/raid1/www/Hosts/bankrupt/TCRLA_Public/180524.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
L A T I N A M E R I C A
Thursday, May 24, 2018, Vol. 19, No. 102
Headlines
A R G E N T I N A
ARGENTINA: Transit Union to Strike Over Arrests of Members
ARGENTINA: Streamlines Economic Policymaking Amid Talks With IMF
BANCO DE LA NACION: Fitch Affirms IDRs at 'B', Outlook Now Stable
B O L I V I A
COOPERATIVA JESUS: Moody's Withdraws B2 LT Deposit Rating
B R A Z I L
BRAZIL: Truck Drivers Strike Over Fuel Prices
UNIGEL PARTICIPACOES: S&P Assigns 'B+' GS CCR, Outlook Stable
J A M A I C A
NOBLE GROUP: Records Another Quarterly Loss
M E X I C O
GRUPO CEMENTOS: S&P Raises CCR to 'BB+', Outlook Stable
MEXICO: Journalists Protest Against Rising Violence
P E R U
PESQUERA EXALMAR: S&P Rates $60.922MM Senior Unsecured Notes 'B-'
P U E R T O R I C O
AES PUERTO RICO: Fitch Maintains 'C' Sr. Bonds Rating on RWN
AUGUST SAGE: Case Summary & 2 Unsecured Creditors
CARIBBEAN WINDS: Case Summary & 20 Largest Unsecured Creditors
GREEN HORIZON: Case Summary & 9 Largest Unsecured Creditors
JDHG LLC: Case Summary & 6 Unsecured Creditors
V E N E Z U E L A
VENEZUELA: Election Officials Certify President Maduro's Victory
- - - - -
=================
A R G E N T I N A
=================
ARGENTINA: Transit Union to Strike Over Arrests of Members
----------------------------------------------------------
Alianza News reports that labor unions representing employees of
the Buenos Aires metro announced that they would organize a strike
because of the arrests of several of their members on May 23
during a demonstration to demand progress in wage negotiations
with the local government.
The arrests took place at the metro Line H terminal, where workers
were staging their protest by blocking the tracks, according to
Alianza News.
By 2:00 p.m., May 23, the number of arrests had risen to 16,
including Nestor Segovia, a labor union leader, the report notes.
The protest was organized by the AGTSyP union, which had called on
workers to stop the trains on three different segments of the
metro system to express their rejection of the latest round of
wage negotiations, the report discloses.
The police action at the Line H station, however, led to cashes
between cops and workers and expanded the protests to the rest of
the metro lines, the AGTSyP's Enrique Rositto said, the report
says.
"We are 200 workers who are not going to give up our jobs and who
want to continue wage negotiations," Mr. Segovia told reporters a
few hours before his arrest, the report adds.
As reported in the Troubled Company Reporter-Latin America on
May 8, 2018, Fitch Ratings has affirmed Argentina's Long-Term
Foreign-Currency Issuer Default Rating (IDR) at 'B' and revised
the Outlook to Stable from Positive.
On December 4, 2017, Moody's Investors Service has upgraded the
Government of Argentina's local and foreign currency issuer and
senior unsecured ratings to B2 from B3. The senior unsecured
shelves were upgraded to (P)B2 from (P)B3. The outlook on the
ratings is stable. At the same time, Argentina's short-term
rating was affirmed at Not Prime (NP). The senior unsecured
ratings for unrestructured debt were affirmed at Ca and the
unrestructured senior unsecured shelf affirmed at (P)Ca.
Moody's said the key drivers of the upgrade of the rating to B2
are: (1) a record of macro-economic reforms that are beginning to
address long existing distortions in Argentina's economy; and (2)
the likelihood that reforms will continue and in turn sustain
the recent return to positive economic growth.
The stable outlook on Argentina's B2 ratings balances Argentina's
credit strengths of its large, diverse economy and moderate income
levels against the credit challenges posed by still high fiscal
deficits and a reliance on external financing, which increases its
vulnerability to external event risk, said Moody's.
On Nov. 10, 2017, Fitch Ratings revised Argentina's Outlook to
Positive from Stable and has affirmed its Long Term Foreign-
Currency Issuer Default Rating (IDR) at 'B'.
On Oct. 30, 2017, S&P Global Ratings raised its long-term
sovereign credit ratings on the Republic of Argentina to 'B+' from
'B'. The outlook on the long-term ratings is stable. S&P also
affirmed its short-term sovereign credit ratings on Argentina at
'B'. At the same time, S&P raised its national scale ratings to
'raAA' from 'raA+'. In addition, S&P raised its transfer and
convertibility assessment to 'BB-' from 'B+', in line with its
assessment of sustained local access to foreign exchange.
