/raid1/www/Hosts/bankrupt/TCRLA_Public/240708.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, July 8, 2024, Vol. 25, No. 136
Headlines
A R G E N T I N A
ARGENTINA: Milei Would Slow Crawling Peg if Inflation Cools
ARGENTINA: Officials Move to Shore up Bank Support for Debt Plan
B R A Z I L
BRAZIL: Fitch Affirms 'BB' LongTerm Foreign Currency IDR
BRAZIL: Industrial Output Falls for Second Straight Month
REFINARIA DE MATARIPE: Fitch Assigns 'B+' IDRs, Outlook Stable
C A Y M A N I S L A N D S
ASIA INNOVATIONS: Taps Teneo (Cayman) & Teneo Asia as Liquidators
FARFETCH LIMITED: Recognized as Foreign Main Proceeding
SIGMA FINANCE: Court to Hear Liquidators Appt. Request on July 11
C O L O M B I A
[*] Moody's Takes Rating Actions on 4 Colombian Banks
D O M I N I C A N R E P U B L I C
REASANTO: A.M. Best Gives B(Fair) Fin. Strength Rating
P U E R T O R I C O
AMC ENGINEERING: Seeks to Hire Gittens Diaz CPA as Accountant
X X X X X X X X
[*] BOND PRICING: For the Week July 1 to July 5, 2024
- - - - -
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A R G E N T I N A
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ARGENTINA: Milei Would Slow Crawling Peg if Inflation Cools
-----------------------------------------------------------
Manuela Tobias & Ignacio Olivera Doll at Bloomberg News report that
President Javier Milei outlined his vision for the future of
Argentina's currency policy, saying the peso could weaken at a
slower pace if inflation cools to a certain level.
Milei's remarks weren't an immediate policy change and he made
clear he wasn't adjusting the current two percent monthly pace of
the so-called "crawling peg" anytime soon, according to Bloomberg
News. However, he said the peg would slow to one percent once
monthly core or wholesale inflation reaches two percent, Bloomberg
News notes. In May, wholesale prices rose 3.5 percent on the month
while core prices climbed 3.7 percent, Bloomberg News relays.
"Once we get to two percent monthly inflation, we're going to go to
one percent, and then we'll basically go to zero percent," Milei
said in an interview with TN television, referring to the peg,
Bloomberg News says.
He provided no timeline, citing a variety of unknown economic
variables, such as monetary demand going forward, Bloomberg News
discloses. "When you get to zero percent, you don't have the rate
of devaluation as an issue anymore," he added.
Milei's spokesman didn't respond to a request for comment seeking
more clarity. The press office at Argentina's Central Bank declined
to comment.
Bloomberg News relays that the remarks are one of the few insights
from Milei on managing the crisis-prone currency, which investors
now worry has become overvalued again as the crawling peg policy is
forcing the Central Bank to sell foreign reserves to maintain the
current framework.
Even the International Monetary Fund expects Argentina to have a
more "flexible" currency policy, according to its most recent
program review of the country's US$44-billion program, Bloomberg
News notes. While consumer prices are up more than 100 percent
since Milei took office in December, the peso has only depreciated
59 percent at the official rate, creating a mismatch that's made
the cost of living more expensive in Argentina and discouraged
exporters from shipping abroad as the currency loses
competitiveness, Bloomberg News says.
Milei added that the value of the real in Brazil, Argentina's top
trade partner and a competitor in key commodity markets, wouldn't
have an impact on his government's foreign exchange policy,
Bloomberg News notes.
"A problem with Brazil's currency is a problem for Brazil, it's not
our problem," Milei said, answering a hypothetical question,
Bloomberg News relays. "We were the big devaluers of the 20th
century and that didn't make us more competitive," he added.
About Argentina
Argentina is a country located mostly in the southern half of South
America. Its capital is Buenos Aires. Javier Milei is the current
president of Argentina after winning the November 19, 2023 general
election. He succeeded Alberto Angel Fernandez in the position.
Argentina has the third largest economy in Latin America. The
country's economy is an upper middle-income economy for fiscal year
2019, according to the World Bank. Historically, however, its
economic performance has been very uneven, with high economic
growth alternating with severe recessions, income maldistribution
and in the recent decades, increasing poverty.
The IMF's executive board completed on August 23, 2023, the fifth
and six reviews of Argentina's 30-month Extended Fund Facility
(EFF), and approved a US$7.5-billion disbursement to Argentina as
part of the larger program, which refinances payments Argentina
owes the institution from a previous bailout that failed to
stabilize the economy in 2018. Argentina would receive another IMF
disbursement in November of about US$2.75 billion pending another
staff-level agreement and board approval.
S&P Global Ratings, on 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.
ARGENTINA: Officials Move to Shore up Bank Support for Debt Plan
----------------------------------------------------------------
Buenos Aires Times reports that senior government officials in
Argentina told bankers that they'll buy up new Treasury notes if
necessary to guarantee liquidity in the market as a key part of the
second phase of their economic overhaul, according to people with
direct knowledge of the matter.
Economy Minister Luis Caputo and Central Bank Governor Santiago
Bausili sought to shore up support in a meeting with executives
from private banks for a monetary policy pivot announced by
providing them assurances about the new framework, according to
Buenos Aires Times.
It was among a handful of measures the Milei administration dubbed
the second phase of its economic plan, the report notes. A key
piece of the new policy is a plan to swap out notes held at the
Central Bank for newly issued Treasuries, a change intended to tamp
down annual inflation that's running above 276 percent by
addressing one of the "faucets" of money printing, officials said,
the report relays.
A Central Bank spokesman said that there were more than 80 bank
executives in the meeting, the report discloses. Officials
reiterated that the crawling peg of two percent per month and
differential exchange rate for exporters will continue, the report
says. The Central Bank will discuss the new technical details at
its board meeting, people said, the report notes.
