TCRLA_Public/181031.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

               Wednesday, October 31, 2018, Vol. 19, No. 216



CBC AMMO: Fitch Affirms BB LT FC & LC IDR; Alters Outlook to Neg.
ODEBRECHT ENGENHARIA: Fitch Lowers LT Issuer Default Ratings to C
ODEBRECHT ENGENHARIA: S&P Downgrades ICR to 'CC', Outlook Stable
OI SA: Arbitrator Suspends Capital Hike

D O M I N I C A N   R E P U B L I C

DOMINICAN REPUBLIC: US-DR Pact Benefits Diplomatic Personnel


ENGENCAP HOLDING: S&P Assigns 'BB' Long-Term ICR, Outlook Stable


PROMERICA FINANCIAL: Fitch Assigns BB- LT IDR, Outlook Stable

P U E R T O    R I C O

4J CUSTOM DESIGN: Seeks to Hire Hatillo Law as Attorney
ADLER GROUP: Disclosure Statement Hearing on Dec. 20
AUTO MASTER EXPRESS: Creditor Wants Court to Prohibit Use of Cash
J & M SALES: Landlords Cite No Adequate Assurances on Leases

T R I N I D A D  &  T O B A G O

TRINIDAD CEMENT: Earnings Plunge 52%

                            - - - - -


CBC AMMO: Fitch Withdraws 'BB' IDRs & Alters Outlook to Negative
Fitch Ratings has affirmed the Long-Term Foreign and Local
Currency Issuer Default Ratings of CBC AMMO LLC at 'BB'. The
Rating Outlook has been revised to Negative from Stable and the
IDRs have been withdrawn. Fitch has withdrawn CBC's ratings for
commercial reasons.

The Negative Outlook reflects the challenges that CBC faces,
mainly through CBC Global Ammunition LLC and its subsidiaries to
recover its financial flexibility and liquidity profile. On a
consolidated basis, CBC Global presents a weak liquidity position
for its current IDRs and experience a deterioration of its funding
conditions within Brazilian banks, due to the contamination from
Forjas Taurus S.A.'s (Taurus) poor credit profile and debt
restructuring. CBC controls Taurus - a publicly traded company -
owning 67% of its shares. The previous analysis did not
contemplate a negative influence from Taurus, on CBC's financing
capacity, as there is neither cross-guarantee nor cross-default
clauses on both companies debts. The company has the vast majority
of its debt secured by operating assets, presents low cash-to-
short term debt coverage ratio and, currently, does not have
access to revolving credit facilities.

CBC's IDRs reflect its solid business performance as a global
manufacturer of small-calibre ammunition operating within the
military, law enforcement and commercial segments across Europe,
Latin America and the U.S. CBC presents a steady profitability in
the global ammunition market, a mature, fragmented and highly
regulated industry facing a positive long term trend. CBC business
position and the encouraging industry perspectives provide
reasonable visibility to CBC's cash flow generation. The group has
been able to consistently deliver EBITDA margins above 20% due to
its established and diverse customer base, well-recognized brands
and efficient engineering and operation - even though competition
on price is moderate to high, particularly within its more
standard product offerings.

CBC reports adequate capital structure, with leverage, measured by
total adjusted debt/EBITDA, peaking at 3.0x in 2017, after it
remained relatively stable around 2.5x over the last four years.
Fitch expects the increase to be temporary, with the ratio
reaching 3.3x at the end of 2018 and then converging close to
historical levels, as the company continues to increase revenues
and EBITDA, together with lower capex levels.


Solid Business Profile to Remain: Fitch expects CBC to maintain
its solid presence in the global small-calibre ammunition market.
The company's strong business profile is supported by its
established and diverse customer base, well-recognized brands
(CBC, MEN, Sellier & Bellot, and Magtech), efficient engineering
and operation, and global footprint. CBC is one of the largest
suppliers of small-caliber ammunition to NATO member countries in
Europe, the leader manufacturer of commercial handgun ammunition
in Latin America and Europe, and the second-largest exporter of
brass case commercial ammunition to the U.S. On the other hand,
CBC presents a more standard and concentrated product offering,
medium scale and the lack of control of downstream distribution
channels in key markets, such as the U.S.

CBC's diversified customer base - across geographies and market
segments - provides the company an important competitive edge.
Serving both the military and the civilian segments, CBC mitigates
its exposure to the business cycle. At the same time, being a
supplier to the military provides the company with a more secure
revenue source, as regulations, requirements and relationships
reduce competition in this segment. Additionally, its
manufacturing presence in the Czech Republic and Brazil ensures
low production costs and higher margins. Currently, CBC has five
manufacturing facilities, three in Brazil, one in Germany and one
in the Czech Republic, as well as distribution centers for
commercial sales in Brazil Europe and the US. CBC's revenues are
primarily generated in the Eurozone (39%), followed by South and
Central America (26%) and North America (20%).

Robust Margins to Remain: CBC's strong operating cash flow
generation is supported by is its prominent business profile, its
operating efficiency and its ability to pass-through most of
commodities volatilities to product prices. The recent increase in
production capacity and the conquest of new markets should mature
in 2019, when a more robust growth in units sold across all
product lines is expected. Fitch projects EBITDA at USD112 million
(20.2% margin) in 2018 and USD132 million (21.5% margin) in 2019,
with negative FCF of USD10 million in 2018 and a positive USD25
million in 2019. As for the LTM ended on June 2018, net revenue
reached USD564 million, EBITDA was at USD128 million, cash flow
from operations (CFFO) was USD60 million and FCF was negative at
USD21 million.

