/raid1/www/Hosts/bankrupt/TCRLA_Public/240215.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, February 15, 2024, Vol. 25, No. 34
Headlines
A R G E N T I N A
ARGENTINA: Government Freezes Omnibus Bill
BLOCKFI INC: U.S. Trustee Slams Move to Seal Three Arrows Deal
CLISA: Blames Milei for Woes, Asks for Debt Leniency
B R A Z I L
CEMIG: Moody's Affirms 'Ba2' CFR, Outlook Stable
GOL LINHAS: Accuses Latam of Attempting to Poach Pilots, Aircraft
HAITONG BANCO DE INVESTIMENTO: S&P Alters Ratings Outlook to Neg.
PETROBRAS: Commits $100BB to Global Offshore Venture
REDE D'OR SAO LUIZ: Fitch Affirms BB+ LongTerm IDR, Outlook Stable
C H I L E
CHILE: IMF Says Inflation Projected to Converge to 3% Target
ENJOY SA: Fitch Lowers LongTerm Foreign Currency IDR to 'D'
SEGUROS DE VIDA: S&P Affirms 'BB+' LongTerm Fin. Strength Rating
P A R A G U A Y
TELECEL: Fitch Affirms 'BB+' LongTerm IDR, Outlook Stable
P E R U
PETROLEOS DEL PERU: Fitch Lowers LongTerm IDR to 'B+', Outlook Neg.
T R I N I D A D A N D T O B A G O
TRINIDAD CEMENT: Ministry 'Reviewing' Cement Price Increase
X X X X X X X X
LATAM: IDB, Central America, Dominican Rep Discuss Common Goals
- - - - -
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A R G E N T I N A
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ARGENTINA: Government Freezes Omnibus Bill
------------------------------------------
Buenos Aires Times reports that after the defeat of his 'Ley de
Bases' omnibus reform bill, President Javier Milei does not rule
out the possibility of calling a popular referendum on the omnibus
reform bill.
The La Libertad Avanza leader is seeking to make those provincial
governors who did not accompany him pay "the cost" of the
frustrated bill and has accused them of being "traitors," according
to Buenos Aires Times.
In his ideal world, his fantasies lead him to a new Congress as
from 2025 and another chance, the report notes.
Despite imprecise statements from Presidential Spokesman Manuel
Adorni regarding the possibility of calling a plebiscite, in the
corridors of the Casa Rosada the idea of a referendum has "great
chances" of coming to pass, sources said, the report discloses.
Those who believe the mega-law to be "dead" look kindly on the
chance of calling a non-binding referendum with the intention of
exposing the opposition deputies who did not accompany the reform,
but they know that it should pass through a Congress which, they
believe, "is designed to block things," the report relays.
Case studies on this issue across Latin America include Uruguay,
where Luis Lacalle Pou passed a series of reforms in 2022 via
popular referendum, and Chile, where Gabriel Boric was weakened
after the people rejected a new National Constitution, the report
notes.
"Experience indicates that when this sort of thing happens, the
bills don't come back. We believe this law to be dead with the
option of a popular consultation," alerted a Casa Rosada office
source, the report relays.
With almost zero self-criticism, La Libertad Avanza holds
provincial governors totally responsible for its collapse, the
report says. For them, the regional leaders guaranteed
accompaniment of the mega-law, but their deputies voted against on
the House floor, the report notes.
Singled out are Maximiliano Pullaro (Santa Fe), Gustavo Saenz
(Salta), Martin Llaryora (Cordoba), Carlos Sadir (Jujuy) and
Rolando Figueroa (Neuquen), the report relays.
The relationship with the provincial governors is frayed to the
point where the government does not see a new meeting with all of
them as feasible in the short term, the report notes. A meeting
scheduled between Pullaro and Economy Minister Luis Caputo was
suspended, the report relays.
The decision is simple - the provinces will have to pay the
political cost of the collapse of the mega-law, the report notes.
The message is clear: "No government has seen the first law it
presented rejected. In these conditions, it is difficult to sit
down and talk with people who betray you. You don't negotiate with
traitors," said one source, the report discloses.
The annoyance has even questioned the continuation of Osvaldo
Giordano, the head of ANSES, in his role. His wife, lawmaker
Alejandra Torres (Cordoba-Hacemos Coalicion Federal), voted against
an article, although sources assure the social security chief will
remain in his post, the report notes.
New Congress Dream?
President Milei knows that he is in a minority in Congress, so he
will have to fine-tune his negotiating strategy if he plans to
approve bills from here until 2025 at least, the report relays.
However, the next midterms thrill the libertarian administration
which dreams of a new Congress breakdown with its own majority, the
report notes.
During his trip to Israel, Milei spoke about the congressional
setback, the report notes.
"I see with great optimism what happened, it became clear who is
the caste, everything we were anticipating during the campaign
became reality, the report says.
"As I said in my speech, I have not come to guide lambs but to
awaken lions and I believe that new lions were awakened, becoming
aware of the filthy and disgusting garbage, which is the caste and
on whom without doubt they will turn their backs in 2025, the
report relays.
"We will have a cleaner and more honourable Congress where it will
be possible to pass reforms," he concluded.
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.
BLOCKFI INC: U.S. Trustee Slams Move to Seal Three Arrows Deal
--------------------------------------------------------------
Clara Geoghegan of Law360 reports that an agreement between former
cryptocurrency exchange BlockFi Inc. and defunct hedge fund Three
Arrows Capital that released a tangle of claims against each other
should be public, the Office of the U. S. Trustee told a New Jersey
bankruptcy court, adding that sealing the entire settlement keeps
information from parties that might object to the deal.
About BlockFi Inc.
BlockFi Inc. says it's building a bridge between digital assets and
traditional financial and wealth management products to advance the
overall digital asset ecosystem for individual and institutional
investors.
BlockFi was founded in 2017 by Zac Prince and Flori Marquez and in
its early days had backing from influential Wall Street investors
like Mike Novogratz and, later on, Valar Ventures, a Peter
Thiel-backed venture fund as well as Winklevoss Capital, among
others. BlockFi made waves in 2019 when it began providing
interest-bearing accounts with returns paid in Bitcoin and Ether,
with its program attracting millions of dollars in deposits right
away.
BlockFi grew during the pandemic years and had offices in New York,
New Jersey, Singapore, Poland and Argentina.
BlockFi worked with FTX US after it took an $80 million hit from
the bad debt of crypto hedge fund Three Arrows Capital, which
imploded after the TerraUSD stablecoin wipeout in May 2022.
BlockFi had significant exposure to the companies founded by former
FTX Chief Executive Officer Sam Bankman-Fried. BlockFi received a
$400 million credit line from FTX US in an agreement that also gave
FTX the option to acquire BlockFi through a bailout orchestrated by
Bankman-Fried over the summer. BlockFi also had collateralized
loans to Alameda Research, the trading firm co-founded by
Bankman-Fried.
BlockFi is the latest crypto firm to seek bankruptcy amid a
prolonged slump in digital asset prices. Lenders Celsius Network
LLC and Voyager Digital Holdings Inc. also filed for court
protection this year. Kirkland & Ellis is also advising Celsius
and Voyager in their separate Chapter 11 cases.
BlockFi Inc. and eight affiliates sought protection under Chapter
11 of the Bankruptcy Code (Bankr. D.N.J. Lead Case No. 22-19361) on
Nov. 28, 2022. In the petitions signed by their chief executive
officer, Zachary Prince, the Debtors reported $1 billion to $10
billion in both assets and liabilities.
Judge Michael B. Kaplan oversees the cases.
The Debtors tapped Kirkland & Ellis and Haynes and Boone, LLP, as
general bankruptcy counsels; Walkers (Bermuda) Limited as special
Bermuda counsel; Cole Schotz, P.C., as local counsel; Berkeley
Research Group, LLC as financial advisor; Moelis & Company as
investment banker; and Street Advisory Group, LLC, as strategic
and communications advisor. Kroll Restructuring Administration,
LLC, is the notice and claims agent.
CLISA: Blames Milei for Woes, Asks for Debt Leniency
----------------------------------------------------
Buenos Aires Times reports that as one of Argentina's largest
public works companies runs out of cash and asks investors for
leniency, it's pointing the blame squarely at Javier Milei.
Milei hasn't been in office very long - all of 61 days - but
Compania Latinoamericana de Infraestructura y Servicios (CLISA)
says his plans to gut government spending on construction projects,
combined with the peso devaluation he oversaw upon taking office,
are already hammering its business, according to Buenos Aires
Times.
That's why waste management, construction and transportation giant
Clisa says it's asking investors to accept more bonds - rather than
US dollars - as an interest payment on a US$343 million note due in
2027, the report notes. It's a move that rating assessors are
already warning will be tantamount to a default, foreshadowing more
trouble ahead, the report relays.
