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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, August 22, 2023, Vol. 24, No. 168

                           Headlines



A R G E N T I N A

ARGENTINA: Puts Oil Price at US$56/Barrel to Put Inflation in Check
TELECOM ARGENTINA: Fitch Affirms 'B-/B' LongTerm IDRs


B R A Z I L

AMERICANAS SA: Former Directors Ink Plea Bargain Deals
BANCO ABC: Fitch Affirms 'BB' Foreign Currency IDR, Outlook Stable
BANCO BOCOM: Fitch Affirms 'BB+' LongTerm Foreign Currency IDR
BRAZIL: Congress Considers Offshore Taxation Amid Controversies
GUARA NORTE: Fitch Hikes Secured Notes From BB+, Outlook Stable

MV24 CAPITAL: Fitch Affirms BB+ Rating on Sr. Secured Notes
RIO DE JANEIRO CITY: Fitch Affirms 'B+' IDRs, Outlook Positive
RIO DE JANEIRO STATE: Fitch Affirms 'BB' LongTerm IDRs
RUMO SA: S&P Alters Outlook to Pos., Affirms 'BB-' LT Rating


C H I L E

CHILE: Interest Rate Likely to Come Down to 7.75%-8% by Year-End


E C U A D O R

ECUADOR: Fitch Lowers LongTerm IDR to 'CCC+'


J A M A I C A

JAMAICA: GDP Growth Estimated at 1.5% for April to June Quarter


M E X I C O

CEMEX S.A.B.: S&P Alters Outlook to Positive, Affirms 'BB+' ICR


P U E R T O   R I C O

GAFC SERVICES: Case Summary & Six Unsecured Creditors


V E N E Z U E L A

CITGO PETROLEUM: Venezuela Rejects Auction Process


X X X X X X X X

LATAM: Central Banks Take Lead in Cutting Rates as Inflation Cools

                           - - - - -


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

ARGENTINA: Puts Oil Price at US$56/Barrel to Put Inflation in Check
-------------------------------------------------------------------
Jonathan Gilbert at Bloomberg News reports that Argentina has fixed
the price of oil received by drillers at US$56, far below
international levels, as it scrambles to stop inflation getting
further out of control after the currency devaluation, according to
two people familiar with the matter.

Crude drillers in burgeoning shale patch Vaca Muerta will get US$56
a barrel until October 31, according to Bloomberg News.  Argentine
oil prices were already decoupled from global markets, but the
decision means shale companies will receive 11 percent less than
the US$63 at which local light crude was trading in the second
quarter, the report notes.  The new price is also a big deviation
from Brent, which is hovering at US$84, the report relays.

Producers of heavier Escalante crude from other regions will get a
US$5 discount on current prices, according to one of the people,
the report discloses.

State-run YPF SA, which has the single biggest share of Vaca Muerta
output, slumped more than three percent in New York trading, before
paring some of the losses, the report says.

A spokesman for Economy Minister Sergio Massa declined to comment
on the new barrel price, pointing only to the minister's public
remarks freezing gasoline and diesel prices through October.

Argentina has frozen fuel prices at the pump after refiners,
including market leader YPF, hiked by 12.5 percent in the wake of a
slump in the peso, the report notes.

Massa, the ruling party's candidate in October's presidential
election, is trying to stop the full weight of the devaluation from
immediately passing through to consumer prices across the board,
the report discloses.  Inflation in July was already running at 113
percent, the report says.

Oil producers are being made, in part, to bear the cost of capping
fuel prices, the report relays.  That could be bad news for
activity in Vaca Muerta, which Argentina wants to develop as
quickly as possible to spur exports and bring in much-needed export
dollars, the report notes.

But interventions like this one have held back the region, whose
crude production of roughly 300,000 barrels a day pales in
comparison to rival shale formations in the US, the report
discloses.

Massa promised drillers some benefits in return -- the deferral of
export taxes, quicker access to hard currency and, potentially,
relief from some import taxes, one person said, the report notes.

The decision recalls a controversial policy during the last
presidential campaign in 2019, when the peso weakened and
then-leader Mauricio Macri moved to control fuel prices, the report
relays.

Javier Milei, the libertarian front-runner in this election race,
promises to free up Argentine oil markets completely, 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.

S&P Global Ratings, on June 13, 2023, raised its local currency
sovereign credit ratings on Argentina to 'CCC-/C' from 'SD/SD' and
its national scale rating to 'raCCC+' from 'SD'. S&P also affirmed
its 'CCC-/C' foreign currency sovereign credit ratings on
Argentina. The outlook on the long-term ratings is negative. S&P's
'CCC-' transfer and convertibility assessment is unchanged. None
of
its rated bond issues are affected.

S&P said the negative outlook  on the long-term ratings is based
on
the risks surrounding pronounced  economic imbalances and policy
uncertainties before and after the 2023 national elections.
Divisions within the government coalition, and infighting among
the
opposition, constrain the sovereign's ability to implement timely
changes in economic policy.

Fitch Ratings also upgraded on June 13, 2023, Argentina's
Long-Term Foreign Currency (FC) Issuer Default Rating (IDR) to
'CC' from 'C' and affirmed the Long-Term Local Currency (LC) IDR
at 'CCC-'. Fitch typically does not assign Outlooks to sovereigns
with a rating of 'CCC+' or below.

The upgrade of the FC IDR reflects that Fitch no longer deems a
default-like process to have begun, as the authorities have not
signaled a clear intention to follow through with an intra-public
debt swap announced in March. The new 'CC' rating signals a
default
event of some sort appears probable in the coming years,
regardless
of the outcome of upcoming elections. The affirmation of the LC
IDR
at 'CCC-' follows the peso debt swap in June that Fitch did not
deem to be a "distressed debt exchange" (DDE).

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.

TELECOM ARGENTINA: Fitch Affirms 'B-/B' LongTerm IDRs
-----------------------------------------------------
Fitch Ratings has affirmed Telecom Argentina S.A.'s ratings,
including its Long-Term Foreign Currency (FC) Issuer Default Rating
(IDR) at 'B-', Long-Term Local Currency (LC) IDR at 'B', and
instrument ratings at 'B'/'RR3'. The Rating Outlook is Stable.

The ratings reflect Fitch's expectation that the company will be
able to continue passing along the effects of inflation as
Argentinian courts continue to extend an injunction against price
freezes. The majority of the company's operations and assets are in
Argentina, an operating environment (OE) characterized by
macroeconomic instability. The company has historically
demonstrated an ability to pass through the majority of inflation
effects to consumers, somewhat blunting macroeconomic concerns.

The company benefits from a robust financial and operational
profile, underpinned by its operational cash flow generation,
relatively conservative capital structure, and strong competitive
position in both fixed and mobile services.

KEY RATING DRIVERS

Country Ceiling Limits Foreign Currency Ratings: Telecom
Argentina's Long-Term Foreign Currency IDR is constrained by
Argentina's 'B-' Country Ceiling. Fitch believes the company's
default would most likely be driven by transfer and convertibility
restrictions, not by a material deterioration of the company's
operating profile.

Strong Operator, Weak Operating Environment: Telecom Argentina is
the country's leading integrated operator, with strong competitive
positions in both fixed and mobile services. The company's strong
product offerings and brand recognition support its robust cash
flow. The company has historically weathered the turbulent
macroeconomic environment by increasing service prices to offset
rising operating expenses, enabling it to maintain strong credit
metrics.

Courts Maintain Price-Setting Independence: In 2021, Argentine
courts ruled in favor of Telecom Argentina and against Ente
Nacional de Comunicaciones (ENACOM) regarding the company's ability
to raise prices with inflation, following government efforts to
freeze or control telecom service prices. The courts have since
continued to extend the injunction against price freezes, most
recently in March 2023, for an additional six months.

Telecom Argentina has continued to raise prices quarterly, albeit
at a rate below prevailing inflation over the last two years given
higher than anticipated realized inflation and some competitive
pressures. Since 2H22, the company has successfully increased the
frequency of raising its prices to more closely match inflation and
has been implementing price increases on a monthly basis since
March 2023. Fitch expects the company to continue increasing prices
as necessary to pass through the majority of inflation. This should
allow the company to maintain a healthy EBITDA margin near 30% over
the rating horizon.

Financial Profile in Line with IG Peers: Telecom Argentina's
financial structure ranks among the strongest of Fitch-rated
telecom companies in the region, due to the company's conservative
capital structure and positive cash flow. Fitch forecasts net
debt/EBITDA to range between 2.1x and 2.4x over the rating horizon,
in line with stronger investment-grade (IG) operators throughout
the region. Fitch estimates the company will refinance upcoming
maturities over the medium term as necessary and maintain debt
around USD2.2 billion.

DERIVATION SUMMARY

The speculative ratings of Telecom Argentina compare with those of
other Argentine issuers YPF S.A. (CCC-) and Arcor S.A.I.C.
(B/Stable) that have solid business and capital structures but
whose ratings are restricted by the difficulties of operating in
Argentina amid high inflation and government imposed capital
controls. Arcor's ratings are higher than those of YPF and Telecom
Argentina due to its operations in Brazil and the cash it holds
abroad in its foreign subsidiaries.

The company's business and financial profile are in line, or
superior to, diversified IG telecom operators including Telefonica
Moviles Chile S.A. (BBB/Stable), UNE EPM Telecomunicaciones S.A.
(BBB-/Stable), and Colombia Telecomunicaciones (BBB-/Negative).
Telecom Argentina has either a more conservative capital structure,
or a stronger market position, or both. Ultimately, both the FC and
LC IDR will continue to be driven by the difficulties of the
Argentine OE.

KEY ASSUMPTIONS

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

-- The company is able to pass on the majority of inflation to
consumers each year;

-- Net leverage around 2.0x-2.4x;

-- EBITDA margins below 30%;

-- Capital intensity around 17%-18%.

RATING SENSITIVITIES

Factors that Could, Individually or Collectively, Lead to Positive
Rating Action/Upgrade

-- Telecom Argentina's FC IDR is bound by Argentina's 'B-' Country
Ceiling; therefore, an upgrade of the Argentine sovereign rating
and concurrent upgrade of the Argentine Country Ceiling would
result in an upgrade;

-- Telecom Argentina's LC IDR is constrained by the difficult
Argentine OE; therefore, a decrease in macroeconomic turmoil could
result in an upgrade.

Factors that Could, Individually or Collectively, Lead to Negative
Rating Action/Downgrade

-- Telecom Argentina's FC IDR is bound by Argentina's 'B-' Country
Ceiling; therefore, a downgrade of the Argentine sovereign rating
and concurrent downgrade of the sovereign's Country Ceiling would
result in a downgrade;

-- A material increase in regulatory interference that inhibits
the company's ability to pass through inflationary effects and
devaluation could result in a downgrade.

LIQUIDITY AND DEBT STRUCTURE

Adequate Liquidity: Telecom Argentina has adequate liquidity given
near-term maturities and ample ability to borrow in local capital
markets, with cash of ARS80 billion against short-term debt of
ARS234 billion as of June 2023. The majority of Telecom Argentina's
cash and debt are U.S. dollar denominated. In June 2023, the
company issued a new dollar-linked local issuance in the amount of
USD87 million, and in July 2023, the company issued another
dollar-linked local issuance in the amount of USD180 million. Both
were issued at a premium to par, and the proceeds were used in part
to repay the scheduled amortization of the principal portion of the
Class 5 2025 notes on Aug. 7.

The company has some operations in Paraguay and Uruguay, but Fitch
does not consider these substantial enough to circumvent the
Argentine Country Ceiling (B-). While Telecom Argentina's
refinancing risk is manageable, the risk of Argentine capital
controls will continue to constrain the company's ratings. Telecom
Argentina's liquidity and financial flexibility are supported by
the company's robust cash flow generation, which Fitch expects to
cover capex and the company has a long history of refinancing and
rolling over bank debt and international agency (e.g. IFC) loans.
As such, Fitch expects the company to maintain debt of around
USD2.2 billion over the coming years. The company's ability to pass
on inflation to consumers has been critical for their ability to
maintain cash flow generation.

ISSUER PROFILE

Telecom Argentina S.A. is the largest integrated telecommunications
services provider in Argentina, offering broadband, pay TV and
fixed and mobile telecommunications services throughout the
country. The company also has smaller operations in Paraguay and
Uruguay.

ESG CONSIDERATIONS

The highest level of ESG credit relevance is a score of '3', unless
otherwise disclosed in this section. A score of '3' 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. Fitch's ESG Relevance Scores are not
inputs in the rating process; they are an observation on the
relevance and materiality of ESG factors in the rating decision.




