/raid1/www/Hosts/bankrupt/TCRLA

/raid1/www/Hosts/bankrupt/TCRLA_Public/200213.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 Thursday, February 13, 2020, Vol. 21, No. 32 Headlines A N T I G U A A N D B A R B U D A ANTIGUA BIDCO: Fitch Assigns B+ Rating on EUR260MM Sec. Debt A R G E N T I N A VICENTIN: Turns to Courts for Debt Restructuring B R A Z I L AVIANCA HOLDINGS: Egan-Jones Lowers Sr. Unsecured Ratings to CCC BRAZIL: Commercial Dollar Rises, Reaches R$4.32 for First Time BRAZIL: Ranks Second in Interest Rate Cuts Among 15 Countries D O M I N I C A N R E P U B L I C DOMINICAN REPUBLIC: Prices Climb 0.33% in January, Paced by Food M E X I C O COACALCO MUNICIPALITY: Moody's Withdraws B3 Issuer Rating G.D.S. EXPRESS: May Obtain Financing, Access Cash Until Feb. 21 OPERADORA DE SERVICIOS MEGA: S&P Affirms BB Rating on Unsec. Notes P U E R T O R I C O PUERTO RICO: GO and PBA Bondholders Accept 30% Haircuts - - - - - ===================================== A N T I G U A A N D B A R B U D A ===================================== ANTIGUA BIDCO: Fitch Assigns B+ Rating on EUR260MM Sec. Debt ------------------------------------------------------------ Fitch Ratings assigned Antigua Bidco Limited upcoming issue of EUR260 million senior secured term loan an expected instrument rating of 'B+'/'RR4'. Fitch has also affirmed Antigua Bidco Limited's Long-Term Issuer Default Rating at 'B+' with Stable Outlook. The debt issuing company is the top entity in a restricted group that indirectly owns the UK-based pharmaceutical company Atnahs Pharma UK Ltd (Atnahs or the company). The debt proceeds will be used to fund recently announced acquisitions of drug IP rights. The assignment of a final rating is subject to the debt issue conforming materially to the terms as presented to Fitch for the expected rating. The 'B+' IDR continues to reflect Atnahs' strong operating profitability, high free cash flow (FCF) and reasonable leverage levels. The credit profile remains constrained by lack of scale and concentration risks assessed in the broader sector context. Fitch views the acquisitions as rating-neutral as additional debt is supported by proportionate equity co-funding that prevents leverage from increasing. In addition, the new products will contribute to improved scale and diversification as well as support the company's high operating profitability with acquisition economics aligned with Atnahs' previously communicated M&A strategy. The Stable Outlook reflects its view that Atnahs will be able to manage structurally declining assets and sustain its business model through organic and acquisitive product portfolio development translating into continuously strong cash flows and adequate credit metrics. KEY RATING DRIVERS Solid Operating Profitability: Fitch considers Athnas' profitability as strong, in comparison with other small to mid-cap sector peers, and in the context of the global pharmaceutical market. Atnahs' business model focuses on active brand management of off-patent drugs with asset-light scalable operations and benefits from sustainably high EBITDA margins of around 50%. Operating margin resilience is further reinforced by the company's predominantly flexible cost base. Fitch projects margins will remain high in the medium term, while legacy products with inexorable value attrition will be compensated by earnings contribution from drug extensions, in-house product developments and new product additions, as evidenced by the now proposed debt-funded acquisition. Rising Execution Risks: Fitch views execution risks as a result of the proposed product acquisitions as rising, but still manageable, given an asset-light business model and the company's performance having been in line with its expectations since Fitch assigned the rating. The addition of six new products will increase Atnahs' diversification and scale in selected therapeutic areas such as women's health and cardiovascular treatments. The acquisitions will nearly double sales from GBP118 million in FY18 to GBP230 million in FY20E and EBITDA from GBP60 million to around GBP120 million. This pace of business expansion puts a greater emphasis on scaling of critical operational functions including scientific, pharmacovigilance and control, as well as asset integration and active portfolio management. Consequently for FY21 (March year-end) Fitch expects a period of asset consolidation with a more balanced approach to integrating recently acquired products and future external growth. Strong FCF: The combination of high and stable operating margins with low maintenance capex translates into strong FCF, estimated by Fitch at GBP40 million-GBP80 million a year, and FCF margins of around 25%. Fitch estimates that most FCF will be reinvested into product additions and portfolio expansion as shareholders pursue their asset development strategy, rather than deploying