"The risk of a restructuring is super high," said Francisco
Schumacher, a corporate analyst at BancTrust & Co. "We don't see a
rebound in public infrastructure spending and are recommending
caution" on the company's bonds, the report discloses.
The distress at Clisa, a key subsidiary of 115-year-old
conglomerate Grupo Roggio, is shining a light on tension between
the corporate sector and Milei's efforts to quell triple-digit
inflation and spur growth, the report says. The president was
dealt a blow when a bill underlying his economic overhaul - "shock
therapy," as he called it - was sent back to square one by
lawmakers, the report relays.
One in 10 corporate dollar bonds in Argentina have yields trading
more than 10 percentage points over similar US Treasuries,
according to data compiled by Bloomberg, a signal of distress, the
report notes.
Buenos Aires Times relays that the risk premium on Clisa's note due
in 2027 is among the highest of the bunch, with investors demanding
an extra 66 percentage points in yield to hold the notes instead of
the US benchmark, the report discloses. The note trades at 23
cents on the dollar, just off an all-time low, the report says.
The company points to Argentina's macroeconomic chaos as the reason
for its hardships, the report notes. Clisa says its clients often
pay their bills late and using local pesos - meaning the cash
clients transfer to the company has often lost value from when
services were rendered amid inflation that has soared to the
fastest in more than three decades, the report relays.
Milei's rise to power has complicated matters further, Clisa told
bondholders in a statement on the rationale for changing the terms
of its debt payments, the report notes. The government's pledge to
cut back on public works has already slowed down business, it said,
adding that the fiscal adjustment plan would be painful, the report
relays. The company didn't provide numbers on the impact of the
new policies in the statement, and didn't respond to emails or
phone messages asking for further explanation, the report
discloses.
One effect of Milei's shock plan that Clisa detailed was the sharp
devaluation of the official peso, the report says. The new
government devalued the peso by 54 percent in its first week in
office, and analysts expect another move will be needed soon, the
report notes. The depreciation "affects Clisa's financial
condition significantly," the company said, as 82 percent of its
debt as of September was denominated in foreign currencies, while
87 percent of revenue during the preceding year was in pesos, the
report relays.
Trouble at Clisa, however, reaches back further than Milei's career
in politics, the report discloses. Shuttered construction projects
during the pandemic led the company in 2021 to ask investors to
exchange bonds maturing in 2023 for new notes due in 2027, the
report notes. It also exercised a payment-in-kind option for a
July 2020 interest payment that led to a downgrade into default,
the report says.
The fate of Milei's belt-tightening campaign is now in limbo after
his omnibus bill failed, the report relays. Even so, Paula La
Greca, a corporate credit analyst at TPCG Valores in Buenos Aires,
said Clisa's decision to ask bondholders for leniency was logical
after it deferred a US$10.7-million interest payment on the notes
due January 25, the report says.
The company is asking for the consent of holders to make that
payment of 8.5 percent fully in the form of payment-in-kind
securities, rather than the previously agreed 6.25 percent in cash
and 2.25 percent payment-in-kind notes, the report discloses.
"It will probably have a very high participation rate near 100
percent," La Greca said, the report relays. "Basically, whoever
refuses to participate is left with neither bread nor cake," he
added.
Bondholders had until 5pm New York time to respond, and the company
needs approval from holders of at least 75 percent of outstanding
notes to change the terms, the report notes.
Rising Risks
Both S&P Global Ratings and Fitch Ratings last month warned that a
successful consent solicitation would lead Clisa into default, the
report relays. The company is scored CC at S&P and C at Fitch,
both deep into junk territory, the report says.
But a downgrade into default, even if quickly remedied with the
changed terms, could spiral into a larger problem, the report
discloses. Clisa owes holders of its 2027 bond another
US$12-million interest payment in July, according to data compiled
by Bloomberg, the report relays.
As of September, the company had readily available cash in hand of
ARS9.5 billion (US$11.4 million at the official exchange rate) and
short-term debt of ARS34.4 billion, according to Fitch, the report
notes.
Without a turnaround, another negotiation with bondholders may be
necessary, Fitch's Andres Correa said in an interview. Clisa has,
in the past, won approval from holders of more than 90 percent of
its bonds to alter its debt structure, the report discloses.
"The risk of another consent solicitation and a further
restructuring process is possible," said Correa. "That's what their
rating reflects," the report adds.
About CLISA
CLISA - Compania Latinoamericana de Infraestructura y Servicios
S.A. - is a leading manager and developer of infrastructure and
public services. The company is based in Argentina and is the
largest subsidiary of the Roggio Group (Roggio S.A). CLISA is
currently organized into four main business segments: waste
management, construction and toll road concessions, transportation
and water supply services. The company's main business is waste
management. Most of the company's projects are are concentrated
within the public sector.
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B R A Z I L
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CEMIG: Moody's Affirms 'Ba2' CFR, Outlook Stable
------------------------------------------------
Moody's Investors Service has affirmed the Ba2 corporate family
rating assigned to Companhia Energetica de Minas Gerais - CEMIG
(CEMIG) and the Ba2 issuer ratings assigned to its subsidiaries
Cemig Distribuicao S.A. (CEMIG D) and Cemig Geracao e Transmissao
S.A. (CEMIG GT). At the same time, Moody's affirmed ba2 Baseline
Credit Assessment (BCA) for CEMIG and assigned a ba2 BCA to each of
the subsidiaries. These decisions follow the release of Moody's
updated Government-Related Issuers (GRI) methodology on January 25,
2024. The outlooks on all ratings remain stable.
RATINGS RATIONALE
The rating actions follow the publication of the updated GRI
methodology. Moody's has expanded the scope of this methodology to
include certain key state-owned enterprises (SOEs) that are
indirectly owned by the government as GRIs, on the basis that: (i)
where Moody's considers the supporting government could exert a
very high level of control, either directly or through the rated
entity's parent, over the governance or financing of the rated
entity; and (ii) where Moody's considers the rated entity is
strategically important to the supporting government.
Both CEMIG D and CEMIG GT have met the criteria listed above. Given
the corporate guarantees and cross-default clauses embedded in the
various debt instruments across the corporate family, the credit
profiles of CEMIG D and CEMIG GT's, as reflected on their assigned
ba2 BCAs and Ba2 issuer ratings, are aligned to that of the
consolidated profile of its parent company, CEMIG. That results
from Moody's view of similar probability of default and expected
recovery rates for creditors within the group.
CEMIG's BCA of ba2 reflects its large scale and diverse electricity
operations to sustain strong credit metrics despite high interests
rates and inflationary challenges in Brazil. The ratings base case
considers that consolidated leverage metrics will remain robust for
the next three years, with the cash flow from operations (CFO)
pre-working capital (WC)/debt and interest coverage ratios staying
above 30% and 4.0x, respectively. The analysis also considers the
credit linkages with its controlling shareholder, the State of
Minas Gerais (B2, stable), and with the Government of Brazil (Ba2
stable), given the highly regulated nature of its businesses, the
exposure to local revenue and the reliance on domestic funding
sources.
Constraining CEMIG's the credit profile are: (i) the large
off-balance-sheet contingent obligations of BRL3.4 billion related
to non-controlled subsidiaries; (ii) the renewal risk of key hydro
power concessions expiring in 2026 and 2027; and, (iii) and the
large capital expenditure program in the range of BRL5 to 6 billion
per year, which will limit the pace of leverage reduction. Moody's
also notes the relatively high debt volumes coming due over the
next 12 months, constraining its liquidity profile.
CEMIG's Ba2 corporate family rating results from the application of
Moody's Joint Default Analysis (JDA) framework for
government-related issuers, which considers the following input
factors: a BCA of ba2 as measure of CEMIG standalone credit
worthiness; the B2 rating of the State of Minas Gerais as CEMIG's
support provider; Moody's estimate of moderate implied government
support in the case of financial distress; and a high default
dependence between CEMIG and the State of Minas Gerais. Moody's
acknowledges the much weaker credit quality of the state constrains
the company's ability to receive timely financial support, if
needed. Nonetheless, Moody's assume that some form of extraordinary
support from the state or indirectly from the central government
would be forthcoming in a stress scenario given the essential
nature of its regulated services.
The stable rating outlook reflects Moody's expectation that CEMIG
will maintain its robust credit metrics over the next 12-18 months,
as well as a prudent financial policy, such as holding a cash
balance in excess of its 12-month debt maturities and addressing
its significant refinancing needs ahead of the bonds' expiration in
December 2024.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
A ratings upgrade could be considered if the government's rating
improves and if CEMIG's CFO pre-WC/debt exceeds 22% and interest
coverage surpasses 4.5x for a consistent period. Conversely, a
downgrade could occur if there are increased liquidity or
refinancing risks, such as delays in addressing 2024 debt
maturities or a significant leverage increase. If CEMIG's
consolidated CFO pre-WC/debt falls below 13% and interest coverage
stays under 2.5x consistently, a downgrade could be considered.
