/raid1/www/Hosts/bankrupt/TCRLA_Public/151106.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
Friday, November 6, 2015, Vol. 16, No. 220
Headlines
A R G E N T I N A
ACINDAR PYMES: Moody's Affirms B2/Aa3.ar Ratings
ARGENTINA: Cleary Say Hedge Funds Want Privileged Docs
BUENOS AIRES: Moody's Affirms Caa2/B1.ar Issuer and Debt Ratings
BUENOS AIRES: Moody's Affirms Caa2 Foreign Currency Debt Rating
CAR SECURITY: Moody's Affirmed Caa1 Corporate Family Rating
EMPRESA DISTRIBUIDORA: Moody's Affirms Caa1 Ratings
HIDROELECTRICA EL: Moody's Affirms Caa1/Baa2.ar CFR
B O L I V I A
BANCO PYME: Moody's Assigns B3 Global Scale Rating
B R A Z I L
BANCO DO BRASIL: Moody's Lowers Rating on Jr. Sub. Debt to B1
BRAZIL: Auto Sales Plunge 37.37% in October
GOL: May Need to Make Capacity Cuts, Moody's Says
HYPERMARCAS SA: Sale of Cosmetics Business is Credit Positive
MGI-MINAS: Moody's Confirms Ba1 Rating on Sr. Debt. 3rd Issuance
PETROLEO BRASILEIRO: Weak Real Threatens Cash Generation
PETROLEO BRASILEIRO: Worst Strike in 20Yrs Hurts Brazil Oil Output
C A Y M A N I S L A N D S
ACS CONSUMER: Shareholder to Hear Wind-Up Report on Nov. 23
AES PANAMA: Members to Hear Wind-Up Report on Nov. 12
AVAGO TECHNOLOGIES: Moody's Assigns Provisional Ba1 CFR
CHINA MEDICAL: Ruling Sustaining Professionals' Claims Reversed
EDMOND DE ROTHSCHILD: Members Receive Wind-Up Report
JAT CAPITAL INTERMEDIATE: Members Receive Wind-Up Report
JAT CAPITAL MASTER: Members Receive Wind-Up Report
JAT CAPITAL OFFSHORE: Members Receive Wind-Up Report
JAT SELECT: Members Receive Wind-Up Report
JAT SELECT FUND: Members Receive Wind-Up Report
JAT SELECT MASTER: Members Receive Wind-Up Report
KIRK CAYMAN: Members Receive Wind-Up Report
LORELEI LIMITED: Shareholders to Hear Wind-Up Report on Nov. 16
MASTIC INVESTMENTS: Shareholders Receive Wind-Up Report
MULTICAT MEXICO: S&P Lowers Rating on Class C Notes to CCC-
NORTHERN ENERGY: Members Receive Wind-Up Report
C H I L E
CODELCO: Workers Sign Pact on Strategic Projects
C O L O M B I A
CREDIVALORES SAS: S&P Affirms 'B+' LT ICR; Outlook Stable
D O M I N I C A N R E P U B L I C
DOMINICAN REP: Business Must Meld Interests With Social Demands
J A M A I C A
JAMAICA: Government to Use Stock Market in Privatization Program
P E R U
PESQUERA EXALMAR: Moody's Lowers CFR to B3; Outlook Negative
P U E R T O R I C O
PUERTO RICO ELECTRIC: Enters Support Deal with Ad Hoc Group
V I R G I N I S L A N D S
MIG LLC: Complaint Filed vs. Shenton Park to Stop BVI Liquidation
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A R G E N T I N A
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ACINDAR PYMES: Moody's Affirms B2/Aa3.ar Ratings
------------------------------------------------
Moody's Latin America Agente de Calificacion de Riesgo ("Moody's")
has affirmed the global local currency (GLC) and national scale
(NS) insurance financial strength (IFS) ratings of 21 Argentine
insurers and reciprocal guarantors, and has downgraded the GLC and
NS IFS ratings of one insurer. The rating outlooks for 20 of the
21 affirmed entities were revised to stable from negative, while
the outlook of one affirmed insurer was revised to positive from
negative. The downgraded insurer now has a stable outlook. See
complete list of companies and ratings/outlooks below.
This portfolio-wide rating action on the Argentine insurers and
reciprocal guarantors follows Moody's recently announced revision
of the outlook for Argentina's local-currency and foreign-currency
Caa1 sovereign bond ratings to stable, from negative, on 2
November 2015 (see press release titled "Moody's changes outlook
on Argentina's Caa1/(P)Caa2 ratings to stable from negative;
Caa1/(P)Caa2 ratings affirmed").
RATINGS RATIONALE
Moody's said the ratings affirmations and change to a stable
outlook on 20 insurers and reciprocal guarantors reflects the
overall stable recent and projected credit profiles of these
entities, and the restoration of a stable outlook on the sovereign
rating, reflecting close linkages between the credit profiles of
the insurers/reciprocal guarantors and the sovereign.
Regarding the lowering of Generali Argentina's GLC IFS rating to
B2 from B1, Moody's explained that the downgrade reflects both
Generali Argentina's increased exposure to Argentine bank and
sovereign-related assets relative to equity capitalization, in the
context of Moody's assessment of the correlation between sovereign
and financial institutions credit risk globally, and the
harmonization of its ratings with those of its affiliate -- Caja
de Seguros, which, like Generali Argentina, is majority owned by
Italy-based Assicurazioni Generali. The company's exposure to
domestic sovereign assets and local bank deposits as of June 30,
2015 stood above 100% of the company's equity capital, indicating
a higher correlation between the Argentine sovereign risk and
Generali Argentina's stand-alone credit profile than previously
considered by Moody's. The national scale IFS rating of General
Argentina was downgraded to Aa1.ar from Aaa.ar given Moody's
mapping from GLC to NS ratings, and positions the 2 Assicurazioni
Generali subsidiaries at the same Argentine NS IFS rating.
Concerning ACE Seguros, Moody's said the shift to a positive
outlook from a negative outlook on the insurer's B2 GLC IFS rating
reflects its improving profitability trend and underwriting
results, as well as the likely improvement in credit fundamentals
and increased benefit of parental support from the company's
ultimate parent company -- ACE Limited -- through its pending
combination with The Chubb Corporation, a transaction that is
expected to close in Q1 2016. Chubb Argentina's B1 GLC IFS rating
was affirmed and its outlook changed to stable from negative. Over
the next 12-18 months and after the completion of the ACE-Chubb
combination, Moody's expects the credit profiles of these two
companies' subsidiaries in Argentina to be more similar.
In addition to company-specific rating drivers, the GLC and NS
ratings of Argentina's rated insurers and reciprocal guarantors
could be upgraded if the Argentine sovereign rating is upgraded,
or if the country's insurance operating environment improves.
Conversely, a deterioration in Argentina's sovereign rating and/or
insurance operating environment could result in a downgrade of the
companies' ratings.
1) The following 20 insurers' and reciprocal guarantors' GLC/NSR
ratings have been affirmed, with outlooks revised to stable, from
negative:
-- Acindar Pymes SGR: B2/Aa3.ar;
-- Affidavit SGR: B3/A3.ar;
-- Allianz Argentina Compania de Seguros: B1/Aaa.ar;
-- Aval Federal SGR: B3/A2.ar;
-- Aval Rural SGR: B2/Aa3.ar;
-- BBVA Consolidar Seguros: B1/Aaa.ar;
-- Caja de Seguros: B2/Aa1.ar;
-- Chubb Argentina de Seguros: B1/Aaa.ar;
-- Fianzas y CrEdito: B3/A2.ar;
-- Fondo de Garantias Buenos Aires (FOGABA): B3/A2.ar;
-- Garantia de Valores SGR: B2/Aa3.ar;
-- HSBC - Seguros de Vida: B1/Aaa.ar;
-- La Segunda ART: B3/A1.ar;
-- La Segunda Compania de Seguros de Personas: B3/A1.ar;
-- La Segunda Coop. Ltda. de Seguros Generales: B3/A1.ar;
-- Provincia Seguros: Caa1/Baa1.ar;
-- QBE Seguros La Buenos Aires: B1/Aaa.ar;
-- Royal & Sun Alliance Seguros (Argentina): B1/Aaa.ar;
-- San Cristobal Sociedad Mutual de Seguros Generales: B3/A1.ar;
-- V¡nculos SGR: B3/A3.ar.
2) The following insurer's ratings were downgraded, with outlook
revised to stable, from negative:
-- Generali Argentina Compan¡a de Seguros: GLC IFS to B2 from B1;
NS IFS to Aa1.ar from Aaa.ar.
3) The following insurer's GLC/NS IFS ratings were affirmed, with
outlook changed to positive, from negative:
-- ACE Seguros B2/Aa2.ar
Moody's insurance financial strength ratings are opinions of the
ability of insurance companies to pay punctually senior
policyholder claims and obligations. For more information, visit
our website at www.moodys.com/insurance.
ARGENTINA: Cleary Say Hedge Funds Want Privileged Docs
------------------------------------------------------
Jonathan Randles at Law360.com reports that Argentina told a New
York federal judge that hedge funds Aurelius Capital and NML
Capital are trying to pressure the country into handing over
privileged communications with its counsel at Cleary Gottlieb
Steen & Hamilton LLP as part of the country's bitter litigation
over defaulted debt.
Argentina filed court papers responding to Aurelius and NML's
claim that the country failed to produce an adequate privilege
log, according to Law360.com. The hedge funds are seeking
discovery that would help the firms pry Argentina's U.S. assets to
satisfy judgments and claims against the country related to the
debt, the report notes.
The report relates that Aurelius and NML accused Cleary Gottlieb
of withholding documents that the firms contend should be handed
over in discovery. The hedge funds have urged U.S. District Judge
Thomas Griesa to rule that Argentina has failed to comply with an
August court order as well as waive any privileges it would claim
for documents falling under its original discovery request, the
report notes.
Argentina said that it complied with a court order from August
directing it to turn over the log and said Aurelius and NML's
accusations that the document was incomplete are unfounded, the
report discloses. Argentina also defended its counsel at Cleary
Gottlieb, saying the firm has an ethical obligation to not reveal
confidential information, the report relays.
"Lacking any basis for their request, plaintiffs repeat throughout
their brief vague and unsupported accusations that Cleary Gottlieb
has acted in bad faith," Argentina said, the report notes. "These
unwarranted attacks plainly do not support granting the
extraordinary relief that plaintiffs seek, are inappropriate and
must stop. Cleary Gottlieb has an ethical duty to preserve client
confidences and it has at all times throughout this litigation
acted honestly and responsibly," Argentina said, the report
relays.
Aurelius and NML originally served discovery on Argentina in 2011
and 2012, respectively, the report discloses. After filing
motions to compel, Judge Griesa ordered the country to produce
discovery. Following a lengthy appeal, the Second Circuit upheld
the court's order in December, the report notes.
The litigation is part of the fallout from the catastrophic
collapse sustained by Argentina's government in 2001, when after
four years of worsening recession and social unrest, it registered
the then-largest sovereign debt default in history and set out to
restructure more than $100 billion owed to domestic and foreign
creditors, the report notes.
Aurelius is represented by Friedman Kaplan Seiler & Adelman LLP.
NML is represented by Dechert LLP.
Argentina is represented by Cleary Gottlieb Steen & Hamilton LLP.
The lead case is NML Capital Ltd. v. The Republic of Argentina,
case number 1:08-cv-06978, in the U.S. District Court for the
Southern District of New York.
* * *
The Troubled Company Reporter-Latin America, on Aug. 1, 2014,
reported that Argentina defaulted on some of its debt late July 30
after expiration of a 30-day grace period on a US$539 million
interest payment. Earlier that day, talks with a court- appointed
mediator ended without resolving a standoff between the country
and a group of hedge funds seeking full payment on bonds that the
country had defaulted on in 2001. A U.S. judge had ruled that the
interest payment couldn't be made unless the hedge funds led by
Elliott Management Corp., got the US$1.5 billion they claimed.