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

AMERICANAS SA: Former Directors Ink Plea Bargain Deals
------------------------------------------------------
Daniel Cancel of Bloomberg News reports that two former directors
of embattled Brazilian retailer Americanas SA are collaborating
with authorities and have provided "explosive" revelations about
their former colleagues in return for leniency, O Globo columnist
Lauro Jardim reported.

Flavia Carneiro, who worked in the controller department, and
Marcelo Nunes of the finance group have signed plea bargain
agreements with the Public Prosecutor's Office in Rio de Janeiro,
Jardim said, without saying how he obtained the information.  The
two former executives were sidelined in early February after the
company entered bankruptcy protection.

                     About Americanas SA

Americanas was one of the largest diversified retail chains in
Brazil, with a wide platform of physical stores, robust e-commerce,
fintech, and has just entered into the niche food retail.  It is
listed on B3, being indirectly controlled by billionaire Jorge
Paulo Lemann, Carlos Alberto Sicupira and Marcel Telles.

The retailer nosedived in January 2023 after becoming mired in an
accounting scandal.  The firm filed for bankruptcy at a court in
Rio de Janeiro on Jan. 19, 2023.

Americanas sought protection under Chapter 15 of the U.S.
Bankruptcy Code (Bankr. S.D.N.Y. Case No. 23-10092) on Jan. 25,
2023.  White & Case LLP, led by John K. Cunningham, is the U.S.
counsel.

BANCO ABC: Fitch Affirms 'BB' Foreign Currency IDR, Outlook Stable
------------------------------------------------------------------
Fitch Ratings has affirmed Banco ABC Brasil S.A.'s (ABCBr)
Long-Term (LT) Foreign Currency (FC) Issuer Default Rating (IDR) at
'BB', LT Local Currency (LC) IDR at 'BB' and LT National Rating at
'AAA(bra)'.

The Rating Outlook is Stable.

In addition, Fitch has affirmed ABCBr's Viability Rating (VR) at
'bb-' and the Shareholder Support Rating (SSR) at 'bb'. A full list
of rating actions is below.

KEY RATING DRIVERS

IDRs, SSR and NATIONAL RATINGS

Moderate Probability of Support: ABCBr's IDRs, National Ratings and
SSR reflect a moderate probability of support from its parent, Arab
Banking Corporation (ABC; Long-Term Foreign Currency IDR BB+/Stable
and Viability Rating bb+). ABCBr's LT FC IDR is rated one notch
below that of ABC's, reflecting its parent's ability and propensity
to provide extraordinary support if needed.

Strong Role in ABC Group: The parent's propensity to support is
also highly influenced by ABCBr's role in the ABC group due to
strong synergies with the parent and the subsidiary's contribution
to revenue diversification for the parent as the group's other
activities focus on the MENA region. ABCBr currently provides more
than half of the group's revenues; as such it is Fitch's view that
ABCBr's activities in Brazil are strategically important for the
parent.

Large Size Relative to Parent: ABC owns nearly 64% of ABCBr and
they share a similar brand, thus the propensity to support is
enhanced by reputational risk as, in an unlikely event of a default
at the subsidiary level, there could by a high reputational risk
for the parent. However, the relatively large size of the
subsidiary, which currently represents about 32% of the parent's
assets, could constrain the parent's ability to support its
subsidiary.

VIABILITY RATING

Intrinsic Credit Fundamentals: ABCBr's assigned 'bb-' VR is in line
with its implied VR based on the bank's intrinsic credit
fundamentals. The bank's credit portfolio has seen significant
growth in the past few years while maintaining a conservative risk
appetite toward domestic corporates, resulting in strong asset
quality metrics. The bank's capitalization is adequate for its risk
profile, and benefits from ordinary support from ABC. Funding and
liquidity metrics are also at comfortable levels, and profitability
has become much more robust in recent quarters.

Solid, Growing Business Profile: ABCBr is a medium-sized commercial
bank, focused primarily on corporate lending and services,
investment banking and middle market lending and services. The
bank's asset market share is less than one percent on a national
basis, but Fitch's assessment of ABCBR's business profile
highlights the bank's improved franchise in recent years supported
by a well-executed strategy to diversify its sources of revenues,
lower costs and lower levels of concentrations in terms of risk and
funding. These have translated into incremental improvements in
revenue generation and asset growth over the past four years
despite a more challenging and highly competitive operating
environment.

Conservative Risk Profile: ABCBr's credit standards, in general,
are conservative. This is due to the bank's prudent stance and
adequate risk-based pricing. Credit risk is the main source of
asset quality risks for ABCBr. Lending tickets are typically
targeted toward middle-market and large corporates with good risk
profiles in the domestic market. The market risk is low and
well-controlled.

Adequate Asset Quality: ABCBr has maintained adequate asset quality
metrics over many years that compare well with its domestic peers.
At June 30, 2023, the bank's loans past-due over 90 days/gross
loans ratio increase to 1.2% from 0.4% at June 2022, explained due
to growing the middle market portfolio and the effect of an
isolated case in the C&IB segment, currently under Chapter 11. The
core impaired loan metric (Loans classified D-H) was 6.7% at June
2023 and 4.9% at end-2022, with a 4YE average of 4.4%.

Given the conservative growth that Fitch expects for ABCBr's credit
portfolio for the end of 2023, a deterioration in asset quality
ratios for the next years is not expected, even with a greater
participation in the middle market segment.

Improving Profitability: ABCBr's profitability metrics continued to
improve through YE22 and would have been better if not for its very
conservative loan loss provisioning. The bank's profitability
benefited from improved margins, increases in fee income, and much
lower credit costs since 2021, bringing the four-year average to
1.2% by YE22. However, the bank's operating profit/RWAs ratio
decreased to 1.6% at 1H23 from 2.2% at YE22 due to increased
provisioning expenses related to one impaired loan.

Adequate Capitalization: ABCBr's capital ratios have remained
fairly stable over the past few years due in part to modest profit
generation and conservative credit portfolio growth, a trend Fitch
expects to continue over the medium term. At June 30, 2023, the
bank's CET1 ratio declined slightly to 11.9% from 12.3% at YE 2021,
due mostly to loan growth. However, the bank's total regulatory
capital ratio remained stable at 15%. The bank's ratios well exceed
the Central Bank regulatory minimum total capital requirement and
is in line with Basel III rules.

Stable Funding: The bank continues to focus on ensuring a stable
liquidity position through conservative asset liability management
policies to mitigate gaps through hedging and funding
diversification. Strategies include the sourcing of longer-term
funding from both local and international providers. The bank's
liquidity buffers are adequate given limited forthcoming
maturities. Fitch does not expect any change to the bank's funding
and liquidity strategy over the medium term.

RATING SENSITIVITIES

Factors that Could, Individually or Collectively, Lead to Negative
Rating Action/Downgrade
IDRs AND SSR

-- A negative change in Fitch's assessment of ABC's willingness or
ability (due to the material size of the subsidiary) to support
ABCBr;

-- A negative rating action on the parent bank, ABC, though a
downgrade of the IDRs would be limited by the level of the bank's
VR.

VR

-- A significant deterioration of ABCBr's asset quality that
results in credit costs that severely limit its profitability
(operating profit to RWA ratio consistently below 1.0%) and ability
to grow its capital;

-- A sustained decline in ABCBr's CET1 ratio below 10%.

NATIONAL RATINGS

-- Unfavorable changes in ABCBr's credit profile relative to its
Brazilian peers could result in a reduction in its National
Ratings.

Factors that Could, Individually or Collectively, Lead to Positive
Rating Action/Upgrade

IDR AND SSR

-- A positive rating action on ABCBr's parent would result in a
similar action on the bank's FC LT IDR and SSR. However, in the
event of an upgrade of the parent by more than one notch, the
bank's ratings would be constrained by the country ceiling;

VR

-- The VR could be upgraded if ABCBr sustains an improvement in
its CET1 ratio above 12% and operating results/RWA ratio above 2%,
while maintaining its current asset quality metrics and reducing
loan concentration.

NATIONAL RATINGS

-- The National Ratings are currently at the top of the National
Rating Scale and thus further upgrades are not possible.

VR ADJUSTMENTS

The Business Profile score of 'bb-' has been assigned above the
implied 'b' Business Profile Score due to the following adjustment
reason: Group benefits and risks (positive).

The Capitalization & Leverage score of 'bb-' has been assigned
above the implied 'b' Capitalization & Leverage Score due to the
following adjustment reason: Capital flexibility and ordinary
support (positive).

The Funding & Liquidity score of 'bb-' has been assigned above the
implied 'b' Funding & Liquidity Score due to the following
adjustment reason: Non-deposit funding (positive).

PUBLIC RATINGS WITH CREDIT LINKAGE TO OTHER RATINGS

ABCBr's IDRs and National Ratings are driven by support from the
Arab Banking Corporation (ABC; LT FC IDR BB+/Stable and VR bb+).

ESG CONSIDERATIONS

The highest level of ESG credit relevance is a score of '3', unless
otherwise disclosed in this section. A score of '3' 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. Fitch's ESG Relevance Scores are not
inputs in the rating process; they are an observation on the
relevance and materiality of ESG factors in the rating decision.

ENTITY / DEBT              RATING               PRIOR  
-------------              ------               -----
Banco ABC Brasil S.A.

         LT IDR               BB       Affirmed   BB
         ST IDR               B        Affirmed   B
         LC LT IDR            BB       Affirmed   BB
         LC ST IDR            B        Affirmed   B
         Natl LT              AAA(bra) Affirmed   AAA(bra)
         Natl ST              F1+(bra) Affirmed   F1+(bra)
         Viability            bb-      Affirmed   bb-
         Shareholder Support  bb       Affirmed   bb


BANCO BOCOM: Fitch Affirms 'BB+' LongTerm Foreign Currency IDR
--------------------------------------------------------------
Fitch Ratings has affirmed Banco BOCOM BBM S.A.'s (BOCOM BBM)
Long-Term (LT) Foreign Currency (FC) Issuer Default Rating (IDR) at
'BB+', LT Local Currency (LC) IDR at 'BBB-' and LT National Rating
at 'AAA(bra)'. The Rating Outlook on the long-term ratings is
Stable.

KEY RATING DRIVERS

IDRs, NATIONAL RATINGS AND SHAREHOLDER SUPPORT RATING

Moderate Probability of Support: BOCOM BBM's IDRs, National Ratings
and Shareholder Support Rating (SSR) reflect support from its
ultimate parent, Bank of Communications Co, Ltd. (BOCOM; LT FC IDR
A/Stable and Viability Rating [VR] bb+), a Chinese bank.

BOCOM BBM's LT FC IDR is rated five notches below that of BOCOM's
and is constrained by Brazil's 'BB+' Country Ceiling, while its LT
LC IDR is currently two notches above Brazil's LC sovereign rating
(BB/Stable) as we do not usually assign a bank's LC IDR more than
one notch above its FC IDR. This reflects Fitch's view that BOCOM's
ability to provide support to its subsidiary's senior creditors is
linked to Brazilian sovereign risk, and might be reduced in case of
extreme sovereign stress, despite the group's strategic commitment
to the country.

Strategically Important: The support assessment incorporates
Fitch's view that BOCOM BBM's activities in Brazil are
strategically important for the parent. This is demonstrated by the
group's efforts to deepen commercial activity with ordinary support
in terms of funding and capital and BOCOM BBM's efforts to increase
synergies and operational integration within its parent in recent
years.

BOCOM owns 80% of BOCOM BBM and the parent's IDRs are driven by the
Chinese state's ownership in the bank and its systemic importance.
Under Fitch's assessment, Chinese state support to BOCOM would flow
through to BOCOM BBM, should the need arise. BOCOM has a strong
ability to provide support, if needed, as BOCOM BBM's modest size
relative to the overall group is unlikely to represent a
constraint.

VIABILITY RATING

Strengthened Business Profile: BOCOM BBM is a medium-sized
commercial bank focused primarily on corporate lending. The bank's
market share by total loans is small on a national basis, but
Fitch's assessment of BOCOM BBM's business profile highlights the
bank's improved banking franchise in recent years that has
translated into incremental revenue generation over the past four
years despite a more challenging and highly competitive operating
environment. The bank's management team has successfully executed
its business-expansion plans on the bank's core corporate lending
franchise, while strengthening fee-based business units to support
revenue diversification. Intra-group benefits from being part of
the Chinese BOCOM group supported this plan.

Conservative Risk Profile: BOCOM BBM's credit standards, in
general, are conservative. This is due to the bank's prudent stance
and adequate risk-based pricing. Credit risk is the main source of
asset quality risks for BOCOM BBM. The bank's expanded credit risk,
including corporate debt and off-balance guarantees, amounted to
BRL13.8 billion at the end of March 2023 (67% of assets). Lending
tickets are typically targeted toward corporates and large
corporates with good risk profiles in the domestic market and
sectorial distribution privileges sectors that have records of
resilience across cycles and typically outperform the domestic
average.

