/raid1/www/Hosts/bankrupt/TCRLA_Public/150114.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
Wednesday, January 14, 2015, Vol. 16, No. 009
Headlines
A R G E N T I N A
BUENOS AIRES: Moody's Assigns Caa1 Debt Rating to 3 Note Classes
B E R M U D A
OLYMPIC CLUB: To Close Following Merger With Competitor
B R A Z I L
AGROPECUARIA NOSSA: Moody's Cuts CFR & Sr. Unsec. Debt Rating to C
BRAZIL: Real Drops Most Among Major Currencies on GDP Outlook
C A Y M A N I S L A N D S
ASTRA STAR: Commences Liquidation Proceedings
CSOP GREATER: Commences Liquidation Proceedings
D&P NEW WORLD: Commences Liquidation Proceedings
DUET ALTERNATIVE: Commences Liquidation Proceedings
GRAND RICHMOND: Commences Liquidation Proceedings
MULTI-MANAGER ALPHA: Placed Under Voluntary Wind-Up
REPAK LIMITED: Commences Liquidation Proceedings
RUSSOLA INTERNATIONAL: Placed Under Voluntary Wind-Up
SEAHUNTER DRILLER 1: Commences Liquidation Proceedings
SEAHUNTER DRILLER 3: Commences Liquidation Proceedings
SEAHUNTER DRILLER 4: Commences Liquidation Proceedings
SPRUCE REAL: Commences Liquidation Proceedings
SUPERFUND GREEN: Placed Under Voluntary Wind-Up
VERDIS OFFSHORE: Commences Liquidation Proceedings
WANG STRATEGIC: Commences Liquidation Proceedings
C O L O M B I A
MILLICOM INT'L: Fitch Affirms 'BB+' IDRs; Outlook Stable
G R E N A N D A
GRENADA: Taiwan Agrees to Cut Outstanding Loan Repayment
M E X I C O
MEXICO: Sells $2 Billion of Bonds to Fund Tender After Record '14
T R I N I D A D & T O B A G O
COLONIAL LIFE: Senior Counsel Takes Firm's Case to Privy Council
X X X X X X X X X
LATAM: IDB Loans Totaled More than $13 Billion in 2014
LATIN AMERICA: Loan Growth to Decrease in 2015, Fitch Says
- - - - -
=================
A R G E N T I N A
=================
BUENOS AIRES: Moody's Assigns Caa1 Debt Rating to 3 Note Classes
----------------------------------------------------------------
Moody's Latin America Agente de Calificacion de Riesgo has
assigned Caa1 Global Scale local currency debt rating and Baa1.ar
Argentina National Scale rating in local currency to Classes 12,
13 and 14 notes for a total combined amount of USD100 million to
be issued by the City of Buenos Aires under their Local Financing
Program.
Ratings Rationale
The creation of the Local Financing Program was authorized by Laws
4315, 4431 and 4472 of 2012, Laws 4810 and 4885 of 2013 and by Law
4949 of 2014. The notes to be issued under the program constitute
direct, unconditional, unsecured and unsubordinated obligations of
the city, ranking at all times pari passu without any preference
among themselves.
The assigned ratings are in line with the city's Caa1 (Global
Scale) and Baa1.ar (Argentina's National Scale) local currency
debt ratings. The Class 12 notes to be issued under the program,
will be denominated in US dollars but subscribed and payable in
Argentine pesos at the specified exchange rate and sold in the
local capital market. As a result, the US dollar will be a
currency of reference and not a means of payment. For that reason,
the transaction is considered to be denominated in local currency.
On the other hand Classes 13 and 14 will be both denominated and
payable in ARG Pesos.
According to the term sheet reviewed by Moody's, Classes 12, 13
and 14, will reach up to USD100 million, approximately 1% of the
City's total revenues budgeted for 2015. Class 12 will mature in
21 months whereas Classes 13 and 14 will have maturities of 18 and
36 months respectively. After the issuance of these 3 classes,
Moody's anticipates that the City of Buenos Aires' total debt will
reach approximately 28% of total expected revenues for 2015 fiscal
year from 26% projected for the end of fiscal year 2014.
The assigned ratings are based on preliminary documentation
received by Moody's as of the rating assignment date. Moody's does
not expect changes to the documentation reviewed over this period
or anticipates changes in the main conditions that the notes will
carry. Should issuance conditions and/or final documentation of
any of the series under this program deviate from the original
ones submitted and reviewed by the rating agency, Moody's will
assess the impact that these differences may have on the ratings
and act accordingly.
