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       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, July 19, 2023, Vol. 24, No. 144

                           Headlines



A R G E N T I N A

ARGENTINA: Private Estimates Say Poverty Rate Has Risen to 43%


B E R M U D A

BERMUDA: Unemployment Rate Below Pre-Pandemic Levels


B R A Z I L

AZUL SA: S&P Upgrades ICR to 'B-' on Improved Capital Structure
BRAZIL: Inflation Hits Nearly 3-Year Low; Rate Cuts on the Horizon


D O M I N I C A N   R E P U B L I C

[*] DOMINICAN REPUBLIC: 4th Country That has Cut its Debt The Most


J A M A I C A

JAMAICA: Developers Urged to Collaborate


P A R A G U A Y

FRIGORIFICO CONCEPCION: Moody's Assigns First Time 'B1' CFR


T R I N I D A D   A N D   T O B A G O

TRINIDAD & TOBAGO: Records $600 Million Surplus in May

                           - - - - -


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A R G E N T I N A
=================

ARGENTINA: Private Estimates Say Poverty Rate Has Risen to 43%
--------------------------------------------------------------
Buenos Aires Times reports that according to specialist estimates,
Argentina ended the first half of the year at a poverty rate of
between 42 and 43 percent.

This would imply that a further one million people have slipped
below the poverty line since the most recent official figure
published by the government, according to Buenos Aires Times.  Back
in March, the INDEC national statistics bureau reported that 39
percent of Argentines living in the country's 31 largest urban
areas, some 11.5 million people, were classified as poor in the
second half of 2022, Buenos Aires Times notes.

"The increase in the year-on-year poverty rate seems to be mainly
explained by an increase in total household income that is
considerably lower than the increase in the value of the total
basic food basket.  That is, the increase in the total basic food
basket between the second half of 2022 and the first half of 2023
exceeded 70 percent, while total household income increased by less
than 50 percent," Martin Gonzalez Rozada, director of the master's
programme in Econometrics at the Torcuato Di Tella University
(UTDT), explained in an interview with Perfil, Buenos Aires Times
relays.

Data from the university registered a poverty rate of 43 percent in
the first half of the year, Buenos Aires Times notes.  In the
country's inland region, the rate stood at 40.3 percent in the
first quarter of the year, rising to 45.5 percent in the second
quarter, Buenos Aires Times dicloses.  That would be the highest
rate since the first three months of 2006, when 44.5 percent of the
nation lived below the poverty line, Buenos Aires Times says.

Using data from the first three months of the year, Leo Tornarolli,
an economist and researcher at the National University of La Plata,
also recorded an increase in poverty over the October 2022-March
2023 period, Buenos Aires Times notes.

In the second quarter of this year, with inflation soaring and
formal wages failing to keep pace, economic activity was also
damaged by the consequences of drought, Buenos Aires Times relays.

Agustin Salvia, director of the influential Social Debt Observatory
at the Catholic University of Argentina (ODSA-UCA), told Perfil
that "another increase in poverty of 42 or 43 percent is to be
expected for the six months that have just ended," Buenos Aires
Times notes.

He continued: "There is a 25 percent [of the population] in
structural poverty, who are chronically poor, that is to say, for
several generations. They are in the informal sector or in social
programmes, in urban areas of great marginalisation and exclusion,
Buenos Aires Times says. "But you have another part, which is
between 15 and 20 percent of 'new poor,' who are lower middle
classes that have fallen into poverty.  And they are poor not so
much because of their residential infrastructure conditions or
educational human capital, but basically because their [salary
from] work is not enough to live on because it is devoured by
inflation."

There are factors that explain why things have not escalated even
further: Argentina's low unemployment rate and economic activity,
which has acted as a spur and prevented the figure from soaring,
Buenos Aires Times says.

"Two factors are holding back an increase in poverty.  On the one
hand, the situation of a fairly high aggregate demand for
employment that is still growing, although in recent months it has
been falling," Salvia explained, Buenos Aires Times notes. "The
second variable is that social programmes now reach more than 40
percent of households in Argentina.  If we count all social
problems plus food aid excluding pensions, we have the fact that
four out of ten households are receiving some kind of aid. So, in
this context, it is understandable why poverty does not explode."

Specialists also agree that another cause is that the level of
economic activity has not fallen dramatically, Buenos Aires Times
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.

In 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+'.

