/raid1/www/Hosts/bankrupt/TCRLA

/raid1/www/Hosts/bankrupt/TCRLA_Public/240627.mbx T R O U B L E D C O M P A N Y R E P O R T E R L A T I N A M E R I C A Thursday, June 27, 2024, Vol. 25, No. 129 Headlines B R A Z I L BRAZIL: Central Bank Pauses Cycle of Interest Rate Cuts BRAZIL: Fitch Assigns 'BB' Rating on Sustainable Bonds Due 2032 COMPANHIA DE SANEAMENTO: Launches Major $3 Billion Share Sale GOL LINHAS: Plan Exclusivity Period Extended to October 21 C O L O M B I A BANCOLOMBIA SA: Fitch Assigns 'BB-' Rating on T2 Subordinated Notes COLOMBIA: Targets Widest Fiscal Deficit Since 2020 Pandemic D O M I N I C A N R E P U B L I C [*] DOMINICAN REPUBLIC: Sees 5% Increase in Remittances M E X I C O ODYSSEY MARINE: Tribunal Updates on NAFTA Claim Against Mexico V I R G I N I S L A N D S CHINA GREAT WALL: Fitch Assigns 'BB+(EXP)' Rating on Securities X X X X X X X X LATAM: CDB Urges Region to Adopt Measures to Avoid 'Ageing Trap' - - - - - =========== B R A Z I L =========== BRAZIL: Central Bank Pauses Cycle of Interest Rate Cuts ------------------------------------------------------- Maria Eloisa Capurro at Bloomberg News reports that Brazil's central bank held its key interest rate in a unanimous vote, fueling a rally in the real as it signaled borrowing costs will be steady for a prolonged period to battle rising inflation estimates. Policymakers kept the benchmark Selic unchanged at 10.5%, as expected by nearly all economists in a Bloomberg survey. They paused an easing cycle that had lowered rates by 3.25 percentage points, according to Bloomberg News. The Brazilian real gained as much as 0.9% against the dollar, leading global gains, Bloomberg News notes. Short-end swap rates fell as the decision soothed investors who had grown skeptical about the central bank's inflation fight after May's split decision on rates, Bloomberg News relays. Consumer price forecasts worsened significantly on those doubts and fears of higher public spending, Bloomberg News notes. In a statement, central bankers wrote that they decided to "interrupt" their rate cuts due to an uncertain global environment, resilient domestic economy and a rise in inflation estimates — both their own and from markets, Bloomberg News says. "Monetary policy should continue being contractionary for sufficient time at a level that consolidates both the disinflation process and the anchoring of expectations around the targets," they wrote. Board members will stay vigilant, and "potential future changes in the interest rate will be determined by the firm commitment of reaching the inflation target," they wrote, Bloomberg News relays. The decision stands to provoke the ire of President Luiz Inacio Lula da Silva, who has stepped up his criticism of monetary policy, saying he will seek a governor who's "immune" to financial market jitters and also focused on growth once Roberto Campos Neto's term ends this year, Bloomberg News discloses. In another sign of growing political pressure over the monetary authority, the ruling Workers' Party demanded in court that Campos Neto abstain from making political remarks and supporting any candidate seeking public office until the end of his term, Bloomberg News relays. The lawsuit filed was prompted by the central bank chief's decision to attended a ceremony in his honor organized by Sao Paulo Governor Tarcisio de Freitas, an heir to former President Jair Bolsonaro who's seen as a potential challenger to Lula in 2026, Bloomberg News discloses. The central bank didn't immediately reply to a request for comment on the lawsuit. In their statement, policymakers wrote that headline consumer prices have been following a path of disinflation, Bloomberg News notes. Still, various measures of underlying cost-of-living increases are above target, Bloomberg News relays. The board raised its 2024 and 2025 inflation estimates further above the 3% target using parameters from its weekly economist survey that show rates falling next year, Bloomberg News notes. In an alternative scenario with a constant Selic through the policy horizon, their projections stand at 4% for 2024 and 3.1% for 2025, Bloomberg News relays. Analysts see consumer price increases above target through 2026, and, until now, traders have priced in rate hikes for later this year, Bloomberg News relays. Most recently, annual inflation in May accelerated to 3.93% on resilient service costs, Bloomberg News says. "They set a high bar to raise rates," said Gustavo Pessoa, a founding partner at Legacy Capital. "The most probable scenario is for the Selic to be kept steady for a prolonged period," he added. Complex Environment Bloomberg News relays that Lula will nominate both a new central bank governor and two