funds towards debt prepayment. However, Fitch views positively Atnahs' strong internal liquidity, allowing the company to self-fund much of its growth as well as maintain solid financial flexibility for the rating. Constrained by Scale and Concentration: Despite the announced product acquisitions, Atnahs' rating remains confined to the 'B' rating category until the business has materially gained scale (for example with sales in excess of GBP1 billion). Consequently Fitch does not expect an upgrade over the rating horizon to financial year to March 2023. Fitch also views the company's narrow product portfolio as a rating constraint, although Fitch expects this to ease, particularly if the company undertakes a series of larger acquisitions. While Atnahs' diversified contract manufacturers- and-distributors networks address individual product concentration issues, Fitch nevertheless regards smaller compact portfolios as being less capable of coping with market challenges. Product Additions to Sustain Operations: Fitch expects FY21 to be a year of consolidating the announced product acquisitions, but the timing and magnitude of future product additions are difficult to predict. These will be necessarily to sustain growth in the company given the structurally eroding top line performance of its legacy drugs. In its rating case, Fitch therefore estimates that Atnahs' will reinvest all internally generated cash over the rating horizon together with using some financial flexibility available under its revolving credit facility (RCF) in new drug acquisitions, increasing operating cash flows, as well as maintaining an adequate financial risk profile and comfortable cash reserves. Leverage Aligned with IDR: The rating is supported by its expectation of financial leverage not exceeding 5.5x on a funds from operations (FFO)-adjusted gross basis (5.0x net of readily available cash). Fitch does not view the recently announced acquisitions as having an impact on the rating, given the EUR138 million equity contribution for its part-funding and the discipline in terms of acquisition multiples. Fitch views this leverage profile as one of Atnahs' key rating drivers. Failure to maintain this financial risk profile will likely put the ratings under pressure. Disciplined Approach to M&A: Fitch expects the company will remain committed to its established acquisition policies to ensure a sustainably credit-accretive impact of new product additions. Rigorous deal-screening and diligence process, a disciplined approach to acquisition economics, particularly in light of rising asset prices, and product integration into Atnahs' manufacturing and distribution networks, are essential for the 'B+' IDR. Supportive Market Fundamentals: Manufacturers of generic drugs, including businesses managing off-patent pharmaceutical products such as Atnahs, benefit from positive long-term market fundamentals as national governments and regulators increase use of more affordable generic products to contain rising costs of the national healthcare systems. Fitch also notes the ample supply of off-patent drugs to the market as innovative pharma companies are looking to streamline their product portfolios to concentrate on core therapies and implement their capital-allocation strategies. Fitch regards niche pharmaceutical companies such as Atnahs as well-positioned to capitalise on these positive macro-economic and sector trends. DERIVATION SUMMARY Fitch considers Atnahs' 'B+' rating against other asset-light scalable niche pharmaceutical companies such as Cheplapharm Arzneimittel GmbH (B+/Stable) and IWH UK Finco Ltd (Theramex, B/Stable). Lack of business scale and a concentrated brand portfolio, albeit benefiting from growing product and wide geographic diversification within each brand, will remain among the main factors constraining the IDR to the 'B' rating category. Atnahs and Cheplapharm have nearly equally high and stable operating and cash flow margins, pointing to similarities in their business models and approach to product selection and brand management. They are also closely positioned in their financial risk profiles at 5.0x-5.5x on a FFO-adjusted gross basis, translating into 'B+' IDRs. In contrast, Atnahs has stronger operating profitability than Theramex, whose business model is more marketing-intensive. Fitch also notes Atnahs' more stable FCF along with lower FFO- adjusted gross leverage at 5.0x-5.5x against Theramex's above 5.5x, warranting the one-notch rating difference between the two companies. KEY ASSUMPTIONS Fitch's Key Assumptions within its Rating Case for the Issuer: - Sales of legacy and new products to decline by 5%-6% per year up to fiscal year ending March 2023; - The current transaction is assumed to close in March 2020 contributing one month of sales and earnings to Atnahs' performance in the current FY ending March 2020; - Sales