/raid1/www/Hosts/bankrupt/TCRLA

/raid1/www/Hosts/bankrupt/TCRLA_Public/180301.mbx T R O U B L E D C O M P A N Y R E P O R T E R L A T I N A M E R I C A Thursday, March 1, 2018, Vol. 19, No. 43 Headlines B R A Z I L BRAZIL LOAN: Fitch Lowers Rating on US$661.9MM Notes to BB- D O M I N I C A N R E P U B L I C DOMINICAN REPUBLIC: To Deploy Soldiers on Haitian Border E L S A L V A D O R AES EL SALVADOR: Moody's Hikes CFR & Senior Unsecured Rating to B2 J A M A I C A JAMAICA: JSE Ends 2017 With Marginal Dip in Profit M E X I C O BANCO VE POR MAS: Fitch Affirms BB LT IDR; Removes Rating From RWN CONTROLADORA MABE: Fitch Affirms BB+ FC LT IDR, Outlook Positive MAXCOM TELECOMUNICACIONES: S&P Affirms 'CCC+' CCR, Outlook Stable MEXICO: Judge Who Trump Attacked Rules in Favor of Border Wall P U E R T O R I C O CATHOLIC SCHOOL: Taps Luis R. Carrasquillo as Financial Consultant NUTRITION CARE: U.S. Trustee Directed to Appoint Ombudsman TOYS R US: Spokesman Debunks Report on Closure of 200 Stores V E N E Z U E L A VENEZUELA: President Maduro Disclosed Re-election Candidacy VENEZUELA: Says US Sanctions Hampering Debt Renegotiation - - - - - =========== B R A Z I L =========== BRAZIL LOAN: Fitch Lowers Rating on US$661.9MM Notes to BB- ----------------------------------------------------------- Fitch Ratings has downgraded the rating assigned to the senior secured pass-through notes issued by Brazil Loan Trust I (the issuer) as follows: -- USD661.9 million notes to 'BB-sf'/Outlook Stable from 'BBsf'/Outlook Negative. The transaction is a pass-through securitization of a 10-year amortizing loan originated by Bank of America N.A. (A+/Stable) to the Brazilian State of Maranhao (BB-/Stable). The loan is guaranteed on an unconditional and irrevocable basis by the Federative Republic of Brazil (BB-/Stable). Payments on the loan are made to a bank account of Wilmington Trust N.A. (administrative agent; A/Stable). On the next day, funds are transferred to an Issuer account at the Bank of New York Mellon (indenture trustee; AA-/Stable). Payments are made under the notes immediately thereafter. Fitch's rating addresses timely payment of interest and principal on the scheduled payment date until legal final maturity. KEY RATING DRIVERS The downgrade on the notes reflects the downgrade on Brazil's Credit Quality. The transaction benefits from an unconditional an irrevocable guarantee from Brazil as primary obligor on the underlying loan. Therefore, the rating of senior secured pass- through notes is equivalent to Brazil's sovereign long-term Issuer Default Ratings (IDRs). Fitch downgraded Brazil's Foreign Currency (FC) IDR on Feb. 23, 2018, to 'BB-'/Outlook Stable from 'BB'/Outlook Negative. Brazil's downgrade reflects its persistent and large fiscal deficits, a high and growing government debt burden and the failure to legislate reforms that would improve the structural performance of public finances. The decision of the government not to put the social security reform to a congressional vote represents an important setback in the reform agenda that undermines confidence in the medium-term trajectory of public finances and the political commitment to address the issue. The October Presidential and Congressional elections mean that the social security reform will be delayed until after the elections and there is uncertainty whether the next administration will be able to secure its approval in a timely manner. The 'BB-' rating and Stable Outlook also reflect Fitch's expectation that Brazil's external balance sheet will remain relatively strong during the forecast period and provide a cushion against external and/or domestic shocks. The high level of international reserves, a strong net sovereign external creditor position and the significant reduction in the current account deficit provide the authorities room to maneuver in the face of a shock. Moreover, deep and developed domestic government debt markets continue to provide financing for the large fiscal deficit. Brazil's economic diversity, well entrenched civil institutions, and a higher than peer median per capita income are supportive of its credit profile. The rating of the notes also considers the timely payments of interest and principal due to date. All semi-annual payments due until January 2018 were made directly by the State of Maranhao. The next interest and principal payment date is July 23, 2018. RATING SENSITIVITIES The transaction's rating is sensitive to changes to the FC IDR assigned to Brazil as guarantor on an unconditional and irrevocable basis. Whilst the State of Maranhao is rated below the Sovereign, the rating of the transaction will not be sensitive to changes to the rating of the State. If the rating assigned to Maranhao's FC obligations surpasses the rating of Brazil, the transaction's rating will be rated at the State of Maranhao's rating. =================================== D O M I N I C A N R E P U B L I C =================================== DOMINICAN REPUBLIC: To Deploy Soldiers on Haitian Border -------------------------------------------------------- EFE News reports that Dominican Republic President Danilo Medina said that 900 soldiers, supported by 90 vehicles and three helicopters, will be immediately deployed to secure the borders, especially the boundary with Haiti. President Medina made the announcement at a moment when some sectors of Dominican society are demanding that the government take action against a "quiet invasion" of undocumented immigrants from Haiti, according to EFE News. "We will coordinate all the institutions that operate on the border: the army, the navy, the air force, Border Security and the General Migration Directorate, so that Dominican law is respected on the border," the president said in a speech to a joint session of Congress, the report notes. President Medina said that the borders will also be monitored from the air and sea and that drones and surveillance cameras would be part of the effort, the report relays. "We Dominicans have our own national project, which isn't better or worse than others, but it is ours. This is very clear to us and it is our responsibility to strengthen it and to work to defend it," President Medina said to the applause