/raid1/www/Hosts/bankrupt/TCRLA

/raid1/www/Hosts/bankrupt/TCRLA_Public/200211.mbx T R O U B L E D C O M P A N Y R E P O R T E R L A T I N A M E R I C A Tuesday, February 11, 2020, Vol. 21, No. 30 Headlines B R A Z I L BRAZIL: Bankruptcy Filings Drop 29.6 Percent in January BRAZIL: Chinese Orders of Meat Stall After Coronavirus Outbreak ELDORADO BRASIL: Moody's Lowers CFR to B1, Outlook Stable J A M A I C A JAMAICA: Golding Seeks Legislative Changes to Fix Forex Market M E X I C O ALPHA HOLDING: S&P Keeps 'B+' Unsec. Debt Rating on Watch Positive SIAPA: Moody's Withdraws Ba1 Issuer Ratings P U E R T O R I C O ASCENA RETAIL: BlackRock Has 6.4% Stake as of Dec. 31 MESH SUTURE: Taps Barroso-Vicens of RSM Puerto Rico as Accountant T R I N I D A D A N D T O B A G O PETROLEUM CO: Government to Safeguard Firm's Pensions - - - - - =========== B R A Z I L =========== BRAZIL: Bankruptcy Filings Drop 29.6 Percent in January ------------------------------------------------------- Richard Mann at Rio Times Online reports that bankruptcy filings in Brazil dropped 29.6 percent in January this year compared to December and dropped 2.7 percent in the 12-month period ended in January, according to Boa Vista. Court-ordered bankruptcies recorded a 13.4 percent decline. Petitions for judicial reorganization and court-ordered recoveries dropped 8.2 and 6.4 percent, respectively, in the 12-month period ended in January, according to Rio Times Online. As reported in the Troubled Company Reporter-Latin America, Fitch Ratings in November 2019 affirmed Brazil's Long-Term Foreign Currency Issuer Default Rating at 'BB-'. The Rating Outlook is Stable. BRAZIL: Chinese Orders of Meat Stall After Coronavirus Outbreak --------------------------------------------------------------- Dorah Feliciano Rio Times Online reports that Chinese importers had been renegotiating beef contracts with South American exporters. But those talks came to a halt on January 25th and have not resumed, according to reliable anonymous sources, as talks are private, Rio Times Online relates. As reported in the Troubled Company Reporter-Latin America, Fitch Ratings in November 2019 affirmed Brazil's Long-Term Foreign Currency Issuer Default Rating at 'BB-'. The Rating Outlook is Stable. ELDORADO BRASIL: Moody's Lowers CFR to B1, Outlook Stable --------------------------------------------------------- Moody's Investors Service downgraded to B1 from Ba3 the corporate family rating of Eldorado Brasil Celulose S.A. The outlook is stable. Rating actions: Issuer: Eldorado Brasil Celulose S.A. Corporate Family Rating: downgraded to B1 from Ba3 The outlook is stable. RATINGS RATIONALE The rating's downgrade to B1 reflects heightened liquidity risk given the concentration of debt maturities in the next 12 to 24 months. As of September 2019, Eldorado had about BRL5.8 billion ($1.4 billion) due until the end of 2022 (including the prepayment of the BRL 1.2 billion debentures in 4Q19). Part of this is represented by export-related lines that are typically renewed at maturity, but also by its $350 million senior unsecured notes due in June 2021. In January 2019, Eldorado announced a bond transaction, which was not completed due to disagreements between the shareholders on certain terms of the transaction. The B1 rating continues to incorporate the company's steady credit metrics and strong operational performance, with average EBITDA margins of around 60% since 2015 (45-50% range in 2H2019). Eldorado has the lowest-cost operation in the global pulp industry as a consequence of its privileged location, forest availability and integrated process into a state-of the-art plant. The rating is constrained by Eldorado's susceptibility to event risk driven by its single-plant nature and limited operational diversity. Moody's believes that Eldorado's ability to control input costs through its vertically integrated production process partially compensates for the risk of operating primarily in a single commodity product and in a single location. Eldorado's unbalanced capital structure with a high concentration of debt in the short-term remains a major constraint. The dispute between the company's shareholders (J&F Investimentos S.A. and CA Investment S.A./Paper Excellence) remains a constraint for the rating as well, as it may bring delays in strategic decisions for Eldorado until the arbitration process is concluded. Eldorado posted weaker cash flow from operations in 2019, which Moody's estimates will only gradually improve through 2020 due to significantly lower pulp prices compared to 2017-18 levels. Still, it expects Eldorado to amortize debt related to the Tres Lagoas mill construction at maturity in 2020 (about BRL 680 million) , while