Argentina's sovereign dollar bonds fell around one cent per dollar
while the peso's parallel exchange rate weakened as much as 2.5
percent up to 1385 pesos per dollar, the report relays.
The report discloses that Bank representatives from across the
industry, including some of the nation's largest lenders, attended
the meeting at the Central Bank's offices in Buenos Aires. Caputo
and Bausili addressed the following:
-- The new short-term notes will be auctioned to banks,
allowing them to replace Central Bank repo notes
-- The Central Bank plans to issue a new regulation allowing it
to buy the notes, at technical value, in the secondary
market
-- The floating coupon of these notes will be the new monetary
policy rate; the term hasn't been defined
-- New debt notes will not be considered "Treasury risk,"
allowing the banks to buy the instruments without limits
-- The new Treasury notes will pay compound interest, which
will be converted into principal, similar to the
government's Lecap bonds
-- Treasury will deposit in a Central Bank account the amount
equivalent in pesos to the total of debt notes issued
-- Banks will not have to pay taxes known as "gross income" on
these Treasury notes, which means that they will effectively
receive returns of about three percentage points more
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.
===========
B R A Z I L
===========
BRAZIL: Fitch Affirms 'BB' LongTerm Foreign Currency IDR
--------------------------------------------------------
Fitch Ratings has affirmed Brazil's Long-Term Foreign Currency
Issuer Default Rating (IDR) at 'BB'. The Rating Outlook is Stable.
KEY RATING DRIVERS
Stable Outlook: Brazil's ratings are supported by its large and
diverse economy, high per-capita income, strong external finances
and resilience to shocks, and deep local markets supporting
sovereign financing flexibility and low foreign-currency debt
share. The ratings are constrained by weak economic growth
potential, low governance scores, budgetary rigidities, and high
and rising government debt/GDP. Uncertain prospects for reduction
of large fiscal deficits, despite the roll-out of a new fiscal
rule, remain a key source of macroeconomic vulnerability, with
adverse spill-overs for market confidence and monetary policy.
Fiscal Test in 2024: The 2024 budget targets a federal primary
deficit of 0% of GDP in 2024, down from 2.4% in 2023, which the
authorities expect to achieve within a 0.25pp tolerance range and
exempting new spending related to flooding (0.2pp so far). The
yield from tax measures intended to deliver this consolidation
remains uncertain, however, as the largest of these involves
settlements of tax debts that have yet to begin, and congress has
blocked other efforts. Fitch projects a primary deficit of 0.7% of
GDP in 2024, implying a modest deviation from the target. Brazil's
fiscal rule will require spending cuts should official projections
signal such a deviation, and there may be pressure to relax targets
to avoid this, posing a test of this new framework.
At the broader general government level, including subnational
governments and excluding the central bank, Fitch projects a 0.5%
primary deficit in 2024, and an overall deficit of 6.5%; well above
the 'BB' median of 2.6%.
Further Fiscal Challenges Ahead: Fiscal prospects after 2024 are
even more unclear. New revenue measures will be needed in coming
years to compensate for ones enacted that are transitory. Over the
medium term, inertial growth in indexed mandatory spending will
require severe compression of discretionary spending to comply with
a spending cap. Legal changes to mandatory spending are likely to
be needed, and while options are under consideration, they do not
have clear support within the government.
Rising Debt: Fitch projects large fiscal deficits will lift gross
general government debt from 74.4% of GDP in 2023 to 76.8% in 2024,
above the 'BB' median of 55.2%, and past 80% by 2026.
Interest/revenue is projected to remain stable at 16.7%, above the
'BB' median of 11.1%. The treasury's large cash buffer, which it
has drawn down to around 8% of GDP, has offered it flexibility to
manage high and volatile local borrowing costs.
Monetary Pivot: Inflation stood at 3.9% yoy in May 2024, within the
1.5pp tolerance interval around the 3% target, demonstrating some
lingering inertia but no major new pressures. Despite this, the
central bank (BCB) has quickly made a conservative policy pivot in
recent months, pausing the cycle of cuts to hold its Selic rate at
10.5% in light of greater domestic and external uncertainties.
Inflation expectations have drifted upward to 3.5%-4.0% for
end-2025 and end-2026, likely reflecting uncertainty around fiscal
policy as well as monetary policy, due to an upcoming turnover in
the BCB's presidency and board memberships.
Resilient Growth: Fitch projects Brazil's economy to grow 1.7% in
2024, down from 2.9% in 2023. Activity regained momentum in 1Q24
after two quarters of stagnation, as a strong labor market, credit
growth, and a minimum wage increase (to which social benefits are
linked) have supported consumption. Fitch has kept its projection
unchanged despite stronger-than-expected momentum early in the
year, due to tighter-than-expected monetary policy and the impact
of the flooding (the magnitude of which is not yet fully clear).
Growth Upside: Fitch projects real GDP growth of 2.1% in 2025 and
2.0% in 2026. Structural reforms enacted by prior governments or
being pursued by the current one are an upside to potential growth,
but they have yet to lift investment from low levels (16% of GDP),
which may be partly held back by policy uncertainties contributing
to high real interest rates. The Lula administration is working to
pass the enabling legislation for a landmark tax reform approved
last year, with significant upside to potential growth, but this
could take time to materialize due to uncertainties inherent in the
transition between the old and new system and long period allocated
for this.
External Strength: Fitch expects Brazil's trade surplus to remain
around the record level of USD99 billion seen in 2023, reflecting
output gains in commodity sectors, and supporting a lower current
account deficit of 1.7% of GDP in 2024. International reserves of
USD358 billion as of June remain a strong buffer to external
shocks, covering an estimated 8.8 month of external payments, the
highest in the 'BB' category.
