/raid1/www/Hosts/bankrupt/TCRLA_Public/170518.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
Thursday, May 18, 2017, Vol. 18, No. 97
Headlines
A R G E N T I N A
BANCO FINANSUR: Moody's Cuts LT Deposit Ratings to Caa3
B O L I V I A
BANCO FIE: Moody's Withdraws B2 Global LT Sub. Debt Rating
BOLIVIA: To Pay $23MM to Abertis for 2013 Nationalization
FORTALEZA LEASING: Moody's Withdraws B2 Corporate Family Rating
B R A Z I L
PETROBRAS GLOBAL: Proposed Add-ons No Impact on Moody's B1 Ratings
PETROLEO BRASILEIRO: Fitch to Rate Proposed Notes Reopening 'BB'
C A Y M A N I S L A N D S
CAPFUL INVESTMENTS: Shareholders Receive Wind-Up Report
CMEH CORP: Shareholder to Hear Wind-Up Report on May 24
CONAIR INTERNATIONAL: Shareholder to Hear Wind-Up Report on May 24
CPC GHD: Shareholder to Hear Wind-Up Report on May 25
JAPY LIMITED: Shareholders Receive Wind-Up Report
JVK HOLDING: Shareholders' Final Meeting Set for May 22
L&M INDEMNITY: Shareholders' Final Meeting Set for May 23
MFA 90: Shareholder to Hear Wind-Up Report on May 29
RANESFIELD CORPORATION: Shareholders Receive Wind-Up Report
SAN VALLEY: Shareholders' Final Meeting Set for May 24
SMART PRINT: Shareholders Receive Wind-Up Report
P U E R T O R I C O
PUERTO RICO: Joint Admin. Bid Okayed; Creditors Open to Mediation
PUERTO RICO: Strikes Second Restructuring Deal with Bondholders
T R I N I D A D & T O B A G O
GUARDIAN MEDIA: Loses $509,000 in 1stQ of 2017
TRINIDAD CEMENT: S&P Affirms Then Withdraws 'B' CCR
V I R G I N I S L A N D S
VIRGIN ISLANDS: Public Utility to Test Bond Market
- - - - -
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A R G E N T I N A
=================
BANCO FINANSUR: Moody's Cuts LT Deposit Ratings to Caa3
-------------------------------------------------------
Moody's Latin America Agente de Calificacion de Riesgo (MLA) has
downgraded the long-term global scale local- and foreign-currency
deposit ratings and local-currency senior unsecured debt rating of
Banco Finansur S.A. (Finansur) to Caa3 from Caa1. At the same
time, the bank's long-term Argentinean national scale deposit and
senior unsecured debt ratings were downgraded to Caa3.ar from
Ba1.ar, its baseline credit assessment (BCA) and adjusted BCA were
downgraded to caa3 from caa1, and its long-term Counterparty Risk
Assessment (CRA) was downgraded to Caa2(cr) from B3(cr). The
bank's NP short-term deposit ratings and NP(cr) short term CRA
were affirmed. The bank has a negative outlook.
The following ratings were downgraded:
-- Long-term Global local-and foreign currency deposit rating: to
Caa3 from Caa1, with negative outlook;
-- Long-term Argentinean National Scale local and foreign
currency deposit rating: to Caa3.ar from Ba1.ar, with negative
outlook;
-- Senior Unsecured Global local-currency debt rating: to Caa3
from Caa1, with negative outlook;
-- Senior Unsecured Global local-currency MTN rating: to (P)Caa3
from (P)Caa1,
-- Senior Unsecured Argentinean National Scale local-currency
debt rating: to Caa3.ar from Ba1.ar, with negative outlook;
-- Senior Unsecured Argentinean National Scale local-currency MTN
rating: to Caa3.ar from Ba1.ar,
-- Baseline credit assessment: to caa3 from caa1;
-- Adjusted baseline credit assessment: to caa3 from caa1;
-- Long-term counterparty risk assessment: to Caa2(cr) from
B3(cr);
RATINGS RATIONALE
The downgrades reflect the significant contraction of the issuer's
balance sheet coupled with large net losses, sharp erosion of its
capital base, and rising delinquencies.
Over the period from December 2015 through March 2017, the bank's
balance sheet contracted by almost 48%, which led to an abrupt
drop in net revenues. The balance sheet contraction was prompted
by a sharp reduction in the wholesale funding on which the bank
remains heavily dependent. At the same time, operating expenses
continued to rise in line with inflation, in part driven by
restructuring costs related to new cost control measures
implemented by management. As a result, Finansur registered a net
loss equal to nearly 5% of tangible assets in 2016. Although the
bank was recapitalized in August 2016 and ended the year with
tangible common equity equal to an adequate 8.04% of adjusted
risk-weighted assets, further net losses in the first quarter of
2017 erased almost 60% of its capital.
Due to a continued increase in delinquencies coupled with the
contraction of the loan book, the bank's problem loan ratio more
than doubled to 5.73% as of year-end 2016 from a moderate 2.76% a
year earlier. At the same time, the ratio of loan loss reserves to
gross loans has contracted, indicating a need for increased
provisioning, which will put further pressure on the bank's
profitability.
Finansur is a domestic bank that targets to small and medium size
companies providing short term loans, largely secured by
receivables. A new president and management were appointed in
January 2017 to restructure the organization and refocus the
bank's business strategy. Given the challenges facing the bank,
however, Moody's believes it will likely take time for it to
generate profits in the coming quarters.
Finansur's negative outlook reflects Moody's expectation that the
capital base will continue to deteriorate barring another capital
injection from its shareholders or a sudden improvement in
profitability.
WHAT COULD CHANGE THE RATING -- DOWN/UP
The ratings could move further down if Finansur's continues
generating losses and the capital base erodes further, leading to
a rise in the expected loss on the bank's obligations. A sudden
deterioration of the bank's liquidity position could also put
downward pressure on the rating. Given the bank's current
financial situation, there is limited upside pressure for
Finansur's ratings. However, the outlook could stabilize if the
bank is able to arrest the contraction of its balance sheet and
erosion of its capital position.
The principal methodology used in these ratings was Banks
published in January 2016.
Moody's National Scale Credit Ratings (NSRs) are intended as
relative measures of creditworthiness among debt issues and
issuers within a country, enabling market participants to better
differentiate relative risks. NSRs differ from Moody's global
scale credit ratings in that they are not globally comparable with
the full universe of Moody's rated entities, but only with NSRs
for other rated debt issues and issuers within the same country.
