/raid1/www/Hosts/bankrupt/TCRLA

/raid1/www/Hosts/bankrupt/TCRLA_Public/171226.mbx T R O U B L E D C O M P A N Y R E P O R T E R L A T I N A M E R I C A Tuesday, December 26, 2017, Vol. 18, No. 255 Headlines B A R B A D O S * SANDALS RESORTS: Opens New Resort in Barbados B R A Z I L ODEBRECHT VIII/IX: S&P Gives Prelim CCC+ Rating on Tranche 1 Notes ODEBRECHT OFFSHORE: S&P Lowers 2022 Senior Notes Rating to 'D' E L S A L V A D O R GRUPO UNICOMER: S&P Affirms BB- Corp Credit Rating, Outlook Stable J A M A I C A * FLY JAMAICA: Suffers Delays on Flights From Georgetown to NY M E X I C O BANCO G&T CONTINENTAL: S&P Affirms 'BB-/B' Global Scale ICRs CULIACAN: Moody's Withdraws Ba2 Rating on MXN498MM Bank Loan ELEMENTIA SAB: Moody's Revises Outlook to Pos.; Affirms Ba2 CFR GRUPO IDESA: S&P Downgrades CCR to 'B' on Weaker Credit Metrics * MEXICO: Arrests Ex High-Ranking PRI Official in Corruption Probe P U E R T O R I C O ADLER GROUP: Claims Assessment, Creditor Talks Delay Plan Filing BKH ACQUISITION: S&P Cuts CCR to CCC-, Outlook Negative INMOBILIARIA LEGUISAMO: Enters into Stipulation with Triangle REO RFI MANAGEMENT: Jan. 18 Plan Confirmation Hearing PUERTO RICO ERS: S&P Cuts Pension Funding Bonds Rating to 'D' V E N E Z U E L A CITGO PETROLEUM: Crystallex Pursues Firm as Country Misses Payment VENEZUELA: Oil Basket Closing on a High Going into Christmas Week - - - - - =============== B A R B A D O S =============== * SANDALS RESORTS: Opens New Resort in Barbados ----------------------------------------------- RJR News reports that Sandals Resorts International has opened a brand new resort and reopened another property that had been shuttered for months. Sandals Royal Barbados welcomed its first guests and reopened the Sandals Grande Antigua, according to RJR News. Chairman and founder of Sandals Resorts International Gordon "Butch" Stewart is claiming that Sandals Royal Barbados is a "game-changer," the report notes. The new resort complements the adjacent 280-room Sandals Barbados, which opened in January 2015, the report relays. In Antigua, the Sandals Grande Antigua in St. Johns is again open for business, following a three-month closure to renovate and refresh the property, the report notes. Sandals Grande Antigua has 373 rooms and suites and employs 700 workers -- 95 per cent are Antiguan or are from the Eastern Caribbean, the repot relays. Yet another property owned by Mr. Stewart, Beaches Turks & Caicos, reopened for business on December 14, following a three-month closure due to damage from Hurricane Irma, the report notes. Stewart said the entire resort has been refreshed and new features have been introduced, the report says. He indicated that Beaches Turks and Caicos has reopened ahead of pace, the report adds. =========== B R A Z I L =========== ODEBRECHT VIII/IX: S&P Gives Prelim CCC+ Rating on Tranche 1 Notes ------------------------------------------------------------------ S&P Global Ratings assigned its preliminary 'CCC+' rating on Odebrecht Drilling Norbe VIII/IX LTD's (ODN VIII/ IX) tranche 1 senior secures notes. The outlook is stable. S&P also assigned a recovery rating of '4' to the notes, reflecting its expectation for 30%-50% recovery in the event of a default. This transaction involves the operation of two ultra-deep water drilling vessels, Norbe VIII and Norbe IX, which receive fixed- price charters and service payments from Petroleo Brasileiro S.A. -- Petrobras (BB-/Stable/--), under agreements maturing in July 2021 and October 2021, respectively. S&P believes these contracts constitute a key project component for the debt rating on ODN VIII/ IX 's proposed notes because they offset merchant risk until the maturity of the rated tranche 1 in 2021. More recently, on Dec. 12, 2017 OOG and its subsidiaries obtained all legal approvals to restructure their financial debt via extrajudicial reorganization plans. The plan was presented to the Brazilian court in May 2017, and includes the proposal to perform an exchange of the existing notes with $500 million tranche 1 6.35% senior notes due in 2021 and $590.9 million tranche 2 7.35% senior notes (6.35% + 1% PIK) due in 2026. The tranches share the security package, including, among other assets, the proceeds of the charter and services agreements, collection accounts, and reserve accounts. However we consider tranche 2 to be subordinated, given its junior ranking in right of payment and liquidation, and its inability to call the early termination of the transaction before the full payment of tranche 1. The outlook is stable, reflecting S&P's belief that the two assets involved in the transaction will operate with an average uptime above 90%, resulting in a DSCR of 1.16x in the next 12 months. ODEBRECHT OFFSHORE: S&P Lowers 2022 Senior Notes Rating to 'D' --------------------------------------------------------------- S&P Global Ratings downgraded the ratings of Odebrecht Drilling Finance LTD's (OODFL) senior notes due 2022 to 'D' from 'CC'. S&P said, "Subsequently we withdrew the rating on the notes, which will cease to exist following the exchange. At the same time, we assigned a preliminary 'CCC+' rating on OODFL's tranche 1 senior secured notes due 2022. The outlook is positive. We also assigned a recovery rating of '4' to the proposed notes (reflecting our expectation of 30%-50% recovery in the event of default)." On Dec. 22, 2017 OODFL announced the exchange of its existing senior notes due 2022 for (i) $506.4 million tranche 1 6.72% senior notes due in 2022 and (ii) $1390.7 million tranche 2 7.72% (6.72% plus 1% PIK) senior notes due in 2026. S&P said, "We lowered the ratings following this announcement, which we view as a distressed exchange, given the nature of the extrajudicial reorganization and our view that