/raid1/www/Hosts/bankrupt/TCRLA

/raid1/www/Hosts/bankrupt/TCRLA_Public/150115.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, January 15, 2015, Vol. 16, No. 010 Headlines A N T I G U A & B A R B U D A LIAT: To Reduce Fuel Surcharge Cost on Tickets A R G E N T I N A ARGENTINA: Bank Freezes Currency Transfers at HSBC for 30 days B O G O T A PACIFIC RUBIALES: Bonds Drop to Record on Covenant Breach Concern B R A Z I L BRAZIL: Finance Minister Says Tax Hikes Part of Austerity Plan MENDES JUNIOR: Fitch Cuts Foreign Currency IDR to 'CC' MENDES JUNIOR: S&P Lowers Rating to 'CCC+' & Puts on Watch Neg. PETROLEO BRASILEIRO: Names Anti-Corruption Watchdog SIFCO SA: Gets Approval of Deal With BNY Mellon, Noteholders C A Y M A N I S L A N D S ARDEN PROPPARTNERS: Placed Under Voluntary Wind-Up BLUESUNBURY MULTISTRATEGY: Commences Liquidation Proceedings FULLLAND SPIRIT: Placed Under Voluntary Wind-Up GRAND ESCADA: Commences Liquidation Proceedings GRAND PINNACLE: Commences Liquidation Proceedings INTERNATIONAL MILLING: Commences Liquidation Proceedings ITAU LATIN: Placed Under Voluntary Wind-Up K&S RUSSIA: Commences Liquidation Proceedings K&S RUSSIA MIXED: Commences Liquidation Proceedings LATIN AMERICA: Commences Liquidation Proceedings LORIENT SHIPPING: Placed Under Voluntary Wind-Up SIMONA LTD: Placed Under Voluntary Wind-Up TURBO VENTURES: Commences Liquidation Proceedings VASSOS LTD: Placed Under Voluntary Wind-Up VERIPOS INC: Commences Liquidation Proceedings M E X I C O QUALITAS INSURANCE: S&P Assigns 'BB+' Financial Strength Rating V E N E Z U E L A VENEZUELA: Woos Qatar as Oil Rout Exacerbates Cash Crunch VENEZUELA: Moody's Downgrades Government Bonds Rating to Caa3 X X X X X X X X * Oil Price Weakness Threatens 0.7% Energy HY Default, Fitch Says - - - - - =============================== A N T I G U A & B A R B U D A =============================== LIAT: To Reduce Fuel Surcharge Cost on Tickets ---------------------------------------------- The Daily Observer reports that LIAT, operating as Leeward Islands Air Transport, told travelers they can expect some relief, albeit small, in the price of airfares by the middle of the month. On Jan, 9, the Caribbean airline announced that it is reducing the fuel surcharge, which is calculated in the cost of tickets, by 50 per cent, according to the Daily Observer. Chief Executive Officer David Evans said the change goes into effective January 15 for all new bookings, the report notes. Jet fuel, used by airlines, is a derivative of crude oil which has fallen by 55 per cent over the last six months, the report relays. Brent crude oil dipped below US$50 per barrel on Jan. 9, this from a high of above US$115 per barrel last June. A release from LIAT said Evans was aware of the impact rising fuel prices have had on customers over the years and that it was "only fitting" that they should also benefit from the decreased prices, the Daily Observer says. The fuel surcharge varies depending on the length of a traveler's journey but can cost as much as US$40 per round-trip, the report discloses. LIAT first introduced the surcharge in 2003, in the wake of increasing fuel prices, the report notes. In 2009, when the prices fell the company took a decision to remove the tariff, the report discloses. However, in 2011, LIAT re-introduced the fuel surcharge after jet fuel prices rapidly increased, the report says. According to LIAT, that year alone, the company spent US $22 million on fuel which amounted to 18 per cent of its total costs, the report adds. About LIAT LIAT, operating as Leeward Islands Air Transport, is an airline headquartered on the grounds of V. C. Bird International Airport in Antigua. It operates high-frequency inter-island scheduled services serving 21 destinations in the Caribbean. The airline's main base is VC Bird International Airport, Antigua and Barbuda, with bases at Grantley Adams International Airport, Barbados and Piarco International Airport, Trinidad and Tobago. * * * As reported in the Troubled Company Reporter-Latin America on March 10, 2014, Caribbean360.com said that Leeward Islands Air Transport (LIAT) said it will take "decisive action" to deal with unprofitable routes as the Antigua-based airline seeks to make its operations financially viable. On Sept. 23, 2013, the TCRLA, citing Trinidad and Tobago Newsday, reported that there's much upheaval at the highest levels of LIAT -- the Board and the Executive. Following the sudden resignation of Chief Executive Officer Captain Ian Brunton, comes the news from highly reliable sources that long time chairman Jean Holder is all set to follow. David Evans replaced Mr. Brunton as chief executive officer. ================= A R G E N T I N A ================= ARGENTINA: Bank Freezes Currency Transfers at HSBC for 30 days -------------------------------------------------------------- EFE News reports that the Argentine Central Bank, or BCRA, said it suspended for 30 days the transfer of currency abroad by the British bank HSBC due to "serious inconsistencies in recording and processing data." The suspension period "could be less if