/raid1/www/Hosts/bankrupt/TCRLA_Public/231002.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
Monday, October 2, 2023, Vol. 24, No. 197
Headlines
A R G E N T I N A
ARGENTINA: Congress OKs Bill to Eliminate End Income Tax
LA RIOJA: Fitch Lower LongTerm Local Currency IDR to 'CC'
B E R M U D A
HIGHLANDS HOLDINGS: Fitch Affirms 'BB' Rating on $521MM PIK Notes
B R A Z I L
PETRO RIO SA: Fitch Hikes LongTerm IDRs to 'BB', Outlook Stable
USIMINAS: Fitch Affirms 'BB' LongTerm IDRs, Outlook Stable
C O L O M B I A
FRONTERA ENERGY: S&P Affirms 'B+' ICR & Alters Outlook to Stable
UNE EPM: Fitch Lowers LongTerm IDRs to 'CCC'
UNE EPM: Moody's Withdraws 'B1' Corporate Family Rating
D O M I N I C A N R E P U B L I C
DOMINICAN REPUBLIC: World Bank Cites Weaknesses of Administration
J A M A I C A
JAMAICA: Economy Grew 2.3% in Second Quarter
NCB FINANCIAL: Growing Concern on Settlement for Former Execs
P A N A M A
PANAMA: IDB OKs $60M-IDB Loan to Modernize Justice System
P U E R T O R I C O
ESJ TOWERS: Seeks 45-Day Extension to File Chapter 11 Plan
X X X X X X X X
[*] BOND PRICING COLUMN: For the Week Sept. 25 to Sept. 29, 2023
- - - - -
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A R G E N T I N A
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ARGENTINA: Congress OKs Bill to Eliminate End Income Tax
--------------------------------------------------------
Patrick Gillespie at Bloomberg News reports that Buenos Aires Times
reports that Argentina's Congress has approved a bill that will
eliminate income taxes for almost all formal workers, a measure
poised to put more pressure on a ballooning fiscal deficit that's
underpinning 124 percent inflation before October's presidential
elections.
By a 38-27 vote, the Senate approved the legislation advocated by
Economy Minister and presidential candidate Sergio Massa, whose
coalition placed third in the August primary vote, according to
Bloomberg News. President Alberto Fernandez is expected to sign it
into law, the report notes. Argentines cast their ballots October
22, the report relays.
While Massa had already temporarily exempted 99 percent of
salaried, payroll workers from income taxes by decree, the
legislation permanently eliminates income taxes, the report
discloses. Only workers who earn the equivalent of 15 federal
minimum wages - 1.77 million pesos per month (US$5,057) - will
continue paying income taxes, a fraction of the workforce, the
report says. To be sure, a new government takes office December
10., and could reverse the measure, the report notes.
As he cuts taxes, Massa is attempting to recoup lost electoral
ground by spending heavily, the report discloses. He's giving
millions of informal workers handouts, increasing social security
pay-cheques and upping salaries for public sector employees, the
report says. All that, economists estimate, will cost two trillion
pesos (US$5.7 billion) that will be largely financed with Central
Bank money printing that will fuel future inflation, the report
notes.
The lost revenue via income taxes, combined with increased fiscal
spending, heightens risks to Argentina's US$44-billion program with
the International Monetary Fund after Massa had committed to
austerity in August, the report relays.
"The recently adopted policy measures and announcements add to
Argentina's challenges," IMF chief spokesperson Julie Kozack said
at a press conference in Washington, the report notes. "The
economic situation remains very challenging and complex," 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.
The IMF's executive board completed on August 23, 2023, the fifth
and six reviews of Argentina's 30-month Extended Fund Facility
(EFF), and approved a US$7.5-billion disbursement to Argentina as
part of the larger program, which refinances payments Argentina
owes the institution from a previous bailout that failed to
stabilize the economy in 2018. Argentina would receive another IMF
disbursement in November of about US$2.75 billion pending another
staff-level agreement and board approval.
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.
LA RIOJA: Fitch Lower LongTerm Local Currency IDR to 'CC'
---------------------------------------------------------
Fitch Ratings has affirmed the Province of La Rioja, Argentina's
Long-Term Foreign Currency Issuer Default Rating (IDR) at 'CC'.
Fitch has also affirmed the rating for La Rioja's step-up USD318.42
million senior unsecured notes due 2028 at 'CC'. The bonds are
rated at the same level as the province's IDR. In addition, Fitch
has downgraded La Rioja's Long-Term Local Currency IDR to 'CC' from
'CCC-'. La Rioja's standalone credit profile (SCP) is assessed at
'cc'.
La Rioja's SCP of 'cc' reflects Fitch's expectations that actual
debt service coverage ratio (ADSCR) is expected to remain below 1x
in the next 12 months and in Fitch's 2024 horizon. The province has
to face capital debt services of USD77 million in 2024, USD26
million in February and USD51 million in August. The rating
considers the current context of macroeconomic vulnerability, high
debt relative to its operating balance, high exposure to
discretionary transfers from the national government. Fitch relied
on its rating definitions to position the province's SCP and
ratings.
KEY RATING DRIVERS
Risk Profile: 'Vulnerable'
Fitch assesses the province's Risk Profile as 'Vulnerable' in line
with other Fitch-rated Argentine local and regional governments
(LRGs). La Rioja's risk profile combines all six factors assessed
at Weaker (revenue, expenditure, and debt and liquidity frameworks)
and considers the sovereign IDR.
The assessment reflects Fitch's view that there is a very high risk
of the issuer's ability to cover debt service with the operating
balance weakening unexpectedly over the scenario horizon
(2023-2024) due to lower revenue, higher expenditure or an
unexpected rise in liabilities or debt-service requirement.
Revenue Robustness: 'Weaker'
The assessment reflects the evolving nature of the national fiscal
framework, dependence on a 'CC' sovereign counterparty risk for
91.5% (three year-average) of its total revenue, amid an adverse
macroeconomic environment riddled with higher inflation. To date,
as per law, federal co-participation transfers have never been
interrupted to provinces.
La Rioja is historically exposed to national budgetary transfers
that receives as compensation for the decrease in its
co-participation coefficient in 1994. Although these are
extra-budgetary national resources, they maintain a high degree of
discretion. Co-participation regime represents 73.6% (three
year-average) of the operating income, and is also high dependency
on national budgetary transfers: 17.8% (three year-average) of the
operating income.
In 2022, federal non-earmarked transfers (co-participaciones) to La
Rioja increased 8.1% in real terms, and the national budgetary
transfers also increased 29% in real terms, amid an inter-annual
average inflation rate of 70.7%.
Revenue Adjustability: 'Weaker'
Fitch considers, for Argentine LRGs, that local revenue
adjustability is low, and, challenged by the country's large and
distortive tax burden and the weak macroeconomy, that impact
affordability. National GDP recovered 10.4% in real terms during
2021 and in 2022 a further 5.2%; economic inertia from recovery
continued benefiting local tax collection. La Rioja's ability to
generate additional revenue in response to possible economic
downturns is further limited by its high dependency on transfers
and its small tax base. On its rating case, Fitch expects operating
revenues to increase below the average inflation rate for
2023-2025.
Local collection revenues represent only 7.7% % (three
year-average) of the operating income, which reduces the province's
flexibility on the revenue side, especially in a province with low
social indicators compared to the rest of the country, and a weak
private sector.
Expenditure Sustainability: 'Weaker'
Argentine LRGs have high expenditure responsibilities, in a context
of structurally high inflation. The country's fiscal regime is
structurally imbalanced regarding revenue-expenditure
decentralization. La Rioja has managed to contain opex growth
relative to inflationary pressures in 2020. From 2021, due to
salary wages recompositing above inflation, the operating balances
have been decreasing and converging to historic levels.
Despite this, operating balance reached 13.3% of operating revenue
in 2022, the province has shown volatile operating margins; with a
five year-average 9.8%. On its rating case, Fitch expects a
re-composition of expenditure above inflation levels for 2023 (in
the context of a national and provincial election year), with an
average operating margin of 5.5% for 2023-2025. La Rioja is among
the provinces that transferred its pension system to the national
government and, therefore, is not pressured by pension deficits.
Expenditure Adjustability: 'Weaker'
For Argentine subnationals, infrastructure needs and expenditure
responsibilities are deemed high, with leeway to cut expenses
viewed as low amid an adverse macroeconomic context. National capex
is low and insufficient translating capex burdens to LRGs. Capex
levels recovered to 20.8% in 2022 above the five-year average of
14.7%. In 2022, opex represented 80.3% of total expenditure and
staff expenses remained high at 50.1%, below to the historical
average of 53.2% for 2018-2022.
Liabilities and Liquidity Robustness: 'Weaker'
Unhedged foreign currency debt exposure is an important weakness
considered, along with the weak national framework for debt and
liquidity and underdeveloped local market. The assessment also
considers a 'CC' sovereign that restructured its debt during 2020,
thus curtailing external market access to LRGs.
During 2020, La Rioja executed a distressed debt exchange (DDE)
process and restructured the USD senior unsecured notes. La Rioja's
DDE, concluded in September 2021, was a protracted process and
involved a default event that took one year to be solved.
Refinancing risk is expected to remain controlled until 2024 as a
result of the recent DDE completion. The province will face
debt-capital payments starting in February 2024. One of the major
achievements, among others, was the reprofiling of its
international financial notes and step-up interest payments.
Over the next three years, principal payments on their U.S. dollar
notes range from USD53.7 million in 2024 to USD75.6 million each
year from 2025 to 2027, and USD37.8 million in 2028. The external
market remains closed; hence, the province is looking for local
alternative sources of financing to accomplish its capex program.
In this context, in June 2023, the province issued local debt
securities for USD55 million. They are denominated in US dollars
but were integrated and payable in pesos at the official exchange
rate. The purpose of the issue, which is considered a Green Bond,
is to finance the Arauco I Solar Park project.