the bondholders will receive less value than originally promised. Consequently, we withdrew the ratings on the notes." On Dec. 12, 2017, OOG and its subsidiaries obtained all legal approvals to restructure their financial debt via extrajudicial reorganization plans. The plan was presented to the Brazilian court in May 2017, and includes a proposal to perform an exchange of the existing notes with $506.4 million tranche 1 6.72% senior notes due in 2022 and $1390.4 million tranche 2 7.72% senior notes due in 2026. The tranches share the security package, including, among other all assets, the proceeds of the charter and service agreements, collection accounts, and reserve accounts. However, S&P considers the second tranche to be subordinated debt, given its junior ranking in right of payment and liquidation, and its inability to call the early termination of the transaction if it misses payments before the full payment of tranche 1. S&P said, "The outlook is positive, reflecting our expectation a one in three chance of an upgrade in the next 12 months if the project is able to generate sufficient cash flow to constitute and fund a $40 million cash reserve account, which could provide resilience in a downside case risk. "We could upgrade the transaction if the project is able to constitute and fund the $40 million cash reserve account from the cash flows generated by the three operating vessels. Cash should flow from its three vessels until the end of the original charter and service agreements (up to 2022), which are fully pledged to the repayment of the first tranche of notes due in 2022, and, if that is successfully realized, we could raise the rating on the notes. "We could downgrade the transaction if operational performance is at subpar, for example if uptime is below 85%, while costs increase by 10%. In this case, the transaction would likely default within 12 months, after depleting in the project's DSRA in the form of cash and first demand guarantees." ==================== E L S A L V A D O R ==================== GRUPO UNICOMER: S&P Affirms BB- Corp Credit Rating, Outlook Stable ------------------------------------------------------------------ S&P Global Ratings affirmed its 'BB-' global scale corporate credit rating on Grupo Unicomer Co. Ltd. (Unicomer). S&P also affirmed its 'BB-' issue-level rating on the company. The outlook remains stable. During 2017, Unicomer has posted somewhat weaker than expected EBITDA margins and credit metrics, reflecting slower economic growth and lower consumption in Central America and the Caribbean, as well as higher selling, general, and administrative expenses (SG&A) costs related to new store openings and additional debt to fund its expansion program. S&P said, "However, we continue to expect the company's operating and financial performance to remain in line with the current rating, and expect it to post a gradual improvement in profitability and debt reductions in the coming quarters. Specifically, we expect Unicomer's adjusted EBITDA margin and debt to EBITDA to remain close to 12% and 2.0x, respectively, in the next 12 months. Additionally, following the bond issuance in March 2017, the company refinanced a significant portion of its short-term debt, significantly improving its debt maturity profile and strengthening its liquidity position." ============= J A M A I C A ============= * FLY JAMAICA: Suffers Delays on Flights From Georgetown to NY -------------------------------------------------------------- RJR News reports that Fly Jamaica is suffering major delays in flights from Georgetown, Guyana to New York for the second time in four months due to routine maintenance and technical problems. Passengers complained bitterly about the delay on social media and criticized the carrier for not keeping passengers abreast, according to RJR News. An airline representative said that the delays began since Dec, 20 and the delay may continue until Dec. 25, the report notes. The carrier hopes that the schedule would be back to normal by today, Dec. 26, the report adds. =========== M E X I C O =========== BANCO G&T CONTINENTAL: S&P Affirms 'BB-/B' Global Scale ICRs ------------------------------------------------------------- S&P Global Ratings affirmed its 'BB-' long- and 'B' short-term global scale issuer credit ratings (ICRs) on Guatemalan bank Banco G&T Continental S.A. (Banco G&TC). The stand-alone credit profile (SACP) is 'bb'. The outlook remains stable. The ratings on Banco G&TC continue to reflect its solid market position, mainly in the corporate lending segment, as one of the largest financial institutions in the country. The ratings also incorporate the bank's projected risk-adjusted capital (RAC) ratio of 5.2% for the next two years, reflecting the expected capital injection from its shareholders in the first quarter of 2018 of $40 million, its internal capital generation capacity, and no dividend payment in 2017. S&P's assessment also takes into account the bank's balance sheet position with above-average dollarization and its stable funding base that relies on retail deposits. Banco G&TC's deposit-based funding is one of its main strengths that also provides it with enough liquidity to face short-term obligations. S&P said, "The ratings on the Republic of Guatemala (foreign currency: BB-/Stable/B) limit those on Banco G&TC because we don't believe the bank would withstand a stress scenario for capital and liquidity, considering the significant exposure that it has in Guatemala in terms of government bonds and loans to local enterprises. We rarely rate financial institutions above the sovereign long-term rating because, during sovereign stress, the latter's regulatory and supervisory powers may restrict a bank's or financial system's