the organization adopts -- with reliable proof -- the necessary corrective measures in its computer systems to guarantee the validity of the records" of its operations, the BCRA said in a statement, according 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 O G O T A =========== PACIFIC RUBIALES: Bonds Drop to Record on Covenant Breach Concern ----------------------------------------------------------------- Christine Jenkins at Bloomberg News reports that Pacific Rubiales Energy Corp.'s bonds fell to a record low on concern that the drop in oil prices may lead to a breach in covenants that would restrict the crude producer's ability to take on debt and bolster investments. The Bogota-based company's $1.1 billion of notes due 2025, which were sold in September at 99.045 cents on the dollar, fell 3.28 cents to 63.35 cents as of 3:01 p.m. on Jan. 14 in New York, according to Bloomberg News. The yield on the bonds rose to 12 percent, almost 10 percentage points above similar-maturity Treasuries, says the report. Bloomberg News relates that if oil prices stay depressed through 2015 after dropping more than 50 percent in the past six months, Pacific may breach rules on its bonds requiring that its debt can't exceed 3.5 times 12-month trailing Ebitda, or earnings before interest, taxes, depreciation, and amortization, according to CIBC World Markets analysts Dave Popowich and Scott Reid. That would imperil the company's ability to invest in bolstering production as its license to drill in Colombia's largest oil field expires in mid-2016, Bloomberg News relays. "There would be a big compression in Ebitda if the price of oil stays at the level of the past few weeks or lower," Cesar Sanchez, vice president of fixed-income sales at Ultralat Capital Markets, said in e-mailed response to questions, Bloomberg News adds. Pacific General Counsel Peter Volk said the company will meet its bond covenants, Bloomberg News says. "We have flexibility in our capital expenditures and the intention to be flexible to adjust those expenditures to current prices and actual cash flow," Mr. Volk said in an e-mailed response to questions, Bloomberg News notes. Bloomberg News relays that Darren Engels, an analyst at FirstEnergy Capital Corp. who forecasts a cash shortfall of $308 million this year for Pacific Rubiales, said in a report that the company needs to eliminate dividends and sell assets. Pacific's debt reached $4.6 billion at the end of the third quarter, with a ratio of 1.7 times trailing Ebitda, according to data compiled by Bloomberg. After slumping 70 percent in the past 12 months, shares in Pacific Rubiales are the cheapest among 15 global peers tracked by Bloomberg on a price-to-earnings basis. =========== B R A Z I L =========== BRAZIL: Finance Minister Says Tax Hikes Part of Austerity Plan -------------------------------------------------------------- EFE News reports that Brazil's finance minister acknowledged that the belt-tightening plan being drafted by President Dilma Rousseff's new economic team includes "some tax hikes," but he did not provide details. "We do not intend to prepare a series of harsh steps or (economic) packages, but we must adopt some measures" that will include a review of tax policy, Joaquim Levy told a press conference, according to EFE News. MENDES JUNIOR: Fitch Cuts Foreign Currency IDR to 'CC' ------------------------------------------------------ Fitch Ratings has downgraded the ratings of several Brazilian construction companies including Construtora Queiroz Galvao S.A., Galvao Participacoes S.A. (GalPar), Galvao Engenharia S.A. (GESA) and Mendes Junior Trading e Engenharia S.A. (MJTE). The ratings for these companies remain on Rating Watch Negative, except MJTE, which was removed from Negative Watch. At the same time, Fitch maintains on Rating Watch Negative the following companies: Camargo Correa S.A., CCSA Finance Limited, Construtora Andrade Gutierrez S.A., Andrade Gutierrez International S.A., Construtora Norberto Odebrecht S.A. (CNO) and Odebrecht Finance Limited. KEY RATING DRIVERS Key concerns regarding the Negative Rating Watch for the aforementioned companies include: the ongoing nature of the Lava Jato investigation, which could lead to additional negative findings; decreasing financing options for most companies in the sector; yet-to-be determined punitive measures; challenging conditions for receiving payments for completed projects and recognizing claims related to contract amendments; and the potential restructuring, suspension, or delays under existing contracts with Petrobras. The downgrade of MJTE's IDRs to 'CC' from 'B-' and its national scale rating to 'CC(bra)' from 'BB(bra)' was a result of the company's poor liquidity position and weak access to financing. MJTE had BRL189 million of short-term debt as of June 30, 2014, and only BRL50 million of cash and marketable securities. The company has not had access to financing from public financial institutions for a number of years, giving it a narrower borrowing base that most of its peers. Along with 22 other business groups, MJTE has been