/raid1/www/Hosts/bankrupt/TCRLA

/raid1/www/Hosts/bankrupt/TCRLA_Public/190619.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, June 19, 2019, Vol. 20, No. 122 Headlines A R G E N T I N A RIO NEGRO: Moody's Gives B2/A3 Rating to 2019 Treasury Note Program B R A Z I L JBS SA: Fitch Hikes LongTerm IDRs to BB, Outlook Stable USINAS SIDERURGICAS: S&P Affirms 'B' ICR Despite Margin Volatility D O M I N I C A N R E P U B L I C DOMINICAN REPUBLIC: Blackouts Continue in Santo Domingo DOMINICAN REPUBLIC: Stock Market Needs 'Push' Toward IPOs J A M A I C A JAMAICA: Seeks to Increase Tourist Arrivals From France M E X I C O UNIFIN FINANCIERA: Fitch Affirms 'BB/B' Issuer Default Ratings P U E R T O R I C O CHARLOTTE RUSSE: K&S, Chipman Brown Represent Term Lenders PUERTO RICO: Oversight Board Defends Plan As Way Out Of Bankruptcy SAN JUAN ICE: Sept. 11 Hearing on Amended Plan and Disclosures V E N E Z U E L A VENEZUELA: Immigrants Brave Long Lines to Enter Peru - - - - - ================= A R G E N T I N A ================= RIO NEGRO: Moody's Gives B2/A3 Rating to 2019 Treasury Note Program ------------------------------------------------------------------- Moody's Latin America Agente de Calificacion de Riesgo has assigned a B2 - Global Scale local currency debt rating- and an A3.ar -- National Scale in local currency - to the 2019 Treasury Note Program of the Rio Negro, Province of. The ratings are in line with the province's long term foreign currency issuer ratings. Assignments: Issuer: Rio Negro, Province of Global Local Currency Senior Unsecured Medium-Term Note Program, Assigned B2 Argentina National Scale Local Currency Senior Unsecured Medium-Term Note Program, Assigned A3.ar RATINGS RATIONALE The Treasury Note Program has been authorized by the province's 2019 budget law Nº5.334, whereas Resolutions 2019-256 and 2019-365 set the general issuance conditions of the series within the program and its maximum amount. The treasury notes to be issued under this program could be secured by the Province, possibly affecting any provincial resource, asset and/or cash flows coming from the federal tax-sharing regime. The assigned debt ratings reflect Moody's view that the willingness and capacity of the Rio Negro, Province of to honor these treasury notes is in line with the provincial's long-term credit quality as reflected in the B2/A3.ar issuer ratings in local currency. The maximum issuance amount authorized under the program is ARS2000 million or its equivalent in foreign currency, which represents 3% of the total revenues budgeted for 2019. The proceeds of the issuances will be used by the Province to cover seasonal cash needs. The Province intends to issue Series of Treasury Notes in public tenders or in private placements in the domestic market. Each series of notes could have different issuance terms and conditions. The assigned B2/A3.ar ratings to the Treasury Note Program are based on preliminary documentation received by Moody's as of the rating assignment date. Moody's does not expect changes to the documentation reviewed over this period, nor does it anticipate changes in the main conditions that the Notes will carry. Should issuance conditions and/or final documentation of the program 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. WHAT COULD CHANGE THE RATINGS UPGRADE/DOWNGRADE An upgrade of Government of Argentina's sovereign rating or a systemic improvement, or both, along with lower idiosyncratic risks arising from this province (that is, for instance, a sustained record of operating surpluses), could exert upward pressure on the province's current issuer and debt ratings. A downgrade of Government of Argentina's bond rating or a deterioration in the province's operating and financial results, or both, could exert downward ratings pressure. In addition, if the province records a deterioration in its operating and financial results, leading to higher-than-expected debt levels, its issuer and debt ratings could be downgraded. =========== B R A Z I L =========== JBS SA: Fitch Hikes LongTerm IDRs to BB, Outlook Stable ------------------------------------------------------- Fitch Ratings has upgraded JBS S.A.'s Long-Term Foreign- and Local Currency Issuer Default Ratings and senior unsecured notes issued by JBS Investments GmbH and JBS Investments II GmbH to 'BB' from 'BB-'. The National Scale rating was upgraded to 'AA+ (bra)' from 'A(bra)'. The Rating Outlook is Stable. The upgrade reflects JBS expected deleveraging and strong free cash flow generation and improved financial flexibility due to recent liability management. KEY RATING DRIVERS Solid Business Profile: JBS's business profile is strong due to its size, geographic and protein diversification in pork, poultry and beef. The company is the most geographically diversified company in the protein sector that Fitch rates due to its strong presence in North America, South America, Australia and Canada. This geographic diversity enables the group to mitigate business volatility inherent