As previously reported by the TCR-LA, Argentina defaulted on some
of its debt late July 30, 2014, after expiration of a 30-day grace
period on a US$539 million interest payment. Earlier that day,
talks with a court-appointed mediator ended without resolving a
standoff between the country and a group of hedge funds seeking
full payment on bonds that the country had defaulted on in 2001.
A U.S. judge had ruled that the interest payment couldn't be made
unless the hedge funds led by Elliott Management Corp., got the
US$1.5 billion they claimed. The country hasn't been able to
access international credit markets since its US$95 billion
default 13 years ago. On March 30, 2016, Argentina's Congress
passed a bill that will allow the government to repay holders of
debt that the South American country defaulted on in 2001,
including a group of litigating hedge funds that won judgments
in a New York court. The bill passed by a vote of 54-16.
ARGENTINA: Streamlines Economic Policymaking Amid Talks With IMF
----------------------------------------------------------------
Alianza News reports that Argentina's treasury minister chaired
the first session of the Economic Cabinet named by President
Mauricio Macri to coordinate policy as Buenos Aires negotiates a
stand-by credit line with the International Monetary Fund.
Nicolas Dujovne, who met in Washington on May 10 with IMF chief
Christine Lagarde to start the negotiations, presided over the
gathering of the ministers of the Interior, Rogelio Frigerio; of
Finance, Luis Caputo; of Labor, Jorge Triaca; of Energy and Mines,
Juan Jose Aranguren; of Modernization, Andres Ibarra; of
Agroindustry, Luis Etchevehere, and of Production, Francisco
Cabrera, according to Alianza News.
President Macri's decision to put Dujovne in charge of the
Economic Cabinet was made in the midst of a currency crisis, as
Argentina's peso has sharply depreciated against the US dollar in
the last few weeks, the report notes.
Earlier this month, President Macri disclosed his decision to
start negotiations with the IMF for a credit line to help address
the situation created by the peso's steep fall and to continue his
planned economic reforms, the report notes.
The president has called for the creation of a "great national
accord" with political, business and labor leaders to address the
budget deficit and to spur economic growth while the government
negotiates with the IMF, the report relays.
However, the prospect that the IMF -- which is deeply unpopular in
Argentina -- will once again have a major say in economic policy
has increased the sense of grievance among opponents of the
President Macri government who are already unhappy about massive
increases in utility rates, the report adds.
As reported in the Troubled Company Reporter-Latin America on
May 8, 2018, Fitch Ratings has affirmed Argentina's Long-Term
Foreign-Currency Issuer Default Rating (IDR) at 'B' and revised
the Outlook to Stable from Positive.
On December 4, 2017, Moody's Investors Service has upgraded the
Government of Argentina's local and foreign currency issuer and
senior unsecured ratings to B2 from B3. The senior unsecured
shelves were upgraded to (P)B2 from (P)B3. The outlook on the
ratings is stable. At the same time, Argentina's short-term
rating was affirmed at Not Prime (NP). The senior unsecured
ratings for unrestructured debt were affirmed at Ca and the
unrestructured senior unsecured shelf affirmed at (P)Ca.
Moody's said the key drivers of the upgrade of the rating to B2
are: (1) a record of macro-economic reforms that are beginning to
address long existing distortions in Argentina's economy; and (2)
the likelihood that reforms will continue and in turn sustain
the recent return to positive economic growth.
The stable outlook on Argentina's B2 ratings balances Argentina's
credit strengths of its large, diverse economy and moderate income
levels against the credit challenges posed by still high fiscal
deficits and a reliance on external financing, which increases its
vulnerability to external event risk, said Moody's.
On Nov. 10, 2017, Fitch Ratings revised Argentina's Outlook to
Positive from Stable and has affirmed its Long Term Foreign-
Currency Issuer Default Rating (IDR) at 'B'.
On Oct. 30, 2017, S&P Global Ratings raised its long-term
sovereign credit ratings on the Republic of Argentina to 'B+' from
'B'. The outlook on the long-term ratings is stable. S&P also
affirmed its short-term sovereign credit ratings on Argentina at
'B'. At the same time, S&P raised its national scale ratings to
'raAA' from 'raA+'. In addition, S&P raised its transfer and
convertibility assessment to 'BB-' from 'B+', in line with its
assessment of sustained local access to foreign exchange.
As previously reported by the TCR-LA, Argentina defaulted on some
of its debt late July 30, 2014, after expiration of a 30-day grace
period on a US$539 million interest payment. Earlier that day,
talks with a court-appointed mediator ended without resolving a
standoff between the country and a group of hedge funds seeking
full payment on bonds that the country had defaulted on in 2001.
A U.S. judge had ruled that the interest payment couldn't be made
unless the hedge funds led by Elliott Management Corp., got the
US$1.5 billion they claimed. The country hasn't been able to
access international credit markets since its US$95 billion
default 13 years ago. On March 30, 2016, Argentina's Congress
passed a bill that will allow the government to repay holders of
debt that the South American country defaulted on in 2001,
including a group of litigating hedge funds that won judgments
in a New York court. The bill passed by a vote of 54-16.