NSRs are designated by a ".nn" country modifier signifying the
relevant country, as in ".za" for South Africa. For further
information on Moody's approach to national scale credit ratings,
please refer to Moody's Credit rating Methodology published in May
2016 entitled "Mapping National Scale Ratings from Global Scale
Ratings". While NSRs have no inherent absolute meaning in terms of
default risk or expected loss, a historical probability of default
consistent with a given NSR can be inferred from the GSR to which
it maps back at that particular point in time. For information on
the historical default rates associated with different global
scale rating categories over different investment horizons.
=============
B O L I V I A
=============
BANCO FIE: Moody's Withdraws B2 Global LT Sub. Debt Rating
-----------------------------------------------------------
Moody's Latin America Agente de Calificacion de Riesgo announced
that it has withdrawn the global and national scale long-term
local currency subordinated debt ratings assigned to Banco FIE
S.A. for business reasons. The senior debt and deposit ratings
assigned to the bank remained unchanged.
The following ratings of Banco FIE S.A. were withdrawn:
- Global long-term local currency subordinated debt rating,
previously rated B2
- Bolivian national scale long-term local currency subordinated
debt rating, previously rated Baa1.bo
RATINGS RATIONALE
Moody's has withdrawn the ratings for its own business reasons.
Please refer to the Moody's Investors Service's Policy for
Withdrawal of Credit Ratings, available on its website,
www.moodys.com.ar.
Moody's National Scale Credit Ratings (NSRs) are intended as
relative measures of creditworthiness among debt issues and
issuers within a country, enabling market participants to better
differentiate relative risks. NSRs differ from Moody's global
scale credit ratings in that they are not globally comparable with
the full universe of Moody's rated entities, but only with NSRs
for other rated debt issues and issuers within the same country.
NSRs are designated by a ".nn" country modifier signifying the
relevant country, as in ".za" for South Africa. For further
information on Moody's approach to national scale credit ratings,
please refer to Moody's Credit rating Methodology published in May
2016 entitled "Mapping National Scale Ratings from Global Scale
Ratings". While NSRs have no inherent absolute meaning in terms of
default risk or expected loss, a historical probability of default
consistent with a given NSR can be inferred from the GSR to which
it maps back at that particular point in time. For information on
the historical default rates associated with different global
scale rating categories over different investment horizons.
Banco FIE S.A. is headquartered in La Paz, Bolivia, and as of
March 2017 it had BOB11.1 billion ($1.6 billion) in assets and
BOB868.5 million ($125.7 million) in shareholders' equity.
BOLIVIA: To Pay $23MM to Abertis for 2013 Nationalization
---------------------------------------------------------
EFE News reports that Bolivia's government signed an agreement
with Spain's Abertis that provides for $23 million in compensation
for the 2013 nationalization of its Sabsa unit, which managed the
three main airports in the Andean nation.
"The Bolivian state has reduced the amount of the claim by some 74
percent. The state is not going to pay absolutely any interest,
it's not going to pay any kind of penalty and is going to fulfill
all its international obligations," Attorney General Pablo Menacho
told reporters, according to EFE News.
Public Works Minister Milton Claros and Menacho signed the
agreement during a ceremony at the airport in the central city of
Cochabamba attended by Spanish Ambassador to Bolivia Angel
Vazquez, the report relays.
The report recalls Abertis filed an arbitration claim against
Bolivia for $85.5 million, but negotiations between the parties
resulted in a compensation agreement for just 26 percent of the
total, Mr. Menacho said.
Abertis agreed to drop its arbitration claim and the government
retains "its proprietary right to Bolivian aviation and airport
assets," the AG said, the report says.
Abertis executives Josep Maria Coronas and Sergi Loughney attended
the ceremony, but they did not comment on the agreement, the
report notes.
President Evo Morales expropriated Sabsa, in which Abertis had a
90 percent stake and Aena held a 10 percent interest, four years
ago, the report discloses.
Sabsa operated the airports in La Paz, Cochabamba and Santa Cruz,
the three largest aviation facilities in Bolivia, the report adds.
FORTALEZA LEASING: Moody's Withdraws B2 Corporate Family Rating
---------------------------------------------------------------
Moody's Latin America Agente de Calificacion de Riesgo announced
that it has withdrawn all of its ratings for Fortaleza Leasing
S.A. for business reasons.
The following ratings of Fortaleza Leasing S.A. were withdrawn:
- Global Long-term corporate family ratings, previously rated B2
- Global long-term local and foreign currency senior unsecured MTN
rating, previously rated (P)B2
- Global other short-term local and foreign currency rating,
previously rated (P)NP
- Bolivian national scale other short-term local and foreign
currency rating, previously rated BO-2
- Bolivian national scale long-term local currency corporate
family ratings, previously rated A3.bo with stable outlook
- Bolivian national scale long-term local and foreign currency
senior unsecured MTN debt rating, previously rated A3.bo
- Promissory Notes, previously rated NP/BO-2
- Bolivian national scale stock rating, previously 2.bo
- Baseline credit assessment, previously rated b3
- Adjusted baseline credit assessment, previously rated b2
RATINGS RATIONALE
Moody's has withdrawn the ratings for its own business reasons.
Please refer to the Moody's Investors Service's Policy for
Withdrawal of Credit Ratings, available on its website,
www.moodys.com.ar.
Moody's National Scale Credit Ratings (NSRs) are intended as
relative measures of creditworthiness among debt issues and
issuers within a country, enabling market participants to better
differentiate relative risks. NSRs differ from Moody's global
scale credit ratings in that they are not globally comparable with
the full universe of Moody's rated entities, but only with NSRs
for other rated debt issues and issuers within the same country.
NSRs are designated by a ".nn" country modifier signifying the
relevant country, as in ".za" for South Africa. For further
information on Moody's approach to national scale credit ratings,
please refer to Moody's Credit rating Methodology published in May
2016 entitled "Mapping National Scale Ratings from Global Scale
Ratings". While NSRs have no inherent absolute meaning in terms of
default risk or expected loss, a historical probability of default
consistent with a given NSR can be inferred from the GSR to which
it maps back at that particular point in time. For information on
the historical default rates associated with different global
scale rating categories over different investment horizons.
Fortaleza Leasing S.A. is headquartered in La Paz, Bolivia, and as
of December 2016 it had Bs 111.8 million ($16.2 million) in assets
and Bs 13.4 million ($1.9 million) in shareholders' equity.
===========
B R A Z I L
===========
PETROBRAS GLOBAL: Proposed Add-ons No Impact on Moody's B1 Ratings
------------------------------------------------------------------
Moody's Investors Service says Petrobras Global Finance B.V.
reopening of the 6.125% global notes due 2022, the 7.375% global
notes due 2027, and the 7.250% global notes due 2044 has no effect
on the notes existing B1 ratings. The add-ons are to the existing
set of notes and no new assignment is being made. Petrobras Global
Finance B.V.'s add-ons will be unconditionally guaranteed by
Petroleo Brasileiro S.A. ("Petrobras", B1 positive) thus B1 rating
on the proposed notes is based on the rating of Petrobras. The
proposed notes are senior unsecured and pari passu with Petrobras
Global Finance B.V. and Petrobras' other senior foreign currency
debt. Proceeds from the proposed notes issuance will be used for
debt refinancing and other general corporate purposes. The outlook
on the ratings is positive.