to the industry. Exports represented 25% of JBS global sales. Asia represented about half of revenues from export sales primarily from sales in China, Japan, and South Korea. The Middle East and Africa collectively represented approximately 12.4% of sales in the year ended Dec. 31, 2018. Lower Leverage Expected: Fitch expects JBS to continue to deleverage due to strong free cashflow generation given the company's strong performance at its U.S. operations (including Canada and Australia). These operations represented about 80% of 2018 adjusted EBITDA of BRL14.9 billion. The strong U.S. operating performance is driven by good cattle supply and strong demand for beef in the domestic market. The U.S. poultry division was pressured in 2018 due to high supply and lower prices in the domestic market. Fitch expects JBS's Brazilian beef division and Seara division to benefit from the following: better consumer demand in the domestic market, the nation's positive cattle cycle and favorable Brazilian real, which makes Brazilian protein producers competitive in export markets. Fitch expects JBS's net debt/EBITDA ratio to trend toward 2.5x by FYE19 from 3.2x as of 1Q19 (or 3.1x in USD). Favorable protein Outlook: JBS's competitive advantages stem from its geographic and protein diversification, large scale operations, access to exports markets from Brazil and the U.S. and long-term relationship with farmers, customers, and distributors. Global beef fundamentals are expected to remain positive in the near future for Brazilian and U.S. producers due to increased demand and better cattle availability. U.S. beef production is forecast to grow by nearly 2% in 2019, according to the USDA. An outbreak of the African swine fever virus in China has severely hurt pork production in that country. The disease will likely result in more protein products, including chicken, directed to China during 2019. Among the significant industry risks are a downturn in the economy of a given export market, the imposition of increased tariffs or sanitary barriers, and strikes or other events that may affect the availability of ports and transportation. Ongoing Investigation: JBS's rating is constrained by weak corporate governance due its shareholder's structure, and uncertainty as several investigations involving JBS and its shareholders continue to move forward. These include administrative procedures by the CVM (Brazilian Securities and Exchange Commission), potential fines from the U.S. Department of Justice. These ongoing legal matters create uncertainty regarding the timing and magnitude of potential fines the company might face. DERIVATION SUMMARY JBS has a strong business profile as the world's largest beef and leather producer and its diversification in chicken, beef, pork, and prepared food. This allows the company to minimize risks of operating in one protein or region, placing the company in a favorable position from a business risk perspective versus Marfrig Global Foods (BB-/Stable) and Minerva SA (BB-/Stable). Minerva is a pure play in the beef industry. With a net debt/ EBITDA ratio at 3.2x as of FYE18, JBS's net leverage is lower than Minerva's (BB-), but in line with Marfirg Global Foods (BB-), assuming the National Beef put option. JBS's leverage remains higher than Tyson Foods Inc. (BBB/Stable) or Smithfield Foods Inc. (BBB/Stable). JBS's capital structure comprises more secured debt than its peers. JBS's ratings reflect ongoing litigation issues related to corruption investigations and uncertainty regarding potential fines, which could damage the company's credit profile and access to capital markets. KEY ASSUMPTIONS Fitch's Key Assumptions Within Its Rating Case for the Issuer Include - High Single digit revenues growth; - Steady EBITDA margin; - Net debt/ EBITDA to trend toward 2.5x in FYE19. RATING SENSITIVITIES Developments That May, Individually or Collectively, Lead to Positive Rating Action -- An upgrade could occur if no significant fines result from the investigations; -- Net debt/EBITDA below 2.5x on a sustained basis; -- Refinancing or repayment of the normalization secured debt. Developments That May, Individually or Collectively, Lead to Negative Rating Action -- Large legal fines that would put pressure on the company's liquidity and deleverage in the near term could trigger a downgrade; -- Net Leverage above 3.8x on a sustained basis could lead to a downgrade. LIQUIDITY Strong Liquidity: JBS's liquidity is strong due to a low level of short-term debt, good access to banks, capital market debt and positive FCF. Cash and cash equivalents were about USD1.9 billion, and short-term debt was USD0.8 billion as of FYE18. In addition, JBS USA had USD1.9 billion fully committed available lines. On May 10, 2019, JBS concluded the payment of BRL2.36 billion (USD600 million) related to the amortization of part of the debt covered by the Normalization agreement entered with certain financial institutions. At the end of May 2019, JBS prepaid an additional USD400 million of