/raid1/www/Hosts/bankrupt/TCRLA

/raid1/www/Hosts/bankrupt/TCRLA_Public/150518.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 Monday, May 18, 2015, Vol. 16, No. 096 Headlines B E R M U D A COMPASS RE II 2015-1: Fitch Expects to Rate Class 1 Notes 'B+ sf' B O L I V I A BANCO FORTALEZA: Moody's Assigns Global Scale Debt Rating at B2 B R A Z I L BRAZIL: Moody's Says Liquidity Risk Rises for Non-Financial Corp. C A Y M A N I S L A N D S ACADEMY LTD: Creditors' Proofs of Debt Due June 11 BLACK ANT: Creditors' Proofs of Debt Due June 1 BLACK ANT MASTER: Creditors' Proofs of Debt Due June 1 CHINCHON HOLDINGS: Creditors' Proofs of Debt Due June 1 GLOBAL SPORTS: Creditors' Proofs of Debt Due June 10 GREY2O OFFSHORE: Creditors' Proofs of Debt Due June 1 LION ADVENTURE: Creditors' Proofs of Debt Due June 2 QS SINGLE: Creditors' Proofs of Debt Due June 11 RUBICON CAYMAN: Creditors' Proofs of Debt Due May 30 STRATEGIC VALUE: Placed Under Voluntary Wind-Up C H I L E CHILE: Cabinet Shifts Luring ETF Investors to Discounted Stocks LATAM AIR: Profit Surprise Boosts Worst-Performing Airline Shares D O M I N I C A N R E P U B L I C * DOMINICAN REPUBLIC: World Bank Helps Cities Boost Transparency M E X I C O CHIHUAHUA: Moody's Affirms Ba2 Global Scale Issuer Rating P E R U PERU: Moody's Says Liquidity Risk Up for Non-Financial Cos. T R I N I D A D & T O B A G O TRINIDAD & TOBAGO: Financial Crisis Plan Coming TRINIDAD & TOBAGO: Loses $3 Billion in Oil Revenue X X X X X X X X X * Unemployment Rate in Latin America, Caribbean Could Rise This Yr * BOND PRICING: For the Week From May 11 to May 15, 2015 - - - - - ============= B E R M U D A ============= COMPASS RE II 2015-1: Fitch Expects to Rate Class 1 Notes 'B+ sf' ----------------------------------------------------------------- Fitch Ratings expects to rate the Principal At-Risk Variable Rate Notes issued by Compass Re II Ltd., an exempted special purpose insurer in Bermuda, as: -- Series 2015-1 Class 1 Principal At-Risk Variable Rate Notes expected maturity Dec. 8, 2015; 'B+ sf'; Outlook Stable. These are zero-coupon notes and will be offered at a discount to the Original Principal Amount. The amount will be determined by the Ceding Insurer at closing. TRANSACTION SUMMARY The Notes provide reinsurance protection to various insurance company subsidiaries and affiliates of American International Group, Inc. (AIG; rated 'A-'; Outlook Positive by Fitch). The Notes are exposed to Windstorms intersecting with Boundaries along the U.S. coastline ranging from approximately Brownsville, TX to Nantucket, MA, as reported by the National Hurricane Center (or successor organization). The trigger is a per occurrence event based on a parametric index. With a parametric index, noteholders are exposed to basis risk that the Event Payment Amount may not be related to the actual claim experience of AIG. The Windstorm Parameters of latitude and longitude at landfall and radius determine the Parameters X and Y used in calculating the Event Index Value. The Event Index Value is a mathematical formula that multiplies the Parameter X by the Maximum Sustained Wind Speed to the Parameter Y exponent. If the wind speed and radius are not available at landfall, then the largest of the reading just before and after making landfall will be used. If the Windstorm intersects multiple Boundaries, the respective Event Index Values will be summed to determine the Event Percentage (or the amount to be paid to the Ceding Insurer). There is a complicated linear interpolation formula, which is easily traceable in a spreadsheet format. Noteholders are exposed to principal loss if the Event Index Value exceeds 100.0 and face total principal loss if the Event Index Value reaches 150.0. Assuming maximum sustained wind speeds of 100 mph and a 100 mile radius, the Notes would be triggered if a wind storm crosses certain parts of New Jersey coastline, but no other areas along the U.S. coastline. Increasing the wind speed to 130 mph while maintaining the 100 mile radius, the Notes could be vulnerable if landfall occurred to certain parts of the Texas, Florida, Virginia and New York coastline. A category 4 hurricane is defined with wind speeds in excess of 130 mph. Fitch reviewed data for certain notable events as identified by the National Hurricane Center data (HURDAT2). This dataset lists hurricane events from 1851 to 2014, though information regarding radius size is nearly non-existent prior to 2004. For historical context, Super storm Sandy had an Event Index Value of 25.275, Hurricane Rita was 21.642 and Hurricane Frances (which had two landfalls) was 3.034. Hurricane Camille (1969) had a calculated Event Index Value of 61.135 based on an assumption that the radius was 90 miles. There have been 21 recorded Category 4 and 5 land falling hurricanes since 1851. The risk period is the six month period from June 1, 2015 to Nov. 30, 2015. The notes may be extended to June 8, 2016 if certain qualifying events occur, or at the discretion of AIG. However, the Notes are not exposed to any further catastrophe events during this extension. The Notes may be redeemed at any time due to regulatory or tax law changes or partially by AIG during the extension period or under certain Early Redemption Events. The repayment of the notes to the noteholders occurs subsequent to any qualified payments to AIG for covered events. Noteholders have no recourse to AIG. KEY RATING DRIVERS The rating is based on the evaluation of the natural catastrophe risk, the counterparty risk of AIG and the credit risk of the collateral assets. The natural catastrophe risk represents the weakest link and currently drives the rating of the Series 2015-1 Class 1 Notes. The rating analysis in support of the evaluation of the natural catastrophe risk is highly model-driven. As with any model of complex physical systems, particularly those with low frequencies of occurrence and potentially high severity outcomes, the actual losses from catastrophic events may differ from the results of simulation analyses. Fitch is neutral to any of the major catastrophe modeling firms that is selected by the issuer to provide the modeling analysis, and thus Fitch did not