/raid1/www/Hosts/bankrupt/TCRLA

/raid1/www/Hosts/bankrupt/TCRLA_Public/231226.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 Tuesday, December 26, 2023, Vol. 24, No. 258 Headlines A R G E N T I N A ARGENTINA: Inflation Ups, 30% Expected in Dec Post-Devaluation ARGENTINA: Looks to Cut Costs for Miners in Deregulation Push B R A Z I L BRAZIL: Brazil Aviation Recovers, Shows Resilience BRAZIL: Navigates 2024 Budget Amid Diverse Views NITEROI CITY: S&P Ups LT Global Scale Rating to BB, Outlook Stable [*] S&P Ups Global Scale Ratings on 16 Brazilian Fin'l Institutions P U E R T O R I C O INSIGHT MANAGEMENT: Unsecureds Owed $50K+ to Get 3% in 60 Months - - - - - ================= A R G E N T I N A ================= ARGENTINA: Inflation Ups, 30% Expected in Dec Post-Devaluation -------------------------------------------------------------- Buenos Aires Times reports that the first month of the Javier Milei government is, much like his predecessor's final ones in office, dominated by unstoppable price increases. Following the 118 percent devaluation announced by the La Libertad Avanza government's Economy Minister Luis Caputo, inflation has only intensified, according to Buenos Aires Times. Analysts and consultancy firms have accordingly corrected their estimates, with some placing this month's inflation above 30 percent, the report notes. Such is the case of ABECEB, the consultancy firm directed by the economist Dante Sica, Production and Labour minister during the Mauricio Macri 2015-2019 government, which forecasts inflation of 31.2 percent this month, the report relays. Not far behind at around 29 percent are the projections of Analytica, the consultancy directed by the economist Ricardo Delgado, the report says. Slightly lower are the evaluations of Eco Go, the firm directed by Marina Dal Poggetto, whose estimate of 28.2 percent is nevertheless more than three points above the 25 percent of the previous week, the report discloses. The firm further revealed that food and beverages rose 8.2 percent in the first week of the month and 10.4 percent in the second, attributed "mainly to the effect of a devaluation slightly higher than expected on prices with some items increasing by up to 90 percent in one week, as well as the updating of fuel prices, which had an indirect impact on all the other prices," the report notes. At the same time the above factors, plus the beginning of summer holidays, pushed up the categories "tourist accommodation" and "air fares," which registered increases of 47.3 and 90.3 percent respectively. Eco Go further detailed that "medicaments also registered major increases after the devaluation, especially psychotropic medication which went up 44.7 percent, " revealing that "in the previous week prices were already going up, driven by the end of the price freeze," the firm said in a report cited by the Clarin newspaper, the report relays. The estimates of Ecolatina are in the 25 percent range, the report discloses. Their report reflects that "after 12.7 percent [inflation] registered in November, prices in Greater Buenos Aires again accelerated and in the first half of December registered an increase of 18.1 percent against the same period in the previous month," the report says. The most recent survey put together by the consultancy firm shows that "the increase in the first fortnight of December was mainly driven by the items health, where medicaments and prepaid health schemes were the outstanding increases, (38.4 percent), leisure (35.2 percent) and domestic appliances (28.2 percent) while food and beverages climbed 16.2 percent," the report discloses. About Argentina Argentina is a country located mostly in the southern half of South America. Its capital is Buenos Aires. Javier Milei is the current president of Argentina after winning the November 19, 2023 general election. He succeeded Alberto Angel Fernandez 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 0its 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. ARGENTINA: Looks to Cut Costs for Miners in Deregulation Push ------------------------------------------------------------- Jonathan Gilbert at Bloomberg News reports that president Javier Milei wants to turn Argentina's lithium and copper rush into an investment bonanza - starting with cutting red-tape. Milei, a libertarian who took office on December 10 vowing to free up Argentina's tightly controlled economy, unveiled a package of deregulation measures that would help a slew of industries, according to Bloomberg News. He singled out cutting costs for mining companies that in recent years have been lured to vast deposits in the Andes as the transition to clean energy spurs demand for battery metals, Bloomberg News notes. "Mining is another area with great potential in the country that is notably underdeveloped," reads the presidential decree outlining the reforms, Bloomberg News notes. "To that end, we must eliminate costs," the decree added. Bloomberg News relays that Milei plans to do that by revoking two laws enacted in the 1990s - the National System for Mining Trade and the National Mining Data Bank. Both require firms to