/raid1/www/Hosts/bankrupt/TCRLA_Public/181128.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
Wednesday, November 28, 2018, Vol. 19, No. 236
Headlines
A R G E N T I N A
ARGENTINA: Reaches Staff Agreement on Second Review With IMF
B R A Z I L
BRAZIL: Gets $750MM-IDB Loan to Promote Productivity in MSME
ODEBRECHT SA: Construction Unit to Miss Coupon Payment
ODEBRECHT SA: Hires Moelis, Cleary Gottlieb to Restructure Debt
D O M I N I C A N R E P U B L I C
DOMINICAN REP: Official Calls Mining Sector Hypocrisy "Blackmail"
M E X I C O
BANCO AZTECA: Moody's Reviews Ba1 Deposit Rating for Upgrade
P U E R T O R I C O
AMERICAN GAMING: Dec. 21 Plan Confirmation Hearing
MONITRONICS INT'L: Extends Early Tender Deadline to Dec. 10
NOVA TERRA: Unsecureds to Get 5% over 60 Months
PONCE REAL: Voluntary Chapter 11 Case Summary
SEARS HOLDINGS: Gets Approval to Hire M-III Advisory, Appoint CRO
- - - - -
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A R G E N T I N A
=================
ARGENTINA: Reaches Staff Agreement on Second Review With IMF
------------------------------------------------------------
An International Monetary Fund (IMF) mission led by Mr. Roberto
Cardarelli visited Argentina during November 9-16, 2018 to conduct
discussions on the Second Review of Argentina's IMF-supported
program under the Stand-By Arrangement (SBA).
At the conclusion of the visit, Mr. Cardarelli issued the
following statement:
"IMF staff and the Argentine authorities have reached a staff-
level agreement on the second review of the economic program
supported by the Stand-By Arrangement. Completion of the review is
subject to the approval of the IMF's Executive Board and would
make available SDR 5.5 billion (about US$7.6 billion).
"We commend the authorities for their continued efforts to advance
their economic reform program, including building political
support for key budget legislation. Strong implementation of the
government's plan is essential to pave the way for a rebound of
economic activity in 2019 and to support job creation, reduce
poverty, and improve the living standards of all Argentines.
"The new monetary policy framework put in place by Banco Central
de la Republica Argentina (BCRA) in October has been effective in
stabilizing financial markets after the extreme volatility
experienced in August and September. Steadfast implementation of
its monetary policy framework and clear communication by the BCRA
will continue to be essential to guide market expectations. The
authorities' commitment to a market determined exchange rate will
strengthen the credibility of the framework and enhance resilience
to external shocks. The authorities' monetary policy framework
gives the BCRA the option to begin a gradual process of FX reserve
accumulation if the peso were to fall below the pre-announced non-
intervention zone. Given their unsterilized nature, a proper
calibration of such FX purchases will ensure that the monetary
policy stance remains conducive to a rapid reduction of inflation
and inflation expectations.
"Recent data suggest that achieving the 2018 fiscal target is well
within reach. This and the passage of the 2019 budget point to the
authorities' clear commitment to address a key vulnerability of
the Argentine economy. Eliminating the primary fiscal deficit is
a necessary step to reduce the government financing needs and put
the debt-to-GDP ratio on a downward path.
"Maintaining social spending identified in the program, and
strengthening the social safety net, will be essential to shield
the poor and vulnerable from the weakening of economic activity in
the second half of 2018, and amid still elevated inflation. In
this context, the decision to safeguard social assistance spending
in the 2019 budget is welcome.
"The mission met with the Minister of the Economy Nicolas Dujovne,
the Governor of the Central Bank Guido Sandleris, as well as other
government officials and members of the private sector and civil
society. The mission team wishes to thank the authorities and all
other interlocutors for their warm welcome, constructive dialogue,
and cooperative spirit during its latest visit to Argentina."
As reported in the Troubled Company Reporter-Latin America on
Nov. 14, 2018, S&P Global Ratings lowered its long-term foreign
and local currency ratings on Argentina to 'B' from 'B+' and
affirmed its short-term foreign and local currency ratings at 'B'.
S&P said, "We also removed the long-term ratings from CreditWatch,
where we placed them on Aug. 31, 2018, with negative implications.
The outlook on the long-term ratings is stable. At the same time,
we lowered our national scale ratings to 'raAA-' from 'raAA'. We
also lowered our transfer and convertibility assessment to 'B+'
from 'BB-'."