include any explicit margins or qualitative haircuts to the probability of loss metric provided by the modeling firm. AIR Worldwide Corporation (AIR), one of the leading natural catastrophe modelers for the industry, simulated 10,000 wind storm events incorporating the Event Index Value (AIR also acts as the calculation agent if an actual wind storm occurs). Loss estimates were calculated using version 16.0 of the AIR U.S. Hurricane Model as implemented in Touchstone 2.0.2. The model produced an attachment probability of 2.41% which corresponds to an implied rating of 'B+' according to our calibration table as found in Fitch's Insurance Linked Securities Methodology. A stress test using the Warm Sea Surface Temperature Conditioned Catalog had an attachment probability of 2.67% which would not alter the implied rating. The expected loss is 1.77% and 1.94%, respectively, for the two catalogs. AIR is expected to release an updated version of Touchstone (Touchstone 3.0) in the summer of 2015. There was no indication if this model change would have a positive or adverse effect on the attachment probability. Results from other possible modelers or from AIG were not provided. The ceding insurer subsidiaries of AIG (IDR: 'A-' Outlook Positive) are responsible for making a Premium Payment within ten business days following the Issuance Date such that the sum of that payment plus the proceeds received on the Notes offered equals the Original Principal Amount. These subsidiaries are also responsible for Additional Premiums that are used to pay certain expenses of the Issuer. AIG has been designated as a systemically important financial institution and identified as a global systemically important insurer. Thus, noteholders are exposed to the counterparty risk of the AIG ceding insurers for this payment or potential regulatory restrictions imposed on AIG or its ceding insurers. Proceeds from this issuance will be held in a reinsurance trust account and used to purchase high-credit-quality money market funds meeting defined eligibility criteria, otherwise funds will be held in cash. Investment yields generated from these permitted investments are passed directly to noteholders and may increase the Repayment Amount above the Notes Offered to note holders. Noteholders are exposed to possible market value risk if the net asset value of a money market fund falls below $1.00. Finally, certain actions may be required if the reinsurance trust account is invested in money market funds and FATCA is deemed to apply in late 2016. RATING SENSITIVITIES This rating is sensitive to the occurrence of a qualifying event(s), the counterparty rating of AIG and the rating on the assets held in the reinsurance trust account. If qualifying covered events occur that cause the Event Index Value to exceed the Attachment Level, Fitch will downgrade the notes reflecting an effective default and issue a Recovery Rating. To a lesser extent, the notes may be downgraded if the money market funds should "break the buck" or the AIG ceding insurers fail to make timely premium payments. Fitch's expected rating is based on a review of a draft Confidential Offering Circular and Confidential Offering Circular Supplement No. 1 (dated May 6, 2015), a Rating Agency Presentation (dated May 6, 2015) and Results of AIR Modeling (dated May 4, 2015) and selected calculations of the Event Index Value. The final rating is contingent upon receipt of signed legal documents pertinent to this transaction that do not materially change what has currently been reviewed. Any changes could lead Fitch to an alternative rating or inability to rate the note. ============= B O L I V I A ============= BANCO FORTALEZA: Moody's Assigns Global Scale Debt Rating at B2 --------------------------------------------------------------- Moody's Latin America Agente de Calificacion de Riesgo assigned B2 global scale and Aa3.bo national scale local-currency ratings to Banco Fortaleza S.A. (Fortaleza)'s new senior debt issuance of Bs. 35 million. The ratings are on review for upgrade. The following ratings were assigned to Banco Fortaleza S.A.: -- Bs. 35 million senior debt issuance: -- Long-Term Global Local Currency Debt Rating: B2 -- Long-Term Bolivia National Scale Local Currency Debt Rating: Aa3.bo The ratings assigned to Fortaleza's new issuance are the same as those assigned to its outstanding debt. Those ratings were placed on review for possible upgrade on March 17th, 2015, following the publication by Moody's Investors Service of its updated bank rating methodology. Moody's ratings reflect Fortaleza's relatively strong capitalization, stable funding profile, and adequate liquidity, offset by rising asset risk and increasing profitability pressures. The review for upgrade will consider the bank's capacity to successfully carry out its strategy of achieving a disciplined loan growth and at the same time maintaining good asset quality, profitability and capital metrics. Fortaleza has a short track record as a commercial bank and a limited market share, with a rapidly growing loan portfolio highly concentrated on microfinance lending. Although Fortaleza's asset quality indicators lag the average for the Bolivian banking system, the bank's non-performing loan ratio remains manageable at 2.6% as of March 2015.It is currently working to shift its portfolio mix towards small and medium sized enterprises (SMEs). While greater diversification would ultimately be credit positive, during the transition period, this shift in strategy exposes the bank to the risk of a deterioration in asset quality. Despite rapid growth, Fortaleza's capital ratios remain strong, with a Tier 1 ratio of 12.1% by March 2015. The bank has reinvested 87.5% of its available earnings over the past year to support its expansion plans. Management has committed to continue this reinvestment policy to sustain the bank's growth prospects. Fortaleza's earning generation capacity has improved lately as a result of an increase in non-interest income, which allowed the bank to post a return on average assets of 1.33% in 2014, higher than the banking system average of 1.23%. However, bottom line earnings continue to be challenged