/raid1/www/Hosts/bankrupt/TCRLA

/raid1/www/Hosts/bankrupt/TCRLA_Public/180214.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, February 14, 2018, Vol. 19, No. 31 Headlines A R G E N T I N A MASTELLONE HERMANOS: Fitch Corrects Dec. 19 Rating Release PAMPA ENERGIA: Fitch Withdraws B+(EXP) Rating on New Sr. USD Notes B R A Z I L DESENVOLVE SP: Fitch Affirms 'BB' LT IDR; Outlook Negative ENTREVIAS CONCESSIONARIA: Fitch Rates New BRL1.0BB Debt 'BB(EXP)' QGOG CONSTELLATION: Fitch Lowers Long-Term IDR to 'CCC' * Fitch Affirms Ratings on Brazilian Banks Owned by Subnationals D O M I N I C A N R E P U B L I C DOMINICAN REP: Hardware Prices & Sales Could Hobble Construction DOMINICAN REPUBLIC: Fitch Rates 2023 Peso Bonds 'BB-' DOMINICAN REPUBLIC: Fitch Rates 2048 USD-Denominated Bonds 'BB-' J A M A I C A JAMAICA: Demonetization at BOJ Effective This Week M E X I C O FINANCIERA INDEPENDENCIA: Fitch Raises IDR to BB; Outlook Stable MEXICO: NAFTA Renegotiation is On Track P U E R T O R I C O KONA GRILL: Wellington Mgmt. No Longer a Shareholder at Dec. 29 KONA GRILL: Wellington Trust Ceases as Shareholder at Dec. 29 LIBERTY CABLEVISION: S&P Affirms 'B' CCR, Outlook Negative RFI MANAGEMENT: Plan Outline Okayed, Plan Hearing on March 1 T R I N I D A D & T O B A G O T&T EXPRESS: Port Chair Unsure of Ferry Resumption V E N E Z U E L A PETROLEOS DE VENEZUELA: Bonds Hit by EMTA Market Move VENEZUELA: Loses Right to Vote at United Nations - - - - - ================= A R G E N T I N A ================= MASTELLONE HERMANOS: Fitch Corrects Dec. 19 Rating Release ---------------------------------------------------------- Fitch Ratings has issued a correction to the ratings release on Mastellone Hermanos Sociedad Anonima published on Dec. 19, 2017. It includes Fitch's "Non-financial Corporate Notching and Recovery Rating Criteria", which was omitted from the original release. The revised release is as follows: Fitch Ratings has upgraded Mastellone Hermanos Sociedad Anonima's Long-Term Foreign and Local Currency Issuer Default Ratings (IDRs) to 'B' from 'B-'. The senior unsecured notes are upgraded to 'B/RR4' from 'B-/RR4'. The Rating Outlook is Stable. The upgrade of Mastellone's ratings is due to the company's solid liquidity position and vastly improved credit metrics as a result of the USD35 million capital injection from Arcor SAIC's (B+/Positive) and Bagley Argentina S.A., Arcor's subsidiary, during 2017. This capital increase further solidifies Mastellone's position as a long-term strategic investment for Arcor. The upgrade also reflects the expected improvement in Mastellone's operating performance because of improved operating performance and the expectation of the continuation of the Macri government's pro-business economic policies following the recent election. More than 90% of Mastellone's sales were made in Argentina during 2017 and the company is highly reliant upon producers of raw milk in the country. KEY RATING DRIVERS Shareholder Support: Fitch factors into Mastellone's rating the financial support from Arcor and Bagley. In December 2015, the two paid USD50 million for a 20.2% stake in Mastellone. Later in that year they increased their participations to 25%. This stake was increased to 38.4% in early 2017 based on a USD35 million capital increase from Arcor and Bagley and further transactions with the Mastellone family. Arcor has a call option for the outstanding corporate stock of Mastellone starting in 2020 and is expected to continue to increase its stake in the company. Low Leverage: The company's credit metrics are strong for the 'B' rating category. Fitch expects gross leverage to decline to 2.5x by 2018 from 3x in 2016 due to increased EBITDA related to price increases, low volume growth, and improved operating efficiencies. The company opened a new dry plant in Trenque Lauquen in 2017 after a total investment of about USD22 million. Fitch expects Mastellone to generate positive FCF despite increased investments in process automation, productivity, packaging, and capacity. Geographical Concentration: Mastellone generates most of its sales in Argentina. Sales outside Argentina as of Sept. 30, 2017 were about 7% in Brazil and Paraguay domestic markets and 1% from exports. The company is exposed to double-digit inflation in Argentina and other direct and indirect sovereign-related risks, including devaluation. Exposure to Currency Risk: Mastellone's debt is USD-denominated and creates currency risk, as company sales are mainly in Argentine pesos. The company has not entered into any agreements to hedge its debt exposure to devaluation risk. Volatility of Raw Milk Production: Mastellone's business is divided between sales to the Argentine and Brazilian and Paraguay domestic markets and exports; the excess between raw milk supply and domestic sales is exported. A shortage of raw milk production could lead to interruption of the company's export and foreign business or an increase in production costs. Strong Business Position: Mastellone is the largest dairy company and the leading processor of dairy products in Argentina. It is first in the fluid milk market regarding physical volume with a market share of approximately 66%. The company maintains the first- and second-place market position in most of its product lines. Its strong market shares allow it to benefit from economies of scale in the production, marketing, and distribution of products. Mastellone purchases about 16% of raw milk production in Argentina, which provides it with a degree of negotiating power. DERIVATION SUMMARY Mastellone is the largest dairy company and the leading processor of dairy products in Argentina. The concentration of Mastellone's operations in Argentine (B/Positive) is a constraining factor for the rating, as is its size. Mastellone displays a weaker position in terms of scale, product diversification, profitability and geographical diversification compared to its international peers such as Fonterra Co-operative Group Limited (A/Stable), Nestle SA (AA/Stable), Sigma Alimentos, SA de C.V. (BBB/Stable) or to Arcor (B+/Positive) in Argentina. Mastellone's gross leverage is low for the 'B' rating category and compares favorably with its peers. During 2016, the median gross leverage ratio was 5.1x for the 'B' rating category in Latin America. The 'B' rating relative to leverage levels of around 3x reflect the weak economic environment in Argentina and risks in that country such as high inflation. Industry risks also have resulted in a more conservative rating than leverage metrics would indicate. KEY ASSUMPTIONS Fitch's Key Assumptions Within Fitch Rating Case for the Issuer -- Revenues grow driven by domestic price increase above inflation in 2017; -- EBITDA margin close to 6% in 2018; -- Capex of around USD23 million in 2017; -- Debt/ EBITDA to 2.5x in FYE18. Key Recovery Rating Assumptions Fitch believes that a debt restructuring would likely occur under stressed economic conditions in Argentina and/or external shocks such as climatic events or lack of access to certain export markets Therefore, Fitch has performed a going-concern recovery analysis for Mastellone that assumes the company would be reorganized rather than liquidated. Key Going-Concern Assumptions -- Mastellone would have going-concern EBITDA of about ARS729 million. This figure is conservative at 40% below the company's LTM EBITDA of ARS1.2 billion, and takes into consideration factors such as climatic events, changes in raw material costs, sourcing and logistic issues, potential strikes or a shutdown of exports markets; -- A distressed multiple of 6.5x due to strong brand and dominant position the Argentina dairy business; -- A distressed enterprise value of ARS4.3 billion (after 10% of administrative claims); -- Total debt of ARS3.5 billion. The recovery performed under this scenario resulted in a recovery level of 'RR1', consistent with securities historically recovering 91%-100% of current principal and