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/raid1/www/Hosts/bankrupt/TCRLA_Public/160616.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 Thursday, June 16, 2016, Vol. 17, No. 118 Headlines A R G E N T I N A ARGENTINA: Is Favorite Bet in Latin America, Loomis Sayles Says AVAL FEDERAL: Moody's Withdraws B3 Global Local Currency Rating B R A Z I L BRAZIL: Interim Gov't Proposes Spending Caps for at Least a Decade BRAZIL: Retail Sales Climb in April as Consumer Confidence Rises PARANAPANEMA: Moody's Withdraws Caa2 Corporate Family Rating C A Y M A N I S L A N D S ASUQ FINANCIAL: Commences Liquidation Proceedings GLOBAL FINANCE: Commences Liquidation Proceedings GOLDEN HANS: Appoints Official Liquidators LORA INVESTMENTS INT'L: Creditors' Proofs of Debt Due June 27 LORA INVESTMENTS MASTER: Creditors' Proofs of Debt Due June 27 MULTICAT MEXICO: Creditors' Proofs of Debt Due July 8 POWERKO LTD: Creditors' Proofs of Debt Due July 6 STRAKE INVESTMENTS: Creditors' Proofs of Debt Due July 6 J A M A I C A DIGICEL GROUP: Bids to Take Over Italian Firm JAMAICA: J$ Continues to Lose Value Against US Currency M E X I C O ALMACENADORA ACCEL: Moody's Repositions LT Mex. NSR to Ba1.mx COACALCO MUNICIPALITY: Moody's Repositions LC Issuer NSR to B3.mx GRUPO BIMBO: Moody's Keeps Baa2 Sr. Unsec. Reg. Bond/Debt Rating MBIA MEXICO: Moody's Repositions NSR to B3.mx X X X X X X X X X LATIN AMERICA: Foreign Investment Could Fall Up to 8% This Year - - - - - ================= A R G E N T I N A ================= ARGENTINA: Is Favorite Bet in Latin America, Loomis Sayles Says --------------------------------------------------------------- Aline Oyamada and Andre Soliani Costa at Bloomberg News report that Loomis Sayles is favoring bonds from Argentina and Colombia over notes from Mexico or Brazil, betting the smaller Latin American economies will post faster growth and higher returns. Yields on Argentina's $2.75 billion of 30-year bonds could drop 1.5 percentage point over the next two years as President Mauricio Macri implements his plan to rebuild the economy and restore investor confidence, according to Edgardo Sternberg, a money manager at Boston-based Loomis Sayles, which oversees $229 billion in bonds including $16.5 billion in emerging-market debt, reports Bloomberg News. "By the end of this administration, it should be at the stage that it could become investment grade," President Marci said in an interview, notes the report. According to Bloomberg News, Mr. Sternberg also said Colombia's local-currency bonds are attractive, with the peso poised to rally with higher oil prices. While Brazil's assets are among the world's best performers this year as investors speculated a new government would shore up the country's finances and restore growth, further gains are more likely to come on a long-term basis, according to the money manager, Bloomberg News relates. President Marci said the real may weaken toward 4 per dollar by the end of the year. President Marci sees Mexico's peso as fairly valued and says he has a neutral position on the country's debt, Bloomberg News discloses. Notes from hotel operator Grupo Posadas SAB are a good bet for investors seeking to take advantage of tourism from the U.S., he said, the report adds. * * * 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'. AVAL FEDERAL: Moody's Withdraws B3 Global Local Currency Rating --------------------------------------------------------------- Moody's Latin America Agente de Calificacion de Riesgo S.A. has withdrawn the B3 global local currency and Baa2.ar Argentine national scale insurance financial strength (IFS) ratings of Aval Federal SGR. RATINGS RATIONALE Moody's has withdrawn the ratings for its own business reasons. =========== B R A Z I L =========== BRAZIL: Interim Gov't Proposes Spending Caps for at Least a Decade ------------------------------------------------------------------ EFE News reports that the government of Brazil's interim president, Michel Temer, said it would propose to lawmakers a constitutional amendment to cap public spending increases for at least 10 years. Under the proposal, announced 10 days ago but unveiled by the Finance Ministry, growth in spending by the executive, legislative and judicial branches during a given fiscal year could not exceed the prior year's inflation rate, according to EFE News. The cap would not be allowed to be modified for the first 10 years after the amendment is enacted but could be eased over the following decade with congressional approval, the report notes. "The main goal of this measure is to ensure that growth in the public debt relative to gross domestic product (GDP), which has grown systematically, is stabilized and then begins to fall," Finance Minister Henrique Meirelles said, the report relays. Brazilian government expenditures grew faster than inflation between 1997 and 2015 and the situation was particularly acute between 2008 and 2015, he added, notes the report. "It's impossible to continue indefinitely spending more than what society is able to pay," Minister Meirelles said at a press conference, in which he said constant spending increases were one of the causes of Brazil's current severe recession, the report relays. Minister Meirelles made no direct reference to suspended President Dilma Rousseff, who was forced from office last month for up to six months while she undergoes an impeachment trial in the Senate for allegedly massaging budget numbers to minimize the deficit, says EFE News. 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. BRAZIL: Retail Sales Climb in April as Consumer Confidence Rises ---------------------------------------------------------------- David Biller at Bloomberg News reports that Brazil's retail sales rose in line with analysts' expectation in April as consumer confidence rebounded and economists forecast Latin America's largest economy may emerge from recession quicker than initially thought. Sales rose 0.5 percent in April after a 0.9 percent drop the prior month, the national statistics agency said, according to Bloomberg News. That was in line with the median estimate from 36 economists surveyed by Bloomberg. Sales plunged 6.7 percent in April versus the same month in 2015. Consumer confidence is showing signs of potential rebound as annual inflation slows and economists improve their forecasts for economic growth, Bloomberg News notes. Even so, sentiment remains near historic lows with unemployment on the rise, Bloomberg News relays. In the first quarter Latin America's largest economy shrank for the fifth straight period, dragged down by shrinking consumer spending in each, Bloomberg News notes. Sales of food, beverages and tobacco products at hypermarkets and supermarkets rose 1 percent in April, after a 1.4 percent decline the prior month, Bloomberg News says. Sales of apparel rose 3.7 percent. Consumer spending in the first quarter contracted by 1.7 percent, the sector's fifth straight decline, dragging the overall economy to fall 0.3 percent, Bloomberg News notes. Still, that was less than the median forecast from economists, who have since been boosting their calls, Bloomberg News relays. Brazil's economy contracted 3.8 percent in 2015 and economists surveyed by the central bank see it shrinking by less this year and resuming growth in 2017, Bloomberg News discloses. BNP Paribas revised its 2016 GDP forecast to a contraction of 3 percent, versus a prior forecast for a 4 percent decline, Bloomberg News