by poor operating efficiency, as the bank's cost to income ratio was nearly 80% as of March 2015. Moreover, Moody's expect profitability to decline going forward due to regulatory changes that will reduce banks' interest margins and increase competition further. The regulatory environment which will affect lenders' earnings power and asset quality is reflected in Bolivia's weak macro profile. The bank is mainly core deposit funded and shows good liquidity indicators, as reflected in its ratio of liquid assets to short term liabilities of almost 85% as of March 2015. Banco Fortaleza S.A. is headquartered in La Paz, Bolivia, and it had assets of Bs. 1.91 billion and equity of Bs. 212 million as of March 2015. =========== B R A Z I L =========== BRAZIL: Moody's Says Liquidity Risk Rises for Non-Financial Corp. ----------------------------------------------------------------- Liquidity risk has increased for Brazilian non-financial corporates over the past year, though funding should remain adequate through mid-2016, Moody's Investors Service says in a new report. Macroeconomic deterioration, lower commodity prices and tighter access to the capital markets have seen the results of many companies lagging. Moody's new report, "Companies Strive to Control Debt as Economy and Currency Stumble," summarizes the liquidity risk of the 47 non-financial, non-utility Brazilian corporate issuers rated B3 and above as of December 2014. "The Brazilian macroeconomic environment has severely eroded since 2014, with inflation accelerating and employment rate looking more fragile," says Assistant Vice President-Analyst, Erick Rodrigues. "Along with a sharp drop in the confidence of consumers and investors, these issues raise doubts about the country's medium- term growth prospects, with companies exposed to the domestic economy and commodity prices the most vulnerable." The percentage of Moody's-rated Brazilian companies with high liquidity risk went to 32% from 19% between 2013 and 2014, says Rodrigues. The oil and gas, protein and agriculture industries together represent just over half of debt maturing by mid-2017, with oil giant Petrobras accounting for about a third of corporate debt maturing by that date and protein producers BRF, JBS and Marfrig Global Foods accounting for most of the debt coming due in the protein and agriculture sector. "About a third of the Brazilian companies we reviewed have high funding risk due to weak cash coverage of short-term debt, a lack of committed credit facilities or likely low cash flow over the next one to two years," Rodrigues says. "Nine companies currently have particularly weak liquidity profiles, including Brasil Pharma, Brookfield Incorporaes and PDG Realty." The Brazilian real is likely to remain weak against the US dollar through at least early 2016, offering a competitive advantage to some export-dependent businesses, Moody's new report says. But the weak real will also force Petrobras to spend more to import the oil necessary to produce gasoline, diesel and other fuels. About 60% of Brazilian companies' total outstanding debt comes from local bank lines or debentures, and the remainder from the international capital markets. ========================== C A Y M A N I S L A N D S ========================== ACADEMY LTD: Creditors' Proofs of Debt Due June 11 -------------------------------------------------- The creditors of Academy Ltd. are required to file their proofs of debt by June 11, 2015, to be included in the company's dividend distribution. The company commenced wind-up proceedings on April 21, 2015. The company's liquidator is: Morval Bank & Trust Cayman Ltd. Telephone: +1 (345) 949-9808 P.O. Box 30622 Grand Cayman KY1-1203 Cayman Islands BLACK ANT: Creditors' Proofs of Debt Due June 1 ----------------------------------------------- The creditors of The Black Ant Credit Fund Limited are required to file their proofs of debt by June 1, 2015, to be included in the company's dividend distribution. The company commenced liquidation proceedings on March 26, 2015. The company's liquidator is: Trevor Kensit 56 Eaton Mews South London, SW1W 9UR United Kingdom c/o Deborah Poole, Appleby P.O. Box 1350 Grand Cayman KY1-1108 Cayman Islands BLACK ANT MASTER: Creditors' Proofs of Debt Due June 1 ------------------------------------------------------ The creditors of The Black Ant Credit Master Fund Limited are required to file their proofs of debt by June 1, 2015, to be included in the company's dividend distribution. The company commenced liquidation proceedings on March 26, 2015. The company's liquidator is: Trevor Kensit 56 Eaton Mews South London, SW1W 9UR United Kingdom Deborah Poole, Appleby P.O. Box 1350 Grand Cayman KY1-1108 Cayman Islands CHINCHON HOLDINGS: Creditors' Proofs of Debt Due June 1 ------------------------------------------------------- The creditors of Chinchon Holdings are required to file their proofs of debt by June 1, 2015, to be included in the company's dividend distribution. The company commenced liquidation proceedings on April 21, 2015. The company's liquidators are: Susan Craig Lorna Carroll CDL Company Ltd. P.O. Box 31106 Grand Cayman KY1-1205 Cayman Islands GLOBAL SPORTS: Creditors' Proofs of Debt Due June 10 ---------------------------------------------------- The creditors of Global Sports Opportunities Ltd are required to file their proofs of debt by June 10, 2015, to be included in the company's dividend distribution. The company commenced liquidation proceedings on April 17, 2015. 