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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

          Tuesday, July 25, 2023, Vol. 24, No. 148

                           Headlines



A R G E N T I N A

ARGENTINA: Public Debt Reaches New Record of Above US$400 Billion


B R A Z I L

BANCO DE BRASILIA: Moody's Cuts LT Bank Deposit Ratings to B1
BRAZIL: Economy Down by 3% in May, According to FGV GDP Monitor


D O M I N I C A N   R E P U B L I C

DOMINICAN REPUBLIC: Real Estate Activity Down, Acoprovi Says


J A M A I C A

JAMAICA: Spent Close to US$600 Million on Raw Material Imports
JAMAICA: Trade Deficit Declined for January to March


M E X I C O

PETROLEOS MEXICANOS: Moody's Affirms B1 CFR, Alters Outlook to Neg.


U R U G U A Y

URUGUAY: Intended Trade Deal w/ China Provokes Anger

                           - - - - -


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A R G E N T I N A
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ARGENTINA: Public Debt Reaches New Record of Above US$400 Billion
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Buenos Aires Times reports that public debt reached US$ 403.809
billion after adding US$4.977 billion in June, according to the
Monthly Debt Bulletin from the Ministry of Finance.  Despite the
alarming figure, various experts suggest it remains manageable and
rule out a short-term default, according to Buenos Aires Times.

According to the official report, 72% of the liabilities correspond
to public bonds (in pesos and other currencies), 19% is debt with
official external creditors (multilateral organizations and
bilateral loans such as those signed with members of the Paris
Club), 4% are Treasury Bills and another 4% corresponds to Central
Bank Temporary Advances, the report notes.

36% of the debt in normal payment status is payable in local
currency, while the remaining 64% is payable in foreign currency,
the report relays.  This shows a change in composition since June
of last year when it was 32% and 68%, respectively, the report
says.

Meanwhile, the debt-to-GDP ratio remained stable at around 85%
during the first quarter, below the peak of 89.8% in 2019 and over
100% during the first year of Alberto Fernandez's administration,
the report notes.

                      Opinion of the Experts

Aldo Abraham, director of the Fundacion Libertad y Progreso, said:
"In the refinancing that the Treasury is doing, what is happening
is that those who believe that the country's course could be
maintained after the change of government are exiting debt in pesos
and shifting to debt in dollars to reduce risk," the report
discloses.

"There is also an increasing participation in purchases by the
public sector.  Looking ahead, it is becoming clear that in the
next administration, a large portion of the debt that will need to
be renewed will be concentrated in public entities, such as the
Central Bank or Anses, which tend to refinance," he added.

"On the other hand, there is a part that will be in the hands of
the private sector, and what matters is credibility.  If someone is
refinancing debt after the next government takes office, they are
betting on a change of course.  If that happens and the next
president has credibility, there is no risk of it ending badly or
with a debt restructuring because public entities will refinance
and the private sector that has made this bet on a new government
will renew the debt and even buy more from the Treasury," concluded
Abraham, the report relays.

Economist Pablo Tigani of Fundacion Esperanza said: "The debt is
sustainable. Of course, it becomes increasingly challenging, but
never as laborious as during the last months of the previous
government where a significant part of peso-denominated debt was
defaulted.  This time, they are renewing both the Treasury and
Leliqs debt," the report notes.

"If one converts peso-denominated debt into dollars at the current
CCL or MEP exchange rate and takes the dollar at the time the
previous government left, the debt left by the government of
Mauricio Macri was much higher than what Alberto Fernandez has
now," he affirmed, the report relays.

In this regard, the economist pointed out that when Macri left, the
public and Central Bank debt was approximately US$ 420 billion,
having assumed with a debt of US$ 245 billion, the report says.

Furthermore, he specified that the GDP in dollars was US$ 560
billion in 2015, and by 2019, it had decreased to US$ 360 billion,
the report notes.  For this reason, the debt-to-GDP ratio
increased, the report discloses.

"For now, the rollover of debt is happening without any difficulty.
In the run-up to the elections, if Juntos por el Cambio wins,
Patricia Bullrich said that we would have to live with the savings
of Argentines. I'm not sure if she was referring to an potential
corralito or if she is talking about a Bonex plan," Tigani added.

"On the other hand, if a candidate of the ruling party wins the
elections, he or she will probably lower the interest rate in order
to gradually reduce the debt in dollars until a debt-to-GDP ratio
is achieved that is fully consistent with the growth rate and some
modification of the exchange rate," he concluded, the report
relays.

