/raid1/www/Hosts/bankrupt/TCRLA

/raid1/www/Hosts/bankrupt/TCRLA_Public/180925.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 Tuesday, September 25, 2018, Vol. 19, No. 190 Headlines A R G E N T I N A LA RIOJA: Fitch Affirms LT IDR & $300MM Sr. Unsec. Notes at 'B' D O M I N I C A N R E P U B L I C DOMINICAN REPUBLIC: APD Blames Govt. for Power Plant Outage DOMINICAN REPUBLIC: US Envoy Lays Out Plan, Explains Hasty Recall J A M A I C A JAMAICA: Told to Brace for a New Financial Instruments Standard M E X I C O GRUPO FAMSA: Fitch Affirms B- LT IDRs; Alters Outlook to Positive N I C A R A G U A NICARAGUA: Tourism Crushed by Crisis; To Lose US$400 Million P U E R T O R I C O LUBY'S INC: Obtains a Waiver of Default Under Credit Agreement PUERTO RICO: PRHS, 2 Others Resign From Committee STONEMOR PARTNERS: GP Approves Amendment to Incentive Plan V E N E Z U E L A VENEZUELA: Signs Deal With Turkey to Strengthen Diplomatic Ties V I R G I N I S L A N D S HOVENSA: Owners Move to Restart USVI Refinery - - - - - ================= A R G E N T I N A ================= LA RIOJA: Fitch Affirms LT IDR & $300MM Sr. Unsec. Notes at 'B' --------------------------------------------------------------- Fitch Ratings has affirmed the Province of La Rioja, Argentina's Long-Term Foreign and Local Currency Issuer Default Ratings at 'B' with a Stable Outlook. Fitch has also affirmed the 'B' long-term ratings on La Rioja's 9.75% senior unsecured notes for USD300 million due 2025. La Rioja's ratings affirmation is underpinned by its fiscal performance in line with peers. According to Fitch's calculation, there was some worsening in 2017 when operating margins reached minus 1%, negatively affected by higher operating expenditures, which grew higher than inflation. The ratings of the province are constrained by the sovereign. KEY RATING DRIVERS Fiscal Performance: Neutral, Negative La Rioja has presented a downward trend in operating margins since 2014, according to Fitch's calculation given the above average expansion on health related activities carried out by the province and the structurally high expenditure structure. Operating revenue reached ARS19.4 billion in 2017 with an estimated real growth rate of around 5.6%. Fitch notes local revenue is linked to the level of national economic activity since federal shared tax revenue represented around 90% operating revenue in the last three years. Fitch expects operating margins close to zero until 2020. In Fitch's opinion, the province should reduce investments so as to cope for persistent pressures in operating expenditures. Capex levels have averaged 19.2% over the last five years, in a decreasing trend, which is also observed in the 'B' rated peers. Debt, Liabilities and Liquidity: Neutral, Negative Fitch modified this attribute to Neutral from Strength considering that between December 2017 and August 2018 the Argentine peso depreciated around 108.5%, therefore, increasing debt sustainability and refinancing risk for short term debt. These factors are reflected in the entity's 'B' ratings. According to Fitch's calculation, debt service should represent around 10% of La Rioja's operating revenues in 2018 from 3% posted in 2017 thus heightening refinancing risks. Total outstanding consolidated debt reached ARS11.9 billion in June 2018, 47% higher in relation to 2017 given the currency depreciation. Unhedged exposure to currency risk is high at around 72% (of foreign currency debt) thus higher to the 'B' category median. The prevalent portion is denominated in USD and is linked to capex for clean energy production carried out by the state company Parque Eolico Arauco. Debt service absorbed 2.9% of operating revenue in 2017 and 1.5% in 2016. Considering the recent Peso depreciation, Fitch estimates that total debt represent almost 72% of La Rioja's operating revenues from around 42% posted in 2017, still compatible with its peers in the same rating category. The USD300 million bond amortizes in equal annual four instalments starting in February 2022 with semimanual debt services in February and August since 2017. Therefore, short-term refinancing needs are moderate. Contrary to other provinces, La Rioja does not support a local pension system and has not recorded any judicial debt. Payables due in 2018 totaled around ARS1.4 billion, corresponding manageable 7.2% of operating revenue. In an increasing trend since early 2017, net cash positions as of June 2018 cover around 107% short-term payables. Fitch expects some decreases in cash positions in 2018 so as to cope for higher debt services. Economy: Weak, Stable Fitch views the economy as weak for all Argentine subnationals compared to international peers, because they operate in a macroeconomic context of high inflation, currency depreciation and high infrastructure needs. Economic volatility is a structural characteristic of Argentina's weak economy. La Rioja is located in the northeast region of Argentina. With an estimated population of