Negative changes in the operating environment for Brazilian
electricity companies, due to political interference or unfavorable
regulatory changes, could also prompt a downgrade.
Based in Belo Horizonte, Minas Gerais, CEMIG is a top Brazilian
utility company with operations in electricity distribution,
generation, and transmission. It boasts a 5.5 GW installed capacity
and 7,960 km of transmission lines nationwide, including
approximately 2,960 km from its subsidiary, Taesa. The State of
Minas Gerais holds a controlling stake with 50.97% of the voting
capital, followed by FIA Dinamica (31.66%) and BNDESPAR (11.14%),
with other minority shareholders owning the remaining 6.23%. As of
September 2023, CEMIG reported Moody's-adjusted net revenue of
BRL36.1 billion and EBITDA of BRL8.1 billion.
LIST OF AFFECTED RATINGS
Issuer: Companhia Energetica de Minas Gerais - CEMIG
Affirmations:
Corporate Family Rating, Affirmed Ba2
Baseline Credit Assessment, Affirmed ba2
Outlook Actions:
Outlook, Remains Stable
Issuer: Cemig Distribuicao S.A.
Assignments:
Baseline Credit Assessment, Assigned ba2
Affirmations:
Issuer Rating, Affirmed Ba2
Outlook Actions:
Outlook, Remains Stable
Issuer: Cemig Geracao e Transmissao S.A.
Assignments:
Baseline Credit Assessment, Assigned ba2
Affirmations:
Issuer Rating, Affirmed Ba2
Outlook Actions:
Outlook, Remains Stable
The principal methodologies used in rating Companhia Energetica de
Minas Gerais - CEMIG and Cemig Distribuicao S.A. were Regulated
Electric and Gas Utilities published in June 2017.
GOL LINHAS: Accuses Latam of Attempting to Poach Pilots, Aircraft
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globalinsolvency.com, citing Bloomberg News, reports that bankrupt
Brazilian airline Gol Linhas Aereas Inteligentes SA accused its
rival Latam Airlines Group SA of taking advantage of its recent
financial trouble by trying to poach its pilots and Boeing
aircraft.
The Sao Paulo-based airline said in court papers filed that Latam
recently sent a letter to Gol's business partners inquiring about
leasing Boeing aircraft and solicited Brazilian pilots experienced
in flying such aircraft in an Internet job posting, according to
globalinsolvency.com.
Latam has historically flown a fleet of Airbus aircraft and the
Boeing models its competitor inquired about are a specific type of
narrow body aircraft Gol flies, the filing said, the report notes.
The Brazilian airline said Latam inquired about procuring Boeing
737 aircraft the day after Gol filed Chapter 11 on Jan. 25, while
its rival "is at its most vulnerable," the report relays.
Gol asked Judge Martin Glenn, who is overseeing the bankruptcy, for
permission to issue a subpoena for documents from Latam as it
investigates the scope of the alleged solicitations, the report
relays.
"Given the recent events in the industry, we thought you may be
interested in learning that LATAM group continues to seek
aircraft," Latam allegedly said in a letter sent to its business
partners on Jan. 26, the report says.
The letter, a copy of which is included in the court filing, goes
on to say that Latam's Brazilian affiliate is seeking to increase
its flights in the country and region, the report adds.
About Gol Linhas
GOL Linhas Aereas Inteligentes S.A. provides scheduled and
non-scheduled air transportation services for passengers and cargo;
and maintenance services for aircraft and components in Brazil and
internationally. The company offers Smiles, a frequent-flyer
program to approximately 20.5 million members, allowing clients to
accumulate and redeem miles. It operates a fleet of 146 Boeing 737
aircraft with 674 daily flights. The company was founded in 2000
and is headquartered in Sao Paulo, Brazil.
GOL Linhas Aereas Inteligentes S.A. and its affiliates and its
subsidiaries voluntarily filed for Chapter 11 protection (Bankr.
S.D.N.Y. Lead Case No. 24-10118) on Jan. 25, 2024.
GOL Linhas estimated $1 billion to $10 billion in assets as of the
bankruptcy filing.
The Debtors tapped Milbank LLP as counsel, Seabury Securities LLC
as restructuring advisor, financial advisor and investment banker,
Alixpartners, LLP, as financial advisor, and Hughes Hubbard & Reed
LLP as aviation related counsel. Kroll Restructuring
Administration LLC is the claims agent.
HAITONG BANCO DE INVESTIMENTO: S&P Alters Ratings Outlook to Neg.
-----------------------------------------------------------------
S&P Global Ratings revised the outlook on its long-term global and
national scale ratings on Haitong Banco de Investimento do Brasil
S.A. to negative from stable. At the same time, S&P affirmed the
'BB/B' long- and short-term foreign and local currency global scale
ratings and the 'brAAA/brA-1+' long- and short-term national scale
ratings.
On Feb. 9, 2024, S&P Global Ratings revised its rating outlook on
Haitong Bank S.A. to negative from stable following a similar
action on the bank's parent company, Haitong Securities Co. Ltd.,
given the group's recent warning of an expected profit loss for
2023.
S&P thinks Haitong Securities' weakening earnings power could
ultimately result in lower capacity to support Haitong Bank, a
strategically important subsidiary to the group, and consequently
Haitong Brasil as well.
S&P views Haitong Brasil as a core subsidiary of its parent, given
its significant revenue contribution, its strategic importance as
the hub for the group's Latin American operations, and the parent's
long-term commitment to the Brazilian operations.
The Brazilian entity is one of the largest contributors to the
group's operating revenues. Haitong Brasil is fully integrated with
its parent, and we think the rest of the group would support the
bank under any foreseeable circumstances.
PETROBRAS: Commits $100BB to Global Offshore Venture
----------------------------------------------------
Richard Mann at Rio Times Online reports that Brazil's Petroleo
Brasileiro S.A. or Petrobras plans a $100 billion investment in
offshore oil exploration and production, CEO Jean Paul Prates
announced.
As Latin America's leading oil firm, it targets global growth,
eyeing Europe, West Africa, and the Americas, according to Rio
Times Online.
This move aims to make Brazil a frontrunner in offshore wind
energy, aligning with the global pivot from fossil fuels, the
report notes.
Prates highlighted a careful approach to exploring new avenues
while securing oil sector presence, 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).
REDE D'OR SAO LUIZ: Fitch Affirms BB+ LongTerm IDR, Outlook Stable
------------------------------------------------------------------
Fitch Ratings has affirmed Rede D'Or Sao Luiz S.A.'s Long-Term
Foreign Currency Issuer Default Rating (IDR) at 'BB+', Long-Term
Local Currency IDR at 'BBB-' and National Long-Term Rating at
'AAA(bra)'. The Rating Outlook for the Long-Term Local Currency IDR
was revised to Negative from Stable, and Outlooks for the Long-Term
Foreign Currency and National Long-Term Rating remain Stable.
The Negative Outlook on the Long-Term Local Currency IDR reflects a
lower than expected deleveraging trend after investment peaks and
operating recovery post-pandemic. The high debt burden with
interest expenses, as well as high working capital requirements
following industry dynamics have further dented FCF generation.
Fitch forecasts Rede D'Or's net leverage ratio will remain above
rating triggers of 2.5x until 2025, per the agency's criteria.
The company's ratings reflect the defensive nature of its business,
solid competitive position in the fragmented hospital industry in
Brazil, strong portfolio of counterparties, track record of
adequate capital structure supported by a mix of internal cash
flow, debt and equity, and robust liquidity.
KEY RATING DRIVERS
Deleverage Taking Longer: Rede D'Or's ability and willingness to
effectively deleverage while managing aggressive business growth
are key rating considerations. Considerations also include the
company's ability to navigate a more challenging scenario in terms
of higher operating costs and competitive environment.
The company has indicated it has passed its peak of organic and
inorganic investments, which could alleviate pressure on free cash
flow generation in the next two years. Fitch projects Rede D'Or's
leverage ratio, per the agency's criteria, to reach 2.7x in 2023
and 2024 and 2.6x in 2025, without any extraordinary measure.
FCF to Remain Negative: The high debt burden and interest rates in
Brazil, as well as working capital requirements have pressured Rede
D'Or's operating cash flow generation. For 2023, Fitch estimates
that Rede D'Or will pay around BRL1.9 billion of interest expenses
(net of received interests) and consumed BRL2.4 billion in working
capital, per Fitch's criteria.
Fitch forecasts adjusted EBITDA (excluding IFRS-16) of around
BRL6.4 billion in 2023 to grow to BRL7.5 billion in 2024 and BRL8.5
billion in 2025. Fitch expects FCF to remain negative at around
BRL1 billion during 2023, BRL1.8 billion in 2024 and BRL1.1 billion
during 2025. Fitch's base case incorporates capex remaining
elevated at BRL2.8 billion and BRL3 billion during 2024 and 2025,
after BRL2.5 billion in 2023 and BRL2.3 billion in 2022, but no
major M&A activity.