from lawmakers, officials and guests, the report notes. President Medina said that the government's mission is to protect the people and the country's heritage and territory, the report relays. President Medina acknowledged, however, that it was unrealistic to expect to have secure, orderly borders if at the same time Dominicans "fuel the demand for undocumented workers in sectors such as agriculture, construction and in our own homes," the report notes. In the past, the Dominican government cited unofficial estimates of around 1 million Haitians living in the country, most of them illegal immigrants working in agriculture and construction, the report relays. The Dominican Republic and Haiti share the Caribbean island of Hispaniola, with Haiti in the western portion, the report says. Though both countries are poor, Haiti is destitute, and Haitians cross the border to do work that many Dominicans will not do, such as harvesting sugarcane, the report adds. As reported in the Troubled Company Reporter-Latin America on Nov. 20, 2017, Fitch Ratings has affirmed Dominican Republic's Long-Term Foreign-Currency Issuer Default Rating (IDR) at 'BB-' with a Stable Outlook. ==================== E L S A L V A D O R ==================== AES EL SALVADOR: Moody's Hikes CFR & Senior Unsecured Rating to B2 ------------------------------------------------------------------ Moody's Investors Service upgraded to B2 from B3 the Corporate Family Rating (CFR) and senior unsecured rating of AES El Salvador Trust II bis (Trust II). The outlook remains stable. RATINGS RATIONALE The upgrade of the ratings of Trustco II to B2 with stable outlook reflects the upgrade on February 23, 2018 of the ratings of the government of El Salvador to B3 from Caa1 also with stable outlook. Trust II issued a 10-year bullet 6.75% US$310 million Notes due in 2023 for the benefit of four electricity distribution affiliates in El Salvador: Compa§°a de Alumbrado Electrico de San Salvador, S.A. de C.V. (CAESS); the 98.29%-owned subsidiary of CAESS, Distribuidora Electrica de Usulutan, S.A. de C.V. (DEUSEM); AES CLESA S. en C. de C.V. (CLESA); and Empresa Electrica de Oriente, S.A. de C.V. ("EEO"). These four distribution utilities (collectively the guarantors) jointly, unconditionally and severally guarantee the debt of Trust II. Trust II's ratings and stable outlook reflect the consolidated credit profile of its four guarantors given a joint and several guaranty. It further reflects Trust II's dependence on the guarantors' payments under a promissory note to service the $310 million bonds. The ratings also factor in the guarantors' robust consolidated credit metrics for the B-rating category, the regulated nature and relatively low business risk profile of their operations, as well as Moody's opinion that the regulatory framework is overall credit supportive. This view considers the credit constructive outcome of the 2018-2022 tariff review that allow the guarantors to earn a 10% annual return on the regulated distribution assets based on their replacement cost before taxes. The ratings also consider that the guarantors face no foreign exchange risk exposure and a leading position in El Salvadorian electricity distribution sector but take into consideration their modest size. Importantly, the B2 ratings and stable outlook also consider the guarantors' liquidity profile that remains strong despite their exposure to delays in the collection of the electric subsidies from the government. At year-end 2017, the guarantors' recorded cash on hand that totaled $37 million while their $16.5 million committed credit facilities (due in 2020) remain fully available albeit borrowings are subject to conditionality, a credit negative. Key drivers of the guarantor's robust liquidity profile include their modest dividend distributions of $7 million last year as well as the reduction of the subsidies that limit their annual exposure to $30 million since March 2017 and a more timely recovered of the due amounts with the current due amount aggregating $3 million. The B2 and stable outlook also factor in Moody's expectation of a timely recovery of the subsidy amounts during 2018 following the Legislative Assembly's approval in January 2018 of a $5.5 billion budget for 2018 and a $350.1 million in long-term financing, underpin Moody's expectation that the guarantors will be able to collect the due amounts on timely basis during 2018. Moody's liquidity analysis assigns limited value to non-committed facilities but Moody's acknowledge that the guarantors have around $37 million available under its four non-committed credit (total amount: US$52 million). The guarantors are in the process of renewing these non-committed credit facilities that are subject to annual renewals most of them in January of each year. The B2 ratings also consider the growing refinancing risk of the bullet Global Notes; however, this will only mature in March 2023. Moreover, the B2 ratings also acknowledge that, under the terms of the Global Notes, the structure has a six month interest only debt service reserve account and the incurrence of long-term debt is restricted to reporting a maximum debt to capitalization of 65%. FACTORS THAT COULD LEAD TO AN UPGRADE The prospects of an upgrade of Trustco II are limited given the B3 sovereign rating for El Salvador. FACTORS THAT COULD LEAD TO AN DOWNGRADE A downgrade of Trustco's B2 ratings is likely to follow a downgrade of the sovereign rating. Negative momentum is likely if Moody's concludes that the guarantors' financial and/or liquidity profiles are no longer appropriate to maintain the one-notch difference between Trustco II's ratings and the sovereign rating. Negative momentum is also likely if the consolidated key credit metrics deteriorate significantly; specifically, if the consolidated interest coverage ratio and the CFO pre-W/C to debt fell below 2x and 5%, respectively, for an extended period. An aggressive distribution policy particularly amid the current delays to collect the subsidy payments, would also likely result in a downgrade. The principal methodology used in these ratings was Regulated Electric and Gas Utilities published in June 2017. The guarantors' service territory