/raid1/www/Hosts/bankrupt/TCRLA

/raid1/www/Hosts/bankrupt/TCRLA_Public/230517.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, May 17, 2023, Vol. 24, No. 99 Headlines A R G E N T I N A ARGENTINA: $1 Billion Pulled From Bank Accounts in April Rush ARGENTINA: Seeks to Tame Inflation, Peso With Biggest Rate Hike B R A Z I L BRAZIL: Agribusiness Faces Protectionism From The EU BRAZIL: Brazilian Coffee Exports Fell 10.3% in April C H I L E CHILE: Private Health Insurers Owe US$1.4 Billion in Overcharges D O M I N I C A N R E P U B L I C DOMINICAN REPUBLIC: Alcantara Defends Study on Lower Food Basket E C U A D O R [*] ECUADOR: Launches Energy Transition in Galapagos on IDB Support M E X I C O BANCO VE POR MAS: Fitch Affirms 'BB-' IDR, Outlook Stable T R I N I D A D A N D T O B A G O TRINIDAD CEMENT: 2022 Profits Drop by 69.64% - - - - - ================= A R G E N T I N A ================= ARGENTINA: $1 Billion Pulled From Bank Accounts in April Rush ------------------------------------------------------------- globalinsolvency.com, citing Bloomberg News, reports that Argentines withdrew over $1 billion of US dollar deposits from the banking system from late March to the end of April as speculation spread about a potential currency devaluation in the official exchange rate. Dollar deposits dropped from nearly $16.4 billion on March 20 to just below $15.3 billion by the end of April, a 6.7% decline, according to central bank data released, according to globalinsolvency.com. In Argentina, checking accounts are denominated in pesos but savings accounts can be denominated in US dollars, a reality after decades of currency crises and runaway inflation, the report discloses. Annual inflation charging over 100% and dwindling dollar reserves at Argentina's central bank renewed a peso selloff in April in parallel currency markets, the report says. While the official exchange rate is controlled by the government, the peso's free floating parallel rates lost about 13% against the greenback last month. It's down 30% so far this year, by far the biggest decline in main emerging markets, the report adds. About Argentina Argentina is a country located mostly in the southern half of South America. Its capital is Buenos Aires. Alberto Angel Fernandez is the current president of Argentina after winning the October 2019 general election. He succeeded Mauricio Macri in the position. Argentina has the third largest economy in Latin America. The country's economy is an upper middle-income economy for fiscal year 2019, according to the World Bank. Historically, however, its economic performance has been very uneven, with high economic growth alternating with severe recessions, income maldistribution and in the recent decades, increasing poverty. Last March 25, 2022, Argentina finalized agreement with the IMF for a new USD44 billion Extended Funding Facility (EFF) intended to fund USD40 billion in looming repayments of the defunct Stand-By Arrangement (SBA), with an extra USD4 billion in up-front net financing. This has averted the risk of a default to the IMF and is facilitating a parallel rescheduling of Paris Club debt. S&P Global Ratings, on March 29, 2023, lowered its long-term foreign currency sovereign credit rating on Argentina to 'CCC-' from 'CCC+'. S&P also affirmed its 'C' short-term foreign currency sovereign credit rating and its 'CCC-/C' local currency ratings on Argentina. The outlook on the long-term ratings is negative. S&P also lowered the transfer and convertibility assessment to 'CCC-' from 'CCC+'. The negative outlook on the long-term ratings reflects risks surrounding pronounced economic imbalances and policy uncertainties before and after the 2023 national elections. Divisions across the political spectrum constrain the sovereign's ability to implement timely changes in economic policy. Global capital markets are closed to Argentina. In the local market, swaps are being deployed to manage large maturities before placing debt through traditional auctions. The central bank continues to play a key role as a backstop for local debt management in the secondary market. The ongoing severe drought has exacerbated pressures in the already disrupted foreign exchange (FX) market. Fitch Ratings, on the other hand, downgraded Argentina's Long-Term Foreign Currency Issuer Default Rating (IDR) to 'C' from 'CCC-', and has affirmed the Long-Term Local Currency IDR at 'CCC-' on March 24, 2023. Fitch's downgrade of Argentina's rating to 'C' from 'CCC-' follows an executive decree that forces domestic public-sector entities into operations involving their holdings of sovereign debt securities, which would involve unilateral exchanges and forced currency conversion that constitute default events under Fitch's criteria. The 