws 'B' LT Foreign Currency IDR
X X X X X X X X X
BOND PRICING: For the Week From May 26 to May 30, 2014
- - - - -
=================
A R G E N T I N A
=================
ARGENTINA: Creditors Say Memo Shows Plan to Defy Courts
-------------------------------------------------------
Bob Van Voris and Katia Porzecanski at Bloomberg News report that
a lawyer for holders of defaulted Argentine bonds told a judge
that a leaked legal memo may be "the smoking gun" showing the
South American nation plans to defy U.S. courts and default again
if the Supreme Court doesn't review its case.
Robert Cohen, a lawyer for Elliott Management Corp.'s NML Capital,
asked U.S. District Judge Thomas Griesa to find that Argentina
violated orders that it not seek to evade U.S. court jurisdiction,
and to demand the country inform the court within 72 hours what it
plans to do if the Supreme Court won't hear the case, according to
Bloomberg News.
"We need to know what those plans are in order to be able to take
steps to stop them by June 30, which is the next interest payment
on the exchange bonds," Mr. Cohen told Judge Griesa in the hearing
in Manhattan, Bloomberg News notes.
Bloomberg News discloses that Argentina is seeking to overturn
Judge Griesa's orders that it pay holders of its defaulted debt
when it makes payments to investors who agreed to a debt
restructuring in which they took exchange bonds at a discount of
as much as 75 percent. A decision by the Supreme Court not to
hear the appeal would leave Judge Griesa's orders in place,
Bloomberg News relates. The high court could act as soon as June
16.
'No Secret Plan'
"There's nothing surreptitious going on. There is no secret plan
to evade," Carmine Boccuzzi, a lawyer for Argentina, told Judge
Griesa, Bloomberg News relates. "We simply cannot pay everyone
across the board, and we point out that the result of that is a
very likely imminent default" if the Supreme Court doesn't agree
to review the case, Mr. Boccuzzi said, Bloomberg News adds.
Judge Griesa said he couldn't rule on NML's request on May 30.
NML's complaint to Judge Griesa was based on a memo dated May 2 to
Argentina's Economy Ministry containing legal advice from Mr.
Boccuzzi's firm, New York-based Cleary Gottlieb Steen & Hamilton
LLP, Bloomberg News notes.
A copy of the memo was posted on the Argentine website
Seprin.info. Mr. Boccuzzi told Judge Griesa the document was put
on the site by an "unauthorized" person.
Mr. Boccuzzi said the document is protected by attorney-client
privilege, declining to discuss its content, Bloomberg News
relates.
Bloomberg News notes that Mr. Cohen argued the memo isn't
privileged because it has been widely disseminated. The report
relays that Mr. Cohen also said it isn't protected because
"Argentina is using the legal advice it in pursuit of a fraud on
the court."
According to the memo, written in Spanish, Argentina wants to
continue paying its restructured debt, but the courts have put it
in a "terrible" position where, absent Supreme Court review, it
appears the country will be forced to default, Bloomberg News
notes.
Forced Default
"We believe that, barring revision by the Supreme Court of the
lower-court's ruling, the best option for the Republic is to
permit the Supreme Court to force a default and then immediately
restructure all of their external bonds such that their payment
mechanism and other related aspects stay outside the reach of the
American courts," Mr. Boccuzzi and two others wrote in the memo,
reports Bloomberg News.
Bloomberg News recalls that Argentina defaulted on a record $95
billion in foreign debt in 2001. Holders of more than 90 percent
of the defaulted bonds agreed to debt restructurings in 2005 and
2010. Many of the holdouts, including NML, sued for full
repayment. Argentina has consistently refused to pay on the
defaulted bonds, Bloomberg News notes.
Judge Griesa, who oversees suits against Argentina by holders of
its defaulted bonds, has criticized the country for rebuffing
court orders that it pay, Bloomberg News adds.
The case is NML Capital Ltd. v. Republic of Argentina, 08-cv-
06978, U.S. District Court, Southern District of New York
(Manhattan).
ARGENTINA: Paris Club Deal to Bring Investment, Kicillof Says
-------------------------------------------------------------
Charlie Devereux at Bloomberg News reports that Argentina's
agreement with the Paris Club to settle $9.7 billion of
outstanding debt will help attract foreign investment to the
country by lowering interest rates for financing, Economy Minister
Axel Kicillof said.
