/raid1/www/Hosts/bankrupt/TCRLA_Public/161025.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
L A T I N A M E R I C A
Tuesday, October 25, 2016, Vol. 17, No. 211
Headlines
A R G E N T I N A
BANCO MACRO: Moody's Rates $400MM Subordinated Debt 'Caa1'
COMPANIA GENERAL: Fitch Assigns 'B' IDRs, Outlook Stable
MASTELLONE HERMANOS: Fitch Raises IDR to 'B-'; Outlook Stable
PETROBRAS ARGENTINA: Moody's Affirms B3 Rating on $500MM Sr. Notes
PETROBRAS ARGENTINA: Moody's Affirms B3 CFR, Outlook Developing
B R A Z I L
MARFRIG GLOBAL: Calls Asia Main Growth Area
MARFRIG GLOBAL: S&P Affirms 'B+' CCR, Outlook Positive
PETROLEO BRASILEIRO: Moody's Raises CFR to B2, Outlook Stable
USINAS SIDERURGICAS: Fitch Hikes Issuer Default Ratings to 'CCC'
C A Y M A N I S L A N D S
ADAR ENHANCED: Shareholders' Final Meeting Set for Nov. 10
ADAR INVESTMENT: Shareholders' Final Meeting Set for Nov. 10
CHI LIMITED: Shareholders' Final Meeting Set for Nov. 11
CONCERTO CREDIT I: Shareholders' Final Meeting Set for Nov. 3
CORA DEAL: Shareholders' Final Meeting Set for Nov. 11
KAZIMIR RUSSIA: Shareholders' Final Meeting Set for Nov. 2
LIONEYE MASTER: Shareholder to Hear Wind-Up Report on Nov. 1
LIONEYE OFFSHORE: Shareholder to Hear Wind-Up Report on Nov. 1
MILLION CHOICES: Shareholders' Final Meeting Set for Nov. 1
PPM AMERICA: Shareholders' Final Meeting Set for Nov. 11
REGIF - REAL: Shareholders' Final Meeting Set for Nov. 9
SUTTER CBO 1998-1: Shareholders' Final Meeting Set for Nov. 11
THU AL-MAJAZ: Shareholders' Final Meeting Set for Nov. 11
D O M I N I C A N R E P U B L I C
DOMINICAN REPUBLIC: Halts All Amber Extraction on Damage
DOMINICAN REPUBLIC: Grows 6.9% Thru 3Q, Central Banker Says
J A M A I C A
JAMAICA: Decline in Currency is "Disruptive", Central Bank Says
NATIONAL COMMERCIAL: S&P Affirms 'B' ICR; Outlook Stable
P U E R T O R I C O
SACRED HEART UNIVERSITY: Moody's Lowers 2012A Bonds Rating to Ba3
S U R I N A M E
SURINAME: Fitch Assigns 'B+' Rating on USD550MM Bond Due 2026
V E N E Z U E L A
VENEZUELA: Lawmakers Plan Impeachment Cases Against President
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A R G E N T I N A
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BANCO MACRO: Moody's Rates $400MM Subordinated Debt 'Caa1'
----------------------------------------------------------
Moody's Investors Service assigned a global foreign currency debt
rating of Caa1 to Banco Macro S.A.'s subordinated debt issuance
Class A up to $400 million, which will be issued under New York
law and due in 2026.
The following rating was assigned to Banco Macro:
Class A subordinated debt issuance for up to $400 million:
-- Global Foreign Currency Subordinated Debt Rating: Caa1
RATINGS RATIONALE
The Caa1 foreign currency subordinated debt rating of Macro is
notched down from the bank's B3 senior debt rating to reflect
higher expected loss due to subordination.
The rating also incorporates Argentina's operating environment,
which remains challenging despite the country's recent return to
global capital markets and various other market-friendly policy
reforms implemented in recent months by the new administration.
The environmental challenges outweigh Macro's strong financial
fundamentals, including good profitability and capitalization, and
solid asset quality metrics. The bank has a well-established
franchise as one of the largest domestically-owned private banks
in Argentina, is the financial agent of four provinces, and
provides a range of banking services to large corporations, small
and medium sized companies, and households. Macro's profitability
benefits from active cross selling to its client base and strong
access to lower cost core deposits from its retail and corporate
customers. Even though Macro's earnings are magnified by
Argentina's high rate of inflation, its net income to tangible
assets ratio of more than 5.02% in the first half of 2016 was well
above that of its peers. Consequently, Macro is better positioned
to absorb the increase real funding costs that will affect the
entire banking system as inflation starts to decline.
Macro has a diversified lending mix and strong asset risk profile.
Its nonperforming loan ratio of just 1.6% and ample loan loss
reserve coverage of nearly 150% reveal conservative risk
management practices. In addition, the bank benefits from very
strong capitalization, with tangible common equity equal to 16.7%
of adjusted risk-weighted assets, that gives the bank ample
capacity to expand in real terms as Argentina's economy begins to
recover. In addition, as other Argentine banks, the bank's
reliance on market funds is relatively low. Its funding largely
derives from a granular deposit base benefited by its role as
provincial financial agent role.
What could move the rating UP or DOWN
As the rating is effectively capped by the Argentine sovereign's
B3 rating due to the strong credit interlinkages between the
sovereign and the bank, an upgrade of the sovereign rating
accompanied by continued improvement in operating conditions could
put positive pressures on Macro's ratings, provided the bank
maintains a disciplined approach to loan growth. Macro could face
downward ratings pressure if the operating environment
deteriorates and the sovereign is downgraded or if the bank
suffers a substantial deterioration in its asset quality,
earnings, and capitalization.
The principal methodology used in this rating was Banks published
in January 2016.
COMPANIA GENERAL: Fitch Assigns 'B' IDRs, Outlook Stable
--------------------------------------------------------
Fitch Ratings has assigned Long-Term Foreign and Local Currency
Issuer Default Ratings of 'B' to Compania General de Combustibles
S.A. (CGC). The Rating Outlook is Stable.
Fitch also expects to rate CGC's proposed international senior
unsecured bond issuance of up to USD300 million due 2021
'B(EXP)/RR4'. Proceeds from the transaction would be used mainly
to refinance existing debt, with the rest used to finance capital
expenditures for development and exploration activities
particularly in the Austral Basin.
KEY RATING DRIVERS
CGC's ratings reflect the company's smaller production profile,
and relatively low reserve life of approximately 6.4 years. These
considerations are offset by the company's predominantly natural
gas (NG) focused production profile in Argentina, which shows a
more stable and positive scenario for domestic NG prices in a
depressed environment for global oil prices; and the company's
moderate leverage tempered by a weak liquidity position.
CGC's ratings are not constrained by the 'B' country ceiling of
the Republic of Argentina. The company is exposed to higher
regulatory risks associated with operating in the oil and gas
sector in Argentina, and the long-term need to pursue a robust
capital expenditure plan to develop the company's hydrocarbon
reserves and further increase production. The company faces a
volatile domestic business environment and inflationary pressures
on its cost structures.
Fitch also incorporated the indirect benefit of having a large
group such as Corporacion Americas, its Argentine infrastructure
holding company, as the controlling shareholder, with a 70% stake.
SMALL PRODUCTION PROFILE: CGC's ratings reflect the company's
relatively small production size compared with international
peers. In Argentina, CGC is the 8th largest oil and gas producer
in the country in terms of wellhead production. Although the
company has exploration and production interest in 34 concessions
in Argentina, 96% of the company's proved (1P) reserves, and
approximately 95% of the production are in the Austral Basin.
This limited diversification exposes the company to operational
macroeconomic risks associated with small-scale oil and gas
production.
INCREASING PRODUCTION: As of year-end 2015, production reached
19,547 barrels of oil equivalent per day (boed). On April 1,
2015, CGC acquired certain assets from Petrobras Argentina (PESA)
located in the Austral basin, which significantly increased the
company's size and production levels. After the acquisition of
PESA's assets, the company's production profile improved and the
average daily production for the last six months of 2016 was
23,833 boed, fully reflecting the production related to the PESA
assets. Fitch expects the company to maintain production of
25,000 boed in 2016 and reach 30,000 boed by 2019-2020.
