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                     L A T I N   A M E R I C A

            Wednesday, July 2, 2014, Vol. 15, No. 129


                            Headlines



A R G E N T I N A

ARGENTINA: Faces Deadline for Hedge Fund Payments


B A R B A D O S

BARBADOS: Port Authority To Cut 100 More Public Sector Jobs


B E R M U D A

CENTRAL EUROPEAN MEDIA: S&P Affirms 'B-' CCR; Outlook Negative


B R A Z I L

BANCO MERCANTIL: S&P Lowers LT Global-Scale Rating to 'B'
BANCO PAN: S&P Affirms 'BB/B' Rating, Removes from CreditWatch Neg
BRASIL PHARMA: Moody's Downgrades Global Scale CFR to 'B1'
COSAN SA: Sugar Loses Allure as Firm Turns to Gas
TUPY S.A.: S&P Assigns 'BB-' CCR; Outlook Stable


C A Y M A N  I S L A N D S

CARL LIMITED: Shareholders to Receive Wind-Up Report on July 9
CCP HOLDINGS: Members to Receive Wind-Up Report on July 11
CGMA SPECIAL: Members to Receive Wind-Up Report on Aug. 1
HUANGPU LEASING: Members to Receive Wind-Up Report on July 21
TRAFALGAR SPECIAL: Members Receive Wind-Up Report

UFG CREDIT: Shareholder to Hear Wind-Up Report on July 23
UFG CREDIT MASTER: Shareholder to Hear Wind-Up Report on July 23
UFG DEBT: Shareholder to Hear Wind-Up Report on July 23
UFG DEBT MASTER: Shareholder to Hear Wind-Up Report on July 23
WHITE OAK: Members to Receive Wind-Up Report on Aug. 1


J A M A I C A

JAMAICA: No Benefit Yet for Consumers From Fall in Grain Prices
UC RUSAL: Gets Reprieve to Pursue Refinancing


M E X I C O

HIPOTECARIA SU: Proyectos Deal No Impact on Moody's Caa3 Rating
NOGALES: Moody's Downgrades Issuer Rating to B2/Ba1.mx
XIGNUX S.A.: S&P Affirms 'BB+' Global Scale Rating; Outlook Stable


P U E R T O   R I C O

PUERTO RICO AQUEDUCT: S&P Puts 'BB+' Rev. Bond Rating on Watch Neg
PUERTO RICO AQUEDUCT: Moody's Cuts Revenue Bond Rating to Ba3


                            - - - - -


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A R G E N T I N A
=================


ARGENTINA: Faces Deadline for Hedge Fund Payments
-------------------------------------------------
Peter Eavis, writing for The New York Times' DealBook, reported
that Argentina's government has 30 days to decide whether it
should try to make peace with a group of New York hedge funds that
it has bitterly fought for years in a dispute that could change
the global market for government bonds.

According to the report, the hedge funds, after a series of
important victories in United States courts, have managed to back
Argentina into a daunting legal corner.  Judge Thomas P. Griesa of
the Federal District Court in Manhattan has told the country that
it cannot make payments on its main class of foreign bonds without
also paying the defaulted bonds that the hedge funds hold, the
report related.

Argentina was scheduled to make a payment to its main bondholders
on June 30, the report noted.  The bonds now have a 30-day grace
period in which late payments can be made, the report said.


===============
B A R B A D O S
===============


BARBADOS: Port Authority To Cut 100 More Public Sector Jobs
-----------------------------------------------------------
Jamaica Observer reports that as the Barbados government struggles
to cut costs through a financial structural adjustment program, an
Opposition Member of Parliament (MP) has revealed that other 100-
plus workers may be added to a list of public workers being sent
home.

"On April 16, the Chief Executive Officer of the (state-owned)
Port Authority wrote to (Barbados Workers Union General Secretary)
Sir Roy Trotman, giving him notice that the Port Authority plans
to lay off 100-odd out of the 392 workers; 25 per cent of the Port
workers are propositioned to lose their jobs," the report quoted
MP Edmund Hinckson as saying.

The Barbados Labor Party politician's statement comes against a
backdrop of the Finance Minister Chris Sinckler, announcing in
December that government will lay off some 3,000 public workers,
starting January as part of a program aimed at reducing current
costs, the report notes.

The report relates that there are no official figures on the total
number of workers the administration has sent home to date, but
the figure is believed to be in excess of 2,000.  Following a
consultation visit, the International Monetary Fund -- on whose
advice it is suspected government is cutting staff -- announced in
February that 1,800 were so far severed. Since then a number of
state entities have announced job cuts, many of which are being
disputed by labor unions, the report discloses.

Mr. Hinckson said, "Under the Employment Rights Act, notice was
given to the main union of the workers of the port.  And they were
to enter negotiations on how best this [retrenchment] could be
done," the report notes.

Last September, the report recalls, Barbados began a 19-month
fiscal adjustment program to reduce operating costs, and one plank
of that strategy has been a reduction in Government payroll.


=============
B E R M U D A
=============


CENTRAL EUROPEAN MEDIA: S&P Affirms 'B-' CCR; Outlook Negative
--------------------------------------------------------------
Standard & Poor's Ratings Services said that it had affirmed its
'B-' corporate credit rating on Bermuda-registered TV broadcaster
Central European Media Enterprises Ltd. (CME).  The outlook is
negative.

At the same time, S&P affirmed the 'B-' issue rating on the
EUR240 million senior secured notes due 2017 issued by CME's
subsidiary CET 21 spol.s.r.o. (CET21).

The ratings were removed from CreditWatch negative, where S&P
placed them on Feb. 14, 2014.

S&P withdrew the 'CCC+' issue rating on the EUR273 million notes
due 2016 issued by CME, following their redemption and
cancellation.

S&P revised down its assessment of CME's stand-alone credit
profile (SACP) to 'ccc+' from 'b-' because it expects materially
negative free operating cash flow generation in the course of
2014.  This is the result of the still-fragile advertising
spending environment in CME's countries, the company's need to
adjust its pricing policy in the Czech Republic to grow
advertising revenues, and the normalization of its programming-
cost payables that were delayed for the past few years.

S&P considers that the company's liquidity position improved,
thanks to the $115 million revolving credit facility provided by
Time Warner Inc., as well as cash balances that have allowed the
company to cope with ongoing operating requirements.  However, S&P
believes that liquidity will likely come under pressure relatively
soon, given CME's need to address its 2015 maturity.

In S&P's view, the prospect of sluggish operating performance over
the coming quarters could pose increasing refinancing risk.  Such
risk would make it more difficult for CME to approach investors,
other than Time Warner, to refinance the $261 million of
convertible notes due in November 2015.

S&P assess CME's business risk profile as "weak" and its financial
risk profile as "highly leveraged."  Together, these assessments
lead to a split anchor of 'b' or 'b-' for CME.  S&P chooses the
'b-' anchor to reflect the company's persistently high leverage
and track record of negative cash flow.  The anchor is the
starting point in assigning an issuer credit rating to a company
under S&P's corporate criteria.  S&P subtracts one notch from the
anchor because of its negative view of the company's capital
structure, resulting in a SACP of 'ccc+'.

The one-notch downward adjustment reflects S&P's view of CME's
unsustainable capital structure and the currency risk associated
with the debt.  CME's revenues are generated in local currencies
and their fluctuations might have an impact on debt and credit
metrics, since CME's debt is denominated in euro and U.S. dollar,
and is not hedged for principal.

