/raid1/www/Hosts/bankrupt/TCRLA

/raid1/www/Hosts/bankrupt/TCRLA_Public/160129.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, January 29, 2016, Vol. 17, No. 20 Headlines A N T I G U A & B A R B U D A ANTIGUA & BARBUDA: In Asset Swap to Settle Debt to Benefits Scheme A R G E N T I N A FIDEICOMISO FINANCIERO XIV: Moody's Withdraws C Rating on Certs FIDEICOMISO FINANCIERO XIII: Moody's Withdraws C Ratings on Certs B A R B A D O S MONTICELLO INSURANCE: Moody's Puts Ba1 IFS Rating Under Review B R A Z I L BROOKFIELD INCORPORACOES: Moody's Cuts Corp Family Rating to 'B3' USIMINAS COMMERCIAL: Moody's Cuts Sr. Unsec. Notes Rating to Caa1 USINAS SIDERURGICAS: Moody's Cuts Corporate Family Ratings to Caa1 C A Y M A N I S L A N D S AMERICAN GENERAL: Shareholders Receive Wind-Up Report ASCEND TRADING: Shareholders Receive Wind-Up Report CREP INVESTMENT I: Shareholder Receives Wind-Up Report CREP INVESTMENT K: Shareholder Receives Wind-Up Report CRYSTAL CLO: Shareholders Receive Wind-Up Report GS STRUCTURED: Shareholders Receive Wind-Up Report GSAM CREDIT: Shareholders Receive Wind-Up Report NOUVELAIR TUNISIE: Shareholders Receive Wind-Up Report SIGNUM BLUE: Shareholders Receive Wind-Up Report SIGNUM BLUE II: Shareholders Receive Wind-Up Report SIGNUM MENA: Shareholders Receive Wind-Up Report SIGNUM MIG I: Shareholders Receive Wind-Up Report SIGNUM PLATINUM II: Shareholders Receive Wind-Up Report VENTURE II: Shareholders Receive Wind-Up Report ZAIS ZEPHYR A-2: Shareholders Receive Wind-Up Report D O M I N I C A N R E P U B L I C DOMINICAN REP: Opposition Pull Out Major Blow to Electricity Pact * DOMINICAN REP: Exports to Climb From US$9.6BB to US$10B This Yr. * DOMINICAN REPUBLIC: Employers List Hurdles to Wage Hike M E X I C O DOCUFORMAS SAPI: S&P Affirms 'B+' Rating; Outlook Stable MEXICO: Unemployment Rate Climbs to 4.4 pct. in December P A R A G U A Y PARAGUAY: Fitch Affirms 'BB' IDR; Outlook Stable P U E R T O R I C O DF SERVICING: Meeting of Creditors Set for Feb. 1 PUERTO RICO: Senate Dems Pressure GOP on Bankruptcy Option PUERTO RICO ELECTRIC: Debt Restructuring Pact Extended to Feb. 16 - - - - - =============================== A N T I G U A & B A R B U D A =============================== ANTIGUA & BARBUDA: In Asset Swap to Settle Debt to Benefits Scheme ------------------------------------------------------------------ Caribbean360.com reports that Prime Minister Gaston Browne has announced that government has reached an agreement with the Medical Benefits Scheme (MBS) to clear its debt to the institution. Governments has amassed EC$250 million (US$92.5 million) in debt to MBS over the years, according to Caribbean360.com. "Even though Central Government has the right to pursue a set-off of these debts, we have agreed with the Board of MBS to a debt for asset swap to include Mount St. John Medical Centre and the government's shares in the Cancer Centre. This will eliminate the debt in its entirety," Minister Browne said during the Budget presentation, the report notes. The Prime Minister said his government is committed to paying contributions to both MBS and Social Security, and to ensuring that the people of Antigua and Barbuda are provided world-class living standards, the report discloses. "We have already demonstrated this commitment with investments in medical equipment and supplies to the Mount St. John Medical Centre, with the successful eye care program, and with scholarships to train doctors and nurses," Minister Browne said, the report relates. "My government has not corruptly gambled MBS monies in failed investment schemes," Minister Browne added. MBS was established as a special fund to provide financial and other assistance towards the healthcare cost of the nation, the report notes. Minister Browne said the Scheme is therefore "legally responsible for funding healthcare for all citizens and residents, with supplemental support from Central Government," the report notes. "It was not intended to be an investment Fund to carry hundreds of millions in Government securities on its books. The Medical Benefits' obligation, to fund healthcare has not been fully met, leaving Central Government to cover these costs, which far exceed the amounts payable to MBS," he added, the report relays. The Prime Minister also announced that his government has agreed to establish a monthly standing order to cover contributions to MBS. A payment of EC$2.7 million (US$1 million) has been remitted to commence payments for 2016, a government statement said, the report adds. * * * As reported in the Troubled Company Reporter-Latin America on September 23, 2014, The Daily Observer said that Antigua & Barbuda could soon find itself in the company of Japan, Zimbabwe, and Greece, the countries with the highest national debts. In the January 2014 budget presentation, the former administration indicated that the nation's debt was 87 per cent of GDP, according to The Daily Observer. However, Prime Minister Gaston Browne has disputed the figure, deeming it to be as high as 130 per cent, the report noted. Minister Browne said while his government's increased borrowing is pushing up the nation's debt-to-GDP ratio, it is necessary to solve the country's problems, the report related. ================= A R G E N T I N A ================= FIDEICOMISO FINANCIERO XIV: Moody's Withdraws C Rating on Certs --------------------------------------------------------------- Moody's Latin America Agente de Calificacion de Riesgo (Moody's) has withdrawn the C (sf) / C.ar (sf) of the VRDB and the C (sf) / C.ar (sf) ratings of the certificates of Fideicomiso Financiero Pvcred Serie XIV due to business reasons. RATINGS RATIONALE Moody's has withdrawn the rating for its own business reasons. FIDEICOMISO FINANCIERO XIII: Moody's Withdraws C Ratings on Certs ----------------------------------------------------------------- Moody's Latin America Agente de Calificacion de Riesgo (Moody's) has withdrawn the Ca (sf) / Ca.ar (sf) of the VRDB and the C (sf) / C.ar (sf) ratings of the certificates of Fideicomiso Financiero Pvcred Serie XIII due to business reasons. RATINGS RATIONALE Moody's has withdrawn the rating for its own business reasons. =============== B A R B A D O S =============== MONTICELLO INSURANCE: Moody's Puts Ba1 IFS Rating Under Review -------------------------------------------------------------- Moody's Investors Service (MIS) has placed under review for downgrade the Ba1 insurance financial strength (IFS) rating of Monticello Insurance Limited (Monticello, or MIL). Monticello is the captive reinsurance subsidiary of Brazil-based Vale S.A. (senior unsecured debt at Baa3, under review for downgrade), one of the largest metal and mining companies in the world. This rating action follows Moody's review for downgrade of Vale's ratings (see press release titled "Moody's places Vale's ratings on review for downgrade" published on 22 January 2016). RATINGS RATIONALE Moody's said the review for downgrade of MIL's Ba1 rating reflects Monticello's close integration and linkages with the global risk management function of the group, implying that a downgrade of Vale's rating will likely result in a downgrade of the captive's rating. The rating agency added that MIL is a core part of Vale's risk- management program and is the sole insurance captive utilized in Vale's property insurance and business interruption program worldwide. Explicit support from Vale to MIL, which has been provided through capital injections -- totaling $US 240 million over the past three years --and ongoing financial support to cover losses is a key driver of MIL's credit rating, absent which, MIL's rating would be lower. The rating agency expects that MIL will continue to receive extensive parental support from Vale, including the parent company's willingness to backstop MIL's obligations to its fronting insurance carriers, and to provide additional capital to MIL in the event that it has insufficient funds to meet its obligations under the reinsurance assumed. MIL's rating is constrained by its product risk concentration and significant risk exposures, which has resulted in earnings volatility -reflected by net losses in 2012-, as well as the weak sovereign credit profile and operating environment of Barbados, where MIL is domiciled. Given the review for downgrade of MIL's rating, an upgrade is unlikely, but a confirmation of Vale's rating could lead to a confirmation of MIL's rating. Conversely, MIL's rating could be downgraded if: 1) Vale's rating is downgraded; 2) support from the group to the captive company is reduced; 3) the captive