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
- Public Finances: Material policy shifts that undermine fiscal
policy credibility, financing flexibility, and medium-term public
debt sustainability;
- Macro: Policies that undermine macroeconomic stability and/or
medium-term growth prospects.
Factors that Could, Individually or Collectively, Lead to Positive
Rating Action/Upgrade
- Public Finances: Progress on fiscal consolidation that durably
stabilizes government debt/GDP at around current levels;
- Macro: Evidence of an improvement in investment and economic
growth prospects in the context of macroeconomic stability and
improved governance.
SOVEREIGN RATING MODEL (SRM) AND QUALITATIVE OVERLAY (QO)
Fitch's proprietary SRM assigns Brazil a score equivalent to a
rating of 'BBB-' on the Long-Term Foreign-Currency IDR scale.
Fitch's sovereign rating committee adjusted the output from the SRM
to arrive at the final Long-Term Foreign Currency IDR by applying
its qualitative overlay (QO), relative to SRM data and output, as
follows:
- Macro: -1 notch, to reflect weak potential growth, largely held
back by a low investment rate and structural impediments, such as a
difficult business environment, which make it more challenging to
consolidate public finances and address social pressure.
- Public Finances: -1 notch, to reflect fiscal flexibility that is
hampered by the highly rigid spending profile and heavy tax burden,
which complicates adjustment to economic shocks, and a high debt
that Fitch projects to rise further over the medium term.
Fitch's SRM is the agency's proprietary multiple regression rating
model that employs 18 variables based on three-year centered
averages, including one year of forecasts, to produce a score
equivalent to a Long-Term Foreign Currency IDR. Fitch's QO is a
forward-looking qualitative framework designed to allow for
adjustment to the SRM output to assign the final rating, reflecting
factors within its criteria that are not fully quantifiable and/or
not fully reflected in the SRM.
COUNTRY CEILING
The Country Ceiling for Brazil is one notch above the Long-Term
Foreign Currency IDR. This reflects moderate constraints and
incentives, relative to the IDR, against capital or exchange
controls being imposed that would prevent or significantly impede
the private sector from converting local currency into foreign
currency and transferring the proceeds to non-resident creditors to
service debt payments.
Fitch's Country Ceiling Model produced a starting point uplift of
+0 notches above the IDR. Fitch's rating committee applied a +1
notch qualitative adjustment to this, under the Balance of Payments
Restrictions pillar to reflect Brazil's relatively open capital
account, and ongoing efforts to make the currency fully
convertible, that are not reflected by the high number of
capital-account restrictions recorded in the IMF's AREAER report
that feed into the model score.
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 Prior
----------- ------ -----
Brazil LT IDR BB Affirmed BB
ST IDR B Affirmed B
LC LT IDR BB Affirmed BB
LC ST IDR B Affirmed B
Country Ceiling BB+ Affirmed BB+
senior
unsecured LT BB Affirmed BB
Senior
Unsecured-Local currency LT BB Affirmed BB
BRAZIL: Industrial Output Falls for Second Straight Month
---------------------------------------------------------
Maria Eloisa Capurro at Bloomberg News reports that Brazil's
industrial output fell in May for a second straight month as
central bankers signal they are in no rush to resume rate cuts, and
tight credit conditions are likely to persist.
Production fell 0.9% from the month prior, less than the median
forecast for a decline of 1.4% in a Bloomberg survey of analysts,
according to Bloomberg News. The monthly contraction recorded in
April was revised to -0.8%, Bloomberg News relays. From a year
earlier, industry fell 1%, the national statistics agency reported,
Bloomberg News says.
Policymakers led by Roberto Campos Neto halted their monetary
easing campaign last month, leaving the benchmark rate at
10.5%,Bloomberg News notes. Fiscal woes and rising inflation
expectations have led economists to forecast borrowing costs will
remain steady for some time, cutting short hopes of looser credit
conditions among manufacturers and credit-driven industries,
Bloomberg News discloses.
May's data could begin to reflect the impact of heavy rains that
left large parts of Brazil's southern cities underwater, Bloomberg
News says. More than 94% of all economic activity in the region
was affected by the floods, impacting as much as 8% of the
country's formal jobs, according to central bank's studies,
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).
REFINARIA DE MATARIPE: Fitch Assigns 'B+' IDRs, Outlook Stable
--------------------------------------------------------------
Fitch Ratings has assigned Refinaria de Mataripe S.A. (REFMAT)
Long-Term Foreign and Local Currency Issuer Default Ratings (IDRs)
of 'B+'. The Rating Outlook is Stable. Fitch has affirmed MC Brazil
Downstream Trading S.a.r.l's USD1,800 million senior secured notes
due 2031 at 'B+'/'RR4'.
REFMAT ratings reflect moderate cash flow generation, as compressed
crack spreads continue pressuring financial performance. The
company implemented operating efficiency measures that have
somewhat offset the negative market pressures, helping stabilize
EBITDA generation and leverage metrics. Fitch expects REFMAT will
realize a weighted average crack spread of USD11.9/barrels (bbl)
between 2024 and 2027, higher than the 11.2/bbl realized in 2023.
Fitch has affirmed with a stable outlook and withdrawn MC Brazil
Downstream Participacoes S.A.'s Long Term Foreign and Local
Currency IDRs at 'B+' as MC Brazil Downstream Participacoes S.A.
was the object of a reverse merger whereby Refinaria de Mataripe
S.A. absorbed its former parent and is now the rated entity for the
group.
