/raid1/www/Hosts/bankrupt/TCRLA_Public/160503.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
Tuesday, May 3, 2016, Vol. 17, No. 86
Headlines
A R G E N T I N A
ARGENTINA: Fuel Prices Rise 10 Percent
B R A Z I L
BRAZIL: Posts Worst Primary Budget Deficit for March on Record
C A Y M A N I S L A N D S
ATLAS SENIOR: Creditors' Proofs of Debt Due May 18
BRE/SAKURA CAYCO: Creditors' Proofs of Debt Due May 25
CAPITAL MANAGEMENT: Creditors' Proofs of Debt Due May 25
CONTRARIAN CAPITAL: Placed Under Voluntary Wind-Up
DOMINICAN POWER: Fitch Expects to Rate Proposed Issuance 'B+/RR4'
EXPRESS ENERGY: Commences Liquidation Proceedings
JP MORGAN DISTRESSED: Creditors' Proofs of Debt Due May 25
KRAKATOA LTD: Placed Under Voluntary Wind-Up
MERIDIAN LLC: Commences Liquidation Proceedings
MERMOZ AVIATION: Commences Liquidation Proceedings
THL CREDIT: Commences Liquidation Proceedings
TRIANGULAR BHD: Commences Liquidation Proceedings
D O M I N I C A N R E P U B L I C
DOMINICAN REP: Entities Agree to Boost Oil Exploration, Mining
EMPRESA GENERADORA: Fitch Expects to Rate Issuance 'B+/RR4'
G U A T E M A L A
GUATEMALA: Returns to Global Market With $700 Million in Bonds
GUATEMALA: Fitch Rates $700MM Global Bond Issuance 'BB'
GUATEMALA: Fitch Affirms 'BB' Issuer Default Ratings
J A M A I C A
UC RUSAL: Alumina Production in Jamaica Declines in 1Q 2016
P U E R T O R I C O
INMOBILIARIA BAFCO: 341 Meeting of Creditors Set for May 9
U R U G U A Y
PROVINCIA CASA FINANCIERA: Fitch Gives 'B' Issuer Default Ratings
SANCOR SEGUROS: Fitch Assign 'B+' Insurer Fin'l. Strength Rating
- - - - -
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A R G E N T I N A
=================
ARGENTINA: Fuel Prices Rise 10 Percent
--------------------------------------
EFE News reports that the prices of liquid fuels were increased by
an average of 10 percent on May 1 in Argentina, marking the fourth
hike in fuel prices this year, the official Telam News agency
reported.
Fuel prices have risen more than 28 percent on a cumulative basis
in the South American country this year, according to EFE News.
* * *
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'.
===========
B R A Z I L
===========
BRAZIL: Posts Worst Primary Budget Deficit for March on Record
--------------------------------------------------------------
Mario Sergio Lima and Carla Simoes at Bloomberg News report that
Brazil's central government recorded its worst fiscal performance
for the month of March on record, underscoring the challenges that
President Dilma Rousseff faces in reviving confidence amid a
deepening political crisis.
Latin America's largest economy posted a primary budget deficit of
BRL7.9 billion ($2.3 billion) in the last month of the quarter,
when tax revenues are usually strong, according to Bloomberg News.
The gap, which excludes interest payments as well the performance
of municipalities and state-run companies, compared to a BRL25.1
billion deficit in February, the Treasury said, Bloomberg News
relays. Analysts surveyed by Bloomberg forecast a deficit of
BRL9.9 billion.
Bloomberg News discloses that Rousseff has left austerity measures
on the back burner as she fights for her political survival.
After losing a crucial impeachment vote in the lower house on
April 17, the president is on the brink of being removed from
office as Senators prepare to decide whether to start official
impeachment hearings, Bloomberg News notes.
Brazil is now expected to deliver a primary deficit for a third
consecutive year as the deepest recession in decades hamstrings
tax-collection efforts, Bloomberg News says. The situation could
become even more dramatic if the Supreme Court decides that
Brazilian states can reduce the debt they own to the federal
government, a ruling that could cost the Treasury BRL402 billion
in lost revenue. The justices are expected to make a decision in
two months, 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.
==========================
C A Y M A N I S L A N D S
==========================
ATLAS SENIOR: Creditors' Proofs of Debt Due May 18
--------------------------------------------------
The creditors of Atlas Senior Loan Fund VIII, Ltd. are required to
file their proofs of debt by May 18, 2016, to be included in the
company's dividend distribution.
The company commenced liquidation proceedings on April 13, 2016.
The company's liquidator is:
Andre Slabbert
Appleby Trust (Cayman) Ltd.
75 Fort Street
P.O. Box 1350 Grand Cayman KY1-1108
Cayman Islands
Telephone: +1 (345) 949 4900
BRE/SAKURA CAYCO: Creditors' Proofs of Debt Due May 25
------------------------------------------------------
The creditors of BRE/Sakura Cayco III 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 7, 2016.