of in-house developed products to increase to GBP20 million by FY23 from around GBP7 million in FY18/19, supported by product extensions and launches in new markets; - Based on strong pipeline of off-patent drugs coming to the market and opportunistic buy-and-build business strategy pursued by Atnahs, Fitch assumes M&A above the company's projections at GBP35 million in FY21 and a further GBP100 million a year in FY22 and FY23 at average enterprise value (EV)/sales acquisition multiple of 3.5x and 5% annual sales decline. M&A to be financed entirely from internal cash flows and committed RCF of EUR75 million; - EBITDA margin remaining at 50% up to FY23; - Trade working capital outflows estimated at average GBP10 million - GBP40 million a year up to FY23, reflecting growing stock levels with addition of new products and higher trading volumes; and - Maintenance capex estimated at 2%-5% of sales per year, which includes support for product technical transfers and earn-out compensation agreed with drug IP sellers; - No dividends. Recovery Assumptions: Atnahs' recovery analysis is based on the going-concern approach. This reflects the company's asset-light business model supporting higher realisable values in a distressed scenario compared with balance sheet liquidation. Fitch estimates that potential distress could arise primarily from top line breakdowns following volume losses and price pressure given Atnahs' exposure to generic pharmaceutical risks, possibly also in combination with inability to manage the cost base of the rapidly grown business. For the going-concern analysis EV calculation, Fitch has applied a 35% discount to Fitch-estimated EBITDA for March 2020 of GBP108 million adjusted for the full year contribution from the recent acquisitions. The resulting post-restructuring EBITDA of GBP70 million would allow the company to generate GBP20 million-GBP40 million of FCF, which in its view would be required to sustain the product portfolio to offset sales declines and therefore maintain the company as a going concern. Fitch has then applied a 5.0x distressed EV/EBITDA multiple in line with Atnahs' estimated drug acquisition threshold, which would appropriately reflect its minimum valuation multiple before considering value added through brand management. After deducting 10% for administrative claims, its principal waterfall analysis generated a ranked recovery in the 'RR4' band for the all-senior secured capital structure, comprising the new senior secured debt of EUR260 million together with the existing EUR354 million term loan B (TLB); redenominated from GBP325 million) and the EUR75 million RCF assumed to be fully drawn prior to distress, and ranking equally among themselves. This indicates a 'B+(EXP)' instrument rating for the new debt tranche. The existing senior secured debt remains at 'RR4' with expected recoveries of 48% until completion of the transaction. After closing Fitch expects to assign a final rating to the new senior secured debt of 'B+' with an output percentage based on current metrics and assumptions at 50%. RATING SENSITIVITIES Developments That May, Individually or Collectively, Lead to Positive Rating Action - An upgrade to the 'BB' rating category is not envisaged in the medium term until Atnahs reaches a more sector-critical size with revenue in excess of GBP1 billion combined with conservative FFO adjusted gross leverage at around 4.0x and FCF remaining strong. Developments That May, Individually or Collectively, Lead to Negative Rating Action - Unsuccessful management of individual pharmaceutical IP rights leading to material permanent loss of revenue and EBITDA, with EBITDA margins declining below 45%; - Continuously weakening FCF; - FFO-adjusted gross leverage sustainably above 5.5x, or net leverage above 5.0x, signaling a more aggressive financial policy, departure from current acquisition principles or operational challenges. LIQUIDITY AND DEBT STRUCTURE Satisfactory Liquidity: Given Atnahs' strong pre-acquisition FCF estimated at GBP30 million-GBP70 million a year, Fitch projects cash reserves to increase steadily, which could accommodate cumulative M&A of over GBP200 million, while still leaving satisfactory liquidity to support Atnahs' operations. For the liquidity analysis Fitch has excluded restricted cash of GBP5 million from FY20 as minimum operating cash requirement to be maintained in the business. Fitch regards refinancing risk as limited given long-dated debt maturities with the TLB not due before 2026 and adequate for the sector indebtedness levels over the medium term. ESG CONSIDERATIONS Unless otherwise disclosed in this section, the highest level of ESG credit relevance is a score of 3. This means ESG issues are credit-neutral or have only a minimal credit impact on the entity, either due to their nature or to the way in which they are being managed by