/raid1/www/Hosts/bankrupt/TCRLA_Public/170407.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
Friday, April 7, 2017, Vol. 18, No. 70
Headlines
A R G E N T I N A
ARGENTINA: S&P Raises LT Sovereign Credit Rating to 'B'
ARAUCO ARGENTINA: S&P Hikes Foreign Currency Rating to 'B'
BANCO DE LA PROVINCIA: S&P Raises ICR to 'B'; Outlook Stable
BANCO HIPOTECARIO: S&P Raises Issuer Credit Rating to 'B'
* S&P Raises Ratings on Seven Argentinean Provinces to 'B'
B E R M U D A
SEADRILL: Warns of 'Likely' Bankruptcy Filing in U.S. or U.K.
SEADRILL: Bankruptcy Proceedings May Impact Investors
C A Y M A N I S L A N D S
AHORA SI: Shareholders' Final Meeting Set for April 20
AMIJ INVESTMENT: Members' Final Meeting Set for April 14
ASHMORE TRADING: Shareholders Receive Wind-Up Report
BEI KAI CAPITAL: Shareholders Receive Wind-Up Report
BLAZE CORPORATION: Shareholders' Final Meeting Set for April 10
CLAIRSVILLE ENTERPRISES: Shareholders Receive Wind-Up Report
CVI GVF 26: Commences Liquidation Proceedings
CVI GVF 28: Commences Liquidation Proceedings
DGAM NG: Commences Liquidation Proceedings
DGAM OPPORTUNITIES FUND: Commences Liquidation Proceedings
DGAM SM: Commences Liquidation Proceedings
DGAM UNIQUE FUND: Commences Liquidation Proceedings
DGAM UNIQUE MASTER: Commences Liquidation Proceedings
DGAM UNIQUE SPV: Commences Liquidation Proceedings
DR II HOLDINGS: Commences Liquidation Proceedings
DUKES TRADING: Members' Final Meeting Set for April 11
HUMBER RIVER: Commences Liquidation Proceedings
KUDAYA INVESTMENTS: Shareholders Receive Wind-Up Report
MCP MOJNA: Members' Final Meeting Set for April 18
ST. MALO: Shareholders Receive Wind-Up Report
D O M I N I C A N R E P U B L I C
DOMINICAN REP: 46.1% of Spending Went to Pay Workers, Debt Service
J A M A I C A
BANK OF NOVA SCOTIA JAMAICA: GTAWU Concerned on Redundancy Plans
M E X I C O
GRUPO SENDA: S&P Revises Outlook to Negative & Affirms 'B' CCR
P U E R T O R I C O
GOVERNMENT DEVELOPMENT BANK: Moody's Cuts Sr. Notes Rating to C
LIBERTY CABLEVISION: S&P Assigns 'B' Rating to $85MM 1st-Lien Loan
- - - - -
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A R G E N T I N A
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ARGENTINA: S&P Raises LT Sovereign Credit Rating to 'B'
-------------------------------------------------------
S&P Global Ratings raised its long-term sovereign credit ratings
on the Republic of Argentina to 'B' from 'B-'. The outlook on the
long-term ratings is stable. S&P also affirmed its short-term
sovereign credit ratings on Argentina at 'B'. At the same time,
S&P raised its national scale ratings to 'raA+' from 'raBBB'. In
addition, S&P raised its transfer and convertibility assessment to
'B+' from 'B-', in line with S&P's assessment of sustained local
access to foreign exchange.
RATIONALE
The rating action reflects advances made in overall economic
policy aimed at resolving large economic imbalances while
restoring the country's policy credibility. The government has
made progress in improving external liquidity and access to
commercial funding and was able to issue external bonds for about
$22 billion in 2016 and $7.4 billion so far in 2017. Initial
steps to resolve the country's large economic imbalances and
microeconomic distortions, such as lowering inflation to an
expected 20% and 15% in 2017 and 2018, respectively, and adjusting
public services tariff to underlying cost, are helping to slowly
restore economic stability.
At the same time, policy predictability has improved and
institutions are strengthening--for example, the government's
announcement of medium-term fiscal targets has increased
transparency and accountability. The central bank is also moving
toward gaining some independence by reducing central government
financing and moving toward an inflation target regime. At the
same time, the national statistical agency, INDEC, has been
rebuilt, allowing publication of reliable data on key economic
variables.
Going forward, S&P believes the government will continue to face
political and social challenges to implement its economic plan.
Addressing difficult policy trade-offs will require skillful
management.
Since taking office, the Administration has changed overall
economic policy, prioritizing resolving several macroeconomic
imbalances while gradually building the country's credibility and
improving the overall weakened institutional framework. After
undergoing important methodological and organizational
restructuring since last year, INDEC is publishing timely,
reliable, and transparent information. Quickly curing the 2014
default and the shift in policy toward a market-oriented economy
are all indicators of a better payment culture.
However, after remaining relatively high during 2016, Argentina
President Mauricio Macri's popularity is at the lowest point since
becoming elected, reflecting the current economic context
characterized by an uneven economic recovery and still high,
albeit improving, inflation. That said, S&P expects overall
unrest to continue this year, particularly as S&P approaches
midterm elections in October 2017, but to diminish as the
population begins to feel the expected economic recovery.
S&P don't expect midterm elections to change the balance of power
because the government will still need to work with the opposition
to pass laws in Congress. S&P expects broad continuity in the
government's main economic policies.
After a contraction of 2.3% in 2016, S&P expects the economy to
recover and grow around 3% on average over the next three years
assuming the new economic policy approach gradually improves
investor sentiment and boosts consumer confidence.
S&P expects higher investments in public works, agriculture, and
energy, combined with stronger prospects for the agriculture
harvest this year, to be the main drivers behind the initial
recovery in 2017. At the same time, a mild but positive change in
Brazil's economy, faster-than-expected growth in broader private
investments, and potentially positive spillovers of the asset
repatriation program (Blanqueo) the government launched in 2016
could push growth further in 2017 and onwards.
In addition, credit growth, though coming from low levels at only
15% of GDP, could also play an important role in these dynamics.
Over the long term, one of Argentina's main challenges continues
to be trying to avoid its historical pattern of very volatile
economic performance. Moreover, a still highly polarized
political landscape could diminish the government's ability to
fully pursue its economic agenda, weakening growth prospects. In
this context, S&P estimates Argentina's GDP per capita measured in
U.S. dollars at an average of $13,700 over the next two years.
The pass-through from the exchange rate depreciation early in 2016
and the effects of the increase in utility prices has pushed
inflation up to around 40% in 2016. S&P expects inflation to slow
down to 20% and 15% in 2017 and 2018, respectively, and to
gradually reach single-digits by 2020. The central bank has taken
steps to lower inflation, such as significantly reducing the
central bank financing of the fiscal deficit (to 1.5% of GDP in
the 2017 budget from 2.5% in 2016 and 5% of GDP in 2015),
establishing a clear mandate for price stability by moving toward
an inflation target, and managing positive real interest rates;
together with building on the central bank's credibility and
independence, these are all key factors that support S&P's
expectation of lower inflation going forward.
Despite progress in lowering inflation, an adjustment in utilities
prices this year could lead to a rise in inflation. Therefore,
S&P sees limited room for the central bank to adopt a more relaxed
monetary policy framework, and S&P could expect the peso to remain
strong. At the same time, inflation levels and expectations will
depend strongly on the level of salary increases agreed upon
during the year, the cornerstone of the government's economic
strategy for this year.