S&P's 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 March 24, 2023, 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-'.
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.



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B E R M U D A
=============

BERMUDA: Unemployment Rate Below Pre-Pandemic Levels
----------------------------------------------------
Royal Gazette reports that Bermuda's unemployment rate at the end
of 2022 was back down to where it was before the pandemic hit the
island, according to the Labour Force Survey released by the
Department of Statistics.

The figures indicate that the economy has by some measures
recovered, though they also suggest that parts of society may have
missed out on some of the rebound, according to Royal Gazette.

In November last year, the unemployment rate in Bermuda was 3.1 per
cent, compared with 3.8 per cent in November 2019. The rate hit 7.9
per cent in November 2020, the report notes.

Improvements were reported in almost all subcategories, the report
relays.

Unemployment among men was 4.1 per cent in November 2022, down from
4.5 per cent in November 2019, the report discloses.  For women, it
was 2.0 per cent, down from 2.9 per cent pre-pandemic, the report
says.

In all age groups but two - the 45-54 and 65-and-above cohorts -
the unemployment was lower, the report notes.

The jobs recovery was particularly pronounced in the 35-44
category, where the rate dropped from 3.4 per cent pre-pandemic to
1.0 per cent last November, the report relays.

For people without a high school diploma, the unemployment rate
fell from 7.4 per cent pre-pandemic to 2.8 per cent, the report
notes.

The jobless rate rose slightly for non-Bermudians, from 1.6 per
cent to 1.8 per cent, the report says.

In the survey, 1,550 household were selected, and of those 1,211
answered a questionnaire, the report discloses.  Those
participating did so by phone or in person, the report relays.
Results were extrapolated from this sample, the report notes.

The employment rate, which is the percentage of the population
working, rebounded as well, hitting 80.4 per cent from November
2019's 78.7 per cent, though the number of economically inactive in
Bermuda was higher than it was before the pandemic, at 17,903, the
report relays.

The rise is the result almost exclusively of people retiring, the
report notes.

Incomes rose steadily through the pandemic, with the average
increasing from $62,557 in November 2019 to $65,725 in November
2022, the report adds.




===========
B R A Z I L
===========

AZUL SA: S&P Upgrades ICR to 'B-' on Improved Capital Structure
---------------------------------------------------------------
S&P Global Ratings raised its global scale issuer credit rating on
Brazil-based airline Azul S.A. (Azul) to 'B-' from 'SD' and its
national scale rating to 'brBBB-' from 'SD'. At the same time, S&P
raised its rating on Azul's senior unsecured notes to 'CCC' from
'D' and revised the recovery rating to '6' from '4', indicating its
expectation of minimal recovery (0%) on the remaining unsecured
notes due 2024 and 2026 in the event of a payment default.

The stable outlook reflects S&P's expectation that Azul will post
stronger results in the next 12 months and emerge from its
restructuring with comfortable liquidity and an improved capital
structure. It also reflects the fact that the company's leverage
will stay high, with debt to EBITDA of 5.0x-5.5x and funds from
operations (FFO) to debt of about 10% in 2023 and 2024.

On July 14, the company completed a debt exchange on its senior
unsecured notes due 2024 and 2026 for secured notes due 2029 and
2030. The exchange had an aggregated acceptance of about 86%.

The transaction considerably reduced refinancing risks as only $100
million of the notes due 2024 remains outstanding. Additionally,
Azul improved its maturity profile, with no material debt
amortization until 2028.

Azul has also been in renegotiations with lessors and original
equipment manufacturers (OEMs) that will result in a reduction of
about 4 billion Brazilian reals (R$) in lease obligations and a
reduction in future lease payments.

On July 13, Azul raised $800 million leveraging on the same
collateral of the exchange notes. The notes will be secured on a
first priority basis on the company's frequent flyer program
(TudoAzul), the travel business (Azul Viagens), and most of its
brand and intellectual property. Azul will use part of the proceeds
to prepay about $56 million of the exchanged notes due 2029 and
about $105 million of the convertible debenture. S&P believes the
remaining $640 million in additional cash will ensure a very
comfortable liquidity position for the company over the next two
years even as we expect it to keep burning some cash (despite
improved performance).

The coupons on the exchanged notes are now 11.5% and 10.875%
(versus 5.875% and 7.25% previously), and the new notes were priced
with a 11.93% coupon. Furthermore, gross debt levels will increase
since the company has raised additional debt and since we still
forecast negative free operating cash flow after lease payments for
the next two years.

