/raid1/www/Hosts/bankrupt/TCRLA

/raid1/www/Hosts/bankrupt/TCRLA_Public/160629.mbx T R O U B L E D C O M P A N Y R E P O R T E R L A T I N A M E R I C A Wednesday, June 29, 2016, Vol. 17, No. 127 Headlines A N G U I L L A NAT'L BANK OF ANGUILLA: Seeks to Shield Client Names in Bankruptcy A R G E N T I N A FIDIECOMISO FINANCIERO: Moody's Puts Ca(sf) Rating to ARS10.5MM CP B R A Z I L BANCO BRADESCO: S&P Affirms 'BB/B' Ratings; Outlook Remains Neg. BANCO DO BRASIL: Capital Ratio Said to Rise Even After Oi Losses PDG COMPANHIA: Moody's Retains Caa3 Rating on Missed Payment PDG REALTY: Moody's Retains Caa3 Rating on Missed Interest Payment RADIO E TELEVISAO: Fitch Affirms 'BB-' Issuer Default Ratings RUMO LOGISTICA: Moody's Affirms B1 GS CFR; Outlook Remains Stable USINA CAETE: S&P Lowers CCR to 'CCC-' & Puts on CreditWatch Neg. C A Y M A N I S L A N D S ANTHRACITE REFERENCE: Shareholders' Final Meeting Set for June 30 ASUQ FINANCIAL: Shareholders' Final Meeting Set for July 8 FOOK SING: Shareholders' Final Meeting Set for July 7 GLOBAL FINANCE: Shareholders' Final Meeting Set for June 28 JJUNDI INVESTMENTS: Creditors' Proofs of Debt Due July 5 LORA INVESTMENTS: Shareholders' Final Meeting Set for June 30 LORA INVESTMENTS MASTER: Shareholders' Meeting Set for June 30 MSF CAPITAL: Shareholders' Final Meeting Set for June 27 MULTICAT MEXICO: Shareholder to Hear Wind-Up Report on July 8 POWERKO LTD: Shareholders' Final Meeting Set for July 7 STRAKE INVESTMENTS: Shareholders' Final Meeting Set for July 11 SUETONE BALANCED: Shareholders' Final Meeting Set for June 30 WALTER FUND: Members' Final Meeting Set for July 7 C O L O M B I A * COLOMBIA: Peso Leads Emerging-Market Drop Amid Brexit Fallout D O M I N I C A N R E P U B L I C DOMINICAN REPUBLIC: Taiwan, Dominican Leaders Talk Investment G U A T E M A L A BANCO DE LOS TRABAJADORES: Moody's Lowers Deposit Ratings to B1 M E X I C O GRUPO ELEKTRA: Fitch Affirms 'BB-' LT Issuer Default Ratings P U E R T O R I C O PUERTO RICO ELECTRIC: Fitch Cuts $8.2BB Rev. Bond Rating to 'C' - - - - - =============== A N G U I L L A =============== NAT'L BANK OF ANGUILLA: Seeks to Shield Client Names in Bankruptcy ------------------------------------------------------------------ Tiffany Kary at Bloomberg News reports that lawyers seeking to recover $175 million for clients of a bankrupt Caribbean offshore bank are asking a U.S. judge to grant those customers the same confidentiality protections a court extended to people claiming clergy sex abuse. U.S. Bankruptcy Judge Martin Glenn will weigh the matter July 1 when he considers whether the private-client unit of the National Bank of Anguilla can keep its customers' names secret while it tries to get their money back, according to Bloomberg News. Creditors typically must be identified in U.S. bankruptcies. The National Bank of Anguilla's private banking and trust division filed for Chapter 11 bankruptcy in New York, Bloomberg News notes. It's asking for permission to investigate its parent, as well as the National Commercial Bank of Anguilla, which took over its banking business, and the Eastern Caribbean Central Bank, Bloomberg News notes. A hearing is set for July 1 in Manhattan on the requests for the probes and client confidentiality. The case arises as U.S. authorities are lifting the veil that has long obscured the identities of offshore banking clients, including customers of Swiss banks seeking to hide their assets from tax collectors, Bloomberg News says. This year's leak of the so-called Panama Papers -- a trove of documents from a law firm specializing in setting up offshore companies -- has shed further light on the financial arrangements of people who would rather pass unnoticed, Bloomberg News notes. Nothing in court documents suggests that the private bank's clients are involved in tax evasion or other wrongdoing, Bloomberg News discloses. Money Transfers The National Bank of Anguilla came under control of the ECCB, the monetary authority for eight countries in the Caribbean, in 2013 after the financial crisis left it with a batch of poorly performing loans, Bloomberg News relays. Since then, $175 million has been transferred from the private bank to the parent at the instruction of directors appointed by the regulator, according to the bankruptcy court papers, Bloomberg News notes. James McCarroll, a bankruptcy lawyer for the National Bank of Anguilla as well as the private bank unit, didn't immediately return a call and e-mail seeking comment on the case. ECCB governor Timothy Antoine didn't immediately return an e-mail seeking comment and the ECCB declined to give phone contact information for him. The private bank wants to use the U.S. bankruptcy process to get the money back. It says 500 of its 819 depositors have positive balances, making them creditors, Bloomberg News says. The money is held in a U.S. account with Bank of America Corp., according to the filing. Bank of America representatives weren't immediately able to comment on the case. Disclosure Criminalized The private bank argued in court papers that its customers' identities should be kept confidential because Anguillan law criminalizes disclosing information about depositors. That's where the sex-abuse claimants come in, Bloomberg News notes. In requesting client confidentiality, the private bank cited the 2008 bankruptcy of the Diocese of Fairbanks, Alaska, in which a judge said information about creditors who claimed they were sexually abused could be kept under wraps, Bloomberg News relays. It also pointed to a 1977 ruling in the bankruptcy of a Swiss corporation. A lower court had dismissed that bankruptcy because the bank refused to file a list of creditors. A New York-based federal appeals court reversed the decision, Bloomberg News discloses. But times have changed. Swiss banks, including UBS Group AG and Credit Suisse Group AG, have agreed to pay about $5 billion to the U.S. in penalties and fines, Bloomberg News says. In the past year, 80 Swiss banks paid penalties to avoid prosecution for helping U.S. clients hide assets from the Internal Revenue Service, Bloomberg News relays. They also provided authorities with detailed information about account holders. National Bank The National Bank of Anguilla was formed in 1984 and began operating in 1985, when it acquired the Anguilla branch of the Bank of America National Trust & Savings Association, according to its website. The private-banking unit provides financial services to offshore clients around the world and is wholly owned by its parent, Bloomberg News notes. The parent ceased banking operations on April 22. It began liquidating in an Anguillan court the following month. On May 26, it petitioned for bankruptcy court protection from U.S. creditors. Banking operations were transferred to the National Commercial Bank of Anguilla, which is wholly owned by the government, according to court papers, Bloomberg News. The private bank's case is In re National Bank of Anguilla (Private Banking & Trust Ltd.), 16-11806, U.S. Bankruptcy Court, Southern District of New York. (Manhattan) The parent's case is 16-11529. ================= A R G E N T I N A ================= FIDIECOMISO FINANCIERO: Moody's Puts Ca(sf) Rating to ARS10.5MM CP ------------------------------------------------------------------ Moody's Latin America Agente de Calificacion de Riesgo has rated Fideicomiso Financiero Lucaioli Serie XVI. This transaction will be issued by Banco Patagonia S.A. - acting solely in its capacity as issuer and trustee. The securities for this transaction have not been placed in the market yet. The transaction is pending for approval from the Comision Nacional de Valores, if any assumption or factor Moody's considers when assigning the ratings change before closing, the ratings may also change. -- ARS 39,663,580 in Floating Rate Debt Securities (VRD) of "Fideicomiso Financiero Lucaioli Serie XVI", rated Aaa.ar (sf) (Argentine National Scale) and Ba3 (sf) (Global Scale) -- ARS 10,543,483 in Certificates (CP) of "Fideicomiso Financiero Lucaioli Serie XVI", rated Ca.ar (sf) (Argentine National Scale) and Ca (sf) (Global Scale). RATINGS RATIONALE The rated securities are payable from the cash flow coming from the assets of the trust, which is an amortizing pool of approximately 25,531 eligible