/raid1/www/Hosts/bankrupt/TCRLA

/raid1/www/Hosts/bankrupt/TCRLA_Public/180319.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 Monday, March 19, 2018, Vol. 19, No. 55 Headlines B R A Z I L PARANA: Fitch Affirms BB- Long-Term IDR; Outlook Stable D O M I N I C A N R E P U B L I C DOMINICAN REPUBLIC: Illegal Aliens Are 95% of Workforce in Border DOMINICAN REPUBLIC: Turmoil at Border Hurts Tourism, Exports DOMINICAN REPUBLIC: Study Debunks Medina's Claim on Jobs Growth J A M A I C A DIGICEL GROUP: Vanessa Slowey Leaves Firm M E X I C O METROFINANCIERA SAPI: Fitch Affirms B- LT IDR; Outlook Negative P U E R T O R I C O ALLIED FINANCIAL: Escobar Buying Aguadilla Property for $34K ALLIED FINANCIAL: Redemption Right Timely Asserted, Judge Rules KELLERMEYER BERGENSONS: Loan Upsize Credit Neutral, Moody's Says TOYS "R" US: Seeks Court Approval to Wind Down U.S. Business V E N E Z U E L A PETROLEOS DE VENEZUELA: Moody's Cuts Ratings to C; Outlook Stable VENEZUELA: Crude Exports to the U.S. Reach 15-year Low X X X X X X X X X * BOND PRICING: For the Week From March 12 to March 16, 2018 - - - - - =========== B R A Z I L =========== PARANA: Fitch Affirms BB- Long-Term IDR; Outlook Stable ------------------------------------------------------- Fitch Rating has affirmed the Brazilian state of Parana's Long-Term Issuer Default Rating (IDR) at 'BB-'. The Rating Outlook is Stable. The Rating Outlook reflects Brazil's Stable Outlook. Fitch has also affirmed Parana's National Long-Term rating at 'AA+(bra)'/Stable Outlook. KEY RATING DRIVERS Finances: Fitch believes Parana's finances are a neutral rating factor and reflect a stable trend. Operating margins have averaged 4.1% per year over the last five years, which compared to other large states in Brazil, is adequate and in line with international peers. In 2017, Parana registered an overall fiscal surplus of 6.1%, reflecting the receipt of extraordinary tax revenues and migration of some payments to 2018. Excluding these events, the state would register a small deficit. Debt and Other Long-term Liabilities: Fitch considers Parana's debt profile to be a strong rating factor with a stable trend. Parana's consolidated debt of BRL19.7 billion in 2017 represented a moderate 45.6% of the entity's current revenues (52.3% in 2016). Parana has also exhibited adequate debt sustainability as consolidated debt service corresponded to 46% of operating balance in 2017 (51.8% in 2016). The state benefited from a renegotiation with the federal government to postpone debt service in 2017 until June 2018. Around 90% of the debt is directly, or indirectly, related to the federal government. Economy: Fitch considers Parana's economy to be a neutral rating factor with a stable trend. Parana's economy is highly influenced by the services sector in addition to soft commodities. These activities presented a slightly positive performance in 2017. The state's contribution to Brazil's GDP has been fairly stable in the last five years, posting an estimated GDP of BRL409.3 billion in 2017(roughly 6% of the Brazilian GDP). Parana's population is 11.3 million, equal to approximately 5.0% of the Brazilian population, implying a GDP per capita of USD11,956. Management and Administration: Management is a neutral rating factor with a stable trend. Information disclosure practices are compatible to national and international peers since financial information is fully available and is frequently updated. Parana's reliance on non-recurring, non-operating revenue is below average. Fitch believes the accuracy of fiscal forecasts is average, with budgets and outturns diverging less than 5%. Financials are analyzed by the regional court of account (TCE/PR) annually. Main points are related to accounting practices. External parties are not auditing state financials at this time. Institutional Framework: Fitch considers the institutional framework to be weak with a stable trend. This is mostly because of very low fiscal flexibility stemming from subdued fiscal collection coupled with rigid cost structure. Moreover, the federal government has great influence over local and regional governments (LRGs), as exhibited by the vertical issuance of laws, and, in many instances, the federal government being the largest LRG creditor. RATING SENSITIVITIES Parana's IDRs are constrained by the sovereign; therefore, any rating actions affecting Brazil should result in a similar action for Parana. An increased cost structure may lead to further downgrades in both national and international ratings. KEY ASSUMPTIONS Fitch does not expect a change in the government's willingness to provide support for Parana debt in case of need. Fitch assumes Parana to maintain international and domestic market access even if there is a return of higher international financial volatility and further domestic confidence shocks. FULL LIST OF RATING ACTIONS State of Parana: -- Long-Term Foreign and Local Currency IDRs at 'BB-'; Outlook Stable; -- Short-Term Foreign and Local Currency IDRs at 'B'; -- National Long-Term