/raid1/www/Hosts/bankrupt/TCRLA_Public/230914.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
L A T I N A M E R I C A
Thursday, September 14, 2023, Vol. 24, No. 185
Headlines
B E R M U D A
DIGICEL GROUP: Chapter 15 Case Summary
B R A Z I L
EMBRAER SA: Egan-Jones Retains B Senior Unsecured Ratings
ITAU UNIBANCO: Fitch Corrects Aug. 2 Ratings Release
PETROLEO BRASILEIRO: Bought 175,000 Carbon Credits, Entered Market
D O M I N I C A N R E P U B L I C
DOMINICAN REPUBLIC: Cuts Economic Growth Projection to 3% in 2023
M E X I C O
PETROLEOS MEXICANOS: Raises Going Concern Doubt
P U E R T O R I C O
GRUPO HIMA SAN: Hires Luis R. Carrasquillo as Financial Advisor
GRUPO HIMA: U.S. Trustee Appoints Creditors' Committee
U R U G U A Y
MERCADOLIBRE INC: Egan-Jones Retains BB- Senior Unsecured Ratings
V E N E Z U E L A
VENEZUELA: Maduro Seeks to Renew Beijing Ties Amid Tensions
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B E R M U D A
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DIGICEL GROUP: Chapter 15 Case Summary
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Chapter 15 Debtor: Digicel Group Holdings Limited
Clarendon House, 2 Church Street
Hamilton, HM 11
Bermuda
Business Description: Digicel is a mobile phone network and
home entertainment provider operating in
25 markets worldwide.
Chapter 15 Petition Date: September 11, 2023
Court: United States Bankruptcy Court
Southern District of New York
Case No.: 23-11479
Judge: Hon. Judge John P. Mastando III
Foreign Representative: Lawrence Hickey
Clarendon House, 2 Church Street
Hamilton, HM 11
Bermuda
Foreign Proceeding: Scheme of Arrangement under the
Companies Act 1981, a Bermuda Statute,
pending before the Supreme Court of
Bermuda
Foreign
Representative's
Counsel: Timothy Graulich, Esq.
DAVIS POLK & WARDWELL LLP
450 Lexington Avenue
New York NY 10017
Tel: (212)450-4639
Email: timothy.graulich@davispolk.com
Estimated Assets: Unknown
Estimated Debt: Unknown
A full-text copy of the Chapter 15 is available for free at
PacerMonitor.com at:
https://www.pacermonitor.com/view/2KDP3TI/Digicel_Group_Holdings_Limited__nysbke-23-11479__0001.0.pdf?mcid=tGE4TAMA
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B R A Z I L
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EMBRAER SA: Egan-Jones Retains B Senior Unsecured Ratings
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Egan-Jones Ratings Company on August 31, 2023, maintained its 'B'
foreign currency and local currency senior unsecured ratings on
debt issued by Embraer SA. EJR also withdraws rating on commercial
paper issued by the Company.
Headquartered in Sao Jose dos Campos, State of Sao Paulo, Brazil,
Embraer SA manufactures and markets commercial, corporate, and
defense aircraft.
ITAU UNIBANCO: Fitch Corrects Aug. 2 Ratings Release
----------------------------------------------------
This is a correction of a release originally published Aug. 2,
2023. It describes the decision to widen the notching on Itau
Unibanco Holding S.A. Tier 1 notes to four notches (relative to its
anchor Viability Rating) to correct a past error, that was omitted
from the original release.
Fitch Ratings has upgraded the Long-Term (LT) Issuer Default
Ratings (IDRs) of 12 Brazilian financial institutions (FIs)
following the upgrade of Brazil's sovereign LT IDRs to 'BB'/Stable
from 'BB-'/Stable on July 26, 2023, and after the adjustment of
Fitch's assessment of the operating environment (OE) for Brazilian
banks to 'bb'/Stable from 'bb-'/Stable.
The OE upgrade reflects the positive trend in Fitch's core metrics
for the OE assessment and the Brazilian economy's sustained
recovery, translating to resilient banking sector performance.
Fitch's key metrics used to determine the country's OE score are
the Operational Risk Index (ORI) and GDP per capita. Both of these
metrics indicated a positive trend for Brazil as the OE recovered
from the recent macro challenges. The latest ORI was 51.3% compared
with 49.7% in 2022, while, as of YE2022, the GDP per capita was
USD8,905, compared with USD7,705 in 2021.