The general government deficit was 7.3% of GDP in 2016 and will
likely be at a similar level in 2017, though S&P expects it to
slightly improve to 6.4% of GDP in 2018 after some fiscal
adjustments in economic subsidies. Going forward, S&P expects
only a gradual reduction in the fiscal deficit given the country's
rigid fiscal structure and the political challenges to the
Administration's fiscal consolidation plan, particularly given
public opposition to austerity measures. The government is
undergoing a gradual reduction in energy subsidies that, together
with other cuts in subsidies related to transportation, water, and
gas, could save about 4% of GDP over the next three years.
S&P expects general government debt to continue to rise gradually
due to both fiscal deficits and the impact of currency
depreciation. S&P estimates the change in general government debt
at an average of 11.3% of GDP in 2017-2020. S&P expects that
continued, although declining, fiscal deficits are likely to
contribute to a rising debt burden in the coming few years. In
addition, Argentina's net general government debt is forecasted to
gradually increase to 57% of GDP at year-end 2019 from 42%
estimated in 2016. S&P is now deducting debt owed to the national
pension system (ANSES) fund to be consistent with new government
funding policy to rely more on market debt, materially altering
the previous practice of using public-sector agencies as captive
funding sources. In addition, 41% of that debt stock is held by
other government-owned agencies--36.3% by the central bank, 2.6%
by Banco Nacion, and 1.8% by others--which diminishes the roll-
over risk. S&P estimates general government interest over general
government revenues to remain slightly below 5% in 2017-2020.
Banking exposure to the federal government was 9% as of the end of
December 2016. S&P is now excluding the central bank from the
calculation to be consistent with the government's new approach of
excluding all types of revenues from the central bank from its
primary revenues. The contingent liabilities to Argentina are
limited, in S&P's view, given the low levels of domestic credit to
GDP of lower than 20%.
The quick resolution of the long-standing litigation with holdout
creditors from Argentina's 2001 default permitted a return to
global capital markets for both private and public entities,
enhancing inflow of external funding and boosting liquidity. In
2016, the central government issued $22 billion, while provinces
issued an overall of $7 billion. Financing needs for 2017 are
estimated at $40 billion, including a $30 billion central
government financial deficit plus amortizations for $20 billion
(and deducting around $11 billion of central bank financing and
proceeds from the Tax Amnesty Law). The government already
secured global issuances for $7.4 billion ($15.2 billion when
adding the repurchase transaction with international banks) and
almost $14 billion in the local markets in the first months of
2017, already covering the bulk of its financing needs. S&P still
expects the government to issue $3 billion in global capital
markets. At the same time, provinces already issued around
$2 billion in global markets.
Increasing reliance on external issuances to both finance the
fiscal gap and boost economic growth, while critical for the
initial steps of the government's fiscal and economic plans, has
weakened Argentina's external indicators and highlights the need
for the development of a deeper domestic market.
S&P expects narrow net external debt to increase to 203% and 208%
of current account receipts in 2017 and 2018, respectively. At
the same time, S&P expects gross external financing needs to be at
an average of 111% of usable reserves and current account receipts
over the same period.
The current account deficit is likely to slightly increase to
almost 3% of GDP in 2017 from 2.8% in 2016. S&P expects current
account deficits to slightly deteriorate on the expectation of
increasing imports as the economy recovers, particularly as
investment requires high imports of capital goods, which would be
partially offset by gradual recovery of commodity prices, lower
dependence on oil imports, and trade partners' gradual recovery.
OUTLOOK
S&P's stable outlook incorporates its expectation for broad
continuity in overall policies in the next two years. It also
incorporates uncertainties on the pace of implementation of the
government's corrective economic plan given ongoing political
challenges. S&P also expects the government to gradually achieve
its fiscal and inflation targets.
Further implementation of policies that boost investor and
consumer sentiment, resulting in stronger and sustained economic
growth, together with gradual improvements in the overall
institutional framework, could lead to an upgrade. Likewise, a
more effective monetary policy that results in sustained lower
inflation, a reduction in external vulnerabilities, and a higher-
than-expected fiscal consolidation trajectory could improve
Argentina's currently weak financial profile, potentially leading
to a higher rating over the next two years.
On the other hand, failure to gradually reduce inflation toward
the central bank's target, unexpected lower economic growth,
deterioration in economic policy, and political instability could
erode investors and consumers' confidence and limit the
government's ability to implement its economic plan, which could
lead to a downgrade.
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 institutional and governance
effectiveness risk has improved, debt risk had improved, and
monetary risk has improved. All other 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
Upgraded; Ratings Affirmed
To From
Argentina (Republic of)
Sovereign Credit Rating B/Stable/B B-/Stable/B
Upgraded
To From
Argentina (Republic of)
Sovereign Credit Rating
Argentina National Scale raA+/Stable/-- raBBB/Stable/--
Transfer & Convertibility Assessment B+ B-
Senior Unsecured B B-
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 institutional and governance
effectiveness risk has improved, debt risk had improved, and
monetary risk has improved. All other 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
Upgraded; Ratings Affirmed
To From
Argentina (Republic of)
Sovereign Credit Rating B/Stable/B B-/Stable/B
Upgraded
To From
Argentina (Republic of)
Sovereign Credit Rating
Argentina National Scale raA+/Stable/-- raBBB/Stable/--
Transfer & Convertibility Assessment B+ B-
Senior Unsecured B B-
ARAUCO ARGENTINA: S&P Hikes Foreign Currency Rating to 'B'
-----------------------------------------------------------
S&P Global Ratings raised its local and foreign currency ratings
on the following companies and utilities to 'B'. The outlook on
these ratings is stable:
-- AES Argentina Generacion S.A;
-- Pampa Energia S.A.; and
-- Transportadora de Gas del Sur S.A. (TGS).
S&P also raised its foreign currency rating on Arauco Argentina
S.A. to 'B' from 'B-' and affirmed S&P's local 'B' local currency
rating. S&P also raised its local and foreign currency rating on
Aeropuertos Argentina 2000 S.A. (AA2000) to 'B+' from 'B-'.
Finally, S&P affirmed its 'B-' ratings on CAPEX S.A.
The rating actions follow the sovereign's upgrade to 'B' from 'B-'
and the revision of S&P's T&C assessment on Argentina to 'B+' from
'B-'.
The rating action on the sovereign reflects the advances it made
in overall economic policy aimed at resolving large economic
imbalances while restoring the country's policy credibility. The
government has made progress in improving external liquidity and
access to commercial funding. Initial steps to resolve the
country's large economic imbalances and microeconomic distortions
are helping to slowly restore economic stability. At the same
time, policy predictability has improved, and institutions are
strengthening. S&P believes that the government will continue to
face political and social challenges to implement its economic
plan. Addressing difficult policy trade-offs will require
skillful management.
S&P raised the local currency ratings on three Argentine
companies, reflecting lower risks of government actions
exacerbating operating conditions for these entities. However, at
this point, their individual credit profiles wouldn't allow them
to have a higher rating than the sovereign's local currency
rating.
S&P raised the foreign currency ratings on these entities and on
Arauco Argentina because the lower risk of the government's
intervention in the foreign currency exchange market has reduced
the risk of these entities not meeting their foreign-currency
denominated obligations, according to original terms and
conditions. This in turn lowers the risk of local currency
creditors accelerating their lending due to the entities'
inability to meet their commitments. S&P continues to believe
that the T&C assessment is the key risk for entities operating in
the country because none of them would be able to continue
honoring their foreign currency obligations under potential
restrictions to access to foreign currency and/or restrictions on
the ability to transfer money abroad.
At this point, the upgrade of these entities reflects the benefits
of the sovereign's healthier credit quality. In upcoming weeks,
S&P will also review the business conditions in Argentina and the
country risk to determine to what extent the sovereign's better
credit prospects influence the country risk these entities are
facing.
