/raid1/www/Hosts/bankrupt/TCRLA

/raid1/www/Hosts/bankrupt/TCRLA_Public/240119.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 Friday, January 19, 2024, Vol. 25, No. 15 Headlines A R G E N T I N A ARGENTINA: To Issue 20,000-Peso Bills as Inflation Eclipses 211% GAUCHO GROUP: 2 Execs Receive 7,093 Shares Under Incentive Plan YPF SA: Blow for Argentina as US Court Rules Against Nation YPF SA: US$16.1-Billion Judgement is Now Open to Collection B R A Z I L AMERICARE INC: Commences Subchapter V Proceeding C H I L E INVERSIONES LATIN: Fitch Withdraws D Rating on USD403MM Sec. Notes C O L O M B I A ECOPETROL SA: Fitch Assigns 'BB+' Rating on $1.85BB Unsec Notes J A M A I C A JAMAICA: Finalizing Overtime Pay System for Public Sector Workers [*] JAMAICA: Economy Grew 2.3%, World Bank Says P U E R T O R I C O PUERTO RICO: PREPA Wants Pension, Union Contracts Tossed V E N E Z U E L A VENEZUELA: Records Inflation of 189% in 2023 - - - - - ================= A R G E N T I N A ================= ARGENTINA: To Issue 20,000-Peso Bills as Inflation Eclipses 211% ---------------------------------------------------------------- Buenos Aires Times reports that Argentina is preparing to offer larger denomination peso bills in an attempt to simplify daily transactions that require some in the country to carry backpacks stuffed with cash. The Central Bank said it approved the production of 10,000-peso and 20,000-peso notes and would make them available by June, according to Buenos Aires Times. The move is intended to make the financial system more efficient and reduce the costs of acquiring older bills, the report notes. Currently, the largest denomination in circulation is a 2,000 peso note - and even those are rare and highly sought after, the report relays. Larger denomination notes will help to ease issues created by soaring prices, with official figures released earlier showing the annual inflation rate hitting 211.4 percent n December, the report says. That puts Argentina ahead of Venezuela as the country with the steepest consumer-price gains in Latin America, the report discloses. Since President Javier Milei devalued the currency by 54 percent in December, the peso has come under fresh pressure, the report notes. The official exchange rate stood at about 815 pesos per dollar, and the Central Bank intends to let it fall by two percent each month, the report relays. The peso has also weakened in parallel markets used to skirt currency controls, the report discloses. And the black market rate, known as "dollar blue," has slumped to as much as 1,150 pesos per greenback since the beginning of the year, the report says. While the country has now informally adopted the US dollar for many every day transactions, it's expensive for Argentines to acquire them and local currency is still needed for quotidian tasks like trips to the grocery store, transportation and restaurant meals, the report 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. GAUCHO GROUP: 2 Execs Receive 7,093 Shares Under Incentive Plan --------------------------------------------------------------- Gaucho Group Holdings, Inc. disclosed in a Form 8-K Report filed with the U.S. Securities and Exchange Commission that, in connection with the vesting of Restricted Stock Units, on December 31, 2023, the Company's CEO and CFO received a total of 7,093 shares pursuant to RSUs issued under the 2018 Equity Incentive Plan at a price per share of $11.16. For this sale of securities, no general solicitation was used, no commissions were paid, all persons were accredited investors, and the Company relied on the exemption from registration available under Section 4(a)(2) and/or Rule 506(b) of Regulation D promulgated under the Securities Act with respect to transactions by an issuer not involving any public offering. A Form D was filed with the SEC on March 30, 2023. About Gaucho Group Headquartered in New York, NY, Gaucho Group Holdings, Inc.'s (gauchoholdings.com) mission has been to source and develop opportunities in Argentina's undervalued luxury real estate and consumer marketplace. The Company has positioned itself to take advantage of the continued and fast growth of global e-commerce across multiple market sectors, with the goal of becoming a leader in diversified luxury goods and experiences in sought after lifestyle industries and retail landscapes. Gaucho reported a net loss of $21.83 million for the year ended Dec. 31, 2022, compared to a net loss of $2.39 million for the year ended Dec. 31, 2021. As of Sept. 30, 2023, the Company had $18.91 million in total assets, $11.02 million in total liabilities, and $7.89 million in total stockholders' equity. In its Quarterly Report for the three months