Rating at 'AA+(bra)'; Outlook Stable; -- National Short-Term Rating at 'F1+(bra)'. =================================== D O M I N I C A N R E P U B L I C =================================== DOMINICAN REPUBLIC: Illegal Aliens Are 95% of Workforce in Border ----------------------------------------------------------------- Dominican Today reports that Defense Minister Ruben Dario Paulino said as much as 95% of the workforce in the northwest and border communities are undocumented persons of Haitian origin, and noted that "this has to be resolved." The official attended a multi-sector meeting in Dajabon province, where he disclosed a report to the press on the progress in the plan of reinforcement along the Haiti border, according to Dominican Today. He said the plan has returned 2,792 undocumented people in the past eight days and seized over a ton-and-a-half of garlic, seven motorcycles, two cars, two SUVs, two trucks, five packages of cigarettes of forged brands and four firearms, the report notes. "We have had tremendous acceptance from all the local authorities. We hope that this plan will continue with the same daily reinforcement, the same results that we have had so far," said Mr. Paulino, the report notes. Mr. Paulino added that the plan will continue to be strengthened, "not only to deal with human trafficking but of for firearms and merchandise smuggling." 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. DOMINICAN REPUBLIC: Turmoil at Border Hurts Tourism, Exports ------------------------------------------------------------ Dominican Today reports that Industries Association (AIRD) Executive Vice President Circe Almanzar said the recent incidents at the border town of Pedernales pose a threat to the region's stability and Dominican Republic's image as a tourism haven and world exporter. "The authorities must not allow this type of situation, they must resolve the paralysis of the border as soon as possible. I think this should serve as a signal to the authorities that security is very important, no matter where we are, because this is a symptom of a security problem," the report quoted Mr. Almanzar as saying. It has been a tense week in Pedernales, where a group of Dominican citizens took to the streets to give the Haitians 24 hours to leave the province, the report notes. The turmoil prompted the Govt. to beef up security along the entire 380-kilometer border, the report relays. "The situation should leave learning that strengthening citizen security and economic activity in the area is very important," Almanzar said after a breakfast held in the National Statistics Office (ONE), 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. DOMINICAN REPUBLIC: Study Debunks Medina's Claim on Jobs Growth --------------------------------------------------------------- Dominican Today reports that the Juan Bosch Foundation presented the study on employment "Radiography of work: Dignified work or junk jobs?," which found that the country doesn't create jobs, nearly half are informal, and that workers produce more but earn less than in the 1990s. The research analyzed the GDP's latest data on the labor market and the cost of household staples, to conclude on the country's reality on employment, according to Dominican Today. "This serves to explain why the unemployment rate isn't significantly reduced, there are currently over 600,000 Dominicans looking for a job or can work, and can't get one," said social scientist Matias Bosch, together with lead investigator, economist Airon Fernandez, the report notes. He debunked the figures on employment growth announced by president Danilo Medina, the report relays. "The growth of the economically active population "PEA" has been lower than the amount of jobs which the Government says were created, Mr. Bosch added. He said that compared with 2016, only 58,000 net jobs were created in 2017, on the growth of the PEA, contrary to the hundreds of thousands that the government says were created, the report relays. "With this picture of precariousness and shortage of work, it is very difficult to talk about becoming a middle class country," the authors said in a statement obtained by the news agency. 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. ============= J A M A I C A ============= DIGICEL GROUP: Vanessa Slowey Leaves Firm ------------------------------------------ RJR News reports that Digicel Group Limited disclosed that Vanessa Slowey, chief executive officer for the Caribbean and Central America, has decided to leave the business. Ms. Slowey has been with the telecommunications company for 15 years initially in the Caribbean where she held a variety of leadership roles and then as CEO of Digicel in Asia Pacific, according to RJR News. There, she was responsible for setting up and driving the phenomenal growth of the Digicel brand in six markets in the region, the report notes. Ms. Slowey returned to the Caribbean to head up the Caribbean and Central America business in August 2016, the report relays. In this role, she was