/raid1/www/Hosts/bankrupt/TCRLA_Public/170828.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
Monday, August 28, 2017, Vol. 18, No. 170
Headlines
B A H A M A S
PINEAPPLE EXPRESS: Hundreds Demand Refunds from Pyramid Scheme
B R A Z I L
ODEBRECHT SA: Dom. Govt. Won't Pay 'a Penny More' for Power Plant
SHREE RANUKA: Raizen Energia Wants to Bid for Ethanol Mill
D O M I N I C A N R E P U B L I C
DOMINICAN REPUBLIC: GoldQuest's Mine Plan 'Only in The Press'
E C U A D O R
ECUADOR: Fitch Affirms B Long-Term IDR; Outlook Remains Negative
P U E R T O R I C O
BUENA VISTA PLANTATION: Hires GSP Law as Attorney
ENTERPRISE BUSINESS: Case Summary & 9 Unsecured Creditors
PUERTO RICO: In US$1.0BB Yearly Trade with Dominican Republic
PUERTO RICO: GO Group Bid to Reconstitute Creditors Panel Denied
V E N E Z U E L A
VENEZUELA: US Prohibits Dealings in New Debt Issued by Ven. Gov't.
VENEZUELA: Investors Unmoved Despite Sanctions Threat
X X X X X X X X X
* BOND PRICING: For the Week From Aug. 21 to Aug. 25, 2017
- - - - -
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B A H A M A S
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PINEAPPLE EXPRESS: Hundreds Demand Refunds from Pyramid Scheme
--------------------------------------------------------------
Caribbean360.com reports that hundreds of Bahamians stormed the
offices of "asue" holders company, Pineapple Express to recover
their monies from the business that regulators have described as a
Ponzi scheme.
Police had to be called to control the angry customers who were
part of the asue -- a system of saving money, and financing, says
the report.
The company, which promises a large profit to contributors who
make a small investment, was forced to close its doors earlier
after it failed to pay promised disbursement to customers,
according to Caribbean360.com.
The Security Commission summoned management to a meeting. That
same day, the Pineapple Express issued a notice announcing the
closure of its office, claiming in a statement that Government
officials had "asked them not to open," the report notes. It
promised to reopen, but it did not and only reopened to make
payouts, the report relays.
The Securities Commission issued a statement warning Bahamians
that the activity of Pineapple Express was "very high risk and
unsafe," the report discloses.
"Therefore, members of the public are advised to exercise extreme
caution when considering to engage with this entity or persons
soliciting on behalf of this entity. Persons who decide to do so,
do it at their own risk," it said, the report relays.
According to the Commission, people who sought to join the asue,
were required to pay a one-time fee of $200 and receive $1,050 or
pay $100 and receive $540. Participants were also required to pay
a $25 membership fee, the report notes. They also had to pay a
$25 processing fee each time they rejoined for a payout. After
signing up, they were to receive a payout in "around 14 business
days," the report relays.
The regulator explained that participants made money solely by
recruiting new participants into the program and while the scheme
may gather momentum it would eventually crash, the report
discloses.
"Fraudsters behind these schemes typically go to great lengths to
make their programs appear to be legitimate, multi-level marketing
schemes, but the schemes eventually fall apart when it becomes
impossible to recruit new participants, which can happen quickly,"
it said. "So, without new investors, money for payouts very soon
becomes insufficient, the report notes. Therefore, under no
circumstance are these schemes to be viewed as bona fide
investment programs as they tend by nature to involve fraud," the
report relays.
Pineapple Express has, however, assured its investors that they
will receive their refunds, the report notes.
"Members will be contacted in groups based on the dates they
joined to schedule times to receive their refunds. We are truly
sorry and apologize for the inconvenience," the company said in a
statement obtained by the news agency.
As reported in the Troubled Company Reporter-Latin America on
July 31, 2017, Caribbean360.com reports that Bahamian Prime
Minister Dr. Hubert Minnis has disclosed harsh cuts in the Bahamas
Government spending as he embarks on a strategy to remedy the
country's fiscal deficit, which is projected to reach $500 million
this year.
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B R A Z I L
===========
ODEBRECHT SA: Dom. Govt. Won't Pay 'a Penny More' for Power Plant
-----------------------------------------------------------------
Dominican Today reports that the Dominican government won't pay a
penny more than what the contract with the Odebrech conglomerate
stipulates, said State-owned Electric Utilty (CDEEE) CEO Ruben
Jimenez Bichara.
The official's statement comes less than one day after reports
emerged of a potential dispute arising from the CDEEE's refusal to
pay Odebrecht more than US$708.0 million for "additional expenses"
in the construction of the Punta Catalina power plant, a project
at the center of a scandal on alleged graft and favoritism during
the tender process, and costs ballooned from US$900 million, to
US$2.01 billion, according to Dominican Today.
"The CDEEE is committed to the national interest and will defend
every penny and by investing for the completion and start-up of
the Punta Catalina thermoelectric terminal," the official warned,
the report notes.
Mr. Bichara revealed that talks will start with the contractor
next week "where we will demonstrate that the position we defend
is fully compatible with the EPC contract and, consequently, with
the obligations assumed by the parties," the report relays.
"To sum it up, we can say that the Odebrecht-Tecnimont-Estrella
consortium's claims are divided into two global points": Aspects
related to the construction schedule and possible extension of
work deadlines, for US$542.6 million; and modifications incurred
in the project due to situations arising in the process that
weren't previously foreseen, for US$165.6 million," the report
quoted Mr. Jimenez as saying.
