/raid1/www/Hosts/bankrupt/TCRLA_Public/240319.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, March 19, 2024, Vol. 25, No. 57
Headlines
A R G E N T I N A
AES ARGENTINA: Fitch Affirms 'CCC-' LongTerm IDR
ARGENTINA: Hinders Debt Swap By Not Offering Puts on Peso Bonds
ARGENTINA: Inflation Slows to 13.2% in February
ARGENTINA: Opens up Food Imports in Bid to Curb Price Hikes
TELAM: Government Extends Suspension of Workers
B R A Z I L
BRAZIL: Lula Plans Airline Bailout to Make Flying Cheaper
BRAZIL: Seeks 'Middle Ground' Solution to States' Debt Service
J A M A I C A
JAMAICA GRANDE: To Be Wound Up After Decade of Dormancy
JAMAICA: Continues Push to Make Business Processes Easier
JAMAICA: Fitch Hikes LongTerm IDR to 'BB-', Outlook Positive
P U E R T O R I C O
BBB FOOD: Hires Gilbert Cardona Hernandez as Accountant
- - - - -
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A R G E N T I N A
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AES ARGENTINA: Fitch Affirms 'CCC-' LongTerm IDR
------------------------------------------------
Fitch Ratings has affirmed AES Argentina Generacion S.A.'s (AAG)
Long-Term Foreign Currency and Local Currency Issuer Default
Ratings (IDRs) at 'CCC-'.
AAG's ratings reflect the company's exposure to the Argentine
sovereign (CC) due to the electricity sector's reliance on
government subsidies and AAG's dependence on payments from
FONINVEMEM funds, which are sovereign obligations. Fitch rates AAG
on a standalone basis from its parent, AES Corporation
(BBB-/Stable), due to a lack of legal guarantees from the parent
and a low strategic and operational incentive to support AAG.
KEY RATING DRIVERS
Heightened Counterparty Exposure Partially Offset by FONINVEMEM
Receivables: AAG depends on payments from the company's main
off-taker, the Wholesale Electricity Market Clearing Company, or
Compania Administradora del Mercado Electrico Mayorista S.A.
(CAMMESA), which acts as an agent on behalf of an association
representing agents of electricity generators, transmission,
distribution and large consumers or the wholesale market
participants. CAMMESA's payment delays to the electricity sector
averaged close to 80 days over the nine-month period through Sept.
30 in 2023, above the contractual 42 days.
Counterparty risk is somewhat mitigated by the company's more
predictable receivables from FONINVEMEM investments with USD37
million received through 3Q23. Upon repayment of the outstanding
roughly USD109 million owed to AAG as of 3Q23, the company will own
an equity stake of up to 30% in Guillermo Brown, a 578MW
single-cycle plant. Repayments of FONINVEMEM obligations are U.S.
dollar-denominated and have been made on schedule. Roughly 65% of
the system cost at YE 2022 was funded with government subsidies. In
addition, AAG's other major revenue source is its newly constructed
200MW of wind farms, which generate revenue in excess of USD40
million per year and do not depend on commodity inputs.
Parent Linkage: The ratings are based on AAG's Standalone Credit
Profile, as overall legal, operational and strategic incentives to
its parent company to support AAG, if needed, are low. AAG is
fully-owned by AES Corporation but there are no guarantees in place
from the parent or cross-default clauses. Strategic incentives are
low as AAG does not provide a significant financial contribution to
AES Corporation. While both entities have the same core business,
and there is some material common management, operational benefits
to the parent are not material. Considering all three linkage
factors are assessed as low, Fitch rates AAG on a standalone
basis.
Hydro Concession Expirations and Limited Growth Expected: The
expiration of concessions for key hydro assets will lower future
EBITDA to below USD100 million in 2024. The concession for the
1,050MW Alicura hydro plant on the Limay River was set to expire on
Aug. 10, 2023 but was extended until March 19, 2024. Going forward,
Fitch anticipates lower revenues by USD17 million on a full-year
basis. The expiration of concessions for the 102MW Cabra Corral and
45MW El Tunal assets on the Juramento River in November 2025 will
have a less pronounced impact given their smaller size.
A wind expansion project has been postponed, and could be deferred
further, given the new government has paused all projects not yet
in development, so new debt financings are currently not in Fitch's
forecast. AAG's gross leverage in Fitch's base case scenario is
projected to decline to 2.9x in 2023, and to 0.9x by 2024 as the
company has repaid its outstanding balance of notes due Feb. 2,
2024 with available cash (USD69 million) and a USD60 million loan
with local banks.
Base Energy Inflation Adjustment: The indexation of Base Energy, or
Energia Base, will be important for AAG and other producers, as
revenue is nearly 80% derived from Energia Base when FONINVEMEM
collections are considered. Base Energy was pesified, or
denominated in Argentine pesos per Resolution 31/2020. Since then,
approximately 10 additional resolutions have been passed to
increase rates, with the latest (Resolution 9/2024) adjusting rates
by 75% and maintaining the tolling agreement structure in place.
Uncertain Regulatory Environment: The electricity market remains
uncertain under President Milei. Fitch estimates the government
transferred USD5.9 billion in funds to CAMMESA in 2023. While the
new government has pledged to reduce subsidies to the system, Fitch
expects the portion of the system that is subsidized will remain
significant despite the new government's increased tariffs in the
Buenos Aires region and goal in Argentina's IMF agreement for
electricity subsidies to be 1.7% of GDP, down from 2.3%.
Low Commodity Price Effect: Exposure to rising global commodity
prices will be low. Revenue is primarily from Energia Base, with
participants having fuel sourced and paid for by CAMMESA. While the
coal used in the San Nicolas plant is sourced internationally, from
Colombia (BB+/Stable), Australia (AAA/Stable) and South Africa
(B-/Stable), and is part of AAG's cost structure, its cost is
entirely reimbursed by CAMMESA.
DERIVATION SUMMARY
AAG's ratings reflect exposure to CAMMESA as an offtaker, which is
reliant on subsidies from the Argentine government. This is the
same situation for Argentine utility and energy peers Pampa Energia
S.A. (B-/Stable), Capex S.A. (CCC+) and Genneia S.A. (CCC-). AAG is
concentrated only in the electricity generation sector, presenting
a balanced portfolio between thermal, wind and hydro assets.