'C' rating reflects Fitch's view that default is thus imminent. Fitch said the rating would be downgraded to 'Restricted Default' (RD) upon execution of the exchanges. Moody's Investors Service, in September 2022, affirmed Argentina's Ca foreign-currency and local-currency long-term issuer and senior unsecured ratings. The outlook remains stable. The decision to affirm the Ca ratings balances Argentina's limited market access, weak governance, and history of recurrent debt restructurings with recent efforts to marshal fiscal and monetary measures to start addressing underlying macroeconomic imbalances in the context of the IMF program that was approved in 2022, according to Moody's. DBRS, Inc. confirmed Argentina's Long-Term Foreign Currency Issuer Rating at CCC and downgraded its Long-Term Local Currency Issuer Rating to CCC from CCC (high) on March 3, 2023. ARGENTINA: Seeks to Tame Inflation, Peso With Biggest Rate Hike --------------------------------------------------------------- globalinsolvency.com, citing Reuters, reports that Argentina's central bank hiked its benchmark interest rate a huge 10 percentage points to 91% as it tries to tame high inflation and steady the peso currency, which has tumbled in black market trading. The hike, the biggest since a market meltdown in August 2019, comes after the central bank (BCRA) had already lifted the rate by 300 basis points to 81% in an effort to control inflation running at 104% annually, according to globalinsolvency.com. The central bank confirmed the hike in a statement after Reuters earlier reported the move, citing bank sources, the report notes. News of the sharp hike lifted the peso currency in the black market, which strengthened 1.5% to 462/467 per dollar, although it was still over 100% off the official exchange rate of 222 per dollar, the report says. A higher interest rate offers more incentives to savers to keep their funds in pesos, strengthening the local currency, but weighs on borrowing and economic growth, the report notes. In a statement the bank said it had raised the benchmark rate to shift toward "real returns on investments in local currency" and to promote savings in pesos, the report says. The 91% rate would apply to fixed-term 30-day deposits of up to 30 million pesos, the report adds. About Argentina Argentina is a country located mostly in the southern half of South America. Its capital is Buenos Aires. Alberto Angel Fernandez is the current president of Argentina after winning the October 2019 general election. He succeeded Mauricio Macri in the position. Argentina has the third largest economy in Latin America. The country's economy is an upper middle-income economy for fiscal year 2019, according to the World Bank. Historically, however, its economic performance has been very uneven, with high economic growth alternating with severe recessions, income maldistribution and in the recent decades, increasing poverty. Last March 25, 2022, Argentina finalized agreement with the IMF for a new USD44 billion Extended Funding Facility (EFF) intended to fund USD40 billion in looming repayments of the defunct Stand-By Arrangement (SBA), with an extra USD4 billion in up-front net financing. This has averted the risk of a default to the IMF and is facilitating a parallel rescheduling of Paris Club debt. S&P Global Ratings, on March 29, 2023, lowered its long-term foreign currency sovereign credit rating on Argentina to 'CCC-' from 'CCC+'. S&P also affirmed its 'C' short-term foreign currency sovereign credit rating and its 'CCC-/C' local currency ratings on Argentina. The outlook on the long-term ratings is negative. S&P also lowered the transfer and convertibility assessment to 'CCC-' from 'CCC+'. The negative outlook on the long-term ratings reflects risks surrounding pronounced economic imbalances and policy uncertainties before and after the 2023 national elections. Divisions across the political spectrum constrain the sovereign's ability to implement timely changes in economic policy. Global capital markets are closed to Argentina. In the local market, swaps are being deployed to manage large maturities before placing debt through traditional auctions. The central bank continues to play a key role as a backstop for local debt management in the secondary market. The ongoing severe drought has exacerbated pressures in the already disrupted foreign exchange (FX) market. Fitch Ratings, on the other hand, downgraded Argentina's Long-Term Foreign Currency Issuer Default Rating (IDR) to 'C' from 'CCC-', and has affirmed the Long-Term Local Currency IDR at 'CCC-' on March 24, 2023. Fitch's downgrade of Argentina's rating to 'C' from 'CCC-' follows an executive decree that forces domestic public-sector entities into operations involving their