The company's liquidator is:
Intertrust SPV (Cayman) Limited
190 Elgin Avenue, George Town
Grand Cayman, KY1-9005
Cayman Islands
c/o Susan Craig
Telephone: (345) 943-3100
CAPITAL MANAGEMENT: Creditors' Proofs of Debt Due May 25
--------------------------------------------------------
The creditors of Capital Management SPC 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 March 29, 2016.
The company's liquidator is:
Nicola Cowan
DMS Corporate Services Ltd.
dms House, 2nd Floor
P.O. Box 1344 Grand Cayman KY1-1108
Cayman Islands
Telephone: (345) 946 7665
Facsimile: (345) 949 2877
CONTRARIAN CAPITAL: Placed Under Voluntary Wind-Up
--------------------------------------------------
On April 15, 2016, the sole shareholder of Contrarian Capital
Senior Secured Offshore Fund Limited resolved to voluntarily wind
up the company's operations.
Creditors are required to file their proofs of debt to be included
in the company's dividend distribution.
The company's liquidator is:
Andrew Richard Victor Morrison
c/o Tim Cone
Ogier
89 Nexus Way, Camana Bay
Grand Cayman KY1-9009
Cayman Islands
Telephone: +1 (345) 949 9876
Facsimile: +1 (345) 949-9877
DOMINICAN POWER: Fitch Expects to Rate Proposed Issuance 'B+/RR4'
----------------------------------------------------------------
Fitch Ratings expects to assign a long-term rating of 'B+/RR4' to
AES Andres B.V.'s (Andres) proposed issuance maturing in 2026, a
joint and several obligation of AES Andres and Dominican Power
Partners. The new notes are attached to Empresa Generadora de
Electricidad Itabo S.A.'s proposed issuance, but share no cross
guarantees with them. The 'RR4' Recovery Rating reflects the
recovery rating cap of companies domiciled in the Dominican
Republic (DR).
KEY RATING DRIVERS
Andres's ratings reflect the DR's electricity sector's high
dependency on transfers from the central government to service
their financial obligations, a condition that links the credit
quality of the distribution companies and generation companies to
that of the sovereign. Low collections from end-users, high
electricity losses and subsidies have undermined distribution
companies' cash generation capacity, exacerbating generation
companies' dependence on public funds to cover the gap produced by
insufficient payments received from distribution companies. The
ratings also consider the companies' solid asset portfolio, strong
balance sheet, and well-structured purchase power agreements
(PPAs).
The rating of the notes considers the combined operating assets of
Andres and Dominican Power Partners (DPP), which jointly and
severally guarantee Andres's proposed notes due 2026. These notes
will be attached to Empresa Generadora de Electricidad Itabo's
notes, also expected to be rated 'B+'. The notes are primarily
intended to repay a USD180 million bridge loan taken to call
similarly structured bonds last year. Additional funds will be
used for small capex projects and to provide a working capital
liquidity cushion. DPP currently contributes only about 10% of
combined Andres/DPP EBITDA. In 2017, DPP is expected to complete a
significant capacity expansion in the form of conversion to a
combined-cycle plant, substantially increasing its proportional
revenue and EBITDA contribution to the combined results of AES
Dominicana.
Sector's Dependence on Government Transfers
High energy distribution losses (above 30% in last five years),
low level of collections and important subsidies for end-users
have created a strong dependence on government transfers. This
dependence has been exacerbated by the country's exposure to
fluctuations in fossil-fuel prices and energy demand growth (3.8%
compound annual growth rate [CAGR] in 2009-2014). The regular
delays in government transfers pressure working capital needs of
generators and add volatility to their cash flows. This situation
increases the risk of the sector, especially at a time of rising
fiscal vulnerabilities affecting the Central Government's
finances.
High-Quality Asset Base
Andres has the DR's most efficient power plant, and ranks among
the lowest-cost electricity generators in the country. Andres's
combined-cycle plant burns natural gas and is expected to be fully
dispatched as a base-load unit as long as the liquefied natural
gas (LNG) price is not more than 15% higher than the price of
imported fuel oil No. 6. Moreover, Andres operates the country's
sole LNG port, offering regasification, storage, and
transportation infrastructure. In the medium term, the company is
also looking to expand its transportation network and processing
capacity for its LNG operations. By 2017, the aggregate capacity
of AES Dominicana will increase by approximately 114MW as result
of the development of a combined cycle facility in DPP's power
plant. The construction of this project would start by the end of
the year.
Strong Credit Metrics
The combined credit metrics for Andres and DPP are strong for the
rating category. For the year ended the companies' total debt-to-
EBITDA was 2.1x, while total net debt-to-EBITDA stood at 1.2x.
Major maintenance in the first half of 2015 (1H15), and lower gas
prices pressured EBITDA down to USD141 million versus USD206
million at year-end 2014. Fitch expects that leverage will
deteriorate sharply this year reflecting the full drawdown on
DPP's USD260 million credit facility and a USD100 million net debt
increase from Andres's proposed issuance. Additional stoppage time
as DPP's combined cycle plant is brought online as well as the
effect of lower gas prices on PPA indexation will keep EBITDA low
until 2017.