consumer loans denominated in Argentine pesos, bearing fixed interest rate, originated by Casa Humberto Lucaioli S.A., a home appliances store located in Argentina. Only the installments due after July 5, 2016, will be assigned to the trust. The VRD will bear a floating interest rate (BADLAR plus 250bps). The VRD's interest rate will never be higher than 35% or lower than 26%. Overall credit enhancement is comprised of subordination, various reserve funds and excess spread. The transaction has initial subordination levels of 22.4% for the VRD and 1.7% for the CP, calculated over the pool's principal balance as of July 05, 2016. The subordination levels will increase overtime due to the turbo sequential payment structure. The transaction has an estimated -3.4% annual excess spread, before considering losses, taxes or prepayments and calculated at the VRD's interest rate cap of 35%. The principal methodology used in these ratings was "Moody's Approach to Rating Consumer Loan-Backed ABS" published in September 2015. Factors that would lead to an upgrade or downgrade of the ratings: Factors that may lead to a downgrade of the ratings include an increase in delinquency levels beyond the level Moody's assumed when rating this transaction. Although Moody's analyzed the historical performance data of previous transactions and similar receivables originated by Lucaioli, the actual performance of the securitized pool may be affected, among others, by the economic activity, high inflation rates compared with nominal salaries increases and the unemployment rate in Argentina. Factors that may lead to an upgrade of the ratings include the building of credit enhancement over time due to the turbo sequential payment structure, when compared with the level of projected losses in the securitized pool. Loss and Cash Flow Analysis: Moody's considered the credit enhancement provided in this transaction through the initial subordination levels for each rated class, as well as the historical performance of Lucaioli's portfolio and previous securitizations. In addition, Moody's considered factors common to consumer loans securitizations such as delinquencies, prepayments and losses; as well as specific factors related to the Argentine market, such as the probability of an increase in losses if there are changes in the macroeconomic scenario in Argentina. Moody's analyzed the historical performance data of previous transactions and similar receivables originated by Lucaioli, ranging from June 2013 to April 2016. In assigning the rating to this transaction, Moody's assumed a lognormal distribution of losses for the securitized pool with a mean of 5% and a coefficient of variation of 50%. Also, Moody's assumed a 15% CPR. To determine the rating assigned to the VRD and CP, Moody's has used an expected loss methodology that reflects the probability of default times the severity of the loss expected for each security. In order to allocate losses to each Class in accordance with their priority of payment and relative size, Moody's has used a cash- flow model (ABSCORE) that reproduces many deal-specific characteristics: the main input parameters of the model are described above. Weighting each loss scenario's severity result with its probability of occurrence, the model has calculated the expected loss level for each security as well as the expected average life. Moody's model then compares the quantitative values to the Moody's Idealized Expected Loss table for each tranche. Servicer default was modeled by simulating the default of Lucaioli as the servicer consistent with an internal assessment about Lucaioli's credit quality. In the scenarios where the servicer defaults, Moody's assumed that the defaults will triple and that one full month of collections will be lost. The model results showed 1.4% expected loss for the Floating Rate Debt Securities (VRD) and 39.2% for the Certificates. Stress Scenarios Parameter Sensitivities provide a quantitative, model-indicated calculation of the number of notches that a Moody's-rated structured finance security may vary if certain input parameters used in the initial rating process differed. The analysis assumes that the deal has not aged. It is not intended to measure how the rating of the security might migrate over time, but rather, how the initial rating of the security might differ as certain key parameters vary. Parameter sensitivities for this transaction have been calculated in the following manner: Moody's tested sixteen scenarios derived from the combination of mean loss: 5% (base case), 7% (base case + 2%), 11% (base case + 6%), 14% (base case + 9%) and conditional prepayment rates: 15% (base case), 20% (base case + 5%), 30% (base case + 15%), 40% (base case + 25%). The 5% /15% scenario would represent the base case assumptions used in the initial rating process. At the time the rating was assigned, the model output indicated that the VRD would have achieved a B1 (sf) global rating model output if mean loss was as high as 7% with a prepayment rate of 15%. Under the same assumptions, the Certificates would have achieved Ca (sf) global rating model output. Moody's also evaluated the back-up servicing arrangements in the transaction. If Lucaioli S.A. is removed as primary servicer, Banco Patagonia S.A. will be appointed as the back-up servicer. =========== B R A Z I L =========== BANCO BRADESCO: S&P Affirms 'BB/B' Ratings; Outlook Remains Neg. ---------------------------------------------------------------- S&P Global Ratings affirmed its 'BB/B' global scale and issue- level ratings and 'brAA-/brA-1' national scale ratings on Banco Bradesco S.A. At the same time, S&P affirmed its 'brAA-' national scale ratings on its core subsidiary, Bradesco Capitalizacao S.A. The outlook remains negative. The issuer credit ratings (ICR) on Bradesco are based on S&P's assessment of its very strong business position, which continues to reflect the bank's prominent market share in almost all the lines in which it operates. S&P has revised the bank's capital and earnings assessment to weak from moderate, taking into account its forecasted risk-adjusted capital (RAC) ratio (4.1% for the next 24 months). The bank has felt pressure from both Brazil's BICRA and from recent sovereign downgrades, as these materially increased RWAs used, and the estimated goodwill from HSBC Brasil acquisition. Increasing credit losses and asset quality pressure, have brought our adequate risk position assessment under pressure. The ratings also incorporate S&P's assessment of the bank's funding as average and its liquidity as adequate. S&P lowered the SACP to 'bbb-', from 'bbb' because of the change in its capital and earnings score. Nonetheless, the foreign currency rating on Brazil constrains the ratings on Bradesco due to its extensive exposure to the government in the bank's government bond portfolio. Therefore, Bradesco fails the stress test associated with a sovereign foreign currency default. The negative outlook reflects S&P's view that the ratings on Bradesco should move in tandem with those on the sovereign, and there is a greater than one-in-three likelihood that S&P could lower the ratings on Brazil again. It also incorporates potential further downgrades of the BICRA, and the 'bb+' anchor for banks operating in Brazil, as well as potential further deterioration in the bank's capital because of increasing risk charges. S&P could see some pressure on its business position due to potential revenue instability, compared with international peers. Within the next year, a downgrade of Brazil and Bradesco could stem, in particular, from potential key policy reversals given the fluid political dynamics, including lack of cohesion within the cabinet, inconsistent policy initiatives, and uncertainties during or following the impeachment process. A downgrade could also result from changes in Brazil's BICRA and risk charges (currently with a negative trend), which could lead to further capital pressure, in addition to risk position pressure due to asset quality deterioration, and business position pressure due to revenue instability compared with international peers. These aspects could lead to multiple score changes and a multiple notch drop in the bank's SACP to levels below the sovereign rating. S&P could revise the