The country hasn't been able to access international credit
markets since its US$95 billion default 13 years ago.
As a result, reported the TCR-LA on Aug. 1, Standard & Poor's
Ratings Services lowered its unsolicited long-and short-term
foreign currency sovereign credit ratings on the Republic of
Argentina to selective default ('SD') from 'CCC-/C'.
The TCR-LA, on Aug. 4, 2014, also reported that Fitch Ratings
downgraded Argentina's Foreign Currency Issuer Default Rating
(IDR) to 'RD' from 'CC', and its Short-Term Foreign Currency
Issuer Default Rating to 'RD' from 'C'.
Meanwhile, Moody's Investors Service affirmed Argentina's Caa1
issuer rating, which also applies to domestic law bonds, confirmed
the (P)Caa2 rating for its foreign law bonds, and affirmed the Ca
rating on the original defaulted bonds. The long-term issuer
rating was placed on negative outlook, reported the TCR-LA on Aug.
5, 2014.
On Aug. 8, 2014, the TCR-LA reported that Moody's Latin America
Agente de Calificacion de Riesgo affirmed the deposit, debt,
issuer and corporate family ratings on Argentina's banks and
financial institutions, both on the global and national scales.
The outlook on these ratings has been changed to negative from
stable. At the same time, the rating agency has affirmed the
banks' Caa2 foreign-currency deposit ratings and Not-
Prime short-term ratings. The banks' standalone E financial
strength ratings corresponding to caa1 baseline credit assessments
(BCA) have also been affirmed.
The TCR-LA, On Aug. 6, 2014, also reported that DBRS Inc. has
downgraded Argentina's long-term foreign currency issuer rating
from CC to Selective Default (SD). The short-term foreign
currency rating has been downgraded to Default (D), from R-5. The
long-term and short-term local currency issuer ratings have been
confirmed at B (low) and R-5, respectively. The trend on the
long-term local currency rating is Negative, and the trend on the
short-term local currency rating is Stable.
On Nov. 3, 2014, the TCR-LA reported that Fitch Ratings downgraded
Argentina's rating on Par Bonds issued under Foreign Law to 'D'
from 'C' as Argentina has not been able to cure the missed coupon
payments on its par bonds issued under foreign law after the
expiration of the 30-day grace period on Oct. 30. According to
Fitch's criteria, this constitutes an event of default and Fitch
has downgraded the affected securities to 'D'. In addition, Fitch
has affirmed:
-- Foreign Currency Issuer Default Rating (IDR) at 'RD';
-- Local Currency IDR at 'CCC';
-- Short-term Foreign Currency IDR at 'RD';
-- Country Ceiling at 'CCC'.
-- Performing Foreign Law Exchanged Securities (Global 17) at
'C';
-- Local Currency exchanged bonds under Argentine Law at 'CCC';
-- Foreign and Local Currency non-exchanged securities under
Argentine Law at 'CCC';
-- Discount Bonds issued under Foreign Law at 'D'.
On April 22, 2015, Moody's Investors Service expanded the portion
of Argentina's debt that is rated (P)Caa2. The (P)Caa2 rating
reflects the higher risk of default for both Argentina's
restructured foreign legislation debt (as before) and,
additionally now, its restructured local legislation foreign
currency obligations, as compared with the risk of default on
other debt instruments issued by Argentina. Argentina's local
currency debt and its non-restructured foreign currency debt are
rated Caa1. The debt that remains in default since Argentina's
2001 default is rated Ca.
BUENOS AIRES: Moody's Affirms Caa2/B1.ar Issuer and Debt Ratings
----------------------------------------------------------------
Moody's Latin America Agente de Calificacion de Riesgo (Moody's)
changed the outlooks on the assigned issuer ratings of all
Argentine provinces and municipalities to stable from negative. In
the same rating action Moody's also affirmed the Global Scale
local currency issuer and debt ratings and on Argentina National
Scale of all sub-sovereigns rated in Argentina. This rating action
follows Moody's outlook change to stable from negative on
Argentina's Caa1 issuer ratings --in local and in foreign
currencies- announced November 2nd, 2015.
For more information, please see separate press release titled
"Moody's changes outlook on Argentina's Caa1/(P)Caa2 ratings to
stable from negative; Caa1/(P)Caa2 ratings affirmed".
RATINGS RATIONALE
The ratings affirmation and outlook change to stable from negative
on the rated provinces and municipalities in Argentina follows the
similar rating action on Argentina's sovereign bonds ratings --
both in local and foreign currency and local and in foreign
legislation-and reflects the very close economic and financial
linkages that exist between Argentina's government and Argentine
sub-sovereigns, as well as the maintenance of their key credit
strength and challenges relative to one year ago.
Moody's said the ratings affirmations and change to a stable
outlook also reflects an expected more consistent policy framework
because the 25 October electoral results suggest the probability
that the next administration will seek to address Argentina's key
credit constraints, including a fall in international reserves, a
lack of access to international capital markets, high inflation
and a rising fiscal deficit; all factors that currently constrain
the credit profile of the Argentine sub-sovereigns.
ISSUERS AND RATINGS AFFECTED
The outlook of the following issuers was changed to stable from
negative while affirming their current ratings:
-- Province of Buenos Aires: foreign currency (Foreign Law)
issuer and debt ratings affirmed at Caa2/B1.ar (on
global/Argentina's national scales, respectively). Local
currency issuer and debt ratings affirmed at Caa1/Baa3.ar (on
global/Argentina's national scales, respectively).
-- Province of Chubut: local currency issuer ratings affirmed at
Caa1/Baa2.ar (on global/Argentina's national scales,
respectively). The local currency debt ratings of BODIC 1 and
BODIC 2 Notes were affirmed at Caa1/Baa1.ar (on
global/Argentina's national scales, respectively).
-- Province of Cordoba: foreign currency (Foreign Law) issuer
ratings affirmed at Caa2/B1.ar (on global/Argentina's national
scales, respectively). Local currency issuer and debt ratings
affirmed at Caa1/Baa3.ar (on global/Argentina's national
scales, respectively).
-- Province of Mendoza: foreign currency (Foreign Law) issuer and
debt ratings affirmed at Caa2/B1.ar (on global/Argentina's
national scales, respectively). Local currency issuer and debt
ratings affirmed at Caa1/Baa3.ar (on global/Argentina's
national scales, respectively).
-- City of Buenos Aires: foreign currency (Foreign Law) debt
ratings affirmed at (P)Caa2/B1.ar (on global/Argentina's
national scales, respectively). Local currency debt ratings
affirmed at Caa1/Baa1.ar (on global/Argentina's national
scales, respectively).
-- Municipality of Cordoba: local currency issuer and debt
ratings affirmed at Caa1/Baa3.ar (on global/Argentina's
national scales, respectively). The local currency debt
ratings of Series 1 and Series 2 Bonds were affirmed at
Caa1/Baa2.ar (on global/Argentina's national scales,
respectively).
-- Municipality of R¡o Cuarto: local currency issuer and debt
ratings affirmed at Caa1/Ba1.ar (on global/Argentina's
national scales, respectively).
-- Province of Chaco: local currency issuer and debt ratings
affirmed at Caa2/Ba3.ar (global/Argentina's national scale,
respectively) with stable outlook. The local currency debt
ratings of Chaco's Senior Secured Bonds due 2026 were affirmed
at Caa2/Ba3.ar (on global/Argentina's national scales,
respectively).
-- Province of Formosa: local currency issuer and debt ratings
affirmed at Caa2/Ba3.ar (on global/Argentina's national scale,
respectively). The local currency debt ratings of Formosa's
Senior Secured Bonds due 2022 were affirmed at Caa2/Ba3.ar (on
global/Argentina's national scales, respectively).
WHAT COULD CHANGE THE RATING UP/DOWN
Given the strong macroeconomic and financial linkages between the
Government of Argentina's and Sub-sovereigns economic and
financial ratings, and upgrade of Argentina's sovereign bonds
ratings and/or the improvement of the country' operating
environment could lead to an upgrade of the sub-sovereigns
ratings. Regarding the Provinces of Chaco and Formosa, further
improvements in their economic fundamentals --mainly in the growth
of their own-source revenues-- could also exert upward pressure in
these two provinces in particular.
Conversely, a downgrade in Argentina's bond ratings and/or further
systemic deterioration or idiosyncratic risks arising in the rated
issuers could continue to exert downward pressure on most of the
ratings assigned and could translate in to a downgrade in the near
to medium term.
BUENOS AIRES: Moody's Affirms Caa2 Foreign Currency Debt Rating
---------------------------------------------------------------
Moody's Investors Service (Moody's) changed the outlooks on
assigned issuer ratings of three Argentine provinces and one
municipality to stable from negative. In the same rating action
Moody's also affirmed their Global Scale foreign currency issuer
and debt ratings. This rating action follows Moody's outlook
change to stable from negative on Argentina's Caa1 issuer
ratings -- in local and in foreign currencies- announced November
2nd, 2015.
For more information, please see separate press release titled
"Moody's changes outlook on Argentina's Caa1/(P)Caa2 ratings to
stable from negative; Caa1/(P)Caa2 ratings affirmed".
RATINGS RATIONALE
The ratings affirmation and outlook change to stable from negative
on the rated provinces and municipality in Argentina follows the
similar rating action on Argentina's sovereign bonds ratings --
both in local and foreign currency and local and in foreign
legislation-and reflects the very close economic and financial
linkages that exist between Argentina's government and Argentine
sub-sovereigns, as well as the maintenance of their key credit
strength and challenges relative to one year ago.
Moody's said the ratings affirmations and change to a stable
outlook also reflects an expected more consistent policy framework
because the 25 October electoral results suggest the probability
that the next administration will seek to address Argentina's key
credit constraints, including a fall in international reserves, a
lack of access to international capital markets, high inflation
and a rising fiscal deficit; all factors that currently constrain
the credit profile of the Argentine sub-sovereigns.
ISSUERS AND RATINGS AFFECTED
The outlook of the following issuers was changed to stable from
negative while affirming their current ratings:
-- Province of Buenos Aires: foreign currency (Foreign Law) debt
ratings affirmed at Caa2 (on Global Scale).
-- Province of Cordoba: foreign currency (Foreign Law) debt
ratings affirmed at Caa2 (on Global Scale).
-- Province of Mendoza: foreign currency (Foreign Law) debt
ratings affirmed at Caa2 (on Global Scale).
-- City of Buenos Aires: foreign currency (Foreign Law) debt
ratings affirmed at Caa2 (on Global Scale).
CAR SECURITY: Moody's Affirmed Caa1 Corporate Family Rating
-----------------------------------------------------------
Moody's Latin America Agente de Calificacion de Riesgo,
("Moody's") has revised to stable from negative the outlook for
several companies operating in Argentina, while all ratings were
affirmed. The companies' outlook change follows the revision of
the Argentine government's Caa1 rating outlook to stable from
negative on November 02, 2015.
ISSUERS AND RATINGS AFFIRMED -- OUTLOOK CHANGED TO STABLE
Car Security S.A: the corporate family rating (CFR) was affirmed
at Caa1 in the global scale and Baa2.ar in the national scale. The
outlook was changed to stable from negative.
Electroingenieria S.A: the CFR was affirmed at Caa1 in the global
scale and Baa3.ar in the national scale. The outlook was changed
to stable from negative.
Longvie S.A: the CFR and the ratings of the senior unsecured notes
were affirmed at Caa1 in the global scale and Baa2.ar in the
national scale. The outlook was changed to stable from negative.
Mirgor S.A: the CFR was affirmed at Caa1 in the global scale and
Baa2.ar in the national scale. The outlook was changed to stable
from negative.
Raghsa S.A: the CFR was affirmed at Caa1 in the global scale and
Baa3.ar in the national scale. The rating of the senior unsecured
notes was affirmed at Baa3.ar in the national scale. At the same
time, Moody's Investors Service has affirmed Raghsa's rating of
the senior unsecured notes at Caa1 in the global scale. The
outlook was changed to stable from negative.
