/raid1/www/Hosts/bankrupt/TCRLA

/raid1/www/Hosts/bankrupt/TCRLA_Public/180320.mbx T R O U B L E D C O M P A N Y R E P O R T E R L A T I N A M E R I C A Tuesday, March 20, 2018, Vol. 19, No. 56 Headlines A R G E N T I N A HSBC BANK ARGENTINA: Moody's Assigns Ba3 Rating to Class 10 Notes HSBC BANK ARGENTINA: Moody's Assigns Ba3 Rating to Class 9 Notes HSBC BANK ARGENTINA: Moody's Assigns Ba3 Rating to Class 8 Notes B R A Z I L AVIANCA HOLDINGS: Fitch Affirms B IDR; Changes Outlook to Stable RIO OIL 2014-1: Fitch Hikes USD2BB Notes Rating to 'BB-' D O M I N I C A N R E P U B L I C DOMINICAN REPUBLIC: Pension Fund Jumps 19% to US$10.6 Billion J A M A I C A JAMAICA: IMF Says Growth Discouraging Since Reforms Program Began M E X I C O REPSOL INTERNATIONAL: To Open 200 Gas Stations in Mexico MEXICO: Former First Lady to Run for President as Independent P U E R T O R I C O HUSKY INC: Court OK's Disclosures; April 10 Plan Hearing HUSKY INC: New Plan to Pay CRIM in Full Plus Interest in 60 Months KONA GRILL: Renaissance Technologies Reports 7.87% Stake KONA GRILL: Anson Funds Lowers Stake to 2.4% by Dec. 31 TOYS "R" US: KBRA Sees 111 Loans Totaling $4.9B With Exposure - - - - - ================= A R G E N T I N A ================= HSBC BANK ARGENTINA: Moody's Assigns Ba3 Rating to Class 10 Notes ----------------------------------------------------------------- Moody's Latin America Agente de Calificacion de Riesgo S.A., (MLA) assigned a Ba3 global local currency senior unsecured debt rating and an Aaa.ar national scale local currency debt rating to HSBC Bank Argentina S.A.'s (HSBC Argentina) tenth issuance up to ARS5,000 million, which will be due in 18 months. All ratings have stable outlook. The following ratings were assigned to HSBC Bank Argentina S.A.'s expected issuance: Class 10 up to ARS5,000 million: - Ba3 Global Local Currency Debt Rating - Aaa.ar Argentina National Scale Local Currency Debt Rating RATINGS RATIONALE HSBC Argentina's ratings consider the high probability that the bank will receive financial support from its parent, HSBC Holdings plc (HSBCH, A2 negative), in an event of stress. The benefits from parental support offset challenges related to Argentina's operating environment, which while improving has historically been very volatile. As a result of these challenges, coupled with the close credit linkages between banks and their sovereigns, HSBC Argentina's standalone credit profile is constrained at the level of Argentina's B2 sovereign rating despite the strength of its large and highly granular deposits base and strong asset quality. Despite HSBC Argentina's positioning as Argentina's sixth largest bank, its well diversified loan book, and solid corporate and investment banking franchises, net income fell sharply in 2017 to just 0.8% of tangible assets, very low by Argentine standards given the high level of inflation in the country, from 2.3% the year before. Consequently, earnings were not sufficient to compensate for capital consumed by the bank's very high 49% loan grow thin 2017, which was in line with the system average of 46%. As a result, HSBC's tangible common equity ratio fell to a relatively modest 7.8% of adjusted risk-weighted assets as of year-end 2017 from 10.7% as of year-end 2016. Asset quality remains strong, as reflected in a non-performing loan ratio of just 1.9% as of December 2017. However, this figure may be flattered by the bank's rapid loan growth and asset risk might rise as the new lending portfolio seasons. Customer deposits are the bank's largest source of funding and are derived largely from individuals and small and midsized firms contributing to funding stability. However, deposits grew by just 35% last year, well below the rate of loan growth. While the bank nevertheless remains very liquid, with cash and investments equal to 40% of total assets, reliance on market funds increased considerably, to 16% of tangible banking assets as of year-end 2017, from less than 4% the previous year. WHAT COULD CHANGE THE RATING UP/DOWN As the bank's standalone credit profile is constrained by Argentina's sovereign rating, the Ba3 global scale rating could face upward pressure if the sovereign rating were upgraded. Conversely, the global scale rating could face downward pressure if the government of Argentina were to be downgraded, and both the global and national scale ratings could be lowered if the entity's capital base, profitability, and/or asset quality were to deteriorate significantly in the absence of a sovereign rating action. The principal methodology used in these ratings was Banks published in September 2017. HSBC BANK ARGENTINA: Moody's Assigns Ba3 Rating to Class 9 Notes ---------------------------------------------------------------- Moody's Latin America Agente de Calificacion de Riesgo S.A., (MLA) assigned a Ba3 global local currency senior unsecured debt rating and an Aaa.ar national scale local currency debt rating to HSBC Bank Argentina S.A.'s (HSBC Argentina) ninth issuance of up to ARS5,000 million, which will be due in 36 months. All ratings have stable outlook. The following ratings were assigned to HSBC Bank Argentina S.A.'s expected issuance: Class 9 up to ARS 5,000 million: - Ba3 Global Local Currency Debt Rating - Aaa.ar Argentina National Scale Local Currency Debt Rating RATINGS RATIONALE HSBC Argentina's ratings consider the high probability that the bank will receive financial support from its parent, HSBC Holdings plc (HSBCH, A2 negative), in an event of stress. The benefits from parental support offset challenges related to Argentina's operating environment, which while improving has historically been very volatile. As a result of these challenges, coupled with the close credit linkages between banks and their sovereigns, HSBC Argentina's standalone credit profile is constrained at the level of Argentina's B2 sovereign rating despite the strength of its large and highly granular deposits base and strong asset quality. Despite HSBC Argentina's positioning as Argentina's sixth largest bank, its well diversified loan book, and solid corporate and investment banking franchises, net income fell sharply in 2017 to just 0.8% of tangible assets, very low by Argentine standards given the high level of inflation in the country, from 2.3% the year before. Consequently, earnings were not sufficient to compensate for capital consumed by the bank's very high 49% loan grow thin 2017, which was in line with the system average of 46%. As a result, HSBC's tangible common equity ratio fell to a relatively modest 7.8% of adjusted risk-weighted assets as of year-end 2017 from 10.7% as of year-end 2016. Asset quality remains strong, as reflected in a non-performing loan ratio of just 1.9% as of December 2017. However, this figure may be flattered by the bank's rapid loan growth and asset risk might rise as the new lending portfolio seasons. Customer deposits are the bank's largest source of funding and are derived largely from individuals and small and midsized firms contributing to funding stability. However, deposits grew by just 35% last year, well below the rate of loan growth. While the bank nevertheless remains very liquid, with cash and investments equal to 40% of total assets, reliance on market funds increased considerably, to 16% of tangible banking assets as of