temporarily banned by Petrobras from taking part in bids with it, or being contracted by it. About 90% of Mendes Junior's backlog is with government entities. Its entire backlog is related to projects in Brazil. GalPar's FC and LC IDRs were downgraded to 'B-' from 'B+', while its national scale ratings and local debentures were downgraded to 'BB+ (bra)' from 'BBB+ (bra).' Fitch simultaneously downgraded GESA's national scale rating to 'BB+ (bra)' from 'BBB+ (bra)'. These downgrades were due to the tight liquidity position of the group, as well as the challenges GESA faces in collecting on more than BRL800 million of claims with Petrobras. GalPar had BRL273 million of short-term debt as of June 30, 2014 and BRL848 million of cash. Of this figure, BRL183 million of the cash and BRL371 million of the short-term debt was at the construction company, GESA. Approximately 35% of GESA's construction backlog is with public entities with about one-third of this figure being related to Petrobras projects. Like MJTE, essentially all of GESA's backlog is in Brazil. The companies have also been temporarily banned by Petrobras from taking part in bids with it, or being contracted by it. The downgrade of Construtora Queiroz Galvao's national scale rating to 'A (bra)' from 'AA- (bra)' is due to increased uncertainty for the sector and company. Similar to GESA and MJTE, the company has also been affected by Petrobras' temporary ban. Construtora Queiroz Galvao has a strong balance sheet and less Brazilian exposure than GESA and MJTE. As of June 30, 2014, it had BRL1.2 billion of cash versus BRL566 million of short-term debt. About 50% of Construtora Queiroz Galvao's backlog is related to projects outside of Brazil. Fitch has maintained Camargo's 'BB' and 'AA-(bra)' ratings on Negative Watch. The engineering and construction division account for less than 15% of the consolidated EBITDA of the group. Camargo's largest business division is its cement subsidiary, InterCement Brasil, which generates more than 40% of EBITDA. The Camargo Correa group was one of 23 groups that have temporarily been banned from future bids or projects with Petrobras. Senior members of Camargo's engineering and construction subsidiary have been incarcerated as a result of the Lava-Jato investigation, including the CEO, Vice President and Chairman of the Board. If Petrobras' ban continues for six months, and if it extends to the cement division, a negative rating action is likely. Camargo had BRL5.8 billion of cash and BRL2.2 billion of short-term debt as of June 30, 2014. A downgrade could also occur despite the company's strong liquidity position, if it loses market access. Fitch has maintained Construtora Andrade Gutierrez S.A.'s 'BBB-' and 'AA(bra)' ratings on Negative Watch. The company is on the list of 23 companies that is temporarily not able to enter into contracts with Petrobras. As of Sept 30, 2014, Construtora Andrade Gutierrez had BRL1.7 billion of cash versus BRL307 million of short-term debt. Petrobras accounts for only 2% of its backlog; more than 50% of Construtora Andrade Gutierrez' backlog is outside of Brazil. Fitch also maintained the 'BBB' and 'AAA (bra)' ratings of Construtora Norberto Odebrecht S.A. and the 'BBB' ratings of its finance vehicle Odebrecht Finance Limited on Negative Watch. The company's ratings are supported by its strong liquidity and diversified business position. Odebrecht is also on the list of companies that are not able to participate in future Petrobras contracts. As of Sept 30, 2014, CNO had BRL6.9 billion of cash and BRL800 million of short-term debt. Approximately two-third of the company's backlog is outside of Brazil. Contracts with Petrobras account for 1% of CNO's backlog. Fitch has downgraded these ratings: Mendes Junior Trading e Engenharia S.A. (MJTE) -- Foreign currency IDR to 'CC' from 'B-'; -- Local currency IDR to 'CC' from 'B-'; -- National scale rating to 'CC (bra) from 'BB(bra)'. Construtora Queiroz Galvao S.A. -- National scale rating to 'A(bra)'from 'AA-(bra)'. Galvao Participacoes S.A. -- Foreign currency IDR to 'B-' from 'B+'; -- Local currency IDR to 'B-' from 'B+'; -- National scale rating to 'BB+ (bra) from 'BBB+(bra)'; -- BRL300 million senior unsecured notes due 2020 to 'BB+ (bra)' from 'BBB+(bra)'. Galvao Engenharia S.A. -- National scale rating to 'BB+ (bra) from 'BBB+(bra)'. Fitch maintains these ratings on Rating Watch Negative: Camargo Correa S.A.: -- Foreign currency Issuer Default Rating (IDR) 'BB'; -- Local currency IDR 'BB'; -- National long term rating 'AA-(bra)'; -- National short term rating 'F1(bra)'. CCSA Finance Limited: -- Foreign currency IDR 'BB'; -- Local currency IDR 'BB'; -- US$250 million senior unsecured bonds due 2016 'BB'. Construtora Andrade Gutierrez S.A. -- Foreign currency IDR 'BBB-'; -- Local currency IDR 'BBB-'; -- National scale rating 'AA(bra)'. Andrade Gutierrez International S.A. -- US$500 million senior unsecured bonds due 2018 'BBB-'. Construtora Norberto Odebrecht S.A.: -- Foreign currency IDR 'BBB'; -- Local currency IDR 'BBB'; -- National scale rating 'AAA(bra)'. Odebrecht