The senior unsecured notes were initially issued to finance the
construction of Wind Parks (Parque Eolico Arauco) and the
expectation was that the province would be able to generate
revenues through a mirror loan with the parks that would finally be
used to repay the bonds (though revenues were not formally
secured). The Wind Parks is not yet fully operational, requiring
further investments, and currently generate a low level of
revenues. During 2023, in a context of high liquidity pressure, the
park has made some prepayments to the province (USD26.6 million).
Liabilities and Liquidity Flexibility: 'Weaker'
Fitch perceives the Argentine national framework in place for
liquidity support and funding available to subnationals as
'Weaker', as there are no formal emergency liquidity support or
bail-out mechanisms established. Weak sovereign counterparty at
'CC'. For liquidity, Argentine LRGs rely mainly on their own
unrestricted cash. In YE 2022, La Rioja's unrestricted cash totaled
around ARS8.1 billion.
Debt Sustainability: 'a' category
Fitch, considering the current sovereign 'CC' rating level,
curtailment of the external market amid a volatile macroeconomic
and regulatory context, is only projecting a rating case for YE
2025. Debt sustainability metrics are analyzed to evaluate La
Rioja-specific debt repayment capacity and its liquidity position
in the next 12 months.
The score considers a 'aa' primary payback ratio of 5.6x for 2024
under Fitch's rating case. Also, debt sustainability considers an
override from the 'b' actual debt service coverage ratio (ADSCR) of
0.7x in 2024. Debt sustainability metrics are analyzed to evaluate
province specific debt repayment capacity and its liquidity
position in the next 12 months.
The overall debt sustainability score at 'a' is underpinned by the
medium-term maturity of debt in tandem with high refinancing risks
stemming from a 'CC' macroeconomic environment where transfer and
convertibility risks prevail.
ESG - Creditor Rights: In comparison to other argentine LRGs, La
Rioja's DDE, concluded in September 2021, was a protracted process
and involved a default event that took one year to be solved. The
agreement granted the province a debt service relief, both through
reduced interests and postponement of capital repayments; however,
this affected bondholders. Therefore, creditor rights remain a key
rating driver.
DERIVATION SUMMARY
The Province of La Rioja's 'cc' SCP reflects rating definitions
that consider the province's very high level of credit risk, given
its pressured debt service coverage ratio over the next 12-24
months. La Rioja's risk profile is assessed as 'Vulnerable', while
its debt sustainability is assessed at 'a'. The rating is based on
Fitch's rating definitions. Fitch classifies La Rioja as a type B
LRG, as it covers debt service from cash flow on an annual basis.
The assessment reflects (i) the province's high exposure to
discretionary transfers, in comparison with other argentine LRGs,
stemming from a 'CC' sovereign that could jeopardize its operating
margin trend, pushing the actual debt service coverage ratio; (ii)
La Rioja's high debt level relative to its operating balance; (iii)
and protracted negotiations to conclude a DDE in comparison to
other Argentine LRGs.
The SCP also factors in national and international peer comparison,
in particular Province of Neuquen (CC), Province of Chubut (CC),
and Manisa Metropolitan Municipality (B/Negative). Fitch does not
apply any asymmetric risk or ad-hoc support from the central
government and assesses intergovernmental financing as neutral to
the province's ratings.
Debt Ratings
The Province of La Rioja's senior secured step-up notes of
USD318.42 million due in 2028 are positioned at 'CC', the same
level as the province's IDRs.
KEY ASSUMPTIONS
Qualitative Assumptions:
Risk Profile: 'Vulnerable'
Revenue Robustness: 'Weaker'
Revenue Adjustability: 'Weaker'
Expenditure Sustainability: 'Weaker'
Expenditure Adjustability: 'Weaker'
Liabilities and Liquidity Robustness: 'Weaker'
Liabilities and Liquidity Flexibility: 'Weaker'
Debt Sustainability: 'a'
Support (Budget Loans): 'N/A'
Support (Ad Hoc): 'N/A'
Asymmetric Risk: 'N/A'
Sovereign 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 2023-2025 projected
ratios. The key assumptions for the scenario include:
- Operating revenue average growth of 126% for 2023-2025; assuming
growth below average inflation towards the medium term.
- Operating expenditure average growth of 135.4% for 2023-2025;
assuming growth above average inflation towards the medium term.
- Average capex/total expenditure levels of around 13%; close to
the 2018-2022 historical average of 14.7%.
- Cost of debt considers non-cash debt movements due to currency
depreciation with an average exchange rate of ARS301.1 per U.S.
dollar for 2023, ARS775.8 for 2024 and ARS1,746.1 for 2025;
- Consumer price inflation (annual average % change) of 124.1% for
2023, 142% for 2024, 122% for 2025.
RATING SENSITIVITIES
Factors that could, individually or collectively, lead to positive
rating action/upgrade:
- An improved operating balance that strengthens the actual debt
service coverage ratio above 1.0x on a sustained basis, fueled by a
containment in the operating expenditure front.
Factors that could, individually or collectively, lead to negative
rating action/downgrade:
- Signs of deeper liquidity stress that could compromise debt
repayment capacity in the short to medium term, including evidence
of increased refinancing risk in its local and foreign currency
debt; as well as any regulatory restrictions to access FX by LRGs.
- The FC IDR would be downgraded if there are indications of any
credit event that reflects a near default situation.
LIQUIDITY AND DEBT STRUCTURE
By YE 2022, direct debt increased by about 70.6% underpinned by
high inflation and currency depreciation, totaling ARS66.9 billion.
Approximately 92.4% of La Rioja's direct debt is denominated in
foreign currency and is unhedged, mainly in U.S. dollars, which is
a rating risk in the current environment of high inflation and
currency depreciation. However, 99.9% of La Rioja's total debt has
fixed interest rates.
ISSUER PROFILE
La Rioja is located in the northeast region of Argentina and has a
GDP of around USD2 billion, or less than 1% of national GDP. Due to
its relatively small size, public sector employees represent almost
one third of the local economy. The province reports below average
income of around USD5,200 per capita. The population is growing in
line with the national average with limited pressure on
infrastructure.
SUMMARY OF FINANCIAL ADJUSTMENTS
No material adjustments were made to figures reported by the
province.
ESG CONSIDERATIONS
La Rioja has an ESG Relevance Score of '5' for Creditor Rights due
to the province's protracted DDE and Fitch's expectation that
fiscal challenges at the national and local level will continue to
hinder the province's future ability to repay its debt obligations,
and therefore has a negative impact on the credit profile. This
expectation still weighs in the rating assignment; therefore,
creditor rights remains a key rating driver.
The province has an ESG relevance score of '4' for Rule of Law,
Institutional & Regulatory Quality, Control of Corruption as it
presents weak management practices and regulations toward its
financial obligations, which has a negative impact on the credit
profile, and is relevant to the ratings 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.
Entity/Debt Rating Prior
----------- ------ -----
La Rioja, Province of LT IDR CC Affirmed CC
LC LT IDR CC Downgrade CCC-
senior unsecured LT CC Affirmed CC
=============
B E R M U D A
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HIGHLANDS HOLDINGS: Fitch Affirms 'BB' Rating on $521MM PIK Notes
-----------------------------------------------------------------
Fitch Ratings has affirmed the 'BB' rating on the $521 million
7.625% cash interest/8.375% PIK interest senior secured PIK toggle
notes due 2025 issued by Highlands Holdings Bond Issuer, Ltd.
(HHBI).
KEY RATING DRIVERS
Apollo Ownership: HHBI is a Bermuda-exempted company formed by
Apollo Global Management, Inc. to issue the notes in October 2020
($500 million original issue amount). HHBI is a sister company of
Highlands Bermuda Holdco, Ltd. (HBH), with both companies owned by
AP Highlands Holdings, L.P. (62.1% ownership of HBH and HHBI)/AP
Highlands Co-Invest, L.P. (37.9% ownership of HBH and HHBI)
(collectively APH). APH are the Apollo investment funds that own
Aspen Insurance Holdings Limited (AIHL) through HBH. HHBI on-lent
the net proceeds from the offering to APH, with $313 million
contributed to HBH to provide additional capital to the AIHL
operating group.
Elevated Default Risk: The 'BB' rating is set at the implied HBH
Issuer Default Rating (IDR), which reflects an average recovery
assumption. Fitch considers the default risk for HHBI and HBH to be
the same given the security interest collateral that HHBI has in
APH's shareholdings in HBH. The 'BB' rating is three notches below
an implied AIHL IDR to reflect elevated default risk due to the
remoteness from AIHL's operating company cash flows and the
relatively short-term tenor of the notes (2025) that creates
refinancing risk.
Structural Subordination: The notes are general senior secured
obligations of HHBI and rank structurally subordinated to all
existing and future obligations of HBH and AIHL (and its
subsidiaries), including AIHL's $300 million 4.65% senior notes due
2023 and its $775 million of perpetual preferred equity. The notes
are structured to be isolated from AIHL's regulated group, with
cross defaults not applicable to AIHL and its subsidiaries.
In addition, a breach of the covenants by HBH and AIHL (and its
subsidiaries) will not constitute a default of HHBI to the extent
doing so would materially and substantially negatively affect the
management and business of AIHL and its subsidiaries or if it is
necessary in order for AIHL and its subsidiaries to comply with
applicable laws or a request from a relevant regulator.
Interest is Cash or PIK: As a payment in kind (PIK) toggle, HHBI
has discretion to pay interest entirely in cash, entirely through
issuing additional notes or a split of cash and additional notes.
The PIK feature adds risk with interest deferrals that increase
HHBI's indebtedness. HHBI paid the first April 2021 interest
payment in cash, with PIK interest in October 2021 and cash
interest in April 2022, October 2022 and April 2023 from dividends
paid by AIHL ($40 million annual). Future payments could be either
cash or PIK.
