/raid1/www/Hosts/bankrupt/TCRLA_Public/140911.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 11, 2014, Vol. 15, No. 180
Headlines
A N T I G U A & B A R B U D A
* ANTIGUA & BARBUDA: IMF Issues Statement on Conclusion of Mission
A R G E N T I N A
ARGENTINA: Can Borrow From World Bank Up to US$1.2BB Through 2018
TRANSPORTADORA DE GAS: Inks Collaboration Deal With FairfieldNodal
B O L I V I A
BANCO PYME: Moody's Rates Subordinated Debt Issuance 'B3'
C A Y M A N I S L A N D S
APACHE GP: Shareholder to Hear Wind-Up Report on Oct. 10
APACHE GP II: Shareholder to Hear Wind-Up Report on Oct. 10
BARCLAYS WEALTH: Shareholder to Hear Wind-Up Report on Oct. 3
BERRYWOOD LTD: Shareholders' Final Meeting Set for Sept. 23
CJP GP II: Shareholder to Hear Wind-Up Report on Oct. 10
CONOCOPHILLIPS BLACK: Shareholders' Final Meeting Set for Sept. 24
CONOCOPHILLIPS RUSSIA: Shareholders' Meeting Set for Sept. 24
GLENMEADOWS LIMITED: Shareholders' Final Meeting Set for Sept. 16
JAPAN BLUE: Shareholders' Final Meeting Set for Sept. 26
PIP4GV COPA: Shareholder to Hear Wind-Up Report on Oct. 10
C H I L E
AUTOMOTORES GILDEMEISTER: Fitch Downgrades FC IDR to 'CCC'
D O M I N I C A N R E P U B L I C
* DOMINICAN REPUBLIC: Labor Subpoenas Wage Committee
M E X I C O
CEMEX SAB: In Talks to Refinance Some Bank Debt to Lower Costs
P U E R T O R I C O
PUERTO RICO ELECTRIC: New Exec Seeks Plan to Remake Utility
T R I N I D A D & T O B A G O
CL FIN'L: CLICO Ceased Writing New Business
- - - - -
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A N T I G U A & B A R B U D A
===============================
* ANTIGUA & BARBUDA: IMF Issues Statement on Conclusion of Mission
------------------------------------------------------------------
An International Monetary Fund (IMF) mission, led by Trevor
Alleyne, visited Antigua and Barbuda during August 18-29 to hold
discussions on the 2014 Article IV Consultation and to conduct the
second Post-Program Monitoring review. Based on the preliminary
findings of this mission, staff will prepare a report that,
subject to management approval, will be presented to the IMF's
Executive Board for discussion and decision.
At the conclusion of the visit, Mr. Alleyne made the following
statement:
"Economic activity in Antigua and Barbuda is improving, with a
pickup in real GDP in the first half of 2014 following real GDP
growth of 1.8 percent in 2013. Tourism is recovering, with stay-
over arrivals up 7.7 percent during the first half of the year.
Other sectors have continued to grow. Inflation in July stood at
1.7 percent (y-o-y). Commercial banks continue to suffer from
weak financial soundness indicators and ABI Bank, which was taken
over by the Eastern Caribbean Central Bank (ECCB) in 2011, is
still awaiting resolution.
"The fiscal position deteriorated under the expansionary stance in
the run-up to the elections. Spending for the first six months of
2014 was up 6.6 percent compared with the same period in 2013,
while tax revenue grew by 3.4 percent. For the 12-month period
July 2013-June 2014, the primary deficit widened to 1.3 percent of
GDP compared with a surplus of about a 0.6 percent of GDP for July
2012-June 2013. Scheduled external amortization has risen
significantly this year to close to 3 percent of GDP from 1.2
percent in 2013, mainly due to repayment obligations to the Fund
and Paris Club creditors. With few sources of financing on
account of Antigua and Barbuda's already elevated debt levels,
external arrears accumulated, growing by almost 1 percent of GDP
in the first half of 2014.
"On current trends, growth in 2014 is expected at about 2 percent
in 2014 with a moderate recovery in tourism -- based on the
ongoing cyclical expansion in the main client countries. However,
the persistence of government arrears could undermine confidence
and be a drag on growth in the nontrade able sectors of the
economy.
"The mission therefore welcomes the authorities' intention to
decisively address the cash flow problem and put public finances
on a sustainable footing. This will require strong fiscal
adjustment measures -- expenditure cuts and increased revenue
collection -- to generate a surplus large enough not only to stop
further arrears accumulation but also to free up resources to help
address the problems with ABI bank.
"The deterioration in fiscal management in the lead up to the
general elections underscores the need to strengthen the fiscal
policy framework and enhance the credibility of the medium-term
fiscal consolidation program. This can be achieved if annual
budgets are implemented within consistent multi-year expenditure
frameworks. In turn these frameworks should be underpinned by a
fiscal rule that clearly prioritizes reducing debt to sustainable
levels and has strong accountability provisions.
