/raid1/www/Hosts/bankrupt/TCRLA

/raid1/www/Hosts/bankrupt/TCRLA_Public/151008.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, October 8, 2015, Vol. 16, No. 199 Headlines B R A Z I L BRAZIL: Worsening State Debt Mess Ensnares Foreign Bondholders BRAZIL: Analysts See Economy Contracting 2.85% PETROLEO BRASILEIRO: Cuts 2015-2016 Investment by $11 Billion C A Y M A N I S L A N D S ALBERTA COAL: Creditors' Proofs of Debt Due Oct. 20 DOMAIN MANAGEMENT: Creditors' Proofs of Debt Due Oct. 20 DOMAIN VENTURE: Creditors' Proofs of Debt Due Oct. 20 DRIFT LTD: Creditors' Proofs of Debt Due Oct. 28 FAMOUS FOUR: Creditors' Proofs of Debt Due Oct. 20 HERING OVERSEAS: Placed Under Voluntary Wind-Up JVP FUND: Shareholder to Hear Wind-Up Report on Nov. 2 OXEN SKIN: Creditors' Proofs of Debt Due Nov. 10 SCHAHIN II: Fitch Cuts 2012-1 Notes Rating to 'D' TBG MASTER: Creditors' Proofs of Debt Due Oct. 28 J A M A I C A DIGICEL GROUP: Puts Initial Public Offer on Hold M E X I C O AXTEL SAB: Telecomm. Revamp Rewards Distressed Bond Holders AXTEL SAB: Fitch Puts 'BB-(mex)' Nat'l LT Rating on Pos. Watch P U E R T O R I C O AES PUERTO RICO: Fitch Keeps Negative Watch on 'CC' Bond Ratings ANNA'S LINENS: Withdraws Request for Bid Protections ANNA'S LINENS: Sells Stores to Decron, FP BORDERS GROUP: Supreme Court Won't Review Gift Card Case COCO BEACH GOLF: Expects to File Chapter 11 Plan by Nov. 10 X X X X X X X X X LATAM: World Bank Warns Job Market Weakening - - - - - =========== B R A Z I L =========== BRAZIL: Worsening State Debt Mess Ensnares Foreign Bondholders -------------------------------------------------------------- Filipe Pacheco at Bloomberg News reports that Brazil's deepening state-debt woes are spreading to the overseas bond market. Minas Gerais's $1.27 billion of notes due in 2028 have lost 16.2 percent in the past four months as the finances of the country's second- most populous state deteriorate and a plunge in the real makes repaying foreign debt more expensive, according to Bloomberg News. Bloomberg News relates that the slump is almost seven times the average decline in emerging-market bonds. Brazil's worst recession in a quarter century is wreaking havoc on municipal finances, with at least five states receiving court approval to delay some debt payments to the federal government in the past month, Bloomberg News notes. Bloomberg News relays that Minas Gerais, the state with the highest amount of notes in the market, forecasts its budget deficit will swell to BRL10 billion ($2.54 billion) this year, the biggest since at least 2010. "We see a very complicated financial situation for the state," John Welch, a strategist at Canadian Imperial Bank of Commerce, said by phone from Toronto, Bloomberg News discloses. As part of a federal bailout of states in 1997, Brazil banned its local governments from borrowing in capital markets, Bloomberg News notes. But it allowed Minas Gerais to take out a $1.3 billion loan with Credit Suisse Group AG in November 2012 so the state could repay debt owed to a government-controlled electric utility, Bloomberg News says. Four months later, the loan was repackaged and issued as a bond that's guaranteed by the federal government, Bloomberg News discloses. "Brazil's government eased the conditions for states to take on new debt," Bloomberg News quoted Mr. Welch as saying. "Now, there is this strong need for a fiscal adjustment in the country, and the country is weaker. It seems like we are about to see the return of a problem that seemed to be solved." The press office for the Finance Secretary of Minas Gerais said in an e-mailed statement that the state will continue to service its debt as outlined in the contract with Credit Suisse, Bloomberg News says. The Treasury's press office said in an e-mail that it is the guarantor of the debt and if the state doesn't pay, it can execute guarantees to mitigate losses, Bloomberg News relays. Embattled President Dilma Rousseff is struggling to push through austerity measures to stem rating downgrades that have triggered a selloff in the nation's financial markets, Bloomberg News discloses. Brazil's real sank to a record low in September after Standard & Poor's cut the country's rating to junk, the third downgrade during Rousseff's almost five-year tenure, Bloomberg News relays. Latin America's biggest economy will shrink 2.5 percent this year and contract 0.5 percent in 2016, according to S&P, after growing 0.2 percent in 2014, Bloomberg News notes. Minas Gerais's bonds sold by Credit Suisse now yield 9.14 percent, compared with 5.5 percent when they were issued in 2013, data compiled by Bloomberg show. Among Brazilian states, Minas Gerais has the second highest debt-to-revenue ratio after Rio Grande do Sul, which defaulted on debt payments to the federal treasury in August and September, Bloomberg News says. "Minas Gerais's high indebtedness and tenuous liquidity position leave the state more vulnerable to an increase in its cost of debt," an analyst at Paco Debonnaire, said from Moody's Investors Service Sao Paulo, Bloomberg News relays. "We don't see Minas Gerais being able to re-balance its accounts in the short term due to the strong decline in tax collection and little ability to renegotiate its debt." BRAZIL: Analysts See Economy Contracting 2.85% ---------------------------------------------- EFE News reports that analysts expect Brazil's economy to contract by 2.85 percent this year, the Central Bank said. The GDP estimate comes from the Boletin Focus, a weekly Central Bank survey of analysts from about 100 private financial institutions on the state of the national economy, according to EFE News. PETROLEO BRASILEIRO: Cuts 2015-2016 Investment by $11 Billion ------------------------------------------------------------- EFE News reports that state-controlled oil company Petroleo Brasileiro S.A., Brazil's largest corporation, said it planned to cut investment by $11 billion in 2015 and 2016 due to the "new oil price level and exchange rates." The company, caught up in a gigantic corruption scandal, also said in a statement that it would trim operating expenses by $7 billion over the same period, according to EFE News. About Petroleo Brasileiro Based in Rio de