Dividends from Aspen: HHBI is a holding company with no
revenue-generating operations and no independent operations. Thus,
in order to satisfy the cash payment obligations under the notes,
HHBI primarily relies on dividends provided by the AIHL operating
subsidiaries to AIHL that flow through HBH and then APH. The AIHL
operating subsidiaries have no obligation to make such funds
available and they may be prohibited from doing so by regulators
under certain circumstances. Aspen Bermuda Limited serves as the
main source of dividend capacity, with $262.1million available at
Dec. 31, 2022.
Security Interest in Aspen: The notes' security interests include
APH's shares in HHBI and HBH. However, AIHL maintains the first
claim on its operating companies and HHBI has no recourse to AIHL
or its subsidiaries. Enforcement of the share pledges and charges
that make up the substantial portion of the collateral will require
prior approval from regulatory bodies and may not result in any
recovery. The notes are not guaranteed by HBH or its subsidiaries.
RATING SENSITIVITIES
Factors that could, individually or collectively, lead to a
negative rating action/downgrade:
- A lowering of the underlying implied ratings of AIHL and/or its
subsidiaries;
- Breaching the terms of the indenture governing the notes;
- Heighted concerns regarding HHBI's ability and/or willingness
to execute on a refinancing or repayment of the notes.
Factors that could, individually or collectively, lead to a
positive rating action/upgrade:
- An increase in the underlying implied ratings of AIHL and/or
its subsidiaries.
Criteria Variation
HHBI's rating reflects an adjustment of the application of criteria
where the default risk and the methodology applied to it are both
included within the scope of the criteria, but where the analysis
described in the criteria requires modification to address factors
specific to HHBI.
Under Fitch's Insurance Rating Criteria, higher default risk
results in additional IDR notching. Specific to HHBI, the implied
HBH IDR is set 1 rating category (3 notches) below an implied AIHL
IDR to reflect elevated default risk at HBH due to the remoteness
from AIHL's cash flows and the relatively short-term five-year
tenor of the notes that creates refinancing risk.
ESG CONSIDERATIONS
HHBI has an ESG Relevance Score of '4' for Group Structure due to a
more complex structure than market norms given its relationship and
related party transactions with HBH and AIHL (and its
subsidiaries). This has a negative impact on the credit profile and
is relevant to the ratings 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.
Entity/Debt Rating Prior
----------- ------ -----
Highlands Holdings
Bond Issuer, Ltd.
senior secured LT BB Affirmed BB
===========
B R A Z I L
===========
PETRO RIO SA: Fitch Hikes LongTerm IDRs to 'BB', Outlook Stable
---------------------------------------------------------------
Fitch Ratings has upgraded Petrorio Luxembourg Trading S.a.r.l.'s
Long-Term Foreign Currency Issuer Default Rating (IDR) to 'BB' from
'BB-'. The Rating Outlook is Stable.
In addition, Fitch has upgraded the following ratings:
- PRIO S.A. (PRIO) Long-Term Foreign and Local Currency IDRs to
'BB' from 'BB-'. The Rating Outlook is Stable;
- Petrorio Luxembourg Trading S.a.r.l. $600 million senior secured
notes due 2026 to 'BB' from 'BB-'.
The upgrades reflect the increased production of nearly 100,000
boed, material increase in gross 1P reserves exceeding 650 million
boe, while maintaining its robust financial metrics, low cost
production profile, and low leverage estimated to be below 1.0x
through the rating horizon.
KEY RATING DRIVERS
Improved Reserve Profile: PRIO has materially improved its 1P
reserve profile, reporting 1P reserves in excess of 650 million
boe. PRIO's 1P reserve life is strong, estimated to exceed 17 years
in 2023, and a PDP reserve life was estimated at more than eight
years; both ratios are strong for the 'BB' rating category, even
under a conservative scenario of no reserve replacement in the five
years covered in the rating horizon. The company is well positioned
to maintain its production metrics beyond 2026.
Production Profile: PRIO's production size increased materially
with the acquisition of Albacora Leste in early 2023. Fitch expects
that production for 2023 will exceed 95,000 boed, a material
increase from the modest output of approximately 41,000 bbld in
2022. Fitch expects that PRIO's production will remain at that
level through the rating horizon. Current assets under operation
include the Frade field and the Polvo and TBMT cluster,
representing roughly 2/3 of expected total production in 2023, and
Albacora Leste contributing the 1/3. Fitch estimates that after a
full year operation of Wahoo in 2025, production will exceed
120,000 boed.
Low Leverage: After PRIO's leverage peaked at 1.7x debt to EBITDA
in 2022, Fitch expects leverage to remain below 1.0x through the
rating horizon. The rating case assumes total debt of USD 1.4
billion in 2023 and USD 1.0 billion in 2024. Leverage metrics are
supported by strong Brent prices assumed at $80 bbl in 2023 and $75
bbl in 2024. Fitch expects gross leverage measured as total debt to
1P reserves, pro forma for the Albacora Leste acquisition, to be
$1.4/bbl on average through 2026, which compares favorably to
peers, which averaged $7.00/bbl at YE 2022.
Competitive Cost Structure: PRIO has a competitive cost production
profile that allows it to remain profitable at low market prices.
Fitch estimates the company's half-cycle cost was $16.11 bbl in
2022, and its full-cycle cost of production, which is defined as
the half-cycle cost plus the three-year average FD&A for 1P of
$24.51 bbl. For 2023, PRIO's estimated half-cycle cost of $15.29
bbl is lower than peers, which average $20.43 bbl. The difference
in cost profile is mostly attributed due to PRIO having high
production levels that allows economies of scale; a business model
based on low-cost extraction; and PRIO's interconnection projects
between nearby clusters, which translate into cost-savings and
lower emissions.
Financial Flexibility and Liquidity: Fitch's rating case assumes
PRIO will have conservative financial policies. Over the rating
horizon, funds from operations should cover capex by an average of
3.4x under Fitch's price deck assumption. Further, a strong reserve
profile gives the company flexibility to allocate capital in the
event of price volatility. PRIO's competitive cost of production
also helps offset the need to enter hedging contracts, further
enhancing financial flexibility and liquidity.
Parent Guaranty: The $600 million 2026 bond is issued by Petrorio
Luxembourg Trading S.a.r.l., fully guaranteed by PRIO S.A. (parent
company and herein assigned a BB/Stable). Per Fitch's
"Parent-Subsidiary Linkage Criteria," a full parent guarantee
warrants a "strong" Legal Incentive designation, which in turn
equalizes the issuer's rating with that of the parent-guarantor.
DERIVATION SUMMARY
PRIO's credit and business profile compare to that of other small
independent oil producers in Latin America. The ratings of
SierraCol (B+/Stable), Geopark (B+/Negative), Frontera Energy
Corporation (B/Stable), and Gran Tierra Energy International
Holdings Ltd. (B/Stable) are all constrained to the 'B' category or
below due to the inherent operational risk associate with small
scale and low diversification of their oil and gas production.
PRIO's production profile compares favorably with other 'B' rated
Latin American oil exploration and production companies. Over the
rating horizon, Fitch expects PRIO's production will average
104,000 bbld. This figure almost doubles that of Geopark and
Frontera, both of which Fitch expects will average 40,000 bbld, and
is also significantly higher than SierraCol and Gran Tierra Energy,
which range from 30,000 bbld to 40,000 bbld.
PRIO's PDP reserve life of 14.3 years and 1P reserve life of 44.8
years in 2022 compares favorably to SierraCol at 3.3 years and 5.1
years, Frontera at 2.6 years and 7.3 years, Geopark at four years
and 5.4 years, and Gran Tierra at 4.2 years and 7.5 years.
PRIO's half-cycle production cost was $16.11/bbl in 2022 and
full-cycle cost was $24.51/bbl, in line with other producers. The
lowest cost onshore producer in the region, Geopark, has a cost
profile of $12.72/bbl and $24.37/bbl. For Frontera, at the higher
side of the spectrum, these costs were $28.89/bbl and $58.64/bbl in
2022.
PRIO has a strong capital structure, and Fitch expects it will have
average gross leverage below 1.0x over the rating horizon, total
debt to PDP of $3.94/bbl, and total debt to 1P of $1.20/bbl, which
is lower than all of its peers. Geopark had gross leverage of 0.8x
and debt to PDP of $8.89/bbl and 1P of $6.54/bbl in 2022; Gran
Tierra had 1.2x, $12.30/bbl and $6.93/bbl; SierraCol had 0.8x,
$11.32/bbl and $7.22/bbl; and Frontera had 0.8x, $13.23/bbl and
$4.65/bbl.
PRIO is on a category of its own compared to other producers in the
region. For this reason, Fitch is including seven issuers as a
second group of peers, who operate in North America: Apache Corp.
(BBB-/Stable), Hess Corp. (BBB/Stable), Marathon Oil Corp.
(BBB-/Positive), Murphy Oil Corp. (BB+/Stable), Occidental
Petroleum Corp. (BBB-/Stable), Ovintiv Inc. (BBB-/Stable), and
Southwestern Energy Co. (BB+/Positive).
PRIO's production profile compares unfavorably to North American
oil exploration and production companies. Murphy, the lower side of
the spectrum, produces 185,000 bbld, and Occidental Petroleum Corp.
produces 1,191 ,000 bbld, positioning itself as highest producer
within this category. Apache Corp., Hess Corp. and Marathon Oil
Corp. range from 350,000 to 400,000 bbld. Ovintiv Inc. produces 511
produces bbld and Southwestern Energy Co. produces 765,000 bbld.
