/raid1/www/Hosts/bankrupt/TCRLA

/raid1/www/Hosts/bankrupt/TCRLA_Public/140605.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 Thursday, June 5, 2014, Vol. 15, No. 110 Headlines B E R M U D A ALAMO RE: Fitch Expects to Rate Variable Rate Notes 'Bsf(EXP)' BERMUDA: Sovereign Ratings Cut Does Not Impact Insurers' Ratings MAIDEN HOLDINGS: A.M. Best Affirms 'bb' Preferred Stock Rating B R A Z I L BRAZIL: Cuts Dollar Loan Tax as Weak Real Threat to Inflation INDUSTRIA E COMERCIO: Fitch Assigns National LT 'B (bra)' Rating OGX PETROLEO: Restructuring Plan Garners Support From Creditors C A Y M A N I S L A N D S BTG PACTUAL: Shareholder to Receive Wind-Up Report on June 13 EAGLE INVESTOR: Members' Final Meeting Set for June 11 EAGLE INVESTOR II: Members' Final Meeting Set for June 11 EAGLE INVESTOR III: Members' Final Meeting Set for June 11 EAGLE INVESTOR IV: Members' Final Meeting Set for June 11 EAGLE INVESTOR IX: Members' Final Meeting Set for June 11 EAGLE INVESTOR V: Members' Final Meeting Set for June 11 ION ISRAEL: Members' Final Meeting Set for June 20 NAAMAN LIMITED: Members' Final Meeting Set for June 24 WOLFGANG INTERNATIONAL: Members' Final Meeting Set for June 6 D O M I N I C A N R E P U B L I C DOMINICAN REPUBLIC: Agency Seeks Competitive Business Climate DOMINICAN REPUBLIC: Big Business, Labor Dig in as Talks Languish J A M A I C A JAMAICA: Survey Shows Slight Return of Confidence in Currency M E X I C O AXTEL SAB: Fitch Affirms Issuer Default Rating at 'B' BANCO NACIONAL: Moody's Places 'C-' BFSR on Review for Downgrade - - - - - ============= B E R M U D A ============= ALAMO RE: Fitch Expects to Rate Variable Rate Notes 'Bsf(EXP)' -------------------------------------------------------------- Fitch Ratings expects to rate the series 2014-1 principal at-risk variable rate notes issued by Alamo Re Ltd., a duly formed special-purpose insurer in Bermuda, as follows: --Principal at-risk variable rate notes with amount to be determined by sponsor; expected maturity June 7, 2017 'Bsf(EXP)', Outlook Stable. TRANSACTION SUMMARY The notes are exposed to insured catastrophe losses, solely to wind damage, due to 'named storms' on an indemnity basis from subject business written by the Texas Windstorm Insurance Association (TWIA). The subject business covers the 14 first- tier, seacoast counties of Texas (and a small portion of Harris County). This represents $84.4 billion (as of Dec. 31, 2013) of total insured value that is primarily residential (85%) and commercial (15%) with very little exposure to mobile homes. Galveston and Brazoria counties represent 50% of the total insured value. On a historical basis, there have been 37 hurricanes that have made landfall in Texas since 1900. Recent hurricanes, Dolly and Ike (two events in 2008) would have caused an estimated 26% principal loss to the notes. Hurricane Rita (2005) would not have caused any losses. Four hurricanes prior to 1933 would have totally exhausted the notes. Initially, noteholders are subject to principal loss (and reduced interest) if annual aggregate ultimate net losses exceed the attachment point of $1.90 billion and a total loss of principal occurs if the severity reaches $3.25 billion in the first 12-month risk period. A named storm must generate at least $50 million in ultimate net losses to be included in the aggregate total. Based on the profile of the initial attachment point, the modeled annual aggregate exceedance probability is estimated at 3.80%, which implies a 'Bsf' rating per Fitch's criteria. There are three annual risk periods over the term of the note. Thus, the notes will 'reset' on June 1, 2015 and June 1, 2016 using an escrow software model and TWIA providing updated subject business data. At each reset date, TWIA may exercise an option to adjust the attachment levels within an exceedance probability range of 4.40% to 1.75%. The implied rating under Fitch's criteria at a 4.40% exceedance probability is 'Bsf', and the implied rating at 1.75% is 'BB-sf'. If such an option is exercised by TWIA at either reset date, the risk interest spread will be recalculated to reflect the increased (or decreased) level of risk assumed by the noteholders. If TWIA does not elect to reset the attachment levels, the reset agent will adjust the attachment points to maintain the initial 3.80% exceedance probability using the updated subject business profile. The notes may be extended for three additional years if certain qualifying events occur, or at the discretion of Hannover Ruck SE, a reinsurance company that acts as a transformer and sits between TWIA and Alamo Re. However, the notes are not exposed to any further catastrophe events during this extension. The notes may be redeemed at any time due to regulatory or tax law changes or partially by TWIA during the extension period or under early redemption events. The repayment of the notes to the noteholders occurs subsequent to any qualified payments to TWIA for covered events. Noteholders have no recourse to TWIA (or to its transformer, Hannover Ruck, SE). KEY RATING DRIVERS The rating is based on the weakest link amongst the evaluation of the natural catastrophe risk, the business profile of TWIA, the counterparty risk of the transformer (Hannover Ruck SE) and the credit risk of the collateral assets. The natural catastrophe risk represents the weakest link and currently drives the note rating. The rating analysis in support of the evaluation of the natural catastrophe risk is highly model-driven. As with any model of complex physical systems, particularly those with low frequencies of occurrence and potentially high severity outcomes, the actual losses from catastrophic events may differ from the results of simulation analyses. Fitch is neutral to any of the major catastrophe modeling firms that is selected by the issuer to provide the model analysis, and thus Fitch did not include any explicit margins or qualitative haircuts to the probability of loss metric provided by the modeling firm. The probability of loss was initially estimated at 3.80% based on a one-year simulated period as calculated by a third-party modeler, AIR Worldwide (AIR) using their methodology and proprietary models, but as noted, could be adjusted by TWIA to range between 1.75% and 4.40% at each reset period. Results from other possible modelers or from TWIA were not provided. Sensitivity analysis provided by AIR indicated the implied rating would be no worse than 'Bsf'. The risk modeling included certain stresses for economic demand surge, storm surge and a loss adjustment expense factor of 1.10. Debris removal was not explicitly modeled but is implicit in the claim data history. The modeled results did not include the possibility that the average annual loss may