What Could Change The Rating Up/Down
Given the negative outlook on the issuer ratings, Moody's does not
expect upward pressures in the City of Buenos Aires's ratings in
the near to medium term. However, a change in Argentina's
sovereign outlook back to stable could lead to a change in the
outlook back to stable of the City of Buenos Aires. Conversely, a
sharp deterioration of the City's financial results, coupled with
higher debt levels could add downward pressure to the assigned
ratings. The City of Buenos Aires could also be downgraded if the
negative outlook on the sovereign rating materializes into a
rating downgrade.
The principal methodology used in these ratings was Regional and
Local Governments published in January 2013.
Moody's National Scale Credit Ratings (NSRs) are intended as
relative measures of creditworthiness among debt issues and
issuers within a country, enabling market participants to better
differentiate relative risks. NSRs differ from Moody's global
scale credit ratings in that they are not globally comparable with
the full universe of Moody's rated entities, but only with NSRs
for other rated debt issues and issuers within the same country.
NSRs are designated by a ".nn" country modifier signifying the
relevant country, as in ".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".
=============
B E R M U D A
=============
OLYMPIC CLUB: To Close Following Merger With Competitor
-------------------------------------------------------
The Royal Gazette reports that one of Bermuda's longest running
gyms is to close following a merger with a competitor.
The Olympic Club in Hamilton is to shut its doors, with its lease
due to expire in the next few months, according to the Royal
Gazette.
The report notes that the club on Hamilton's Dundonald Street,
operated by Scott Stallard, joined forces with Kym Herron Scott's
The Athletic Club, on nearby Washington Street, just two months
ago.
The report relays that Ms. Herron Scott said the lease on the
building, which was sold by Mr. Stallard two years ago to next-
door-neighbours, dental practice Smile Inc, would expire in April.
Mr. Stallard, who ran the Olympic Club for nearly 25 years and
sold the building two years ago, said he had stepped away after
the merger and planned to concentrate on his photographic career,
the report adds.
===========
B R A Z I L
===========
AGROPECUARIA NOSSA: Moody's Cuts CFR & Sr. Unsec. Debt Rating to C
------------------------------------------------------------------
Moody's Investors Service has downgraded Agropecuaria Nossa
Senhora do Carmo S.A. ("GVO")'s corporate family rating and senior
unsecured debt ratings to C from Caa3, and its senior secured debt
ratings to Ca from Caa2. The outlook is stable.
Ratings downgraded as follows:
Issuer: Agropecuaria Nossa Senhora do Carmo S.A.
- Corporate Family Ratings: to C from Caa3
Issuer: Virgolino de Oliveira Finance S.A.
- $135mm senior secured notes due 2020: to Ca from Caa2
Issuer: Virgolino de Oliveira Finance Limited
- $300mm senior unsecured notes due 2018: to C from Caa3
- $300mm senior unsecured notes due 2022: to C from Caa3
The outlook for all ratings is stable.
Ratings Rationale
The downgrade reflects the continued deterioration in GVO's
liquidity and the strong likelihood it will not make interest
payments scheduled for January and February. The ratings reflect
significant losses expected for the bondholders in a potential
debt restructuring. The secured bonds should benefit from the
security interest in the company's fixed assets and result in
moderately higher recovery value.
GVO's liquidity challenges were precipitated by the low price
environment observed in the sugar and ethanol sector over the last
few quarters which reduced credit availability for Brazilian
producers. In the case of GVO, it restricted access to the letters
of credit it needs to maintain its working capital lines with
Copersucar, the sugar/ethanol cooperative that GVO is a member of,
requiring GVO to repay part of the loans outstanding and, thus,
reducing the company's cash position. On the operational side, the
difficulties are the consequence of a sharp drop in sugar prices
and depressed ethanol prices, coupled with the low availability of
sugar cane, given the drought that hit Brazilian Center-south
producing region. The recovery in sugar prices, initially expected
on the back of a reduced 2014/15 harvest coming from Brazil, has
not materialized and it will translate into lower than expected
Revenues and EBITDA for GVO.
GVO's rating is still supported by the good medium-term prospects
for the sugar-ethanol industry as a consequence of constantly
increasing consumption and a less steady global supply growth,
despite recent build-up in global inventories. On the other hand,
the company's ratings have historically reflected its weak
liquidity profile, high leverage and relatively small size when
compared to large Brazilian companies operating in this industry.
Although Virgolino benefits from the advantages of operating in
one of the world's highest yielding sugar cane regions, the rating
reflects its raw material concentration in the state of Sao Paulo,
which increases the risks related to plant diseases and weather-
related events. Moreover, the region's good climate and better
soil are reflected in its higher lease costs, which translate into
a high operational leverage that negatively affects the company's
performance in low production years.