KEY RATING DRIVERS
Tight Spreads Offset by Commercial Strategy: Fitch estimates that
REFMAT's weighted average spread for 2024 will be USD11.2/bbl, up
from USD10.2/bbl in 2023. Despite price pressures exerted by
Petrobras, the expectation of stabilizing spreads across the
product portfolio firmly in mid-cycle values, in addition to an
improved product mix, decreased Fitch's gross leverage forecast to
4.5x in 2024, averaging 2.3x through the rating horizon. The
improving trend, in addition to the amortizing structure of the
issuer's debt, adequate levels of cash on hand of USD404 million at
1Q24, and credit lines of close to USD986 million, help support
REFMAT's liquidity in volatile periods.
Competitive Location: REFMAT's location in northeastern Brazil
provides a competitive advantage because most of the country's
refining capacity is located in the south and southeast. The
location and Brazil's structural deficit of refined products
support the company's continuation of import parity pricing seen in
Brazil in recent years. The company may be able to import medium
sweet crude oil feedstock at competitive prices given recent
geopolitical developments.
Operational Improvements: REFMAT executed a USD261 million capex
program in 2022, and USD 172 million in 2023, with investments that
improved the refinery's availability, efficiency, and extended its
residual life by at least 20 years and pushes major maintenance
capex to 11 years from the previous assumed five years. Fitch
expects that refining cost per barrel will decrease by at least 15%
to 8.3/bbl in 2024, which combined with improved product mix should
bolster EBITDA. Fitch is assuming an average utilization rate of
84% over the rated horizon, above the historical average of 72%, as
financial and operational trends improve. In case of a downturn,
the company has the ability to decrease utilization in order to
preserve cash.
Domestic Pricing Policies: REFMAT's cash flows are vulnerable to
domestic pricing policies for gasoline and diesel, as well as its
ability to source oil domestically. In 2022 and 2023, the company
faced challenges sourcing domestic oil, as independent oil
producers prioritized exports over domestic sales, as a tax
arbitrage. The high dependence from Petrobras for feedstock also
hinders the company's ability to optimize pricing.
Deleveraging Strategy: Fitch forecasts leverage will decrease to
4.5x in 2024, and the will remain below 2.0x through the rating
horizon, an improvement from 2023 metrics and expectations given
the success of commercial and operational initiatives to maximize
EBITDA, the sufficient liquidity, and deleverage mechanisms applied
to the bonds. DSCR is expected to exceed 2.0x through the rating
horizon, further reflecting the expectation of EBITDA and FFO
improvement.
DERIVATION SUMMARY
REFMAT's ratings reflect its status as a single-site,
medium-complexity refiner with a competitive geographic location.
The company has a nameplate capacity of 302,000 barrels per day
(bpd), which compares with CVR Energy, Inc.'s (BB-/Stable)
nameplate capacity approximately 206,500 bpd. REFMAT is smaller
than peers PBF Holding Company LLC (BB/Stable) with 1.023 million
bpd and KMG International NV (B+/Stable) with 564,000 barrels of
oil equivalent per day.
The company's location is comparable with other midcontinental
refineries in U.S., such as CVR Energy, which gives these companies
a competitive advantage in sourcing crude oil close to production
facilities while having more control on product pricing,
particularly for domestic sales. REFMAT should be well positioned
to take advantage of higher than normal very low sulfur fuel oil
crack spreads that may prevail for the next few years as a result
of its ability to access local markets that it was not accessing
before. The company continues to develop a domestic market for
VLSFO, which plays favorably in its product mix and resulting
blended realized pricing.
REFMAT's expected average gross leverage, defined as total
debt/EBITDA, of 2.8x is generally in line with 'B' to 'BB' peers,
with leverage of 1.4x-2.0x.
KEY ASSUMPTIONS
Fitch's Key Assumptions Within Its Rating Case for the Issuer
Include
- Brent oil prices of USD80/bbl in 2024, USD70/bbl in 2025, USD65
in 2026 and onwards;
- Crack spreads in Brazil's northeast region between
USD11.8-USD11.9 per bbl over the forecast period;
- Utilization rate of 84% through the rating horizon;
- Average operating expenses of USD7.8/bbl;
- Average capex of USD134 million per year over the rating cycle;
- Dividend payment of USD 200 million per year after 2026;
- Cash flows from hedging activities are not being incorporated in
the base case.
RECOVERY ANALYSIS
The recovery analysis assumes that REFMAT would be a going concern
(GC) in bankruptcy and that it would be reorganized rather than
liquidated. Using said approach, and with Fitch's assumptions,
Fitch's waterfall generated recovery computation (WGRC) for the
senior secured notes is in the 'RR2' band. However, according to
Fitch's Country-Specific Treatment of Recovery Ratings Criteria,
the Recovery Rating in Brazil for the senior secured notes is
capped at 'RR4'. This analysis is performed for all the rated debt
of corporate issuers rated B+ and below.
RATING SENSITIVITIES
- Greater operations and earnings diversification or evidence of
lower cash flow volatility;
- Sustained debt/EBITDA leverage at or below 3.0x;
- Sustained DSCR below 1.0x;
- Net debt to EBITDA above 4.5x on a sustained basis;
- EBITDA/interest expense below 2.0x;
- Cash balance below BRL2.0 billion.
LIQUIDITY AND DEBT STRUCTURE
Sufficient Liquidity: REFMAT's liquidity position benefits from a
six months debt service reserve account and an initial cash on hand
policy of USD300 million funded at time of acquiring Landulpho
Alves Refinery from Petroleo Brasileiro S.A. (Petrobras). This
liquidity position covers approximately two years of debt service,
which helps the company mitigate short-term effects in cash flow
from price volatility in crude oil or refined products. The company
also has access to USD 986 million in bank lines (including
guarantees) that are used, on average by 60%.
