/raid1/www/Hosts/bankrupt/TCRLA_Public/240610.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
Monday, June 10, 2024, Vol. 25, No. 116
Headlines
A R G E N T I N A
ARGENTINA: Suddenly Need Pesos After Milei Pitched Dollarization
B R A Z I L
ATLAS LITHIUM: All Four Proposals Approved at Annual Meeting
BRASKEM SA: Fitch Affirms 'BB+' LongTerm IDR, Outlook Negative
BRAZIL: Federal Revenue Has 11% Year-on-Year Increase in May
COMPASS GAS: Fitch Affirms 'BB' LongTerm IDR, Outlook Stable
YINSON BORONIA: Fitch Rates $1.035BB Secured Notes 'BB+'
C A Y M A N I S L A N D S
GFH SUKUK: Fitch Affirms 'B' Rating on USD500MM Sukuk Due 2025
C O L O M B I A
BANCOLOMBIA SA: Moody's Rates New USD Tier 2 Sub. Notes 'Ba3(hyb)'
BANCOLOMBIA: Fitch Gives BB-(EXP) Rating on Upcoming USD Sub. Notes
C O S T A R I C A
AUTOPISTAS DEL SOL: Fitch Hikes Rating on International Notes to B+
D O M I N I C A N R E P U B L I C
[*] DOMINICAN REPUBLIC: Forum Explores Opportunities With P.R.
J A M A I C A
JAMAICA: Manufacturing Industry Earns 10.9% Less From Exports
M E X I C O
FORTALEZA MATERIALES: Moody's Withdraws 'Ba3' Corp. Family Rating
P U E R T O R I C O
GRIFFIN GLOBAL: Fitch Affirms 'BB' LongTerm IDR, Outlook Stable
V E N E Z U E L A
VENEZUELA: Inflation Slows to 10-Year Low of 59% Ahead of Vote
X X X X X X X X
[*] BOND PRICING: For the Week June 3 to June 7, 2024
- - - - -
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A R G E N T I N A
=================
ARGENTINA: Suddenly Need Pesos After Milei Pitched Dollarization
----------------------------------------------------------------
Patrick Gillespie at Bloomberg News reports that President Javier
Milei wielded US hundred-dollar bills with his face on them during
the election campaign, but Argentines suddenly need pesos more than
ever thanks to his economic plan.
More people are now selling some of their dollar savings for pesos
to make ends meet than those buying greenbacks, according to
Bloomberg News. The abrupt revival of demand for the crisis-prone
currency is an unexpected consequence of the shock-therapy policies
Milei implemented after taking office on December 10, Bloomberg
News notes.
Bloomberg News discloses some 208,000 Argentines sold foreign
currency through official channels in April, according to Central
Bank data released, while 51,000 bought dollars or other hard
currencies. That builds on a trend that started in January and
marks the first reversal of buyers and sellers since at least 2018,
Bloomberg News relays.
In November, the month before Milei's inauguration, 789,000
Argentines bought hard currency while only 114,000 sold dollars,
Bloomberg News discloses. The figures are only a sliver of the
real snapshot, since millions of Argentines exchange pesos and
dollars on the vast black market, as well as through legal
financial transactions, Bloomberg News says.
The need for pesos stems from Milei's decision to abandon price
controls but keep a tight grip on the peso, ultimately slashing
Argentines' buying power, Bloomberg News relays. Prices were
repressed by the president's predecessors due to thousands of
government-mandated controls that the libertarian immediately began
to abandon, Bloomberg News notes.
While prices are up more than 100 percent since his inauguration,
the peso has only depreciated 59 percent over that period,
Bloomberg News says. That mismatch makes daily essentials
expensive in dollar terms as local incomes have tanked, forcing
Argentines to dredge up dollar savings to pay the monthly bills,
Bloomberg News notes.
Milei and his economic team have repeatedly denied that the peso is
overvalued, nor do they plan to speed up the pace of its
devaluation to catch up with inflation, Bloomberg News relays.
Instead, they argue businesses need to cut prices, Bloomberg News
notes.
The president still vows to implement a "competition of currencies"
where the US dollar and peso will co-exist as forms of legal
tender, Bloomberg News relays. He also says he'll eventually
deliver on his pledge to shut down the Central Bank entirely,
Bloomberg News notes.
While prices are up more than 100 percent since his inauguration,
the peso has only depreciated 59 percent over that period,
Bloomberg News relates. That mismatch makes daily essentials
expensive in dollar terms as local incomes have tanked, forcing
Argentines to dredge up dollar savings to pay the monthly bills,
Bloomberg News relays.
Milei and his economic team have repeatedly denied that the peso is
overvalued, nor do they plan to speed up the pace of its
devaluation to catch up with inflation, Bloomberg News notes.
Instead, they argue businesses need to cut prices, Bloomberg News
says.
The president still vows to implement a "competition of currencies"
where the US dollar and peso will co-exist as forms of legal
tender, Bloomberg News discloses. He also says he'll eventually
deliver on his pledge to shut down the central bank entirely,
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 March 15, 2024, raised its local currency
sovereign credit ratings on Argentina to 'CCC/C' from 'SD/SD' and
its national scale rating to 'raB+' from 'SD'. S&P also raised its
long-term foreign currency sovereign credit rating to 'CCC' from
'CCC-' and affirmed its 'C' short-term foreign currency rating. The
outlook on the long-term ratings is stable. In addition, S&P
revised its transfer and convertibility assessment to 'CCC' from
'CCC-'.
S&P said the stable outlook on the long-term ratings balances the
risks posed by pronounced economic imbalances and policy
uncertainties with the favorable change in near-term debt service
obligations. S&P also expect no further debt exchanges that it
would likely consider to be distressed.
Fitch Ratings 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.
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B R A Z I L
===========
ATLAS LITHIUM: All Four Proposals Approved at Annual Meeting
------------------------------------------------------------
Atlas Lithium Corporation disclosed in a Form 8-K filed with the
Securities and Exchange Commission that the Company's 2024 Annual
Meeting of the Stockholders was held on May 28, 2024, at which the
stockholders:
(a) elected Ambassador Roger Noriega, Marc Fogassa, Cassiopeia
Olson,Esq., Stephen Petersen, CFA, and Brian Talbot to the
Company's Board of Directors to hold office until the
Company's next annual meeting of stockholders;
(b) approved equity grants to the Company's independent
directors;
(c) approved, on an advisory basis, executive compensation; and
(d) recommended, on an advisory basis, every two years as
frequency of future advisory votes on executive
compensation.
The proposal to ratify the appointment of the Company's independent
registered accounting firm for the 2024 fiscal year was withdrawn
by management and not presented at the Annual Meeting.
Based on the results of the vote, and consistent with the Board of
Director's recommendation, the Company has determined that advisory
votes on executive compensation will be submitted to stockholders
every two years until the next required vote on the frequency of
such votes, or until the Board of Directors otherwise determines a
different frequency is in the best interests of the Company's
stockholders.
About Atlas Lithium
Headquartered in Minas Gerais, Brazil, Atlas Lithium Corporation --
http://www.atlas-lithium.com/-- is a mineral exploration and
development company with lithium projects and multiple lithium
exploration properties. In addition, the Company owns exploration
properties in other battery minerals, including nickel, copper,
rare earths, graphite, and titanium. Its current focus is the
development from exploration to active mining of its hard-rock
lithium project located in the state of Minas Gerais in Brazil at a
well-known lithium-bearing pegmatitic district, which has been
denominated by the government of Minas Gerais as "Lithium Valley."
Atlas Lithium said, "We have historically incurred net operating
losses and have not yet generated material revenues from the sale
of products or services. As a result, our primary sources of
liquidity have been derived through proceeds from the (i) sales of
our equity and the equity of one of our subsidiaries, and (ii)
issuance of convertible debt. As of March 31, 2024, we had cash
and cash equivalents of $17,729,465 and working capital of
$11,280,122, compared to cash and cash equivalents $29,549,927 and
a working capital of $24,044,931 as of December 31, 2023. We
believe our cash on hand will be sufficient to meet our working
capital and capital expenditure requirements for a period of at
least twelve months. However, our future short- and long-term
capital requirements will depend on several factors, including but
not limited to, the rate of our growth, our ability to identify
areas for mineral exploration and the economic potential of such
areas, the exploration and other drilling campaigns needed to
verify and expand our mineral resources, the types of processing
facilities we would need to install to obtain commercial-ready
products, and the ability to attract talent to manage our different
areas of endeavor. To the extent that our current resources are
insufficient to satisfy our cash requirements, we may need to seek
additional equity or debt financing. If the needed financing is
not available, or if the terms of financing are less desirable than
we expect, we may be forced to scale back our existing operations
and growth plans, which could have an adverse impact on our
business and financial prospects and could raise substantial doubt
about our ability to continue as a going concern."
BRASKEM SA: Fitch Affirms 'BB+' LongTerm IDR, Outlook Negative
--------------------------------------------------------------
Fitch Ratings has affirmed Braskem S.A.'s Local and Foreign
Currency Issuer Default Ratings (IDRs) at 'BB+' and National Scale
at 'AAA(bra)'. They have been removed from Rating Watch Negative
and the IDRs and National Scale assigned a Negative and Stable
Outlook, respectively. In addition, Fitch has affirmed Braskem
America Finance's, as well as Braskem Netherland Finance B.V.'s
senior unsecured and subordinated bonds at 'BB+' and at 'BB-',
respectively, and removed them from RWN.
The ratings were removed from RWN given its expectation that
Braskem will not incur additional cash disbursements after the
recommendations from the Senate's inquiry on the geological event
of Alagoas. The Negative Outlook indicates its expectation that
petrochemical spreads will remain below mid-cycle conditions,
causing leverage to be above its triggers longer than anticipated.
The combination of tightened margins with additional non-recurring
cash disbursements not accounted for on its base case scenario,
could result in a negative rating action.
KEY RATING DRIVERS
Prolonged Petrochemical Sector Downturn: The industry faces
unprecedented adversities due to a slow global economy, uncertain
geopolitical events and excess production. With China's heavy
investments altering the balance, the market is oversupplied,
leading to continuously low or even negative profit margins. This
threatens the viability of numerous facilities, especially in Asia
and Europe, where costs are high. Spreads could remain tightened
until 2027, deterring new investments, and as supply growth
outpaces demand, the industry will be pressured to consolidate and
rationalize.
Medium-Term Leverage Above Triggers: In this scenario, Fitch
forecasts net leverage, excluding Braskem Idesa, of about 4.5x in
2024 and 2025. As spreads improve slightly, despite remaining below
mid-cycle conditions, Fitch expects leverage to decrease to about
3.5x in the following years. Braskem needs to preserve cash and
reduce debt, which can be done by postponing strategic investments,
reducing costs and optimizing working capital, or by divesting
non-core business.
FCF Constrained by Non-Recurring Cash Outlays: Braskem's operating
cash flows remained positive despite compressed spreads, but
payments provisioned for the geological event in Alagoas and the
leniency agreement will still affect FCF in 2024 and 2025. In its
base case scenario, consolidated EBITDA, should range between BRL
7.0 and BRL 8.0 Billion (USD 1.4 USD 1.6 Billion), while interest
will increase because of the company's strategy of increasing cash
balance by issuing debt to sustain strong liquidity.
Fitch assumed annual maintenance capex of approximately BRL 2.0
billion (USD 400 million) with an additional BRL 1.0 billion (USD
200 Million) this year to finalize the construction of the Ethane
Terminal in Mexico, all of which combined with the non-recurring
disbursements, resulted in negative FCF of BRL 4.0 billion and BRL
1.1 billion, respectively. Fitch did not consider any additional
provision for Alagoas going forward.
Solid Business Profile: Braskem continues to have a leading market
position with robust operations throughout the globe, conferring
important competitive advantages, such as cost leadership,
feedstock diversification and autonomy to any specific economic
segments. It lies on the second quartile of the global
petrochemical cost curve and is a reference in sustainable
developments, being the first company to produce green PE.
Fitch acknowledges that the petrochemical sector is highly volatile
and that Braskem possesses the resilience and strategic capability
to manage its challenges effectively. In its projections, a 2.5%
change in PE and PP average prices, keeping everything else
constant, could result in a 1.0x change in net leverage.
DERIVATION SUMMARY
Braskem's leading position in the Americas in its core products, PE
and PP, is a key credit strength, mitigating the commodity nature
of its products, which are characterized by volatile raw material
prices and price-driven competition. Braskem has medium scale
compared with global chemical peers, such as Dow Chemical Company
(BBB+/Stable) and Westlake Corporation (BBB/Stable), but it is well
positioned relative to Latin American peers, such as Orbia Advance
Corporation, S.A.B de C.V. (BBB/Stable) and Alpek, S.A.B. de C.V.
(BBB-/Stable), in terms of scale and geographic diversification.