Today's rating action review includes Brazilian FIs whose IDRs are
either constrained at the same level or one notch above Brazil's
sovereign rating. The banks' National Ratings were not directly
affected, as these ratings reflect the relative strengths and
weaknesses of each institution in the domestic jurisdiction.
KEY RATING DRIVERS
Government Support-Driven FIs:
Caixa Econômica Federal (Caixa)
Banco do Brasil S.A. (BdB)
Banco Nacional de Desenvolvimento Econômico e Social (BNDES)
Banco do Nordeste do Brasil S.A. (BNB)
Banco da Amazônia S.A. (BdA)
The banks' IDRs in this group are driven by their GSRs which are
aligned to Brazil's sovereign ratings and, consequently, the
revision of their IDRs to `BB` with a Stable Outlook and the GSR to
'bb' mirrors the action taken on the LT IDRs of Brazil. In addition
to having their full (or major) ownership exercised by the
Brazilian federal government, these institutions have and important
and long-lasting policy role, as the agency considers they are key
agents for the implementation of government economic guidelines.
VR-Driven FIs Rated at or Above the Sovereign:
Banco Bradesco S.A. (Bradesco)
Itaú Unibanco S.A. (Itau)
Itaú Unibanco Holding S.A. (IUH)
Banco BTG Pactual S.A. (BTG)
BdB
Bradesco, IUH, Itau and BTG's IDRs are driven by their intrinsic
creditworthiness (or Viability Ratings [VRs]). BdB's IDRs are
driven by potential support, but the IDRs are further underpinned
by its VR. This group includes banks with consolidated business
profiles in the context of the domestic environment, but also with
strong links imposed by its historical ample exposure to the
sovereign.
Fitch has upgraded BdB's VR to 'bb' from 'bb-'. In the case of
Bradesco, Itau and IUH Fitch has upgraded their IDRs and VRs to
'BB+' and 'bb+', respectively, which are now one notch above the
sovereign level, reflecting their fairly diversified and very
strong credit profiles; their historical resilience, performing as
a safe haven in periods of economic uncertainty; and the relevant
roles they play in the Brazilian financial system. This also means
that they have robust financial cushions to absorb potential
outcomes from adverse external economic conditions compared with
entities rated at lower levels. Fitch has also upgraded Itau, IUH
and Bradesco's GSRs (to bb- from b+) following the same rating
action on Brazil's IDRs.
Fitch upgraded BTG's IDRs to BB from BB-. The bank's IDRs are in
line and driven by its standalone creditworthiness as measured by
its VR, which was also upgraded to 'bb' from 'bb-'. Prior to
today's rating actions, BTG IDRs were on Positive Outlook,
reflecting Fitch's view that maintenance of demonstrated
improvements in the bank's business and financial profile could
provide some upside potential for its rating over the near term.
However, the previously assigned VR was also one notch below the
implied VR, as Fitch rarely assigns a bank VR above the sovereign
rating. Following Brazil's sovereign rating action and the upgrade
on the bank's IDRs, the Outlook on the ratings is now Stable.
Shareholder Support Driven (Local and Foreign Owned) FIs:
Banco BOCOM BBM S.A. (BBM)
Banco Pan S.A. (Pan)
BTG Pactual Holding S.A. (BTGH)
IDRs on the institutions of this group are driven by the
Shareholder Support Rating (SSR), which reflects the likelihood of
receiving support from their respective parents (or driven by the
credit profile of their main operating subsidiary, as in the case
of BTGH), which are rated at or above the Brazilian sovereign
rating.
BBM's IDRs are driven by its SSR were upgraded to 'bb+' from 'bb'
and reflect Fitch's assessment of the expected institutional
support, in case of need, from its parent, Bank of Communications
Co., Ltd. (BOCOM; A/Stable). Its Long-Term Foreign Currency IDR was
upgraded to 'BB+'/Stable from 'BB'/Stable and is constrained by
Brazil's 'BB+' Country Ceiling, while their Long-Term Local
Currency IDR was upgraded to 'BBB-'/Stable from 'BB+'/Stable since
it remains capped at two notches above Brazil's Local Currency
sovereign rating (BB/Stable). BBM's VR has been affirmed at 'bb-'.
Fitch's view is that the propensity and ability of its parent to
provide support is linked to Brazilian sovereign risk and the
country ceiling, and might be reduced in case of extreme sovereign
stress, despite the group's strategic commitment to the country.
