/raid1/www/Hosts/bankrupt/TCRLA

/raid1/www/Hosts/bankrupt/TCRLA_Public/150311.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, March 11, 2015, Vol. 16, No. 049 Headlines B R A Z I L PETROLEO BRASILEIRO: Scandal Leaves Alusa Workers Without Pay PETROLEO BRASILEIRO: Demand, Relationships Support Contracts C A Y M A N I S L A N D S BLUE SELECT: Shareholder Receives Wind-Up Report COLONNADE INVESTMENTS: Commences Liquidation Proceedings DIAM ENHANCED: Placed Under Voluntary Wind-Up DOVER OFFSHORE: Commences Liquidation Proceedings EATON VANCE: Commences Liquidation Proceedings EDDYSTONE OFFSHORE: Creditors' Proofs of Debt Due March 30 EVERBRIGHT ASHMORE: Shareholders Receive Wind-Up Report EWARRANT CAPITAL: Shareholder Receives Wind-Up Report HAV3 (9) LIMITED: Shareholders to Hear Wind-Up Report on March 27 LION INVESTMENTS C: Creditors' Proofs of Debt Due March 18 MONT BLANC: Sole Member to Hear Wind-Up Report on April 6 OLOOK LTD: Placed Under Voluntary Wind-Up P MANAGEMENT COMPANY: Commences Liquidation Proceedings PACIFIC ESPLANADE: Shareholders Receive Wind-Up Report PARAGON (CAYMAN): Shareholders to Hear Wind-Up Report on April 2 PARAGON CAYMAN GP: Shareholders to Hear Wind-Up Report on April 2 PINE LUCK: Shareholders Receive Wind-Up Report RIO VERDE: Creditors' Proofs of Debt Due March 18 STOCKTON HOLDINGS: Sole Member to Hear Wind-Up Report on March 17 SUNTECH POWER: Commences Liquidation Proceedings SWEETSOP TRADING III: Member to Hear Wind-Up Report on April 6 THOUSAND PINES: Shareholders Receive Wind-Up Report UNITY CAPITAL: Shareholder to Hear Wind-Up Report on March 27 VIETNAM RESOURCE: Commences Liquidation Proceedings WASHINGTON LOAN: Creditors' Proofs of Debt Due March 18 WESTERN ASSET: Shareholders Receive Wind-Up Report YAS 1: Shareholders to Hear Wind-Up Report on March 27 D O M I N I C A N R E P U B L I C DOMINICAN REPUBLIC: US$200MM 'Injection' Calms Jittery Dollar J A M A I C A JAMAICA: Announcement to be Made on Hedging Soon, Says Paulwell JAMAICA: To Borrow at Least J$129 Billion in 2015/16 NATIONAL COMMERCIAL: Fitch Affirms 'B-' Issuer Default Ratings M E X I C O CONSUBANCO SA: Fitch Raises Issuer Default Ratings to 'BB' FINANCIERA INDEPENDENCIA: Fitch Affirms 'BB-/B' IDRs GRUPO KUO: Fitch Affirms 'BB' Issuer Default Ratings SERVICIOS CORPORATIVOS: Fitch Affirms 'B' Issuer Default Rating T R I N I D A D & T O B A G O CL FIN'L: "New CLF Agreement by March," Chairman Says - - - - - =========== B R A Z I L =========== PETROLEO BRASILEIRO: Scandal Leaves Alusa Workers Without Pay ------------------------------------------------------------- EFE News reports that about 3,000 employees of a Petroleo Brasileiro S.A. (Petrobras) contractor who have not been paid since late 2014 claim they are the first victims of the corruption scandal at the Brazilian state-controlled oil giant. Alusa, a company hired by Petrobras to build the Rio de Janeiro Petrochemical Complex, or Comperj, in the city of Itaborai, located 50 kilometers (31 miles) from Rio de Janeiro, has suspended the issuance of paychecks, spokesmen for the workers told EFE News. The report notes that the contractor was one of the companies affected by Petrobras's decision to review its investment plans and postpone some projects, including the Comperj, to deal with the financial crisis caused by revelations of massive diversions of funds from contracts entered into by Brazil's largest corporation. Petrobras, which accounts for 12 percent of Brazil's GDP, is under investigation following disclosure of widespread corruption said to have cost the company billions of dollars since the mid-1990s, the report notes. The scandal, in which money also was allegedly funneled to politicians, has led to the resignation of top company executives, including Maria das Gracas Silva Foster, who was replaced as Petrobras's CEO by Aldemir Bendine, former chief executive of state-run bank Banco do Brazil, the report discloses. About Petroleo Brasileiro Based in Rio de Janeiro, Brazil, Petroleo Brasileiro S.A. -- Petrobras (Brazilian Petroleum Corporation) -- explores for oil and gas and it 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 March 6, 2015, the deepening investigation into an alleged kickback scheme at Petroleo Brasileiro SA (Petrobras) has triggered concerns for the Brazilian banks with exposures not only to the state-controlled oil company, but also to its large base of suppliers, as well as the broader oil and gas (O&G) and construction industries, according to a new report from Moody's Investors Service. PETROLEO BRASILEIRO: Demand, Relationships Support Contracts ------------------------------------------------------------ A large-scale renegotiation or cancelation of existing offshore driller contracts is not anticipated given the supportive Petroleo Brasileiro S.A.'s s demand framework and long-term, mutually beneficial relationship, according to Fitch Ratings. Further, Fitch believes Brazilian and non-Brazilian offshore drillers will be reluctant to renegotiate existing longer term contracts at reasonable day rates that stretch beyond the current downcycle. Operation Lava Jato, a Brazilian corruption investigation of Petrobras and numerous construction companies, has created uncertainty regarding the company's ability to execute its aggressive capex plan and meet production growth targets, which may impact offshore drillers. These concerns were further highlighted by recent Petrobras-related announcements from Seadrill Limited and Diamond Offshore (DO). Seadrill first announced the removal of $1.1 billion in Petrobras-related backlog, about 5% of its total, due to contract renewal concerns. This was followed by DO's disclosure that Petrobras cancelled an existing contract, representing over 5% of its backlog, within its rights under the agreement. Fitch considers Brazil's oil and gas sector, particularly Petrobras, to be economically and strategically important to the country. The oil and gas sector's contribution to GDP rose to 13% in 2013 from 3% in 2000. Petrobras' importance is evidenced by its near monopoly status as a liquid fuel supplier, supportive pricing policy (Fitch-estimated Petrobras realized prices of $80-$85 per barrel), access to capital from state-owned banks and role in the development of ancillary industries. Petrobras' framework and aggressive capex program support offshore demand. Another near- term consideration is the delivery delay uncertainty of 28 Sete Brasil drilling rigs, which further supports demand for working offshore rigs. About 9% of contracted offshore rigs are working for Petrobras within Fitch's sample of 10 non-Brazilian offshore drillers. Smaller, newer offshore drillers tend to have a larger percentage (18%) of their fleets contracted with Petrobras. This is a function of rig capability (ultra-deepwater) and delivery timing (2011 or newer), as well as fleet size (10 or less rigs). Larger offshore drillers have a more manageable fleet exposure (8%). One notable outlier was DO, with over 20% of its working fleet contracted with Petrobras. Nearly 13% of revenue backlog within Fitch's sample of non- Brazilian offshore drillers is linked to Petrobras. The relative difference in backlog versus fleet exposure is due to contractual terms. The smaller, newer drillers have a varied Petrobras revenue profile. Pacific Drilling had its sole Petrobras contract expire in February 2015, while Vantage Drilling has a higher concentration (62%) due to the long length of its sole Petrobras contract. The larger drillers generally have a more manageable backlog exposure (11%). Notable exposure includes DO (25%), Ensco (14%) and Seadrill (16%). ========================== C A Y M A N I S L A N D S ========================== BLUE SELECT: Shareholder Receives Wind-Up Report ------------------------------------------------ The shareholder of Blue Select Fund, Ltd. received on March 10, 2015, the liquidator's report on the company's wind-up proceedings and property disposal. The company's liquidator is: Priestleys c/o Martina de Lima Telephone: (345) 946-8577 e-mail: martina.delima@palawcayman.com COLONNADE INVESTMENTS: Commences Liquidation Proceedings -------------------------------------------------------- On Jan. 26, 2015, the sole shareholder of Colonnade Investments 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: Richard Parsons Crossroads Capital, Little Denmark Building Road Town, Tortola British Virgin Islands VG1110 DIAM ENHANCED: Placed Under Voluntary Wind-Up --------------------------------------------- At an extraordinary general meeting held on Jan. 29, 2015, the shareholder of Diam Enhanced Active Fund Limited 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: Commerce Corporate Services Limited Telephone: 949 8666 Facsimile: 949 0626 P.O. Box 694 Grand Cayman Cayman Islands DOVER OFFSHORE: Commences Liquidation Proceedings ------------------------------------------------- On Jan. 9, 2015, the sole shareholder of Dover Offshore Fund II, Ltd. resolved to voluntarily liquidate the company's business. Only creditors who were able to file their proofs of debt by March 9, 2015, will be included in the company's dividend distribution. The company's liquidator is: Mourant Ozannes Cayman Liquidators Limited c/o Morna Chisholm Mourant Ozannes Attorneys-at-Law Reference: NDL Telephone: (+1) 345 949 4123 Facsimile: (+1) 345 949 4647 Mourant Ozannes Cayman Liquidators Limited Reference: Peter Goulden Telephone: (+1) 345 949 4123 Facsimile: (+1) 345 949 4647 94 Solaris Avenue Camana Bay P.O. Box 1348 Grand Cayman KY1-1108 Cayman Islands EATON VANCE: Commences Liquidation Proceedings ---------------------------------------------- On Feb. 5, 2015, the shareholder of Eaton Vance Emlip Commodity Subsidiary, 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: Frederick S. Marius c/o Two International Place Boston, MA 02110 USA Telephone: +1 (345) 914 6365 EDDYSTONE OFFSHORE: Creditors' Proofs of Debt Due March 30 ---------------------------------------------------------- The creditors of The Eddystone Offshore Fund, Ltd. are required to file their proofs of debt by March 30, 2015, to be included in the company's dividend distribution. The company commenced liquidation proceedings on Jan. 30, 2015. The company's liquidator is: Maricorp Services Ltd. c/o J. Andrew Murray Telephone: (345) 949-9710 P.O. Box 2075, Grand Cayman, KY1-1105 Cayman Islands EVERBRIGHT ASHMORE: Shareholders Receive Wind-Up Report ------------------------------------------------------- The shareholders of Everbright Ashmore Raycom Ltd. received on March 10, 2015, the liquidator's report on the company's wind-up proceedings and property disposal. The company's liquidator is: Antoine Bastian c/o Richard Bennett/Phoebe Chan Telephone: +852 3656 6069/ +852 3656 6063 Facsimile: +352 949-9877 Elian Fiduciary Services (Cayman) Limited 89 Nexus Way Camana Bay Grand Cayman KY1-9007 Cayman Islands EWARRANT CAPITAL: Shareholder Receives Wind-Up Report ----------------------------------------------------- The shareholder of Ewarrant Capital Management Ltd. received on Feb. 16, 2015, the liquidator's report on the company's wind-up proceedings and property disposal. The company's liquidator is: Richard Chisholm 2425 Olympic Blvd. Suite 120E, Santa Monica CA, 90404, USA c/o Harrison Leong Telephone: (310) 315-8843 HAV3 (9) LIMITED: Shareholders to Hear Wind-Up Report on March 27 ----------------------------------------------------------------- The shareholders of HAV3 (9) Limited will hear on March 27, 2015, at 9:15 a.m., the liquidator's report on the company's wind-up proceedings and property disposal. The company's liquidator is: Intertrust SPV (Cayman) Limited 190 Elgin Avenue George Town Grand Cayman KY1-9005 Cayman Islands c/o Jennifer Chailler Telephone: (345) 943-3100 LION INVESTMENTS C: Creditors' Proofs of Debt Due March 18 ---------------------------------------------------------- The creditors of Lion Investments C Limited are required to file their proofs of debt by March 18, 2015, to be included in the company's dividend distribution. The company commenced liquidation proceedings on Feb. 3, 2015. The company's liquidator is: Intertrust SPV (Cayman) Limited 190 Elgin Avenue George Town Grand Cayman, KY1-9005 Cayman Islands c/o Jennifer Chailler Telephone: (345) 943-3100 MONT BLANC: Sole Member to Hear Wind-Up Report on April 6 --------------------------------------------------------- The sole member of Mont Blanc Investments Ltd. will hear on April 6, 2015, at 10:00 a.m., the liquidator's report on the company's wind-up proceedings and property disposal. The company's liquidator is: Lion International Management Limited P.O. Box 71 Craigmuir Chambers Road Town, Tortola British Virgin Islands OLOOK LTD: Placed Under Voluntary Wind-Up ----------------------------------------- On Jan. 29, 2015, the shareholders of Olook, 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: Andre Nobre De Sousa Beisert c/o Campbells Corporate Services Limited Floor 4, Willow House, Cricket Square P.O. Box 268 Grand Cayman KY1-1104 Cayman Islands Telephone: +1 (345) 949 6258 Facsimile: +1 (345) 945 287 P MANAGEMENT COMPANY: Commences Liquidation Proceedings ------------------------------------------------------- On Feb. 5, 2015, the sole shareholder of P Management Company 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: Charles Pilotaz Telephone: +41 79 137 1329 Harbour Place, 4th Floor 103 South Church Street P.O. Box 10240 Grand Cayman KY1-1002 Cayman Islands PACIFIC ESPLANADE: Shareholders Receive Wind-Up Report ------------------------------------------------------ The shareholders of Pacific Esplanade Investment Fund II GP received on March 10, 2015, the liquidator's report on the company's wind-up proceedings and property disposal. The company's liquidator is: Hongdong Wang Telephone: +852 27972718 Facsimile: +852 2341 7128 160 Gloucester Road, 19th Floor Hong Kong PARAGON (CAYMAN): Shareholders to Hear Wind-Up Report on April 2 ---------------------------------------------------------------- The shareholders of Paragon (Cayman) Managers will hear on April 2, 2015, at 4:00 p.m., the liquidator's report on the company's wind-up proceedings and property disposal. The company's liquidator is: Nicola Cowan DMS Corporate Services Ltd Telephone: (345) 946 7665 Facsimile: (345) 949 2877 dms House, 2nd Floor, P.O. Box 1344, Grand Cayman KY1-1108 Cayman Islands PARAGON CAYMAN GP: Shareholders to Hear Wind-Up Report on April 2 ----------------------------------------------------------------- The shareholders of Paragon Cayman GP will hear on April 2, 2015, at 4:00 p.m., the liquidator's report on the company's wind-up proceedings and property disposal. The company's liquidator is: Nicola Cowan DMS Corporate Services Ltd Telephone: (345) 946 7665 Facsimile: (345) 949 2877 dms House, 2nd Floor, P.O. Box 1344, Grand Cayman KY1-1108 Cayman Islands PINE LUCK: Shareholders Receive Wind-Up Report ---------------------------------------------- The shareholders of Pine Luck Assets Limited received on Jan. 28, 2015, the liquidator's report on the company's wind-up proceedings and property disposal. The company's liquidator is: Lion International Management Limited c/o Irene HOR and Jean Lin The R & H Trust Co. Ltd. P.O. Box 897 Windward1 Regatta Office Park Grand Cayman KY1-1103 Cayman Islands RIO VERDE: Creditors' Proofs of Debt Due March 18 ------------------------------------------------- The creditors of Rio Verde Limited are required to file their proofs of debt by March 18, 2015, to be included in the company's dividend distribution. The company commenced wind-up proceedings on Feb. 5, 2015. The company's liquidator is: Buchanan Limited c/o Allison Kelly Telephone: (345) 949-0355 Facsimile: (345)949-0360 P.O. Box 1170 George Town, Grand Cayman Cayman Islands KY1-1102 STOCKTON HOLDINGS: Sole Member to Hear Wind-Up Report on March 17 ----------------------------------------------------------------- The sole member of Stockton Holdings Limited will hear on March 17, 2015, the liquidator's report on the company's wind-up proceedings and property disposal. The company's liquidator is: Robert G. Easton c/o Maples and Calder Attorneys-at-law P.O. Box 309, Ugland House Grand Cayman KY1-1104 Cayman Island SUNTECH POWER: Commences Liquidation Proceedings ------------------------------------------------ On Jan. 27, 2015, the Grand Court of Cayman Islands entered an order to liquidate the business of Suntech Power Holdings Co., Ltd. The company's liquidators are: David A.K. Walker PwC Corporate Finance & Recovery (Cayman) Limited P.O. Box 258, Strathvale House Grand Cayman, KY1-1104 Cayman Islands Yat Kit "Victor" Jong PricewaterhouseCoopers Consultants (Shenzhen) Limited PricewaterhouseCoopers Centre, 11th Floor 202, Hubin Road, Shanghai People's Republic of China, 200021 SWEETSOP TRADING III: Member to Hear Wind-Up Report on April 6 -------------------------------------------------------------- The member of Sweetsop Trading III (Cayman) Limited will hear on April 6, 2015, at 10:00 a.m., the liquidator's report on the company's wind-up proceedings and property disposal. The company's liquidator is: Lion International Management Limited P.O. Box 71 Craigmuir Chambers Road Town, Tortola British Virgin Islands THOUSAND PINES: Shareholders Receive Wind-Up Report --------------------------------------------------- The shareholders of Thousand Pines Holdings Limited received on Jan. 28, 2015, the liquidator's report on the company's wind-up proceedings and property disposal. The company's liquidator is: Lion International Management Limited c/o Irene HOR and Jean Lin The R & H Trust Co. Ltd. P.O. Box 897 Windward1 Regatta Office Park Grand Cayman KY1-1103 Cayman Islands UNITY CAPITAL: Shareholder to Hear Wind-Up Report on March 27 ------------------------------------------------------------- The shareholder of Unity Capital Partners (Cayman) Ltd will hear on March 27, 2015, at 8:30 a.m., the liquidator's report on the company's wind-up proceedings and property disposal. The company's liquidator is: Intertrust SPV (Cayman) Limited 190 Elgin Avenue George Town Grand Cayman KY1-9005 Cayman Islands c/o Jennifer Chailler Telephone: (345) 943-3100 VIETNAM RESOURCE: Commences Liquidation Proceedings --------------------------------------------------- On Feb. 4, 2015, the sole shareholder of Vietnam Resource Investments S.A.R.L. resolved to voluntarily liquidate the company's business. Only creditors who were able to file their proofs of debt by March 10, 2015, will be included in the company's dividend distribution. The company's liquidator is: Beat Schurch c/o Maples and Calder Attorneys-at-law The Center, 53rd Floor 99 Queen's Road Central Hong Kong WASHINGTON LOAN: Creditors' Proofs of Debt Due March 18 ------------------------------------------------------- The creditors of Washington Loan Funding Limited 2014-1 are required to file their proofs of debt by March 18, 2015, to be included in the company's dividend distribution. The company commenced liquidation proceedings on Feb. 5, 2015. The company's liquidator is: Intertrust SPV (Cayman) Limited 190 Elgin Avenue George Town Grand Cayman KY1-9005 Cayman Islands c/o Jennifer Chailler Telephone: (345) 943-3100 WESTERN ASSET: Shareholders Receive Wind-Up Report -------------------------------------------------- The shareholders of Western Asset Emerging Markets Opportunity Master Fund, Ltd. received on March 9, 2015, the liquidator's report on the company's wind-up proceedings and property disposal. The company's liquidator is: Gavin L. James Walkers 190 Elgin Avenue George Town Grand Cayman KY1-9001 Cayman Islands Telephone: (345) 914 6386 YAS 1: Shareholders to Hear Wind-Up Report on March 27 ------------------------------------------------------ The shareholders of YAS 1 will hear on March 27, 2015, at 9:00 a.m., the liquidator's report on the company's wind-up proceedings and property disposal. The company's liquidator is: Intertrust SPV (Cayman) Limited 190 Elgin Avenue George Town Grand Cayman KY1-9005 Cayman Islands c/o Jennifer Chailler Telephone: (345) 943-3100 =================================== D O M I N I C A N R E P U B L I C =================================== DOMINICAN REPUBLIC: US$200MM 'Injection' Calms Jittery Dollar ------------------------------------------------------------- Dominican Today reports that Dominican Republic Central Banker Hector Valdez Albizu said the injection of US$200 million to the exchange market in mid-February produced excellent results, since in his view it stabilized the dollar's rate. Mr. Albizu said while the price of a dollar stood as high as RD$45.20 in mid-January, its current RD$44.74 rate shows a decline, reaching its normal growth trend, according to Dominican Today. "We managed to return to the peace and stability of the exchange rate's movement," the report quoted Mr. Albizu as saying. The report notes that Mr. Albizu said he's very calm because in financial matters when those jumps reach as high as 60 or 65 points, returning the currency to its original state is "very satisfying." ============= J A M A I C A ============= JAMAICA: Announcement to be Made on Hedging Soon, Says Paulwell --------------------------------------------------------------- RJR News reports that Jamaica Energy Minister Phillip Paulwell has confirmed that a decision on how Jamaica will go ahead with hedging the price of oil will be announced soon. Mr. Paulwell had previously given the Jamaican Government's commitment to the option of exploring the issue of hedging, to help the country benefit from current low oil prices, according to RJR News. This mechanism will provide a buffer when oil prices start to rise again. The Minister told RJR News that Finance Minister Dr. Peter Phillips will make an announcement in respect of the hedging option "very, very shortly," adding that the finance ministry will be taking the lead in this matter. Mr. Paulwell said Jamaica's commitment under the Petrocaribe Agreement, in which it purchases oil from Venezuela under favorable financing terms, was an issue to overcome if the country is to hedge oil successfully, the report relates. * * * As reported in the Troubled Company Reporter-Latin America on Feb. 23, 2015, Fitch Ratings has affirmed Jamaica's long-term foreign and local currency Issuer Default Ratings (IDRs) at 'B-'. The issue ratings on Jamaica's senior unsecured foreign and local currency bonds are also affirmed at 'B-'. The Rating Outlooks on the long-term IDRs are revised to Positive from Stable. The Country Ceiling is affirmed at 'B' and the short-term foreign currency IDR at 'B'. JAMAICA: To Borrow at Least J$129 Billion in 2015/16 ---------------------------------------------------- The Daily Observer reports that the Fiscal Policy Paper (FPP) for 2015/16 says that central government's borrowing for financial year 2015/16, which begins on April 1, will amount to approximately J$129 billion. Of the budgeted loan receipts, J$56.3 billion is programmed to be raised from domestic sources and J$72.5 billion from external (overseas) sources, according