Margins to Improve: Fitch expects Rede D'Or's consolidated adjusted
EBITDA margins to improve to around 13% and 14% in 2024 and 2025,
from 12.3% in 2023; the first year of consolidating Sul America's
results. The Hospital segment's operations are also expected to
improve, moving closer to 26% during 2024 and 2025, after achieving
24% and 25% during 2022 and 2023, per the agency's calculation.
The company's margins compare well with global peers. The company
has efficiently increased profitability through economies of scale
and synergies from acquisitions. However, operating performance has
been impacted by the pandemic, fewer high-complexity
hospitalizations, high inflation and interest rates, and pressure
from payors over the past two years. Fitch forecasts adjusted
EBITDA (adjusted by IFRS-16) of around BRL6.4 billion in 2023 to
grow to BRL7.3 billion in 2024 and BRL8.4 billion in 2025.
Leading Business Position: Rede D'Or is the largest private
hospital network in Brazil's fragmented and underserved hospital
industry. The company owns 73 hospitals, 11,512 total beds and
9,600 operating beds as of Sept. 30, 2023. Rede D'Or has a solid
business position and large scale of operations in its key markets,
which serves as a key competitive advantage, allowing for lower
fixed costs and significant bargaining power with counterparties
and the medical community.
The company's scale and strong brand act as strong barriers to
entry over the medium term. The healthcare industry has positive
long-term fundamentals, in light of the imbalance between supply
and demand for hospital services in Brazil and lack of good
healthcare service infrastructure in the public sector.
Withstanding a Challenging Industry: Industry consolidation and the
increasing vertical integration among competitors has increased
competition. Post-pandemic, increasing medical loss ratios within
healthcare operators, insurances, logistic supply issues within the
medical drugs and devices companies, have impacted all peers.
Business scale, strong brand and medical recognition are essential
competitive advantages that mitigate increasing pressure from
healthcare plan providers in terms of contracts pricing and working
capital management. Fitch believes Rede D'Or is well positioned to
face the ongoing developments in industry dynamics.
Country Ceiling Constrains: Rede D'Or's Long-Term Foreign Currency
IDR is constrained by Brazil's 'BB+' Country Ceiling because its
operations are domiciled in Brazil. The investment-grade Long-Term
Local Currency IDR reflects the resilience of Rede D'Or's business
to economic downturns, and the positive prospects over the longer
term, yet it is currently pressured by the company's aggressive
financial strategy.
Legal Contingencies: Rede D'Or is exposed to tax litigation that
could result in loss, as no provisions have been recorded. The most
significant, BRL1.1 billion, refers to allegations by the Federal
Revenue of Brazil (Brazil's federal taxation administrator) that
certain doctors who render services in Rede D'Or's hospitals
through legal entities should be considered company employees,
which would require additional tax payments. Negative outcomes from
this litigation could change the company's business model and
affect its cost dynamics. However, Fitch has not incorporated this
into its base case scenario at this time.
DERIVATION SUMMARY
Rede D'Or's ratings reflect Brazil's private hospital industry's
low business risk and its positive business fundamentals, adequate
capital structure and strong financial flexibility. Compared with
Auna S.A.A.(B+/Stable), Rede D'Or has stronger business scale,
capital structure and financial flexibility in terms of liquidity
and proven access to equity and credit markets. Rede D'Or compares
well in terms of business scale and operating margins with the
Brazilian non-for-profit hospital Sociedade Beneficente Israelita
Brasileira Hospital Albert Einstein (Einstein; AAA(bra)/Stable).
However, Einstein has a track record of lower leverage.
Compared with the Brazilian diagnostic and hospital competitor,
Diagnostico da America S.A (Dasa; AAA(bra)/Negative), Rede D'Or has
lower business risk, due to much lower competitive pressures. Both
companies have aggressive growth strategies. From a financial risk
perspective, Rede D'Or has lower leverage and greater financial
flexibility following the IPO.
Rede D'Or, Auna, Einstein and Dasa all benefit from strong brands
and reputation in the industry, which offer important competitive
advantages and translate to strong relationships with
counterparties. On a global scale, the dynamics of the Brazilian
hospital industry and regulation are not directly comparable with
other countries. Rede D'Or's operating margins and financial
metrics are quite sound compared with other rated hospitals within
Fitch's global universe.
Rede D'Or's Long-Term Foreign Currency IDR is constrained by
Brazil's 'BB+' Country Ceiling since its operations are domiciled
in Brazil. The investment-grade Long-Term Local Currency IDR
reflects the resilience of Rede D'Or's business to economic
downturns, and the positive prospects over the longer term.
KEY ASSUMPTIONS
- Revenue growth reflecting ongoing acquisitions and
greenfield/brownfields projects, with addition of around 400
operating beds during 2024 and around 1,000 during 2025;
- Volume of daily-patients of 2.8 million in 2024 and 3.0 million
in 2025;
- Average hospital ticket (excluding oncology) at BRL9,8 thousand
in 2024 and BRL10,5 thousand in 2025;
- Hospital beds occupancy rate around 79,5% in 2024-2025;
- Hospital EBITDA margins around 26% in 2024-2025;
- SulAmerica's medical loss ratio (MLR) around 85%-86% in
2024-2025;
- Capex at BRL2.8 billion in 2024 and BRL3 billion in 2025;
- A 25% minimum dividend payout.
RATING SENSITIVITIES
Factors that could, individually or collectively, lead to positive
rating action/upgrade:
- Positive rating action for the Long-Term Foreign Currency IDR is
limited by Brazil's 'BB+' Country ceiling;
- Upward rating potential for Rede D'Or's 'BBB-' Long-Term Local
Currency IDR is unlikely in the medium-term given the company's
ongoing aggressive growth strategy, through both organic and M&A
movements, and its lack of geographic diversification, which leads
to large exposure to the local economy in Brazil.
- A revision of the Outlook for the Local Currency IDR to Stable
from Negative could occur if Fitch's forecasts indicates net
leverage below 2.5x by 2025, due to strong than expected operating
results, lower capex level and/or combination of non-core asset
sales.
Factors that could, individually or collectively, lead to negative
rating action/downgrade:
- A change in management's strategy with regard to its conservative
capital structure could also lead to a downgrade, as could a
deterioration in the company's reputation and market position;
- Hospital operation EBITDA margin declining to below 22%;
- Total leverage consistently above 4.0x and net leverage
consistently above 2.5x by 2025;
- Deterioration of a sound liquidity position leading to
refinancing risk exposure;
- Major legal contingencies that represent a disruption in the
company's operations or a significant impact to its credit
profile.
LIQUIDITY AND DEBT STRUCTURE
Robust Liquidity: Rede D'Or has a track record of maintaining
strong cash balances, while it navigates its aggressive growth
strategy. The company had BRL33.9 billion of debt (net of
derivatives and obligations with acquisitions) as of Sept. 30,
2023, of which BRL2.7 billion is due in the short term. Rede D'Or's
BRL17.5 billion of cash (net of technical provision) is sufficient
to support debt amortization at least 2028.
Around 27% of Rede D'Or debt as of Sept. 30, 2023 was linked to the
U.S. dollar, including BRL4.8 billion senior unsecured notes due
2028-2030. The company utilizes hedging instruments to moderate
currency mismatch risks, since revenues are nearly 100% originated
in Brazil. Rede D'Or does not have committed credit facilities.
The company's financial flexibility is solid, and the company has
shown good access to local and cross-border capital markets. Fitch
expects Rede D'Or will maintain a strong liquidity position and
proactive approach in liability management to avoid exposure to
refinancing risks.
As of Sept. 30, 2023, Rede D'Or reported BRL2.6 billion of local
debentures related to the former SulAmerica. At the same period,
total technical provision was BRL15.8 billion, with private pension
reserves of BRL10.6 billion.
ISSUER PROFILE
Rede D'Or Sao Luiz S.A. is the largest private hospital player in
Brazil, with 73 hospitals totalling 9.6 thousand operational beds
and the country's largest integrated cancer treatment network as of
Sept. 30, 2023.
ESG CONSIDERATIONS
Rede D'Or Sao Luiz S.A. has an ESG Relevance Score of '4' for Labor
Relations & Practices due to labor/tax litigation. The company
registers their employees (mostly physicians) as service providers,
not as Rede D'Or's employees. This has a negative impact on the
credit profile, and is relevant to the ratings in conjunction with
other factors.
The highest level of ESG credit relevance is a score of '3', unless
otherwise disclosed in this section. A score of '3' means ESG
issues are credit-neutral or have only a minimal credit impact on
the entity, either due to their nature or the way in which they are
being managed by the entity. Fitch's ESG Relevance Scores are not
inputs in the rating process; they are an observation on the
relevance and materiality of ESG factors in the rating decision.
