/raid1/www/Hosts/bankrupt/TCRLA_Public/150109.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
Friday, January 9, 2015, Vol. 16, No. 006
Headlines
A R G E N T I N A
ARGENTINA: Must Give Creditors Asset Info, 2nd Circ. Rules
ARGENTINA: Vehicle Production Fell 22% in 2014
B R A Z I L
OAS S.A.: S&P Lowers Global Scale Corp. Credit Rating to 'D'
OAS S.A.: Fitch Lowers Issuer Default Ratings to 'RD'
VIRGOLINO DE OLIVEIRA: S&P Lowers Corporate Credit Rating to 'CC'
C A Y M A N I S L A N D S
AQR EXTENDED: Shareholder Receives Wind-Up Report
AQR EXTENDED MASTER: Shareholder Receives Wind-Up Report
AQR GLOBAL: Shareholder Receives Wind-Up Report
AQR GLOBAL STOCK: Shareholder Receives Wind-Up Report
AQR R.C.: Shareholder Receives Wind-Up Report
CITCO INVESTMENT: Members Receive Wind-Up Report
HH GENERATION: Shareholder Receives Wind-Up Report
LG PACIFIC: Members Receive Wind-Up Report
LOMA REINSURNACE: Shareholders Receive Wind-Up Report
M SQUARE: Shareholder Receives Wind-Up Report
SHOAL BAY: Shareholders Receive Wind-Up Report
STRONGMAN HOLDINGS: Shareholders Receive Wind-Up Report
THEOREMA LIQUID: Shareholder Receives Wind-Up Report
VOYAGER ADVANTAGE: Shareholder Receives Wind-Up Report
D O M I N I C A N R E P U B L I C
DOMINICAN REPUBLIC: Tax Jump on Staples Also Hobbles Merchants
M E X I C O
MEXICO: Will Weather "Storm" in Oil Market, Gov't Says
P U E R T O R I C O
PUERTO RICO AQUEDUCT: Fitch Maintains Watch Neg. on $3.4BB Bonds
T R I N I D A D & T O B A G O
TRINIDAD CEMENT: Pays TT$62 Million to Employees
- - - - -
=================
A R G E N T I N A
=================
ARGENTINA: Must Give Creditors Asset Info, 2nd Circ. Rules
----------------------------------------------------------
Stewart Bishop at Law360 reports that the Second Circuit on Dec.
23, upheld a lower court's order directing Argentina and several
banks to hand over information to hedge fund bondholders about the
country's assets, including diplomatic and military property,
rejecting Argentina's claims of sovereign immunity.
Argentina's argument that it is protected from such discovery
requests under the Foreign Sovereign Immunities Act has already
been rejected by the U.S. Supreme Court, according to a three-
judge panel for the appeals court, Law360 notes.
While Argentina further claimed that its diplomatic property and
documents were off limits pursuant to the Vienna Convention on
Diplomatic Relations and the Vienna Convention on Consular
Relations, the panel said Argentina should bring up its objections
when the hedge fund plaintiffs actually seek to execute on such
property, according to Law360.
Argentina's "'self-serving legal assertion' of immunity does not
entitle it to withhold otherwise discoverable information," the
panel said, the report relates.
The report discloses that the plaintiff-hedge funds -- affiliates
of Aurelius Capital Management LP and Paul Singer's Elliott
Capital Management -- bought Argentine sovereign debt at a
discount after the country defaulted on $100 billion in bonds in
2001. The funds refused to swap them out in restructurings in
2005 and 2010, instead suing in the U.S. for full repayment, the
report notes.
U.S. District Judge Thomas Griesa has said that Argentina can't
pay other bondholders that agreed to debt restructurings unless it
also makes a rateable payment to the "holdout" hedge funds. The
Second Circuit upheld that finding, and the U.S. Supreme Court
declined to take up Argentina's appeal, the report relays.
The report relays that Argentina has steadfastly refused to pay
the holdouts, and the country fell into default July 30 after
Judge Griesa blocked a $539 million bond payment via Bank of New
York Mellon to the so-called exchange bondholders.
