/raid1/www/Hosts/bankrupt/TCRLA

/raid1/www/Hosts/bankrupt/TCRLA_Public/180906.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, September 6, 2018, Vol. 19, No. 177 Headlines A R G E N T I N A ARGENTINA: Needs Expanded IMF Help to Contain Currency Crisis RIO ENERGY: Moody's Reviews B3 Sr. Sec. Bond Rating for Downgrade B R A Z I L CENTRAIS ELETRICAS: Sells Three Subsidiaries at Auction ENERGISA SA: Sees Challenge in Eletrobras Distributors ENERGISA SA: Fitch Affirms 'BB' FC IDR, Outlook Stable LIGHT SERVICOS: Moody's Ups Sr. Unsec. Notes to Ba3 MARFRIG SA: Taps Eduardo Miron as New Chief Executive Officer D O M I N I C A N R E P U B L I C DOMINICAN REPUBLIC: Refutes World Bank's Stance on Rising Debt J A M A I C A DIGICEL GROUP: Wins Bid to Rebuild Dominica's Telecoms Services P U E R T O R I C O MODERN RADIOLOGY: 1st Cir. Upholds Former Accountant's Sentence POLICLINICA FAMILIAR: Disclosure Statement Hearing Set for Oct. 17 ROTULOS VILLEGAS: Taps Heriberto Acevedo as Accountant TOYS R US: Toys Delaware Plan is Ambush, U.S. Trustee Says - - - - - ================= A R G E N T I N A ================= ARGENTINA: Needs Expanded IMF Help to Contain Currency Crisis ------------------------------------------------------------- Mohamed A. El-Erian at Bloomberg News report that when they meet to discuss the currency crisis, senior officials from Argentina and the International Monetary Fund will seek a response that strikes a balance between domestic policy changes and external financing aid, a task that has been complicated by political and trust issues. While Argentina is almost certain to get some concessions from the IMF, a decisive solution will be far more difficult and will require a lot of courage and skillful risk- taking on both sides, according to Bloomberg News. Argentina's currency woes have deepened in recent weeks despite determined policy responses on the part of the government and the central bank (after some missteps), as well as a $50 billion financial package from the IMF, Bloomberg News notes. A large part of the reason for the lack of success is the insufficient initial acknowledgement of the adverse technical and illiquidity forces that have been battering the emerging-market asset class, and have yet to play themselves out, Bloomberg News says. As a result, Argentina's economic slowdown will worsen, the inflation rate will spike, debt-servicing tensions will increase, the banking system will come under greater pressure and the risk of disruptive capital flight will grow, Bloomberg News relays. Recognizing this risk, Argentine President Mauricio Macri armed Finance Minister Nicolas Dujovne with additional domestic adjustment measures to present to IMF Managing Director Christine Lagarde in Washington, Bloomberg News notes. While full details haven't been disclosed, taxes on exports and cutbacks in government ministries appear to be the biggest elements of a policy package aimed at further reducing the budget deficit and providing a better context for the IMF to, at a minimum, accelerate the scheduled disbursements under the existing financial arrangement, Bloomberg News relays. You'd think markets would be impressed with this carefully choreographed effort to combine further domestic policy adjustments with further external financial support, Bloomberg News relays. But instead of rebounding from its brutal depreciation, the Argentine peso weakened further after the proposed policy package was disclosed, threatening to set a new record low, Bloomberg News says. There are understandable economic, political and technical reasons for this, notes the report. On the economic front, markets are worried about the combination of further -- and, especially, excessive -- austerity and insufficient pro-growth structural reforms, Bloomberg News discloses. Together, these steps could hit the domestic corporate sector with a demand collapse that would aggravate rather than alleviate the impact of the currency crisis on its ability to raise fresh capital and meet debt service obligations, Bloomberg News relays. Moreover, unless it is very skillfully crafted, the return to export taxation could undermine the country's ability to generate the foreign exchange it needs to limit its external funding gap at a time of tougher global financial conditions for emerging countries as a whole, notes the report. Politically, the additional austerity could further erode Macri's popularity and undermine his prospects for re-election next year, according to Bloomberg News. This would increase the probability of Argentina being governed by a party that is a lot less inclined to embrace conventional policy responses, the IMF, external creditors and foreign investors, Bloomberg News says. Technically, there is still sizable foreign capital that, for both portfolio-performance and reputational reasons, feels trapped in Argentina and is itching to get out, Bloomberg News notes. Any favorable development risks being viewed as an opportunity to exit rather than remain, let alone increase exposure, Bloomberg News relays. On paper, the best way to deal with this combination of factors would be for the IMF to increase aggressively the overall size of its financial support in exchange for greater structural reforms, according to the report. Although this would be another exceptional financial step for the fund, which has already committed to substantial funding for Argentina, it could be justified not just on domestic economic grounds but also by the need to contain and reverse emerging-market contagion that harms other countries, including the better-managed ones, Bloomberg News notes. It is also likely to get the support of