RATINGS RATIONALE
Petrobras' b2 Baseline Credit Assessment ("BCA"), which indicates
Moody's view of the company's standalone credit strength,
considers its high financial leverage, low to negative free cash
flow, high refinancing risk, local currency volatility risk and
operating challenges in a difficult industry and economic
environment. In addition, free cash flow will remain under
pressure in the next couple of years due to low crude oil prices
and low fuel demand in Brazil, high competition and local currency
volatility, at the same time that the company's fuel pricing
strategy evolves. However, Moody's expects continued improvement
in the company's liquidity profile and financial metrics over the
next 12 months. Liquidity and financial metrics have improved over
the last few quarters as a result of lower capex in 2016 than
planned; gains from disciplined operating management and local
currency appreciation, which positively affected operating costs;
and the company's new fuel pricing policy, which increased
flexibility to sustain downstream margins and wholesale market
share. These factors have helped Petrobras maintain access to the
capital markets and refinance debt: so far in 2017 and before the
announced add-ons, the company has tendered approximately $6
billion in notes and issued $4 billion in new notes, which allowed
it to reduce debt and extend its debt maturity profile. The
regulatory environment has also improved in Brazil, supporting
better return on investment in the long term. Moody's recognizes
that Petrobras' management has shown commitment to its financial
and operating targets, as shown in recent debt refinancing
transactions, disciplined use of cash, increasing crude production
and declining costs.
Petrobras' b2 BCA and B1 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 9,672 Mboe
according to SEC criteria, its renown high technological offshore
expertise and potential for continued growth in production over
the long-term.
Petrobras' B1 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 incorporates one notch of uplift between
Petrobras' BCA and its senior unsecured rating given the company's
lower liquidity risk and thus lower need of support, which is
favorable in the context of government's persistently tight fiscal
position. Moody's continues to assume moderate default dependence
between Petrobras and the government.
Petrobras' liquidity risk is high but has declined in the last
quarters on the back of $13.6 billion in asset sales from 2015 to
date and around $6 billion in exchanged notes during the first
quarter 2017, which helped to extend the company's debt maturity
profile. However, refinancing risk remains high: as of March 2017,
Petrobras' maturing debt in the remainder of 2017 and 2018 was
$6.1 billion and $11.5 billion, respectively, for a total of
around $18 billion in 2017-18. 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' ratings have a positive outlook, reflecting Moody's
expectation that in the next 12-18 months, if the company's
liquidity and overall credit risk profile continue to improve,
further positive rating actions could occur.
Positive rating actions could be considered if the company raises
sufficient sums through asset sales to reduce debt and enters into
new debt arrangements to refinance upcoming maturities, therefore
significantly strengthening its liquidity profile while also
improving operating and financial performance. In addition, for a
rating upgrade to occur, Petrobras' leverage as adjusted by
Moody's should move sustainably closer to 4 times.
Negative actions on Petrobras' ratings could result from
deterioration in operating performance or external factors that
increase liquidity risk or debt leverage from current levels.
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.
Petrobras is an integrated energy company, with total assets of
$249 billion as of March 31, 2017. 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 45.3% of Petrobras' outstanding capital stock and 60.4%
of its voting shares.
PETROLEO BRASILEIRO: Fitch to Rate Proposed Notes Reopening 'BB'
----------------------------------------------------------------
Fitch Ratings expects to assign a 'BB(EXP)' rating to Petroleo
Brasileiro S.A.'s proposed USD4 billion to USD6 billion notes
reopening. The reopening is part of Petrobras Global Finance B.V.
(PGF) 2022 and 2027 notes and will be unconditionally and
irrevocably guaranteed by Petrobras. The company expects to use
the proceeds to refinance existing debt and for general corporate
purposes.
Linkage to the Sovereign
Petrobras' ratings continue to reflect its close linkage with the
sovereign rating of Brazil due to the government's control of the
company and its strategic importance to Brazil as its near-
monopoly supplier of liquid fuels. By law, the federal government
must hold at least a majority of Petrobras' voting stock. The
government currently owns 60.4% of Petrobras' voting rights,
directly and indirectly, and has an overall economic stake in the
company of 45.3%.
Supportive Government
Petrobras' credit quality has been indirectly supported by the
Brazilian government during times of distress by implementing
beneficial pricing policies, providing liquidity through
government-controlled financial institutions and changing
regulations that negatively affected Petrobras' cash flow.
Petrobras' stand-alone credit profile would be consistent with a
'BB-' rating without government support. In Fitch's view, the
recent move to a market-based pricing policy bodes well for the
company, as it adds transparency
Divestiture Program Key to Deleveraging
Asset divestitures are a key component of the company's
deleveraging plan. The company has targeted USD34.6 billion of
asset sales consisting of USD13.6 billion announced and/or
approved between 2015 and 2016 and another USD21 billion in
divestitures slated for 2017-2018. Fitch views the recent
injunctions suspending Petrobras' asset sales as a concerted
effort by opposing forces to derail the company's divestiture
program, which adds to the uncertainty of the plan's timing and
completion.
Difficult Deleveraging Targets
Fitch believes it is unlikely Petrobras will achieve its net
leverage target of 2.5x by 2018. The plan implies a reduction in
debt of approximately USD35 billion over the next two years,
assuming 2016 EBITDA and cash levels. Fitch's rating case for
Petrobras' assumes its leverage, as measured by net debt/EBITDA,
will be around 4.0x over the medium term and will decline to
approximately 3.0x, provided the company's total divestiture
program of USD34.6 billion is completed. As of March 31, 2017, the
company's gross leverage was 4.3x and its net leverage declined to
3.5x from 4.0x as of year-end 2016 as a result of increased EBITDA
and a marginal decrease in debt.
Marginal Production Growth
Fitch's rating case assumes Petrobras' gross production will
increase to approximately 3.3 million barrels of oil equivalent a
day (boed) by 2019. Production growth is expected to remain driven
by the company's development of its pre-salt assets and average
annual capex of USD14.9 billion. Approximately one third of
Petrobras' crude production in Brazil of 2.14 million barrels a
day (bbl/d) came from pre-salt formation during 2016. Petrobras
reported total average oil and gas production of 2.79 million boed
during 2016.
RATING SENSITIVITIES
A negative rating action on Petrobras could result from a
downgrade of the sovereign and/or the perception of a lower
linkage between Petrobras and the government.