increase by 1.10 in any annual risk period. The model simulates only hurricane activity making landfall, thus it understates claim losses to named storms not recognized as hurricanes or hurricanes that become degraded. Noteholders are exposed to this basis risk or the difference between actual net losses incurred by TWIA and the AIR modeled net losses. Alamo Re ultimately 'follows the fortunes' of TWIA in regards to underwriting of new business over the next three years and claim management practices. TWIA was established by the Texas Legislature in 1971 as a residual insurer of last resort. Although applicants must have been denied coverage by at least one commercial insurer, all properties insured by TWIA must be certified as built to specified building codes, must have flood insurance coverage in specified flood areas and have maximum limits per residential dwelling of $1,773,000 (higher limits are available for commercial structures). Fitch believes certain other safeguards are in place for noteholders: TWIA is subject to review, oversight and approval by the Texas Department of Insurance (though it receives no federal, state or local funds for support); there is an independent claim reviewer and loss reserve specialist (Deloitte & Touche Ltd., Bermuda) for Alamo Re; and the data quality of the subject business provided to AIR appears adequate. For this catastrophe bond structure, TWIA will retain at least 5% of the aggregate ultimate net loss on a first-dollar basis. It also has the ability to issue up to $1.5 billion of public securities funded by premium surcharges levied against policyholders and member assessments to commercial insurance companies. Above the initial modeled attachment of $1.9 billion, claim losses are shared between noteholders and traditional reinsurers on a pro-rata basis depending on the ultimate deal size. Hannover Ruck SE (IDR 'A+', Outlook Positive) acts as the transformer for TWIA and Alamo Re. Noteholders are exposed to the risk that Hannover Ruck SE does not pass along retrocession premiums to Alamo Re. These premiums are a key component in the coupon payment to noteholders. Proceeds from this issuance will be held in a collateral account and used to purchase highly-credit-quality money market funds meeting defined eligibility criteria; otherwise funds will be held in cash. Investment yields generated from these permitted investments are passed directly to noteholders. A downgrade of a permitted investment will not necessarily lead to a replacement of that investment. Further, noteholders are exposed to possible market value risk if the net asset value of a money market fund falls below $1.00. Finally, certain actions may be required if the collateral account is invested in money market funds and Foreign Account Tax Compliance Act (FATCA) is deemed to apply in late 2016. RATING SENSITIVITIES This rating is sensitive to the occurrence of a qualifying event(s), TWIA's election to reset the note's attachment levels, changes in the data quality or purpose of TWIA, the counterparty rating of Hannover Ruck SE and the rating on the assets held in the collateral account. If a qualifying covered event occurs, Fitch will downgrade the note to reflect an effective default, and issue a Recovery Rating. In the case of a reset election by TWIA, the rating would not be sensitive to a movement from the initial 3.80% exceedance probability to a probability as high as 4.40%, since both probabilities imply a 'Bsf' rating. However, if as of the June 1, 2016 reset date TWIA elects to move closer to an exceedance probability of 1.75%, the notes at that time could be upgraded to as high as 'BB-sf'. The escrow model may not reflect future methodology enhancements by AIR which may have an adverse or beneficial effect on the implied rating of the notes were such future methodology considered. Fitch's expected rating is based on a review of a draft Offering Circular (dated May 17, 2014), a Rating Agency Presentation (dated May 21, 2014) and AIR Expert Risk Analysis and Results (dated May 20, 2014). The final rating is contingent upon receipt of signed legal documents pertinent to this transaction that do not materially change what has currently been reviewed. Any changes could lead Fitch to an alternative rating or inability to rate the note. BERMUDA: Sovereign Ratings Cut Does Not Impact Insurers' Ratings ---------------------------------------------------------------- Fitch Ratings commented that its recent downgrade of Bermuda's sovereign ratings does not currently impact Fitch's ratings of Bermuda-domiciled insurance companies. Fitch generally views Bermuda-based (re)insurance organizations as being highly isolated from country-related risks in Bermuda. Under Fitch's rating methodologies, it could rate certain insurance and reinsurance companies at levels at least four notches higher than the sovereign rating of Bermuda. In contrast, in most other countries, insurance company ratings are limited to that of the sovereign, or up to one to two notches above the sovereign. Fitch provides these comments following the agency's May 30, 2014 downgrade of Bermuda's long-term local currency (LC) Issuer Default Rating (IDR) to 'A+' from 'AA-'. This downgrade reflects a fifth consecutive year of economic contraction, continued fiscal deficits, and a rising government debt burden. The revision of the Outlook to Stable from Negative reflects Fitch's expectation that Bermuda's economic growth will gain pace and that the authorities' commitment to a reduction in the fiscal deficit will be sustained in 2014-2016. The (re)insurance companies that Fitch rates that are either Bermuda-domiciled or have significant subsidiaries in Bermuda are generally strong international organizations, with a large and diverse global profile. These companies' assets, insurance premiums and underwriting exposures are spread across many countries, with very little originating in Bermuda. Bermuda-based insurers tend to hold very little if any Bermuda sovereign debt or Bermuda currency. They also maintain relatively minor investments in Bermuda banks and other Bermuda-based companies. While most Bermuda insurers have some level of deposits held at Bermuda banks, these amounts are generally quite limited. In addition, investment custodians are typically located outside of Bermuda. As a result of this very limited linkage of Bermuda-based (re)insurers to the island's fiscal issues and local economy, Fitch believes stress experienced by Bermuda would have minimal impact on the credit quality of its (re)insurers. Following the recent downgrade, several insurance groups within Fitch's rated universe currently have Bermuda domiciled ratings at or above Bermuda's LC IDR rating of 'A+'. These include