some of the IMF's major shareholders, the report relays. Provided it is large enough, this kind of increased funding from the IMF could serve as the much-needed circuit-breaker through both its direct and indirect effects, Bloomberg News discloses. It would immediately reduce the amount of foreign capital that Argentina needs to secure from other sources, Bloomberg News says. And it would improve the prospects for crowding in additional private capital, including investors who are sidelined even though they feel that this is a classic case of an EM overshoot with remunerative risk-return characteristics -- that is, the country's underlying fundamentals do not justify such high interest rates and such a sharp currency depreciation, notes the report. But beyond the serious policy implementation risks and the tricky program design issues, the IMF is operating with the legacy of a complicated -- and at times, very unhappy and highly contentious -- history with Argentina, Bloomberg News discloses. According to Bloomberg News, the multilateral institution is still scarred by the December 2001 Argentine default that was preceded by a controversial round of increased lending for an unsustainable and ill-designed domestic policy stance. The IMF's activities and intentions are still often met with suspicion in Argentina today. In addition, the fund has undergone another painful and brand- eroding experience -- with Greece -- where the support package was excessively tilted in favor of domestic demand compression and insufficiently in favor of external debt relief and growth, a mistake the IMF itself has recognized, albeit belatedly, Bloomberg News discloses. There is no easy and risk-free way out of Argentina's currency crisis, Bloomberg News relays. While the temptation will be to just accelerate the already-committed disbursements, significant courage and perseverance, together with quite a bit of luck, may be needed by all parties, Bloomberg News notes. And this is before taking into account a global economy facing greater uncertainty with respect to growth, trade, policy coordination and financial conditions, adds the report. As reported in the Troubled Company Reporter-Latin America on Sept. 4, 2018, S&P Global Ratings placed on Aug. 31, 2018, its 'B+' long-term and 'B' short-term sovereign credit ratings on Argentina on CreditWatch with negative implications. At the same time, S&P placed its 'raAA' national scale rating on CreditWatch negative and affirmed its 'BB-' transfer and convertibility assessment. The CreditWatch negative reflects the risk of worsening creditworthiness due to potentially weakened implementation of the government's strategy to stabilize the economy. Exchange rate volatility, as shown by recent pressure on the Argentine currency, could jeopardize the effective implementation of economic adjustment measures, absent further steps to boost investor confidence. Fitch Ratings affirmed on May 8, 2018, 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 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. As previously reported by the TCR-LA, Argentina defaulted on some of its debt late July 30, 2014, after expiration of a 30- grace period on a US$539 million interest payment. Earlier that , 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. RIO ENERGY: Moody's Reviews B3 Sr. Sec. Bond Rating for Downgrade ----------------------------------------------------------------- Moody's Investors Service has placed Rio Energy S.A. (MSU) B3 rating under review for downgrade. On Review for Possible Downgrade: Issuer: Rio Energy S.A. Senior Secured Regular Bond/Debenture, Placed on Review for Downgrade, currently B3 Outlook Actions: Issuer: Rio Energy S.A. Outlook, Changed To Rating Under Review From Positive RATINGS RATIONALE The rating action reflects the company's increased refinancing risk and overall liquidity deterioration. The company faces a debt maturity of $40 million due in December 2018 incurred to partially fund its expansion plan to convert three simple-cycle plants into combined cycles. MSU has developed constructive working relationships with its current lenders that could support a refinancing to occur. Yet, in its view, the refinancing risk has increased and could impair MSU's access to financing on a timely basis given the involvement of the company's former chairman and minority shareholder in a federal bribery investigation. Management's distraction from day to day operations deriving from the investigation also adds downward pressure to the ratings. The review will focus on the company's ability to have a reliable refinancing strategy in place with sufficient anticipation of its December debt maturities while it continues to work on the completion of its investment plans. To that extent, during the review Moody's will also focus on the company's continued access to vendor finance and negotiations with its bank lenders to complete the long term financing of the investment plan. Corporate Profile MSU Energy is an argentine, family owned conglomerate comprised by three special purpose vehicles or Sociedades Anonimas designed to participate in the power auctions performed by the Argentine Energy Ministry and the beneficiaries under the PPAs. Each of these companies, Uensa S.A., Ugen S.A. and Rio Energy S.A. own and operate a thermal simple cycle plant with 150 MW of nominal generation capacity each and are all are joint obligors under the USD 600 million senior secured notes. The company is currently developing an expansion plan to convert its operating simple cycle plants into combined cycle plants, with an expected start of operations in mid-2020. The principal methodology