Lease payments will remain burdensome and capital expenditures will
remain elevated over the next two or three years as the company's
fleet transformation plan progresses. The company plans to replace
its older E-190 and E-195 aircraft with next-generation E-195-E2
aircraft and fly 100% of its capacity on next-generation aircraft
by 2026.

S&P expect Azul to keep leverage at 5.0x-5.5x over the next two
years and report free operating cash flow deficits (after lease
payments) of about R$60 million in 2023 and R$500 million-R$600
million in 2024.

Azul's international capacity should grow about 60% in 2023 (as
international travel remained very weak in 2022) while the company
maintains a modest 4% expansion rate for its domestic business
(where it's already operating about 25% above pre-pandemic
levels).

S&P said, "We expect some pressure on yields starting in the second
half of the year as Brazilian airlines continue adding capacity and
macroeconomic conditions remain difficult (with sluggish GDP growth
and high interest rates). However, we believe airlines will focus
on protecting profitability and operating cash flow; thus, we
expect a rational market and average yields in 2023 to remain
strong. In addition, we forecast that Azul will benefit from an 18%
drop in jet fuel prices since crude oil prices are likely to fall,
and we aren't expecting a material depreciation of the Brazilian
real.

"As a result, in our base case, Azul's S&P Global Ratings-adjusted
EBITDA should jump to about R$5.2 billion this year from R$2.7
billion in 2022. In line with this, we forecast adjusted debt to
EBITDA by year-end 2023 of about -5.5x (compared with 8.8x in 2022)
and FFO to debt of 10% (compared with 6.4% in 2022)."

ESG credit indicators: To E-3, S-4, G-2; From: E-3, S-5, G-2

The fact that only 23% of Azul's pre-pandemic business was
international travel has allowed for a faster capacity and revenue
recovery than for other airlines in the world. Because of that and
the recent debt restructuring, S&P expects the company to maintain
a sustainable capital structure. As a result, it revised the social
credit indicator to S-4 from S-5.

Social factors remain a negative consideration since Azul's
finances are still suffering from the pandemic-induced economic
shock. Although revenue and EBITDA in 2023 should be well above
pre-pandemic levels, cash flows and leverage remain much weaker.
The company increased adjusted debt over 50% between December 2019
and December 2022 to preserve liquidity and fund operations during
the pandemic, finally pushing the company into debt and lease
liabilities restructuring and default.

Environmental factors are a moderately negative consideration in
S&P's credit rating analysis of Azul. All airlines face long-term
risk from tighter greenhouse gas emissions regulation. Azul has a
younger fleet with an average age of 7.1 years--lower than the
global average--and through fleet transformation, it has reduced
fuel consumption per ASK and currently operates 70% of its seats
with low-carbon aircraft. But this might not be enough to offset
long-term risks.


BRAZIL: Inflation Hits Nearly 3-Year Low; Rate Cuts on the Horizon
------------------------------------------------------------------
Reuters reports that Brazil's annual inflation in June fell to its
lowest level since September 2020, data from statistics agency IBGE
showed, renewing bets that an interest rate cut is around the
corner as consumer prices continue to trend down.

Annual inflation in Latin America's largest economy slowed to 3.16%
in June from 3.94% in May, in line with a market consensus of
3.17%, according to Reuters.

Prices fell 0.08% on a month-on-month basis, the first deflation
registered since September of last year, the report notes.

The figures are likely to support expectations that the central
bank will start cutting rates as soon as next month, after it took
a dovish tone at its last meeting in June, saying that an August
cut was possible if the positive inflation scenario continued, the
report relays.

"The sharp fall in inflation last month makes it almost certain
that the central bank will kick off its easing cycle at its next
meeting," said William Jackson, chief emerging markets economist at
Capital Economics, the report adds.

                          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.

In mid-June 2023, S&P Global Ratings, revised the outlook on its
long-term global scale ratings on Brazil to positive from stable.
S&P affirmed its 'BB-/B' long- and short-term foreign and local
currency sovereign credit ratings on Brazil. S&P also affirmed its
'brAAA' national scale rating, and the outlook remains stable. The
transfer and convertibility assessment remains 'BB+'. The positive
outlook reflects signs of greater certainty about stable fiscal and
monetary policy that could benefit Brazil's still-low GDP growth
prospects. Continued GDP growth plus the emerging framework for
fiscal policy could result in a smaller government debt burden than
expected, which could support monetary flexibility and sustain the
country's net external position.