Due to a more favorable environment for NG prices, CGC expects to
focus on NG production. During the LTM ended June 2016, 55% of
the company's revenues were related to oil sales, Fitch expects
oil to represent only 40% of the total sales by 2020, in line with
the company's reserve profile.
LOW HYDROCARBON RESERVE: The ratings consider the company's
relatively low reserve life of approximately 6.4 years. As of
year-end 2015, CGC reported 1P reserves of 54.845 million boe,
with 70% related to NG. Based on production expectations. The
relatively low reserve life could create significant operational
challenges in the medium- to long-term, and gives the company
limited flexibility to reduce capex investments in order to
increase upstream reserves/production.
CGC is in the process of renewing the concessions in the Santa
Cruz I & II areas expiring in 2017 with the province of Santa
Cruz. If the company extends these concessions for an additional
10 years, it could result in an increase in 1P reserves of 8.7
million boe, slightly improving the company's reserve life and in-
line with the median for Fitch-rated speculative grade peers.
Positively, the company's reserve life extends beyond the duration
of the proposed bond. Fitch believes the acquisition of PESA's
assets in first-quarter 2015 (1Q15) improved CGC's reserve
profile, and may provide significant upside potential from its
exploration opportunities for the upcoming years.
SLIGHTLY IMPROVING REGULATORY RISK: CGC's ratings reflect high
regulatory risk given strong government influence on the energy
sector in Argentina. CGC operates in a highly strategic sector
where the government has a role as the price regulator, and
controls subsidies for industry players. Fitch believes the
recent Argentine administrative initiatives may result in an
improved operating environment for energy companies in Argentina.
POSITIVE ENVIRONMENT FOR DOMESTIC PRICES: In recent years domestic
hydrocarbon prices have seen increases as the government has
attempted to provide incentives to E&P producers to increase
production. Following the sell-off in global oil prices, this has
led to a positive dynamic in the Argentine domestic market, as the
government has allowed oil prices to remain at levels above global
oil prices. Despite the sharp global decline in oil prices seen
during the past year, the price of light oil in the domestic
Argentine market has only declined by 11% in 2015 and remained
above international prices.
Via Resolution No. 60/2013, the Argentine government created an
incentive program for generating incremental natural gas
production, whereby CGC is entitled to receive a more attractive
price of between USD4-USD7.50 per million BTU (MMBTU) above its
invoiced average gas price if the company manages to increase gas
production. Given the country's reliance on thermal energy for
electricity generation, Fitch expects this program to remain in
place until 2017 and may be extended further. CGC's average
realized price for gas sold (including the stimulus plan) is
expected to grow to 4.25/MMBTU in 2016 from 2.91/MMBTU in 2015,
and to reach close to 5.00/MMBTU by 2017.
ADEQUATE CREDIT PROTECTION METRICS: CGC has adequate credit
protection metrics, characterized by moderate leverage. For the
LTM ended June 2016, gross leverage, as measured by total debt-to-
EBITDA in USD terms, reached 2.1x (considering Fitch's calculated
EBITDA for CGC in USD), which is considered reasonable for the
assigned rating. CGC's total debt-to-total proved reserves ratio
was approximately USD4 per boe.
As of June 30, 2016, CGC's total debt was approximately USD217
million, and the company's LTM EBITDA was approximately USD104.4
million. For the six-month period ended June 30, the company's
EBITDA of USD50 million represented a doubling versus y-o-y
results, mainly due to the acquisition of PESA's assets and
improved margins resulting from the positive impact on the
company's cost structure as a result of the significant currency
devaluation and cost improvements observed during 2015. These
factors offset the lower domestic oil prices for the year.
CGC's EBITDA generation is expected to grow significantly, mainly
from the investments made during 2015 to boost overall production,
after almost nine months in which PESA had very limited
investments. Fitch expects EBITDA generation for 2016-2017 to
increase to USD100-USD125 million from the USD77 million reported
in 2015.
KEY ASSUMPTIONS
-- Double-digit currency depreciation per year;
-- Average daily production levels of 25,000 boed for 2016,
increasing to 29,000 boed by 2018;
-- EBITDA exceeding USD100 million starting in 2016;
-- Contingent on international issuance, leverage levels
peaking in 2016 and declining to 1.5-2.0x in the long term.
RATING SENSITIVITIES
Negative: Future developments that could, individually or
collectively, lead to negative rating actions in the short term:
-- Argentina's economic deterioration and the company's
inability to maintain an adequate liquidity position or
access to foreign currency;
-- A significant deterioration of credit metrics;
-- Sustained declines in hydrocarbon reserves / production
levels or failure to further develop new fields.
Positive: A positive rating action in the short term is considered
unlikely. Drivers for a positive rating action or outlook in the
medium term include an upgrade of Argentina's IDRs, increased
diversification of the company's production profile, and
consistent growth in both production and reserves while
maintaining adequate financial metrics.
LIQUIDITY
Total cash and equivalents amounted to approximately USD22 million
as of June 30, 2016 compared with approximately USD88 million of
short-term debt. The company's cashflow generation has started to
see significant improvement during 2016 as a result of the
significant investments incurred during 2015 and full-year
recognition of the PESA assets. This, together with the company's
successful record of accessing the local markets and the available
credit lines with local banks should mitigate liquidity risk
exposure during 2016.
Approximately USD120 million of the company's debt becomes due
within the next 24 months. The proceeds from the issuance of the
bond will be used to refinance most of the company's financial
debt, improving liquidity and extending the company's maturity
profile.
FULL LIST OF RATING ACTIONS
Fitch has assigned these ratings to CGC S.A.:
-- Long-Term Foreign Currency IDR 'B'; Outlook Stable;
-- Long-Term Local Currency IDR 'B'; Outlook Stable;
-- International senior unsecured debt rating 'B(EXP)/RR4'.
MASTELLONE HERMANOS: Fitch Raises IDR to 'B-'; Outlook Stable
-------------------------------------------------------------
Fitch Ratings has upgraded Mastellone Hermanos Sociedad Anonima's
Long-Term Foreign and Local Currency Issuer Default Ratings as
well as its senior unsecured notes to 'B-' from 'CCC'. The Rating
Outlook is Stable.
KEY RATING DRIVERS
The upgrade of Mastellone's ratings reflects the company's
improving credit metrics on the back of Arcor SAIC's (Arcor; 'B+'/
Outlook Stable) and Bagley Argentina S.A.'s (Bagley), Arcor's
subsidiary, purchase of a 25% stake in December 2015 which has
improved the company's liquidity position. The upgrade also
reflects the expected continued improvement in credit metrics
despite a slightly negative consumption environment as Mastellone
continues to lower costs through more efficient distribution and
expanded facilities. Mastellone's ratings reflect its operating
environment in Argentina, which contributed over 80% to sales and
85% to EBITDA as of year-end 2015 as well as its exposure to the
country's production of raw milk. Mastellone is the largest dairy
company and the leading processor of dairy products in Argentina.
Improving Credit Metrics
Fitch expects net leverage to improve to 2.0x by 2018. As of the
LTM ended June 30, 2016, Mastellone's net leverage ratio was 2.3x.
The lower average price paid for raw milk in 2015 as well as price
increases led to an increase in EBITDA to ARS722 million from
ARS363 million in 2014; EBITDA was ARS1.2 billion as of LTM
June 30, 2016. Liquidity has also improved; in December 2015
Arcor and Bagley paid USD50 million total for a 25% stake in the
company. Mastellone used the cash to pay down short-term debt, to
complete expansion projects and to update technology at its
facilities.
Cash Flow Concentrated in Argentina
In 2015, cash flow generated in Argentina contributed 87% to total
sales of ARS14 billion and 85% to EBITDA of ARS722 million. Its
next most important market is Brazil, which comprised 5% of total
sales and 15% of EBITDA. The company is exposed to double-digit
inflation in Argentina and other direct and indirect sovereign-
related risks, including devaluation and refinancing risks.
Exposure to Currency Risk
Mastellone's debt is USD-denominated and creates currency risk as
company sales are mainly in Argentine pesos. The company has not
entered into any agreements to hedge its exposure to devaluation
risk.