Cash Flow Volatility Persists
In 2015, Andres and DPP generated USD218 million of cash flow from
operations (CFFO), above the USD143 million posted in the same
period last year. This cash inflow is due to the sale of USD142
million of accounts receivables through a factoring agreement in
the third quarter of 2015 (3Q15), which reduced receivable days to
less than a month. However, Fitch expects the sector's collections
deficit and delays in government transfers to gradually accumulate
again, driving Andres/DPP's receivable days to return to above 100
over the next 18-24 months.
KEY ASSUMPTIONS
-- Lower natural gas prices and revenues related to NG sales in
the near term;
-- Suspension of NG expansion plans;
-- 45 days of downtime at DPP in 2016 as the cycle is combined,
with approximately 100 MW of additional capacity effective
January 2017;
-- 100% of net income to be distributed as dividends annually, as
well as the release of previously retained earnings in the
form of capital reductions.
RATING SENSITIVITIES
A negative rating action to AES Andres B.V. would follow if the
DR's sovereign ratings are downgraded, if there is sustained
deterioration in the reliability of government transfers, and
financial performance deteriorates to the point of increasing the
combined Andres/DPP ratio of debt-to-EBITDA to 4.5x for a
sustained period.
A positive rating action could follow if the DR's sovereign
ratings are upgraded or if the electricity sector achieves
financial sustainability through proper policy implementation.
LIQUIDITY
2015 EBITDA totalled USD141 million (versus USD206 million at
year-end 2014), with gross leverage of 2.1x and gross interest
coverage of 7.2x. The companies' strong liquidity position would
be further supported by the proposed 2026 bond, which would extend
most of their maturities by eight years. Currently, the company
has a credit facility of USD260 million, of which approximately
USD112 million had been drawn upon as of year-end. This loan is
scheduled to begin amortizing in 4Q17 over nine equal quarterly
payments. However, Fitch also expects this loan to be replaced by
long-dated notes before it begins to amortize. Additionally, DPP
and Andres have committed credit lines of USD70 million with
Scotiabank, of which USD42.5 million remain undrawn. These lines
mature in 1Q15.
EXPRESS ENERGY: Commences Liquidation Proceedings
-------------------------------------------------
At an extraordinary meeting held on April 14, 2016, the members of
Express Energy - CIG Holdings Ltd. resolved to voluntarily
liquidate the company's business.
Creditors are required to file their proofs of debt to be included
in the company's dividend distribution.
The company's liquidator is:
David Dyer
Deutsche Bank (Cayman) Limited
P.O. Box 1984, Boundary Hall
Cricket Square, 171 Elgin Avenue
P.O. Box 1984 Grand Cayman KY1-1104
Cayman Islands
Telephone: (345)949-8244
Facsimile: (345)949-5223
JP MORGAN DISTRESSED: Creditors' Proofs of Debt Due May 25
----------------------------------------------------------
The creditors of J.P. Morgan Distressed Debt Opportunities Master
Fund 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 6, 2016.
The company's liquidator is:
Intertrust SPV (Cayman) Limited
190 Elgin Avenue, George Town
Grand Cayman, KY1-9005
Cayman Islands
c/o Susan Craig
Telephone: (345) 943-3100
KRAKATOA LTD: Placed Under Voluntary Wind-Up
--------------------------------------------
On March 18, 2016, the shareholders of Krakatoa Ltd. resolved to
voluntarily wind up the company's operations.
Creditors are required to file their proofs of debt to be included
in the company's dividend distribution.
The company's liquidators are:
Lee De'ath
Craig Povey
c/o Julian Purser
Telephone: 00 44 1206 217900
Facsimile: 00 44 1206 580230
CVR Global LLP
Town Wall House
Balkerne Hill
Colchester
Essex CO3 3AD
England
MERIDIAN LLC: Commences Liquidation Proceedings
-----------------------------------------------
On April 11 2016, the sole shareholder of Meridian LLC resolved to
voluntarily liquidate the company's business.
Creditors are required to file their proofs of debt to be included
in the company's dividend distribution.
The company's liquidator is:
Thomas Ackermann
Alte Tiefenaustrasse 6
3050 Bern
Switzerland
Telephone: +41 79 593 9267
MERMOZ AVIATION: Commences Liquidation Proceedings
--------------------------------------------------
On April 6, 2016, the sole shareholder of Mermoz Aviation resolved
to voluntarily liquidate the company's business.
Creditors are required to file their proofs of debt to be included
in the company's dividend distribution.
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
THL CREDIT: Commences Liquidation Proceedings
---------------------------------------------
On April 7, 2016, the sole shareholder of THL Credit Loan
Opportunity II Ltd. resolved to voluntarily liquidate the
company's business.
Creditors are required to file their proofs of debt to be included
in the company's dividend distribution.
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
TRIANGULAR BHD: Commences Liquidation Proceedings
-------------------------------------------------
On April 7, 2016, the sole shareholder of Triangular BHD Fund Ltd.
resolved to voluntarily liquidate the company's business.
Creditors are required to file their proofs of debt to be included
in the company's dividend distribution.