debts under the normalization agreement and other debt totaling USD1 billion using approximately USD500 million from the issuance of the senior notes maturing in 2026. FULL LIST OF RATING ACTIONS Fitch has upgraded the following ratings: JBS S.A. -- Long-Term Foreign and Local Currency IDRs to 'BB' from 'BB-'; -- National Scale rating to 'AA+(bra) from 'A(bra)'. JBS Investments GmbH -- Notes due 2023 and 2024 to 'BB' from 'BB-'. JBS Investments II GmbH -- Notes due 2026 to 'BB' from 'BB-'. USINAS SIDERURGICAS: S&P Affirms 'B' ICR Despite Margin Volatility ------------------------------------------------------------------ S&P Global Ratings on June 14, 2019, affirmed its 'B' global scale and 'brA+' national scale issuer credit ratings on Brazilian steelmaker Usinas Siderurgicas de Minas Gerais S.A. (Usiminas). S&P also affirmed its 'brA+' issue-level rating on the company's senior secured debt with a recovery rating of '3', reflecting its expectation of a recovery of 55% (rounded estimate). S&P said, "The positive outlook reflects our expectations of a gradual deleveraging in the coming quarters, although at a slower pace that we previously expected. We believe a gradual recovery in Usiminas' EBITDA margins would result in positive cash flow generation, despite higher investment levels, mainly for paying down debt, while the company maintains an adequate liquidity." Usiminas' stronger operating performance, stemming from its turnaround plan in the previous years, combined with a gradual recovery of the Brazilian steel market, has led to a structural improvement in margins. However, since the end of 2018, the stagnating steel demand in the domestic market, a sales mix more concentrated in lower value-added steel, and higher raw material costs, including the acquisition of third-party slabs, led to margins volatility. S&P said, "We believe Usiminas' margins will recover gradually in the next few quarters through a slight increase in domestic steel demand, a still healthy premium over imported steel, which allows for price adjustments, as well as better sales mix and iron ore prices. This will allow the company to start a new investment cycle for the next three years without pressuring its leverage. We believe these investments, mainly to improve asset efficiency, such as the modernization of a blast furnace at the Ipatinga plant and dry stacking process at the company's mining operations, will help heighten the operating performance's resilience. "In this sense, we expect the company's metrics to improve gradually in the next few years, leading to debt to EBITDA of 2.5x-3.0x, funds from operations (FFO) to debt of 23%-28%, and FOCF generation, which Usiminas will mostly use to amortize debt, given that the dividend payout will remain at the minimum legal level. We look at gross leverage ratios for Usiminas when analyzing leverage because its cash reserves tend to be volatile, but we acknowledge that the company counts with a meaningful cash position that would be used in part to pay down debt. "Nevertheless, we still view Usiminas as very much dependent on the domestic economy, which limits its ability to offset weaker market conditions in comparison with similarly rated peers in the industry and in the same rating category. We believe that this exposes the company to potential volatility in its credit metrics, should market conditions deteriorate, as seen in previous years." =================================== D O M I N I C A N R E P U B L I C =================================== DOMINICAN REPUBLIC: Blackouts Continue in Santo Domingo ------------------------------------------------------- Dominican Today reports that the blackouts continue to hit several sectors of Greater Santo Domingo where customers complain of long hours without electric service, especially at night and early morning. According to the Coordinating Body of the National Interconnected Electrical System (OC-SENI), on June 17, about 14 power plants were off line, 23 partially unavailable and 16 were available, the report relays. Among the unavailable plants were Los Mina 5 y 6, Monte Plata Solar and Estrella del Mar 2 CFO, the report says. The CESPM 3 plant was not injecting energy into the system until after 3:00 p.m, the report discloses. The report adds that at the end of May, Punta Catalina power plant manager Jaime Aristy Escuder had informed that the plant would be out of service only until the first week of June to make some adjustments. However, as of mid-June, the plant has not supplied energy into the grid, the report notes. As reported in the Troubled Company Reporter-Latin America on June 3, 2019, Fitch Ratings has assigned a 'BB-' rating to Dominican Republic's DOP50.523 billion notes (equivalent to USD1 billion ), maturing 2026 and to the USD1.5 billion bonds maturing 2049. DOMINICAN REPUBLIC: Stock Market Needs 'Push' Toward IPOs --------------------------------------------------------- Dominican Today reports that the Dominican Republic's stock market is growing at a brisk