BANCO DE LA NACION: Fitch Affirms IDRs at 'B', Outlook Now Stable
-----------------------------------------------------------------
Fitch Ratings has revised the Rating Outlooks on the Long-Term
Foreign and Local Currency Issuer Default Ratings (IDRs) of Banco
de la Nacion Argentina (Sucursal Uruguay) (BNAUY) to Stable from
Positive. Fitch has also affirmed BNAUY's IDRs at 'B'.
KEY RATING DRIVERS
The revision of the Outlook to Stable was driven exclusively by
the same action on Banco de la Nacion Argentina (BNA), which, in
turn, mirrored the revision of the Outlook on Argentina's
sovereign rating on May. 4, 2018. BNAUY is a fully integrated
branch of Banco de la Nacion. BNA's creditworthiness is
intrinsically aligned with that of the sovereign because of the
existing explicit guarantee provided by the government BNA's
systemic importance as the largest bank in Argentina. BNA's
liabilities (including its branches abroad) are guaranteed by the
sovereign.
In Fitch's view, regardless of the overall adequate financial
condition of BNA, its creditworthiness is heavily affected by the
low sovereign rating of Argentina, given the influence of the
operating environment on the FIs performance. BNA has a leading
franchise and systemic importance in Argentina. It is the largest
bank in terms of loans and deposits, with international coverage
through branches and representative offices in seven countries.
BNAUY is the smallest bank in the country due to its narrow
business focus.
BNAUY is fully integrated with the head office's strategies,
corporate governance practices and risk management procedures.
BNAUY operates through only one main office, and its activities
are reported to the International Banking area of BNA. BNAUY has
volatile profitability, a fairly liquid balance sheet and adequate
capitalization metrics.
RATING SENSITIVITIES
IDRS, BNAUY's ratings are sensitive to changes in Argentina's
sovereign rating and/or willingness or ability to provide support
to BNA and its branches.
Fitch has taken the following rating actions:
Banco de la Nacion Argentina (Sucursal Uruguay)
--Long-term foreign currency IDR affirmed at 'B', Outlook
revised to Stable from Positive;
--Long-term local currency IDR affirmed at 'B', Outlook revised
to Stable from Positive.
=============
B O L I V I A
=============
COOPERATIVA JESUS: Moody's Withdraws B2 LT Deposit Rating
---------------------------------------------------------
Moody's Latin America Agente de Calificacion de Riesgo announced
that it has withdrawn all of its ratings for Cooperativa Jesus
Nazareno LTDA for business reasons.
The following ratings of Cooperativa Jesus Nazareno LTDA were
withdrawn:
- Long-term global local currency deposit rating, previously
rated B2
- Short-term global local currency deposit rating, previously
rated Not Prime
- Long-term global foreign currency deposit rating, previously
rated B2
- Short-term foreign currency deposit rating, previously rated
Not Prime
- Bolivian long-term national scale local currency deposit
rating, previously rated Baa1.bo with stable outlook
- Bolivian Short-term national local currency deposit rating,
previously rated BO-2
- Bolivian long-term national scale foreign currency deposit
rating, previously rated Baa1.bo with stable outlook
- Bolivian Short-term national foreign currency deposit rating,
previously rated BO-2
- Baseline credit assessment, previously rated b2
- Adjusted baseline credit assessment, previously rated b2
- Long-term counterparty risk assessment, previously rated
B1(cr)
- Short-term counterparty risk assessment, previously rated Not
Prime(cr)
The outlook of Cooperativa Jesus Nazareno LTDA was stable.
RATINGS RATIONALE
Moody's has decided to withdraw the ratings for its own business
reasons.
===========
B R A Z I L
===========
BRAZIL: Truck Drivers Strike Over Fuel Prices
---------------------------------------------
Paulo Trevisani at The Wall Street Journal reports that truck
drivers went on strike in Brazil against rising fuel prices for
the second day, threatening the country's sluggish recovery and
pushing its cash-strapped government into a corner.
Truckers complain that the cost of diesel fuel, which represents
about 42% of their costs, is up 16% from a year ago, according to
The Wall Street Journal. They have been blocking highways and
urban traffic across the country, disrupting transportation in a
nation that relies heavily on road transportation, the report
notes.
The national truckers association Abcam said that 200,000 of the
country's nearly 1 million self-employed truck drivers are
demanding that state oil giant Petroleo Brasileiro SA, or
Petrobras, stop letting international oil prices trickle through
to the pump, the report notes. They also call for a reduction in
fuel taxes, the report relays.
"Truckers are outraged," said an Abcam spokeswoman, the report
notes. "The government needs to find a solution," she said,
adding there is no date set for the strike to end, the report
relays.
