/raid1/www/Hosts/bankrupt/TCRLA

/raid1/www/Hosts/bankrupt/TCRLA_Public/170920.mbx T R O U B L E D C O M P A N Y R E P O R T E R L A T I N A M E R I C A Wednesday, September 20, 2017, Vol. 18, No. 187 Headlines A R G E N T I N A ALGODON WINES: Obtains $693K From Sale of Preferred Stock ARAUCO ARGENTINA: S&P Affirms Then Withdraws B Corp Credit Rating B R A Z I L BANCO DO ESTADO: S&P Affirms 'BB-' Global Scale ICR JBS SA: Names Jose Batista Sobrinho as CEO PETROBRAS GLOBAL: S&P Rates Proposed $2BB Sr. Unsec. Notes 'BB-' D O M I N I C A DOMINICA: Hurricane Maria Inflicts "Mind-Boggling" Devastation H A I T I HAITI: Transportation Strike Over Taxes Shuts Down Much of Country J A M A I C A JAMAICA: Dropping Low Value Coins M E X I C O MEXICO: Powerful Quake Leaves Nearly 140 Dead CYDSA SAB: S&P Assigns BB/B Corp. Credit Ratings, Outlook Stable P U E R T O R I C O BANESCO USA: Fitch Hikes IDR to BB- & Revises Outlook to Stable BAILEY'S EXPRESS: Allowed to Continue Using Cash Until Sept. 30 HUMANA HEALTH: S&P Lowers CCR to 'BB+', Outlook Negative TOYS "R" US: Collapses Into Bankruptcy T R I N I D A D & T O B A G O PETROTRIN: TTTI Calls for Action on Oil Scandal X X X X X X X X X LATAM: Hurricane Maria Headed for Virgin Islands and Puerto Rico - - - - - ================= A R G E N T I N A ================= ALGODON WINES: Obtains $693K From Sale of Preferred Stock --------------------------------------------------------- Between Aug. 11, 2017, and Aug. 31, 2017, Algodon Wines & Luxury Development Group, Inc., issued 69,348 shares of Series B Convertible Preferred Stock for cash proceeds of $693,480 to accredited investors, as disclosed in a Form 8-K report filed with the Securities and Exchange Commission. Holders of Series B Preferred will be entitled to, among other things, an annual dividend, liquidation preference, conversion to common stock of the Company upon certain events, redemption if not previously converted to common stock, and voting privileges. For this sale of securities, no general solicitation was used, no commissions were paid, and the Company relied on the exemption from registration available under Section 4(a)(2) and Rule 506(b) of Regulation D of the Securities Act of 1933, as amended. An initial Form D was filed on April 7, 2017, and an amended Form D was filed on June 15, 2017, June 29, 2017, July 12, 2017, July 27, 2017, and Sept. 13, 2017. About Algodon Wines Through its wholly-owned subsidiaries, Algodon Wines & Luxury Development Group, Inc. -- http://www.algodongroup.com/-- invests in, develops and operates real estate projects in Argentina. AWLD operates a hotel, golf and tennis resort, vineyard and producing winery in addition to developing residential lots located near the resort. The activities in Argentina are conducted through its operating entities: InvestProperty Group, LLC, Algodon Global Properties, LLC, The Algodon - Recoleta S.R.L, Algodon Properties II S.R.L., and Algodon Wine Estates S.R.L. AWLD distributes its wines in Europe through its United Kingdom entity, Algodon Europe, LTD. Marcum LLP, in New York, issued a "going concern" qualification on the consolidated financial statements for the year ended Dec. 31, 2016, citing that the Company has incurred significant losses and needs to raise additional funds to meet its obligations and sustain its operations. These conditions raise substantial doubt about the Company's ability to continue as a going concern. Algodon Wines reported a net loss of $10.04 million on $1.52 million of sales for the year ended Dec. 31, 2016, compared to a net loss of $8.27 million on $1.86 million of sales for the year ended Dec. 31, 2015. As of June 30, 2017, Algodon Wines had $8.07 million in total assets, $4.14 million in total liabilities, $4.80 million in series B convertible redeemable preferred stock and a total stockholders' deficiency of $880,859. ARAUCO ARGENTINA: S&P Affirms Then Withdraws B Corp Credit Rating ----------------------------------------------------------------- S&P Global Ratings affirmed its 'B' long-term corporate credit ratings on Arauco Argentina. The outlook is stable. Immediately after, we withdrew the ratings on Arauco Argentina at the company's request. At the time of withdrawal, Arauco Argentina's credit rating reflected our view that the company would sustain a manageable capital structure while managing to remain a moderately strategic subsidiary of its parent. The recent intercompany loan for the bond payment reinforces that view. Currently, Arauco Argentina's debt is mainly composed by a $250 million intercompany loan due 2022 granted by its parent Celulosa Arauco, while its short term- debt represents less than 10% of its total debt and consists purely of pre-export financing. In addition, it reflected our expectation that although, the more competitive environment in the Brazilian pulp market will put some pressure on the company's performance, the company will still benefit from its strong market position in the argentine pulp and panels businesses, thereby achieving stable financial metrics with debt to EBITDA of around 3.6x-4x and funds from operations (FFO) to debt of around 20% by end of 2017. =========== B R A Z I L =========== BANCO DO ESTADO: S&P Affirms 'BB-' Global Scale ICR --------------------------------------------------- S&P Global Ratings affirmed its 'BB-' long-term global scale and 'brA+' national scale issuer credit ratings on Banco do Estado do Rio Grande do Sul S.A. (Banrisul). The outlook on both scales remains negative. The ratings on Banrisul reflect our belief that the Fiscal Responsibility Law in Brazil, banking regulations, and Banrisul's corporate governance protect the bank against the state's possible intervention. Still, the higher risk of operating in RS weighs on the bank's revenue stability and, consequently, on its business position given the state's prolonged weak finances. S&P said, "We also base our ratings on the bank's asset quality metrics, which remain at similar levels to 2016 despite the bank's efforts to increase the participation of consumer lending in its loan portfolio, as consumer