to the Daily Observer. The report notes that the overseas loans will be in the form of policy-based/development policy loans from international financial institutions, as well as J$11 billion in project loans in addition to loans from the international capital market. However, the FPP said that the borrowing need for 2015/16 represents a 21 per cent decline in gross loan receipts compared to 2014/15, the report relates. This reduced financing requirement is due chiefly to the lower fiscal deficit, as well as the fact that the government of Jamaica had pre-financed a significant portion of its obligations due in 2015/16 from resources raised in 2014/15, the report adds. * * * As reported in the Troubled Company Reporter-Latin America on Feb. 23, 2015, Fitch Ratings has affirmed Jamaica's long-term foreign and local currency Issuer Default Ratings (IDRs) at 'B-'. The issue ratings on Jamaica's senior unsecured foreign and local currency bonds are also affirmed at 'B-'. The Rating Outlooks on the long-term IDRs are revised to Positive from Stable. The Country Ceiling is affirmed at 'B' and the short-term foreign currency IDR at 'B'. NATIONAL COMMERCIAL: Fitch Affirms 'B-' Issuer Default Ratings -------------------------------------------------------------- Fitch Ratings has affirmed the National Commercial Bank Jamaica Limited's (NCBJ) long-term foreign currency and local currency Issuer Default Ratings (IDRs) at 'B-' and its Viability Rating (VR) and Support Rating Floor (SRF) at 'b-.' Fitch has also revised NCBJ's Rating Outlook to Positive from Stable, which is in line with Fitch's revision of the sovereign's Rating Outlook from Stable to Positive on Feb. 19, 2015. A full list of rating actions follows at the end of this press release. Fitch has revised the Outlook on NCBJ's Long-Term IDRs in line with the sovereign due to the high influence of the operating environment on NCBJ's ratings and its resilient financial performance under sovereign stress. NCBJ's SRF is equalized with the sovereign's long-term IDR due to the bank's systemic importance. KEY RATING DRIVERS - IDRS and VR The operating environment has a high influence on National Commercial Bank Jamaica Ltd.'s (NCBJ) Viability Rating (VR) as Jamaica's small and weak economy limits the bank's overall financial profile relative to higher rated emerging market peers (universal/commercial banks). Asset quality weighs heavily on the bank's ratings due to NCBJ's significant exposure to the Jamaican government. At September 2014 (FYE14) NCBJ's holdings of Jamaican government securities (including government guaranteed bonds) represented 48.0% of total assets, or 2.9x equity. Fitch views this exposure as a significant source of credit risk given the sovereign's speculative grade rating (long-term IDR of 'B-,' Positive Outlook). In addition, the bank's loan portfolio exhibits material levels of concentration, as is typical of a smaller economy, which has contributed to volatility in the bank's loan quality indicators. Loan impairment indicators are weaker than similarly rated international peers (emerging market commercial/universal banks with 'b' category VRs) as of Dec. 31, 2014. NCBJ's ratings also consider the bank's resilient financial performance despite two sovereign debt restructurings from 2010 to 2013 thanks to its scale and its stable and low-cost funding. In addition, the bank has partly offset declining interest income through fees from an expanding suite of services. Solid earnings and a policy limiting dividend distributions have strengthened the bank's capitalization levels which compare favorably to international peers. However, Fitch views NCBJ's capital levels as adequate given the bank's exposure to the Jamaican government. In term of the bank's funding, the bank relies primarily on customer deposits but also makes use of its significant government securities holdings in the repo market. Repos represented 30.8% of total liabilities at Dec. 31, 2014. NCBJ maintains a significant structural mismatch between short-term assets and liabilities. However, this is partly mitigated by its solid liquidity profile, with holdings of cash and available for sale securities equal to 122% of customer deposits at FYE2014. KEY RATING DRIVERS - SUPPORT RATING AND SUPPORT RATING FLOOR The sovereign's speculative grade rating limits the government's capacity to provide support, resulting in a support rating of '5'. However, the Support Rating Floor of 'B-,' which is equalized with the sovereign rating, reflects NCBJ's systemic importance, as well as the Jamaican government's provision of extraordinary support to the banking system during prior crises. RATING SENSITIVITIES - IDRS AND VR The bank's ratings are sensitive to a change in Fitch's view of the sovereign given the bank's sizable sovereign exposure. In addition, a marked deterioration in financial performance, including a decline in asset quality, weakened profitability that pressures the bank's capital position, or sudden deposit instability, to a level that is inconsistent with its current peers (emerging market commercial banks with a VR of 'b-', 'b' or 'b+') could trigger a downgrade. RATING SENSITIVITIES - SUPPORT RATING AND SUPPORT RATING FLOOR While Jamaica's propensity to provide timely support to NCBU remains high due to the bank's systemic importance, its ability to do so is not likely to change given the sovereign's high level of indebtedness. As such, the support rating and the SRF have no upgrade potential. Fitch has affirmed National Commercial Bank Jamaica Ltd.'s ratings as follows: -- Long-term foreign and local currency IDR affirmed at 'B-'; Outlook revised to Positive from Stable; -- Short-term foreign and local currency IDR affirmed at 'B'; -- Viability Rating affirmed at 'b-'; -- Support Rating affirmed at '5'; -- Support Rating Floor affirmed to 'B-'. =========== M E X I C O =========== CONSUBANCO SA: Fitch Raises Issuer Default Ratings to 'BB' ---------------------------------------------------------- Fitch Ratings has upgraded the foreign- and local-currency long- term Issuer Default Ratings (IDRs) of Consubanco, S.A., Institucion de Banca Multiple (Consubanco) to 'BB' from 'BB-'. The short-term IDR was affirmed at 'B'. Its Viability Rating (VR) was also upgraded to 'BB' from 'BB-', its long- and short-term National Scale ratings to 'A(mex)' from 'A-(mex)' and 'F1(mex)' from 'F2(mex)', respectively. The Outlook on the long-term rating is Stable. KEY RATING DRIVERS - VR, IDRs, NATIONAL RATINGS AND SENIOR DEBT RATINGS The upgrade of the bank's IDRs, VR, National Scale and Senior Debt ratings reflects its consistent financial performance throughout the economic cycle, reflected in sound and recurring profitability ratios driven by ample margins and strong efficiency levels, which underpin its strong capitalization metrics. Additionally, the upgrade is driven by the bank's substantial and sustained improvement in the flexibility of its funding mix which shifted towards unsecured and more stable funding sources and by the moderate improvement in asset quality exhibited during 2014. Consubanco's ratings also consider its strong and growing business franchise in the public sector employee's pay-roll-deducted loan segment. Consubanco's ratings are constrained by the bank's high level of balance sheet concentration, the challenging operating and competitive environment of its business segment, and the relatively high impaired loan ratio - although the latter is compensated by its ample loan loss reserve coverage and strong capital base. Consubanco's National Scale ratings are supported by the same factors that drive its VR, which result in a strong financial profile and