The rating is one notch higher than the SACP based on S&P's group
rating methodology.  S&P assess CME as a "moderately strategic"
subsidiary for its New York City-based entertainment conglomerate,
Time Warner, based on S&P's view that CME is part of the group's
long-term strategy, and is therefore unlikely to be sold.  S&P do
not consider CME to be "strategically important," based on its
criteria, for two reasons.  First, there are no specific
incentives, such as cross-default clauses or guarantees, which
would require long-term commitment by Time Warner to CME.  Second,
S&P is cautious regarding the medium-term prospects for CME.

The negative outlook reflects S&P's opinion that CME's ability to
refinance its 2015 debt maturity may be limited, absent any
additional financial support from key shareholder Time Warner,
given S&P's anticipation of lackluster improvement in earnings and
substantially negative free cash flow generation over the next few
quarters, as well as S&P's expectation of substantially negative
free cash flow during 2014.

S&P could downgrade CME if we perceive a faster-than-anticipated
deterioration in CME's liquidity over the coming months, mainly
resulting from higher-than-expected cash burn.  S&P could also
lower the rating if CME were to consider debt-restructuring
measures that it would deem tantamount to a default under its
criteria.

A revision of the outlook to stable or other positive rating
action could stem from a material improvement in advertising
spending in the company's key markets that translates into an
EBITDA margin at about 20% and resulting in a significant
improvement of prospects for free cash flow generation.  Such a
scenario could result in improved prospects for refinancing or
financial support from Time Warner to timely meet the group's 2015
debt maturities.


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


BANCO MERCANTIL: S&P Lowers LT Global-Scale Rating to 'B'
---------------------------------------------------------
Standard & Poor's Ratings Services said that it lowered its long-
term global-scale ratings on Banco Mercantil do Brasil S.A. (BMB)
to 'B' from 'B+'.  At the same time, Standard & Poor's lowered its
national-scale rating on the bank to 'brBB+' from 'brBBB'.  The
short-term global-scale ratings remain 'B', and the outlook is
stable.

Standard & Poor's bases its ratings on BMB's "moderate" business
position (as S&P's criteria define it), "weak" capital and
earnings, "moderate" risk position, "below-average" funding, and
"adequate" liquidity.

"Under our bank criteria, we use our BICRA economic risk and
industry risk scores to determine a bank's anchor, the starting
point in assigning an issuer credit rating.  Our anchor for a
commercial bank operating only in Brazil is 'bbb-', based on the
country's economic risk score of '6' and an industry risk score of
'5'.  Brazil's economic risk reflects its low GDP per capita and
only modest growth prospects, which limit household credit
capacity and the country's ability to withstand economic
downturns.  It also considers our view that economic imbalances in
Brazil have increased as a result of rapid credit expansion amid a
slowly growing economy, further increasing the household debt
burden," S&P said.

"Overall, we believe economic imbalances in Brazil will continue
to increase and credit growth will remain hefty (despite the
recent slowdown), especially considering that economic growth has
been sluggish and is not likely to pick up over the next two
years.  In addition, we expect that Brazil's external
vulnerability will rise somewhat over the next several years,
which also contributes to our "high risk" assessment for economic
imbalances.  However, Brazil's moderate leverage in the corporate
sector and the absence of high-risk loans in banks somewhat
mitigate the higher risk factors in our economic risk assessment,"
S&P added.

S&P's industry risk score of '5' reflects its belief that the
industry risks in Brazil's banking sector continue to increase.
In S&P's view, there are growing market distortions due to an
increasing market share of loans from publicly owned banks during
the past two years as well as an increasing gap in the spread
between public and private banks.  These factors have resulted in
falling profitability for the whole system over the same period.
Extensive coverage, effective supervision of the financial system,
and an adequate and stable deposit base offset some of this
industry risk.

S&P continues to view BMB's business position as moderate.  It is
a midsize private bank in Brazil, is publicly listed, and has
operated in Brazil for more than 70 years.  With 13.6 billion
Brazilian real (R$) in assets and R$9.3 billion in loans as of
March 2014, it is the 27th largest bank in Brazil by assets,
according to the central bank's data. BMB accounts for less than
1% of the country's total financial system assets.  The bank
focuses on lending to individuals and small and midsize
enterprises (SMEs), which account for 57% and 43%, respectively,
of its total credit portfolio.

In early 2012, regulatory changes in the payroll deductible
lending segment resulted in revenues from loans assignments no
longer being booked upfront and mandated loan loss provisioning
for assignments with recourse.  Consequently, BMB decided to stop
loan securitizations and launched a new strategy to expand its
payroll operations, which are now fully booked on balance.
Through the acquisition of payrolls in national auctions, BMB was
able to increase its retail portfolio and bring its participation
in the total portfolio to 40% from 38% in 2012.  The bank has a
considerable branch network, which represents a significant
advantage over other small and midsize banks in the country,
giving it a retail characteristic and a better deposits market
share (it ranks as the 16th largest bank by deposits).  As of
March 2014, the bank had 192 branches compared with 171 in June
2012.  It is concentrated in the state of Minas Gerais (42% of its
loan portfolio) and the countryside of Sao Paulo (20%).

S&P's assessment of capital and earnings as weak reflects BMB's
still weak capital ratios and sluggish historical profitability.
According to S&P's Risk-Adjusted Capital Framework (RACF)
methodology, it expects the bank's capital to be below 5% in the
next 18 months, with a small exposure increase but negative
internal capital generation given expected losses stemming from
high loan loss provisioning in 2014.

In 2012, BMB received a capital injection of R$85 million by the
controlling group to comply with minimum regulatory requirements
and give space for growth following the strategy to focus on
payroll deductible lending.  Capital and earnings remain the
bank's main weakness, with bottom-line results dropping again in
2013 and first-quarter of 2014 from a better yearly result is
2012.  This worsening stemmed from significant asset quality
deterioration that required a strong increase in loan loss
provisioning, and S&P expects that this will continue through
2014. BMB's ROA was negative 0.53% as of March 2014 and negative
0.9% in December 2013 compared with positive 0.6% in 2012.

"We revised our assessment of BMB's risk position to "moderate"
from "adequate" due to a significant dip in the bank's loan
portfolio performance, mostly coming from its SMEs segment, and
our expectation that this deterioration will still hurt profits in
2014. NPLs to total loans spiked to 7.82% in March 2014 from 5.76%
in Dec 2013, and NCOs to total loans increased to a higher than
peers 6.01% from 4.57% in December 2013 and 3.95% in December
2012.  At the same time, LLR to NPLs decreased to 93.18% as of
March 2014 from more than 100% as of December 2013.  Most of the
asset quality deterioration came from the SMEs segment, which
considers companies that are more fragile and sensitive to
economic activity, and we believe this segment will continue to
face difficulties in 2014. On the other hand, the bank's credit
portfolio shows no significant single-name concentration, as the
20 largest debtors constituted less than 10% of total credit
portfolio, and when it comes to the economic sector and business,
we don't see any potential problems," S&P said.

"We view the bank's funding as "below average" given its
dependence on time deposits to fund its activities.  However, the
profile of the time deposits is more retail-oriented than that of
other small and midsize banks in the country because of its branch
network, which allows BMB to capture this kind of deposit.  We
believe this is also a reflection of its payroll orientation and
branch origination, which give the bank a more stable client base.
The low use of brokers to originate the payroll loans minimizes
the number of loans that the bank loses to a bank offering a
higher commission.  This allows BMB to have bigger participation
of individuals in its funding base and a less-expensive, more
stable, and more powdered source of funding.  As of March 2014,
17% of the bank's time deposits allowed early withdrawals compared
with 16% as of December 2013," S&P added.