Volatility of Raw Milk Production
Mastellone's business is divided between sales to the Argentine
and Brazilian domestic markets and exports; the excess between raw
milk supply and domestic sales is exported. A shortage of raw
milk production could lead to the interruption of the company's
export business (3% of sales) or an increase in production costs.
Strong Business Position: Mastellone is the largest dairy company
and the leading processor of dairy products in Argentina.
Mastellone is first in the fluid milk market in terms of physical
volume with a market share of approximately 66%. The company
maintains the first and second market position in most of its
product lines. Its strong market shares allow it to benefit from
economies of scale in the production, marketing and distribution
of products. Mastellone purchases about 16%-18% of raw milk
production in Argentina, which provides it with a degree of
negotiating power.
KEY ASSUMPTIONS
Fitch's key assumptions within the rating case for Mastellone
include:
-- Revenue growth slightly below inflation in 2016 and 2017,
and 10% in 2018 and 5% in 2019;
-- EBITDA margin improves to close to 6% in 2016 and remains
relatively stable from 2017-2019;
-- EBITDA of about USD70 million in 2016 and USD80 million in
2017;
-- Capex of around USD30 million in 2016, USD35 million in 2017
for expansion of San Luis facility;
-- Arcor pays USD35 million in early 2017 to increase its stake
to 35%;
-- Expansion of Trenque Lauquen plant will be completed and
facility will begin operating in first quarter 2017, for a
cost savings of USD3 million per year;
-- Net leverage ratio to about 2.0x by 2018.
RATING SENSITIVITIES
Mastellone's ratings would be negatively impacted by a downgrade
of Argentina's country ceiling rating. Furthermore, a sustained
deterioration in cash flows or an increase in leverage for a
prolonged period of time could negatively impact Mastellone's
credit rating.
A sustained improvement in net leverage below 2.0x as well as
further geographic diversification reducing the importance of cash
flow from Argentina could result in a positive rating action. In
addition, Arcor's increased ownership in the company would result
in a positive rating action if there are strong legal and
operational ties between the two companies.
LIQUIDITY
Mastellone reported cash and equivalents of about ARS387 million
(USD28 million) as of June 30, 2016, down slightly from 2015 due
to increased capex and the cancelation of short-term debt. Under
Fitch's methodology, ARS174 million is readily available cash.
The company's total debt of ARS2.9 billion (USD211 million) as of
June 30, 2016, is mainly comprised of its USD200 million senior
unsecured notes that mature on July 3, 2021. The company has not
entered into any agreements to hedge its exposure to devaluation
risk. Mastellone has available lines of credit, of which half are
pre-export facilities with local and international banks, and are
collateralized by inventories. As of June 30, 2016, no amounts
were outstanding.
FULL LIST OF RATING ACTIONS
Fitch has upgraded these ratings:
-- Long-Term Foreign Currency IDR to 'B-' from 'CCC';
-- Long-Term Local Currency IDR to 'B-' from 'CCC';
-- Senior unsecured notes to 'B-/RR4' from 'CCC/RR4'.
PETROBRAS ARGENTINA: Moody's Affirms B3 Rating on $500MM Sr. Notes
------------------------------------------------------------------
Moody's Latin America Agente de Calificacion de Riesgo affirmed
Petrobras Argentina S.A. (PESA)'s rating on its B3/Baa3.ar $500
million in senior unsecured notes. At the same time, the outlook
was changed to developing from negative. The rating action
reflects the completion of the acquisition of PESA by Pampa
Energia S.A. (Pampa, not rated) and the ongoing proposed merger
into the later.
RATINGS RATIONALE
The change in outlook to developing reflects uncertainties
regarding PESA's capital structure once the merger process with
Pampa is finalized. The capital structure of the new company is
still dependent on the results of the offer extended to PESA's
minority shareholders to exchange PESA's shares for a cash payment
or Pampa's shares. The offer expires on Nov. 14, 2016. If
minority shareholders were to choose the cash option, Pampa would
need to raise up to USD 450 million in additional debt.
Upon conclusion of the merger, which Moody's expects to occur
during the first months of 2017, Pampa would be PESA's successor
company and the obligor of the $500 million in senior unsecured
notes. Moody's will reassess its ratings on the proposed notes,
under the new ownership, capital structure and business strategy
of the new obligor. Moody's will also evaluate the adequacy and
sufficiency of information to monitor the ratings.
PESA's B3 ratings are based on the company's position as a
relatively small diversified energy operator in Argentina with a
record of poor upstream capital efficiency characterized by low
levels of investment and reserve replacement and rising costs,
vulnerable to Argentina's uncertain policies. PESA's geographic
and operational diversification has declined as it has
restructured and exited various operations to focus in Argentina.
With declining reserves and a relatively short reserve life,
PESA's primary operational challenge continues to be to extend a
largely mature asset base and show rising production and reserve
growth over the next few years. The ratings are supported by the
company's relatively solid credit metrics for its rating category
as well as some cash flow stability from its various energy
operations. PESA'S ratings also consider the uncertain
government's policies for the energy sector in Argentina.
A positive rating action for PESA's B3/Baa3.ar rating would be
merited if Moody's believes that that the company will be able to
sustain its currently solid financial ratios and liquidity
position.
A downgrade of the Argentine government that may reflect
increasing political and regulatory risk, or a governmental
initiative on setting reference prices that puts pressure on
PESA's cash flows, debt service capabilities or liquidity, could
also put negative pressure on PESA's ratings.
PESA is an integrated energy company with operations focused on
petroleum exploration and production but with refining and product
distribution, and petrochemicals business. It also has interests
in electric generation, and in gas pipelines and NGLs production
through Transportadora de Gas del Sur S.A. (B3 stable). For the
last twelve months ended June 30, 2016, the company generated
revenues of $2.3 billion and had total proved reserves of 183
million of BOE. PESA has business mainly in Argentina but also in
Bolivia, Ecuador and Venezuela.
The principal methodology used in this rating was Global
Independent Exploration and Production Industry published in
December 2011.
PETROBRAS ARGENTINA: Moody's Affirms B3 CFR, Outlook Developing
---------------------------------------------------------------
Moody's Investors Service affirmed Petrobras Argentina S.A.
(PESA)'s Corporate Family Rating and the rating on its
$500 million in senior unsecured notes. At the same time, the
outlook was changed to developing from negative. The rating
action reflects the completion of the acquisition of PESA by Pampa
Energia S.A. (Pampa, not rated) and the ongoing proposed merger
into the later.
Outlook Actions:
Issuer: Petrobras Argentina S.A.
Outlook, Changed To Developing From Negative
Affirmations:
Issuer: Petrobras Argentina S.A.
Corporate Family Rating, Affirmed at B3
Senior Unsecured Regular Bond/Debenture, Affirmed at B3
RATINGS RATIONALE
The change in outlook to developing reflects uncertainties
regarding PESA's capital structure once the merger process with
Pampa is finalized. The capital structure of the new company is
still dependent on the results of the offer extended to PESA's
minority shareholders to exchange PESA's shares for a cash payment
or Pampa's shares. The offer expires on Nov. 14, 2016. If
minority shareholders were to choose the cash option, Pampa would
need to raise up to USD 450 million in additional debt.
Upon conclusion of the merger, which Moody's expects to occur
during the first months of 2017, Pampa would be PESA's successor
company and the obligor of the $500 million in senior unsecured
notes. Moody's will reassess its ratings on the proposed notes,
under the new ownership, capital structure and business strategy
of the new obligor. Moody's will also evaluate the adequacy and
sufficiency of information to monitor the ratings.
PESA's B3 ratings are based on the company's position as a
relatively small diversified energy operator in Argentina with a
record of poor upstream capital efficiency characterized by low
levels of investment and reserve replacement and rising costs,
vulnerable to Argentina's uncertain policies. PESA's geographic
and operational diversification has declined as it has
restructured and exited various operations to focus in Argentina.
With declining reserves and a relatively short reserve life,
PESA's primary operational challenge continues to be to extend a
largely mature asset base and show rising production and reserve
growth over the next few years. The ratings are supported by the
company's relatively solid credit metrics for its rating category
as well as some cash flow stability from its various energy
operations. PESA'S ratings also consider the uncertain
government's policies for the energy sector in Argentina.
A positive rating action for PESA's B3 rating would be merited if
Moody's believes that that the company will be able to sustain its
currently solid financial ratios and liquidity position.