Janeiro, Brazil, Petroleo Brasileiro S.A. -- Petrobras (Brazilian Petroleum Corporation) -- explores for oil and gas and it produces, refines, purchases, and transports oil and gas products. The Company has proved reserves of about 14.1 billion barrels of oil equivalent and operates 16 refineries, an extensive pipeline network, and more than 8,000 gas stations. The Troubled Company Reporter-Latin America reported on March 6, 2015, that the deepening investigation into the alleged kickback scheme at Petrobras has triggered concerns for the Brazilian banks with exposures not only to the state-controlled oil company, but also to its large base of suppliers, as well as the broader oil and gas (O&G) and construction industries, says Moody's Investors Service. On March 12, 2015, the TCR-LA reported that Moody's Investors Service said the corruption investigation into Petrobras will negatively affect parts of the public and private sectors, but government support for the company is likely to help contain the credit-negative impact. Moody's Investors Service has downgraded all ratings for Petrobras, including a downgrade of the company's senior unsecured debt to Ba2 from Baa3, and assigned a Ba2 Corporate Family Rating to the company, the TCRLA reported on Feb. 27, 2015. Its failure to estimate its losses from the alleged corruption scheme and produce audited third-quarter results prompted Moody's to cut its rating to junk, the report said. Rival agency Standard & Poor's delivered a further blow on March 23 when it revised its outlook on the company from stable to negative, the TCRLA reported on March 26, 2015. On Feb. 10, 2015, TCRLA said Fitch Ratings has downgraded the foreign and local currency Issuer Default Ratings (IDRs) and outstanding debt ratings of Petrobras to 'BBB-' from 'BBB'. Concurrently, Fitch has placed all of Petrobras' international and national scale ratings on Rating Watch Negative. ========================== C A Y M A N I S L A N D S ========================== ALBERTA COAL: Creditors' Proofs of Debt Due Oct. 20 --------------------------------------------------- The creditors of Alberta Coal Corporation are required to file their proofs of debt by Oct. 20, 2015, to be included in the company's dividend distribution. The company commenced liquidation proceedings on Aug. 31, 2015. The company's liquidator is: Appleby Trust (Cayman) Ltd. c/o Richard Gordon Telephone: +1 (345) 949 4900 75 Fort Street P.O. Box 1350 Grand Cayman KY1-1108 Cayman Islands DOMAIN MANAGEMENT: Creditors' Proofs of Debt Due Oct. 20 -------------------------------------------------------- The creditors of Domain Management II Limited are required to file their proofs of debt by Oct. 20, 2015, to be included in the company's dividend distribution. The company commenced liquidation proceedings on Aug. 21, 2015. The company's liquidator is: Appleby Trust (Cayman) Ltd. c/o Richard Gordon Telephone: +1 (345) 949 4900 75 Fort Street P.O. Box 1350 Grand Cayman KY1-1108 Cayman Islands DOMAIN VENTURE: Creditors' Proofs of Debt Due Oct. 20 ----------------------------------------------------- The creditors of Domain Venture Partners II Limited are required to file their proofs of debt by Oct. 20, 2015, to be included in the company's dividend distribution. The company commenced liquidation proceedings on Aug. 21, 2015. The company's liquidator is: Appleby Trust (Cayman) Ltd. c/o Richard Gordon Telephone: +1 (345) 949 4900 75 Fort Street P.O. Box 1350 Grand Cayman KY1-1108 Cayman Islands DRIFT LTD: Creditors' Proofs of Debt Due Oct. 28 ------------------------------------------------ The creditors of Drift Ltd. are required to file their proofs of debt by Oct. 28, 2015, to be included in the company's dividend distribution. The company commenced liquidation proceedings on Sept. 10, 2015. The company's liquidator is: Nicola Cowan DMS Corporate Services Ltd. Telephone: (345) 946 7665 Facsimile: (345) 949 2877 dms House, 2nd Floor P.O. Box 1344 Grand Cayman KY1-1108 Cayman Islands FAMOUS FOUR: Creditors' Proofs of Debt Due Oct. 20 -------------------------------------------------- The creditors of Famous Four Media 2 Limited are required to file their proofs of debt by Oct. 20, 2015, to be included in the company's dividend distribution. The company commenced liquidation proceedings on Aug. 21, 2015. The company's liquidator is: Appleby Trust (Cayman) Ltd. c/o Richard Gordon Telephone: +1 (345) 949 4900 75 Fort Street P.O. Box 1350 Grand Cayman KY1-1108 Cayman Islands HERING OVERSEAS: Placed Under Voluntary Wind-Up ----------------------------------------------- On Aug. 24, 2015, the sole shareholder of Hering Overseas Ltd. resolved to voluntarily wind up the company's operations. The company's liquidators are: E. Andrew Hersant Christopher Humphries Stuarts Walker Hersant Humphries 36A Dr. Roy's Drive, George Town P.O. Box 2510, Grand Cayman KY1-1104 Cayman Islands JVP FUND: Shareholder to Hear Wind-Up Report on Nov. 2 ------------------------------------------------------ The shareholder of JVP Fund Cayman Ltd will hear on Nov. 2, 2015, the liquidator's report on the company's wind-up proceedings and property disposal. The company's liquidator is: Commerce Corporate Services Limited P.O. Box 694 Grand Cayman Cayman Islands Telephone: 949 8666 Facsimile: 949 0626 OXEN SKIN: Creditors' Proofs of Debt Due Nov. 10 ------------------------------------------------ The creditors of Oxen Skin Limited are required to file their proofs of debt by Nov. 10, 2015, to be included in the company's dividend distribution. The company commenced liquidation proceedings on Sept. 11, 2015. The company's liquidator is: Lion International Management Limited Craigmuir Chambers Road Town, Tortola VG 1110 British Virgin Islands Mr. Philip C Pedro HSBC International Trustee Limited Compass Point, 9 Bermudiana Road Hamilton HM 11 Bermuda Telephone: (441) 299-6482 Facsimile: (441) 299-6526 SCHAHIN II: Fitch Cuts 2012-1 Notes Rating to 'D' ------------------------------------------------- Fitch Ratings has downgraded the senior secured series 2012-1 notes issued by Schahin II Finance Company (SPV) Limited to 'D' from 'CC' following the recent missed payment of scheduled interest due in September 2015. The Recovery