provide reams of data to the government, Bloomberg News says. He's also planning to do away with customs restrictions, Bloomberg News discloses. The previous government sought to keep some lithium production for local use to develop a downstream industry, Bloomberg News notes. "From today on, it's prohibited to prohibit exports," Milei said. To be sure, his measures could yet face opposition in Congress, where his party is a minority, Bloomberg News relays. Even if the red-tape burden is eased for mining, a far bigger challenge remains for Milei in the form of lifting capital and currency controls, the added. Argentina is the world's fastest-growing producer of battery-grade lithium, Bloomberg News notes. It also has several big copper projects in the works, although no major operating mines, Bloomberg News adds. About Argentina Argentina is a country located mostly in the southern half of South America. Its capital is Buenos Aires. Javier Milei is the current president of Argentina after winning the November 19, 2023 general election. He succeeded Alberto Angel Fernandez 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 0its 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. =========== B R A Z I L =========== BRAZIL: Brazil Aviation Recovers, Shows Resilience -------------------------------------------------- Iolanda Fonseca at Rio Times Online reports that this year, Brazil's aviation industry rebounded from COVID-19 and surpassed 100 million passengers, a four-year milestone. By November, the National Civil Aviation Agency (ANAC) reported airlines carried 102.6 million passengers, a 5.1% increase from last year, according to Rio Times Online. This includes 83.5 million on domestic flights and 19.1 million internationally, the report notes. Despite challenges like a strong dollar, high fuel costs, and complex tax structures, the industry showed resilience, the report relays. In November, domestic airlines experienced a 2.7% increase in passengers, the report adds About Brazil Brazil is the fifth largest country in the world and third largest in the Americas. Luiz Inacio Lula da Silva won the 2022 Brazilian general election. He was sworn in on January 1, 2023, as the 39th president of Brazil, succeeding Jair Bolsonaro. S&P Global Ratings raised on Dec. 19, 2023, its long-term global scale ratings on Brazil to 'BB' from 'BB-'. The outlook on the long-term ratings is stable. S&P affirmed Brazil's global scale short-term ratings at 'B' and its national scale long-term rating at 'brAAA'. S&P also raised the transfer and convertibility assessment on the country to 'BBB-' from 'BB+'. S&P said, "The stable outlook reflects our expectation that Brazil will maintain a strong external position, thanks to strong commodity output and limited external financing needs. We also believe Brazil's institutional framework can sustain stable and pragmatic policymaking based on extensive checks and balances across the executive, legislative, and judicial branches of government. We expect a very gradual fiscal correction but anticipate fiscal deficits will remain large." Fitch Ratings affirmed on Dec. 15, 2023, Brazil's Long-Term Foreign-Currency Issuer Default Rating (IDR) at 'BB' with a Stable Outlook. Fitch said Brazil's ratings are supported by its large and diverse economy, high per-capita income, and deep domestic markets and a large cash cushion that support the sovereign's financing flexibility and its high local-currency debt share. Strong external finances support resilience to shocks, underpinned by a flexible exchange rate, robust international reserves and a sovereign net external creditor position. The ratings are constrained by weak economic growth potential, relatively low governance scores, high and rising government debt/GDP, and budgetary rigidities. A new fiscal framework introduced this year aims to anchor a gradual consolidation process and address these fiscal weaknesses, but its effectiveness is increasingly unclear. Moody's credit rating for Brazil was last set at Ba2 in 2018 with stable outlook. Moody's affirmed the Ba2 issuer ratings and senior unsecured bond ratings in April 2022. DBRS Inc., on August 15, 2023, upgraded Brazil's Long-Term Foreign and Local Currency - Issuer Ratings to BB from BB (low). At the same time, DBRS Morningstar confirmed Brazil's Short-term Foreign and Local Currency - Issuer Ratings at R-4. The trend on all ratings is Stable (March 2018). BRAZIL: Navigates 2024 Budget Amid Diverse Views ------------------------------------------------ Richard Mann at Rio Times Online reports that Brazil's Congress recently approved the 2024 budget, targeting near-zero fiscal goals and limiting public spending. President Luiz Inacio Lula da Silva's administration proposed this budget with an authorized surplus of BRL3.5 billion ($720 million), according to Rio Times Online. Financial markets, however, view the government's fiscal target as ambitious, predicting a BRL90 ($18.5) billion deficit, the report notes. The budget allows a tolerance range of BRL28.8 billion ($5.9 billion) for public accounts, the report relays. This aligns with the broader fiscal