REFMAT's debt primarily consists of USD1.8 billion amortizing debt,
as well as any drawn amounts from its lines of credit. The company
may also incur limited additional indebtedness per the terms of the
indenture. The notes have a sculpted amortization, as well as cash
sweep provision driven by a combination of leverage and a target
bullet amortization of USD500 million in 2031. The notes also have
a minimum cash sweep mechanism of 25% of cash flow available sweeps
while net leverage is below 2.5x. The cash sweep increases by 25
percentage points for net leverage of 2.5x-3.0x, and reaches 75%
should leverage surpass net 3.0x.
The debt issuance benefits from a cash waterfall structure that
serves operating expenditures, crude purchases, capex, taxes and
commodity hedging first; senior secured debt service and other
financial obligations second; funding debt service reserve accounts
third; making any debt service from cash sweep provisions; and
lastly to make distributions to shareholders and other payments
subject to restricted payment tests. The senior secured notes are
collateralized by all material existing and future assets of the
company, shares of the issuer and company, rights in all material
contracts and by accounts receivable. The collateral excludes the
liquidity facility for crude purchases. The covenants under the
notes include restricted payment provisions.
ISSUER PROFILE
MC Brazil was formed for the purpose of acquiring and operating the
Landulpho Alves Refinery, now REFMAT, from Petrobras. The refinery
sells its products to Brazil's north and northeast regions and also
exports fuel oils.
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
MC Brazil Downstream Participacoes S.A. has an ESG Relevance Score
of '4' for GHG Emissions & Air Quality due to the nature of the
refining business and the emissions associated to it, which 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 Recovery Prior
----------- ------ -------- -----
MC Brazil Downstream
Participacoes S.A. LT IDR B+ Affirmed B+
LT IDR WD Withdrawn B+
LC LT IDR B+ Affirmed B+
LC LT IDR WD Withdrawn B+
MC Brazil Downstream
Trading S.a.r.l.
senior secured LT B+ Affirmed RR4 B+
Refinaria de
Mataripe S.A. LT IDR B+ New Rating
LC LT IDR B+ New Rating
===========================
C A Y M A N I S L A N D S
===========================
ASIA INNOVATIONS: Taps Teneo (Cayman) & Teneo Asia as Liquidators
-----------------------------------------------------------------
Asia Innovations Group Limited, which is in liquidation, appointed
Jeffrey Stower and Neema Griffin of Teneo (Cayman) Limited as
liquidators. The company also appointed Kim Lau as Teneo Asia
Limited as liquidator.
The liquidators can be reached at:
Jeffrey Stower
Neema Griffin
Griffin of Teneo (Cayman) Limited
Ground Floor, Harbour Place, 103 South Church Street
PO Box 10245, George Town, Cayman Islands
So Kim Lau
Teneo Asia Limited
13F, Wyndham Place
40-44 Wyndham Street, Central
Hong Kong
FARFETCH LIMITED: Recognized as Foreign Main Proceeding
-------------------------------------------------------
Farfetch Limited, which is in liqudation, was ordered to be
recognized as a foreign main proceeding in accordance with the
UNCITRAL Model Law on cross border insolvency as set out in the
Schedule 1 to the Cross-Border Insolvency Regulations.
The foreign representatives are:
Alexander Lawson
Christopher Kennedy
Alvarez & Marsal Cayman Islands Limited
Flagship Building
PO Box 2507, 2nd Floor
142 Seafarers Way, George Town
Grand Cayman KY1-1104
SIGMA FINANCE: Court to Hear Liquidators Appt. Request on July 11
-----------------------------------------------------------------
Sigma Finance Corporation, which is in liquidation, submitted a
petition to appoint Messrs David Griffin and Iain Gow of FTI
Consulting (Cayman) Ltd be appointed as joint official liquidators.
The hearing of the petition will take place on July 17, 2024,
at the Law Courts, George Town, Grand Cayman at 10:00 A.M.
The company has also filed an application seeking leave to
withdraw a historic winding up petition dated Dec. 19, 2008 filed
in Cause No. 594 of 2008 filed in Cause No. 594 of 2008, which will
be determined by the Grand Court administratively of at the above
listed hearing.
===============
C O L O M B I A
===============
[*] Moody's Takes Rating Actions on 4 Colombian Banks
-----------------------------------------------------
Moody's Ratings, in late June 2024, took rating actions on four
Colombian banks, including Bancolombia S.A. (Bancolombia), Banco
Davivienda S.A. (Davivienda), Banco de Bogota S.A. (Banco de
Bogota) and BBVA Colombia S.A. (BBVA Colombia). All ratings and
assessments assigned to these banks were affirmed and the outlook
on their long-term bank deposits and senior unsecured debt ratings
(where applicable) was changed to negative, from stable. In
addition, the ratings of Grupo Aval Acciones y Valores S.A. (Grupo
Aval) and Grupo Aval Limited were affirmed, while the outlook on
Grupo Aval's long-term issuer ratings and Grupo Aval Limited's
backed senior unsecured debt rating remained negative.
The rating actions were prompted by the change to negative from
stable of the outlook on the Government of Colombia's (Colombia)
Baa2 sovereign debt rating.
RATINGS RATIONALE
(1) OUTLOOKS CHANGED TO NEGATIVE FROM STABLE
The change of outlook to negative from stable on the long-term
deposit ratings and/or long-term senior unsecured debt ratings
(where applicable) of Bancolombia, Banco de Bogota, Davivienda and
BBVA Colombia were driven by the change to negative of the outlook
on Colombia's sovereign debt rating. As these banks' deposit and
senior unsecured debt ratings benefit from an uplift due to Moody's
assessment of government support, a downgrade of the sovereign
would imply a weaker capacity to provide support and could
therefore lead to a downgrade of the banks' supported ratings.