Leverage Increased But Still Moderate: CBC leverage, measured by
total adjusted debt/EBITDA, peaked at 3.0x in 2017 after it
remained relatively stable around 2.5x over the last four years.
Fitch expects the increase to be temporary, with the ratio
reaching 3.3x at the end of 2018 and then converging to levels
close to historical as the company resumes growth and reduces
capex. The increase in leverage occurred as CBC began financing
its larger working capital needs with trade finance facilities,
rather than providing letters of credit to its suppliers, as it
used to do. Additionally, the company prepaid its senior secured
notes due in 2021 together with prepayment penalties, by raising a
higher debt amount in one of its operating companies. The exchange
was motivated by significant lower funding costs. Fitch expects
net debt/EBITDA to reach 3.0x and 2.4x in 2018 and 2019,
respectively, and funds from operations (FFO) adjusted net
leverage at 4.0x and 3.0x for the same periods, respectively.

Currency Mismatch Deserves Attention: The currency mismatch within
CBC's revenue stream, cost composition and capital structure could
add volatility to the company's results and may pose challenges
from an asset-liability management perspective. Fitch estimates
that 75% of CBC's revenue is in hard currency, comparing to 54% of
total costs. Moreover, almost all CBC's debt is denominated in
hard currency, being 83% in EUR and 17% in USD, as of June 2018.
The revenue versus costs mismatch may benefit the company during
periods of strong developed markets economic activity and currency
strength. Alternatively, strong emerging market economic growth
and inflation increase that are not followed by currency
depreciation, may pressure the company's reported margins. On the
capital structure side, the currency mismatch is mitigated by a
well spread debt amortization schedule - for its long-term debt -
and by the operating related nature of most of its short-term debt
(trade finance and working capital).

Positive Trends For the Ammunition Market: Growing defence budgets
of developing countries, increasing geopolitical tensions across
the world, coupled with anti-terror investments in developed
countries are the key factors driving growth in the global
ammunition market, which should reach over USD20 billion by 2020.
On the other hand, implementation of stringent gun control and
prospects of growing protectionism are the main threats of the
industry. The global small-calibre ammunition market is mature,
fragmented, heavily regulated, and strongly influenced by regional
factors, such as the level of firearm acceptance, number of
firearms, level of violence and the popularity of hunting and
shooting sports. The wide variety of products and buying markets
make it difficult for individual companies to grab a large portion
of industry's market share.

Competition on price is moderate to high, particularly within more
standard product offerings. Moreover, the level of technology
change is moderate, being more relevant to specialized high-
performed military ammunition. On the other hand, moderate to high
capex to acquire and maintain plants, established relationships
with upstream suppliers and downstream markets, and multiple
regulations couple with the hazardous nature of its products
constitute the major barriers to entry the industry.


Similarly to Klabin (BB+/Stable) and Marfrig (BB-/Stable), CBC
operates globally and has a prominent competitive position on its
industry. Compared to Klabin, CBC operates in a more regulated
industry, has a much lower scale and presents lower operating
margins. During the LTM ended on June 2018, net revenues for CBC
and Klabin were USD564 million and USD8,946 million, respectively,
while EBITDA margins were 20% and 36%. Compared to CBC, Marfrig is
also subjected to regulation (mainly sanitary ones), but operates
in a more volatile industry with lower margins (EBITDA margin at

CBC has lower leverage, yet lower financial flexibility, compared
to Klabin and Marfrig. As of June 30, 2018, Marfrig had about
USD1.5 billion of cash and cash equivalent against BRL1.7 billion
of short-term debt while its leverage, measured by net
debt/EBITDA, was at 4.0x. For the same period, Klabin presented
even stronger liquidity position and low refinancing risk, with
cash holdings close to USD7 billion, which covered its short-term
debt by more than 3x. Klabin leverage was at 3.9x.


Fitch's Key Assumptions Within Its Rating Case for the Issuer

  -- Revenue growth of 0.7% in 2018 and 11.2% in 2018, driven
     mainly by volume;

  -- COGS as a percentage of Revenue increasing from 65% to 68%
     due to change in product mix sold;

  -- Hard currency accounting for 75% of revenue and 54% of total

  -- CapEx at USD27 million in 2018 and 24 million in 2019;

  -- Annual dividends around USD25 million.


Developments That May, Individually or Collectively, Lead to
Positive Rating Action

An upgrade of CBC's IDRs is unlikely in the short to medium term.
However a revision of the Outlook to Stable from Negative depends

  -- Improved financial flexibility;

  -- Improved liquidity profile, with cash-to-short term debt
     coverage ratio in line with historical levels.

Developments That May, Individually or Collectively, Lead to
Negative Rating Action

  -- Continuing reduced financial flexibility and low cash-to-
     short-term debt coverage ratio;

  -- Debt/EBITDA of 4x;

  -- EBITDA margin below 15%;

  -- Deterioration of the company's business position.


Reduced Financial Flexibility Is a Challenge: CBC's financial
flexibility materially deteriorated over the LTMs. The company
prepaid its 2021's bonds raising a 2023's loan secured by all its
operating assets and saw its credit availability in Brazil
constrained by Taurus's weak credit profile, which lead to a
recent debt restructuring. Fitch understands that Taurus's risks
remain legally ring-fenced, yet it is harming CBC's funding
conditions and access to Brazilian local banks. Therefore, Taurus
financials are not consolidated in Fitch's analysis.