Last year, Judge Griesa ordered Argentina and various banks,
including Barclays Bank PLC, Citibank NA, Deutsche Bank AG and
Bank of America, to produce a wide range of information about
Argentine assets to the hedge funds, who have been pursuing
Argentina's assets around the world in U.S. federal court in an
effort to make good on their judgments, the report discloses.
In fighting the discovery order, Argentina's attorneys at Cleary
Gottlieb Steen & Hamilton LLP have argued that the plaintiffs are
looking for information that goes beyond just bank accounts and
other assets and are seeking to pry into the value of Argentina's
military and diplomatic assets, as well as those held by
individual government officials, the report notes. Even if the
country agreed to provide that information, it could not
reasonably do so, they claim, the report relays.
The hedge funds, represented by Gibson Dunn & Crutcher LLP,
Dechert LLP and others, contend the country is simply raising the
issue of certain "marginal" assets as a pretext to delay the
proceedings, and possibly to force the plaintiffs to relitigate
the discovery request before Judge Griesa, the report notes.
During oral arguments on Dec. 17, the panel was clearly skeptical
of Argentina's position, with one appellate judge calling the
country a "pathological" and recalcitrant deadbeat, the report
says.
Circuit Judges Ralph K. Winter, Dennis Jacobs and Barrington D.
Parker sat on the panel for the Second Circuit.
The hedge funds are represented by Matthew D. McGill, Theodore B.
Olson of Gibson, Dunn & Crutcher LLP, Robert A. Cohen of Dechert
LLP, Roy T. Englert and Mark T. Stancil of Robbins Russell Englert
Orseck Untereiner & Sauber LLP and Martin Gusy of Cozen O'Connor,
the report notes.
Argentina is represented by Jonathan I. Blackman, Carmine D.
Boccuzzi, Daniel J. Northrop and Michael M. Brennan of Cleary
Gottlieb Steen & Hamilton LLP.
The case is NML Capital v. Republic of Argentina, case number 13-
4054, in the U.S. Court of Appeals for the Second Circuit.
* * *
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 that day, 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.
On Nov. 3, 2014, the TCR-LA reported that Fitch Ratings downgraded
Argentina's rating on Par Bonds issued under Foreign Law to 'D'
from 'C' as Argentina has not been able to cure the missed coupon
payments on its par bonds issued under foreign law after the
expiration of the 30-day grace period on Oct. 30. According to
Fitch's criteria, this constitutes an event of default and Fitch
has downgraded the affected securities to 'D'. In addition, Fitch
has affirmed:
-- Foreign Currency Issuer Default Rating (IDR) at 'RD';
-- Local Currency IDR at 'CCC';
-- Short-term Foreign Currency IDR at 'RD';
-- Country Ceiling at 'CCC'.
-- Performing Foreign Law Exchanged Securities (Global 17) at
'C';
-- Local Currency exchanged bonds under Argentine Law at 'CCC';
-- Foreign and Local Currency non-exchanged securities under
Argentine Law at 'CCC';
-- Discount Bonds issued under Foreign Law at 'D'.
ARGENTINA: Vehicle Production Fell 22% in 2014
----------------------------------------------
EFE News reports that Argentina's automotive industry produced
617,329 units in 2014, a 22 percent decline from the previous
year, the ADEFA automakers association said.
Vehicle exports fell 17.4 percent last year to 357,847 units,
according to EFE News.
* * *
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 that day, 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.
On Nov. 3, 2014, the TCR-LA reported that Fitch Ratings downgraded
Argentina's rating on Par Bonds issued under Foreign Law to 'D'
from 'C' as Argentina has not been able to cure the missed coupon
payments on its par bonds issued under foreign law after the
expiration of the 30-day grace period on Oct. 30. According to
Fitch's criteria, this constitutes an event of default and Fitch
has downgraded the affected securities to 'D'. In addition, Fitch
has affirmed:
-- Foreign Currency Issuer Default Rating (IDR) at 'RD';
-- Local Currency IDR at 'CCC';
-- Short-term Foreign Currency IDR at 'RD';
-- Country Ceiling at 'CCC'.