As reporter in the Troubled Company Reporter-Latin America on
Dec. 2, 2016, The Wall Street Journal related that Marcelo
Odebrecht, the jailed former head of Brazilian construction giant
Odebrecht SA, agreed to sign a plea-bargain agreement in
connection with Brazil's largest corruption probe ever, according
to a person close to the negotiations. The move could roil the
nation's political class yet again. The testimony of the former
industrialist, which is part of the deal, has the potential to
implicate numerous politicians who allegedly took kickbacks from
contractors as part of a years-long graft ring centered on
Brazil's state-run oil company, Petroleo Brasileiro SA, known as
Petrobras, according to The Wall Street Journal.
SHREE RANUKA: Raizen Energia Wants to Bid for Ethanol Mill
----------------------------------------------------------
Jose Roberto Gomes and Tatiana Bautzer at Reuters report that
Brazil's Raizen Energia SA is interested in bidding for an ethanol
mill owned by the Brazilian subsidiary of India's sugar producer
Shree Renuka Sugars Ltd, which will be auctioned in early
September, two sources with knowledge of the matter said.
Raizen, which is a Brazilian joint venture between Cosan SA
Industria e Comercio and Royal Dutch Shell, made a late request to
join the auction and would have to receive a special authorization
from creditors to bid, the sources said, asking to remain
anonymous as they are not authorized to discuss the matter
publicly, according to Reuters.
The mill is being sold as part of an in-court debt restructuring,
and the deadline to submit documents to join the auction was Aug.
10, the report relays. Renuka's Brazil subsidiary filed for
bankruptcy protection two years ago to renegotiate BRL2.7 billion
($859 million), the report notes.
Creditors would have to approve a new deadline to bidders and
delay the auction date, one of the sources said. The auction is
scheduled for Sept. 4, the report says.
Raizen did not immediately return a request for comment. Renuka's
Brazil unit declined to comment.
Reuters reported on Aug. 11 that Chinese commodities trader COFCO
Corp has registered to take part in the auction, the report
discloses. COFCO already owns four sugar and ethanol plants in
Brazil capable of processing a combined 15 million tonnes of cane
per year, the report adds.
===================================
D O M I N I C A N R E P U B L I C
===================================
DOMINICAN REPUBLIC: GoldQuest's Mine Plan 'Only in The Press'
-------------------------------------------------------------
Dominican Today reports that Dominican Republic Environment
Minister Francisco Dominguez said the miner GoldQuest's plan to
exploit a site in the western part of the country hasn't been
submitted to his agency, and exists "only in the press."
When a group of farmers in Sabaneta, San Juan de la Maguana
(west), expressed concern over the miner's intention, the official
sought to calm them by affirming that the project "doesn't exist
in the ministry," according to Dominican Today.
"That's only in the press," he said, but when pressed to clarify,
the official stressed that the company has yet to submit anything
to Environment thus far, the report notes.
On its website ,GoldQuest said it plans to extract 2,800 tons in
its Romero Project near San Juan, with an estimated 2.4 grams of
gold per ton. It's part of the La Escandalosa mining concession,
an area of nearly 4,000 hectares, the report relays.
Lawmaker
Deputy Fidelio Despradel, of the minority party Alianza Pais, also
shares the concerns of area farmer, who recently warned
Environment that mining in the area of Sabaneta will harm farm
production and San Juan's water sources, the report adds.
As reported in Troubled Company Reporter-Latin America on July 24,
2017, Moody's Investors Service has upgraded the Dominican
Republic's long term issuer and debt ratings to Ba3 from B1 and
changed the outlook to stable from positive, based on the
following key drivers:
(1) The Dominican Republic's continued robust growth outlook
compared to rating peers, coupled with a reduction in
external risks as current account deficits have declined and
international reserves have increased.
(2) The reduction in fiscal deficits over the last four years and
Moody's expectation that fiscal deficits will remain shy of
3% of GDP, supported by fiscal restraint and reduced
transfers to the electricity sector.
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E C U A D O R
=============
ECUADOR: Fitch Affirms B Long-Term IDR; Outlook Remains Negative
----------------------------------------------------------------
Fitch Ratings has affirmed Ecuador's Long-Term Foreign Currency
Issuer Default Ratings (IDR) at 'B'/ Negative Outlook.
KEY RATING DRIVERS
Ecuador's high fiscal deficits and weak growth prospects are
leading to a rapid rise in general government debt, expected at
44.3% of GDP at end-2017 up from 38.5% in 2016. The debt burden is
expected to reach 50.2%, converging closer to the 'B' median of
55.6% of GDP by 2019. Fitch considers Ecuador's debt tolerance
comparatively weaker due to its high commodity dependence,
constrained external financing flexibility and weak historical
repayment record.
Lenin Moreno of the Alianza Pais party took office in May 2017. He
has pledged to boost social spending while adhering to a tighter
budget. He has committed to improving transparency with the budget
process and government obligations. Frictions in the government
over corruption allegations against the Vice President, Jorge
Glas, could lead to governance challenges and legislative passage
of fiscal reforms, especially given the government party's lower
representation in the National Assembly (74 out of 137 versus 91
in the prior government). The first test will come from the
revised 2017 budget due by end-August 2017.
Fitch expects the general government fiscal deficit to fall to
5.9% in 2017 from 7.4% in 2016 due to cuts in capital spending and
some uptick in revenue growth; however, risks are to the downside.
The incoming administration has outlined a fiscal consolidation
plan representing 3% of GDP by 2021. The proposed adjustment plan
is largely because of lower capital expenditure; however,
implementation risks are high, in part due to current expenditure
rigidities and downside risks from further revenue shocks. Fitch
forecasts a fiscal deficit of 4.8% in 2018 and 3.7% in 2019. Many
of the large multi-year capital projects on hydroelectric dams and
highways initiated under the Correa administration are completed
or near completion.