Although unlikely in the short term, the ratings could be upgraded
if the company is able to strengthen its capital structure and
significantly improve its liquidity profile.
Headquartered in Sao Paulo, Brazil, Agropecuaria Nossa Senhora do
Carmo S/A ("Virgolino" or "GVO") is a privately-held sugar and
ethanol producer, controlled by the Oliveira family. The company
has a sugarcane crushing capacity of 12.0 million tons per harvest
and posted revenues of BRL 1.5 billion (approximately USD 629
million converted by the average exchange rate) for the fiscal
year ending in April, 2014.
BRAZIL: Real Drops Most Among Major Currencies on GDP Outlook
-------------------------------------------------------------
Paula Sambo at Bloomberg News reports that Brazil's real fell the
most among major currencies after analysts surveyed by the central
bank lowered their growth forecast for Latin America's largest
economy.
The currency slid for the first time in five days, dropping 1.5
percent to 2.6737 per dollar at the close of trade in Sao Paulo,
according to Bloomberg News' Jan. 13 report. The decrease was the
biggest among 16 major currencies tracked by Bloomberg. Swap
rates, a gauge of expectations for changes in borrowing costs,
climbed 0.1 percentage point to 12.58 percent on the contract
maturing in January 2017, the report added.
The report relates that analysts reduced their forecast for gross
domestic product growth in 2015 to 0.4 percent from 0.5 percent,
according to the median of about 100 estimates in a weekly central
bank survey published Jan. 13. Evidence of a stalled economy
increases the challenges for Finance Minister Joaquim Levy, who
has pledged to impose more rigorous fiscal discipline.
"Investors are very sensitive because we have all this negative
economic data day after day," Reginaldo Siaca, a currency manager
at Tov Corretora de Cambio in Sao Paulo, told Bloomberg News in a
telephone interview. "This will not be an easy year," Mr. Siaca
added.
Bloomberg News relays that swap rates rose as the analysts
surveyed by the central bank increased their median forecast for
inflation in 2015 to 6.6 percent from the prior estimate of 6.56
percent. Consumer prices rose 6.41 percent in 2014, within the
official preferred range of 2.5 percent to 6.5 percent, Bloomberg
News notes.
The real extended its losses as a decline in crude oil to a 5 1/2-
year low diminished the prospects for state-run Petroleo
Brasileiro SA's investments in offshore projects, Bloomberg News
says. The company's shares dropped 5.2 percent to BRL8.91 Jan.
13.
Oil 'Slump'
"The strong slump in oil prices is favoring the dollar versus the
real," Joao Paulo de Gracia Correa, a trader at Correparti
Corretora de Cambio in Curitiba, Brazil, said in an e-mailed
response to questions, Bloomberg News notes.
Bloomberg News says that to support the real and limit import-
price increases, the central bank sold the equivalent of $98.5
million of currency swaps Jan. 13, and rolled over contracts worth
$491.4 million. It plans to offer as much as $100 million a day
in swaps until at least March 31, compared with $200 million a day
last year, Bloomberg News discloses.
One-month implied volatility on options for the real, reflecting
projected shifts in the exchange rate, remained the highest among
16 major currencies after Norway's krone, Bloomberg News adds.
==========================
C A Y M A N I S L A N D S
==========================
ASTRA STAR: Commences Liquidation Proceedings
---------------------------------------------
On Nov. 13, 2014, the members of Astra Star Investments Ltd.
resolved to voluntarily liquidate the company's business.
Only creditors who were able to file their proofs of debt by
Dec. 22, 2014, will be included in the company's dividend
distribution.
The company's liquidator is:
Appleby Trust (Cayman) Ltd
c/o Richard Gordon
Telephone: +1 (345) 949 4900
75 Fort Street
P.O. Box 1350 Grand Cayman KY1-1108
Cayman Islands
CSOP GREATER: Commences Liquidation Proceedings
-----------------------------------------------
On Nov. 12, 2014, the sole shareholder of CSOP Greater China
Absolute Return Fund 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:
Lucia Kit Chu Chan
2801-2803, Two Exchange Square
9 Connaught Place
Central Hong Kong
D&P NEW WORLD: Commences Liquidation Proceedings
------------------------------------------------
On Nov. 7, 2014, the sole shareholder of D&P New World Special
Situations Fund 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:
Mr. Soterakis Koupepides
Harneys Services (Cayman) Limited
Telephone: (345) 949 8599
Facsimile: (345) 949 4451
Harbour Place, 4th Floor
103 South Church Street
P.O. Box 10240 Grand Cayman KY1-1002
Cayman Islands
DUET ALTERNATIVE: Commences Liquidation Proceedings
---------------------------------------------------
At an extraordinary meeting held on Nov. 11, 2014, the members of
Duet Alternative Investments Strategies Fund SPC resolved to
voluntarily liquidate the company's business.
