/raid1/www/Hosts/bankrupt/TCRLA

/raid1/www/Hosts/bankrupt/TCRLA_Public/181002.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, October 2, 2018, Vol. 19, No. 195 Headlines B A R B A D O S BARBADOS: Rains From Tropical Storm Kirk Cause Massive Flooding B R A Z I L PETROLEO BRASILEIRO: Reaches Settlement for US Corruption Charges C A Y M A N I S L A N D S SCHAHIN II: Seeks U.S. Court Recognition of Cayman Scheme SCHAHIN II FINANCE: Chapter 15 Case Summary H O N D U R A S HONDURAS: Gets $150MM-IDB Loan for Energy Transmission Program M E X I C O METROFINANCIERA SAPI: Fitch Revises B- LT IDR Outlook to Stable P U E R T O R I C O PUERTO RICO: Numerous Sectors Only Half-Recovered 1Yr After Maria STONEMOR PARTNERS: Axar Entities Support Reorganization Merger STONEMOR PARTNERS: Starts Process of Converting to Delaware Corp STONEMOR PARTNERS: ACII Will Vote in Favor of Merger Transaction T R I N I D A D & T O B A G O TRINIDAD & TOBAGO: Tewarie Has Concerns on IMF Report V E N E Z U E L A VENEZUELA: Migrants Seek New Lives in Southern Brazil - - - - - =============== B A R B A D O S =============== BARBADOS: Rains From Tropical Storm Kirk Cause Massive Flooding --------------------------------------------------------------- Caribbean360.com reports that Barbados felt the brunt of Tropical Storm Kirk on Sept. 28, even after the centre of the system passed north of the island. The tail end of the storm brought violent showers overnight that left many areas flooded -- some underwater -- and some roads impassable, according to Caribbean360.com. After four hours of constant showers, rainfall accumulations of three to five inches had already been recorded, and by 8 a.m., Sept. 28, that had increased to 9.5 inches, the report notes. A flood warning remains in effect until noon. The showers abated late in the morning, and the Met Office said a gradual improvement in conditions was expected as the day progressed, the report says. During the course of the night and early morning, electricity in some areas was disrupted, as was water supply, the report discloses. Just as had been the case, authorities said there would be no national shutdown, Sept. 28, the report relays. Although schools remained closed, it was initially announced that all government offices would reopen at 10. However, it was subsequently announced that the resumption of business as usual would be delayed until noon, the report discloses. In its bulletin, the National Hurricane Centre (NHC) in Miami said Kirk was weakening over the eastern Caribbean Sea, with maximum sustained winds reduced to 45 miles per hour, but the associated weather was still affecting the Windward Islands, the report notes. The report relays that the storm was located about 185 miles west southwest of Martinique and about 360 miles south southeast of San Juan, Puerto Rico and moving towards the west northwest at 13 miles per hour. "This motion is expected to continue through Sept. 28. On the forecast track, the centre of Kirk or its remnants will move across the eastern and central Caribbean Sea over the next day or two," the NHC said, the report says. "Kirk is forecast to weaken to a tropical depression tonight, and then degenerate into a trough of low pressure," the report discloses. The tropical storm warnings for Barbados, Dominica, Martinique, St Lucia and Guadeloupe have been discontinued, as well as the tropical storm watch for St Vincent and the Grenadines, the report adds. As reported in the Troubled Company Reporter-Latin America on Aug. 10, 2018, S&P Global Ratings lowered its issue-level ratings on Barbados' global bonds due 2019 and 2022 to 'D' (default) from 'CC'. At the same time, S&P Global Ratings lowered its long- and short-term local currency sovereign issuer credit ratings to 'SD' from 'CC' and 'C', respectively. =========== B R A Z I L =========== PETROLEO BRASILEIRO: Reaches Settlement for US Corruption Charges ----------------------------------------------------------------- The Maritime Executive reports that Brazilian state-owned oil firm Petroleo Brasileiro S.A. (Petrobras), the dominant player in Brazil's offshore oil industry, has agreed to an $850 million criminal settlement with the U.S. Justice Department over corrupt payments to politicians and political parties in Brazil. It is the latest development in the long-running "Lava Jato" investigation into illicit links between Petrobras and Brazil's top leadership, a scandal that has upended the nation's political landscape over the past four years, according to The Maritime Executive. "Executives at the highest levels of Petrobras -- including members of its Executive Board and Board of Directors -- facilitated the payment of hundreds of millions of dollars in bribes to Brazilian politicians and political parties and then cooked the books to conceal the bribe payments from investors and regulators," said Assistant Attorney General Brian A. Benczkowski of the Justice Department's