operating and holding company ratings for PartnerRe Ltd. ('AA-' Insurer Financial Strength [IFS], 'A+' IDR), and operating company ratings for ACE Limited ('AA' IFS), Allied World Assurance Company Holdings, Ltd. ('A+' IFS), Arch Capital Group Ltd. ('A+' IFS), Axis Capital Holdings Limited ('A+' IFS), Everest Re Group, Ltd. ('AA-' IFS) and RenaissanceRe Holdings, Ltd. ('A+' IFS). Fitch would not expect to lower any of these ratings in the event that Bermuda's LC sovereign rating was downgraded up to at least an additional two notches to 'A-'. In the event of a more significant downgrade to Bermuda's sovereign rating to 'BBB+' or below, Fitch would consider the circumstances at that time to determine if it would be appropriate to rate Bermuda insurance organizations more than four notches above Bermuda's LC sovereign rating. MAIDEN HOLDINGS: A.M. Best Affirms 'bb' Preferred Stock Rating -------------------------------------------------------------- A.M. Best Co. has revised the outlook to positive from stable and affirmed the financial strength rating (FSR) of A- (Excellent) and issuer credit ratings (ICR) of "a-" of the property/casualty subsidiaries of Maiden Holdings, Ltd. (Maiden Holdings) (Hamilton, Bermuda) [NASDAQ: MHLD], also known as Maiden Group (Maiden). Concurrently, A.M. Best has revised the outlook to positive from stable and affirmed the ICR of "bbb-" of Maiden Holdings and the debt rating of "bb" on its preferred stock. A.M. Best has also revised the outlook to positive from stable and affirmed the ICR and senior debt ratings of "bbb-" of Maiden Holdings North America, Ltd. (Maiden NA) (Delaware), a direct, wholly owned subsidiary of Maiden Holdings. Maiden NA's senior notes are fully and unconditionally guaranteed by Maiden Holdings. Additionally, A.M. Best has affirmed the FSR of A- (Excellent) and ICR of "a-" of Maiden Specialty Insurance Company (MSIC) (Raleigh, NC). The outlook for this rating is stable. The revised outlook reflects Maiden's consistently profitable underwriting and operating performance within its niche market segments, serving small- to medium-size insurance companies underwriting traditional lines of business. This helps distinguish Maiden from other reinsurers that have a greater proportion of their book of business in higher volatility segments such as catastrophe-exposed property reinsurance. Maiden's non- cat property and casualty book is a well-diversified, low- volatility portfolio that generates more predictable and profitable performance, and has generated very consistent underwriting and operating returns. In addition, Maiden's ratings also reflect its strong risk-adjusted capitalization, due in part to capital contributions from Maiden Holdings and the operational benefits that Maiden derives as a quota share partner with AmTrust Financial Services, Inc.'s (AFSI) Bermuda reinsurance subsidiary, AmTrust International Insurance, Ltd. (AII), and National General Holdings Corp. (NGHC). The NGHC quota share was terminated effective Aug. 1, 2013, and it is currently in run-off. Partially offsetting these positive rating factors are the continuing execution risk faced by Maiden in achieving its business plans, the competitive environment in its core reinsurance markets and its client concentration, as AFSI and NGHC account for approximately 63% of the group's 2013 total gross premiums. Maiden Holdings' adjusted debt-to-total capital, excluding accumulated other comprehensive income (AOCI) of 27.1% and adjusted debt-to-total tangible capital (excluding AOCI) of 28.8% at March 31, 2014, were within A.M. Best's guidelines for the company's ratings. In addition, Maiden Holdings' interest coverage ratio remains adequate for its ratings. Additionally, Maiden Holdings paid off the remaining balance of their trust preferreds in January 2014, which will lower the group's cost of capital and improve earnings going forward. The ratings of MSIC reflect its run-off status following the 100% quota share reinsurance arrangement of Maiden's excess and surplus unit, including the transfer of MSIC staff and underwriting platform to Brit Insurance. Key rating factors that may lead to positive rating actions include the organization producing operating results that exceed its peers for an extended period, along with the strengthening of its risk-adjusted capitalization. Factors that may lead to negative rating actions include a trend of increasingly deteriorating underwriting and operating performance to a level below the group's peers, or an erosion of surplus that causes a significant decline in risk-adjusted capitalization. The FSR of A- (Excellent) and ICRs of "a-" have been affirmed and the outlook revised to positive from stable for the following property/casualty subsidiaries of Maiden Holdings, Ltd.: * Maiden Reinsurance Ltd. * Maiden Reinsurance North America The FSR of A- (Excellent) and ICR of "a-" have been affirmed with a stable outlook for Maiden Specialty Insurance Company. The following debt ratings have been affirmed, and the outlook revised to positive from stable: Maiden Holdings, Ltd.-- -- "bb" on $150 million 8.25% preferred stock -- "bb" on $165 million 7.25% mandatory convertible preferred stock, due 2016 Maiden Holdings North America, Ltd. (guaranteed by Maiden Holdings, Ltd.)-- -- "bbb-" on $100 million 8.0% senior unsecured notes, due 2042 -- "bbb-" on $107 million 8.25% senior unsecured notes, due 2041 -- "bbb-" on $152 million 7.75% senior unsecured notes, due 2043 The following indicative ratings under the shelf registration have been affirmed and the outlook revised to positive from stable: Maiden Holdings North America, Ltd. (guaranteed by Maiden Holdings, Ltd.)-- -- "bbb-" on senior unsecured debt -- "bb+" on subordinated debt -- "bb" on junior subordinated debt -- "bb" on preferred stock =========== B R A Z I L =========== BRAZIL: Cuts Dollar Loan Tax as Weak Real Threat to Inflation ------------------------------------------------------------- Felipe Pacheco and Raymond Colitt at Bloomberg News report that Brazil further reduced taxes originally implemented to stem dollar inflows as the government tries to support the real in an effort to fight above-target inflation. The 6 percent IOF tax, which previously was applied to foreign loans with maturities of up to one year, will now only be charged on loans and bonds with durations of up to six months, according to a presidential decree published in the official gazette, notes Bloomberg News. The last time the government changed rules for such operations was December 2012, it added. According to the report, the decision to stimulate dollar loans follows a drop in the real in the past month that was the worst among all major currencies after the New Zealand