Only creditors who were able to file their proofs of debt by
Dec. 31, 2014, will be included in the company's dividend
distribution.
The company's liquidator is:
DMS Corporate Services Ltd
c/o Nicola Cowan
Telephone: (345) 946 7665
Facsimile: (345) 949 2877
dms House, 2nd Floor,
P.O. Box 1344, Grand Cayman KY1-1108
Cayman Islands
GRAND RICHMOND: Commences Liquidation Proceedings
-------------------------------------------------
On Nov. 13, 2014, the members of Grand Richmond Investments Ltd.
resolved to voluntarily liquidate the company's business.
Only creditors who were able to file their proofs of debt by
Dec. 22, 2014, will be included in the company's dividend
distribution.
The company's liquidator is:
Appleby Trust (Cayman) Ltd
c/o Richard Gordon
Telephone: +1 (345) 949 4900
75 Fort Street
P.O. Box 1350 Grand Cayman KY1-1108
Cayman Islands
MULTI-MANAGER ALPHA: Placed Under Voluntary Wind-Up
---------------------------------------------------
On Nov. 13, 2014, the sole shareholder of Multi-Manager Alpha
Systematic Trend Ltd resolved to voluntarily wind up the company's
operations.
Only creditors who were able to file their proofs of debt by
Dec. 29, 2014, will be included in the company's dividend
distribution.
The company's liquidator is:
Jane Fleming
c/o Jane Fleming or Jean Ebanks
Telephone: (345) 945-2187
Facsimile: (345) 945-2197
P.O. Box 30464 Grand Cayman KY1-1202
Cayman Islands
REPAK LIMITED: Commences Liquidation Proceedings
------------------------------------------------
On Nov. 13, 2014, the sole shareholder of Repak 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:
Summit Management Limited
David Egglishaw
Telephone: (345) 945 7676
4-210, Governors Square
P.O. Box 32311 Grand Cayman KY1-1209
Cayman Islands
RUSSOLA INTERNATIONAL: Placed Under Voluntary Wind-Up
-----------------------------------------------------
On Nov. 17, 2014, the sole shareholder of Russola International
Ltd. resolved to voluntarily wind up the company's operations.
Only creditors who were able to file their proofs of debt by
Dec. 17, 2014, will be included in the company's dividend
distribution.
The company's liquidator is:
Morval Bank & Trust Cayman Ltd.
c/o Cherrie Graham
Telephone: +1 (345) 949 9808
Facsimile: +1 (345) 949 9793/4
P.O. Box 30622 Grand Cayman KY1-1203
Cayman Islands
SEAHUNTER DRILLER 1: Commences Liquidation Proceedings
------------------------------------------------------
On Nov. 10, 2014, the member of Seahunter Driller 1 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:
Yao Chye Chiang
4 Battery Road #34-01
Singapore 049908
SEAHUNTER DRILLER 3: Commences Liquidation Proceedings
------------------------------------------------------
On Nov. 10, 2014, the member of Seahunter Driller 3 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:
Yao Chye Chiang
4 Battery Road #34-01
Singapore 049908
SEAHUNTER DRILLER 4: Commences Liquidation Proceedings
------------------------------------------------------
On Nov. 10, 2014, the member of Seahunter Driller 4 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:
Yao Chye Chiang
4 Battery Road #34-01
Singapore 049908
SPRUCE REAL: Commences Liquidation Proceedings
----------------------------------------------
On Nov. 14, 2014, the sole shareholder of Spruce Real Assets Fund
(Offshore) 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:
Sean Flynn
Walkers
190 Elgin Avenue, George Town
Grand Cayman KY1-9001
Cayman Islands
Telephone: (345) 914 6365
SUPERFUND GREEN: Placed Under Voluntary Wind-Up
-----------------------------------------------
On Oct. 31, 2014, the shareholders of Superfund Green Euro SPC
resolved to voluntarily wind up the company's operations.
Only creditors who were able to file their proofs of debt by
Dec. 15, 2014, will be included in the company's dividend
distribution.