Companies from the 19 member countries of the Paris Club group of
creditors have found it difficult to obtain financing for
investment in Argentina because of the debt owed since a default
13 years ago, Mr. Kicillof said at a news conference in Buenos
Aires, according to Bloomberg News. The government will pay
arrears that amounted to $9.7 billion at the end of April over a
five- to seven-year period at a maximum interest rate of 3.8
percent, Mr. Kicillof said, Bloomberg News relates.
"Once we begin to pay the maturities, those agencies are going to
open the doors that were previously closed," Bloomberg News quoted
Mr. Kicillof as saying. "Companies that have been wanting to
import and export in Argentina have been paying very high rates,"
Mr. Kicillof said, Bloomberg News relates.
The accord means Argentina, locked out of international credit
markets since its record $95 billion default in 2001, has taken
another step toward normalizing relations with international
creditors, Bloomberg News notes. The agreement demonstrates
Argentina's willingness to resolve its debt issues, Mr. Kicillof
said, Bloomberg News adds.
The agreement should bring investment into the automobile sector
and infrastructure projects, Mr. Kicillof said while declining to
speculate on a timeframe, notes Bloomberg. In a recent meeting,
executives at Japanese Mitsubishi Corp (8058) told President
Cristina Fernandez de Kirchner that an accord with the Paris Club
would make financing easier, Mr. Kicillof said, Bloomberg News
relates.
Growth Potential
The company has businesses in Argentina involved in carbon, non-
ferrous metals, power and electrical systems and food and feed
additives among others, notes Bloomberg News.
The country's insistence on negotiating a settlement without
involvement of the International Monetary Fund will give Argentina
the chance to generate economic growth, Mr. Kicillof said,
Bloomberg News relates. As part of the settlement, Argentina
negotiated the lowest repayments in 2015 and 2017, years when it
has large capital and interest payments to make to holders of
restructured bonds from the default, Mr. Kicillof said, Bloomberg
News notes.
The country has a low debt-to-gross domestic product ratio that
doesn't justify the high interest rates demanded by the bond
market, Mr. Kicillof said, Bloomberg News relays. At times,
Argentine bond prices rise and fall depending on the
"schizophrenic psychology" of the bond market, notes the report.
Bloomberg News discloses that the extra yield, or spread,
investors demand to own Argentine bonds over U.S. Treasuries, at
8.32 percentage points, is the highest in emerging markets after
Venezuela.
"Prices depend on many factors, some with real fundamentals and
others using psychology of the market," Mr. Kicillof said,
Bloomberg News adds.
===========
B R A Z I L
===========
BANCO DO BRASIL: Plans Overseas Bond Issue
------------------------------------------
Rogerio Jelmayer at The Wall Street Journal reports that state-run
bank Banco do Brasil SA is planning a road show to measure
investor interest in an overseas bond issue, according to a banker
close to the transaction.
The bank hired BB Securities, BNP Paribas, Citigroup, HSBC, J.P.
Morgan and Standard Chartered Bank to organize a series of
investor meetings in Asia, the U.S and Europe, according to The
WSJ.
The road shows will take place from June 2 until June 10.
"The proposed securities will be perpetual and junior
subordinated. The securities will also contain mechanisms for
potential noncumulative coupon deductions that the bank can
exercise," Standard & Poor's said in a press release, the report
notes.
About Banco do Brasil
Banco do Brasil SA is Brazil's federal bank and is the largest in
Latin America with some 20 million clients and more than 7,000
points of sale (3,200 branches) in Brazil, and 34 offices and
partnerships in 26 other countries. In addition to its
traditional retail banking services, Banco do Brasil underwrites
and sells bonds, conducts asset trading, offers investors
portfolio management services, conducts financial securities
advising, and provides market analysis and research.
BANCO DO BRASIL: Moody's Rates Capital Securities 'Ba3(hyb)'
------------------------------------------------------------
Moody's Investors Service has assigned a Ba3 (hyb) rating to the
proposed USD-denominated non-cumulative, non-convertible non-
viability perpetual capital securities to be issued by Banco do
Brasil S.A. through its Grand Cayman branch (BB Cayman). The
outlook on the rating is stable.