Finance Limited: -- Foreign currency IDR 'BBB'; -- BRL500 million senior unsecured notes due 2018 'BBB'; -- USD500 million senior unsecured notes due 2020 'BBB'; -- USD600 million senior unsecured noted due 2022 'BBB'; -- USD800 million senior unsecured notes due 2023 'BBB'; -- USD550 million senior unsecured notes due 2025 'BBB'; -- USD500 million senior unsecured notes due 2029 'BBB'; -- USD850 million senior unsecured notes due 2042 'BBB'; -- USD750 million perpetual bonds 'BBB'. MENDES JUNIOR: S&P Lowers Rating to 'CCC+' & Puts on Watch Neg. --------------------------------------------------------------- Standard & Poor's Ratings Services lowered its global scale rating on Mendes Junior Trading e Engenharia S.A. (MJTE) to 'CCC+' from 'B' and the national scale to 'brCCC+' from 'brBB-'. S&P also placed the ratings on CreditWatch negative. The downgrade reflects MJTE's lower cash flow generation and weaker liquidity amid the ongoing corruption investigation over potential overpriced contracts from Petroleo Brasileiro S.A.- Petrobras. S&P believes MJTE's ability to refund incremental costs from completed works will suffer, as clients' scrutiny over pricing mechanism is rising across the industry, weakening the company's cash flow generation ability. S&P also expects MJTE's backlog to shrink given lower replenishing capability amid investigation and S&P's belief that the company could cancel some contracts to focus on more profitable projects with lower working capital needs. These factors would hamper MJTE's ability to refinance short-term debt, although S&P believes there are still incentives for some lenders to refinance the company's short-term maturities. "We project MJTE to post a negative R$60 million in EBITDA in 2014 and to return to profitability in 2015, of about R$30 million. We expect its debt to EBITDA to be around 6.0x in 2015," said Standard & Poor's credit analyst Felipe Speranzini. The CreditWatch listing reflects S&P's opinion that chances for MJTE to undergo a financial distress in the coming months are at least 50%. S&P expects the company to face a tougher refinancing scenario as financial institutions are becoming more reluctant to fund some companies exposed to the investigations. Nevertheless, S&P believes there are incentives for some lending institutions to refinance MJTE's short-term maturities as its refinancing needs should be manageable compared to losses from a financial distress. S&P will closely monitor MJTE's refinancing efforts in the coming weeks. If it can't refinance its sizable February debt maturities during the next few days, S&P could further lower its ratings. Any notice of nonpayment of bank debt could also trigger a downgrade to 'D'. PETROLEO BRASILEIRO: Names Anti-Corruption Watchdog --------------------------------------------------- EFE News reports that Petroleo Brasileiro S.A. discloses the appointment of a director of Governance, Risk and Compliance in response to the corruption scandal now plaguing Brazil's largest enterprise. The board of directors approved the nomination of veteran corporate executive Joao Adalberto Elek Junior for a renewable three-year term in the new post, Petrobras said in a statement obtained by EFE News. Based in Rio de Janeiro, Brazil, Petroleo Brasileiro S.A. -- Petrobras (Brazilian Petroleum Corporation) -- explores for oil and gas and produces, refines, purchases, and transports oil and gas products. The Company has proved reserves of about 14.1 billion barrels of oil equivalent and operates 16 refineries, an extensive pipeline network, and more than 8,000 gas stations. As reported in the Troubled Company Reporter-Latin America on Dec. 11, 2014, Moody's Cut Petrobras S.A.'s baseline credit assessment to ba1. SIFCO SA: Gets Approval of Deal With BNY Mellon, Noteholders --------------------------------------------------------- U.S. Bankruptcy Judge Robert Gerber approved an agreement entered into by Sifco S.A.'s foreign representative, The Bank of New York Mellon and the ad hoc committee representing senior secured noteholders. The agreement allows BNY Mellon to use the funds deposited in a so-called Debt Service Reserve Account to pay those fees and expenses incurred in connection with Sifco's Chapter 15 case and judicial reorganization in Brazil. BNY Mellon is also allowed to establish a reserve in a segregated account for the payment of fees and expenses it will incur in the future. What is left after the establishment of the reserve will be distributed to certain holders of senior secured notes previously issued by Sifco. The current balance of the Debt Service Reserve Account is more than $8.6 million, according to court filings. A copy of the agreement is available without charge at http://is.gd/HTkuvI About SIFCO SA Brazilian company SIFCO SA began its operations in 1958, and today it believes that it is the sole producer and supplier of front axles and I-beams for trucks and buses in South America. SIFCO's management and engineers are located outside Sao Paulo, Brazil in the City of Jundiai, Brazil, where the Company also maintains manufacturing