Moody's consideration of government support captures the large
deposit franchises of the affected banks, Moody's assessment of the
Colombian authorities' willingness to provide support to
systemically important distressed financial institutions; and the
material systemic consequences of an unsupported failure of any of
them. While the government's willingness to support the banks, if
necessary, remains unchanged in Moody's opinion, its financial
capacity is reflected by its rating, and therefore a downgrade
would imply a deterioration in such capacity.
In addition, the negative outlook on Colombia's sovereign rating
reflects factors that could weigh negatively on banks' operating
environment, including less favorable macroeconomic and financial
conditions, and heightened political noise that continues to weigh
on investor confidence. Weak investment dynamics have contributed
to slower-than-expected economic growth. These factors could
further limit banks' business prospects and lead to negative
pressure on their asset quality, profitability and capital.
(2) RATINGS AFFIRMATION
BANCOLOMBIA S.A.
The affirmation of Bancolombia S.A.'s ba1 baseline credit
assessment (BCA) reflects the strength of its business model that
has been sustained even in challenging conditions both in its core
Colombian operation and in its Central American subsidiaries. The
bank's BCA incorporates the strong and above-peers earnings
generation, as well as its ample access to stable core funding,
which is supported by its well-established market position in
Colombia. These strengths are counterbalanced by Bancolombia's high
problem loan ratio (6.0% of gross loans in March 2024, measured as
loans classified as stage 3 under IFRS) that is however cushioned
by adequate loan loss reserves; and moderate capitalization and
liquidity profiles. The bank's strengths partially offset its
exposure to riskier operating environments in countries of Central
America, which result in a weaker weighted Macro Profile for the
bank at Moderate, relative to Colombia's Moderate+.
The affirmation of Bancolombia's Baa2 long-term deposit and senior
unsecured debt ratings reflects: (1) the affirmation of the bank's
ba1 BCA; and (2) Moody's assessment of a very high probability of
government support considering the bank's systemic importance,
which continues to result in a two-notch uplift from the bank's
BCA.
BANCO DE BOGOTA S.A.
By affirming Banco de Bogota's ba1 BCA, Moody's acknowledge the
bank's resilient earnings generation capacity as a large commercial
bank in Colombia, with 12% loan and deposit market share as of
March 2024, a stable access to domestic deposits and adequate
capital position. These strengths are partially offset by the
bank's moderate liquidity buffers, relatively weak asset quality
evidenced by high level of impaired loans classified as stage 3,
and below-peers loan loss reserve coverage.
The affirmation of Banco de Bogota's Baa2 long-term deposit ratings
reflects: (1) the affirmation of the bank's ba1 BCA; and (2)
Moody's assessment of a very high probability of government support
considering the bank's systemic importance, which continues to
result in a two-notch uplift from the bank's BCA.
GRUPO AVAL
The affirmation of Grupo Aval's rating considers Moody's assessment
that Banco de Bogota's BCA remains adequately positioned at ba1. As
a holding company, Grupo Aval has its Ba2 issuer rating anchored at
Banco de Bogota's ba1 BCA, capturing the importance of the bank as
its main subsidiary comprising close to 63% of its dividend income
in 2023 and 78% in 2022. Grupo Aval's rating is one notch below the
bank's BCA due to structural subordination. In addition, the
holding company has a relatively high double leverage ratio at 123%
in March 2024, while the ratings are supported by its relatively
low near-term refinancing risks, historically adequate liquidity
profile and good coverage of interest with dividends and interest
income. In turn, Grupo Aval Limited's Ba2 backed senior unsecured
debt rating is based on Grupo Aval's irrevocable and unconditional
guarantee of Grupo Aval Limited's liabilities.
The negative outlook on Grupo Aval and Grupo Aval Limited's long
term ratings continue to capture the company's relatively high
double leverage ratio, despite recent reduction, calculated
considering the combined value of the holding company's equity and
hybrid equity investments divided by the holding company's own
equity. If persistent over time, high double leverage could lead to
an increase in the notching gap between Grupo Aval's rating and
Banco de Bogotá's ba1 BCA.
BANCO DAVIVIENDA S.A.
Moody's affirmed Davivienda's BCA at ba2 still reflecting the
bank's large and well-established commercial franchise in Colombia,
with operations in Central America as well. Despite that, the
bank's ba2 BCA has been challenged by weaker profitability and
asset quality metrics compared to historical levels. Davivienda
reported net losses in 2023 and in first quarter 2024 reflecting a
material rise in loan loss provisions, as well as falling net
interest margins as a result of the slowdown of business activity
in Colombia, amid weakened economic conditions, and also by higher
funding costs driven by a high monetary policy rate and the
implementation of the NFSR in Colombia, particularly between March
and December 2023. Despite recent increase in Davivienda's problem
loan ratio, measured as stage 3 loans under IFRS to gross loans, to
4.85% in March 2024, from 3.74% one year prior, it remains below
those of its large peers. In terms of capitalization, Davivienda's
common equity tier 1 (CET1) ratio of 10.4% maintained adequate
cushion over minimum regulatory requirement, following the bank's
public share offering also last March.
The affirmation of Davivienda's Baa3 long-term deposit ratings
reflects: (1) the affirmation of the bank's ba2 BCA; and (2)
Moody's unchanged assessment of a very high probability of
government support, which results in a two-notch uplift to the
bank's deposit ratings.
BBVA COLOMBIA S.A.