pace, but needs a "push" to compete with that of other economies. The statement is by Santiago Camarena, executive vice president of Alpha Inversiones, one of the leading securities traders, according to Dominican Today. Despite recognizing that the country still has "all the products in the world," Mr. Camarena stressed that Alpha is promoting the stock market so that the customer begins to find products and in turn are tailored according to their needs, the report notes. The executive expects that once the regulations of Law 249-17 of the Stock Market are approved, private companies will venture into initial public offerings (IPO), the report relays. Mr. Camarena spoke during a visit on Monday, to El Nuevo Diario editor-in-chief Persio Maldonado, and economics journalist Clara Gonzalez, the report adds. As reported in the Troubled Company Reporter-Latin America on June 3, 2019, Fitch Ratings has assigned a 'BB-' rating to Dominican Republic's DOP50.523 billion notes (equivalent to USD1 billion ), maturing 2026 and to the USD1.5 billion bonds maturing 2049. ============= J A M A I C A ============= JAMAICA: Seeks to Increase Tourist Arrivals From France ------------------------------------------------------- RJR News reports that Jamaica Tourism Minister Ed Bartlett and Director of Tourism Donovan White have set a target of 20,000 French visitors by 2021. This will make France the second largest market in Continental Europe, according to RJR News. Speaking at a special reception for travel agents and tour operators in Paris, Mr. Bartlett disclosed plans for a familiarization tour for 250 French travel agents and tour operators as well as working to launch a direct flight from Paris to Montego Bay by the winter season in 2020, the report adds. 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 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 =========== UNIFIN FINANCIERA: Fitch Affirms 'BB/B' Issuer Default Ratings -------------------------------------------------------------- Fitch Ratings has affirmed Unifin Financiera, S.A.B. de C.V. Long-Term and Short-Term Foreign and Local Currency Issuer Default Ratings at 'BB' and 'B', respectively. Unifin's National Scale ratings were also affirmed at 'A(mex)' and 'F1(mex)'. The long-term Rating Outlooks are Stable. The company's ratings of its global senior debt and perpetual bonds were also affirmed. KEY RATING DRIVERS IDRS, NATIONAL RATINGS AND SENIOR DEBT Unifin's ratings are highly influenced by its national leadership in the independent leasing sector in Mexico (non-related to financial holding company) and its ample expertise in its core market focused on SME typically unattended by the banking sector. The ratings are also significantly influenced by its relatively tight capitalization metrics. Ratings also consider Unifin's good earnings, controlled asset quality, and well-managed liquidity and funding. The adoption of IFRS accounting standards in 1Q19 gives better clarity on Unifin's asset quality, which has led to stronger reserve coverage; however, this put further pressure on the company's already-tight capitalisation and leverage position under Fitch's core metric. As of March 2019 and following the adoption of IFRS, Unifin's leverage ratios (measured as total debt to tangible common equity) exceeded Fitch's sensitivity according to its ratings level, as it reached 8.5x. This ratio was mainly impacted by around 190 bps, after IFRs application by an immediate and sizeable effect on retained earnings, but Fitch expects a leverage recovery in the following 18 to 24 months through internally generated capital, to levels around 7x. The company projections consider leverage gradually improving to nearly 7.1x as of YE 2020, a ratio that Fitch believes is still relatively tight, but consistent with the current rating level. If the company does not show a consistent improvement of leverage metrics toward the 7x threshold, negative rating actions could arise over the near future. The ratings also reflect the company's strategic objectives well-articulated but accompanied by a high risk appetite due to an ample balance sheet growth. Fitch believes Unifin's strong market position drives its sound ability to generate earnings through economic cycles. Despite some pressures on earnings due to higher interest expenses, lower growth than previous years and structural changes under IFRS, Unifin's profitability remains at good levels but lower than historical records. As of March 2019, Unifin's pre-tax income to average assets ratio was 2.7% from historic average levels of 4.0%, still a credit strength to the current rating level. Despite Unifin's high growth pace, its focus on SME lending and a less benign operating environment, asset quality is controlled and has not resulted in a general deterioration or material borrower concentrations. In Fitch's view, Unifin's adherence to its credit policy and its relatively sound collection practices support its adequate asset quality. Under IFRS there is more