/raid1/www/Hosts/bankrupt/TCRLA

/raid1/www/Hosts/bankrupt/TCRLA_Public/160427.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 Wednesday, April 27, 2016, Vol. 17, No. 82 Headlines A N T I G U A & B A R B U D A STANFORD INTERNATIONAL: July 8 Settlement Approval Hearing Set A R G E N T I N A ARGENTINA: Bans on Bond Payments Dropped by U.S. Judge ARGENTINA: Moody's Takes Rating Actions on 129 Rated Bond Funds CMA CRECIMIENTO: Moody's Assigns B-bf GS Bond Fund Rating B R A Z I L BANCO BONSUCESSO: Moody's Affirms B2 Currency Deposit Rating BRAZIL: Analysts Expect Sharper GDP Decline SANTA CATARINA: S&P Affirms 'BB' ICR; Outlook Negative TRANSBRASIL SA: 11th Cir. Affirms Denial of Bid to Unseal Docs C A Y M A N I S L A N D S 47 DEGREES: Creditors' Proofs of Debt Due May 24 A & B FINANCE: Shareholder to Hear Wind-Up Report on May 31 ATLAS ASSET: Members' Final Meeting Set for May 3 CELLO LONG/SHORT: Shareholders' Final Meeting Set for May 17 EVO CAPITAL: Shareholders' Final Meeting Set for May 26 HARBORNE INVESTMENTS: Shareholders' Final Meeting Set for May 10 KYROS INVESTMENT: Creditors' Proofs of Debt Due May 25 LOCOMOTIVE 1 LEASING: Shareholder to Hear Wind-Up Report on May 31 SANDHURST LTD: Creditors' Proofs of Debt Due May 16 SMILE JAPAN: Shareholder to Hear Wind-Up Report on May 13 SUNRISE GLOBAL: Shareholders' Final Meeting Set for May 4 T1 T2 FINANCE: Shareholder to Hear Wind-Up Report on May 31 ZAIS INVESTMENT: Shareholders' Final Meeting Set for May 5 G U A T E M A L A BANCO DE LOS TRABAJADORES: Moody's Affirms Ba3 Rating; Outlook Neg J A M A I C A JAMAICA: Small, Medium Enterprises to Benefit From Loans, Grants JAMAICA: Companies Expect Inflation Decline in 2016 P U E R T O R I C O PUERTO RICO: Moving Closer to Deal With Some Bank Bondholders S U R I N A M E SURINAME: S&P Lowers Sovereign Credit Rating to 'B+' - - - - - =============================== A N T I G U A & B A R B U D A =============================== STANFORD INTERNATIONAL: July 8 Settlement Approval Hearing Set -------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION v. STANFORD INTERNATIONAL BANK, LTD., et al., Civil Action No. 3:09-CV-00298-N (N.D. Tex.) A FEDERAL COURT AUTHORIZED THIS NOTICE. THIS IS NOT A SOLICITATION FROM A LAWYER. To: Those who ever held a certificate of deposit, CD, depository account, or investment with, or who are parties in any action concerning, or who are interested in, Robert Allen Stanford, or any entity of any type owned or controlled by Robert Allen Stanford, including, without limitation, Stanford International Bank, Ltd., Stanford Trust Company Ltd., and Stanford Development Company There is a proposed global settlement ("Settlement") between Ralph S. Janvey, as Receiver for Robert Allen Stanford and related persons and entities (the "Receiver"), (ii) the Official Stanford Investors Committee, and (iii) Marcus A. Wide and Hugh Dickson as joint liquidators of Stanford International Bank, Ltd. and Stanford Trust Company Ltd., and Marcus A. Wide and Hordley Forbes as joint liquidators of Stanford Development Company (collectively, "Plaintiffs"), and (iv) Kroll, LLC (f/k/a Kroll Inc.) and Kroll Associates, Inc. (together, "Kroll") concerning Allen Stanford and all related persons and entities. This notice is only a summary of important information about the Settlement, the Bar Order and Judgment that will be entered if the Settlement is approved, and a Hearing on the Settlement. More details can be found at www.StanfordFinancialReceivership.com Settlement Amount: US$24,000,000 (the "Settlement Amount") to be paid to the Receiver. Distribution: The Receiver plans to distribute the Settlement Amount, minus court-approved attorneys fees, expenses, and costs, among those who held a certificate of deposit, CD, depository account, or investment with Stanford and who have an allowed claim amount recognized by the Receiver. Plaintiffs' counsel will apply to the Court for attorneys' fees of no more than US$6 million and expenses of no more than US$25,000. Bar Order and Judgment: The Settlement is conditioned upon the Court's entry of a Bar Order and Judgment permanently enjoining and barring all claims by Plaintiffs and anyone else in the world against Kroll concerning Robert Allen Stanford and any related persons or entities. Date for Court Hearing and Objections: On July 8 2016, at 10:00 a.m. the Honorable David C. Godbey in the United States District Court for the Northern District of Texas, United States Courthouse, 1100 Commerce Street, Dallas, Texas 75242, Courtroom 1505, will hold a Hearing to consider whether to approve the Settlement and enter the Bar Order and Judgment. You may object and attend the Hearing. The time for the Hearing is subject to change, so you should confirm the Hearing time by visiting the website www.StanfordFinancialReceivership.com before attending. Any and all objections to the Settlement or the Bar Order and Judgment must be filed with Court and served on or before May 18, 2016. Filing and service instructions may be found in the Court's Scheduling Order at www.StanfordFinancialReceivership.com BY ORDER OF THE COURT UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF TEXAS ================= A R G E N T I N A ================= ARGENTINA: Bans on Bond Payments Dropped by U.S. Judge ------------------------------------------------------ Jef Feeley and Bob Van Voris at Bloomberg News report that Argentina's officially back in the international credit markets. A judge overseeing lawsuits tied to Argentina's 2001 sovereign debt default dropped orders barring the nation from issuing bonds and sanctioning its return to the global debt markets after a 15- year absence. U.S. District Judge Thomas Griesa's order came after the world's eighth-largest country said it dropped a law barring payment to holdout creditors and paid bondholders who settled earlier this year, including a $2.3 billion deal with Paul Singer's Elliott Management Corp., according to Bloomberg News. The judge set those conditions for the orders to be dropped. Argentina now can go ahead with a planned $15 billion bond sale to pay off the holdout creditors from a 2001 default, Bloomberg News notes. "We had a mandate from the people of Argentina, which told us, we no longer want to be part of the previous framework, we want to be part of the world," Finance Minister Alfonso Prat-Gay said at an April 19 news conference, Bloomberg News relates. "We're entering a new phase, where Argentina can set sail, leaving the troubled waters behind and focusing on everything we'll be able to do to transition into a growing, orderly economy," Minister Prat-Gray added. Argentina's defaulted bonds due 2033, which trade with accrued interest, fell 0.8 cent to 126.9 cents on the dollar at 11:07 a.m. on April 22 in New York, after eight days of gains that brought the bond to a record high on April 21, Bloomberg News relays. Elliott and other hedge funds won the injunctions to block Argentina from paying on its restructured debt to try to force the nation to the negotiating table, Bloomberg News says. They triggered a new default in 2014 when Argentina refused to pay the hedge funds, Bloomberg News discloses. After the election of Argentine President Mauricio Macri in December, the county reopened talks with the hedge funds and settled, Bloomberg News notes. Macri's predecessor, Cristina Fernandez de Kirchner, had refused to negotiate and Argentina frequently defied the orders of U.S. judges, Bloomberg News adds. The case is NML Capital v. Republic of Argentina, 08-cv-06978, U.S. District Court, Southern District of New York (Manhattan). * * * On April 19, 2016, the Troubled Company Reporter-Latin America reported that Moody's Investors Service upgraded on April 15, 2016, Argentina's government bond rating to B3 from Caa1, with the outlook changed to stable from positive. The key drivers for the upgrade are (i) Moody's expectation that Argentina will settle holdout creditor claims which will result in a lifting of court injunctions and clear the way for Argentina to access international capital markets, as well as the likelihood that Argentina will make payments to restructured bondholders increased significantly following an April 13, US circuit court ruling in favor of Argentina, and (ii) the economic policy improvements since Mauricio Macri's administration took office last December. The new government lifted capital