The company's liquidator is:
Samuel Zbinden
Superfund Asset Management AG
Bahnhofstrasse 24
CH-8001 Zurch
Switzerland
Facsimile: +41 44 267 99 90
VERDIS OFFSHORE: Commences Liquidation Proceedings
--------------------------------------------------
At an extraordinary meeting held on Nov. 11, 2014, the members of
Verdis Offshore Hedged Strategies Fund, Ltd. resolved to
voluntarily liquidate the company's business.
Only creditors who were able to file their proofs of debt by
Dec. 31, 2014, will be included in the company's dividend
distribution.
The company's liquidator is:
DMS Corporate Services Ltd
c/o Nicola Cowan
Telephone: (345) 946 7665
Facsimile: (345) 949 2877
dms House, 2nd Floor,
P.O. Box 1344, Grand Cayman KY1-1108
Cayman Islands
WANG STRATEGIC: Commences Liquidation Proceedings
-------------------------------------------------
On Nov. 6, 2014, the shareholders of Wang Strategic Capital
Partners (I) 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:
Sing Wang
House No. 29, Lafite Avenue
The Vineyard, No. 23 Ngau Tam Mei Road
Yuen Long, New Territories
Hong Kong
===============
C O L O M B I A
===============
MILLICOM INT'L: Fitch Affirms 'BB+' IDRs; Outlook Stable
--------------------------------------------------------
Fitch Ratings has affirmed the long-term foreign currency and
local currency Issuer Default Ratings (IDRs) of Millicom
International Cellular, S.A. (MIC) at 'BB+' with a Stable Outlook.
Fitch has also affirmed MIC's senior unsecured debt at 'BB+.'
KEY RATING DRIVERS
MIC's ratings reflect the company's geographical diversification,
effective marketing strategy and strong brand, and extensive
network and distribution channels, all of which have contributed
to its leading market positions in key markets, steady subscriber
growth, and solid pre-dividend free cash flow (FCF) generation.
In addition, MIC's increasing investments in the under-penetrated
fixed-line services bode well for its medium to long term revenue
growth.
Despite these diversification benefits, MIC's ratings are
constrained by the company operating only in Latin America and
Africa, which have low sovereign ratings and GDP per capita. The
ratings are also tempered by the company's increasing leverage due
to recent M&A activities, historically-high shareholder returns,
and debt allocation between subsidiaries and the holding company.
Increased Leverage
MIC's leverage is weak for its rating level. The company's
leverage has materially increased in recent years mainly due to
acquisitions and historically high shareholder distributions. In
August 2014, the company completed its merger between its
Colombian subsidiary and UNE EPM Telecomunicaciones S.A. (UNE),
the Colombian fixed-line operator, which increased the company's
net debt by USD1.2 billion. As a result, its net leverage,
measured by adjusted net debt to EBITDAR, increased to 2.3x and
2.6x at end-2013 and Sept. 30, 2014, respectively; this
unfavorably compares to 0.8x and 1.4x at end-2011 and end-2012,
respectively. Reflecting UNE's full-year EBITDA contribution,
Fitch estimates MIC's net leverage to be 2.3x as of September 30,
2014.
Positive FCF from 2015
Fitch forecasts MIC's leverage to fall to a level that is in line
with the current rating level over the medium term as the company
continues to refrain from aggressive shareholder payouts and share
buybacks amid EBITDA improvement. The company paid only USD264
million dividends annually in 2013 and 2014, which was a sharp
reduction from USD731 million including share repurchase in 2012
and USD991 million in 2011. As MIC remains committed to reducing
its leverage, Fitch expects total shareholder dividends in 2015
and 2016 to remain in line with the 2014 level. In addition,
capex should remain relatively flat at around USD1.4 billion over
the medium term representing about 18 - 19% of revenues, which is
a decline from 22.5% in 2013. These will lead to modest positive
FCF generation and help the company reduce its net leverage
towards 2.0x by 2016.
A slower-than-expected deleveraging due to a lack of the company's
commitment to restraining dividends, acquisitions, or a further
deterioration in its operating performance will immediately place
negative pressure on the ratings.
Enhanced Competitive Position in Colombia
The merger with UNE, the second largest fixed broadband and pay-TV
operator in Colombia, will strengthen MIC's market position as
UNE's fixed-line network and products complement MIC's existing
mobile operation in terms of both geography and products offerings
with operational cost savings. This synergy is important for MIC
as Colombia has been the fastest growing market in terms of
revenue contribution among MIC's markets. Although any dividend
upstream is not likely for the foreseeable future given the high
investments needed in Colombia, the addition of UNE will help MIC
turn around its EBITDA growth going forward.