outlook on Bradesco to stable if Brazil's political uncertainties and conditions for consistent policy execution were to improve across branches of government to stanch fiscal deterioration and strengthen GDP growth prospects. S&P expects that these improvements would support a quicker turnaround and could help Brazil exit from the current recession, facilitating improved fiscal performance and providing more room to maneuver in the face of economic shocks. Therefore, the ratings on Bradesco could also stabilize following a similar action on the sovereign if Brazil's political certainties and conditions for consistent policy execution--across branches of government, to stanch fiscal deterioration-improved; and if S&P changes its negative trend on Brazil's BICRA to stable; and if asset quality pressure on the bank eases materially, and if revenues stability remains stable when comparing with international peers. BANCO DO BRASIL: Capital Ratio Said to Rise Even After Oi Losses ---------------------------------------------------------------- Francisco Marcelino at Bloomberg News reports that Banco do Brasil SA, Latin America's largest bank by assets, will report an increase in its core capital ratio for the second quarter even after it boosts provisions for Oi SA, the Brazilian phone carrier that filed for bankruptcy protection, according to a person close to the bank. The person, who asked not to be identified because the results haven't been made public yet, declined to give a precise figure. The gauge of capital adequacy was 8.26 percent in the first quarter, according to earnings statements from the Brasilia-based federally controlled bank, according to Bloomberg News. Oi SA sought protection from creditors on BRL65 billion ($19 billion) in debt after failing to reach a restructuring agreement. Brazil's fourth-biggest wireless company plans to continue serving customers, the company said in a filing, Bloomberg News notes. Banco do Brasil's provisions related to Oi will be equal to 30 percent of the loans the firm made to the company, the person said, without being more specific, Bloomberg News relays. Oi SA said on June 17 that the bank's exposure was BRL4.3 billion, Bloomberg News says. The bank won't have to set aside provisions of 30 percent of the total because a portion is related to local debentures and international bonds, which are marked-to-market on its balance sheet, the person said, Bloomberg News notes. A Banco do Brasil press official declined to comment. Avoiding Losses Chief Executive Officer Paulo Rogerio Caffarelli said in an interview in Sao Paulo that the company will make every effort to avoid losses on Oi and doesn't need to raise capital in the short- term, Bloomberg News notes. "Banco do Brasil is always assessing ways to improve capital," Bloomberg News quoted Mr. Caffarelli as saying. Oi SA's bankruptcy filing came less than two months after oil-rig supplier Sete Brasil Participacoes SA filed for bankruptcy protection with BRL18 billion in debt, Bloomberg News notes. Creditors including Banco do Brasil had to raise first-quarter provisions as a result, and missed analysts' profit estimates, Bloomberg News adds. As reported in the Troubled Company Reporter-Latin America on March 1, 2016, Moody's Latin America Agente de Calificacion de Riesgo has downgraded Banco do Brasil S.A. (BDBB)'s global long term local currency deposit rating to Ba2 from Ba1. PDG COMPANHIA: Moody's Retains Caa3 Rating on Missed Payment ------------------------------------------------------------ Moody's America Latina Ltda. announced that PDG Companhia Securitizadora's failure to make an interest payment on the 15th series of the 1st issuance of real estate certificates (CRI or certificates), following a failure to receive interest payment due on the underlying CCB (cedula de credito bancario) issued by PDG Realty S.A. Empreendimentos e Participacoes (PDG, Caa3/Caa3.br Corporate Family Ratings), and related amendments to the transaction original structure have no immediate impact on the Caa3/Caa3.br ratings of the certificates and underlying CCB. Moody's views the certificates as full pass-through securities of the underlying CCB. Given that the ratings of the 15th series of certificates are primarily based on PDG's ability to make payments under the CCB, any changes in ratings of the underlying CCB will cause a change in the ratings of the CRIs. On June 17, 2016, the certificate holders agreed to (i) a 60-day deferral of an approximately BRL20 million interest payment on the underlying CCB and certificates, originally scheduled to come due on June 20, 2016, and June 21, 2016, respectively, (ii) remove the obligation to maintain a minimum pledge of receivables equivalent to 105% of the outstanding CCB amount for up to 60 days. During this period, eventual changes on the collateral provided to the CCB will be defined. Notwithstanding the waivers and amendments provided by the certificate holders at this time, PDG's and PDG Companhia Securitizadora's failure to meet the interest payment as per the original promise on the CCB and CRI, respectively, constitutes an event of default under Moody's definition of default, a scenario that was already incorporated to the current rating Caa3/Caa3.br ratings. PDG REALTY: Moody's Retains Caa3 Rating on Missed Interest Payment ------------------------------------------------------------------ Moody's America Latina says PDG Realty S.A. Empreend. e Part. failure to make an interest payment on its BRL250 million senior secured bank note (CCB) and related amendments to the original debt structure, have no immediate impact on the company's Caa3/Caa3.br Corporate Family Ratings and senior secured ratings. The ratings outlook remains negative. On June 17, 2016, the holders of the 15th series of the 1st issuance of real estate certificates (CRI) issued by PDG Companhia Securitizadora agreed with a 60-day deferral for an approximately BRL20 million interest payment on the underlying secured bank credit note (CCB) issued by PDG Realty. The interest payment was originally scheduled to come due on June 20, 2016. Holders of the certificates and underlying note also waived PDG Realty's obligation to maintain a minimum pledge of receivables equivalent to 105% of the outstanding debt amount for up to 60 days. During this period, eventual changes on the collateral provided to the secured bank credit note will be defined. "In spite the waivers and payment deferrals provided by the note holders, PDG Realty's failure to meet the interest payment as per the original debt promise constitutes an event of default under Moody's definition of default, a scenario that was already incorporated to the current rating Caa3/Caa3.br ratings, affirmed on 12 May 2016," says Cristiane Spercel, a Moody's Vice President and Senior Analyst. PDG Realty's Caa3/Caa.br CFR reflect its weak operating performance, untenable capital structure and evolving liquidity profile with significant near-term debt maturities. The ratings also reflect Moody's current view of PDG Realty's consolidated probability of default and expected loss for its debt holders, considering its current capital structure that includes more than 87% of secured and guaranteed debt instruments and 13% of unsecured notes. The Caa3/Caa3.br ratings assigned to the secured bank credit notes due in 2016 (15th series-1st issuance) reflect an expected loss of more than 20% for its creditors in an event of default. Despite the collateral being provided there are no real assets being pledged and in the event of a bankruptcy the under collateralized debt amount may be significant depending on the progress in the projects. "The ratings could be further downgraded if we expect the recovery values on its debt instruments to be lower than currently estimated," says Spercel. Conversely, the outlook could stabilize if the company successfully completes the ongoing debt renegotiations, such that reduces its prospective debt burden and materially improves its liquidity position. PDG Realty's sales over supply (SOS) ratios have been pressured by project dissolutions, cancelled sales and stricter client screening procedures. Most of it relates to the implementation of the company's turnaround plan and revised business strategy, but we also note a general