/raid1/www/Hosts/bankrupt/TCRLA_Public/160928.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, September 28, 2016, Vol. 17, No. 192
Headlines
A R G E N T I N A
ARGENTINA: Changes Inflation Target Methods, Keeps Weekly Schedule
B A R B A D O S
BARBADOS: Gets Another Ratings Cut; Not All Bad, Says Minister
C A Y M A N I S L A N D S
ALPHA-BETA: Members' Final Meeting Set for Oct. 6
ATLANTIC SECURITY: S&P Affirms 'BB+' ICR; Outlook Remains Stable
AVON INSURANCE: Members' Final Meeting Set for Oct. 4
BANCO MERCANTIL: Moody's Assigns Ba1 Rating on 2 Proposed Notes
COIF SPV 3/11: Members' Final Meeting Set for Oct. 6
GOLDMAN SACHS QUANTITATIVE: Members' Final Meeting Set for Oct. 6
INSTINCT DARK: Shareholder to Hear Wind-Up Report on Oct. 11
INSTINCT JAPAN: Shareholder to Hear Wind-Up Report on Oct. 11
IOL CARETAKER: Members' Final Meeting Set for Oct. 4
LAURION CAPITAL: Member to Hear Wind-Up Report on Oct. 5
LAURION CAPITAL MASTER: Member to Hear Wind-Up Report on Oct. 5
PETERSHILL US: Shareholders' Final Meeting Set for Oct. 6
PETERSHILL US (MANLEY): Shareholders' Final Meeting Set for Oct. 6
RM INVESTMENT: Shareholders' Final Meeting Set for Oct. 5
U.S. HOUSING: Shareholders' Final Meeting Set for Oct. 6
E C U A D O R
ECUADOR: Colombia Peace to Cut Border Spending by 80%
E L S A L V A D O R
LA HIPOTECARIA: Fitch Assigns 'BBsf' Rating to Series A Sr. Notes
J A M A I C A
JAMAICA: S&P Affirms 'B' Sovereign Credit Ratings
P U E R T O R I C O
FASHION STYLE: Disclosures Conditionally OK'd; Hearing on Oct. 5
GLOBAL COMMODITY: Disclosure Statement Hearing Moved to Dec. 7
V E N E Z U E L A
PETROLEOS DE VENEZUELA: Will Not Renew Curacao Oil Refinery Lease
X X X X X X X X X
LATAM: Fitch Says Upside Potential Limited for Region
- - - - -
=================
A R G E N T I N A
=================
ARGENTINA: Changes Inflation Target Methods, Keeps Weekly Schedule
------------------------------------------------------------------
Luc Cohen at Reuters reports that Argentina's central bank will
continue to set its policy rate on a weekly basis in 2017 but will
no longer tie the rate to short-term Lebac securities, central
bank chief Federico Sturzenegger said.
The reference rate will now be the seven-day interbank lending
rate, which the central bank will determine weekly. Some analysts
had expected the central bank to move to monthly monetary policy
decisions, as in many developed economies, according to Reuters.
"This will give greater stability to reference rate prices," Mr.
Sturzenegger told reporters, the report notes.
The bank is seeking to contain inflation that economists see at
around 40 percent in 2016, also a priority of center-right
President Mauricio Macri, who appointed Mr. Sturzenegger and has
introduced a number of market-oriented reforms since taking office
in December, the report relays.
The bank will auction off Lebac on the third Wednesday of every
month rather than every week, he said. The market currently treats
the interest rate on the 35-day debt note as the reference rate,
the report notes.
Disassociating policy rates from debt issuance is a welcome step
as the central bank seeks to normalize its policies, said Federico
Furiase, an economist with consultancy Estudio Bein & Asociados in
Buenos Aires, the report discloses.
While weekly rate decisions remain abnormal by world standards,
regular communication with markets could help the central bank
restore credibility, Mr. Furiase said, the report notes.
"They're in a process of reconstructing their reputation," Mr.
Furiase said, adding that the assurance Mr. Sturzenegger gave that
the central bank principal objective was using interest rates to
lower inflation, rather than finance fiscal deficits, in itself
marked a "regime change" from the previous administration, the
report relays.
The central bank cut the interest rate on its short-term Lebac
securities for the eighth straight week, slashing them by 50 basis
points to 26.75 percent, citing indications that inflation was
falling as desired, the report notes. Rates had been as high as
38 percent in May.
Argentina's central bank will target inflation of 8 percent to 12
percent in 2018, down from a 12 percent to 17 percent target in
2017, the report adds.
Inflation should fall to around 5 percent in 2019, he said in a
presentation to explain the bank's inflation targeting strategy
for next year, notes the report.
* * *
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 R B A D O S
===============
BARBADOS: Gets Another Ratings Cut; Not All Bad, Says Minister
-------------------------------------------------------------
Caribbean360.com reports that a day after Standard and Poor's
downgraded Barbados' long-term foreign and local currency
sovereign ratings from 'B' to 'B-minus', Finance Minister Chris
Sinckler has told Barbadians not to be pessimistic about the
economy, saying that the glass was half full, not half empty.
