/raid1/www/Hosts/bankrupt/TCRLA

/raid1/www/Hosts/bankrupt/TCRLA_Public/161201.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, December 1, 2016, Vol. 17, No. 238 Headlines A N T I G U A & B A R B U D A STANFORD INT'L: US Supreme Ct. Denies Owner's Certiorari Petition B R A Z I L BRAZIL: Economy Shrinks Again in Third Quarter CENTRAIS ELETRICAS: Fitch Affirms 'BB-' LT Issuer Default Ratings C A Y M A N I S L A N D S BALI ANCHOR: Placed Under Voluntary Wind-Up BEST ACTION: Creditors' Proofs of Debt Due Dec. 12 BLUECREST SPECIAL: Creditors' Proofs of Debt Due Dec. 21 BLUECREST STRATEGIC: Creditors' Proofs of Debt Due Dec. 21 CSI MANAGEMENT: Commences Liquidation Proceedings DACAPA INVESTMENT: Creditors' Proofs of Debt Due Dec. 21 DYNAMI SPV III: Creditors' Proofs of Debt Due Dec. 21 EMPIRE CAPITAL: Commences Liquidation Proceedings GABOR LTD: Placed Under Voluntary Wind-Up GATEWAY CHINA: Creditors' Proofs of Debt Due Dec. 12 GREEN MOUNT: Creditors' Proofs of Debt Due Dec. 12 MILLA INVESTMENT: Placed Under Voluntary Wind-Up RISING STATE: Creditors' Proofs of Debt Due Dec. 12 D O M I N I C A N R E P U B L I C DOMINICAN REPUBLIC: Approves US$18.2B for 2017 Budget & Debt DOMINICAN REPUBLIC: Border Market Slumps on Haiti's Woes M E X I C O GRUPO POSADAS: S&P Affirms 'B+' CCR & Revises Outlook to Stable P U E R T O R I C O GUSTAVO ARANGO: Unsecureds to Recover 12% Under Plan PUERTO RICO: Top Creditors Flex Muscles in Bond Fight WS STORES CORP: Unsecureds to Recoup 100% in Monthly Installments - - - - - =============================== A N T I G U A & B A R B U D A =============================== STANFORD INT'L: US Supreme Ct. Denies Owner's Certiorari Petition ----------------------------------------------------------------- Kenneth Rijock at Caribbean News Now reports that the United States Supreme Court denied the petition for a writ of certiorari filed by Allen Stanford, whose prior District Court conviction and sentence was affirmed by the Fifth Circuit. Mr. Stanford's best opportunity to revisit his criminal case has failed; any post-conviction relief that he seeks in the future is entirely discretionary with the District Court, and generally has a poor chance of success, according to Caribbean News Now. The report notes that Mr. Stanford's presumptive release date is April 17, 2105, meaning that he will spend the rest of his life in custody; this may not satisfy his many victims, but it does more or less close the chapter on his criminal prosecution. His Antigua and Barbuda-based Stanford International Bank left victims strewn all over the Western Hemisphere, and the Ponzi scheme Stanford operated cost many Americans their life savings, the report notes. A sentence, such as the one in this case, which exceeds the life expectancy of a major Ponzi schemer, though stiff, could serve to deter future potential Ponzis from engaging in this type of criminal conduct, the report adds. About Stanford Group The Stanford Financial Group was a privately held international group of financial services companies controlled by Allen Stanford, until it was seized by United States (U.S.) authorities in early 2009. Domiciled in Antigua, Stanford International Bank Limited -- http://www.stanfordinternationalbank.com/-- is a member of Stanford Private Wealth Management, a global financial services network with US$51 billion in deposits and assets under management or advisement. Stanford Private Wealth Management served more than 70,000 clients in 140 countries. On Feb. 16, 2009, the United States District Court for the Northern District of Texas, Dallas Division, signed an order appointing Ralph Janvey as receiver for all the assets and records of Stanford International Bank, Ltd., Stanford Group Company, Stanford Capital Management, LLC, Robert Allen Stanford, James M. Davis and Laura Pendergest-Holt and of all entities they own or control. The February 16 order, as amended March 12, 2009, directs the Receiver to, among other things, take control and possession of and to operate the Receivership Estate, and to perform all acts necessary to conserve, hold, manage and preserve the value of the Receivership Estate. The case in district court was Securities and Exchange Commission v. Securities Investor Protection Corp., 11-mc-00678, U.S. District Court, District of Columbia (Washington). The U.S. Securities and Exchange Commission charged before the U.S. District Court in Dallas, Texas, Mr. Stanford and three of his companies for orchestrating a fraudulent, multi-billion dollar investment scheme centering on an US$8 billion Certificate of Deposit program. A criminal case was pursued against him before the U.S. District Court in Houston, Texas. Mr. Stanford pleaded not guilty to 21 charges of multi-billion dollar fraud, money-laundering and obstruction of justice. Assistant Attorney General Lanny Breuer, as cited by Agence France-Presse News, said in a 57-page indictment that Mr. Stanford could face up to 250 years in prison if convicted on all charges. Mr. Stanford surrendered to U.S. authorities after a warrant was issued for his arrest on the criminal charges. =========== B R A Z I L =========== BRAZIL: Economy Shrinks Again in Third Quarter ---------------------------------------------- Rogerio Jelmayer and Jeffrey T. Lewis at The Wall Street Journal report that Brazil's prolonged economic recession deepened in the third quarter amid political turmoil that has discouraged heavily indebted companies from investing and damped consumer spending, while hope for glimmers of a recovery failed to appear. Gross domestic product shrank 0.8% from the second quarter, marking the seventh consecutive quarter of contraction, the