Dollar. A weaker real could further stoke inflation that the central bank says has a 40 percent chance of accelerating beyond the 6.5 percent upper limit of the target range this year, Bloomberg News relays. "The exchange rate in the short term is the available tool to prevent consumer price gains from breaching the upper limit of the target," the report qouted Roberto Padovani, chief economist at Votorantim Ctvm Ltda, as saying in a phone interview from Sao Paulo. "The currency devaluation can affect both confidence in the economy and inflation." The real weakened 0.2 percent to 2.2861 per U.S. dollar at 2:30 p.m. local time, extending its monthly decline to 2.8 percent, notes Bloomberg News' June 5 report. The central bank last week halted the world's longest tightening cycle as President Dilma Rousseff's administration struggles to tame consumer prices without further jeopardizing growth, Bloomberg News relays. Policy makers kept the benchmark interest rate unchanged at 11 percent, after raising it nine consecutive times from a record-low 7.25 percent, the report adds. Bloomberg News says inflation will quicken to 6.47 percent by year end from 6.31 percent in the 12 months through mid-May, according to the median estimate in a central bank survey of about 100 economists published this week. The increase in the cost of living has reduced confidence in the economy and eroded growth, notes Bloomberg News. The report, citing a central bank survey, said Latin America's biggest economy will expand 1.5 percent this year, down from 2.5 percent in 2013. Speculation the central bank will scale back or eliminate a program of daily swap auctions prompted traders to sell off the real, notes Bloomberg News. The program that helped support the currency this year is scheduled to expire by the end of the month, it added. The real gained 3.3 percent since the start of the year, the best performance after the Australian dollar among the 16 most traded currencies tracked by Bloomberg. The report relays that the dollar loan tax cut will prompt an increase in foreign currency inflows to the country, Camila Abdelmalack, economist at CM Capital Markets, said by telephone from Sao Paulo. "The measure is an incentive to raise funds," the report quoted Luis Otavio de Souza Leal, chief economist at Banco ABC Brasil, as saying by telephone from Sao Paulo. "With high rates in Brazil, it creates an alternative for companies to get funds abroad." The report says Central bank President Alexandre Tombini signaled last month that policy makers could reduce the amount of swaps the bank uses to intervene in the currency market, saying that demand for hedging had eased. Finance Minister Guido Mantega said the government is eliminating measures taken in the past four years amid what he called the currency war to protect Brazilian manufacturers from cheaper imports, adds the report. "The currency market is functioning normally," Mantega told reporters following the publication of the measure, notes Bloomberg News. "There's no need for these instruments." INDUSTRIA E COMERCIO: Fitch Assigns National LT 'B (bra)' Rating ---------------------------------------------------------------- Fitch Ratings has assigned the following ratings to Industria e Comercio Ltda Mafferson. (Mafferson): - National Long-term 'B (bra)'; - National Long-term rating of the Proposed first issuance of debentures guaranteed by real assets, in the amount of BRL12 million, maturing in 2021, 'B (bra)'. The successful placement of debentures in the market should lead to elevation in up to a degree ('B + (bra)' (B plus (bra))), ratings, depending on the conditions of the placement and use of resources. The ratings assigned to Mafferson reflect the high risk of their business in the volatile and highly competitive textile and jeanswear industry in Brazil. The ratings also incorporate the low scale of its operations in industry and aggressive financial profile of the company. The capital structure of Mafferson and weak, coming from a generation history of negative operating cash (CFFO), pressed by the high financial cost of its debt and the dynamics of its structure unfavorable working capital. The ratings also include the limited financial flexibility of the company and the challenges in maintaining adequate liquidity profile against high short-term maturities, as well as to future performance in a more weakened and the macroeconomic environment of greater competition. Furthermore, the Mafferson has low level of corporate governance in comparison with the average of the companies analyzed by Fitch. Main essentials Ratings EBITDA Crescent Consumed By Working Capital and Interest Expenses The Mafferson presented in 2013 CFFO and free cash flow (FCF) negative in BRL 2, BRL 2 and 3 million, 5 million, respectively, compared to BRL 2, 0 million and BRL 2, 3 million negative in 2012. The company has reported low levels of investment, due to its relatively recent installations and the absence of distribution of dividends. Moreover, the consistent evolution Mafferson recorded in operating margins in recent years as a result of the recent strategy of new versions released during the year, as well as its business diversification through new brands and sales channels. In 2013, the generation of the company's EBITDAR strengthened and reached BRL4, 7 million, compared to BRL 3, 8 million and BRL 3, 3 million, respectively, reported in 2012 and 2011. During the same period, the EBITDAR margin reached 14.9 % in relation to 12.4% and 9.9% recorded respectively in 2012 and 2011. Refinancing Risk High The track record of the company's liquidity and weak and is characterized by high debt maturing in the short term, compared to reduced cash position. On December 31, 2013, the index box / short-term debt was 0.1 times even level registered in 2012 and 2011.'s Current proposal for issuance of debentures aims to prepay part of this debt and extend maturities the total debt. The successful placement of debentures can generate an increase, up to a degree, the ratings of the company, depending on the conditions of the placement and use of resources. Major benefits were linked mainly to a generation of CFFO positive and sustainable basis and the strengthening of liquidity at a level that sustains a relation cash / short-term debt above 1.0x. The net leverage, from 4.1 times in 2013, and moderate and is below the average of enterprises in the same rating category. However, the greatest risks associated activities of Mafferson combined their asset base - which is limited in comparison with that of its main competitors - and the historic CFFO of negative pressure the rating to a lower scale. Weak industry fundamentals; Scale Limited Negocios High risks linked to the