Pampa has a more diversified business profile as a leading company
in electricity generation, distribution, transmission, gas
production and transportation, while Capex has an advantageous
vertical integration in the thermoelectric generation segment, with
the flexibility of having its own natural gas reserves to supply
plants. Genneia is the leading wind power generation provider in
the country with an aggressive expansion plan in renewables.
In terms of credit metrics, AAG's gross leverage as of YE 2022 was
4.1x, compared with Pampa at 1.4x, Genneia at 3.5x, Generacion
Mediterranea S.A. (CCC-) at 7.2x, MSU Energy S.A. (CCC-) at 5.4x
and Capex at 1.6x (YE 2023) as of Jan. 31, 2023. On a net basis,
AAG's leverage was 3.2x in 2022, reflecting USD66 million of cash
and equivalents. Fitch estimates AAG's projected gross leverage
will average 1.0x in the medium term, below Argentine peers' median
of 3.0x.
KEY ASSUMPTIONS
- Energia Base assets are remunerated under Resolution 440/2021
with full inflation pass-through in each subsequent year;
- Gross generation of approximately 5,900GWh during 2023, falling
to roughly 4,650GWh in 2024 after the expiration of the Alicura
hydro concession in March 2024;
- AAG achieves generation capacity factors of 25% for thermal
assets, 20% for hydro and 40% for wind during the rating horizon;
- Average annual maintenance capex of USD13 million over the rating
horizon;
- No dividend payments until 2025;
- U.S. dollar-denominated receivables related to FONINVEMEM of
approximately USD50 million per year until 2026, all related to
Guillermo Brown;
- Refinancing of the majority of outstanding notes due 2027.
RATING SENSITIVITIES
Factors that could, individually or collectively, lead to positive
rating action/upgrade:
- An upgrade to the ratings of Argentina could result in a positive
rating action;
- Given the issuer's high dependence on subsidies from CAMMESA, any
regulatory developments leading to a more independent market less
reliant on support from the Argentine government could positively
affect collections and cash flow.
Factors that could, individually or collectively, lead to negative
rating action/downgrade:
- A downgrade of AAG below 'CCC-' would be due to Fitch's belief
that a default of some kind appears probable or a default or
default-like process has begun, which will be represented by a 'CC'
or 'C' given the ratings of AAG are linked to those of the
Argentine sovereign due to the high reliance on government
subsidies to the electricity sector.
LIQUIDITY AND DEBT STRUCTURE
Adequate Liquidity: AAG reported available cash of ARS40.6 billion
(USD116 million), as of Sept. 30, 2023, covering one year of
interest expense, assuming no additional debt is raised. The
company paid off its 300mil bond due in 2024 partially with
proceeds from a tender and exchange offer issued in July 2023, and
full repayment of the exchange holdouts at maturity (Feb. 2, 2024)
with USD69 million of available cash and USD60 million of bank debt
in local currency.
ISSUER PROFILE
AES Argentina Generacion S.A. (AAG), which is 100% owned by the AES
Corporation (BBB-/Stable), is an electricity generation company in
Argentina with an installed capacity of 3,001MW.
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
----------- ------ -----
AES Argentina
Generacion S.A. LT IDR CCC- Affirmed CCC-
LC LT IDR CCC- Affirmed CCC-
ARGENTINA: Hinders Debt Swap By Not Offering Puts on Peso Bonds
---------------------------------------------------------------
Ignacio Olivera Doll at Bloomberg News reports that Argentina's
Central Bank isn't offering put options for peso bonds the
government is selling in a record debt swap, a move that's
discouraged private banks from participating in the deal, according
to two people with direct knowledge.
The decision not to include puts - pledges to buy back bonds if
they fall below a certain price - is key because they're one of the
main tools to persuade banks to swap peso bonds maturing this year
for new notes that stretch between 2025 and 2028, the people said,
according to Bloomberg News.
While Argentina's Treasury is conducting the swap, the Central Bank
oversees the puts and informed bank executives Monday the
instrument wouldn't be offered during the auction, Bloomberg News
relays. The full terms are due to be released.
The Economy Ministry's press office didn't respond to a request for
comment about the puts.
Argentina began its record peso debt swap in a bid to refinance
almost all of its 2024 maturities over the next four years,
providing a temporary respite for President Javier Milei's
government, Bloomberg News notes. In a surprise move that night,
the Central Bank cut its benchmark interest rate to 80 percent from
100 percent, as monthly inflation cools and the peso strengthens
against the US dollar in parallel markets, Bloomberg News says.
The Economy Ministry published a list of bonds it intends to buy
back and sell, saying it will receive offers from investors,
Bloomberg News discloses. The swap could amount to 55 billion
pesos (US$65 billion), according to Juan Manuel Truffa, partner and
director of local consultancy Outlier, Bloomberg News says.
Put options have been used in the country for years to boost the
attractiveness of bonds at regularly scheduled auctions, Bloomberg
News relays. As of the end of February, they had soared to 16.3
trillion pesos, 11.3 billion more than when Milei took office three
months ago, according to estimates by local brokerage PPI,
Bloomberg News notes.
However, the sharp increase of put options has concerned some
investors, who see the condition in bond contracts potentially
fueling inflation if the options are redeemed for cash, forcing the
Central Bank to print money, Bloomberg News discloses. The
instrument has allowed Economy Minister Luis Caputo to not only
refinance all maturing debt, but also to sell new bills to bankroll
spending, Bloomberg News relays.
More than 70 percent of Treasury bond holdings in pesos included in
the debt swap are held by the public sector, which includes the
Central Bank, social security agency ANSES and Banco Nacion,
according to estimates by consulting firm 1816 Economía &
Estrategia, Bloomberg News notes.
"A floor of acceptance of the swap around these values of
approximately 65 percent could be assumed," Ariel Sbdar, chief
executive officer of local broker Cocos Capital, said on X, the
social media platform formerly known as Twitter, Bloomberg News
adds.
About Argentina
Argentina is a country located mostly in the southern half of South
America. Its capital is Buenos Aires. Javier Milei is the current
president of Argentina after winning the November 19, 2023 general
election. He succeeded Alberto Angel Fernandez in the position.