CBC liquidity profile is weak for its current IDR, due to a very
low cash coverage ratio and the absence of revolving credit
facilities. From 2017, CBC started to fund its increasing working
capital needs with short-term trade finance and working capital
facilities, rather than providing suppliers with letters of
credit, which did not appear on its balance sheet as financial
debt. As a result, Fitch expects cash over short-term debt of 0.3x
at 2018 and 2019, down from a ratio higher than 1.0x from 2014 to

As of June 2018, CBC had consolidated short-term debt of
approximately USD112 million and cash of USD27million, leading to
a 0.2x coverage ratio. Of the USD112 million, 48% related to trade
finance facilities and 12% related to financial leases, while the
rest 40%, or USD45 million, related to working capital and the
short-term portion of long term debt. If Fitch excludes trade
finance and financial leases from the company's short-term debt,
its coverage ratio would improve to 0.6x.


Fitch has affirmed and withdrawn the following ratings:


  -- Long-Term Foreign Currency IDR at 'BB';

  -- Long-Term Local Currency IDR at 'BB'.

The Rating Outlook has been revised to Negative from Stable.

ODEBRECHT ENGENHARIA: Fitch Lowers LT Issuer Default Ratings to C
Fitch Ratings has downgraded Odebrecht Engenharia e Construcao
S.A.'s Long-Term Foreign and Local Currency Issuer Default Ratings
to 'C' from 'CC'. Fitch has also downgraded Odebrecht Finance
Ltd.'s senior unsecured notes to 'C'/'RR4' from 'CC'/'RR4'.


The downgrade to 'C' follows OEC's announcement that it will
exercise the 30-day grace period on the USD11.4 million coupon
payment due on Oct. 25, 2018, on its 4.375% 2025 senior unsecured
notes, which indicates a default-like process has begun, according
to Fitch's methodology, and precedes, in the agency's view, a
potential distress debt exchange process.

Despite available cash balance for the coupon payment, OEC decided
to enter into a grace period and revise its short- and long-term
liquidity strategies. In Fitch's opinion, the company's late
payment on relatively small coupon raises concerns about the
company's willingness and capacity to amortize future coupon and
principal payments and high working capital needs, and poses
serious threat to the payment of the next coupons of USD60.8
million scheduled for December 2018 and USD91.8 million throughout
the first half of 2019. In early October, OEC paid USD5.6 million
in coupons of the 2020 and 2023 bonds.

In Fitch's opinion, OEC still has several challenges to avoid
restructuring its coupon payments and amortizations, at the same
time, it builds cash to support its working capital needs. The
company also has to settle plea bargain agreements with countries
in Latin America; stop the cash burn; collect past-due
receivables; stabilize and improve the quality of its backlog and
rebuild reputation within weak market demand


OEC's rating is lower than its local peer Andrade Gutierrez
Engenharia S.A. (AGE, CCC-). AGE has been more successful in
adding a backlog of private clients, which is expected to turn
into revenues in a shorter period compared to OEC. Both companies
have relevant challenges to turnaround its operations and recover
backlog in order to improve the overall credit quality, worsened
by weak market environment. OEC still has to sign plea bargain
agreements in seven countries and with Brazilian authorities,
while AGE is in the final steps to settle an agreement with AGU
and CGU.


Developments That May, Individually or Collectively, Lead to
Positive Rating Action

  -- Amortization of the USD11.4 million coupon of the 2025 within
     the grace period would bring corporate ratings back to 'CC'.

Developments That May, Individually or Collectively, Lead to
Negative Rating Action

  -- Extending the payment delay for more than 30-days would lead
     corporate ratings to 'RD';

  -- Filling for bankruptcy protection would lead corporate
     ratings to 'D'.


OEC has a poor liquidity position relative to its debt obligations
and high operational cash burn. As of June 30, 2018, the company
had BRL1.8 billion (USD456 million) of cash. From July 1, 2018
until now, OEC has paid approximately USD20 million in coupons.
The company received a capital injection of approximately BRL1
billion in the first half of 2018 and used part of proceeds to
amortize the principal amortization of the senior unsecured noted
and the coupon payment of the 2025 senior unsecured bond, in the
amount of BRL540 million. OEC still has coupon payments of USD60.8
million due throughout December, 2018 and a USD92 million coupon
scheduled for the first half of 2019.


Fitch has downgraded the following ratings:

Odebrecht Engenharia e Construcao S.A.

  -- Long-Term Foreign and Local-Currency IDRs to 'C' from 'CC';

  -- National Scale Rating to 'C(bra)' from 'CC(bra)'.

Odebrecht Finance Limited

  -- USD500 million senior unsecured notes due 2020 to 'C'/'RR4'
     from 'CC'/'RR4';

  -- USD600 million senior unsecured noted due 2022 to 'C'/'RR4'
     from 'CC'/'RR4';

  -- USD800 million senior unsecured notes due 2023 to 'C'/'RR4'
     from 'CC'/'RR4';

  -- USD550 million senior unsecured notes due 2025 to 'C'/'RR4'
     from 'CC'/'RR4';

  -- USD500 million senior unsecured notes due 2029 to 'C'/'RR4'
     from 'CC'/'RR4';

  -- USD850 million senior unsecured notes due 2042 to 'C'/'RR4'
     from 'CC'/'RR4';

  -- USD750 million perpetual bonds to 'C'/'RR4' from 'CC'/'RR4'.

The 'RR4' denotes a recovery prospect between 31% and 50%.

