/raid1/www/Hosts/bankrupt/TCRLA_Public/240213.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, February 13, 2024, Vol. 25, No. 32
Headlines
A R G E N T I N A
ARGENTINA: Sets June Deadline for Lifting of Capital Controls
YPF SA: Plans Sweeping Asset Sale to Focus on Argentina Shale
B A H A M A S
FTX GROUP: Appointment of Examiner Ordered by 3rd Circuit
FTX GROUP: Judge Says New Probe Should be Fast and Limited
B R A Z I L
ATLAS LITHIUM: Waratah Capital Reports 6.16% Equity Stake
BRAZIL: Farmer Bankruptcy Filings Worry Global Grain Traders
BRAZIL: Grain Production to Dip by 3.8% in 2024
BRAZIL: Mining Income Drops in 2023
PETROBRAS: Brazil to Boost Nation's Naval Industry
M E X I C O
PETROLEOS MEXICANOS: $152.2MM Bank Debt Trades at 16% Discount
V E N E Z U E L A
PETROLEOS DE VENEZUELA: PDV Shares Sale Hearing Set for July 15
- - - - -
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A R G E N T I N A
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ARGENTINA: Sets June Deadline for Lifting of Capital Controls
-------------------------------------------------------------
Buenos Aires Times reports that President Javier Milei is
optimistic that he can keep his pledge to the International
Monetary Fund (IMF) and lift capital controls before the end of the
year while postponing his desire to dollarise the economy.
The Casa Rosada assures that the ideal would be to eliminate the
so-called 'cepo' - the word used by Argentines to refer to currency
restrictions - in April or May, according to Buenos Aires Times.
The ultimate deadline would be June, the report discloses.
"Now the next step is to eliminate capital controls by June at the
latest, such is the conviction and plan of the President," a Casa
Rosada office source said, while at the same time warning that a
series of conditions must be met in order to reach this target, the
report relays.
The scenario anxiously sought by the government is that once prices
have found their level, after the summer is over, structural
changes will be applied to the economy, making it possible to bring
down inflation in the following months, the report discloses.
What would permit exchange controls to be eliminated before the end
of the year would be the entry of some US$30 billion corresponding
to farm exports, the report notes. Following the scourge of the
2023 drought, the agricultural situation is expected to become more
regular and supply the corresponding hard currency, the report
says.
Another key factor is the recovery of Central Bank reserves, which
thus far in this Presidency have rose nearly US$6.4 billion, with
government sources forecasting that it will be "at least double
that" in March, the report relays.
"The cepo [capital controls] was created to attenuate economic
crises. No country in the world applies this restriction," the
sources added.
Since taking office, the Javier Milei administration has devalued
the peso to the tune of 118.3 percent, taking the official exchange
rate to 800 pesos with a monthly slippage of two percent, the
report discloses. This variation will continue, probably into
March, so that when the controls are lifted, the dollar is expected
to reach 1,000 pesos, an intermediate level between the current
official and the blue parallel exchange rates, the report relays.
This forms one of the libertarian administration's commitments to
the IMF, published in recent days in the multilateral lender's
staff report, the report discloses.
Dollarsing the economy will also wait, the report notes. "The
issue of dollarisation is not on the IMF agenda," assured President
Milei in a recent interview about his upcoming trip to Israel and
Italy. Quizzed as to whether he is evaluating implementing it this
year, he said "the time is not right," he added.
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.
YPF SA: Plans Sweeping Asset Sale to Focus on Argentina Shale
-------------------------------------------------------------
Jonathan Gilbert at Bloomberg News reports that Argentina's biggest
oil company, state-run YPF SA, is planning a sweeping asset sale
under President Javier Milei to sharpen its focus on shale
production and boost its share price.
The plan is part of a broader effort to streamline the company and
increase its production and exports, according to a company
official who asked not to be identified because they weren't
authorised to discuss the matter publicly, according to Bloomberg
News.
The assets YPF plans to sell are mainly ageing oil fields across
Patagonia that are less profitable than the crown jewel of its
portfolio, shale patch Vaca Muerta, the official said, the report
relays. It will also aim to sell stakes in more than 20 companies
if they are deemed to affect YPF's overall value, the report
discloses. Those units are in the oil and gas, energy and research
and development sectors, the report notes. Holdings that are
profitable or help YPF's equity history would be retained, the
report discloses.
The effort is part of Milei's plan to boost the value of YPF shares
and help the company finally tap the export potential of
Argentina's abundant Vaca Muerta shale formation, which could
produce one million barrels of crude oil per day by 2030, as well
as plenty of natural gas, the report notes.