framework approved earlier, the report adds. About Brazil Brazil is the fifth largest country in the world and third largest in the Americas. Luiz Inacio Lula da Silva won the 2022 Brazilian general election. He was sworn in on January 1, 2023, as the 39th president of Brazil, succeeding Jair Bolsonaro. S&P Global Ratings raised on Dec. 19, 2023, its long-term global scale ratings on Brazil to 'BB' from 'BB-'. The outlook on the long-term ratings is stable. S&P affirmed Brazil's global scale short-term ratings at 'B' and its national scale long-term rating at 'brAAA'. S&P also raised the transfer and convertibility assessment on the country to 'BBB-' from 'BB+'. S&P said, "The stable outlook reflects our expectation that Brazil will maintain a strong external position, thanks to strong commodity output and limited external financing needs. We also believe Brazil's institutional framework can sustain stable and pragmatic policymaking based on extensive checks and balances across the executive, legislative, and judicial branches of government. We expect a very gradual fiscal correction but anticipate fiscal deficits will remain large." Fitch Ratings affirmed on Dec. 15, 2023, Brazil's Long-Term Foreign-Currency Issuer Default Rating (IDR) at 'BB' with a Stable Outlook. Fitch said Brazil's ratings are supported by its large and diverse economy, high per-capita income, and deep domestic markets and a large cash cushion that support the sovereign's financing flexibility and its high local-currency debt share. Strong external finances support resilience to shocks, underpinned by a flexible exchange rate, robust international reserves and a sovereign net external creditor position. The ratings are constrained by weak economic growth potential, relatively low governance scores, high and rising government debt/GDP, and budgetary rigidities. A new fiscal framework introduced this year aims to anchor a gradual consolidation process and address these fiscal weaknesses, but its effectiveness is increasingly unclear. Moody's credit rating for Brazil was last set at Ba2 in 2018 with stable outlook. Moody's affirmed the Ba2 issuer ratings and senior unsecured bond ratings in April 2022. DBRS Inc., on August 15, 2023, upgraded Brazil's Long-Term Foreign and Local Currency - Issuer Ratings to BB from BB (low). At the same time, DBRS Morningstar confirmed Brazil's Short-term Foreign and Local Currency - Issuer Ratings at R-4. The trend on all ratings is Stable (March 2018). NITEROI CITY: S&P Ups LT Global Scale Rating to BB, Outlook Stable ------------------------------------------------------------------ On Dec. 20, 2023, S&P Global Ratings raised its long-term global scale ratings on the city of Niteroi to 'BB' from 'BB-'. At the same time, S&P affirmed its 'brAAA' national scale rating on the city. The outlook on the ratings is stable. Outlook The stable outlook reflects S&P's view that the city will continue to post strong fiscal surpluses in the next two years owing to still-strong royalties flows and prudent financial management. As a result, S&P expects high cash reserves and low debt. Downside scenario S&P said, "Given that we cap our ratings on Niteroi at the sovereign level, we could lower the ratings in the next two years if we were to downgrade Brazil. We could also lower the ratings if Niteroi's financial profile deteriorates significantly as a result of higher-than-expected volatility in the oil sector, translating into structurally weaker revenue performance, coupled with aggressive expansion of expenditures." Such a scenario would likely result in declining liquidity and/or higher debt. Upside scenario S&P caps its ratings on the city at the level of the ratings on Brazil (BB/Stable/B). As a result, S&P would only raise the global scale ratings on the city if it was to upgrade Brazil, assuming that Niteroi maintains its economic and financial strengths. Rationale S&P said, "We raised the long-term global scale ratings on Brazil following the recent approval of a tax reform. While it will be implemented gradually, the reform is a significant overhaul of the tax system and will likely translate into productivity gains over the long term. The reform adds to a track record of structural and microeconomic reforms since 2016, which, in our opinion, reflects an increasingly pragmatic institutional framework that helps to anchor macroeconomic stability. "Our stand-alone credit profile (SACP) for Niteroi is 'bb+', based on the city's very prudent fiscal policies that result in strong fiscal performance, along with its higher GDP per capita than the national average and its economic growth outpacing the national average. Sizable oil royalties have bolstered the city's liquidity position, allowed it to fully finance its capital expenditure program, and alleviated its debt burden. Moreover, part of the revenue windfall has been accumulated into a stabilization fund, a key rating strength." On the other hand, the SACP also incorporates the city's vulnerability to the oil sector's heightened volatility, given Niteroi's heavy dependence on the industry through royalties. Despite the higher