flexibility, and because many of the same economic factors that cause sovereign stress also affect banks." CULIACAN: Moody's Withdraws Ba2 Rating on MXN498MM Bank Loan ------------------------------------------------------------- Moody's de Mexico has withdrawn the Ba2/A2.mx ratings on the Municipality of Culiacan bank loan with Banorte with an original amount of MXN498 million. RATINGS RATIONALE The ratings have been withdrawn following the December 14, 2017 prepayment by the municipality. The loan had 6 years outstanding on its original 20 year maturity. The principal methodology used in these ratings was Rating Methodology for Enhanced Municipal and State Loans in Mexico published in July 2017. The period of time covered in the financial information used to determine Municipality of Culiacan's rating is between 01 January 2012 and December 31, 2016 (source: financial statements of Municipality of Culiacan). Moody's National Scale Credit Ratings (NSRs) are intended as relative measures of creditworthiness among debt issues and issuers within a country, enabling market participants to better differentiate relative risks. NSRs differ from Moody's global scale credit ratings in that they are not globally comparable with the full universe of Moody's rated entities, but only with NSRs for other rated debt issues and issuers within the same country. NSRs are designated by a ".nn" country modifier signifying the relevant country, as in ".za" for South Africa. For further information on Moody's approach to national scale credit ratings, While NSRs have no inherent absolute meaning in terms of default risk or expected loss, a historical probability of default consistent with a given NSR can be inferred from the GSR to which it maps back at that particular point in time. For information on the historical default rates associated with different global scale rating categories over different investment horizons. ELEMENTIA SAB: Moody's Revises Outlook to Pos.; Affirms Ba2 CFR --------------------------------------------------------------- Moody's Investors Service changed Elementia S.A.B. de C.V.'s outlook to positive from stable. At the same time, Moody's affirmed the Ba2 corporate family rating. "The change in Elementia's outlook reflects a stronger than anticipated credit profile following the acquisition of a controlling stake of US cement company Giant Cement and Moody's view that recent capacity expansion in Mexico and maintenance works at Giant's plants, ensure further improvements during 2018" said Sandra Beltran, AVP -- Analyst at Moody's. RATINGS RATIONALE Elementia's Ba2 rating reflects its track record of de-levering following sizeable investments and acquisitions. The reduction in leverage not only evidences the company's ability to integrate new businesses but its commitment to improve its credit profile following acquisitions. The rating is also supported by its solid market position in Latin America and diverse product diversification. Balancing these positives is the volatile nature of the construction segment and raw materials, resulting in business cyclicality. Event risk given the high acquisitive profile of the company also constrains the rating. In December 2016, Elementia closed the acquisition of a 55% stake and control in US cement company Giant Cement Holding Inc. The acquisition was funded with the proceeds from a rights offering, about USD305 million debt outstanding at Giant were refinanced at Elementia's level with proceeds from a committed syndicated credit line that was used as a bridge loan. Therefore, its credit profile and liquidity deteriorated. However, as of September 30, 2017, adjusted by Moody's Debt-to-EBITDA of 4.6 times was below the 5.0 times Moody's were anticipating by the time the acquisition was closed. Moreover, Moody's expect leverage to continue to decline towards 3.7 times by the end of 2017 and below 3.5 times in 2018. Anticipated strong operating performance in the upcoming year supports Moody's expectations of improved credit metrics. In July 2017, Elementia concluded its capacity expansion in the Mexican cement plant at Tula. The expansion added 1.5 million tons of capacity per year for a total amount of 3.5 million tons per year in Mexico. Therefore, Moody's expect the division to have around 10% revenue growth in 2018, as the additional capacity ramps up. Profitability should remain high at around 40% EBITDA margin, following the recent recovery. Since the end of 2016, EBITDA margin weakened due to increase in energy and fuel costs and the ramp up of the expansion capacity at the Tula plant. Profitability has surged during the second half of the year, as Elementia internally sourced clinker that was previously acquired from third-parties during the startup of grinding operations, as part of the ramp-up at Tula. In the US, recent investments also support revenue growth and better profitability going forward. Due to financial distress of former controlling group, Giant plants lacked proper maintenance for several years. Therefore, Elementia set 2017 as a transitional year, with operations constantly being interrupted by maintenance works, in order to bring assets back to industry standards, implying investments in both capex and opex, still focusing in reaching nominal capacity at Giant plants. For 2018, Elementia expects to invest some USD90 - 120 million in maintenance and bolt-on expansions capex, still focusing in reaching nominal capacity at Giant plants. Additionally, opex will remain high as Elementia undergoes commercial efforts to regain customers and market share. Additionally, the company plans to reopen a 259 million ton per year plant in Indiana in the 1Q18, that remained closed due to capacity rationalization. Main challenges for the