/raid1/www/Hosts/bankrupt/TCRLA

/raid1/www/Hosts/bankrupt/TCRLA_Public/181105.mbx T R O U B L E D C O M P A N Y R E P O R T E R L A T I N A M E R I C A Monday, November 5, 2018, Vol. 19, No. 219 Headlines B A R B A D O S BARBADOS: Central Bank Governor Says Growth Will be Slow H O N D U R A S INVERSIONES ATLANTIDA: Fitch Hikes LT IDRs to B+, Outlook Stable J A M A I C A DIGICEL GROUP: Extends Deadline for Bondholders to Nov. 16 * JAMAICA: Unemployment Rate Falls to Record Low at 8.4% M E X I C O BANCO AHORRO: S&P Lowers Global Scale Issuer Credit Rating to 'B-' GRUPO FAMSA: S&P Lowers Global Scale Issuer Credit Rating to 'B-' GRUPO IDESA: Fitch Downgrades Issuer Default Rating to CCC RASSINI SAB: S&P Places BB Issuer Credit Rating on Watch Neg. P U E R T O R I C O ISLAND FESTIVAL: Plan Outline Okayed, Plan Hearing on Dec. 7 MONITRONICS INTERNATIONAL: Will Report Q3 Results on Nov. 5 TOYS R US: Exclusive Plan Filing Period Extended Thru Nov. 12 T R I N I D A D & T O B A G O PETROLEUM CO: Begins Importing Fuels V E N E Z U E L A VENEZUELA: Children Die From Deficient Medical Services, NGO Says X X X X X X X X X * BOND PRICING: For the Week October 29 to November 2, 2018 - - - - - =============== B A R B A D O S =============== BARBADOS: Central Bank Governor Says Growth Will be Slow --------------------------------------------------------- Caribbean360.com reports that the Central Bank of Barbados is reporting some successes in the debt restructuring and public sector reform initiative under the Barbados Economic Recovery and Transformation (BERT) program being implemented by government, according to Caribbean360.com. But Governor Cleviston Haynes said the adjustment efforts are expected to dampen economic activity and the country is projected to record negative growth of 0.25 per cent to 0.75 per cent for 2018, the report notes. In his review of the economy up to September of this year, Haynes delivered good news in some areas, the report relays. For instance, he said the slide in the country's international reserves had abated, the report notes. Gross reserves increased by $104 million between late March and the end of September, almost 80 per cent of which occurred from June, a month after the new government took office, the report discloses. "The recovery in reserves was principally driven by the suspension of external debt service which alleviated pressure on foreign exchange outflows," Mr. Haynes explained, the report says. He also noted that the suspension resulted in interest payments being lowered by BDS$105 million (US$52.5 million), substantially cutting the share of revenue absorbed by interest payments, the report relays. Government has also been able to slash its capital spending and transfers and subsidies, a key requirement under the IMF-funded BERT program; the pressure on the Central Bank to finance Government has eased considerably; and the new Fuel Tax which replaced Road Tax on July 1 this year has raised over BDS$8 million (US$4 million) since its inception, the report notes. The report relays that the Central Bank Governor also noted that the abolition of the National Social Responsibility Levy (NSRL) was also paying off. "Given the elimination of the NSRL, the inflation rate is expected to fall. The current forecast for inflation for 2018 and 2019 is now 4.3 per cent and 2.7 per cent, respectively," he said, although noting that volatile oil prices remain a threat to the trajectory of the inflation rate, the report notes. Amid the encouraging indicators, however, the Central Bank said that economic growth remains a challenge, the report discloses. "Preliminary data suggest that economic activity in Barbados contracted by 0.5 per cent during the first nine months of the year, as reduced activity in the construction sector and the impact of tighter fiscal policy on domestic consumption offset modest gains in the tourism sector. "Long-stay tourist arrivals were 2.9 per cent higher than for the corresponding period of 2017 but the continued decline in average length of stay contained the increase to 1.4 per cent in tourism activity. The United States and Canadian markets registered growth of 8.7 per cent and three per cent, respectively. However, arrivals from the United Kingdom grew more modestly, as weaker economic growth and a relatively weak pound hampered growth in this market. Cruise arrivals also declined (2.9 per cent) as the number of cruise ship visits to the island fell by almost 10 per cent," the report quoted Mr. Haynes as saying. Output in the construction sector is also estimated to have declined significantly as there were no new large-scale private sector projects to replace a major hotel project that was completed in 2017, notes the report. In addition, public sector infrastructural development also declined in the context of Government's financing constraints and the consequent reduction in capital expenditure, the report relays. The Central Bank Governor said the outlook for the Barbados economy is for a sustained recovery and a strengthening of performance indicators over the medium term, the report says. However, he said, actual outcomes will be influenced by Government's success in implementing the program that it has agreed with the IMF. "In this regard, meeting the targets under the programme criteria will unlock additional foreign inflows from the IMF and our multilateral partners and facilitate a further build-up of reserves," the report quoted Mr. Haynes as saying. He cautioned that the adjustment efforts are expected to dampen economic activity.. "The Bank now expects negative growth of 0.25 to 0.75 per cent for 2018. Output in 2019 is forecast to be in the range of 0.5 per cent to one per cent, but the actual outcome will be influenced by the speed with which new investments, particularly in the private sector occur. These have the potential to absorb some of the labour that government is shedding," Mr. Haynes said, the report adds. As reported in the Troubled Company Reporter-Latin America on Oct. 19, 2018, S&P Global Ratings lowered its issue-level ratings on Barbados' local currency issues outstanding to 'D' (default) from 'CC'. At the same time, S&P Global Ratings affirmed its 'SD/SD' (selective default) long- and short-term foreign and local currency sovereign credit ratings on the country, and its 'D' (default) ratings on Barbados' rated foreign-currency issues. Finally, S&P Global Ratings affirmed its 'CC' transfer and convertibility assessment on the