Margin Erosion
MIC's EBITDA margin is likely to continue to deteriorate in 2015
due to intense competition. Mobile ARPU is trending downwards in
all of its operational geographies amid increasing market
saturation in Latin America. The increasing revenue proportion of
lower margin fixed-line business will also place pressure on
profitability. Some of the increase in fixed line revenue is
attributable to the merger with UNE. MIC's EBITDA margin fell to
32% in the LTM ended Sept. 30, 2014. This compares to 40% in
2012. Positively, EBITDA growth has turned around during 2014
following contractions in 2013 and 2012. MIC's EBITDA grew to
USD1.9 billion during the LTM ended Sept. 30, 2014; this compares
to USD1.7 billion in 2013 and USD1.9 billion in 2012,
respectively.
Concentration in Low-Rated Sovereigns
Despite the diversification benefit, MIC's ratings are constrained
by its operational footprint in only Latin America and Africa with
low sovereign ratings and GDP per capita. The operational
environment in these regions, in terms of political and regulatory
stability and economic conditions, tend to be more volatile than
developed market which could potentially adversely affect MIC's
operations. This also adds currency mismatch risk as 65% of MIC's
total debt at end-September 2014 was based on USD while most of
its cash flows are generated in local currencies in each country.
Leading Market Positions
MIC has retained its market leadership in most of its key cash
generating operating companies in Latin America and Fitch expects
these positions to remain intact over the medium term backed by
its effective marketing strategy, strong brand recognition, and
extensive network and distribution channels. The company has
maintained a steady subscriber base expansion, adding 3.7 million
new mobile subscribers in the first nine months of 2014, and its
increasing investment into fixed-line and media will help provide
increasing cross-selling opportunities to acquire more revenue
generating units going forward.
Diversifying Revenue Mix
MIC's growth strategy will be increasingly centered on mobile
data, fixed internet and pay-TV services as it tries to alleviate
pressure on the traditional voice/SMS revenues. The mobile data
customer base reached 25% of total subscribers as of Sept. 30,
2014, from 18% a year ago, which supported a 37% mobile data
revenues growth during the third quarter of 2014 (3Q'14) from a
year ago. Broadband and pay-TV businesses also maintained solid
growth, largely due to UNE, as the segmental revenues grew by 156%
in 3Q'14 from the same period a year ago. As this trend
continues, Fitch forecasts mobile service revenues to account for
less than 70% of total revenues from 2015, which compares to 83%
in 2013.
Sound Liquidity
MIC's liquidity profile is good given its readily available cash
position fully covering the short-term debt maturities, as well as
its well-spread debt maturities. As of Sept. 30, 2014, the
consolidated group's readily available cash was USD672 million,
which compares to its short-term debt of USD446 million. The
group's total on-balance sheet debt was USD5.0 billion, with 32%
allocated to the holding company. Debt maturities are well spread
with an average life of 5.6 years. Fitch does not foresee any
liquidity problem for both the operating companies and the holding
company given operating companies' stable cash generation and
their consistent cash upstream to the holding company. In
addition, MIC has USD500 million undrawn credit facility which
further bolsters its liquidity.
Dividend Streams Mitigate Structural Subordination
The creditors of the holding company are subject to structural
subordination to the creditors of the operating subsidiaries given
all cash flows are generated by subsidiaries, which held 68% of
the total group debt at end-3Q'14. Positively, Fitch believes
that a stable and high level of cash upstream, mostly through
dividend, by subsidiaries is likely to remain intact over the long
term and help largely mitigate any risk stemming from this
structural weakness. Subsidiaries' robust upstreams have
supported the holding company's debt service coverage in line with
that of the consolidated group financial profile.
RATING SENSITIVITIES
Negative: MIC experiences an increase in net debt to EBITDAR above
2.5x without a clear path to deleveraging due to any one or
combination of the following: M&A activity, aggressive shareholder
distributions, and competitive/regulatory pressures on its
operations.
Positive: MIC's financial net leverage improves towards 1.0x on a
sustained basis due to improvement in operational competitiveness
and resultant stronger cash generation, less aggressive
shareholder returns, and a higher level of diversification in cash
flow generations across geographies.
===============
G R E N A N D A
===============
GRENADA: Taiwan Agrees to Cut Outstanding Loan Repayment
--------------------------------------------------------
Caribbean360.com reports that Prime Minister Dr. Keith Mitchell
says Taiwan has agreed to reduce by 50 per cent the EC$60 million
(One EC dollar = US$0.37 cents) the island owes for loans
contracted over a 10 year period.
Minister Mitchell, who is also Finance Minister said that Grenada
will only have to repay approximately EC$30 million of the loans
which became an issue when St. George's severed diplomatic
relations with Taipei in 2005, according to Caribbean360.com.