The international credit rating agency also issued a "negative"
outlook for the island as it expressed concern that the Central
Bank continues to finance the Government's spiralling deficit,
which it stressed was at "odds with its goal to defend Barbados'
long standing currency peg with the U.S dollar," according to
Caribbean360.com.
However, a defiant Mr. Sinckler said as he addressed a credit
union's anniversary celebration at the Hilton Barbados Resort,
that the country must see the current circumstances, "not through
pessimistic lenses, but a lens that tells us that the glass in
Barbados is not half-empty, but in fact is half-full, and we're
working to go to the top," the report notes.
Acknowledging growing concern about the state of the economy, the
Finance Minister said there were challenges but he was adamant
that Barbados would return to growth and emerge stronger, the
report relays.
"Many would suggest that today as we go through varying levels of
stress within our society, and we see some social systems
challenged by new waves and new cultures, as we see economic
systems challenged by ongoing battering and buffering in the
international economy, and even in domestic policy choices, that
Barbadian society has reached a level of plateau from which we
will not recover," the report quoted Mr. Sinckler as saying.
"I do not share this view, however. I believe that the Barbados
society is repositioning itself for a new platform on which we
will launch a higher level of existence with better quality lives
and higher standards of living."
Mr. Sinckler stressed that just as the credit union movement
overcame its challenges and embraced new opportunities to become a
strong financial entity, Barbados could achieve the same and more
with the right approach, the report notes.
"We just have to ensure that the spirit, which guided the
creation, establishment and growth of credit unions such as this .
. . that we embrace that culture and ensure that we move our
society to a higher level of achievement," Mr. Sinckler added,
says the report.
As reported in the Troubled Company Reporter-Latin America on
Sept. 27, 2016, S&P Global Ratings lowered its long-term foreign
and local currency sovereign ratings on Barbados to 'B-' from 'B'.
The outlook is negative. The short-term ratings were affirmed at
'B.' S&P also downgraded its transfer and convertibility
assessment for Barbados to 'B-' from 'B'.
==========================
C A Y M A N I S L A N D S
==========================
ALPHA-BETA: Members' Final Meeting Set for Oct. 6
-------------------------------------------------
The members of Alpha-Beta Continuum SPV Ltd will hold their final
meeting on Oct. 6, 2016, at 10:10 a.m., to receive the
liquidator's report on the company's wind-up proceedings and
property disposal.
The company's liquidator is:
Walkers Liquidations Limited
Cayman Corporate Centre
27 Hospital Road, George Town
Grand Cayman KY1-9008
Cayman Islands
Telephone: +1 (345) 949 0100
ATLANTIC SECURITY: S&P Affirms 'BB+' ICR; Outlook Remains Stable
----------------------------------------------------------------
S&P Global Ratings Services affirmed its 'BB+' long- and 'B'
short-term issuer credit ratings on Atlantic Security Bank (ASB).
The outlook remains stable.
The ratings on ASB continue to reflect S&P's assessments of its
business position as weak due to a still modest loan portfolio and
narrow range of business lines, an adequate capital and earnings
underpinned by a projected RAC ratio of 8% for the next 18-24
months, and an adequate risk position as a result of almost no
NPAs and credit losses. The ratings also reflect S&P's view of
the bank's average funding and adequate liquidity. The bank's
stand-alone credit profile (SACP) remains at 'bb-'.
"The rating also incorporates our view of ASB's strategically
important subsidiary status to Peru-based Credicorp Ltd. and
Subsidiaries (Credicorp; not rated). We base this opinion on our
view that ASB remains important to the group's long-term strategy
and commitment to the bank, reflected in legal support and ASB's
financial flexibility. Moreover, ASB continues to act as Banco de
Credito del Peru's (BCP: BBB/Stable/A-2) private banking arm for
its Central American operations and Peruvian clients, especially
those that want to do business in this region. Credicorp also
owns BCP. We believe it's unlikely that group will sell ASB in
the near term," S&P asid.
AVON INSURANCE: Members' Final Meeting Set for Oct. 4
-----------------------------------------------------
The members of Avon Insurance Company, Ltd. will hold their final
general meeting on Oct. 4, 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:
Peter M. Boruta
c/o Campbells
Willow House, Floor 4, Cricket Square
Grand Cayman KY1-1103
Cayman Islands
Telephone: +1 (345) 949 2648
Facsimile: +1 (345) 949 8613
BANCO MERCANTIL: Moody's Assigns Ba1 Rating on 2 Proposed Notes
---------------------------------------------------------------
Moody's Investors Service has assigned (P)Ba1 (hyb) subordinated
debt ratings to the two proposed USD-denominated cumulative, non-
convertible, dated, loss absorbing Tier 2 subordinated capital
notes to be issued by Banco Mercantil del Norte, S.A. (Banorte)
through the bank's Cayman Islands Branch, Banco Mercantil del
Norte, S.A. (Cayman I) (Banorte Cayman).
The two capital notes, which may be issued in an aggregate amount
of up to USD1.5 billion, are Basel III-compliant, and the terms
and conditions have been designed to qualify the instruments as
Tier 2 capital. Management expects one of the issuances to have a
ten-year maturity and the other to have a fifteen-year maturity.
Banorte's other ratings are not affected by this transaction.