YPF S.A: the issuer rating was affirmed at Caa1 global scale and
Baa1.ar in the national scale. At the same time, Moody's Investors
Service has affirmed the rating of its senior unsecured notes at
Caa1 in the global scale, and the rating of its medium-term note
program at (P)Caa1 in the global scale. The outlook was changed to
stable from negative.
RATINGS RATIONALE
The rating outlook revisions for these companies were triggered by
the change to stable in the outlook for the Argentine government's
Caa1 rating supported by Moody's view that a change of government
in Argentina increases the possibility of policy changes that will
reduce the risk of increased losses to investors, and therefore
has reduced our assessment of a downgrade in the next 12 to 18
months.
The stable outlook for the affected corporates reflects Moody's
view that the creditworthiness of these companies cannot be
completely de-linked from the credit quality of the Argentine
government, and thus their ratings need to closely reflect the
risk that they share with the sovereign.
EMPRESA DISTRIBUIDORA: Moody's Affirms Caa1 Ratings
---------------------------------------------------
Moody's Investors Services changed the rating outlook to stable
and affirmed the Caa1 ratings for Empresa Distribuidora de
Electricidad de Salta S.A. (EDESA). At the same time Moody's has
affirmed the Caa1 ratings for Aeropuertos Argentina 2000 S.A. and
Transportadora de Gas del Sur S.A. The rating outlook for both
companies continues to be stable. Finally, Moody's has placed
Empresa Distribuidora Norte S.A.'s (Edenor) ratings under review
for upgrade.
RATINGS RATIONALE
Moodys has changed the rating outlook to stable and affirmed the
current ratings for EDESA. The outlook change follows the revision
of Argentine government's Caa1 issuer rating outlook to stable
from negative on November 2, 2015 and reflects the exposure and
linkages that this company has to Argentine government credit
quality.
At the same time, Moody's affirmed the Caa1ratings for Aeropuertos
Argentina 2000 S.A. (AA2000) and Transportadora de Gas del Sur
S.A. (TGS). The rating outlook for both companies continues to be
stable since both TGS and AA2000 have been able to maintain
relatively stable credit metrics that have been stronger than most
other rate regulated companies operating in Argentina, allowing
them to keep an stable rating outlook in spite of the sovereign.
The Caa1 rating and stable outlook also reflect the close
relationship between both companies and the sovereign.
Finally, Moody's has placed Edenor's Caa3/Caa3.ar ratings on
review for upgrade. The review will consider the expected
evolution of the company's cash flows and operating income given
the latest resolution (Res. 32/15). Such resolution has
established that the transitory amounts currently being
transferred from the government to the company will be
incorporated into the company's tariff scheme, once the tariff
review process is implemented.
Issuers and ratings included in this action are as follows:
a) Ratings Affirmed, Outlook changed to stable
1) Empresa Distribuidora de Electricidad de Salta S.A. (EDESA)
USD 63.00 million Amortizing Notes: Caa1 rating affirmed; outlook
changed to stable.
b) Ratings affirmed, Stable Outlook
2) Aeropuertos Argentina 2000 S.A. (AA2000)
Corporate Family Rating, USD 300 million 2020 Senior Unsecured
Notes and Class "A" , and Class "C" Senior Unsecured Local Notes:
Caa1 rating affirmed; stable outlook
3) Transportadora de Gas del Sur S.A. (TGS):
USD 60 million Senior Unsecured 2017 Notes; USD 191 million Senior
Unsecured Class 1 2020 Notes: Caa1 rating affirmed; stable
outlook.
c) Ratings placed under review for upgrade
4) Empresa Distribuidora Norte S.A. (Edenor)
Corporate Family Rating, US 24.7 million senior unsecured 2017
notes and US 176 million senior unsecured 2022 notes: Caa3 rating
placed on review for upgrade
HIDROELECTRICA EL: Moody's Affirms Caa1/Baa2.ar CFR
---------------------------------------------------
Moody's Latin America Agente de Calificacion de Riesgo S.A.
("Moodys") has changed the rating outlook to stable from negative
and affirmed the current ratings on various infrastructure
companies operating in Argentina as a result of the stabilization
of the Argentine sovereign outlook on November 2nd. At the same
time Moody's placed Empresa Distribuidora Norte S.A. 's (Edenor)
ratings under review for upgrade.
RATINGS RATIONALE
Moodys changed the rating outlook to stable and affirmed the
current ratings on various infrastructure companies --power
generation and electric distribution- operating in Argentina. The
outlook change for the affected companies follows the revision of
Argentine government's Caa1 issuer rating outlook to stable from
negative on November 2, 2015 and reflects the exposure and
linkages that these companies have to Argentine government credit
quality.
At the same time, Moody's affirmed the Caa1/Baa1.ar ratings for
Aeropuertos Argentina 2000 S.A. (AA2000) and Transportadora de Gas
del Sur S.A. (TGS). The rating outlook for both companies
continues to be stable since both TGS and AA2000 have been able to
maintain relatively stable credit metrics that have been stronger
than most other rate regulated companies operating in Argentina,
allowing them to keep an stable rating outlook in spite of the
sovereign. The Caa1 rating and stable outlook also reflect the
close relationship between both companies and the sovereign while
the Baa1.ar national scale rating reflect their stronger
positioning relative to other Argentine regulated rated issuers.
The ratings for the Argentine gas distribution companies (LDCs)
including Gas Natural Ban S.A., Camuzzi Gas Pampeana S.A.,
Metrogas S.A. and Distribuidora de Gas Cuyana S.A. have also been
affirmed, but the outlook for these companies remains negative.
The continuation of the negative outlook for the LDCs in spite of
the outlook change to stable for the sovereign on November 2nd,
considers the lack of any concrete solution for the LDCs'
challenges in 2016 and beyond. In particular, Moody's notes that
LDCs are currently facing growing operating losses and
insufficient internal cash generation to deal with their daily
operations. All the companies in this infrastructure sector have
had to rely on discretional and less than timely fund transfers
from the government or curtailing payments to their suppliers over
the past two years. Consequently, the negative outlook reflects
the lack of an effective and predictable mechanism that would
allow the LDCs to recover their inflation driven increased
operating costs in a consistent and predictable manner.
Finally, Moody's has placed Edenor's Caa3/Caa3.ar ratings on
review for upgrade. The review will consider the expected
evolution of the company's cash flows and operating income given
the latest resolution (Res. 32/15). Such resolution has
established that the transitory amounts currently being
transferred from the government to the company will be
incorporated into the company's tariff scheme, once the tariff
review process is implemented.
Issuers and ratings included in this action are as follows:
a) Ratings Affirmed; Outlook changed to stable
1) HidroelEctrica El Chocon S.A.
Corporate Family rating: Caa1/Baa2.ar ratings affirmed; outlook
changed to stable.
2) Genneia S.A.
USD 156 million Senior Secured Class 2 and 3 Notes, USD 60 million
Senior Unsecured Class 11 and Class 13 Notes and Corporate Family
Rating: Caa1/Baa2.ar ratings affirmed; outlook changed to stable.
3) Empresa Distribuidora de Electricidad de Salta S.A. (EDESA)
USD 63.00 million Amortizing Notes: Caa1/Baa3.ar ratings affirmed;
outlook changed to stable.
4) Generacion Independencia S.A. (GISA)
ARS 110 million Senior Unsecured Class 2 and Class 3 Notes and
Corporate Family rating: Caa1/Baa2.ar ratings affirmed; outlook
changed to stable.
5) Empresa Provincial de Energ¡a de Cordoba (EPEC):
USD 565 million Senior Secured Notes and Corporate Family rating:
Caa1/Ba1.ar ratings affirmed; outlook changed to stable.
b) Ratings affirmed, Stable Outlook
6) Aeropuertos Argentina 2000 S.A. (AA2000)
Corporate Family Rating, USD 300 million 2020 Senior Unsecured
Notes and Class "A" and Class "C" Senior Unsecured Local Notes:
Caa1/Baa1.ar ratings affirmed; stable outlook.
7) Transportadora de Gas del Sur S.A. (TGS):
USD 60 million Senior Unsecured Class 1 2017 1 Notes; USD 191
million Senior Unsecured Class 1 2020 Notes: Caa1/Baa1.ar ratings
affirmed; stable outlook.
b) Ratings Affirmed, Negative Outlook
8) Camuzzi Gas Pampeana S.A. (CGP)
Corporate Family rating: Caa1/Baa3.ar ratings affirmed; negative
outlook.
9) Gas Natural Ban S.A. (GNB)
Corporate Family rating: Caa1/Baa3.ar ratings affirmed; negative
outlook.
10) Distribuidora de Gas Cuyana S.A. (DGCU)
Corporate Family rating: Caa1/Baa2.ar ratings affirmed; negative
outlook.
11) Metrogas S.A.
Debt program for up to US 600 million and Corporate Family rating:
(P)Caa1/Ba1.ar and Caa1/Ba1.ar ratings affirmed; outlook negative.
d) Ratings placed under review for upgrade
12) Empresa Distribuidora Norte S.A. (Edenor)
Corporate Family Rating, Class 7 US 24.7 million senior unsecured
2017 notes and Class 9 US 176 million senior unsecured 2022 notes:
Caa3/Caa3.ar ratings placed under review for upgrade
=============
B O L I V I A
=============
BANCO PYME: Moody's Assigns B3 Global Scale Rating
--------------------------------------------------
Moody's Latin America Agente de Calificacion de Riesgo has
assigned a B3 global scale rating and a A1.bo national scale
rating to Banco Pyme Ecofuturo S.A. (Ecofuturo)'s third takedown
of BOB 10.8 million, under its subordinated debt program of BOB
100 million.
The following ratings were assigned to Banco Pyme Ecofuturo S.A.'s
BOB 10.8 million subordinated debt issuance:
Global Local Currency Subordinated Debt Rating: B3
Bolivia National Scale Local Currency Subordinated Debt Rating:
A1.bo
RATINGS RATIONALE
Moody's explained that the B3 local currency subordinated debt
rating derives from Ecofuturo's b2 baseline credit assessment and
reflects the subordination of the notes.
The BCA considers the bank's modest capitalization and
profitability metrics and tight liquidity indicators. These credit
challenges are somewhat counterbalanced by sound asset quality and
a conservative loan loss reserve policy.
Despite its focus on microlending, typically a higher-risk market
segment, EcoFuturo's asset quality remains healthy, with an NPL
ratio of just 1.7%, a reflection of the bank's deep knowledge of
its targeted client base. Given its microfinance focus, the entity
has a manageable loan book concentration, with a small average
loan ticket size. However, asset quality could weaken in light of
the bank's fast loan growth strategy and the increasing
indebtedness of its customer base. Moreover, in the coming years,
government lending mandates will increasingly drive credit
allocation, as regulations require so-called "Banco Pyme", such as
Ecofuturo, to direct 50% of total loan books to productive
industries and social housing within four years. Moody's expects
that these requirements will result in a further deterioration of
the bank's asset quality, as this will force it to expand in
markets in which it has less lending expertise.
The regulations also include below-market lending rate caps that
will inhibit banks' ability to price risk and will lower
profitability. EcoFuturo's profitability is further limited by
weak operating efficiency. As a microfinance lender, the bank
reports high operating expenses, which are mainly related to
personnel and administrative costs. The bank's strong rural focus
-- 50% of its branches are located in rural areas - diversifies
its loan portfolio and allows it to penetrate a high-margined
market segment. However, doing business in rural areas also
entails higher operating costs derived from geographic and
population dispersion, as well as high levels of economic
informality, which complicates risk underwriting processes.
EcoFuturo's funding profile has experienced a positive transition.
The lender, which used to be mainly funded by multilateral
institutions such as the IDB and CAF, has seen its core deposit
funding evolve to almost 90% of its total liabilities as of June
2015. Additionally, the entity holds credit lines with local and
foreign financial institutions. However, liquidity remains low, as
reflected in a liquid banking assets to tangible banking assets of
just 11.4% as of June 2015. In addition, with a ratio of tangible
common equity to risk weighted assets of 7.7% as of June 2015,
Ecofuturo's capitalization is weaker than the banking system
average. However, this is partially offset by its high level of
loan loss reserves, which total 200% of NPLs.