loans have been presenting better asset quality metrics. Additionally, the bank has maintained its capitalization level, given that our forecasted risk-adjusted capital (RAC) ratio for the next 18 months should remain around 5.4%. At the same time, Banrisul continues to present a diversified retail-based funding structure and adequate levels of liquidity." JBS SA: Names Jose Batista Sobrinho as CEO ------------------------------------------ Paul Kiernan at The Wall Street Journal reports that Brazilian meatpacking giant JBS SA named founder Jose Batista Sobrinho, 84, to replace his jailed son as chief executive, defying shareholder calls for outside management as the family-run company faces a mounting corruption scandal. JBS also promoted the former CEO's 26-year-old son, Wesley Batista Filho, to a "global leadership team" tasked with helping the aging founder make decisions, the company said, according to The Wall Street Journal. Mr. Batista Sobrinho, who started JBS as a small-town slaughterhouse in 1953, said in a press release he was "proud" to reassume the top job in the company and has "a lot of confidence in the performance of our leadership," the report notes. But the shuffle is likely to strike many observers as a tone-deaf and potentially risky attempt by the Batista family to cling to control of a company that now employs some 235,000 people, the report relays. It came days after Brazilian police arrested JBS's former CEO, Wesley Batista, and his brother, former chairman Joesley Batista, both sons of Mr. Batista Sobrinho, the report discloses. Authorities allege the brothers used insider trading to profit from a plea deal earlier this year in which they admitted to bribing nearly 2,000 Brazilian politicians while they grew JBS into the world's largest meat company, the report notes. Brazil's Federal Police said Wesley and Joesley Batista had used the company to make illegal trades of currency derivatives and JBS shares, the report relays. The brothers, and the company, denied wrongdoing. A chorus of Brazilian politicians, including President Michel Temer, who was implicated in the brothers' plea bargain, have sought to portray Wesley and particularly Joesley Batista as unrepentant criminals, the report notes. Mr. Temer has previously denied any wrongdoing. JBS's largest non-Batista shareholder, Brazilian state development bank BNDES, has called for professional management since details from the brothers' plea bargain emerged in May, the report adds. As reported in the Troubled Company Reporter-Latin America on July 31, 2017, S&P Global Ratings affirmed its 'B+' global scale corporate credit ratings on JBS S.A. and JBS USA and its 'brBBB-' national scale rating on JBS. S&P also affirmed the 'B+' senior unsecured debt ratings on JBS and JBS USA and the 'BB' senior secured debt ratings on JBS USA. At the same time, S&P removed all ratings from CreditWatch. The outlook is negative. PETROBRAS GLOBAL: S&P Rates Proposed $2BB Sr. Unsec. Notes 'BB-' ---------------------------------------------------------------- S&P Global Ratings assigned its 'BB-' debt rating on Petrobras Global Finance B.V.'s (PGF's) proposed senior unsecured notes due January 2025 and January 2028, in an expected amount of up to $2.0 billion, subject to market conditions. PGF is a wholly-owned finance subsidiary of Brazilian oil and gas company Petroleo Brasileiro S.A. - Petrobras (BB-/Stable/--). Petrobras will unconditionally and irrevocably guarantee the notes. The state- owned oil company will use this issuance for general corporate purposes, including refinancing of upcoming maturities. The company has also announced two concurrent liability management transactions in order to purchase or exchange certain bonds that will mature in 2019, 2020 and 2021. We don't expect changes to the company's net leverage following those transactions. "Our 'BB-' corporate rating on Petrobras reflect its improved liquidity position and governance standards after the "Lava Jato" corruption investigation as well as ongoing debt refinancing, which has allowed the company to extend debt maturities and to maintain a solid cash position. We consider Petrobras' business model as its main strength, underpinned by sound scale, quality, and operational efficiency of its exploration and production segment. The capital expenditure (capex) cuts and the implementation of the new pricing policy have also contributed to improved cash flow generation prospects and strengthened capital structure. "Also, the ratings continue to reflect Petrobras' ultimate relationship with its controlling shareholder, the Brazilian government, and the latter's incentives, capacity, and tools to support the company. We believe there is a very high likelihood that the government would provide timely and sufficient extraordinary support to Petrobras in the event of distress. "As a result, according to our government-related entity criteria, absent any sovereign rating action, while our current assessment of extraordinary government support remains unchanged, a downgrade of Petrobras would occur if its stand-alone credit profile were to fall to 'b-' or lower (from the current 'bb-') or if we were to downgrade Brazil by more than one notch, given that we don't believe the company can have a higher rating than its controlling shareholder." Any upgrade of Petrobras, on the other hand, could result from the successful execution of the divestment program, the effectiveness and sustainability of the new governance standards and pricing policy, and the higher capex efficiency, resulting in adjusted net debt to EBITDA consistently at 3.0x-3.5x, funds from operations to net debt at 20%-25%, and free operating cash flow to net debt of 10%-15%. RATINGS LIST Petroleo Brasileiro S.A. - Petrobras Corporate credit rating BB-/Stable/-- Rating Assigned Petrobras Global Finance B.V. Senior unsecured =============== D O M I N I C A =============== DOMINICA: Hurricane Maria Inflicts "Mind-Boggling" Devastation -------------------------------------------------------------- Caribbean360.com reports that hurricane Maria, one