/raid1/www/Hosts/bankrupt/TCRLA_Public/140904.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, September 4, 2014, Vol. 15, No. 175
Headlines
A R G E N T I N A
GENERACION INDEPENDENCIA: Moody's Rates ARS40MM Notes Caa1/Baa3.ar
B E R M U D A
GOLDEN STATE II: S&P Puts Prelim. BB+(sf) Rating on Class A Notes
TOWER GROUP (BERMUDA): A.M. Best Cuts Issuer Credit Rating to 'c'
B R A Z I L
GOL LINHAS: S&P Assigns 'B-' Rating on Unit's Proposed Sr. Notes
OSX BRASIL: In Talks With Creditors to File New Recovery Plan
C A Y M A N I S L A N D S
CAYMAN CAPITAL: Commences Liquidation Proceedings
CHIMICHANGA CORP: Creditors' Proofs of Debt Due Sept. 30
COBALT LIMITED: Creditors' Proofs of Debt Due Sept. 16
CSN ISLANDS VIII: Commences Liquidation Proceedings
FOUNDER CHINA GENPAR: Commences Liquidation Proceedings
FOUNDER CHINA MANCO: Commences Liquidation Proceedings
HATTERAS CORE: Creditors' Proofs of Debt Due Sept. 17
KONA (CAYMAN): Creditors' Proofs of Debt Due Sept. 15
KONA FUND: Creditors' Proofs of Debt Due Sept. 15
OZ URSA: Creditors' Proofs of Debt Due Sept. 24
SOLABO INVESTMENTS: Creditors' Proofs of Debt Due Sept. 15
C H I L E
BANCO BICE: Fitch Publishes 'BB+' Support Rating Floor
INVERSIONES ALSACIA: To Seek Bankruptcy in U.S. With Prepack Plan
G U A T E M A L A
* GUATEMALA: Sees Growth Accelerating in 2015, Minister Says
M E X I C O
CORPORACION GEO: Gets Approval to Get Bridge Loans
T R I N I D A D & T O B A G O
TRINIDAD CEMENT: Suspends Group Chief Executive Officer
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A R G E N T I N A
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GENERACION INDEPENDENCIA: Moody's Rates ARS40MM Notes Caa1/Baa3.ar
-----------------------------------------------------------------
Moody's Latin America Agente de Calificacion de Riesgo S.A. has
assigned a Caa1/Baa3.ar rating to the ARS 40 million proposed
notes by Generacion Independencia S.A. (GISA). At the same time,
Moody's has affirmed GISA' outstanding ratings at Caa1/Baa3.ar.
The rating outlook is negative.
GISA will use proceeds from the new notes to repay Class I Notes
for ARS 28 million and to finance its working capital needs and
capital expenditures.
Ratings Rationale
GISA's Caa1/Baa3.ar ratings are supported by Moody's expectation
of stable operations and predictable cash flows arising from the
relatively simple nature of the thermal power plant that has been
in operations for more than two years.
GISA operates a 120 MW dual fuel power plant (natural gas and oil)
and receives capacity payments under a long term supply contract
(under the Res. 220 framework). More than 90% of its revenues are
tied to this supply contract and as long as the plant is available
for dispatch, it receives the contractual price for its contracted
capacity. A reasonable level of debt in relation to the project's
cash generation capacity is also a supporting factor for the
ratings.
A constraining rating consideration is the fact that the company
is a single-asset operation and is therefore exposed to
concentration and event risks. In addition, most of the project's
capacity is contracted under a sole contract with Cammesa, the
federal government agency that administers the wholesale
electricity market in Argentina and manages all of its collections
and payments. Since the current price paid for electricity by most
consumers in Argentina is not enough to cover electricity
production costs, Cammesa faces an ongoing operating deficit that
is currently financed with federal government resources to
facilitate payments to the producers. This represents a high
degree of exposure to Argentine government credit risk (Caa1,
negative), which caps the ratings.
Finally, although in Moody's view the debt levels for the company
are reasonable, the maturity profile of the debt is highly
concentrated and exposes the company to refinancing risk. However,
a successful issuance of the ARS 40 million in proposed notes will
slightly improve GISA' debt maturity profile as the new notes are
fully amortizable in March 2016, when current notes have an
amortizing profile, with scheduled principal payments in December
2014, March and June 2015.
Liquidity
GISA's total debt currently amounts to USD 38 million, out of
which USD 33 million is the amount outstanding under the UBS AG
loan that the company incurred to finance the project (USD 60
million). The bank loan has an amortizing profile with scheduled
principal payment s of USD 3 million in November 2014; USD 3.6
million per quarter in 2015 through February 2016 and a final
payment of USD 12 million in May 2016. The rest of the debt is
comprised by the ARS 28 million notes issued last December and
bank overdrafts.
With the issuance of the new Class II notes, the company expects
to refinance debt and to fund its working capital and investment
needs for the next several quarters. Nevertheless, in 2015 and
2016 the company will need to depend on external refinancing to
cover about 50% of the scheduled principal payments on the
outstanding UBS AG loan.
GISA expects to fund those needs through a combination of debt
(banks or notes) and loans from the parent. While the amounts to
be refinanced (approximately USD 15 million each year) are
manageable, access to the debt or bank markets in Argentina is
highly uncertain and GISA, as it is the case with most companies
in Latam, has no access to any committed bank facility. On the
other hand, GISA's leverage is expected to be considerably lower
towards the end of 2015 and 2016 than it is, which may facilitate
the company's access to external financing. In addition, the
parent company has provided financial support in the past not only
to GISA but to other affiliated companies. For example, during
2013 the parent provided funding to GISA for approximately ARS 39
million. In 2012, the parent's support to affiliated companies was
also significant.
