/raid1/www/Hosts/bankrupt/TCRLA

/raid1/www/Hosts/bankrupt/TCRLA_Public/150820.mbx T R O U B L E D C O M P A N Y R E P O R T E R L A T I N A M E R I C A Thursday, August 20, 2015, Vol. 16, No. 164 Headlines B A H A M A S BAHA MAR: Opening of Resort to be Delayed Beyond Christmas Season B R A Z I L JALLES MACHADO: S&P Affirms 'BB-' Corp. Rating; Outlook Stable PETROLEO BRASILEIRO: Fuel Unit Sale Approval Was Split PDG REALTY: S&P Lowers CCR to 'CCC-' & Puts on Creditwatch Neg. C A Y M A N I S L A N D S 3G LOW FUND: Shareholder to Hear Wind-Up Report on Aug. 27 BIBBY INTERNATIONAL: Creditors' Proofs of Debt Due Sept. 3 COLORADO SECURITIES: Placed Under Voluntary Wind-Up FIFTH AVENUE: Creditors' Proofs of Debt Due Sept. 23 FIFTH AVENUE GLOBAL: Creditors' Proofs of Debt Due Sept. 23 ISLAND PROPERTY: Placed Under Voluntary Wind-Up NAMBU COMPANY: Creditors' Proofs of Debt Due Sept. 14 RAINBOW BEACH: Creditors' Proofs of Debt Due Sept. 15 SAMPRASS LIMITED: Placed Under Voluntary Wind-Up TIMEPIECE HOLDINGS: Creditors' Proofs of Debt Due Sept. 16 VIRGIL HOLDINGS: Placed Under Voluntary Wind-Up C H I L E CHILE: GDP Grows More Than Expected on Expansionary Policy CHILE: Challenges Persist for Corporates, Fitch Says D O M I N I C A N R E P U B L I C BANCO PERAVIA: Superintendence Defends Handling of Collapse * DOMINICAN REPUBLIC: Exports Fall 16.3% M E X I C O COBRE DEL MAYO: Fitch Cuts Issuer Default Ratings to 'CCC' FRONTIER STAR: Meeting of Creditors Set for Sept. 1 NOGALES MUNICIPALITY: Moody's Changes Outlook & Affirms B2 Rating P U E R T O R I C O ANNA'S LINENS: Lender Says Parties Still Discussing DIP Terms PMC MARKETING: PRASA's Bid to Dismiss Suit Granted PUERTO RICO AQUEDUCT: S&P Rates 2015A Sr.-Lien Revenue Bonds CCC- PUERTO RICO AQUEDUCT: Stabilizing Prices May Lure High-Yield CEFs T R I N I D A D & T O B A G O TRINIDAD & TOBAGO: Bharath Says Forex Woes to Clear Up After Polls X X X X X X X X X LATIN AMERICA: Corporates Under Pressure, Fitch Says - - - - - ============= B A H A M A S ============= BAHA MAR: Opening of Resort to be Delayed Beyond Christmas Season ----------------------------------------------------------------- Tim McLaughlin at Reuters reports that the opening of the $3.5 billion Baha Mar mega-resort in the Bahamas is expected to be delayed beyond the start of the Christmas season, with the developer deep in an escalating legal battle with the Chinese companies that are providing most of the finance and construction work. Even if construction on the unfinished resort resumed this month, there is little chance the project could be completed by mid- December, the start of the high season for Bahamas resorts, according to local contractors who have worked on the project, according to Reuters. They asked not to be named because they are still seeking payment for some of their work, the report notes. Reuters relays that these sources said it would take a least five months to complete the resort, partly because the project has fallen behind on inspections while some key contractors have moved on to other jobs. Baha Mar missed a March 27 opening because of construction delays and dwindling cash, Reuters recalls. Missing the high season, when resorts charge premium prices, would further hurt its finances, the report notes. Sarkis Izmirlian, whose Baha Mar Ltd is developer of the project, is trying to restructure the project's finances in U.S. Bankruptcy Court in Delaware. A Bahamas resident, Izmirlian is the son of Armenian billionaire Dikran Izmirlian who made his fortune in the peanut market. But the Bahamian government, along with China's Export Import Bank and China Construction America (CCA), are trying to block that move as they initiate a separate liquidation proceeding in Nassau. China ExIm has bankrolled most of the project and CCA is the main contractor, the report notes. Baha Mar's legal battle and internal squabbles have roiled the country's fragile economy, Reuters relays. During a July 28 radio interview in the Bahamas, Mr. Izmirlian said Baha Mar could open for the Christmas season, but that window was closing "very rapidly," as legal maneuvers by the Chinese and Bahamas government would only delay an opening, Reuters notes. A lawyer for Baha Mar Ltd told U.S. Bankruptcy Judge Kevin Carey that settlement talks between Izmirlian and the Chinese remain halted, the report relays. With no face-to-face meetings, energy is being put toward the ongoing litigation, said Tyson Lomazow, a lawyer at Milbank Tweed Hadley & McCloy LLP, the report discloses. Baha Mar Ltd declined to comment on the possibility of a Christmas opening, but said in a statement it was trying to get a resolution that would allow an opening as soon as possible, Reuters adds. About Baha Mar Orlando, Florida-based Northshore Mainland Services Inc., Baha Mar Enterprises Ltd., and their affiliates sought protection under Chapter 11 of the Bankruptcy Code on June 29, 2015 (Bankr. D.Del., Case No. 15-11402). Baha Mar owns, and is in the final stages of developing, a 3.3 million square foot resort complex located in Cable Beach, Nassau, The Bahamas. The case is assigned to Judge Kevin J. Carey. The Debtors are represented by Paul S. Aronzon, Esq., and Mark Shinderman, Esq., at Milbank, Tweed, Hadley & McCloy LLP, in Los Angeles, California; and Gerard Uzzi, Esq., Thomas J. Matz, Esq., and Steven Z. Szanzer, Esq., at Milbank, Tweed, Hadley & McCloy LLP, in New York. The Debtors' Delaware counselare Laura Davis Jones, Esq., James E. O'Neill, Esq., Colin R. Robinson, Esq., and Peter J. Keane, Esq., at Pachulski Stang Ziehl & Jones LLP, in Wilmington, Delaware. The Debtors' Bahamian counsel is Glinton Sweeting O'Brien. The Debtors' special litigation counsel is Kobre & Kim LLP. The Debtors' construction counsel is Glaser Weil Fink Howard Avchen & Shapiro LLP. The Debtors' investment banker and financial advisor is Moelis Company LLC. The Debtors' claims and noticing agent is Prime Clerk LLC. =========== B R A Z I L =========== JALLES MACHADO: S&P Affirms 'BB-' Corp. Rating; Outlook Stable -------------------------------------------------------------- Standard & Poor's Ratings Services affirmed its global scale 'BB-' and national scale corporate ratings on