Fitch expects PRIO's reserves will average 631 MMboe, which is
lower than all of its North American peers. Apache Corp. has 889
MMboe; Hess Corp. has 1,400 MMboe; Marathon Oil Corp. has 1,343
MMboe, Murphy Oil Corp. has 705 MMboe, Occidental Petroleum Corp.
has 3,672 MMboe, Ovintiv Inc. has 2,438 MMboe, Southwestern Energy
Company has 3,843 MMboe.
Fitch expects PRIO's half-cycle production cost will average
$15.29/bbl, in line with the median half-cycle cost of $16/bbl from
the North American producers. The lower cost half-cycle cost
producer in North America, Southwestern Energy Co., has a
half-cycle cost of $1.36/bbl. Hess Corp., the higher side of the
spectrum, has a half-cycle cost of $23.30/bbl.
KEY ASSUMPTIONS
Fitch's Key Assumptions Within The Rating Case for the Issuer:
- Annual realized oil prices at a $2.90 discount in 2023, and
$2.50 going forward, to Fitch's price deck for Brent of $80
in 2023, $75 in 2024, and $60 thereafter;
- Average daily production of 104,000 bbld from 2023 through
2026;
- No reserve replacement;
- Lifting cost average of $7.69/bbl;
- SG&A cost average of $1.05/bbl;
- Consolidated capex of $1.6 billion from 2023 through 2026
averaging $400 million per year;
- Dividends of 20% of net income;
- Effective tax rate of 25% in 2023, and 30% thereafter;
- No new debt issuances.
RATING SENSITIVITIES
Factors that could, individually or collectively, lead to positive
rating action/upgrade:
- Net production approaching 150,000 boed on a sustained basis
while maintaining 1P reserve life of at least 15 years and/or
sustained gross 1P reserves of at least 800 million boe or more.
Factors that could, individually or collectively, lead to negative
rating action/downgrade:
- Extraordinary dividend payments that exceed FCF and weaken
liquidity;
- A significant deterioration of total debt/EBITDA to 3.0x
or more;
- Major operational disruptions to key productive assets that
result in material decrease in production.
ISSUER PROFILE
PRIO S.A. (formerly Petro Rio S.A.) is an independent oil and gas
company in Brazil, with a primary focus on operating and developing
production assets and a core portfolio consisting of four operating
fields in offshore Brazil.
ESG CONSIDERATIONS
Petrorio Luxembourg Trading S.a r.l. has an ESG Relevance Score of
'4' for Group Structure as it is wholly owned by PRIO S.A. (parent
company) and is not an independent company, which has a negative
impact on the credit profile, and is relevant to the rating[s] in
conjunction with other factors.
Petrorio Luxembourg Trading S.a r.l. has an ESG Relevance Score of
'4' for Governance Structure as it is wholly owned by PRIO S.A.
(parent company) and is not an independent company, which has a
negative impact on the credit profile, and is relevant to the
rating[s] 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.
Entity/Debt Rating Prior
----------- ------ -----
Petrorio Luxembourg
Trading S.a r.l. LT IDR BB Upgrade BB-
senior secured LT BB Upgrade BB-
Petro Rio S.A. LT IDR BB Upgrade BB-
LC LT IDR BB Upgrade BB-
USIMINAS: Fitch Affirms 'BB' LongTerm IDRs, Outlook Stable
----------------------------------------------------------
Fitch Ratings has affirmed Usinas Siderurgicas de Minas Gerais
S.A.'s (Usiminas) Long-Term Foreign Currency (FC) and Local
Currency Issuer Default Ratings (IDRs) at 'BB' and its National
Scale rating at 'AA+(bra)'. Fitch has also affirmed the 'BB' rating
of the senior unsecured notes due in 2026 that were issued by
Usiminas International S.a r.l. and are guaranteed by Usiminas. The
Rating Outlooks for the international Foreign and Local Currency
IDRs of Usiminas and its National Scale rating remain Stable.
The rating affirmation reflects Usiminas' low absolute and relative
debt levels, its manageable debt amortization profile, and
considers a transition of operational improvement of its well
positioned Brazilian steel operations. Fitch projects an average
EBITDA of BRL2.5 billion (USD500 million), and total debt of BRL6.2
billion (USD 1.2 billion) representing gross leverage of 2.4x over
the next three years.
KEY RATING DRIVERS
Operational Realignment Underway: The BRL2.7 billion revamp of
Usiminas' blast furnace 3 is expected to end in 4Q23, but feeble
Brazilian markets, inflationary pressures and higher working
capital needs will drag on performance until the ramp-up ends in
2024. Resulting energy efficiency and debottlenecking might enable
increased capacity utilization. Usiminas' medium-value added
integrated steel production holds an important share in the flat
steel industry in Brazil.
Weakening Steel Environment: The Brazil Steel Institute registered
a 0.5% decrease in apparent consumption in January 2023-July 2023
relative to the same period of a year ago. The fall in prices
follows the temperance of raw material costs, the reconnection of
global supply chains after the pandemic-related disruption and a
higher steel imports penetration rate of 17% into Brazil until July
from 12.8% a year prior. Fitch expects Usiminas' steel sales to
decrease by 5% at 9% lower revenue/ton in 2023. Usiminas'
EBITDA/ton is forecast to reach USD50 in 2023, improving to nearly
USD70 in 2024.
Relevant Iron Ore Activity: The Chinese reopening caused iron ore
prices to hover around USD118/ton in 1H23. However, lower than
expected shipments, expected steel production cuts in China along
with fewer weather-related supply disruptions in Brazil and
Australia reduced prices. Fitch expects prices to fall in 2023 for
a yearly USD110/ton average, and follow a multiyear downtrend
through 2026 to USD70/ton. Sales are forecast at 8.6 million tons,
contributing with about 40% of EBITDA in 2023.
Low Leverage: Usiminas has maintained notoriously low leverage. The
Brazilian Real depreciation belies Usiminas' gross debt steady
decrease since the company restructured it in 2017 from BRL7.1
billion (USD2.2 billion) that year to BRL5.9 billion (USD1.2
billion) as of June 2023. Fitch projects gross and net debt will
remain low, averaging about BRL6.2 billion and BRL1.0 billion
between 2023 and 2025 with resulting gross and net leverage ratios
of 2.4x and 0.4x.
Low FCF Generation: The company's EBITDA is projected to decrease
to BRL2.3 billion in 2023 from BRL4.8 billion in 2022 before
improving toward BRL3.5 billion by 2025 when the effects of the
blast furnace revamping will be more noticeable. Fitch expects FCF
will be marginally negative as capex remains at BRL2.0 billion,
working capital needs stay relatively high, but taxes and dividends
decrease in 2023.
New Management and Control: The Ternium (Tenaris) group increased
its voting capital in July to 42% from 32.3%, the largest portion
of the 68.6% that forms the control group, with the approval of
Brazil's CADE, the Competition Authority. A new shareholder
agreement was achieved, replacing the one dating from 2018 that
used to allow Usiminas control by joint decisions with Nippon
Group. Fitch considers that this development would help to more
clearly outline and buttress the company's long-term strategy.
DERIVATION SUMMARY
Usiminas' business risk is similar to that of peer Companhia
Siderurgica Nacional (BB/Positive), as both are highly exposed to
the local steel industry in Brazil. While CSN has greater business
diversification, with larger mining operations and operations in
the cement industry, Usiminas' robust business position in its
niche markets and solid operating margins are a competitive
advantage.
Both Usiminas and CSN have a much weaker business position compared
with the other Brazilian steel producer, Gerdau S.A (BBB/Stable),
which has a diversified footprint of operations with significant
operating cash flows from its assets abroad, mainly in the U.S.,
and a more flexible business model that allows it to better
withstand economic and commodities cycles.
Among the three steel producers, Gerdau has consistently maintained
the strongest balance sheet, most manageable debt amortization
schedule, and has consistently made efforts to improve its capital
structure through assets sales or equity issuances. Gross debt
levels at CSN remain high relative to Gerdau and Usiminas. CSN also
has a more challenging debt amortization schedule than either
Usiminas or Gerdau.
KEY ASSUMPTIONS
Fitch's Key Assumptions Within the Rating Case for the Issuer:
- Benchmark iron ore prices average USD110/ton in 2023, USD85/ton
in 2024 and USD75/ton in 2025;
- Iron ore COGS/ton fall 4% in 2023, and fall 15% in 2024;
- Iron ore sold remains flat at 8.6 million tons in 2023 and 2024;
- Total steel volumes sold decrease to 4 million tons or 5% in 2023
and remain flat;
- Steel EBITDA/ton falls to USD50 in 2023 and rises to USD70 in
2024;
- Iron Ore EBITDA/ton falls to USD23 in 2023 and to USD18 in 2024;
- Capex of BRL2.0 billion in 2023 and BRL1.5 billion in 2024;
- An exchange rate of BRL5.07/USD1.00 at YE 2023 and
BRL5.15/USD1.00 at YE 2024.
RATING SENSITIVITIES
Factors that could, individually or collectively, lead to positive
rating action/upgrade:
- Additional diversification in products and geography;
- Consistent and positive FCF generation;
- EBITDA margins higher than 12% through the cycle;
- Gross debt/EBITDA leverage ratios consistently below 3.5x;
- Net debt/EBITDA leverage ratios consistently below 2.5x.
Factors that could, individually or collectively, lead to negative
rating action/downgrade:
- A significant change in industry dynamics or an increase of steel
imports into Brazil;
- Negative FCF;
- Failure to improve cost position;
- Gross debt/EBITDA leverage ratios consistently above 4.5x;
- Maintenance of net debt/EBITDA leverage ratios above 3.5x.
LIQUIDITY AND DEBT STRUCTURE
maturities: Usiminas had BRL5.9 billion of Fitch adjusted debt as
of June 30, 2023. The debt consists of a USD750 million (BRL3.5
billion) note that matures in 2026 and BRL2.4 billion of Brazilian
real-denominated debentures that mature from 2027 to 2032.