Cross default provisions contained in several of the group's loan
agreements also supports the idea of financial assistance from the
group in the case of need.
Rating Outlook
The negative outlook for GISA reflects Moody's negative outlook
for Argentina's Caa1 government bond rating due to the company's
significant exposure to Cammesa.
What Could Change the rating --UP
GISA' Caa1 local currency rating is constrained by Argentina's
Caa1 foreign currency bond ceiling; therefore, GISA' ratings would
be upgraded if Argentina's foreign currency bond ceiling is
upgraded.
An improved debt profile and sustained cash flow generation in
relation to debt would be also required for a rating upgrade.
Quantitatively, a rating upgrade would require cash from
operations - CFO pre WC to debt consistently above 25% and
interest coverage (FFO+ Interest to Interest) of more than 2.5
times on a sustainable basis.
What Could Change the rating -Down
Moody's notes that the creditworthiness of the company is highly
dependent on the credit quality of the Argentine government.
Therefore, a further rating downgrade of the sovereign would
likely result in negative rating actions for this company.
Additional pressure for a rating downgrade could occur if CFO pre-
WC to debt were to decline below 15% and interest coverage fell
below 1.5 times for an extended period. Unexpected changes to the
Res. 220 or Energia Plus market could also have negative
implications for the ratings. A significant delay on the payments
it receives from Cammesa could also add pressure for a rating
downgrade.
Generacion Independencia S.A. (GISA) owns and operates a 120 MW
thermal power plant located in the Tucuman Province in the North-
West region of Argentina. GISA is controlled by Albanesi S.A. (not
rated), an Argentine holding company that owns and operates
approximately 900 MW of installed power capacity within the
country. In 2013, Albanesi's consolidated revenues in the
electricity market reached USD 140 million. Rafael G. Albanesi
S.A. (RGA), the biggest gas marketing company in Argentina (2013
revenues of USD 350 million) and Albanesi Inversora S.A. are also
key components of the "Albanesi Group".
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B E R M U D A
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GOLDEN STATE II: S&P Puts Prelim. BB+(sf) Rating on Class A Notes
-----------------------------------------------------------------
Standard & Poor's Ratings Services said that it has assigned its
preliminary 'BB+(sf)' rating to the Series 2014-1 Class A notes to
be issued by Golden State Re II Ltd. The notes provide cover to
the State Compensation Insurance Fund (SCIF; ceding insurer) from
losses due to earthquakes on a per occurrence basis.
The preliminary rating is based on the lowest of the natural-
catastrophe (nat-cat) risk factor, 'bb+', the rating on the assets
in the reinsurance trust account, 'AAAm', and the creditworthiness
of the ceding insurer. In adjusting the modeled probability of
attachment, S&P starts with an incremental stress level of 7.5% to
modeled loss transactions, though this S&P may increase or
decrease this based on the company's strengths, concerns, and
other mitigating factors.
The modeling results assume events are evenly distributed
throughout a day. Since the timing of an event will have an
impact on the loss amount, S&P reviewed two sensitivity tests that
adjusted (in hourly increments) the time of each stochastic event
by plus/minus two hours and six hours from its original time.
Using the initial index values and the adjusted index values, the
highest notional modeled loss from each event was used to
construct a new exceed a probability curve and the results were
consistent with a nat-cat factor of 'bb+'.
Golden State Re II Ltd. is a Bermuda exempted company incorporated
in 2014 licensed as a special-purpose reinsurer, and is seeking to
raise $ million to collateralize the coverage it provides to SCIF
under the reinsurance agreement. This is the second time SCIF has
accessed the cat-bond market to obtain reinsurance coverage. The
initial issuance is scheduled to mature on Jan. 8, 2015.
RATING LIST
New Rating
Golden State Re II Ltd.
Series 2014-1 class A notes BB+(sf) prelim
TOWER GROUP (BERMUDA): A.M. Best Cuts Issuer Credit Rating to 'c'
-----------------------------------------------------------------
A.M. Best Co. has downgraded the financial strength ratings to C
(Weak) from C++ (Marginal) and the issuer credit ratings (ICR) to
"ccc" from "b" of the pooled and reinsured members of the Tower US
Pool (Tower) and CastlePoint Reinsurance Company, Limited
(Bermuda). Concurrently, A.M. Best has downgraded the ICR to "c"
from "cc" and the debt rating on the $150 million par 5.00% senior
unsecured convertible notes due Sept. 14, 2014, for the
intermediate holding company, Tower Group, Inc. Additionally,
A.M. Best has downgraded the ICR to "c" from "cc" of the ultimate
parent, Tower Group International, Ltd. (TWGP) (Bermuda) [NASDAQ:
TWGP]. All ratings are under review with developing implications.
All companies are headquartered in New York, NY, unless otherwise
specified.
The rating actions take into consideration TWGP's most recent
Securities and Exchange Commission 10Q filing, which included a
net loss of $106 million and GAAP shareholders' equity (excluding
noncontrolling interests) of negative $11 million. In addition,
these rating downgrades reflect the heightened uncertainty around
TWGP's ability to repay its senior debt holders in the event its
pending merger with ACP Re Ltd. (ACP Re) (Bermuda) does not occur
on or before Sept. 15, 2014. These actions also consider the
additional ratings drag placed on all of TWGP's operating entities
in terms of their ability to pay claims. In addition, A.M. Best
remains concerned with the continued delays in TWGP reporting its
quarterly SEC filings, as well as its ability to operate as a
going concern.