SACP than the ratings, S&P's ratings on Niteroi are capped by those on the sovereign. S&P assesses the institutional framework of Brazilian local and regional governments (LRGs) as volatile and unbalanced. Structural rigidities in Brazil's intergovernmental system have prevented LRGs from reaching balanced fiscal accounts over time. Nonetheless, S&P believes the system has some predictability and transparency, with enhanced oversight over LRGs' finances and adherence to fiscal discipline. In accordance with S&P's relevant policies and procedures, the Rating Committee was composed of analysts that are qualified to vote in the committee, with sufficient experience to convey the appropriate level of knowledge and understanding of the methodology applicable. At the onset of the committee, the chair confirmed that the information provided to the Rating Committee by the primary analyst had been distributed in a timely manner and was sufficient for Committee members to make an informed decision. After the primary analyst gave opening remarks and explained the recommendation, the Committee discussed key rating factors and critical issues in accordance with the relevant criteria. Qualitative and quantitative risk factors were considered and discussed, looking at track-record and forecasts. The committee's assessment of the key rating factors is reflected in the Ratings Score Snapshot above. The chair ensured every voting member was given the opportunity to articulate his/her opinion. The chair or designee reviewed the draft report to ensure consistency with the Committee decision. The views and the decision of the rating committee are summarized in the above rationale and outlook. The weighting of all rating factors is described in the methodology used in this rating action. Ratings List UPGRADED; OUTLOOK ACTION TO FROM NITEROI (CITY OF) Issuer Credit Rating BB/Stable/-- BB-/Positive/-- Brazil National Scale brAAA/Stable/-- [*] S&P Ups Global Scale Ratings on 16 Brazilian Fin'l Institutions ------------------------------------------------------------------- S&P Global Ratings raised the global scale ratings on 16 Brazilian financial services companies and their subsidiaries following the same action on the sovereign. S&P also affirmed the short-term and global and national scale ratings on these entities. Here's the list of entities on which it took the rating action: -- Banco ABC Brasil S.A. (ABC Brasil); -- Banco Bradesco S.A. (Bradesco); -- Banco BTG Pactual S.A. (BTG Pactual); -- Banco Citibank S.A.; -- Banco Cooperativo Sicredi S.A. (Sicredi); -- Banco do Brasil S.A. (BdB); -- Banco do Nordeste do Brasil S.A. (BNB); -- Banco Nacional de Desenvolvimento Economico e Social (BNDES); -- Banco Pan S.A.; -- Banco Safra S.A.; -- Banco Santander (Brasil) S.A.; -- Banco Votorantim S.A. (Banco BV); -- Caixa Economica Federal (CEF); -- China Construction Bank (Brasil) Banco Multiplo S.A. (CCB); -- Haitong Banco de Investimento do Brasil S.A. (Haitong Brasil); and -- Stone Instituicao de Pagamento S.A. (Stone). The change in the sovereign rating also resulted in a change to Brazil's national scale mapping framework to address the relevant range of credit quality. As a result, we revised the outlook on the national scale rating on Banco do Estado do Rio Grande do Sul S.A. (Banrisul) to stable from positive, reflecting its relative credit quality and the lower likelihood of an upgrade following the revised correlation table for national scale ratings. This change does not reflect a deterioration of its financial profile. The upgrade of the sovereign reflects the recently approved tax reform in Brazil that extends the country's track record of pragmatic policy implementation in the last seven years. The reform adds to a now extensive track record of structural and microeconomic reforms since 2016, which in S&P's opinion, reflects an increasingly pragmatic institutional framework that helps to anchor macroeconomic stability. The ratings on the sovereign capped the credit quality of the 16 entities and their subsidiaries, given their high exposure to sovereign risk and because we rarely rate financial services companies above the sovereign long-term ratings. This is because during sovereign stress, the sovereign's regulatory and supervisory powers may restrict an individual bank's or financial system's flexibility. Moreover, many of the same economic factors that cause sovereign stress often also affect financial institutions. Outlook ABC Brasil S&P said, "The stable outlook on our ratings on ABC Brasil mirrors the one on Brazil in the next two years. The ratings on the latter constrain those on financial institutions, given their exposure to sovereign risk. Therefore, we expect the ratings on ABC Brasil to continue to move in tandem with the sovereign ratings." Upside scenario. S&P would likely raise the ratings on the bank following a similar action on the sovereign ratings. Absent sovereign constraints, the bank could have a higher rating given its 'bb' stand-alone credit profile (SACP) and the likelihood of group support given that the bank is a strategically important subsidiary of Arab Banking