/raid1/www/Hosts/bankrupt/TCRLA

/raid1/www/Hosts/bankrupt/TCRLA_Public/170929.mbx T R O U B L E D C O M P A N Y R E P O R T E R L A T I N A M E R I C A Friday, September 29, 2017, Vol. 18, No. 194 Headlines A R G E N T I N A AEROPUERTOS ARGENTINA: S&P Affirms 'B+' CCR, Outlook Stable ALGODON WINES: Obtained $314,400 from Preferred Shares Offering B R A Z I L ENGIE BRASIL: Hydro Plants Purchase No Impact on Fitch BB+ IDR C A Y M A N I S L A N D S CHINA FISHERY: Trustee Asks Judge to Reaffirm Power to Probe HSBC C O L O M B I A BANCOLOMBIA SA: Fitch to Rate USD Subordinated Notes 'BB+' BANCOLOMBIA SA: Moody's Assigns Ba3 Rating to USD Sub. Notes D O M I N I C A N R E P U B L I C DOMINICAN REPUBLIC: Hurricane Damages Thousands of Dwellings E L S A L V A D O R AES EL SALVADOR: Fitch Affirms 'CCC' LT Issuer Default Rating M E X I C O MEXICO: City Residents Remain Homeless After Earthquake TABASCO: Moody's Affirms Ba1 Issuer Rating; Outlook Negative P E R U CORPORACION AZUCARERA: Fitch Cuts Issuer Default Rating to BB- P U E R T O R I C O PUERTO RICO: In Ruins, Bondholders Offer Cash for Gains PUERTO RICO: Seeks Immediate Aid From US Congress After Hurricane TOYS "R" US: Closes $3.1-Billion Financing Facilities VIA NIZA: Disclosures OK'd; Plan Confirmation Hearing on Nov. 14 V E N E Z U E L A VENEZUELA: Maduro Regime Sanctioned Twice in 48 Hours - - - - - ================= A R G E N T I N A ================= AEROPUERTOS ARGENTINA: S&P Affirms 'B+' CCR, Outlook Stable ----------------------------------------------------------- S&P Global Ratings affirmed its 'B+' corporate credit and issue- level ratings on Aeropuertos Argentina 2000 (AA2000), and its 'bb+' stand-alone credit profile (SACP). The outlook remains stable. S&P said, "Our ratings affirmation reflects our view that AA2000's credit quality continues to be limited by that of the sovereign, although it would be able to withstand a hypothetical sovereign stress scenario given its strong cash flow generation. The company has significant dependence on the regulator, which defines concession terms, sets aeronautical tariffs, and mandates investments. The rating also reflects our view of AA2000 as a core entity to Corporaci¢n America (its holding company, not publicly rated), given that AA2000 is integral to the group's strategy and represents most of its EBITDA generation. "Moreover, AA2000's 'bb+' SACP reflects our expectations of strong operating and financial performance amid high passenger growth levels in the next few years, with about 80% dollar-linked cash flow generation that will allow the company to post high interest coverage metrics (above 10x). It will accordingly show positive free cash flow generation, considering its demanding capital expenditures (capex) plan. "Following the successful issuance of its $400 million bond in February 2017, AA2000 is executing significant capex, above our previous expectations, related to improving and expanding the infrastructure of its airports in the country." ALGODON WINES: Obtained $314,400 from Preferred Shares Offering --------------------------------------------------------------- Between July 7, 2017 and July 24, 2017, Algodon Wines & Luxury Development Group, Inc. issued 31,440 shares of Series B Convertible Preferred Stock for cash proceeds of $314,400 to accredited investors. Holders of Series B Preferred will be entitled to, among other things, an annual dividend, liquidation preference, conversion to common stock of the Company upon certain events, redemption if not previously converted to common stock, and voting privileges. For this sale of securities, no general solicitation was used, no commissions were paid, and the Company relied on the exemption from registration available under Section 4(a)(2) and Rule 506(b) of Regulation D of the Securities Act of 1933, as amended. An initial Form D was filed on April 7, 2017, an amended Form D was filed on June 15, 2017, an amended Form D was filed on June 29, 2017, an amended Form D was filed on July 12, 2017, and an amended Form D was filed on July 27, 2017. About Algodon Wines Through its wholly-owned subsidiaries, Algodon Wines & Luxury Development Group, Inc. -- http://www.algodongroup.com/-- invests in, develops and operates real estate projects in Argentina. AWLD operates a hotel, golf and tennis resort, vineyard and producing winery in addition to developing residential lots located near the resort. The activities in Argentina are conducted through its operating entities: InvestProperty Group, LLC, Algodon Global Properties, LLC, The Algodon - Recoleta S.R.L, Algodon Properties II S.R.L., and Algodon Wine Estates S.R.L. AWLD distributes its wines in Europe through its United Kingdom entity, Algodon Europe, LTD. Marcum LLP, in New York, issued a "going concern" qualification on the consolidated financial statements for the year ended Dec. 31, 2016, citing that the Company has incurred significant losses and needs to raise additional funds to meet its obligations and sustain its operations. These conditions raise substantial doubt about the Company's ability to continue as a going concern. Algodon Wines reported a net loss of $10.04 million on $1.52 million of sales for the year ended Dec. 31, 2016, compared to a net loss of $8.27 million on $1.86 million of sales for the year ended Dec. 31, 2015. As of June 30, 2017, Algodon Wines had $8.07 million in total assets, $4.14 million in total liabilities, $4.80 million in series B convertible redeemable preferred stock and a total stockholders' deficiency of $880,859. =========== B R A Z I L =========== ENGIE BRASIL: Hydro Plants Purchase No Impact on Fitch BB+ IDR -------------------------------------------------------------- Fitch Ratings believes that Engie Brasil S.A.'s acquisition of the concessions of two hydroelectric power generation plants (Jaguara and Miranda) will not materially affect its credit profile. The company was the winner of the auctions conducted by Agencia Nacional de Energia Eletrica for two out of four operating assets which added to its portfolio total installed capacity of 832 MW. The total disbursement through a concession fee payment of BRL3.5 billion is scheduled for Nov. 30, 2017. Fitch rates Engie Brasil's Long-Term Local Currency Issuer Default Rating 'BBB'/Outlook Negative; Long-Term Foreign Currency IDR 'BB+/Outlook Negative; and Long-term National Scale rating 'AAA(bra)'/Outlook Stable. In Fitch's opinion, Engie Brasil will be able to sustain its solid financial profile despite the expectation that the concession fee payment will be financed entirely by debt. Fitch believes the company's leverage will remain low for the power generation segment and it will retain its sound liquidity position. Engie Brasil has strong financial flexibility to meet this concession fee obligation due to its favorable track record of raising long- term credit lines, preserving a lengthened debt maturity profile. In addition, Jaguara and Miranda assets are in a mature stage and will add to portfolio diversification. Fitch expects an annual EBITDA contribution of around BRL427 million and low capex needs, assuming an average energy sale tariff of