country. =============== H O N D U R A S =============== INVERSIONES ATLANTIDA: Fitch Hikes LT IDRs to B+, Outlook Stable ---------------------------------------------------------------- Fitch Ratings has upgraded Inversiones Atlantida, S.A. y Subsidiarias (Invatlan) and Banco Atlantida, S.A.'s (Atlantida) Long-Term (LT) Foreign and Local Currency Issuer Default Ratings (IDRs) to 'B+' from 'B' with a Stable Outlook. Atlantida's Viability Rating (VR) is also upgraded to 'b+' from 'b'. Fitch's appreciation of Honduran improved macroeconomic performance and stabilized political environment leads the upgrade of Atlantida's VR and LT IDRs due to the operating environment highly influence the rating of the bank. Fitch's opinion of the Honduran banks' operating environment considers that the completion of the IMF Stand-By Agreement improved policy credibility, economic growth and set the general government debt on a sustainable path. The upgrade of Invaltan's IDRs is based on its creditworthiness being highly aligned to that of its main operating subsidiary (Atlantida) based on its status of pure holding company with low ability to generate profits on an unconsolidated basis and ample dependence on dividends flows from its subsidiaries to meet its financial commitments. KEY RATING DRIVERS Atlantida IDRS, VR AND SENIOR DEBT The bank's IDRs are driven by its intrinsic creditworthiness as reflected in its VR of 'b+'. Atlantida's ratings continue to be highly influenced by the Honduran operating environment and its company profile. The ratings are also moderately influenced by the bank's modestly improving asset quality, moderate profitability, stable funding and liquidity profiles, as well as a capital position commensurate to its rating category. In Fitch's opinion, Atlantida's well positioned franchise and relatively diversified business model has enabled it to sustain a stable financial performance over the economic cycle. As of June 2018, Atlantida was the second largest bank in Honduras in terms of assets and loan portfolio, and the first in customer deposits. However, despite Atlantida's strong franchise and market position in Honduras, it is small on a global basis. Atlantida's asset quality is controlled and supported by a gradual decline of its non-performing loan (NPL) ratios, albeit still above the local industry average. At the end of the first semester of 2018 (1S18) Atlantida's NPL ratio was 2.5% (considering contingent loans), below the 3.3% average for 2013-2017. Concentrations remain high, as of June 2018, the top 20 borrowers represented 2.5x Atlantida's Fitch Core Capital (FCC). The bank's profitability levels are good despite the bank main focus on lending to companies. At the same date, operating profitability to risk weighted assets (RWAs) stood at 1.9% benefited by low funding costs and controlled credit expenses, which have gradually counterbalanced the bank's still unfavourable operative efficiency than peers. Fitch considers Atlantida's funding and liquidity profile to be one of the bank strengths due to its strongly reliance on a stable customer deposit base that is underpinned by the bank's strong franchise and ample branch network in the country. Atlantida's loan to deposits ratio is the best of the Honduran banks. As of June 2018, the ratio stood below 90% despite the continued expansion on the banking book. The bank's capitalization is commensurate to the 'B' category range. The FCC to RWAs ratio (calculated as reported equity minus intangibles, goodwill and pre-paid expenses) of the bank was 9.2% as of June 2018, lower than the 2015-2017 11% average. Atlantida received a capital infusion of HNL 500 million as of September, 2018. The expected senior notes are rated at the same level as the bank's IDR due to its senior unsecured features. In accordance with Fitch's rating criteria, the recovery prospects of the senior unsecured debt of Atlantida is average and is reflected in a recovery rating of 'RR4'. SUPPORT RATING AND SUPPORT RATING FLOOR Atlantida's Support Rating (SR) of '5' and Support Rating Floor (SRF) of 'NF' indicate that despite Atlantida sizable market share in deposits Fitch believes that external support cannot be relied upon, due to Honduras's limited ability to provide such support. Invatlan IDRS AND SENIOR DEBT Invatlan's IDRs reflect the creditworthiness of its main subsidiary, Atlantida in Honduras, rated 'B+' on the international scale by Fitch. The ratings also consider Invatlan's high operational integration with its operating subsidiaries, as well as the light restrictions on subsidiaries upstreaming liquidity to Invatlan. Invatlan's ratings also reflect the expected moderate levels of double leverage. As of June 2018, this ratio was close to 112% and it is expected to increase due to the holding's business expansion plans. The senior notes are rated at the same level as Invatlan's IDRs, as despite being senior secured and unsubordinated obligations, in Fitch's view, the collateral mechanism would not have a significant impact on recovery rates. In accordance with Fitch's rating criteria the recovery prospects is average and is reflected in a recovery rating of 'RR4'. RATING SENSITIVITIES Atlantida IDRS, VR AND SENIOR DEBT Upside potential for Atlantida's IDRs could only come from further improvements of the Honduran operating environment. In turn, although it is not Fitch's baseline scenario, the ratings could be downgraded in the event of material deterioration in the asset quality that negatively affects its operating profitability and lead to a marked weakening of the bank's capital position. The global senior unsecured debt rating would mirror any change to Atlantida's IDRs. SUPPORT RATING AND SUPPORT RATING FLOOR Honduras's propensity or ability to provide timely support to Atlantida is not likely to change given the operating environment structural weaknesses. As such, the SR and SRF have limited upside potential. Invatlan IDRS AND SENIOR DEBT Invatlan's ratings will likely move in line with that of those of its main subsidiary, Atlantida. Also, Invatlan's IDRs could be downgraded by one notch if the company's double-leverage ratio is sustained above 120%. The global senior secured debt rating would mirror any change to Invatlan's IDRs. Fitch has upgraded the following ratings: Invatlan -- Long-Term Foreign and Local Currency Issuer Default Ratings (IDRs) to 'B+' from 'B'; Outlook Stable; -- USD150 million senior secured notes to 'B+'/'RR4' from 'B'/'RR4'. Atlantida -- Long-Term Foreign and Local Currency IDRs to 'B+' from 'B'; Outlook Stable; -- Viability Rating to 'b+' from 'b'; -- Five-year USD350 million senior unsecured notes to 'B+(EXP)'/'RR4' from 'B(EXP)'/'RR4'. Fitch has affirmed the following ratings: Invatlan -- Short-Term Foreign and Local Currency IDRs at 'B'. Atlantida -- Short-Term Foreign and Local Currency IDRs at 'B'; -- Support Rating at '5'; -- Support Rating Floor at 'NF'. ============= J A M A I C A ============= DIGICEL GROUP: Extends Deadline for Bondholders to Nov. 16 ---------------------------------------------------------- RJR News reports that Digicel Group Limited has again extended a deadline for its bondholders to accept an offer to swap US$3 billion of outstanding debt for new securities with later maturity dates. The new deadline is November 16. If accepted by lenders, the deal will push back maturities on Digicel bonds scheduled to fall due in 2020 and 2022, according to RJR News. The original early tender deadline for the offer was September 14, but has been continually pushed back, reflecting resistance from lenders to the terms on offer, the report notes. In a statement announcing the extension, Digicel said it continues to have constructive discussions with an ad hoc group of noteholders regarding the offer, the report relays. Until the latest extension the deadline was set for Nov. 2. Digicel's owner, Denis O'Brien has proposed a deal that includes a new corporate structure in which new debt will be issued from two new holding companies inserted between its holding company Digicel Group Limited and operating company Digicel Limited, the report adds. As reported in the Troubled Company Reporter-Latin America on July 5, 2018, Moody's Investors Service has changed to negative from stable the outlook on the ratings of Digicel Group Limited ("Digicel", "DGL" or the "company") and Digicel Limited ("DL") and assigned a negative outlook to Digicel International Finance Limited ("DIFL"). At the same time, Moody's has affirmed DGL's B2 corporate family rating (CFR) and B2-PD probability of default rating (PDR), as well as the B1 rating on the unsecured notes of DL and the Ba2 rating on the secured bank credit facilities of DIFL. * JAMAICA: Unemployment Rate Falls to Record Low at 8.4% -------------------------------------------------------- LoopJamaica reports that strong job growth has led to a further 2.9 per cent decline in the unemployment rate which stood at a record low 8.4 per cent as of July 2018. The Labour Force Report of the Statistical Institute of Jamaica (STATIN) said the job growth was strongest among the 'service workers and shop and market sales workers' occupation group, as well as construction workers, according to LoopJamaica. According to the report, service workers and shop and market sales workers' grew by 13,600 persons, from 277,100 in July 2017 to 290,700 in July 2018, LoopJamaica notes. It said workers in the construction sector grew by 9,400 to 103,700 during the same period, the report relays. STATIN has also attributed the decline in the unemployment rate to an increase in the number of persons employed and a simultaneous reduction in the number of persons in the labor force, the report discloses. "This decrease was reflected in a decline in both the male and female unemployment rates. Male unemployment rate declined by 2.2 percentage points, to 5.8 per cent. The female unemployment rate declined by 3.8 percentage points, to 11.4 per cent," STATIN said, the report relays. At the same time, STATIN said the number of unemployed youth, aged 14 to 24 years, decreased by 14,600 persons to 45,200 in July 2018, the report discloses. The total number of persons employed as at July 2018, stood at 1,226,400. This represented an increase of 12,800 persons when compared to July 2017, the report relays. The number of males employed increased by 5,900 to 681,800, while female employment increased by 6,900 to 544,600, the report notes. Meanwhile, STATIN said the labour force, as at July 2018, was 1,338,200 persons, a decrease of 2.2 per cent compared to July 2017, the report adds. As reported in the Troubled Company Reporter-Latin America on Sept. 27, 2018, S&P Global Ratings revised its outlook on Jamaica to positive from stable. At the same time, S&P Global Ratings affirmed its 'B' long- and short-term foreign and local currency sovereign credit ratings, and its 'B+' transfer and convertibility assessment on the country. =========== M E X I C O =========== BANCO AHORRO: S&P Lowers Global Scale Issuer Credit Rating to 'B-' ------------------------------------------------------------------ S&P Global Ratings said it has lowered its long-term global scale issuer credit rating to 'B-' from 'B' and its national scale issuer credit rating to 'mxB' from 'mxBBB-' on Banco Ahorro Famsa S.A. Institucion de Banca Multiple (BAF). At the same time, S&P lowered the short-term national scale rating to 'mxB' from 'mxA- 3'. The outlook on both scale ratings remains negative, reflecting that on its ultimate parent. The downgrade of Grupo Famsa, S.A.B. de C.V. (GFamsa; global scale: B-/Negative/--; national scale: mxB/Negative/--) reflects its liquidity constraints because initiatives to strengthen its operating and financial performance haven't been sufficient to improve cash flow generation. Despite GFamsa's short-term debt reduction by around 20% in the past six months, liquidity pressures still stem from working capital needs and other short- term obligations that could further rise if GFamsa doesn't extend its debt maturity profile to mitigate potential refinancing risks. The company plans to extend maturity on its $140 million senior unsecured notes due May 2020. Failure to do so within six months would result in a one-notch downgrade. S&P considers BAF to be a core subsidiary of GFamsa because it believes both entities share the same customer base, brand, and reputation. Additionally, BAF's strategy is closely linked to GFamsa's strategy; as well, it's highly unlikely the bank will be sold. GFamsa has shown a strong and long-term commitment to the bank by supporting it through ongoing capital injections. The issuer credit ratings on the bank continue reflecting its revenue concentration in the retail segment and its small market share in the Mexican banking system, while it maintains a forecasted risk-adjusted ratio capital (RAC) ratio of about 8.6% for the next 12 months. The ratings also take into account BAF's weaker asset