Although not expected in the short- to medium-term, a positive
rating action on Brazil could lead to a positive rating action on
Petrobras.
LIQUIDITY
Petrobras' liquidity is adequate and provides some comfort in a
temporary scenario of deteriorating credit metrics, supported by
approximately USD20 billion of cash and marketable securities as
of March 31, 2017, compared with current debt maturities of
USD11.6 billion. A significant portion of Petrobras' available
liquidity is composed of readily available liquidity held abroad,
while USD3.4 billion was in domestic financial investments. Total
marketable securities of USD918 million was held in the domestic
financial market.
Petrobras demonstrates a solid ability to access the debt capital
markets to refinance debt. During 2016, long-term debt proceeds
amounted to USD18.9 billion including USD9.75 billion of notes
issued in international capital markets, with maturities of 5 and
10 years. The proceeds were partially used to amortize USD9.3
billion existing global notes early. Petrobras also entered into a
financing agreement with China Development Bank in the total
amount of USD5 billion. As of Dec. 31, 2016, the average maturity
of the outstanding debt was approximately 7.5 years and 20% of the
company's debt was in Brazilian Reais.
FULL LIST OF RATING ACTIONS
Fitch currently rates Petrobras as follows:
Petroleo Brasileiro S.A. (Petrobras)
-- Long-Term Foreign-Currency IDR 'BB'; Outlook Negative;
-- Long-Term Local-Currency IDR 'BB'; Outlook Negative;
-- National Scale rating 'AA+(bra)'; Outlook Negative;
-- National Scale Sr. Unsecured obligations 'AA+(bra)'.
Petrobras Global Finance B.V. (PGF)
-- International Sr. Unsecured debt issuances 'BB'.
==========================
C A Y M A N I S L A N D S
==========================
CAPFUL INVESTMENTS: Shareholders Receive Wind-Up Report
-------------------------------------------------------
The shareholders of Capful Investments received on May 17, 2017,
the liquidator's report on the company's wind-up proceedings and
property disposal.
Barry Mitchell is the company's liquidator.
CMEH CORP: Shareholder to Hear Wind-Up Report on May 24
-------------------------------------------------------
The shareholder of CMEH Corp. will hear on May 24, 2017, at
11:00 a.m., the liquidator's report on the company's wind-up
proceedings and property disposal.
CONAIR INTERNATIONAL: Shareholder to Hear Wind-Up Report on May 24
------------------------------------------------------------------
The shareholder of Conair International Holdings will hear on
May 24, 2017, at 11:00 a.m., the liquidator's report on the
company's wind-up proceedings and property disposal.
CPC GHD: Shareholder to Hear Wind-Up Report on May 25
-----------------------------------------------------
The shareholder of CPC GHD, Ltd will hear on May 25, 2017, at
11:00 a.m., the liquidator's report on the company's wind-up
proceedings and property disposal.
The company's liquidator is:
Michael T. Hearne
Harbour Place, 4th Floor
103 South Church Street
P.O. Box 10240 Grand Cayman KY1-1002
Cayman Islands
Telephone: (214) 999-1000
Facsimile: (214) 999-1022
JAPY LIMITED: Shareholders Receive Wind-Up Report
-------------------------------------------------
The shareholders of Japy Limited received on May 17, 2017, the
liquidator's report on the company's wind-up proceedings and
property disposal.
The company's liquidator is:
Tiago Citino De Arruda Botelho
Rua Belmonte
757 - Sao Paulo
SP CEP 05088 050
Brazil
JVK HOLDING: Shareholders' Final Meeting Set for May 22
-------------------------------------------------------
The shareholders of JVK Holding Ltd. will hold their final meeting
on May 22, 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:
Westport Services Ltd.
c/o Avril G. Brophy
P.O. Box 1111 Grand Cayman KY1-1102
Cayman Islands
Telephone: (345) 949 5122
Facsimile: (345) 949 7920
L&M INDEMNITY: Shareholders' Final Meeting Set for May 23
---------------------------------------------------------
The shareholders of L&M Indemnity Company, Ltd will hold their
final meeting on May 23, 2017, at 10:30 a.m., to receive the
liquidator's report on the company's wind-up proceedings and
property disposal.
The company's liquidator is:
Graham Robinson
c/o Tanya Armstrong
P.O. Box 2499 Grand Cayman KY1-1104
Cayman Islands
Telephone: (345) 946-0820
Facsimile: (345) 946-0864
MFA 90: Shareholder to Hear Wind-Up Report on May 29
----------------------------------------------------
The shareholder of MFA 90 Company Limited will hear on May 29,
2017, the liquidator's report on the company's wind-up proceedings
and property disposal.
The company's liquidator is:
Commerce Corporate Services Limited
P.O. Box 694 Grand Cayman
Cayman Islands
Telephone: 949 8666
Facsimile: 949 0626
RANESFIELD CORPORATION: Shareholders Receive Wind-Up Report
-----------------------------------------------------------
The shareholders of Ranesfield Corporation received on May 17,
2017, the liquidator's report on the company's wind-up proceedings
and property disposal.
The company's liquidator is:
Jose A. Toniolo
307 Fairbanks Road
Apt. 50, George Town
Grand Cayman
Cayman Islands
Telephone: (345) 916 2956
SAN VALLEY: Shareholders' Final Meeting Set for May 24
------------------------------------------------------
The shareholders of San Valley Biotechnology, Inc. will hold their
final meeting on May 24, 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
46 Canal Point Drive
P.O. Box 2075, #31 The Strand
Grand Cayman KY1-1105
Cayman Islands
Telephone: (345) 949-9710
SMART PRINT: Shareholders Receive Wind-Up Report
------------------------------------------------
The shareholders of Smart Print Ltd. received on May 11, 2017, the
liquidator's report on the company's wind-up proceedings and
property disposal.
The company's liquidator is:
Amicorp Cayman Fiduciary Limited
The Grand Pavilion Commercial Centre, 1st Floor
802 West Bay Road
P.O. Box 10655 Grand Cayman KY1-1006
Cayman Islands
c/o Nicole Ebanks-Sloley
Telephone: (345) 943-6055
======================
P U E R T O R I C O
======================
PUERTO RICO: Joint Admin. Bid Okayed; Creditors Open to Mediation
-----------------------------------------------------------------
Nick Brown at Reuters reports that U.S. District Court Judge Laura
Taylor Swain granted the motion filed by the Financial Oversight
and Management Board for Puerto Rico for, among other things, the
joint administration of the Title III cases under PROMESA for the
Puerto Rico Sales Tax Financing Corporation (COFINA) and the
Commonwealth of Puerto Rico, at a hearing held May 17, 2017,
before the U.S. District Court for the District of Puerto Rico.