A solution, however, could be tricky. Investors react negatively
to government meddling in Petrobras, and revenue from fuel taxes
is key to curbing a gaping hole in the national budget, the report
discloses.
"Any political interference would be very negative," said Rafael
Passos, a Petrobras analyst at Guide Investimentos asset-
management firm, the report notes. The oil company's policy
change in 2016, linking the price of fuel more closely to the cost
of oil, "was a major victory for Petrobras," he added.
When oil prices remained above $100 a barrel between 2012 and
2014, the Brazilian government forced Petrobras to bear the brunt
of higher costs and keep pump prices stable, sending the company's
debt load to more than $100 billion in 2016, the report says.
Petrobras has since been permitted to adjust its sale price
according to global markets, helping reduce its debt to an
estimated $77 billion this year, the report discloses.
Rising fuel prices "simply reflect international markets and the
exchange rate," Petrobras Chief Executive Pedro Parente told
reporters, the report relays.
The company says taxes represent as much as 45% of the price at
the pump, the report notes. Prices were raised last year as
Brazil's budget shortfall reached a worrisome 7% of gross domestic
product after two years of recession, the report discloses.
Brazil's GDP grew only 1% last year and is forecast to expand 2.5%
in 2018, the report adds.
Finance Minister Eduardo Guardia said that there is "little room"
for tax cuts, the report notes.
The truckers strike comes as Brazilians gear up for general
elections in October, the report relays. The next administration
will likely need to address the budget crisis to avoid a selloff
in the country's stocks and currency, economists say, but anti-
reform candidates are leading the polls, sending jitters through
markets and helping weaken the currency, the report adds.
UNIGEL PARTICIPACOES: S&P Assigns 'B+' GS CCR, Outlook Stable
----------------------------------------------------------
S&P Global Ratings assigned its long-term 'B+' global scale
corporate credit rating and 'brA-' national scale rating to Unigel
Participacoes S.A. (Unigel). The outlook is stable.
S&P said, "At the same time, we assigned our 'B+' issue-level
rating on Unigel Luxembourg S.A.'s $200 million senior secured
notes maturing in 2024, which are fully and unconditionally
guaranteed by Unigel and the subsidiary guarantors (Acrilonitrila
do Nordeste S.A., Companhia Brasileira de Estireno, Proquigel
Qu°mica S.A., and Plastigas de Mexico S.A.). The '3' recovery
rating on the notes indicates our expectation of meaningful
recovery (rounded estimate: 65%) in the event of default.
"The ratings are in line with the preliminary ratings we assigned
on March 5, 2018. Instead of the expected seven-year $400 million
senior unsecured debt, the company issued five-year $200 million
secured notes. Other differences from the previous expected
scenario are a slightly more expensive all-in cost (including
hedging) and inclusion of certain restrictions on dividend
payments. Although from a liquidity perspective, this change
doesn't affect the final rating, we believe the company's
financial flexibility has weakened somewhat compared to the
original expected issuance, given that almost all of the company's
assets are pledged to the current debt. Please refer to the
liquidity section for further details.
"Our ratings on Unigel reflect the company's overall limited scale
in the commoditized styrenics and acrylics markets, even though
its leading position in Latin America partially offsets its small
size. Unigel produces methyl methacrylate (MMA) and acrylonitrile
in two units in the Bahia state, polystyrene in the Sao Paulo
state, and cell cast acrylic sheets in Mexico--generating EBITDA
of about R$365 million in 2017. The ratings also incorporate our
expectation that Unigel will continue to keep its leverage at more
sustainable levels, especially after selling its non-core
packaging business in 2016, coupled with reduced liquidity
pressures and expected improved cash flow generation through the
successful placement of its proposed bonds."
=============
J A M A I C A
=============
NOBLE GROUP: Records Another Quarterly Loss
-------------------------------------------
RJR News reports that Noble Group, part owner of the Jamalco plant
in Jamaica, slumped to another quarterly loss in the first three
months of this year as it scrambled to secure a survival plan.
The Singapore-listed trader recorded a net loss of US$72 million
in the three months to March, compared to a loss of US$129 million
in the same period a year ago, according to RJR News.
Its core trading business posted losses of US$44 million before
the expense of running costs and financing, the report notes.
The results would have been worse if not for a big contribution
from a joint venture in which Noble holds an interest, the report
adds.
===========
M E X I C O
===========
GRUPO CEMENTOS: S&P Raises CCR to 'BB+', Outlook Stable
-------------------------------------------------------
S&P Global Ratings raised its long-term corporate rating on Grupo
Cementos de Chihuahua, S.A.B. de C.V. (GCC) to 'BB+' from 'BB'.
The outlook is stable.