The company's liquidator is:
Alun Davies
Walkers
190 Elgin Avenue, George Town
Grand Cayman KY1-9001
Cayman Islands
Telephone: (345) 914 6365
===================================
D O M I N I C A N R E P U B L I C
===================================
DOMINICAN REP: Entities Agree to Boost Oil Exploration, Mining
--------------------------------------------------------------
Dominican Today reports that the binational chambers of commerce
grouped in the Roundtable of Commonwealth Countries in the
Dominican Republic and Dominican Republic's Oil and Mining Chamber
(CAMIPE), agreed to coordinate efforts to maximize business
opportunities in mining, oil and gas, between the country and
Commonwealth nations.
Commonwealth countries operate the world's major mines and oil
exploration and production, while Dominican Republic mining has
become the main foreign exchange earner and source of government
revenue, according to Dominican Today. The country has also
launched an unprecedented oil and gas exploration process, the
report notes.
Commonwealth Roundtable President Fernando Gonzalez Nicolas and
Mining Petroleum Chamber President Jose Sena signed the agreement
in the presence of ambassadors Chris Campbell of Great Britain,
and Steve Cote of Canada, the report relays.
The agreement was also signed by British Chamber of Commerce
president Jose Rodriguez, India Chamber of Commerce president
Jabar Singh, Society of Friends of South Africa president Norman
de Castro, and Trinidad vice consul Federico Reyes, the report
discloses.
Gonzalez Nicolas said Dominican Republic's oil and gas exploration
is at the ready, whereas Sena called mining the mainstay of the
Dominican economy, the report says.
Ambassadors
Campbell said global oil companies seek opportunities and the
Dominican Republic can be a destination, the report notes.
Mr. Cote said Canada is home to some of the world's major oil and
gas companies, the report discloses.
The Roundtable of Commonwealth Countries in the Dominican Republic
promotes bilateral, economic, social and political ties between
the Dominican Republic and the 53 Commonwealth countries, while
the Oil and Mining Chamber seeks to develop Dominican Republic's
oil-mining sector and brings together domestic mining and oil
companies, the report adds.
As reported in the Troubled Company Reporter-Latin America on
Dec. 3, 2015, Fitch Ratings affirmed the Dominican Republic's
long-term foreign and local currency Issuer Default Ratings (IDRs)
at 'B+'. The Rating Outlooks on the long-term IDRs are revised to
Positive from Stable. The issue ratings on the Dominican
Republic's senior unsecured foreign and local currency bonds are
affirmed at 'B+'. The Country Ceiling is affirmed at 'BB-' and the
short-term foreign currency IDR at 'B'.
EMPRESA GENERADORA: Fitch Expects to Rate Issuance 'B+/RR4'
-----------------------------------------------------------
Fitch Ratings expects to assign a 'B+/RR4' Long-Term rating to
Empresa Generadora de Electricidad Itabo S.A.'s (Itabo) proposed
issuance maturing in 2026. The notes would be attached to AES
Andres B.V.'s notes, but would carry no cross guarantees.
KEY RATING DRIVERS
Itabo's ratings reflect the electricity sector's high dependency
on transfers from the central government of the Dominican Republic
to service its financial obligations, a condition that links the
credit quality of the distribution companies (EDEs) and generation
companies to that of the sovereign. Low collections from end-
users, high electricity losses and subsidies have undermined
distribution companies' cash generation capacity, exacerbating
generation companies' dependence on public funds to cover the gap
produced by insufficient payments received from distribution
companies. Itabo's ratings also consider its low cost generation
portfolio, strong balance sheet and well-structured Power Purchase
Agreements (PPAs), which contribute to strong cash flow generation
and bolster liquidity.
Sector's Dependence on Government Transfers
High energy distribution losses (above 30% in last five years),
low level of collections and important subsidies for end users
have created a strong dependence on government transfers. This
dependence has been exacerbated by the country's exposure to
fluctuations in fossil-fuel prices and robust energy demand growth
(3.8% CAGR in 2009 - 2014). The regular delays in government
transfers pressure the generators working capital needs and add
volatility to their cash flows. This situation increases the risk
for the sector, especially at a time of rising fiscal
vulnerabilities affecting the central government's finances.
Working Capital Pressure & Lower Realized Prices
In 2015, Itabo generated USD114 million of CFFO, compared to USD52
million at year-end 2014. In 3Q15, the company sold USD100 million
of accounts receivable through factoring agreements, bringing
receivable days down below one month. Fitch expects receivable
days to gradually return to historical levels over the medium
term. Itabo's PPA expires in the second half of 2016. The low
price environment could expose the company to both spot sale
vulnerability in the short term, and lower negotiated PPAs through
the medium term.
Low Cost Asset Portfolio
Itabo's ratings incorporate its strong competitive position as one
of the lower cost thermoelectric generators in the country,
ensuring the company's consistent dispatch of its generation
units. The company operates two low cost coal fired thermal
generating units and a third peaking plant that runs on Fuel Oil
#2 (San Lorenzo) and sells electricity to three distribution
companies in the country through long-term U.S. dollar denominated
PPAs. The company expects to remain a base load generator even
after a 700 MW coal generation project, sponsored by the
government, begins operating by 2017.