quality metrics. Finally, the bank's funding structure is based on customer deposits, and it has sufficient liquidity levels to support all operations. BAF's stand-alone credit profile (SACP) remains at 'bb-'. Therefore, the ratings on its ultimate parent mainly limit those on BAF. The negative outlook on BAF in the next 12 months mainly reflects that on its parent because we view the bank as a core subsidiary. The negative outlook on GFamsa reflects a potential for another one-notch downgrade if the company fails to to refinance its senior unsecured notes due May 2020 within the next six months, resulting in a higher refinancing risk. S&P said, "We could lower the ratings on the bank in the next 12 months if the parent's higher refinancing risk could erodes BAF's liquidity as a result of its exposure to the group. The latter would be reflected in a possible drop in deposits or certain pressures on the capital base. If the bank's business profile deteriorates, we could also lower the rating." If BAF's liquidity can withstand a possibly higher refinancing risk of GFamsa, we could revise the outlook on the bank to stable. GRUPO FAMSA: S&P Lowers Global Scale Issuer Credit Rating to 'B-' ----------------------------------------------------------------- S&P Global Ratings lowered its global scale issuer credit rating on Grupo Famsa, S.A.B. de C.V. (GFamsa) to 'B-' from 'B'. S&P said, "At the same time, we lowered our national scale issuer credit rating to 'mxB' from 'mxBBB-'. We also lowered our issue- level rating on GFamsa's debt to 'B-' from 'B'. The '3' recovery rating on the company's rated debt, which indicates our expectation of meaningful (50%-90%; rounded estimate 65%) recovery prospects for the bondholders in the event of a payment default, remains unchanged." The outlook remains negative. The downgrade reflects the company's liquidity constraints because initiatives to strengthen its operating and financial performance haven't been sufficient to improve cash flow generation. Despite GFamsa' short-term debt reduction by around 20% in the past six months, liquidity pressures still stem from working capital needs and other short-term obligations that could further rise if GFamsa doesn't extend its debt maturity profile to mitigate potential refinancing risks. The company has a liability management plan to extend maturity on its $140 million senior unsecured notes due May 2020. Failure to do so within six months would result in a one- notch downgrade. GFamsa's financial performance and credit metrics remain weak. The company carries substantial operating leases that pressure its leverage metrics, because almost half of the adjusted debt stems from this adjustment. Also, GFamsa continues to face foreign- exchange risk on its senior unsecured notes because the company hasn't hedged such exposure, and the Mexican peso to the dollar exchange rate remains highly volatile. Fierce competition from retailers, which have a stronger competitive position and larger scale across Mexico, is still pressuring the company's top-line growth and EBITDA margin, which has decreased in the last few quarters to 17%-18%. This trend reflects increases in payroll and advertising associated with a more aggressive sales effort. GFamsa continues to have a significant presence in northern Mexico, while its captive finance division, Banco Ahorro Famsa S.A. Institucion de Banca Multiple, maintains a solid performance. GRUPO IDESA: Fitch Downgrades Issuer Default Rating to CCC ---------------------------------------------------------- Fitch Ratings has downgraded the Long-Term Local and Foreign Currency Issuer Default Ratings of Grupo IDESA, S.A. de C.V. to 'CCC' from 'B-'. In addition, the senior unsecured notes were downgraded to 'CCC'/'RR4' from 'B-'/'RR4'. KEY RATING DRIVERS The downgrade reflects Fitch's expectation that IDESA's credit profile will be consistent with that of a 'CCC' credit over the next 12-24 months, absent major debt refinancing and the receipt of cash flows from Braskem IDESA of at least USD50 million per year. The company faces large debt maturities including accrued interest of approximately USD480 million due 2020. This figure compares with projected operating EBITDA, including dividends from IDESA's joint ventures, of around USD55 million-65 million and a cash position covering only about 70% of IDESA's short-term debt of USD39 million. Dividends from Braskem-IDESA, the company's largest JV investment, are restricted by project financing until certain financial and operating benchmarks are achieved. The uncertainty surrounding the amount and timing on these cash flows combined with IDESA's large debt burdenand weak liquidity relative to approaching large debt maturities, are a key consideration in the rating downgrade. Braskem IDESA's utilization rate was 79% during the first half of 2018, making it increasingly unlikely that utilization rates for full year 2018 will be above 85%, a level previously stated by Fitch as a negative rating sensitivity. Low utilization rates were due partly to lower ethane feedstock supplied by Pemex. High Leverage: IDESA's operating EBITDA declined to USD25 million in 2017 from USD40 million in 2016. As of the LTM ended June 30, 2018, IDESA's Operating EBITDA was USD24 million, resulting in a net leverage ratio of 14.2x. Leverage increased due to lower production volumes, a result of declining feedstock from PEMEX. Fitch's forecast suggests net leverage would remain elevated in 2019 at around 12x absent contributions from Braskem IDESA, as underlying petrochemical spreads recover modestly and the ethylene oxide (EO) shortage does not abate materially. Joint Venture Investments: IDESA contributed USD513 million to Braskem-IDESA, and most of IDESA's current debt was used to support its 25% stake in this venture. IDESA's 25% stake represents USD158 million of the total EBITDA generated by the JV of USD633 million as of the LTM to June 30, 2018. This facility is capable of producing 1.0 million tons of polyethylene per year. IDESA's other equity investments include CyPlus-IDESA, a 50/50 JV with Evonik Industries AG that owns a sodium-cyanide production facility. This plant's capacity is 40,000 mt and generated about USD1 million in dividends to IDESA during the first six months of 2018. Distribution Core Business: IDESA generated 44% of its EBITDA from the distribution of solvents and chemicals within Mexico and 50% from chemicals manufacturing, with most of the remaining from chemical