used in this rating was Power Generation Projects published in June 2018. =========== B R A Z I L =========== CENTRAIS ELETRICAS: Sells Three Subsidiaries at Auction ------------------------------------------------------- Reuters reports that Brazil's state-controlled power company Centrais Eletricas Brasileiras SA (Eletrobras), sold three power distribution companies at a public auction in Sao Paulo, concluding another step in its divestiture program. Local companies acquired the assets. Energisa SA bought power distribution firms Eletroacre and Ceron, which operate in the northern states of Acre and Rondonia, while Oliveira Energia in association with ATEM purchased Boa Vista Energia, located in Roraima, according to the exchange, Reuters relays. The bids comprised a combination of tariffs the acquirers are planning to charge plus a signing bonus, according to Reuters. They will also need to comply with requirements for immediate cash injection in the distributors and for long-term investment programs, the report relays. Dyogo Oliveira, the head of Brazil's development bank BNDES, which acted as an adviser to Eletrobras in the deal, said Energisa and Oliveira Energia will have to inject BRL688 million ($165 million) in the companies they acquired, the report discloses. Investments over five years to modernize the firms are expected to reach BRL1.5 billion, Mr. Oliveira said, the report notes. Energisa said after the auction that it now owns 11 power distribution companies in Brazil, the report notes. Eletrobras has now sold five power distribution companies, mostly money-losing units, the report discloses. It sold earlier Celg and Cepisa, the report relays. The divestitures are part of a plan the company has to sell non-core assets to reduce its debt, the report notes. Eletrobras is expected to hold another auction on Sept. 27 to sell Amazonas Energia, the report adds. As reported in the Troubled Company Reporter-Latin America on June 18, 2018, Fitch Ratings has upgraded the Long-Term Foreign and Local Currency Issuer Default Ratings (IDRs) of Centrais Eletricas Brasileiras S.A. (Eletrobras) and its wholly owned subsidiary, Furnas Centrais Eletricas S.A., to 'BB-' from 'B+'. Fitch has also upgraded the companies' Long-Term National Scale Ratings to 'AA(bra)' from 'AA- (bra)'. The Rating Outlook is Stable. ENERGISA SA: Sees Challenge in Eletrobras Distributors ------------------------------------------------------ Jose Roberto Gomes at Reuters reports that the acquisition of Eletrobras' distributors operating in Acre and Rondonia will be a smaller challenge for Energisa than a previous operation involving the purchase of Rede Group assets, completed in 2014. The company projected that the transaction will lead to group leverage, measured by the ratio between net debt and earnings before interest, taxes, depreciation and amortization (Ebitda), to 3.5 times, before 3 times previously, according to Reuters. Energisa, which will have a 13 percent increase in revenues from the new distributors, if considered data from 2017, plans to carry out in 2019 an extraordinary tariff revision in the new companies provided for in the bidding rules, the report notes. ENERGISA SA: Fitch Affirms 'BB' FC IDR, Outlook Stable ------------------------------------------------------ Fitch Ratings has affirmed Energisa S.A. and its subsidiaries' Foreign and Local Currency Issuer Default Ratings at 'BB' and 'BB+', respectively and their Long-term National Scale Rating at 'AA+(bra)'. The Rating Outlook is Stable. KEY RATING DRIVERS Fitch believes Energisa's recent acquisitions of Centrais Eletricas de Rondonia S.A. (Ceron) and Eletrobras Distribuicao Acre (Eletroacre) do not change the Energisa group's consolidated credit profile. Fitch believes the group has a positive track record to improve the poor operational performance and negative EBITDA of both energy distribution companies, and should also rely on synergy gains and an extraordinary tariff reviews in 2019 in order to gradually present consolidated credit metrics in line with the current IDRs until the end of 2021. Energisa acquired Ceron and Eletroacre through auctions held on Aug. 30,, 2018, which positively adds to concessions diversification. On a pro forma consolidated basis and considering a neutral EBITDA for Ceron and Eletroacre, Fitch expects Energisa to achieve EBITDA of BRL2.7 billion and net debt of BRL10.7, leading to a net leverage of 4.0x at the end of 2019. This ratio compares with 3.4x reported in the last 12 months (LTM) ended in June 2018. According to Fitch's methodology, the estimated incremental debt coming from the two new concessions is BRL3.0 billion in this calculation. For 2020, the agency expects that the group will be able to capture more efficiency gains and the full benefit of the extraordinary tariff review for Ceron and Electroacre. In this year, net leverage should be close to 3.5x, considering an EBITDA contribution at the range of BRL250 million-BRL350 million from the combined two entities. Difficulties reducing net leverage in the coming years or acheiving a ratio of 3.0x or below in 2021 could pressure the ratings. Energisa group's IDRs reflect a low to moderate business risk for the Brazilian power distribution segment, which is partially mitigated by the group's diversification through eleven concessions. Fitch considers the guarantees provided by Energisa as part of its subsidiaries' debt, and the cross-default clauses equalize the ratings. The analysis incorporates a moderate regulatory risk for the Brazilian power sector and a hydrological risk currently above average. The Foreign Currency IDRs are constrained by Brazil's country