of the fastest intensifying hurricanes on record, has left widespread devastation in Dominica, with Prime Minister Roosevelt Skerrit reporting that the country has so far lost "all what money can buy and replace". But his biggest fear is the loss of life and injuries that have resulted from the Category 5 hurricane which passed right over the island, according to Caribbean360.com. Hurricane Maria brought 160 mile-per-hour winds that blew off roofs -- among them the roof of Prime Minister Skerrit's official residence, the report notes. Communications were knocked out and Prime Minister Skerrit, who had been communicating via Facebook, said the "initial reports are of widespread devastation," the report relays. "So far, the winds have swept away the roofs of almost every person I have spoken to or otherwise made contact with. The roof to my own official residence was among the first to go and this apparently triggered an avalanche of torn away roofs in the city and the countryside," Prime Minister Skerrit wrote, the report says. "My greatest fear for the morning is that we will wake to news of serious physical injury and possible deaths as a result of likely landslides triggered by persistent rains." Prime Minister Skerrit said that once the all-clear is given, the search for the injured and those trapped in the rubble will begin. "I am honestly not preoccupied with physical damage at this time, because it is devastating . . . indeed, mind boggling. My focus now is in rescuing the trapped and securing medical assistance for the injured. "We will need help, my friend, we will need help of all kinds," the Dominican leader wrote, the report notes. Prime Minister Skerrit said it was too early to speak of the condition of the air and seaports, but he suspected they would both be inoperable for days to come, the report relays. Prime Minister Skerrit is, therefore, trying to solicit the support of friendly nations and organizations with helicopter services, so he can see the destruction and determine what is needed, the report notes. Hurricane Maria, which developed from a storm to a Category 5 hurricane in just over a day, weakened briefly overnight to Category 4 status before regaining strength, and battered Guadeloupe, the report adds. Reuters reported a senior French Civil Protection official saying that while Martinique escaped largely unscathed, a communications blackout with Guadeloupe meant it would be several more hours before damage there could be assessed, the report relays. Hurricane Maria was expected to hit the Virgin Islands -- still recovering from Hurricane Irma which hit two weeks ago -- last Sept. 19 afternoon and Puerto Rico after. ========= H A I T I ========= HAITI: Transportation Strike Over Taxes Shuts Down Much of Country ------------------------------------------------------------------ Trinidad Express reports that much of Haiti has come to a halt because of a transportation strike over new taxes proposed by the government. Most Haitians do not have private cars and they get around on motorcycle taxis or the often elaborately painted vans and trucks known as "tap taps," according to Trinidad Express. But none were available. Most shops were closed, as were schools because students could not get to class, the report notes. Government offices were technically open but most employees could not get to work, the report relays. Unions called the strike because of proposed new taxes on driver licenses, gas and property, among other things, the report says. President Jovenel Moise was out of the country to attend the U.N. General Assembly but has said the money will go back to the public in the form of services and new infrastructure, the report adds. ============= J A M A I C A ============= JAMAICA: Dropping Low Value Coins --------------------------------- Caribbean360.com reports that Jamaica's one-cent, 10-cent and 25- cent coins will soon be no more. Information Minister Ruel Reid has disclosed that the coins will be pulled from circulation, according to Caribbean360.com. Speaking to reporters at post-Cabinet press briefing, he said Cabinet took the decision in keeping with the Bank of Jamaica (BOJ) Act which stipulates that the BOJ shall have the power, on giving three months' notice in the Gazette, to call in any notes and coins on payment of the face value, the report relays. On the expiration of the notice, such notes or coins shall cease to be legal tender, the report notes. Minister Reid explained that the decision was taken after an assessment showed that the use of coins had been decreasing since 2005, the report relays. Minister Reid added that details of a cost-efficiency assessment also showed that manufacturing costs consistently exceeded the face value of the coins, the report relays. Once the coins are withdrawn from circulation, the only other coin denominations would be the $1, $5, $10, and $20, the report adds. As reported in the Troubled Company Reporter-Latin America on Feb. 9, 2017, Fitch Ratings affirmed Jamaica's Long-Term Foreign and Local Currency Issuer Default Ratings (IDRs) at 'B' with a Stable Outlook. The issue ratings on Jamaica's senior unsecured Foreign and Local Currency bonds are also affirmed at 'B'. The Outlooks on the Long-Term IDRs are Stable. The Country Ceiling is affirmed at 'B' and the Short-Term Foreign Currency and Local Currency IDRs at 'B'. =========== M E X I C O =========== MEXICO: Powerful Quake Leaves Nearly 140 Dead --------------------------------------------- Agence France-Presse reports that nearly 140 people were killed when a powerful, 7.1-magnitude earthquake struck Mexico on Tuesday, September 19, toppling buildings in the capital and sowing panic on the anniversary of a devastating 1985 quake. The toll could rise further, notes the report. Rescue crews and volunteers in Mexico City -- home to 20 million people -- were clawing through the rubble of at least 49 collapsed buildings looking for survivors and bodies. Mexico City recorded 36 of the deaths, while Morelos state directly south of it saw 64 killed, according to AFP. The others were registered in