/raid1/www/Hosts/bankrupt/TCRLA_Public/160222.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
L A T I N A M E R I C A
Monday, February 22, 2016, Vol. 17, No. 36
Headlines
A R G E N T I N A
ARGENTINA: Reaches Bond Payment Deal With Creditor, Mediator Says
ARGENTINA: Aurelius, NML Fight to Preserve Injunctions
FIDEICOMISO FINANCIERO: Moody's Gives B1(sf) Rating to Cl. A Debt
B R A Z I L
BRAZIL: S&P Long-term Ratings Lowered to BB on Economic Challenges
BANCO DO BRASIL: S&P Downgrades GSR to BB; Outlook Negative
PETROLEO BRASILEIRO: S&P Lowers GSR to B+, Outlook Negative
C A Y M A N I S L A N D S
BAIA INVESTMENT: Shareholder Receives Wind-Up Report
CEDAR PARTNERS: Shareholders Receive Wind-Up Report
CLAIRVUE (CAYMAN): Shareholders Receive Wind-Up Report
DIVE MASTER: Shareholder Receives Wind-Up Report
EDIN INVESTMENTS: Members Receive Wind-Up Report
EL (CAYMAN): Shareholders Receive Wind-Up Report
EQUINOX FINANCE: Shareholder Receives Wind-Up Report
F&C SENTINEL: Shareholder Receives Wind-Up Report
GLOBAL EDUCATION: Shareholders Receive Wind-Up Report
ICHIKAWA TWO: Shareholders Receive Wind-Up Report
JECD LIMITED: Shareholder Receives Wind-Up Report
NARASHINO THREE: Shareholders Receive Wind-Up Report
NEBULAE CANADIAN: Shareholders Receive Wind-Up Report
PNT SPV: Shareholders Receive Wind-Up Report
PRIDE INVESTMENTS: Shareholders Receive Wind-Up Report
YAOLAN NEW: Shareholders Receive Wind-Up Report
C O L O M B I A
CREDISERVICIOS SAS: S&P Affirms 'B+/B' ICRs, Outlook Stable
H O N D U R A S
* HONDURAS: IMF Says Economy Grew 3.6% in 2015
J A M A I C A
JAMAICA: To Remain Active in Domestic Capital Market
P E R U
CAMPOSOL S.A.: S&P Lowers CCR to 'CCC' on Liquidity Concerns
HOCHSCHILD MINING: Moody's Cuts Corporate Family Rating to B2
T R I N I D A D & T O B A G O
TRINIDAD & TOBAGO: TTADA Protests on Delay of License Issuance
X X X X X X X X X
* BOND PRICING: For the Week From Feb. 15 to Feb. 19, 2016
- - - - -
=================
A R G E N T I N A
=================
ARGENTINA: Reaches Bond Payment Deal With Creditor, Mediator Says
-----------------------------------------------------------------
EFE News reports that Argentina has reached a deal with one of the
creditors that won a judgment in a U.S. court over bonds the South
American country defaulted on in 2001, the court-appointed
mediator said.
Attorney Daniel Pollack, who was appointed by Thomas Griesa, a
U.S. federal judge in Manhattan, to oversee Argentina's
negotiations with its holdout bondholders, said that the South
American country and Capital Markets Financial Services reached an
agreement in principle on a cash payment of $110 million,
according to EFE News.
Pollack said the accord stems from Argentina's Feb. 5 proposal to
make a combined $6.5 billion cash payment to the holdout
creditors, which filed nearly $10 billion in claims on the bonds,
the report notes.
That offer came after business-friendly President Mauricio Macri
took office in December, replacing leftist Cristina Fernandez, who
had slammed the holdouts as "vultures," the report relays.
In early February, Argentina -- which has been shut out of
international capital markets since the massive default -- settled
with a group of 50,000 holdout Italian retail bondholders,
agreeing to pay them $1.35 billion, the report discloses. It also
has reached a settlement this month with two funds-Montreux Equity
Partners and Dart Management, the report relays.
The holdout creditors refused to take part in 2005 and 2010
restructurings in which the vast majority of Argentina's creditors
accepted steep haircuts on the sovereign bonds, which were issued
under U.S. law, the report notes.
Judge Griesa ruled in favor of one group of holdouts in 2012,
including Elliott Management Corp. founder and CEO Paul Singer's
NML Capital Ltd, a lead creditor that has not yet reached an
agreement with Argentina, the report says.
Citing a violation of the bonds' "pari passu" (equal treatment)
clause, he ordered Argentina to pay them $1.3 billion plus
interest before making further payments to bondholders who
accepted the restructurings, the report notes.
Other holdout bondholders such as Capital Markets Financial
Services, known as "me too" litigants, won similar judgments
against Argentina in Judge Griesa's court last year, bringing the
total owed by the South American country to the litigating
bondholders to around $10 billion, the report recalls.
Argentina was blocked from making interest payments to its
exchange bondholders (the 93 percent of creditors that accepted
the 2005 and 2010 restructurings) when it refused to comply with
Griesa's ruling, leading credit ratings agency Standard & Poor's
to lower the country's credit rating to "selective default" in
2014, the report notes.
NML Capital Ltd. and other hedge funds acquired Argentine bonds on
the secondary market at large discounts following Buenos Aires'
massive 2001 debt default, the report discloses.
The origins of Argentina's default, a decision adopted amid a
financial meltdown and economic depression, go back to Argentina's
1976-1983 military regime, which presided over a 465 percent
expansion in public indebtedness, the report adds.
* * *
The Troubled Company Reporter-Latin America reported in Nov. 27,
2015, that Moody's Investors Service has changed the outlook on
Argentina's Caa1 issuer rating to positive from stable. The
outlook on Argentina's (P)Caa2 foreign legislation and
restructured local legislation foreign currency obligations is
also changed to positive from stable. The outlook change is based
on Moody's view that the accession of president-elect Mauricio
Macri of the Cambiemos ("Let's Change") coalition will raise the
probability of credit positive policies being implemented,
including arriving at a resolution with holdout creditors, one of
Argentina's key credit constraints.
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.
ARGENTINA: Aurelius, NML Fight to Preserve Injunctions
------------------------------------------------------
Jonathan Randles at Law360.com reports that Argentina creditors
including NML Capital and Aurelius Capital Partners took their
first shots at the country's proposed $6.5 billion deal to end
long-running debt default litigation, urging a New York judge to
keep in place court orders restricting the country's ability to
restructure with individual bondholders.
NML and Aurelius said Argentina hasn't shown that a so-called
pari-passu injunction issued in 2012 that generally requires
Argentina to make ratable payments to all bondholder groups should
be lifted in light of the country's $6.5 billion settlement offer,
according to Law360.com.
* * *
The Troubled Company Reporter-Latin America reported in Nov. 27,
2015, that Moody's Investors Service has changed the outlook on
Argentina's Caa1 issuer rating to positive from stable. The
outlook on Argentina's (P)Caa2 foreign legislation and
restructured local legislation foreign currency obligations is
also changed to positive from stable. The outlook change is based
on Moody's view that the accession of president-elect Mauricio
Macri of the Cambiemos ("Let's Change") coalition will raise the
probability of credit positive policies being implemented,
including arriving at a resolution with holdout creditors, one of
Argentina's key credit constraints.
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.
FIDEICOMISO FINANCIERO: Moody's Gives B1(sf) Rating to Cl. A Debt
----------------------------------------------------------------
Moody's Latin America Agente de Calificaci¢n de Riesgo, S.A. rates
Fideicomiso Financiero AMES VII, a transaction that will be issued
by TMF Trust Company (Argentina) S.A. - acting solely in its
capacity as Issuer and Trustee.
As of Feb. 18, the securities for this transaction have not yet
been placed in the market. The transaction is pending approval
from the Comision Nacional de Valores. If any assumption or factor
Moody's considered when assigning the ratings changes before
closing, the ratings may also change.
-- ARS 29,396,349 in Class A Floating Rate Debt Securities (VRD)
of "Fideicomiso Financiero AMES VII", rated Aaa.ar (sf)
(Argentine National Scale) and B1 (sf) (Global Scale, Local
Currency).
-- ARS 13,833,576 in Certificates of "Fideicomiso Financiero AMES
VII", rated C.ar (sf) (Argentine National Scale) and C (sf)
(Global Scale, Local Currency).
RATINGS RATIONALE
The rated securities are payable from the cash flow coming from
the assets of the trust, which is an amortizing pool of
approximately 1,869 eligible personal loans denominated in
Argentine pesos, with a fixed interest rate, originated by the
Asociaci¢n Mutual de la Econom¡a Solidaria ("AMES"), for a
principal amount of ARS 24,622,478.
The VRD will bear a floating interest rate (BADLAR plus 300 bps).
The VRD's interest rate will never be higher than 35% or lower
than 24%.
These personal loans are granted to employees of the City of
Buenos Aires (rated Caa1/Baa1.ar) using a "Codigo de Descuento".
The "Codigo de Descuento" is an identifier granted by a
government-related entity (in this case the City of Buenos Aires)
that allows deducting a personal loan's installment directly from
the borrowers' paycheck.
The originator access an Internet-based system to verify the
borrower's disposable income and originate the personal loan. The
maximum DTI ratio established by the City of Buenos Aires is 50%.
In this transaction, the City of Buenos will be instructed to
send, on a monthly basis, the scheduled principal and interest on
the securitized loans directly to the trust account. In turn, the
trustee, based on the master servicer's reports will reconcile any
amounts that belong to the originator.
The automatic deduction of the loans' installments reduces
significantly the probability of default of the loans, which is
not dependent on the borrower's willingness to pay.
In this type of loan the main causes of delinquency are: (i)
termination of the work relationship between the borrower and the
Government of the City of Buenos Aires, (ii) judicial embargos,
that may limit the maximum disposable income that can be deducted
by the GCBA, (iii) increases in the Minimum Wage that increases
the minimum disposable income that the employee must receive net
of deductions, (iv) variable components of the wages that are not
collected in a particular month and therefore decreases the
disposable income (v) and unpaid work licenses.
Initial negative overall credit enhancement is mitigated by a
turbo sequential structure, which allows for the building of
credit enhancement since first coupon payment. In addition the
transaction has various reserve funds and excess spread.
Factors that would lead to an upgrade or downgrade of the rating:
Factors that may lead to a downgrade of the ratings include an
increase in delinquency and prepayment levels higher than Moody's
original expectations, or a disruption in the flow of payments
from the City of Buenos Aires.
Factors that may lead to an upgrade of the ratings include the
building of credit enhancement over time due to the turbo
sequential payment structure, when compared with the level of
projected losses in the securitized pool.
Loss and Cash Flow Analysis:
Moody's considered the historical performance of AMES's portfolio,
factors common to consumer loans securitizations such as
delinquencies, prepayments and losses; as well as specific factors
related to the Argentine market, such as the probability of an
increase in losses if there are changes in the macroeconomic
scenario in Argentina.
These factors were incorporated in a cash flow model that takes
into account all the relevant features of the transaction's assets
and liabilities. Monte Carlo simulations were run, which
determines the expected loss for the rated securities.
In assigning the rating to this transaction, Moody's assumed a
lognormal distribution for defaults on the main pool with a mean
of 6% and a coefficient of variation of 70%. Also, Moody's assumed
conditional prepayment rate (CPR) of 21.5%. These assumptions are
derived from the historical performance to date of AMES' pools and
prior transactions.
The model results showed 2.1% expected loss for the Class A
Floating Rate Debt Securities and 81.3% for the Certificates.
Stress Scenarios:
Moody's ran several stress scenarios, including increases in the
default rate assumptions. If default rates were increased 2% from
the base case scenario for the pool (i.e., mean of 8% and a
coefficient of variation of 70%), the ratings of the Class A
Floating Rate Debt Securities would likely decreased to B2 (sf).
The rating of the Certificates would be unchanged.
Moody's also applied a stress to the cash flows by assuming an
interruption of the salary payments of the City of Buenos Aires.
The assigned ratings are consistent with this stress scenario.
===========
B R A Z I L
===========
BRAZIL: S&P Long-term Ratings Lowered to BB on Economic Challenges
------------------------------------------------------------------
On Feb. 17, 2016, Standard & Poor's Ratings Services lowered its
long-term foreign currency sovereign credit rating on the
Federative Republic of Brazil to 'BB' from 'BB+' and the long-term
local currency sovereign credit rating to 'BB' from 'BBB-'. The
outlook is negative. S&P also lowered the short-term
local currency rating to 'B' from 'A-3' and affirmed the 'B'
short-term foreign currency rating. At the same time, S&P lowered
the transfer and convertibility assessment to 'BBB-' from 'BBB'.
In addition, S&P lowered the national scale rating to 'brAA-' from
'brAAA', and the outlook on this rating is negative.
RATIONALE
The downgrade reflects its view that Brazil's credit profile has
weakened further since Sept. 9, 2015, when S&P last lowered the
ratings. The political and economic challenges Brazil faces remain
considerable. S&P now expects a more prolonged adjustment process
with a slower correction in fiscal policy, as well as another year
of steep economic contraction.