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.

Fitch, 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 2023 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.

DBRS's credit rating for Brazil is BB (low) with stable outlook
(March 2018).



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D O M I N I C A N   R E P U B L I C
===================================

[*] DOMINICAN REPUBLIC: 4th Country That has Cut its Debt The Most
------------------------------------------------------------------
Dominican Today reports that Jose Manuel Vicente, the head of the
Ministry of Finance, has stated that the Dominican Republic is
among the top four countries that have significantly reduced their
debt over the past two years.  He shared this information on his
Twitter account, highlighting the progress made, according to
Dominican Today.

According to Vicente, in August 2020, the debt of the Non-Financial
Public Sector (SPNF) stood at 49.7% of the country's GDP, the
report notes.  By June 2023, the debt balance has been reduced to
44.8% of GDP, the report relays.

Vicente also referenced Article IV of the International Monetary
Fund (IMF) from June 2023, which states that the Dominican Republic
has a moderate risk of sovereign stress and the debt is deemed
sustainable, the report relays.  The report further acknowledges
that the country's public debt has been on a declining path due to
a strong economic recovery and fiscal consolidation efforts
implemented in 2021, 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.

S&P Global Ratings, in December 2022, raised its long-term foreign
and local currency sovereign credit ratings on the Dominican
Republic to 'BB' from 'BB-'. The outlook on the long-term ratings
is stable. S&P affirmed its 'B' short-term sovereign credit
ratings. S&P also revised its transfer and convertibility (T&C)
assessment to 'BBB-' from 'BB+'.  The stable outlook reflects S&P's
expectation of continued favorable GDP growth and policy continuity
over the next 12-18
months that will likely stabilize the government's debt burden.

In February 2023, S&P said its BB ratings reflect the country's
fast-growing and resilient economy.  It also incorporates the
country's historical political and social challenges in passing
structural reforms to contain fiscal deficits, despite recent
improvements in the electricity sector. The ratings are constrained
by relatively high debt, a hefty interest burden, and limited
monetary policy flexibility.

Fitch Ratings, in December 2022, affirmed the Dominican Republic's
Long-Term Foreign Currency Issuer Default Rating (IDR) at 'BB-'
with a Stable Rating Outlook.

Moody's affirmed the Dominican Republic's long-term issuer and
senior unsecured ratings at Ba3 and maintained the stable outlook
in March 2021.



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J A M A I C A
=============

JAMAICA: Developers Urged to Collaborate
----------------------------------------
Jamaica Observer reports that professionals and stakeholders in the
real estate sector are being urged to develop minimum standards and
collaborate to ensure the sector's resilience.

"Instead of primarily competing, members of the association could
collaborate and cooperate even more for their mutual benefit,"
Delroy Chuck, minister of justice, said while delivering the
opening address for the first Jamaica Developers Association (JDA)
webinar for 2023, held under the theme: 'Navigating Minefields in
Development,' according to Jamaica Observer.

He added that the implementation of a code of conduct for
developers would also be effective, noting that such a document
should include minimum quantitative standards to which developers
can be held, the report notes.  The minister said the code would
ensure that developments benefit their surroundings instead of
damaging them, the report relays.

"On construction sites, there should be minimum standards of
behavior, noise, neighborly interaction and dislocation and prompt
continuous repairs to roads adjoining and leading up to the
development," he said, the report says.

While the construction sector has enjoyed a boom, there are issues
hampering orderly development, including incomplete or inconsistent
information submitted by developers seeking funding for projects,
applications from developers continue to be flagged due to
irregularities in the data submitted, the report notes.

"We are concerned about some of these statutory approval documents
being received, and these inconsistencies are causing delays. JN is
prepared to work with developers to ensure we have a successful
housing development sector," said assistant general manager and
chief development financing officer at The Jamaica National Group,
Carlton Earl Samuels, who pointed to other challenges that need to
be addressed in the sector. He cited project budgets as examples,
where figures have been understated, as the developers fail to
either factor in the full cost of the development outside of the
financing being sought, or to correctly outline the scope of the
project, the report discloses.

