/raid1/www/Hosts/bankrupt/TCRLA

/raid1/www/Hosts/bankrupt/TCRLA_Public/181018.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, October 18, 2018, Vol. 19, No. 207 Headlines B R A Z I L BRAZIL: Egan-Jones Withdraws B+ Senior Debt Unsecured Rating CONCESSAO METROVIARIA: Moody's Puts Ba2 CFR for Downgrade INVEPAR: Moody's Rates Up to $650MM of Planned LongTerm Notes B1 INVEPAR: S&P Rates Up to $650MM of Proposed Notes 'BB-' ODEBRECHT SA: Dominican Gov't. Seeks US Blessing in Plant Scandal SAO PAULO: Fitch Affirms BB- IDRs, Outlook Stable J A M A I C A JAMAICA: Tourism Workers' Pension Scheme to be Implemented Soon M E X I C O BANCA MIFEL: S&P Puts 'BB' Long-Term ICR on CreditWatch Positive P A N A M A PANAMA CANAL: Moody's Alters Outlook on Ba1 Notes Rating to Neg. P U E R T O R I C O AMERICAN GAMING: Case Summary & 20 Largest Unsecured Creditors SEARS HOLDINGS: Tempur Sealy Says Sears Only Less Than 5% of Sales SEARS HOLDINGS: Receives Delisting Notice from Nasdaq SEARS HOLDINGS: PREIT Exposure Down to 4 Stores T R I N I D A D & T O B A G O PETROLEUM CO: Bankers Offer Advice to Former Workers - - - - - =========== B R A Z I L =========== BRAZIL: Egan-Jones Withdraws B+ Senior Debt Unsecured Rating ------------------------------------------------------------ Egan-Jones Ratings Company, on October 8, 2018, withdrew its 'B+' foreign currency and local currency senior unsecured ratings on debt issued by the Federative Republic of Brazil. Brazil, a vast South American country, stretches from the Amazon Basin in the north to vineyards and massive Iguaáu Falls in the south. Rio de Janeiro, symbolized by its 38m Christ the Redeemer statue atop Mount Corcovado, is famed for its busy Copacabana and Ipanema beaches as well as its enormous, raucous Carnaval festival, featuring parade floats, flamboyant costumes, and samba music and dance. CONCESSAO METROVIARIA: Moody's Puts Ba2 CFR for Downgrade --------------------------------------------------------- Moody's America Latina Ltda. has placed Concessao Metroviaria do Rio de Janeiro S/A's corporate family rating of Ba2 on the global scale rating and the Aa2.br National Scale Rating under review for downgrade. RATINGS RATIONALE This action was prompted by the perception of increased credit risk for MetroRio's credit quality following the planned issuance of up to USD650 million long term notes issue by Investimentos e Participacoes em Infraestrutura S.A.'s which will be unconditionally and irrevocably guaranteed by MetroRio and its related company Linha Amarela S.A., on a joint and several basis. The CFR ratings assigned to MetroRio are based on the assumption that the company is exposed to the credit quality of LAMSA, but is generally ring-fenced and insulated from cash transfers to support the high level of investment activity of its controlling shareholder, INVEPAR. However, INVEPAR's proposed notes' indenture will include cross default provisions, which suggest higher credit linkages between MetroRio and the parent's other riskier businesses. The review will focus on those linkages on the basis of MetroRio's capital structure following the issuance of the notes at INVEPAR. On a standalone basis, MetroRio's credit profile remains underpinned by its strong and predictable operating cash flows, supported by a long-term concession contract to operate the subway lines 1 and 2 in the city of Rio de Janeiro through 2038. As a regulated concession, MetroRio is entitled to receive annual tariff adjustments indexed to the domestic inflation as well as regulatory allowances to earn return on its investments. The ratings also consider the decreasing capital investment requirements following completion of new stations and improved connectivity with the new subway line 4. Those recent developments, coupled with a clear comparative advantage of subway over other means of transportation in its service area, should contribute to revenues resuming a solid growth path once the market fundamentals improve. MetroRio also benefits from an adequate liquidity position and debt maturity profile, following the issuance of BRL550 million debentures in March 2018. On the other hand, the MetroRio's credit quality is currently constrained by: (i) sharp slowdown of economic activity in the Municipality of Rio de Janeiro (Ba3, stable) that has resulted in lower ridership demand in MetroRio's service area; and (ii) increasing costs imposed by a new operating and maintenance and service agreement on the subway line 4. Compensation for the incremental operating and maintenance costs depends on the effective break-even and successful ramp-up of line 4, which Moody's expects to happen only after 2020. WHAT COULD CHANGE THE RATINGS UP/DOWN MetroRio's ratings will likely be downgraded upon a successful completion of INVEPAR's planned the refinancing transaction at INVEPAR. A downgrade on the global scale could result in a multi- notch downgrade on both the global scale on the Brazilian national scale. A positive rating action is unlikely at this time, but the ratings could be confirmed at its current levels to the extent that INVEPAR pursues a different liability management strategy that does not change MetroRio's current capital structure or rating assumptions. Concessao Metroviaria do Rio de Janeiro S/A (MetroRio) is an urban railway passenger transportation company, which has the concession rights to operate Lines 1 and 2 of the subway system in the City of Rio de Janeiro comprising an extension of 42 km and 36 stations. The concession rights granted by the State Government of Rio de Janeiro in 1998 and regulated by AGETRANSP are valid for a 40-year period through January 2038. Since September 2016, MetroRio also operates and maintain Rio de Janeiro's subway system's Line 4, which added 12.7 kilometers and 5 stations to its operations. In the last twelve months ended June 31, 2018, MetroRio reported net revenues (excluding construction revenues) of BRL765 million and net profits of BRL10 million. MetroRio is wholly owned by Investimentos e Participacoes em Infraestrutura S.A. - INVEPAR (senior secured B1, negative), a holding company controlled by three of the largest Brazilian pension funds (PREVI, FUNCEF