Execution risks to corrective fiscal policy remain high in the
near term following the government's inability to pass some
budgetary measures in late 2015, which are now complicated by the
impeachment proceedings of President Dilma Rousseff underway in
Congress. In addition, despite government plans to table
structural reform, such as on pensions, S&P expects the political
environment after the conclusion of the impeachment process to
also limit the viability of reforms -- regardless of who is
president. The ongoing corruption investigations continue to weigh
heavily on near-term policy cohesion.
It appears the fiscal target for 2016 is under review again, given
the combined economic and political conditions. S&P perceives less
certainty within the president's cabinet on fiscal policy. "We now
expect the general government deficit to average 8% of GDP in 2016
and 2017 before declining to 5% in 2018,
versus 10% in 2014. This is in line with our projections of a
primary fiscal deficit that averages 1% in 2016 and 2017, with the
government generating a positive primary result in 2018. A high
(and slow-to-decline) interest burden (given higher interest rates
and the impact of the weaker Brazilian real on outstanding foreign
exchange swaps) contributes to the large deficit. The
slightly larger change in general government debt to GDP vis-a-vis
the headline deficit incorporates some fluctuations in central
bank repo operations and an end to off-budget (below-the-line)
spending," said S&P.
S&P added, "We expect general government debt, net of liquid
assets (not including international reserves), to rise to 58% of
GDP this year and above 60% in 2017, from 50% in 2015. We also
expect interest to revenues to remain above 20% and to moderate
slowly given the depreciation of the Brazilian real and
high interest rates. We now assess contingent liabilities from the
financial sector and all Brazilian nonfinancial public enterprises
(including Petrobras) as moderate. This revised assessment
considers Petrobras' weakened financial profile, with a stand-
alone credit profile of 'b-', its debt of 7% of GDP, and
our assessment of a very high likelihood of extraordinary
government support if needed.
"Our rating on Brazil reflects our view of its established
political institutions that provide important backing for economic
stability -- albeit with weaker policy execution than before. We
find that the ongoing corruption investigations of high-profile
individuals and companies in both the private
and public sectors and across political parties have led to
increased near-term political uncertainty. These independent
investigations and subsequent prosecutions of corrupt practices
are a testament to the institutional framework in Brazil, but
weakened political cohesion and coalition dynamics augur poorly
for approval of needed fiscal adjustment measures, even with a
relaxed fiscal target, in our view.
"We continue to believe that economic weakness exacerbates
execution risk for the fiscal accounts, with the contraction in
real GDP deep and long. With per capita GDP expected to decline to
about US$7,300 in 2016, Brazil's growth prospects are, in our
opinion, below that of other countries at a similar stage of
development. We estimate that real GDP contracted by 3.6% in 2015,
and we expect another contraction of about 3% this year, before
positive growth resumes in 2017. In our view, the legacy of prior
policy decisions under the first Rousseff Administration damaged
business sentiment and investment prospects. The uncertainties and
spillover effects associated with the corruption investigations
and curtailment of investment by Petrobras and its suppliers,
however, pushed growth to negative territory."
The impeachment proceedings continue to dampen business sentiment.
It is hard to envisage Brazil returning to positive growth until
its political uncertainties recede.
Once this happens, restoring macroeconomic balance and advancing
microeconomic reform will be key to support investment and growth.
In 2015, the government reduced off-budget spending and removed
various economic distortions, including artificially suppressed
administered prices. The government also placed renewed emphasis
on private-sector participation in infrastructure projects, but in
the current context, advancements have been slow. These, however,
have been positive steps.
Inflation dynamics pose another challenge for Brazil despite
severe economic contraction. Consumer price inflation of 10.7% at
year-end 2015, the highest since 2002, reflected the correction of
administered prices and depreciation of the real. To try and
contain inflation and inflation expectations -- which remain
unanchored -- the central bank embarked on another tightening
cycle (325 basis points of tightening since October 2014), having
last raised rates in November 2015 with the overnight rate at
14.25%.
On a positive note, Brazil's external accounts are adjusting
faster than previously anticipated. S&P said, "We have revised our
expectations for the current deficit lower to an average of about
2% of GDP in 2016-2018. In addition, we expect foreign direct
investment (FDI) to fully finance the current account.
As such, we expect narrow net external debt to average a lower 14%
of current account receipts in 2016-2018. We calculate our
estimates of external debt on a residency basis. These estimates
include nonresident holdings of locally issued real-denominated
government debt estimated at about US$126 billion as of December
2015 (52% of current account receipts), down from US$153 billion
in 2014 because of the depreciation of the real. These holdings
continued to rise in reais terms. Our external debt data, however,
do not include debt of approximately 40% of current account
receipts raised offshore by Petrobras and transferred in the form
of FDI to the head office. The Brazilian real is an
actively traded currency, and Brazil has lower external financing
needs compared with its current account receipts and a high level
of international reserves relative to some of its peers."
S&P related, "We lowered the local currency rating by two notches
to 'BB', the same as the foreign currency rating, reflecting the
marked deterioration in Brazil's fiscal performance that we now
expect will take longer than expected to reverse. Previously,
greater policy flexibility had supported our view of moderately
higher capacity to service real-denominated debt issued in the
domestic market. Following improvement in fiscal accounts, greater
policy flexibility would be bolstered by Brazil's floating and
actively traded currency as well as its sizable local capital
market. Besides government debt securities outstanding in the
hands of the public and central bank of 44% of
GDP, Brazil's local currency fixed-income and money markets
include private-sector issuance of around 35% of GDP."
OUTLOOK
The negative outlook reflects S&P's view that there is a greater
than one-in-three likelihood that it could lower the ratings on
Brazil. "We anticipate that within the next year a downgrade could
stem, in particular, from potential key policy reversals given
Brazil's fluid political dynamics, including lack of cohesion
within the cabinet, inconsistent policy initiatives, and
uncertainties during or following the impeachment process. A
downgrade could also result from greater economic turmoil than we
currently expect, either due to governability issues or the
weakened external environment."
S&P said, "We could revise the outlook to stable if Brazil's
political uncertainties and conditions for consistent policy
execution improve across branches of government to stanch fiscal
deterioration and strengthen GDP growth prospects. We expect that
these improvements would support a quicker turnaround and could
help Brazil exit from the current recession, facilitating improved
fiscal performance and providing more room to maneuver in the face
of economic shocks.
"In accordance with our relevant policies and procedures, the
Rating Committee was composed of analysts that are qualified to
vote in the committee, with sufficient experience to convey the
appropriate level of knowledge and understanding of the
methodology applicable (see 'Related Criteria And Research'). At
the onset of the committee, the chair confirmed that the
information provided to the Rating Committee by the primary
analyst had been distributed in a timely manner and was sufficient
for Committee members to make an informed decision."
After the primary analyst gave opening remarks and explained the
recommendation, the Committee discussed key rating factors and
critical issues in accordance with the relevant criteria.
Qualitative and quantitative risk factors were considered and
discussed, looking at track-record and forecasts.
The committee agreed that "fiscal assessment: debt burden" had
deteriorated. All other key rating factors were unchanged.
The chair ensured every voting member was given the opportunity to
articulate his/her opinion. The chair or designee reviewed the
draft report to ensure consistency with the Committee decision.
The views and the decision of the rating committee are summarized
in the above rationale and outlook. The weighting of all rating
factors is described in the methodology used in this rating
action.
RATINGS LIST
Downgraded
To From
Brazil (Federative Republic of)
Sovereign Credit Rating
Foreign Currency BB/Neg/B BB+/NegB
Local Currency BB/Neg/B BBB-/Neg/A-3
Transfer & Convertibility Assessment BBB- BBB
Senior Unsecured
Foreign Currency BB BB+
Local Currency BB BBB-
Local Currency BB BB+
Short-Term Debt
Local Currency B A-3
Brazil (Federative Republic of)
Sovereign Credit Rating
Brazil National Scale brAA-/Neg/-- brAAA/Neg/--
Senior Unsecured
Brazil National Scale brAA- brAAA
BANCO DO BRASIL: S&P Downgrades GSR to BB; Outlook Negative
-----------------------------------------------------------
Standard & Poor's Ratings Services lowered its global scale credit
ratings on 17 financial service companies and lowered the national
scale ratings on 27 entities. S&P also placed or maintained
CreditWatch negative listings on 18 financial services companies
while S&P evaluates the potential negative impact of the sovereign
downgrade on the creditworthiness of the financial system and
banks' individual risk exposures.
These actions follow the downgrade of the Federative Republic of
Brazil to 'BB' from 'BB+' (long-term foreign currency), and to
'BB' from 'BBB-' (long-term local currency).
Therefore, S&P lowered its global scale ratings and maintained
negative outlooks on the following Brazilian financial services
companies:
Caixa Economica Federal S.A.;
Banco Nacional de Desenvolvimento Economico e Social S.A.;
Banco Safra S.A.;
Banco Bradesco S.A.;
Banco Citibank S.A.;
Itau Unibanco Holding S.A.;
Itau Unibanco S.A.;
Banco Santander (Brasil) S.A.;
Banco do Nordeste do Brasil S.A.;
Banco do Brasil S.A.;
Banco ABC Brasil S.A.
S&P lowered its global scale ratings with CreditWatch negative
implications on:
Banco BTG Pactual S.A.;
Banco Votorantim S.A.;
Banrisul - Banco do Estado do Rio Grande do Sul S.A.;
Banco de Desenvolvimento do Estado de Minas Gerais S.A.;
HSBC Bank Brasil S.A.;
Banco Daycoval S.A.
S&P lowered the national scale ratings on the following entities:
Caixa Economica Federal S.A.;
Banco Nacional de Desenvolvimento Economico e Social S.A.;
BNDESPar - BNDES Participacos S.A..;
Banco Safra S.A.;
Banco Bradesco S.A.;
Bradesco Capitalizacao S.A.;
Banco Citibank S.A.;
Itau Unibanco Holding S.A.;
Itau Unibanco S.A.;
Banco BTG Pactual S.A.;
Banco Toyota do Brasil S.A.;
Banco BNP Paribas Brasil S.A.;
Banco Volkswagen S.A.;
Banco de Tokyo Mitsubishi UFJ S.A.;
Banco Morgan Stanley S.A.;
Banco Santander (Brasil) S.A.;
Banco Bonsucesso Consignado S.A.;
Banco do Nordeste do Brasil S.A.;
Ativos S.A. Securitizadora de Creditos Financeiros;
Banco de Desenvolvimento do Estado de Minas Gerais S.A.;
Banco Votorantim S.A.;
Votorantim Financas S.A.;
BV Leasing Arrendamento Mercantil S.A.;
Banco ABC Brasil S.A.;
Banrisul - Banco do Estado do Rio Grande do Sul S.A.;
Banco Daycoval S.A.;
Banco do Estado do Para S.A.
S&P placed the following financial services companies on
CreditWatch negative:
Votorantim Financas S.A.;
BV Leasing Arrendamento Mercantil S.A.;
Banco Indusval S.A.;
Banco Intermedium S.A.;
Banco Mercantil do Brasil S.A.;
BRB - Banco de Brasilia S.A.;
Banco Pine S.A.;
Parana Banco S.A.;
Caruana S.A. - Sociedade de Credito Financiamento e Investimento;
Banco do Estado do Para S.A.
S&P is placing the following companies on CreditWatch developing:
Banco Original S.A.;
Banco Original do Agronegocio S.A.
S&P affirmed the ratings on the following entities:
Banco Fibra S.A.;
Haitong Banco de Investimento do Brasil S.A.
S&P maintained the CreditWatch negative listings for the following
entities:
China Construction Bank (Brasil) Banco Multiplo S.A.;
Banco Pan S.A.
S&P believes Brazil's credit profile has weakened further since
Sept. 9, 2015, when it last lowered the ratings. The political and
economic challenges Brazil faces remain considerable. S&P now
expects a more prolonged adjustment process with a slower
correction in fiscal policy as well as another year of steep
economic contraction.
S&P rarely rates financial services companies above the sovereign
long-term rating because, during sovereign stress, the sovereign's
regulatory and supervisory powers may restrict a bank's or
financial system's flexibility, and because banks are affected by
many of the same economic factors that cause sovereign stress.
With the exception of BM&F Bovespa, none of the financial services
companies S&P currently rates, including those with an SACP higher
than Brazil's sovereign rating, pass S&P's stress test for ratings
above the sovereign.
S&P said, "In the case of Banco Pan, we maintained the CreditWatch
negative listing on the 'BB-' global scale ratings even though
this rating is now one notch above those on its controlling
shareholder (BTG Pactual S.A.; B+/Watch Neg/B),
pending an evaluation of Banco Pan's insulation from BTG Pactual.
We've seen a relatively limited impact on Banco Pan's credit
fundamentals since BTG came under stress, but we require further
information from Banco Pan to conclude our analysis on its
potential insulation. The ratings on Banco Pan could remain above
those on BTG if we conclude that it is an insulated subsidiary.
The ratings on BTG would cap those on Banco Pan if we conclude
that Banco Pan is not an insulated subsidiary.
"Since our last rating action on Sept. 9, 2015, execution risks to
corrective fiscal policy remain high in the near term following
inability to pass some budgetary measures in late 2015 which are
now complicated by impeachment proceedings. In addition, despite
government plans to table structural reform,
such as on pensions, we expect the political environment post
impeachment to also limit viability of marked reform whoever is
president. The ongoing corruption investigations continue to weigh
heavily on near-term policy cohesion.