Corp. B.S.C. (BBB-/Stable/A-3). Downside scenario. S&P would likely downgrade the bank following a similar action on the sovereign. Bradesco S&P said, "The stable outlook on our rating on Bradesco reflects the outlook on Brazil in the next two years. The ratings on the latter constrain those on financial institutions, given their exposure to sovereign risk. Therefore, we expect the ratings on Bradesco to continue to move in tandem with the sovereign ratings." Upside scenario. S&P would likely raise the ratings on Bradesco following a similar action on the sovereign ratings. Absent sovereign constraints, the bank could have a higher rating, given its stronger credit fundamentals, reflected in its higher SACP than the rating on the sovereign. Downside scenario. S&P would likely downgrade the bank following a similar action on the sovereign. BTG Pactual S&P said, "The stable outlook on our ratings on BTG Pactual reflects our expectation of no rating changes in the next 12 months. We expect BTG Pactual to continue posting sound operating results and to maintain its improved funding profile and good capitalization metrics." Upside scenario. S&P could raise the ratings on the bank following an improvement on its fundamentals and if it was to upgrade the sovereign; however, S&P considers this as unlikely next year. Downside scenario. S&P said, "Our ratings on BTG Pactual are at the same level of the sovereign, so we would likely downgrade the bank following a similar action on the sovereign. In addition, we could downgrade BTG Pactual if its credit fundamentals deteriorate. This could occur if the bank's risk-adjusted capital ratio (RAC) erodes and remains consistently below 5% or if we see a sharp deterioration in its funding profile." Banco Citibank S&P said, "The stable outlook on our rating on Banco Citibank reflects the outlook on Brazil in the next two years. The ratings on the latter constrain those on financial institutions, given their exposure to sovereign risk. Therefore, we expect the ratings on Banco Citibank to continue to move in tandem with the sovereign ratings." Upside scenario. S&P would likely raise the ratings on the bank following a similar action on the sovereign ratings. Absent sovereign constraints, the bank could have a higher rating, given the likelihood of group support because the bank is a highly strategic subsidiary of Citigroup Inc.(BBB+/Stable/A-2). Downside scenario. S&P would likely downgrade the bank following a similar action on the sovereign. Sicredi S&P said, "The stable outlook on our ratings on Sicredi reflects our expectation of no rating changes in the next 12 months. We expect it to continue strengthening its cooperative business model, expanding the number of members and its geographic reach with good profitability, despite the difficult economy that pressures asset quality in Brazil." Upside scenario. S&P could raise the ratings on Sicredi following an improvement in its fundamentals and if it was to upgrade the sovereign; however, S&P considers this as unlikely next year. Downside scenario. S&P said, "Our ratings on Sicredi are at the same level of the sovereign, so we would likely downgrade the bank following a similar action on the sovereign. In addition, we could downgrade Sicredi if its credit fundamentals deteriorate. This could occur if the bank's risk-adjusted capital erodes or if we saw a sharp weakening in its asset quality." BdB S&P said, "The stable outlook on our rating on BdB reflects the outlook on Brazil in the next two years. The ratings on the latter constrain those on financial institutions, given their exposure to sovereign risk. Therefore, we expect the ratings on BdB to continue to move in tandem with the sovereign." Upside scenario. S&P would likely raise the ratings on the bank following a similar action on the sovereign. Absent sovereign constraints, the bank could have a higher rating, given its stronger credit fundamentals, reflected in its higher SACP than the rating on the sovereign. Downside scenario. S&P would likely downgrade the bank following a similar action on the sovereign. Banrisul S&P said, "The stable outlook on Banrisul reflects our view that we expect its 'bb-' SACP to remain unchanged for the next 12 months. We expect the bank to continue to focus on secured retail operations and agrobusiness while it maintain its regulatory capital ratios in line with those of peers." Upside scenario. S&P could upgrade Banrisul if it further diversifies its revenue, bolstering its operating performance due to increasing business stability that could mitigate the indirect effects of the state of Rio Grande do Sul's weak economy and the volatility in the bank's earnings stemming from pressure on asset quality metrics. Downside scenario. S&P said, "We could downgrade Banrisul if we believe the state's weaker finances erode its financial profile, or if the bank increases substantially its risk appetite, resulting in wider credit losses and weaker profitability.” BNB S&P said, "The stable outlook on our ratings on BNB reflects our expectation of no rating changes in the next 12 months. We expect BNB to continue