Economist Jorge Colina said: "The government will  not necessarily
default on a debt in pesos because it can pay it by issuing. But
that issuance will generate more inflation. That's why
peso-denominated debt is sustainable with inflation," the report
notes.

"What is not sustainable is the debt with society of having an
economy that has more and more inflation," he added.

                      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 R A Z I L
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BANCO DE BRASILIA: Moody's Cuts LT Bank Deposit Ratings to B1
-------------------------------------------------------------
Moody's Investors Service has downgraded BRB-Banco de Brasilia S.A.
(BRB)'s long-term local and foreign currency bank deposit ratings
to B1 from Ba3. Concurrently, Moody's also downgraded the bank's
Baseline Credit Assessment (BCA) and adjusted BCA to b1 from ba3,
as well as the long-term local and foreign currency Counterparty
Risk Ratings to Ba3 from Ba2. The long-term counterparty risk
assessments (CRs) were also downgraded to Ba3(cr) from Ba2(cr). All
short-term ratings and CR assessment were affirmed, including the
Not Prime (NP) short-term local and foreign currency deposit
ratings, and the Not Prime(cr) counterparty risk assessment. The
outlook on the deposit ratings remains stable.

RATINGS RATIONALE

The downgrade of BRB's BCA to b1, from ba3, reflects the
deterioration in the bank's capitalization and profitability
metrics over the last two years, factors that will likely remain
pressured by its expansion strategy beyond its traditional
footprint. While this strategy will enhance business
diversification and earnings capacity in the medium term, it also
entails execution risks as the bank starts to operate in a highly
competitive business environment with largest commercial banks.
Over the past two years, BRB has grown its loan book by 101%, well
above the industry's growth rate, which will likely strain on asset
risks in the coming quarters However, the b1 standalone credit
profile also acknowledges the large share of low-risk payroll loans
and mortgage financing in the bank's loan portfolio, 69% of total
loans as of March 2023 from 66% in December 2020, which will help
contain further deterioration in asset quality going forward.

The fall in profitability levels between 2021 and 2022 was largely
related to a sharp increase in funding costs that reflected BRB's
strategy to issue hybrid instruments in the local markets to
support the operations' expansion, in times of higher interest
rates. At the same time, being a strong player in the payroll loan
segment, BRB has more limited flexibility to reprice loans during a
tightening interest rate cycle, which has compressed its margins
since 2021. Net interest margin declined to 5.8% in March 2023,
from a 14% average between 2017 and 2020, and will remain pressured
amid intense competition in its marketplace and the expectation
that the Central Bank will cut policy rates gradually. In line with
bank's strategy of originating higher risk credit cards to new
clients through digital channels, credit costs also rose to an
average of 72% of pre-provision income in 2021-2022, from a range
of 15% and 33% between 2017 and 2020, and will likely stay above
historical standards in a context of elevated household
indebtedness and tepid economic activity.

The bank's capital has also reduced as a result of decreased
profitability and robust loan origination over the past two years.
As of March 2023, BRB's tangible common equity to risk weighted
assets (TCE ratio), as adjusted by Moody's, stood at 5.9%, flat
compared to December 2022 and well below the 10.0% registered in
2021. In order to support the balance sheet growth, the bank had
BRL396 million in additional tier 1 and BRL1.4billion in tier 2
securities that accounted for 49% of total regulatory capital in
March 2023, well above the 12% in December 2020, meaning a sharp
change to the quality of its capital structure.

The stable outlook recognizes BRB's well-established regional
franchise with entrenched operations in the Federal District,
supported by ample access to low-cost and stable deposit base from
public sector employees, government-related entities and judicial
proceedings. The bank's steadily low reliance on
confidence-sensitive funding sources, as illustrated by a market
funds to tangible asset ratio below 10% in spite of bank's
accelerated balance sheet growth over the last 4 years, is a credit
strength to BRB's financial profile.

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

BRB's standalone BCA could face upward pressure if the bank's
business expansion strategy proves to be capable of generating
sustainable earnings, ultimately restoring bank's internal capital
replenishment and loss-absorption capacity.

By contrast, BRB's ratings could be downgraded further if we see
the continued credit growth into new business segments deriving in
a fundamental alteration to bank's traditionally low-risk profile
of its loan book. A sustained decline in profitability potentially
resulting in additional capital erosion would be also negative to
BRB's financial profile.

METHODOLOGY USED

The principal methodology used in these ratings was Banks
Methodology published in July 2021.

BRAZIL: Economy Down by 3% in May, According to FGV GDP Monitor
---------------------------------------------------------------
Richard Mann at Rio Times Online reports that the Getulio Vargas
Foundation's (FGV) GDP Monitor shows a 3% contraction of the
Brazilian economy in May, relative to April, with the adjusted data
taken into account.