related interest. Because of the Fitch's 'RR4' soft cap for Argentina, which is outlined in Fitch criteria, Mastellone's Recovery Rating has been capped at 'RR4', reflecting average recovery prospects. RATING SENSITIVITIES Developments That May, Individually or Collectively, Lead to Positive Rating Action -- Sustained gross leverage of 3.0x or lower could lead to an upgrade of the LC IDR -- Sustained gross leverage of 3.0x or lower plus an upgrade of the 'B' Country Ceiling of Argentina could lead to an upgrade of the FC IDR and senior unsecured notes -- Increased ownership above 50% in Mastellone by Arcor and Bagley could result in positive rating actions on the LC IDR, FC IDR and senior unsecured notes Developments That May, Individually or Collectively, Lead to Negative Rating Action -- A downgrade of Argentina's country ceiling rating; -- Weak liquidity; -- Debt to EBITDA above 4x. LIQUIDITY Mastellone liquidity is strong. The company reported cash and equivalents and short-term investments of about ARS1.6 billion compared to short-term debt of ARS155 million as of Sept. 30, 2017. The total debt of ARS3.5 billion as of the same date is mainly composed of the 12.625% senior unsecured notes (USD200 million) due on July 3, 2021. The notes are callable at 50% of the outstanding principal on July 3, 2018. FULL LIST OF RATING ACTIONS Fitch has upgraded the following ratings: Mastellone Hermanos Sociedad Anonima ompany -- Long-Term Foreign Currency IDR to 'B' from 'B-'; -- Long-Term Local Currency IDR to 'B' from 'B-'; -- Senior unsecured notes to 'B'/RR4' from 'B-/RR4'. The Rating outlook is Stable. PAMPA ENERGIA: Fitch Withdraws B+(EXP) Rating on New Sr. USD Notes ------------------------------------------------------------------ Fitch Ratings has withdrawn its 'B+(EXP)' expected rating on Pampa Energia's proposed senior unsecured local Argentine issued notes due 2022. Fitch assigned the expected rating on June 22, 2017. KEY RATING DRIVERS The rating has been withdrawn as Pampa did not proceed with the senior unsecured notes issue within the previously envisaged timeline. Pampa's other ratings are unaffected by the withdrawal. RATING SENSITIVITIES Rating Sensitivities are not applicable as the ratings have been withdrawn. =========== B R A Z I L =========== DESENVOLVE SP: Fitch Affirms 'BB' LT IDR; Outlook Negative ---------------------------------------------------------- Fitch Ratings has affirmed Desenvolve SP - Agencia de Fomento do Estado de Sao Paulo SA's (Desenvolve SP) Long-Term Foreign and Local Currency Issuer Default Ratings (IDRs) at 'BB' and National Rating Long Term at 'AA (bra)'. The Rating Outlook on the IDRs remains Negative, while the Rating Outlook on the National Long- Term Rating is Stable. KEY RATING DRIVERS IDRs, NATIONAL RATINGS AND SUPPORT RATING The affirmation of Desenvolve SP's IDRs reflects the support of its controller, the State of Sao Paulo (IDRs BB/Negative). However, the Support Rating (SR) of '3' takes into account the moderate likelihood of such support if necessary. Fitch does not assign a Viability Rating to the institution, as it is a company with development characteristics. Sao Paulo's IDRs reflect its strong economy, which accounts for approximately one-third of Brazil's Gross Domestic Product (GDP). The ratings are also based on the state's adequate budgetary performance compared to other Brazilian states classified in the same category and their fiscal autonomy, higher than that of other state entities in the country. The ratings are also supported by the fact that the federal government is Sao Paulo's main creditor. Fitch considers Desenvolve SP to be strategically important for Sao Paulo since it presents a strong integration and because the agency operates primarily as a financing agency of the private sector and of Sao Paulo's municipalities, always with a development bias. Desenvolve SP also acts as a service provider / administrator of development funds that are important to the state. The size of the institution in relation to Sao Paulo's financial capacity reduces the cost of potential government support and increases the possibility for the state to support the agency, according to Fitch. The main objective of Desenvolve SP is to design and promote government programs that develop Sao Paulo's economy through financing lines to municipalities and small and medium-sized enterprises. This objective is aligned with the government's development plan, reviewed annually. Given the more challenging operating environment and declining disbursements since 2016, Desenvolve SP has been focusing mainly on innovative companies. Desenvolve SP's financial profile has no direct rating implications, but it has remained broadly stable since Fitch's last annual review. Underwriting standards are adequate for risk assessment. Credit assets are the main risks of Desenvolve SP. The remainder of the assets is allocated in its securities portfolio, which presents low risk and is composed, mainly, directly or through funds, by public securities. Investments in equity funds / quotas in companies are still very low. The credit quality indicators of Desenvolve SP are adequate. The ratio of non- performance loans over ninety days fluctuated throughout 2017, benefiting in part from renegotiations and write-offs. As a development agency, Desenvolve SP has limitations regarding the diversification of its funding base. The credit portfolio has been financed mainly by equity or onlendings from official entities, such as the Banco Nacional de Desenvolvimento e Social (BNDES, IDRs' BB'/Negative) and Finep - Inovacao e Pesquisa (IDRs 'BB'/Negative). The agency intends to further diversify its funding through credits/onlending from local and international development institutions. The liquidity indicators of Desenvolve SP were satisfactory throughout 2017. The company is highly capitalized. However, given the limitations of attracting third-party funds, leverage capacity is low. The asset/equity ratio was 1.5x in June 2017, and it is expected that this indicator will not change substantially in the coming years. Desenvolve SP's regulatory capital totaled high 48.6% in June 2017, compared to 53.5% in 2016 and 2015. Historically, Desenvolve SP distributed a large part of its dividends. For the year 2017, the defined policy is to distribute the mandatory minimum of 25%, but that will still be deliberated by the General Assembly.. The operating results have been adequate, relatively stable and compatible with the company's strategy. Its largest source of revenue continues to be the loan portfolio, followed by securities revenues, credit recovery revenues and services provided to Managed Funds. RATING SENSITIVITIES IDRS, NATIONAL RATINGS AND SUPPORT RATING Any changes in the ratings of Sao Paulo or in its capacity or propensity to support Desenvolve SP may lead to a revision of the ratings. Desenvolve SP's IDRs follow their Controller's Outlook, revised to Negative after reviewing the Brazilian Sovereign Ratings Outlook. Fitch has affirmed the following: Desenvolve SP: -- Long-Term Foreign and Local Currency IDRs at 'BB'; Negative Outlook; -- Short-Term Foreign and Local Currency IDRs at 'B'; -- Support rating at '3'; -- National Long-term rating at 'AA (bra)'; Stable Outlook; -- National Short-term rating at 'F1+(bra)' ENTREVIAS CONCESSIONARIA: Fitch Rates New BRL1.0BB Debt 'BB(EXP)' ----------------------------------------------------------------- Fitch Ratings has assigned an expected long-term rating of 'BB(EXP)' to the proposed second issuance of debentures by Entrevias Concessionaria de Rodovias S.A. (Entrevias) in the amount of BRL1.0 billion and maturing in 2030. The Rating Outlook is Stable. On Jan. 17, 2018, Fitch has also assigned the proposed issuance an expected long-term national rating of 'AA(EXP)(bra)' with a Stable Outlook. KEY RATING DRIVERS Summary: Entrevias' ratings reflect the operational profile of the concessionaire, with heavy