Argentina has the third largest economy in Latin America. The
country's economy is an upper middle-income economy for fiscal year
2019, according to the World Bank. Historically, however, its
economic performance has been very uneven, with high economic
growth alternating with severe recessions, income maldistribution
and in the recent decades, increasing poverty.
The IMF's executive board completed on August 23, 2023, the fifth
and six reviews of Argentina's 30-month Extended Fund Facility
(EFF), and approved a US$7.5-billion disbursement to Argentina as
part of the larger program, which refinances payments Argentina
owes the institution from a previous bailout that failed to
stabilize the economy in 2018. Argentina would receive another IMF
disbursement in November of about US$2.75 billion pending another
staff-level agreement and board approval.
S&P Global Ratings, on June 13, 2023, raised its local currency
sovereign credit ratings on Argentina to 'CCC-/C' from 'SD/SD' and
0its national scale rating to 'raCCC+' from 'SD'. S&P also affirmed
its 'CCC-/C' foreign currency sovereign credit ratings on
Argentina. The outlook on the long-term ratings is negative. S&P's
'CCC-' transfer and convertibility assessment is unchanged. None of
its rated bond issues are affected.
S&P said the negative outlook on the long-term ratings is based on
the risks surrounding pronounced economic imbalances and policy
uncertainties before and after the 2023 national elections.
Divisions within the government coalition, and infighting among the
opposition, constrain the sovereign's ability to implement timely
changes in economic policy.
Fitch Ratings also upgraded on June 13, 2023, Argentina's Long-Term
Foreign Currency (FC) Issuer Default Rating (IDR) to 'CC' from
'C'and affirmed the Long-Term Local Currency (LC) IDR at 'CCC-'.
Fitch typically does not assign Outlooks to sovereigns with a
rating of 'CCC+' or below.
The upgrade of the FC IDR reflects that Fitch no longer deems a
default-like process to have begun, as the authorities have not
signaled a clear intention to follow through with an intra-public
debt swap announced in March. The new 'CC' rating signals a default
event of some sort appears probable in the coming years, regardless
of the outcome of upcoming elections. The affirmation of the LC IDR
at 'CCC-' follows the peso debt swap in June that Fitch did not
deem to be a "distressed debt exchange" (DDE).
Moody's Investors Service, in September 2022, affirmed Argentina's
Ca foreign-currency and local-currency long-term issuer and senior
unsecured ratings. The outlook remains stable. The decision to
affirm the Ca ratings balances Argentina's limited market access,
weak governance, and history of recurrent debt restructurings with
recent efforts to marshal fiscal and monetary measures to start
addressing underlying macroeconomic imbalances in the context of
the IMF program that was approved in 2022, according to Moody's.
DBRS, Inc. confirmed Argentina's Long-Term Foreign Currency Issuer
Rating at CCC and downgraded its Long-Term Local Currency Issuer
Rating to CCC from CCC (high) on March 3, 2023.
ARGENTINA: Inflation Slows to 13.2% in February
-----------------------------------------------
Buenos Aires Times reports that inflation in Argentina slowed to
13.2 percent, undercutting forecasts from analysts, data published
by the INDEC national statistics bureau showed.
Most private analysts had forecast a rate of 15 percent for
February, similar to the 15.8 percent projected in the Central
Bank's REM survey of market expectations, according to Buenos Aires
Times.
The news is a boost for President Javier Milei, whose government is
gradually bringing down inflation, the report notes. Argentines
suffered increases of 20.6 percent in January and 25.5 percent in
December, the report relays.
However, the extent of the ongoing battle was laid clear by INDEC's
annual figure: prices have risen 276.2 percent over the past year
and by 36.6 percent over the last two months, the report
discloses.
February's figure is "the result of the national government's work
to impose strong fiscal discipline," the president's office said in
a statement obtained by the news agency.
Some of last month's rate can be put down to the removal of price
controls and subsidies by the government of President Milei, who
has moved to slash state spending since taking office, the report
relays.
Challenging months lie ahead, warned the La Libertad Avanza leader
in an interview.
"March is going to be very complicated because it has a very dense
seasonality issue, but I do not rule out that in April there will
be a sharp drop in inflation," Milei predicted, the report notes.
Leading Increases
Telecommunications rose the most in February, 24.7 percent,
followed by transport fares - which soared 21.65 percent following
the removal of subsidies, the report relays.
Utilities, including electricity, gas, water and fuels, which are
also being removed, jumped 20.2 percent, the report discloses.
Alcoholic beverages and tobacco were up 17.7 percent, while goods
and services rose 16.6 percent. Education (9.9 percent) and
clothing and footwear (7.2 percent) were considerably below the
monthly average, the report says.
Food and non-alcoholic beverages, one of the most-affected sectors
in the last year, rose 11.9 percent, with increases led by meat and
meat products, bread and cereals; milk, dairy products and eggs,
the report notes.
In an interview, Milei had hinted at positive news from INDEC.
"It seems to be below 15 percent, which is a great number," the
president said, the report relays.
He also predicted that inflation could reach single digits in the
coming months, the report notes.
Earlier, Economy Minister Luis Caputo declared in a TV interview
that the rate would be "closer to 10 percent than 20 percent," the
report discloses.
With policy-makers forecasting a cooling of inflation, Argentina's
Central Bank cut its benchmark interest rate from 110 percent to 80
percent, the report relays.
Data released by the Buenos Aires City government showed that
consumer prices had risen 14.1 percent, the report notes.
Earlier in the day, the Milei administration announced that it
would open up imports for products from the basic food basket,
following a meeting between Caputo and representatives from
supermarket chains, the report says.
"The decision was taken to definitively open imports for certain
products from the family shopping basket in order to make prices
more competitive, with some tax reductions," said Presidential
Spokesman Manuel Adorni, the report discloses.
Adorni admitted that "price rises above inflation expectations have
been recognised."
'Shock' Austerity
Since he took office in December, Milei has slashed public
spending, winning the approval of the International Monetary Fund
and securing a budget surplus for the first time in 12 years in a
country whose previous governments oversaw rampant inflation and
multiple fiscal crises, the report relays.
He devalued the peso by more than 50 percent, halted state
subsidies for fuel and transport, cut tens of thousands of public
service jobs, and scrapped hundreds of rules in his bid to
deregulate the economy, the report says.