LIST OF ASSIGNED RATINGS
This rating was assigned to Banorte's cumulative non-convertible
Tier 2 subordinated notes with a 10-year maturity to be issued
through Banorte Cayman:
Long-term foreign currency junior subordinated debt rating of
(P)Ba1 (hyb)
This rating was assigned to Banorte's cumulative non-convertible
Tier 2 subordinated notes with a 15-year maturity to be issued
through Banorte Cayman:
Long-term foreign currency junior subordinated debt rating of
(P)Ba1 (hyb)
RATINGS RATIONALE
The assigned (P)Ba1 (hyb) ratings are positioned two notches below
Banorte's baa2 adjusted baseline credit assessment (adjusted BCA),
in line with Moody's standard notching guidance for cumulative
non-convertible subordinated securities with contractual loss
absorption provisions. The principal of the notes may be fully or
partially written-down at or close to the point of non-viability
(PONV), such as when the bank is subject to financial
rehabilitation, and/or upon the breach of capital triggers.
Under the terms of the subordinated notes, principal will be
partially or fully written down in the event that Banorte's Common
Equity Tier 1 Capital (Capital Fundamental) equals or falls below
4.5% of risk-weighted assets, or if the Mexican bank regulator
Comision Nacional Bancaria y de Valores (CNBV), in consultation
with the Mexican central bank, Banco de MÇxico (Banxico), makes a
determination, pursuant to Article 29 Bis of the Mexican Banking
Law (Ley de Instituciones de Credito) that a cause for revocation
of the bank's license has occurred and that the bank has not
addressed such cause for revocation in a timely manner.
Banorte also has the right to and will defer but not cancel
payment of interest and/or principal if the CNBV initiates any
corrective measure against the bank that requires the deferral of
payment of principal or interest pursuant Article 121 or Article
122 of the Mexican Banking Law or if the bank is classified at or
below Class III under Mexican capitalization requirements -- e.g.
if any of the bank's capitalization ratios fall below their
respective regulatory minima. No interest will accrue on any
deferred interest payments. The deferral of payment does not
represent an event of default under the indenture of the notes.
The two notch distinction between the ratings assigned to the
notes and Banorte's adjusted BCA therefore reflects: (1) the risk
of subordination in liquidation, where the capital notes (a) will
be subordinate and junior in right of payment and in liquidation
to all of Banorte's present and future senior indebtedness, (b)
will rank pari passu with all other unsecured subordinated
preferred indebtedness and (c) will be senior to subordinated non-
preferred indebtedness and to all classes of capital stock, and
(2) uncertainty regarding the timing of a write-down or coupon
deferral, which is in line with instruments that absorb losses on
a contractual basis through a full or partial principal write-down
at or close to the PONV. Proceeds of the notes will be used to
strengthen the bank's regulatory capital and for general corporate
purposes, according to management.
Unlike the bank's deposit and senior debt ratings of A3, the
ratings assigned to the junior subordinated notes does not benefit
from uplift stemming from government support. Moody's assesses a
low probability that the government of Mexico will support the
subordinated notes, which are intended to provide loss absorption,
whereas the probability that the government will support the
bank's depositors and senior bondholders is very high in light of
the bank's large deposit market share of 12.6% as of June 2016.
Banorte's baa2 standalone BCA takes into account its solid, stable
and diversified core earnings, ample access to retail deposit
funding and strong capitalization levels relative to most of
Mexico's other large banks. Banorte however has high single
borrower loan concentrations that leave it exposed to the
potential for a sharp and sudden deterioration in asset quality.
The current transaction will result in a significant increase in
Banorte's total regulatory capital ratio to nearly 18% according
to Moody's estimates. However, the issuance will not benefit the
bank's standalone credit profile, because the notes are not likely
to provide loss absorption prior to the PONV, and as such Moody's
does not ascribe capital credit to them.
Moody's issues provisional (P) ratings in advance of the final
sale of notes, but these ratings only represent Moody's
preliminary credit opinion. Upon a conclusive review of the
transaction and associated documentation, Moody's will endeavor to
assign definitive ratings to the hybrid subordinated notes. A
definitive rating may differ from a provisional rating.
WHAT COULD CHANGE THE RATINGS UP OR DOWN
The ratings on the notes could face downward pressure if a
slowdown in or further shock to the Mexican economy causes the
bank's profitability and/or asset quality to deteriorate.
Although Moody's does not currently anticipate this happening, the
ratings could also be pressured if the proceeds of the notes are
used to: (i) finance additional acquisitions, (ii) finance an
extraordinary dividend and if so effectively replace Tier 1
capital, and/or (iii) finance an aggressive expansion of the loan
book. Negative pressure would also accumulate if the bank does
not adequately hedge foreign exchange risk stemming from the
proposed USD debt issuance and/or the bank extends a large amount
of foreign currency loans to peso-earners.
Moody's sees limited upward ratings pressure at this juncture.
That said, the ratings could benefit from significant and
sustained improvements in profitability, provided asset risks are
contained at low levels and core capitalization does not
deteriorate.