vehicles representing close to 60% of the traffic in both Sections. The North Section of the toll road, which crosses Ribeirao Preto (SP), has a proven traffic base and should represent two thirds of total traffic. This stretch presents a relatively moderate volatility. The South Section, a more recent stretch, is crucial for region's agricultural production flow. The concession agreement provides for annual tariffs increases that track inflation. The senior debt structure is also indexed to inflation, has six months reserve account and restriction on cash distribution up to 2024, period of higher investments when the issuer has debt service coverage ratios (DSCR) below one, providing adequate liquidity, in line with the rating category. The Stable Outlook reflects Entrevias' strong ability to absorb a demand shock. The concessionaire is able to withstand a 29% traffic decrease in 2024, before defaulting on its debt service, in Fitch's base case. Volume Strongly Linked to Economy [Volume Risk - Midrange] Entrevias' concession is divided in two sections: North and South. The North Section, which crosses Ribeirao Preto, is under management of Vianorte S.A. (Vianorte, not rated) until March 2018 and has a long traffic track record. Fitch estimates this stretch to represent two thirds of total traffic, according to independent engineer report. The South Section, which crosses Marilia, connects the states of Sao Paulo and Parana, and it is crucial for agricultural production flow. Heavy vehicles represent close to 60% of the traffic in both Sections. Brazilian logistics network narrows competition between toll roads, therefore the price elasticity is moderate. Fitch expects Entrevias' volume to perform in line with the overall economic outlook given the high percentage of heavy vehicles in both sections. Tariffs Adjusted By Inflation [Price Risk - Midrange] The concession agreement presents a mechanism that allows inflation pass-through annually, and tariffs on the North Section, under management of Vianorte since 1998, have been readjusted accordingly without great effect on volumes. The regulatory framework is well-defined and provides for enforceable contracts. Political measures that impacted tariff readjustments have been offset by other mechanisms to preserve the financial/economic balance of the contract. Extensive Capex Plan in the Next Years [Infrastructure Development/Renewal - Midrange] Entrevias is expected to undertake a heavy capex plan in order to comply with recently signed concession agreement and to accommodate medium-term traffic forecasts in the South Section of the road, in the region of Marilia. Although the company has a well-developed infrastructure and renewal plan, it does not have an EPC agreement signed with a major construction company. However, the construction works are simple, making it easier to replace the contractor in case it is needed. The concession framework provides for adequate recovery of expenditure via the mechanisms defined in the concession contract to preserve its financial/economic balance. Adequate Debt Structure [Debt Structure - Midrange] The proposed debentures are senior and indexed to inflation, which is the same index used to readjust tariffs, providing a natural hedge to the debt. The structure benefits from a six-month DSRA. The amortization profile is back-loaded and the convent related to dividend distribution is not viewed as a strong protection as it includes equity in its calculation. This weak feature is partially mitigated by the cash distribution restriction until 2024. Financial Profile Entrevias has low leverage, measure by Net Debt/ Ebitda, with a peak of 2,3x in 2024. It presents an average DSCR of 0.9x during the debenture tenor in Fitch's rating case. However, the deficit in cash generation is mitigated the existence of significant retained cash balances in the concessionaire up to 2024 (period of higher investments), by an LLCR of 1.5x and by the long tail of the concession, that only matures in 2047, leading to a PLCR of 2.8x in Fitch's rating case. PEER GROUP Entrevias' closest peer in Fitch's Brazilian portfolio is Econorte (AA-(bra)/Stable). Both toll roads have low leverage, and Entrevias has an average DSCR below 1.0x compared to Econorte at 1.2x. However, this is mitigated by Entrevias' substantial retained cash up to 2024, which allows it to serve its debt during periods of higher investments. Entrevias also has a higher LLCR of 1.5x compared to Econorte at 1.1x. Moreover, Entrevias has a longer tail before concession maturity of 16.5 years, which makes Entrevias reach a PLCR of 2.8x in Fitch's rating case. Econorte's tail is less than two years. RATING SENSITIVITIES Future developments that may, individually or collectively, lead to Positive Rating Action: -- Traffic growth that increases cash balance significantly above Fitch's base case in a sustained fashion. Future developments that may, individually or collectively, lead to Negative Rating Action: -- Traffic growth does not meet Fitch's rating case, reducing the project's liquidity in BRL60 million in an accumulated basis in the following years; -- Sustained two-digit deviations in capex above Fitch's base case. TRANSACTION SUMMARY Entrevias' expects to issue its second debentures issuance for BRL1.0 billion with a 2030 final maturity and a maximum interest rate of IPCA+8.4%, paid annually. The principal amortization schedule is customized, with 89% of principal due between 2026 and 2030. The debt structure benefits from a debt service reserve account of six months and a clauses that provides for cash to be retained within the concessionaire until the 2024. DSCR calculations used to test for the distribution of dividends include capital contribution and must be greater than 1.2 times. There are also limitations on additional indebtedness through the leverage covenant, measured by net debt / EBITDA, which should be lower than 3.75 times. The proposed second issuance will be used to pay the second installment of the fixed grant of BRL416 million (data-base of April 2017), and the remainder will be allocated to investments and operating costs of the company. Fitch Cases Fitch's base and rating cases assumptions reflect the macroeconomic projections of GDP, inflation and interest rates updated according to the Global Economic Outlook report published by the agency on Dec. 4, 2017. The main assumptions of Fitch's base case include: -- Traffic growth of 1.2 times GDP growth; -- Tariff readjustments according to the inflation of the period; -- Investments of BRL2.57 billion between 2017-2026, in nominal terms; -- Equity injection of BRL200 million prior to the debentures disbursement. The main assumptions of Fitch's rating case include: -- Traffic growth of 1.0 time GDP growth; -- Investments of BRL2.72 billion between 2017-2026, in nominal terms. In Fitch's base case, average DSCR is 1.2 time, considering the full debenture tenor, and maximum leverage (net debt/EBITDA) is 2.1 times in 2024, taking into account the years of full operation, which takes place from 2019. LLCR reaches 1.8 time and PLCR, 3.2 times. In Fitch's rating case, average DSCR is 0.9 time, also considering the full debenture tenor, and maximum leverage (net debt/EBITDA) is 2.3 times in 2024, taking into account the years of full operation, which takes place from 2019. LLCR reaches 1.5 time and PLCR, 2.8 times. Asset Description Entrevias is an SPV that owns the concession rights to explore, to invest and maintain 570km of roads in the State of Sao Paulo, divided in seven highway stretches that connect the north of the state of Parana and the southeast of the state of Minas Gerais. The concession was granted by the State Government of Sao Paulo, mediated by Agencia Reguladora de Servicos Publicos Delegados de Transporte do Estado de Sao Paulo (ARTESP), in 2017 for a period of 30 years (maturity in June 2047). QGOG CONSTELLATION: Fitch Lowers Long-Term IDR to 