Criminal Division in a statement obtained by the news agency. As part of the settlement, Petrobras admitted that its top executives made millions of dollars in corrupt payments to Brazilian politicians, and that they facilitated similar bribes from a contractor, the report relays. Petrobras also admitted to improper book-keeping and to failing to set up internal financial controls, the report discloses. The report notes that while most of the conduct described in the settlement occurred in Brazil, it falls under U.S. jurisdiction because Petrobras has significant business connections in the United States: it is a Nasdaq-listed company, with American investors and regular disclosures to the U.S. Securities and Exchange Commission. This means that it is subject to the terms of the Foreign Corrupt Practices Act, which criminalizes bribery of foreign officials. "Today's substantial resolution demonstrates the FBI's continued commitment to working with U.S. and international partners to investigate corruption no matter where it occurs," said Special Agent in Charge Matthew J. DeSarno of the FBI Washington Field Office's Criminal Division, the report notes. "We remain committed to holding companies and executives who violate the Foreign Corrupt Practices Act accountable for their activity, and we will continue to work diligently to uphold the integrity of an increasingly global marketplace," Mr. DeSarno added. The DOJ also took pains to highlight Petrobras' proactive cooperation in the investigation, its work to clean up in the wake of the revelations, and the fact that the company was itself a victim of its executives' actions, the report says. Petrobras has since replaced all of its board and its top-level executive leadership, and it has reached a separate settlement agreement with Brazilian authorities, the report discloses. SEC Settlement Separately, Petrobras has also agreed to pay the U.S. Securities and Exchange Commission a penalty of $930 million on related charges, the report notes. According to the SEC's account, Petrobras recorded a complex system of overpayments and kickbacks as money spent to improve its infrastructure, resulting in an estimated $2.5 billion overstatement of its assets, the report says. Based on this overstatement, the firm made false and misleading statements to U.S. investors about its worth in the lead-up to a $10 billion stock offering in 2010, the report relays. "If an international company sells securities in the United States, it must provide truthful information about its business operations," said Steven Peikin, co-director of the SEC Enforcement Division, the report notes. The SEC penalty will be reduced by the amount that Petrobras pays out to a class action settlement fund for civil damages related to the bribery scandal, the report discloses. The SEC's order also sets up a so-called "Fair Fund" to distribute any remaining penalty amount to investors who were harmed by Petrobras' actions, the report adds. As reported in the Troubled Company Reporter-Latin America on Feb. 14, 2017, S&P Global Ratings raised its global scale ratings on Petroleo Brasileiro S.A. (Petrobras) to 'BB-' from 'B+', including its corporate credit rating and the ratings on the senior unsecured notes issued through the company's financing vehicles (Petrobras International Finance Co. and Petrobras Global Finance B.V.). ========================== C A Y M A N I S L A N D S ========================== SCHAHIN II: Seeks U.S. Court Recognition of Cayman Scheme --------------------------------------------------------- Schahin II Finance Company (SPV) Limited on Sept. 6, 2018, disclosed that a Practice Statement Letter has been issued by Deutsche Bank Trust Company Americas (solely in its capacity as Indenture Trustee (the "Indenture Trustee") for the 5.875% notes due 2022 (the "Existing Notes") issued by the Company) with respect to a Cayman scheme of arrangement (the "Cayman Scheme") of the Company. The purpose of the Cayman Scheme is to raise an additional $15 million of new capital through the issuance of a new series of notes (the "New Notes"). The New Notes will be available, subject to certain conditions, to holders of the Existing Notes on a pro rata basis. The New Notes will have a senior position above the Existing Notes in the payment waterfall. The rights of the Existing Notes will generally remain unchanged; however, voting under the indenture will require a majority of holders of each series of notes. Holders of Existing Notes that wish to obtain further information about the Scheme should contact Epiq, the SPV's Information Agent or FFS, the SPV's Cayman Islands agent. The material terms of the New Notes are: -- $15 million cash proceeds -- 18 month maturity -- First priority in payment waterfall -- 7% OID -- PIK interest of 8% -- If the vessel is sold before the repayment of the New Notes, holder will receive the greater of the PIK interest and 22% of the net