/raid1/www/Hosts/bankrupt/TCRLA

/raid1/www/Hosts/bankrupt/TCRLA_Public/190213.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, February 13, 2019, Vol. 20, No. 31 Headlines B R A Z I L ACHE LABORATORIOS: Fitch Affirms 'BB' FC IDR, Outlook Stable INVEPAR: S&P Lowers Global Scale Ratings to 'CCC+', On Watch Neg. D O M I N I C A N R E P U B L I C DOMINICAN REPUBLIC: Customs Hikes Tax on Cell Phones to 8% J A M A I C A UC RUSAL: US Lifts Sanctions M E X I C O CREDITO REAL: S&P Affirms Global Scale 'BB+' Issuer Credit Rating DOCUFORMAS S.A.P.I.: Fitch Affirms 'BB-' IDR, Outlook Stable GRUPO CEMENTOS: Fitch Hikes IDRs to BB+ & USD260M Sr. Notes to BB+ MEXICO: Needs Comprehensive Strategy to Fight Gasoline Theft RASSINI AUTOMOTRIZ: Moody's Affirms Ba2 CFR, Alters Outlook to Neg P U E R T O R I C O LUBY'S INC: Dimensional Fund Has 7.4% Stake as of Dec. 31 PUERTO RICO: Settlement Agreement with Sales Tax Entity Approved U R U G U A Y URUGUAY: Welcomed Fewer Tourists but Spending Rose 15% in January V E N E Z U E L A PETROLEOS DE VENEZUELA: Sued by Owens-Illinois Over $500MM Award - - - - - =========== B R A Z I L =========== ACHE LABORATORIOS: Fitch Affirms 'BB' FC IDR, Outlook Stable ------------------------------------------------------------ Fitch Ratings has affirmed Ache Laboratorios Farmaceuticos S.A.'s (Ache) Long-Term, Foreign-Currency Issuer Default Rating (FC IDR) at 'BB', Long-Term, Local-Currency IDR (LC IDR) at 'BBB' and its National Scale Rating at 'AAA(bra)'. The Rating Outlook is Stable for the FC IDR, the LC IDR and the National Scale Rating. Ache's investment-grade LC IDR reflects the defensive nature of the pharmaceutical industry, which translates into a low level of cash flow volatility during a five year rating period, and its strong business position in the Brazilian pharmaceutical market with a leadership position in the prescription drug segment. Ache has higher margins than its Brazilian peers due to its mix portfolio, focused on the prescription segment, strong brands that get pricing premiums and its market-leading size, which helps fixed-cost dilution. The company's position is viewed to be sustainable due to its large sales team that gives it a key competitive advantage in terms of outreach to the medical community and brand awareness. Ache's financial profile resembles that of global peers rated in the 'A' category because of its low debt levels relative to cash flow, high cash balance and strong FCF generation before dividends. The ratings incorporate Fitch's expectation that Ache will remain committed to an unleveraged capital structure, while managing its growth with cash flow supporting organic growth and small acquisitions. Fitch expects net leverage ratios to remain below 0.5x in the next four years. Ache has had a shareholder- friendly dividends policy, but Fitch considers that the company has flexibility to adjust payouts if necessary to avoid deterioration of its credit metrics due to the fact that ownership of the company is concentrated in three families. Ache's LC IDR has been constrained at 'BBB' by its lack of geographic diversification, as the company generates essentially all of its cash flow in Brazil, a country with high operating risk. The company also does not have the size or global market positions of peers rated in the 'A' category such as Pfizer, Merck and Bristol-Myers Squibb. Ache's 'BB' FC IDR is capped by Brazil's Country Ceiling (BB), as the company's operations are essentially in Brazil and it does not have substantial assets or cash held abroad to help mitigate transfer and convertibility risk. KEY RATING DRIVERS Solid Business Profile: Ache has a solid and recognized brand in the Brazilian pharmaceutical industry. Its diversified product portfolio, leadership in the prescription drugs segment, and presence in the fast-growing over-the-counter (OTC), generics and dermo-cosmetics segments support its sound business profile. Ache is the fourth-largest laboratory in Brazil and has one of the largest sales forces in the domestic market, which provides a key competitive advantage compared with local and international peers. This allows an extensive outreach to the medical community, which is crucial for having its products receive prescriptions. Low Product-Portfolio Risk: Ache's operating cash flow is not exposed to license renewals or patent expirations. Similar to other emerging-markets pharmaceutical companies, Ache has a narrower research and development (R&D) product pipeline than its multinational competitors and has a weaker portfolio of patented products. Positively, the company's exposure to licensing agreements is low, representing less than 10% of revenues from these products. Ache has consistently been increasing its efforts to innovate and renovate its product portfolio by investing about 2.5% of its revenues in R&D. During 2019, Fitch expects product launches to reach more than 20% of revenues from 16% in 2012. Increasing Competition: Over the last few years, competition has increased with the local pharmaceutical players consolidating brands and expanding their product reach across segments and therapeutic classes. Also, some competitors started to present their market position under group basis instead of single entities. As a result, Ache lost two market positions in the total Brazilian pharmaceutical market, becoming the fourth-largest player in terms of net revenues. In its key segment, prescription segment, Ache is the second largest with a 6.8% market-share. Fitch expects Ache's margins to be under pressure at the 28%-30% range but it remains adequate in comparison with the average of the industry. Increased competition has led to higher product development and marketing expenses. Fitch believes that Ache's Brazilian operating expertise and strong distribution system are key factors to help to mitigate this increasing competition. CFFO to Remain Sound: Fitch expects Ache's cash flow from operations (CFFO) to remain robust despite increased competition. Ache's net revenue and EBITDA during the LTM ended Sept. 30, 2018 were BRL3.2 billion and BRL980 million, respectively, with EBITDA margins at 30.3%. These figures compare with net revenues of BRL2.9 billion and EBITDA of BRL871 million in 2017, with an EBITDA margin of 29.4%. Fitch forecasts the company's EBTIDA margin will move to around 28%-30%, a decline from the 32%-35% range over the last four years. FFO and CFFO remained strong, at BRL813 million and BRL694 million, respectively, during the same period. Dividends and Capex to Pressure FCF: Ache has a track record of maintaining an aggressive shareholder-friendly policy, which has led to negative FCF since 2012, with 2017 being the exception with a positive FCF of BRL26 million. Between 2012 and 2016, Ache generated an average negative FCF of BRL55 million. Dividend distributions averaged BRL405 million per year in the period, around 90% dividends payouts. Fitch expects that in a more challenging scenario, the company