Entity/Debt Rating Prior
----------- ------ -----
Rede D'Or Finance
S.a. r.l.
senior unsecured LT BB+ Affirmed BB+
Rede D'Or Sao
Luiz S.A. LT IDR BB+ Affirmed BB+
LC LT IDR BBB- Affirmed BBB-
Natl LT AAA(bra)Affirmed AAA(bra)
senior unsecured Natl LT AAA(bra)Affirmed AAA(bra)
=========
C H I L E
=========
CHILE: IMF Says Inflation Projected to Converge to 3% Target
------------------------------------------------------------
The Executive Board of the International Monetary Fund (IMF)
concluded on February 5, 2024, the Article IV consultation [1] with
Chile.
Macroeconomic imbalances built during the pandemic have been
largely resolved, supported by tighter macroeconomic policies
deployed during late 2021-22. As domestic demand normalized,
economic activity stabilized in the second half of 2023, yielding
an estimated zero percent real GDP growth for the year. Inflation
and current account deficits have significantly declined in 2023.
The financial sector remains resilient despite the economic
slowdown and tight financial conditions.
Growth is expected to pick up to close to 2 percent in 2024 and
2-2.5 percent in the medium term. Inflation is projected to
converge to the 3-percent target in 2024. Key external risks are
the uncertainties around the potentially higher-for-longer interest
rates in advanced economies, a growth slowdown in major trading
partners, and the intensification of regional conflicts in the
world. Domestically, political polarization and fragmentation could
lead to continued reform gridlock. Social discontent over
inequality and the security situation remains prevalent.
Uncertainty related to the solvency of private health insurance
companies is also a concern. On the upside, the closure of the
constitutional reform process is set to reduce near- and
medium-term domestic uncertainty. Moreover, Chile can benefit from
the global green transition given its rich endowment with copper,
lithium, and renewable energy for which demand is set to rise.
Policies have supported macroeconomic stability. In the context of
disinflation acceleration, the Central Bank of Chile lowered the
monetary policy rate by 400 basis points since July 2023. The
headline fiscal balance is estimated to decline to about -2.5
percent of GDP in 2023 due to weaker tax revenues amid an economic
slowdown, lower copper prices, and other transitory factors. The
2024 budget envisions a moderate deficit reduction within a
medium-term fiscal plan to a broadly balanced fiscal position by
2026. The ongoing implementation of the countercyclical capital
buffer will strengthen financial resilience in periods of stress.
Executive Board Assessment
Executive Directors expressed condolences about the tragic loss of
life and devastation caused by the massive forest fires. Directors
welcomed the authorities' very strong policies and policy
frameworks, supported by the precautionary FCL arrangement, which
were instrumental in resolving imbalances and steering the economy
toward potential growth and targeted inflation in a challenging
external environment. They commended the authorities' reform plans
to raise investment and productivity, increase fiscal revenues for
priority spending, reduce inequality, improve pension adequacy, and
transition to a greener economy.
Directors welcomed the authorities' commitment to reach a broadly
balanced fiscal position by 2026 and keep debt below the prudent
debt ceiling of 45 percent of GDP. They welcomed the proposed
reforms to strengthen tax compliance and enhance spending
efficiency, and stressed that additional measures will be needed to
achieve the authorities' medium‑term fiscal plan and finance
social needs and security priorities. Directors noted the improved
pension adequacy for low‑income pensioners following the higher
minimum pension and emphasized that raising pension contribution
rates is critical to ensure the adequacy of self‑financed
pensions and the sustainability of the pension system. They also
encouraged the authorities to continue to refine further their
already strong fiscal framework.
Directors commended the central bank's robust policies that led to
a decisive decline in inflation toward its target, emphasizing that
the pace of further monetary easing should remain data dependent.
They stressed that the flexible exchange rate remains paramount for
absorbing shocks and called for resuming the international reserve
accumulation, when market conditions are conducive, and developing
a long‑term reserve strategy to further strengthen resilience
against external shocks, while a few called for an earlier
resumption of the accumulation strategy.
Directors agreed that the financial sector remains resilient. They
welcomed the ongoing implementation of Basel III capital and
liquidity requirements, the activation of the countercyclical
buffer, and efforts to establish an industry‑funded deposit
insurance and a new bank resolution framework, while calling for
continued monitoring of the vulnerabilities in construction and
real estate sectors. Directors stressed the importance of
continuing to adapt financial regulation and supervision to the
changing financial sector landscape.
Directors supported the authorities' reform plans for a more
dynamic, greener, and inclusive economy. They underscored the need
to foster investment and welcomed the efforts to streamline
permitting processes. Directors commended Chile's progress and
ambitions in developing renewable energy. They noted that the
higher global demand for lithium and other critical minerals offers
new economic opportunities for Chile and stressed the importance of
swiftly implementing a clear and balanced institutional framework.
Directors welcomed the improvements in gender equality and
encouraged additional efforts to further narrow labor market gender
gaps.
ENJOY SA: Fitch Lowers LongTerm Foreign Currency IDR to 'D'
-----------------------------------------------------------
Fitch Ratings has downgraded Enjoy S.A.'s ratings as follows:
- Long-Term Foreign-Currency Issuer Default Rating (IDR) to 'D'
from 'CCC+';
- USD209 million tranche A notes due in 2027 to 'C'/'RR4' from
'B-'/'RR3';
- USD18 million tranche B notes due in 2027 to 'C'/'RR6' from
'CCC-'/'RR6'.
The downgrades follow Enjoy's announcement that it is entering
judicial reorganization under Chilean Law 20.720, due to the
company's EBITDA recovery not meeting projections. Together with
significant liquidity constraint due to a tighter financial market,
this has led to a heavy financial burden for the company. The
process will likely result in material changes in the terms and
conditions of Enjoy's debt.
A 'D' rating indicates that an issuer has entered into bankruptcy
filings, administration, receivership, liquidation or other formal
winding-up procedure, or has otherwise ceased business and debt is
still outstanding.
KEY RATING DRIVERS
Announcement of Debt Restructuring: Enjoy announced on Jan. 29,
2024 that it had filed for judicial reorganization and bankruptcy
protection from its creditors in light of the significant liquidity
constraint faced by the company and its inability to increase its
cash flow generation to meet commitments.
Company to Miss Interest Payments on Bond: Following the judicial
reorganization filing, the company will miss the payment on its
international bond, due on Feb. 14. Enjoy intends to preserve its
limited liquidity to maintain operation of its casinos, and to
fulfil financial obligations, which are not included in the
judicial reorganization. These include the license payments to
municipalities for the operation of its casinos.
Committed Capex: Enjoy has committed capex related to municipal
licenses of approximately CLP8 billion between 2023 and 2025. The
company's current financial condition does not allow it to fully
execute the required investments, which could jeopardize newly
renewed licenses. Part of the intention of the judicial
reorganization is to secure funding to finance key investments to
improve the profitability of the company's assets.
Difficult Cash Flow Recovery: Fitch expects Enjoy's cash flow
improvement to be slow, considering the challenging macroeconomic
scenario in Chile, with low GDP growth in 2024. In addition,
despite revenues improvements in recent quarters, higher costs
associated with renewing operating licenses will result in somewhat
volatile cash flow generation. As of September 2023 LTM, Enjoy's
EBTIDA was negative, and Fitch expects FY figures will end up
neutral to positive. Results for 2024 will depend on the company's
ability to improve its costs structure.
Recovery Analysis Assumptions: The 'RR4' Recovery Rating reflects
average recovery prospects in the event of default. The recovery
analysis for the bond assumes that the value would be assessed
under a going concern approach of its performing asset in Punta del
Este, which serve as collateral for the issuance. Fitch assumed a
10% administrative claim. The waterfall results in a 31%-50%
recovery, corresponding to 'RR4' recovery, for the USD209 million
notes, tranche A, and 0% recovery, corresponding to 'RR6' for the
USD18 million notes tranche B.
DERIVATION SUMMARY
The rating has been downgraded to 'D' as the company has entered
judicial reorganization.
Enjoy has lower profit margins than much larger operators, such as
MGM Resorts International (NR) and Las Vegas Sands Corp
(BB+/Positive). Enjoy's business was disrupted by the pandemic as
casinos were prohibited to operate and the company has not been
able to recover its cash flow generation to pre-pandemic levels,
due to higher cost structure once restrictions were lifted.
Enjoy owns most of its underlying real estate, with the exception
of Vina del Mar, San Antonio and Los Angeles. This portfolio may
provide some financial flexibility, either as collateral or asset
sales.
RATING SENSITIVITIES
Factors that Could, Individually or Collectively, Lead to Positive
Rating Action/Upgrade:
- Positive rating action will occur when the proposed debt
restructuring process is announced and executed.
Factors that Could, Individually or Collectively, Lead to Negative
Rating Action/Downgrade:
- As the company is rated 'D' there can be no negative rating
action for the IDR.