storage and handling services, during the first six months of 2018. IDESA's distribution business has grown steadily due to Mexico's industrialization. This segment has become IDESA's main cash flow generating business as its petrochemical segment has significantly contracted over the last three years and more recently has been volatile. High Reliance on Commodity Chemicals: IDESA has limited pricing power with its suppliers and customers, as the company's main product prices are based on international reference prices and are somewhat correlated to the price of oil. The price of ethane-based EO, main raw material in the production of ethylene glycols and ethanol amines, increased in 2016 and 2017 due to tight EO supply in Mexico. Fitch expects this tightness to continue; modest upward movement in reference prices of EO due to higher demand for ethane in North America is also expected. DERIVATION SUMMARY IDESA's vertical integration is limited and its product portfolio is more dependent on feedstock and product price dynamics. This limited pricing power creates higher volatility for cash flows when compared to peers such as Cydsa, S.A.B. de C.V. (BB+) that have a predominantly domestic profile. IDESA's scale and cost position mostly as a converter or distributor is consistent with those of companies in the low 'BB' to 'B' rating categories. Companies rated at those levels include Kronos Worldwide (B+) and Shandong Yuhuang Chemical (B). Weak product spreads and lack of feedstock, combined with high debt used to fund investments, have significantly pressured IDESA's financial profile and increased its reliance on expected cash flows from Braskem-IDESA, and in continued growth in chemical distribution activities. IDESA's financial profile is significantly pressured and consistent with that of a 'CCC' credit. KEY ASSUMPTIONS Fitch's Key Assumptions Within Its Rating Case for the Issuer -- Revenue, measured in U.S. dollars, remain relatively flat over the intermediate term. Petrochemical prices spike in 2018 before moderating in 2019 and 2020 in line with Fitch's Brent oil price deck expectations of USD60/bbl in 2019 and USD57.5/bbl in 2020. -- EBITDA recovers in 2018 and 2019 to USD35 million-USD40 million reflecting higher petrochemical spreads and somewhat more stable feedstock supply. -- Cash flows received from Braskem-IDESA of USD25 million in 2019 and 2020. RATING SENSITIVITIES Developments That May, Individually or Collectively, Lead to Positive Rating Action -- Refinancing of long-term debt at IDESA and constant annual dividend flow at least of USD50 million from Braskem IDESA; -- Capital infusions or material asset sales that improve IDESA's liquidty profile and capital structure. Developments That May, Individually or Collectively, Lead to Negative Rating Action --Failure to improve liquidity; --Perception of risks on meeting interest payments; --Operational pressures resulting in Operating EBITDA / Interest expense below 1x; --Lower than expected cash flows from JV's. LIQUIDITY AND DEBT STRUCTURE Tight Liquidity: IDESA's intrinsic liquidity is tight. The company faces large debt maturities, including accrued interest of approximately USD480 million due 2020. These compare with cash of USD24 million and a projected cash flow from operations (CFFO) of approximately USD30 million. IDESA's funds from operations (FFO) was a negative USD3 million as of LTM to second-quarter 2018 compared with USD3 million a year ago. Working capital requirements have resulted in negative CFFO of USD10 million and a negative FCF of USD16 million during the LTM ended June 30, 2018. IDESA funded negative FCF during the last 12 months mostly through debt. The company's cash to short-term debt was 0.7x as of second- quarter 2018. Short-term debt consisted of USD39 million in revolving credit facilities. IDESA's debt consisted of USD300 million of notes due December of 2020 and USD130 million due June 2020 form an Inbursa line of credit and bank debt. Inbursa's line accrues interest which Fitch estimates will be around USD50 million at maturity. The company received USD7.5 million from Braskem-IDESA during 2018 resulting from the disbursement of an unspent capex reserve. RASSINI SAB: S&P Places BB Issuer Credit Rating on Watch Neg. ------------------------------------------------------------- S&P Global Ratings said it has placed its long-term 'BB' issuer credit rating on Rassini on CreditWatch with negative implications. The CreditWatch negative on the rating follows Rassini's announcement of a proposed offer to purchase 55% of its free- floating shares, for a total transaction value of around $365 million, which would be fully financed with debt. S&P said, "In our view, this announcement represents a departure from the company's leverage policy, and would trigger a spike in its debt- to-EBITDA ratio, which would deviate from a level consistent with our current assessment of the company's financial risk profile. Over the last few years, Rassini consistently improved its leverage metrics, reaching a debt-to-EBITDA ratio of about 0.7x as of Sept. 30, 2018. Upon closing the proposed transaction, we estimate that Rassini's debt-to-EBITDA ratio would exceed 3.0x and would reach around 2.2x in 2020." Over the last few years, Rassini has built a track record of financial discipline that has focused on lowering leverage and protecting liquidity. S&P said, "In particular, our current assessment of the company's financial policy incorporates our expectation that the company's leverage tolerance is between 2.0x and 2.5x debt to EBITDA at all times. However, as noted, the proposed debt-financed transaction would result in a debt-to- EBITDA ratio above 3.0x, which in our view indicates that the company has a more aggressive financial policy." S&P said, "We expect to resolve the CreditWatch listing within the next 90 days, once the proposed transaction is completed and we determine how it will affect Rassini's leverage metrics. We could lower the rating by up to two notches, which would capture both the worsening of Rassini's leverage metrics and our reassessment of the company's financial policy." ====================== P U E R T O R I C O ====================== ISLAND FESTIVAL: Plan Outline Okayed, Plan Hearing on Dec. 7 ------------------------------------------------------------ The U.S. Bankruptcy Court for the District of Puerto Rico will consider approval of the Chapter 11 plan of reorganization for Island Festival Rentals and Recycling