S&P said, "At the same time, we raised our issue-level rating on
its $260 million senior unsecured notes due 2024 to 'BB+' from
'BB'. The recovery rating remains '3', indicating our expectation
for meaningful recovery prospect (50%-90%; rounded estimate: 65%)
for its bondholders in the event of a payment default.
"We raised the ratings on GCC to reflect the company's sustained
improvement in both its operating performance and credit metrics.
In particular, GCC's has bolstered its leverage, reaching an
adjusted debt to EBITDA ratio of 1.9x and free operating cash flow
(FOCF) to debt of 21% for the 12 months ended March 2018. This
compares favorably with its adjusted EBITDA to debt ratio of 2.9x
and FOCF to debt ratio of 19.1% in the same period last year.
"The stable outlook reflects our expectation that GCC will
maintain solid operating and financial performance over the next
12 months, considering favorable cement demand conditions in the
U.S. We also expect its EBITDA margin to remain above 25%, and a
strong continued focus on FOCF generation. As a result, we expect
GCC's adjusted debt to EBITDA to remain below 2.0x at the end of
2018."
MEXICO: Journalists Protest Against Rising Violence
---------------------------------------------------
EFE News reports that journalists from the southern Mexican state
of Guerrero protested to demand government protection, while
calling on international organizations to intercede amidst a
growing wave of violence.
Some 80 journalists participated in the protest march in
Chilpancingo, the state capital, saying that they would carry out
similar demonstrations every month, according to EFE News.
In a joint statement, the journalists said Guerrero "has collapsed
because of narco-violence, impunity and institutional corruption,"
adding that no progress had been made in the investigations
regarding the murders of reporters Francisco Pacheco, in April
2016, and Cecilio Pineda, in March 2017, the report notes.
The statement calls on international organizations to review the
"precarious situation" that reporters must face in Mexico and
especially in Guerrero, the report relays.
The statement also accuses Guerrero Gov. Hector Astudillo of
having named as head of the state protection system for
journalists a person linked to organized crime groups, the report
discloses.
The Pacific resort city of Acapulco, located in Guerrero, is one
of the cities that has most been affected by crime and violence in
Mexico, the report notes.
A recent report from the non-profit Citizens' Council for Public
Security and Criminal Justice said that Acapulco was the third
most violent city in the world in 2017, with a homicide rate of
106.6 per 100,000 residents, just behind the resort town of Los
Cabos, Mexico, and the capital of Venezuela, Caracas, the report
says.
Last year, 12 journalists were murdered in Mexico because of their
work, the same number as in Syria, and at least 115 journalists
have been killed in Mexico since the year 2000, the report adds.
=======
P E R U
=======
PESQUERA EXALMAR: S&P Rates $60.922MM Senior Unsecured Notes 'B-'
-----------------------------------------------------------------
S&P Global Ratings assigned its 'B-' issue-level rating to
Pesquera Exalmar S.A.A.'s (Exalmar; B-/Negative/--) senior
unsecured notes for $60.922 million due 2025 that it issued on
Feb. 9, 2018.
On Feb. 6, 2018, Exalmar completed the exchange offer of $60.922
million of its outstanding 7.375% senior notes due 2020 for the 8%
senior notes due 2025, the plans for which the company announced
at the end of 2017. In S&P's view, the transaction didn't
constitute a distressed exchange because the company announced the
offer well in advance of the existing notes' 2020 maturity, and
the offer incorporated a par-value exchange with a higher interest
rate. The transaction extended Exalmar's debt maturity profile.
The rating on the notes is at the same level as the corporate
credit rating, given that the notes rank equally with all of the
company's other unsecured senior debt. Exalmar's priority debt
ratio represents around 20% of total debt. Given that this ratio
is less than 50%, the senior unsecured notes are not subordinated.
The credit rating on Exalmar reflects its liquidity constraints,
because the company has to address the January 2020 maturity on
its remaining senior unsecured notes for around $108 million.
Failure to execute a liability management plan during 2018 would
result in a higher refinancing risk, and therefore could trigger a
downgrade.
RATINGS LIST
Pesquera Exalmar S.A.A.
Corporate Credit Rating B-/Negative/--
Senior Unsecured B-
Rating Assigned
Pesquera Exalmar S.A.A.
Senior Unsecured notes B-
======================
P U E R T O R I C O
======================
AES PUERTO RICO: Fitch Maintains 'C' Sr. Bonds Rating on RWN
------------------------------------------------------------
Fitch Ratings has maintained the Rating Watch Negative on the
following AES Puerto Rico L.P. (AES PR) securities issued through
the Puerto Rico Industrial, Tourist, Educational, Medical &
Environmental Control Facilities Financing Authority:
--$161.87 million ($160.57 million) cogeneration facility
revenue bonds series A (tax-exempt bonds) due June 2026 at 'C';
--$33.1 million ($32.83 million) cogeneration facility revenue
bonds, series B (taxable bonds) due June 2022 at 'C'.