deterioration in the overall industry dynamics driven by slower GDP growth in Brazil combined with rising household debt and a decline in consumer confidence, slowing growth of housing prices and sales speed. Moody's calculates annualized SOS ratio at 45%, down from 49% in March 2015. PDG Realty's contract terminations reached BRL1.8 billion in the last twelve months that ended March 2016, 46% higher than the previous year. As a result, the amount of unsold finished units has increased to 33% of its inventories in March 2016 (up from 14.5% in March 2015). An additional credit concern is PDG's receivables from finished units, which exposes the company to client delinquency risk. PDG Realty is a Brazilian homebuilder operating through its wholly owned subsidiaries, Goldfarb, CHL, Agre and minority investments in other companies. The company currently has projects in 14 states and virtually all price segments. In the last twelve months ended March 2016, PDG Realty generated net revenues of BRL1.3 billion (USD370 million) and net losses of BRL3.0 billion (USD850 million). RADIO E TELEVISAO: Fitch Affirms 'BB-' Issuer Default Ratings ------------------------------------------------------------- Fitch Ratings has affirmed Radio e Televisao Bandeirantes Ltda.'s (RTB) Long-Term Foreign Currency and Local Currency Issuer Default Ratings (IDR) at 'BB-'. Fitch has also affirmed the company's National Long-Term Rating at 'A(bra)'. The Rating Outlook is revised to Negative from Stable. The Outlook revision to Negative reflects Brazil's tough operational outlook under subdued macroeconomic conditions, which continues to pressure the country's advertising industry. RTB's weak capital structure and liquidity profile and its high financing costs are also factors. A downgrade to the 'B' category could occur if EBITDA contracts due to pressured revenue growth and if the company fails to materially improve its debt maturity profile before the end of 2016. KEY RATING DRIVERS RTB is part of Grupo Bandeirantes de Comunicacao (BAND), a diversified media group and one of the group's major free-to-air (FTA) TV and radio broadcasters in Brazil. RTB's ratings are based on the combined credit profile of BAND given the centralized group's cash management and a strong operational linkage among the group's companies under shared executives and control by the same major shareholder. The ratings reflect BAND's diversified media business with a nationwide presence in Brazil, its historical stable performance backed by continued cost savings initiatives that enabled positive FCF generation since 2014, and moderately low leverage for the rating category. The ratings are tempered by BAND's weak market position in its main TV business and a small operational scale compared to regional peers amid tough economic conditions and a high level of competition. The company's liquidity and its access to credit, reflected by its high financing cost and a predominantly secured- debt-based debt profile, are key credit weakness. Also, the company's corporate governance, with its complex group structure, is also considered below average for the rating category. Unfavorable Operational Environment: Media companies continue to experience weaker demand for advertising due to unfavorable macro-economic environment in Brazil and waning importance of free-to-air TV (FTA) due to pay-TV and internet advertisement growth. Weak market conditions will continue to impede any material advertising price improvements as advertisers' budgets are expected to remain constrained, which could pressure BAND's FTA operation. Attractive content remains a key competitive factor, thus any significant reduction in production costs could be challenging, resulting in suppressed operating margins of the FTA advertising segment. FTA's industry revenues declined for the first time in more than a decade to BRL22.9 billion in 2015 after reaching a record BRL23.2 billion in 2014, and Fitch forecasts the difficult trend to continue in the short term. BAND's total revenues, excluding its Printed Media segment, were negatively affected in 2015, declining by 6% to BRL1.343 billion from BRL1.421 billion in 2014. EBITDA margin is likely to remain pressured in 2016 due to high amortization costs from major sport events such as the Olympic Games. Weak Liquidity: BAND's liquidity profile is considered weak for the rating category given its high proportion of short-term debt. As of Dec. 31, 2015, the company's short-term debt was BRL428 million accounting for 47% of total debt, which improved from 67% as of December 2014, largely due to its issuance of BRL250 million debentures in late 2015. During this period, the company's readily available cash totaled BRL198 million. Fitch expects the company to continue to gradually reduce its short-term debt in 2016, backed by a combination of its positive FCF generation and cash balance, as well as extension of debt maturities. Weak TV Market Position: BAND is the fourth largest TV operator in a highly concentrated industry in Brazil where the market is dominated by Globo with about 36% audience share in 2015. BAND accounted for a TV audience market share of 4.3% in 2015, which is a modest improvement from 4% in 2007. Fitch expects the competitive landscape to remain intense, which could limit any future market share improvement. BAND's main contents are news, sports, and entertainment. Moderately Low Leverage: Fitch expects BAND's positive FCF generation to continue in the medium term, backed by its lower capex and working capital requirements, resulting in modestly improved leverage. Fitch forecasts the company's net leverage to continue to stay at around 2.5x in 2016, which is in line with the 2015 level of 2.7x and is considered moderately low for the rating category, despite projected EBITDA contraction due to unfavorable market condition. This level of leverage compares favorably to its historical level of 4.1x at end-2013. Diversified Media Portfolio BAND is a diversified media group with a national presence in Brazil. The group's main business is free-to-air (FTA) television and radio broadcasting which combined represented close to 70% of the group revenues in 2015. BAND also produces free newspapers, pay-TV programming, media solution in public transportation in its 'out-of-home (OOH)' segment and to a smaller extent its internet portal website. BAND boasts strong operational integration across its various media platforms backed by the sharing of production infrastructure and talents, as well as the distribution of content under the common management. This helps the group maintain quality of content across the segments with an efficient cost structure. KEY ASSUMPTIONS Fitch's key assumptions within the rating case for RTB include: -- Slower growth of the advertisement industry in Brazil in the short to medium term due to subdued GDP growth; -- BAND viewership market share to remain stable over the medium term; -- Capex to sales ratio of 2.5% over the medium term; -- BAND to successfully meet its debt maturities in 2016; -- Net Leverage to remain at around 2.5x in 2016 RATING SENSITIVITIES Negative rating action could be considered in case of material EBITDA contraction due to the tough operating environment leading to increased leverage and tepid FCF generation. In addition, the company's failure to materially improve its short-term debt profile within 2016 would immediately pressure the ratings toward the 'B' category. Failure to reach 1.2x of readily available cash plus cash flow from operations/short-term debt would also be negative for the ratings. Positive rating action is unlikely in the short to medium term given unfavorable economic conditions in Brazil negatively affecting FTA advertising trends. The Rating Outlook could be revised to Stable if the company continues to generate solid positive FCF generation on a sustained basis, leading to continued reduction in its gross debt level and a well-distributed debt maturities profile. LIQUIDITY BAND's liquidity profile is weak as its short-term debt amounted to BRL428 million as of Dec. 31, 2015, which unfavorably compares to its cash balance of just BRL198 million during the same period. Fitch believes the company has made and will continue to make progress to cope with its