"Strong inflows from the Citizen Investment Program (CIP) could
improve prospects for economic growth and fiscal performance in
the medium term. However, CIP revenues are inherently very
volatile, with risk of a sudden stop. Consequently, the prospect
of CIP inflows should not weaken the government's resolve to
undertake strong fiscal adjustment measures to durably improve the
public finances.
These revenues should not be used to fund recurrent government
operations but rather to clear arrears, pay down debt, build
buffers, and deployed for key strategic infrastructure projects
that would enhance Antigua and Barbuda's productive capacity.
Given the increased international scrutiny of such programs, it
will be important for the CIP to adhere to the highest standards
of governance and transparency, including publishing names of new
citizens.
"The mission welcomes the new government's intention to address
the problems of ABI Bank. Completion of this process and
implementation of the financial sector reforms that are in
progress at the ECCU level are critical to ensure confidence in
and stability of the financial system.
"The mission encourages the authorities to take steps to boost
competitiveness and improve the business climate of the economy in
order to strengthen the prospect for robust growth. In this
context, the first priority should be to restore macroeconomic
stability: investors need to be assured of a stable, predictable
planning horizon, where the banking system is sound, the public
finances are healthy, and the government pays its bills on time.
To improve cost competitiveness, it will be important to ensure
that wage and salary adjustments are in line with productivity
gains, and that energy costs are reduced over the medium-term,
including through a comprehensive reform of the Antigua Public
Utilities Authority (APUA) and a strategy to increase the use of
renewable energy.
"The mission wishes to thank Prime Minister Browne, Ministers
Michael and Yearwood, Minister of State Weston, the Financial
Secretary, and other senior government officials for the cordial
and constructive meetings. It would also like to thank
representatives of the Opposition, banking, business, and labor
for their candid views, which helped to broaden the mission's
understanding of economic developments in Antigua and Barbuda."
=================
A R G E N T I N A
=================
ARGENTINA: Can Borrow From World Bank Up to US$1.2BB Through 2018
-----------------------------------------------------------------
Charlie Devereux at Bloomberg News reports that the World Bank
said it will lend Argentina as much as much as US$4.8 billion
through 2018, providing much-needed dollars for a country whose
reserves are dwindling near an eight-year low.
Argentina will receive US$1 billion to US$1.2 billion per year in
loans for social development, the Washington-based lender said in
an e-mailed statement obtained by Bloomberg News. The World
Bank's IFC will also invest US$1.7 billion in export-oriented
private companies ranging from agribusiness, energy,
infrastructure and financial institutions, according to Bloomberg
News.
Bloomberg News recalls that Argentina defaulted on July 30 after a
U.S. judge blocked a debt payment because President Cristina
Fernandez de Kirchner's government refused to comply with a ruling
forcing it to pay holdout creditors from the 2001 default in full
at the same time. The default closed the door to access to
capital markets so the loans will provide some relief for the
government's foreign currency needs, said Eduardo Levy-Yeyati,
director of Buenos Aires-based consultancy firm Elypsis, Bloomberg
News notes.
"It's a modest piece of good news," Levy-Yeyati, who also works as
a consultant for the World Bank, said in a phone interview with
Bloomberg News from Washington. "In net terms, you could have
more dollars. It's not a huge sum, but everything counts," Mr.
Levy-Yeyati said.
Argentina has US$13 billion in debt obligations next year and the
loans will only serve to pay off maturities from other
multilateral lenders, said Eric Ritondale, an economist at Buenos
Aires-based Econviews, Bloomberg News notes.
"This is very small," Mr. Ritondale told Bloomberg News in a phone
interview from Buenos Aires. "It doesn't help change the short-
term prospects," Mr. Ritondale added.
* * *
The Troubled Company Reporter-Latin America, on Aug. 1, 2014,
reported that Argentina defaulted on some of its debt late July 30
after expiration of a 30-day grace period on a US$539 million
interest payment. Earlier, talks with a court-appointed mediator
ended without resolving a standoff between the country and a group
of hedge funds seeking full payment on bonds that the country had
defaulted on in 2001. A U.S. judge had ruled that the interest
payment couldn't be made unless the hedge funds led by Elliott
Management Corp., got the US$1.5 billion they claimed. The
country hasn't been able to access international credit markets
since its US$95 billion default 13 years ago.
As a result, reported the TCR-LA on Aug. 1, Standard & Poor's
Ratings Services lowered its unsolicited long-and short-term
foreign currency sovereign credit ratings on the Republic of
Argentina to selective default ('SD') from 'CCC-/C'.
The TCR-LA, on Aug. 4, 2014, also reported that Fitch Ratings
downgraded Argentina's Foreign Currency Issuer Default Rating
(IDR) to 'RD' from 'CC', and its Short-Term Foreign Currency
Issuer Default Rating to 'RD' from 'C'.