Pan's IDRs were also upgraded to 'BB'/Stable from 'BB-'/Positive
due to Fitch's understanding that this level of rating reflects
BTG's high propensity of support since both controller and
subsidiary operate in the same jurisdiction, are subject to the
same regulations, and, following the acquisition, are part of the
same regulatory group under the prudential regulation of Brazil's
central bank. Therefore, the SSR was also upgraded to 'bb' from
'bb-' and in Fitch's view, a lack of support would represent a high
reputational risk for the parent. The Stable Outlook on Pan's
Long-Term IDRs reflects the Outlook assigned to its parent. PAN's
VR has been affirmed at 'bb-'.
BTGH is a pure Holding company and its IDRs are the same level of
BTG's IDRs. The ratings equalization is based on the high
correlation between the credit risk of BTG and BTGH.
RATING SENSITIVITIES
Factors that Could, Individually or Collectively, Lead to Negative
Rating Action/Downgrade
Fitch considers that all FIs included in this review remain
constrained by the sovereign rating or by the usual maximum uplift
of one notch above the sovereign and, therefore, the main
sensitivities of all entities included in this action are linked to
potential changes in the sovereign ratings, in any direction.
Similarly, IDRs, which are derived from SSR or GSR, of the entities
mentioned in this report remain dependent on Fitch's view regarding
the ability and/or propensity of its ultimate parent in providing
support to the controlled entity/subsidiary in case of need and
will change depending on Fitch's opinion on it. For more details
and for the individual sensitivities derived from each institution
VR, please access the individual report of each entity.
Rating downside primarily would be also contingent on a downgrade
of the Brazilian sovereign rating or the OE.
Factors that Could, Individually or Collectively, Lead to Positive
Rating Action/Upgrade
Upside is contingent to an upgrade on the sovereign or the OE.
OTHER DEBT AND ISSUER RATINGS: KEY RATING DRIVERS
Debt Ratings
The senior unsecured issuances from BdB, BTG, IUH, Bradesco and
BNDES were also upgraded, reflecting the fact that default on
senior obligations equates to the default of the banks (as captured
by the issuer's IDR). The subordinated issuances from BTG and IUH
were also upgraded following the one notch upgrade on its
respective anchor ratings. BTG's rating of the T2 subordinated
notes remain two levels below its VR, reflecting the expected loss
severity.
IUH's additional Tier 1 (AT1) securities were affirmed at 'B'. With
this rating action, Fitch has increased the notching for the notes
to four from the anchor rating (from '3' previously) to correct an
error with respect to Fitch's assessment of the incremental
non-performance risks intrinsic to the notes relative to the anchor
rating, IUH's VR.
IUH's notes will defer coupon payments on a non-cumulative basis
when certain conditions are met (i.e. if regulatory capital ratios
fall below minimum levels or due to insufficient funds from profits
and profit reserves available for distribution).
The four notches below IUH's VR of 'bb+' is in accordance with
Fitch's baseline scenario and reflects the notes' higher expected
loss severity relative to senior unsecured creditors (two notches)
and higher non-performance risk (two notches). According to Fitch's
Criteria, the baseline notching for non-performance risk can be
reduced where there are very high constraints to non-performance
or, conversely, wider notching can be applied where capital buffers
over coupon omission triggers are low. Neither case applies with
these notes.
OTHER DEBT AND ISSUER RATINGS: RATING SENSITIVITIES
The senior unsecured debt ratings are sensitive to a change in
banks' IDRs. The hybrid ratings (for banks' Tier II subordinated
debt and AT1) are sensitive to a change in their anchor VR.
VR ADJUSTMENTS
Itau and IUH:
The Asset Quality score of 'bb' was assigned above the 'b' category
implied score because of the following adjustment reasons:
Collateral and Reserves (positive).
Bradesco:
The Asset Quality score of 'bb' was assigned above the 'b' category
implied score because of the following reason: Collateral and
Reserves (positive).
The Capitalization & Leverage score of 'bb-' has been assigned
above the 'b' category implied score because of the following
adjustment reasons: Reserve Coverage and Asset Valuation
(positive).
BTG:
The Asset Quality score of 'bb' has been assigned above the implied
'b' Asset Quality score due to the following adjustment reason:
Underwriting Standards and Growth (positive).
BdB:
The Asset Quality score of 'bb' was assigned above the implied
score of 'b' due to the following reason: Collateral and Reserves
(positive).
BBM:
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 Earnings & Profitability score of 'b+' has been assigned below
the implied 'bb' Earnings & Profitability score due to the
following adjustment reason: Revenue Diversification (negative).
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
International Entity's SSR and IDRs are linked to the IDRs of its
parent.