S&P said, "The stable outlook reflects our expectation that the
government will implement difficult fiscal, monetary, and other
measures to stabilize the economy over the coming 18 months,
gradually staunching the deterioration in the sovereign's
financial profile and debt burden, reversing inflation dynamics,
and restoring investor confidence. The combination of lower
government financing needs, declining inflation and interest
rates, and expectations of continuity in key economic policies
after national elections in October 2019 could set the stage for
economic recovery and contain external vulnerability.
Fitch Ratings affirmed on May 8, 2018, Argentina's Long-Term
Foreign-Currency Issuer Default Rating (IDR) at 'B' and revised
the Outlook to Stable from Positive.
On December 4, 2017, Moody's Investors Service upgraded the
Government of Argentina's local and foreign currency issuer and
senior unsecured ratings to B2 from B3. The senior unsecured
shelves were upgraded to (P)B2 from (P)B3. The outlook on the
ratings is stable. At the same time, Argentina's short-term
rating was affirmed at Not Prime (NP). The senior unsecured
ratings for unrestructured debt were affirmed at Ca and the
unrestructured senior unsecured shelf affirmed at (P)Ca.
As previously reported by the TCR-LA, Argentina defaulted on some
of its debt late July 30, 2014, after expiration of a 30- grace
period on a US$539 million interest payment. Earlier that ,
talks with a court-appointed mediator ended without resolving a
standoff between the country and a group of hedge funds seeking
full payment on bonds that the country had defaulted on in 2001.
A U.S. judge had ruled that the interest payment couldn't be made
unless the hedge funds led by Elliott Management Corp., got the
US$1.5 billion they claimed. The country hasn't been able to
access international credit markets since its US$95 billion
default 13 years ago. On March 30, 2016, Argentina's Congress
passed a bill that will allow the government to repay holders of
debt that the South American country defaulted on in 2001,
including a group of litigating hedge funds that won judgments
in a New York court. The bill passed by a vote of 54-16.
===========
B R A Z I L
===========
BRAZIL: Gets $750MM-IDB Loan to Promote Productivity in MSME
-------------------------------------------------------------
The Inter-American Development Bank has approved a $750 million
line of credit aimed at boosting the productivity of more than
4,900 micro, small and medium-sized enterprises (MSME) in Brazil.
They will be able to access new credit sources through digital
channels, thus contributing to economic growth and job creation.
The Brazilian Development Bank (BNDES), which will contribute $150
million of its own resources, will be in charge of executing the
loan, channeling financing through lines of credit that the
companies will be able to tap into.
Eligible beneficiaries will be MSMEs with proven administrative,
technical, financial, legal and environmental skills in the
execution of loans.
This IDB program is designed to support BNDES efforts to increase
competition in the marketplace and facilitate digital access to
the lines of credit that this plan features.
The program will support the recently implemented "MSME Developer
Channel" (Canal do Desenvolvedor MPME), a BNDES product that
offers clients a single platform to facilitate access to
information about its products and the accredited financial
institutions that offer them, and also automates some procedures
related to the presentation of requests for credit.
The program will also support BNDES' efforts to integrate Fintech
solutions into its MSME channel, including issues such as analysis
of credit ratings, financial education, linkage (of applicants to
financial institutions) and reverse auctions. These solutions aim
to improve MSME access to BNDES financing.
These companies make a sizeable contribution to Brazil's economic
output and job creation. And while they account for 99.4% of all
businesses in Brazil, they contribute only 54% to the country's
formal employment and 43% of all wages and salaries. One of the
main challenges facing MSMEs is access to public and private
sector credit, in part due to problems such as lack of credit
history or proper collateral, or expertise in devising a financial
statement.
This is the second transaction under a conditional line of credit
of S2.4 billion that was approved by the IDB in December 2016.
The IDB financing is over 25 years, with a grace period of five-
and-a-half years and an interest rate pegged to the Libor.
As reported in the Troubled Company Reporter-Latin America on
Oct. 18, 2018, Egan-Jones Ratings Company, on October 8, 2018,
withdrew its 'B+' foreign currency and local currency senior
unsecured ratings on debt issued by the Federative Republic of
Brazil.