ceiling at 'BB'. DERIVATION SUMMARY Energisa and its subsidiaries' Foreign Currency IDRs at 'BB' are capped by Brazil's country ceiling. The Local Currency IDRs of 'BB' are based on the group's low to moderate business risk and the expectation that liquidity will remain robust and net leverage will migrate to the range of 2.0x-3.0x. Energisa's financial profile is more aggressive compared to Enel Americas S.A. (Enel Americas, BBB+/Stable). While other peers in Latin America such as Empresas Publicas de Medellin S.A E.S:P. (EPM, BBB+/Stable), and Grupo Energia Bogota S.A. E.S.P. (GEB, BBB/Stable) present similar financial profiles as Energisa, the operating environment in Brazil justifies the different IDRs. In terms of business profile, all of them operate as regulated companies. KEY ASSUMPTIONS The main assumptions of Fitch's base scenario for the issuer include: -- Increase in energy consumption in line with the Brazilian GDP growth; -- Annual average capex of BRL1.5 billion until 2021; -- Dividends pay-out of 50% of net profit; -- No new debt financed acquisition. RATING SENSITIVITIES Future Developments That May, Individually or Collectively, Lead to Positive Rating Action: -- Consolidated net leverage below 2.0x in a sustained basis; -- Cash and marketable securities/short term debt above 1.5x. Future Developments That May, Individually or Collectively, Lead to Negative Rating Action: -- New projects or further acquisitions involving significant amounts financed by debt; -- Perception of difficulties to gradually reduce net leverage in order to achieve 3.0x in 2021; -- Cash and marketable securities/short-term debt below 1.0x; -- At the holding level: dividends received + cash and marketable securities/short-term debt service below 1.0x. LIQUIDITY Strong Liquidity Profile: Energisa group has strong liquidity and high financial flexibility to finance its investment plans and refinance outstanding short-term debt, if needed. As of June 30, 2018, total adjusted cash and marketable securities of BRL3 billion covered short-term debt of BRL2.3 billion by 1.3x. Total debt was BRL11.2 billion. At the holding company level, the cash position was BRL917 million and short-term debt was BRL667 million, representing short-term debt coverage of 1.4x. The acquisition of Ceron and Eletroacre represents a relative low cash effort, comprised by BRL91 thousand payment to Centrais Eletricas Brasileiras (Eletrobras) and BRL 493 million mandatory equity contribution in 60 days after completion of the transaction. The assumed debt burden related to the acquisition carries a long term maturity profile at low average cost. FULL LIST OF RATING ACTIONS Fitch has affirmed the following ratings: Energisa S.A. - Foreign Currency IDR at 'BB'; - Local Currency IDR at 'BB+'; - National Scale Rating at 'AA+(bra)'; - 8th Debenture Issuance at 'AA+(bra)'; - 9th Debenture Issuance at 'AA+(bra)'. Energisa Paraiba - Distribuidora de Energia S.A. - Foreign Currency IDR at 'BB'; - Local Currency IDR at 'BB+'; - National Scale Rating at 'AA+(bra)'; - 4th Debenture Issuance at 'AA+(bra)'. Energisa Sergipe - Distribuidora de Energia S.A. - Foreign Currency IDR at 'BB'; - Local Currency IDR at 'BB+;' - National Scale Rating at 'AA+(bra)'. Energisa Minas Gerais - Distribuidora de Energia S.A. - Foreign Currency IDR at 'BB'; - Local Currency IDR at 'BB+'; - National Scale Rating at 'AA+(bra)'. Energisa Mato Grosso - Distribuidora de Energia S.A. - National Scale Rating at 'AA+(bra)'; - 8th Debenture Issuance at 'AA+(bra)'. Energisa Mato Grosso do Sul - Distribuidora de Energia S.A. - National Scale Rating at 'AA+(bra)'; - 8th Debenture Issuance at 'AA+(bra)'; - 10th Debenture Issuance at 'AA+(bra)'. The Outlook for all of the corporate ratings is Stable. LIGHT SERVICOS: Moody's Ups Sr. Unsec. Notes to Ba3 --------------------------------------------------- Moody's Investors Service upgraded the senior unsecured notes ratings of Light Servicos de Eletricidade S.A. and Light Energia S.A to Ba3 from B1. At the same time Moody's America Latina Ltda upgraded the Corporate Family Rating of Light S.A to Ba3 from B1 (global scale) and to A3.br from Baa1.br (national scale) and the issuer ratings of Light's operating subsidiaries Light SESA and Light Energia to Ba3/A3.br from B1/Baa1.br. The outlook is stable for all ratings. RATINGS RATIONALE The upgrade of the ratings reflects Moody's expectations that improvements in the company's operating performance illustrated by growth in EBITDA and Cash Flow from Operations before working capital change (CFO pre WC) over the recent quarters will continue going forward and lead to higher credit metrics over next 12 to 18 months. In the last twelve months ended June 30, 2018 Light reported a CFO pre WC of BRL 1.6 billion, up from BRL 1.3 billion in 2017 and BRL 0.9 billion in 2016. The improved performance resulted primarily from the impact of the March 2017 tariff review, better quality of service indicators and from the company's own efforts to contain costs. In June 2018, Light reported average annual number of interruptions (FEC) and average duration of interruptions (DEC) per consumer of 4.73x and 7.81 hours respectively, down from 6.09x and 10.97 hours in the same period last year and significantly below regulatory target of 6.01x and 9.8 hours for the year. The rating action also takes into consideration expectations that the company's liquidity profile will remain adequate over the next 12 to 18 months following significant refinancing transactions. Throughout the first half of 2018, the company raised the equivalent of BRL 4.9 billion in debt, in the domestic and international markets. In June 2018 Light