and PETROS) as well as the construction company OAS S.A. The principal methodology used in these ratings was Global Passenger Railway Comapnies published in June 2017. INVEPAR: Moody's Rates Up to $650MM of Planned LongTerm Notes B1 ---------------------------------------------------------------- Moody's Investors Service assigned a B1 rating to the up to USD650 million long-term notes issue planned by Investimentos e Participacoes em Infraestrutura S.A.'s (INVEPAR) that will be unconditionally and irrevocably guaranteed by Linha Amarela S.A. (LAMSA, senior secured Ba2, stable) and Concessao Metrovia ria do Rio de Janeiro S/A (METRORIO, corporate family rating Ba2 RUR- down), on a joint and several basis. The notes will be senior secured obligations of INVEPAR to the extent of the value of the collateral, comprising a first priority pledge on 100% of the capital stock of METRORIO. The outlook is negative. Proceeds will be primarily used for the full redemption of the 3rd and 4th debentures issued by INVEPAR, amounting to BRL1.2 billion as of June 30, 2018, most of which are due in December 2018. Part of the proceeds will also be used to buy from investors the entirety of METRORIO's 8th issuance of senior secured debentures, amounting BRL566 million as of June 30, 2018, which is due in September 2021. Those debentures will be kept by INVEPAR holding company as an intercompany investment until maturity. At the time of the issuance, the notes will be unsecured and the net proceeds of the offering will be deposited in an escrow account pending the satisfaction of the conditions for perfection of the guarantees and the collateral assignment, which depends on the prepayment of the 2nd issuance of senior secured debentures issued by LAMSA, amounting to BRL292 million as of June 30, 2018 and that are due in May 2027. Moody's expects this process to conclude in December 2018. The terms and provisions contained in the notes draft documentation reviewed by Moody's comprise customary lender protection mechanisms of high yield bonds, including, but not limited to, restrictions on dividend distributions, negative pledges on assets and restrictions on the incurrence of additional debt, subject to certain covenant tests, thresholds and reasonable exceptions. The assigned ratings are based on preliminary documentation. Should issuance conditions and/or final documentation deviate from the original ones submitted and reviewed by the rating agency, Moody's will assess the impact that these differences may have on the ratings and act accordingly. RATINGS RATIONALE The B1 rating assigned to INVEPAR's notes reflect company's position as the parent company of one of Brazil's largest infrastructure groups. Its credit profile benefits from: (i) recurring revenue base stemming from its large portfolio of long- term infrastructure concessions in Brazil, with a concentration in the transportation sector; (ii) the predicable tariff setting mechanisms embedded in its concession agreements that allow to pass inflation to end-users, under well-established but still untested regulatory regimes; and (iii) an expectation of a gradual but consistent improvement in operating cash flows, supported by the ramp-up of less mature concessions and the successful implementation of corporate wide cost reduction initiatives. The rating for the notes also considers the credit quality of the guarantors LAMSA and METRORIO, which represent the company's highest quality assets, with robust asset features and predictable operating cash flows based on commuter-based demand, inflation adjusted tariffs, and long concession tenors. However, the proposed notes' indenture comprises cross default provisions, which suggest higher credit linkages between the two companies and INVEPAR's other riskier businesses, and limits the benefits from the relatively stronger individual credit profile of the guarantors. Tempering INVEPAR's credit profile is its highly leveraged capital structure, reflected in a consolidated net debt to LTM EBITDA of 9.5x as June 30, 2018, as calculated by Moody's and including concession liabilities, along with a tight liquidity position to face equity requirements of certain subsidiaries amounting BRL1.5 billion through 2022. Uncertainties related to its evolving ownership structure further constrains the group's credit profile, given lower visibility on the shareholders ability to provide extraordinary financial support to the company in case of need. INVEPAR's prospective exposure to currency mismatch between the planned dollar denominated notes and revenues generated in local currency, also constrains the rating. Moody's views the issuer's planned hedging strategy, based on cash flow hedges to cover the coupon payments, to partially mitigate this risk but not fully insulate the company's balance sheet from leverage increases in the event of devaluation in local currency. Despite the severe economic downturn in Brazil since 2015, INVEPAR was able to reduce leverage and improve cash generation through a revised business strategy based on asset sales, contract renegotiations with suppliers and about 18% reduction in its consolidated workforce. In the last twelve months ended June 30, 2018, INVEPAR's consolidated Funds from Operations (FFO)-to-Debt ratio, as per Moody's standard adjustments, reached 6.7% up from 2.1% in fiscal year 2016, while the Cash Interest Coverage improved to 2.7x from and 1.3x in 2016. Nevertheless, the prolonged economic weakness negatively affected the demand in the service areas of INVEPAR concessions, particularly in the city of Rio de Janeiro, constraining cash flow improvements and effectively delaying the ramp up of those concessions that are less mature. Over the next three to five years, Moody's expects improvement in operating performance but credit metrics will remain largely constrained by the additional debt leading consolidated FFO-to-Debt ratio to remain in the 5% - 7% range with the Cash Interest Coverage ratio around 2.0x. INVEPAR's planned issue of USD650 million senior notes, with a bullet payment in 5 to 7 years, will provide some relief to the company's liquidity needs in the short term, but in the event