proceeds from the sale of the drillship Sertao (the "Vessel") after payment of the New Notes and costs. -- Secured pari passu over the Vessel and transaction cash accounts The full offering amount of the New Notes is being backstopped by certain members of a steering committee of holders of the Existing Notes (the "Steering Committee"). Such backstop parties will be paid a backstop fee of 3% of the $15 million investment, payable in New Notes. The investment in the New Notes will provide the Company with additional liquidity to continue to maintain the Vessel and weather the industry downturn, covering the "warm stacking" of the vessel, insurance costs and other advisor fees, and is estimated to provide liquidity through the maturity date of the New Notes. Earlier in 2018, the Indenture Trustee, acting at the direction of a majority of holders of the Existing Notes, obtained an order for the appraisement and sale of the Vessel in the English Admiralty Court. A sealed tender auction was held, with bids due by June 12, 2018. The bids received were well below the auction reserve price and thus the auction did not result in a sale. The liquidity provided by the New Notes will allow the owner of the Vessel, Dleif Drilling, LLC ("Dleif") (which is a party to the Indenture) to, in consultation with the Steering Committee, market the Sertao for sale in an improved industry environment. Pareto Securities remains engaged as broker to Dleif and continues to actively market the rig to interested parties. The Scheme is conditional on the requisite creditor approval, sanction by the Cayman Court, and being given effect by the U.S. Bankruptcy Court pursuant to a Chapter 15 proceeding to recognize the Cayman Scheme in the U.S. If the Scheme is not approved and the New Notes are not issued, there may not be sufficient liquidity to maintain the Vessel going forward, which would likely result in a loss of value to holders of the Existing Notes. For information on this press release, one may contact Ben Hobden -- ben.hobden@conyersdill.com -- of Conyers Dill & Pearman, Cayman Islands legal counsel to the Issuer. SCHAHIN II FINANCE: Chapter 15 Case Summary ------------------------------------------- Chapter 15 Debtor: Schahin II Finance Company (SPV) Limited 2nd Floor, Boundary Hall Cricket Square P.O. Box 2681 Grand Cayman Cayman Islands Business Description: Based in Cayman Islands, Schahin II Finance Company (SPV) Limited operates in the financial industry. Chapter 15 Petition Date: September 27, 2018 Chapter 15 Case No.: 18-12964 Court: United States Bankruptcy Court Southern District of New York (Manhattan) Foreign Representative: Kevin Butler Conyers Directors (Cayman) Ltd. 2nd Floor, Boundary Hall Cricket Square P.O. Box 2681 Grand Cayman Cayman Islands Foreign proceeding in which appointment of the foreign representative occurred: Grand Court of the Cayman Islands Foreign Representative's Counsel: John S. Mairo, Esq. PORZIO, BROMBERG & NEWMAN, P.C. 156 West 56th Street, Suite 803 New York, NY 10019 Tel: (212) 265-6888 (973) 889-4107 Fax: (973) 538-5146 Email: jsmairo@pbnlaw.com Estimated Assets: Unknown Estimated Debts: Unknown A full-text copy of the Chapter 15 petition is available at: http://bankrupt.com/misc/nysb18-12964.pdf =============== H O N D U R A S =============== HONDURAS: Gets $150MM-IDB Loan for Energy Transmission Program -------------------------------------------------------------- The approved lending operation will strengthen Honduras's National Transmission System (NTS) by financing priority works under the National Electricity Energy Company's (ENEE, after its Spanish initials) investment program. The loan will also boost ENEE's interconnectivity with the Regional Electricity Market (MER) to foster the use of the Electricity System of the Central American Countries (SIEPAC); improve ENEE's financial sustainability and institutional capability; expand transmission quality by raising service reliability; and increase transmission to the NTS of energy generated from renewable sources. The program is in line with the Honduras Country Strategy for the years 2015-2018 aimed at improving service quality and efficiency as well as diversifying the generation matrix and enhancing users' access to the energy system. The program will also boost service quality by reducing power outages, expanding the transmission system at national level, increasing the volume of transactions at the regional electricity market, and raising power service coverage at national level. In addition, it will include gender equality, development with identity, climate change, and disaster risk management components. In 2014, the Honduran Government launched a reform process, establishing an institutional structure that includes an Energy Secretariat in charge of strategic planning and energy policy formulation. This reform process has made it possible to restructure and upgrade ENEE, dividing it in separate