/raid1/www/Hosts/bankrupt/TCRLA_Public/231228.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
L A T I N A M E R I C A
Thursday, December 28, 2023, Vol. 24, No. 260
Headlines
A R G E N T I N A
ARGENTINA: Closes 2023 With Highest Inflation in 30 Years
ARGENTINA: Economy Shrank Less Than Forecast During Election
B A H A M A S
FTX GROUP: Discloses Terms of Embed Settlement Agreement
FTX GROUP: Resolves Dispute with Bahamian Liquidators
B R A Z I L
AMERICANAS SA: Creditors Okay Debt Restructuring Plan
BRAZIL MINAS: S&P Raises USD1.27B Fixed-Rate Notes Rating to 'BB'
BRAZIL: Economic Activity Down 0.06% in October
T R I N I D A D A N D T O B A G O
TRINIDAD & TOBAGO: Central Bank Warns of Potential Inflation Uptick
- - - - -
=================
A R G E N T I N A
=================
ARGENTINA: Closes 2023 With Highest Inflation in 30 Years
---------------------------------------------------------
Buenos Aires Times reports that Argentina is closing 2023 with the
highest inflation in the last 30 years, 132.8 percent through to
November and an annual rate of 160.9 percent.
A devaluation halving the currency by the recently inaugurated
Javier Milei government only accelerated the price increases, the
report notes.
A local chamber of commerce for the toy industry estimates this
year's increases at between 110 and 230 percent, depending on the
product and its origin, the report discloses.
"Some locally made toys go up with inflation but imported items top
200 percent," explained Julian Benitez, the chamber's manager of
institutional relations, the report relays.
To end inflation, a chronic evil in Argentina, Milei has proposed
drastic public spending cuts equivalent to five percent of gross
domestic product, the report discloses. He announced a multiple
decree on a gigantic scale to repeal or amend over 300 laws and
norms, among them rental and labour legislation, provoking a
cacerolazo saucepan-bashing in several Buenos Aires neighborhoods
and a spontaneous demonstration in front of Congress lasting until
4am, the report relays.
Teacher Alexandra Mazzei, 49, was one of those protesting.
"What's happening is that the institutions are being overrun.
They're starving out the people, using policies which we have
already experienced and which did not work, the only thing they do
is to pauperise the working class," she maintained, the report
notes.
Due to the constant price increases, the option for cheaper toys
leads to the offer in shops including products of dubious origin.
In Argentina there are 180 toy manufacturers creating around 8,000
direct and indirect jobs, the report relays. Half the sales in
toyshops are locally manufactured, according to the chamber's data,
adds the report.
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: Economy Shrank Less Than Forecast During Election
------------------------------------------------------------
Patrick Gillespie at Bloomberg News reports that Argentina's
economy posted a slight contraction in October despite a turbulent
presidential election cycle that stoked policy uncertainty and yet
another currency selloff in parallel markets.
Economic activity in October fell 0.1 percent from a month earlier,
less than the median estimate for a 0.6 percent decline among
economists surveyed by Bloomberg. From the same month a year
earlier, activity rose 0.6 percent, according to government data.
Separately, the unemployment rate for the formal labour market
during the third quarter fell to 5.7 percent, its lowest level
since at least 2003, official figures show, according to Bloomberg
News.
A three-way race before the October 22 presidential election
whipped up market volatility, sending Argentina's parallel exchange
rate from 804 pesos per dollar to as high as 1,035 per dollar
within three weeks before paring losses, Bloomberg News relays.
The rapid move fanned inflation that's now running faster than 160
percent annually, the highest level since Argentina exited
hyperinflation in the early 1990s, Bloomberg News recalls.
Argentina faces a challenging economic outlook in 2024, according
to President Javier Milei, who warns about "stagflation" as he
implements shock reform measures, Bloomberg News notes. Economists
surveyed by the central bank forecast that gross domestic product
will contract 2.4 percent next year, double the estimated decline
for this year, Bloomberg News says.
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 A H A M A S
=============
FTX GROUP: Discloses Terms of Embed Settlement Agreement
--------------------------------------------------------
FTX Trading Ltd. (d.b.a. FTX.com) and its affiliated debtors
(together, the "FTX Debtors") on Dec. 22 disclosed that its
affiliated debtors, Alameda Research Ltd. ("Alameda"), West Realm
Shires, Inc. ("WRS"), and West Realm Shires Services, Inc. ("WRSS")
(together, the "Plaintiffs"), have sought Bankruptcy Court
authorization to enter into a binding settlement agreement (the
"Settlement Agreement") with Samuel Bankman-Fried, Nishad Singh and
Gary Wang (together, the "Defendants") solely to resolve Adversary
Proceeding No. 23-50381 relating to the acquisition of Embed
Financial Technologies ("Embed").