Meanwhile, Moody's Investors Service affirmed Argentina's Caa1
issuer rating, which also applies to domestic law bonds, confirmed
the (P)Caa2 rating for its foreign law bonds, and affirmed the Ca
rating on the original defaulted bonds. The long-term issuer
rating was placed on negative outlook, reported the TCR-LA on Aug.
5, 2014.
On Aug. 8, 2014, the TCR-LA reported that Moody's Latin America
Agente de Calificacion de Riesgo affirmed the deposit, debt,
issuer and corporate family ratings on Argentina's banks and
financial institutions, both on the global and national scales.
The outlook on these ratings has been changed to negative from
stable. At the same time, the rating agency has affirmed the
banks' Caa2 foreign-currency deposit ratings and Not-
Prime short-term ratings. The banks' standalone E financial
strength ratings corresponding to caa1 baseline credit assessments
(BCA) have also been affirmed.
The TCR-LA, On Aug. 6, 2014, also reported that DBRS Inc. has
downgraded Argentina's long-term foreign currency issuer rating
from CC to Selective Default (SD). The short-term foreign
currency rating has been downgraded to Default (D), from R-5. The
long-term and short-term local currency issuer ratings have been
confirmed at B (low) and R-5, respectively. The trend on the
long-term local currency rating is Negative, and the trend on the
short-term local currency rating is Stable.
TRANSPORTADORA DE GAS: Inks Collaboration Deal With FairfieldNodal
------------------------------------------------------------------
Transportadora de Gas Del Sur S.A. announced on August 7, a multi-
year collaboration agreement with FairfieldNodal to develop, plan
and execute multi-client Full Azimuth Nodal seismic surveys across
a substantial area within the U.S. Gulf of Mexico shelf region.
This initiative will combine FairfieldNodal's proven Ocean Bottom
Node Z700 technology and operating experience with TGS' leading
imaging solutions and long history as a leading data provider in
the Gulf of Mexico.
The terms of the collaboration provide a solid platform under
which TGS will offer industry leading seismic data solutions to
support the re-emergence of the shelf region. Transportadora de
Gas Del increased 2.14% to close at US$2.86 on August 18.
Its return on assets is 3.90% while return on investment (ROI) is
14.20%. Transportadora de Gas Del price to sales (P/S) ratio is
0.88.
Headquartered in Buenos Aires, Argentina, Transportadora de Gas
Del Sur S.A. is the largest transporter of natural gas within the
country, delivering approximately 60% of the total gas transported
in Argentina. TGS is also one of the largest natural gas
processors and one of the largest marketers of natural gas liquid
products in Argentina.
* * *
As reported in the Troubled Company Reporter-Latin America on
Jan. 15, 2014, Moody's Investors Service affirmed its B3 and A2.ar
senior unsecured bond ratings of Transportadora de Gas del Sur
S.A. (TGS) following the company's announced exchange offer in
relation to its outstanding US$374 million 7.875% Notes, due 2017.
The rating outlook has been changed to stable from negative.
=============
B O L I V I A
=============
BANCO PYME: Moody's Rates Subordinated Debt Issuance 'B3'
---------------------------------------------------------
Moody's Latin America Agente de Calificacion de Riesgo has
assigned Banco Pyme Ecofuturo S.A. (Ecofuturo)'s second takedown
of Bs. 16.3 million, under Ecofuturo's subordinated debt program
of Bs.100 million, a B3 global local currency debt rating and a
A1.bo national scale local currency debt rating.
The outlook on all ratings is stable.
The following ratings were assigned to Banco Pyme Ecofuturo S.A.'s
Bs. 16.3 million subordinated debt issuance:
Global Local Currency Subordinated Debt Rating: B3
Bolivia National Scale Local Currency Subordinated Debt Rating:
A1.bo
Ratings Rationale
Moody's explained that the B3 local currency subordinated debt
rating derives from Ecofuturo's B2 global local currency deposit
rating, and as such, it takes the seniority of the notes into
account.
Moody's standalone rating reflects Ecofuturo's limited geographic
diversification and monoline microfinance nature. However its
portfolio has diversified, as some of its original microlending
clients have evolved into SMEs. Given its microfinance nature, the
entity has a manageable loan book concentration, with a small
average loan ticket size.
The rating also incorporates the institution's adequate asset
quality, the conservative loan loss reserve policy and its good
capitalization level. However, Moody's notes that Ecofuturo's
profitability will be under pressure as a consequence of
regulatory changes and that its asset quality could weaken in
light of its fast loan growth strategy and leveraging of its
customer base.
Banco Pyme Ecofuturo S.A. is headquartered in La Paz, Bolivia, and
it had assets of Bs. 2.35 billion and equity of Bs. 172 million as
of June 2014.
The principal methodology used in this rating was Global Banks
published in July 2014.
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 "za" for South Africa. 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".