of a prolonged delay or unfavorable regulatory resolution on the contract termination of Concessionaria BR-040 S.A (VIA040), Moody's calculates a cash shortfall for the holding company in the range of BRL400 million to BRL500 million by 2020, leading to the necessity to obtain additional financing, sell assets or receive equity to meet investment requirements and debt service schedule. The notes provisions include a general basket for additional USD50 million of permitted indebtedness on a consolidated basis to address short term liquidity needs, subject to INVEPAR's ability to maintain a minimum financial covenant of consolidated Net Debt to adjusted EBITDA starting at 5.0x in 2018, and gradually dropping to 3.0x by 2020 (3.7x as of LTM 2Q18). The notes will have also cross acceleration provisions with other outstanding debt from the company, as well as those within the group, with acceleration upon a violation subject trustee determination or holders of at least 25% of the notes. RATING OUTLOOK The negative outlook considers that the company's healthy cash balance pro-forma for the transaction will decrease over the next 18 months, in face of INVEPAR's still large investment requirements and higher interest expenses, decreasing the liquidity cushion available to honor the debt service in alternative scenarios of delays in regulatory decisions or enhanced macroeconomic volatility. FACTORS THAT COULD LEAD TO AN UPGRADE/DOWNGRADE An upgrade of INVEPAR's note rating would require a material improvement in the company's liquidity position and capital structure, along with more visibility on the regulatory environment in which the company operates. Positive rating pressure would increase with a sustainable improvement in the company's credit metrics, such that consolidated FFO-to-Debt and reaches 10% and Cash Interest Coverage moves close to 3.5x on a sustainable basis. Conversely, the rating on the notes can be downgraded as a result unexpected cash needs within the group, generated by sustained drop in demand, delays on investment compensation, unfavorable regulatory decisions or negative outcomes on legal disputes, leading to deterioration in INVEPAR's consolidated liquidity profile. Moody's perception of deterioration in the stand alone credit quality of the note guarantors could also trigger a negative rating action. The principal methodology used in this rating was Privately Managed Toll Roads published in October 2017. INVEPAR is a parent holding company controlled by the three largest Brazilian pension funds (Caixa de Previdencia dos Funciona rios do Banco do Brasil, Fundacao dos Economia rios Federais and Fundacao Petrobras de Seguridade Social) and by Group OAS, which filed for court protection for judicial reorganization in 2015. In the last twelve months ended on June 30, 2018, INVEPAR reported consolidated net revenues (excluding construction revenues) of BRL3.9 billion and net losses of BRL563 million. INVEPAR's holds the control on a portfolio of infrastructure concessions that consists of (i) the subway Concessao Metroviaria do Rio de Janeiro S/A - Metro Rio, (ii) regional toll roads: Linha Amarela S.A. - LAMSA in the city of Rio de Janeiro, Concessiona ria Auto Raposo Tavares S.A. in the Sao Paulo state, CLN in the State of Bahia, and Concessionaria BR-040 S.A -- Via 040, a federal concession which links the state of Minas Gerais to the federal district of Brasilia and (iii) the Guarulhos airport concession (GRU). INVEPAR also shares the control with Odebretch Transport S.A of Concessionaria Bahia Norte S.A -- CBN (B1/Baa2.br stable), in the state of Bahia and Concessionaria Rota do Atlantico - CRA in Pernambuco state. INVEPAR has minority participation on Concessionaria Rio Teresopolis S.A, a toll road concession in Rio de Janeiro state, Concessionaria ViaRio S.A, a toll road concession and VLT tramway, both located at Rio de Janeiro city. INVEPAR also owns MetroBarra S.A., which has an option to acquire the concession for the subway system Line 4 in the city of Rio de Janeiro. INVEPAR: S&P Rates Up to $650MM of Proposed Notes 'BB-' ------------------------------------------------------- S&P Global Ratings assigned its 'BB-' issue-level rating to Investimentos e Participacoes em Infraestrutura S.A.'s (INVEPAR) (BB-/Watch Neg/--) proposed five-year to seven-year notes of up to $650 million. S&P also assigned a recovery rating of '3' to the proposed notes, based on its expectation of substantial recovery (rounded estimate: 65%). The company will use the net proceeds primarily to repay outstanding debentures at the holding company level and at its subsidiaries, Linha Amarela S.A (LAMSA) and Concessao Metrovi†ria do Rio de Janeiro S.A. (MetroRio), which will guarantee this issuance. S&P said, "If successful, we expect the issuance to help Invepar to reduce its refinancing risks, especially at the holding level. As of June 30, 2018, unencumbered cash position at the holding company was approximately R$440 million, compared with short-term maturities of R$1.2 billion in debentures due Dec. 11, 2018. Even though we expect the holding company to refinance its debt, using either the proceeds of the proposed notes or another long-term refinancing instrument, the upcoming maturity date and the concentration of the debentures weighs on our assessment. "Apart from the liquidity pressure that the company is facing, the 'BB-' issuer credit rating on Invepar is based on our view of a gradual improvement of its operating performance, along with cost- cutting initiatives and a sharp reduction in committed capital expenditures. Therefore, we expect Invepar to gradually deleverage, with a slight improvement of its cash flow generation in the next two years amid recovering traffic levels at most of its operating assets and modest GDP growth prospects for Brazil in the next two years. "We expect Invepar to effectively hedge any exposure to foreign currency, given that the bulk of its revenue is denominated in Brazilian reals, in order to prevent adverse impact on its cash flows and financial ratios. "The negative CreditWatch listing indicates our concern about the timeliness of debt refinancing and a 50% probability of