Around 35% of Braskem's EBITDA was generated outside Brazil in the
past 6 years and the company has strong local market share,
allowing them to better withstand higher raw material prices and
commercial strategies.
Braskem's leverage, excluding Braskem Idesa, under Fitch's base
case is expected to be around 4.5x in 2024 and 2025, but reduce
close to 3.5x in the following years. This is higher than
petrochemical peers, such as Orbia's at 3.0x, Alpek's at 2.0x and
Westlake's at 0.7x. All of these players maintain strong cash
positions, long-term debt-amortization profiles, and strong access
to local and international debt markets.
Westlake's higher degree of cyclical exposure relative to its
larger, more integrated peers highlight the company's need to
operate with lower levels of leverage at a given rating category.
Nevertheless, it is the third-largest global chlor-alkali and PVC
producer, having added scale to its PVC resin and vinyl-based
building products through recent acquisitions. The company's
cost-advantaged feedstock and a generally strong pricing
environment led to historically stronger EBITDA margins than
Braskem.
KEY ASSUMPTIONS
- Brazil PE realized revenue of USD3.78 billion, USD4.13 billion
and USD4.5 billion during 2024-2026;
- Brazil PP realized revenue of USD2.04 billion USD 2.22 billion
and USD2.39 billion during 2024-2026;
- Brazil vinyls realized revenue of USD650 million, USD700 million
and USD820 million during 2024-2026;
- Brazil ethylene/propylene realized revenue of USD770 million,
USD1.15 billion and USD1.2 billion during 2024-2026;
- U.S. and Europe PP realized revenue of USD3.76 billion, USD3.77
billion and USD3.96 billion during 2024-2026;
- Mexico PE realized revenue of USD1 billion, USD1.13 billion and
USD1.360 billion during 2024-2026;
- PE-ethane reference spreads of USD860/ton in 2024, USD840/ton in
2025 and USD880/ton in 2026;
- PE-naphtha reference spreads of USD400/ton in 2024, USD400/ton in
2025 and USD480/ton in 2026;
- PP-propylene reference spreads of USD440/ton in 2024, USD440/ton
in 2025 and USD430/ton in 2026;
- PVC reference spreads of USD410/ton in 2024, USD410/ton in 2025
and USD460/ton in 2026;
- Annual maintenance Capex of approximately BRL 2.0 billion (USD
400 million) with additional BRL 1.0 billion (USD 200 million) to
finalize the Ethane terminal in Mexico in 2024;
- No dividends to shareholders during the analysis horizon.
RATING SENSITIVITIES
Factors that Could, Individually or Collectively, Lead to Positive
Rating Action/Upgrade
- Net debt/EBITDA below 2.5x on average through the cycle,
excluding Braskem Idesa;
- Sustained consolidated net debt of less than USD5 billion on
average through the cycle.
Factors that Could, Individually or Collectively, Lead to Negative
Rating Action/Downgrade
- Additional material contingent claims for the geological event in
Alagoas;
- Net debt/EBITDA above 3.5x, on average through the cycle,
excluding Braskem Idesa;
- Sustained negative FCF at the bottom of the cycle that results in
incurring additional debt;
- Sustained EBITDA interest coverage below 1.0x;
- Material financial support to Braskem Idesa.
LIQUIDITY AND DEBT STRUCTURE
Adequate Liquidity: Braskem adopts a conservative financial
strategy to limit the risks associated with its exposure to the
cyclical and capital-intensive nature of the petrochemical
business. The company has a strong cash position, with
USD3.3billion of readily available cash and marketable securities
as of March 31, 2024, excluding Braskem Idesa (USD357 million).
Gross debt, excluding Braskem Idesa, stands at USD8.5 billion,
USD277 million of which is due in 2024 and USD132 million in 2025.
The company's financial flexibility is enhanced by a USD1 billion
unused revolving credit facility due in 2026. Fitch expects Braskem
to remain committed to preserving its liquidity by maintaining a
conservative dividend policy particularly while leverage is above
2.5x. The company has the ability to reduce capex and fixed costs,
optimize working capital and monetize tax credits if market
conditions remain worse than anticipated in 2024.
ISSUER PROFILE
Braskem S.A. produces and sells chemicals, petrochemicals, fuels,
steam, water, compressed air and industrial gases. The company has
plants in Brazil, the U.S., Germany and Mexico that produce
thermoplastic resins, such as polyethylene, polypropylene and
polyvinyl chloride.
MACROECONOMIC ASSUMPTIONS AND SECTOR FORECASTS
Fitch's latest quarterly Global Corporates Macro and Sector
Forecasts data file which aggregates key data points used in its
credit analysis. Fitch's macroeconomic forecasts, commodity price
assumptions, default rate forecasts, sector key performance
indicators and sector-level forecasts are among the data items
included.
ESG CONSIDERATIONS
Braskem has an ESG Relevance Score of '4' for Waste & Hazardous
Materials Management, revised from '5', due to the operations'
disruption and large cash outflows triggered by the geological
event in Alagoas. This has a negative impact on the credit profile,
and is relevant to the ratings in conjunction with other factors.
Braskem S.A. has an ESG Relevance Score of '3' for Exposure to
Environmental Impacts, revised from '5', because the rating is more
affected by the cash outflows linked to the geological events
covered in the preceding paragraph, rather than by direct physical
impacts resulting from climate change.
Braskem S.A. has an ESG Relevance Score of '4' for Human Rights,
Community Relations, Access & Affordability, revised from '2', due
to the reparation costs incurred following the geological event in
Alagoas, to relocate over 14,000 families from neighboring areas.
This has a negative impact on the credit profile, and is relevant
to the ratings in conjunction with other factors.
Braskem S.A. has an ESG Relevance Score of '3' for Exposure to
Social Impacts, revised from '5', because the rating is affected
more significantly by the financial consequences of indemnification
of harmed local communities covered in the preceding paragraph,
rather than by the social resistance or pressure.
Braskem S.A. has an ESG Relevance Score of '3' for Governance
Structure, revised from '4', because the company has improved its
practices and has been compliant with regulators since the car-wash
probe.
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
----------- ------ -----
Braskem Netherlands
Finance B.V.
senior unsecured LT BB+ Affirmed BB+
subordinated LT BB- Affirmed BB-
Braskem America
Finance Company
senior unsecured LT BB+ Affirmed BB+
Braskem S.A. LT IDR BB+ Affirmed BB+
LC LT IDR BB+ Affirmed BB+
Natl LT AAA(bra)Affirmed AAA(bra)
senior unsecured Natl LT AAA(bra)Affirmed AAA(bra)
BRAZIL: Federal Revenue Has 11% Year-on-Year Increase in May
------------------------------------------------------------
Richard Mann at Rio Times Online reports that in May, Brazil's
federal revenue experienced an 11% year-over-year increase,
adjusted for inflation, up from April's 8.3% rise, as reported by
BTG bank.
The Treasury encountered delays in tax payments from companies in
Rio Grande do Sul, according to Rio Times Online.
BTG forecasts a significant May deficit of R$58.1 billion ($10.92
billion). This amount far exceeds Prisma Fiscal's prediction of
R$38.5 billion ($7.24 billion), the report notes.
It includes R$6.7 billion ($1.26 billion) in special credits for
Rio Grande do Sul and R$9.4 billion ($1.77 billion) for
parliamentary amendments, the report relays.
Rio Times Online discloses that rising social security costs also
contribute to the deficit. BTG's revised social security expenses
now total R$915 billion ($171.99 billion).
This surpasses the government's R$897.2 billion ($168.69 billion)
estimate, the report relays. Strong Individual Income Tax
collections drove this increase, the report notes.
May's federal revenue reached R$203.8 billion ($38.31 billion), the
report discloses. A notable 45% growth in this tax segment was
fueled by taxing offshore fund stocks, the report says.
Despite these gains, BTG projects a 2024 deficit at 0.6% of GDP,
about R$67 billion ($12.59 billion), the report notes.
For 2025, the outlook worsens, predicting a 0.7% GDP deficit,
roughly R$89 billion ($16.74 billion), the report discloses.
April's floods in Rio Grande do Sul led to R$1.6 billion ($0.30
billion) in deferred federal tax payments, the report says. This
deferral adds complexity to the national financial scene, the
report notes.
The Brazilian government aims to eliminate the public accounts
deficit, the report relays.
Nevertheless, the Treasury admits that excluding Rio Grande do
Sul's issues, fiscal outcomes might have been closer to initial
expectations, the report discloses.
This scenario highlights the fragile balance between rising
revenues and widening deficits, the report notes.
The government's efforts to sustain fiscal stability face many
challenges, the report says. Therefore, the Treasury remains
cautious about future projections, 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).
COMPASS GAS: Fitch Affirms 'BB' LongTerm IDR, Outlook Stable
------------------------------------------------------------
Fitch Ratings has affirmed Compass Gas e Energia S.A.'s (Compass)
Long-Term Foreign and Local Currency Issuer Default Ratings (IDRs)
at 'BB'. Fitch has also affirmed the National Scale Rating of
Compass and its unsecured debenture issuance at 'AAA(bra)'. The
corporate Ratings Outlook is Stable.
Compass' ratings reflect its linkage with parent Cosan S.A. (Cosan;
Foreign and Local Currency IDRs BB/Stable; and Long-Term National
Scale Rating AAA(bra)/Stable) as per application of Fitch's Parent
and Subsidiary Linkage Rating Criteria that resulted in equalizing
their ratings. Fitch believes that, due to Cosan's indirect 67.6%
ownership and shareholder structure, the parent has control on
Compass' decisions and strong influence over Compass' financial
policies, including prioritizing dividends.
Fitch views Compass' Standalone Credit Profile (SCP) higher than
Cosan's based on its robust business profile in the natural gas
industry, primarily supported by its controlling ownership of
Companhia de Gas de Sao Paulo - COMGAS (COMGAS; Foreign Currency
IDR BB+/Stable; Local Currency IDR BBB-/Stable and Long-Term
National Scale Rating AAA(bra)/Stable). Compass benefits from a
strong flow of dividends from COMGAS, with a low net
debt-to-dividends ratio.
KEY RATING DRIVERS
Linkage to Cosan: Fitch equalizes Compass and Cosan's ratings based
on the Parent and Subsidiary Linkage Criteria. Compass is an
intermediate holding company controlled by Cosan. There is also
limited legal ring-fencing to protect Compass from its weaker
parent. Cosan has unlimited ability to influence Compass' financial
policies such as dividends, capex and leverage.
Strong Gas Distribution Subsidiary: Compass' key subsidiary,
COMGAS, provides robust dividends upstream to the company, which
supports its low leverage. Compass also benefits from asset
diversification in the natural gas industry, through other
distributors, and from gas trading. The company also operates
infrastructure of regasification and storage of natural gas and
develops project to produce biomethane.
Fitch views Compass' SCP as weaker than COMGAS's, as the latter is
a natural gas distributor with solid credit profile and subject to
regulatory and debt restrictions that limit Compass' access to its
cash only through dividends. COMGAS's business profile is solid as
the largest company in this sector in Brazil, with operations in
the state of Sao Paulo, which is economically the most important in
the country.
Manageable Industry Risk: Compass' exposure to the natural gas
distribution industry with manageable business risk and relevant
growth potential is a positive credit consideration. Natural gas
distributors operate under long-term concession contracts with cost
pass-through mechanisms that protect their cash flows and improve
predictability, despite moderate demand volatility. Gas supply
risks are likely to be manageable as Petroleo Brasileiro S.A.
(Petrobras; BB/Stable) faces competition that may reduce its
condition as the main supplier in Brazil. Natural gas distribution
operations should contribute to around 85% of Compass' consolidated
EBITDA through 2025, with around 85% from COMGAS.
Sound Financial Structure: Compass' consolidated financial profile
should remain conservative in the next three years with net
leverage below 2.5x under assumption of asset sale conclusion on
minority ownership on five natural gas distributors and no
acquisitions. Fitch estimates Compass' consolidated EBITDA in 2024
at BRL3.8 billion, with gradual increase to BRL4.2 billion by 2026,
underpinned by development of operations on the subsidiaries of
Commit Gas S.A., Sulgas and activities in the natural gas
commercialization and regasification both under rum-up. At the
holding level, the net debt-to-dividends received should be low and
peaking at 2.2x in the next years.
Strong Cash Flow Generation: Fitch forecasts consolidated cash flow
from operations (CFFO) in 2024 of BRL2.8 billion, resulting in
negative FCF of BRL2.4 billion, that incorporates estimated of
aggressive upstream of resources of BRL4.0 billion and capex around
BRL2.7 billion, mainly at COMGAS. Compass' consolidated CFFO is
expected to average BRL3.0 billion annually in 2025-2026, and capex
BRL2.2 billion on annual average. At the holding level, Fitch's
base case assumes that dividends coming from COMGAS, Commit and
Sulgas will service debt at Compass and all excess cash
upstreamed.