PAN´s SSR is linked to the IDRs of its parent's (BTG Pactual).
BOCOM BBM's IDRs and SSR are driven by support from the Bank of
Communications Co, Ltd. (BOCOM; LT FC IDR A/Stable) Caixa, BNB,
BNDES, BASA and Banco do Brasil's GSR and IDRs are linked to the
IDRs of Brazil.
Bradesco and IUH´s GSR are linked to the IDRs of Brazil.
ESG CONSIDERATIONS
Fitch assigns Caixa a ESG Relevance Score for 'Community Relations,
Social Access, Affordability' of '4[+]'. CAIXA's public sector
ownership supports its ability to attract low-cost retail deposits,
while its policy role ensures it retains a dominant position in the
low-income retail mortgage market. These factors considerably boost
CAIXA's franchise, strengthen its credit profile and have a
moderately positive impact on its ratings in conjunction with other
factors.
Fitch's ESG Relevance Score for Governance Structure for Caixa,
BNDES, BNB and BdA was changed to '3' from '4' reflecting
substantive enhancements to the companies' governance structure
over the past years and Fitch's expectation of overall stability in
the long-term strategy of the banks.
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+ Upgrade BB
ST IDR B Affirmed B
LC LT IDR BBB- Upgrade BB+
LC ST IDR F3 Upgrade B
Viability bb- Affirmed bb-
Shareholder Support bb+ Upgrade bb
Itau Unibanco
Holding S.A. LT IDR BB+ Upgrade BB
ST IDR B Affirmed B
LC LT IDR BB+ Upgrade BB
LC ST IDR B Affirmed B
Viability bb+ Upgrade bb
Government Support bb- Upgrade b+
Subordinated LT BB- Upgrade B+
senior
unsecured LT BB+ Upgrade BB
subordinated LT B Affirmed B
Banco PAN S.A. LT IDR BB Upgrade BB-
ST IDR B Affirmed B
LC LT IDR BB Upgrade BB-
LC ST IDR B Affirmed B
Viability bb- Affirmed bb-
Shareholder Support bb Upgrade bb-
Banco BTG
Pactual S.A. LT IDR BB Upgrade BB-
ST IDR B Affirmed B
LC LT IDR BB Upgrade BB-
LC ST IDR B Affirmed B
Viability bb Upgrade bb-
Government Support ns Affirmed ns
senior
unsecured LT BB Upgrade BB-
subordinated LT B+ Upgrade B
Banco do Brasil
S.A. LT IDR BB Upgrade BB-
ST IDR B Affirmed B
LC LT IDR BB Upgrade BB-
LC ST IDR B Affirmed B
Viability bb Upgrade bb-
Government Support bb Upgrade bb-
senior
unsecured LT BB Upgrade BB-
Banco Bradesco
S.A. LT IDR BB+ Upgrade BB
ST IDR B Affirmed B
LC LT IDR BB+ Upgrade BB
Viability bb+ Upgrade bb
Government Support bb- Upgrade b+
senior
unsecured LT BB+ Upgrade BB
Caixa Economica
Federal LT IDR BB Upgrade BB-
ST IDR B Affirmed B
LC LT IDR BB Upgrade BB-
LC ST IDR B Affirmed B
Government Support bb Upgrade bb-
Banco
Nacional de
Desenvolvimento
Economico e
Social (BNDES) LT IDR BB Upgrade BB-
ST IDR B Affirmed B
LC LT IDR BB Upgrade BB-
LC ST IDR B Affirmed B
Government Support bb Upgrade bb-
senior
unsecured LT BB Upgrade BB-
BTG Pactual
Holding S.A. LT IDR BB Upgrade BB-
ST IDR B Affirmed B
LC LT IDR BB Upgrade BB-
LC ST IDR B Affirmed B
Government Support ns Affirmed ns
Itau Unibanco
S.A. LT IDR BB+ Upgrade BB
ST IDR B Affirmed B
LC LT IDR BB+ Upgrade BB
LC ST IDR B Affirmed B
Viability bb+ Upgrade bb
Government Support bb- Upgrade b+
Banco da
Amazonia S.A. LT IDR BB Upgrade BB-
ST IDR B Affirmed B
LC LT IDR BB Upgrade BB-
LC ST IDR B Affirmed B
Government Support bb Upgrade bb-
Banco do
Nordeste do
Brasil S.A. LT IDR BB Upgrade BB-
ST IDR B Affirmed B
LC LT IDR BB Upgrade BB-
LC ST IDR B Affirmed B
Government Support bb Upgrade bb-
PETROLEO BRASILEIRO: Bought 175,000 Carbon Credits, Entered Market
------------------------------------------------------------------
Iolanda Fonseca at Rio Times Online reports that Petroleo
Brasileiro S.A. has bought 175,000 carbon credits and entered the
market. This move marks its entry into the voluntary carbon credit
market, according to Rio Times Online.