Regulatory Disclosures
For ratings issued on a program, series or category/class of debt,
this announcement provides certain regulatory disclosures in
relation to each rating of a subsequently issued bond or note of
the same series or category/class of debt or pursuant to a program
for which the ratings are derived exclusively from existing
ratings in accordance with Moody's rating practices. For ratings
issued on a support provider, this announcement provides certain
regulatory disclosures in relation to the rating action on the
support provider and in relation to each particular rating action
for securities that derive their credit ratings from the support
provider's credit rating. For provisional ratings, this
announcement provides certain regulatory disclosures in relation
to the provisional rating assigned, and in relation to a
definitive rating that may be assigned subsequent to the final
issuance of the debt, in each case where the transaction structure
and terms have not changed prior to the assignment of the
definitive rating in a manner that would have affected the rating.
For any affected securities or rated entities receiving direct
credit support from the primary entity(ies) of this rating action,
and whose ratings may change as a result of this rating action,
the associated regulatory disclosures will be those of the
guarantor entity. Exceptions to this approach exist for the
following disclosures, if applicable to jurisdiction: Ancillary
Services, Disclosure to rated entity, Disclosure from rated
entity.
==========================
C A Y M A N I S L A N D S
==========================
APACHE GP: Shareholder to Hear Wind-Up Report on Oct. 10
--------------------------------------------------------
The shareholder of Apache GP Limited will hear on Oct. 10, 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:
Intertrust SPV (Cayman) Limited
190 Elgin Avenue, George Town
Grand Cayman KY1-9005
Cayman Islands
c/o Jennifer Chailler
Telephone: (345) 943-3100
APACHE GP II: Shareholder to Hear Wind-Up Report on Oct. 10
-----------------------------------------------------------
The shareholder of Apache GP II Limited will hear on Oct. 10,
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:
Intertrust SPV (Cayman) Limited
190 Elgin Avenue, George Town
Grand Cayman KY1-9005
Cayman Islands
c/o Jennifer Chailler
Telephone: (345) 943-3100
BARCLAYS WEALTH: Shareholder to Hear Wind-Up Report on Oct. 3
-------------------------------------------------------------
The shareholder of Barclays Wealth Advisor Series - Multi-Manager
International Equity Ltd will hear on Oct. 3, 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:
Intertrust SPV (Cayman) Limited
190 Elgin Avenue, George Town
Grand Cayman KY1-9005
Cayman Islands
c/o Jennifer Chailler
Telephone: (345) 943-3100
BERRYWOOD LTD: Shareholders' Final Meeting Set for Sept. 23
-----------------------------------------------------------
The shareholders of Berrywood Ltd will hold their final meeting on
Sept. 23, 2014, at 11:00 a.m., to receive the liquidator's report
on the company's wind-up proceedings and property disposal.
The company's liquidator is:
Trident Liquidators (Cayman) Limited
c/o Eva Moore
Telephone: (345) 949 0880
Facsimile: (345) 949 0881
One Capital Place, 4th Floor
P.O. Box 847, George Town
Grand Cayman KY1-1103
Cayman Islands
CJP GP II: Shareholder to Hear Wind-Up Report on Oct. 10
--------------------------------------------------------
The shareholder of CJP GP II Limited will hear on Oct. 10, 2014,
at 8:45 a.m., the liquidator's report on the company's wind-up
proceedings and property disposal.
The company's liquidator is:
Intertrust SPV (Cayman) Limited
190 Elgin Avenue, George Town
Grand Cayman KY1-9005
Cayman Islands
c/o Jennifer Chailler
Telephone: (345) 943-3100
CONOCOPHILLIPS BLACK: Shareholders' Final Meeting Set for Sept. 24
------------------------------------------------------------------
The shareholders of Conocophillips Black Sea Ventures Ltd. will
hold their final meeting on Sept. 24, 2014, at 11:30 a.m., to
receive the liquidator's report on the company's wind-up
proceedings and property disposal.
The company's liquidator is:
Trident Liquidators (Cayman) Limited
c/o Eva Moore
Telephone: (345) 949 0880
Facsimile: (345) 949 0881
One Capital Place, 4th Floor
P.O. Box 847, George Town
Grand Cayman KY1-1103
Cayman Islands
CONOCOPHILLIPS RUSSIA: Shareholders' Meeting Set for Sept. 24
-------------------------------------------------------------
The shareholders of Conocophillips Russia Ventures Ltd. will hold
their final meeting on Sept. 24, 2014, at 11:00 a.m., to receive
the liquidator's report on the company's wind-up proceedings and
property disposal.
The company's liquidator is:
Trident Liquidators (Cayman) Limited
c/o Eva Moore
Telephone: (345) 949 0880
Facsimile: (345) 949 0881
One Capital Place, 4th Floor
P.O. Box 847, George Town
Grand Cayman KY1-1103
Cayman Islands
GLENMEADOWS LIMITED: Shareholders' Final Meeting Set for Sept. 16
-----------------------------------------------------------------
The shareholders of Glenmeadows Limited will hold their final
meeting on Sept. 16, 2014, at 9:00 a.m., to receive the
liquidator's report on the company's wind-up proceedings and
property disposal.