The upgrade of AA 2000 reflects S&P's view of its strong
resilience under a hypothetical sovereign default scenario. S&P
envisions that AA2000's very robust cash flow generation would
still allow the company to service its debt on a timely basis
under a stressed macroeconomic scenario such as a hike in
inflation, a depreciation of the local currency, and a decline in
the GDP, all of which would reduce the passenger volume.
The ratings affirmation on CAPEX reflects the maturity
concentration in the short term because in March 2018 its $200
million bond will come due. However, the positive outlook
reflects the possible one-notch upgrade if CAPEX successfully
refinances its maturities during 2017.
"Our ratings on Compania Latinoamericana de Infraestructura y
Servicios-CLISA, Compania General de Combustibles, Compania de
Transporte de Energia Electrica en Alta Tension TRANSENER S.A.,
Empresa Distribuidora y Comercializadora Norte S.A., and Metrogas
S.A. are not immediately affected by the actions on Argentina,
because the ratings on the latter don't constrain those on the
entities, and ratings still reflect the companies' own credit
strengths and weaknesses. We will continue to assess in the short
term if potentially better conditions for doing business in
Argentina could strengthen the business risk profile assessments
on these companies, and therefore result in their upgrades. We
also expect to review in the next few weeks our ratings on IRSA
Inversiones y Representaciones S. A. and its subsidiary, IRSA
Propiedades Comerciales S.A., in light of the group's increased
consolidated leverage and large assets in Israel," S&P said.
Despite the positive rating actions, S&P's credit perception of
risks remains high for these entities. Furthermore, S&P believes
sustainable growth for the domestic corporate sector depends on
greater regulatory certainty and improving business climate for
long-term investment. The upgrade potential for Argentine
companies remains limited due to the still volatile institutional
environment in the country and the exposure of certain companies
and sectors to specific factors such as regulatory uncertainty,
discretional political interference, high inflation, and debt-
revenue currency mismatch. All of these factors affect, in
varying degrees, both the local and foreign currency ratings on
Argentine companies. In addition, the ratings on regulated
companies are heavily influenced by S&P's view of regulatory risk.
Most of the concession contracts of rated utilities are still
pending a full renegotiation, which is a major credit concern, in
S&P's view.
BANCO DE LA PROVINCIA: S&P Raises ICR to 'B'; Outlook Stable
------------------------------------------------------------
S&P Global Ratings raised its foreign and local currency issuer
credit ratings on Banco de la Provincia de Buenos Aires (Bapro) to
'B' from 'B-'. The outlook remains stable.
The upgrade of Bapro reflects the upgrade of the Buenos Aires
province. The latter reflects Buenos Aires' improved
creditworthiness, mainly resulting from the strengthening of the
institutional framework in which it operates, amid an economic
recovery. According to S&P's criteria, the local currency ratings
on the province could be above the sovereign ratings if there's a
measurable likelihood that any of the credit characteristics on
the province will remain stronger than those of the sovereign in a
scenario of economic or political stress. However, S&P don't
consider that's the case for the province of Buenos Aires. This
is mostly due to existing weaknesses in the institutional
framework in which the province operates, as well as its
insufficient liquidity to cover all debt obligations. S&P's
liquidity assessment on the Buenos Aires incorporates the debt
market volatility and the province's cross-default clauses and.
S&P consequently limit its local and foreign currency ratings at
the Argentina's local currency rating level.
S&P maintains its BICRA on Argentina at group '9', which anchors
banks operating in Argentina at 'b+'. Cambodia, Vietnam, and
Kenya are Argentina's BICRA peers. S&P's bank criteria use its
BICRA economic risk and industry risk scores to determine a bank's
anchor, the starting point in assigning an issuer credit rating.
S&P believes that the economic risks for banks operating in
Argentina are high. In 2016, the administration has been able to
emerge from the selective default on the sovereign debt, and has
implemented several adjustments to tackle distortions in the
economy, such as the removal of exchange rate restrictions and
reductions in subsidies. These adjustments, in conjunction with
low commodity prices and external shocks, mainly the recession in
Brazil (Argentina's major trade partner) have resulted in a GDP
contraction of 2.3% in 2016. Also, inflation peaked at about 40%
year on year, given the pass-through from the exchange rate
depreciation early in 2016 and the increases in tariffs. In
addition, the release of foreign currency restrictions and the tax
amnesty have increased lending and deposits in foreign currency.
Over the short term, S&P don't expect the increase in exposure to
raise credit risk in the economy, given that such lending is
primarily for foreign-currency revenue generators. Now that the
government has implemented many of major adjustments, S&P expects
economic growth to resume with GDP rising by about 3% in 2017 and
2018 based on higher public-works spending, renewed investment in
agriculture and energy sectors, and stronger exports amid healthy
prospects for the harvest this year. In addition, inflation is
likely to decline to about 20% this year. However, political
challenges remain, given that the administration lacks majority in
either chamber of Congress. Despite having the ability to pass
important laws in 2016, midterm Congressional elections in October
2017 make it hard for the Macri administration to get support from
other political parties for its main policy initiatives.
Industry risks for banks operating in Argentina are also high, in
S&P's view. Although the current administration has removed many
of the restrictions that the former government imposed, the
banking industry continues to be exposed to significant market
distortions, including high inflation and a lack of diversified
and long-term funding. The rising independence of the central
bank is bolstering its authority and capacity to effectively
address potential problems in the banking sector. In this sense,
the central bank has removed caps on interest rates, minimum rates
on time deposits, limits on foreign exchange operations, and
authorizations for fee increases, all of which the former
government introduced. However, quotas on certain types of
lending still remain in place, which hamper banks' profitability
and capital cushioning. S&P also believes that historically weak
retail depositor confidence increases industry risk. Furthermore,
in our opinion, the country has a narrow capital market and,
despite certain improvement, still limited access to foreign
capital markets, resulting in a narrow range of funding sources
for banks.
BANCO HIPOTECARIO: S&P Raises Issuer Credit Rating to 'B'
---------------------------------------------------------
S&P Global Ratings raised its foreign and local currency issuer
credit ratings on Banco Hipotecario S.A., Banco Patagonia S.A.,
and Banco Galicia to 'B' from 'B-'. The outlook on these ratings
remains stable. At the same time, S&P raised its short-term
issuer credit rating on Banco Patagonia to 'B' from 'C'.
Additionally, S&P has raised its senior unsecured debt ratings on
Banco Galicia and Banco Hipotecario to 'B' from 'B-'. Also, S&P
has affirmed its 'CCC' subordinated debt rating on Banco Galicia.
The upgrade of Banco Hipotecario, Banco Patagonia, and Banco
Galicia mirror the rating action on the sovereign, which reflects
advances it had made in overall economic policy aimed at resolving
large economic imbalances while restoring the country's policy
credibility. The government has made progress in improving
external liquidity and access to commercial funding and was able
to issue external bonds for about $22 billion in 2016 and
$9 billion so far in 2017. Initial steps to resolve the country's
large economic imbalances and microeconomic distortions, such as
lowering inflation to an expected 20% in 2017 and 15% in 2018 and
adjusting public services tariff to underlying cost, are helping
to slowly restore economic stability. At the same time, policy
predictability has improved, and institutions are strengthening--
for example, the government's announcement of medium-term fiscal
targets has increased transparency and accountability. The
central bank is also moving toward gaining some independence by
reducing central government financing and moving toward an
inflation target regime. At the same time, the government has
overhauled the national statistical agency, INDEC, allowing
publication of reliable data on key economic variables.
S&P maintains its BICRA on Argentina at group '9', which anchors
banks operating in Argentina at 'b+'. Cambodia, Vietnam, and
Kenya are Argentina's BICRA peers. S&P's bank criteria uses its
BICRA economic risk and industry risk scores to determine a bank's
anchor, the starting point in assigning an issuer credit rating.