The report says Puerto Rico's main creditors, meeting before the
U.S. bankruptcy judge in the largest public finance restructuring
case in history, are also interested in continuing mediation
settlement talks to resolve the island's unpayable $70 billion
debt bill.
The report relays that in the first hearing since the U.S.
commonwealth filed for bankruptcy on May 3, a lawyer for Puerto
Rico's federal financial oversight board told Judge Swain that the
two main creditor groups expressed interest in maintaining the
discussions while the case proceeds.
Judge Swain said the "scope and scale" of the case is "humbling"
and that it "will certainly involve pain" but that "failure is not
an option," Reuters notes. She added, before a packed courtroom
with an estimated 100 people and two additional overflow rooms,
that "devoting all our time to litigation cannot" be a way
forward.
According to the report, Wednesday's hearing marked the start of a
process that could take months or years. It is also a culmination
of more than two years of bitter debate between Puerto Rico's
government, its creditors and federal lawmakers over how the
island should rework its debt load that has crippled its economy.
Earlier this month, recalls Reuters, the U.S. territory's central
government entered a modified version of bankruptcy protection
created under a federal rescue law known as PROMESA as a way to
legally pave the way to cut its general obligation (GO) debt. The
island's sales tax authority, known as COFINA, followed suit days
later with its own filing under Title III of the PROMESA law,
which provides for the bankruptcy mechanism.
Martin Bienenstock, Esq., at Proskauer Rose LLP, said the board
plans to press holders of GO and COFINA to mediate, Reuters
relates. The amount of debt held, nearly equally between the two,
amounts to roughly $36 billion, or half of the total debt stock of
Puerto Rico.
Judge Swain ruled to combined the GO and COFINA Title III filings
for administrative purposes, notes the report.
Defaulted benchmark GO debt due 2035 did not trade on Wednesday
and were last quoted with a bid price of 60, according to Reuters.
Marcia Goldstein, Esq., at Weil, Gotshal & Manges, representing
MBIA's National Public Finance Guarantee unit, which insures
nearly $2 billion in combined GO and COFINA debt, criticized both
the government and oversight board for a lack of financial
information, the report says.
"There needs to be a serious openness about financial data. We are
very, very far from that," she told Judge Swain, Reuters relates.
Before adjourning, Judge Swain addressed that concern, asking for
a status report by mid-June on progress to give creditors better
access to financial information and any progress on restructuring
negotiations, the report notes.
Reuters says the dispute between the GO and COFINA camps is
central to working out a restructuring that allows Puerto Rico,
and its 3.5 million U.S. citizens, to rebuild an economy wracked
by a 45 percent poverty rate, 11 percent unemployment rate and
increasing emigration to the mainland United States. The U.S.
commonwealth also suffers from a near-insolvent public health
system, having spent the last 10 years in recession with debt
piling up to pay for basic services.
No Ruling on Bid for Banks to Honor Transfers/Deposits
Reuters says the May 17 hearing represented a shift in tone, as
creditor tough-talk during months of out-of-court bargaining gave
way to the more conciliatory decorum reserved for proceedings
before a judge. Still, as a parade of lawyers approached the
podium to make their cases, it was clear creditors are fighting
tooth and nail for their interests, says the report.
Issues that would be minor in most bankruptcies fetched many
objections, including the island's motion to combine the COFINA
and government bankruptcies, which Judge Swain granted.
"I admit it's the first time I've" objected to such a motion "in
my career," said Dennis Dunne, an attorney for Ambac Assurance
Corp, which insures COFINA debt, notes the report.
Reuters says COFINA creditors' hopes for repayment hinge on their
ability to establish COFINA as separate from the government, as GO
creditors argue COFINA revenues are government property reserved
for them.
The judge said she would not yet rule on an ongoing dispute over
Puerto Rico's motion to allow banks to continue effecting
transfers and deposits at the government's direction, notes the
report.
This issue, also normally ministerial, has COFINA creditors
worried the government would use such an order to direct banks to
claw back COFINA revenues to the general fund when they come due
on July 1, which is authorized under a recent Puerto Rico law, the
report relays.
The bankruptcy process will cover about half of Puerto Rico's
debt, though other local public agencies are restructuring out of
court, and some could enter bankruptcy later, notes Reuters.
Bienenstock added that other agencies, including the highway
authority PRHTA, will file for bankruptcy "soon," Reuters
relates.
Retirees, who belong to a system with roughly $50 billion in
underfunded pension liabilities, sent a lawyer to the hearing to
seek a seat at the negotiating table because of potential changes
to their benefits, the report adds. Robert Gordon, an attorney
for a group comprising 91,000 retirees, argued "they have earned
the right to participate in this process."
Ambac Opposes Joint Administration
Prior to the Court's ruling, Ambac Assurance Corporation, a holder
and/or insurer of $2.7 billion of bonds issued by the Commonwealth
of Puerto Rico, the Puerto Rico Sales Tax Financing Corporation,
and other Commonwealth instrumentalities filed an objection to the
motions filed by the Financial Oversight and Management Board for
Puerto Rico for, among other things, (i) the joint administration
of the Title III cases under PROMESA for the Puerto Rico Sales Tax
Financing Corporation (COFINA) and the Commonwealth of Puerto
Rico, and (ii) an order confirming authority of banks to continue
honoring instructions and payment instruments with respect to the
Debtors' bank accounts.
"If the Motions are granted, COFINA, a solvent entity with no
genuine need for restructuring, will potentially be reorganized
under the influence of parties whose interests are opposed to
those of COFINA and its creditors. And while COFINA would be the
first issuer subjected to this improper approach to Title III, it
would almost certainly not be the last," Dennis F. Dunne, Esq., at
Milbank, Tweed, Hadley & McCloy LLP, counsel to Ambac, said in a
court filing.
"The Motions thus present a unique opportunity, at the outset of
these historic bankruptcy cases, to restore respect for the
"relative lawful priorities [and] lawful liens . . . in the
constitution, other laws, or agreements" of the Commonwealth, as
intended by Congress in passing the Puerto Rico Oversight,
Management, and Economic Stability Act ("PROMESA"). 48 U.S.C. Sec.
2141(b)(1)(N)."
Not Ordinary Circumstances
Ambac acknowledges that in ordinary circumstances, the relief
requested in the Motions would be the type of housekeeping measure
that could hardly be claimed to pose a threat to the substantive
rights of affected creditors. But these are not ordinary
circumstances, according to Ambac.
Assuming that the Debtors' request for joint administration is
motivated by judicial and procedural efficiency objectives, Ambac
believes it nonetheless raises a number of substantive concerns,
including: (i) failure to abide by PROMESA's directive to maintain
separateness between various entities; (ii) creeping
consolidation; (iii) providing standing arguments to parties who
would not otherwise have standing; (iv) granting inappropriate
rights to a "yet-to-be-formed" official committee of unsecured
creditors; and (v) inoculating certain creditors against harm from
complying with unlawful directives of the Commonwealth.