ODEBRECHT ENGENHARIA: S&P Lowers ICR to 'CC', Outlook Stable
S&P Global Ratings lowered its global scale issuer credit rating
on Odebrecht Engenharia e Construcao S.A. (OEC) to 'CC' from
'CCC'. S&P said, "At the same time, we lowered our long-term
national scale issuer credit rating on the company to 'brCC' from
'brB'. We also lowered the short-term national scale rating to
'brC' from 'brB'."

S&P said, "In addition, we lowered our issue-level ratings on
OEC's sister company, Odebrecht Finance Ltd. (OFL), to 'CC' from
'CCC'. The '4' recovery rating on this debt, indicating our
expectation that lenders would receive average (30%) recovery of
their principal in the event of a payment default, remains

Finally, S&P has placed all ratings on CreditWatch negative.

S&P said, "The downgrade reflects our view of the greater
likelihood and incentives for a short-term debt restructuring or
de facto default. This stems from OEC's still weak cash flow
generation and the Odebrecht group's diminishing financial
flexibility. We believe the company will likely pursue a more
balanced capital structure within the 30-day grace period after it
announced the nonpayment of interest expenses related to the 2025
unsecured notes.

"We estimate OEC as currently having a cash position of $400
million - $500 million, which combined with about $150 million in
EBITDA for the year, would be sufficient to cover its short-term
debt and operating obligations. However, given the still
challenging business conditions and continued cash burn, we
believe there's a greater risk of debt restructuring in order to
match OEC's entire capital structure to its cash flow generation.

"In order for us to remove the ratings from CreditWatch, OEC will
have to make the interest payment. In addition, the company will
need a successful business revamp through a consistent backlog
replenishing, or significant support from the holding company that
would provide OEC with sufficient cash cushion to honor its
financial obligations in the next 12-18 months. Better business
prospects, along with a stronger cash position, could lower the
incentives for a short-term debt restructuring."

OI SA: Arbitrator Suspends Capital Hike
Gram Slattery at Reuters reports that an arbitration chamber run
by Brazil's Sao Paulo Stock Exchange has temporarily suspended a
capital hike planned by Oi SA in order to adjudicate a dispute
between the major telecommunications company and a shareholder.

In a statement, Oi shareholder Pharol SGPS SA said it had been
given until Nov. 5 to present additional arguments to the body
regarding the legality of the planned capital raise, according to

Last December, creditors in Oi, Brazil's largest fixed line
telecom company, approved a plan to restructure about BRL65
billion (US$17.7 billion) in debt after 18 months of testy
negotiations between bondholders and shareholders, the report
relays.  As part of that plan, key creditors had agreed to inject
an additional BRL4 billion into the company to allow for needed
capital expenditures and to improve its debt profile, the report

Just last week, Oi said that the plan had been approved by a
bankruptcy court in Portugal, an important step that sent Oi
shares higher, the report notes.

In a statement, Oi said it had rigorously complied with court
orders, had received approval for its plans from bankruptcy
courts, and would hold Pharol legally responsible for any delays
in the capital hike that could cause financial losses, the report

It added that the arbitrator's decision was "provisional" and
could be changed, the report adds.

As reported on the Troubled Company Reporter-Latin America on
Sept. 27, 2018, S&P Global Ratings assigned its 'B' issue-level
rating to Oi S.A.'s (global scale: B/Stable/--; national scale:
brA/Stable/--) existing $1.6 billion senior unsecured notes due
2025. S&P also assigned a '4' recovery rating to the notes, which
indicates average recovery expectation of 30%-50% (rounded
estimate 40%) in the event of payment default.

D O M I N I C A N   R E P U B L I C

DOMINICAN REPUBLIC: US-DR Pact Benefits Diplomatic Personnel
Dominican Today reports that the Dominican Republic Foreign
Affairs Ministry and the U.S. Embassy signed an agreement to
authorize paid work for spouses and other relatives of diplomatic
and consular personnel assigned to either country.

Foreign minister Miguel Vargas and US Ambassador Robin Bernstein
signed the Employment Agreement for Dependents of Official
Employees, at a ceremony in the Dominican Chancellery, according
to Dominican Today.

The report notes that Mr. Bernstein said the pact highlights the
strong ties between the Dominican Republic and United States and
how they continue to provide support to members of the Foreign
Service abroad "who tirelessly provide a valuable service to our
two great nations."

"This is the first bilateral labor agreement that the government
of the United States will sign with the Dominican government. The
United States has 117 similar agreements around the world and we
know that these make a difference," the diplomat said, the report

Mr. Bernstein added that she hopes to continue working with the
Dominican government on future opportunities that add value to the
relations of the two countries, the report adds.

As reported in the Troubled Company Reporter-Latin America on
Sept. 24, 2018, Fitch Ratings affirmed Dominican Republic's
Long-Term, Foreign-Currency Issuer Default Rating (IDR) at 'BB-'
with a Stable Outlook.


ENGENCAP HOLDING: Fitch to Assign BB-(EXP) Issuer Default Rating
Fitch Ratings expects to assign 'BB-(EXP)' and 'B(EXP)' ratings to
Engencap Holding, S. de R.L. de C.V.'s Long- and Short-Term Issuer
Default Ratings, respectively, at the time of the closing of
Engencap's acquisition of TIP de Mexico, S.A.P.I. de C.V. The
expected ratings are contingent on the completion of the
transaction and a final review by Fitch to assess any change in
assumptions that may have occurred since the acquisition was

Fitch also expects to assign a 'B(EXP)' Long-term rating to
Engencap Holding's upcoming subordinated perpetual notes for up to
USD225 million. The final rating is contingent upon the receipt of
final documents conforming to information already received. The
acquisition is contingent on the successful placement of the
subordinated notes, which will fully finance TIP's net purchase
price of MXN3,526.4 million and related transaction expenses.