A downgrade of the Argentine government that may reflect
increasing political and regulatory risk, or a governmental
initiative on setting reference prices that puts pressure on
PESA's cash flows, debt service capabilities or liquidity, could
also put negative pressure on PESA's ratings.
PESA is an integrated energy company with operations focused on
petroleum exploration and production but with refining and product
distribution, and petrochemicals business. It also has interests
in electric generation, and in gas pipelines and NGLs production
through Transportadora de Gas del Sur S.A. (B3 stable). For the
last twelve months ended June 30, 2016, the company generated
revenues of $2.3 billion and had total proved reserves of 183
million of BOE. PESA has business mainly in Argentina but also in
Bolivia, Ecuador and Venezuela.
The principal methodology used in these ratings was Global
Independent Exploration and Production Industry published in
December 2011.
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B R A Z I L
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MARFRIG GLOBAL: Calls Asia Main Growth Area
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Reese Ewing at Reuters reports that Marfrig Global Foods SA, one
of Brazil's main producers of beef, expects the Asia-Pacific
region to be its principal motor for growth going forward after
China and the United States opened their markets to Brazilian
fresh beef in 2015, a company executive said.
Mergers and acquisitions in the region, however, are not on the
company's immediate radar, Marfrig Vice President of Finance Jose
Eduardo de Oliveira Miron told Reuters.
"We are concentrating on organic growth," he said. "We see growth
in beef consumption in the world propelled by the Asian markets,
where demand should remain robust and met mainly by imports," he
added.
Asian consumers have been the focus of other Brazilian meat
exporters including BRF SA and JBS SA, which have expanded their
foothold in the region through acquisitions, partnerships and
joint ventures, the report relays.
After suffering a minor debt crisis from rapid expansion in recent
years, Marfrig resorted to selling its poultry businesses in
Britain and Brazil to JBS, the report discloses. But Mr. Miron
said the company was back on stable footing.
"We are betting on sustainable growth through the reduction of
leverage, continued free cash flow generation and consolidation of
operations," the report quoted Mr. Miron as saying.
In September, Brazil's agriculture minister, Blairo Maggi, led a
Brazilian trade mission including 40 agribusiness companies to the
region, visiting China, India, Vietnam, South Korea, Thailand,
Malaysia and other countries, stirring up as much as $2 billion in
new trade, the report relays.
Mr. Miron said a small per capita increase in Chinese beef
consumption could easily be equivalent to all of Brazil's current
exports of beef annually of nearly 2 million tons, the report
notes.
Mr. Miron said the company's Keystone division, which focuses on
supplying restaurant chains in the United States and Asia, is
leading one of the company's main investments of $35 million to
build a new plant in Thailand. It will have capacity to produce
20,000 tonnes of processed food a year starting in 2017, the
report relays.
Next year, Miron said the beef division is expected to expand its
sales in Malaysia, which should allow the company to export beef
on the bone and raise the value of products sold there, the report
adds.
As for China, Miron said only that the company expects 2017 to "be
an equally fruitful year in the country." In 2015, Brazil cleared
some of its slaughterhouses to ship beef to China, which had been
suspended since 2012 due to concerns over mad cow disease.
The World Animal Health Organization maintained Brazil's status as
a country with an insignificant risk of the disease.
Miron said the clearance of fresh Brazilian beef for import into
the United States in August helped open the door to other markets,
especially in Asia, which tend to follow U.S. officials'
recommendations.
"We expect Mexico and Canada to be the next markets to open," he
said.
MARFRIG GLOBAL: S&P Affirms 'B+' CCR, Outlook Positive
------------------------------------------------------
S&P Global Ratings affirmed its 'B+' global scale corporate credit
and issue-level ratings on Marfrig Global Foods S.A. At the same
time, S&P affirmed its 'brBBB+' national scale corporate credit
rating on the company. The outlook for all corporate credit
ratings is positive. S&P maintains its recovery rating of '4' for
its senior unsecured debts, which indicates an average recovery
expectation of 30%-50%, in the lower band of the range.
The affirmation reflects S&P's belief that Marfrig is on track of
its deleveraging path, but it still expect to see a faster pace of
debt reduction with internal cash flow generation to upgrade the
ratings.
S&P expects Marfrig to gradually reduce debt in 2017 thanks to the
resiliency and growth of Keystone's operations, offsetting the
difficult conditions for its Brazilian beef business in second
half of 2016, while lower interest payments raise the company's
operating cash flows. Marfrig's conversion of BNDES'
R$2.1 billion debenture into equity in January 2017 is likely to
lower its annual interest payments by around R$300 million. In
addition, the company's ongoing efforts to improve capital
structure by extending debt maturities have also resulted in lower
overall cost of funding, as seen in the recent issuance of
$1.0 billion notes due 2023, which Marfrig used to pay down more
expensive bonds maturing in 2016, 2017, 2018, and 2020, easing the
debt amortization schedule.
"We also expect Marfrig's consolidated EBITDA margins to be 8.5%-
9.5% in the next 18 months, down from 10% in the 12 months ended
June 30, 2016. This is due to a challenging market conditions for
its beef operations in Brazil stemming from sluggish demand in the
domestic market, persistent high cattle costs, lower export
prices, and a rising Brazilian real, which makes exports less
profitable. Nevertheless, the company mitigated these risks by
reducing its slaughtering capacity in its Argentinean and
Brazilian operations, reducing idleness and maintaining sound
operating efficiency. At the same time, the group benefits from
the diversification of the KeyStone's poultry operations in U.S.
and Asia with leading positions in food-service channels, which
has kept margins resilient and an average revenue growth of 15%
over the past few years. The recent opening of the U.S. and
Chinese markets for Brazilian beef exports should also help to
offset volumes pressures," S&P said.
Recent debt refinancing and further interest decrease should
streamline Marfrig's cash flow generation, boosting FOCF to close
to R$500 million in 2017 and higher afterwards, which S&P expects
the company to use for debt reduction.
PETROLEO BRASILEIRO: Moody's Raises CFR to B2, Outlook Stable
-------------------------------------------------------------
Moody's Investors Service upgraded all ratings of Petroleo
Brasileiro S.A. (Petrobras)'s and ratings based on Petrobras'
guarantee, including the company's senior unsecured debt and
corporate family rating to B2 from B3 given lower liquidity risk
and prospects of better operating performance in the medium term.
At the same time, Moody's raised the company's baseline credit
assessment (BCA) to b3 from caa2.
The outlook for all ratings was changed to stable from negative.
Upgrades:
Issuer: Petrobras Global Finance B.V.
Backed Senior Unsecured Shelf, Upgraded to (P)B2 from (P)B3
Backed Senior Unsecured Regular Bond/Debenture, Upgraded to B2
from B3
Issuer: Petrobras International Finance Company
Backed Senior Secured Shelf, Upgraded to (P)B1 from (P)B2
Backed Senior Unsecured Shelf, Upgraded to (P)B2 from (P)B3
Backed Subordinate Shelf, Upgraded to (P)B3 from (P)Caa1
Backed Senior Unsecured Regular Bond/Debenture, Upgraded to B2
from B3
Issuer: Petroleo Brasileiro S.A. - PETROBRAS
Corporate Family Rating, Upgraded to B2 from B3
Senior Secured Shelf, Upgraded to (P)B2 from (P)B3
Senior Unsecured Shelf, Upgraded to (P)B2 from (P)B3
Subordinate Shelf, Upgraded to (P)B3 from (P)Caa1
Preferred Shelf, Upgraded to (P)Caa2 from (P)Caa3
Outlook Actions:
Issuer: Petrobras Global Finance B.V.
Outlook, Changed To Stable From Negative
Issuer: Petrobras International Finance Company
Outlook, Changed To Stable From Negative
Issuer: Petroleo Brasileiro S.A. - PETROBRAS
Outlook, Changed To Stable From Negative
RATINGS RATIONALE
The actions on Petrobras' ratings and BCA reflect improvements in
the company's liquidity profile and in the regulatory framework in
Brazil (Ba2 negative), over the last few months, which have
reduced Petrobras' credit risk. Certain external factors also
helped the company achieve some of its cash generation and asset
sale goals for the year, including a better market sentiment in
Brazil, following the presidential impeachment process, and the
resulting appreciation of the Brazilian real, which reduced the
company's costs, capital expenditures and debt leverage. The
actions also incorporate recent evidence of Petrobras' management
ability to move forward with its financial and operating
strategies and its commitment to conservative financial policies,
as shown in the company's 2017-21 business plan, despite high
execution challenges related to ambitious increasing levels of
capital and operating efficiency.