The ratings will remain under review pending the planned merger
with ACP Re, which is anticipated to close in September 2014, but
may be delayed to as late as Nov. 15, 2014, which is the merger
termination date. The under review with developing implications
status on all the ratings acknowledges the potential benefits to
be garnered from the transaction, but also the potential downside
from any additional adverse reserve development or any unforeseen
event that might occur up until the close of the transaction. The
ratings could be downgraded further if certain events or
unforeseen circumstances cause the merger to fall through. Any
default on the payment of principal and/or interest to existing
debt holders would result in an immediate downgrade.
The FSR of C++ (Marginal) has been downgraded to C (Weak) and the
ICRs have been downgraded to "ccc" from "b" for the following
pooled and reinsured members of Tower US Pool:
CastlePoint Insurance Company
CastlePoint National Insurance Company
Tower Insurance Company of New York
Tower National Insurance Company
Preserver Insurance Company
North East Insurance Company
Hermitage Insurance Company
CastlePoint Florida Insurance Company
Kodiak Insurance Company
York Insurance Company of Maine
Massachusetts Homeland Insurance Company
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B R A Z I L
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GOL LINHAS: S&P Assigns 'B-' Rating on Unit's Proposed Sr. Notes
----------------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'B-' global scale
rating to Gol LuxCo S.A.'s proposed senior unsecured notes for up
to $500 million, due 2022. Gol Linhas Aereas Inteligentes S.A.
(Gol; B/Stable/--) will fully and unconditionally guarantee the
notes. The company will use the proceeds primarily to purchase
Gol's senior unsecured notes due 2017, 2020 and 2023, in
connection with the company's recent tender offer. Any remaining
portion of the proceeds will be used for general corporate
purposes.
S&P rates the proposed issuance one notch below the 'B' corporate
credit rating on Gol, as the senior unsecured notes are
structurally subordinated to the company's secured debt. Under
S&P's criteria, operating and financial leases that carry aircraft
as collateral would have priority of payment relative to unsecured
debt.
RATINGS LIST
Gol Linhas Aereas Inteligentes S.A.
Corporate credit rating B/Stable/--
Ratings Assigned
Gol LuxCo S.A.
Senior unsecured notes due 2022 B-
OSX BRASIL: In Talks With Creditors to File New Recovery Plan
-------------------------------------------------------------
Luciana Magalhaes at The Wall Street Journal reports that OSX
Brasil SA, one of the few companies still controlled by
businessman Eike Batista, is again racing against time to stay
afloat amid continuing pressure from its creditors.
OSX Brasil needs to complete negotiations with creditors before
mid-September, according to The Wall Street Journal. That is when
the 180-day period during which it is legally protected from
creditors' claims runs out, OSX Brasil Chief Financial Officer
Claudio Zuicker told the news agency in an interview.
"OSX Brasil is a viable company when you look at its assets," the
report quoted Mr. Zuicker as saying.
Mr. Zuicker, however, admitted OSX Brasil doesn't have time to
lose and likely will ask the Brazilian court for an extension of
the stay period, if necessary, the report notes.
The report recalls that the company, which operates a shipyard at
the Port of Acu, in Rio de Janeiro, was prepared to have its
creditors vote on proposed rescue plans last month. But a
Brazilian judge postponed the voting after some creditors raised
objections, the report relays.
The report discloses that OSX Brasil had filed different plans for
different parts of its companies, including holding firm OSX
Brasil, naval construction arm OSX Construcao Naval and services
arm OSX Servicos. But its main creditor, government-controlled
bank Caixa Economica Federal, asked for the units to be treated as
a single company in the recovery process, the report notes.
That decision didn't sit well with some other creditors who would
have wielded more influence under the original structure, forcing
OSX Brasil to restart the negotiation process, the report relates.
The report notes that OSX Brasil has faced a credit crunch amid
doubts about its ability to generate cash. Mr. Batista, once the
richest person in Brazil, founded several infrastructure firms
over the last decade, raising money from investors.
A serious credibility and financial crisis hit the group after its
oil company failed to reach production targets, forcing the
entrepreneur to sell assets and dismantle his former industrial
empire, the report recalls.
OSX Brasil filed for bankruptcy protection in the last quarter of
2013, shortly after its sister oil company Oleo e Gas
Participacoes sought protection from creditors. OSX Brasil was
created mainly to build platforms for Mr. Batista's oil firm, and
without its top client, its debts piled up, the report relates.
Mr. Batista doesn't plan to sell his controlling stake in OSX
Brasil, at least for now, according to Mr. Zuicker, notes WSJ.
But the entrepreneur only will receive money from the shipbuilder
in the long run and if the rescue plan works, Mr. Zuicker said,
the WSJ reports.
"So far, (Mr. Batista) has been able, within limits, to preserve
the company and wants to resolve it and pay everyone," the report
quoted Mr. Zuicker as saying.
OSX Brasil, which has US$2.7 billion in debt, is still in talks to
sell at least one of the three production, storage and offloading
vessels, known as FPSOs. The ships are owned by its leasing arm,
which was left out of the bankruptcy protection process.
Efforts to sell the assets have been ongoing for several months,
but "a formal offer with the right price" hasn't been presented
yet, Mr. Zuicker said, the report relays. Mr. Zuicke said talks
are more advanced for the sale of OSX-2 FPSO, which currently
isn't being used by its sister oil firm, the report notes.
OSX Brasil's main hope for recovery is to focus on leasing space
of its shipyard in A‡u, where it has the right to use 3.2 million
of square meters (34.4 million square feet), of which the majority
is currently available, the report discloses.