"In 2006, in response to what was then an unprecedented fiscal
crisis, the Commonwealth created COFINA as a means of accessing
capital markets at affordable rates. The Commonwealth achieved
that goal by transferring legal ownership of a portion of certain
sales and use taxes ("SUT Revenues") to COFINA, protecting the SUT
Revenues from "clawback" by the Commonwealth for any purpose, and
granting COFINA's creditors unique structural protections not
offered to creditors of the Commonwealth or its other
instrumentalities. The market recognized these distinctions,
extending credit to COFINA at rates far lower than those
applicable to the Commonwealth's general obligation ("GO") debt,"
Mr. Dunne explains.
"As the Commonwealth's fiscal and economic difficulties have
intensified, however, the Commonwealth, and now the Oversight
Board, have turned their backs on the promises the Commonwealth
made to COFINA and its creditors. It has premised its 10-year
fiscal plan (the "Fiscal Plan," D.I. 1-3) on the assumption that
all debt owed and revenue earned by any Commonwealth
instrumentality belongs to the Commonwealth without regard to
property, contract, or constitutional law; it has advanced a
restructuring proposal based on the same unlawful conflation of
revenue streams and debt obligations; and it has passed
legislation, styled as a 'Fiscal Plan Compliance Law,' that routes
all monies generated by Commonwealth legislation, including those
belonging by statute to COFINA, through the Commonwealth's general
fund, apparently to be allocated at the discretion of Puerto
Rico's Secretary of the Treasury, in violation of Puerto Rico law
and PROMESA."
Ambac does not contest that joint administration of restructuring
proceedings can result in significant convenience and economies.
However, the Federal Rules of Bankruptcy Procedure are clear that
joint administration is inappropriate if it fails to protect
creditors from actual or potential conflicts of interest. The
conflicts here are substantial, according to Ambac.
"As an issuer of debt, the Commonwealth has interests that are
diametrically opposed to COFINA's. COFINA has dedicated property
to pay its obligations. If it is somehow deprived of that
property, it will lack the wherewithal to pay those obligations.
The Commonwealth appears to view COFINA's money as a means to
satisfy its own obligations, and is now implementing a Fiscal Plan
that not only envisions, but appears to require, the use of
COFINA's SUT Revenues for Commonwealth purposes, as confirmed in
subsequent restructuring proposals and legislation. COFINA is not
the Commonwealth's piggybank. The Commonwealth's GO bondholders
have pursued the same aim through litigation, both during and
after the PROMESA litigation stay, seeking the diversion of the
SUT Revenues to the Commonwealth for payment of GO debt."
Unsecured Creditors' Committee
According to Ambac, the Case Management Motion's contemplation of
the formation of an unsecured creditors' committee ("UCC") is a
case in point. COFINA's bonds were issued exclusively on a secured
basis. Thus, the formation of a UCC and the granting of notice
and procedural consent rights to such a committee, as contemplated
by the proposed "Case Management Procedures", would permit the
Commonwealth's unsecured creditors to exercise rights for which
they lack standing -- i.e., to vote on or consent to actions taken
in the COFINA proceedings. The Commonwealth UCC should have no
rights (or standing) in COFINA's Title III case by operation of a
case management order. However procedural in appearance, joint
administration should not be permitted to further this type of
creeping substantive consolidation, nor to create a presumption of
a plan of adjustment covering both entities.
Ambac explains the efficiencies adverted to in the Joint
Administration Motion do not compel a contrary result. As an
initial matter, while judicial efficiency is a worthy goal, it is
an inappropriate basis on which to ignore the substantial
conflicts of interest at issue here. In any event, joint
administration will actually disserve efficiency interests, as a
joint docket will likely cause confusion among the two creditor
bases, who will be forced to wade through a deluge of filings to
determine which concern them and which do not. Rejecting the Joint
Administration Motion will thus protect creditors while causing no
harm to judicial economy.
Finally, the Bank Release Motion is objectionable for the same
reason, according to Ambac.
"While administrative (and therefore seemingly harmless) in
nature, it seeks an order that would potentially shield unlawful
payments. The Commonwealth has already stated its intent to
allocate money in a manner that numerous creditors, including
Ambac, have alleged violate Puerto Rico and federal law, including
by requiring COFINA's money to be applied to general Commonwealth
purposes. The Bank Release Motion seeks an ex ante judicial
blessing that a bank's compliance with any such unlawful
directives is immune from liability. And the request is
unnecessary: by the Debtors' own admission, section 363 of the
Bankruptcy Code does not apply to these proceedings, and thus the
Commonwealth has no need to seek judicial authorization of this
sort. The Debtors' extraneous request for the Court's exculpation
of the Commonwealth's banks from all future liability, including
liability for any transfers that may constitute a clear breach of
law, contract, or property rights, should accordingly be
rejected."
A guiding principle of PROMESA is that each debtor stands on its
own for purposes of Title III proceedings. Ambac submits that the
Court should take this opportunity to reaffirm this important
statutory principle and recognize that these are separate cases
with significant actual conflicts of interest between the Debtors
and, more importantly, between their respective creditors. Ambac
says that to do otherwise would contravene the letter and spirit
of PROMESA, and could signal to creditors that the core principles
of separateness and respect for lawful priorities and liens that
guided Congress in crafting PROMESA may be undercut.
Ambac's Exposure
Ambac provides financial guaranty insurance covering approximately
$2.7 billion in net par accreted value of bonds issued by the
Commonwealth or its instrumentalities -- a figure that increases
to $9.7 billion in gross principal and interest at maturity.
Although Ambac's largest exposure relates to bonds issued by
COFINA, of which it insures approximately $1.3 billion in net par
accreted value, it also insures:
* $493 million in bonds issued by the Puerto Rico Highways and
Transportation Authority ("PRHTA");
* $564 million in bonds issued by the Puerto Rico
Infrastructure
Financing Authority ("PRIFA");
* $137 million in bonds issued by the Puerto Rico Convention
Center District Authority ("PRCCDA");
* $187 million in bonds directly issued or guaranteed by the
Commonwealth and backed by the full faith, credit, and taxing
power of theCommonwealth (known as general obligation ("GO") or
general obligation-guaranteed bonds, collectively, "GO Bonds").
The majority of these bonds are long-dated, and Ambac enjoys
significant voting and consent rights with respect to them. In
addition, Ambac directly owns approximately $268 million in bonds
issued by COFINA, PRHTA, PRIFA, and the Puerto Rico Public
Buildings Authority. Thus, Ambac not only has a unique
perspective on the financial difficulties facing Puerto Rico and a
deep investment in its long-term success, it is also a critical
participant in any solutions to the current fiscal situation.