controls and allowed the peso to float more freely, reduced energy and transportation subsidies and has begun to address longstanding macroeconomic imbalances. As previously reported by the TCR-LA, Argentina defaulted on some of its debt late July 30, 2014, 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. On March 30, 2016, after more than 12 hours of debate in the Senate, Argentina's Congress passed a bill that will allow the government to repay holders of debt that the South American country defaulted on in 2001, including a group of litigating hedge funds that won judgments in a New York court. The bill passed by a vote of 54-16. On March 24, 2016, Fitch Ratings has upgraded Argentina's Long- term local-currency Issuer Default Rating (LT LC IDR) to 'B' from 'CCC', with a Stable Outlook. Fitch has affirmed Argentina's Long- term foreign-currency (FC) IDR at 'RD' and the short-term FC IDR at 'RD'. In addition, Fitch has upgraded the Country Ceiling to 'B' from 'CCC'. ARGENTINA: Moody's Takes Rating Actions on 129 Rated Bond Funds --------------------------------------------------------------- Moody's Latin America Agente de Calificacion de Riesgo has taken rating actions on all 129 of its rated bond funds in Argentina, following Moody's Investors Service's recently announced upgrade of the Argentine government's bond rating to B3/stable from Caa1/positive, and the concurrent raising of Argentina's long-term local currency and deposit ceilings to Ba3 from B1, on 15 April 2016. The global scale bond fund ratings of 29 bond funds were upgraded, and those of the remaining 100 funds were affirmed. The national scale bond fund ratings of 125 bond funds were placed under review, with 118 national scale ratings placed under review direction uncertain and seven national scale ratings placed under review for downgrade. Additionally, the national scale ratings of four bond funds were affirmed. RATINGS RATIONALE GLOBAL SCALE RATINGS The rating upgrades of 29 bond fund global scale ratings reflect the beneficial impact of the sovereign upgrade on the portfolios' maturity-adjusted weighted average credit quality. For the 100 bond funds whose national scale ratings were affirmed, the affirmation reflects the comparatively more modest impact the sovereign upgrade had on the credit profiles of these portfolios. NATIONAL SCALE RATINGS The national scale ratings (NSRs) of 118 bond funds are being placed under review direction uncertain pending a potential revision of the Argentina's NSR map. Following the recent upgrade of Argentina's sovereign rating and the increase of its local currency country ceiling to Ba3 from B1, the current mapping of global scale ratings to national scale ratings may no longer adequately serve one of its intended purposes, which is to provide greater credit differentiation among issuers in Argentina than is possible on the global rating scale. As a result, the lowest global scale rating that maps to Aaa.ar is likely to rise to Ba3 in line with the new country ceiling, and the new map is likely to associate lower NSRs with a given global scale rating than does the current map. Assuming the map is revised in line with current expectations, Moody's would anticipate that the large majority of NSRs being placed under review will be confirmed at their current levels when the reviews conclude, though a small number may be raised or lowered. For the four bond funds with Ba-bf/Aaa-bf.ar ratings, their NSRs were affirmed as it is unlikely that the new map will associate a Ba-bf global rating with a NSR lower than Aaa.ar. For with the seven bond funds with B-bf/Aaa.ar-bf ratings, their NSRs are being placed on review for downgrade, as it is likely that the new map will associate a B-bf global rating with a NSR of Aaa.ar-bf. For a detailed list of the affected bond fund ratings, please click on this link: http://www.moodys.com/viewresearchdoc.aspx?docid=PBC_189201 The principal methodology used in rating the funds were Moody's Revised Bond Fund Rating Methodology and Symbols, dated May 2013. CMA CRECIMIENTO: Moody's Assigns B-bf GS Bond Fund Rating --------------------------------------------------------- Moody's Latin America Agente de Calificacion de Riesgo has assigned bond fund ratings to CMA Crecimiento (the Fund), a new short-term bond fund managed by Capital Markets S.A.SGFCI. SA The ratings assigned are: -- Global scale bond fund rating: B-bf -- National scale bond fund rating: Aa-bf.ar (under review direction uncertain) RATINGS RATIONALE GLOBAL SCALE RATING The B-bf fund rating reflects Moody's expectation that the Fund will invest primarily in Lebacs (Tbills) denominated in local currency. Additionally, Moody's expects that the Fund's will invest its liquidity in sight deposits at local banks. The B-bf rating also incorporatesan expectation that if the current spread between Tbills and corporates widens, the Fund's investment strategy would shift to include more corporate bond investments. The rating agency noted that CMA Crecimiento FCI is a new fund with no prior track record, but it is managed by an experienced manager. Moody's analysis was performed on a model portfolio provided by the fund sponsor. The rating agency expects the Fund to be managed in line with the model portfolio. However, Moody's noted that if the Fund's invested portfolio deviates materially from the model portfolio, the Fund's ratings could be changed. "Based on the Fund's pro-forma portfolio, the Fund's credit quality profile is comparable to those of similarly rated peers", said Assistant Vice President - Analayst Carlos DeNevares. NATIONAL SCALE RATING The Aa-bf.ar rating under review direction uncertain reflects a potential revision of Argentina's national scale rating map. Following the recent upgrade of Argentina's sovereign ratings and the increase of its local currency country ceiling to Ba3 from B1, the current mapping of global scale ratings to national scalre ratings may no longer adequately serve one of its intended purposes, which is to provide greater credit differentiation among issuers in Argentina than is possible on the global rating scale. As a result, the lowest global scale ratings that maps to Aaa.ar is likely to rise to Ba3 in line with the new country ceiling, and the new map is likely to associate lower NSRs with a given global scale rating than does the current map. Assuming the map is revised in line with current expectations, we would anticipate that the large majority of NSRs being placed under review will be confirmed at their current levels when the reviews conclude, though a small number may be raised or lowered. Capital Markets S.A.S.G.F.C.I, is a middle size asset manager in the Argentinean mutual fund Industry with 0.54% of market share. As of March 2016, CMA S.A.SGFCI, managed approximately AR$1,112.9 million in assets under management. =========== B R A Z I L =========== BANCO BONSUCESSO: Moody's Affirms B2 Currency Deposit Rating ------------------------------------------------------------ Moody's Investors Service affirmed all ratings assigned to Banco Bonsucesso S.A. (Bonsucesso), including the global local and foreign currency long and short-term deposit ratings of B2 and Not-Prime, as well as the long-term foreign currency subordinated debt rating of B3, and the Brazilian national scale long- and short-term deposit ratings of Ba1.br and BR-4. At the same time, Moody's also affirmed Bonsucesso's baseline credit assessment (BCA) of b2, and long and short-term counterparty risk assessments of B1(cr) and Not Prime(cr). The outlook on all ratings remains stable. These ratings and assessments of Banco Bonsucesso S.A. were affirmed: -- Long-term global local currency deposit rating of B2, stable outlook -- Short-term global local currency deposit rating of Not-Prime -- Long-term foreign currency deposit rating of B2, stable outlook -- Short-term foreign currency deposit rating of Not-Prime -- Long-term Brazilian national scale deposit rating of Ba1.br -- Short-term Brazilian national scale deposit rating of BR-4 -- Baseline credit assessment of b2 -- Adjusted baseline credit assessment of b2 -- Long-term counterparty risk assessment of B1(cr) -- Short-term counterparty risk assessment of Not-Prime(cr) RATINGS RATIONALE The rating affirmation incorporates risks associated with Bonsucesso's success in repositioning its franchise following the conclusion of the transfer of its