Despite the decrease, an interannual analysis revealed 1.8% growth
in May and 3.5% for the quarter ending in May, according to Rio
Times Online.

FGV's economist attributes the downturn primarily to the conclusion
of the primary soybean harvest months, and to lesser extent, slight
declines in the industry and services sectors (-0.1% each), the
report notes.

High interest rates were cited as contributing factors to the slow
economic growth, 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
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DOMINICAN REPUBLIC: Real Estate Activity Down, Acoprovi Says
------------------------------------------------------------
Dominican Today reports that the housing construction sector in the
Dominican Republic is facing significant challenges due to the
fluctuations in inflation that have affected all sectors of the
economy.  The housing sector, in particular, has been strongly
impacted by the rising cost of construction materials, according to
Dominican Today.

According to data from the Central Bank, the housing sector
experienced high levels of inflation in 2022, making it one of the
areas most affected by the economic fluctuations, the report notes.
The Association of Home Builders and Promoters (Acoprovi)
acknowledges the need for continued public-private collaboration to
address one of the main causes of real estate inflation -- the
excessive increase in construction material costs, the report
relays.

Eliseo Cristopher, President of the Dominican Confederation of
Small Construction Entrepreneurs, highlights the cautious approach
of businesses in investing in a situation where material and money
prices are high, the report discloses.  He notes that there has
been a subtle decline in construction material prices, and the
sector hopes that with more liquidity facilities, it can be
reactivated in the coming months, the report says.

Cristopher also points out that after the pandemic, the
construction sector saw a slight revival, the report notes.
However, in 2022 and 2023, it has experienced a decline due to the
impact of high costs and expensive financing, the report relays.
The recent announcement of legal reserve resources is expected to
bring some activation to the sector, but there has still been a
decline in the real estate sector in 2023, the report notes.

In this challenging environment, industry stakeholders are looking
for ways to stabilize the housing construction sector and ensure
its resilience in the face of economic fluctuations and
inflationary pressures, the report says.  The collaboration between
public and private entities is seen as crucial to address the
challenges and promote sustainable growth in the housing
construction industry, 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
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JAMAICA: Spent Close to US$600 Million on Raw Material Imports
--------------------------------------------------------------
RJR News reports that STATIN says Jamaica spent US$586 million on
the import of "Raw Materials/Intermediate Goods" for January to
March this year.

This was 6.2 per cent higher than last year, according to RJR
News.

In the group, the import of 'Industrial Supplies' was up 6.5 per
cent, valued at US$311 million, the report notes.

Higher spending on imports of inorganic chemicals and non-metallic
mineral products supported the increase, the report discloses.

Spending on 'Construction Materials' increased by 14.8 per cent to
US$153.7 million, the report says.

STATIN says this was due to higher imports of iron and steel, as
well as cement, 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.


JAMAICA: Trade Deficit Declined for January to March
----------------------------------------------------
RJR News reports that Jamaica's trade deficit saw a marginal
reduction at the end of March this year, driven mainly by higher
export earnings.

For January to March 2023, the Statistical Institute of Jamaica
(STATIN) says the difference between what is earned from export and
was is spent on imports was US$1.37 billion, according to RJR
News.

That's compared to US$1.45 billion for the similar period last
year, the report notes.

In the three months, the country spent US$1.9 billion on goods
coming in as against $1.79 billion last year, the report relays.

This was mainly driven by a 6.2 per cent increase in the import of
"Raw Materials/Intermediate Goods", 11 per cent increase in
"Consumer Goods" imports and a 15 per cent rise in imports of
"Capital Goods," the report notes.

Total export earnings for January to March 2023 was 54.7 per cent
more than the US$340 million earned last year, the report
discloses.

The US$527 million earned was due to a 64 per cent increase in
"Mineral Fuels" exports, 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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M E X I C O
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PETROLEOS MEXICANOS: Moody's Affirms B1 CFR, Alters Outlook to Neg.
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Moody's Investors Service affirmed at B1 Petroleos Mexicanos'
(PEMEX) corporate family rating and the senior unsecured ratings on
the company's existing notes, as well as the ratings based on
PEMEX's guarantee. Moody's also affirmed PEMEX's Baseline Credit
Assessment (BCA), which reflects its standalone credit strength, at
caa3. At the same time, Moody's changed the outlook on PEMEX's
ratings to negative from stable.