Estimate (RE) is revised to 'RE50' from 'RE65'. The outstanding balance of the notes is approximately $651.5 million. The notes currently benefit from a naval mortgage on the vessel Sertao, a dynamically positioned drilling unit that until April 2015 was operating on the offshore waters of Brazil. Initially, the notes were also backed by flows related to a long-term charter and services agreement signed with Petroleo Brasileiro S.A (Petrobras: 'BBB-'; Outlook Negative) for the use of this drillship. Schahin Petroleo e Gas was the original operator of the drilling rig, a new rig manager has been recently appointed to act on behalf of the majority controlling party. KEY RATING DRIVERS Missed Scheduled Interest Payment: Fitch's rating action on the notes follows the recent missed payment of scheduled interest due in September 2015. On Sept. 26, 2015 Fitch received notification from the indenture trustee indicating that the majority controlling party had advised not to make any payments on the September payment date on an attempt to preserve the value of the collateral. Outstanding Reserves: As of August 2015, the balance of the reserve accounts was approximately $61.6 million with the $42 million related to the debt service reserve account (DSRA) of which $40 million are in the form of a letter of credit (LC). Cash in the reserve accounts was used in September to make the following payments: (i) insurance fees, (ii) Sertao's operating expenses, (iii) restructuring agent fees, and (iv) transaction fees. The majority controlling party also instructed the indenture to draw for the remaining amounts on the DSRA LCs. Operator Replacement: On April 17, 2015 certain entities within the Schahin group filed for recuperacao judicial resulting in a technical event of default of the notes, this resulted in an operator replacement event. In September 2015, the indenture trustee exercised its rights and acting at the direction of the majority controlling party, terminated Schahin Petroleo e Gas as Sertao's operator. A new rig manager, V. Ships, has been appointed by the majority controlling party to assist in the management of the vessel during the asset disposition process. . RECOVERY ESTIMATES Fitch has revised the notes' RE to 'RE50' from 'RE65', reflecting an estimate of the potential cash flows generated by the liquidation of the assets under market conditions. Fitch assigns REs to all classes rated 'CCC' or below. REs are forward-looking, taking into account Fitch's expectations for principal repayments on a distressed structured finance security. REs do not reflect the actual recovery noteholders may get upon sale of the underlying vessels or potential restructuring of the notes. Offshore drillers have been facing softening market conditions due to decreased demand and a significant backlog of newbuilds. The more than 50% drop in oil prices has compounded the effects of the oversupply cycle, resulting in a decline in market dayrates of roughly 50% from pre-cycle levels and heightened pressure on utilization rates. Fitch continues to believe that medium-term demand will rebound and absorb newer high-quality assets that operate more efficiently According to Fitch's estimates and considering potential legal fees, mobilization fees and additional exportation costs, the agency has revised the notes' REs to 'RE50'. RATING SENSITIVITIES The 'D' rating will be withdrawn within 11 months of Oct. 6's date. DUE DILIGENCE USAGE No third-party due diligence was provided or reviewed in relation to this rating action. TBG MASTER: Creditors' Proofs of Debt Due Oct. 28 ------------------------------------------------- The creditors of TBG Master Trading Fund SPC are required to file their proofs of debt by Oct. 28, 2015, to be included in the company's dividend distribution. The company commenced liquidation proceedings on Sept. 8, 2015. The company's liquidator is: Peter Goulden Mourant Ozannes Cayman Liquidators Limited Reference: NDL Telephone: (+1) 345 949 4123 Facsimile: (+1) 345 949 4647; or Mourant Ozannes Cayman Liquidators Limited Reference: Peter Goulden Telephone: +1 (345) 949 4123 Facsimile: +1 (345) 949 4647 94 Solaris Avenue, Camana Bay P.O. Box 1348 Grand Cayman KY1-1108 Cayman Islands ============= J A M A I C A ============= DIGICEL GROUP: Puts Initial Public Offer on Hold ------------------------------------------------ RJR News reports that Digicel Group Limited has decided not to proceed with its Initial Public Offer at this time. In a statement, the telecommunications company said, despite significant support for the IPO from a high quality group of investors during the marketing period, current conditions, particularly in emerging markets, have negatively affected transaction momentum over recent days, according to RJR News. Denis O'Brien, Chairman of Digicel, said recent volatility in equity markets has seen several IPOs listing at a discount to their signaled price range, and this, he said, was a less attractive route for the company, the report relays. According to Digicel, the company still intends to exploit areas of interest in: Data, Business Solutions, Cable TV as well as Broadband, the report notes. * * * As reported in the Troubled Company Reporter-Latin America on May 25, 2015, Fitch Ratings has affirmed the ratings of Digicel Group Limited (DGL) and its subsidiaries Digicel Limited (DL) and Digicel International Finance Limited (DIFL), collectively referred to as 'Digicel' as follows. DGL -- Long-term Issuer Default Rating (IDR) at 'B' with a Stable Outlook; -- USD 2.5 billion 8.25% senior subordinated notes due 2020 at 'B-/RR5'; -- USD 1 billion 7.125% senior unsecured notes due 2022 at 'B -/RR5'. DL -- Long-term IDR at 'B' with a Stable Outlook; -- USD 250 million 7% senior notes due 2020 at 'B/RR4'; -- USD 1.3 billion 6% senior notes due 2021 at 'B/RR4'; -- USD 925 million 6.75% senior notes due 2023 at 'B/RR4'; DIFL -- Long-term IDR at 'B' with a Stable Outlook; -- Senior secured credit facility at 'B+/RR3'. =========== M E X I C O =========== AXTEL SAB: Telecomm. Revamp Rewards Distressed Bond Holders ----------------------------------------------------------- Ben Bain at Bloomberg News reports that Mexico President Enrique Pena