Jalles Machado S.A.. The outlook remains stable. The ratings affirmation reflects S&P's expectation that Jalles will continue to operate close to or at full capacity, diluting fixed costs, while it increases its industrial efficiency and maintains capex at maintenance levels. Moreover, the company's cash inflow from the sale of one of its energy cogeneration assets strengthened its cash position and offset its high short term debt. These factors result in gradually higher free operating cash flow generation, enabling Jalles to lower its debt levels and to gradually improve its capital structure, even under persistently low global sugar and ethanol prices, and despite the effects of foreign exchange volatility on its debt. PETROLEO BRASILEIRO: Fuel Unit Sale Approval Was Split ------------------------------------------------------ Juan Pablo Spinetto at Bloomberg News reports that Petroleo Brasileiro SA's board authorized the sale of a 25 stake in its fuel distribution business at a meeting in which the chairman voted against the proposal, signaling strategy divergences at the state-controlled producer. Murilo Ferreira, who was appointed chairman in April, said Petrobras should first hire retail specialists to design a new business plan for Petrobras Distribuidora SA to improve its performance before divesting a stake, the producer said in a filing, according to Bloomberg News. Bloomberg News notes that the sale was also opposed by director Deyvid Bacelar on the grounds of unfavorable market conditions. The Rio de Janeiro-based company is planning the sale as part of a cost-cutting and divestment strategy at a time when a collapse in oil prices undermines values and the resources of would-be buyers, Bloomberg News relays. Crude has lost more than half its value in the past year, with Brent falling below $50 a barrel, Bloomberg News discloses. The fuel unit, known as BR, is Latin America's largest distributor and marketer of petroleum derivatives and biofuels. The company was valued by banks at between BRL30 billion ($8.6 billion) and BRL40 billion, a person with direct knowledge of the matter told Bloomberg earlier this month, asking not to be named because talks are private, Bloomberg News notes. BR controls the largest gasoline station network in Brazil, with about 8,000 units and more than 1,000 convenience stores. It also sells fuels including diesel and ethanol. * * * As reported in the Troubled Company Reporter-Latin America on Aug. 13, 2015, Moody's Investors Service affirmed all ratings for Petroleo Brasileiro S.A. (Petrobras) and ratings based on Petrobras' guarantee. This includes the affirmation of Petrobras' Ba2 senior unsecured debt rating. The company's b2 baseline credit assessment (BCA) is unchanged. The outlook is stable for Petrobras and its guaranteed debt. PDG REALTY: S&P Lowers CCR to 'CCC-' & Puts on Creditwatch Neg. --------------------------------------------------------------- Standard & Poor's Ratings Services lowered its global scale corporate credit rating on PDG Realty S.A. Empreendimentos E Participacoes (PDG) to 'CCC-' from 'B-'. In addition, S&P lowered its national scale rating to 'brCCC-' from 'brB-' on the company. At the same time, S&P lowered the issue-level rating on PDG's secured debt to 'brCCC' from 'brB' the issue-level rating on its unsecured debt to 'brCCC-' from 'brB-'. S&P also placed all ratings on CreditWatch negative. The downgrade follows PDG's announcement that it has started a process to restructure its debt. The company hired Rothschild to work on this process, and it expects to renegotiate terms and conditions with several banks over the next few months. The debt restructuring process may result in a distressed exchange if investors receive less than the original promise. A distress exchange could be characterized by: -- The combination of any cash amount and principal amount of new securities offered is less than the original par amount; -- The interest rate is lower than the original yield; -- The new securities' maturities extend beyond the original ones; -- The timing of payments is slowed (e.g., zero-coupon from quarterly paying, or bullet from amortizing); or -- The debt seniority ranking is altered to more junior. ========================== C A Y M A N I S L A N D S ========================== 3G LOW FUND: Shareholder to Hear Wind-Up Report on Aug. 27 ---------------------------------------------------------- The shareholder of 3G Low Volatility Fund Partners Ltd. will hear on Aug. 27, 2015, at 9:00 a.m., the liquidators' report on the company's wind-up proceedings and property disposal. The company's liquidators are: E. Andrew Hersant Christopher Humphries Stuarts Walker Hersant Humphries 36A Dr. Roy's Drive, George Town P.O. Box 2510 Grand Cayman KY1-1104 Cayman Islands Telephone: (345) 949 3344 Facsimile: (345) 949 2888 BIBBY INTERNATIONAL: Creditors' Proofs of Debt Due Sept. 3 ---------------------------------------------------------- The creditors of Bibby International Services (Cayman Islands) Limited are required to file their proofs of debt by Sept. 3, 2015, to be included in the company's dividend distribution. The company commenced wind-up proceedings on July 22, 2015. The company's liquidator is: David Griffin c/o Kayla Anderson FTI Consulting (Cayman) Limited 2D Landmark Square, 64 Earth Close P.O. Box 30613 Grand Cayman KY1-1203 Cayman Islands Telephone: +1 (345) 743 6830 COLORADO SECURITIES: Placed Under Voluntary Wind-Up --------------------------------------------------- On July 23, 2015, the sole shareholder of Colorado Securities 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 P.O. Box 694 Grand Cayman Cayman Islands Telephone: 949 8666 Facsimile: 949 0626 FIFTH AVENUE: Creditors' Proofs of Debt Due Sept. 23 ---------------------------------------------------- The creditors of Fifth Avenue Value Creation Offshore Fund Ltd. are required to file their proofs of debt by Sept. 23, 2015, to be included in the company's dividend distribution. The company commenced liquidation proceedings on July 21, 2015. The company's liquidators are: Jacqueline Stirling Ian Morgan Bessemer Trust Company (Cayman) Limited Telephone: (345) 949-6674 Facsimile: (345) 945-2722 