The company's liquidator is:
Appleby Trust (Cayman) Ltd
c/o Richard Gordon
Telephone: +1 (345) 949 4900
75 Fort Street, PO Box 1350
Grand Cayman KY1-1108
Cayman Islands
JAPAN BLUE: Shareholders' Final Meeting Set for Sept. 26
--------------------------------------------------------
The shareholders of Japan Blue Ocean Capital Partners Ltd. will
hold their final meeting on Sept. 26, 2014, at 9:00 a.m., to
receive the liquidator's report on the company's wind-up
proceedings and property disposal.
The company's liquidator is:
Shigenobu Yamagata
6-1-10-805 Maebaranishi
Funabashi, Chiba 274-0825
Japan
PIP4GV COPA: Shareholder to Hear Wind-Up Report on Oct. 10
----------------------------------------------------------
The shareholder of PIP4GV Copa Portum (Cayman) Ltd will hear on
Oct. 10, 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:
Intertrust SPV (Cayman) Limited
190 Elgin Avenue, George Town
Grand Cayman KY1-9005
Cayman Islands
c/o Jennifer Chailler
Telephone: (345) 943-3100
=========
C H I L E
=========
AUTOMOTORES GILDEMEISTER: Fitch Downgrades FC IDR to 'CCC'
----------------------------------------------------------
Fitch Ratings has downgraded the ratings of Automotores
Gildemeister S.A.'s (AG) as follows:
-- Foreign currency Issuer Default Rating (IDR) to 'CCC' from
'B';
-- Local currency IDR to 'CCC' from 'B';
-- USD400 million unsecured senior notes due in 2021 to
'CCC/RR4' from 'B/RR4';
-- USD300 million unsecured senior notes due in 2023 to
'CCC/RR4' from 'B/RR4'.
The rating downgrades reflect constant deterioration in AG's
credit profile driven by poor operational performance resulting in
leverage increase and liquidity deterioration at levels not
previously incorporated in the ratings. The ratings incorporate
the view that there is a substantial credit risk and that the
company's continued negative free cash flow (FCF) trend could
result in material deterioration of its liquidity during the next
quarters. The company faces a challenging scenario for the second
half of 2014 in its main markets. Chile's total industry vehicle
sales are expected to decline between 15% to 20% during 2014 over
2013. Peru's industry vehicle sales are expected to remain flat
during 2014 when compared to 2013. The 'CCC/RR4' rating of the
company's unsecured public debt reflects average recovery
prospects in the event of a default.
KEY RATING DRIVERS:
Weak Operational Performance and Negative FCF:
AG's EBITDAR margin has seen significant deterioration over the
last quarters driven by a combination of the following factors:
losses related to its operations in Brazil, decrease in the
average price point due to increased sales of entry-level models,
the impact of local currencies devaluations on revenues, and
limited availability of best-selling models that reduces business
margins. The company's EBITDAR margins were 10.6%, 6.4%, and 5.1%
during 2012, 2013 and latest 12 months (LTM) June 2014,
respectively. The company's EBITDAR during LTM June 2014 was
USD73 million (CLP38.8 billion), a 27% decline over the 2013
level. AG's FCF during LTM June 2014 was -USD114 million (-
CLP69.7 billion). The company's negative FCF during the period
reflects lower margins and increasing inventory levels resulting
in negative cash flow from operations (CFFO) of -USD64.7 million
(-CLP34.5 billion) and capital expenditures of USD49.3 million
(CPL26.2 billion). During the second quarter of 2014, the company
reached improvement in its FCF generation driven by lower working
capital needs. Although this is viewed as positive, it is still
early to offset the company's trend in its working capital
management during the 2013-2014 period.
High Leverage, Weak Liquidity:
The company's gross and net leverage, as measured by total
adjusted debt/EBITDAR and total adjusted net debt/EBITDAR, reached
levels of 14.9x and 13.2x, respectively, during LTM June 2014.
This represents a sharp increase versus 7.6x and 6.9x during LTM
September 2013. The company had USD1.1 billion (CLP601 billion)
in total adjusted debt at the end of June 2014. This debt
consists primarily of USD920 million (CLP520 billion) of on-
balance-sheet debt, including the unsecured notes due in 2021
(USD400 million) and 2023 (USD300 million), and an estimated
USD147 million (CLP80 billion) of off-balance-sheet debt
associated with lease obligations resulting from USD21.8 million
(CLP11.6 billion) in rentals payments during LTM June 2014.