Under the Settlement Agreement, the FTX Debtors will recover 100%
of the value that the Defendants obtained in connection with the
Embed acquisition, and also all assets held under the Defendants'
names at Embed. The Settlement Agreement will also not affect,
compromise or release any claims the FTX Debtors have against the
Defendants of any kind other than those claims specified in the
Settlement Agreement for the Embed avoidance action.
"This agreement is in the best interests of the FTX Debtors'
estate, creditors and stakeholders," said John J. Ray III, Chief
Executive Officer and Chief Restructuring Officer of the FTX
Debtors. "This agreement allows us to take further steps to resolve
matters at Embed and at the same time, we are not inhibited in any
way as we pursue additional outstanding claims in parallel and
advance the work underway to maximize recoveries for creditors."
On May 17, 2023, the Plaintiffs commenced Adversary Proceeding No.
23-50381 in the United States Bankruptcy Court for the District
Court Delaware (the "Bankruptcy Court") against Bankman-Fried,
Singh and Wang by filing a complaint that sought, among other
things, to avoid and recover transfers made by the Plaintiffs to
the Defendants with regard to the June 2022 acquisition of Embed by
WRS and to avoid any obligation by WRS relating to the Embed
acquisition.
Advisors
The FTX Debtors are represented by Sullivan & Cromwell LLP as legal
counsel and are assisted by Alvarez & Marsal North America, LLC as
financial advisor, Perella Weinberg Partners LP as investment
banker, Quinn Emanuel Urquhart & Sullivan, LLP as special counsel
and Landis Rath & Cobb LLP as Delaware counsel.
Additional Information
U.S. Bankruptcy Court filings and other documents related to the
court proceedings, including documents related to Adversary
Proceeding No. 23-50381 and a copy of the Settlement Agreement, are
available at https://cases.ra.kroll.com/FTX/.
About FTX Group
FTX is the world's second-largest cryptocurrency firm. FTX is a
cryptocurrency exchange built by traders, for traders. FTX offers
innovative products including industry-first derivatives, options,
volatility products and leveraged tokens.
Then CEO and co-founder Sam Bankman-Fried said Nov. 10, 2022, that
FTX paused customer withdrawals after it was hit with roughly $5
billion worth of withdrawal requests.
Faced with liquidity issues, FTX on Nov. 9 struck a deal to sell
itself to its giant rival Binance, but Binance walked away from
the
deal amid reports on FTX regarding mishandled customer funds and
alleged US agency investigations.
At 4:30 a.m. on Nov. 11, Bankman-Fried ultimately agreed to step
aside, and restructuring vet John J. Ray III was quickly named new
CEO.
FTX Trading Ltd (d/b/a FTX.com), West Realm Shires Services Inc.
(d/b/a FTX US), Alameda Research Ltd. and certain affiliated
companies then commenced Chapter 11 proceedings (Bankr. D. Del.
Lead Case No. 22-11068) on an emergency basis on Nov. 11, 2022.
Additional entities sought Chapter 11 protection on Nov. 14, 2022.
FTX Trading and its affiliates each listed $10 billion to $50
million in assets and liabilities, making FTX the biggest
bankruptcy filer in the US this year. According to Reuters, SBF
shared a document with investors on Nov. 10 showing FTX had $13.86
billion in liabilities and $14.6 billion in assets. However, only
$900 million of those assets were liquid, leading to the cash
crunch that ended with the company filing for bankruptcy.
The Hon. John T. Dorsey is the case judge.
The Debtors tapped Sullivan & Cromwell, LLP as bankruptcy counsel;
Landis Rath & Cobb, LLP as local counsel; and Alvarez & Marsal
North America, LLC as financial advisor. Kroll is the claims
agent,
maintaining the page https://cases.ra.kroll.com/FTX/Home Index
The Official Committee of Unsecured Creditors tapped Paul Hastings
as counsel, FTI Consulting, Inc., as financial advisor, and
Jefferies LLC as the investment banker. Young Conaway Stargatt &
Taylor LLP is the Committee's Delaware and conflicts counsel.