"We believe that the economic risks for banks operating in
Argentina are high. In 2016, the administration has been able to
emerge from the selective default on its debt, and has implemented
several adjustments to tackle distortions in the economy, such as
the removal of exchange rate restrictions and reductions in
subsidies. These adjustments, in conjunction with low commodity
prices and external shocks, mainly the recession in Brazil
(Argentina's major trade partner) have resulted in a GDP
contraction of 2.3% in 2016. Also, inflation peaked at about 40%
year on year, given the pass-through from the exchange rate
depreciation early in 2016 and the increases in tariffs. In
addition, the release of foreign currency restrictions and the tax
amnesty have increased lending and deposits in foreign currency.
Over the short term, we are not seeing this increase in exposure
to raise credit risk in the economy given that such lending is
primarily for foreign currency revenue generators. Now that the
government has implemented many of major adjustments, we expect
economic growth to resume with GDP rising by about 3% in 2017 and
2018 based on higher public-works spending, renewed investment in
agriculture and energy sectors combined with a stronger external
sector amid healthy prospects for the harvest this year. In
addition, inflation is likely to decline to about 20%. However,
political challenges remain given that the administration lacks
majority in either chamber of Congress. Despite having the
ability to pass important laws in 2016, midterm Congressional
elections in October 2017 make it hard for the Macri
administration to get support from other political parties for its
main policy initiatives.
Industry risks for banks operating in Argentina are also high, in
S&P's view. Although the current administration has removed many
of the restrictions that the former government imposed, the
banking industry continues to be exposed to significant market
distortions, including high inflation and a lack of diversified
and long-term funding. The rising independence of the central
bank is bolstering its authority and capacity to effectively
address potential problems in the banking sector. In this sense,
the central bank has removed caps on interest rates, minimum rates
on time deposits, limits on foreign exchange operations, and
authorizations for fee increases, all of which the former
government introduced. However, quotas on certain types of lending
still remain in place, which hamper banks' profitability and
capital cushioning. S&P also believes that historically weak
retail depositor confidence increases industry risk. Furthermore,
in our opinion, the country has a narrow capital market and,
despite certain improvement, still limited access to foreign
capital markets, resulting in a lack of funding diversification
for banks.
* S&P Raises Ratings on Seven Argentinean Provinces to 'B'
----------------------------------------------------------
S&P Global Ratings raised its foreign and local currency global-
scale issuer credit ratings on the city of Buenos Aires and the
provinces of Cordoba, Buenos Aires, Mendoza, La Rioja, Entre Rios,
Salta to 'B' from 'B-'. The outlook on the seven LRGs remains
stable. S&P also raised its global-scale issue-level ratings on
the provinces of Neuquen and Salta to 'B' from 'B-'.
OUTLOOK
The stable outlook on the seven LRGs mirrors the stable outlook on
the sovereign's local currency rating. The outlook reflects S&P's
view of an increasing dialogue between the LRGs and the federal
government to address various fiscal and economic challenges that
are expected to remain in the short to medium term.
Downside scenario
S&P could downgrade the seven LRGs if Argentina's economic
performance deteriorates consistently over the next couple of
years, eroding LRGs' revenue base beyond S&P's current
expectations, and/or if LRGs' financial management weakens. Also,
their failure to refinance existing debt in foreign and local
currency as well as their unwillingness to service debt
obligations could prompt S&P to lower ratings within the next 12-
18 months. S&P could also lower its ratings on the LRGs if
Argentina's T&C assessment weakens or if S&P was to lower the
sovereign local or foreign currency ratings.
Upside scenario
Given that S&P don't believe Argentina's LRGs meet the conditions
to have higher ratings than the sovereign, S&P could only raise
its ratings on them if S&P was to raise the T&C, and local and
foreign currency ratings on the sovereign. Such an upgrade would
have to be accompanied by continued strengthening in Argentina's
institutional framework for LRGs or in their individual
creditworthiness. However, under S&P's base-case scenario, such
an improvement isn't likely within the next 12 months.
RATIONALE
The global-scale foreign and local currency ratings on the seven
LRGs primarily reflect their improved creditworthiness, mainly
resulting from the strengthening of the institutional framework in
which LRGs operate, amid an economic recovery.
According to S&P's criteria, the local currency ratings on
Argentinean LRGs could be above the sovereign ratings if there's a
measurable likelihood that any of the credit characteristics on
these entities will remain stronger than those of the sovereign in
a scenario of economic or political stress. However, S&P don't
consider that's the case. This is mostly due to existing
weaknesses in the institutional framework in which LRGs operate,
as well as their insufficient liquidity to cover all debt
obligations. S&P's liquidity assessments on these LRGs
incorporate their cross-default clauses and debt market
volatility. S&P consequently limit their local and foreign
currency ratings at the Argentina's local currency rating level.
The local currency rating on the city of Buenos Aires is one notch
below its 'b+' stand-alone credit profile (SACP). The SACPs of
the provinces of Buenos Aires, Cordoba, Mendoza, La Rioja, Entre
Rios, and Salta are 'b'. The SACP is not a rating but a means of
assessing the intrinsic creditworthiness of an LRG under the
assumption that there is no sovereign rating cap.
The SACP results from the combination of S&P's assessment of an
LRG's individual credit profile and the institutional framework.
S&P's assessment of the latter measures how the predictability,
reliability, and supportiveness of public finance systems and
legislative frameworks are likely to affect an LRG's ability to
service debt in the long term.
The president's agenda to address the fiscal obstacles for LRGs-
increasing funding for coparticipation transfers, pensions, and
infrastructure-faces political opposition. However, S&P believes
that the federal and subnational governments have maintained a
constructive dialogue, demonstrating political willingness to
address LRGs' long-term demands to ensure fiscal sustainability
over time.
All Argentinean LRGs still operate under a very volatile and
unbalanced institutional framework, in S&P's view. However, S&P
believes that there's a positive trend on the predictability of
the outcome of potential reforms and pace of implementation. S&P
expects moderate but not significant reforms of the distribution
of federal tax revenues to the LRGs. Also, in S&P's view, a more
consistent support from the federal government has allowed LRGs to
measure its short- and longer-term impact on their finances. S&P
considers as positive, the constructive dialogue between the
federal and subnational governments to solve the current
institutional, administrative, and budgetary challenges. As a
result, a stronger institutional framework could improve LRGs'
credit quality in the next few years.
Compared with those of its national peers, the city of Buenos
Aires' credit profile is likely to remain stronger in 2017 and
2018. The city has maintained unique fiscal strengths in the past
few years, and its GDP per capita is estimated at to be more than
2.5x than Argentina's. The city has consistently posted operating
surpluses above 5% of operating revenue, which it's likely to
maintain in 2017. Such a track record has allowed the city to
have higher capital expenditures (capex) than those of its
domestic peers. Also, a strong credit culture supports the city's
creditworthiness, in addition to the strong political ties between
the city and President Mauricio Macri's administration.
The provinces' fiscal performance has suffered in the past year as
a result of limited leeway to increase revenue amid recession.
Also, operating expenditures (mostly public-sector employee
salaries) have been squeezing budgets as result of still high
inflation. If salaries increases surpass the inflation rate, S&P
expects the LRGs' 2017 budgets to remain under pressure.
LRGs' liquidity has remained weak amid volatile capital markets,
which further inhibited their ability to balance their budgets
and/or refinance existing debt obligations. S&P believes that in
the short to medium term, LRGs must reorient their use of debt for
capex, while effectively controlling their operating spending.