instrumental in spearheading and leading the Digicel 2030 global transformation program, the report adds. As reported in the Troubled Company Reporter-Latin America on May 26, 2017, Fitch Ratings has affirmed at 'B' the Long-term Foreign-currency Issuer Default Ratings (IDR) of Digicel Group Limited (DGL) and its subsidiaries, Digicel Limited (DL) and Digicel International Finance Limited (DIFL), collectively referred to as Digicel. The Rating Outlook is Stable. Fitch has also affirmed all existing issue ratings of Digicel's debt instruments. =========== M E X I C O =========== METROFINANCIERA SAPI: Fitch Affirms B- LT IDR; Outlook Negative --------------------------------------------------------------- Fitch Ratings has affirmed Metrofinanciera S.A.P.I. de C.V. Sofom, E.R.'s (Metrofinanciera) Foreign and Local Currency Long-Term Issuer Default Ratings (IDRs) at 'B-' and its Short-Term IDRs at 'B'. Fitch also affirmed Metrofinanciera's long-term and short- term national scale ratings at 'B-(mex)' and 'B(mex)', respectively. The Rating Outlook of the long-term ratings is Negative. The Negative Outlook reflects the pressure in liquidity Metrofinanciera will face, if the company is not able to restructure its credit lines that start to amortize in 2019. The Negative Outlook also reflects Metrofinanciera's continued inability to generate profits, mainly reflecting pressure generated by high loan impairment charges. Even though net losses decreased in 2017 compared to 2016, Fitch considers this does not reflect improved performance of its operations as profitability mostly benefited from the revaluation of its land reserves, a non- cash nonrecurring source of income. KEY RATING DRIVERS IDRS AND NATIONAL RATINGS The affirmation of Metrofinanciera's ratings considers Fitch's expectations that a restructuring of its debt is highly likely in the short term and that management's efforts to materially reduce losses should materialize during 2018. Metrofinanciera's ratings reflect its still high delinquency portfolio levels as well as the limited flexibility of its funding structure and its recurring net losses that reduce its loss-absorption capacity. Ratings also consider its recovering and modest franchise in the housing development loans segment in Mexico, reflected in its ability to increase the volume of earning assets, which considers on- and off- balance sheet managed portfolios. Metrofinanciera's business model focuses in granting construction loans to medium sized homebuilders in Mexico, which represented 64% of its total loan portfolio as of the close of 2017. At the same time, it continues working in the collection and contention of delinquency of its legacy mortgage loan portfolio, while selling foreclosed assets and other unproductive assets it maintains on its balance sheet. Metrofinanciera's asset quality represents one of its main weaknesses, however, Fitch recognizes that its asset quality metrics have been improving over the past few years as a result of stricter underwriting standards and clean-ups of the portfolio. Its impaired loan ratio adjusted to consider charge-offs and foreclosed assets decreased to 15.6% in 2017 from 24.8% in 2016. Concentrations per borrower are still relatively high, though they decreased moderately to 1.8x equity as of the close of 2017 compared to 2x at the end of 2016. Reserve coverage ratio improved to 55.5% as of December 2017, up from 40% in 2016; in Fitch's opinion, this ratio is low, however, it is in line with local regulatory requirements. In its assessment of asset quality, Fitch considers Metrofinanciera's exposure to other unproductive assets which continues to be high; these include land reserves and available for sale properties, which represented 10.2% of total assets. Reverse of recurrent losses has been one of the main challenges of Metrofinanciera since 2008, in Fitch's opinion. During 2017, the company's operational losses decreased to MXN48 million (2016: MXN-144 million); the improvement was driven by the positive valuation adjustment of MXN152 million of land bank reserves and other assets available for sale. Without this revaluation, net operational losses would have reached MXN200 million as reserve generation and prudential provisioning of construction loans with more than nine months of delinquency, negatively affected profitability. Fitch considers that without material improvements in asset quality and without a faster foreclosed asset disposal rate, loan and other impairment charges will continue pressuring profitability and offsetting management's efforts to increase income volumes and decrease operational costs. Metrofinanciera's management forecasts losses of MXN21 million in 2018, and expects to break-even in 2019. The company debt to tangible equity ratio remained stable at 6.7x in 2017, benefitted by the decrease in total assets and lower net losses. Metrofinanciera's Fitch Core Capital (FCC) and regulatory capital ratios were 11.6% and 13.7% as of YE17, respectively, fairly stable compared to 11.7% and 14.2% ratios