Nieto's push to open the telecommunications industry is finally starting to pay off for bondholders who bet the legal changes would make Axtel SAB takeover target. Axtel SAB, which has less than a tenth of the fixed-line customers of dominant player America Movil SAB, agreed to be acquired by investment-grade conglomerate Alfa SAB in an all-stock deal, according to Bloomberg News. Bloomberg News notes that the good fortune for bond investors has its roots in constitutional changes passed in July 2014 that sought to bolster competition in an industry long dominated by billionaire Carlos Slim's America Movil. After regulators eliminated fees that smaller carriers paid to connect calls to rivals' networks, the notion of building a competitor to Slim's behemoth suddenly became more realistic for companies with money to invest, including Alfa, Bloomberg News relays. "There is a growing belief that the reforms are real, and participants are positioning to take advantage of potential opportunities," Robert Rauch, who oversees $5.7 billion of assets at Gramercy Fund Management LLC in Greenwich, Connecticut, including Axtel bonds, said in an e-mail obtained by Bloomberg News. It's quite a turnaround for a company that lost money in four of the past five years and was forced to restructure its bonds in 2013, when it was unable to pay its debt, Bloomberg News relays. Axtel controls about 4 percent of the country's fixed-line telephones, compared with 63 percent for America Movil, 19 percent for Grupo Televisa SAB and 1.4 percent for Maxcom Telecomunicaciones SAB. Bloomberg News relays that Axtel will issue new stock to Alfa to give it control, the companies said. Financial terms weren't released and Axtel, which will be merged with Alfa's Alestra unit, will continue to be publicly traded, Bloomberg News notes. Alestra has more corporate clients, while Axtel focuses on residential customers, offering fiber-optic lines with video and high-speed Internet in large cities such as Monterrey and Mexico City, Bloomberg News says. Prior to an announcement, Axtel's 2020 debt had returned 2.1 percent this year compared with an average 0.5 percent loss for more than 1,000 emerging-market dollar bonds tracked by Bloomberg. Standard & Poor's said it is considering raising Axtel's B- rating, which is six levels below investment grade, on the view that the combined company will be a stronger competitor, Bloomberg News discloses. S&P rates Alfa debt six steps higher at BBB- and said the conglomerate probably will support Alestra financially if needed, Bloomberg News relays. "Axtel will have an improved competitive position and larger scale, along with a robust network, more-solid commercial operations and stronger metrics," the ratings company said in a statement, Bloomberg News adds. AXTEL SAB: Fitch Puts 'BB-(mex)' Nat'l LT Rating on Pos. Watch -------------------------------------------------------------- Fitch Ratings has placed its ratings on Axtel S.A.B. de C.V. (Axtel) on Rating Watch Positive following its announcement of a memorandum of understanding to merge with Alestra S. de R.L. de C.V. (Alestra). Fitch currently rates Axtel's long-term Issuer Default Rating (IDR) 'B'. Alestra is a Mexican fixed-line telecom operator and is a wholly owned subsidiary of Alfa S.A.B. de C.V. (Alfa), which is one of the largest business groups in Mexico with a diversified business portfolio. Axtel expects to close the merger by the end of the year following the necessary notification/approval process related with the telecom regulatory body and the stock exchange in Mexico. Post the transaction, Alfa will own 51% of stakes in Axtel, and Alestra will become a subsidiary of Axtel. KEY RATING DRIVERS Positive Merger Synergies: The Rating Watch Positive reflects Fitch's view that the merged entity will benefit from an economy of scale and operational synergies, mainly in terms of network competitiveness and improved efficiencies, as well as a stronger market presence in the enterprise business segment in Mexico. Based on the operating result of each entity during the last 12 months as of June 2015, the combined revenues and EBITDA would amount to USD1.1 billion and USD363 million, respectively, which compares to Axtel's stand- alone figure of USD693 million and 192 million. Axtel expects to achieve an operational synergy of MXN1 billion a year (equivalent to USD60 million) once the operational integration is complete, which would represent close to 20% improvement from the current combined EBITDA level. Negatively, Axtel's small scale of operation in the highly competitive Mexican telecom industry will still remain a key credit concern. Lower Leverage: Fitch forecasts the merged entity's financial profile to improve given Alestra's lower leverage compared to Axtel. As of June 30, 2015, Axtel's net leverage, excluding the adjustment for operating leases for tower assets, was 3.1x while that of Alestra was 1.2x. Based on the current financial profile of each entity without reflecting any synergy benefit, the merged entity's consolidated net leverage is estimated to be 2.2x. As of June 30, 2015, Axtel's total gross debt amounted to USD770 million, of which more than 70% was accounted for by its senior secured notes due 2020. The notes have a change of control clause which would enable the noteholders to exercise a put option with Alfa becoming the major shareholder post the transaction. Fitch believes that it is Axtel's intention to attempt to amend the indenture by obtaining consent from the noteholders. Strong Parent: Axtel's credit quality will also benefit from becoming part of a strong business group in Alfa. While Fitch does not foresee any explicit legal or financial support from Alfa, Axtel should enjoy better access to capital markets/financial institutions when in need of external financing given the group's strong reputation and entrenched business position in the country. This should help strengthen Axtel's financial flexibility. KEY ASSUMPTIONS -- The merger process to be completed by end-2015 without any major regulatory issues; -- No material changes on the pro forma financial profile of the merged entity, which is forecast to be stronger than that of Axtel; -- Axtel to be