prospects. Consubanco's profitability has been historically strong and stable given the high net interest margins in its core products, coupled with its leading market position, ample business volumes, sound efficiency and moderately contained credit costs. Additionally, most performance metrics remain robust and higher than most of its peers. Operating return on assets (ROA) and operating return on equity (ROE) were 10% and 38.4%, respectively, higher than the 7.7% and 26.8% registered in 2013. Fitch considers Consubanco's consistent profitability ratios as one of its main strengths and believes core earnings are sustainable in the foreseeable future. As of December 2014, the impairment ratio as adjusted by Fitch (considering employer delays of more than 90 days) stood at 8.5%; this represents an improvement to the 10.3% impairment ratio registered in 2013. During 2014, net charge-offs amounted to MXN146 million, which represented 3.5% of gross loans (2013: 3.7%) while restructured loans represented 0.8% of average gross loans as of December 2014. Consubanco's loan loss reserves are strong and amply cover the impaired loans balance. The limited flexibility and concentration of Consubanco's funding base has been one of its major challenges. Fitch considers there have been material improvements over the past years, shifting away from secured funding towards unsecured issuances and more stable funding sources. Nevertheless, Consubanco's funding base remains highly concentrated on debt issuances (60.5% as of December 2014). Historically, Consubanco has had strong capitalization metrics. Its hefty capital base and its high capacity to internally generate equity are major strengths in Fitch's opinion. The bank's Fitch Core Capital Ratio stood at 17.3% as of December 2014 (2013: 15%). Fitch considers that, other than traditional credit risks, Consubanco is also somewhat exposed to operational, political and event risk. Failure to properly implement the agreements with employers or unwillingness from public sector entities to timely and fully disburse retained collections, changes in municipal and federal leadership, among others, are potential risk factors that could affect Consubanco under certain circumstances. KEY RATING DRIVERS - SUPPORT RATING AND SUPPORT RATING FLOOR The bank's SR of '5' and SRF of 'NF' are driven by its low systemic importance and reflect Fitch's opinion that external support for the bank in case of need, although possible, cannot be relied upon. RATING SENSITIVITIES -VR, IDRs, NATIONAL RATINGS AND SENIOR DEBT RATINGS Fitch believes that Consubanco's ratings upside potential is limited in the short term. Fitch would consider upgrading these ratings in the medium term, when the bank's business volume increases while it achieves important balance sheet diversification, both in terms of its loan portfolio and funding mix, and while maintaining asset and liability tenors relatively matched, and a comfortable cash flow schedule. The bank's VR, IDRs, National and senior debt ratings could be downgraded if asset quality deteriorates to such an extent that operating (ROA) and/or the Fitch core capital ratio fall below 5% or 15%, respectively. Negative developments in political and/or business risks could also affect the ratings. RATING SENSITIVITIES - SUPPORT RATING AND SUPPORT RATING FLOOR Given the limited systemic importance of the bank and negligible share of retail deposits, Fitch believes that the SR and SRF are unlikely to change in the foreseeable future. The rating actions are as follows: Consubanco, S.A., Institucion de Banca Multiple: -- Long-term IDR upgraded to 'BB' from 'BB-'; -- Short-term IDR affirmed at 'B'; -- Long-term local currency IDR upgraded to 'BB' from 'BB-'; -- Short-term local currency IDR affirmed at 'B'; -- Viability rating upgraded to 'bb' from 'bb-'; -- Long-term senior unsecured notes upgraded to 'BB' from 'BB-'; -- Support rating affirmed at '5'; -- Support rating floor affirmed at 'NF'; -- Long-term national-scale rating upgraded to 'A' from 'A- (mex)'; -- Short-term national-scale rating upgraded to 'F1(mex)' from 'F2(mex)'; -- Long-term national-scale rating for local unsecured debt upgraded to 'A' from 'A-(mex)'. The Rating Outlook is Stable. FINANCIERA INDEPENDENCIA: Fitch Affirms 'BB-/B' IDRs ---------------------------------------------------- Fitch Ratings has affirmed the foreign- and local-currency 'BB-' and 'B' long- and short-term Issuer Default ratings (IDRs), respectively, of Financiera Independencia S.A.B. de C.V. (Findep). In addition, the national scale ratings for Findep and its Mexican subsidiary Apoyo Economico Familiar S.A. de C.V. Sofom, E.N.R. (AEF) have been affirmed at 'A-(mex)' for the long-term and 'F2(mex)' for the short-term rating. Also, the national scale ratings for the group-lending subsidiary Financiera Finsol, S.A. de C.V. Sofom E.N.R. (Finsol Mexico) have been affirmed at 'BBB+(mex)' and 'F2(mex)'. The Outlook is Stable. A full list of rating actions follows at the end of this rating action commentary. FINDEP's IDRs AND NATIONAL SCALE RATINGS KEY RATING DRIVERS Fitch considers Findep's franchise in the microfinance sector as one of its key strengths. Findep has a strong position in the unsecured personal lending sector in Mexico, while it has expanded its geographical and group lending niche presence mainly through its subsidiaries in Mexico, U.S. and Brazil. Fitch believes that the company's actions to focus its strategy not only on loan growth but on portfolio quality, revenue diversification, and capital and profitability enhancement has enabled it to maintain a relatively stable performance in a struggling competitive environment and weak macroeconomic conditions that have affected the microfinance industry. The micro-lending industry in Mexico continues to be pressured by low entrance barriers and less formal participants that have increased the indebtedness of Findep's customer base. Findep's profitability has remained stable. Operating return on assets moderately rose in 2014 to 4.1% (ROA 3%) despite stability in loan portfolio size; sustained by the entity's ample interest margins and modest improvements in efficiency and funding costs. Profits have also benefited by the growing diversification by product and country, which have partially reduced the adverse effects of the concentration. Total write-offs plus impaired loans are elevated in the microfinance sector due to the target customer segment (low-income and unbanked clients), and have been pressured over the past three years. On a consolidated basis, during 2014 Findep managed to somehow sustain its asset quality ratios; however, they are still high. During 2014, non-performing loans (NPLs) plus 12-month written-off loans rose to 22% from 21% at YE2013, but remained below the 2009-2012 average of 25%. Loan quality indicators in 2014 were not as good as anticipated by the entity given the slowdown of the Mexican and the Brazilian economies which saw further delinquency deterioration in some of Findep's subsidiaries (AEF, Independencia and Finsol Brazil). Findep expects to strengthen asset quality indicators in the future, and to maintain 100% loan loss reserve coverage. Profits from past two years and moderate organic growth allowed Findep to preserve its capital base, although it has not yet compensated for the goodwill generated from the acquisitions of the subsidiaries. Fitch believes Findep has enhanced its capacity to generate internal capital; however, the ratings are constrained by its still tight capital ratios. Findep's profitability together with management's decision to temporarily suspend dividends will continue supporting Findep's commitment to restore