P.O. Box 2254 Grand Cayman KY1-1107 Cayman Islands FIFTH AVENUE GLOBAL: Creditors' Proofs of Debt Due Sept. 23 ----------------------------------------------------------- The creditors of Fifth Avenue Global Equity Offshore Fund Ltd. are required to file their proofs of debt by Sept. 23, 2015, to be included in the company's dividend distribution. The company commenced liquidation proceedings on July 21, 2015. The company's liquidators are: Jacqueline Stirling Ian Morgan Bessemer Trust Company (Cayman) Limited Telephone: (345) 949-6674 Facsimile: (345) 945-2722 P.O. Box 2254 Grand Cayman KY1-1107 Cayman Islands ISLAND PROPERTY: Placed Under Voluntary Wind-Up ----------------------------------------------- At an extraordinary general meeting held on July 21, 2015, the shareholder of Island Property Inc 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 P.O. Box 694 Grand Cayman Cayman Islands Telephone: 949 8666 Facsimile: 949 0626 NAMBU COMPANY: Creditors' Proofs of Debt Due Sept. 14 ----------------------------------------------------- The creditors of Nambu Company Limited are required to file their proofs of debt by Sept. 14, 2015, to be included in the company's dividend distribution. The company commenced liquidation proceedings on July 17, 2015. The company's liquidator is: Lion International Management Limited P.O. Box 71 Craigmuir Chambers Road Town, Tortola British Virgin Islands c/o Philip C Pedro HSBC International Trustee Limited Compass Point Bermudiana Road Hamilton HM 11 Bermuda Telephone: (441) 299-6482 Facsimile: (441) 299-6526 RAINBOW BEACH: Creditors' Proofs of Debt Due Sept. 15 ----------------------------------------------------- The creditors of Rainbow Beach Ltd. are required to file their proofs of debt by Sept. 15, 2015, to be included in the company's dividend distribution. The company commenced liquidation proceedings on July 21, 2015. The company's liquidator is: Lion International Management Limited P.O. Box 71 Craigmuir Chambers Road Town, Tortola British Virgin Islands c/o Philip C Pedro HSBC International Trustee Limited Compass Point Bermudiana Road Hamilton HM 11 Bermuda Telephone: (441) 299-6482 Facsimile: (441) 299-6526 SAMPRASS LIMITED: Placed Under Voluntary Wind-Up ------------------------------------------------ On July 21, 2015, the sole shareholder of Samprass Limited resolved to voluntarily wind up the company's operations. The company's liquidators are: Probitas Limited Equitas Limited Clifton House 75 Fort Street P.O. Box 1350 Grand Cayman KY1-1108 Cayman Islands TIMEPIECE HOLDINGS: Creditors' Proofs of Debt Due Sept. 16 ---------------------------------------------------------- The creditors of Timepiece Holdings Limited are required to file their proofs of debt by Sept. 16, 2015, to be included in the company's dividend distribution. The company commenced liquidation proceedings on July 23, 2015. The company's liquidator is: Mufeed Rajab c/o Dominique Massias Telephone: (345) 949 5122 Facsimile: (345) 949 7920 P.O. Box 1111 Grand Cayman KY1-1102 Cayman Islands VIRGIL HOLDINGS: Placed Under Voluntary Wind-Up ----------------------------------------------- On July 22, 2015, the sole shareholder of Virgil Holdings 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: Commerce Corporate Services Limited P.O. Box 694 Grand Cayman Cayman Islands Telephone: 949 8666 Facsimile: 949 0626 ========= C H I L E ========= CHILE: GDP Grows More Than Expected on Expansionary Policy ---------------------------------------------------------- Javiera Quiroga at Bloomberg News reports that Chile's economy grew more than analysts forecast in the second quarter fueled by a pick-up in consumer demand as the central bank pursues the most expansionary monetary policy in the Americas. Gross domestic product grew 1.9 percent from the year earlier, the central bank said, compared with the 1.7 percent medium estimate of 23 economists surveyed by Bloomberg. From the previous quarter, GDP was unchanged. Chile has the lowest real interest rates among inflation-targeting central banks in the Americas and Europe outside of war-ravaged Ukraine and recession-hit Russia, as the economy remains weak, according to Bloomberg News. The expansionary monetary policy and increased public spending helped domestic demand rise 2 percent in the second quarter from the year earlier, up from 1.3 percent in the previous three months, Bloomberg News notes. Bloomberg News relates that the "figures confirm that the recovery is still sluggish, but recent industrial production and retail sales data suggest that the underlying trend remains positive," Andres Abadia, senior international economist at Pantheon Macroeconomics Ltd., said in a note to clients. The central bank kept its benchmark rate at 3 percent last week. The rate is 1.6 percentage points below inflation, compared with 0.3 point in Peru and close to zero in Colombia, Bloomberg News notes. In Mexico, the key rate is 0.3 point above inflation and in Brazil the differential is 4.7 points, Bloomberg News says. Manufacturing Gain Analysts surveyed by Bloomberg forecast Chile will grow 2.6 percent this and for Latin America as a whole to expand 0.1 percent, Bloomberg News relays. Bloomberg News discloses that Chilean growth picked up toward the end of the second quarter. Manufacturing unexpectedly rose 1.7 percent in June from the year earlier, while retail sales gained faster than expected and copper production was the highest since January, Bloomberg News notes. An 18 percent slump in the peso against the dollar in the past year has helped some industries remain competitive, while the unemployment rate has also risen less than analysts expected, sustaining domestic demand, Bloomberg News relays. The peso fell 1.3 percent to 698.99 to the dollar Tuesday, Aug. 18 as the price of copper, which accounts for more than half of Chilean exports, tumbled to $2.28 per pound, the lowest since 2009, Bloomberg News notes. "Downside risks to growth predominate," Mr. Abadia said. "Copper prices have fallen massively in recent months," Mr. Abadia added. Investment fell 3 percent in the second quarter from the year earlier, after contracting 1.9 percent in the previous three months, the central bank