would pursue a more conservative dividend policy in order to increase its financial flexibility and sustain its strong capital structure. This assumption takes into consideration Ache's plan to expand its capacity by 50% with a new production facility in Permanbuco, with estimated costs of BRL600 million. During the LTM ended September 2018, Ache generated negative FCF of BRL150 million, after BRL185 million capex and BRL533 million of dividend pay-outs (around 85% of net income). Unleveraged Capital Structure: Ache has historically maintained low leverage ratios, and its credit measures continue to be quite strong. Fitch's projections indicate a net debt/EBITDA ratio remaining below 0.5x in the next four years. Fitch's base case scenario incorporates the new capex for the new facility and around 80% of dividends payout. In the past five years, the company's average leverage, as measured by the FFO-adjusted leverage ratio, was 0.4x, while its net debt/EBITDA ratio was negative at 0.2x. DERIVATION SUMMARY Ache's LC IDR and National Scale 'BBB'/'AAA(bra)' ratings reflect the defensive nature of the pharmaceutical industry, its leading position in the prescription drug segment and low product portfolio risk with no exposure to patents or licenses. Ache's lack of geographic diversification, lower business scale, relatively narrower research portfolio and credit access/financial flexibility compared with top pharmaceutical companies currently constrains its 'BBB' local-currency ratings. Ache is well positioned in terms of profitability and leverage compared with most of the top global pharmaceutical issuers that are rated 'A'/'AA' by Fitch, with average EBITDA margin of 31% and average net leverage of 1.5x. In comparison with others Brazilian issuers in Fitch's rated universe, Ache's business resilience to economic cycles, strong CFFO generation, financial flexibility as well as its unleveraged capital structure stands out amongst its peers. Fitch's 'BBB' portfolio average net leverage, measured by net debt/EBITDA, is 2.2x. Ache's capital structure has consistently been stronger. During the next four years, Fitch projects the company's net leverage will remain below 0.5x. Ache's operations being concentrated in Brazil and lack of operating/financial assets abroad cap its ratings at the Brazilian Country Ceiling of 'BB'. KEY ASSUMPTIONS -- Revenue growth close to 10% from 2019 to 2021; -- Innovation to continue to represent around 20% of revenues (R&D expenses of around 2% of revenue); -- EBITDA margin in the range of 28%-30% due to increasing SG&A related to diversification of the portfolio; -- Capex of BRL785 million from 2019-2021, which includes the construction of the new plant in Pernambuco; -- Maintenance of the high dividend pay-outs at around 80% of net income. RATING SENSITIVITIES Developments That May, Individually or Collectively, Lead to Positive Rating Action For the Foreign-Currency IDR, positive rating actions are limited by Brazil's country ceiling of 'BB', while for the Local Currency IDR of 'BBB', an upgrade is unlikely in the medium term. Developments That May, Individually or Collectively, Lead to Negative Rating Action Ache's credit ratios are very strong at the current rating level, but unexpected events that move the company's net bet/EBITDA beyond 2.0x or FFO-adjusted leverage beyond 3.0x could result in negative rating action for the Local Currency IDR or National Scale Rating. Significant market-share or brand deterioration could also trigger a downgrade. A further negative rating action on Brazil's sovereign ratings and country ceiling could also result in negative rating action for the company's foreign- currency IDR. LIQUIDITY Robust Liquidity: Ache has historically held a robust liquidity position. As of Sept. 30, 2018, Ache's cash balances covered its short-term debt by 3.3x. As of the same date, the company reported BRL154 million of cash and marketable securities and total adjusted debt of BRL243 million, of which BRL46 million was short- term. About 85% of Ache's debt is with the Brazilian Development Bank (BNDES). FULL LIST OF RATING ACTIONS Fitch has affirmed the following ratings: Ache Laboratorios Farmaceuticos S.A. (Ache): -- Foreign Currency Issuer Default Rating (IDR) at 'BB'; Outlook Stable; -- Local currency IDR at 'BBB'; Outlook Stable; -- National Scale rating at 'AAA(bra)'; Outlook Stable. INVEPAR: S&P Lowers Global Scale Ratings to 'CCC+', On Watch Neg. ----------------------------------------------------------------- On Feb. 11, 2019, S&P Global Ratings downgraded Invepar and its subsidiaries to 'CCC+' from 'B' on the global scale and to 'brBB-' from 'brA-' on the Brazilian national scale. The ratings remain on CreditWatch with negative implications, reflecting the risk of a multiple-notch downgrade if the company doesn't avoid a debt acceleration at subsidiary CART's level that could be triggered if it doesn't obtain a waiver from its debenture holders. S&P said, "The downgrade of Invepar reflects our view that its capital structure is unsustainable. Since mid-2018, the company has attempted to refinance about R$1 billion of debt issued by the holding company Invepar, which matures on March 11, 2019. Even assuming that the group will manage to extend this debt, a permanent solution would depend on deleveraging using fresh equity or asset sales, options with outcomes outside the company's control. Although its consolidated cash position was R$1.4 billion as of September 2018, only R$400 million was at the holding level and the rest was liquidity at subsidiaries that the holding company doesn't have full access to. Moreover, the amount of dividends received isn't enough to service its sizable debt, and we don't expect this to change in the near future." The negative CreditWatch listing reflects the risk of multiple downgrades in the case of a debt acceleration, considering that the debt documents of CART's two series of debentures -- totaling R$1 billion as of September 2018 -- contain a clause stating that a downgrade to below 'brA-' is a non-automatic acceleration. The downgrade of CART to 'brBB-' will require a waiver by at least 75% of the debenture holders, and as mentioned above, S&P believes executing this may be difficult. The CreditWatch also reflects the default risk if Invepar is required to make unforeseen payments because of cross-default clauses, if it's unable to refinance the holding company's debt that matures on March 11, 2019, or if it performs an exchange that S&P believes is distressed. =================================== D O M I N I C A N R E P U B L I C =================================== DOMINICAN REPUBLIC: Customs Hikes Tax on Cell Phones to 8% ---------------------------------------------------------- Dominican Today reports that Dominican Republic customs agency disclosed a tax increase from 3 to 8% on imported mobile communication equipment. It said the decision is based on Law 146-00 which allows Customs to charge up to 