capitalization. As of December 2014, tangible equity-to-tangible assets was 12.3% (YE2013 12.8%). Despite the internal capital generated in 2014, tangible capital was moderately reduced given the increased deferred expenses from the public debt issuances. Findep is structurally reliant on wholesale funding, given its legal limitation to receive retail deposits. Fitch believes that the entity has access to a reasonably diversified funding mix by source and maturity, with a combination of commercial and development bank facilities, and national and international public debt placements. The short-term nature of its loan portfolio supports Findep's cash flow generation and flexibility. Fitch considers that liquidity management is adequate for Findep, and relies on its revolving portfolio and adequate liability maturities which drive the positive cumulative gaps for the next three years. RATING SENSITIVITIES Findep's ratings could be downgraded if the operating return on assets (ROA) weakens to below 2%; the NPLs plus 12-month written- off loans ratio is sustained above 25%; and/or the tangible equity-to-tangible assets ratio fall below 12%. A downgrade could also arise from negative changes in its funding profile. Findep's ratings could only benefit from a substantial enhancement of its tangible capital ratios and from a quicker than expected improvement on its overall performance. AEF AND FINSOL MEXICO's NATIONAL SCALE RATINGS KEY RATING DRIVERS National ratings of AEF and Finsol Mexico are based on the likelihood of support from its parent, Findep, if needed. Fitch believes that AEF is a core subsidiary to its parent, given its strong and sustained contribution to the consolidated results and internal capital generation. Its importance is marked by the growing synergies in funding, corporate governance and operation, and also on the knowledge transfer between the two entities. The acquisition of AEF was relevant to the parent in terms of geographical diversification. AEF's loans represent 19.3% of Findep's total loans. AEF's ratings are affirmed at the same national scale rating level of its parent. Fitch considers Finsol Mexico as a strategically important subsidiary to Findep given the strong synergies among the entities in terms of corporate governance, operation and funding. Although Finsol Mexico has been relevant to Findep in terms of product diversification, representing 11% of the total loan portfolio, its contribution to total results has been limited given the slower than expected recovery of the subsidiary performance in a heavily competitive environment. Findep's actions to strengthen the behavior of the working capital loans, and the increasing integration of strategies among the entities sustain Fitch's assessment of support. Finsol's long-term rating is notched down by one level from the national scale rating of its parent. RATING SENSITIVITIES Any downside potential for Findep's subsidiaries (AEF and Finsol Mexico), will be driven by any potential downgrade of Findep's ratings and/or a change of each entity's strategic importance to the parent. Fitch affirms the following ratings: Findep: -- Long-Term foreign and local currency IDRs at 'BB-'; Outlook Stable; -- Short-Term foreign and local currency IDRs at 'B'; -- USD200 million senior unsecured notes at 'BB-'; -- National-scale Long-Term rating at 'A-(mex)'; Outlook Stable; -- National-scale Short-Term rating at 'F2(mex)'. AEF: National-scale Long-Term rating at 'A-(mex)'; Outlook Stable; and National-scale Short-Term rating at 'F2(mex)'. Finsol Mexico: National-scale Long-Term rating at 'BBB+(mex)'; Outlook Stable; and National-scale Short-Term rating at 'F2(mex)'. GRUPO KUO: Fitch Affirms 'BB' Issuer Default Ratings ---------------------------------------------------- Fitch Ratings has affirmed Grupo KUO, S.A.B. de C.V. (KUO)'s ratings as follows: -- Long-term foreign currency Issuer Default Rating (IDR) at 'BB'; -- Long-term local currency IDR at 'BB'; -- Long-term national scale rating at 'A(mex)'; -- USD325 million senior notes due 2022 at 'BB'; -- MXN700 million Certificados Bursatiles due in 2015 at 'A(mex)'; -- MXN700 million Certificados Bursatiles due in 2019 at 'A(mex)'. The Rating Outlook is Stable. KEY RATING DRIVERS The ratings reflect KUO's diversified business portfolio in the chemical, consumer and automotive industries which allow the company to mitigate the volatility across the business cycle, solid market positions, and stable financial profile. The ratings also incorporate its diversified revenue stream with around 46% of its total revenues coming from exports and subsidiaries located outside of Mexico, as well as its joint ventures (JVs) with international industry leaders. The ratings consider the company's strategy oriented toward developing high value-added products with attractive returns. KUO's ratings are limited by the exposure to volatility of demand and input costs across its business lines. For analytical purposes Fitch incorporates the financial information of KUO under the proportional consolidation of its JVs (Dynasol, Herdez del Fuerte and Insa Gpro). In addition, Fitch considers the consolidated figures reported under IFRS which account for the JVs under the equity method. Diversified Business Portfolio Fitch believes that KUO's diversified revenue and cash flow generation from its business portfolio mitigates the overall risks associated with the volatile industries in which it participates. KUO's relatively less cyclical consumer business (Herdez del Fuerte JV and pork meat) has contributed to counterbalancing the exposure to the volatile business cycle of its chemical (synthetic rubber and plastics) and automotive (transmissions and aftermarket) businesses. During 2014, lower cash flow generation from the chemical and automotive businesses (25% and 7% of total EBITDA, respectively) was more than compensated for by the higher operating performance of its pork meat business (41% of total EBITDA) in the consumer segment. KUO's JV with Herdez del Fuerte added the remaining 27% of the total EBITDA reported by the company. Steady Profitability Fitch expects KUO to face a challenging operating environment in 2015 associated with low sales prices in the chemical business and a normalized operation in its pork meat business. KUO's chemical business will continue to face pressures on revenues and cash flow generation, as lower oil prices and oversupply conditions decrease raw material costs and impact the company's average sales prices. In addition, revenues from its consumer business are expected to grow in the low single-digits range, as a result of a more balanced demand and supply in the pork industry, which had higher average sales prices during 2014. In contrast, KUO's transmissions business should benefit from higher requirements of new customers and better economic growth from the U.S. and Mexican economy. In terms of profitability, KUO's EBITDA margin should remain relatively stable, as lower EBITDA from its pork business will be mitigated by an increase in the cash flow generation of its transmissions, aftermarket and Herdez del Fuerte JV businesses. Higher Temporal Leverage Fitch expects that KUO's total debt-to-EBITDA and net-to-EBITDA, considering the proportional consolidation of its JVs, to be around 3.0x and 2.5x, respectively, in the following 12-18 months. These ratios are slightly above those of the last five years; however, Fitch considers them still within the current rating category. Fitch projects a modest increase in total debt for 2015 and stronger EBITDA generation in the second half of the year. As of Dec. 31, 2014, KUO's total debt-to-EBITDA was relatively stable at 2.7x, compared to