DERIVATION SUMMARY
Compass' ratings are influenced by its ownership structure and
operating environment when compared to Latin America peers in the
power and natural gas sectors. The company's SCP evens with
Energisa S.A.'s 'BB+' Long-Term Local Currency IDR/Stable, a
holding company with diverse operating subsidiaries mainly in the
power distribution segment in Brazil. Energisa has solid growth
potential through its subsidiaries and above average performance
compared with its main peers in the segment, and should maintain a
moderate leverage. Fitch expects Compass to gradually increase its
portfolio diversification while maintaining a conservative
financial profile.
Compass also compares similarly with UGI International, LLC's
(UGII; BB+/Stable) ratings that reflect its leading market position
as a liquified petroleum gas (LPG) distributor in Europe, and a
business model that is supported by customer and supplier
diversification and net leverage levels estimates of around 3.0x.
Compass SCP assessment is below GNL Quintero S.A.'s (GNLQ;
A-/Stable), which owns and operates the largest liquefied natural
gas regasification terminal in Chile, despite GNLQ operating a
single asset under expectation of higher leverage metrics through
the rating horizon. GNLQ is based on a country with a better
operating environment.
KEY ASSUMPTIONS
- COMGAS's total volume billed (excluding the thermo power
generation segment) growth by 1.6% in 2024 and annual average
increase of 1.9% thereafter;
- COMGAS's annual contribution margin increases in line with
Fitch's inflation estimates;
- Compass's annual dividend distribution to Cosan of BRL2.0 billion
on average in 2024-2026.
RATING SENSITIVITIES
Factors that could, individually or collectively, lead to positive
rating action/upgrade:
- An upgrade of Cosan's ratings;
- A change of Fitch's perception about Access and Control and Legal
Ring Fencing between the company and its shareholder.
Factors that could, individually or collectively, lead to negative
rating action/downgrade:
- A downgrade of Cosan's ratings;
- A downgrade of COMGAS's ratings by more than two notches;
- A lower country ceiling may also trigger a downgrade of Compass'
Foreign Currency IDR.
LIQUIDITY AND DEBT STRUCTURE
Adequate Liquidity: Compass' sound consolidated cash balance of
BRL7.4 billion at March 31, 2024 should decline after expected
upstream of liquidity to shareholders in 2024. Fitch estimates the
company to distribute dividends of around BRL1.0 billion on average
annually thereafter and sustain strong liquidity balance of around
BRL4.0 billion-5.0 billion going forward. Total adjusted debt at
the holding by March 31, 2024 of BRL4.4 billion was low as compared
to the expected upstream flow of dividends of around BRL2.0 billion
on annual average for the next three years.
Compass holding debt includes guarantee of BRL710 million debt at a
subsidiary level. Its consolidated adjusted debt registered
lengthened amortization schedule and totaled BRL13.3 billion, with
BR8.1 billion in debentures and BRL2.9 billion of Brazilian
Development Bank loans, mostly allocated to COMGAS.
ISSUER PROFILE
Compass is a non-operating subsidiary controlled by Cosan and
responsible for developing the group's activities within the
natural gas industry in Brazil. Compass is strategically focused on
distribution, regasification infrastructure and non-directional
trading of natural gas.
MACROECONOMIC ASSUMPTIONS AND SECTOR FORECASTS
Fitch's latest quarterly Global Corporates Macro and Sector
Forecasts data file which aggregates key data points used in its
credit analysis. Fitch's macroeconomic forecasts, commodity price
assumptions, default rate forecasts, sector key performance
indicators and sector-level forecasts are among the data items
included.
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
----------- ------ -----
Compass Gas e
Energia S.A. LT IDR BB Affirmed BB
LC LT IDR BB Affirmed BB
Natl LT AAA(bra)Affirmed AAA(bra)
senior
unsecured Natl LT AAA(bra)Affirmed AAA(bra)
YINSON BORONIA: Fitch Rates $1.035BB Secured Notes 'BB+'
--------------------------------------------------------
Fitch Ratings has assigned final ratings and Rating Outlooks to
Yinson Boronia Production B.V.'s senior secured notes as follows:
- $1.035 billion Senior Secured Notes 'BB+'; Outlook Stable.
TRANSACTION SUMMARY
The proceeds of this transaction were used to refinance the
original funding of the floating-production storage and offloading
(FPSO) unit, Anna Nery, which operates in the Marlim Field in the
post-salt layer of the Campos Basin, off Brazil. The transaction is
backed by a first-priority mortgage on the vessel and cash flows
from the underlying charter agreement between Yinson Boronia
Production B.V. (SPV), as owner and issuer, and Petroleo Brasileiro
S.A. (Petrobras, BB/Stable), as offtaker. The agreement is in place
until April 2048.
Additionally, Fitch expects that within 60 days of repayment of the
original debt the issuer will release the liens on the collateral
securing the existing obligations and perfect the collateral of
this transaction's notes. This timeline can be further extended by
an additional 60 days if the issuer injects equity into the
transaction in an amount equal to the first interest payment.
The first interest payment (first principal payment is due in
January 2025) on the notes will occur in July 2024 in order to
align Yinson's fiscal year end in January with semi-annual
principal and interest payments on the notes. In case the
collateral is not released and perfected within 60 days, either
equity or note proceeds will be used to make this payment. The
financial structure considers a fully amortizing transaction.
Fitch's rating addresses the timely payment of interest and timely
payment of principal on a semiannual basis until legal final
maturity in July 2042.
KEY RATING DRIVERS
Offtaker Obligation Strength Exceeds Petrobras' IDR: The offtaking
party in the charter agreement is Petrobras, the state-owned oil
company of Brazil. Fitch rates Petrobras in line with the Brazilian
sovereign (BB/Stable). The charter contract between the operator
and an offtaker of an FPSO is considered to be a strategic
long-term contract to produce hydrocarbons in a specific area, as
FPSOs are built to suit. The contract's long-term nature (25
years), the low cost against cash flow generation, and the
complexity of the vessel make the contract and use of the vessel
highly strategic to Petrobras.
Even under distressed environments, these contracts and obligations
are likely to be honored and can be differentiated from other
corporate debt obligations. The charter contract may be considered
an operational/net revenue cost to Petrobras to continue business
operations and produces low break-even cash flow generation. For
these reasons, Fitch determines the strength of the offtaker's
payment obligation to be one-notch above Petrobras' credit quality
at 'BB+'.
Sovereign Event Risk; Transfer and Convertibility (T&C) Mitigated:
The transaction's reserve account of six months of debt service and
offshore payment obligations offer sufficient protection to
mitigate potential transfer and convertibility (T&C) restrictions
and exceed Brazil's Country Ceiling of 'BB+' by one notch.
However, event risk is linked to the operating environment, with
Petrobras as a state-owned enterprise, potentially subject to
political interference, limiting the uplift over Brazil's Long-Term
IDR to two notches, and therefore 'BBB-'. The transaction's current
limiting factor is Fitch's assessment of the strength of the
offtaker's payment obligation, which is assessed at 'BB+'.
Experienced Operator Mitigates Risk: The operator, Yinson
Production, is a global player in building and managing FPSOs and
operates in Brazil, Ghana, Vietnam, Nigeria, and Malaysia. Yinson
entered the Brazil market four years ago and has two vessels
contracted to come online in the next several years. A bankruptcy
of Yinson could expose the transaction to a potential termination
of the underlying charter and services agreement. Fitch assesses
Yinson's credit quality to be near investment grade and as a
result, Yinson does not limit the transaction's rating.
Strong Financial Metrics: Fitch's cash flow analysis has assessed
the repayment of the fully amortizing debt, assuming timely
interest and principal payments under a nondeferrable sculpted
amortization schedule and a cash trapping condition should the debt
service coverage ratio (DSCR) fall below 1.15x. Fitch's base case
expects the DSCR to be between 1.27x-1.29x, which is in line with
investment grade metrics and does not pose a constraint to the
transaction's rating. At the 'BB' stress case it drops to
1.10x-1.17x, which remains sufficient for to support the rating.
RATING SENSITIVITIES
Factors that Could, Individually or Collectively, Lead to Negative
Rating Action/Downgrade
- As described in Key Rating Drivers, the rating of the transaction
is linked to Petrobras' IDR, with an uplift of one notch.
Therefore, a Petrobras downgrade could trigger a downgrade of the
notes. Both ratings are currently on a Stable Outlook.
- The other counterparty that could constrain the rating is the
operator, whose credit quality is assessed to be near investment
grade and as a result, does not limit the rating but could pose a
constraint should the credit quality deteriorate.
- Finally, the cash flow analysis results in a sufficient output,
consistent with ratings in the 'BBB' category and does not
currently pose a constraint to the transaction rating. Although the
DSCR and ultimate debt repayment depend on uptime, maintenance
days, opex and CPI, none of these variables is likely to materially
affect the rating under Fitch's stress case.
- Any changes in these variables will be analyzed in a rating
committee to assess the possible impact on the transaction rating.
Factors that Could, Individually or Collectively, Lead to Positive
Rating Action/Upgrade
- The rating is influenced by transaction counterparties, the
operating environment and credit metrics. An upgrade of Brazil
(which would likely also result in an upgrade of Petrobras) or an
upgrade of the operator may result in an upgrade of the transaction
rating. However, Fitch does not anticipate such a scenario as the
rating has a Stable Outlook.
CRITERIA VARIATION
The rating assigned is one notch above the offtaker's IDR.
According to Fitch's "Oil Vessel-Backed Financing Rating Criteria"
when determining the strength of the offtaker's payment obligation
for sole-offtaker transaction, the strength of the offtaker's
obligation is typically equalized or notched down from the
offtaker's IDR.
However, in this case, Fitch considers the strategic importance of
the charter contract to Petrobras and very favorable economics when
determining the strength of the obligation. For this transaction,
Fitch believes the strength of the offtaker's payment obligation is
equivalent to one notch above Petrobras' IDR and equivalent to a
'BB+', as such this is treated as a criteria variation.
USE OF THIRD PARTY DUE DILIGENCE PURSUANT TO SEC RULE 17G -10
Form ABS Due Diligence-15E was not provided to, or reviewed by,
Fitch in relation to this rating action.
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.
===========================
C A Y M A N I S L A N D S
===========================
GFH SUKUK: Fitch Affirms 'B' Rating on USD500MM Sukuk Due 2025
--------------------------------------------------------------
Fitch Ratings has affirmed Bahrain-based GFH Financial Group BSC's
(GFH) Long- and Short-Term Issuer Default Ratings (IDR) at 'B'. The
Outlook on the Long-Term IDR is Stable.
Fitch has also affirmed the senior unsecured long-term rating of
the USD500 million sukuk due 2025 issued through GFH Sukuk Company
Limited (GFH SCL) at 'B' with a Recovery Rating of 'RR4'. GFH SCL
is a special-purpose vehicle, incorporated in the Cayman Islands.
GFH SCL was established solely to issue certificates (sukuk).
KEY RATING DRIVERS
Concentrated Risk Profile: GFH's Long-Term IDR reflects its
exposure to illiquid or lower-rated investments, primarily related
to real estate (around 22% of total assets at end-2023 comprise
real estate investments and co-investments as well as sukuk issued
by real estate affiliate Infracorp B.S.C.(c)), increasing their
valuation risks. The rating also considers GFH's niche franchise in
Bahrain as an Islamic wholesale investment bank and majority owner
of Khaleeji Bank BSC (Khaleeji; unrated), and management's strategy
to develop more stable fee-based revenue streams.
Low-Rated Operating Environment: GFH is incorporated and regulated
in Bahrain (B+/Stable), with further activities across the MENA
region. Khaleeji's business is entirely domestic. Bahrain's
sovereign rating does not directly cap GFH's Long-Term IDR, but at
its current level it limits upgrade potential.
Real Estate Investment Risks: Management has been pursuing a
strategy to reduce volatility in GFH's business model by disposing
of illiquid real estate investments and increasing recurring income
from investment management and treasury activities. In 2022, GFH
carved out a substantial portion of its real estate development
assets into a separate legal entity, Infracorp, which is no longer
consolidated.
In Fitch's view, GFH's exposure to Infracorp remains considerable
(through a 40% equity stake and a sizeable investment in
Infracorp's USD900 million perpetual green sukuk issued in March
2022). Infracorp's focus on managing these development assets could
lead to enhanced monetisation and GFH has received sizeable cash
distributions from Infracorp over the past two years (2023: USD36
million; 2022: USD18 million). GFH retains further direct property
investments on its own balance sheet and illiquid investments
depress the return on average assets, which was 1.0% in 2023 (2022:
1.1%).
Investment Management Growth Targeted: Investment banking
activities have been a significant contributor to GFH's net profit
in recent years, mainly through activity fees. These can make
earnings volatile, as they depend on individually significant deal
placements and investment exits, and management plans to grow fees
from private equity and income-yielding real-estate investments as
a more recurring source of revenues. GFH has increased fee-earning
assets under management (FAUM) to around USD9.9 billion from USD7.8
billion at end-2022. However, GFH's overall business profile also
benefits from the banking activities conducted via its majority
stake in Khaleeji.