However, his efforts to slash state spending have hit Argentines
hard, with the price of bus tickets almost tripling, and aid cut to
thousands of soup kitchens, the report notes.
And the economy is also experiencing a significant slowdown, with
consumption slowing 13.4 percent year-on-year, according to the
Focus Market firm, the report discloses.
The report relays that the inflationary slowdown comes with the
economy suffering a significant downturn. Industry and
construction are in decline, while consumption is down 13.4 percent
year-on-year, according to the Focus Market private consultancy
firm, the report says.
"Argentina has been in recession for 14 months, but the last four
have been the most intense. Prices have risen sharply and
consumption has collapsed," said independent economist Federico
Glustein, the report notes.
While the IMF - which has a US$44-billion credit program with
Argentina - has praised Milei's efforts to balance the books, it
warned last month about the impacts on the poor, the report
relays.
IMF deputy managing director Gita Gopinath said that austerity
measures must be "calibrated to ensure that social assistance
continues to be provided and that the burden does not fall entirely
on the poorest groups," the report notes.
Gopinath estimated that Argentina's inflation would drop to single
digits by the middle of 2024, the report adds.
About Argentina
Argentina is a country located mostly in the southern half of South
America. Its capital is Buenos Aires. Javier Milei is the current
president of Argentina after winning the November 19, 2023 general
election. He succeeded Alberto Angel Fernandez in the position.
Argentina has the third largest economy in Latin America. The
country's economy is an upper middle-income economy for fiscal year
2019, according to the World Bank. Historically, however, its
economic performance has been very uneven, with high economic
growth alternating with severe recessions, income maldistribution
and in the recent decades, increasing poverty.
The IMF's executive board completed on August 23, 2023, the fifth
and six reviews of Argentina's 30-month Extended Fund Facility
(EFF), and approved a US$7.5-billion disbursement to Argentina as
part of the larger program, which refinances payments Argentina
owes the institution from a previous bailout that failed to
stabilize the economy in 2018. Argentina would receive another IMF
disbursement in November of about US$2.75 billion pending another
staff-level agreement and board approval.
S&P Global Ratings, on June 13, 2023, raised its local currency
sovereign credit ratings on Argentina to 'CCC-/C' from 'SD/SD' and
0its national scale rating to 'raCCC+' from 'SD'. S&P also affirmed
its 'CCC-/C' foreign currency sovereign credit ratings on
Argentina. The outlook on the long-term ratings is negative. S&P's
'CCC-' transfer and convertibility assessment is unchanged. None of
its rated bond issues are affected.
S&P said the negative outlook on the long-term ratings is based on
the risks surrounding pronounced economic imbalances and policy
uncertainties before and after the 2023 national elections.
Divisions within the government coalition, and infighting among the
opposition, constrain the sovereign's ability to implement timely
changes in economic policy.
Fitch Ratings also upgraded on June 13, 2023, Argentina's Long-Term
Foreign Currency (FC) Issuer Default Rating (IDR) to 'CC' from
'C'and affirmed the Long-Term Local Currency (LC) IDR at 'CCC-'.
Fitch typically does not assign Outlooks to sovereigns with a
rating of 'CCC+' or below.
The upgrade of the FC IDR reflects that Fitch no longer deems a
default-like process to have begun, as the authorities have not
signaled a clear intention to follow through with an intra-public
debt swap announced in March. The new 'CC' rating signals a default
event of some sort appears probable in the coming years, regardless
of the outcome of upcoming elections. The affirmation of the LC IDR
at 'CCC-' follows the peso debt swap in June that Fitch did not
deem to be a "distressed debt exchange" (DDE).
Moody's Investors Service, in September 2022, affirmed Argentina's
Ca foreign-currency and local-currency long-term issuer and senior
unsecured ratings. The outlook remains stable. The decision to
affirm the Ca ratings balances Argentina's limited market access,
weak governance, and history of recurrent debt restructurings with
recent efforts to marshal fiscal and monetary measures to start
addressing underlying macroeconomic imbalances in the context of
the IMF program that was approved in 2022, according to Moody's.
DBRS, Inc. confirmed Argentina's Long-Term Foreign Currency Issuer
Rating at CCC and downgraded its Long-Term Local Currency Issuer
Rating to CCC from CCC (high) on March 3, 2023.
ARGENTINA: Opens up Food Imports in Bid to Curb Price Hikes
-----------------------------------------------------------
Buenos Aires Times reports that President Javier Milei's government
has ordered the opening of food imports in an attempt to curb
soaring inflation "and make prices more competitive."
The news was announced by Presidential Spokesman Manuel Adorni, who
said the decision had been taken after meetings between Economy
Minister Luis Caputo and business leaders, according to Buenos
Aires Times.
"In the meeting, the businessmen acknowledged that prices were
rising above the inflation expectations and of course the scenario
that the businessmen had evaluated was catastrophic," said Adorni,
the report notes.
The spokesperson said that Argentina's economy is "gradually
normalising" after years of protectionism, the report relays.
"The decision has been taken to definitively open imports for
certain products of the family basket in order to make prices more
competitive for the benefit of Argentine families and consumers,"
he added.
The report discloses that Adorni added that there would be "some
tax relief" on certain imported products.
The move was announced just hours before the INDEC national
statistics bureau confirmed inflation data for February, with
analysts forecasting a rate of around 15 percent, the report says.
Various local news outlets reported that Caputo received
representatives from the largest supermarket chains in Argentina,
the report says.
According to reports, he said that prices of mass consumption
products were not reflecting Argentina's new economic reality, the
report adds.
About Argentina
Argentina is a country located mostly in the southern half of South
America. Its capital is Buenos Aires. Javier Milei is the current
president of Argentina after winning the November 19, 2023 general
election. He succeeded Alberto Angel Fernandez in the position.
Argentina has the third largest economy in Latin America. The
country's economy is an upper middle-income economy for fiscal year
2019, according to the World Bank. Historically, however, its
economic performance has been very uneven, with high economic
growth alternating with severe recessions, income maldistribution
and in the recent decades, increasing poverty.