year-end 2013, while net debt-to-EBITDA increased to 2.2x from 1.9x. Additionally, the company's consolidated total debt to EBITDA and net to EBITDA ratios, accounting its JVs by the equity method, were 3.8x and 3.4x, respectively. These ratios compare to 3.6x and 2.8x, at the end of 2013. KUO's total debt as of Dec. 31, 2014, was USD500 million. Negative FCF The ratings incorporate KUO's expected negative free cash flow (FCF) in 2015, considering the proportional consolidation of its JVs, after covering capex and dividends of approximately USD116 million and USD11 million, respectively. In 2014, the company's FCF was negative for around USD79 million as a result of capex for USD138 million and dividends payments of USD11 million. Fitch also estimated consolidated negative FCF of approximately USD103 million, accounting for the company's JVs by the equity method. Sustained negative FCF in the next 2-3 years will pressure the ratings. Adequate Liquidity KUO's liquidity position is adequate with a cash balance of USD90 million and a short-term debt of USD63 million as of Dec. 31, 2014, considering the proportional consolidation of its JVs. In addition, the company's consolidated cash balance, accounting for its JVs by the equity method, was around USD55 million. Fitch expects KUO to refinance its short-term debt before its maturity in November 2015. With no significant maturities from 2016 to 2018 after refinancing its credit facility of USD48 million due in 2016, Fitch considers the company's debt profile to be manageable. The ratings incorporate KUO's financial strategy which historically has funded its indebtedness needs at the holding company and then has distributed the funds to subsidiaries through intercompany lending or equity injections. At the holding company KUO services its debt mainly from the cash inflows of its subsidiaries in the form of interest payments from intercompany loans, dividends, and management fees. KEY ASSUMPTIONS Fitch's key assumptions within the rating case include: -- Proportional consolidation of its JVs; -- 2015 top-line growth approximately flat in USD; -- 2015 EBITDA margin stable at 9%; -- Total debt-to-EBITDA and net debt-to-EBITDA approximate 3x and 2.5x in the next 12-18 months. Leverage could be temporarily above these levels during 2015, since stronger results are expected in the second half of 2015. RATING SENSITIVITIES Positive rating actions could result from the combination of the following factors: -- Lower volatility in cash flow generation across its businesses leading to neutral to positive FCF through the cycle; -- Sustained lower leverage ratios (total debt/EBITDA and net debt-to-EBITDA around 2x and 1.5x, respectively, under the proportional consolidation of its JVs); -- Stronger liquidity position. Negative rating actions could result from the combination of the following factors: -- Sustained deterioration in operating performance leading to total debt-to-EBITDA and net debt-to-EBITDA consistently above 3x and 2.5x, respectively (under the proportional consolidation of its JVs); -- High negative FCF over the next 2-3 years; -- Weak liquidity position relative to upcoming debt obligations. SERVICIOS CORPORATIVOS: Fitch Affirms 'B' Issuer Default Rating --------------------------------------------------------------- Fitch Ratings has affirmed Servicios Corporativos Javer, S.A.P.I. de C.V.'s (Javer) ratings as follows: -- Foreign currency Issuer Default Rating (IDR) at 'B'; -- Local currency IDR at 'B'; -- USD320.25 million senior unsecured notes due 2021 at 'B+/RR3'. The Rating Outlook is Stable. Javer's 'B' ratings reflect its consistent business strategy that is oriented to the affiliated low-income segment, with Infonavit as its main mortgage provider. This strategy has allowed Javer to maintain a stable cash conversion cycle, translating into positive free cash flow (FCF). The company funding strategy of relying primarily upon long-term public debt with almost no secured debt is also unique for the industry and has led to an 'RR3' rating of its public bonds. Further considered in the company's ratings are its solid cash position, focus on FCF generation and manageable debt amortization schedule. In Fitch's view, Javer's ratings are constrained by its geographic concentration, as well as limited financial flexibility characterized by high leverage and low interest coverage. KEY RATING DRIVERS Weak Credit Profile due to High Leverage: Javer's current adjusted gross leverage ratio is weak for the rating category. Fitch calculates adjusted leverage considering the nominal amount of outstanding debt balance instead of the value reported on the balance sheet according to IFRS. Fitch estimates that Javer's adjusted gross leverage will be around 4.0x-4.5x and net leverage will be around 3.0x-3.5x during 2015- 2016 due to an increase in EBITDA generation, as a result of stability in its major markets and deployment of new projects in Estado de Mexico and Cancun, coupled with stable debt levels; deviations from these expectations could result in negative rating actions. According to Fitch's calculations, Javer's gross leverage was 5.3x as of Dec. 31, 2014, similar to the one registered the prior year of 5.4x, and within expectations previously incorporated in the ratings. Total adjusted debt increased to MXN4.767 billion at the end of 2014 from MXN4.270 billion at the end of 2013, mostly due to the Mexican peso depreciation in 2014 (12.55% year over year), Javer's USD320.25 million senior unsecured notes when translated to Mexican pesos resulted in a MXN525 million foreign exchange loss. The rating affirmation incorporates Javer's capacity to maintain focus on its FCF generation, improvement in its cash position coupled with its extended debt maturity profile. Focus on FCF Expected to Continue in 2015: Javer's MXN66 million positive FCF was lower than last year's MXN315 million, even though 2014's funds from operations (FFO) were MXN103 million higher than the MXN177.6 million reported in 2013. This was the result of the strategy to acquire housing projects and land with permits and infrastructure already in place therefrom other homebuilders currently in Concurso Mercantil (restructuring process). This investment in working capital represented around MXN1.055 billion. FCF calculation considers cash flow from operations less interests paid, less capital expenditures. Fitch expects that the company's FCF to continue positive in 2015 and 2016, as the land investments return to normalized levels of MXN500 million. Ability to Adjust Business Model: Positively factored into Javer's ratings is the company's ability to adjust its business strategy during 2014 to take advantage of the space left in the industry by the three Mexican homebuilders that filed for Concurso Mercantil. This situation allowed Javer to sell 18,525 units during 2014, a 6.5% increase compared to units sold in 2013. The increase during 2014 in terms of total income represented 11.7% when compared to 2013, reaching MXN6.057 billion. During 2014, the company continued to balance its low- income and middle-income and residential housing production. The latter segment, which carries better margins, represented 52.1% of total units sold in the year (or 9,660 units), similar to the 50.7% registered in 2013. Stable Margins and Low Interest Coverage: Javer's Fitch Calculated EBITDA for 2014 was MXN898 million, a 13% increase when compared to MXN795 million in 2013. The company's interest coverage levels are low with ratios around 1.5x. According to Fitch's calculations FFO interest coverage ratio was 1.5x at the end of 2014 and 1.3x at the end of 2013. Fitch's expectation is that this ratio will improve