year-end 2017, from less than 4% the previous year. WHAT COULD CHANGE THE RATING UP/DOWN As the bank's standalone credit profile is constrained by Argentina's sovereign rating, the Ba3 global scale rating could face upward pressure if the sovereign rating were upgraded. Conversely, the global scale rating could face downward pressure if the government of Argentina were to be downgraded, and both the global and national scale ratings could be lowered if the entity's capital base, profitability, and/or asset quality were to deteriorate significantly in the absence of a sovereign rating action. The principal methodology used in these ratings was Banks published in September 2017. HSBC BANK ARGENTINA: Moody's Assigns Ba3 Rating to Class 8 Notes ---------------------------------------------------------------- Moody's Latin America Agente de Calificacion de Riesgo S.A., (MLA) assigned a Ba3 global local currency senior unsecured debt rating and an Aaa.ar national scale local currency debt rating to HSBC Bank Argentina S.A.'s (HSBC Argentina) eighth issuance of up to ARS5,000 million, which will be due in 24 months. All ratings have stable outlook. The following ratings were assigned to HSBC Bank Argentina S.A.'s expected issuance: Class 8 up to ARS 5,000 million: - Ba3 Global Local Currency Debt Rating - Aaa.ar Argentina National Scale Local Currency Debt Rating RATINGS RATIONALE HSBC Argentina's ratings consider the high probability that the bank will receive financial support from its parent, HSBC Holdings plc (HSBCH, A2 negative), in an event of stress. The benefits from parental support offset challenges related to Argentina's operating environment, which while improving has historically been very volatile. As a result of these challenges, coupled with the close credit linkages between banks and their sovereigns, HSBC Argentina's standalone credit profile is constrained at the level of Argentina's B2 sovereign rating despite the strength of its large and highly granular deposits base and strong asset quality. Despite HSBC Argentina's positioning as Argentina's sixth largest bank, its well diversified loan book, and solid corporate and investment banking franchises, net income fell sharply in 2017 to just 0.8% of tangible assets, very low by Argentine standards given the high level of inflation in the country, from 2.3% the year before. Consequently, earnings were not sufficient to compensate for capital consumed by the bank's very high 49% loan grow thin 2017, which was in line with the system average of 46%. As a result, HSBC's tangible common equity ratio fell to a relatively modest 7.8% of adjusted risk-weighted assets as of year-end 2017 from 10.7% as of year-end 2016. Asset quality remains strong, as reflected in a non-performing loan ratio of just 1.9% as of December 2017. However, this figure may be flattered by the bank's rapid loan growth and asset risk might rise as the new lending portfolio seasons. Customer deposits are the bank's largest source of funding and are derived largely from individuals and small and midsized firms contributing to funding stability. However, deposits grew by just 35% last year, well below the rate of loan growth. While the bank nevertheless remains very liquid, with cash and investments equal to 40% of total assets, reliance on market funds increased considerably, to 16% of tangible banking assets as of year-end 2017, from less than 4% the previous year. WHAT COULD CHANGE THE RATING UP/DOWN As the bank's standalone credit profile is constrained by Argentina's sovereign rating, the Ba3 global scale rating could face upward pressure if the sovereign rating were upgraded. Conversely, the global scale rating could face downward pressure if the government of Argentina were to be downgraded, and both the global and national scale ratings could be lowered if the entity's capital base, profitability, and/or asset quality were to deteriorate significantly in the absence of a sovereign rating action. =========== B R A Z I L =========== AVIANCA HOLDINGS: Fitch Affirms B IDR; Changes Outlook to Stable ---------------------------------------------------------------- Fitch Ratings has affirmed Avianca Holdings S.A.'s (Avianca Holdings) Issuer Default Rating at 'B' and revised its Rating Outlook to Stable from Negative. Fitch has also affirmed the company's existing unsecured notes ratings at 'B-'/'RR5'. The Outlook revision encompasses Avianca Holdings' capacity to maintain liquidity, leverage and margin metrics despite a very challenging environment in 2017 at levels in line with expectations previously incorporated in the ratings. The revision is also aided by prospects of Avianca Holdings' operational performance to continue benefiting from positive traffic trend in its main markets during 2018-2019. The Stable Outlook is supported by Fitch's expectations that Avianca Holdings will lower its adjusted gross leverage toward 2019. Fitch's primary concerns revolve around Avianca Holdings' liquidity position and growth strategy, which will require material spending on aircraft deliveries over the next few years. The increased aircraft related capex is a critical part of Avianca Holdings' capacity plans, but it could pressure on FCF over the intermediate term and lead to incremental borrowing. The 'B-'/'RR5' Recovery Rating of the company's unsecured notes incorporates the subordination of the notes to the significant levels of secured debt, resulting in below average recovery prospects in the event of default. The ratings also consider the vulnerability of the company's cash flow generation to fuel price variations and the inherent risks of the airline industry, as well as the carrier's capacity to maintain operational margins based on the leader position in the markets where it operates. KEY RATING DRIVERS Strike Impact in Credit Metrics Incorporated: In 2017 Avianca Holdings' operations faced a pilot strike from Sept. 20 until Nov. 13. This event reversed the positive trend observed in the company's operational margin and leverage metrics during the LTM ended in September 2017. Despite the pilot strike and its effects on fourth quarter 2017 passengers transported, which declined by 13.7%, year on year, the company was able to adjust its operations and transport 30 million passengers in 2017, similar to 2016 traffic levels. The company's 2017 operational result was USD293 million, and Avianca Holdings estimates the negative impact of the pilot strike in the company's operational results at approximately USD126 million. EBIT Margin in 6% to 7% Range: Avianca Holdings' 2017 EBIT margin was 6.6%, slightly below 2016's margin of 7.2. Fitch expects the EBIT margin for 2018 to 2019 to remain stable at around 6.5%, driven primarily by single digit growth in traffic, higher yields, and the increase in cargo activity. These positive factors should be partially counterbalanced by expected increase in fuel cost during the period. The total capacity, measured as available seat kilometres, is anticipated to increase 8% to 10% during 2018 as the company operations recovers from the pilot strike impact in 2017. High Gross Adjusted Leverage: The company's gross adjusted leverage, as measured by total adjusted debt/EBITDAR, remained high at 6.4x at the end of December 2017 versus 6.2x at year-end 2016. Fitch expects the