Brazilian Institute of Geography & Statistics said, according to The Wall Street Journal. That was slightly better than expectations of a 0.9% decline in the third quarter from the second, according to a Wall Street Journal survey of 10 economists, the report notes. The report relays that the economy shrank a revised 0.4% in the second quarter from the first after contracting 0.5% in the first quarter. The dismal numbers have already led some economists to cut their growth forecasts for next year. Capital Economics' Neil Shearing said he now expects an expansion of 1% in 2017, down from 1.5% before the report was released, says the report. Brazil's Congress removed President Dilma Rousseff from office at the end of August, and she was replaced by her former Vice President, Michel Temer. Many analysts had hoped that Ms. Rousseff's long-expected ouster, on charges of fudging budget numbers, would clear up political uncertainty, increase confidence and encourage companies to boost spending on new projects, the report notes. But the new chief executive's government has been plagued by ministers resigning amid allegations of corruption and Mr. Temer pushing reform measures that, though popular with investors, are opposed by large portions of the population, the report discloses. Brazil's mammoth Operation Car Wash anticorruption investigation continues to claim new victims among the country's political elite, and more plea bargains deals are expected, "and that freaks executives out, they don't know what's coming next," said Newton Rosa, chief economist of Sao Paulo-based investment firm Sulamerica Investimentos, the report relays. Company debt levels are also so high that many "don't have the money for new investments," Mr. Rosa said, the report notes. Investment spending, a key barometer of business confidence, shrank 3.1% in the third quarter from the second and fell 8.4% versus the same period a year earlier, the IBGE said, the report relays. Brazil's biggest steelmaker, Gerdau SA, posted a steep decline in profit in the third quarter and said it would cut investment this year by 35% then trim more in 2017, the report discloses. The company expects "a challenging market scenario (in coming months), with a gradual and slow recovery in economic activity," Gerdau CEO Andre Gerdau Johannpeter said during the company's earnings conference call earlier this month, the report relays. Brazil's big, and growing, budget deficit and national debt are more concerns holding investors back, the report notes. President Temer, whose approval ratings are in the midteens, is trying to push a constitutional amendment through Congress that will limit government spending increases to the previous year's inflation rate, the report relays. The measure has been approved by the lower house and awaits a final vote in the Senate before being sent to the president to be signed into law, notes WSJ. Markets have been encouraged by the bill's steady movement toward approval, but expectations of a rapid recovery after Mr. Temer's move to the presidential palace were unfounded, said Jason Vieira, chief economist at Infinity Asset in Sao Paulo, the report says. "There was a lot of optimism about a recovery, but it wasn't based on the reality in the country," he added, notes the report. That reality includes high, and rising, unemployment along with high, though slowing, and inflation, the report notes. Both have discouraged consumer spending, which represents almost two-thirds of GDP. Consumer spending fell 0.6% from the second quarter and 3.4% from the year-ago period, the report discloses. One bright spot in the picture is that the Central Bank of Brazil began a rate-cutting cycle in October, trimming its benchmark lending rate to 14% from 14.25%, where it had been since July of last year, the report relays. The bank will announce its latest rate decision, says the Journal. Expectations are for another quarter-point cut, though concerns about Mr. Temer's political problems and uncertainty about the U.S. Federal Reserve's next move following the unexpected election victory of Donald Trump led many analysts to trim their forecasts from a half point, the report adds. As reported in the Troubled Company Reporter-Latin America on Nov. 15, 2016, Fitch Ratings has affirmed Brazil's Long-Term Foreign and Local Currency Issuer Default Ratings (IDRs) at 'BB'/ Negative Outlook. Brazil's senior unsecured Foreign- and Local- Currency bonds are also affirmed at 'BB'. The Country Ceiling is affirmed at 'BB+' and the Short-Term Foreign and Local-Currency IDRs at 'B'. CENTRAIS ELETRICAS: Fitch Affirms 'BB-' LT Issuer Default Ratings ----------------------------------------------------------------- Fitch Ratings has affirmed the Foreign and Local Currency Long- Term Issuer Default Ratings (IDRs) of Centrais Eletricas Brasileiras S.A. (Eletrobras) and its wholly owned subsidiary, Furnas Centrais Eletricas S.A. (Furnas) at 'BB-'. The Rating Outlook for both IDRs has been revised to Stable from Negative. Fitch has also affirmed the companies' Long-Term National Scale Ratings at 'AA-(bra)' with a Stable Outlook. KEY RATING DRIVERS The Outlook revision for the IDRs reflects the Federal Republic of Brazil's ('BB', Outlook Negative) increasing support to the Eletrobras group through capital injections of approximately BRL3 billion during 2016 and guarantees for loans reaching 30% of the debt. Fitch also expects the group's new management to implement measures to gradually improve its consolidated cash flow from operations. Eletrobras' IDRs consider its strategic importance to the country because of its prominent position within the Brazilian power sector due to its