Petrobras' liquidity risk has declined over the last few months on
the back of $9.1 billion in asset sales so far in 2016 and around
$10 billion in exchanged notes during the third quarter, which
extended the company's debt maturity profile. Before the last
bond issuances in May and July, Petrobras had not accessed capital
markets since June 2015 due to low credit appetite for the Oil and
Gas industry and Petrobras itself, as well as for Brazil's risk in
general, given economic and political concerns.
However, liquidity risk remains significant. As of June 30, 2016,
Petrobras' maturing debt in the remainder of 2016, fiscal years
2017 and 2018 was $5.2 billion, $8.1 billion, and $14.3 billion,
respectively, for a total of $27.3 billion in the next 2.5 years.
In addition, the class action lawsuit, the US Securities Exchange
Commission (SEC)'s civil investigation and the US Department of
Justice (DoJ)'s criminal investigation related to bribery and
corruption will negatively affect the company's cash position in
an amount yet unclear. Other threats to Petrobras' liquidity, as
well as to its operating and financial performance, include tax
contingent liabilities, execution risk related to the 2017-21
business plan and potential delays in fully executing its asset
sales plan.
Petrobras' management has been demonstrating increased autonomy
over pricing policy, which rises cash flow visibility and thus
enhances the company's ability to pursue its large scale asset
sale program in 2017-18. For instance, on October 14, Petrobras
announced a new fuel pricing policy based on, among other factors,
(i) local prices never below international prices, (ii) an
additional margin to international parity, (iii) market share.
Prices will be reassessed on a monthly basis. Foreign currency
rate will also be a consideration, as it affects purchase of crude
by its refining business from its exploration and production
business as well as imports of crude and fuel products. In
addition, Petrobras has announced reductions to its wholesale
prices of gasoline (- 3.2%) and diesel (- 2.3%). Moody's believes
that the new pricing policy will address two main purposes: first,
it will fight declining market share (for instance, imports of
diesel by third parties increased to 850,500 m3 in September 2016
from 360,520 in January) as lower fuel prices would be offset by
higher sales volumes. Second, it will reduce price risk for times
of higher crude prices, when local fuel prices could lose its
positive margin over international prices, which Moody's believes
is currently at 20% (note that the company lost $10 billion
annually in 2010-2014 from price subsidies).
Petrobras 2017-21 business plan announced in October shows
conservative financial goals. However, actual delivery of
objectives will depend on high managerial focus and discipline.
Moody's believes that the plan's execution is challenging because
it indicates a reduction in reported net leverage to 2.5 times by
the end of 2018 from 5.3x in 2015 based on significant
improvements in operating efficiencies and higher crude prices,
which have been highly volatile in the last couple of years and
could remain so given continued excess supply and weak demand.
The regulatory environment has recently improved in Brazil on the
back of the government's intention to help Petrobras meet its
deleveraging strategy so it can raise capital expenditures in the
medium term, which would positively affect the country's energy
supply and production chain. For instance, on October 5, 2016,
the Brazilian lower house passed a bill that will remove the
obligation for Petrobras to participate with a minimum 30% equity
stake in all new Exploration and Production projects. The passed
bill should be approved in the coming weeks. In addition, Moody's
believes that, given adverse conditions in the energy construction
business in Brazil, the company will be granted the necessary
waivers from the energy regulator, ANP, regarding minimum local
content requirements and thus be exempted from paying fines.
Petrobras' b3 BCA, which indicates Moody's view of the company's
standalone credit strength, considers its high financial leverage,
low to negative free cash flow, weak liquidity, local currency
volatility risk and operating challenges in a difficult industry
and economic environment. Consolidated free cash flow will remain
under pressure in the foreseeable future as its upstream business
suffers from low oil prices and downstream operations are hurt by
low demand, high competition and local currency volatility, at the
same time that the new pricing policy is tested.
Petrobras' b3 BCA and B2 rating are supported by the company's
solid reserve base and dominance in the Brazilian oil industry,
and its importance to the Brazilian economy. Furthermore, the
ratings reflect the company's sizeable reserves at 10,515.9 Mboe,
its renown technological offshore expertise and potential for
continued growth in production over the long-term.
Petrobras' B2 ratings also consider Moody's joint-default analysis
for the company as a government-related issuer. Petrobras'
ratings reflect Moody's assumption for a moderate likelihood of
timely extraordinary support from the government of Brazil.
Despite its stated willingness to stand behind Petrobras, Moody's
believes that the government's current fiscal situation tempers
its capacity to support Petrobras sufficiently to avoid a default.
Petrobras' rating now incorporates one notch of uplift between
Petrobras' BCA and its senior unsecured rating, down from two
notches previously, given the company's lower liquidity risk and
thus need of support and the government's persistently tight
fiscal position. Moody's continues to assume moderate default
dependence between Petrobras and the government.
Petrobras' ratings have a stable outlook, reflecting Moody's
expectation that, in the next 12 to 18 months, the company's
liquidity and overall credit risk will gradually improve,
supported by managerial focus on improvements in operations and
capital allocation; further debt refinancing; and additional asset
sales, despite the uncertainty around the payment of fines related
to the class action lawsuit as well as the SEC and DoJ
investigations.
Positive rating actions could be considered if the company raises
sufficient sums through asset sales or new debt arrangements to
refinance its upcoming debt maturities and significantly
strengthen its liquidity profile while also improving operating
and financial performance. Although current low levels of capex
in connection with asset sales would reduce future revenues and
cash flow, actions that further strengthen the company's liquidity
but also help improve operating margins and prospects of leverage
reduction are currently likely to have a greater credit impact
than possible reductions in production, revenues and reserve base.
Negative actions on Petrobras' ratings could result from
deterioration in its liquidity or financial profile. Downgrades
could also be prompted if negative developments from the
corruption investigations or litigation against the company appear
to have the potential to significantly worsen the company's
liquidity or financial profile.
The principal methodology used in these ratings was Global
Integrated Oil & Gas Industry published in October 2016. Other
methodologies used include the Government-Related Issuers
methodology published in October 2014.
Petrobras is an integrated energy company, with total assets of
$255 billion as of June 30, 2016. Petrobras dominates Brazil's
oil and natural gas production, as well as downstream refining and
marketing. The company also holds a significant stake in
petrochemicals and a position in sugar-based ethanol production
and distribution. The Brazilian government directly and
indirectly owns about 46% of Petrobras' outstanding capital stock
and 60.5% of its voting shares.
USINAS SIDERURGICAS: Fitch Hikes Issuer Default Ratings to 'CCC'
----------------------------------------------------------------
Fitch Ratings has upgraded Usinas Siderurgicas de Minas Gerais
S.A.'s (Usiminas) Long-Term Foreign and Local Currency Issuer
Default Ratings (IDRs) to 'CCC' from 'RD' and its National Scale
rating to 'CCC(bra)' from 'RD(bra)'. At the same time, Fitch has
upgraded Usiminas' senior unsecured notes to 'CCC/RR4' from
'C/RR4'.
The upgrades reflect the improvement in Usiminas' financial
flexibility, following the completion of its debt restructuring
and a capital injection. Due to the rescheduling of the maturity
dates of 92% of the company's debt, it is now in a better position
to withstand the severe downturn in Brazilian steel demand. The
new ratings assume the company will comply with all requirements
of the debt agreement and will have access to at least BRL700
million of the cash held at Mineracao Usiminas S.A. (Musa), a 70%
joint-venture with Sumitomo, by June 2017. The ongoing
shareholders disputes, however, continue to negatively overhang
Usiminas' ratings.