around 400,000 (less than 1% of Argentina's), GDP per capita is less than USD9,000. La Rioja's economy is heavily influenced by the public sector activities with low value added activities. Population has been growing in higher than the national average since 2001 (15.1% versus 10.6%, respectively) thus adding some infrastructure pressures, including energy. The province has a relatively lower unemployment rate at 4.2% when compared with the national average of 9.2% as of 2017. Management and Administration: Neutral, Stable The overall policy consensus is to focus on fiscal balance. Fitch believes accuracy of forecasts (budget versus actuals) is very much affected by the inflationary environment and annual negotiations for federal transfers, thus making annual comparison cumbersome. Use of nonrecurring revenues is higher than 'B' rated entities and appetite for risk is below average because there is no immediate refinance needs. La Rioja adhered to the fiscal pact with the national government in January 2018, aiming at controlling expenditures. Institutional Framework: Weak, Stable Fitch considers Argentina's institutional framework to be Weak, given the country's structural weaknesses, including its complex and unbalanced fiscal regime with weak equalization funding with federal transfers being updated with much delays. For the case of La Rioja, there is relevant amount of federal transfers that are discretionary, meaning that the province needs to negotiate the transfers every year. Fitch will monitor the implementation of several corrective measures on tax and federal revenue distribution and their potential impact on the province's public finances. RATING SENSITIVITIES Negative Factors: A downgrade of Argentina's IDR could lead to a negative rating action or a significant and persistent deterioration of province's operating margins. Positive Rating Actions: La Rioja's IDR should move in tandem with Argentina's sovereign ratings. An upgrade of the sovereign IDR could lead to an upgrade in La Rioja's rating. Any change in the rating of the province will lead to an equivalent effect on the bond rating. FULL LIST OF RATING ACTIONS Fitch has affirmed the following ratings: Province of La Rioja -- Long-Term Foreign and Local Currency IDR at 'B'; Outlook Stable; -- USD300 million 9.75% senior secured notes due 2025 at 'B'. =================================== D O M I N I C A N R E P U B L I C =================================== DOMINICAN REPUBLIC: APD Blames Govt. for Power Plant Outage ----------------------------------------------------------- Dominican Today reports that the opposition Democracy Alliance (APD) party warned that the government aims to raise fuel prices, to compensate for the energy deficit once the AES Andres power plant in Boca Chica went off line. APD senior leader Carlos Sanchez said the government won't be able to force AES Andres to pay for the damages, as State Electric Utility (CDEEE) CEO Ruben Jimenez Bichara, affirmed, according to Dominican Today. He said it was the government itself that through permanent pressure prevented AES from taking the plant off line to submit it to scheduled maintenance, the report notes. The report relays that Mr. Sanchez said the government will have to seek an additional US$49.0 million each month during the next six months, to compensate for the energy that AES Andres won't supply, which totals RD$14.0 billion. Debt "A second exit to which the Dominican government could resort would be to increase the debt by taking new loans to alleviate the deficit created recently in the electricity system," Mr. Sanchez added, the report says. As reported in the Troubled Company Reporter-Latin America on Sept. 24, 2018, Fitch Ratings has affirmed Dominican Republic's Long-Term, Foreign-Currency Issuer Default Rating (IDR) at 'BB-' with a Stable Outlook. DOMINICAN REPUBLIC: US Envoy Lays Out Plan, Explains Hasty Recall ----------------------------------------------------------------- Dominican Today reports that United States ambassador, Robin Bernstein, said that she will work to strengthen bilateral cooperation in education, citizen security, trade and preparedness for natural disasters. At her welcoming reception in the US Embassy, Bernstein said she shares Dominicans' family values and faith, and noted both nations' "unique history and relationship," according to Dominican Today. She said the two nations must work together to make the most of the opportunities that abound on the island, the report notes. "Trade creates wealth, offers jobs and improves the lives of people here and in the United States. It offers opportunities for education and to build even more on the close ties that we already enjoy," she said, the report relays. Recall "It was a strong gesture on the part of my government that underscores the seriousness with which we take the events of this hemisphere," the diplomat said of her hasty recall to Washington just hours after presenting her credentials to president