-- Performing Foreign Law Exchanged Securities (Global 17) at
'C';
-- Local Currency exchanged bonds under Argentine Law at 'CCC';
-- Foreign and Local Currency non-exchanged securities under
Argentine Law at 'CCC';
-- Discount Bonds issued under Foreign Law at 'D'.
===========
B R A Z I L
===========
OAS S.A.: S&P Lowers Global Scale Corp. Credit Rating to 'D'
------------------------------------------------------------
Standard & Poor's Ratings Services lowered its global scale
corporate credit rating on OAS S.A. to 'D' from 'CC'. S&P is also
lowering the national scale ratings to 'D/D' from 'brCC/brC'. At
the same time, S&P is lowering the ratings on OAS' 2021 notes
(issued by its wholly-owned financial vehicle OAS Finance Ltd.)
and on its ninth debenture issuance to 'D' from 'CC'. S&P is
affirming all other issue-level ratings and keeping them on
CreditWatch with negative implications where S&P placed them on
Jan. 2, 2015, reflecting its expectation that, although the
company has not yet missed any payment nor has it declared a
formal default as a result of acceleration clauses on this debt,
default is almost certain.
"The downgrade reflects OAS' missed payment on its ninth debenture
issuance and our belief that it's highly likely the company will
face a general default, therefore, all outstanding debt would
likely be subject to an ongoing restructuring process," said
Standard & Poor's credit analyst Renata Lotfi. Additionally, S&P
don't expect the company to make the missed interest payment on
the 2021 notes (due Jan. 2, 2015) within the 30-day cure period.
OAS S.A.: Fitch Lowers Issuer Default Ratings to 'RD'
-----------------------------------------------------
Fitch Ratings has downgraded the Foreign Currency (FC) and Local
Currency (LC) Issuer Default Ratings (IDRs) for OAS S.A. and
Construtora OAS S.A. to 'RD' from C' and the Long-term National
Scale ratings to 'RD(bra)' from 'C(bra)'. In conjunction with
these rating actions, Fitch has also downgraded the Long-Term IDR
for OAS Investments GmbH to 'RD' from C' and the National Scale
rating for OAS Empreendimentos S.A. to 'RD(bra)' from C(bra)'.
KEY RATING DRIVERS
These downgrades follow the announcement by OAS S.A. that it did
not pay the principal and interest on its 9th debentures issuance,
in the amount of BRL103 million, due January 5th. On Jan. 2nd,
2015, Fitch downgraded of the group's ratings to 'C'/'C(bra)
following the announcement by OAS that it did not pay the interest
on its USD400 million senior unsecured notes due 2021 in the
amount of USD16 million, issued by OAS Finance Ltd., thus entering
the 30-day cure period. This issuance is guaranteed by OAS S.A.,
Construtora OAS S.A. and OAS Investimentos S.A.
RATING SENSITIVITIES
Absent a material new event, OAS S.A. and its subsidiaries are
likely to default on their debt in the near future. Fitch
considers the agreement of all creditors to renegotiate their debt
as unlikely.
VIRGOLINO DE OLIVEIRA: S&P Lowers Corporate Credit Rating to 'CC'
-----------------------------------------------------------------
Standard & Poor's Ratings Services lowered its global scale
corporate credit and debt ratings on Virgolino de Oliveira S.A. -
Acucar e Alcool (GVO) to 'CC' from 'CCC-'. S&P also lowered its
Brazil national scale rating on the company to 'brCC' from
'brCCC-'. All ratings remain on CreditWatch negative.
The downgrade reflects S&P's view of a very high probability that
GVO won't be able to comply with its upcoming interest payments
for about $40 million, $8.5 million of which is due Jan. 13, 2015.
This scenario would likely lead to a general default of its
obligations. The company has hired a financial advisor to
restructure its capital structure in October 2014, when S&P
downgraded GVO to 'CCC-' from 'B'.