reinsurer starts to cover risks of external (i.e. non-Vale) entities or engages in non-reinsurance business; or 4) Barbados' sovereign rating (currently B3, negative outlook) is downgraded. Moody's notes that MIL's ratings are above the Ba3 sovereign ceiling for Barbados, primarily reflecting the fact that Monticello's premiums comes from countries outside Barbados, as well as the ownership and strong support of the parent company and its operations outside of Barbados. Monticello Insurance Limited is based in Barbados. As of December 31, 2014, its total assets amounted to $US 501 million and its shareholders' equity was $US 158 million. The company's total annual gross premium for 2014 totaled $US 44 million, and the company recorded a net income of $US 64.5 million in 2014. =========== B R A Z I L =========== BROOKFIELD INCORPORACOES: Moody's Cuts Corp Family Rating to 'B3' ----------------------------------------------------------------- Moody's America Latina (Moody's) has taken several rating actions on four Brazilian homebuilders and their respective debt issuances in the local domestic market, following a change in Moody's forward looking assumptions for revenue growth and operating performance due to the prolonged macroeconomic downturn in the country and continued weak industry outlook for this sector through at least 2017. The negative rating actions reflect Moody's perception of a general increase in credit risk for Brazilian builders with the slowdown in construction activity and a prolonged deterioration in the real estate market. "We note signs of industry contraction since 2012, but the challenges for builders have been aggravated by a tighter funding availability and deterioration in real estate prices", says Cristiane Spercel, a Moody's VP-Senior Analyst. "Despite the still high pent-up demand for new housing in the Brazil, industry stress will likely grow during 2016 along with further deterioration in the job market and weaker consumer confidence", added Spercel. Higher inventories of completed and unsold new homes are constraining prices and revenue growth, effectively delaying the industry's recovery. These events portend changes in the company's liquidity and capital structures that could result in higher expected losses for the existing secured and unsecured creditors. " The ability to withstand a prolonged period of industry contraction varies among the companies we rate, but those with a stronger liquidity and lower leverage ratios should have a better chance to overcome it", added Spercel. Covered in this press release are the following issuers, with their respective rating changes: Issuer: Brookfield Incorporacoes S.A. (Brookfield) -- Corporate Family Rating: downgraded to B3 from B1 (global scale) and to Ba2.br from Baa2.br (national scale) ; -- BRL150 million (BRL76 million outstanding)senior unsecured debentures due in 2016 (3rd issue): downgraded to B3/Ba2.br from B1/Baa2.br; -- BRL223.2 million (BRL114 million outstanding) senior unsecured debentures due in 2016 (4th issue): downgraded to B3/Ba2.br from B1/Baa2.br; The outlook for all Brookfield's ratings remain negative. Issuer: Cyrela Brazil Realty S.A. Empreend E Part (Cyrela) -- Corporate Family Rating: affirmed at Ba2 (global scale) and Aa2.br (national scale); -- BRL400 million (BRL203 million outstanding) senior unsecured debentures due in 2017 (6th issue): affirmed at Ba2/Aa2.br; -- BRL300 million (BRL300 million outstanding) senior secured Bank Credit Facility due in 2017: affirmed at Ba2/Aa2.br; The outlook for all Cyrela's ratings was changed to negative from stable. Issuer: Even Construtora e Incorporadora S/A (Even) -- Corporate Family Rating: downgraded to B1 from Ba3 (global scale) and to Baa1.br from A2.br (national scale) -- BRL250 million (BRL42 million outstanding) senior unsecured debentures due in 2016 (4th issue): downgraded to B1/Baa1.br from Ba3/A2.br; -- BRL150 million (BRL150 million outstanding) senior unsecured debentures due in 2017 (5th issue): downgraded to B1/Baa1.br from Ba3/A2.br; The outlook for all Even's was changed to negative from stable. Issuer: Gafisa S/A (Gafisa) -- Corporate Family Rating: global scale rating downgrade to B2 from B1 and national scale rating affirmed at Baa3.br; -- BRL475 million (BRL492 million outstanding) secured debentures due in 2017 (7th Issuance): downgraded to B2/Baa3.br from Ba3/A3.br; -- BRL11.6 million (BRL17.3 million outstanding) senior unsecured debentures with final maturity in 2016 (8th Issuance-2nd series): global scale downgraded to B3 from B2 and national scale rating affirmed at Ba2.br; -- BRL55 million (BRL62 million outstanding) secured debentures due in 2024 (10th Issuance): downgraded to B2/Baa3.br from Ba3/A3.br; The outlook for all Gafisa's ratings remains negative. Please see ratings tab on the issuer/entity page on moodys.com.br for information on Global Scale Rating. RATINGS RATIONALE Brookfield's B3/Ba2.br ratings continue to reflect the strong financial support of its controlling shareholder -- Brookfield Asset Management (BAM, Baa2 stable) that provided for approximately BRL2.3 billion in cash injections from 2014 through September 2015, of which was BRL1.2 billion in the form of equity capitalization and BRL 1.1 billion in the form of "interest free" intercompany loans, demonstrating a long-term commitment to the homebuilding industry in Brazil. This support has been paramount for the company to remain solvent. After buying out minority shareholders in 2014, BAM has also increased its operating and controlling oversight in Brookfield. Nevertheless, the company's credit metrics remain weakly positioned for its rating category, as indicated by a negative gross margin of 13% in the last twelve months ended September 2015, with no visible material improvement in profitability in the short term, which prompted the two notches global scale rating downgrade. The negative outlook also reflects the company's evolving business profile and ongoing challenges to consistently improve its operations and reduce leverage amid the weakening industry fundamentals in the Brazilian homebuilding market. Moody's affirmed Cyrela's Ba2/Aa2.br ratings, which remain supported by its significant position in the Brazilian homebuilding market with a strong brand name, good diversity in terms of product offering and experienced management team. Additional credit enhancements include: (i) the company's strong liquidity position, as indicated by an unrestricted cash availability to cover short term debt of approximately 1.7 times ( as of 3Q15); (ii) stable gross margins in the 33% to 35% range and (iii) relatively low leverage as measured by the gross debt to total capitalization ratio, which has recently decreased below 40%. On the other hand, the challenging industry outlook for homebuilders in Brazil will likely translate into more soft revenue growth rates, reduced business opportunities and limit further improvement in Cyrela's credit metrics through at least mid-2017. This has triggered the change in outlook to negative. Another credit concern has been Cyrela's strategy to directly finance homebuyers for a part or the entirety of the remaining balance on their loan, which exposes the company to client delinquency risk. Even's B1/Baa1.br ratings reflect its strong brand name and strong market share in the city of Sao Paulo, with a solid track record in the construction of apartments for the middle income families. The ratings also consider Even's relative conservative financial policies that result in strong cost control mechanisms and manageable debt profile. Despite some uncertainty over its business plan after the recent change in ownership structure, the credit strengths outlined above should remain unchanged. On the other hand, the company's reduced scale and diversification constrains the rating, particularly under deteriorating industry fundamentals. The negative outlook reflects the challenges ahead of Even's management to maintain a consistent business growth rate and improve its credit metrics through at least mid-2017. Gafisa's B2/Baa3.br corporate family ratings incorporate its strong market share position and brand name in Brazil, along with its long track record of operations. On the other hand the rating is constrained by Gafisa's reduced scale, still weak interest coverage ratio and evolving business strategy. Despite its improving operating performance and credit metrics over the last twelve months, Gafisa is still highly leveraged and suffers from tight liquidity, which triggered the downgrade of the corporate