Issuer: Petroleos Mexicanos

Corporate Family Rating, Affirmed B1

Baseline Credit Assessment, Affirmed caa3

Backed Senior Unsecured Medium-Term Note Program, Affirmed (P)B1

Backed Senior Unsecured Regular Bond/Debenture, Affirmed B1

Affirmations:

Issuer: Pemex Project Funding Master Trust

Backed Senior Unsecured Medium-Term Note Program, Affirmed (P)B1

Backed Senior Unsecured Regular Bond/Debenture, Affirmed B1

Outlook Actions:

Issuer: Pemex Project Funding Master Trust

Outlook, Changed To Negative From Stable

Issuer: Petroleos Mexicanos

Outlook, Changed To Negative From Stable

RATINGS RATIONALE

The affirmation of the caa3 BCA reflects Moody's expectations that
PEMEX will continue registering negative free cash flow and the
need for large amounts of external funding given persistent loses
at the company's refining business, the necessity to maintain capex
at least at current levels to sustain production and reserves
stable, high interest expenses and high debt maturities in 2023-25.
The action also takes into account that PEMEX's access to the
capital markets is currently limited given its high intrinsic
credit risk and the lack of measures to mitigate its exposure to
Environmental, Social and Governance (ESG) risks.

Despite current oil prices that are below the budgeted price,
Moody's expects PEMEX's exploration and production (E&P) business
to continue supporting the company's cash generation. PEMEX has
been able to maintain oil and gas production and reserves at
relatively stable levels and achieve production growth through
condensates. Given PEMEX's inability to invest larger sums of
capital in E&P, Moody's estimates that in 2023 and 2024, the
company will only be able to sustain production and reserves at
current levels. However, Moody's also recognizes that current oil
prices will result in high royalties and operating costs at the
refining business.

The caa3 BCA also incorporates PEMEX's weak liquidity and its high
dependence on government support. As of March 31, 2023 the company
had $3.3 billion in cash and no availability under its committed
revolving credit facilities to address debt maturities.

PEMEX's B1 ratings take into consideration Moody's joint default
analysis, which includes the rating agency's assumptions of very
high government support in case of need and very high default
correlation between PEMEX and the Government of Mexico (Baa2
stable), resulting in five notches of uplift from the company's
caa3 BCA. Since 2016, and most importantly and increasingly from
2019 to 2023, the government has supported PEMEX in various ways,
including capital injections, tax reductions, and early redemption
of notes receivable from the government. Moody's assumes that the
government, as promised, will continue to fund PEMEX's cash needs
in 2023 and 2024 and help the company to comply with its debt
amortizations of $4.6 billion in 2023, $10.9 billion in 2024, and
$4.9 billion in 2025, as of March 2023.

The negative outlook on PEMEX's ratings reflects Moody's view that
absent fundamental changes in PEMEX's business strategy the company
is likely to face increased credit risks, given the inability of
the company to increase capital investments and improve its
financial and operating performance as a result of liquidity
constrains.

Moody's assumes that support coming from the Government of Mexico
will continue to be very high in 2023 and 2024. But, as the
company's underlying financial fundamentals are likely to continue
to deteriorate under a scenario that incorporates no changes to the
current business model, Moody's also contemplates that the next
administration - which is set to take office in late 2024 - will
find it increasingly burdensome to replicate what has been observed
in recent years, as prospects of reduced fiscal space in the coming
years would restrict the sovereign's ability to provide support at
levels comparable to those registered throughout the outgoing Lopez
Obrador administration.

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

Although an upgrade is unlikely in the near term, a return to a
stable outlook could result from regained confidence in PEMEX's
ability to implement a strategy to improve its financial and
operating performance in the medium term leading to an improvement
in its liquidity position. Additionally, a credible plan towards
addressing the ESG challenges would also support a return to stable
outlook.

Factors that could lead to a higher BCA and potentially a higher
rating for PEMEX would include its ability to strengthen its
liquidity position and internally fund sufficient capital
reinvestment to fully replace reserves, deliver modest production
growth and generate free cash flow for debt reduction.

Evidence of decline in medium-term production and reserves, or if
operating performance is further eroded per lack of maintenance
investments, whether as a result of policies that actively
undermine growth or because of policy unpredictability to improve
the company's performance, would put downward pressure to the
ratings. Increasing negative free cash flow that cause the debt
trajectory to shift upward, due to higher negative EBITDA from the
downstream business and/or increasing financial costs, could also
lead to a downgrade.

The horizon over which these trends might materialize is uncertain.
While policy action or inaction could lead Moody's to conclude that
these risks will crystallize, a period of 18 months may be needed
to assess the credit consequences of the uncertainties.

