/raid1/www/Hosts/bankrupt/TCRLA

/raid1/www/Hosts/bankrupt/TCRLA_Public/181212.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, December 12, 2018, Vol. 19, No. 246 Headlines B R A Z I L BRAZIL: Takes Control of State Struggling With Strikes EMBRAER SA: Brazil Court Overturns Injunction Blocking Boeing Deal C O S T A R I C A AERIS HOLDING: Moody's Cuts Sr. Unsec. Rating to Ba3, Outlook Neg. REVENTAZON FINANCE: Moody's Cuts Corporate Family Rating to B1 D O M I N I C A N R E P U B L I C DOMINICAN REPUBLIC: Don't Deport Haitians, Agro Free Zone Warns J A M A I C A JAMAICA: Growth Seen in Construction Industry in July-Sept Quarter JAMAICA: Ministers Mandated to Have Quarterly Meetings With Boards M E X I C O DOCUFORMAS SAPI: Fitch Hikes IDRs to BB-, Outlook Stable TUXPAN MUNICIPALITY: Moody's Affirms B2 Global Scale Issuer Rating P U E R T O R I C O COLONIAL MEDICAL: Unsecureds to Get 50% in 12 Monthly Payments EMPRESAS CARRION: Case Summary & 5 Unsecured Creditors RGE CARIBBEAN: Case Summary & Unsecured Creditor SEARS HOLDING: Bid Deadline for SHIP Business Set for Dec. 11 SEARS HOLDINGS: U.S. Trustee Appoints Elise Frejka as CPO - - - - - =========== B R A Z I L =========== BRAZIL: Takes Control of State Struggling With Strikes ------------------------------------------------------ Latinx Today reports that the governor-elect of the northeastern Brazilian state of Roraima was named as interim administrator after President Michel Temer removed the outgoing governor amid a strike by police, prison guards and other public employees. Antonio Denarium, who belongs to the same right-wing PSL party as President-elect Jair Bolsonaro, was originally scheduled to take office Jan. 1, according to Latinx Today. Between now and then, he will exercise the powers of governor and state finance minister, but with a requirement that he report to the federal government on his actions, the report notes. Public employees in Roraima, one of Brazil's poorest states, have gone unpaid for several months, the report relays. "Today, I'm taking over the task of administrator. In practice, we're going to implement an administrative and tax reform to eliminate unnecessary spending, put an end to irregular contracts and, with the resources that remain, rigorously pay . . . . all officials," the report quoted Mr. Denarium as saying. The federal takeover was agreed to by Temer and outgoing-Gov, the report discloses. Suely Campos, who said that he lacked the political and financial conditions to try and resolve the serious problems, the report notes. Mr. Campos said that Roraima's financial crisis worsened with the arrival of thousands of migrants from neighboring Venezuela, to whom the state offered healthcare, housing and education services, the report relays. The report notes that Mr. Denarium, who during the campaign backed measures to halt the influx of Venezuelans into Roraima, said that he will discuss the matter with Temer because only the federal government can order the closure of the border or place restrictions on travelers. According to official figures, between Jan 1. 2017, and Sept. 30, 2018, at least 154,920 Venezuelans entered Brazil via the town of Pacaraima, the only border crossing post between the two countries, the report says. But more than half of them have already left Brazilian territory, the report relays. Despite the fact that police in Roraima have not formally declared a strike, officers' wives set up camps in front of the police barracks to prevent their husbands from taking to the streets to protest the delay in salary payments, the report discloses. The strike by prison guards, meanwhile, led the Attorney General's Office to demand immediate measures amid fears that the massacres of prisoners that have been common in Roraima prisons in recent months would commence once again, the report adds. 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. EMBRAER SA: Brazil Court Overturns Injunction Blocking Boeing Deal ------------------------------------------------------------------ Anthony Boadle at Reuters reports that a Brazilian federal court has overturned a provisional injunction that blocked a proposed tie-up between planemakers Empresa Brasileira de Aeronautica SA (Embraer) and Boeing, Embraer said in a securities filing. Brazil's Embraer disclosed in July its intention to sell 80 percent of its commercial aviation business to Chicago-based Boeing for $3.8 billion, according to Reuters. Embraer has said the deal is crucial for its survival, the report notes. The injunction emerged from a class action brought by four congressmen from Brazil's left-wing Workers Party and had been granted, the report relays. Brazil's solicitor general's office confirmed the injunction that halted Embraer's negotiations with Boeing had been thrown out, the report discloses. The government's top lawyer had asked the court to overturn the injunction, arguing that it violated the constitutional right to freedom of enterprise by interfering in the negotiations