LIQUIDITY AND DEBT STRUCTURE
Planned Default: The company has enough liquidity to continue its
operations in the current state for about three months, considering
it ceases payments of its financial obligations. Its next financial
obligation is the payment of interest on the international and
local bonds in February. The company does not intend to meet these
obligations to preserve liquidity.
ISSUER PROFILE
Enjoy operates a total of ten casinos; nine in Chile and one in
Uruguay. Enjoy is a leader in the Chilean gaming and entertainment
industry. It offers a complete portfolio of recreational services
that include not only casinos, but also hotels, restaurants, spas
and discotheques.
ESG CONSIDERATIONS
Enjoy has an ESG Relevance Score of '4' for Management Strategy due
to its record of recurring to debt restructuring processes during
2020 due to challenges the company has faced in executing its
strategy, meeting its projections and reducing its leverage.
Enjoy's below-average execution of its strategy has contributed to
a materially weaker operational performance and capital structure
in comparison with its peers. This has a negative impact on the
credit profile and is relevant to the rating in conjunction with
other factors.
The highest level of ESG credit relevance is a score of '3', unless
otherwise disclosed in this section. A score of '3' means ESG
issues are credit-neutral or have only a minimal credit impact on
the entity, either due to their nature or the way in which they are
being managed by the entity. Fitch's ESG Relevance Scores are not
inputs in the rating process; they are an observation on the
relevance and materiality of ESG factors in the rating decision.
Entity/Debt Rating Recovery Prior
----------- ------ -------- -----
Enjoy S.A. LT IDR D Downgrade CCC+
senior secured LT C Downgrade RR6 CCC-
senior secured LT C Downgrade RR4 B-
SEGUROS DE VIDA: S&P Affirms 'BB+' LongTerm Fin. Strength Rating
----------------------------------------------------------------
S&P Global Ratings affirmed its 'BB+' long-term financial strength
rating on Seguros de Vida Suramericana S.A. and its 'BB+' long-term
issuer credit and financial strength ratings on Seguros Generales
Suramericana S.A. The outlooks remain negative.
Impact of Revised Capital Model Criteria
Applying the revised capital model criteria did not materially
affect our capital metrics for the Suramericana group and its
Colombia-based insurance subsidiaries, Seguros de Vida Suramericana
(Sura Vida) and Seguros Generales Suramericana (Sura Generales).
Thus, S&P affirmed its ratings on the core subsidiaries.
Nevertheless, the capital adequacy of the Suramericana group and
its two subsidiaries improved somewhat following the implementation
of our revised model, mainly thanks to higher risk-diversification
benefits, which we capture more explicitly in our analysis. In
addition, S&P's new model uses lower credit-risk charges on
fixed-income securities, which represents the large majority of the
companies' investment portfolios.
Therefore, the companies' capital adequacy remains fair, but it's
now more comfortably within that category.
===============
P A R A G U A Y
===============
TELECEL: Fitch Affirms 'BB+' LongTerm IDR, Outlook Stable
---------------------------------------------------------
Fitch Ratings has affirmed the Long-Term Foreign Currency (FC)
Issuer Default Rating (IDR) of Telefonica Celular del Paraguay
S.A.E. (Telecel) at 'BB+' with a Stable Rating Outlook. Fitch has
also affirmed Telecel's senior unsecured notes due 2027 at 'BB+'.
Telefonica Celular del Paraguay S.A.E.'s (Telecel) ratings reflect
its leading market positions in Paraguay, supported by an extensive
network, distribution coverage and brand recognition of Tigo.
Telecel's competitive strengths enable strong FCF generation and
high margins, resulting in a solid financial profile. Telecel's FC
IDR is limited by the relatively weak operating environment of
Paraguay.
The ratings reflect the linkage between the company and its parent,
Millicom International Cellular S.A. (BB+/Stable), given Millicom's
full control of Telecel through its 100% ownership stake.
KEY RATING DRIVERS
FCF Driving Deleveraging: Fitch projects cash flow from operations
to remain solid at around PYG1.0 trillion annually over the medium
term, comfortably covering Fitch's estimated annual capex of around
PYG800 billion in 2023 and PYG700 billion from 2024-2026, resulting
in solid FCF. Historically, dividends have been high; however, the
company does not expect Telecel to pay dividends to Millicom until
2026 after the company achieves leverage around 2.0x. Fitch expects
Telecel to continue to improve its solid financial profile over the
medium term, backed by a strong operational cash flow generation
and cost reduction initiatives. The company's net leverage should
fall to below 3.0x in 2024 and trend toward 2.0x over the medium
term, which is similar to the leverage profile of Millicom.
Solid Market Position: Telecel is the leading mobile operator in
Paraguay, with a mobile market share around 55%. The company has an
entrenched position with the most extensive network in Paraguay.
Fitch believes Telecel's market leadership will remain intact,
supported by market-leading networks in mobile and fixed-line, deep
sales network and strong brand recognition. While competition has
intensified in the broadband internet services business in recent
years, investments to modernize and expand its network should allow
Telecel to maintain its leading position in the market.
Profitability Improving: Fitch expects Telecel's EBITDA margins to
be pressured in 2023 and 2024 resulting from upfront costs from
cost-saving initiatives. EBITDA margins are expected to be around
32% and 34% in 2023 and 2024, respectively, compared with 35% in
2022. Fitch expects margins to improve to and stabilize around 36%
by 2025 supported by lower fixed costs and modestly improving
ARPUs. Telecel historically has maintained EBITDA margins higher
than its regional telecom peers given the company's leading
position in the country and network investments.
Weak Operating Environment: Telecel's ratings are limited by a
relatively weak operating environment in Paraguay, as reflected by
a low sovereign rating, weak governance indicators, a shallow local
capital market, and vulnerability to high macroeconomic
volatility.
Parent-Subsidiary Relationship: A parent-subsidiary relationship
exists as Millicom holds a controlling 100% share in Telecel.
Millicom is a holding company that relies solely on upstream
cashflows from its subsidiaries, which exposes Telcel to
shareholder distributions that could pressure its FCF generation.
Telecel's SCP is viewed by Fitch as the same as Millicom, therefore
the rating is equalized with Millicom's.
DERIVATION SUMMARY
Telecel is well-positioned relative to telecom peers in the 'BB'
category, based on high profitability, low leverage and a leading
mobile market position, backed by solid network competitiveness and
strong brand recognition. Telecel boasts a strong financial profile
with high profitability and low leverage for the rating level,
compared with regional telecom peers in the same rating category.
The company's credit profile is in line with Colombia
Telecomunicaciones S.A. E.S.P. (BBB-/Negative), an integrated
telecom operator in Colombia. Telecel's credit profile is stronger
than those of Axtel, S.A.B. de C.V. (BB-/Stable) and VTR Finance
N.V. (CCC-), given their lack of service diversification and weaker
financial profiles. Telecel's credit profile is weaker than Empresa
de Telecomunicaciones de Bogota (BB+/Stable), while Telecel has a
stronger market position with greater service and geographic
diversification.
Telecel's relatively weak geographic diversification, as well as
its historically high shareholder return, temper the credit.
Parent/subsidiary linkage is applicable, given Millicom's strong
influence over Telecel's operations.
KEY ASSUMPTIONS
- Subscriber and revenue generating unit growth less than 1%;
- ARPUs modestly improving;
- B2B business growing double the speed to B2C mainly through
digital business;
- EBITDA margins reduce to 32% in 2023 and stabilize around 36% by
2025;
- Capital intensity around 18% in 2023 and reduced to 15% from
2024-2026;
- Operating expenses around 34% of revenues by 2025;
--No dividends until 2026, VCFs around PYG230 billion per year;
- Net leverage approaching 2.0x by 2025.
RATING SENSITIVITIES
Factors that Could, Individually or Collectively, Lead to Positive
Rating Action/Upgrade
- An upgrade of Millicom, Telecel's controlling shareholder, would
have positive rating implications.
Factors that Could, Individually or Collectively, Lead to Negative
Rating Action/Downgrade
- A multi-notch downgrade of Paraguay's sovereign rating or Country
Ceiling could lead to a downgrade of Telecel's Foreign Currency
IDR;
- A negative rating action on Millicom due to net leverage
exceeding 3.5x on a consolidated basis or 4.5x on a holding company
debt/dividend received basis.
LIQUIDITY AND DEBT STRUCTURE
Adequate Liquidity: Telecel's liquidity position is adequate,
supported by its readily available cash balance, conservative
leverage and solid FCF generation. Cash upstreams to parent
Millicom temper financial flexibility somewhat, but no dividends
are expected until 2026. Telecel does send around PYG250 billion of
value-creating fees (VCFs) to Millicom annually. The company held a
cash balance of PYG622 billion against short-term debt of PYG225
billion as of Sept. 30, 2023. The company's total debt, as of Sept.
30, 2023, was PYG4,900 billion, which consists mainly of a USD503
million (approximately PYG3,700 billion) senior unsecured bond due
2027 and local currency unsecured bank debt.