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 GREY2O OFFSHORE: Creditors' Proofs of Debt Due June 1 ----------------------------------------------------- The creditors of Grey2o Offshore Fund, Ltd are required to file their proofs of debt by June 1, 2015, to be included in the company's dividend distribution. The company commenced liquidation proceedings on April 14, 2015. The company's liquidator is: Mourant Ozannes Cayman Liquidators Limited c/o Jo-Anne Maher Telephone: (345) 814-9255 Facsimile: (345) 949-4647 94 Solaris Avenue, Camana Bay P.O. Box 1348 Grand Cayman KY1-1108 Cayman Islands LION ADVENTURE: Creditors' Proofs of Debt Due June 2 ---------------------------------------------------- The creditors of Lion Adventure Cayman Limited are required to file their proofs of debt by June 2, 2015, to be included in the company's dividend distribution. The company commenced liquidation proceedings on April 21, 2015. The company's liquidator is: Stuarts Walker Hersant Humphries Telephone: (345) 949 3344 Facsimile: (345) 949 2888 P.O. Box 2510 Grand Cayman KY1-1104 Cayman Islands QS SINGLE: Creditors' Proofs of Debt Due June 11 ------------------------------------------------ The creditors of QS Single Managers SPC are required to file their proofs of debt by June 11, 2015, to be included in the company's dividend distribution. The company commenced liquidation proceedings on April 20, 2015. The company's liquidator is: Peter Goulden Mourant Ozannes Cayman Liquidators Limited Reference: NDL Telephone: (+1) 345 949 4123 Facsimile: (+1) 345 949 4647; or 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 RUBICON CAYMAN: Creditors' Proofs of Debt Due May 30 ---------------------------------------------------- The creditors of Rubicon Cayman Holdings are required to file their proofs of debt by May 30, 2015, to be included in the company's dividend distribution. The company commenced liquidation proceedings on April 20, 2015. The company's liquidator is: Stuart Sybersma c/o Mike Green Deloitte & Touche Citrus Grove Building, 4th Floor Goring Avenue, George Town KY1-1109 Cayman Islands Telephone: +1 (345) 814 2223 Facsimile: +1 (345) 949 8258 STRATEGIC VALUE: Placed Under Voluntary Wind-Up ----------------------------------------------- On April 8, 2015, the sole shareholder of Strategic Value Partners 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: Ogier c/o Justin Savage Telephone: (345) 815 1816 Facsimile: (345) 949-9877 89 Nexus Way, Camana Bay Grand Cayman KY1-9007 Cayman Islands ========= C H I L E ========= CHILE: Cabinet Shifts Luring ETF Investors to Discounted Stocks --------------------------------------------------------------- Eduardo Thomson at Bloomberg News reports that Chile has been luring investors scouring for cheap Latin American stocks over the past month. Now, a new finance minister with Wall Street credentials is giving another reason for buyers to double down on their bets, according to Bloomberg News. Bloomberg News notes that the iShares MSCI Chile Capped exchange- traded fund has received $57 million in funds without a single day of outflows since April 2. In the past week, the ETF had inflows of $13 million, more than any other fund in the region, according to data compiled by Bloomberg. More than half of the past week's inflows came on the day that Rodrigo Valdes, a former economist for Barclays PLC and BTG Pactual, was appointed finance minister to replace Alberto Arenas, who had been at loggerheads with local business executives over the government's economic agenda, Bloomberg News relays. This move has investors anticipating measures that could boost economic expansion, according to Bradford Jones, who manages $150 million in Latin American stocks at Sagil Asset Management, the Bloomberg News discloses. "We're very positive on the appointment," Jones said in a phone interview from London. "We expect this will improve confidence both in Chile and among international investors," Bloomberg News quoted Mr. Jones saying. President Michelle Bachelet's tax and labor reforms had been weighing negatively on the market, Mr. Jones said, Bloomberg News relays. The IPSA benchmark stock index traded at 18.2 times earnings, or 10 percent below its five-year average valuation on May 13, Bloomberg News discloses. The ratio was at 16.4 times on March 10, the lowest since 2011. LATAM AIR: Profit Surprise Boosts Worst-Performing Airline Shares ----------------------------------------------------------------- Eduardo Thomson at Bloomberg News reports that Latam Airlines SA gained the most in almost five years after reporting better-than- forecast operating profit amid a push to reduce costs. The world's worst-performing airline stock in three years climbed 7.3 percent to CPL5,786.2 on May 16 at the close in Santiago, its biggest increase since August 2010, according to Bloomberg News. The rally was the biggest on Chile's benchmark IPSA index, which increased 0.9 percent, Bloomberg News relates. Bloomberg News discloses that the carrier reported that its operating margin widened to 8.1 percent in the first quarter from 3.5 percent a year earlier as operating costs fell 16 percent and crude oil prices declined. Unlike some rivals, it hasn't lowered margin estimates, Citi-Banchile analysts Stephen Trent and Fernan Gonzalez said in a research note, Bloomberg News discloses. "These very strong results are also inconsistent with the market's mysteriously cautious view on the shares," they wrote, reiterating a buy recommendation, Bloomberg News relays. While shares of Latam's peers have posted a 30 percent average annual gain in dollars in the past three years, Santiago-based Latam posted a loss of 23 percent, Bloomberg News notes. Latam's reported operating profit of $233 million, compared with the $214 million average forecast of economists, Bloomberg News relays. The 17 percent depreciation of Brazil's real in the first quarter led to a net loss of $40 million for Latam Airlines, Bloomberg News adds. LATAM Airlines Group S.A. (LATAM Airlines) is a Chilean-based airline holding company formed by the business combination of LAN Airlines S.A. of Chile and TAM S.A. of Brazil in June 2012, which remain operating as two separate brands. LATAM Airlines is the larger airline group in South America with local presence in seven countries (Brazil, Chile, Peru, Ecuador, Argentina, Colombia and Paraguay). The company provides intra-regional and international passenger services and it also has a cargo operation that is carried out through the use of belly space on passenger flights and dedicated freighter service. In 2014, LATAM Airlines generated around USD12 billion in net revenues and carried over 67.8 million passengers and 1.1 million tons. As reported in the Troubled Company Reporter-Latin America on April 6, 2015, Fitch Ratings has downgraded LATAM