Each credit stops one ton of CO2 from entering the atmosphere, the
report notes. In total, this means 175,000 tons of greenhouse
gases are not released, the report relays.
The credits equal saving 570 hectares of the Amazon rainforest.
This is about the size of 800 soccer fields, the report discloses.
These credits come from the Envira Amazonia project in Feijo, Acre,
the report adds.
About Petrobras
Petroleo Brasileiro S.A. or Petrobras (in English, Brazilian
Petroleum Corporation - Petrobras) is a semi-public Brazilian
multinational corporation in the petroleum industry headquartered
in Rio de Janeiro, Brazil. Petrobras control significant oil and
energy assets in 16 countries in Africa, the Americas, Europe and
Asia. But, Brazil represents majority of its production.
The Brazilian government directly owns 54% of Petrobras' common
shares with voting rights, while the Brazilian Development Bank
and Brazil's Sovereign Wealth Fund (Fundo Soberano) each control
5%, bringing the State's direct and indirect ownership to 64%.
A corruption scandal was uncovered in 2014 that involved
Petrobras.
The scandal related to money laundering that involved Petrobras
executives. The executives were alleged to get received kickbacks
from overpriced contracts, to the tune of about $3 billion in
total. Over a thousand warrants were issued against politicians
and businessmen in relation to the scandal. In 2016, Marcelo
Odebrecht, CEO of Odebrecht, was sentenced to 19 years in prison
after being convicted of paying more than $30 million in bribes to
Petrobras executives.
In January 2018, Petrobras agreed to pay $2.95 billion to settle a
U.S. class action corruption lawsuit. In September 2018,
Petrobras agreed to pay $853.2 million to settle with Brazilian and
U.S. authorities.
In July 2022, Fitch Ratings affirmed Petrobras' BB- Long-Term
Issuer Default Rating. In addition, Fitch has revised the Rating
Outlook to Stable from Negative following a similar revision to
Brazil's Sovereign Rating Outlook. Also in July 2022, Egan-Jones
Ratings Company upgraded the foreign currency and local currency
senior unsecured ratings on debt issued by Petrobras to BB+ from
BB.
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D O M I N I C A N R E P U B L I C
===================================
DOMINICAN REPUBLIC: Cuts Economic Growth Projection to 3% in 2023
-----------------------------------------------------------------
Dominican Today reports that the Dominican government has once
again revised its economic growth projection for 2023, reflecting
increased uncertainty both internationally and domestically.
The initial estimate of 4.25% growth in March was later lowered to
4% in June, and further reduced to 3% in August, according to the
Ministry of Economy's Macroeconomic Panorama 2023-2027 report,
according to Dominican Today.
While economic activity saw a year-on-year growth of 2.9% in July
2023, the cumulative growth for the first seven months of the year
was only 1.4%, compared to 5.5% in July of the previous year, the
report notes. The Ministry of Economy attributes the expansion
registered until July to improvements in local manufacturing,
construction, commerce, and transport, possibly influenced by
liquidity provisions and reductions in the monetary policy rate
implemented by the Central Bank, the report relays.
Looking ahead to 2024, the economic outlook appears more positive,
albeit with a narrower range, the report says. The projected real
gross domestic product (GDP) expansion is anticipated to be between
4.50% and 5.00%, with a central projection of 4.75%, the report
notes. This represents a 0.25 percentage point reduction from the
previous forecast, the report discloses.
In terms of inflation, projections indicate a year-on-year rate of
4.0% for 2023, with an average of 4.75%, the report says. For
2024, both the closing rate and average inflation are expected to
be at 4.00%, falling within the outlined target range, the report
relates.
The average exchange rate for financial entities is predicted to
end in 2023 at 56.60 pesos per dollar, marking a 0.45 peso increase
from the June forecast, the report notes. The following year, the
average rate is expected to rise to 60.25 pesos per dollar, the
report discloses.
Despite economic challenges, the consensus among international
organizations is that the Dominican Republic will see growth of
3.9% in 2023 and 4.2% in 2024, making it one of the leading
performers in the region, the report notes. Projections for
2023-2025 are aligned between the Ministry of Economy, the Central
Bank of the Dominican Republic, and the Ministry of Finance, the
report adds.