GVO has three bonds outstanding, which are due 2018, 2020, and
2022, totaling $785 million. The interest payments are due
Jan. 13, Jan. 28, and Feb. 9. The company has struggled with high
debt levels and interest burden, which has hindered its cash flow
generation amid the already low crushing volumes due to the
drought in Sao Paulo and low global sugar prices. S&P understands
that as the company has repaid debt it owes to Copersucar,
resulting in GVO's current marginal cash position to pay the
interests.
The negative CreditWatch listing reflects a possible downgrade to
'D' if GVO misses the forthcoming interest payments, the first of
which is due Jan. 13, 2015. This will occur if GVO can't timely
restructure its debt, the possibility of which is unlikely in this
very short period.
==========================
C A Y M A N I S L A N D S
==========================
AQR EXTENDED: Shareholder Receives Wind-Up Report
-------------------------------------------------
The shareholder of AQR Extended GTAA Offshore Fund Ltd. received
on Dec. 15, 2014, the liquidator's report on the company's wind-up
proceedings and property disposal.
The company's liquidator is:
Ogier
c/o Jennifer Parsons
Telephone: (345) 815-1820
Facsimile: (345) 949-9877
AQR EXTENDED MASTER: Shareholder Receives Wind-Up Report
--------------------------------------------------------
The shareholder of AQR Extended GTAA Master Account Ltd. received
on Dec. 15, 2014, the liquidator's report on the company's wind-up
proceedings and property disposal.
The company's liquidator is:
Ogier
c/o Jennifer Parsons
Telephone: (345) 815-1820
Facsimile: (345) 949-9877
AQR GLOBAL: Shareholder Receives Wind-Up Report
-----------------------------------------------
The shareholder of AQR Global Asset Allocation Offshore Fund (USD)
IV Ltd. received on Dec. 15, 2014, the liquidator's report on the
company's wind-up proceedings and property disposal.
The company's liquidator is:
Ogier
c/o Jennifer Parsons
Telephone: (345) 815-1820
Facsimile: (345) 949-9877
AQR GLOBAL STOCK: Shareholder Receives Wind-Up Report
-----------------------------------------------------
The shareholder of AQR Global Stock Selection HV Offshore Fund
Ltd. received on Dec. 15, 2014, the liquidator's report on the
company's wind-up proceedings and property disposal.
The company's liquidator is:
Ogier
c/o Jennifer Parsons
Telephone: (345) 815-1820
Facsimile: (345) 949-9877
AQR R.C.: Shareholder Receives Wind-Up Report
---------------------------------------------
The shareholder of AQR R.C. Equity Master Account Ltd. received on
Dec. 15, 2014, the liquidator's report on the company's wind-up
proceedings and property disposal.
The company's liquidator is:
Ogier
c/o Jennifer Parsons
Telephone: (345) 815-1820
Facsimile: (345) 949-9877
CITCO INVESTMENT: Members Receive Wind-Up Report
------------------------------------------------
The members of Citco Investment Advisors Limited received on
Dec. 15, 2014, the liquidator's report on the company's wind-up
proceedings and property disposal.
The company's liquidator is:
CDL Company Ltd.
P.O. Box 31106 Grand Cayman KY1-1205
Cayman Islands
HH GENERATION: Shareholder Receives Wind-Up Report
--------------------------------------------------
The shareholder of HH Generation Inc. received on Dec. 18, 2014,
the liquidator's report on the company's wind-up proceedings and
property disposal.
The company's liquidator is:
Philip Mosely
Harbour Centre, Ground Floor
42, North Church Street, George Town
Grand Cayman KY1-1110
Cayman Islands
Telephone: +1 (345) 949 4018
Facsimile: +1 (345) 949 7891
LG PACIFIC: Members Receive Wind-Up Report
------------------------------------------
The members of LG Pacific Assets Fund received on Dec. 16, 2014,
the liquidator's report on the company's wind-up proceedings and
property disposal.
The company's liquidator is:
Susanna Shui Shan Ng
c/o BMO Global Asset Management (Asia) Limited
Suite 3808, One Exchange Square Central
Hong Kong
LOMA REINSURNACE: Shareholders Receive Wind-Up Report
-----------------------------------------------------
The shareholders of Loma Reinsurnace Ltd received on Dec. 18,
2014, the liquidator's report on the company's wind-up proceedings
and property disposal.