holdings of sovereign debt securities, which would involve unilateral exchanges and forced currency conversion that constitute default events under Fitch's criteria. The 'C' rating reflects Fitch's view that default is thus imminent. Fitch said the rating would be downgraded to 'Restricted Default' (RD) upon execution of the exchanges. Moody's Investors Service, in September 2022, affirmed Argentina's Ca foreign-currency and local-currency long-term issuer and senior unsecured ratings. The outlook remains stable. The decision to affirm the Ca ratings balances Argentina's limited market access, weak governance, and history of recurrent debt restructurings with recent efforts to marshal fiscal and monetary measures to start addressing underlying macroeconomic imbalances in the context of the IMF program that was approved in 2022, according to Moody's. DBRS, Inc. confirmed Argentina's Long-Term Foreign Currency Issuer Rating at CCC and downgraded its Long-Term Local Currency Issuer Rating to CCC from CCC (high) on March 3, 2023. =========== B R A Z I L =========== BRAZIL: Agribusiness Faces Protectionism From The EU ---------------------------------------------------- Marcos Tosi at Rio Times Online reports that leading Brazilian agribusiness products, such as meat, orange juice and coffee, face the most protectionism and export barriers in the international market. And a new wave of restrictions may be on the way after the European Union approved the controversial anti-deforestation law, which intends to impose unilateral criteria to say how other countries should protect their biomes, according to Rio Times Online. About Brazil Brazil is the fifth largest country in the world and third largest in the Americas. Luiz Inacio Lula da Silva won the 2022 Brazilian general election. He was sworn in on January 1, 2023, as the 39th president of Brazil, succeeding Jair Bolsonaro. As recently reported in the Troubled Company Reporter-Latin America, Fitch Ratings, in December 2022, affirmed Brazil's Long-Term Foreign Currency Issuer Default Rating (IDR) at 'BB-' with a Stable Outlook. The ratings are constrained by high government indebtedness, a rigid fiscal structure, weak economic growth potential, and a record of governability challenges that have hampered efforts to address these fiscal and economic issues and clouded policy predictability. The Stable Outlook reflects Fitch's expectation that growth will slow in the coming year and that recent fiscal improvement will erode under a new government, but within a margin consistent with the current rating, and from a better starting point than previously expected. Uncertainty is elevated regarding the plans of the incoming government and the extent to which these could ease or aggravate fiscal and economic challenges. However, Fitch does not expect policies that jeopardize broad economic stability. Standard & Poor's affirmed its 'BB-/B' long- and short-term foreign and local currency sovereign credit ratings on Brazil, and the outlook remains stable (June 2022). The stable outlook reflects S&P's base-case assumption that Brazil will maintain its fiscal anchors over the next two years despite an increasing interest burden, preventing significant fiscal slippage and limiting the rise in its already high debt burden. Moody's credit rating for Brazil was last set at Ba2 in 2018 with stable outlook. Moody's affirmed the Ba2 issuer ratings and senior unsecured bond ratings in April 2022. DBRS's credit rating for Brazil is BB (low) with stable outlook (March 2018). BRAZIL: Brazilian Coffee Exports Fell 10.3% in April ---------------------------------------------------- Richard Mann at Rio Times Online reports that coffee exports from Brazil, the world's leading producer, and exporter of the bean, registered a 10.3% drop in April compared to the same month last year, according to official data released by the Coffee Exporters Council (Cecafé). In April 2023, about 2,722,180 bags of 60 kilograms were exported, against 3,034,482 in the same month last year, according to Rio Times Online. Export sales fell 16.9% in April, in the year-on-year comparison, according to statistics released by Cecafé in the city of Sao Paulo, the report notes. About Brazil Brazil is the fifth largest country in the world and third largest in the Americas. Luiz Inacio Lula da Silva won the 2022 Brazilian general election. He was sworn in on January 1, 2023, as the 39th president of Brazil, succeeding Jair Bolsonaro. As recently reported in the Troubled Company Reporter-Latin America, Fitch Ratings, in December 2022, affirmed Brazil's Long-Term Foreign Currency Issuer Default Rating (IDR) at 'BB-' with a Stable Outlook. The ratings are constrained by high government indebtedness, a rigid fiscal