Adequate Credit Metrics
The company has strong credit metrics for the rating category.
Year-end leverage, measured as total debt to EBITDA, improved to
1.0x at from 1.4x at December 2014, as debt decreased by almost
USD50 million year-over-year. In the same period, EBITDA fell to
USD69 million from USD81.5 million, while the EBITDA margin fell
slightly to 34.6% from 36.9%. The decrease reflects lower coal
prices, to which prices on contract sales are linked, and lower
overall generation in the first half of 2015.
KEY ASSUMPTIONS
-- No material unplanned stoppages in 2016; possibility of
continued climatological impacts on an annual basis;
-- Demand growth of approximately 2.5%;
-- Fuel prices to remain low in the near- to medium-term, with
possible impact on PPA renegotiations in 2016/2017.
RATING SENSITIVITIES
A negative rating action could occur if the DR's sovereign ratings
are downgraded, if there is sustained deterioration in the
reliability of government transfers, and if financial performance
deteriorates to the point of increasing the ratio of Debt-to-
EBITDA to 4.5x for a sustained amount of time.
A positive rating action could follow if the Dominican Republic's
sovereign ratings are upgraded or if the electricity sector
achieves financial sustainability through proper policy
implementation.
LIQUIDITY
Itabo currently has an outstanding bridge loan of USD69 million
due in 2017. This loan was part of a transaction in 2015 that was
used to call the 2020 bonds of Itabo and AES Dominicana SPV. Itabo
has proposed a new international bond, which would primarily be
used to repay the bridge loan and extend its maturity profile.
Excess funds would likely be used for minor capex and shoring up
working capital needs. The company currently holds approximately
two thirds of its cash in USD, and maintains an undrawn USD45
million committed credit line with Scotiabank, maturing in 1Q17.
=================
G U A T E M A L A
=================
GUATEMALA: Returns to Global Market With $700 Million in Bonds
--------------------------------------------------------------
Michael McDonald and Pham-Duy Nguyen at Bloomberg News report that
after a three-year drought, Guatemala offered $700 million in
bonds to help refinance debt and fund a budget deficit.
The 10-year notes sold Aril 29 to yield 4.6 percent, the lowest in
the nation's history, Finance Minister Julio Hector Estrada told
reporters in Guatemala City, Bloomberg News says.
Demand for the bonds totaled $3 billion, Mr. Estrada said,
Bloomberg News discloses.
"There is high appetite for Guatemala debt, it's a very low-
maintenance, well-managed macro story," said Sean Newman, a money
manager at Atlanta-based Invesco Ltd, Bloomberg News relays.
"Risks are fairly muted," he added.
Bloomberg News notes that Guatemala's economy will expand 4
percent this year, according to the International Monetary Fund,
while Latin America and the Caribbean as a whole are poised to
contract. The fuel-importing nation is benefiting from lower oil
prices, while Guatemalans living abroad are sending home more
money in remittances as the U.S. recovers, Bloomberg News says.
Guatemala is seeking to boost tax revenue and restore faith in the
government after the president, vice-president and central bank
chief were all jailed on corruption charges last year, President
Jimmy Morales said at Bloomberg headquarters in New York earlier
this month.
Government revenue fell to a 19-year low of 10.8 percent of gross
domestic product last year, the lowest in the region, after former
President Otto Perez Molina was jailed and accused by prosecutors
of bribery and leading a customs tax fraud racket, Bloomberg News
notes. Morales, a former TV comedian, took office in January
pledging to crack down on corruption, Bloomberg News adds.
GUATEMALA: Fitch Rates $700MM Global Bond Issuance 'BB'
-------------------------------------------------------
Fitch Ratings has assigned a 'BB' rating to Guatemala's USD700
million global bond issuance maturing May 3, 2026. The bonds have
a coupon rate of 4.5%.
The government will use the proceeds to pay interest and principal
on its outstanding debt obligations and the remainder to finance
social and investment programs and capital expenditures
KEY RATING DRIVERS
The rating is in line with Guatemala's Long-Term Foreign Currency
Issuer Default Rating (IDR) of 'BB'.
RATING SENSITIVITIES
The rating would be sensitive to any changes in Guatemala's Long-
Term Foreign Currency IDR. On April 29, 2016, Fitch affirmed
Guatemala's Long-Term Foreign Currency IDR at 'BB' with a Stable
Outlook.
GUATEMALA: Fitch Affirms 'BB' Issuer Default Ratings
----------------------------------------------------
Fitch Ratings has affirmed Guatemala's Long-Term Foreign and Local
Currency Issuer Default Ratings (IDRs) at 'BB'. The Rating Outlook
is Stable. The issue ratings on Guatemala's senior unsecured
Foreign and Local Currency bonds are also affirmed at 'BB'. The
Country Ceiling is affirmed at 'BB+' and the Short-Term Foreign
Currency IDR at 'B'.