to benefit from its large market share in the northeastern region of the country, while it maintains a stable funding structure and strong liquidity." Upside scenario. S&P could raise the ratings on the bank following an improvement on its fundamentals and if it was to upgrade the sovereign; however, S&P considers this as unlikely in the next year. Downside scenario. S&P said, "We could lower the ratings on BNB following the same rating action on the sovereign. Additionally, we could lower the national scale rating if the RAC ratio drops and remains consistently below 5%." BNDES S&P said, "The stable outlook on our rating on BNDES reflects the outlook on Brazil in the next two years. The ratings on the latter constrain those on financial institutions, given their exposure to sovereign risk. Therefore, we expect the ratings on BNDES to continue to move in tandem with the sovereign." Upside scenario. S&P said, "We would likely raise the ratings on the bank following a similar action on the sovereign ratings. Absent sovereign constraints, the bank could have a higher rating, given its stronger credit fundamentals, reflected in its higher SACP than the rating on the sovereign. Moreover, the ratings on the bank reflect our view that it's a key government-related entity (GRE) for the sovereign. As a result, we equalize its ratings and default risk with those on the sovereign." Downside scenario. S&P would likely downgrade the bank following a similar action on the sovereign. Banco Pan S&P said, "The stable outlook on our rating on Banco Pan reflects the same on its parent, BTG Pactual (BB/Stable/B). We believe BTG Pactual would provide extraordinary support to Banco Pan under any foreseeable circumstance. As such, the ratings on Banco Pan are primarily determined by the creditworthiness of its parent." Upside scenario. S&P would likely raise the ratings on Banco Pan following a similar action on its parent, given its view of Banco Pan as a core subsidiary of BTG Pactual. Downside scenario. S&P would likely downgrade the bank following a similar action on its parent. Banco Safra S&P said, "The stable outlook on our rating on Banco Safra reflects the outlook on Brazil in the next two years. The ratings on the latter constrain those on financial institutions, given their exposure to sovereign risk. Therefore, we expect the ratings on Banco Safra to continue to move in tandem with the sovereign." Upside scenario. S&P would likely raise the ratings on the bank following a similar action on the sovereign ratings. Absent sovereign constraints, the bank could have a higher rating, given its stronger credit fundamentals, reflected in its higher SACP than the rating on the sovereign. Downside scenario. S&P would likely downgrade the bank following a similar action on the sovereign. Banco Santander (Brasil) S&P said, "The stable outlook on our rating on Banco Santander (Brasil) reflects the outlook on Brazil in the next two years. The ratings on the latter constrain those on financial institutions, given their exposure to sovereign risk. Therefore, we expect the ratings on Banco Santander (Brasil) to continue to move in tandem with the sovereign." Upside scenario. S&P would likely raise the ratings on the bank following a similar action on the sovereign ratings. Absent sovereign constraints, the bank could have a higher rating, given its stronger credit fundamentals, reflected in its higher SACP than the rating on the sovereign. Downside scenario. S&P would likely downgrade the bank following a similar action on the sovereign. Banco BV S&P said, "The stable outlook on our ratings on Banco BV reflects our expectation of no rating changes in the next 12 months. "Additionally, the outlook reflects our view that Banco BV's stand-alone credit fundamentals will remain stable. We expect auto loans to remain the bank's main revenue generator, followed by wholesale loans. We also expect the bank to remain a moderately strategic subsidiary of Votorantim S.A., which owns 50% of the bank." Upside scenario. Prospects for raising S&P's global scale ratings would depend on an upgrade of Brazil and on Banco BV's ability to enhance its credit fundamentals through further diversification of its revenue or through significant widening of its funding to more pulverized sources relative to those of peers. Downside scenario. S&P said, "We could lower the ratings on Banco BV following the same rating action on the sovereign. We could also downgrade Banco BV if its stand-alone credit fundamentals deteriorate. This could happen, for example, if its RAC ratio drops and stays below 5%, which could result from faster-than-expected loan growth or eroding asset quality. We could also downgrade Banco BV if we see its parent as less supportive to the bank." CEF S&P said, "The stable outlook on our rating on CEF reflects the same outlook on Brazil in the next two years. The ratings on the latter constrain those on financial institutions, given their exposure to sovereign risk. Therefore, we expect the ratings on CEF to continue to move in tandem with the sovereign." Upside scenario. S&P said, "We would likely raise the ratings