Corp. at a hearing on Dec. 7, at 9:30 a.m. The hearing will be held at Jose V. Toledo Federal Building and U.S. Courthouse, Courtroom 1. The court will also consider at the hearing the final approval of the company's disclosure statement, which it conditionally approved on Oct. 30. The latest plan proposes to pay creditors holding Class 7 general unsecured claims 4.36% or $15,000 of their allowed unsecured claims. Island Festival will make one payment of $15,000 on the effective date of the plan unless unsecured creditors agree with the company to a different treatment. Island Festival estimates the total amount of Class 7 general unsecured claims at $343,862, according to the company's amended disclosure statement filed on Oct. 25. A copy of the amended disclosure statement is available for free at: http://bankrupt.com/misc/prb17-01377-280.pdf About Island Festival Rentals Island Festival Rentals and Recycling Corp., a Commonwealth of Puerto Rico corporation, was established by Wilfredo Medina Ramirez, who presently serves as president. It is dedicated to operate a business engaged in the recycling and sale of metals. It is also engaged in the rental of party equipment for events. Its main place of business is located at Carr. 181 Ramal 8860 KM 5.9 Bo. Las Cuevas Trujillo Ato, PR 00976. In addition to this property, debtor has a lease in a commercial property located at Parque Industrial Los Frailes, Sector Cubita, Guaynabo PR, in which the rental party equipment is kept and from where such part of the business operates. Island Festival Rentals and Recycling sought protection under Chapter 11 of the Bankruptcy Code (Bankr. D.P.R. Case No. 17- 01377) on Feb. 28, 2017. The petition was signed by Wilfredo Medina Ramirez, president. At the time of the filing, the Debtor estimated assets of less than $100,000 and liabilities of $1 million to $10 million. The case is assigned to Judge Edward A Godoy. The Debtor tapped Almeida & Davila, PSC as its legal counsel, and Tamarez CPA, LLC as its accountant. MONITRONICS INTERNATIONAL: Will Report Q3 Results on Nov. 5 ----------------------------------------------------------- Ascent Capital Group, Inc., the parent company of Monitronics International Inc. (doing business as "Brinks Home Security"), issued a press release announcing it will release its results for the three and nine months ended Sept. 30, 2018 before the market opens today, Nov. 5, 2018. Ascent will host a conference call that day at 9:00 a.m. ET in which management will provide an update on Ascent's operations, including the financial performance of its wholly owned subsidiary, Brinks Home Security, and may also discuss future opportunities. Participating on the call will be Ascent's Chairman, Bill Fitzgerald; Chief Executive Officer and General Counsel, William Niles; Executive Vice President, Jeffery Gardner; and Senior Vice President and Chief Financial Officer, Fred Graffam. Messrs. Niles, Gardner and Graffam are also executive officers of Brinks Home Security. To access the call please dial (888) 462-5915 from the United States, or (760) 666-3831 from outside the U.S. The conference call I.D. number is 2190818. Participants should dial in 5 to 10 minutes before the scheduled time and must be on a touch-tone telephone to ask questions. A replay of the call can be accessed through Nov. 19, 2018 by dialing (800) 585-8367 from the U.S., or (404) 537-3406 from outside the U.S. The conference call I.D. number is 2190818. This call will also be available as a live webcast which can be accessed at Ascent's Investor Relations Website at http://ir.ascentcapitalgroupinc.com/index.cfm. About Monitronics Farmers Branch, Texas-based Monitronics International, Inc. -- http://www.mymoni.com/-- provides residential customers and commercial client accounts with monitored home and business security systems, as well as interactive and home automation services. The Company is supported by a network of independent Authorized Dealers providing products and support to customers in the United States, Canada and Puerto Rico. Its wholly owned subsidiary, LiveWatch is a Do-It-Yourself home security firm, offering professionally monitored security services through a direct-to-consumer sales channel. Monitronics is a wholly-owned subsidiary of Ascent Capital Group, Inc. Monitroics was incorporated in the state of Texas on Aug. 31, 1994. At Dec. 31, 2017, the Company had more than 1,330 full-time employees and over 100 part-time employees, all of which are located in the United States. Monitronics reported net losses of $111.29 million in 2017, $76.30 million in 2016 and $72.44 million in 2015. As of June 30, 2018, the Company had $1.67 billion in total assets, $1.84 billion in total liabilities, and a total stockholders' deficit of $167.69 million. * * * In September 2018, S&P Global Ratings lowered its issuer credit rating on Monitronics to 'CC' from 'CCC'. The downgrade follows Monitronics' announcement on Aug. 30, 2018, of a proposed transaction to exchange its 9.125% senior unsecured notes due 2020 for a combination of new $585 million cash and paid-in-kind (PIK) (7.75% cash and 3.75% PIK) unsecured notes due 2023, up to $100 million of cash from parent company Ascent and warrants. Monitronics is also proposing amendments to eliminate the restrictive covenants governing the 2020 notes, including certain events of default. In July 2018, Moody's Investors Service, Inc., downgraded Monitronics International's Corporate Family Rating to 'Caa2', from 'B3'. The downgrade of Monitronics' CFR reflects strains on the company's liquidity and capital structure caused by impending maturities, as well as its continued lackluster operating performance. TOYS R US: Exclusive Plan Filing Period Extended Thru Nov. 12 -------------------------------------------------------------- BankruptcyData.com reported that the Court in the Toys "R" Us case has extended the periods during which the Debtors have an exclusive right to file a Chapter 11 Plan, and solicit acceptances thereof, through and including November 12, 2018, and January 11, 2019, respectively with the Court provided caveat ". . . that, solely with respect to the Taj Debtors, such extensions shall expire on 11:59 p.m. on October 29, 2018, unless prior to 11:59 p.m. on October 29, 2018, (a) the Taj Debtors have concluded an auction for the assets of, or direct or indirect interests in, TRU (Japan) Holdings Parent Ltd. and TRU Asia, LLC and such entities' direct and indirect subsidiaries