The IMF's executive board completed on August 23, 2023, the fifth
and six reviews of Argentina's 30-month Extended Fund Facility
(EFF), and approved a US$7.5-billion disbursement to Argentina as
part of the larger program, which refinances payments Argentina
owes the institution from a previous bailout that failed to
stabilize the economy in 2018. Argentina would receive another IMF
disbursement in November of about US$2.75 billion pending another
staff-level agreement and board approval.
S&P Global Ratings, on June 13, 2023, raised its local currency
sovereign credit ratings on Argentina to 'CCC-/C' from 'SD/SD' and
0its national scale rating to 'raCCC+' from 'SD'. S&P also affirmed
its 'CCC-/C' foreign currency sovereign credit ratings on
Argentina. The outlook on the long-term ratings is negative. S&P's
'CCC-' transfer and convertibility assessment is unchanged. None of
its rated bond issues are affected.
S&P said the negative outlook on the long-term ratings is based on
the risks surrounding pronounced economic imbalances and policy
uncertainties before and after the 2023 national elections.
Divisions within the government coalition, and infighting among the
opposition, constrain the sovereign's ability to implement timely
changes in economic policy.
Fitch Ratings also upgraded on June 13, 2023, Argentina's Long-Term
Foreign Currency (FC) Issuer Default Rating (IDR) to 'CC' from
'C'and affirmed the Long-Term Local Currency (LC) IDR at 'CCC-'.
Fitch typically does not assign Outlooks to sovereigns with a
rating of 'CCC+' or below.
The upgrade of the FC IDR reflects that Fitch no longer deems a
default-like process to have begun, as the authorities have not
signaled a clear intention to follow through with an intra-public
debt swap announced in March. The new 'CC' rating signals a default
event of some sort appears probable in the coming years, regardless
of the outcome of upcoming elections. The affirmation of the LC IDR
at 'CCC-' follows the peso debt swap in June that Fitch did not
deem to be a "distressed debt exchange" (DDE).
Moody's Investors Service, in September 2022, affirmed Argentina's
Ca foreign-currency and local-currency long-term issuer and senior
unsecured ratings. The outlook remains stable. The decision to
affirm the Ca ratings balances Argentina's limited market access,
weak governance, and history of recurrent debt restructurings with
recent efforts to marshal fiscal and monetary measures to start
addressing underlying macroeconomic imbalances in the context of
the IMF program that was approved in 2022, according to Moody's.
DBRS, Inc. confirmed Argentina's Long-Term Foreign Currency Issuer
Rating at CCC and downgraded its Long-Term Local Currency Issuer
Rating to CCC from CCC (high) on March 3, 2023.
TELAM: Government Extends Suspension of Workers
-----------------------------------------------
Buenos Aires Times reports that Argentina's government has extended
a leave of absence for all workers at the Telam state news agency
as it confinues its efforts to shut the outlet.
Bosses at the firm also offered a voluntary retirement program,
employees of the agency, it was revealed, according to Buenos Aires
Times.
An email sent to the workers by Diego Chaher, Telam's trustee, and
obtained by AFP, states: "The dispensation of work leave with pay
is extended for seven days," the report notes
Following an announcement by far-right president Javier Milei that
he would close the state news company for allegedly being an
instrument "of propaganda," the government had suspended the
agency's 700 workers for seven days with pay and fenced off its
headquarters in Buenos Aires, the report relays.
"We will know the plan that the government is designing for the
closure and the fate of each of the employees," Presidential
Spokesman Manuel Adorni said when announcing the closure, the
report discloses.
No plan has yet emerged and some onlookers say that achieving the
government's goal will not be easy.
Buenos Aires Times says that lawmaker Margarita Stolbizer, a member
of the pro-dialogue bloc Hacemos Coalicion, observed on the X
social network that "it is not possible to eliminate by decree
bodies created by law."
The measure generated a rapid reaction from Telam workers, who held
a rally and set up an encampment at the door of one of the
headquarters, the report relays.
A website, "Somos Telam" ("We are Telam"), has been set up to
continue publishing articles and for the issuing of communiques
from workers, the report notes.
Buenos Aires Times discloses that Tomas Eliaschev, a journalist and
Telam union delegate, said that, after a workers' assembly at the
building of the Central General de Trabajadores (CGT) umbrella
union group, employees voted to reject the government's voluntary
redundancy proposal.
"It is not voluntary because it is done under the framework of
extortion," said Eliaschev, the report relays.
He stressed that Telam's headquarters are still fenced off and
surrounded by police, the report notes.
He also announced that workers will present a bill so that the
agency can "continues to exist, is under parliamentary control and
becomes an even more democratic and federal Telam," the report
discloses
"We are the first to want Telam to improve, but there is no way we
are going to let them erase almost 80 years of history with the
stroke of a pen," he added.
President Milei announced the closure of the agency during his
speech marking the opening of normal Congress sessions, saying it
had been "used for decades as an agency of Kirchnerite propaganda"
- referring to the political ideology of former president Cristina
Fernandez de Kirchner, and her late husband, former president
Nestor Kirchner, the report discloses.
In 2018, during former president Mauricio Macri's administration,
Telam went through a traumatic downsizing with the dismissal of 357
workers, some of whom were later reinstated by court order, the
report recalls.
Telam was created as a mixed public-private initiative in April
1945 by then-labour secretary Juan Domingo Perón, who would go on
to serve three terms as president, the report notes.
In 1959, under the presidency of Arturo Frondizi, it was privatised
and renamed "Telam Sociedad Anónima, Periodastica, Radiofónica,
Cinematografica, Comercial, Inmobiliaria y Financiera," the report
says.
Four years later, after the overthrow of Frondizi in a military
coup, President Jose Maraa Guido closed Telam for allegedly
"disseminating false and biased information." In 1968, it was
nationalised by dictator Juan Carlos Onganaa, the report notes.
Until last month, Telam published more than 500 national news
articles and 200 photos daily, as well as content for video and
radio clients.
According to its website, the state news agency "is the only one in
the country with a network of correspondents in all of the
country's main cities and provinces," the report relays.
This regional role has taken on increasing importance following the
2017 closure of DyN (Agencia Diarios y Noticias) private news
agency, which was heralded for its reporting in the nation's more
remote areas, the report adds.