extends over 80% of the country while their market share in terms of the national electricity demand exceeds 65%. They are subject to the regulatory overview of the Superintendencia General de Electricidad y Telecomunicaciones (SIGET). Their ultimate parent company is AES Corporation (Ba2 stable) which holds indirect ownership stakes that range in between 80.08% (CLESA), 75.11% (CAESS) and 89.11% (EEO), averaging 80% overall. For the Last Twelve Month period ended September 2017, the guarantors reported Cash of Operations of around US$87 million (excluding net interest) and consolidated assets of $794 million. ============= J A M A I C A ============= JAMAICA: JSE Ends 2017 With Marginal Dip in Profit -------------------------------------------------- RJR News reports that despite an increase in revenue, the Jamaica Stock Exchange (JSE) ended its 2017 financial year with a marginal dip in profit. It published on Feb. 27 its financial results for the year, according to RJR News. Profit for the twelve months totaled J$220.6 million down from $223.5 million in the previous year, the report notes. The JSE's revenue increased to near one billion dollars, the report relays. During 2017, the Stock Exchange raked in $991 million up from $865 million in 2016, the report adds. As reported in the Troubled Company Reporter-Latin America on Feb. 19, 2018 S&P Global Ratings affirmed its long- and short- term foreign currency sovereign issuer credit ratings on Venezuela at 'SD/D'. S&P said, "At the same time, we lowered seven issue ratings on Venezuela's global bonds to 'D' from 'CC'. Our long- and short-term local currency sovereign credit ratings remain at 'CCC-/C' and are still on CreditWatch with negative implications. In addition, we affirmed our 'CC' transfer and convertibility assessment." =========== M E X I C O =========== BANCO VE POR MAS: Fitch Affirms BB LT IDR; Removes Rating From RWN ------------------------------------------------------------------ Fitch Ratings has affirmed Banco Ve por Mas, S.A., Institucion de Banca Multiple's (BBX+) Long- and Short-term Foreign and Local Currency Issuer Default Ratings (IDRs) and its Viability Ratings (VR) at 'BB', 'B' and 'bb', respectively. BBX+ and its affiliates' National ratings have also been affirmed. All the ratings have been removed from Rating Watch Negative (RWN). The Rating Outlook is Stable. The removal of the RWN status on BBX+ and affiliates' ratings follows the decision in December 2017 by the management of BBX+ not to complete the acquisition and merger of Bankaool, S.A., Institucion de Banca Multiple (Bankaool). Instead, BBX+ recently completed a loan portfolio purchase. Fitch believes this loan portfolio purchase does not entail a material deterioration of BBX+'s financial performance, specifically in its capital adequacy, profitability and asset quality, which underpins the removal of the RWN status. Despite the agency's belief that there could be execution risks on the acquired loans, the terms and conditions of the purchase agreement could lessen potential asset quality problems and increasing credit costs that could add additional pressure on BBX+'s already weaker profitability than its closest peers, which explains the Stable Outlook assigned. KEY RATING DRIVERS BBX+'s IDRs and National Ratings are driven by its VR of 'bb', which reflects the bank's less diversified business model, small franchise, reasonable liquidity profile and acceptable asset quality metrics, as well as its adequate capital metrics - when compared to local and international peers - despite its accelerated loan growth. Fitch believes that the decision by the management of BBX+ to acquire a loan portfolio, instead of completing the acquisition and merger of Bankaool, will not have a material immediate impact on BBX+'s financial profile and could provide an opportunity to strengthen its moderate franchise in the agricultural financing sector. BBX+ acquired a net loan portfolio of approximately MXN1.3 billion, equivalent to around 4% of BBX+'s total loan portfolio as of November 2017. Fitch's baseline scenario does not expect a material deterioration in BBX+'s asset quality or capitalization. With preliminary data for BBX+ as of the fourth quarter of 2017 (4Q17), the NPL ratio, including Bankaool's loan portfolio, stood at a reasonable 1.7%. BBX+'s operating profits to risk weighted assets (RWAs) remains below 1%, which compares below other Mexican medium-sized banks and is among the bank's weakest links from a credit perspective. Impairments in BBX+'s organic loan portfolio have been rising recently. If this trend is not properly contained, Fitch believes that earnings could be further pressured, which could drive negative rating actions. Since Casa de Bolsa Ve por Mas, S.A. de C.V. (CBBX+) and Arrendadora Ve por Mas, S.A. de C.V. Sofom E.R.'s (ABX+) National Ratings are based on the likely support from their ultimate parent, Grupo Financiero Ve por Mas (GFBX+), whose creditworthiness is highly associated with BBX+, any rating action on the subsidiaries is contingent on any actions taken on the bank's National Ratings. As a result, the Rating Watch Negative is also removed from CBBX+'s and ABX+'s ratings. BBX+ has local senior unsecured debt at the level of its National Rating, which was also removed from the Rating Watch Negative. This is based on Fitch's assessment that the likelihood of default of any given senior unsecured obligation is the same as the likelihood of default of the issuing bank. RATING SENSITIVITIES BBX+ and its affiliates' ratings could be downgraded if the bank's profitability deteriorates further, due to additional credit costs. Specifically, if the bank's operating profitability to RWAs remains consistently below 1% that drives a Fitch Core Capital to RWAs ratios sustained below a 12%. NPL ratios sustained above 2% could also drive a rating downgrade. BBX+'s ratings could be upgraded in the medium term if the bank maintains asset quality and credit costs under strict control, so that its operating profitability metrics are improved and consistently maintained above 1% (operating earnings as % of risks weighted assets), while maintaining adequate capitalization ratios and stable business