upcoming year, include political instability in some of Elementia's main markets that could affect investment and consumption. In Mexico - Elementia's still largest market accounting for 44% of total revenues in 2017 - and Colombia; 2018 presidential elections make future economic policy uncertain. Also in both markets, modest oil prices have kept public spending subdued since 2015, a trend Moody's expect to continue in 2018. In addition to low oil prices and presidential elections, in Mexico infrastructure growth will remain subdued as investors take "wait and see" attitude towards NAFTA negotiations. Somewhat offsetting the weak infrastructure sector is the more stable residential and commercial construction that should continue to support cement demand -a sector in which Elementia has historically been focused, as there is currently, ample availability of mortgage loans and private-bank credit in the country. Also, remittances in Mexico are strong, following a more than 30% peso depreciation in the last three years, ultimately benefiting cement demand. Furthermore, the Odebrecht scandal that started in Brazil, has spread through-out the region, with still uncertain implications for countries with more positive prospects like Peru. Conversely, business prospect in the US are positive. Currently, the US cement market has positive volume and pricing growth dynamics. Since the economic downturn in 2007, housing starts have consistently grown at a CAGR of 12.3% in 2009 -- 2015. However, there is still room for improvement as current housing starts still lag behind pre -- crisis levels. Also evidencing positive outlook in the US is the Architecture Billing Index (ABI), an index that sets 50 points as threshold with anything above it reflecting a positive trend in architecture billings. As of October 2017, the ABI in the North East and South regions of the US, where Giant plants are located, was 54 and 50.8, respectively. Overall, Elementia's liquidity is strong, but tight covenant compliance is affecting Moody's assessment. The company's cash in hand reached USD323 million (vs. USD190 million as of YE16) as of September 2017 compared to current portion of long term debt of USD62 million. A strong liquidity will continue to be mainly supported by additional cash related with the recent start-up of the Tula operations expansion, soon to restart operations at the Indiana facility (Building Systems) and as capex requirements continue to gradually decline to around USD90 - 120 million in 2018 and to around USD60 - 80 million the subsequent years. During 2017, Elementia remained focused in refinancing the USD305 million bridge loan used to refinance Giant's debt. As of December 2017, the company successfully concluded the refinancing, resulting in a comfortable maturity profile. In 2018, debt maturities amount USD15 million, USD32 million in 2019 and USD56 million from 2020 to 2022. The next relevant debt related payment is until 2025, when the USD425 million global bond matures. Since the bulk of Elementia's debt is the global bond denominated in US dollars, the company has swaped a portion of the principal to Mexican pesos to better match cash generation. After giving effect to derivatives, around 66% of Elementia's debt is denominated in Mexican pesos and the balance in US dollars. Also supporting liquidity is the MXN 4,900 million (USD260 million) committed credit line due in 2020, that is currently fully available. The main threat to Elementia's liquidity profile is the tight compliance with covenants under the syndicated credit line. As of September, Elementia's reported net debt to EBITDA was 2.99 times, close to the 3.3 times covenant. However, starting October 2017, the threshold under the covenant fell to 2.75 times, creating uncertainty on Elementia's ability to comply with it. Moody's expect the company to reduce covenant compliance risk, considering its commitment to maintain a strong financial profile. Elementia's rating outlook is positive reflecting that in the upcoming year, credit metrics should materially improve as incremental capacity ramps up and the company fully integrates Giant operations, concluding its plan to reach nominal capacity in the US. Elementia's ratings could be upgraded if the company's profitability improves as a result of a successful implementation of the plan to increase efficiency in the US cement plans and additional capacity in Mexico's cement division ramps up according to Elementia's plan. Quantitatively, an upgrade would require adjusted EBITA margin above 10% on a sustained basis and adjusted debt/EBITDA declining towards 3.0 times. An upgrade will also require positive free cash generation and adequate cushion under existing covenants. The outlook could stabilize if the company's margins deteriorates such that EBITA margin falls below 10%, or if leverage increases, for example due to a debt-finance acquisition, above 3.5x on a sustained basis with no clear plan to de-lever. Likewise, the ratings could be downgraded if as a result of a weaker than anticipated operating environment, leverage remains close to 4.0 times on a sustained basis. A deterioration in liquidity or an acquisition that is not accretive could also lead to a downgrade. Elementia is a major manufacturer of semi-finished copper, alloy, fiber cement, cement, and plastic products with consolidated revenues of MXN25.1 billion for the 12 months ended September 30, 2017. The company has three business segments: metals, building systems (including fiber cement products and plastics) and cement. Although the majority of Elementia's operations are in Mexico, it also has presence in the US and in seven Latin American countries (Peru, Ecuador, Bolivia, Costa Rica, Honduras, El Salvador and