a multiple-notch downgrade if the company is unable to refinance around R$1.2 billion in debentures at the holding level that mature on Dec. 11, 2018, or if the resulting liquidity profile is too concentrated in the short term. We may remove the ratings from the negative CreditWatch listing and assign stable outlook if the company refinances the debentures by November 2018. In such a case, we would expect refinancing to medium to long term." Issue Ratings -- Recovery Analysis Key analytical factors S&P said, "We have assigned a recovery rating of '3' to the proposed notes, indicating our view that lenders could expect around 65% recovery of principal in the event of payment default. Even though the notes benefit from a first demand guarantee from LAMSA and MetroRio, the lien on the shares of MetroRio, and the dividends flow received by Invepar, we deem the notes unsecured. This is because upon the group's hypothetical default, the notes would rank pari passu to the senior unsecured lender of the guarantors. In addition, MetroRio's shares aren't publicly listed; therefore, they're are illiquid securities." Simulated default assumptions S&P said, "Our default scenario contemplates sharp reduction of volumes, reducing the operating companies' cash flows as the trigger point for a potential default or bankruptcy filing. We believes that if Invepar were to default, it would still have a viable business model driven by the continued demand for infrastructure services, especially for the toll roads, subway, and airport that compose its portfolio. Therefore, we believe lenders would achieve the greatest recovery amounts through reorganization of the company rather than liquidation." Simplified waterfall S&P said, "Our recovery analysis assumes an enterprise value of approximately R$5.7 billion, based on a conservative 5x multiple of the four-year average of projected EBITDA. Given a R$2.4 billion fair value attributable to LAMSA and MetroRio, joint guarantors of the notes, compared with the R$2.95 billion combined senior unsecured claims at the moment of the default, we are assigning a recovery rating of '3' to the proposed notes, indicating that we expect lenders should expect around 65% recovery of principal in the event of default." RATINGS LIST Investimentos e Participacoes em Infraestrutura S.A. (Invepar) Issuer credit rating BB-/Watch Neg/-- New Rating Investimentos e Participacoes em Infraestrutura S.A. (INVEPAR) Senior Unsecured BB-/Watch Neg Recovery Rating 3(65%) ODEBRECHT SA: Dominican Gov't. Seeks US Blessing in Plant Scandal ----------------------------------------------------------------- Dominican Today reports that the Dominican Republic seeks Washington's "blessing" to start the Punta Catalina coal-fired power plants, a facility being built by the Brazilian conglomerate Odebrecht, convicted in the US and fined US$2.6 billion for bribery. Outlet El Dia reports that the quest gets a push from the US-based company Xcoal Energy & Resources which has won the tender to supply 462,000 metric tons of the coal that will fuel Punta Catalina in its trial runs, according to Dominican Today. Moreover, the profile of Xcoal's representative is telling: Manuel Rocha, who signed the contract, was a former US ambassador to Panama from 2000 to 2002, the report notes. He was previously was Commercial Attache in Buenos Aires and also a Political Officer of the US Embassy in Santo Domingo (1983). He has held other diplomatic positions in Cuba, Honduras among other countries of the region, the report relays. Locally, Danilo Medina's administration has come under fire from the Odebrecht US$94.0 million bribe scandal, and alleged ballooned costs in the plant's construction, the report adds. About Odebrecht SA Construtora Norberto Odebrecht SA is a Latin American engineering and construction company fully owned by the Odebrecht Group, one of the 10 largest Brazilian private groups. Construtora Norberto is the world's largest builder of hydroelectric plants, of sanitary and storm sewers, water treatment and desalination plants, transmission lines and aqueducts. The Group's main businesses are heavy engineering and construction based in Rio de Janeiro, Brazil, and Braskem S.A., its chemicals/petrochemicals company, based in Sao Paulo, Brazil. As of May 5, 2009, the company continues to carry Standard and Poor's BB Issuer Credit ratings, and Fitch Rating's BB+ Issuer Default ratings and BB+ Senior Unsecured Debt ratings. * * * As reported in the Troubled Company Reporter-Latin America on Dec. 2, 2016, The Wall Street Journal related that Marcelo Odebrecht, the jailed former head of Brazilian construction giant Odebrecht SA, agreed to sign a plea-bargain agreement in connection with Brazil's largest corruption probe ever, according to a person close to the negotiations. The move could roil the nation's political class yet again. The testimony of the former industrialist, which is part of the deal, has the potential to implicate numerous politicians who allegedly took kickbacks from contractors as part of a years-long graft ring centered on Brazil's state-run oil company, Petroleo Brasileiro SA, known as Petrobras, according to The Wall Street Journal. SAO PAULO: Fitch Affirms BB- IDRs, Outlook Stable ------------------------------------------------- Fitch Ratings has affirmed the Municipality of Sao Paulo's Long- Term Foreign and Local Currency Issuer Default Ratings at 'BB-'. In addition, Fitch has affirmed Sao Paulo's national rating at 'AA(bra)'. The Rating Outlook is Stable. The affirmation of the CSP's ratings reflects the city's fiscal performance according to expectation. In 2017, operating margin reached 2.1%, according to Fitch's calculation. KEY RATING DRIVERS Fiscal Performance: Neutral/Stable The 2.1% operating margin posted in 2017 is a result of intensified collection efforts and the effects of several measures to curb expenditures despite a fairly rigid cost structure. According to Fitch's calculation, operating margins should remain to levels close to 4% by 2020. Fitch expects the recent fiscal performance recovery to continue in the coming years. Fitch notes that the city's adequate current balance has been favored