new directors later this year. Those picks will consolidate his sway over the board, a prospect that concerns investors given that he has often criticized borrowing costs and the inflation target as being too high, Bloomberg News notes. The powerful influence of the leftist president is part of the reason local assets sold off following the central bank's May rate decision, when his four current appointees dissented in favor of a larger rate cut, Bloomberg News relays. Part of investors' jitters also centers on fears the government will waiver in its pledge to bolster public accounts and keep a lid on debt, Bloomberg News notes. Lula said he is willing to make spending cuts, as long as his economic team demonstrates they are necessary, Bloomberg News relays. This month, Congress killed the latest proposal to raise revenues, Bloomberg News notes. That reversal came after Lula's administration said in April it will aim for a balanced primary budget — which excludes interest payments — instead of a surplus in 2025, Bloomberg News relays. In their statement, central bankers reiterated that they will closely monitor fiscal developments, Bloomberg News notes. They wrote that a credible fiscal policy contributes to the anchoring of inflation expectations, thus helping monetary policy, Bloomberg News says. "The environment has become more complex," said Caio Megale, chief economist at XP Investimentos. "Our view is that rates will remain on hold at 10.5% through the end of 2025," Bloomberg News adds. About Brazil Brazil is the fifth largest country in the world and third largest in the Americas. Luiz Inacio Lula da Silva won the 2022 Brazilian general election. He was sworn in on January 1, 2023, as the 39th president of Brazil, succeeding Jair Bolsonaro. S&P Global Ratings raised on Dec. 19, 2023, its long-term global scale ratings on Brazil to 'BB' from 'BB-'. The outlook on the long-term ratings is stable. S&P affirmed Brazil's global scale short-term ratings at 'B' and its national scale long-term rating at 'brAAA'. S&P also raised the transfer and convertibility assessment on the country to 'BBB-' from 'BB+'. S&P said, "The stable outlook reflects our expectation that Brazil will maintain A strong external position, thanks to strong commodity output and limited external financing needs. We also believe Brazil's institutional framework can sustain stable and pragmatic policymaking based on extensive checks and balances across the executive, legislative, and judicial branches of government. We expect a very gradual fiscal correction but anticipate fiscal deficits will remain large." Fitch Ratings affirmed on Dec. 15, 2023, Brazil's Long-Term Foreign-Currency Issuer Default Rating (IDR) at 'BB' with a Stable Outlook. Fitch said Brazil's ratings are supported by its large and diverse economy, high per-capita income, and deep domestic markets and a large cash cushion that support the sovereign's financing flexibility and its high local-currency debt share. Strong external finances support resilience to shocks, underpinned by a flexible exchange rate, robust international reserves and a sovereign net external creditor position. The ratings are constrained by weak economic growth potential, relatively low governance scores, high and rising government debt/GDP, and budgetary rigidities. A new fiscal framework introduced this year aims to anchor a gradual consolidation process and address these fiscal weaknesses, but its effectiveness is increasingly unclear. Moody's credit rating for Brazil was last set at Ba2 in 2018 with stable outlook. Moody's affirmed the Ba2 issuer ratings and senior unsecured bond ratings in April 2022. DBRS Inc., on August 15, 2023, upgraded Brazil's Long-Term Foreign and Local Currency - Issuer Ratings to BB from BB (low). At the same time, DBRS Morningstar confirmed Brazil's Short-term Foreign and Local Currency - Issuer Ratings at R-4. The trend on all ratings is Stable (March 2018). BRAZIL: Fitch Assigns 'BB' Rating on Sustainable Bonds Due 2032 --------------------------------------------------------------- Fitch Ratings has assigned a 'BB' rating to Brazil's sustainable bond maturing on Jan. 22, 2032. The bond has a coupon rate of 6.125%. An amount equivalent to the net proceeds of the bond will be used for eligible green and/or social expenditures under Brazil's Sovereign Sustainable Bond Framework. The proceeds of the issuance will be used for repayment of outstanding external debt. KEY RATING DRIVERS The rating is in line with Brazil's Long-Term (LT) Foreign Currency (FC) Issuer Default Rating (IDR). On Dec. 15, 2023, Fitch affirmed Brazil's LT FC IDR at 'BB' with a Stable Rating Outlook. ESG - Governance: Brazil has an ESG