around BRL124/MWh and EBITDA margin of 80%. On a pro forma basis considering the concession fee payment and the additional EBITDA, net financial leverage measured by net debt-to-EBITDA would increase to 1.4x from 0.5x. At the end of June 2017, the company's consolidated debt and cash were BRL3.2 billion and BRL1.5 billion, respectively, while EBITDA in the LTM totalled BRL3.3 billion. Fitch base case scenario continues to be that net financial leverage should not exceed 3.0x in the next three years, even incorporating the potential acquisition of 40% of the Jirau hydroelectric plant, with an installed capacity of 3,750 MW. Engie Brasil's ratings are supported by its prominent market position as the largest private power-generation company in Brazil. The company's total installed capacity of 7,070 MW via 31 power plants will increase by 11.8% with the Jaguara and Miranda acquisitions. The company benefits from its positive operational efficiency and the existence of long-term power purchase agreements with its clients. To a lesser extent, Fitch's analysis reflects the sector expertise of its parent company, Engie S.A., as a relevant global power player. ========================== C A Y M A N I S L A N D S ========================== CHINA FISHERY: Trustee Asks Judge to Reaffirm Power to Probe HSBC ----------------------------------------------------------------- Tom Corrigan, writing for The Wall Street Journal Pro Bankruptcy, reported that William Brandt, Jr., the court-appointed trustee in charge of China Fishery Group Ltd., has asked the U.S. Bankruptcy Court in New York to reaffirm his power to investigate HSBC Ltd., which he is investigating for aggressive collection tactics that allegedly had a "severely negative impact" on the fishing enterprise. According to the report, Mr. Brandt has been largely successful in the long-running row with HSBC, winning a court order in July from Judge James Garrity Jr. allowing him to investigate the bank for collection efforts that Mr. Brandt said may have stunted China Fishery's operations. Mr. Brandt said HSBC is now "trying to delay compliance" with the judge's order, refusing to accept subpoenas for documents or to respond to other requests for information related to the probe, the report related. In court papers, HSBC, which said it is owed more than $100 million, has asked Judge Garrity for a temporary reprieve from the investigation while it pursues an appeal, the report further related. HSBC said it would otherwise suffer "irreparable harm" from a "costly and invasive" process that it may be shut down by a higher court, the report said. A hearing on the matter was set for Sept. 28. About China Fishery Group Limited (Cayman) China Fishery Group Limited (Cayman) and its affiliates sought protection under Chapter 11 of the Bankruptcy Code (Bankr. S.D.N.Y. Lead Case No. 16-11895) on June 30, 2016. The petition was signed by Ng Puay Yee, chief executive officer. The cases are assigned to Judge James L. Garrity Jr. At the time of the filing, China Fishery Group estimated its assets at $500 million to $1 billion and debts at $10 million to $50 million. Weil, Gotshal & Manges LLP has been tapped to serve as lead bankruptcy counsel for China Fishery and its affiliates other than CFG Peru Investments Pte. Limited (Singapore). Weil Gotshal replaces Meyer, Suozzi, English & Klein, P.C., the law firm initially hired by the Debtors. The Debtors have also tapped Klestadt Winters Jureller Southard & Stevens, LLP as conflict counsel; Goldin Associates, LLC, as financial advisor; RSR Consulting LLC as restructuring consultant; and Epiq Bankruptcy Solutions, LLC, as administrative agent. Kwok Yih & Chan serves as special counsel. On Nov. 10, 2016, William Brandt, Jr., was appointed as Chapter 11 trustee for CFG Peru Investments Pte. Limited (Singapore), one of the Debtors. Skadden, Arps, Slate, Meagher & Flom LLP serves as the trustee's bankruptcy counsel; Hogan Lovells US LLP serves as special counsel; and Quinn Emanuel Urquhart & Sullivan, LLP, serves as special litigation counsel. =============== C O L O M B I A =============== BANCOLOMBIA SA: Fitch to Rate USD Subordinated Notes 'BB+' ---------------------------------------------------------- Fitch Ratings expects to assign a 'BB+' rating to Bancolombia's upcoming U.S. dollar subordinated notes. The notes (for an amount to be determined) will pay a fixed interest to be set at the time of the issuance. The notes will mature on 2027, and interest payments will be made semi-annually until maturity. The final rating is contingent on receipt of final documents conforming materially to the preliminary documentation. KEY RATING DRIVERS SUBORDINATED DEBT The upcoming issuance is expected to be rated two notches below Bancolombia's VR of 'bbb', to reflect loss severity exclusively. There will be no notching due to incremental non-performance risk. While these securities rank pari passu with other existing subordinated indebtedness, the loss severity notching is wider on the proposed notes, due to the existence of a full write-down feature, which is not contained in other outstanding subordinated debt. The notes do not incorporate going-concern loss-absorption characteristics given the relatively low write-off trigger (Regulatory CET1 at or below 4.5%), which in Fitch's view would only be effective at the point of non-viability, and also considering the fact that coupons are not deferred or cancellable before the principal write-off trigger is activated. As such, no notches are deducted from the VR for incremental non-performance risk. If Bancolombia's capital ratio falls below 4.5%, the outstanding principal amount of these notes may be permanently reduced to the extent required to restore the bank's capital ratio to 6%. The securities, which are expected to comply with local Tier II capital requirements, will rank junior to all senior unsecured creditors but will be senior to the bank's capital stock, including any other instrument that may qualify as Tier I capital according to local banking regulation. Bancolombia will use the proceeds of the issuance of the notes to replace a portion of the existing 6.125% Subordinated notes due 2020 and 5.125% Subordinated notes due 2022; strengthen its regulatory capital structure, regulatory compliance and general corporate purposes. RATING SENSITIVITIES The expected subordinated debt rating is sensitive to a change in Bancolombia's VR. The rating is also sensitive to a wider notching from the VR if there is a change in Fitch's view on the non- performance of these instruments on a going concern basis, which is not the baseline scenario. For further information about the drivers and rating sensitivities for Bancolombia's VR and other issuer ratings, please check the bank's latest press release (Fitch Affirms Bancolombia and Related Entities' Ratings; Outlook Revised to Stable) at www.fitchratings.com. BANCOLOMBIA SA: Moody's Assigns Ba3 Rating to USD Sub. Notes ------------------------------------------------------------ Moody's Investors Service has assigned a Ba3 (hyb) rating to the proposed USD-denominated non-viability Tier 2 subordinated notes