by the stable and considerable amount of financial revenues generated by the city. Sao Paulo presents average fiscal flexibility, as tax revenue corresponded to an average of 54.4% of operating revenue in the last five years. Additionally, CSP registered positive overall fiscal balances over the last three years. Personnel expenditures, including pension payments, accounted for around 41% of operating expenditures in 2017 in a slightly decreasing trend. Debt, Liabilities and Liquidity: Neutral/Stable Sao Paulo's direct risk (consolidated debt) of around BRL29 billion in August 2018 represented 11.5 years of the city's operating balance, which is compatible with the average entities in the 'BB-' rating level at 9.1 years. Direct debt, composed only of external debt or debt owed to financial institutions should remain even considering the city's plan to enter into new credit operations of BRL1.3 billion until 2020. In 2017, direct debt represented only 1.5% of operating revenues, according to Fitch's calculation. The liquidity position of the city is adequate. As of August 2018, gross cash positions of BRL9.3 billion covered around 1.2x the city's obligations due in 2018. Commercial short-term liabilities diminished in April, 2018 being equivalent to around 2% of the city's operating revenues, according to Fitch's calculation (3.9% in 2017). As a negative factor, CSP has a significant amount of judicial debt payable, or precatorios. In 2017, these liabilities with irregular payment schedules corresponded to 32.3% of the city's operating revenue. Economy: Neutral/Stable With an economy based on services, Sao Paulo is Brazil's wealthiest city with above-average social and economic indicators. One negative factor is that unemployment remains high at 17% of the total economically active population in July 2018, according to the Department of Statistics and Socioeconomic Studies. This compares unfavorably with other regions in Brazil, but should improve if the current economy's recovery continues. CSP is home to around 13.1 million people, equal to approximately 6.3% of the Brazilian population, thus implying a GDP per capita of around USD9,300. Management and Administration: Neutral/Stable Fitch notes that CSP has not yet concluded the convergence to international accounting standards nor implemented corrective measures in its pension system. The reliance on nonrecurring revenue is above average because capital revenues including credit operations financed 88.3% of capex in 2017, compared with 40.7% for 'BB-'rated peers, and accuracy of fiscal forecast is considered as average. Institutional Framework: Weak/Stable Fitch considers the institutional framework to be weak, mostly as a result of very low fiscal flexibility that stems from subdued fiscal collection coupled with rigid cost structure. Moreover, the federal government has great influence over Brazilian local and regional governments (LRGs), as expressed by the vertical issuance of laws, and due to the federal government being the largest LRG creditor in many cases. RATING SENSITIVITIES Upgrade Factors: Fitch does not expect to upgrade Sao Paulo's rating above the Brazilian Sovereign Rating (BB-/Stable). Sao Paulo's ratings are capped by the sovereign. Downgrade Factors: A persistent deterioration operating margins could also have a negative impact on ratings via the changing of the fiscal performance factor to negative from neutral. FULL LIST OF RATING ACTIONS Fitch has affirmed the following ratings: City of Sao Paulo: -- Long-Term Foreign Currency IDR at 'BB-'; -- Short-Term Foreign Currency IDR at 'B'; -- Long-Term Local Currency IDR at 'BB-'; -- Short-Term Local Currency IDR at 'B'; -- Long-Term National at 'AA(bra)'; -- Short-Term National rating at 'F1+(bra)'. ============= J A M A I C A ============= JAMAICA: Tourism Workers' Pension Scheme to be Implemented Soon --------------------------------------------------------------- RJR News reports that Tourism Minister, Edmund Bartlett, has set another schedule for the start of the Tourism Workers' Pension Scheme, which he is now pledging to implement it by year end. The sector was previously seen as a seasonal industry, which made it difficult to set up pension schemes for workers, according to RJR News. The report notes that Mr. Bartlett said Government is now looking at labour market arrangements to change that. "I'm making the point about the reforms of the labor market arrangement in tourism, because we are now a fully fledged all year round industry and we must protect the workers of our industry," the Tourism Minister said, the report relays. As reported in the Troubled Company Reporter-Latin America on Sept. 27, 2018, S&P Global Ratings revised its outlook on Jamaica to positive from stable. At the same time, S&P Global Ratings affirmed its 'B' long- and short-term foreign and local currency sovereign credit ratings, and its 'B+' transfer and convertibility assessment on the country. =========== M E X I C O =========== BANCA MIFEL: S&P Puts 'BB' Long-Term ICR on CreditWatch Positive ---------------------------------------------------------------- S&P Global Ratings said that it has placed its long-term 'BB' global and 'mxA' Mexican national scale issuer credit ratings on Banca Mifel on CreditWatch with positive implications. S&P also placed its 'B' subordinated issue-level rating on Banca Mifel's $150 million subordinated notes on CreditWatch positive. The CreditWatch placement follows Banca Mifel's recent announcement of its planned IPO. This IPO would potentially allow S&P to revise the bank's RAC ratio to a stronger category (above 10%) in its base-case scenario, which could lead it to raise the ratings on Banca Mifel. S&P said, "As a result of the possible IPO, our RAC ratio--which we currently expect to be (prior to the IPO) around 8% for the end of 2018--could rise above 10%. Such an increase could trigger a positive rating action on Banca Mifel. We'll incorporate in our projections that the final shareholder's capital would increase to around MXN10.0 billion and that the bank will grow its loan portfolio consistently by around 25% for the next three years. Our base-case scenario considers that