family by one notch on the global scale to B2 from B1. The challenging environment for Brazilian homebuilders adds to the negative pressure, because the weak macroeconomic trend limits the potential for new launches, reduction of inventory levels and further improvement in profitability over the next couple of years. Gafisa's senior secured debt issues at B2/Baa3.br are now in line with its corporate family rating reflecting the company's current debt profile, which is predominantly composed of secured debt issuances. As such, the security of those bonds no longer justify a one notch uplift from its corporate family rating. Secured debt now represents over 80% of Gafisa's consolidated debt profile, since the company has been prioritizing more flexible secured construction loans in its capital structure. Moody's continues to view Gafisa's unsecured debt as effectively subordinated to the company's secured and guaranteed debt. For this reason, Moody's also downgraded Gafisa's senior unsecured debentures to B3/Ba2.br, one notch below the corporate family rating on global scale. RATING TRIGGERS Brookfield. An upgrade of Brookfield's ratings is unlikely in the near term, but Moody's will consider an outlook stabilization should the company successfully execute its deleveraging and asset monetization strategy over the next few quarters, while sustaining revenues close or above BRL2.0 billion per year. Quantitatively, an outlook stabilization will be considered should the company's profitability ratios move to a more solid positive territory (gross margin = -13% LTM3Q15) while its adjusted gross debt to total capitalization ratio stays below 60% (58.2% 3Q15). Brookfields' ratings could be downgraded if the company proves unable to improve its liquidity position to address its corporate debt maturing in 2016. A change in Brazil's sovereign rating (Baa3, under review for downgrade) or a change in methodology that triggers changes in the current mapping for national scale ratings could also trigger a rating action or recalibration to reposition Brookfield's national scale ratings. Cyrela. A rating upgrade is unlikely in the short term, but ratings outlook could stabilize if Cyrela experiences positive revenue growth along with stable or improving credit metrics and sustain its strong liquidity position. A rating upgrade would require total debt to capitalization ratio to remain consistently below 40% (38.2% 3Q15) and EBIT interest coverage to increase above 4.5 times (2.6x LTM 3Q15). Alternatively, a downgrade could be triggered by a material deterioration in Cyrela's cash availability to cover short term debt (1.66x 3Q15), or if total debt to capitalization moves above 50% for an extended period of time. A meaningful increase in the proportion of secured debt or a decrease in the amount of unencumbered assets that could be used to pay down the unsecured debentures could also result in a downgrade of Cyrela's unsecured ratings. A change in Brazil's sovereign rating (Baa3, under review for downgrade) or a change in methodology that triggers changes in the current mapping for national scale ratings could also trigger a rating action or recalibration to reposition Cyrela's national scale ratings. Even. A rating upgrade is unlikely in the short term, but the ratings outlook could stabilize if Even is able to increase in size in terms of revenues and EBIT, diversify its business profile and at the same time maintain or improve leverage metrics. For example, an upgrade could be considered if the company consistently maintains its total debt to capitalization below 40% (44.7% 3Q15), and EBIT interest coverage above 3.5 times (1.9x LTM 3Q15). An upgrade would also require improvement in its liquidity position, as per an unrestricted cash to short term debt position that is above 1.0x (0.76x 3Q15) on a sustainable basis. On the other hand, Even's ratings could be further downgraded if the company faces significant deterioration in its liquidity profile due to a larger than anticipated distribution to shareholders or a prolonged downturn in the homebuilding industry that leads to a debt to capitalization ratio above 50% and EBIT interest coverage below 1.0x. A change in Brazil's sovereign rating (Baa3, under review for downgrade) or a change in methodology that triggers changes in the current mapping for national scale ratings could also trigger a rating action or recalibration to reposition Even's national scale ratings. Gafisa: A rating upgrade is unlikely in the short term, but the ratings outlook could stabilize if Gafisa is able to further improve its credit metrics, such as the gross debt to total capitalization ratio remains consistently below 50% (48.7% 3Q15), along with higher visibility on the company's capital structure and the potential separation of Tenda. Ratings could be further downgraded if there is no improvement in Gafisa's liquidity profile over the next few quarters, as indicated per an unrestricted cash-to-short term debt above 1.0x (0.67x 3Q15). Quantitatively, the ratings could be also downgraded if gross debt to total capitalization increases above 60% or EBIT interest coverage remains below 1.0x (0.9x LTM 3Q15) for a prolonged period. A decrease in the amount of unencumbered assets that could be used to pay down the unsecured debentures under a distress situation, could also result in a downgrade of Gafisa's unsecured ratings. A change in Brazil's sovereign rating (Baa3, under review for downgrade) or a change in methodology that triggers changes in the current mapping for national scale ratings could also trigger a rating action or recalibration to reposition Gafisa's national scale ratings. USIMINAS COMMERCIAL: Moody's Cuts Sr. Unsec. Notes Rating to Caa1 ----------------------------------------------------------------- Moody's Investors Service downgraded the ratings of the senior unsecured notes issued by Usiminas Commercial Ltd. (guaranteed by Usinas Siderurgicas de Minas Gerais, "Usiminas") to Caa1 from B2 and the ratings of the backed senior unsecured global MTN programs of Usinas Siderurgicas de Minas Gerais S.A., Cosipa Commercial Ltd and Usiminas Commercial Ltd to (P) Caa1 from (P) B2. The ratings remain on review for downgrade. At the same time, Moody's America Latina downgraded Usiminas's global scale rating to Caa1 from B2 and the national scale rating (NSR) to Caa1.br from Ba2.br. The ratings remain on review for downgrade. Ratings downgraded: Issuer: Usinas Siderurgicas de Minas Gerais S.A. -- $US 500 million backed senior unsecured Global MTN Program: to (P) Caa1 from (P) B2 Issuer: Cosipa Commercial Ltd. -- $US 500 million backed senior unsecured Global MTN Program: to (P) Caa1 from (P) B2 Issuer: Usiminas Commercial Ltd. -- $US 400 million o due 2018, guaranteed by Usiminas: to Caa1 from B2 -- $US 500 million backed Global MTN Program: to (P) Caa1 from (P) B2 The ratings are on review for downgrade. RATINGS RATIONALE The downgrade to Caa1 reflects primarily the continued deterioration of the market fundamentals for steelmakers in Brazil and Usiminas' diminishing ability to generate cash flow from its operations, which increases liquidity pressures. At the current level of operations and free cash flow generation, it will become increasingly difficult for Usiminas to meet its financial obligations. Usiminas posted negative gross margin in the third quarter of 2015 and announced capacity shutdowns to reduce fixed costs and improve profitability in a lower demand environment. This strategy is currently being implemented and at this point it is uncertain if it will suffice to overcome the contraction of the domestic demand for steel in Brazil and improve the company's free cash flow generation. Usiminas' operations should remain pressured at least until the end of 2016, as a result of timid economic activity and struggling industrial performance in Brazil, as well as much weaker fundamentals for the domestic steel industry. Furthermore, global oversupply of steel will constrain exports' profitability. This, combined with the impact of the devaluation of the Brazilian real on the company's foreign currency debt (about 48% of total debt) and on its costs, will result in persistently weak credit metrics throughout 2016, particularly margins, leverage and interest coverage Although Usiminas breached financial covenants applicable to 88% of its total debt at the end of December 2015, the company was able to negotiate waivers, which reduces the risk of debt acceleration in the short term. Historically, Usiminas has been able to maintain an adequate liquidity