KEY RATING DRIVERS
Guatemala's ratings affirmation and Stable Outlook reflect the
following drivers:
Guatemala's ratings are supported by its track record of
macroeconomic stability and disciplined policies, low public debt
to GDP and sound external liquidity. These strengths are
counterbalanced by a low tax base that undermines public finances,
as well as weak governance and human development indicators.
Despite the political turmoil in Guatemala that resulted in the
resignation and arrest of several top government officials
including the president in 2015, economic growth remained solid at
4.1% in 2015, little changed from the 4.2% in 2014. Real wage
gains, strong growth in worker remittances and low oil prices
supported private consumption. At the same time, the volume of
exports increased as well.
Guatemala's growth potential is estimated at between 3.5%-4.0%, a
level insufficient to significantly boost per-capita income and
reduce poverty in the context of high population growth (one of
the highest rates in Latin America). Low domestic investment and
savings rates, a poor security environment, and weaknesses in the
country's health and education systems limit the country's
potential growth rate. Guatemala ranks 128 out of 188 countries in
the UNDP's Human Development Index, only Honduras and Haiti rank
lower in the Western Hemisphere.
Annual average inflation hit 2.4% in 2015 and inflation
expectations are within the central bank's 4+/-1% target over the
next two years. The central bank cut interest rates by a
cumulative 225 basis points since September 2013 as inflationary
pressures dissipated. Since January 2016, inflation has increased
to above the midpoint of the central bank's target largely due to
supply shocks, especially on food items.
The current account deficit narrowed significantly in 2015 to 0.3%
of GDP in 2015 and is expected to remain at below 1% of GDP in
2016-2017. External financing needs are covered by broad-based
foreign direct investment and external borrowing from
multilaterals. The country's international reserves rose to $7.8
billion in 2015 from $7.3 billion in 2014, covering over four
months of current account payments. Guatemala's external liquidity
ratio is one of the strongest in the 'BB' category due to moderate
amortisations and short-term external debt, low non-resident
participation in the local financial markets and adequate
international reserves.
Guatemala's low debt to GDP, at half of the 'BB' median of 42%,
and has been broadly stable in recent years. However, fiscal
accounts face persistent structural weaknesses. Guatemala has one
of the lowest ratios of general government revenues to GDP of all
rated sovereigns at below 11%. As a result, Guatemala's government
debt to revenues at over 200% is higher than the 'BB' median of
190%. In fact, the government has failed to meet its modest tax
revenue targets for four years in a row and is likely to fail to
meet its targets again this year. Fitch expects government tax
revenues to reach only 9.8% of GDP in 2016, down from 10.2% in
2015.
The low tax take constrains the authorities' ability to address
pressing social and infrastructure needs and undertake
countercyclical policies. Tight congressional control of borrowing
has kept deficits low despite revenue shortfalls, however,
requiring drastic spending cuts in 2015. As a result, the fiscal
deficit was just 1.4% of GDP. Fitch expects the fiscal deficit to
remain stable in 2016 as well. Shortfalls in revenues could lead
to government spending cuts again in 2016. One of the government's
key priorities is a strengthening of the tax authority to help
boost tax revenues. This has begun with a change in leadership and
internal measures so far, a more comprehensive reform in
discussion would require congressional approval. These measures
would only likely begin to have an impact, however, beginning in
2017.
Guatemala's governance indicators trail the 'BB' median in most
areas, and pervasive corruption had far-reaching repercussions in
the past year. The former president and vice president among other
key government officials were arrested and resigned amid
allegations of corruption and large scale protests of the
population in 2015 and their cases remain pending in the courts.
Jimmy Morales, a political outsider, was elected president in 2015
on an anti-corruption platform. He took office in January 2016
along with a new Congress. Since January, the Congress has passed
several institutional reforms and is debating others to strengthen
the tax authority and campaign finance and electoral laws. The
government is also discussing a constitutional reform that seeks
to strengthen Guatemala's justice system.
RATING SENSITIVITIES
The Stable Outlook reflects Fitch's view that upside and downside
risks to the rating are broadly balanced. The main risk factors
that, individually or collectively, could trigger a rating action
are:
Positive:
--Sustained improvements in tax collection and the budget process
that enhance fiscal policy flexibility;
--Higher investment and growth prospects;
--Improvements in governance and human development indicators
relative to peers.
Negative:
-- Higher fiscal deficits and/or lower economic growth that
weaken debt dynamics;
-- Political gridlock that constrains government financing
flexibility and/or leads to interruptions in external
financing;
-- Social unrest and governability challenges leading to
macroeconomic and policy uncertainty.
KEY ASSUMPTIONS
-- Fitch assumes that the corruption investigations and trials of
the former key government officials continues to go through
institutional channels and that any protests remain peaceful.
-- Fitch forecasts that Guatemala's economy and balance of
payments will continue to benefit from low oil prices
(USD35/bl in 2016 and USD45/bl in 2017) as well as supportive
U.S. economic and employment growth rates.