significant market share in generation and transmission. The sovereign holds 51% of company voting shares. On a standalone basis, Eletrobras' IDRs would be lower, due to its still weak consolidated operational cash generation, high capital expenditures program, and deteriorated credit metrics for the current rating category. The decision to accept the early renewal of all of its generation and transmission power concessions expiring between 2015 and 2017 severely affected Eletrobras' consolidated credit profile. Positively, the group has been successful in reducing operational costs, while additional compensation for the renewed transmission concessions at BRL28 billion will be added to its cash flow generation after July 2017. Eletrobras' financial profile benefits from a strong liquidity position and an extended debt maturity profile. Eletrobras is exposed to political interference risks given its status as an entity controlled by the Brazilian government, despite of the positive initiatives from the new management. Current and future governments can use the company to help it achieve certain macroeconomic and social objectives through price controls and/or subsidies. Regulatory risk for the power sector is considered moderate in Brazil, while the hydrological risk is inherent to the sector. Furnas' ratings are linked with its parent company (Eletrobras). Furnas is one of Eletrobras' largest subsidiaries, representing approximately 24% of the group's installed generation capacity and 31% of its transmission coverage in kilometers. Eletrobras has a centralized cash management policy and is the primary funding provider for Furnas. Eletrobras sets the company's strategic targets, such as corporate governance standards and investment plans. INCREASING FEDERAL GOVERNMENT SUPPORT Fitch believes Brazilian government's increasing support to Eletrobras is positive and should help the company to achieve the operational turn around needed to bring the group's credit metrics to more adequate levels in the medium term. Government has appointed market professionals and sector experts to Eletrobras' Board and Management teams followed by the development of a new Strategic Plan for 2017-2021. National Treasury has increased its participation as guarantor in loans (30% of total debt) and injected around BRL 3 billion of cash at Eletrobras' holding company to be converted into capital in the near future. CASH GENERATION TO IMPROVE Eletrobras' consolidated EBITDA generation should achieve an annual average of BRL2.7 billion in the period of 2017-2019, according to Fitch projections. Eletrobras' weak operational cash generation reflects the highly negative impact of its decision to accept the early renewal of all of its generation and transmission power concessions in 2013. As Fitch expected, in the LTM ended on Sept. 30, 2016 EBITDA was positively impacted by the booking of additional revenues referring to the compensation values for the transmission assets existing before 2000 for the concessions that were early renewed in 2013. EBITDA for the period reached BRL17.6 billion in comparison with a negative BRL6 billion in 2015. If the impact of compensation revenues was not factored in, the EBITDA would be negative. LOWER CAPEX NEEDED Eletrobras' consolidated free cash flow (FCF) generation is expected to remain negative, even though capex and investment have been revised and reduced as part of a new business strategy. Fitch views as positive that the company's subsidiaries did not participate in the recent transmission and generation bids promoted by the government. Eletrobras' Strategic Plan for 2017- 2021 considers BRL35.8 billion of capex and capital injection in subsidiaries. Expansion plans pose a challenge and will need to be funded through new debt and cash generation. Fitch expects Eletrobras to resume paying dividends in 2017. The company's consolidated cash flow from operations (CFFO) of BRL5.3 billion during the LTM ended on Sept. 30, 2016 was sufficient to cover capex of BRL1.9 billion and dividends of BRL5 million, leading to a FCF of BRL3.5 billion. MANAGEABLE DEBT MATURITY PROFILE Eletrobras' consolidated risk profile benefits from an extended debt maturity schedule. Total adjusted debt, excluding the Reserva Global de Reversao (RGR), was BRL40 billion in September 2016 and includes 38% of loans coming from federal banks, which may give some financial flexibility. The federal government has supported the company through guarantees to part of the debts, reducing Eletrobras' cost of funds and benefitting its cash flow. Around 27% of the debt (excluding the RGR) was in foreign currency which brings some currency risk to the group. DIVESTMENT OF DISTRIBUTION COMPANIES POSITIVE Fitch believes the planned divestment of the power distribution companies contributes to the group's ability to improve cash generation. CELG's privatization auction is scheduled to occur on Nov. 30, 2016 and the remaining six companies should be privatized or returned to the Federal Governemt by December 2017. Fitch expects Eletrobras to sell its stake/control at CELG D for a minimum BRL900 million, which enhances the liquidity. In addition, even if the privatization of the other six other distribution companies should not bring any cash to Eletrobras, it will avoid approximately BRL 2 billion per year of losses. HIGH IMPORTANCE TO BRAZIL Eletrobras has a strong position as the largest electricity generation and transmission company in Brazil, with 32% of installed generation capacity and 53% of transmission lines as of September 2016. Its size and active presence in the most relevant energy projects under construction in Brazil make