this capital increase will be enough for the bank to withstand this growth and maintain a RAC ratio consistently above 10%. "Our ratings on Banca Mifel reflects that its revenue is growing-- mainly from its credit business, although the bank still has a small market share in the Mexican banking industry. Our projected RAC ratio of 11.2% on average for 2019-2020 considers the bank's growing internal capital generation and credit growth of around 25% for 2019 and 2020 after the IPO. The bank's asset quality metrics continue to compare well to the banking industry's average, but loan portfolio concentrations remain, mainly by single name exposures. The bank's stable funding ratio (SFR) remains below that of the system. We project the SFR to be 95.8%; however, the bank's liquidity position provides adequate cushion to cope with unexpected cash outflows over the next 12 months. "We aim to resolve the CreditWatch listing on Banca Mifel within the next 90 days. We will do so by reviewing our capital and earnings assessment on the lender by incorporating the potential impact to its projected RAC ratio in 2019 and 2020 stemming from the IPO that could strengthen its capital base. We will also assess the bank's business growth strategy for upcoming years and how it will allocate that capital. "We could raise the ratings on Banca Mifel if its projected RAC ratio for 2019 and 2020 is consistently above 10% while the other rating factors (including business and risk position, funding and liquidity) remain unchanged. We could also remove the ratings from CreditWatch positive if the IPO doesn't sufficiently increase capital to allow our projected RAC ratio to be consistently over 10%." =========== P A N A M A =========== PANAMA CANAL: Moody's Alters Outlook on Ba1 Notes Rating to Neg. ---------------------------------------------------------------- Moody's Investors Service affirmed the Ba1 rating assigned to Panama Canal Railway Company's Senior Secured Notes and changed the outlook to negative from stable. The Senior Secured Notes had an original face value of $100 million with a final maturity in 2026. The Notes are amortizing and as of June 2018, the outstanding balance was $68.2 million. RATINGS RATIONALE The outlook change to negative from stable on the Ba1 rating assigned to PCRC reflects the downward trend of container volumes that has caused a deterioration of key financial metrics. While PCRC exhibited strong volume performance over the period 2010-2014, since 2015 volumes have been falling on an average of 8.7% per year. The company's current challenges highlight the extent to which its business model is vulnerable to fluctuations in global trade patterns, its reliance on few costumers, and lack of port infrastructure alternatives that would allow PCRC to expand its business. Nonetheless, PCRC also exhibits a strong cash generation capacity, low leverage with an amortizing profile that result in resilient financial metrics. Debt Service Coverage Ratio and Funds From Operations/Debt are projected to be 2.2x and 27.0% respectively for year-end 2018. In addition, the rating is underpinned by a $5 million Debt Service Reserve Fund (equivalent to 6-months of debt service) and a $6 million liquidity reserve to cover unforeseen costs. The outlook on the rating is negative reflecting its expectation that the poor performance of container volumes and deterioration of key financial metrics is likely to continue, exerting downward pressure on the rating. What Could Change the Rating Up Given the negative outlook, Moody's does not expect upward pressure on the rating. A reversal of the downward trend of containers and stabilization of financial metrics could lead to a revision of the outlook back to stable. What Could Change the Rating Down The continuation of the poor container volume performance and further deterioration of financial metrics will likely result in a downgrade on the rating. Specifically, a projected Debt Service Coverage ratio below 2.0x on a sustained basis would exert downward pressure on the ratings. Panama Canal Railway Company was incorporated on October 25, 1996 in the Cayman Islands in order to undertake a concession granted by the Government of Panama (Baa2 positive) to construct, maintain and operate freight and passenger rail services. The 47-mile long railway parallels the Panama Canal. It is the shortest land bridge connecting the Pacific and Atlantic oceans. PCRC is owned by a 50/50 joint-venture between The Kansas City Southern Railway Company (Baa3 stable) and Mi-Jack, a private company that provides lift equipment and services to over 60 intermodal railroad terminals in North America. The principal methodology used in this rating was Generic Project Finance published in April 2018. ====================== P U E R T O R I C O ====================== AMERICAN GAMING: Case Summary & 20 Largest Unsecured Creditors -------------------------------------------------------------- Two affiliates that have filed voluntary petitions seeking relief under Chapter 11 of the Bankruptcy Code: Debtor Case No. ------ -------- American Gaming & Electronics, Inc. 18-30507 223 Pratt Street Hammonton, NJ 08037 AG&E Holdings Inc. 18-30508 233 Pratt Street Hammonton, NJ 08037 Business Description: Established in 1993, American Gaming & Electronics is a supplier of gaming parts, used machines, and electronic components. AG&E is strategically located in Las Vegas, New Jersey and Florida. Its distribution chain reaches the Caribbean & Puerto Rico, Canada and Europe. AG&E provides repair service for all types of monitors and bill validators and sells a wide array of products including bill validators, monitors and LCDs, coin mechanism coin acceptors as well as replacement parts for these products. AG&E stocks a variety of repair parts and replacement parts including fuses, i.c.'s, transistors, capacitors, connectors, wire, various hardware and more. Replacement parts include button assemblies, power supplies, lamps, various game specific parts, table supplies and much more. AG&E is a wholly owned subsidiary of AG&E Holdings, Inc. (symbol AGNU) with corporate headquarters in Hammonton, NJ. Chapter 11 Petition Date: October 