Fitch views the company's liquidity as weak. AG ended June 30,
2014 with cash position and short term debt of USD123 million
(CLP68 billion) and USD233 million (CLP129 billion). The
company's liquidity relies on its capacity to continue having
available credit lines with banks to open new letters of credit
The company's ability to cover interest expenses - measured by the
EBITDA/interest expenses ratio - has deteriorated and reached 0.8x
as of June 2014 versus 2.6x and 1.2x in 2012 and 2013,
respectively. The company's real estate assets sale initially
scheduled to be executed during the second half of 2014 has been
postponed due to market conditions.
RATING SENSITIVITIES:
The ratings are expected to be driven primarily by the development
in the company's liquidity and FCF generation during the next 12-
month period ended in June 2015.
Negative Rating Actions - A downgrade could be triggered by
further deterioration of the company's liquidity and cash position
due to persistent negative FCF generation resulting in lower cash
position, increasing levels of short-term debt on a secured basis,
and weaker interest coverage ratio.
Positive Rating Actions: Conversely, the combination of the
following factors could result in a positive rating action: (i)
Improvement in the company's FCF generation trending to neutral
level on a consistent basis, (ii) Improvement in the company's
interest coverage (total EBITDA/interest expenses ratio) trending
to levels around 1.25x, while maintaining low short-term debt
relative to the cash position; and (iii) Improvement in the
company's adjusted gross leverage trending to levels around 7x
during the next 12-month period ended in June 2015.
===================================
D O M I N I C A N R E P U B L I C
===================================
* DOMINICAN REPUBLIC: Labor Subpoenas Wage Committee
----------------------------------------------------
Dominican Today reports that Unions Council (CNUS) President
Rafael (Pepe) Abreu warned on September 8, that labor subpoenaed
Wage Committee Director Felix Hidalgo to force management to meet,
within 72 hours, to enforce last year's agreement to increase the
minimum salary.
On Sept. 8, a bailiff served papers to Mr. Hidalgo, whom according
to Mr. Abreu has failed to call on employers' representatives to
apply the 14% increase agreed to on July 3, 2013, according to
Dominican Today.
The union leader, interviewed on SDTV Channels 24, said the CNUS
had to take court action against management, "who've shown
resistance to sit at the bargaining table and comply with the
compromise publicly agreed to review wages one year later, a
period which has already expired," the report notes.
===========
M E X I C O
===========
CEMEX SAB: In Talks to Refinance Some Bank Debt to Lower Costs
--------------------------------------------------------------
Anthony Harrup at The Wall Street Journal reports that CEMEX,
S.A.B. de C.V. said it is negotiating with a number of banks to
refinance part of its outstanding bank debt as it seeks to further
lower financial costs and extend its debt maturity.
In a regulatory filing ahead of a possible private bond placement,
Cemex SAB said it is in advanced talks with a group of banks aimed
at reaching a new agreement by the end of October, according to
The Wall Street Journal.
WSJ notes that the proceeds would be used to refinance part of an
existing financing agreement with banks.
The report relates that CEMEX SAB refinanced around US$15 billion
in bank debt during the 2009 global crisis, and in 2012, with
around half of the amount left to pay, agreed to reschedule some
US$6 billion in 2014 principal payments to 2017.
Cemex SAB has since lowered that further and owes around US$4.3
billion under the agreement, which is due in 2017, the report
discloses.
The report relays that Cemex SAB said the current talks with banks
are part of its strategy to improve its financial flexibility and
lower its overall debt costs. Company officials said recently
that Cemex's main priority is to recover the investment-grade
ratings that it lost during the 2009 crisis, the report adds.
Cemex SAB's total debt at the end of June was around US$17
billion, the report says.
About CEMEX SAB
CEMEX, S.A.B. de C.V., is a holding company of entities which
main activities are oriented to the construction industry,
through the production, marketing, distribution and sale of
cement, ready-mix concrete, aggregates and other construction
materials. CEMEX is a public stock corporation with variable
capital (S.A.B. de C.V.) organized under the laws of the United
Mexican States, or Mexico.
* * *
As reported in the Troubled Company Reporter-Latin America on
Sept. 8, 2014, Fitch Ratings has assigned expected ratings of 'BB-
/RR3(EXP)' to CEMEX S.A.B. de C.V.'s (CEMEX) proposed USD notes
due in 2025 and its proposed Euro notes due in 2022. Proceeds from
the Euro notes issuance will be used for general corporate
purposes, including the repayment of indebtedness under CEMEX's
Facilities Agreement. Proceeds from the USD issuance will be used
for general corporate purposes, including the repurchase of a
portion of the company's outstanding 2018 and 2020 notes.
=====================
P U E R T O R I C O
=====================
PUERTO RICO ELECTRIC: New Exec Seeks Plan to Remake Utility
-----------------------------------------------------------
Aaron Kuriloff at The Wall Street Journal reports that the new
chief restructuring officer in charge of turning around the Puerto
Rico Electric Power Authority says she's seeking a plan to remake
the business of the cash-strapped utility that balances the needs
of stakeholders.