and foundry facilities. In the 1960s, SIFCO was dedicated to supplying the then-recently created domestic Brazilian automotive industry. Eventually, SIFCO began producing high technology forging components in compliance with the most comprehensive requirements of several automotive industry segments, such as tractors and agricultural machines, among others. SIFCO commenced a bankruptcy restructuring in Brazil on April 22, 2014. A day later, on April 23, it filed a Chapter 15 petition in U.S. Bankruptcy Court (Bankr. S.D.N.Y. Case No. 14-11179) in Manhattan, New York. SIFCO distributes products in the U.S. through Westport Axle Corp., which was a subsidiary until it was sold in late 2013. The petition shows assets of less than $500 million and debt exceeding $500 million. SIFCO has $75 million outstanding on senior secured notes with Bank of New York Mellon Corp. as agent. SIFCO is owned by Sifco Metals Participacoes S.A. which is a privately owned company. SIFCO is represented in the U.S. proceedings by Duane Morris LLP, in New York. ========================== C A Y M A N I S L A N D S ========================== ARDEN PROPPARTNERS: Placed Under Voluntary Wind-Up -------------------------------------------------- On Nov. 11, 2014, the sole shareholder of Arden Proppartners Global Macro, Ltd. resolved to voluntarily wind up the company's operations. 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: Ogier c/o Jody Powery-Gilbert Telephone: (345) 815-1763 Facsimile: (345) 949-9877 89 Nexus Way, Camana Bay Grand Cayman KY1-9007 Cayman Islands BLUESUNBURY MULTISTRATEGY: Commences Liquidation Proceedings ------------------------------------------------------------ On Nov. 18, 2014, the members of Bluesunbury Multistrategy Fund 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 PO Box 1350 Grand Cayman KY1-1108 Cayman Islands FULLLAND SPIRIT: Placed Under Voluntary Wind-Up ----------------------------------------------- At an extraordinary general meeting held on Nov. 11, 2014, the shareholders of Fullland Spirit Holdings Limited resolved to voluntarily wind up the company's operations. Only creditors who were able to file their proofs of debt by Jan. 2, 2015, will be included in the company's dividend distribution. The company's liquidators are: Sarah Baudet Paula Hegarty c/o Citron 2004 Limited Telephone: + 44 1534 282276 Facsimile: + 44 1534 282400 Clifton House, 75 Fort Street P.O. Box 1350 Grand Cayman KY1-1108 Cayman Islands GRAND ESCADA: Commences Liquidation Proceedings ----------------------------------------------- On Nov. 17, 2014, the members of Grand Escada 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 GRAND PINNACLE: Commences Liquidation Proceedings ------------------------------------------------- On Nov. 14, 2014, the members of Grand Pinnacle 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 INTERNATIONAL MILLING: Commences Liquidation Proceedings -------------------------------------------------------- On Nov. 17, 2014, the members of International Milling Limited 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 liquidators are: Juan Antonio Quiroga Salvador Vargas Guajardo Calzada del Valle #407, Col. del Valle, 66220 San Pedro Garza Garcia Nuevo Leon, Mexico ITAU LATIN: Placed Under Voluntary Wind-Up ------------------------------------------ On Nov. 13, 2014, the sole shareholder of Itau Latin America Diversified Managers resolved to voluntarily wind up the company's operations. 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: Ogier c/o Anna Cummings Telephone: (345) 815 1858 Facsimile: (345) 949-9877 89 Nexus Way, Camana Bay Grand Cayman KY1-9007 Cayman Islands K&S RUSSIA: Commences Liquidation Proceedings --------------------------------------------- At an extraordinary meeting held on Nov. 12, 2014, the members of K&S Russia Yield Fund 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 K&S RUSSIA MIXED: Commences Liquidation Proceedings --------------------------------------------------- On Nov. 12, 2014, the members of K&S Russia Mixed Investment Fund 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 LATIN AMERICA: Commences Liquidation Proceedings ------------------------------------------------ On Nov. 14, 2014, the members of Latin America Bioenergy Fund, Ltd. resolved to voluntarily liquidate the company's business. Only creditors who were able to file their proofs of debt by Nov. 22, 2014, will be included in the company's dividend distribution. The company's liquidator is: Crecera Finance Management Company, LLC c/o Matthew Taber Telephone: +1 (345) 949 4900 Appleby Trust (Cayman) Ltd. 75 Fort Street P.O. Box 1350 Grand Cayman KY1-1108 Cayman Islands LORIENT SHIPPING: Placed Under Voluntary Wind-Up ------------------------------------------------ On Nov. 11, 2014, the sole shareholder of Lorient Shipping Co. resolved to voluntarily wind up the company's operations. 