ended Sept. 30, 2023, Gaucho disclosed that based upon projected revenues and expenses, the Company may not have sufficient funds to operate for the next twelve months from the date of the report. Since its inception, the Company's operations have primarily been funded through proceeds received from equity and debt financings. The Company believes it has access to capital resources and continues to evaluate additional financing opportunities. There is no assurance that the Company will be able to obtain funds on commercially acceptable terms, if at all. There is also no assurance that the amount of funds the Company might raise will enable the Company to complete its development initiatives or attain profitable operations. These factors raise substantial doubt about the Company's ability to continue as a going concern. YPF SA: Blow for Argentina as US Court Rules Against Nation ----------------------------------------------------------- Buenos Aires Times reports that Argentina has received a damaging court blow after a US judge ruled against the nation in a case related to the 2012 controversial nationalisation of state energy firm YPF SA. New York Judge Loretta Preska did not admit a new request for an extension, filed through a letter drafted by law firm Sullivan & Cromwell LLP, which represents Argentina in the case for the nationalisation of 51 percent of the shares in the state-run oil company during Cristina Kirchner's administration, from Spanish company Repsol, according to Buenos Aires Times. In her answer, the magistrate asserted that even if "she sympathises with the scale of the financial challenges" facing the country, it is "a proven fact" that the Executive Branch "has not taken, and supposedly cannot take, any measures to complete the payment and has no schedule to do so", which is what led her to make the decision, the report notes. On September 15 last year, the magistrate ordered Argentina to pay US$16.1 billion to two companies with shares in YPF that had not been compensated after the nationalisation of the oil company in 2012, when it was under the control of Spanish company Repsol, the report discloses. Last December, Argentina'sPresident, Javier Milei acknowledged that the country does not have the necessary funds to post a bond to the Manhattan court, but said: "We are willing to pay," the report relays. "The Republic argues that the 'terrible economic circumstances, including widespread poverty, the renegotiation of credit lines with the International Monetary Fund, the incapacity to access international capital markets and inflation now nearing 200 percent' discourage me from admitting the plaintiffs' motion. Even though the court sympathises, the Republic's own admission of lack of access to funds disproves its argument", the document added, the report notes. After this determination, Burford Capital, which purchased the right to litigate from the Petersen Group: Petersen Energia Inversora and Petersen Energia, Argentine companies which held 25 percent of the shares, is in a position to request liens in the total amount of US$16 billion, the report discloses. Regarding which assets could go "in the bag" of the fund's requests, whose CEO and founder is the former vice-president for Legal Affairs of Time Warner, Christopher Bogart, heading an army of 350 lawyers and legal experts, Sebastian Maril stated that "everything owned by the state may be attached," the report relays. "I don't rule out any commercial agreement, such as the export of gas, which generates royalties in dollars, may be attached. Patents, Aerolineas Argentinas aircraft owned by the state, among others. These people have teams conducting recovery work, and are experts in finding assets," the CEO of Latam Advisor told Perfil, the report says. However, he clarified that this does not necessarily mean that the attachments will start but they may already be enforced, the report notes. This explains why the state-run oil company itself announced the placement of Negotiable Bonds to the tune of US$800 million, in what represents its first foray into the international market in four and a half years, backed by exports, since, as explained by Maril, "oil royalties are safe from any attempt at attachment by the beneficiaries of the ruling in the expropriation case," the report adds. About YPF SA YPF S.A. is a vertically integrated, majority state-owned Argentine energy company, engaged in oil and gas exploration and production, and the transportation, refining, and marketing of gas and petroleum products. Founded in 1922, YPF was an oil company established as a state enterprise. YPF was later privatized under president Carlos Menem and was bought by the Spanish firm