said, Bloomberg News discloses. "This is particularly worrisome as investment has been the main drag on economic activity in the current cycle, and is not showing any signs of stabilization yet," Mr. Abadia added. CHILE: Challenges Persist for Corporates, Fitch Says ---------------------------------------------------- Chilean corporates face challenging conditions due to weak macroeconomic conditions, lower commodity prices, and aggressive capex plans financed using debt, according to Fitch Ratings' Chilean Corporate Outlook Report. "Credit metrics continue to deteriorate in Chile. Approximately 15% of the corporates have Negative Rating Outlooks," according to Alejandra Fernandez, a Director at Fitch. "Of the four issuers with Negative Outlooks: GeoPark and CAP are under enormous pressure due to low commodity prices, Masisa's results are suffering because of weak conditions in Brazil, Venezuela and Argentina, while Entel's leverage has increased significantly due to its aggressive investments in Peru." Leverage has increased for the majority of the 28 Chilean corporates with international ratings over the past few years. As of March 31, 2015, the median net debt/EBITDA ratio was 3.5x. This ratio compares with 2.4x in 2011. Negative operating cash flow trends have been a key driver of higher leverage. The cash flow from operations of these issuers has deteriorated by double digits since 2012. Another key contributor to rising debt levels has been debt-funded M&A activity, which has expanded the presence of many corporates in Peru, Colombia and Brazil. Among these countries, the investments in Brazil remain as pressure points for Chilean corporates. Among the 10 issuers with operations in Brazil, Masisa remains in the weakest position, followed by Latam. Andina is also expected to come under pressure from negative consumer trends in that market. Positively, foreign exchange risk is largely manageable for the 28 Chilean corporates in aggregate. Derivatives are common and issuers can find instruments that match the terms of the bonds. Issuers have done a reasonable job balancing the currency of their debt versus the currency of their cash flow. =================================== D O M I N I C A N R E P U B L I C =================================== BANCO PERAVIA: Superintendence Defends Handling of Collapse ----------------------------------------------------------- Dominican Today reports that the Superintendence of Banks states that it has acted and managed the Banco Peravia collapse transparently and firmly and with strict adherence to the Monetary and Financial Law 183-02 and its application regulation, with a view to protecting the rights of account holders and the wellbeing of the national financial system. In a communique, it declares that it has presented a formal criminal lawsuit against 17 individuals and that it is still actively awaiting the conclusion of the investigation being carried out by the National District Prosecutor's Office with a view to proceeding against all parties deemed to have any degree of responsibility in the case, according to Dominican Today. In response to the information based on an interrogation conducted by prosecutors with Natacha Gabriela Castillo, suggesting that "Mr. Jos‚ Luis Santoro sent the sum of RD$200,000 to an employee identified as Iromi Castro, via a messenger under the category of expenses," the Superintendence stated that Mr. Heiromy Castro had served as director of the Asset Laundering and Financial Crimes Prevention Department, and that he was removed from the institution on July 10th 2015 for reasons not connected with the Banco Peravia case, the report notes. The communique adds that the Superintendence was not aware that Heiromy Castro had held any meetings with Jose Luis Santoro, or that he had received RD$200,000, the report relays. * DOMINICAN REPUBLIC: Exports Fall 16.3% ---------------------------------------- Dominican Today reports that in contrast with the recent figures supplied by the Central Bank of the Dominican Republic, the Economic Commission for Latin America and the Caribbean (ECLAC) reports that during this year's first quarter, exports from the Dominican Republic have declined by 16.3% compared to the same period in 2014. The regional body adds that this decrease was accompanied by a 21.6% growth in imports during the period in question, according to Dominican Today. According to ECLAC, in monetary terms the country exported US$1.9 billion worth of goods between January and March 2015, while imports reached US$4.017 billion, a deficit of US$2.025 billion, the report adds. =========== M E X I C O =========== COBRE DEL MAYO: Fitch Cuts Issuer Default Ratings to 'CCC' --------------------------------------------------------- Fitch Ratings has downgraded the long-term foreign and local currency Issuer Default Ratings (IDRs) of Cobre del Mayo S.A. de C.V. (CdM) to 'CCC' from 'B', and the rating for its senior unsecured 10.75% notes due 2018 to 'CCC/RR4' from 'B/RR4'. CdM's national rating has also been downgraded to 'CCC(mex)' from 'BBB- (mex)'. KEY RATING DRIVERS Elevated Unit Costs: CdM encountered a number of operational issues since the second half of 2014 that have lowered copper production and increased unit costs from Fitch's previous expectations. Production issues include greater levels of altered ore, slowing down production of copper cathodes resulting in higher production costs on a per unit basis. During the first quarter of 2015 (1Q15), the company's C1 cost of production increased to $2.40/lb of copper compared to $2.08/lb in 1Q14. During this period, copper prices declined significantly to between $2.40/lb-$2.30/lb currently from around $3.10/lb on average in 2014, exacerbating operational challenges. Fitch's mid-cycle price assumption for copper during 2015 and 2016 is $2.72/lb on average, rising to $2.95/lb in 2017 and beyond. High Leverage Expected in 2015: Fitch's base case for CdM indicates EBITDA generation in the region of $26 million in 2015 representing a significant decline when compared to over $80 million in previous expectations adjusting for revised prices for copper of $2.72/lb for the year. The company's EBITDA was $64 million in 