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: Bruce A. McAllister c/o Alley, Maass, Rogers & Lindsay, P.A. 340 Royal Poinciana Way, Suite 321 Palm Beach FL 33480 United States of America Telephone: +1 (651) 659 1770 Facsimile: +1 (651) 804 4628 SIMONA LTD: Placed Under Voluntary Wind-Up ------------------------------------------ On Nov. 17, 2014, the sole shareholder of Simona 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 P.O. Box 30622 Grand Cayman KY1-1203 Cayman Islands TURBO VENTURES: Commences Liquidation Proceedings ------------------------------------------------- On Nov. 17, 2014, the members of Turbo Ventures 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 VASSOS LTD: Placed Under Voluntary Wind-Up ------------------------------------------ On Nov. 14, 2014, the shareholders of Vassos Ltd. resolved to voluntarily wind up the company's operations. Creditors are required to file their proofs of debt to be included in the company's dividend distribution. The company's liquidator is: Trident Liquidators (Cayman) Ltd 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 VERIPOS INC: Commences Liquidation Proceedings ---------------------------------------------- On Nov. 14, 2014, the members of Veripos Inc. 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 =========== M E X I C O =========== QUALITAS INSURANCE: S&P Assigns 'BB+' Financial Strength Rating --------------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'BB+' long-term financial strength and counterparty credit ratings on Qualitas Insurance Company (Quic). The outlook is stable. S&P's ratings on Quic follow S&P's group rating methodology and standard notching for the "highly strategic" subsidiaries. As a result, the ratings on Quic are one notch below the group credit profile of Qualcon. S&P views Quic as a "highly strategic" subsidiary status due to the parent's strong level of support and commitment and the company's high level of integration with respect to business strategy and enterprise risk management. In addition, S&P believes there is a close link between Quic and the group's reputation, and the subsidiary will benefit from the ongoing business of its parent and affiliate in Mexico. Qualcon completed the acquisition of Valley Insurance Company and changed its name to Qualitas Insurance Company. Qualcon acquired Valley Insurance to provide liability coverage for commercial vehicles crossing from Mexico to the U.S. Qualcon has already a strong market share of Mexico's commercial vehicle insurance (32.4% as of June 2014) through Qualitas. Quic is currently a startup company because Valley Insurance was an inactive shell company that had no direct written premiums. However, Quic is already operating, and we expect that 90% of its business will come from Qualitas at least during the next three years. Considering Qualitas' significant position in the commercial vehicle insurance business in Mexico, S&P believes that Quic will reach a break-even point by the end of 2015. ================= V E N E Z U E L A ================= VENEZUELA: Woos Qatar as Oil Rout Exacerbates Cash Crunch --------------------------------------------------------- Pietro D. Pitts at Bloomberg News reports that Venezuelan President Nicolas Maduro is seeking several billion dollars from Qatari lenders to help plug a budget gap after oil lost more than half its value. "We're finalizing a financial alliance with important banks from Qatar that will give us sufficient oxygen to help cover the fall in oil prices and give us the resources we need for the national foreign currency budget," President Maduro said on state television, according to Bloomberg News. Bloomberg News notes that President Maduro, Hugo Chavez's hand- picked successor, is turning to Asia and the Middle East for relief as crude's nosedive of more than 50 percent erodes international reserves and funding options. Boasting the world's biggest oil reserves, the Latin American nation has seen its crude output slump since 2008 and imports of refined products surge as state-owned Petroleos de Venezuela SA revenue is diverted to social programs and fuel subsidies, Bloomberg News relates. The financing would be for "various" billions of dollars for 2015 and 2016, President Maduro said from Doha, Bloomberg News says. While in China last week, President Maduro said Venezuela obtained $20 billion in new Chinese investment for economic, energy and social projects, Bloomberg News says. President Maduro didn't give details. The price of Venezuela's oil, which accounts for about 95 percent of exports, fell last week to $42.44 a barrel from a peak of $100.64 on June 27, Bloomberg News discloses. The largest decline in oil prices since 2008 has raised concerns that Venezuela could default as foreign currency reserves decline and the economy contracts, says the report. Economic Equilibrium Prices need to return to about $100 a barrel for economic equilibrium, President Maduro said in Iran during a tour of Middle Eastern members of the Organization of Petroleum Exporting Countries, Bloomberg News relays. The president also met with Saudi Oil Minister Ali Al-Naimi, according to tweets from Venezuela's Finance Minister Rodolfo Marco Torres, Bloomberg News says. "We have to work to defeat the strategy of global finance and of