Nevertheless, S&P believes that the national government's
commitment to discuss structural fiscal issues confronting LRGs,
support them to improve their fiscal performance over the next
several years, and increase transparency and accountability
support the creditworthiness of the LRG sector in Argentina.
Additionally, S&P raised its foreign currency debt ratings to 'B'
on:
-- The province of Salta's secured amortizing notes for
$185 million, backed by oil and gas royalties, due 2022; and
-- The province of Neuquen's secured amortizing notes for an
outstanding amount of $41 million as of Jan. 26, 2017,
backed by oil royalties, due 2021.
These future flow transactions, in S&P's view, continue reflecting
the provinces' ability and willingness to secure mechanisms for
the repayment of these notes.
RATINGS LIST
Upgraded
To From
Buenos Aires (City of)
Issuer Credit Rating B/Stable/-- B-/Stable/--
Senior Unsecured B B-
Buenos Aires (Province of)
Issuer Credit Rating B/Stable/-- B-/Stable/--
Senior Unsecured B B-
Cordoba (Province of)
Issuer Credit Rating B/Stable/-- B-/Stable/--
Senior Unsecured B B-
Mendoza (Province of)
Issuer Credit Rating B/Stable/-- B-/Stable/--
Senior Unsecured B B-
La Rioja (Province of)
Issuer Credit Rating B/Stable/-- B-/Stable/--
Senior Unsecured B B-
Entre Rios (Province of)
Issuer Credit Rating B/Stable/-- B-/Stable/--
Senior Unsecured B B-
Salta (Province of)
Issuer Credit Rating B/Stable/-- B-/Stable/--
Senior Unsecured B B-
Senior Secured B B-
Neuquen (Province of)
Senior Secured B B-
=============
B E R M U D A
=============
SEADRILL: Warns of 'Likely' Bankruptcy Filing in U.S. or U.K.
--------------------------------------------------------------
Patrick Fitzgerald at The Wall Street Journal reports that
Offshore drilling services company Seadrill Ltd. said it is
planning a comprehensive debt restructuring that will likely
include a bankruptcy filing in the U.S. or the U.K.
"We expect the implementation of a comprehensive restructuring
plan will likely involve schemes of arrangement or chapter 11
proceedings, and we are preparing accordingly," the Bermuda-based
company said in statement obtained by the news agency.
A scheme of arrangement is a U.K. court-supervised debt-
restructuring process akin to a chapter 11 reorganization in the
U.S, according to The WSJ.
The publicly traded Seadrill is controlled by shipping magnate
John Fredriksen, the report notes. It has been in talks with
bondholders and lenders over restructuring more than $10 billion
in debt, the report relates.
Seadrill also said it reached a deal with its banks to extend
several key dates tied to its restructuring, the report says.
Those extensions include pushing out the deadline to implement a
restructuring plan to July 31 from the end of this month as well
as extending the maturity dates until August and September on
$2.85 billion in loans, says the report.
The company, which operates a fleet of 68 rigs and drillships,
said any restructuring plan will require a "substantial impairment
or conversion" of its bonds, as well as "impairment, losses or
substantial dilution" for other stakeholders, the report relays.
"As a result, the company currently expects that shareholders are
likely to receive minimal recovery for their existing shares," the
statement said, notes the report.
A spokesman for Seadrill, which is run from London, wasn't
immediately available for comment, says WSJ.
With crude prices hovering around $50 a barrel, oil companies have
cut expenditures on drilling and this, coupled with a glut of
rigs, has put rig owners under severe pressure, the report notes.
Seadrill, which employed 5,271 at the end 2016-a reduction of more
than 1,700 from the previous year-said its business operations
remain unaffected by the restructuring efforts, and the company
will continue to meet its ongoing customer and business
obligations, the report adds.
SEADRILL: Bankruptcy Proceedings May Impact Investors
-----------------------------------------------------
Ole Petter Skonnord and Terje Solsvik at Reuters report that
drill rig operator Seadrill warned investors that its shares will
lose almost all of their value and its bonds will be hit as the
Norwegian company prepares for potential bankruptcy proceedings
to restructure US$14 billion in debt and liabilities.
Shares in Seadrill, once the crown jewel in shipping tycoon John
Fredriksen's empire, fell as much as 46% on April 4 to a record
low, Reuters relates. The company has been hit by low oil
prices, which have forced oil companies to cut costs, hammering
rig rates, Reuters discloses.
Seadrill, which first warned in February that Chapter 11
bankruptcy protection was a risk, said in a statement that its
banks and other lenders had agreed to extend restructuring talks
by three months to July 31, Reuters relays.
In February, finance sources, as cited by Reuters, said
Mr. Fredriksen, who owns almost a quarter of Seadrill, might put
in more of his own money if other investors followed suit.
Mr. Fredriksen has put up money in the past when a restructuring
of his other businesses was required, Reuters states. But
Seadrill's statement on April 4 dampened these prospects and
pushed the company's shares down sharply, Reuters recounts.
The company is negotiating with more than 40 banks, including
Norway's DNB, Sweden's Nordea and Denmark's Danske Bank, as well
as with bondholders and several rig-building yards, Reuters
discloses.
According to Reuters, Seadrill said extending the deadline of the
talks would allow additional time to negotiate with banks as well
as potential new investors, but the outlook was grim for
shareholders.
"We currently believe that a comprehensive restructuring plan
will require a substantial impairment or conversion of our bonds,
as well as impairment, losses or substantial dilution for other
stakeholders," Reuters quotes Seadrill as saying. "As a result,
the company currently expects that shareholders are likely to
receive minimal recovery for their existing shares . . . We expect
the implementation of a comprehensive restructuring plan will
likely involve schemes of arrangement or Chapter 11 proceedings".
Headquartered in London, Seadrill is an offshore drilling
contractor. It operates from six regional offices around the
world -- Oslo, Dubai, Houston, Singapore, Rio De Janeiro and
Ciudad del Carmen.
==========================
C A Y M A N I S L A N D S
==========================
AHORA SI: Shareholders' Final Meeting Set for April 20
------------------------------------------------------
The shareholders of Ahora SI will hold their final meeting on
April 20, 2017, at 11:00 a.m., to receive the liquidator's report
on the company's wind-up proceedings and property disposal.
The company's liquidator is:
Maricorp Services Ltd.
c/o Roger L Nelson
31 The Strand
P.O. Box 2075 Grand Cayman KY1-1105
Cayman Islands
Telephone: (345) 949 9710
AMIJ INVESTMENT: Members' Final Meeting Set for April 14
--------------------------------------------------------
The members of Amij Investment Company will hold their final
meeting on April 14, 2017, to receive the liquidator's report on
the company's wind-up proceedings and property disposal.
The company's liquidator is:
CDL Company Ltd.
P.O. Box 31106 Grand Cayman KY1-1205
Cayman Islands
ASHMORE TRADING: Shareholders Receive Wind-Up Report
----------------------------------------------------
The shareholders of Ashmore Trading Corp. received on April 3,
2017, the liquidator's report on the company's wind-up proceedings
and property disposal.
The company's liquidator is:
Ashmore Trading Corp.
Jose A. Toniolo
307 Fair Banks Road
Apt. 50 George Town
Grand Cayman
Cayman Islands
BEI KAI CAPITAL: Shareholders Receive Wind-Up Report
----------------------------------------------------
The shareholders of Bei Kai Capital Partners Limited received on
April 5, 2017, the liquidator's report on the company's wind-up
proceedings and property disposal.
The company's liquidator is:
Frances Holliday
Kazimir Partners (UK) Limited
2 Eaton Gate
London SW1W 9BJ
BLAZE CORPORATION: Shareholders' Final Meeting Set for April 10
---------------------------------------------------------------
The shareholders of Blaze Corporation will hold their final
meeting on April 10, 2017, at 9:00 a.m., to receive the
liquidator's report on the company's wind-up proceedings and
property disposal.