Ecuador's ability to run large budget deficits will depend on
access to external financing sources, which could prove
challenging. Fitch estimates that the government faces a USD5
billion financing requirement for the rest of 2017 and nearly
USD10 billion in 2018. The average debt amortization is USD5
billion through 2019, although the majority is due to domestic
public sector or bilateral sources. Fitch expects Ecuador's
government to meet its financing needs through a combination of
bilateral loans from China, fresh multilateral loans, external
bond issuance and some further net issuance locally. Government
arrears to suppliers could increase through the end of 2017, as
well. The increased reliance on central bank financing since last
year highlights the strains on financing the budget and is not
sustainable over the medium-term in the context of dollarization.
Economic growth has depended greatly on public infrastructure
projects over the last five years and cuts to spending are likely
to dent growth prospects for the next few years. Fitch expects
Ecuador's GDP to grow by just 0.7% after a fall of 1.3% in 2016.
Fitch also expects Ecuador's growth to be below 2% for the next
three years. Growth will be dependent on the pace of economic
adjustment toward greater private investment. Average inflation
fell to 1.7% in 2016 from 4% in 2015.
Ecuador's current account balance swung to a 1.4% of GDP surplus
in 2016 from a deficit of 2.1% of GDP in 2015, mainly due to
import compression. Ecuador's government imposed temporary import
tariffs in 2016 to stem external pressures. The recession also
helped reduce pressures. The temporary tariffs expired in June
2017. The current account surplus is expected to narrow over the
next two years due to a mild economic recovery and an end to the
temporary tariff measures.
Ecuador's external liquidity indicators are weak compared to peers
and its external solvency indicators have deteriorated. Ecuador's
international reserves are expected to reach USD3.8 billion at
end-year 2017, covering 1.9 months of CXP, up from 1.3 months in
2016 but still half of the 'B' median's four months. Net external
debt is expected to rise to 11% of GDP in 2017.
Ecuador's ratings are supported by its high per capita income
relative to 'B' range peers, improved governance and social
indicators and track record of macroeconomic stability and low
inflation, supported by dollarization.
SOVEREIGN RATING MODEL (SRM) and QUALITATIVE OVERLAY (QO)
Fitch's proprietary SRM assigns Ecuador a score equivalent to a
'B+' rating on the Long-term Foreign Currency IDR scale.
Fitch's sovereign rating committee adjusted the output from the
SRM to arrive at the final Long-term Foreign Currency IDR by
applying its QO, relative to rated peers, as follows:
Macroeconomic: -1 notch, to reflect Ecuador's lower growth
prospects than rating peers and weaker macroeconomic policy
credibility due to the large fiscal imbalances and the
government's increasing reliance on central bank financing in the
context of dollarization.
Fitch's SRM is the agency's proprietary multiple regression rating
model that employs 18 variables based on three year centred
averages, including one year of forecasts, to produce a score
equivalent to a Long-term Foreign Currency IDR. Fitch's QO is a
forward-looking qualitative framework designed to allow for
adjustment to the SRM output to assign the final rating,
reflecting factors within Fitch's criteria that are not fully
quantifiable and/or not fully reflected in the SRM.
RATING SENSITIVITIES
The main factors that could lead to a downgrade include:
-- The emergence of severe fiscal financing constraints that lead
to an abrupt economic adjustment;
-- Failure to narrow the fiscal deficit, leading to a continued
rapid rise in the government's debt burden;
-- Persistent weak economic growth;
-- Governability challenges that undermine the government's
policymaking capacity;
The Rating Outlook is Negative. Consequently, Fitch's sensitivity
analysis does not currently anticipate developments with a high
likelihood of leading to a positive rating change.
Future developments that could individually, or collectively,
result in a stabilisation of the Outlook include:
-- Implementation of fiscal policy adjustments that narrows the
budget deficit and improves the trajectory of public debt/GDP.
-- Improvements in the economy's external liquidity position that
provides a more ample buffer to external shocks;
-- Economic recovery resulting from higher investment in the oil
sector, productivity-enhancing reforms and improvements in the
business environment.
KEY ASSUMPTIONS
The ratings and Outlook are sensitive to a number of assumptions:
The growth, fiscal and external forecasts assume that oil
production holds steady at 526,000 bpd in 2017-18 as stipulated in
the OPEC production accords. Fitch's latest projections point to a
recovery in Brent oil prices to USD52.5 per barrel in 2017, USD55
per barrel in 2018 and USD60 per barrel in 2019.
Fitch has affirmed Ecuador's ratings as follows:
-- Long-Term Foreign-Currency IDR at 'B'; Outlook Negative;
-- Short-Term Foreign-Currency IDR at 'B';
-- Country Ceiling at 'B';
-- Issue ratings on long-term senior-unsecured foreign-currency
bonds at 'B'.
======================
P U E R T O R I C O
======================
BUENA VISTA PLANTATION: Hires GSP Law as Attorney
-------------------------------------------------
Buena Vista Plantation, Corp., et al, seek authority from the U.S.
Bankruptcy Court for the District of Puerto Rico to employ GSP
Law, PSC, as attorney to the Debtors.
Buena Vista Plantation requires GSP Law to:
a. prepare pleading and applications and conduct of
examinations incidental to administration;
b. develop the relationship of the status of the Debtor to
the claims of creditors in the bankruptcy case;
c. advise the Debtor of its rights, duties, and obligations
as debtor operating under Chapter 11 of the Bankruptcy
Code;
d. take any and all other necessary action incident to the
proper preservation and administration of the bankruptcy
Chapter 11 estate; and
e. advise the debtor in possession and assist the Debtor in
the formulation and presentation of a plan pursuant to
Chapter 11 of Bankruptcy Code, the disclosure statement
and concerning any and all matters relating thereto.