short-term debt maturity concentration through its liability management initiatives, coupled with internal cash flow generation and the outstanding cash balance. FULL LIST OF RATING ACTIONS Fitch has affirmed the following ratings: Radio e Televisao Bandeirantes Ltda. -- Long-Term Foreign Currency IDR at 'BB-'; -- Long-Term Local Currency IDR at 'BB-'; -- National Long-Term Rating at 'A(bra)'. The Rating Outlook is revised to Negative from Stable. RUMO LOGISTICA: Moody's Affirms B1 GS CFR; Outlook Remains Stable ----------------------------------------------------------------- Moody's America Latina has affirmed Rumo Logistica Operadora Multimodal S.A's global scale corporate family ratings at B1 and national scale ratings at Baa2.br. The outlook remains stable. Ratings affirmed as: Issuer: Rumo Logistica Operadora Multimodal S.A -- Corporate Family Rating: B1 (global scale); Baa2.br (national scale) The outlook for all ratings is stable RATINGS RATIONALE The ratings affirmation reflects the capital increase and debt refinancing that resulted in better liquidity and more comfortable debt amortization profile, as well as the downward review on CAPEX projections for the next five years. On the other hand Moody's believes that Rumo's leverage will remain high in the medium term due to its capital intensive profile that will result in negative FCF at least until the end of 2018. Rumo's B1/Baa2.br corporate family rating reflects its relevant market position as a railroad and logistic operator in the South and Southeastern regions of Brazil, an area that is responsible for 80% of Brazil's GDP and approximately 80% of the country's grain exports that currently lack of railroad transportation capacity. The rating also considers the company's solid shareholder structure, improved corporate governance and stronger management team coming from Cosan (Ba2 negative) after the merger between Rumo and ALL. The importance of the company's business to Brazil's infrastructure and track record of access to capital markets and BNDES lines also support the rating. Rumo has been investing in the revamping of assets, rolling stocks and rail structure, generating additional capacity, ensuring a higher level of volumes transported and maximizing the utilization, which requires intensive CAPEX spending. Despite the aforementioned reduction in the company's 5-year CAPEX plan, to BRL 8.5 bil. from BRL 12 bil., yearly investments will remain considerably high until at least 2018. Moreover, the investments are largely dependent on Brazil Government's Development Bank, BNDES (Ba2 negative), funding. BNDES Participacoes currently holds a 8% stake in the company and makes part of the shareholders' agreement together with Cosan Logistica, TPG and G†vea Investimentos. The new management's plan to revamp Rumo's assets is positive and healthy for the company's operations in the medium and long run, but the CAPEX investments that will be needed for its execution will keep adjusted leverage hovering between 5.0x-4.5x at least until the end of 2017 and free cash flow negative until the end of 2018. The B1 rating incorporates the assumption that BNDES will finance a significant portion of the company's CAPEX needs. On the other hand, Rumo's high leverage and negative cash generation stemming from its capital intensive nature and significant investments continue to constrain the ratings that are further limited by the uncertainties brought by the evolving regulatory framework for rail concessions in Brazil. Rumo's gross debt/EBITDA ratio, including Moody's standard adjustments, was 6.3x at the end of 2015, versus 7.0x a year earlier. In the LTM ended March 2016 the debt/EBITDA ratio reached 5.6x. The improvement reflects positive results from Rumo's new management's turnaround efforts. On April 2016, Rumo concluded a BRL 2.6 billion capitalization that also enabled the company to refinance BRL 2.9 billion in debt maturing between 2016 and 2018. In addition, BNDES committed to approve additional lines of credit totaling BRL 2.8 billion, together with BRL 700 million already approved, that will be used to roll out the investment plan. In our view now as a part of the Cosan group, the company benefits from stronger financial flexibility, wider access to funding, overall better management and corporate governance. Despite Brazil's challenging economic outlook, Rumo's turnaround plan after its July 2015 merger with America Latina Logistica leaves it better positioned to profit from a likely increase in rail volumes, based on increased crop results and market-share gains from trucking competitors. Agricultural commodities constituted around 82% of the volumes that Rumo transported in the LTM ended March 2016. The stable outlook reflects Moody's expectation that Rumo will continue to benefit from a significant global demand for Brazil's agricultural products. The outlook assumes that Rumo will maintain adequate liquidity while addressing its upcoming debt maturities and investment requirements and improving efficiency levels with the recent investments to its assets and railways. Positive rating pressure would be triggered if Rumo maintains high operating margins while strengthening cash flow generation and reducing leverage. Quantitatively, an upgrade could be considered if Funds From Operations (FFO) to Adjusted Debt improves to more than 12% (7.5% in the LTM ended March 2016) and the leverage as measured by the Adjusted Debt to EBITDA decreases to less than 4.5x (5.6x in the LTM ended March 2016) on a sustainable basis. Rumo's ratings could be downgraded or the outlook changed to negative if leverage increases for a prolonged period, such as the Adjusted Debt to EBITDA is maintained at more than 6.0x (5.6x in the LTM ended March 2016) or if the company's adjusted interest coverage ratio is maintained persistently below 1.0x (1.0x in the LTM ended March 2016). The ratings could also be downgraded in view of a material deterioration on the company's liquidity position, due to unfavorable rulings regarding judicial disputes and/or changes in the regulatory framework that negatively affects Rumo's business profile, such as a concession revoke without adequate compensation or if the company is unable to secure funding sources for its CAPEX needs. Rumo is the company resulting from the merger between Rumo and ALL, completed in 2015 and is the largest independent rail-based logistics operator in Latin America. The company's rail operations comprise four long-term rail concessions, totaling 12,000 kilometers of rail tracks, 1,000 locomotives and 25,000 railcars, through which the company transports agricultural commodities and industrial products. Additionally, Rumo develops the intermodal logistic of containers and related storage services through Brado Logistica. In the LTM ended March 2016, Rumo had net revenues of BRL 4.3 billion and adjusted EBITDA of BRL 2.4 billion. USINA CAETE: S&P Lowers CCR to 'CCC-' & Puts on CreditWatch Neg. ---------------------------------------------------------------- S&P Global Ratings lowered its global scale corporate credit rating on Usina Caete S.A.