Resilient Asset Quality: BOCOM BBM has maintained better asset
quality in recent years than domestic peers due to its conservative
risk profile, which provides space to absorb expected deterioration
from higher interest rates and Brazil's still low economic growth.
At YE 2022, its impaired loan ratio (which includes impaired loans
from D-H under local resolution) was 0.8%, and the four YE average
was 0.7%.

Strong Profitability: Core earnings have steadily strengthened in
recent years helped by growing business volumes, improving revenue
mix and cost optimization measures. BOCOM BBM's operating
profit-to-RWAs ratio was 3.3% in FY22 and averaged 3.0% over the
past four years, supported by sound revenue performance. Fitch
expectation is that the bank will keep its profitability ratios
stable for the next two years.

Adequate Capitalization: Capitalization levels are adequate
considering BOCOM BBM's credit risk profile, well managed market
risks and ordinary support from the parent. BOCOM BBM's CET1 ratio
of 8.4%, Tier 1 ratio of 10.1% and Regulatory Capital ratio of
14.7% at the end of 2022 are below its peer average and reflect its
parent, BOCOM, largely managing the subsidiary's capitalization on
a need-cost optimization basis. Fitch expects capitalization to
remain below its peers and ordinary support to remain available for
business growth, should it be needed.

Stable Funding: Fitch's assessment of BOCOM BBM's funding and
liquidity profile incorporates the benefits it derives from being
part of BOCOM. Intragroup funding accounted for 34% of BOCOM BBM's
funding base at the end of March 2023. BOCOM BBM also funds its
loan book with a mix of customer deposits and deposit like
instruments. The bank's liquidity buffers are adequate given
limited forthcoming maturities.

RATING SENSITIVITIES

Factors that Could, Individually or Collectively, Lead to Negative
Rating Action/Downgrade

BOCOM BBM's IDRs, National Ratings and SSR could be downgraded if
BOCOM's IDRs, from which they are notched, are downgraded by
multiple-notches. However, BOCOM BBM's LT IDR would not be
downgraded to a level below that of its VR.

The VR could be downgraded if the recovery of the Brazilian economy
suffers a severe setback causing a material weakening of the
operating environment. In this scenario, pressure could stem from
rapidly rising private-sector indebtedness and permanent erosion of
business prospects.

The VR could also be downgraded if contrary to expectations, BOCOM
BBM's impaired loan ratio deteriorates durably above 5% that
results in deterioration of its earnings.

Factors that Could, Individually or Collectively, Lead to Positive
Rating Action/Upgrade

BOCOM'S IDRs could be upgraded if the rating on the Brazilian
sovereign is also upgraded, provided that BOCOM BBM remains
strategically important to BOCOM.

The VR could be upgraded if BOCOM BBM's can sustain a CET1 ratio
above 12% and an increase in the operating profit/RWAs ratio to
above 4%, while maintaining its current core asset quality metric
and reducing loan concentration.

OTHER DEBT AND ISSUER RATINGS: KEY RATING DRIVERS

Ex-Government Support Ratings

BOCOM BBM's FC and LC LT IDR (xgs) of 'BB(xgs)' is one notch below
its parents' LT IDR (xgs) of 'BB+(xgs)'.The Short-Term IDR (xgs) of
'B(xgs)' is mapped from its LT IDR (xgs). The ex-government support
ratings exclude assumptions of extraordinary government support
from the underlying ratings.

OTHER DEBT AND ISSUER RATINGS: RATING SENSITIVITIES

Ex-Government Support Ratings

BOCOM BBM's IDRs (xgs) are sensitive to changes in BOCOM´s IDRs
(xgs).

VR ADJUSTMENTS

The Business Profile 'bb-' has been assigned above the implied 'b'
Business Profile Score due to the following adjustment reason:
Group benefits and risks (positive).

The Asset Quality 'bb' gas been assigned below the implied 'bbb'
Asset Quality Score due to the following adjustment reason:
Concentrations (negative).

The Funding & Liquidity of 'bb-' has been assigned above the
implied 'b' Funding & Liquidity Score due to the following
adjustment reason: Non-deposit funding (positive).

ESG CONSIDERATIONS

The highest level of ESG credit relevance is a score of '3', unless
otherwise disclosed in this section. A score of '3' 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. Fitch's ESG Relevance Scores are not
inputs in the rating process; they are an observation on the
relevance and materiality of ESG factors in the rating decision.

ENTITY / DEBT             RATING              PRIOR  
-------------             ------              -----
Banco BOCOM BBM S.A.

      LT IDR                BB+      Affirmed  BB+
      ST IDR                B        Affirmed  B
      LC LT IDR             BBB-     Affirmed  BBB-
      LC ST IDR             F3       Affirmed  F3
      Natl LT               AAA(bra) Affirmed  AAA(bra)
      Natl ST               F1+(bra) Affirmed  F1+(bra)
      Viability             bb-      Affirmed  bb-
      LT IDR (xgs)          BB(xgs)  Affirmed  BB(xgs)
      Shareholder Support   bb+      Affirmed  bb+
      ST IDR (xgs)          B(xgs)   Affirmed  B(xgs)
      LC LT IDR (xgs)       BB(xgs)  Affirmed  BB(xgs)
      LC ST IDR (xgs)       B(xgs)   Affirmed  B(xgs)

BRAZIL: Congress Considers Offshore Taxation Amid Controversies
---------------------------------------------------------------
Richard Mann at Rio Times Online reports that the Brazilian
Congress is debating changes related to taxing offshore accounts.

This has been proposed as a countermeasure for potential revenue
losses from raising the personal income tax exemption limit, a
campaign pledge by President Luiz Inacio Lula da Silva, according
to Rio Times Online.

Proposed modifications to the current salary adjustment draft are
being perceived as extraneous to the initial intention of the
draft, the report notes.

Faced with these challenges in Congress, there is deliberation to
reintroduce this issue as a separate bill, the report relays.

The salary draft is set to expire on August 28, and discussions on
it are scheduled soon, 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.

Fitch Ratings upgraded on July 26, 2023, Brazil's Long-Term
Foreign-Currency Issuer Default Rating (IDR) to 'BB', from 'BB-',
with a Stable Outlook. The upgrade reflects better-than-expected
macroeconomic and fiscal performance amid successive shocks in
recent years, proactive policies and reforms that have supported
this, and Fitch's expectation that the new government will work
toward further improvements.
 
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.
 
DBRS Inc., on  August 15, 2023, upgraded Brazil's Long-Term
Foreign and Local Currency - Issuer Ratings to BB from BB (low).
At the same time, DBRS Morningstar confirmed Brazil's
Short-term Foreign and Local Currency - Issuer Ratings at R-4.

GUARA NORTE: Fitch Hikes Secured Notes From BB+, Outlook Stable
---------------------------------------------------------------
Fitch Ratings has upgraded the senior secured notes issued by Guara
Norte S.a r.l. to 'BBB-' from 'BB+'. The Rating Outlook remains
stable and reflects the outlook on the sovereign. The upgrade
reflects the upgrade in credit quality of the sovereign and state
owned oil company, Petrobras, and the ability for the transaction
cash flows to support investment grade credit metrics.

The upgrade on the sovereign reflects Brazil's improving
macroeconomic environment and fiscal performance which exceeded
expectations. The notes are collateralized by a charter agreement
and the related proceeds from the operations of the Cidade de
Ilhabela (CdI) floating-production storage and offloading (FPSO)
vessel.

TRANSACTION SUMMARY

The senior secured notes issued by Guara Norte S.a.r.l. are backed
by the flows related to the charter agreement initially signed with
Guara B.V. for the use of the FPSO Cidade de Ilhabela (CdI) for a
term of 20 years. The BM-S-9 consortium is comprised of Petrobras,
with 45% share, and Shell Brasil (wholly owned subsidiary of Royal
Dutch Shell plc) with 30% share, and Repsol YPF Brazil S.A. (a
joint venture between Repsol and Sinopec) with 25% share.

The vessel is operated by a Brazilian subsidiary of SBM Offshore,
through a services agreement. The CdI FPSO began operating in 2014
at the Sapinhoa oil field in the pre-salt layer of the Santos Basin
off the coast of Brazil. Fitch's rating addresses the timely
payment of interest and principal on a semiannual basis until the
legal final maturity in June 2034.

KEY RATING DRIVERS

CONSORTIUM OBLIGATION STRENGTH EXCEEDS PETROBRAS'

The offtaking consortium is backed by Petrobras (45% share), the
Shell subsidiary Shell Brasil Petroleo Ltda (30%) and the
Repsol/Sinopec joint venture (25%); all the pro rata obligations
are guaranteed by affiliate companies (for the Petrobras group,
Petrobras International Braspetro B.V.).

The offtakers' obligations related to the 20-year charter and joint
operating agreements are several, but not joint, as each party
guarantees that it will make its portion of the payment. However,
these payments can be seen as joint and several as the underlying
concession states that each party must support all the obligations
related to ongoing production. Fitch expects the payments to
continue given the high economic incentives to maintain the
concession. Therefore, the rating of the lowest-rated member,
Petrobras (BB/Stable), does not strictly limit the notes' rating.

SOVEREIGN EVENT AND T&C RISK SUPPORTS UPLIFT

The transaction's reserve of six months of debt service (through
letters of credit provided by Mizuho Bank Ltd. and MUFG Bank Ltd.,
both rated 'A-'/Stable/'F1') and the offshore payment obligations
offer sufficient protection to mitigate potential transfer and
convertibility (T&C) restrictions and exceed Brazil's Country
Ceiling of 'BB+' by one notch. However, the event risk linked to
the operating environment, with Petrobras being a state-owned
enterprise, subject the transaction to potential political
interference, limits the uplift over Brazil's 'BB' Long-Term Issuer
Default Rating (IDR) and Stable Outlook to two notches and,
therefore, to 'BBB-'/Stable.

EXPERIENCED OPERATOR MITIGATES RISK

The operator, SBM Offshore, is a global player in building and
managing FPSOs, a concentrated industry. Fitch views SBM's
experience as the operator as a strength, given the past
performance their overall fleet and other rated transactions. CdI's
record shows an excellent historical of commercial uptime, at 99.1%
from September 2020 to June 2023 and 99.3% uptime from 2014 - June
2023. Due to the complexities of replacing SBM as the operator,
SBM's credit quality remains an important rating driver; however,
Fitch believes SBMs credit metrics are in line with investment
grade metrics.

STRONG FINANCIAL METRICS

Fitch's cash flow analysis has assessed the repayment of the fully
amortizing debt, assuming timely interest and principal payments
according to a nondeferrable sculpted amortization schedule and a
cash trapping condition should the debt service coverage ratio
(DSCR) fall below 1.15x. In Fitch's base case, the DSCRs are
expected to be approximately 1.85x-2.09x through the life of the
transaction, and stress case DSCRs are expected to remain above
trigger levels.

The key rating drivers listed in the applicable sector criteria,
but not mentioned above, are not material to this rating action.

RATING SENSITIVITIES

Factors that Could, Individually or Collectively, Lead to Negative
Rating Action/Downgrade

As described in Key Rating Drivers, the transaction's rating is
linked to Brazil's IDR, with an uplift of two notches. Therefore, a
sovereign downgrade would trigger a downgrade of the notes.

Considering the credit strength of the other offtakers, Fitch
assigned a rating in excess of Petrobras' by two notches, and this
remains possible as long as the other offtakers remain rated above
the notes. Given the current ratings of the other offtakers, Fitch
believes this risk is remote.

The other counterparty that could constrain the rating is the
operator, the SBM group, which Fitch believes has a better credit
quality than the senior notes.

Finally, the cash flow analysis results in very robust output,
consistent with ratings in the 'BBB' category. DSCR and ultimate
debt repayment depend on uptime, maintenance days, opex and CPI -
poor performance amongst these variables could drive ratings down
under the stresses Fitch applies.

Factors that Could, Individually or Collectively, Lead to Positive
Rating Action/Upgrade

The rating is constrained by the operating environment and
counterparty issues. An upgrade of Brazil (which would likely also
result in an upgrade of Petrobras) may result in an upgrade.

ESG CONSIDERATIONS

The highest level of ESG credit relevance is a score of '3', unless
otherwise disclosed in this section. A score of '3' 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. Fitch's ESG Relevance Scores are not
inputs in the rating process; they are an observation on the
relevance and materiality of ESG factors in the rating decision.