GSP Law will be paid at the hourly rate of $200. The firm will be
paid a retainer in the amount of $3,250. It will also be
reimbursed for reasonable out-of-pocket expenses incurred.
Gerardo L. Santiago Puig, Esq., a member of GSP Law, PSC, assured
the Court that the firm is a "disinterested person" as the term is
defined in Section 101(14) of the Bankruptcy Code and does not
represent any interest adverse to the Debtors and their estates.
Santiago Puig can be reached at:
Gerardo L. Santiago Puig, Esq.
GERARDO L. SANTIAGO PUIG, ATTORNEY AT LAW
33 Resolucion St., Suite 801
San Juan, PR 00920
Tel: (787) 777-8000
Fax: (787) 767-7107
E-mail: gsantiagopuig@gmail.com
About Buena Vista Plantation, Corp.
Buena Vista Plantation Corp., filed a Chapter 11 bankruptcy
petition (Bankr. D. P.R. Case No. 16-02426) on March 31, 2016,
disclosing under $1 million in both assets and liabilities. The
Debtor is represented by Gerardo L Santiago Puig, Esq., at GSP
Law, PSC.
ENTERPRISE BUSINESS: Case Summary & 9 Unsecured Creditors
---------------------------------------------------------
Debtor: Enterprise Business Corporation
dba Car Cleaners of America
PO Box 6026
Mayaguez, PR 00681
Type of Business: Enterprise Business owns in fee simple
interest a single story building located at
Sabalos Ward (Folio 149, Tomo 1024 De
Mayaguez) valued at $310,000. It is also
the fee simple owner of a car wash located
at Betances Street (Folio 26, Tomo 1535, De
Mayaguez) valued at $471,000.
The Company previously sought bankruptcy
protection of Sept. 21, 2015 (Bankr. D.P.R.
Case No. 15-07259) and Dec. 17, 2013 (Bankr.
D.P.R. Case No. 13-10452).
Chapter 11 Petition Date: August 23, 2017
Case No.: 17-05940
Court: United States Bankruptcy Court
District of Puerto Rico (Ponce)
Debtor's Counsel: Carmen D Conde Torres, Esq.
C. CONDE & ASSOC.
254 San Jose Street, 5th Floor
San Juan, PR 00901-1523
Tel: 787-729-2900
Fax: 787-729-2203
E-mail: notices@condelaw.com
condecarmen@condelaw.com
Debtor's
Accountant: Jose Diaz Crespo
Total Assets: $1.03 million
Total Liabilities: $1.37 million
The petition was signed by Ivan Torres Nazario, president.
The Debtor's list of nine unsecured creditors is available for
free at http://bankrupt.com/misc/prb17-05940.pdf
PUERTO RICO: In US$1.0BB Yearly Trade with Dominican Republic
-------------------------------------------------------------
Dominican Today reports that Puerto Rico secretary of state, Luis
Rivera Marin, revealed that his country's trade with Dominican
Republic totals US$1.0 billion per year, and expects it to rise.
Mr. Rivera, who met with President Danilo Medina, said Puerto Rico
fares better in that trade balance, but expects increased volume
in the coming years, according to Dominican Today.
"Certainly, as Mr. Secretary says, our volume of trade exceeds one
billion dollars, clearly establishing that the trade balance is
favorable for Puerto Rico, it grew this year despite the economic
difficulties they've had," said Dominican foreign minister Miguel
Vargas in a National Palace press conference, the report notes.
He said Puerto Rico's share of the trade is over US$500 million.
"We will join efforts to contribute to a more balanced trade, in
which both nations grow with our businesses and our trade with
other destinations," the report relays.
About Puerto Rico
Puerto Rico is a self-governing commonwealth in association with
the United States that's facing a massive bond debt of $70
billion, a 68% debt-to-GDP ratio and negative economic growth in
nine of the last 10 years.
The Commonwealth of Puerto Rico has sought bankruptcy protection,
aiming to restructure its massive $74 billion debt-load and $49
billion in pension obligations.
The debt restructuring petition was filed by Puerto Rico's
financial oversight board in U.S. District Court in Puerto Rico
(Case No. 17-01578) on May 3, 2017, and was made under Title III
of
2016's U.S. Congressional rescue law known as the Puerto Rico
Oversight, Management, and Economic Stability Act ("PROMESA").
The Financial Oversight and Management Board later commenced Title
III cases for the Puerto Rico Sales Tax Financing Corporation
(COFINA) on May 5, 2017, and the Employees Retirement System (ERS)
and the Puerto Rico Highways and Transportation Authority (HTA) on
May 21. On July 2, 2017, a Title III case was commenced for the
Puerto Rico Electric Power Authority ("PREPA").
U.S. Chief Justice John Roberts has appointed U.S. District Judge
Laura Taylor Swain to oversee the Title III cases. The Honorable
Judith Dein, a United States Magistrate Judge for the District of
Massachusetts, has been designated to preside over matters that
may be referred to her by Judge Swain, including discovery
disputes, and management of other pretrial proceedings.
Joint administration of the Title III cases, under Lead Case No.
17-3283, was granted on June 29, 2017.
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; and Hermann D. Bauer, Esq., at
O'Neill & Borges are on-board as attorneys.
McKinsey & Co. is the Board's strategic consultant, Ernst & Young
is the Board's financial advisor, and Citigroup Global Markets
Inc. is the Board's municipal investment banker.