KEY RATING DRIVERS
AES PR's 'C' rating reflects Fitch's view of the credit quality of
the Puerto Rico Electric Power Authority (PREPA) rated 'D'. PREPA
is the revenue counterparty under AES PR's power purchase
agreement (PPA) and its rating constrains AES PR's rating. A
payment default and negative rating action by Fitch is likely
should PREPA fail to make payments under the PPA, and would become
a real possibility should PREPA try to renegotiate the PPA under
bankruptcy proceedings.
Contracted Revenue Profile - Revenue Risk: Weaker
The 25-year tolling-style PPA with a non-investment-grade
counterparty mitigates some risk of exposure to capacity price,
energy margin, and dispatch risks throughout the debt term,
subject to project availability and heat rates. However, there are
concerns regarding the offtaker's ability to make future
contractual payments given its financial and operational
difficulties that have been exasperated by Hurricane Maria.
Uneven Operations - Operation Risk: Weaker
AES PR has historically been susceptible to forced outages that
have reduced availability and capacity payments. Further, the
operating cost profile has exceeded original estimates. Management
has taken a proactive approach to limit forced outages with some
results, though extended scheduled outages have negatively
impacted project availability in some periods.
Manageable Supply Risk - Supply Risk: Midrange
Fuel supply risk is mitigated by a two-year, fixed-price fuel
supply agreement sufficient to meet the project's expected fuel
requirements through 2019. The short-term risk of the agreement is
mitigated by the historical precedence for renewal and liquid
market for coal. Fuel price risk is mitigated by the tolling-style
PPA, subject to heat rates. Ash inventory is actively managed by
the project via the sale of its various ash products. AES-PR's
efforts have helped to offset near-term ash disposal concerns, but
cash flow uncertainty is heightened without a permanent solution.
Weak Structural Features - Debt Structure: Weaker
The project's bonds are fixed-rate and mature within the PPA term
but have back-loaded amortization profiles. AES-PR does not have
O&M or major maintenance reserves, which increases the importance
of operational stability and heightens the project's reliance on
other sources of liquidity. The equity distribution, leverage, and
debt service reserve provisions are consistent with standard
project finance structures. Approximately 55% of the total debt
outstanding, including unrated bank loans, is variable-rate with
over 80% synthetically fixed with investment-grade counterparties.
Financial Profile
The project's 'C' rating is guided by Fitch's ratings definitions
and by the assessments assigned for all the qualitative key rating
drivers. For projects in this rating category, rating case
coverages provide little additional information to evaluate the
risk of default. By definition, the rating suggests that this
issuer has little capacity to navigate adverse economic
conditions.
RATING SENSITIVITIES
Future Developments That May, Individually or Collectively, Lead
to Negative Rating Action:
--PREPA's continued failure to meet its payment obligations
would likely impact the rating on AES Puerto Rico;
--PREPA's attempts to renegotiate the PPA under its insolvency
proceedings that negatively impact the project's cash flows and
ability to service debt;
--Poor plant performance could limit the project's standalone
credit profile.
Future Developments That May, Individually or Collectively, Lead
to Positive Rating Action:
--An upgrade to PREPA's long-term rating;
Sustained improvements to plant availability or heat rate.
CREDIT UPDATE
Performance Update
AES PR's rating reflects the rating of PREPA, which Fitch
downgraded to 'D' on July 6, 2017, after PREPA commenced the
insolvency proceedings under Title III of the Puerto Rico
Oversight, Management, and Economic Stability Act (PROMESA) on
July 2, 2017 and failed to pay principal and interest due on its
revenue bonds on July 3, 2017.
The project's unique position in Puerto Rico's power market
suggests that PREPA may continue to make payments to the project.
PREPA needs the power supplied by AES PR, as it is Puerto Rico's
lowest cost power producer, and has continued to make payments
under the PPA even if with significant delays. Overall demand on
the island is significantly lower than pre-hurricane levels, and
is unlikely to recover soon as many people have left the island
and a significant amount of economic activity has disappeared.
Even with this lower demand, the project remains an essential
component of the power sector in Puerto Rico. Nevertheless, there
is a risk that PREPA will not have sufficient funds to pay the
project or will try to renegotiate the PPA in its restructuring
process, adversely affecting AES PR's cash flows.
The project is getting over the worst of Hurricane Maria's
aftermath. Monthly availability was high starting in November and
remained above 96%, while 12-month rolling availability used to
calculate capacity revenues under the PPA trailed just below 90%.
Under the PPA, AES PR must maintain a 12-month rolling effective
availability factor (EAF) above 90% to earn the full capacity
payment from PREPA. Over the past five years, the project's EAF
has drifted between 85% to 95% with intermittent dips below the
PPA threshold. The project indicated that it is entitled to 97% to
98% of capacity revenues depending on the month for the review
period.