registered in 2016. Fitch considers that Metrofinanciera's loss absorption capacity continues to be pressured by the recurring net losses and by the high level of unproductive assets on its balance sheet. Metrofinanciera's funding and liquidity profile has a high influence on its rating and is a rating constraint. All of Metrofinanciera's on-balance sheet funding is provided by Sociedad Hipotecaria Federal, S.N.C (SHF) and Fovi (a trust administered by SHF) and all of it is secured. The company explored the possibility of issuing securitization transactions to diversify its funding mix, however, loan portfolio sales such as the one made to a commercial bank during 2017, were a more feasible and convenient alternative in terms of cost. The company expects this to become a recurring source of funds, which in Fitch's view, would moderately benefit its funding profile. Nevertheless, the secured nature of all of its credit lines, limits Metrofinanciera's funding flexibility. Metrofinanciera's cumulative cash flows are positive from 2018 through 2020; however, debt services payments for two credit lines with SHF that do not follow a pass-through payment scheme start to amortize in 2019. This, in Fitch's opinion, will put pressure on the company's liquidity; moreover, there are negative cumulative gaps for all maturities greater than three years. Currently, Metrofinanciera is on negotiations with SHF to restructure these credit lines which would result in a more comfortable amortization schedule. RATING SENSITIVITIES IDRS AND NATIONAL RATINGS The ratings could be downgraded if the pressure on its liquidity persists in the event that the company is not able to restructure its credit lines with SHF due in 2019, in the foreseeable future or if its debt to tangible capital ratio increases consistently above 8x. Ratings could also be downgraded if Metrofinanciera does not improve its profitability ratios to levels close to its break- even point within the next 12 months. The Outlook could be revised to Stable if Metrofinanciera is able to materially reverse the negative trend in its financial performance, while it continues to grow its construction loan portfolio, with continued improvements in asset quality ratios and an improvement in its debt maturity schedule for 2019 and beyond. Fitch has affirmed the following ratings: Metrofinanciera S.A.P.I. de C.V. Sofom, E.R. -- Long-term foreign currency IDR at 'B-'; -- Short-term foreign currency IDR at 'B'; -- Long-term local currency IDR at 'B-'; -- Short-term local currency IDR at 'B'; -- National Long-term rating at 'B-(mex)'; -- National Short-term rating at 'B(mex)'. The Rating Outlook of the long-term ratings is Negative. ====================== P U E R T O R I C O ====================== ALLIED FINANCIAL: Escobar Buying Aguadilla Property for $34K ------------------------------------------------------------ Allied Financial, Inc., asks the U.S. Bankruptcy Court for the District of Puerto Rico to authorize the sale of a lot of land located at Barrio Aguacate Road No. 110 Km 5.1, Aguadilla, Puerto Rico, Registered as Property Num. 30,062, at page No. 134, of Vol. 627 in Aguadilla Registry Num. 4, to Sandro Escobar for $34,412. Objections, if any, must be filed within 21 days from the date the Motion was served. The Debtor listed in its Schedules an interest in the Property. The Property has approximately 860,303 square meters. The Debtor listed it with a value of $38,714 in its Schedules. The Debtor listed Oriental Bank as a creditor with a secured claim over the Property in the amount of $38,714. It acquired the Property via Deed of Judicial Sale and Cancelation of Mortgage Note by Notary Public Shariann Morales Feliciano. It has identified the Purchaser as a potential buyer for the Property in the amount of $34,412. The offer constitutes a value equal to $40 per square meter. Although there is no recent appraisal of the Property, the Debtor is selling it for the same price per square meter as previous sales in the same area. The Purchaser is a willing and able purchaser. The sale of the Property is in benefit of the estate and all parties in interest. Oriental Bank has accepted the offer. The transfer of the Property will be free and clear of liens, and exempt from the payment of taxes, stamps and vouchers, pursuant to the provisions of 11 USC 1146, if the transaction for some reason is delayed and takes place under the Plan of Reorganization. Each of the parties to the sale will assume its own payment of expenses under the provisions of the Notary Law of Puerto Rico. Furthermore, the Debtor received from the Purchaser a check in the amount of $2,000 as a good faith deposit under the purchase option, which will be applied to the purchase price at the closing if the Purchaser exercises the option and buys the Property as per the terms and conditions of the agreement. The sale will be free and clear of all liens including, but not limited to those listed. The Property, as of the date, has property tax debt, in the total amount of $858. Any