/raid1/www/Hosts/bankrupt/TCRLA

/raid1/www/Hosts/bankrupt/TCRLA_Public/160824.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, August 24, 2016, Vol. 17, No. 167 Headlines A R G E N T I N A ARGENTINA: President Says Over $35 Billion Invested in Projects B A H A M A S BAHA MAR: Prime Minister Silent as Megaresort Crisis Drags On B R A Z I L BANCO BTG: Fitch Affirms 'BB-' Long-term Issuer Default Ratings BRB BANCO DE BRASILIA: Fitch Affirms 'B' ST Issuer Default Ratings BANCO DO ESTADO: Fitch Affirms 'BB-' LT Issuer Default Ratings BANESTES SA: Fitch Affirms 'BB-' Long-term Issuer Default Ratings BANRISUL: Fitch Affirms 'B' Short-term Issuer Default Ratings ISA CAPITAL: Fitch Affirms 'BB+' Long-term Issuer Default Ratings C A Y M A N I S L A N D S BCM (CAYMAN): Shareholders' Final Meeting Set for Sept. 2 CHEYNE EUROPEAN: Shareholders' Final Meeting Set for Sept. 6 DELOS LONG: Shareholder to Hear Wind-Up Report on Sept. 29 MONZA INVESTMENTS: Shareholders' Final Meeting Set for Sept. 12 MSR ASIA: Shareholders' Meeting Set for Sept. 16 OC 521: Shareholders' Final Meeting Set for Sept. 8 POINT FOUR: Shareholders' Final Meeting Set for Sept. 6 SPECIAL OPPORTUNITIES I: Shareholders' Meeting Set for Sept. 27 SPECIAL OPPORTUNITIES: Shareholders' Meeting Set for Sept. 27 TOTANA INC: Shareholders' Final Meeting Set for Sept. 6 URJA HOLDINGS: Shareholders' Final Meeting Set for Sept. 12 D O M I N I C A N R E P U B L I C * DOMINICAN REPUBLIC: Funds Mean 'Big Boost' for Sugar Industry J A M A I C A JAMAICA: Correspondent Banking Issue Being Addressed M E X I C O CULIACAN MUNICIPALITY: Moody's Cuts Issuer Ratings to B1/Baa3.mx P A N A M A FINANCIERA GENEROSA: Bankrupt With US$22 Million in Debt P U E R T O R I C O BUILDERS HOLDING: Case Summary & 20 Largest Unsecured Creditors EJS INCORPORADO: Asks for Nov. 14 Extension of Plan Filing Date - - - - - ================= A R G E N T I N A ================= ARGENTINA: President Says Over $35 Billion Invested in Projects --------------------------------------------------------------- EFE News reports that President Mauricio Macri said that $35 billion had been invested in "hundreds" of new business projects in Argentina since he took office in December. "More than $35 billion in projects have been launched," President Macri said during the opening of a new distribution center belonging to Drogueria del Sud, the largest drugstore chain in Argentina, according to EFE News. "This is not an economic change, but a cultural one," the president said at the distribution center in Avellaneda, a city in Buenos Aires province, the report notes. The late founder of Drogueria del Sud, Silvio Macchiavello, promoted "trust" in the workplace and passed on these values to his daughters, who now run the company," President Macri said, the report relays. The new distribution center reflects what is possible when there is a combination of Argentine human resources and "the best technology in the world," President Macri said, the report discloses. Argentina will become "a little better" each day once every citizen understands that when they create obstacles to getting work done, they "complicate the lives of others," President Macri added, notes the report. Buenos Aires Gov. Maria Eugenia Vidal said the new center would show how capable Argentines are because now they will have "the most modern distribution plant in Latin America," 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 upgraded Argentina's Long- term local-currency Issuer Default Rating (LT LC IDR) to 'B' from 'CCC', with a Stable Outlook. Fitch has affirmed Argentina's Long- term foreign-currency (FC) IDR at 'RD' and the short-term FC IDR at 'RD'. In addition, Fitch has upgraded the Country Ceiling to 'B' from 'CCC'. ============= B A H A M A S ============= BAHA MAR: Prime Minister Silent as Megaresort Crisis Drags On ------------------------------------------------------------- Royston Jones Jr. at Caribbean News Now reports that nearly a month after Bahamas Prime Minister Perry Christie said the Export- Import Bank of China (EXIM) should be in a position to announce a new buyer for bankrupt megaresort Baha Mar within a "few weeks", Mr. Christie refused to answer questions about the derailed project. On local radio on July 19, Mr. Christie said, "We are closer to a resolution with the project than we have ever been before, according to Caribbean News Now. The report notes that Mr. Christie said: "Events are taking place rapidly. I think the next few weeks in the scheme of things in our country will be important weeks when it comes to the final decision making with respect to Baha Mar. "I think the bank, that is the China Export-Import Bank, is ready to present a possible buyer to us. "We would need to know who that is, so we are able to begin investigations. "The bank would have only chosen someone with an incredible capacity to finance [a] $2.5 billion deal and finish it. "So, these things are in progress. "I think we are closer than we have ever been before." At the time, Mr. Christie professed that "better days are coming," the report relays. However, when asked about Baha Mar and its new buyer, Mr. Christie declined to comment. When pressed for a response outside the House of Assembly, Mr. Christie said, "We are close. Soon," the report notes. It is an expression the prime minister has used repeatedly in relation to Baha Mar, the report relays. Last December, Mr. Christie said he expected a "major move" that could see the troubled project completed "early in the new year," the report says. But Baha Mar remains shuttered and in receivership. When contacted about a possible new buyer, Baha Mar's receiver- manager Ray Winder, managing partner of Deloitte & Touche, said there was nothing new to report, Caribbean News relays. Members of the opposition have said the Christie administration has proven to be "incompetent, delusional and asleep at the wheel" in dealing with the troubled project, notes the report. In May, Mr. Christie announced that EXIM and China State Construction Engineering Corporation (CSCEC) had entered into a "framework agreement" to remobilize construction to complete Baha Mar, the report says. Mr. Christie has repeatedly said the government is committed to providing all necessary assistance required for remobilization and completion of the project, which included the establishment of a task force in the Office of the Prime Minister to "enable proper coordination between government agencies," the report notes. It is unclear whether that task force was created and what role if any it would serve, adds Caribbean News. Last month, Granite Ventures, one of Baha Mar developer Sarkis Izmirlian's holding companies, filed in the Bahamian Supreme Court to have Baha Mar fully liquidated, something Christie previously called a "chilling prospect," the report relays. The next substantive winding up hearing for Baha Mar is set for September 30, the report notes. The full liquidation application is expected to be reviewed during that hearing. Izmirlian filed for Chapter 11 protection in Delaware on June 29, 2015. The government made a counter move in Bahamian courts. All of the Chapter 11 cases have since been dismissed, the report adds. About Baha Mar Orlando, Florida-based Northshore Mainland Services Inc., Baha Mar Enterprises Ltd., and their affiliates sought protection under Chapter 11 of the Bankruptcy Code on June 29, 2015 (Bankr. D.Del., Case No. 15-11402). Baha Mar owns, and is in the final stages of developing, a 3.3 million square foot resort complex located in Cable Beach, Nassau, The Bahamas. The bankruptcy cases are assigned to Judge Kevin J. Carey. The Debtors are represented by Paul S. Aronzon, Esq., and Mark Shinderman, Esq., at Milbank, Tweed, Hadley & McCloy LLP, in Los Angeles, California; and