MV24 CAPITAL: Fitch Affirms BB+ Rating on Sr. Secured Notes
-----------------------------------------------------------
Fitch Ratings has affirmed the rating on the senior secured notes
issued by MV24 Capital B.V. at 'BB+'. The Rating Outlook remains
Stable and reflects the Outlook on the sovereign.

The affirmation is based on Fitch's view that the partners have a
high incentive to meet their obligations under the concession
agreement. The operating environment in Brazil continues to limit
the uplift over Brazil's IDR of 'BB'/Stable by a maximum of two
notches. According to Fitch's Structured Finance Country Risk
Criteria, this limit for Brazil can be up to three notches above
the IDR; however, Fitch has tempered this to two notches due to
Petrobras' status of being a state-owned enterprise and the
potentially higher exposure to political interference. This is
further limited to one notch due to transaction performance metrics
and debt service coverage ratios (DSCRs), which are lower than
expected since closing and are expected to only support
'BB'-category ratings at this time.

TRANSACTION SUMMARY

The senior secured notes issued by MV24 Capital B.V. are backed by
the flows related to the charter agreement initially signed with
Tupi B.V. for the use of the FPSO Cidade de Mangaratiba MV24 for a
term of 20 years. The BM-S-11 consortium is comprised of Petrobras,
with a 65% share, and Shell Brasil (wholly owned subsidiary of
Royal Dutch Shell plc) with a 25% share, and Petrogral Brazil S.A.
(a joint venture [JV] between Galp Energia and Sinopec) with a 10%
share.

The vessel is operated by Modec do Brasil Ltda., the Brazilian
subsidiary of Modec, Inc., through a services agreement. Modec is
one of four Japanese sponsors of the project, together with Mitsui
& Co., Mitsui OSK Lines and Marubeni.

The MV24 FPSO began operating at the Lula/Tupi oil field in October
of 2014. Fitch's rating addresses the timely payment of interest
and principal on a semiannual basis until the legal final maturity
in June 2034.

KEY RATING DRIVERS

CONSORTIUM OBLIGATION STRENGTH EXCEEDS PETROBRAS'

The offtaking consortium is backed by Petrobras (65% share), the
Shell subsidiary Shell Brasil Petróleo Ltda (25%) and the
Galp/Sinopec JV (10%); all the pro rata obligations are guaranteed
by affiliate companies (for the Petrobras group, Petrobras
International Braspetro B.V.).

The offtakers' obligations related to the 20-year charter and joint
operating agreements are several, but not joint, as each party
guarantees that it will make its portion of the payment. However,
these payments can be seen as joint and several as the underlying
concession states that each party must support all the obligations
related to ongoing production. Fitch expects the payments to
continue given the high economic incentives to maintain the
concession. Therefore, the rating of the lowest-rated member,
Petrobras (BB/Stable), does not strictly limit the notes' rating.

OPERATOR CREDIT QUALITY

Modec Brasil's credit quality is in line with investment-grade
metrics, and this is relevant due to the underlying support offered
by Modec to the transaction. In addition to the complexities
involved with replacement of the operator, the services agreement
and overall operating costs are supported by Modec. The average
availability since commercial operation is approximately 95%, in
line with industry standards. Finally, operational expenses have
remained relatively stable and will be capped for the life of the
transaction. Opex in excess of the cap is guaranteed by MV24 and
certain expenditures ultimately guaranteed by Modec through the O&M
support agreement.

'BB'-CATEGORY FINANCIAL METRICS

The key leverage metric for fully amortizing FPSO transactions is
the DSCR. The transaction is currently constrained by leverage at
the 'BB' rating level. Fitch expects base case DSCRs to be in the
range of 1.12x-1.26x throughout the remaining life of the
transaction, which would constrain the rating to the 'BB' category.
The charter rates are fixed with escalators for inflation, and
operating expenses are capped with any overage guaranteed by Modec;
therefore, DSCR levels indicate sufficient buffer to mitigate any
downtime risks associated with operations. The transaction
continues to benefit from a six-month DSRA and three-month O&MRA,
which have remained untapped.

RATING SENSITIVITIES

Factors that Could, Individually or Collectively, Lead to Negative
Rating Action/Downgrade

As described in the Key Rating Drivers, the rating of the
transaction is linked to Brazil's IDR and transaction performance,
with an uplift of one notch over Brazil's IDR. Therefore, a
multi-notch sovereign downgrade or further DSCR deterioration may
trigger a downgrade of the notes. Both ratings have a Stable
Outlook.

For offtakers, Fitch could assign a rating in excess of Petrobras'
by two notches, and this remains possible as long as the other
offtakers remain rated above the notes. Given the current ratings
of the other offtakers, Fitch deems this risk particularly remote.

The other counterparty that could constrain the rating is the
operator, MODEC, which Fitch considers to be of better credit
quality than the senior notes.

Finally, the cash flow analysis results in very robust output,
consistent with ratings in the 'BB' category. DSCRs and ultimate
debt repayment depend on uptime, maintenance days, opex and CPI;
poor performance amongst these variables could drive ratings down
under the stresses Fitch applies.

Factors that Could, Individually or Collectively, Lead to Positive
Rating Action/Upgrade

The rating is constrained by leverage, DSCRs, operating environment
and counterparty ratings. Sustained transaction performance may
result in an upgrade.

ESG CONSIDERATIONS

The highest level of ESG credit relevance is a score of '3', unless
otherwise disclosed in this section. A score of '3' 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. Fitch's ESG Relevance Scores are not
inputs in the rating process; they are an observation on the
relevance and materiality of ESG factors in the rating decision.


RIO DE JANEIRO CITY: Fitch Affirms 'B+' IDRs, Outlook Positive
--------------------------------------------------------------
Fitch Ratings has affirmed the City of Rio de Janeiro's (Rio)
Long-Term Foreign and Local Currency Issuer Default Ratings (IDRs)
at 'B+'. The Rating Outlook has been revised to Positive from
Stable. In addition, Fitch has affirmed Rio's Short-Term Foreign
and Local Currency IDRs at 'B', National Long-Term Rating at
'A(bra)'/Positive Outlook and National Short-Term Rating at
'F1(bra)'. Rio's Standalone Credit Profile (SCP) has been assessed
at 'b+' and no other factors affect the municipality's ratings.

The City of Rio de Janeiro's Positive Outlook reflects the city's
improved fiscal management and liquidity metrics in the last couple
of years, with unrestricted cash larger than short-term
liabilities, as per the liquidity indicator under the Capacidade de
Pagamento (CAPAG), the National Treasury´s metric for measuring
financial health of subnational governments. Fitch could raise the
risk profile to low midrange, from weaker, assuming sustained
healthy liquidity metrics.

KEY RATING DRIVERS

Risk Profile: 'Weaker'

The assessment reflects Fitch's view that there is a high risk of
the issuer's ability to cover debt service with the operating
balance weakening unexpectedly over the scenario horizon
(2023-2027) due to lower revenue, higher expenditure, or an
unexpected rise in liabilities or debt-service requirements.

Revenue Robustness: 'Midrange'

The Brazilian tax collection framework transfers to states and
municipalities a large share of tax collection responsibilities.
Constitutional transfers exist as a mechanism to compensate poorer
entities. For this reason, high dependence on transfers is
considered a weak feature for Brazilian LRGs.

The primary metric for revenue robustness is the transfers ratio,
which measures transfers to operating revenue. LRGs that report a
transfer ratio above or equal to 40% are classified as 'Weaker',
while those with a ratio below 40% are classified as 'Midrange'.
Rio reports relative fiscal autonomy, driving this factor to
'Midrange'. Transfers represented 33.2% of operating revenue on
average in 2018-2022. Municipalities receive transfers from both
the federal ('BB'/Stable) and state governments ('BB'/Stable).

Rio's main operating revenue sources are based on tax revenues,
which represent 41% of operating revenues in 2022. The most
important taxes are the ISS (tax on services) and the IPTU (real
estate property tax). While the ISS is strongly correlated with the
performance of economic activity, the IPTU is a more stable source
of revenues, considering it is leaved on the ownership of real
estate and is paid annually. Rio has a low exposure to volatile oil
royalties, which amounted to 3% of operating revenues in 2022.

Revenue Adjustability: 'Weaker'

Fitch believes Brazilian states and municipalities have a low
capacity level for revenue increases in response to downturns.
There is low affordability of additional taxation given that tax
tariffs are close to the constitutional national ceiling, making
this factor 'Weaker'. When faced with a negative shock over revenue
collection, Brazilian LRGs are less likely to raise tax rates.
Instead, they usually apply measures to curb tax evasion and
introduce tax refinancing programs.

The most important municipal tax is the Imposto Sobre Servicos
(ISS), a tax on services, which represented 49% of tax collection
in 2022. Another important tax for municipalities is the Imposto
Predial e Territorial Urbano, a tax on urban properties, which
corresponded to 29% of the City of Rio's tax collection in 2021.

Expenditure Sustainability: 'Midrange'

Municipalities provide healthcare and elementary education
services. They are also responsible for urban infrastructure and
social housing, but those mandates consume less of the municipal
budget compared with health and education.

Expenditure tends to grow with revenue as a result of earmarked
revenue. States and municipalities are required to allocate a share
of revenue to health and education. This results in procyclical
behavior in good times, as periods of high revenue growth results
in similar trends for expenditure. However, due to the weight of
personal expenditure and salary rigidity, downturns that result in
lower revenue are not followed by similar drops in expenditure.

The City of Rio de Janeiro reports moderate control over
expenditure growth, with sound margins. Operating margins averaged
10.3% in the 2018-2022 period, improving significantly over the
last couple of years on the back of sound fiscal management and
improved economic prospects. The city is current on its payroll
bill and has no significant delays for the payment of suppliers.
Operating expenditure increased 7.5% annually on average between
2018 and 2022, below operating revenues growth of 8.5%.

Expenditure Adjustability: 'Weaker'

Brazilian local governments suffer from a fairly rigid cost
structure, driving this factor to 'Weaker'. As per the Brazilian
constitution, there is low affordability of expenditure reduction,
especially for the payroll bill and pensions. As a result, whenever
there is an unpredictable reduction in revenues, operating
expenditure does not follow automatically.

For Rio, personal expenditures corresponded to 56% of total
expenditure in 2022. This item has very limited flexibility for
adjustments given salary rigidity and limited ability to manage
human resources. Other operating expenditures amounted to close to
34.6% of total expenditures in 2022 and has some flexibility for
adjustments, but still limited by constitutional mandates on health
and education. Lastly, capex represented 7.2% of total expenditures
in 2022 and 3.3%, on average, between 2018 and 2022. Historically,
Brazilian LRGs have often relied on investments cuts when facing a
more challenging economic scenario.

Liabilities & Liquidity Robustness: 'Midrange'

The Brazilian credit market for subnational governments is limited
and highly controlled by the federal government. Often, LRGs opt
for new loans with federal guarantees, which are only granted to
subnationals rated 'A' or 'B' under the National Treasury CAPAG, a
criteria that assesses indebtedness, current savings and liquidity.
The City of Rio has an agreement with the federal government that
allows it to get new loans with federal guarantees amounting to up
to 3% of net current revenue, even if the municipality is not
complying with CAPAG. In any case, it currently has a score of 'B'
under CAPAG criteria.

Brazil has a moderate national framework for debt and liquidity
management, featuring prudential borrowing limits and restrictions
on loan types. Under the Fiscal Responsibility Law of 2000,
Brazilian LRGs must comply with indebtedness limits. Consolidated
net debt for municipalities cannot exceed 120% of net current
revenue. Rio complies with the Fiscal Responsibility Law, reporting
a debt ratio of 40.43% as of YE 2022. The Fiscal Responsibility Law
also sets limits for guarantees, at 22% of net current revenue. Rio
reported no guarantees as of YE 2022.

As of YE 2022, external debt totalled BRL5.1 billion, corresponding
to 31.6% of direct debt. Foreign debt amortization is expected to
average BRL332 million annually until 2027, and there is no
significant maturity concentration throughout the amortization
period. External debt is largely owed to multilateral organizations
and counts with federal government guarantee. Debt directly owed to
the federal government represented only 3.6% of total debt at YE
2022. Rio restructured its debt with the federal government years
ago in exchange for an external loan with a multilateral
organization.

There is some off-balance sheet risk stemming from the pension
system for the City of Rio, which is low when compared to Brazilian
states, given that municipalities do not carry the burden of
pensions related to public security. The municipality transfers
additional resources annually to cover for the pension deficit.

Liabilities & Liquidity Flexibility: 'Weaker'

A framework exists for providing emergency liquidity support from
the federal government via the granting of extended maturity over
the prevalent federal debt portion. Fitch assesses the entity's
available liquidity to differentiate between 'Weaker' and
'Midrange' for Liabilities and Liquidity Flexibility.