amounts owed to CRIM will be paid first with the proceeds of the sale. The Purchase Option Agreement will expire 90 days from the date of the agreement or 10 days from the date the sale is approved by the Court, whichever is later. There are no common maintenance fees or homeowners' association dues in relation to the Property, since such association does not exist. The Debtor submits that the Sale satisfies the sound business reason test, is a proper exercise of the Debtor's business judgment, and is in the best interest of the estate and should be approved. A copy of the Contract attached to the Motion is available for free at: http://bankrupt.com/misc/ALLIED_FINANCIAL_279_Sales.pdf About Allied Financial Allied Financial, Inc., filed a Chapter 11 bankruptcy petition (Bankr. D.P.R. Case No. 16-00180) on Jan. 15, 2016. In the petition was signed by Rafael Portela, president of the Board of Directors, the Debtor disclosed total assets of $10.3 million and total debt of $9.14 million. Judge Mildred Caban Flores presides over the case. C. Conde & Assoc. is counsel to the Debtor. ALLIED FINANCIAL: Redemption Right Timely Asserted, Judge Rules --------------------------------------------------------------- Judge Mildred Caban Flores of the U.S. Bankruptcy Court for the District of Puerto Rico denied WM Capital Partner 53, LLC's motion for summary judgment and granted in part and denied in part Allied Financial, Inc.'s cross-motion. Allied seeks to exercise its redemption right under Article 1425 of the Puerto Rico Civil Code. WM purchased the litigated credit from Scotiabank de Puerto Rico, who had acquired it from the Federal Deposit Insurance Corporation as receiver of R-G Premier Bank, a defunct financial institution. WM posits that federal receivership law preempts the right of redemption and if the Civil Code is not preempted, then Allied failed to timely reimburse the purchase price. The Court finds that Allied has timely asserted its redemption right, which is not preempted by federal law. In addressing whether Allied timely exercised its right of redemption under Article 1425, Judge Flores finds that WM's argument requiring from Allied full tender of the redemption price within the nine-day period after its alleged price disclosure is unfounded. Based on the uncontested facts, WM filed its motion for substitution on Oct. 8, 2015, in the Local Court Litigation. Allied notified WM of its intention to redeem under Article 1425 on that same day. Thus, Allied exercised its redemption right within the nine-day period. Allied continued its redemption action before this court and sought efforts to validate the redemption price. Thus far there is conflicting evidence in regards to the alleged reimbursement price and as such, Allied is presently unable to pay WM for the litigious credit. Once the court determines the reimbursement price, Allied may proceed with the tender or deposit in court of said funds. In the meantime, Allied timely exercised its right to extinguish the litigious credit purchased by WM and therefore WM's first count for summary judgment is denied. Turning to the issue of whether Allied's right is preempted by federal law, Judge Flores finds that WM has not met its burden to rebut the presumption of the validity of Article 1425. Regarding Allied's amended cross-motion for summary judgment, it requests in essence, that (1) WM's motion for summary judgment be denied; (2) it be allowed to raise its redemption right under Article 1425; (3) a certain amount be determined as the redemption price; and (4) WM pay its attorney's fees and costs. Judge Flores grants Allied's cross-motion for summary judgment in part as to count one and two. WM's motion for summary judgment is denied; Allied may assert its redemption right. The remaining counts are denied because disputed issues of fact exist. The redemption price is contested and will be determined at trial. Therefore, summary judgment is not the proper vehicle to address this issue. The Court shall defer considering sanctions and fees until trial is completed. The court shall enter a separate order setting a pretrial conference. WM is ordered to answer the complaint within 14 days from entry of this order. The adversary proceeding is ALLIED FINANCIAL, INC., Plaintiff, V. WM CAPITAL PARTNERS 53, LLC, Defendant, Adv. Case No. 16-00033 (MCF) Bankr. D. P.R.). A full-text copy of Judge Flores' Opinion and Order is available at https://is.gd/VMyX1v from Leagle.com. ALLIED FINANCIAL INC, Debtor, represented by CARMEN D. CONDE TORRES -- condecarmen@condelaw.com -- & LUISA S. VALLE CASTRO -- ls.valle@condelaw.com -- C CONDE & ASSOCIATES. About Allied Financial Allied Financial, Inc. filed a Chapter 11 bankruptcy petition (Bankr. D.P.R. Case No. 16-00180) on Jan. 15, 2016. The petition was signed by Rafael Portela, president of the Board of Directors. The Debtor disclosed total assets of $10.3 million and total debt of $9.14 million. C. Conde & Assoc. is counsel to the Debtor. Judge Mildred Caban Flores presides over the