15, 2018 Court: United States Bankruptcy Court District of New Jersey (Camden) Judge: Hon. Andrew B. Altenburg Jr. Debtors' Counsel: Warren J. Martin, Jr., Esq. PORZIO, BROMBERG & NEWMAN, P.C. 100 Southgate Parkway Morristown, NJ 07962-1997 Tel: (973) 889-4006 Fax: (973) 538-5146 Email: wjmartin@pbnlaw.com Debtors' Financial Advisor: PODIUM STRATEGIES, LLC Assets and Liabilities: Total Total Assets Liabilities ------------ ----------- American Gaming & Electronics $945,220 $2,016,152 AG&E Holdings Inc. $0 $2,298,657 The petitions were signed by Anthony R. Tomasello, president/CEO. A full-text copy of American Gaming's petition containing, among other items, a list of the Debtor's 20 largest unsecured creditors is available for free at: http://bankrupt.com/misc/njb18-30507.pdf A full-text copy of AG&E Holdings' petition containing, among other items, a list of the Debtor's two unsecured creditors is available for free at: http://bankrupt.com/misc/njb18-30508.pdf SEARS HOLDINGS: Tempur Sealy Says Sears Only Less Than 5% of Sales ------------------------------------------------------------------ In connection with the Oct. 15 announcement that Sears Holdings Corporation and certain of its subsidiaries ("Sears") have filed for bankruptcy protection, Tempur Sealy International, Inc. is disclosing its credit exposure and sales volume related to Sears. Sears represented less than 5% of the Company's global net sales and less than $5 million of its accounts receivable exposure as of September 30, 2018. Tempur Sealy International, Inc. Chairman and CEO Scott Thompson commented, "Our products are broadly distributed across many channels so consumers can choose where and how they wish to shop. We continue to work closely with Sears during their restructuring process while managing our related financial and operational risks." About the Company Tempur Sealy International, Inc. -- http://www.tempursealy.com/-- develops, manufactures, and markets mattresses, foundations, pillows and other products. The Company's products are sold worldwide through third party retailers, its own stores, and online. The Company's brand portfolio includes many highly recognized brands in the industry, including Tempur(R), Tempur-Pedic(R), Sealy(R) featuring Posturepedic(R) Technology, and Stearns & Foster(R). World headquarters for Tempur Sealy International is in Lexington, KY. About Sears Holdings Sears Holdings Corporation (NASDAQ: SHLD) -- http://www.searsholdings.com/-- began as a mail ordering catalog company in 1887 and became the world's largest retailer in the 1960s. At its peak, Sears was present in almost every big mall across the U.S., and sold everything from toys and auto parts to mail-order homes. Sears claims to be is a market leader in the appliance, tool, lawn and garden, fitness equipment, and automotive repair and maintenance retail sectors. Sears and Kmart merged to form Sears Holdings in 2005 when they had 3,500 US stores between them. Kmart emerged in 2005 from its own bankruptcy. Unable to keep up with online stores and other brick-and-mortar retailers, a long series of store closings has left it with 687 retail stores in 49 states, Guam, Puerto Rico, and the U.S. Virgin Islands as of mid-October 2018. The Company employs 68,000 individuals, of whom 32,000 are full-time employees. As of Aug. 4, 2018, Sears Holdings had $6.93 billion in total assets, $11.33 billion in total liabilities and a total deficit of $4.40 billion. Unable to cover a $134 million debt payment due Oct. 15, 2018, Sears Holdings Corporation and 49 subsidiaries sought Chapter 11 protection (Bankr. S.D.N.Y. Lead Case No. 18-23538) on Oct. 15, 2018. The Hon. Robert D. Drain is the case judge. Weil, Gotshal & Manges LLP is serving as legal counsel, M-III Partners is serving as restructuring advisor and Lazard Freres & Co. LLC is serving as investment banker to Holdings. DLA Piper LLP is the real estate advisor. Prime Clerk is the claims and noticing agent. SEARS HOLDINGS: Receives Delisting Notice from Nasdaq ----------------------------------------------------- Sears Holdings Corporation received on Oct. 15, 2018, a letter from the listing qualifications department staff of the Nasdaq Stock Market notifying the Company that, as a result of the Chapter 11 cases and in accordance with Nasdaq Listing Rules 5101, 5110(b) and IM-5101-1, Nasdaq has determined that the Company's common stock and warrants to purchase common stock will be delisted from Nasdaq. Accordingly, unless the Company requests an appeal of this determination, trading of the securities will be suspended at the opening of business on Oct. 24, 2018 and a Form 25-NSE will be filed with the Securities and Exchange Commission, which will remove the Company's securities from listing and registration on Nasdaq. The Company does not intend to appeal the determination and, therefore, it is expected that the securities will be delisted. The Company expects that the trading of its securities on the OTC Pink market will commence on Oct. 24, 2018 under the symbol "SHLDQ". The transition does not affect the Company's operations and does not change reporting requirements under SEC rules. About Sears Holdings Sears Holdings Corporation (NASDAQ: SHLD) -- http://www.searsholdings.com/-- began as a mail ordering catalog company in 1887 and became the world's largest retailer in the 1960s. At its peak, Sears was present in almost every big mall across the U.S., and sold everything from toys and auto parts to mail-order homes. Sears claims to be is a market leader in the appliance, tool, lawn and garden, fitness equipment, and automotive repair and maintenance retail sectors. Sears and Kmart merged to form Sears Holdings in 2005 when they had 3,500 US stores between them. Kmart emerged in 2005 from its own bankruptcy. Unable to keep up with online stores and other brick-and-mortar retailers, a long series of store closings has left it with 687 retail stores in 49 states, Guam, Puerto Rico, and the U.S. Virgin Islands as of mid-October 2018. The Company employs 68,000 individuals, of whom 32,000 are full-time employees. As of Aug. 4, 2018, Sears Holdings had $6.93 billion in total assets, $11.33 billion in total