===========
B R A Z I L
===========
BRAZIL: Lula Plans Airline Bailout to Make Flying Cheaper
---------------------------------------------------------
Bloomberg News reports that Brazil is putting the finishing touches
on a rescue plan for its troubled airlines, as President Luiz
Inacio Lula da Silva's government confronts a challenge the US and
Europe dealt with much sooner after the pandemic.
The package, to be announced in coming days, will use public funds
as collateral for loans to struggling carriers from the country's
development bank, according to a person familiar with the matter,
according to the report.
But the plan is still in flux and it's expected to be more of a
band-aid solution than an industry cure-all, the report notes.
Cutting fares enough to allow the poor to fly regularly has become
somewhat of an obsession for Lula, who campaigned on a pledge to
restore prosperity in Latin America's largest economy, the report
relays.
The high cost of jet fuel in Brazil is a complicating factor, with
the state-run oil company under pressure to overhaul its pricing
formula, the report notes.
Inaction by Lula's predecessor after Covid-19 pushed domestic
carriers to the brink, the report discloses.
The new administration has been struggling to agree on a way
forward, and when Gol Linhas Aereas Inteligentes SA filed for
bankruptcy protection at the end of January the issue vaulted to
the top the agenda, the report says.
Azul SA is now exploring a potential takeover bid for its troubled
competitor, the report notes.
The exact amount of aid is still being determined. Some within
government are pushing for as much as 8 billion reais ($1.6
billion), while the Finance Ministry prefers an amount closer to 5
billion reais, 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: Seeks 'Middle Ground' Solution to States' Debt Service
--------------------------------------------------------------
Reuters reports that Brazil's Finance Ministry is expected to
present a proposal on debt service for states that represents a
middle ground in the debate amid calls for reduced burdens, Sao
Paulo Governor Tarcisio de Freitas said.
According to the governor of Brazil's most populous state, regional
debt stocks are growing faster than the economy and states' revenue
expansion, creating an "unpayable debt," the report notes.
Speaking to reporters following a meeting with Finance Minister
Fernando Haddad, Freitas said the proposal will be presented to
President Luiz Inacio Lula da Silva and discussed with the
governors after the presidential greenlight.
The aim is to reach a final text within 60 days, generating a bill
that should be sent to Congress in the first half of this year, he
added, the report notes. Freitas said that governors from the
South and Southeast regions proposed the correction of debts to the
federal government to match the long-term growth of the Brazilian
economy, at 3% per year, the report discloses. However, he
emphasized that the Finance Ministry will make another proposal and
expressed confidence that the parties will reach "a middle ground,"
allowing states to have greater cash availability for investments
without harming federal public coffers, 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).
=============
J A M A I C A
=============
JAMAICA GRANDE: To Be Wound Up After Decade of Dormancy
-------------------------------------------------------
RJR News reports that the government is seeking a trustee to manage
the liquidation of Jamaica Grande Limited.
Jamaica Grande Limited has four shareholders; the Jamaican
government, through Financial Institutions Services Limited, has
the largest interest of 49.5 per cent, according to RJR News.
The tender document stated that the decision to dissolve the
company is imminent as the only income it derives is from its
deposits, the report notes.
The appointed trustee will be responsible for monetizing all
assets, settling outstanding debts, including taxes and trustee
fees, and distributing any resulting surplus to the shareholders,
the report relays.
Jamaica Grande Limited sold off its assets in August 2004, after a
decade of operation, significantly reducing its debts in the
process and ultimately ceasing operations in September of that
year, the report adds.
JAMAICA: Continues Push to Make Business Processes Easier
---------------------------------------------------------
Javaughn Keyes at RJR News reports that the Jamaican government is
hoping to continue the implementation of programs to increase
business opportunities and reduce bureaucracy.
While speaking at the Jamaica Business Reform Forum, Director
General at the Planning Institute of Jamaica Dr. Wayne Henry said
one of the projects aimed at improving processes is the Foundations
for Competitiveness and Growth Project (FCGP), according to RJR
News.
This is being done at a cost of US$50 million over six years, with
support from the World Bank, the report notes.
It first started in fiscal year 2014/2015, and was later
restructured into its current form, the report relays.
The World Bank funding stops, but the government will pick up
support for the next year, the report discloses.
"The FCGP was designed to strengthen the local business environment
for increased private sector investment. It does so through three
components, namely enhancing competition, facilitating strategic
private investments in the form of privatization and public-private
partnerships and improving the productivity of our SMEs. The
business sector is critical to employment in Jamaica, particularly
our MSMEs are viewed as an engine for growth," Dr. Henry asserted,
the report relays.
RJR News notes that there is also a tool of measurement being used
to help improve some steps, dubbed the Business Environment Reform
Agenda.
Project Manager at the National Competitiveness Council Sherifa
Powell explained that this will increase the automation of
government processes in the short run and reduce government and
private sector costs, the report discloses.
"[It will] also ensure that there is greater transparency and
predictability in the business environment. Over the medium term,
[it will facilitate] increased levels of foreign direct investment,
local direct investment flows and of course job creation. It makes
no sense to stimulate an economy without these particular
measures," she noted, the report relays.
The government is urging private sector players to suggest
amendments to laws that could make business processes easier, the
report says.
Industry and Commerce Minister Aubyn Hill said business leaders
must take a proactive role in discussions pertaining to
legislation, the report notes.
About Jamaica
Jamaica is an island country situated in the Caribbean Sea.
Jamaica is an upper-middle income country with an economy heavily
dependent on tourism. Other major sectors of the Jamaican economy
include agriculture, mining, manufacturing, petroleum refining,
financial and insurance services.
In October 2023, Moody's upgraded the Government of Jamaica's
long-term issuer and senior unsecured ratings to B1 from B2, and
senior unsecured shelf rating to (P)B1 from (P)B2. The outlook has
been changed to positive from stable. The upgrade of Jamaica's
rating to B1 reflects the government's sustained commitment to
fiscal consolidation and debt reduction. The positive outlook
reflects Moody's assessment that a continuation of the favorable
fiscal trajectory will further increase Jamaica's credit
resilience.