'CCC' ------------------------------------------------------- Fitch Ratings has downgraded QGOG Constellation S.A's (Constellation or HoldCo) Long-Term Foreign and Local Currency Issuer Default Ratings (IDRs) to 'CCC' from 'B'. The Negative Rating Outlook has been removed. The rating action also affects the company's senior secured notes due 2024, which have been downgraded to 'CCC'/'RR4' from 'B'/'RR4' and its senior unsecured notes due 2019, which have been downgraded to 'CC'/'RR6' from 'B'/'RR4'. Constellation's ratings downgrade reflects the company's heightened re-contracting risk and deteriorated liquidity profile resulting from expiring contracts and debt repayment including approximately USD128 million outstanding debt related to Alpha Star. Fitch expects the company's liquidity and profitability to further deteriorate in the short to medium term, contributing to a low visibility of cash flow stability once contracts expire in 2018. The two notch rating differential between Constellation's secured and unsecure notes reflect Fitch's expectation of a below average recovery given default for the unsecured notes. This results from the HoldCo's level debt structural subordination to debt at the operating company's (OpCo) level as well as the presence of prior ranking nature of the senior secured notes. KEY RATING DRIVERS Deteriorating Liquidity Position: Constellation's ratings reflect the company's wakening liquidity position and high dependence on its ability to roll over bank debt. The company's cash and cash equivalents declined to approximately USD278 million as of Sept. 30, 2017 from USD470 million as of Sept. 30, 2016. Constellation has been rapidly burning cash to repay existing debt, including repayment of the outstanding balance of the Alpha Star facility. Constellation provided a corporate guarantee to this OpCo due to the company's inability to re-contract the rig six months earlier to its maturity date. Re-contracting in Weak Market: Constellation's ratings reflect the inability to re-contract its drilling rigs in anticipation of the contract expirations in 2018. Fitch believes it is unlikely that Constellation will be able to materially extend any of its existing contracts under bilateral terms with Petrobras. In addition, the company will face significant competition in the open bidding processes for drilling rig assets given the high availability of drilling rigs globally. Six of the company's midwater (DW) and ultradeepwater (UDW) drilling rigs have contracts that expire in 2018. The company's good operational track record may put them in a favorable competitive position compared to regional peers. Nevertheless, the market for UDW rigs remains highly competitive and larger companies worldwide may offer more aggressive economic terms. Increasing HoldCo Guaranteed Debt: Constellation's holding company level debt is expected to increase during 2018 with the expiration of contracts that have the potential to move OpCo debt to the parent, which will negatively pressure liquidity. As of the last- 12-months (LTM) ended Sept. 30, 2017, QGOG reported EBITDA generation of approximately USD651 million, 23% lower than the same period ended Sept. 30, 2016. Despite the lower EBITDA generation, the company was able to maintain gross leverage at 2.7x, similar to 2016, reflecting the company's significant debt repayment during the year. Leverage could surpass 5.0x in the medium term as contracts expire, assuming they are promptly re- contracted at day rates of USD200,000. Declining Backlog: Constellation reported a backlog of USD2.4 billion as of September 2017, USD0.9 billion when excluding FPSOs where Constellation has only a minor participation, down from USD3.1 billion and USD1.553 billion, respectively as of year-end (YE) 2016. Backlog has weakened as UDW contracts are approaching maturity without clear prospects for re-contracting. If the company is unsuccessful in re-contracting the vast majority of its UDW assets, backlog, excluding FPSOs, is expected to decline to USD75 million by YE2018. Exposure to Challenged Sector: Constellation's 'CCC' rating reflects exposure to the oilfield services sector and a stressed balance sheet. Fitch expects an extended down-cycle and delayed recovery from the agency's initial sector recovery expectations due to low to range-bound oil and gas prices. Constellation's ratings reflect the deep downturn in the offshore drilling services industry as well as the increased uncertainty about the company's medium-term cash flow generation given that the majority of the company's contract expires within the next 12 months. Lower Demand Recovery Expectations: Fitch believes offshore driller recovery will be protracted with an estimated recovery inflection point of second-half 2018. The longer-cycle, higher gross development cost of deepwater projects are anticipated to result in a demand lag. Nevertheless, Fitch considers the relatively high rig carry cost will financially force some market participants to retire uncompetitive floaters, rebalancing supply demand dynamics. Day rates are anticipated to remain challenged and range-bound reflecting the market imbalance and economics required to reactivate stacked rigs. DERIVATION SUMMARY QGOG Constellation's business risk is high and similar to other peers such as Offshore Drilling Holdings (ODH; CC IDR) in Mexico and China-based Anton Oilfield Services Group (B-/Stable). Constellation has a larger asset base than some of its peers, yet its contractual position is similarly weak. Constellation's contracts will expire during 2018, exposing the company to high re-contracting risk. Nevertheless the total debt to rig ratio (considering only UDW rigs) of USD247.5 million per rig compares favorably to USD477 million per rig for ODH, which helps support the one notch differential between Constellation and ODH. Constellation's relatively small backlog compares unfavorably to Transocean (B+ IDR), which is one of the largest global offshore drillers. Transocean reported a strong pro-forma backlog of USD14.35 billion, including the acquisition of Songa Offshore (Not Rated). This stronger backlog when compared with Constellation's USD0.9 billion (USD2.4 billion including FPSOs where constellation has minority participation) support the four notches rating differential between the two companies. Similar to Anton, Constellation executed a debt exchange offer on their outstanding bonds, which improved the companies' amortization profiles and immediate liquidity concerns. Constellation's refinancing exposure and business profile compares positively with Mexican-based ODH and merits a notch differentiation given Constellation's liquidity profile, asset base and lower refinancing risk, although high exposure to re- contracting risk in both cases. Constellation's secured debt and pledged assets relates to the majority of the company's offshore rigs, similar to peers ODH and Anton, diminishing the recovery prospects of senior unsecured creditors at the holding company level. The company's onshore rigs are mostly unencumbered; nevertheless, given the current market conditions for drillers, these units remain less attractive for purposes of recovery prospects. KEY ASSUMPTIONS Fitch's Key Assumptions Within Fitch Rating Case for the Issuer -- WTI and Brent oil price trend towards USD55/barrel and USD57.5/barrel, respectively, in the long-term, in line with Fitch's base case price deck assumptions; -- The majority of QGOG Constellation's off-shore rigs are re- contracted six months after expiration at market day rates of USD200,000; -- Operating expenditures are assumed to remain in line with recently reported levels. RATING SENSITIVITIES Developments That May, Individually or Collectively, Lead to Positive Rating Action -- Although a positive rating actions is not expected, one could be considered to the extent the company successfully extend its average contractual life by renewing its contracts and debt at