BBVA Colombia's standalone BCA was affirmed at ba1. However,
Moody's view that there is a negative pressure on the bank's
standalone BCA that incorporates recent weakening of its
profitability, capital and asset quality metrics. In March 2024,
BBVA Colombia posted net losses that reflected an increase in loan
loss provision expenses in response to an acceleration of problem
loans in the segment of consumer portfolio. The bank's problem loan
ratio went up to 5.18% in March 2024, from 4.40% one year prior. At
the same time, BBVA Colombia's capitalization, measured as
regulatory CET1 ratio, was 7.8% in March 2024, only slightly above
the minimum level of 7.0%. In April 12, 2024, the bank announced it
will receive a 210 million euro capital injection from its parent
bank, therefore, improving its core capitalization. Despite that,
should BBVA Colombia report sustained negative bottom-line results
in the next two quarters, its capital position could be pressured
further, challenging its standalone BCA.
The affirmation of BBVA Colombia Baa2 long-term deposit ratings
reflects: (1) the affirmation of the bank's ba1 BCA; (2) Moody's
unchanged assumption of a moderate probability of support from its
parent Banco Bilbao Vizcaya Argentaria, S.A. (BBVA) (A2 developing,
baa2), resulting in one notch of uplift to the bank's Adjusted BCA
of baa3; and (3) Moody's unchanged assessment of a high probability
of government support, which results in an one-notch uplift to the
bank's deposit ratings from its adjusted BCA.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
Considering the negative outlook on Colombia's sovereign rating,
upward rating pressure is unlikely at this time for these four
Colombian banks. However, a stabilization of the outlook on the
sovereign rating could lead to a stabilization of these banks'
ratings outlook, provided that there is no negative pressure on
their BCAs. Upward pressure on these banks' BCAs would stem from
material and consistent improvement in their credit fundamentals,
particularly asset quality and capital, coupled with a recovery of
profitability levels and an improvement of Colombia's or Central
America's operating environment.
These four banks' deposit ratings and senior unsecured debt ratings
(where appliable), which benefit from government support uplift,
would face negative pressure in case Colombia's sovereign debt
rating is downgraded, which supports the negative outlook being
aligned with the outlook on the sovereign rating. Additionally, all
of the banks' long-term ratings would face downward pressure if
their BCAs were downgraded. These banks' BCAs could be downgraded
if recent negative pressure on asset quality extends over time and
leads to higher provisioning needs, affecting their earnings and,
ultimately, capitalization.
Either upward or downward pressures on Grupo Aval and Grupo Aval
Limited's ratings would be associated with an upward or downward
change of Banco de Bogota's BCA, because the holding company's Ba2
issuer rating is anchored to the bank's BCA. However, Grupo Aval's
ratings could also face downward pressures from an additional
increase on the holding company's double leverage ratio, or if a
gradual reduction in the metric did not materialize, or a
persistent deterioration in its interest coverage ratio and
liquidity buffers.
LIST OF AFFECTED RATINGS
Issuer: Banco Davivienda S.A.
Affirmations:
Adjusted Baseline Credit Assessment, Affirmed ba2
Baseline Credit Assessment, Affirmed ba2
ST Counterparty Risk Assessment, Affirmed P-2(cr)
LT Counterparty Risk Assessment, Affirmed Baa2(cr)
ST Counterparty Risk Rating (Foreign Currency), Affirmed P-2
ST Counterparty Risk Rating (Local Currency), Affirmed P-2
LT Counterparty Risk Rating (Foreign Currency), Affirmed Baa2
LT Counterparty Risk Rating (Local Currency), Affirmed Baa2
ST Bank Deposits (Foreign Currency), Affirmed P-3
ST Bank Deposits (Local Currency), Affirmed P-3
Subordinate (Foreign Currency), Affirmed B2 (hyb)
LT Bank Deposits (Foreign Currency), Affirmed Baa3 NEG from STA
LT Bank Deposits (Local Currency), Affirmed Baa3 NEG from STA
Outlook Actions:
Outlook, Changed To Negative From Stable
Issuer: BBVA Colombia S.A.
Affirmations:
Adjusted Baseline Credit Assessment, Affirmed baa3
Baseline Credit Assessment, Affirmed ba1
ST Counterparty Risk Assessment, Affirmed P-2(cr)
LT Counterparty Risk Assessment, Affirmed Baa2(cr)
ST Counterparty Risk Rating (Foreign Currency), Affirmed P-2
ST Counterparty Risk Rating (Local Currency), Affirmed P-2
LT Counterparty Risk Rating (Foreign Currency), Affirmed Baa2
LT Counterparty Risk Rating (Local Currency), Affirmed Baa2
ST Bank Deposits (Foreign Currency), Affirmed P-2
ST Bank Deposits (Local Currency), Affirmed P-2
Subordinate (Foreign Currency), Affirmed Ba1
LT Bank Deposits (Foreign Currency), Affirmed Baa2 NEG from STA
LT Bank Deposits (Local Currency), Affirmed Baa2 NEG from STA
Outlook Actions:
Outlook, Changed To Negative From Stable
Issuer: Bancolombia S.A.
Affirmations:
Adjusted Baseline Credit Assessment, Affirmed ba1
Baseline Credit Assessment, Affirmed ba1
ST Counterparty Risk Assessment, Affirmed P-2(cr)
LT Counterparty Risk Assessment, Affirmed Baa2(cr)
ST Counterparty Risk Rating (Foreign Currency), Affirmed P-2
ST Counterparty Risk Rating (Local Currency), Affirmed P-2
LT Counterparty Risk Rating (Foreign Currency), Affirmed Baa2
LT Counterparty Risk Rating (Local Currency), Affirmed Baa2
ST Bank Deposits (Foreign Currency), Affirmed P-2
ST Bank Deposits (Local Currency), Affirmed P-2
Subordinate (Foreign Currency), Affirmed Ba3 (hyb)
Senior Unsecured (Foreign Currency), Affirmed Baa2 NEG from STA
LT Bank Deposits (Foreign Currency), Affirmed Baa2 NEG from STA
LT Bank Deposits (Local Currency), Affirmed Baa2 NEG from STA
Outlook Actions:
Outlook, Changed To Negative From Stable
Issuer: Grupo Aval Acciones y Valores S.A.