between two private companies, the report notes. Trading of Embraer ADRs on the New York Stock Exchange was halted temporarily and for 30 minutes on the Sao Paulo bourse, on Dec. 11, the report says. Embraer shares rose nearly 2 percent and then settled 0.75 percent higher than its opening price, the report relays. The two aircraft manufacturers announced in June a $4.75 billion joint venture giving Boeing a controlling stake in Embraer's commercial aircraft arm, the report discloses. The Boeing-Embraer alliance, coming on the heels of the tie-up of Airbus and Bombardier disclosed last year, represents the biggest realignment in the global aerospace market in decades, strengthening established Western planemakers against newcomers from China, Russia and Japan, the report says. Boeing and Embraer executives have said they are confident their deal would win regulatory and shareholder approvals by the end of 2019, the report relays. A final decision would be in the hands of Embraer shareholders. But they first need a green light from the Brazilian government, which has a golden share in Embraer, the report notes. President Michel Temer's outgoing government has said it will leave that decision to the administration of right-wing President- elect Jair Bolsonaro, who takes office on Jan. 1, the report says. Bolsonaro and other members of his future cabinet have said they favor the deal in principle, the report adds. About Embraer SA Headquartered in Brazil, Empresa Brasileira de Aeronautica SA (Embraer) -- http://www.embraer.com-- is a company engaged in the manufacture of aircrafts for commercial aviation, executive jet and defense and government purposes. The Company has developed a line of executive jets based on one of its regional jet platforms and launched executive jets in the entry-level, light, ultra-large and mid-light/mid-size categories, the Phenom 100/300 family, the Lineage 1000 and the Legacy 450/500 family, respectively. The Company supplies defense aircraft for the Brazilian Air Force based on number of aircraft sold, and sells aircraft to military forces in Europe, Asia and Latin America. In July 2008, the Company acquired a 40% interest owned by Liebherr Aerospace SAS in ELEB Equipamentos Ltda (ELEB). ELEB is an aerospace system and component manufacturer, and its products include landing gear systems, hydraulics and electro-mechanical sub-assemblies, such as actuators, valves, accumulators and pylons. * * * As reported in the Troubled Company Reporter-Latin America on Aug. 2, 2018, The Latin American Herald said that Brazilian aircraft maker Empresa Brasileira de Aeronautica SA (Embraer) reported a net loss in the second quarter as sales declined, financial expenses rose and the Brazilian currency weakened. The company posted a loss of $126.5 million in the quarter, after earning a $61.7 million gain a year before, the company said, according to The Latin American Herald. Embraer had revenue of $1.26 billion in the period, a decline from the same period a year earlier, the report noted. TCRLA reported in Apr 30, 2018, that a class action against Embraer was recently dismissed by U.S. District Judge Richard Berman. The class action, which was brought in federal district court in New York, alleged that the firm had failed to adequately disclose the scope and possible financial impact of ongoing corruption investigations by the DOJ and SEC, harming the company's investors. In September 2016, the TCRLA reported that Embraer confirmed that it would cut nearly 8 percent of its workforce through a voluntary buyout program, slashing costs amid weak business jet sales and downsized defense contracts. The TCRLA further reported that Egan-Jones Ratings Company, on Sept. 23, 2016, lowered the senior unsecured ratings on debt issued by Embraer SA to BB+ from BBB-. =================== C O S T A R I C A =================== AERIS HOLDING: Moody's Cuts Sr. Unsec. Rating to Ba3, Outlook Neg. ------------------------------------------------------------------ Moody's Investors Service downgraded the Senior Unsecured rating of Aeris Holding Costa Rica S.A. to Ba3 from Ba2 and changed the outlook to negative. The rating action concludes the rating review that was initiated on October 19, 2018. This follows Moody's rating action in which the agency downgraded the Government of Costa Rica's ratings to B1 and changed the rating outlook to negative. For more information on the Government of Costa Rica please visit moodys.com. RATINGS RATIONALE The Ba3 rating of Aeris, one-notch above the Government of Costa Rica's rating of B1, reflects certain characteristics that limit its exposure to Costa Rica: substantial international revenues, access to international financing, and a transparent tariff setting framework under the Contrato de Gestion Interesada. Its rating is also supported by the project finance features under the Notes, including a trust managed cash waterfall, a 6-month (one semiannual payment) debt service reserve account, a forward