COIF SPV 3/11: Members' Final Meeting Set for Oct. 6
----------------------------------------------------
The members of COIF SPV 3/11, Ltd. will hold their final meeting
on Oct. 6, 2016, at 10:20 a.m., to receive the liquidator's report
on the company's wind-up proceedings and property disposal.
The company's liquidator is:
Walkers Liquidations Limited
Cayman Corporate Centre
27 Hospital Road, George Town
Grand Cayman KY1-9008
Cayman Islands
Telephone: +1 (345) 949 0100
GOLDMAN SACHS QUANTITATIVE: Members' Final Meeting Set for Oct. 6
-----------------------------------------------------------------
The members of Goldman Sachs Quantitative Equity Country Selection
Fund Institutional, Ltd. will hold their final general meeting on
Oct. 6, 2016, at 10:40 a.m., to receive the liquidator's report on
the company's wind-up proceedings and property disposal.
The company's liquidator is:
Walkers Liquidations Limited
Cayman Corporate Centre
27 Hospital Road, George Town
Grand Cayman KY1-9008
Cayman Islands
Telephone: +1 (345) 949 0100
INSTINCT DARK: Shareholder to Hear Wind-Up Report on Oct. 11
------------------------------------------------------------
The shareholder of Instinct Dark Horse Fund will hear on Oct. 11,
2016, at 10:15 a.m., the liquidator's report on the company's
wind-up proceedings and property disposal.
The company's liquidator is:
Elian Fiduciary Services (Cayman) Limited
c/o Jonathan Morris
Telephone: +852 3656 6000
Ogier
Central Tower, 11th Floor
28 Queen's Road Central
Hong Kong
INSTINCT JAPAN: Shareholder to Hear Wind-Up Report on Oct. 11
-------------------------------------------------------------
The shareholder of Instinct Japan Opportunity Fund will hear on
Oct. 11, 2016, at 10:00 a.m., the liquidator's report on the
company's wind-up proceedings and property disposal.
The company's liquidator is:
Elian Fiduciary Services (Cayman) Limited
c/o Jonathan Morris
Telephone: +852 3656 6000
Ogier
Central Tower, 11th Floor
28 Queen's Road Central
Hong Kong
IOL CARETAKER: Members' Final Meeting Set for Oct. 4
----------------------------------------------------
The members of IOL Caretaker Ltd. will hold their final meeting on
Oct. 4, 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:
Eddie Lopez-Paz
c/o Forbes Hare
Cassia Court, Camana Bay
Suite 716, 10 Market Street
Grand Cayman KY1-9006
Cayman Islands
Telephone: +1-(345)-943-7700
LAURION CAPITAL: Member to Hear Wind-Up Report on Oct. 5
--------------------------------------------------------
The member of Laurion Capital Global Markets Fund Ltd. will hear
on Oct. 5, 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:
Elian Fiduciary Services (Cayman) Limited
c/o Jonathan Morris
Telephone: +852 3656 6000
Ogier
Central Tower, 11th Floor
28 Queen's Road Central
Hong Kong
LAURION CAPITAL MASTER: Member to Hear Wind-Up Report on Oct. 5
---------------------------------------------------------------
The member of Laurion Capital Global Markets Master Fund Ltd. will
hear on Oct. 5, 2016, at 11:15 a.m., the liquidator's report on
the company's wind-up proceedings and property disposal.
The company's liquidator is:
Elian Fiduciary Services (Cayman) Limited
c/o Jonathan Morris
Telephone: +852 3656 6000
Ogier
Central Tower, 11th Floor
28 Queen's Road Central
Hong Kong
PETERSHILL US: Shareholders' Final Meeting Set for Oct. 6
---------------------------------------------------------
The shareholders of Petershill US IM (Lopez) Holdings Ltd will
hold their final meeting on Oct. 6, 2016, at 11:40 a.m., to
receive the liquidator's report on the company's wind-up
proceedings and property disposal.
The company's liquidator is:
Walkers Liquidations Limited
Cayman Corporate Centre
27 Hospital Road, George Town
Grand Cayman KY1-9008
Cayman Islands
Telephone: +1 (345) 949 0100
PETERSHILL US (MANLEY): Shareholders' Final Meeting Set for Oct. 6
------------------------------------------------------------------
The shareholders of Petershill US (Manley) Holdings Ltd will hold
their final meeting on Oct. 6, 2016, at 10:50 a.m., to receive the
liquidator's report on the company's wind-up proceedings and
property disposal.
The company's liquidator is:
Walkers Liquidations Limited
Cayman Corporate Centre
27 Hospital Road, George Town
Grand Cayman KY1-9008
Cayman Islands
Telephone: +1 (345) 949 0100
RM INVESTMENT: Shareholders' Final Meeting Set for Oct. 5
---------------------------------------------------------
The shareholders of RM Investment Management Company will hold
their final meeting on Oct. 5, 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:
Avalon Ltd.