"When we look at BMB's 20 largest depositors, there is no
significant concentration by size, as its profile is more powdered
than that of other Brazilian small and midsize banks.  BMB's
stable funding ratio was above 100% as of December 2013 and March
2014.  Our assessment of its liquidity is "adequate" based on the
maintenance of historical liquidity levels.  As of March 2014,
liquid assets covered 22.4% of total deposits and more than 120%
of the deposits with liquidity condition (December 2013) versus
over 23% and 123%, respectively, as of June 2012.  When we look at
the broad liquid assets to short-term wholesale funding, BMB shows
an adequate position, with an indicator above 2x," S&P noted.

The stable outlook reflects S&P's view that the bank will continue
to expand its payroll-deductible operations while dealing with the
increased underperformance of its SMEs portfolio.  S&P could lower
the ratings again if the bank's business stability is jeopardized
by credit losses, leading to instability in revenues, or if RAC
ratio drops below 4% with further bottom-line losses.  On the
other hand, if the bank is able to improve its asset quality and
stabilize its loan loss provisioning, or if RAC ratio breaches 5%,
we could raise the ratings.


BANCO PAN: S&P Affirms 'BB/B' Rating, Removes from CreditWatch Neg
------------------------------------------------------------------
Standard & Poor's Ratings Services affirmed its 'BB/B' Global
Scale and 'brAA-/brA-1' national scale ratings on Banco Pan S.A.
and removed them from CreditWatch with negative implications where
S&P placed them on March 26, 2014.  The outlook is stable.

"The ratings on Banco Pan reflect its 'bb-' stand-alone credit
profile and its 'strategically important' status to Banco BTG
Pactual S.A. according to our criteria for rating group entities,"
said Standard & Poor's credit analyst Edgard Dias.  S&P's view of
its strategic importance is based on Banco Pan's close integration
with and management from its parent, and S&P's view that it's
unlikely the bank will be sold in the next 18 to 24 months.  As a
result of this support, S&P adds one notch of group support to the
issuer credit rating (ICR) on the Banco Pan.

Banco Pan S.A. is a joint venture between between BTG and Caixa
Economica Federal (Caixa; foreign currency: BBB-/Stable/A-3) BTG
holds 51% of Banco Pan's voting shares and Caixa holds the
remainder.

Banco Pan's SACP reflects its "moderate" business position,
"moderate" capital and earnings, "moderate" risk position,
"average" funding, and "adequate" liquidity.

"Under our bank criteria, we use our BICRA economic risk and
industry risk scores to determine a bank's anchor, the starting
point in assigning an issuer credit rating.  Our anchor for a
commercial bank operating only in Brazil is 'bbb-', based on the
banking sector's economic risk score of '6' and industry risk
score of '5'.  The economic risk reflects Brazil's low GDP per
capita and only modest growth prospects that limit household
credit capacity and the country's ability to withstand economic
downturns.  It also incorporates our view that economic imbalances
have increased as a result of rapid credit expansion amid a slowly
growing economy, further increasing the household debt burden.
Overall we see economic imbalances in Brazil continue to increase
and credit growth remains to be hefty--despite the recent
slowdown--amid sluggish economic growth that's not likely to pick
up in the next two years.  In addition, we expect Brazil's
external vulnerability to rise somewhat over the next several
years, which also contributes to our "high risk" assessment for
economic imbalances. However, the Brazilian corporate sector's
moderate leverage and the absence of high-risk loans somewhat
mitigate the higher risk factors in our economic risk assessment,"
S&P said.

"Our industry risk score of '5' reflects our belief that the
industry risks in Brazil's banking sector continued to increase.
In our view, there are growing market distortions due to an
increasing market share of loans from publicly owned banks during
the past two years, in addition to increasing spread differential
between public and private banks, which have also resulted in the
sector's lower profitability.  Extensive coverage, effective
supervision of the financial system, and an adequate and stable
deposit base support our industry risk assessment," S&P added.


BRASIL PHARMA: Moody's Downgrades Global Scale CFR to 'B1'
----------------------------------------------------------
Moody's America Latina has downgraded Brasil Pharma's corporate
family ratings to B1/Baa3.br from Ba3/A2.br. At the same time,
Moody's revised the ratings outlook to negative from stable.

Ratings downgraded as follows:

Issuer: Brasil Pharma S.A.

Corporate Family Rating: to B1 from Ba3 (global scale); Baa3.br
from A2.br (national scale)

The outlook for the ratings is negative.

Ratings Rationale

The downgrade of Brasil Pharma's ratings to B1/Baa3.br reflects,
on one hand, the recent weak operating performance posted by the
company in the last two quarters and Moody's  expectation that
credit metrics will remain pressured in the near term and, on the
other hand, the company's current tighter liquidity position
following the early redemption of its first and second issuance of
debentures in the amount of BRL 555 million.

Brasil Pharma's ratings are supported by the continued strong
support it receives from its controlling shareholder Banco BTG
Pactual (Baa3, Stable), as evidenced by continued capital
injections in the company, and the positive fundamentals for the
drugstore retail industry in Brazil (aging of the population,
higher disposable income, historically low unemployment rates, low
penetration of healthcare plan beneficiaries and increase in the
offering of generic drugs). The company's geographic footprint,
with large presence in the Northeast and Midwest regions of
Brazil, where growth prospects are high, is an additional credit
positive. Nevertheless, the company's ratings have being
constrained by a longer than expected integration period for its
acquisitions and the expectations of a softer Brazilian
macroeconomic environment.

Brasil Pharma's recent underperformance is related operational
difficulties arising from the integration process, internal
incentive policies and inefficient working capital management.
Accordingly, starting on November 2013, the company took a series
of actions to increase profitability of their store network and
rationalize the use of capital, such as a reassessment of the
commercial policies and clean-up of excess inventory. Such
measures led to a gross margin squeeze and normalization of
working capital consumption in recent quarters. Credit metrics
were meaningfully impacted and adjusted Ebitda margins fell to
0.3% in the LTM ending March 2014, from normalized levels of
around 10%.

As a result, the leverage covenant measured by Net Debt/Ebitda for
both of its debentures was breached for two consecutive quarters
and, since no waiver agreements were reached with debenture
holders, the early redemption of the notes in the amount of BRL
555 million was triggered. Although the prepayment was funded with
the proceeds of a capital increase of BRL 400 million, by
controlling shareholder BTG Pactual, and new loans in the amount
of BRL 230 million, it reduces Brasil Pharma's liquidity cushion
at a time the company is making an effort to turn its operations
around.

The negative outlook incorporates Moody's expectation that Brasil
Pharma's credit metrics will remain weak for its rating category
in the near term, until the company is able to improve
profitability and generate consistent positive free cash flow.

The ratings could be further downgraded if Brasil Pharma is unable
to restore profitability in the next few quarters, or if the
perceived support the company receives from BTG Pactual bank
diminishes. This would be the case if reported Ebitda margin
remains pressured for an extended period of time. Additionally,
negative pressure on the ratings could arise from a liquidity
deterioration and inability to refinance short term debt
maturities.