20%, but because of complaints at the time it postponed its enforcement and only began to charge 3%, according to Dominican Today. Reactions against the measure came swiftly from various sides, including opposition party(PRM) presidential candidate Luis Abinader and the telecoms Claro and Altice, the report notes. In a statement, Customs said that it took the complaints into account and decided to limit the tax to 8% and not 20%, the report 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 ============= UC RUSAL: US Lifts Sanctions ---------------------------- Caribbean360.com reports that the United States government has lifted sanctions on UC Rusal, the parent company of Jamaican-based West Indies Alumina Company (Windalco). Minister of Transport and Mining Robert Montague told the House of Representatives that means entities in Jamaica can now freely do business with Windalco without the threat of direct and/or secondary sanctions, according to Caribbean360.com. "This is positive news for the Government of Jamaica. It is positive news for Windalco and its over 1,000 employees who had faced an uncertain future when the sanctions were initially announced, and it is positive news for Jamaican companies and individuals that conduct business with Windalco. It is positive news for the economy," he said, the report relays. The report notes that Mr. Montague added that UC Rusal has agreed to "unprecedented transparency into its operations by undertaking extensive, ongoing auditing, certification, and reporting requirements". In addition, independent persons will control a significant bloc of the shares of the En+ Group, which is UC Rusal's parent company, the report relays. On April 6, 2018 the US Department of the Treasury's Office of Foreign Assets Control (OFAC), via General Licence No. 14, imposed various sanctions on Russian Oleg Deripaska and several companies that were wholly or primarily owned by him, the report discloses. The report notes that the sanctions resulted in the assets of UC Rusal that were within the US jurisdiction being frozen and US persons being prohibited from having dealings with them. Further, non-US persons could face secondary sanctions for knowingly facilitating significant transactions for, or on behalf of Deripaska and with his companies, the report says. Mr. Montague noted the significant efforts were made by the Government towards mitigating the effects of the sanctions on the people, government and economy of Jamaica, the report notes. He said that through his Ministry and the Ministry of Foreign Affairs and Foreign Trade, applications were made to the relevant US authorities for waivers to conduct business with UC Rusal, the report says. The report discloses that this was with a view to sustaining the operations of Windalco towards preserving the livelihood of the citizens and preventing any major fallout in the economy. The report relays that Mr. Montague said a formal response was received from OFAC, which stated that Jamaica was covered by General Licence No.14 and would not be the direct subject of sanctions. The Transport and Mining Minister also noted the timely intervention by Prime Minister Andrew Holness in the matter, the report notes. "The Prime Minister, at a critical point, when all looked bleak, had a very productive meeting with the US Treasury Secretary. This meeting, along with the help of the US Congress black Caucus and many others, contributed," he told the House, the report adds. As reported in the Troubled Company Reporter-Latin America on April 18, 2018, Fitch Ratings revised the Rating Watch on Russia-based aluminium company United Company Rusal Plc's Long- Term Issuer Default Rating (IDR) of 'BB-', Short-Term IDR of 'B' as well as Rusal Capital D.A.C.'s senior unsecured rating of 'BB- '/'RR4' to Negative from Evolving. Fitch simultaneously withdrew all the ratings. =========== M E X I C O =========== CREDITO REAL: S&P Affirms Global Scale 'BB+' Issuer Credit Rating ----------------------------------------------------------------- S&P Global Ratings affirmed its global scale 'BB+' issuer credit ratings on Credito Real S.A.B. de C.V. SOFOM, E.N.R. (Credito Real). S&P said, "We also affirmed our 'mxA+/mxA-1' national scale issuer credit and issue-level ratings on the company. The outlook remains stable. In addition, we affirmed our 'B+' issue-level rating on the subordinated perpetual notes, and our 'BB+' issue- level rating on the lender's senior unsecured notes. The ratings on Credito Real's senior unsecured debt incorporate that, as of Sept. 30, 2018, secured debt represented less than 15% of adjusted assets, and unencumbered assets completely covered unsecured debt. Consequently, we don't apply notches of subordination to these issuances." The ratings on Credito Real incorporate its sound market share in Mexico's non-bank payroll lending segment that translates into a steady growth in operating revenue and business stability. S&P said, "In addition, we incorporate the still solid capitalization -- thanks to the rising internal capital generation -- despite the share buyback program for up to $100 million the lender announced in October 2018. This results in an expected risk-adjusted capital (RAC) ratio of 11.8% on average for 2019 and 2020. Although credit losses have increased since Instacredit's acquisition in 2016, we expect them to diminish gradually." Finally, Credito Real has sufficient liquidity to support its daily operations in the next 12 months, and the issuance of $400 million in January 2019 helped by reducing short- term debt refinancing risk. The stand-alone credit profile (SACP) of Credito Real remains at 'bb+'. The issuer credit rating is 'BB+' because it doesn't incorporate notching for potential government or group support. DOCUFORMAS S.A.P.I.: Fitch Affirms 'BB-' IDR, Outlook Stable ------------------------------------------------------------ Fitch Ratings has affirmed the ratings for Docuformas S.A.P.I. de C.V. (Docuformas) as follows: -- Long-term local- and foreign-currency Issuer Default Ratings at 'BB-'; -- Foreign- and local-currency short-term IDRs at 'B'; -- USD150 million Regs/144A senior unsecured notes at 'BB-'; -- National long-term rating at 'A-(mex)'; -- National long-term unsecured notes at 'A-(mex)'; -- National short-term rating at 'F2(mex)'; -- National short-term unsecured debt program at 'F2(mex)'. The Rating Outlook for the long-term ratings is Stable. The affirmations follow the announcement that Docuformas has acquired 100% of the capital of Mexarrend, S.A. de C.V. and Compania Mexicana de Arrendamiento, S.A. de C.V. (Grupo Mexarrend). The affirmations also reflect recent covenant changes for Docuformas' outstanding senior notes due 2022. KEY RATING DRIVERS IDRs, NATIONAL RATINGS AND SENIOR DEBT Fitch views the acquisition and funding profile changes that will likely result from the covenant update as commensurate with the current ratings. Fitch expects the effects on Docuformas' business and