The ratings could face downward pressure if the entity's asset
quality and profitability deteriorate as a result of lending
mandates and interest rate caps. The ratings could face upward
pressure if the bank successfully adapts to the current regulatory
environment, improving its earnings generation capacity,
capitalization and liquidity metrics.
Banco Pyme Ecofuturo S.A. is headquartered in La Paz, Bolivia, and
it had assets of BOB 2.95 billion and equity of BOB 209 million as
of June 2015.
Moody's National Scale Credit Ratings (NSRs) are intended as
relative measures of creditworthiness among debt issues and
issuers within a country, enabling market participants to better
differentiate relative risks. NSRs differ from Moody's global
scale credit ratings in that they are not globally comparable with
the full universe of Moody's rated entities, but only with NSRs
for other rated debt issues and issuers within the same country.
NSRs are designated by a ".nn" country modifier signifying the
relevant country, as in ".za" for South Africa. For further
information on Moody's approach to national scale credit ratings,
please refer to Moody's Credit rating Methodology published in
June 2014 entitled "Mapping Moody's National Scale Ratings to
Global Scale Ratings".
===========
B R A Z I L
===========
BANCO DO BRASIL: Moody's Lowers Rating on Jr. Sub. Debt to B1
-------------------------------------------------------------
Moody's Investors Service lowered Banco do Brasil S.A.'s (BB)
baseline credit assessment to ba1 from baa3. Moody's also
downgraded Banco do Brasil S.A. Cayman Branch's preferred stock
non-cumulative debt (foreign currency) rating to B1(hyb) from
Ba3(hyb) and the junior subordinate debt (foreign currency) rating
to B1(hyb) from Ba2(hyb). At the same time, Moody's affirmed BB's
long-term local- and foreign-currency deposit ratings of Baa3, the
foreign-currency senior unsecured debt rating of Baa3, the
foreign-currency subordinate debt rating of Ba1 and the long-term
Brazilian national scale deposit rating of Aaa.br. The outlook on
all ratings remains stable.
These assessments assigned to Banco do Brasil S.A. were lowered:
Baseline credit assessment to ba1, from baa3
Adjusted baseline credit assessment to ba1 from baa3
These ratings assigned to Banco do Brasil S.A. Cayman Branch were
downgraded:
Junior subordinate debt (foreign currency) rating to B1(hyb)
from Ba2(hyb)
Preferred stock non-cumulative debt (foreign currency) rating to
B1(hyb) from Ba3(hyb)
These ratings and assessments assigned to Banco do Brasil S.A.
were affirmed:
Long-term global local-currency deposit rating of Baa3; stable
outlook
Short-term global local-currency deposit rating of Prime 3
Long-term foreign-currency deposit rating of Baa3; stable
outlook
Short-term foreign-currency deposit rating of Prime 3
Senior unsecured MTN program (foreign currency) rating of
(P)Baa3
Long-term Brazilian national scale deposit rating of Aaa.br
Short-term Brazilian national scale deposit rating of BR-1
Long-term counterparty risk assessment of Baa3(cr)
Short-term counterparty risk assessment of Prime 3(cr)
These ratings and assessments assigned to Banco do Brasil S.A.
Cayman Branch were affirmed:
Long-term foreign-currency senior unsecured debt rating of Baa3;
stable outlook
Senior unsecured MTN program (foreign currency) rating of
(P)Baa3
Short-term MTN program (foreign currency) rating of (P)Prime 3
Subordinate debt (foreign currency) rating of Ba1
Long-term counterparty risk assessment of Baa3(cr)
Short-term counterparty risk assessment of Prime 3(cr)
RATINGS RATIONALE
The downgrade of BB's baseline credit assessment to ba1 takes into
account the increasing challenges the bank is likely to face to
stabilize capital through internal earnings generation in the
context of a contracting economy, which will continue to hurt
asset quality and profitability. BB's weak capital position, with
Moody's ratio of tangible common equity (TCE) to risk-weighted
assets (RWAs) of 6.9% in June 2015, will likely remain under
pressure, as evidenced by the fact that loan loss provisions have
already absorbed 63% of the bank's pre-provision income in the
first half of 2015. At the same time, low levels of business
activity combined with low capitalization, will constrain
profitability. Moody's also notes that unrealized losses
increased 103% in 2014 and 32% during the same period -- a rise
primarily related to the mark-to-market of its employees' pension
fund assets. If Moody's fully factors these unrealized losses,
Moody's TCE to RWAs reduces significantly to 5.2%.
Moody's view of BB's creditworthiness considers the risks arising
from the expected contraction in the domestic economy this year
and in 2016, causing increasing pressures on asset quality,
particularly in light of its rapid loan growth of past years.
BB's 90-day past due loan ratio remained relatively stable in the
last six quarters, at around 2.0%, owing in part to increasing
loan restructurings. When Moody's includes restructured loans,
the bank's aggregate problem loan ratio increased to 3.7% in June
2015, from 3.1% a year before. Moody's also take into account
that concentration risk in segments that are most vulnerable to
the downturn has increased in BB's loan portfolio, with the
exposure to the 20 largest borrowers growing 25% in the last year,
and representing 190% of TCE (248% of TCE minus unrealized
losses). Moody's notes that BB's exposure to households is mostly
in the form of low-risk payroll loans, which provide a
counterbalance to this concentration risk. Additionally, about
24% of the bank's loan book is allocated to the agribusiness
segment, under BB's policy lending mandate, which has maintained
adequate performance that continues to drive domestic economic
growth.
BB's ba1 BCA is supported by the adequate liquid resources and low
dependence on market funds in its balance sheet. The bank's broad
access to core deposits derives from its nationwide branch
network, and its access to funding is further enhanced by sticky
resources from federal funds and judicial deposits.
Moody's also downgraded the junior subordinate rating to B1(hyb)
from Ba2(hyb) and the preferred stock non-cumulative rating to
B1(hyb) from Ba3(hyb), as these ratings are positioned at the
bank's BCA minus three notches and Moody's do not expect the
government to support these specific obligations. The notching
captures the risk of losses to investors steaming from coupon
suspension and principal write-down before the bank reaches the
point of non-viability.
The affirmation of the Baa3 deposit and senior unsecured debt
ratings derive from the ba1 BCA and also incorporates a one-notch
uplift from Moody's assessment of very high government support.
This is based on the fact that BB is the largest deposit taker in
Brazil's market and is the central government's key financial
agent for the agricultural sector.
WHAT COULD MAKE THE RATING GO DOWN
BB's deposit and senior debt ratings could be negatively impacted
by a downgrade of the Baa3 sovereign rating, which has a stable
outlook. Also, further negative pressures on its BCA could arise
from weaker-than-expected asset risk and profitability
deterioration, which could weaken the bank's capitalization.
WHAT COULD MAKE THE RATING GO UP
BB's deposit and senior debt ratings are unlikely to be upgraded
because they are already positioned at the same level as the
sovereign rating. There could be upward pressure on the BCA if
the bank's capital position improves and if the asset risk and
profitability pressures are reversed.
LAST RATING ACTION
The last rating action on Banco do Brasil was on 12 August 2015,
when Moody's downgraded the long-term local and foreign-currency
deposit ratings to Baa3 from Baa2; the short-term local and
foreign-currency deposit ratings to P-3 from P-2; the senior
unsecured MTN program (foreign currency) rating to (P)Baa3 from
(P)Baa2. The outlook on its ratings was changed to stable from
negative. This rating action followed the downgrade of Brazil's
government bond rating to Baa3 from Baa2.
Banco do Brasil S.A. is headquartered in Brasilia, Brazil. It
reported total assets of BRL1,534 billion ($494.4 billion) and
equity of BRL82.6 billion ($26.6 million) as of June 30, 2015.
BRAZIL: Auto Sales Plunge 37.37% in October
-------------------------------------------
EFE News reports that auto sales in Brazil plunged to 192,165
units in October, down 37.37 percent from the same period of 2014
and the worst result for that month in nine years, a dealership
association said.
The National Federation of Automotive Distributors, known by the
Portuguese acronym Fenabrave, said the sale of new cars, light
commercial vehicles (pickup trucks and vans), trucks and buses
fell 3.96 percent in October compared with September, according to
EFE News.
October's sales total was the lowest for that month since 175,000
vehicles left dealers' lots in October 2006, according to
Fenabrave's figures.
Sales over the first 10 months of this year totaled 2.14 million
units, down 24.25 percent from the same period in 2014, the
association said, the report relays.
"New vehicle registrations regressed nearly a decade in terms of
volume," Fenabrave President Alarico Assumpcao Junior said in a
statement, adding that dealers were having difficulty maintaining
their sales results and that the situation was having a "negative
impact on employment," the report notes.
The automotive sector has been among the hardest hit by an ongoing
recession in Brazil, the report discloses.
The government has forecast an economic contraction of 2.8 percent
in 2015 and a year-end inflation rate higher than 9 percent, or
more than double the mid-point of the government's target range of
between 2.5 percent and 6.5 percent, the report notes.
The report adds that vehicle sales also have been hurt by the
cash-strapped Brazilian government's decision to suspend tax
incentives designed to help the auto sector.
GOL: May Need to Make Capacity Cuts, Moody's Says
-------------------------------------------------
Gol (B3 negative) will likely have to deepen capacity cuts next
year if it is to mitigate the negative impact that currency swings
are having on its business, says Moody's Investor Services.
More than half of Gol's costs are denominated in US dollars, while
only about 11 percent of its revenues are generated in that
currency. The airline has only hedged a small portion of its
dollar exposure and, as a result, the weakening real is pushing up
its costs.
While the airline is benefitting from lower fuel costs as the
price of oil has fallen, that isn't enough to compensate for the
combined effect of the weaker real and a recessionary Brazilian
economy, according to the report "Gol Linhas Aereas Inteligentes
S.A. - Liquidity Profile Depends on Further Capacity Adjustments."
"Gol will likely need to cut capacity further in 2016 to avoid a
massive cash burn," says Cristiane Spercel, a Moody's Vice
President and Senior Analyst.
Moody's estimates that Gol, which is already reducing frequencies
and the number of operating aircrafts in 2015, may need to make
capacity cuts of at least 8 percent next year to sustain the
credit metrics that are appropriate for its current rating. The
airline could also put off capital spending to help it maintain
its currently adequate liquidity cushion.
HYPERMARCAS SA: Sale of Cosmetics Business is Credit Positive
-------------------------------------------------------------
Moody's Investors Service said that the sale of the cosmetics
business to Coty Inc (Ba1 stable) is credit positive for
Hypermarcas S.A. (Ba2 stable) because proceeds will be mainly used
to reduce leverage and it also sets out a strong shift into the
pharma operations, a segment with superior resilience to economic
cycles and higher margins than the aggregate consumer portfolio.
MGI-MINAS: Moody's Confirms Ba1 Rating on Sr. Debt. 3rd Issuance
----------------------------------------------------------------
Moody's America Latina confirms the Ba1 (sf) global rating and
Aa2.br (sf) national scale rating of the third issuance of senior
debentures backed by re-performing ICMS taxes issued by MGI-Minas
Gerais Participacoes (MGI).
The senior debentures are backed by the right to receive 60% of
collections resulting from monthly payments of renegotiated ICMS
taxes (Imposto sobre Operacoes Relativas a Circulacao de
Mercadorias e Prestacao Servi‡os de Transporte Interestadual e
Intermunicipal e de Comunicacao) originally owed to the State of
Minas Gerais.
MGI is a public limited company almost wholly owned (99.8%) by the
State of Minas Gerais (Ba1).