notes. Itau Unibanco Holding SA also improved its forecast for 2016 GDP to a 3.5 percent contraction, from 4 percent previously, Bloomberg News says. Broad retail sales, which include cars, car parts, and construction materials, fell 1.4 percent from March, and 9.1 percent versus April last year, according to the statistics institute, Bloomberg News 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. PARANAPANEMA: Moody's Withdraws Caa2 Corporate Family Rating ------------------------------------------------------------ Moody's Investors Service has withdrawn Paranapanema's Caa2 corporate family rating for business reasons. RATINGS RATIONALE Moody's has withdrawn the rating for its own business reasons. Paranapanema S.A. is the sole refined copper producer in Brazil, with an annual smelting production capacity of 280,000 tons. The company is also a leading producer of semi-finished copper products, including wires, tubes, rolling, rods and bars. In the last twelve months ended March 2016, Paranapanema reported consolidated revenues of BRL 5.5 billion (USD 1.5 billion converted by the average foreign exchange rate for the period). The company has three industrial facilities in Brazil -- one in the state of Bahia, one in Espirito Santo and one in the state of Sao Paulo. The principal methodology used in this rating was Global Manufacturing Companies published in July 2014. ========================== C A Y M A N I S L A N D S ========================== ASUQ FINANCIAL: Commences Liquidation Proceedings ------------------------------------------------- On May 23, 2016, the sole shareholder of Asuq Financial Inc. 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: Takehide Hoshino Harbour Place, 4th Floor 103 South Church Street P.O. Box 10240 Grand Cayman KY1-1002 Cayman Islands Telephone: (345) 949 8599 Facsimile: (345) 949 4451 GLOBAL FINANCE: Commences Liquidation Proceedings ------------------------------------------------- On May 23, 2016, the sole shareholder of Global Finance Company (Cayman) Limited 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: Marc Daher Villa Daher Ferzol Bekaa Valley Lebanon e-mail: mark@dahercapital.com GOLDEN HANS: Appoints Official Liquidators ------------------------------------------ Cosimo Borrelli and Margot MacInnis were appointed as official liquidators of Golden Hans Restaurant Holdings Limited. The company commenced liquidation proceedings on May 18, 2016. The Liquidators can be reached at: Cosimo Borrelli Borrelli Walsh, Level 17, Tower 1 Admiralty Centre 18 Harcourt Road Hong Kong - and - Margot MacInnis Borrelli Walsh (Cayman) Limited Harbour Place, Ground Floor 103 South Church Street, Grand Cayman Cayman Islands LORA INVESTMENTS INT'L: Creditors' Proofs of Debt Due June 27 ------------------------------------------------------------- The creditors of Lora Investments International, Ltd. are required to file their proofs of debt by June 27, 2016, to be included in the company's dividend distribution. The company commenced liquidation proceedings on Dec. 17, 2015. The company's liquidator is: Mourant Ozannes Neil Greer Jo-Anne Maher Telephone: (345) 814-9255 Facsimile: (345) 949-4647 c/o Mourant Ozannes 94 Solaris Avenue, Camana Bay P.O. Box 1348 Grand Cayman KY1-1108 Cayman Islands LORA INVESTMENTS MASTER: Creditors' Proofs of Debt Due June 27 -------------------------------------------------------------- The creditors of Lora Investments Master Fund, Ltd. are required to file their proofs of debt by June 27, 2016, to be included in the company's dividend distribution. The company commenced liquidation proceedings on Dec. 17, 2015. The company's liquidator is: Mourant Ozannes Neil Greer Jo-Anne Maher Telephone: (345) 814-9255 Facsimile: (345) 949-4647 c/o Mourant Ozannes 94 Solaris Avenue, Camana Bay P.O. Box 1348 Grand Cayman KY1-1108 Cayman Islands MULTICAT MEXICO: Creditors' Proofs of Debt Due July 8 ----------------------------------------------------- The creditors of Multicat Mexico Ltd. are required to file their proofs of debt by July 8, 2016, to be included in the company's dividend distribution. The company commenced wind-up proceedings on April 15, 2016. The company's liquidators are: Kevin Poole James Trundle Willow House Grand Cayman P.O. Box 10233 171 Elgin Avenue Cayman Islands Telephone: 914-2270 Facsimile: 949-6021 POWERKO LTD: Creditors' Proofs of Debt Due July 6 ------------------------------------------------- The creditors of Powerko Ltd. are required to file their proofs of debt by July 6, 2016, to be included in the company's dividend distribution. The company commenced wind-up proceedings on May 16, 2016. The company's liquidators are: Helier Pirouet David Le Roux Citron 2004 Limited Telephone: + 44 1534 282276/ 01534 282345 Facsimile: + 44 1534 282400 23-25 Broad Street St Helier Jersey JE4 8ND STRAKE INVESTMENTS: Creditors' Proofs of Debt Due July 6 -------------------------------------------------------- The creditors of Strake Investments Ltd. are required to file their proofs of debt by July 6, 2016, to be included in the company's dividend distribution. The company commenced liquidation proceedings on May 18, 2016. The company's liquidator is: Maricorp Services Ltd. c/o Steven J. Barrie Telephone: 345-949-9710 P.O. Box 2075 Grand Cayman KY1-1105 Cayman Islands ============= J A M A I C A ============= DIGICEL GROUP: Bids to Take Over Italian Firm ---------------------------------------------- RJR News reports that Digicel Group is among bidders vying to take over Italian telecom assets being sold as part of a planned merger between two companies in the market. Digicel submitted a preliminary offer for assets being sold by Dutch telecoms company VimpelCom and Hong Kong-based CK Hutchison Holdings, according to RJR News. Bloomberg said the two companies are seeking regulatory approval to merge their Italian wireless carriers, the report notes. Swisscom and French phone group Illiad have also made offers. A move by Digicel to acquire the assets, which include wireless frequencies and about 5,000 towers, would mark a departure from its focus on emerging markets, the reports notes. According to Bloomberg sources, the European Commission is expected to provide feedback on the bids to Hutchison and VimpelCom within the next few days although a bidder would not be picked yet, the says. As reported in the Troubled Company Reporter-Latin America on May 27, 2016, Fitch Ratings has affirmed the ratings of Digicel Group Limited (DGL) and its subsidiaries Digicel Limited (DL) and Digicel International Finance Limited (DIFL), collectively referred to as 'Digicel' as follows. DGL -- Long-Term Issuer Default Rating (IDR) at 'B'; Stable Outlook; -- $US 2.0 billion 8.25% senior subordinated notes due 2020 at 'B-/RR5'; -- $US 1 billion 7.125% senior unsecured notes due 2022 at 'B-/RR5'. DL -- Long-Term IDR at 'B'; Stable Outlook; -- $US 250 million 7% senior notes due 2020 at 'B/RR4'; -- $US 1.3 billion 6% senior notes due 2021 at 'B/RR4'; -- $US 925 million 6.75% senior notes due 2023 at 'B/RR4'; DIFL -- Long-Term IDR at 'B'; Stable Outlook; -- Senior secured credit facility at 'B+/RR3'. The Rating Outlook is Stable. JAMAICA: J$ Continues to Lose Value Against US Currency ------------------------------------------------------- RJR News reports that despite recent a recent assurance from Finance Minister Audley Shaw that steps would be taken to stabilize the Jamaican dollar, it continues to lose value against the US currency. At