The capital securities are Basel III-compliant, and the terms and
conditions have been defined with the purpose of considering the
instrument as Additional Tier 1 capital.
The Ba3 (hyb) rating is subject to receipt of final documentation,
the terms and conditions of which are not expected to change in
any material way from the draft documents that Moody's has
reviewed.
The following rating was assigned to Banco do Brasil Cayman Branch
non-viability perpetual capital securities:
Preferred Non-cumulative foreign currency rating: Ba3 (hyb),
outlook stable
Ratings Rationale
The assigned Ba3 (hyb) rating is positioned four notches below the
baa2 adjusted baseline credit assessment (BCA) of Banco do Brasil
S.A. (BB), in line with Moody's standard notching guidance for
non-cumulative preferred securities with a full or partial
principal write-down triggered at or close to the point of non-
viability. The four-notch difference from the adjusted BCA
captures the potential uncertainty related to the timing of a
principal write-down. These securities are untested and there is
the possibility that a principal write-down could be triggered in
advance of the point of non-viability. In addition, prior to the
triggering of a principal write-down, a bank as a going concern
may make use of coupon suspension on a non-cumulative basis before
there is a principal loss.
Under the terms of the securities, the principal will be written
down (partially or in full) in the event that BB's common equity
Tier 1 capital ratio falls below 5.125%; or if a decision is made
to make a public sector capital injection -- or equivalent support
-- with the purpose of maintaining the bank viable as a going
concern; or if the Central Bank makes a discretionary evaluation,
determining that a write-down is necessary to maintain the bank as
a going concern.
The securities also include a mandatory coupon skip mechanism,
which is non-cumulative, if the bank does not have sufficient
distributable profits and accumulated profit reserves; or if the
bank is subject to a default and/or the regulators' imposed
restrictions; or if coupon payment results in capital ratios
falling below regulatory requirements.
The securities (i) will be subordinated in rights and claims to
BB's senior liabilities, (ii) will rank pari passu with all other
parity liabilities and (iii) will be senior to Common Equity Tier
1 Capital.
The Credit Rating for BB Cayman's Undated Non-cumulative
Additional Tier1 Securities was assigned in line with Moody's
existing Credit Rating Methodology entitled "Global Banks", dated
May 2013. Moody's noted that on 1 May 2014 it released a request
for comment in which the rating agency has requested market
feedback on potential changes to its Credit Rating Methodology for
non-viability contingent capital securities.
If the revised Credit Rating Methodology is implemented as
proposed, the Credit Rating on BB Cayman's Undated Non-cumulative
Additional Tier1 Securities may be positively affected. Please
refer to Moody's Request for Comment, titled "Moody's Proposed
Approach for Rating Bank 'High Trigger' Contingent Capital
Securities and Revisions to Framework for Rating Non-viability
Contingent Capital Securities: A Proposed Update to Moody's Global
Banks Rating Methodology," for further details regarding
implications of the proposed Credit Rating Methodology changes on
Moody's Credit Ratings.
The last rating action on Banco do Brasil S.A., Cayman Branch
occurred on November 26, 2013, when Moody's assigned Baa2 foreign
currency debt rating to the CHF senior unsecured notes due June
2019, with stable outlook.
The principal methodology used in this rating was Global Banks
published in May 2013.
Banco do Brasil S.A. is headquartered in Brasilia, Brazil and had
total consolidated assets of BRL1,369.9 billion (USD605.4 billion)
and equity of BRL73.5 billion (USD32.5 billion) as of March 31
2014.
RB CAPITAL: Moody's Assigns Ba1 Rating to 97th, 98th, 99th CRI
--------------------------------------------------------------
Moody's America Latina Ltda has assigned definitive ratings of
Aa2.br (National Scale, Local Currency) and of Ba1 (Global Scale,
Local Currency) to the 97th, 98th and 99th Series of the 1st
issuance real estate certificates (CRI) issued by RB Capital
Companhia de Securitizacao S.A. (RB Capital, the Issuer or the
Securitizadora).
Issuer / Securitizadora: RB Capital Companhia de Securitizacao
S.A.