Relevance Score (RS) of '5' for both Political Stability and Rights and for the Rule of Law, Institutional and Regulatory Quality and Control of Corruption. These scores reflect the high weight that the World Bank Governance Indicators (WBGI) have in its proprietary Sovereign Rating Model. Brazil has a medium WBGI ranking at the 40th percentile, reflecting a record of political tension, but peaceful political transitions, a moderate level of rights for participation in the political process, moderate institutional capacity, moderate rule of law and a relatively high level of corruption. RATING SENSITIVITIES Factors that Could, Individually or Collectively, Lead to Negative Rating Action/Downgrade - The bond rating would be sensitive to any negative changes in Brazil's LT FC IDR. Factors that Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade - The bond rating would be sensitive to any positive changes in Brazil's LT FC IDR. Date of Relevant Committee 14 December 2023 ESG CONSIDERATIONS Brazil has an ESG Relevance Score of '5' for Political Stability and Rights as WBGIs have the highest weight in Fitch's SRM and are therefore highly relevant to the rating and a key rating driver with a high weight. As Brazil has a percentile rank below 50 for the respective Governance Indicator, this has a negative impact on the credit profile. Brazil has an ESG Relevance Score of '5' for Rule of Law, Institutional & Regulatory Quality and Control of Corruption as WBGIs have the highest weight in Fitch's SRM and are therefore highly relevant to the rating and a key rating driver with a high weight. As Brazil has a percentile rank below 50 for the respective Governance Indicators, this has a negative impact on the credit profile. Brazil has an ESG Relevance Score of '4' [+] for Human Rights and Political Freedoms as the Voice and Accountability pillar of the WBGIs is relevant to the rating and a rating driver. As Brazil has a percentile rank above 50 for the respective Governance Indicator, this has a positive impact on the credit profile. Brazil has an ESG Relevance Score of '4' [+] for Creditor Rights as willingness to service and repay debt is relevant to the rating and is a rating driver for Brazil, as for all sovereigns. As Brazil has track record of 20+ years without a restructuring of public debt and captured in Fitch's SRM variable, this has a positive impact on the credit profile. The highest level of ESG credit relevance is a score of '3', unless otherwise disclosed in this section. A score of '3' means ESG issues are credit-neutral or have only a minimal credit impact on the entity, either due to their nature or the way in which they are being managed by the entity. Fitch's ESG Relevance Scores are not inputs in the rating process; they are an observation on the relevance and materiality of ESG factors in the rating decision. Entity/Debt Rating ----------- ------ Brazil senior unsecured LT BB New Rating COMPANHIA DE SANEAMENTO: Launches Major $3 Billion Share Sale ------------------------------------------------------------- Rio Times Online reports that in a significant economic move, Sao Paulo state has initiated the sale of 191,713,044 Companhia de Saneamento Basico do Estado de Sao Paulo's (Sabesp)shares. An additional 28,756,956 shares may boost the offering, should demand surge. This sale could usher in nearly 16.5 billion reais ($3B), a substantial influx for local coffers, according to Rio Times Online. Sabesp, known fully as Cia de Saneamento Basico do Estado de Sao Paulo, stands as Latin America's premier water utility by market value. This transaction, poised to close on July 18, could diminish Sao Paulo's share from 50.3% to a mere 18%, the report notes. Essentially, this marks a pivot towards privatization for Sabesp, the report relays. A cohort of financial titans, including Banco BTG Pactual and Citigroup, are steering this financial venture, the report relays. Entities like Equatorial Energia and investor Nelson Tanure are also weaving their narratives into this financial tapestry, expressing keen interest, the report says. The sale emerges at a time when Brazil witnesses a notable decline in public offerings and stock sales, pointing to a broader market reticence, the report discloses. Yet, this does not deter local ambitions, the report says. Sao Paulo's governor, a privatization proponent, sees this as a crucial step to improve public services, similar to Eletrobras's privatization success, the report notes. This share sale marks a major shift in governance and tests the waters for future privatizations, the report relays. It's part of a broader initiative to improve Brazil's public asset management by infusing private sector efficiency