The report notes that the "Taiwanese government has agreed to a 50
per cent haircut, they have also agreed to look into a period of
payment that will make it easy for us," Mitchell said without
providing much details with regards to the terms and condition
which was agreed to.
Last year, during the budget presentation, Minister Mitchell told
legislators that on the matter of the outstanding debt to Taiwan,
"I wish to report that the government has proceeded in a proactive
and responsible fashion. Within four months of assuming office,
Grenada and Taiwan reached agreement on a standstill of the legal
proceedings in New York," the report relays.
In December, a government statement noted that Grenada had reached
in principle, an agreement with the Export-Import Bank of the
Republic of China (EXIM) on the restructuring terms to be applied
to Grenada's indebtedness to EXIM, which has been in default since
2004, the report says.
In 2007, the Bank brought a court action against the Grenada
government in the United States District Court, Southern District
of New York for four loans that the NNP regime took and defaulted
on payments, the report relays.
The bank was seeking to recover US$21.6 million from the
government plus interest payments for the loans that were taken to
facilitate construction of the first sporting stadium at Queen's
Park, the Ministerial Complex at the Botanical Gardens, the
agricultural sector, and for road construction projects on
Mainland Grenada and the sister isle of Carriacou, the report
discloses.
The report notes that the bank had loaned the money for
infrastructure projects at a time when Grenada gave the island
diplomatic recognition. It was part of Taiwan's battle against
Chinese attempts to strip it of international recognition.
China regards Taiwan as a renegade province and has called on all
countries to embrace the One China policy, the report notes.
Grenada established diplomatic relations with China in 2005 after
severing ties with Taiwan, the report adds.
===========
M E X I C O
===========
MEXICO: Sells $2 Billion of Bonds to Fund Tender After Record '14
-----------------------------------------------------------------
Julia Leite at Bloomberg News reports that Mexico is taking
advantage of a decline in borrowing costs to sell dollar bonds
that will pay for a buyback of notes with higher interest rates.
The country sold $2 billion of dollar denominated bonds due in
2025 and 2046, according to data compiled by Bloomberg. The
buyback offer, which covers securities maturing from 2016 to 2040
with interest rates as high as 11.5 percent, expired at 4 p.m. New
York time Dec. 13, according to a statement, Bloomberg News notes.
Bloomberg News relays that Mexico's average borrowing costs have
dropped more than two percentage points over the past six years to
4.47 percent, and the country sold a record $11 billion of bonds
in dollars, yen, euros and pounds last year after legislation
ended the state oil monopoly and helped the government earn its
highest-ever rating from Moody's Investors Service.
In November, the government sold $2 billion of 10-year dollar
bonds to yield 1.35 percentage points more than similar-maturity
Treasuries, or about 3.68 percent, Bloomberg News discloses.
Bloomberg News notes that the $500 million of bonds maturing in
2025 will yield 1.65 percentage points over similar-maturity
Treasuries while the $1.5 billion of notes due in 2046 will yield
2.1 percentage points more. Mexico is offering cash for its dollar
notes maturing in 2016, 2017, 2019, 2020, 2022, 2026, 2031, 2033,
2034 and 2040.
The offering in November was the country's fifth bond sale of the
year. Moody's raised Mexico's credit rating in February 2014 to
A3, the seventh-highest investment grade.
===============================
T R I N I D A D & T O B A G O
===============================
COLONIAL LIFE: Senior Counsel Takes Firm's Case to Privy Council
----------------------------------------------------------------
Trinidad and Tobago Newsday reports that senior counsel Ramesh
Lawrence Maharaj faulted the Opposition People's National Movement
(PNM) and ruling People's Partnership (PP) for the loss of the
monies of CLICO policyholders.
The report notes that Mr. Maharaj said, "the PNM failed to monitor
the statutory fund of CLICO and so was responsible for what
happened. It was based on a guarantee that the government gave
that you, policyholders kept your money in CLICO. You and other
policyholders relied on that policy."
"Then, in 2010, a new government took office (PP), and decided,
within months of taking office, that it was going to renege on
that promise," Mr. Maharaj added. While Maharaj acknowledged the
fact that the government came up with a plan to repay CLICO
policyholders "in 20 years with no interest," he considered that
insufficient, according to Trinidad and Tobago Newsday.
The report relays that regarding the enhanced plan the government
made in 2011 where policyholders would get 92 cents to the dollar,
Mr. Maharaj said that while they had written to the government
asking for a guarantee of this, the government refused to give
that guarantee.