Airlines Group S.A.'s (LATAM) foreign currency Issuer Default Rating (IDR) to 'BB-' from 'BB'. In addition, Fitch has downgraded TAM S.A.'s (TAM) foreign and local currency IDRs to 'BB-' from 'BB' and its national long-term rating to 'A(bra)' from 'A+(bra)'. =================================== D O M I N I C A N R E P U B L I C =================================== * DOMINICAN REPUBLIC: World Bank Helps Cities Boost Transparency ---------------------------------------------------------------- Dominican Today reports that Dominican Republic's Finance Ministry and the World Bank disclosed the launch of a financial management and municipal information system as part of the Caribbean country's thrust to improve accountability and transparency in its cities. The Finance Minister Simon Lizardo Mezquita launched the Municipal Development Project (PRODE) financed by the World Bank in a ceremony at the Central Bank, where he pledged a "strong commitment to support the sustainability of the effort to consolidate and strengthen the management and accountability of public funds," according to the report. "The Ministry of Finance assumes this important accompaniment to form part of the efforts to consolidate management accountability, oversight of public resources and promote the strengthening of municipalities through higher levels of governance and transparency," the report quoted Mr. Mezquita as saying. The World Bank said the Integrated Financial Municipal Management System (Municipal IFMS) is a cutting-edge software which allows the participating municipalities to record data online, publish data user-friendly, and allow access to information monitoring agents to inform about the local governments' financial management, the report discloses. "With the launch of the municipal IFMS, we expect councils and other municipal bodies to use this tool to improve the quality of municipal services and accountability to the governing bodies in an expeditious, friendly, efficient and reliable manner," said Franklin Labor, head of Territorial Planning and Development (DGODT) of the Economy, Planning and Development Ministry's (MEPYD) PRODEM project, the report notes. "The initiative is based on the cooperation that already exists between bilateral and multilateral agencies members of the Interagency Cluster for Governance and Public Finance, and prominent members of civil society and local authorities," Mr. Labor said, noting that it's also in keeping with pillar 1 of the National Development Strategy (END2030) on strengthening financial management, the report adds. Among the pilot municipalities figure: -- Yamasa, -- Bayaguana, -- Pueblo Viejo, -- Las Matas de Farfan, -- Padre las Casas, -- Sabana Grande de Boya, -- Tamayo, Polo, -- Enriquillo, -- La Cienaga, and -- Paraiso. "The main objective of the initiative is part of the Municipal Development Project (PRODEM) funded by the World Bank, to strengthen the management of local governments and improve municipal services," the statement said, the report relays. Among the speakers in the launch were Ramon Sarante, director of PAFI/SIGEF, and Kelvin Garcia of ONETEL KDK, company that will implement the Municipal IFMS, the report says. The report discloses that the Public Administration minister Ramon Ventura Camejo, Economy Deputy Planning (MEPYD) minister Juan Monegro, World Bank representative McDonald Benjamin and World Bank Senior Financial Management specialist Maritza Rodriguez also attended the launch. =========== M E X I C O =========== CHIHUAHUA: Moody's Affirms Ba2 Global Scale Issuer Rating --------------------------------------------------------- Moody's de Mexico affirmed the A2.mx (Mexico National Scale) and Ba2 (Global Scale, local currency) issuer ratings of the state of Chihuahua. The outlook on the ratings remains negative. The affirmation of the Ba2/A2.mx issuer ratings of the state of Chihuahua takes into consideration some improvement in the state's consolidated financial results. The negative outlook of the ratings reflects that the state continues to face challenges on the expenditure side, which could lead to a deterioration of liquidity levels and increases to debt. In 2013 and 2014, Chihuahua's cash financing requirements were equivalent, on average, to -3.7% of total revenues, compared to - 11.2% registered in 2012. The improvement was driven by measures implemented to increase own-source revenues and control expenditures and were undertaken to comply with the federal government's rationalization plan for Chihuahua. Own-source revenues increased as a result of higher net revenues transferred from the state's toll roads and an increase of salary tax. Chihuahua also benefited from a steady growth of federal transfers, leading to a compound annual growth rate of total revenues equivalent to 10% during the 2010-2014 period. Given the state's operating controls and decrease of capital expenditures, total expenditures grew by a CAGR of 9%. Going forward, Moody's forecasts that Chihuahua will continue to post lower cash financing deficits as expenditure measures consolidate. As a result of the continuation of cash financing deficits and a decrease in total revenues in 2014, the state's debt burden has continued to increase. After the state restructured its debt, net direct and indirect debt was equivalent to 45.1% of total revenue at the end of 2014 compared to a 41.9% registered in 2013. Moody's anticipates that debt levels will remain at around 45% of total revenues, a high level compared to its rated-peers, given that Chihuahua has to comply with a debt limit established by Banobras (Federal Government's development bank). Chihuahua's net direct and indirect debt does not include bonds backed by revenues of the toll roads, which were equivalent to MXN 15.6 billion (outstanding amount) as of December 2014, as the gross revenues from the toll roads, which are not included in Chihuahua's revenues, are sufficient to pay debt service. The negative outlook reflects Moody's view that Chihuahua continues to face challenges which could lead to a financial deterioration. As liquidity levels have improved largely due to one-time measures, the continued presence of cash