able to obtain consent from the 2020 notes holders to avoid triggering the change of control clause per the current indenture RATING SENSITIVITIES Rating Watch Positive will be resolved upon the successful closing of the merger. Any potential upgrades in Axtel's ratings will largely hinge on Fitch's view on the operational/financial synergy from the merger, the merged entity's market position and business strategy, as well as the industry outlook going forward. If the deal does not close, Fitch expects to affirm the company's current ratings, or re-evaluate if industry conditions and performance change substantially. LIQUIDITY Axtel's liquidity is sound in light of its high cash balance of MXN2.8 billion as of June 30, 2015, which comfortably covered the short-term debt of MXN519 million. The company also has a USD130 million credit facility and does not face any sizable debt maturity until 2017. FULL LIST OF RATING ACTIONS Fitch has placed the following ratings on Rating Watch Positive: Axtel S.A.B. de C.V.'s -- Long-term foreign-currency and local-currency IDR 'B'; -- National long-term rating 'BB-(mex)'; -- Senior secured notes due 2020 'B+/RR3'; -- Senior unsecured notes due 2017 and 2019 'B-/RR5'. ====================== P U E R T O R I C O ====================== AES PUERTO RICO: Fitch Keeps Negative Watch on 'CC' Bond Ratings ---------------------------------------------------------------- Fitch Ratings has maintained the Rating Watch Negative on the following AES Puerto Rico L.P. (AES PR) securities issued through the Puerto Rico Industrial, Tourist, Educational, Medical & Environmental Control Facilities Financing Authority: -- $161.87 million cogeneration facility revenue bonds, series A (tax-exempt bonds) due June 2026 at 'CC'; -- $33.1 million cogeneration facility revenue bonds, series B (taxable bonds) due June 2022 at 'CC'. The 'CC' rating reflects Fitch's view of the credit quality of the Puerto Rico Electric Power Authority (PREPA). PREPA is the revenue counterparty under AES PR's power purchase agreement (PPA). PREPA's 'CC' rating with a Rating Watch Negative constrains the rating of AES PR. KEY RATING DRIVERS Contracted Revenue Profile - Revenue Risk: Weaker The 25-year tolling-style PPA with a non-investment-grade counterparty effectively mitigates some risk of exposure to capacity price, energy margin, and dispatch risks throughout the debt term, subject to project availability and heat rates. However, concerns loom regarding the offtaker's ability to make future contractual payments. Improving Operations - Operation Risk: Weaker AES-PR has historically been susceptible to forced outages that have reduced availability and capacity payments. Further, the operating cost profile has exceeded original estimates. However, management has taken a proactive approach to limit future forced outages with encouraging initial results. Manageable Supply Risk - Supply Risk: Midrange Fuel supply risk is mitigated by a three-year, fixed-price fuel supply agreement sufficient to meet the project's expected fuel requirements through 2017. The short term of the agreement is mitigated by the historical precedence for renewal and liquid market for coal. Fuel price risk is mitigated by the tolling-style PPA, subject to heat rates. Ash inventory is actively managed by the project via the sale of its various ash products. AES-PR's efforts have helped to offset near-term ash disposal concerns, but cash flow uncertainty is heightened without a permanent solution. Weak Structural Features - Debt Structure: Weaker The project's bonds are fixed-rate and mature within the PPA term, but have back-loaded amortization profiles. The equity distribution, leverage, and debt service reserve provisions are consistent with standard project finance structures. AES-PR does not have O&M or major maintenance reserves, which increases the importance of operational stability and heightens the project's reliance on other sources of liquidity. Approximately 55% of the total debt outstanding, including unrated bank loans, is variable rate with over 80% synthetically fixed with investment-grade counterparties. RATING SENSITIVITIES Positive/Negative - Counterparty Rating: The rating is currently capped by PREPA's rating. A change in PREPA's long-term rating would likely impact the rating on AES Puerto Rico. Positive - Operational Performance: Sustained improvements to plant availability or heat rate could enhance the long-term profile. SUMMARY OF CREDIT PREPA and certain bondholders agreed to a proposed recovery plan on Sept. 2, further reinforcing the notion that a restructuring of the issuer's debt obligations is probable. Any restructuring that does not result in full and timely payment of the power revenue bonds according to the original terms promised would likely result in a further downgrade to 'C' upon agreement by the required holders. In such an event, the rating of AES Puerto Rico would also be lowered to the rating of PREPA, reflecting the cap of the off-taker. At AES PR, recent plant operations have improved substantially and the 2014 effective forced outage rate of 1.2% was the best in the plant's history. Average heat rates have also demonstrated considerable stability in recent quarters. The sponsor attributes improved performance to a renewed commitment to fund major capital expenditures since 2012. The project has also added new agreements for fuel supply and ash management that support cash flow stability. The fuel supply agreement extends through 2017, offers more favorable and stable pricing, and provides more flexible payment terms. The ash management agreements promote the disposal of AES PR's ash products to on-island landfills for beneficial use, and are expected to be sufficient to cover all the project's ash management needs. ANNA'S LINENS: Withdraws Request for Bid Protections ---------------------------------------------------- Judge Theodor C. Albert of the United States Bankruptcy Court for the Central District of California, Santa Ana Division, allowed Anna's Linens, Inc., to withdraw its request for approval of bid protection to Great American, and authorized the Debtor to file a motion seeking approval of the Tiger/Yellen Group Agreement. The