of Bancolombia S.A. (Bancolombia, Baa2 stable). The terms and conditions of the securities have been defined so as to qualify them for treatment as Tier 2 capital pursuant to Colombian regulation. The rating is subject to receipt of final documentation, the terms and conditions of which are not expected to change in any material way from the draft documents that Moody's has reviewed. The following rating was assigned to Bancolombia's non-viability Tier 2 subordinated notes: -- Foreign currency subordinated debt rating of Ba3 (hyb) Moody's has not assigned an outlook to the rating of the Tier II securities. The outlook on the bank's Baa2 long-term deposit ratings is stable. RATINGS RATIONALE The assigned Ba3 (hyb) rating for the proposed Tier 2 securities is positioned two notches below Bancolombia's ba1 adjusted baseline credit assessment (BCA), in line with Moody's standard notching guidance for non-viability Tier 2 subordinated notes, reflecting the terms of the issuance, which call for the full or partial write down of principal upon the occurrence of a trigger event. However, semi-annual coupons payments cannot be suspended. Under the terms and conditions of the proposed securities, a write down will be triggered if: (1) if the bank's regulatory Basic Solvency ratio (equivalent to the CET1 ratio) falls below 4.5% (which Moody's considers to be below the point of non-viability) on either an individual (i.e. treating the bank's Central American subsidiaries as investments) or fully consolidated basis; or (2) if the supervisor determines that the Basic Solvency ratio needs to be restored to 6.0%. The notes will only be written down in an amount sufficient to restore the Basic Solvency ratio to 6% under either circumstance. In practice however, they will automatically be fully written down if the basic solvency ratio falls below 4.5% as the par amount of the notes equals just about 1% of current risk-weighted assets. The notes will rank (i) junior to all present and future senior indebtedness of the issuer, (ii) junior to all other present or future "preferred" subordinated indebtedness, (iii) pari passu with all other present or future unsecured Tier II subordinated indebtedness and (iv) senior to securities junior to the notes as well as to all classes of capital stock of the issuers. While Moody's assesses the probability that Bancolombia will receive support from the Colombian government (Baa2 stable) in a stress situation as very high given the bank's large market of domestic deposits, this support only applies to the bank's deposit and senior debt ratings. Moody's does not expect that Tier II securities - which are designed to absorb losses - will benefit from government support. WHAT COULD MOVE THE RATING UP/DOWN The rating on the securities could face downward pressure if Bancolombia's asset quality continue to deteriorate, or if the Moody's adjusted capital ratios falls by more than 100 basis points. The rating would face upward pressure if the Moody's adjusted capitalization improves by more 100 basis points on a sustainable basis while asset risk and profitability stabilizes. The principal methodology used in this rating was Banks published in September 2017. =================================== D O M I N I C A N R E P U B L I C =================================== DOMINICAN REPUBLIC: Hurricane Damages Thousands of Dwellings ------------------------------------------------------------ Dominican Today reports that flooding caused by Hurricane Maria damaged or destroyed 8,856 dwellings in the Dominican Republic, forcing more than 26,000 people from their homes and leaving 26 communities cut off from the outside world, the national emergency management office said. The torrential rains and flooding that affected a large swath of the country destroyed 188 houses and partially destroyed 861 other dwellings, according to Dominican Today. 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. ==================== E L S A L V A D O R ==================== AES EL SALVADOR: Fitch Affirms 'CCC' LT Issuer Default Rating ------------------------------------------------------------- Fitch Ratings has affirmed the Long-Term Foreign and Local Currency Issuer Default Ratings (IDRs) on AES El Salvador Trust II (AES SLV) at 'CCC'. The affirmations affect USD310 million notes due 2023, also rated 'CCC'. AES SLV's ratings are linked to the sovereign rating of El Salvador due to operational exposure to regulatory instability and a reliance on subsidies. In 2016, the company invoiced approximately USD70 million of subsidized revenues, or approximately 12% of total revenues under Fitch's base case assumptions. Changes to the subsidy system suggest that 2017 subsidies will fall by half, reducing AES SLV's exposure to around USD35 million and 6% of total revenues. To date, the company has not received any payments on subsidy amounts invoiced in 2017. Fitch sees volume risk and an increase in non-technical losses as likely consequences to the reduced reliability of the subsidy system. The ratings also reflect AES SLV's fundamental sensitivity to additional cost absorption on the part of end-users in the event subsidies are suspended or remain unpaid. The company has some short-term flexibility in managing payments to generators, offsetting lower government receipts by extending its own payable days, as they did in 2016. Additionally, AES SLV can create some liquidity headroom by deferring some of its capex during the next two years with minimal impact to operational fidelity. KEY RATING DRIVERS Cash Flow Exposure to Government Subsidies: AES SLV's ratings are linked to the sovereign rating of El Salvador due to operational exposure to regulatory instability and a reliance on subsidies. In 2016, the company invoiced approximately USD70 million of subsidized revenues, or approximately 12% of total revenues under Fitch's base case assumptions. Changes to the subsidy system suggest that 2017 subsidies should fall by half, reducing AES SLV's exposure to around USD35 million and 6% of total revenues, or 30-40% of EBITDA. Political Polarization Creates Uncertainty: Fitch considers that, as a social welfare system, the energy subsidies could easily be a target for the right-wing opposition party. To-date, the distribution companies (DisCos) have yet to receive any of their invoiced subsidies for 2017. Similarly, in 2016 the company accumulated 6 months of receivables before finally being paid with proceeds from a government bond issuance in February 2017. Fitch sees volume risk and an increase in non-technical losses as likely consequences to the reduced reliability of the subsidy system. Potential Cost Mismatch: AES SLV is fundamentally sensitive to the capacity for additional cost absorption on the part of end-users in the event that subsidies are suspended or remain unpaid. The company has some short-term flexibility in managing payments to generators, offsetting lower government receipts by extending its own payable days, as they did in 2016. Additionally, AES SLV can create liquidity headroom by deferring some of its capex for up to two years with minimal impact to operational