into utilities, the report notes. Thus, this sale is not just a financial deal; it's key to Brazil's economic reform and improving public services, the report relays. Background – Sabesp Launches Major $3 Billion Share Sale Following privatization, the Sao Paulo government announced extensive investment and operational plans, the report discloses. These include a R$64 billion ($12.55 billion) investment over the next five years. The goal to universalize water and sewage services will be advanced from 2029 to 2033, the report relays. They plan a total investment of R$260 billion ($50.98 billion) by 2060, the report notes. Furthermore, the state proposes a 10% tariff reduction for low-income consumers, the report relays. They also propose a 1% reduction for general consumers and a 0.5% reduction for commercial and industrial users, the report adds. As reported in the Troubled Company Reporter-Latin America on April 17, 2024, Fitch Ratings has affirmed Companhia de Saneamento Basico do Estado de Sao Paulo's (Sabesp) Foreign Currency (FC) and Local Currency (LC) Issuer Default Ratings (IDRs) at 'BB+'. Fitch has also affirmed Sabesp's National Scale Rating and its unsecured debenture issuances at 'AAA(bra)'. The Rating Outlook is Stable. GOL LINHAS: Plan Exclusivity Period Extended to October 21 ---------------------------------------------------------- Judge Martin Glenn of the U.S. Bankruptcy Court for the Southern District of New York extended GOL Linhas Aereas Inteligentes S.A., and its affiliates' exclusive periods to file a plan of reorganization and obtain acceptance thereof to October 21 and December 20, 2024, respectively. As shared by Troubled Company Reporter, the Chapter 11 Cases involve thirteen Debtors, which maintain active, international airline and cargo operations with customers and creditors around the world. With approximately 14,000 employees and approximately $3.7 billion in annual revenue in 2023, the Debtors play a key role in the South American aviation market. The Debtors have in excess of $4.2 billion of outstanding funded indebtedness and lease obligations, and their Schedules and Statements contain tens of thousands of creditors and thousands of contracts. The Debtors claim that although they have made substantial progress, the administration of these Chapter 11 Cases and the negotiation, formulation, filing, and prosecution of a chapter 11 plan will require substantial additional time and effort, which can only begin in earnest once the Debtors have finalized their business plan. Moreover, the Debtors require additional time to evaluate additional operational restructuring opportunities, finalize their long-term business plan, access the capital markets, consider plan structures, and negotiate with key stakeholders before they are able to propose a value-maximizing plan of reorganization, although they continue to work diligently towards a timely emergence from chapter 11. The Debtors' Counsel: Evan R. Fleck, Esq. Andrew C. Harmeyer, Esq. Bryan V. Uelk, Esq. MILBANK LLP 55 Hudson Yards New York, NY 10001 Telephone: (212) 530-5000 Facsimile: (212) 530-5219 Email: efleck@milbank.com aharmeyer@milbank.com buelk@milbank.com - and - Gregory A. Bray, Esq. MILBANK LLP 2029 Century Park East, 33rd Floor Los Angeles, CA 90067 Telephone: (424) 386-4000 Facsimile: (213) 629-5063 Email: gbray@milbank.com - and - Andrew M. Leblanc, Esq. Erin E. Dexter, Esq. MILBANK LLP 1850 K St. NW, Suite 1100 Washington, DC 20006 Telephone: (202) 835-7500 Facsimile: (202) 263-7586 Email: aleblanc@milbank.com edexter@milbank.com About Gol GOLL4.SA GOL Linhas Aereas Inteligentes S.A. provides scheduled and non-scheduled air transportation services for passengers and cargo; and maintenance services for aircraft and components in Brazil and internationally. The company offers Smiles, a frequent-flyer program to approximately 20.5 million members, allowing clients to accumulate and redeem miles. It operates a fleet of 146 Boeing 737 aircraft with 674 daily flights. The company was founded in 2000 and is headquartered in Sao Paulo, Brazil. GOL Linhas Aereas Inteligentes S.A. and its affiliates and its subsidiaries voluntarily filed for Chapter 11 protection (Bankr. S.D.N.Y. Lead Case No. 24-10118) on Jan. 25, 2024. GOL Linhas estimated $1 billion to $10 billion in assets as of the bankruptcy filing. The Debtors tapped Milbank Llp as counsel, Seabury Securities Llc as restructuring advisor, financial advisor and investment banker, Alixpartners, LLP, as financial advisor, and HUGHES Hubbard & Reed LLP as aviation related counsel. Kroll Restructuring Administration LLC is the claims agent. =============== C O L O M B I A =============== BANCOLOMBIA SA: Fitch