looking 3-month Operation and Maintenance Reserve Account, limitations on additional indebtedness, distribution lock-up tests, and a Capital Expenditure Prefunding Account. Passenger traffic continues to perform adequately supporting Aeris' financial position. As of September 2018,traffic has grown approximately 4% in line with the company's expectations. Projected financial metrics for year-end 2018 are solid, with a Cash interest coverage ("CIC", cash flow available for debt service / interest) close to 2.5x and Funds from operations to debt of approximately 9%. Notwithstanding, the downgrade to Ba3 recognizes that Aeris has various linkages with the Government of the Costa Rica. These include the reliance on the CGI with the government under which the airport operates and the tariff setting process that requires government approval. The negative outlook mirrors the outlook on the ratings of Costa Rica, acknowledging that the linkages mentioned could limit its underlying credit profile if the credit quality of Cost Rica deteriorates further. WHAT COULD CHANGE THE RATING UP/DOWN In light of the current negative outlook, Moody's doesn't expect upward pressure. Downward pressure on the rating could develop due to sustained decreases in passenger traffic and cash flow generation, material capital expenditure overruns, or weaker financial metrics on a sustained basis with cash interest coverage ratio consistently below 2.0 times or its FFO/Debt ratio was consistently below 7.5%. Further deterioration of the rating of the Government of Costa Rica, could also lead to downward pressure on the rating. Aeris Holding Costa Rica S.A. is the operator of the country's main international airport, Aeropuerto Internacional Juan Santamaria. The principal methodology used in this rating was Privately Managed Airports and Related Issuers published in September 2017. REVENTAZON FINANCE: Moody's Cuts Corporate Family Rating to B1 -------------------------------------------------------------- Moody's Investors Service downgraded the ratings of Costa Rican issuers Instituto Costarricense de Electricidad (ICE) and Reventazon Finance Trust ratings to B1 from Ba2 and changed the outlook to negative. The rating action concludes the rating review that was initiated on October 19, 2018. This follows Moody's rating action in which the agency downgraded the Government of Costa Rica's ratings to B1 and changed the rating outlook to negative. Downgrades: Issuer: Instituto Costarricense de Electricidad (ICE) Corporate Family Rating, Downgraded to B1 from Ba2 Senior Unsecured Regular Bond/Debenture, Downgraded to B1 from Ba2 Issuer: Reventazon Finance Trust Corporate Family Rating, Downgraded to B1 from Ba2 Senior Secured Regular Bond/Debenture, Downgraded to B1 from Ba2 Outlook Actions: Issuer: Instituto Costarricense de Electricidad (ICE) Outlook, Changed To Negative From Rating Under Review Issuer: Reventazon Finance Trust Outlook, Changed To Negative From Rating Under Review RATINGS RATIONALE The rating action reflects Moody's view that the creditworthiness of these entities cannot be completely de-linked from the current operating environment and regulatory regimes in Costa Rica. The downgrade of ICE's ratings is prompted by the December 5, 2018 downgrade of Costa Rica's government bond rating to B1 from Ba2 with a negative outlook. The rating action on the Reventazon Finance Trust's ratings follows the downgrade of ICE's rating as the project is highly dependent on ICE's financial performance given the obligations that ICE has assumed under the contractual arrangements as sponsor, off-taker, EPC contractor, lessee and operator. Given that ICE is fully owned by the Costa Rican government, it falls under the scope of Moody's rating methodology for government-related issuers. ICE's Baseline Credit Assessment, which is a representation of the group's intrinsic creditworthiness before taking into account possible extraordinary support from the sovereign was lowered to b1 from ba3. ICE's BCA captures its key role as an autonomous government entity and its dominant position as the largest vertically integrated utility in the country, its fully regulated nature and government ownership, which creates material linkages with Costa Rica. The Costa Rican government does not guarantee ICE's debt obligations rated by Moody's. However, Moody's believes that there is a "high" likelihood of government extraordinary support in the case of financial distress for several reasons including reputational given the company's status as a major government- owned entity and its strategic importance to the country's economy overall. Furthermore, Moody's views that the government of Costa Rica and ICE are exposed to common risk factors as capture by the "high" default dependence assigned to ICE. The creditworthiness of Reventazon Finance Trust reflects the credit profile of ICE, as the project is highly dependent on ICE's financial performance given the obligations that it has assumed under