Puebla (29), a town southeast of the capital, and in Mexico state (nine), which lies just to the west of the capital. National Coordinator for Civil Protection Luis Felipe Puente said a total of at least 138 people died, the report relays. AFP recalls that in a quake exactly 32 years earlier, 10,000 people perished in Mexico City. Memories of that event spurred panic on Tuesday and prompted many to quickly run for safety outdoors when walls around them swayed and cracked. According to Agence France-Presse, the quake -- which occurred in the early afternoon, hours after city authorities had conducted an earthquake drill -- caused damage in the bustling center of the city, and to areas south and west of the capital. Scenes of chaos permeated the city straight after the earth shuddered. Traffic jammed to a standstill before blanked-out stop lights, and anxious people ran between vehicles as ambulances tried to make headway, sirens squealing. Mexico's president, Enrique Pena Neto, said on Twitter he had ordered the evacuation of damaged hospitals "and the transfer of their patients to other medical facilities," AFP relays. He was to hold an emergency coordination meeting after overflying the disaster zone. Mexico is prone to earthquakes, being located in a seismically active region. Its last major quake, on September 7, killed 96 people in the southern part of the country, AFP adds. CYDSA SAB: S&P Assigns BB/B Corp. Credit Ratings, Outlook Stable ---------------------------------------------------------------- S&P Global Ratings said that it had assigned its global scale 'BB' long-term and 'B' short-term corporate credit ratings on CYDSA, S.A.B. de C.V. (CYDSA). The outlook is stable. CYDSA has developed a strategic investment plan during the past few years, which includes the construction of two cogeneration plants, the redesign and renovation of its evaporated salt complex in Coatzacoalcos, and the construction of a new chlorine and caustic soda plant. The company is also expanding its business offerings by starting operations of its hydrocarbon underground storage segment in 2017. The abovementioned factors have helped CYDSA maintain its position as one of the leading producers of chemicals, petrochemicals, and salt in Mexico. In particular, it's engaged in producing refrigerant gases, caustic soda, chlorine, and edible and industrial salt. CYDSA's products serve a wide array of industries, as well as leading and recognized customers in their respective markets, with more than 90% of its revenues generated in Mexico. The company's competitive advantage is further strengthened by its joint venture with Honeywell, which is a global leader in producing specialty refrigerant gases. In Mexico, CYDSA has the exclusive right to distribute Honeywell products through its own logistic network. Honeywell's patents are not accessible to other players, and therefore, are an entry barrier in the market. The company has developed a high degree of vertical integration through the conversion of salt into caustic soda, chlorine, and refrigerant gases. Furthermore, its operating processes have significant savings through its cogeneration plants. It also has the potential to sell--in the near term--surplus capacity to third parties. This has allowed CYDSA to achieve profitability with margins that surpass most of its peers. S&P expects EBITDA margins to be around 24% and 28% in 2017 and 2018, respectively. The aforementioned margin levels also result from an investment plan started in 2013. S&P said, "We expect a weighted average FFO-to-debt ratio for the next three years of about 27%. This is a result of higher cash flow generation and lower capex requirements, which strengthened the company's cash balance and resulted in lower net debt levels. Additionally, we expect CYDSA's EBITDA interest coverage and FFO interest coverage ratios to remain well above 3.5x. "The stable outlook reflects our expectation that CYDSA will post a FFO-to-debt ratio of around 17%, an EBITDA interest coverage ratio around 4.0x, and EBITDA margins well above 20% over the next 12 months. We also believe that the company will continue implementing efficiency initiatives on its facilities and developing strategic processes, while maintaining its market position. "We could lower the ratings if additional leverage, coupled with deteriorating operating performance, consistently weakens key credit metrics; such that FFO to debt falls below 20% and EBITDA interest coverage is below 3.0x on a consistent basis. These metrics could result from large debt-financed strategic projects, higher capex, a deterioration of cash flow generation from a weaker pricing environment, or from lower-than-expected revenue. "We could raise the ratings if the company consistently posts FFO to debt above 30% and EBITDA interest coverage above 6.0x, which could result from higher-than-expected prices of chlorine and caustic soda, expanding operations, and revenue increases from strategic projects." ====================== P U E R T O R I C O ====================== BANESCO USA: Fitch Hikes IDR to BB- & Revises Outlook to Stable --------------------------------------------------------------- Fitch Ratings has upgraded Banesco USA's (BNSC) Long-Term Issuer Default Rating (IDR) to 'BB-' from 'B+' and Viability Rating (VR) to 'bb-' from 'b+'. The Rating Outlook has been revised to Stable from Positive. KEY RATING DRIVERS IDRS AND VIABILITY RATINGS The action reflects BNSC's sustained improvement in business and financial performance, particularly core asset quality and profitability. Further, management continues to execute well on strategic initiatives to diversify the bank's loan and deposit portfolios. BNSC's strong growth in recent years, its concentration in commercial real estate (CRE) loans and South Florida are viewed by Fitch as rating constraints. Fitch believes BNSC's current and expected earnings are satisfactory and in-line with the current rating. During 2016, excluding a provision related to the asset-based loan discussed further below, the company improved its ROA and ROE measures to approximately 