Assigns 'BB-' Rating on T2 Subordinated Notes ------------------------------------------------------------------- Fitch Ratings has assigned a final rating of 'BB-' to Bancolombia S.A.'s U.S. dollar T2 subordinated notes for USD800 million at 8.625% due December 2034. The net proceeds of these notes will replace a portion of the existing 2027 notes and be used for general corporate purposes. The final rating follows a review of the final terms and conditions according to the information received when Fitch assigned the expected rating on June 6, 2024. For more details see "Fitch Assigns 'BB-(EXP)' Rating to Bancolombia's T2 Subordinated Notes,". KEY RATING DRIVERS The rating assigned to Bancolombia's new 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 II 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 I 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. DATE OF RELEVANT COMMITTEE 28 November 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 Prior ----------- ------ ----- Bancolombia S.A. Subordinated LT BB- New Rating BB-(EXP) COLOMBIA: Targets Widest Fiscal Deficit Since 2020 Pandemic ----------------------------------------------------------- globalinsolvency.com, citing Bloomberg News, reports that Colombia is on track for its widest fiscal deficit since the Covid-19 pandemic as falling tax revenues leave a hole in the nation's finances. The government said it will target a 2024 deficit of 5.6% of gross domestic product this year, from a previous target of 5.3%. The peso and local currency bonds have dropped in recent days as nervous investors ditch the nation's assets amid concerns over the ballooning fiscal deficit, according to globalinsolvency.com. The government will trim its 2024 budget by 20 trillion pesos ($5 billion), Finance Minister Ricardo Bonilla said, the report notes. The report relays that Bonilla reiterated his commitment to complying with the fiscal rule, or balanced budget act, which imposes limits on government borrowing. Speaking alongside Bonilla, Public credit director Jose Roberto Acosta said the government will increase bond auctions in the local market by 3 trillion pesos ($725 million) this year, to finance some of the extra deficit, the report notes. The peso has been the world's worst-performing currency, while local peso bonds have also sold off, the report says. President Gustavo Petro has said that any spending cuts will not affect his social programs, the report adds. =================================== D O M I N I C A N R E P U B L I C =================================== [*] DOMINICAN REPUBLIC: Sees 5% Increase in Remittances ------------------------------------------------------- Dominican Today reports that the Central Bank of the Dominican Republic (BCRD) reported that remittances received between January and May 2024 totaled US$4,382.3 million, marking a 5.0% increase compared to the same period the previous year. This continues the trend of year-on-year growth in remittance flows observed in 2023, according to Dominican Today. In May alone, US$887.1 million in remittances were received, a 0.7% increase over May 2023, the report notes. These funds from the diaspora significantly impact consumption, investment, and the financing of the most vulnerable sectors in the country, the report relays. The BCRD attributes the behavior of remittances largely to the economic performance of the United States, from which 87.3% of formal remittances in May originated, amounting to US$713.8 million, the report discloses. The U.S. unemployment rate stood at 4.0% in May, slightly up from 3.9% in April 2024, alongside the creation of 272,000 new jobs, the report says. The Institute for Supply and Management's (ISM) non-manufacturing purchasing managers index (PMI) also increased to 53.8 in May from 49.4 in April, signaling an expansion in the service sector where many Dominicans are employed, the report notes. In May, remittances also came through formal channels from other countries, including Spain (US$39.4 million, 4.8% of the total), Haiti (1.0%), and Italy (0.7%), the report relays. Additional countries contributing to remittances included Switzerland, Canada, and Panama, the report says. The distribution of remittances by province in May shows that the National District received 39.2%, followed by Santiago (12.8%) and Santo Domingo (7.9%), meaning that 60.0% of remittances went to metropolitan areas, the report notes. Looking at the broader external sector, the BCRD expects foreign exchange earnings to grow favorably in 2024, driven by tourism, foreign direct investment (FDI), exports, and remittances, the report discloses. Estimates suggest that remittances and FDI flows will reach approximately US$10.4 