Usiminas had BRL4.9 billion of cash and marketable securities at
the end of June 30, 2023. About BRL1.03 billion of the cash
reported by the company is held at bank accounts abroad.
ISSUER PROFILE
Usiminas is the largest domestic supplier of cold rolled and
electro-galvanized steel products and holds approximately 35% share
of the flat steel market in Brazil. The company has a robust
position within the local automotive industry. Usiminas has a large
exposure to the Brazilian domestic steel industry.
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
----------- ------ -----
Usiminas
International
S.a r.l.
senior
unsecured LT BB Affirmed BB
Usinas Siderurgicas
de Minas Gerais
S.A. (Usiminas) LT IDR BB Affirmed BB
LC LT IDR BB Affirmed BB
Natl LT AA+(bra)Affirmed AA+(bra)
===============
C O L O M B I A
===============
FRONTERA ENERGY: S&P Affirms 'B+' ICR & Alters Outlook to Stable
----------------------------------------------------------------
S&P Global Ratings revised its outlook on Colombian-based oil and
gas company Frontera Energy Corp. to stable from positive and
affirmed its 'B+' issuer credit and issue-level ratings on the
company.
The stable outlook reflects S&P's expectations that Frontera will
continue focusing on strengthening its production rates without
pressuring its liquidity position and maintaining consistent
debt-to-EBITDA ratios below 1.5x.
In our last review on the company, S&P expected Frontera's
production to compare positively with 'BB-' rated peers, based on
the integration of Petroleos Sudamericanos Energy (PetroSud) and
higher production from Ecuador. In the first half of 2023, Frontera
produced 41,818 boepd, a 1.1% increase versus the same period in
2022.
The company announced its 2023 guidance, which estimates maximum
annual production of 43,000 boepd, not yet comparable with its
higher-rated industry peer Prio S.A. (BB-/Stable/--), which
produces about 91,100 boepd. As a result, S&P revised its outlook
to stable from positive until Frontera materializes boosting its
scale and geographic diversification.
At year-end 2022, Frontera reported 111.0 million barrels in proven
reserves (1P), a slight decrease from 2021. On April 11, 2023,
Frontera removed Frontera Guyana as a restricted subsidiary,
following its intentions to maximize value in this region.
Moreover, S&P believes that this action relates to Frontera's
growth prospects and its plans to invest about 34.0% of total
capital expenditure (capex) for exploration activities in Guyana in
2023, while the rest will fund operations in Colombia and Ecuador.
On March 27, 2023, Frontera took on another secured loan facility
to refinance total debt at Puerto Bahia's (a port terminal) level.
The new loan matures in December 2027 with manageable maturities,
reducing short-term liquidity pressures so that Frontera can focus
on its investing activities planned for the next two years.
As of June 30, 2023, the outstanding amount under the Puerto Bahia
loan facility was $108.9 million. S&P notes that the secured
facility doesn't affect the company's financial covenant
calculations under its unsecured notes due 2028.
S&P said, "We assume reference Brent oil prices will remain
consistent at $85 per barrel for the rest of 2023 and throughout
2024. This, combined with stable production and transportation
costs (average of $13 and $11 per barrel, respectively), will allow
Frontera to keep operating netbacks between 55.0% and 65.0% in the
next two years.
"We continue to expect the company's financial risk to remain
consistent, because we don't anticipate additional debt and
Frontera will continue to fund capex with operating cash flows. We
forecast adjusted debt to EBITDA to stay below 1.5x."
UNE EPM: Fitch Lowers LongTerm IDRs to 'CCC'
--------------------------------------------
Fitch Ratings has downgraded UNE EPM Telecomunicaciones S.A.'s
(Tigo UNE) Long-Term Foreign Currency and Local Currency Issuer
Default Ratings (IDRs) to 'CCC' from 'BB', National Long-Term
Rating to 'CCC(col) from 'AA-(col)' and COP unsecured notes to
'CCC(col)'/'RR4' from 'AA-(col)'. In addition, Fitch has downgraded
Tigo UNE's National Short-Term Rating to 'C(col) from 'F1+(col)'
and its CP rating under the 'Programa de Emisión y Colocación de
Bonos Ordinarios y Papeles Comerciales' to 'C(col)' from
'F1+(col)'. The Ratings have been removed from Rating Watch
Negative.
The downgrades reflect increased liquidity pressure and ongoing
governance concerns that have impaired Tigo UNE's ability to
rollover bank debt in a timely manner during a period of negative
FCF due to pricing pressure, high interest expenses and elevated
capex.
Fitch believes the uncertainty around shareholders' willingness and
ability to finalize a solution in a timely manner has increased the
probability of adverse outcomes, including a potential corporate
reorganization and/or TIGO UNE missing the October 5th coupon
payment, which would trigger further negative rating actions.
KEY RATING DRIVERS
ESG - Governance: The dynamics between Tigo UNE's shareholders,
Millicom and Empresas Publicas de Medellin (EPM), has resulted in
the Ministry of Telecommunications interceding with the company's
shareholders to seek a solution to Tigo UNE's liquidity problems.
The ministry has given them a deadline of October 9th to agree to a
solution, which could involve cash injections or a sale by EPM of
its stake in the company. Absent these measures, the government
would consider stronger measures including a corporate
reorganization.
Elevated Refinancing Risk: With limited cash and negative FCF, Tigo
UNE will not be able to meet its upcoming financial obligations
absent cash injections by its shareholders or the rolling over of
debt by its creditors. Tigo UNE's upcoming debt maturities consist
primarily of a COP85 billion loan with Bancolombia and a COP150
billion note both due in October 2023. Tigo UNE is also obligated
to make the initial payment on the renewal of its spectrum holdings
in the 1900Mhz band later this year. While Tigo UNE is reportedly
seeking equity injections from both shareholders, the outcome is
uncertain at this time.
Cash Flow Compression: Fitch expects Tigo UNE's EBITDA margins to
be constrained in the mid-20% range in the medium term as strong
post-paid subscriber growth is offset by competitive pressures on
average revenue per user (ARPU) in both post-paid mobile and fixed
home. Fitch also expects the company to post protracted negative
FCF over the rating horizon as continued large network investments,
including spectrum costs, will likely lead to additional debt
financing.
Fitch expects capital intensity to surpass 26% in 2023 from 24% in
2022, as the company faces renewals of its 40MHz in the 1900Mhz
band and 30MHz in the AWS band. Deployment of 5G will add to the
company's investment needs over the coming years. Given these
trends, Fitch expects the company's leverage profile to gradually
weaken from historical levels, with debt/EBTIDA and net debt/EBITDA
near 2.8x and 2.6x, respectively, in 2023.
Intense Price Competition: Fitch expects the Colombian mobile
market to continue to show significant pricing pressure as
incumbent operators maintain promotional activity. Industry ARPU is
likely to be particularly pressured in the post-paid segment as WOM
Colombia S.A.S. seeks to become a significant player. The country's
mobile penetration, which is above 150% compared with 135% in 2019,
is also contributing to lower ARPU. Competition is also growing in
fixed broadband. Competitors Movistar and Claro have continued
their aggressive promotional strategy to gain share to fill out
network capacity as demand for broadband services has slowed
post-pandemic.
Defending Market Position: Tigo UNE demonstrates relative strength
in the fixed home segment, a strong spectrum position aligned with
its coverage strategy, and a mobile network buildout with strong
post-paid data user growth. Fitch believes these factors will help
the company weather WOM Colombia's entry into the country's mobile
market and aggressive promotional activity in the home segment from
competitors Movistar and Claro.
Broad Service Offerings: The company's service diversification
compares well with other operators in the region. Tigo UNE is
well-diversified across fixed, mobile, and B2B, with respective
service revenue shares of approximately 38%, 39% and 20% during
2022. Tigo UNE operates entirely within the Colombian
telecommunications market, which has continued to grow more
competitive following the entry of WOM Colombia.
Parent Subsidiary Linkages: Fitch believes Tigo UNE has a weaker
standalone credit profile compared to Millicom. Based on Fitch's
Linkage Factor Assessment, legal, strategic, and operational
incentives are assessed as low, and accordingly no uplift is
considered in Tigo UNE's rating. The company's ratings incorporate
weak linkages with both Empresas Publicas de Medellin E.S.P. (EPM;
BB+/Negative Watch) and Millicom International Cellular S.A.
(BB+/Stable). The ratings of both entities are limited by sovereign
risks, the first as a Colombian government related entity and the
second by the majority of its cash flows from speculative grade
countries. Although UNE EPM is structured as a 50/50 joint venture
(JV), of the two parent entities, Millicom exerts greater
influence.
UNE EPM Telecomunicaciones S.A. has an ESG Relevance Score of '5'
for Governance Structure due to the dynamics between its Tigo UNE's
shareholders, Millicom and Empresas Publicas de Medellin (EPM),
that have impacted their ability to address the company's
capitalization needs.
DERIVATION SUMMARY
Tigo UNE's business profile compares to other telecom operators in
Latin America; however, governance issues and very weak liquidity
constrain Tigo UNE's ratings.
Tigo UNE's overall business is similar to that of direct competitor
Colombia Telecomunicaciones (BBB-/Negative), with similar revenue
shares of the overall Colombian market, although Tigo UNE has a
longer history of maintaining lower leverage. Tigo UNE is also
relatively stronger in the fixed broadband and pay-TV business,
which could imply more subscription like cash flows, as the
Colombian mobile market is still mostly prepaid.
Tigo UNE's business profile is similar to Empresa Nacional de
Telecomunicaciones S.A. (ENTEL; BBB/Stable). ENTEL's credit profile
has strengthened due to increased penetration in the Peruvian
market and debt reduction. ENTEL benefits from its status as the
largest Chilean mobile operator with leading post-paid market share
and ARPUs, while continuing to operate in two very competitive
markets. Relative to Entel, Tigo UNE has a higher cash burn rate
and weaker liquidity position.