it strategically important to the country's economy and development. KEY ASSUMPTIONS -- Receipt of BRL27.8 bi from compensation value for the transmission concession renewal over eight years, starting in July 2017 (inflation adjusted); -- Receipt of BRL900 million from the divestment of CELG D in 2017; -- Average annual capex (including capital injection in subsidiaries) of BRL7.4 billion from 2017 to 2019; -- Dividends: no payment in 2016; 25% of net profit in 2017 and 50% from 2018. RATING SENSITIVITIES Factors that could potentially lead to a negative rating action are: -- A downgrade of the sovereign; -- The perception of a weakening linkage of Brazilian government support; -- Deterioration on the company's liquidity position. Factors that could potentially lead to a positive rating action are: -- Sustained recovery of the group's operational cash flow generation; -- The Brazilian government's continuous support in order to strengthen the linkage between the group and the Federal Republic of Brazil. LIQUIDITY Eletrobras has historically maintained a strong liquidity position. As of Sept. 30, 2016, the company's consolidated liquidity ratios, as measured by cash and equivalents/short-term debt and cash and equivalents plus CFFO/short-term debt, were adequate at 1.1x and 2.1x, respectively. Eletrobras' liquidity of BRL6.5 billion at the end of 3Q16, compared with BRL5.8 billion of short-term debt, should be reinforced the receipt of the compensation revenues for the renewal of the transmission concessions after July 2017 and the sale of CELG D. The negative EBITDA, when excluded the non-recurring compensation revenues, does not allow calculation of leverage ratios. FULL LIST OF RATINGS ACTIONS Fitch has affirmed the following ratings: Eletrobras -- Foreign Currency LT IDR at 'BB-'; Outlook revised to Stable from Negative -- Local Currency LT IDR at 'BB-'; Outlook revised to Stable from Negative -- National Scale LT rating at 'AA-(bra)'; Outlook Stable -- USD1 billion senior unsecured notes due 2019 at 'BB-'; -- USD1.75 billion senior unsecured notes due 2021 at 'BB-'. Furnas -- Foreign Currency LT IDR at 'BB-'; Outlook revised to Stable from Negative -- Local Currency LT IDR at 'BB-'; Outlook revised to Stable from Negative -- National Scale LT rating at 'AA-(bra)'; Outlook Stable ========================== C A Y M A N I S L A N D S ========================== BALI ANCHOR: Placed Under Voluntary Wind-Up ------------------------------------------- On Oct. 28, 2016, the sole shareholder of Bali Anchor Investments Limited resolved to voluntarily wind up the company's operations. Creditors are required to file their proofs of debt to be included in the company's dividend distribution. The company's liquidator is: John Chi On Ho c/o Richard Bennett Elian Fiduciary Services (Cayman) Limited 89 Nexus Way Camana Bay Grand Cayman KY1-9007 Cayman Island Telephone: +852 3656 6069 Facsimile: +852 3656 6001 BEST ACTION: Creditors' Proofs of Debt Due Dec. 12 -------------------------------------------------- The creditors of Best Action Limited are required to file their proofs of debt by Dec. 12, 2016, to be included in the company's dividend distribution. The company commenced wind-up proceedings on Oct. 26, 2016. The company's liquidators are: Koo Chi Sum Stephen Liu Yiu Keung Ernst & Young Transactions Limited One Island East, 62nd Floor 18 Westlands Road, Island East Hong Kong Telephone: +852 2846 9888 Facsimile: +852 2827 0715 BLUECREST SPECIAL: Creditors' Proofs of Debt Due Dec. 21 -------------------------------------------------------- The creditors of Bluecrest Special Situations Master Fund Limited are required to file their proofs of debt by Dec. 21, 2016, to be included in the company's dividend distribution. The company commenced liquidation proceedings on Oct. 31, 2016. The company's liquidator is: Stuart Sybersma c/o Christopher Yeramian Deloitte & Touche Citrus Grove Building, 4th Floor Goring Avenue George Town KY1-1109 Cayman Islands Telephone: +1 (345) 814 3469 Facsimile: +1 (345) 949 8258 BLUECREST STRATEGIC: Creditors' Proofs of Debt Due Dec. 21 ---------------------------------------------------------- The creditors of Bluecrest Strategic Limited are required to file their proofs of debt by Dec. 21, 2016, to be included in the company's dividend distribution. The company commenced liquidation proceedings on Oct. 31, 2016. The company's liquidator is: Stuart Sybersma c/o Christopher Yeramian Deloitte & Touche Citrus Grove Building, 4th Floor Goring Avenue George Town KY1-1109 Cayman Islands Telephone: +1 (345) 814 3469 Facsimile: +1 (345) 949 8258 CSI MANAGEMENT: Commences Liquidation Proceedings ------------------------------------------------- On Nov. 2, 2016, the sole shareholder of CSI Management Limited resolved to voluntarily 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: Stephen Liu Yiu Keung c/o Maples and Calder Attorneys-at-law The Center, 53rd Floor 99 Queen's Road, Central Hong Kong DACAPA INVESTMENT: Creditors' Proofs of Debt Due Dec. 21 -------------------------------------------------------- The creditors of Dacapa Investment Company are required to file their proofs of debt by Dec. 21, 2016, to be included in the company's dividend distribution. The company commenced liquidation proceedings on Nov. 3, 2016. The company's liquidator is: CDL Company Ltd. P.O. Box 31106 Grand Cayman KY1-1205 Cayman Islands DYNAMI SPV III: Creditors' Proofs of Debt Due Dec. 21 ----------------------------------------------------- The creditors of Dynami SPV III Limited are required to file their proofs of debt by Dec. 21, 2016, to be included in the company's dividend distribution. The company