volumes. The bank's senior debt ratings would mirror any change in the bank's national scale ratings. CBBX+'s and ABX+'s ratings will be aligned with their ultimate parent (GFBX+), whose credit quality is reflected in BBX+. Any change in the bank's ratings would have a similar effect on the ratings of both CBB+ and ABX+. Fitch has taken the following ratings actions as indicated: BBX+ -- Long-Term Foreign Currency IDR affirmed at 'BB'; Removed from Rating Watch Negative, Stable Outlook; -- Short-Term Foreign Currency IDR affirmed at 'B'; Removed from Rating Watch Negative; -- Long-Term Local Currency IDR affirmed at 'BB'; Removed from Rating Watch Negative, Stable Outlook; -- Short-Term Local Currency IDR affirmed at 'B'; Removed from Rating Watch Negative; -- Viability Rating affirmed at 'bb'; Removed from Rating Watch Negative; -- National Long-Term Rating affirmed at 'A(mex)'; Removed from Rating Watch Negative, Stable Outlook; -- National Short-Term Rating affirmed at 'F1(mex)'; Removed from Rating Watch Negative; -- Senior Unsecured Long-Term Debt affirmed at 'A(mex)'; Removed from Rating Watch Negative. CBBX+ -- National Long-Term Rating affirmed at 'A(mex)'; Removed from Rating Watch Negative, Stable Outlook ; -- National Short-Term Rating affirmed at 'F1(mex)'; Removed from Rating Watch Negative. ABX+ -- National Long-Term Rating affirmed at 'A(mex)'; Removed from Rating Watch Negative, Stable Outlook ; -- National Short-Term Rating 'F1(mex)'; Removed from Rating Watch Negative. CONTROLADORA MABE: Fitch Affirms BB+ FC LT IDR, Outlook Positive ---------------------------------------------------------------- Fitch Ratings has affirmed Controladora Mabe, S.A. de C.V.'s ratings at 'BB+'. The Rating Outlook is Positive. The Positive Outlook reflects Fitch's expectations for further strengthening of Mabe's credit profile given stronger cash flow generation due to its awarded incremental export business. The majority of these product lines should start to be delivered between 2018-2019. A broader product portfolio and sourcing synergies are also positive drivers supporting the Positive Outlook and complement the company's solid market position throughout the Americas resulting from the strong brand recognition of the Mabe and GE brands. Mabe's ratings are constrained by the ongoing NAFTA negotiations,that threaten the continuity of North American trade relations. Satisfactory resolution of on-going NAFTA talks along with continued strengthening of Mabe's cash flow profile could result in a rating upgrade. Conversely, an unfavorable outcome from negotiations that disrupts North America's intricate supply chains and increases trade barriers would lead to lower industry profitability and a slowdown of the Mexican economy. This would likely set Mabe's financial improvements back, and could cause Fitch to revise the Outlook to Stable. KEY RATING DRIVERS Strong Market Position: Controladora Mabe S.A. de C.V. holds a strong business position in most of Latin America. The company has seven manufacturing facilities in Mexico, Ecuador, Colombia and Argentina, which allows it to compete throughout Latin America. Mabe focuses on offering a wide product portfolio under a multibrand strategy that targets all socioeconomic levels. It also has long-term contracts to distribute, manufacture and export appliances under the General Electric Co. brand and also holds exclusive rights to distribute Haier products in Latin America. Shareholder Focused on Appliances: Qingdao Haier Co., Ltd. acquired GE's appliance business in 2016. The transaction included GE's 48.4% stake in Mabe, and all terms and conditions Mabe had with GE were maintained. Haier is a large international appliance manufacturer aiming to increase its global presence. Since the acquisition, Mabe and Haier have worked to implement synergies as well as expand their product portfolios. This has resulted in new manufacturing contracts and in a broader product line for Mabe that includes split-system air conditioners. Trade Policy Uncertainty: Mabe is an important manufacturer and exporter with significant exposure to the NAFTA region. The company manufactures a significant quantity of GE-branded products through its joint venture with Haier. Barriers to the import of appliances into the U.S. would hurt the industry, as most players have established manufacturing operations to export into the U.S. from Mexico. An unfavorable outcome to trade negotiations that significantly increases the barriers to trade would likely delay Mabe's ability to deleverage and result in the Outlook being revised to Stable. Stable Results Amid Volatility: Mabe's operating environment remains challenging due to high input costs and increased competition in South America. Prices of steel and aluminum have risen sharply. Plastics prices have also climbed, which, combined with sluggish demand for appliances in South America and higher energy costs, has also contributed to weaker results. Positively, housing dynamics in the U.S., where the company generates over a third of its revenue, have lessened these effects on Mabe's financial performance. Credit Metrics Expected to Strengthen: Fitch projects gross leverage at 2.7x in 2018 or about 3.0x adjusting for the factoring of account receivables. This adjustment allows Fitch to compare issuers that may use different sources of funding. In its analysis, Fitch takes into account increased volumes from new contracts, an expanded portfolio, Mabe's improved cash generation due to the absence of nonrecurring charges, and efficiencies resulting from consolidated manufacturing in fewer sites of larger scale. Recovering Cash Flow Generation: Mabe's FFO margin increased to 5.3% in 2017, compared to 5.0% in 2016, 4.7% in 2015 and 2.9% in 2014. FFO margin had been low due partly to numerous restructuring and reorganization expenses, as well as the consolidation of manufacturing capacity into larger production sites in Mexico and Colombia. In addition, weak conditions in Latin America, including more competitive dynamics in several South American markets including Argentina, pressured financial performance. Product repricing to reflect higher input costs, incremental exports to North America, and