97th Series -- BRL 209,700,000, maturing on March 7, 2024 rated
Aa2.br (National Scale) and Ba1 (Global Scale, Local Currency)
98th Series -- BRL 70,800,000, maturing on March 6, 2026 rated
Aa2.br (National Scale) and Ba1 (Global Scale, Local Currency)
99th Series -- BRL 122,700,000, maturing on March 7, 2029 rated
Aa2.br (National Scale) and Ba1 (Global Scale, Local Currency)
Ratings Rationale
The ratings of the certificates are based, among others, on the
following factors:
The ability and willingness of BR Malls Participacoes, S.A. (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 Participacoes Ltda., Nattca Participacoes S.A. and Ecisa
Engenharia Comercio e Industria Ltda,, 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 (alienacao 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 BRL19.0 billion in
gross assets at 1Q14 from BRL 2.8 billion at YE07.
BR Malls owned interests in 50 malls plus it has three projects in
development as of 1Q14. 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 78.9% as of 1Q14.
==========================
C A Y M A N I S L A N D S
==========================
ASTRY LIMITED: Members' Final Meeting Set for June 23
-----------------------------------------------------
The members of Astry Limited will hold their final meeting on
June 23, 2014, to receive the liquidator's report on the company's
wind-up proceedings and property disposal.
The company's liquidator is:
Eagle Holdings Ltd.
c/o Barclays Private Bank & Trust (Cayman) Limited
FirstCaribbean House, 4th Floor
P.O. Box 487 Grand Cayman KY1-1106
Cayman Islands
BELMONT MANAGED: Members' Final Meeting Set for June 11
-------------------------------------------------------
The members of Belmont Managed Accounts SPC will hold their final
meeting on June 11, 2014, at 8:30 a.m., to receive the
liquidator's report on the company's wind-up proceedings and
property disposal.
The company's liquidator is:
Alternative Investment Solutions Ltd.
10 Market Street, Suite 140 Camana Bay
Grand Cayman KY1-9006
Cayman Islands
CAROFRED LIMITED: Members' Final Meeting Set for June 23
--------------------------------------------------------
The members of Carofred Limited will hold their final meeting on
June 23, 2014, to receive the liquidator's report on the company's
wind-up proceedings and property disposal.
The company's liquidator is:
Eagle Holdings Ltd.
c/o Barclays Private Bank & Trust (Cayman) Limited
FirstCaribbean House, 4th Floor
P.O. Box 487 Grand Cayman KY1-1106
Cayman Islands
CUMULUS FAHRENHEIT: Member to Receive Wind-Up Report on July 4
--------------------------------------------------------------
The member of Cumulus Fahrenheit Fund will receive on July 4,
2014, at 4:00 p.m., the liquidator's report on the company's wind-
up proceedings and property disposal.
The company's liquidator is:
DMS Corporate Services Ltd.
Nicola Cowan
Telephone: (345) 946 7665
Facsimile: (345) 949 2877
dms House, 2nd Floor
P.O. Box 1344 Grand Cayman KY1-1108
HSBC ALPHA: Shareholder to Receive Wind-Up Report on June 18
------------------------------------------------------------
The shareholder of HSBC Alpha Funds, Ltd. will receive on June 18,
2014, at 10:00 a.m., the liquidator's report on the company's
wind-up proceedings and property disposal.
The company's liquidator is:
Ogier
c/o Madeleine Welham
Telephone: (345) 815-1750
Facsimile: (345) 949-9877
HSBC EUROPEAN: Shareholder to Receive Wind-Up Report on June 18
---------------------------------------------------------------
The shareholder of HSBC European Leveraged Trading Limited will
receive on June 18, 2014, at 10:30 a.m., the liquidator's report
on the company's wind-up proceedings and property disposal.
The company's liquidator is:
Ogier
c/o Madeleine Welham
Telephone: (345) 815-1750
Facsimile: (345) 949-9877
KNO (CAYMAN ISLANDS): Members' Final Meeting Set for June 20
------------------------------------------------------------
The members of KNO (Cayman Islands), Ltd. will hold their final
meeting on June 20, 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:
Ms. Tiffany D. Silva
c/o Intel Corporation
2200 Mission College Boulevard, RNB 4-151
Santa Clara, California 95054
United States of America
METHOD CREDIT: Shareholders' Final Meeting Set for June 20
----------------------------------------------------------
The shareholders of Method Credit Fund will hold their final
meeting on June 20, 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:
Victor Murray
MG Management Ltd.