the entity. ================= A R G E N T I N A ================= VICENTIN: Turns to Courts for Debt Restructuring ------------------------------------------------ Globalinsolvency, citing Reuters, reports that Argentina's top exporter of processed soy, Vicentin, has asked a judge to begin negotiations for debt restructuring, the company said, as the firm struggles to cope with a widening economic crisis in the South American nation. The near 90-year-old firm, which defaulted on payments to suppliers late last year, was forced to sell part of its stake in a joint venture with Glencore in December, as its plans for expansion collided with Argentine financial woes, according to Globalinsolvency. The company said in a statement it would seek a "restructuring of its debt in conditions and terms that are mutually beneficial to both creditors and the company," the report notes. The soy crusher went on a credit-fueled expansion last year before political uncertainties sparked a market crash and led international banks to pull back from the South American grains powerhouse, further pressuring the company, the report adds. =========== B R A Z I L =========== AVIANCA HOLDINGS: Egan-Jones Lowers Sr. Unsecured Ratings to CCC ---------------------------------------------------------------- Egan-Jones Ratings Company, on February 7, 2020, downgraded the foreign currency and local currency senior unsecured ratings on debt issued by Avianca Holdings SA to CCC from B-. Avianca Holdings is a Latin American airline holding company formed in February 2010 by the merger of two airlines, Avianca from Colombia and TACA Airlines from El Salvador. The company is a subsidiary of Synergy Group, a South American conglomerate based in Rio de Janeiro, Brazil. BRAZIL: Commercial Dollar Rises, Reaches R$4.32 for First Time -------------------------------------------------------------- Richard Mann at Rio Times Online reports that the commercial dollar opened higher on Friday, February 7, and reached an unprecedented high of R$4.32. Around 12:05 PM, the currency rose 0.8 percent to a record R$4.322. The tourism dollar stood at R$4.49, up 0.9 percent. The trend reflects the combination of the interest rate cut in Brazil and the improvement of the US economy, 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: Ranks Second in Interest Rate Cuts Among 15 Countries ------------------------------------------------------------- Richard Mann at Rio Times Online reports that after the Monetary Policy Committee's (COPOM) decision to lower the SELIC rate by 0.25 percentage points, pushing it to the historic 4.25 percent floor, Brazil became the second to have cut basic interest rates the most in one year, out of a list of 15 countries. The country lags behind Turkey, which reduced its basic interest rate by 12.75 percentage points in the same period, according to Rio Times Online. The survey was conducted by the founder and CEO of Capital Advisors, Charlie Bilello, the report notes. 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. =================================== D O M I N I C A N R E P U B L I C =================================== DOMINICAN REPUBLIC: Prices Climb 0.33% in January, Paced by Food ---------------------------------------------------------------- Dominican Today reports that the Central Bank said that consumer prices climbed 0.33% in January compared to December, paced by the foods group. "Regarding annual or annualized inflation, measured from January 2019 to January 2020, it was 4.17%, around the central point of the target range established in the Monetary Program of 4.0% (± 1.0%)," according to Dominican Today. The results of the general CPI show that the Food and non-alcoholic beverages group had the highest incidence in inflation in January 2020 were varying 0.59%, the Central Bank said in a statement obtained the news agency. About Dominican Republic The Dominican Republic is a Caribbean nation that shares the island of Hispaniola with Haiti to the west. Capital city Santo Domingo has Spanish landmarks like the Gothic Catedral Primada de America dating back 5 centuries in its Zona Colonial district. The Troubled Company Reporter-Latin America reported in April 2019 that the Dominican Today related that Juan Del Rosario of the UASD Economic Faculty cited a current economic slowdown for the Dominican Republic and cautioned that if the trend continues, growth would reach only 4% by 2023. Mr. Del Rosario said that if that happens, "we'll face difficulties in meeting international commitments." An ongoing concern in the Dominican Republic is the inability of participants in the electricity sector to establish financial viability for the system. Standard & Poor's credit rating for Dominican Republic stands at BB- with stable outlook (2015). Moody's credit rating for Dominican Republic was last set at Ba3 with stable outlook (2017). Fitch's credit rating for Dominican Republic was last reported at BB- with stable outlook (2016). =========== M E X I C O =========== COACALCO MUNICIPALITY: Moody's Withdraws B3 Issuer Rating --------------------------------------------------------- Moody's de Mexico has withdrawn the B3 and B1.mx issuer ratings of the Municipality of Coacalco. Moody's has also withdrawn the stable outlook and the b3 Baseline Credit Assessment. Moody's has decided to withdraw the ratings for its own business reasons. G.D.S. EXPRESS: May Obtain Financing, Access Cash Until Feb. 21 --------------------------------------------------------------- Judge Alan M. Koschik of the U.S. Bankruptcy Court for the Northern District of Ohio authorized G.D.S. Express, Inc. and its affiliates to obtain revolving loans from Northwest Bank and to use cash collateral on an interim basis until the close of Feb. 21, 2020. Northwest Bank is granted adequate protection against the diminution in the value or amount of the prepetition collateral, replacement liens and a superpriority administrative expense claims under sections 503 and 507(b) of the Bankruptcy Code. Such replacement liens and superpriority administrative expense claims are subject to the carve-out and the liens, security interests and superpriority treatment granted to Northwest Bank. As precondition to the continuance of funding by Northwest Bank and the continued use of cash collateral, the Debtors agree to observe the following milestones in the orderly liquidation of the Debtor's estate: (a) By Jan. 31, 2020, the Debtor will provide written reports to Northwest Bank and the Committee of the locations, vehicle mileage and status of all trucks, trailers and all containers (including a specific list of all trucks that cannot be located after diligent inquiry) and any cash collateral. (b) By Feb. 5, 2020, the Debtor will provide written reports to Northwest Bank and the Committee of the disposition of any hazardous cargo contained in rolling stock or containers. (c) By Jan. 27, 2020, the Debtor will provide Northwest Bank and the Committee an updated aging for all accounts receivable, with all previous collections noted to be updated weekly in addition to the requirements as provided for in the budget process set for in the Order. (d) By Feb. 14, 2020, the Debtor will provide Northwest Bank and the Committee a comprehensive plan for the methodology of the sale, return or liquidation of all tractors, trailers and containers. (e) By Feb. 24, 2020, the Debtor will seek court approval for the sale and/or disposition of the trucks, trailers and containers. (f) By March 15, 2020, the Debtors will use their best efforts (i) to reduce to cash 80% of accounts receivable existing on the Petition Date or billed after the Petition Date; and (ii) for an identification of all account payors that have refused to pay with a plan provided for the accounts which are paying. Further, any discount of more than 5% from the invoice amount will require the written approval of Northwest Bank. A copy of the Order is available at PacerMonitor.com at https://is.gd/vnZB9p at no charge. About G.D.S. Express G.D.S. Express, Inc. -- http://www.gdsexpress.com/-- is a family-owned trucking company that provides services in 48 states, with general freight and garment-on-hangers service in both the U.S. and Mexico. It operates with 75 owner operators and 60 company trucks. Headquartered in Akron, Ohio, GDS Express was founded in 1990 by Jack Delaney, a former Roadway Express executive. G.D.S. Express and its affiliates sought protection under Chapter 11 of the Bankruptcy Code (Bankr. N.D. Ohio Lead Case No. 19-53034) on Dec. 27, 2019. At the time of the filing, G.D.S. Express had estimated assets of less than $50,000 and liabilities of between $1 million and $10 million. Judge Alan M. Koschik oversees the cases. Brouse McDowell, LPA is the Debtors' legal counsel. OPERADORA DE SERVICIOS MEGA: S&P Affirms BB Rating on Unsec. Notes ------------------------------------------------------------------ S&P Global Ratings affirmed its 'BB' issue-level rating on Operadora de Servicios Mega, S.A. de C.V. SOFOM, E.R.'s (GFMEGA) senior unsecured notes after it increased the notes' amount to $350 million from $300 million. The debt increase doesn't affect the company's funding assessment, because S&P expects GFMEGA to use the proceeds mostly to prepay $165 million in secured credit facilities and a bridge loan, and then use the remainder to cover issuance expenses and for business growth. The company will hedge the interest and half of the principal with a full cross-currency swap (CCS) for the whole term and the other half with a cancellable call spread to limit currency risk. The 'BB' issue-level rating is at the same level as the long-term global scale issuer credit rating, reflecting that the notes will rank equally in right of