Gerard Uzzi, Esq., Thomas J. Matz, Esq.,and Steven Z. Szanzer, Esq., at Milbank, Tweed, Hadley & McCloy LLP, in New York. The Debtors' Delaware counsel are Laura Davis Jones, Esq., James E. O'Neill, Esq., Colin R. Robinson, Esq., and Peter J. Keane, Esq., at Pachulski Stang Ziehl & Jones LLP, in Wilmington, Delaware. The Debtors' Bahamian counsel is Glinton Sweeting O'Brien. The Debtors' special litigation counsel is Kobre & Kim LLP. The Debtors' construction counsel is Glaser Weil Fink Howard Avchen & Shapiro LLP. The Debtors' investment banker and financial advisor is Moelis Company LLC. The Debtors' claims and noticing agent is Prime Clerk LLC. =========== B R A Z I L =========== BANCO BTG: Fitch Affirms 'BB-' Long-term Issuer Default Ratings --------------------------------------------------------------- Fitch Ratings has affirmed Banco BTG Pactual S.A. (BTG Pactual) and its related entities' ratings and removed them from Rating Watch Negative. A Negative Outlook was assigned to Banco BTG Pactual, BTG Investments LP and BTG Pactual Holding S.A.'s Long- Term Issuer Default Ratings (LT IDRs). A Negative Outlook was also assigned to Banco Pan and its subsidiaries (Brazilian Finance & Real Estate S.A. [BFRE]), mirroring the outlook of its main source of support, Caixa Economica Federal (Caixa). At the same time, Fitch has affirmed BTG Pactual's national ratings at 'A-(bra)' and Pan's national ratings at 'A+(bra)'. A Stable Outlook was assigned to all National Long-Term Ratings. A full list of rating actions follows at the end of this release. KEY RATING DRIVERS BTG Pactual Group (BTG Pactual, BTG Investments and BTG Pactual Holding) The removal of the rating of BTG Pactual from Rating Watch Negative reflects Fitch's recognition of the stabilization of the bank's liquidity, its comfortable capitalization and the successful management of its crisis situation. Its financial profile remains solid with good earnings generation, controlled asset quality while signs of a slow rebuilding of its funding franchise can already be perceived. As such, Fitch believes that no further deterioration of its ratings and risk profile are expected and Rating Watch Negative is no longer necessary. Management has demonstrated its ability to address its liquidity crisis, by building a large liquidity cushion, reducing the bank's leverage and addressing concerns regarding possible implications of rumoured suspicious transactions through a thorough review made by a legal counsel formed by leading law firms, consultants and investigators that were hired by independent members of its Administrative Board. The review found no evidence of any wrongdoing or any potential exposure to litigations stemming from these transactions. This has somehow helped the bank to isolate itself from the accusations faced by its main controller and former CEO, which are now being reviewed by a lower court after being transferred from Brazil's Supreme Court after former Senator Delcidio do Amaral was impeached due to his involvement in this scandal. A resolution on Mr. Esteves case given this change could take longer than previously anticipated. The Negative Outlook assigned to BTG Pactual's IDRs capture the challenges imposed by the current operating environment, which in Fitch's view continues to present a negative trend. From a corporate governance standpoint, the bank took measures to address the negative impacts on its franchise, caused by the arrest of its former CEO and main shareholder, Andre Esteves. The steps included well-succeed reorganization of its ownership structure, reducing Mr. Esteves power to return to the bank without the concurrence of the group of main partners. The asset sale of non-core assets was also successful and helped to improve the bank's liquidity position and should help it to repay the remaining portion of the funding facility obtained with FGC during the liquidity crisis. The current exposure stands at BRL1.8 billion and should be fully repaid once the sale of BSI is finalized. In terms of risk appetite and credit risk exposures, an active sale of loan portfolios at market prices helped to restore the bank's liquidity but also reduced the bank's credit risk exposure to some sensitive names at an opportune time as credit profiles of several large corporate names have deteriorated over the year. The reduction of BTG's global markets and merchant banking exposures at the group level were already part of the group's strategic plan and were accelerated by the push to improve liquidity levels and bode well in terms of reducing the bank's risk exposures and leverage. SUBSIDIARIES AND AFFILIATED COMPANIES PAN, BFRE, BM, BS Pan and its subsidiaries LT IDRs were affirmed at 'BB-' and its Rating Watch Negative was also removed, following BTG's Negative Rating Watch removal announced. The long-term International ratings Outlook is now Negative, mirroring that of Caixa's IDRs, its main source of support, which in turn is aligned with the outlook for Brazil's sovereign ratings. Pan's ratings are notched one level from Caixa LT IDRs. Pan's Viability Rating (VR) at 'b' factors in that the bank's business plan has been largely constrained over the last years by the weak operating environment, which has limited a complete turnaround of its operating performance. The operational losses also stem from Pan's heavy legacy costs, which include expensive funding structures. An unfavourable market scenario has further deteriorated and not allowed the bank to grow as fast as necessary to achieve targeted profitability improvements. In fact, the economic recession scenario has led to additional cost control measures, such as the reduction of the number of executives, aimed at matching the bank's team to a continued weak economic environment, which should have a positive effect on the bank's results in the medium term. Fitch believes that Pan's subsidiaries (BFRE, BM and BS) will also receive the same support from Caixa in case of need. This is justified by the subsidiaries' active role, synergies and full integration with Pan. BFRE, BM and BS are fully owned subsidiaries of Pan that operate in an integrated manner with the bank and are fully consolidated in the bank, being subject to same regulatory oversight. RATING SENSITIVITIES BTG Pactual Group's IDRs and VR The potential for an upgrade on BTG Pactual's IDRs is limited in the short and medium term due to the challenges imposed by the current operating environment. The bank's ratings could be downgraded in case of a steep deterioration of its profitability metrics to levels below an operating profit ROAA of 1% and Fitch Core Capital falls below 10%. Though there is a lower risk of this scenario materializing, BTG Pactual's ratings could be downgraded in the event of any accusation of wrongdoings and/or official investigations are unveiled related to the bank's business and operations that result in pressures on the bank's reputation and further weaken its franchise and financial profile. BTG Pactual Group's National Ratings BTG Pactual's National Ratings could be revised in the near term depending on the stabilization of the improvements already observed on its financial profile, mainly considering its funding and liquidity profile and maintenance of its profitability. Pan and Subsidiaries Pan's IDRs could be downgraded if Caixa reduces its ability or propensity to provide support to Pan. Changes in funding and credit sales agreements provided by Caixa, or in Pan's shareholder's structure, could also trigger a negative rating action. Also, changes on the sovereign rating that lead to changes in Caixa's ratings would directly affect Pan's IDRs. In addition, Pan's ratings will remain sensitive to those of BTG, as the latter continues to equally share control of Pan meaning that