company's gross adjusted leverage ratio to be around 6.4x and 5.7x in 2018 and 2019, respectively. Avianca Holdings' cash flow generation, as measured by EBITDAR, was USD885 million during 2017. The company held approximately USD5.7 billion in total adjusted debt at year-end 2017. Debt, as of Dec. 31, 2017, consists primarily of USD3.7 billion of on-balance-sheet debt, most of which is secured, and an estimated USD2 billion of off-balance-sheet debt associated with lease obligations. Capex Management Key for FCF and Deleverage: Fitch considers the company's capex levels and resulting FCF generation will be crucial for its financial leverage trend during the next 24 months ended in December 2019. During the LTM ended September 2017, the company's FCF generation was positive USD110 million, resulting in FCF margin (FCF/ revenues) of positive 2.5%. The company's LTM September 2017 positive FCF resulted primarily from its better operational performance with an EBIT margin of 7.1% during this period. The LTM September 2017 FCF calculation reflects USD443 million in cash flow from operations, USD281 million in net capex and USD51 million in paid dividends. Fitch expects Avianca Holdings to manage its capital intensity, measured as the capex/revenue ratio, in the 6% to 10% range during 2017 -- 2019. Fitch forecast the company to reach slightly negative to neutral FCF during 2017-2019. Limited Visibility on Potential Events; Not Incorporated in Ratings: Avianca Holdings' ratings do not factor in several potential events including the incorporation of a strategic partner, the execution of an equity increase, and/or merger and acquisition activity-related operations in the Brazilian market. Fitch considers there to be limited visibility at this point as to final outcomes and timing of each of these events but that in general the incorporation of a global carrier as a strategic partner could be a positive development. The move would allow Avianca Holdings to strengthen key areas such as market position and corporate governance. Credit Linkages and Notes' Guarantees Structure Incorporated: The ratings also reflect Avianca Holdings' corporate structure and credit linkage with its subsidiaries, Aerovias del Continente Americano S.A. (Avianca) and Grupo Taca. Combined, these two operating companies represent the main source of cash flow generation for the holding company. The significant legal and operational linkages between the two operating companies are reflected in the existence of cross-guarantee and cross-default clauses relating to the financing of aircraft acquisitions for both companies. Avianca Holdings, Grupo Taca, and Avianca Leasing are jointly and severally liable under the USD550 million unsecured notes as co-issuers. Avianca Leasing is a wholly owned subsidiary incorporated under the laws of the state of Delaware, whose obligations as a co-issuer of the notes are unconditionally guaranteed on an unsecured, senior basis by Avianca for up to two- thirds of the total issuance amount. DERIVATION SUMMARY Avianca Holdings is well positioned in the 'B' rating category relative to its regional peers given its network, route diversification, important regional market position and relatively more stable operational performance. These positive factors are tempered by the company's higher gross adjusted leverage and weaker liquidity relative to peers. Avianca Holdings' 'B' rating is below LATAM Airlines S.A. (LATAM, B+) and at the same level as GOL Linhas Aereas Inteligentes S.A. (GOL, B). The ratings distinction among the three airlines reflects differences in the financial strategies, credit access, operational performance volatility and business diversification for each airline. For 2017, Avianca Holdings generated EBIT margins of 6.6% compared to levels of 9.4% and 7% for GOL and LATAM, respectively. Avianca Holdings is expected to maintain operational margins in the 6% to 7% range during 2018 to 2019. These levels are below to those expected for LATAM and GOL during the same period. Avianca Holdings' ratings are constrained by its high gross adjusted leverage. Avianca Holdings' gross adjusted leverage of 6.4x as of Dec. 31, 2017 is at the high end of its peer group. LATAM and GOL ended 2017 with gross adjusted leverage metrics of 5.2x and 5.6x, respectively. Avianca Holdings has maintained a cash position relatively low to its annual revenues. Fitch expects the company to maintain a liquidity position of approximately 12% of its expected annual revenues levels in 2018. This liquidity position is lower than those levels expected by LATAM (18%) and GOL (15%) during the same period. Due to its debt payment schedule and expected aircraft capex levels, Fitch views Avianca Holdings' financial flexibility as lower than those observed for LATAM and GOL. KEY ASSUMPTIONS Fitch's Key Assumptions within Fitch Rating Case for the Issuer -- 2018-2019 EBIT margin approximately at 6.5%; -- 2018-2019 gross adjusted leverage, measured as total adjusted debt/EBITDAR ratio, around 6x, 6.4x in 2018; -- 2018-2019 coverage ratio, EBITDAR/(net interest expense + rents), around 1.9x; -- 2017 liquidity, measured as the readily available cash over LTM net revenues, around 12%; -- 2018-2019 FCF generation slightly negative. RATING SENSITIVITIES Developments That May, Individually or Collectively, Lead to Positive Rating Action -- Adjusted gross leverage trending to around 5x; -- EBIT margin consistently above 7%; -- Coverage ratio, measured as total EBITDAR/(interest expense plus rents) ratio, consistently above 2.3x; -- Liquidity, cash/ LTM revenues, consistently above 12%; -- Moving toward neutral-to-positive FCF. Developments That May, Individually or Collectively, Lead to Negative Rating Action -- Adjusted gross leverage remaining above 6.5x; -- EBIT margin consistently below 6%; -- Coverage ratio, measured as the total EBITDAR/(interest expense + rents), consistently below 2x; -- Liquidity, cash/ LTM revenues, consistently below 10%; -- Sustained negative FCF. LIQUIDITY Moderated Improvement in Liquidity, Debt Payment Schedule Limit Financial Flexibility: Fitch views as a positive the company's recent increase in liquidity. As of Dec. 31, 2017, Avianca Holdings had cash and equivalents of USD514 million (USD375 million as of Dec. 31, 2016), the company does not maintain unused committed credit lines. Liquidity, measured as total cash and equivalents, represented around 12% of its revenues in 2017 from 9% in 2016. Upcoming debt maturities are relatively high for the company's liquidity and expected FCF generation during 2018 -- 2019. Debt maturities during 2018 and 2019 are USD572 million and USD411 million, respectively. Fitch expects Avianca Holdings to cover its capex and debt maturities with a combination of its own cash flow generation, debt refinancing, and some incremental debt during 2018 -- 2019. FULL LIST OF RATING ACTIONS Fitch has affirmed the ratings for Avianca Holdings and its subsidiaries: Avianca Holdings S.A. (Avianca Holdings): -- Long-Term Issuer Default Rating (IDR) at 'B'; -- Long-Term Local Currency IDR at 'B'; -- USD550 million unsecured notes due in 2020 at 'B-/RR5'. Aerovias del Continente Americano S.A. (Avianca): -- Long-Term IDR at 'B'; -- Long-Term Local Currency IDR at 'B'. Grupo Taca Holdings Limited (Grupo