fidelity. However, these measures are not feasible beyond the short term. Political Solutions Strictly Short-term: AES SLV's management is engaged in ongoing negotiations with the government to resolve outstanding subsidy-related receivables. One proposal involves repackaging receivables as debt payable by the government, similar to what the AES generators did in the Dominican Republic in 2015. However, given the complex legislative approvals necessary to ratify such a plan, it is looking less likely. Moreover, recent pronouncements by the Supreme Court could materially reduce the government's already-limited budgetary flexibility, with capital markets funding looking like most likely outcome. There are ostensibly local and external debt issuance options. Local treasury notes (Letras del Tesoro; LETEs) can be approved with a simple majority, and technically there is capacity for approximately USD1 billion of issuance under such a program. This liquidity source is constrained, however, by soft local demand. Issuing international debt, on the other hand, requires a supermajority in congress, which, in light of the country's highly polarized political climate, presents its own procedural challenges. In any event, these options do little to address the government's underlying budgetary shortfalls, including a long- term solution to its subsidy obligations. Capital Structure Partially Mitigates Liquidity Pressure: With nearly 95% of its financial debt maturing in 2023, AES SLV's near- term financial obligations are essentially limited to operating costs and interest. Consequently, if there are liquidity shortfalls, they should be sufficiently small to facilitate access to short-term credit. The company already maintains a committed credit facility of USD16.5 million, of which 7 million remained undrawn as of December 2016. According to the issuer, it has additional debt capacity of USD36 million under its covenant. DERIVATION SUMMARY AES El Salvador Trust II (AES SLV) financial forecast is weaker than its regional DisCo peers. Historically, it has benefited from EBTIDA margins in line with its regional peers Energuate Trust (BB/ Stable), Eletropaulo Metropolitana Electricidade de Sao Paolo S.A. (BB/Stable), and Elektra Noreste S.A. (BBB/Stable), as well comparatively better rates of technical and non-technical losses. However, recent problems collecting amounts owed by the Salvadoran government (CCC) under El Salvador's energy subsidy program are expected to put downward pressure on cash flows. Suspension of the subsidy program could lead to lower EBITDA, reflecting higher levels of theft and lower demand. Alternately continued delays in the subsidy system could put pressure on generators to reduce supply, which would also ultimately negatively impact EBITDA for the Salvadoran DisCos. KEY ASSUMPTIONS Fitch's key assumptions within Fitch ratings case for the issuer include: - Demand growth of approximately 2%, roughly in line with CDP - 7% decrease in demand in 2018, assuming the temporary suspension of subsidies - Assumes 50% uncollectible amounts related to government subsidies in 2017 - ~USD35 million of annual capex through the rating horizon, in line with historical levels RATING SENSITIVITIES Future Developments That May, Individually or Collectively, Lead to Positive Rating Action - AES El Salvador's ratings could be positively affected by clear signals of sustainable independence from the government funding, or indications of reliable government receipts through the medium term. Future Developments That May, Individually or Collectively, Lead to Negative Rating Action - AES El Salvador's ratings could be negatively affected by any combination of the following factors: continued failure to resolve the issue of subsidy funding sources or effectively pass through shortfalls to the end-user; shortages of electricity supply resulting in lower consumption and lower cash flow generation; or further political or regulatory intervention that negatively affects the company's financial performance. LIQUIDITY AES El Salvador's liquidity is supported by its cash on hand, which as of year-end 2016 was approximately USD39 million, and USD43 million bank credit facilities, of which USD16.5 million are committed. To date, the company has accessed USD9.5 million from its committed credit line. Fitch expects liquidity to be affected as delays in government receipts continue to grow. In addition to its existing credit facilities, the company also has the capacity to support liquidity by reducing capex for up to 2 years with limited impact on their operations. The only financial debt of the company is the USD 310 million unsecured bond, which matures in 2023. This favorable debt schedule provides the company with a critical degree of financial flexibility during this operationally challenging period. FULL LIST OF RATING ACTIONS AES El Salvador Trust II Fitch has affirmed the following ratings: -- Foreign Currency Long-term IDR at 'CCC'; -- Local Currency Long-term IDR at 'CCC'; -- Senior unsecured notes at 'CCC/RR4'. =========== M E X I C O =========== MEXICO: City Residents Remain Homeless After Earthquake ------------------------------------------------------- The Economic Times reports that a week after the powerful earthquake hit central and southern Mexico, many residents of the capital Mexico City still remain homeless on the streets, not knowing where to go and fearing possible burglaries of the belongings they abandoned in their houses. Mexican authorities recorded a total of 38 collapsed buildings and a death toll of 194 in the country's capital, out of 333 deaths nationwide, the report relays. According to official figures, about 25,000 people have taken refuge in shelters provided by the Ministry of Social Development. These figures, however, exclude a large number of people sleeping on the street, the report adds. TABASCO: Moody's Affirms Ba1 Issuer Rating; Outlook Negative ------------------------------------------------------------ Moody's de Mexico affirmed the A1.mx (Mexico National Scale) and Ba1 (Global Scale, local currency) issuer ratings of the state of Tabasco. The outlook on the ratings remains negative. At the same time, Moody's affirmed the debt ratings of the following enhanced loans of the State of Tabasco: - MXN 3 billion (original face value) enhanced loan with Banorte: A3 (Global Scale, local currency) and Aaa.mx (Mexico National Scale) - MXN 1.6 billion (original face value) enhanced loan with Banamex: Baa1 (Global Scale, local currency) and Aa1.mx (Mexico National Scale) RATINGS RATIONALE RATIONALE FOR AFFIRMATION OF ISSUER RATINGS Moody's decision to affirm Tabasco's ratings of Ba1/A1.mx takes into account that Tabasco continues to align with Ba1 rated national peers on a number of metrics despite facing added pressure related to the loss of oil-related economic activity. Primarily, the affirmation reflects Tabasco's low debt levels, moderate cash financing deficits registered during the last two years and adequate level of liquidity. Despite the state's relative resiliency during 2015 and 2016 to the oil price drop, Tabasco registered modest cash financing