The aforementioned expected ratings are for a combined Engencap
Holding-TIP entity. If the acquisition does not occur, the final
rating for Engencap Holding could be different.



Engencap Holding's expected IDRs are driven by Fitch's view that
the combined entity's business profile will be stronger due to an
improved market position and larger business scale, asset
diversification, better earnings generation capacity, improved
profitability prospects and a more diversified funding mix.

TIP, currently owned by Linzor, will strengthen its company
profile by increasing its business scale and broadening its target
customer base, consolidating its position as the second largest
independent player in the leasing sector in Mexico. The combined
company will have a more diverse asset base, as TIP will represent
approximately 30% of the consolidated portfolio and there will be
cross-selling opportunities.

Engencap Holding registered standalone operational net losses in
2016 and 2017 as a result of the process of setting up independent
operations. TIP's proven track record of earnings generation and
growing business volume will benefit Engencap Holding's
profitability immediately after the acquisition; however, short-
term combined metrics will still be lower than its closest peers'.
Reported combined pre-tax income to average assets would have been
approximately 1.1% for 2Q18, higher than the 0.4% reported by
Engencap Holding on a standalone basis.

The Pre-Tax Income to Average Assets ratio for the combined
company in 2018 and 2019 is estimated to be 1.1% and 2.5%,
respectively, better than recent past profitability but still
lagging behind peers. Fitch considers 2018 estimated combined
profitability is achievable considering most of it will be
contributed by TIP. Fitch considers currency risk will continue to
be relevant but will decrease as the company services its USD
securitization transaction with restricted cash and portfolio

The transaction generated goodwill and there was a relevant
increase in intangibles due to the recognition of customer
relationships and trademarks. This will result in higher combined
tangible leverage, even after considering the benefit of the 50%
equity credit assigned to the upcoming issue of USD225 million
perpetual notes. The company's debt to tangible equity ratio will
increase to approximately 6.8x at the end of 2Q18 (2017: Engencap
Holding: 4.7x) but is similar to peers' and reasonable considering
lower client concentrations relative to equity and the cushion
provided by restricted cash to service debt obligations.
Engencap's debt to tangible equity ratio (net only of restricted
cash) stands at 5.4x at the close of 2Q18.

The combined company's funding profile will be more diverse in
terms of number of providers and Engencap Holding's larger
business scale and track record as an issuer in the international
securitization market may translate into an improvement in TIP's
cost of funds. The issuance of the perpetual bond will add an
unsecured funding source to the combined funding mix; unsecured
funding will be slightly above 10% of total funding considering
50% of the perpetual notes as debt. The company's liquidity
profile will benefit from TIP's cash flow generation and the fact
that both companies' cumulative liquidity gaps are positive

The combined impaired loan ratio at the close of 2Q18 would have
been 3.6% with a reserve coverage ratio of 44.3% according to
Fitch estimates, reflecting increased impairments at Engenium
compared to the close of 2017 because of delinquencies in the
transportation segment. In Fitch's view, the combined company's
asset quality will remain at reasonable levels and relatively in
line with peers. Fitch believes non-performing loan ratio
volatility could increase considering TIP's more volatile asset
quality metrics. Nevertheless, historical write-offs have been
very low for Engencap Holding, and virtually null for TIP; this
sustains Fitch's view that future effective credit losses will
remain low.


The proposed notes are expected to be subordinated to existing
unsecured debt but senior to equity. These will be perpetual in
nature but may be redeemed at the entity's option on the fifth
year after issuance (first call date) and on every fifth
anniversary thereafter. Interest on the notes will be payable
semi-annually and is subject to Engencap Holding's right to defer
payment of interest. Interest deferrals are cumulative; the
payment of a dividend or any other distribution made to common
stock or parity securities will trigger the compulsory payment of
deferred interest in arrears. Nevertheless, Engencap Holding's
ability to resume coupon deferral after such distribution will
remain. In the event of a change of control that results in a
rating decline, there is a coupon step-up of 5% per annum in

The notes would be rated two notches below the company's Long-Term
IDR according to Fitch's methodology "Non-Financial Corporates
Hybrids Treatment and Notching Criteria." The two notch
differential represents incremental risk relative to the entity's
IDRs, reflecting the increased loss severity due to its
subordination and heightened risk of non-performance relative to
other obligations, namely existing unsecured debt.

Fitch analyzed the terms of the instrument in order to identity
structural features that could constrain the company's ability to
activate the equity-like features of the hybrid. Therefore, Fitch
has granted 50% equity credit given the existence of a coupon
step-up of 500 bps in the event of a change of control, the
ability to defer coupon payments and its perpetual nature.

The initial terms of the issuance incorporate a feature which
according to Fitch's criteria may be considered an effective
maturity date 15 years after the first call date, due to the
existence of a cumulative step-up greater that 100 bps. This could
lead Fitch to stop assigning equity credit five years prior to
such effective maturity date.

Criteria Variation: Fitch applied a criteria variation from the
"Non-Financial Corporates Hybrids Treatment and Notching
Criteria." The notes contain provisions that mandate the payment
of deferred interest in arrears in the event distributions are
made to capital stock and parity securities. Fitch views these
provisions as a means of preserving seniority over capital stock
and not as look-back provisions, as these provisions are not
intended to constrain the issuer's ability to defer coupons
following the payment of distributions. Without applying this
variation equity credit would be 0% and the notes' ratings would
be 'B+'.