Danilo Medina, the report notes. She said his conversation focused on what the United States can do to support strong, independent and democratic institutions and economies in the region, to promote transparency and compliance with the law, the report relays. "The reality is that our relationship with this region has matured," she added. As reported in the Troubled Company Reporter-Latin America on Sept. 24, 2018, Fitch Ratings has affirmed Dominican Republic's Long-Term, Foreign-Currency Issuer Default Rating (IDR) at 'BB-' with a Stable Outlook. ============= J A M A I C A ============= JAMAICA: Told to Brace for a New Financial Instruments Standard --------------------------------------------------------------- RJR News reports that local businesses are being told to brace for a new Financial Instruments Standard, which will change how they are audited The standard is to be implemented in January next year and is part of ongoing changes to International Financial Reporting Standards (IFRS), according to RJR News. The report notes that Trainer at GAAP Dynamics, a professional accounting and auditing training firm, Dale Brown, spoke about the changes at KPMG's Annual IFRS Update Event recently: "There are changes in the classification of the number of liabilities and assets that we have to look at. But also for commercial companies, they have to go from what used to be an incurred credit loss perspective to an expected lifetime credit loss perspective. The challenge is that it is relatively straight forward to calculate an incurred loss, but when you're calculating an expected lifetime credit loss, there are lot of estimates and assumptions." According to Mr. Brown, the change will affect just about every financial institution in Jamaica, the report adds. As reported in the Troubled Company Reporter-Latin America on Feb. 5, 2018, Fitch Ratings affirmed Jamaica's Long-Term Foreign-Currency Issuer Default Rating (IDR) at 'B' and has revised the Rating Outlook to Positive from Stable. =========== M E X I C O =========== GRUPO FAMSA: Fitch Affirms B- LT IDRs; Alters Outlook to Positive ----------------------------------------------------------------- Fitch Ratings has affirmed Grupo Famsa S.A.B. de C.V.'s (Famsa) Long-Term, Local- and Foreign-Currency Issuer Default Ratings (IDRs) at 'B-', National Long-Term Rating at 'BB(mex)' and National Short-Term Rating at 'B(mex)'. The Rating Outlook has been revised to Positive from Stable. The ratings reflect Grupo Famsa, S.A.B de C.V.'s market position within the Mexican retail sector, geographic and product diversification, stable operating cash flow generation by the Mexican retail operation and the expectation of a gradual improvement in leverage. Famsa's Positive Outlook reflects its improving financial position followed the deleveraging plan and short-term debt refinancing the company has executed since 2017. The Outlook considers the increased confidence in Famsa's ability to keep improving consolidated profitability and to turn over its U.S operation results. Fitch Ratings expects Famsa to continue receiving, as scheduled, additional significant payments from the collection rights to its main shareholder, Humberto Garza Gonzalez. These proceeds are expected to be directed toward repaying debt. KEY RATING DRIVERS Good Mexican Retail Sales Performance: During the LTM ended June 30, 2018, Mexican retail sales performed in line with peers and showed a 9.7% increase over the year-earlier period. Famsa's current main challenge is to retain market share and profitability amid the high competitive environment in Mexico, where larger retail chains, such as Coppel and Elektra, also target the low- income segment of the population. Profitability and Liquidity Initiatives On the Rise: Famsa has taken effective actions to improve profitability and liquidity since 2017, such as redesigning its personnel structure, reducing expenses, executing maintenance-only capex and carrying out selective store closings. The company also refinanced a portion of its short-term debt, which as of June 2018 totalled MXN2.4 billion, up from MXN4.0 billion at the end of 2016. Since the last quarter of 2017, Famsa turned to a more conservative origination policy. Salary compensation for certain positions was linked to portfolio quality, promoting new credits with higher quality standards. These initiatives have positively affected 2018 results relative to Fitch's expectations. Famsa expects to maintain consolidated NPLs of around 12% given its target market characteristics. As of June 2018, the consolidated NPL level was 12.7%. Operational Consolidation at Banco Famsa: Famsa's financial division, Banco Famsa (BAF), has good brand equity and a good competitive position in consumer finance, mainly in Northeastern Mexico. BAF's profitability is improving but its financial performance is constrained by its high funding costs and still- high loan-impairment charges, which limit profitability and internal