the OpCo level continue amortizing under the original amortization schedule instead of becoming due as contracts expire. -- An improvement in liquidity and extension of bank and OpCo level debt will also bode well for the company's credit quality. Developments That May, Individually or Collectively, Lead to Negative Rating Action -- Failure to re-contract the companies' MWUDW rigs; -- A continue deterioration in HoldCo's liquidity ratio below 1.0x. LIQUIDITY Liquidity is projected to weaken as QGOG Constellation's cash flow generation will likely deteriorate over the short- to medium-term as its contracts expire and the company faces a competitive global drilling rig industry for re-contracting its units. As of Sept. 30, 2017, QGOG Constellation's cash position decreased to approximately USD278 million from USD450 million reported in 2016. Cash free of liens was USD159.6 million, significantly declining form the USD328 million reported in 2016. The company has rapidly burnt cash to pay debt amortizations, including the payment in full of the outstanding debt related to the OpCo Alpha Star. Cash free of liens can be used to repay existing debt at the HoldCo and compares with short-term debt at the HoldCo of USD152 million related to the working capital loans with Bradesco and interest payments of approximately USD 60 million related to the HoldCo's bonds. Constellation was able to extend the Bradesco loans due in January 2018 by three months. As of Sept. 30, 2017, the company reported unrestricted cash (excluding restricted cash but including short-term investments) of USD238.8 million, which can be used to service OpCos' level debt service. This liquidity position compares unfavorably with the company's debt of USD730 million due in 2018, mainly comprised by USD118 million related to Alaskan Star /Atlantic Star, USD194 million related to Amaralina Star and USD204 million from Laguna Star outstanding debt maturing in July, September and November 2018. FULL LIST OF RATING ACTIONS Fitch has downgraded Constellation's ratings: -- Foreign Currency Issuer Default Rating to 'CCC' from 'B'; -- Local Currency Issuer Default Rating to 'CCC' from 'B'; -- Sr. Secured notes due 2024 to 'CCC'/'RR4' from 'B'/'RR4'; -- Sr. Unsecured notes due 2019 to 'CC'/'RR6' from 'B'/'RR4'. * Fitch Affirms Ratings on Brazilian Banks Owned by Subnationals ---------------------------------------------------------------- Following a Peer Review, Fitch Ratings has affirmed the ratings on the following Brazilian development agencies/banks owned by subnational: -- Agencia de Fomento do Estado do Rio de Janeiro (Agerio) ; -- Desenvolve SP - Agencia de Fomento do Estado de Sao Paulo (Desenvolve SP); -- Banco Regional de Desenvolvimento do Extremo Sul (BRDE). The ratings of all three development agency/banks reflect the institutional support from their controlling shareholders. In Fitch's opinion, all of these issuers are strategically important for the states that control them. The development agencies/banks act as their controlling states' development arms and implement their economic development policies. None of these entities have Viability Ratings. Fitch has taken actions the following ratings: Agerio -- Long-Term Foreign and Local Currency Issuer Default Ratings (IDRs) affirmed at 'C'; -- Short-Term Foreign and Local Currency IDRs affirmed at 'C'; -- Long-term National Rating affirmed at 'C(bra)'; -- Short-term National Rating affirmed at 'C(bra)'; -- Support Rating affirmed at '5'. Desenvolve SP -- Long-Term Foreign and Local Currency IDRs affirmed at 'BB'; Outlook Negative; -- Short-Term Foreign and Local Currency IDRs affirmed at 'B'; -- Supporting Rating affirmed at '3'; -- Long-Term National Rating affirmed at 'AA(bra)'; Outlook Stable; -- Short-Term National Rating affirmed at 'F1+ (bra)'. BRDE -- Long-Term Foreign and Local Currency IDRs affirmed at 'BB'; Outlook Negative; -- Short-Term Foreign and Local Currency IDRs affirmed at 'B'; -- Long-Term National Rating affirmed to 'AA-(bra)'; Outlook Stable; -- Short-Term National Rating affirmed at 'F1+(bra)'; -- Support Rating affirmed at '3'. =================================== D O M I N I C A N R E P U B L I C =================================== DOMINICAN REP: Hardware Prices & Sales Could Hobble Construction ---------------------------------------------------------------- Dominican Today reports that Hardware Stores Association (Asodefe) President Arcenio Garcia said the prices of hardware products have climbed considerably, and sales have plummeted 25%, which he affirms could hobble construction projects. Mr. Garcia acknowledged the country's construction boom, but noted that "the hardware sector's situation was not very favorable in the last year," according to Dominican Today. Mr. Garcia said the rains from November 2017 to January 2018 and the rising prices of rebar as high as 19% could've led to falling sales, the report notes. In a statement, Mr. Garcia said aggregate prices rose 15% due to the increase in fuels and cement has been climbing 10%, the report relays. "Despite the increases, the construction dynamics have continued, but lower than in previous years." he added. DOMINICAN REPUBLIC: Fitch Rates 2023 Peso Bonds 'BB-' ----------------------------------------------------- Fitch Ratings has assigned a 'BB-' rating to Dominican Republic's DOP40 billion notes (equivalent to USD822 million), maturing in 2023. The notes are denominated in Dominican pesos, pay principal and interest in US dollars, and carry a coupon of 8.90%. This is the Dominican Republic's first global bond denominated in Dominican pesos. Proceeds from the issuance will be used for general purposes of the government, including the partial financing of the 2018 budget. KEY RATING DRIVERS The bond rating is in line with Dominican Republic's Long-Term Foreign Currency Issuer Default (IDR) of 'BB-'. As per Fitch's Sovereign Criteria, a bond issued in local currency and payable in foreign currency is assigned an issue rating at the level of the Long-Term Foreign Currency IDR. RATING SENSITIVITIES The bond would be sensitive to any changes in Dominican Republic's Long-Term Foreign Currency IDR. Fitch affirmed Dominican Republic's Long-Term Foreign Currency IDR at 'BB-' with a Stable Outlook on Nov. 16, 2017. DOMINICAN REPUBLIC: Fitch Rates 2048 USD-Denominated Bonds 'BB-' ---------------------------------------------------------------- Fitch Ratings has assigned a 'BB-' rating to Dominican Republic's USD1 billion notes, maturing 2048. The notes have a coupon of 6.5%. Proceeds from the issuance will be used for general purposes of the government, including the partial financing of the 2018 budget. KEY RATING DRIVERS The bond rating is in line with Dominican Republic's Long-Term Foreign-Currency Issuer Default (IDR) of 'BB-'. RATING SENSITIVITIES The bond would be sensitive to any changes in Dominican Republic's Long-Term Foreign Currency IDR. Fitch affirmed Dominican Republic's Long-Term Foreign Currency IDR at 'BB-' with a Stable Outlook on Nov. 16, 2017. ============= J A M A I C A ============= JAMAICA: Demonetization at BOJ Effective This Week -------------------------------------------------- RJR News reports that demonetization of coins at Bank of Jamaica goes into effect this week. The Central Bank will demonetize the one, 10, and 25-cent coins, according to RJR News. The report notes that this means the Bank will cease making these denominations and after a certain time, the coins will no longer be legal tender. However, even after the coins are no longer legal tender for transactions, the Bank of Jamaica will indefinitely continue to redeem them for face value, the report relays. Chief for the Banking and Market Operations Division at the Bank of Jamaica, Natalie Haynes, said the coins are being demonetized after a decrease in demand, the report notes. "When we looked at the data for the period for 2005 and 2016, when we did our analysis, the demand for