One of the metrics analyzed by the Brazilian National Treasury to
LRGs borrows with Federal Government with guarantees (Capacidade de
Pagamento or CAPAG) is the liquidity rate, measured by the LRGs'
short-term financial obligation to net cash.

The threshold for the Federal Government to rate this ratio as 'A'
is 100%. Fitch has set a threshold of 100% for the average of the
last three years (2020-2022 year-end) and for the last year-end
results available (December 2022) below 100%, which would result in
a 'Midrange' assessment for this factor.

The City of Rio reported a three-year average liquidity ratio
-16.4%, especially due to weak metrics in 2020. As of December
2022, the metric improved to 74.6%. The history of poor liquidity
still weighs on the assessment of the entity´s Liabilities and
Liquidity Flexibility, corroborating with the 'Weaker' assessment.

The City of Rio de Janeiro reported improved liquidity over the
last two years. If Rio is able to sustain healthy liquidity metrics
going forward, Fitch would reassess the evaluation of Liabilities
and Liquidity Flexibility.

Debt Sustainability: 'a category'

Fitch's forward looking rating scenario indicates the payback
ratio, measured as net direct risk/operating balance, the primary
metric of the debt sustainability assessment, will reach an average
of 6.4x for 2025-2027, which is aligned with the 'aa' category.
Fitch applies an override due to the actual debt service coverage
ratio, the secondary metric, at 1.1x for the average of 2025-2027,
which is aligned with the 'bb' category. Fiscal debt burden is
projected at 33.3% for the period.

For its rating case, Fitch considers the municipality's historical
performance and projections for main macro variables, such as GDP
growth and inflation. The rating case is inherently a stressed
scenario. Operating revenues are expected to grow 5.3% on average
between 2022 and 2026, largely driven by tax collection. Operating
spending growth reflects government projections for 2023. Going
forward, Fitch applies a growth rate related to inflation plus
spread.

DERIVATION SUMMARY

The City of Rio's ratings reflect the combination of a 'Weaker'
risk profile and 'a' debt sustainability assessment under Fitch's
rating case. The Standalone Credit Profile (SCP) is assessed at
'b+' and factors in a comparison with national and international
peers. The City of Rio's 'B+' IDRs are not affected by any other
rating factors. Its national scale rating of 'A(bra)' is based on a
national peer comparison.

KEY ASSUMPTION

Risk Profile: 'Weaker'

Revenue Robustness: 'Midrange'

Revenue Adjustability: 'Weaker'

Expenditure Sustainability: 'Midrange'

Expenditure Adjustability: 'Weaker'

Liabilities and Liquidity Robustness: 'Midrange'

Liabilities and Liquidity Flexibility: 'Weaker'

Debt sustainability: 'a'

Support (Budget Loans): 'N/A'

Support (Ad Hoc): 'N/A'

Asymmetric Risk: 'N/A'

Rating Cap (LT IDR): 'N/A'

Rating Cap (LT LC IDR) 'N/A'

Rating Floor: 'N/A'

Quantitative assumptions - Issuer Specific
Fitch's rating case is a "through-the-cycle" scenario, which
incorporates a combination of revenue, cost and financial risk
stresses. It is based on 2016-2020 figures and 2021-2025 projected
ratios. The key assumptions for the scenario include:

-- Yoy 5.3% increase in operating revenue on average in 2023-
    2027;

-- Yoy 6.0% increase in tax revenue on average in 2023-2027;

-- Yoy 6.4% increase in operating expenditure on average in 2023-
    2027;

-- Net capital balance of - BRL 1,727 million on average in 2023-
    2027;

-- Cost of debt: 5.6% on average 2023-2027.

Quantitative assumptions - Sovereign Relate
Figures as per Fitch's sovereign actual for [2022] and forecast for
[2023-2025], respectively (no weights and changes since the last
review are included as none of these assumptions was material to
the rating action):

Liquidity and Debt Structure

Net adjusted debt considers BRL16.1 billion of direct debt and
unrestricted cash of BRL3.8 billion as of YE 2022. Fitch estimates
that close to 31.6% of debt is external and guaranteed by the
federal government, while 3.6% is debt owed directly to the federal
government. The City of Rio's largest creditors are the World Bank,
Banco Nacional de Desenvolvimento Economico e Socialand Caixa
Economica Federal. All foreign currency debt is guaranteed by the
federal government.

Issuer Profile

The City of Rio de Janeiro has the second-highest municipal GDP in
Brazil, accounting for 4.4% of national GDP. The city is
headquarters to various Brazilian oil, mining and
telecommunications companies and is one of the most visited cities
in the Southern Hemisphere. The City of Rio's economy correlates
highly with the performance of the oil and tourism sectors.

RATING SENSITIVITIES

Factors that Could, Individually or Collectively, Lead to Negative
Rating Action/Downgrade

-- The Outlook on The City of Rio's IDRs would be revised to
    Stable from Positive on liquidity deterioration.

-- The City of Rio's IDRs would be downgraded if its operating
    balance deteriorates significantly, leading to a payback ratio

    above 13.0x and an actual debt service coverage ratio below
    1.0x.

Factors that Could, Individually or Collectively, Lead to Positive
Rating Action/Upgrade

-- The City of Rio's IDRs would be upgraded if it could sustain
    healthy liquidity metrics going forward, as measured by the
    National Treasury CAPAG liquidity Indicator. Assuming no other

    changes, Fitch would reassess the entity's Risk Profile, with
    an impact on its SCP and IDRs.

-- The City of Rio's IDRs would be upgraded if its actual debt
    service coverage ratio improves to above 1.5x over the
    scenario horizon, provided that its payback ratio remains
    below 9.0x.

-- The City of Rio's IDRs would be upgraded if its payback ratio
    improves and is projected below 5x in Fitch's rating case.

ESG CONSIDERATIONS

The highest level of ESG credit relevance is a score of '3', unless
otherwise disclosed in this section. A score of '3' 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. Fitch's ESG Relevance Scores are not
inputs in the rating process; they are an observation on the
relevance and materiality of ESG factors in the rating decision.

   ENTITY/DEBT   RATING          PRIOR  
   -----------   ------          -----
Rio de Janeiro, City of

LT IDR         B+       Affirmed  B+
ST IDR         B        Affirmed  B
LC LT IDR      B+       Affirmed  B+
LC ST IDR      B        Affirmed  B
Natl LT        A(bra)   Affirmed  A(bra)
Natl ST        F1(bra)  Affirmed  F1(bra)


RIO DE JANEIRO STATE: Fitch Affirms 'BB' LongTerm IDRs
------------------------------------------------------
Fitch Ratings has affirmed the Brazilian State of Rio de Janeiro's
Long-Term Foreign and Local Currency Issuer Default Ratings (IDRs)
at 'BB' with a Stable Rating Outlook and its Short-Term Foreign and
Local Currency IDRs at 'B'. Fitch has also affirmed Rio de
Janeiro's National Long-Term Rating at 'AA(bra)' with a Stable
Outlook and its National Short-Term Rating at 'F1+(bra)'. Rio de
Janeiro Standalone Credit Profile (SCP) is assessed at 'ccc'.

The state's IDRs benefit from a six-notch uplift from its SCP
considering the support derived from the New Fiscal Recovery Regime
and its impact over the state's enhanced debt sustainability. The
New Fiscal Recovery Regime is a national framework to ease the debt
burden of distressed subnational governments. Throughout the
duration of the program, Rio de Janeiro will benefit from debt
service relief through a step-up debt service schedule and the
federal government will service all contracts included under the
program. Fitch expects the Federal Government (BB'/Stable) will
continue to honor the State of Rio de Janeiro's debt service under
the New Fiscal Recovery Regime.

KEY RATING DRIVERS

Risk Profile: 'Weaker'

The assessment reflects Fitch's view that there is a high risk of
the issuer's ability to cover debt service with the operating
balance weakening unexpectedly over the scenario horizon
(2023-2027) due to lower revenue, higher expenditure, or an
unexpected rise in liabilities or debt-service requirement.

Revenue Robustness: 'Weaker'

The Brazilian tax collection framework transfers to states and
municipalities a large share of the responsibility to collect
taxes. Constitutional transfers exist as a mechanism to compensate
poorer entities. For this reason, a high dependence on transfers is
considered a weak feature for Brazilian local and regional
governments (LRGs).

The primary metric for revenue robustness is the transfers ratio,
measured as transfers-to-operating revenues. LRGs that report a
transfer ratio above, or equal to, 40% are classified as weaker,
while others with a ratio below 40% are classified as midrange. The
State of Rio de Janeiro reports significant fiscal autonomy.
Transfers represented 10.9% of operating revenue, on average, for
2018-2022.

However, the State of Rio de Janeiro is dependent on volatile
revenue sources related to oil royalties. Dependency on volatile
revenue sources, such as commodity sales, is considered weakness
for revenue robustness. Unanticipated shocks to oil prices could
have a potentially large negative impact over the state´s budget,
especially due to the state´s annual pension deficit, which is
financed through royalties per state law.

The share of oil royalties/operating revenues reached 31.8%, as of
2022, as oil prices rose following the global economic recovery and
due to geopolitical instability. Fitch expects Brent oil prices per
barrel to drop from an average of USD100.9 in 2022 to USD80 in
2023, leading to a real drop in projected total revenues. Overall,
dependence on volatile revenue sources related to oil drives this
factor to weaker.

Revenue Adjustability: 'Weaker'

Fitch considers Brazilian states and municipalities to have a low
capacity level for revenue increases in response to a downturn.
There is low affordability of additional taxation, given that tax
tariffs are close to the constitutional national ceiling and a
small number of taxpayers represent a large share of tax
collection, driving this factor to weaker.

The most relevant tax, the Tax on the Circulation of Goods and
Services (ICMS), has a concentrated taxpayer base, similar to other
Brazilian states. The 10 largest tax payers corresponded to 36.6%
of total ICMS tax collection in Rio de Janeiro in 2022. Moreover,
the national congress recently set a limit for ICMS tax tariffs for
electricity, telecommunications and fuels. Such goods should be
treated as essential goods and tariffs are limited to around 17%.
This created further challenges for revenue adjustability.

Expenditure Sustainability: 'Midrange'

Fitch has reassessed the state´s Expenditure Sustainability to
Midrange from Weaker.

Responsibilities for states are moderately countercyclical since
they are engaged in health care, education and law enforcement.
Expenditure tends to grow with revenues as a result of earmarked
revenues. States and municipalities are required to allocate a
share of revenues in health and education. This results in a
pro-cyclical behavior in good times, as periods of high revenue
growth result in a similar behavior for expenditures. However, due
to the large weight of personal expenditures and rigid salaries,
downturns that result in lower revenues are not followed by similar
drops in expenditures.

Data for Rio de Janeiro indicates that the state reported
consistent improvement in expenditure trends in the last five years
(2018-2022). Operating margins have averaged at 9.4% in 2018-2022
and are projected to average 4.1% under Fitch´s rating case
scenario horizon. The state has recovered from a period of
significant fiscal distress, when it accumulated delays on its
payroll and on suppliers in 2015-2019. The payroll bill was settled
by 2018. The state is currently under the New Fiscal Recovery
Regime, which creates a number of conditions on expenditure growth
that should contribute to sustain a more favorable trend going
forward. Fitch will continue monitoring the sustainability of the
state's expenditures going forward.

Expenditure Adjustability: 'Weaker'

Brazilian local governments suffer from a fairly rigid cost
structure, driving this factor to 'Weaker'. As per the Brazilian
Constitution, there is low affordability of expenditure reduction
especially in salaries. As a result, whenever there is an
unpredictable reduction in revenues, operating expenditure does not
follow automatically.

For the State of Rio de Janeiro, staff costs corresponded to 65.7%
of total expenditure in 2022. This item has very limited
flexibility for adjustments given salary rigidity and limited
capacity to manage human resources. Other operating expenditures
amounted to close to 34% of total expenditures in 2022 and has some
flexibility for adjustments, but still limited by constitutional
mandates. Lastly, CAPEX represented 6.2% of total expenditures in
2022 and 2.8% on average between 2018-2022. Historically, Brazilian
LRGs have often relied on investment cuts when facing a more
challenging economic scenario.

Liabilities & Liquidity Robustness: 'Weaker'

There is a moderate national framework for debt and liquidity
management, since there are prudent borrowing limits and
restrictions on loan types. Under the Fiscal Responsibility Law, or
Lei de Responsabilidade Fiscal (LRF), of 2000, Brazilian LRGs must
comply with indebtedness limits. Consolidated net debt for states
cannot exceed 2.0x, or 200%, of net current revenue. The State of
Rio de Janeiro reported a debt ratio of 168.28%, as of December
2022. The LRF also sets limits for guarantees at 22% of net current
revenues. The state reported a 0.1% ratio as of December 2022.