Repsol in 1999, and the resulting merged company was call Repsol YPF. In 2012, about 51% of the firm was renationalized and this was initiated by President Cristina Fernandez se Kirchner. The government of Argentina agreed to pay $5 billion compensation to Repsol. In April 2023, S&P Global Ratings lowered its local and foreign currency ratings on YPF SA to 'CCC-' from 'CCC+'. The outlook on these ratings is now negative. The downgrade follows a similar action on S&P's long-term foreign currency ratings and T&C on Argentina, following announced plans that, if implemented, would oblige some nonfinancial public-sector entities to exchange or sell their holdings of global-and local-law dollar-denominated bonds issued during the 2020 restructuring for other locally issued peso debt, likely dollar-and/or inflation-linked bonds. In S&P's view, the lack of clarity and the apparent motivation for the potential transaction underscore heightened credit vulnerabilities, in particular given the increasing pressures from the severe drought that Argentina is facing, which further constrains the already disrupted FX market. This expected greater pressure on the FX markets also explains S&P's downward revision of the T&C assessment to 'CCC-'. YPF SA: US$16.1-Billion Judgement is Now Open to Collection ----------------------------------------------------------- Bob Van Voris & Jonathan Gilbert at Bloomberg News report that investors seeking to collect a US$16.1-billion court judgment from Argentina over its 2012 takeover of oil company YPF SA can start going after its assets, after a US judge ruled against the nation's bid to push back those collection efforts. The ruling is a blow to President Javier Milei's government as it appeals US District Judge Loretta Preska's September judgement - the biggest ever ordered by the federal court in Manhattan, according to Bloomberg News. Argentina, beset by economic distress including surging inflation, says the ruling equals almost one-fifth of its 2023 budget and that paying it would cause severe hardship, Bloomberg News notes. The ruling came after Argentina missed a January 10 deadline to pledge assets, a condition that would have allowed it to appeal the judgement without having to post a bond securing the full amount, Bloomberg News relays. Preska ruled in November that Buenos Aires could delay payment, pending its appeal, without the bond, Bloomberg News discloses. But the judge put a condition on that delay: by January 10, the country had to pledge an equity interest in YPF, and proceeds from a hydroelectric dam project, as security for the investors, including former shareholders of YPF led by the litigation funder Burford Capital, Bloomberg News says. Burford stands to reap US$6.2 billion of the judgement. It didn't immediately return an email seeking comment on the ruling. A spokeswoman for Argentina's Economy Ministry didn't return a phone message. In her ruling, Preska agreed with Burford's position that a reasonable amount of time has passed since the judgement, rejecting Argentina's argument that the investors shouldn't be allowed to start going after the assets yet, Bloomberg News adds. The case is Petersen Energia Inversora SAU v. Argentine Republic, 15-cv-02739, US District Court, Southern District of New York (Manhattan). About YPF SA YPF S.A. is a vertically integrated, majority state-owned Argentine energy company, engaged in oil and gas exploration and production, and the transportation, refining, and marketing of gas and petroleum products. Founded in 1922, YPF was an oil company established as a state enterprise. YPF was later privatized under president Carlos Menem and was bought by the Spanish firm Repsol in 1999, and the resulting merged company was call Repsol YPF. In 2012, about 51% of the firm was renationalized and this was initiated by President Cristina Fernandez se Kirchner. The government of Argentina agreed to pay $5 billion compensation to Repsol. In April 2023, S&P Global Ratings lowered its local and foreign currency ratings on YPF SA to 'CCC-' from 'CCC+'. The outlook on these ratings is now negative. The downgrade follows a similar action on S&P's long-term foreign currency ratings and T&C on Argentina, following announced plans that, if implemented, would oblige some nonfinancial public-sector entities to exchange or sell their holdings of global-and local-law dollar-denominated bonds issued during the 2020 restructuring for other locally issued peso debt, likely dollar-and/or inflation-linked bonds. In S&P's view, the lack of clarity and the apparent motivation for the potential transaction underscore heightened credit vulnerabilities, in particular given the increasing pressures from the