About Dominican Republic
The Dominican Republic is a Caribbean nation that shares the island
of Hispaniola with Haiti to the west. Capital city Santo Domingo
has Spanish landmarks like the Gothic Catedral Primada de America
dating back 5 centuries in its Zona Colonial district. Luis Rodolfo
Abinader Corona is the current president of the nation.
TCRLA reported in April 2019 that Juan Del Rosario of the UASD
Economic Faculty cited a current economic slowdown for the
Dominican Republic and cautioned that if the trend continues,
growth would reach only 4% by 2023. Mr. Del Rosario said that if
that happens, "we'll face difficulties in meeting international
commitments."
An ongoing concern in the Dominican Republic is the inability of
participants in the electricity sector to establish financial
viability for the system.
On August 14, 2023, the TCR-LA reported that Moody's Investors
Service has changed the outlook on the Government of Dominican
Republic's ratings to positive from stable and affirmed the
local and foreign-currency long-term issuer and senior unsecured
ratings at Ba3.
Moody's said the key drivers for the outlook change to positive
are: (i) sustained high growth rates have enhanced the scale and
wealthclevels of the economy; and (ii) a material decline in the
government debt burden coupled with improved fiscal policy
effectiveness will support medium-term debt sustainability
The affirmation of the Ba3 ratings balances the Dominican
Republic's strong economic growth dynamics and relatively
contained
susceptibility to event risks, with a comparatively weaker fiscal
position, reflecting long-standing credit challenges which
include:
(i) a shallow revenue base compared to peers, (ii) weak debt
affordability metrics, and (iii) high exposure to foreign currency
borrowing.
S&P Global Ratings, in December 2022, raised its long-term foreign
and local currency sovereign credit ratings on the Dominican
Republic to 'BB' from 'BB-'. The outlook on the long-term ratings
is stable. S&P affirmed its 'B' short-term sovereign credit
ratings. S&P also revised its transfer and convertibility (T&C)
assessment to 'BBB-' from 'BB+'. The stable outlook reflects S&P's
expectation of continued favorable GDP growth and policy continuity
over the next 12-18
months that will likely stabilize the government's debt burden.
In February 2023, S&P said its BB ratings reflect the country's
fast-growing and resilient economy. It also incorporates the
country's historical political and social challenges in passing
structural reforms to contain fiscal deficits, despite recent
improvements in the electricity sector. The ratings are constrained
by relatively high debt, a hefty interest burden, and limited
monetary policy flexibility.
Fitch Ratings, in December 2022, affirmed the Dominican Republic's
Long-Term Foreign Currency Issuer Default Rating (IDR) at 'BB-'
with a Stable Rating Outlook.
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M E X I C O
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PETROLEOS MEXICANOS: Raises Going Concern Doubt
-----------------------------------------------
Petroleos Mexicanos delivered its Form 6-K report filed for the
month of September 2023 to the U.S. Securities and Exchange
Commission and disclosed that substantial doubt about its ability
to continue as a going concern exists.
PEMEX explained it has substantial debt, incurred mainly to finance
the capital expenditures needed to carry out its capital investment
projects and to fund its operating expenses. Due to its heavy
fiscal burden resulting from the payment of hydrocarbon extraction
duties and other taxes, the cash flows derived from PEMEX's
operations in recent years have not been sufficient to fully fund
its operations and capital expenditure programs, which have been
partially supported by the Mexican Government's equity
contributions. In addition, PEMEX's working capital has
deteriorated in recent years.
In 2022 and 2023, certain ratings agencies downgraded PEMEX's
credit rating, mainly driven by the effects of COVID-19, concerns
around the Company's operating performance and the Mexican
government's ability and willingness to provide the Company with
additional liquidity, as well the volatility of the crude oil
prices and the downgrade of the Mexican Government's sovereign debt
rating, impacting PEMEX's access to the financial markets, the cost
and terms of its new debt and contract renegotiations that the
Company may carry out during 2023. These conditions have negatively
impacted PEMEX's financial performance and also its liquidity
position.
As of June 30, 2023 and 2022, PEMEX recognized net income of Ps.
82,159,155 and Ps. 247,649,107, respectively. In addition, as of
June 30, 2023 and December 31, 2022, PEMEX had a negative equity of
Ps. 1,721,218,453, and Ps. 1,768,822,225, respectively, mainly due
to continuous net losses in prior years, and a negative working
capital of Ps. 517,157,488 and Ps. 401,842,480, as of June 30, 2023
and December 31, 2022, respectively.