Landmark Square, 1st Floor, 64 Earth Close
P.O. Box 715 Grand Cayman KY1-1107
Cayman Islands
Facsimile: +1 (345) 769-9351
U.S. HOUSING: Shareholders' Final Meeting Set for Oct. 6
--------------------------------------------------------
The shareholders of U.S. Housing Recovery Fund Offshore, Ltd. will
hold their final meeting on Oct. 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:
Walkers Liquidations Limited
Cayman Corporate Centre
27 Hospital Road, George Town
Grand Cayman KY1-9008
Cayman Islands
Telephone: +1 (345) 949 0100
=============
E C U A D O R
=============
ECUADOR: Colombia Peace to Cut Border Spending by 80%
-----------------------------------------------------
EFE News reports that Ecuador could see its annual spending of
$120 million to manage the border with Colombia fall by as much as
80 percent with the advent of peace in the neighboring country,
President Rafael Correa said.
The Ecuadorian government currently has some 11,000 troops
stationed on its northern border with Colombia, Correa told
reporters before boarding a plane for Cartagena to attend the
signing of the accord ending 52 years of war between the Colombian
government and FARC rebels, according to EFE News.
Ecuador's leader also sounded a note of caution, pointing out that
in similar situations in the past, roughly 30 percent of former
insurgents decide to hang onto their weapons and embark on
criminal activity, the report relays.
In light of such statistics, the governments of Ecuador and
Colombia will rely on binational commissions to coordinate
responses "to this new scenario," he said, the report notes.
The achievement of peace "is a cause of great joy for Colombia,
for Ecuador, for the Greater Homeland (Latin America) and for the
whole world," Mr. Correa said, the report discloses.
Mr. Correa added, however, that Colombia has "a long way to go" to
translate peace into justice, equity and broad prosperity.
=====================
E L S A L V A D O R
=====================
LA HIPOTECARIA: Fitch Assigns 'BBsf' Rating to Series A Sr. Notes
-----------------------------------------------------------------
Fitch Ratings has assigned the following ratings to La Hipotecaria
Thirteenth Mortgage-Backed Notes Trust and La Hipotecaria El
Salvadorian Mortgage Trust 2016-1:
La Hipotecaria Thirteenth Mortgage-Backed Notes Trust
-- $39.6 million series A senior notes 'BBsf'; Outlook Stable;
La Hipotecaria El Salvadorian Mortgage Trust 2016-1
-- $33.75 million series 2016-1 certificates 'AAAsf'; Outlook
Stable.
Fitch's rating addresses the timely payment of interest on a
monthly basis and ultimate payment of principal by legal final
maturity in December 2045.
KEY RATING DRIVERS
OPIC Guaranty
The timely payment of interest and ultimate payment of principal
of the series 2016-1 certificates are guaranteed by OPIC, an
agency backed by the full faith and credit of the U.S.(rated
'AAA'/Stable Outlook); this allows the certificates to be rated
'AAAsf'.
Available Credit Enhancement
The series A notes benefit from 12% credit enhancement (C/E) in
the form of subordinated notes, an interest reserve fund
equivalent to 1.0625% of its balance in the form of a Letter of
Credit and excess spread.
Structural Features
The series A notes benefit from a sequential pay structure, where
the target C/E level is senior to interest payments and to the
target principal payments on the subordinated notes.
Origination and Servicing
La Hipotecaria has acquired an expertise in originating and
servicing mortgages for low-to-middle-income borrowers. Fitch
currently rates five other RMBS transactions backed by mortgages
originated by La Hipotecaria.
Sovereign and Macroeconomic Performance
El Salvador's Issuer Default Ratings (IDRs) are 'B+'/Outlook
Stable and its country ceiling (CC) is rated 'BB'. As a result of
the macroeconomic environment, the stresses applied to foreclosure
frequency, recoveries and prepayments are higher to ensure that
the structure can withstand significant periods of stress; the
series A notes' rating is capped by the CC.
RATING SENSITIVITIES
The rating assigned to the 2016-1 certificates is sensitive to
changes in the credit quality of the U.S. sovereign, as OPIC is an
agency of the U.S.
The rating of series A notes is sensitive to changes in the credit
quality of El Salvador. A downgrade of El Salvador's ratings,
specifically its country ceiling ('BB'), could lead to a downgrade
on the notes. Material increases in the frequency of defaults and
loss severity on defaulted receivables could produce loss levels
greater than Fitch's base case expectations, which in turn may
result in negative rating actions on the notes. Fitch's analysis
revealed that a 30% increase in the weighted average foreclosure
frequency (WAFF), along with a 30% decrease in the weighted
average recovery rate (WARR), would imply a downgrade of the
series A notes to 'BB-sf' from 'BBsf'.
USE OF THIRD-PARTY DUE DILIGENCE PURSUANT TO SEC RULE 17G-10
Fitch was provided with Form ABS Due Diligence-15E (Form 15E) as
prepared by KPMG, S.A. The third-party due diligence described in
Form 15E focused on credit, valuation, the presence of key
documents in the loan file and data integrity. The review was
conducted on a sample of 85 mortgages. Fitch considered this
information in its analysis and it did not have an effect on
Fitch's analysis or conclusions.
REPRESENTATIONS, WARRANTIES AND ENFORCEMENT MECHANISMS
A description of the transaction's representations, warranties and
enforcement mechanisms (RW&Es) that are disclosed in the
transaction documents and which relate to the underlying asset
pool is available by accessing the appendix referenced under
"Related Research" below. The appendix also contains a comparison
of these RW&Es to those Fitch considers typical for the asset
class as detailed in the Special Report titled "Representations,
Warranties and Enforcement Mechanisms in Global Structured Finance
Transactions," dated May 31, 2016.