- NE to 'CCC-' from 'B-' and S&P's Brazil national scale corporate credit rating to 'brCCC-' from 'brB-'. At the same time, S&P lowered its issue-level rating to 'CCC' from 'B-'. S&P also revised its recovery rating on this debt to '2', indicating its expectation for substantial recovery (70%-90%; upper half of the range) of principal in the event of a payment default, from '3'. S&P also lowered its national scale issue-level rating to 'brCCC' from 'brB-'. Finally, S&P placed all ratings on CreditWatch negative. The downgrade reflects S&P's view that Caete's capital structure may become unsustainable, absent a debt restructuring, which increases the risk of the company's failure to pay principal or interest payments in the next six months. Its already weak liquidity position continues to erode, as the share of short-term debt maturities rises, while Caete continues consuming its cash. In S&P's view, tightening credit conditions in Brazil and the company's negative free operating cash flow have hindered its ability to reduce debt or refinance it at longer tenors. This situation also forced Caete to breach its covenants for two years in a row, which exposes it to a potential payment acceleration of its debentures if banks don't provide a waiver to the breach. S&P believes that, in the absence of a significant extension of its debt maturity profile or improvement of its capital structure, there's a rising risk of a debt restructuring or standstill agreement due to the refinancing risk for the debt amortizations in the next three months, which includes principal payments of its debentures. Nevertheless, the company's operating performance has improved due to stronger productivity ratios, higher sugar and ethanol prices, and a still weak Brazilian real that boosted Caete's exports. Additionally, the company is reducing its expansion capex, which should result in free operating cash flow, but it still won't be sufficient to cover debt maturities. ========================== C A Y M A N I S L A N D S ========================== ANTHRACITE REFERENCE: Shareholders' Final Meeting Set for June 30 ----------------------------------------------------------------- The shareholders of Anthracite Reference Company (12) Limited will hold their final meeting on June 30, 2016, at 9:00 a.m., to receive the liquidator's report on the company's wind-up proceedings and property disposal. The company's liquidator is: David A.K. Walker c/o Gabby Whitter P.O. Box 258 Grand Cayman KY1-1104 Cayman Islands Telephone: (345) 914 8730 Facsimile: (345) 945 4237 ASUQ FINANCIAL: Shareholders' Final Meeting Set for July 8 ---------------------------------------------------------- The shareholders of ASUQ Financial Inc. will hold their final meeting on July 8, 2016, to receive the liquidator's report on the company's wind-up proceedings and property disposal. 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 FOOK SING: Shareholders' Final Meeting Set for July 7 ----------------------------------------------------- The shareholders of Fook Sing De Paor Ltd. will hold their final meeting on July 7, 2016, to receive the liquidator's report on the company's wind-up proceedings and property disposal. The company's liquidator is: Citron 2004 Limited Telephone: + 44 1534 282276 Facsimile: + 44 1534 282400 23-25 Broad Street St Helier Jersey JE4 8ND GLOBAL FINANCE: Shareholders' Final Meeting Set for June 28 ----------------------------------------------------------- The shareholders of Global Finance Company (Cayman) Limited will hold their final meeting on June 28, 2016, at 10:00 a.m., to receive the liquidator's report on the company's wind-up proceedings and property disposal. The company's liquidator is: Marc Daher Daher Building, 1st Floor Main Road, Ferzol, Bekaa Lebanon JJUNDI INVESTMENTS: Creditors' Proofs of Debt Due July 5 -------------------------------------------------------- The creditors of Jjundi Investments Ltd. are required to file their proofs of debt by July 5, 2016, to be included in the company's dividend distribution. The sole member received the liquidator's report on the company's wind-up proceedings on June 21, 2016. The company commenced liquidation proceedings on May 23, 2016. The company's liquidator is: Lion International Management Limited Craigmuir Chambers Road Town Tortola VG 1110 British Virgin Islands c/o Myolie Lee HSBC International Trustee Limited Private Wealth Solutions HSBC Main Building, Level 13 1 Queen's Road Central Hong Kong LORA INVESTMENTS: Shareholders' Final Meeting Set for June 30 ------------------------------------------------------------- The shareholders of Lora Investments International, Ltd. will hold their final meeting on June 30, 2016, at 10:00 a.m., to receive the liquidator's report on the company's wind-up proceedings and property disposal. The company's liquidator is: Mourant Ozannes c/o Neil Greer Jo-Anne Maher Telephone: (345) 814 9255 Facsimile: (345) 949 4647 94 Solaris Avenue Camana Bay P.O. Box 1348 Grand Cayman KY1-1108 Cayman Islands LORA INVESTMENTS MASTER: Shareholders' Meeting Set for June 30 -------------------------------------------------------------- The shareholders of Lora Investments Master Fund, Ltd. will hold their final meeting on June 30, 2016, at 10:00 a.m., to receive the liquidator's report on the company's wind-up proceedings and property disposal. The company's liquidator is: Mourant Ozannes c/o Neil Greer Jo-Anne Maher Telephone: (345) 814 9255 Facsimile: (345) 949 4647 94 Solaris Avenue Camana Bay P.O. Box 1348 Grand Cayman KY1-1108 Cayman Islands MSF CAPITAL: Shareholders' Final Meeting Set for June 27 -------------------------------------------------------- The shareholders of MSF Capital Offshore Institutional Fund, Ltd. will hold their final meeting on June 27, 2016, at 10:00 a.m., to receive the liquidator's report on the company's wind-up proceedings and property disposal. The company's liquidator is: Maitland Administration Limited 90 Fort Street George Town Grand Cayman KY1-1104 Cayman Islands Telephone: (345) 949 0704 MULTICAT MEXICO: Shareholder to Hear Wind-Up Report on July 8 ------------------------------------------------------------- The shareholder of Multicat Mexico Ltd. will hear on July 8, 2016, at 11:00 a.m., the liquidator's report on the company's wind-up proceedings and property disposal. The company's liquidator is: Kevin Poole James Trundle Telephone: 914-2270/ 914-2265/ 949-5263 Facsimile: 949-6021 P.O. Box 10233 Grand Cayman Cayman Islands POWERKO LTD: Shareholders' Final Meeting Set for July 7 ------------------------------------------------------- The shareholders of Powerko Ltd. will hold their final meeting on July 7, 2016, to receive the liquidator's report on the company's wind-up proceedings and property disposal. The company's liquidator is: Citron 2004 Limited Telephone: + 44 1534 282276/ 01534 282345 Facsimile: + 44 1534 282400 23-25 Broad Street St Helier Jersey JE4 8ND STRAKE INVESTMENTS: Shareholders' Final Meeting Set for July 11 --------------------------------------------------------------- The shareholders of Strake Investments Ltd. will hold their final meeting on July 11, 2016, at 11:00 a.m., to receive the liquidator's report on the company's wind-up proceedings and property disposal. 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 SUETONE BALANCED: Shareholders' Final Meeting Set for June 30 ------------------------------------------------------------- The shareholders of Suetone Balanced Company SPC will hold their final meeting on June 30, 2016, at 10:00 a.m., to receive the liquidator's report on the company's wind-up proceedings and property disposal. The company's liquidator is: David A.K. Walker c/o Gabby Whitter P.O. Box 258 Grand Cayman KY1-1104 Cayman Islands Telephone: (345) 914 8730 Facsimile: (345) 945 4237 WALTER FUND: Members' Final Meeting Set for July 7 -------------------------------------------------- The members of The Walter Fund will hold their final meeting on July 7, 2016, to receive the liquidator's report on the company's wind-up proceedings and property disposal. The company's liquidator is: CDL Company Ltd. P.O. Box 31106 Grand Cayman KY1-1205 Cayman Islands =============== C O L O M B I A =============== * COLOMBIA: Peso Leads Emerging-Market Drop Amid Brexit Fallout --------------------------------------------------------------- Christine Jenkins at Bloomberg News reports that the Colombian peso posted the biggest decline amid an emerging-market slump as Britain's decision to exit the European Union roiled markets for a second day, adding to concern about the outlook for the Latin American nation's economy. The peso fell 2.8 percent at the close of trading, the worst decline among developing-nation currencies, according to Bloomberg News' June 28 report. Sterling depreciated 3.6 percent and earlier reached a three-decade low of $1.3121 that surpassed its weakest levels during the panicked selling on June 24. Traders' bets on swings in the peso over the next month are the second-highest in Latin America, and the world's riskier assets have been under pressure since the U.K. vote raised concerns that an already-fragile global economic recovery will falter as trade snarls in one of the world's biggest consumer blocs, Bloomberg News discloses. Colombia's current account deficit makes it especially vulnerable to the external turmoil and a decline in prices for its oil exports, according to German Cristancho, the head of research