the end of trading on Monday, June 13, the average selling rate for the US currency was one cent shy of J$126, according to RJR News. The report notes that the Finance Minister recently stated that he had asked the Central Bank to intervene in the market. However, Dr. Peter Phillips, Opposition Spokesman on Finance, is maintaining that the continued slide in the currency is a sign of a lack of confidence in the economy, the report relays. Meanwhile, it's costing $96.74 for the Canadian dollar and $179.58 cents for the pound sterling, the report adds. * * * As reported in the Troubled Company Reporter-Latin America on Feb. 15, 2016, Fitch Ratings has upgraded Jamaica's Long-term foreign and local currency IDRs to 'B' from 'B-' and revised the Rating Outlooks to Stable from Positive. In addition, Fitch upgraded Jamaica's senior unsecured Foreign- and Local-Currency bonds to 'B' from 'B-'. The Country Ceiling has been affirmed at 'B' and the Short- Term Foreign-Currency IDR affirmed at 'B'. =========== M E X I C O =========== ALMACENADORA ACCEL: Moody's Repositions LT Mex. NSR to Ba1.mx ------------------------------------------------------------- Moody's de Mexico has repositioned the national scale ratings (NSRs) of 16 Mexican banks and other financial institutions in conjunction with the recalibration of the Mexican national rating scale. In addition, to enhance transparency of the meaning of NSRs and to minimize the chances they will be misinterpreted, the long-and/or short-term GSRs of 3 issuers, the corresponding NSRs of which are already public, are being published for the first time. NSRs, which provide a measure of relative creditworthiness within a single country, are derived from GSRs using country-specific maps, or correspondences. The adoption of a revised correspondence between Moody's global scale ratings and the Mexican national scale follows implementation of Moody's updated methodology "Mapping National Scale Ratings from Global Scale Ratings" at: https://www.moodys.com/researchdocumentcontentpage.aspx?docid=PBC_ 189644 The revised correspondence for Mexican NSRs is available in the updated compendium, published June 13, of National Scale Rating Maps By Country at: http://v3.moodys.com/viewresearchdoc.aspx?docid=PBC_190457 in Spanish and http://v3.moodys.com/viewresearchdoc.aspx?docid=PBC_190456 in English. The new methodology mirrors that implemented by Moody's Investors Service in other jurisdictions last month. For more information, please see "Moody's publishes updated methodology for national scale ratings" https://www.moodys.com/research/Moodys-publishes-updated- methodology-for-national-scale-ratings--PR_348579 Moody's Investors Service's updated NSR methodology is available in English at: https://www.moodys.com/researchdocumentcontentpage.aspx?docid=PBC_ 189032 With approximately 170 rated fundamental issuers in Mexico, the new map has been designed using the modified approach, whereby the map design is adjusted to reflect the distribution of fundamental ratings in the country in order to ensure adequate opportunity for differentiation where ratings are most highly concentrated. At the same time, however, the modified approach also seeks to maintain the stability of the map design in order to limit the volatility of NSRs derived from it. Structured finance ratings are not taken into consideration in the determination of the map design. In the new national scale map for Mexico, the anchor point, or the lowest GSR that can map to Aaa.mx, has been raised to A3, which is equal to the sovereign bond rating, from the previous level of Baa1. The revised map provides the ability to differentiate on the national scale between issuers rated A3 and above and those rated Baa1 on the global scale, which together account for more than 20% of fundamental issuers. Although there is a meaningful difference in the creditworthiness of these two groups of issuers, as reflected in their global scale ratings, under the previous map all were eligible to receive Aaa.mx NSRs. In addition, in order to clarify the meaning of NSRs, overlap -- where two GSRs can correspond to the same NSR -- has been eliminated from the Mexican national scale map, so every NSR maps back to just one GSR (with the exception of Aaa.mx). As a result of these changes, GSRs of B2 and above will in some cases correspond to lower NSRs on the Mexican scale than they did previously, GSRs of Caa1 and below may correspond to higher NSRs, while GSRs of B3 may correspond to either higher or lower NSRs. Consequently, approximately 20% of Mexican fundamental issuer's primary long-term NSRs are being repositioned lower and 2% are being repositioned higher. Certain short-term and other NSRs may be affected for these and other issuers as well. In addition, approximately 7% of the NSRs assigned to Mexican structured finance transactions are being repositioned lower and 7% are being repositioned higher. Almost all ratings changes are just one notch. The repositioned NSRs of individual issuers do not signify a change in credit risk, since the GSRs for these issuers remain unchanged. As a result of the recalibration, the level of risk associated with a particular Mexican NSR level (e.g. B2.mx) has changed in some cases. NSRs have no inherent absolute meaning in terms of default risk or expected loss; they are ordinal rankings of creditworthiness relative to other domestic issuers within a given country. However, a historical probability of default and/or expected loss consistent with a given NSR can be inferred from the GSR to which it maps back at that particular point in time. As a result, both the probability of default and the expected loss associated with an NSR may change if and when a country's national scale is remapped. ISSUERS AND RATINGS AFFECTED These ratings were repositioned: -- Acciones y Valores Banamex Casa de Bolsa, S.A. Long-term Mexican National Scale issuer rating: to Aa2.mx, from Aa1.mx derived from a Baa2 GSR -- Almacenadora Accel, S.A. Long-term Mexican National Scale issuer rating: to Ba1.mx, from Baa3.mx derived from a B2 GSR Short-term Mexican National Scale issuer rating: to MX-4, from MX- 3 -- Arrendadora y Factor Banorte, S.A. de C.V. Long-term Mexican National Scale issuer rating: to Aa1.mx, on review for downgrade, from Aaa.mx, on review for downgrade, derived from a Baa1 GSR Long-term Mexican National Scale senior unsecured MTN debt program rating: to Aa1.mx, on review for downgrade from Aaa.mx, on review for downgrade, derived from a (P) Baa1 GSR -- Asigna, Compensacion y Liquidacion Long-term Mexican National Scale clearing counterparty rating: to Aa1.mx, from Aaa.mx derived from a Baa1 GSR -- Banco Azteca, S.A. Short-term Mexican National Scale deposit rating: to MX-1, from MX-2 -- Banco del Bajio, S.A. Long-term Mexican National Scale deposit rating: to Aa3.mx, from Aa2.mx derived from a Baa3 GSR -- Banco Interacciones, S.A. Short-term Mexican National Scale deposit rating: to MX-1, from MX-2 -- Banco Mercantil del Norte, S.A. Long-term Mexican National Scale subordinated debt rating: to Aa2.mx, on review for downgrade from Aa1.mx, on review for downgrade (BANORTE 08, BANORTE 08-2, BANORTE 09, BANORTE 12), derived from a Baa2 GSR. Long-term Mexican National Scale subordinated MTN debt program rating: to Aa2.mx, on review for downgrade from Aa1.mx, on review for downgrade, derived from a (P) Baa2 GSR Long-term Mexican National Scale junior subordinated debt rating: to Aa3.mx (hyb), on review