business units through the establishment of the ENEE Group comprising the ENEE Holding as well as generation, transmission and distribution companies. The reform also contributed to the sector's financial recovery; enhanced private participation in energy distribution, reducing losses, which was one of the sector's main challenges; raised Honduras ability to become actively involved in the MER, increasing energy purchases from 1.4% in 2013 to 3.7% in 2017, which has in turn cut generation costs; and helped launch international public tenders to purchase energy and thermal power. The program's total cost is $164.15 million, including a $150 million IDB loan, of which a $90 million component is from the Bank's regular ordinary capital for a 25-year term, with a 5.5- year grace period and a LIBOR-based interest rate, and a $60 million tranche from its concessional ordinary capital, for a 40- year term, with a 40-year grace period and 0.25% interest. An additional $5 million will come from the Scaling Up Renewable Energy Program in Low Income Countries (SREP), which is managed by the IDB. The lending program includes two components for financing and evaluation, follow-up and project audits expenses - one will fund transmission infrastructure expansion plans and the other will support ENEE's institutional strengthening efforts. As reported in the Troubled Company Reporter-Latin America on Sept. 27, 2017, Moody's Investors Service has upgraded the Government of Honduras' foreign currency and local currency issuer and senior unsecured ratings to B1 from B2. The rating outlook was moved to stable from positive. =========== M E X I C O =========== METROFINANCIERA SAPI: Fitch Revises B- LT IDR Outlook to Stable --------------------------------------------------------------- Fitch Ratings has affirmed Metrofinanciera S.A.P.I. de C.V. Sofom, E.R.'s (Metrofinanciera) Long-Term Foreign and Local Currency Issuer Default Ratings (IDRs) at 'B-' and Short-Term IDRs at 'B'. Fitch also affirmed Metrofinanciera's Long- and Short-Term National Scale ratings at 'B-(mex)' and 'B(mex)', respectively. The Rating Outlook on the Long-term ratings has been revised to Stable from Negative. The revision of the Outlook to Stable reflects the relevant decrease on Metrofinanciera's liquidity pressures following the conclusion of a restructuring deal with Sociedad Hipotecaria Federal, S.N.C. (SHF), its main creditor and shareholder. Post- restructuring cumulative liquidity gaps from performing assets are positive for the next four years, with a relevant reduction in the magnitude of the subsequent negative gaps compared to its current position. The revision also considers the restructuring's positive impact on profitability and Metrofinanciera's substantially lower exposure to market risk, as inflation-indexed debt will be refinanced with lower cost credit facilities in Mexican pesos. The Stable Outlook also considers Fitch's view that Metrofinanciera's profitability guidance is achievable based on lower funding costs and the company's non-performing assets recovery assumptions, which are in line with its historical performance. KEY RATING DRIVERS IDRs AND NATIONAL RATINGS The affirmation of Metrofinanciera's ratings considers its recovering franchise in the construction loans segment in Mexico, reflected in the sustained growth of its construction loan portfolio, and the low delinquency metrics of this business line. It also considers the lower net operational losses it has registered during 2018 and the more comfortable amortization schedule of its funding base following the restructuring agreement. The ratings continue to be limited by relatively tight capitalization ratios, the high delinquency metrics of its legacy portfolios and its exposure to unproductive assets, which put pressure on its asset quality, as well as by its weak financial performance and the secured nature of its funding mix. The restructuring deal, which is in the process of being formalized, will result in a more comfortable debt maturity schedule and lower funding costs. Even though negative liquidity gaps from performing assets persist after the four-year bucket, the relative value of the negative cumulative gap as a proportion of equity for the fifth and 10th year buckets is 2% and 55%, respectively, an improvement from levels of 41% and 151%, respectively prior to the restructuring. The secured nature of its wholesale funding base, and its concentration in a sole on-balance sheet creditor (SHF), continues limiting its funding flexibility. Fitch believes that Metrofinanciera is well-positioned to reverse operational losses and reach its break-even point during 2019, although challenges persist. Management forecasts losses of MXN29 million in 2018 and expects to break-even in the beginning of 2019, with a projected net profit of MXN109 million. For this projection, Metrofinanciera considers benefits from lower interest expenses as a result