65 basis points (bps) and nearly 7%, respectively. Fitch expects full-year 2017 core profitability measures to show continued momentum driven by good efficiency, an asset sensitive balance sheet, and execution on revenue growth initiatives. Over the longer term, Fitch believes large gains in profitability are limited, given the shift to more domestically-sourced deposits, including online CDs, which are higher cost. Fitch views BNSC's credit performance as commensurate with the new rating level and continues to expect improvement over the near term as the bank works down its OREO balances. Fitch calculates BNSC's non-performing assets (NPAs; includes loans 90 days past due and still accruing, accruing TDRs, and OREO) at 1.18% as of second quarter 2017 (2Q17), down from 1.86% as of 2Q16. BNSC's NPA performance is in line with similarly rated institutions. In 4Q16, BNSC experienced a spike in non-accruing loans followed by above average charge-offs in the first half of 2017 (1H17) due to fraud that was uncovered in one asset-based loan. Fitch believes this is an isolated event and asset quality measures excluding this loan show continued improvement year-over-year. Fitch's rating action also incorporates the view that the bank has made significant improvements in risk management, controls, and oversight across its major risk exposures. In April 2016, the bank's Consent Order related to deficiencies in its compliance with BSA and AML laws and regulations was lifted by the FDIC and the Florida Office of Financial Regulation. Fitch recognizes that BNSC's CRE concentration in local markets such as South Florida tends to be above community bank averages. In addition, the CRE concentration could drive modest volatility in NPA measures, but at this stage Fitch believes credit losses should be manageable in the context of the current rating level. BNSC's capitalization is appropriate for its risk profile; however, the lack of access to external capital is considered a rating constraint. As of June 30, 2017, the bank's Fitch core capital/risk-weighted assets ratio was 11.7% and its tangible common equity/tangible assets ratio was 8.92%. Although Fitch considers the capital base sufficient to support risks within the business mix, a return to high loan growth coupled with limited profitability may adversely impact capital ratios. The company's liquidity profile is driven by its large core deposit base that relies on a high volume of international deposits, which make up about 50% of total deposits. The majority of international funding is sourced from Venezuelan depositors who have turned to U.S. banks as a safe haven. These deposits typically have a very low attrition rate, limited rate sensitivity, and provide a stable source of low-cost funding. However, going forward, deposit inflows are expected to be limited and the company may experience some outflows driven by rising inflation in Venezuela. In an effort to reduce reliance on Venezuelan funding, management has been working to grow domestic deposits including strategic initiatives to leverage its affiliation with Banesco companies abroad. BNSC has also demonstrated growth within its new national online deposit platform, providing an additional source of funding. Fitch views the diversification of funding sources positively. Fitch notes that there may be risks to BNSC's Venezuelan depositors seeking other U.S.-based banking institutions in which to deposit their monies in the event there are concerns regarding BNSC or the Banesco Group. However, to date, BNSC has actually benefited from its association with the Banesco brand, despite volatility in Venezuela, as demonstrated by its relatively stable deposit base overall. Fitch notes that depositor behavior has thus far been manageable. In Fitch's view, BNSC's ratings are not immediately affected by deteriorating economic conditions in Venezuela and their impact on Banesco Banco Universal (BBU; VR 'cc') in Venezuela. Although BNSC is affiliated with the Banesco Group and shares common ownership, BNSC does not have a holding company structure in the U.S. therefore there is no direct rating linkage to BBU in Venezuela. Fitch recognizes that BNSC benefits from the "Banesco" brand, its strong recognition in Latin America, and BBU's market-leading position in Venezuela. However, in Fitch's opinion, contagion risk from BBU, which shares the same brand, is limited at this time. SUPPORT RATING AND SUPPORT RATING FLOOR BNSC has a Support Rating (SR) of '5' and Support Rating Floor (SRF) of 'NF'. In Fitch's view, BNSC is not systemically important and, therefore, the probability of support is unlikely. The IDRs and VRs do not incorporate any support. Historically, BNSC's principal shareholders have demonstrated a willingness to provide capital; however, Fitch's rating analysis does not assume capital support from the shareholders. LONG- AND SHORT-TERM DEPOSIT RATINGS BNSC's uninsured deposit ratings are rated one-notch higher than the company's IDR because U.S. uninsured deposits benefit from depositor preference. U.S. depositor preference gives deposit liabilities superior recovery prospects in the event of default. RATING SENSITIVITIES IDRS AND VRS Fitch views BNSC's ratings as well-situated at 'BB-' and believes rating upside is limited given its asset, revenue and geographic concentrations. Over the longer term, however, as the franchise continues to mature, increased loan, deposit, geographic, and/or business line diversity could have positive implications provided the company demonstrates continued enhanced risk management practices and a good credit loss track record while maintaining earnings and capital levels that support positive ratings momentum. The ratings incorporate a moderate level of organic growth. Should BNSC exhibit aggressive organic loan growth relative to peers, negative ratings pressure could build. This risk is further accentuated by Banesco's already significant growth in commercial loans through a relatively benign credit environment. Fitch believes that asset quality improvement will moderate going forward and could