ODEBRECHT SA: Construction Unit to Miss Coupon Payment
------------------------------------------------------
Andres Schipani at The Financial Times reports that the cash-
strapped construction unit of Odebrecht SA, the Brazilian group at
the centre of a corruption scandal that has rocked Latin America,
said it will miss a debt payment, triggering a restructuring of
billions in bonds.
The company said it would not pay an $11.5 million on Dec. 3
coupon on its 2025 bond due on Dec. 3 "to preserve liquidity,"
according to The Financial Times.
The company, Odebrecht Engenharia e Construcao (OEC), added in a
note "that this action will result in a stronger and better
positioned company to recover historical levels of backlog and
cash generation, benefiting all its stakeholders." It also said
it had engaged consultants "to prioritize the application of cash
resources in the operational activity and in the conquest of new
contracts," the report relays.
Following the announcement, S&P lowered OEC's rating to D, or
default, from CC, the report says. The rating agency said in a
note that the company was "negotiating with its lenders a strategy
to equalize its short-and long-term capital structure", warning
that without a restructuring or renegotiation, "it will likely
have to file for bankruptcy," the report relays.
Fitch Ratings followed suit, downgrading OEC's long-term foreign
and local currency issuer default rating from C to RD.
Rafael Elias, a director at investment bank Exotix Capital, said
that following the failure on the payment, the company "will first
try to restructure out of court" the $3 billion guaranteed debt
stock issued by the group's financial unit with new instruments,
the report relays.
With the company having entered "into strict cash-conservation
mode to remain operational," Mr. Elias added that although the
parent company, Odebrecht SA, would like to save it, "we believed
that the time to do this had run out," the report discloses. He
said the company could try to restructure by offering creditors
fresh bonds with longer maturities and lower interest rates, and
equity, however warning that the equity could be "zero" as it "has
no significant assets to liquidate," the repotr notes.
Odebrecht SA was once one of the world's biggest construction
groups, with works across the Americas and Afric, the report
discloses. But in 2016, Marcelo Odebrecht, then chief executive
of the Odebrecht group, was found guilty of channeling hundreds of
millions of dollars to politicians across a dozen countries in
exchange for favors, the report relates.
Alan Garcia became the latest former Peruvian president to be
ensnared by the Odebrecht scandal when he sought asylum in the
Uruguayan embassy in Lima, the report relates. A Peruvian judge
says he took bribes from the Brazilian construction company during
his 2006-11 presidency, claims he has denied, the report notes.
Amid the fallout from the revelations, Peruvian President Pedro
Pablo Kuczynski resigned this year, last year Ecuador's former
vice-president Jorge Glas was sentenced to serve six years in jail
for receiving bribes, and Brazil's former president Luiz Inacio
Lula da Silva was jailed in April on corruption charges, the
report relays.
Moreover, following a deadly trail, the Colombian government said
that the Brazilian company should be banned from operating in the
country for the next 20 years, the report adds.
About Odebrecht SA
Construtora Norberto Odebrecht SA is a Latin American
engineering and construction company fully owned by the
Odebrecht Group, one of the 10 largest Brazilian private groups.
Construtora Norberto is the world's largest builder of
hydroelectric plants, of sanitary and storm sewers, water
treatment and desalination plants, transmission lines and
aqueducts. The Group's main businesses are heavy engineering
and construction based in Rio de Janeiro, Brazil, and Braskem
S.A., its chemicals/petrochemicals company, based in Sao Paulo,
Brazil.
As of May 5, 2009, the company continues to carry Standard and
Poor's BB Issuer Credit ratings, and Fitch Rating's BB+ Issuer
Default ratings and BB+ Senior Unsecured Debt ratings.
* * *
As reported in the Troubled Company Reporter-Latin America on
Dec. 2, 2016, The Wall Street Journal related that Marcelo
Odebrecht, the jailed former head of Brazilian construction giant
Odebrecht SA, agreed to sign a plea-bargain agreement in
connection with Brazil's largest corruption probe ever, according
to a person close to the negotiations. The move could roil the
nation's political class yet again. The testimony of the former
industrialist, which is part of the deal, has the potential to
implicate numerous politicians who allegedly took kickbacks from
contractors as part of a years-long graft ring centered on
Brazil's state-run oil company, Petroleo Brasileiro SA, known as
Petrobras, according to The Wall Street Journal.
ODEBRECHT SA: Hires Moelis, Cleary Gottlieb to Restructure Debt
---------------------------------------------------------------
Reuters reports that Brazilian conglomerate Odebrecht SA has hired
investment bank Moelis & Co. and law firm Cleary Gottlieb Steen &
Hamilton to discuss restructuring of its debt with investors, the
company said in a statement.