But some analysts have doubts the company will manage to stay
alive, the report notes.
"I think Mr. Batista's companies still have a high risk," said
Pedro Galdi, an analyst at Sao Paulo-based brokerage SLW. Mr.
Galdi said all of Mr. Batista's companies made the same mistake:
taking on too much debt before they were able to generate revenue,
the report adds.
About OSX Brasil
Brazilian shipbuilding firm OSX Brasil SA, controlled by
businessman Eike Batista, filed for protection from creditors on
November 2013 on liabilities of BRL5.34 billion (US$2.30 billion).
OSX Brasil filed for bankruptcy -- called "judicial recovery" in
Brazil -- after Oleo e Gas Participacoes SA, formerly known as OGX
Petroleo e Gas Participacoes, filed for bankruptcy on Oct. 30,
2013.
OSX had outstanding debts of around US$2.2 billion as of June 30,
2013, including dollar-and real-denominated loans and bonds held
by a mix of banks, investors and government institutions, such as
Brazil's Merchant Marine Fund, according to The Wall Street
Journal.
The move on Nov. 11 at a Rio de Janeiro court follows a default
and bankruptcy filing the prior month for Mr. Batista's flagship
oil firm OGX Petroleo e Gas Participacoes SA, n/k/a Oleo e Gas,
according to the WSJ report. The firm went public in 2008 for
$4.1 billion but failed to produce nearly any of the up to 10.8
billion barrels it claimed to have.
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C A Y M A N I S L A N D S
==========================
CAYMAN CAPITAL: Commences Liquidation Proceedings
-------------------------------------------------
On Aug. 14, 2014, the shareholders of Cayman Capital Management
Partners, Ltd. resolved to voluntarily liquidate the company's
business.
Creditors are required to file their proofs of debt to be included
in the company's dividend distribution.
The company's liquidator is:
Douglas Ross Stringer
306 Upland Creek
San Antonio, TX 78245
USA
CHIMICHANGA CORP: Creditors' Proofs of Debt Due Sept. 30
--------------------------------------------------------
Chimichanga Corp., which is under liquidation, requires its
creditors to file their proofs of debt by Sept. 30, 2014, to be
included in the company's dividend distribution.
The company's liquidator is:
Stuart C. E. Mackellar
Zolfo Cooper (BVI) Limited
c/o Rachel Sexton
Telephone: +1 (284) 393 9600
Facsimile: +1 (284) 393 9601
e-mail: rachel.sexton@zolfocooper.vg
COBALT LIMITED: Creditors' Proofs of Debt Due Sept. 16
------------------------------------------------------
The creditors of Cobalt Limited are required to file their proofs
of debt by Sept. 16, 2014, to be included in the company's
dividend distribution.
The company commenced liquidation proceedings on Aug. 12, 2014.
The company's liquidator is:
Christopher Tushingham
c/o Wardour Management Services Limited
Telephone: (345) 945-3301
Facsimile: (345) 945-3302
P.O. Box 10147 Grand Cayman KY1-1002
Cayman Islands
CSN ISLANDS VIII: Commences Liquidation Proceedings
---------------------------------------------------
On Aug. 15, 2014, the shareholder of CSN Islands VIII Corp.
resolved to voluntarily liquidate the company's business.
Creditors are required to file their proofs of debt to be included
in the company's dividend distribution.
The company's liquidator is:
Eneas Garcia Diniz
c/o 3400, 20th Floor, Av. Brigadeiro Faria Lima
Sao Paulo, SP, 04538-132 Brazil
Telephone: +1 (345) 914 6365
FOUNDER CHINA GENPAR: Commences Liquidation Proceedings
-------------------------------------------------------
On Aug. 15, 2014, the sole shareholder of Founder China Partners
Genpar, Limited resolved to voluntarily liquidate the company's
business.
Creditors are required to file their proofs of debt to be included
in the company's dividend distribution.
The company's liquidator is:
Ting Zhou
1206 North Tower, Kerry Center
1 Guanghua Road, Chaoyang District
Beijing 100020
China
FOUNDER CHINA MANCO: Commences Liquidation Proceedings
------------------------------------------------------
On Aug. 15, 2014, the sole shareholder of Founder China Partners
Manco, Limited resolved to voluntarily liquidate the company's
business.
Creditors are required to file their proofs of debt to be included
in the company's dividend distribution.
The company's liquidator is:
Ting Zhou
1206 North Tower, Kerry Center
1 Guanghua Road, Chaoyang District
Beijing 100020
China
HATTERAS CORE: Creditors' Proofs of Debt Due Sept. 17
-----------------------------------------------------
The creditors of Hatteras Core Alternatives Offshore Fund, Ltd.
are required to file their proofs of debt by Sept. 17, 2014, to be
included in the company's dividend distribution.
The company commenced wind-up proceedings on Aug. 12, 2014.
The company's liquidator is:
Ogier
c/o Jonathan Turnham
Telephone: +1 (345) 815 1839
Facsimile: +1 (345) 949 9877
89 Nexus Way, Camana Bay
Grand Cayman KY1-9007
Cayman Islands
KONA (CAYMAN): Creditors' Proofs of Debt Due Sept. 15
-----------------------------------------------------
The creditors of Kona (Cayman) Limited are required to file their
proofs of debt by Sept. 15, 2014, to be included in the company's
dividend distribution.
The company commenced wind-up proceedings on Aug. 13, 2014.