The company's liquidator is:
Carl Gosselin
Wilmington Trust (Cayman), Ltd.
P.O. Box 32322, Grand Cayman, KY1-1209
Cayman Islands
Telephone: (345) 640-6712
M SQUARE: Shareholder Receives Wind-Up Report
---------------------------------------------
The shareholder of M Square Brazil Value Fund, Ltd. received on
Dec. 9, 2014, the liquidator's report on the company's wind-up
proceedings and property disposal.
The company's liquidator is:
M Square Investimentos Ltda
c/o Joanne Huckle
Telephone: +1 (345) 949 9876
Facsimile: +1 (345) 949 9877
SHOAL BAY: Shareholders Receive Wind-Up Report
----------------------------------------------
The shareholders of Shoal Bay West Properties LLC received on
Dec. 18, 2014, the liquidators' report on the company's wind-up
proceedings and property disposal.
The company's liquidators are:
Rebecca Eggleton
Michael Eggleton
Wilmington Trust (Cayman), Ltd.
Attn.: Carl Gosselin, Agent
P.O. Box 32322, Grand Cayman, KY1-1209
Cayman Islands
Telephone: (345) 640-6712
STRONGMAN HOLDINGS: Shareholders Receive Wind-Up Report
-------------------------------------------------------
The shareholders of Strongman Holdings Limited received on
Dec. 15, 2014, the liquidator's report on the company's wind-up
proceedings and property disposal.
The company's liquidator is:
Mourant Ozannes Cayman Liquidators Limited
c/o Jo-Anne Maher
Telephone: (345) 814 9255
Facsimile: (345) 949 4647
94 Solaris Avenue, Camana Bay
P.O. Box 1348 Grand Cayman KY1-1108
Cayman Islands
THEOREMA LIQUID: Shareholder Receives Wind-Up Report
----------------------------------------------------
The shareholder of Theorema Liquid L/S Fund Ltd. received on
Dec. 10, 2014, the liquidator's report on the company's wind-up
proceedings and property disposal.
The company's liquidator is:
K.D. Blake
c/o Giji Alex
Telephone: (345) 914-4350/ (345) 949-4800
Facsimile: (345) 949-7164
P.O. Box 493 Grand Cayman KY1-1106
Cayman Islands
VOYAGER ADVANTAGE: Shareholder Receives Wind-Up Report
------------------------------------------------------
The shareholder of Voyager Advantage SPV, Ltd. received on
Dec. 19, 2014, the liquidator's report on the company's wind-up
proceedings and property disposal.
The company's liquidator is:
Voyager Management GP, LLC
c/o Jennifer Parsons
Telephone: +1 (345) 949 9876
Facsimile: +1 (345) 949 9877
===================================
D O M I N I C A N R E P U B L I C
===================================
DOMINICAN REPUBLIC: Tax Jump on Staples Also Hobbles Merchants
--------------------------------------------------------------
Dominican Today reports that the 2% jump of the sales tax (ITEBIS)
on several staples not only affects the pockets of a low-income
population but also merchants whose sales could plunge as much as
38 percent.
"When prices climb consumers buy less," warned National Merchants
Council president Antonio Cruz, according to Dominican Today.
The report notes that Mr. Cruz said that's what took place in
January 2014 when the ITEBIS climbed from 8 to 11% on some
staples, causing losses of close to 30%.
"President (Danilo) Medina, who approved a tax reform for four
years, had to make an adjustment of workers' salaries so they
could offset that cost; because what's happening is that buying
power is being lost," the report quoted Mr. Cruz as saying.
The report relates that Mr. Cruz said that adding to a higher
ITEBIS is a rising dollar, leading to soaring prices on products
such as a pound of brown sugar, from 18 to 25 pesos.
Poorest, the Most Affected
The jump on the ITEBIS from 11 to 13 percent most affects those
who earn the minimum wage, since their household staples cost
RD$12,547 per month, according to Central Bank, the report adds.