realignment of production in Argentina should allow Mabe's FFO margin to trend to around 6% in 2018 and 2019. DERIVATION SUMMARY Mabe's major competitors in the region are Whirlpool Corp. (BBB/Stable) and Asian manufacturers, such as LG Electronics Inc. (BBB-/Stable), Daewoo, Samsung (A+/Stable) as well as local producers. Mabe's solid business position is supported by its low cost structure, proprietary brands, the strength of GE appliances/Haier's technical capability and brand recognition. Mabe's relatively smaller scale and lower geographic diversification against higher-rated peers such as Whirlpool is partially mitigated by its portfolio's strong brand recognition. Sourcing and technical capabilities that result from being partly owned by Haier, a large appliance manufacturer, are also positive factor. Mabe's leverage is higher than both Whirlpool and LG Electronics and its profitability is comparable to Whirlpool's and higher than that of LG Electronics. KEY ASSUMPTIONS Fitch's Key Assumptions Within Fitch Rating Case for the Issuer -- Revenues grow by mid-single digits in 2018 and 2019. -- EBITDA margins trend toward 10% over the next few years. -- Debt/EBITDA leverage declines over the medium term. -- The company does not undertake meaningful shareholder distributions; FCF remains neutral through 2018 and turns positive thereafter. RATING SENSITIVITIES Developments That May, Individually or Collectively, Lead to Positive Rating Action -- Increased sales volumes that result in robust cash flow generation, stable profitability and total adjusted debt/EBITDA close to 2.5x, in conjunction with strong liquidity. Developments That May, Individually or Collectively, Lead to Negative Rating Action -- Large debt-financed acquisitions, deterioration in profitability and cash flow generation from lower demand, and/or competitive or input cost pressures, resulting in the expectation of adjusted gross leverage levels consistently above 3.5x. LIQUIDITY Adequate Liquidity: Mabe's liquidity is adequate. Fitch's base case suggests Mabe could generate about USD180 million of cash flow from operations, which together with USD140 million in cash and good access to bank credit should allow the company to refinance USD481 million in 2019 notes. Mabe has refinanced USD300 million of syndicated bank debt during the last year or so with a combination of 10-year private notes and local currency bank debt with five-year maturities. Supporting Mabe's intrinsic liquidity is the continued demand for the company's products and strong name recognition of the GE and Mabe brands. Total debt was USD781 million as of Dec. 31, 2017, consisting of USD481 million and USD175 million of notes due 2019 and 2026, respectively, and bank debt. FULL LIST OF RATING ACTIONS Fitch has affirmed Mabe's ratings as follows: -- Foreign Currency Long-Term Issuer Default Rating (IDR) at 'BB+'; -- Local Currency Long-Term IDR at 'BB+'; -- 7.875% senior unsecured notes due 2019 at 'BB+'. MAXCOM TELECOMUNICACIONES: S&P Affirms 'CCC+' CCR, Outlook Stable ----------------------------------------------------------------- S&P Global Ratings affirmed its 'CCC+' corporate credit rating on Maxcom Telecomunicaciones S.A.B. de C.V. The outlook remains stable. S&P said, "At the same time, we affirmed our 'CCC+' issue- level rating on the company's senior secured notes. The '4' recovery rating on the notes, indicating our expectation for average recovery (30%-50%) in the event of a payment default, remains unchanged." The rating affirmation reflects Maxcom's weak credit metrics and the uncertainty about the sustainability of its business model, because the company has struggled to materialize growth in the past few years. With the objective to increase profitability and preserve cash, Maxcom began the winding down of its residential business in 2016, because it was unable to compete with larger and better capitalized carriers. The winding down has taken a toll on revenue and EBITDA generation; however, it allows Maxcom more efficient use of resources, focusing its capital expenditures on increasing its share of the commercial segment. Recently, the company also announced its decision to reduce its participation in the international traffic business that holds very low margins. This, coupled with its efficiency strategies to reduce costs, has resulted in higher EBITDA margins. S&P said, "We believe the company will be able to achieve double-digit EBITDA margins for 2018; however, we expect key credit metrics to remain weak through 2018. We estimate Maxcom has sufficient cash to fund its operations beyond the next 12 months. Nevertheless, we are concerned about the company's free operating cash flow (FOCF) shortfall and the ability to refinance its 2020 senior secured notes." The ratings on Maxcom reflect its vulnerable competitive position due to its operations in only a few cities in Mexico, its small market share, smaller scale than that of larger players in the Mexican market, limited growth potential, and margin pressures. Additionally, frequent management changes continue to constrain the rating. MEXICO: Judge Who Trump Attacked Rules in Favor of Border Wall -------------------------------------------------------------- Jacqueline Thomsen at The Hill reports that the judge whom President Trump once attacked for his Mexican heritage has ruled in favor of the administration in a lawsuit attempting to block Trump's proposed wall on the U.S.