The company's liquidator is:
Julian Gover
c/o Kona Partners LLP
2 Charles Street, Mayfair
London, W1J 5DB
England
Telephone: +44 (0)20 7183 6450
KONA FUND: Creditors' Proofs of Debt Due Sept. 15
-------------------------------------------------
The creditors of Kona Fund Limited are required to file their
proofs of debt by Sept. 15, 2014, to be included in the company's
dividend distribution.
The company commenced wind-up proceedings on Aug. 11, 2014.
The company's liquidator is:
Julian Gover
c/o Kona Partners LLP
2 Charles Street, Mayfair
London, W1J 5DB
England
Telephone: +44 (0)20 7183 6450
OZ URSA: Creditors' Proofs of Debt Due Sept. 24
-----------------------------------------------
The creditors of OZ Ursa Leasing Ltd are required to file their
proofs of debt by Sept. 24, 2014, to be included in the company's
dividend distribution.
The company commenced liquidation proceedings on Aug. 13, 2014.
The company's liquidator is:
Intertrust SPV (Cayman) Limited
190 Elgin Avenue, George Town
Grand Cayman, KY1-9005
Cayman Islands
c/o Kim Charaman/Jennifer Chailler
Telephone: (345) 943-3100
SOLABO INVESTMENTS: Creditors' Proofs of Debt Due Sept. 15
----------------------------------------------------------
The creditors of Solabo Investments Limited are required to file
their proofs of debt by Sept. 15, 2014, to be included in the
company's dividend distribution.
The company commenced wind-up proceedings on Aug. 15, 2014.
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
Telephone: (345) 949-7128
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C H I L E
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BANCO BICE: Fitch Publishes 'BB+' Support Rating Floor
------------------------------------------------------
Fitch Ratings has published the Chilean Banco BICE's (BICE)
Viability Rating (VR) and foreign- and local-currency long-term
Issuer Default Ratings (IDRs) at 'bbb+' and 'BBB+', respectively.
Additionally, Fitch has affirmed BICE's National Ratings.
KEY RATING DRIVERS - VR, IDRs, National Ratings and Senior Debt
Banco BICE's IDR's are derived from its VR and reflects solid
financial performance, good asset quality ratios and overall sound
risk profile, driven by a conservative long-term business strategy
that have yielded resilient results in times of economic stress.
Despite mainly focusing on commercial banking, asset management
and its treasury business niche, its expansion into retail wealth
management for high net worth individuals has been able to provide
diversification to its revenue stream and also allow the bank to
reduce the volatility of medium- to small-sized banks.
Sustained by stable earnings and a prudent cash dividend policy,
Banco BICE's capital position is considered adequate given its
earning generation capacity and history of limited loan losses,
but its capitalization remains below the average of similarly
rated banks and shows room for improvement. Also, liquidity is
well managed and sufficient given the stability of its funding
base, which has been concentrated in time deposits from
institutional investors as the whole local medium-size peers.
BICE's local franchise and income diversification lags the trend
of larger banks, while the significant portion of its treasury
business may produce some volatility in its results, especially in
times of market turmoil. Although its capital ratios have some
improved Fitch core capital (FCC) at 9% as of Dec. 2013, is still
below other similarly rated banks (median FCC at 10.7% for LATAM
peers). Such contraction in FCC is explained by recent growth
that has not been completely compensated for by earning retention.
Worth mentioning is that given BICE's conservative approach toward
banking and local regulations, its plain equity-to-assets ratio is
in line with other banks with similar VRs, which is viewed
positively by Fitch considers BICE's overall loss absorption
capacity is adequate given its very low credit risk, sound and
stable profitability and conservative banking management.
The steady growth of the commercial bank unit helps to balance the
historical importance of the asset management and treasury
business, although the latter is still significant and sometimes
volatile. This trend in its revenue source should be maintained
going forward, especially considering the bank's conservative
business plan for the short- and medium-term. Appropriate asset
and liability management in terms of currency, tenors and yield
are crucial to enhance profits in times of less arbitrage
opportunities, a framework very well controlled by the bank.
Adequate credit risk tools and the focus on a relatively lower-
risk niche (corporate and high net worth segment) have allowed the
bank to maintain strong and stable asset quality ratios, with
adequate diversification figures in terms of obligors. BICE's
historically low NPL ratio (the lowest in Chile and sound compared
to international peers), together with limited loan impairment
charges, results in strong asset quality ratios. Prudent loan
loss reserve policies provide above-average reserve coverage and
include a significant portion of counter-cyclical provisions.
Credit, market and operational risks, in Fitch's view, are well
recognized on the balance sheet and reflect the conservative
business approach. The historical track record of credit risk
ratios and asset quality of the institution are better than
average in the banking system, and are expected to remain strong.
Loan loss provisions accounted for 20.6% of earnings before taxes
and provisions as of June 30, 2014 and 0.6% of average gross
loans. Reserves for gross loans, including additional past-due
loans, is robust and one of the highest ratios of reserves for
impairment loans (660% as of June 30, 2014) in the Chilean
financial system and in Fitch's view this trend will remain sound.
Liquidity is ample and closely monitored. Liquid assets (16.3% of
total assets as of June 30, 2014) represented in the last four
years on average a stable 32.1% of total deposits and short-term
funding where market volatility required more conservative
liquidity positions worldwide. Fitch expects this trend will be
maintained under forthcoming more strict local and international
banking standards under Basel 3.