With greater scale and diversification, Tigo UNE's business profile
is somewhat stronger than 'BB' category domestic telecom peers,
such as Empresa de Telecomunicaciones de Bogota, S.A., E.S.P. (ETB;
BB+/Stable), while Tigo UNE's weaker liquidity position
demonstrates a weaker credit profile. Another 'BB' category peer,
Telefonica del Peru, S.A.A. (TdP; BB-/Negative), has a relatively
strong market share but falling market share in fixed, while Peru's
relatively even four-operator mobile market is even more
competitive than Colombia's.
Tigo UNE carries lower leverage than TdP as TdP's profitability has
suffered in recent years and has been burdened by an unfavorable
outcome from a dispute with the Peruvian tax authority. Both
issuers face uncertain refinancing risks.
Tigo UNE is rated below Telefonica Moviles Chile S.A.
(BBB-/Stable), the leading integrated telecommunications service
provider in Chile. In comparison, Tigo UNE holds a secondary
position in Colombia behind Claro in the fixed business and is the
third largest mobile player, by market share. Both telcos operate
in highly competitive markets.
KEY ASSUMPTIONS
Fitch's Key Assumptions Within The Rating Case for the Issuer
Include:
- Broadband and pay-TV revenue gaming units contract slightly in
2023 due to heightened competition, and grow by low single digits
in 2024 and 2025;
- Home ARPU growth roughly flat due to competitive pressures in
broadband and pay-TV and secular declines in fixed voice;
- B2B revenue growth in the mid-single digits on growing demand for
digital services;
- Total mobile subscriptions grow in the low single digits as
conversion of customers from prepaid to post-paid continues;
- Blended mobile ARPUs growing modestly in the low to
mid-single-digit range due to mix-shift effects from strong
post-paid growth; overall mobile revenues grow by high single
digits in 2023;
- EBITDA margins mostly flat from 2022, and will remain constrained
due to high levels of competition;
- Capex of around COP1.4 trillion in 2023, at roughly 26% of
revenue, higher than historical averages due mainly to spectrum
renewals; capital intensity declining to around 19% over time;
- Gross debt/EBITDA of around 2.8x-3.0x and net debt to EBITDA of
around 2.6x-2.8x, higher than historical levels;
- No material dividends over the rating horizon as the company
focuses on investments.
RATING SENSITIVITIES
Factors that could, individually or collectively, lead to positive
rating action/upgrade:
- A material improvement in liquidity and a reduction of governance
concerns could lead to a positive rating action.
Factors that could, individually or collectively, lead to negative
rating action/downgrade:
- Inability of shareholders to finalize an agreement to strengthen
liquidity position in a timely manner could lead to a default.
LIQUIDITY AND DEBT STRUCTURE
Pressured Liquidity: Tigo UNE has tight liquidity, with COP43
billion in cash and equivalents as of June 30, 2023. Despite having
a relatively conservative capital structure and well-spread
maturity schedule, the company faces uncertain prospects for
refinancing its upcoming debt maturities in 2023. Additionally,
Fitch expects the company to generate continued negative FCF as
competitive pressures and investment requirements (including
spectrum renewals and a new 5G auction) pressure cash flow, which
will demand additional debt financing sources, absent an equity
injection from the company's shareholders.
As of June 30, 2023, the company's debt totalled COP3.1 trillion,
of which 93% was Colombian peso-denominated, with the remainder
comprised of a USD50 million syndicated loan. The company's debt is
evenly split between bank loans and COP bonds.
ISSUER PROFILE
Tigo UNE is an integrated telecommunications services provider in
Colombia. The company offers mobile, broadband internet, fixed
telephony, and Pay-TV. The company operates as a JV between
Millicom International Cellular S.A. and Empresas Publicas de
Medellin (EPM).
SUMMARY OF FINANCIAL ADJUSTMENTS
Standard lease adjustments applied.
ESG CONSIDERATIONS
UNE EPM Telecomunicaciones S.A. has an ESG Relevance Score of '5'
for Governance Structure due to the dynamics between its Tigo UNE's
shareholders, Millicom and Empresas Publicas de Medellin (EPM),
that have impacted their ability to address the company's
capitalization needs.
UNE EPM Telecomunicaciones S.A. has an ESG Relevance Score of '4'
for Management Strategy due to ongoing governance concerns, which
have impaired management's ability to execute on its strategy,
which has a negative impact on the credit profile, and is relevant
to the ratings 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.
Entity/Debt Rating Recovery Prior
----------- ------ -------- -----
UNE EPM
Telecomunicaciones
S.A. LT IDR CCC Downgrade BB
LC LT IDR CCC Downgrade BB
Natl LT CCC(col)Downgrade AA-(col)
Natl ST C(col) Downgrade F1+(col)
senior
unsecured Natl LT CCC(col)Downgrade RR4 AA-(col)
senior
unsecured Natl ST C(col) Downgrade F1+(col)
UNE EPM: Moody's Withdraws 'B1' Corporate Family Rating
-------------------------------------------------------
Moody's Investors Service has withdrawn the B1 Corporate Family
Rating of UNE EPM Telecomunicaciones, S.A. (Tigo UNE).
Prior to the withdrawal, the rating outlook on Tigo UNE was
negative.
RATINGS RATIONALE
Moody's has decided to withdraw the rating for its own business
reasons.
COMPANY PROFILE
Tigo UNE is a leading, integrated telecommunications provider in
Colombia offering mobile, fixed, pay TV and Business to Business
(B2B) services. The company is Colombia's third largest mobile
operator with over 12 million subscribers. Tigo UNE is Millicom
International Cellular S.A.'s (Millicom) second largest market in
terms of revenues, accounting for about 23% of consolidated revenue
and about 15% of consolidated EBITDA in the twelve months ended in
March 2023. Tigo UNE reported $1.18 billion in revenues and EBITDA
of $353 million in the twelve months ended in June 2023.
===================================
D O M I N I C A N R E P U B L I C
===================================
DOMINICAN REPUBLIC: World Bank Cites Weaknesses of Administration
-----------------------------------------------------------------
Dominican Today reports that Alexandria Valerio, the representative
of the World Bank in the Dominican Republic, has highlighted
several weaknesses within the country's public administration. She
pointed out that historically, the Dominican public administration
has been characterized by a bureaucratic culture and a lack of
emphasis on performance, according to Dominican Today.
Speaking at the inaugural event for the "Reform and Modernization
of Public Administration," Valerio called upon all the nation's
stakeholders to unite in a pact aimed at further advancing and
modernizing the Dominican State, the report notes. She emphasized
that this is a crucial strategy for enhancing the delivery of
public services to citizens, improving democratic quality, and
upholding the Social Rule of Law, the report relays. Despite these
challenges, Valerio acknowledged the State's recent efforts in this
regard, the report notes.
Valerio stated, "The Dominican public administration has
historically been characterized by fragmentation, a bureaucratic
culture, and a weak focus on performance. The central Government
consists of 23 ministries, along with over 300 dependent agencies,
often implementing programs and regulations without considering the
needs of other State entities," the report discloses
Recognizing the importance of reform and modernization in the
Public Administration, Vice President of the Republic, Raquel
Peña, emphasized that it should be embraced as a State policy, the
report says. She stressed that this policy is crucial for social
legitimacy and improving the quality of life for Dominicans, the
report notes.
Addressing the gathering focused on the "Reform and Modernization
of Public Administration" and its aim to guide the country towards
a National Pact for Institutionality, Vice President Pena stated
that this commitment should not be merely the result of transient
and disjointed intentions, the report discloses. Instead, it
should represent a steadfast and sustainable decision of national
significance, rooted in the nation's history and guided by the
clear vision of its political leadership, the report says.
Peña urged the attendees to embark on the journey of forging a
commitment to establish and maintain the best possible
institutional conditions, the report relays. This commitment
should ensure that the collective efforts of the present
generation, those who came before, and those who will follow create
a continuous spiral of development for the Dominican Republic, the
report adds.
About Dominican Republic
The Dominican Republic is a Caribbean nation that shares the island
of Hispaniola with Haiti to the west. Capital city Santo Domingo
has Spanish landmarks like the Gothic Catedral Primada de America
dating back 5 centuries in its Zona Colonial district. Luis Rodolfo
Abinader Corona is the current president of the nation.
TCRLA reported in April 2019 that the Dominican Today related that
Juan Del Rosario of the UASD Economic Faculty cited a current
economic slowdown for the Dominican Republic and cautioned that if
the trend continues, growth would reach only 4% by 2023. Mr. Del
Rosario said that if that happens, "we'll face difficulties in
meeting international commitments."
An ongoing concern in the Dominican Republic is the inability of
participants in the electricity sector to establish financial
viability for the system.
Moody's Investors Service, on Aug. 10, 2023, 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 wealth levels 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.
In September 2023, S&P assigned its 'BB' issue rating to the
Dominican Republic's 11.25% Dominican peso (DOP) linked bond for
DOP71 billion (equivalent to US$1.25 billion) maturing in 2035. The
rating on the bond is the same as the long-term local currency
sovereign credit rating on the Dominican Republic (BB/Stable/B).
The country used about 57% of the DOP-linked bond to roll over a
peso-denominated bond maturing in 2026, and will use the rest of
the proceeds for general budgetary purposes.
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.
=============
J A M A I C A
=============
JAMAICA: Economy Grew 2.3% in Second Quarter
--------------------------------------------
RJR News reports that Jamaica's economy grew by 2.3 per cent during
the second quarter of this year.
The Statistical Institute of Jamaica (STATIN) says the real value
added result for April to June, was mainly due to a 2.2 per cent
increase in output for the services industry, according to RJR
News.