structure, weak economic growth potential, and a record of governability challenges that have hampered efforts to address these fiscal and economic issues and clouded policy predictability. The Stable Outlook reflects Fitch's expectation that growth will slow in the coming year and that recent fiscal improvement will erode under a new government, but within a margin consistent with the current rating, and from a better starting point than previously expected. Uncertainty is elevated regarding the plans of the incoming government and the extent to which these could ease or aggravate fiscal and economic challenges. However, Fitch does not expect policies that jeopardize broad economic stability. Standard & Poor's affirmed its 'BB-/B' long- and short-term foreign and local currency sovereign credit ratings on Brazil, and the outlook remains stable (June 2022). The stable outlook reflects S&P's base-case assumption that Brazil will maintain its fiscal anchors over the next two years despite an increasing interest burden, preventing significant fiscal slippage and limiting the rise in its already high debt burden. Moody's credit rating for Brazil was last set at Ba2 in 2018 with stable outlook. Moody's affirmed the Ba2 issuer ratings and senior unsecured bond ratings in April 2022. DBRS's credit rating for Brazil is BB (low) with stable outlook (March 2018). ========= C H I L E ========= CHILE: Private Health Insurers Owe US$1.4 Billion in Overcharges ---------------------------------------------------------------- Matthew Malinowski at Bloomberg News reports that Chile's government confirmed that private health insurance companies will have to pay about US$1.4 billion to abide by a 2022 Supreme Court ruling, confirming the worst-case scenario for an industry near collapse. The court order affects some 725,000 contracts between beneficiaries and the private insurers, known as Isapres, Victor Torres, the head of Chile's health regulator, told lawmakers, according to Bloomberg News. The figures had previously been given as estimates, Bloomberg News notes. The Isapres serve roughly 16 percent of Chile's 19 million population and have lured investments from international heavyweights including UnitedHealth Group Inc. and British United Provident Association Ltd, Bloomberg News relays. The crisis affecting the industry represents a headache for President Gabriel Boric's administration, as the nation's public health care system is already overwhelmed, Bloomberg News notes. The 2022 Supreme Court ruling found that the ways that firms had set premiums based on gender and age were unconstitutional, Bloomberg News says. Furthermore, it said insurers couldn't charge at all for covering children younger than 2, Bloomberg News discloses. The order stipulated that Isapres had to reimburse users for overcharges starting in 2020, Bloomberg News notes. Regulators had until the end of this month to design a system for the companies to pay back the money, though they have requested an extension, Bloomberg News says. Chile's government presented a fast-track bill designed to chart a way out of the situation while also strengthening regulator oversight and public health, Bloomberg News relays. The administration has said it won't eliminate private heath care, Bloomberg News notes. The Association of Isapres wrote in a statement that the government's proposal has no feasibility and hurts Chileans' access to health care, Bloomberg News discloses. Previously, it had said the paybacks would wipe out the entire industry's net income from the past 33 years, Bloomberg News adds. =================================== D O M I N I C A N R E P U B L I C =================================== DOMINICAN REPUBLIC: Alcantara Defends Study on Lower Food Basket ---------------------------------------------------------------- Dominican Today reports that Eddy Alcantara, the director of the National Institute for the Protection of Consumer Rights (Pro Consumidor), has once again defended the study which placed the Dominican Republic with the lowest basic food basket in Central America and the Caribbean. He explained that the study was conducted by the Market Analysis Unit of the General Directorate of Consumer Protection of Honduras, and not by the Dominican Republic itself, according to Dominican Today. According to the study, with 66.34 dollars, Dominicans can buy the same basic food basket that would cost 103.31 dollars in New York, and 117.64 dollars in Boston. Alcantara emphasized that this was not something made up by Pro Consumidor, but rather was based on the findings of an international organization, the report notes. Alcantara also noted that while inflation has hit the Dominican Republic, the country's good management of economic policy has minimized