Attorneys for Ambac Assurance Corporation:
Roberto Camara-Fuertes, Esq.
Sonia Colon, Esq.
FERRAIUOLI LLC
221 Ponce de Leon Avenue, 5th Floor
San Juan, PR 00917
Telephone: (787) 766-7000
Facsimile: (787) 766-7001
E-mail: rcamara@ferraiuoli.com
scolon@ferraiuoli.com
- and -
Dennis F. Dunne, Esq.
Andrew M. Leblanc, Esq.
Atara Miller, Esq.
Grant R. Mainland, Esq.
MILBANK, TWEED, HADLEY & McCLOY LLP
28 Liberty Street
New York, NY 10005
Telephone: (212) 530-5770
Facsimile: (212) 822-5770
E-mail: ddunne@milbank.com
aleblanc@milbank.com
amiller@milbank.com
gmainland@milbank.com
Aside from Ambac, other parties that have filed objections to the
motion for an order directing the joint administration, solely for
procedural purposes, of the title III cases of the Commonwealth
and COFINA are:
* The Puerto Rico Funds;
* Mutual Fund Group; and
* National Public Finance Guarantee Corporation
About Puerto Rico
Puerto Rico is a self-governing commonwealth in association with
the United States. The chief of state is the President of the
United States of America. The head of government is an elected
Governor. There are two legislative chambers: the House of
Representatives, 51 seats, and the Senate, 27 seats. The
governor-elect is Ricardo Antonio "Ricky" Rossello Nevares, the
son of former governor Pedro Rossello.
In 2016, the U.S. Congress passed PROMESA, which, among other
things, created the Financial Oversight and Management Board and
imposed an automatic stay on creditor lawsuits against the
government, which expired May 1, 2017.
The members of the oversight board are: (i) Andrew G. Biggs, (ii)
Jose B. Carrion III, (iii) Carlos M. Garcia, (iv) Arthur J.
Gonzalez, (v) Jose R. Gonzalez, (vi) Ana. J. Matosantos, and (vii)
David A. Skeel Jr.
On May 3, 2017, the Commonwealth of Puerto Rico filed a petition
for relief under Title III of the Puerto Rico Oversight,
Management, and Economic Stability Act ("PROMESA"). The case is
pending in the United States District Court for the District of
Puerto Rico under case number 17-cv-01578. A copy of Puerto
Rico's PROMESA petition is posted at
http://bankrupt.com/misc/17-01578-00001.pdf
The Oversight Board has hired as advisors, Proskauer Rose LLP and
O'Neill & Borges LLC as legal counsel, McKinsey & Co. as strategic
consultant, Citigroup Global Markets as municipal investment
banker, and Ernst & Young, as financial advisor.
Martin J. Bienenstock, Esq., Scott K. Rutsky, Esq., and Philip M.
Abelson, Esq., of Proskauer Rose LLP and Hermann D. Bauer, Esq.,
at O'Neill & Borges LLC are onboard as attorneys.
Prime Clerk LLC is the claims and noticing agent. Prime Clerk
maintains a case web site at:
https://cases.primeclerk.com/puertorico
Jones Day is serving as counsel to certain ERS bondholders.
Paul Weiss is counsel to the Ad Hoc Group of Puerto Rico General
Obligation Bondholders.
PUERTO RICO: Strikes Second Restructuring Deal with Bondholders
---------------------------------------------------------------
The American Bankruptcy Institute, citing Hazel Bradford of
Pensions & Investments, reported that Puerto Rico reached a
restructuring agreement with bondholders invested in the
commonwealth's Government Development Bank, officials announced
May 15 in San Juan.
Parties to the agreement include the Ad Hoc Group of Bondholders,
whose members are funds managed or advised by Avenue Capital
Management II, Brigade Capital Management, Fir Tree Partners and
Solus Alternative Asset Management, according to the report. The
group's financial adviser, Bradley Meyer of Ducera Partners in New
York, said in a statement that the agreement "is fair to all
parties," the report related.
Puerto Rico's Federal Affairs Administration said in that
statement that GDB creditors "have agreed to substantial discounts
to the principal," but did not provide further details on the
agreement, which calls for bondholders to exchange claims for one
of three tranches of bonds issued by a new municipal entity, the
report further related.
About Puerto Rico
Puerto Rico is a self-governing commonwealth in association with
the United States. The chief of state is the President of the
United States of America. The head of government is an elected
Governor. There are two legislative chambers: the House of
Representatives, 51 seats, and the Senate, 27 seats. The
governor-elect is Ricardo Antonio "Ricky" Rossello Nevares, the
son of former governor Pedro Rossello.
In 2016, the U.S. Congress passed PROMESA, which, among other
things, created the Financial Oversight and Management Board and
imposed an automatic stay on creditor lawsuits against the
government, which expired May 1, 2017.
The members of the oversight board are: (i) Andrew G. Biggs, (ii)
Jose B. Carrion III, (iii) Carlos M. Garcia, (iv) Arthur J.
Gonzalez, (v) Jose R. Gonzalez, (vi) Ana. J. Matosantos, and (vii)
David A. Skeel Jr.
On May 3, 2017, the Commonwealth of Puerto Rico filed a petition
for relief under Title III of the Puerto Rico Oversight,
Management, and Economic Stability Act ("PROMESA"). The case is
pending in the United States District Court for the District of
Puerto Rico under case number 17-cv-01578. A copy of Puerto
Rico's PROMESA petition is posted at
http://bankrupt.com/misc/17-01578-00001.pdf
The Oversight Board has hired as advisors, Proskauer Rose LLP and
O'Neill & Borges LLC as legal counsel, McKinsey & Co. as strategic
consultant, Citigroup Global Markets as municipal investment
banker, and Ernst & Young, as financial advisor.
Martin J. Bienenstock, Esq., Scott K. Rutsky, Esq., and Philip M.
Abelson, Esq., of Proskauer Rose LLP and Hermann D. Bauer, Esq.,
at O'Neill & Borges LLC are onboard as attorneys.
Prime Clerk LLC is the claims and noticing agent. Prime Clerk
maintains a case web site at:
https://cases.primeclerk.com/puertorico
Jones Day is serving as counsel to certain ERS bondholders.
Paul Weiss is counsel to the Ad Hoc Group of Puerto Rico General
Obligation Bondholders.
================================
T R I N I D A D & T O B A G O
================================
GUARDIAN MEDIA: Loses $509,000 in 1stQ of 2017
----------------------------------------------
Leah Sorias at Trinidad Express reports that faced with a net loss
of $509,000 for the first quarter of 2017, Guardian Media Limited
(GML) says it is placing major emphasis on cutting costs and
increasing revenue.