In Fitch's view, management's aim of continuing to grow FAUM,
notably through inorganic growth targeted at the US and UK markets,
could enhance revenue consistency over the medium term. Management
has established a subsidiary, GFH Partners, to develop
income-yielding real estate investments, including the recent
acquisitions Roebuck Asset Management in the UK and Student
Quarters Asset Management and Big Sky Asset Management in the US,
and started a new business line, Private Credit and Debt Markets,
to cater for growing investor appetite for this asset class.
Banking Activities Increase Stability: Khaleeji is a growing
contributor to GFH's revenue and net profit and provides a source
of more stable income as an Islamic bank offering commercial and
retail services. Following a balance sheet clean-up exercise in
recent years, Khaleeji's asset quality has been gradually
improving. GFH's own treasury activities are largely focused on
government and quasi-government debt, with a smaller allocation to
structured notes, and enhance balance sheet liquidity. However,
treasury investments in lower-rated jurisdictions could weigh on
valuation stability.
Adequate Capitalisation: GFH's wholesale banking licence means it
is regulated for capital and liquidity by the Central Bank of
Bahrain. Capitalisation appears adequate with a common equity Tier
1 (CET1) ratio of 19.74% at end-2023 (Khaleeji's CET1 ratio was
19.04% at end-2023).
Adequate Liquidity: GFH's liquidity coverage ratio and net stable
funding ratio are above regulatory requirements at 233% and 148%,
respectively. In Fitch's view, GFH remains exposed to longer-term
liquidity risk, given the high proportion of less liquid assets it
continues to hold alongside its treasury investments, and the lack
of fungibility of both capital and liquidity between the parent
entity and Khaleeji as a separately regulated subsidiary.
RATING SENSITIVITIES
Factors that Could, Individually or Collectively, Lead to Negative
Rating Action/Downgrade
Material reduction in GFH's regulatory capital headroom, for
example, via significant impairment of its unlisted investments.
Reduced investor appetite for GFH as a deposit-taker or asset
manager, negatively impacting its liquidity or fee income and
increasing the reliance of its cash generation on illiquid assets.
A deterioration in the Bahrain operating environment, giving rise
to significant asset-quality problems within Khaleeji, losses in
GFH's own treasury activities or to lower demand for GFH's other
investment banking services.
Factors that Could, Individually or Collectively, Lead to Positive
Rating Action/Upgrade
Increased revenue stability by generating a materially greater
proportion of recurring income. This would be likely to require
further development of GFH's asset management business and reduced
exposure to real estate investments via Infracorp.
Improvements in the macroeconomic condition of GFH's key operating
environments, supporting investment banking demand and investment
exit multiples.
DEBT AND OTHER INSTRUMENT RATINGS: KEY RATING DRIVERS
Senior Unsecured Debt
The USD500 million 2025 certificates issued through GFH SCL are
rated 'B'/'RR4'. GFH SCL is a special-purpose vehicle, incorporated
in the Cayman Islands as a trust for charitable purposes, with its
share capital held by Walkers Fiduciary Limited. GFH SCL was
established solely to issue certificates (sukuk). The US dollar
certificates' ratings are driven solely by GFH's 'B' Long-Term IDR.
This reflects Fitch's view that a default of these senior unsecured
obligations would reflect a default of GFH in accordance with
Fitch's rating definitions. The Recovery Rating of 'RR4' reflects
Fitch's expectation of average recoveries in the event of a
default.
DEBT AND OTHER INSTRUMENT RATINGS: RATING SENSITIVITIES
GFH SCL's sukuk rating is principally sensitive to changes in GFH's
IDR. The ratings could also be sensitive to changes to the roles
and obligations of GFH under the sukuk's structure and documents.
ADJUSTMENTS
The Standalone Credit Profile has been assigned in line with the
implied Standalone Credit Profile.
The funding, liquidity & coverage score of 'b' is above the 'ccc'
category implied score due to the following adjustment reason:
liquidity coverage.
REPORT OF ISSUER'S APPEAL
The issuer appealed the decision of the original rating committee.
In accordance with Fitch Ratings' policies, the issuer's request
was reviewed by an appeal review panel, which determined that an
appeal committee was not warranted due to insufficient new
information. Therefore, the outcome of the original committee, as
detailed within this rating action commentary, was not affected.
ESG CONSIDERATIONS
As an Islamic bank, GFH needs to ensure compliance of its entire
operations and activities with sharia principles and rules. This
entails additional costs, processes, disclosures, regulations,
reporting and a sharia audit which results in a Governance
Structure Relevance Score of '4', which has a negative impact on
the entity's credit profile in combination 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
----------- ------ -------- -----
GFH Financial
Group BSC LT IDR B Affirmed B
ST IDR B Affirmed B
GFH Sukuk Company
Limited
senior unsecured LT B Affirmed RR4 B
===============
C O L O M B I A
===============
BANCOLOMBIA SA: Moody's Rates New USD Tier 2 Sub. Notes 'Ba3(hyb)'
------------------------------------------------------------------
Moody's Ratings has assigned a Ba3 (hyb) rating to the proposed
USD-denominated Tier 2 subordinated debt with point of
non-viability loss absorption feature to be issued by Bancolombia
S.A. The proposed issuance is intended to qualify as Tier 2 capital
under Colombia's regulatory framework.
The rating is subject to the receipt of final documentation, the
terms and conditions of which are not expected to change in any
material way from the draft documents that Moody's has reviewed.
RATINGS RATIONALE
The Ba3 (hyb) rating assigned to the proposed subordinated notes
reflects (1) Bancolombia's Baseline Credit Assessment (BCA) and
Adjusted BCA of ba1; (2) Moody's standard notching guidance for
contractual non-viability subordinated debt with a full or partial
principal write-down triggered at or close to the point of
non-viability, resulting in a two-notch downward adjustment from
the bank's Adjusted BCA; and (3) Moody's assumption of a low
probability of government support for loss-absorbing instruments,
resulting in no uplift.
While Moody's assesses the probability that Bancolombia will
receive support from the Government of Colombia (Colombia, Baa2
stable) in a stressed situation as very high given the bank's large
market share of domestic deposits, this support only applies to the
bank's deposit and senior unsecured debt ratings. Moody's does not
expect that Tier 2 securities - which are designed to absorb losses
- will benefit from government support.
Bancolombia's ba1 BCA reflects the bank's strong and above-peers
earnings generation and its continued ample access to stable core
funding, which is supported by its well-established market position
in Colombia. These strengths are counterbalanced by the bank's high
level of impaired loans, albeit cushioned by a strong volume of
loan loss reserves; moderate capitalization metrics and holdings of
liquid assets; and its exposure to riskier operating environments
in countries of Central America, which has a negative effect over
the Macro Profile.
Bancolombia has reported strong earnings through 2023 and the first
quarter of 2024, despite challenging operating conditions. In the
first quarter of 2024, net income to tangible assets stood at 2.0%,
almost flat compared to 2023, remaining well above other large
banks in Colombia. The bank has a steady access to domestic and
foreign currency funding, particularly supported by a sizeable
low-cost core deposit base, which benefits its high interest
margins and has helped to offset the high loan loss provisioning
cycle. Moody's expect Bancolombia will continue to maintain
adequate profitability levels, despite pressures on margins coming
from easing interest rates combined with high credit costs.
Problem loans, measured as Stage 3 loans under IFRS, stood at 6.0%
in March 2024, with a reserve coverage of 104%, which protects the
bank's capital position. The bank's tangible common equity to
adjusted risk-weighted assets metric fell to 9.5% in March 2024,
from 10.5% in year-end 2023 as a result of the dividend that the
bank paid in the first quarter of 2024, although the metric
remained above the 8.9% of March 2023.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATING
The Ba3 (hyb) rating assigned to the proposed Tier 2 securities
will move in line with the bank's BCA and adjusted BCA, both
currently positioned at ba1. Upward pressure on the bank's BCA
would stem from an improvement in its credit fundamentals,
particularly in asset quality and capital, coupled with an
improvement of Colombia's operating environment.
Conversely, downward pressure on Bancolombia's Tier 2 securities
rating would arise from a downgrade of its BCA, which could stem
from the bank's intrinsic credit fundamentals to deteriorate
unexpectedly, especially if capital metrics tick lower or if asset
quality deterioration is more material than expected, pressuring
earnings and ultimately capital.
The principal methodology used in this rating was Banks Methodology
published in March 2024.
BANCOLOMBIA: Fitch Gives BB-(EXP) Rating on Upcoming USD Sub. Notes
-------------------------------------------------------------------
Fitch Ratings has assigned a 'BB-(EXP)' rating to Bancolombia
S.A.'s upcoming U.S. dollar subordinated notes for an amount and
tenor to be determined. Bancolombia will use the proceeds of the
issuance of the notes to replace a portion of the existing 2027
notes and for general corporate purposes.
The final debt issue rating is contingent upon receipt of final
documents confirming the information already received.
KEY RATING DRIVERS
The expected rating for the upcoming issuance is two notches below
Bancolombia's Viability Rating (VR) of 'bb+', to reflect loss
severity only. Fitch did not apply any notching for non-performance
risk. The notes only provide limited loss-absorption capacity, due
to their relatively low trigger for principal write-off (Regulatory
CET1 ratio at or below 4.5%). In Fitch's view, the trigger would
not go into effect early enough to prevent a non-viability event
for the bank.
The securities, which Fitch expects to comply with local Tier II
capital requirements, will rank pari passu with all other present
or future Tier Two Capital subordinated debt. They would be senior
in right of payment only to subordinated junior notes (there are
currently none outstanding), subordinated instruments constituting
Tier One Capital (also none outstanding) and paid-in common
capital.
Bancolombia's VR, or standalone creditworthiness, considers the
bank's robust company profile due to its leading market share
within the Colombian market and its adequate franchise in the
Central America region. The assessment also considers its sound
risk management and resilient financial performance amid the
challenging operating environment.
RATING SENSITIVITIES
Factors that Could, Individually or Collectively, Lead to Negative
Rating Action/Downgrade
- The subordinated debt ratings would be sensitive to a downgrade
of Bancolombia's VR.
Factors that Could, Individually or Collectively, Lead to Positive
Rating Action/Upgrade
- The subordinated debt ratings would mirror any positive action on
the bank's VR and would maintain the downward notching from it.
For further information about the drivers and rating sensitivities
for Bancolombia's VR and other issuer ratings, please see the
bank's latest press release " Fitch Affirms Bancolombia and Related
Entities' Ratings; Outlook Stable'; dated Nov. 29, 2023.
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
----------- ------
Bancolombia S.A.
Subordinated LT BB-(EXP) Expected Rating
===================
C O S T A R I C A
===================
AUTOPISTAS DEL SOL: Fitch Hikes Rating on International Notes to B+
-------------------------------------------------------------------
Fitch Ratings has upgraded the long-term rating assigned to
Autopistas del Sol, S.A.'s (AdS) international notes to 'B+' from
'B', and Long-term National Scale Rating on its local notes to
'A+(cri)' from 'A(cri)'. The Rating Outlook is Positive. The
international and local notes are supported by the cash flow
generation from Costa Rica's Ruta 27 toll road.
RATING RATIONALE
The upgrade on AdS's ratings reflects Fitch's expectation that
metrics in 2024 will significantly improve in comparison with past
years now that the project has completed the heavy capital
expenditures (capex) that were scheduled until 2023. Also, the
recent announcements made by officials from the National Road
Council (CONAVI) indicating that the improvements on the competing
road (Ruta Uno), will be further delayed until 2030, largely
reduces the risk of a traffic drop at Ruta 27, which has a positive
effect on projected cash flows and metrics.
The Positive Outlook reflects the expectation that the positive
traffic and revenue trend observed in 2023 and as of April 2024,
could continue in the future and support stronger financial metrics
that would be commensurate with a higher rating.
AdS's ratings reflect the asset's traffic and revenue profile as a
toll road that serves a strong reference market within Costa Rica
(Ruta 27), which is supported by an adequate toll adjustment
mechanism. Mostly used by commuters, the project may face
significant competition in the medium term once the main competing
road is improved, especially if its tariffs were set significantly
lower than those of Ruta 27.
Toll rates are adjusted quarterly to the exchange rate (CRC/USD)
and annually to reflect changes in the U.S. Consumer Price Index
(CPI), plus additional adjustments are applied whenever CPI or the
exchange rates varies more than 5% in absolute terms. The ratings
also reflect a fully amortizing senior debt structure with a fixed
interest rate and a net present value (NPV) cash trap mechanism
that prevents an early termination of the concession before debt is
fully repaid.
Fitch updated its cases to reflect the delay in the negative impact
on traffic that the completion of the improvements to the competing
road would be expected to have. The updated cases now consider
traffic could decrease in 2027 and 2029 (instead of 2025 and 2027
as in the past review).