visibility on non-performing loans (NPLs) and more prudential loan loss allowance approach. As of March 2019, Unifin's NPL ratio stood at 3.6%, levels lower to that showed by its closest peers; while the loan loss allowance coverage of NPLs increased to 57.0%, which continues to be relatively limited in Fitch's opinion. Unifin has a more diversified and unsecured funding structure than local peers. However, the entity is heavily reliant on wholesale financing through local debt issuances via securitizations and international senior bonds (72% of its total interest bearing liabilities, considering 50% of debt from perpetual bonds). Nevertheless, this funding structure has proven effective for Unifin because it helps on properly matching the asset-liability tenor profile. Fitch considers that Unifin's refinancing risk is carefully monitored and managed because of the company's diversified funding structure, well-planned liability maturities and reasonable levels of liquid assets held. Also, the reasonable flexibility provided by the current portfolio securitizations and adequate levels of unencumbered loans help to mitigate refinancing risk. As of March 2019, the unsecured debt to total debt stood at 56%, sound levels than compares better than peers. Unifin's outstanding global bonds are senior and rank equally with all of the company's current and future outstanding senior debt. The rating assigned to these bonds is the same as Unifin's IDR of 'BB'. HYBRID SECURITIES Unifin's hybrid notes are rated two notches below its Long-Term IDR. 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 senior obligations. The hybrid notes qualify for 50% equity as it meets Fitch's criteria with regard to the ability to defer coupon payments, the existence of a coupon step-up of 500 bps in the event of a change of control and its perpetual nature. The terms of the issuance incorporate a feature that 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 seven years prior to such effective maturity date. RATING SENSITIVITIES IDRS, NATIONAL RATINGS AND SENIOR DEBT Unifin's ratings could be downgraded if its leverage metrics do no recover consistently from its current high levels in a period of 18 to 24 months. Specifically, if the company's total debt to tangible common equity ratio does not show a consistent downward trend toward 7x during 2019-2020 period. Upside potential is limited in view of the company's aggressive capital management policies, but it could occur in the medium term if the company is able to material improve its capitalization and leverage metrics, particularly if the company's total debt to tangible common equity ratio is reduced and maintained consistently and materially below 7x, while maintaining its sound other financial fundamentals and a strong competitive position. Senior debt ratings would mirror any changes in Unifin's corporate ratings or could be downgraded below Unifin's IDRs if the level of unencumbered assets substantially deteriorates subordinating the bondholders to other debt. HYBRID SECURITIES Unifin's hybrid notes rating is primarily sensitive to a change in the company's IDRs. Fitch expects that under most circumstances the notes will remain rated two notches below the IDR. Fitch has affirmed Unifin's ratings as follows: -- Long-Term Foreign Currency IDR at 'BB'; Stable Outlook; -- Long-Term Local Currency IDR at 'BB'; Stable Outlook; -- Short-Term Foreign Currency IDR at 'B'; -- Short-Term Local Currency IDR at 'B'; -- National Scale Long-Term rating at 'A(mex)'; Stable Outlook; -- National Scale Short-Term rating at 'F1(mex)'; -- Seven-year USD450 million 7.00% senior unsecured bond at 'BB'; -- Seven-year USD400 million 7.25% senior unsecured bond at 'BB'; -- Eight-year USD300 million 7.375% senior unsecured bond at 'BB'; -- Subordinated Perpetual notes USD250 million 8.875% at 'B+'. ===================== P U E R T O R I C O ===================== CHARLOTTE RUSSE: K&S, Chipman Brown Represent Term Lenders ---------------------------------------------------------- In the Chapter 11 proceedings of Charlotte Russe Holding, Inc., et al., Chipman Brown Cicero & Cole, LLP and King & Spalding LLP filed a verified statement pursuant to Rule 2019 of the Federal Rules of Bankruptcy Procedure to disclose that they represent the Ad Hoc Group of Prepetition Term Loan Lenders. In November of 2018, certain beneficial holders, or investment advisors, sub-advisers or managers of the account of beneficial holders of Term Loans, pursuant to a Credit Agreement, dated as of May 22, 2013, among Charlotte Russe, Inc., a California corporation, Charlotte Russe Holding, Inc., the Subsidiary Guarantors party thereto, the lenders party thereto (the "Prepetition Term Loan Lenders"), and Jefferies Finance LLC, as administrative agent and collateral agent (in such capacities, the "Prepetition Term Loan Agent" and together with the Prepetition Term Loan Lenders, the "Ad Hoc Group of Prepetition Term Loan Lenders"), contacted King & Spalding LLP ("K&S") to represent