GDP for the goods producing industry was up 2.6 per cent compared
with the similar period last year.
The quarter's performance also exceeds the initial GDP projections
for April to June, given by the Planning Institute of Jamaica, the
report notes.
In August, the PIOJ estimated GDP growth for the quarter at 1.5 per
cent, 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.
S&P Global Ratings raised on September 13, 2023, its long-term
foreign and local currency sovereign credit ratings on Jamaica to
'BB-' from 'B+', and affirmed its short-term foreign and local
currency sovereign credit ratings at 'B'. The stable outlook
reflects S&P's expectation that the government will remain
committed to prudent fiscal policies and reducing debt, as well as
supportive economic policies including a flexible exchange rate
regime and effective monetary policy. This is the best credit
rating that Jamaica has received from S&P since it started rating
the country's sovereign debt in 1999, according to The Gleaner.
In March 2022, Fitch Ratings affirmed Jamaica's Long-Term Foreign
Currency Issuer Default Rating (IDR) at 'B+'. The Rating Outlook is
Stable.
Moody's credit rating for Jamaica was last set at B2 with stable
outlook (December 2019).
NCB FINANCIAL: Growing Concern on Settlement for Former Execs
-------------------------------------------------------------
Jamaica Observer reports that there is increasing consternation in
local banking circles over protracted negotiations involving NCB
Financial Group, its former president and Chief Executive Officer
Patrick Hylton and his deputy Dennis Cohen, over the settlement in
relation to their separation from the company.
Hylton and Cohen were separated from the company in August after
initially being sent on three weeks' vacation leave following a
dispute about shares which were paid as part of compensation for
the men, relating to hitting performance targets, according to
Jamaica Observer.
"These are two well-respected men in the local banking community,
and the NCB Financial Group, with Michael Lee-Chin as its chairman,
is like the gold standard in the financial community so certainly
they could have ironed out an agreement already," said a Business
Observer source in the banking sector, the report notes.
"It seems strange that 10 weeks have now passed since the company
announced their separation, while providing for a three-week period
to negotiate their separation package, and that is not yet done,"
added the source, the report relays.
At the heart of the negotiations is the size of the separation
package for the two men who served the financial conglomerate for
the last two decades, including what value the company should
compensate the men for in relation to shares they were asked to
surrender in July 2021, the report discloses.
Both men were asked to surrender 95.1 million shares valued at
$13.8 billion at the time with the understanding that, over time,
they would recoup that value, the report notes.
Some were recouped in compensation for both men to the tune of $3.6
billion in the last financial year, the report says.
Hylton and Cohen were reportedly asked to consider amendments to
their compensation, and both made proposals in that regard but to
date the parties have not found common ground, the report relays.
===========
P A N A M A
===========
PANAMA: IDB OKs $60M-IDB Loan to Modernize Justice System
---------------------------------------------------------
The Inter-American Development Bank (IDB) approved a $60 million
credit line to enhance the management of Panama's justice system
using digital technologies. It also approved the first individual
$30 million loan under the credit line. This loan will focus on
supporting the digital transformation of Panama's Judiciary.
Through this Conditional Credit Line for Investment Projects, the
IDB will support Panama's medium- and long-term strategic objective
of improving its administration of justice, ensuring uninterrupted
technical and financial resources. The first operation under this
credit line will focus on cutting down the time it takes to resolve
legal proceedings. It aims to increase the efficiency and coverage
of digital judicial services and make the administration of justice
more transparent.
Although Panama's justice system has made significant progress on
digital transformation, especially in the area of criminal justice,
there is room to improve in other judicial areas. The low
digitalization of judicial management in noncriminal cases means
that these proceedings take longer to resolve. According to the
World Justice Project index that measures unjustified delays in
civil cases, in 2022 Panama ranked 27th out of 32 countries in
Latin America and the Caribbean.
The credit line's first operation will tackle these challenges
through three components. The first aims to make legal proceedings
more efficient. This includes upgrading the technology of the
Automated Judicial Management System in order to scale it up, make
it more sustainable, and expand its implementation at courts.
The second component will enhance the coverage and transparency of
digital services. This will involve implementing a multi-channel
plan to improve citizen services, along with ways to complete
judicial transactions online. These actions will include a gender
and diversity focus that will produce disaggregated data and make
it easier for vulnerable groups to access the different systems
that provide court-related information.
Finally, the third component will focus on bolstering the justice
system's institutional capacity in information technology. Specific
steps include designing a suitable organizational structure that
favors digital transformation, reviewing regulatory needs for
advancing digital justice initiatives, and creating a cybersecurity
strategy and training officials on this issue.
The credit line's first $30 million operation has a 14.5-year
repayment period, a 6-year grace period, a $11.1 million local
contribution, and an interest rate based on the Secured Overnight
Financing Rate (SOFR).
=====================
P U E R T O R I C O
=====================
ESJ TOWERS: Seeks 45-Day Extension to File Chapter 11 Plan
----------------------------------------------------------
ESJ Towers, Inc., filed a motion to extend its Sept. 13, 2023
deadline to filed its Amended Plan of Reorganization and Disclosure
Statement by 45 days.
The Debtor is in the process of drafting and filing a motion for
the entry of a sale order for substantially all of its assets, to
be shared with its principal secured creditor, Oriental Bank, for
the purpose of exploring for its filing to be of a consensual
nature, which motion not only will alter the course of the
captioned case but will require a different Plan and Disclosure
Statement from those previously in process.
Counsel for the Debtor:
Charles A. Cuprill-Hernandez, Esq.
CHARLES A. CUPRILL, P.S.C. LAW OFFICES
356 Fortaleza Street, Second Floor
San Juan, PR 00901
Tel: (787) 977-0515
Fax: (787) 977-0518
E-mail: ccuprill@cuprill.com
About ESJ Towers
ESJ Towers, Inc. owns the ESJ Towers in Carolina, P.R. The luxury
apartments and condo units at ESJ Towers have direct access to Isla
Verde Beach, widely considered one of the best in Puerto Rico.
ESJ sought protection under Chapter 11 of the U.S. Bankruptcy Code
(Bankr. D.P.R. Case No. 22-01676) on June 10, 2022, with as much as
50 million in both assets and liabilities. ESJ President Keith St.
Clair signed the petition.
Judge Enrique S. Lamoutte Inclan oversees the case.
The Debtor tapped Charles A. Cuprill, Esq., at Charles A. Cuprill,
PSC Law Offices as bankruptcy counsel; Ramon Luis Nieves, Esq., at
RL Legal Consulting Services, LLC and Luis Daniel Muniz, Esq., as
special counsels; Dage Consulting CPAS, PSC as financial advisor;
CPA Luis R. Carrasquillo & Co., P.S.C. as financial consultant; and
De Angel & Compania, PA, LLC as auditor.
The U.S. Trustee for Region 21 appointed an official committee of
unsecured creditors on Sept. 12, 2022. MRO Attorneys at Law, LLC
and Dage Consulting CPAS, PSC serve as the committee's legal
counsel and financial advisor, respectively.