and interests, including such entities' 84.87% interest in Toys (Labuan) Holding Limited, (the 'Asia JV'), (b) the Taj Debtors have selected a bid from the holders of the Taj senior note claims as the highest or otherwise best offer in the Asia JV sale process, or (c) the Court has entered an order further extending the exclusivity periods beyond October 29, 2018, for the Taj Debtors. About Toys "R" Us Toys "R" Us, Inc., was an American toy and juvenile-products retailer founded in 1948 and headquartered in Wayne, New Jersey, in the New York City metropolitan area. Merchandise was sold in 880 Toys "R" Us and Babies "R" Us stores in the United States, Puerto Rico and Guam, and in more than 780 international stores and more than 245 licensed stores in 37 countries and jurisdictions. Merchandise was also sold at e-commerce sites including Toysrus.com and Babiesrus.com. On July 21, 2005, a consortium of Bain Capital Partners LLC, Kohlberg Kravis Roberts, and Vornado Realty Trust invested $1.3 billion to complete a $6.6 billion leveraged buyout of the company. Toys "R" Us is a privately owned entity but still files with the U.S. Securities and Exchange Commission as required by its debt agreements. The Company's consolidated balance sheet showed $6.572 billion in assets, $7.891 billion in liabilities, and a stockholders' deficit of $1.319 billion as of April 29, 2017. Toys "R" Us, Inc., and certain of its U.S. subsidiaries and its Canadian subsidiary voluntarily filed for relief under Chapter 11 of the Bankruptcy Code (Bankr. E.D. Va. Lead Case No. Case No. 17-34665) on Sept. 19, 2017. In addition, the Company's Canadian subsidiary voluntarily commenced parallel proceedings under the Companies' Creditors Arrangement Act ("CCAA") in Canada in the Ontario Superior Court of Justice. The Company's operations outside of the U.S. and Canada, including its 255 licensed stores and joint venture partnership in Asia, which are separate entities, were not part of the Chapter 11 filing and CCAA proceedings. Grant Thornton is the monitor appointed in the CCAA case. Judge Keith L. Phillips presides over the Chapter 11 cases. In the Chapter 11 cases, Kirkland & Ellis LLP and Kirkland & Ellis International LLP serve as the Debtors' legal counsel. Kutak Rock LLP serves as co-counsel. Toys "R" Us employed Alvarez & Marsal North America, LLC as its restructuring advisor; and Lazard Freres & Co. LLC as its investment banker. It hired Prime Clerk LLC as claims and noticing agent. Consensus Advisory Services LLC and Consensus Securities LLC, serve as sale process investment banker. A&G Realty Partners, LLC, serves as its real estate advisor. On Sept. 26, 2017, the U.S. Trustee for Region 4 appointed an official committee of unsecured creditors. The Committee retained Kramer Levin Naftalis & Frankel LLP as its legal counsel; Wolcott Rivers, P.C., as local counsel; FTI Consulting, Inc. as financial advisor; and Moelis & Company LLC as investment banker. Toys "R" Us UK Toys "R" Us Limited, Toys "R" Us, Inc.'s UK arm with 105 stores and 3,000 employees, was sent into administration in the United Kingdom in February 2018. Arron Kendall and Simon Thomas of Moorfields Advisory Limited, 88 Wood Street, London, EC2V 7QF were appointed Joint Administrators on Feb. 28, 2018. The Administrators now manage the affairs, business and property of the Company. The Administrators act as agents only and without personal liability. The Administrators said they will make every effort to secure a buyer for all or part of the business. Liquidation of U.S. Stores Toys "R" Us, Inc., on March 15, 2018, filed with the U.S. Bankruptcy Court a motion seeking Bankruptcy Court approval to start the process of conducting an orderly wind-down of its U.S. business and liquidation of inventory in all 735 of the Company's U.S. stores, including stores in Puerto Rico. Propco I Debtors Toys "R" Us Property Company I, LLC and its subsidiaries own fee and leasehold interests in more than 300 properties in the United States. The Debtors lease the properties on a triple-net basis under a master lease to Toys-Delaware, the operating entity for all of TRU's North American businesses, which operates the majority of the properties as Toys "R" Us stores, Babies "R" Us stores or side-by-side stores, or subleases them to alternative retailers. Toys "R" Us Property was founded in 2005 and is headquartered in Wayne, New Jersey. Toys 'R' Us Property operates as a subsidiary of Toys "R" Us Inc. Company LLC, MAP Real Estate LLC, TRU 2005 RE I LLC, TRU 2005 RE II Trust, and Wayne Real Estate Company LLC -- Propco I Debtors -- sought protection under Chapter 11 of the Bankruptcy Code (Bankr. E.D. Va. Lead Case No. 18-31429) on March 20, 2018. The Propco I Debtors sought and obtained procedural consolidation and joint administration of their Chapter 11 cases, separate from the Toys "R" Us Debtors' Chapter 11 cases. The Propco I Debtors estimated assets of $500 million to $1 billion and liabilities of $500 million to $1 billion. Judge Keith L. Phillips presides over the Propco I Debtors' cases. The Propco I Debtors hired Klehr Harrison Harvey Branzburg, LLP; and Crowley, Liberatore, Ryan & Brogan, P.C., as co-counsel. The Debtors also tapped Kutak Rock LLP. They hired Goldin Associates, LLC, as financial advisors. ================================ T R I N I D A D & T O B A G O ================================ PETROLEUM CO: Begins Importing Fuels ------------------------------------ Carolyn Kissoon at Trinidad Express reports that state-owned Petroleum Co. of Trinidad & Tobago received its first shipment of refined fuel on Oct. 27, as the company begins to wind down its refinery operations. Petrotrin said the shipment was one of 16 cargoes that will be delivered during the next four months under an agreement with BP's Latin America Integrated Sales and Trading Group, according to Trinidad Express. As reported in the Troubled Company Reporter-Latin America on Sept. 28, 2018, Moody's Investors Service placed Petroleum Co. of Trinidad & Tobago's B1 corporate family rating and senior unsecured debt ratings on review for downgrade. This rating action was based on the lack of clarity regarding Petrotrin's new business profile and strategy as well as increasing liquidity risk related to the approaching maturity of the 2019 bonds. ================= V E N E Z U E L A ================= VENEZUELA: Children Die From Deficient Medical Services, NGO Says ----------------------------------------------------------------- EFE