for downgrade from Aa2.mx (hyb), on review for downgrade (BANORTE 08U), derived from a Baa3 (hyb) GSR Long-term Mexican National Scale junior subordinated MTN debt program rating: to Aa3.mx, on review for downgrade from Aa2.mx, on review for downgrade, derived from a (P) Baa3 GSR -- Bank of Tokyo-Mitsubishi UFJ (Mexico), S.A. Long-term Mexican National Scale deposit rating: to Aa2.mx, from Aa1.mx derived from a Baa2 GSR -- Barclays Bank Mexico, S.A. Long-term Mexican National Scale deposit rating: to Aa3.mx, from Aa2.mx derived from a Baa3 GSR -- Barclays Capital Casa de Bolsa, S.A. de C.V. Long-term Mexican National Scale issuer rating: to Aa3.mx, from Aa2.mx derived from a Baa3 GSR -- Casa de Bolsa Santander, S.A. de C.V. Long-term Mexican National Scale issuer rating: to Aa1.mx, on review for downgrade from Aaa.mx, on review for downgrade, derived from a Baa1 GSR -- Financiera Bepensa S.A. de C.V. SOFOM E.N.R. Long-term Mexican National Scale issuer rating: to Ba1.mx, from Baa3.mx derived from a B2 GSR Short-term Mexican National Scale issuer rating: to MX-4, from MX-3 -- HSBC Mexico, S.A. Long-term Mexican National Scale junior subordinated MTN debt program rating: to Aa1.mx, on review for downgrade from Aaa.mx, on review for downgrade, derived from a (P) Baa1 GSR -- Scotia Inverlat Casa de Bolsa, S.A. de C.V. Long-term Mexican National Scale issuer rating: to Aa1.mx, on review for downgrade from Aaa.mx, on review for downgrade derived from a Baa1 GSR -- Volkswagen Bank, S.A. Short-term Mexican National Scale deposit rating: to MX-1, from MX-2 These ratings were assigned: -- Bank of Tokyo-Mitsubishi UFJ (Mexico), S.A. Long-term global local currency deposit rating: Baa2, stable outlook Short-term global local currency deposit rating: Prime-2 Long-term foreign currency deposit rating: Baa2, stable outlook Short-term foreign currency deposit rating: Prime-2 -- Ford Credit de Mexico S.A. de C.V., SOFOM Short-term global local currency senior unsecured debt rating: Prime-2 Short-Term Debt Rating Senior Unsecured: (P) Prime-2 -- NR Finance de Mexico, S.A. de C.V. SOFOM, ER Long-term global local currency senior unsecured debt rating: A3, stable outlook Long-term senior unsecured MTN debt program rating: (P) A3 Short-term global local currency senior unsecured debt rating: Prime-2 Short-term global local currency debt rating senior unsecured: (P) Prime-2 These entities rated by Moody's de MÇxico were unaffected by this rating action: AF Banregio, S.A. de C.V. SOFOM, BBVA Bancomer, S.A., Banco Nacional de Comercio Exterior, S.N.C., Banco Nacional de Mexico, S.A., Banco Nacional de Obras y Servicios Publicos, S.N.C., Banco Regional de Monterrey, S.A., Banco Santander (Mexico), S.A., Scotiabank Inverlat S.A., Casa de Bolsa BBVA Bancomer S.A. de C.V., Caterpillar Credito S.A. de C.V.,SOFOM,E.N.R., CI Casa de Bolsa, S.A. de C.V., Deutsche Bank Mexico, S.A., Deutsche Securities Mexico, S.A. de C.V., Hipotecaria Nacional S.A. de C.V., HSBC Casa de Bolsa, S.A. de C.V, Instituto para la Proteccion al Ahorro Bancario, Nacional Financiera, S.N.C., Santander Consumo, S.A. de C.V., SOFOM, E.R., SGFP Mexico, S. de R.L. de C.V., Volkswagen Leasing, S.A. de C.V., Value, S.A. de C.V., Casa de Bolsa. RATING RATIONALE NSRs are assigned by applying the published correspondence from GSRs. Where a single GSR maps to multiple NSRs, rating committees assigned higher or lower NSRs to individual issuers and debts depending on their relative credit position within the same GSR category, using the same methodologies as were used to determine the GSRs themselves. Bank of Tokyo-Mitsubishi UFJ (Mexico) The Baa2 long-term global local and foreign currency deposit ratings assigned to Bank of Tokyo-Mitsubishi UFJ (Mexico) S.A. (BTMU Mexico) are based on the bank's ba2 baseline credit assessment (BCA), coupled with Moody's assessment that there is a very high probability that the bank would receive affiliate support from its parent, in cases of stress. BTMU Mexico is a subsidiary of The Bank of Tokyo-Mitsubishi UFJ, Ltd. (BTMU, deposits A1/senior unsecured A1 stable, BCA a3). The bank's short-term global local and foreign currency deposit ratings of Prime-2 are based on the bank's Baa2 global scale deposit ratings, in line with Moody's global scale long- to short- term ratings map. Ford Credit de Mexico S.A. de C.V., SOFOM The global scale short-term Prime-2 senior unsecured debt rating assigned to Ford Credit de Mexico S.A. de C.V., SOFOM (Ford Credit Mexico) reflects the full, irrevocable and unconditional guarantee provided by its parent, Ford Motor Credit Company LLC (senior unsecured Baa2, stable). NR Finance de Mexico, S.A. de C.V. SOFOM, ER The A3/Prime-2 long- and short-term global local currency senior unsecured ratings and the (P) A3 long-term senior unsecured MTN debt program rating assigned to NR Finance de Mexico, S.A. de C.V. SOFOM, ER (NR Finance) reflect the full, irrevocable and unconditional guarantee provided by its parent company Nissan Motors Acceptance Corporation (NMAC, senior unsecured A3, stable). WHAT COULD CHANGE THE RATINGS -- UP AND DOWN The NSRs would face upward or downward pressure if their corresponding GSRs are upgraded or downgraded, unless this is in conjunction with a sovereign rating action that results in another recalibration of the Mexican national scale with an offsetting impact on NSRs. In addition, the NSRs may be repositioned upwards (downwards) if Mexico's sovereign is downgraded (upgraded) and the map is revised accordingly, but the corresponding GSRs have not changed as a result of the sovereign action. Because of the higher granularity of national scales, NSRs may also face pressure due to changes in creditworthiness that are not sufficient to cause a change in the corresponding GSR, measured using the same methodologies used to determine the GSR. METHODOLOGIES USED The principal methodology used in rating Banco Mercantil del Norte, S.A., HSBC Mexico, S.A., Banco Azteca, S.A., Banco Interacciones, S.A., Barclays Bank Mexico, S.A., Bank of Tokyo- Mitsubishi UFJ (Mexico), S.A, Banco del Bajio, S.A. and Volkswagen Bank, S.A., was Banks published in January 2016. The principal methodology used in rating Acciones y Valores Banamex Casa de Bolsa, S.A., Casa de Bolsa Santander, S.A. de C.V., Scotia Inverlat Casa de Bolsa, S.A. de C.V. and Barclays Capital Casa de Bolsa, S.A. de C.V., was Global Securities Industry Methodology published in May 2013. The principal methodology used in rating Asigna, Compensacion y Liquidacion was Clearing Houses published in January 2016. The principal methodology used in rating Arrendadora y Factor Banorte, S.A. de C.V., Almacenadora Accel, S.A., Financiera Bepensa S.A. de C.V. SOFOM E.N.R, Ford Credit de Mexico S.A. de C.V., SOFOM and NR Finance de Mexico, S.A. de C.V. SOFOM, ENR was Finance Companies published in October 2015. Moody's National Scale Credit Ratings (NSRs) are intended as relative measures of creditworthiness among debt issues and issuers within a country, enabling market participants to better differentiate relative risks. NSRs differ from Moody's global scale credit ratings in that they are not globally comparable with the full universe of Moody's rated entities, but only with NSRs for other rated debt issues and issuers within the same country. NSRs are designated by a ".nn" country modifier signifying the relevant country, as in ".za" for South Africa. For further information on Moody's approach to national scale credit