at Corredores Davivienda, the report adds. "It's part of the sensitivity that we consider the peso has from the high current account deficit the country has maintained," the report quoted Mr. Cristancho as saying. "Today with the fall in oil prices and the increase in risk premiums, it's normal to see this selloff in the currency." The country's current account deficit, the broadest measure of trade in goods and services, is forecast to end 2016 near the highest in at least 30 years, Bloomberg News relays. Colombia exported $969 million of goods to the U.K. in 2015, or 2.3 percent of its total exports, making it the Latin American country most reliant on trade with Britain, according to Bloomberg data. Oil extended declines to trade near $46 a barrel as the market remained volatile. =================================== D O M I N I C A N R E P U B L I C =================================== DOMINICAN REPUBLIC: Taiwan, Dominican Leaders Talk Investment ------------------------------------------------------------- Dominican Today reports that as soon as he set foot on Panamanian soil to attend the Panama Canal's expansion celebration, president Danilo Medina met with Taiwan counterpart Tsai Ing-wen. Among the topics the two leaders discussed figured investment by Taiwan companies in Dominican Republic, which Taiwan's president says will continue to surge in the coming years, according to Dominican Today. During the meeting held at her request, Tsai Ing-wen congratulated Mr. Medina for an overwhelming win in the last elections and his second term in office, the report notes. Mr. Medina invited Taiwan's head of state to his inaugural on August 16, whereas Tsai Ing-wen invited him to visit the prosperous Asian nation, the report relays. Mr. Medina recently congratulated Tsai Ing-wen on her elections victory, becoming Taipei's first woman President. "I present these congratulations on behalf of the people and the Government of the Dominican Republic, and on my own behalf, together with fervent wishes that her administration in the Taiwanese government will achieve the greatest success," Mr. Medina said at the meeting, accompanied by several senior officials, 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'. ================= G U A T E M A L A ================= BANCO DE LOS TRABAJADORES: Moody's Lowers Deposit Ratings to B1 --------------------------------------------------------------- Moody's Investors Service downgraded the long-term local and foreign currency deposit ratings of Guatemala's Banco de los Trabajadores (Bantrab) and the foreign currency senior debt rating of Bantrab Senior Trust (BST) to B1 from Ba3. BST is a Cayman- Island based trust guaranteed by Bantrab. At the same time, the rating agency downgraded the bank's baseline credit assessment (BCA) and adjusted BCA to b2 from b1 and its long-term counterparty risk assessment to Ba3(cr) from Ba2(cr). All of the ratings and assessments are on review for further downgrade. These ratings and assessments were downgraded: Banco de los Trabajadores: Long term local and foreign currency deposit ratings to B1 from Ba3, on review for downgrade Baseline credit assessment and adjusted baseline credit assessment, to b2 from b1, on review for downgrade. Long term, counterparty risk assessment to Ba3(cr) from Ba2(cr), on review for downgrade. Bantrab Senior Trust: Long term foreign currency senior debt rating to B1 from Ba3, on review for downgrade RATINGS RATIONALE The downgrade reflects Bantrab's loss of all of its correspondent banking lines which if not addressed in a timely manner could potentially prevent the bank from paying the November 2016 coupon of BST's global bond. As of last year, Bantrab had correspondent banking relationships in the U.S, which it relied upon to help administer the coupon payments on BST's bonds. Moody's bank analyst Georges Hatcherian said that "the loss of Bantrab's final correspondent line in May 2016 appears to reflect in part concerns by the counterparty regarding the recent seizure by Guatemala's Public Ministry (PM) in April 2016 of Bantrab's non-voting preferred shares that had been held by Panama-based DHK Finance Inc". This development occurred in a context of a large political scandal in Guatemala and a generalized increase in risk aversion of international banks towards Central America due to rising apprehensions about weaknesses in regional banks' and regulators' anti-money laundering controls. The share seizure, following which Moody's revised the bank's outlook to negative, was in response to allegations by Guatemala's Superintendency of Banks that the funds used to purchase these shares were obtained illegally and that potential wrongdoing might have occurred during the sale of those shares to DHK. Bantrab's senior management reports that it is actively looking to secure new correspondent banking lines at the moment. Even if the bank manages to obtain new lines, however, they are likely to come a significant cost and their stability will remain uncertain. Moody's also expects the bank's profitability to be negatively affected by potentially lower loan growth as management focuses on stabilizing funding and addressing possible flaws in its internal governance and controls, rather than growing its business. The review will focus on Bantrab's ability to secure new stable and reasonably priced correspondent banking lines in a timely manner. Moody's will also reassess the probability that the bank will benefit from public support with a focus on any measures Guatemala's Superintendency of Banks and central bank may take to help ensure the bank's ability to repay foreign bondholders despite the loss of its correspondent lines. Bantrab's B1 deposit ratings currently benefit from one notch of lift from the b2 BCA to reflect a moderate probability of public support. This assumption is based on Bantrab's important role as lender of consumer loans to Guatemalan public sector employees jointly with the bank's government inception. WHAT COULD CHANGE THE RATINGS DOWN Bantrab's ratings could be downgraded further if the bank does not manage to obtain new stable and reasonably priced correspondent banking lines in a timely manner, or if Guatemala's Superintendency of Banks and central bank appear less willing to take measures to help ensure the timely payment of BST's bond than Moody's previously viewed them to be. The last rating action on Bantrab and on Bantrab Senior Trust was on April 25, 2016, when Moody's affirmed the bank's and trust's ratings, and changed the outlook to negative from stable. The principal methodology used in these ratings was Banks published in Janaury 2016. Based in Guatemala City, Banco de los Trabajadores reported total consolidated assets of about US$ 2.3 billion (GTQ 17.9 billion) and shareholders' equity of around US$ 214 million (GTQ 1.7 billion), as of March 2016. =========== M E X I C O =========== GRUPO ELEKTRA: Fitch Affirms 'BB-' LT Issuer Default Ratings ------------------------------------------------------------ Fitch Ratings has affirmed Grupo Elektra, S.A.B. de C.V.'s (Elektra) Long-Term Foreign-and Local-Currency Issuer Default Ratings (IDR) at 'BB-' and National Long-Term Rating at 'A(mex)'. The Rating Outlook is Stable. Elektra's ratings are supported by its market position in the retail business as one of the main Mexican department store chains, operational and financial linkage with Banco Azteca S.A. (BAZ; rated 'A+(mex)'/'F1(mex)' ), as well the company's sizable liquidity position and financial flexibility. The ratings also consider the company's foreign exchange exposure of its debt and part of its inventories and the controlling ownership by the Salinas family. KEY RATING DRIVERS Strong Market Position Elektra's market position is supported by the diversification of its operations and the linkage with BAZ, one of the Mexican banks with most granularity in the country. Elektra has a nearly 66-year track record in the commercialization of durable goods, with operations in six Latin American countries including Mexico. The company also has a presence in the U.S. through its subsidiary Advance America (AEA), a payday lending and other short-term financial services provider. Elektra generates about 72% of the group's consolidated revenues in Mexico (including retail