billion and US$4.5 billion, respectively, by the end of the year, the report relays. These inflows contribute to the relative stability of the exchange rate, with the national currency depreciating by 1.9% by the end of May 2024 compared to the end of 2023, the report notes. Furthermore, increased external income flows have helped maintain robust international reserves, which stood at US$13,937.5 million at the end of May, covering about 5.0 months of imports and equivalent to 11.3% of GDP, exceeding IMF-recommended thresholds, the report discloses. The Central Bank remains committed to monitoring the economic environment and taking necessary measures to mitigate the impacts of international challenges on the Dominican economy, ensuring stability in prices and the exchange market, 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. =========== M E X I C O =========== ODYSSEY MARINE: Tribunal Updates on NAFTA Claim Against Mexico -------------------------------------------------------------- Odyssey Marine Exploration, Inc. disclosed in a Form 8-K Report filed with the U.S. Securities and Exchange Commission that on June 10, 2024, the Company received a letter from the International Centre for Settlement of Investment Disputes relating to the claim of Odyssey and Exploraciones Oceanicas S. de R.L. de C.V., a subsidiary of Odyssey, against the United Mexican States under Chapter Eleven of the North American Free Trade Agreement. The letter advised "that the Tribunal's determinations are in the process of being translated. The Tribunal will provide the parties with an exact date of dispatch with prior notice." About Odyssey Marine Odyssey Marine Exploration, Inc. and its subsidiaries are engaged in deep-ocean exploration. Our innovative techniques are currently applied to mineral exploration and other marine survey and contracted services. Its corporate headquarters are in Tampa, Florida. As of March 31, 2024, the Company has $20.6 million in total assets, $111.7 million in total liabilities, and a total deficit of $91.1 million. As of December 31, 2023, the Company has $22.8 million in total assets, $108.7 million in total liabilities, and $85.9 million in total stockholders' deficit. Tampa, Fla.-based Grant Thornton LLP, the Company's auditor since 2023, issued a "going concern" qualification in its report dated May 17, 2024, citing that the Company incurred net operating losses during the year ended 2023, and as of December 31, 2023, the Company's current liabilities exceeded its current assets by $26.6 million, and its total liabilities exceeded its total assets by $85.9 million. These conditions, along with other matters, raise substantial doubt about the Company's ability to continue as a going concern. =========================== V I R G I N I S L A N D S =========================== CHINA GREAT WALL: Fitch Assigns 'BB+(EXP)' Rating on Securities --------------------------------------------------------------- Fitch Ratings has assigned China Great Wall AMC (International) Holdings Company Limited's (GWAMCI, BBB-/Stable) proposed senior unsecured US dollar notes an expected rating of 'BBB-(EXP)' and proposed unsubordinated perpetual securities an expected rating of 'BB+(EXP)'. The senior notes and unsubordinated perpetual securities will be issued by China Great Wall International Holdings VI Limited, a wholly owned subsidiary of GWAMCI, and will be unconditionally and irrevocably guaranteed by GWAMCI, a wholly owned subsidiary of China Great Wall Asset Management Co., Ltd. (China Great Wall, BBB-/Stable). The proceeds of the proposed US dollar notes and proposed unsubordinated perpetual securities will be used for the repayment of the group's existing offshore debt. The final ratings on the proposed US dollar notes and unsubordinated perpetual securities are contingent upon the receipt of final documents conforming to information already received. KEY RATING DRIVERS The proposed senior notes are rated at the same level as GWAMCI's Issuer Default Rating (IDR) as they are guaranteed by GWAMCI and represent its unsubordinated, unconditional, unsecured obligations and rank at all times pari passu with all of its other present and future obligations. The proposed unsubordinated perpetual securities are notched down once from GWAMCI's rating. This bond is guaranteed by GWAMCI and ranks pari passu with GWAMCI's other senior obligations, but the one-notch difference reflects its higher non-performance risk due to the cumulative coupon deferral feature. Fitch equalises the ratings on GWAMCI with those of China Great Wall. The equalisation reflects its view that GWAMCI's business is an extension of China Great Wall's distressed-asset management business