profile, as evidenced by an adequate cash position (BRL 2.4 billion cash balance at the end of 3Q 2015, sufficient to cover short term debt by 1.3x), but cash balance relative to short term maturities has declined overtime due to weaker cash flow generation, and a substantial part of the company's cash balance is restricted as it is at the subsidiaries and may not be immediately available to meet the company's financial obligations. With the challenging outlook for the steel industry and our expectations that free cash flow generation will remain weak, Usiminas could face liquidity pressures to meet its short term debt. The ratings remain on review for downgrade reflecting our ongoing concern over Usiminas' ability to meet its short term financial obligations. Additional negative rating actions can be considered if Usiminas fails to meet short term financial obligations, breaches covenants or enters into a debt restructuring that results in losses to creditors. Headquartered in Belo Horizonte, Minas Gerais, Usinas Siderurgicas de Minas Gerais S.A. - Usiminas (Usiminas) is the largest integrated flat-steel manufacturer in Latin America, with production of 5.3 million tons of crude steel and consolidated net revenues of BRL 10.4 billion (approximately $US 3.5 billion converted by the average exchange rate) for the LTM period ending September 30, 2015. Usiminas also owns iron ore mining properties, steel distribution and capital goods subsidiaries in Brazil. USINAS SIDERURGICAS: Moody's Cuts Corporate Family Ratings to Caa1 ------------------------------------------------------------------ Moody's America Latina downgraded Usinas Siderurgicas de Minas Gerais S.A. ("Usiminas") corporate family ratings to Caa1 from B2 (global scale) and to Caa1.br from Ba2.br (national scale). The ratings remain on review for downgrade. Ratings downgraded: Issuer: Usinas Siderurgicas de Minas Gerais S.A. -- Corporate Family Rating: Caa1 (from B2) in the global scale and Caa1.br (from Ba2.br) in the national scale The ratings are on review for downgrade. For further information on related ratings and Global Scale Rating, please see the ratings tab on the issuer/entity page for the respective issuer on www.moodys.com RATINGS RATIONALE The downgrade to Caa1 reflects primarily the continued deterioration of the market fundamentals for steelmakers in Brazil and Usiminas' diminishing ability to generate cash flow from its operations, which increases liquidity pressures. At the current level of operations and free cash flow generation, it will become increasingly difficult for Usiminas to meet its financial obligations. Usiminas posted negative gross margin in the third quarter of 2015 and announced capacity shutdowns to reduce fixed costs and improve profitability in a lower demand environment. This strategy is currently being implemented and at this point it is uncertain if it will suffice to overcome the contraction of the domestic demand for steel in Brazil and improve the company's free cash flow generation. Usiminas' operations should remain pressured at least until the end of 2016, as a result of timid economic activity and struggling industrial performance in Brazil, as well as much weaker fundamentals for the domestic steel industry. Furthermore, global oversupply of steel will constrain exports' profitability. This, combined with the impact of the devaluation of the Brazilian real on the company's foreign currency debt (about 48% of total debt) and on its costs, will result in persistently weak credit metrics throughout 2016, particularly margins, leverage and interest coverage. Although Usiminas breached financial covenants applicable to 88% of its total debt at the end of December 2015, the company was able to negotiate waivers, which reduces the risk of debt acceleration in the short term. Historically, Usiminas has been able to maintain an adequate liquidity profile, as evidenced by an adequate cash position (BRL 2.4 billion cash balance at the end of 3Q 2015, sufficient to cover short term debt by 1.3x), but cash balance relative to short term maturities has declined overtime due to weaker cash flow generation, and a substantial part of the company's cash balance is restricted as it is at the subsidiaries and may not be immediately available to meet the company's financial obligations. With the challenging outlook for the steel industry and our expectations that free cash flow generation will remain weak, Usiminas could face liquidity pressures to meet its short term debt. The ratings remain on review for downgrade reflecting our ongoing concern over Usiminas' ability to meet its short term financial obligations. Additional negative rating actions can be considered if Usiminas fails to meet short term financial obligations, breaches covenants or enters into a debt restructuring that results in losses to creditors. Headquartered in Belo Horizonte, Minas Gerais, Usinas Siderurgicas de Minas Gerais S.A. - Usiminas (Usiminas) is the largest integrated flat-steel manufacturer in Latin America, with production of 5.3 million tons of crude steel and consolidated net revenues of BRL 10.4 billion (approximately $US 3.5 billion converted by the average exchange rate) for the LTM period ending September 30, 2015. Usiminas also owns iron ore mining properties, steel distribution and capital goods subsidiaries in Brazil. ========================== C A Y M A N I S L A N D S ========================== AMERICAN GENERAL: Shareholders Receive Wind-Up Report ----------------------------------------------------- The shareholders of American General CBO 1998-1 Ltd. received on Jan. 8, 2016, the liquidator's report on the company's wind-up proceedings and property disposal. The company's liquidator is: David Dyer P.O. Box 1984 Grand Cayman KY1-1104 Cayman Islands Telephone: (345)949-8244 Facsimile: (345)949-5223 ASCEND TRADING: Shareholders Receive Wind-Up Report --------------------------------------------------- The shareholders of Ascend Trading Limited received on Jan. 8, 2016, the liquidator's report on the company's wind-up proceedings and property disposal. The company's liquidator is: David Dyer P.O. Box 1984 Grand Cayman KY1-1104 Cayman Islands Telephone: (345)949-8244 Facsimile: (345)949-5223 CREP INVESTMENT I: Shareholder Receives Wind-Up Report ------------------------------------------------------ The shareholder of Crep Investment I Cayman received on Jan. 8, 2016, the liquidator's report on the company's wind-up proceedings and property disposal. The company's liquidator is: Intertrust SPV (Cayman) Limited 190 Elgin Avenue George Town Grand Cayman KY1-9005 Cayman Islands c/o Susan Craig/Jennifer Chailler Telephone: (345) 943-3100 CREP INVESTMENT K: Shareholder Receives Wind-Up Report ------------------------------------------------------ The shareholder of Crep Investment K Cayman received on Jan. 8, 2016, the liquidator's report on the company's wind-up proceedings and property disposal. The company's liquidator is: Intertrust SPV (Cayman) Limited 190 Elgin Avenue George Town Grand Cayman KY1-9005 Cayman Islands c/o Susan Craig/Jennifer Chailler Telephone: (345) 943-3100 CRYSTAL CLO: Shareholders Receive Wind-Up Report ------------------------------------------------ The shareholders of Crystal CLO, Ltd. received on Jan. 8, 2016, the liquidator's report on the company's wind-up proceedings and property disposal. The company's liquidator is: David Dyer P.O. Box 1984 Grand Cayman KY1-1104 Cayman Islands Telephone: (345)949-8244 Facsimile: (345)949-5223 GS STRUCTURED: Shareholders Receive Wind-Up Report -------------------------------------------------- The shareholders of GS Structured Funding Limited received on Jan. 8, 2016, the liquidator's report on the company's wind-up proceedings and property disposal. The company's liquidator is: David Dyer P.O. Box 1984 Grand Cayman KY1-1104 Cayman Islands Telephone: (345)949-8244 Facsimile: (345)949-5223 GSAM CREDIT: Shareholders Receive Wind-Up Report ------------------------------------------------ The shareholders of GSAM Credit CDO Ltd. received on Jan. 8, 2016, the liquidator's report on the company's wind-up proceedings and property disposal. The company's liquidator is: David Dyer P.O. Box 1984 Grand Cayman KY1-1104 Cayman Islands Telephone: (345)949-8244 Facsimile: (345)949-5223 NOUVELAIR TUNISIE: Shareholders Receive Wind-Up Report ------------------------------------------------------ The shareholders of Nouvelair Tunisie Cayman) Limited received on Jan. 8, 2016, the liquidator's report on the company's wind-up proceedings and property disposal. The