of the restructuring process and from lower loan impairment charges driven by controlled asset quality. In addition to this, adequate disposal of foreclosed assets is crucial to achieve Metrofinanciera's earnings guidance, as 13% of 2019 expected net revenue corresponds to gains on sale of unproductive assets. In Fitch's view, this is achievable considering the entity's historical gains of around 16% from 2015 to 2017. As of June 2018, Metrofinanciera's impaired loan ratio adjusted to consider charge-offs and foreclosed assets decreased to 15.0%, down from its four-year historical average of 31%. Concentrations per borrower are relevant but lower relative to some of its peers. At the end of June 2018 its top 20 borrowers represented 2x equity, slightly higher than at the close of 2017 (1.8x). Its reserve coverage ratio was 59%, higher than the 40% registered during 2016. Fitch believes that this level of reserves is still low, although it is aligned with regulatory requirements. Restructured loans are still relevant; however, most are on a performing status. In Fitch's opinion, Metrofinanciera's leverage ratios are relatively high and its loss absorption capacity is still pressured. As of June 2018, the debt to tangible equity ratio was 7.5x, higher than the past two-year average of 6.7x. Likewise, its Fitch Core Capital (FCC) to Risk Weighted Assets (RWA) ratio was relatively low at 10.6%, while its regulatory capital ratio stood at 14.6%. RATING SENSITIVITIES IDRs AND NATIONAL RATINGS The ratings could be downgraded if there is renewed pressure on its liquidity position or if its debt to tangible equity ratio increases consistently above 8x. Ratings could also be downgraded if Metrofinanciera does not reach its break-even point within the next 12 months. The ratings could be upgraded in the medium term if Metrofinanciera is able to register sustained profits, while it continues to grow its construction loan portfolio, with continued improvements in asset quality ratios and its liquidity profile. Fitch has affirmed the following ratings: Metrofinanciera S.A.P.I. de C.V. Sofom, E.R. -- Long-term Foreign Currency IDR at 'B-'; -- Short-term Foreign Currency IDR at 'B'; -- Long-term Local Currency IDR at 'B-'; -- Short-term Local Currency IDR at 'B'; -- National Long-term rating at 'B-(mex)'; -- National Short-term rating at 'B(mex)'. The Rating Outlook on the long-term ratings was revised to Stable from Negative. ====================== P U E R T O R I C O ====================== PUERTO RICO: Numerous Sectors Only Half-Recovered 1Yr After Maria ----------------------------------------------------------------- EFE News reports that despite the fact that it has been a year since Hurricane Maria devastated Puerto Rico, some of the island's shopping centers, hotels, many homes, farms, government agencies have not fully recovered, not to mention the many stoplights, highways signs and portions of the electric grid that have not been repaired. It was known that the storm would make a direct hit on the island last Sept. 20, but the level of the devastation was unexpected in the biggest catastrophe ever to affect the 3.3 million local residents, according to EFE News. The report notes that it was the most powerful storm to hit Puerto Rico since San Felipe in 1928, destroying virtually everything in its path, leaving thousands of people homeless, without electric power, potable water or telecommunications and with virtually all stores closed. The shopping centers -- such as the Mall of San Juan, Plaza Carolina in a municipality near the capital, and Plaza Real in the Humacao in southeastern Puerto Rico -- were badly damaged by Maria, the report discloses. As the Mall of San Juan general manager, Jose Ayala Bonilla, told EFE, the mall was closed for 30 days after Maria, with just 45 of its 100 stores reopening on Oct. 19. "The initial impact was the water, which came through the roof and once inside the building affected the businesses. And with the lack of light, that created humidity and that affected a rather large number of tenants," he said, the report relays. The damage to the mall -- which opened in 2015 -- is estimated at $2 million, the report relates. As a result of the storm, between 15-20 stores had to be rebuilt, including Nordstrom, which is now in the process of hiring employees for its Nov. 9 reopening, the report notes. Saks Fifth Avenue, another of the mall's anchor stores, still has not reopened, and it is not known if it will do so, the report discloses. Currently, the mall has 103 tenants who are doing business, including mobile or cart vendors and 86 stores, the report relays. "The bulk of the work and the reconstruction has already been finished. What remains are details in the common areas to replace certain things," Ayala said, the report notes. The report relays that the Gap will reopen on Sept. 26, and Banana Republic and Novus will do so at the end of October, he said, but other stores had to pull out and their spaces are now occupied by new renters. Given the possibility that another storm may strike the island at some point, Ayala said that the mall administrators have modified certain areas of the facility, including the water drainage system from the roof and the walls, the report notes. Meanwhile, almost 100 percent of the island's agricultural production was destroyed, amounting to more than $2 billion in losses, while a number of government offices, including the Department of Justice facilities in San Juan, had to move to other locations in the capital, the report adds. 