The ratings could experience upward pressure if improvement is
observed in profitability, liquidity profile and current capital
structure, while the company is able to consolidate its presence
in the Brazilian drugstore sector. Quantitatively, positive
pressure on the ratings would arise if the company delivers
positive free cash flow, if EBITA/interest expense is above 2.25x
and adjusted leverage considering the capitalization of operating
leases remains below 4.5x on a consistent basis.

Founded in 2009 and headquartered in the state of Sao Paulo,
Brasil Pharma S.A. has the BTG Pactual bank as its main
shareholder. The company is among the three largest drugstore
chains in the country in terms of sales and had 723 owned stores
in the south, northeast, north and central-west regions of the
country as of March 31st, 2014. Brasil Pharma also runs a
franchise business under the "Farmais" brand, with 500 stores as
of March 31st, 2014. Net revenues for the LTM period ended March
31st, 2014 amounted to BRL 3.4 billion (approximately USD 1.5
Billion at current exchange rates), with adjusted EBITDA margin of
0.3% (including the capitalization of operating leases).

The principal methodology used in this rating was Global Retail
Industry published in June 2011.

Moody's National Scale Credit Ratings (NSRs) are intended as
relative measures of creditworthiness among debt issues and
issuers within a country, enabling market participants to better
differentiate relative risks. NSRs differ from Moody's global
scale credit ratings in that they are not globally comparable with
the full universe of Moody's rated entities, but only with NSRs
for other rated debt issues and issuers within the same country.
NSRs are designated by a ".nn" country modifier signifying the
relevant country, as in ".mx" for Mexico. For further information
on Moody's approach to national scale credit ratings, please refer
to Moody's Credit rating Methodology published in June 2014
entitled "Mapping Moody's National Scale Ratings to Global Scale
Ratings".


COSAN SA: Sugar Loses Allure as Firm Turns to Gas
-------------------------------------------------
Gerson Freitas Jr. at Bloomberg News reports that Cosan SA, which
controls top producer Raizen Energia SA in a joint venture with
Royal Dutch Shell Plc, is cutting investments in sugar cane amid a
global glut of the sweetener and Brazilian government policies
that hold down the price of ethanol, Chief Financial Officer
Marcelo Martins said in an interview.  Returns on capital from the
company's sugar and ethanol operations have plunged to below 10
percent, he said, according to Bloomberg News.

"Reinvestment in the sector will be made only if returns become
satisfactory and we don't see it happening now," Mr. Martins said
at Bloomberg's office in Sao Paulo.  "Returns need to rise to more
than 15 percent to make investments attractive again," Mr. Martins
added.

Cosan SA is hunkering down in the industry where it began as it
carries out a four-year expansion into gasoline and natural-gas
distribution, service stations and railroads, Bloomberg News
notes.  Sugar and ethanol account for about 20 percent of the Sao
Paulo-based company's earnings before interest, taxes,
depreciation and amortization now, down from about 73 percent in
2010, Bloomberg News relates.

Bloomberg News said that will fall further after Cosan completes
its $3 billion, all-stock acquisition of ALL -- America Latina
Logistica, Latin America's largest railroad operator.

                       Prices Bottoming

Cia. de Gas de Sao Paulo, the gas-distribution company known as
Comgas, which Cosan bought control of in November 2012, accounts
for the biggest stake at 35 percent of ebitda, Bloomberg News
relays.

Bloomberg News discloses that sugar futures in New York touched a
four-year low in late January and have since rebounded 14 percent.
While Mr. Martins sees global stockpiles shrinking and prices
bottoming out, the fundamentals of the industry remain the same,
notes the report.

"The sector is going through a very difficult phase, perhaps the
worst in 15 to 20 years," Mr. Martins said, adding that Cosan SA
is weathering the downturn better than peers because it boosted
cash generation through biomass power generation and ethanol
trading, Bloomberg News relates.  "We diversified our energy
business and countered the volatility in sugar and ethanol,"
Bloomberg News qouted Mr. Martins as aaying.

"This strategy proved right," Andre Facury, an analyst at Perfin
Investimentos in Sao Paulo, said by telephone, Bloomberg News
discloses.  "That's what prevented the sugar and ethanol business
from having a negative cash flow over recent years," Mr. Facury
added.

Cosan SA shares have lost 7.3 percent in the past year, Bloomberg
News relates.

Sugar millers across Brazil, which makes up almost half of the
world's exports, are facing cash shortages after expansions
overshot demand, Bloomberg News notes.  While about two-thirds of
the cars in Brazil can run on either ethanol or gasoline,
producers are limited in what they can charge for the alternative
fuel because government policies keep gasoline prices artificially
low, Bloomberg News relates.

                        'No Consolidators'

"There should be consolidation as this is a very fragmented
sector, but there are no consolidators," the report quoted Mr.
Martins as saying, adding that Raizen, which accounts for more
than 50 percent of Brazil's ethanol exports, is the only major
potential consolidator.  "We don't rule out acquisitions in the
future, but it would have to bring a lot of value to our portfolio
in order for us to consider them," Mr. Martins said.

The growing number of mills facing financial constraints may
create merger and acquisition opportunities for big producers once
sugar and ethanol prices start to recover, Alexandre Figliolino,
Itau BBA's director for sugar and ethanol, said in a phone
interview last month, Bloomberg News recalls.   "Brazil's sugar
industry will become more competitive after that," Mr. Figliolino
said.

While current conditions remain unfavorable, the long-term outlook
is positive as land and biomass availability gives Brazil a
natural advantage in ethanol production, said Mr. Martins said,
notes Bloomberg News.

"Brazil lost an opportunity," Mr. Martins said about the slowdown
in the nation's ethanol and sugar industry, Bloomberg News
discloses.  "But it hasn't yet lost the game."

                          About Cosan SA

Headquartered in Sao Paulo, Brazil, Cosan S.A. Industria e
Comercio, through its subsidiaries, engages in the production and
sale of sugar and ethanol primarily in Brazil, Europe, the Middle
East, Asia, and North America.  Cosan S.A. is a subsidiary of
Cosan Limited.  The company was founded in 1936 and is
headquartered in Sao Paulo, Brazil.

                           *     *     *

As reported in the Troubled Company Reporter-Latin America on
Feb. 27, 2014, Fitch maintains Cosan SA's Foreign and local
currency IDRs at 'BB+'.


TUPY S.A.: S&P Assigns 'BB-' CCR; Outlook Stable
------------------------------------------------
Standard & Poor's Ratings Services assigned its 'BB-' corporate
credit rating on Tupy S.A. on the global scale, and 'brA'
Brazilian national scale rating.  The outlook is stable.

The rating on Tupy reflects S&P's assessment of the company's
"weak" business risk profile and "significant" financial risk
profile.  Tupy has a leading position as a supplier of cast iron
blocks and heads, which are key components for the automotive
industry.  The company has a long track record of developing
custom-built casting solutions that has allowed it to develop
cost-efficient and high-tech processes for its main products.
This expertise enables the company to have an adequate operating
efficiency and high profitability.

"However, we view Tupy's limited product diversification;
significant client concentration; and somewhat small scale of
operations, when compared to other global auto suppliers, as
constraining factors in our assessment of Tupy's business risk
profile.  But we expect the company to remain an important
counterparty to its most important clients, reducing substitution
risk, and allowing for more predictable cash flows from these
contracts.  At the same time, we believe that the company's
prudent financial policies and conservative growth strategy will
also support improving credit metrics over the next few years,"
S&P said.