Montgomery McCracken Walker & Rhoads LLP, led by partners Gregory
T. Donilon, Edward L. Schnitzer, and David M. Banker, is
representing Sam Bankman-Fried in the Chapter 11 cases. White
collar crime specialist Mark S. Cohen has reportedly been hired to
represent SBF in litigation. Lawyers at Paul Weiss previously
represented SBF but later renounced representing the entrepreneur
due to a conflict of interest.
FTX GROUP: Resolves Dispute with Bahamian Liquidators
-----------------------------------------------------
Dietrich Knauth at Reuters reports that bankrupt crypto exchange
FTX Trading announced a settlement with liquidators for FTX's
Bahamas unit, resolving a long-simmering dispute over whether the
company's U.S. bankruptcy proceedings should take precedence over
the Bahamian liquidation.
FTX and FTX Digital Markets have agreed to pool their assets and
harmonize their approach to valuing customer claims to ensure equal
treatment for customers in either country's insolvency process,
according to Reuters. The settlement will allow most customers of
FTX.com's international crypto exchange to choose whether to seek
repayment from either the U.S. bankruptcy or the Bahamian
liquidation, according to FTX, the reports.
FTX's CEO John Ray, who took control of the company from convicted
FTX founder Sam Bankman-Fried, said that the agreement is a
critical milestone in the company's effort to repay customers, the
report relays.
"The unique challenges raised by the conflicting filings of the FTX
Debtors and FTX Digital Markets have been some of the toughest the
team has faced," Ray said in a statement. "But we recognized at the
beginning that we have an overlapping constituency: FTX.com
customers," the report relays.
The Bahamian liquidators, Brian Simms and Peter Greaves, said in a
statement that the agreement will avoid "years of protracted
litigation and expense" and "accelerate the return of funds to
customers," the report discloses.
FTX had been at odds with Bahamian officials ever since filing for
bankruptcy protection on Nov. 11, with a hole in its balance sheet
that left its 9 million customers facing billions in potential
losses, the report says. FTX had sued the Bahamian liquidators in
March, seeking a ruling that the liquidators had wrongly claimed
ownership of the exchange's assets, the report relays.
Under the agreement, FTX's U.S. based bankruptcy team will take the
lead on asset recovery efforts, including any potential sale of the
FTX.com exchange or its intellectual property, the report
discloses. The Bahamian liquidators will be in charge of selling
real estate assets in the Bahamas and pursuing certain litigation
claims, the report says.
The settlement also includes an agreement to FTX's proprietary
crypto token FTT as equity in FTX, which would be wiped out in the
company's bankruptcy, the report relays. The value of FTT tokens
had been a point of contention between the two sides last year,
when FTX's U.S. team alleged that most of the assets seized by the
Bahamian liquidators were valueless FTT tokens, the report notes.
FTX, which collapsed in November 2022, has committed to using at
least 90% of its assets to repay customers, the report relays. The
company plans to pay customers back in U.S. dollars, rather than in
cryptocurrency, the report adds.
About FTX Group
FTX is the world's second-largest cryptocurrency firm. FTX is a
cryptocurrency exchange built by traders, for traders. FTX offers
innovative products including industry-first derivatives, options,
volatility products and leveraged tokens.
Then CEO and co-founder Sam Bankman-Fried said Nov. 10, 2022, that
FTX paused customer withdrawals after it was hit with roughly $5
billion worth of withdrawal requests.
Faced with liquidity issues, FTX on Nov. 9 struck a deal to sell
itself to its giant rival Binance, but Binance walked away from the
deal amid reports on FTX regarding mishandled customer funds and
alleged US agency investigations.
At 4:30 a.m. on Nov. 11, Bankman-Fried ultimately agreed to step
aside, and restructuring vet John J. Ray III was quickly named new
CEO.
FTX Trading Ltd (d/b/a FTX.com), West Realm Shires Services Inc.
(d/b/a FTX US), Alameda Research Ltd. and certain affiliated
companies then commenced Chapter 11 proceedings (Bankr. D. Del.
Lead Case No. 22-11068) on an emergency basis on Nov. 11, 2022.
Additional entities sought Chapter 11 protection on Nov. 14, 2022.
FTX Trading and its affiliates each listed $10 billion to $50
million in assets and liabilities, making FTX the biggest
bankruptcy filer in the US this year. According to Reuters, SBF
shared a document with investors on Nov. 10 showing FTX had $13.86
billion in liabilities and $14.6 billion in assets. However, only
$900 million of those assets were liquid, leading to the cash
crunch that ended with the company filing for bankruptcy.