2014 and $92 million in 2013. The year-on-year decline in EBITDA was attributable to copper cathode production decreasing to 75.5 tonnes per day (tpd) in 2014 compared to 83.3 tpd in 2013 while average realized copper prices to fell $3.21/lb from $3.31/lb. Production issues that materialized during the second half of 2014 (2H14) are in the process of being resolved by the company with improvement expected in 2H15. Costs are expected to reduce in-line with a return to CdM's installed copper cathode production capacity of around 87 tpd from 70.2 tpd achieved during 1Q15. As a result of these issues, CdM's total debt to EBITDA ratio is expected at above 9x in 2015, declining to below 5.0x in 2016 and around 3.0x in 2017 as production levels recover. Shareholder Support Necessary in 2015: CdM's parent companies, Frontera Copper Corporation, S.A.P.I. de C.V. (FCC), Frontera Cobre del Mayo Mexico S.A. de C.V. (FCDM) and Lawrie Associates LLP, have demonstrated commitment to CdM's capital structure while it continues to invest in maximizing production through equity contributions totalling over $37 million over the three year period spanning 2012 to 2014. Fitch's base case indicates further shareholder contributions may be required in 2015 to aid CdM in making its November coupon payment on the 10.75% senior unsecured notes due 2018, as it resolves its operating and production issues. The shareholders' renegotiated the announced acquisition of the common shares of Kupari Holdings (KH) following the decline in copper prices resulting in CdM now holding 40% of the total share capital of KH, with CdM accounting for its participation using the equity method. Subsequently, KH, Kupari Metals S.A. and Bi Metals Mexico S. de R.L. de C.V. each executed supplemental indentures whereby they became additional guarantors of CdM's senior unsecured notes. KEY ASSUMPTIONS Fitch's key assumptions within the rating case for the issuer include: -- Copper price of $2.72/lb in 2015 and 2016, increasing to $2.95/lb in 2017. -- C1 cash cost of $2.26/lb in 2015 and between $1.80/lb to $2.00/lb during 2016 to 2018. Prior expectations for cash costs were around $1.60/lb from 2015-2018. -- Copper sold of approximately 28,600 tonnes in 2015, 32,500 tonnes in 2016 and 31,500 tonnes in 2017. RATING SENSITIVITIES Refinancing Strategy: Fitch's base case indicates that CdM will likely experience a challenging operating scenario during 2015 and 2016 due to its third-quartile cost of production combined with a period of low copper prices. Fitch's previous expectations for CdM indicated a gradual transition to a second quartile producer of copper. Ongoing support from shareholders may be necessary to ensure future interest payments are made on time over the next 18 to 24 months, a scenario that may result in difficulty refinancing CdM's notes due 2018. Ratings could be downgraded further should operating unit costs remain elevated with liquidity insufficient and shareholder support not be forthcoming over this period. A ratings upgrade is dependent upon the company significantly lowering its C1 production costs to below $2/lb on a sustained basis, demonstrating improved ongoing liquidity along with proactive initiatives to secure funds for refinancing CdM's 10.75% notes due 2018. LIQUIDITY Liquidity Concern: CdM's cash and marketable securities were $18 million as of March 31, 3015 compared to interest expense of $25 million and expected capex of around $28 million due during the year. CdM may require additional liquidity support to bridge the gap between lower cash flow generation and its various financial obligations during the year. Fitch's base case indicates low cash flow from operations (CFFO) of around $16 million and FCF of negative $11 million in 2015. The company is on track to resolve its production issues and should receive additional cost relief from the continued depreciation in the Mexican Peso. Fitch expects CdM's EBITDA to recover to over $50 million, CFFO to over $30 million and FCF to $18 million in 2016 as production volumes increase to 89 tpd. Higher Refinancing Risk: CdM's 10.75% senior unsecured $217 million notes are due on Nov. 15, 2018 and comprise approximately 90% of total debt as of March 31, 2015 with the remaining debt mostly related to capital leases. The company repurchased $7.8 million of the notes during March 2015 decreasing the outstanding amount from the $225 million originally issued and proportionally lowering its interest payment going forward. Lower copper prices and anticipated higher interest rates may possibly complicate the refinancing process. FULL LIST OF RATING ACTIONS Fitch has downgraded the following ratings: Cobre del Mayo S.A. de C.V. -- Long-term foreign currency IDR to 'CCC' from 'B'; -- Long-term local currency IDR to 'CCC' from 'B'; -- Senior unsecured 10.75% notes due 2018 to 'CCC/RR4' from 'B/RR4'; -- National long-term rating to 'CCC(mex)' from 'BBB-(mex)'. FRONTIER STAR: Meeting of Creditors Set for Sept. 1 --------------------------------------------------- The meeting of creditors of Frontier Star LLC and Frontier Star CJ LLC is set to be held on Sept. 1, 2015, at 9:00 a.m., according to a filing with the U.S. Bankruptcy Court in Arizona. The meeting will be held at the US Trustee Meeting Room, Suite 102, 230 N. First Avenue, in Phoenix, Arizona. The court overseeing the bankruptcy case of a company schedules the meeting of creditors usually about 30 days after the bankruptcy petition is filed. The meeting is called the "341 meeting" after the section of the Bankruptcy Code that requires it. A representative of the company is required to appear at the meeting and answer questions under oath. The meeting is presided over by the U.S. trustee, the Justice Department's bankruptcy watchdog. About Frontier Star Guadalupe, Arizona-based Frontier Star LLC and Frontier Star CJ LLC are owned by three grandchildren of Carl Karcher, who founded the fast-food chain. The grandchildren include the LeVecke siblings Carl, Margaret and Jason, who is listed as chief executive officer/manager of both companies. The LeVecke siblings had more than 130 Carl's Jr. and Hardee's franchises in seven states and Puerto Vallarta, Mexico, as of