its impact, the report relays. Overall, the director defended the study's results and emphasized that they reflect the reality faced by consumers in the country, the report adds. About Dominican Republic The Dominican Republic is a Caribbean nation that shares the island of Hispaniola with Haiti to the west. Capital city Santo Domingo has Spanish landmarks like the Gothic Catedral Primada de America dating back 5 centuries in its Zona Colonial district. Luis Rodolfo Abinader Corona is the current president of the nation. TCRLA reported in April 2019 that the Dominican To related that Juan Del Rosario of the UASD Economic Faculty cited a current economic slowdown for the Dominican Republic and cautioned that if the trend continues, growth would reach only 4% by 2023. Mr. Del Rosario said that if that happens, "we'll face difficulties in meeting international commitments." An ongoing concern in the Dominican Republic is the inability of participants in the electricity sector to establish financial viability for the system. Fitch Ratings, in December 2021, revised the Outlook on Dominican Republic's Long-Term Foreign-Currency Issuer Default Rating (IDR) to Stable from Negative and affirmed the IDRs at 'BB-'.The revision of the Outlook to Stable reflects the narrowing of Dominican Republic's government deficit and financing needs since Fitch's last review resulting in the stabilization of the government debt/GDP ratio, as well as the investment-driven economic momentum, reflected in the faster-than-expected economic recovery in 2021 that Fitch expects to carry into above-potential GDP growth during 2022 and 2023. Standard & Poor's, also in December 2021, revised its outlook on the Dominican Republic to stable from negative.S&P also affirmed its 'BB-' long-term foreign and local currency sovereign credit ratings and its 'B' short-term sovereign credit ratings. The stable outlook reflects S&P's expectation of continued favorable GDP growth and policy continuity over the next 12 to 18 months that will likely stabilize the government's debt burden, despite lack of progress with broader tax reforms, S&P said.A rapid economic recovery from the downturn because of the pandemic should mitigate external and fiscal risks. Moody's affirmed the Dominican Republic's long-term issuer and senior unsecured ratings at Ba3 and maintained the stable outlook in March 2021. ============= E C U A D O R ============= [*] ECUADOR: Launches Energy Transition in Galapagos on IDB Support ------------------------------------------------------------------- The Government of Ecuador launched a plan backed by the Inter-American Development Bank (IDB) to reduce greenhouse gas emissions in the Galapagos Islands. The energy transition plan, called Energy Evolution, will also help Ecuador lower the fiscal burden of its liquid fuel and electricity subsidies by drastically cutting fossil-fuels use and building out renewable energy capacity in the archipelago. Under its plan for the Galapagos Islands, Ecuador will reconfigure its electricity generation mix, optimize energy consumption among end users, overhaul its electricity infrastructure, and transform the Galapagos into "smart islands" through automation and digitalization. The plan will also use carbon markets to finance programs based on communities, ecosystems and nature; promote female participation in the electricity sector; and empower beneficiaries to lead the transition process. The energy transition is essential to preserving the environment and achieving sustainability in the Galapagos Islands, which are recognized as a World Natural Heritage Site and biosphere reserve. Reducing greenhouse gas emissions protects biodiversity, enhances energy autonomy and creates new economic opportunities for the archipelago's population. Through the projects in this plan, Ecuador can potentially eliminate 130,411 tons of CO2 emissions from 2025 to 2030, opening the door to carbon-market financing based on certified emission reductions. The target is to achieve carbon neutrality by 2050, which will require new technologies; new energy sources, such as green hydrogen, biomass and geothermal; and other measures. "The IDB is proud to provide technical and financial backing for this energy transition plan. It represents another step by Ecuador and the region towards decarbonization and sustainable energy sources, as well as a commitment to the environment and sustainability of the Galapagos, a natural heritage site," said Ariel Yépez-García, IDB Infrastructure and Energy Manager. The IDB has supported the government's efforts to achieve a transition to low-carbon energy driven by both the public and private sectors. In the Galapagos Islands, the IDB Group has mobilized technical and financial resources