The State of Rio de Janeiro has not serviced most of its debt since
2017. The state joined the Fiscal Recovery Regime, as of September
2017, sponsored by the federal government. The program was valid
for three years and its main objective was to provide the State of
Rio de Janeiro with debt service relief, while pushing for fiscal
austerity. Under the program, the federal government honored
guarantees and postponed debt service of intergovernmental debt
and, at the same time, did not make use of counter-guarantees, such
as the possibility to hold constitutional transfers to pay the
state's debt service. The first Fiscal Recovery Regime ended by
September 2020 and, during negotiations for a new regime, the
federal government continued to service the state's debt.

The State of Rio de Janeiro announced on June 21, 2022 it
formalized the New Fiscal Recovery Regime together with the federal
government. The negotiated conditions apply from Aug. 1, 2022.
Under this new program, the state has a nine-year transition period
with a step-up debt service profile. In the first year, the state
will pay around 10% of its debt service. In the second year, it
will pay 20% and so forth until it pays 100% of its debt service by
2031.

In the meantime, the federal government will continue to honor all
debt contracts included under the program. Rio de Janeiro will be
responsible for debt service of contracts not included in the
program. Through the duration of the program, the state's capacity
to take on new loans will be limited and only allowed for specific
circumstances and with federal approval.

There is moderate off-balance sheet risk stemming from the pension
system, which is a burden for most Brazilian LRGs, especially for
states given their mandate over education and public security.
Another relevant contingent liability refers to the payment of
judicial claims, the so-called "precatorios". The national congress
has determined that subnational governments must fully amortize
such liabilities until 2029.

Liabilities & Liquidity Flexibility: 'Weaker'

A framework exists for providing emergency liquidity support from
the federal government via the granting of extended maturity over
the prevalent federal debt portion. Fitch assesses the entity's
available liquidity to differentiate between 'Weaker' and
'Midrange' for Liabilities and Liquidity Flexibility.

One of the metrics analyzed by the Brazilian National Treasury to
assess LRGs that borrow with Federal Government Guarantee
(Capacidade de Pagamento or CAPAG) is the liquidity rate, measured
by the LRGs' short-term financial obligation to net cash.

The threshold for the Federal Government to rate this ratio as 'A'
is 100%. Fitch has set a threshold of 100% for the average of the
last three years (2020-2022 YE) and for the last year-end results
available (December 2022) below 100%, which would result in a
'Midrange' assessment for this factor.

The State of Rio de Janeiro has reported an improvement in cash
position in the last couple of years. Nonetheless, the state´s
history of low cash still weights on Fitch´s assessment. The State
of Rio de Janeiro reported a three-year average liquidity ratio of
147.9%. As of December 2022, the state reported a liquidity ratio
of 83.6%. The still weak ratio for the last-three-year average
corroborates with the 'Weaker' assessment.

Debt Sustainability: 'b category'

Fitch forward-looking scenario indicates that the payback ratio
(net direct risk to operating balance) - the primary metric of the
debt sustainability assessment - will reach an average of 37.7x for
the 2025-2027 period. This is aligned with a 'b' assessment. The
actual debt service coverage ratio (ADSCR), the secondary metric,
is projected at 0.4x, on average, for 2025-2027, also aligned with
a 'b' assessment. Fiscal debt burden is projected at 154.3% for the
same period.

Debt sustainability deteriorated somewhat from the previous annual
review on the back of tighter operating balance and increased debt
service towards the end of the scenario horizon. The State of Rio
de Janeiro performed an important adjustment to the payroll bill in
2022-2023, which reflects the accumulated loss of salaries to
inflation after years of a wage freeze.

Revenues are also expected to suffer from the tax losses from the
ICMS tax fee limit imposed to fuels and electricity, especially in
the first half of 2023, besides the expected drop in oil prices.
Lastly, the state´s sculpted debt service profile under the New
Fiscal Recovery Regime is designed to increased gradually over nine
years, what leads to a growing debt service bill and debt service
relief in the short-term.

ESG Governance -- Creditor Rights: State of Rio de Janeiro's track
record in the breach of legal documentation stating full debt
service payments, reflects the very low willingness to pay. The SCP
will be reassessed once State of Rio recovers and it is able to
honor its committed financial obligations in due time with no
federal government aid.

DERIVATION SUMMARY

Fitch relies on its rating definitions to position the State of Rio
de Janeiro SCP at 'ccc'. Rio de Janeiro has a Weaker Risk Profile
and 'b' debt sustainability assessment. Overall, expenditure
sustainability gradually improved in the last years and the
state´s cash position strengthened, what contributes to an
improved fiscal management. Nonetheless, Rio de Janeiro continues
to be pressured by its high debt burden and can only manage its
debt service profile with federal support.

The state´s IDR´s benefit from a six-notch uplift from its SCP
considering the support derived from the New Fiscal Recovery Regime
and its impact over the state´s enhanced debt sustainability.

KEY ASSUMPTIONS

Risk Profile: 'Weaker'

Revenue Robustness: 'Weaker'

Revenue Adjustability: 'Weaker'

Expenditure Sustainability: 'Midrange'

Expenditure Adjustability: 'Weaker'

Liabilities and Liquidity Robustness: 'Weaker'

Liabilities and Liquidity Flexibility: 'Weaker'

Debt sustainability: 'b'

Support (Budget Loans): '6'

Support (Ad Hoc): 'N/A'

Asymmetric Risk: 'N/A'

Rating Cap (LT IDR): 'N/A'

Rating Cap (LT LC IDR) 'N/A'

Rating Floor: 'N/A'

Quantitative assumptions - Issuer Specific

Fitch's rating case is a "through-the-cycle" scenario, which
incorporates a combination of revenue, cost and financial risk
stresses. It is based on 2018-2022 figures and 2023-2027 projected
ratios. The key assumptions for the scenario include:

-- Yoy 2.5% increase in operating revenue on average in 2023-
    2027;

-- Yoy 5.3% increase in tax revenue on average in 2023-2027;

-- Yoy 4.1% increase in operating spending on average in 2023-
    2027;

-- Net capital balance of - BRL 3,824 million on average in 2023-
    2027;

-- Cost of debt - follows a step-up approach as per the New
    Fiscal Recovery Regime: 1.8% in 2023; 2.4% in 2024; 3% in
    2025; 3.7% in 2026; and 4.3% in 2027.

For the State of Rio de Janeiro, Fitch has largely relied on the
official projections of the New Fiscal Recovery Regime.

Quantitative assumptions - Sovereign Related

Figures as per Fitch's sovereign actual for 2022 and forecast for
2023, respectively (no weights and changes since the last review
are included as none of these assumptions was material to the
rating action):

Liquidity and Debt Structure

Net adjusted debt considers BRL172.9 billion of direct debt and
unrestricted cash of BRL19.5 billion as of YE 2022. Fitch estimates
that close to 98% of debt was included under the New Fiscal
Recovery Regime. Liquidity improved significantly in 2021-2022 as a
result of strong revenue collection through taxes and oil
royalties. The expectation is the State of Rio de Janeiro will use
part of these resources to boost its capex program going forward.

Issuer Profile

The State of Rio de Janeiro is classified by Fitch as a Type B LRG,
which is required to cover debt service from cash flows on an
annual basis. Rio de Janeiro is the second largest regional economy
in Brazil, at 9.9% of national GDP. GDP per capita of BRL43,407.6
is 1.21x the national average. Revenue sources are mainly based on
taxation and royalties from oil-related activities, with a low
dependence on federal transfers.

RATING SENSITIVITIES

Factors that Could, Individually or Collectively, Lead to Negative
Rating Action/Downgrade

-- A negative action on the sovereign rating would result in a
downgrade of the IDRs of the State of Rio de Janeiro given that the
IDR reflect sovereign support;

-- The State of Rio de Janeiro's IDRs would be downgraded under the
perception of weakened federal support to the state´s debt service
through the New Fiscal Recovery Regime and deteriorating enhanced
metrics.

Factors that Could, Individually or Collectively, Lead to Positive
Rating Action/Upgrade

- A positive rating action on Brazil's IDR could lead to a
corresponding rating action on the State of Rio de Janeiro given
that its ratings are equalized to the sovereign because of
intergovernmental finance support.

ESG CONSIDERATIONS

Rio de Janeiro. State of has an ESG Relevance Score of '5' for
Creditor Rights due its track record in the breach of legal
documentation stating the full debt service payments, reflecting
the very low willingness to pay, which has a negative impact on the
credit profile, and is highly relevant to the rating, resulting in
an implicitly lower rating.

Rio de Janeiro. State of has an ESG Relevance Score of '4' for Rule
of Law, Institutional & Regulatory Quality, Control of Corruption
due to the fact that government effectiveness and institutional and
regulatory quality was not sufficient to prevent the state from
resorting to external financial support, namely the federal
government, to pursue fiscal balance, which has a negative impact
on the credit profile, and is relevant to the rating in conjunction
with other factors.

Rio de Janeiro. State of has an ESG Relevance Score of '4' for
Biodiversity and Natural Resource Management in recognition of its
economic and financial dependency on the hydrocarbon sector, which
has a negative impact on the credit profile, and is relevant to the
rating in conjunction with other factors.

The highest level of ESG credit relevance is a score of '3', unless
otherwise disclosed in this section. A score of '3' 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. Fitch's ESG Relevance Scores are not
inputs in the rating process; they are an observation on the
relevance and materiality of ESG factors in the rating decision.

PUBLIC RATINGS WITH CREDIT LINKAGE TO OTHER RATINGS

The ratings of the State of Rio de Janeiro are equalized to the
Brazilian sovereign through intergovernmental finance support.

ENTITY / DEBT     RATING               PRIOR  
-------------     ------               -----
Rio de Janeiro, State of

  LT IDR            BB        Affirmed   BB
  ST IDR            B         Affirmed   B
  LC LT IDR         BB        Affirmed   BB
  LC ST IDR         B         Affirmed   B  
  Natl LT           AA(bra)   Affirmed   AA(bra)
  Natl ST           F1+(bra)  Affirmed   F1+(bra)


RUMO SA: S&P Alters Outlook to Pos., Affirms 'BB-' LT Rating
------------------------------------------------------------
S&P Global Ratings revised the outlook on Rumo S.A. to positive
from stable and affirmed the 'BB-' long-term global scale rating,
mirroring the action on the parent.

S&P also affirmed its long-term national scale rating on Rumo at
'brAAA', as well as the issue ratings.

S&P said, "On June 14, 2023, S&P Global Ratings revised the outlook
on Brazil to positive from stable and affirmed the 'BB-' sovereign
credit rating. As a result, on Aug. 17, 2023, we revised the
outlook on Rumo's parent, Cosan, to positive and affirmed the
global scale rating at 'BB-'. The ratings on Cosan are capped by
those on the sovereign. Additionally, the ratings on Rumo are
capped at the level of those on Cosan. Cosan controls Rumo with a
majority on the board of directors for the past several years and a
stake of 30%."

The vandalism events at the beginning of the year near Port of
Santos set the tone for small volume growth in 2023. Rumo just
revised the guidance for volumes transported in 2023 to 76 million
to 78 million revenue ton kilometers (RTK) from 80 million to 83
million. Still, the company will continue benefiting from the
record soybean and corn crops in Brazil this year, expanding
volumes about 3% in 2023 compared with 2022.

Over the coming years, we foresee solid fundamentals, indicating
the company could meet its 2025 guidance of volumes of 99 million
to 109 million RTK, given progress on the Malha Paulista rail
extension and expected record crops in 2023-2024. Moreover, Rumo
has been working on several initiatives to improve operating
efficiency, as reducing rail accidents and decreasing transit time
enable higher volumes.

S&P said, "We expect agricultural cargo to remain the bulk of cargo
transported; it represented 83.4% of cargo transported through July
2023, followed by industrial cargo at 11.8% and containers at 4.8%.
Soybean and soybean meal represented about 60% of consolidated
cargo transported at 43.3 million RTK.

"We expect tariff adjustments for full-year 2023 to be similar to
the performance of the first six months of the year, when Rumo
expanded tariffs 17.5% compared with the same period last year,
even amid lower fuel prices and inflation. We think this reflects
the company's solid commercial initiatives, proving the
competitiveness of the rail logistic segment. As a result, we
forecast Rumo's EBITDA margin will be close to 52% in 2023 and
remain relatively stable in the coming years amid volume growth,
tariff adjustments, and the efficiency initiatives.