Prime Clerk LLC is the claims and noticing agent. Prime Clerk
maintains a case web site at:
https://cases.primeclerk.com/puertorico
Epiq Bankruptcy Solutions LLC is the service agent for ERS, HTA,
and PREPA.
O'Melveny & Myers LLP is counsel to the Commonwealth's Puerto Rico
Fiscal Agency and Financial Advisory Authority (AAFAF), the agency
responsible for negotiations with bondholders.
The Oversight Board named Professor Nancy B. Rapoport as fee
examiner and to chair a committee to review professionals' fees.
Bondholders' Attorneys
Toro, Colon, Mullet, Rivera & Sifre, P.S.C. and Kramer Levin
Naftalis & Frankel LLP serve as counsel to the Mutual Fund Group,
comprised of mutual funds managed by Oppenheimer Funds, Inc.,
Franklin Advisers, Inc., and the First Puerto Rico Family of
Funds,
which collectively hold over $3.5 billion in COFINA Bonds
and over $2.9 billion in other bonds issued by Puerto Rico and
other instrumentalities, including over $1.8 billion of Puerto
Rico
general obligation bonds ("GO Bonds").
White & Case LLP and Lopez Sanchez & Pirillo LLC represent the UBS
Family of Funds and the Puerto Rico Family of Funds, which hold
$613.3 million in COFINA bonds.
Paul, Weiss, Rifkind, Wharton & Garrison LLP, Robbins, Russell,
Englert, Orseck, Untereiner & Sauber LLP, and Jimenez, Graffam &
Lausell are co-counsel to the ad hoc group of General Obligation
Bondholders, comprised of Aurelius Capital Management, LP,
Autonomy
Capital (Jersey) LP, FCO Advisors LP, Franklin Mutual
Advisers LLC, Monarch Alternative Capital LP, Senator Investment
Group LP, and Stone Lion Capital Partners L.P.
Quinn Emanuel Urquhart & Sullivan, LLP and Reichard & Escalera are
co-counsel to the ad hoc coalition of holders of senior bonds
issued by COFINA, comprised of at least 30 institutional holders,
including Canyon Capital Advisors LLC and Varde Investment
Partners, L.P.
Correa Acevedo & Abesada Law Offices, P.S.C., is counsel to Canyon
Capital Advisors, LLC, River Canyon Fund Management, LLC, Davidson
Kempner Capital Management LP, OZ Management, LP, and OZ
Management
II LP (the QTCB Noteholder Group).
Committees
The U.S. Trustee formed a nine-member Official Committee of
Retirees and a seven-member Official Committee of Unsecured
Creditors of the Commonwealth. The Retiree Committee tapped
Jenner
& Block LLP and Bennazar, Garcia & Milian, C.S.P., as its
attorneys. The Creditors Committee tapped Paul Hastings LLP and
O'Neill & Gilmore LLC as counsel.
PUERTO RICO: GO Group Bid to Reconstitute Creditors Panel Denied
----------------------------------------------------------------
BankruptcyData.com reported that the U.S. Bankruptcy Court issued
a memorandum opinion and order denying the motion of the ad hoc
group of general obligation bondholders (the GO Group) to
reconstitute the official committee of unsecured creditors in the
bankruptcy case of Puerto Rico.
The order states, "In this case, the GO Group asserts that it is
entitled to representation on the Unsecured Creditors' Committee
because the Financial Management and Oversight Board for Puerto
Rico and the Commonwealth have asserted that the Constitutional
Debtholders are unsecured creditors. However, the GO Group itself
has never conceded that it is unsecured. To the contrary, it
argues that the Constitutional Debt is protected by a statutory
lien on 'all available resources' of the Commonwealth. The GO
Group cannot have it both ways. Its legal stance is fundamentally
at odds with that of the general unsecured creditors, rendering it
entirely unsuitable as a representative of those creditors'
interests. Furthermore, even if the Constitutional Debtholders'
contingent unsecured claim were a proper basis for service on the
Unsecured Creditors' Committee, the Constitutional Debtholders
have not established a lack of adequate representation as required
by Section 1102 of the Bankruptcy Code. The Constitutional
Debtholders have retained sophisticated counsel and have regularly
and actively participated on a broad range of issues in these
Title III cases. These actions demonstrate that they are already
adequately represented and that the appointment of an additional
statutory committee is unwarranted."
The Court also denied the University of Puerto Rico Retirement
System Trust's motion for an additional committee of government
employees and active pension plan participants or, in the
alternative, for the reconstitution of the official retiree
committee as well as the ad hoc group of municipalities
committee's motion for an order directing the appointment of an
official Puerto Rico municipalities committee.
About Puerto Rico
Puerto Rico is a self-governing commonwealth in association with
the United States that's facing a massive bond debt of $70
billion, a 68% debt-to-GDP ratio and negative economic growth in
nine of the last 10 years.
The Commonwealth of Puerto Rico has sought bankruptcy protection,
aiming to restructure its massive $74 billion debt-load and $49
billion in pension obligations.
The debt restructuring petition was filed by Puerto Rico's
financial oversight board in U.S. District Court in Puerto Rico
(Case No. 17-01578) on May 3, 2017, and was made under Title III
of 2016's U.S. Congressional rescue law known as the Puerto Rico
Oversight, Management, and Economic Stability Act ("PROMESA").
The Financial Oversight and Management Board later commenced Title
III cases for the Puerto Rico Sales Tax Financing Corporation
(COFINA) on May 5, 2017, and the Employees Retirement System (ERS)
and the Puerto Rico Highways and Transportation Authority (HTA) on
May 21. On July 2, 2017, a Title III case was commenced for the
Puerto Rico Electric Power Authority ("PREPA").