on the bank following a similar action on the sovereign ratings. Absent sovereign constraints, the bank could have a higher rating, given our view that CEF is a key GRE for the sovereign. As a result, we equalize our ratings on CEF and default risk with those on the sovereign." Downside scenario. S&P would likely downgrade the bank following a similar action on the sovereign. CCB S&P said, "The stable outlook on our rating on CCB reflects the outlook on Brazil in the next two years. The ratings on the latter constrain those on financial institutions, given their exposure to sovereign risk. Therefore, we expect the ratings on CCB to continue to move in tandem with the sovereign." Upside scenario. S&P would likely raise the ratings on the bank following a similar action on the sovereign ratings. Absent sovereign constraints, the bank could have a higher rating, given our view of it as a highly strategic subsidiary of China Construction Bank Corp. (A/Stable/A-1). Downside scenario. S&P would likely downgrade the bank following a similar action on the sovereign. Haitong Brasil S&P said, "The stable outlook on our rating on Haitong reflects the same on its parent, Haitong Bank S.A. (BB/Stable/B). The ratings on Haitong Brasil follow those on its parent, given our view of it as a core subsidiary. This is due to Haitong Brasil's significant revenue contribution to the parent, its position as the hub for the group's Latin American operations, and the parent's long-term commitment to the Brazilian operations." Upside scenario. S&P would likely raise the ratings on Haitong Brasil following a similar action on its parent, given its view of its subsidiary status. Downside scenario. S&P would likely downgrade the bank following a similar action on its parent. Stone S&P said, "The stable outlook on our ratings on Stone reflects our expectation of no rating changes in the next 12 months. Stone's SACP is 'bb', and we expect it to maintain its debt to EBITDA between 3.0x and 3.5x while continuing to post strong growth and improving profitability." Upside scenario. S&P could raise the ratings on Stone following an improvement in its credit fundamentals and if it was to upgrade the sovereign; however, S&P considers this as unlikely next year. Downside scenario. S&P said, "We could lower the ratings on Stone if it increases substantially its debt above our expectations or following a sharp drop in its EBITDA. This could erode Stone's financial position, raising the debt-to-EBITDA ratio to more than 4.0x, which would be above our threshold for the current rating." Environmental, Social, And Governance S&P's ESG rationale remained unchanged on this credit rating action. Ratings List UPGRADED; RATINGS AFFIRMED TO FROM BANCO ABC BRASIL S.A. Issuer Credit Rating BB/Stable/B BB-/Positive/B Brazil National Scale brAAA/Stable/brA-1+ UPGRADED; RATINGS AFFIRMED TO FROM BANCO BTG PACTUAL S.A. Issuer Credit Rating BB/Stable/B BB-/Positive/B Brazil National Scale brAAA/Stable/-- BANCO BTG PACTUAL S.A. (CAYMAN BRANCH) Senior Unsecured BB BB- BTG PACTUAL SEGUROS S.A. Brazil National Scale brAAA/Stable/-- BANCO PAN S.A. Issuer Credit Rating BB/Stable/B BB-/Positive/B Brazil National Scale brAAA/Stable/brA-1+ Senior Unsecured brAAA UPGRADED; RATINGS AFFIRMED TO FROM BANCO BRADESCO S.A. Issuer Credit Rating BB/Stable/B BB-/Positive/B Brazil National Scale brAAA/Stable/brA-1+ BANCO BRADESCO S.A. (CAYMAN) Senior Unsecured BB BB- BRADESCO SEGUROS S.A. Brazil National Scale brAAA/Stable/-- BRADESCO CAPITALIZACAO S.A. Brazil National Scale brAAA/Stable/-- UPGRADED; RATINGS AFFIRMED TO FROM BANCO COOPERATIVO SICREDI S.A. Issuer Credit Rating BB/Stable/-- BB-/Positive/-- Brazil National Scale brAAA/Stable/-- UPGRADED; RATINGS AFFIRMED TO FROM BANCO NACIONAL DE DESENVOLVIMENTO ECONOMICO E SOCIAL Issuer Credit Rating BB/Stable/-- BB-/Positive/-- Brazil National Scale brAAA/Stable/-- Senior Unsecured BB BB- BNDESPAR-BNDES PARTICIPACOES S.A. Brazil National Scale brAAA/Stable/-- UPGRADED; RATINGS AFFIRMED TO FROM BANCO SAFRA S.A. Issuer Credit Rating BB/Stable/B BB-/Positive/B Brazil National Scale brAAA/Stable/brA-1+ UPGRADED; RATINGS AFFIRMED TO FROM BANCO SANTANDER (BRASIL) S.A. Issuer Credit Rating BB/Stable/B BB-/Positive/B Brazil National Scale brAAA/Stable/brA-1+ UPGRADED; RATINGS AFFIRMED TO FROM BANCO DO BRASIL S.A. Issuer Credit Rating BB/Stable/B BB-/Positive/B BANCO DO BRASIL S.A. CAYMAN ISLANDS BRANCH Senior Unsecured BB BB- Junior Subordinated B- CCC+ RATINGS AFFIRMED; OUTLOOK ACTION TO FROM BANCO DO ESTADO DO RIO GRANDE DO SUL S.A. Issuer Credit Rating BB-/Stable/-- BB-/Stable/-- Brazil National Scale brAA+/Stable/-- brAA+/Positive/-- UPGRADED; RATINGS AFFIRMED TO FROM BANCO DO NORDESTE DO BRASIL S.A. Issuer Credit Rating BB/Stable/B BB-/Positive/B Brazil National Scale brAAA/Stable/-- UPGRADED; RATINGS AFFIRMED TO FROM CAIXA ECONOMICA FEDERAL Issuer Credit Rating BB/Stable/B BB-/Positive/B Brazil National Scale brAAA/Stable/brA-1+ UPGRADED; RATINGS AFFIRMED TO FROM CHINA CONSTRUCTION BANK (BRASIL) BANCO MULTIPLO S.A. Issuer Credit Rating BB/Stable/B BB-/Positive/B Brazil National Scale brAAA/Stable/-- UPGRADED; RATINGS