=============
J A M A I C A
=============
UC RUSAL: Alumina Production in Jamaica Declines in 1Q 2016
-----------------------------------------------------------
RJR News reports that Russia's UC Rusal, which has mining
operations in Jamaica, has suffered a decline in alumina
production for the first three months of 2016.
The figures amounted to 1,873 metric tons, a reduction of 1.7 per
cent from the previous quarter, according to RJR News.
The report notes that Alumina production at Rusal's overseas
refineries was 1,196 metric tons -- this was a 4.3 per cent drop
from the last quarter.
The fall-off was largely caused by scheduled repairs at the
refineries, the report relays.
Meanwhile, Rusal has reported improved sales for the first quarter
of 2016, the report discloses.
It sold 957,000 metric tons up from 876,000 metric tons in the
previous quarter, the report says.
The firm turned in stronger numbers this quarter, largely on
account of a drop in production from the People's Republic of
China and a corresponding rise in the price of aluminum, the
report relays.
The firm's realized aluminum price for the first quarter was off
by 3.6% from the previous quarter at US$1,666 US per metric ton,
due largely to a drop in average aluminum London Metal Exchange
prices as well as the average premium, the report adds.
* * *
As reported in the Troubled Company Reporter-Latin America on
March 14, 2016, RJR News reports that UC Rusal has asked lenders
to refinance some of its US$8.4 billion debt pile. The Russian
aluminum group disclosed the move in its full-year financial
statements, according to RJR News. This comes less than two years
after its most recent debt restructuring, the report notes.
TCRLA reported on June 24, 2015, that RJR News said Jamaica Mining
Minister Phillip Paulwell, who returned to Jamaica from his trip
to Russia, has declared that all is well with the arrangements
that have been made for full restoration of operations at the
Alumina Partners of Jamaica (Alpart) bauxite/alumina plant at Nain
in St. Elizabeth.
After being closed for six years, work resumed at the plant
earlier this year, but only in respect of mining of the ore for
shipment to Russia, in the first instance, according to RJR News.
The phased resumption plan should see the resumption of alumina
refining towards the end of 2016, the report said.
TCRLA, citing RJR News, reported on April 30, 2015, that UC Rusal
has re-ignited its war of words with the London Metal Exchange,
saying it has allowed financial speculators to distort prices.
Vladislav Soloviev, Chief Executive Officer of the heavily
indebted Russian group, said the price of aluminum traded on the
LME has been depressed by as much as 30 per cent by the actions of
money-market players, according to RJR News.
UC Rusal has been involved in a bitter legal wrangle with the LME
over plans to reform the exchange's warehousing system and
introduce rules to tackle long queues that built up in the
aftermath of the global financial crisis, the report said.
======================
P U E R T O R I C O
======================
INMOBILIARIA BAFCO: 341 Meeting of Creditors Set for May 9
----------------------------------------------------------
The meeting of creditors of Inmobiliaria Bafco Inc. is set to be
held on May 9, 2016, at 9:00 a.m., according to a filing with the
U.S. Bankruptcy Court in Puerto Rico.
The meeting will take place at the Ochoa Building, First Floor,
500 Tanca Street, San Juan, Puerto Rico.
The court overseeing the bankruptcy case of a company schedules
the meeting of creditors usually about 30 days after the
bankruptcy petition is filed. The meeting is called the "341
meeting" after the section of the Bankruptcy Code that requires
it.
A representative of the company is required to appear at the
meeting and answer questions under oath. The meeting is presided
over by the U.S. trustee, the Justice Department's bankruptcy
watchdog.
About Inmobiliaria BAFCO
Inmobiliaria Bafco, Inc., a single asset real estate, filed a
Chapter 11 bankruptcy petition (Bankr. D. P.R. Case No. 16-02642)
on April 4, 2016. Fernando Batlle signed the petition as
president. The Debtor listed total assets of $13.4 million and
total debts of $12.05 million. Judge Mildred Caban Flores is
assigned to the case.
=============
U R U G U A Y
=============
PROVINCIA CASA FINANCIERA: Fitch Gives 'B' Issuer Default Ratings
-----------------------------------------------------------------
Fitch Ratings has assigned Provincia Casa Financiera (Provincia)
Foreign Currency (FC) and Local Currency (LC) Long-Term Issuer
Default Ratings (IDRs) of 'B' and a Support Rating (SR) of '5'.
KEY RATING DRIVERS - IDRS
Provincia is a branch of Banco de la Provincia de Buenos Aires
(BAPRO) and part of the same legal entity. Therefore, Provincia's
IDRs reflect Fitch's opinion of BAPRO's financial and business
profile, which are highly influenced by its leading franchise and
systemic importance as the second largest bank in terms of loans
and deposits in Argentina. Fitch also considers the bank's good
asset quality, ample liquidity, moderate profitability and low
capital base.
In addition, BAPRO and Provincia are wholly-owned by the
government of the Province of Buenos Aires. BAPRO's liabilities
(including those of its branches abroad) are fully guaranteed by
the government of the Province of Buenos Aires.
The head office, BAPRO also has international coverage through
branches and representative offices in five countries mainly to
attend domestic needs related to intraregional foreign trade
supporting the commercial activity of Argentina in the region.