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: Axar Entities Support Reorganization Merger -------------------------------------------------------------- The Investment Manager, Axar GP, LLC and the Axar Vehicles have entered into a Voting and Support Agreement with the General Partner, GP Holdings, Robert Hellman, in his capacity as trustee under the Voting and Investment Trust Agreement for the benefit of American Cemeteries Infrastructure Investors, LLC pursuant to which each of the Axar Entities and ACII Entities agreed to, among other things, support a corporate reorganization on the terms outlined in the merger agreement entered into on Sept. 27, 2018 by and among StoneMor Partners L.P., the General Partner, GP Holdings and a wholly-owned subsidiary of the General Partner to convert the General Partner from a Delaware limited liability company into a Delaware corporation, to be named StoneMor Inc., whose common stock is expected to be listed for trading on the New York Stock Exchange. Pursuant to the Merger Agreement, (i) GP Holdings will contribute all of its Common Units to the General Partner and the General Partner will contribute GP Holdings' Common Units to a newly formed and wholly-owned subsidiary of the General Partner, (ii) Merger Sub will merge with and into the Partnership and each Common Unit (other than those held by LP Sub) will convert into the right to receive one share of common stock, par value $0.01 per share, of StoneMor Inc. As a result of the Merger Agreement, LP Sub will be the sole limited partner of the Issuer, StoneMor Inc. will continue to be the sole general partner of the Issuer, and each holder of Common Units (other than LP Sub) will become shareholders of StoneMor Inc. Pursuant to the VSA, the Axar Entities and the ACII Entities agreed to (i) vote their Common Units of the Issuer in favor of the corporate reorganization, and (ii) enter into a standstill limiting their respective actions with respect to the Issuer, in each case until the earliest of (A) the consummation of the reorganization, (B) the termination of the Merger Agreement, (C) the date that any amendment to the Merger Agreement is made that adversely affects the rights of any Axar Entity without the written consent of the Axar Entities and (D) June 30, 2019. The VSA also provides that each of the ACII Entities and the Axar Entities with the right to participate, prorata based on its respective ownership percentage of the outstanding equity in future equity raises, if any, by the Issuer. On Sept. 27, 2018, the Axar Entities entered into a Nomination and Director Voting Agreement with the General Partner, the ACII Entities pursuant to which each of the Axar Entities and ACII Entities agreed to, as a condition for entering into the VSA, among other things, certain post-conversion governance provisions relating to StoneMor Inc., including that the Merger Agreement for the corporate reorganization will provide for a nine member board of directors, with ACII having the right to designate two directors and the Investment Manager having the right to designate one director so long as each holds specified amounts of common stock, as well as a standstill agreement to be entered into by each of the Investment Manager and ACII limiting their respective actions with respect to StoneMor Inc. so long as each has board representation. The Director Voting Agreement also provides that each of the ACII Entities and the Axar Entities with the right to participate, pro rata based on its respective ownership percentage of the outstanding equity in future equity raises, if any, by StoneMor Inc. As of Sept. 27, 2018, Axar Capital Management, LP, Axar GP, LLC and Andrew Axelrod beneficially owned 6,872,773 Common Units Representing Limited Partnership Interests of StoneMor Partners L.P., which constitutes 18.1 percent of the Common Units outstanding. A full-text copy of the regulatory filing is available at: https://is.gd/Hw16gi 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 316 cemeteries and 91 funeral homes in 27 states and Puerto Rico. 