The ratings could be downgraded if the combined company is not
able to sustain a pre-tax income to average assets ratio above 1%
consistently. A material increase in non-performing loans or in
concentrations per debtor, coupled with a relevant increase in
tangible leverage could also negatively affect ratings. Evidence
of weaknesses in corporate governance or internal controls, or the
materialization of higher than expected costs arising from the
integration process could also pressure ratings downward.

Upside potential in the short-term is limited. The ratings could
be upgraded in the medium term if the company materially
strengthens its franchise and competitive position under its new
strategy as an independent leasing company. This is while the
company achieves and maintains a pre-tax income to average assets
ratio consistently above 3%, reduces concentrations per debtor,
and sustains a tangible leverage ratio below 6x, while it
maintains asset quality metrics around current levels. All of the
above coupled with an improvement in the flexibility of its
funding mix driven by a materially larger contribution of
unsecured facilities or a significantly larger portion of
unencumbered assets.


The notes' rating is primarily sensitive to a change in Engencap
Holding's IDR. Fitch expects that, under most circumstances, the
proposed notes will remain rated two notches below the company's

Fitch assigned the following ratings:

Engencap Holding, S. de R.L. de C.V.:

  -- Long-Term Local and Foreign Currency IDRs 'BB-(EXP)'; Outlook

  -- Short-Term Local and Foreign Currency IDRs 'B(EXP)';

  -- Subordinated perpetual notes for up to USD225 million

The aforementioned expected ratings are for a combined Engencap
Holding-TIP entity. If the acquisition does not occur, the
expected rating for Engencap Holding could change.

ENGENCAP HOLDING: S&P Assigns 'BB' Long-Term ICR, Outlook Stable
S&P Global Ratings assigned its 'BB' long-term issuer credit
rating to Engencap Holding, S. de R.L. de C.V. (Engenium). The
outlook is stable.

Engenium is a leasing and lending company that provides operating
and capital leasing specialized products, as well as
asset-backed loans, mainly through equipment financing. Engenium
will acquire TIP de MÇxico, S.A.P.I. de C.V. y Subsidiarias (TIP),
which is a Mexican finance company and one of the largest trailer
and equipment leasing companies in Mexico--supported by its two
main business lines, trailers and autos. TIP also offers
customized solutions and ancillary fleet services such as
maintenance, administration, and protection services.

S&P said, "The rating on Engenium reflects our view that the
company's leveraged buyout of TIP would enhance Engenium's
business profile and operating stability. We expect the
consolidated entity to capture more than 10% market share of
Mexico's independent leasing sector, resulting in a stronger
business mix through the incorporation of the already developed
business lines.

Still, integration risk and the debt funding of the acquisition
are key credit factors. Engenium will purchase TIP for Mexican
pesos (MXN) 3.85 billion by issuing approximately $215 million of
subordinated perpetual notes. The subordinated debt and the
generation of goodwill and other intangibles will substantially
reduce the quality of the combined firm's consolidated capital
structure. S&P expects its risk-adjusted capital ratio (RAC) to be
around 7.8% in the next 24 months. In addition, management will
face execution challenges to generate synergies for both companies
that will improve Engenium's financial profile while diversifying
funding sources and reducing funding costs. The ratings also
reflect Engenium's asset quality metrics that compare positively
with other peers in the region. However, NPA coverage with loan
loss reserves is low, around 50% and S&P thinks that the lender
will still have high client concentration relative to peers.


PROMERICA FINANCIAL: Fitch Assigns B/BB- IDRs, Outlook Stable
Fitch Ratings has assigned Promerica Financial Corporation a Long-
Term Issuer Default Rating of 'BB-', Short-Term Issuer IDR of 'B'
and Viability Rating of 'bb-'. The Rating Outlook is Stable.


IDR and VR

PFC's 'BB-' IDR is driven by its VR, which reflects the group's
consolidated risk profile. The IDR is also heavily influenced by
the group's significant geographic diversification, which balances
the risks associated with the weaker operating environments of its
main subsidiaries, and its comparatively higher risk appetite
relative to peers', underpinned by its organic and inorganic
growth strategy. PFC's main financial profile weaknesses include
its tight capital position and the significant double leverage.
The VR also considers the individual strength of its operations
and the diversification of profits and dividend payments.

Although PFC is domiciled in Panama, Fitch's operating environment
score reflects the group's broad geographic diversification that
includes a large proportion of assets in countries with relatively
higher risk. PFC consolidates the group's operations in nine
locations. As per Fitch's criteria, the key measures used by Fitch
to determine the operating environment are the country's GDP per
capita and the World Bank's Ease of Doing Business ranking.

Capitalization is tight at a consolidated level. PFC's Fitch Core
Capital ratio of 9.4% compares unfavorably to peers as a result of
higher growth through acquisitions. Double leverage at the holding
company is also significant, at 127%. Fitch has measured double
leverage as equity investments in subsidiaries plus bank holding
company intangibles, divided by the holding company equity. For
this type of entity, Fitch also analyses the group's capital
metrics relative to other investment companies per its Non-Bank
Financial Institutions Rating Criteria. The core leverage metric
for investment companies under these criteria is the Gross
Debt/Tangible Equity ratio. As of December 2017, this core metric
was 0.32x.