"We expect general government debt, net of liquid assets (not
including international reserves), to rise to 58% of GDP this year
and above 60% in 2017, from 50% in 2015. We also expect interest
to revenues to remain above 20%, and to moderate slowly given the
depreciation of the Brazilian real and higher interest rates. We
now assess contingent liabilities from the financial
sector and all Brazilian NFPEs (nonfinancial public enterprises,
including Petrobras) as moderate.
"Our rating on Brazil reflects our view of its established
political institutions and that provide important backing for
economic stability -- albeit with weaker policy execution than
before. We find that the ongoing investigations of corruption
allegations against high-profile individuals and companies in both
the private and public sectors and across political
parties -- have led to increased near-term political uncertainty.
"They and the impeachment proceedings represent a political, but
not institutional crisis. These independent investigations and
subsequent prosecutions of corrupt practices are a testament to
the institutional framework in Brazil, which contrasts with that
of other emerging economies. At the same time, weakened political
cohesion and coalition dynamics between the Workers' Party and the
Brazilian Democratic Movement Party (and intra-party
conflict) augur poorly for approval of needed fiscal adjustment
measures, even with a relaxed fiscal target, in our view. Indeed,
we continue to believe that economic weakness exacerbates
execution risk for the fiscal accounts, with the contraction in
real GDP deep and long."
OUTLOOK
S&P said, "The negative outlook reflects our view that there is a
greater than one-in-three likelihood that we could lower Brazil's
ratings again. We anticipate that within the next year a downgrade
could stem in particular from a from potential key policy
reversals given the fluid political dynamics, including lack of
cohesion within the cabinet, inconsistent policy initiatives, and
uncertainties during or following the impeachment process. A
downgrade could also result from greater economic turmoil than we
currently expect either due to governability issues or the
weakened external environment.
"We could revise the outlook to stable if Brazil's political
uncertainties and conditions for consistent policy execution were
to improve across branches of government to staunch fiscal
deterioration and stregthen GDP growth prospects. We expect that
these improvements would support a quicker turnaround and could
help Brazil exit from the current recession, facilitating improved
fiscal performance and providing more room to maneuver in the face
of economic shocks.
"The ratings on these financial services companies could stabilize
following a similar action on the sovereign if Brazil's political
certainties and conditions for consistent policy execution --
across branches of government to staunch fiscal deterioration --
improved."
CREDITWATCH
S&P aims to resolve the CreditWatch listings within 90 days.
The CreditWatch listings should be resolved upon S&P's evaluation
of the negative impact of the sovereign downgrade on the financial
sector's creditworthiness, and on each bank's credit risk
exposures. S&P may lower the long-term ratings of some entities by
more than one notch.
RATINGS LIST
Ratings Lowered
To From
Caixa Economica Federal S.A.
Local Currency
Global scale rating
BB/Negative/B BBB-/Negative/A-3
Foreign Currency
Global scale rating
BB/Negative/B BB+/Negative/B
Brazil national scale
brAA-/Negative/brA-1 brAAA/Negative/brA-1+
Senior Unsecured BB BB+
Banco Nacional de Desenvolvimento Economico e Social S.A.
Local Currency
Global scale rating
BB/Negative BBB-/Negative
Foreign Currency
Global scale rating
BB/Negative BB+/Negative
Brazil national scale
brAA-/Negative brAAA/Negative
Senior Unsecured BB BB+
BNDESPar - BNDES Participacoes S.A..
Brazil national scale
brAA-/Negative brAAA/Negative
Banco Safra S.A.
Global scale rating
BB/Negative/B BB+/Negative/B
Brazil national scale
brAA-/Negative/brA-1 brAA+/Negative/brA-1
Senior Unsecured BB BB+
Banco Bradesco S.A.
Global scale rating
BB/Negative/B BB+/Negative/B
Brazil national scale
brAA-/Negative/brA-1 brAA+/Negative/brA-1
Senior Unsecured
BB BB+
Bradesco Capitalizacao S.A.
Brazil national scale
brAA-/Negative brAA+/Negative
Banco Citibank S.A.
Global scale rating
BB/Negative/B BB+/Negative/B
Brazil national scale
brAA-/Negative/brA-1 brAA+/Negative/brA-1
Itau Unibanco Holding S.A.
Global scale rating
BB/Negative/B BB+/Negative/B
Brazil national scale
brAA-/Negative/brA-1 brAA+/Negative/brA-1
Senior Unsecured
BB BB+
Itau Unibanco S.A.
Global scale rating
BB/Negative/B BB+/Negative/B
Brazil national scale
brAA-/Negative/brA-1 brAA+/Negative/brA-1
Banco BTG Pactual S.A.
Global scale rating
B+/Watch Neg/B BB-/Watch Neg/B
Brazil national scale
brBBB-/Watch Neg/brA-3 brA-/Watch Neg/brA-2
Banco Toyota do Brasil S.A.
Brazil national scale
brAA-/Negative brAA+/Negative
Banco BNP Paribas Brasil S.A.
Brazil national scale
brAA-/Negative brAA+/Negative
Banco Volkswagen S.A.
Brazil national scale
brAA-/Negative brAA+/Negative
Banco de Tokyo Mitsubishi UFJ S.A.
Brazil national scale
brAA-/Negative/brA-1 brAA+/Negative/brA-1
Banco Morgan Stanley S.A.
Brazil national scale
brAA-/Negative/brA-1 brAA+/Negative/brA-1
Banco Santander (Brasil) S.A.
Global scale rating
BB/Negative/B BB+/Negative/B
Brazil national scale
brAA-/Negative/brA-1 brAA+/Negative/brA-1
Senior Unsecured
BB BB+
Subordinated
B B+
Junior Subordinated
CCC+ B-
Banco Bonsucesso Consignado S.A.
Brazil national scale
brAA-/Negative/brA-1 brAA+/Negative/brA-1
Banco do Nordeste do Brasil S.A.
Global scale rating
BB/Negative/B BB+/Negative/B
Brazil national scale
brAA-/Negative brAA+/Negative
Senior Unsecured
BB BB+
Banco do Brasil S.A.
Global scale rating
Local currency
BB/Negative BB+/Negative
Foreign currency
BB/Negative/B BB+/Negative/B
Senior Unsecured
BB BB+
Subordinated
B B+
Junior Subordinated
B- B
Ativos S.A. Securitizadora de Creditos Fin anceiros
Brazil national scale
brAA-/Negative brAA+/Negative
Banco de Desenvolvimento do Estado de Minas Gerais S.A.
Global scale rating
BB/Watch Neg BB+/Negative
Brazil national scale
brA+/Watch Neg brAA/Negative
Senior Unsecured
brA+/Watch Neg brAA
Banco Votorantim S.A.
Global scale rating
BB/Watch Neg/B BB+/Negative/B
Brazil national scale
brAA-/Watch Neg/brA-1 brAA/Negative/brA-1
Senior Unsecured
BB/Watch Neg BB+
Votorantim Finan‡as S.A.
Brazil national scale
brAA-/Watch Neg/brA-1 brAA/Negative/brA-1
BV Leasing Arrendamento Mercantil S.A.
Subordinated brA/Watch Neg brA+
HSBC Bank Brasil S.A.
Global scale rating
BB/Watch Neg/B BB+/Watch Neg/B
Senior Unsecured
BB/Watch Neg BB+/Watch Neg
Banco ABC Brasil S.A.
Global scale rating
BB/Negative/B BB+/Negative/B
Brazil national scale
brAA-/Negative/brA-1 brAA/Stable/brA-1
Senior Unsecured
BB BB+
Banrisul - Banco do Estado do Rio Grande do Sul S.A.
Global scale rating
BB/Watch Neg BB+/Negative
Brazil national scale
brAA-/Watch Neg brAA/Negative
Banco Daycoval S.A.
Global scale rating
BB/Watch Neg/B BB+/Negative/B
Brazil national scale
brAA-/Watch Neg/brA-1 brAA/Stable/brA-1
Senior Unsecured
BB/Watch Neg BB+
Banco do Estado do Para S.A.
Global scale rating
BB/Watch Neg/B BB/Negative/B
Brazil national scale
brA+/Watch Neg/brA-1 brAA-/Negative/brA-1
Outlook Action
BRB - Banco de Brasilia S.A.
Global scale rating
BB-/Watch Neg/B BB-/Negative/B
Brazil national scale
brA-/Watch Neg/brA-2 brA-/Negative/brA-2
Banco Indusval S.A.
Global scale rating
B+/Watch Neg/B B+/Negative/B
Brazil national scale
brBBB-/Watch Neg/brA-3 brBBB-/Negative/brA-3
Banco Intermedium S.A.
Brazil national scale
brBBB-/Watch Neg brBBB-/Negative
Banco Mercantil do Brasil S.A.
Global scale rating
B-/Watch Neg/C B-/Stable/C
Brazil national scale
brB+/Watch Neg brB+/Stable
Banco Original S.A.
Brazil national scale
brBBB/Watch Dev/brA-3 brBBB/ Dev/brA-3
Banco Original do Agronegocio S.A.
Brazil national scale
brBBB/Watch Dev/brA-3 brBBB/ Dev/brA-3
Banco Pine S.A.
Global scale rating
BB/Watch Neg/B BB/Negative/B
Brazil national scale
brA+/Watch Neg brA+/Negative
Senior Unsecured
brA+/Watch Neg brA+
Parana Banco S.A.
Global scale rating
BB/Watch Neg/B BB/Negative/B
Brazil national scale
brAA-/Watch Neg brAA-/Negative
Caruana S.A. - Sociedade de Credito Financiamento e Investimento
Brazil national scale
brBB+/Watch Neg brBB+/Negative
Ratings Affirmed
Banco Fibra S.A.
Global scale rating
B-/Negative/C
Brazil national scale
brB-/Negative/brC
Haitong Banco de Investimento do Brasil S.A.
Global scale rating
BB-/Positive/B
Brazil national scale
brA+/Positive/brA-2
Ratings with CreditWatch Negative maintained:
China Construction Bank (Brasil) Banco Multiplo S.A.
Global scale rating
BB/Watch Neg/B
Brazil national scale
brA+/Watch Neg
Banco BTG Pactual S.A.
Global scale rating
B+/Watch Neg/B
Brazil national scale
brBBB-/Watch Neg/brA-3
Banco Pan S.A.
Global scale rating
BB-/Watch Neg/B
Brazil national scale
brA-/Watch Neg/B
HSBC Bank Brasil S.A.
Global scale rating
BB/Watch Neg/B
Senior Unsecured
BB/Watch Neg
PETROLEO BRASILEIRO: S&P Lowers GSR to B+, Outlook Negative
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Standard & Poor's Ratings Services said it has taken several
rating actions on Brazilian corporations after it lowered its
long-term foreign currency issuer credit rating to 'BB' from
'BB+', its local currency ratings to 'BB/B' from 'BBB-/A-3', and
our national scale rating to 'brAA-' from 'brAAA' on Brazil
(see "Brazil Long-Term Ratings Lowered To 'BB' On Significant
Political And Economic Challenges; Outlook Negative," published
Feb. 17, 2016). S&P also revised its assessment on Brazil's
transfer & convertibility (T&C) to 'BBB-' from 'BBB'. The T&C
assessment reflects the possibility of the sovereign limiting the
domestic entities' access to foreign currency, a frequent
scenario during currency and sovereign crises.
The global scale ratings (GSRs) refer to both foreign and local
currency ratings. Also, in all cases, S&P refers to corporate
credit ratings, unless expressly noted that its referring to
issue-level ratings.
Brazil's tightening credit conditions and its lower credit quality
pressure the ratings of most of the domestic companies. As such,
these companies have been affected in various ways, depending on
their business configuration and financial strengths. S&P has
clustered companies in four groups, in accordance to their degree
of insulation from the Brazilian economy and their own unique
credit profiles.
First Group
The first group contains companies whose ratings S&P believes are,
and would remain, capped at the sovereign level. Therefore S&P
downgraded the vast majority of these companies to 'BB' with a
negative outlook. Some of these companies were already at 'BB', so
S&P has revised their outlooks to negative to reflect the pressure
from the sovereign's downgrade. S&P includes in this
group all utilities and most of the companies with their asset
bases largely located in Brazil, with revenues almost entirely
dependent on the domestic economy. These companies' overall credit
characteristics would preclude them from honoring their financial
obligations under a sovereign default scenario.
Also, S&P lowered most of the national scale ratings (NSRs) on
these companies to the sovereign level of 'brAA-' with a negative
outlook.
S&P relates that:
Ampla Energia e Servicos S.A -- We lowered our GSR to 'BB' and
NSR to 'brAA-' with a negative outlook.
Bandeirante Energia S.A. -- We lowered our NSR to 'brAA-' with a
negative outlook.
Espirito Santo Centrais Eletricas S.A. -- We lowered our GSR to
'BB' and NSR to 'brAA-' with a negative outlook.
Companhia de Gas de Sao Paulo Comgas. -- We lowered our GSR to
'BB' and NSR to 'brAA-' with a negative outlook.
Companhia de Eletricidade do Estado da Bahia - Coelba -- We
lowered our GSR to 'BB' and NSR to 'brAA-' with a negative
outlook.