the U.S. to destroy our natural resource. I think we are clear in the strategy, and I have very positive results from this tour. Good news will keep coming," President Maduro said in a televised interview from Doha, Bloomberg News notes. Hydraulic fracturing, or fracking, has unlocked supplies from shale formations in the U.S., flooding the market with oil, President Maduro said, Bloomberg News notes. Prices continued to decline after officials from Saudi Arabia, the United Arab Emirates and Kuwait reiterated they won't curb output to halt the decline, Bloomberg News adds. VENEZUELA: Moody's Downgrades Government Bonds Rating to Caa3 ------------------------------------------------------------- Moody's Investors Service has downgraded Venezuela's government bond ratings to Caa3 from Caa1 and changed the outlook to stable from negative. The key drivers of the rating actions are the following: 1) Default risk has increased substantially as external finances continue to deteriorate due to a strong decline in oil prices. 2) In the event of a default, Moody's believes that the loss given default (LGD) is likely to be greater than 50%. The stable outlook is based on Moody's view that even if the oil price drops further, expected losses to bondholders are likely to be consistent with a Caa3 rating and unlikely to reach levels associated with lower ratings. The sovereign's senior unsecured and senior secured ratings have also been downgraded to Caa3 from Caa1, as well as the senior unsecured medium term note program and the senior unsecured program to (P)Caa3 from (P)Caa1. Venezuela's long-term local-currency country risk ceilings were also adjusted to Caa2 from Caa1, the foreign currency bond ceiling to Caa3 from Caa1, and the foreign-currency bank deposit ceilings to Ca from Caa2. The short-term foreign currency bond and deposit ceilings remain at NP. These ceilings reflect a range of undiversifiable risks to which issuers in any jurisdiction are exposed, including economic, legal and political risks. These ceilings act as a cap on ratings that can be assigned to the foreign and local-currency obligations of entities domiciled in the country. Ratings Rationale The principal driver of Moody's decision to downgrade Venezuela's sovereign rating is a marked increase in default risk owing to lower oil prices. The recent oil price shock has exerted pressure on Venezuela's balance of payments and dwindling foreign reserves. The price of Venezuela's oil basket, which is typically priced at a modest discount to the price of Brent, fell to an average of $54.03 per barrel in December 2014 from an average of $88.42 per barrel in 2014. As a result, Moody's forecasts that Venezuela's current account balance is likely to shift to a deficit of approximately 2% of GDP in 2015 from an estimated surplus of over 2% of GDP in 2014, the first such yearly deficit since 1998. The dramatic oil price drop, which Moody's expect will be sustained, will negatively affect the balance of payments and will more than outweigh the potential benefits of future foreign investment inflows. Moody's believes that the key source of vulnerability for the sovereign's credit profile is the external accounts. Given a heavy dependence on imports, external finances remain very rigid, decreasing the possibility of import adjustment to prevent a balance of payments crisis. Foreign currency outflows in Venezuela are likely to decrease only marginally in the event of policy measures to further curb import demand and capital account outflows. Although Moody's believes the sovereign is highly likely to honor the upcoming EUR1 billion Eurobond maturing in March 2015, given the large mismatch between inflows and outflows, the probability of a debt default occurring in the next 1-2 years has risen from an already high level. The second driver of the rating action is Moody's assessment that in the event of a default, bondholder losses are likely to exceed 50% on the sovereign's external debt instruments. Moody's believes that balance of payments outflows are likely to exceed inflows by a significant margin at least through 2016, leading to a significant external funding gap that would suggest material debt reduction would be required to ensure balance of payments sustainability. Moody's believes that the authorities are unlikely to implement forceful policy measures to curb macroeconomic distortions and imbalances in the near term. Even if implemented, measures that target (1) further administrative controls to curb imports, (2) adjustments to the multiple exchange rate regimes, or (3) raising domestic oil prices to lower consumption and marginally increase exports, are unlikely to materially alter the current conditions that heighten the probability of default. Despite the potential for increased external bilateral financing, Moody's estimates that even under a best-case scenario the external funding gap would not be fully covered. Moreover, Moody's believes that the current stock of foreign currency assets, including official reserves of $22 billion at the end of December 2014, would be