and financial businesses). However, Fitch believes that the retail operation, by diversifying geographically across Latin America, somewhat mitigates revenue concentration. BAZ Supports Elektra's Ratings The linkage between Elektra's retail and financial divisions is strong as both depend on another to complete service offerings to customers. The retail division complements its product sales by offering BAZ credit services while BAZ maintains a strong base of customer derived from Elektra and Salinas y Rocha's shoppers. BAZ's ratings consider the bank's robust position in its main market, consumer loans, giving it a considerable competitive advantage, as well as its still high and stable interest margins. Furthermore, they incorporate the bank's adequate ability to absorb losses, its solid funding structured through an ample, stable, diversified and low-cost base of core customer deposits. Stable Leverage Expected Elektra's ratings, which incorporate total adjusted debt to EBITDAR of the retail operation, but excludes the banks in Mexico and Latin America, should be close to 3.5x over the long term. For the latest-12-months (LTM) as of March 31, 2016, the retail division lease adjusted debt-to-EBITDAR (excluding non-cash items) was 3.6x and the adjusted net debt-to-EBITDAR was 3.0x, an improvement from the 4.3x and 3.4x a year before, respectively. As of March 2016, the retail business' total debt (excluding BAZ and other Latin American financial businesses) was MXN16.5 billion, down from MXN17.7 billion in the same period the previous year. Debt is composed of local and international debt issuances. Liquidity at the retail business is strong which gives the company flexibility to address refinancing needs or take advantage of business opportunities. Currency Exposure Partially Mitigated Elektra is exposed to currency variations as approximately 63% of the company's retail debt is denominated in USD. However, this exposure is partially mitigated by Advance America (AEA) cash flows and money transfer fees collected in USD by Elektra. Furthermore, some of Elektra's inventory is related to USD, which could potentially pressure profit margins for some products if this effect is not reflected in price increases or might affect sales volumes if the effect is passed through prices. Nonetheless, Fitch believes the company should have the flexibility to face these effects by changing its sales mix or extending its credit periods to customers, among other measures. KEY ASSUMPTIONS Fitch's key assumptions within the rating case for the issuer include: -- Revenue growth for retail business of 7.8% average per year and EBITDA margin of 18% per year; -- Decreasefa in AEA revenues for 2016-2017 and EBITDA margin of 11.5% per year; -- Revenue growth for BAZ of 7.5% average per year and EBITDA margin of 11.8% per year; -- Annual growth of 5.8% in banking deposits; -- Accounts receivables portfolio growing at 8.5% per year; -- NPL provisions of MXN8.9 billion per year; -- Capex of MXN3.1 billion annually; -- Dividend payments growing about the Mexican inflation rate; -- Improvements in supplier negotiations and inventory management. RATING SENSITIVITIES Future developments that may, individually or collectively, lead to negative rating actions include sustained adjusted debt to EBITDAR for the retail division above 5.0x, sustained adjusted net debt to EBITDAR for the retail division above 4.0x (including readily available cash equivalents, as per Fitch's calculations), a breach of covenants, as well as deterioration in Banco Azteca's creditworthiness. Factors that may, individually or collectively, lead to positive rating actions include a sustained decrease in adjusted leverage and adjusted net leverage for the retail division to levels below 3.5x and 2.5x, respectively; a strengthening of the bank's creditworthiness coupled with solid performance of the retail business revenue and cash flow dynamics, as well as greater diversification in banking sources and Fitch's perception of a strengthening in corporate governance. LIQUIDITY Elektra's liquidity position is sound. As of March 31, 2016, cash for the retail division was MXN1.8 billion and short-term debt was MXN87 million. During March and April of 2016, Elektra issued MXN5.5 billion of CBs in the local market to refinance maturities due on 2016. Fitch believes that Elektra's MXN15.9 billion marketable financial instruments portfolio could provide additional liquidity if required. FULL LIST OF RATING ACTIONS Fitch has affirmed the following ratings: -- Long-Term Foreign- and Local-Currency Issuer Default Rating (IDR) at 'BB-'; -- Long-Term National Rating at 'A(mex)'; -- Short-Term National Rating at 'F2(mex)'; -- USD550 million senior notes due 2018 at 'BB-'; -- MXN5.0 billion unsecured CBs (ELEKTRA 16) due 2019 at 'A(mex)'; -- MXN0.5 billion unsecured CBs (ELEKTRA 16-2) due 2023 at 'A(mex)'; -- Short-Term portion of Certificados Bursatiles program for up to MXN10 billion at 'F2(mex)'. The Rating Outlook is Stable. ====================== P U E R T O R I C O ====================== PUERTO RICO ELECTRIC: Fitch Cuts $8.2BB Rev. Bond Rating to 'C' --------------------------------------------------------------- Fitch Ratings has downgraded $8.2 billion of Puerto Rico Electric Power Authority (PREPA) power revenue bonds to 'C' from 'CC'. In addition, Fitch is assigning an Issuer Default Rating (IDR) of 'C' to PREPA in anticipation of a distressed debt exchange, which will allow Fitch to reflect the potentially different effects of the exchange on outstanding securities. The bonds remain on Negative Rating Watch. The IDR is placed on Negative Rating Watch. SECURITY The power revenue bonds are secured by a senior lien on net revenues of the electric system. KEY RATING DRIVERS RESTRUCTURING OR DEFAULT APPEARS INEVITABLE: The downgrade and maintenance of the Negative Watch reflect Fitch's view that a payment default or restructuring of PREPA's debt obligations is inevitable. Although existing agreements between PREPA and certain creditors (including bondholders) have provided temporary relief, a key component of PREPA's restructuring plan is the reduction of existing debt by means of a proposed distressed debt exchange. PREPA is seeking to complete its restructuring by Dec. 31, 2016. CASH FLOW CONCERNS REMAIN: PREPA's net cash receipts and existing funds on hand remain insufficient to meet long-term working capital, debt service and other funding requirements. Although debt service payments due July 1, 2016 may be paid, funding for such payments is likely to come from existing bond purchase agreements with existing creditors and new re-lending agreements. FISCAL 2014 AUDIT RELEASED: PREPA's most recent audited performance (fiscal year ended June 30, 2014) was weak as Fitch- calculated debt service fell to 0.69x, cash on hand totaled only 24 days and leverage rose to 16.1x (total debt/funds available for debt service). The opinion of PREPA's auditor (Ernst & Young LLP) also notes that the financial difficulties experienced by the authority raise substantial doubt about its ability to continue as a going concern. FINANCIAL PERFORMANCE REMAINS WEAK: For the 12 months ended June 30, 2015, PREPA reported unaudited earnings before interest and depreciation of $770 million, but a change in net position of ($320 million). The net loss was larger than PREPA's budgeted loss of $198 million. Poor performance for the fiscal year was further characterized by declining energy sales (1.6% for the period), declining customers (0.4%), high concentrations of accounts receivable (25% of revenue), high fuel costs (12.3 cents/kWh) and an unwillingness to increase base electric rates. RATING SENSITIVITIES NONPAYMENT OR DISTRESSED DEBT EXCHANGE: The Puerto Rico Electric Power Authority's failure to meet debt service obligations as scheduled or execution of a distressed debt exchange, where creditors are offered securities with diminished structural or economic terms compared with the existing power revenue bonds to avoid a probable payment default, would result in a downgrade of the Issuer Default Rating to 'RD' and any affected securities to 'D'. Securities that continue to perform will have ratings maintained at 'C'. *********** 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 * * *