Debtor's efforts to retain a liquidator resulted in the execution of the Stalking Horse Agency Agreement with a joint venture comprised of Tiger Capital Group and Yellen Partners, LLC, which included a guarantee from Tiger/Yellen Stalking Horse that the Debtor would receive 93.5% of the aggregate Cost Value of the Merchandise, subject to certain adjustments. Further, as a result of the default, an auction was held on June 9, 2015 and June 10, 2015 at which the Tiger/Yellen Stalking Horse was outbid by a group formed by Hilco Merchant Resources, LLC, and Gordon Brothers Retail Partners, LLC, which included an increase in the guarantee to 111% of the Cost Value of the Merchandise with a Merchandise Threshold of not less than $61,500,000 and not more than $67,000,000. Thus, the Official Unsecured Creditors Committee, the Tiger Yellen Group and the Debtor have reached an agreement on the proposed Bid Protections for the Tiger Yellen Group. The Debtor is represented by: David B. Golubchik, Esq. Eve H. Karasik, Esq. Juliet Y. Oh, Esq. Lindsey L. Smith, Esq. LEVENE, NEALE, BENDER, YOO & BRILL L.L.P. 10250 Constellation Boulevard, Suite 1700 Los Angeles, California 90067 Tel: (310) 229-1234; Fax: (310) 229-1244 Email: dbg@lnbyb.com ehk@lnbyb.com jyo@lnbyb.com lls@lnbyb.com About Anna's Linens Anna's Linens is a specialty retailer offering home textiles, furnishings and decor at attractive prices. Headquartered in Costa Mesa, California, operates a chain of 268 company owned retail stores throughout 19 states in the United States (including Puerto Rico and Washington, D.C.) generates over $300 million in annual revenue and employs a workforce of over 2,500 associates. Anna's Linens sought Chapter 11 bankruptcy protection (Bankr. C.D. Cal. Case No. 15-13008) in Santa Ana, California, on June 14, 2015. The case is assigned to Judge Theodor Albert. The Debtor tapped Levene, Neale, Bender, Yoo & Brill LLP as counsel. The Debtor estimated assets of $50 million to $100 million and debt of $100 million to $500 million. The U.S. trustee overseeing the Chapter 11 case of Anna's Linens Inc. appointed seven creditors to serve on the official committee of unsecured creditors. ANNA'S LINENS: Sells Stores to Decron, FP ------------------------------------------ Judge Theodor C. Albert of the United States Bankruptcy Court for the Central District of California, Santa Ana Division, authorized Anna's Lines, Inc., to sell its unexpired store real property leases to Decron Properties Corp. and FP Stores, Inc. Decron is deemed the successful bidder for the Store Lease for Store No. 97, which is located at 7888-2 Van Nuys Boulevard, in Van Nuys, California. FP is deemed the successful bidder for the 41 Store Leases for stores located in California, Nevada, Texas, Florida, South Carolina, North Carolina and Virginia. A hearing will be held on October 28, 2015 at 10:00 a.m. for the Court to consider any requests by landlords under the FP Store Leases for the payment of additional cure amounts related solely to attorneys' fees asserted by landlords to be due and payable under their leases (above and beyond the Cure Amounts set forth above) which have not been resolved by mutual agreement of the Debtor and the applicable landlords. The Debtor sought to sell its intellectual property, including trademarks, copyrights, domain names, customer lists, the e- commerce business, and related data assets and sell and/or assume and assign unexpired store real property leases as part of single, multiple and/or combined transactions to the successful bidder. The Debtor entered into an asset purchase agreement with FP as the approved stalking horse bidder for the assignment of 44 of the Debtor's store leases. The total consideration to be paid by FP is $1,400,000. FP, as stalking horse bidder for the auction of the store leases, was entitled to a break-up fee of three percent of the purchase price for the Assigned Leases if there was an overbid at the auction, and the successful bidder is not FP and timely closes the assignment transaction for those store leases. Objections Resolved, Overruled Objections to the sale motion were filed by CV Commercial Real Estate; Brixmor Property Group, Inc.; DDR Corp., Gregory Greenfield & Associates, Ltd., Rouse Properties, Inc., Equity One, Inc., Philips International Holding Corp., Plamex Investments, LLC, and Aston Properties, Inc.; MGP IX Properties, LLC; landlords affiliated with Kimco Realty Corporation; Watt Properties, Inc., Weingarten Realty Investors; and Prime/CRDF Mission Hills, LLC. Capcor Weslaco, Ltd. and NEMP Holdings, L.P., opposed the bidding procedures, asserting that the procedures do not provide Landlords with either reasonable notice or an opportunity to be heard regarding whether the prerequisites to assumption and assignment set forth in Section 365 have been satisfied or whether the proposed sale of designation rights is appropriate. Acadia Realty Trust, UCR Asset Services, Deutsche Asset & Wealth Management, Starwood Retail Partners LLC, Prudential Real Estate Investors, ARC SWHOUTX001, LLC, ARC CTCHRNC001, LLC, Watt Management Company and West Valley Properties, Inc., reserved their rights to raise additional objections to the bid procedures and sale motion. SM 101 Six, LLC; Vestar California XXVI; A-S 106 Pasadena Town Center, L.P., Capcor Weslaco,Ltd and Nemp Holdings, L.P.; Kimco Realty Corporation and Weingarten Realty Investors; and ROIC California LLC, objected to the proposed cure amounts. Petsmart, Inc, objected to the sale motion to the extent the motion seeks to assume and assign the Lease without paying the unpaid obligations in full. Petsmart claims that the Debtor owes $38,435 in unpaid rent, common area maintenance fees, insurance, real estate taxes and interest under lease. The Debtor, in response to the objections, maintained that the sale is necessary. With respect to the cure amount objections, the Debtor asked the Court for a continued hearing to determine the amounts necessary to cure defaults under the leases for the Disputed Cure Stores. The Debtor is represented by: David B. Golubchik, Esq. Eve H. Karasik, Esq. Juliet Y. Oh, Esq. Lindsey L. Smith, Esq. LEVENE, NEALE, BENDER, YOO & BRILL L.L.P. 10250 Constellation