AFFIRMED TO FROM BANCO CITIBANK S.A. Issuer Credit Rating BB/Stable/B BB-/Positive/B Brazil National Scale brAAA/Stable/brA-1+ UPGRADED; RATINGS AFFIRMED TO FROM HAITONG BANCO DE INVESTIMENTO DO BRASIL S.A. Issuer Credit Rating BB/Stable/B BB-/Positive/B Brazil National Scale brAAA/Stable/brA-1+ UPGRADED; RATINGS AFFIRMED TO FROM STONE INSTITUICAO DE PAGAMENTO S.A. Issuer Credit Rating BB/Stable/-- BB-/Positive/-- Brazil National Scale brAAA/Stable/-- STONECO. LTD. Senior Unsecured BB BB- MNLT S.A. Senior Secured brAAA UPGRADED; RATINGS AFFIRMED TO FROM BANCO VOTORANTIM S.A. Issuer Credit Rating BB/Stable/B BB-/Positive/B Brazil National Scale brAAA/Stable/brA-1+ Senior Unsecured BB BB- ===================== P U E R T O R I C O ===================== INSIGHT MANAGEMENT: Unsecureds Owed $50K+ to Get 3% in 60 Months ---------------------------------------------------------------- Insight Management Group Incorporated filed with the U.S. Bankruptcy Court for the District of Puerto Rico a Small Business Disclosure Statement describing its Plan of Reorganization dated December 18, 2023. The Debtor is dedicated to the health care business, specifically radiological and imaging services to patients referred for diagnostics. The Debtor operates in two locations, Canovanas and Luquillo. The Debtor had to seek emergency relief in bankruptcy for the combination of factors: the disconnection of the electricity services provided by Luma Energy, the passage of Hurricanes Irma and Maria, which forced the closing of the Canovanas and Aguadilla (which has been closed) facilities for several months. In addition, during 2017, the facilities were forced to close due to the aftermath of Hurricane Maria. In addition, during 2018, the MRI machine located at the Canovanas facility was inoperative for almost a year, creating a significant business interruption. Afterward, in 2020, the Covid-19 pandemic affected Debtor's operations for considerable time. Finally, the Debtor had to incur in expenses for relocating the Luquillo facility during the years 2020-2021. Such reduction and interruption of business led to the accumulation of arrears with creditors, which ultimately caused the insolvency being addressed in this proceeding. Upon the filing of the instant bankruptcy petition, Debtor has executed various measures and adjustments to its operations to maximize and properly reorganize its business affairs. Furthermore, the Debtor has aggressively engaged efforts to expand its client base and achieve a significant growth. Class 4 consists of the allowed unsecured claims scheduled or filed by any governmental unit. Debtor's plan proposes a monthly cash dividend of $776.68 for 60 months beginning on the effective date. Based on the current allowed amounts, each claimholder in this class will receive approximately 3% of the allowed amount of their claim. Class 5 consists of the allowed unsecured claims under or equal to $50,000.00. Each claim holder under this class will receive pro rata distributions, as per the allowed amounts. Debtor's plan proposes a significant lump sum payment of $5,046.00 on the effective date. Based on the current allowed amounts, each claimholder in this class will receive approximately 2% of the allowed amount of their claim. Class 6 consists of the allowed unsecured claims over $50,001.00. Each claim holder under this class will receive pro-rata distributions, as per the allowed amounts. Debtor's plan proposes a monthly cash dividend of $208.68 for 60 months beginning on the effective date. Based on the current allowed amounts, each claimholder in this class will receive approximately 3% of the allowed amount of their claim. Class 7 consists of Debtor's insiders and equity security holders, Debtor's shareholders, will not receive any distribution under this Class, but will retain their ownership interest over the corporation. The Plan will be implemented as required under Section 1123(a)(5) of the Bankruptcy Code with the continued operation of Debtor's endeavors and business growth. A full-text copy of the Disclosure Statement dated December 18, 2023 is available at https://urlcurt.com/u?l=jjX4ik from PacerMonitor.com at no charge. Debtor's Counsel: Javier Vilarino, Esq. Vilarino & Associates, LLC P.O. Box 9022515 San Juan, PR 00902-2515 Tel: (787) 565-9894 Email: jvilarino@vilarinolaw.com About Insight Management Group Insight Management Group Incorporated provides specialized services in radiology in Canovanas, P.R. Insight Management Group filed its voluntary petition for relief under Chapter 11 of the Bankruptcy Code (Bankr. D.P.R. Case No. 23-00506) on Feb. 22, 2023, with $500,000 to $1 million in assets and $10 million to $50 million in liabilities. Jose A. Romero Cruz, president of Insight Management Group, signed the petition. Judge Maria De Los Angeles Gonzalez presides over the case. Javier Vilarino, Esq., at Vilarino & Associates, LLC, and Dage Consulting CPA's, PSC, serve as the Debtor's legal counsel and financial advisor, respectively. ********* 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. 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