Tupy has a strong market position as a producer of iron blocks and
heads in the main markets it competes (Brazil, North America, and
Europe).  In addition, the fact that its contracts are profitable
and allow for cost pass through and some adjustment for currency
variation supports its rating.  These benefits lead to the company
having stronger EBITDA margins than its peers, while maintaining
fairly predictable and stable cash flows.  Furthermore, S&P
expects Tupy to generate resilient cash flows from diverse product
lines such as hydraulic components for high pressure applications
(liquid and gas transport), and other auto-parts.  S&P also
expects the company to remain well positioned in the CGI
(compacted graphite iron) blocks segment, as the market trends to
more durable and lower cost components with similar weight to
aluminum.

S&P considers Tupy's credit metrics will be in line with a
"significant" financial risk profile for the next few years.
Nevertheless, S&P expects Tupy's leverage ratios to gradually
improve as it benefits from increasing revenues due to better
contract conditions in its Mexican facilities, amid conservative
investment policies.  The company has been very conservative in
its growth and acquisitions strategies, and S&P expects that to
continue.  Also, Tupy's leverage profile has improved in 2013
after it completed a share issuance and devoted part of the
resources to pay down debt and strengthen its cash position.
Total debt to EBITDA and funds from operations (FFO) to debt
reached 3.4x and 21.1%, respectively in March 2014, compared to 5x
and 15.1% a year ago.

As noted, S&P's base case points to stronger metrics in the next
three years despite the fact that it expects demand for Tupy's
main products to grow only slightly in the next few years.  S&P
projects market conditions will remain challenging as economic
activity in Brazil continues to slow down, resulting in decreasing
demand for light, commercial, and off-road vehicles in the
country.  Moreover, there is still some idle capacity of off-road
equipment in the U.S., and S&P expects demand for light and
commercial vehicles in that market to be modest.  On the other
hand, S&P expects Tupy to continue improving its results from the
plants acquired in 2012 in Mexico, as S&P expects the company to
continue to successfully renegotiate the contracts with the
clients supplied by those facilities.

Other main assumptions include:

   -- Economic activity in Brazil will remain slow, with GDP
      growing by 1.8% in 2014 and 2% in 2015;

   -- U.S. GDP to grow by 2.5% and 3.2% in 2014 and 2015,
      respectively;

   -- Exchange rates to remain around Brazilian real (R$) 2.5 per
      U.S. dollar;

   -- Sales to North America will continue to account for about
      50% of total revenues;

   -- Slight increase in demand in Europe as economies continue to
      recover;

   -- Slow new vehicles production in Brazil; and

   -- Some cost and currency variation pass through to the
      clients.

Based on these assumptions, S&P arrives at the following credit
measures:

   -- Total debt to EBITDA of about 3.5x in 2014 and 2.5x in 2015;
   -- FFO to debt about 20% in 2014 and more than 25% in 2015;
   -- Positive free operating cash flow (FOCF) in 2014 of about
      R$100 million, and greater than R$200 million in 2015.

S&P assess Tupy's liquidity as "adequate".  The company had R$1.1
billion of cash in March 2014, and short-term debt of R$284
million.  Furthermore, S&P expects the company to increase its
cash flows in the next year, with no significant investments
planned for the period.

In S&P's liquidity analysis, it considered the following factors
and assumptions:

   -- Sources of liquidity, including cash position and FFO, will
      be greater than uses of liquidity (such as debt
      amortizations, capital expenditures, working capital needs,
      and dividend distribution) by more than 1.2x in the next 24
      months;

   -- Capital expenditures of about R$250 million in 2014, but
      with some flexibility; and

   -- Dividends are expected to remain at the minimum level of 25%
      in the next few years.

S&P also considers that the company's exposure to foreign
currencies can lead to some volatility in liquidity metrics amid
currency swings, but Tupy's robust cash reserves provide
significant cushion virtually under any scenario.  Furthermore,
S&P believes that the company has a positive relationship with
relevant financial institutions in Brazil, especially BNDES (Banco
Nacional do Desenvolvimento Econ“mico e Social), who is also a
main shareholder.

The stable outlook reflects S&P's expectation that the company's
operating performance will remain sound while it gradually
improves its credit metrics.  S&P also believes that Tupy's
protective contract model will allow the company to pass through
cost increases and potential swings in currencies, providing for
cash flow stability.

S&P would raise the ratings on Tupy if market conditions are
better than its expectations, allowing the company to consistently
strengthen its credit metrics.  A higher rating would also include
the company sustaining its debt-to-EBITDA ratio at less than 3x,
FFO to debt at more than 30%, and FOCF to debt in the 15%-20%
level.

A potential downgrade may follow a deterioration in the financial
risk profile, evidenced by its debt-to-EBITDA ratio being more
than 4x and FFO to debt less than 20%, absent mitigating factors.
Such a scenario may result from external causes such as market
conditions deteriorating rapidly, or a more-aggressive competitive
landscape; or internal causes such as the company pursuing more-
aggressive financial policies.


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


CARL LIMITED: Shareholders to Receive Wind-Up Report on July 9
--------------------------------------------------------------
The shareholders of Carl Limited will receive on July 9, 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:

          Delta FS Limited
          c/o J.Aljadir
          Telephone: (345) 743 6626
          103 South Church St., 4th Floor, Harbour Place
          P.O. Box 11820, George Town
          Grand Cayman KY1-1009
          Cayman Islands


CCP HOLDINGS: Members to Receive Wind-Up Report on July 11
----------------------------------------------------------
The members of CCP Holdings SPC will receive on July 11, 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:

          Stuart Sybersma
          c/o Grant Hiley
          Deloitte & Touche
          Citrus Grove Building, 4th Floor
          Goring Avenue, George Town KY1-1109
          Cayman Islands
          Telephone: +1 (345) 814 2353
          Facsimile: +1 (345) 949 8258


CGMA SPECIAL: Members to Receive Wind-Up Report on Aug. 1
---------------------------------------------------------
The members of CGMA Special Accounts II, LLC will receive on
Aug. 1, 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
          c/o Nicola Cowan
          dms House, 2nd Floor
          P.O. Box 1344 Grand Cayman KY1-1108
          Cayman Islands
          Telephone: (345) 946 7665
          Facsimile: (345) 949 2877


HUANGPU LEASING: Members to Receive Wind-Up Report on July 21
-------------------------------------------------------------
The members of Huangpu Leasing Limited will receive on July 21,
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:

          Benjamin Booker
          69 Dr. Roy's Drive
          P.O. Box 1043, George Town Grand Cayman KY1-1102
          Cayman Islands


TRAFALGAR SPECIAL: Members Receive Wind-Up Report
-------------------------------------------------
The members of Trafalgar Special Situations Fund (Offshore)
Limited received on May 29, 2014, the liquidator's report on the
company's wind-up proceedings and property disposal.

The company's liquidator is:

          Lee Robinson
          Standbrook House
          2-5 Old Bond Street
          London
          W1S 4PD
          United Kingdom
          Telephone: +44 207 079 1094


UFG CREDIT: Shareholder to Hear Wind-Up Report on July 23
---------------------------------------------------------
The sole shareholder of UFG Credit Opportunities Fund Ltd. will
hear on July 23, 2014, at 9:00 a.m., the liquidator's report on
the company's wind-up proceedings and property disposal.