capital generation. However, during the last year BAF has improved its credit origination policy, and the company expects improvements in its portfolio's credit quality, which would improve BAF's profitability. Given BAF's ambitious growth strategy, the institution has required consistent capital injections from Famsa. During 2015-2017, Famsa made average annual capital increases of MXN400 million to BAF. One of BAF's main strengths is its diversified and relatively stable and resilient base of customer deposits. BAF also shows organic growth in its loan portfolio, although its customers' sensitivity to a weak economic environment continues to be a limiting factor. U.S. Operations Under Pressure: U.S. stores' same-store sales decreased 10%-25% during the last two years, beyond the company's expectations, however, it seems to be stabilizing during 2018. For the LTM ended June 30, 2018, revenues from U.S. operations were MXN1.7 billion, down from MXN2.3 billion in 2016 mainly due to the closing of unprofitable stores. Fitch believes 2018 will remain a challenging year for Famsa's U.S. operations, given the migration policy that negatively affects Famsa's target market of U.S. Hispanic customers. The company is redirecting its commercial strategy for the U.S. by targeting second and third generation Hispanics and improving its social media presence. Leverage to Recover: Weaker than expected results in the U.S. operations along with a weaker portfolio quality and a competitive environment in Mexico have led Famsa to higher leverage in recent years. At June 30, 2018, the company's lease adjusted debt (excluding banking deposits) to EBITDAR ratio was 6.4x, similar to a year earlier. Fitch expects total adjusted debt to EBITDAR to decrease to around 5.0x-5.5x and total debt to EBITDA to be below 5.0x by YE 2018, supported by improved profitability and debt reduction. As of June 30, 2018, Famsa's total debt was MXN9.3 billion - of which approximately MXN0.5 billion was directed to refinance short-term debt in July 2018. The company expects debt to decrease to around MXN8.5 billion by the end of 2018 after the reception of the collection rights to Mr. Garza of around MXN0.4 billion during the second half of the year. DERIVATION SUMMARY Grupo Famsa's business risk profile is closer to the upper level of the 'B' category when compared with peers. Grupo Famsa is less geographically diversified than Grupo Elektra (BB/Positive) and Grupo Unicomer (BB-/Stable), but it is well positioned in its influence area of Northern Mexico. The company has smaller scale in number of stores than Elektra and Unicomer. From a financial risk profile view, Grupo Famsa leans toward the mid-level of the 'B' category when compared with peers. The company has similar adjusted leverage to J.C. Penney (JCP; B/Stable) with ratios between 5.0x and 6.0x, but it is stronger than Rite Aid (B/Negative) which has an adjusted leverage ratio in the mid-7.0x range. The three companies present neutral to negative FCF, but JCP and Rite Aid have stronger liquidity positions than Famsa. On the other hand, Famsa has higher profitability margins than JCP and Rite Aid and the prospects for the retail industry in Mexico are stronger than in the U.S. Compared with regional peers, the company maintains a weaker financial position in terms of profitability, flexibility and financial structure than Elektra and Unicomer. Grupo Famsa's operating margins are lower but close to Unicomer's, while Elektra has the best operating margins of the three companies. KEY ASSUMPTIONS Fitch's Key Assumptions Within the Rating Case for the Issuer -- Consolidated revenues grow 5.9% on average annually during 2018-2021; -- Average EBITDA margin of 9.8% during 2018-2021; -- EBITDA from the U.S. division is slightly negative in 2018- 2019 and neutral to positive in 2020-2021; -- Average CFO of MXN1.4 billion per year for 2018-2021; -- Consolidated debt (excluding bank deposits) of around MXN8.3 billion in 2018-2019; -- The company refinance the remaining balance of its Senior Notes due on 2020; -- Average capex of MXN215 million during 2018-2021; -- No dividend payments for 2018-2021; -- Famsa receives MXN0.8 billion per year from Mr. Garza's guarantee during 2018-2021; -- BAF requires capital increases of MXN450 million per year from Famsa during 2018-2021 to support its growth strategy. RATING SENSITIVITIES Developments That May, Individually or Collectively, Lead to Positive Rating Action -- Sustained reduction in consolidated total gross debt to EBITDA (excluding deposits) of 5.0x or below; -- Progress in the cash collection of Mr. Garza's pending MXN3.6 billion guarantee; -- A recovery of U.S. operations; -- Refinancing of the remaining balance of the USD Senior Notes due in 2020; -- Lower currency mismatch between debt and cash flows; -- Decreasing capital injections from Famsa to BAF; -- Continued strengthening of the consolidated credit portfolio's quality. Developments That May, Individually