Taca): -- Long-Term IDR at 'B'. Avianca Holdings, Grupo Taca, and Avianca Leasing are co-issuers of the USD550 million unsecured notes. The Rating Outlook was revised to Stable from Negative. RIO OIL 2014-1: Fitch Hikes USD2BB Notes Rating to 'BB-' -------------------------------------------------------- Fitch Ratings has upgraded the series 2014 notes issued by Rio Oil Finance Trust as follows: -- USD2 billion series 2014-1 notes to 'BB-' from 'CCC'; -- BRL 2.4 billion series 2014-2 special indebtedness to 'AA-sf(bra)' from 'CCCsf(bra)'; -- USD1.1 billion series 2014-3 notes to 'BB-' from 'CCC'. The notes have been assigned a Stable Rating Outlook. The upgrade on the notes is driven by the amendment to the transaction structure implemented through the sixth rescission waiver and amendment agreement executed on March 14, 2018. The ratings reflect the transaction's increased liquidity, mitigation of diversion risk and increased free cash flow given the subordination of FECAM payments. These changes, linked to a faster than expected deleveraging of the transaction, would minimize timely debt service exposure to potential disruptions. The assigned ratings are ultimately linked to Petrobras' Issuer Default Rating (IDR). Fitch's ratings on the notes address timely payment of interest and principal on a quarterly basis. The issuances are backed by royalty flows and special participations owed by oil concessionaires, predominantly operated by Petroleo Brasileiro S.A. (Petrobras), to the government of the State of Rio de Janeiro (RJS). The State of Rio de Janeiro assigned 100% of these flows to RioPrevidencia (RP), the state's pension fund, and RP sold these rights to Rio Oil Finance Trust, the issuer. KEY RATING DRIVERS Decreased Exposure to Liquidity Risk: In Fitch's opinion, changes in the sixth rescission waiver and amendment agreement regarding the amounts in deposit in the Debt Service Reserve Account (DSRA), the release of amounts in deposit in the DSRA and debt service payments to quarterly from monthly, decrease the transaction's exposure to liquidity risk. With these changes, the structure now permanently benefits from increased liquidity and can better sustain short-term variations in cash flows. Oil Revenues Dedicated Account Modification Mitigates Redirection Risk: Pursuant to the Oil Revenues Dedicated Account Modification Legislation, the RioPrevi Oil Revenues currently deposited to the RJS Oil Revenues Dedicated Account will no longer be required by legislation to be deposited into a state-owned account. Oil revenues assigned to this transaction will instead be deposited into an account under the name of the issuer. This change in the account mitigates potential redirection of flows to RJS. Expectations are that the new account will be domiciled in Banco do Brasil S.A.(BdB; BB-/Outlook Stable and AA+(bra)/Outlook Negative) in Brazil. Given BdB cannot be replaced as a collection bank, the transaction would ultimately be capped at the credit quality of BdB. FECAM Subordination Supports Debt Service Coverage Ratios: Pursuant to the FECAM Subordination Legislation the Forward FECAM Allocation will only be deducted from royalties and special participations, after quarterly debt service payments are met. The subordination of the Forward FECAM allocations, coupled with the faster than expected deleveraging of the transaction during the early amortization period, is expected to translate into Annualized Average DSCR (AADSCR), which support the rating level of the transaction. Potential Exposure Political Risk Partially Mitigated: The state's liquidity constraints, evidenced by various delays in commercial and other payments, have heightened the transactions political risk exposure. However, provisions included in the 6th rescission waiver and amendment, such as the rescission of the trapping of excess cash and of the early amortization period, will increase the cash flows returned to the State, and, in turn, decrease the transaction's exposure to potential political risk. Impact of Oil Prices Fluctuations on Performance: The gradual recovery in oil prices, coupled with the structural changes contemplated in the sixth rescission waiver and amendment are expected to translate into higher AADSCRs. These higher AADSCRS partially mitigate the exposure of the transaction to fluctuations in oil prices at the current rating level. However, a downturn in oil price environment may limit royalty and special participation flows used to pay debt service impacting the transaction rating level. Future Production Risk: The transaction benefits from growth in production levels as it increases the total royalty flows. Depressed oil prices have led Petrobras to reduce production targets on multiple occasions. Therefore, sustained low oil prices could translate into further capital expenditure cuts by Petrobras. Petrobras' Rating Downgrade: Petrobras's rating acts as the ultimate cap for the transaction, as it is the main source of cash flow generation. The company's Local and Foreign Currency IDRs were downgraded to 'BB-' with Outlook Stable following the downgrade of the Sovereign foreign currency rating to 'BB-' from 'BB' and the Country Ceiling to 'BB' from 'BB+'. RATING SENSITIVITIES The ratings are capped by the credit quality of Petrobras, the main obligor generating cash flows to support the transaction, and to the sovereign rating and country ceiling assigned to Brazil. The transaction is exposed to oil price and production volume risks. Declines in prices or production levels significantly below expectations may trigger downgrades. Additionally, the ratings are sensitive to the rating of Banco do Brasil as a direct counterparty to the transaction. =================================== D O M I N I C A N R E P U B L I C =================================== DOMINICAN REPUBLIC: Pension Fund Jumps 19% to US$10.6 Billion ------------------------------------------------------------- Dominican Today reports that the Pensions Superintendence (SIPEN) last week published its most recent report on the status of the pension fund, which stood at RD$520.1 billion (US$10.6 billion) at the end of Dec. 2017, a 19.02% jump compared to the same period of 2016, when it reached RD$436.9 billion. The pension fund accounted for 15.8% of GDP at yearend 2017, or 2.2 percentage points more than in 2016, according to Dominican Today. On its website, the SIPEN said 78.4% of the pension fund corresponds to individual capitalization funds (CCI), or RD$407.9 billion; 6.6% to individualized distribution plans (RD$33.2 billion), 0.1% to complementary plans (RD$192.8 billion; 5.3% to the Social Solidarity Fund (RD$28.3 billion) and 9.6% to the National Teacher Welfare Institute (INABIMA) (RD$50.5 billion, the report notes. 