Fitch's rating case now projects an average debt service coverage
ratio (DSCR) of 1.3x, which is strong for the rating category
according to Fitch's applicable criteria for projects with Midrange
assessments of volume and price risks. In this case, AdS would only
receive one payment from the Minimum Revenue Guarantee (MRG) in
2030, the final year of the debt, which is estimated to account for
8.3% of that year's revenues.
KEY RATING DRIVERS
Mostly Commuter with Growing Heavy Traffic [Revenue Risk - Volume:
Midrange]: The asset is a toll-road that serves a strong reference
market, playing an important role in the broader transportation
system as it serves as a link between San Jose (Costa Rica's
capital city) and its surrounding metropolitan area with the
Pacific Coast, and is used by commuters on workdays and by San Jose
residents traveling to the beaches on the weekends.
The road could face significant competition once major improvements
to the existing and congested San Jose-San Ramon Route are made.
The concession agreement provides an MRG that compensates the
issuer if revenue is below certain thresholds, somewhat alleviating
this risk.
Revenue Risk - Volume - Midrange
Adequate Rate Adjustment Mechanism [Revenue Risk - Price:
Midrange]: Toll rates are adjusted quarterly to reflect changes in
the Costa Rican Colon (CRC) to USD exchange rate, and annually to
reflect changes in the U.S. CPI. Tolls may be adjusted prior to the
next adjustment date if the U.S. CPI or the CRC/USD exchange rate
varies (+/-) by more than 5%. No tariff adjustments are applied
according to Costa Rican inflation; however, this exposure is
limited to the costs denominated in CRC which account for 20% of
total expenses. Historically, tariffs have been updated
appropriately.
Revenue Risk - Price - Midrange
Suitable Capital Improvement Program [Infrastructure Development &
Renewal: Midrange]: The asset is operated by an experienced global
company with a higher-than-average expense profile due to its
geographical attributes. The majority of the investments required
by the concession have been made, including the new viaduct which
is fully operational since October 2023.
The concession requires lane expansions when congestion exceeds 70%
of the ideal saturation flow, which triggers the need for further
investments. However, the project would only require the
concessionaire to perform these investments to the extent they do
not represent a breach in the DSCRs assumed by the issuer in the
financing documents.
Infrastructure Dev. & Renewal - Midrange
Structural Protections Against Shortened Concession [Debt
Structure: Midrange]: Debt is senior secured, pari passu,
fixed-rate, and fully amortizing. The debt is denominated in USD,
but no significant exchange rate risk exists due to the tariff
adjustment provisions set forth in the concession and because
CRC-denominated toll revenues will be converted to USD daily.
Notwithstanding, some exposure to Costa Rican inflation is present
as tariff adjustments follow U.S. inflation only.
The structure includes an NPV cash trap mechanism to prepay debt if
revenue outperforms the base case revenue indicated in the issuer's
financial model, which largely mitigates the risk of the concession
maturing before the debt is fully repaid. Typical project finance
features include a six-month debt service reserve account (DSRA), a
six-month backward and forward-looking 1.20x distribution trigger
and limitations on investments and additional debt.
Debt Structure - 1 - Midrange
Financial Profile
Under Fitch's base case, the project yields a minimum and average
DSCR of 1.2x (2024) and 1.4x, respectively. Under Fitch's rating
case, minimum and average DSCR are 0.9x (2029) and 1.3x,
respectively. It assumes payments under the MRG will only be
triggered on 2030, the final year of the debt (international
notes), for around of 8.3% of that year's revenues. The metrics are
considered strong for the rating, according to Fitch's applicable
criteria.
PEER GROUP
Comparable projects in the region include TransJamaican Highway
(TJH; BB/Positive) in Jamaica. AdS and TJH are similar projects
since they are both strong commuting assets within their respective
country's capital cities. Although they share similar attributes,
the difference in the credit view comes from AdS's lower metrics
(average DSCR of 1.3x versus 2.2x of TJH under Fitch's rating
cases) and because TJH has no dependency on traffic growth in order
to repay the rated debt. TJH is rated above the Jamaican sovereign
(BB-/Positive) and is constrained by Jamaica's 'BB' Country
Ceiling.
RATING SENSITIVITIES
Factors that Could, Individually or Collectively, Lead to Negative
Rating Action/Downgrade
- Traffic expressed as WAADT, consistently and/or materially below
Fitch's rating case expectation of 44,495 vehicles in 2024;
- Traffic loss that occurs due to the execution of the improvements
in the competing route, which would have a negative impact on AdS's
traffic beyond Fitch's rating case expectation of a decrease of
15.0% in 2027 and 23.5% in 2029.
Factors that Could, Individually or Collectively, Lead to Positive
Rating Action/Upgrade
- Traffic expressed as Weighted Annual Average Daily Traffic
(WAADT), consistently and/or materially above Fitch's base case
expectation of 44,842 vehicles in 2024, or if the project achieves
a DSCR equal to or above 1.2x in 2024;
- Expectation that the improvement works on the competing road
could be executed after 2027.
CREDIT UPDATE
In 2023, traffic reached a WAADT of 43,194 vehicles, which
accounted for 99.7% of 2019 volume, in line with Fitch's base case
expectations of a WAADT of 43,178 vehicles.
Sections II and III of Ruta 27 have already reached 2019 traffic
levels. However, WAADT is pulled down by the results in Section I,
which is the closest to capital city San José. According to the
concessionaire, the performance in Section I has been impacted by
the adoption of home-office trends, and the post-pandemic permanent
changes in commuting habits and volumes.
From January to March 2024, employees in San José, from both the
private and public sectors, reverted to a full home-office setup
during the reconstruction of a key bridge, impacting the city's
transportation network. Despite this disruption in traffic demand,
the first four months of 2024 continued the growing trend with
traffic showing a WAADT of 44,712 which is 1.8% and 3.9% higher
than the traffic observed in the same period of 2019 and 2023,
respectively. April 2024 was in line with Fitch's projections.
Tariffs in 2024 were increased in line with U.S. inflation at the
start of the year, and according to CRC/USD variations at the start
of every quarter. Revenues through December 2023 and April 2024 at
USD92.6 million and USD33.5 million surpassed 2019 revenues for the
same period by 19.4% and 31.4%, respectively and generally in line
with Fitch's cases.
Operational expenses have been mostly in line with Fitch's
expectations, despite the increased administrative costs due to the
CRC appreciation. According to concessionaire, since the completion
of the viaduct no further major investments are required, only
maintenance capex.
DSCR for the last semi-annual payment of December 2023 was 0.8x,
slightly below the expected 0.9x in Fitch's Base and Rating cases,
due to a combination of marginally lower revenues in the period
July-December 2023, and higher expenses and taxes as a result of
the CRC appreciation against the USD. Notwithstanding, principal
and interests were timely and dully paid as per the amortization
schedule without using reserves.
This is a result of the project trust's waterfall which on a
monthly basis, after O&M expenses, provisions 1/6 of the next debt
service payment. According to the issuer, as of May 2024, 5/6 of
the debt service due in June 2024 are already funded. Debt service
reserve account is funded through two letters of credit which
currently account for 93% of its target balance. The O&M reserve is
currently at 62% of the required balance (three months of O&M and
Capex expenses). According to the issuer, both reserves are
expected to be replenished throughout 2024.
According to the concessionaire, the first of five phases of
undelayable work to the competing route, Ruta Uno, has been
completed. However, the next four phases have had severe delays. In
August 2023, the Central Bank of Costa Rica agreed to an early
termination of the Ruta Uno trust and return control of Ruta Uno to
the Ministry of Public Works and Transportation (MOPT) and the
CONAVI. The final deadline for the trust's dissolution is December
2024. As such, it is likely that pending works on Ruta Uno will be
further delayed until plans to abolish Fideicomiso Ruta Uno are
completed, and a new investment scheme is designed.
According to media outlets and recent announcements from CONAVI's
officials, construction works could take three to four years and
could be reactivated by late 2025 or early 2026, meaning completion
would take place around 2030. The uncertainty regarding the
definitive dates for the construction of Ruta Uno, coupled with
lack of visibility on what kind of tariffs such a road would
charge, if any, have resulted in Fitch taking a more conservative
approach by assuming that the effects of competition could be felt
in Ruta 27 when Ruta Uno is partially completed.
Fitch updated its assumptions for when these traffic drops could
materialize and is now anticipating the first impact in Ruta 27's
traffic in 2027, followed by a higher drop in 2029 once
construction works end.
FINANCIAL ANALYSIS
Fitch's base case assumes a compounded annual growth rate (CAGR) of
3.6% from 2024 to 2030. From this baseline, Fitch deducts the
expected effect of the expansion and improvement of the competing
road with traffic drops of 7.5% in 2027 and 11.75% in 2029. O&M and
major maintenance expenses were projected following the issuer's
budget adding a 5% stress plus annual weighted inflation between
the U.S. (accounting for 80% of costs), which is forecasted at 2.7%
for 2024, 2.0% for 2025 and 2.0% afterward, and Costa Rica
(accounting for 20% of costs), which is forecasted at 1.1% for 2024
and 3.0% afterward. This scenario resulted in a minimum and average
DSCR of 1.2x (2029) and 1.4x, respectively.
Fitch's rating case assumes a CAGR of 3.0% from 2024 to 2030. From
this baseline, Fitch deducts the expected effect of the expansion
and improvement of the competing road with traffic drops of 15% in
2027 and 23.5% in 2029. O&M and major maintenance assumptions were
projected following the issuer's budget adding a 7.5% stress plus
annual weighted inflation as in Fitch's base case. This scenario
resulted in a minimum and average DSCR of 0.9x (2029) and 1.3x,
respectively.
Under this scenario, the project is expected to receive the MRG in
2030 (USD8.1 million, around 8.3% of revenues). Downward deviations
from Fitch's rating case may provoke some shortfalls when the
improvements on the competing road are completed. However,
available liquidity is sufficient to withstand transitory
shortfalls when cash flow available for debt services cannot fully
cover debt service. In general, the project's resiliency is
strengthened with time, with every year after reaching 2019 levels
adding up to its ability to withstand future traffic drops.
SECURITY
All obligations of the issuer under the notes will be secured by a
first priority security interest in: i) all the payment rights
under the concession agreement (toll collection rights), ii) the
shareholders' interest in the issuer.
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
----------- ------ -----
Autopistas del
Sol, S.A.
Autopistas del
Sol, S.A./Project
Revenues - First
Lien/1 LT LT B+ Upgrade B
Autopistas del
Sol, S.A./Project
Revenues - Second
Lien/2 Natl LT Natl LT A+(cri)Upgrade A(cri)
===================================
D O M I N I C A N R E P U B L I C
===================================
[*] DOMINICAN REPUBLIC: Forum Explores Opportunities With P.R.
--------------------------------------------------------------
Dominican Today reports that Economic Intelligence Inc., a
consulting firm based in San Juan, Puerto Rico, along with its
subsidiary in Santo Domingo, organized a forum titled "Trade and
Investment Opportunities" between Puerto Rico and the Dominican
Republic.
The aim of the event was to convene a gathering of business leaders
and government officials to foster increased investment and trade
between the two largest economies in the Caribbean, according to
Dominican Today.
Both countries boast a gross domestic product (GDP) of
approximately $113 billion (RD) and $116 billion (PR),
respectively, the report notes. Bilateral trade between the two
islands stands at around $1,200 million annually, with the current
trade balance favoring the Dominican Republic at $400 million, the
report relays.
An analysis conducted by economists Ellen Perez-Ducy, the manager
of the Economic Intelligence subsidiary in Santo Domingo, and
Gustavo Velez, CEO of the San Juan-based firm, underscored the vast
potential for expanding this exchange, the report relays. They
emphasized that significant growth could be achieved with the right
strategies, led by the private sectors of both countries with
support from their respective governments, the report discloses.
Former Governor Luis Fortuno inaugurated the forum, highlighting
the opportunities for both neighboring islands to attract
manufacturing and investments from the United States and Asia, the
report says. This is driven by the need for "nearshoring" and the
revival of the concept of twin plants, the report discloses.
On the Dominican side, the forum saw participation from key figures
including Fabrizio Gomez from Proyipime, Vladimir Pimentel from
Prodominicana, Luis Bencosme from Cardnet, William Calderon from
the Dominican-Puerto Rican Chamber of Commerce, Luis Miura from
Codopyme, and Jaime Moreno from various enterprises, the report
relays. They emphasized the necessity of implementing measures to
facilitate logistics for sample shipments and promoting access to
digital tools for MSMEs, crucial sectors in both economies, the
report discloses.