financial profile from the acquisition to be minor due to the manageable size of the transaction and the small workforce of the companies acquired (around 10 employees). Fitch will, however, closely monitor the incorporation of the acquired companies' operations to assess possible execution risks. Fitch will also monitor the evolution of Docuformas' funding profile once it increases its secured credit facilities to ensure the unsecured debt to total funding ratio and unencumbered assets remain within expected ranges. The acquired companies' have a long track record of more than 20 years. Their business, financial profiles and targeted segments are in line with those of Docuformas and should complement and widen its client base. Based on the information currently available Fitch does not anticipate significant changes to Docuformas' company profile. The total assets of the acquired companies were approximately 6.1% of Docuformas' total assets as of September 2018 with an asset quality commensurate with Docuformas' averages. The transaction will generate approximately MXN60 million of goodwill, and therefore, Fitch has estimated pro forma leverage ratios of around 4.9x, which are still adequate for the current rating level. Fitch continues to believe Docuformas' external communication practices have room for improvement, particularly regarding expectations for inorganic growth. The company was expecting high double-digit balance sheet growth in 2019, and this acquisition represents a proportion of the forecasted growth. On January 30, 2019 Docuformas announced the completion of a Consent Solicitation process related to its outstanding senior notes due 2022. The purpose of the amendment was to give the company more flexibility to access secured facilities and to achieve a competitive cost of funding under a more complex operating environment and to align covenants with other notes issued by comparable companies. The completed solicitation modification included maintenance of the fixed charge coverage ratio and change on the additional indebtedness ratio with the inclusion of a capitalization ratio, as well as inclusion of a total unencumbered assets to total unsecured debt ratio to substitute for the previous permitted liens. Fitch does not expect its view on Docuformas to change solely due to the adoption of the amendments. However, Docuformas expects to increase its secured indebtedness, which could drive the unsecured debt to total debt ratio to nearly 48% (69.2% as of September 2018) but is expected to return to previous years' levels in 2020 and 2021. Docuformas' ratings may come under pressure in the event that unsecured debt to total funding substantially deviate from expected ratios. 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. However, its market penetration within the financial system is low. The ratings also reflect Docuformas' improved leverage position after a capital injection of USD27million as of YE2018, the company's adequate profitability metrics, its positive maturity gaps, the wholesale nature of its funding mix and its higher-than-peers impaired loan ratios. The company's impaired loans ratio improved to 5.3% at the close of 3Q18 compared from the 5.9% past four-year average, but this still compares negatively against its closest peers. Positively, top 20 client concentrations decreased to close to 1.1x equity as a result of the capital injection. 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 which add volatility to its earnings. Fitch's affirmation of Docuformas' global senior debt rating following the recent covenant changes reflects that the debt ranks pari passu with other senior indebtedness. Therefore, the rating is at the same level as the company's IDRs. The local debt issues are at the same level as Docuformas' long- and short-term national ratings, reflecting its senior unsecured nature. RATING SENSITIVITIES IDRs, NATIONAL RATINGS AND SENIOR UNSECURED DEBT 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, from substantial deterioration of its funding mix 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. The notes' rating may diverge from the IDRs if asset encumbrance increases to the extent that it subordinates senior unsecured bondholders. GRUPO CEMENTOS: Fitch Hikes IDRs to BB+ & USD260M Sr. Notes to BB+ ------------------------------------------------------------------ Fitch Ratings has upgraded Grupo Cementos de Chihuahua, S.A.B. de C.V.'s (GCC) local and foreign currency Issuer Default Ratings (IDRs) to 'BB+' from 'BB'. Fitch also upgraded GCC's USD260 million senior notes due 2024 to 'BB+' from 'BB'. The Rating Outlook is Stable. These rating actions reflect GCC's improved business profile following a series of organic and inorganic transactions that have increased the company's product mix and market position. Demand for the company's products has also increased due to improvements in the competitive cost position of shale producers in the Permian and Bakken basins. The changes have bolstered GCC's capacity utilization rates and boosted its margins given the high operating leverage of the cement industry. Fitch expects GCC's net debt/EBITDA to reach 1.0x in 2019 due to strong FCF generation of about USD100 million. This compares with 1.6x as of LTM 3Q18 and with 1.9x in 2017. The upgrades reflect Fitch's expectations that the company will continue to pursue acquisitions that further enhance its position within its key markets. Given the projected leverage levels, GCC should have sufficient rating headroom to pursue mid-size acquisitions while still maintaining net debt/ EBITDA below 3x. GCC increased its U.S. cement production capacity through the acquisition of plants in Odessa, TX (acquired in 2016; 514,000 tons) and Trident, MT (2018; 315,000 tons) as well as through its 440,000 ton expansion in Rapid City, SD, which was completed in fourth-quarter of 2018. These transactions have lowered transportation costs within the company's geographic footprint and have bolstered barriers to entry in its key markets. Fitch expects cement demand for oil well cement, which represents about one quarter of GCC's U.S. volumes, to remain robust as the full cycle cash cost of producing a barrel of oil is around USD35 in the Permian basin. KEY RATING DRIVERS Leading Market Shares: Grupo Cementos de Chihuahua, S.A.B. de C.V.'s (GCC) contiguous presence from Chihuahua in northern Mexico to North Dakota and its efficient distribution and logistics system allow it to serve markets in 16 states across the U.S. Midwest, Southwest and Rocky Mountain regions and in the Canadian province of Alberta. The company is the dominant cement producer in the state of Chihuahua and has strong market positions in Colorado, North Dakota, South Dakota, Wyoming, New Mexico and western Texas. GCC faces a lower threat from seaborne imports, which can significantly pressure prices, due to its contiguous presence away from the coasts. Rising Oil Well Cement Demand: Oil