deficits equivalent to 1.7% of total revenues on average in these two years. This reflected a decline on own source revenues beginning in 2015 and increases of current expenditures in 2015 and 2016. Moody's expects that the state will report higher cash financing deficits during 2017 and 2018 of around 4%. This will likely only result in a modest increase in the state's debt levels. The deficit registered in 2016 was partially funded through the acquisition of a fixed interest rate MXN 450 million loan with Banamex. Nevertheless, Tabasco continued registering low debt levels equivalent to 9.1% of total revenues as of December 2016, in line with national peers rated at Ba1. Although the state contracted a MXN 700 million loan to fund part of its infrastructure program in 2017, Moody's expects debt levels to remain low at 10.2% on December 2017. The state's liquidity has been slightly negative in the last two years. Measured as net working capital (current assets less current liabilities), liquidity was equivalent to -0.5% and -0.2% of total expenditures respectively in 2015 and 2016. Furthermore, at the end of 2016, cash covered 0.7x current liabilities, metric also in line with Ba1 national rated peers. RATIONALE FOR THE NEGATIVE OUTLOOK The negative outlook reflects Moody's expectations that Tabasco's financial and liquidity metrics could face near-term pressure as a result of revenue decline. Tabasco has seen its economy contract in the face of lower oil related activities, falling to 117.4% of national GDP in 2015 from 158.7% in 2014, which in turn will impact its level of participaciones. Moody's anticipates that participaciones will decline roughly 10% in 2017. If the planned expenditure austerity program is not successfully implemented, Tabasco could register high cash financing deficits leading to debt increases higher than Moody's current expectations and a further deterioration of liquidity metrics. RATIONALE FOR AFFIRMATION OF DEBT RATINGS The A3/Aaa.mx and Baa1/Aa1.mx debt ratings affirmation of the enhanced loans reflect that despite the expected decline of participaciones revenues during 2017, debt service coverage ratios and reserve funds are still sufficient to merit the ratings uplift from the state's issuer ratings.. For the MXN 3 billion enhanced loan with Banorte, the state pledged 11% of participaciones for debt service payments. According to Moody's projections, the loan will maintain the following metrics, in line with the A3/Aaa.mx debt ratings: - Very strong debt service coverage ratios: under a Moody's base case scenario estimated cash flows generate 9.7x debt service coverage at the lowest point during the life of the loan. Under a stress case scenario, estimated cash flows provide 7x debt service coverage, at the lowest point during the life of the loan. - Solid level of reserves that represent 5x debt service coverage throughout the life of the loan and provide enough cushion against payment delays. For the MXN 1.6 billion enhanced loan with Banamex, the state pledged 5% of participaciones for debt service payments. According to Moody's projections, the loan will maintain the following metrics, in line with the Ba1/Aa1.mx debt ratings: - Strong debt service coverage ratios: under a Moody's base case scenario estimated cash flows generate 3.3 x debt service coverage at the lowest point during the life of the loan. Under a stress case scenario, estimated cash flows provide 2.5x debt service coverage, at the lowest point during the life of the loan. - Strong level of reserves that represent 3x debt service coverage throughout the life of the loan and provide enough cushion against payment delays. WHAT COULD CHANGE THE RATINGS UP/DOWN Given the negative outlook, a rating upgrade is unlikely in the next 12 to 18 months. However, the outlook could be stabilized if the administration implements measures that effectively offset Tabasco's revenue loss leading to sustainable cash financing surpluses, a healthy liquidity position and if banking debt increases are below Moody's expectations. Conversely, the ratings could be downgraded if Tabasco's consolidated results and/or cash position deteriorate, or if it contracts a significant amount of short or long-term loans. Given the links between the loans and the credit quality of the obligor, an upgrade on the State of Tabasco's issuer rating would likely result in an upgrade of the enhanced loans ratings. Conversely, a downgrade on the State of Tabasco's issuer ratings could also exert downward pressure on the ratings of the loans. In addition, the ratings could face downward pressure if debt service coverage levels fall materially below Moody's expectations. The methodologies used in these ratings were Regional and Local Governments published in June 2017 and Rating Methodology for Enhanced Municipal and State Loans in Mexico published in July 2017. The period of time covered in the financial information used to determine State of Tabasco's rating is between 01/01/2012 and 31/12/2016. ======= P E R U ======= CORPORACION AZUCARERA: Fitch Cuts Issuer Default Rating to BB- -------------------------------------------------------------- Fitch Ratings has downgraded the Long-Term Foreign Currency (FC) and Local Currency (LC) Issuer Default Ratings (IDRs) of Corporacion Azucarera del Peru S.A. (Coazucar) to 'BB-' from 'BB'. The senior notes were also downgraded to 'BB-' from 'BB'. The Rating Outlook is Stable. The downgrade reflects the company's weak performance and its continued reliance upon its shareholders to bolsters its weak liquidity position. Fitch expects net debt/EBITDA to increase towards 7x in FYE17 from 3.2x in FYE16. Higher leverage is the result of the expected reduction of Coazucar's EBITDA margin due to lower yields The Stable Outlook reflects Fitch beliefs that the shareholder will continue to support the group and Coazucar will improve its performance and credit metrics in 2018. KEY RATING DRIVERS EBITDA Margin Contraction: After a solid performance in 2016, Fitch expects Coazucar's EBITDA margin to decline to 13% in 2017 from 26% in 2016 as a result of lower yields. Production has been impacted by the drought affecting the north of Peru and "El Nino Costero," which made harvesting difficult due to the heavy rains and flooding that followed - especially during March - that forced Coazucar's mills to stop (20 days for Casa Grande and Cartavio). Prices in the domestic market have remained solid. EBITDA is expected to decline to below PEN 250 million in 2017 from PEN494 million in 2016. Fitch expects a gradual improvement of the group's profitability in 2018 but does not expect Coazucar to recover its historical EBITDA margins of around 40%. Increased Leverage: Fitch expects Coazucar's net leverage to peak in 2017 at about 7x and then improve to below 4x in 2018. The increased leverage is due to lower EBITDA which results in negative FCF generation despite a sharp decline in capex compared to 2016, as a result of the completion of the Agrolmos project. The El Nino Costero brought too much water to Agrolmos during the first half of the year, leading the mill to stop production between