commenced liquidation proceedings on Oct. 31, 2016. The company's liquidator is: Stuart Sybersma c/o Christopher Yeramian Deloitte & Touche Citrus Grove Building, 4th Floor Goring Avenue George Town KY1-1109 Cayman Islands Telephone: +1 (345) 814 3469 Facsimile: +1 (345) 949 8258 EMPIRE CAPITAL: Commences Liquidation Proceedings ------------------------------------------------- On Nov. 3, 2016, the sole shareholder of Empire Capital Partners Enhanced Master Fund, Ltd. resolved to voluntarily 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: Empire Capital Management, L.L.C. One Gorham Island Suite 201 Westport Connecticut 06880 United States of America Telephone: +1 (203) 454 1019 GABOR LTD: Placed Under Voluntary Wind-Up ----------------------------------------- On Nov. 1, 2016, the shareholders of Gabor Ltd resolved to voluntarily wind up the company's operations. Creditors are required to file their proofs of debt to be included in the company's dividend distribution. The company's liquidator is: T.C. Directors (Channel Islands) Limited c/o Emma Ferbrache P.O. Box 87 Lefebvre Court Lefebvre Street St. Peter Port Guernsey, GY1 4BS Telephone: +44 (0) 1481 702776 Facsimile: +44 (0) 1481 726660 GATEWAY CHINA: Creditors' Proofs of Debt Due Dec. 12 ---------------------------------------------------- The creditors of Gateway China Fund I are required to file their proofs of debt by Dec. 12, 2016, to be included in the company's dividend distribution. The company commenced wind-up proceedings on Nov. 1, 2016. The company's liquidator is: Richard Fear c/o Kevin Butler P.O. Box 2681 Grand Cayman KY1-1111 Cayman Islands Telephone: (345) 814 7374 Facsimile: (345) 945 3902 GREEN MOUNT: Creditors' Proofs of Debt Due Dec. 12 -------------------------------------------------- The creditors of Green Mount Investments Limited are required to file their proofs of debt by Dec. 12, 2016, to be included in the company's dividend distribution. The company commenced wind-up proceedings on Oct. 26, 2016. The company's liquidators are: Koo Chi Sum Stephen Liu Yiu Keung Ernst & Young Transactions Limited One Island East, 62nd Floor 18 Westlands Road, Island East Hong Kong Telephone: +852 2846 9888 Facsimile: +852 2827 0715 MILLA INVESTMENT: Placed Under Voluntary Wind-Up ------------------------------------------------ On Oct. 31, 2016, the shareholders of Milla Investment Inc. resolved to voluntarily wind up the company's operations. Creditors are required to file their proofs of debt to be included in the company's dividend distribution. The company's liquidator is: Avalon Ltd. Reference: GL Landmark Square, 1st Floor, 64 Earth Close P.O. Box 715 Grand Cayman KY1-1107 Cayman Islands Telephone: (+1) 345 769 4422 Facsimile: (+1) 345 769 9351 RISING STATE: Creditors' Proofs of Debt Due Dec. 12 --------------------------------------------------- The creditors of Rising State Limited are required to file their proofs of debt by Dec. 12, 2016, to be included in the company's dividend distribution. The company commenced wind-up proceedings on Oct. 26, 2016. The company's liquidators are: Koo Chi Sum Stephen Liu Yiu Keung Ernst & Young Transactions Limited One Island East, 62nd Floor 18 Westlands Road, Island East Hong Kong Telephone: +852 2846 9888 Facsimile: +852 2827 0715 =================================== D O M I N I C A N R E P U B L I C =================================== DOMINICAN REPUBLIC: Approves US$18.2B for 2017 Budget & Debt ------------------------------------------------------------ Dominican Today reports that the Chamber of Deputies approved in the second roll call a bill on the 2017 Budget, and another which authorizes the Finance Ministry to issue RD$122.9 billion (US$2.7 billion) of public debt instruments, in a session in which opposition PRM party lawmakers left the session before the voting. The Senate had already approved both bills and will now go to president Danilo Medina who's expected to sign them, says the report. The Budget for next year, of RD$711.4 billion (US$15.5 billion) was approved by lawmakers of the ruling party (PLD) and of the pro-government PRD party despite the opposition's intense pressure, according to Dominican Today. 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'; -- Country Ceiling affirmed at 'BB-'. DOMINICAN REPUBLIC: Border Market Slumps on Haiti's Woes -------------------------------------------------------- Dominican Today reports that the cross border market held Mondays and Fridays in the city of Dajabon, where trade between Dominicans and Haitians is usually risk, has declined due to Haiti's environmental, economic and political woes. Haitian and Dominican merchants agree that five years ago, trade was as high as between US$1.2 million per week, motoring the economy of towns along both countries' border, according to Dominican Today. "Recently however we perceive with concern how the economic exchange between the two nations decreases," Border Market Merchants Association president Abigail Bueno told local media, the report notes. Mr. Bueno said last week, the day after Haiti's presidential election, the market was held normally, but with declining sales, the report relays. On Nov. 28, hundreds of Haitians crossed into Dajabon to trade with Dominicans, but both reiterate that just as in other days, sales slumped, the report relays. They also say that major merchants from Cape Haitian, Fort Liberte, Trou Du Nort and other north Haiti towns aren't coming to market as before, and is hurting business, the report adds. 