Companhia Energetica do Ceara Coelce -- We lowered our NSR to
'brAA-' with a negative outlook.
Companhia Energetica de Pernambuco-Celpe -- We lowered our GSR
to 'BB' and NSR to 'brAA-' with a negative outlook.
Companhia Energetica do Rio Grande do Norte - Cosern -- We
lowered our GSR to 'BB' and NSR to 'brAA-' with a negative
outlook.
Companhia Paulista de Forca e Luz -- We lowered our NSR to
'brAA-' with a negative outlook.
Companhia Piratininga de Forca e Luz -- We lowered our NSR to
'brAA-' with a negative outlook.
CPFL Energia S.A. -- We lowered our NSR to 'brAA-' with a
negative outlook.
Elektro Eletricidade e Servicos S.A. -- We lowered our NSR to
'brAA-' with a negative outlook.
Eletropaulo Metropolitana Eletricidade de Sao Paulo S.A.-- We
affirmed our 'BB' GSR and lowered our NSR to 'brA+' from
'brAA-'.
Energisa S.A. -- We revised our outlook on the 'BB' GSR and the
'brAA-' NSR to negative from positive.
Energisa Paraiba-Distribuidora de Energia S.A. -- We revised
our outlook on the 'BB' GSR and 'brAA-' NSR to negative from
positive.
Energisa Sergipe - Distribuidora de Energia S.A. -- We revised
our outlook on the 'BB' GSR and 'brAA-' NSR to negative from
positive.
Itapebi Gercao de Energia S.A. -- We lowered the issue-level
rating to 'brA+' from 'brAA'.
MRS Logistica S.A. -- We lowered our NSR to 'brAA-' with a
negative outlook.
NC Energia S.A. -- We lowered the issue-level rating to 'brA+'
from 'brAA'.
Neoenegia S.A. -- We lowered our GSR to 'BB' and NSR to 'brAA-'
with a negative outlook.
RBS TV Comunicacoes S.A. e empresas combinadas -- We lowered the
GSR to 'BB' with a negative outlook.
Rio Grande Energia S.A. -- We lowered our NSR to 'brAA-' with a
negative outlook.
Termopernambuco S.A. -- We lowered the issue-level ratings to
'brA+' from 'brAA'.
Transmissora Alianca de Energia Eletrica S.A. -- We lowered our
GSR to 'BB' and NSR to 'brAA-' with a negative outlook.
Second Group
The second group of companies is also largely exposed to the
Brazilian economy but have a superior financial strength either
stemming from very low debt levels, very robust cash positions, or
their ownership of foreign assets or export-oriented businesses.
Depending on their individual strengths, these
companies may have a higher rating than the sovereign's foreign
currency ratings by one or two notches. The NSRs on some of these
companies have been negatively impacted as well, but still remain
above those of Brazil.
S&P relates that:
Ache Laboratorios Farmaceuticos S.A. -- We revised the outlook on
the GSR and the NSR to negative from stable, and affirmed them at
'BBB-' and 'brAAA', respectively, reflecting the two notches of
insulation from Brazil's foreign currency ratings. Due to Ache's
robust liquidity position, negligible debt levels, and resilient
operating cash flow generation as core strengths, its GSR is above
the sovereign's.
Braskem S.A. -- We affirmed our 'BBB-' GSRs and 'brAAA' NSR. The
outlooks on them remain negative, reflecting the two notches of
insulation from Brazil's foreign currency rating. Braskem's very
robust cash position outside Brazil, resilient cash flow
generation and foreign operations should cushion the company from
domestic downturns and are the main ratings supporters.
Gerdau S.A. and Gerdau Ameristeel Corporation -- We affirmed our
'BBB-' GSRs and 'brAAA' NSR on Gerdau and its related companies.
Both outlooks remain negative, reflecting the potential for a one-
notch downgrade due to weak conditions in Brazil's steel markets
and stiff competition in the U.S. Gerdau also benefits from a
diversified asset base. These factors would allow its ratings to
be up to two notches above the GSRs of Brazil.
Globo Comunicacao e Participacoes S.A. -- We lowered our GSRs to
'BBB-' from 'BBB'. The outlook remains negative, reflecting the
pressure stemming from the lower T&C assessment, which at this
point is the main rating constraint. Globo's ratings are capped at
Brazil's T&C because the company wouldn't generate enough foreign
currency to serve its foreign debts in a scenario of currency
controls.
Hypermarcas S.A. -- We affirmed our 'BB+' GSRs and 'brAA+' NSR,
and the outlook on both remains stable. In our view, the company
continues to benefit from its robust cash position, which recently
strengthened from a series of asset sales. These factors are
behind its higher ratings than those of Brazil.
Localiza Rent a Car S.A. -- We lowered our GSR to 'BB+' from 'BBB-
' and the NSR to 'brAA+' from 'brAAA'. The outlooks remain
negative, mirroring that of the sovereign. The one-notch
insulation on the GSRs stems from its robust liquidity, manageable
short-term debt, and conservative financial
leverage, all of which partly compensate for its high exposure to
Brazil. We placed the issue-level ratings on CreditWatch with
developing implications because we need to apply recovery ratings.
Lojas Renner S.A. -- We revised our outlook on the 'brAA+' NSR to
negative, reflecting a downgrade potential following an additional
downgrade on the sovereign. Still Renner's ratings remain above
Brazil's due mainly to its low leverage.
Multiplan Empreendimentos Imobiliarios S.A. -- We lowered our GSRs
to 'BB+' from 'BBB-' and NSR to 'brAA+' from 'brAAA'. The outlooks
on both remain negative, mirroring those on the sovereign. We rate
Multiplan one notch above Brazil GSR because we believe its robust
cash reserves, low debt, and favorable track record in the past
sovereign distress scenarios will
allow it to continue paying its debt for some time after a
sovereign default, but with a weaker cushion than those of higher
rated entities. We also placed our issue-level ratings on
CreditWatch developing because we need to apply recovery ratings.
Odebrecht Engenharia e Constru‡ao -- We lowered our GSR to 'BB+'
from 'BBB-' and our NSR to 'brAA+/brA-1' from 'brAAA/brA-1+'. The
outlooks on both remain negative, mirroring those on the
sovereign. In our view, Odebrecht's sizable cash position, very
low debt, and regional footprint act as a cushion from Brazil's
weak economy. However, its exposure to contingent and reputational
risk, stemming from the corruption investigation, limits rating
upside to one notch above those of Brazil. We also placed our
issue-level ratings on CreditWatch developing because
we need to apply recovery ratings.
Qualicorp S.A. -- We affirmed our 'brAA+' NSR and the outlook on
it remains stable. In our view, its robust cash position, very low
debt levels and resilient product portfolio keep its rating above
the sovereign's.
Raizen Combustiveis S.A. and Raizen Energia S.A. -- We lowered our
GSRs to 'BBB-' from 'BBB'. We also revised the outlook on the
'brAAA' NSR to negative from stable. We still view Raizen's sugar
export business and stand-by credit facilities outside Brazil
behind the higher rating than the sovereign's.
Sao Martinho S.A. -- We affirmed our 'BB+' GSR and 'brAA+' NSR,
and the outlook on both remains stable. Its sugar exports act as a
cushion against weak domestic economy. We continue to assess its
maximum rating potential over Brazil's ratings at two notches.
Telefonica Brasil S.A. -- We revised the outlook on our 'brAAA'
NSR to negative from stable, mirroring the outlook on the
sovereign ratings.
Ultrapar Participacoes S.A. -- We lowered our GSR to 'BB+' from
'BBB-' and our NSR to 'brAA+' from 'brAAA'. The GSRs remain one
notch above Brazil's due to the company's robust cash position,
low leverage, and relatively stable cash flow generation.
Votorantim S.A. and Votorantim Cimentos S.A. -- We lowered our
GSRs on these companies to 'BB+' from 'BBB-' and our NSRs to
'brAA+' from 'brAAA'. The outlooks on both remain negative,
mirroring those on the sovereign. We still view Votorantim as
partly insulated from Brazil's economy due to the ownership of
foreign assets, robust cash position, and stand-by credit
facilities. However, the higher rating potential is limited to one
notch because the cement operations and banking operations
are exposed to Brazil. The latter could create a contingent of
high severity under a sovereign distress. We also placed our
issue-level ratings on CreditWatch developing because we need to
apply recovery ratings.
Third Group
The third group consists of companies that are less exposed to the
Brazilian economy because they have large, geographic diversified
businesses or they're strictly exporters. Therefore, most of these
companies' ratings could be up to four notches above those of the
sovereign. The T&C assessment may pressure
some of them.
S&P relates that:
Ambev - Companhia de Bebidas das Americas -- We lowered our GSR to
'BBB+' from 'A-' and affirmed our 'brAAA' NSR. The outlook on the
GSR is negative, reflecting the possibility of a downgrade if the
sovereign ratings are lowered again. We continue to consider
Ambev's maximum rating potential to be four notches above the
sovereign ratings with the limit of two notches above Brazil's T&C
assessment. Ambev's geographic diversification, very conservative
leverage, and robust cash position are the main drivers of our
conclusions.
BRF S.A. -- We affirmed our 'BBB' GSR and 'brAAA' GSR, and the
outlook on both remains stable. We don't view BRF's ratings as
constrained by Brazil's, thanks to its global footprint,
generating about 50% of its consolidated revenues, outside Brazil.
We see potential for BRF's rating to reach up to two notches above
Brazil's T&C assessment.
Fibria Celulose S.A. -- We affirmed our 'BBB-' GSR and the outlook
on it remains stable because its exports insulate its cash flow
generation from the Brazilian economy. Still, we need to test
Fibria's ability to have a higher rating than Brazil's T&C
assessment. If we conclude that the company won't be able to pass
a hypothetical T&C stress, we may revise the outlook to negative.
We expect to finish the test in the next few weeks.
JBS S.A. -- We affirmed our 'BB+' GSR and 'brAA+' NSR, and the
outlook on both remains stable. We believe that JBS's global
footprint would help it endure a potential sovereign distress.
Klabin S.A. -- We affirmed our 'BBB-' GSR and 'brAA+' NSR, and
both outlooks remain negative. We continue to believe its
increasing exposure to international pulp markets and the global
demand for its paper products allow its rating to be up to three
notches above Brazil's ratings.
Suzano Papel e Celulose S.A. -- We affirmed our 'BB+' GSR and the
outlook remains stable. We continue to believe Suzano's ratings
can go as high as three notches above Brazil's ratings, absent
limitations from T&C.
Vale S.A. -- We affirmed our 'BBB-' GSR and 'brAAA' NSR, and the
outlook on both remains negative. We continue to view Vale's
ability to have a rating up to four notches above Brazil's ratings
with the one-notch limit above Brazil's T&C assessment.
Fourth Group
The fourth group of entities consists of government-related
entities (GREs), which the government would financially assist if
they were to face bankruptcy risks. These entities benefit from
additional notches on the basis of support.
S&P relates that:
Eletrobras-Centrais Eletricas Brasileiras S.A. -- We lowered our
GSR to 'BB' from 'BB' with a negative outlook and the short-term
NSR to 'brA-1' from 'brA-1+', mirroring the rating action on the
sovereign, given our assessment that there is an almost certain
likelihood of extraordinary government support to Eletrobras, if
necessary.
Petroleo Brasileiro S.A. - Petrobras -- We lowered our GSR to 'B+'
from 'BB' and NSR to 'brBBB-' from 'brA+', and the outlook on both
remains negative. Based on our assessment of a very high
likelihood of government support and on Petrobras' 'b-' stand-
alone credit profile (SACP), an additional downgrade may follow a
downgrade on Brazil's local currency rating or if Petrobras' SACP
weakens to 'ccc' or lower.
CreditWatch
S&P placed the ratings on the following companies on CreditWatch
negative because there's at least a 50% chance of a downgrade. S&P
expects to resolve these CreditWatch listings in the next 90 days.
Andrade Gutierrez Participacoes S.A. -- We placed our 'brAA' NSR
on CreditWatch, subject to final rating impacts on investees and
overall resiliency to a sovereign distress.
Companhia Brasileira de Distribuicao -- We maintained the 'brAA+'
NSR on CreditWatch negative until we resolve the CreditWatch
listings on its parent company, Casino GuichardPerrachon & Cie
S.A.
Embraer S.A. -- We placed our 'BBB' GSR on CreditWatch negative
because we need to test the company's ability to endure potential
restrictions on access to foreign currency. If that outcome were
to be negative, we would downgrade Embraer by one notch, aligning
it with Brazil's T&C assessment.
Iguatemi Empresa de Shopping Centers (IESC) -- We placed our
'brAA+' NSR on CreditWatch negative because we estimate there is
at least a 50% chance that the company won't pass the stress test
in order to have a higher rating than Brazil's local currency
rating.
Natura Cosmeticos S.A. -- We placed our 'BBB' GSR and 'brAAA' NSR
on CreditWatch negative, reflecting at least a 50% chance of a
downgrade if the company won't pass the stress scenario to have a
higher rating than Brazil's local currency rating or Brazil's T&C
assessment. Finally, in the next few months we will be testing the
ability of the following companies to honor obligations during a
sovereign distress. Because their ratings are at the same level of
Brazil, we don't foresee rating changes, but we could revise our
outlook to negative on companies that don't
pass the sovereign stress.