February and May. The delay and the low inventory levels at the beginning of the 2Q17 forced Coazucar to import sugar this year and incur additional costs. Production at the Algromos mill, which was completed in 2017, should ramp up in 2018 and should drive the company's cash flow recovery in 2018. Support from Shareholders: Fitch factors into the ratings the financial support from Coazucar's shareholders, the Rodriguez family. Coazucar's shareholders have injected capital into the company to preserve its liquidity during the investment phase of the Agrolmos green-field project. In the first-half of the year, the shareholders injected PEN63 million in cash. Fitch expects the shareholder to continue to support the company financially during the 2H17 as a result of the deterioration of the company's cash flow. Other investments of the Rodriguez family include Gloria, the leading dairy company in Peru, and Yura, the leading cement producer in southern Peru. Currency Risk: Coazucar is exposed to currency risk, and Fitch estimates that about 72% of its debt is still mainly dollar- denominated without any hedge against local currency depreciation. Coazucar's revenue follows the trend of the dollar-denominated international prices of sugar but most of revenues and costs are mainly in local currency. Also, about 22% of revenues are in US dollars due to the group's operation in Ecuador as of FYE16. Product and Geographically Concentrated: The ratings incorporate risks associated with product concentration in sugar, which represented 89% of Coazucar's revenues in 2016. The remaining 11% is in alcohol and other by-products. The company can now easily shift production from raw to refined white sugar with the new plant. By nature, the sugar industry is volatile and exposed to fluctuations in commodity prices and external factors such as the El Nino phenomenon. Coazucar is geographically concentrated in Peru with about 71% of its revenues generated in the country; it also has operations in Ecuador and Argentina. EBITDA from Peruvian operations accounted for 86% of the total EBITDA in 2016. DERIVATION SUMMARY Coazucar's ratings reflect its dominant domestic position as the largest sugar producer in Peru, with about 50% market share. The company benefits from its proximity to owned sugarcane fields and low dependence on third-party producers. This position enables the company to price sugar in the domestic market at a high premium compared to international prices, which is not the case for other companies in the same sector rated by Fitch in Brazil. Coazucar also benefits from the strong support of its shareholder, the Rodriguez family. The rating is tempered by Coazucar's performance volatility and weak credit metrics compared to other rated companies in the sector such as Jalles Machado S.A. (B+/Stable) which operates with net debt/EBITDA below 3x. KEY ASSUMPTIONS Fitch's key assumptions within Fitch ratings case for the issuer include: - Steady revenue growth; - Capex-to-sales of about 10% in 2017; - Equity injections to preserve liquidity. RATING SENSITIVITIES Future Developments That May, Individually or Collectively, Lead to Positive Rating Action - Net leverage below 3.0x on a sustainable basis that improves cash flow through the investment cycle; - Tangible support from the shareholder that improves liquidity. Future Developments That May, Individually or Collectively, Lead to Negative Rating Action - Deterioration of liquidity; - Net leverage above 4x in 2018; - EBITDA margin below 20%; - Lack of support from the group's shareholder; - Negative FCF. ====================== P U E R T O R I C O ====================== PUERTO RICO: In Ruins, Bondholders Offer Cash for Gains ------------------------------------------------------- Michelle Kaske at Bloomberg News reports that in late June, Puerto Rico's federal overseers rejected a plan that would have let big investors recover 85 cents on the dollar from bonds backed by the island's distressed electric company, wagering a better deal for the impoverished U.S. territory could be won in bankruptcy. The Puerto Rico Electric Power Authority has since been devastated by Hurricane Maria, which caused billions of dollars of damage and left virtually the entire island still without power, according to Bloomberg News. Bloomberg News notes that a group of investment funds that hold $3 billion of the utility's bonds -- including OppenheimerFunds Inc. and Franklin Advisers Inc. -- revived the spurned deal: In return for a $1 billion loan, they said they'd be willing to accept the same terms on a third of their holdings. The price is roughly twice what some of the utility's debt has been trading for, Bloomberg News relays. "They keep bringing it back from the dead and hope that they'll hold on to a 15 percent haircut," said Matt Dalton, chief executive officer of Rye Brook, New York-based Belle Haven Investments, which manages $6 billion of municipal bonds, including insured Puerto Rico debt, Bloomberg News notes. He predicted the island won't accept it. "It's a time for money to be offered, but not with contingencies surrounded around it," he added, Bloomberg News relays. Bloomberg News discloses that Puerto Rico and U.S. Department of Energy officials are still struggling to restore electricity, a week after the storm. Governor Ricardo Rossello has pleaded for more help to avoid a humanitarian crisis, Bloomberg News says. In Washington, House Speaker Paul Ryan and other Congressional officials are still assessing how much aid to send to the island, whose financial collapse has effectively blocked it from raising more money in the financial markets, Bloomberg News notes. The bondholders' loan -- which would need approval from the island's oversight board -- could help Prepa, as the utility is known, meet local matching requirements to receive Federal Emergency Management Agency funds, according to the group, according to the report. FEMA may allocate as much as $9 billion to Prepa, depending on the federal agency's matching thresholds, Bloomberg News discloses. Among the group is Marathon Asset Management LP, BlueMountain Capital Management LLC, Angelo, Gordon & Co. LP, and Knighthead Capital Management LLC, Bloomberg News says. "What we're trying to do is lend where our investors are not disadvantaged," Thomas Wagner, co-founding partner of Knighthead, said on Bloomberg TV. "But where we can have a win win -- where the capital is not expensive, but ultimately it achieves the goals of bringing even more capital in on a zero-cost basis," he added. Bloomberg News notes that a spokeswoman for Puerto Rico's fiscal agency, which has been handling inquiries about the utility, didn't have immediate comments. Natalie Jaresko, the executive director of the oversight board, said it welcomes the support from creditors and will review the proposal, in consultation with the Puerto Rico officials, Bloomberg News says. The broad terms effectively reprise a deal creditors struck with Puerto Rico after months of negotiations and before Congress enacted emergency legislation giving it authority to have debts discharged in court, Bloomberg News relays. Bloomberg