financing deficits will apply pressure to these levels. Moody's will closely monitor the state's progress as it continues to follow the federal government's rationalization plan to ensure that the improvements are sustainable. Given the negative outlook on the ratings, Moody's does not expect upward pressure on the ratings in the near term. If the state of Chihuahua demonstrates that it can continue to register low cash financing deficits, leading to a stabilization of debt levels and maintenance of positive liquidity position, this could lead to the stabilization of the outlook. A downgrade of the ratings would be likely if Chihuahua fails to implement measures for cutting expenditures resulting in higher than expected cash financing requirements, further increases in debt levels and a deterioration of its liquidity position. The methodology used in this rating was Regional and Local Governments published in January 2013. The period of time covered in the financial information used to determine state of Chihuahua's rating is between Jan. 1, 2010 and Dec. 31, 2014. ======= P E R U ======= PERU: Moody's Says Liquidity Risk Up for Non-Financial Cos. ----------------------------------------------------------- Liquidity risk has increased for Peruvian non-financial, non- utility companies over the past year, Moody's Investors Service says in a new report. Peru's mining-dependent economy looks set for a partial rebound in 2015, but growth will be well off the brisk pace of a couple of years ago, while the depreciation of the nuevo sol is hurting companies' credit quality. Moody's new report, "Liquidity Risk Increasing, but Most Maturities are Still Far in the Future," looks at the liquidity risk of the 16 non-financial, non-utility Peruvian corporate issuers rated by Moody's as of 30 April 2015. "At the end of 2014, 69% of the Peruvian companies we reviewed had high refunding risk, in line with the previous year, while their consolidated short-debt coverage decreased to 1.0 times from 1.7 times," says Vice President -- Senior Analyst, Barbara Mattos. "Meanwhile, the economy expanded just 2.4% last year, well off the 5.8% growth seen in 2013." Eleven of the 16 Peruvian companies had high refunding risk at the end of last year, with some combination of insufficient cash to cover short-term debt maturities, negative free cash flow or a lack of committed credit facilities to meet maturities through mid-2017, Mattos says. Nevertheless, none have significant refinancing peaks until 2019, and for most there are also mitigating circumstances, including good capital market access, support from parent entities and solid operations. Peruvian corporate debt issuance reached $1.8 billion in 2014, only a slight decline from $2.2 billion in 2013. Hochschild, Minsur, InRetail Consumer and Union Andina de Cementos all issued bonds last year. Meanwhile, the depreciation of the nuevo sol is hurting the credit quality of Peruvian non-financial corporates. "Around 67% of the companies' mostly unhedged debt is denominated in US dollars, while they earn most of their income in local currency," Mattos says. "While a weaker local currency increases the cost of servicing debt and leverage, expansion abroad, dollarized commodity prices and export-heavy business models all ease this risk, particularly for mining companies." ================================ T R I N I D A D & T O B A G O ================================ TRINIDAD & TOBAGO: Financial Crisis Plan Coming ----------------------------------------------- Clint Chan Tack at Trinidad and Tobago Newsday reports that Trinidad and Tobago government is working on a national financial crisis management plan to facilitate electronic transactions conducted at various State departments. Finance Minister Larry Howai made these announcements at the InfoLink Services Limited conference at the Hyatt Regency, Port-of-Spain. Mr. Howai said government is aware of the importance of domestic financial system in lubricating the flow of financial transactions between consumers and producers/retailers, and has begun the process of putting contingency measures in place in the event of any future financial crisis, according to Trinidad and Tobago Newsday. "To this end a National Financial Crisis Management Plan for Trinidad and Tobago is currently under development. The plan seeks to provide an effective regime for the orderly resolution to a crisis faced by any of the financial institutions deemed systemically important and regulated by the Central Bank," the report quoted Mr. Howai as saying. The report discloses Mr. Howai explained the current low interest rate environment has facilitated not only households taking on higher levels of debt, but has also created fertile ground for large non-financial retail store chains to lend to riskier households. "One can surmise that as these retail stores compete for market share in an unregulated environment, there may be greater incentives for these retail stores to underprice risk,", the report quoted Mr. Howai as saying. Mr. Howai added these issues are being addressed because "if these activities remain unregulated they can pose a systemic risk to the domestic financial system." Mr. Howai also expected that the "shadow banking" industry will continue to grow to fill much of the gap in financial inclusion faced by consumers, the report notes. The report relays that Mr. Howai said, "These unregulated business which are not financial organizations but which carry out business of a financial nature need to be quickly identified and the necessary regulatory framework put in place to bring them under the jurisdiction of a regulator." Mr. Howai added the business models used by these shadow banking businesses need to be carefully studied to ascertain the risk they pose to the domestic financial system, the report says. In a statement later in the House, Mr. Howai said regulations laid last week in the House will permit electronic transactions at government offices, the report notes. Responding to a question from Chaguanas West MP Jack Warner, Mr. Howai said it would take between 18 to 24 months to put things in place to facilitate these transactions, the report