reported a consolidated cash position of over BRL 1.9 billion which compares to BRL 2 billion of debt maturities due within the next 12 months. While high energy costs resulting from adverse hydrology conditions will continue to weigh on the company's working capital needs and free cash flow generation in the second half of this year, Moody's anticipates that Light's annual funding needs will remain within a range of BRL 1.2 -- 1.4 billion in 2019 and 2020, which is broadly in line with company's recent funding transactions in the domestic market. In Q2 2018 total energy loss rates rose to 22.98%, from 21.75% in Q2 2017, a level still above the regulatory level of 20.62% and the operating margin impact has been exacerbated by high energy costs. While the company remains focused to reduce its energy losses, Moody's considers that material improvements over the next 18 months will be challenging given the weak economic conditions and high unemployment rates within Light's concession area. Light's Ba3 ratings also recognize (i) the supportive regulatory framework for Brazil electricity distribution companies that consistently compensates operators for high energy costs through tariffs increases based on a transparent methodology, and (ii) the relatively stable cash flow profile of Light's hydropower generation business (16% of Light's consolidated EBITDA in 2017). Despite adverse hydrology conditions, the hydropower generation business has contributed positively to Light's cash flow generation by mitigating the higher energy cost through its commercialization strategy. On the other hand Light's ratings are constrained by : (i) the high non-technical energy loss rates in the distribution segment and little prospects for improvements in the next 12 to 18 months despite the company's efforts; (ii) weak economic conditions and high unemployment rates in Light's concession area, which will continue to challenge consumption levels, bad debt and cash flow conversion; and (iii) expectations that the settlement of suspended costs associated with the company's exposure to the spot market -- which amounted to BRL 464 million as of June 2018 -will weight negatively on free cash flow generation in 2018. The stable outlook reflects expectations that continuing improvements in operating performance together with a gradual reduction in debt outstanding will lead Light's CFO pre WC to Debt and CFO pre WC interest coverage ratios to remain consistently above 15% and 3.0x respectively over the next 12 to 18 months. WHAT COULD CHANGE THE RATING UP/DOWN A rating upgrade could be considered should the company demonstrate sustained improvements in operating performance and reduce its leverage position such that CFO pre WC / Debt exceeds 18% and CFO pre WC Interest coverage reaches 3.5x on a sustainable basis. A rating upgrade would also require a comfortable liquidity profile. A rating downgrade could result from Light's failure to improve its operating performance and cash flow generation or to reduce its debt outstanding, such that CFO pre WC to Debt falls below 15% and CFO pre WC interest coverage remains sustainably below 3.0x. Perception of a weakening liquidity profile could also exert negative pressures on the ratings. Headquartered in Rio de Janeiro - Brazil, Light S.A is an integrated utility company with activities in generation, distribution and commercialization of electricity. In the last twelve months ended June 2018 Light S.A reported BRL11.5 billion in net revenues (excluding construction revenues) and BRL 2.2 billion in EBITDA respectively. Light S.A is ultimately controlled by Companhia Energetica de Minas Gerais ("CEMIG", rated B3/B2.br, stable), the company's major shareholder with a direct and indirect stake of 48.9% in Light S.A. The principal methodology used in rating Light Energia S.A was Unregulated Utilities and Unregulated Power Companies published in May 2017. The principal methodology used in rating Light Servicos De Eletricidade S.A. was Regulated Electric and Gas Utilities published in June 2017. MARFRIG SA: Taps Eduardo Miron as New Chief Executive Officer ------------------------------------------------------------- International Leather Marker reports that Marfrig Global Foods S.A. (Marfrig) disclosed that Eduardo Miron as its new Chief Executive Officer, replacing Martin Secco who headed the Company since 2015. "The choice of Eduardo Miron as CEO underlines our commitment to a financially and operationally sustainable Marfrig. Miron was at the forefront of the company's most recent strategic operations: the acquisition of controlling interest in National Beef and the divestment of Keystone. These transactions have transformed Marfrig into a simpler company focused on beef and supported by a global production and distribution platform", said Marcos Molina dos Santos, controlling shareholder and Chairman of the Board, according to International Leather Marker. The report notes that Mr. Miron joined Marfrig in 2010 and, since 2016, has been the Chief Financial and Investor Relations Officer while also serving as the Chief Financial Officer of Keystone Foods in the U.S. Before joining Marfrig, he worked for ten years at Grupo Safra and for more than two decades at U.S. based Cargill, the report relays. The meatpacker also announced that Marfrig will now comprise two operations; 'South America' for the operations in Brazil, Uruguay, Argentina and Chile; and 'North America', which consists of the operations of National Beef and the beef patty plant in North Baltimore, the report notes. New key management appointments were announced for each structure, as well as a new corporate Chief Financial and