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." STONEMOR PARTNERS: Starts Process of Converting to Delaware Corp ---------------------------------------------------------------- StoneMor Partners L.P. has executed a definitive agreement that will result in the transition to a newly-created Delaware corporation, StoneMor Inc. Joe Redling, StoneMor's president and chief executive officer said, "We are pleased to take this step to convert from a master limited partnership to a Delaware corporation, one of many initiatives underway to improve the operational and financial performance of our business. We believe this conversion will provide many benefits, including simplifying our tax structure and financial reporting obligations, broadening our investor base and improving our cost of capital over time." Key Transaction Details * All MLP unitholders will receive 1.0 share of StoneMor Inc. common stock in exchange for each common unit that they own. * All incentive distribution rights, the economic general partner interests in and control of the MLP will be exchanged for approximately 2.95 million shares of StoneMor Inc. common stock. * The Conflicts Committee of the Board of Directors of the General Partner (which consisted of independent directors), by special approval, unanimously approved the terms of the transaction and has recommended unitholders vote in favor of the transaction. * StoneMor's largest unitholder, Axar Capital Management, has agreed to vote in favor of the transaction and upon completion, can designate up to one nominee to StoneMor Inc.'s Board of Directors so long as it continues to at least 33% of the StoneMor Inc. common stock issued to it in the transaction. * American Cemeteries Infrastructure Investors, LLC may designate two directors to StoneMor Inc.'s Board of Directors so long as it owns at least 50% of the StoneMor Inc. common stock issued to it in the transaction. * While circumstances will vary on the tax position of each individual unitholder, based on analysis performed by the Partnership, it is not anticipated that the transaction will result in taxable gain for most unitholders. Continued Redling, "In recent months we have established a new operating structure based on three regional divisions and a general manager model that creates a clear focus on managing profitability down to the property level. We are actively addressing costs and overall profitability by executing a comprehensive expense reduction effort, and we are also reviewing our asset base to identify non-strategic properties or markets we may wish to divest in support of our turnaround efforts." Conditions to Closing Completion of the conversion is subject to customary conditions, including the affirmative vote of the holders of a majority of outstanding MLP units at a special meeting of the unitholders and an amendment to the MLP's credit agreement to permit the transaction. StoneMor is currently in the process of working with its lenders in order to obtain the necessary approvals. StoneMor is also required to become current with its financial filings before seeking the required unitholder vote. While StoneMor is working to satisfy each of these closing conditions as expeditiously as possible, it is not anticipated that the transaction will close before the first quarter of 2019, with the actual closing date dependent on the time necessary to satisfy such conditions. Advisors Vinson & Elkins LLP acted as legal counsel to the Partnership. Raymond James acted as independent financial advisor and Drinker Biddle & Reath LLP acted as independent legal counsel to the Conflicts Committee of the Board of the General Partner. 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 316 cemeteries and 91 funeral homes in 27 states and Puerto Rico. 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." STONEMOR PARTNERS: ACII Will Vote in Favor of Merger Transaction ---------------------------------------------------------------- American Cemeteries Infrastructure Investors, LLC and StoneMor GP Holdings LLC, had entered into a voting and support agreement among Axar Capital Management, LP, Axar GP, LLC, Axar Master Fund, Ltd. and StoneMor Partners L.P., pursuant to which, among other things, each of GP Holdings and ACII agreed, subject to certain terms and conditions, to vote (or cause the vote of, as applicable) all of the Common Units owned by it and its affiliates in favor of the approval and adoption of the Merger Agreement. On Sept. 27, 2018, StoneMor Partners L.P. announced it had entered into a merger and reorganization agreement with StoneMor GP LLC, StoneMor GP Holdings LLC and Hans Merger Sub, LLC, a wholly owned subsidiary of GP, pursuant to which, among other things, subject to the terms and conditions, (i) GP Holdings will contribute the 2,332,878 Common Units owned by it to GP and immediately following receipt thereof, GP will contribute the GP Holdings' Common Units to StoneMor LP Holdings, LLC, a Delaware limited liability company and wholly owned subsidiary of GP, (ii) GP will convert into a Delaware corporation to be named "StoneMor Inc." and all of the limited liability company interests of GP held by GP Holdings