P.O. Box 30116
Landmark Square, 2nd Floor
64 Earth Close, Seven Mile Beach
Grand Cayman KY1-1201
Cayman Islands
Telephone: +1 (345) 749 8181
Facsimile: +1 (345) 743 6767
PORTOLAN PILOT: Members' Final Meeting Set for June 11
------------------------------------------------------
The members of Portolan Pilot Offshore Fund, Ltd. will hold their
final meeting on June 11, 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:
Gene Dacosta
Telephone: (345) 814 7765
Facsimile: (345) 945 3902
P.O. Box 2681 Grand Cayman KY1-1111
Cayman Islands
ZAIS MORTGAGE: Shareholder to Receive Wind-Up Report on June 17
---------------------------------------------------------------
The shareholder of Zais Mortgage Securities Ltd. will receive on
June 17, 2014, at 10:00 a.m., the liquidator's report on the
company's wind-up proceedings and property disposal.
The company's liquidator is:
Ogier
c/o Jo-Anne Maher
Telephone: (345) 815-1762
Facsimile: (345) 949-9877
===================================
D O M I N I C A N R E P U B L I C
===================================
DOMINICAN REPUBLIC: Dominicans' Purchasing Power Shrinking
----------------------------------------------------------
Dominican Today reports that Banks Superintendent Rafael Camilo
affirmed that the Dominican Republic is the country which saves
the least in Latin America at only 8% of GDP, but in an apparent
lapse noted that the people's purchasing power has been declining.
Mr. Camilo cited data from 2011 but affirmed that the official
figures haven't changed much since, according to Dominican Today.
"It's a serious situation, we're saving 8%, and there's much
explanation for that. But what does that mean?, that we ourselves
cannot finance our economy. With domestic savings we cannot
finance our economy," the report quoted Mr. Camilo as saying.
Speaking at a breakfast of Dominican Republic's Industry
Association, Mr. Camilo called the situation on saving is serious
because the country will "always have to borrow and seek loans
abroad to finance growth," the report notes.
Mr. Camilo spoke on the topic "Exports as the axis of a new
development model: Its financing and the Bandex," on which the
official added: "What's happened is that real wages have been
declining in Dominican Republic."
=========
H A I T I
=========
HAITI: IMF Concludes Staff Visit to Country
--------------------------------------------
A mission from the International Monetary Fund (IMF) led by
Gabriel Di Bella visited Port-au-Prince during May 14-23, 2014, to
conduct discussions for the final review under the Extended Credit
Facility (ECF) arrangement. The mission met with Minister of
Economy and Finance Marie Carmelle Jean-Marie; Governor of the
Bank of the Republic of Haiti (BRH) Charles Castel; other senior
government officials, representatives of the private sector, and
development partners.
At the end of the visit, Mr. Di Bella issued the following
statement:
"Preliminary data for the first half of the fiscal year 2014 (i.e.
October 2013-March 2014) suggest that economic activity (as
measured by gross domestic product, GDP), has advanced in line
with projections, at a pace of about 3-4 percent. Inflation
remained low, and it is projected to be in the mid-single digits
by the end of the fiscal year (i.e. September 2014). The fiscal
deficit was lower than programmed, largely due to delays in
approving the budget, while domestic revenues have been close to
projections. Monetary policy was adequately geared towards
protecting reserves while ensuring a low and stable inflation.
"The implementation of measures to strengthen the effectiveness of
fiscal policy advanced, in particular with respect to the
establishment of the Treasury Single Account (TSA). To this end,
continued close cooperation between the Ministry of Finance and
the Central Bank will be essential. The implementation of
measures to improve the effectiveness of public investment and
debt management is also ongoing.
"The mission welcomed the approval of the budget for 2014, and
discussed with the authorities the policy mix for fiscal year
2015. In this regard, the mission indicated the need to gradually
reduce the fiscal deficit, which in turn will allow a progressive
loosening of monetary policy. Successfully reducing the fiscal
deficit will depend on containing the cost of energy subsidies and
significantly and decisively improving the performance of the
electricity sector. The mission underscored the need to implement
measures in these areas together with well-designed programs to
protect the most vulnerable. A lower fiscal deficit will allow
maintaining appropriate international reserve buffers, which are
essential to the effective implementation of monetary policy, and
as a cushion to withstand unanticipated shocks.