-Mexico border. U.S. District Judge Gonzalo Curiel, whose parents immigrated from Mexico, ruled against a legal challenge to the wall over environment waivers granted by the Department of Homeland Security, according to The Hill. The ruling means that the administration will be able to continue waiving the regulations to build barriers on the border, the report notes. The report relays that President Trump had targeted Judge Curiel during the 2016 presidential race, claiming the judge might be biased against him in a lawsuit over Trump University because of Curiel's Mexican heritage. Judge Curiel wrote in his ruling that he did not have "serious constitutional doubts" about the administration's use of the waivers, the report says. "In its review of this case, the court cannot and does not consider whether underlying decisions to construct the border barriers are politically wise or prudent," he said, the report relays. The lawsuit, filed by the state of California last year, argued that the department had improperly waived the National Environmental Policy Act and other immigration and environmental rules to speed up the construction of the wall, the report discloses. California Attorney General Xavier Becerra said in a statement that the state is "unwavering in our belief that the Trump Administration is ignoring laws it doesn't like in order to resuscitate a campaign talking point of building a wall on our southern border," the report notes. "We will evaluate all of our options and are prepared to do what is necessary to protect our people, our values, and our economy from federal overreach," he said, the report relays. "A medieval wall along the U.S.-Mexico border simply does not belong in the 21st century," he added. And Brian Segee, senior attorney for the Center for Biological Diversity, one of the litigants in the suit, said the organization would appeal the decision, calling the waivers "unconstitutional," the report notes. "The Trump administration has completely overreached its authority in its rush to build this destructive, senseless wall," Mr. Segee said in a statement obtained by the news agency. "They're giving unprecedented, sweeping power to an unelected agency chief to ignore dozens of laws and crash through hundreds of miles of spectacular borderlands," he added. But a Department of Justice spokesman applauded the ruling, saying it will allow "work vital to our nation's interest, the report says. "Border security is paramount to stemming the flow of illegal immigration that contributes to rising violent crime and to the drug crisis, and undermines national security," Devin O'Malley said in a statement, the report notes. "Congress gave authority to the Department of Homeland Security to construct a border wall without delay to prevent illegal entry into the United States, and we are pleased DHS can continue this important work vital to our nation's interests," he added. DHS Acting Press Secretary Tyler Houlton also celebrated the ruling in a statement to The Hill, saying that walls "have proven to be extremely effective in preventing the flow of drugs and illegal aliens across our borders," the report relays. "Simply put - walls work. The Department of Homeland Security looks forward to building the wall where our frontline operators say it is needed and in accordance with all applicable laws," Houlton said, the report adds. ====================== P U E R T O R I C O ====================== CATHOLIC SCHOOL: Taps Luis R. Carrasquillo as Financial Consultant ------------------------------------------------------------------ Catholic School Employees Pension Trust seeks approval from the U.S. Bankruptcy Court for the District of Puerto Rico to hire CPA Luis R. Carrasquillo & Co., P.S.C. as its financial consultant. Carrasquillo will assist the Debtor's management in the financial restructuring of its affairs by providing advice in strategic planning and preparation of its plan of reorganization and business plan, and by participating in the Debtor's negotiations with its creditors. The firm's hourly rates are: Luis Carrasquillo Partner $175 Marcelo Gutirrez Senior CPA $125 Lionel Rodriguez Perez Senior Accountant $90 Carmen Callejas Echevarria Senior Accountant $85 Kenneth Ramirez Senior Accountant $80 Kelvin Cabezudo Senior Accountant $80 Zoraida Delgado Junior Accountant $45 Karina Mejias Ortiz Administrative/Support $30 Maricruz Mangual Hernandez Administrative/Support $30 Iris Franqui Administrative/Support $30 The firm received a retainer in the sum of $6,000. Luis Carrasquillo Ruiz, a principal of the firm, disclosed in a court filing that he and other members of the firm are "disinterested person" as defined in section 101(14) of the Bankruptcy Code. Carrasquillo can be reached through: Luis R. Carrasquillo Ruiz CPA Luis R. Carrasquillo & Co., P.S.C. 28th Street, #TI-26 Turabo Gardens Avenue Caguas, PR 00725 Phone: 787-746-4555 / 787-746-4556 Fax: 787-746-4564 Email: luis@cpacarrasquillo.com About Catholic School Employees Pension Trust The Catholic School Employees Pension Trust is a business trust duly constituted under the laws of the Commonwealth of Puerto Rico. The Pension Trust filed a Chapter 11 petition (Bankr. D.P.R. Case No. 18-00108) on Jan. 11, 2018. In the petition signed by Ramon Guzman, president of Board of Trustees, the Debtor estimated $1 million to $10 million to $1 million to $10 million in assets and liabilities. The Hon. Enrique S. Lamoutte Inclan presides over the case. Javier Vilarino, Esq., at the Law Firm of Vilarino & Associates, serves as bankruptcy counsel. NUTRITION CARE: U.S. Trustee Directed to Appoint Ombudsman ---------------------------------------------------------- Judge Enrique S. Lamoutte of the U.S. Bankruptcy Court for the District of Puerto Rico issued an order directing the U.S. Trustee to appoint an ombudsman in the chapter 11 case of Nutrition Care, Inc. The U.S. Trustee and/or the debtor in possession have 21 days to inform the Court in writing if the appointment of an ombudsman is not necessary for the protection of the patients. Nutrition Care, Inc. filed for Chapter 11 bankruptcy protection (Bankr. D.P.R. Case No. 18-00394) on Jan. 29, 2018, and is represented by Tomas F. Blanco Perez, Esq. of MRO Attorneys at Law, LLC. TOYS R US: Spokesman Debunks Report on Closure of 200 Stores ------------------------------------------------------------ Sherry Greenfield, writing for HeraldMailMedia.com, reports that Joseph Contrino, a spokesman for Toys R Us, denied news reports that the company will close another 200 stores, calling the news "premature." "We did not announce additional store closures," Mr. Contrino said in an email, according to HeraldMailMedia.com. "As we have shared publicly, our focus is on the reinvention of our business and emergence from Chapter 11. Decisions about our future store footprint and organizational structure will be based on needs of the new business model. "It is therefore premature for us to comment on