Issuer: MGI - Minas Gerais Participacoes S.A. third issuance of
debentures backed by re-performing ICMS taxes
-- Senior Debenture: Confirm the Ba1 (sf) and Aa2.br (sf)
ratings; previously on Aug 12, 2015 placed on review for
downgrade.
RATINGS RATIONALE
The ratings confirmation is based on (1) the limited amount of
receivables that were refinanced more than once, (2) the
sufficiency of projected cash flows to repay the debt without a
trigger breach and (3) the State of Minas Gerais' ownership of MGI
and Moody's opinion that the state would be proactive in taking
the necessary measures to shore up this transaction' performance
in the event of stress.
Moody's analyzed the level of refinanced receivables within the
pool, to assess the potential of recurring delinquency by certain
tax payers. Of the total receivables outstanding, 60% of the
receivables have never been refinanced and only 6% of the pool has
been refinanced more than once, indicating that the level of
recurring delinquent obligors that seek multiple re-financing of
its debt is limited. As of July 2015, 87% of taxpayers were
current with their obligations and 9% were delinquent for less
than 30 days. The transaction performance supports the arguments
by MGI and the State of Minas Gerais that the refinanced
receivables has had no impact for noteholders, as these
receivables are performing again and generating cash flows.
The adjusted cash flow projections, based on the outstanding
receivables' contractual monthly flows and adjusted by an expected
mortality curve, show that the expected collections from the
monthly payments of the ICMS taxes will be sufficient to repay the
rated debt without a breach of the debt service coverage ratio
(DSCR) trigger. The projected DSCR is expected to remain above a
2.0x coverage through to the transaction maturity and therefore,
under this scenario, the available receivables will be sufficient
for full repayment of principal and interest on the debenture.
With the expected DSCR remaining above the trigger level, the need
of a potential support by the State of Minas Gerais is diminished.
Moody's will continue to closely monitor the level of refinanced
receivables, as the State of Minas Gerais can continue to
refinance receivables and in doing so reduce the amount of
receivables due before the legal final maturity date of the
debenture, compromising the cash flows of the transaction.
Although MGI is the sole obligor under the debentures and
investors have no recourse against the State of Minas Gerais in
the transaction, there is a close relationship between MGI and the
State of Minas Gerais, given the extent (1) of the state's
ownership of MGI and (2) of the portion it holds of the
transaction's subordinated debt. Moody's expects that the state
will continue to pro-actively take the necessary measures to
support the transaction's performance, through MGI's governing
bodies or as otherwise needed.
The transaction has performed within expectations, with an average
DSCR of 2.25x in the last 12-month period ending September 2015,
above the minimum requirement of 1.8x. The asset coverage ratio
as of September 2015 was 319%, higher than the 200% trigger level.
Loss and Cash Flow Analysis:
Moody's updated cash flow projections indicate that collections
will be sufficient to repay the debt principal and interest by the
transaction's maturity in August 2017, as the DSCR will remain
above 2.0x through that time, providing sufficient cash to repay
principal and interest on the debenture.
Stress Scenarios:
In its analysis Moody's applied an expected mortality curve to the
contractual installments, to derive its base-case expected cash
flows.
FACTORS THAT WOULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATING:
A factor that would lead to an upgrade is a significant
improvement in collateral performance. Factors that would lead to
a downgrade include a deterioration of the collateral performance
or a downgrade of the rating of the State of Minas Gerais.
PETROLEO BRASILEIRO: Weak Real Threatens Cash Generation
--------------------------------------------------------
The devaluation of the Brazilian real and Petroleo Brasileiro
S.A.'s (Petrobras, Ba2 stable) capital spending cuts will threaten
the company's ability to generate cash in the next years and
weaken its credit profile, says Moody's Investors Service.
Moody's notes that these factors, in conjunction with Petrobras'
refinancing risk and its inability to significantly reduce debt,
will stress the company's credit metrics for the foreseeable
future.
"Petrobras cut its capital spending plans for the next four years
to protect its cash, but starting in 2017 this strategy will hurt
the company by limiting production growth," says Nymia Almeida, a
Moody's Vice President and Senior Credit Officer. "Over 80% of
Petrobras' capital spending goes toward exploration and
production, and the 50% cut in 2016 alone, from 2014 levels, will
hinder these activities starting in 2017."
And in the meantime, the devaluation of the real, which has fallen
60% against the dollar since October 2014, is having an immediate
effect on Petrobras' cash flow generation because the company does
not use foreign exchange hedges and has limited ability to pass
though costs increases to final prices.
The weakened real affects all aspects of Petrobras' business, from
its revenues, interest expense and capital expenditures, to its
import of oil products, as the company does not produce enough to
meet local demand.
"We believe that the 28% devaluation of the real during the third
quarter of 2015 effectively eliminated the premiums between local
prices and international prices of gasoline and diesel, and that a
25% devaluation of the real would reduce the company's EBITDA by
half, if local prices are not adjusted accordingly," added
Almeida.
Petrobras' upcoming debt maturities pose another risk to its
already weakened credit profile. The company has roughly USD24
billion in debt maturing in 2016-17 compared with the
approximately USD25 billion that it keeps in cash at all times, of
which about USD10 billion is operating cash, according to the
report "Faltering Currency and Scaled Back Oil Development Poses
Cash Risk."
"We believe that Brazilian banks' ability to continue to lend to
Petrobras has declined and that the company will have to maintain
strong liquidity in a context of a weak Brazilian economy,
volatile oil prices, difficult prospects for asset sales and
political uncertainties."
PETROLEO BRASILEIRO: Worst Strike in 20Yrs Hurts Brazil Oil Output
------------------------------------------------------------------
Jeb Blount at Reuters reports that a four-day strike at Petroleo
Brasileiro S.A. gathered steam, cutting crude and natural gas
output from the No. 2 South American oil producer and threatening
to become the most disruptive walkout at the state-run oil company
in 20 years.
Petroleo Brasileiro SA, as Petrobras is formally known, said in a
securities filing that oil output in Brazil was about 140,000
barrels a day, or 6.5 percent below pre-strike levels of about 2.1
million barrels a day, according to Reuters.
Using contingency plans management restored production that was
cut by as much as 273,000 barrels a day, or 13 percent below pre-
strike levels on November 2, and by 178,000 barrels a day on
November 3, or 8.5 percent below levels before the strike began
November 1, Petrobras said, the report relays.
The strike is having a "significant" financial impact on Petrobras
a company source told Reuters adding that output cuts had not
changed significantly from November 3, the report discloses.
Reuters notes that the cuts have already caused the biggest
strike-induced hit to Petrobras' crude output since a 32-day
strike in 1995 that led to lines at gas stations and military
occupation of refineries. The latest strike is also likely to
increase pressure on a company hobbled by a corruption scandal and
struggling under $130 billion of debt, the largest in the world
oil industry, the report relays.
"This is serious because it is happening in the midst of Brazil's
worst economic crisis in decades and in the middle of Petrobras'
worst crisis ever," said Adriano Pires, head of the Brazilian
Infrastructure Institute, a Rio de Janeiro energy research
company, the report notes.
"It's like the unions are saying, 'Hey, Petrobras is in intensive
care. Let's pull the plug!" the report quoted Mr. Pires as saying.
Members of Brazil's national oilworkers federation said that
Petrobras was underestimating output losses, the report relays.
In a statement, Brazil's biggest oil union federation said
production cuts are as much as a quarter of Petrobras Brazilian
output, or just over 500,000 barrels a day.
The union, though, did admit that it has not cut output as much as
hoped, notes Reuters. Production from the giant Roncador offshore
oil field in Brazil's Campos Basin continued even after
production-vessel workers joined the strike, a union spokesman
said, denying media reports of an output shutdown.
Petrobras management has said in the past that it can maintain
operations with no impact to fuel supplies in Brazil for a week or
10 days at the most, Reuters says. It said it bought 82,000 cubic
meters (515,764 barrels) of gasoline from Brazilian petrochemical
company Braskem, bolstering supplies in November, the report
notes.
Strike aims go far beyond a call for an 18 percent salary
increase, Reuters discloses. They also seek to block planned
asset sales, reverse budget cuts and protect Petrobras' right to
lead the bulk of new offshore oil development.
Petrobras has offered an 8.1 percent salary increase, but wages
are not the key issue, union representatives said, the report
relays.
"This movement is a clear and open criticism of the government's
economic policies," said Deyvid Bacelar, a union activist and
worker representative on Petrobras' board of directors, the report
relays.
Those goals, some of which can only be guaranteed by Brazil's
Congress, will be hard for Petrobras to meet, notes the report.
Without $50 billion of planned assets sales and cuts to a five-
year investment plan that was recently the world's largest,
Petrobras risks being unable pay its massive debts, Chief
Executive Officer Aldemir Bendine told Congress last month, the
report discloses.
If prolonged, the strike will worsen the company's struggles to
raise output and reduce debt, the Standard & Poor's debt-rating
agency said, Reuters relays.
The government has little money or credit to help Petrobras as it
grapples with a gaping fiscal deficit, the report adds.
About Petroleo Brasileiro
Based in Rio de Janeiro, Brazil, Petroleo Brasileiro S.A. --
Petrobras (Brazilian Petroleum Corporation) -- explores for oil
and gas and it produces, refines, purchases, and transports oil
and gas products. The Company has proved reserves of about 14.1
billion barrels of oil equivalent and operates 16 refineries, an
extensive pipeline network, and more than 8,000 gas stations.
The Troubled Company Reporter-Latin America reported on March 6,
2015, that the deepening investigation into the alleged kickback
scheme at Petrobras has triggered concerns for the Brazilian banks
with exposures not only to the state-controlled oil company, but
also to its large base of suppliers, as well as the broader oil
and gas (O&G) and construction industries, says Moody's Investors
Service.
On March 12, 2015, the TCR-LA reported that Moody's Investors
Service said the corruption investigation into Petrobras will
negatively affect parts of the public and private sectors, but
government support for the company is likely to help contain the
credit-negative impact.
Moody's Investors Service has downgraded all ratings for
Petrobras, including a downgrade of the company's senior unsecured
debt to Ba2 from Baa3, and assigned a Ba2 Corporate Family Rating
to the company, the TCRLA reported on Feb. 27, 2015. Its failure
to estimate its losses from the alleged corruption scheme and
produce audited third-quarter results prompted Moody's to cut its
rating to junk, the report said.
Rival agency Standard & Poor's delivered a further blow on March
23 when it revised its outlook on the company from stable to
negative, the TCRLA reported on March 26, 2015.
On Feb. 10, 2015, TCRLA said Fitch Ratings has downgraded the
foreign and local currency Issuer Default Ratings (IDRs) and
outstanding debt ratings of Petrobras to 'BBB-' from 'BBB'.
Concurrently, Fitch has placed all of Petrobras' international and
national scale ratings on Rating Watch Negative.
==========================
C A Y M A N I S L A N D S
==========================
ACS CONSUMER: Shareholder to Hear Wind-Up Report on Nov. 23
-----------------------------------------------------------
The shareholder of ACS Consumer Debt Fund SPC Segregated Portfolio
A will hear on Nov. 23, 2015, the liquidator's report on the
company's wind-up proceedings and property disposal.
The company's liquidator is:
Fides Limited
c/o Dwight Dube
The Grand Pavilion, Commercial Centre, 2nd Floor
P.O. Box 10338 Grand Cayman
Cayman Islands KY1-1003
Telephone (345) 949 7232
AES PANAMA: Members to Hear Wind-Up Report on Nov. 12
-----------------------------------------------------
The members of AES Panama Holding, Ltd. will hear on Nov. 12,
2015, the liquidator's report on the company's wind-up proceedings
and property disposal.