payroll lending operation to Banco Bonsucesso Consignado S.A. (BBC), a joint venture (JV) created with Banco Santander (Brasil) S.A., especially given the challenging macroeconomic environment in Brazil. In view of the weak economic conditions, the bank has also been steadily reducing its exposure to the sector of small and medium sized companies (SMEs). As a result of the overhaul of its business model, the bank's loan portfolio shrank by 74% in 2015, following a decline of approximately 30% over the two previous years. To offset lower revenues from lending operations with SMEs, Bonsucesso is now focused on increasing fee-based revenues, particularly foreign- exchange products and services, and is developing operation as an acquirer bank for credit card transactions. However, it faces a number of well-established competitors in these market segments. While the bank exhibited very strong return on assets in 2015, this was largely driven by non-recurring revenues. Currently, the banks only significant recurring revenue stream comes from dividends from the JV with Santander. Bonsucesso's ratings also incorporate the bank's weak asset quality, despite the bank's efforts to reduce loan delinquencies, which are related mostly to the SME portfolio now. As the payroll loans that were transferred to the joint-venture were of relatively high credit quality, Bonsucesso's problem loan ratio increased sharply in 2015. Consequently, nearly 8% of its loan book was delinquent more than 90 days as of December 2015, up from 6% a year earlier. A positive consequence of the bank's deleveraging was a sharp increase in capitalization and liquidity. Bonsucesso's ratio of tangible common equity (TCE) to risk weighted-assets, according to Moody's standard adjustments, went up to a robust 17.23%, from 12.71% in December 2014, while liquid assets now account for nearly 40% of tangible banking assets, more than double their level a year earlier. However, it is unlikely that capital and liquidity will remain at current levels as the bank's business model transition progresses. Moody's expects that management will seek to deploy capital and liquidity to support the development of a sustainable business model. WHAT COULD MAKE THE RATING GO UP While unlikely at this time given Brazil's challenging operating environment, Bonsucesso's ratings would face upward pressure if the bank successfully repositions its franchise and is able to demonstrate a meaningful and sustainable improvement in core profitability and asset quality. WHAT COULD MAKE THE RATING GO DOWN Ratings could be negatively affected if Bonsucesso is unable to successfully execute its strategy to establish itself in the market for foreign-exchange products and services, and consequently develop a meaningful new source of recurring earnings. The rating could also face downward pressure if asset quality deteriorates further. LAST RATING ACTION The last rating action on Bonsucesso occurred on June 12, 2015, when Moody's affirmed all debt and deposit ratings in the global and national scales, and baseline credit assessments (BCAs) of Bonsucesso and assigned a counterparty risk (CR) assessment to the bank. The outlook on all ratings was stable. METHODOLOGY USED The principal methodology used in these ratings was Banks published in January 2016. Moody's National Scale Credit Ratings (NSRs) are intended as relative measures of creditworthiness among debt issues and issuers within a country, enabling market participants to better differentiate relative risks. NSRs differ from Moody's global scale credit ratings in that they are not globally comparable with the full universe of Moody's rated entities, but only with NSRs for other rated debt issues and issuers within the same country. NSRs are designated by a ".nn" country modifier signifying the relevant country, as in ".za" for South Africa. Banco Bonsucesso S.A. is headquartered in Belo Horizonte, Brazil. As of Dec. 31, 2015, the bank had total assets of approximately BRL2.1 billion ($538 million) and equity of BRL473 million ($120 million). BRAZIL: Analysts Expect Sharper GDP Decline ------------------------------------------- Latin American Herald Tribune reports that private sector analysts expect Brazil's economy to contract by 3.88 percent this year, a sharper decline than in 2015, the Central Bank said. Analysts turned more pessimistic about Brazil's gross domestic product (GDP) in the past week, according to Latin American Herald Tribune. The GDP and inflation figures come from the Boletin Focus, a weekly Central Bank survey of analysts from about 100 private financial institutions on the state of the national economy, the report relays. The report notes that the latest negative revision brings to 14 the number of consecutive weeks in which analysts have projected sharper declines in GDP. If the forecasts turn out to be correct, Brazil's economy will contract for two years in a row for the first time since 1930, the report discloses. The worsening economic outlook for Brazil comes amid the political crisis surrounding President Dilma Rousseff, who could be impeached and removed from office, the report notes. The government reported last month that Brazil's economy contracted by 3.8 percent in 2015, marking the worst economic downturn in the past 25 years, the report adds. As reported in the Troubled Company Reporter-Latin America on March 29, 2016, severe contraction that was preceded by several years of below-trend growth has impaired Brazil's (Ba2 negative) underlying economic strength, despite the country's large and diversified economy, says Moody's Investors Service. The country's credit rating is also coming under pressure from the government's high level of mandatory spending. SANTA CATARINA: S&P Affirms 'BB' ICR; Outlook Negative ------------------------------------------------------ Standard & Poor's Ratings Services affirmed its global scale 'BB' long-term foreign and local currency issuer credit ratings on the State of Santa Catarina. S&P also affirmed its national scale 'brAA-' rating on the state. All ratings were removed from CreditWatch with negative implications. The outlook on all ratings is negative. RATIONALE The ratings on Santa Catarina mainly reflect its satisfactory financial management and strong budgetary performance, as well as its moderate debt burden and moderate contingent liabilities. Despite the adverse economic context for the state and the country, S&P expects its fiscal balances to improve gradually in the next two to three years as a result of recent consolidation measures. The state's weak economy, weak budgetary flexibility, and weak liquidity constrain the ratings. Furthermore, S&P considers the institutional framework for all Brazilian states to be evolving and unbalanced with a weakening trend. Concerns about the state's willingness to pay its debt to the federal government--after the state did not pay its February debt installment in a timely manner--triggered S&P's decision to place the ratings on CreditWatch with negative implications in March 2016. Since then, Santa Catarina has demonstrated its commitment to paying its future debt installments to the federal government regardless of the final outcome of the current negotiations with the ministry of finance and the final decision of the Supreme Court of Justice (STF, its Portuguese acronym). As a result, S&P removed the ratings from CreditWatch with negative implications. Santa Catarina has been leading the negotiations over the states' debt owed to the federal government with the ministry of finance (R$9 billion at year end 2015 in the case of Santa Catarina, or 43% of the state's total debt stock). At the same time, Santa Catarina initiated legal proceedings in the Supreme Court of Justice against the federal government, along with other states, in order to change the calculation of this debt. A final decision of the STF on the case's merit is expected shortly. The result of these negotiations and the outcome of the legal process are still very uncertain given the political context in Brazil. In the meantime, S&P would expect the state to continue meet its financial obligations in a timely manner. S&P is not including alternative scenarios (based on the results of the proceedings and negotiations) in S&P's projections at the moment. However, it is likely that they will have an impact on of Santa Catarina's credit profile--as