them in connection with the potential restructuring of the Debtors. The Ad Hoc Group of Prepetition Term Loan Lenders subsequently retained Chipman Brown Cicero & Cole, LLP as local counsel when informed by the Debtors that they would pursue a reorganization in the United States Bankruptcy Court for the District of Delaware. The individual members of the Ad Hoc Group of Prepetition Term Loan Lenders hold claims and interests, or advise, sub-advise or manage accounts that hold claims and interests against the Debtors arising from the Term Loans and common stock in Charlotte Russe Holding, Inc. As of March 6, 2019, the disclosable economic interests held by each member of the Ad Hoc Group of Prepetition Term Loan Lenders are: 1. KKR Asset Management LLC 9 West 57th Street, Suite 4200 New York, NY 10019 Attn: Jeremiah Lane * $22,647,892.68 principal amount of Term Loans. * 54,366 shares of common stock 2. Marathon Asset Management LP One Bryant Park, 38th Floor New York, NY 10036 Attn: Neha Thumar * $8,354,820 principal amount of Term Loans * 20,056 shares of common stock 3. Mainstreet Capital Corporation 1300 Post Oak Blvd., 8th Floor Houston, TX 77056 Attn: Nick Meserve * $14,169,607 principal amount of Term Loans * 34,014 shares of common stock 4. Octagon Credit Investors, LLC 250 Park Avenue, 15th Floor New York, NY 10177 Attn: Jeremey Stern * $14,021,417 principal amount of Term Loans * 33,660 shares of common stock 5. Southpaw Credit Opportunity Master Fund LP 2 Greenwich Office Park, 1st floor West Greenwich, CT 06831 Attn: Jeremy Skrezyna * $3,186,411 principal amount of Term Loans * 7,649 shares of common stock 6. MJX Asset Management, LLC 12 E 49th Street, 38th Floor New York, NY 10017 Attn: Fred Taylor * $4,659,863 principal amount of Term Loans * 11,186 shares of common stock 7. Apex Credit Partners LLC 520 Madison Avenue 10th Floor New York, NY 10022 Attn: Sarthak Shah * $4,953,776 principal amount of Term Loans * 11,922 shares of common stock Attorneys for Jefferies Finance LLC in its capacity as Term Loan Agent and an Ad Hoc Group of Prepetition Term Loan Lenders: William E. Chipman, Jr., Esq. Mark D. Olivere, Esq. CHIPMAN BROWN CICERO & COLE, LLP Hercules Plaza 1313 North Market Street, Suite 5400 Wilmington, DE 19801 Telephone: (302) 295-0193 Facsimile: (302) 295-0199 E-mail: chipman@chipmanbrown.com olivere@chipmanbrown.com - and - Michael Rupe, Esq. Christopher G. Boies, Esq. Michael R. Handler, Esq. KING & SPALDING LLP 1185 Avenue of the Americas, 35th Floor New York, NY 10036 Telephone: (212) 556-2100 E-mail: mrupe@kslaw.com ajowers@kslaw.com cboies@kslaw.com mhandler@kslaw.com and W. Austin Jowers KING & SPALDING LLP 1180 Peachtree Street Atlanta, GA 30309 Telephone: (404) 572-4600 E-mail: ajowers@kslaw.com About Charlotte Russe Holding Charlotte Russe Holding, Inc., is a specialty fashion retailer of young women's apparel and accessories comprised of seven entities. The company and its affiliates are headquartered in San Diego, California and have one distribution center located in Ontario, California. In addition, the companies lease office space in Los Angeles, California and San Francisco, California, where they primarily conduct merchandising, marketing, e-commerce and technology functions. The companies sell their merchandise to customers in the contiguous 48 states, Hawaii, and Puerto Rico through their online store and 512 Charlotte Russe brick-and-mortar stores located in various regional malls, outlet centers, and lifestyle centers. The bulk of the companies' apparel and accessory products are sold under the Charlotte Russe brand with ancillary brands for denim and perfume (Refuge), young women's plus-size apparel (Charlotte Russe Plus), and cosmetics (Charlotte by Charlotte Russe). Charlotte Russe Holding and its affiliates sought protection under Chapter 11 of the Bankruptcy Code (Bankr. D. Del. Lead Case No. 19-10210) on Feb. 3, 2019. At the time of the filing, Charlotte Russe Holding estimated assets of $100 million to $500 million and liabilities of $100 million to $500 million. The cases are assigned to Judge Laurie Selber Silverstein. The Debtors tapped Bayard, P.A. and Cooley LLP as their bankruptcy counsel; Guggenheim Securities, LLC as their investment banker; A&G Realty Partners, LLC as lease disposition consultant and business broker; Gordon Brothers Retail Partners LLC, Hilco Merchant Resources LLC and Malfitano Advisors, LLC as liquidation consultant; and Donlin, Recano & Company, Inc., as claims and noticing agent. PUERTO RICO: Oversight Board Defends Plan As Way Out Of Bankruptcy ------------------------------------------------------------------ Karen Pierog at Reuters reports that Puerto Rico's federally created financial oversight board defended a new agreement with creditors, saying it will result in an affordable and sustainable debt level and allow the U.S. commonwealth to exit bankruptcy next year. The board has come under fire by Puerto Rico's government and some creditors over pension cuts or its disparate