The company's liquidator is:
James Kostura
c/o Maples and Calder, Attorneys-at-law
P.O. Box 309, Ugland House
Grand Cayman KY1-1104
Cayman Islands
AVAGO TECHNOLOGIES: Moody's Assigns Provisional Ba1 CFR
-------------------------------------------------------
Moody's Investors Service has issued provisional ratings for the
Corporate Family and debt instruments of Avago Technologies Cayman
Finance Ltd (Cayman). New Avago is a new legal entity that will
issue debt to fund Avago Technologies Ltd's proposed acquisition
of Broadcom Corp. The existing ratings on Avago Technologies
Finance Pte Ltd ("Avago") remain under review for upgrade pending
the closing of the Acquisition. The ratings of New Avago are
provisional ratings to reflect the uncertainty around the closing
of the Acquisition and the related debt issuance by New Avago.
RATINGS RATIONALE
New Avago's (P) Ba1 Corporate Family Rating (CFR) reflects the
combined company's considerable scale in revenues and research and
development and leading market positions in several product areas,
including RF filters for smartphones and connectivity chipsets.
Moreover, the more diversified end markets, with a broad portfolio
of products serving the wireless communications, wireless
infrastructure, enterprise storage and industrial end markets, and
the fab-lite operating model should lead to greater stability of
revenue and free cash flow over time.
The rating is constrained by the moderately high initial leverage
of about 3.5x Debt to EBITDA (Moody's adjusted, proforma) given
the significant execution risks in integrating Avago Technology
Ltd and Broadcom Corp. The combined company will have a revenue
base of about $15 billion, or about double the scale of the
individual companies. The debt capital structure will be
comprised primarily of secured debt, which limits financial
flexibility.
The positive outlook reflects Moody's expectation that Moody's
will see clear evidence of New Avago's successful integration of
the former Avago and Broadcom businesses without material business
disruption. Moreover, Moody's expects that New Avago will follow
its publicly-stated policy of prioritizing debt reduction and will
achieve most of the anticipated cost synergies, lifting the
margins of the former Broadcom operations toward those of the
former Avago. Based on this, leverage will rapidly improve, with
debt to EBITDA (Moody's adjusted) declining toward 2.5x by
calendar year end 2016.
The ratings could be upgraded if the company demonstrates clear
evidence of a successful integration and sustains leverage of
around 2.5x debt to EBITDA (Moody's adjusted). The ratings could
be pressured if the Acquisition receives regulatory approval
containing materially negative conditions, thus lowering our
expectations for potential operational improvements, or if the
integration leads to material operational disruption. Moreover,
if New Avago engages in shareholder-friendly actions prior to
meaningful debt reduction such that Moody's expects leverage to
remain above 3.5x debt to EBITDA (Moody's adjusted) the rating
could be downgraded.
The (P) Ba1 senior secured rating of the Senior Secured Term Loan
A, Senior Secured Term Loan B, and the Senior Secured Revolver, at
the same level as the CFR, reflects Moody's expectation of a
largely secured debt capital structure. New Avago has disclosed
that it may also issue unsecured debt. To the extent that a large
portion of New Avago's debt capital structure is unsecured, this
could lift the rating of the senior secured debt above that of the
CFR.
Assignments:
Issuer: Avago Technologies Cayman Finance Ltd.
Corporate Family Rating, Assigned (P)Ba1
Senior Secured Bank Credit Facility (Foreign Currency)
(Revolver), Assigned (P)Ba1, LGD3
Senior Secured Bank Credit Facility (Foreign Currency) (Term
Loan A), Assigned (P)Ba1, LGD3
Senior Secured Bank Credit Facility (Foreign Currency) (Term
Loan B1), Assigned (P)Ba1, LGD3
Outlook Actions:
Issuer: Avago Technologies Cayman Finance Ltd.
Outlook, Assigned Positive
Avago Technologies Cayman Finance Ltd (Cayman)is a new legal
entity, which will indirectly own Avago Technologies Ltd. and
Broadcom Corporation upon the completion of Avago's acquisition of
Broadcom. New Avago is an indirect subsidiary of Pavonia Ltd,
which will be renamed Broadcom Ltd upon closing of the
Acquisition.
Avago Technologies Finance Pte. Ltd (Avago Technologies Ltd's
rated debt issuer), co-headquartered in San Jose, California and
Singapore, designs, develops, manufactures and sells a broad array
of analog/mixed-signal semiconductor components for wireless
communications, storage, wired infrastructure, and industrial and
automotive electronics.
Broadcom Corporation, founded in 1991, is headquartered in Irvine,
California. With $8.6 billion of revenue for the twelve months
ended June 2015, Broadcom is a leading fabless semiconductor
supplier, addressing both wired and wireless transmission of
voice, video, data and multimedia.
CHINA MEDICAL: Ruling Sustaining Professionals' Claims Reversed
---------------------------------------------------------------
Kenneth M. Krys appeals from an order of the U.S. Bankruptcy Court
for the Southern District of New York sustaining the claims of
attorney-client privilege and work product protection asserted by
Paul, Weiss, Rifkind, Wharton & Garrison LLP and AlixPartners,
LLP.
Judge Ronnie Abrams of the United States District Court for the
Southern District of New York reversed the ruling of the
Bankruptcy Court and remanded the case for further proceedings.
The case is captioned IN RE: CHINA MEDICAL TECHNOLOGIES, INC.
KENNETH M. KRYS, the Foreign Representative of China Medical
Technologies, Inc., Appellant, v. PAUL, WEISS, RIFKIND, WHARTON,
GARRISON LLP, and ALIXPARTNERS, LLP, Appellees, NOS. 12-BR-13736
(REG), 15-CV-0167 (RA).
A full-text of the Opinion and Order dated September 30, 2015 is
available at http://is.gd/xB3Ifwfrom Leagle.com.
Kenneth M. Krys, Appellant, represented by Eric L. Lewis, Esq. --
eric.lewis@lewisbaach.com -- Lewis Baach PLLC & Jack B. Gordon,
Esq. -- jack.gordon@lewisbaach.com -- Lewis Baach Kaufmann
Middlemiss
Paul, Weiss, Rifkind, Wharton & Garrison LLP, Appellee,
represented by Daniel John Toal, Esq. -- dtoal@paulweiss.com --
Paul, Weiss, Rifkind, Wharton & Garrison LLP, Robert A. Atkins,
Esq. -- ratkins@paulweiss.com -- Paul, Weiss, Rifkind, Wharton &
Garrison LLP, Stephen J. Shimshak, Esq. -- sshimshak@paulweiss.com
-- Paul, Weiss, Rifkind, Wharton & Garrison & Robert Neil Kravitz,
Esq. -- rkravitz@paulweiss.com -- Paul, Weiss, Rifkind, Wharton &
Garrison LLP.
About China Medical
China Medical Technologies Inc., a maker of diagnostic products,
filed a Chapter 15 bankruptcy petition in New York to locate money
fraudulently transferred by its principals.
The Debtor, which has been taken over by a trustee, is undergoing
corporate winding-up proceedings before the Grand Court of the
Cayman Islands. Kenneth M. Krys, the joint official liquidator,
wants U.S. courts to recognize the Cayman proceeding as the
"foreign main proceeding" The liquidator filed a Chapter 15
petition for China Medical (Bankr. S.D.N.Y. Case No. 12-13736) on
Aug. 31, 2012. Curtis C. Mechling, Esq., at Stroock & Stroock &
Lavan, LLP, in New York, serves as counsel.
Cosimo Borrelli and Yuen Lai Yee (Liz) on Nov. 29, 2012, were
appointed as liquidators of China Medical Technologies Inc.
The liquidators may be reached at:
Cosimo Borrelli
Yuen Lai Yee (Liz)
Level 17, Tower 1
Admiralty Centre
18 Harcourt Road
Hong Kong
EDMOND DE ROTHSCHILD: Members Receive Wind-Up Report
----------------------------------------------------
The members of Edmond De Rothschild SPC received on Nov. 3, 2015,
the liquidator's report on the company's wind-up proceedings and
property disposal.
The company's liquidator is:
Appleby Trust (Cayman) Ltd.
c/o Richard Gordon
Telephone: +1 (345) 949 4900
75 Fort Street
P.O. Box 1350 Grand Cayman KY1-1108
Cayman Islands
JAT CAPITAL INTERMEDIATE: Members Receive Wind-Up Report
--------------------------------------------------------
The members of Jat Capital Intermediate Fund, Ltd. received on
Nov. 2, 2015, the liquidator's report on the company's wind-up
proceedings and property disposal.
The company's liquidator is:
CDL Company Ltd.
P.O. Box 31106 Grand Cayman KY1-1205
Cayman Islands
JAT CAPITAL MASTER: Members Receive Wind-Up Report
--------------------------------------------------
The members of Jat Capital Master Fund, Ltd. received on Nov. 2,
2015, the liquidator's report on the company's wind-up proceedings
and property disposal.
The company's liquidator is:
CDL Company Ltd.
P.O. Box 31106 Grand Cayman KY1-1205
Cayman Islands
JAT CAPITAL OFFSHORE: Members Receive Wind-Up Report
----------------------------------------------------
The members of Jat Capital Offshore Fund, Ltd. received on Nov. 2,
2015, the liquidator's report on the company's wind-up proceedings
and property disposal.
The company's liquidator is:
CDL Company Ltd.
P.O. Box 31106 Grand Cayman KY1-1205
Cayman Islands
JAT SELECT: Members Receive Wind-Up Report
------------------------------------------
The members of Jat Select Intermediate Fund, Ltd. received on
Nov. 2, 2015, the liquidator's report on the company's wind-up
proceedings and property disposal.
The company's liquidator is:
CDL Company Ltd.
P.O. Box 31106 Grand Cayman KY1-1205
Cayman Islands
JAT SELECT FUND: Members Receive Wind-Up Report
-----------------------------------------------
The members of Jat Select Fund, Ltd. received on Nov. 2, 2015, the
liquidator's report on the company's wind-up proceedings and
property disposal.
The company's liquidator is:
CDL Company Ltd.
P.O. Box 31106 Grand Cayman KY1-1205
Cayman Islands
JAT SELECT MASTER: Members Receive Wind-Up Report
-------------------------------------------------
The members of Jat Select Master Fund, Ltd. received on Nov. 2,
2015, the liquidator's report on the company's wind-up proceedings
and property disposal.
The company's liquidator is:
CDL Company Ltd.
P.O. Box 31106 Grand Cayman KY1-1205
Cayman Islands
KIRK CAYMAN: Members Receive Wind-Up Report
-------------------------------------------
The members of Kirk Cayman Limited received on Nov. 3, 2015, the
liquidator's report on the company's wind-up proceedings and
property disposal.
The company's liquidator is:
Stuart Sybersma
c/o Marcin Czarnocki
Deloitte & Touche
Citrus Grove Building, 4th Floor
Goring Avenue George Town KY1-1109
Cayman Islands
Telephone: +1 (345) 814 2228
Facsimile: +1 (345) 949 8258
LORELEI LIMITED: Shareholders to Hear Wind-Up Report on Nov. 16
---------------------------------------------------------------
The shareholders of Lorelei Limited will hear on Nov. 16, 2015, at
11:00 a.m., the liquidator's report on the company's wind-up
proceedings and property disposal.
The company's liquidator is:
Maricorp Services Ltd.
c/o Steven J. Barrie
Telephone: 345-949-9710
P.O. Box 2075 Grand Cayman KY1-1105
Cayman Islands
MASTIC INVESTMENTS: Shareholders Receive Wind-Up Report
-------------------------------------------------------
The shareholders of Mastic Investments Limited received on Nov. 4,
2015, the liquidator's report on the company's wind-up proceedings
and property disposal.
The company's liquidator is:
Midway Road Funding Ltd.
c/o Maples Corporate Services Limited
P.O. Box 309, Ugland House
South Church Street, George Town
Grand Cayman KY1-1104
Cayman Islands
MULTICAT MEXICO: S&P Lowers Rating on Class C Notes to CCC-
-----------------------------------------------------------
Standard & Poor's Ratings Services lowered to 'CCC- (sf)' from
'B- (sf)' its rating on MultiCat Mexico Ltd.'s series 2012-I class
C notes. The notes remain on CreditWatch with negative
implications. S&P placed the class C notes on CreditWatch on
Oct. 28, 2015, indicating that a triggering event may have
occurred following Hurricane Patricia making landfall on Oct. 23,
2015, near Manzanillo in Mexico. On Oct. 29, 2015, Swiss
Reinsurance Co. Ltd. submitted an event notice to the calculation
agent AIR Worldwide Corp., in line with S&P's expectations, and
asked AIR to generate an event report.