the company will continue to refinance its bank debt. Eldorado's capex will remain close to sustaining levels of around BRL 500-600 million per year in the next two to three years, as the only growth project underway is a 50 MWh thermal power plant Onça Pintada, with a capital spending requirement of BRL 350 million distributed within 2018-2020. The stable outlook is based on its expectation that Eldorado's low-cost process will allow the company to continue to record steady credit metrics in the next 12-18 months, despite lower hardwood pulp prices and weaker cash flow from operations than that in 2017-18. The stable outlook also reflects its expectation that Eldorado will use excess cash flow to reduce its debt and continue with liability management to address shorter-term maturities, particularly the senior unsecured notes due in June 2021. An upward rating movement would require Eldorado to materially improve its liquidity profile and capital structure by reducing short term debt and extending maturities, while maintaining its competitive cost position and further reducing leverage. In addition, an improvement in its interest coverage, with adjusted EBITDA/interest expense above 4x and positive free cash flows on a sustained basis are required for a positive rating action, together with cash flows diversification by source (different segments) and/or geography (asset location). A resolution of the dispute between the company's shareholders is also a necessary condition for an upgrade. The rating could suffer negative pressure if Eldorado is not able to improve its liquidity profile and debt maturities remain concentrated in 2020-21, or debt levels increase, with leverage, measured as total adjusted debt/EBITDA, trending towards 4.5x or above, and interest coverage, measured as adjusted EBITDA/interest expense, remaining below 4x for a prolonged period. Failure to address 2020-2021 maturities well in advance, in particular the 2021 senior unsecured notes, could lead to a further downgrade. A significant deterioration in the company's operating performance, with negative free cash flow generation would exert negative pressure on the rating or outlook. The principal methodology used in this rating was Paper and Forest Products Industry published in October 2018. Headquartered in Sao Paulo, Brasil and with operations in Tres Lagoas, Mato Grosso do Sul, Eldorado Brasil is a key player in the global pulp markets, with an installed capacity of 1.5 million tons of hardwood pulp (1.7 million tons nominal capacity) and very competitive cash cost, supported by an extensive forest base of more than 230,000 hectares in the state of Mato Grosso do Sul. Eldorado is owned by J&F Investimentos S.A. (50.59%) and CA Investment (Brazil) SA, subsidiary of Paper Excellence. Eldorado started operations in December 2012 and reported revenues of BRL 4.3 billion ($1.1 billion) in the twelve months ended September 2019. ============= J A M A I C A ============= JAMAICA: Golding Seeks Legislative Changes to Fix Forex Market -------------------------------------------------------------- RJR News reports that Opposition Spokesman on Finance Mark Golding has called for the Jamaican government and central bank to make regulatory and legislative changes to fix what he describes as a dysfunctional foreign exchange market. Speaking in the House of Representatives, Mr. Golding took issue with the operations of some financial institutions, arguing that "the absence of laws to prohibit authorised dealers from front-running their clients, to benefit from enhanced FX trading profits in a volatile market and enabling them to allocate their foreign exchange purchases in whatever way suits their financial interest. . . . permits the abuse of their privileged status as authorised dealers," according to RJR News. In response, Finance Minister Dr. Nigel Clarke indicated that a new foreign exchange trading platform will address some of the issues by introducing "more transparency and openness and will foster greater levels of competitiveness in the foreign exchange market which will improve experiences," the report notes. About Jamaica As reported in the Troubled Company Reporter-Latin America, S&P Global Ratings in September 2019 raised its long-term foreign and local currency sovereign credit ratings on Jamaica to 'B+' from 'B'. The outlook is stable. At the same time, S&P Global Ratings affirmed its 'B' short-term foreign and local currency sovereign credit ratings on the country. S&P Global Ratings also raised its transfer and convertibility assessment to 'BB-' from 'B+'. RJR News reported in June 2019 that Steven Gooden, Chief Executive Officer of NCB Capital Markets, warned that the