Although both units were available starting Oct. 19, 2017, they
were not generating power because transmission lines were down.
The capacity factor was zero in October, November, December and
January, but has been steadily climbing in the last several
months. One of the units was dispatched in February, while the
second unit was dispatched in March, significantly increasing
capacity factors. However, since only one of the transmission
lines connecting the facility was restored, for operational
dependability reasons PREPA limited the project's dispatch. Recent
restoration of the second transmission line should allow much
higher dispatch, and absent any operational issues, management
expected the capacity factor to exceed 90% in June.
Earlier in May the project received a significant payment from
PREPA under the PPA, which will allow it to meet its debt service
obligations, replenish debt service reserves (to $14 million for
the bond debt and $15 million for the bank loan) and fund
operations through the middle of August. The project could rely on
the debt service reserve to meet the August debt service payment
but will need PREPA's continued payments to finance operations.
The project should continue to receive payments from PREPA under
the PPA, as was communicated by PREPA's incoming management team.
There remains some uncertainty over the amounts owed to the
project when it was available, which were not made due to the lack
of transmission infrastructure. This issue is being negotiated
with the offtaker.
Under the Forbearance Agreement negotiated with the lending banks
last year, the principal payment owed under bank loans in November
2017 was postponed to March 2018, providing the project with
additional time to collect owed revenues and service debt. The
project made that catch-up payment in March of 2018, and is back
to its regular debt service schedule, removing this liquidity
concern.
As of Feb. 23, 2018, the 12-month historic DSCR was 0.9x, which
deteriorated from 1.01x for 12-month period ending Nov. 25, 2017.
With PREPA's recent payments, the project expects to replenish its
debt service reserves that were used for recent debt payments. It
expects the 12-month projected DSCR to reach 2.15x, driven
primarily by much lower debt service payments, which are
approximately half of 2017 debt service, and the project's return
to generation. The project is managing its short-term liquidity
position. However, long-term it remains dependent on PREPA's
continued payments to fund operations. PREPA's long-term financial
position and restructuring plans will continue to have an outsized
effect on the project.
Asset Description
AES Puerto Rico, L.P. owns and operates a net 454 megawatt coal-
fired circulating fluidized bed combustion power plant in Guayama,
Puerto Rico. The project delivers electric energy and capacity to
PREPA under the terms of a 25-year PPA. The PPA is structured as a
modified tolling agreement that reimburses the project's fuel and
O&M costs.
AUGUST SAGE: Case Summary & 2 Unsecured Creditors
-------------------------------------------------
Debtor: August Sage Holdings LLC
PMB 363
1357 Ashord Ave
San Juan, PR 00907
Business Description: August Sage Holdings LLC owns three
properties in San Juan, Puerto Rico
consisting of: (a) 423.72 square meters with
a two-story residence (Wind Chimes Hotel);
(b) 393.57 square meters with a two-story
residence (Wind Chimes Inn Hotel; and (c)
546.07 square meters with a two-story
residence (known as Cervantes 12). The
Company valued the Properties at $2.1
million in the aggregate.
Chapter 11 Petition Date: May 21, 2018
Court: United States Bankruptcy Court
District of Puerto Rico (Old San Juan)
Case No.: 18-02808
Judge: Hon. Enrique S. Lamoutte Inclan
Debtor's Counsel: Charles Alfred Cuprill, Esq.
CHARLES A. CUPRILL, PSC LAW OFFICES
356 Calle Fortaleza
Second Floor
San Juan, PR 00901
Tel: 787 977-0515
Email: cacuprill@cuprill.com
ccuprill@cuprill.com
Total Assets: $2.10 million
Total Liabilities: $1.94 million
The petition was signed by John B. Dennis Brull, president.
A full-text copy of the petition containing, among other items, a
list of the Debtor's two unsecured creditors is available for free
at:
http://bankrupt.com/misc/prb18-02808.pdf
CARIBBEAN WINDS: Case Summary & 20 Largest Unsecured Creditors
--------------------------------------------------------------
Debtor: Caribbean Winds Inc.
PMB 363
1357 Ashford Ave
San Juan, PR 00907
Business Description: Caribbean Winds Inc. owns in fee simple
the Acacia Seaside Inn Hotel located at No.
8 Taft Street, Santurce Ward, San Juan,
Puerto Rico having an appraised valued of
$1.4 million.
Chapter 11 Petition Date: May 21, 2018
Court: United States Bankruptcy Court
District of Puerto Rico (Old San Juan)
Case No.: 18-02809
Judge: Hon. Brian K. Tester
Debtor's Counsel: Charles Alfred Cuprill, Esq.