or Collectively, Lead to Negative Rating Action -- Failure to receive significant additional payments from Mr. Garza's guarantee; -- Additional or unexpected weaknesses in internal operating controls; -- Deterioration in BAF's creditworthiness beyond Famsa's ability to lend support; -- Consolidated gross debt to EBITDA (excluding bank deposits) consistently above 6.5x; -- Lower than expected EBITDA generation by Famsa USA; -- Deterioration in the quality of the consolidated loan portfolio. LIQUIDITY Adequate Liquidity: As of June 30, 2018, Famsa's short-term debt (excluding banking deposits) was MXN2.4 billion, and it had cash holdings of about MXN1.4 billion (most of it at BAF). Famsa's short-term debt is mostly made up of short-term Cebures issuances, which the company has been able to roll over, and bank loans with several institutions. Famsa's main creditor is Bancomext with a total debt of MXN3.6 billion divided in two credit facilities with terms of 10 and 7 years. Proceeds from these loans were used to prepay part (USD110 million) of the senior notes, a portion of the company's short- term debt and working capital requirements. Famsa has MXN2.7 billion of debt related to the USD140 million senior notes issuance (originally USD250 million). These notes have an annual interest rate of 7.25% and are due in 2020. The company currently does not have hedges to reduce its currency mismatch between U.S. dollar-denominated debt and its modest U.S. dollar cash flow generation from its U.S. operations. However, Famsa has covered the senior notes' 2018 coupons. Recovery Analysis For issuers with IDRs at 'B+' and below, Fitch performs a recovery analysis for each class of obligations of the issuer. The issue rating is derived from the IDR and the relevant Recovery Rating (RR) and notching, based on the going concern enterprise value of a distressed scenario or the company's liquidation value. Fitch's recovery analysis for Famsa places a going concern value under a distressed scenario of approximately MXN5.2 billion; based on a going-concern EBITDA of MXN921 million and a 5.5x multiple. The going concern value is higher than the liquidation value, which Fitch estimates at about MXN2.0 billion. The MXN921 million going-concern EBITDA assumption reflects a 40% discount from the average annual EBITDA generation during the last four years. The discount reflects deterioration of the U.S. operations and, at the same time, a significant consumer contraction in Mexico. The 5.5x multiple is the median multiple for retail going-concern reorganizations. The liquidation value considers no value for cash due to the assumption that cash dissipates during or before the bankruptcy. Fitch applied a 100% discount on the credit portfolio given that most of it is allocated within BAF, which is a regulated entity and has another liquidation process. Fitch has also applied a 50% discount on inventory and PPE as a proxy for the liquidation value of those assets. With these calculations, Famsa's waterfall results in a 52% recovery corresponding to a Recovery Rating of 'RR3' for the senior unsecured debt. However, according to Fitch's 'Country- Specific Treatment of Recovery Ratings Criteria', published in April 2018, the Recovery Rating for Mexican corporate issuers is capped at 'RR4', constraining the upward notching of issue ratings in countries with a less reliable legal environment. Therefore, the Recovery Rating for Famsa's senior notes is 'RR4'. FULL LIST OF RATING ACTIONS Fitch has affirmed the following ratings: Grupo Famsa S.A.B. de C.V. -- Long-Term, Foreign- and Local-Currency IDRs at 'B-', Outlook revised to Positive from Stable; -- Long-term National rating at 'BB(mex)', Outlook revised to Positive from Stable; -- Short-term National rating at 'B(mex); -- USD140 million senior unsecured notes due in 2020 at 'B- '/'RR4'; -- MXN0.5 billion short-term Certificados Bursatiles program at 'B(mex)'; -- MXN1.0 billion short-term Certificados Bursatiles program at 'B(mex)'. ================= N I C A R A G U A ================= NICARAGUA: Tourism Crushed by Crisis; To Lose US$400 Million ------------------------------------------------------------ Today Nicaragua reports that Nicaragua stands to lose some US$400 million in tourism income due to the now five-month-long socio- political crisis blamed for hundreds of deaths and thousands injured, highlights a report presented by the Camara Nacional de Turismo de Nicaragua (Canatur) - National Tourism Chamber. Canatur had projected US$1 billion in tourism income for 2018, but according to an analysis by the Business Development Center, some 600,000 tourists will not come to Nicaragua "if insecure conditions persist," chamber president Lucy Valenti said, according to Today Nicaragua. "The decline in visits will last for four years. It will be impossible to get to the goal of 2 million visitors," she said, the report notes. The report relays that Ms. Valenti added that tourism in Nicaragua fell