TRANSACTION SUMMARY
The $39.6 million series A senior notes are backed by residential
mortgages made to lower-middle-income borrowers in El Salvador by
La Hipotecaria S.A. de C.V. In addition, the Thirteenth Mortgage
Trust issued $4.5 million in series B notes and $0.9 million in
series C notes, which have not been rated.
Approximately $33.75 million of the $39.6 million series A senior
notes have been transferred to a U.S. grantor trust (La
Hipotecaria El Salvadorian Mortgage Trust 2016-1). The U.S. trust
has issued $33.75 million in 2016-1 certificates, which are pass-
through certificates. The 2016-1 certificates benefit from a
guaranty by OPIC.
La Hipotecaria, S.A. de C.V. has had a presence in El Salvador
since October 2003. La Hipotecaria S.A. de C.V. is a nonbank
financial services company, mortgage originator and mortgage loan
servicer.
For more details on the transaction see Fitch's new issue report
'La Hipotecaria El Salvadorian Mortgage Trust 2016-1' dated
September 26, 2016.
=============
J A M A I C A
=============
JAMAICA: S&P Affirms 'B' Sovereign Credit Ratings
-------------------------------------------------
S&P Global Ratings affirmed its 'B' long-term and short-term
foreign and local currency sovereign credit ratings on Jamaica.
The outlook on the long-term sovereign credit ratings remains
stable. In addition, S&P affirmed its transfer and convertibility
assessment at 'B+'.
RATIONALE
S&P expects that Jamaica's creditworthiness will remain limited by
its high general government debt and interest burden--which S&P
expects to reach 113% of GDP net of general government assets and
28% of revenues, respectively, in 2016--weak economy with below-
average economic growth, and vulnerability to external shocks.
Nevertheless, S&P believes that the smooth political transition
and policy continuity following the change in political leadership
after the February 2016 national elections highlights bipartisan
support for conservative fiscal policies. This consensus leads
S&P to believe that Jamaica's new Administration will continue to
meet ambitious fiscal targets, fostering macroeconomic stability
and potentially setting the stage for better GDP growth in the
coming years.
Since taking office, Jamaica's new Jamaica Labour Party government
has introduced a tax reform that aims to shift the tax system
toward indirect taxation from direct taxation by reducing the
personal income tax (PIT) burden in two phases and offsetting the
initial reduction by an increase in excise taxes on fuel and
cigarettes as well as an increase in the departure tax. The
government plans on compensating for the impact of this change on
lower-income residents by strengthening its conditional cash
transfer program. S&P believes that the government's external
consultations about this reform and the implementation of
offsetting tax measures prior to the initial PIT reduction
demonstrates fiscal responsibility that S&P expects to continue
through the second phase of the reform in 2017, enabling the
government to meet the new primary fiscal surplus target of 7% of
GDP over the next several years. S&P expects that continued
compliance with ambitious fiscal targets will contribute to an
average change in general government debt to GDP of around 3.6%
through 2019. The primary surplus target was lowered from the
7.5% that was set during the first years of the current
International Monetary Fund Extended Fund Facility (EFF) program
that started in 2013 in order to facilitate capital spending to
encourage economic growth.
While the government has placed renewed attention on economic
growth, Jamaica's weak economy continues to constrain the rating.
Despite the country's low income level, anchored in a GDP per
capita that S&P expects to reach $5,035 in 2016, average per
capita growth of below 1% remains below that of other countries
with similar income levels. S&P expects real GDP growth to
slightly accelerate to 1.5% by 2017 from 1% in 2015, in part
driven by an acceleration in growth of the U.S. economy. That, in
turn, should sustain remittances--representing close to 16% of the
Jamaican economy--which should boost domestic consumption. S&P
also expects continued growth and investment in the business
process outsourcing and tourism industry. However, S&P believes
that these factors won't fully mitigate the economy's structural
growth limitations over the next couple of years. These barriers
include low productivity, a lack of business competitiveness, high
security costs, and vulnerability to external shocks.
Jamaica's external profile has recently benefited from favorable
conditions, including low oil prices, given that fuel imports
represent about 14% of the country's current account payments, as
well as growth in the tourism industry as tourism receipts
represent about 34% of the country's current account receipts
(CAR). These developments, along with currency depreciation, have
led to the improvement in the country's current account deficit to
2.4% of GDP in 2015 from 8.1% in 2014. At the same time,
Jamaica's external debt net of international reserves and
financial sector assets fell to 116% of CAR in 2015 from 132% in
2014, partially benefiting from the government's repurchase of a
Petrocaribe loan. S&P expects these levels to continue to improve
and to reach around 113% in 2016, encouraged by growing reserve
levels.
S&P believes that Jamaica's external financing needs will continue
to improve, averaging 101% of CAR and foreign exchange reserves
over the next several years on the back of growing remittances and
tourism receipts despite a gradual increase in oil prices--which
we expect to increase from an average of $40/barrel (bbl) in 2016
to $50/bbl by 2018. Nevertheless, S&P believes the country's
external liquidity needs and indebtedness levels will still be
significant. In S&P's opinion, Jamaica's external position
therefore remains a rating weakness.