The company's liquidator is:

          Ogier
          c/o Piers Dryden
          Telephone: (345) 949-9876
          Facsimile: (345) 949-9877


UFG CREDIT MASTER: Shareholder to Hear Wind-Up Report on July 23
----------------------------------------------------------------
The sole shareholder of UFG Credit Opportunities Master Fund Ltd.
will hear on July 23, 2014, at 9:15 a.m., the liquidator's report
on the company's wind-up proceedings and property disposal.

The company's liquidator is:

          Ogier
          c/o Piers Dryden
          Telephone: (345) 949-9876
          Facsimile: (345) 949-9877


UFG DEBT: Shareholder to Hear Wind-Up Report on July 23
-------------------------------------------------------
The sole shareholder of UFG Debt Fund Ltd. will hear on July 23,
2014, at 9:30 a.m., the liquidator's report on the company's wind-
up proceedings and property disposal.

The company's liquidator is:

          Ogier
          c/o Piers Dryden
          Telephone: (345) 949-9876
          Facsimile: (345) 949-9877


UFG DEBT MASTER: Shareholder to Hear Wind-Up Report on July 23
--------------------------------------------------------------
The sole shareholder of UFG Debt Master Account Ltd. will hear on
July 23, 2014, at 9:45 a.m., the liquidator's report on the
company's wind-up proceedings and property disposal.

The company's liquidator is:

          Ogier
          c/o Piers Dryden
          Telephone: (345) 949-9876
          Facsimile: (345) 949-9877


WHITE OAK: Members to Receive Wind-Up Report on Aug. 1
------------------------------------------------------
The members of White Oak Strategic Master Fund II, L.P will
receive on Aug. 1, 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
          c/o Nicola Cowan
          Telephone: (345) 946 7665
          Facsimile: (345) 949 2877
          dms House, 2nd Floor
          P.O. Box 1344 Grand Cayman KY1-1108
          Cayman Islands


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



JAMAICA: No Benefit Yet for Consumers From Fall in Grain Prices
---------------------------------------------------------------
RJR News reports that despite declines in the cost of corn and
wheat on the international market, Jamaican consumers will not see
immediate reductions in food prices.

The price of corn fell 15 per cent in the April to June quarter
while wheat was down 17 per cent, according to RJR News.  The
price of both commodities declined as stockpiles of the grains
rose, the report relates.

Jamaica Broilers Group is projecting that this could result in a
reduction in the prices of some of its products, but not in the
short term, the report notes.

In that regard, RJR News discloses that Ian Parsard, Vice
President for Finance and Energy at Jamaica Broilers, pointed to
the continued slide in the value of the Jamaican dollar.

"Looking at both things in context, it's difficult to give a
precise answer at this point in time," the report quoted Mr.
Parsard as saying.

Nevertheless, Mr. Parsard argued, "we do feel that things are
pretty much in a balance now in terms of the reduction in grain
prices being almost matched equally by the devaluation of the
dollar," RJR News relates.

That being the case, Mr. Parsard said, consumers should not see
"an immediate price increase," the report notes.

Beyond that, he would only express a wish that that there could be
a price reduction, "if there is some stability in the dollar," RJR
News adds.


UC RUSAL: Gets Reprieve to Pursue Refinancing
---------------------------------------------
RJR News reports that UC Rusal has won another reprieve from
lenders, extending a deadline to refinance US$3.6 billion in debt
to October while it seeks court approval for a debt restructuring
that is being blocked by a few creditors.

The Russian conglomerate is a major investor in Jamaica's
bauxite/alumina sector.

Without the extension, UC Rusal, which earnings hit by a slump in
aluminum prices, would have faced default on July 7, according to
RJR News.

The company said 94 per cent of lenders had backed the
restructuring, but in the absence of unanimous support, it would
apply to UK courts to approve a scheme of arrangement to implement
the debt deal, the report notes.

The aluminum producer said schemes of arrangement through British
courts had become an important restructuring tool, the report
relates.

UC Rusal controls 65 per cent of Jamaica's alumina production
capacity and operates three of the island's four alumina
refineries.

                             *     *     *

As reported in the Troubled Company Reporter-Latin America on
March 31, 2014, RJR News said that UC Rusal reported a massive
increase in net losses in the year to December 31.  This was due
mainly to a large impairment cost and one-off restructuring
charges combined with lower production and a fall in aluminum
prices, according to RJR News.

The report noted that the company reported a net loss of US$3.2
billion.  It suffered a US$528 million loss in 2012.


===========
M E X I C O
===========


HIPOTECARIA SU: Proyectos Deal No Impact on Moody's Caa3 Rating
---------------------------------------------------------------
Moody's Investors Service says that, as of June 13, 2014, it is
not downgrading or withdrawing its ratings on Hipotecaria Su
Casita - Cross-border, Class A Insured Residential Mortgage Backed
Floating Rate Notes solely as a result of the execution of
transfer the primary servicing of the mortgage loans that back the
transaction from Patrimonio, S.A. de C.V. to Adamantine Servicios,
S.A. de C.V.

The controlling beneficiary must approve the proposal, to appoint
Adamantine Servicios as substitute primary servicer before
execution of a new servicing agreement.

The affected certificates and their ratings are as follows:

-- Hipotecaria Su Casita - Cross-border, Class A Insured
Residential Mortgage Backed Floating Rate Notes, rating of B2 (sf)
(Global Scale, Foreign Currency). The notes' underlying rating
(reflecting the notes' intrinsic credit quality absent the
financial guarantee that MBIA Insurance Corporation provides) is
currently Caa3 (sf).

In response to Proyectos Adamantine's request, Moody's analyzed
the credit impact of the proposed amendment. Moody's opinion, as
of this date, reflects only the credit impact of the proposed
amendment; its opinion is not determination as to whether any such
amendments could have an adverse effect unrelated to credit risk
on any security holder. Further, this opinion does not preclude a
future downgrade or withdrawal of the current ratings for any
reason.

Moody's believes that the substitute servicer's ability to prevent
further deterioration in the certificates' pools will be of great
importance. To assess the magnitude of the risks, Moody's
considered the following key factors and evaluated how they apply
to the specific circumstances of each transaction:

1) The quality of the pools has already deteriorated and
Adamantine Servicios has little leeway to avoid the kind of short-
term spike in early delinquencies that could follow a servicing
transfer and translate into long-term serious delinquencies.

2) Because the proportion of Patrimonio-serviced loans in the
different securitized pools, Adamantine Servicios will have to
escalate its operational capacity quickly to support the servicing
of the transferred pools.

These risks are mitigated by the following:

1) Adamantine Servicios' quality and stability as servicer,
compared to Patrimonio's

2) the impact of a servicing fee scheme that is predicated on the
loans' delinquency status and provides the servicer with an
incentive to recover non-performing loans by either making them
re-performing or expediting foreclosure

The certificates' ratings already take into account the potential
impact of these risks.

Moody's also considered the fact that Adamantine Servicios has
devised a preliminary strategy for collaboration between the
parties involved, the transfer of the critical portfolio servicing
data and physical loan files, and the borrower notification
process.

The Hipotecaria Su Casita - Cross-border, Class A certificates
benefit from a financial guaranty insurance policy issued by MBIA
Insurance Corporation. The financial guarantee policy covers
timely interest payments, providing yet more protection to the
certificates.