treatment of bondholders, according to Reuters. The Financial Oversight and Management Board announced a deal that establishes terms for restructuring more than $18 billion of Puerto Rico's general obligation (GO) and Public Buildings Authority (PBA) debt, the report relays. A group of investment firms that signed on to the agreement, which calls for recoveries of about 64% for GO bonds and 73% for PBA debt, own about $3 billion of what the board calls "vintage" bonds that are not being challenged in court, the report says. The deal, along with an agreement with a retirees committee over pensions that the Puerto Rico government opposes, will be part of a core government debt-adjustment plan the oversight board said it expects to file in U.S. District Court within 30 days. Puerto Rico entered a bankruptcy-like process in 2017 to restructure about $120 billion of debt and pension obligations, the report notes. "We've reached a significant milestone for Puerto Rico. The end of bankruptcy's in sight," Natalie Jaresko, the board's executive director, told reporters, the report relates. Reuters discloses that she said the deal would reduce $35 billion of liabilities to $12 billion and lower the island's maximum annual payments on debt, including already restructured sales tax-backed bonds, by 64 percent to $1.5 billion. Other creditors are pushing back on the agreement. Assured Guaranty, which insures some GO bonds, said that only about 10 percent of bondholders back the deal, which it contended involves an "unprecedented and meritless attempt to invalidate certain lawfully issued general obligation bonds, acceptance of erroneous and misleading financial projections in the oversight board's legally flawed fiscal plan, and artificial separation of similarly situated creditors into classes that would receive unequal treatment," Reuters notes. The board has taken steps in court to void certain bonds issued by the government and its agencies and also filed claims to recoup more than $1 billion in debt service payments from investors, the report says. Jaresko said those bondholders can avoid litigation and accept recoveries of 45% for GO bonds issued in 2012 and 35% for 2014 bonds, noting that if the bonds are ultimately invalidated by the court they would receive nothing, the report relays. If the court rules the bonds did not violate a debt limit in Puerto Rico's constitution, recoveries would match those in the agreement, she added. Puerto Rico's government opposes the deal mainly because it includes a reduction in pension payments to certain retirees, the report notes. The government's fiscal agency warned that without legislative and executive support and action, the upcoming debt adjustment plan could not be implemented, the report says. Jaresko said the upcoming debt-adjustment plan is aimed at sustaining pensions, which are currently funded on a pay-go basis, and that it was unclear if the plan requires legislation, the report adds. About Puerto Rico Puerto Rico is a self-governing commonwealth in association with the United States that's facing a massive bond debt of $70 billion, a 68% debt-to-GDP ratio and negative economic growth in nine of the last 10 years. The Commonwealth of Puerto Rico has sought bankruptcy protection, aiming to restructure its massive $74 billion debt-load and $49 billion in pension obligations. The debt restructuring petition was filed by Puerto Rico's financial oversight board in U.S. District Court in Puerto Rico (Case No. 17-01578) on May 3, 2017, and was made under Title III of 2016's U.S. Congressional rescue law known as the Puerto Rico Oversight, Management, and Economic Stability Act ('PROMESA'). The Financial Oversight and Management Board later commenced Title III cases for the Puerto Rico Sales Tax Financing Corporation (COFINA) on May 5, 2017, and the Employees Retirement System (ERS) and the Puerto Rico Highways and Transportation Authority (HTA) on May 21, 2017. On July 2, 2017, a Title III case was commenced for the Puerto Rico Electric Power Authority ("PREPA"). U.S. Chief Justice John Roberts has appointed U.S. District Judge Laura Taylor Swain to oversee the Title III cases. The Honorable Judith Dein, a United States Magistrate Judge for the District of Massachusetts, has been designated to preside over matters that may be referred to her by Judge Swain, including discovery disputes, and management of other pretrial proceedings. Joint administration of the Title III cases, under Lead Case No. 17-3283, was granted on June 29, 2017. The Oversight Board has hired as advisors, Proskauer Rose LLP and O'Neill & Borges LLC as legal counsel, McKinsey & Co. as strategic consultant, Citigroup Global Markets, as municipal investment banker, and Ernst & Young, as financial advisor. Martin J. Bienenstock, Esq., Scott K. Rutsky, Esq., and Philip M. Abelson, Esq., of Proskauer Rose; and Hermann D. Bauer, Esq., at O'Neill & Borges are on-board as attorneys. McKinsey & Co. is the Board's strategic consultant, Ernst & Young is