textile industry and jeanswear were also incorporated into the classifications. This is a highly competitive industry, which demands constant investment in working capital. The high degree of informality in the industry and the presence of large competitors, with participation of consolidated, better capitalized market and significantly larger asset base, Mafferson put in a disadvantaged position. The company has sought to mitigate risks through the industry of its operations aimed at niche markets, working with over a thousand active customers, including retailers small and medium sized main regions of the interior of Brazil and corporate clients. Despite the small size, the Mafferson good presence in their area of expertise and a track record of long-term relationship with its corporate clients, which reduces in part the risk of high and increasing competition in the jeanswear industry. Sensitivity Ratings of positive rating actions could occur if the Mafferson be successful in restructuring the short-term debt and improve its liquidity, with an index cash / short-term debt above 1.0x. The strengthening of the company CFFO also favor the classifications. The ratings could be downgraded if there is increased leverage with net debt / EBITDAR above 5.0 times, or reason for the weakening economic environment and credit lines, involving reduction of the company's access to debt capital - what sustains currently divide the constant scrolling of Mafferson. OGX PETROLEO: Restructuring Plan Garners Support From Creditors --------------------------------------------------------------- Luciana Magalhaes at Daily Bankruptcy Review reports that more than 80% of creditors present at a meeting voted to approve a restructuring plan for Eike Batista's Oleo e Gas Participacoes SA, formerly known as OGX Petroleo e Gas Participacoes SA. Creditors in favor of the plan own more than 90% of the company debt held by those present at the assembly, according to Daily Bankruptcy Review. As reported in the Troubled Company Reporter-Latin America on June 3, 2014, Luciana Magalhaes at The Wall Street Journal said that the rescue of the troubled oil firm founded by Brazilian businessman Eike Batista is becoming a legal battlefield. Two creditors have come forward to try to block the vote on the plan to restructure Oleo e Gas Participacoes, which filed for bankruptcy protection last year, WSJ said. The latest was UK- based Perenco, an independent service provider, which has asked a judge in Rio de Janeiro to give the company's many bondholders only a single vote on the restructuring plan. Such a move would give remaining creditors, mainly suppliers such as Perenco, more influence in the vote and in shaping the future of Oleo e Gas, the report disclosed. WSJ said some smaller bondholders aren't happy with the plan to be voted on. They complained they weren't given the same opportunity to invest in the company as the large ones, lawyer Felipe Galea said last month, the report added. About OGX Petroleo Based in Rio de Janeiro, Brazil, OGX Petroleo e Gas Participacoes S.A., now known as Oleo e Gas, is an independent exploration and production company with operations in Latin America. OGX filed for bankruptcy in a business tribunal in Rio de Janeiro on Oct. 30, 2013, case number 0377620-56.2013.8.19.0001. The bankruptcy filing puts $3.6 billion of dollar bonds into default in the largest corporate debt debacle on record in Latin America. The filing by the oil company that transformed Eike Batista into Brazil's richest man followed a 16-month decline that wiped out more than $30 billion of his personal fortune. The filing, which in Brazil is called a judicial recovery, follows months of negotiations to restructure the dollar bonds, in which OGX sought to convert debt to equity and secure as much as $500 million in new funds. OGX said Oct. 29 that the talks concluded without an agreement. The company's cash fell to about $82 million at the end of September, not enough to sustain operations further than December. ========================== C A Y M A N I S L A N D S ========================== BTG PACTUAL: Shareholder to Receive Wind-Up Report on June 13 ------------------------------------------------------------- The sole shareholder of BTG Pactual Special Purpose Fund III, Ltd. will receive on June 13, 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 Ben Gillooly Telephone: (345) 815 1764 Facsimile: (345) 949-9877 EAGLE INVESTOR: Members' Final Meeting Set for June 11 ------------------------------------------------------ The members of Eagle Investor I Inc 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: Krys Global VL Services Limited Governor's Square, Building 6, 2nd Floor 23 Lime Tree Bay Avenue P.O. Box 21237 Grand Cayman KY1-1205 Cayman Islands Telephone: +1 (345) 947 4700 Facsimile: +1 (345) 946 6728 EAGLE INVESTOR II: Members' Final Meeting Set for June 11 --------------------------------------------------------- The members of Eagle Investor II Inc will hold their final meeting on June 11, 2014, at 10:10 a.m., to receive the liquidator's report on the company's wind-up proceedings and property disposal. The company's liquidator is: Krys Global VL Services Limited Governor's Square, Building 6, 2nd Floor 23 Lime Tree Bay Avenue P.O. Box 21237 Grand Cayman KY1-1205 Cayman Islands Telephone: +1 (345) 947 4700 Facsimile: +1 (345) 946 6728 EAGLE INVESTOR III: Members' Final Meeting Set for June 11 ---------------------------------------------------------- The members of Eagle Investor III Inc will hold their final meeting on June 11, 2014, at 10:20 a.m., to receive the liquidator's report on the company's wind-up proceedings and property disposal. The company's liquidator is: Krys Global VL Services Limited Governor's Square, Building 6, 2nd Floor 23 Lime Tree Bay Avenue P.O. Box 21237 Grand Cayman KY1-1205 Cayman Islands Telephone: +1 (345) 947 4700 Facsimile: +1 (345) 946 6728 EAGLE INVESTOR IV: Members' Final Meeting Set for June 11 --------------------------------------------------------- The members of Eagle Investor IV Inc will hold their final meeting on June 11, 2014, at 10:30 a.m., to receive the liquidator's report on the company's wind-up proceedings and property disposal. The company's liquidator is: Krys Global VL Services Limited Governor's Square, Building 6, 2nd Floor 23 Lime Tree Bay Avenue P.O. Box 21237 Grand Cayman KY1-1205 Cayman Islands Telephone: +1 (345) 947 4700 Facsimile: +1 (345) 946 6728 EAGLE INVESTOR IX: Members' Final Meeting Set for June 11 --------------------------------------------------------- The members of Eagle Investor IX Inc will hold their final meeting on June 11, 2014, at 11:20 a.m., to receive the liquidator's report on the company's wind-up