those coins declined significantly. The 25 cent declined from 11.1 per cent to 1.1 per cent in 2016," she said, the report relays. Meanwhile, the Bank of Jamaica has outlined the changes that will be implemented for transactions involving coins, the report discloses. For cash transactions, the bill will be rounded up or down to the nearest dollar depending on the amount, the report says. "So if you go to the supermarket and your bill is $40.49 cents -- if you're using credit card or a cheque -- then you pay $40.49 but if you are paying cash that 49 cents will be rounded down. But if the transaction is between 50-99 cents, you round up to the next dollar," Mr. Haynes said, the report adds. As reported in the Troubled Company Reporter-Latin America on Feb. 5, 2018, Fitch Ratings has affirmed Jamaica's Long-Term Foreign-Currency Issuer Default Rating (IDR) at 'B' and has revised the Rating Outlook to Positive from Stable. =========== M E X I C O =========== FINANCIERA INDEPENDENCIA: Fitch Raises IDR to BB; Outlook Stable ---------------------------------------------------------------- Fitch Ratings has upgraded Financiera Independencia S.A.B. de C.V. (Findep)'s ratings including the long-term foreign- and local- currency Issuer Default ratings (IDRs) to 'BB' from 'BB-'. The upgrade reflects the sustained improvement of Findep's capital metrics, largely due to recurrent earnings generation and retention, as well as moderate improvements in asset quality indicators amid slower loan growth and a challenging economic environment. A gradually improving funding profile has also been factored in. KEY RATING DRIVERS FINDEP's IDRs, NATIONAL SCALE RATINGS AND SENIOR DEBT Findep's ratings are highly influenced by its well-positioned franchise in the personal loans and microfinance sector in Mexico and its relatively diversified business model. Aside from operations in Mexico, it also has a presence in the United States and Brazil, albeit on a smaller scale. The ratings also reflect Findep's relatively high risk appetite as evidenced by its targeting of low income clients whose payment behavior is usually affected by macroeconomic conditions, which are expected to remain challenging for Mexico in 2018. The ratings also consider Findep's still high, although improving, levels of impairments and charge-offs. Fitch recognizes that non- performing loans (NPLs) at consumer oriented entities are usually high, and Findep's adjusted impairment ratio (impaired loans + net charge-offs from past 12 months / gross loans + net charge-offs FPTM) has exhibited moderate improvement. It fell to 19% and 18.4% as of December 2016 and September 2017, respectively, from an average of 22% from 2013-2015. These relatively improved asset quality ratios reflect Findep's strategy of privileging asset quality instead of loan growth. Reserves for impaired loans are sufficient, but given the entity's riskier portfolio Fitch expects reserves to be higher and cover more than one time impaired loans, which is expected to happen soon. However, Fitch believes it will be challenging for Findep to maintain these improved metrics during 2018, which is expected to be complicated in Mexico, especially given the higher risk profile of the clients Findep targets. Despite slower loan growth, Findep has been able to deliver recurring earnings, increase core earnings and maintain operating profits at adequate levels. Pre-tax income to average assets were 3.1% for 3Q17, while in 2016 and 2015 this ratio fell below 3%. Fitch expects this ratio to fall slightly below 3% at the close of 2017 due to extraordinary costs derived from severance costs, higher loan loss provisions associated to the loan portfolio affected by the earthquakes, costs related to the amortization of its securitized issuance and a negative carry from the placement of the new bond and prepayment of the previous one. Nevertheless, the entity's core earnings will remain relatively strong. Findep's NIM remains high (3Q17: 54.8%), and Fitch believes it provides a solid performance base. The NIM exhibits a relative contraction that was mainly driven by the increased proportion of its subsidiary Apoyo Financiero INC.'s (AFI) loans that operate with lower effective rates, lending products such payroll deductible loans and loans to the formal sectors, which are less risky products/segments, together with higher interest reference rates in Mexico. Capital adequacy has significantly improved since 2016 as a result of slower loan growth coped with a stable internal capital generation, the management's decision to suspend dividends and the temporary impacts of derivatives in the past, although at 3Q17 these impacts were not as positive as previous years. Debt to tangible equity was 4.2 times (x) at 3Q17 and remained practically unchanged as compared to 3Q16 and YE16 but compares favorably against the average from 2013 to 2015 of 6.3x. Fitch recalls that tangible capital is mainly affected by MXN1,587 million of goodwill generated after the acquisitions in 2010-2011, and although it has been consistently enhanced, as of September 2017 it was slightly reduced since intangibles increased from the unsecured global bond placed in 2017. Moderate pressures on capital metrics in the near future could come from loan growth and from higher reserves expected to be charged to capital, as Findep must align with IFRS 9. The entity's proportion of unsecured funding improved significantly to 69% as of September 2017, given that the average proportion from 2013 to 2016 was 44.5%. Placement of a new unsecured global bond in July 2017 aided this improvement. The proceeds of this issuance were used to early amortize its securitized bond, prepay some funding lines and fund growth. This bond is in line with Findep's strategy of increasing its long-term funding tenor in order to reduce its exposure to the challenging operating conditions in Mexico this year. Fitch believes Findep's funding profile has been adequately managed, attempting funding diversification by source and maturity. Its liquidity profile also benefits from the short-term duration of its loan portfolio and therefore higher capability to reprice it. The upgrade of Findep's global debt issuance is in line with the upgrade of its respective corporate rating level, as the debt is senior unsecured. AEF NATIONAL SCALE RATINGS The national ratings of its subsidiary Apoyo Economico Familiar S.A. de C.V., Sofom, E.N.R. (AEF) are based on the likelihood of support from its parent, Findep, if needed. Fitch believes that AEF is a core subsidiary to its parent, given its high strategical and operational integration, and also due to its important participation of Findep's total assets and its sustained contribution to the consolidated results and internal capital generation. Its importance is marked by the growing synergies and also on the complementary business models and the knowledge transfer between the two entities. AEF's loans represent 19.6% of Findep's total loans. Fitch has increased AEF's ratings at the same national scale rating level as its parent. RATING SENSITIVITIES FINDEP's IDRs, NATIONAL SCALE RATINGS AND SENIOR DEBT Findep ratings could be revised downwards if its debt to tangible equity falls and remains steadily above 5.5x and the entity is not capable to maintain the rest of its financial profile, from a weakening profitability and asset quality metrics and a significant change on its funding structure or liquidity management that pressures its profile. Fitch considers there is limited upside potential for an upgrade of Findep's ratings in the medium term. However, a significant and sustained improvement of its overall financial profile, especially if accompanied by an enhanced company profile, could potentially trigger an upgrade. Senior debt ratings would mirror any changes in Findep's IDRs. AEF's NATIONAL SCALE RATINGS Any downside potential for AEF would be driven by a potential downgrade of Findep's ratings