Lisa J. Donahue -- ldonahue@alixpartners.com -- managing director
at AlixPartners LLP and head of the consulting firm's turnaround
and restructuring practice, said it is too soon to tell if the
effort will mean losses for pensioners or bondholders, according
to The Wall Street Journal.
The report notes that Ms. Donahue said she'll lean on more than 23
years of experience leading turnarounds at companies ranging from
Atlantic Power Corp. to New World Pasta Co. to help the utility
reach fiscal stability, as outlined in a deal with its lenders
last month.
"As we go through the process and develop the plan, we have to
take into consideration all the different constituencies and come
up with something that makes sense for the citizens of Puerto
Rico, the employees, the creditors -- there's a lot of factors
that need to be balanced," Ms. Donahue told the news agency during
an interview.
The authority, known as PREPA, committed to appoint a chief
restructuring officer and to complete a five-year business plan by
mid-December as part of a deal with bondholders, bond insurers and
lenders to extend some payments on a combined US$671 million in
bank lines of credit through next March, the report notes.
The report discloses that the utility is at the forefront of
Puerto Rico's financial difficulties. It is seeking cash to fund
operations and pay lenders even as the island broadly struggles
with steep unemployment and a weak economy, the report relates.
Its problems include rates that are more than twice the U.S.
average, outdated oil-burning power plants and about US$9 billion
in debt, the report says.
"Lisa has a clear track record of helping companies in our
industry and financial situation reach their goals by the
deadlines required," said Harry Rodriguez, president of Prepa's
board, in a statement announcing Ms. Donahue's appointment, the
report discloses. "She immediately convinced us that she would be
able to work successfully with the existing Prepa team. We are
confident that we all will benefit from her skills and
experience," Mr. Rodriguez added.
The report notes that Ms. Donahue said she'll meet as soon as
today (Sept. 8), with Juan F. Alicia Flores, executive director
for Prepa, and begin developing a road map for the new business
plan. She'll also spend time with the management team, study the
resources available and create lines of communication and
transparency, the report relays.
"As you go through a process like this, at different times there's
different challenges," Ms. Donahue said. "But it always gets
worked out, because reasonable people come to reasonable
solutions," Ms. Donahue added.
The report notes that Puerto Rico lawmakers in June approved
legislation allowing some public agencies, including the island's
power, water and transportation authorities, to overhaul their
finances. Those three owe a combined US$19.4 billion, according
to estimates from Barclays PLC, slightly more than Detroit's total
long-term obligations when the city filed for bankruptcy
protection last July, the report notes. The law doesn't apply to
Puerto Rico's general obligation or sales-tax debt, the report
discloses.
The report says that the commonwealth has about US$73 billion in
total debt, which is widely held by mutual funds and individuals,
and some analysts worry its problems could cause losses for
investors nationwide.
Overhauling Puerto Rico's public corporations has become a
priority for the administration of Gov. Alejandro Garcia Padilla
as it tries to jump-start the economy, eliminate budget deficits
and reassure investors that the island's fiscal position is
improving, the report adds.
* * *
The Troubled Company Reporter, on Aug. 4, 2014, reported that
Standard & Poor's Ratings Services has lowered its rating on
Puerto Rico Electric Power Authority's (PREPA) power revenue bonds
two notches to 'CCC' from 'B-'. The rating remains on CreditWatch
with negative implications, where S&P originally placed it
June 18, 2014.
================================
T R I N I D A D & T O B A G O
================================
CL FIN'L: CLICO Ceased Writing New Business
-------------------------------------------
Asha Javeed at Trinidad Express reports that on September 1,
Colonial Life Insurance Company of (Trinidad) Ltd (CLICO) ceased
writing new business with limited exceptions.
It is part of the company's restructuring, said CLICO Chairman
Gerald Yetming in a newspaper advertisement, which sought to
update stakeholders on the company's status, according to Trinidad
Express.
The report notes that the notice explained that the company's
insurance agents will demit office on September 24 but that
measures were in place to continue providing services for CLICO's
customers.
"The Central Bank of Trinidad and Tobago remains committed to
pursuing the resolution of CLICO in the interest of policyholders
and creditors, in accordance with the requirements of the law,"
the report quoted Mr. Yetming as saying.
"We will continue to renew all Group Health and Life contracts,
receive and process your premiums, honour your health and life
claims, pay your monthly pension and provide the excellent CLICO
service to which you are accustomed," said Mr. Yetming, the report
notes.
In May, the Central Bank confirmed that the insurance company,
which had received a Government bailout after it became cash-
strapped in 2009, was up for sale and "will conduct the process
for the sale and transfer of CLICO's traditional insurance
portfolio on a transparent, open market basis," the report
relates.
In an interview with the Sunday Express, Finance Minister Larry
Howai said the Government was waiting on a valuation on the assets
and liabilities of CLICO from actuaries and expected to receive it
in the next month, the report notes.