KEY RATING DRIVERS
Improved Financial Flexibility
Usiminas has successfully completed its debt restructuring plan,
which has resulted in a significant extension of the maturity date
of 92% of the company's debt. As part of the agreement, this debt
with the Brazilian creditors will be collateralized by assets
consisting of its hot and cold coils units of the Ipatinga mill,
representing 50% of the outstanding debt related to these
Brazilian creditors. Usiminas' outstanding USD180 million
unsecured notes due in 2018 were not part of the debt
restructuring. The indenture for these notes includes a limitation
on lien clause that typically requires the unsecured notes to be
equally and ratably secured. If these notes due receive similar
collateral or are not repaid, they would likely be downgraded in
the future.
Challenging Dynamics in the Steel Industry
Usiminas' operating performance has been negatively impacted by
the continued decline in demand for domestic steel in Brazil. Flat
steel consumption in Brazil was down 18% during 2015 and 8% during
the first nine months of 2016. Fitch expects limited recovery in
sales volumes during 2017 and more solid recovery only during
2018. The challenging scenario of oversupply in the global steel
market is expected to continue to pressure the industry's
fundamentals during 2017.
Operating Cash Flow to Improve; FCF to Benefit from Lower Capex
Usiminas reported a material decline in operating performance
during 2015 and 2016 as a result of severe deterioration in the
Brazilian domestic steel market. Usiminas decided to resize its
operation by reducing its capacity to be more in line with
domestic demand, and mostly to avoid the need to operate in the
non-profitable export market. The company halted certain
production capacity at its Cubatao mill, maintaining only the
rolling operations that could be supplied by third parties' input
once product demand exists. Usiminas faced around BRL257 million
of non-recurring expenses related to the capacity shutdowns, which
also includes the renegotiations of its take or pay contract with
MRS Logistica S.A.
Fitch's base case projects EBITDA generation of around BRL600
million in 2017, capex of BRL350 million, and positive FCF of
approximately BRL50 million. These figures compare positively to
EBITDA of BRL322 million, capex of BRL725 million and negative FCF
of 539 million during 2015, per Fitch's criteria. Greater than
expected efficiency in managing working capital flow during the
second half of 2016 might further increase positive FCF, but Fitch
considers Usiminas to now have limited ability as inventories are
already at historically low levels.
Improvement in Debt Profile; Effective Deleveraging Trend Starting
Mid-2017
Usiminas was able to extend the debt maturity of BRL6.7 billion of
debt for 10 years, with a three-year grace period. The agreement
was subject to a capital injection of BRL1 billion and the receipt
of around BRL700 million of cash at Musa by June, 30 2017. Per
Fitch's criteria, Usiminas' total debt was BRL7.1 billion as of
June 30 2016. Fitch expects Usiminas' net leverage to be around
7.5x to 8.0x during 2016 and to decline to 4.5x-5.0x during 2017.
Ongoing Shareholders Disputes
The extended legal disputes between Usiminas shareholders elevate
the company's business risks. The lack of agreement regarding
business strategy and the recurring changes in management tends to
slow down the decisionmaking process and provide little strategic
clarity. Thus, considering the current tough environment in the
steel industry in Brazil, it is a concern for Fitch regarding
Usiminas' ratings.
KEY ASSUMPTIONS
-- 24% drop in steel volumes in 2016 and limited recovery from
2017 on with an increase of 5%;
-- High single-digit increase in domestic prices in 2016;
-- BRL350 million in capex in 2016;
-- 2016 EBITDA margin between 6%-7%.
RATING SENSITIVITIES
Future developments that may individually or collectively lead to
a positive rating action include:
-- Sustained turnaround in Usiminas' operating cash flow
generation that drives a deleveraging trend and benefit
credit ratios;
-- Faster than expected recovery of the local steel industry in
Brazil;
-- Positive resolution of shareholder disputes.
Future developments that may individually or collectively lead to
a negative rating action include:
-- Inability to access the cash at Musa
-- Maintenance of net leverage ratio to levels above 6.5x
during 2017
-- Recurring shareholders disputes that delay the expected
positive trend in cash flow
LIQUIDITY
Usiminas' cash and marketable securities as of June 30, 2016 were
BRL2.7 billion, but Fitch believes readily available cash at
Usiminas' holding level to be only around BRL1.2 billion. This
cash position plus the additional BRL700 million to come from Musa
within the next three quarters should be sufficient to support
operating cash volatilities in the medium term and face debt
maturities starting during 2018. The uncertainties regarding the
2018 bond are partially mitigated by this liquidity.
FULL LIST OF RATING ACTIONS
Fitch has upgraded Usiminas' ratings as follows:
-- Foreign Currency Long-Term IDR to 'CCC' from 'RD';
-- Local Currency Long-Term IDR to 'CCC' from 'RD';
-- National Scale rating to 'CCC(bra)' from 'RD(bra)';
-- US$400 million notes due 2018 to 'CCC/RR4' from 'C/RR4'.
==========================
C A Y M A N I S L A N D S
==========================
ADAR ENHANCED: Shareholders' Final Meeting Set for Nov. 10
----------------------------------------------------------
The shareholders of Adar Enhanced INV Fund Ltd. will hold their
final meeting on Nov. 10, 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:
Jeffrey Faber
c/o 3 East 54th Street, 8th Floor
New York, NY 10022, USA
Telephone: +1 (646) 543-3266
ADAR INVESTMENT: Shareholders' Final Meeting Set for Nov. 10
------------------------------------------------------------
The shareholders of Adar Investment Fund Ltd. will hold their
final meeting on Nov. 10, 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:
Jeffrey Faber
c/o 3 East 54th Street, 8th Floor
New York, NY 10022
USA
Telephone: +1 (646) 543-3266
CHI LIMITED: Shareholders' Final Meeting Set for Nov. 11
--------------------------------------------------------
The shareholders of CHI Limited will hold their final meeting on
Nov. 11, 2016, to receive the liquidator's report on the company's
wind-up proceedings and property disposal.
The company's liquidator is:
David Dyer
P.O. Box 1984 Grand Cayman KY1-1104
Cayman Islands
Telephone: (345)949-8244
Facsimile: (345)949-5223
CONCERTO CREDIT I: Shareholders' Final Meeting Set for Nov. 3
-------------------------------------------------------------
The shareholders of Concerto Credit Opportunity Offshore Fund I,
Ltd. will hold their final meeting on Nov. 3, 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:
Concerto Asset Management, LLC
c/o Julie Bouhuys
401 North Tryon Street
10th Floor
Charlotte North Carolina 28202
United States of America
Telephone: +1 (704) 988 5492
e-mail: julie.bouhuys@concertoasset.com
CORA DEAL: Shareholders' Final Meeting Set for Nov. 11
------------------------------------------------------
The shareholders of Cora Deal Limited will hold their final
meeting on Nov. 11, 2016, to receive the liquidator's report on
the company's wind-up proceedings and property disposal.
The company's liquidator is:
David Dyer
P.O. Box 1984 Grand Cayman KY1-1104
Cayman Islands
Telephone: (345)949-8244
Facsimile: (345)949-5223
KAZIMIR RUSSIA: Shareholders' Final Meeting Set for Nov. 2
----------------------------------------------------------
The shareholders of Kazimir Russia Growth Investment Fund Limited
will hold their final meeting on Nov. 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:
Frances Holliday
c/o Jasmine Amaria
Walkers
6 Gracechurch Street
London EC3V 0AT
UK
Telephone: +1 44 207 2204975
LIONEYE MASTER: Shareholder to Hear Wind-Up Report on Nov. 1
------------------------------------------------------------
The shareholder of Lioneye Master Fund Ltd. will hear on Nov. 1,
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:
Lioneye Capital Management LLC
c/o Justin Savage
Ogier, Attorneys, 89 Nexus Way
Camana Bay, Grand Cayman KY1-9009
Cayman Islands
Telephone: +1 (345) 949 9876
Facsimile: +1 (345) 949 9877
LIONEYE OFFSHORE: Shareholder to Hear Wind-Up Report on Nov. 1
--------------------------------------------------------------
The shareholder of Lioneye Offshore Fund Ltd. will hear on Nov. 1,
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:
Lioneye Capital Management LLC
c/o Justin Savage
Ogier, Attorneys, 89 Nexus Way
Camana Bay, Grand Cayman KY1-9009
Cayman Islands
Telephone: +1 (345) 949 9876
Facsimile: +1 (345) 949 9877
MILLION CHOICES: Shareholders' Final Meeting Set for Nov. 1
-----------------------------------------------------------
The shareholders of Million Choices Limited will hold their final
meeting on Nov. 1, 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 liquidators:
Stephen Liu Yiu Keung
Koo Chi Sum
c/o Maples and Calder
PO Box 309, Ugland House
Grand Cayman KY1-1104
Cayman Islands
PPM AMERICA: Shareholders' Final Meeting Set for Nov. 11
--------------------------------------------------------
The shareholders of PPM America High Yield CBO II (Cayman) Ltd
will hold their final meeting on Nov. 11, 2016, to receive the
liquidator's report on the company's wind-up proceedings and
property disposal.