Algar Telecom S/A;
Camil Alimentos S.A.;
Cosan Ltd. and Cosan S.A.;
Cyrela Brazil Realty S.A. Emprendimentos e Participacoes;
Diagnosticos de America S.A.;
Estacio Participacoes S.A.;
JSL S.A.;
MRV Engenharia e Participacoes S.A.;
Rede DOr Sao Luiz S.A.; and
Unidas S.A.
S&P will continue to monitor the overall credit quality evolution
for the corporate sector in the country in light of continuing
challenging economic and political situation, higher inflation,
exchange rate volatility, higher interest rates, reduced debt
market access, and low commodity prices. All these factors add
downward rating pressure on individual names despite future
sovereign rating trajectory.
RATINGS LIST
Ratings Lowered
To From
AmBev - Companhia de Bebidas das Americas
Global Scale BBB+/Negative/-- A-/Negative/--
National Scale brAAA/Stable/--
Ampla Energia e Servicos S.A
Global Scale BB/Negative/-- BB+/Negative/--
National Scale brAA-/Negative/-- brAA/Negative/--
Andrade Gutierrez Participacoes S.A.
National Scale brAA/Watch Neg/-- brAA/Stable/--
Bandeirante Energia S.A.
National Scale brAA-/Negative/-- brAA/Negative/--
Espirito Santo
Centrais Eletricas S.A.
Global Scale BB/Negative/-- BB+/Negative/--
National Scale brAA-/Negative/-- brAA/Negative/--
Companhia de Gas de Sao Paulo - Comgas
Global Scale BB/Negative/-- BB+/Negative/--
National Scale brAA-/Negative/-- brAA+/Negative/-
Companhia Energetica do Ceara - Coelce
National Scale
brAA-/Negative/brA-1 brAA+/Negative/brA-1
CPFL Energia S.A.
Companhia Paulista de Forca e Luz
Companhia Piratininga de Forca e Luz
Rio Grande Energia S.A.
National Scale brAA-/Negative/-- brAA/Negative/--
Elektro Eletricidade e Servicos S.A.
National Scale brAA-/Negative/-- brAA+/Negative/--
Eletrobras-Centrais Eletricas Brasileiras S.A.
Local Currency BB/Negative/-- BBB-/Negative/--
Foreign Currency BB/Negative/-- BB+/Negative/--
National Scale --/--/brA-1 --/--/brA-1+
Eletropaulo Metropolitana Eletricidade
de Sao Paulo S.A.
Global Scale BB/Negative/--
National Scale brA+/Negative/-- brAA-/Negative/--
Energisa S.A.
Energisa Paraiba-Distribuidora de Energia S.A.
Energisa Sergipe-Distribuidora de Energia S.A.
Global Scale BB/Negative/-- BB/Positive/--
National Scale brAA-/Negative/-- brAA-/Positive/--
Globo Comunicacao e Participacoes S.A.
Global Scale BBB-/Negative/-- BBB/Negative/--
Localiza Rent a Car S.A.
Global Scale BB+/Negative/-- BBB-/Negative/--
National Scale brAA+/Negative/-- brAAA/Negative/--
Senior Unsecured brAA+/Watch Dev brAAA
MRS Logistica S.A.
Global Scale BB/Negative/-- BB+/Negative/--
National Scale brAA-/Negative/-- brAA+/Negative/--
Multiplan Empreendimentos Imobiliarios S.A.
Global Scale BB+/Negative/-- BBB-/Negative/--
National Scale brAA+/Negative/-- brAAA/Negative/--
Senior Unsecured brAA+/Watch Dev brAAA
Neoenergia S.A.
Companhia de Eletricidade do Estado da Bahia
Companhia Energetica do Rio Grande do Norte
Companhia Energetica de Pernambuco (CELPE)
Global Scale BB/Negative/-- BB+/Negative/--
National Scale brAA-/Negative/-- brAA+/Negative/--
Neoenergia S.A.
National Scale brAA-/Negative/brA-1 brAA+/Negative/brA-1
Itapebi Geracao de Energia S.A.
Subordinated
National Scale brA+ brAA
Termopernambuco S.A.
Senior Unsecured
National Scale brA+ brAA
NC Energia S.A.
Senior Unsecured
National Scale brA+ brAA
Odebrecht Engenharia e Construcao S.A.
Global Scale BB+/Negative/-- BBB-/Negative/--
Brazilian
National Scale brAA+/Negative/brA-1 brAAA/Negative/brA-1+
Senior Unsecured BB+/Watch Dev BBB-
Petroleo Brasileiro S.A. - Petrobras
Global Scale B+/Negative/-- BB/Negative/--
National Scale brBBB-/Negative/-- brA+/Negative/--
Raizen Combustiveis S.A.
Raizen Energia S.A.
Global Scale BBB-/Negative/-- BBB/Negative/--
National Scale brAAA/Negative/-- brAAA/Stable/--
Grupo RBS
Global Scale BB/Negative/-- BB+/Negative/--
Transmissora Alianca de Energia Eletrica S.A.
Global Scale BB/Negative/-- BB+/Negative/--
National Scale brAA-/Negative/brA-1 brAA+/Negative/brA-1
Ultrapar Participacoes S.A.
Global Scale BB+/Negative/-- BBB-/Negative/--
National Scale brAA+/Negative/-- brAAA/Negative/--
Votorantim S.A.
Global Scale BB+/Negative/-- BBB-/Negative/--
National Scale brAA+/Negative/-- brAAA/Negative/--
Senior Unsecured BB+/Watch Dev BBB-
Votorantim Cimentos S.A.
Global Scale BB+/Negative/-- BBB-/Negative/--
Senior Unsecured BB+/Watch Dev BBB-
Ratings placed on CreditWatch negative
Embraer S.A.
Global Scale BBB/Watch Neg/-- BBB/Stable/--
Iguatemi Empresa de Shopping Centers S.A.
National Scale brAA+/Watch Neg/-- brAA+/Stable/--
Natura Cosmeticos S.A.
Global Scale BBB/Watch Neg/-- BBB/Negative/--
National Scale brAAA/Watch Neg/-- brAAA/Stable/--
Outlook Revised to Negative
Ache Laboratorios Farmaceuticos S.A.
Global Scale BBB-/Negative/-- BBB-/Stable/--
National Scale brAAA/Negative/-- brAAA/Stable/--
Telefonica Brasil S.A.
National Scale brAAA/Negative/-- brAAA/Stable/--
Lojas Renner S.A.
National Scale brAA+/Negative/-- brAA+/Stable/--
Ratings Affirmed
Braskem S.A.
Global Scale BBB-/Negative/--
National Scale brAAA/Negative/--
BRF S.A.
Global Scale BBB/Stable/--
National Scale brAAA/Stable/--
Companhia Brasileira de Distribuicao
National Scale brAA+/Watch Neg/--
Fibria Celulose S.A.
Global Scale BBB-/Stable/--
Gerdau S.A.
Global Scale BBB-/Negative/--
National Scale brAAA/Negative/--
Gerdau Ameristeel Corp.
Global Scale BBB-/Negative/--
Hypermarcas S.A.
Global Scale BB+/Stable/--
National Scale brAA+/Stable/--
JBS S.A.
Global Scale BB+/Stable/--
National Scale brAA+/Stable/--
JBS USA LLC
Global Scale BB+/Stable/--
Klabin S.A.
Global Scale BBB-/Negative/--
National Scale brAA+/Negative/--
Qualicorp S.A.
National Scale brAA+/Stable/--
Sao Martinho S.A.
Global Scale BB+/Stable/--
National Scale brAA+/Stable/--
Suzano Papel e Celulose S.A.
Global Scale BB+/Stable/--
Vale S.A.
Global Scale BBB-/Negative/--
National Scale brAAA/Negative/--
Vale Canada Ltd.
Global Scale BBB-/Negative/--
==========================
C A Y M A N I S L A N D S
==========================
BAIA INVESTMENT: Shareholder Receives Wind-Up Report
----------------------------------------------------
The shareholder of Baia Investment Ltd. received on Jan. 19, 2016,
the liquidator's report on the company's wind-up proceedings and
property disposal.
The company's liquidator is:
Morval Bank & Trust Cayman Ltd.
P.O. Box 30622 Grand Cayman KY1-1203
Cayman Islands
Telephone: +1 (345) 949-9808
CEDAR PARTNERS: Shareholders Receive Wind-Up Report
---------------------------------------------------
The shareholders of Cedar Partners Investment Management Limited
received on Jan. 21, 2016, the liquidator's report on the
company's wind-up proceedings and property disposal.
The company's liquidator is:
Nicola Cowan
DMS Corporate Services Ltd.
Telephone: (345) 946 7665
Facsimile: (345) 949 2877
dms House, 2nd Floor
P.O. Box 1344 Grand Cayman KY1-1108
Cayman Islands
CLAIRVUE (CAYMAN): Shareholders Receive Wind-Up Report
------------------------------------------------------
The shareholders of Clairvue (Cayman) GP, Ltd. received on
Jan. 14, 2016, the liquidator's report on the company's wind-up
proceedings and property disposal.
The company's liquidator is:
Brendan MacDonald
c/o Barnaby Gowrie
Telephone: +1 (345) 914 6365
DIVE MASTER: Shareholder Receives Wind-Up Report
------------------------------------------------
The shareholder of Dive Master Inc received on Jan. 28, 2016, the
liquidator's report on the company's wind-up proceedings and
property disposal.
The company's liquidator is:
Commerce Corporate Services Limited
P.O. Box 694 Grand Cayman
Cayman Islands
Telephone: 949 8666
Facsimile: 949 0626
EDIN INVESTMENTS: Members Receive Wind-Up Report
------------------------------------------------
The members of Edin Investments Enterprises Limited received on
Jan. 21, 2016, the liquidator's report on the company's wind-up
proceedings and property disposal.
The company's liquidator is:
Eagle Holdings Ltd.
c/o Barclays Trust Company (Cayman) Limited
FirstCaribbean House, 4th Floor
P.O. Box 487 Grand Cayman KY1-1106
Cayman Islands
EL (CAYMAN): Shareholders Receive Wind-Up Report
------------------------------------------------
The shareholders of EL (Cayman) Ltd. received on Jan. 14, 2016,
the liquidator's report on the company's wind-up proceedings and
property disposal.
The company's liquidator is:
Fox Paine Capital Co-Investors International GP, Ltd.
c/o Rupert Bell
Walkers
190 Elgin Avenue, George Town
Grand Cayman KY1-9001
Cayman Islands
Telephone: +1 (345) 914 4203
EQUINOX FINANCE: Shareholder Receives Wind-Up Report
----------------------------------------------------
The shareholder of Equinox Finance International Ltd received on
Jan. 28, 2016, the liquidator's report on the company's wind-up
proceedings and property disposal.
The company's liquidator is:
Commerce Corporate Services Limited
P.O. Box 694 Grand Cayman
Cayman Islands
Telephone: 949 8666
Facsimile: 949 0626
F&C SENTINEL: Shareholder Receives Wind-Up Report
-------------------------------------------------
The shareholder of F&C Sentinel Fund Limited received on Jan. 28,
2016, the liquidator's report on the company's wind-up proceedings
and property disposal.
The company's liquidator is:
David A.K. Walker
c/o Sarah Moxam
Telephone: (345) 914 8634
Facsimile: (345) 945 4237
P.O. Box 258 Grand Cayman KY1-1104
Cayman Islands
GLOBAL EDUCATION: Shareholders Receive Wind-Up Report
-----------------------------------------------------
The shareholders of Global Education Learning (Holdings) Ltd.
received on Dec. 21, 2015, the liquidator's report on the
company's wind-up proceedings and property disposal.
The company's liquidator is:
Anthony Tong Yi Change
c/o Global Education Learning
Suite 901, The Hong Kong Club Building
3A Chater Road Central
Hong Kong
ICHIKAWA TWO: Shareholders Receive Wind-Up Report
-------------------------------------------------
The shareholders of Ichikawa Two received on Jan. 12, 2016, the
liquidator's report on the company's wind-up proceedings and
property disposal.
The company's liquidator is:
Richard Fear
c/o Ryan Charles
Telephone: (345) 814 7364
Facsimile: (345) 945 3902
P.O. Box 2681 Grand Cayman KY1-1111
Cayman Islands
JECD LIMITED: Shareholder Receives Wind-Up Report
-------------------------------------------------
The shareholder of JECD Limited received on Jan. 28, 2016, the
liquidator's report on the company's wind-up proceedings and
property disposal.
The company's liquidator is:
Commerce Corporate Services Limited
P.O. Box 694 Grand Cayman
Cayman Islands
Telephone: 949 8666
Facsimile: 949 0626
NARASHINO THREE: Shareholders Receive Wind-Up Report
----------------------------------------------------
The shareholders of Narashino Three received on Jan. 12, 2016, the
liquidator's report on the company's wind-up proceedings and
property disposal.
The company's liquidator is:
Richard Fear
c/o Ryan Charles
Telephone: (345) 814 7364
Facsimile: (345) 945 3902
P.O. Box 2681 Grand Cayman KY1-1111
Cayman Islands
NEBULAE CANADIAN: Shareholders Receive Wind-Up Report
-----------------------------------------------------
The shareholders of Nebulae Canadian Resource Fund Ltd. received
on Jan. 14, 2016, the liquidator's report on the company's wind-up
proceedings and property disposal.