Samuels also called for purchasers to be educated about
certificates of practical completion issued by architects, the
report says.  The certificate is often used as a contractual
document to allow a client to take possession of a building, the
report relays.  Samuels outlined that there have been instances
where purchasers who are issued the document lodge complaints when
it becomes apparent that the units are not yet ready to be
inhabited, the report notes.  He said more sensitization will be
required to inform stakeholders about what a legitimate document
should look like and the terms under which they can be issued, the
report says.

In the meantime, architect, Dr Patricia Green, who was also a
panellist during the webinar, explained that the architect's
contract can sometimes lead to circumstances where purchasers
receive certificates for projects that are practically incomplete,
the report discloses.

"The architect's contract may have been specific to certain items
and so the practical completion and the certificate would be with
regard to those specific items under the architect's contract," she
said, the report notes.

She suggests that architects send samples of certificates to all
financiers and building societies to ensure all parties have an
idea of what they look like, the report relays.  But another
architect, Robert Fowler, argued that there may be situations where
the certificates are not being issued by qualified professionals,
the report says.  He said it is possible that the certificates are
being issued by other persons named in contracts, noting that he
suspects that for several ongoing projects, there is no architect
being engaged in the final stages, the report notes.

"An architect may have done the drawings and may have gone as far
as getting approval but that becomes the end of their involvement,"
he said while charging financial institutions to insist that these
persons are registered professionals, the report relays.

As part of the solution, the panellists also called on municipal
corporations, the regulatory authorities, to be more consistent in
inspecting projects and issuing occupancy certificates which would
ensure that purchasers get what they agreed to, the report adds.

                      About Jamaica

Jamaica is an island country situated in the Caribbean Sea.
Jamaica is an upper-middle income country with an economy heavily
dependent on tourism.  Other major sectors of the Jamaican economy
include agriculture, mining, manufacturing, petroleum refining,
financial and insurance services.

Standard & Poor's credit rating for Jamaica stands at B+ with
negative outlook (April 2020).  Moody's credit rating for Jamaica
was last set at B2 with stable outlook (December 2019).  Fitch's
credit rating for Jamaica was last reported at B+ with stable
outlook (April 2020).

In March 2022, Fitch Ratings affirmed Jamaica's Long-Term Foreign
Currency Issuer Default Rating (IDR) at 'B+'. The Rating Outlook is
Stable.



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P A R A G U A Y
===============

FRIGORIFICO CONCEPCION: Moody's Assigns First Time 'B1' CFR
-----------------------------------------------------------
Moody's Investors Service has as assigned a B1 corporate family
rating to Frigorifico Concepcion S.A. ("Frigorifico"). The outlook
is stable.

This is the first time that Moody's has assigned ratings to
Frigorifico Concepcion S.A.

Assignments:

Issuer: Frigorifico Concepcion S.A.

Corporate Family Rating, Assigned B1

Outlook Actions:

Issuer: Frigorifico Concepcion S.A.

Outlook, Assigned Stable

RATINGS RATIONALE

The B1 rating assigned to Frigorifico Concepcion S.A. (Frigorifico)
reflects its leading position in the production and sale of fresh
beef and pork with regional diversification of production through
facilities located in Paraguay, Bolivia and Brazil, which in turn
supports the company's access to a diversified pool of export
markets. The rating also incorporates Frigorifico's ability to
significantly increase revenues through expansion of processing
capacity and strategic acquisitions since 2020, while at the same
time maintaining strong profitability aided by its experienced
management and good operating environment in Latin America,
particularly in Paraguay, where the company benefits from a lower
tax burden relative to regional peers. Moody's expects Frigorifico
will maintain a prudent capital structure with conservative
financial policies to preserve the company's liquidity and address
capital spending requirements.

Frigorifico's rating is mainly constrained by its small scale
relative to global peers, most of which are based in Latin America,
partially offset by the diversification provided by the company's
export revenue. In this regard, Frigorifico's credit profile would
benefit from a longer track-record as it ramps up new operations in
Brazil and Bolivia in 2023-2024, and a new pork processing plant in
Paraguay by 2024, that will in turn increase its revenue base to
around $1.8 billion by 2024, from $1.1 billion in 2022. Also
constraining the rating is the company's exposure to the cyclical
nature of the protein industry and overall volatility of protein
prices, particularly in beef, which is the company's main protein
in terms of revenue, because EBITDA and working capital
requirements may suffer significantly in response to a sudden rise
in cattle costs.