that. Everything that you may have seen in the news is based on pure speculation." Michael Corkery, writing for The Wall Street Journal, reported that the Company may close dozens of more stores as it struggles to find a path out of bankruptcy and return to financial viability. The WSJ report says the Company is under pressure to demonstrate to its lenders that it has a realistic strategy after a dismal holiday selling season. WSJ says that, according to people briefed on the matter, who were not authorized to speak publicly, one plan under discussion includes shutting down close to 200 stores, and possibly more. The Company announced in January that it would close 182 stores this year due to struggling sales. According to HeraldMailMedia.com, Dave Brandon, the company's chairman and CEO, told the Associated Press in January that "tough decisions are required to save Toys R Us." As reported by the Troubled Company Reporter on Feb. 9, 2018, store closing sales are being conducted at select Toys"R"Us(R) and Babies"R"Us(R) locations throughout the country -- offering shoppers deep discounts on top brand names across all product categories. The closing sales are operated by a consortium consisting of Gordon Brothers, Hilco Merchant Resources, Tiger Capital Group and Great American Group. Store furniture and fixtures will also be available for sale. Since 1948, Toys"R"Us has served kids and families around the world by offering great service and a broad assortment of toy and baby products. The Company recently announced the closure of a number of stores as part of a restructuring strategy to make Toys"R"Us a more viable and competitive business. Toys"R"Us filed for Chapter 11 bankruptcy protection last September to ensure the Toys"R"Us and Babies"R"Us brands live on for generations to come. The discounts and promotions that will be offered at closing locations starting Feb. 7 will be unique to these stores. Closing locations will continue to honor customer programs including gift cards, Endless Earnings and credit card specials. A consortium spokesperson said, "not only will the sale provide loyal customers from coast to coast the opportunity to purchase their favorite products at significantly lower prices, it will also include new merchandise at even deeper discounts. Due to these substantial reductions, we encourage consumers to shop early to take advantage of the best selection of products available while supplies last." A complete list of closing stores is available at: https://is.gd/FIampU About Gordon Brothers Since 1903, Gordon Brothers -- http://www.gordonbrothers.com/-- has helped lenders, operating executives, advisors, and investors move forward through change. The firm brings a powerful combination of expertise and capital to clients, developing customized solutions on an integrated or standalone basis across four service areas: valuations, dispositions, operations, and investments. Whether to fuel growth or facilitate strategic consolidation, Gordon Brothers partners with companies in the retail, commercial, and industrial sectors to put assets to their highest and best use. Gordon Brothers conducts more than $70 billion worth of dispositions and appraisals annually. Gordon Brothers is headquartered in Boston, with 25 offices across four continents. About Hilco Merchant Resources Hilco Merchant -- http://www.hilcomerchantresources.com/-- provides a wide range of analytical, advisory, asset monetization, and capital investment services to help define and execute a retailer's strategic initiatives. Hilco Merchant Resources' activities fall into several principal categories including acquisitions; disposition of underperforming stores; retail company or division wind downs; event sales to convert unwanted assets into working capital; facilitation of mergers and acquisitions; interim company, division or store management teams; loss prevention; and, the monetization of furniture, fixtures and equipment. Hilco Merchant Resources is part of Northbrook, Illinois based Hilco Global, one of the world's leading authorities on maximizing the value of business assets by delivering valuation, monetization and advisory solutions to an international marketplace. About Tiger Capital Group Tiger Capital Group -- http://www.tigergroup.com/-- provides asset valuation, advisory and disposition services to a broad range of retail, wholesale, and industrial clients. With over 40 years of experience and significant financial backing, Tiger offers a uniquely nimble combination of expertise, innovation and financial resources to drive results. Tiger's seasoned professionals help clients identify the underlying value of assets, monitor asset risk factors and, when needed, provide capital or convert assets to capital quickly and decisively. Tiger maintains domestic offices in New York, Los Angeles, Boston, Chicago, and San Francisco, and international offices in Sydney, Perth, Melbourne and Brisbane, Australia. About Great American Group Great American Group, LLC -- http://www.greatamerican.com-- is a provider of asset disposition and auction solutions, advisory and valuation services, and a wholly-owned subsidiary of B. Riley Financial, Inc. Great American Group efficiently deploys resources with sector expertise to assist companies, lenders, capital providers, private equity investors and professional service firms in maximizing the value of their assets. About Toys "R" Us Toys "R" Us, Inc., is an American toy and juvenile-products retailer founded in 1948 and headquartered in Wayne, New Jersey, in the New York City metropolitan area. Merchandise is sold in 880 Toys "R" Us and Babies "R" Us stores in the United States, Puerto Rico and Guam, and in more than 780 international stores and more than 245 licensed stores in 37 countries and jurisdictions. Merchandise is also sold at e-commerce sites including Toysrus.com and Babiesrus.com. On July 21, 2005, a consortium of Bain Capital Partners LLC, Kohlberg Kravis Roberts and Vornado Realty Trust invested $1.3 billion to complete a $6.6 billion leveraged buyout of the company. Toys "R" Us is a privately owned entity but still files with the Securities and Exchange Commission as required by its debt agreements. The