well as those of other states--over the next two years. Beyond that, the state administration of Governor Raimundo Colombo from the Social Democratic Party, who is currently serving his second term, maintains prudent fiscal policies that aim to restrain operating spending. Recently, the state launched new measures to contain wage increases. In addition, some important changes were approved last year in order to reduce the pension system deficit. "We assess Santa Catarina's debt as moderate. Total debt reached R$21 billion as of December 2015, around 104% of operating revenues. We expect the debt burden to remain below 110% of operating revenues in the next two to three years--and to decline gradually to 103% in 2018--which is a lower ratio than some of its national peers (such as Sao Paulo and Minas Gerais) albeit relatively high by international standards. Considering the state's limited access to external and domestic liquidity, borrowings should pick up slowly in the next two to three years. The state's contingent liabilities are moderate; our analysis incorporates the impact from the cross-default clauses in Santa Catarina's government-related entities' (GREs) loan agreements with the Brazilian Development Bank (BNDES)," S&P said. The state economy had an estimated GDP per capita of $10,640 in 2015; a drop from 2014 as a consequence of the real depreciation and the economic recession (Santa Catarina's GDP suffered a 2.7% contraction). Its economy is weak by international standards but stronger than the national average. The State's economic activities are well-diversified and benefit from adequate public infrastructure. S&P expects the state of Santa Catarina's economy to remain sluggish in 2016-2017 and to start to recover in 2018. In S&P's opinion, the state's budgetary flexibility is weak. Santa Catarina's own-source revenue represents 74% of its operating revenues, below Sao Paulo and Minas Gerais. S&P considers that the state will have a limited capacity to increase its own source revenues over the next two to three years as the government is committed to not increasing tax rates; the government's ability to improve tax collection is restricted. As a result, S&P expects the state to continue generating around 73%- 74% of its operating revenues. Santa Catarina also presents limited flexibility in terms of expenses. Public-sector employee wages (including pensions) and interest payments represent the bulk of its expenditures. S&P expects a slow positive impact on spending from the measures taken on wages and pensions. Capital expenditures (capex) declined to 9.3% of total expenditures last year from 11.4% in 2014. S&P expects capex to remain around 8%-9% of total expenses over the next three years, slightly above its Brazilian peers, given its limited access to new borrowings. The state's budgetary performance is strong due to its ongoing operating surpluses and contained deficits after capex, expected to continue for the next two years. S&P's assessment reflects operating surpluses of about 7.6% for the past five years (2010- 2015) and deficits after capex of less than 5% of total revenues, despite a deterioration in finances since 2014 as a result of the weak domestic economy. S&P expects an operating surplus of 5.8% of operating revenues in 2016, slightly down from 6.3% in 2015, given the projected deceleration of the state's own revenues and federal transfer growth. S&P expects operating surpluses to continue increasing in 2017-2018, parallel with Brazil's gradual economic recovery. Its deficit after capex will be around 2.3% of total revenues in 2016 as Santa Catarina continues to reduce its capital spending. S&P expects deficits after capex to turn into a small surplus in 2018. Santa Catarina, similar to its domestic peers, operates in what S&P views as an evolving and unbalanced institutional framework in Brazil, with a weakening trend. The system that divides the fiscal powers between the central and the LRGs in Brazil is based on three key parameters that have remained in place for a long time and have gained strong political and economic support. If significant changes occur, S&P will reassess its opinion of Brazilian LRGs' credit quality. Liquidity S&P views the state's liquidity position as weak. Average cash reserves are likely to cover 60% of projected debt service for 2016 (R$887 million in interest and R$1,005 million in principal). S&P expects cash reserves to be slightly more restricted in 2016 compared to 2015. In addition, S&P assess Santa Catarina's access to external liquidity as limited. S&P considers that the state's access to external commercial debt is limited, considering Brazil's Banking Industry Country Risk Assessment (BICRA) group of '6'. S&P also incorporates the federal government's restrictions to new borrowing authorization in S&P's base-case scenario. If Santa Catarina obtains debt relief of its debt owed to the federal government, its annual debt service costs would be reduced, which could strengthen its liquidity position. However, S&P's base case scenario does not include this outcome at the moment because it is still very uncertain. OUTLOOK The negative outlook on Santa Catarina primarily reflects the outlook on Brazil as S&P do not believe that the state could be rated above the sovereign. Also, the negative outlook reflects a one-in-three likelihood that Santa Catarina's credit quality could deteriorate as a result of the weakening trend in the institutional framework. S&P could also take a negative rating action if Santa Catarina's operating surpluses are lower than 5% of operating revenues or if deficits after capex are larger than 5% of its total revenues. Finally, S&P could lower its ratings if Santa Catarina's own source revenues were to decline more than expected in the next 12-18 months. On the other hand, S&P could revise the outlook to stable to mirror a similar action on the sovereign. In accordance with S&P's 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. 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's assessment of the key rating factors is reflected in the Ratings Score Snapshot above. 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 Ratings Affirmed; CreditWatch/Outlook Action To From Santa Catarina (State of) Issuer Credit Rating Global Scale BB/Neg./-- BB/Watch Neg/-- Brazil National Scale brAA-/Neg./-- brAA-/Watch Neg/-- TRANSBRASIL SA: 11th Cir. Affirms Denial of Bid to Unseal Docs -------------------------------------------------------------- Plaintiffs/Appellants Marigrove, Inc., Cave Creek Holdings, Corp., and Cel-Air Incorporated appeal the district court's order affirming in part and reversing in part the bankruptcy court's order on their motion to unseal. The underlying action is a Chapter 15 bankruptcy action, an ancillary action to assist foreign insolvency proceedings. The documents at issue are a collection of motions and orders that enabled the trustee for the estate of Debtor Transbrasil S.A. Linhas Aereas to conduct confidential discovery into the allegedly misappropriated assets of the debtor. The bankruptcy court sealed the documents to prevent public dissemination of the Trustee's ongoing investigation. After learning that they were the objects of several discovery requests submitted to third parties under a "gag order," the Appellants appeared in the underlying action and moved to unseal the sealed documents arguing that the documents were sealed improperly. The bankruptcy court denied the Appellants' request that previously sealed documents be unsealed but granted the Appellants' request to the extent that any future documents would be sealed only upon separate order of the bankruptcy court. Although this case has a complicated procedural history, only one issue is before this Court: whether the bankruptcy court abused its discretion by declining to unseal the documents sealed prior to April 24, 2014. In a Decision dated March 3, 2016, which is available at http://is.gd/0txm2ofrom Leagle.com, the United States Court of Appeals for the Eleventh Circuit affirmed the decision of the bankruptcy court. The Eleventh Circuit found that there is no abuse of discretion in the bankruptcy court's decision to preserve the seal. The Eleventh Circuit held, "Under the Bankruptcy Code, any paper filed in a bankruptcy action is public record and open to examination. Some categories of information, however, are