prior to the Conversion will be cancelled in accordance with the Merger Agreement and (iii) Merger Sub will be merged with and into the Issuer with the Issuer surviving and with StoneMor Inc. as its sole general partner and LP Sub as its sole holder of Common Units and each outstanding Common Unit (other than those held by LP Sub) being converted into the right to receive one share of common stock, par value $0.01 per share, of StoneMor Inc. In connection with the Transaction, and concurrently with the execution and delivery of the Merger Agreement, ACII and GP Holdings entered into a nomination and director voting agreement with the Axar Entities and GP, pursuant to which, among other things, GP agreed, subject to the terms and conditions set forth therein, to permit ACII to designate up to two nominees to the board of directors of StoneMor Inc. As of Sept. 27, 2018, ACII and its affiliates beneficially owned the following Common Units Representing Limited Partner Interests of StoneMor Partners: Units Percentage of Beneficially Outstanding Reporting Person Owned Units ---------------- ------------ ------------- American Cemeteries 2,364,162 6.2% Infrastructure Investors, LLC AIM Universal Holdings, LLC 2,364,162 6.2% StoneMor GP Holdings LLC 2,332,878 6.1% Matthew P. Carbone 2,364,162 6.2% Robert B. Hellman, Jr. 4,732,751 12.5% The percentages are calculated based upon 37,958,645 Common Units outstanding on June 20, 2018, as disclosed by the Issuer on its annual report on Form 10-K, filed July 17, 2018. A full-text copy of the regulatory filing is available at: https://is.gd/Lpdvm3 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 316 cemeteries and 91 funeral homes in 27 states and Puerto Rico. 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." ================================ T R I N I D A D & T O B A G O ================================ TRINIDAD & TOBAGO: Tewarie Has Concerns on IMF Report ----------------------------------------------------- Ria Taitt at Trinidad Express reports that Caroni Central MP Dr. Bhoe Tewarie expressed concern about the fact that the International Monetary Fund Article IV report contained just a one-line reference to Petrotrin. Speaking to reporters after the sitting of the House of Representatives, Mr. Tewarie concluded that this meant that none of the numbers used by the IMF in the writing of the Article IV Report took into account the impact of the closure of the refinery and the consequences of decisions about Petrotrin, according to Trinidad Express. ================= V E N E Z U E L A ================= VENEZUELA: Migrants Seek New Lives in Southern Brazil ----------------------------------------------------- EFE News reports that fear and uncertainty traveled alongside hope and expectation on a plane taking 230 Venezuelans from northern to southern Brazil, where they will attempt to remake their lives and escape the crisis that has hit their country. The Brazilian Air Force's (FAB) Boeing C767 left from Boa Vista - the capital of the northern border state of Roraima - toward Porto Alegre carrying men, women and children who had been staying in shelters for Venezuelan migrants during the last few months, according to EFE News. "Is it very cold in Porto Alegre?," some of the Venezuelans asked with concern, many of whom come from tropical areas on the Caribbean coast, like La Guaira, Chichiriviche, Cumana or Isla de Margarita, a tourist Mecca that has suffered from Venezuela's economic, social and political crisis, the report notes. Among those who will attempt to remake their lives in Canoas, near Porto Alegre, is lawyer Leonardo Yegres, who arrived in Roraima from Cumana, in eastern Venezuela, along with his wife, Adriana, his daughter, who is 11 years old, and their six-year-old poodle "Princesa," the report relays. Mr. Yegres told EFE that, when he arrived in Boa Vista, authorities said "Princesa" couldn't stay in the shelter because of health reasons. "I slept on the streets several days with the dog, and then a woman accepted to keep her at her home," the lawyer said, adding that he and his family had nearly decided to relinquish their place on the FAB plane because of Princesa, the report notes. "I had to fight against wind and storm. I spoke to people from the armed forces, from humanitarian organizations, but they said I couldn't take her on the plane," the report quoted Mr. Yegres as saying. One day before the flight, Mr. Yegres met Social Development Minister Alberto Beltrame, who was visiting some of the shelters for Venezuelan migrants in Boa Vista and who solved the issue on the spot, the report relays. "He spoke to some military officers and they authorized us to travel with Princesa. And here we are, ready for a new life," Yegres said next to his family and the dog as they arrived in Porto Alegre, 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'. *********** 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 * * *