U.S. Chief Justice John Roberts has appointed U.S. District Judge
Laura Taylor Swain to oversee the Title III cases. The Honorable
Judith Dein, a United States Magistrate Judge for the District of
Massachusetts, has been designated to preside over matters that
may be referred to her by Judge Swain, including discovery
disputes, and management of other pretrial proceedings.
Joint administration of the Title III cases, under Lead Case No.
17-3283, was granted on June 29, 2017.
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; and Hermann D. Bauer, Esq., at
O'Neill & Borges are on-board as attorneys.
McKinsey & Co. is the Board's strategic consultant, Ernst & Young
is the Board's financial advisor, and Citigroup Global Markets
Inc. is the Board's municipal investment banker.
Prime Clerk LLC is the claims and noticing agent. Prime Clerk
maintains a case web site at:
https://cases.primeclerk.com/puertorico
Epiq Bankruptcy Solutions LLC is the service agent for ERS, HTA,
and PREPA.
O'Melveny & Myers LLP is counsel to the Commonwealth's Puerto Rico
Fiscal Agency and Financial Advisory Authority (AAFAF), the agency
responsible for negotiations with bondholders.
The Oversight Board named Professor Nancy B. Rapoport as fee
examiner and to chair a committee to review professionals' fees.
Bondholders' Attorneys
Toro, Colon, Mullet, Rivera & Sifre, P.S.C. and Kramer Levin
Naftalis & Frankel LLP serve as counsel to the Mutual Fund Group,
comprised of mutual funds managed by Oppenheimer Funds, Inc.,
Franklin Advisers, Inc., and the First Puerto Rico Family of
Funds, which collectively hold over $3.5 billion in COFINA Bonds
and over $2.9 billion in other bonds issued by Puerto Rico and
other instrumentalities, including over $1.8 billion of Puerto
Rico general obligation bonds ("GO Bonds").
White & Case LLP and Lopez Sanchez & Pirillo LLC represent the UBS
Family of Funds and the Puerto Rico Family of Funds, which hold
$613.3 million in COFINA bonds.
Paul, Weiss, Rifkind, Wharton & Garrison LLP, Robbins, Russell,
Englert, Orseck, Untereiner & Sauber LLP, and Jimenez, Graffam &
Lausell are co-counsel to the ad hoc group of General Obligation
Bondholders, comprised of Aurelius Capital Management, LP,
Autonomy Capital (Jersey) LP, FCO Advisors LP, Franklin Mutual
Advisers LLC, Monarch Alternative Capital LP, Senator Investment
Group LP, and Stone Lion Capital Partners L.P.
Quinn Emanuel Urquhart & Sullivan, LLP and Reichard & Escalera are
co-counsel to the ad hoc coalition of holders of senior bonds
issued by COFINA, comprised of at least 30 institutional holders,
including Canyon Capital Advisors LLC and Varde Investment
Partners, L.P.
Correa Acevedo & Abesada Law Offices, P.S.C., is counsel to Canyon
Capital Advisors, LLC, River Canyon Fund Management, LLC, Davidson
Kempner Capital Management LP, OZ Management, LP, and OZ
Management
II LP (the QTCB Noteholder Group).
Committees
The U.S. Trustee formed a nine-member Official Committee of
Retirees and a seven-member Official Committee of Unsecured
Creditors of the Commonwealth. The Retiree Committee tapped
Jenner & Block LLP and Bennazar, Garcia & Milian, C.S.P., as its
attorneys. The Creditors Committee tapped Paul Hastings LLP and
O'Neill & Gilmore LLC as counsel.
=================
V E N E Z U E L A
=================
VENEZUELA: US Prohibits Dealings in New Debt Issued by Ven. Gov't.
------------------------------------------------------------------
EFE News reports that US President Donald Trump signed an
executive order that bars dealings in new debt and equity issued
by the Venezuelan government and that nation's state oil company,
PDVSA, the White House press secretary said in a statement.
The measure also "prohibits dealings in certain existing bonds
owned by the Venezuelan public sector, as well as dividend
payments to the government of Venezuela," Sarah Huckabee Sanders
said, according to EFE News.
The report notes that the move is the latest action by the United
States aimed at heaping pressure on lefist Venezuelan President
Nicolas Maduro's administration, which the opposition and several
foreign governments say has moved to consolidate a dictatorship.
"To mitigate harm to the American and Venezuelan people, the
Treasury Department is issuing general licenses that allow for
transactions that would otherwise be prohibited by the executive
order," the White House statement added, notes the report.
It said those licenses would include "provisions allowing for a
30-day wind-down period; financing for most commercial trade,
including the export and import of petroleum; transactions only
involving Citgo; dealings in select existing Venezuelan debts; and
the financing for humanitarian goods to Venezuela."
"These measures are carefully calibrated to deny the Maduro
dictatorship a critical source of financing to maintain its
illegitimate rule, protect the United States financial system from
complicity in Venezuela's corruption and in the impoverishment of
the Venezuelan people, and allow for humanitarian assistance," the
statement said, reports EFE.
According to the report, shortly before the announcement, US Vice
President Mike Pence said the Trump administration would be taking
forceful action against Maduro's government.
The US and many of Venezuela's regional neighbors have been
harshly critical in recent months of Maduro's push to create a
National Constituent Assembly (ANC), the report recalls.
That plenipotentiary body, which was inaugurated early this month
after a process boycotted by Maduro's opponents, has taken over
the functions of the unicameral legislature, the National
Assembly, the only institution in the opposition's control, EFE
notes.