potential downgrades of BTG's ratings can impact Pan's ratings, too - which is not our current base case scenario. A downgrade to Pan's VR could be triggered by successive net losses combined with a backdrop of capital ratios falling to even lower levels (Fitch Core Capital ratio stood at 8.7% in June 2016). The following ratings were affirmed and have been removed from Rating Watch Negative and where applicable the respective Outlooks assigned: Banco BTG Pactual S.A. -- Long-Term Foreign and Local Currency IDRs at 'BB-', Negative Outlook; -- Short-Term Foreign and Local Currency IDRs at 'B'; -- Viability Rating at 'bb-'; -- Long-term National Rating at 'A-(bra)'; Stable Outlook; -- Short-term National Rating at 'F2(bra)'; -- Senior unsecured notes, due in September 2017, foreign currency rating at 'BB-'; -- Senior unsecured notes due in January 2020, foreign currency rating at 'BB-'; -- Senior unsecured notes due in January 2034, foreign currency rating at 'BB-'; -- Subordinated notes due in September 2022, foreign currency rating at 'B'; -- Perpetual non-cumulative junior subordinated notes, foreign currency rating at 'B-'. BTG Investments LP -- Long-Term Foreign and Local Currency IDRs at 'B+'; Negative Outlook; -- Support Rating at '4'; -- Senior guaranteed notes at 'BB-'. BTG Pactual Holding S.A. -- Long-Term Foreign and Local Currency IDRs at 'BB-', Outlook Negative; -- Short-Term Foreign and Local Currency IDRs at 'B'; -- Long-term National Rating at 'A-(bra)'; Outlook Stable; -- Short-term National Rating at 'F2(bra)'. Banco Pan S.A. -- Long-Term Foreign and Local Currency IDRs at 'BB-', Outlook Negative; -- Short-Term Foreign and Local Currency IDRs at 'B'; -- Viability Rating at 'b'; -- Support Rating at '3'; -- Long-term National Rating at 'A+(bra)'; Outlook Stable; -- Short-term National Rating at 'F1(bra)'. Brazilian Finance & Real Estate S.A. -- Long-Term Foreign and Local Currency IDRs at 'BB-', Outlook Negative; -- Short-Term Foreign and Local Currency IDRs at 'B'; -- Long-term National Rating at 'A+(bra)'; Outlook Stable; -- Short-term National Rating at 'F1(bra)'. Brazilian Mortgages Cia Hipotecaria -- Long-Term Foreign and Local Currency IDRs at 'BB-', Outlook Negative; -- Short-Term Foreign and Local Currency IDRs at 'B'; -- Long-term National Rating at 'A+(bra)'; Outlook Stable; -- Short-term National Rating at 'F1(bra)'; Brazilian Securities Cia de Securitizacao -- Long-Term Foreign and Local Currency IDRs at 'BB-', Outlook Negative; -- Short-Term Foreign and Local Currency IDRs at 'B'; -- Long-term National Rating at 'A+(bra)'; Outlook Stable; -- Short-term National Rating at 'F1(bra)'. BRB BANCO DE BRASILIA: Fitch Affirms 'B' ST Issuer Default Ratings ------------------------------------------------------------------ Fitch Ratings has affirmed the Long-Term Issuer Default Ratings (LT IDRs) of BRB - Banco de Brasilia S.A. and downgraded the bank's Viability Rating (VR) to 'b+' from 'bb-'. KEY RATING DRIVERS IDRs, NATIONAL RATINGS AND SUPPORT RATINGS BRB's IDRs and National Ratings are driven by support from its controlling shareholder, the Government of Distrito Federal (GDF). The affirmation of BRB's ratings reflect that the current rating levels already take into account Fitch's internal assessment of the Government of Distrito Federal (GDF). BRB is strategically important for GDF as it acts as the state's tax-collecting agent, carry out transfers to municipalities, and is responsible for the cash management of the state. In addition, BRB has relevant business with state public entities to which they provide services and grant credit to suppliers and public servants, via special payroll deductible loans. The upgrade of the Support Rating to '3' from '4' reflects a smaller differentiation between Fitch's internal analysis of the parent and the support driven LT IDRs assigned to BRB, which is consistent with Fitch's assessment of support according to its criteria. GDF holds 96.8% of BRB's voting shares. BRB's activities are concentrated in the Federal District (DF), and it operates with a network of 121 branches, which cover all of DF's administrative regions. VR Fitch downgraded BRB's VR to 'b+' from 'bb-' due to the bank's weak performance in 2015 and 1Q16, affected by a sharp increase in credit costs, reflecting vulnerabilities of its asset quality. In addition to that, the bank's capitalization should also suffer from the weak internal capital generation. BRB's VR reflects its regional importance and local franchise. The bank's profitability has fallen sharply as a result of the deterioration on the operating environment, the recovery of which should be slow and gradual. As such, profitability and asset quality remain under pressure as well as internal capital generation. On a positive note, the bank counts on good funding access through its branch network and has maintained a good liquidity position. RATING SENSITIVITIES IDRS, NATIONAL RATINGS AND SUPPORT RATINGS Fitch carries out internal analysis of GDF and BRB's IDRs. National and Support Ratings are based on the expected support of the state and are therefore strongly influenced by this analysis. As such, any changes to GDF's financial strength that hampers its ability to provide support or any change in Fitch's view about GDF's propensity to provide support to BRB could lead to a change on the bank's ratings. VR BRB's VR could be downgraded again if BRB's FCC ratio falls to less than 7% and if the bank's Operating ROAA remains below 0.5% for a prolonged period. An upgrade of BRB's VR would be conditional to a sharp recovery on its profitability to levels of Operating ROAA superior to 0.8% and an improvement on FCC to levels above 10%. Fitch has taken the following rating actions: BRB - Banco de Brasilia S.A -- Long-Term Local and Foreign Currency IDRs affirmed at 'BB- (bra)'; Outlook Negative; -- Short-Term Foreign and Local Currency IDRs affirmed at 'B' -- Long-Term National Rating downgraded to 'A+(bra)' from 'AA- (bra)', Outlook revised to Stable from Negative; -- Short-Term National Rating downgraded to 'F1(bra)' from 'F1+(bra)'; -- Support Rating upgraded to '3' from '4'; -- Viability Rating downgraded to 'b+' from 'bb-'. BANCO DO ESTADO: Fitch Affirms 'BB-' LT Issuer Default Ratings -------------------------------------------------------------- Fitch Ratings has downgraded Banco do Estado do Rio Grande do Sul S.A.'s (Banrisul) Long-Term National Rating to 'A+(bra)' from 'AA- (bra)'. The Outlook for the Long-Term National Rating is Negative. Fitch has also affirmed the bank's Long-Term Foreign and Local Currency IDRs (Issuer Default Ratings) at 'BB-'. The Outlook for the IDRs remains Negative. KEY RATING DRIVERS The downgrade of Banrisul's national ratings reflects the deterioration in its capitalization and profitability ratios, as a result of its purchase of the exclusive rights to be provide banking services to Estado do Rio Grande do Sul's (ERS) active and retired employee base for a period of 10 years, for BRL1.3 billion, in June 2016. From 2007 until May 2016, Banrisul had an exclusivity agreement with ERS free of charge to the bank. Intangible assets resulting from this transaction has negatively affected Banrisul's capitalization ratios, whereby its Fitch Core Capital (FCC) declined to 13% in June 2016, from 14.8% in December 2015. Fitch expects Banrisul's profitability ratios to remain under pressure, although the bank has been posting higher net interest margins since 2014. Similar to other public banks, Banrisul's strategies and goals could be influenced by the economic-financial situation and by the political guidelines of its main shareholder, the government of ERS. Banrisul's Viability Rating (VR) and its IDRs reflect the regional importance of the bank, its stable retail funding base, and adequate