back three to four years due to the impact of the crisis, losing 57% of jobs. "We went back between three and four years compared to the growth we have had in recent years. We are going to go back to 2015," Valenti said in a press conference, notes the report. "Canatur found that 87% of Nicaragua's tourism firms are in survival mode." According to Canatur, the tourism sector lost approximately 68,400 jobs and some 16,000 have seen their hours reduced as tourism operators try to avoid collapse, the report notes. "We estimate that national losses have been US$200 million during the four months of crisis," the report quoted Ms. Valenti as saying. The report estimates that some US$400 million would be lost compared to last year and US$500 million compared to this year's targets, Today Nicaragua says. "As long as there is not a full security climate there will be no improvement because every tourist seeks tranquility," said the Canatur chief, the report relays. To change this negative trend, 91% of the member companies of Canatur consider it essential to overcome the crisis, since the negative impact will not only be for the country, but for the region, where Nicaragua is part of the multi-destination offer, the report notes. Since the crisis broke out, however, Nicaragua has been left out of this multi-destination offer in Central America, which will affect the arrival of tourists for the next three years, industry members estimate, the report relays. The Canatur report takes in the response of 190 companies, based on the first 100 days of the crisis that Nicaragua faced since April 18, Today Nicaragua discloses. The report notes that Ms. Valenti detailed that the report has a focus on the territories of greatest tourism activity and was carried out in more than 29 municipalities and 14 departments across the country. The survey has a margin of error of 5%, the report relays. The report notes that Canatur is preparing a strategy to face the crisis and that they have several proposals from international companies, but they require security conditions, which include the disappearance of vigilante groups and illegal detentions. Nicaragua is in the midst of a crisis that has included massive protests against the Daniel Ortega government and a total of between 322 and 481 deaths, according to human rights organizations, although the government claims that "only" 198 people have died, recounts the report. In an interview with EFE in Managua, Mr. Ortega denied repressing protests by force, said that he is responsible for the deaths in recent months and blamed the United State and drug traffickers for financing, backing and arming violent groups, the report adds. As reported in the Troubled Company Reporter-Latin America on June 29, 2018, Fitch Ratings has downgraded Nicaragua's Long-Term Foreign-Currency Issuer Default Rating (IDR) to 'B' from 'B+'. The Outlook is Negative. ====================== P U E R T O R I C O ====================== LUBY'S INC: Obtains a Waiver of Default Under Credit Agreement -------------------------------------------------------------- Luby's, Inc. entered into the Third Amendment to Credit Agreement on Aug. 24, 2018, amending the Credit Agreement dated as of Nov. 8, 2016, as amended by the Second Amendment to Credit Agreement dated as of April 20, 2018, by and among the Company, the other credit parties, the lenders and Wells Fargo Bank, National Association, as administrative agent for the lenders. The Third Amendment amends the interest rate on LIBOR rate loans (LIBOR + applicable margin) to (i) LIBOR + 6.50% from the effective date of the Third Amendment through the date the term loan has been paid in full in cash and (ii) LIBOR + 5.50% from the date following the date the term loan has been paid in full in cash and thereafter. The interest rate on base rate loans is 100 basis points less than the applicable margin for LIBOR rate loans. Pursuant to the Third Amendment, the lenders agreed to waive the existing events of default as of the effective date of the Third Amendment resulting from any breach of certain financial covenants or the limitation on maintenance capital expenditures, in each case that may have occurred during the period from and including May 9, 2018 until the effective date of the Third Amendment, and any related events of default. Additionally, the lenders agreed to waive the requirements that the Company comply with certain financial covenants until Dec. 31, 2018. The Third Amendment requires the Company to make mandatory principal prepayments upon certain asset dispositions as follows: (i) 50% of the first $12 million of net cash proceeds from asset dispositions received by the Company; (ii) 75% of the next $8 million of net cash proceeds from asset dispositions received by the Company; and (iii) 100% of all net cash proceeds in excess of the first $20 million of net cash proceeds from asset dispositions received by the Company, in each case from and after the effective date of