late 2013, according to an Arizona Republic article that announced the grand opening of a new sports-themed Carl's Jr. restaurant in Glendale. NOGALES MUNICIPALITY: Moody's Changes Outlook & Affirms B2 Rating ----------------------------------------------------------------- Moody's de Mexico changed the outlook of the Municipality of Nogales to negative from stable. At the same time, the issuer ratings were affirmed at B2/Ba1.mx RATINGS RATIONALE RATIONALE FOR RATING AFFIRMATION The affirmation of Nogales' ratings reflects the extremely high debt levels held by the municipality. In 2014, Nogales' debt represented 112.6% of operating revenues, the highest level among Mexican municipalities rated by Moody's. The ratings also reflect the municipality's deteriorating own-source revenues, which decreased at a compound annual growth rate (CAGR) of 8% between 2010 and 2014. This has resulted in a deterioration of Nogales' financial results. Nogales' gross operating balance has passed from 0.9 to -14.3% over the same period, with the latter level broadly in line with Mexican municipalities rated in the B category. RATIONALE FOR THE NEGATIVE OUTLOOK The negative outlook reflects the likelihood that own-source revenues will continue deteriorating over the short-term, in part due to the weak tax collection, which will result in further weakening of Nogales' financial metrics. The change in outlook is also a reflection of Nogales' extremely weak governance and transparency practices, which result in little visibility over the municipality's short-term financial strategy. Although Nogales registered a cash position of MXN 86 million at the end of 2014, we anticipate that this cash will be fully used in 2015, which will increase the likelihood of Nogales contracting short-term debt by the end of 2015. The expiration of the grace period in January for Nogales' long-term debt will put additional pressure on the municipality's finances as it begins to repay principal. WHAT COULD CHANGE THE RATING UP/DOWN Given the negative outlook and Moody's perspective of continuous revenue decline, an upgrade in the next 12 to 18 months is unlikely. However, the outlook could be stabilized if Nogales reverses its trend of deteriorating own-source revenues, leading to a stabilization and eventual improvement in its gross operating and cash financing results. Conversely, deterioration in the municipality's own-source revenues, leading to an increase in the municipality's debt or a reduction in its liquidity position, could exert downward pressure on the ratings. ====================== P U E R T O R I C O ====================== ANNA'S LINENS: Lender Says Parties Still Discussing DIP Terms ------------------------------------------------------------- Salus Capital Partners, LLC, filed a preliminary response to (I) the various objections to Anna's Linens, Inc.'s motion for entry of interim and final orders (i) authorizing the Debtor to (a) obtain postpetition financing, and (b) utilize cash collateral; and (II) informal issues raised by the Official Committee of Unsecured Creditors. According to Salus, it is in discussion with the Debtor, the Committee regarding the terms of a final order that would be acceptable to all of the parties and could be submitted to the Court. In the event the parties reach an agreement, and submit an agreed final order, such final order will address substantially all of the DIP objections. In the event the parties are unable to reach an agreement prior to the final hearing, the parties intend to seek a short continuance of the final hearing in order to finalize discussions, or brief the issues related to the final order. Salus serves as administrative and collateral agent pursuant to that certain senior secured super-priority debtor-in-possession credit agreement by and among the Debtor, the lenders party thereto. As reported in the Troubled Company Reporter on July 27, 2015, Shewak Lajwanti Home Fashions, Inc. and its affiliated creditors asked the Court to deny the the DIP financing motion and the assumption motion that the Debtor has filed. Counsel to the objectors, Steven T. Gubner, Esq., at Ezra Brutzkus Gubner LLP, in Woodland Hills, California, relates that by the DIP financing motion, the Debtor sought approval to obtain an $80 million senior secured super-priority revolving credit facility from the DIP Lenders, the proceeds of which will be used solely to: (a) extinguish certain prepetition obligations in the amount of approximately $66.425 million, consisting of approximately (1) $63 million in principal and interest, (2) $3.2 million in early termination fees, and (3) $225,000 in credit monitoring fees; (b) pay fees, costs and expenses in connection with the DIP financing agreement, including payment of the Agent's and DIP Lender's reasonable attorney's fees and other out of pocket expenses; (c) pay Debtor's postpetition operating expenses incurred in the ordinary course of business; (d) pay costs and expenses of administration of the Chapter 11 case, including payment of the Debtor's professional fees; and, (e) pay other amounts as specified in the approved budget or operative documentation and allowed by the Bankruptcy Court, in the case of (c) through (e), in amounts and categories consistent with the approved budget. Given these set-up, Mr. Gubner told the Court, the DIP financing will ultimately provide the Debtor with only $13.6 million of new money. Mr. Gubner added that the DIP Financing is also subject to borrowing and availability limitations that may further reduce, or completely eliminate, the New Money available to the Debtor by virtue of the DIP Financing. Mr. Gubner asserted that Shewak Lajwanti and related creditors, referred to as the Vendors, file their objection because it appears that the DIP financing motion and related motion are intended to be vehicles for Salus Capital Partners, LLC, as agent for the DIP lenders, to foreclose on prepetition collateral quickly; to shift the expenses (including out of pocket expenses and attorneys' fees) of that foreclosure to the estate's general unsecured creditors, while simultaneously encumbering free-and- clear assets that should be liquidated for the benefit of the