case. KELLERMEYER BERGENSONS: Loan Upsize Credit Neutral, Moody's Says ---------------------------------------------------------------- Moody's said that the proposed upsize of Kellermeyer Bergensons Services, LLC's first lien term loan facility is credit neutral given that credit metrics do not weaken significantly pro forma for this transaction and are offset by better liquidity and the operating benefits of the acquisitions funded by the upsize. Credit metrics remain in line with Moody's expectations for the B3 rating category given the company's operating profile. The company's ratings, including its B3 Corporate Family Rating, B2 rating on its first lien credit facilities, and its stable outlook, are not affected by this transaction. KBS is planning to utilize $40 million of incremental first lien term loan to fund the purchase of a provider of janitorial services to the food service, restaurant, entertainment and hospitality industries. The transaction results in about $10 million increase in funded debt, and slightly weakens KBS' credit metrics. However, it also enhances the company's near-term liquidity by increasing revolver availability given the repayment of outstanding borrowings. Kellermeyer Bergensons Services, LLC, based in Maumee, Ohio and Oceanside, California, is a national provider of outsourced janitorial services primarily to the retail industry. The company serves over 43,500 customer locations across 50 states, Puerto Rico and Canada. KBS was created as a result of a merger between Kellermeyer Building Services (founded in 1967) and Bergensons Property Services (founded in 1984) in 2011. The company is majority owned by GI Partners since 2014. Inclusive of recent and contemplated acquisitions, KBS' pro forma revenue base is estimated to approach $670 million as of FY 2017 versus standalone revenues of $475 million. TOYS "R" US: Seeks Court Approval to Wind Down U.S. Business ------------------------------------------------------------ Toys "R" Us, Inc., has filed a motion seeking Bankruptcy Court approval to begin the process of conducting an orderly wind-down of its U.S. business and liquidation of inventory in all 735 of the Company's U.S. stores, including stores in Puerto Rico. Toys "R" Us will provide more details about the plans for the liquidation of its U.S. stores and going out of business sales in the near term. Toys "R" Us also announced that it is pursuing a going concern reorganization and a sale process for its Canadian and international operations in Asia and Central Europe, including Germany, Austria and Switzerland. The Company's international operations in Australia, France, Poland, Portugal and Spain are considering their options in light of this announcement, including potential sale processes in their respective markets. The Company's stores in all these international markets are currently open and serving customers. In connection with the sale process, the motion the Company filed with the Bankruptcy Court included bidding procedures for the Canadian operations. The Company also disclosed that it is engaged in discussions with certain interested parties for a transaction that could combine up to 200 of the top performing U.S. stores with its Canadian operations. While discussions continue on this potential transaction, Toys "R" Us is seeking court approval to implement the liquidation of inventory in all the U.S. stores, subject to a right to recall any stores included in the proposed Canadian transaction. The previously announced administration of the UK business continues. Dave Brandon, Chairman and Chief Executive Officer, said, "I am very disappointed with the result, but we no longer have the financial support to continue the Company's U.S. operations. We are therefore implementing an orderly process to shutter our U.S. operations and will pursue going concern sales or reorganizations of certain of our international businesses, while our other international businesses consider their options." Mr. Brandon continued, "There are many people and organizations who have remained in our corner every step along the way. I want to thank our extraordinary team members who helped build Toys"R"Us into a global brand. I also want to express my appreciation for my colleagues on our board who have continued to provide support to sustain the brand and our operations throughout the restructuring process. I would also like to thank our vendors who we owe a great deal of gratitude to for their decades of support. This is a profoundly sad day for us as well as the millions of kids and families who we have served for the past 70 years." The Company and its advisors are working to minimize the impact of the U.S. liquidation on the Canadian and other international markets. As part of these efforts, the Company is implementing a transition services arrangement for the next 60 days and is developing plans for a potential shared service function to support the international operations going forward. $60 Million Funding On March 14, the Company filed a motion with