Affirmations:
ST Issuer Rating (Foreign Currency), Affirmed NP
ST Issuer Rating (Local Currency), Affirmed NP
LT Issuer Rating (Foreign Currency), Affirmed Ba2 NEG
LT Issuer Rating (Local Currency), Affirmed Ba2 NEG
Outlook Actions:
Outlook, Remains Negative
Issuer: Banco de Bogota S.A.
Affirmations:
Adjusted Baseline Credit Assessment, Affirmed ba1
Baseline Credit Assessment, Affirmed ba1
ST Counterparty Risk Assessment, Affirmed P-2(cr)
LT Counterparty Risk Assessment, Affirmed Baa2(cr)
ST Counterparty Risk Rating (Foreign Currency), Affirmed P-2
ST Counterparty Risk Rating (Local Currency), Affirmed P-2
LT Counterparty Risk Rating (Foreign Currency), Affirmed Baa2
LT Counterparty Risk Rating (Local Currency), Affirmed Baa2
ST Bank Deposits (Foreign Currency), Affirmed P-2
ST Bank Deposits (Local Currency), Affirmed P-2
Subordinate (Foreign Currency), Affirmed Ba2
Senior Unsecured (Foreign Currency), Affirmed Baa2 NEG from STA
LT Bank Deposits (Foreign Currency), Affirmed Baa2 NEG from STA
LT Bank Deposits (Local Currency), Affirmed Baa2 NEG from STA
Outlook Actions:
Outlook, Changed To Negative From Stable
Issuer: Grupo Aval Limited
Affirmations:
Backed Senior Unsecured (Foreign Currency), Affirmed Ba2 NEG
Outlook Actions:
Outlook, Remains Negative
===================================
D O M I N I C A N R E P U B L I C
===================================
REASANTO: A.M. Best Gives B(Fair) Fin. Strength Rating
------------------------------------------------------
AM Best has assigned a Financial Strength Rating of B (Fair) and a
Long-Term Issuer Credit Rating of "bb+" (Fair) to Reaseguradora
Santo Domingo, S.A. (REASANTO) (Dominican Republic). The outlook
assigned to these Credit Ratings (ratings) is stable.
The ratings reflect REASANTO's balance sheet strength, which AM
Best assesses as strong, as well as its adequate operating
performance, limited business profile and appropriate enterprise
risk management (ERM).
REASANTO is a reinsurance company founded in 1973 in Santo Domingo,
Dominican Republic, where it is currently located. The company
focuses its product offerings in the fire and allied business lines
in the Dominican Republic. Business profile is considered limited
given its geographic and business line concentration.
REASANTO's balance sheet strength assessment of strong is based on
a strong level of risk-adjusted capitalization in 2023, as measured
by Best's Capital Adequacy Ratio (BCAR). The company continues to
adjust its exposures to probable maximum losses (PMLs) through
active management of its reinsurance program, aiming to reduce
volatility in its capital base. Mitigating these factors is a
conservative investment strategy and an adequate reinsurance
panel.
Operating performance is assessed as adequate, driven by consistent
net income that is backed by contained expenses and claims targeted
to diminish deviations in REASANTO's budget and improve its
underwriting quality. The company's ERM is considered appropriate
with defined policies and procedures to maintain risk tolerance
levels. These are well-adhered to and reviewed periodically.
The stable outlooks reflect AM Best expectation that the company's
risk-adjusted capitalization will be maintained in the current
levels as its business strategy to expand geographically deploys.
Positive rating actions could occur if the company's balance sheet
strength improves as a result of a sustained growth in capital base
as well as its prudent management supportive of stable
risk-adjusted capitalization levels.
Negative rating actions could take place if the company's capital
base erodes from weakened operating performance results.
=====================
P U E R T O R I C O
=====================
AMC ENGINEERING: Seeks to Hire Gittens Diaz CPA as Accountant
-------------------------------------------------------------
AMC Engineering, Inc. seeks approval from the U.S. Bankruptcy Court
for the District of Puerto Rico to employ Gittens Diaz CPA, LLC as
its accountant.
The firm's services include:
(a) reconcile financial information to assist the Debtor in
the preparation of monthly operating reports;
(b) assist in the reconciliation and clarification of proof
of claims filed and amount due to creditors; and
(c) assist the Debtor and its counsel in the preparation of
the supporting documents for the Chapter 11 Reorganization
Plan.
The hourly rates of the firm's accountant and staff are as
follows:
Gerard Gittens Diaz, CPA $70
Staff Accountant $40
In addition, the firm will seek reimbursement for expenses
incurred.
Mr. Diaz disclosed in a court filing that the firm is a
"disinterested person" as the term is defined in Section 101(14) of
the Bankruptcy Code.
The firm can be reached through:
Gerard Gittens Diaz, CPA
Gittens Diaz CPA, LLC
Local C-6 Ave. Luis Munoz Marin
Urb Cargaux
Caguas, PR 00725
Telephone: (787) 961-9677
Facsimile: (787) 733-0735
Email: ggittens@gittensdiazcpa.com
About AMC Engineering
AMC Engineering Inc. filed its voluntary petition for relief under
Chapter 11 of the Bankruptcy Code (Bankr. D.P.R. Case No. 24-02414)
on June 9, 2024, disclosing under $1 million in both assets and
liabilities.
Judge Edward A. Godoy oversees the case.
The Debtor tapped Jorge R. Collazo Law Office as counsel and
Gittens Diaz CPA, LLC as accountant.
===============
X X X X X X X X
===============
[*] BOND PRICING: For the Week July 1 to July 5, 2024
-----------------------------------------------------
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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