severe drought that Argentina is facing, which further constrains the already disrupted FX market. This expected greater pressure on the FX markets also explains S&P's downward revision of the T&C assessment to 'CCC-'. =========== B R A Z I L =========== AMERICARE INC: Commences Subchapter V Proceeding ------------------------------------------------ Americare Inc. filed for chapter 11 protection in the District of Nevada. The purpose of Debtor's business is to sell vitamin supplements, superfoods, and alternative medicines via telemarketers. Through its bankruptcy filing, the Debtor intends to address its liabilities and obtain the necessary relief in order to continue operating its business. The Debtor reported $4,333,402 in debt owed to 1 and 49 creditors. The petition states funds will be available to unsecured creditors. About Americare Inc. Americare Inc. -- https://www.americarenow.com/ -- d/b/a Americare Health -- manufactures sustainably-sourced nutrition products, promoting health, fitness and natural beauty. The Company's supplements and vitamins come from natural sources of essential proteins, sourced from pasture-raised cows in Brazil and New Zealand and wild-caught fish in Hawaii. Americare Inc. sought relief under Subchapter V of Chapter 11 of the U.S. Bankruptcy Code (Bankr. D. Nev. Case No. 23-15688) on December 23, 2023. In the petition filed by Mario Gonzalez, as president and CEO, the Debtor reports total assets of $111,380 and total liabilities of $4,333,402. Ryan A. Andersen, Esq., of Andersen & Beede represents the Debtor. ========= C H I L E ========= INVERSIONES LATIN: Fitch Withdraws D Rating on USD403MM Sec. Notes ------------------------------------------------------------------ Fitch Ratings has affirmed and subsequently withdrawn the 'D' rating on Inversiones Latin America Power Limitada's (ILAP) USD403.9 million senior secured notes. Given ILAP's Chapter 11 filing on Nov. 30, 2023 and corresponding court approval on Jan. 3, 2024, Fitch will no longer provide ratings or analytical coverage for ILAP's notes. KEY RATING DRIVERS ILAP's issuance rating was originally reflective of its mostly contracted position through regulated, fixed-price power purchase agreements (PPAs), moderate wind resource variability, some curtailment risk, adequate service and availability agreements with Vestas Chile, as well as a solid debt structure. Nonetheless, the deterioration of ILAP's financial profile resulting from spot price volatility, the extension of the electricity tariff stabilization mechanism, and the continued delay in the implementation of a monetization facility, impaired the project's payment capacity, leading to the default of the notes in July 2023. RATING SENSITIVITIES Factors that Could, Individually or Collectively, Lead to Negative Rating Action/Downgrade Rating sensitivities do not apply; the rating is being withdrawn. Factors that Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade Rating sensitivities do not apply; the rating is being withdrawn. SECURITY ILAP issued USD403.9 million in partially amortizing senior secured notes, with a balloon payment due in 2033. This debt is principally secured by a first priority security interest in all assets, the material project documents and the project accounts. The proceeds of the issuance were used to refinance existing debt; pay transaction fees, expenses and general corporate purposes; and pay for financing costs associated with the transaction and other corporate purposes. The transaction consists of the holding company, ILAP, which issued all of the transaction debt and receives upstreamed cash flows in the form of shareholder loan payments from the project companies and guarantors, San Juan, S.A. and Norvind, S.A. San Juan, S.A. owns and operates the San Juan windfarm in Vallenar, within the Atacama region in Chile, with an installed capacity of 193.2 MW that consists of 56 Vestas V117-3.45MW wind turbine generators. This windfarm began commercial operations in March 2017. Norvind, S.A. owns and operates the Totoral windfarm in Canela, within the Coquimbo region in Chile, with an installed capacity of 46 MW that consists of 23 Vestas V90-2.0MW wind turbine generators. This windfarm began commercial operations in January 2010. 