The stable outlook reflects Moody's expectation that Frigorifico
will be able to sustain adequate liquidity and credit metrics for
the B1 rating level over the next 12-18 months.

As of the last twelve months ended in March 2023, the company's
revenues amounted to $1.3 billion, with a large portion derived
from global exports (55% of total revenue as of the last twelve
months ended in March 2023) and 87% higher than $673 million in
2021. Such growth was accomplished through a significant expansion
of its processing capacity through strategic acquisitions.
Frigorífico has a combined beef slaughtering capacity in Paraguay,
Bolivia and Brazil of 7,040 heads/day; and 1,750 heads/day
slaughtering capacity for pork in Brazil; this represents a
significant expansion from 3,128 heads/day only in beef
slaughtering capacity back in 2021. In this regard, in 2021, the
company made two key acquisitions in Paraguay, BFC PAR, a company
dedicated to agriculture and livestock and trading activities; and
Cabaña el Nido, dedicated to R&D and breeding of hog inhouse
genetically advanced pigs. Through the acquisition of BMG Foods
Importacion y Exportacion Ltda.'s and Frigorifico Vila Bela Eireli
in December 2021, the company acquired both beef and pork
processing facilities in Brazil. In 2022, the company opened its
second beef processing plant in Bolivia, in the city of Cotoca; and
in early 2023 inaugurated All PAR Casings S.A., the largest
state-of-the-art tripe unit in South America. Also, in agreement
with INCKA Foods S.A., the company has a hog processing plant under
construction in Paraguay, which Frigorifico Concepcion anticipates
will start operations by mid-2024.

Although higher working capital requirements derived from high
revenue growth will rise the company's debt levels to around
$450-480 million in 2023-2024, from $397 million in December 2022,
improving EBITDA will keep leverage metrics in check, with a slight
improvement. Moody's expects EBITDA to rise to around $160 million
in 2023 and $180 million in 2024, from $121 million in the last
twelve months ended in March 2023. As a result, Moody's adjusted
gross debt to EBITDA will remain at around 2.5x-3.0x in 2023-2024,
down from 3.5x as of the last twelve months ended in March 2023,
while gross debt to book capitalization remains around 50%-56% in
that period, down from 57.5% as of March 2023. Regarding interest
coverage, higher interest expenses as debt levels rise in 2023-2024
will be compensated by higher EBITA, and the ratio of EBITA to
interest expense ration should remain around 5.0x in that period,
up from 4.1x as of the last twelve months ended in March 2023.

As of March 2023, Frigorifico Concepcion had an adequate liquidity
to cover its upcoming debt maturities through the next 15 months.
As of March 2023, Frigorifico Concepcion cash balance of $75
million represented 102% of short-term debt, and the company does
not face significant debt maturities until its $300 million senior
unsecured note are due in 2028. Since 2020 the company has grown
significantly, which in turn has increased liquidity risk through
higher working capital requirements, as reflected in its negative
cash from operations in 2020-2022. Moody's expects higher EBITDA in
the next 12-18 months as a result of the ramp-up of new capacity
will aid the company's liquidity. Also supporting liquidity is the
company's track record of access to local and international
financial institutions and capital markets.

Frigorifico is a privately held corporation with limited liability;
Mr. Jair de Lima is the majority shareholder of the company
(94.92%) and chairman of the Board of Directors. There is limited
independence of the board because currently one out of seven board
members is independent, but this is somewhat balanced by the
company's commitment to deleveraging despite significant M&A
activity recently. The company has managed to enforce some
financial policies to deliver a more sustainable growth through
limitations on dividend payments, caps on leverage and strict cash
conversion cycles.

FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATING

An upgrade to Frigorifico Concepcion's rating would require the
company to perform in a more resilient manner regardless of the
underlying operating environment in the countries of operations,
maintaining good liquidity aided by positive free cash flow (FCF).
Quantitively, a rating upgrade would require the company to
maintain debt to EBITDA (Moody's adjusted) ratio close to 3.5x,
Cash from Operations (CFO) to gross debt above 15% and
EBITA/interest expense ratio above 4.0x, on a sustained basis.

The ratings could be downgraded if there is a deterioration in
Frigorifico Concepcion's liquidity and operational performance.
Specifically, Moody's would downgrade the rating if the company's
Moody's-adjusted gross debt to EBITDA ratio were to rise above 4.0x
and EBITA to interest ratio were to fall below 3.0x, on a sustained
basis.