the contractual arrangements. In addition, ICE is required to pay any shortfall of funds to service the debt, including any accelerated debt service following a termination event of the key contractual arrangements. The negative rating outlook of ICE and Reventazon Finance Trust reflects the negative outlook of the rating of the Government of Costa Rica and Moody's expectation that the high implied extraordinary support and dependence levels from the sovereign will not change. WHAT COULD CHANGE THE RATING UP/DOWN In light of the current negative outlook of the ratings of ICE and the Government of Costa Rica, Moody's doesn't expect upward pressure. ICE's ratings are likely to come under pressure following a downgrade of the sovereign rating or in the case of lower than anticipated implied sovereign support. Negative rating pressure on the BCA could surface from a deterioration in the credit supportiveness of the Costa Rican regulatory framework or if ICE's indebtedness increases significantly above anticipated levels such that the credit metrics deteriorate and cash flow interest coverage falls below 2.0x or RCF to debt declines below 6% for an extended period. A downgrade of ICE's ratings would also likely result in an downgrade of Reventazon Finance Trust's ratings. The methodologies used in these ratings were Government-Related Issuers published in June 2018, and Regulated Electric and Gas Utilities published in June 2017. =================================== D O M I N I C A N R E P U B L I C =================================== DOMINICAN REPUBLIC: Don't Deport Haitians, Agro Free Zone Warns --------------------------------------------------------------- Dominican Today reports that Maguana Tropical, the first and only agro-industrial free zone installed in the province, began its operations in 2004 with just Dominican workers, but 14 years later, of its 638 employees, 348 or 54% are Haitians. Each month, company executives of Israeli origin are forced to recruit Haitian labor, the report says. Therefore if they comply with the Law that establishes an 80-20 (Dominican-Haitian proportion) they will have no alternative but to shut down and go to another country in the region, according to Dominican Today. The company, which produces peppers of different varieties for export and is located on the San Juan-Azua highway, also has six Venezuelan employees, the report notes. It cautions that if the deportation of Haitians continues, as nationalists demand, at least 80% of the agricultural activity, especially farming would vanish in the province, the report relays. "As an example, just in a farm planted with beans, located on the San Juan-Las Matas de Farfan road, the 30 workers who worked on the farm were Haitians, including the foreman," outlet Hoy reported, RJR News adds. 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. ============= J A M A I C A ============= JAMAICA: Growth Seen in Construction Industry in July-Sept Quarter ------------------------------------------------------------------ RJR News reports that the local construction scene in Jamaica grew during the July to September quarter. According to the Bank of Jamaica's quarterly monetary policy report, this performance was largely driven by the continued expansion and upgrade of road infrastructure, the report notes. The estimated growth in the sector was partly offset by a decline in residential construction, according to RJR News. This was due to a reduction in housing starts by the National Housing Trust, the report adds. As reported in the Troubled Company Reporter-Latin America on Sept. 27, 2017, Moody's Investors Service has upgraded the Government of Honduras' foreign currency and local currency issuer and senior unsecured ratings to B1 from B2. The rating outlook was moved to stable from positive. JAMAICA: Ministers Mandated to Have Quarterly Meetings With Boards ------------------------------------------------------------------ RJR News reports that it's now compulsory for all Government Ministers to have quarterly meetings with the heads of boards, which fall under their portfolio as part of efforts to tighten the monitoring of state entities. Prime Minister Andrew Holness, who made the disclosure during a media briefing, says the new mandate will be placed in the code of conduct for ministers, according to RJR News. "I'm also mandating that minister's meet with their board chairmen and the board bi-annually to have a policy review. So the quarterly meeting, is more to enshrine the process of administration and the bi-annual meeting is to ensure that the boards are focused on policy. So this is a mechanism for evaluation . . . . ," the report quoted Minister Holness as saying. Minister Holness also responded to suggestions that the state-run oil refinery Petrojam should be privatized, the report relays. "We are not at that stage yet. (A) couple months ago, we put together the Petrojam review commission to advise the government as to what is the best approach to