"On the occasion of the final program review, the mission would
like to commend the authorities for their implementation of sound
macroeconomic policies in the difficult years following the 2010
earthquake. The hospitality and open discussions that prevailed
throughout this period continued during this visit. Fund staff
and the Haitian authorities will continue working during the
upcoming weeks with the objective of finalizing the discussions in
the context of the eighth and final review of the ECF, in order to
present the related documents for the consideration of the
Executive Board before end-August, 2014."
===========
M E X I C O
===========
ELEMENTIA S.A: Fitch Affirms LT Issuer Default Rating at 'BB+'
--------------------------------------------------------------
Fitch Ratings has affirmed Elementia, S.A. de C.V.'s (Elementia)
ratings as follows:
--Long-term Issuer Default Rating (IDR) at 'BB+';
--Long-term Local Currency IDR at 'BB+';
--Long-term National Scale Rating at 'A+(mex)';
--MXN3,000 million Local Certificados Bursatiles due in 2015 at
'A+(mex)'.
The Rating Outlook is Stable.
Elementia's ratings continue to reflect its strong business
profile characterized by geographic and product line
diversification, leading market shares in the regions where it has
presence, supported by highly recognized brands and a well-
developed distribution network, stable operating results and its
shareholders' strength. Factors that limit Elementia's ratings are
the company's history of high leverage, industry cyclicality and
input costs volatility.
Key Rating Drivers
Leverage Volatility:
For the latest 12 months (LTM) to March 31, 2014, Elementia's
gross leverage was 2.9x, comparing favorably to the 4.4x
registered in the same period a year ago and the still high 3.3x
recorded as of Dec. 31, 2013. The company's net debt to EBITDA at
year-end 2013 was 2.3x, below Fitch's previous expectations of net
leverage in the range of 2.5x. Net debt to EBITDA for the LTM
ended March 2014 was 2.2x, slightly above managements long term
target of 2.0x. Fitch estimates net debt to EBITDA for 2014 to be
around 1.9x and anticipates that Elementia will continue funding
its future growth through a combination of internally generated
cash and external financing. Fitch considers that Elementia has
flexibility to continue financing its growth strategy; however,
deterioration in leverage ratios and/or debt financed acquisitions
could pressure the company's credit profile.
During the LTM to March 2014, the company's free cash flow (FCF),
measured as cash flow from operations after interest paid, capex
and dividends was moderately positive as a result of the
investments related to the construction of its cement plant, which
began operations in May 2013 and investments in its metals
division. Fitch expects Elementia's' FCF during 2014 to be in the
MXN200 million-MXN300 million range and to strengthen in 2015 as a
result of these investments.
Continued Business Diversification:
The company's business position is supported by its diversified
revenue base. In 2013, the company generated consolidated revenues
and EBITDA of USD1 billion and USD150 million, respectively.
Revenues remained relatively stable compared to 2013, and EBITDA
expanded close to 5%. The metal division (mainly copper products)
represented approximately 53% of consolidated sales and 35% of
EBITDA, respectively, building systems contributed with 31% and
42%, Cement represented 8% and 12% and plastics contributed 6% and
7%. Elementia's cash flow and profitability are supported by its
pricing strategy and by the contribution of its cement business
which Fitch expects will represent about 12% of sales and 24% of
EBITDA in 2014. In its metal segment, the company applies a cost-
plus margin formula, allowing it to pass-through metal price
variations to end customers. The company's strategy will continue
to focus on growing its current operations and through
acquisitions.
In January 2014, Elementia finalized the acquisition of the fiber
cement business of CertainTeed Corporation, a subsidiary of Saint
Gobain. With this acquisition, Elementia can achieve operational
synergies by having local manufacturing facilities in the U.S.
that complement the company's current commercial activities in the
country and increase its market presence.