increasing liquidity in the Jamaican economy might result in heightened risk to the financial market if left unchecked. This, he said, is against the background of the local administration seeking to reduce the debt to GDP to 60% by the end of the 2025/26 fiscal year, which will see Government repaying more than J$600 billion which will get back into the system, according to RJR News. =========== M E X I C O =========== ALPHA HOLDING: S&P Keeps 'B+' Unsec. Debt Rating on Watch Positive ------------------------------------------------------------------ S&P Global Ratings kept its 'B+' issue-level rating on Alpha Holding S.A. de C.V.'s senior unsecured notes after it increased the total amount of the issuance to $400 million from $350 million. S&P doesn't consider the debt add-on weakens its assessment of the company's funding because Alpha Holding will use the proceeds of the issuance mainly to refinance existing debt. The issuance's hedge structure will remain the same: a cross-currency swap on the coupon payments and a participating swap for the principal. S&P said, "The 'B+' rating on the notes is at the same level as Alpha Holding's group credit profile because the notes will be unconditionally and irrevocably guaranteed by all operating subsidiaries and, consequently, the debt rating represents our view of the consolidated group's creditworthiness. Moreover, the rating indicates that the notes will rank equally in right of payment with all of the company's existing and future senior unsecured notes. We expect Alpha Holding's priority debt (secured debt) to represent slightly less than 5% of total adjusted assets for the next 12 months, with unencumbered assets covering more than 1x of the company's rated unsecured debt (including the proposed debt issuance). "Our 'B+' issue-level rating is on CreditWatch with positive implications. The latter reflects a possible upgrade of Alpha if the capital injection from SoftBank Latin America Fund improves our forecasted risk-adjusted capital (RAC) ratio, while we analyze the company's new business strategy and risk appetite. We expect to resolve the CreditWatch placement once regulatory approvals are finalized, which we expect to occur during the next six months. "Our consolidated analysis reflects Alpha Holding's stable and growing business operations that mostly involve payroll lending to public-sector employees and pensioners. It also incorporates our expectations of business stability, reflected in the likely rising operating revenue and business volumes, and widening business diversification. In addition, the rating incorporates our forecast RAC ratio of about 0.9% by the end of 2020, given that internal capital generation will start to compensate for the current amount of intangibles in the company's adjusted capital base." Finally, the rating accounts for Alpha Holding's stronger asset quality indicators than those of its regional peers. Ratings List Creditwatch update Alpha Holding S.A. de C.V. Senior Unsecured B+/Watch Pos SIAPA: Moody's Withdraws Ba1 Issuer Ratings ------------------------------------------- Moody's de Mexico S.A. de C.V has withdrawn the Ba1 (Global Scale, local currency) and A1.mx (Mexico's National Scale) issuer ratings of Mexico's SIAPA (Sistema Intermunicipal de los Servicios de Agua Potable y Alcantarillado or the Intermunicipal System of Drinking Water and Sewerage Services). Moody's also withdrawn the stable outlook. Moody's decided to withdraw the ratings for its own business reasons. ===================== P U E R T O R I C O ===================== ASCENA RETAIL: BlackRock Has 6.4% Stake as of Dec. 31 ----------------------------------------------------- BlackRock, Inc. disclosed in a Schedule 13G filed with the Securities and Exchange Commission that as of Dec. 31, 2019, it beneficially owns 640,006 shares of common stock of Ascena Retail Group Inc., which represents 6.4 percent of the shares outstanding. A full-text copy of the regulatory filing is available for free at the SEC's website at https://is.gd/FGMeKS About Ascena Retail Ascena Retail Group, Inc. (Nasdaq: ASNA) -- http://www.ascenaretail.com/-- is a national specialty retailer offering apparel, shoes, and accessories for women under the Premium Fashion (Ann Taylor, LOFT, and Lou & Grey), Plus Fashion (Lane Bryant, Catherines and Cacique), and Value Fashion (Dressbarn) segments, and for tween girls under the Kids Fashion segment (Justice). Ascena, through its retail brands, operates ecommerce websites and approximately 2,800 stores throughout the United States, Canada, and Puerto Rico. Ascena Retail reported a net loss of $661.4 million for the fiscal year ended Aug. 3, 2019, a net loss of $39.7 million for the year ended Aug. 4, 2018, and a net loss of $1.06 billion for the year ended July 29, 2017. As of Nov. 2, 2019, the Company had $3.49 billion in total assets, $3.32 billion in total liabilities, and $173 million in total equity. * * * As reported by the TCR on Nov. 26, 2019, S&P Global Ratings lowered its issuer credit rating on Mahwah, N.J.