to sustainably implement this historic plan for the archipelago, with the goal of generating 85% of the islands' power from renewable energy sources and storage by 2030 and 100% by 2040. =========== M E X I C O =========== BANCO VE POR MAS: Fitch Affirms 'BB-' IDR, Outlook Stable --------------------------------------------------------- Fitch Ratings has affirmed Banco Ve por Mas, S.A. Institucion de Banca Multiple, Grupo Financiero Ve por Mas's (BBX+) Viability Rating (VR) at 'bb-' and Long- and Short-Term Foreign and Local Currency Issuer Default Ratings (IDRs) at 'BB-' and 'B', respectively. The government support rating (GSR) was also affirmed at 'no support' ('ns'). The Rating Outlook on the Long-Term IDR is Stable. Fitch has also affirmed the Long- and Short-Term National Scale ratings of BBX+'s, Casa de Bolsa Ve por Mas, S.A. de C.V., Grupo Financiero Ve por Mas (CBBX+) and Arrendadora Ve por Mas, S.A. de C.V. Sofom E.R., Grupo Financiero Ve por Mas (AXB+) at 'A(mex)'/'F1(mex)'. The Outlook on the Long-Term ratings is Stable. KEY RATING DRIVERS Reasonable Credit Profile: BBX+'s IDRs and national scale ratings are driven by the bank's intrinsic creditworthiness as reflected in its 'bb-' VR, which is in line with the implied VR. The VR is underpinned by its business profile characterized by a modest local market share, though a relatively diversified business model compared with its peers, which has resulted in low, but consistent earnings generation over the years, partially offsets the bank's size. Consistent Business Model: Fitch's 'bb' assessment of the bank's business profile is above the 'b' implied score category due to BBX+'s a relatively diversified business model focused on consumer and commercial lending, corporate and private banking, trust services and derivatives and FX trading. All services are financed by a stable and growing customer deposits base. Controlled Asset Quality Metrics: BBX+'s Stage 3 loans to total loans ratio showed a slight increase compared to the trend of the past four years. As of 1Q23, this ratio was 3.2% (average 2019-2022: 2.9%). Nevertheless, Fitch views the bank's asset quality as commensurate with its score level and in line with its local (mid-sized Mexican commercial banks) and international peers (similarly rated commercial/universal banks in 'bb' category). At YE22, the top 20 borrowers represented close to 1.8x the bank's common equity Tier 1 (CET1), which in conjunction with lower coverage of Stage 3 loans by loan loss allowances (LLA) compared with peers, could pressure asset quality. However, LLA coverage of Stage 3 loans has improved over the past four years (1Q23: 113.6%). Improved Profitability: BBX+'s profitability improved over the last year mainly due to increased operating efficiencies, as well as lower loan impairment charges (LICs). At 1Q23, the operating profit to risk-weighted assets (RWA) ratio was 2.9%, the highest level in recent history (average 2019-2022: 1.4%), though this ratio remains slightly below its local peers. The operating efficiency ratio (non-interest expense to gross revenues) was close to 55.5%, which compares favorably with the bank's 62.5% average over the past four years. When considering YE22 results reported under IFRS, the earnings and profitability score is assessed below the implied 'bb' category score as profitability more than doubled in 2022. While profitability may decline from the peaks reported in 2022 and 1Q23, Fitch expects profitability to be sustained at a higher level relative to the four-year average through 2022, underpinning the positive trend on this score. Capitalization in line with Rating Level: BBX+'s capitalization remains at reasonable levels with a CET1 to RWA ratio of 13.9% at 1Q23, the highest level over the past four years (average 2019-2022: 12.7%). Nevertheless, this ratio remains below its local peers and also could be pressured by the bank's high credit concentrations. The implementation of the business indicator for operational risk requirements, which reduced RWAs, as well as sustained earnings generation with minimal dividend distributions, benefited BBX+'s CET1 ratio. Fitch expects capitalization levels to remain between 13% and 15% over the rating horizon, even as the bank continues to grow its loan portfolio. Good Funding and Liquidity Profile: The bank's funding and liquidity profile remains stable. BBX+'s funding is mainly comprised of customer deposits (close to 87% of total non-equity funding excluding repos and securities lending at 1Q23). The gross loans to customer deposits indicator improved to 108.4% at 1Q23, comparing favorably to the past four years (average 2019-2022: 116.5%) and it is supported mainly by higher growth in customer deposits (1Q23: 16.2% yoy). The portion