===============
X X X X X X X X
===============
[*] BOND PRICING COLUMN: For the Week Sept. 25 to Sept. 29, 2023
----------------------------------------------------------------
Issuer Cpn Price Maturity Country Curr
------ --- ----- -------- ------- ----
Lani Finance 3.1 68.6 10/19/2048 KY AUD
Lani Finance 1.9 63.3 10/19/2048 KY EUR
Lani Finance 1.7 60 03/14/2049 KY EUR
Lani Finance 1.9 62.3 09/20/2048 KY EUR
QNB Finance 3.4 75.4 10/21/2039 KY AUD
QNB Finance 13.5 55.7 10/06/2025 KY TRY
QNB Finance 2.9 75.3 12/04/2035 KY AUD
Ruta del Maipo 2.3 53.5 12/15/2024 CL CLP
Santander Consumer 2.9 73.1 11/27/2034 CL AUD
Seagate HDD Cayman 3.4 73.4 07/15/2031 KY USD
Seazen Group 4.5 63.6 07/13/2025 KY USD
Silk Road Investments 2.9 68.8 01/23/2042 KY AUD
Simpar Finance 10.8 73.8 02/12/2028 BR BRL
Simpar Finance 10.8 73.8 02/12/2028 BR BRL
Skylark 1.8 58.2 04/04/2039 KY GBP
Tencent Holdings 3.8 74.1 04/22/2051 KY USD
Tencent Holdings 3.9 72.3 04/22/2061 KY USD
Tencent Holdings 3.2 66.2 06/03/2050 KY USD
Tencent Holdings 3.2 66.5 06/03/2050 KY USD
Tencent Holdings 3.3 63 06/03/2060 KY USD
Tencent Holdings 3.3 63.5 06/03/2060 KY USD
Panama Bond 4.5 73.5 01/19/2063 PA USD
Panama Bond 4.3 74.8 04/29/2053 PA USD
Panama Bond 3.9 66.8 07/23/2060 PA USD
Earls Eight 0.1 63.8 12/20/2031 KY AUD
Earls Eight 2.3 75.2 05/20/2032 KY AUD
Banco Davivienda SA 6.7 66.5 CO USD
Banco de Chile 2.7 75.4 03/09/2035 CL AUD
Banco de Chile 1.7 69.5 04/26/2032 CL EUR
Banco del Estado 3.1 72.5 02/21/2040 CL AUD
Banco del Estado de 1.7 70 03/01/2032 CL EUR
Banco del Estado 2.8 68.9 03/13/2040 CL AUD
Banco del Estado 1.7 69.2 07/05/2032 CL EUR
Banco GNB Sudameris 7.5 73.3 04/16/2031 CO USD
Banco GNB Sudameris 7.5 73.4 04/16/2031 CO USD
Banco Santander Chile 1.3 57.6 11/29/2034 CL EUR
Banco Santander Chile 3.1 72.3 02/28/2039 CL AUD
Jamaica Government 8.5 68.9 12/21/2061 JM JMD
Jamaica Government 6.3 72.7 07/11/2048 JM JMD
China Maple Leaf 2.3 75 01/27/2026 KY USD
China SCE Group 6 29 02/04/2026 KY USD
China SCE Group 7.4 56.2 04/09/2024 KY USD
China SCE Group 7 35.2 05/02/2025 KY USD
China SCE Group 6 42.9 09/29/2024 KY USD
Colombia Bond 7.3 71.3 10/18/2034 CO COP
Colombia Bond 7.3 71.3 10/18/2034 CO COP
Colombia Bond 7.3 61.5 10/26/2050 CO COP
Colombia Bond 7.3 61.5 10/26/2050 CO COP
Colombia Bond 3.9 54.8 02/15/2061 CO USD
Colombia Bond 4.1 61.9 02/22/2042 CO USD
Colombia Bond 5.6 72.7 02/26/2044 CO USD
Colombia Bond 3.1 74 04/15/2031 CO USD
Colombia Bond 3.3 72.1 04/22/2032 CO USD
Colombia Bond 5.2 67.3 05/15/2049 CO USD
Colombia Bond 4.1 58.8 05/15/2051 CO USD
Colombia Bond 5 66.9 06/15/2045 CO USD
Colombia Bond 6.3 63 07/09/2036 CO COP
Colombia Bond 6.3 63 07/09/2036 CO COP
Kaisa Group Holdings 10.9 9.1 KY USD
Fospar S/A 6.5 1.3 05/15/2026 BR BRL
Frigorifico 7.7 71.1 07/21/2028 PY USD
Frigorifico 7.7 71.4 07/21/2028 PY USD
Galaxy Digital 3 62.5 12/15/2026 KY USD
Generacion 9.9 73.1 12/01/2027 AR USD
Generacion 12.5 0 02/16/2024 AR USD
Gol Finance Inc 8.8 40.5 KY USD
Gol Finance Inc 8.8 42 KY USD
Goldman Sachs 2.3 75.9 06/30/2040 KY EUR
Greenland Hong Kong 10.2 45.9 KY USD
Guacolda Energia SA 4.6 40.8 04/30/2025 CL USD
Guacolda Energia SA 4.6 40.8 04/30/2025 CL USD
Earls Eight 1.7 71.4 06/20/2032 KY AUD
Ecopetrol SA 4.6 75 11/02/2031 CO USD
Ecopetrol SA 5.9 63.9 11/02/2051 CO USD
Ecopetrol SA 5.9 65.5 05/28/2045 CO USD
Three Gorges Finance 3.2 74.2 10/16/2049 KY USD
Chile Bond 1.3 52 01/22/2051 CL EUR
Chile Bond 3.1 66.9 01/22/2061 CL USD
Chile Bond 1.3 65.4 01/29/2040 CL EUR
Chile Bond 1.3 71.2 07/26/2036 CL EUR
Chile Bond 3.3 66.6 09/21/2071 CL USD
KWG Group Holdings 7.4 15.8 01/13/2027 KY USD
KWG Group Holdings 6 40.8 01/14/2024 KY USD
KWG Group Holdings 5.9 22.2 11/10/2024 KY USD
KWG Group Holdings 6.3 17.6 02/13/2026 KY USD
KWG Group Holdings 7.4 26.5 03/05/2024 KY USD
KWG Group Holdings 6 19.4 08/10/2025 KY USD
KWG Group Holdings 6 16.8 08/14/2026 KY USD
KWG Group Holdings 7.9 27.5 08/30/2024 KY USD
KWG Group Holdings 7.9 60.2 09/01/2023 KY USD
Telecom Argentina SA 1 56.5 02/10/2028 AR USD
Telecom Argentina SA 1 64.2 03/09/2027 AR USD
eHi Car Services 7 64.9 09/21/2026 KY USD
YPF SA 1 69.8 01/10/2026 AR USD
YPF SA 7 61.6 12/15/2047 AR USD
YPF SA 7 61 12/15/2047 AR USD
UEP Penonome II SA 6.5 73.6 10/01/2038 PA USD
UEP Penonome II SA 6.5 74.1 10/01/2038 PA USD
Guaranteed 5.4 73.7 01/29/2038 KY USD
Guaranteed 5.3 71.9 03/23/2038 KY USD
Helenbergh China 8 32.9 11/07/2024 KY USD
Agile Group Holdings 6.1 41 10/13/2025 KY USD
Agile Group Holdings 5.5 45 04/21/2025 KY USD
Agile Group Holdings 5.5 39.2 05/17/2026 KY USD
Alfa Desarrollo SpA 4.6 72.1 09/27/2051 CL USD
Alfa Desarrollo SpA 4.6 72.1 09/27/2051 CL USD
Alibaba Group 2.7 67.4 02/09/2041 KY USD
Alibaba Group 3.2 65.2 02/09/2051 KY USD
Agile Group Holdings 5.8 50.2 01/02/2025 KY USD
QNB Finance 11.5 62.1 1/30/2025 KY TRY
SYN prop e tech SA 13.6 20.3 3/15/2024 BR BRL
Yango Cayman 12 3.9 09/15/2023 KY USD
MSU Energy SA 6.9 70.8 02/01/2025 AR USD
MSU Energy SA 6.9 71.2 02/01/2025 AR USD
Itau Unibanco SA 5.8 19.4 05/20/2027 BR BRL
VTR Comunicaciones 5.1 55.3 01/15/2028 CL USD
VTR Comunicaciones 5.1 53.6 01/15/2028 CL USD
VTR Comunicaciones 4.4 54.4 04/15/2029 CL USD
VTR Comunicaciones 4.4 54.5 04/15/2029 CL USD
Vista Energy 1 73 03/03/2028 AR USD
Voyager II 3.3 74.3 03/23/2034 KY AUD
Transocean Inc 6.8 67.6 03/15/2038 KY USD
Inversiones Latin 5.1 44.6 06/15/2033 CL USD
Inversiones Latin 5.1 44.8 06/15/2033 CL USD
El Salvador Bond 6.4 62.3 01/18/2027 SV USD
El Salvador Bond 6.4 62 01/18/2027 SV USD
El Salvador Bond 7.1 48.5 01/20/2050 SV USD
El Salvador Bond 7.1 48.6 01/20/2050 SV USD
El Salvador Bond 5.9 46 01/30/2025 SV USD
El Salvador Bond 7.6 49.4 02/01/2041 SV USD
El Salvador Bond 7.6 49.4 02/01/2041 SV USD
El Salvador Bond 8.6 58.1 02/28/2029 SV USD
El Salvador Bond 8.6 57.9 02/28/2029 SV USD
El Salvador Bond 8.3 56.4 04/10/2032 SV USD
El Salvador Bond 8.3 56.3 04/10/2032 SV USD
El Salvador Bond 7.7 50 06/15/2035 SV USD
El Salvador Bond 7.7 50 06/15/2035 SV USD
El Salvador Bond 9.5 54.6 07/15/2052 SV USD
El Salvador Bond 9.5 54.5 07/15/2052 SV USD
El Salvador Bond 7.6 49.9 09/21/2034 SV USD
El Salvador Bond 7.6 50 09/21/2034 SV USD
Banda de Couro 8 69.1 01/15/2027 BR BRL
Alibaba Group 3.3 63 02/09/2061 KY USD
AMTD IDEA Group 4.5 52.5 KY SGD
AAC Technologies 3.8 68.6 06/02/2031 KY USD
ACEN Finance 4 70.9 KY USD
AES Tiete 6.8 0.7 04/15/2024 BR BRL
Agile Group Holdings 13.5 40.7 KY USD
Agile Group Holdings 8.4 38.1 KY USD
Agile Group Holdings 7.9 31 KY USD
Argentina Bonar Bonds 1 19.8 7/09/2029 AR USD
Argentina Bonar Bonds 1 27.5 08/05/2023 AR USD
Argentina Treasury 2.5 25.3 11/30/2031 AR ARS
Argentine Bond 0.5 19.5 07/09/2029 AR EUR
Argentine Bond 1 23.7 07/09/2029 AR USD
Argentine Bond 0.1 21.5 07/09/2030 AR EUR
Argentine Bonos 16 72.6 10/17/2023 AR ARS
Argentine Bonos 15.5 22.2 10/17/2026 AR ARS
Ascent Finance 3.4 58.4 02/06/2043 KY AUD
Ascent Finance 3.8 59.8 06/28/2047 KY AUD
Ascent Finance 1.2 61.4 07/12/2047 KY EUR
Astra Cumulative 1.5 60.6 11/01/2029 KY USD
*********
S U B S C R I P T I O N I N F O R M A T I O N
Troubled Company Reporter-Latin America is a daily newsletter
co-published by Bankruptcy Creditors' Service, Inc., Fairless
Hills, Pennsylvania, USA, and Beard Group, Inc., Washington, D.C.,
USA, Marites O. Claro, Joy A. Agravante, Rousel Elaine T.
Fernandez, Julie Anne L. Toledo, Ivy B. Magdadaro, and Peter A.
Chapman, Editors.
Copyright 2023. All rights reserved. ISSN 1529-2746.
This material is copyrighted and any commercial use, resale or
publication in any form (including e-mail forwarding, electronic
re-mailing and photocopying) is strictly prohibited without prior
written permission of the publishers.
Information contained herein is obtained from sources believed to
be reliable, but is not guaranteed.
The TCR Latin America subscription rate is US$775 per half-year,
delivered via e-mail. Additional e-mail subscriptions for members
of the same firm for the term of the initial subscription or
balance thereof are US$25 each. For subscription information,
contact Peter A. Chapman at 215-945-7000.
.
* * * End of Transmission * * *