Colombia). Elementia is majority owned and controlled by the Del Valle family through Grupo Empresarial Kaluz (not rated). Grupo Carso (not rated) is the second largest shareholder and a 22.93% float is listed in the Mexican Stock Exchange. The principal methodology used in this rating was Global Manufacturing Companies published in June 2017. GRUPO IDESA: S&P Downgrades CCR to 'B' on Weaker Credit Metrics --------------------------------------------------------------- S&P Global Ratings lowered its corporate credit rating on Grupo Idesa S.A. de C.V. (IDESA) to 'B' from 'B+'. S&P said, "At the same time, we lowered our issue-level rating to 'B' from 'B+' on the company's $300 million 144A/Reg. S senior unsecured notes due 2020. The '4' recovery rating on the company's debt, indicating our expectation of an average (30%-50%) recovery in the event of a payment default, remains unchanged. The outlook on the corporate credit rating is stable." The downgrade reflects IDESA's persistently high leverage metrics, driven by weak petrochemical spreads. It also takes into account lower volume levels as a result of feedstock shortages of ethylene oxide (EO), the company's less than adequate liquidity, and their strategic decision not to tap the market with an initial public offering (IPO) and use proceeds to reduce debt. These conditions diverged from S&P's baseline expectations. S&P said, "The stable outlook on IDESA reflects our expectation that oil price recovery will have a positive impact on the company's petrochemical and chemical products. It also reflect our expectation that the company will receive material cash inflows from its JVs that will help it to gradually deleverage, but the company will face challenges and uncertainties in terms of sustainable debt reduction." * MEXICO: Arrests Ex High-Ranking PRI Official in Corruption Probe ------------------------------------------------------------------ Jose Luis Gonzalez at Reuters reports that Mexican authorities arrested a former high-ranking official of President Enrique Pena Nieto's party in a corruption investigation in the northern state of Chihuahua, the state's governor said. The arrest extends a streak of corruption allegations dogging the ruling Institutional Revolutionary Party (PRI), with four former governors arrested on such charges this year, according to Reuters. Entrenched corruption is expected to be a key issue in the runup to Mexico's next presidential election in 2018, the report notes. The report relays that Alejandro Gutierrez, who was the adjunct secretary to the presidency of the PRI, was arrested in a joint operation by state and federal police, Chihuahua Governor Javier Corral wrote in a post on Facebook. The Chihuahua prosecutor's office accused Gutierrez of participating in a "sophisticated scheme" to divert public funds of MXN250 million pesos ($13 million) earmarked for educational programs in 2016, the report relays. Gutierrez will present himself before a judge, the office said in a statement obtained by the news agency. Mexican newspaper Reforma published reports on an alleged Chihuahua corruption scheme to funnel the money into the PRI's campaign fund, through avenues such as fake contracts for workshops for parents and expensive software. The reports were based on testimony to prosecutors by former state finance minister Jaime Herrera that the paper obtained. The report relays that Mr. Gutierrez' arrest took place in Coahuila. Mr. Gutierrez rejected allegations against him in an interview with Mexican newspaper Vanguardia, saying he was considering suing for defamation, the report notes. "I am thinking, I will have to look into it, if I initiate some legal proceeding," he said. "I do not know, I repeat to you, I did not know not even one official, nor ex-official, of finances . . . I see things that are absolutely false," he added. The report relays that Mr. Gutierrez' arrest "contributes to the clearing up of the crimes of political corruption that have been attributed to the former governor, Cesar Duarte Jaquez," said Corral, of the National Action Party. The government is determining whether others should be held responsible for the funneling of funds to PRI coffers in 2016, Corral added, the report notes. In March, a Mexican judge issued an arrest warrant for Duarte on suspicion of embezzlement, the report recalls. Mr. Corral has said he is a fugitive from justice, the report says. A spokesman for the PRI did not immediately respond to a request for comment. The PRI was routed in 2016 regional elections, losing several of its bastions, including the states of Veracruz, Tamaulipas and Quintana Roo, as voters expressed discontent over a series of graft scandals, the report adds. ====================== P U E R T O R I C O ====================== ADLER GROUP: Claims Assessment, Creditor Talks Delay Plan Filing ---------------------------------------------------------------- Adler Group, Inc., asks the U.S. Bankruptcy Court for the District of Puerto Rico to extend the Debtor's exclusivity period and deadline to file a disclosure statement and plan of reorganization by 60 days. The Debtor also asks that the deadline to procure the votes under the plan be also extended for a term of 60 days after the order granting the approval of the Disclosure Statement is entered. The Debtor has moved forward in its reorganization process and is in compliance with all of its duties under the Bankruptcy Code and the Guidelines of the U.S. Trustee. The Debtor attended the meeting of creditors, which was held and closed, and appeared at the status conference. The Debtor assures the Court that its request for extension is made in good faith, with no intent to cause unreasonable delay in the administration of this case. This