The company's liquidator is:
Norrep Capital Management Ltd.
TD North Tower 4330
77 King Street West
P.O. Box 196 Toronto
Ontario M5K 1H6
Canada
Telephone: +1 (416) 640 4163
PNT SPV: Shareholders Receive Wind-Up Report
--------------------------------------------
The shareholders of PNT SPV, Ltd. received on Jan. 21, 2016, the
liquidator's report on the company's wind-up proceedings and
property disposal.
The company's liquidator is:
Nicola Cowan
DMS Corporate Services Ltd.
Telephone: (345) 946 7665
Facsimile: (345) 949 2877
dms House, 2nd Floor
P.O. Box 1344 Grand Cayman KY1-1108
Cayman Islands
PRIDE INVESTMENTS: Shareholders Receive Wind-Up Report
------------------------------------------------------
The shareholders of The Pride Investments Group Limited received
on Jan. 12, 2016, the liquidator's report on the company's wind-up
proceedings and property disposal.
The company's liquidator is:
Richard Fear
c/o Ryan Charles
Telephone: (345) 814 7364
Facsimile: (345) 945 3902
P.O. Box 2681 Grand Cayman KY1-1111
Cayman Islands
YAOLAN NEW: Shareholders Receive Wind-Up Report
-----------------------------------------------
The shareholders of Yaolan New Media Ltd. received on Jan. 13,
2016, the liquidator's report on the company's wind-up proceedings
and property disposal.
The company's liquidator is:
Anthony Tong Yi Change
c/o Global Education Learning
Suite 901, The Hong Kong Club Building
3A Chater Road
Central
Hong Kong
===============
C O L O M B I A
===============
CREDISERVICIOS SAS: S&P Affirms 'B+/B' ICRs, Outlook Stable
----------------------------------------------------------
Standard & Poor's Ratings Services revised the outlook to negative
and affirmed its ratings on the following financial institutions:
Bancolombia, S. A. y Companias Subordinadas (Bancolombia;
BBB-/Negative/A-3);
Banco de Bogota S.A. y Subsidiarias (BBogota; BBB-/Negative/A-3);
Banco Davivienda S.A. (Davivienda; BBB-/Negative/A-3);
Financiera de Desarrollo Nacional S.A. (FDN; BBB/Negative/--); and
Financiera de Desarrollo Territorial S.A. FINDETER (Findeter;
BBB/Negative/A-2).
S&P also took similar rating actions on Bancolombia and BBogota's
core entities:
Bancolombia Panama S.A. (BBB-/Negative/A-3)
Banistmo S.A. (BBB-/Negative/A-3)
BAC International Bank Inc. (BIB; BBB-/Negative/A-3)
Credomatic International Corp. (BBB-/Negative/A-3)
At the same time, S&P affirmed the 'B+'/B' issuer credit ratings
on Credivalores- Crediservicios SAS (Credivalores). The outlook
remains stable.
S&P said, "We revised our BICRA score on Colombia (foreign
currency: BBB/Negative/A-2; local currency: BBB+/Negative/A-2) to
group '6' from '5', which anchors banks operating in the country
at 'bb+'. This action reflects the revision of our economic risk
score to '7' from '6' due to our view of increasing economic
imbalances as a result of Colombia's weakening external position.
Lower global commodity prices -- particular for oil -- have
reduced Colombia's export revenues, widening the country's current
account deficit. We estimate it at 6.6% of GDP in 2015 and to
narrow in 2016-2018. We don't expect foreign direct investment
(FDI) and portfolio equity to fully finance the wider deficit,
with higher levels of external debt covering the remainder during
2016 and 2017, resulting in current account imbalances. In our
view, these factors reflect a moderate vulnerability for the
economy, which prompted us to revise economic imbalances for
Colombian financial institutions to high from intermediate risk.
"We believe these factors are pressuring the domestic banking
system. Lending growth is moderating. However, its pace is still
faster than Colombia's real GDP growth, which is slowing down --
estimated at 2.9% in 2015, and a projected 2.6% in 2016 and 3.3%
in 2017, down from 4.5% in 2014. As a result of the current global
and domestic economic conditions, the Colombian peso plunged 20%
against the dollar in real terms during 2015 and the relatively
high inflation, which rose to 7.45% in January 2016, are
undermining households' income capacity. In this sense, we expect
higher risk -- in terms of economic imbalances -- could raise
credit risk in the economy, which could weaken banks'
asset quality metrics, particularly credit losses. The latter we
now estimate at about 2%, up our previous forecast of 1.5%. In our
view, the anemic conditions for oil-sector related entities and
those exposed to the weakening peso represent a risk to the
banking sector. However, their manageable exposure to these
entities is a mitigating factor.
"Our economic risk assessment of Colombia reflects its slowing
economy and a deterioration in the country's trade balance, which
is mainly due to the low prices of oil and coal. We believe that
Colombia's external debt and liability position will weaken
further amid reliance on higher debt financing during the
next two years to partly finance the widening current account
deficit. As a result, higher economic imbalances risks, in our
view, would pressure Colombian financial institutions. On the
other hand, low-income household levels, along with a potentially
rapid credit expansion, could raise credit risk in the economy.
Peso's depreciation, inflation, and the impact of low oil
prices on the domestic economy could further pressure household
income capacity. Given lower global commodity prices, we estimate
that Colombia's GDP growth slowed to 2.9% in 2015 and will likely
be 2.6% in 2016 and 3.3% in 2017, down from 4.5% in 2014. We
believe that slowing economy could act as a drag on domestic
credit growth. Overall, we expect total loans to grow 13%-14%
in 2016 and about 15% by the end of 2017, compared with the
compound annual growth rate of 20% for the past six years."
Moderate risk appetite in the Colombian banking sector supports
S&P's industry risk assessment. In S&P's view, there are no major
distortions in the domestic financial system. Core deposits have
proven stable even during periods of market turmoil; however,
credit is expanding at a faster pace than total deposits in the
system, and the share of retail deposits as a percentage of
total deposits remains low. The latter could increase risks to the
system because of greater dependence on wholesale funding sources,
which S&P considers less stable during times of economic and
market distress. Moreover, despite recent regulatory changes to
strengthen the system's capitalization, S&P still believe there is
room for improvement in Colombia's regulatory framework and track
record. However, transparency in Colombia's financial system is,
in general, greater than those of its regional peers.
The trend in the economic risk remains stable. This is because the
negative outlook on Colombia reflects risks that its external
position could deteriorate further. S&P said, "However, we
consider that our economic risk assessment already reflects a
moderate vulnerability in terms of current account imbalances,
which influence financial institutions. In addition, we consider
Colombia's economic resilience (income levels, growth prospects,
and economic diversity) should remain stable during the next 12
months. The higher economic risk score in Colombia's BICRA already
captures a potential deterioration in credit risk, as a result of
the increasing economic imbalances."
The trend in the industry risk remains negative, mainly due to
financial institutions' rising dependence on domestic wholesale
funding sources. Although we expect credit growth to moderate this
year, deposits in the system will likely grow at an even slower
pace. This, along with the relatively low share of retail deposits
in the banking industry, could make Colombian banks
more vulnerable to external shocks that could squeeze wholesale
funding markets. The consistent development of domestic capital
markets, which are currently an alternative funding source for
financial institutions, would mitigate the funding risk as long as
they become moderately broader and deeper.
Higher economic risk has lowered the starting point (anchor) when
assigning a rating to a bank that operates in Colombia. Therefore,
S&P revised its anchor to 'bb+' from 'bbb-'. In addition, the
higher economic risk score, which calibrates the risk weights for
our risk-adjusted capital (RAC) framework, has
led to higher risk charges, and therefore, lower RAC ratios for
banks operating in Colombia.
Nevertheless, this risk doesn't affect the issuer credit ratings
on Bancolombia, BBogota, Davivienda, FDN and Findeter, reflecting
S&P assessments of their respective stand-alone credit profiles
(SACPs) and potential government support due to their systemic
importance or due to their government-related entity status (GRE).
S&P affirmed its ratings on Credivalores despite a lower BICRA
anchor for NBFIs. Based on its comparable rating analysis with
other NBFIs that S&P rates in the region, the rating agency
believe Credivalores' credit fundamentals will allow it to
navigate through the slowing economy. The firm's exposure to
payroll discount loans, which account for 60% of its total loans,
coupled with S&P's expectation of stable unemployment rate, will
keep its credit losses manageable for the next 12-18 months.
Therefore, given Credivalores' current business position,
its adequate and stable RAC levels, and S&P's expectation that
credit losses will remain manageable amid higher economic
imbalances in the financial system, S&P is adding a positive peer
adjustment to company's SACP.
The negative outlook on Bancolombia reflects that on the sovereign
ratings. S&P ratings on Bancolombia currently incorporate one
notch of government support, given the bank's high systemic
importance and its view of the government as being supportive
towards its financial system, which results in a moderately high
likelihood of extraordinary government support to the bank.
The combination of Bancolombia's 'bb+' SACP and a 'BBB+' local
currency rating on Colombia results in a 'BBB-' credit rating on
the bank, which is one notch higher than its SACP. Nonetheless, if
S&P were to downgrade the sovereign, it along with Bancolombia's
'bb+' SACP, would also result in the bank's
downgrade. Given the core status of Bancolombia Panama and
Banistmo to Bancolombia, their ratings will move in tandem with
those on the parent. Therefore, S&P also revised its outlooks on
these subsidiaries to negative from stable.
The 'bb+' anchor didn't weaken Bancolombia's SACP because it now
deducts one notch from S&P's weak assessment of the bank's capital
and earnings, compared with the two-notch deduction with an
earlier 'bbb-' anchor. Nonetheless, if the negative trend in the
industry risk materializes, and S&P were to lower the anchor to
'bb', Bancolombia's downgrade is possible.
The negative outlook on BBogota reflects that on Colombia. S&P has
revised downward the bank's SACP to 'bb+'. However, the latter
incorporates one notch of government support given the bank's
high' systemic importance, coupled with its view of the government
as supportive towards its financial system, which
results in a moderately high likelihood of extraordinary
government support to BBogota. The combination of its 'bb+' SACP
and Colombia's 'BBB+' local currency rating results in a 'BBB-'
credit rating on the bank. Nonetheless, if S&P was to downgrade
the sovereign, it along with a 'bb+' SACP would also result in the
bank's downgrade. Given the core status of BIB and Credomatic,
their ratings will move in tandem with those on B Bogota.
Therefore, S&P also revised its outlooks on these subsidiaries to
negative from stable.
The negative outlook on Davivienda reflects that on the sovereign.
If the negative trend in the industry risk materializes, and S&P
were to lower the anchor further to 'bb' and lower its local
currency ratings on Colombia, a downgrade of Davivienda will
follow. This is because the combination of its
'bb+' SACP and a 'BBB' local currency sovereign rating, which
doesn't add any notches to the bank's SACP.
The lower 'bb+' anchor didn't weaken Daviviendas' SACP, because
there was no deduction for S&P's assessment of the bank's moderate
capital and earnings, compared with the one-notch deduction with
the previous ' bbb-'.
The negative outlook on FDN reflects that on the sovereign. S&P's
ratings on FDN currently incorporate four notches of support from
its GRE status, which in turn is due to an extremely high
likelihood of government support given the bank's critical role
and very strong link to the government. The combination of FDN's
'bb-' SACP and 'BBB+' local currency sovereign rating results in a
'BBB' credit rating on the bank, a four-notch uplift from the
SACP. However, if S&P was to downgrade the sovereign, it along
with the bank's 'bb-' SACP would result in FDN's downgrade.
The negative outlook on Findeter reflects that on the sovereign.
S&P ratings on Findeter incorporate one notch of support from its
GRE status, which results in a very high likelihood of support
given the company's very important role and very strong link to
the government. The combination of its 'bbb-' SACP and 'BBB+'
local currency sovereign rating results in a 'BBB' credit rating
on Findeter, one-notch uplift from the SACP. However, if the
negative trend in the industry risk materializes, S&P would lower
the anchor to 'bb', which in turn would weaken Findeter's SACP due
to the lower anchor and higher risk weights. In this sense, if S&P
was to downgrade the sovereign, it along with a lower SACP would
result in Findeter's downgrade.
The stable outlook on nonbank financial institution,
Creditvalores, reflects that its anchor would remain unchanged at
'b+' if the negative trend in the industry risk materializes,
which would trigger a lower anchor for banks. In this sense,
Credivalores' ICR would remain unchanged. Moreover, S&P expects
the firm will maintain a RAC ratio of 7.1% for the next 12-18
months, even amid higher risk weight assets, stemming from higher
economic risk score in Colombia BICRA, manageable asset quality
indicators, and a concentrated funding structure with relatively
good financial flexibility.
BICRA SCORE SNAPSHOT
Colombia To From
BICRA Group 6 5
Economic risk 7 6
Economic resilience High Risk High Risk
Economic imbalances High Risk Intermediate Risk
Credit risk in the economy High Risk High Risk
Industry risk 5 5
Institutional framework High Risk High Risk
Competitive dynamics Intermediate Risk Intermediate Risk
System-wide funding Intermediate Risk Intermediate Risk
Trends
Economic risk trend Stable Stable
Industry risk trend Negative Negative
* BICRA economic risk and industry risk scores are on a scale
from '1' (lowest risk) to '10' (highest risk).