Odebrecht's engineering unit OEC and its advisers will discuss
with investors restructuring of $3 billion bonds issued by
Odebrecht Finance Limited, according to Reuters. The conglomerate
decided not to pay $11.5 million in interest on the 2025 bonds
after the end of the 30-day grace period, the statement added, the
report relays.
Odebrecht Finance 2025 bonds were priced at 13.5 cents on the
dollar on Nov. 19, according to Refinitiv data, the report notes.
Standard & Poor's downgraded OEC from "C" to "D" after the
announcement of the debt restructuring, the report adds.
About Odebrecht SA
Construtora Norberto Odebrecht SA is a Latin American
engineering and construction company fully owned by the
Odebrecht Group, one of the 10 largest Brazilian private groups.
Construtora Norberto is the world's largest builder of
hydroelectric plants, of sanitary and storm sewers, water
treatment and desalination plants, transmission lines and
aqueducts. The Group's main businesses are heavy engineering
and construction based in Rio de Janeiro, Brazil, and Braskem
S.A., its chemicals/petrochemicals company, based in Sao Paulo,
Brazil.
As of May 5, 2009, the company continues to carry Standard and
Poor's BB Issuer Credit ratings, and Fitch Rating's BB+ Issuer
Default ratings and BB+ Senior Unsecured Debt ratings.
* * *
As reported in the Troubled Company Reporter-Latin America on
Dec. 2, 2016, The Wall Street Journal related that Marcelo
Odebrecht, the jailed former head of Brazilian construction giant
Odebrecht SA, agreed to sign a plea-bargain agreement in
connection with Brazil's largest corruption probe ever, according
to a person close to the negotiations. The move could roil the
nation's political class yet again. The testimony of the former
industrialist, which is part of the deal, has the potential to
implicate numerous politicians who allegedly took kickbacks from
contractors as part of a years-long graft ring centered on
Brazil's state-run oil company, Petroleo Brasileiro SA, known as
Petrobras, according to The Wall Street Journal.
===================================
D O M I N I C A N R E P U B L I C
===================================
DOMINICAN REP: Official Calls Mining Sector Hypocrisy "Blackmail"
-----------------------------------------------------------------
Dominican Today reports that National Competitiveness Council
director Rafael Paz made the statement: "We must break with the
populism of two or three people, who for political and ideological
reasons have declared war on mining in the Dominican Republic.
Politicians of many years, whom I call water melons, because they
are green on the outside, supposed environmentalists, but are red
inside, like the political color they defended in the 70s, an
outdated ideology that has brought poverty to the country."
The report notes that Mr. Paz noted that the country has important
strategic mining assets which should benefit the nation. "All
those like me, who believe in the future of the country must make
common cause and break with the blackmail of those who have
declared war on mining in the national territory," the report
quoted Mr. Paz as saying.
In reference to Executive orders 430-18 and 431-18, Paz noted that
one of them lifts the ban for the export of amber and larimar, and
assigns the Energy and Mines Ministry regulatory role over the
sector so it can export, which, in his view, will contribute to
positioning it internationally, the report relays.
"I am convinced that this ministry, headed by Antonio Isa Conde,
will do a formidable job so that our national stones become an
international standard," said Paz, as interviewed on the radio
program Tribunal de la Tarde, the report notes.
As reported in the Troubled Company Reporter-Latin America on
Sept. 24, 2018, Fitch Ratings affirmed Dominican Republic's
Long-Term, Foreign-Currency Issuer Default Rating (IDR) at 'BB-'
with a Stable Outlook.
===========
M E X I C O
===========
BANCO AZTECA: Moody's Reviews Ba1 Deposit Rating for Upgrade
------------------------------------------------------------
Moody's de Mexico has placed on review for upgrade Banco Azteca,
S.A.'s global long- and short-term deposit ratings, the baseline
credit assessment, the adjusted BCA, and the long- and short-term
counterparty risk assessments. In addition, Moody's placed on
review for upgrade the A1.mx long-term Mexican national scale
deposit rating and affirmed the short-term Mexican national scale
deposit rating of MX-1.