News notes that the latest iteration would have the investors exchange $1 billion of outstanding bonds for $850 million of new debt through so-called debtor-in-possession financing, which is routinely extended to corporations working under court protection from creditors. Those new notes -- as well as the $1 billion loan -- would receive priority over all other Prepa bonds, giving them higher standing than other creditors in the bankruptcy proceedings, Bloomberg News relays. The exchange rate received under the offer is well above where the bonds have been trading, Bloomberg News discloses. Debt maturing in 2032 changed hands Tuesday, Sept. 26 at an average 43.2 cents on the dollar, down from nearly 56 cents at the start of the month, data compiled by Bloomberg show. The securities rose to 47 cents Sept. 27, after the proposal was announced, Bloomberg News relays. "Our thoughts are with the people of Puerto Rico and its residents during this difficult time," Stephen Spencer, managing director at Houlihan Lokey, which is advising the bondholder group, said in a statement, Bloomberg News notes. "We hope that this capital commitment will provide bridge financing and matching funds as required by FEMA legislation while supporting the commonwealth's recovery," he added. 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, 2017. 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 onboard 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: Seeks Immediate Aid From US Congress After Hurricane ----------------------------------------------------------------- EFE News reports that Puerto Rican Gov. Ricardo Rossello asked the US Congress to immediately approve an aid package to ease the critical situation the island is going through following the devastation caused by Hurricane Maria. "We need Congress to take action so we can have an aid package that is real for the American citizens that live in Puerto Rico and that is flexible so that we can take immediate action," Rossello said during a morning interview on MSNBC's "Morning Joe," according to EFE News. 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, 2017. 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 onboard 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. TOYS "R" US: Closes $3.1-Billion Financing Facilities ----------------------------------------------------- Toys "R" Us, Inc. on Sept. 25, 2017, disclosed that it has closed on $3.1 billion of financing facilities that will support the Company's operations during its previously announced financial restructuring process. These financings will support the ongoing liquidity needs of the Company as well as provide additional funds to invest in various initiatives. These investments include the renovation and modernization of Toys"R"Us(R) stores through improved layouts, updated lighting patterns and other areas to bring them into the next era of retail shopping. The investments will also include updating the Company's e-commerce sites and infrastructure to better reflect its brand, promote the hottest toys and provide improved delivery capabilities so Toys"R"Us can effectively compete in the online shopping space. Various lenders contributed to the debtor-in-possession ("DIP") financing, including a JPMorgan-led bank syndicate and certain of the Company's existing lenders. On September 20, 2017, the Company received interim approval by the U.S. Bankruptcy Court to access up to $2.2 billion of the DIP financing. The Company intends to seek final Court approval to access the full amount of the DIP financing at a hearing that is scheduled for October 10, 2017. Toys"R"Us also disclosed that, in connection with the initiation of its financial restructuring proceedings, it has cancelled its Q2 2017 Earnings Conference Call scheduled for September 26, 2017. Toys "R"Us intends, as soon as possible, to resume filing relevant materials with the Securities and Exchange Commission (SEC), including Forms 8-K, 10-Q, 10-K and other relevant documents concerning the Company's financial performance. As previously announced on September 18, 2017, Toys"R"Us and certain of its U.S. subsidiaries and its Canadian subsidiary voluntarily filed for relief under Chapter 11 of the Bankruptcy Code in the U.S. Bankruptcy Court for the Eastern District of Virginia in Richmond, VA. In addition, the Company's Canadian subsidiary sought and was granted protection in parallel proceedings under the Companies' Creditors Arrangement Act ("CCAA") in the Ontario Superior Court of Justice. The Company intends to use these court-supervised proceedings to restructure its outstanding debt and establish a sustainable capital structure that will enable it to invest in long-term growth and fuel its aspirations to bring play to kids everywhere and be a best friend to parents. Additional information on the Company's restructuring can be accessed by visiting the Company's restructuring website at www.toysrusinc.com/restructuring, calling the Company's Information Hotline, toll-free in the U.S. at 844-794-3476, or sending an email to toysrusinfo@PrimeClerk.com in the U.S. or to toysruscanada@ca.gt.com in Canada. Court filings and other documents related to the court-supervised process in the U.S. are available on a separate website administered by the Company's claims agent, Prime Clerk, at https://cases.primeclerk.com/toysrus. Information about the CCAA proceedings is available on a separate site maintained by an independent Monitor at www.grantthornton.ca/ToysRUs. The Monitor also has a hotline at 416-777-7202 or 1-855-747-2648. About Toys "R" Us Toys "R" Us, Inc., is an American toy and juvenile-products retailer founded in 1948 and headquartered in Wayne, New Jersey, in the New York City metropolitan area. Merchandise is sold in 880 Toys "R" Us and Babies "R" Us stores in the United States, Puerto Rico and Guam, and in more than 780 international stores and more than 245 licensed stores in 37 countries and jurisdictions. Merchandise is also sold at e-commerce sites including Toysrus.com and Babiesrus.com. On July 21, 2005, a consortium of Bain Capital Partners LLC, Kohlberg Kravis Roberts and Vornado Realty Trust invested $1.3 billion to complete a $6.6 billion leveraged buyout of the company. Toys "R" Us is now a privately owned entity but still files with the Securities and Exchange Commission as required by its debt agreements. The Company's consolidated balance sheet showed $6.572 billion in assets, $7.891 billion in liabilities, and a stockholders' deficit of $1.319 billion as of April 29, 2017. Toys "R" Us, Inc. and certain of its U.S. subsidiaries and its Canadian subsidiary voluntarily filed for relief under Chapter 11 of the Bankruptcy Code (Bankr. E.D. Va. Lead Case No. Case No. 17-34665) on Sept. 19, 2017. Judge Keith L. Phillips is the case judge. In addition, the Company's Canadian subsidiary voluntarily commenced parallel proceedings under the Companies' Creditors Arrangement Act ("CCAA") in Canada in the Ontario Superior Court of Justice. The Company's operations outside of the U.S. and Canada, including its 255 licensed stores and joint venture partnership in Asia, which