is the first extension of time requested by the Debtor to present its Disclosure Statement and Plan. The same is for the benefit of the Debtor and all its creditors. The deadline to submit proofs of claim expired on Oct. 24, 2017. The Debtor is still in the process of conducting an assessment of its claims in order to further negotiations with key creditors that are necessary in order to propose the Plan. According to the Debtor, it is indispensable for it to be able to reconcile all claims in order to propose a complete, viable and effective plan that accounts for all claims. Due to the need of reconciling all timely filed claims and concluding negotiations with creditors, Debtor is not in a position, at this juncture, to file its Disclosure Statement and Plan. The Debtor states that its request for extension of time of the exclusivity period will allow Debtor to conclude the reconciliations and negotiations with creditors. About Adler Group Inc. Adler Group Inc. owns the Caguas Military property located at Carr 189 km 3.1 (interior) Rincon Ward, Gurabo Puerto Rico, which is valued at $3 million. It holds inventory and equipment worth $513,870. For 2015, the Company posted gross revenue of $1.61 million 2015 and gross revenue of $1.91 million for 2014. The Debtor sought protection under Chapter 11 of the Bankruptcy Code (Bankr. D.P.R. Case No. 17-02727) on April 20, 2017. The petition was signed by Jose Torres Gonzalez, authorized representative. At the time of the filing, the Debtor disclosed $3.52 million in assets and $4.43 million in liabilities. The case is assigned to Judge Mildred Caban Flores. The Debtor hired MRO Attorneys at Law, LLC, as bankruptcy counsel. BKH ACQUISITION: S&P Cuts CCR to CCC-, Outlook Negative ------------------------------------------------------- S&P Global Ratings lowered its corporate credit rating on Puerto Rico-based BKH Acquisition Corp. to 'CCC-' from 'CCC+'. The outlook is negative. S&P said, "Concurrently, we lowered our issue-level ratings on the company's first-lien revolving and term loan facilities to 'CCC-' from 'CCC+'. The recovery rating is unchanged at '3', indicating our expectation for meaningful recovery in the event of a payment default (50% to 70%; rounded estimate: 55%). "We also lowered the issue-level rating on the company's second- lien term loan to 'C' from 'CCC-'. The recovery rating remains '6', indicating our expectations for a negligible (0% to 10%; rounded estimate: 0%) recovery. "The downgrade reflects our view that the company could pursue a financial restructuring, including at least some of the company's debt obligations at less than par, within the next few quarters. We believe BKH would face reduced liquidity if it is unable to refinance the $10 million revolving credit facility maturing in August 2018. The company also has a sizable maturity wall in 2019 with a $130 million first-lien term loan maturing in February 2019 and $62 million pay-in-kind (PIK) second-lien term loan maturing in August 2019. "Our negative outlook reflects our view that the company's unsustainable capital structure, approaching maturities, and the challenging market environment in Puerto Rico, could lead to the company considering a distressed exchange in the coming quarters. We would lower the rating if the company announces a distressed restructuring or if we believe a default is inevitable because the company will be unable to meet its principal and/or interest payments." Although unlikely in the next year, a higher rating would be contingent on improvements in operating performance we believe are sustainable, enabling the company to address its upcoming debt maturities across the capital structure at par. This would likely be dependent on considerable improvements in economic, fiscal, and social conditions in Puerto Rico. S&P said, "Concurrent with the downgrade, we lowered our issue- level rating on the company's first lien $10 million revolver and $129.5 million first-lien term loan facilities to 'CCC-' from 'CCC+' and on the $61.8 million second-lien term loan to 'C' from 'CCC-'. "Our simulated default scenario contemplates a default in the first half of 2018 as a result of the poor economic situation in Puerto Rico, recently worsened by Hurricane Maria. We believe the company will continue to face competitive pressures, increased protein commodity costs, and an inability to pass through these higher costs in product prices. We believe that in a default scenario, the company would likely close unprofitable restaurants, which would result in lower revenues offset by some level of return to current EBITDA margins. As such we estimate an emergence EBITDA of $22.5 million, to which we apply a 4x multiple to derive the gross enterprise value. We have valued the company on a going concern basis using a 4x multiple applied to our projected emergence-level EBITDA to reflect limited geographic diversity and dependence on the weak economy of Puerto Rico." -- Assumed Default Year: 2018 -- Emergence EBITDA: $22.5 million -- Multiple: 4x -- Gross recovery value: $90.0 million -- Est. admin expenses (5%): $4.5 million -- Estimated first-lien secured debt claims: $150.6 million -- Value available for first-lien secured claims: $85.5 million --Recovery Range: 50%-70%; rounded estimate: 55% -- Estimated second-lien secured debt claims: $65.1 million -- Value available for second-lien secured debt claims: $0 million --Recovery Range:0%-10%; rounded estimate: 0% INMOBILIARIA LEGUISAMO: Enters into Stipulation with Triangle REO ----------------------------------------------------------------- Inmobiliaria Leguisamo Inc. filed an amended plan of reorganization with the U.S. Bankruptcy Court for the District of Puerto Rico. The debtor's liability for administrative