ratings, please refer to Moody's Credit rating Methodology published in May 2016 entitled "Mapping National Scale Ratings from Global Scale Ratings". While NSRs have no inherent absolute meaning in terms of default risk or expected loss, a historical probability of default consistent with a given NSR can be inferred from the GSR to which it maps back at that particular point in time. For information on the historical default rates associated with different global scale rating categories over different investment horizons, please see: https://www.moodys.com/researchdocumentcontentpage.aspx?docid=PBC_ 189530 COACALCO MUNICIPALITY: Moody's Repositions LC Issuer NSR to B3.mx ----------------------------------------------------------------- Moody's de Mexico has repositioned the national scale ratings (NSRs) of 5 local governments and 11 enhanced loans in conjunction with the recalibration of the Mexican national rating scale. NSRs, which provide a measure of relative creditworthiness within a single country, are derived from global scale ratings (GSRs) using country-specific maps, or correspondences. The adoption of a revised correspondence between Moody's global scale ratings and the Mexican national scale follows implementation of Moody's updated methodology "Mapping National Scale Ratings from Global Scale Ratings" in Mexico at: https://www.moodys.com/researchdocumentcontentpage.aspx?docid=PBC_ 189644 The revised correspondence for Mexican NSRs is available in the updated compendium, published June 13, of National Scale Rating Maps By Country at: http://v3.moodys.com/viewresearchdoc.aspx?docid=PBC_190457 in Spanish and http://v3.moodys.com/viewresearchdoc.aspx?docid=PBC_190456 in English. The new methodology mirrors that implemented by Moody's Investors Service in other jurisdictions last month. For more information, please see "Moody's publishes updated methodology for national scale ratings: https://www.moodys.com/research/Moodys-publishes-updated- methodology-for-national-scale-ratings--PR_348579 Moody's Investors Service's updated NSR methodology is available in English at: https://www.moodys.com/researchdocumentcontentpage.aspx?docid=PBC_ 189032 With approximately 170 rated fundamental issuers in Mexico, the new map has been designed using the modified approach, whereby the map design is adjusted to reflect the distribution of fundamental ratings in the country in order to ensure adequate opportunity for differentiation where ratings are most highly concentrated. At the same time, however, the modified approach also seeks to maintain the stability of the map design in order to limit the volatility of NSRs derived from it. Structured finance ratings are not taken into consideration in the determination of the map design. In the new national scale map for Mexico, the anchor point, or the lowest GSR that can map to Aaa.mx, has been raised to A3, which is equal to the sovereign bond rating, from the previous level of Baa1. The revised map provides the ability to differentiate on the national scale between issuers rated A3 and above and those rated Baa1 on the global scale, which together account for more than 20% of fundamental issuers. Although there is a meaningful difference in the creditworthiness of these two groups of issuers, as reflected in their global scale ratings, under the previous map all were eligible to receive Aaa.mx NSRs. In addition, in order to clarify the meaning of NSRs, overlap -- where two GSRs can correspond to the same NSR -- has been eliminated from the Mexican national scale map, so every NSR maps back to just one GSR (with the exception of Aaa.mx). As a result of these changes, GSRs of B2 and above will in some cases correspond to lower NSRs on the Mexican scale than they did previously, GSRs of Caa1 and below may correspond to higher NSRs, while GSRs of B3 may correspond to either higher or lower NSRs. Consequently, approximately 20% of Mexican fundamental issuer's primary long-term NSRs are being repositioned lower and 2% are being repositioned higher. Certain short-term and other NSRs may be affected for these and other issuers as well. Almost all ratings changes are just one notch. The repositioned NSRs of individual issuers do not signify a change in credit risk, since the GSRs for these issuers remain unchanged. As a result of the recalibration, the level of risk associated with a particular Mexican NSR level (e.g. B2.mx) has changed in some cases. NSRs have no inherent absolute meaning in terms of default risk or expected loss; they are ordinal rankings of creditworthiness relative to other domestic issuers within a given country. However, a historical probability of default and/or expected loss consistent with a given NSR can be inferred from the GSR to which it maps back at that particular point in time. As a result, both the probability of default and the expected loss associated with an NSR may change if and when a country's national scale is remapped. ISSUERS AND RATINGS AFFECTED The specific rating actions taken are: 1) Moody's changed the issuer ratings of the following issuers on Mexico's national scale. -- Coacalco, Municipality of: local currency issuer rating repositioned to B3.mx from Caa1.mx -- Guadalupe, Municipality of: local currency issuer rating repositioned to Ba1.mx from Baa3.mx -- Mexicali, Municipality of: local currency issuer rating repositioned to Ba3.mx from Ba2.mx -- Ramos Arizpe, Municipality of: local currency issuer rating repositioned to A3.mx from Baa1.mx -- Zacatecas, Municipality of: local currency issuer rating repositioned to Baa2.mx from Baa1.mx 2) Moody's changed the debt ratings of these enhanced loans on Mexico's national scale. -- Comision Estatal se Servicios Publicos de Tijuana (CESPT): MXN280 million enhanced loan with Banorte local currency debt rating repositioned to A2.mx from A1.mx -- Chihuahua, State of: MXN 4,500 million enhanced loan with Interacciones local currency debt rating repositioned to Aa1.mx from Aaa.mx -- Chihuahua, State of: MXN 3.000 million enhanced loan with Multiva local currency debt rating repositioned to Aa1.mx from Aaa.mx -- Chihuahua, State of: MXN 1,716 million enhanced loan with BBVA Bancomer local currency debt rating repositioned to Aa1.mx from Aaa.mx -- Chihuahua, State of: MXN 1,380 million enhanced loan with BBVA Bancomer local currency debt rating repositioned to Aa1.mx from Aaa.mx -- Chihuahua, State of: MXN 2,028 million enhanced loan with BBVA Bancomer local currency debt rating repositioned to Aa1.mx from Aaa.mx -- Chihuahua, State of: MXN 1,995 million enhanced loan with Banorte local currency debt rating repositioned to Aa1.mx from Aaa.mx -- Chihuahua, State of: MXN 1,000 million enhanced loan with Santander local currency debt rating repositioned to Aa1.mx from Aaa.mx -- Chihuahua, State of: MXN 1,320 million enhanced loan with Banorte local currency debt rating repositioned to Aa1.mx from Aaa.mx -- Nuevo Leon, State of: MXN 2,423 million bonds local currency debt rating repositioned to Aa1.mx from Aaa.mx -- Veracruz, State of - Municipal Lending Program of: MXN 1,730 million with Banobras local currency debt rating repositioned to Aa3.mx from Aa2.mx RATING RATIONALE NSRs are assigned by applying the published correspondence from GSRs. Where a single GSR maps to multiple NSRs, rating committees assigned higher or lower NSRs to individual issuers and debts depending on their relative credit position within the same GSR category, using the same methodologies as were used