The following ratings and assessments were placed on review for
upgrade:
Banco Azteca, S.A. (820150724)
- Long term global local currency deposit rating of Ba1
- Long term global foreign currency deposit rating of Ba1
- Short-term global local and foreign currency deposit ratings
of Not Prime
- Long term Mexican national scale deposit rating of A1.mx
- Baseline credit assessment of ba3
- Adjusted baseline credit assessment of ba3
- Long-term counterparty risk assessment of Baa3(cr)
- Short-term counterparty risk assessment of Prime-3(cr)
The following rating was affirmed:
Banco Azteca, S.A. (820150724)
- Short term Mexican national scale deposit rating of MX-1
Outlook action:
Banco Azteca, S.A. (820150724)
- Outlook changed to review for upgrade
RATINGS RATIONALE
Moody's said that the review for upgrade of Banco Azteca's ratings
was prompted by improvements to the bank's capitalization and
profitability, which help mitigate the intrinsically high asset
risks that derive from Banco Azteca's focus on risky consumer
lending, and which has led to an uptick in non-performing loans
over the past quarters.
Moody's noted that Banco Azteca's profitability has benefited from
lower credit costs and increased foreign exchange gains amid
volatilities in the peso. The bank's return on assets was a
healthy 1.8% during the first nine months of 2018, up from the
1.1% during the entire 2015, a credit positive. The bank's
business strategy and its target market ensure ample net interest
margins (NIM), which have averaged around 27% of over the past
three years, consistent with the bank's focus on high-yielding
unsecured consumer loans, which are funded with granular and
inexpensive deposits. Banco Azteca's ample NIMs comfortably absorb
high operating costs related to a nationwide branch network and to
a labor-intensive loan collection process.
Banco Azteca's strong capitalization is a key credit strength and
is supported by management's policy of earnings retention. As of
September 2018, Moody's tangible common equity (TCE) ratio stood
at about 17%, up from around 16% by year-end 2015 and well above
the system's average, providing superior buffers to absorb
unexpected credit losses.
Regarding asset risk, Moody's noted an increase in Banco Azteca's
non-performing loans over the past 18 months, which were triggered
by rapid consumer loan growth ahead of the system's average for
the period, coupled with shortcomings in the bank's credit
origination and collection processes. Total nonperforming loans
(NPLs) increased to 4.5% of gross loans as of September 2018, from
2.6% as of December 2016, and reserve coverage, though declining,
remains a solid 218% of non-performing loans.
Key risks for the commercial loan book arise from the bank's high
level of related-party lending, which could lead to conflicts of
interest stemming from the bank's closely-held family-based
ownership structure.
Banco Azteca has managed to maintain a fluid access to granular
retail deposit funding, which significantly reduces refinancing
risks. Banco Azteca's liquidity remains ample, at about 30% of
assets, and further supports the bank's ability to withstand
funding volatility.
Banco Azteca's Ba1 global scale deposit ratings benefit from two
notches of uplift from the bank's ba3 standalone BCA, in line with
Moody's assessment of a high probability of public support. This
assessment reflects the bank's important market share within the
consumer lending business and its focus on socially visible low-
income depositors.
WHAT COULD CAUSE THE RATINGS TO MOVE UP OR DOWN
The review for upgrade will focus on management's oversight of
credit risk, and the adequacy of enhancements introduced to Banco
Azteca's risk controls and collection processes. The review will
also focus on the sustainability of Banco Azteca's core
profitability. Downward rating pressures are limited in light of
the review for upgrade, but ratings could be confirmed at current
levels if asset quality deteriorates suddenly, with negative
impact on earnings.
The principal methodology used in these ratings was Banks
published in August 2018.
======================
P U E R T O R I C O
======================
AMERICAN GAMING: Dec. 21 Plan Confirmation Hearing
--------------------------------------------------
The Bankruptcy Court has approved the second amended disclosure
statement explaining American Gaming & Electronics, Inc., et al.'s
Second Amended Chapter 11 plan as containing adequate information.
The Confirmation Hearing is scheduled for December 21, 2018 at
10:00 a.m.
Objections, if any, to confirmation of the Plan must: (a) be in
writing; (b) state the name and address of the objecting party and
the nature of the claim or interest of such party; (c) state with
particularity the basis and nature of any objection to
confirmation of the Plan; and (d) be filed with the Court and a
copy served on (i) counsel for the Debtors (ii) the Office of the
United States Trustee for the District of New Jersey and (iii)
counsel for North Mill Capital, LLC., so that such objections are
received no later than December 13, 2018 at 5:00 p.m.