From Puerto Rico, participants included Luis Fortuno, Agustin Rojo
from the VRM Group and the Puerto Rico Builders Association,
Herbert Lewy from Microsoft, Julio Cabral from VRDG Group, and
Nelson Torres from the Commercial Office of Puerto Rico in the
Dominican Republic, the report relays. They highlighted the need
for skilled personnel in Puerto Rico to supply the Dominican
Republic and explored potential collaborations in waste management
and construction projects, the report discloses.
The consensus among businessmen from both countries was that there
are ample opportunities for collaboration in the technology
industry and leveraging tourism marketing to attract new markets,
the report says. They emphasized that both islands are natural
partners for cultural and economic reasons, the report notes.
Economist Gustavo Velez stressed the importance of dialogue between
the private sectors of both countries to increase trade and support
economic growth, noting the Dominican Republic's strong growth rate
and Puerto Rico's emerging growth post-hurricanes and bankruptcy,
the report says.
Ellen Perez-Ducy expressed optimism about the potential for
business leadership and government cooperation to support trade
integration, suggesting that Dominican businesses should
strategically explore opportunities in the Puerto Rican market, the
report discloses.
Nelson Torres urged Dominican businessmen to explore the tax
incentives offered by the Puerto Rican government and expand their
commercial and investment horizons, the report says. He emphasized
that collaboration between businessmen and governments could unlock
significant potential for increasing bilateral trade, the report
adds.
About Dominican Republic
The Dominican Republic is a Caribbean nation that shares the island
of Hispaniola with Haiti to the west. Capital city Santo Domingo
has Spanish landmarks like the Gothic Catedral Primada de America
dating back 5 centuries in its Zona Colonial district. Luis Rodolfo
Abinader Corona is the current president of the nation.
TCR-LA reported in April 2019 that Juan Del Rosario of the UASD
Economic Faculty cited a current economic slowdown for the
Dominican Republic and cautioned that if the trend continues,
growth would reach only 4% by 2023. Mr. Del Rosario said that if
that happens, "we'll face difficulties in meeting international
commitments."
An ongoing concern in the Dominican Republic is the inability of
participants in the electricity sector to establish financial
viability for the system.
On December 4, 2023, the TCR-LA reported that Fitch Ratings has
affirmed Dominican Republic's Long-Term Foreign-Currency Issuer
Default Rating (IDR) at 'BB-' and revised the Outlook to Positive
from Stable. Fitch says the Positive Outlook reflects a trend
improvement in governance, and robust growth prospects that should
lead to continued gains in per capita income. According to Fitch,
growth has decelerated in 2023, but it expects Dominican Republic
to recover to high levels during 2024-2025. External liquidity
metrics have improved in recent years, and foreign currency share
of government debt is on a downward path.
In August 2023, Moody's Investors Service changed the outlook on
the Government of Dominican Republic's ratings to positive from
stable and affirmed the local and foreign-currency long-term issuer
and senior unsecured ratings at Ba3. Moody's said the key drivers
for the outlook change to positive are: (i) sustained high growth
rates have enhanced the scale and wealth levels of the economy; and
(ii) a material decline in the government debt burden coupled with
improved fiscal policy effectiveness will support medium-term debt
sustainability.
The affirmation of the Ba3 ratings balances the Dominican
Republic's strong economic growth dynamics and relatively contained
susceptibility to event risks, with a comparatively weaker fiscal
position, reflecting long-standing credit challenges which include:
(i) a shallow revenue base compared to peers, (ii) weak debt
affordability metrics, and (iii) high exposure to foreign currency
borrowing.
S&P Global Ratings, in December 2022, raised its long-term foreign
and local currency sovereign credit ratings on the Dominican
Republic to 'BB' from 'BB-'. The outlook on the long-term ratings
is stable. S&P affirmed its 'B' short-term sovereign credit
ratings. S&P also revised its transfer and convertibility (T&C)
assessment to 'BBB-' from 'BB+'. The stable outlook reflects S&P's
expectation of continued favorable GDP growth and policy continuity
over the next 12-18 months that will likely stabilize the
government's debt burden.
In February 2023, S&P said its BB ratings reflect the country's
fast-growing and resilient economy. It also incorporates the
country's historical political and social challenges in passing
structural reforms to contain fiscal deficits, despite recent
improvements in the electricity sector. The ratings are constrained
by relatively high debt, a hefty interest burden, and limited
monetary policy flexibility.
=============
J A M A I C A
=============
JAMAICA: Manufacturing Industry Earns 10.9% Less From Exports
-------------------------------------------------------------
RJR News reports that the local manufacturing industry in Jamaica
earned 10.9 per cent less in 2023 from exports.
The Statistical Institute of Jamaica (STATIN) says the industry
made US$856.4 million from goods sent overseas, according to RJR
News.
This was due to a decline in the exports of Other Manufactured
Products, the report notes.
Earnings from Other Manufactured Products amounted to US$484.9
million, a decrease of 21 per cent compared to US$614.8 million in
2022, the report relays.
STATIN says this was linked to lower exports of Refined Petroleum
Products, which fell by 20.7 per cent, to US$436.2 million, the
report adds.
About Jamaica
Jamaica is an island country situated in the Caribbean Sea.
Jamaica is an upper-middle income country with an economy heavily
dependent on tourism. Other major sectors of the Jamaican economy
include agriculture, mining, manufacturing, petroleum refining,
financial and insurance services.
In October 2023, Moody's upgraded the Government of Jamaica's
long-term issuer and senior unsecured ratings to B1 from B2, and
senior unsecured shelf rating to (P)B1 from (P)B2. The outlook has
been changed to positive from stable. The upgrade of Jamaica's
rating to B1 reflects the government's sustained commitment to
fiscal consolidation and debt reduction. The positive outlook
reflects Moody's assessment that a continuation of the favorable
fiscal trajectory will further increase Jamaica's credit
resilience.
S&P Global Ratings raised on September 13, 2023, its long-term
foreign and local currency sovereign credit ratings on Jamaica to
'BB-' from 'B+', and affirmed its short-term foreign and local
currency sovereign credit ratings at 'B'. The stable outlook
reflects S&P's expectation that the government will remain
committed to prudent fiscal policies and reducing debt, as well as
supportive economic policies including a flexible exchange rate
regime and effective monetary policy.
In March 2022, Fitch Ratings affirmed Jamaica's Long-Term Foreign
Currency Issuer Default Rating (IDR) at 'B+'. The Rating Outlook is
Stable.
===========
M E X I C O
===========
FORTALEZA MATERIALES: Moody's Withdraws 'Ba3' Corp. Family Rating
-----------------------------------------------------------------
Moody's Ratings has withdrawn the ratings of Fortaleza Materiales,
S.A.P.I de C.V. consisting of a Ba3 LT Corporate Family Rating.
Prior to the withdrawal, the outlook was stable.
RATINGS RATIONALE
Moody's has decided to withdraw the ratings for its own business
reasons.
Fortaleza Materiales S.A.P.I de C.V. is a cement producer operating
in the US, Mexico and Central America, through 17 cement production
plants. In 2021, Elementia, S.A.B. de C.V. (Elementia) spun off its
Metal Products and Building Systems business units and, as the
subsisting company that maintained the cement operations, changed
its name to Fortaleza Materiales S.A.B. de C.V.
=====================
P U E R T O R I C O
=====================
GRIFFIN GLOBAL: Fitch Affirms 'BB' LongTerm IDR, Outlook Stable
---------------------------------------------------------------
Fitch Ratings has affirmed the Long-Term Issuer Default Ratings
(IDRs) of Griffin Global Asset Management Holdings, Ltd. (Griffin)
and its rated subsidiary, GGAM Finance Ltd., at 'BB'. The Rating
Outlook is Stable. Fitch has also affirmed GGAM Finance Ltd.'s
senior unsecured note rating at 'BB'.
These rating actions are being taken in conjunction with Fitch's
global aircraft leasing sector review, covering 10 publicly rated
firms.
KEY RATING DRIVERS
The ratings affirmation reflects Griffin's young fleet, one of the
longest weighted average (WA) remaining lease terms amongst peers,
appropriate targeted leverage, the absence of order book purchase
commitments, the lack of near-term debt maturities and solid
expected liquidity metrics. The ratings also consider the senior
management team's depth, experience, and track record in managing
aviation assets and ownership benefits from Bain Capital Credit,
LP, one of the largest alternative investment managers, which
brings aviation investment expertise and banking relationships to
support Griffin's growth.
Rating constraints include execution risks associated with the
company's ambitious growth targets and accompanying financing
objectives, a modest franchise position, a smaller and
significantly concentrated portfolio by customer and geography,
weaker projected profitability metrics over the next two years and
key man risk associated with founder and CEO, Ryan McKenna. Fitch
also notes potential governance and conflict of interest risks
associated with Griffin's externally managed business model,
limited number of independent board members, and ownership by
fixed-life funds.
Rating constraints applicable to the aircraft leasing industry more
broadly include the monoline nature of the business, vulnerability
to exogenous shocks, sensitivity to higher oil prices, inflation
and unemployment, which negatively impact travel demand, potential
exposure to residual value risks, reliance on wholesale funding
sources, and meaningful competition.
Griffin's contracted fleet, as of March 31, 2024 consisted of 67
aircraft leased to 18 airlines across 13 countries, with a WA age
of 1.3 years and a WA remaining lease term of 10 years. This
represents a young portfolio with one of the longest remaining
lease terms among Fitch-rated aircraft lessors, which should
support strong asset quality performance relative to peers over
time. The portfolio had net book value of approximately $4.4
billion as of March 31, 2023.
Griffin has not taken any asset impairments to date and Fitch
considers the company to have one of the higher-quality fleets in
the industry, as the vast majority (81.7%) of owned aircraft are
tier 1 based on the agency's aircraft classification, which Fitch
views to be the most liquid and marketable aircraft in the aviation
industry.
Fitch notes the company's current widebody exposure of 42% of net
book value (NBV) is above-average, but it is mitigated by the high
quality of Griffin's portfolio in terms of aircraft types and
customers. All of the company's widebodies comprise the new
technology A330-900neo, A350-900/-1000 and B787-9/-10 aircraft, as
of March 31, 2024. The ability of Griffin to purchase new
technology aircraft at attractive prices, along with relatively
conservative depreciation policies, should reduce impairment risk
over time, which is viewed positively by Fitch.
Fitch anticipates the firm's growing scale amid increased
competition, focus on new technology aircraft and higher funding
costs will have a negative impact on near-term profitability. Fitch
expects the company's net spread (lease yields, less funding costs)
to be 1.5%-2.5% over the near-term, which is commensurate with
Fitch's 'bb' category earnings and profitability benchmark of 1%-5%
for aircraft lessors with a sector risk operating environment score
in the 'bbb' category. Enhanced earnings consistency would be
viewed positively by Fitch.
Griffin's leverage was 2.7x at 1Q24, down from 2.9x at FYE 2023 and
compares favorably to management's target of net debt-to-tangible
equity of 2.75x. Fitch views leverage as appropriate in the context
of current customer concentrations counterbalanced by the liquidity
of the fleet profile, as 100% of the portfolio is expected to be
predominantly Tier 1 aircraft.
In 2023, Griffin issued $1.7 billion in aggregate of senior
unsecured notes and added a three-year, unsecured revolving credit
facility (RCF) provided by a syndicate of 12 banks, which was
subsequently upsized to $575 million in committed capacity. This
brought unsecured debt to 70.2% of total debt, as of March 31,
2024, demonstrating continued funding profile improvement.
Proforma for a further $400 million unsecured issuance concluded in
April 2024, unsecured debt accounted for 74.2% at 1Q24. Fitch
expects that Griffin will opportunistically seek to access the
secured and unsecured debt capital markets to fund its operations,
maintaining greater than 70% unsecured debt on a sustained basis.
Future unsecured debt issuances would be viewed favorably, as it
would increase unencumbered assets and provide enhanced funding
flexibility.
The company is expected to maintain solid liquidity. Resources
included $60 million of unrestricted cash and $642 million of
availability under the committed warehouse facility and RCF at
1Q24. In addition, Griffin is expected to generate annualized
operating cash flow of $301 million over the next 12 months.
Together, this provides 18x liquidity coverage of $57 million of
contracted aircraft purchases over the next 12 months, however,
liquidity coverage might reduce modestly over the year as purchase
opportunities are identified. Fitch believes there is minimal
refinancing risk given the lack of debt maturity walls in the near
term.
Fitch's sensitivity analysis for Griffin incorporated quantitative
credit metrics for the company under the agency's base case and
adverse case assumptions. These included slower than projected
growth, lower aircraft disposal gains, additional equipment
depreciation, and higher interest expenses. Fitch believes Griffin
will have sufficient liquidity headroom to withstand near-term
reductions in operating income in both scenarios while maintaining
liquidity coverage above Fitch's threshold of 1.0x. Fitch expects
sufficient capitalization headroom relative to the 4.0x downgrade
trigger under both scenarios.