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'; -- Country Ceiling affirmed at 'BB-'. =========== M E X I C O =========== GRUPO POSADAS: S&P Affirms 'B+' CCR & Revises Outlook to Stable --------------------------------------------------------------- S&P Global Ratings revised its outlook on Grupo Posadas S.A.B. de C.V. to stable from positive. S&P also affirmed its 'B+' corporate credit and issue-level ratings on the company. The recovery rating on the notes remains at '3', indicating S&P's expectation of a meaningful (50%-70%) recovery in the higher end of the range, for unsecured lenders in a hypothetical event of a payment default. The outlook revision reflects S&P's expectation that despite Posadas' steady top-line growth and healthy operating performance, the previously expected deleveraging and improvement in credit metrics, such as debt to EBITDA approaching 4.0x, will take longer to materialize. Mexico's cooling economy and a sharp depreciation of the peso throughout 2016 have weighed on Posadas' financial performance, reflecting its exposure to foreign exchange volatility because it has $438 million in unhedged dollar- denominated debt. Nonetheless, Posadas is taking initiatives to improve its capital structure including its debt maturity profile and has secured funding to call the remaining $38 million outstanding of its senior unsecured notes due 2017. Posadas' business risk profile reflects a property base primarily dependent to tourism dynamics in Mexico, a highly fragmented industry which represents more than 90% of the company's revenues. However, Posadas is one of the leading hotel owners/operators in the country, focusing on business and leisure lodging with an expanding vacation club division. Posadas has been able to achieve growth despite sluggish economic conditions. In addition, the company is implementing an aggressive expansion plan that consists of the opening of more than 30 lodging properties by 2018, representing close to 20% of room additions in Mexico. In S&P's view, the expansion will allow Posadas to maintain a favorable market position despite the significant competition. Despite the expansion's potential pressure on Posadas' EBITDA margins, S&P expects them to remain close to 25% thanks to an effective commercial strategy that will continue to support occupancy rates close to 70%, in S&P's view. Moreover, refurbishments, net room additions, and dollar-referenced rates should continue boosting ADRs. Posadas' financial risk profile reflects S&P's expectations that the company will mainly fund its expansion plan with free operating cash flow generation, without requiring significant external financing in the next two years. Nonetheless, S&P's current forecast assumes a slower-than-expected deleveraging and improvement in credit metrics, given Posadas' exposure to the foreign currency volatility stemming from its dollar-denominated debt. ====================== P U E R T O R I C O ====================== GUSTAVO ARANGO: Unsecureds to Recover 12% Under Plan ---------------------------------------------------- Gustavo Arango, Inc., filed with the U.S. Bankruptcy Court for the District of Puerto Rico a disclosure statement referring to the Debtor's plan of reorganization. General unsecured claims against the Debtor total $19,775.17, consisting mainly of unsecured claims of governmental entities and utility claims. Class 6 Other General unsecured Claims total $252. As of Nov. 16, 2016, no claims have been filed under this class. Members of this class will be paid 12% of their allowed claims in 60 equal consecutive monthly installments for the Effective Date. This class is impaired. The Plan will be funded with the Debtor's own assets, the collection of any account receivables, the Debtor's cash in bank and funds from the Debtor's operations. If needed, Gustavo Arango will provide additional capital input. Plan Outline Has Conditional Approval U.S. Bankruptcy Judge Brian K. Tester in Puerto Rico conditionally approved the disclosure statement and allowed the Debtor to solicit acceptances or rejections of the Plan. A hearing for the consideration of the final approval of the Disclosure Statement and the confirmation of the Plan and of objectionsas may be made to either will be held on December 14, 2016, at 09:00 A.M. Acceptances or rejections of the Plan may be filed in writing on/or before 10 days prior to the Plan confirmation hearing date. Any objection to the final approval of the Disclosure Statement and/or the confirmation of the Plan must also be filed on/or before 10 days prior to the Plan confirmation hearing date. The Disclosure Statement is available at: http://bankrupt.com/misc/prb16-05118-39.pdf Gustavo Arango, Inc., is a corporation organized under the laws of the Commonwealth of Puerto Rico on Jan. 23, 1990. It was created by Gustavo A. Arango, a prestigious fashion designer. The Debtor's main business is to design, manufacture and make haute couture designs tailored specially to its client's needs. The business of the Debtor is centered at its atelier and flaship store located at Ave. Roosevelt 1334, Puerto Nuevo, San juan, P.R. 00920. The Debtor filed a Chapter 11 petition (Bankr. D. P.R. Case No. 16-05118) on June 28, 2016, and is represented by Carmen D. Conde Torres, Esq. of C. Conde & Assoc. The Hon. Brian K. Tester presides over the case. PUERTO RICO: Top Creditors Flex Muscles in Bond Fight ----------------------------------------------------- Andrew Scurria at The Wall Street Journal reports that Puerto Rico's largest mutual-fund bondholders have broken their silence in an ongoing $30 billion creditor standoff, underscoring tensions between the commonwealth's traditional municipal investor base and the hedge funds now involved in its financial restructuring. Funds controlled by fixed-income giants