The Debtors are authorized to file a reply or replies to any
timely filed objections on or before December 18, 2018.
Following the Petition Date, the Boards of AG&E and American
Gaming each met and authorized a merger of the subsidiary American
Gaming into the parent, AG&E subject to Bankruptcy Court approval.
In the Debtor's judgment, the merger would eliminate the
administrative expense of managing two separate bankruptcy cases,
without affecting stakeholders in any way, insofar as the parent
entity, AG&E, had only one asset, i.e., 100% ownership of American
Gaming. As a result, on October 29, 2018, Debtors AG&E and
American Gaming filed a Motion for Entry of an Order Authorizing
the Debtors' Merger and Other Related Relief. The motion sought
to merge the debtor entities such that American Gaming -- the 100%
owned subsidiary of AG&E -- would be merged with and subsumed into
its parent, AG&E. On November 19, 2018, the Court held a hearing
on the merger motion, and granted the motion pending an order to
be submitted to the Court by the Debtor.
A redlined version of the Amended Disclosure Statement is
available at https://tinyurl.com/ya2447t3 from PacerMonitor.com at
no charge.
Counsel for Debtors:
Warren J. Martin Jr., Esq.
Kelly D. Curtin, Esq.
Rachel A. Parisi, Esq.
PORZIO, BROMBERG & NEWMAN, P.C.
100 Southgate Parkway
P.O. Box 1997
Morristown, New Jersey 07962
Tel: (973) 538-4006
Fax: (973) 538-5146
Email: wjmartin@pbnlaw.com
kdcurtin@pbnlaw.com
raparisi@pbnlaw.com
About American Gaming
Established in 1993, American Gaming & Electronics is a supplier
of gaming parts, used machines, and electronic components. AG&E
is strategically located in Las Vegas, New Jersey and Florida.
Its distribution chain reaches the Caribbean & Puerto Rico, Canada
and Europe.
American Gaming & Electronics Inc. and its subsidiary AG&E
Holdings Inc. filed for bankruptcy protection (Bankr. D.N.J. Lead
Case No. 18-30507) on Oct. 15, 2018. The petitions were signed by
Anthony R. Tomasello, president and chief executive officer. The
Hon. Andrew B. Altenburg Jr. presides over the cases.
American Gaming declared total assets of $945,220 and total
liabilities of $2,016,152.
The Debtors tapped Prozio, Bromberg & Newman P.C. as its counsel,
and Podium Strategies, LLC, as its financial advisor.
MONITRONICS INT'L: Extends Early Tender Deadline to Dec. 10
-----------------------------------------------------------
Ascent Capital Group, Inc. announced that as of 5:00 p.m., New
York City time, on Nov. 19, 2018, holders of $469,957,000
aggregate principal amount of 9.125% Senior Notes due 2020 of
Monitronics International, Inc., a wholly owned subsidiary of
Ascent, representing approximately 80.33% of the outstanding
aggregate principal amount of the Old Notes, had been validly
tendered and not validly withdrawn pursuant to Monitronics'
previously announced offer to exchange up to $585,000,000
aggregate principal amount of Monitronics' new 5.500%/6.500%
Senior Secured Second Lien Cashpay/PIK Notes due 2023 to be issued
for validly tendered (and not validly withdrawn) Old Notes and, in
conjunction with the exchange offer, a solicitation of consents by
Monitronics to certain proposed amendments to the indenture
governing the Old Notes.
Monitronics has extended the early tender time of the Old Notes
until 11:59 p.m., New York City time, on Dec. 10, 2018. Holders
of Old Notes who validly tender prior to the Early Tender Time
will receive $1,000 principal amount of New Notes per $1,000
principal amount of those Old Notes validly tendered and not
validly withdrawn.
Monitronics has received consents from the holders of greater than
a majority of the outstanding principal amount of Old Notes and
will enter into the supplemental indenture giving effect to the
proposed amendments, which will become operative when Monitronics
accepts the validly tendered Old Notes for purchase and notifies
the trustee that those Old Notes have been accepted for purchase.
The withdrawal deadline of 5:00 p.m., New York City time, on Nov.
19, 2018 has passed and tendered Old Notes may no longer be
validly withdrawn except for under the limited circumstances
described in the offering memorandum for the exchange offer.