"Our assessment of Jamaica's monetary flexibility balances the
country's managed floating exchange rate regime with the limited
effectiveness of monetary policy transmission mechanisms.
Although Jamaica's central bank has recently strengthened its
liquidity provision framework, we believe that monetary policy
tools, such as the policy rate, still have a limited impact on the
economy. This lack of effectiveness is partly the result of local
banks' lending primarily to the public sector in the recent past,
crowding out the development of private-sector lending.
Nevertheless, price stability in Jamaica has recently improved, in
part because of lower oil prices. We expect inflation to be at
the lower end of the central bank's 4.5%-6.5% target, on average,
over the next several years," S&P said.
OUTLOOK
The stable outlook balances S&P's expectations for broad-based
political consensus on the need for continued fiscal
consolidation, which S&P expects to contribute to improving fiscal
balances and a stabilized debt trajectory, with the country's
still-high general government debt burden, weak GDP growth, and
vulnerability to external shocks.
"We may raise the ratings over the next year if Jamaica achieves
sustained improvement in its external liquidity and indebtedness,
along with a growing track record of sustainable public finances.
This, combined with higher economic growth and significant
improvement in the transmission mechanism of monetary policy,
would lead to an upgrade. Conversely, we may lower the ratings
during the same period if, contrary to our expectation, the
government exhibits slippage on its fiscal targets, which could
increase the government's debt burden, put pressure on interest
rates, and boost inflation. Failure to respond in a timely and
forceful manner to such adverse developments could erode the
country's financial profile, leading to a downgrade," S&P said.
In accordance with S&P's relevant policies and procedures, the
Rating Committee was composed of analysts that are qualified to
vote in the committee, with sufficient experience to convey the
appropriate level of knowledge and understanding of the
methodology applicable. At the onset of the committee, the chair
confirmed that the information provided to the Rating Committee by
the primary analyst had been distributed in a timely manner and
was sufficient for Committee members to make an informed decision.
After the primary analyst gave opening remarks and explained the
recommendation, the Committee discussed key rating factors and
critical issues in accordance with the relevant criteria.
Qualitative and quantitative risk factors were considered and
discussed, looking at track-record and forecasts.
The committee agreed that key rating factors were unchanged.
The chair ensured every voting member was given the opportunity to
articulate his/her opinion. The chair or designee reviewed the
draft report to ensure consistency with the Committee decision.
The views and the decision of the rating committee are summarized
in the above rationale and outlook. The weighting of all rating
factors is described in the methodology used in this rating
action.
RATINGS LIST
Ratings Affirmed
Jamaica
Sovereign Credit Rating B/Stable/B
Transfer & Convertibility Assessment B+
Senior Unsecured B
======================
P U E R T O R I C O
======================
FASHION STYLE: Disclosures Conditionally OK'd; Hearing on Oct. 5
----------------------------------------------------------------
The Hon. Mildred Caban Flores of the U.S. Bankruptcy Court for the
District of Puerto Rico has conditionally approved Fashion Style,
Inc.'s disclosure statement describing the Debtor's plan of
reorganization.
The Debtor filed the Disclosure Statement on Aug. 26, 2016.
A hearing for the consideration of the final approval of the
Disclosure Statement and the confirmation of the Plan will be held
on Oct. 5, 2016, at 9:00 a.m.
Any objection to the final approval of the Disclosure Statement
and the confirmation of the Plan will be filed on or before 14
days prior to the date of the hearing on confirmation of the Plan.
The Debtor will file with the Court a statement setting forth
compliance with each requirement in U.S.C. Section 1129, the list
of acceptances and rejections and the computation of the same,
within seven working days before the hearing on confirmation.
Acceptances or rejections of the Plan may be filed in writing by
the holders of all claims on or before 14 days prior to the date
of the hearing on confirmation of the Plan.
Fashion Style, Inc., filed for Chapter 11 bankruptcy protection
(Bankr. D.P.R. Case No. 16-02239) on March 22, 2016, estimating
its assets and liabilities at between $50,001 and $100,000 each.
Wanda I. Luna Martinez, Esq., at Luna Law Offices serves as the
Debtor's bankruptcy counsel.
GLOBAL COMMODITY: Disclosure Statement Hearing Moved to Dec. 7
--------------------------------------------------------------
The hearing to consider approval of the disclosure statement
explaining Global Commodity Group, Inc.'s Chapter 11 plan has been
rescheduled for December 7.
The hearing will be held at 9:00 a.m., at the Jose V. Toledo
Federal Building and U.S. Courthouse, 300 Recinto Sur, Courtroom
No. 1, Second floor, San Juan, Puerto Rico.
About Global Commodity Group
Global Commodity Group, Inc. filed a Chapter 11 bankruptcy
petition (Bankr. D.P.R. Case No. 15-08395) on Oct. 28, 2015, in
San Juan, Puerto Rico. U.S. Bankruptcy Judge Brian K. Tester
presides over the case. In its petition, the Debtor estimated
under $50,000 in assets and under $10 million in liabilities. The
petition was signed by Ramon L Nunez Freytes, president.