The Hon. John T. Dorsey is the case judge.
The Debtors tapped Sullivan & Cromwell, LLP as bankruptcy counsel;
Landis Rath & Cobb, LLP as local counsel; and Alvarez & Marsal
North America, LLC as financial advisor. Kroll is the claims agent,
maintaining the page https://cases.ra.kroll.com/FTX/Home Index
The Official Committee of Unsecured Creditors tapped Paul Hastings
as counsel, FTI Consulting, Inc., as financial advisor, and
Jefferies LLC as the investment banker. Young Conaway Stargatt &
Taylor LLP is the Committee's Delaware and conflicts counsel.
Montgomery McCracken Walker & Rhoads LLP, led by partners Gregory
T. Donilon, Edward L. Schnitzer, and David M. Banker, is
representing Sam Bankman-Fried in the Chapter 11 cases. White
collar crime specialist Mark S. Cohen has reportedly been hired to
represent SBF in litigation. Lawyers at Paul Weiss previously
represented SBF but later renounced representing the entrepreneur
due to a conflict of interest.
===========
B R A Z I L
===========
AMERICANAS SA: Creditors Okay Debt Restructuring Plan
-----------------------------------------------------
Daniel Cancel of Bloomberg News reports that creditors holding
97.18% of distressed Brazilian retailer Americanas SA debt approved
a restructuring plan to overhaul 50 billion reais ($10.3 billion)
of debt in a key step to implementing a recovery plan for the
company nearly a year after its sudden implosion due to a
multi-year fraud.
With more than 97% of banks, bondholders and suppliers represented
at the virtual meeting, the creditors gave the company the green
light to proceed with the plan that envisions a capital injection
of 24 billion reais in 2024 and recovery rates close to 30%.
About Americanas SA
Americanas was one of the largest diversified retail chains in
Brazil, with a wide platform of physical stores, robust e-commerce,
fintech, and has just entered into the niche food retail. It is
listed on B3, being indirectly controlled by billionaire Jorge
Paulo Lemann, Carlos Alberto Sicupira and Marcel Telles.
The retailer nosedived in January 2023 after becoming mired in an
accounting scandal. The firm filed for bankruptcy at a court in
Rio de Janeiro on Jan. 19, 2023.
Americanas sought protection under Chapter 15 of the Bankruptcy
Code (Bankr. S.D.N.Y. Case No. 23-10092) on Jan. 25, 2023. White &
Case LLP, led by John K. Cunningham, is the U.S. counsel.
BRAZIL MINAS: S&P Raises USD1.27B Fixed-Rate Notes Rating to 'BB'
-----------------------------------------------------------------
S&P Global Ratings raised its rating on Brazil Minas SPE's U.S.
$1.27 billion 5.333% fixed-rate notes due 2028. At the same time,
S&P raised its ratings on Rio Oil Finance Trust's fixed-rate notes
series 2014-3 and 2018-1.
Brazil Minas SPE is a Brazilian ABS synthetic transaction that
benefits from a guarantee from the sovereign, the Federative
Republic of Brazil, while Rio Oil Finance Trust is a future flow
transaction backed by current and future royalty and special
participation payments from offshore oil and natural gas production
in the Rio de Janeiro State in Brazil.
The rating actions follow the Dec. 19, 2023 upgrade on Brazil's
sovereign upgrade and subsequent revisions to Brazilian corporate
and infrastructure entities and financial services companies.
The rating on Brazil Minas SPE is based on the rating on the
relevant counterparty as guarantor (sovereign). The ratings on Rio
Oil Finance Trust's notes primarily reflect the rating on Petroleo
Brasileiro S.A. (Petrobras) and ultimately the rating on Brazil.
Ratings Raised
Brazil Minas SPE
Series 5.33% notes due 2028 to 'BB' from 'BB-'
Rio Oil Finance Trust
Series 2014-3 to 'BB' from 'BB-'
Series 2018-1 to 'BB' from 'BB-'
BRAZIL: Economic Activity Down 0.06% in October
-----------------------------------------------
Reuters reports that economic activity in Brazil performed worse
than expected in October, central bank data showed, corroborating
broad readings of economic cooling.
The IBC-Br index, a key predictor of gross domestic product (GDP),
fell by a seasonally adjusted 0.06% from September, the report
notes.