S&P Global Ratings raised on September 13, 2023, its long-term
foreign and local currency sovereign credit ratings on Jamaica to
'BB-' from 'B+', and affirmed its short-term foreign and local
currency sovereign credit ratings at 'B'. The stable outlook
reflects S&P's expectation that the government will remain
committed to prudent fiscal policies and reducing debt, as well as
supportive economic policies including a flexible exchange rate
regime and effective monetary policy.
In March 2022, Fitch Ratings affirmed Jamaica's Long-Term Foreign
Currency Issuer Default Rating (IDR) at 'B+'. The Rating Outlook is
Stable.
JAMAICA: Fitch Hikes LongTerm IDR to 'BB-', Outlook Positive
------------------------------------------------------------
Fitch Ratings has upgraded Jamaica's Long-Term Foreign-Currency and
Local-Currency Issuer Default Ratings (IDRs) to 'BB-' from 'B+'.
The Outlook remains Positive.
In addition, Fitch has upgraded Jamaica's Country Ceiling to 'BB'
from 'BB-'.
KEY RATING DRIVERS
Upgrade; Positive Outlook: The upgrade of Jamaica's ratings to
'BB-' reflects significant progress with debt reduction, backed by
a sound fiscal framework and a strong political commitment to
deliver large primary surpluses. Robust fiscal management has
contributed to a turnaround in creditworthiness following the 2013
distressed debt exchange that Fitch considered a default. Aside
from a Covid-19-related spike in 2020, debt-to-GDP has fallen every
year for more than a decade, to a forecasted 73.5% in fiscal
2023/2024 from a high of 135.3% of GDP in fiscal 2012/2013.
Although this remains above the 'BB' median of 52.2% of GDP, it
represents the third largest decline in debt burden among all rated
sovereigns over this period - only Ireland and Iceland experienced
a larger decline. Concurrently, 'B' and 'BB' median debt-to-GDP
increased over this period by 23 ppts and 14 ppts, respectively.
The Positive Outlook reflects Fitch's expectation of continued
improvement in debt metrics and further deepening of the policy
framework over the next few years.
Jamaica's 'BB-' rating is also supported by governance indicators
that are substantially stronger than the 'BB' median. The ratings
remain constrained by deep structural weaknesses, including subdued
growth potential owing to a high crime rate, low productivity and
weak demographics, as well as vulnerability to external (including
weather-related) shocks.
Primary Budget Surpluses: The budget balance has improved
significantly since 2020, when the pandemic support measures led to
the first deficit since 2015. Fitch forecasts that the overall
surplus will be JMD9.1 billion (0.3% of GDP), with a primary
surplus of JMD181.9 billion (6.1% of GDP) in fiscal 2023/2024.
Revenues are forecast to grow by 14.5% yoy, exceeding the
forecasted growth rate of nominal GDP and just a touch above
expenditure growth. The higher-than-normal expenditure growth is
being driven by a large increase in the public sector wage bill,
which Fitch expects to increase by nearly 50% over the next three
years. Some of this increase is due to the reclassification of
certain allowances from program expenditures to wages. Fitch does
not expect that the higher wage bill will push the fiscal balance
into deficit, in part owing to fiscal space generated by the lower
interest bill.
Declining Debt Trajectory: Fitch forecasts these large primary
surpluses will reduce general government debt-to-GDP to 69.7% by
fiscal 2024/2025 and to around 66.4% in fiscal 2025/2026, putting
it on target to meet the government's 60% debt target by 2028,
which is still higher than the current 'BB' median of 52%.
Stable Policy Framework: Jamaica has remained committed to an
economic policy framework built on two key pillars: Bank of
Jamaica's (BoJ) inflation-targeting monetary policy and fiscal
policy anchored on debt reduction targets. The policy framework
proved flexible enough to cope with the recent shocks without
undermining medium-term fiscal and inflation expectations. The
government has built a record of fiscal prudence that has gained
credibility in recent years and may be further strengthened over
the next several years, including through the successful
implementation of the new fiscal commission.
Monetary Policy Strengthening: The BoJ's independence and
credibility have improved in recent years; however, the bank does
have to contend with some weakness in policy transmission,
particularly given the country's exposure to imported inflation.
Inflation has remained above the target band (4%-6%) given recent
hikes in transportation fares. Nonetheless, the bank is likely to
cut its main policy rate, which is currently at 7%, later this year
when inflation comes back down.
Growth Stabilizing at Potential: The Jamaican economy stabilized
following a rebound from the sharp pandemic-induced decline in
2020. Following two years of relatively rapid growth (4.6% and 5.2%
in 2021 and 2022), Jamaica's real GDP growth rate moderated to an
estimated 2.0% last year. The recovery was boosted by the tourism
rebound, especially owing to stopover visitors from the U.S., the
largest market. Fitch forecasts real growth to slow further to 1.8%
in 2024 and 1.7% in 2025, in-line with its medium-term potential
rate (around 1%-2%), which is particularly weak relative to rating
peers.
Resilient External Sector: Jamaica has had a current account
deficit (CAD) in the range of 1%-3% of GDP since 2015, a
significant improvement over the prior decade when the CAD averaged
11.4%. The CAD is amply funded by foreign direct investment
inflows. While the current account balance contains a large trade
deficit, it is offset by a tourism-driven services surplus and a
large surplus on secondary incomes, consisting mainly of
remittances from the diaspora.
Improving External Balance Sheet: Jamaica's external balance sheet
has continued to improve. Net sovereign external debt is forecast
to fall to 19.7% of GDP this year from a high of 41.6% in fiscal
2015/2016, as a result of this deleveraging and a significant
build-up in international reserves. Official international reserves
have increased nearly threefold to USD4.9 billion in 2023 from a
low of USD1.8 billion in 2013. Jamaica has no need to issue
external, foreign-currency debt on the global financial markets
given its fiscal surplus and low external maturities.
Sound Banking Sector: The banking sector is well capitalized, and
non-performing loans remained at low levels. As of September 2023,
the capital adequacy ratio was 14.5%, well above the regulatory
requirement of 10% and the NPL ratio was 2.5%, below the five-year
pre-pandemic average.
ESG - Governance: Jamaica has an ESG Relevance Score (RS) of '5[+]'
for both Political Stability and Rights and for the Rule of Law,
Institutional and Regulatory Quality and Control of Corruption.
These scores reflect the high weight that the World Bank Governance
Indicators (WBGI) have in its proprietary Sovereign Rating Model.