the Bankruptcy Court for the Eastern District of Virginia, Richmond Division, seeking authority to (i) close all 744 of its remaining retail stores in the United States, shut down its distribution centers and discontinue and wind-down all operations through its Delaware subsidiaries ("Toys Delaware") and (ii) appoint a group of liquidators to oversee the liquidation and wind-down process. Toys Delaware intends to begin conducting store closing liquidation sales and implementing store closures as soon as possible, in each case, with the consent of the Court. In parallel with the Toys Delaware related events, the Company will seek to obtain approval of an additional $60 million of funding from its lenders, which will be funded from the escrow account to a bank account of TRU Taj upon court approval (the "TRU Taj Financing"). The funds will be available for two purposes: (i) vendor support; and (ii) working capital, subject to compliance with the terms of the additional funding, the indenture governing TRU Taj's 11% senior secured ABL DIP notes (the "DIP Notes) and its 12% senior secured notes due 2021 (the "Prepetition Notes"). In connection with the TRU Taj Financing, TRU Taj also received waivers from its lenders relating to any potential insolvency proceedings of its affiliates in Australia, France, Netherlands, Poland, Portugal and Spain and the actual bankruptcy filing of its affiliates in the United Kingdom. Cleansing Materials On March 15, 2018, Toys "R" Us, Inc., filed with the SEC copies of the cleansing materials previously shared with third parties regarding the business of the Company and its subsidiaries (the "Cleansing Material"). The Cleansing Material includes certain draft term sheets contemplating a plan of reorganization for the Company and the obligors under the Prepetition Notes. A copy of the Cleansing Material is available at: https://is.gd/fnOkxX 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. Toys "R" Us UK Toys "R" Us Limited, Toys "R" Us, Inc.'s UK arm with 105 stores and 3,000 employees, was sent into administration in the United Kingdom in February 2018. Arron Kendall and Simon Thomas of Moorfields Advisory Limited, 88 Wood Street, London, EC2V 7QF were appointed Joint Administrators on Feb. 28, 2018. The Administrators now manage the affairs, business and property of the Company. The Administrators act as agents only and without personal liability. The Administrators said they will make every effort to secure a buyer for all or part of the business. ================= V E N E Z U E L A ================= PETROLEOS DE VENEZUELA: Moody's Cuts Ratings to C; Outlook Stable ----------------------------------------------------------------- Moody's Investors Service downgraded Petroleos de Venezuela, S.A. (PDVSA)'s ratings to C from Ca. Moody's also lowered the company's baseline credit assessment (BCA) to c from ca. The rating action follows Moody's downgrade of the government of Venezuela's rating to C from Caa3 on March 9, 2018. The ratings outlook is now stable. Ratings downgraded: Issuer: Petroleos de Venezuela S.A. -- Senior Secured 1st Lien Global Notes due 2020 to C from Ca -- Senior Unsecured Global Notes due 2035 to C from Ca Outlook Actions: Issuer: Petroleos de Venezuela S.A. -- Outlook, Changed To Stable From Negative RATINGS RATIONALE The action on PDVSA's ratings considered the strong linkage between the credit risk of the company and that of Venezuela. In turn, the downgrade of the Venezuelan government's ratings were based on Moody's expectation that the continuing erosion of Venezuela's payment capacity will lead to heavy losses to bondholders, with ongoing defaults on interest payments on various bonds compounded by upcoming principal maturities, and the limits on Venezuela's ability to restructure its debt posed by current US sanctions that prevent US investors from accepting new debt instruments under a potential debt exchange, which will further exacerbate losses. The ratings of government-related issuers combine: (i) their underlying BCA, which represents the issuer's intrinsic credit risks regardless of government support and (ii) Moody's assumptions about the willingness and the ability of the respective government to provide extraordinary support in a distressed situation. In the case of PDVSA, the company's C rating is in line with that of the government's C rating because of the strong correlations between the credit risks of the two entities. PDVSA's ratings could be upgraded if a debt restructure were to reduce liquidity and refinancing risk that results in lower severity of losses to bondholders to the point of signaling a higher rating. The methodologies used in these ratings were Global Integrated Oil & Gas Industry published in October 2016, and Government-Related Issuers published in August 2017. VENEZUELA: Crude Exports to the U.S. Reach 15-year Low ------------------------------------------------------ RJR News reports that Venezuela's crude exports to the United States declined in February to a 15-year low as oil