discloses. Recalling this initiative started in 2008 under the then People's National Movement (PNM) government, Mr. Howai said it is unacceptable that Government to date has not significantly transformed its internal processes to facilitate the use of electronic fund transfers (EFTs), the report notes. According to the report, Mr. Howai explained that the regulations will give the Central Bank "the responsibility for the oversight of payment systems." Mr. Howai also indicated that the Financial Institutions Act will give him the authority to make regulations which govern the transfer of funds by electronic means; prudential criteria and the oversight of payment systems, after receiving recommendations from the Central Bank, the report adds. TRINIDAD & TOBAGO: Loses $3 Billion in Oil Revenue -------------------------------------------------- Clint Chan Tack at Trinidad and Tobago Newsday reports that this country lost approximately TT$3 billion in revenue as a result of the fall in global oil prices from last September to April. Minister of State in the Ministry of Finance, Rudy Indarsingh, made this disclosure as he responded to an urgent question posed by Chaguanas West MP Jack Warner in the House of Representatives. Making references to the figures obtained by the ministry's inland revenue division, Mr. Indarsingh said the overall drop in revenue was estimated to be TT$2,910,116,010, according to Trinidad and Tobago Newsday reports. Mr. Indarsingh told the House this figure was the total variance reported for supplemental petroleum taxes; petroleum profit taxes and the unemployment levy from October 2014 to April 2015, the report says. Those figures were TT$366,144,337; TT$2,359,413,730 and TT$194,557,943 respectively. Mr. Indarsingh said notwithstanding this loss in revenue, Government will proceed with its development plans as previously outlined by Prime Minister Kamla Persad- Bissessar, the report notes. The report discloses, responding to another question from Warner, Mr. Indarsingh reiterated that Government does not plan to write any formal letter of complaint to Moody's Investors Services objecting to its downgrading of credit ratings for the Government, First Citizens Bank, Petrotrin and the National Gas Company (NGC). The report relays that Mr. Indarsingh recalled that Finance Minister Larry Howai previously indicated that "verbal communication and representation" were made to Moody's prior to the downgrade. In response to a third question from Warner about an unoccupied property listed in the 2014 Auditor General's report for which TT$26.6 million in rent was paid from December 12, 2012 to September 30, 2014, Mr. Indarsingh indicated the landlord for that property was GV Holdings, the report notes. Stating the premises are located at Lot #19, 29 and 29A Estate Trace in Barataria, Mr. Indarsingh said the lease was for a period of three years of approximately 117,241 square feet of office space with five floors, the report discloses. Mr. Indarsingh explained the main reason for the delay in occupation was that the building had to be customized and outfitted to meet user specifications, the report relays. Noting the building was leased by the Personnel Department and not the Finance Ministry, Mr. Indarsingh said, "The Personnel Department notes the concern of the Auditor-General on this matter. However, various steps in the process are outside of the control of the Department," the report adds. Mr. Indarsingh added the department was seeking to have the matter finalized, the report relays. ================= X X X X X X X X X ================= * Unemployment Rate in Latin America, Caribbean Could Rise This Yr ------------------------------------------------------------------ The Daily Observer reports that the unencouraging economic outlook for the current year will likely prompt a mild increase in the regional unemployment rate to 6.2% from the 6.0% registered in 2014, according to estimates released by the Economic Commission for Latin America and the Caribbean (ECLAC) and the International Labor Organization (ILO). In a new edition of their joint publication The Employment Situation in Latin America and the Caribbean, both institutions indicate that the 1% average expansion in economic activity forecast for the region will not be enough to reverse the deceleration process that began in 2011, according to the Daily Observer. The stagnation of gross domestic product (GDP) per capita should weaken labor demand and, therefore, the creation of salaried employment, the report notes. For that reason, a decline in the region's urban employment rate -- which refers to the relationship between the employed population and the total number of people who are of working age -- is forecast for a third consecutive year, the report relates. The report says that on a regional level the decline in labor participation -- which is to say, the proportion of the working- age population that is active in the workforce, whether employed or unemployed -- seen in 2014 is not expected to be repeated with the same intensity in 2015, which, coupled with a decrease in the employment rate, should lead to higher open unemployment, similar to the levels seen in 2013, the report relays. "The labor market situation in 2015 is not expected to be particularly conducive to progress in reducing poverty and inequality," Alicia Barcena, ECLAC's executive secretary, and Elizabeth Tinoco, ILO regional director for Latin America and the Caribbean, state in the document's prologue, the report discloses. In effect, ECLAC-ILO's document indicates that during most of the last decade and at the beginning of this current decade, Latin America and the Caribbean made important advances in poverty reduction and income distribution, in a global context characterized by growing inequality, the report notes. The report discloses that these improvements were due to the labor market's positive trends, such as the robust creation of salaried employment and the reduction of gaps in labor income. Other contributing factors included public policies on labor matters (minimum wage, formalization, inspection) as well as non-labor matters (expansion of social