"Rumo also revised downward capital expenditure (capex) guidance
for 2023, mostly due to delays in the first phase of the Lucas do
Rio Verde (LRV) project to connect Rondonopolis terminal to the
future one in Campo Verde that depend on some licenses and land
works, given reliance on landowners to progress. We expect most of
the capex, which totals Brazilian real (R$) 3.5 billion in 2023 and
R$5.4 billion in 2024-2025, will go toward the maintenance and
concession obligations of Malha Paulista and Malha Central to
increase rail extension and capacity. Moreover, capex for the
initial phase of the LRV project, at R$4.5 billion in 2023-2025,
will pressure free operating cash flow (FOCF). Even with negative
FOCF, we forecast debt to EBITDA around 2.5x in 2023 and 2.0x-2.5x
in 2024-2025."

Environmental, social, and governance factors have an overall
neutral influence on our credit rating analysis of Rumo. The
company is committed to expanding its sustainability agenda, as
seen in its sustainability-linked note issuance in April 2021,
aiming to reduce greenhouse gas emissions 15% from 2019 levels by
2023. The company reached 2023 levels, which prevented a step up in
the cost of debt.




=========
C H I L E
=========

CHILE: Interest Rate Likely to Come Down to 7.75%-8% by Year-End
----------------------------------------------------------------
Reuters reports that Chile's benchmark interest rate will likely
come down to between 7.75% and 8% by the end of the year, as
expected by analysts, the country's central bank chief said.

Chile's central bank was one of the first in Latin America to cut
interest rates during the current monetary policy cycle, slashing
the rate from 11.25% to 10.25% at the end of July, according to the
report.

However, the 100-basis-point cut is not indicative of future rate
moves in Chile, central bank chief Rosanna Costa cautioned,
speaking at an event, the report notes.

Consumer prices rose 0.4% in July from the month before, slightly
above a Reuters estimate of 0.3%. That does not mean that Chile's
interest rate horizon will change, Costa said, and the rate will
continue to come down as the economic situation evolves, Costa
added.

However, the task of bringing inflation within the central bank's
target of 3% is "far from over," Costa said, Reuters notes.



=============
E C U A D O R
=============

ECUADOR: Fitch Lowers LongTerm IDR to 'CCC+'
--------------------------------------------
Fitch Ratings has downgraded Ecuador's Long-Term Foreign Currency
Issuer Default Rating (IDR) to 'CCC+' from 'B-'. Fitch typically
does not assign Outlooks to sovereigns with a rating of 'CCC+' or
below.

KEY RATING DRIVERS

Downgrade: The downgrade of Ecuador's ratings reflects heightened
financing risks emanating from a significant deterioration in
fiscal accounts, with limited scope for additional local market
financing, and a challenging external financing backdrop. Liquidity
constraints have resulted in a sizeable build-up in arrears since
YE 2022. There has been an increase in political risk and
governability challenges, and regardless of the outcome of upcoming
general elections, Fitch does not anticipate significant reform
progress to address Ecuador's fiscal and financing challenges in
the remaining 18-month presidential term. This will continue to
hinder the sovereign's market access and ability to secure an IMF
successor program.

Political Uncertainty Impacts Financing Options: General elections
were announced for Aug. 20 after President Lasso disbanded the
National Assembly in May to avoid impeachment. Polls point to a
presidential election runoff in October. Luisa Gonzalez, from the
Citizen Revolution Party and Correa loyalist, is leading them, with
high uncertainty around the runner-up, which could be former Vice
President (VP) Otto Sonnenholzner, indigenous activist Yaku Perez,
businessman Jan Topic, or Christian Zurita. The assassination of
presidential candidate Fernando Villavicencio underscores the
heightened political and security risks. Fitch expects a similar
composition in Congress relative to the makeup before dissolution.

In Fitch's view, the next president will be challenged to address
the difficult economic, fiscal, and security situations amid
political uncertainty as the caretaker government (and National
Assembly) serves until May 2025, with general elections scheduled
for early 2025, constraining external bond access and ability to
negotiate a successor IMF program that would unlock additional
multilateral financing. Further, Fitch considers Ecuador to have a
relatively low debt tolerance, and several of the candidates are
calling for a debt audit and/or renegotiation of the debt.

Ecuadorians will also vote on two referendums that could impact oil
extraction in three fields in the Amazon and mining exploration and
production near Quito. If the referendum passes, the estimated oil
output fall would be 12%, resulting in a USD600 million fall in
fiscal revenues, and a net fall of USD600 million in net exports.

Public Finances Weaken: The central government's (CG) fiscal
position has started weakening after significant improvement since
Ecuador entered into an Extended Fund Facility with the IMF in
2020. Under the deal, which ended in December 2022 and was the
first program the country completed in over 20 years, Ecuador
rolled out a tax reform under President Lasso, improved the quality
of fiscal data, and adopted more prudent fiscal policies. The CG
deficit fell to 1.2% of GDP in 2022 from 8.1% in 2020 and deposits
more than doubled to USD1 billion during this time period. In 2023,
Fitch forecasts the CG fiscal deficit to rise to 3.2% of GDP, above
the government's pro forma 2023 budget target of 2.1% due largely
to lower oil receipts and higher spending due to higher interest on
debt and increases in salaries and social security transfers.

Fitch forecasts the deficit to rise further to 3.4% by 2025 as
revenues adjust to slower growth, lower oil revenues, and the
impact of President Lasso's tax cuts, while expenses increase due
to rising interest on debt and social demands. Downside risks to
our forecast include from a stronger-than-expected El Nino;
approval of the vote to halt oil extraction; or the next interim
president loosening fiscal policy to garner support ahead of
elections in 2025.

Financing Challenges: Fitch expects CG financing needs to rise to
USD11.6 billion (10% of GDP) in 2023. Fitch projects the CG raises
USD10.2 billion, leaving a financing gap of USD1.4 billion. To
finance the growing deficit, the CG had drawn down deposits to
USD458 million from USD1 billion at YE 2022 per central bank (BCE)
data as of the end July and built up arrears, which were USD1.2
billion as of the end May per Ministry of Finance data. In Fitch's
view, amid the political turmoil, the sovereign will not be able to
raise financing in the external bond market or via an IMF successor
program.

Fitch anticipates the government will finance itself with support
from multilaterals and domestic financing as well as some further
drawdown on deposits and arrears. The CG may not have much space to
cut expenses as capex has already been significantly reduced,
further challenging the executive's ability to address indigenous
groups' demands and wider social discontent.

While Fitch sees external bond debt service (interest plus
amortizations) as manageable in the near term, we expect repayment
capacity to come under greater pressure ahead of amortizing IMF
debt starting in 2025 and step-ups in interest payments on
restructured external bonds starting in 2026.

Public Debt Stable: Fitch forecasts gross general government debt
(GGGD) ends 2023 at 61.4% of GDP in 2023 (from 61.8% in 2022)
helped by the debt-for-nature swap, which compares favorably with
the 'B'/'C'/'D' rated peer median of 71.6%. Fitch projects GGGD to
GDP to remain around 61% through 2025 as GDP growth returns to its
low trend pace, and fiscal deficits widen. Government interest to
revenues (4.9%) compares more favorably to the 'B'/'C'/'D' median
(11.1%), though Fitch forecasts this ratio to rise to 7% by 2025 as
the effects of higher global interest rates and step-up coupons on
restructured bonds feed through.

Political Uncertainty Weighs on Growth: Fitch forecasts GDP growth
to slow to 1.4% in 2023, well below the 'B'/'C'/'D' median of 2.9%
and the average over the last 15 years of 2.1%. This will be driven
by a weakening in investment prospects amid political uncertainty
and potential for renewed social unrest, slowing growth in credit,
and fall in oil output due to disruptions. However, remittances
will support activity, growing at 6% in 2023. Fitch projects real
GDP to converge to its low trend growth of 1.9% by 2025.

External Liquidity Position Weakens in 1H23: Fitch forecasts the
current account surplus at 1.5% of GDP in 2023. The current account
surplus and multilateral loans had supported historically high
international reserve levels, but there has been a large decline in
reserves since the start of the year and there is a risk that they
continue to fall despite the current account surplus. Per BCE data,
reserves stood at USD7 billion at the end July, which represents a
22% fall since July 2022 and is equal to 2.1 months of 2023 CXP
(which compares unfavorably to the peer group median of 3.1).

The liquidity position of the BCE is important in the strengthening
of the foundations of Ecuador's dollarization regime (guided by the
Defense of Dollarization Law). BCE reserves provide full coverage
of bank reserves (a 2025 target) and the reserve requirements of
other financial institutions (a 2035 target), but they are still
insufficient to cover public-sector deposits (a 2035 target).

Country Ceiling: Despite the IDR downgrade, Fitch has maintained
Ecuador's Country Ceiling at 'B' in line with the recently updated
country ceiling criteria. The updated criteria considers that
dollarization reduces the risk of capital controls being imposed,
although it does not wholly eliminate them. Ecuador's +2 notches
uplift from the IDR reflects our view that risks of foreign
exchange controls are mitigated by the absence of a separated legal
tender, but also takes into account that the risks of imposing
capital controls is expected to be higher for lower-rated
sovereigns, especially low subinvestment grade.

ESG - Governance: Ecuador has an ESG Relevance Score (RS) of '5'
for both Political Stability and Rights and for the Rule of Law,
Institutional and Regulatory Quality and Control of Corruption.
Theses scores reflect the high weight that the World Bank
Governance Indicators (WBGI) have in our proprietary Sovereign
Rating Model. Ecuador has a low WBGI percentile ranking at 38.5
reflecting a rising political uncertainty, moderate voice and
accountability, moderately weak rule of law and government
effectiveness, and weak control of corruption.

RATING SENSITIVITIES

Factors that Could, Individually or Collectively, Lead to Negative
Rating Action/Downgrade

-- Public Finances: Signs of more acute financing stress that
    could jeopardize repayment capacity or of weaker willingness
    to service commercial debt.

Factors that Could, Individually or Collectively, Lead to Positive
Rating Action/Upgrade

-- Structural: Reduction of political risk and uncertainty over
    the near- and medium-term, consistent with improved
    governability, economic policy and/or access to external
    markets and IMF program support;

-- Public Finances: A sustained alleviation of sovereign
    financing constraints, for example due to improved fiscal
    performance.

SOVEREIGN RATING MODEL (SRM) AND QUALITATIVE OVERLAY (QO)

Fitch's proprietary SRM assigns Ecuador a score equivalent to a
rating of 'B+' on the LTFC IDR scale. However, in accordance with
its rating criteria, Fitch's sovereign rating committee has not
utilised the SRM and QO to explain the ratings in this instance.
Ratings of 'CCC+' and below are instead guided by Fitch's rating
definitions.

Fitch's SRM is the agency's proprietary multiple regression rating
model that employs 18 variables based on three-year centred
averages, including one year of forecasts, to produce a score
equivalent to a Long-Term Foreign Currency IDR. Fitch's QO is a
forward-looking qualitative framework designed to allow for
adjustment to the SRM output to assign the final rating, reflecting
factors within our criteria that are not fully quantifiable and/or
not fully reflected in the SRM.

COUNTRY CEILING

The Country Ceiling for Ecuador is 'B', 2 notches above the LT FC
IDR. This reflects strong constraints and incentives, relative to
the IDR, against capital or exchange controls being imposed that
would prevent or significantly impede the private sector from
converting local currency into foreign currency and transferring
the proceeds to non-resident creditors to service debt payments.

Fitch's Country Ceiling Model produced a starting point uplift of
+1 notch above the IDR. Fitch's rating committee applied a +1-notch
qualitative adjustment to this, under the Long-Term Institutional
Characteristics, reflecting Ecuador's fully dollarized economy.

ESG CONSIDERATIONS

Ecuador has an ESG Relevance Score of '5' for Political Stability
and Rights as WBGI have the highest weight in Fitch's SRM and are
therefore highly relevant to the rating and a key rating driver
with a high weight. As Ecuador has a percentile rank below 50 for
the respective governance Indicator, this has a negative impact on
the credit profile.

Ecuador has an ESG Relevance Score of '5' for Rule of Law,
Institutional & Regulatory Quality and Control of Corruption as
WBGI have the highest weight in Fitch's SRM and are therefore
highly relevant to the rating and a key rating driver with a high
weight. As Ecuador has a percentile rank below 50 for the
respective governance indicator, this has a negative impact on the
credit profile.

Ecuador has an ESG Relevance Score of '4' for Human Rights and
Political Freedoms as the Voice and Accountability pillar of the
WBGI is relevant to the rating and a rating driver. As Ecuador has
a percentile rank below 50 for the respective governance indicator,
this has a negative impact on the credit profile.