Because PEMEX's ratings are highly dependent on support from the
Government of Mexico, a change in Moody's assumptions about
government support and its timeliness could lead to a downgrade of
PEMEX's ratings. A downgrade of Mexico's Baa2 rating would likely
result in a downgrade of PEMEX's ratings.

ENVIRONMENTAL, SOCIAL, AND GOVERNANCE CONSIDERATIONS

PEMEX's ESG Credit Impact Score (CIS-5) indicates that the ratings
are lower than it would have been if ESG risk exposures did not
exist and that the negative impact is more pronounced than for the
issuers scored CIS-4.

PEMEX's E-5 Environmental Issuer Profile Score primarily reflects
exposure to carbon transition risk. Integrated companies with high
exposure to upstream business (exploration and production) will
face increasing pressure over time, particularly oil and gas
producers, as decarbonization efforts and the global transition
towards cleaner energy continues. Additionally, PEMEX faces
heightened risks related to waste and pollution given the company's
gas flaring and increasing number of accidents that have residual
impacts on the environment. Fluid and oil spills can cause
significant damage to the environment, and pollution may harm the
health of the local population; all of this may lead to clean-up
costs, increased expenses related to ongoing monitoring and
regulatory compliance, fines, employee and community health
concerns, delays in production, and reputational and litigation
risk.

The S-5 Social Issuer Profile Score assigned to PEMEX is mainly
driven by risks related to health and safety and demographic and
societal pressures. PEMEX experienced increased accidents at its
operating facilities and infrastructure, resulting in numerous
injuries and fatalities of its employees. Growing social awareness,
rising political pressure over climate change, and technological
progress could accelerate the energy transition, though the pace is
currently limited by the lack of widespread availability of
alternative clean fuels. In addition, investor pressure could lead
to higher capital costs and restricted capital access over time.
PEMEX has exposure to responsible production risks, which is higher
than most integrated oil and gas companies because of the company's
substantial issues with its suppliers regarding timely payment.

PEMEX's G-5 Governance Issuer Profile Score reflects the company's
agressive financial policies. Given that PEMEX is 100% owned by the
Government of Mexico, it faces significant ownership concentration.
PEMEX's board is a 10-person body that approves the company's
business plan. The five independent board members were appointed by
the current government and ratified by the Senate, while the
remaining 5 members are top government officials, including the
energy and finance ministers.

Profile

Founded in 1938, PEMEX is Mexico's national oil company, with fully
integrated operations in oil and gas exploration and production,
refining, distribution and retail marketing, as well as
petrochemicals. PEMEX is also a leading crude oil exporter, around
60% of its crude is exported to various countries, mainly to the US
and Asia. In the twelve months ended March 31, 2023, the company
posted $116.8 billion in revenue, $119.1 billion in assets and
produced an average of 1,969 millions of barrels per day of crude
oil.

The methodologies used in these ratings were Integrated Oil and Gas
published in September 2022.



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

URUGUAY: Intended Trade Deal w/ China Provokes Anger
----------------------------------------------------
globalinsolvency.com, citing The New York Times, reports that word
that Uruguay was seeking a trade deal with China prompted
exultation at El Alamo ranch, a lush expanse of grass punctuated by
cactus and herds of cattle on the eastern plains of Uruguay.

Most of the cattle are destined for buyers in China, where they
confront tariffs of 12 percent -- more than double the rate applied
to meat from Australia, the largest exporter of beef to China,
according to the report.

Ranchers in New Zealand, the second-largest exporter, enjoy
duty-free access to China, the report notes.

"Bring on the trade agreement," said Jasja Kotterman, who runs the
family-owned ranch, the report relates.  "That would level the
playing field for us."

But the enthusiasm pervading this South American country has more
recently given way to resignation that a trade deal with China is
unlikely to happen anytime soon, the report relays. What beckoned
as a fresh opportunity for Uruguay has devolved into a cautionary
tale of the pitfalls of trade policy for small nations grappling
with complex geopolitical realignments.  

Uruguay's president, Luis Lacalle Pou, has staked his economic
legacy on achieving a trade deal with China, the report discloses.


"We have every intention of delivering it," he said last July, as
he announced the beginning of formal negotiations, notes the
report.

China was open to talking about a bilateral deal with Uruguay.  But
Uruguay's aspirations provoked anger and accusation in neighboring
Brazil and Argentina, as well as what was seen as economic
retaliation, the report relays.  

Along with Uruguay and Paraguay, they belong to Mercosur, an
alliance forged more than three decades ago to promote regional
commerce, 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

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