PEMEX has budget autonomy, and is subject to the cash flows
financial balance goals approved in the Federal Expenditure Budget
Decree. This represents the difference between its gross revenues
(inflows) and its total budgeted expenditures (outflows) including
the financial cost of its debt, which is proposed by the Ministry
of Finance and Public Credit -- SHCP -- and approved by the Chamber
of Deputies. The Federal Budget for 2023 authorized PEMEX to have a
negative financial balance budget of Ps. zero. This shortfall does
not consider payments of principal of PEMEX's debt due in 2024
which will be covered by financing activities that do not represent
a net debt in terms of public debt greater than Ps. 29,912,400.
PEMEX has short-term debt principal maturities (including interest
payable) of Ps.516,455,816 as of June 30, 2023.
"The combined effect of the above-mentioned events indicates
substantial doubt about PEMEX’s ability to continue as a going
concern," the Company said.
About Petroleos Mexicanos
Mexico City, Mexico-based Petroleos Mexicanos -- PEMEX -- conducts
exploration and extraction of crude oil and other hydrocarbons in
the United Mexican States, as well as refining, processing,
storing, transporting, selling and trading in these products.
As of June 30, 2023, PEMEX has Ps. 2,125,918,872,000 in total
assets and Ps. 3,847,137,325,000 in total liabilities.
=====================
P U E R T O R I C O
=====================
GRUPO HIMA SAN: Hires Luis R. Carrasquillo as Financial Advisor
---------------------------------------------------------------
Grupo Hima San Pablo, Inc. and its affiliates seek approval from
the U.S. Bankruptcy Court for the District of Puerto Rico to employ
CPA Luis R. Carrasquillo & Co., P.S.C. as financial advisor.
The firm will assist the Debtor in the financial restructuring of
Debtor's affairs by providing advice in strategic planning and the
preparation of Debtor's plan of reorganization, disclosure
statement and business plan, and participating in negotiations with
Debtor's creditors.
The firm has received a retainer in the sum of $100,000.
Luis R. Carrasquillo, a partner at CPA Luis R. Carrasquillo & Co.,
assured the Court that the firm is a "disinterested person" as the
term is defined in Section 101(14) of the Bankruptcy Code and does
not represent any interest adverse to the Debtor and its estates.
About Grupo Hima San Pablo, Inc.
Grupo HIMA San Pablo, Inc. serves as a diversified healthcare
services holding company pursuant to a corporate reorganization of
several businesses related by common ownership. Through its
subsidiaries and affiliates, the Company primarily owns and
operates hospital facilities and other healthcare related
businesses. As of August 2023, the HIMA GROUP operates four
hospitals, with over 1,200 licensed beds, including an Oncological
Hospital, a multi-specialty physician practice management company,
Home Care Service (including infusion therapies and wound care), a
free-standing Ambulatory Center and a 16-Ambulance Service
Company.
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. D. P.R. Case No. 23-02510-EAG11) on August
15, 2023. In the petition signed by Armando J. Rodriguez-Benitez,
chief executive officer, the Debtor disclosed up to $1 billion in
assets and up to $500,000 in liabilities.
Judge Enrique S. Lamoutte Inclan oversees the case.
Wigberto Lugo Mender, Esq., at Lugo Mender Group, LLC, represents
the Debtor as legal counsel. Pietrantoni Mendez & Alvarez LLC as
special counsel.
GRUPO HIMA: U.S. Trustee Appoints Creditors' Committee
------------------------------------------------------
The U.S. Trustee for Region 21 appointed an official committee to
represent unsecured creditors in the Chapter 11 cases of Grupo HIMA
San Pablo, Inc. and its affiliates.
The committee members are:
1. Puerto Rico Hospital Supply Inc.
356 Fortaleza St. (2nd Floor)
San Juan, PR 00901
cacuprill@cuprill.com (External counsel Charles A. Cuprill,
Esq.)
787-977-0515 (External counsel)
2. Grupo de Radioterapia del Norte, PSC
P.O. Box 3145
Guaynabo, PR 00970
aps.law@live.com (External counsel Angel E. Portilla,
Esq.)
787-408-7777 (External Counsel)
3. Herminio Colon, Elizabeth Amaro, Jose Miguel Amaro,
Ivette Delgado, and minors Y.J.A., Z.S.G.A., and Y.M.G.A.