proceedings and property disposal. The company's liquidator is: Krys Global VL Services Limited Governor's Square, Building 6, 2nd Floor 23 Lime Tree Bay Avenue P.O. Box 21237 Grand Cayman KY1-1205 Cayman Islands Telephone: +1 (345) 947 4700 Facsimile: +1 (345) 946 6728 EAGLE INVESTOR V: Members' Final Meeting Set for June 11 -------------------------------------------------------- The members of Eagle Investor V Inc will hold their final meeting on June 11, 2014, at 10:40 a.m., to receive the liquidator's report on the company's wind-up proceedings and property disposal. The company's liquidator is: Krys Global VL Services Limited Governor's Square, Building 6, 2nd Floor 23 Lime Tree Bay Avenue P.O. Box 21237 Grand Cayman KY1-1205 Cayman Islands Telephone: +1 (345) 947 4700 Facsimile: +1 (345) 946 6728 ION ISRAEL: Members' Final Meeting Set for June 20 -------------------------------------------------- The members of Ion Israel Partners 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: Russell Homer c/o Tanya Armstrong Telephone: (345) 946-0820 Facsimile: (345) 946-0864 P.O. Box 2499, George Town Grand Cayman KY1-1104 Cayman Islands NAAMAN LIMITED: Members' Final Meeting Set for June 24 ------------------------------------------------------ The members of Naaman Limited will hold their final meeting on June 24, 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 WOLFGANG INTERNATIONAL: Members' Final Meeting Set for June 6 ------------------------------------------------------------- The members of Wolfgang International Inc. will hold their final meeting on June 6, 2014, at 12:00 noon, to receive the liquidator's report on the company's wind-up proceedings and property disposal. The company's liquidator is: MBT Trustees Ltd. Telephone: 945-8859 Facsimile: 949-9793/4 P.O. Box 30622 Grand Cayman KY1-1203 Cayman Islands =================================== D O M I N I C A N R E P U B L I C =================================== DOMINICAN REPUBLIC: Agency Seeks Competitive Business Climate ------------------------------------------------------------- Dominican Today reports that the Dominican Republic Government enacted the Competitiveness Table to improve the country's business climate, formed by various agencies and private sector representatives. The Table, headed by the sitting President, includes the ministries of the Economy, Industry and Commerce, Finance and Public Works, the Central Bank; the National District City Council, the Banks Superintendence, Securities Superintendence, Supreme Court, Customs and the State-owned Electric Utility (CDEEE), according to Dominican Today. The report relates that representing the private sector will be Dominican Republic's Industries Association (AIRD), Business Council (CONEP), Young Business Leaders (ANJE), American Chamber of Commerce (AMCHARD), Herrera Industries (AEIH), Commercial Banks (ABA) and the Medium and Small Industries (CODOPYME). Executive order 158-14 says that the Competitiveness Table will coordinate actions to "significantly raise Dominican Republic's competitiveness and improve its business climate," the report notes. "President Medina said the Government needs to transcend towards policies based on programs and initiatives conducive to develop a business climate and competitiveness in the country," the Economy Ministry said in a statement, the report adds. DOMINICAN REPUBLIC: Big Business, Labor Dig in as Talks Languish ----------------------------------------------------------------- Dominican Today reports that the various labor unions, grouped in the CNUS on June 2, said the pending talks on the labor code have yet to conclude, contrary to statements by Business Council (Conep) President Manuel Diez Cabral. CNUS President Rafael Abreu called Mr. Diez's statements confusing, "because they stoke a false idea which is very far from being real and the right thing is not to plant false hopes of an agreement," according to Dominican Today. In a statement, Mr. Abreu said that three-way talks for the labor reform have yet to begin, and denied having reached an agreement on 70% of the topics, Mr. Diez said, the report relates. Mr. Diez, the report notes, said labor awaits the Government to convene the dialogue, adding that the Labor Code's 738 items, management has objected around 37, which in Conep's view are highly contradictory. Formal Jobs for Development For CONEP Executive Director Rafael Paz, on both labor and management need to enter into open talks, "we need to have the capacity to discuss any topic, regardless of how complex it might be," the report relates. Speaking on El Dia with Huchi Lora and Amelia Dechamps morning, Mr. Paz added that formal jobs should be the cornerstone of the country's development, the report adds. ============= J A M A I C A ============= JAMAICA: Survey Shows Slight Return of Confidence in Currency ------------------------------------------------------------- RJR News reports that a month after Central Bank Governor Brian Wynter said the pace of depreciation of the currency will decline, business leaders have indicated they believe that will be the case. That was the finding of the latest survey done on behalf of the Central Bank, according to RJR News. The report notes that the survey, done among 234 chief executive officers, managing directors and financial controllers in April, shows that they believe the exchange rate will depreciate 2.4% in the next three months. That is slower than the 4.3% respondents said the dollar would depreciate when the question was asked of them in February, the report relates. The report discloses that the respondents also said they now expect the dollar to lose 4.7% of its value in six months, and 7.2% in 12 months. Those are improvements on the 6.1% and 7.6 % depreciation that was expected from the February survey, the report notes. =========== M E X I C O =========== AXTEL SAB: Fitch Affirms Issuer Default Rating at 'B' ----------------------------------------------------- Fitch Ratings has affirmed the long-term national scale rating of Axtel, SAB de CV to 'BB-(mex)' and global scale ratings of Issuer Default Rating (IDR) in national currency and foreign to 'B'. The Outlook is Stable. In addition, Fitch has affirmed the following ratings on: - Senior secured notes due 2020 at 'B + / RR3'; - Senior convertible notes secured notes due 2020 at 'B + / RR3'. - Senior Notes Unsecured with due 2019 to 'B-/RR5'; - Senior Unsecured Notes due 2017 at 'B-/RR5'. Ratings Key Factors The ratings reflect the improvement in the level of liquidity after the successful recapitalization in 2013 Axtel, by exchanging bonds and selling towers, resulting in lower leverage and maturity profile of debt more widespread. Total net debt of the company was