the Board's financial advisor, and Citigroup Global Markets Inc. is the Board's municipal investment banker. Prime Clerk LLC is the claims and noticing agent. Prime Clerk maintains a case web site at https://cases.primeclerk.com/puertorico Epiq Bankruptcy Solutions LLC is the service agent for ERS, HTA, and PREPA. O'Melveny & Myers LLP is counsel to the Commonwealth's Puerto Rico Fiscal Agency and Financial Advisory Authority (AAFAF), the agency responsible for negotiations with bondholders. The Oversight Board named Professor Nancy B. Rapoport as fee examiner and to chair a committee to review professionals' fees. Bondholders' Attorneys Kramer Levin Naftalis & Frankel LLP and Toro, Colon, Mullet, Rivera & Sifre, P.S.C. and serve as counsel to the Mutual Fund Group, comprised of mutual funds managed by Oppenheimer Funds, Inc., and the First Puerto Rico Family of Funds, which collectively hold over $4.4 billion of GO Bonds, COFINA Bonds, and other bonds issued by Puerto Rico and other instrumentalities. White & Case LLP and Lopez Sanchez & Pirillo LLC represent the UBS Family of Funds and the Puerto Rico Family of Funds, which hold $613.3 million in COFINA bonds. Paul, Weiss, Rifkind, Wharton & Garrison LLP, Robbins, Russell, Englert, Orseck, Untereiner & Sauber LLP, and Jimenez, Graffam & Lausell are co-counsel to the ad hoc group of General Obligation Bondholders, comprised of Aurelius Capital Management, LP, Autonomy Capital (Jersey) LP, FCO Advisors LP, and Monarch Alternative Capital LP. Quinn Emanuel Urquhart & Sullivan, LLP and Reichard & Escalera are co-counsel to the ad hoc coalition of holders of senior bonds issued by COFINA, comprised of at least 30 institutional holders, including Canyon Capital Advisors LLC and Varde Investment Partners, L.P. Correa Acevedo & Abesada Law Offices, P.S.C., is counsel to Canyon Capital Advisors, LLC, River Canyon Fund Management, LLC, Davidson Kempner Capital Management LP, OZ Management, LP, and OZ Management II LP (the QTCB Noteholder Group). Committees The U.S. Trustee formed an official committee of retirees and an official committee of unsecured creditors of the Commonwealth. The Retiree Committee tapped Jenner & Block LLP and Bennazar, Garcia & Milian, C.S.P., as its attorneys. The Creditors Committee tapped Paul Hastings LLP and O'Neill & Gilmore LLC as counsel. SAN JUAN ICE: Sept. 11 Hearing on Amended Plan and Disclosures -------------------------------------------------------------- Bankruptcy Judge Mildred Caban Flores conditionally approved San Juan Ice Inc.'s amended disclosure statement in support of its amended plan. Acceptances or rejections of the amended plan and any objection to the final approval of the amended disclosure statement and/or confirmation of the amended plan must be filed 14 days prior to the confirmation hearing. A hearing for the consideration of the final approval of the amended disclosure statement and the confirmation of the amended plan will be held on Sept. 11, 2019, at 9:00 AM, at the U.S. Bankruptcy Court, Jose V. Toledo U.S. Post Office and Courthouse Building, 300 Recinto Sur Street, Courtroom 3, Third Floor, San Juan, Puerto Rico. About San Juan Ice, Inc. San Juan Ice Inc., based in San Juan, PR, filed a Chapter 11 petition (Bankr. D.P.R. Case No. 18-01784) on April 3, 2018. In the petition signed by Ramiro Rodriguez Pena, president, the Debtor disclosed $580,495 in assets and $1.17 million in liabilities. The Hon. Mildred Caban Flores presides over the case. Robert Millan, Esq., at Millan Law Offices, serves as bankruptcy counsel. ================= V E N E Z U E L A ================= VENEZUELA: Immigrants Brave Long Lines to Enter Peru ---------------------------------------------------- EFE News reports that long lines of Venezuelan immigrants formed at the border crossing station between Ecuador and Colombia waiting to travel onwards to Peru before that country, starting on the weekend, demands a visa to enter, despite the difficulties that they are having on the Colombian side. Ecuadorian and Colombian authorities said that the flow of Venezuelan citizens has increased in recent hours due primarily to two things: the fact that Venezuelan President Nicolas Maduro decided to open the border with Colombia and the entry into force as of midnight on June 8 of Peru's demand that all foreigners entering the country must have visas, according to EFE News. As reported in the Troubled Company Reporter-Latin America, S&P Global Ratings in May 2018 removed its long- and short-term local currency sovereign credit ratings on Venezuela from CreditWatch with negative implications and affirmed them at 'CCC-/C'. The outlook on the long-term local currency rating is negative. At the same time, S&P affirmed its 'SD/D' long- and short-term foreign currency sovereign credit ratings on Venezuela. S&P's transfer and convertibility assessment remains at 'CC'. ********* 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 2019. 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 * * *