PFC's consolidated risk profile benefits from the individual
strength of its operations and from the diversification of its
business model. The group has over 10 independent banking
operations in nine different jurisdictions, all under the same
franchise. PFC is the second largest credit card issuer in the
region and the sixth largest financial group in Central America,
the group maintains high growth rates and a diversified loan book,
funded by local deposits.

The holding company's revenues are well diversified but are
sensitive to the performance of its largest operations. In Fitch's
view, the group's profitability may be negatively impacted by the
performance of its Nicaraguan subsidiary, which accounted for 33%
of combined profits and for 24.5% total profits attributable to
the controlling shareholders, as of December 2017. However, most
of the banking operations maintain adequate profitability metrics
that allow for consistent dividend payments to the holding

The consolidated loan book maintains low delinquency levels and a
moderate concentration across all operations. As of December 2017,
delinquency rates continued to increase, reflecting the seasoning
of past loan growth and challenging economic conditions in some
markets. Credit concentration by borrower is moderate. Fitch
expects the upward trend in delinquency rates to persist as a
result of the Nicaraguan crisis.

PFC's loans-to-deposits ratio of 87.3% reflects the operating
subsidiaries' adequate liquidity position and compares well with
peers. The banking operations are mostly deposit funded,
maintaining an adequate diversification by deposit type, though
with moderate concentrations in the largest deposits. In Fitch's
view, the fungibility of liquid resources may be limited in the
event of systemic stress. In a stress scenario, the main source of
liquidity for each subsidiary will be its assets through repos or
its local central bank.


PFC Support Rating and Support Rating Floor reflect Fitch's view
that external support for the bank, though possible, cannot be
relied upon.


The ratings are sensitive to further deterioration of the
operating environments where PFC operates, especially Nicaragua,
as this could potentially impact the overall performance of the
group. PFC's ratings could also be downgraded if its expansion
creates additional pressures on its capitalization and leverage
metrics. Specifically, a sustained deterioration in PFC's Fitch
Core Capital to Risk Weighted Assets ratio below 9% and Gross
Debt/Tangible Equity ratio above 1.0x would be negative for
creditworthiness. By contrast, a relevant improvement in capital
metrics to a level that is consistently above 11% and an
improvement in its operating environment score would be positive
for PFC's ratings.

As Panama is a dollarized country with no lender of last resort, a
change in PFC's SR or SRF is unlikely.

Fitch has assigned the following ratings:

Promerica Financial Corporation:

  -- Long-Term IDR 'BB-', Outlook Stable;

  -- Viability Rating 'bb-';

  -- Short-Term IDR 'B';

  -- Support Rating '5';

  -- Support Rating Floor 'NF'.

P U E R T O    R I C O

4J CUSTOM DESIGN: Seeks to Hire Hatillo Law as Attorney
4J Custom Design Inc. seeks authority from the U.S. Bankruptcy
Court for the District of Puerto Rico to employ Hatillo Law
Office, PSC, as attorney to the Debtor.

4J Custom Design requires Hatillo Law to:

   a. give the Debtor legal advice with respect to its powers and
      duties as debtor in possession in the continued operation
      of its business and management of its property;

   b. prepare on behalf of the Debtor as debtor in possession
      necessary applications, answers, orders, reports and other
      legal papers; and

   c. perform all other legal services for the Debtor as debtor
      in possession which may be necessary.

Hatillo Law will be paid at these hourly rates:

     Attorneys              $200
     Paralegals              $50

Hatillo Law will be paid a retainer in the amount of $4,000.

Hatillo Law will also be reimbursed for reasonable out-of-pocket
expenses incurred.

Jaime Rodriguez Perez, a partner at Hatillo Law Office, PSC,
assured the Court that the firm is a "disinterested person" as the
term is defined in Section 101(14) of the Bankruptcy Code and does
not represent any interest adverse to the Debtor and its estates.

Hatillo Law can be reached at:

     Jaime Rodriguez Perez, Esq.
     Carr. #2 Km. 85.8 Calle Marginal Bo.
     Hatillo, PR 00659
     Tel: (787) 262-4848

                   About 4J Custom Design Inc.

4J Custom Design Inc., filed a Chapter 11 bankruptcy petition
(Bankr. D.P.R. Case No. 18-05704) on Sept. 28, 2018, estimating
under $1 million in assets and liabilities.  Jaime Rodriguez
Perez, Esq., at Hatillo Law Office, PSC, is the Debtor's counsel.

ADLER GROUP: Disclosure Statement Hearing on Dec. 20
The U.S. Bankruptcy Court for the District of Puerto Rico is set
to hold a hearing on Dec. 20, at 9:00 a.m., to consider approval
of the disclosure statement filed in support of the proposed
Chapter 11 plan for Adler Group, Inc.

Objections to the disclosure statement must be filed no less than
14 days prior to the hearing.

                       About Adler Group Inc.

Adler Group Inc. owns the Caguas Military property located at Carr
189 km 3.1 (interior) Rincon Ward, Gurabo Puerto Rico, which is
valued at $3 million.  It holds inventory and equipment worth
$513,870.  For 2015, the Company posted gross revenue of $1.61
million 2015 and gross revenue of $1.91 million for 2014.

Adler Group sought protection under Chapter 11 of the Bankruptcy
Code (Bankr. D.P.R. Case No. 17-02727) on April 20, 2017.  In the
petition signed by Jose Torres Gonzalez, authorized
representative, the Debtor disclosed $3.52 million in assets and
$4.43 million in liabilities.