the Third Amendment. A full-text copy of the Amended Credit Agreement is available for free at https://is.gd/1cD22g About Luby's Luby's, Inc. (NYSE: LUB) operates 160 restaurants nationally as of June 6, 2018: 86 Luby's Cafeterias, 67 Fuddruckers, seven Cheeseburger in Paradise restaurants. Luby's is the franchisor for 109 Fuddruckers franchise locations across the United States (including Puerto Rico), Canada, Mexico, the Dominican Republic, Panama, and Colombia. Additionally, a licensee operates 36 restaurants with the exclusive right to use the Fuddruckers proprietary marks, trade dress, and system in certain countries in the Middle East. The Company does not receive revenue or royalties from these Middle East restaurants. Luby's Culinary Contract Services provides food service management to 25 sites consisting of healthcare, corporate dining locations, and sports stadiums. Luby's reported a net loss of $23.26 million for the year ended Aug. 30, 2017, compared to a net loss of $10.34 million for the year ended Aug. 31, 2016. As of June 6, 2018, the Company had $208.95 million in total assets, $94.91 million in total liabilities, and $114.03 million of total shareholders' equity. The Company sustained a net loss of approximately $14.6 million and approximately $31.7 million in the quarter ended and three quarters ended June 6, 2018, respectively. Cash flow from operations has declined to a use of cash of approximately $4.9 million in the three quarters ended June 6, 2018. The working capital deficit is magnified by the reclassification of the Company's approximate $44.0 million debt under it's Credit Agreement from long-term to short-term due to the debt's May 1, 2019 maturity date. As of June 6, 2018, the Company was in default of certain of its Credit Agreement financial covenants. "The Company's continuation as a going concern is dependent on its ability to generate sufficient cash flows from operations to meet its obligations and obtain alternative financing to refund and repay the current debt owed under it's Credit Agreement. The above conditions raise substantial doubt about the Company's ability to continue as a going concern," the Company stated in its Quarterly Report for the period ended June 6, 2018. PUERTO RICO: PRHS, 2 Others Resign From Committee ------------------------------------------------- The U.S. Trustee for Region 21 on Sept. 19 disclosed in a filing with the U.S. Bankruptcy Court for the District of Puerto Rico that Puerto Rico Hospital Supply, Total Petroleum Puerto Rico, Corp., and Peerless Oil and Chemicals have resigned from the official committee of unsecured creditors in the bankruptcy cases of the Commonwealth of Puerto Rico and three other debtors. The agency appointed one additional committee member, Tradewinds Energy Barceloneta, LLC. Tradewinds' address is: Tradewinds Energy Barceloneta, LLC 1760 Loiza Street, Suite 303 San Juan, PR 00911 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 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 Kramer Levin Naftalis & Frankel LLP and Toro, Colon, Mullet, Rivera & Sifre, P.S.C. and serve as counsel to the Mutual Fund Group, comprised of mutual funds managed by Oppenheimer Funds, Inc., and the First Puerto Rico Family of Funds, which collectively hold over $4.4 billion of GO Bonds, COFINA Bonds, and other bonds issued by Puerto Rico and other instrumentalities. 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, and Monarch Alternative Capital LP. 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 an official committee of retirees and an 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. STONEMOR PARTNERS: GP Approves Amendment to Incentive Plan ---------------------------------------------------------- StoneMor GP LLC, the general partner of StoneMor Partners L.P., has approved the amendment and restatement of the StoneMor Partners L.P. 2014 Long-Term Incentive Plan, which was also renamed the StoneMor Amended and Restated 2018 Long-Term Incentive Plan, in order to (i) increase the number of common units of the Partnership reserved for delivery under the Restated Plan and (ii) make certain other clarifying changes and updates to the Restated Plan. The Restated Plan provides for the grant, from time to time, at the discretion of the board of directors of the General Partner or the Compensation, Nominating and Governance, and Compliance Committee of the Board, of equity-based incentive compensation awards. Subject to adjustment in the event of certain transactions or changes of capitalization in accordance with the Restated Plan, 2,000,000 common units of the Partnership have been reserved for delivery pursuant to awards under the Restated Plan. Common units subject to an award that is forfeited, cancelled, exercised, settled in cash, or otherwise terminates or expires without delivery of common units and common units withheld to satisfy the withholding obligations with respect to an award will again be available for delivery