Boulevard, Suite 1700 Los Angeles, California 90067 Tel: (310) 229-1234; Fax: (310) 229-1244 Email: dbg@lnbyb.com ehk@lnbyb.com jyo@lnbyb.com lls@lnbyb.com Capcor Weslaco, Ltd. and NEMP Holdings, L.P. A-S 106 Pasadena Town Center, L.P. are represented by: Jeanne M. Jorgensen, Esq. Catherine M. Page, Esq. 1101 Dove Street, Suite 220 Newport Beach, California 92660 Tel: (949) 250-7181 Fax: (949) 250-3125 E-Mail: jjorgensen@pj-law.com cpage@pj-law.com Acadia Realty Trust, UCR Asset Services, Deutsche Asset & Wealth Management, Starwood Retail Partners LLC, Prudential Real Estate Investors, ARC SWHOUTX001, LLC, ARC CTCHRNC001, LLC, Watt Management Company and West Valley Properties, Inc. are represented by: Dustin P. Branch, Cal. Bar No. 174909 KATTEN MUCHIN ROSENMAN LLP 2029 Century Park East, Suite 2600 Los Angeles, CA 90067-3012 Tel: (310)788.4400 Fax: (310)788.4471 E-mail: dustin.branch@kattenlaw.com SM 101 SIX, LLC is represented by: Gordon G. May, Esq. GRANT, GENOVESE & BARATTA, LLP 2030 Main Street, Suite 1600 Tel: (949) 660-1600 Fax: (949) 660-6060 Email: dcg@ggb-law.com ggm@ggb-law.com Vestar California XXVI, LLC is represented by: Ernie Zachary Park, Esq. BEWLEY, LASSLEBEN & MILLER, LLP 13215 E. Penn Street, Suite 510 Whitter, California 90602-1797 Tel: (562) 698-9711 Fax: (562) 696-6357 Email: ernie.park@bewleylaw.com Petsmart is represented by: Gary Owen Caris, Esq. DENTONS US LLP 300 South Grand Ave, 14th Floor Los Angeles, California 90071 Tel: (213) 688-1000 Fax: (213) 243-6330 Email: Gary.Cawis@dentons.com Kimco Realty Corporation and Weingarten Realty Investors are represented by: William W. Huckins, Esq. Ivan M. Gold, Esq. Thor D. Mclaughlin, Esq. ALLEN MATKINS LECK GAMBLE MALLORY & NATSIS LLP Three Embarcadero Center, 12th Floor San Francisco, CA 94111-4074 Tel: (415) 837-1515 Fax: (415) 837-1516 Email: whuckins@allenmatkins.com igold @allenmatkins.com tmclaughlin @allenmatkins.com ROIC California is represented by: Christopher L. Parnell, Esq. DUNN CARNEY ALLEN HIGGINS & TONGUE LLP 851 SW Sixth Ave, Suite 1500 Portland Oregon 97204-1357 Tel: (503) 224-6440 Fax: (503) 224-7324 Email: cparnell@dunncarney.com About Anna's Linens Anna's Linens is a specialty retailer offering home textiles, furnishings and decor at attractive prices. Headquartered in Costa Mesa, California, operates a chain of 268 company owned retail stores throughout 19 states in the United States (including Puerto Rico and Washington, D.C.) generates over $300 million in annual revenue and employs a workforce of over 2,500 associates. Anna's Linens sought Chapter 11 bankruptcy protection (Bankr. C.D. Cal. Case No. 15-13008) in Santa Ana, California, on June 14, 2015. The case is assigned to Judge Theodor Albert. The Debtor tapped Levene, Neale, Bender, Yoo & Brill LLP as counsel. The Debtor estimated assets of $50 million to $100 million and debt of $100 million to $500 million. The U.S. trustee overseeing the Chapter 11 case of Anna's Linens Inc. appointed seven creditors to serve on the official committee of unsecured creditors. BORDERS GROUP: Supreme Court Won't Review Gift Card Case -------------------------------------------------------- Sara Randazzo, writing for The Wall Street Journal, reported that any shoppers still holding on to Borders gift cards can finally toss them in the trash as the U.S. Supreme Court said it won't take up a case that could have given holders of the defunct book seller's gift cards a chance to turn the languishing plastic into cash. Borders Group customers who missed out on $210 million in gift cards after the company went bankrupt, lost their bid on Oct. 5, 2015, to revive the dispute after the U.S. Supreme Court denied their petition to consider the suit, Dani Meyer at Bankruptcy Law360 reported. The high court shot down the customers' June petition arguing that 11 circuit courts have 11 different rule sets governing when to dismiss a bankruptcy claim appeal and that the Supreme Court should step in, instead siding with the liquidating trust. According to the report, plaintiff's lawyer Clinton Krislov has been fighting on behalf of the gift card holders for years, arguing the Borders bankruptcy estate didn't do enough to notify shoppers that they risked losing the value on their credits. Before the Supreme Court denial, lower courts found the gift card holders waited too long to raise their claims once Borders went into bankruptcy in 2011, the report said. As previously reported by The Troubled Company Reporter, the Mr. Krislov filed a petition with the Supreme Court, making a last- ditch effort to recover some value for holders of the Borders gift cards. The petition is the last chapter in a long-running fight over whether the gift-card holders waited too long to try to turn their credits into cash. The TCR, citing The Wall Street Journal, pointed out that the defunct retailer estimates customers never redeemed 17.7 million gift cards worth $210.5 million by the time it shut its doors in September 2011. The U.S. Court of Appeals for the Second Circuit, in November 2014, sided with two lower courts and ruled that a group of Borders customers waited too long to raise their claims for the unused gift cards. About Borders Group Borders Group operated book, music and movie superstores and mall based bookstores under the Borders, Waldenbooks, Borders Express and Borders Outlet names, as well as Borders-branded airport stores in the United States. At Jan. 29, 2011, the Company operated 639 stores in the United States and 3 in Puerto Rico. The Company also operated a proprietary e-commerce Web site -- http://www.Borders.com/-- launched in May 2008, which included both in-store and online e-commerce components. As of Feb. 11, 2011, Borders employed a total of 6,100 full-time employees, 11,400 part-time employees, and roughly 600 contingent employees. Borders Group Inc. and its affiliates filed for Chapter 11 protection (Bankr. S.D.N.Y. Case No. Lead Case No. 11-10614) in Manhattan on Feb. 16, 2011. David M. Friedman, Esq., David S. Rosner, Esq., Andrew K. Glenn, Esq., and Jeffrey R. Gleit, Esq., at Kasowitz, Benson, Torres & Friedman LLP, in New York, served as counsel to the Debtors. Jefferies & Company's Inc. served as the