company's liquidator is: David Dyer P.O. Box 1984 Grand Cayman KY1-1104 Cayman Islands Telephone: (345)949-8244 Facsimile: (345)949-5223 SIGNUM BLUE: Shareholders Receive Wind-Up Report ------------------------------------------------ The shareholders of Signum Blue Limited received on Jan. 8, 2016, the liquidator's report on the company's wind-up proceedings and property disposal. The company's liquidator is: David Dyer P.O. Box 1984 Grand Cayman KY1-1104 Cayman Islands Telephone: (345)949-8244 Facsimile: (345)949-5223 SIGNUM BLUE II: Shareholders Receive Wind-Up Report --------------------------------------------------- The shareholders of Signum Blue II Limited received on Jan. 8, 2016, the liquidator's report on the company's wind-up proceedings and property disposal. The company's liquidator is: David Dyer P.O. Box 1984 Grand Cayman KY1-1104 Cayman Islands Telephone: (345)949-8244 Facsimile: (345)949-5223 SIGNUM MENA: Shareholders Receive Wind-Up Report ------------------------------------------------ The shareholders of Signum Mena Limited received on Jan. 8, 2016, the liquidator's report on the company's wind-up proceedings and property disposal. The company's liquidator is: David Dyer P.O. Box 1984 Grand Cayman KY1-1104 Cayman Islands Telephone: (345)949-8244 Facsimile: (345)949-5223 SIGNUM MIG I: Shareholders Receive Wind-Up Report ------------------------------------------------- The shareholders of Signum MIG I Limited received on Jan. 8, 2016, the liquidator's report on the company's wind-up proceedings and property disposal. The company's liquidator is: David Dyer P.O. Box 1984 Grand Cayman KY1-1104 Cayman Islands Telephone: (345)949-8244 Facsimile: (345)949-5223 SIGNUM PLATINUM II: Shareholders Receive Wind-Up Report ------------------------------------------------------- The shareholders of Signum Platinum II Ltd received on Jan. 8, 2016, the liquidator's report on the company's wind-up proceedings and property disposal. The company's liquidator is: David Dyer P.O. Box 1984 Grand Cayman KY1-1104 Cayman Islands Telephone: (345)949-8244 Facsimile: (345)949-5223 VENTURE II: Shareholders Receive Wind-Up Report ----------------------------------------------- The shareholders of Venture II CDO 2002, Limited received on Jan. 8, 2016, the liquidator's report on the company's wind-up proceedings and property disposal. The company's liquidator is: David Dyer P.O. Box 1984 Grand Cayman KY1-1104 Cayman Islands Telephone: (345)949-8244 Facsimile: (345)949-5223 ZAIS ZEPHYR A-2: Shareholders Receive Wind-Up Report ---------------------------------------------------- The shareholders of Zais Zephyr A-2, Ltd received on Jan. 8, 2016, the liquidator's report on the company's wind-up proceedings and property disposal. The company's liquidator is: David Dyer P.O. Box 1984 Grand Cayman KY1-1104 Cayman Islands Telephone: (345)949-8244 Facsimile: (345)949-5223 =================================== D O M I N I C A N R E P U B L I C =================================== DOMINICAN REP: Opposition Pull Out Major Blow to Electricity Pact ------------------------------------------------------------------ Dominican Today reports that the major opposition PRM party withdrew from the talks aimed at forging the Electricity Pact, citing the lack of necessary conditions to ensure the agreement's enactment. The PRM said the government should be transparent and disclose all the details into the purchase of the 600 megawatt coal-fired power plants being built in Paya, Bani (south), according to Dominican Today. The PRM said the participation of government representatives in the debate has been characterized by "rigid positions defended with a sectarian spirit," the report notes In a letter to bishop and talks coordinator Agripino Nunez, PRM president Andres Bautista blames "the government's unilateral actions" for his organization's decision, the report discloses. Major Blow The PRM's decision deals yet another major blow to the potential agreement, after the labor unions grouped in the CNTU also announced their pullout citing a lack of transparency, the report relays. As reported in the Troubled Company Reporter-Latin America on Jan. 26, 2016, Fitch Ratings has assigned a 'B+' rating to the Dominican Republic's USD1.0 billion bond maturing 2026. The bond has a coupon of 6.875%. The proceeds are to partially finance the 2016 budget of the government. * DOMINICAN REP: Exports to Climb From US$9.6BB to US$10B This Yr. ------------------------------------------------------------------ Dominican Today reports that Dominican Republic Export and Investment Center (CEI-RD) director Jean Alain Rodriguez said Dominican exports topped US$9.6 billion in 2015, and expects the figure to surpass US$10.0 billion this year. The official, who announced the RD Export event, said it will be the largest exhibit for exportable items to reach foreign markets, will take place at Santo Domingo's Sans Souci Port Convention Center, according to Dominican Today. Mr. Rodriguez said more than 1,000 potential buyers linked to agribusiness, construction, manufacturing and industry, health, beauty, technology, culture, government services, among others are expected to attend the event, the report notes. In a press conference at CEI-RD Mr. Rodriguez said the event set for June 27 to 29 will bring together companies and local producers with domestic and international buyers by showcasing products, business meetings, lectures and exhibitions, to seal contracts, establish contacts and dynamic trade between sellers and buyers, the report adds. As reported in the Troubled Company Reporter-Latin America on Jan. 26, 2016, Fitch Ratings has assigned a 'B+' rating to the Dominican Republic's USD1.0 billion bond maturing 2026. The bond has a coupon of 6.875%. The proceeds are to partially finance the 2016 budget of the government. * DOMINICAN REPUBLIC: Employers List Hurdles to Wage Hike --------------------------------------------------------- Dominican Today reports that Dominican Republic Employers Confederation (COPARDOM) president Joel Santos said the factors which in his view prevent higher wages need to be addressed, to make way to improve workers' benefits and the economy in general. Mr. Santos said among the factors figure the high unemployment rate, rigid labor regulations, and a large presence of undocumented laborers and deficient training of human capital, according to Dominican Today. Quoted by acento.com.do, the business leader said an economically active population of five million and an annual growth of 2.2% in that figure, it takes 110,000 jobs per year "just to keep the unemployment rate stable in 2015," the report notes. "Generally speaking to improve wages in a faster way we must attack the problem of unemployment and underemployment, because the existence of these indicates that with the current salaries people aren't willing to enter the formal labor market under today's conditions," the report quoted Mr. Santos as saying. Mr. Santos said despite those hurdles formal market wages grow 5% per year, according to official figures from the Social Security Treasury (TSS), the report relays. Nonetheless the business leader said it's difficult to accurately measure the number of wages paid, due to nominal compensation not covered as an integral part of a worker's salary, the report notes. "Examples of these items are allowances, gratuities, per diems, fuel, housing, overtime and other bonuses, which make it impossible to measure the correct variable for purposes of economic studies," Mr. Santos said, the report discloses. "We must also understand that we have an informal market of 55% which makes it even more difficult to measure potential income." The report notes that Mr. Santos said those who propose wage increases on productivity gains, but based of closed data should take into account the performance of the productivity of capital and the development of technology, indicators which in his view are difficult to determine from available information. As reported in the Troubled Company Reporter-Latin America on Jan. 26, 2016, Fitch Ratings has assigned a 'B+' rating to the Dominican Republic's USD1.0 billion bond maturing 2026. The bond has a coupon of 6.875%. The proceeds are to partially finance the 2016 budget of the government. =========== M E X I C O =========== DOCUFORMAS SAPI: S&P Affirms 'B+' Rating; Outlook Stable -------------------------------------------------------- Standard & Poor's Ratings Services said that it has affirmed its 'B+' global scale and 'mxBBB/mxA-3' national scale ratings on Docuformas S.A.P.I. de