protection systems and education), the report relays. The first part of ECLAC-ILO's document analyzes the region's labor performance in 2014 and attributes the decline in the unemployment rate seen last year to the atypical behavior of labor markets in Argentina, Brazil and Mexico, more specifically to the steep fall in their labor participation rates, the report says. In its second section, ECLAC-ILO's document examines the expansion of social protection in the context of high degrees of informality in the region, the report discloses. It contends that, from a rights perspective, the universalization of social protection is essential to helping build societies where equality is the end- goal of development strategies, the report notes. The United Nations organizations indicate that to guarantee universal access it is necessary to integrate contributory and non-contributory components in social protection systems, which entails significant challenges, above all in terms of institutional design and financing, the report adds. * BOND PRICING: For the Week From May 11 to May 15, 2015 -------------------------------------------------------- Issuer Name Cpn Bid Price Maturity Date Country Curr ----------- --- --------- ------------- ------- ---- PDVSA 8.5 56.25 11/2/2017 VE USD PDVSA 8.5 66.7 11/2/2017 VE USD PDVSA 5.25 42.09 4/12/2017 VE USD Venezuela Int'l Bond 12.75 44.7 8/23/2022 VE USD Transocean Inc 6.8 73.8 3/15/2038 KY USD PDVSA 12.75 47.52 2/17/2022 VE USD Venezuela Int'l Bond 11.95 41.95 8/5/2031 VE USD CSN Islands XII Corp 7 70.25 BR USD Banco Mercantil do Brasil SA 9.62 45.5 7/16/2020 BR USD Banco do Brasil SA/Cayman 6.25 68.5 KY USD Transocean Inc 3.8 73.8 10/15/2022 KY USD MIE Holdings Corp 7.5 60.12 4/25/2019 HK USD PDVSA 9 39.5 11/17/2021 VE USD Anton Oilfield 7.5 68.85 11/6/2018 CN USD PDVSA 5.37 31.84 4/12/2027 VE USD PDVSA 6 33.15 5/16/2024 VE USD PDVSA 6 32.24 11/15/2026 VE USD PDVSA 9.75 38.25 5/17/2035 VE USD Schahin II Finance Co SPV Ltd 5.87 60.5 9/25/2022 KY USD Odebrecht Oil & Gas Finance Ltd 7 54.5 KY USD Kaisa Group Holdings Ltd 10.25 57 1/8/2020 CN USD Venezuela Int'l Bond 11.75 41.75 10/21/2026 VE USD Offshore Group Investment Ltd 7.5 57.27 11/1/2019 KY USD PDVSA 5.5 31.5 4/12/2037 VE USD PDVSA 5.12 60.25 10/28/2016 VE USD Kaisa Group Holdings Ltd 9 51.5 6/6/2019 CN USD Cimento Tupi SA 9.75 40 5/11/2018 BR USD Kaisa Group Holdings Ltd 6.87 52.12 4/22/2016 CN CNY Honghua Group Ltd 7.45 53.75 9/25/2019 CN USD Venezuela Int'l Bond 7.75 36.75 10/13/2019 VE USD Venezuela Int'l Bond 9.37 37.9 1/13/2034 VE USD Venezuela Int'l Bond 6 34.75 12/9/2020 VE USD Automotores Gildemeister SA 8.25 40.25 5/24/2021 CL USD Tonon Bioenergia SA 9.25 29.75 1/24/2020 BR USD Gol Finance 8.75 68.4 BR USD MIE Holdings Corp 6.87 68 2/6/2018 HK USD Venezuela Int'l Bond 9 37.1 5/7/2023 VE USD Venezuela Int'l Bond 7 40.95 12/1/2018 VE USD Mongolian Mining Corp 8.87 70 3/29/2017 MN USD USJ Acucar e Alcool SA 9.875 45 11/9/2019 BR USD Venezuela Int'l Bond 9.25 37.4 5/7/2028 VE USD Automotores Gildemeister SA 6.75 34 1/15/2023 CL USD Offshore Group Investment Ltd 7.12 53.95 4/1/2023 KY USD CA La Electricidad de Caracas 8.5 37 4/10/2018 VE USD Kaisa Group Holdings Ltd 8 66.2 12/20/2015 CN CNY Venezuela Int'l Bond 13.62 68 8/15/2018 VE USD Inversiones Alsacia SA 8 67.03 12/31/2018 CL USD Polarcus Ltd 2.87 51.40 4/27/2016 AE USD China Precious Metal Resources Holdings 7.25 49.83 2/4/2018 HK HKD SMU SA 7.75 71.8 2/8/2020 CL USD NQ Mobile Inc 4 65 10/15/2018 CN USD Glorious Property Holdings Ltd 13.25 63.37 3/4/2018 HK USD Schahin II Finance Co SPV Ltd 5.87 60.715 9/25/2022 KY USD BA-CA Finance Cayman Ltd 1.21 61.625 KY EUR Odebrecht Finance Ltd 8.25 74.35 4/25/2018 KY BRL BCP Finance Co 2.10 56.375 KY EUR Polarcus Ltd 8 25.5 6/7/2018 AE USD Newland International Properties Corp 9.5 38.5 7/3/2017 PA USD PSOS Finance Ltd 11.75 73.25 4/23/2018 KY USD BA-CA Finance Cayman 2 Ltd 0.69 60.5 KY EUR Polarcus Ltd 8.73 25 7/8/2019 AE NOK Inversora de Electrica de Buenos Aires SA IEBA 6.5 44.5 9/26/2017 AR USD Tonon Bioenergia SA 9.25 30.35 1/24/2020 BR USD PDVSA 8.5 66.6 11/2/2017 VE USD MIE Holdings Corp 7.5 69.5 4/25/2019 HK USD Banco do Brasil SA/Cayman 6.25 67.25 KY USD General Exploration Partners Inc 11.5 73.5 11/13/2018 CA USD PDVSA 6 32 5/16/2024 VE USD ESFG International Ltd 5.75 0.326 KY EUR USJ Acucar e Alcool SA 9.87 46 11/9/2019 BR USD Odebrecht Oil & Gas Finance Ltd 7 54 KY USD PDVSA 12.75 53.25 2/17/2022 VE USD Automotores Gildemeister SA 6.75 34.5 1/15/2023 CL USD Mongolian Mining Corp 8.87 70.25 3/29/2017 MN USD Automotores Gildemeister SA 8.25 36.31 5/24/2021 CL USD PDVSA 9 37.12 11/17/2021 VE USD Venezuela Government Int'l Bond 13.62 61.88 8/15/2018 VE USD Anton Oilfield Services Group/Hong Kong 7.5 70 11/6/2018 CN USD EDNAR 10.5 84.5 10/9/2017 AR USD Cimento Tupi SA 9.75 48 5/11/2018 BR USD Honghua Group Ltd 7.45 54.75 9/25/2019 CN USD Banco Mercantil do Brasil SA 9.625 42.625 7/16/2020 BR USD PDVSA 9.75 38.7 5/17/2035 VE USD EDNAR 9.75 74 10/25/2022 AR USD Greenfields Petroleum Corp 9 25.05 5/31/2017 US CAD CSN Islands XII Corp 7 70.47 BR USD Gol Finance 8.75 65.875 BR USD Argentina Bocon 21.875 73.73 1/4/2016 AR ARS Newland International Properties Corp 9.5 37.75 7/3/2017 PA USD Venezuela Government TICC Bond 5.25 55.36 3/21/2019 VE USD SMU SA 7.75 72.44 2/8/2020 CL USD Provincia de Tucuman Argentina 0.40 42.7 9/5/2015 AR USD Ruta del Bosque Sociedad Concesionaria SA 6.3 65.67 3/15/2021 CL CLP Cia Cervecerias Unidas SA 4 53.32 12/1/2024 CL CLP Cia Sud Americana de Vapores SA 6.4 54.31 10/1/2022 CL CLP Provincia del Chaco 4 68.01 12/4/2026 AR USD Talca Chillan Sociedad Concesionaria SA 2.75 48.77 12/15/2019 CL CLP Venezuela Government Int'l Bond 7.65 34.5 4/21/2025 VE USD Venezuela Government Int'l Bond 7 35 3/31/2038 VE USD Decimo Primer Fideicomiso de Bonos de Pres 4.54 66.5 10/25/2041 PA USD Venezuela Government Int'l Bond 13.62 66.12 8/15/2018 VE USD Venezuela Government Int'l Bond 8.25 35.4 10/13/2024 VE USD Venezuela Government Int'l Bond 9.25 40.25 9/15/2027 VE USD Empresa de los Ferrocarriles del Estado 6.5 71.4 1/1/2026 CL CLP *********** 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 * * *