profitability and liquidity ratios. A potential deterioration of the bank's asset quality could result in higher provisioning expenses and undermine its profitability and internal capital generation. The Negative Outlook for Banrisul's ratings reflects Fitch's expectation of deterioration in the bank's asset quality and capitalization, as a result of the ongoing challenges to the financial profile of ERS. The bank's ratings are influenced by Fitch's internal evaluation on ERS's credit standing. The Support Rating '4' and the Support Rating Floor 'B' reflect the limited possibility of support from the federal government in a stress scenario, due to the relative systemic importance of Banrisul. The bank ranked as the 11th largest financial institution in the country, in terms of assets and the 8th in terms of deposits, in March 2016. However, there are no explicit guarantees of such support from the federal government. During 2015 and in the first half of 2016, NPLs showed deterioration, mainly in corporate credit and amounted to 4.8% of the portfolio, in June 2016 (4.3% in 2015 and 3.4% in 2014). Although in Fitch's view, the quality of Banrisul's loan portfolio is still acceptable, the agency expects additional deterioration along 2016. Banrisul operates as a commercial bank, targeting both companies and to individuals. It has a solid franchise in ERS, with 17% of market share in credits and 47% in deposits. Credits to ERS employees account for approximately 15% of the bank's credit portfolio. Banrisul's Debt Financial Bills: The issuances of national unsecured debts rank pari passu with the bank's other senior unsecured debts and their ratings are in line with the bank's Long-Term National Rating. Subordinated Tier 2 USD Notes: Banrisul's subordinated notes due in January 2022 are rated 'B' by Fitch, two notches below the bank's VR of 'bb-'. The notching includes one notch for loss severity and the notes' subordinate position, and another notch for the moderate risk of performance failure. These notes rank pari passu with the other subordinated debts of the bank and rely on a cumulative coupon deferral mechanism which can be exercised in case the minimum regulatory capital requirements are not met. These notes are being phased out, since they are not Basel III compliant. RATING SENSITIVITIES Negative Rating Action: Banrisul ratings could be downgraded in case of further weakening of asset quality ratios, with NPL increase above 5%, or even, if FCC declines to less than 12%. Furthermore, the bank's ratings could be impacted by changes to the agency's view of ERS's credit standing, given the strong operation of the bank in that state. Positive Rating Action: Banrisul's Outlook could be revised to Stable if the bank maintains adequate profitability, even in an adverse economic environment, expressed by the Operating Profit/Average Gross Assets ratio above 2%, together with good asset quality ratios, NPLs around 3% and FCC of 14%. FULL LIST OF RATING ACTIONS Fitch has taken the following rating actions: -- Long-Term Foreign and Local Currency IDRs affirmed at 'BB-'; Outlook Negative; -- Short-Term Foreign and Local Currency IDRs affirmed at 'B'; -- Viability Rating affirmed at 'bb-'; -- Support Rating affirmed at '4'; -- Support Rating Floor affirmed at 'B'; -- Long-Term National Rating downgraded to 'A+(bra)' from 'AA- (bra)'; Outlook Negative; -- Short-Term National Rating downgraded to 'F1(bra)' from 'F1+ (bra)'; -- First issuance of senior unsecured credit facility financial bills downgraded to 'A+(bra)' from 'AA-(bra)'; -- Tier II Capital subordinate notes, to be due in February 2022, affirmed at 'B'. BANESTES SA: Fitch Affirms 'BB-' Long-term Issuer Default Ratings ----------------------------------------------------------------- Fitch Ratings has affirmed Banestes S.A. - Banco do Estado do Espirito Santo's (Banestes) ratings. KEY RATING DRIVERS Banestes' Issuer Default Ratings (IDRs) are driven by its 'bb-' Viability Rating (VR), which reflects the bank's regional franchise, adequate overall financial profile with better-than- its-peers earnings generation, liquidity and capitalization and stable funding sources very similar to those of its regional peers. The bank's asset quality is slightly inferior to its peers mostly due to the composition of its loan book, which includes a more representative SME lending portfolio, given the characteristics of the companies operating in the state of Espirito where the bank is located. Banestes' business model relies on low-cost retail funding, provided by its branch network, mainly in the state of Espirito Santo. The bank counts on a reasonably well diversified product offer that reduces its dependence on credit related revenues when compared with its peers. The bank has also tried to cautiously diversify its funding base by issuing Financial Bills (Letras Financeiras) in the local market and increasing its funding in real estate credit bills (LCIs). A change in Fitch's internal analysis of Banestes' main controlling shareholder, the Estado do Espirito Santo (EES), would impact the bank's VR, as Fitch sees limited room for placing Banestes' VR above its parent's internal assessment. The Rating Outlook on the bank's Long-Term IDRs is Negative, reflecting the fact that as a retail bank Banestes' VR would be impacted by any additional deterioration of the operating environment that could lead to a sovereign downgrade. Such a scenario would also impact Fitch's internal analysis of EES and consequently Banestes' VR and IDRs. The Support Rating of '4' reflects a moderate probability of support from its controlling shareholder, EES. In Fitch's opinion, Banestes is strategically important for EES, acting as its main tax-collecting agent, carrying out transfers to municipalities, and is responsible for the state's cash management. In addition, state public entities, which the bank provides services and grants credit to suppliers, as well as special payroll deductible loans to public servants, generates an important part of the bank's business. EES controls 92% of Banestes' capital. The bank's activities are concentrated in EES, where it holds a market share of 46% of time deposits and 15% of loan operations, with a network of 132 branches, in all of the state's 78 cities. RATING SENSITIVITIES Banestes' VR is sensitive to a change in Fitch's assumptions regarding exposure to regional risk, capitalization and credit quality. The VR could be downgraded if Banestes' credits past due over 90 days rises above 6% and/or the Fitch Core Capital (FCC) ratio falls below 10%. Fitch's internal analysis on the State of Espirito Santo could affect the bank's ratings. Therefore, Banestes' ratings would be impacted by any change in these states' financial strength and/or in its willingness to provide support to these subsidiaries. Fitch affirms the following ratings: Banestes S.A. - Banco do Estado do Espirito Santo's (Banestes): -- Long-Term Foreign and Local Currency IDRs at 'BB-'; Outlook Negative; -- Short-Term Foreign and Local Currency IDRs at 'B'; -- Long-Term National Rating at 'A+(bra)'; Outlook Stable; -- Short-Term National Rating at 'F1(bra)'; -- Support Rating at '4'; -- Viability Rating at 'bb-'. BANRISUL: Fitch Affirms 'B' Short-term Issuer Default Ratings ------------------------------------------------------------- Fitch Ratings has taken various rating actions on the following banks controlled by Brazilian subnationals: -- Banestes S.A. - Banco do Estado do Espirito Santo (Banestes), -- Banco do Estado de Sergipe (Banese) -- Banco do Estado do Rio Grande do Sul S.A. (Banrisul) -- Banco de Brasilia S.A. (BRB)). The Issuer Default Ratings (IDRs) of Banestes and Banrisul and Banese's National Rating are driven by their standalone performance. BRB's IDRs are