production in the Permian region in western Texas and eastern New Mexico has grown to 3.8 million barrels of crude oil per day at the end of 2018 from 2.9 million at year-end 2017 and 2.1 million at the end of 2016. Rising oil production should continue in the coming years, which bodes well for cement demand in the region since cement is used in oil and gas drilling. GCC's plants in Odessa, TX, Tijeras, NM and Samalayuca, Chih. should benefit from increased cement demand in the region. The Permian basin's competitive oil production costs and the need to replenish oil rigs should lead to continued demand for cement from these plants. Competitive Industry: GCC derives about 62% of its EBITDA from the U.S. market, where it often competes with larger global and regional players with more financial resources. This competitive threat has been somewhat mitigated by GCC's wide distribution reach relative to its scale. The company continued to generate positive FCF through the most recent industry downturn and maintained relatively high profitability. Fierce price competition following periods of waning demand is a key risk for cement producers, particularly in more competitive markets such as the U.S. operations. Solid Operating Performance: Operating EBITDA strengthened to USD259 million on a LTM basis as of third quarter in 2018 from USD221 million a year ago, primarily due to cement demand growth of oil well cement, increasing exports to the U.S. and higher cement prices in the U.S. and Mexico. Limited capacity expansions and rising demand in the U.S. should support rising prices in the intermediate term and higher sales volumes, while price increases in Mexico are expected to moderate considering double digit price hikes since 2016. Although cement demand in Chihuahua should slow it will likely outperform Mexico's overall cement demand. Leverage expected to trend down: GCC's total debt was USD662 million as of third-quarter 2018 and gross leverage was 2.6x. This compares with gross leverage of 3.2x a year ago. GCC's net debt decreased by around USD35 million when compared to YE 2017 as the company invested in its South Dakota plant expansion, which was completed in fourth-quarter 2018. Absent committed capex, GCC should generate about USD100 million of FCF in 2019. Fitch expects GCC's gross leverage to decline to 2.3x in 2019 due to increased cement demand, higher prices in GCC's main U.S. markets. DERIVATION SUMMARY GCC derives about 65% of its EBITDA from the U.S. market, where it often competes with larger global and regional players with more financial resources. The remainder of the group's EBITDA is generated in Mexico's Chihuahua state where the company is the sole cement producer. This dual Mexico and U.S. presence is shared by Elementia (BB+/Stable) albeit in different markets within both countries. Elementia's product and geographic diversification as a building product and building materials hybrid with operations in North, Central and South America compare favorably although projected cement demand in GCC's markets is expected to be stronger. Fitch expects GCC to maintain slightly similar net leverage to Elementia at around 2.5x or below over the intermediate term. Cementos Pacasmayo (BBB-/Stable), a dominant cement producer in Northern Peru, has a stronger capital structure with its net leverage projected to gravitate below 2x. Pacasmayo's long-term growth prospects are supported by Peru's infrastructure spending which should benefit Peru's Northern region. While the U.S. market is expected to continue to recover, its more developed infrastructure network make it a mature market that, combined with competitive industry dynamics, is likely to be more volatile. GCC's capital structure is projected to be stronger than that maintained by investment-grade cement companies such as CRH (IDR BBB/Stable), Lafarge Holcim (IDR BBB/Stable) and Heidelberg (IDR BBB-/Stable) during the next two to three years. The lack of geographic diversification of GCC relative to these companies, its smaller scale, and competitive nature of U.S. result in a business profile more consistent with issuers rated in the BB category. Cemex (IDR BB-/Positive) and InterCement (IDR B/Stable) have lower ratings than GCC because their credit protection measures are projected to be materially worse than GCC's during the next two years. Both of these companies have strong businesses in several markets. Votorantim Cimentos (IDR BBB-/Stable), which is a much larger cement producer with a dominant position in Brazil and operations throughout the world, is not a direct peer, as its rating is tied to that of the Votorantim Group, which includes mining, pulp and financial services subsidiaries. KEY ASSUMPTIONS Fitch's Key Assumptions Within Its Rating Case for the Issuer -- Revenues measured in U.S. dollars grow close to mid-single in 2019-2020, reflecting higher volumes and robust pricing; -- EBITDA rises above USD280 million in 2019 and increases to around USD300 million in 2020; -- Debt amortizes according to schedule; -- Capex is financed mostly through internal cash flow generation and available cash; -- Dividends remain USD20 million per year in the intermediate term. RATING SENSITIVITIES Developments That May, Individually or Collectively, Lead to Positive Rating Action A rating upgrade in the near term is unlikely considering the company's business profile, targeted capital structure and current credit metrics. A larger scale coupled with a track record of maintaining gross leverage levels below 2.0x and a strong liquidity profile would be considered positive for credit quality. Developments That May, Individually or Collectively, Lead to Negative Rating Action Future developments that may, individually or collectively, lead to a negative rating action include: -- Weak operational results reflecting increased price competition, market share loss or a material slowdown in cement demand on GCC's key markets of Chihuahua, Western Texas, Colorado, South Dakota and New Mexico; -- Expectations of net debt/EBITDA leverage above 3.0x or FFO adjusted net leverage above 3.5x or above 3.5x on gross debt/EBITDA or FFO adjusted leverage above 4x; -- Sustained negative FCF generation. The net leverage sensitivities for a downgrade take into account the lower business risk associated with the company's now larger cement distribution network through its contiguous presence in the U.S. and a favorable outlook for oil well cement demand. They also reflect Fitch's expectations relative to peers. LIQUIDITY GCC's liquidity is sound. The company's cash position as of third- quarter 2018 was USD224 million, and Fitch expects its FCF to be around USD100 million in 2019and 2020. This compares with debt maturities of USD4 million for 2019 and USD25 million in 2020. FCF expectations are based on robust yearly CFFO of around USD200 million, capex of around USD80 million and dividends of less than 20 million. GCC completed its Rapid City, SD plant expansion