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. Following the rating withdrawal of ILAP's notes, Fitch will no longer be providing the associated ESG Relevance Scores. Entity/Debt Rating Prior ----------- ------ ----- Inversiones Latin America Power Ltda. Inversiones Latin America Power Ltda./Energy Revenues - First Lien/1 LT LT D Affirmed D Inversiones Latin America Power Ltda./Energy Revenues - First Lien/1 LT LT WD Withdrawn D =============== C O L O M B I A =============== ECOPETROL SA: Fitch Assigns 'BB+' Rating on $1.85BB Unsec Notes --------------------------------------------------------------- Fitch Ratings has assigned a 'BB+' rating to Ecopetrol S.A.'s new issuance of up to USD1.85 billion senior unsecured notes with a 12-year maturity. The proceeds of the notes will be used to repay USD1.2 billion of the 2025 bonds and other non-investment expenses. Ecopetrol S.A.'s ratings reflect the close linkage with the Republic of Colombia (BB+/Stable), which owns 88.5% of the company. Ecopetrol's ratings also reflect the company's strategic importance to the country, as well as its ability to maintain a solid financial profile. KEY RATING DRIVERS Linkage to Sovereign: Ecopetrol's ratings reflect the strong linkage with the credit profile of the Republic of Colombia, owner of 88.5% of the company's total capital. The ratings also reflect the very strong incentive of the Colombian government to support Ecopetrol in the event of financial distress, given the company's strategic importance to the country as a supplier of virtually all liquid fuel demand in Colombia, and owner of 100% of the country's refining capacity. Ecopetrol relies on the receipt of funds from the Colombian government, through its stabilization fund Fondo de Estabilizacion de Precios de los Combustibles (FEPC), to offset the difference from selling gasoline and diesel in the local market at lower prices versus the export market. At September 2023, the amount accrued in the FEPC was COP25.7 trillion (USD5.7 billion). Fitch expects that the balance in the FEPC account will decrease with several price adjustments beings rolled-out by the government. During 2022, the price of gasoline was adjusted by COP600/gallon, and by additional COP4,220/gallon during the nine months of 2023. Strong Financial Profile: Ecopetrol's 'bbb' Standalone Credit Profile (SCP) reflects the company's strong financial profile. Fitch-calculated gross leverage as measured by total debt to EBITDA is expected to average 2.5x through the rating horizon, which is moderate for the industry, as Brent prices continue supporting EBITDA generation, and debt is not expected to have any drastic changes. Fitch expects Ecopetrol's interest coverage as measured by EBITDA to interest expense coverage to exceed 6x consistently through the rating horizon. Positive FCF Expected: Fitch expects Ecopetrol's FCF to be positive going forward, subject to revisions to investment and dividends plans. Fitch's base case assumption includes the company having an average annual capex budget of approximately USD5.5 billion over the next three years, and that it will pay 60% of previous year's net income in line with its 40% to 60% dividend policy. This, coupled with Fitch's price assumptions for Brent crude oil price of USD80/bbl in 2023, USD75/bbl in 2024 and USD60/bbl in the long term, would result in positive FCF over the next three years. Stable Operating Metrics: Fitch assumes total hydrocarbons production to be 730 thousand barrels of oil equivalent per day (boe/d) in 2023 exhibiting a trend or recovery expected to continue over the next three years. The company's 2022 proved reserves (1P) of 1,969 million boe gave the company a reserve life of 8.7 years as of 3Q23. Fitch assumes a 105% reserve replacement rate. Fitch's calculated after-tax full cycle cost for Ecopetrol has remained relatively stable over the past three years at approximately USD47/boe. DERIVATION SUMMARY Ecopetrol's rating linkage to the Colombian sovereign rating is in line with the linkage for most national oil and gas companies (NOCs) in the region, including Petroleos Mexicanos (PEMEX; B+/Rating Watch Negative), Petroleo Brasileiro S.A. (Petrobras; BB/Stable), Petroleos del Peru - Petroperu S.A. (BB+/Negative) and Empresa Nacional del Petroleo (ENAP; A-/Stable). In most cases in the region, NOCs are of significant strategic importance for energy supply to their countries, including in Mexico, Colombia and Brazil. NOCs can also serve as a proxy for federal government funding as in Mexico, and have strong legal ties to governments through their majority ownership, strong control and governmental budgetary approvals. Ecopetrol's SCP is commensurate with a 'bbb' rating, which is in line with that of Petrobras at 'bbb', given Petrobras' recent significant debt reduction. Excluding IFRS16 leases, Ecopetrol's leverage at YE 2021 was 3.1x. Ecopetrol's credit profile is materially higher than that of Pemex's 'ccc-' SCP as a result of Ecopetrol's deleveraging capital structure versus PEMEX's increasing leverage trajectory. Ecopetrol will continue to report stable production, which Fitch expects to stabilize