even reverse nominally as credit metrics are expected to normalize industry-wide. However, if BNSC's credit trends reverse materially beyond peer levels, particularly if large loans become impaired, negative rating action could be taken. Given BNSC's ties to the Banesco Group and considerable Venezuelan deposit base, if material adverse changes in deposit behavior occur, particularly as a result of a Venezuelan sovereign default, negative rating action could ensue. SUPPORT RATING AND SUPPORT RATING FLOOR BNSC's SR and SRF are sensitive to Fitch's assumption around capacity to procure extraordinary support in case of need. Since BNSC's SR and SR Floor are '5' and 'NF', respectively, there is limited likelihood that these ratings will change over the foreseeable future. LONG- AND SHORT-TERM DEPOSIT RATINGS The ratings of long- and short-term deposits issued by BNSC are primarily sensitive to any change in BNSC's Long- and Short-Term IDRs. PROFILE Banesco USA was established in 2006 by the principal shareholders of the Banesco Group and provides traditional banking services, primarily real estate financing, to retail clients as well as to small-to-medium-sized companies. Services are offered via branches in Miami-Dade County, Broward County, and San Juan, Puerto Rico. Banesco USA is based in Coral Gables, FL. Fitch has taken the following actions: Banesco USA (BNSC) -- Long-Term IDR upgraded to 'BB-' from 'B+'; Outlook revised to Stable from Positive; -- Short-Term IDR affirmed at 'B'; -- Long-term deposits upgraded to 'BB' from 'BB-'; -- Short-term deposits affirmed at 'B'; -- Viability Rating upgraded to 'bb-' from 'b+'; -- Support affirmed at '5'; -- Support Floor affirmed at 'NF'. BAILEY'S EXPRESS: Allowed to Continue Using Cash Until Sept. 30 --------------------------------------------------------------- Judge Ann M. Nevins of the U.S. Bankruptcy Court for the District of Connecticut has entered a third interim order authorizing Bailey's Express, Inc., to use up to $113,821 in funds, which constitute cash collateral of Bankwell Bank, solely to fund the types and corresponding amounts of itemized expenditures contained in the budget. The Debtor's authority to spend cash collateral without further order of the Court issued after notice and hearing or the written consent of Bankwell will automatically expire upon the soonest to occur of (a) September 30, 2017 at 5:00 p.m., or (b) the failure by the Debtor to materially comply with any provision of third interim Order regardless of whether the Debtor has expended the entire amount, which failure is not remedied within three business days after receiving written notice from Bankwell or SAIA, Inc. of such failure. Bankwell is granted a first lien to secure an amount of Bankwell's prepetition claims equal to (a) the amount of Cash Collateral actually expended by the Debtor and (b) an amount equaling the aggregate decline in the value of the Bankwell Prepetition Collateral. In addition to the Replacement Lien, Bankwell will have a priority claim in an amount equal to the amount of cash collateral actually expended by the Debtor pursuant to the Third Interim Order. Likewise, SAIA, Inc., is granted, a lien, subordinate to the security interests held by Bankwell, on the DIP Collateral, but only to the extent that SAIA successfully establishes that SAIA is entitled to impose an interline trust on cash collected by the Debtor. A further hearing has been set to consider continued use of cash collateral on Sept. 27, 2017 at 2:30 p.m. A full-text copy of the Order, dated Aug. 31, 2017, is available at https://is.gd/LWJzL5 About Bailey's Express Headquartered in Middletown, Connecticut, Bailey's Express -- http://www.baileysxpress.com/-- is a Connecticut-based less than truckload carrier. It provides service across the nation and is dedicated in helping Connecticut, Massachusetts and Rhode Island companies market their products throughout the U.S. including Hawaii and Alaska. It has distribution points in Charlotte, Dallas, Denver, Easton, Fontana, Indianapolis, Jacksonville, Memphis, Neenah, Phoenix, Salt Lake City and Toledo. It also provides service to Mexico, Puerto Rico & Canada. Bailey's Express filed for Chapter 11 bankruptcy protection (Bankr. D. Conn. Case No. 17-31042) on July 13, 2017, estimating its assets and liabilities at between $1 million and $10 million. The petition was signed by David Allen, chief financial officer. Judge Ann M. Nevins presides over the case. Elizabeth J. Austin, Esq., and Jessica Grossarth Kennedy, Esq., at Pullman & Comley, LLC, serves as the Debtor's bankruptcy counsel. No creditors' committee has yet been appointed in the case. HUMANA HEALTH: S&P Lowers CCR to 'BB+', Outlook Negative --------------------------------------------------------- S&P Global Ratings said it lowered its long-term counterparty credit and financial strength ratings on Humana Health Plans of Puerto Rico Inc. (HHPPR) to 'BB+' from 'BBB'. At the same time, S&P revised the outlook to negative from stable. "The downgrade reflects the significant strain on HHPPR's capitalization and interest coverage due to weak operating performance in 2016. We believe the company continues to face headwinds that make it unlikely to be able to replenish capital in the next 12 to 18 months. The negative outlook reflects our belief that HHPPR will face ongoing execution risk in maintaining or improving capital moderately beyond current levels. Increased medical cost trends along with weak economic conditions in Puerto Rico continue to hurt operating performance, leading to growing pressure on interest coverage. At year-end 2016, HHPPR reported a net loss of $32 million with an EBIT adjusted return on revenue (ROR) of negative 10.2%. Earned premiums decreased by $105.6 million due to a 20% drop in membership mainly associated with a change in benefits offered in the Medicare business. HHPPR also saw an increase in its medical loss ratio to 95.1% in 2016 from 88.2% in 2015 due to higher claims volume and increased utilization by remaining members. As a result of eroding performance, consolidated capital