The company's liquidator is:
Matthew Wright
c/o Omar Grant
Windward 1, Regatta Office Park
P. O. Box 897 Grand Cayman KY1-1103
Cayman Islands
Telephone: (345) 949-7576
Facsimile: (345) 949-8295
CLAIRSVILLE ENTERPRISES: Shareholders Receive Wind-Up Report
------------------------------------------------------------
The shareholders of Clairsville Enterprises Inc. received on
April 3, 2017, the liquidator's report on the company's wind-up
proceedings and property disposal.
The company's liquidator is:
Clairsville Enterprises Inc.
c/o Jose A. Toniolo
307 Fair Banks Road
Apt. 50 George Town
Grand Cayman
Cayman Islands
CVI GVF 26: Commences Liquidation Proceedings
---------------------------------------------
The sole shareholder of CVI GVF Holdings 26 Ltd., on Feb. 24,
2017, passed a resolution to liquidate the company's business.
Creditors are required to file their proofs of debt to be included
in the company's dividend distribution.
The company's liquidator is:
Andrew Morrison
c/o Kelsey Hedgecock
FTI Consulting (Cayman) Ltd.
Suite 3212, 53 Market Street
Camana Bay
P.O. Box 30613 Grand Cayman KY1-1203
Cayman Islands
Telephone: +1 (345) 743 6830
CVI GVF 28: Commences Liquidation Proceedings
---------------------------------------------
The sole shareholder of CVI GVF Holdings 28 Ltd., on Feb. 24,
2017, passed a resolution to liquidate the company's business.
Creditors are required to file their proofs of debt to be included
in the company's dividend distribution.
The company's liquidator is:
Andrew Morrison
c/o Kelsey Hedgecock
FTI Consulting (Cayman) Ltd.
Suite 3212, 53 Market Street
Camana Bay
P.O. Box 30613 Grand Cayman KY1-1203
Cayman Islands
Telephone: +1 (345) 743 6830
DGAM NG: Commences Liquidation Proceedings
------------------------------------------
The sole shareholder of DGAM NG Unique Strategies Fund, on
Feb. 24, 2017, passed a resolution to liquidate the company's
business.
Creditors are required to file their proofs of debt to be included
in the company's dividend distribution.
The company's liquidator is:
Andrew Morrison
c/o Kelsey Hedgecock
FTI Consulting (Cayman) Ltd.
Suite 3212, 53 Market Street
Camana Bay
P.O. Box 30613 Grand Cayman KY1-1203
Cayman Islands
Telephone: +1 (345) 743 6830
DGAM OPPORTUNITIES FUND: Commences Liquidation Proceedings
----------------------------------------------------------
The sole shareholder of DGAM Opportunities Fund, on Feb. 24, 2017,
passed a resolution to liquidate the company's business.
Creditors are required to file their proofs of debt to be included
in the company's dividend distribution.
The company's liquidator is:
Andrew Morrison
c/o Kelsey Hedgecock
FTI Consulting (Cayman) Ltd.
Suite 3212, 53 Market Street
Camana Bay
P.O. Box 30613 Grand Cayman KY1-1203
Cayman Islands
Telephone: +1 (345) 743 6830
DGAM SM: Commences Liquidation Proceedings
------------------------------------------
The sole shareholder of DGAM SM Global Alpha I Fund, on Feb. 21,
2017, passed a resolution to liquidate the company's business.
Creditors are required to file their proofs of debt to be included
in the company's dividend distribution.
The company's liquidator is:
David Griffin
c/o Kelsey Hedgecock
FTI Consulting (Cayman) Ltd.
Suite 3212, 53 Market Street
Camana Bay
P.O. Box 30613 Grand Cayman KY1-1203
Cayman Islands
Telephone: +1 (345) 743 6830
DGAM UNIQUE FUND: Commences Liquidation Proceedings
---------------------------------------------------
The sole shareholder of DGAM Unique Strategies Fund, on Feb. 21,
2017, passed a resolution to liquidate the company's business.
Creditors are required to file their proofs of debt to be included
in the company's dividend distribution.
The company's liquidator is:
David Griffin
c/o Kelsey Hedgecock
FTI Consulting (Cayman) Ltd.
Suite 3212, 53 Market Street
Camana Bay
P.O. Box 30613 Grand Cayman KY1-1203
Cayman Islands
Telephone: +1 (345) 743 6830
DGAM UNIQUE MASTER: Commences Liquidation Proceedings
-----------------------------------------------------
The sole shareholder of DGAM Unique Strategies Master Fund, on
Feb. 21, 2017, passed a resolution to liquidate the company's
business.
Creditors are required to file their proofs of debt to be included
in the company's dividend distribution.
The company's liquidator is:
David Griffin
c/o Kelsey Hedgecock
FTI Consulting (Cayman) Ltd.
Suite 3212, 53 Market Street
Camana Bay
P.O. Box 30613 Grand Cayman KY1-1203
Cayman Islands
Telephone: +1 (345) 743 6830
DGAM UNIQUE SPV: Commences Liquidation Proceedings
--------------------------------------------------
The sole shareholder of DGAM Unique SPV, on Feb. 21, 2017, passed
a resolution to liquidate the company's business.
Creditors are required to file their proofs of debt to be included
in the company's dividend distribution.
The company's liquidator is:
David Griffin
c/o Kelsey Hedgecock
FTI Consulting (Cayman) Ltd.
Suite 3212, 53 Market Street
Camana Bay
P.O. Box 30613 Grand Cayman KY1-1203
Cayman Islands
Telephone: +1 (345) 743 6830
DR II HOLDINGS: Commences Liquidation Proceedings
-------------------------------------------------
The sole shareholder of DR II Holdings, on Feb. 24, 2017, passed a
resolution to liquidate the company's business.
Creditors are required to file their proofs of debt to be included
in the company's dividend distribution.
The company's liquidator is:
Andrew Morrison
c/o Kelsey Hedgecock
FTI Consulting (Cayman) Ltd.
Suite 3212, 53 Market Street
Camana Bay
P.O. Box 30613 Grand Cayman KY1-1203
Cayman Islands
Telephone: +1 (345) 743 6830
DUKES TRADING: Members' Final Meeting Set for April 11
------------------------------------------------------
The members of Dukes Trading will hold their final meeting on
April 11, 2017, 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:
Andre Kym
c/o Haussmann Revision AG
Seefeldstrasse 45
8034 Zurich
Switzerland
Telephone: +41 44 252 02 80
HUMBER RIVER: Commences Liquidation Proceedings
-----------------------------------------------
The sole shareholder of Humber River Fund, on Feb. 24, 2017,
passed a resolution to liquidate the company's business.
Creditors are required to file their proofs of debt to be included
in the company's dividend distribution.
The company's liquidator is:
Andrew Morrison
c/o Kelsey Hedgecock
FTI Consulting (Cayman) Ltd.
Suite 3212, 53 Market Street
Camana Bay
P.O. Box 30613 Grand Cayman KY1-1203
Cayman Islands
Telephone: +1 (345) 743 6830
KUDAYA INVESTMENTS: Shareholders Receive Wind-Up Report
-------------------------------------------------------
The shareholders of Kudaya Investments Limited received on
April 3, 2017, the liquidator's report on the company's wind-up
proceedings and property disposal.
The company's liquidator is:
Zedra Directors (Cayman) Limited
c/o Felisiana Ebanks
136 Shedden Road
One Capital Place, 3rd Floor
P.O. Box 487 George Town
Grand Cayman KY1-1106
Cayman Islands
Telephone: +1 (345) 914-5424
MCP MOJNA: Members' Final Meeting Set for April 18
--------------------------------------------------
The members of MCP MOJNA SPV Ltd. will hold their final meeting on
April 18, 2017, to receive the liquidator's report on the
company's wind-up proceedings and property disposal.