Petrojam. The policy of the government is to have full utilization of national assets," the Prime Minister said. As reported in the Troubled Company Reporter-Latin America on Sept. 27, 2017, Moody's Investors Service has upgraded the Government of Honduras' foreign currency and local currency issuer and senior unsecured ratings to B1 from B2. The rating outlook was moved to stable from positive. =========== M E X I C O =========== DOCUFORMAS SAPI: Fitch Hikes IDRs to BB-, Outlook Stable -------------------------------------------------------- Fitch Ratings has upgraded Docuformas S.A.P.I. de C.V.'s (Docuformas) long-term, local- and foreign-currency Issuer Default Ratings (IDRs) to 'BB-' from 'B+'. Its short-term, foreign- and local-currency ratings were affirmed at 'B'. The long-term National Scale ratings were upgraded to 'A-(mex)' from 'BBB+(mex)', while the short-term national scale rating was affirmed at 'F2(mex)'. The Rating Outlook for the long-term ratings is Stable. The upgrade reflects the significant improvement in Docuformas' leverage position after the recent capital injection of USD27 million, as well as the strengthening of corporate governance practices and reduction of key person risk under the new shareholder structure. The upgrade also considers the strengthening of its company profile, driven by sustained double- digit portfolio growth rates that support its growing franchise in the leasing sector in Mexico. KEY RATING DRIVERS IDRS, NATIONAL RATINGS AND SENIOR DEBT Docuformas' ratings are highly influenced by its company profile, which is underpinned by its stable business model and well- positioned franchise among Mexican independent leasing companies, although low within the financial system. The ratings also consider its improved leverage position, good profitability metrics, a funding structure with an adequate portion of unsecured funding and a comfortable liquidity position reflected in positive maturity gaps. Higher impaired loan ratios than peers and the wholesale nature of its funding mix are also factored in the ratings. Docuformas' tangible leverage position materially improved following capital injections in the third and fourth quarters of 2018. Its debt to tangible equity ratio decreased to 4.6 x as of the third quarter of 2018 (3Q18) from 9.2x at the close of 2017 (on a pro-forma basis including the USD12 million portion received during the fourth quarter). Moreover, the stronger capital base provides cushion to sustain estimated double-digit balance sheet growth in 2018 and 2019 while maintaining tangible leverage ratios at levels commensurate with a 'BB-' rating. The company plans to maintain a debt to equity ratio of around 5x, which Fitch estimates translates to a debt to tangible equity ratio of around 7x. As part of the transaction and change in shareholder structure, a more flexible shareholder agreement was signed. There is no mandatory payment of dividends, as these will now be determined each year based on the company's financial performance. Additionally, key person risk decreased significantly after a new Chairman of the Board was named and Adam Wiaktor, Docuformas' founder who previously also served as Chairman, will only remain as CEO and as a minority shareholder. Other corporate governance changes are also taking place, including the strengthening of committee composition, which in Fitch's views, will result in corporate governance practices more aligned to the industry's best practices. However, areas of improvement persist, such as the inclusion of more independent members in the board of directors (currently one member is independent). The company's impaired loans ratio improved to 5.3% at the close of 3Q18 compared with the past four-year average of 5.9%; however, this still compares negatively against its closest peers. Positively, concentrations on top-20 clients relative to equity decreased to close to 1.1x equity as a result of the capital injection and compare positively against similarly rated non-bank financial institutions. Docuformas' pre-tax net income to average assets ratio improved to 4.6% at the close of September 2018, from 1.6% at the close of 2017, when profitability was adversely affected by non-cash items that add volatility to its earnings. Nevertheless, good and recurring profitability ratios are a rating strength; these are supported by continued volume growth and improving efficiency ratios that partially offset decreasing margins, which were pressured in 2017 by the negative carry of the international bond issuance. As of the close of 3Q18, 69.6% of Docuformas' funding was unsecured, benefitting from its recent international debt issuance; this increased its unencumbered portfolio to 73.6% as of 3Q18, up from 50% at the close of 2016. This portfolio covered 1.5x its balance of unsecured debt at the close of 3Q18. In Fitch's view, the recent issuance of international notes provided better funding flexibility as it increased its unpledged asset base and the