liabilities and a total deficit of $4.40 billion. Unable to cover a $134 million debt payment due Oct. 15, 2018, Sears Holdings Corporation and 49 subsidiaries sought Chapter 11 protection (Bankr. S.D.N.Y. Lead Case No. 18-23538) on Oct. 15, 2018. The Hon. Robert D. Drain is the case judge. Weil, Gotshal & Manges LLP is serving as legal counsel, M-III Partners is serving as restructuring advisor and Lazard Freres & Co. LLC is serving as investment banker to Holdings. DLA Piper LLP is the real estate advisor. Prime Clerk is the claims and noticing agent. SEARS HOLDINGS: PREIT Exposure Down to 4 Stores ----------------------------------------------- PREIT outlined its proactive Sears replacement strategy, resulting in minimal exposure to the troubled department store, down from 27 stores in 2012 to just four active stores on Oct. 10, 2018, when factoring in locations at lease with replacement tenants, those with non-recourse mortgage loans and one location with a significant portion of the space sub-leased by Sears to others. PREIT's four stores compares to a Mall REIT peer average of over thirty stores. Since 2017, PREIT has proactively replaced five Sears locations and has reached agreement to recapture a sixth store. As part of its overall anchor repositioning and remerchandising strategy, PREIT has diversified the tenant roster with unique and experiential concepts to reflect the new mall model and drive traffic and sales while improving the underlying tenant credit within the portfolio. "Just as we were proactive in disposing of lower-productivity malls, we have positioned ourselves well with minimal exposure to Sears in the event of potential material store closing event. As we look to redefine the mall experience, we are finding great success in replacing department stores with a variety of uses and experiences in line with the interests of today's consumer," said Joseph F. Coradino, CEO of PREIT. "Our tireless effort to improve our portfolio continues and has laid the foundation for continued growth in traffic, sales and value for our shareholders." A snapshot of new anchor tenants throughout the portfolio, either signed or opened, across several in-demand retail segments, includes: Segment Brand Property Off-Price Burlington Magnolia Mall Plymouth Meeting Mall HomeGoods Viewmont Mall Magnolia Mall Five Below Magnolia Mall HomeSense Moorestown Mall Sierra Trading Moorestown Mall Entertainment Tilt Valley Mall Studio Movie Grille Willow Grove Park Fitness Edge Fitness Plymouth Meeting Mall One Life Fitness Valley Mall Sporting Goods/ DICK's Sporting Goods Viewmont Mall Recreation Field & Stream Capital City Mall Plymouth Meeting Mall Department Store Belk Valley Mall Von Maur Woodland Mall Food and Dining Primanti Bros Capital City Mall Fine Wine & Good Spirits Capital City Mall Whole Foods Exton Square Mall About PREIT PREIT (NYSE: PEI) -- http://www.preit.com/-- is a publicly traded real estate investment trust that owns and manages quality properties in compelling markets. PREIT's robust portfolio of carefully curated retail and lifestyle offerings mixed with destination dining and entertainment experiences are located primarily in the densely populated eastern U.S. with concentrations in the mid-Atlantic's top MSAs. Since 2012, the Company has driven a transformation guided by an emphasis on portfolio quality and balance sheet strength driven by disciplined capital expenditures. About Sears Holdings Sears Holdings Corporation (NASDAQ: SHLD) -- http://www.searsholdings.com/-- began as a mail ordering catalog company in 1887 and became the world's largest retailer in the 1960s. At its peak, Sears was present in almost every big mall across the U.S., and sold everything from toys and auto parts to mail-order homes. Sears claims to be is a market leader in the appliance, tool, lawn and garden, fitness equipment, and automotive repair and maintenance retail sectors. Sears and Kmart merged to form Sears Holdings in 2005 when they had 3,500 US stores between them. Kmart emerged in 2005 from its own bankruptcy. Unable to keep up with online stores and other brick-and-mortar retailers, a long series of store closings has left it with 687 retail stores in 49 states, Guam, Puerto Rico, and the U.S. Virgin Islands as of mid-October 2018. The Company employs 68,000 individuals, of whom 32,000 are full-time employees. As of Aug. 4, 2018, Sears Holdings had $6.93 billion in total assets, $11.33 billion in total liabilities and a total deficit of $4.40 billion. Unable to cover a $134 million debt payment due Oct. 15, 2018, Sears Holdings Corporation and 49 subsidiaries sought Chapter 11 protection (Bankr. S.D.N.Y. Lead Case No. 18-23538) on Oct. 15, 2018. The Hon. Robert D. Drain is the case judge. Weil, Gotshal & Manges LLP is serving as legal counsel, M-III Partners is serving as restructuring advisor and Lazard Freres & Co. LLC is serving as investment banker to Holdings. DLA Piper LLP is the real estate advisor. Prime Clerk is the claims and noticing agent. ================================ T R I N I D A D & T O B A G O ================================ PETROLEUM CO: Bankers Offer Advice to Former Workers ---------------------------------------------------- Camille Hunte at Trinidad Express reports that the banking sector wants to provide guidance to Petroleum Co. of Trinidad & Tobago (Petrotrin) former employees on how to make the best use of their severance pay following the closure of the company. Managing director and chief executive officer of JMMB Bank, Nigel Romany, said that the ex-workers must spend and invest wisely if they are to make it through this tough period in their lives, according to Trinidad Express. As reported in the Troubled Company Reporter-Latin America on Sept. 28, 2018, Moody's Investors Service placed Petroleum Co. of Trinidad & Tobago's B1 corporate family rating and senior unsecured debt ratings on review for downgrade. This rating action was based on the lack of clarity regarding Petrotrin's new business profile and strategy as well as increasing liquidity risk related to the approaching maturity of the 2019 bonds. *********** 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 * * *