around 700,000 boed. This production trajectory further supports the notching differential between the two companies' SCP. KEY ASSUMPTIONS - Ecopetrol remains majority owned by Colombia; - Brent average 82 USD/bbl in 2023 and USD80/bbl in 2024 before trending toward USD60/bbl in the long term; - 9.5% discount to Brent on average through rating horizon; - Stable production growth of 1.5% per annum through 2026; - 105% reserve replacement ratio per year; - Aggregate capex of approximately USD5.5 billion per year for the next three years; - Dividends of 60% of previous year's net income. RATING SENSITIVITIES Factors that could, individually or collectively, lead to positive rating action/upgrade: - Although not expected in the short to medium term, an upgrade of Colombia's sovereign ratings. Factors that could, individually or collectively, lead to negative rating action/downgrade: - A downgrade of Colombia's sovereign ratings; - A significant weakening of the company's linkage with the government and a lower government incentive to support couple with a deterioration of its SCP; - A decrease of 1P reserves below 1.5 billion boe could trigger a downgrade to the SCP of the company from 'bbb'. LIQUIDITY AND DEBT STRUCTURE Strong Liquidity: Ecopetrol's strong liquidity profile is supported by cash on hand, which amounted to USD3.46 billion at Sept. 30, 2023, strong access to the capital markets and an adequate debt maturity profile. By November 2023, the company had already refinanced all of its 2023 maturities. Based on market appetite, Fitch does not expect Ecopetrol will have difficulty refinancing, partially or in full, its 2024 maturities. ISA Contribution: Fitch expects that the majority of Ecopetrol's consolidated EBITDA will continue to be generated from its oil and gas business. Fitch estimates that ISA's EBITDA of USD1.7 billion in 2023, adjusted to Ecopetrol's ownership, is expected to represent 8.3% of Fitch's projected Ecopetrol EBITDA for 2023. Gross leverage excluding ISA, defined as total debt to EBITDA, is expected to be 2.0x in 2023, and Fitch forecasts 2.3x on average through 2026, compared to 2.5x on a fully consolidated basis. ISSUER PROFILE Ecopetrol is a leading integrated energy and infrastructure company in the Latin American and Central American region. The company is the largest in Colombia in relation to their Upstream, Midstream and Downstream business segments. Interconexión Eléctrica S.A. is 51% owned by Ecopetrol and is largest energy transmission company in the region acquisition. DATE OF RELEVANT COMMITTEE 14 November 2023 PUBLIC RATINGS WITH CREDIT LINKAGE TO OTHER RATINGS Ecopetrol S.A.'s LT IDR is linked to the sovereign rating of Colombia. ESG CONSIDERATIONS Ecopetrol S.A. has an ESG Relevance Score of '4' for Governance Structure due to its nature as a majority government-owned entity and the inherent governance risk that arises with a dominant state shareholder, which has a negative impact on the credit profile, and is relevant to the ratings in conjunction with other factors. Ecopetrol S.A. has an ESG Relevance Score of '4' for Exposure to Social Impacts due to multiple attacks to its pipelines, 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 ----------- ------ Ecopetrol S.A. senior unsecured LT BB+ New Rating ============= J A M A I C A ============= JAMAICA: Finalizing Overtime Pay System for Public Sector Workers ----------------------------------------------------------------- Javaughn Keyes at RJR News reports that the Jamaican government said it is close to finalising a system to properly allocate overtime pay for public sector workers. Finance Minister Dr. Nigel Clarke says discussions are ongoing with the different unions, and he expects agreement by the end of March, according to RJR News. "Prior to the public sector restructure, there were several different methodologies across the public service and across several occupational groups to compensate for work done outside of normal working hours. These arrangements were largely characterised by a lack of equity, inconsistency of application and in some instances, payments made whether or not work was carried out outside of normal working hours," he noted, the report notes. Dr. Clarke said as a feature of the new compensation system, the government is seeking to establish "clear and consistent principles" to govern the treatment of overtime work and guidelines for the application of payment, the report relays. He said, however, for the policy to work in a fiscally sustainable way, all ministries and their agencies will have to put in place proper management systems, the report notes. Dr. Clarke said, of the more than 100,000 public sector employees, fewer than a thousand are with an outstanding agreement under the new compensation regime implemented a year ago, 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. In October 2023, Moody's upgraded the Government of Jamaica's long-term issuer and senior unsecured ratings to B1 from B2, and senior unsecured shelf rating to (P)B1 from (P)B2. The outlook has been changed to positive from stable. The upgrade of Jamaica's rating to B1 reflects the government's sustained commitment to fiscal consolidation and debt reduction. The positive outlook reflects Moody's assessment that a continuation of the favorable fiscal trajectory will further increase Jamaica's credit resilience. 