expenses, estimated in the amount of $8,000.00, will be paid in full on or before the effective date, unless agreed to a less favorable treatment between the Debtor and the holder of the claim. The debtor scheduled total priority claim of creditor CRIM in the amount of $487.25, will be paid pro-rata no later than five years from the filing of the petition. The secured claim of the Department of Treasury in the amount of $998.57 will be paid in full no later than 60 months from the confirmation of the plan. The debtor has reached a stipulation agreement with Triangle REO PR Corp. regarding the treatment of the latter's claim, subject to the following terms and conditions: 1. Property located at Lot A State Road Rd PR-352 km 4.5 Leguisamo Ward Mayaguez, Puerto Rico. (a) Establish a payment plan for 24 months with a monthly payment of $1,500.00 and a final payoff of $180,000.00. 2. Property located at Lot B State Rd PR-352 KM 4.5 Leguisamo Ward Mayaguez, Puerto Rico. (a) Establish a payment plan for 24 months with a monthly payment of $300.00 and a final payoff of $40,000.00. 3. Since Triangle final, unappealabe foreclosure judgment, a default clause must be included to the effect that any default with the Stipulation shall result in the immediate surrender of the collaterals and/or consent to immediate relief from stay and/or discharge injunction without a hearing. 4. If the debtor obtains additional financing in excess of the aforemention payments, such surplus will be forwarded to Triangle REO PR Corp. 5. The Debtor shall cure delinquent property taxes over Triangle's collateral. The unsecured portion of Triangle REO PR Corp's claim in the amount of $2,151,806.92 will receive no distribution as per liquidation value is zero. The secured portion of CRIM's claim in the amount of $6,406.80, will be paid pro rata during the life of the plan. The unsecured portion of CRIM's claim, filed on 06/20/2016, in the amount of $465.41 will be paid pro-rata payment monthly during the life of the plan for five years. The debtor will be able to execute the plan through the income to be derived by the daily operation of the business and sale of property. A full-text copy of Inmobliaria Leguisamo's amended plan is available at: http://bankrupt.com/misc/prb16-00123-212.pdf About Inmobiliaria Leguisamo Inmobiliaria Leguisamo Inc. owns a commercial building in Mayaguez, Puerto Rico. The Debtor sought protection under Chapter 11 of the Bankruptcy Code (Bankr. D.P.R. Case No. 16-00123) on Jan. 13, 2016. The Debtor is represented by Nydia Gonzalez Ortiz, Esq., at Santiago & Gonzalez Law, LLC. RFI MANAGEMENT: Jan. 18 Plan Confirmation Hearing ------------------------------------------------- Judge Benjamin A. Kahn of the U.S. Bankruptcy Court for the Middle District of North Carolina conditionally approved the amended disclosure statement filed by RFI Management, Inc., on November 9, 2017. January 17, 2018 is fixed as the last day for filing written acceptances or rejections of the Plan. A hearing on final approval of the amended disclosure statement and for the hearing on confirmation of the plan is set for January 18, 2018. December 29, 2017 is fixed as the last day for filing and serving written objections to the disclosure statement and confirmation of the plan. RFI Management is represented by: James C. White, Esq. 100 Europa Dr. Suite 401 Chapel Hill, NC 27517 About RFI Management RFI Management, Inc., works as a subcontractor installing flooring products and wall materials, principally in hotel properties across the United States and in Puerto Rico. RFI Management filed a Chapter 11 bankruptcy petition (Bankr. M.D.N.C. Case No. 17-80247) on March 29, 2017. Edward Rosa, President, signed the petition. At the time of filing, the Debtor estimated assets and liabilities between $100,000 and $500,000. James C. White, Esq., and Michelle M. Walker, Esq., at Parry Tyndall White, serve as counsel to the Debtor. Padgett Business Services of NC is the Debtor's accountant. No official committee of unsecured creditors has been appointed in the Chapter 11 case. PUERTO RICO ERS: S&P Cuts Pension Funding Bonds Rating to 'D' ------------------------------------------------------------- S&P Global Ratings has lowered its rating to 'D' from 'CC' on the Puerto Rico Employees Retirement System (ERS) senior pension funding bonds, series A, series 2008B, and taxable series 2008C following a default in scheduled interest payments. The Puerto Rico Fiscal and Financial Advisory Authority, as fiscal agent for the Commonwealth of Puerto Rico, has reported that interest on the bonds payable on Dec. 1, 2017, had not been made as of Dec. 13, 2017. On Dec. 20, 2017, the court in the ERS's Puerto Rico Oversight, Management, and Economic Stability Act Title III case issued an oral ruling ordering the payment of certain adequate protection payments until the court enters a ruling on pending litigation relating to the bonds. S&P Global Ratings has not at this point received confirmation that interest payments have been made current. S&P Global Ratings has not received indication from the Puerto Rico Fiscal Agency and Financial Advisory Authority that interest payments have been made current. ================= V E N E Z U E L A ================= CITGO PETROLEUM: Crystallex Pursues Firm as Country Misses Payment ------------------------------------------------------------------ Tom Hals at Reuters reports that mining company Crystallex International Corp said Venezuela failed to honor a settlement and urged a federal judge to allow it to seize control of U.S. refiner Citgo Petroleum Corp, which is owned by the country's state oil company. Canada-based Crystallex won a 2016 international arbitration award of $1.2 billion against Venezuela, which