during fourth-quarter 2018. This expansion will increase this plant's capacity by 440,000 tons to 1.2 million metric tons. GCC's total debt as of Sept. 30, 2018 was USD662 million and consists mostly of USD260 million of notes due 2024 and amortizing bank debt. GCC's net debt/EBITDA leverage was 1.7x as of third- quarter 2018, compared with 2.3x a year ago. The company maintains good access to bank lending and capital markets, as evidenced by debt refinancings during, 2015, 2016, 2017 and 2018. FULL LIST OF RATING ACTIONS Fitch has upgraded GCC's ratings as follows: -- Long-Term Foreign Currency IDR to 'BB+' from 'BB'; -- Long-Term Local Currency IDR to 'BB+' from 'BB'; -- USD260 million senior notes due 2024 to 'BB+' from 'BB'. The Rating Outlook is Stable. MEXICO: Needs Comprehensive Strategy to Fight Gasoline Theft ------------------------------------------------------------ EFE News reports that all-out fight against fuel theft being pushed by Mexican President Andres Manuel Lopez Obrador required a comprehensive strategy that also includes marketing the plan and using technology to detect stolen gasoline. According to experts consulted by EFE, shipping fuel in tanker trucks, an option that has been employed by the Lopez Obrador administration, is not the best long-term alternative. RASSINI AUTOMOTRIZ: Moody's Affirms Ba2 CFR, Alters Outlook to Neg ------------------------------------------------------------------ Moody's Investors Service changed Rassini Automotriz S.A. de C.V.'s (Rassini) rating outlook to negative from stable. At the same time, Moody's affirmed Rassini's Ba2 corporate family rating. RATINGS RATIONALE The change in the company's outlook to negative from stable reflects Rassini's substantial increase in its financial obligations and leverage as Rassini guarantees the new debt used to finance the repurchase of 55% of its shares, among other general corporate purposes. The affirmation of Rassini's Ba2 rating is supported by the company's leading market position in automotive leaf spring suspension components in North America and Brazil, its stable operating performance, adequate leverage and positive free cash flow over the last few years. Credit positives also include limited steel price exposure, fixed-price arrangements for key platforms and a largely US dollar-based revenue stream, which provides a natural hedge for US dollar costs and liabilities. Rassini also maintains a competitive cost position, which helps protect its strong market shares. The ratings are constrained by the highly competitive environment in the automotive supplier industry; Rassini's small scale when compared to industry peers; and its limited business diversification with product focus on three main components (brakes, leaf and coil spring suspensions). In December 2018, GGI INV SPV, S.A.P.I. de C.V, a special vehicle purpose, launched a tender offer to repurchase 55% of Rassini's shares traded in the Mexican stock exchange. The share repurchase was financed through a five-year $455 million secured term loan guaranteed by Rassini and certain of its operating subsidiaries. The term loan was used for the share repurchase, to refinance existing debt, and for other general corporate purposes. When considering the new $455 million term loan guaranteed by Rassini, its leverage increased substantially. Absent any incremental debt, we estimate Rassini's Moody's adj. debt/EBITDA to reach 3.3x by year end 2018; up from 0.8x over the twelve months ended September 30, 2018. Moody's estimates the company will be able to gradually reduce leverage over the following years reaching 2.8x by year-end 2019 and 2.2x by year-end 2020. Rassini's liquidity is adequate. Moody's estimates Rassini's cash on hand will be around $84 million at year-end 2018, covering 2.2x its short-term debt. Going forward, we anticipate that the company will continue to generate positive free cash flow (defined as cash from operations minus dividends minus capex) of an average of around $70 million per year in 2019-20 and maintain cash balances around $100-$110 million over the same period of time. In addition, Rassini's liquidity is further supported by a $30 million, fully available committed credit facility maturing in 2021. The company has a comfortable long-term debt maturity profile with $36.9 million due 2019, $73.4 million due 2020, $83.5 million due 2021, $83.5 million due 2022, and $176.5 million due 2023. The rating could be downgraded if there is a weakening in the company's financial policies or corporate governance practices resulting in a weaker credit profile or liquidity. Failure to improve its credit metrics showing a de-leveraging trend could also lead to a downgrade. Furthermore, the rating could be downgraded if the company's margins are affected by unfavorable dynamics such as a change in the pass-through steel price agreements with OEMs or a loss of market position originated by the changes in trade conditions from the implementation of the new USMCA. Also, a deterioration of its credit metrics, with its debt/EBITDA increasing over 3.5x and EBITA/interest expense declining below 3.0x or negative free cash flow generation, could lead to a downgrade. Rassini's ratings could be upgraded if the company maintains its positive free cash flow generation and strong credit metrics, with its adjusted gross debt/EBITDA below 1.5x and EBITA/interest expense over 5.0x. To be considered for an upgrade, the company would also need to achieve greater size and diversification, while maintaining its prudent financial policies and adequate liquidity. The principal methodology used in these ratings was Global Automotive Supplier Industry published in June 2016. Rassini Automotriz S.A. de C.V., headquartered in Mexico City, Mexico, is the leading manufacturer of leaf spring suspension components for light trucks and commercial vehicles in the NAFTA region and Brazil. The company is the main leaf spring suspension components supplier for GM, Ford and Chrysler light trucks in the NAFTA region and also for a number of heavy truck manufacturers in Brazil. The company also operates brake rotor and coil spring suspension divisions, which account for about 33% and 10% of its sales, respectively. Rassini Automotriz S.A. de C.V. is the main operating subsidiary of Rassini, S.A.B. de C.V., a privately controlled holding company based in Mexico City, which trades on the Mexican Stock Exchange. For the 12 months ended September 30, 2018, Rassini reported sales of $987 million. ====================== P U E R T O R I C O ====================== LUBY'S INC: Dimensional Fund Has 7.4% Stake as of Dec. 31 --------------------------------------------------------- In a Schedule 13G/A filed with the Securities and Exchange Commission, Dimensional Fund Advisors LP reported beneficial ownership of 2,201,011 shares of common stock of Luby's Inc., as of Dec. 31, 2018, which represents 7.42 percent of the shares outstanding. Dimensional Fund Advisors LP, an