The report discloses that once in hand, a decision will be made on
the way forward.
In his national budget statement, Mr. Howai noted that CLICO has
done "exceptionally well in terms of writing new business while
maintaining substantial traditional business throughout the
crisis".
"Government is taking steps to recover the outlay which became
necessary to contain the crisis in CLICO and the CLICO Investment
Bank which also impacted their parent company, CL Financial Ltd.
To effect an orderly settlement of this debt, Government has
embarked on a medium-term strategy to secure the return of the
outlay of these funds. This has informed the basic parameters of
a comprehensive Shareholders' Agreement, a key component of which
is a proper restructuring of those companies with proper
governance practices in what is left of the Group. We now await
the outcome of the Methanol Holdings arbitration. Following this,
a more detailed report will be provided," the report quoted Mr.
Howai as saying.
Mr. Howai, the report relays, explained that without the
intervention, "We would have seen many of the companies in the
Group facing liquidation with the attendant loss of jobs and other
social and economic hardships which generally accompany such
occurrences".
About CLICO International
Colonial Life Insurance Company Ltd. (CLICO) is a member of the CL
Financial Group. CL Financial Limited is a privately held
conglomerate in Trinidad and Tobago. Founded as an insurance
company by Cyril Duprey, Colonial Life Insurance Company was
expanded into a diversified company by his nephew, Lawrence
Duprey. CL Financial is now one of the largest local
conglomerates in the region, encompassing over 65 companies in 32
countries worldwide with total assets standing at roughly US$100
billion.
* * *
As reported in the Troubled Company Reporter-Latin America on July
7, 2014, Trinidad Express said that the Central Bank has placed
the responsibility of voluntary separation package (VSEP)
negotiations for workers at insurance giant Colonial Life
Insurance Company Ltd. (CLICO) with the company's board, after
which it will review accordingly, the bank said in a statement.
The bank's statement follows protest action by CLICO workers,
supported by their union, the Banking, Insurance and General
Workers' Union (BIGWU), outside the Central Bank in Port of Spain,
according to Trinidad Express.
In a separate TCRLA report on June 26, 2014, Caribbean360.com said
that the Trinidad and Tobago government has welcomed an Appeal
Court ruling that the Attorney General Anand Ramlogan said saves
the country from paying out more than TT$1 billion (TT$1 = US$0.16
cents) to policyholders of the cash-strapped CLICO. The Appeal
Court overturned the ruling of a High Court that ruled members of
the United Policyholders Group (UPG) were entitled to be paid the
full sums of their polices. CLICO financially caved in on itself
at the end of 2008 after the investment instruments of major
policyholders matured and they wanted hundreds of millions of
dollars they were owed.
On Aug. 6, 2013, the TCR-LA, citing Caribbean360.com, said that
over TT$8 billion worth of CLICO's profitable business will be
transferred to Atruis, a new company that will be owned by the
state. The Trinidad Express said that the Cabinet approved the
transfer as the Finance and General Purposes Committee continues
to discuss a letter of intent hammered out by the Ministry of
Finance and CL Financial's 400 shareholders, which envisions
taxpayers will recover the more than TT$20 billion Government has
injected since 2009 to keep CL subsidiary CLICO and other
companies afloat.
At its annual general meeting in Sept. 2013, CL Financial
shareholders voted to extend the agreement with Government until
August 25, 2014, while Cabinet decides on a new framework accord
to recover the debt owed to Government through divestment of CL
subsidiaries, including Methanol Holdings, Republic Bank,
Angostura Holdings, CL World Brands and Home Construction Ltd.,
Caribbean360.com related. Proceeds from the divestment of these
assets will go toward Government's recovery of the billions it
pumped into CLICO.
***********
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.
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Send announcements to conferences@bankrupt.com
***********
S U B S C R I P T I O N I N F O R M A T I O N
Troubled Company Reporter-Latin America is a daily newsletter
co-published by Bankruptcy Creditors' Service, Inc., Fairless
Hills, Pennsylvania, USA, and Beard Group, Inc., Washington, D.C.,
USA, Marites O. Claro, Joy A. Agravante, Rousel Elaine T.
Fernandez, Valerie U. Pascual, Julie Anne L. Toledo, and Peter A.
Chapman, Editors.
Copyright 2014. All rights reserved. ISSN 1529-2746.
This material is copyrighted and any commercial use, resale or
publication in any form (including e-mail forwarding, electronic
re-mailing and photocopying) is strictly prohibited without prior
written permission of the publishers.
Information contained herein is obtained from sources believed to
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The TCR Latin America subscription rate is US$775 per half-year,
delivered via e-mail. Additional e-mail subscriptions for members
of the same firm for the term of the initial subscription or
balance thereof are US$25 each. For subscription information,
contact Peter A. Chapman at 215-945-7000 or Nina Novak at
202-241-8200.
* * * End of Transmission * * *