reduced to MXN6.6 billion at end-2013 from MXN10.9 thousand million registered in 2012. Axtel's ratings are constrained by weak cash generation, result of high investment plans aimed at strengthening its enterprise business segment and face the strong competitive environment. Fitch does not anticipate significant improvements in cash flow generation, or the leverage ratio in the medium term. The stability of the rating will depend on the ability to maintain Axtel EBITDA growth, tied to the increase in data and internet revenues, mainly in enterprise solutions; which could mitigate the pressures on traditional wireline services. EBITDA growth in line with the trend of 2013 and the first quarter of 2014 will help provide funds to meet working capital requirements and investments without recourse to external financing. Fitch sees positive operating Axtel, in the medium term, the adoption of new telecommunications laws in Mexico. Improved Liquidity * Upon successful recapitalization of Axtel in 2013, Fitch does not provide liquidity pressures in the short to medium term as the company will not face any significant debt maturity until 2017 Fitch believes that the cash balance of the company MXN828 million at March 31, 2014, as well as committed credit line for USD35 million (equivalent to approximately MXN450 million) provide sufficient support to the liquidity of the company. At March 31, 2014, total debt was MXN7 Axtel, 981 million, mainly composed MXN1 MXN659 million and 331 million unsecured notes due 2017 and 2019 respectively, and MXN5 164 million and MXN270 million guaranteed notes due 2020, including the convertible notes. Other debt includes loans and leases. Changing trend in EBITDA; and positive revenue mix: Axtel resumed growth in EBITDA in 2013 and 1T14 as compared to the prior year, Fitch believes that this trend will continue in the medium term driven by strong performance in the business segments / public sector. Additionally, the company focus on the deployment of fiber to the home (FTTH by its acronym in English) in conjunction with the recent launch of IPTV services should enable sustained growth in number of subscribers and revenues in the broadband segment, while participation protects residential customers. These segments will offset the contraction recurring revenues from traditional telephone service, which have been limited by competition and pricing pressure fixed. The continuous change in the revenue mix Axtel is positive, since the increase in the proportion of the business segment has a stable demand perspective. The mass market segment, where competitive pressure remains high, now only represents about 30% of total revenues. This will allow a generation of cash from operations more stable forward. In 2013 and 1T14, Axtel EBITDA generated by MXN2, MXN728 million and 793 million, respectively, representing increases over the previous year of 10% and 8%, respectively. However, EBITDA margins may present a downward trend and will fall below 25% as the proportion of higher gross margin business, mainly traditional wireline services, continue to decline. Continued Strong Cash Generation: Fitch believes that the generation of negative free cash flow (FFL) continue in the medium term, the result of a high level of investment (capex). Because the business enterprise Axtel is a key area of growth, investment in infrastructure and equipment to support this segment will remain at high levels during 2014 and 2015, in line with those recorded in 2013 by MXN2 016 million; which represented approximately 20% of total revenues. Additionally, working capital requirements will continue to increase due to a larger volume of business with public entities, adding some pressure on operating cash flow (FCO). However, Fitch does not expect Axtel require significant external financing because the amount of negative FFL will not be significant and FCO generation of the company, in addition to the cash balance and the credit line should be sufficient to cover it. Leverage Relatively Stable: Fitch believes that the leverage Axtel will remain stable in the medium term indicator adjusted leverage around 4.0x. The level of net debt is likely to increase modestly due to the negative FFL but must be offset by an improvement in EBITDA. At December 31, 2013, total adjusted debt to EBITDAR improved to 3.9x from 5.0x at end-2012. Excluding the expense for operating leases, the level of total company debt to EBITDA improved to 2.9x from 4.5x, while net debt to EBITDA improved to 2.4x from 4.3x over the same period, reflecting a significant reduction in gross debt following the recapitalization. Secure qualified global scale ratings to 'B + / RR3' reflects good recovery prospects given default. These notes have a first lien on the shares of capital stock of the subsidiaries that guarantee these bonds and substantially all of the assets of these. Instruments rated RR3 considered good recovery prospects given default and have characteristics consistent with securities historically recovering between 51% -70% of principal and interest thereon. Meanwhile, the rest of the notes rated 'B-/RR5' are structurally subordinated to the senior debt. Qualified 'RR5' instruments have characteristics consistent with securities historically recovering 11% -30% between principal and interest thereon. Sensitivity Ratings Negative rating actions may be considered in case of deterioration in liquidity levels and weak operating results as a result of increased competition that may lead to persistently negative FFL and greater leverage. A positive rating action is unlikely in the short term given the recent exchange of forced debt, however positive factors in the credit quality include performance improvements and operating margins, generating free cash flow and competitive position. BANCO NACIONAL: Moody's Places 'C-' BFSR on Review for Downgrade ---------------------------------------------------------------- Moody's de Mexico has placed on review for downgrade Banco Nacional de Mexico, S.A.'s (Banamex) C- standalone bank financial strength rating (BFSR). At the same time, Moody's lowered the bank's standalone baseline credit assessment (BCA) to baa2 from baa1. Moody's also downgraded Banamex's global local currency long term deposits and senior unsecured debt ratings, and the local currency provisional (P) senior debt program ratings to A3 from A2. The local currency short-term deposit rating and the local and foreign currency short-term provisional (P) senior debt program ratings were downgraded to Prime-2, from Prime-1. The long- and short-term A3/Prime-2 foreign currency deposit ratings and the Aaa.mx/MX-1 Mexican National Scale deposits and senior unsecured debt ratings were unaffected by the