RATINGS LIST
Ratings Affirmed; Outlook Action
To From
Bancolombia, S. A. y Companias Subordinadas
Banistmo S.A.
Bancolombia Panama S.A.
Counterparty Credit Rating BBB-/Neg/A-3 BBB-/Stable/A-3
Banco de Bogota S.A. y Subsidiarias
Senior Unsecured BBB-
Banco de Bogota S.A. y Subsidiarias
Credomatic International Corp.
BAC International Bank Inc.
Counterparty Credit Rating BBB-/Neg/A-3 BBB-/Stable/A-3
Banco Davivienda S.A.
Counterparty Credit Rating BBB-/Negative/A-3 BBB-
/Stable/A-3
Senior Unsecured BBB-
Financiera de Desarrollo Nacional S.A.
Counterparty Credit Rating BBB/Neg/-- BBB/Stable/--
Financiera de Desarrollo Territorial S.A. FINDETER
Counterparty Credit Rating BBB/Negative/A-2
BBB/Stable/A-2
Senior Unsecured BBB
Credivalores - Crediservicios SAS
Counterparty Credit Rating B+/Stable/B
===============
H O N D U R A S
===============
* HONDURAS: IMF Says Economy Grew 3.6% in 2015
----------------------------------------------
An International Monetary Fund (IMF) mission led by Roberto
Garcia-Saltos visited Tegucigalpa during February 15-19 to review
economic developments and authorities' implementation of their
Fund-supported program during 2015. At the conclusion of the visit
Mr. Garcia-Saltos issued the following statement:
"The mission is encouraged by the continued strengthening of the
Honduran economy. Economy is projected to have grown at 3.6
percent in 2015, better than anticipated. This performance was
driven by a recovery in U.S. growth, improved terms of trade, and
strong remittances inflows, which helped Honduras sustain growth
in consumption and investment with strong growth in infrastructure
spending.
At the same time lower international fuel prices have pushed
headline inflation to 2.4 percent by end-year, much lower than the
central bank inflation target of 4.7 percent.
These factors have also supported a US$307 million increase in Net
International Reserves to US$2,783 million at end 2015 slightly
above the program target with gross reserves reaching 4.6 months
of imports. Fiscal performance is also expected to have evolved
better than programmed. Based on preliminary information, the
fiscal position seems to have strengthened because of stronger
revenue collection, mainly higher Value Added Taxation and income
tax, and expenditure control, including the wage bill."
"The 2016 outlook for the Honduran economy remains positive amid
tighter global financial conditions. Real GDP growth is expected
at about 3.5 percent and end-year inflation at 4 percent. Most of
the structural reforms are moving forward. Tax administration is
being strengthened, contributing to solid revenue growth and
improved fiscal accounts. Building upon the medium-term fiscal
framework introduced last year, the mission is encouraged by
authorities' commitment to maintain the course towards fiscal
sustainability. In that sense, the mission welcomes the submission
to congress of a fiscal responsibility legislation aimed to
institutionalize fiscal discipline, which given the broad support
for macroeconomic stability is expected to be approved soon. With
regards, to the electricity sector, the mission encourages the
authorities to ensure strong implementation of the plan to reduce
electricity distribution losses, which have remained essentially
unchanged from their 2014 level.
"The staff team met with Jorge Ramon Hernandez-Alcerro, Minister
Coordinator of the Presidency, Head of the Economic Cabinet and
Minister of Finance Wilfredo Cerrato, Central Bank Governor Manuel
Bautista, Minister Director of the Tax Agency Miriam Guzman,
President of the National Commission of Banking and Insurance
Ethel Deras, Minister of Infrastructure and Public Services
Roberto Ordonez, Vice Minister of Public Credit and Investment
Rocio Tabora and other senior government officials.
"The mission would like to thank the authorities for a fruitful
and cordial dialogue, as well as for their excellent cooperation."
=============
J A M A I C A
=============
JAMAICA: To Remain Active in Domestic Capital Market
----------------------------------------------------
RJR News reports that the Jamaican Government has declared that it
will maintain a presence in the domestic capital market in the
next fiscal year, to ensure the development of both primary and
secondary markets.
The assurance came on the heels of the recent repayment of NDX
bonds and subsequent issuing of new bonds on the domestic market
for the first time in three years, according to RJR News.
After repaying more than $60 billion in NDX bonds, the Government
re-entered the bond market and borrowed $15 billion, the report
notes.
The money borrowed is to be repaid in 2018, 2022 and 2046, the
report adds.
* * *
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
=======
CAMPOSOL S.A.: S&P Lowers CCR to 'CCC' on Liquidity Concerns
------------------------------------------------------------
Peru-based fresh produce company Camposol S.A. faces a significant
debt maturity related to its senior unsecured notes due Feb. 2,
2017, which has increased liquidity and refinancing concerns.
Standard & Poor's Ratings Services said it lowered its corporate
credit rating on Camposol S.A. to 'CCC' from 'B-'. At the same
time, S&P lowered its issue-level rating on the company's $200
million senior unsecured notes to 'CCC' from 'B-', S&P said. The
outlook is negative.
The two-notch downgrade on Camposol reflects the increased
likelihood that the company could default within the next 12
months without an unforeseen positive development that could
mitigate the company's refinancing risk, given the significant
debt maturities related to its $200 million senior unsecured notes
due in February 2017.
As indicated in S&P's previous report dated Nov. 18, 2015, the
ratings on Camposol would be lowered within three months by at
least one notch if the company did not successfully refinance its
$200 million senior unsecured notes at least 12 months before its
final maturity date.
S&P's assessment of its weak liquidity also incorporates its view
that Camposol would have limited access to domestic and
international debt capital markets to raise fresh cash that would
allow for a timely repayment to existing bondholders. In addition,
S&P considers that bank's financing could also be constrained,
given the amount the company could seek to refinance.
The negative outlook reflects S&P's view that Camposol could be
highly vulnerable to nonpayment over the next few months and the
potential that the company could pursue a debt exchange or similar
transaction that it would view as distressed. S&P could lower the
ratings within the next 6 months amid greater refinancing and
liquidity concerns, or following the announcement of a transaction
that S&P deems distressed, including one in which bondholders and
creditors receive less than what was promised under the original
securities.
Although unlikely in the next 12 months, a positive rating action
could take place if Camposol addresses upcoming debt maturities
through a refinancing transaction, reducing the likelihood of a
potential default.
HOCHSCHILD MINING: Moody's Cuts Corporate Family Rating to B2
-------------------------------------------------------------
Moody's Investors Service ("Moody's") has taken rating actions on
three Peruvian mining companies and their respective debt
issuances. These actions reflect Moody's perception of increased
credit risk for the mining sector, and also an effort to align
ratings with the fundamental shift in the credit conditions of the
global mining sector. These rating actions conclude the review
initiated on January 21, 2016.
The rating actions on the Peruvian mining companies incorporate a
deep deterioration in credit conditions for the global mining
industry, with prices continuing to decline. Moody's believes that
this downturn will be deeper and longer, and represent an
unprecedented shift for the mining industry. China's slowing
economic growth brings additional market imbalances and requires
further adjustments in the industry, including in supply levels.
In addition, the strong US dollar is a further factor contributing
to weakening demand and driving prices lower since most metals are
traded in dollARS. Deteriorating industry fundamentals require a
recalibration of the global mining portfolio rated by Moody's.
Covered in this press release are the following issuers, with
their respective rating changes:
-- Issuer: Hochschild Mining plc
-- Corporate Family Rating, downgraded to B2 from Ba3
-- Issuer: Compania Minera Ares S.A.C.
-- Senior Unsecured Regular Bond/Debenture, downgraded to B2 from
Ba3
-- Issuer: Minsur S.A.
-- Corporate Family Rating, downgraded to Ba3 from Ba1
-- Senior Unsecured Regular Bond/Debenture, downgraded to Ba3
from Ba1
-- Issuer: Volcan Compania Minera S.A.A. y Subsidiarias
-- Corporate Family Rating, downgraded to B2 from Ba1
-- Senior Unsecured Regular Bond/Debenture, downgraded to B2 from
Ba1
Outlook Actions:
-- Issuer: Hochschild Mining plc
-- Outlook, Changed To Stable From Rating Under Review
-- Issuer: Compania Minera Ares S.A.C.
-- Outlook, Changed To Stable From Rating Under Review
-- Issuer: Minsur S.A.
-- Outlook, Changed To Negative From Rating Under Review
-- Issuer: Volcan Compania Minera S.A.A. y Subsidiarias
-- Outlook, Changed To Stable From Rating Under Review
RATINGS RATIONALE
Hochschild's downgrade to B2 reflects the deterioration in the
company's credit metrics through 2015 as a result of weak
commodity prices (namely silver and gold), and consequent
diminished cash generation ability. Despite the operational
improvement brought in by Inmaculada since 2H15, revenues remain
challenged by lower metals prices. This is reflected in lower
margins and weaker debt protection metrics compared to historical
levels observed prior to 2014. The ratings continue to reflect the
company's competitive cost position, conservative financial
policies and enhanced business profile after the conclusion of
Inmaculada in mid-2015. The action does incorporate the USD 100
million equity rights issue completed in 4Q15 and consequent
reduction in debt after that. The stable outlook reflects our
expectation that Hochschild will benefit from the low-cost
Inmaculada production, limit capex at sustaining levels and
maintain adequate liquidity to service its financial obligations.
Still, based on our price sensitivity ranges for silver and gold,
we see EBIT margins in the 5% range through 2016 and interest
coverage (measured by EBIT to interest expense) below 1x. Besides,
a prolonged period of lower metals prices can bring further
downside risk to the ratings. Constraining the company's ratings
are its limited size, concentration in two precious metals (65%
silver and 35% gold in terms of revenues as of LTM June 2015) and
susceptibility to the volatility of its prices. The B2 senior
unsecured rating for Compania Minera Ares reflect the fully and
unconditional guarantee by Hochschild plc and its mains
subsidiaries.
The downgrade of Minsur to Ba3 with a negative outlook reflects
the deterioration in market fundamentals for tin (73% of total
revenues in the LTM ended September 2015) without prospects of a
rapid recovery, and the consequent pressure in the company's
credit metrics, and diminishing its ability to generate revenues
and cash flow from its current operations and to continue to
invest for growth and diversification. Expansion projects underway
(in San Rafael and Mina Justa) will begin operations and start to
contribute to cash flows only from 2018 onwards. Although we
recognize that Minsur has undertaken a number of measures to
respond to deteriorating market conditions, the ability to
continue to make further adjustments becomes more challenging.
Minsur's Ba3 rating is supported by its competitive position as
the third largest tin producer worldwide. The company's strong
liquidity position, with cash and equivalents of USD 576 million (
at the end of December 2015) covering the entirety of its debt, is
also a credit positive. The company's low-cost is largely due to
its ownership of the world-class San Rafael mine, the world's
largest tin-producing mine. The negative outlook is based on our
view that tin will continue to be pressured by weakening global
macroeconomic growth, especially in China, and, despite Minsur's
low cash costs, this will continue to pressure revenues and
diminish the company's ability to generate cash flow from its
current operations.
The downgrade of Volcan's ratings to B2 with a stable outlook
reflects the pressure in the company's credit metrics from
deteriorating market conditions, and the low likelihood that cash
flows, revenues and interest coverage metrics will improve in the
next 12 to 18 months to levels commensurate with a Ba credit.
Despite the operational improvement observed particularly in 4Q15,
financial results have weakened as a consequence of lower metals
price, reducing the company's cash generation ability and
increasing liquidity risk. Volcan's B2 senior unsecured ratings
continue to reflect its good mine diversity, its cost position,
its operational diversity in terms of number of metals produced,
mines, complexes and concentrators and the company's position a s
a leading producer of zinc, silver and lead globally.
RATING TRIGGERS
Hochschild: an upward rating movement would require an improvement
in operating results, with adjusted EBIT margins consistently
sustained above 5%, as well as solid liquidity position and
interest coverage (measured by EBIT to interest expense)
consistently above 2x. To the extent that the company is able to
enhance its overall scale and reserves, the outlook or rating
could be positively impacted. Hochschild's ratings could be
downgraded if profitability and cash generation capacity
materially deteriorates. Specifically, if EBIT margin falls and is
sustained below 3.5% with negative free cash flow on a sustained
basis, ratings could come under downward pressure. Negative
pressure could also result from a marked deterioration in the
company's liquidity position and increase in leverage such that
adjusted leverage remains above 5x for an extended period.
Minsur: a near-term upward rating movement is unlikely. An upward
rating or outlook movement would require an improvement in size
such as that revenues return to levels observed in the past, and
the company is able to maintain its competitive cost position.
Besides, to the extent that the company is able to achieve and
maintain interest coverage (measured by EBIT to interest expense)
above 3.5x the outlook or ratings could be positively impacted.