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 ============= JAMAICA: IMF Says Growth Discouraging Since Reforms Program Began ----------------------------------------------------------------- A Concluding Statement describes the preliminary findings of IMF staff at the end of an official staff visit (or 'mission'), in most cases to a member country. Missions are undertaken as part of regular (usually annual) consultations under Article IV of the IMF's Articles of Agreement, in the context of a request to use IMF resources (borrow from the IMF), as part of discussions of staff monitored programs, or as part of other staff monitoring of economic developments. The authorities have consented to the publication of this statement. The views expressed in this statement are those of the IMF staff and do not necessarily represent the views of the IMF's Executive Board. Based on the preliminary findings of this mission, staff will prepare a report that, subject to management approval, will be presented to the IMF Executive Board for discussion and decision. The economic reform program, that began in May 2013, has been a turning point for Jamaica. With broad-based social and political support for reforms, the Jamaican government -- over two administrations -- has embarked on a path of fiscal discipline, monetary and financial sector reforms, and wide-ranging structural improvements to break a decades-long cycle of high debt and low growth. Considerable progress has been achieved on macroeconomic policies and outcomes. Fiscal discipline -- anchored by the Fiscal Responsibility Law -- has been essential to reduce public debt and secure macroeconomic stability. Employment is at historic highs, inflation and the current account deficit are modest, international reserves are at a comfortable level, and external borrowing costs are at historical lows. Growth and social outcomes, however, have been discouraging. Economic growth continues to disappoint, averaging only 0.9 percent since the reforms began. Entrenched structural obstacles, including crime, bureaucratic processes, insufficient labor force skills, and poor access to finance, continue to hinder productivity and growth. Moreover, the agricultural sector's vulnerability to weather shocks exacerbated rural poverty in 2015. Not addressing these bottlenecks could pose risks for continued public support for the government's policy program. Structurally reducing the wage bill is critical for the government to reprioritize spending toward growth-enhancing projects. More expenditure is needed for infrastructure, citizen security, building agricultural resilience, health, education, and the social safety net. Creating the space for such spending will require going beyond temporary remedies like wage freezes and adjustments to non-wage benefits. It will require high-quality measures to (i) overhaul the compensation structure to retain skills and reward performance, (ii) streamline the vast and inequitable allowances structure, (iii) prioritize key government functions and shed those activities that the government can no longer afford to undertake, and (iv) change the capital-labor mix through technology upgrades, including a better monitoring of (and accountability for) government spending. Inevitably, these reforms will also lead to a reduction in the size of the public workforce. Such a holistic approach will support a durable reduction in the wage bill, without frequent discordant wage negotiations, and enhance public service delivery with fewer but better paid public employees. Improving social outcomes and fostering inclusive growth will require addressing structural bottlenecks and creating an enabling environment for the private sector. Countering both weak social outcomes and escalating crime will take time but will be essential for sustained growth. In this regard, the evidence suggests that early childhood education, interventions to improve school attendance, and skills training for the youth would foster a virtuous cycle of lower crime, higher wages, stronger growth, and increased economic opportunity, particularly for the young. Policies to support productive private investments, including improving lending to smaller businesses and reducing lending- deposit interest spreads, will help fuel such an upswing. However, the government must resist the pressure to use scarce public resources to "pick winners" (including through providing tax incentives). Instead, the goal should be a uniform, broad-based, and low rate tax system, a level playing field for business, and harmonized rules for all. Formalizing the current inflation targeting regime will help entrench macroeconomic stability and promote growth. With inflation likely to remain in the lower part of the central bank's target range, a looser monetary stance remains appropriate. Meanwhile, upcoming revisions to the Bank of Jamaica (BOJ) Act -- including a clear mandate for price stability, a reformed governance structure, and a strong central bank balance sheet -- will help institutionalize the inflation targeting framework. Also, continued development of the foreign exchange (FX) market, liquidity management and forecasting toolkit, along with upgrading the BOJ's communication practices, will improve policy signaling and enhance credibility. Successful inflation targeting will require a clear commitment to a flexible and market-determined exchange rate with limited involvement of the central bank in the currency market. This implies that FX sales should be confined to disorderly market conditions, especially given the reductions in the surrender requirements, and buy auctions should aim to build reserves in a non-disruptive way. Financial sector stability is a prerequisite for strong and sustained growth. Ongoing prudential and supervisory improvements will enhance systemic stability. While changes to investment limits for non-banks should be considered, they must be backed by a thorough assessment -- including of appropriate regulations, risk management guidelines, and supervisory arrangements -- to ensure that greater flexibility in non-banks' asset-liability management practices does not jeopardize financial stability. Introduction of a Special Resolution Regime for financial institutions will strengthen the system's safety net while putting clear requirements in place for the use of public resources. Continued reform implementation will not only safeguard hard-won gains but also deliver stronger growth and job creation . After 5 years of reforms and tenacious fiscal consolidation, risks from reform fatigue and loss of social support are high, especially as growth remains feeble and crime escalates. Addressing some of the entrenched structural problems that hamper growth is not an overnight task; these difficult reforms require continued broad- based support and policymakers' commitment to persevere with the implementation. The authorities' program, supported by the IMF's Stand-By Arrangement (SBA), remains on track. All quantitative performance criteria and structural benchmarks for the review period ending December 2017 have been met. Non-borrowed international reserves well-exceeded the program target and tax revenues for FY2017/18 were above the budget's target (reflecting the payoffs from revenue administration reforms put in place by the government over the past few years). The mission reached preliminary staff-level agreement with the authorities on a package of measures to complete the third review under the SBA. Consideration by the IMF's Executive Board is tentatively scheduled for April 2018. Upon approval, an additional US$233 million would be made available to Jamaica, bringing the total accessible credit to about US$1.033 billion. The Jamaican authorities continue to view the SBA as precautionary, an insurance policy against unforeseen external economic