actions. Moody's also downgraded Acciones y Valores, S.A.'s (Accival) long- and short-term global local currency issuer ratings to A3/Prime2; the outlook is stable. Accival's Aaa.mx/MX-1 Mexican National Scale issuer ratings were unaffected by the actions. Except for Banamex's BFSR, which is on review for possible downgrade, the outlook on all the ratings remains stable. List Of Affected Ratings Banco Nacional de Mexico, S.A. The following rating was placed on review for downgrade: - Standalone bank financial strength rating of C-; baseline credit assessment lowered to baa2, from baa1 The following ratings were downgraded: - Long term local currency deposits downgraded to A3, from A2; stable outlook - Short term local currency deposits rating downgraded to Prime-2, from Prime-1 - Long term local currency senior debt downgraded to A3, from A2; stable outlook - Long term local currency senior debt program downgraded to (P)A3, from (P)A2 - Short term local currency senior debt program downgraded to (P) Prime-2, from (P) Prime-1 - Short term foreign currency senior debt program downgraded to (P)Prime-2, from (P)Prime-1 The following ratings were affirmed: - Long term foreign currency deposits of A3, stable outlook - Short term foreign currency deposits of Prime-2 - Long term Mexican National Scale deposits of Aaa.mx; stable outlook - Short term Mexican National Scale deposits of MX-1 - Long term Mexican National Scale senior unsecured debt of Aaa.mx; stable outlook - Short term Mexican National Scale senior unsecured debt of MX-1 - Long term Mexican National Scale senior unsecured debt program rating of Aaa.mx Acciones y Valores, S.A. The following ratings were downgraded: - Long term local currency issuer downgraded to A3, from A2; stable outlook - Short term local currency issuer downgraded to Prime-2, from Prime-1 The following ratings were affirmed: - Long term Mexican National Scale issuer rating of Aaa.mx, stable outlook - Short term Mexican National Scale issuer rating of MX-1 Ratings Rationale Lowering Of Standalone Baseline Credit Assessment And Review For Downgrade Of Standalone Bank Financial Strength Rating In lowering Banamex's standalone baseline credit assessment (BCA) to baa2 from baa1, and placing the C- standalone bank financial strength rating on review for downgrade, Moody's took into account the uncertainty surrounding Banamex's risk profile that derives from a number of ongoing investigations and reviews by federal and financial authorities both in Mexico and the U.S, as well as Citigroup's and Banamex's internal reviews. The rating actions reflect the severity of the fraud revealed in March and the subsequent revelations about the deficiencies in Banamex's risk management and auditing functions that permitted this fraud to occur. Along with dismissal of senior local Banamex staff, these disclosures signal that structural and cultural risk management and governance issues might be broader than initially thought, and generate concerns that other lines of business may be affected as well. Moody's believes there is risk that additional negative developments could lead to new charges to earnings or capital, while the resulting damage to the company's reputation may result in a loss of business and reduced profitability. Moody's review will focus on the outcome of the ongoing investigations and assess the impact on the bank's intrinsic strength, including its risk profile, brand name and market perception, business potential, and market positioning, among others. Banamex faces the difficult task of successfully executing an overhaul of its risk management and auditing functions. This entails strengthening of controls and monitoring, as well as structural changes to its risk measurement and process automation to bring them in line with Citigroup's global practices. It will take time to fully implement these changes in governance, controls and procedures, and for them to effectively permeate the organization. In light of these developments and challenges, Moody's concluded that a baa1 intrinsic credit strength assessment was no longer appropriate for Banamex and so the BCA was lowered to baa2. The baa2 BCA continues to reflect a number of important credit strengths, including strong financial metrics, particularly in terms of capitalization and asset quality; good earnings generation capacity that derives from the bank's large and well diversified Mexican franchise; and ample access to stable core deposits that supports high margins. Downgrade Of Local Currency Deposits Ratings To A3 With Stable Outlook The global local currency deposit rating was downgraded by one notch to A3, reflecting the lowering of Moody's assessment of the bank's intrinsic strength to baa2. Banamex's A3 deposit rating incorporates two notches of uplift derived from Moody's assumptions regarding the probability of systemic support from the Mexican government. Moody's assigns a high probability of systemic support to Banamex in case of stress given the bank's important role as a deposit- taker and lender in Mexico, with market shares of around 17%, as of 1Q2014. Even though Banamex is an important subsidiary for Citigroup, contributing around 17% of the group's revenues, the A3 local currency deposits rating assigned to the Mexican subsidiary incorporates no assumption of group or parental support as Citibank, N.A.'s BCA is the same as Banamex's. The outlook on the debt and deposit ratings remains stable because even if Banamex's standalone ratings weaken further, its debt and deposit ratings are expected to remain at A3 due to systemic support. Ratings On Accival Accival's local currency issuer ratings were downgraded one notch to A3/Prime-2, reflecting the downgrade of Banamex's long-term global local currency deposit rating to A3. The stable outlook on Accival's ratings reflects the stable outlook on Banamex's local currency deposits rating. The principal methodology used in this rating was Global Banks published in May 2013. The period of time covered in the financial information used to determine Banamex's rating is between 01 Jan 2009 and 31 Mar 2014 (source: Moody's, Issuers' financial statements, CNBV and Banxico). The sources and items of information used to determine the rating include 2013 and 2014 interim financial statements (source: Moody's and Issuers' financial statements); year-end 2012 and 2013 audited financial statements (source: Moody's and Issuers' annual audited financial statements); information on market position (source: CNBV); regulatory capital information (source: Banxico). Banamex is headquartered in Mexico City. As of 31 March 2014, the bank reported Mx$1,142 billion in assets. *********** 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 * * *