Maduro has touted the ANC as necessary to lift Venezuela, which
had been racked by months of violent opposition-led protests, out
of political deadlock and a deep economic crisis, the report
relates.
But Venezuela's opposition, which has been stymied in its efforts
to oust Maduro via a recall referendum, says it is merely a
mechanism to increase the president's stranglehold on power,
according to EFE.
The US government has been referring to Maduro's government as a
"dictatorship" since the election of the ANC's members on July 30,
the report further adds.
"As @POTUS (Trump) said, we will not stand by as Venezuela
crumbles. The birthright of the Venezuelan people has always been
& will always be libertad," Pence tweeted, using the Spanish word
for freedom, the report relays.
The US had earlier imposed sanctions on Venezuelan officials,
including Maduro, but thus far it has stopped short of directly
targeting the country's oil sector, the lifeblood of its economy,
EFE reports.
As reported on Troubled Company Reporter-Latin America on July 13,
2017, S&P Global Ratings lowered its long-term foreign and local
currency sovereign credit ratings on the Bolivarian Republic of
Venezuela to 'CCC-' from 'CCC'. The outlook on the long-term
ratings is negative. S&P said, "We affirmed our 'C' short-term
foreign and local currency sovereign ratings. In addition, we
lowered our transfer and convertibility assessment on the
sovereign to 'CCC-' from 'CCC'."
VENEZUELA: Investors Unmoved Despite Sanctions Threat
-----------------------------------------------------
The Financial Times reports that the threat of US sanctions
against Nicolas Maduro's regime in Venezuela escalated, with vice-
president Mike Pence warning of "more to come".
But investors appeared unmoved, notes the report. While bond
prices initially dipped on reports that new sanctions could ban
trading in new issues from the Venezuelan government and state oil
group Petroleos de Venezuela (PDVSA), several of the bonds
rebounded, according to The Financial Times. Three of the top 10
performing emerging market corporate bonds were issued by PDVSA,
according to MarketAxess, while some $3 billion of Venezuelan
government debt maturing in August 2022 advanced more than 3 per
cent, the report notes.
Despite the possibility that Venezuela will be cut off from US
debt markets, investors say that was already part of their
considerations when holding the debt, the report relays. Most of
the bondholders are sophisticated distressed debt investors and
hedge funds, betting that China and Russia will remain a backstop,
the report says.
The sanctions could prompt some banks to pull out altogether from
Venezuelan debt trading in an attempt to avoid the reputational
risk of being seen to aid the Maduro administration, the report
discloses. But some investors say that without limits on trading
in the nearly $100 billion of existing debt, they could continue
to complete transactions through dark pools or through broker
dealers outside of the US, the report relays.
There are at least two issues confronting investors as they try to
understand Mr. Maduro's thinking, the report notes. The first is
how sanctions would complicate a restructuring should Venezuela
decide that the time has come to default, the report relays.
Peter Harrell, who helped develop sanctions policy at the US
Department of State under President Barack Obama, notes that any
restructuring would probably require the issuance of new debt or
tweaks to existing debt, and therefore need US approval, the FT
relays. That is something the Trump administration would probably
refuse, the report adds.
The other is the sharp losses money managers have already
sustained this year, the report relays. After double-digit
returns in 2015 and 2016, investors holding the debt are down 16.5
per cent over the past three months, according to Bloomberg
Barclays Indices, the report notes. Those are losses that may
shake some investors as Venezuela's next payment looms, the report
adds.
As reported on Troubled Company Reporter-Latin America on July 13,
2017, S&P Global Ratings lowered its long-term foreign and local
currency sovereign credit ratings on the Bolivarian Republic of
Venezuela to 'CCC-' from 'CCC'. The outlook on the long-term
ratings is negative. S&P said, "We affirmed our 'C' short-term
foreign and local currency sovereign ratings. In addition, we
lowered our transfer and convertibility assessment on the
sovereign to 'CCC-' from 'CCC'."
=================
X X X X X X X X X
=================
* BOND PRICING: For the Week From Aug. 21 to Aug. 25, 2017
---------------------------------------------------------