The company's liquidator is:
Bronwyn King
Harbour Place, 4th Floor
103 South Church Street
P.O. Box 10240 Grand Cayman KY1-1002
Cayman Islands
Telephone: (852) 3195 7243
Facsimile: (852) 3195 7210
ST. MALO: Shareholders Receive Wind-Up Report
---------------------------------------------
The shareholders of St. Malo Investments Limited received on
April 4, 2017, the liquidator's report on the company's wind-up
proceedings and property disposal.
The company's liquidator is:
H.T.M Services Ltd.
c/o Carey Olsen
Willow House Cricket Square
P.O. Box 10008 Grand Cayman KY1 - 1001
Cayman Islands
===================================
D O M I N I C A N R E P U B L I C
===================================
DOMINICAN REP: 46.1% of Spending Went to Pay Workers, Debt Service
------------------------------------------------------------------
Dominican Today reports that the payment of remunerations in
public service and interest of the debt accounted for 46.1% of
expenditure in the first two months.
According to the Budget Office, RD$20.35 billion (US$433.0
million) went to pay interest on the debt, both domestic and
foreign, or 21.1% of the total RD$96.5 billion expenditure for
January and February, the report notes.
Meanwhile, salaries and other stipends totaled RD$24.1 billion in
two months, or 25% of public spending, the report relays.
Current transfers accounted for another quarter of expenditures,
or RD$25.7 billion for that period, according to Dominican Today.
Outlet diariolibre.com reports that public expenditure (without
financial applications) for RD$96.5 billion in that period
exceeded RD$12.4 billion, which, without donations and financial
sources, was RD$84.1 billion, the report relays.
As reported in the Troubled Company Reporter-Latin America on
Nov. 22, 2016, Fitch Ratings has taken the following rating
actions on the Dominican Republic:
-- Long-Term Foreign Currency Issuer Default Rating (IDR)
upgraded to 'BB-' from 'B+'; assigned Stable Outlook;
-- Long-Term Local Currency IDR upgraded to 'BB-' from 'B+';
assigned Stable Outlook;
-- Senior unsecured Foreign and Local Currency bonds upgraded
to 'BB-' from 'B+';
-- Short-Term Foreign Currency IDR affirmed at 'B';
-- Short-Term Local Currency IDR affirmed at 'B'.
=============
J A M A I C A
=============
BANK OF NOVA SCOTIA JAMAICA: GTAWU Concerned on Redundancy Plans
----------------------------------------------------------------
RJR News reports that the Grenada Technical and Allied Workers
Union (GTAWU) has written to the management of Bank of Nova Scotia
Jamaica expressing concern about the plan to make more than 90
positions redundant.
The union represents Bank of Nova Scotia workers in Grenada.
The GTAWU said the decision to cut jobs and transfer the services
to Trinidad and Tobago is not justified especially with the bank
remaining profitable, according to RJR News.
It has called on the Bank of Nova Scotia Jamaica to consider the
impact the job cuts will have on workers and rescind its plan to
carry out the redundancy exercise, the report notes.
Meanwhile, talks will continue between the Bustamante Industrial
Trade Union and Bank of Nova Scotia Jamaica regarding the
redundancy exercise, the report relays.
===========
M E X I C O
===========
GRUPO SENDA: S&P Revises Outlook to Negative & Affirms 'B' CCR
--------------------------------------------------------------
S&P Global Ratings said that it revised its outlook on Grupo Senda
Autotransporte S.A. de C.V. to negative from stable. At the same
time, S&P affirmed its 'B' global-scale and 'mxBBB-/mxA-3'
national-scale corporate credit ratings and 'mxA-3' short-term
debt rating on the company.
The outlook revision reflects the possibility that Senda's
liquidity could weaken further in the next 12 months. Despite the
refinancing of short-term debt during the first months of 2017,
higher working capital requirements during 2016, arising mainly
from the expansion of Senda's personnel business segment, raised
the short-term debt. Therefore, the company increased the use of
revolving facilities, together with the issuance of short-term
notes and higher leasing maturities during most of 2016.
During the past few years, the company has been expanding its
personnel business segment, which serves industrial companies as
well as schools. From 2012 to 2016, the segment had posted a
compounded annual growth rate (CAGR) of about 10% and has
increased its contribution to total consolidated revenue and
EBITDA to about 30% and 39%, respectively, from about 22% and 25%.
As a result of the expansion of this business segment in Ciudad
Juarez in 2016, account receivables and tax receivables increased
significantly, putting pressure on working capital requirements.
S&P expects the company to reduce both during 2017 due to a
normalization of operations.
Senda is a provider of transportation services in Mexico, mainly
serving the northeastern and central regions of Mexico as well as
the southern region of the U.S. The company operates in a highly
competitive Mexican market. Senda's passenger business generates
about 66% and 57% of total revenue and EBITDA, respectively, in
2016. Furthermore, in S&P's view, the company's size is still
modest compared with those of its peers, which is tempered by the
company's strong market share.
S&P considers that the company will continue using its short-term
debt facilities to fund its operations in the next few years. S&P
expects the personnel business segment to keep expanding,
providing a more stable cash flow generation. In addition, S&P
expects working capital requirements to decrease during 2017
mainly, as the operations of the personnel business segment
stabilize.
S&P's base-case scenario assumes these:
-- Mexico's GDP growth of 1.8% in 2017 and 2.0% in 2018, though
soft, could contribute to a stable demand for bus
transportation services due to a cheaper form of
transportation than automobiles and airplanes.
-- S&P assumes a foreign exchange rate of MXN22 per $1 for 2017
and 2018. The peso's depreciation has a positive impact on
Senda because about 13% of its total revenue (about 20% of
passengers segment's revenue) are denominated in, or linked
to, the dollar.
-- Revenue growth of about 6% in 2017 and 5% in 2018, as a
result of stable demand in the personnel and passenger
business segments, as a result of increased contracts with
existing customers and an annual rise of about 4% in fares
per year.
-- EBITDA growth of about 13% and 5% in 2017 and 2018,
respectively, mainly from operating efficiencies, savings
resulting from a newer fleet, staff reductions, and cost-
cutting initiatives.
-- Capital expenditures of about MXN250 million in 2017 and
MXN280 million in 2018, with about 90% devoted to fleet
renewal. S&P considers that the new buses will contribute
to EBITDA improvement given that they are more fuel
consumption efficient and require less maintenance.
-- No debt prepayments.
-- No dividend payments.
Based on these assumptions, S&P arrives at these credit measures
in 2017 and 2018:
-- Funds from operations (FFO) to debt in the 19%-24% range in
2017 and 2018;
-- FFO cash interest coverage in the 2.5x-3.0x range in 2017
and 2018; and
-- EBITDA margin of about 22%.
The negative outlook reflects the risks of weaker liquidity within
the next 12 months if the company is unable to refinance its
significant maturities during 2017 owing to higher use of short-
term debt during 2016 due to increasing working capital
requirements.
A downgrade is possible if the company's liquidity weakens in the
next 12 months, which could result from lower-than-expected FFO
generation, higher use of short-term debt, and/or S&P's view that
the company could face refinancing risks. A downgrade is also
possible if the company's FFO to debt is less than 12% and/or FFO
cash interest coverage below 2.0x on a sustained basis.
S&P could revise the outlook to stable if S&P perceives an
improvement in the company's liquidity, which could result from
higher-than-expected FFO generation, lower use of short-term debt,
and/or refinancing of short-term debt to long term.