has refused to pay, according to Reuters. The company had been trying to collect by seizing shares of Citgo's U.S. parent company, which is owned by Venezuelan state oil company PDVSA, the report notes. Last month, Crystallex said it settled with cash-strapped Venezuela, but the company's lawyer said that deal fell through, the report notes. "They said they'd make a payment to us and didn't," Robert Weigel, a lawyer for Crystallex, told the court, the report relays. Crystallex's lawyers told U.S. Judge Leonard Stark in Wilmington, Delaware, they had an "avalanche of evidence" that proved PDVSA and Venezuela were one and the same, including official PDVSA tweets with the hashtag #PDVSAesVenezuela, Spanish for "PDVSA is Venezuela," the report relays. As a result, they were seeking to attach, or seize, PDVSA's shares in PDV Holding Inc., Citgo's Delaware-incorporated parent, the report notes. If Crystallex succeeds, the case could open the way for more than a dozen companies to pursue Citgo to collect on arbitration claims over assets that were nationalized under Venezuela's late socialist leader Hugo Chavez, the report discloses. PDVSA's lawyer argued that Crystallex could not pursue the state oil company's assets because PDVSA was not a party to the arbitration, the report says. Judge Stark seemed concerned that Venezuela or PDVSA could try to sell the PDV Holding stock before he ruled, the report notes. He also wondered if a ruling for Crystallex would put PDVSA on the hook for all Venezuelan debts and whether discovery was needed to determine Caracas' day-to-day control of the company, the report relays. Judge Stark did not say when he might rule. Venezuela's President Nicolas Maduro said in November he wanted to restructure all foreign debt, which includes some $60 billion in outstanding sovereign and PDVSA bonds, the report discloses. Legal experts said Houston-based Citgo might be pursued by creditors if the country broadly defaults on its debts, but seizing it could prove difficult, the report relays. Venezuela agreed last month to pay Crystallex $25 million by Nov. 30, according to documents on the website of the Canadian monitor for Crystallex's Ontario insolvency proceeding, the report recalls. Venezuela agreed to pay another $15 million by Dec. 31 and about $400 million by the end of 2020, according to the monitor's documents. Venezuela agreed to additional payments that were not disclosed, the report adds. As reported in the Troubled Company Reporter-Latin America on Nov. 10, 2017, Moody's Investors Service downgraded CITGO Petroleum Corporation's Corporate Family Rating to Caa1 from B3; its Probability of Default rating to Caa1-PD from B3-PD; and its senior secured and unsecured ratings on term loans and global notes and IRB's to Caa1 (LGD4) from B3 (LGD4). The rating on Citgo Petroleum's senior secured revolving credit facility was downgraded to B3 (LGD4) from B2 (LGD3). VENEZUELA: Oil Basket Closing on a High Going into Christmas Week ------------------------------------------------------------------ undpi.org reports that the price Venezuela receives for its mix of medium and heavy oil rose going into the final week of 2017. According to figures released by the Venezuela Ministry of Petroleum and Mining, the average price of Venezuelan crude sold by Petroleos de Venezuela S.A. (PDVSA) during the week ending December 22 rose to $56, the report notes. As reported in the Troubled Company Reporter-Latin America on Dec. 22, 2017, Caribbean360.com said that corruption in the Venezuelan state oil industry, denounced by the government itself, and with former ministers and senior managers behind bars, is the latest evidence that, in the country with the largest oil reserves on the planet, the industry on which the economy depends is falling apart. There was a drop "in the production of crude oil, of a million barrels per day," economist Luis Oliveros, who teaches at the Metropolitan University, told IPS, according to Caribbean360.com. In December 2013, output stood at 2,894,000 barrels per day compared to 1,837,000 in November 2017, according to the Organization of the Petroleum Exporting Countries (OPEC), the report notes. * * * As reported in the Troubled Company Reporter-Latin America, Robin Wigglesworth at The Financial Times related that Venezuela appeared to have made a crucial bond repayment in late October. The Latin American country and its state oil company PDVSA have failed to make several debt payments in recent weeks, the report noted. But the most important one was an $842 million instalment due Oct. 29 on a PDVSA bond maturing in 2020, which, unlike most of the other overdue debts, had no 'grace period' that allowed for 30 days to clean up any arrears without triggering a default, the report notes. As reported in the Troubled Company Reporter-Latin America on Dec. 21, 2017, Moody's Investors Service has withdrawn the Caa3 rating of the US$5 billion, 6.5% Government of Venezuela bond due on Dec.29, 2036 (ISIN USP97475AQ39). On Nov. 16, 2017, S&P Global Ratings lowered on Nov. 13, 2017, its long- and short-term foreign currency sovereign credit ratings on the Bolivarian Republic of Venezuela to 'SD/D' from 'CC/C'. The long- and short-term local currency sovereign credit ratings remain at 'CCC-/C' and are still on CreditWatch with negative implications. S&P said, "At the same time, we lowered our issue ratings on Venezuela's global bonds due 2019 and 2024 to 'D' from 'CC'. Our issue ratings on the remainder of Venezuela's foreign currency senior unsecured debt remain at 'CC'. Finally, we affirmed our transfer and convertibility assessment on the sovereign at 'CC'." *********** 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. * * * End of Transmission * * *