shocks that are beyond Jamaica's control. =========== M E X I C O =========== REPSOL INTERNATIONAL: To Open 200 Gas Stations in Mexico -------------------------------------------------------- EFE News reports that Spanish energy company Repsol inaugurated its first gas stations in Mexico, where the firm plans to open some 200 stations over the course of the year as part of a plan to capture as much as 10 percent of the market within five years. "Our first goal is to end the year 2018 with 200 stations, and from there to open between 200 and 250 stations a year to reach a market share of between 8 and 10 percent," Repsol's director for refining and marketing, Maria Victoria Zingoni, said, according to EFE News. In presenting the plan, Zingoni said that between 20 and 30 percent of Repsol gas stations will be new facilities, while the rest will be already existing stations that will be rebranded and will offer a higher standard of service and products, the report notes, EFE relays. EFE News notes that at first Repsol will focus on opening gas stations in Mexico City and the surrounding area, which is home to more than 20 million people, but the company hopes to gradually extend its service to an ever wider territory. All this is made possible by Mexico's energy reform, which opened the sector to private companies after almost 80 years of state monopoly, EFE News says. Mr. Zingoni said that the company's $430 million investment will be allocated exclusively to the acquisition and construction of service stations, EFE News says. Not to be dismissed, therefore, is the possibility that larger amounts might be invested in infrastructure such as fuel depots, pipelines and other assets, EFE News relays. Repsol notes that Mexico currently has too few gas stations to serve its population, EFE News notes. Citing figures provided by Mexico's Energy Regulatory Commission, Repsol said there are around 11,600 stations in the country, which signifies one for every 10,560 Mexicans, a much lower ratio than is found in other large countries like the United States, Germany and Brazil. In addition, no less than 40 percent of Mexican municipalities lack service stations altogether, EFE News discloses. As reported in the Troubled Company Reporter-Europe on May 3, 2016, Egan-Jones Ratings Agency downgraded the local currency and foreign currency senior unsecured ratings on debt issued by Repsol SA to B+ from BB- on April 29, 2016. MEXICO: Former First Lady to Run for President as Independent ------------------------------------------------------------- Juan Montes at The Wall Street Journal reports that Mexico's former first lady Margarita Zavala secured the needed number of citizens' signatures to run as an independent candidate in July's presidential election, a move that analysts say would divide the field of candidates and benefit front-runner Andres Manuel Lopez Obrador. Ms. Zavala, a conservative lawyer married to Felipe Calderon, who was president from 2006 to 2012, got 867,000 valid signatures across 17 states, Mexico's electoral agency said, according to The Wall Street Journal. She exceeded the required amount by 3,000 signatures, the report notes. Two other independent hopefuls, leftist Sen. Armando Rios Piter and Nuevo Leon state Gov. Jaime Rodriguez, were disqualified with insufficient valid signatures, the report relays. Aides for the two said they may challenge the decision before the electoral court, the report notes. Mr. Rios Piter said in a videotaped messaged posted on Twitter that he would demand a review "signature-by-signature, because our signatures are of flesh and bone," the report says. Mexico's electoral agency voided more than a million signatures because of irregularities, including allegedly falsified signatures, the report relays. Instead of voters' credentials, in some cases signatures were attached to copies of identifications such as membership cards of wholesale chain Costco, the report notes. "We found a lot of rubbish," said Benito Nacif, a top official at Mexico's electoral agency, the report relates. "It's shameful," he added. The decision comes two weeks before campaigning begins for the July 1 election, the report notes. It is the first time an independent candidate will run for president of Mexico after the laws were changed in 2012, the report relays. Ms. Zavala was a local lawmaker in Mexico City in the 1990s and a federal lawmaker from 2003 to 2006, the report discloses. Polls show Ms. Zavala has little chance of winning, but she could play a role in deciding the election, the report notes. The report relays that a former member of the center-right National Action Party, or PAN, Ms. Zavala remains popular among many moderate voters and PAN supporters. That could take votes from PAN candidate Ricardo Anaya, who is currently polling in second place, and widen Mr. Lopez Obrador's lead, the report notes. "All or nearly all that Zavala gains will be taken from Anaya," said Carlos Elizondo, a political scientist and columnist, notes the report. Ms. Zavala has 6% support, according to the average of five recent polls. Mr. Lopez Obrador has 41%, and Mr. Anaya 30%, while the ruling party candidate Jose Antonio Meade has 20%. Analysts say moderate voters could split their ballots among Ms. Zavala, Mr. Anaya and Mr. Meade, who support the pro-business and pro-market policies of the current administration, WSJ relates. Mr. Lopez Obrador favors a greater role of the state in the economy. WSJ recalls that Ms. Zavala's husband narrowly defeated Mr. Lopez Obrador in 2006, portraying his rival as "a danger to Mexico." Mr. Lopez Obrador, who claimed he was the victim of election fraud, boycotted Mr. Calderon's swearing-in ceremony and opposed most of his policies. "Zavala could ultimately facilitate a Lopez Obrador triumph, that's an irony," said Mr. Elizondo, the analyst, notes WSJ. Ms. Zavala left the PAN in October to seek an independent candidacy after a dispute with Mr. Anaya, who was the party president at the time. Mr. Anaya refused to organize a party primary to choose the PAN candidate, then agreed on a coalition with two leftist parties and himself as the candidate, says the report. Primaries are optional for Mexican political parties, and none of the other parties held primaries, WSJ adds. Ms. Zavala's campaign to get the signatures was mostly supported by Mr. Calderon. He was the single biggest donor, contributing some $67,000, according to public records, notes WSJ. ====================== P U E R T O R I C O ====================== HUSKY INC: Court OK's Disclosures; April 10 Plan Hearing -------------------------------------------------------- Judge Enrique S. Lamoutte Inclan of the U.S. Bankruptcy Court for the District of Puerto Rico approved Husky, Inc., and Christian Elderly Home Inc.'s disclosure statement referring to a plan of reorganization dated July 11, 2017. Objections to claims must be filed 45 days prior to the hearing on confirmation. Acceptances or rejections of the Plan may be filed in writing by the holders of all claims on/or before 14 days prior to the date of the hearing on confirmation of the Plan. Any objection to confirmation of the plan must be filed on/or before 21 days prior to the date of the hearing on confirmation of the Plan. A hearing for the consideration of confirmation of