estate's general unsecured creditors. Mr. Gubner further argued that the Motions unreasonably seek to give the DIP Lenders an interest in Chapter 5 causes of action to the detriment of unsecured creditors. He adds that the Agent and the DIP Lenders are to receive general releases from the estate and parties-in-interest of any and all claims against them (including those under section 506(c) of the Bankruptcy Code). Mr. Gubner said that even more concerning, the Debtor ask that all of the foregoing be approved before the Debtor's filings of its schedules or any disclosure of any analysis of the potential challenges to the Agent's or DIP Lender's liens or claims or the potential recovery actions against the Agent and the DIP lender. Salus is represented by: Howard J. Steinberg, Esq. GREENBERG TRAURIG, LLP 1840 Century Park East, Suite 1900 Los Angeles, CA 90067 Tel: (310) 586-7700 Fax: (310) 586-7800 Nancy A. Mitchell, Esq. GREENBERG TRAURIG, LLP 200 Park Avenue New York, NY 10166 Tel: (212) 801-9200 Fax: (212) 801-6400 About Anna's Linens Anna's Linens is a specialty retailer offering home textiles, furnishings and decor at attractive prices. Headquartered in Costa Mesa, California, operates a chain of 268 company owned retail stores throughout 19 states in the United States (including Puerto Rico and Washington, D.C.) generates over $300 million in annual revenue and employs a workforce of over 2,500 associates. Anna's Linens sought Chapter 11 bankruptcy protection (Bankr. C.D. Cal. Case No. 15-13008) in Santa Ana, California, on June 14, 2015. The case is assigned to Judge Theodor Albert. The Debtor tapped Levene, Neale, Bender, Yoo & Brill LLP as counsel. The Debtor estimated assets of $50 million to $100 million and debt of $100 million to $500 million. The U.S. trustee overseeing the Chapter 11 case of Anna's Linens Inc. appointed seven creditors to serve on the official committee of unsecured creditors. PMC MARKETING: PRASA's Bid to Dismiss Suit Granted -------------------------------------------------- Judge Brian K. Tester of the United States Bankruptcy Court for the District of Puerto Rico granted Autoridad de Acueductos y Alcantarillados' motion to dismiss the lawsuit filed by Noreen Wiscovitch-Rentas, the Chapter 7 trustee for PMC Marketing Corporation. The defendant submitted the defense of insufficiency of service of process, asserting that the Chapter 7 Trustee addressed the complaint and summons to an individual not authorized to receive summons on behalf of the defendant in accordance with Federal Rule of Bankruptcy Procedure 7004. The defendant pointed out that attorney Walesca Diaz, the in-house attorney handling the case upon whom summons for the defendant were served, is not per se the administrative manager or general agent of the defendant. Judge Tester held that Diaz, an in-house counsel for the defendant, does not have adequate commanding discretion arising to the level of that in a Chief Executive Officer or a General Counsel, and cannot be said to be a managing or general agent of the defendant. As such, Judge Tester concluded that the plaintiff has not met her burden for service requirements. The case is IN RE: PMC MARKETING CORP, Chapter 7, Debtor(s) NOREEN WISCOVITCH RENTAS, CHAPTER 7 TRUSTEE Plaintiff v. AUTORIDAD DE ACUEDUCTOS Y ALCANTARILLADOS Defendant(s), CASE NO. 09-02048, ADVERSARY NO. 12-00126 (Bankr. D.P.R.). A full-text copy of Judge Tester's July 30, 2015 opinion and order is available at http://is.gd/xsKvUlfrom Leagle.com. About PMC Marketing PMC Marketing Corp. filed a Chapter 11 bankruptcy petition (Bankr. D.P.R. Case No. 09-02048) on March 18, 2009. The case was converted into a Chapter 7 proceeding on May 19, 2010. On May 20, 2010, Noreen Wiscovitch-Rentas was appointed the Chapter 7 trustee. PUERTO RICO AQUEDUCT: S&P Rates 2015A Sr.-Lien Revenue Bonds CCC- ----------------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'CCC-' rating to Puerto Rico Aqueduct & Sewer Authority (PRASA)'s series 2015A senior-lien revenue bonds. S&P placed the rating and the 'CCC-' rating on PRASA's existing senior-lien revenue debt on CreditWatch with negative implications. S&P also placed the 'CCC-' rating on PRASA's debt that is first secured by a lien on the net revenues of the system but ultimately backed by the commonwealth on CreditWatch with negative implications. The debt was issued under a prior resolution that is subordinate to the senior-lien bonds. "The CreditWatch action reflects our expectation that events could unfold within the next three months that could expose PRASA to greater restructuring efforts," said Standard & Poor's credit analyst Theodore Chapman. Should decision makers include PRASA after all in creditor discussions, or should the commonwealth take negative extraordinary intervention measures by looking to any available option for emergency liquidity, the ratings on PRASA debt would remain associated with the commonwealth's GO and related ratings and would likely eventually reflect a default. PRASA had approximately $3.3 billion in outstanding senior-lien revenue bonds prior to this sale. The bonds are secured, as per the terms of the 2008 master agreement of trust (MAT) and as amended in 2012, by a first lien on the gross revenues of PRASA's retail waterworks and sanitary sewer system. S&P understands that bond proceeds will be used mainly to provide funding for approved projects in PRASA's capital improvement program (CIP), to convert $90 million in outstanding draws on a line of credit (LOC) to long-term debt, as well as to reimburse the utility for cash on hand that was recently used to pay down a large part of that LOC balance. PRASA uses the LOC as a bond anticipation note, effectively providing interim capital for funding approved projects in its CIP). PRASA has roughly $285 million of rated debt backstopped by the commonwealth, and another $899 million of unrated commonwealth- backed debt; the unrated obligations are state revolving fund or Rural Utilities Services loans. S&P understands PRASA intends to honor these obligations, as well as $162.7 million of debt also secured by system net revenues and, if that is insufficient, from an appropriation by the commonwealth. PUERTO