driven by support from Distrito Federal. Fitch internally assesses the respective financial and economic standing of each bank's controlling subnational, as their main shareholders and given their strong performance in the region of their controllers, such assessments can influence the ratings of these public banks. The credit profiles of these four banks remain highly sensitive to further operating environment deteriorations in the respective regions where their operations are concentrated. The Outlook for Banrisul, Banestes and BRB's IDR is Negative. For Banese, Fitch only assigns a National Rating. The Rating Outlook is currently Negative due to the operating environment and the weakening of a few performance ratios, after adjustments to the conglomerate's card company. These four institutions operate as commercial banks oriented both to companies and to individuals. Their performance is strong in the region of their controlling subnational. With strong franchises, they offer a wide array of banking products that allows them to compete in their regions against larger banks with nationwide operations. These four banks heavily service public servants in their regions and could be affected by any potential difficulties faced by subnationals to pay their obligations. Similar to other state-owned companies, the strategies and targets of these four banks can be influenced by the state's economic- financial situation and by political interference from their respective main shareholders. However, Fitch notes that these four banks are able to operate with relative autonomy. Governmental changes for the controlling subnationals can lead to more frequent changes in the four banks' executive boards than their private peers. As a general rule, the subnational banks have reduced their appetite for risk, much like their private sector peers have. This becomes evident in their growth trends, which have shown more modest ratios than in the past. The asset quality indicators of these four banks have deteriorated in 2015 and in the first quarter of 2016. Fitch believes that the deterioration should continue until end-2016, due to the continued economic recession in Brazil and the controlling subnationals, maintenance of high inflation and unemployment rates, as well as the weak outlook for most corporate sectors. Fitch has taken the following rating actions: Banrisul -- Long-Term Foreign and Local Currency IDRs affirmed at 'BB-'; Outlook Negative; -- Short-Term Foreign and Local Currency IDRs affirmed at 'B'; -- Viability Rating affirmed at 'bb-'; -- Support Rating affirmed at '4'; -- Support Rating Floor affirmed at 'B'; -- Long-Term National Rating downgraded to 'A+(bra)' from 'AA-(bra)'; Outlook Negative; -- Short-Term National Rating downgraded to 'F1 (bra)' from 'F1+(bra)'; -- Rating of the first issuance of senior unsecured financial bills downgraded to 'A+(bra)' from 'AA-(bra)'; -- Rating of the Tier II capital subordinate notes, due in February 2022, affirmed at 'BB-'. BRB -- Long-Term Foreign and Local Currency IDRs affirmed at 'BB-'; Outlook Negative; -- Short-Term Foreign and Local Currency IDRs affirmed at 'B'; -- Viability Rating Downgrade to b+ from 'bb-' ; -- Support Rating Upgraded to '3' from '4'; -- Long-Term National Rating downgraded to 'A+(bra)' from 'AA-(bra)'; Outlook Stable; -- Short-Term National Rating downgraded to 'F1 (bra)' from 'F1+(bra)'; Banestes -- Long-Term Foreign and Local Currency IDRs affirmed at 'BB-'; Outlook Negative; -- Short-Term Foreign and Local Currency IDRs affirmed at 'B'; -- Viability Rating affirmed at 'bb-'; -- Support Rating affirmed at '4'; -- Long-Term National Rating affirmed at 'A+(bra)'; Outlook Stable; -- Short-Term National Rating affirmed at 'F1+ (bra)'; Banese -- Long-Term National Rating affirmed at 'BBB+(bra)'; Outlook Negative; -- Short-Term National Rating affirmed at 'F3 (bra)'; ISA CAPITAL: Fitch Affirms 'BB+' Long-term Issuer Default Ratings ----------------------------------------------------------------- Fitch Ratings has affirmed ISA Capital do Brasil S.A.'s (ISA Capital) Long-Term Foreign and Local Currency Issuer Default Ratings (IDRs) at 'BB+', and its National scale rating at 'AA+(bra)'. In addition, Fitch has affirmed the company's USD31.6 million outstanding senior secured notes at 'BBB-'. The Rating Outlook for the Foreign Currency IDR is Negative, and Stable for the Local Currency IDR and National Scale rating. Concurrently, Fitch has upgraded Companhia de Transmissao de Energia Eletrica Paulista S.A.'s (CTEEP) National scale rating to 'AAA(bra)' from 'AA+(bra)', with a Stable Outlook. The rating action also applies to its first and fourth debenture issuances due in 2017 and 2021, respectively. KEY RATING DRIVERS CTEEP's upgrade reflects Fitch's view that the company will strengthen its financial profile in the coming years based on the receipt of additional compensation of estimated BRL5-6 billion mainly related to the early renewal of its main power transmission concession at the beginning of 2013. CTEEP will receive this amount over eight years starting in 2017 through its monthly tariff. The agency expects net leverage below 2.0x from 2018 absent acquisitions and investments in new projects. CTEEP's strong credit quality is attributable to the low business risk of the power transmission sector in Brazil, with predictable operating cash flow. The ratings also factored in the company's necessity to maximize dividend distribution to help its controlling shareholder ISA Capital to meet its obligations, as well as the moderate regulatory risk of the Brazilian power sector. ISA Capital's ratings reflect the credit profile of CTEEP, its sole operating asset and dividend source. ISA Capital's obligations are structurally subordinated to CTEEP's. The holdco only owns 37.3% of CTEEP's total capital and does not receive the full amount of dividends paid by the transmission company. Fitch considers that ISA Capital's financial flexibility may benefit from the market value of its CTEEP shares in case dividends received from CTEEP are not sufficient to meet its obligations. Our analysis also does not consider any support from ISA Capital's controlling shareholder Interconexion Electrica S.A. E.S.P. (ISA) ('BBB+'/Negative Outlook). The one-notch rating uplift for ISA Capital outstanding bonds reflects its enhanced recovery prospects due to the refinancing of the majority of its debt with (subordinated, debt-like) preferred equity. The 2017 bonds are currently overcollateralized. The USD31.6 million (BRL114 million) of outstanding bonds is secured by 66% of ISA Capital's shares of CTEEP, a stake which is currently valued at approximately BRL2.3 billion based on CTEEP's market cap value of BRL10.4 billion. CTEEP's Robust Credit Metrics Fitch expects CTEEP's financial leverage and liquidity to continuously improve as a result of growing cash generation from the additional compensation related to the early renewal of its main concession and grid reinforcement investments related revenue. Fitch views as positive the recent determination by the Ministry of Mines and Energy that the amount of complementary compensation for the concession renewal defined by the Brazilian regulatory agency for the power sector (ANEEL) should be paid for eight years, after the tariff review in July 2017. ANEEL has already indicated an additional estimated minimum of BRL5 billion- 6 billion (BRL3.9 billion as of 2012). Net leverage should remain below 2.0x after 2017, also benefitting from the release of corporate guarantees to non-controlling subsidiaries. For the latest 12 months (LTM) ended June 30, 2016, CTEEP's total adjusted debt (including BRL1.4 billion guarantees to non-controlling subsidiaries) was BRL2.5 billion, leading to total adjusted debt-to-EBITDA ratio of 