The Stable Rating Outlook reflects Fitch's expectation that Griffin
will manage its balance sheet growth in order to maintain
sufficient headroom relative to its targeted leverage range and
Fitch's negative rating sensitivities over the Outlook horizon,
despite Fitch's expectation for increased macro challenges
including higher for longer interest rates and elevated inflation.
The Stable Outlook also reflects expectations for the maintenance
of a strong liquidity position, given the absence of order book
purchase commitments with aircraft manufacturers over the near
term.
RATING SENSITIVITIES
Factors that Could, Individually or Collectively, Lead to Negative
Rating Action/Downgrade
A weakening of the company's projected long-term cash flow
generation, profitability and liquidity coverage falling below 1.0x
and/or a sustained increase in leverage above 4.0x.
Macroeconomic and/or geopolitical-driven headwinds that pressure
airlines and lead to additional lease restructurings, rejections,
lessee defaults, and increased losses would also be negative for
ratings.
Griffin's ownership by fixed-life private funds could also
contribute to negative rating action if it leads to elevated
capital extractions, or if a forced sale of the company at fund
maturity impairs Griffin's financial profile, franchise or
long-term strategic direction.
Finally, an abrupt departure of Griffin's founder and CEO could
have negative rating implications if the departure impaired
Griffin's franchise or long-term strategic direction.
Factors that Could, Individually or Collectively, Lead to Positive
Rating Action/Upgrade
Griffin's ratings could be positively impacted by solid execution
with respect to planned growth targets and outlined long-term
strategic financial objectives, including maintenance of leverage
below 2.75x. Ratings could also benefit from enhanced scale and an
improved risk profile of the portfolio, as exhibited by greater
diversity of airline customers and maintenance of low impairments.
An upgrade would also be conditioned upon enhanced earnings
consistency, and achieving a sustained net spread above 5%,
unsecured debt funding sustained above 35%, while maintaining
unencumbered asset coverage of unsecured debt in excess of 1.0x.
Any potential upward momentum would also be evaluated in the
context of potential long-term strategic uncertainty, given
Griffin's ownership by fixed-life private funds, and potential
governance and conflicts of interests associated with Griffin's
externally managed business model.
DEBT AND OTHER INSTRUMENT RATINGS: KEY RATING DRIVERS
The senior unsecured debt ratings are equalized with Griffin's
Long-Term IDR and reflect expectations for average recovery
prospects in a stress scenario given the availability of
unencumbered assets.
DEBT AND OTHER INSTRUMENT RATINGS: RATING SENSITIVITIES
The senior unsecured debt ratings are primarily sensitive to
Griffin's IDR and secondarily to the relative recovery prospects of
the instruments. A decline in unencumbered asset coverage, combined
with a material increase in secured debt, could result in the
notching of the unsecured debt down from the IDR.
SUBSIDIARY AND AFFILIATE RATINGS: KEY RATING DRIVERS
The Long-Term IDR assigned to GGAM Finance Ltd. is equalized with
the IDR assigned to Griffin given it is a wholly owned subsidiary
of the company.
SUBSIDIARY AND AFFILIATE RATINGS: RATING SENSITIVITIES
The rating assigned to GGAM Finance Ltd. is primarily sensitive to
changes in the IDR assigned to Griffin and is expected to move in
tandem.
ADJUSTMENTS
The Standalone Credit Profile (SCP) has been assigned in line with
the implied SCP.
The Asset Quality score has been assigned below the implied score
due to the following adjustment reason(s): Concentrations; asset
performance (negative), Growth (negative).
The Capitalization & Leverage score has been assigned below the
implied score due to the following reason(s): Historical and future
metrics (negative).
The Funding, Liquidity & Coverage score has been assigned below the
implied score due to the following reason(s): Funding flexibility
(negative).
ESG CONSIDERATIONS
Griffin has an ESG Relevance Score of '4' for Management Strategy
due to the execution risk associated with the operational
implementation of the company's outlined strategy. This has a
negative impact on the credit profile and is relevant to the
ratings in conjunction with other factors.
Griffin has an ESG Relevance Score of '4' for Governance Structure
due to the potential governance and conflict of interests associate
with Griffin's externally-managed business model, limited number of
independent board members and ownership by a fixed-life private
fund structure. This also reflects key man risk related to its
founder and CEO, Ryan McKenna, who is leading the growth and
strategic direction of the company. 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
----------- ------ -----
Griffin Global
Asset Management
Holdings, Ltd. LT IDR BB Affirmed BB
GGAM Finance Ltd. LT IDR BB Affirmed BB
senior unsecured LT BB Affirmed BB
=================
V E N E Z U E L A
=================
VENEZUELA: Inflation Slows to 10-Year Low of 59% Ahead of Vote
--------------------------------------------------------------
globalinsolvency.com, citing Bloomberg News, reports that annual
inflation slowed to a 10-year low in Venezuela as the central bank
intervenes to prop up the currency.
Consumer prices rose 59% in May from a year earlier, the weakest
pace since 2014, the bank said, according to globalinsolvency.com.
Monthly inflation eased to 1.5%, from 2% in April. President
Nicolas Maduro's government has sought to help ease consumer price
pressure by selling more dollars in the official exchange market
and cutting expenses in local currency as he campaigns for a third
consecutive term in the July 28 election, the report notes. The
president hailed cooling inflation as evidence his government is
"walking the correct road," the report discloses.
Venezuela's annual rate still remains the highest in Latin America
after Argentina, but is now far below its 2019 peak of more than
300,000%, the report says. For at least four years, policymakers
have spent dollars to prevent the bolivar from weakening too fast,
the report relays. The central bank spent nearly $140 million
defending the currency, according to estimates by Caracas-based
consulting firm Sintesis Financiera, the report adds.
About Venezuela
Venezuela, officially the Bolivarian Republic of Venezuela, is a
country on the northern coast of South America, consisting of a
continental landmass and a large number of small islands and
islets in the Caribbean sea. The capital is the city of Caracas.
Hugo Chavez was president to Venezuela from 1999 to 2013. The
Chavez presidency was plagued with challenges, which included a
2002 coup d'etat, a 2002 national strike and a 2004 recall
referendum. Nicolas Maduro was elected president in 2013 after
the death of Chavez. Maduro won a second term at the May 2018
Venezuela elections, but this result has been challenged by
countries including Argentina, Chile, Colombia, Brazil, Canada,
Germany, France and the United States who deemed it fraudulent and
moved to recognize Juan Guaido as president.
The presidencies of Chavez and Maduro have challenged Venezuela
with a socioeconomic and political crisis. It is marked by
hyperinflation, climbing hunger, poverty, disease, crime and death
rates, social unrest, corruption and emigration from the country.
Moody's has withdrawn 'C' local currency and foreign currency
ceilings for Venezuela in September 2022. Standard & Poors has
also withdrawn its 'SD/D' foreign currency sovereign credit
ratings
and 'CCC-/C' local currency ratings on Venezuela in September 2021
due to lack of sufficient information. Fitch withdrew its own
'RD/C' Issuer Default Ratings on Venezuela in June 2019 due to the
imposition of U.S. sanctions on the country's government.
===============
X X X X X X X X
===============
[*] BOND PRICING: For the Week June 3 to June 7, 2024
-----------------------------------------------------
Issuer Name Cpn Price Maturity
Cntry Curr
---------- --- ----- --------
----- ----
Aeropuerto de Tocumen 5.1 69.7 8/11/2061 PA USD
Aeropuerto de Tocumen 4.0 70.3 8/11/2041 PA USD
Aeropuerto de Tocumen 5.1 69.7 8/11/2061 PA USD
AES Tiete Energia SA 6.8 0.7 4/15/2024 BR BRL
Agile Group Holdings 5.8 16.3 1/2/2025 KY USD
Agile Group Holdings 6.1 13.4 10/13/2025 KY USD
Agile Group Holdings 5.5 13.0 5/17/2026 KY USD
Agile Group Holdings 7.9 3.3 KY USD
Agile Group Holdings 5.5 15.0 4/21/2025 KY USD
Agile Group Holdings 7.8 3.3 KY USD
Alfa Desarrollo SpA 4.6 74.5 9/27/2051 CL USD
Alfa Desarrollo SpA 4.6 74.7 9/27/2051 CL USD
Alibaba Group Holding 3.2 65.4 2/9/2051 KY USD
Alibaba Group Holding 2.7 68.6 2/9/2041 KY USD
Alibaba Group Holding 3.3 62.9 2/9/2061 KY USD
AMTD IDEA Group 1.5 7.5 KY USD
AMTD IDEA Group 4.5 55.3 KY SGD
Amwaj 6.4 71.6 KY USD
Amwaj 4.5 50.9 KY USD
Argentina Bonar Bonds 1.0 43.7 7/9/2029 AR USD
Argentina Treasury Dual 3.3 45.8 4/30/2024 AR USD
Argentine Bonos del Tesoro 15.5 40.3 10/17/2026 AR ARS
Argentine Gov't Int'l Bond 1.0 47.5 7/9/2029 AR USD
Argentine Gov't Int'l Bond 0.5 41.9 7/9/2029 AR EUR
Argentine Gov't Int'l Bond 0.1 42.5 7/9/2030 AR EUR
Ascent Finance 1.2 61.0 7/12/2047 KY EUR
Ascent Finance 3.4 66.6 2/6/2043 KY AUD
Ascent Finance 3.8 67.9 6/28/2047 KY AUD
Astra Cumulative 2019 1.5 62.1 11/1/2029 KY USD
At Home Cayman 11.5 69.3 5/12/2028 KY USD