C.V. The outlook remains stable. S&P's ratings on Mexico-based non-bank financial institution (NBFI) Docuformas reflect S&P's "adequate" assessment of its business position due to its improved market share as a result of its acquisition-based, average business mix, and business and geographic concentration. S&P also views its capital and earnings as "adequate" based on S&P's forecasted RAC ratio of 8.6% for the next 12-18 months and S&P's assessment of its "weak" risk position due to weaker asset quality than those of its domestic peers. The ratings also incorporate S&P's view of Docuformas' "adequate" funding and "moderate" liquidity. The stand-alone credit profile (SACP) is 'b+'. S&P initially sets the anchor for NBFIs three notches below the anchor for banks in the same country to reflect the typical lack of access to the central bank's credit lines, lower regulatory oversight, and higher competitive risk for these entities than for banks. S&P may modify that standard three-notch adjustment for NBFIs in countries or in sectors where these differences don't exist or are less pronounced (i.e., the finance company can access funding from the central bank, is regulated to some degree, or has unique competitive positions, such as monopolistic or oligopolistic businesses). In Mexico, the NBFI anchor is only two notches below the bank anchor, reflecting the National Banking and Securities Commission's oversight of some of them, and that there is a good track record of government support through guarantees and liquidity during periods of market turmoil. In addition, some NBFIs have funding lines from government-owned banks, which S&P considers extremely stable. Mexico's economic risk reflects its low per capita GDP, which limits the country's ability to withstand economic downturns and constrains household credit capacity. Although Mexico has maintained macroeconomic stability, its economy still lacks dynamism. Low-income levels, a large informal workforce, and relatively weak rule of law limit credit growth prospects and banking penetration. These conditions result in high credit risk. On the positive side, the Mexican financial system doesn't have economic imbalances, and housing prices have remained fairly stable for the past five years. With regards to industry risk, in S&P's view, banks have good profitability thanks to a healthy competitive environment and sound pricing standards. The sector's adequate regulatory framework follows international standards, has fostered healthy capitalization levels, and is strengthening its liquidity oversight. On the other hand, S&P believes the sector would benefit from more extensive coverage of the financial system and tougher regulation of NFBIs, particularly aimed at fraud prevention. An adequate and stable core customer deposit base supports the sector's systemwide funding. S&P assess Docuformas' business position as "adequate," supported by a stronger market position (in terms of total leases and loans in the leasing market), increasing business volumes, distribution channels, and penetration of new customers after ARG's (Analistas de Recursos Globales, S.A.P.I) acquisition in 2014. Docuformas currently serves more than 1,200 clients in the country. Revenue diversification and a significant growth in its loan portfolio were some of the synergies Docuformas gained as a result of integrating ARG. Post-acquisition process is still ongoing and S&P expects it to be completed by the end of the first half of 2016, when most of the core business areas would be integrated. Docuformas' customer concentration has decreased due to the acquisition of ARG, who had a well-diversified customer base. In this sense, the top 20 customers represent less than 20% of Docuformas' total loans on a consolidated basis. Compound annual growth rate of Docuformas' operating revenues was about 15% during the past four years, supporting its business stability. S&P's capital and earnings assessment remains "adequate." Despite recent acquisitions, Docuformas' high dividend payments, and relatively aggressive loan portfolio growth, it has maintained solid internal capital generation. As of September 2015, its RAC ratio stood at 8.3% and S&P expects it will remain at a similar level in the next 12-18 months. S&P's base-case scenario assumptions include: -- Mexico's expected GDP growth of 2.3% in 2015 and 3.0% in 2016; -- A 25% average loan portfolio growth for the next two years; -- Net interest margin (NIM) of about 13% for the next 18 months; -- Return on assets of about 3% for the next 12-18 months considering loan loans provisions, growth expectations, and noninterest expenses; -- Nonperforming assets (NPAs) at about 4% for the next 12-18 months that will be fully covered by reserves by year-end 2017; and -- No change in dividend policy in the next 12-18 months. Profitability levels have remained stable for the past two years thanks to NIMs of more than 12% and effective cost control. As of September 2015, return on average assets (ROAA) was 3.21% compared with the three fiscal years average of 4.8%. For the next two years, S&P expects ROAA to be about 3% as a result of higher loan loss provisions in order to improve asset quality. "In our opinion, Docuformas' risk position is "weak," reflecting relaxed underwriting standards compared with those of the Mexican banking industry. Docuformas' target market is middle market customers who may or may not have access to bank financing and therefore, in our view, potential losses from these clients could increase during economic downturns. Our risk assessment continues to reflect the weaker asset quality of Docuformas' loan portfolio as a result of the ARG acquisition. However, we expect that the continual review of the current loan portfolio will lead to an improvement in the company's asset quality metrics. As of September 2015, Docuformas' NPAs were about 4.4% with reserve coverage of 88%, and charge-offs were 0.85%. Looking forward, we expect credit losses to represent around 1% of total loans. ARG has higher NPAs than those of other finance companies we rate in Mexico. In addition, its loan loss reserves are insufficient to cover its NPAs, which weaken Docuformas' asset quality. Although Docuformas will work to improve asset quality metrics, we expect them to remain somewhat weaker than those of industry peers for the next 12-18 months. In our view, Docuformas' growth and greater business diversification have strengthened its business position, making it less vulnerable to single-client default or credit quality deterioration in any specific sector," S&P said. "We assess Docuformas' funding as "adequate." The firm has an adequate funding mix, consisting of market and banking debt, and no significant maturity concentrations. Additionally, under our base-case scenario, Docuformas could access multiple funding sources. The firm's banking debt increased because of the ARG acquisition, but its funding mix didn't change drastically. We expect this debt will account for a greater share of Docuformas' total debt. As of Sept. 30, 2015, the stable funding ratio was 59.05%, and we expect it will remain at that level for the next 12-18 months. Also, by the end of September 2015, the firm funded its operations with about 44% market debt and the rest mainly from banks, with a ratio of short-to long-term mix of 40%/60%. In our view, this share of short-term debt helps Docuformas to maintain a healthy funding profile, considering that most of its debt maturities are in 2019. Furthermore, we believe that Docuformas balances its market debt with bank debt and short- and long-term maturities," S&P noted. S&P assess its liquidity as "moderate." As of September 2015, broad liquid assets to short-term wholesale funding were 0.29x, similar to those of other finance companies S&P rates in Mexico. Docuformas has sufficient liquidity to cover daily operations, and S&P predicts positive cash flow in its base-case scenario. However, S&P believes that Docuformas' heavy reliance on short- term debt could damage its financial performance and could pressure its liquidity ratios in a stress scenario. In S&P's opinion, liquidity will remain "moderate" in the next 12 months with enough liquidity to cover its expected growth targets. The stable outlook reflects S&P's expectation that the company will maintain a RAC ratio around 8.6% as a result of its adequate internal capital generation capacity and considering a steady loan portfolio growth. S&P expects asset quality metrics to improve in the next 12-18 months as a result of a cleaning process of its