ISSUER PROFILE
Telecel is the largest telecom operator in Paraguay, providing
mobile, fixed broadband, pay-TV, and mobile financial services
(MFS), operating under the Tigo brand. The company has established
itself as the leading player in each of its service categories.
ESG CONSIDERATIONS
The highest level of ESG credit relevance is a score of '3', unless
otherwise disclosed in this section. A score of '3' means ESG
issues are credit-neutral or have only a minimal credit impact on
the entity, either due to their nature or the way in which they are
being managed by the entity. Fitch's ESG Relevance Scores are not
inputs in the rating process; they are an observation on the
relevance and materiality of ESG factors in the rating decision.
Entity/Debt Rating Prior
----------- ------ -----
Telefonica Celular
del Paraguay S.A.E. LT IDR BB+ Affirmed BB+
senior unsecured LT BB+ Affirmed BB+
=======
P E R U
=======
PETROLEOS DEL PERU: Fitch Lowers LongTerm IDR to 'B+', Outlook Neg.
-------------------------------------------------------------------
Fitch Ratings has downgraded Petroleos del Peru - Petroperu S.A.'s
(Petroperu) Long-Term Foreign and Local Currency Issuer Default
Ratings (IDRs) to 'B+' from 'BB+'. Fitch has also downgraded the
rating of Petroperu's senior unsecured notes to 'B+' from 'BB+'.
The standalone credit profile (SCP) remains at 'ccc-'. The Rating
Outlook remains Negative.
The multiple notch downgrade reflects the change in the
government-related entity (GRE) assessment score from 32.5 to 25,
as a result of the Precedent of Support factor reassessment to Not
Applicable from Strong. Per Fitch's Government-Related Entities
Rating Criteria, Petroperu is now rated on a bottom-ups +5 basis
compared to the previous TD-3, due to the lowering of the GRE
assessment score coupled with the 10-notch rating differential
between the sovereign rating and the SCP. The reassessment was
triggered by Peru's (BBB/Negative) government explicit announcement
that it will not support Petroperu in a manner that is sufficient
to modify the company's weak capital structure. The Negative
Outlook is aligned with that of the sovereign and further reflects
concerns pertaining to the company's weak liquidity profile and
capital needs in the next year.
KEY RATING DRIVERS
Government-Related Entity: Petroperu's ratings are linked with the
sovereign's through Fitch's GRE criteria. The company is rated on a
bottom-ups +5 basis due to a GRE assessment score of 25- category
D. These factors, coupled with a 10-notch differential between the
SCP and the sovereign rating, resulted in a 'B+' rating.
The GRE criteria covers four factors. 1) Decision Making and
Oversight, which was rated 'Strong.' Petroperu is 100% owned by the
Peruvian government, through the Ministry of Energy and Mines (60%)
and the Ministry of Economy and Finance (40%), with robust and
frequent oversight; 2) Precedents of Support, assessed as Not
Applicable, which reflects how the government's record of
assistance has only addressed immediate needs for the continuation
of the company's operations, but not for the long-term improvement
of capital structure; 3) Preservation of Provision of Public
Service or Sovereignty or Strategic Assets, deemed Strong as a
Petroperu default would have a direct material impact on national
access to fuels; 4) Contagion Risk, rated as 'Strong' as Petroperu
is high profile for its government, given its role and status; its
default is likely to disrupt access to (or cost of) financing for
the government or its other GREs.
Additional Government Support is Needed: Fitch does not expect the
national government will support Petroperu in a way that is
meaningful to its capital structural in the near term. In 2022,
support was provided to address Petroperu's immediate liquidity
needs, but none of these measures alleviated the structural issue
of high indebtedness. Operational issues with the timing of the
Talara Refinery and the cash demands of the ramp-up resulted in
further cash needs for 2024, that the government will need to fund.
However, the message thus far has been unclear with a request of
USD2.5 billion by Petroperu followed by a non-committal government
response.
Fitch believes that further support is needed, as high debt levels
persist in an environment of compressing refining margins. Elevated
leverage, which is deemed unsustainable, was not fully addressed as
debt repayment is not expected with the funds provided, and the
support from the government has been coming when the company faces
severe liquidity constrains and needs imminent support.
High Leverage: Petroperu's projected gross debt/EBITDA for 2023 is
estimated to be negative. Fitch estimates Petroperu will maintain
structural debt averaging USD5.7 billion during at least the next
two years. Absent government measures for debt repayment, gross
leverage is projected to be 8.8x in 2024 before falling to around
7.0x during 2026 as the production of the Talara Refinery reaches
favorable commercial and financially viable operations. The ramp-up
proved costly, demanding a high volume of crude which, due to
global market conditions, was imported at high prices impacting the
company's already weak liquidity and leverage.
Operational Cash Flow Volatility: Petroperu's cash flow generation
is sensitive to changes in oil prices. Since Peru is a net importer
of crude, elevated oil prices result in a compression of its profit
margins. Petroperu's cash flow volatility experienced in 2021 and
2022 continued into 2023. The completion of the Talara Refinery
should lower capex for the company past 2023, and will also
increase operational efficiency. Predictable crack spreads should
translate into stronger EBITDA margins over the rating horizon, but
favorable operational metrics will be insufficient to drastically
improve credit metrics given the heavy financial burden accumulated
by Petroperu in the last two years.
DERIVATION SUMMARY
Petroperu's rating linkage to the Peruvian sovereign rating is in
line with the linkage present for most national oil and gas
companies (NOCs) in the region, including Empresa Nacional de
Petroleo (ENAP; A-/Stable), YPF S.A. (CCC-), Ecopetrol S.A.
(BB+/Stable) and Petroleo Brasileiro S.A. (Petrobras; BB/Stable).
In Latin America most NOCs are of significant strategic importance
for energy supply to their countries, and a default could have
potentially negative social and financial implications at a
national level. Like its peers, Petroperu has legal ties to the
government, through its majority ownership and strong operational
control.
KEY ASSUMPTIONS
- Fitch's Brent oil price at USD82 per barrel (bbl) in 2023,
USD80/bbl in 2024, USD70/bbl in 2025, and long-term prices at
USD60/bbl;
- Domestic sales of 74 kbbl/d in 2023, 93 kbbl/d in 2024, and 115
kbbl/d long term;
- Talara Refinery achieving commercial production in 2024,
achieving crack spreads of USD10 per barrel in 2024, USD12 in 2025,
and USD15 long term;
- Roll over of short-term working capital facilities;
- Average capex of USD290 million per year through the rating
horizon.
RATING SENSITIVITIES
Factors that could, individually or collectively, lead to positive
rating action/upgrade:
- A positive rating action of the Peruvian sovereign could lead to
a positive rating action on Petroperu;
- An upgrade can be considered if the government makes a capital
injection that improves the company credit profile, capitalizes its
loans, and/or guarantees a greater portion of Petroperu's debt to
materially improve leverage metrics.
Factors that could, individually or collectively, lead to negative
rating action/downgrade:
- A downgrade of Peru's sovereign rating;
- A sustained deterioration of Petroperu's financial flexibility,
combined with government inaction to support the company's
liquidity, potentially resulting from continued negative FCF or a
material reduction of cash on hand, credit facilities and
restricted capital markets access.
LIQUIDITY AND DEBT STRUCTURE
Deteriorated Liquidity: As of November 2023, Petroperu reported
USD55 million in cash on hand, compared with the USD89 million
registered in December 2022, and USD71 million at the end of 3Q23.
At December 2023, the company has revolving credit lines for up to
USD3.5 billion, out of which USD865 is currently unavailable and
under evaluation by different banks due to ESG concerns and USD410
million are under review. Out of bank lines, USD 1.1 billion are
utilized, leaving availability of USD250 million.
ISSUER PROFILE
Petroleos del Peru S.A. (Petroperu) is a Peruvian state-owned
petroleum company under private law and dedicated to oil
production, transportation, refining, distribution and marketing of
fuels and other petroleum-derived products. Refineries are located
at Talara, Iquitos and Conchan.
ESG CONSIDERATIONS
Petroleos del Peru - Petroperu S.A. has an ESG Relevance Score of
'4' for Management Strategy 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 rating[s] in
conjunction with other factors.
Petroleos del Peru - Petroperu S.A. has an ESG Relevance Score of
'4' for Group 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 rating[s] in
conjunction with other factors.
Petroleos del Peru - Petroperu 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 rating[s] in
conjunction with other factors.
Petroleos del Peru - Petroperu S.A. has an ESG Relevance Score of
'4' for Financial Transparency due to a history of delayed delivery
of audited financial statements, which has a negative impact on the
credit profile, and is relevant to the rating[s] in conjunction
with other factors.
The highest level of ESG credit relevance is a score of '3', unless
otherwise disclosed in this section. A score of '3' means ESG
issues are credit-neutral or have only a minimal credit impact on
the entity, either due to their nature or the way in which they are
being managed by the entity. Fitch's ESG Relevance Scores are not
inputs in the rating process; they are an observation on the
relevance and materiality of ESG factors in the rating decision.