Capital levels are adequate for the rating level and stable after
several years of adequate earnings, good provisioning and
controlled growth. A recent subordinated bond issuance improved
BICE's mismatch on the balance sheet but increased the use of
hybrids in its capital structure (to 42% of total equity) - above
the Chilean banking system average (32%). Healthy internal
capital generation and moderate loan and assets growth in last 12
months have resulted in a slight improvement of its FCC-to-Risk
Weighted Assets ratio to 8.8% as of June 30, 2014 (8.2% as of
June 30, 2013). In Fitch's view, although the bank enjoys good
earnings generation capacity and control the risks on its balance
sheet, an improvement in the FCC ratio closer to the level of
similarly rated commercial banks (VR 'bbb+' rated banks with a
median FCC ratio of 12.0% as of Dec. 31, 2013) would help to fund
its expansion in the medium term.
KEY RATING DRIVERS - Subordinated Debt
Fitch rates the national subordinated debt of Chilean banks two
notches below its national long-term issuer rating. The two-notch
difference considers the loss severity due to its subordinated
nature (after default).
KEY RATING DRIVERS - Support Rating and Support Rating Floor
Fitch considers BICE a bank for which there is a moderate
probability of sovereign support because the limited relative size
of the Chilean banking system makes uncertain the propensity of
the potential provider of support to do so.
RATING SENSITIVITIES - IDRs, VR, National Ratings and Local Debt
The Rating Outlook for the long-term IDRs and national rating is
Stable and there are based on BICE's VR. A potential rating
upgrade is unlikely as the current category is at the top of the
natural VR range for universal commercial banks and is limited by
its relatively modest local franchise. Fitch does not foresee any
changes in the short term provided the bank's earnings remain
stable and balanced by business segment and it maintains its high
credit quality. A rating downgrade could take place if Banco
BICE's capitalization ratios continue to fall and asset quality
deteriorates significantly.
Specifically, downward pressure could result from a deterioration
of its capital adequacy ratios, with an FCC ratio falling and
remaining below 8.0%, either due to lower internal capital
generation or from lower than expected profitability. BICE's VR
could also be under pressure if operating return on assets falls
and remains below 1% in the medium term, or if any unexpected risk
deteriorates its profitability, capital base or sound asset
quality in the medium term.
RATING SENSITIVITIES - Subordinated Debt
The subordinated debt would typically remain two notches below the
bank's national long-term rating considering the loss severity due
to its subordinated nature (after default).
RATING SENSITIVITIES - Support Rating and Support Rating Floor
Changes in the bank's Support Rating and Support Rating Floor are
unlikely. BICE is not considered by Fitch as a domestically
important financial institution (D-SIFI) of the Chilean financial
system. Fitch considers BICE a bank for which there is a moderate
probability of sovereign support because the limited relative size
of the Chilean banking system makes it uncertain as to the
propensity of the potential provider of support to do so.
Fitch has published BICE's ratings as follows:
-- Foreign and local currency long-term IDRs at 'BBB+';
-- Foreign and local currency short-term IDRs at 'F2';
-- Viability rating at 'bbb+';
-- Support rating at '3;
-- Support rating floor at 'BB+'.
Fitch has affirmed BICE's national ratings as follows:
-- Long-term national rating at 'AA(cl)';
-- Short-term national rating at 'N1+(cl)';
-- National long-term rating senior unsecured bonds at
'AA(cl)';
-- National long-term rating subordinated bonds at 'A+(cl)'.
The Rating Outlook is Stable.
INVERSIONES ALSACIA: To Seek Bankruptcy in U.S. With Prepack Plan
-----------------------------------------------------------------
Inversiones Alsacia S.A. and Express de Santiago Uno S.A. on
Aug. 31 disclosed that they have entered into a Restructuring Plan
Support Agreement with an informal group of holders that,
collectively, holds more than 60% of the principal amount of the
Company's 8% senior secured notes due 2018 to restructure the
Existing Notes through a prepackaged plan of reorganization filed
under Chapter 11 in the United States.
A Company spokesperson commented, "With this agreement, the
Company expects to continue to provide uninterrupted bus services
to the citizens of Santiago and will continue to meet its
obligations to its vendors and employees, who will not be
negatively impacted in any way by the Agreement."
The Company has not experienced and does not expect to experience
any disruptions in its operations during its reorganization
process. Specifically, the Company expects to continue to:
* operate its full schedule of services to the citizens of
Santiago;
* provide its employees with wages, healthcare coverage,
vacation days, and similar benefits without interruption; and
* pay suppliers for goods and services received throughout the
reorganization process.
No other creditors or suppliers have been, or should be, affected
by the restructuring of the Existing Notes that is to be
implemented in accordance with the Plan. The Company remains
current on all of its other obligations as of the date of this
announcement.
Under the terms and conditions of the Plan, qualified holders of
Existing Notes will receive new notes issued by the Company with a
principal amount equal to the principal amount of the Existing
Notes that they hold plus accrued and unpaid interest thereon.
The New Notes will have an initial maturity of December 31, 2018,
which may be extended in the event that the Company successfully
obtains extensions of its concessions through at least April 2021.
The New Notes will bear interest at a rate of 8.0% per annum,
which is the same as the interest rate applicable to the Existing
Notes, and will have semi-annual mandatory amortizations as set
forth in the Plan, as well as mandatory redemptions in the event
that the Company generates excess cash. Further detail on the
terms and conditions of the New Notes is contained in the
description of notes included as an exhibit to the Plan.
Confirmation of the Plan remains subject, among other things, to
the successful solicitation of consents and confirmation by the
U.S. Bankruptcy Court for the Southern District of New York.
A copy of the Agreement, including the Plan, the description of
notes and the proposed form of cash collateral order attached
thereto, is available at the Company's website --
http://www.exps1.clor http://www.alsacia.cl-- under the heading
"Inversionistas -- Comunicados y Noticias" for both Inversiones
Alsacia S.A. and Express de Santiago Uno S.A.