===========
M E X I C O
===========
MEXICO: Will Weather "Storm" in Oil Market, Gov't Says
------------------------------------------------------
EFE News reports that Mexico's government expects to weather the
"storm" in the oil market caused by plunging prices and plans to
move forward with auctions aimed at bringing private investors
into the energy industry, the key reform implemented by President
Enrique Pena Nieto, despite the current "unfavorable" environment,
presidential spokesman Eduardo Sanchez said.
"There is never a good time for a storm to arrive," Mr. Sanchez
said in response to a question about the conditions facing Mexico
and other oil producers, the report relates.
======================
P U E R T O R I C O
======================
PUERTO RICO AQUEDUCT: Fitch Maintains Watch Neg. on $3.4BB Bonds
----------------------------------------------------------------
In accordance with its practice of regularly reviewing ratings on
Rating Watch, Fitch Ratings maintains its Rating Watch Negative
status on $3.4 billion of outstanding Puerto Rico Aqueduct and
Sewer Authority, Puerto Rico (PRASA, or the authority) senior lien
revenue bonds.
The bonds are currently rated 'B+'.
SECURITY
The bonds are secured by a gross lien of all authority revenues
related to PRASA's combined water and sewer system (the system),
as defined in the amended master agreement of trust (MAT), senior
to all other debt or expenses of PRASA. Authority revenues
include operating revenues, as defined in the amended MAT (e.g.
user charges and impact fees), as well as governmental funds
available to pay current expenses; amounts from the Commonwealth
of Puerto Rico (the commonwealth) for payment of commonwealth
guaranteed indebtedness (CGI) or commonwealth supported
obligations (CSO); and any amounts transferred from the budgetary
reserve fund, as created in the amended and restated Fiscal
Oversight Agreement between PRASA, the commonwealth and the
Government Development Bank for Puerto Rico (GDB). PRASA revenues
received from the commonwealth for CGI and CSO are not subject to
lien of the MAT and are not available to pay debt service on the
bonds.
KEY RATING DRIVERS
NEGATIVE WATCH MAINTAINED: The Negative Watch continues to reflect
concerns relating to liquidity requirements that are dependent on
third-party extension of credit or market access. PRASA has
certain bank lines of credit (LOC) outstanding that mature in
March 2015. In addition, PRASA has a sizeable and largely
regulatory-driven capital improvement program (CIP) that
necessitates ongoing market access in order to fund.
SELF-SUFFICIENT OPERATIONS FROM RATE HIKE: PRASA enacted a 67%
average rate increase for fiscal 2014 which allowed PRASA to
become self-sufficient without assistance from the commonwealth
and the GDB. This alleviates a major concern that had developed
in recent years. Continued self-sufficient operations are
expected over at least the next several years.
FAVORABLE CAPITAL DEVELOPMENTS: The CIP continues to be
substantial but negotiations with regulators are expected to lead
to a cap in required annual spending. Also, the expected annual
cap is expected to be meaningfully less than recent CIP
projections.
HIGH UTILITY RATES: The rate hike for fiscal 2014 pushed
residential charges well above Fitch's 2% of median household
income affordability measure and increased bad debt levels.
However, limited to no additional increases in user charges are
expected through at least fiscal 2018.
WEAK DEBT PROFILE: Debt levels are high both in terms of absolute
dollars as well as the relative percentage of carrying costs to
revenues. Costs will also continue to increase as the system
pushes forward with its ongoing CIP funding but the rate of growth
should slow from previous expectations.
SOLID MANAGEMENT: PRASA management is strong. In addition, GDB
provides advisory support. Unlike recent years where PRASA relied
extensively on commonwealth and GDB financial funding, limited to
no financial support is expected over the foreseeable future.
WEAK BUT EXTENSIVE SERVICE AREA: The service territory is diverse,
although weak economic conditions have been protracted and
customer wealth levels are limited.
ESSENTIAL UTILITY: The system provides an essential service to the
residents of Puerto Rico.