4.4x, or 3.7x considering net adjusted debt. Increasing Operational Cash Flow CTEEP's cash flow generation is very predictable, exhibiting the low business risk profile of a power transmission company. CTEEP's revenues are exempt from volumetric risk as its maximum permitted annual revenue (PAR) is based on the power transmission assets available to users, instead of the power transmitted. After a significant decrease in cash flow generation due to the company acceptance of the government proposal for early renewal of its main concession, cash flow has benefited from additional revenues from reinforcement investments. For the LTM ended June 30, 2016, net revenues reached BRL1.1 billion, with EBITDA of BRL566 million, according to Fitch criteria. In 2015, net revenues and EBITDA were BRL1 billion and BRL461 million, respectively. Fitch expects CTEEP's free cash flow (FCF) to turn negative after 2016 due to high capex needs and an increase in annual dividends payout, following the receipt of the complementary compensation for the concession renewal. Also for the LTM ended June 30, 2016, cash flow from operations (CFFO) and FCF were BRL349 million and BR9 million, respectively. As of June 2016, the company had forecasted grid-reinforcement capex of BRL1 billion until 2019, which together with formerly realized investments since 2013 is expected to generate an increase of BRL800 million in revenues until 2019. Low Business Risk Fitch considers the transmission segment as the lowest-risk segment in the Brazilian power sector. CTEEP's credit profile benefits from its exclusive right to provide electricity transmission services through its multiple concessions. CTEEP currently participates in eight concessions in operation with an equivalent participation of 1.826 km. This reduces the company's exposure to the risks associated with the construction phase. Structural Subordination ISA Capital's credit quality reflects the company's structural subordination to CTEEP's obligations. ISA Capital owns only 37.3% of CTEEP's total capital and receives this proportional stake of the dividends paid by the transmission company. ISA Capital is expected to use the proceeds it receives from CTEEP, together with its cash on-hand (BRL21 million as of March 2016) to partially pay its debt. At the end March 2016, ISA Capital's debt was BRL906 million, mostly comprised of the remaining portion of its 2017 bonds (BRL114 million) not tendered during 2010 and the obligations to redeem its preferred shares of BRL792 million. Fitch believes that ISA Capital will have to raise additional cash to meet debt obligations, since dividends flow from CTEEP in 2016 should not be sufficient. Annual dividends from the transmission company are expected to increase only after the complimentary compensation for the concession renewal is received (after July 2017). In 2016, ISA Capital's controlling shareholder has repaid a BRL86 million Intercompany loan, which added to its liquidity. ISA Capital has also lengthened its preferred share repurchase schedule with the preferred shareholders. The program of acquiring the BRL891 million of preferred shares was extended to 2020 with a two-year grace period (2016-2017). KEY ASSUMPTIONS Fitch's key assumptions for CTEEP within the rating case include: -- Current transmission tariffs adjusted by inflation annually; -- Dividend payments of BRL110 million in 2016, BRL294 million in 2017 and BRL325 million in 2018; -- Annual average capex of BRL361 million from 2016 to 2019; -- Corporate guarantees to non-controlling subsidiaries fully released until the end of 2017. Fitch's key assumptions for ISA Capital within the rating case include: -- Dividend receipts of BRL41 million in 2016, BRL109 million in 2017 and BRL120 million in 2018. RATING SENSITIVITIES Future developments that may individually or collectively lead to a negative rating action at CTEEP includes: -- Sizeable investments or acquisitions currently not in the company's business plan that could lead to net leverage consistently above 3.5x; -- CFFO + Cash and equivalents/short-term debt ratio below 1.5x. Future developments that may individually or collectively lead to a negative rating action at ISA Capital includes: -- A downgrade of CTEEP's rating; -- Difficulty in meeting its obligations based on lower dividends to be received from CTEEP or failure of potential alternative cash inflows; -- A downgrade of the sovereign rating should trigger a downgrade of the foreign currency IDR. An upgrade in ISA Capital's ratings is not likely in the medium term. If the Outlook for the sovereign rating is revised to Stable from Negative, the Outlook on the company's foreign currency IDR should also follow the same movement. LIQUIDITY CTEEP's financial profile benefits from its robust liquidity position. As of June 30, 2016, as per Fitch methodology, cash and cash equivalents of BRL426 million was sufficient to cover short- term debt of BRL255 million by 1.7x. Liquidity should improve based on the potential complementary compensation due after July 2017. CTEEP also had comfortable short-term debt coverage when considering FFO + cash and cash equivalents)/short-term debt at 3.0x. ISA Capital's liquidity was reduced by BRL21 million in March 2016. FULL LIST OF RATING ACTIONS Fitch has upgraded the following ratings: Companhia de Transmissao de Energia Eletrica Paulista S.A. (CTEEP) -- National Scale rating to 'AAA(bra)' from 'AA+(bra)'; -- National Scale rating Debentures 1st issuance due in 2017, to 'AAA(bra)' from 'AA+(bra)'; -- National Scale rating debentures 4th issuance due in 2021, to 'AAA(bra)' from 'AA+(bra)'. The Rating Outlook is Stable. Fitch has affirmed the following ratings: ISA Capital do Brasil S.A. (ISA Capital) -- Long-Term Local Currency Issuer Default Rating (IDR) at 'BB+; Outlook Stable -- Long-Term Foreign Currency IDR at 'BB+'; Outlook Negative; -- National Scale rating at 'AA+(bra)'; Outlook Stable; -- Senior secured notes outstanding USD31.6 million at 'BBB-'. ========================== C A Y M A N I S L A N D S ========================== BCM (CAYMAN): Shareholders' Final Meeting Set for Sept. 2 --------------------------------------------------------- The shareholders of BCM (Cayman) Ltd will hold their final meeting on Sept. 2, 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: Castlebrook Group Limited c/o Intertrust Corporate Services 190 Elgin Avenue, George Town Grand Cayman KY1-9005 Cayman Islands CHEYNE EUROPEAN: Shareholders' Final Meeting Set for Sept. 6 ------------------------------------------------------------ The shareholders of Cheyne European High Yield Fund Inc. will hold their final meeting on Sept. 6, 2016, at 10:30 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 Cayman Liquidators Limited c/o Jo-Anne Maher 94 Solaris Avenue, Camana Bay P.O. Box 1348 Grand Cayman KY1-1108 Cayman Islands Telephone: (345) 814-9255 Facsimile: (345) 949-4647 DELOS LONG: Shareholder to Hear Wind-Up Report on Sept. 29 ---------------------------------------------------------- The shareholder of Delos Long Short Fund, Ltd. will hear on Sept. 29, 2016, the liquidator's report on the company's wind-up proceedings and property disposal. The company's liquidator is: Fides Limited c/o Dwight Dube P.O. Box 10338 Grand Cayman The Grand Pavilion, 2nd Floor Commercial Centre Cayman Islands KY1-1003 Telephone (345) 949 7232 MONZA INVESTMENTS: Shareholders' Final Meeting Set for Sept. 12 --------------------------------------------------------------- The shareholders of Monza Investments Limited will hold their final meeting on Sept. 12, 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: Summit Management Limited c/o David Egglishaw Telephone: 945 7676 Suite # 4-210, Governors Square P.O. Box 32311 Grand Cayman KY1-1209 Cayman Islands