Adequate Liquidity and Low Refinancing Risk:
As of March 31, 2014, the company had a cash balance of MXN1,539
million, minimal short-term debt of MXN149 million and total debt
of MXN6,484 million. Elementia does not face large debt maturities
until late 2015 when MXN3 billion in Certificados Bursatiles come
due. The company has undrawn committed credit lines for USD300
million which provide additional liquidity support. During 2012,
the company received approximately MXN1 billion in equity
injections from its shareholders to support its growth strategy.
Fitch expects that Elementia's internally generated cash flows and
financial flexibility will allow it to manage its debt profile.
Environmental Regulations Could Limit Operations:
The company uses chrysotile fibers (the sole form of asbestos
still in use) for part of its production of fiber-cement products,
which are sold locally where permitted in the North and South
American regions. Elementia has been investing in capacity
production to use different fibers, such as cellulose fiber and
polyvinyl alcohol (PVA), with the majority of its manufacturing
facilities already aligned to produce with different technologies.
The use of this fiber is in line with international standards and
local environmental regulations. Even though Elementia has not
been subject to legal claims regarding the use of chrysotile in
its products, future claims cannot be ruled out, resulting in
uncertain litigation risk.
Rating Sensitivities
Negative factors that could affect the company's credit profile
include, among others, declining market shares along business
lines, reduced operating cash flows and profitability; increased
leverage and reduced liquidity; reaching or exceeding financial
covenants could also put additional pressure on the company's
credit quality.
Positive rating actions could be driven by consistent positive FCF
generation and stable operating results through industry and
economic cycles resulting in improvement in leverage to consistent
levels of total debt to EBITDA at or below 2.0x.
=======
P E R U
=======
GRUPO ACP: Fitch Withdraws 'B' LT Foreign Currency IDR
------------------------------------------------------
Fitch Ratings has withdrawn Grupo ACP Inversiones y Desarrollo's
(ACP) ratings. ACP has recently sold its core operating company
(Mibanco) and used the proceeds to pay the USD85 million, 2011
senior bond issuance and other debt.
Fitch has withdrawn ACP's issuer ratings as the entity has chosen
to stop participating in the rating process. Therefore, Fitch
will no longer have sufficient public information to maintain the
ratings. Accordingly, Fitch will no longer provide ratings or
analytical coverage for ACP.
Fitch has withdrawn the following ratings for ACP:
--Long-term foreign currency Issuer Default Rating (IDR) 'B';
Outlook Negative;
--Short-term foreign currency IDR 'B';
--Long-term local currency IDR at 'B'; Outlook Negative;
--Short-term local currency IDR 'B';
--Viability Rating 'b';
--Support Rating '5';
--Support Rating Floor 'NF'.
=================
X X X X X X X X X
=================
BOND PRICING: For the Week From May 26 to May 30, 2014
------------------------------------------------------
Issuer Coupon Maturity Currency Price
------ ------ -------- -------- -----
Aguas Andinas SA 4.15 12/1/2026 CLP 70.91
Almendral
Telecomunicaciones SA 3.5 12/15/2014 CLP 22.55
Argentina Bocon 2 1/3/2016 ARS 68.5
Argentina Boden Bonds 2 9/30/2014 ARS 31.5
Argentina Government
Int'l Bond 7.82 12/31/2033 EUR 75.5
Argentina Government
Int'l Bond 7.82 12/31/2033 EUR 74
Argentina Government
Int'l Bond 8.28 12/31/2033 USD 50
Argentina Government