The company's liquidator is:
David Dyer
P.O. Box 1984 Grand Cayman KY1-1104
Cayman Islands
Telephone: (345)949-8244
Facsimile: (345)949-5223
REGIF - REAL: Shareholders' Final Meeting Set for Nov. 9
--------------------------------------------------------
The shareholders of Regif - Real Estate General Investment Fund
will hold their final meeting on Nov. 9, 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:
Alan Cole
Suite 205 A, Saffrey Square
Bay Street
P.O. Box N-9934, Nassau
Bahamas
Telephone: +1 242 322 5444
SUTTER CBO 1998-1: Shareholders' Final Meeting Set for Nov. 11
--------------------------------------------------------------
The shareholders of Sutter CBO 1998-1 Ltd will hold their final
meeting on Nov. 11, 2016, to receive the liquidator's report on
the company's wind-up proceedings and property disposal.
The company's liquidator is:
David Dyer
P.O. Box 1984 Grand Cayman KY1-1104
Cayman Islands
Telephone: (345)949-8244
Facsimile: (345)949-5223
THU AL-MAJAZ: Shareholders' Final Meeting Set for Nov. 11
---------------------------------------------------------
The shareholders of Thu Al-Majaz Commodities Portfolio will hold
their final meeting on Nov. 11, 2016, to receive the liquidator's
report on the company's wind-up proceedings and property disposal.
The company's liquidator is:
David Dyer
P.O. Box 1984 Grand Cayman KY1-1104
Cayman Islands
Telephone: (345)949-8244
Facsimile: (345)949-5223
===================================
D O M I N I C A N R E P U B L I C
===================================
DOMINICAN REPUBLIC: Halts All Amber Extraction on Damage
--------------------------------------------------------
Dominican Today reports that Dominican Republic Environment
Ministry officials accompanied by military personnel halted all
extraction of the semiprecious stone amber, to prevent further
ecological damage at the Septentrional (northern) range.
The measure comes in the heels of frequent complaints by
environmentalists and area residents concerned over damages,
according to Dominican Today.
The military detained several people for excavating the
mountainside and for clearing trees, and seized amber mining
equipment on the La Cumbre-Luperon tourist road near the town
Tamboril, the report notes.
Recently owners of land on the northern range expressed concern
over squatters who use backhoes to extract amber, which the affirm
damage not only areas near La Cumbre, but villages near Puerto
Plata, where "businessmen" buy the resin-formed stone from
farmers, the report relays.
Clearings Stunt Rivers
Quoted by diariolibre.com, former Cibao Ecological Society (SOECI)
president Nelson Bautista said at least six of the volume of the
rivers whose source is the range has been reduced, some totally
dry, by clearings to search for amber, the report notes. "Among
the most affected aquifer tributaries include Jacagua, Gurabo,
Palo Quemado and San Francisco de Y†sica and Yaroa," the report
adds.
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.
DOMINICAN REPUBLIC: Grows 6.9% Thru 3Q, Central Banker Says
-----------------------------------------------------------
Dominican Today reports that the Central banker Hector Valdez
Albizu said preliminary figures show that Dominican Republic's GDP
grew 6.9% from January to September, an increase he affirmed is
well above its potential.
Speaking to mark the Central Bank's 69th anniversary, the official
said the growth was paced by mining, with 22.3%, construction
12.2%, agriculture 10.6%, financial intermediation 10.4%, health
8.2%, other service activities 7.1%, retail 6.7%, education 6.3%,
hotels, bars and restaurants 5.9%, transport 5.3%, local
manufacturing 5.3%, among others, according to Dominican Today.
Dollars
In reference to recent concerns over a reported shortage of
dollars, he reiterated that the Dominican economy is generating
enough of the US currency to meet demand of the various productive
sectors, the report notes.
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: Decline in Currency is "Disruptive", Central Bank Says
---------------------------------------------------------------
Trinidad Express reports that the Bank of Jamaica (BOJ) has
described the decline in value of the local currency as
"unwarranted and disruptive".
The Jamaican dollar is now being sold for J$129.19 (One Jamaica
dollar =US$0.008 cents) as the US dollar gained four cents in
trading on Friday, Oct. 23, according to Trinidad Express.
In response, the BOJ says it sold US$30 million to the foreign
exchange market, noting that the intervention is intended to
reassure users of foreign exchange that the BOJ is standing behind
the preservation of orderly conditions in the market, the report
notes.
In addition, the central bank says it will be paying out specified
foreign currency denominated certificates of deposit ahead of
their original maturity dates, the report relays.
The report discloses that the central bank said the early
redemption will add significantly to the volume of US dollar
liquidity available to institutions and individuals.
The total value of the securities amounts to US$258 million.
The bank says notice of early redemption to instrument holders
will be made this week, the report relays.
At the start of the year, the Jamaica dollar was valued at
J$120.37 for US$1, but this has not sat well with members of the
main opposition People's National Party (PNP) voicing concerning
about the slide in value, the report notes.
"I cannot understand how the Government has not yet addressed,
that in that period of six to seven months, the dollar has moved
from $121 to $129 rushing towards $130. That movement amounts to
a dollar-per-month slide in the Jamaican dollar under the
leadership of the man who loves to boast about dollar wine and the
dollar slide," Mr. Brown then said, the report relays.
In a recent presentation to the Upper House of Parliament,
opposition legislator, Senator Lambert Brown said Finance Minister
Audley Shaw was hypocritical and pointed to speeches made by Shaw
-- who while in opposition, denounced the depreciation of the
dollar, the report says.
Meanwhile just last week, the director of the International
Monetary Fund's (IMF) western hemisphere department, Alejandro
Werner, argued that the depreciation is good as it has brought the
Jamaican dollar where the economy can compete against other
countries like Mexico, where the rate of depreciation has been
even greater, the report adds.
As reported in the Troubled Company Reporter-Latin America on
Sept. 28, 2016, 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+'.
NATIONAL COMMERCIAL: S&P Affirms 'B' ICR; Outlook Stable
--------------------------------------------------------
S&P Global Ratings affirmed its 'B' long- and 'B' short-term
issuer credit ratings on National Commercial Bank Jamaica Ltd
(NCBJ). The stand-alone credit profile (SACP) is 'b'. The
outlook is stable.
NCBJ's strong business position continues reflect the bank's
leading position as the largest lender in Jamaica with a solid
market share and a diversified revenue sources. Moreover, it has
a sticky base of customers even during episodes of financial
stress. S&P's assessment on NCBJ's capital and earnings remains
moderate, based on its forecasted RAC ratio average of 5.2% for
2017 and 2018. S&P's moderate assessment of NCBJ's risk position
reflects its lack of geographic diversification and its
concentration of risk exposures by economic sector and client.
S&P continues assessing NCBJ's funding as average, reflecting its
funding structure that consists mainly of core deposits. S&P's
liquidity assessment remains adequate due to the bank's broad
liquid assets to total wholesale ratio of 2.66x as of June 2016
with a three-year average of 2.08x. Due to an adequate funding
profile, S&P considers the bank can successfully manage its
liquidity even under stressful conditions for more than six
months. NCBJ's stand-alone credit profile remains at 'b'.
======================
P U E R T O R I C O
======================
SACRED HEART UNIVERSITY: Moody's Lowers 2012A Bonds Rating to Ba3
-----------------------------------------------------------------
Moody's Investors Service has downgraded University of the Sacred
Heart (Universidad del Sagrado Corazon or "Sagrado") to Ba3 from
Ba1 on its General Revenue and Refunding Bonds, 2012A issued
through Puerto Rico Industrial, Tourist, Educational, Medical and
Environmental Pollution Control Facilities Financing Authority.