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. In March 2022, Fitch Ratings affirmed Jamaica's Long-Term Foreign Currency Issuer Default Rating (IDR) at 'B+'. The Rating Outlook is Stable. [*] JAMAICA: Economy Grew 2.3%, World Bank Says ----------------------------------------------- RJR News reports that it's estimated that the Jamaican economy grew by 2.3 per cent. Preliminary data from the World Bank suggests local output grew at a slightly higher pace, compared to the forecast given in 2023, according to RJR News. In June last year, the economic prospects report said Jamaica's gross domestic product was set to increase by 2 per cent, the report notes. Looking at Latin America and the Caribbean region, the growth estimate was also revised upward at 2.2 per cent for 2023 based on the January outlook, the report relays. At June last year, the forecast was for 1.5 per cent growth, the report notes. While data collection is ongoing, the World Bank says the global economy expanded by 2.6 per cent, the report discloses. Advanced economies are estimated to have registered a 1.5 per cent increase in GDP, up from last year's 0.7 per cent forecast, the report says. Emerging markets are, however, still set to increase by 4 per cent, the report relays. The confirmed estimate for 2023 is expected to be delivered by June this year, 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. In October 2023, Moody's upgraded the Government of Jamaica's long-term issuer and senior unsecured ratings to B1 from B2, and senior unsecured shelf rating to (P)B1 from (P)B2. The outlook has been changed to positive from stable. The upgrade of Jamaica's rating to B1 reflects the government's sustained commitment to fiscal consolidation and debt reduction. The positive outlook reflects Moody's assessment that a continuation of the favorable fiscal trajectory will further increase Jamaica's credit resilience. 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. In March 2022, Fitch Ratings affirmed Jamaica's Long-Term Foreign Currency Issuer Default Rating (IDR) at 'B+'. The Rating Outlook is Stable. ===================== P U E R T O R I C O ===================== PUERTO RICO: PREPA Wants Pension, Union Contracts Tossed -------------------------------------------------------- Emily Lever of Law360 reports that the board overseeing Puerto Rico Electric Power Authority's (PREPA) reorganization is urging a federal judge to allow the utility to ditch its collective bargaining agreements with workers as well as pension obligations, saying the company has no way of making up the purported $1 billion payment shortfall in the current retirement plan. About Puerto Rico Puerto Rico is a self-governing commonwealth in association with the United States. The chief of state is the President of the United States of America. The head of government is an elected Governor. There are two legislative chambers: the House of Representatives, 51 seats, and the Senate, 27 seats. In 2016, the U.S. Congress passed PROMESA, which, among other things, created the Financial Oversight and Management Board and imposed an automatic stay on creditor lawsuits against the government, which expired May 1, 2017. The members of the oversight board are: (i) Andrew G. Biggs, (ii) Jose B. Carrion III, (iii) Carlos M. Garcia, (iv) Arthur J. Gonzalez, (v) Jose R. Gonzalez, (vi) Ana. J. Matosantos, and (vii) David A. Skeel Jr. On May 3, 2017, the Commonwealth of Puerto Rico filed a petition for relief under Title III of the Puerto Rico Oversight, Management, and Economic Stability Act ("PROMESA"). The case is pending in the United States District Court for the District of Puerto Rico under case number 17-cv-01578. A copy of Puerto Rico's PROMESA petition is available at http://bankrupt.com/misc/17-01578-00001.pdf On May 5, 2017, the Puerto Rico Sales Tax Financing Corporation (COFINA) commenced a case under Title III of PROMESA (D.P.R. Case No. 17-01599). Joint administration has been sought for the Title III cases. On May 21, 2017, two more agencies -- Employees Retirement System of the Government of the Commonwealth of Puerto Rico and Puerto Rico Highways and Transportation Authority (Case Nos. 17-01685 and 17-01686) -- commenced Title III cases. U.S. Chief Justice John Roberts named U.S. District Judge Laura Taylor Swain to preside over the Title III cases. The Oversight Board has hired as advisors, Proskauer Rose LLP and O'Neill & Borges LLC as legal counsel, McKinsey & Co. as strategic consultant, Citigroup Global Markets as municipal investment banker, and Ernst & Young, as financial advisor. Martin J. Bienenstock, Esq., Scott K. Rutsky, Esq., and Philip M. Abelson, Esq., of Proskauer Rose LLP; and Hermann D. Bauer, Esq., at O'Neill & Borges LLC are onboard as attorneys. Prime Clerk LLC is the claims and noticing agent. Prime Clerk maintains the case Website https://cases.primeclerk.com/puertorico Jones Day is serving as counsel to certain ERS bondholders. Paul Weiss is counsel to the Ad Hoc Group of Puerto Rico General Obligation Bondholders. ================= V E N E Z U E L A ================= VENEZUELA: Records Inflation of 189% in 2023 -------------------------------------------- Buenos Aires Times reports that Venezuela, which often experiences record inflation, closed 2023 with an increase in bolivar prices of 189.8 percent, a slowdown compared to the previous year's 234 percent, according to the Central Bank. The publication of data by the monetary institution in Caracas means that Argentina recorded the highest inflation in Latin America last year, according to Buenos Aires Times. Venezuela, whose economy is almost completely dollarized after years of recession and hyperinflation - which hit 686 percent in 2021 - is struggling with one of the worst inflation crises in the world, the report notes. Shaken by a serious economic meltdown, the country saw its GDP contract by 80 percent between 2013 and 2021, the report relays. That figure from the Central Bank is similar to estimates from private organizations, such as the Venezuelan Financial Observatory (OVF) which predicted inflation of 193 percent in its bolívar currency, the report discloses. The OVF attributed the slowdown to a lesser depreciation of the bolívar and a policy of "salary reduction," since salaries have not increased since May 2022, the report says. The Venezuelan government had also tried the bet on cryptocurrencies in 2018, in part due to inflation but also because of the US embargo on oil, the report notes. But the "Petro," the state cryptocurrency, will disappear on January 15 following a perceived failure of the currency and a corruption scandal, the report discloses. The only consolation for Venezuela is that it has ceded the title of worst inflation in 2023 to Argentina, which closed with an increase in peso prices of 211 percent, after the slow fall of its own currency and a move by the new president, Javier Milei, to devalue it by another 50 percent after taking office in December, the report adds. About Venezuela Venezuela, officially the Bolivarian Republic of Venezuela, is a country on the northern coast of South America, consisting of a continental landmass and a large number of small islands and islets in the Caribbean sea. The capital is the city of Caracas. Hugo Chavez was president to Venezuela from 1999 to 2013. The Chavez presidency was plagued with challenges, which included a 2002 coup d'etat, a 2002 national strike and a 2004 recall referendum. Nicolas Maduro was elected president in 2013 after the death of Chavez. Maduro won a second term at the May 2018 Venezuela elections, but this result has been challenged by countries including Argentina, Chile, Colombia, Brazil, Canada, Germany, France and the United States who deemed it fraudulent and moved to recognize Juan Guaido as president. The presidencies of Chavez and Maduro have challenged Venezuela with a socioeconomic and political crisis. It is marked by hyperinflation, climbing hunger, poverty, disease, crime and death rates, social unrest, corruption and emigration from the country. Moody's has withdrawn 'C' local currency and foreign currency ceilings for Venezuela in September 2022. Standard & Poors has also withdrawn its 'SD/D' foreign currency sovereign credit ratings and 'CCC-/C' local currency ratings on Venezuela in September 2021 due to lack of sufficient information. Fitch withdrew its own 'RD/C' Issuer Default Ratings on Venezuela in June 2019 due to the imposition of U.S. sanctions on the country's government. ********* S U B S C R I P T I O N I N F O R M A T I O N 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 2024. 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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