* * *
As reported by the Troubled Company Reporter-Latin America on Aug
22, 2014, Moody's Investors Service downgraded the senior secured
rating of Inversiones Alsacia S.A. to Caa3 from Caa2. The rating
was also placed under review for downgrade. The rating downgrade
reflected Alsacia's default on the required interest and principal
payment due on August 18 to an informal group of holders that,
collectively, holds more than 60% of the principal amount of the
Company's 8% senior secured notes due 2018. Moody's added that the
ratings downgrade also reflected the Company's plan to commence a
restructuring process on the outstanding senior secured notes.
The TCRLA also reported on Aug 22, that Fitch Ratings downgraded
to 'D' from 'CC' the rating of Inversiones Alsacia's US$464
million senior secured bonds due in 2018. Fitch said the rating
downgrade reflects Alsacia's lack of payment of the debt service
obligations due Aug. 18, 2014, which constitutes an Event of
Default upon the notes' indenture, with no cure period or
possibility for a waiver.
Alsacia, together with its affiliate, Express de Santiago Uno
S.A., are collectively the largest operator in the Transantiago
Transportation System, transporting approximately 800,000
passengers every day, throughout 35 communities in Santiago,
Chile, which accounts for more than 30% of the passengers in
Transantiago.
Alsacia and Express belong to an international holding company
with interests in public passenger transportation, environmental
solutions, outsourcing services and real estate development in
Chile, Colombia, Panama, Peru and the United States of America.
=================
G U A T E M A L A
=================
* GUATEMALA: Sees Growth Accelerating in 2015, Minister Says
------------------------------------------------------------
Michael McDonald at Bloomberg News reports that growth in Central
America's biggest economy will accelerate to 4.5 percent next year
as infrastructure projects start up and spending increases ahead
of presidential elections, Guatemala Economy Minister Sergio de la
Torre said.
Guatemala's 2015 budget, due to be submitted this week, will rise
to GTQ70 billion (US$9 billion) from about GTQ69 billion this year
and will include a fiscal deficit of as much as 2.5 percent of
gross domestic product, Mr. de la Torre said in an interview with
Bloomberg News. Remittances are also surging as Guatemalans
abroad benefit from the improving U.S. economy and send more cash
back home, Mr. de la Torre said.
"We have a robust economy," according to de la Torre, 51, who
forecasts growth of 4 percent this year. "There is a lot of
investment in electricity, mining and in the manufacturing and
infrastructure industries," Mr. de la Torre added.
New projects, including a US$900 million power plant built by
Ashmore Energy International Ltd, will help the economy overcome
the impact of a drought that prompted President Otto Perez Molina
to declare a state of emergency this month, Bloomberg News
discloses. Perez Molina said 1.2 million Guatemalans were at risk
of food shortages from the drought, Bloomberg News notes.
The drought will prompt more families to leave Guatemala and
attempt to migrate to the U.S., which has struggled with a surge
in unaccompanied Central American children trying to enter the
country this year, Mr. de la Torre said, Bloomberg News relays.
'No Doubt'
"I have absolutely no doubt that it's going to happen," Mr. de La
Torre said. "What these families are going to face is what they
are already facing, a terrible problem of hunger and shortage,"
Mr. de La Torre added.
The annual forecast for the country's coffee crops, which
represent 6 percent of exports, was cut 3 percent this month to
3.37 million bags as a result of the drought, Bloomberg News
notes. Guatemala is the top coffee producer in Central America
after Honduras.
Remittances, which account for more than 10 percent of Guatemala's
GDP, have climbed as the U.S. economy improves, the minister said,
Bloomberg News relays. Remittances rose 14 percent to about
US$450 million in July, according to the central bank, Bloomberg
News says.
The International Monetary Fund last month praised the country's
economic outlook, citing "prudent macroeconomic policies" and
"relatively low inflation" that slowed to 3.4 percent in July from
4.7 percent a year earlier, Bloomberg News discloses. Like many
emerging markets, the country's economy could be hit by a decision
to raise interest rates in the U.S. or worsening conditions in
Europe, the IMF said, Bloomberg News notes.
Black Hat
Mr. De la Torre, who has a clothing company, said he once had a
black hat made for previous Economy Minister Pavel Centeno. That
hat said "No hay," which means "There isn't any" in Spanish,
because whenever other ministers would ask him for money he would
always say "no hay!"
Without saying whether the country will sell dollar bonds to
finance next year's budget, Mr. de la Torre called the expected
fiscal deficit next year "very responsible, one of the lowest in
Latin America," Bloomberg News notes.
Guatemala's dollar bonds have returned 13 percent this year, more
than the 10 percent for emerging markets, according to JPMorgan
Chase & Co.'s EMBIG index, Bloomberg News adds.
"We see very positive momentum for the economy in 2015," Bloomberg
News quoted Mr. de la Torre as saying.
===========
M E X I C O
===========
CORPORACION GEO: Gets Approval to Get Bridge Loans
---------------------------------------------------
Ben Bain at Bloomberg News reports that a Mexican court cleared
the way for Corporacion GEO Sab de CV to receive bridge loans from
banks including Citigroup Inc. as part of the company's efforts to
emerge from bankruptcy.
The judge on Aug. 29 rejected an effort to block the financing,
Orlando Loera, senior adviser to Corporacion GEO, said in a
telephone interview with Bloomberg News.