MSR ASIA: Shareholders' Meeting Set for Sept. 16 ------------------------------------------------ The shareholders of MSR Asia Acquisitions XII, Inc. will hold their final meeting on Sept. 16, 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 OC 521: Shareholders' Final Meeting Set for Sept. 8 --------------------------------------------------- The shareholders of OC 521 Master Fund, Ltd. will hold their final meeting on Sept. 8, 2016, at 10:00 a.m., to receive the liquidator's report on the company's wind-up proceedings and property disposal. The company's liquidator is: Walkers Liquidations Limited 27 Hospital Road, George Town Grand Cayman KY1-9008 Cayman Islands POINT FOUR: Shareholders' Final Meeting Set for Sept. 6 ------------------------------------------------------- The shareholders of Point Four Limited will hold their final meeting on Sept. 6, 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: Stanislas Le Carpentier Saffery Champness (Suisse) S.A. Boulevard Georges-Favon 18 1204 Geneva Switzerland Telephone: +41 22 319 09 75 Facsimile: +41 22 319 09 77 Website: http://www.saffery.ch SPECIAL OPPORTUNITIES I: Shareholders' Meeting Set for Sept. 27 --------------------------------------------------------------- The shareholders of Special Opportunities Portfolio I S.P.C. will hold their final meeting on Sept. 27, 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: Westport Services Ltd. c/o Evania Ebanks P.O. Box 1111 Grand Cayman KY1-1102 Cayman Islands Telephone: (345) 949 5122 Facsimile: (345) 949 7920 SPECIAL OPPORTUNITIES: Shareholders' Meeting Set for Sept. 27 ------------------------------------------------------------- The shareholders of Special Opportunities Portfolio Limited will hold their final meeting on Sept. 27, 2016, at 9:15 a.m., to receive the liquidator's report on the company's wind-up proceedings and property disposal. The company's liquidator is: Westport Services Ltd. c/o Evania Ebanks P.O. Box 1111 Grand Cayman KY1-1102 Cayman Islands Telephone: (345) 949 5122 Facsimile: (345) 949 7920 TOTANA INC: Shareholders' Final Meeting Set for Sept. 6 ------------------------------------------------------- The shareholders of Totana Inc., BWI will hold their final meeting on Sept. 6, 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: UBS Trustees (Cayman) Ltd. c/o Valerie Mullen Cayman Corporate Centre, 5th Floor 27 Hospital Road, George Town Grand Cayman Cayman Islands Telephone: + 345 814 7052 Facsimile: + 345 949 9219 URJA HOLDINGS: Shareholders' Final Meeting Set for Sept. 12 ----------------------------------------------------------- The shareholders of Urja Holdings Limited will hold their final meeting on Sept. 12, 2016, at 9:30 a.m., to receive the liquidator's report on the company's wind-up proceedings and property disposal. The company's liquidator is: Summit Management Limited c/o David Egglishaw Telephone: 945 7676 Suite # 4-210, Governors Square P.O. Box 32311 Grand Cayman KY1-1209 Cayman Islands =================================== D O M I N I C A N R E P U B L I C =================================== * DOMINICAN REPUBLIC: Funds Mean 'Big Boost' for Sugar Industry --------------------------------------------------------------- Dominican Today reports that on his first surprise visit, after the inaugural of his second term in office on August 16, President Danilo Medina met with more than 2,000 sugar industry representatives, in Guerra, Santo Domingo province, where government funding was the topic of interest. President Medina and several senior officials visited the east region town where he discussed the needs of the sector with the heads of six associations with more than 2,000 members in four provinces and eight municipalities, according to Dominican Today. Operators of plantations told President Medina they want to transform more than 2,000 hectares for sugarcane and requested financing for RD$147 million, the report notes. President Medina reiterated government support through the State Sugar Council (CEA) which will speed up construction of a plant to produce raw brown sugar (panela) and announced an analysis by experts to determine its viability, the report notes. Sweet Rebound Administrative minister Jose Ramon Peralta said sugarcane has again become a profitable crop in the last four years, and stressed that President Medina "will give it a big boost over the next four years," the report notes. Also present in the activity were the ministers of Public Works, Gonzalo Castillo, and Angel Estevez, of Agriculture. As reported in the Troubled Company Reporter-Latin America on July 1, 2016, Moody's Investors Service has changed the outlook on the Dominican Republic's long term issuer and debt ratings to positive from stable. The ratings have been affirmed at B1. ============= J A M A I C A ============= JAMAICA: Correspondent Banking Issue Being Addressed ---------------------------------------------------- Denise Dennis at Caribbean News Now reports that Prime Minister Andrew Holness said the government of Jamaica is strengthening initiatives to tackle the threat of international banks ending their correspondent banking relationships with local financial institutions. In order to reduce reputational risks and be in compliance with international regulations, particularly relating to criminal activity, such as money laundering, fraud and terrorist financing, international banks have threatened to cut ties with banks in the region in a de-risking move, according to Caribbean News Now. The report notes that Mr. Holness, addressing a press conference on August 17, said he considers the issue "a clear and present danger". Mr. Holness noted that the government is working assiduously to lobby banking counterparts in the United States, as well as to engage local banks on ways to mitigate the threat, the report relays. Mr. Holness added that the government has held a series of consultations with stakeholders and has been working closely with banks to ensure compliance with international standards, the report relays. Mr. Holness said he has also met with the Bank of Jamaica and the ministry of finance and the public service, to facilitate further discussion on the matter, the report notes. "At CARICOM, all the leaders agree that we would make a concerted effort to lobby the United States on ensuring that the correspondent banking issue does not de-stabilise the fiscal and economic growth security of the countries," the report quoted Mr. Holness as saying. The prime minister emphasized that countries in the region must move quickly to ensure that their legislative and regulatory frameworks align as much as possible with international banking requirements, the report notes. "The process is ongoing and I think that there is an evolving understanding on the part of the US regulators about the Jamaican challenges and the threats that de-risking poses," Mr. Holness said, the report relays. Correspondent banking involves banks in large countries facilitating certain transactions for other banks, the report says. This may include wire transfers, business transactions, deposits and gathering of documents on behalf of the other financial institution, the report discloses. CARICOM has indicated that it will be hosting a global conference in the Caribbean aimed at strengthening this advocacy, 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 =========== CULIACAN MUNICIPALITY: Moody's Cuts Issuer Ratings to B1/Baa3.mx ---------------------------------------------------------------- Moody's de Mexico downgraded the issuer ratings of the Municipality of Culiacan to B1/Baa3.mx from Ba3/Baa1.mx. The outlook remains negative. At the same time, Moody's de Mexico downgraded debt ratings of the MXN 498 million loan (original face value) with Banorte to Ba1/A1.mx