slightly at levels around 1.8x in 2015 due to higher FFO generation and stable FX rate. EBITDA/gross interest expense ratio was 1.6x at the end of 2014 and 2013. Javer's EBITDA margins have remained stable during the last three years reaching 14.8%, 14.7% and 14.3% during 2014, 2013 and 2012, respectively; however, these levels are lower than the average of 21.2% during 2008-2011. This margin compression reflects the decision to avoid speculative land reserve acquisitions that usually allowed the company to have higher gross margins, as well as a competitive business environment. The ratings incorporate the expectation that the company's EBITDA margin will remain at around 14.5% during 2015, as a result of Javer's strategy towards increased production of affordable entry level housing, which traditionally carries lower margins. Refinance Need in Mid-term: Javer has a manageable debt amortization schedule with no material debt maturities during the upcoming years. Javer's cash position as of Dec. 31, 2014 was MXN1.308 billion. This level of cash was practically the same as of year ended in 2013. The company does not maintain any factoring of its account receivables embedded in its cash position. Javer's debt of MXN4.8 billion consists primarily of its USD320.25 million (MXN4.7 billion) senior unsecured notes due in 2021. Javer's remaining debt balance is comprised of capital leases. Debt payments due in 2015 are approximately MXN26 million. Limited Geographic Diversification: Javer's limited geographic diversification constrains its ratings; around 81% in 2014 and 83% in 2013 of Javer's total revenues were generated in the states of Nuevo Leon and Jalisco. This concentration increases the company's dependence upon specific local and municipal governments to secure land and permits, and translates into exposure to individual market dynamics. The company accounts for 18.8% of mortgages granted by Infonavit in Nuevo Leon and 12.3% in Jalisco. Although this concentration is somehow mitigated through the company's long-term strategy to overweight the affiliated affordable entry level segment with Infonavit as its main mortgage provider, because this segment usually presents more demand and government support programs in the form of subsidies. This strategy has allowed Javer to have a shorter working capital cycle. Stable Business Position, Adequate Land Reserves: Javer consolidated itself as the largest supplier of Infonavit homes in the country at year-end 2014; the company is also the largest supplier of homes titled through Infonavit in the state of Nuevo Leo, Jalisco and Queretaro. Javer had land reserves equivalent to 106,131 homes as of Dec. 31, 2014, which represents about six years of production. Sixty nine percent of Javer's land reserves are inside the urban perimeters established by the new Urban Development and Housing Policy and the rest are land reserves with infrastructure and/or housing already in them that are authorized to operate as housing developments. The breakdown of these reserves between owned and held through land trust agreements is approximately 63%/37%. Javer's strategy is to invest approximately MXN500 million per year in land reserves replacement. KEY ASSUMPTIONS Fitch's key assumptions within our rating case for the issuer include: -- Housing prices increases at or below estimated inflation. -- Low-double digit revenues growth in 2015-2016 then stable at 2016 levels. -- Improvement in adjusted gross leverage towards 4.5x in 2015 reflecting increased EBITDA generation through deployment of new projects in Estado de Mexico and Cancun and a stable debt levels. -- Positive FCF in the range of MXN12 million-MXN77 million per year over the next two years. RATING SENSITIVITIES A negative rating action could be triggered by a deterioration in the company's credit protection measures and cash position due to weak operational results and/or Capex levels substantially above expectations, deterioration in FCF generation driven by increasing working capital needs, and continued decline in EBITDA margins. Total debt to EBITDA consistently above 5.0x will pressure Javer ratings. Conversely, a positive rating action could be triggered by a combination of the following factors: material improvement in FCF generation resulting in consistent generation of positive FCF, stable operational performance, and significant strengthening in the company's leverage and interest coverage metrics. ================================ T R I N I D A D & T O B A G O ================================ CL FIN'L: "New CLF Agreement by March," Chairman Says ----------------------------------------------------- Andre Bagoo at Trinidad and Tobago Newsday reports that a new shareholders agreement governing the relationship between the State and the CL Financial Group is due to be completed by the end of this month, CLF Chairman Gerald Yetming said. "They are still trying to work out the final terms of the new agreement but I am not involved," the report quoted Mr. Yetming as saying. "A team of government officials and shareholders are working on this and they are expecting to have a final agreement by March," Mr. Yetming added. Finance and Economy Minister Larry Howai last year had stated one factor which caused delay in relation to a new agreement had been the pending arbitration on Colonial Life Insurance Company Limited's (CLICO)'s 49 percent and CLF's 7.53 percent shareholding in Methanol Holdings (Trinidad) Limited, according to Trinidad and Tobago Newsday. Under the terms of a Partial Final Award on Remaining Issues delivered by the ICC International Court of Arbitration dated August 24, 2014, the shares were offered for sale to Consolidated Energy Limited and CEL accepted at the price of US$1.175 million (TT$7.4 billion), the report notes. Mr. Yetming confirmed that CLF's subsidiary Home Construction Limited (HCL) was seeking to sell the Holiday Inn Express and Suites Hotel, the report relates. HCL has retained Ernst & Young Services Limited (EYSL) to advice on the divestment of The Holiday Inn Express & Suites Hotel. About CL Financial 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 Oct. 14, 2014, Asha Javeed at Trinidad Express said that Methanol Holdings Trinidad Ltd (MHTL) has officially been sold and the company was handed over to Consolidated Energy Ltd (CEL). The sale was concluded one month after the International Court of Arbitration (ICC) ruled that Colonial Life Insurance Company Limited (Clico) and CL Financial (CLF) must sell its combined 56.53 per cent shareholding in MHTL to CEL for US$1.175 billion (TT$7.485 billion), according to Trinidad Express. The TCRLA on Aug. 6, 2013, citing Caribbean360.com, said that over TT$8 billion worth of Colonial Life Insurance Company Limited's (CLICO) profitable business will be transferred to Atruis, a new company that will be owned by the state. CLICO is a subsidiary of CL Financial Limited. 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, according to Caribbean360.com. Caribbean360.com noted that 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. Caribbean360.com related that at its annual general meeting in Sept. 2013, CL Financial shareholders voted to extend the agreement with Government until August 25, 2014, while Cabinet decides on a new framework accord to recover the debt owed to Government through divestment of CL subsidiaries, including Methanol Holdings, Republic Bank, Angostura Holdings, CL World Brands and Home Construction Ltd. Proceeds from the divestment of these assets will go toward Government's recovery of the billions it pumped into CLICO, Caribbean360.com said. *********** 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 * * *