RATING SENSITIVITIES
MARKET CHALLENGES: Difficulty or perceived inability to refinance
or extend PRASA's outstanding bank LOCs and access funds for its
CIP in the coming weeks would put additional negative pressure on
PRASA's rating. Alternatively, a refinancing or long-term
extension of the maturing LOCs could warrant an affirmation and
subsequent removal of the Rating Watch Negative.
CHANGES IN COMMONWEALTH RATING: PRASA's revenue bonds likely will
be influenced by movement of the commonwealth general obligation
rating for the foreseeable future given the commonwealth's
historical actions and ability to expose PRASA to potential fiscal
and operational challenges.
WEAKENED FINANCIALS: Deterioration in financial results that
threatens PRASA's ability to achieve at least break-even results
would likely result in a downgrade given the weakened credit
quality of the commonwealth and its constrained ability to provide
ongoing support to PRASA.
CREDIT PROFILE
PRASA provides water service to virtually the entire island,
including the roughly four million residents and five million
annual tourists; sewer service is limited to around 60% of the
island.
WATCH RESOLUTION TIED TO SUCCESSFUL MARKET ACCESS
Fitch expects to resolve the current Negative Watch upon PRASA's
ability to refinance or extend its outstanding LOCs (which mature
in March 2015) and obtain funding for near-term capital projects.
Fitch downgraded PRASA's bonds in July 2014 and placed them on
Rating Watch Negative following a downgrade of the commonwealth's
GO bonds and implementation of the Puerto Rico Public Corporation
Debt Enforcement and Recovery Act, which established a
restructuring regime for public corporations.
================================
T R I N I D A D & T O B A G O
================================
TRINIDAD CEMENT: Pays TT$62 Million to Employees
------------------------------------------------
Trinidad and Tobago Newsday reports that Trinidad Cement Limited
has paid TT$62 million in retroactive payments to employees on
December 22, 2014.
In a statement which was issued Jan. 7 by the Trinidad and Tobago
Stock Exchange, TCL indicated that last December it issued a
notice to stakeholders regarding the execution of a Memorandum of
Agreement with the Oilfield Workers Trade Union (OWTU) in relation
to an order of the Industrial Court on certain trade disputes and
all other outstanding items for the period 2012 to 2014, according
to Trinidad and Tobago Newsday.
The report notes that TCL said the retroactive payments it made to
employees last month was in relation to this matter. The company
is scheduled to hold a special stakeholders meeting at the Hilton
Trinidad on January 22 to discuss its corporate restructuring
plans, the report relates.
One of the other issues to be addressed at that meeting is the
removal of a restriction which prevents any person from holding
more than 20 percent of the issued share capital of the company,
the report discloses.
That restriction also prohibits any person from having more than
20 percent of the voting rights of the company, the report says.
In its statement, TCL said this restriction is contained in
Article Five of its Articles of Continuance (Restrictions on Share
Transfers and Share Ownership), notes the report.
TCL said these restrictions have the potential to restrict the
marketability of the shares and in so doing may undermine
shareholder value, the report adds.
* * *
As reported in the Troubled Company Reporter-Latin America on Oct.
6, 2014, RJR News said Dr. Rollin Bertrand, Chief Executive
Officer of Trinidad Cement Limited, the parent company for
Jamaica's Caribbean Cement Limited, was sacked.
The report noted that Dr. Bertrand, TCL Chairman Andy Bhajan, and
four other directors, tendered their resignations minutes before a
group of shareholders met to have them removed at an August 19
special meeting. Although he resigned as director at that
meeting, Dr. Bertrand retained his position as Chief Executive
Officer at that time, the report related.
On Oct. 8, 2014, the TCRLA said that Standard & Poor's Ratings
Services lowered its corporate credit rating on Trinidad Cement
Limited Group (TCL) to 'D' from 'B'. The downgrade reflects TCL's
missed debt service payments due Sept. 30, 2014.
On Oct. 9, 2014, the TCRLA reported that Fitch Ratings downgraded
Trinidad Cement Limited Group's (TCL) foreign and local Currency
Issuer Default Ratings (IDRs) to 'D' from 'B-'.
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 2015. 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
202-362-8552.
* * * End of Transmission * * *