pursuant to other awards under the Restated Plan. About StoneMor Partners StoneMor Partners L.P., headquartered in Trevose, Pennsylvania -- http://www.stonemor.com/-- is an owner and operator of cemeteries and funeral homes in the United States, with 322 cemeteries and 93 funeral homes in 27 states and Puerto Rico. StoneMor is the only publicly traded death care company structured as a partnership. StoneMor's cemetery products and services, which are sold on both a pre-need (before death) and at-need (at death) basis, include: burial lots, lawn and mausoleum crypts, burial vaults, caskets, memorials, and all services which provide for the installation of this merchandise. Stonemor reported a net loss of $75.15 million on $338.2 million of total revenues for the year ended Dec. 31, 2017, compared to a net loss of $30.48 million on $326.2 million of total revenues for the year ended Dec. 31, 2016. As of Dec. 31, 2017, Stonemor had $1.75 billion in total assets, $1.66 billion in total liabilities and $91.69 million in total partners' capital. * * * As reported by the TCR on July 10, 2018, Moody's Investors Service downgraded Stonemor Partners L.P.'s Corporate Family rating to Caa1 from B3. The Caa1 CFR reflects Moody's expectation for breakeven to modestly negative free cash flow (before distributions), ongoing delays in filing financial statements and Stonemor's significant reliance on its revolving credit facility for liquidity in 2018. In April 2018, S&P Global Ratings affirmed its 'CCC+' corporate credit rating on StoneMor Partners L.P. S&P said, "The rating affirmation reflects our expectation that the company can generate operating cash flow of approximately $25 million in 2018 to support operating needs for at least another year." ================= V E N E Z U E L A ================= VENEZUELA: Signs Deal With Turkey to Strengthen Diplomatic Ties --------------------------------------------------------------- The Latin American Herald reports that Turkey's Foreign Minister Mevlut Cavusoglu and his Venezuelan counterpart, Jorge Arreaza, signed in Caracas two agreements of cooperation to strengthen diplomatic ties between the two nations. In a brief transmission on the state-owned VTV channel, Mr. Cavusoglu and Mr. Arreaza signed two memorandums of understanding dealing with consular consultation and ministerial cooperation, according to The Latin American Herald. Mr. Cavusoglu said after the signing of the documents that they were reinforcing their bilateral ties, and deepening cooperation, the report notes. The Turkish minister added that during the upcoming visit by Turkish President Recep Tayyip Erdogan, they would sign many more agreements which would form the legal base for their relationship, the report relays. The report notes that Mr. Arreaza, for his part, expressed willingness to continue negotiations, and sign more agreements across several fields such as diplomacy, training, coordination and collaboration. The Venezuelan minister also thanked his Turkish counterpart for his visit, and added that they were looking forward to one by Erdogan later this year, the report relays. The report relays that Mr. Arreaza said that during the meeting, they also discussed expanding cooperation between them to other important spheres such as tourism, fishing and agriculture. The Venezuelan government considers Turkey an ally who has been helping it break the blockade driven by the United States, the report notes. The two countries have agreements on different fields, including economic cooperation and energy, the report adds. As reported in the Troubled Company Reporter-Latin America on June 1, 2018, S&P Global Ratings, on May 29, 2018, removed its long- and short-term local currency sovereign credit ratings on Venezuela from CreditWatch with negative implications and affirmed them at 'CCC- /C'. The outlook on the long-term local currency rating is negative. At the same time, S&P affirmed its 'SD/D' long- and short-term foreign currency sovereign credit ratings on Venezuela. S&P's transfer and convertibility assessment remains at 'CC'. =========================== V I R G I N I S L A N D S =========================== HOVENSA: Owners Move to Restart USVI Refinery --------------------------------------------- Trinidad Express reports that the owners of an idled oil refinery in the US Virgin Islands that once ranked among the world's largest have hired a former Hess Corp executive closely acquainted with the facility to oversee its return to service. Brian Lever, who ran the former Hovensa refinery in St Croix for Hess and partner Petroleos de Venezuela until it filed for bankruptcy in 2012, joined Limetree Bay Refining this month as president and chief operating officer, according to his LinkedIn profile and a person familiar with the matter, the report notes. *********** 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 2018. 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. . * * * End of Transmission * * *