======================
P U E R T O R I C O
======================
GOVERNMENT DEVELOPMENT BANK: Moody's Cuts Sr. Notes Rating to C
---------------------------------------------------------------
Moody's Investors Service has lowered the ratings on debt of the
Government Development Bank and five other Puerto Rico issuers,
with a total of approximately $13 billion outstanding. The
commonwealth's outlook, and the outlooks for seven affiliated
obligors linked to the central government, have been revised to
negative from developing.
The downgrades and outlook revisions reflect persistent pressures
on Puerto Rico's economic base that indicate a diminishing
perceived capacity to repay. While Moody's continues to believe
that essentially all of Puerto Rico's debt will be subject to
default and loss in a broad restructuring, the securities being
downgraded face more severe losses than Moody's had previously
expected, in the light of Puerto Rico's projected economic
pressures. For this reason, Moody's downgraded to C from Ca not
only the senior notes issued by the now defunct Government
Development Bank, but also bonds issued by the Puerto Rico
Infrastructure Financing Authority and backed by federal rum tax
transfer payments, the Convention Center District Authority's
hotel occupancy tax-backed bonds, the Employees Retirement
System's bonds backed by government pension contributions, and the
1998 Resolution bonds of the Puerto Rico Highways and
Transportation Authority. In addition, Moody's has lowered the
rating on the Puerto Rico Industrial Development Company's
commercial property rent-secured bonds to Ca from Caa3.
Moody's also have affirmed ratings on securities for which Moody's
believes ratings are still consistent with likely bondholder
recoveries: general obligation and guaranteed debt (Caa3); Sales
Tax Financing Corporation, or COFINA (Caa3 senior, Ca
subordinate); Puerto Rico Aqueduct and Sewer Authority (Caa3);
University of Puerto Rico (Ca) system and facilities bonds; the
Municipal Finance Agency (Ca); the 1968 Resolution bonds of the
Highways and Transportation Authority (Ca), and the Public Finance
Corporation (C).
A list of the Affected Ratings is available at:
http://bit.ly/2oLWMBX
Rating Outlook
The negative outlook is consistent with ongoing economic
pressures, which will weigh on the commonwealth's capacity to meet
debt and other funding obligations, potentially driving bondholder
recovery rates lower as debt restructuring efforts proceed.
Factors that Could Lead to an Upgrade
Any negotiated agreements or judicial actions that point to
stronger bondholder recoveries than indicated in current ratings
Increases in federal government assistance, under existing or new
programs, that would materially improve bondholder recovery
prospects
Factors that Could Lead to a Downgrade
Unilateral actions by the commonwealth's federal oversight board
or by a judicial authority that point to decreased bondholder
recoveries
Negotiated restructuring efforts that are likely to reduce
bondholder recoveries
Protracted legal confrontations during which payment of debt
service is suspended
Legal Security
Various, including the commonwealth's general obligation and
pledges of specific taxes and other revenue sources.
Use of Proceeds
Not applicable
Obligor Profile
Puerto Rico is a self-governing territory of the United States. It
operates under a constitution approved in 1952. The island's
population, now 3.41 million, has been declining as Puerto Ricans
in increasing numbers have moved to the mainland US in search of
work. The nature of Puerto Rico's relationship with the US -
whether to retain its current status as a commonwealth or to
become a state - is a central political issue on the island. The
two dominant Puerto Rican political parties are defined by their
views on statehood: the Partido Nuevo Progresista (PNP) advocates
statehood, while the Partido Popular Democratico is in favor of
continued commonwealth status. A smaller, third party favors
independence. Moody's ratings do not contemplate a change in the
island's relationship with the US.
Methodology
The principal methodology used in rating the Commonwealth of
Puerto Rico, Puerto Rico Municipal Finance Agency, Puerto Rico
Highways & Transportation Authority, Puerto Rico Aqueduct and
Sewer Authority, Government Development Bank for Puerto Rico,
Puerto Rico Industrial Development Company, and Puerto Rico Public
Sales Tax Financing Corp. debt was US States Rating Methodology
published in April 2013. An additional methodology used in rating
the Commonwealth of Puerto Rico's Series 98A, Series 2001 E, 2002
Series A, 2003 Series A,B and C, Series 2004A and B, 2011 Series
A, 2011 Series B and 2012 Series A was Lease, Appropriation, Moral
Obligation and Comparable Debt of US State and Local Governments
published in July 2016. The principal methodology used in the
University of Puerto Rico rating was Global Higher Education
published in November 2015.
LIBERTY CABLEVISION: S&P Assigns 'B' Rating to $85MM 1st-Lien Loan
------------------------------------------------------------------
S&P Global Ratings assigned its 'B' issue-level rating and '3'
recovery rating to Liberty Cablevision of Puerto Rico LLC's
proposed $85 million first-lien term loan B-3 due 2022. At the
same time, S&P lowered its existing first-lien issue-level ratings
to 'B' from 'B+' and revised the recovery rating to '3' from '2'
due to lower recovery prospects for first-lien lenders stemming
from more first-lien claims at default. The company plans to use
the proceeds to repay $85 million in second-lien debt. The '3'
recovery ratings reflect S&P's expectation for meaningful (50%-
70%; rounded estimate: 60%) recovery in a simulated default
scenario. S&P's 'CCC+' issue-level rating and '6' recovery rating
on the second-lien debt (0%-10%; rounded estimate: 0%) are
unchanged as S&P expects the majority of enterprise value to be
consumed by the first-lien debt in a simulated default. S&P's 'B'
corporate credit rating and stable outlook also remain unchanged
as this is a leverage-neutral transaction.
RECOVERY ANALYSIS
Key Analytical Factors:
-- S&P's default scenario assumes heightened price competition
in both video and high-speed data services that results in
subscriber losses and decreased average revenue per user,
coupled with continued weakness in the Puerto Rican economy,
leading to a further acceleration in churn such that the
company is no longer able to meet its fixed charges. S&P
has valued the company on a going-concern basis using a 6x
multiple of S&P's projected emergence EBITDA. The 6x
valuation multiple is on the lower end of the typical 6x-7x
range S&P typically ascribes to incumbent cable operators,
due to challenging macroeconomic conditions and given the
company is not the dominant video provider for Puerto Rico.
-- Other default assumptions include: the revolver is 85%
drawn, LIBOR rises to 2.5%, the spread on the first-lien
credit facility rises to 5% and the spread on the second
lien rises to 8% as credit deterioration requires
amendments, and all debt includes six months of pre-petition
interest.
Simulated Default Assumptions:
-- Simulated year of default: 2020
-- EBITDA at emergence: $101 million
-- EBITDA multiple: 6x
Simplified Waterfall:
-- Net enterprise value (after 5% administrative costs):
$575 million
-- Collateral value available to secured creditors: $575
million
-- Secured first-lien debt: $917 million
-- Recovery expectations: 50%-70%; rounded estimate: 60%
-- Secured second-lien debt: $97 million
-- Recovery expectations: 0%-10%; rounded estimate: 0%
RATINGS LIST
Liberty Cablevision of Puerto Rico LLC
Corporate Credit Rating B/Stable/--
New Rating
Liberty Cablevision of Puerto Rico LLC
$85 mil. first-lien term loan B-3 due 2022
Senior Secured B
Recovery Rating 3 (60%)
Downgraded; Recovery Rating Revised
Liberty Cablevision of Puerto Rico LLC
To From
Senior Secured First Lien B B-
Recovery Rating 3 (60%) 2 (70%)
***********
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
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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
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***********
S U B S C R I P T I O N I N F O R M A T I O N
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USA, Marites O. Claro, Joy A. Agravante, Rousel Elaine T.
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Magdadaro, and Peter A. Chapman, Editors.
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