of demand deposits relative to total deposits is higher than peers. Likewise, at YE22 the quarterly average liquidity coverage ratio was 139%, while the net stable funding ratio was 115.5%. Both indicators are consistently above the regulatory minimum. RATING SENSITIVITIES Factors that Could, Individually or Collectively, Lead to Negative Rating Action/Downgrade - If there were a sustained weakening in the bank's asset quality metrics and pressures the bank's operating profit to RWA ratio consistently below 1% and a CET1 to RWA ratio consistently below 12% that leads to downgrade the Business Profile assessment score. Factors that Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade - Over the medium term through an improvement of the bank's financial profile, specifically if the operating profit to RWA ratio is consistently above 1.25% in conjunction with a CET1 capital ratio consistently above 15% while maintaining reasonable and stable metrics for other financial factors. GSR BBX+'s 'ns' GSR reflects Fitch's view that there is no reasonable assumption that government support will be available as the bank is not a domestic systemically important bank (D-SIB). At YE22, BBX+ deposits represented 0.7% of the Mexican banking system. Factors that could, individually or collectively, lead to negative rating action/downgrade: - There is no downside potential for the GSR. Factors that could, individually or collectively, lead to positive rating action/upgrade: - Upside potential is limited and can only occur over time with a material growth of the bank's systemic importance. SUBSIDIARIES & AFFILIATES: KEY RATING DRIVERS Ratings Driven by Support: The national ratings of ABX+ and CBBX+ are aligned with BBX+'s national ratings, and consider Grupo Financiero Ve por Mas, S.A. de C.V.'s (GFBX+), whose creditworthiness is assumed to be aligned to that of its main subsidiary (BBX+), legal obligation to support its subsidiaries, as well as Fitch's perception that these remain key and an integral part to the group's overall vision and strategy. SUBSIDIARIES AND AFFILIATES: RATING SENSITIVITIES Factors that could, individually or collectively, lead to negative rating action/downgrade: - Any negative movement would be driven by any negative action on BBX+'s ratings. Factors that could, individually or collectively, lead to positive rating action/upgrade: - Any positive movement would be driven by any positive action on BBX+'s ratings. VR ADJUSTMENTS The Business Profile Score of 'bb' has been assigned above the 'b' category implied score due to the following adjustment reasons: Business Model (positive). The Earnings and Profitability score of 'b+' has been assigned below the 'bb' category implied score due to the following adjustment reason(s): Historical and Future Metrics (negative). SUMMARY OF FINANCIAL ADJUSTMENTS BBX+ and ABX+: Pre-paid expenses, other deferred assets and goodwill were classified as intangibles and deducted from total equity due to its low absorption capacity under stress. CBBX+: Pre-paid expenses and other deferred assets were classified as intangibles and deducted from total equity due to its low absorption capacity under stress. PUBLIC RATINGS WITH CREDIT LINKAGE TO OTHER RATINGS The ratings of ABX+ and CBBX+ are driven by the institutional support from BBX+ rated at 'BB-' with a Stable Outlook. ESG CONSIDERATIONS Fitch has revised BBX+ Governance Structure to '3' from '4' as the exposure to an ownership concentration has a limited impact on the bank's credit profile and is credit neutral because the bank shows a certain independence in the corporate governance structure. Unless otherwise disclosed in this section, the highest level of ESG credit relevance is a score of '3'. This means ESG issues are credit-neutral or have only a minimal credit impact on the entity, either due to their nature or the way in which they are being managed by the entity. Entity/Debt Rating Prior ----------- ------ ----- Casa de Bolsa Ve por Mas, S.A. de C.V., Grupo Financiero Ve por Mas Natl LT A(mex) Affirmed A(mex) Natl ST F1(mex) Affirmed F1(mex) Arrendadora Ve por Mas, S.A. de .C.V., Sociedad Financiera de Objeto Multiple, Entidad Regulada, Grupo Financiero Ve por Mas Natl LT A(mex) Affirmed A(mex) Natl ST F1(mex) Affirmed F1(mex) Banco Ve por Mas, S.A., Institucion de Banca Multiple, Grupo Financiero Ve por Mas LT IDR BB- Affirmed BB- ST IDR B Affirmed B LC LT IDR BB- Affirmed BB- LC ST IDR B Affirmed B Natl LT A(mex) Affirmed A(mex) Natl ST F1(mex) Affirmed F1(mex) Viability bb- Affirmed bb- Government Support ns Affirmed ns ===================================== T R I N I D A D A N D T O B A G O ===================================== TRINIDAD CEMENT: 2022 Profits Drop by 69.64% -------------------------------------------- Trinidad