Mr. Maharaj said that the government's argument for breaking that
legitimate expectation was that it had no money, but he refutes
this, contending that at the time, the government had sufficient
assets that could be used to pay policyholders, the report relays.
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.
=================
X X X X X X X X X
=================
LATAM: IDB Loans Totaled More than $13 Billion in 2014
------------------------------------------------------
Latin America and the Caribbean's economic growth might recover
modestly to 2.2 percent in 2015, up from 1.3 percent in 2014, its
lowest rate since last decade's global financial crisis. Despite
the slowdown, the region has managed to maintain its gains against
poverty, said Inter-American Development Bank President Luis
Alberto Moreno.
In his year-end report to the Board of Executive Directors, which
represents the IDB's 48 member countries, Moreno noted that in a
scenario marked by sluggish global growth, falling commodity
prices and limited fiscal maneuvering room, Latin American and
Caribbean countries must prioritize reforms that will ensure
sustained and inclusive growth over the medium and long term.
"Now, more than ever, the answer lies in internal sources of
growth, which brings us up against a huge challenge: increasing
productivity," he said. "This factor explains why the region
continues to trail behind other regions of the world."
Moreno listed a series of reforms and investments the region needs
to undertake, ranging from strengthening trade integration to
upgrading its infrastructure and public services. Other
bottlenecks to productivity are the high proportion of informal
jobs in its labor markets, the limited access to financial
services, the poor quality of education, and the low levels of
innovation in its productive activities.
Safeguarding social gains achieved over the past few years will
also be critical, Moreno added. Poverty has dropped to
historically low levels (27.6 percent in 2014). "We cannot turn
back," he emphasized.
To that end, countries will have to closely monitor their labor
markets and social welfare programs, in order to protect the most
disadvantaged among their population. They will also need to
reduce the risks posed by natural disasters, which
disproportionately harm the poor.
The IDB has much to contribute to the pursuit of this reform
agenda, Moreno said, as it remains one of the region's leading
sources of long-term financing and technical assistance. In 2014,
it approved more than US$13 billion allocated to projects
involving institutional development (43 percent), infrastructure
and the environment (38 percent), social sectors (16 percent), and
trade and regional integration (4 percent).
Moreno also highlighted the IDB's increasing support for private
sector-led projects, which received about $2.8 billion in loans
and guarantees in 2014, up from $2.1 billion the previous year.
He added that the IDB has made progress in the preparation of a
proposal to merge all of its private sector activities in order to
gain operational efficiencies.
The proposal is due to be presented to the IDB's Board of
Governors at their next Annual Meeting, scheduled to take place in
March in Busan, Korea.
LATIN AMERICA: Loan Growth to Decrease in 2015, Fitch Says
----------------------------------------------------------
Latin American loan growth will slow in 2015 due to slow economic
growth, according to a Fitch Ratings report.
"The loan growth deceleration is due to a challenging economic
environment in Latin America. Weak economic conditions in the
developed world, together with China's growth slowdown, have
affected exports and foreign investment. In addition, some
countries have experienced varying degrees of government
intervention that have also affected growth," said Marcela
Galicia, Director Financial Institutions.
Fitch estimates that loan growth elasticity has declined. The
average loan growth-to-local currency GDP growth ratio in Latin
America is expected to decrease to approximately 1.4x in 2015,
from 1.8x in 2013 and 1.7x in 2014. The reduction will be driven
by lower loan growth in the corporate sector.
Fitch expects an overall increase in nonperforming loan (NPL)
ratios. However, credit quality will remain adequate in 2015.
Reserve coverage is expected to remain well above 100% of NPLs
across the region.
Loan quality at Brazilian banks will continue to deteriorate in
2015, mainly driven by public sector banks. But NPL ratios will
remain manageable in a scenario of sluggish economic growth and
limited changes in the unemployment rate.
In Peru, loan growth will decelerate in 2015 due to the economic
slowdown of 2014 and the efforts of the central bank to curb
unhealthy credit expansion. While the seasoning of loan portfolios
will lead to a slight increase in past-due loans and reduce
reserve coverage, credit quality metrics will remain good.
Fitch expects a gradual stabilization of Mexican loan quality
metrics in 2015. However, this scenario is heavily reliant on the
expectation of a material rebound in economic dynamism.
In Chile, Fitch expects moderate pressure on loan quality,
although the impact should not be significant as banks in general
have been proactively taking measures to contain the
deterioration.
For Colombia, the seasoning of previous fast loan growth and the
burden of the recently acquired Central America operations will
pressure NPLs on a consolidated basis, but these ratios will
remain stronger than the Emerging Market (EM) median.
***********
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 * * *