are separate entities, are not part of the Chapter 11 filing and CCAA proceedings. Kirkland & Ellis LLP is serving as principal legal counsel to Toys "R" Us, Alvarez & Marsal is serving as restructuring advisor and Lazard is serving as financial advisor. Prime Clerk LLC is the claims and noticing agent. Grant Thornton is the monitor appointed in the CCAA case. VIA NIZA: Disclosures OK'd; Plan Confirmation Hearing on Nov. 14 ---------------------------------------------------------------- The Hon. Enrique S. Lamoutte Inclan of the U.S. Bankruptcy Court for the District of Puerto Rico has approved Via Niza Inc.'s amended disclosure statement dated Aug. 11, 2017, referring to the Debtor's Chapter 11 plan dated Aug. 11, 2017. A hearing to consider the confirmation of the Plan will be held on Nov. 14, 2017, at 10:00 a.m. Objections to the plan confirmation must be filed on or before 21 days prior to the confirmation hearing. Acceptances or rejections of the Plan must be filed in writing by the holders of all claims on or before 14 days prior to the date of the hearing on confirmation of the Plan. Objections to claims must be filed 45 days prior to the hearing on confirmation. The Debtor will include in its objection to claim a notice that if no response to the objection is filed within 30 days, the motion will be considered and decided without the actual hearing. If a written response or opposition to the objection to claim is timely filed, the contested matter will be heard on the date that the hearing on confirmation has been scheduled. As reported by the Troubled Company Reporter on Aug. 21, 2017, the Debtor filed with the Court an amended disclosure statement describing its amended plan of reorganization, dated August 11, 2017. The Amended Plan adds Triangle Reo PR Corp as a secured claimant in Class 2. Triangle Reo will be paid through 60 monthly payments of $3,299 calculated at a rate of 5% using an amortization schedule of 20 years and a balloon payment at the end of month 60 in the amount of $417,274. About Via Niza Inc. Via Niza Inc., a corporation, owns a commercial property located at Metro Medical Center Condominium. The property is used as a medical and patient treatment office for hematology and oncology patients. Via Niza sought protection under Chapter 11 of the Bankruptcy Code (Bankr. D.P.R. Case No. 17-00215) on Jan. 18, 2017. At the time of the filing, the Debtor estimated assets and liabilities of less than $1 million. Myrna L. Ruiz-Olmo, Esq., at MRO Attorneys at Law LLC, is the Debtor's bankruptcy counsel. Luis Cruz Lopez is the Debtor's accountant. ================= V E N E Z U E L A ================= VENEZUELA: Maduro Regime Sanctioned Twice in 48 Hours ----------------------------------------------------- Carlos Camacho at The Latin American Herald reports that thousands of police, intelligence service, tax, immigration, interior and foreign-service officials will not be able to indulge in that favorite Venezuelan pastime: visiting DisneyWorld come Christmas time. The U.S., which has already sanctioned 46 former and current officials with the Nicolas Maduro administration, disclosed a suspension of visas and travel ban for officials of six government agencies and ministries, including the Foreign Ministry and their families, according to The Latin American Herald. Foreign Minister Jorge Arreaza, who was at the United Nations in New York, denounced the measure in a speech there, the report notes. The latest U.S. sanctions come after Canada sanctioned 40 Venezuelan officials, including Nicolas Maduro himself, Vice President Tareck El Aissami, Supreme Court Chief Justice Maikel Moreno and Interior Minister Nestor Reverol, the report relays. Those four officials are already Specially Designated Nationals by the US Treasury, the report says. More Than 18,000 Cops One of the agencies affected, the CICPC criminal investigations police, has more than 15,000 employees, according to the Venezuelan Social Security Institute, the report discloses. Venezuela's version of the FBI, CICPC coordinates investigation of criminal cases with the Attorney General's Office, the report relays. In total, officials from six agencies and ministries were affected by a widespread ban on travelling to the U.S., the most comprehensive set of sanctions since the Barack Obama administration started taking measures against Venezuelan officials in 2014, after that year's violent repression left 43 demonstrators dead, the report relays. SEBIN has a much smaller number of employees, over 3,400, but it is, by far, more influential, the report notes. The National Bolivarian Intelligence Service runs domestic operations against the political opposition, including high-profile arrests, intimidation, spying and the running of two infamous prisons in Caracas alone: El Helicoide at its namesake, Western Caracas headquarters, where US citizen Joshua Holt is imprisoned on weapons charges, and Las Tumbas (The Tombs), a series of dungeons in a basement four stories underground near Plaza Venezuela, the report says. The opposition however welcomed the sanction, and noted that they were targeted at officials who were instrumental in keeping the regime afloat, not aimed at the populace at large, the report discloses. "Trump's measure with regards to Venezuela? We support it. And we call on other nations to implement actions such as these which have as its main purpose to exert pressure on dictatorial regimes in order to reestablish democracy in certain nations," opposition lawmaker Lester Toledo stated in a press release, the report notes. "A regime that perpetrates crimes against mankind, which violates Human Rights, which keeps behind bars hundreds of political prisoners, that submits its people to hunger and death by denying them food or medicines, which kidnaps the right to vote and tramples the democratic principle of checks and balances cannot go unpunished," Mr. Toledo said, notes the report. "And measures such as this one put the brakes on abuses that have been carried out against all Venezuelans," Mr. Toledo added. As reported in the Troubled Company Reporter-Latin America on Sept. 28, 2017, S&P Global Ratings suspended its 'CCC-' local currency issue ratings on four of the Bolivarian Republic of Venezuela's local currency-denominated debt issues. S&P said, "At the same time, we affirmed our 'CCC-' long-term foreign and local currency sovereign issuer credit ratings. The outlook on the long- term ratings is negative. In addition, we affirmed our 'C' short- term foreign and local currency sovereign issuer credit ratings. The transfer and convertibility assessment remains 'CCC-'." *********** Monday's edition of the TCR-LA delivers a list of indicative prices for bond issues that reportedly trade well below par. Prices are obtained by TCR-LA editors from a variety of outside sources during the prior week we think are reliable. Those sources may not, however, be complete or accurate. The Monday Bond Pricing table is compiled on the Friday prior to publication. Prices reported are not intended to reflect actual trades. Prices 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 * * *