Franklin Advisers and OppenheimerFunds asked a federal judge last week to enter them as defendants in a lawsuit brought by hedge funds holding general obligation, or GO, bonds that have been in default since July, according to The Wall Street Journal. The lawsuit pits those creditors against investors holding $17 billion in competing bonds known as Cofinas for their Spanish acronym and backed by sales tax revenues, the report notes. If successful, the lawsuit could compromise the Cofina bondholders' liens and free up a fresh source of repayment for the GO bondholders, which are guaranteed under the Puerto Rican constitution, the report relays. The report says that the courts, on the other hand, could affirm the commonwealth's longstanding position that the sales-tax revenues are off-limits to the GO bondholders. U.S. District Court Judge Francisco Besosa could also freeze the dispute in the hopes that the warring investor groups will negotiate a settlement, as the Cofina investors have urged. Congress installed a federal oversight board over the summer to take over Puerto Rico's financial decision-making, but it has yet to announce the hiring of legal and financial advisors with whom creditors will negotiate, the report notes. The legal status of the Cofina revenues has never been tested in the courts, and resolving it now would take a major question on creditors' rights out of the board's hands, the report discloses. For now, it wants the dispute paused under the automatic stay provisions of the Puerto Rico Oversight, Management and Economic Stability Act, or PROMESA, the report says. Franklin and Oppenheimer, along with Santander Asset Management, are cross-holders with a combined $3.6 billion in Cofina claims and $1.1 billion in GO claims, according to a filing in Puerto Rico federal court, the report notes. With $2.8 billion of their exposure in subordinated Cofina debt, the mutual funds said they have the "greatest possible interest" in protecting the sales taxes from being diverted, the report relays. Junior Cofina bonds would suffer the most if the revenue stream were interrupted, although they have continued to be paid even with the territorial government in default on its constitutional debt, the report discloses. Hedge funds exclusively holding senior Cofina bonds have already asked to be heard in the lawsuit. Those bondholders, including GoldenTree Asset Management, Merced Capital and Taconic Capital Advisors, hold zero-coupon bonds that don't come due for decades, according to people familiar with the matter, the report notes. Their group has taken the position that diverting the sales taxes would cause their claims to come due immediately, leapfrogging over those of junior creditors, the report says. As holders of both types of bonds, the mutual funds said they aren't conflicted and have reason to guard the interests of all creditors within the $17 billion Cofina debt stack, the report discloses. Puerto Rican lawmakers first segregated sales-tax revenues from its general fund a decade ago to create an alternate borrowing mechanism. "The interests of Cofina, its bondholders generally and its current-pay subordinate bonds in particular are served by maintaining the statutory transfer," lawyers for Franklin, Oppenheimer and Santander wrote in court papers, notes the report. "It is likely that the senior Cofina bondholders want Cofina to default." A spokesman for the mutual funds declined to comment beyond the filing. Representatives for the GO bondholder group and for Cofina bond trustee Bank of New York Mellon didn't immediately respond to requests for comment, says WSJ. James Doak of Miller Buckfire & Co., an adviser to the senior Cofina bondholder group, called the mutual funds' appearance "a positive for Puerto Rico, the oversight board and the incoming administration," relates WSJ. "Major, long-standing investors holding both GO and Cofina bonds are stepping forward to defend PROMESA's stay provision and reject more litigious GO bondholders' attempts to seize [sales tax] revenue," he said, the report relays. The benchmark 8%-coupon GO bonds due in 2035 traded at 69.5 cents on the dollar, according to FactSet, having cooled off from a post-election rally that pushed prices to 73 cents, the report notes. Puerto Rico recently elected Dr. Ricardo Rossello, a statehood supporter perceived by investors as friendlier to creditor interests, to replace Gov. Alejandro Garcia Padilla, the report relays. The new governor takes office in January. Corrections & Amplifications Funds controlled by fixed-income giants Franklin Advisers and OppenheimerFunds asked a federal judge last week to enter them as defendants in a lawsuit brought by hedge funds holding general obligation, or GO, bonds that have been in default since July, the report adds. An earlier version of this article misstated the name of Franklin Advisers. * * * The Troubled Company Reporter-Latin America reported on June 15, 2016, that the U.S. Supreme Court struck down a Puerto Rico law that would have let its public utilities restructure their debt over the objection of creditors leaving it to Congress to help the island resolve its fiscal crisis. Siding with bondholders challenging the law, the court ruled 5-2 that the measure was barred under federal bankruptcy law. Justice Clarence Thomas, writing for the majority in the 5-to-2 decision, said the law was at odds with the federal bankruptcy code, which bars states and lower units of government from enacting their own versions of bankruptcy law. Puerto Rico is struggling with $72 billion in debt and has argued that it needs to restructure at least some of it under Chapter 9, the part