investment adviser registered under Section 203 of the Investment Advisors Act of 1940, furnishes investment advice to four investment companies registered under the Investment Company Act of 1940, and serves as investment manager or sub-adviser to certain other commingled funds, group trusts and separate accounts. A full-text copy of the regulatory filing is available for free at: https://is.gd/wmamoH About Luby's Houston, Texas- based Luby's, Inc. (NYSE: LUB) -- http://www.lubysinc.com/-- operates 140 restaurants nationally as of Dec. 19, 2018: 82 Luby's Cafeterias, 57 Fuddruckers, one Cheeseburger in Paradise restaurants. Luby's is the franchisor for 103 Fuddruckers franchise locations across the United States (including Puerto Rico), Canada, Mexico, the Dominican Republic, Panama, and Colombia. Luby's Culinary Contract Services provides food service management to 30 sites consisting of healthcare, corporate dining locations, and sports stadiums. Luby's reported a net loss of $33.56 million for the year ended Aug. 29, 2018, compared to a net loss of $23.26 million for the year ended Aug. 30, 2017. As of Dec. 19, 2018, Luby's had $208.89 million in total assets, $100.83 million in total liabilities, and $108.05 million in total shareholders' equity. Grant Thornton LLP, in Houston, Texas, issued a "going concern" qualification in its report on the consolidated financial statements for the year ended Aug. 29, 2018, noting that the Company sustained a net loss of approximately $33.6 million and net cash used in operating activities of approximately $8.5 million. The Company's term and revolving debt of approximately $39.5 million is due May 1, 2019. The Company was in default of certain debt covenants of its term and revolving credit agreements maturing on May 1, 2019. On Aug. 24, 2018, the lenders agreed to waive the existing events of default resulting from any breach of certain financial covenants or the limitation on maintenance capital expenditures, in each case that may have occurred during the period from and including May 9, 2018 until Aug. 24, 2018, and any related events of default. Additionally, the lenders agreed to waive the requirements that the Company comply with certain financial covenants until Dec. 31, 2018, at which time the Company will be in default without an additional waiver or alternative financing. These conditions, along with other matters, raise substantial doubt about the Company's ability to continue as a going concern. PUERTO RICO: Settlement Agreement with Sales Tax Entity Approved ------------------------------------------------------------------ District Judge Laura Taylor Swain entered an order approving the settlement between the Commonwealth of Puerto Rico and Puerto Rico Sales Tax Financing Corporation. The Commonwealth of Puerto Rico, by and through the Financial Oversight and Management Board for Puerto Rico, filed a motion pursuant to Bankruptcy Rule 9019 for an order approving the settlement between the Commonwealth of Puerto Rico and Puerto Rico Sales Tax Financing Corporation. The motion presents the Court with the question of whether to approve an agreement embodying a settlement ("Settlement Agreement") that divides rights to a significant flow of tax revenues between two debtors--the Commonwealth of Puerto Rico and COFINA--that have been involved in complex litigation concerning claims, on the one hand, that the Commonwealth previously made a valid transfer of the disputed tax revenue stream to COFINA to support the repayment of billions of dollars of bonds and, on the other hand, that the Commonwealth did not have the power to transfer rights to the revenue stream to COFINA or did not make the transfer in an effective way. Hundreds of millions of dollars of projected annual revenues over a period of decades are implicated in this dispute, which is commonly referred to as the Commonwealth-COFINA Dispute. The Commonwealth-COFINA Dispute itself arises in the extraordinary circumstances of a sovereign restructuring under a special statute, PROMESA, that was enacted in 2016 to enable Puerto Rico and other United States territories to seek bankruptcy type relief in federal court. Thus, unlike in a typical commercial restructuring involving private commercial entities, here one of the debtor parties is the Commonwealth of Puerto Rico--a public, government entity upon which millions of people depend for essential services and economic and physical infrastructure--and the other is a Commonwealth instrumentality that has issued bonds to finance governmental obligations. Here, the Court is satisfied that it should approve the Settlement Agreement because the Settlement Agreement represents a reasonable compromise of the Commonwealth-COFINA Dispute. The litigation concerning that underlying dispute has been complex and costly, and, absent approval of the Settlement Agreement, threatens to drag on for months or even years. Continuing that litigation would further deplete the resources available to the Commonwealth and its many stakeholders. Further litigation would also present a significant gamble for the Commonwealth: if litigated to its conclusion, an adverse judgment in the Commonwealth-COFINA dispute could deprive the Commonwealth of billions of dollars of sales tax revenue over the course of decades. The Settlement Agreement represents a well-reasoned choice to reject that risky gamble and to accept a compromise that is, admittedly, deeply disappointing to countless citizens of Puerto Rico and investors in Commonwealth bonds. The Court is hopeful that, by settling the Commonwealth-COFINA dispute and ensuring the Commonwealth's access to a meaningful share of sales tax revenues that were previously pledged to COFINA, the Settlement Agreement can pave the way for the responsible officials to marshal resources, reach future agreements, and design a plan of adjustment for the Commonwealth that meets PROMESA's goals of achieving fiscal responsibility and access to capital markets for the benefit of the Commonwealth, its people, and its many other stakeholders. A copy of the Court's Memorandum Opinion and Order dated Feb. 4, 2019 is available at: http://bankrupt.com/misc/prb17-03283-5045.pdf About Puerto Rico Puerto Rico is a self-governing commonwealth in association with the United States that's facing a massive bond debt of $70 billion, a 68% debt-to-GDP ratio and negative economic growth in nine of the last 10 years. The Commonwealth of Puerto Rico has sought bankruptcy protection, aiming to restructure its massive $74 billion debt-load and $49 billion in pension obligations. The debt restructuring petition was filed by Puerto Rico's financial oversight board in U.S. District Court in Puerto Rico (Case No. 17-01578) on May 3, 2017, and was made under Title III of 2016's U.S. Congressional rescue law known as the Puerto Rico Oversight, Management, and Economic Stability Act ('PROMESA'). The Financial Oversight and Management Board later commenced Title III cases