and/or a change of the entity's strategic importance to the parent. Fitch has taken the following rating actions: Findep: -- Long-Term foreign and local currency IDRs upgraded to 'BB' from 'BB-'; Outlook Stable; -- Short-Term foreign and local currency IDRs affirmed at 'B'; -- USD250 million senior unsecured notes upgraded to 'BB' from 'BB-'; -- National-scale Long-Term rating upgraded to 'A(mex)' from 'A- (mex)'; Outlook Stable; -- National-scale Short-Term rating upgraded to 'F1(mex)' from 'F2(mex)'. AEF: -- National-scale Long-Term rating upgraded to 'A(mex)' from 'A- (mex)'; Outlook Stable; -- National-scale Short-Term rating upgraded to 'F1(mex)' from 'F2(mex)'. Agerio -- Long-Term Foreign and Local Currency Issuer Default Ratings (IDRs) affirmed at 'C' MEXICO: NAFTA Renegotiation is On Track --------------------------------------- EFE News reports that talks with the United States and Canada on revising the 1994 North American Free Trade Agreement are on solid footing after an initial period of uncertainty, Mexico's finance secretary said. The process is "on track, there is method and dialogue," Jose Antonio Gonzalez told a press conference, according to EFE News. ====================== P U E R T O R I C O ====================== KONA GRILL: Wellington Mgmt. No Longer a Shareholder at Dec. 29 --------------------------------------------------------------- In a Schedule 13G/A filed with the Securities and Exchange Commission, Wellington Management Group LLP, Wellington Group Holdings LLP, and Wellington Investment Advisors Holdings LLP disclosed that as of Dec. 29, 2017, they have ceased to beneficially own shares of common stock of Kona Grill, Inc. A full-text copy of the regulatory filing is available at: https://is.gd/JoSpL7 About Kona Grill Kona Grill, Inc., headquartered in Scottsdale, Arizona, Kona Grill, Inc. currently owns and operates 45 upscale casual restaurants in 23 states and Puerto Rico. The Company's restaurants offer freshly prepared food, attentive service, and an upscale contemporary ambiance. The Company's high-volume upscale casual restaurants feature a global menu of contemporary American favorites, sushi and specialty cocktails. Its menu items are prepared from scratch at each restaurant location and incorporate over 40 signature sauces and dressings, creating memorable flavor profiles that appeal to a diverse group of customers. Its diverse menu is complemented by a full service bar offering a broad assortment of wines, specialty cocktails, and beers. Visit www.konagrill.com for more information. Kona Grill reported a net loss of $21.62 million for the year ended Dec. 31, 2016, following a net loss of $4.49 million for the year ended Dec. 31, 2015. As of Sept. 30, 2017, Kona Grill had $103.59 million in total assets, $85.61 million in total liabilities and $17.97 million in total stockholders' equity. "The Company has incurred losses resulting in an accumulated deficit of $67.3 million, has a net working capital deficit of $6.9 million and outstanding debt of $38.0 million as of September 30, 2017. These conditions together with recent debt covenant violations and subsequent debt covenant waivers and debt amendments, raise substantial doubt about the Company's ability to continue as a going concern. The ability to continue as a going concern is dependent upon the Company generating profitable operations, improving liquidity and reducing costs to meet its obligations and repay its liabilities arising from normal business operations when they become due. While the Company believes that its existing cash and cash equivalents as of September 30, 2017, coupled with its anticipated cash flow generated from operations, will be sufficient to meet its anticipated cash requirements, there can be no assurance that the Company will be successful in its plans to increase profitability or to obtain alternative financing on acceptable terms, when required or if at all," the Company stated in its quarterly report for the period ended Sept. 30, 2017. KONA GRILL: Wellington Trust Ceases as Shareholder at Dec. 29 ------------------------------------------------------------- Wellington Trust Company NA reported to the Securities and Exchange Commission that as of Dec. 29, 2017, it no longer owns shares of common stock of Kona Grill, Inc. A full-text copy of the regulatory filing is available for free at: https://is.gd/zIUHyE About Kona Grill Kona Grill, Inc., headquartered in Scottsdale, Arizona, Kona Grill, Inc. currently owns and operates 45 upscale casual restaurants in 23 states and Puerto Rico. The Company's restaurants offer freshly prepared food, attentive service, and an upscale contemporary ambiance. The Company's high-volume upscale casual restaurants feature a global menu of contemporary American favorites, sushi and specialty cocktails. Its menu items are prepared from scratch at each restaurant location and incorporate over 40 signature sauces and dressings, creating memorable flavor profiles that appeal to a diverse group of customers. Its diverse menu is complemented by a full service bar offering a broad assortment of wines, specialty cocktails, and beers. Visit www.konagrill.com for more information. Kona Grill reported a net loss of $21.62 million for the year ended Dec. 31, 2016, following a net loss of $4.49 million for the year ended Dec. 31, 2015. As of Sept. 30, 2017, Kona Grill had $103.59 million in total assets, $85.61 million in total liabilities and $17.97 million in total stockholders' equity. "The Company has incurred losses resulting in an accumulated deficit of $67.3 million, has a net working capital deficit of $6.9 million and outstanding debt of $38.0 million as of September 30, 2017. These conditions together with recent debt covenant violations and subsequent debt covenant waivers and debt amendments, raise substantial doubt about the Company's ability to continue as a going concern. The ability to continue as a going concern is dependent upon the Company generating profitable operations, improving liquidity and reducing costs to meet its obligations and repay its liabilities arising from normal business operations when they become due. While the Company believes that its existing cash and cash equivalents as of September 30, 2017, coupled with its anticipated cash flow generated from operations, will be sufficient to meet its anticipated cash requirements, there can be no assurance that the Company will be successful in its plans to increase profitability or to obtain alternative financing on acceptable terms, when required or if at all," the Company stated in its quarterly report for the period ended Sept. 30, 2017. LIBERTY CABLEVISION: S&P Affirms 'B' CCR, Outlook Negative ---------------------------------------------------------- S&P Global Ratings affirmed its 'B' corporate credit rating, and all other ratings, on San Juan, P.R.