to determine the GSRs themselves. WHAT COULD CHANGE THE RATINGS -- UP AND DOWN The NSRs would face upward or downward pressure if their corresponding GSRs are upgraded or downgraded, unless this is in conjunction with a sovereign rating action that results in another recalibration of the Mexican national scale with an offsetting impact on NSRs. In addition, the NSRs may be repositioned upwards (downwards) if Mexico's sovereign is downgraded (upgraded) and the map is revised accordingly, but the corresponding GSRs have not changed as a result of the sovereign action. Because of the higher granularity of national scales, NSRs may also face pressure due to changes in creditworthiness that are not sufficient to cause a change in the corresponding GSR, measured using the same methodologies used to determine the GSR. METHODOLOGIES USED The principal methodology used in rating the municipalities of Ramos Arizpe, Zacatecas, Guadalupe, Mexicali and Coacalco was Regional and Local Governments published in January 2013. The principal methodology used in rating Comision Estatal de Servicios Pub de Tijuana was Government-Related Issuers published in October 2014. The principal methodology used in rating the states of Chihuahua, Nuevo Leon and Veracruz was Rating Methodology for Enhanced Municipal and State Loans in Mexico published in June 2014. The period of time covered in the financial information used to determine state, municipality or government related issuer rating is between 01/01/2011 and 12/31/2015. Moody's National Scale Credit Ratings (NSRs) are intended as relative measures of creditworthiness among debt issues and issuers within a country, enabling market participants to better differentiate relative risks. NSRs differ from Moody's global scale credit ratings in that they are not globally comparable with the full universe of Moody's rated entities, but only with NSRs for other rated debt issues and issuers within the same country. NSRs are designated by a ".nn" country modifier signifying the relevant country, as in ".za" for South Africa. While NSRs have no inherent absolute meaning in terms of default risk or expected loss, a historical probability of default consistent with a given NSR can be inferred from the GSR to which it maps back at that particular point in time. For information on the historical default rates associated with different global scale rating categories over different investment horizons, please see: https://www.moodys.com/researchdocumentcontentpage.aspx?docid=PBC_ 189530 GRUPO BIMBO: Moody's Keeps Baa2 Sr. Unsec. Reg. Bond/Debt Rating ---------------------------------------------------------------- Moody's de Mexico has repositioned the national scale ratings (NSRs) of 3 Mexican non-financial corporates in conjunction with the recalibration of the Mexican national rating scale. In addition, to enhance transparency of the meaning of NSRs and to minimize the chances they will be misinterpreted, the long-and/or short-term global scale ratings of 3 issuers, the corresponding NSRs of which are already public, are being published for the first time. NSRs, which provide a measure of relative creditworthiness within a single country, are derived from global scale ratings (GSRs) using country-specific maps, or correspondences. The adoption of a revised correspondence between Moody's global scale ratings and the Mexican national scale follows implementation of Moody's updated methodology "Mapping National Scale Ratings from Global Scale Ratings" in Mexico on www.moodys.com.mx at: https://www.moodys.com/researchdocumentcontentpage.aspx?docid=PBC_ 189644 The revised correspondence for Mexican NSRs is available in the updated compendium, published June 13, of National Scale Rating Maps By Country at: https://www.moodys.com/researchdocumentcontentpage.aspx?docid=PBC_ 190409 in Spanish and http://v3.moodys.com/viewresearchdoc.aspx?docid=PBC_190400 in English. The new methodology mirrors that implemented by Moody's Investors Service in other jurisdictions last month. For more information, please see "Moody's publishes updated methodology for national scale ratings" https://www.moodys.com/research/Moodys-publishes-updated- methodology-for-national-scale-ratings--PR_348579 Moody's Investors Service's updated NSR methodology is available in English at: https://www.moodys.com/researchdocumentcontentpage.aspx?docid=PBC_ 189032 With approximately 170 rated fundamental issuers in Mexico, the new map has been designed using the modified approach, whereby the map design is adjusted to reflect the distribution of fundamental ratings in the country in order to ensure adequate opportunity for differentiation where ratings are most highly concentrated. At the same time, however, the modified approach also seeks to maintain the stability of the map design in order to limit the volatility of NSRs derived from it. Structured finance ratings are not taken into consideration in the determination of the map design. In the new national scale map for Mexico, the anchor point, or the lowest GSR that can map to Aaa.mx, has been raised to A3, which is equal to the sovereign bond rating, from the previous level of Baa1. The revised map provides the ability to differentiate on the national scale between issuers rated A3 and above and those rated Baa1 on the global scale, which together account for more than 20% of fundamental issuers. Although there is a meaningful difference in the creditworthiness of these two groups of issuers, as reflected in their global scale ratings, under the previous map all were eligible to receive Aaa.mx NSRs. In addition, in order to clarify the meaning of NSRs, overlap -- where two GSRs can correspond to the same NSR -- has been eliminated from the Mexican national scale map, so every NSR maps back to just one GSR (with the exception of Aaa.mx). As a result of these changes, GSRs of B2 and above will in some cases correspond to lower NSRs on the Mexican scale than they did previously, GSRs of Caa1 and below may correspond to higher NSRs, while GSRs of B3 may correspond to either higher or lower NSRs. Consequently, approximately 20% of Mexican fundamental issuer's primary long-term NSRs are being repositioned lower, and 2% are being repositioned higher. Certain short-term and other NSRs may be affected for these and other issuers as well. In addition, approximately 7% of the NSRs assigned to Mexican structured finance transactions are being repositioned lower, and 7% are being repositioned higher. Almost all ratings changes are just one notch. The repositioned NSRs of individual issuers do not signify a change in credit risk, since the GSRs for these issuers remain unchanged. As a result of the recalibration, the level of risk associated with a particular Mexican NSR level (e.g. B2.mx) has changed in some cases. NSRs have no inherent absolute meaning in terms of default risk or expected loss; they are ordinal rankings of creditworthiness relative to other domestic issuers within a given country. However, a historical probability of default and/or expected loss consistent with a given NSR can be inferred from the GSR to which it maps back at that particular point in time. As a result, both the probability of default and the expected loss associated with an NSR may change if and when a country's national scale is remapped. ISSUERS AND RATINGS AFFECTED Repositioned: Issuer: Grupo Televisa, S.A.B. Issuer Rating (National Scale Ratings): Repositioned to Aa1.mx from Aaa.mx Issuer