production continues falling and US President Donald Trump's administration weighs new sanctions on the OPEC country. Financial sanctions imposed by the United States in August on Venezuela and state-run oil firm PDVSA have created obstacles for selling crude cargoes to U.S. refiners, shrinking the number of customers PDVSA has in the U.S, according to RJR News. In February, PDVSA and its joint ventures sent 21 cargoes to the United States -- half the number it exported in recent years -- with a total of 378,643 barrels per day of crude, the report relays. The exports were 21 per cent lower than in January and 43 per cent below the volume shipped in February of last year, the report notes. As reported in the Troubled Company Reporter-Latin America on March 13, 2018, Moody's Investors Service has downgraded the Government of Venezuela's foreign currency and local currency issuer ratings, foreign and local currency senior unsecured ratings, and foreign currency senior secured rating to C from Caa3. Concurrently, the foreign currency senior unsecured medium term note program has also been downgraded to (P)C from (P)Caa3. The outlook has been changed to stable from negative. ================= X X X X X X X X X ================= * BOND PRICING: For the Week From March 12 to March 16, 2018 ------------------------------------------------------------ Issuer Name Cpn Price Maturity Country Curr ----------- --- ----- -------- ------- --- BA-CA Finance Cayman Lt 0.518 62.07 KY EUR AES Tiete Energia SA 6.7842 1.109 4/15/2024 BR BRL Argentina Bogar Bonds 2 39.36 2/4/2018 AR ARS Automotores Gildemeister 8.25 73.25 5/24/2021 CL USD Automotores Gildemeister 6.75 67 1/15/2023 CL USD Automotores Gildemeister 8.25 73.25 5/24/2021 CL USD Automotores Gildemeister 6.75 65.5 1/15/2023 CL USD CA La Electricidad 8.5 63.664 4/10/2018 VE USD Caixa Geral De Depositos 1.439 63.167 KY EUR Caixa Geral De Depositos 1.469 KY EUR CSN Islands XII Corp 7 68 BR USD CSN Islands XII Corp 7 66.266 BR USD Decimo Primer Fideicomiso 6 53.225 10/25/2041 PA USD Decimo Primer 4.54 43.127 10/25/2041 PA USD Dolomite Capital 13.217 73.108 12/20/2019 CN ZAR Enel Americas SA 5.75 56.172 6/15/2022 CL CLP Gol Linhas Aereas SA 10.75 35.861 2/12/2023 BR USD Gol Linhas Aereas SA 10.75 35.601 2/12/2023 BR USD Inversora Electrica 6.5 67.625 9/26/2017 AR USD Inversora Electrica 6.5 67.625 9/26/2017 AR USD MIE Holdings Corp 7.5 64.78 4/25/2019 HK USD MIE Holdings Corp 7.5 64.982 4/25/2019 HK USD NB Finance Ltd 3.88 61.816 2/7/2035 KY EUR Noble Holding 7.7 74.433 4/1/2025 KY USD Noble Holding 5.25 56.279 3/15/2042 KY USD Noble Holding 8.7 71.881 4/1/2045 KY USD Noble Holding 6.2 60.129 8/1/2040 KY USD Noble Holding 6.05 58.38 3/1/2041 KY USD Odebrecht Finance Ltd 7.5 42.5 KY USD Odebrecht Finance Ltd 5.125 56.938 6/26/2022 KY USD Odebrecht Finance Ltd 7 68.053 4/21/2020 KY USD Odebrecht Finance Ltd 7.125 41.366 6/26/2042 KY USD Odebrecht Finance Ltd 4.375 40.002 4/25/2025 KY USD Odebrecht Finance Ltd 5.25 39.211 6/27/2029 KY USD Odebrecht Finance Ltd 6 44.75 4/5/2023 KY USD Odebrecht Finance Ltd 5.25 39.018 6/27/2029 KY USD Odebrecht Finance Ltd 7.5 42.95 KY USD Odebrecht Finance Ltd 4.375 40.363 4/25/2025 KY USD Odebrecht Finance Ltd 7.125 41.635 6/26/2042 KY USD Odebrecht Finance Ltd 6 52.625 4/5/2023 KY USD Odebrecht Finance Ltd 5.125 55.873 6/26/2022 KY USD Odebrecht Finance Ltd 7 67.368 4/21/2020 KY USD Petroleos de Venezuela 8.5 74.5 10/27/2020 VE USD Petroleos de Venezuela 6 30.458 5/16/2024 VE USD Petroleos de Venezuela 6 30.517 11/15/2026 VE USD Petroleos de Venezuela 9.75 35.677 5/17/2035 VE USD Petroleos de Venezuela 9 39.279 11/17/2021 VE USD Petroleos de Venezuela 5.375 30.267 4/12/2027 VE USD Petroleos de Venezuela 8.5 72.5 10/27/2020 VE USD Petroleos de Venezuela 12.75 45.278 2/17/2022 VE USD Petroleos de Venezuela 6 30.367 5/16/2024 VE USD Petroleos de Venezuela 6 30.387 11/15/2026 VE USD Petroleos de Venezuela 9 39.316 11/17/2021 VE USD Petroleos de Venezuela 9.75 35.893 5/17/2035 VE USD Petroleos de Venezuela 6 28.346 10/28/2022 VE USD Petroleos de Venezuela 5.5 30.123 4/12/2037 VE USD Petroleos de Venezuela 12.75 45.23 2/17/2022 VE USD Polarcus Ltd 5.6 75 3/30/2022 AE USD Provincia del Chubut 4 10/21/2019 AR USD Siem Offshore Inc 4.04527 69.5 10/30/2020 NO NOK Siem Offshore 3.75176 65.75 12/28/2021 NO NOK STB Finance 2.05771 56.243 KY JPY Sylph Ltd 2.367 64.438 9/25/2036 KY USD US Capital 1.63611 54.774 12/1/2039 KY USD US Capital 1.63611 54.774 12/1/2039 KY USD USJ Acucar 9.875 67 11/9/2019 BR USD USJ Acucar 9.875 67 11/9/2019 BR USD Venezuela 13.625 68.25 8/15/2018 VE USD Venezuela 7.75 44.065 10/13/2019 VE USD Venezuela 11.95 40.785 8/5/2031 VE USD Venezuela 12.75 45.19 8/23/2022 VE USD Venezuela 9.25 39.645 9/15/2027 VE USD Venezuela 11.75 40.005 10/21/2026 VE USD Venezuela 9 36.285 5/7/2023 VE USD Venezuela 9.375 37.69 1/13/2034 VE USD Venezuela 13.625 72.25 8/15/2018 VE USD Venezuela 7 34.23 3/31/2038 VE USD Venezuela 7 59.19 12/1/2018 VE USD *********** 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 * * *