Investor Relations Officer, the report relays. On the same day, BRF disclosed the hiring and election of executives to the positions of Chief Financial & Investor Relations Officer, Integrated Planning Officer and Strategy, Management & Innovation Officer, as part of the ongoing process to "strengthen its organizational structure," the report relays. As reported in the Troubled Company Reporter-Latin America on Aug. 28, 2018, Fitch Ratings has affirmed Marfrig Global Foods S.A.'s (Marfrig) Long-Term Foreign and Local Currency Issuer Default Ratings (IDRs) at 'BB-', its National Scale rating at 'A(bra)', and Marfrig Holdings (Europe) and MARB BondCo PLC's senior unsecured notes at 'BB-' following the announced sale of Keystone Foods to Tyson Foods (rated BBB/Stable) for $2.4 billion. The Rating Outlook is Stable. =================================== D O M I N I C A N R E P U B L I C =================================== DOMINICAN REPUBLIC: Refutes World Bank's Stance on Rising Debt -------------------------------------------------------------- Dominican Today reports that Finance Minister Donald Guerrero said he disagrees with the assessments divulged by the World Bank local representative Alessandro Legrottaglie, who affirmed that the public debt is on an upward trend and should be contained. He said Legrottaglie's assessments, published by Listin Diario, "are not based on available information or sustainable facts," according to Dominican Today. "The level of debt is not even among the highest in the region," he said, because for the non-financial public sector, "the Dominican Republic's debt was around 39% of GDP at yearend 2017, when the average for the region was 44%," the report relays. The report notes that Mr. Guerrero said despite the limited revenue, which on average was 14.9% in 2017 compared to 23% of the regional GDP of Latin America, the government manages taxpayer money in a balanced manner and without risking their sustainability over time In just five years, the official said, more than 1.2 million people left poverty, "thanks to economic growth and social policies undertaken by the government of president Danilo Medina," the report adds. As reported in the Troubled Company Reporter-Latin America on July 19, 2018, Fitch Ratings assigned a 'BB-' rating to Dominican Republic's USD1.3 billion bonds, maturing July 2028. The notes have a coupon of 6%. Proceeds from the issuance will be used for general purposes of the government, including the partial financing of the 2018 budget. ============= J A M A I C A ============= DIGICEL GROUP: Wins Bid to Rebuild Dominica's Telecoms Services --------------------------------------------------------------- RJR News reports that Digicel Group has officially been selected as the winning bidder to rebuild the Telecommunications and ICT services to the Government of Dominica for a 15-year term. The award of this contract to Digicel follows approval from Cabinet which accepted the recommendation of the Bid Evaluation Committee, according to RJR News. As Dominica works to recover from the devastating effects of Hurricane Maria in September last year, this landmark agreement sees Digicel working in close partnership with the Government to deliver a highly resilient, state of the art network infrastructure, the report relays. Digicel will undertake the rebuilding and provisioning of telecommunications, internet, data, cloud and other ICT services to all Government sites, the report adds. As reported in the Troubled Company Reporter-Latin America on July 5, 2018, Moody's Investors Service has changed to negative from stable the outlook on the ratings of Digicel Group Limited ("Digicel", "DGL" or the "company") and Digicel Limited ("DL") and assigned a negative outlook to Digicel International Finance Limited ("DIFL"). At the same time, Moody's has affirmed DGL's B2 corporate family rating (CFR) and B2-PD probability of default rating (PDR), as well as the B1 rating on the unsecured notes of DL and the Ba2 rating on the secured bank credit facilities of DIFL. ====================== P U E R T O R I C O ====================== MODERN RADIOLOGY: 1st Cir. Upholds Former Accountant's Sentence ---------------------------------------------------------------- Defendant-Appellant Arquimedes A. Gierbolini-Rivera in the case captioned UNITED STATES OF AMERICA, Appellee, v. ARQUIMEDES A. GIERBOLINI-RIVERA, Defendant, Appellant, No. 15-2076 (1st Cir.) pled guilty to one count of theft in connection with health care, in violation of 18 U.S.C. section 669(a), and to one count of wire fraud, in violation of 18 U.S.C. section 1343. Gierbolini challenges the procedural and substantive reasonableness of his upwardly variant sentence. After careful review, the United States Court of Appeals, First Circuit affirms. In January 2000, Gierbolini was hired as an accountant by Modern Radiology, PSC. In or around 2005, Gierbolini devised and implemented a scheme to defraud Modern Radiology through regularly scheduled transfers of thousands of dollars to his personal accounts. Gierbolini was able to defraud Modern Radiology for years. He carried out this scheme in every pay period from January 2005 to February 2010. Altogether, Gierbolini completed 217 unauthorized transfers for a total of $984,596.95. In 2013, Gierbolini was charged with fifty-three counts of theft in connection with health care and twenty-eight counts of wire fraud. Gierbolini pled guilty to one count of each charge, pursuant to a plea agreement. In the plea agreement, the parties calculated a total offense level of twenty. To arrive at that level, they started with a base offense level of seven, pursuant to United States Sentencing