At Home Cayman 11.5 70.6 5/12/2028 KY USD
AYC Finance 3.9 63.2 KY USD
Banco Davivienda SA 6.7 65.8 CO USD
Banco Davivienda SA 6.7 70.3 CO USD
Banco de Chile 2.7 75.1 3/9/2035 CL AUD
Banco del Estado de Chile 3.1 71.2 2/21/2040 CL AUD
Banco del Estado de Chile 2.8 67.7 3/13/2040 CL AUD
Banco Nacional de Panama 2.5 75.4 8/11/2030 PA USD
Banco Nacional de Panama 2.5 75.2 8/11/2030 PA USD
Banco Santander Chile 3.1 71.2 2/28/2039 CL AUD
Banco Santander Chile 1.3 73.9 11/29/2034 CL EUR
Banda de Couro Energetica 8.0 55.1 1/15/2027 BR BRL
Baraunas II Energetica S/A 8.0 12.5 1/15/2027 BR BRL
Bishopsgate Asset Finance 4.8 66.9 8/14/2044 KY GBP
Bolivian Gov'tInt'l Bond 4.5 58.3 3/20/2028 BO USD
Bolivian Gov'tInt'l Bond 7.5 59.4 3/2/2030 BO USD
Bolivian Gov'tInt'l Bond 4.5 58.5 3/20/2028 BO USD
Bolivian Gov'tInt'l Bond 7.5 59.5 3/2/2030 BO USD
Bonos Para La Reconstruccion 5.0 63.6 10/31/2027 AR USD
Bonos Para La Reconstruccion 3.0 60.5 5/31/2026 AR USD
Bonos Para La Reconstruccion 5.0 51.9 10/31/2027 AR USD
Brazilian Gov't Int'l Bond 4.8 74.1 1/14/2050 BR USD
BRF SA 5.8 78.1 9/21/2050 BR USD
BRF SA 5.8 78.1 9/21/2050 BR USD
Caja de Compensacion 2.4 49.6 4/5/2025 CL CLP
Camposol SA 6.0 72.3 2/3/2027 PE USD
Camposol SA 6.0 72.6 2/3/2027 PE USD
CFLD Cayman Investment 2.5 3.4 1/31/2031 KY USD
CFLD Cayman Investment 2.5 3.4 1/31/2031 KY USD
CFLD Cayman Investment 2.5 2.9 1/31/2031 KY USD
CFLD Cayman Investment 2.5 3.8 1/31/2031 KY USD
CFLD Cayman Investment 2.5 2.2 1/31/2031 KY USD
CFLD Cayman Investment 2.5 3.5 1/31/2031 KY USD
CFLD Cayman Investment 2.5 2.9 1/31/2031 KY USD
CFLD Cayman Investment 2.5 3.5 1/31/2031 KY USD
CFLD Cayman Investment 2.5 2.2 1/31/2031 KY USD
Chile Gov'tInt'l Bond 3.5 72.7 1/25/2050 CL USD
Chile Gov'tInt'l Bond 3.1 73.6 5/7/2041 CL USD
Chile Gov'tInt'l Bond 3.1 62.8 1/22/2061 CL USD
Chile Gov'tInt'l Bond 3.5 72.3 4/15/2053 CL USD
Chile Gov'tInt'l Bond 1.3 67.4 1/29/2040 CL EUR
Chile Gov'tInt'l Bond 1.3 54.0 1/22/2051 CL EUR
Chile Gov'tInt'l Bond 3.3 62.9 9/21/2071 CL USD
Chile Gov'tInt'l Bond 1.3 74.4 7/26/2036 CL EUR
China Yuhua Education Corp 0.9 65.1 12/27/2024 KY HKD
CK HutchisonInt'l 19 II 3.4 74.4 9/6/2049 KY USD
CK HutchisonInt'l 19 II 3.4 74.4 9/6/2049 KY USD
CK HutchisonInt'l 20 3.4 74.1 5/8/2050 KY USD
CK HutchisonInt'l 20 3.4 74.1 5/8/2050 KY USD
Colombia Gov't Int'l Bond 4.1 61.2 5/15/2051 CO USD
Colombia Gov't Int'l Bond 3.9 57.2 2/15/2061 CO USD
Colombia Gov't Int'l Bond 5.2 72.4 5/15/2049 CO USD
Colombia Gov't Int'l Bond 4.1 66.7 2/22/2042 CO USD
Colombia Gov't Int'l Bond 7.3 71.1 10/26/2050 CO COP
Colombia Gov't Int'l Bond 6.3 73.3 7/9/2036 CO COP
Colombia Gov't Int'l Bond 7.3 71.1 10/26/2050 CO COP
Colombia Gov't Int'l Bond 5.0 71.6 6/15/2045 CO USD
Colombia Gov't Int'l Bond 6.3 73.3 7/9/2036 CO COP
Colombia Telecomunicaciones 5.0 67.5 7/17/2030 CO USD
Colombia Telecomunicaciones 5.0 67.5 7/17/2030 CO USD
Colombian TES 7.3 70.9 10/26/2050 CO COP
Colombian TES 6.3 73.1 7/9/2036 CO COP
Coopeucha 4.6 38.3 6/1/2029 CL CLP
CODELCO 3.7 67.4 1/30/2050 CL USD
CODELCO 3.2 61.0 1/15/2051 CL USD
CODELCO 3.7 67.3 1/30/2050 CL USD
CODELCO 3.2 61.0 1/15/2051 CL USD
CODELCO 3.6 74.7 7/22/2039 CL AUD
Earls Eight 0.1 64.5 12/20/2031 KY AUD
Earls Eight 1.7 72.4 6/20/2032 KY AUD
Ecopetrol SA 5.9 73.6 5/28/2045 CO USD
Ecopetrol SA 5.9 70.5 11/2/2051 CO USD
El Salvador Gov'tInt'l Bond 7.1 68.3 1/20/2050 SV USD
El Salvador Gov'tInt'l Bond 7.6 72.0 9/21/2034 SV USD
El Salvador Gov'tInt'l Bond 7.6 72.8 2/1/2041 SV USD
El Salvador Gov'tInt'l Bond 5.9 65.1 1/30/2025 SV USD
El Salvador Gov'tInt'l Bond 7.6 72.6 9/21/2034 SV USD
El Salvador Gov'tInt'l Bond 7.1 68.4 1/20/2050 SV USD
El Salvador Gov'tInt'l Bond 7.6 72.9 2/1/2041 SV USD
Embotelladora Andina SA 6.5 23.2 6/1/2026 CL CLP
EFE 3.8 65.7 9/14/2061 CL USD
EFE 3.1 59.8 8/18/2050 CL USD
EFE 3.1 59.8 8/18/2050 CL USD
EFE 3.8 65.8 9/14/2061 CL USD
EFE 6.5 11.1 1/1/2026 CL CLP
ETESA 5.1 71.5 5/2/2049 PA USD
ETESA 5.1 72.2 5/2/2049 PA USD
Metro SA 3.7 65.1 9/13/2061 CL USD
Metro SA 3.7 65.0 9/13/2061 CL USD
Metro SA 5.5 50.1 7/15/2027 CL CLP
Metro SA 5.0 63.8 5/11/2025 AR USD
ENAP 4.5 73.2 9/14/2047 CL USD
ENAP 4.5 73.2 9/14/2047 CL USD
ENA Master Trust 4.0 70.5 5/19/2048 PA USD
ENA Master Trust 4.0 70.9 5/19/2048 PA USD
Enel Generacion Chile SA 6.2 29.2 10/15/2028 CL CLP
Equatorial Energia 10.9 1.1 10/15/2029 BR BRL
Equatorial Energia 10.8 1.0 5/15/2028 BR BRL
Esval SA 3.5 13.1 2/15/2026 CL CLP
Farfetch 3.8 4.3 5/1/2027 KY USD
Fospar S/A 6.5 1.4 5/15/2026 BR BRL
GDM Argentina SA 2.5 0.0 9/8/2024 AR USD
GDS Holdings 4.5 67.7 1/31/2030 KY USD
Generacion Mediterranea SA 4.6 0.0 11/12/2024 AR ARS
General Shopping Finance 10.0 66.2 KY USD
General Shopping Finance 10.0 65.0 KY USD
Genneia SA 2.0 56.9 7/14/2028 AR USD
Greenland Hong Kong 10.2 13.4 KY USD
Guacolda Energia SA 4.6 70.5 4/30/2025 CL USD
Guacolda Energia SA 10.0 70.1 12/30/2030 CL USD
Guacolda Energia SA 4.6 71.8 4/30/2025 CL USD
Guacolda Energia SA 10.0 70.1 12/30/2030 CL USD
Hector A Bertone SA 1.9 0.0 4/7/2024 AR USD
Hilong Holding 9.8 68.7 11/18/2024 KY USD
Hilong Holding 9.8 69.7 11/18/2024 KY USD
Hilong Holding 9.8 69.4 11/18/2024 KY USD
Multiplo SA 3.3 59.5 BR USD
Itau Unibanco SA/Nassau 5.8 20.2 5/20/2027 BR BRL
Jamaica Gov't Bond 6.3 67.8 7/11/2048 JM JMD
Jamaica Gov't Bond 8.5 73.0 12/21/2061 JM JMD
Lani Finance 1.7 63.5 3/14/2049 KY EUR
Lani Finance 1.9 66.9 10/19/2048 KY EUR
Lani Finance 3.1 66.1 10/19/2048 KY AUD
Lani Finance 1.9 65.8 9/20/2048 KY EUR
Link Finance Cayman 2009 2.2 70.0 10/27/2038 KY HKD
LIPSA Srl 1.0 0.0 8/23/2024 AR USD
Logan Group Co 7.0 5.1 KY USD
Longfor Group Holdings 4.0 43.3 9/16/2029 KY USD
Longfor Group Holdings 3.4 56.1 4/13/2027 KY USD
Longfor Group Holdings 3.9 38.4 1/13/2032 KY USD
Longfor Group Holdings 4.5 53.1 1/16/2028 KY USD
Luminis III 2.3 41.8 9/22/2048 KY USD
Luminis III 2.4 55.3 9/22/2048 KY AUD
Luminis IV 3.2 70.4 1/22/2042 KY AUD
Luminis 2.3 54.8 9/22/2048 KY AUD
Lunar Funding I 1.7 8/11/2056 KY GBP
MTR Corp CI 2.8 73.3 9/6/2047 KY HKD
MTR Corp CI 3.0 73.1 3/11/2051 KY HKD
MTR Corp CI 3.0 75.4 4/26/2047 KY HKD
MTR Corp CI 3.2 73.7 2/5/2055 KY HKD
MTR Corp CI 3.0 73.1 3/11/2051 KY HKD
NIO Inc 4.6 73.1 10/15/2030 KY USD
Panama Gov'tInt'l Bond 4.5 63.1 4/1/2056 PA USD
Panama Gov'tInt'l Bond 2.3 70.2 9/29/2032 PA USD
Panama Gov'tInt'l Bond 3.9 55.8 7/23/2060 PA USD
Panama Gov'tInt'l Bond 4.5 64.9 4/16/2050 PA USD
Panama Gov'tInt'l Bond 4.5 62.0 1/19/2063 PA USD
Panama Gov'tInt'l Bond 4.5 66.6 5/15/2047 PA USD
Panama Gov'tInt'l Bond 4.3 62.6 4/29/2053 PA USD
Peruvian Gov'tInt'l Bond 3.6 71.8 3/10/2051 PE USD
Peruvian Gov'tInt'l Bond 2.8 57.3 12/1/2060 PE USD
Peruvian Gov'tInt'l Bond 3.2 57.3 7/28/2121 PE USD
Peruvian Gov'tInt'l Bond 3.6 65.7 1/15/2072 PE USD
Peruvian Gov'tInt'l Bond 3.3 74.3 3/11/2041 PE USD
Petroleos del Peru SA 5.6 68.3 6/19/2047 PE USD
Petroleos del Peru SA 5.6 68.3 6/19/2047 PE USD
Powerlong Real Estate 6.3 10.3 8/10/2024 KY USD
Provincia de Cordoba 7.1 39.6 10/27/2026 AR USD
Provincia de la Rioja 7.5 45.9 7/20/2032 AR USD
Provincia de la Rioja 4.5 51.8 1/20/2027 AR USD
Chaco Argentina 4.0 0.0 12/4/2026 AR USD
QNB Finance 13.5 63.1 10/6/2025 KY TRY
QNB Finance 11.5 71.7 1/30/2025 KY TRY
QNB Finance 2.9 74.2 9/16/2035 KY AUD
QNB Finance 2.9 72.9 12/4/2035 KY AUD
QNB Finance 3.0 75.4 2/14/2035 KY AUD
QNB Finance 3.4 72.0 10/21/2039 KY AUD
Radiance Holdings Group 7.8 49.6 3/20/2024 KY USD
Rio Alto Energias Renovaveis 7.0 29.1 7/15/2027 BR BRL
Santander Consumer Chile SA 2.9 72.7 11/27/2034 CL AUD
Seazen Group 6.0 75.2 8/12/2024 KY USD
Seazen Group 4.5 34.1 7/13/2025 KY USD
Shui On Development Holding 5.5 61.2 6/29/2026 KY USD
Shui On Development Holding 5.5 73.0 3/3/2025 KY USD
Silk Road Investments 2.9 66.8 1/23/2042 KY AUD
Skylark 1.8 59.0 4/4/2039 KY GBP
Autopista Central 5.3 37.2 12/15/2026 CL CLP
Autopista Central 5.3 50.6 12/15/2028 CL CLP
SQM 3.5 65.5 9/10/2051 CL USD
SQM 3.5 65.5 9/10/2051 CL USD
Southern Water Service 3.0 70.8 5/28/2037 KY GBP
SPE Saneamento RIO 1 7.2 10.8 1/15/2042 BR BRL
SPE Saneamento RIO 1 SA 6.9 10.5 1/15/2034 BR BRL
SPE Saneamento Rio 4 SA 7.2 10.2 1/15/2042 BR BRL
SPE Saneamento Rio 4 SA 6.9 10.2 1/15/2034 BR BRL
Spica 2.0 74.9 3/24/2033 KY AUD
Spirit Loyalty Cayman 8.0 72.2 9/20/2025 KY USD
Spirit Loyalty Cayman 8.0 73.0 9/20/2025 KY USD
Spirit Loyalty Cayman 8.0 70.3 9/20/2025 KY USD
Spirit Loyalty Cayman 8.0 72.5 9/20/2025 KY USD
Sylph 2.7 68.5 3/25/2036 KY USD
Sylph 3.1 74.7 9/25/2035 KY USD
Sylph 2.4 64.2 9/25/2036 KY USD
Sylph 2.9 74.5 6/24/2036 KY AUD
Telecom Argentina SA 1.0 74.0 3/9/2027 AR USD
Telecom Argentina SA 1.0 66.1 2/10/2028 AR USD
Telefonica Moviles Chile SA 3.5 74.4 11/18/2031 CL USD
Telefonica Moviles Chile SA 3.5 74.4 11/18/2031 CL USD
Tencent Holdings 3.2 67.9 6/3/2050 KY USD
Tencent Holdings 3.3 64.0 6/3/2060 KY USD
Tencent Holdings 3.9 73.9 4/22/2061 KY USD
Tencent Holdings 3.8 75.4 4/22/2051 KY USD
Tencent Holdings 3.2 67.6 6/3/2050 KY USD
Tencent Holdings 3.9 73.9 4/22/2061 KY USD
Tencent Holdings 3.3 64.1 6/3/2060 KY USD
Three Gorges Finance 3.2 71.6 10/16/2049 KY USD
Grupo Travessia 9.0 1.6 1/20/2032 BR BRL
Volcan Cia Minera SAA 4.4 62.2 2/11/2026 PE USD
Volcan Cia Minera SAA 4.4 62.0 2/11/2026 PE USD
VTR Comunicaciones SpA 5.1 61.6 1/15/2028 CL USD
VTR Comunicaciones SpA 4.4 60.8 4/15/2029 CL USD
VTR Comunicaciones SpA 5.1 61.9 1/15/2028 CL USD
VTR Comunicaciones SpA 4.4 60.6 4/15/2029 CL USD
YPF SA 7.0 72.6 12/15/2047 AR USD
YPF SA 1.0 66.8 4/25/2027 AR USD
*********
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 * * *