To this end, YPF will also focus on spearheading plans with
partners to build new pipelines and a liquefied natural gas
terminal, the report notes. And it will continue to explore a new
shale frontier called Palermo Aike and offshore fields, as they
could match the potential of Vaca Muerta, the official said, the
report discloses.
The administration said YPF looked to Brazilian oil giant Petrobras
and its divestments over the past decade for inspiration, the
report relays. YPF's New York-listed shares have fallen since it
was nationalised in 2012, the report notes.
During his election campaign, Milei said he would try to sort out
the company and restore its value before selling it back to the
private sector, although the path to a re-privatisation was
excluded from signed legislation making its way through Congress,
the report relays.
Milei has hired new top executives from Argentine-Italian
billionaire Paolo Rocca's oil and steel empire to execute the
strategy, who will face questions from investors on an earnings
call on MArch 4, 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-'.
=============
B A H A M A S
=============
FTX GROUP: Appointment of Examiner Ordered by 3rd Circuit
---------------------------------------------------------
Rick Archer of Law360 reports that the Third Circuit, on January
19, 2024, ordered the appointment of an examiner in the bankruptcy
of cryptocurrency giant FTX, siding with the U.S. Trustee's Office
that the appointment is required by law.
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
billion 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, 2022, 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: Judge Says New Probe Should be Fast and Limited
----------------------------------------------------------
Steven Church of Bloomberg News reports that a federal judge moved
to limit the cost and length of a new outside investigation of FTX
Trading, the fraud-tainted crypto firm, saying its insolvency case
should not be disrupted by another multimillion-dollar probe.
US Bankruptcy Judge John Dorsey sided with lawyers for FTX and its
creditors, who argued that the new investigation ordered by an
appellate court should be short and limited in scope. In early
January 2024, a federal appeals court in Philadelphia ordered the
appointment of an examiner for the Chapter 11 case, but left the
details of any investigation up to Dorsey.
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
billion 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, 2022, 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
===========
ATLAS LITHIUM: Waratah Capital Reports 6.16% Equity Stake
---------------------------------------------------------
In a Schedule 13G Report filed with the U.S. Securities and
Exchange Commission, Waratah Capital Advisors Ltd. disclosed that
as of July 17, 2023, it beneficially owned 661,158 shares of Atlas
Lithium Corporation's Common Stock, representing 6.16% of the
shares outstanding.
The Shares are owned by a private investment fund for which Waratah
Capital Advisors Ltd. provides discretionary advisory services and
has proxy voting authority, which cannot be withdrawn by the fund
within 60 days. Accordingly, for purposes of Rule 13d-3 under the
Securities Exchange Act of 1934, Waratah may be deemed to
beneficially own the Shares. In accordance with Rule 13d-4 under
the Exchange Act, Waratah expressly disclaims beneficial ownership
of the Shares for purposes of Sections 13(d) or 13(g) of the
Exchange Act.
The percentage is based on 10,729,260 Common Shares outstanding as
of October 20, 2023, and assuming the conversion of all Shares held
into Common Shares, in accordance with Rule 13d-3 of the Act.
A full-text copy of the Report is available at
http://tinyurl.com/tvst6u63
About Atlas Lithium
Atlas Lithium Corporations formerly Brazil Minerals, Inc. is a
mineral exploration and development company with lithium projects
and exploration properties in other critical and battery minerals,
including nickel, rare earths, graphite, and titanium, to power the
increased demand for electrification. The Company's current focus
is on developing its hard-rock lithium project located in Minas
Gerais State in Brazil at a well-known, premier pegmatitic district
in Brazil. The Company intends to produce and sell lithium
concentrate, a key ingredient for the global battery supply chain.
Atlas Lithium reported a net loss of $5.66 million in 2022 and a
net loss of $4.03 million in 2021. As of Sept. 30, 2023, the
Company had $29.13 million in total assets, $22.70 million in total
liabilities, and $6.42 million in total stockholders' equity.
In its Quarterly Report for the three months ended Sept. 30, 2023,
Atlas Lithium said that it may need to seek additional equity or
debt financing to the extent that its current resources are
insufficient to satisfy its cash requirements. If the needed
financing is not available, or if the terms of financing are less
desirable than it expects, the Company may be forced to scale back
its existing operations and growth plans, which could have an
adverse impact on its business and financial prospects and could
raise substantial doubt about its ability to continue as a going
concern.