specifically excluded from the public record and must be protected by a bankruptcy court. At issue in this appeal is the statutory exclusion to "protect an entity with respect to a trade secret or confidential research, development, or commercial information." The Trustee argues that the documents should remain sealed because they reflect the Trustee's confidential research into the allegedly misappropriated assets of the debtor. The Appellants argue that the statutory exception for confidential research applies only to proprietary commercial confidential research." The Appellants also argue that the bankruptcy court failed to identify a compelling interest to seal the documents. The Eleventh Circuit found no support in the statute for the Appellants' interpretation. The appeals case is MARIGROVE, INC., CAVE CREEK HOLDINGS, CORP., CEL-AIR INCORPORATED, Plaintiffs-Appellants, v. GUSTAVO HENRIQUE SAUER DE ARRUDA PINTO, ALFREDO LUIZ KUGELMAS, Defendants- Appellees, No. 15-11596, Non-Argument Calendar (11th Cir.), relating to In re: TRANSBRASIL S.A. LINHAS AEREAS, Debtor. ABOUT TRANSBRASIL S.A. Transbrasil S.A. Linheas Areas filed a Chapter 15 petition (Bankr. S.D. Fla. Case No. 11-19484) in Miami, Florida, on April 7, 2011. Gustavo Henrique Sauer de Arruda Pinto, acting as co-judicial administrator or trustee for the bankruptcy estate of Transbrasil, signed the Chapter 15 petition. The trustee is asking the Miami court for entry of an order recognizing as a foreign main proceeding a bankruptcy action pending before the 19th Civil Court of Sao Paulo, Brazil. Prior to its bankruptcy, Transbrasil was one of the three largest airlines in Brazil during the 1980s and 1990s. It was incorporated on Jan. 5, 1955, under the name "Sadia S.A. Transportes Aereos," by Omar Fontana. Omar was a member of the Fontana family, owners of one of Brazil's largest business conglomerates, including its main company Sadia, a leading producer of frozen food and poultry in Brazil. While in operation, Transbrasil provided passenger jet air travel service to numerous airports within Brazil and to various international destinations, such as New York, Miami, Orlando, Buenos Aires, Washington, Amsterdam and London. On Oct. 20, 1981, Transbrasil formed a wholly-owned subsidiary, Transbrasil Airlines, Inc., which was incorporated and based in Florida. TAI was a major part of Transbrasil's business, as it handled U.S.-based operations and through it the airplane accessories and parts for Transbrasil's planes were acquired. In 1998, Omar Fontana became ill. As a result, control of Transbrasil was transferred to others. Omar, once one of the wealthiest men in Brazil, died on Dec. 8, 2000, at the age of 73. The Transbrasil Trustee said in a court filing that since the transfer of control in 1998, the airline experienced financial difficulties that became increasingly more dire. "By December 2001, the Company had run out of cash and credit, it had no fuel with which to fly its airplanes, was several months behind in payment of employees' salaries, and had unpaid bills dating to mid-2000. Transbrasil continued to operate until it stopped flying and ceased trading activities on Dec. 3, 2001," the Trustee said. "As a result of the financial collapse, the companies that had leased aircraft to Transbrasil terminated the leases and took back the leased aircraft, leaving the company with only 3 outdated Boeing 767 planes. Due to the ceasing of its operations, many thousands of customers were left with pre-paid tickets that could not be used. As well, thousands of employees were laid off or stopped receiving salaries, and creditors were left being owed millions of dollars in unpaid debts." The Transbrasil Trustee said that to date, he has been able to procure only limited information as to what happened to Transbrasil's assets after the collapse. The assets identified to date consist mainly of a few airplanes that have been stripped of parts, some spare parts and some real estate property, some of which has being seized by Brazilian Labor Courts, the combined value of which is some US$8 million. In comparison, the estimated value of Transbrasil's liabilities is in excess of US$500 million. ========================== C A Y M A N I S L A N D S ========================== 47 DEGREES: Creditors' Proofs of Debt Due May 24 ------------------------------------------------ The creditors of 47 Degrees North Capital Management Limited are required to file their proofs of debt by May 24, 2016, to be included in the company's dividend distribution. The company commenced liquidation proceedings on March 22, 2016. The company's liquidator is: Claire Loebell c/o Joe Gaastra Ernst & Young Ltd, 62 Forum Lane Camana Bay P.O. Box 510, Grand Cayman, KY1-1106 Cayman Islands Telephone: (345) 814 9052 Facsimile: (345) 814 8529 A & B FINANCE: Shareholder to Hear Wind-Up Report on May 31 ----------------------------------------------------------- The shareholder of A & B Finance Limited will hear on May 31, 2016, the liquidator's report on the company's wind-up proceedings and property disposal. The company's liquidator is: Fides Limited c/o Dwight Dube The Grand Pavilion, 2nd Floor Commercial Centre P.O. Box 10338 Grand Cayman KY1-1003 Cayman Islands Telephone (345) 949 7232 ATLAS ASSET: Members' Final Meeting Set for May 3 ------------------------------------------------- The members of Atlas Asset Opportunities Fund will hold their final meeting on May 3, 2016, at 9:00 a.m., to receive 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 P.O. Box 2681 Grand Cayman KY1-1111 Cayman Islands Telephone: (345) 814 7364 Facsimile: (345) 945 3902 CELLO LONG/SHORT: Shareholders' Final Meeting Set for May 17 ------------------------------------------------------------ The shareholders of Cello Long/Short Real Estate Fund, Ltd. will hold their final meeting on May 17, 2016, at 10:00 a.m., to receive the liquidator's report on the company's wind-up proceedings and property disposal. The company's liquidator is: Antoine Schetritt MG Management Ltd. Landmark Square, 2nd Floor, 64 Earth Close Seven Mile Beach P.O. Box 30116 Grand Cayman KY1-1201 Cayman Islands EVO CAPITAL: Shareholders' Final Meeting Set for May 26 ------------------------------------------------------- The shareholders of Evo Capital Partners Fund will hold their final meeting on May 26, 2016, at 4:00 p.m., to receive the liquidator's report on the company's wind-up proceedings and property disposal. The company's liquidator is: DMS Corporate Services Ltd. c/o Nicola Cowan Telephone: (345) 946 7665 Facsimile: (345) 949 2877 dms House, 2nd Floor P.O. Box 1344 Grand Cayman KY1-1108 Cayman Islands HARBORNE INVESTMENTS: Shareholders' Final Meeting Set for May 10 ---------------------------------------------------------------- The shareholders of Harborne Investments Limited will hold their final meeting on May 10, 2016, at 2:00 p.m., to receive the liquidator's report on the company's wind-up proceedings and property disposal. The company's liquidator is: T Edward G. Bayman Telephone: +44 (1) 534 787878 Facsimile: +44 (1) 534 787879 c/o Pentera Trust Company Limited 26 Esplanade St. Helier Jersey JE4 8PS KYROS INVESTMENT: Creditors' Proofs of Debt Due May 25 ------------------------------------------------------ The creditors of Kyros Investment Management Ltd are required to file their proofs of debt by May 25, 2016, to be included in the company's dividend distribution. The company commenced liquidation proceedings on April 1, 2016. The company's liquidator is: DMS Corporate Services Ltd. c/o Nicola Cowan dms House, 2nd Floor P.O. Box 1344 Grand Cayman KY1-1108 Cayman Islands Telephone: (345) 946 7665 Facsimile: (345) 949 2877 LOCOMOTIVE 1 LEASING: Shareholder to Hear Wind-Up Report on May 31 ------------------------------------------------------------------ The shareholder of Locomotive 1 Leasing Limited will hear on May 31, 2016, the liquidator's report on the company's wind-up proceedings and property disposal. The company's liquidator is: Fides Limited c/o Dwight Dube The Grand Pavilion, 2nd Floor Commercial Centre P.O. Box 10338 Grand Cayman KY1-1003 Cayman Islands Telephone (345) 949 7232 SANDHURST LTD: Creditors' Proofs of Debt Due May 16 --------------------------------------------------- The creditors of Sandhurst Ltd are required to file their proofs of debt by May 16, 2016, to be included in the