insufficient to cover the country's external financing gap. In addition to the rising risk of a balance of payments crisis, Venezuela is in the midst of an economic recession and has a highly discretionary policy framework that reflects weak institutions. These challenges more than offset its credit strengths that include low albeit rising government debt and high income levels relative to emerging market and Latin American countries. What Could Move The Rating Up/Down The rating would face upward pressure if balance of payments prospects improve significantly given a strong recovery in oil prices or if a sufficiently large increase of financing flows ensures stabilization of external accounts. Conversely, the rating would face further downward pressure if external finances weaken in the absence of a recovery in oil prices, increasing the risk of greater losses to bondholders. GDP per capita (PPP basis, US$): 18,453 (2013 Actual) (also known as Per Capita Income) Real GDP growth (% change): 1.3% (2013 Actual) (also known as GDP Growth) Inflation Rate (CPI, % change Dec/Dec): 56.2% (2013 Actual) Gen. Gov. Financial Balance/GDP: -1.8% (2013 Actual) (also known as Fiscal Balance) Current Account Balance/GDP: 2% (2013 Actual) (also known as External Balance) External debt/GDP: 30.3% (2013 Actual) Level of economic development: Low level of economic resilience Default history: At least one default event (on bonds and/or loans) has been recorded since 1983. On 08 January 2015, a rating committee was called to discuss the rating of Venezuela, Government of. The main points raised during the discussion were: The issuer's economic fundamentals, including its economic strength, have materially decreased. The issuer's institutional strength/framework, remains unchanged. The issuer's fiscal or financial strength, including its debt profile, has materially decreased. An analysis of this issuer, relative to its peers, indicates that a repositioning of its rating would be appropriate. The principal methodology used in these ratings was Sovereign Bond Ratings published in September 2013. The weighting of all rating factors is described in the methodology used in this rating action, if applicable. ================ X X X X X X X X ================ * Oil Price Weakness Threatens 0.7% Energy HY Default, Fitch Says ----------------------------------------------------------------- The recent downgrade of Petroleos de Venezuela, S.A. (PDVSA) puts the 'CCC' and lower rated pool for energy at 22% compared to 18% for the overall high yield (HY) market and up from 13% one year earlier, according to Fitch Ratings. The sector's historical default rate was a benign 1.9% over the past 35 years and finished at 0.7% in 2014, but we expect the energy default rate to rise in the next couple of years with crude oil prices at nearly six-year lows that will likely remain depressed in the near-to-medium term. Energy comprises 16% of the $1.36 trillion HY universe and has risen 154% since the end of 2009. Energy new issuance registered $51 billion, or 18% of total 2014 volume, marking the fifth straight year it has surpassed other sectors. More than $78 billion of energy debt is rated 'B-' or lower. The price distribution of energy bonds rated 'B-' or lower changed dramatically since oil prices peaked in late July. Back then, just 1% traded at less than 80 cents and now 66% is below that figure. The 2014 U.S. HY default rate finished at 2.4%, well below the 35- year 4.1% historic average. Removing energy, the rate would be 2.7% in 2014 while the 35-year average rises to 4.4%. Fitch projects that the default rate will end 2015 in the 1.5%- 2.0% range. Healthy non-energy company financial performance and minimal debt maturities over the next year contribute to a forecast in line with an historical 1.9% median rate over the past 35 years. Sustained oil price weakness is likely to be the main catalyst for potential increases to our 2015 default rate forecast, but there is some near-term cushion due to the lack of energy debt maturities and credit enhancing refinancing activity over the past several years. Still, the oil price environment dampens our HY default outlook for 2016-2017. There were 37 issuer defaults tallying $31.7 billion in 2014 versus 36 and $18.5 billion one year earlier. Services/other accounted for six of the defaults while broadcasting and media, gaming, lodging and restaurants, metals and mining, utilities, power and gas, and energy had four each. Distressed debt exchanges (DDEs) have been executed frequently, accounting for the greatest share of defaults on an issuer basis in 2014, above bankruptcy filings and missed interest payments. LBI Media Inc., iPayment, Renhe Commercial Holdings, and Education Management Corp. were DDEs done in December. The par weighted recovery rate ended 2014 at 64.2%, with a median of 60.2%. Fitch's "U.S. High Yield Default Insight report (2014 Summary and Key Statistics)" report will be published later this month. *********** 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. 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