Ecuador has an ESG Relevance Score of '4' for Creditor Rights as
willingness to service and repay debt is relevant to the rating and
is a rating driver for Ecuador, as for all sovereigns. As Ecuador
has a fairly recent restructuring of public debt in 2020, this has
a negative impact on the credit profile.

The highest level of ESG credit relevance is a score of '3', unless
otherwise disclosed in this section. A score of '3' 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. Fitch's ESG Relevance Scores are not
inputs in the rating process; they are an observation on the
relevance and materiality of ESG factors in the rating decision.

  ENTITY / DEBT               RATING            PRIOR  
  -------------               ------            -----
Ecuador    LT IDR             CCC+ Downgrade    B-

           ST IDR             C    Downgrade    B

           Country Ceiling    B    Affirmed     B

senior
unsecured LT                 CCC+ Downgrade    B-




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

JAMAICA: GDP Growth Estimated at 1.5% for April to June Quarter
---------------------------------------------------------------
RJR News reports that economic growth for the second quarter is
estimated at 1.5 per cent.

This is below the projections delivered earlier this year, which
set growth for the April to June period at 2 per cent to 3 per
cent, according to RJR News.

Dr. Wayne Henry, Director General of the Planning Institute of
Jamaica (PIOJ), gave the GDP estimates at a press briefing, the
report notes.

He said the outturn for the review quarter largely reflected
increased capacity utilization in the mining and quarrying
industry, the continuation of the growth momentum in
tourism-related industries, increased demand spurred by higher
levels of employment, as well as increased business and consumer
confidence relative to the corresponding quarter of 2022, the
report discloses.

"Further growth was stymied by the impact of drought conditions on
agriculture and water production, as well as relatively aged
equipment in some industries, which resulted in unplanned down
times," he added, the report notes.

The quarter's output brought real value added for the first six
months of 2023, to an estimated 2.9 per cent, the report relays.

The services industry grew by 3.5 per cent, while the goods
producing industry grew by 1 per cent, the report says.

"The industries which were estimated to have recorded the largest
increases during the first half of the year were mining and
quarrying, up 137.7%, hotels and restaurants, up 18.5%, other
services up 11.4%, and transport storage and communication, up
6.1%," Dr. Henry reported, 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.



===========
M E X I C O
===========

CEMEX S.A.B.: S&P Alters Outlook to Positive, Affirms 'BB+' ICR
---------------------------------------------------------------
On Aug. 18, 2023, S&P Global Ratings affirmed its 'BB+' global
scale issuer credit ratings on Mexico-based cement producer Cemex
S.A.B. de C.V. and its rated subsidiaries and affirmed the 'BB+'
issue-level ratings on the company's senior unsecured notes and the
'B+' rating on its subordinated bonds.

At the same time, S&P raised the long-term national scale rating on
Cemex to 'mxAA' from 'mxAA-' and affirmed the short-term 'mxA-1+'
rating. S&P also revised the outlook on the global scale and
national scale ratings to positive from stable. The recovery rating
on Cemex's senior unsecured debt remains '3'.

The positive outlook on both rating scales reflects the possibility
of an upgrade in the next six to 12 months if Cemex consolidates
the improvement in credit metrics, driven by persistent efforts to
expand profit margins, while it keeps its long-proven financial
discipline.

In the first half of this year, Cemex's EBITDA margin reached close
to 19.5%. This is an improvement of about 130 basis points relative
to the same period last year, mainly explained by significant price
increases in local currencies across all markets that have outpaced
key inputs costs inflation. Although Cemex's pricing adjustments
have resulted in a slight loss of market share in some countries
and lower volume sales, the overall effect is boosting the
company's top-line results, and revenues could reach 6%-9% growth
in the next couple of years.

At the same time, Cemex's EBITDA is benefiting from the
contribution of growth investments, deflating input costs, and
higher operating efficiencies. These efficiencies stem from more
intensive use of alternative fuels (mostly biomass) and renewable
energy, and from reduced use of clinker in blended cement, among
other initiatives.

S&P said, "We expect Cemex to keep its pricing strategy this year
and to gradually moderate its price increments in 2024. As a
result, we consider that the sequential improvement of the
company's profitability could raise the EBITDA margin close to 20%
over the next two years, solidly higher than the 17.6% it posted in
2022.

More than a decade ago, Cemex set returning the rating on it to
investment grade as a key priority. Over the years, the company has
maintained its commitment to deleveraging its capital structure and
improving debt-protection metrics in pursuit of a stronger credit
profile. For the last 12 months ended June 30, 2023, Cemex's
adjusted leverage was 2.9x and funds from operations (FFO) to debt
near 25%. In S&P's updated base-case scenario, these credit metrics
will trend toward 2.6x and 26% by year-end 2023, before further
improving to 2.5x and 27%, respectively, by 2024.

S&P said, "We think the key drivers for Cemex to strengthen its
credit metrics are that the company's cash conversion cycle will
remain solid and free operating cash flow (FOCF) will be between
$430 million and $550 million in 2023 and 2024. In our opinion,
such healthy cash flow would allow the company to continue reducing
its net debt and further strengthen its key credit metrics. In
addition, our performance expectations consider the continuity of a
prudent financial policy toward the use of debt, the capital
allocation strategy, and plans to resume shareholder returns."

As of June 2023, the company maintains an extended debt maturity
profile, with no significant maturities coming due in the next 24
months, with about $445.5 million in total debt. The company also
has access to about $1.1 billion in undrawn committed credit lines
with a maturity date in 2026.

S&P said, "In our view, Cemex has a track record of maintaining a
strong standing in capital markets and well-established and sound
relationships with banks. Moreover, its prudent policy to keep
access to committed credit facilities and a generally effective
cash management underpin its ample liquidity headroom. We think
Cemex's relatively low refinancing risks and increasing financial
flexibility support its improving credit profile.

"Environmental factors are a moderately negative consideration in
our credit analysis of Cemex because cement sales represent close
to half of its total revenue. The negative assessment reflects
increasing transition risks for the overall cement industry due to
rising environmental regulations to reduce carbon dioxide
emissions."




=====================
P U E R T O   R I C O
=====================

GAFC SERVICES: Case Summary & Six Unsecured Creditors
-----------------------------------------------------
Debtor: GAFC Services, LLC
        Carr 887 KM 0.2, Bo San Anton
        Carolina, PR 00987

Business Description: The Debtor owns two properties in Puerto
                      Rico valued at $1.98 million.

Chapter 11 Petition Date: August 18, 2023

Court: United States Bankruptcy Court
       District of Puerto Rico

Case No.: 23-02567

Judge: Hon. Mildred Caban Flores

Debtor's Counsel: Jacqueline Hernandez, Esq.
                  HERNANDEZ LAW OFFICES
                  PO Box 366431
                  San Juan, PR 00936-6431
                  Email: quiebras1@gmail.com

Total Assets: $2,245,501

Total Liabilities: $1,565,422

The petition was signed by Juan Carlos Arocha as president.

A full-text copy of the petition containing, among other items, a
list of the Debtor's six unsecured creditors is available for free
at PacerMonitor.com at:

https://www.pacermonitor.com/view/W6Q43RQ/GAFC_SERVICES_LLC__prbke-23-02567__0001.0.pdf?mcid=tGE4TAMA




=================
V E N E Z U E L A
=================

CITGO PETROLEUM: Venezuela Rejects Auction Process
--------------------------------------------------
Reuters reports that negotiators and officials representing
Venezuela are opposing a court-ordered auction of shares in a
parent of oil refiner Citgo Petroleum to pay creditors claiming
more than $10 billion from expropriations and debt defaults.

Some 20 creditors with arbitration awards or lawsuits against
Venezuela and its state oil company PDVSA asked a federal court in
Delaware to register their cases so they can participate in the
October-scheduled auction, according to Reuters.

The auction puts priority on when claims were filed, the report
notes.

Including interest and fees, the collective claims of companies
including Crystallex International, ConocoPhillips, Tenaris SA and
Exxon Mobil could exceed the market value of Citgo, the
Venezuela-owned U.S. refiner, which has recently been put at
between $10 billion and $13 billion, the report discloses.

The boards that supervise Citgo since the company severed ties with
its ultimate parent, Caracas-headquartered PDVSA, have
unsuccessfully sought to negotiate payments with some of the larger
creditors since last year, the report adds.

Marianna Parraga and Vivian Sequera
Wed, August 16, 2023, 2:34 AM GMT+8·2 min read
In this article:

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By Marianna Parraga and Vivian Sequera

HOUSTON/CARACAS, Aug 15 (Reuters) - Negotiators and officials
representing Venezuela are opposing a court-ordered auction of
shares in a parent of oil refiner Citgo Petroleum to pay creditors
claiming more than $10 billion from expropriations and debt
defaults.

Some 20 creditors with arbitration awards or lawsuits against
Venezuela and its state oil company PDVSA on Monday asked a federal
court in Delaware to register their cases so they can participate
in the October-scheduled auction. The auction puts priority on when
claims were filed.

Including interest and fees, the collective claims of companies
including Crystallex International, ConocoPhillips , Tenaris SA and
Exxon Mobil could exceed the market value of Citgo, the
Venezuela-owned U.S. refiner, which has recently been put at
between $10 billion and $13 billion.

The boards that supervise Citgo since the company severed ties with
its ultimate parent, Caracas-headquartered PDVSA, have
unsuccessfully sought to negotiate payments with some of the larger
creditors since last year.

"This is pointless, it is an unmanageable process," Horacio Medina,
the head of the board that supervises Citgo, said of the court's
decision to open the auction to all claimants, notes the report.
"What is the point . . . To show that Venezuela owes $150 billion
and cannot pay everyone? Why then to auction off an asset that
would make it possible to negotiate additional payments?"

The team representing Venezuela in the Delaware proceedings has
been "very limited" in its effort negotiate payments, especially
since the U.S. Treasury Department in March approved the
court-organized auction, Reuters notes.

Spokespeople for Citgo and the Department of Justice did not
immediately reply to requests for comment, Reuters says. The U.S.
Treasury declined to comment.

According to the report, U.S. Senator Bob Menendez has said he will
introduce a bill that would add Venezuela to the jurisdiction of
the Department of Justice's Foreign Claims Settlement Commission.
The move would ensure "an orderly process of adjudication for legal
claims of U.S. nationals against the Venezuelan government,"
according to his office.

That process could provide a fairer way to resolve the creditors'
claims. But it could arrive too late for stopping the auction in
Delaware, Medina said, Reuters relays.

Menendez's office did not immediately reply to a request for
comment.

Venezuelan President Nicolas Maduro, who has repeatedly criticized
the upcoming auction, rejected the way Citgo is being managed,
adding the company "has been kidnapped by the United States,"
Reuters says.

"They are simply stealing a company that is worth $12 billion and
that belongs to Venezuelans," he said in a broadcast event, notes
the report.

Venezuela's National Assembly in May formally rejected the U.S.
Treasury's approval of the auction, recounts Reuters.

                    About CITGO Petroleum

Citgo Petroleum Corporation is a United States-based refiner,
transporter and marketer of transportation fuels, lubricants,
petrochemicals and other industrial products.  Based in Houston,
Texas, Citgo is majority-owned by PDVSA, a state-owned company of
the Venezuelan government (although due to U.S. sanctions, in
2019,
they no longer economically benefit from Citgo.)

As reported in the Troubled Company Reporter-Latin America in June
2022, S&P Global Ratings affirmed its 'B-' long-term issuer credit
ratings on CITGO Holding Inc. and core subsidiary CITGO Petroleum
Corp.



===============
X X X X X X X X
===============

LATAM: Central Banks Take Lead in Cutting Rates as Inflation Cools
------------------------------------------------------------------
globalinsolvency.com, citing The Wall Street Journal, reports that
when global inflation surged in 2021, many of Latin America's
central bankers were the first to raise interest rates, moving
months before the Federal Reserve began tightening.

Recalling how hyperinflation topped 3,000% in some countries in the
1980s, central-bank economists from Brasilia to Lima to Mexico City
knew all too well the damage that soaring prices could cause,
according to the report.

Now, Latin America is again at the forefront of the cycle, cutting
rates as inflation comes back down, The Wall Street Journal
reported, the report relays.

Last month, Chile was the first major emerging-market country to
reduce interest rates in the current cycle as inflation eased from
14% last year to 6.5% in July, the report notes.

The central bank of Brazil, Latin America's biggest economy,
quickly followed, cutting its benchmark rate as inflation fell to
less than 4% from a 19-year high of 12% in April of last year, the
report says.  Central bankers from Mexico to Colombia and Peru are
expected to follow soon, economists say, 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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Chapman, Editors.

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