The principal methodology used in this rating was Protein and
Agriculture published in November 2021.

Headquartered in Asuncion, Paraguay, Frigorifico Concepcion
produces fresh beef and pork in Latin America, with regional
diversification of production through facilities located in
Paraguay, Bolivia and Brazil, and diversified portfolio of clients
globally. The company has made significant efforts to diversify its
customer base in recent years through the expansion to different
markets. As of fiscal-year 2022, 31.2% of export revenue derived
from sales to the Americas, 42.3% to Asia, 16.2% to Commonwealth of
Independent States (CIS), 5.7% to the Middle East and the remaining
balance to Africa and the EU.




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T R I N I D A D   A N D   T O B A G O
=====================================

TRINIDAD & TOBAGO: Records $600 Million Surplus in May
------------------------------------------------------
Joel Julien at Trinidad Express reports that Trinidad and Tobago
recorded a surplus of $600 million at the end of May, Finance
Minister Colm Imbert said on July 10 as he expressed confidence
that at the end of this fiscal year this country's deficit will not
be as large as previously projected.

Following the 2023 budget presentation, Imbert said that with
revenues of $56.175 billion and expenditures of $57.685 billion,
this country's deficit was estimated to be around $1.510 billion,
according to Trinidad Express.

In May, Imbert requested a further $3.85 billion in supplementary
funding, the report notes.

But things have been looking up Imbert said, the report relays.

Imbert made the comments during a Ministry of Finance press
conference where he addressed Moody's Investors Service improving
Trinidad and Tobago's credit rating outlook to positive from
stable.

Moody's also affirmed the Government of Trinidad & Tobago's
long-term local and foreign currency issuer and senior unsecured
ratings at Ba2.

"The significance of this is that in order to get an upgrade in the
actual rating number itself one has to go through this pathway in
terms of your outlook," Imbert said, the report relays.

                    'Significant Development'

"So for example if your outlook is negative, you have to get your
outlook to stable, and then you get it to positive and then you are
on your way towards an upgrade in the actual rating number itself.
So this is a very significant development," he said, the report
discloses.

Imbert said positive outlook that Moody's gave us reflects improved
prospects that Trinidad & Tobago's (T&T's) fiscal consolidation
momentum triggered by energy price windfall gains will be more
sustained than previously projected, the report notes.

"The last time we were rated by Moody's they had a somewhat
pessimistic outlook on Trinidad and Tobago because of the fact that
there was a view that the windfall that we received from oil prices
and gas prices during Covid would not be sustained but now based on
a number of different things Moody's has indicated that they
believe that our momentum, our fiscal consolidation momentum will
be more sustained than originally thought," Imbert said, the report
relays.

"This is a very positive development for Trinidad and Tobago
because it demonstrates that our approach to fiscal and monetary
policy is working and that the rating agency has recognized that we
are on the right track and the momentum that we have received the
boost that we got in 2022 will be continued into 2023 and beyond,"
he said, the report notes.

Imbert said the fiscal out-turn up to the end of June is quite
encouraging, the report relays.

"We would have thought that by the end of June we would have a
fairly sizable deficit but that is not so.  At the end of May we
were in surplus and we expect by the end of June, because we got
quite significant revenue in June, we will also be in surplus," he
added.

"There are three months to go so we would see what happens in the
rest of the year but I do not think that we are going to post a
sizable fiscal deficit this year at all as originally thought at
the time of the mid-year," Imbert said, the report notes.

Imbert said he believes T&T is doing "quite well" in 2023 from a
financial perspective. Imbert said while we currently have a
surplus he was not sure it would carry to the end of the year
because the majority of funds are expended in the last quarter, the
report discloses.

"That (having a surplus) does not mean that we will end up the year
with a surplus because the last three months of the year there is
always a big push to expedite the public sector investment program
so we spend a lot more in the last three months of the year than we
spend in the first nine months," Imbert said, the report says.

"I don't expect the deficit to be as large as it was predicted to
be when I did the mid-year review but it is too early to tell. All
I can say is that at the end of May we had a surplus of $600
million and I expect in June also we are either in balance or
slight surplus. I cannot predict what would happen by the end of
September but we can project based on trends that the deficit will
be less than expected in the mid-year review," he said, the report
adds.


                           *********


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
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