company's dividend distribution. The company commenced liquidation proceedings on March 31, 2016. The company's liquidator is: Westport Services Ltd. c/o Bonnie Willkom P.O. Box 1111 Grand Cayman KY1-1102 Cayman Islands Telephone: (345) 949 5122 Facsimile: (345) 949 7920 SMILE JAPAN: Shareholder to Hear Wind-Up Report on May 13 --------------------------------------------------------- The shareholder of Smile Japan Company will hear on May 13, 2016, at 10:15 a.m., the liquidator's report on the company's wind-up proceedings and property disposal. The company's liquidator is: Intertrust SPV (Cayman) Limited c/o Susan Craig/Jennifer Chailler 190 Elgin Avenue, George Town Grand Cayman KY1-9005 Cayman Islands Telephone: (345) 943-3100 SUNRISE GLOBAL: Shareholders' Final Meeting Set for May 4 --------------------------------------------------------- The shareholders of Sunrise Global Diversified Master Fund Ltd. will hold their final meeting on May 4, 2016, at 9:00 a.m., to receive the liquidator's report on the company's wind-up proceedings and property disposal. The company's liquidator is: Andre Slabbert Appleby Trust (Cayman) Ltd. c/o Appleby Trust (Cayman) Ltd. 75 Fort Street P.O. Box 1350 Grand Cayman KY1-1108 Cayman Islands Telephone: +1 (345) 949 4900 T1 T2 FINANCE: Shareholder to Hear Wind-Up Report on May 31 ----------------------------------------------------------- The shareholder of T1 T2 Finance Limited will hear on May 31, 2016, the liquidator's report on the company's wind-up proceedings and property disposal. The company's liquidator is: Fides Limited c/o Dwight Dube The Grand Pavilion, 2nd Floor Commercial Centre P.O. Box 10338 Grand Cayman KY1-1003 Cayman Islands Telephone (345) 949 7232 ZAIS INVESTMENT: Shareholders' Final Meeting Set for May 5 ---------------------------------------------------------- The shareholders of Zais Investment Grade Limited VII will hold their final meeting on May 5, 2016, at 10:00 a.m., to receive the liquidator's report on the company's wind-up proceedings and property disposal. The company's liquidator is: Walkers Liquidations Limited Cayman Corporate Centre 27 Hospital Road George Town Grand Cayman KY1-9008 Cayman Islands Telephone: +1 (345) 949 0100 ================= G U A T E M A L A ================= BANCO DE LOS TRABAJADORES: Moody's Affirms Ba3 Rating; Outlook Neg ------------------------------------------------------------------ Moody's Investors Service changed the outlook to negative from stable on the long-term local and foreign currency deposit ratings of Guatemala's Banco de los Trabajadores ("Bantrab"). At the same time, the rating agency affirmed the bank's long-term and short- term local and foreign currency deposit ratings at Ba3/Not Prime. In addition, Moody's changed the outlook to negative from stable on the Ba3 long-term foreign currency senior debt rating of Bantrab Senior Trust, a Cayman-Island based trust guaranteed by Bantrab. These ratings were affirmed, with the outlook changed to negative from stable: Banco de los Trabajadores: Long-term local and foreign currency deposit ratings of Ba3 Bantrab Senior Trust: Long-term foreign currency senior debt rating of Ba3 These ratings were affirmed: Banco de los Trabajadores: Short-term local and foreign currency deposit ratings of Not Prime RATINGS RATIONALE Moody's outlook change to negative on Bantrab's long-term deposit ratings reflects the higher funding and profitability risks stemming from the seizure by Guatemala's Public Ministry (PM) of non-voting preferred shares that were held by Panama-based DHK Finance, Inc. The seizure was in response to allegations by Guatemala's Superintendency of Banks that the funds used to purchase these shares were obtained illegally, and that the bank may potentially have been involved in wrongdoing during the sale of those shares to DHK. Bantrab has experienced only a mild contraction of deposits thus far since the share seizure. Moreover, the bank's thick liquidity buffers should allow it to manage moderate strains that might arise from tighter funding conditions. However, the allegations could have a more serious negative impact on the bank's largely retail deposit funding if further evidence is produced or action taken by Guatemalan authorities that diminishes public confidence in Bantrab's governance and oversight. This would drive up funding costs as the bank is forced to obtain more expensive replacement funding. The bank's deposit funding costs are already higher than those of larger banks in the system, and additional increases will pressure its net interest margin and earnings. Bantrab's loan growth may also be curtailed as a result of the investigation on DHK, as management focuses on addressing possible flaws in its internal controls rather than growing its business, which would put further pressure on the bank's profitability. The negative outlook on Bantrab Senior Trust's Ba3 senior debt rating is in line with the negative outlook on Bantrab's Ba3 local currency deposit rating. Payment of principal and interest on the notes is absolutely, unconditionally, and irrevocably guaranteed by Bantrab. WHAT COULD CHANGE THE RATINGS UP OR DOWN Downward pressures on Bantrab's ratings would be triggered if the investigation reveals that the bank committed wrongdoings when selling the preferred shares to DHK, evidencing shortcomings in its corporate governance, risk management and control procedures. The ratings could also be downgraded if funding and profitability deteriorate meaningfully while the investigation is ongoing or as a result of its findings. The outlook on the ratings might be stabilized if the investigation concludes that the funds used by DHK to purchase the preferred shares did not come from illicit sources, and if the bank's funding structure and loan growth are not negatively affected by findings of the investigation. The last rating action on Bantrab and on Bantrab Senior Trust was on June 2015, when Moody's affirmed with a stable outlook all of the bank's and trust's ratings. The principal methodology used in these ratings was Banks published in January 2016. Based in Guatemala City, Banco de los Trabajadores reported total consolidated assets of about $2.2 billion (GTQ17 billion) and shareholders' equity of around $210 million (GTQ1.6 billion), as of December 2015. ============= J A M A I C A ============= JAMAICA: Small, Medium Enterprises to Benefit From Loans, Grants ---------------------------------------------------------------- RJR News reports that small and medium enterprises are to benefit from loans and grants to be provided by the Government this fiscal year. J$850 million has been allocated in the 2016/17 Estimates of Expenditure to facilitate this and other initiatives under the Jamaica Foundation for Competitiveness and Growth project, in the Ministry of Economic Growth and Job Creation, according to RJR News. It is also expected that a regulatory authority will be established for the new Special Economic Zone regime and a feasibility study of the proposed Caymanas Economic Zone will commence, the report notes. The draft Logistics Hub Initiative Master Plan will also be prepared, 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. JAMAICA: Companies Expect Inflation Decline in 2016 --------------------------------------------------- RJR News reports that Jamaican companies are expecting a decline in inflation during 2016. This is one of the findings of the February Survey of Businesses Inflation conducted by the Bank of Jamaica, according to RJR News. Businesses expect inflation of 4.1 per cent, lower than what was expected for 2015, the report notes. The perception of inflation control improved in the February survey, relative to the previous survey, the report relays. The Statistical Institute of Jamaica (STATIN) reported that consumer prices dipped for a third straight month in March, the report discloses. Prices fell by 0.1 per cent. It means that, since the start of the year, consumer prices have fallen 1.3 per cent, 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 U E R T O R I C O ====================== PUERTO RICO: Moving Closer to Deal With Some Bank Bondholders ------------------------------------------------------------- Michelle Kaske and Alexander Lopez at Bloomberg News report that Puerto Rico's Government Development Bank, operating under a state of emergency to preserve cash, is about