The case is assigned to Judge Mildred Caban Flores.  The Debtor
hired MRO Attorneys at Law, LLC, as bankruptcy counsel.

AUTO MASTER EXPRESS: Creditor Wants Court to Prohibit Use of Cash
After seeking bankruptcy protection in March 2018, Auto Master
Express, Inc., on April 10, 2018, filed with the U.S. Bankruptcy
Court for the District of Puerto Rico a motion to use cash
collateral, which was opposed by Banco Popular as the $1,000
adequate protection payment provided was too low.

Eventually on June 15, 2018, Banco Popular and Auto Master reached
an agreement allowing the use of cash collateral derived from rent
revenue for the months of June and July, with adequate protection
payment of $2,500 monthly.  This agreement expired on July 31, and
the parties have not reached an agreement for further use of the
cash collateral. The Debtor has not filed additional budgets nor
requested the continued use of the collateral.  Moreover, Banco
Popular has not consented to its continued use.  Thus, Banco
Popular recently filed a motion prohibiting Auto Master Express
from using the revenue, regarded as cash collateral over which
Banco Popular has a secured interest on.

A full-text copy of the Motion is available at:

                   About Auto Master Express

Auto Master Express Inc. sought protection under Chapter 11 of the
Bankruptcy Code (Bankr. D.P.R. Case No. 18-01464) on March 19,
2018.  At the time of the filing, the Debtor estimated assets of
less than $500,000 and liabilities of less than $1 million.  The
Debtor engaged Lcdo. Carlos Alberto Ruiz, CSP, as its legal

J & M SALES: Landlords Cite No Adequate Assurances on Leases
------------------------------------------------------------ reported that DDR Corp., DLC Management Corp.,
Jones Lang LaSalle Americas, National Retail Properties, Newmark
Merrill Companies, and Philips International Holding
(collectively, the "Landlords") filed with the Court an objection
to J & M Sales' failure to file lease related agreements and
provide landlords with adequate assurance as to future performance
under existing leases.

The objection asserts, "The Debtors have not filed any of the
applicable agreements, such as a designation rights agreement, so
the Landlords can ensure that their rights are being protected
under section 365 of the Bankruptcy Code. Unless and until the
Landlords are provided with notice of and a meaningful opportunity
to review the lease designation rights agreement, the sale of
lease designation rights to the Successful Bidders should not be
approved. In connection with both the sale of lease designation
rights and the partial chain or full-chain liquidation proposed by
the Debtors, the Landlords must be provided with assurance that
rent and additional rent that accrues under the Leases will be
paid in a timely manner as required by section 365(d)(3) of the
Bankruptcy Code...  The debtors have failed to provide evidence of
adequate assurance of future performance under the leases...
Through the Sale Motion, the Debtors provided notice of their
intent to sell their assets as a going concern or in a
liquidation.  Lease designation rights were not contemplated and
no form of lease designation rights agreement was attached to that
motion.  Furthermore, no form of lease designation rights
agreement has been filed by the Debtors since the auction
concluded and the Debtors have not advised of any proposed
timeline for those lease designation rights to be exercised.
Therefore, it is impossible for the Landlords to know whether
their rights are protected under Section 365 of the Bankruptcy
Code in connection with issues of cure and adequate assurance of
future performance."

                     About National Stores

National Stores is a 344-store chain in 22 U.S. states and Puerto
Rico.  National Stores currently does business as Fallas, Fallas
Paredes, Fallas Discount Stores, Factory 2-U, Anna's Linen's by
Fallas, and Falas (spelled with single "l" in Puerto Rico).
Fallas, which emplolys 9,800 people, is a discount retailer
offering value-priced merchandise, including apparel, bedding and
household supplies.  The brands of National Stores are located in
retail plazas, specialty centers, and downtown areas to serve the
communities its customers and staff members call home.

National Stores, Inc., and its affiliates sought Chapter 11
protection and Aug. 6, 2018, and announced that Hilco Merchant
Resources, LLC, is conducting going-out-of-business sales for 74
stores.  The lead case is In re J & M Sales Inc. (Bankr. D. Del.
Lead Case No. 18-11801).  J & M Sales estimated assets and debt of
$100 million to $500 million as of the bankruptcy filing.

The Hon. Laurie Selber Silverstein is the case judge.

The Debtors tapped Katten Muchin Rosenman LLP as general
bankruptcy counsel; Pachulski Stang Ziehl & Jones LLP as
bankruptcy co-counsel; Retail Consulting Services, Inc., as real
estate advisor; Imperial Capital, LLC, as investment banker; and
Prime Clerk LLC as the claims and noticing agent.
SierraConstellation Partners, LLC, is providing personnel to serve
as chief restructuring officer and support staff.

T R I N I D A D  &  T O B A G O

TRINIDAD CEMENT: Earnings Plunge 52%
Trinidad Express reports that higher costs and lower demand at
Trinidad Cement Limited (TCL) have chiseled down Mexican cement
maker Cemex's third quarter profits, both companies confirmed in
separate statements.

Claxton Bay-headquartered TCL reported $29 million in after-tax
profit for the nine-month period ending September 30, 2018, which
was 52 per cent less than the company's profits for the same
period in 2017, according to Trinidad Express.

As reported in the Troubled Company Reporter-Latin America on
Oct. 4, 2017, Fitch Ratings has affirmed and simultaneously
withdrawn Trinidad Cement Limited's Long-Term Foreign and Local
Currency Issuer Default Ratings (IDRs) at 'B+'.


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


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.

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