in the offshore market and it serves as the parent's wholly owned and sole overseas platform in Hong Kong to access offshore capital markets and diversify funding channels. For more information on China Great Wall and GWAMCI, please see Fitch Downgrades China Great Wall to 'BBB-'; Removes from Rating Watch Negative; Outlook Stable, published 13 June 2024. RATING SENSITIVITIES Factors that Could, Individually or Collectively, Lead to Negative Rating Action/Downgrade The ratings assigned to the debt are sensitive to changes in the ratings of GWAMCI. A downgrade in GWAMCI's ratings would lead to similar rating action on the debt. Factors that Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade An upgrade in GWAMCI's rating would lead to positive rating action for the debt. PUBLIC RATINGS WITH CREDIT LINKAGE TO OTHER RATINGS The ratings on the notes are linked to GWAMCI's ratings, which are linked to China Great Wall's ratings, underpinned by support from the Chinese sovereign (A+/Negative). ESG CONSIDERATIONS China Great Wall has an ESG Relevance Score of '4' for Management Strategy due to its continued strategic shift to refocus on its core distressed-asset management business. Its ability to execute its strategy under capital constraints underscores the company's focus on its policy role. This has a negative impact on the credit profile and is relevant to the ratings in conjunction with other factors. China Great Wall has an ESG Relevance Score of '4' for Governance Structure, given its high ownership concentration, with the Ministry of Finance owning over 70% of the company. Fitch also considers the company's governance structure as weaker, as it is not publicly listed. This has a negative impact on the company's credit profile and is relevant to the ratings in conjunction with other factors. China Great Wall has an ESG Relevance Score of '4' for Financial Transparency, reflecting the limited transparency of the company's asset quality. This has a negative impact on its 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 ----------- ------ China Great Wall International Holdings VI Limited senior unsecured LT BBB-(EXP) Expected Rating senior unsecured LT BB+(EXP) Expected Rating =============== X X X X X X X X =============== LATAM: CDB Urges Region to Adopt Measures to Avoid 'Ageing Trap' ---------------------------------------------------------------- RJR News reports that the Caribbean Development Bank is urging regional states to adopt measures to ensure that they do not succumb to the 'ageing trap'. This is where a country loses more workers, faster than they attract workers, according to RJR News. Statistician Dindial Ramrattan says, while migration is critical, the Caribbean is identified as one of the fastest ageing societies in the world, the report notes. Despite advances in health that have assisted in lowering the death rate, it was found that birth rates are falling, the report relays. "While we dug deeper into the data, there are certain other dynamics we as Caribbean policymakers need to now consider because the dichotomy between the private sector and the public sector when it comes to these variables is stark. We have to look at these employment rights, we have these treaties we have signed on to. Are they passing on to the public sector? Are we seeing the quality of treatment and engagement in the public sector? Another thing that was critical came at the younger age working population. The increased gender consciousness has benefitted us. We've seen early signs. The 18 to 24 categories are reporting similarly," he declared, the report adds. ********* S U B S C R I P T I O N I N F O R M A T I O N Troubled Company Reporter-Latin America is a daily newsletter co-published by Bankruptcy Creditors' Service, Inc., Fairless Hills, Pennsylvania, USA, and Beard Group, Inc., Washington, D.C., USA, Marites O. Claro, Joy A. Agravante, Rousel Elaine T. Fernandez, Julie Anne L. Toledo, Ivy B. Magdadaro, and Peter A. Chapman, Editors. Copyright 2024. All rights reserved. ISSN 1529-2746. This material is copyrighted and any commercial use, resale or publication in any form (including e-mail forwarding, electronic re-mailing and photocopying) is strictly prohibited without prior written permission of the publishers. Information contained herein is obtained from sources believed to be reliable, but is not guaranteed. The TCR Latin America subscription rate is US$775 per half-year, delivered via e-mail. Additional e-mail subscriptions for members of the same firm for the term of the initial subscription or balance thereof are US$25 each. For subscription information, contact Peter A. Chapman at 215-945-7000. . * * * End of Transmission * * *