S&P is downgrading the class C notes because it believes that in
the absence of any significant changes in the reported minimum
central pressure by the National Hurricane Center, a default
appears to be inevitable within six months.
AIR has 15 business days after the hurricane event parameters date
to publish its event report. This date is defined as either the
release date of the first tropical cyclone report by the National
Hurricane Center (NHC) containing all the information necessary to
determine if Hurricane Patricia is a covered event, or 120 days
after Hurricane Patricia made landfall. Last year, Hurricane
Odile made landfall on Sept. 15, 2014 and the NHC published its
report on Dec. 19, 2014. S&P expects similar timings for the
tropical cyclone report for Hurricane Patricia.
In addition, the notes were due to mature on Dec. 4, 2015. Given
the submission of the event notice, S&P now expects Swiss Re to
extend the maturity of the notes within the next 30 days to allow
AIR to publish its event report. The annual extension spread will
be 3.0%. This will be considered a coupon stepdown from the
current interest spread of 7.5% in accordance with S&P's criteria
"Rating Natural Peril Catastrophe Bonds: Methodology And
Assumptions" and "Principles For Rating Debt Issues Based On
Imputed Promises." If S&P has not received an event report before
the notes' maturity is extended, it expects to lower the rating on
the class C notes to 'D (sf)' shortly after Dec. 4, 2015.
Based on the event definition in the transaction documents, a
triggering event occurs when the central pressure of the hurricane
is equal to or lower than 932 millibars. S&P reviewed an update
from the NHC that indicated a reading of 920 millibars at one
station located at 19.4N 105.0W, which falls within the covered
area. The transaction documents state that noteholders would lose
50% of their principal amount if the central pressure is between
932 and 920 millibars, and 100% if lower than or equal to 920
millibars.
NORTHERN ENERGY: Members Receive Wind-Up Report
-----------------------------------------------
The members of Northern Energy Exploration Ltd. received on
Nov. 3, 2015, the liquidator's report on the company's wind-up
proceedings and property disposal.
The company's liquidator is:
Appleby Trust (Cayman) Ltd.
c/o Richard Gordon
75 Fort Street
P.O. Box 1350 Grand Cayman KY1-1108
Cayman Islands
Telephone: +1 345 949 4900
=========
C H I L E
=========
CODELCO: Workers Sign Pact on Strategic Projects
------------------------------------------------
EFE News reports that Chile's Codelco, the world's largest copper
producer, and its workers signed a pact expressing their
commitment to a series of strategic projects that are vital to the
state-owned mining giant's future, the company's chief executive
said.
Chief Executive Officer Nelson Pizarro said during the signing
ceremony for the "Strategic Pact with Chile" that if these
projects were not completed "Codelco would produce around 43
percent of current output by 2025 and 22 percent a few years
later," according to EFE News.
The report notes that Codelco, which by law gives all of its
profits to the state, produces around 1.7 million tons of copper
annually.
"We will cease to be the world's leading copper producer very
soon," Mr. Pizarro said, noting that the strategic projects will
modernize mining processes with a view to maintaining or
increasing production levels, the report relays.
Those projects, which include converting its open-pit Chuquicamata
mine into an underground mine, developing a new mine level at El
Teniente and expanding its Andina mine, among other plans, are
expected to require an investment outlay of $25 billion, the
report notes.
The report discloses that amid a context of lower copper prices,
Codelco in recent days announced a reduction in its 2015-2019
investment program to $22 billion, down from an original level of
$25 billion, although it cautioned that its strategic projects
were untouchable.
The copper giant has begun laying off employees due to a decline
in revenues and net income, although the work force reductions
have thus far only affected executive and supervisory staff, the
report adds.
===============
C O L O M B I A
===============
CREDIVALORES SAS: S&P Affirms 'B+' LT ICR; Outlook Stable
---------------------------------------------------------
Standard & Poor's Ratings Services said it affirmed its 'B+' long-
term and 'B' short-term issuer credit ratings on Credivalores -
Crediservicios SAS. The outlook remains stable.
The issuer credit ratings on Credivalores reflect S&P's assessment
of its "adequate" business position (thanks to a diversified
business mix and good market position), its "adequate" capital and
earnings (mainly driven by S&P's forecasted RAC ratio of 8.1%),
and its "adequate" risk position (underpinned by its lending and
underwriting standards, which are stronger than those of other
NBFIs we rate in the region). The ratings also reflect S&P's view
of its "moderate" funding, underscored by a concentrated funding
structure, and "adequate" liquidity. The stand-alone credit
profile (SACP) remains 'b+'.
The stable outlook over the next 12 to 18 months reflects S&P's
expectation that Credivalores will maintain an RAC ratio of about
8.1%, manageable asset quality metrics, and a concentrated funding
structure with relatively low financial flexibility. The outlook
also incorporates its "adequate" business position, reflected in a
good market position and diversified business mix.
S&P could lower the ratings over the next 12 to 18 months if
Credivalores' low financial flexibility drastically pressures the
company's liquidity or if the firm's asset quality deteriorates
significantly. The latter could occur if the company enters
unknown markets or riskier segments of the economy, relaxing its
underwriting standards in pursuit of credit growth, which could
yield NPAs well above its main competitors (more than 10% NPAs,
plus credit losses). A rise in NPAs could also increase loan loss
provisions and thus affect internal capital generation. In that
case, S&P's projected RAC ratio could stand consistently below 7%
and could also trigger a negative rating action.
S&P could raise the ratings in the next 12 to 18 months if the
firm continues to diversify its funding and gains financial
flexibility by reducing the amount of unencumbered assets that it
could pledge for additional funding sources. S&P could also raise
the ratings if it sees an important enhancement in the firm's
business position, reflected in more diversified business lines
and an improved market position.
===================================
D O M I N I C A N R E P U B L I C
===================================
DOMINICAN REP: Business Must Meld Interests With Social Demands
---------------------------------------------------------------
Dominican Today reports that Dominican Industries Association
(AIRD) president Campo De Moya called on the business community to
combine their interests with social demands, to generate social
benefit, "because it's society to which we owe our expansion,
growth and consolidation."
The industrialist, speaking to mark the AIRD's 53rd anniversary in
a luncheon at the Hotel Jaragua with the presence of president
Danilo Medina, also asked to leave the paternalistic regime
behind, "to which we have become accustomed," a system in which he
affirms business leaders expect the government to solve
everything, according to Dominican Today.
The report relays that Mr. De Moya demanded that his colleagues
become partners to define and build win-win solutions.
* * *
As reported in Troubled Company Reporter-Latin America on May 22,
2015, Standard & Poor's Ratings Services raised its long-term
sovereign credit ratings on the Dominican Republic (DR) to 'BB-'
from 'B+'.
The outlook is stable. At the same time, S&P affirmed the 'B'
short-term rating. S&P also raised its transfer and
convertibility (T&C) assessment to 'BB+' from 'BB'.
=============
J A M A I C A
=============
JAMAICA: Government to Use Stock Market in Privatization Program
----------------------------------------------------------------
RJR News reports that Finance Minister Dr. Peter Phillips has
announced that the Jamaican Government will be using a different
approach to its ongoing privatization program.
Dr. Phillips disclosed that the Administration will be using the
stock market as a vehicle for privatizing some of its assets,
"especially when the index is at these record setting levels,"
according to RJR News.
The report notes that Dr. Phillips said the intention was to get
the private sector more involved in the delivery of services.
Dr. Phillips was speaking at the launch of Moneague Consultants in
Kingston.
* * *
As reported in Troubled Company Reporter-Latin America on July 29,
2015, Standard & Poor's Ratings Services assigned its 'B' issue
rating on Jamaica's up to US$2 billion in bonds issued in two
tranches. The first tranche is for up to US$1,350 million due in
2028. The second tranche is for up to US$650 million due in 2045.
The government will use the proceeds to purchase debt that Jamaica
owes to Venezuela as well as to finance the government's 2015/2016
budget.
=======
P E R U
=======
PESQUERA EXALMAR: Moody's Lowers CFR to B3; Outlook Negative
------------------------------------------------------------
Moody's Investors Service downgraded to B3 from B2 Pesquera
Exalmar, S.A.A.'s corporate family and senior unsecured ratings.
The outlook is negative.
RATINGS RATIONALE
The downgrade reflects Exalmar's current weak credit metrics and
our expectation that they will further tighten as a result of the
high likelihood that a modest to strong El Ni¤o will lead the
Peruvian authorities to reduce or cancel the 2nd fishing season of
2015. This will impact Exalmar's revenues and profitability for a
second consecutive year leading its leverage to remain around 6.5
times in the next 12-18 months.
Exalmar's ratings reflect the company's limited operating scale
and modest business diversification compared to regional peers as
well as other seafood and protein-industry companies; its exposure
to volatile volume and price trends of the commoditized global
fishmeal and fish oil market; the sensitivity of cash flows to
climatic conditions and regulation; and a pronounced cash flow
seasonality. These credit negatives are to some extent offset by
Exalmar's position as the third largest fishmeal producer in Peru,
the world's leading fishmeal nation; a successful operating
history in its current business configuration; and some revenue
diversification from its growing direct human consumption
business.
The company's debt/EBITDA has remained over 7 times during 2015
and was 7.2 times as of Sept. 30, 2015. Under Moody's base case
scenario that assumes the cancelation of the second fishing season
of this year, we estimate leverage to remain between 6.5 times and
7 times by year end 2015 and to remain above 6.5 times by year-end
2016.
Exalmar's liquidity is negatively affected by cash flow
seasonality caused by the working capital build-up that tends to
occur during Peru's two anchovy fishing seasons in the second and
fourth calendar quarters and the subsequent cash inflow when
inventories are shipped in the first and third quarters. Exalmar
typically funds these working capital needs with uncommitted
credit facilities with local and international banks. In
addition, the company has a USD20 million 2-year committed credit
facility. Moody's notes that the use of committed credit
facilities is not a common practice in Latin America so we
positively view Exalmar's actions to ensure a strong alternate
source of liquidity.
Exalmar reported cash on hand of USD8.8 million as of Sept. 30,
2015 that can cover only 16% short-term debt. Short-term debt is
mostly comprised by working capital related debt that is secured
by inventory and receivables. The company has a conservative debt
maturity profile with no major debt amortizations until 2020 when
the USD200 million global notes are due.
The negative ratings outlook reflects the potential impact on
Exalmar's weak credit metrics and liquidity from weather events
that could affect fishing quotas in Peru. The outlook could be
stabilized if Exalmar's operations, liquidity and credit metrics
show improvement despite the cancelation of the second fishing
season in 2015.
In the long term, upward ratings pressure could emerge if the
company is able to maintain positive cash flow generation while
maintaining robust credit metrics and strong liquidity on a
sustainable basis with debt/EBITDA below 4.0 times.
A prolonged period of negative free cash flow generation with
material additional external funding needs, for example because of
the impacts of quotas cancellation, an abrupt deterioration of
global fishmeal demand or anchovy supply or because a debt
financed quota acquisition could cause downward pressure on the
ratings. An increase in adj. debt/EBITDA over 7.0 times for a
prolonged period of time could also lead to a downgrade.
The principal methodology used in this rating was Global Protein
and Agriculture Industry published in May 2013.
Founded in 1992, Pesquera Exalmar, S.A.A. is a Peruvian fishing
company which produces fishmeal and fish oil used for indirect
human consumption. In addition, the company also sells fresh and
frozen fish (mackerel, horse mackerel, giant squid, and mahi-mahi)
for direct human consumption. Pesquera Exalmar has a 6.54%
assigned quota in the north-center and 4.46% in the south of Peru
and the ability to process third-party catch, which increases its
overall participation in the market. For the twelve months ended
Sept. 30, 2015, the company reported revenues of USD169 million
and EBITDA of 36.2 million.