The Debtor is represented by:
Maria Soledad Lozada Figueroa, Esq.
MS LOZADA LAW OFFICE
PO BOX 9023888
San Juan, PR 00902
Tel: 787 520 6002
Fax: 787 520 6003
E-mail: lcdamslozada@gmail.com
=================
V E N E Z U E L A
=================
PETROLEOS DE VENEZUELA: Will Not Renew Curacao Oil Refinery Lease
-----------------------------------------------------------------
Caribbean New Now reports that Venezuelan state-owned oil company,
Petroleos de Venezuela, SA will not renew its lease with Curacao's
government to operate the 325,000 b/d Isla refinery when the
current lease expires on 31 December 2019, the energy ministry
said.
But PDVSA expects that Isla refinery's new operator from 2019
onward will continue to refine, blend, store and ship Venezuelan-
sourced crude to the company's export clients mainly in Asia,
according to Caribbean New Now.
Venezuela's energy ministry confirmed that negotiations with
Curacao's government failed to reach a mutually satisfactory
agreement after Curacao's Prime Minister Dr. Bernhard Whiteman
announced that a memorandum of understanding was signed with
Guangdong Zhenrong Energy, the report notes.
Under that deal, the Chinese state-controlled commodities trader
would invest up to $10 billion in upgrading and modernisingizing
the century-old facility, the report relays. Guangdong Zhenrong
would finance 100pc of the capital expenditures needed to
modernize the refinery, storage facilities and shipping terminal,
build a new gas terminal, and also upgrade the refinery's power
and water services infrastructure, the report discloses.
"All efforts to reach a new contract with Venezuela did not yield
positive results," Mr. Whiteman said in a video posted on the
Curacao government's website, notes the report. "We had to look at
other alternatives," Mr. Whiteman added.
PDVSA and the energy ministry "basically ignored all of the
Curacao government's efforts in recent months to negotiate a deal
to renew the lease under new conditions including a PdV commitment
to spend up to $2 billion on environment-related technology
upgrades and cleanup at Isla Refinery," said a Venezuelan energy
ministry official who disagrees with Energy Minister Eulogio Del
Pino's decision to not seek a new lease, the report says.
PDVSA is giving up the Isla Refinery it has operated under lease
for almost 30 years for financial reasons, the report notes.
"PDVSA doesn't have $2 billion it can commit to Isla's upgrade,"
the energy ministry official said, the report adds.
As reported in the Troubled Company Reporter-Latin America on
March 10, 2016, Moody's Investors Service changed the outlook on
Petroleos de Venezuela (PDVSA)'s ratings to negative from stable.
Moody's also affirmed PDVSA's Caa3 issuer rating and lowered the
company's baseline credit assessment (BCA) to caa3 from caa1.
These rating actions follow Moody's decision on March 4, 2016, to
change the outlook on the Government of Venezuela's bond ratings
to negative from stable.
=================
X X X X X X X X X
=================
LATAM: Fitch Says Upside Potential Limited for Region
-----------------------------------------------------
Positive rating momentum for Central American sovereigns is
unlikely, according to a new Fitch Ratings report. Some upside
potential exists for the Dominican Republic, which currently has a
Positive Outlook. Over the medium term, the passage and
implementation of reforms to boost fiscal revenues and tackle
obstacles to economic growth will be crucial to ratings
trajectories.
Growth prospects in the region are supported by low oil and other
commodity prices along with continued U.S. labour market strength,
which boosts growth in remittances and tourism receipts. These
factors have also reduced inflation and current account deficits,
in contrast to most other sovereigns in Latin America. However, to
varying degrees, all of the countries in the region face
structural impediments to trend growth, with the possible
exception of Costa Rica.
Fitch believes progress in resolving structural challenges will be
crucial, as several countries have deep-rooted competitiveness
problems, partly due to low human capital and difficult business
environments. Structural reforms that boost growth prospects by
raising investment, improving education and boosting productivity
could be credit-positive. It is also crucial that governments
across the region make efforts to strengthen the business
environment, diversify exports and move up the value-added chain.
Fiscal reforms are also important, to raise revenues for improving
security, infrastructure and health and educational spending.
Successful passage and implementation of reforms in these areas
could improve creditworthiness. Progress to date has been slow,
however.
Relatively high deficits in Costa Rica and El Salvador have led to
an increasing debt burden over the last decade. Guatemala suffers
from one of the lowest tax bases of all rated sovereigns, and the
Dominican Republic's is significantly lower than Fitch's 'B' and
'BB' medians. Fiscal reforms that lead to an effective expansion
of the revenue base and facilitate fiscal consolidation would be
important rating factors in all of the countries with the
exception of Nicaragua, with its low fiscal deficit and declining
debt burden.
The prospects for structural and fiscal reforms in the region are
mixed. A divided legislature hinders reform efforts in El
Salvador, Guatemala and Costa Rica. Even in the Dominican Republic
and Nicaragua, where the governments will maintain healthy
majorities in Congress, there appear to be signs of reform fatigue
and complacency.
***********
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 * * *