Ratings could be negatively impacted if EBIT margin falls below
5%, and cash generation is negative on a sustained basis. Negative
pressure could also result from increase in debt levels leading to
adjusted Total Debt to EBITDA above 4x, without prospects to
return to lower levels in the medium term, and interest coverage
(measured by EBIT to interest expense) below 2.5x on a consistent
basis
Volcan: a near-term upward rating movement is unlikely, given the
magnitude of the market downturn, and would require Volcan to
improve liquidity cushion and interest coverage metrics to levels
of at least 2x on a sustained basis. Ratings could be negatively
impacted if profitability and cash flow from operations materially
weaken. A marked deterioration in the company's liquidity position
could also precipitate a downgrade. Specifically, if EBIT margin
falls below 3.5%, with negative free cash flow, ratings could be
downgraded. Negative pressure could also result from increase in
debt levels leading to Total Debt to EBITDA above 5x on a
sustained basis.
Hochschild Mining PLC ("Hochschild"), headquartered in Lima, Peru,
is primarily a producer and seller of gold and silver, mined from
its four core underground mines, with three located in southern
Peru and one in southern Argentina. For the last twelve months
ended June 30, 2015, Hochschild reported consolidated revenues of
USD 401 million.
Headquartered in Lima, Peru, Minsur S.A. ("Minsur") is a 99.99%
owned subsidiary of Peruvian conglomerate Inversiones Breca S.A.
(not rated). The company is primarily a producer and seller of
tin, mined from its San Rafael mine, located in the Puno region of
Peru. Through its subsidiaries, Minsur has other mining assets in
Peru and Brazil, producing tin and gold, as well as niobium and
tantalum, as byproducts. The company also has a 73.9% ownership
stake in Inversiones Cordillera del Sur, which owns Cementos
Melon, a cement producer located in Chile. Minsur's mining
operations reported consolidated revenues of USD 533 million in
the LTM ended in September 2015 -- and USD 487 million
(unconsolidated) in FY 2015.
Volcan is a Peruvian mining company with mining, concentrating and
commercial operations. It primarily produces zinc and lead
concentrate and some copper concentrate. These concentrates have a
high silver content. The company operates through four operational
complexes with a total of 10 mines and 7 concentrate plants. All
of Volcan's operations are located in Peru (A3 stable). For the
twelve months ended December 2015 it had revenues of USD 795
million.
================================
T R I N I D A D & T O B A G O
================================
TRINIDAD & TOBAGO: TTADA Protests on Delay of License Issuance
----------------------------------------------------------------
Trinidad Express reports that the Trinidad and Tobago Automotive
Dealers' Association (TTADA) protested outside the Ministry of
Trade at Nicholas Tower, Port of Spain, claiming that the Ministry
is delaying the issuing of licenses to dealers.
The association wants Trade Minister Paula Gopee-Scoon to rescind
the recent decision, where the age limit of imported foreign-used
cars was changed from six years to four years, according to
Trinidad Express.
Association President Visham Babwah said there were two main
reasons for the protest, the report notes.
Mr. Babwah said the ministry was yet to issue licenses for
vehicles which were already purchased in Japan and waiting to be
shipped, the report adds.
=================
X X X X X X X X X
=================
* BOND PRICING: For the Week From Feb. 15 to Feb. 19, 2016
----------------------------------------------------------
Issuer Name Cpn Bid Price Maturity Date Country Curr
----------- --- --------- ------------- ------- ----
PDVSA 8.5 56.25 11/2/2017 VE USD
PDVSA 12.75 53.5 2/17/2022 VE USD
Kaisa Group
Holdings Ltd 8.87 65.5 3/19/2018 CN USD
Venezuela 12.75 52.5 8/23/2022 VE USD
PDVSA 5.25 47.5 4/12/2017 VE USD
PDVSA 5.37 34.65 4/12/2027 VE USD
PDVSA 6 6.5 11/15/2026 VE USD
Venezuela 5.75 61.5 2/26/2016 VE USD
PDVSA 9.75 46 5/17/2035 VE USD
Venezuela 11.95 49 8/5/2031 VE USD
PDVSA 6 37.5 5/16/2024 VE USD
Kaisa Group
Holdings Ltd 9 82 6/6/2019 CN USD
PDVSA 9 43.5 11/17/2021 VE USD
PDVSA 5.5 36.9 4/12/2037 VE USD
Venezuela 13.62 56 8/15/2018 VE USD
Kaisa Group
Holdings Ltd 10.25 69 1/8/2020 CN USD
Kaisa Group
Holdings Ltd 12.87 108 9/18/2017 CN USD
Odebrecht Oil
& Gas Finance
Ltd 7 68 KY USD
CSN Islands
XII Corp 7 74.5 BR USD
Venezuela 8.25 44 10/13/2024 VE USD
Honghua Group
Ltd 7.45 58.5 9/25/2019 CN USD
PDVSA 5.12 53.48 10/28/2016 VE USD
Venezuela 7.75 42.5 10/13/2019 VE USD
Banco do Brasil
SA/Cayman 6.25 75 KY USD
Venezuela 7 44.5 12/1/2018 VE USD
Venezuela 9 44.5 5/7/2023 VE USD
Kaisa Group
Holdings Ltd 6.87 74.423 4/22/2016 CN CNY
Venezuela 9.37 44.5 1/13/2034 VE USD
Venezuela 6 39 12/9/2020 VE USD
Venezuela 7 40.5 3/31/2038 VE USD
CA La
Electricidad
de Caracas 8.5 40 4/10/2018 VE USD
Venezuela 9.25 44.5 5/7/2028 VE USD
Offshore Group
Investment Ltd 7.5 74.87 11/1/2019 KY USD
Venezuela 7.65 35.5 4/21/2025 VE USD
Automotores
Gildemeister SA 8.25 45.87 5/24/2021 CL USD
Kaisa Group
Holdings Ltd 8 70 12/20/2015 CN CNY
Venezuela 13.625 48 8/15/2018 VE USD
Agile Property
Holdings Ltd 8.25 75.05 CN USD
McDermott
International
Inc 8 70.5 5/1/2021 US USD
USJ Acucar e
Alcool SA 9.875 73 11/9/2019 BR USD
Tonon
Bioenergia SA 9.25 62.3 1/24/2020 BR USD
Offshore Group
Investment Ltd 7.125 68.06 4/1/2023 KY USD
Automotores
Gildemeister SA 6.75 44.75 1/15/2023 CL USD
SMU SA 7.75 76.5 2/8/2020 CL USD
Mongolian
Mining Corp 8.87 66.5 3/29/2017 MN USD
Polarcus Ltd 8 40.08 6/7/2018 AE USD
PSOS Finance
Ltd 11.75 75 4/23/2018 KY USD
PDVSA 8.5 57.45 11/2/2017 VE USD
Herbalife Ltd 2 73.7 8/15/2019 US USD
Cia Energetica
de Sao Paulo 9.75 72.87 1/15/2015 BR BRL
BA-CA Finance
Cayman Ltd 1.21 63.249 KY EUR
Hidili Industry
International
Development Ltd 8.625 76 11/4/2015 CN USD
China Precious
Metal Resources
Holdings Co Ltd 7.25 52.067 2/4/2018 HK HKD
Inversora de
Electrica de
Buenos Aires SA 6.5 28.5 9/26/2017 AR USD
NQ Mobile Inc 4 70.448 10/15/2018 CN USD
Glorious Property
Holdings Ltd 13.25 71.971 3/4/2018 HK USD
Kaisa Group
Holdings Ltd 8.875 93.5 3/19/2018 CN USD
PDVSA 6 37.63 11/15/2026 VE USD
PDVSA 12.75 51.83 2/17/2022 VE USD
Polarcus Ltd 8.9 39.854 7/8/2019 AE NOK
Polarcus Ltd 2.87 68.7 4/27/2016 AE USD
Empresa
Distribuidora
Y Comercializadora
Norte 9.75 72.42 10/25/2022 AR USD
PDVSA 6 39.65 5/16/2024 VE USD
Argentina Bond 1.18 8.12 12/31/2038 AR ARS
Venezuela Bond 13.625 50.941 8/15/2018 VE USD
McDermott
International Inc 8 84.5 5/1/2021 US USD
Tonon
Bioenergia SA 9.25 71 1/24/2020 BR USD
Argentina
Bonar Bonds 23.00 5.5 9/10/2015 AR ARS
BCP Finance Co 2.15 61.25 KY EUR
Newland
International
Properties Corp 9.5 32 7/3/2017 PA USD
BA-CA Finance
Cayman 2 Ltd 2.03 62.31 KY EUR
Odebrecht Oil
& Gas Finance
Ltd 7 69 KY USD
PDVSA 9 44 11/17/2021 VE USD
Honghua Group
Ltd 7.45 58.5 9/25/2019 CN USD
Argentine Bonad
Bonds 2.4 68 3/18/2018 AR USD
Automotores
Gildemeister SA 8.25 60 5/24/2021 CL USD
PDVSA 9.75 43 5/17/2035 VE USD
Automotores
Gildemeister SA 6.75 59.5 1/15/2023 CL USD
ESFG
International
Ltd 5.753 0.68 KY EUR
Greenfields
Petroleum Corp 9 20 5/31/2017 US CAD
USJ Acucar e
Alcool SA 9.87 73 11/9/2019 BR USD
CSN Islands
XII Corp 7 73.99 BR USD
SMU SA 7.75 75.25 2/8/2020 CL USD
Mongolian
Mining Corp 8.875 66.5 3/29/2017 MN USD
Banco do Brasil
SA/Cayman 6.25 74 KY USD
Argentina Bocon 2 42.288 1/3/2016 AR ARS
Venezuela
TICC Bond 6.25 73.195 4/6/2017 VE USD
Hidili Industry
International
Development Ltd 8.625 75 11/4/2015 CN USD
Cia Energetica
de Sao Paulo 9.75 72.87 1/15/2015 BR BRL
Venezuela TICC
Bond 5.25 52.627 3/21/2019 VE USD
Newland
International
Properties Corp 9.5 47 7/3/2017 PA USD
Empresa
Distribuidora
Y Comercializadora
Norte 9.75 72 10/25/2022 AR USD
Banif Finance
Ltd 1.449 KY EUR
BPI
Capital
Finance Ltd 2.63 39.5 KY EUR
Cia Cervecerias
Unidas SA 4 51.90 12/1/2024 CL CLP
Banco BPI
SA/Cayman Islands 4.15 71.37 11/14/2035 KY EUR
Argentina Bond 5.83 14 12/31/2033 AR ARS
Cia Sud
Americana
de Vapores SA 6.4 58.45 10/1/2022 CL CLP
Venezuela TICC
Bond 9.12 74.29 9/15/2017 VE USD
Venezuela Bond 9.25 48 9/15/2027 VE USD
Ruta del Bosque
Sociedad
Concesionaria SA 6.3 69.2 3/15/2021 CL CLP
Talca Chillan
Sociedad
Concesionaria SA 2.75 47.78 12/15/2019 CL CLP
Venezuela Bond 11.75 50.5 10/21/2026 VE USD
Provincia
de Rio Negro 1.6716 72 5/4/2024 AR ARS
Provincia
Corrientes 0.0204 8 1/1/2016 AR ARS
Provincia del
Chaco 4 61.25 12/4/2026 AR USD
Decimo Primer
Fideicomiso de
Bonos de
Prestamos
Hipotecar 4.54 59 10/25/2041 PA USD
Decimo Primer
Fideicomiso de
Bonos de
Prestamos
Hipotecar 6 70.8 10/25/2041 PA USD
Empresa de los
Ferrocarriles
del Estado 6.5 69.91 1/1/2026 CL CLP
***********
Monday's edition of the TCR-LA delivers a list of indicative
prices for bond issues that reportedly trade well below par.
Prices are obtained by TCR-LA editors from a variety of outside
sources during the prior week we think are reliable. Those
sources may not, however, be complete or accurate. The Monday
Bond Pricing table is compiled on the Friday prior to publication.
Prices reported are not intended to reflect actual trades. Prices
for actual trades are probably different. Our objective is to
share information, not make markets in publicly traded securities.
Nothing in the TCR-LA constitutes an offer or solicitation to buy
or sell any security of any kind. It is likely that some entity
affiliated with a TCR-LA editor holds some position in the
issuers' public debt and equity securities about which we report.
Tuesday's edition of the TCR-LA features a list of companies with
insolvent balance sheets obtained by our editors based on the
latest balance sheets publicly available a day prior to
publication. At first glance, this list may look like the
definitive compilation of stocks that are ideal to sell short.
Don't be fooled. Assets, for example, reported at historical cost
net of depreciation may understate the true value of a firm's
assets. A company may establish reserves on its balance sheet for
liabilities that may never materialize. The prices at which
equity securities trade in public market are determined by more
than a balance sheet solvency test.
Submissions about insolvency-related conferences are encouraged.
Send announcements to conferences@bankrupt.com
***********
S U B S C R I P T I O N I N F O R M A T I O N
Troubled Company Reporter-Latin America is a daily newsletter
co-published by Bankruptcy Creditors' Service, Inc., Fairless
Hills, Pennsylvania, USA, and Beard Group, Inc., Washington, D.C.,
USA, Marites O. Claro, Joy A. Agravante, Rousel Elaine T.
Fernandez, Valerie U. Pascual, Julie Anne L. Toledo, and Peter A.
Chapman, Editors.
Copyright 2016. All rights reserved. ISSN 1529-2746.
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