Company's consolidated balance sheet showed $6.572 billion in assets, $7.891 billion in liabilities, and a stockholders' deficit of $1.319 billion as of April 29, 2017. Toys "R" Us, Inc., and certain of its U.S. subsidiaries and its Canadian subsidiary voluntarily filed for relief under Chapter 11 of the Bankruptcy Code (Bankr. E.D. Va. Lead Case No. Case No. 17-34665) on Sept. 19, 2017. In addition, the Company's Canadian subsidiary voluntarily commenced parallel proceedings under the Companies' Creditors Arrangement Act ("CCAA") in Canada in the Ontario Superior Court of Justice. The Company's operations outside of the U.S. and Canada, including its 255 licensed stores and joint venture partnership in Asia, which are separate entities, are not part of the Chapter 11 filing and CCAA proceedings. Grant Thornton is the monitor appointed in the CCAA case. Judge Keith L. Phillips presides over the Chapter 11 cases. In the Chapter 11 cases, Kirkland & Ellis LLP and Kirkland & Ellis International LLP serve as the Debtors' legal counsel. Kutak Rock LLP serves as co-counsel. Toys "R" Us employed Alvarez & Marsal North America, LLC as its restructuring advisor; and Lazard Freres & Co. LLC as its investment banker. It hired Prime Clerk LLC as claims and noticing agent. A&G Realty Partners, LLC, serves as its real estate advisor. On Sept. 26, 2017, the U.S. Trustee for Region 4 appointed an official committee of unsecured creditors. The Committee retained Kramer Levin Naftalis & Frankel LLP as its legal counsel; Wolcott Rivers, P.C. as local counsel; FTI Consulting, Inc. as financial advisor; and Moelis & Company LLC as investment banker. ================= V E N E Z U E L A ================= VENEZUELA: President Maduro Disclosed Re-election Candidacy ----------------------------------------------------------- EFE News reports that President Nicolas Maduro officially disclosed his candidacy for re-election before Venezuela's National Electoral Council (CNE) in the April 22 balloting, which the main opposition alliance MUD plans to boycott. Earlier, the incumbent visited the grave of his political mentor, President Hugo Chavez (1954-2013), his motorcade passing along several streets in downtown Caracas en route from the Miraflores presidential palace to the CNE offices, according to EFE News. The governing PSUV party, the recently created Somos Venezuela (We Are Venezuela) organization, the Communist Party and other leftist organizations are all backing Maduro's candidacy, the report notes. He said he accepted the nomination by "Venezuela's bloc of revolutionary, patriotic and pro-Chavez forces," and handed CNE chair Tibisay Lucena a copy of the so-called "2019-2025 Plan for the Homeland," which includes the executive branch's intended course of action for the upcoming presidential term, the report relays. So far, President Maduro is not opposed by any strong candidates, the report notes. The president, who later gave a speech before thousands of supporters, said that -- if re-elected -- he will enhance the "path and legacy of Chavez," his predecessor, whom he succeeded in April 2013, the report adds. As reported in the Troubled Company Reporter-Latin America on Feb. 19, 2018 S&P Global Ratings affirmed its long- and short- term foreign currency sovereign issuer credit ratings on Venezuela at 'SD/D'. S&P said, "At the same time, we lowered seven issue ratings on Venezuela's global bonds to 'D' from 'CC'. Our long- and short-term local currency sovereign credit ratings remain at 'CCC-/C' and are still on CreditWatch with negative implications. In addition, we affirmed our 'CC' transfer and convertibility assessment." VENEZUELA: Says US Sanctions Hampering Debt Renegotiation --------------------------------------------------------- Channel News Asia reports that Venezuela's foreign minister said that U.S. sanctions against the ailing oil nation are making foreign debt renegotiation more difficult and causing "panic" at global banks. Venezuela is undergoing a major economic crisis, with millions suffering food and medicine shortages, and President Nicolas Maduro's socialist government is late in paying interest of some US$1.9 billion on its debt, according to Channel News Asia. The U.S. government imposed financial sanctions on Venezuela in August, prohibiting dealing in new debt from the Venezuelan government or state oil company PDVSA, in an effort to halt financing that Washington said fuels a "dictatorship," the report notes. Venezuela has repeatedly said Washington is trying to force a default, the report relays. "The renegotiation of external debt is underway, but it has been made more difficult by U.S. sanctions," foreign minister Jorge Arreaza told reporters in Geneva, the report notes. "It's incredible how global banks have reacted with panic. If a bank somewhere in the world works with Venezuela, they feel they are going to be sanctioned," the report says. According to Arreaza, global banks have opted to close accounts belonging to the government, business people and embassies, the report relays. He added that some U.S. companies were unable to pay for Venezuelan oil, the report notes. Earlier this month, U.S. Secretary of State Rex Tillerson raised the specter of sanctions on Venezuela's oil industry, the report notes. The OPEC nation obtains some 95 percent of its export revenue from oil, though production is down significantly in recent months, the report says. "If the international financial system blocks Venezuela, we are working with Russia, China and Turkey to find new mechanisms," said Mr. Arreaza, the report discloses. As reported in the Troubled Company Reporter-Latin America on Feb. 19, 2018 S&P Global Ratings affirmed its long- and short- term foreign currency sovereign issuer credit ratings on Venezuela at 'SD/D'. S&P said, "At the same time, we lowered seven issue ratings on Venezuela's global bonds to 'D' from 'CC'. Our long- and short-term local currency sovereign credit ratings remain at 'CCC-/C' and are still on CreditWatch with negative implications. In addition, we affirmed our 'CC' transfer and convertibility assessment." *********** 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. . * * * End of Transmission * * *