In Uruguay, Provincia is small due to its narrow business focus.
Its legal status is a casa financiera, which differs from a
banking license because it is not allowed to raise resident's
deposits and has much lower regulatory costs. However, in terms of
regulatory capital limits, Provincia has to comply with the rules
applied to banks (minimum of 8% of total regulatory capital
ratio).
Provincia is fully integrated with its head office's strategies,
corporate governance practices and risk management procedures. It
operates only through one office and reports to the International
Division of BAPRO. Provincia has a low profitability, low credit
risk, a highly liquid balance sheet and adequate capitalization
metrics. The branch's current business plan aims to improve its
profitability mainly through loan growth targeting Uruguayan and
Argentine companies and a more active pricing policy.
Provincia's FC IDR is above the Argentina's FC IDR of 'RD' which
reflects the current default status of certain debt securities
affected by a court ruling. However, in Fitch's view, Argentina's
payment capacity for its LC and FC debt securities recently issued
is 'B'. At the time of Argentina's local currency upgrade, Fitch
indicated the resumption of timely debt service on defaulted bonds
would lead to the upgrade of the FC IDR, most likely to the level
of the LC IDR. The government is moving ahead with the external
debt issuance to pay for the settlement with holdout creditors.
KEY RATING DRIVERS - SUPPORT RATING
The Support Rating of '5' reflects that, although possible,
external support for this bank, as with most Argentine banks,
cannot be relied upon given the ample economic imbalances. In
turn, the sovereign ability and willingness to support banks is
highly uncertain.
RATING SENSITIVITIES
IDRS
Provincia's IDRs are sensitive to changes in BAPRO's financial and
business profile.
RATING SENSITIVITIES - SUPPORT RATING
Changes in the SR of Provincia are unlikely in the foreseeable
future.
Fitch has assigned the following ratings:
Provincia Casa Financiera:
-- Foreign Currency Long-Term IDR 'B'; Outlook Stable;
-- Local Currency Long-Term IDR 'B'; Outlook Stable;
-- Support Rating '5'.
SANCOR SEGUROS: Fitch Assign 'B+' Insurer Fin'l. Strength Rating
----------------------------------------------------------------
Fitch Ratings has assigned a 'B+' Insurer Financial Strength (IFS)
rating to Sancor Seguros S.A. (Sancor Uruguay). The Rating Outlook
is Stable.
KEY RATING DRIVERS
Sancor Uruguay's ratings reflects the company's small position
within the Uruguayan insurance industry, a narrow product focus
concentrated in auto insurance, and higher operating leverage
compared to peers.
As of December 2015, Sancor Uruguay is positioned as a small
company (3.1% market share) in a highly competitive market, which
is dominated by the state owned insurance company, Banco de
Seguros del Estado (BSE). Sancor Uruguay's bulk of gross written
premiums (GWP) correspond to vehicle insurance, (53.4% of gross
written premiums and 73.9% of accrued retained premium).
Sancor Uruguay's leverage (liabilities/equity) presented a
significant increase during 2015, reaching 3.1x from 2.5x showed
last year, affected by heavy losses for the year and sustained
business growth. However, capital levels continue to exceed
solvency and regulatory capital requirements. Similar tendency was
showed by the operating leverage (accrued retained premium on
equity) increased up to 2.9x.
In Fitch's view, Sancor Uruguay benefits from operational
synergies as part of Grupo Sancor Seguros, a leader in vehicle
insurance and occupational hazards in Argentina.
As of December 2015, Sancor Uruguay recorded UYU65.6 million
losses, affecting its profitability ratios such as return on
average equity and return on average assets (ROAE -25.3% and ROAA-
1.7%). The negative net income was the result of an increase in
vehicle net losses, due to a greater reserve variation in a highly
competitive segment.
The investment portfolio remains concentrated in fixed income
securities with an adequate credit risk profile, mainly composed
by Uruguayan government bonds and Uruguayan financial
institutions. The short-term duration of its investments remains
aligned to liabilities, and presents as of December 2015 an
indicator of liquidity of 0.97x.
Reinsurance coverage includes a combination of proportional and
non-proportional protection defined by business lines, and is
provided by a diversified pool of reinsurers, adequately limiting
counterparty risk concentrations. As of December 2015, Sancor
Uruguay maximum claims exposure was equivalent to 5.8% of its
equity.
The company retains 100% of the risks of their main branch
(vehicles), while cession level remain above 50% in branches with
higher severity exposure such as property, credit, and
agricultural insurance.
RATING SENSITIVITIES
Key Upgrade Triggers: Factors that may lead to an upgrade include
a more diversified premium income mix, sustained improvement of
its main performance ratios, especially a combined ratio
consistently below 100%, and awhile leverage ratio that falls
below 3x.
Key Downgrade Triggers: Factors that may lead to a downgrade
include a sustained leverage ratio above 4x, increase premium
concentration in motor vehicle insurance, or sustained operative
losses, especially a combined materially above 100%.
***********
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 * * *