Banco Santander SA, Banco Bilbao Vizcaya Argentaria SA, HSBC
Holdings Plc and Grupo Financiero Banorte SAB also will provide
loans under the plan, Mr. Loera said, Bloomberg News notes. They
could total as much as MXN1 billion ($76 million), Mr. Loera said
in June, Bloomberg News reports.
Corporacion GEO, which defaulted on its bonds and halted most
construction last year after a shift in government policies led to
a drop off in homebuilding subsidies, agreed in March to give
creditors 88 percent of the company under a reorganization plan,
Bloomberg News discloses. The company's $400 million of dollar
bonds due in 2022 are trading at 9.46 cents on the dollar,
according to data compiled by Bloomberg.
The bridge loans will be used for homebuilding, Mr. Loera said in
June, Bloomberg News relays.
* * *
As reported by the Troubled Company Reporter-Latin America on
March 24, 2014, Corporacion GEO SAB de CV said it filed for
bankruptcy protection in Mexico with a prearranged restructuring
plan it hopes will get the struggling company building again,
according to Amy Guthrie at The Wall Street Journal. GEO SAB is
one of three major Mexican home builders struggling with serious
cash restraints amid drastic changes in Mexico's low-income
housing sector, the report added.
The TCRLA on April 2, 2014, reported that Moody's Investors
Service downgraded Corporacion GEO, S.A.B de C.V's (GEO)'s global
scale foreign currency senior unsecured debt rating to C from Ca
as a result of GEO's filing of a judicial recovery request.
Corporacion GEO Sab de CV, through its sunsidiaries, designs and
contructs entry-level housing communities in Mexico and Chile.
GEO acquires land, obtains permits, installs infrastructure
improvements, and builds and markets hoising developments.
================================
T R I N I D A D & T O B A G O
================================
TRINIDAD CEMENT: Suspends Group Chief Executive Officer
-------------------------------------------------------
Verne Burnett at Trinidad and Tobago Newsday reports that the
newly elected board of directors of Trinidad Cement Limited has
suspended TCL's Group Chief Executive Officer Dr. Rollin Bertrand
in one of their first decisions following their election at a
special compulsory shareholders' meeting at the Radisson Hotel,
Wrightson Road, Port-of-Spain on Aug. 19.
Dr. Bertrand was suspended as group CEO as well as relieved of
executive responsibilities for all subsidiaries, according to
Trinidad and Tobago Newsday.
The report notes that long-standing director, Alejandro Alberto
Ramirez was appointed as acting CEO. Mr. Ramirez is country
director of CEMEX Puerto Rico. CEMEX, the Mexican cement giant
with international subsidiaries, is the largest shareholder in TCL
with a 20 percent stake.
Businessman Wilfred Espinet, appointed chairman of the company,
said the board thought the suspension of the group CEO was the
best move until it was able to complete a review of his
performance within recent times.
The report relays that Mr. Espinet said, "there was a lot of
animosity which had developed and we needed something of an
assessment of things before we were able to just go back in there
and have any control over the process."
The board also decided to conduct two assessments, one a financial
assessment and the other an operational assessment of the
company's situation, the report notes. "From these two we would
know the requirements to carry the company forward," Mr. Espinet
said, adding that the board had mandated that these assessments be
completed within 60 days, the report discloses.
Mr. Espinet is currently Chairman of Aeromarine International
Logistics Company, which has operations in North America, Central
America and the Caribbean. Mr. Espinet is also Chairman of
Mayfair, a cosmetics retailer which has outlets throughout the
Caribbean.
Mr. Espinet said the company's high level of debt will also
require the board's urgent attention, the report relays. "Not
least of all is that they have outstanding backpay and all kinds
of things to deal with," the report quoted Mr. Espinet as saying.
Despite Aug. 19's victory for shareholders, Mr. Espinet called for
realism in terms of what could be immediately achieved. Mr.
Espinet said, "Expectations from everyone is at a great high now.
The board could say with some degree of comfort that within a
short space of time the share price has gone up 20 percent so that
has been a big return, but one has to be realistic in what can be
achieved in what timeframe," the report notes.
Mr. Espinet said the board would like to see the next annual
general meeting of the company convened within 90 days, the report
discloses.
Mr. Espinet said part of the financial study the board has
commissioned is to find out "what resources we will be able to
access to be able to do the plan -- to pay the commitments that we
have and to deal with the ongoing viability of the plant. This
has to be the priority -- how do you make this plant operate so
that we will be able to meet out commitments," the report adds.
* * *
As reported in the Troubled Company Reporter-Latin America on
Aug 25, 2014, prominent Jamaican businessman Chris Dehring was
among seven new members appointed to the Board of Trinidad Cement
Limited (TCL), according to the RJR News. Six directors of TCL
including, Chairman Andy Bhajan resigned on Aug. 19, minutes
before a special meeting by shareholders was due to be held to
vote them out, said the report. The shareholders later voted in
the new directors. The resignation of the directors, including
Chief Executive Officer Dr. Rollin Bertrand came a few hours after
Trinidad Cement lost an application in the Court of Appeal in Port
of Spain for an injunction to block the meeting. At that time,
Mr. Bertrand resigned as a director but maintained his position as
chief executive officer.
On May 8, 2014, the TCR-LA reported that Fitch Ratings assigned
these initial ratings to Trinidad Cement Limited Group (TCL
Group):
--Foreign currency Issuer Default Rating (IDR) 'B-';
--Local currency IDR 'B-';
--Expected senior secured note issuance of up to USD325 million
'B-/RR4'.
Trinidad Cement Limited is a cement company and is the parent
company of Caribbean Cement Company Limited.
***********
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 * * *