Moody's opinion was based in part on information that Adamantine
Servicios provided, as well as the agency's expectations regarding
the impact of a servicing transfer on pool performance, mortgage
collections, and the trust's ability to make timely interest
payments on the affected securities.


NOGALES: Moody's Downgrades Issuer Rating to B2/Ba1.mx
------------------------------------------------------
Moody's de Mexico downgraded the issuer rating of the Municipality
of Nogales to B2/Ba1.mx from B1/Baa2.mx. At the same time, Moody's
changed the outlook to stable from negative.

Ratings Rationale

Rationale For Rating Downgrade TO B2/Ba1.mx from B1/Baa2.mx

The downgrade of Nogales' rating reflects a much higher than
expected increase in financial debt, the persistent recording of
cash financing deficits, and the municipality's structural
weakness to adjust expenditures. Nogales' debt increased sharply
to 99.4% of operating revenues in 2013 from 65.1% in 2012 and now
represents the highest level among Moody's-rated Mexican
municipalities. Similarly, between 2009 and 2013, Nogales' cash
financing deficit averaged 12.6% of total revenue, a level below
B1-rated Mexican peers.

Last year's increase in the municipality's debt levels was mainly
due to the refinancing of financial and previously unrecorded non-
financial liabilities. While the municipality's liquidity position
improved temporarily, ongoing expenditure pressures will drive the
municipality's liquidity position back to its historically weak
levels.

Between 2009 and 2013, Nogales' total expenditures increased by a
compound annual growth rate of 5%, outpacing revenue growth of 3%
over the same period. Moody's views that current and capital
expenditures pressures will continue to affect Nogales cash
financing results and translate in even higher debt levels over
the medium term.

Rationale For The Stable Outlook

The terms of the refinancing include a grace period ending at the
end of 2015. This will ease budgetary pressures on the
municipality for the next 18 to 24 months.

What Could Change The Rating Up/Down

A continuous improvement in the municipality's operating and
consolidated balances could exert upward pressures on the
municipality's ratings. Conversely, the continuous registry of
operating and consolidated deficits, further deterioration in the
municipality's liquidity or an increase in debt levels, could
exert downward pressure on Nogales' ratings.

The principal methodology used in this rating was Regional and
Local Governments published in January 2013.

The period of time covered in the financial information used to
determine the Municipality of Nogales's rating is between 01
January 2009 and 31 December 2013.

Moody's National Scale Credit Ratings (NSRs) are intended as
relative measures of creditworthiness among debt issues and
issuers within a country, enabling market participants to better
differentiate relative risks. NSRs differ from Moody's global
scale credit ratings in that they are not globally comparable with
the full universe of Moody's rated entities, but only with NSRs
for other rated debt issues and issuers within the same country.
NSRs are designated by a ".nn" country modifier signifying the
relevant country, as in ".mx" for Mexico. For further information
on Moody's approach to national scale credit ratings, please refer
to Moody's Credit rating Methodology published in October 2012
entitled "Mapping Moody's National Scale Credit Ratings to Global
Scale Credit Ratings".


XIGNUX S.A.: S&P Affirms 'BB+' Global Scale Rating; Outlook Stable
------------------------------------------------------------------
Standard & Poor's Ratings Services said it has affirmed its 'BB+'
global scale and 'mxA+' national scale corporate credit ratings on
Xignux S.A. de C.V.  The outlook is stable.  The rating
affirmation follows S&P's ordinary annual review.

The ratings on Xignux continue to reflect S&P's assessment of the
company's business risk profile as "fair" and its financial risk
profile as "significant," as defined in S&P's criteria.  This
results in a 'bb' anchor to which S&P adds one notch for its
"positive" comparable rating analysis because.  "In our opinion,
the food business provides a differentiation factor not fully
accounted for in our cable business peer comparison," said
Standard & Poor's credit analyst Francisco Gutierrez.  No other
modifier affects the ratings.

S&P also believes the business risk profile will remain
constrained mostly by the cyclicality of most of the company's end
markets; the resilient nature of the food business division;
exposure to raw-material price volatility (particularly for
copper); and a weaker competitive position than its peers have in
the global cable and wire industry.

Xignux is a diversified holding company.  Its subsidiaries
manufacture a variety of products, mostly for industrial markets.
The company sells electrical wire and cable, electrical power and
distribution transformers, and food products.

The stable outlook reflects S&P's expectation that the company
will reach a debt-to-EBITDA ratio of less than 2.5x and FFO to
debt above 20% for 2014 and 2015, despite soft global economic
conditions, mostly because of improved performance in the
company's food and cable businesses, its leading market positions,
and recovery in demand at its end users.

S&P could lower the rating by one notch if the company fails to
meet the above-mentioned ratios, which would be consistent with a
scenario of margins below 5.5%.

An upgrade is unlikely at this point because the company's
business risk profile constrains the ratings, particularly its
weaker competitive position than that of its peers, and its
exposure to raw-material price volatility, especially for copper.


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


PUERTO RICO AQUEDUCT: S&P Puts 'BB+' Rev. Bond Rating on Watch Neg
------------------------------------------------------------------
Standard & Poor's Ratings Services said it placed its 'BB+'
ratings on Puerto Rico Aqueduct & Sewer Authority's (PRASA)
revenue bonds, guaranteed by the Commonwealth of Puerto Rico, on
CreditWatch with negative implications.

"The CreditWatch placement reflects our similar action on the
general obligation (GO) debt rating the commonwealth on June 27,
2014," said Standard & Poor's credit analyst Theodore Chapman.

"We expect to resolve the CreditWatch status in step with our
review of the GO rating on Puerto Rico, although this could occur
sooner if PRASA were to indicate it may pursue a restructuring of
its debt under a new law in the next 90 days.

The CreditWatch placement affects PRASA's series 2008A and 2008B
revenue bonds, of which there are about $285 million outstanding.
PRASA also has approximately $874.3 million outstanding in other
commonwealth-backed obligations, mainly U.S. Department of
Agriculture's Rural Development loans, as well as the Puerto Rico
Infrastructure Financing Authority loans, none of which are rated
by Standard & Poor's.

The 'BB+' ratings on the authority's senior-lien revenue bonds --
series 2008 and 2012A and B, secured by a gross revenue pledge of
PRASA, with about $3.4 billion total outstanding -- are also
affected by the CreditWatch action.  Those bonds are on
CreditWatch because PRASA is a governmental-sponsored enterprise.
By applying S&P's governmental-related entity criteria, and
because of PRASA's important role and strong link with the
commonwealth, a downgrade of Puerto Rico's GO debt would cause a
downgrade in PRASA's revenue bonds.

PRASA's stand-alone credit profile remains 'bb+', which reflects
S&P's view of the authority's general creditworthiness solely on
its own fundamentals, absent any uplift or headwinds associated
with its relationship with the general government.


PUERTO RICO AQUEDUCT: Moody's Cuts Revenue Bond Rating to Ba3
-------------------------------------------------------------
Moody's Investors Service has lowered ratings assigned to bonds
issued by two of Puerto Rico's largest public authorities -- the
Puerto Rico Aqueduct & Sewer Authority (PRASA) and the Puerto Rico
Highway & Transportation Authority (PRHTA). The rating on PRASA's
revenue bonds was downgraded to Ba3 from Ba2. PRHTA's Highway
Revenue Bonds (1968 Resolution) were downgraded to Ba3 from Ba1.
The Transportation Revenue Bonds (1998 Resolution) were downgraded
to Ba3 from Ba2, and the Subordinate Transportation Revenue Bonds
were downgraded to B1 from Ba3. The ratings on all remain under
review for possible further downgrade. On June 26, the Puerto Rico
Electric Power Authority (PREPA) was downgraded to Ba3, on review
for further downgrade, from Ba2.