at year-end 2016 dropped to the 'A' redundancy level from 'AAA' at year-end 2015 per S&P's insurance risk-based capital (RBC) model, with total adjusted capital (TAC) falling to $43 million from $76 million. As of March 31, 2017, HHPPR reported adjusted EBIT of negative $6 million and an ROR of negative 7.6%. As HHPPR continues to bolster its operations, we expect profitability to remain constrained and capital redundancy to diminish further to the 'BBB' level. While HHPPR has no debt outstanding, its financial leverage and interest coverage account for our incorporation of operating leases. Its financial leverage of 15% at year-end 2016 is consistent with our current expectations. Due to its weak operating performance in 2016 and projection for break-even performance, however, interest coverage has fallen materially. S&P said, "We, therefore, are revising our assessment of financial flexibility to less than adequate. If operating performance erodes further from our current projections, diminished financial flexibility could constrain the financial risk profile and pressure the ratings. "The negative outlook on HHPPR reflects our expectation that the company will continue to face performance headwinds and experience capital and earnings volatility, elevated by its geographic concentration in Puerto Rico and small capital base. We expect this to result in break-even earnings in the next 12 months and for capital to be minimally redundant at the 'BBB' level per our risk-based capital (RBC) model. "We may lower our ratings in the next 12 months if negative performance trends persist, resulting in capital adequacy declining below the 'BBB' level per our RBC model or a revaluation of HHPPR's business risk profile; if operating performance is negative for a sustained period leading to interest coverage below 1.5x and further erosion in financial flexibility; or if the absolute level of TAC drops below $25 million. "We may affirm our ratings in the next 12 months if HHPPR reports positive operating performance and can demonstrate capital and earnings stability with capital adequately maintained at the 'BBB' level and TAC above roughly $40 million." TOYS "R" US: Collapses Into Bankruptcy -------------------------------------- Bloomberg News' Dawn McCarty, Tiffany Kary and Daniela Wei report that Toys "R" Us Inc., the ultimate toyland for a generation of postwar baby boomers, filed for bankruptcy thanks to a crushing debt load from a buyout and relentless competition from warehouse and online retailers. Bloomberg News says the retailer, which has 1,600 stores in 38 countries, said its hand was forced after an attempt to restructure out of court sparked a press report about a potential bankruptcy, spooking critical vendors and credit insurers. But it intends to make the best of the situation and revive its business in time for the holiday shopping season. "Chapter 11 was certainly not the company's preferred outcome," the report quoted Chief Executive David Brandon as saying in a court filing. "The timing of all of this could not have been worse." He cited the immediate need to build inventory for the holiday season, which accounts for 40 percent of annual revenue. Thanks to a new $3.1 billion operating loan, the company plans to stabilize operations and reopen supply channels while in bankruptcy, he said. According to the report, Mr. Brandon said the reorganization will focus on investment in marketing, technology, and an in-store experience that will help it compete in the new environment. The bankruptcy filing in Richmond, Virginia, estimated the company has more than $5 billion in debt, which it pays around $400 million a year to service. Much of that is the legacy of a $7.5 billion leveraged buyout in 2005 in which Bain Capital, KKR & Co. and Vornado Realty Trust loaded the company with debt to take it private, Bloomberg News relays. Since then, the Wayne, New Jersey-based chain has struggled to dig itself out. The $3 billion loan, from a JPMorgan Chase & Co.-led syndicate that includes some existing lenders, will fund operations while it restructures the liabilities, according to a company statement, reports Bloomberg News. The funding is subject to court approval. The report further notes that the company doesn't plan to close stores and says its locations across the globe will continue normal operations. It's 1,600 stores, which include Babies "R" Us, are complemented by sales through websites including Toysrus.com and Babiesrus.com. Operations outside of the U.S. and Canada, including about 255 licensed stores, are not part of the Chapter 11 filing, adds Bloomberg News. A Canadian unit intends to seek protection in parallel proceedings. In Australia, Toys "R" Us plans to add another five stores to its existing 39 by Christmas, said Jessica Donovan, a local marketing manager, the report relays. About Toys "R" Us Toys "R" Us, Inc. is an American toy and juvenile-products retailer founded in 1948 and headquartered in Wayne, New Jersey, in the New York City metropolitan area. Merchandise is sold in 880 Toys "R" Us and Babies "R" Us stores in the United States, Puerto Rico and Guam, and in more than 780 international stores and more than 245 licensed stores in 37 countries and jurisdictions. Merchandise is also sold at e-commerce sites including Toysrus.com and Babiesrus.com. On July 21, 2005, a consortium of Bain Capital Partners LLC, Kohlberg Kravis Roberts and Vornado Realty Trust invested $1.3 billion to complete a $6.6 billion leveraged buyout of the company. Toys "R" Us is now a privately owned entity but still files with the Securities and Exchange Commission as required by its debt agreements. The Company's consolidated balance sheet showed $6.572 billion in assets, $7.891 billion in liabilities, and a stockholders' deficit of $1.319 billion as of April 29, 2017. The Company and its subsidiaries posted a net loss of $163 million on $2.206 billion of net sales for the 13 weeks ended April 29, 2017, compared with a net loss of $125 million on $2.319 billion of net sales for the 13 weeks ended April 30, 2016. ================================ T R I N I D A D & T O B A G O ================================ PETROTRIN: TTTI Calls for Action on Oil Scandal ----------------------------------------------- Trinidad Express reports that the Trinidad and Tobago Transparency Institute (TTTI) has called for a speedy conclusion to allegations of massive corruption involving State-owned Petroleum Co. of Trinidad & Tobago and a lease operator. In a statement, the TTTI noted with concern reports arising out of an internal auditor's report and pointing to "allegedly corrupt transactions involving millions of dollars over a period of several months," the report relays. The issue has dominated the public's attention since Opposition Leader Kamla Persad-Bissessar announced, at a United National Congress (UNC) meeting two Sundays ago, that the audit showed Petrotrin was defrauded of some $80 million, allegedly by A&V Oil and Gas Ltd, the report notes. Persad-Bissessar claimed the audit found that A&V had billed Petrotrin for oil never produced, the report adds. As reported in the Troubled Company Reporter-Latin America on April 28, 2017, Moody's Investors Service downgraded Petroleum Co. of Trinidad & Tobago corporate family rating and senior unsecured debt ratings to B1 from Ba3. Simultaneously, Moody's lowered Petrotrin's Baseline Credit Assessment ("BCA") to caa1 from b3. The outlook on the ratings is stable. The rating actions are linked to Moody's April 25, 2017 downgrade of the government of Trinidad & Tobago bond ratings to Ba1 from Baa3, with a stable outlook. ================= X X X X X X X X X ================= LATAM: Hurricane Maria Headed for Virgin Islands and Puerto Rico ---------------------------------------------------------------- Caribbean360.com reports that after causing devastation in Dominica and pounding Guadeloupe, a "potentially catastrophic" Category 5 Hurricane Maria is now headed for the Virgin Islands and Puerto Rico. At 8 a.m., Sept. 19, Hurricane Maria carrying maximum sustained winds near 160 miles per hour, was about 85 miles west of Guadeloupe and 170 miles east of St Croix in the US Virgin Islands, the report notes. It was moving towards the west northwest at 9 miles per hour, the report relays. The National Hurricane Centre (NHC) in Miami said that on the forecast track, the eye of Maria will move over the northeastern Caribbean Sea Sept. 19, and approach the Virgin Islands and Puerto Rico Sept. 20 and Sept. 21. "Maria is a potentially catastrophic Category 5 hurricane on the Saffir-Simpson Hurricane Wind Scale. Some fluctuations in intensity are likely during the next day or two, but Maria is forecast to remain an extremely dangerous Category 4 or 5 hurricane while it approaches the Virgin Islands and Puerto Rico," the NHC said, the report relays. The report discloses that swells generated by Maria are still affecting the Lesser Antilles. Forecasters say hurricane conditions will continue to spread throughout portions of the hurricane warning area in the Leeward Islands, Caribbean360.com relays. Hurricane conditions should spread through the remainder of the hurricane warning area, the report notes. The NHC added that a dangerous storm surge accompanied by large and destructive waves will raise water levels by as much as 7 to 11 feet above normal tide levels in the hurricane warning area near where the center of Maria moves across the Leeward Islands and the British Virgin Islands, the report relays. The report relays that Maria is also expected to produce the following rain accumulations through Thursday Sept. 21, the NHC said: -- Central and southern Leeward Islands - 10 to 15 inches; isolated 20 inches -- US and British Virgin Islands - 10 to 15 inches; isolated 20 inches -- Puerto Rico - 12 to 18 inches; isolated 25 inches -- Northern Leeward Islands from Barbuda to Anguilla - 4 to 8 inches; isolated 10 inches -- Windward Islands and Barbados - 2 to 4 inches; isolated 6 inches -- Eastern Dominican Republic - 4 to 8 inches; isolated 12 inches *********** Monday's edition of the TCR-LA delivers a list of indicative prices for bond issues that reportedly trade well below par. Prices are obtained by TCR-LA editors from a variety of outside sources during the prior week we think are reliable. Those sources may not, however, be complete or accurate. The Monday Bond Pricing table is compiled on the Friday prior to publication. Prices reported are not intended to reflect actual trades. Prices for actual trades are probably different. Our objective is to share information, not make markets in publicly traded securities. Nothing in the TCR-LA constitutes an offer or solicitation to buy or sell any security of any kind. It is likely that some entity affiliated with a TCR-LA editor holds some position in the issuers' public debt and equity securities about which we report. Tuesday's edition of the TCR-LA features a list of companies with insolvent balance sheets obtained by our editors based on the latest balance sheets publicly available a day prior to publication. At first glance, this list may look like the definitive compilation of stocks that are ideal to sell short. Don't be fooled. Assets, for example, reported at historical cost net of depreciation may understate the true value of a firm's assets. A company may establish reserves on its balance sheet for liabilities that may never materialize. The prices at which equity securities trade in public market are determined by more than a balance sheet solvency test. Submissions about insolvency-related conferences are encouraged. Send announcements to conferences@bankrupt.com *********** S U B S C R I P T I O N I N F O R M A T I O N Troubled Company Reporter-Latin America is a daily newsletter co-published by Bankruptcy Creditors' Service, Inc., Fairless Hills, Pennsylvania, USA, and Beard Group, Inc., Washington, D.C., USA, Marites O. Claro, Joy A. Agravante, Rousel Elaine T. Fernandez, Julie Anne L. Toledo, Ivy B. Magdadaro, and Peter A. Chapman, Editors. Copyright 2017. 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 Joseph Cardillo at 856-381-8268. * * * End of Transmission * * *