payment with all of GFMEGA's existing and future senior unsecured debt. In addition, the firm's priority debt (secured debt) will represent slightly less than 20% of adjusted assets for the next 12 months and unencumbered assets will cover more than 1x its rated unsecured debt (including the proposed debt issuance). S&P said, "Nevertheless, we could lower the rating on the notes by one notch if, contrary to our expectations, GFMEGA pays down only a small portion of priority debt or significantly increases its secured funding. We will also analyze if the amount of unencumbered assets is sufficient to cover the new notes in such a scenario." The rating on GFMEGA also takes into account its increasing operating scale, although it's still modest compared with those of peers we rate in the region. Furthermore, the rating incorporates the company's very solid capital base thanks to strong internal capital generation and a capital injection that will compensate for the expected portfolio growth in the next 24 months. Finally, our risk position assessment on the company accounts for its asset quality ratios that are in line with those of its main peers. However, nonperforming loans coverage of about 60% and the rise in the customer concentration limit this assessment. Ratings List Ratings Affirmed Operadora de Servicios Mega, S.A. de C.V. SOFOM, E.R. Senior Unsecured BB ===================== P U E R T O R I C O ===================== PUERTO RICO: GO and PBA Bondholders Accept 30% Haircuts ------------------------------------------------------- The Lawful Constitutional Debt Coalition (the "LCDC"), which includes certain major holders of Puerto Rico's General Obligation ("GO") and Public Buildings Authority ("PBA") bonds, on Feb. 10 disclosed that it has agreed to a global settlement (the "Settlement") with the Financial Oversight and Management Board (the "Oversight Board") and other holders of GO and PBA bonds. The compromise, which builds upon the proposed September 2019 plan of adjustment ("POA") anchored by the LCDC and other creditors, enjoys substantially broader support. The forthcoming amended POA will enable Puerto Rico to consensually restructure approximately $35 billion of outstanding liabilities. Matt Rodrigue of Miller Buckfire & Co., in his capacity as the LCDC's financial advisor, commented: "This agreement among a cross-section of major creditors and the Oversight Board represents a significant step forward for Puerto Rico on its path to exiting bankruptcy on sound financial footing. In addition to reducing the Commonwealth's outstanding debt by approximately $24 billion, the Settlement shortens the timeline for debt repayment by ten years and places a cap on annual debt service, which will keep payments at or below 9.16% of government revenues. This deal also does not touch federal funds or monies going to pensioners and mitigates the risk of protracted litigation that could have cost the Commonwealth hundreds of millions of dollars per year in restructuring-related expenses. "It is important to highlight that creditors with long-term investments and interests in Puerto Rico have been willing to make meaningful compromises that will ultimately help restore capital formation and ignite economic activity on the island. Under the terms of the agreement, GO and PBA creditors will accept material haircuts that average 30%. These concessions anchor the consensual restructuring of more than $35 billion in outstanding debt and set the stage for Puerto Rico to experience the type of economic revitalization that other municipal issuers such as Detroit realized following their bankruptcies." A summary of the key terms provided under the Settlement include: * The Commonwealth's outstanding bond debt will be reduced from approximately $35 billion to approximately $11 billion, resulting in a total reduction of approximately $24 billion; * The timeline for debt repayment will be reduced by ten years compared with the prior POA; Commonwealth retains last ten years of cash flow totaling $4.8 billion; * Creates a cap on all payments for tax-supported debt of 9.16% of Puerto Rico's government revenues; * Provides for average haircuts for GO and PBA bondholders of approximately 30%; * Does not interfere with the level of government expenditures for essential services or pensions; * Leaves approximately $15 billion in cash for the Commonwealth and its entities. About the LCDC The LCDC consists of institutional holders of Puerto Rico's GO and PBA bonds. Quinn Emanuel Urquhart & Sullivan, LLP and Reichard & Escalera, LLC are serving as the LCDC's legal counsel, with Miller Buckfire & Co., a Stifel company, acting as the Coalition's financial advisor. 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 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. ********* 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 * * *