-based women's specialty apparel retailer Ascena Retail Group Inc. to 'CCC' from 'CCC+' to reflect the rating agency's belief that it is increasingly likely the company will pursue a debt restructuring over the next 12 months. In October 2019, Moody's Investors Service downgraded Ascena Retail Group, Inc.'s corporate family rating to Caa2 from B3, probability of default rating to Caa2-PD from B3-PD and senior secured term loan rating to Caa2 from B3. The downgrades reflect Moody's view that Ascena's capital structure is likely unsustainable as a result of its weak operating performance, high leverage, and negative free cash flow, creating an elevated risk of a debt restructuring including a material debt repurchase at a significant discount. MESH SUTURE: Taps Barroso-Vicens of RSM Puerto Rico as Accountant ----------------------------------------------------------------- Mesh Suture, Inc., seeks permission from the Bankruptcy Court to employ Doris Barroso-Vicens, CPA, CVA, CFF, CGMA, CIRA, from the firm RSM Puerto Rico as its accountant. Mrs. Barroso-Vicens will assist the Debtor with respect to: (a) preparation or review of monthly operating reports required by the Bankruptcy court, (b) reconciliation of proofs of claim, (c) preparation or review of the Debtor's projections, (d) analysis of profitability of the Debtor's operations, (e) assistance in the development or review of plan of reorganization or disclosure statements, (f) consultation on strategic alternatives and developments of business plans, (g) any other consulting and expert witness services relating to various bankruptcy matters such as insolvency, feasibility forensic accounting, etc., as necessary. Compensation for professional services to be rendered is agreed as follows: * in the case of a partner, a rate from $200 to $300 per hour (Mrs. Doris Barroso-Vicens' current hourly rate of $245), plus any costs and expenses; * in the case of managers, a rate from $145 to $184 per hour, plus any costs and expenses; * in the case of seniors, a rate from $75 to $90 per hour, plus any costs and expenses; * in the case of staff, a rate from $65 to $75 per hour, plus any costs and expenses. The hourly rates increase at approximately 1% every June 1. The Debtor assures the Court that the accountant is a disinterested person and her employment is in the best interest of the estate. The firm can be reached through: Doris Barroso-Vicens, CPA, CVA, CFF, CGMA, CIRA RSM Puerto Rico, Certified Public Accountants and Consultants Reparto Loyola, 1000 San Roberto San Juan, PR 00926 Postal Address: P.O. Box 10528 San Juan PR 00922-0528 About Mesh Suture, Inc. Mesh Suture, Inc., a manufacturer of medical equipment and supplies sought protection under Chapter 11 of the Bankruptcy Code (Bankr. D. P.R. Case No. 20-00031) on Jan. 9, 2020. At the time of the filing, the Debtor disclosed $9,133,930 in assets and $1,486,431 in liabilities. Carmen D. Conde Torres, Esq., at C. Conde & Assoc., is the Debtor's legal counsel. ===================================== T R I N I D A D A N D T O B A G O ===================================== PETROLEUM CO: Government to Safeguard Firm's Pensions ----------------------------------------------------- Ria Taitt at Trinidad Express reports that Trinidad and Tobago will take whatever action is necessary to safeguard the pensions of Petroleum Co. of Trinidad & Tobago (Petrotrin) workers. This was the assurance from Finance Minister Colm Imbert as he responded to a question from United National Congress (UNC) Senator Wade Mark in the Senate, according to Trinidad Express. About Petrotrin State-owned Petroleum Co. of Trinidad & Tobago (Petrotrin) closed it oil refinery in November 2018. Prior to closure, Petrotrin underwent a corporate reorganization that started in the last quarter of 2018. The T&T government insisted that the reorganization was necessary to improve the company's efficiency. As a result of the reorganization, Petrorin's refining business was shut down and new entities were created: three operating subsidiaries (Heritage Petroleum Company Limited, Paria Fuel Trading Company and Guaracara Refining Company Limited), and the new holding company, TPH, to which the international bonds were transferred from Petrotrin. ********* 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 2020. 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 * * *