Int'l Bond 8.28 12/31/2033 USD 55
Argentina Government
Int'l Bond 4.33 12/31/2033 JPY 36.5
Argentina Government
Int'l Bond 0.45 12/31/2038 JPY 15
Argentina Government
Int'l Bond 4.33 12/31/2033 JPY 36.5
Automotores
Gildemeister SA 8.25 5/24/2021 USD 69
Automotores
Gildemeister SA 6.75 1/15/2023 USD 65
Automotores
Gildemeister SA 8.25 5/24/2021 USD 68.4
Automotores
Gildemeister SA 6.75 1/15/2023 USD 64.02
Banco BPI SA/
Cayman Islands 4.15 11/14/2035 EUR 62.5
Banco Supervielle SA 7 8/20/2020 USD 74.12
Banif Finance Ltd 1.68 EUR 35
Bank Austria
Creditanstalt
Finance Cayman Ltd 2.16 EUR 74.8
BCP Finance Co Ltd 5.54 EUR 62.82
BCP Finance Co Ltd 4.24 EUR 60.37
Republic of Venezuela 7 3/31/2038 USD 65.59
Caixa Geral De
Depositos Finance 1.12 EUR 42.5
CAM Global Finance 6.08 12/22/2030 EUR 64.87
China Forestry
Holdings Co Ltd 10.3 11/17/2015 USD 37
China Forestry
Holdings Co Ltd 10.3 11/17/2015 USD 37
China Precious Metal
Resources Holdings Co Ltd 7.25 2/4/2018 HKD 65.97
Cia Cervecerias Unidas SA 4 12/1/2024 CLP 57.05
Transener SA 9.75 8/15/2021 USD 68
Transener SA 8.88 12/15/2016 USD 67.6
Transener SA 9.75 8/15/2021 USD 67.5
Cia Energetica de Sao Paulo 9.75 1/15/2015 BRL
Cia Sud Americana de
Vapores SA 6.4 10/1/2022 CLP 61.42
City of Buenos
Aires Argentina 1.95 1/28/2020 USD 70.125
City of Buenos Aires
Argentina 1.95 12/20/2019 USD 70.875
Daphne International
Holdings Ltd 3.13 6/11/2014 CNY 5.25
Decimo Primer
Fideicomiso 4.54 10/25/2041 USD 57.25
Decimo Primer Fideicomiso 6 10/25/2041 USD 69
Empresa Distribuidora
Y Comercializadora Norte 9.75 10/25/2022 USD 66.99
Empresa Distribuidora Y
Comercializadora Norte 9.75 10/25/2022 USD 66.125
ERB Hellas Cayman
Islands Ltd 9 3/8/2019 EUR 68.375
Glorious Property
Holdings Ltd 13.3 3/4/2018 USD 71.24
Hidili Industry
International
Development Ltd 8.63 11/4/2015 USD 53.25
Hidili Industry
International
Development Ltd 8.63 11/4/2015 USD 52.75
Inversiones Alsacia SA 8 8/18/2018 USD 65.25
Inversiones Alsacia SA 8 8/18/2018 USD
Inversora de Electrica
de Buenos Aires SA 6.5 9/26/2017 USD 43.25
MetroGas SA 8.88 12/31/2018 USD 71.875
Mongolian Mining Corp 8.88 3/29/2017 USD 66
Mongolian Mining Corp 8.88 3/29/2017 USD 64.75
Petroleos de Venezuela SA 6 11/15/2026 USD 60.75
Petroleos de Venezuela SA 5.38 4/12/2027 USD 58
Petroleos de Venezuela SA 5.5 4/12/2037 USD 55
Petroleos de Venezuela SA 6 11/15/2026 USD 59.41
Provincia del Chaco 4 11/4/2023 USD 75
Provincia del Chaco 4 12/4/2026 USD 51.125
Renhe Commercial
Holdings Co Ltd 13 3/10/2016 USD 68.5
Renhe Commercial
Holdings Co Ltd 13 3/10/2016 USD 69.5
Ruta del Bosque Sociedad
Concesionaria SA 6.3 3/15/2021 CLP 73.66
Sifco SA 11.5 6/06/2016 USD 29
SMU SA 7.7 2/8/2020 USD 71.5
SMU SA 7.75 2/8/2020 USD 69.21
Talca Chillan Sociedad
Concesionaria SA 2.75 12/15/2019 CLP 56.46
Uruguay Notas
del Tesoro 2.5 9/27/2022 UYU 72.08
Venezuela Government
International Bond 6 12/9/2020 USD 72.75
Venezuela Government
International Bond 7.65 4/21/2025 USD 73
Venezuela Government
International Bond 7 3/31/2038 USD 65.75
Virgolino de Oliveira
Finance Ltd 10.5 1/28/2018 USD 67.52
Virgolino de Oliveira
Finance Ltd 11.8 2/9/2022 USD 67.2
Virgolino de Oliveira
Finance Ltd 10.5 1/28/2018 USD 67.62
Virgolino de Oliveira
Finance Ltd 11.8 2/9/2022 USD 66.75
***********
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
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than a balance sheet solvency test.
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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
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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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