CHARLES A. CUPRILL, PSC LAW OFFICES
356 Calle Fortaleza
Second Floor
San Juan, PR 00901
Tel: 787 977-0515
Email: cacuprill@cuprill.com
ccuprill@cuprill.com
Total Assets: $7.06 million
Total Liabilities: $20.22 million
The petition was signed by John B. Dennis Brull, president.
A full-text copy of the petition containing, among other items, a
list of the Debtor's 20 largest unsecured creditors is available
for free at:
http://bankrupt.com/misc/prb18-02809.pdf
GREEN HORIZON: Case Summary & 9 Largest Unsecured Creditors
-----------------------------------------------------------
Debtor: Green Horizon Inc.
pka Ixy Dixy Inc.
PMB 363
1357 Ashford Ave
San Juan, PR 00907
Business Description: Green Horizon Inc. is the fee simple owner
of Blue Horizon Boutique Hotel located at
State Road 996 km 4.3, La Hueca Sector,
Puerto Real Ward, Vieques, Puerto Rico
having an appraised value of 2.15 million.
Chapter 11 Petition Date: May 21, 2018
Court: United States Bankruptcy Court
District of Puerto Rico (Old San Juan)
Case No.: 18-02811
Judge: Hon. Enrique S. Lamoutte Inclan
Debtor's Counsel: Charles Alfred Cuprill, Esq.
CHARLES A. CUPRILL, PSC LAW OFFICES
356 Calle Fortaleza
Second Floor
San Juan, PR 00901
Tel: 787 977-0515
Email: cacuprill@cuprill.com
ccuprill@cuprill.com
Total Assets: $2.57 million
Total Liabilities: $19.71 million
The petition was signed by John B. Dennis Brull, president.
A full-text copy of the petition containing, among other items, a
list of the Debtor's nine unsecured creditors is available for
free at:
http://bankrupt.com/misc/prb18-02811.pdf
JDHG LLC: Case Summary & 6 Unsecured Creditors
----------------------------------------------
Debtor: JDHG LLC
PMB 363
1357 Ashford Ave
San Juan, PR 00907
Business Description: JDHG LLC owns hotel furniture and fixtures
at Wind Chimes Inn located in San Juan,
Puerto Rico and boat bar equipment valued at
$65,255 in total. The Company has
accounts receivable of $4.6 million.
Chapter 11 Petition Date: May 21, 2018
Court: United States Bankruptcy Court
District of Puerto Rico (Old San Juan)
Case No.: 18-02810
Judge: Hon. Mildred Caban Flores
Debtor's Counsel: Charles Alfred Cuprill, Esq.
CHARLES A. CUPRILL, PSC LAW OFFICES
356 Calle Fortaleza
Second Floor
San Juan, PR 00901
Tel: 787 977-0515
Email: cacuprill@cuprill.com
ccuprill@cuprill.com
Total Assets: $4.67 million
Total Liabilities: $19.24 million
The petition was signed by John B. Dennis Brull, president.
A full-text copy of the petition containing, among other items, a
list of the Debtor's six unsecured creditors is available for free
at:
http://bankrupt.com/misc/prb18-02810.pdf
=================
V E N E Z U E L A
=================
VENEZUELA: Election Officials Certify President Maduro's Victory
----------------------------------------------------------------
EFE News reports that Venezuela's National Electoral Council (CNE)
proclaimed Nicolas Maduro to be head of state after his reelection
in the vote, a process questioned by the domestic opposition and
described as fraudulent by many foreign governments.
CNE Chair Tibisay Lucena headed the act of proclamation,
adjudication and the awarding of credentials to Maduro, who
defeated his main challenger Henri Falcon by 67.81 percent to 21
percent, according to EFE News.
The report notes that Ms. Lucena said that more than 6.2 million
votes were cast in favor of Maduro amid a turnout of 9.1 million,
or 46 percent of those eligible to cast ballots, the lowest in two
decades.
Mr. Falcon, a former supporter of Maduro's predecessor and
political mentor, the late Hugo Chavez, has said he will not
accept the results announced, a position also taken by Luis Emilio
Rondon, the only government critic among the five members of the
CNE, the report says.
The MUD opposition alliance did not take part in the election
because they considered it fraudulent, and called on people to
boycott the vote, the report discloses.
The report notes that Ms. Lucena dismissed all the questioning of
the results expressed by various governments including the United
States and Spain, and said that Venezuelans will see to it that
the electoral results announced are respected.
"We've been astonished to see governments and multilateral
organizations participate in this siege against national
sovereignty, financing campaigns in the media and social networks
to promote abstention and the lynching of candidacies, all for the
purpose of driving out democracy and peace," she added, the report
relays.
She added that the complaints expressed up to now by the
Venezuelan opposition are not supported by any evidence and do not
put in doubt the will of the people as expressed in the balloting,
and which gives Maduro the power to govern until the year 2025,
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.
***********
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 * * *