RICO AQUEDUCT: Stabilizing Prices May Lure High-Yield CEFs ----------------------------------------------------------------- Fitch Ratings expects some high-yield US municipal closed-end funds (CEFs) to consider participating in the recently announced $750 million offering from the Puerto Rico Aqueduct and Sewer Authority (PRASA/Issuer Default Rating: CC/Rating Watch Negative). "We believe that PRASA's recent price stability relative to other Puerto Rican issuers may lure some managers." Puerto Rico bears very high speculative risks, and until a clear pathway for an orderly restructuring of debt occurs, purchasers today face the risk of being part of a future restructuring. The PRASA offering will be the first test of the market's appetite for Puerto Rico-domiciled issues since Governor Alejandro Garcia Padilla's June statement that the commonwealth's debts were 'unpayable'. On Jan. 1 2016, the commonwealth faces $370 million due in debt service payments on its general obligations bonds. If the PRASA offering is successful, a return of municipal CEF managers as investors in Puerto Rico would be a benefit to the commonwealth as they could be an important source of liquidity and signal that market participants are more willing to estimate recoveries post default of Puerto Rican issuers. However, even a successful offering does not mean there are not significant risks ahead. Fitch notes that under proposed changes to Fitch's rating criteria for preferred stock of municipal CEFs, exposure to non-investment- grade state-level issuers would be capped at no more than 10% of the portfolio for calculating asset coverage. This lower exposure is proposed given the amount of volatility seen in the price of Puerto Rico bonds since 2013. "As we've recently noted in the Fitch Wire article, 'Fitch: Puerto Rico Holdings Small for Most Muni Closed-End Funds,' the majority of municipal CEFs long ago reduced their Puerto Rico exposure, protecting them from recent negative price performance of the bonds. At of the end of May 2015, 57 of the 192 Fitch-rated municipal CEFs still had some Puerto Rico holdings. The 57 funds held an average 1.1% of exposure, and funds holding higher allocations to Puerto Rico ranged between 2.5% to 6.0% of exposure to the commonwealth." =============================== T R I N I D A D & T O B A G O =============================== TRINIDAD & TOBAGO: Bharath Says Forex Woes to Clear Up After Polls ------------------------------------------------------------------ Verne Burnett at Trinidad and Tobago Newsday reports that Minister of Trade, Industry, Investments and Communications, Vasant Bharath, said the current problems being experienced by businesspeople and citizens to get US dollars will clear up after the general election. The issue, he said, was not a lack of foreign exchange, noting more than US$1 billion has been injected into the banking system, according to Trinidad and Tobago Newsday. The report notes that Mr. Bharath said, "The Central Bank itself would have pumped almost twice as much foreign exchange into the system for the corresponding period of 2014/2013. I think it is over a billion (US) dollars (TT$637,000,000,000) has been put into the system as opposed to TT$690,000,000 in the corresponding period." "It's really a question that every election time there is a certain anxiety displayed by the population and what tends to happen is that you don't get the same amount of inflows of foreign exchange coming back into the system to be converted into TT dollars, people are holding on to their foreign exchange rather than converting it, so we expect that with the policies the Central Bank is putting in place more foreign exchange into the system," Mr. Bharath said, the report relays. "I think they are due to put US$100,000,000 into the system again and after the election we expect this matter to be freed up completely." Mr. Bharath added. Pressed about other policy options available to the Central Bank and the Government instead of just pumping more and more foreign exchange into the financial system, Mr. Bharath said, "That is a dictate of the Central Bank to make a determination on that type of policy because there are many repercussions to raising interest rates. That could lead to inflationary pressures, it could lead to a depression of expenditure with regard to necessities, so there are a lot of issues," the report relays. ================= X X X X X X X X X ================= LATIN AMERICA: Corporates Under Pressure, Fitch Says ---------------------------------------------------- Fitch Ratings expects operating cash flows of Latin America credits to remain under stress during 2015. Governments have increased taxes on consumers and corporates in response to falling revenues. External conditions also remain weak, especially for oil, copper and iron ore. 'Fitch foresees another tough 12 months for Latin American corporates and that the ratio of downgrades to upgrades will not reach a level of parity until the second half of 2016,' said Joe Bormann, Managing Director at Fitch. 'During the first seven months of 2015, downgrades for Latin American corporate issuers outpaced upgrades by a ratio of 3.5x; this compares with a downgrade ratio of 2.4x in 2014; 1.6x excluding Argentina.' Refinancing risk is elevated for small, high-yield corporates rated 'B+' or lower that have issued bonds of less than $400 million. Positively, exposure to this risk is light in 2015 and 2016. Posadas was the only high-yield issuer with a bond due in 2015, and it repaid its bond in January. Arendal ($80 million), Ceagro ($100 million) and Marfrig ($375 million) are the 'B' rated issuers with non-benchmark-sized bonds maturing in 2016. While there was only $6 billion of Latin America debt amortization during 2015, this figure rises to $14.2 billion in 2016 and to $27.6 billion in 2017. High-yield issuers' debt accounts for $4.8 billion of the 2016 debt and $14.1 billion for 2017. During 2017, nine issuers in the speculative 'B' and lower categories face $11 billion of debt maturities. About $9.2 billion of this is PDVSA debt, which is subject to high repayment risk. *********** 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 * * *