Issuer Name Cpn Price Maturity Country Curr
----------- --- ----- -------- ------- ---
BA-CA Finance Cayman Lt 0.518 62.07 KY EUR
CSN Islands XII Corp 7 68 BR USD
CSN Islands XII Corp 7 67.75 BR USD
Decimo Primer Fideicomi 4.54 52.63 10/25/2041 PA USD
Decimo Primer Fideicomi 6 63.5 10/25/2041 PA USD
Dolomite Capital Ltd 13.26 67.2 12/20/2019 CN ZAR
Empresa de Telecomunica 7 73.14 1/17/2023 CO COP
Empresa de Telecomunica 7 73.14 1/17/2023 CO COP
ESFG International Ltd 5.75 0.66 KY EUR
General Shopping Financ 10 72.5 KY USD
General Shopping Financ 10 71.7 KY USD
Global A&T Electronics 10 74 2/1/2019 SG USD
Global A&T Electronics 10 74.5 2/1/2019 SG USD
Global A&T Electronics 10 65.5 2/1/2019 SG USD
Global A&T Electronics 10 65 2/1/2019 SG USD
Gol Finance 8.75 63 BR USD
Gol Finance 8.75 63.88 BR USD
Gol Linhas Aereas SA 10.75 34.63 2/12/2023 BR USD
Gol Linhas Aereas SA 10.75 34.63 2/12/2023 BR USD
Inversora Electrica de 6.5 55 9/26/2017 AR USD
Inversora Electrica de 6.5 55 9/26/2017 AR USD
MIE Holdings Corp 7.5 75.16 4/25/2019 HK USD
MIE Holdings Corp 7.5 75.26 4/25/2019 HK USD
NB Finance Ltd/Cayman I 3.88 58.01 2/7/2035 KY EUR
Newland International P 9.5 19.88 7/3/2017 PA USD
Newland International P 9.5 19.88 7/3/2017 PA USD
Noble Holding Internati 5.25 72.98 3/15/2042 KY USD
Ocean Rig UDW Inc 7.25 39 4/1/2019 CY USD
Ocean Rig UDW Inc 7.25 38 4/1/2019 CY USD
Odebrecht Drilling Norb 6.35 48.5 6/30/2021 KY USD
Odebrecht Drilling Norb 6.35 47.25 6/30/2021 KY USD
Odebrecht Finance Ltd 7.5 49 KY USD
Odebrecht Finance Ltd 4.3 48.29 4/25/2025 KY USD
Odebrecht Finance Ltd 7.12 48.2 6/26/2042 KY USD
Odebrecht Finance Ltd 5.25 46.15 6/27/2029 KY USD
Odebrecht Finance Ltd 7 57.02 4/21/2020 KY USD
Odebrecht Finance Ltd 5.12 53.51 6/26/2022 KY USD
Odebrecht Finance Ltd 8.25 70.88 4/25/2018 KY BRL
Odebrecht Finance Ltd 6 51.47 4/5/2023 KY USD
Odebrecht Finance Ltd 5.25 45.92 6/27/2029 KY USD
Odebrecht Finance Ltd 7.1 47.82 6/26/2042 KY USD
Odebrecht Finance Ltd 7.5 49.25 KY USD
Odebrecht Finance Ltd 4.3 48.39 4/25/2025 KY USD
Odebrecht Finance Ltd 6 51.77 4/5/2023 KY USD
Odebrecht Finance Ltd 8.2 70.88 4/25/2018 KY BRL
Odebrecht Finance Ltd 7 56.85 4/21/2020 KY USD
Odebrecht Finance Ltd 5.1 52.99 6/26/2022 KY USD
Odebrecht Offshore Dril 6.6 39.64 10/1/2022 KY USD
Odebrecht Offshore Dril 6.7 36.44 10/1/2022 KY USD
Odebrecht Offshore Dril 6.6 38.79 10/1/2022 KY USD
Odebrecht Offshore Dril 6.7 38.75 10/1/2022 KY USD
Petroleos de Venezuela 12.75 67.19 2/17/2022 VE USD
Petroleos de Venezuela 9 58.28 11/17/2021 VE USD
Petroleos de Venezuela 6 40.32 5/16/2024 VE USD
Petroleos de Venezuela 9.75 50.15 5/17/2035 VE USD
Petroleos de Venezuela 6 38.22 11/15/2026 VE USD
Petroleos de Venezuela 5.37 37.39 4/12/2027 VE USD
Petroleos de Venezuela 5.5 37.1 4/12/2037 VE USD
Petroleos de Venezuela 6 41.25 10/28/2022 VE USD
Petroleos de Venezuela 6 40.01 5/16/2024 VE USD
Petroleos de Venezuela 9 58.11 11/17/2021 VE USD
Petroleos de Venezuela 6 38.13 11/15/2026 VE USD
Petroleos de Venezuela 12.75 67.2 2/17/2022 VE USD
Petroleos de Venezuela 9.75 49.94 5/17/2035 VE USD
Polarcus Ltd 5.6 60 3/30/2022 AE USD
Siem Offshore Inc 5.8 49.75 1/30/2018 NO NOK
Siem Offshore Inc 5.59 50.25 3/28/2019 NO NOK
STB Finance Cayman Ltd 2.04 58.35 KY JPY
Sylph Ltd 2.36 50.93 9/25/2036 KY USD
Uruguay Notas del Tesor 5.25 68.02 12/29/2021 UY UYU
US Capital Funding IV L 1.25 51.35 12/1/2039 KY USD
US Capital Funding IV L 1.25 51.35 12/1/2039 KY USD
USJ Acucar e Alcool SA 9.87 67.5 11/9/2019 BR USD
USJ Acucar e Alcool SA 9.87 65.75 11/9/2019 BR USD
Venezuela Government In 9.25 48.75 5/7/2028 VE USD
Venezuela Government In 13.63 82.58 8/15/2018 VE USD
Venezuela Government In 9 51.75 5/7/2023 VE USD
Venezuela Government In 9.37 49 1/13/2034 VE USD
Venezuela Government In 7 71.88 12/1/2018 VE USD
Venezuela Government In 9.25 52 9/15/2027 VE USD
Venezuela Government In 7.65 46.38 4/21/2025 VE USD
Venezuela Government In 13.63 82.58 8/15/2018 VE USD
Venezuela Government In 7.75 61.75 10/13/2019 VE USD
Venezuela Government In 11.95 58.13 8/5/2031 VE USD
Venezuela Government In 6 53.75 12/9/2020 VE USD
Venezuela Government In 12.75 67 8/23/2022 VE USD
Venezuela Government In 7 44 3/31/2038 VE USD
Venezuela Government In 6.5 36.53 12/29/2036 VE USD
Venezuela Government In 8.25 47.75 10/13/2024 VE USD
Venezuela Government In 11.75 57.75 10/21/2026 VE USD
Venezuela Government TI 5.25 69.59 3/21/2019 VE USD
***********
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, Julie Anne L. Toledo, Ivy B. Magdadaro, and Peter A.
Chapman, Editors.
Copyright 2017. 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 Joseph Cardillo at
856-381-8268.
* * * End of Transmission * * *