207 Del Parque St, 3rd Floor
San Juan, Puerto Rico 00912
jeffrey.williams@indianowilliams.com (Counsel Jeffrey
Williams, Esq.)
787-641-4545/4544 (Counsel)
4. Grupo Intensivo Pediatrico, CSP
252 San Jorge
San Jorge Bldg, Suite 406
San Juan, PR 00912
jmartinez@gmlex.net (External counsel Juan Martinez,
Esq.)
787-274-7404 (External counsel)
5. Neyza Cruz Cedeno and Savier Vazquez Oyola
203 Berry Tree P1
Brandon, FL 33510
jmartinez@gmlex.net (Counsel Juan Martinez, Esq.)
787-274-7404 (Counsel)
Official creditors' committees serve as fiduciaries to the general
population of creditors they represent. They may investigate the
debtor's business and financial affairs. Committees have the right
to employ legal counsel, accountants and financial advisors at a
debtor's expense.
About Grupo HIMA San Pablo, Inc.
Grupo HIMA San Pablo, Inc. serves as a diversified healthcare
services holding company pursuant to a corporate reorganization of
several businesses related by common ownership. Through its
subsidiaries and affiliates, the Company primarily owns and
operates hospital facilities and other healthcare related
businesses. As of August 2023, the HIMA GROUP operates four
hospitals, with over 1,200 licensed beds, including an Oncological
Hospital, a multi-specialty physician practice management company,
Home Care Service (including infusion therapies and wound care), a
free-standing Ambulatory Center and a 16-Ambulance Service
Company.
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. D. P.R. Case No. 23-02510-EAG11) on August
15, 2023. In the petition signed by Armando J. Rodriguez-Benitez,
chief executive officer, the Debtor disclosed up to $1 billion in
assets and up to $500,000 in liabilities.
Judge Enrique S. Lamoutte Inclan oversees the case.
Wigberto Lugo Mender, Esq., at Lugo Mender Group, LLC, represents
the Debtor as legal counsel.
=============
U R U G U A Y
=============
MERCADOLIBRE INC: Egan-Jones Retains BB- Senior Unsecured Ratings
-----------------------------------------------------------------
Egan-Jones Ratings Company on August 21, 2023, maintained its 'BB-'
foreign currency and local currency senior unsecured ratings on
debt issued by MercadoLibre, Inc. EJR also withdraws rating on
commercial paper issued by the Company.
Headquartered in Montevideo, Uruguay, MercadoLibre, Inc. operates
an online trading site for the Latin American markets.
=================
V E N E Z U E L A
=================
VENEZUELA: Maduro Seeks to Renew Beijing Ties Amid Tensions
-----------------------------------------------------------
RJR News reports that Venezuela's President Nicolas Maduro is in
China, his first visit in five years, to renew engagement between
the two countries.
China, the world's largest oil importer, is Venezuela's largest
creditor and a key customer and player in the OPEC member's energy
industry, which has the world's largest proven crude reserves,
according to RJR News.
Energy trade, debt repayment and new financing are reportedly the
main focus of the September 8 to 14 visit, the report notes.
About Venezuela
Venezuela, officially the Bolivarian Republic of Venezuela, is a
country on the northern coast of South America, consisting of a
continental landmass and a large number of small islands and
islets in the Caribbean sea. The capital is the city of Caracas.
Hugo Chavez was president to Venezuela from 1999 to 2013. The
Chavez presidency was plagued with challenges, which included a
2002 coup d'etat, a 2002 national strike and a 2004 recall
referendum. Nicolas Maduro was elected president in 2013 after
the death of Chavez. Maduro won a second term at the May 2018
Venezuela elections, but this result has been challenged by
countries including Argentina, Chile, Colombia, Brazil, Canada,
Germany, France and the United States who deemed it fraudulent and
moved to recognize Juan Guaido as president.
The presidencies of Chavez and Maduro have challenged Venezuela
with a socioeconomic and political crisis. It is marked by
hyperinflation, climbing hunger, poverty, disease, crime and death
rates, social unrest, corruption and emigration from the country.
Moody's has withdrawn 'C' local currency and foreign currency
ceilings for Venezuela in September 2022. Standard & Poors has
also withdrawn its 'SD/D' foreign currency sovereign credit
ratings and 'CCC-/C' local currency ratings on Venezuela in
September
2021 due to lack of sufficient information. Fitch withdrew its
own
'RD/C' Issuer Default Ratings on Venezuela in June 2019 due to the
imposition of U.S. sanctions on the country's government.
*********
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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