the Plan will be held on April 10, 2018 at 10:00 A.M. at Jose V. Toledo Fed. Bldg. & U.S. Courthouse, Courtroom 2, 300 Recinto Sur Street, Old San Juan, Puerto Rico. The Troubled Company Reporter previously reported that Class 5 general unsecured claims filed by governmental entities and Class 6 general unsecured claims filed by other creditors will be paid in 84 equal monthly Installments under the plan. These unsecured creditors will recover 3% of their claims. A copy of the disclosure statement is available for free at: https://is.gd/Jn6CWU About Husky Inc. Husky, Inc., based in Gurabo, Puerto Rico, is the 100% owner of Christian Elderly Home, Inc., having a current value of $1 million. It also owns a 2,320 square-meter lot with concrete building for storage located at Barrio Rincon and valued at $300,000. Husky and Christian Elderly filed separate Chapter 11 petitions (Bankr. D.P.R. Case Nos. 17-02559 and 17-02561) on April 12, 2017. Edgardo Garcia Rosario, president, signed the petitions. In its petition, Husky disclosed $1.32 million in assets and $7.63 million in liabilities. Christian Elderly disclosed $1.04 million in assets and $7.5 million in liabilities. Judge Enrique S. Lamoutte Inclan presides over the cases. Carmen D. Conde Torres, Esq., at the Law Offices of C. Conde & Associates, is the Debtors' bankruptcy counsel. HUSKY INC: New Plan to Pay CRIM in Full Plus Interest in 60 Months ------------------------------------------------------------------ Husky, Inc., and Christian Elderly Home, Inc., filed with the U.S. Bankruptcy Court for the District of Puerto Rico their proposed amended consolidated plan of reorganization. Class 2 under the amended plan consists of the allowed secured claim held by CRIM. CRlM's claim will be paid in full including interest upon disposition of the property which secures such claim. The Debtor proposes to pay CRIM's allowed secured claim in full with 60 consecutive equal monthly installments of principal plus interest. In the alternative the property is not refinanced, sold and thus surrendered to Scotiabank, CRIM shall continue to retain its lien. This class is impaired. Funding of the plan will be from the refinancing or sale of real estate property of Husky Inc., the surrendering to Scotiabank of the real estate properties of Christian Elderly Home, Inc., as the indubitable equivalent of the secured allowed claim, the collection of accounts receivable and a contribution to be made by the shareholders, as needed. If the refinancing or sale of the Husky property does not take place within 120 days from the Effective Date, Scotiabank will receive the collateral itself as the indubitable equivalent of the allowed secured claim, unless otherwise agreed. In any event, the Debtors will continue making the monthly payments to Scotiabank in the amount of $3,000 until the property is refinanced, sold or surrendered. The Debtors have also made a claim to its insurance carrier on account of the damage received by the commercial building property of Husky, Inc. due to the passing of Hurricane Maria. As of this date the Debtor is still negotiating and discussing with the insurance carrier the amounts to be awarded on account of the claim made. Any funds received on account of this claim will be used to make the necessary repairs to the property. Should there be any surplus, the same will be used to fund the plan. The Debtors will also continue making all efforts to collect the accounts receivables in order to provide distribution to creditors. A full-text copy of the Amended Consolidated Plan is available at: http://bankrupt.com/misc/prb17-02559-11-109.pdf About Husky Inc. Husky, Inc., based in Gurabo, Puerto Rico, is the 100% owner of Christian Elderly Home, Inc., having a current value of $1 million. It also owns a 2,320 square-meter lot with concrete building for storage located at Barrio Rincon and valued at $300,000. Husky and Christian Elderly filed separate Chapter 11 petitions (Bankr. D.P.R. Case Nos. 17-02559 and 17-02561) on April 12, 2017. Edgardo Garcia Rosario, president, signed the petitions. In its petition, Husky disclosed $1.32 million in assets and $7.63 million in liabilities. Christian Elderly disclosed $1.04 million in assets and $7.5 million in liabilities. Judge Enrique S. Lamoutte Inclan presides over the cases. Carmen D. Conde Torres, Esq., at the Law Offices of C. Conde & Associates, is the Debtors' bankruptcy counsel. KONA GRILL: Renaissance Technologies Reports 7.87% Stake -------------------------------------------------------- Renaissance Technologies LLC and and Renaissance Technologies Holdings Corporation reported to the Securities and Exchange Commission that as of May 2, 2017, they beneficially own 795,759 shares of common stock of Kona Grill, Inc., constituting 7.87 percent of the shares outstanding. A full-text copy of the Schedule 13G is available for free at https://is.gd/3aboRs About Kona Grill Kona Grill, Inc., headquartered in Scottsdale, Arizona, Kona Grill, Inc. -- http://www.konagrill.com/-- currently owns and operates 45 upscale casual restaurants in 23 states and Puerto Rico. The Company's restaurants offer freshly prepared food, attentive service, and an upscale contemporary ambiance. The Company's high-volume upscale casual restaurants feature a global menu of contemporary American favorites, sushi and specialty cocktails. Its menu items are prepared from scratch at each restaurant location and incorporate over 40 signature sauces and dressings, creating memorable flavor profiles that appeal to a diverse group of customers. Its diverse menu is complemented by a full service bar offering a broad assortment of wines, specialty cocktails, and beers. Kona Grill reported a net loss of $21.62 million for the year ended Dec. 31, 2016, following a net loss of $4.49 million for the year ended Dec. 31, 2015. As of Sept. 30, 2017, Kona Grill had $103.59 million in total assets, $85.61 million in total liabilities and $17.97 million in total stockholders' equity. "The Company has incurred losses resulting in an accumulated deficit of $67.3 million, has a net working capital deficit of $6.9 million and outstanding debt of $38.0 million as of September 30, 2017. These conditions together with recent debt covenant violations and subsequent debt covenant waivers and debt amendments, raise substantial doubt about the Company's ability to continue as a going concern. The ability to continue as a going concern is dependent upon the Company generating profitable operations, improving liquidity and reducing costs to meet its obligations and repay its liabilities arising from normal business operations when they become due. While the Company believes that its existing cash and cash equivalents as of September 30, 2017, coupled with its anticipated cash flow generated from operations, will be sufficient to meet its anticipated cash requirements, there can be no assurance that the Company will be successful in its plans to increase profitability or to obtain alternative financing on acceptable terms, when required or if at all," the Company stated in its quarterly report for the period ended Sept. 30, 2017. KONA GRILL: Anson Funds Lowers Stake to 2.4% by Dec. 31 ------------------------------------------------------- Anson Funds Management LP, Anson Management GP