Downgrades Follow Commonwealth Legislation Allowing Restructuring

The rating downgrades for both PRHTA and PRASA reflect the
commonwealth's declaration of intent -- through legislation -- to
allow restructuring of public corporation liabilities, which
demonstrates a willingness and ability to repay obligations that
is weaker than the commonwealth's full faith and credit. The
governor's proposal of a public corporation liability law (the
Puerto Rico Public Corporations Debt Enforcement and Recovery Act)
earlier this week signals a rising risk that the commonwealth (GO
bonds rated Ba2, negative) is contemplating a strategic
restructuring of its public corporation debt. Public corporations
(including PRHTA and PRASA) that could restructure debt under the
proposed law should no longer carry credit ratings equal to those
of the commonwealth's general obligation (GO) debt. Moody's
acknowledges that PRHTA and PRASA have taken steps toward self-
sufficiency by raising revenues, and that while their internal
liquidity is weak, they do not face immediate liquidity needs that
would force them to seek near-term debt restructuring. However,
the downgrades further recognize that these entities have longer-
term hurdles, including reduced ability to raise new operating
revenues or to impose austerity measures, given the island's weak
economy and their own high debt burdens. PRASA also faces
substantial capital needs for non-discretionary projects to meet
environmental mandates.

Review Will Focus On Possibility Of Default Via Restructuring
Under New Law

During its review, Moody's will evaluate the degree to which the
new law affects the likelihood of a default through a debt
exchange or other restructuring that could result in an economic
loss for PRHTA or PRASA's bondholders. Evidence that the proposed
legislation is intended to be used to restructure debt of PRASA or
PRHTA probably will push the entities' ratings lower still.
Moody's will also focus on the fundamental credit positions of
PRHTA and PRASA, including their fiscal 2015 budgets, capital
needs and financing plans. Emergence of severe liquidity strains
also may drive future downgrades, as would lack of market access
for critical capital or liquidity needs. Additionally, Moody's
review will consider the implications of the specific revenue
pledges that support each bond series in light of the
restructuring law.

Restructuring Law Would Maintain 'Essential Services' For Puerto
Rico Citizens

On June 25, the governor of Puerto Rico announced legislation that
would provide certain debt-issuing authorities in financial
distress with the ability to restructure their liabilities, first
through negotiation with bondholders and, failing that, under
supervision of a commonwealth court. The law is needed to ensure
"the continuity of essential services to the citizens" of Puerto
Rico, according to a press release from the government. This
statement indicates that commonwealth government officials will
not prioritize public corporations' debt service obligations over
their core responsibility, which is to provide essential services
at reasonable cost to the public.

Proposed Debt Law Would Facilitate Restructurings Of Public
Corporations' Debts

The Puerto Rico Public Corporations Debt Enforcement and Recovery
Act, which has reportedly been passed by the legislature and is
likely to be signed by the governor imminently, paves the way for
certain corporations (including PRHTA and PRASA) to negotiate new
debt terms with bondholders or, failing that, to seek local court
approval of restructuring. The impetus for this legislation
appears to be the high leverage and strained finances of Puerto
Rico's public corporations and the diminished ability of the
commonwealth and Government Development Bank (GDB) to support
these companies without severely compromising their own liquidity.
Until now, commonwealth officials had not publicly advocated steps
that would facilitate potential future restructurings of public
corporation debts.

Restructuring Law Highlights Pressures On Government To Conserve
Cash

Implications for other debt-issuing entities of the commonwealth
at this point are less clear. In advocating the potential for
public corporation debt restructuring, the governor emphasized
Puerto Rico's commitment to paying the central government's debt.
As described in the government's press release, the law would
apply neither to the commonwealth nor its fiscal agent, the
Government Development Bank (GDB), both of which are rated Ba2,
negative. Likewise, the Sales Tax Financing Corp. (COFINA), with
senior- and subordinate-lien debt rated Baa1 and Baa2 negative,
also could not seek new debt terms. The new law would have the
potential to protect the central government's liquidity from
demands of the public corporations and, by extension, its ability
to honor GO debt. At the same time, the preparation of a legal
path to debt restructuring underscores the liability and economic
pressures that face the commonwealth as a whole. As more
information about the commonwealth corporations' debt management
initiatives becomes available, Moody's will factor it into our
ratings on the entities that may seek to restructure, as well as
the commonwealth itself.

Rating Methodology

The principal methodology used in this rating was US States Rating
Methodology published in April 2013. An additional methodology
used in rating the Puerto Rico Highway and Transportation
Authority bonds was US Public Finance Special Tax Methodology
published in January 2014. An additional methodology used in
rating the Puerto Rico Aqueduct and Sewer Authority bonds was
Analytical Framework For Water And Sewer System Ratings published
in August 1999.


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Monday's edition of the TCR-LA delivers a list of indicative
prices for bond issues that reportedly trade well below par.
Prices are obtained by TCR-LA editors from a variety of outside
sources during the prior week we think are reliable.   Those
sources may not, however, be complete or accurate.  The Monday
Bond Pricing table is compiled on the Friday prior to publication.
Prices reported are not intended to reflect actual trades.  Prices
for actual trades are probably different.  Our objective is to
share information, not make markets in publicly traded securities.
Nothing in the TCR-LA constitutes an offer or solicitation to buy
or sell any security of any kind.  It is likely that some entity
affiliated with a TCR-LA editor holds some position in the
issuers' public debt and equity securities about which we report.

Tuesday's edition of the TCR-LA features a list of companies with
insolvent balance sheets obtained by our editors based on the
latest balance sheets publicly available a day prior to
publication.  At first glance, this list may look like the
definitive compilation of stocks that are ideal to sell short.
Don't be fooled.  Assets, for example, reported at historical cost
net of depreciation may understate the true value of a firm's
assets.  A company may establish reserves on its balance sheet for
liabilities that may never materialize.  The prices at which
equity securities trade in public market are determined by more
than a balance sheet solvency test.

Submissions about insolvency-related conferences are encouraged.
Send announcements to conferences@bankrupt.com


                            ***********


S U B S C R I P T I O N   I N F O R M A T I O N

Troubled Company Reporter-Latin America is a daily newsletter
co-published by Bankruptcy Creditors' Service, Inc., Fairless
Hills, Pennsylvania, USA, and Beard Group, Inc., Washington, D.C.,
USA, Marites O. Claro, Joy A. Agravante, Rousel Elaine T.
Fernandez, Valerie U. Pascual, Julie Anne L. Toledo, and Peter A.
Chapman, Editors.

Copyright 2014.  All rights reserved.  ISSN 1529-2746.

This material is copyrighted and any commercial use, resale or
publication in any form (including e-mail forwarding, electronic
re-mailing and photocopying) is strictly prohibited without prior
written permission of the publishers.

Information contained herein is obtained from sources believed to
be reliable, but is not guaranteed.

The TCR Latin America subscription rate is US$775 per half-year,
delivered via e-mail.  Additional e-mail subscriptions for members
of the same firm for the term of the initial subscription or
balance thereof are US$25 each.  For subscription information,
contact Peter A. Chapman at 215-945-7000 or Nina Novak at
202-241-8200.


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