Consummation of the exchange offer is conditioned upon the
satisfaction or waiver of the conditions specified in the offering
memorandum. The exchange offer and the consent solicitation may
be amended, extended, terminated or withdrawn by Monitronics for
any reason in its sole discretion.
The New Notes have not been and will not be registered under the
Securities Act of 1933, as amended or the securities laws of any
other jurisdiction and may not be offered or sold in the United
States absent registration or an applicable exemption from the
registration requirements of the Securities Act or in any other
jurisdiction absent registration or an applicable exemption from
the registration requirements of the securities laws of such other
jurisdiction.
D.F. King & Co., Inc. is acting as the exchange agent and
information agent for the exchange offer and the consent
solicitation. Requests for the offering documents from "Eligible
Holders" may be directed to D.F. King & Co., Inc. and holders of
the Old Notes may complete and submit a letter of eligibility
online at www.dfking.com/monitronics or by e-mail to
monitronics@dfking.com or by phone at (212) 269-5550 (for brokers
and banks) or (877) 674-6273 (for all others).
None of Ascent, Monitronics, their subsidiaries or any other
person makes a recommendation as to whether holders of the Old
Notes should tender their Old Notes pursuant to the exchange offer
or deliver consents pursuant to the consent solicitation. Each
holder must make its own decision as to whether to tender its Old
Notes and to deliver consents, and, if so, the principal amount of
the Old Notes as to which action is to be taken.
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 Sept. 30, 2018,
the Company had $1.70 billion in total assets, $1.90 billion in
total liabilities and a total stockholders' deficit of $202.90
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.
NOVA TERRA: Unsecureds to Get 5% over 60 Months
-----------------------------------------------
Nova Terra, Inc. filed with the U.S. Bankruptcy Court for the
District of Puerto Rico an amended disclosure statement, dated
November 9, 2018, containing Ch. 11 plan of reorganization.
Under the plan, general unsecured creditors are classified in
Class 3, and will receive a distribution of 5% of their allowed
claims, to be paid within 60 months. Payments will commence on the
effective date, which will be 45 days after entry of order of the
confirmation of the plan.
Meanwhile, secured creditors are classified under Class 2. Banco
Popular De Puerto Rico's (BPPR) secured claim for property &
equipment is in the allowed secured amount of $431,995.67 for a
total claim amount of $431,995.67. BPPR will receive a fixed
monthly payment $4,000.00 plus 50% of the net inflows and outflows
after all plan payments, as per agreement with BPPR on October
2018. The payments will begin 45 days after the confirmation of
the plan. The payments end on Month 60 of the plan.
Another secured creditor is the Internal Revenue Service (IRS)
whose claims are secured by the Debtor's property & equipment, in
the allowed secured amount of $163,414.55 for a total claim amount
of $$163,414.55. IRS will receive a monthly payment $4,788.00,
which includes a 3.50% of cost of living allowance. The payments
will begin 45 days after the confirmation of the plan. The
payments end on Month 36 of the plan.
The Debtor is represented by:
Ruben Gonzalez Marrero, Esq.
RUBEN GONZALEZ MARRERO
Urb. Santa Rosa
BAYAMON, P.R. 00959-8915
Tel.: (787) 798-8600
Email: rgm@microjuris.com;
rgmattorney1@hotmail.com
A full-text copy of the Amended Disclosure Statement is available
at:
http://bankrupt.com/misc/prb17-01968-126.pdf
About Nova Terra Inc.
Based in Arecibo, Puerto Rico, Nova Terra, Inc., sought protection
under Chapter 11 of the Bankruptcy Code (Bankr. D.P.R. Case No.
17-01968) on March 23, 2017. Nova Terra operates an electronic
equipment recycling business. The case is assigned to Judge
Edward A. Godoy. Ruben Gonzalez Marrero, Esq., at Ruben Gonzalez
Marrero & Associates, serves as the Debtor's legal counsel.
PONCE REAL: Voluntary Chapter 11 Case Summary
---------------------------------------------
Debtor: Ponce Real Estate Corp.
PO Box 7071
Ponce, PR 00732
Business Description: Ponce Real Estate Corp. is a real estate
company headquartered in Ponce, Puerto
Rico.
Chapter 11 Petition Date: November 24, 2018
Court: United States Bankruptcy Court
District of Puerto Rico (Ponce)
Case No.: 18-06805
Debtor's Counsel: Javier Vilarino, Esq.