News reports that the NGO Prepara Familia reported that at least 19 Venezuelan children have died since 2017 because of defective kidney treatment in the country's most important pediatric hospital, and demanded that the government resume the transplant program suspended 17 months ago. "In the year 2017 we had 12 youngsters (who died) and in 2018 three more have died of poor nephrology treatment and four from unrelated illnesses," Prepara Familia Director Katherine Martinez told reporters outside the JM de los Rios Children's Hospital in downtown Caracas, according to EFE News. As reported in the Troubled Company Reporter-Latin America on June 1, 2018, S&P Global Ratings, in May 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'. ================= X X X X X X X X X ================= * BOND PRICING: For the Week October 29 to November 2, 2018 ----------------------------------------------------------- Issuer Name Cpn Price Maturity Country Curr ----------- --- ----- -------- ------- --- Banco do Brasil SA/Cayman 6.25 75.043 KY USD Rio Energy SA 6.875 71.638 2/1/2025 AR USD Cia Latinoamericana 9.5 60.447 7/20/2023 AR USD CSN Islands XII Corp 7 69.44 BR USD Agua y Saneamientos 6.625 71.982 2/1/2023 AR USD Odebrecht Finance Ltd 7.5 39.15 KY USD YPF SA 16.5 50.96 5/9/2022 AR ARS Odebrecht Finance Ltd 4.37 35.715 4/25/2025 KY USD Banco Macro SA 17.5 50 5/8/2022 AR ARS Odebrecht Finance Ltd 7.12 37.293 6/26/2042 KY USD China Huiyuan 6.5 75.1 8/16/2020 CN USD Odebrecht Finance 5.125 45.754 6/26/2022 KY USD Noble Holding 6.2 74.46 8/1/2040 KY USD Noble Holding 5.25 70.444 3/15/2042 KY USD Odebrecht Finance 7 58.985 4/21/2020 KY USD Noble Holding 6.05 73.508 3/1/2041 KY USD Odebrecht Finance 5.25 36.2 6/27/2029 KY USD Rio Energy SA 6.875 71.551 2/1/2025 AR USD BCP Finance Co 1.751 74.397 KY EUR Provincia del Chubut 4 10/21/2019 AR USD YPF SA 16.5 50.96 5/9/2022 AR ARS Argentina 7.125 76 6/28/2117 AR USD Automotores Gildemeister 6.75 62.759 1/15/2023 CL USD Odebrecht Finance 6 37.193 4/5/2023 KY USD Banco do Brasil 6.25 76.375 KY USD Cia Latinoamericana 9.5 60.621 7/20/2023 AR USD Polarcus Ltd 5.6 70 7/1/2022 AE USD Argentina 6.875 74.985 1/11/2048 AR USD Provincia del Chubut 7.75 72.304 7/26/2026 AR USD Banco Macro SA 17.5 50 5/8/2022 AR ARS CSN Islands XII Corp 7 74.375 BR USD Provincia de Rio Negro 7.75 70.153 12/7/2025 AR USD Provincia de Entre Rios 8.75 71.083 2/8/2025 AR USD Argentina 4.33 70 12/31/2033 AR JPY Provincia de Entre Rios 8.75 72.333 2/8/2025 AR USD Odebrecht Finance Ltd 4.375 35.242 4/25/2025 KY USD Ironshore Pharma 13 69.621 2/28/2024 KY USD Automotores Gildemeister 8.25 60.583 5/24/2021 CL USD Odebrecht Finance Ltd 7.125 38.674 6/26/2042 KY USD Odebrecht Finance Ltd 5.25 36.187 6/27/2029 KY USD Province of Santa Fe 6.9 74.177 11/1/2027 AR USD Provincia del Chubut 7.75 71.654 7/26/2026 AR USD Argentina 6.25 72.711 11/9/2047 AR EUR Cia Energetica 6.1827 1.105 1/15/2022 BR BRL Odebrecht Finance 7.5 43.5 KY USD Argentina 0.45 31.75 12/31/2038 AR JPY SACI Falabella 2 7/15/2020 CL CLP Province of Jujuy 8.625 72.788 9/20/2022 AR USD Province of Santa Fe 6.9 73.44 11/1/2027 AR USD Ironshore Pharma 13 69.621 2/28/2024 KY USD Tanner Servicios 3.8 52.42 4/1/2021 CL CLP AES Tiete Energia SA 6.78 1.06 4/15/2024 BR BRL Odebrecht Finance Ltd 6 37.19 4/5/2023 KY USD Provincia de Rio Negro 7.75 70.15 12/7/2025 AR USD Odebrecht Finance 7 59.466 4/21/2020 KY USD Odebrecht Finance Ltd 5.12 47.298 6/26/2022 KY USD Provincia de Cordoba 7.12 74.286 8/1/2027 AR USD Argentina 7.125 75.752 6/28/2117 AR USD Automotores Gildemeister 8.25 60.583 5/24/2021 CL USD Enlasa Generacion 3.558 11/15/2023 CL CLP Metrogas SA/Chile 645 8/1/2024 CL CLP Automotores Gildemeister 6.75 62.759 1/15/2023 CL USD Provincia del Chaco 9.375 72.315 8/18/2024 AR USD Fospar S/A 6.53 1.034 5/15/2026 BR BRL Sociedad Concesionaria 2.9547 6/30/2021 CL CLP Esval SA 3.453 3/15/2028 CL CLP Caja de Compensacion 7.75 35.23 3/27/2024 CL CLP Sociedad Austral 318.478 9/20/2019 CL CLP Provincia de Neuquen 7.5 74.753 4/27/2025 AR USD Caja de Compensacion 5.2 9/15/2018 CL CLP Empresa de Transporte 4.341 7/15/2020 CL CLP Corp Universidad 5.968 11/10/2021 CL CLP Provincia de Cordoba 7.125 74.802 8/1/2027 AR USD Provincia del Chaco 9.375 72.585 8/18/2024 AR USD Argentine Republic 7.125 75.322 6/28/2117 AR USD Sylph Ltd 2.367 61.194 9/25/2036 KY USD Banco Security SA 311 7/1/2019 CL CLP Sylph Ltd 2.657 73.081 3/25/2036 KY USD *********** Monday's edition of the TCR-LA delivers a list of indicative prices for bond issues that reportedly trade well below par. Prices are obtained by TCR-LA editors from a variety of outside sources during the prior week we think are reliable. Those sources may not, however, be complete or accurate. The Monday Bond Pricing table is compiled on the Friday prior to publication. Prices reported are not intended to reflect actual trades. Prices for actual trades are probably different. Our objective is to share information, not make markets in publicly traded securities. Nothing in the TCR-LA constitutes an offer or solicitation to buy or sell any security of any kind. It is likely that some entity affiliated with a TCR-LA editor holds some position in the issuers' public debt and equity securities about which we report. Tuesday's edition of the TCR-LA features a list of companies with insolvent balance sheets obtained by our editors based on the latest balance sheets publicly available a day prior to publication. At first glance, this list may look like the definitive compilation of stocks that are ideal to sell short. Don't be fooled. Assets, for example, reported at historical cost net of depreciation may understate the true value of a firm's assets. A company may establish reserves on its balance sheet for liabilities that may never materialize. The prices at which equity securities trade in public market are determined by more than a balance sheet solvency test. Submissions about insolvency-related conferences are encouraged. Send announcements to conferences@bankrupt.com *********** S U B S C R I P T I O N I N F O R M A T I O N Troubled Company Reporter-Latin America is a daily newsletter co-published by Bankruptcy Creditors' Service, Inc., Fairless Hills, Pennsylvania, USA, and Beard Group, Inc., Washington, D.C., USA, Marites O. Claro, Joy A. Agravante, Rousel Elaine T. Fernandez, Julie Anne L. Toledo, Ivy B. Magdadaro, and Peter A. Chapman, Editors. Copyright 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 * * *