halfway toward reaching a forbearance agreement with creditors, according to an official. The GDB, which lent to the commonwealth and its municipalities, owes $422 million on May 1 that officials have said the bank cannot pay. Jesus Manuel Ortiz, spokesman for Governor Alejandro Garcia Padilla, said while leaving a press conference in San Juan that the government was about halfway there when asked by a Bloomberg News reporter about how talks on a potential forbearance pact were progressing, according to Bloomberg News. Such an agreement would allow the parties to negotiate out of court, Bloomberg News notes. In an e-mail later to Bloomberg News, Barbara Morgan, a representative at SKDKnickerbocker in New York who represents the GDB, said there is no agreement yet. "While we are actively negotiating in good faith with our creditors, no one on our team would ever suggest agreements have been reached," Bloomberg News quoted Ms. Morgan as saying. "That would be both premature and directly at odds with our commitment to not negotiate this through the media," she added. Taxable Debt Bloomberg News says the bank has filed with regulators to sell taxable debt that would mature in May 2017, according to the Municipal Securities Rulemaking Board's website. Garcia Padilla on April 9 declared a state of emergency for the bank. That decision limits withdrawals from the GDB only to fund health, public safety and education services, Bloomberg News discloses. The bank has $562 million of liquidity, according to a debt- moratorium law passed two weeks ago, notes the report. Puerto Rico and its agencies borrowed for years to fix budget deficits, amassing $70 billion of debt, Bloomberg News notes. Island officials are negotiating with bondholders to reduce those obligations through a voluntary debt exchange, Bloomberg News relays. A U.S. House Natural Resources Committee is working on a bill that would establish a federal control board to manage Puerto Rico's budgets and oversee any restructurings, notes the report. Puerto Rico needs Congress to address the island's finances in order to protect its ability to maintain essential services for its residents, Antonio Weiss, counselor to U.S. Treasury Secretary Jacob J. Lew, told a packed audience in Manhattan during a panel on the commonwealth's debt crisis at the Center for Puerto Rican Studies at Hunter College, Bloomberg News relays. For every dollar the island collects in tax revenue, it must spend 33 cents on debt services, compared to an average 5 or 6 cents for states, Mr. Weiss said, according to Bloomberg News. Cascading Defaults "Without legislation by Congress, Puerto Rico will face a cascading series of defaults, including on its constitutionally protected debts and mounting litigation both against the commonwealth and between the creditors," Mr. Weiss said, Bloomberg News relays. The cash-strapped commonwealth is expected to fall short of paying the $422 million to holders of the GDB bonds, Moody's Investors Service said in a report. It may also default on debt from the Employees Retirement System, Industrial Development Co. and Highways and Transportation Authority, Moody's said. Mr. Lew urged Congress to act on a restructuring for the commonwealth to avoid a bailout, Bloomberg News notes. "The goal should be that at the end of a restructuring, that Puerto Rico will again have access to capital markets," Mr. Lew said in an interview with the Spanish-language Univision television network, Bloomberg News relates. "With a restructuring, it will actually be better for creditors as well," he added. As reported in the Troubled Company Reporter-Latin America on Dec. 28, 2015, Moody's Investors Service has downgraded $1.09 billion of Puerto Rico appropriation bonds issued by the Public Finance Corporation (PFC) to C from Ca, while maintaining other ratings assigned to the US territory's debt. =============== S U R I N A M E =============== SURINAME: S&P Lowers Sovereign Credit Rating to 'B+' ---------------------------------------------------- Standard & Poor's Ratings Services lowered its long-term sovereign credit rating on the Republic of Suriname to 'B+' from 'BB-'. At the same time, Standard & Poor's lowered its transfer and convertibility assessment on the republic to 'BB-' from 'BB'. Standard & Poor's also affirmed its 'B' short-term rating on Suriname. The outlook is negative RATIONALE The downgrade reflects the weakening of Suriname's external liquidity, fiscal flexibility, and debt burden, stemming from rising recent fiscal and current account deficits. Low commodity prices led to falling export earnings, resulting in large trade and current account deficits in 2015. Foreign exchange reserves also fell to SR$1.4 billion in December 2015 from SR$2.1 billion at the beginning of 2015, weakening the country's external position. Higher government spending and sharply lower fiscal revenues from the mining sector resulted in a fiscal deficit of 10% of GDP and boosted the net general government debt burden to 36% of GDP in 2015. S&P believes that the prospects for recovery in key external, fiscal, and debt metrics from 2016-2019 are modest. The negative outlook reflects S&P's belief that there is a one-in-three chance that those key metrics could deteriorate further, absent decisive and timely government policies. The government recently announced that it had reached a staff-level agreement with the IMF to enter a two-year, standby agreement for US$478 million. Successful implementation of the agreement, along with likely added funding from other multilateral development banks, could gradually enhance investor confidence, stabilize public finances, and sustain external liquidity. The value of Suriname's exports fell for the third consecutive year in 2015, weakening the country's current account balance and external position. Low prices, especially for the country's key exports of gold and oil, have resulted in a decline in the value of exports of close to 32% from 2012 to 2015, which led to a trade deficit, the country's first in over a decade. That deficit, coupled with a relatively large deficit in services (related to the construction of the oil refinery), led to a current account deficit of about US$800 million or almost 16% of 2015 GDP, the largest in more than a decade. The central bank's foreign exchange reserves have fallen to less than three months' worth of current account payments. S&P expects that the current account deficit will narrow to about 8% of GDP in 2016 as exports grow and imports compress. S&P believes that improving commodity prices, rising gold production at the new Merian mine, and slow import growth could lead to the current account back to balance by 2017. The average of Suriname's gross external financing requirements is likely to remain at about 100% current account receipts (CAR) and usable reserves in the next three years and its narrow net external debt should average about 42% of CAR. Suriname's external accounts have reflected material data inconsistencies historically. S&P projects that general government debt could increase by an average of 6.5% of GDP during 2016-2019. The fiscal deficit reached close to 10% of GDP for fiscal 2015, up from 5.7% in 2014. Total revenues fell in 2015 to 18% of GDP from 22% a year earlier due to low commodity prices and the closure of an aluminum mine. Total fiscal revenues (income tax, royalties, and dividend payments) from the mining sector (including oil and gold) fell to 2.0% of GDP in 2015 from 4.4% in 2014 and from a peak of 8.7% in 2012. Spending, on the other hand, increased about 6% in 2015 (due to higher outlays on goods and services and subsidies) and, because of all this, the fiscal deficit widened. S&P expects the fiscal deficit to narrow in the next four years as the government implements revenue and expenditure measures. The deficit should fall to close to 5% of GDP by fiscal 2019 from close to 8% in fiscal 2016. If oil or gold prices rise substantially beyond S&P's expectations, fiscal deficits could be smaller than expected. Suriname's net general government debt rose to 36% of GDP in 2015 from 24% in the previous fiscal year. S&P expects the net general government debt to GDP ratio to average 38% for the 2016-2018 period. Also, S&P expects that general government interest burden will be below 10% of government revenues on average from 2016- 2019. Both interest and debt burdens