loan portfolio, a strategy that will intend to align the company's NPA ratio and reserve coverage with industry benchmarks, while it maintains low charge-offs. S&P could lower the ratings over the next 12 months if Docuformas' capitalization levels deteriorate, reflecting in a RAC ratio below 7%. In addition, a downgrade could if Docuformas' asset quality deteriorates on a sustained basis, along with poor reserve coverage pressuring profitability and eroding capital base, or if the company's liquidity levels were under pressure in order to cover its short-term obligations. S&P don't expect an upgrade in the next 12 months. MEXICO: Unemployment Rate Climbs to 4.4 pct. in December -------------------------------------------------------- EFE News reports that Mexico's unemployment rate was 4.4 percent in December, up from the 4.2 percent level registered in the same month of 2014, the National Institute of Statistics and Geography, or INEGI, said. The jobless rate also came in at 4.4 percent last month on a seasonally adjusted basis, up 0.2 percentage points from November, according to EFE News. The report notes that the underemployment rate -- which takes into account workers who are willing to work more hours but are unable to do so -- was 8.4 percent in December, unchanged from the same month of 2014, the INEGI said. The statistics agency, which considers a worker to be employed if they are older than 14 and work at least six hours a week in any job, said the labor force participation rate was 95.4 percent in December, the report relays. A total of 58.1 percent of Mexico's workers were employed in the informal sector of the economy last month, a figure lower than the 58.7 percent level registered in December 2014, the INEGI said, the report notes. The share of workers employed in the service sector was 42 percent, while 20 percent worked in retailing, 15.7 percent were employed in manufacturing and 13.5 percent worked in agriculture, the report says. Roughly 7.5 percent of workers were employed in construction, 0.8 percent worked in other sub-sectors and the remaining 0.5 percent were employed in unspecified occupations, the report notes. Mexico has a population of 119.5 million, according to the latest projections based on the 2010 census, of whom 55.3 million live in poverty, the report adds. =============== P A R A G U A Y =============== PARAGUAY: Fitch Affirms 'BB' IDR; Outlook Stable ------------------------------------------------ Fitch Ratings has affirmed Paraguay's sovereign ratings as: -- Long-term foreign and local currency Issuer Default Ratings at 'BB', Outlook Stable; -- Issue ratings on senior unsecured foreign and local currency bonds at 'BB'; -- Country ceiling at 'BB+'; -- Short-term foreign currency IDR at 'B'. KEY RATING DRIVERS Paraguay's ratings balance a long track record of fiscal prudence through different economic and political cycles, strong fiscal solvency indicators and increased resilience to external shocks against constraints on creditworthiness that include high output volatility due to weather-related shocks, a low tax revenue base and comparatively weak structural factors in terms of investment rates, institutional quality and social development indicators. Paraguay has demonstrated improved capacity to manage external shocks without destabilizing effects for external accounts or macroeconomic stability. Adequate international reserves, increased exchange rate flexibility and improved credibility of monetary policy allow Paraguay to absorb multiple external pressures derived from lower commodity prices (soy and beef), economic underperformance in key trading partners (most notably deep recession in Brazil) and increased financial market volatility. International reserves' coverage, equivalent to 5.8 months of current external payments (CXP) or 22% of GDP, remains adequate to mitigate risks related to commodity dependence, downside risks for the Brazilian economy and high financial dollarization. Moreover, the guarani has depreciated by 23% in 2015 without creating risks for financial or macroeconomic stability. Growth slowed to an estimated 3% in 2015 as the external environment worsened, but medium-term growth drivers are intact. Although growth could slow further to 2.5% in 2016 as Brazil will likely remain in deep recession and commodity prices will stay weak, Fitch expects it to accelerate in 2017 in line with a less adverse external environment, recovery in large neighbouring economies and the execution of infrastructure projects. Inflation averaged 3.1% in 2015, well below the central bank's target of 4.5+/-2%. Food inflation has remained under control, and depreciation against the USD dollar has not been accompanied by similar depreciation vis-a-vis trade partners (Argentina and Brazil). Core inflation, though, moved up to 3.7% in December 2015. This development and increased volatility in global financial markets prompted the central bank to increase its policy rate by 25bps increase to 6% in January, reinforcing its commitment to keep inflation in check in spite of more subdued economic activity. The current account deficit rose to an estimated 1.8% of GDP in 2015 and could remain above 2% over the forecast period, balancing a weaker export outlook against reduced price of oil imports and slower economic activity. Fitch expects the deficit, which will remain below 'BB' peers, to be financed by FDI. The sovereign will maintain access to external sources of financing such as multilaterals and external capital markets. The central government deficit reached 1.8% of GDP in 2015, up from 1.1% in 2014. At the general government level, Fitch estimates that the deficit (2.2% of GDP) remained below the 'BB' median and was the lowest among peer commodity exporters. Nevertheless, the government missed the deficit ceiling of 1.5% of GDP under the 2013 Fiscal Responsibility and Transparency Law (LRTF). The LRTF continues to face challenges to establish its role as an appropriate institutional anchor for fiscal policy. In contrast to previous practice, the 2016 budget approved by Congress made minimal changes to the proposal submitted by the Ministry of Finance targeting a deficit of 1.5% of GDP. Nevertheless, revenue projections could prove hard to achieve in the context of subdued growth, expenditure related to flooding and continued focus on public investment by the current administration. Hence, Fitch expects the central government deficit to increase to 2.2% in 2016. Fitch estimates that general government debt rose to 21.5% of GDP in 2015, from 18.1% in 2014, driven by the guarani depreciation. Debt levels remain less than half the 'BB' median of 44%. Paraguay last accessed external bond markets in 2015, and the sovereign could return to the external markets (the 2016 budget authorizes USD700 million in issuance) in the event of favorable conditions. Given the deteriorating external environment and significant infrastructure and social needs, authorities are currently exploring changes to the fiscal rule to make it more responsive to economic cycles and reduce its pro-cyclicality by targeting a structural rather than a nominal balance. In Fitch's view, the potential changes to the fiscal responsibility law will be analyzed in the context of improvements to fiscal policy predictability and flexibility, development of a track record and their impact on Paraguay's public finances, presently a key rating strength. RATING SENSITIVITIES The main factors that could, individually or collectively, lead to a rating action are: Positive: -- Higher growth trajectory including higher investment levels and maintaining macroeconomic stability; -- Strengthening of external liquidity in relation to 'BB' peers; -- Structural improvements in public finances in terms of revenue base, expenditure rigidity and a continued moderate debt burden. Negative: -- Commodity production shocks or severe export price falls that materially impair external and fiscal solvency ratios; -- Sustained fiscal deterioration in the context of financing constraints. KEY ASSUMPTIONS -- Fitch assumes that Brazil will remain in recession (-2.5%) in 2016, after contracting by an estimated 3.7% in 2015. Recovery in Brazil and in Argentina will likely only materialize in 2017. -- Fitch assumes that Paraguay will maintain access to external sources of financing and continue attracting FDI inflows. -- Fitch oil prices average USD45 in 2016 and USD55 in 2017. ====================== P U E R T O R I C O ====================== DF SERVICING: Meeting of Creditors Set for Feb. 1 ------------------------------------------------- The meeting of creditors of DF Servicing LLC is set to be held on Feb. 1, 2016, at 9:00 a.m., according to a filing with the U.S. Bankruptcy Court for the District of Puerto Rico. The meeting will be held at Ochoa Building, First Floor, 500 Tanca Street, San Juan, Puerto Rico. The court overseeing the bankruptcy case of a company schedules the meeting of creditors usually about 30 days after the bankruptcy petition is filed. The meeting is called the "341 meeting" after the section of the Bankruptcy Code that requires it. A representative of the company is required to appear at the meeting and answer questions under oath. The meeting is presided over by the U.S. trustee, the Justice Department's bankruptcy watchdog. About DF Servicing Engaged in the business of purchase and sale of construction projects, DF Servicing, LLC, DF Tier I, LLC, DF Investments, LLC and DF Holdings LLC filed Chapter 11 bankruptcy petitions (Bankr. D.P.R. Case Nos. 15-10253 to 15-10256) on Dec. 24, 2015. The petitions were signed by Mark Mashburn, the president. Charles A Cuprill, PSC Law Office, serves as counsel to the Debtors. PUERTO RICO: Senate Dems Pressure GOP on Bankruptcy Option ---------------------------------------------------------- Jonathan Randles at Law360.com reports that Senate Democrats are pressuring their Republican counterparts to back legislation that would allow Puerto Rico to restructure its $73 billion in debt through the U.S. court system, saying that a bankruptcy option is needed to avoid costly litigation with bondholders. Forty-seven Senators, representing the entire Democratic caucus and presidential candidate Bernie Sanders, I-Vt., sent a letter urging Majority Leader Mitch McConnell, R-Ky., to support legislation that would give Puerto Rico the ability to restructure its municipal debt through bankruptcy, according to Law360.com. As reported in the Troubled Company Reporter-Latin America on Dec. 28, 2015, Moody's Investors Service has downgraded $1.09 billion of Puerto Rico appropriation bonds issued by the Public Finance Corporation (PFC) to C from Ca, while maintaining other ratings assigned to the US territory's debt. PUERTO RICO ELECTRIC: Debt Restructuring Pact Extended to Feb. 16 ----------------------------------------------------------------- Michelle Kaske of Bloomberg News reports that Puerto Rico's main electricity provider and its bondholders amended a plan to restructure nearly $9 billion of debt, reinstating a tentative agreement that expired last week and threatened to worsen the commonwealth's financial crisis. The report says Puerto Rico Electric Power Authority, investors, bond-insurance companies and fuel-line lenders agreed to extend the contract to Feb. 16, giving island lawmakers more time to pass legislation to enable Prepa, as it's known, to cut its debt and create a new customer surcharge, Lisa Donahue, the utility's chief restructuring officer, said in a statement. The restructuring support agreement terminated January 22 after the legislature failed to pass the measure. Bloomberg News relays that the restructuring pact involves investors and bond-insurance companies lending Prepa about $111 million through a bond sale, according to Stephen Spencer, managing director at Houlihan Lokey, adviser to Prepa bondholders. In return for the new Feb. 16 legislative deadline, investors and insurers agreed to purchase half of the bonds when lawmakers pass the legislation and buy the remaining debt when a petition to implement the new customer surcharge is filed to the island's energy commission, according to Donahue's statement. "The agreements reflect the mutual understanding among Prepa and its key creditors about the importance of Prepa's financial restructuring and comprehensive transformation," Ms. Donahue said in the statement, reports Bloomberg. "We have a long way to go, and there remain many uncertainties, but if implemented Prepa's transformation will have a positive, lasting impact on its finances, operations and culture." Without a plan, notes the report, Prepa is at risk of being sued by its creditors and possibly defaulting on payments to investors due July 1. The termination was a step back for Puerto Rico, relays Bloomberg News. The island is seeking to reduce $70 billion of debt. Governor Alejandro Garcia Padilla on Jan. 23 warned lawmakers that the island may face blackouts if Prepa is unable to purchase enough fuel. Legislative leaders have made recent public statements, "which have made it unequivocally clear that they want to get this deal done and that the additional 25 days we are extending beyond the original deadline is sufficient for the legislation to be passed," the report quoted Mr. Spencer as saying in a statement. The report recalls that without the restructuring, Prepa is unable to pay creditor bills due in about five months, Ms. Donahue told a House Natural Resources Committee this month. Prepa faces $428 million in principal and interest to investors on July 1 and another $700 million to its fuel-line lenders, Donahue said. Before the Jan. 22 deadline, Prepa asked creditors to delay that end date to Feb. 12, notes the report. Investors weren't willing to extend unless the bond sale was contingent upon the island's energy commission approving the new customer surcharge. Prepa rejected that proposed change. As reported in the Troubled Company Reporter-Latin America on Dec. 21, 2015, Standard & Poor's Ratings Services maintained its 'CC' long-term and underlying ratings (SPURs) on Puerto Rico Electric Power Authority's (PREPA) electric revenue bonds. However, the ratings remain on CreditWatch, where they were originally placed with negative implications on June 18, 2014. As of June 30, 2015, PREPA had about $8.44 billion of long-term debt outstanding, and an additional $730 million due to noteholders. *********** Monday's edition of the TCR-LA delivers a list of indicative prices for bond issues that reportedly trade well below par. Prices are obtained by TCR-LA editors from a variety of outside sources during the prior week we think are reliable. Those sources may not, however, be complete or accurate. The Monday Bond Pricing table is compiled on the Friday prior to publication. Prices reported are not intended to reflect actual trades. Prices for actual trades are probably different. Our objective is to share information, not make markets in publicly traded securities. Nothing in the TCR-LA constitutes an offer or solicitation to buy or sell any security of any kind. It is likely that some entity affiliated with a TCR-LA editor holds some position in the issuers' public debt and equity securities about which we report. Tuesday's edition of the TCR-LA features a list of companies with insolvent balance sheets obtained by our editors based on the latest balance sheets publicly available a day prior to publication. At first glance, this list may look like the definitive compilation of stocks that are ideal to sell short. Don't be fooled. Assets, for example, reported at historical cost net of depreciation may understate the true value of a firm's assets. A company may establish reserves on its balance sheet for liabilities that may never materialize. The prices at which equity securities trade in public market are determined by more than a balance sheet solvency test. Submissions about insolvency-related conferences are encouraged. Send announcements to conferences@bankrupt.com *********** S U B S C R I P T I O N I N F O R M A T I O N Troubled Company Reporter-Latin America is a daily newsletter co-published by Bankruptcy Creditors' Service, Inc., Fairless Hills, Pennsylvania, USA, and Beard Group, Inc., Washington, D.C., USA, Marites O. Claro, Joy A. Agravante, Rousel Elaine T. Fernandez, Valerie U. Pascual, Julie Anne L. Toledo, and Peter A. Chapman, Editors. Copyright 2016. All rights reserved. ISSN 1529-2746. This material is copyrighted and any commercial use, resale or publication in any form (including e-mail forwarding, electronic re-mailing and photocopying) is strictly prohibited without prior written permission of the publishers. Information contained herein is obtained from sources believed to be reliable, but is not guaranteed. The TCR Latin America subscription rate is US$775 per half-year, delivered via e-mail. Additional e-mail subscriptions for members of the same firm for the term of the initial subscription or balance thereof are US$25 each. For subscription information, contact Peter A. Chapman at 215-945-7000 or Nina Novak at 202-362-8552. * * * End of Transmission * * *