duration of debt. Docuformas' global issuance rating reflects senior unsecured obligations that rank pari passu with other senior indebtedness, and therefore, the rating is at the same level as the company's IDRs. The notes are unconditionally guaranteed by three subsidiaries of the company: Analistas de Recursos Globales, S.A.P.I. de C.V.; ARG Fleet Management, S.A.P.I. de C.V.; and Rentas y Remolques de Mexico, S.A. de C.V. The notes and the subsidiary guarantees will be Docuformas' and the guarantors' senior unsecured obligations. The local debt issues are at the same level as Docuformas' long- and short-term national ratings, reflecting its senior unsecured nature. RATING SENSITIVITIES Rating upside potential is limited in the short term. Docuformas' ratings could be upgraded in the medium term if the company materially improves its company profile through orderly growth and business model diversification, together with the greater flexibility of its funding mix and improving asset quality, while it maintains a tangible leverage ratio consistently close to 5x and sustains strong profitability ratios. Docuformas' ratings could be downgraded if its financial profile considerably deteriorates as a result of an increased NPL ratio, its debt to tangible equity ratio increases to levels consistently above 7x, and/or from material pressures and volatility on its profitability. The ratings of the international and local debt issues will mirror any movement in the company's long-term IDRs and national ratings, respectively, reflecting their senior unsecured nature. However, the rating of the notes may diverge from the IDRs if asset encumbrance increases to the extent that it materially deteriorates the effective recovery for the senior unsecured bondholders. Fitch has upgraded the following ratings: -- Foreign- and local-currency, long-term IDRs to 'BB-' from 'B+'; -- USD150 million Regs/144A senior unsecured notes to 'BB-' from 'B+'/'RR4'; -- National long-term Rating to 'A-(mex)' from 'BBB+(mex)'; -- National long-term unsecured notes to 'A-(mex)' from 'BBB+(mex)'. Fitch affirmed the following ratings: -- Foreign- and local-currency, short-term IDRs at 'B'; -- National short-term Rating at 'F2(mex)'; -- National short-term unsecured debt program at 'F2(mex)'. The Rating Outlook is Stable. TUXPAN MUNICIPALITY: Moody's Affirms B2 Global Scale Issuer Rating ------------------------------------------------------------------ Moody's de Mexico S.A. de C.V. affirmed the Municipality of Tuxpan's issuer rating of B2 (Global Scale, local currency) and changed the outlook to positive from stable. At the same time, Moody's upgraded to Ba1.mx from Ba2.mx the Mexican National Scale issuer rating of the municipality. Moody's de Mexico also affirmed the debt ratings of the municipality's MXN 220 million loan (original face value) with Banorte-Interacciones at Ba3/A3.mx (Global Scale, local currency/Mexico National Scale). RATINGS RATIONALE RATINGS RATIONALE FOR THE ISSUER RATINGS The upgrade of the Mexican National Scale issuer rating to Ba1.mx from Ba2.mx reflects the strengthening of Tuxpan's gross operating balance (GOB), which led to stronger cash financing balances and liquidity over the past two years. The Ba1.mx rating also reflects the absence of short-term debt, which decreases liquidity concerns slightly. These factors have helped improve Tuxpan's credit quality relative to national peers. The affirmation of the B2 issuer rating (Global Scale, local currency) takes into account continued credit challenges including a relatively high debt burden and low own-source revenue collection. In the period of 2016 to 2017, Tuxpan's GOB averaged 9.8% of operating revenues, which compares very favorably to the -1.2% median of B2-rated Mexican municipalities. This improvement is the result of an increase in operating revenues, in conjunction with a reduction in operating expenditures, which have shown a compound annual growth rate over the 2015-2017 period of 6.9% and -2.5%, respectively. These strong operating results have permitted Tuxpan to post cash financing balances equivalent to an average of 16.4% of total revenue. For 2018-19, Moody's estimates that the GOB and cash financing balance will remain at a solid 5.5% of operating revenues and 10.8% of total revenues. Due to these operating and financial surpluses, Tuxpan's liquidity improved, registering a ratio of cash to current liabilities of 1.78 times (x) in 2017, higher than the median for B2 Mexican rated peers (0.17x). This coverage was increased from a significant reduction in current liabilities, prompted by a depuration in current liabilities accounts that did not have a financial support. For 2018-19, Moody's estimates that the liquidity position of the entity will remain in a solid average of 2.2x. Offsetting these improvements, the ratio of net direct and indirect debt to operating revenues measured 52.6% 2017, substantially well above the median of Mexican municipalities rated at B2 (10.9%) and