-based Liberty Cablevision of Puerto Rico LLC. S&P removed all ratings from CreditWatch, where it originally placed them with negative implications on Sept. 27, 2017. The outlook is negative. The affirmation recognizes parent, shareholder, and lender support as the company faces deteriorating operating performance and uncertainty surrounding future earnings in the aftermath of Hurricane Maria and to a lesser extent, Hurricane Irma, both of which hit Puerto Rico in September 2017. Since the category five hurricanes caused massive damage to critical infrastructure, including roads and power lines across the island of Puerto Rico, LCPR received covenant relief from lenders through Dec. 31, 2018 and an equity commitment of up to $60 million from its shareholders to fund any potential liquidity shortfalls. It is S&P's belief that this demonstrates not only the likelihood of support from LLA, should LCPR fall into financial difficulty, but a strong belief in the long-term prospects of the business. The negative outlook reflects the possibility of a downgrade over the next 12 months if operating performance is weaker than expected resulting in continued negative free cash flow driven by the unfavorable impact of the hurricanes. Still, S&P expects a gradual recovery of the business, which should lend itself to near-term support from the parent as a bridge for any cash shortfalls through the recovery. S&P said, "We could lower the rating if the company breaches its March 2019 leverage covenants without another amendment increase. This would likely be caused by a less favorable view of the company's long-term prospects due to accelerated migration, weak macro conditions, or extensive network damage that result in less support from stakeholders. "We could revise the outlook to stable if operating performance stabilizes, such that we have increased confidence that the company will be able to meet its first-quarter 2019 leverage covenants with headroom above 15%." RFI MANAGEMENT: Plan Outline Okayed, Plan Hearing on March 1 ------------------------------------------------------------ The U.S. Bankruptcy Court for the Middle District of North Carolina will consider approval of RFI Management, Inc.'s Chapter 11 plan of reorganization at a hearing on March 1. The court will also consider at the hearing final approval of the company's disclosure statement, which it conditionally approved on Jan. 25. The order set a Feb. 19 deadline for creditors to file their objections and a Feb. 26 deadline to cast their votes accepting or rejecting the plan. The latest plan proposes a new treatment for Class 1 secured claim of Swift Financial Corporation. Under the plan, Swift Financial will receive 17 monthly payments and its claim in the sum of $113,838.02 will be paid in full, according to its second amended disclosure statement. A copy of the second amended disclosure statement is available for free at: http://bankrupt.com/misc/ncmb17-80247-186.pdf 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. =============================== T R I N I D A D & T O B A G O =============================== T&T EXPRESS: Port Chair Unsure of Ferry Resumption -------------------------------------------------- Leah Sorias at Trinidad Express reports that Chair of the Port Authority of Trinidad and Tobago (PATT) Alison Lewis said she is unable to say exactly when the T&T Express will be back up and running again. However, she is hoping that by the time the rough seas bulletin for T&T is lifted "we will have the ferry back in the water," according to Trinidad Express. Ms. Lewis said an inspection of the T&T Express, the lone passenger ferry servicing the seabridge, was supposed to done but this did not happen, the report notes. "The inspectors have indicated that they will come sometime on the weekend. There were a number of things they had asked us to rectify and that is still being done," she explained, the report adds. ================= V E N E Z U E L A ================= PETROLEOS DE VENEZUELA: Bonds Hit by EMTA Market Move ----------------------------------------------------- Reuters reports that emerging markets trade group EMTA has recommended that bonds issued by Venezuela's state-owned oil firm PDVSA should be traded "flat", or without accrued interest, the way bonds in default are typically traded. The move follows a similar advisory from EMTA on Venezuelan sovereign bonds last month and is likely to extinguish any lingering belief that Caracas might try and avoid a default by PDVSA -- the source of 90 percent of Venezuela's export revenue -- to protect its key oil assets, according to Reuters. Venezuela is undergoing a major crisis, with quadruple-digit inflation and shortages of food and medicine, the report notes. Economists consistently describe a 15-year-old currency-control system as the principal obstacle to functioning commerce and industry, the report relays. While the government has vowed to stay current on its debt, it has also deferred payments into grace periods and beyond, the report discloses. It says U.S. sanctions are to blame for the delays, the report notes. Between its sovereign bonds and the debt of PDVSA, Venezuela is behind on more than $1.6 billion in payments, with a good portion of it falling outside the grace periods, Japanese bank Nomura said in a recent note, the report says. Figures from last year showed Venezuela's government debt totaled just over $140 billion. Analysts estimate that PDVSA has around $50 billion, the report relays. Legal experts say PDVSA is vulnerable to litigation because its offshore assets could be targeted by creditors, the report notes. "In a shooting war with creditors, immense pressure could be brought on Venezuela," Lee Buchheit, one of world's top sovereign debt restructuring lawyers, has said recently, the report adds. As reported in the Troubled Company Reporter-Latin America on Dec. 22, 2017, S&P Global Ratings lowered its issue-level ratings on Petroleos de Venezuela S.A.'s (PDVSA's) senior unsecured notes due 2024 and 2021 to 'D' from 'CC'. VENEZUELA: Loses Right to Vote at United Nations ------------------------------------------------ EFE News reports that Venezuela has lost its right to vote in the United Nations General Assembly because of the non-payment of its contributions, according to the organization. The country was in the same situation last year until regained the right to vote in that body after paying part of its debt, according to EFE News. The UN rules establish the loss of the right to vote in the General Assembly for the Member States that have outstanding payments to the organization's budget for an amount equal to or greater than the contributions that corresponded to them during the previous two years, the report notes. "Under Article 19 of the Charter, a Member State in arrears in the payment of its dues in an amount that equals or exceeds the contributions due for two preceding years can lose its vote in the General Assembly," the U.N. Committee on Contributions reported in listing Venezuela as one of 8 countries that do not have a vote in the 72nd General Assembly, the report relays. Stephane Dujarric, the spokesman for the United Nations, said that as of January 29, these eight countries were in that situation: Venezuela, the Central African Republic, Dominica, Equatorial Guinea, Grenada, Libya, Suriname and Yemen, the report discloses. The report notes that the UN rules allow exceptions for member states that face extraordinary situations or when "conditions beyond its control contributed to the inability to pay." In this case, the General Assembly determined last October that Comoros, Guinea Bissau, Sao Tome and Principe and Somalia may vote during the current session despite not having paid the amounts corresponding to the organization's budget, the report says. "Venezuela's predicament is mainly its own fault," says Russ Dallen, who follows Venezuela's economic situation at Caracas Capital and worked at the UN previously, the report relays. "Rather than admit that its people are starving and that its economy is in disarray, Venezuela turned in figures that its GDP was skyrocketing, so that the UN concluded that Venezuela had 'higher growth in GDP relative to the world' and increased Venezuela's portion of UN expenses to 0.854% from its previous 0.571% of the U.N. Budget," the report adds. As reported in the Troubled Company Reporter-Latin America on Jan. 12, 2018, S&P Global Ratings lowered its issue rating on the Bolivarian Republic of Venezuela's global bond due 2020 to 'D' from 'CC'. At the same time, S&P affirmed its long- and short-term foreign currency sovereign issuer credit ratings at 'SD/D'. The long- and short-term local currency sovereign credit ratings remain at 'CCC-/C' and are still on CreditWatch with negative implications, where S&P placed them on Nov. 3, 2017. Other foreign currency senior unsecured debt issues not currently rated 'D' are rated '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 2018. 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 * * *