will rise in that time. In fiscal 2015, the government borrowed from the central bank to reduce the debt it owed to the commercial banks. As a result, the banks' exposure to the government (including the central bank) was 18% of their total assets, down from above 20% in the previous year. However, S&P expects that their exposure will rise back over 20% in the next three years due to the government's high domestic financing needs. Furthermore, 49% of the government's debt was in U.S. dollars in fiscal 2015. The overwhelming majority of external debt is owed to official bilateral and multilateral creditors; only a small portion is owed to external commercial creditors. Despite a 45% devaluation of the Surinamese currency in April 2015, the country's foreign exchange reserves continued to fall, contributing to a gap between the official and parallel exchange rates. The central bank has responded with periodic auctions of foreign exchange, gradually introducing more flexibility into the exchange rate (which has historically been fixed to the U.S. dollar). It has conducted five auctions to date. The most recent one set the exchange rate at 5.789 Surinamese dollars to one U.S. dollar. The auctions are weekly and relatively small in size, but are slowly bringing the official exchange rate closer to the parallel market rate. The central bank has limited monetary policy tools; it primarily uses reserve requirements on local and foreign currency deposits to manage credit growth in the local banking system. Financial dollarization, however, remains high, limiting the potential effectiveness of monetary policy. About 58% of deposits and just more than 30% of claims by resident commercial banks and credit unions were foreign-currency denominated at the end of 2015. Accordingly, S&P has equalized the local and foreign currency ratings on the country. S&P projects that Suriname's GDP per capita will be US$9,600 in 2016. Despite slumping oil prices and low gold prices, real GDP grew modestly in 2015 (less than 1%) owing to continuing construction work at the Merian gold mine and steady domestic demand. S&P expects that per capita growth will be 0%-1% for the 2016-2019 period, depending on the path of commodity prices. For 2016, S&P expects real GDP growth of less than 1% as construction at the Merian mine ends and production begins in the last quarter of the year. Domestic demand in real terms, which loose fiscal policy before the election had sustained, should be flat as the government imposes spending restraint. Because of low commodity prices, Suriname's growth rates in the next four years will be somewhat below those of other countries at the same level of income, after having been higher in the recent past. As a result, S&P do not believe that the country's trend economic growth is either consistently above or below the average of its peers. The country's medium-term growth prospects should be sustained by the expansion of gold mining, which will partially compensate for the decline in oil prices. Suriname's government is stable and democratic. The Nationale Democratische Partij (NDP), led by President Desi Bourtese, won a narrow majority (26 out of 51 seats) in the 2015 election. Although the government has and will likely continue to enact economic and financial reforms, some of them unpopular, S&P expects broad continuity in economic and social policies. Suriname's public sector institutions, however, remain weaker than those of most countries at a similar level of per capita income. OUTLOOK S&P bases the negative outlook on the at least one-in-three likelihood of a downgrade in the next two years due to continued erosion of the country's external or debt profile. The formal agreement with the IMF will provide greater clarity about the government's policy agenda and its medium-term economic targets, potentially boosting investor confidence and reducing pressures on the exchange rate. S&P expects that the government will take steps to boost revenues, curb spending, and move toward fiscal balance in the outlook horizon. S&P also expects that improving commodity prices will eventually lead to modest but positive GDP growth and stronger exports, reversing the recent deterioration in the current account. Delays in strengthening the government's revenue base, including through the introduction of a proposed value added tax and curbing spending, could result in persistent high fiscal deficits, further increases in general government debt, and potentially weaken external liquidity. Loose fiscal policy, combined with persistent current account deficits, could further reduce the central bank's foreign exchange reserves, weaken external liquidity, and result in a downgrade. Successful stabilization of the economy, including steps to boost confidence in the exchange rate, would contain the erosion of public finances. Enhanced access to external funding from official sources would alleviate immediate liquidity pressures in the domestic market and boost foreign exchange reserves. These steps, along with measures to improve business conditions to attract more investment in noncommodity sectors of the economy, would sustain long-term GDP growth and fiscal revenues. S&P could revise the outlook to stable as a result. In accordance with S&P's 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. 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 "key rating factor" had improved/deteriorated and that the "key rating factor" had improved/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 Suriname (The Republic of) Sovereign credit rating B+/Neg./B BB-/Stable/B Transfer and convertibility assessment Local currency BB- BB *********** Monday's edition of the TCR-LA delivers a list of indicative prices for bond issues that reportedly trade well below par. Prices are obtained by TCR-LA editors from a variety of outside sources during the prior week we think are reliable. Those sources may not, however, be complete or accurate. The Monday Bond Pricing table is compiled on the Friday prior to publication. Prices reported are not intended to reflect actual trades. Prices for actual trades are probably different. Our objective is to share information, not make markets in publicly traded securities. Nothing in the TCR-LA constitutes an offer or solicitation to buy or sell any security of any kind. It is likely that some entity affiliated with a TCR-LA editor holds some position in the issuers' public debt and equity securities about which we report. Tuesday's edition of the TCR-LA features a list of companies with insolvent balance sheets obtained by our editors based on the latest balance sheets publicly available a day prior to publication. At first glance, this list may look like the definitive compilation of stocks that are ideal to sell short. Don't be fooled. Assets, for example, reported at historical cost net of depreciation may understate the true value of a firm's assets. A company may establish reserves on its balance sheet for liabilities that may never materialize. The prices at which equity securities trade in public market are determined by more than a balance sheet solvency test. Submissions about insolvency-related conferences are encouraged. Send announcements to conferences@bankrupt.com *********** S U B S C R I P T I O N I N F O R M A T I O N Troubled Company Reporter-Latin America is a daily newsletter co-published by Bankruptcy Creditors' Service, Inc., Fairless Hills, Pennsylvania, USA, and Beard Group, Inc., Washington, D.C., USA, Marites O. Claro, Joy A. Agravante, Rousel Elaine T. Fernandez, Valerie U. Pascual, Julie Anne L. Toledo, and Peter A. Chapman, Editors. Copyright 2016. All rights reserved. ISSN 1529-2746. This material is copyrighted and any comillionercial use, resale or publication in any form (including e-mail forwarding, electronic re-mailing and photocopying) is strictly prohibited without prior written permission of the publishers. Information contained herein is obtained from sources believed to be reliable, but is not guaranteed. The TCR Latin America subscription rate is US$775 per half-year, delivered via e-mail. Additional e-mail subscriptions for members of the same firm for the term of the initial subscription or balance thereof are US$25 each. For subscription information, contact Peter A. Chapman at 215-945-7000 or Nina Novak at 202-362-8552. * * * End of Transmission * * *