Entity/Debt Rating Prior
----------- ------ -----
Petroleos del Peru –
Petroperu S.A. LT IDR B+ Downgrade BB+
LC LT IDR B+ Downgrade BB+
senior unsecured LT B+ Downgrade BB+
=====================================
T R I N I D A D A N D T O B A G O
=====================================
TRINIDAD CEMENT: Ministry 'Reviewing' Cement Price Increase
-----------------------------------------------------------
Joel Julien at Trinidad Express reports that two months after
Trinidad Cement Ltd, the country's lone cement manufacturer,
received a lifeline when the Government made it more difficult for
competitors to enter the market this year, news has emerged from
TCL that it intends to increase its cement prices.
Trade and Industry Minister Paula Gopee-Scoon, however, says the
ministry is "closely reviewing" the situation at this time,
according to Trinidad Express. And president of the Trinidad and
Tobago Contractors Association (TTCA) Glenn Mahabirsingh believes
that competition in the market may be the key to address the issue,
the report notes.
According to TCL, "due to the continuous inflation that affects our
industry and other economic sectors", it became necessary for them
to adjust the price of cement by $3 per sack from February 19, the
report relays.
"This decision is unavoidable in order to cope with the escalating
costs of natural gas, raw materials, spare parts, and other
essential inputs, which have risen significantly in the past year,
the report discloses. We have continued to invest in enhancing our
efficiencies, upgrading our technology, and optimizing our
processes to minimize the environmental impact of our operations,"
TCL stated, the report says.
"However, these actions are insufficient to mitigate the negative
effect of inflation on our business. Despite this price
adjustment, Trinidad & Tobago still retains the most competitive
price of cement in the Caricom region," it stated, the report
relates.
TCL stated that it appreciated the support and loyalty of its
valued customers and remains fully committed to delivering the best
quality cement and to creating value for Trinidad and Tobago in
many aspects, the report notes.
Preserving the Environment
"These include the generation of foreign exchange through our
exports, providing direct and indirect employment, and working
towards preserving the environment, the report notes.
Sustainability is one of our strategic initiatives and we have
developed several programs for waste management that aim to utilize
our cement kilns to reduce the amount of waste that goes to
landfills, generate alternative fuels for our production, and
reduce our carbon footprint," it stated, the report relays.
This is not the first time that TCL has increased the price of its
cement recently, the report discloses.
In fact, this increase in the cement price will be the fourth one
in the last 26 months, Mahabirsingh said, the report notes.
TCL increased prices most recently in March 2023.
This followed increases in December 2021 and August 2022,
Mahabirsingh said, the report says.
Mahabirsingh said the latest price increase equates to an average
increase of around 7% on cement products, the report discloses.
"We at the TTCA view this increase as sudden and surprising and we
are of the view that this is not the correct time for a price
increase given the importance of cement to the construction
sector," he said, the report relays.
"This increase in price would put further inflationary pressures on
the construction sector given that cement is an essential material
that is used for all concrete-related items in construction,"
Mahabirsingh said, the report says.
Mahabirsingh said that cement is too essential to the construction
industry to have these rapid price increases, the report relays.
And one way of protecting the industry from this, he said, is
competition, the report discloses.
"Competition is important to ensure that you get efficiency and you
maintain prices, so maybe competition is required in the cement
market," he added.
"Competition drives efficiency and innovation," Mahabirsingh said.
The report notes that Mahabirsingh said given that construction is
meant to stimulate the economy, he hopes the necessary authorities
would consider possible strategies to deal with the issue.
According to Mahabirsingh, the average 600-square-foot home uses
around 200 sacks of cement, and the new price would increase that
cost by around $800, the report relays.
As the size of the construction increases, so too will the
expenditure, Mahabirsingh said, the report notes.
In its latest published financial results for the period ended
September 30, 2023, TCL recorded $1.8 billion in revenue from its
sale of cement, the report relays.
This was an increase of $76.9 million when compared to the
corresponding period ended September 30, 2022, the report notes.
Improved Operating Results
"In the third quarter of 2023, the TCL Group reported a net income
of $66 million, an increase of 21% when compared to the third
quarter of 2022. This was driven by increased cement volumes in
Jamaica, Trinidad and Tobago, and Guyana; the positive impact of
price adjustments which were implemented to offset cost inflation;
and the improved operating results achieved under the new business
model in Barbados," its chairman David Inglefield and managing
director Francisco Aguilera Mendoza stated, the report relays.
According to the financial statement for the period, TCL stated
that its cement sales volumes increased by 2% in Jamaica, 4% in
Trinidad & Tobago and 21% in Guyana, the report notes.
In December, the Government successfully obtained a suspension of
the Common External Tariff, enabling an increase in the duty rate
on other hydraulic cements from 5% to 20% for the whole of 2024,
with the aim of safeguarding TCL, the report discloses.
The Ministry of Trade secured the approval from the Council for
Trade and Economic Development (COTED) of the Caribbean Community
during its 57th meeting which was held in Guyana, the report
relays.
TCL had complained that its domestic sales volumes experienced a
19% decline for the period 2018 to 2022, the report adds.
===============
X X X X X X X X
===============
LATAM: IDB, Central America, Dominican Rep Discuss Common Goals
---------------------------------------------------------------
The Inter-American Development Bank (IDB) held a high-level
dialogue during the 37th meeting of governors of IDB member
countries of the Central American isthmus and the Dominican
Republic on February 5-6 in Antigua, Guatemala. The gathering with
ministers of finance and economy from the region was part of
preparations for the IDB and IDB Invest Annual Meetings, which will
take place on March 6-10 in the Dominican Republic.
The work sessions, led by IDB President Ilan Goldfajn and including
IDB specialists, assessed the current regional context and
challenges, while identifying policy options for addressing them.
The meeting is a space for dialogue with the region's ministers
about which priorities should guide the development agenda in
upcoming years and how the IDB can deepen its support to the
countries through financing, knowledge and technical assistance.
President Goldfajn also presented the new regional program
"América en el Centro" ("America at the Center") to the region's
most senior economic officials. The program seeks to address the
shared challenges of the Central American isthmus and the Dominican
Republic, and was developed at the request of the IDB governors.
"América en el Centro" has three pillars: productivity and
economic integration, climate adaptation and resilience, and social
development for youth. It aims to mobilize expertise and resources
from other donors and from the private sector, as well as to form a
technical committee with representatives from the region's finance
ministries or treasuries to oversee progress and results.
"The objective of this new program is to strengthen regional
integration and bolster the social development, inclusive growth
and resilience of Central American countries and the Dominican
Republic, as well as leverage resources from donors and the private
sector," explained the IDB president.
A resilient economy, but with challenges
President Goldfajn also noted the resilience of the Central
American economy in the face of external difficulties, while
underscoring its unresolved structural challenges.
Despite growth over the last decade, social disparities and high
poverty rates persist in the Central American isthmus and the
Dominican Republic. One challenge is stagnant productivity,
resulting in an export sector that is highly dependent on a few
commodities. Another is low investment, with an infrastructure gap
that exceeds 50% of GDP, compared to the average of 30% for all of
Latin America and the Caribbean. On the other hand, approximately
30% of Central America's population is young, exceeding the overall
average for Latin America and the Caribbean.
President Goldfajn added that "the countries of the Central
American isthmus and the Dominican Republic, like the other
countries in Latin America and the Caribbean, are now part of the
solution to the world's problems. The region offers major
opportunities in areas such as the environment, climate change,
diversity, foreign direct investment and sources of renewable
energy."
Impact on the Region's Development
The countries of the Central American isthmus and the Dominican
Republic received $4.7 billion in IDB Group financing for the
public and private sectors in 2023. This has enabled countries to
expand access to public services and education, strengthen public
security, and boost support for small and medium-sized enterprises,
climate resilience and regional integration.
From 2020 to 2022, IDB Group support has benefited nearly 2.5
million students through educational projects. It has helped more
than 10 million people access improved health services and enabled
approximately 300,000 households to enjoy better water and
sanitation and energy services. In addition, more than 600
kilometers (372 miles) of roads have been built or improved,
enhancing regional integration, trade and the movement of people
and goods.
In 2023, IDB Invest supported impact investments and mobilized
private-sector resources in areas such as resilient infrastructure;
clean energy; digital connectivity; sustainable tourism; business
ecosystems and jobs, especially small businesses and their supply
chains; and foreign trade.
IDB Lab, the institution's innovation laboratory, has focused on
financial inclusion for vulnerable groups; digitalization of micro,
small and medium-sized enterprises; and promoting technologies and
innovations in areas such as health, nature-based business models,
essential infrastructure services, climate resilience, the circular
economy and the silver economy.
*********
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.
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* * * End of Transmission * * *