Rating (Global Scale Ratings): Unchanged at Baa1 Senior Unsecured Regular Bond/Debenture (National Scale Ratings): Repositioned to Aa1.mx from Aaa.mx Senior Unsecured Regular Bond/Debenture (Global Scale Ratings): Unchanged at Baa1 Issuer: Industrias Penoles S.A.B. de C.V. Senior Unsecured Regular Bond/Debenture due 2020 (National Scale Ratings): Repositioned to Aa3.mx from Aa2.mx Senior Unsecured Regular Bond/Debenture due 2020 (Global Scale Ratings): Unchanged at Baa3 Senior Unsecured Regular Bond/Debenture due 2022 (National Scale Ratings): Repositioned to Aa3.mx from Aa2.mx Senior Unsecured Regular Bond/Debenture due 2022 (Global Scale Ratings): Unchanged at Baa3 Issuer: Grupo Bimbo, S.A.B. de C.V. Senior Unsecured Regular Bond/Debenture due 2018 (National Scale Ratings): Repositioned to Aa2.mx from Aa1.mx Senior Unsecured Regular Bond/Debenture due 2018 (Global Scale Ratings): Unchanged at Baa2 Assignments: Issuer: Minera Frisco, S.A.B. De C.V. Senior Unsecured Short Term Medium-Term Note Program (Global Scale Ratings): Assigned (P)NP Unchanged: Senior Unsecured Short Term Medium-Term Note Program (National Scale Ratings): Unchanged at MX-4 Senior Unsecured Medium-Term Note Program (National Scale Ratings): Unchanged at Caa1.mx Senior Unsecured Medium-Term Note Program (Global Scale Ratings): Unchanged at (P)Caa1 Issuer: Grupo Minsa, S.A.B. de C.V. Senior Unsecured Commercial Paper (Global Scale Ratings): Assigned NP Senior Unsecured Commercial Paper (National Scale Ratings): Unchanged at MX-2 Issuer: Petroleos Mexicanos Senior Unsecured Commercial Paper (Global Scale Ratings): Assigned P-3 Senior Unsecured Commercial Paper (National Scale Ratings): Unchanged at MX-1 RATINGS RATIONALE NSRs are assigned by applying the published correspondence from GSRs. Where a single GSR maps to multiple NSRs, rating committees assigned higher or lower NSRs to individual issuers and debts depending on their relative credit position within the same GSR category, using the same methodologies as were used to determine the GSRs themselves. Moody's published the global scale short-term prime rating of P-3 for Petroleos Mexicanos, in line with its global scale long-term Baa3 rating. Issuers rated Prime-3 have an acceptable ability to repay short-term obligations. Moody's published the global scale short-term rating of Provisional Not Prime ((P)NP) for Minera Frisco, S.A.B. de C.V., in line with its global scale long-term B3 rating. Issuers rated Not Prime do not fall within any of the Prime rating categories. Moody's published the global scale short-term rating of Not Prime (NP) for Grupo Minsa, S.A.B. de C.V., in line with its global scale long-term Ba3 rating. Issuers rated Not Prime do not fall within any of the Prime rating categories. WHAT COULD CHANGE THE RATINGS -- UP AND DOWN The NSRs would face upward or downward pressure if their corresponding GSRs are upgraded or downgraded, unless this is in conjunction with a sovereign rating action that results in another recalibration of the Mexican national scale with an offsetting impact on NSRs. In addition, the NSRs may be repositioned upwards (downwards) if Mexico's sovereign is downgraded (upgraded) and the map is revised accordingly, but the corresponding GSRs have not changed as a result of the sovereign action. Because of the higher granularity of national scales, NSRs may also face pressure due to changes in creditworthiness that are not sufficient to cause a change in the corresponding GSR, measured using the same methodologies used to determine the GSR. METHODOLOGIES USED The principal methodology used in rating Grupo Televisa, S.A.B. was Global Telecommunications Industry published in December 2010. The principal methodology used in rating Industrias Penoles S.A.B. de C.V. and Minera Frisco, S.A.B. De C.V. was Global Mining Industry published in August 2014. The principal methodology used in rating Grupo Bimbo, S.A.B. de C.V. and Grupo Minsa, S.A.B. de C.V. was Global Packaged Goods published in June 2013. The principal methodology used in rating Petroleos Mexicanos was Global Integrated Oil & Gas Industry published in April 2014 and other methodologies used include the Government-Related Issuers published in October 2014. The period of time covered in the financial information used to determine Grupo Bimbo, S.A.B. de C.V.'s rating is between 12/31/2011 and 12/31/2015 (source: audited financial statements). The period of time covered in the financial information used to determine Grupo Televisa, S.A.B.'s rating is between 12/31/2011 and 12/31/2015 (source: audited financial statements). The period of time covered in the financial information used to determine Industrias Penoles, S.A.B. de C.V.'s rating is between 12/31/2011 and 12/31/2015 (source: audited financial statements). The period of time covered in the financial information used to determine Minera Frisco, S.A.B. de C.V.'s rating is between 12/31/2012 and 12/31/2015 (source: audited financial statements). The period of time covered in the financial information used to determine Grupo Minsa, S.A.B. de C.V.'s rating is between 12/31/2011 and 12/31/2015 (source: audited financial statements). The period of time covered in the financial information used to determine Petroleos Mexicanos' rating is between 12/31/2011 and 12/31/2015 (source: audited financial statements). 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. While NSRs have no inherent absolute meaning in terms of default risk or expected loss, a historical probability of default consistent with a given NSR can be inferred from the GSR to which it maps back at that particular point in time. For information on the historical default rates associated with different global scale rating categories over different investment horizons, please see: https://www.moodys.com/researchdocumentcontentpage.aspx?docid=PBC_ 189530 MBIA MEXICO: Moody's Repositions NSR to B3.mx --------------------------------------------- Moody's de Mexico has repositioned the national scale ratings (NSRs) of three Mexican insurers in conjunction with the recalibration of the Mexican national rating scale. NSRs, which provide a measure of relative creditworthiness within a single country, are derived from Global Scale Ratings (GSRs) using country-specific maps, or correspondences. The adoption of a revised correspondence between Moody's global scale ratings and the Mexican national scale follows implementation of Moody's updated methodology "Mapping National Scale Ratings from Global Scale Ratings" in Mexico https://www.moodys.com/researchdocumentcontentpage.aspx?docid=PBC_ 189644 The revised correspondence for Mexican NSRs is available in the updated compendium, published June 13, of National Scale Rating Maps By Country at: http://v3.moodys.com/viewresearchdoc.aspx?docid=PBC_190457 in Spanish and http://v3.moodys.com/viewresearchdoc.aspx?docid=PBC_190456 in English. The new methodology mirrors that implemented by Moody's Investors Service last month. For more information, please see "Moody's publishes updated methodology for national scale ratings" https://www.moodys.com/research/Moodys-publishes-updated- methodology-for-national-scale-ratings--PR_348579 Moody's Investors Service's updated NSR methodology is available in English at: https://www.moodys.com/researchdocumentcontentpage.aspx?docid=PBC_ 189032 With approximately 170 rated fundamental issuers in Mexico, the new map has been designed using the modified approach, whereby the map design is