Guidelines. They then found applicable a two-level enhancement for Gierbolini's abuse of a position of trust in a manner that significantly facilitated the commission or concealment of the offense, a fourteen-level enhancement because the offense involved losses greater than $400,000 but not over $1,000,000, and a three-level reduction for Gierbolini's timely acceptance of responsibility. This, in conjunction with Gierbolini's Criminal History Category of I, yielded a Guidelines sentencing range ("GSR") of thirty-three to forty-one months' imprisonment. Gierbolini reserved the right to argue for a sentence at the lower end of the proposed GSR, while the government could argue for a sentence at the high end of the GSR. After calculating the same GSR as that which the plea agreement and PSR contained, the distric court found that the GSR did not "properly reflect the seriousness of the offense and [did] not necessarily promote respect for the law or reflect the harm caused to the victim." Specifically, the court focused on two factors that it found "highly important and of significant weight." First, the court reiterated its concern that Gierbolini was both an accountant and a lawyer, and yet appeared to have "no qualms" about abusing his position of trust repeatedly and regularly over a span of at least five years. Second, the court emphasized the "substantial harm and financial hardship to the victim which ha[d] turned them to becoming insolvent." Thus, the court imposed an upwardly variant sentence of sixty months of imprisonment on each count of conviction, to run concurrently, and to be followed by three years of supervised release. The court also ordered Gierbolini to forfeit $394,300, and to pay $590,296 in restitution to the victim, Modern Radiology. Gierbolini did not object to the sentence imposed. Gierbolini challenges both the procedural and substantive reasonableness of his sentence. With regard to procedural reasonableness, Gierbolini argues that the district court did not adequately explain its chosen sentence. Gierbolini's primary procedural challenge is that the district court's explanation of his sentence was inadequate because the reasons relied on by the district court in justifying his sentence were already included in the GSR calculation. The First Circuit disagrees. A sentence outside the advisory range typically ought to be accompanied by greater explanation than need accompany a guideline sentence. Furthermore, "[w]hen a factor is already included in the calculation of the guidelines sentencing range, a judge who wishes to rely on that same factor to impose a sentence above or below the range must articulate specifically the reasons that this particular defendant's situation is different from the ordinary situation." Here, the sentencing court complied with these requirements. After calculating the GSR, the judge considered the section 3553(a) factors, including mitigating factors. The court noted that the GSR accounted for Gierbolini's abuse of his position of trust and for the amount stolen. In sum, the district court, which "need[ed] only identify the main factors behind its decision," United States v. Vargas-Garcia, adequately set forth its reasons for imposing an upwardly variant sentence and, in so doing, properly relied on facts included in the PSR to which Gierbolini not only failed to object, but even expressly indicated were correct. Gierbolini also alleges that the district court improperly weighed the section 3553(a) factors and various mitigating circumstances, and also that it engaged in reverse "socioeconomic discrimination" by considering that he had "a good upbringing and came from a good family," and thus he had no excuse for his unlawful conduct. Thus, he says, the upward variance was unjustified. In essence, Gierbolini's claim is that the district court placed too little weight on the mitigating factors. But, the record shows that the district court properly considered the section 3553(a) sentencing factors, including mitigating factors. Here, the district court gave a plausible explanation and reached a defensible result in light of Gierbolini's criminal acts against a trusting employer every two weeks, for at least four years, to the tune of nearly one million dollars, and for no apparent reason except personal enrichment. No more is required. Gierbolini's sentence is, therefore, affirmed. A full-text copy of the Court's Ruling dated August 14, 2018 is available at https://bit.ly/2C3DQsW from Leagle.com. Joseph C. Laws, on brief for appellant. Julia M. Meconiates, Assistant United States Attorney, Rosa Emilia Rodriguez-Valez, United States Attorney, and Thomas F. Klumper, Assistant United States Attorney, Acting Chief, Appellate Division, on brief for appellee. Based in Ponce, Puerto Rico, Modern Radiology PSC filed for chapter 11 bankruptcy protection (Bankr. D.P.R. Case No. 15-03629) on May 14, 2015, with estimated assets of $0 to $50,000 and estimated liabilities at $1 million to $10 million. The petition was signed by Gamalier Bermudez Ruiz, president. POLICLINICA FAMILIAR: Disclosure Statement Hearing Set for Oct. 17 ------------------------------------------------------------------ The U.S. Bankruptcy Court for the District of Puerto Rico is set to hold a hearing on October 17, at 9:00 a.m., to consider approval of the disclosure statement, which explains the Chapter 11 plan for Policlinica Familiar Shalom Inc. Objections to the disclosure statement must be filed not less than 14 days prior to the hearing. About Policlinica Familiar Shalom Inc. Policlinica Familiar Shalom Inc. filed a Chapter 11 petition (Bankr. D.P.R. Case No. 17-02544) on April 12, 