among the highest of any Moody's-rated Mexican municipalities. Moody's forecasts that Tuxpan's net direct and indirect debt will increase to 61.1% of operating revenue as a result of the acquisition of a PPP to modernize the municipal public lighting, with a pledge of federal participations in a trust as a source of payment. Including this PPP, Tuxpan's annual debt service will measure an average of 10% of its operating revenues for 2018-19. RATIONALE FOR THE POSITIVE OUTLOOK The positive outlook reflects Moody's expectation that the municipality will maintain strong operating and cash financing balances, which will continue to support liquidity. Additionally, the positive outlook reflects the improvement in Tuxpan's debt burden which, while still high, is lower than the 81% recorded in 2014. Tuxpan's debt burden is not expected to increase beyond 2019. RATIONALE FOR THE ENHANCED LOAN RATING The affirmation of the enhanced loan ratings reflects the affirmation of the issuer ratings. In Moody's opinion there have been no material changes to the debt service coverage metrics. WHAT COULD CHANGE THE RATINGS UP/DOWN If the municipality continues to maintain positive operating and financial balances and a strong liquidity position in addition to a declining trend in the debt burden, upward pressure on their ratings could emerge. Conversely, a deterioration in the operating and financial balances, leading to weaker liquidity, could exert downward pressure on the ratings. In addition, given the link between the enhanced loan and the credit quality of Tuxpan, an upgrade/downgrade of the issuer ratings could exert upward/downward pressure on debt ratings for the enhanced loan. Also, if debt service coverage metrics improve/fall materially above/below Moody's expectations, the ratings could face similar upward/downward pressure. The methodologies used in these ratings were Regional and Local Governments published in January 2018, and Rating Methodology for Enhanced Municipal and State Loans in Mexico published in July 2017. ====================== P U E R T O R I C O ====================== COLONIAL MEDICAL: Unsecureds to Get 50% in 12 Monthly Payments -------------------------------------------------------------- Colonial Medical Management Corp. filed an amended plan of reorganization and accompanying disclosure statement proposing that general unsecured claims, classified in Class 3, will receive 50% payable in equal monthly payments starting April 2019 for one year until March 2020. Municipio de Anasco claim no. 12 alleged montly rent arrears. The total amount of claim no. 12 is $573,213.36. Claim is objected. If the claim is not disallowed as requested by the Debtor in the objection, the Debtor proposes: (A) continuing the payment of the rent as per the contract and until the expiration date of March 19, 2020; (B) Eight installment payments for the payment in full of the claim as follows: 1. Payments of $75,000 payable on: February 28, 2019; March 31, 2019; May 31, 2019; July 31, 2019; September 30, 2019; November 30, 2019, January 31, 2020 and a final payment of $48,213.36 on March 15, 2020 for a total of $573,213.36. Payments and distributions under the Plan will be funded by the income after deducting operational expenses of the services provided by the business. A full-text copy of the Disclosure Statement dated November 27, 2018, is available at: http://bankrupt.com/misc/prb18-1706925BKT11-138.pdf About Colonial Medical Colonial Medical Management Corp. is an ambulatory health care clinic located in Anasco, Puerto Rico. Its practice location is listed as Carretera 402 Km 1.8 Bo. Marias Anasco, Puerto Rico. The Debtor previously sought bankruptcy protection (Bankr. D.P.R. Case No. 14-01922) on March 13, 2014. Colonial Medical sought protection under Chapter 11 of the Bankruptcy Code (Bankr. D.P.R. Case No. 17-06925) on Nov. 21, 2017. In the petition signed by Luis Jorge Lugo Velez, its president, the Debtor estimated assets of less than $50,000 and liabilities of $1 million to $10 million. Judge Brian K. Tester presides over the case. Ada Conde, Esq., at 1611 Law and Justice for All, Inc., is the Debtor's bankruptcy counsel. The U.S. Trustee appoints Edna Diaz De Jesus, the Puerto Rico State Patient Care Ombudsman, as the Patient Care Ombudsman. EMPRESAS CARRION: Case Summary & 5 Unsecured Creditors ------------------------------------------------------ Debtor: Empresas Carrion Allende, Inc. dba Antiguo Supermercado Jaime 1054 Santana Arecibo, PR 00612 Business Description: Empresas Carrion Allende, Inc. operates a grocery store in Arecibo, Puerto, Rico. Chapter 11 Petition Date: December 6, 2018 Court: United States Bankruptcy Court District of Puerto Rico (Old San Juan) Case No.: 18-07111 Judge: Hon. Mildred Caban Flores Debtor's Counsel: Francisco J. Ramos Gonzalez, Esq. FRANCISCO J RAMOS & ASOCIADOS CSP PO Box 191993 San Juan, PR 00919-1993 Tel: 787 764-5134 Fax: 787 758-5087 E-mail: fjramos@coqui.net Estimated Assets: $1 million to $10 million Estimated Liabilities: $1 million to $10 million The petition was signed by Sandra I. Carrion Montalvo, president. A full-text copy of the petition containing, among other items, a list of the Debtor's five unsecured creditors is available for free at http://bankrupt.com/misc/prb18-07111.pdf RGE CARIBBEAN: Case Summary & Unsecured Creditor ------------------------------------------------ Debtor: RGE Caribbean LLC 605 Condado Street Edificio San Alberto, Suite 322 San Juan, PR 00907 Business Description: RGE Caribbean LLC is privately held company in San Juan, Puerto Rico engaged in the business of utility system construction. Chapter 11 Petition Date: December 9, 2018 Court: United States Bankruptcy Court District of Puerto Rico (Old San Juan) Case No.: 18-07178 Judge: Hon. Edward A. Godoy Debtor's Counsel: Maria Mercedes Figueroa Y Morgade, Esq. FIGUEROA Y MORGADE LEGAL ADVISORS 3415 Alejandrino Ave., Apt. 703 Guaynabo, PR 00969-4956 Tel: (787)234-3981 Email: figueroaymorgadelaw@yahoo.com Total Assets: $1,353,420 Total Liabilities: $1,904,761 The petition was signed by Miguel Roberto Camino Landron, member. The Debtor lists Vitol Virgin Island Corp as its sole unsecured creditor holding a claim of $1,904,761. A full-text copy of the petition is available for free at: http://bankrupt.com/misc/prb18-27178.pdf SEARS HOLDING: Bid Deadline for SHIP Business Set for Dec. 11 ------------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of New York approved the bidding procedures for the sale of Sears Holdings Corporation, et al.'s Sears Home Improvement Business. As reported by the Troubled Company Reporter on Nov. 23, 2018, the Debtors and Service.com (the "Stalking Horse Bidder") entered into an asset purchase agreement (the "Stalking Horse Agreement") for the sale of the SHIP Business, pursuant to which: (i) the Stalking Horse Bidder agreed to pay $60,000,000 in cash, prior to adjustment of such amount in accordance with the terms of the Stalking Horse Agreement (the 'Cash Purchase Price'), and to assume certain assumed liabilities (together with the Cash Purchase Price, the 'Stalking Horse Bid') for the Assets, subject to higher or better offers, and Court approval; and (ii) the Debtors agreed that, in the event that the Court approves the purchase of the SHIP Business by any bidder other than the Stalking Horse Bidder, to pay the Stalking Horse Bidder and such transaction is consummated, a break-up fee in the amount of 1.5% of the Cash Purchase Price (the 'Break-Up Fee'). Any person or entity interested in participating in the auction must submit a qualified bid on or before Dec. 11, 2018, at 4:00 p.m. (prevailing Eastern time). Objections to the sale, if any, are due no later than 4:00 p.m. (prevailing Eastern time) on Dec. 11, 2018. An auction for the assets has been set for Dec. 13, 2018, at 10:00 a.m. (prevailing Eastern Time), and will be conducted at the offices of: Weil, Gotshal & Manges LLP 767 Fifth Avenue New York, New York Tel: (212) 310-8000 The Court will hold a sale hearing on Dec. 18, 2018, at 10:00 p.m. (prevailing Eastern Time), at the U.S. Bankruptcy Court for the Southern District of New York, 300 Quarropas Street, White Plains, New York 10601. 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 automotiv 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. Weil, Gotshal & Manges LLP is serving as legal counsel, M-III Partners is serving as restructuring advisor and Lazard Freres & Co. LLC is serving as investment banker to Holdings. DLA Piper LLP is the real estate advisor. Prime Clerk is the claims and noticing agent. SEARS HOLDINGS: U.S. Trustee Appoints Elise Frejka as CPO --------------------------------------------------------- William K. Harrington, United States Trustee for Region 2, appoints Elise S. Frejka as Consumer Privacy Ombudsman for Sears Holdings Corporation, et al. The CPO's appointment was made in respect of the transactions set forth in Orders of the Bankruptcy Court Approving (1) the Bidding Procedures for the sale of Sears Home Improvement Business and (2) the Global Bidding Procedures to sell the Debtors' assets. Elise Frejka established in her Verified Statement that she is a "disinterested person" as that term is defined in 11 U.S.C. Sec. 101(14) in connection with her appointment as the Consumer Privacy Ombudsman in the jointly administered chapter 11 cases of Sears Holdings Corporations and its debtor affiliates. Frejka can be reached at: Elise S. Frejka, Esq. FREJKA PLLC 420 Lexington Avenue, Suite 310 New York, NY 10170 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. Weil, Gotshal & Manges LLP is serving as legal counsel, M-III Partners is serving as restructuring advisor and Lazard Freres & Co. LLC is serving as investment banker to Holdings. DLA Piper LLP is the real estate advisor. Prime Clerk is the 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 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. 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