The rating outlook is negative.
The downgrade to Ba3 reflects pressured operations and revenue
challenges due to declining enrollment. Sagrado has reported two
consecutive years of failing to meet financial covenants related
to its Series 2012A bonds. The university is now required to hire
a consultant to review and recommend revisions to its operations.
As long as it is working to implement the recommendations, the
failure to meet the covenants is not an Event of Default. The
operating challenges will continue for the foreseeable future as
Sagrado is recruiting in a highly challenging environment in its
primary market, the Commonwealth of Puerto Rico (Caa3 developing).
Sagrado's Ba3 rating favorably incorporates active fiscal
management and financial oversight working to manage expenses to
meet enrollment and revenue declines. This has historically
resulted in positive operating performance and cash flow
generation. Supporting market relevance, Sagrado is distinguished
in its competitive domestic market as a large private Catholic
university located in San Juan. However, with continued expected
enrollment declines and revenue challenges, and possible
difficulties implementing further cost reductions, operations are
likely to remain pressured over the outlook period. Further,
liquidity is reported to have declined for FY 2016 due to lower
than budgeted revenues resulting in weak operating cash flow,
reducing future flexibility.
Rating Outlook
The negative outlook reflects the likelihood of additional rating
action if the university fails to achieve compliance on its
financial covenants for FY 2017, or should the university
materially fail to meet its fall 2017 enrollment targets,
continuing further operating pressures and liquidity usage.
Factors that Could Lead to an Upgrade
Stabilized student demand with growing net tuition per student
and higher non-resident enrollment
Substantial growth in balance sheet resources and liquidity
Factors that Could Lead to a Downgrade
Fall 2017 enrollment and FY 2017 operating results weaker than
planned
Decline in unrestricted liquidity
Legal Security
The Series 2012A bonds are an unsecured general obligation of
university. There is an additional bonds test and rate covenant.
There is no debt service reserve fund. The Loan Agreement for the
bonds has two financial covenants, a Debt Service Coverage
covenant of more than 110% and a Expendable Financial Resources to
Debt covenant of more than 35%. For FY 2015, Sagrado failed both
covenants with a negative 90% for Debt Service Coverage and a
positive 26% for Expendable Financial Resource to Debt. The
university estimates again failing both covenants for FY 2016,
based on its preliminary results. The negative debt service
coverage is largely attributable to pension adjustments included
in the changes in unrestricted net assets and, consequently, in
the debt service coverage calculation for the covenant. Moody's
considers pension adjustments as non-operating expenses and,
therefore, not included in our debt service coverage calculation,
resulting in a positive debt service coverage number. Due to
failing to meet the financial covenants for two consecutive years,
Sagrado must retain a consultant for recommendations to review its
business operations and pricing. As long as the university is
taking all lawful actions to comply with the recommendations, the
covenant failure is not an Event of Default. The university is
currently in the process of hiring the consultant.
Use of Proceeds. Not applicable.
Obligor Profile
Universidad del Sagrado Corazon (University of the Sacred Heart)
is a large, private Catholic liberal arts university founded in
1880 by the religious order of the Society of the Sacred Heart.
In 1970, the Sisters of the Sacred Heart transferred the
governance to a lay Board of Trustees. Sagrado is located in the
Santurce section of San Juan, a historic area. The university is
largely undergraduate and offers selected masters and post-
graduate certificates programs. Notable programs include those in
the communications major, including digital media. Headcount
enrollment for fall 2016 was over 4,900 students.
================
S U R I N A M E
================
SURINAME: Fitch Assigns 'B+' Rating on USD550MM Bond Due 2026
-------------------------------------------------------------
Fitch Ratings has assigned a 'B+' rating to Suriname's first
global bond issuance, a USD550 million bond maturing 2026. The
bond has a coupon of 9.25%.
The proceeds will be used to refinance existing debt of two state-
owned companies, the Staatsolie Maatschappij Suriname N.V.
(Staatsolie) oil company and the N.V. Energie Bedrijven Suriname
(EBS) electricity company; to refinance government debt
maturities; and to complete the government's investment in the
Suriname Gold Company (Surgold), in which the government and
Staatsolie own a collective 25% stake.
KEY RATING DRIVERS
The bond rating is in line with Suriname's long-term foreign
currency Issuer Default Rating of 'B+'.
RATING SENSITIVITIES
The bond rating would be sensitive to any change in Suriname's
long-term foreign currency IDR.
On Feb. 26, 2016, Fitch downgraded Suriname's long-term foreign
currency IDR to 'B+' and revised the Outlook to Negative.
=================
V E N E Z U E L A
=================
VENEZUELA: Lawmakers Plan Impeachment Cases Against President
-------------------------------------------------------------
Kejal Vyas at The Wall Street Journal reports that Venezuelan
lawmakers said they would begin impeachment proceedings against
President Nicolas Maduro in a raucous session Sunday that briefly
had to be halted after pro-government protesters stormed the halls
of parliament.
The legislature, which has been consistently undermined by the
executive and the Supreme Court since the opposition took control
of it in January, said it would begin putting Mr. Maduro on trial
for violating the constitution just days after the government
suspended an effort to recall the embattled leader, according to
The Wall Street Journal.
While mostly symbolic in a country where Mr. Maduro has
concentrated power during his three years in office, the measure
underscores the polarization faced by this oil-dependent nation as
it grapples with a crippling economic crisis and a potential
default on its foreign debt, the report notes. The opposition has
called for street demonstrations to pressure the president, who
polls show is disliked by four out of five Venezuelans, the report
relays.
"Facing an abandonment of the constitution, the people have a
right to rebellion," said Julio Borges, leader of the National
Assembly's opposition majority, the report says.
Mr. Borges and other opposition lawmakers approved a 10-point
resolution that declares the president staged a coup after his
allies struck down the recall referendum, which is sanctioned by
the constitution. Government detractors want to hold the
referendum before Jan. 10 because it would trigger fresh
elections, the report notes. But electoral officials allied with
Mr. Maduro have said it could only happen after that, when a
successful effort would still allow the president to name a
successor to finish his term through 2019, the report relays.
Since the opposition won a supermajority of congressional seats,
the National Assembly has seen law after law nullified by the
Supreme Court and the legislature has even been stripped of
coverage by the large state-media apparatus, the report discloses.
As part of the resolution, congressmen said they would try to
replace Supreme Court magistrates and leaders of the national
electoral council, who they accuse of doing the president's
bidding in violation of the law, the report notes.
The president's allies in parliament scoffed at the opposition's
measures and accused them of trying to launch their own coup, the
report relays. "Today we're going to hear everything in the right
wing's reality show," said Tania Diaz, a pro-government
legislator.
Mr. Maduro, meanwhile, on Sunday landed in Qatar, the last stop in
a four-nation tour aimed at drumming up international support to
raise oil prices by slashing production, the report notes. After
his previous stop in Saudi Arabia, Mr. Maduro said he was
optimistic an agreement could be reached soon between exporters
both in and out of the Organization of the Petroleum Exporting
Countries, the report says.
National Assembly President Henry Ramos and other lawmakers
applauded that Sunday's assembly session was broadcast in its
entirety on a new YouTube channel called El Capitolio TV, the
report notes. The broadcast, however, went mute for more than 30
minutes after red-clad supporters of Mr. Maduro breached security
and entered the legislative chamber, waving flags and disrupting
the proceedings, the report relays.
"If we keep going how we're going, things are headed very badly,"
said Henry Ramos, president of the National Assembly and a fierce
Maduro critic. "And I'm not talking about for the political class
but rather for the whole country," he added.
As reported in the Troubled Company Reporter-Latin America on
July 5, 2016, Fitch Ratings affirmed Venezuela's Long-Term
Foreign-and Local-Currency Issuer Default Ratings (LT FC/LC IDR)
at 'CCC'. Fitch has also affirmed the sovereign's Short-Term
Foreign Currency (ST FC) IDR at 'C' and country ceiling at 'CCC'.
***********
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
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issuers' public debt and equity securities about which we report.
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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
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than a balance sheet solvency test.
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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, Ivy B. Magdadaro, 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
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* * * End of Transmission * * *