LLC, Mr. Bruce R. Winson, Anson Advisors Inc., Adam Spears and Moez Kassam disclosed in a Schedule 13G/A filed with the Securities and Exchange Commission that as of Dec. 31, 2017, they beneficially own 241,000 shares of common stock of Kona Grill, Inc., constituting 2.4 percent based on 10,104,980 shares of Common Stock issued and outstanding as of Oct. 31, 2017, as reported in the Issuer's 10-Q Quarterly report filed on Nov. 9, 2017. This amendment relates to Common Stock of Kona Grill purchased by a private fund to which Anson Funds Management LP and Anson Advisors Inc. serve as co-investment advisors. Anson Funds Management LP and Anson Advisors Inc. serve as co-investment advisors to the Fund and may direct the vote and disposition of the 241,000 shares of Common Stock held by the Fund. As the general partner of Anson Funds Management LP, Anson Management GP LLC may direct the vote and disposition of the 241,000 shares of Common Stock held by the Fund. As the principal of Anson Fund Management LP and Anson Management GP LLC, Mr. Winson may direct the vote and disposition of the 241,000 shares of Common Stock held by the Fund. As directors of Anson Advisors Inc., Mr. Spears and Mr. Kassam may each direct the vote and disposition of the 241,000 shares of Common Stock held by the Fund. A full-text copy of the regulatory filing is available at: https://is.gd/BUoBhp About Kona Grill Kona Grill, Inc., headquartered in Scottsdale, Arizona, Kona Grill, Inc. -- http://www.konagrill.com/-- currently owns and operates 45 upscale casual restaurants in 23 states and Puerto Rico. The Company's restaurants offer freshly prepared food, attentive service, and an upscale contemporary ambiance. The Company's high-volume upscale casual restaurants feature a global menu of contemporary American favorites, sushi and specialty cocktails. Its menu items are prepared from scratch at each restaurant location and incorporate over 40 signature sauces and dressings, creating memorable flavor profiles that appeal to a diverse group of customers. Its diverse menu is complemented by a full service bar offering a broad assortment of wines, specialty cocktails, and beers. Kona Grill reported a net loss of $21.62 million for the year ended Dec. 31, 2016, following a net loss of $4.49 million for the year ended Dec. 31, 2015. As of Sept. 30, 2017, Kona Grill had $103.59 million in total assets, $85.61 million in total liabilities and $17.97 million in total stockholders' equity. "The Company has incurred losses resulting in an accumulated deficit of $67.3 million, has a net working capital deficit of $6.9 million and outstanding debt of $38.0 million as of September 30, 2017. These conditions together with recent debt covenant violations and subsequent debt covenant waivers and debt amendments, raise substantial doubt about the Company's ability to continue as a going concern. The ability to continue as a going concern is dependent upon the Company generating profitable operations, improving liquidity and reducing costs to meet its obligations and repay its liabilities arising from normal business operations when they become due. While the Company believes that its existing cash and cash equivalents as of September 30, 2017, coupled with its anticipated cash flow generated from operations, will be sufficient to meet its anticipated cash requirements, there can be no assurance that the Company will be successful in its plans to increase profitability or to obtain alternative financing on acceptable terms, when required or if at all," the Company stated in its quarterly report for the period ended Sept. 30, 2017. TOYS "R" US: KBRA Sees 111 Loans Totaling $4.9B With Exposure ------------------------------------------------------------- Kroll Bond Rating Agency (KBRA) released a KBRA Credit Profile Report (KCP) highlighting the recent developments with Toys "R" Us, Inc. On March 15, 2018, Toys "R" Us filed a motion seeking authorization through bankruptcy court to wind down its U.S. operations, liquidate existing inventory and conduct store closures. The filing follows reports on March 14 that the CEO informed employees the company would shutter all of its U.S. stores, including those in Puerto Rico. The company has so far been unable to identify a potential investor or strategic buyer, and in recent days, news emerged the company has failed to remit payments to vendors. The motion also seeks to establish bidding procedures for the sale of the retailer's Canadian division. This coincides with reports indicating that toy manufacturer MGA Entertainment, Inc. is attempting to assemble its peers in the toy making industry to bid for Toys "R" Us Canada. The Canadian division also entered bankruptcy, but is in better financial health than its U.S. counterpart. MGA Entertainment is also exploring options to make a bid for up to 200 of the retailer's top-performing U.S. stores with the potential of merging operations with Toys "R" Us Canada. According to the KBRA, with a possible liquidation of the entire U.S. store portfolio looming, KBRA re-examined its $537 billion coverage universe of over 840 transactions and expanded its initial CMBS list (No More Fun "N" Games for Toys "R" Us) to include additional loans backed by properties identified as having exposure to the struggling retailer. KBRA identified 111 loans ($4.9 billion) secured by 234 properties with exposure to Toys "R" Us or Babies "R" Us. Based on allocated loan amount (ALA), approximately 110 CMBS transactions contain loans secured by properties with exposure to the retailer, of which, 89.9% are post-crisis securitizations. The largest individual exposure remains within the TRU 2016-TOYS transaction, a $494.5 million, single-borrower deal secured by 123 Toys "R" Us and Babies "R" Us stores. Eight of the 182 locations originally slated for closure serve as collateral, representing 3.9% of the transaction balance. Seven (3.8%) of these properties, along with 105 others in the portfolio (93.3%), are owned by the borrowing entity, itself indirectly owned and controlled by Toys "R" Us, Inc. The portfolio was appraised "as-is" at $878.8 million ($173/sf ) and "as vacant" at $617.9 million ($122/sf ) at issuance. The dark value implied an LTV of 80.0% as of the February 2018 remittance period. As part of its monthly coverage, KBRA said it will continue to monitor the Toys "R" Us exposure within CMBS to identify loans facing credit risk from the potential liquidation. Specifically, loans secured by properties that feature Toys "R" Us or Babies "R" Us as a tenant accounting for 50% of GLA or greater are the highest concern. Excluding the TRU 2016-TOYS transaction, three ($36.2 million) of the 111 loans within the Toys "R" Us cohort are secured by properties that are leased to the store as a single tenant, while 13 loans ($144.0 million) are secured by properties with Toys "R" Us or Babies "R" Us leases accounting for 50% or more of the GLA. KBRA's a list of CMBS with exposure to the retailer can be accessed at https://is.gd/3NhDCz 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. Liquidation of U.S. Stores Toys "R" Us, Inc., on March 15, 2018, filed with the U.S. Bankruptcy Court 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. *********** 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 * * *