VILARINO & ASSOCIATES LLC
PO Box 9022515
San Juan, PR 00902
Tel: 787-565-9894
Email: jvilarino@vilarinolaw.com
Estimated Assets: $1 million to $10 million
Estimated Liabilities: $1 million to $10 million
The petition was signed by Francisco Vilarino, president.
The Debtor failed to include in the petition a list of its 20
largest unsecured creditors.
A full-text copy of the petition is available for free at:
http://bankrupt.com/misc/prb18-06805.pdf
SEARS HOLDINGS: Gets Approval to Hire M-III Advisory, Appoint CRO
-----------------------------------------------------------------
Sears Holdings Corporation received approval from the U.S.
Bankruptcy Court for the Southern District of New York to hire
M-III Advisory Partners, LP and appoint Mohsin Meghji, the firm's
managing partner, as chief restructuring officer.
Mr. Meghji and his firm will assist the company and its affiliates
in their reorganization efforts over the course of their Chapter
11 cases.
The services to be provided by the firm include the implementation
of operational improvement activities and cost reduction, and the
development of business plan, restructuring plan and strategic
alternatives intended to maximize the Debtors' enterprise value.
The firm will be paid a flat rate of $900,000 per month during
such time as the core team is comprised of the CRO and 10 M-III
professionals; and $750,000 per month during such time as the core
team is comprised of the CRO and eight professionals.
If additional staffing is required, additional professionals will
be billed at a rate which is $50 less than these standard hourly
rates charged by M-III:
Managing Partner $975
Managing Director $875
Director $675
Vice-President $575
Senior Associate $475
Associate $400
Senior Analyst $350
Analyst $325
M-III will receive an additional fee of $2 million if a material
portion of the Debtors' business is sold within six months
following the filing of their bankruptcy cases or they emerge from
bankruptcy as a going concern; or $1 million if a material portion
of the business is sold within nine months following the
bankruptcy filing or the Debtors exit bankruptcy as a going
concern.
The firm received an initial retainer of $500,000.
M-III is "disinterested" as defined in Section 101(14) of the
Bankruptcy Code, according to court filings.
The firm can be reached through:
Mohsin Y. Meghji
M-III Advisory Partners, LP
130 West 42nd Street, 17th Floor
New York, NY 10036
Phone: (212) 716-1492 / (212) 716-1491
Fax: (212) 531-4532
Email: mmeghji@miiipartners.com
About Sears Holdings
Sears Holdings Corporation (NASDAQ: SHLD) --
http://www.searsholdings.com/-- began as a mail ordering catalog
company in 1887 and became the world's largest retailer in the
1960s. At its peak, Sears was present in almost every big mall
across the U.S., and sold everything from toys and auto parts to
mail-order homes. Sears claims to be is a market leader in the
appliance, tool, lawn and garden, fitness equipment, and
automotive repair and maintenance retail sectors.
Sears and Kmart merged to form Sears Holdings in 2005 when they
had 3,500 US stores between them. Kmart emerged in 2005 from its
own bankruptcy.
Unable to keep up with online stores and other brick-and-mortar
retailers, a long series of store closings has left it with 687
retail stores in 49 states, Guam, Puerto Rico, and the U.S. Virgin
Islands as of mid-October 2018. The Company employs 68,000
individuals, of whom 32,000 are full-time employees.
As of Aug. 4, 2018, Sears Holdings had $6.93 billion in total
assets, $11.33 billion in total liabilities and a total deficit of
$4.40 billion.
Unable to cover a $134 million debt payment due Oct. 15, 2018,
Sears Holdings Corporation and 49 subsidiaries sought Chapter 11
protection (Bankr. S.D.N.Y. Lead Case No. 18-23538) on Oct. 15,
2018.
The Hon. Robert D. Drain is the case judge.
The Debtors tapped Weil, Gotshal & Manges LLP as legal counsel;
M-III Partners as restructuring advisor; Lazard Freres & Co. LLC
as investment banker; DLA Piper as real estate advisor; and Prime
Clerk as claims and noticing agent.
***********
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
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issuers' public debt and equity securities about which we report.
Tuesday's edition of the TCR-LA features a list of companies with
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latest balance sheets publicly available a day prior to
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***********
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
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USA, Marites O. Claro, Joy A. Agravante, Rousel Elaine T.
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Chapman, Editors.
Copyright 2018. All rights reserved. ISSN 1529-2746.
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