and Tobago Guardian reports that Claxton Bay-headquartered Trinidad Cement Ltd (TCL) declared net income of $57.80 million for its financial year ended December 31, 2022, a decline of 69.64 per cent compared to the $190.41 million the company earned in 2021. The cement producer's annual results were impacted by fourth quarter 2022 results, when it suffered a net loss of $109.28 million in its fourth quarter of 2022, despite its revenue increasing by 3.72 per cent in that period, according to the company's audited financial report for the year ended December 31, 2022, according to Trinidad and Tobago Guardian. In the directors' statement on the audited financials, TCL chairman David Inglefield and its managing director, Francisco Aguilera Mendoza, said, "This decrease was driven by the provision for restructuring costs at Arawak Cement Company Ltd (ACCL) in Barbados and lower operating earnings due to higher inflation," the report notes. The company also said its fourth quarter result "reflects the impact of lower sales volumes across the group due to the heavy rainy season which slowed demand, as well as higher fuel and import costs," the report relays. Reflecting on the company 12-month performance, the TCL directors said: "On a year-to-date basis, the group recorded consolidated revenue from continuing operations of $2.1 billion, nine per cent higher than 2021, the report recalls. "The group's adjusted EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortisation) on a year-to-date basis of 2022 was $522 million, a 19 per cent increase compared to the prior year due to stronger revenues driven by the price increases that helped to offset the significant inflationary costs experienced during the year, the report notes. "On a year-to-date basis, the group reported a net income of $58 million compared to a net income of $190 million in 2021, the report says. The TCL directors explained that in 2022 the group renegotiated loan facilities expiring in 2023, and extended the maturity of $270 million of these to December 2026, the report notes. The renegotiation reduced the interest rate payable and extended the term of its borrowings, the report relays. With regard to the company's outlook in 2023, TCL said, "We will ensure that our operations remain resilient by continuing effective cost management initiatives to maximize value in this challenging economic environment, the report discloses. "Additionally, we expect improved productivity and efficiency of our equipment on completion of major planned maintenance in 2023, the report notes. "The board and management continue to monitor the current economic situation to ensure that our business strategies will withstand the unpredictable market conditions and other ongoing global and regional challenges," the report says. TCL, which operates throughout the English-speaking Caribbean, delayed its consolidated financial statement for the year ended December 31, 2022 on two occasions, the reprot relays. The company explained that the delay was due to its recent implementation of SAP, an enterprise resource planning software, "which has now created a need for additional audit procedures," the report notes. TCL, which is majority owned by Mexican construction products giant, Cemex, has cement-producing operations in Trinidad, Barbados and Jamaica, the report relates. In 2021, TCL announced that it planned to expand production at its Jamaican subsidiary (Caribbean Cement Company Ltd) by 30 per cent from 1,000,000 tonnes a year to 1,300,000 a year, the report says. "This planned capacity upgrade also involves the implementation of state-of-the-art technologies which will introduce novel grinding additives to the manufacturing process to reduce the clinker content in the cement produced by CCCL," TCL stated in 2021, the report adds. As reported by the Troubled Company Reporter-Latin America in March 2023, Trinidad Express noted that President-General of the Oilfields Workers' Trade Union (OWTU) Ancel Roget is calling for workers at the Trinidad Cement Ltd (TCL) to be paid outstanding monies in relation to collective agreements dated back to 2015. Should this continue to be unpaid, the workers will continue to protest and strike action is also not off the cards, according to Trinidad Express. Speaking outside the TCL compound in Claxton Bay during protest action by retirees and present employees, Roget said that the outstanding monies include the Cost of Living Allowance (COLA) and profit sharing over three collective bargaining periods from 2015 to 2024, the report noted. ********* 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 2023. 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. 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