2017. The Debtor is engaged in the health care business as defined in 11 U.S.C. Section 101(27A) whose principal assets are located at Carr 2 Km 101.6 Barrio Terranova Quebradillas, PR 00678. The Company said it is suffering economic hardship and is in the process of losing its business premises in foreclosure proceedings. The Debtor's counsel is Jose Ramon Cintron, Esq., in San Juan, Puerto Rico. At the time of filing, the Debtor had estimated assets of $0 to $50,000 and estimated liabilities of $1 million to $10 million. ROTULOS VILLEGAS: Taps Heriberto Acevedo as Accountant ------------------------------------------------------ Rotulos Villegas Inc. seeks approval from the U.S. Bankruptcy Court for the District of Puerto Rico to hire an accountant. The Debtor proposes to employ Heriberto Reguero Acevedo, an accountant, to prepare its monthly operating reports, financial statements and tax returns; prepare cash flow projections for its plan of reorganization; and provide other accounting services. The Debtor will pay the accountant an hourly fee of $50. His associates will charge $25 per hour. Mr. Acevedo disclosed in a court filing that he and his associates and employees are "disinterested" as defined in section 101(14) of the Bankruptcy Code. Mr. Acevedo maintains an office at: Heriberto Reguero Acevedo 105 Avenida Borinquen Base Ramey Aguadilla, PR Phone: 787-890-1954 Email: rameysportsapartments@gmail.com Email: heribereg@aol.com About Rotulos Villegas Inc. Rotulos Villegas Inc. sought protection under Chapter 11 of the Bankruptcy Code (Bankr. D.P.R. Case No. 18-04498) on Aug. 8, 2018. At the time of the filing, the Debtor estimated assets of less than $500,000 and liabilities of less than $1 million. Judge Brian K. Tester presides over the case. The Debtor tapped Justiniano Law Offices as its legal counsel. TOYS R US: Toys Delaware Plan is Ambush, U.S. Trustee Says ---------------------------------------------------------- BankruptcyData.com reported that the U.S. Trustee filed an objection to the adequacy of the Disclosure Statement filed by Toys Delaware Debtors and Geoffrey Debtors. BankruptcyData related that the U.S. Trustee asserts, "After almost a year of navigating through Chapter 11, the Disclosure Statement and underlying Plan currently before the Court reinforce what many long-feared - administrative insolvency. Despite the inability to pay administrative claimants in full - aside from the professionals who appear to be the only ones who will emerge unscathed - the Debtors recently presented and sought approval of a settlement agreement that shielded the lenders from future litigation and created a pot of money of approximately $180 million to be shared among the administrative claimants. The Debtors have now presented - on shortened notice - a Plan and Disclosure Statement that encompasses the settlement agreement recently approved. The Plan fails to pay in full all administrative claimants and priority tax claimants and contemplates no distribution for other priority claimants all contravention of the requirements for confirmation. In hope of getting the Plan confirmed despite these significant infirmities, The Debtors have manipulated the Bankruptcy Code requirements and sought the consent' of Administrative Claim Holders to the proposed treatment, which offers them less than what they are entitled to under the Code. This is an ambush." About Toys R Us, Inc. Toys "R" Us, Inc., was an American toy and juvenile-products retailer founded in 1948 and headquartered in Wayne, New Jersey, in the New York City metropolitan area. Merchandise was 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 was 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 U.S. 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, were 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. Consensus Advisory Services LLC and Consensus Securities LLC, serve as sale process investment banker. A&G Realty Partners, LLC, serves as the Debtors' 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 start 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. Propco I Debtors Toys "R" Us Property Company I, LLC and its subsidiaries own fee and leasehold interests in more than 300 properties in the United States. The Debtors lease the properties on a triple-net basis under a master lease to Toys-Delaware, the operating entity for all of TRU's North American businesses, which operates the majority of the properties as Toys "R" Us stores, Babies "R" Us stores or side-by-side stores, or subleases them to alternative retailers. Toys "R" Us Property was founded in 2005 and is headquartered in Wayne, New Jersey. Toys 'R' Us Property operates as a subsidiary of Toys "R" Us Inc. Company LLC, MAP Real Estate LLC, TRU 2005 RE I LLC, TRU 2005 RE II Trust, and Wayne Real Estate Company LLC (collectively, "Propco I Debtors") sought protection under Chapter 11 of the Bankruptcy Code (Bankr. E.D. Va. Lead Case No. 18-31429) on March 20, 2018. The Propco I Debtors sought and obtained procedural consolidation and joint administration of their Chapter 11 cases, separate from the Toys "R" Us Debtors' Chapter 11 cases. The Propco I Debtors estimated assets of $500 million to $1 billion and liabilities of $500 million to $1 billion. Judge Keith L. Phillips presides over the Propco I Debtors' cases. The Propco I Debtors hired Klehr Harrison Harvey Branzburg, LLP; and Crowley, Liberatore, Ryan & Brogan, P.C., as co-counsel. The Debtors also tapped Kutak Rock LLP. They hired Goldin Associates, LLC, as financial advisors. *********** 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. 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