for the Puerto Rico Sales Tax Financing Corporation (COFINA) on May 5, 2017, and the Employees Retirement System (ERS) and the Puerto Rico Highways and Transportation Authority (HTA) on May 21, 2017. On July 2, 2017, a Title III case was commenced for the Puerto Rico Electric Power Authority ("PREPA"). U.S. Chief Justice John Roberts has appointed U.S. District Judge Laura Taylor Swain to oversee the Title III cases. The Honorable Judith Dein, a United States Magistrate Judge for the District of Massachusetts, has been designated to preside over matters that may be referred to her by Judge Swain, including discovery disputes, and management of other pretrial proceedings. Joint administration of the Title III cases, under Lead Case No. 17-3283, was granted on June 29, 2017. The Oversight Board has hired as advisors, Proskauer Rose LLP and O'Neill & Borges LLC as legal counsel, McKinsey & Co. as strategic consultant, Citigroup Global Markets, as municipal investment banker, and Ernst & Young, as financial advisor. Martin J. Bienenstock, Esq., Scott K. Rutsky, Esq., and Philip M. Abelson, Esq., of Proskauer Rose; and Hermann D. Bauer, Esq., at O'Neill & Borges are on-board as attorneys. McKinsey & Co. is the Board's strategic consultant, Ernst & Young is the Board's financial advisor, and Citigroup Global Markets Inc. is the Board's municipal investment banker. Prime Clerk LLC is the claims and noticing agent. Prime Clerk maintains a case web site at https://cases.primeclerk.com/puertorico Epiq Bankruptcy Solutions LLC is the service agent for ERS, HTA, and PREPA. O'Melveny & Myers LLP is counsel to the Commonwealth's Puerto Rico Fiscal Agency and Financial Advisory Authority (AAFAF), the agency responsible for negotiations with bondholders. The Oversight Board named Professor Nancy B. Rapoport as fee examiner and to chair a committee to review professionals' fees. Bondholders' Attorneys Kramer Levin Naftalis & Frankel LLP and Toro, Colon, Mullet, Rivera & Sifre, P.S.C. and serve as counsel to the Mutual Fund Group, comprised of mutual funds managed by Oppenheimer Funds, Inc., and the First Puerto Rico Family of Funds, which collectively hold over $4.4 billion of GO Bonds, COFINA Bonds, and other bonds issued by Puerto Rico and other instrumentalities. White & Case LLP and Lopez Sanchez & Pirillo LLC represent the UBS Family of Funds and the Puerto Rico Family of Funds, which hold $613.3 million in COFINA bonds. Paul, Weiss, Rifkind, Wharton & Garrison LLP, Robbins, Russell, Englert, Orseck, Untereiner & Sauber LLP, and Jimenez, Graffam & Lausell are co-counsel to the ad hoc group of General Obligation Bondholders, comprised of Aurelius Capital Management, LP, Autonomy Capital (Jersey) LP, FCO Advisors LP, and Monarch Alternative Capital LP. Quinn Emanuel Urquhart & Sullivan, LLP and Reichard & Escalera are co-counsel to the ad hoc coalition of holders of senior bonds issued by COFINA, comprised of at least 30 institutional holders, including Canyon Capital Advisors LLC and Varde Investment Partners, L.P. Correa Acevedo & Abesada Law Offices, P.S.C., is counsel to Canyon Capital Advisors, LLC, River Canyon Fund Management, LLC, Davidson Kempner Capital Management LP, OZ Management, LP, and OZ Management II LP (the QTCB Noteholder Group). Committees The U.S. Trustee formed an official committee of retirees and an official committee of unsecured creditors of the Commonwealth. The Retiree Committee tapped Jenner & Block LLP and Bennazar, Garcia & Milian, C.S.P., as its attorneys. The Creditors Committee tapped Paul Hastings LLP and O'Neill & Gilmore LLC as counsel. ============= U R U G U A Y ============= URUGUAY: Welcomed Fewer Tourists but Spending Rose 15% in January ----------------------------------------------------------------- EFE News reports that Uruguayan Tourism Minister Liliam Kechichian disclosed that during January, the country welcomed 432,000 visitors, 29 percent fewer than during the same month in 2018, but each spent an average of $820, 15 percent more than during the previous period. "Both the average spending and the spending per person ($117 per person per day) grew -- by 15 percent in terms of average spending and by 23 percent in average spending per person per day -- which tells us that fewer visitors came in . . . January than in 2018, but they spent more," she said at a press conference, according to EFE News. ================= V E N E Z U E L A ================= PETROLEOS DE VENEZUELA: Sued by Owens-Illinois Over $500MM Award ---------------------------------------------------------------- Bob Van Voris at Bloomberg News reports that Owens-Illinois Inc. sued four companies owned by Venezuela, including Petroleos de Venezuela SA and Citgo Petroleum Corp., to collect a $500 million arbitration award over the 2010 nationalization of two plants located in the South American nation. The suit, filed in federal court in Delaware, claims the companies are "alter egos, and mere instrumentalities of Venezuela itself," and should be forced to pay the award, according to Bloomberg News. Owens-Illinois, a U.S. manufacturer of glass containers, is among a group of companies that have made claims against Venezuela over expropriations of property under President Hugo Chavez, who died in 2013, Bloomberg News recalls. Crystallex International Corp. and Venezuela agreed to settle a $1.2 billion dispute over the 2011 nationalization of a gold deposit in the South American nation and ConocoPhillips said it'll get $2 billion in a separate settlement with PDVSA, Bloomberg News notes. Perrysburg, Ohio-based Owens-Illinois is trying to collect on a 2015 award by a three-member panel of the International Centre for Settlement of Investment Disputes, which said the company was entitled to $372 million plus interest, Bloomberg News discloses. The suit was filed by a Dutch subsidiary, OI European Group BV, Bloomberg News says. The tribunal found that Venezuela violated its obligations under a 1991 investment treaty with the Netherlands, Bloomberg News says. PDVSA is a Venezuela corporation. PDVH, Citgo Holding and Citgo Petroleum are all registered in Delaware with headquarters in Houston. Venezuela in the midst of a political crisis that threatens the leadership of President Nicolas Maduro, Bloomberg News notes. The U.S. and dozens of countries have backed National Assembly leader Juan Guaido as interim president, with the U.S. imposing economic sanctions in hopes of pressuring Maduro to step down, Bloomberg News relays. The case is OI European Group BV v. Bolivarian Republic of Venezuela, 19-cv-00290, U.S. District Court, District of Delaware (Wilmington). As reported in the Troubled Company Reporter-Latin America on Aug. 24, 2018, S&P Global Ratings affirmed its 'SD' global scale issuer credit rating and 'D' issue-level ratings on Petroleos de Venezuela S.A. (PDVSA). *********** 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 2019. 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 * * *