BRAZIL: Farmer Bankruptcy Filings Worry Global Grain Traders
------------------------------------------------------------
globalinsolvency.com, citing Reuters, reports that Brazilian grain
exporters lobby Anec warned it was concerned about a rise in farmer
bankruptcy filings in the country, adding a recent increase in
cases potentially compromises the execution of grain contracts.
The rise in farmer bankruptcy cases, which may affect delivery of
committed grains throughout the season, may also hamper traders'
ability to complete their export programs, Anec said, according to
globalinsolvency.com.
Farmer groups, including Aprosoja-Mato Grosso and Aprosoja Brasil,
did not have an immediate comment.
"Anec views with great concern the growth in the number of requests
of judicial recovery," the statement said, the report notes.
"Farmers have been offered - indiscriminately and often maliciously
- the judicial recovery procedure as a means of renegotiation of
debts and contracts," Anec said referring to loans and also soy and
corn contracts, the report notes.
Anec represents global grain merchants, including ADM, Bunge,
Cargill, Louis Dreyfus Commodities and China's Cofco, among others,
the report discloses. Brazil is the world's biggest soybean
producer and exporter, and a major corn provider to clients in
Asia, Europe and the Middle East, the report relays. In the
current season, however, Brazilian grain production will be below
expectations because of the negative effect of the El Nino weather
pattern on crops, the report notes. El Nino caused a severe
drought in the center-west of Brazil, reducing soy yields and
production potential in the nation's largest farm state Mato
Grosso, 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: Grain Production to Dip by 3.8% in 2024
-----------------------------------------------
Richard Mann at Rio Times Online reports that in 2024, Brazil
expects to harvest 303.4 million tons of grains, marking a 3.8%
drop from 2023's peak of 315.4 million tons, as per IBGE's report.
This decline in output highlights a modest shrinkage in farming
land to 77.6 million hectares, a minor 0.3% reduction, according to
Rio Times Online.
Corn, soybeans, and rice, key crops in Brazil, will dominate,
forming 91.8% of yield and 86.9% of the cultivated area next year,
the report relays.
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: Mining Income Drops in 2023
-----------------------------------
Richard Mann at Rio Times Online reports that in 2023, Brazil's
mining sector saw a slight income decrease, earning 248.2 billion
reais (US$49.8 billion).
This represented a 0.7% reduction from the previous year, according
to Rio Times Online. A drop in global prices for mining goods
caused this decrease, the report discloses.
The Brazilian Mining Institute (Ibram) shared these findings, the
report relays.
Exports from the sector grew, reaching $43 billion, a 3.1%
increase, the report notes.
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.
Fitch Ratings upgraded on July 26, 2023, Brazil's Long-Term
Foreign-Currency Issuer Default Rating (IDR) to 'BB', from 'BB-',
with a Stable Outlook. The upgrade reflects better-than-expected
macroeconomic and fiscal performance amid successive shocks in
recent years, proactive policies and reforms that have supported
this, and Fitch's expectation that the new government will work
toward further improvements.
In mid-June 2023, S&P Global Ratings, revised the outlook on its
long-term global scale ratings on Brazil to positive from stable.
S&P affirmed its 'BB-/B' long- and short-term foreign and local
currency sovereign credit ratings on Brazil. S&P also affirmed its
'brAAA' national scale rating, and the outlook remains stable. The
transfer and convertibility assessment remains 'BB+'. The positive
outlook reflects signs of greater certainty about stable fiscal and
monetary policy that could benefit Brazil's still-low GDP growth
prospects. Continued GDP growth plus the emerging framework for
fiscal policy could result in a smaller government debt burden than
expected, which could support monetary flexibility and sustain the
country's net external position.
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).
PETROBRAS: Brazil to Boost Nation's Naval Industry
--------------------------------------------------
Iolanda Fonseca at Rio Times Online reports that Brazil's
President, Luiz Inacio Lula da Silva, recently pledged to boost the
nation's naval industry.
He aims to support Petrobras, the top oil firm, according to Rio
Times Online. Lula announced plans to construct ships and offshore
platforms, the report notes.
This move will invigorate Rio de Janeiro's economy and counter its
crime-linked image, the report relays.
During an event in Rio, Lula promised unparalleled investment in
the region, the report adds.
About Petrobras
Petroleo Brasileiro S.A. or Petrobras (in English, Brazilian
Petroleum Corporation - Petrobras) is a semi-public Brazilian
multinational corporation in the petroleum industry headquartered
in Rio de Janeiro, Brazil. Petrobras control significant oil and
energy assets in 16 countries in Africa, the Americas, Europe and
Asia. But, Brazil represents majority of its production.