from Baa3/Aa3.mx (Global Scale, local currency). RATINGS RATIONALE The downgrade of the Municipality of Culiacan's issuer ratings reflects the deterioration of liquidity in conjunction with higher risk and uncertainty around the timely and full payment of upcoming short-term obligations. The rating action also reflects the decline of gross operating margins. Until 2012, Culiacan recorded a positive net working capital to total expenditures ratio. However, since 2013 this ratio has been deteriorating, reaching a minimum of -13.2% in 2015, compared with the 3.9% in 2011. This has resulted in a more intensive use of short-term debt. As of June 2016, Culiacan reports two short-term loans, the first one with Banco Interacciones (secured with federal transfers) with maturity on September 30, 2016 and an outstanding balance of MXN 27.9 million, and a second with Banco Banregio (unsecured) with maturity on August 31, 2016 and an outstanding balance of MXN 62 million. It should be noted that according to information provided by the municipality, to date both credits have been paid in full and in a timely manner. However in consideration of the bullet payment of the loan with Banregio and the tight liquidity of the municipality Moody's expects that Culiacan will struggle to pay the total amount of the balance of this short term loan and will need to refinance this debt. Moody's will continue to closely monitor the payment status of both loans and its possible impact on the issuer ratings. Despite Culiacan's efforts to control operating expenditure growth, gross operating margins decreased from 5.3% in 2011 to - 4.9% in 2015, given the increase seen in salaries and in general services. Moody's estimates that the deficit will stand at -3.1% at the end of the year and that the liquidity will remain very tight. The negative outlook reflects the uncertainty of Culiacan's capacity to respect all upcoming debt service payments on short term debt obligations in a full and timely manner as well as the ongoing challenges to improve consistently its operating balances and the Moody's expectation that liquidity will remain very tight. The rating downgrade of the MXN 498 million (original face value) enhanced loan with Banorte reflects the downgrade of Culiacan's issuer ratings. Per Moody's methodology on rating enhanced loans, the loan ratings are directly linked to the credit quality of the issuer, which ensures that underlying contract enforcement risks, economic risks and credit culture risks (for which the issuer rating acts as a proxy) are embedded in the ratings of the enhanced loan. WHAT COULD CHANGE THE RATING UP/DOWN Given the negative outlook, a rating upgrade in the medium term is unlikely. The ratings could stabilize if the municipality honors all bank liabilities in a full and timely manner, in conjunction with an improvement in its operating margins and liquidity. Conversely, the ratings could be further downgraded if Culiacan fails to pay in full and timely manner all of its short-term debt obligations. Also a further deterioration in the liquidity position and the persistence of negative gross operating balances will likely lead to a downgrade on issuer ratings. Given the links between the loan and the credit quality of the obligor an upgrade/downgrade of the issuer ratings could exert upward/downward pressure on debt ratings for the enhanced loans. Also, if debt service coverage metrics improve/fall materially below our expectations, the ratings could face upward/downward pressure. The methodologies used in these ratings were Regional and Local Governments published in January 2013, and 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 Culiacan, Municipality of's rating is between 1/1/2011 and 12/31/2015 (source: issuer). =========== P A N A M A =========== FINANCIERA GENEROSA: Bankrupt With US$22 Million in Debt -------------------------------------------------------- Caribbean News Now reports that Financiera Generosa, a Panamanian money services business, owing more than US$22 million in bonds and commercial paper, has gone into bankruptcy, and creditors fear that their security, where it actually exists, was grossly overvalued by company officers, giving rise to criminal liability on the part of a number of officers and directors. Generosa, whose legal name is Finanzas y Creditos del Hogar SA, and which was heavily involved in the finance of commercial buildings, especially hotel construction, was unable to meet its debt service as it came due, particularly its bond issues, and has been forced into bankruptcy, according to Caribbean News Now. Money services businesses in Panama are typically involved in finance, unlike those in other countries, the report notes. Its President, Jose Luis Ford Hernandez, has been confined to his home and prohibited from leaving the country; criminal charges have been filed against him, the report relays. Multiple law suits against the company have been pending for the last four years. Panama's securities regulator, the SMV, posted a notice of the bankruptcy on its website, the report discloses. Institutional creditors, many of whom are holding Generosa obligations in the millions of dollars, are in danger of losing their entire investment, the report says. This scandal, the biggest to hit Panama since the Petaquilla Mining insider trading case, will further reduce the confidence that investors have in Panama's economy, and the ability of its commercial ventures to meet their obligations, the report notes. ====================== P U E R T O R I C O ====================== BUILDERS HOLDING: Case Summary & 20 Largest Unsecured Creditors --------------------------------------------------------------- Debtor: Builders Holding Co., Corp. PO Box 1333 Gurabo, PR 00778 Case No.: 16-06643 Chapter 11 Petition Date: August 20, 2016 Court: United States Bankruptcy Court District of Puerto Rico (Old San Juan) Debtor's Counsel: Fausto David Godreau, Esq. GODREAU & GONZALEZ LAW PO Box 9024176 San Juan, PR 00902 Tel: (787) 726-0077 E-mail: dg@g-glawpr.com Total Assets: $9.72 million Total Liabilities: $10.53 million The petition was signed by Ismael Carrasquillo Sanchez, president. A copy the Debtor's list of 20 largest unsecured creditors is available for free at http://bankrupt.com/misc/prb16-06643.pdf EJS INCORPORADO: Asks for Nov. 14 Extension of Plan Filing Date --------------------------------------------------------------- EJS Incorporado asks the U.S. Bankruptcy Court for the District of Puerto Rico to extend its exclusive period to file a chapter 11 plan and disclosure statement to November 14, 2016. The Debtor relates that it was originally scheduled to file its Disclosure Statement and Chapter 11 Small Business Plan on August 15, 2016. The Debtor further relates that it had not been able to file its monthly operating reports because the accountant authorized by the Court had resigned. The Debtor contends that it will submit a proposal for a new accountant with the Court within the next 14 days. The Debtor further contends that it cannot file a disclosure statement and plan on time because of the situation with its accountant, who is essential to the preparation and filing of its disclosure statement and plan. About EJS Incorporado EJS Incorporado aka EJS Inc. filed a chapter 11 petition (Bankr. D.P.R. Case No. 16-01647) on March 1, 2016. The petition was signed by Jose Manuel Rodriguez Amador, president. The Debtor is represented by Ada M. Conde, Esq., at Ada M. Conde, Esq. The case is assigned to Judge Edward A. Godoy. The Debtor estimated assets at $0 to $50,000 and liabilities at $1 million to $10 million at the time of the filing. *********** 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 commercial 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 * * *