financial advisor. DJM Property Management is the lease and real estate services provider. AP Services LLC served as the interim management and restructuring services provider. The Garden City Group, Inc., acted as the claims and notice agent. Attorneys at Morgan, Lewis & Bockius LLP, and Riemer & Braunstein LLP, served as counsel to the DIP Agents. Lowenstein Sandler represented the official unsecured creditors committee for Borders Group. The Debtor disclosed $1.28 billion in assets and $1.29 billion in liabilities as of Dec. 25, 2010. Borders selected proposals by Hilco and Gordon Brothers to conduct going out of business sales for all stores after no going concern offers of higher value were submitted by the deadline. In January 2012, Borders' First Amended Joint Chapter 11 Plan of Liquidation became effective, and the Company emerged from Chapter 11 protection. The Court confirmed the Plan filed by the Debtors and the Official Committee of Unsecured Creditors at a Dec. 20, 2011 hearing. The Debtors have been renamed BGI Inc. Curtis R. Smith has been appointed as Liquidating Trustee of the BGI Creditors' Liquidating Trust. He is represented by Bruce Buechler, Esq., Bruce S. Nathan, Esq., and Andrew Behlmann, Esq., at Lowenstein Sandler LLP. COCO BEACH GOLF: Expects to File Chapter 11 Plan by Nov. 10 ----------------------------------------------------------- Coco Beach Golf & Country Club, S.E., said in a report filed Sept. 1, 2015 with the U.S. Bankruptcy Court for the District of Puerto Rico that it is filing a Chapter 11 plan and disclosure statement on or before Nov. 10, 2015. The Debtor said it is in the process of selling its Golf & Country Club which will prevent its continued deterioration and ensure that it remains open and operating at its maximum capacity, with the proceeds of the sale to be utilized by Debtor towards payment to creditors pursuant to a plan to be filed. The Debtor signed a deal to sell the assets to OHorizons Global, LLC, absent higher and better offers. The Court on Sept. 2, 2015, approved bidding procedures to solicit higher and better offers and select the successful bidder for the assets. An auction is slated for Nov. 23. The sale hearing has been scheduled for Dec. 3, 2015. The State Insurance Fund Corporation has filed with the Bankruptcy Court a request for an order directing the Debtor to serve a copy of any plan and disclosure statement as soon as they are filed. The Debtor estimates that the accrual of professional fees in this case will be around $150,000 to $200,000. The Debtor sought bankruptcy protection after as it had been experiencing a substantial diminution in its cash flow due to Puerto Rico's adverse economic situation, which has impacted the tourism sector of the Island. Said situation, together with Debtor's inability to raise sufficient income to remain competitive in today's marketplace, resulted in the Debtor's need to sell the Golf & Country Club and related property in order to maximize the value of its assets for the benefit of creditors and the bankruptcy estate. About Coco Beach Golf Coco Beach Golf & Country Club, S.E., is the owner of a first class golf and country club in Rio Grande, Puerto Rico, currently operating under the name of Trump International Golf Club Puerto Rico. Trump International Golf Club has two 18-hole golf courses and country club facilities. The Company sought Chapter 11 protection (Bankr. D.P.R. Case No. 15-05312) in Old San Juan, Puerto Rico, on July 13, 2015, and immediately filed a motion seeking to sell most of the assets for $2.04 million in cash to OHorizons Global, LLC, subject to higher and better offers. Charles Alfred Cuprill, Esq., at Charles A Cuprill, P.S.C. Law Offices, serves as counsel to the Debtor. ================= X X X X X X X X X ================= LATAM: World Bank Warns Job Market Weakening -------------------------------------------- EFE News reports that the job market in Latin America has begun to weaken after four straight years of an economic downturn, according to the report "Jobs, Wages, and the Latin American Slowdown," presented by the World Bank in Peru. The World Bank Group's chief economist for Latin America and the Caribbean, Augusto de la Torre, said his department found that workers have been leaving the labor market in recent years, "a trend particularly marked among young men and the less educated," according to EFE News. The report noted that the slowdown has not significantly increased the rate of unemployment in the region as yet, but has caused the rate of participation in the work force to drop, "above all when young people stop looking for jobs," EFE News relays. "The more they go back home to live or return to school without earning any wages, the more the incomes of poor households suffer," EFE News quoted Mr. De la Torre as saying. The report said the loss of employment among unqualified workers is "much higher" than among qualified workers, while the latter are seeing more of a drop in their salaries than the former, notes EFE News. The economist warned that job quality in Latin America is deteriorating as wage earners become self-employed or move from bigger corporations to smaller companies, EFE News notes. "Most of the countries in the region are adjusting to the new reality of lower revenues from exports, and the key will be to make the adjustment as smoothly as possible in order to avoid excessive losses in terms of business and employment," Mr. De la Torre said, EFE News relays. The report said that these consequences have significant political repercussions and recommends establishing social safety nets to ease the impact of the economic slowdown among the poorer sectors, EFE News notes. The International Monetary Fund estimated in its projections that Latin America will experience a recession this year, with a 0.3 percent drop in GDP, EFE News relays. The IMF/World Bank annual meeting is taking place in the Peruvian capital, EFE News adds. *********** 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, Valerie U. Pascual, Julie Anne L. Toledo, and Peter A. Chapman, Editors. Copyright 2015. 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 or Nina Novak at 202-362-8552. * * * End of Transmission * * *