of the bankruptcy code for insolvent local governments. But Puerto Rico is not permitted to do so, because Chapter 9 specifically excludes it. The federal law, Justice Thomas wrote, "bars Puerto Rico from enacting its own municipal bankruptcy scheme to restructure the debt of its insolvent public utilities." Chief Justice John G. Roberts Jr. and Justices Anthony M. Kennedy, Stephen G. Breyer and Elena Kagan joined him. Consequently, Puerto Rico opted to default on $911 million in constitutionally guaranteed debt, or roughly half of the $2 billion in principal and interest that came due July 1, EFE News reported. The reported further noted that Puerto Rico enacted a debt moratorium due to liquidity restraints -- a move that coincided with a new U.S. law signed by President Obama that installs a financial control board to restructure the island's debt and provides a retroactive stay on lawsuits by bondholders. On July 11, 2016, the TCR-LA reported that S&P Global Ratings has downgraded the Commonwealth of Puerto Rico's general obligation secured debt to 'D' (default) from 'CC' following the commonwealth's default. On July 7, 2016, Fitch Ratings has downgraded the Commonwealth of Puerto Rico's Long-Term Issuer Default Rating (IDR) to 'RD' from 'C' and general obligation (GO) bond rating to 'D' from 'C' following the payment default on certain GO bonds on July 1, 2016. Both ratings are removed from Rating Watch. Ratings on securities that have not defaulted will remain at 'C' until the point of default. The ratings on non-defaulted bonds remain on Rating Watch Negative. WS STORES CORP: Unsecureds to Recoup 100% in Monthly Installments ----------------------------------------------------------------- WS Stores, Corp, filed with the U.S. Bankruptcy Court for the District of Puerto Rico a disclosure statement dated Nov. 14, 2016. General unsecured creditors are classified in Class 5, and will receive a distribution of 100% of their allowed claims, in monthly installments commencing the first month after the effective date of the plan. Upon the effective date of the plan, unsecured creditors will receive a non-interest bearing note payable in monthly installments for ten years. Payments and distributions under the Plan will be funded by the continued operation of debtors business. The Disclosure Statement is available at: http://bankrupt.com/misc/prb16-03471-56.pdf WS Stores, Corp has done business under the name of Wilbys since 2005 in Cidra, Puerto Rico, as a convenience store/supermarket. The Debtor (Bankr. D.P.R., Case No. 16-03471) filed a Chapter 11 Petition on April 29, 2016. The case is assigned to Judge Enrique S. Lamoutte Inclan. The Debtor's counsel is Teresa M Lube Capo, Esq., at Lube & Soto Law Offices PSC, in San Juan, Puerto Rico. The Debtor's estimated assets range from $100,000 to $500,000 and estimated liabilities from $1 million to $10 million. The petition was signed by Jose W. Flores Santos, president. *********** Monday's edition of the TCR-LA delivers a list of indicative prices for bond issues that reportedly trade well below par. Prices are obtained by TCR-LA editors from a variety of outside sources during the prior week we think are reliable. Those sources may not, however, be complete or accurate. The Monday Bond Pricing table is compiled on the Friday prior to publication. Prices reported are not intended to reflect actual trades. Prices for actual trades are probably different. Our objective is to share information, not make markets in publicly traded securities. Nothing in the TCR-LA constitutes an offer or solicitation to buy or sell any security of any kind. It is likely that some entity affiliated with a TCR-LA editor holds some position in the issuers' public debt and equity securities about which we report. Tuesday's edition of the TCR-LA features a list of companies with insolvent balance sheets obtained by our editors based on the latest balance sheets publicly available a day prior to publication. At first glance, this list may look like the definitive compilation of stocks that are ideal to sell short. Don't be fooled. Assets, for example, reported at historical cost net of depreciation may understate the true value of a firm's assets. A company may establish reserves on its balance sheet for liabilities that may never materialize. The prices at which equity securities trade in public market are determined by more than a balance sheet solvency test. Submissions about insolvency-related conferences are encouraged. Send announcements to conferences@bankrupt.com *********** S U B S C R I P T I O N I N F O R M A T I O N Troubled Company Reporter-Latin America is a daily newsletter co-published by Bankruptcy Creditors' Service, Inc., Fairless Hills, Pennsylvania, USA, and Beard Group, Inc., Washington, D.C., USA, Marites O. Claro, Joy A. Agravante, Rousel Elaine T. Fernandez, Valerie U. Pascual, Julie Anne L. Toledo, and Peter A. Chapman, Editors. Copyright 2016. All rights reserved. ISSN 1529-2746. This material is copyrighted and any commercial use, resale or publication in any form (including e-mail forwarding, electronic re-mailing and photocopying) is strictly prohibited without prior written permission of the publishers. Information contained herein is obtained from sources believed to be reliable, but is not guaranteed. The TCR Latin America subscription rate is US$775 per half-year, delivered via e-mail. Additional e-mail subscriptions for members of the same firm for the term of the initial subscription or balance thereof are US$25 each. For subscription information, contact Peter A. Chapman at 215-945-7000 or Nina Novak at 202-362-8552. * * * End of Transmission * * *