======================
P U E R T O R I C O
======================
PUERTO RICO ELECTRIC: Enters Support Deal with Ad Hoc Group
-----------------------------------------------------------
The Puerto Rico Electric Power Authority has entered into a
restructuring support agreement with the Ad Hoc Group of PREPA
bondholders, comprising traditional municipal bond investors and
hedge funds, its fuel line lenders and the Government Development
Bank for Puerto Rico. The restructuring support agreement
formalizes the previously announced agreements on economic terms
between PREPA, the Ad Hoc Group and the fuel line lenders in
September 2015.
"We are making significant progress in transforming PREPA and the
formalization of our agreement solidifies the support of key
creditors, and will help facilitate a sustainable capital
structure for PREPA," said Lisa Donahue, Chief Restructuring
Officer. "We are working to build a strong financial foundation
for PREPA and we are continuing constructive negotiations with our
monoline insurers in order to achieve a consensual recovery plan.
The financial measures and agreements we are working to implement
are strengthening PREPA and are in the best interests of all
stakeholders."
"We are confident that the PREPA Revitalization Act provides the
necessary support to transform PREPA for the benefit of our
employees, their families, the people and the businesses of Puerto
Rico. We are building support for PREPA's transformation and
establishing a stronger entity that ensures Puerto Ricans have a
reliable power utility that they can depend upon for generations
to come," commented Harry Rodriguez, Chairman of PREPA's Governing
Board.
The restructuring support agreement provides a structured
framework to implement the previously announced economic
agreements, and is designed to provide PREPA with five year debt
service relief of more than $700 million and a permanent reduction
in PREPA's principal debt burden of more than $600 million. The
agreement also outlines other elements of PREPA's recovery plan,
including new governance standards, operational improvements, rate
structure proposal and a capital plan.
The material economic terms of the agreement include:
The Ad Hoc Group will exchange all of their debt for new
securitization notes and receive 85% of their existing claims in
new securitization bonds, which must receive an investment grade
rating.
Bondholders will have the option to receive securitization bonds
that will pay cash interest at a rate of 4.0% - 4.75% (depending
on the rating obtained) ("Option A Bonds") or convertible capital
appreciation securitization bonds that will accrete interest at a
rate of 4.5% - 5.5% for the first five years and pay current
interest in cash thereafter ("Option B Bonds").
Option A Bonds will pay interest only for the first five years,
and Option B Bonds will accrete interest but not receive any cash
interest during the first five years.
All uninsured bondholders will have an opportunity to participate
in the exchange.
Ad Hoc Group will negotiate with PREPA in good faith to backstop a
financing on terms to be mutually agreed that will allow for a
cash tender for bonds held by non-forbearing creditors.
Fuel line lenders will have the option to convert existing credit
agreements into term loans with a fixed interest rate of 5.75% per
annum, to be repaid over 6 years in accordance with an agreed upon
schedule or exchange all or part of principal due under the
existing credit agreements for new securitization bonds to be
issued on the same terms described above.
PREPA's debts owed to the Government Development Bank for Puerto
Rico will be treated in substantially the same manner as those
owed to the fuel line lenders.
PREPA continues to negotiate with its monoline bond insurers with
the goal of reaching an agreement on a consensual recovery plan
among all of its major financial stakeholders.
* * *
The Troubled Company Reporter on Feb. 4, 2015 reported that
Standard & Poor's Ratings Services said it maintained its 'CCC'
rating on the Puerto Rico Electric Power Authority's (PREPA) power
revenue bonds on CreditWatch with negative implications. S&P
originally placed the rating on CreditWatch on June 18, 2014.
On Dec. 15, 2014, TCRLA reported that Fitch is maintaining the
$8.6 billion of Puerto Rico Electric Power Authority (PREPA) power
revenue bonds on Negative Rating Watch. The bonds are currently
rated 'CC'.
As reported in the Troubled Company Reporter on Sept. 19, 2014,
Moody's Investors Service has downgraded the rating for Puerto
Rico Electric Power Authority's (PREPA) $8.8 billion of Power
Revenue Bonds to Caa3 from Caa2. This rating action concludes the
rating review that Moody's initiated on July 1, 2014. PREPA's
rating outlook is negative.
===========================
V I R G I N I S L A N D S
===========================
MIG LLC: Complaint Filed vs. Shenton Park to Stop BVI Liquidation
-----------------------------------------------------------------
MIG, LLC and ITC Cellular, LLC, on Aug. 19, 2015, commenced an
adversary proceeding before the U.S. Bankruptcy Court for the
District of Delaware to seek:
(a) a declaration that the automatic stay operates to prevent
Shenton Park Company, Inc. from taking actions to have a
liquidator appointed over the Debtors' sole equity holder,
Caucuscom Ventures L.P. or extension of the automatic stay under
Section 362(a) of the Bankruptcy Code to such action; and/or
(b) a temporary restraining order and preliminary injunction
pursuant to Section 105(a) of the Bankruptcy Code, Rules 7001(7)
and 7065 of the Federal Rules of Bankruptcy Procedure, and Rule 65
of the Federal Rules of Civil Procedure, enjoining Shenton Park
during the pendency of the Chapter 11 Cases from proceeding with
prosecution of and requiring them to take all actions necessary to
stay, adjourn, or otherwise withdraw the Application for Winding
Up and Appointment of Liquidator (the "BVI Application") filed by
Shenton Park in the British Virgin Islands, Case Number BVIHCM
2015/0075 (the "BVI Liquidator Action"), which apparently seeks
the winding up and appointment of a liquidator over Caucuscom.
The Debtors believe that Shenton Park's efforts to seek
liquidation of Caucuscom, would be devastating to the Debtors'
ability, as debtors-in-possession, to operate their business,
administer their Chapter 11 Cases, and negotiate a plan of
reorganization that maximizes the value of the Debtors' estates.
Thus, the Debtors have commenced the adversary proceeding to
protect the Debtors' estates.
Caucuscom owns 100% of the membership interests in MIG. The
Debtors do not believe that Caucuscom has any assets other than
its membership interests in MIG.
Shenton Park is a BVI company controlled by Swiss Partners
Advisors Ltd., as Trustee. Shenton Park, along with Yola
Investments S.a.r.l. ("Yola") and Gtel L.P. ("Gtel") are limited
partners of Caucuscom.
MIG owns 100% of the membership interests in debtor ITC Cellular.
ITC Cellular in turn owns 46% of the membership interests of non-
debtor International Telcell Cellular, LLC ("International
Telcell"). International Telcell, directly and indirectly through
its wholly owned non-debtor subsidiary, Telcell Wireless, LLC,
owns all the issued and outstanding equity interests of non-debtor
Magticom Ltd., the leading mobile telephone company in the
Republic 67 of Georgia. The remaining ownership stake of
International Telcell is held 51% by Dr. George Jokhtaberidze, a
Georgian national who founded Magticom, and 3% by Gemstone
Management Ltd., an entity formed by certain former management of
Magticom.
The Debtors' value is derived almost solely from their interests
in International Telcell and, indirectly, Magticom.
The Second Amended and Restated Limited Liability Company
Agreement of International Telcell Cellular, LLC, dated January
15, 2009 (the "International Telcell LLC Agreement") provides that
Dr. Jokhtaberidze and the Debtors exercise joint management
control over International Telcell regarding all key decisions
related to the management of Magticom on a 50/50 basis, provided
that certain change of control provisions have not been triggered.
Both the Debtors and Dr. Jokhtaberidze are bound by non-alienation
and change of control provisions regarding their interests in
Magticom. These provisions, as they relate to the Debtors, are
triggered by the occurrence of certain events with respect to
certain entities in MIG's and ITC Cellular's ownership chain (each
an "ITC Cellular Change of Control").
Counsel to the Debtors, Dennis A. Meloro, Esq., at Greenberg
Traurig, LLP, asserts that although Caucuscom is not a debtor in
the Chapter 11 cases, should the BVI Liquidator Action continue
against Caucuscom, the Debtors' restructuring efforts will be
entirely frustrated, as the value of the Debtors' estates would be
severely diminished if the BVI Liquidator Action in fact causes an
ITC Cellular Change of Control.
Mr. Meloro notes that if an ITC Cellular Change of Control occurs,
the chances of a successful reorganization will be substantially
impaired, if not foreclosed entirely. He avers that the Debtors'
right to receive the critical income stream will be eliminated,
and their right to pursue legal action to protect that income
stream will be eradicated. In addition, Mr. Meloro points out, the
value of the equity interests comprising the Debtors' key assets -
- their direct and indirect ownership of International Telcell and
Magticom -- will be substantially diminished.
A copy of the complaint is available for free at:
http://bankrupt.com/misc/MIG_LLC_473_Adv_Pro_vs_Shenton.pdf
The Debtors' attorneys:
GREENBERG TRAURIG, LLP
Dennis A. Meloro, Esq.
1007 North Orange Street, Suite 1200
Wilmington, DE 19801
Telephone: (302) 661-7000
Facsimile (302) 661-7360
E-mail: melorod@gtlaw.com
- and -
Nancy A. Mitchell, Esq.
Maria J. DiConza, Esq.
200 Park Avenue
New York, NY 10166
Telephone: (212) 801-9200
Facsimile: (212) 801-6400
E-mail: mitchelln@gtlaw.com
diconzam@gtlaw.com
* * *
According to a court filing, the parties to the Shenton Park
Adversary Proceeding have agreed on, and the Court has approved, a
scheduling order, and discovery and briefing is underway. A
hearing is scheduled before the Court on Dec. 3, 2015, to
determine whether a "change of control" has occurred and whether
Shenton Park's BVI filing or appointment of a liquidator for
Caucuscom violates or would violate the automatic stay or should
be enjoined.
About MIG LLC
Formerly operating under the name "Metromedia International Group,
Inc.," MIG LLC -- http://www.migllc-group.com/-- owned and
operated and sold dozens of companies in diverse industries,
including entertainment, photo finishing, garden equipment and
sporting goods, until the late 1990s. In 1997 and 1998, MIG
consummated the sale of substantially all of its U.S.-based
entertainment assets and began focusing on expanding into emerging
communications and media businesses. By 2005, all of MIG's
operating businesses were located in the Republic of Georgia and
operated through its subsidiaries. MIG LLC and affiliate ITC
Cellular, LLC, filed for Chapter 11 bankruptcy protection on June
30, 2014. The cases are currently jointly administered under
Bankr. D. Del. Lead Case No. 14-11605. As of the bankruptcy
filing, MIG's sole valuable asset, beyond its existing cash, is
its indirect interest in Magticom Ltd. The cases are assigned to
Judge Kevin Gross. MIG LLC disclosed $15.9 million in assets and
$254 million in liabilities.
Headquartered in Tbilisi, Georgia, Magticom is the leading mobile
telephony operator in Georgia and is also the largest telephone
operator in Georgia. Magticom serves 2.4 million subscribers with
a network that covers 97% of the populated regions in Georgia.
Magticom is owned by International Telcell Cellular, LLC, which is
46% owned by MIG unit ITC Cellular, 51% owned by Dr. George
Jokhtaberidze, and 3% owned by Gemstone Management Ltd. Formerly
known as MIG, Inc., MIG was a debtor in a previous case (Bankr. D.
Del. Case NO. 09-12118). It obtained approval of its
reorganization plan in November 2010.
The Debtors have tapped Greenberg Traurig LLP as counsel, Fox 69
Rothschild Inc. as financial advisor; Cousins Chipman and Brown,
LLP as conflicts counsel; and Prime Clerk LLC as claims and notice
agent and administrative advisor. The Debtors have retained
Natalia Alexeeva as chief restructuring officer.
A three-member panel has been appointed in these cases to serve as
the official committee of unsecured creditors, consisting of
Walter M. Grant, Paul N. Kiel, and Lawrence P. Klamon
***********
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.
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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
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* * * End of Transmission * * *