The Brazilian government directly owns 54% of Petrobras' common
shares with voting rights, while the Brazilian Development Bank and
Brazil's Sovereign Wealth Fund (Fundo Soberano) each control 5%,
bringing the State's direct and indirect ownership to 64%.
A corruption scandal was uncovered in 2014 that involved
Petrobras.
The scandal related to money laundering that involved Petrobras
executives. The executives were alleged to get received kickbacks
from overpriced contracts, to the tune of about $3 billion in
total. Over a thousand warrants were issued against politicians
and businessmen in relation to the scandal. In 2016, Marcelo
Odebrecht, CEO of Odebrecht, was sentenced to 19 years in prison
after being convicted of paying more than $30 million in bribes to
Petrobras executives.
In January 2018, Petrobras agreed to pay $2.95 billion to settle a
U.S. class action corruption lawsuit. In September 2018, Petrobras
agreed to pay $853.2 million to settle with Brazilian and U.S.
authorities.
In July 2022, Fitch Ratings affirmed Petrobras' BB- Long-Term
Issuer Default Rating. In addition, Fitch has revised the Rating
Outlook to Stable from Negative following a similar revision to
Brazil's Sovereign Rating Outlook. Also in July 2022, Egan-Jones
Ratings Company upgraded the foreign currency and local currency
senior unsecured ratings on debt issued by Petrobras to BB+ from
BB.
In January 2024, S&P Global Ratings assigned a new management &
governance (M&G) assessment of moderately negative to Brazil-based
Petroleo Brasileiro S.A. - Petrobras. At the same time, S&P has
affirmed its issuer credit ratings on Petrobras at 'BB' on the
global scale and 'brAAA' on the Brazilian national scale. S&P has
also affirmed its issue-level ratings on the company, and removed
all its ratings from under criteria observation (UCO).
===========
M E X I C O
===========
PETROLEOS MEXICANOS: $152.2MM Bank Debt Trades at 16% Discount
--------------------------------------------------------------
Participations in a syndicated loan under which Petroleos Mexicanos
is a borrower were trading in the secondary market around 84.3
cents-on-the-dollar during the week ended Friday, Feb. 9, 2024,
according to Bloomberg's Evaluated Pricing service data.
The $152.2 million facility is a Term loan that is scheduled to
mature on January 28, 2031. The amount is fully drawn and
outstanding.
Petroleos Mexicanos operates as an oil and gas exploration and
production services. The Company offers pipeline carriage,
petrochemical distriutor and shipping centers, logistics, and fuel
commercialization services. Petroleos Mexicanos serves customers in
Mexico.
=================
V E N E Z U E L A
=================
PETROLEOS DE VENEZUELA: PDV Shares Sale Hearing Set for July 15
---------------------------------------------------------------
A tentatively-scheduled hearing to approve the sale transaction of
shares of PDV Holdings, Inc, which is owned by Petroleos de
Venezuela SA, is set for July 15, 2024 at 10:00 a.m.
The deadline to submit non-biding indication of interest was last
Jan. 26, 2024. The deadline to submit final biding bids is yet to
be determined.
The court-appointed special master is Robert B. Pincus. The
Special Master is advised by Weil, Gotshal & Manges, LLP, as
transaction counsel, and Evercore Group LLC as investment banker.
About PDVSA
Founded in 1976, Petroleos de Venezuela, S.A. (PDVSA) is the
Venezuelan state-owned oil and natural gas company, which engages
in exploration, production, refining and exporting oil as well as
exploration and production of natural gas. It employs around
70,000 people and reported $48 billion in revenues in 2016.
In May 2019, Moody's Investors Service withdrew all the ratings of
Petroleos de Venezuela, S.A. including the senior unsecured and
senior secured ratings due to insufficient information. At the
time of withdrawal, the ratings were C and the outlook was stable.
Citgo Petroleum Corporation (CITGO) is Venezuela's main foreign
asset. CITGO is majority-owned by PDVSA. CITGO is a United
States-based refiner, transporter and marketer of transportation
fuels, lubricants, petrochemicals and other industrial products.
However, CITGO formally cut ties with PDVSA at about February 2019
after U.S. sanctions were imposed on PDVSA. The sanctions are
designed to curb oil revenues to the administration of President
Nicolas Maduro and support for the Juan Guaido-headed party.
*********
S U B S C R I P T I O N I N F O R M A T I O N
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Chapman, Editors.
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