The Guardian newspaper and television station CNC3 are part of the
GML group.
In a statement attached to GML's unaudited financial results for
the quarter ended March 31, company chairman Teresa White stressed
that the cost reduction was "paramount" to ensuring that GML
"streamlines its operating costs," according to Trinidad Express.
White noted that significant costs have already been reduced or
removed but more was required "and they form part of our plans for
the year," the report notes.
She stated that equally important was the need to grow GML's
revenues, adding that this was an area of critical executive
focus, adds the report.
Ms. White said that despite strong results in February which was
fueled by Carnival activity, the advertising market continued to
mirror the country's sharp economic contraction seen in 2016, the
report recalls.
"We finished the first quarter of the year with a net loss before
taxation of $509,000, as high operating costs impacted the overall
results," the report quoted Ms. White as saying. "Although
disappointing, this quarter's results highlight that cost
reductions and productivity gains are paramount in ensuring that
Guardian Media Limited streamlines its operating costs."
Ms. White said the company remained confident that the
transformation plan that was started in 2016 and which is due to
be completed by the end of 2017, will both improve the quality of
GML's products and deliver efficiency gains, the report notes.
"At the same time, our strong balance sheet will allow us to
continue our investment plan to ensure the Company's long-term
success in the digital age," according to Ms. White, says Trinidad
Express.
According to the financial results, GML's revenue for the first
quarter of 2017 stood at $32.7 million, down from $37.6 million in
2016, the report notes.
Revenue for its print business (Guardian) was $16.7 million in the
first quarter of 2017 compared with $19.1 million in first quarter
2016 while revenue for its multi-media segment declined from $18.5
million in 2016 (first quarter) to $15.9 million in 2017, the
report adds.
TRINIDAD CEMENT: S&P Affirms Then Withdraws 'B' CCR
---------------------------------------------------
S&P Global Ratings affirmed its 'B' long-term corporate credit
rating on Trinidad & Tobago-based cement producer Trinidad Cement
Limited (TCL). S&P subsequently withdrew the rating at the
company's request. At the time of the withdrawal, the outlook was
stable. Following the announcement of the company's redemption of
its 2015 syndicated credit agreement in April 26, 2017, S&P no
longer rate any of TCL's debt.
TCL refinanced and redeemed its 2015 syndicated credit agreement
through a $100 million intercompany loan from CEMEX Espana, S.A.,
a TT$245 million loan,and $10 million of cash from its balance
sheet.
At the time of the withdrawal, TCL's operating and financial
performance was in line with S&P's expectations.
===========================
V I R G I N I S L A N D S
===========================
VIRGIN ISLANDS: Public Utility to Test Bond Market
--------------------------------------------------
Andrew Scurria at The Wall Street Journal reports that the U.S.
Virgin Islands' public utility is asking Wall Street to help
finance an upgrade of its energy infrastructure as unpaid bills
pile up and conflict with its regulator escalates.
The Virgin Islands Water & Power Authority, or WAPA, expects to
privately sell up to $85 million in debt by next month, according
to people familiar with the matter, WSJ notes. The sale, managed
by Atlanta-based broker-dealer IFS Securities Inc., is open to
select investors and won't carry a rating from the major credit
rating firms, these people said, according to WSJ.
A WAPA spokesman didn't return requests for comment. A
spokeswoman for WAPA's regulator, the Virgin Islands Public
Services Commission, also declined to comment.
A successful sale would signal that credit markets aren't closed
to WAPA despite dwindling cash balances, large capital needs and
rocky relations with its regulator, the report relays. Credit
ratings firms have hammered the utility with downgrades into junk
status over the past year, the report notes.
The Virgin Islands has never defaulted on its debt obligations,
but its financial standing is top-of-mind for investors in the
U.S. municipal bond market following the financial collapse of
Puerto Rico, a Caribbean neighbor 80 miles away, the report says.
The U.S. territories share common fiscal problems including high
debt levels, mounting pension costs, outdated infrastructures and
shrinking tax bases, the report discloses.
Those troubles extend to WAPA, the power monopoly serving the
Virgin Islands' roughly 105,000 inhabitants, the report relays.
The PSC has refused since January to approve a requested rate
increase, prompting a public war of words with WAPA, and with cash
flows under pressure the utility is behind on its supplier bills,
the report notes. The utility relies on the PSC to approve
customer rates that cover the cost of generating and distributing
power.
WAPA was forced over the weekend to switch to burning oil at its
generation plants after Vitol Group suspended shipments of
liquefied petroleum gas, their usual fuel source, the report
discloses. After the announcement, the PSC said WAPA had failed
to explain why the invoices had gone unpaid when the rates charged
to customers should cover the cost of fuel deliveries, the report
relays.
"Those costs are not surprises, and are included in WAPA's rates,
but not being paid," the regulator said, notes the report.
Oil supplier Glencore Ltd. also cut off shipments temporarily in
January, according to the PSC. Trafigura Trading LLC, another
vendor, recently won a $24 million court judgment against WAPA
over unpaid bills, the report discloses.
Proceeds from WAPA's planned bond sale would cover costs
associated with the conversion of its generating units to
liquefied propane, a cleaner-burning fuel than oil, according to
the Journal. Yields on the proposed sale have risen during the
marketing process to placate prospective investors, and terms may
change further before the deal is completed, a person familiar
with the matter said, the report notes.
WAPA owes $253 million in bond debt, according to its financial
disclosures, WSJ relays.
Twice in the past six months, the Virgin Islands has tried and
failed to sell debt amid fears it could wind up under a
restructuring proceeding similar to what Congress designed for
Puerto Rico, the report recalls. A federal rescue law passed last
year allows Puerto Rico to restructure its debts outside the U.S.
bankruptcy system, which the U.S. territories can't access, notes
the Journal.
"It certainly casts a heavy shadow on our approach to the market,"
said Valdamier Collens, commissioner of the Virgin Islands
Department of Finance, notes the report. "We're very aware of the
contagion effects."
Like Puerto Rico, the Virgin Islands isn't funded on an equal
basis with U.S. states in federal health-care, highway and tax
programs, Mr. Collens said, the report notes. A five-year plan
adopted by the Virgin Islands in December calls for raising
property tax levies, timeshare fees and "sin taxes" on cigarettes
and alcohol while improving revenue collection and cracking down
on past-due taxes.
WSJ says the Virgin Islands has relied increasingly on bond
proceeds to pay operating costs while contributing less to pension
plans, the report notes. That borrowing has increased its debt to
a level similar to that of Puerto Rico, on a per capita basis.
***********
Monday's edition of the TCR-LA delivers a list of indicative
prices for bond issues that reportedly trade well below par.
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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
Troubled Company Reporter-Latin America is a daily newsletter
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