On a non-seasonally adjusted basis, the IBC-Br was up 1.54% over
October 2022 and grew by 2.19% in the 12 months, the report relays.
Latin America's largest economy has previously prospered this year
on the strength of its agribusiness and extractive industries, the
report says.
It was also supported by measures implemented by President Luiz
Inacio Lula da Silva's government to enhance household disposable
income and stimulate domestic demand, the report notes.
But the growth lost momentum from the second half of this year
under a restrictive monetary policy, even though economic growth is
on track to reach around 3% this year, well above the level of less
than 1% expected by the market at the beginning of the year, 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).
=====================================
T R I N I D A D A N D T O B A G O
=====================================
TRINIDAD & TOBAGO: Central Bank Warns of Potential Inflation Uptick
-------------------------------------------------------------------
Joel Julien at Trinidad Express reports that the Central Bank has
warned that there is a possibility of an uptick in inflation next
year, contingent on the evolution of global prices and the timing
and magnitude of utility rate changes, according to its latest
monetary policy report.
"Domestic inflation is expected to remain low in the final months
of 2023, with a possible uptick in 2024, based on how global prices
evolve and the timing and magnitude of utility rate changes. Some
demand pressures could also materialise depending on the extent of
wage settlements and payments of salary arrears," the Central Bank
stated in its November Monetary Policy which was published,
according to Trinidad Express.
Trinidad Express notes that the report stated that activity in the
non-energy sector is expected to benefit from increased business
activity alongside the ongoing resurgence in consumer demand.
"Energy sector performance hinges on the commencement of upstream
projects to bolster supply. Production from Touchstone's Cascadura
and EOG's Osprey prospects, expected before year's end, can support
output in the second half of 2023," it stated, Trinidad Express
relays.
"Monetary policy will continue to focus on inflation, while taking
into account domestic growth prospects and interest differentials
with the rest of the world. At present, inflation is very low,
there are signs that the economy's steady recovery continues,
credit is recovering at a good pace, and short-term interest
differentials with the US are still negative. All of these factors
could change in light of, among other things, international supply
side uncertainties affecting global prices, the outcome of energy
production plans, and the path of interest rates in the US and
elsewhere. The Central Bank of Trinidad and Tobago remains poised
to calibrate its monetary policy in light of emerging
developments," the report added, Trinidad Express says.
The report stated that domestically, several indicators suggest
economic activity picked up in the second quarter of 2023, Trinidad
Express notes.
"Activity was driven by an improvement in the non-energy sector
which countered a decline in output from the energy sector. This
may have also contributed to an improvement in labor market
conditions as the unemployment rate fell and labor force
participation improved," said the report, Trinidad Express
relates.
The report stated that employment gains were noted in the
Construction (including Electricity and Water); Wholesale, Retail,
Restaurants and Hotels; and Community, Social and Personal Services
sectors. Meanwhile, headline inflation eased to 1.3% in October
2023 on account of a deceleration in both food and core inflation,
it stated, Trinidad Express discloses.
The report stated that the financial system liquidity decreased
from May to November 2023, Trinidad Express relays.
"Fiscal operations, usually the main driver of excess liquidity,
resulted in net injections of $2.6 billion over the review period,
compared to injections of $7.8 billion one year earlier. Central
Bank Open Market Operations (OMOs) resulted in net injections of $2
billion over May to November 2023. Simultaneously, the Central
Bank's foreign exchange sales to authorised dealers indirectly
removed $5.6 billion from the system. Nonetheless, excess
liquidity remained ample, underpinning expansions in private sector
credit. As of September 2023, consolidated system credit remained
favourable driven by robust growth in consumer, real estate
mortgage and business lending. Meanwhile, conditions in the
foreign exchange market remained relatively tight," it stated,
Trinidad Express says.
The report noted that in this context, the Central Bank of Trinidad
and Tobago kept its monetary policy stance unchanged, Trinidad
Express discloses.
"During its June and September 2023 Monetary Policy Committee (MPC)
meetings, the Central Bank kept the short-term rate on its
overnight collateralised financing to commercial banks, the Repo
rate, at 3.50%. The MPC took account of the economic recovery
alongside the deceleration in domestic inflation in calibrating its
stance. At the same time, the Committee noted that the (negative)
short-term interest differential between Trinidad and Tobago and
the United States had widened. In this regard, particular
attention needed to be paid to the interest rate trajectory of the
US Federal Reserve, while balancing the implications of higher
domestic rates on economic growth," it stated, Trinidad Express
adds.
*********
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