Jamaica has a medium WBGI ranking at 59.2, reflecting a recent
track record of peaceful political transitions, a moderate level of
rights for participation in the political process, moderate
institutional capacity, established rule of law and a moderate
level of corruption.
RATING SENSITIVITIES
Factors that Could, Individually or Collectively, Lead to Negative
Rating Action/Downgrade
- Public Finances: Fiscal loosening, for example owing to the
materialization of spending pressures or a revenue shortfall,
resulting in a slower than expected fall in debt/GDP;
- Macro/Public Finances/External: A external shock that weakens
growth, public finances and/or external liquidity; for example, a
natural disaster or sharp fall in tourism.
Factors that Could, Individually or Collectively, Lead to Positive
Rating Action/Upgrade
- Public Finances: Significant decline in the government
debt-to-GDP ratio and/or interest burden over the medium term, that
brings the debt burden closer to peer medians;
- Macro/External: Evidence of improved growth potential and/or
enhanced resilience of economic growth to weather shocks.
SOVEREIGN RATING MODEL (SRM) AND QUALITATIVE OVERLAY (QO)
Fitch's proprietary SRM assigns Jamaica a score equivalent to a
rating of 'BB-' on the Long-Term Foreign-Currency (LT FC) IDR
scale.
Fitch's sovereign rating committee did not adjust the output from
the SRM score to arrive at the final LT FC IDR.
Fitch's SRM is the agency's proprietary multiple regression rating
model that employs 18 variables based on three-year centered
averages, including one year of forecasts, to produce a score
equivalent to a LT FC IDR. Fitch's QO is a forward-looking
qualitative framework designed to allow for adjustment to the SRM
output to assign the final rating, reflecting factors within its
criteria that are not fully quantifiable and/or not fully reflected
in the SRM.
COUNTRY CEILING
Fitch has upgraded Jamaica's Country Ceiling to 'BB' from 'BB-'.
The Country Ceiling for Jamaica is one notch above the Long-Term
Foreign-Currency. This reflects moderate constraints and
incentives, relative to the IDR, against capital or exchange
controls being imposed that would prevent or significantly impede
the private sector from converting local currency into foreign
currency and transferring the proceeds to non-resident creditors to
service debt payments. The IMF's reclassification of the
exchange-rate regime to 'floating' in June 2018 and low FX
surrender requirements indicate institutional improvements that
reduce transfer and convertibility risk. Jamaica has trade
agreements with the US, EU and belongs to CARICOM. The sovereign
did not restrict private-sector foreign debt service during the
debt default.
Fitch's Country Ceiling Model produced a starting point uplift of
+1 notch above the IDR. Fitch's rating committee did not apply a
qualitative adjustment to the model result.
ESG CONSIDERATIONS
Jamaica has an ESG Relevance Score of '5[+]' for Political
Stability and Rights as World Bank Governance Indicators have the
highest weight in Fitch's SRM and are therefore highly relevant to
the rating and a key rating driver with a high weight. As Jamaica
has a percentile rank above 50 for the respective Governance
Indicator, this has a positive impact on the credit profile.
Jamaica has an ESG Relevance Score of '5[+]' for Rule of Law,
Institutional & Regulatory Quality and Control of Corruption as
World Bank Governance Indicators have the highest weight in Fitch's
SRM and are therefore highly relevant to the rating and are a key
rating driver with a high weight. As Jamaica has a percentile rank
above 50 for the respective Governance Indicators, this has a
positive impact on the credit profile.
Jamaica has an ESG Relevance Score of '4[+]'for Human Rights and
Political Freedoms as the Voice and Accountability pillar of the
World Bank Governance Indicators is relevant to the rating and a
rating driver. As Jamaica has a percentile rank above 50 for the
respective Governance Indicator, this has a positive impact on the
credit profile.
Jamaica has an ESG Relevance Score of '4' for Creditor Rights as
willingness to service and repay debt is relevant to the rating and
is a rating driver for Jamaica as for all sovereigns. As Jamaica
has a fairly recent restructuring of public debt in 2013, this has
a negative impact on the credit profile.
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
----------- ------ -----
Jamaica LT IDR BB- Upgrade B+
ST IDR B Affirmed B
LC LT IDR BB- Upgrade B+
LC ST IDR B Affirmed B
Country Ceiling BB Upgrade BB-
senior
unsecured LT BB- Upgrade B+
=====================
P U E R T O R I C O
=====================
BBB FOOD: Hires Gilbert Cardona Hernandez as Accountant
-------------------------------------------------------
BBB Food Corp. seeks approval from the U.S. Bankruptcy Court for
the District of Puerto Rico to employ Gilbert Cardona Hernandez as
accountant.
The firm will provide these services:
a. close out Debtor's books as of the date of the filing of
this case, and to open new books as of the next day thereafter;
b. establish a new bookkeeping system to replace the system
heretofore used by the Debtor;
c. prepare the periodic statements of the Debtor in
Possession's operation as required by the rules of this court;
d. prepare and file Debtor's state and federal tax return for
the fiscal year which ended in the semester prior to the date of
this filing case;
e. prepare General Ledger and Disbursements Register;
f. reconcile the account;
g. prepare Certified Interim, Financial Statements as needed;
h. prepare annual Financial Statements and Returns;
i. provide tax and management counselling; and
j. represent in taxes investigations.
The firm will be paid at the rates of $1,000 per month.
The firm will also be reimbursed for reasonable out-of-pocket
expenses incurred.
Gilbert Cardona Hernandez, disclosed in a court filing that the
firm is a "disinterested person" as the term is defined in Section
101(14) of the Bankruptcy Code.
The firm can be reached at:
Gilbert Cardona Hernandez
Urb. El Paraiso
1539 Calle Tamesis
San Juan Puerto Rico 00926
Telephone: (787) 452-3678
About BBB Food Corp
BBB Food Corp sought protection for relief under Chapter 11 of the
Bankruptcy Code (Bankr. D.P.R. Case No. 24-00152) on Jan. 19,
2024,
listing $500,001 to $1 million in assets and liabilities.
Juan C Bigas Valedon, Esq. at Juan C Bigas Law Office represents
the Debtor as counsel.
*********
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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