adjusted to reflect the distribution of fundamental ratings in the country in order to ensure adequate opportunity for differentiation where ratings are most highly concentrated, At the same time, however, the modified approach also seeks to maintain the stability of the map design in order to limit the volatility of NSRs derived from it. Structured finance ratings are not taken into consideration in the determination of the map design. In the new national scale map for Mexico, the anchor point, or the lowest GSR that can map to Aaa.mx, has been raised to A3, which is equal to the sovereign bond rating, from the previous level of Baa1. The revised map provides the ability to differentiate on the national scale between issuers rated A3 and above and those rated Baa1 on the global scale, which together account for more than 20% of fundamental issuers. Although there is a meaningful difference in the creditworthiness of these two groups of issuers, as reflected in their global scale ratings, under the previous map all were all eligible to receive Aaa.mx NSRs. In addition, in order to clarify the meaning of NSRs, overlap -- where two GSRs can correspond to the same NSR -- has been eliminated from the Mexican national scale map, so every NSR maps back to just one GSR (with the exception of Aaa.mx). As a result of these changes, GSRs of B2 and above will in some cases correspond to lower NSRs on the Mexican scale than they did previously, GSRs of Caa1 and below may correspond to higher NSRs, while GSRs of B3 may correspond to either higher or lower NSRs. Consequently, approximately 20% of Mexican fundamental issuer's primary long-term NSRs are being repositioned lower and 2% are being repositioned higher. Certain short-term and other NSRs may be affected for these and other issuers as well. In addition, approximately 7% of the NSRs assigned to Mexican structured finance transactions are being repositioned lower and 7% are being repositioned higher. Almost all ratings changes are just one notch. The repositioned NSRs of individual issuers do not signify a change in credit risk, since the GSRs for these issuers remain unchanged. As a result of the recalibration, the level of risk associated with a particular Mexican NSR level (e.g. B2.mx) has changed in some cases. NSRs have no inherent absolute meaning in terms of default risk or expected loss; they are ordinal rankings of creditworthiness relative to other domestic issuers within a given country. A historical probability of default and/or expected loss consistent with a given NSR can be inferred from the GSR to which it maps back at that particular point in time. However, both the probability of default and the expected loss of an NSR may change if and when a country's national scale is remapped. ISSUERS AND RATINGS AFFECTED These national scale insurance financial strength rating has been repositioned: -- Seguros Azteca Danos, S.A. de C.V.: NSR repositioned to A1.mx from Aa3.mx, GSR is Ba1 -- Seguros Azteca, S.A de C.V.: NSR repositioned to A1.mx from Aa3.mx, GSR is Ba1 -- MBIA Mexico, S.A. de C.V.: NSR repositioned to B3.mx from Caa1.mx, GSR is Caa1 RATING RATIONALE NSRs are assigned by applying the published correspondence from GSRs. Where a single GSR maps to multiple NSRs, rating committees assigned higher or lower NSRs to individual issuers and debts depending on their relative credit position within the same GSR category, using the same methodologies as were used to determine the GSRs themselves. WHAT COULD CHANGE THE RATINGS -- UP AND DOWN The NSRs would face upward or downward pressure if their corresponding GSRs are upgraded or downgraded, unless this is in conjunction with a sovereign rating action that results in another recalibration of the Mexican national scale with an offsetting impact on NSRs. In addition, the NSRs may be repositioned upwards (downwards) if Mexico's sovereign is downgraded (upgraded) and the map is revised accordingly, but the corresponding GSRs have not changed as a result of the sovereign action. Because of the higher granularity of national scales, NSRs may also face pressure due to changes in creditworthiness that are not sufficient to cause a change in the corresponding GSR, measured using the same methodologies used to determine the GSR. The sources and items of information used to determine the ratings include year-end 2015 audited financial statements (sources: audited financial statements provided by the companies). The period of time covered in the financial information used to determine the ratings is between Dec. 31, 2011, and Dec. 31, 2015, (source: CNSF and insurance companies). The principal methodology used in rating Seguros Azteca, S.A de C.V. was Global Life Insurers published in December 2015. The principal methodology used in rating Seguros Azteca Danos, S.A. de C.V. was Global Property and Casualty Insurers published in December 2015. The principal methodology used in rating MBIA Mexico, S.A. de C.V. was Financial Guarantors published in January 2015. Moody's insurance financial strength ratings are opinions of the ability of insurance companies to pay punctually senior policyholder claims and obligations. ================= X X X X X X X X X ================= LATIN AMERICA: Foreign Investment Could Fall Up to 8% This Year --------------------------------------------------------------- Reuters reports that foreign direct investment in Latin America fell 9.1 percent last year and could drop as much as 8 percent in 2016, the United Nations' Latin American arm said in a report. Total foreign direct investment (FDI) in the region fell to $179.1 billion, the lowest level since 2010, due to a decrease in natural resource investment and a regional economic slowdown, the Santiago-based Economic Commission for Latin America and the Caribbean (ECLAC) said, according to Reuters. Reuters notes that that fall in investment, ECLAC added, contrasted with a 36 percent rise in global FDI flows in 2015. "FDI will continue at lower levels than those achieved in previous years, in line with economic perspectives. It could fall up to 8 percent (in 2016), although it will continue being an important factor in regional economies," the report said, Reuters relays. The U.N. body noted that FDI figures showed dramatic differences from country to country, Reuters notes. In politically tumultuous Brazil, FDI fell 23 percent to $75.1 billion in 2015, whereas FDI in Mexico jumped 18 percent to $30.3 billion, boosted by manufacturing investment, Reuters says. FDI fell 26 percent in Colombia and 8 percent in Chile due to low demand for minerals, Reuters notes. In Argentina, where a new pro-market government took over in December after years of leftist rule, FDI jumped 130 percent, though ECLAC said that change was due to a low comparison base after the disinvestment from the nationalization of state-oil company YPF was realized in 2014, Reuters discloses. In Central America FDI jumped 6 percent and in the Caribbean it fell 17 percent, Reuters notes. Since 2005, ECLAC said, "extractive sectors" have become a less central component of FDI in the region, while automobile manufacturing, telecommunications, renewable energy, and retail have demonstrated "particular dynamism," Reuters discloses. In 2015, the United States was the principal direct investor in the region, accounting for 25.9 percent of FDI, followed by the Netherlands and Spain, Reuters adds. *********** 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 * * *