/raid1/www/Hosts/bankrupt/TCRLA_Public/240711.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, July 11, 2024, Vol. 25, No. 139
Headlines
A R G E N T I N A
ARGENTINA: Milei Taps Federico Sturzenegger to Deregulate Country
B O L I V I A
BOLIVIA: Controversy Surrounds Lithium and Alleged Coup
C A Y M A N I S L A N D S
GLOBAL AIRCRAFT: Fitch Affirms & Withdraws 'BB' IDR, Outlook Stable
D O M I N I C A N R E P U B L I C
DOMINICAN REPUBLIC: No More Financial Blackouts, Says President
H O N D U R A S
BANCO ATLANTIDA: Fitch Affirms 'B' LongTerm IDRs, Outlook Stable
J A M A I C A
JAMAICA: Manufacturers Hit With Average 3% Rise in Input Costs
JAMAICA: Sees 9.3% Annual Inflation in Equipment Prices
JAMAICA: Won't Be Drawing Down on Some Emergency Financing Options
X X X X X X X X
[*] LATAM: CDB Promises Help to Member Countries Affected by Beryl
- - - - -
=================
A R G E N T I N A
=================
ARGENTINA: Milei Taps Federico Sturzenegger to Deregulate Country
-----------------------------------------------------------------
Manuela Tobias at Bloomberg News reports that President Javier
Milei officially tapped former Argentine central bank chief
Federico Sturzenegger to completely revamp the government, after
months of rumors swirling about the adviser's arrival in Cabinet.
Sturzenegger, 58, will lead a new Deregulation & State
Transformation Ministry, with the express purpose of further
shrinking the national government's footprint and cutting red tape,
according to Bloomberg News.
The designation was formally announced in the Official Gazette.
The new minister was the leading architect behind Milei's original
draft of structural reforms that passed Congress after six months
of negotiations that watered down the legislation significantly,
the report notes. In his new role, he'll be tasked with the
optimization and modernization of Argentina in order to cut public
spending and make the administration more efficient, according to
the gazette, Bloomberg News relays.
This is Sturzenegger's third time in a key state position. He first
held public office in 2001, when he had a brief stint as econonic
policy secretary under former president Fernando de la Rúa,
Bloomberg News relays. He returned from 2015 to 2018 to lead the
Central Bank under former president Mauricio Macri. He holds a
doctorate in economics from the Massachusetts Institute of
Technology, Bloomberg News notes.
Sturzenegger's new role sparked rumours around the fate of Economy
Minister Luis Caputo, given tensions between the two during the
2018 financial crisis in Macri's government, when Caputo was
finance secretary and Sturzenegger led the monetary authority,
Bloomberg News discloses. Sturzenegger said his credibility had
deteriorated before resigning amid a peso sell-off at the time, and
Macri replaced him with Caputo, who only lasted a few months in the
role, Bloomberg News relays.
Since joining Milei's government, both men have lauded each other,
Bloomberg News notes.
"We are completely compatible, he does something that is
fundamental for the country and he does it better than anybody,"
Caputo told reporters during a press conference, when asked about
Sturzenegger's arrival. "Argentina is a mess of obstacles and
since we're looking long-term, the most fundamental aspect is to
unwind all of that," 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.
=============
B O L I V I A
=============
BOLIVIA: Controversy Surrounds Lithium and Alleged Coup
-------------------------------------------------------
Juan Martinez at Rio Times Online reports that President Luis Arce
of Bolivia alleges a plot involving both active and retired
military officers linked to the events of June 26, called a coup.
These individuals reportedly played roles in the 2019 events, which
also have been described as a coup, according to Rio Times Online.
Their goal, according to Arce, is to undermine democracy and seize
control of Bolivia's vast lithium reserves, the report notes.
However, these allegations are contentious, the report relays.
Both, General Zuniga and the Argentine secret service claim Arce
staged the whole event, the report discloses.
Governments have been known to orchestrate crises to influence
public opinion and consolidate power, the report relays.
Until resolving these doubts, observers must view Arce's assertions
cautiously as potential attempts to divert attention, the report
discloses.
Bolivia holds the world's largest lithium reserves, a critical
resource for batteries and technology, the report notes.
Control over these reserves is of considerable economic and
strategic importance, making the stakes high, the report relays.
On June 26 2024, a military faction led by Commander Juan José
Zúñiga unexpectedly seized the capital's central square and
forcibly entered the presidential palace, the report discloses.
So far, authorities have detained over 70 individuals, with 23
others in preventive detention as investigations continue, the
report notes.
Arce has dismissed claims of a "self-coup" as tactics to demobilize
the Bolivian people, the report relays.
These claims suggest efforts to discourage public engagement,
though Arce maintains that the people will not be deceived and will
continue to defend democracy, the report adds.
===========================
C A Y M A N I S L A N D S
===========================
GLOBAL AIRCRAFT: Fitch Affirms & Withdraws 'BB' IDR, Outlook Stable
-------------------------------------------------------------------
Fitch Ratings has affirmed and withdrawn the 'BB' Long-Term Issuer
Default Rating (IDR) of Global Aircraft Leasing Co. Ltd (GALC).
Fitch has also withdrawn the 'BB-(EXP)' expected ratings assigned
to the proposed $1.95 billion issuance of senior secured
payment-in-kind (PIK) toggle notes due in 2028 co-issued by GALC
and Global Sea Containers Two Limited (GSCL II).
Fitch has withdrawn the expected debt rating as the transaction is
no longer expected to proceed as previously envisaged. Therefore
the expected rating is no longer expected to convert to a final
rating.
Concurrently, Fitch has also affirmed and withdrawn the Long-Term
IDR of 'BB' assigned to GALC as its ratings are credit-linked to
the senior secured PIK issuance which will no longer proceed as
planned. Prior to the withdrawal, the Rating Outlook on GALC's
Long-term IDR was Stable.
KEY RATING DRIVERS
Prior to the withdrawal, GALC's 'BB' Long-Term IDR was two notches
below Avolon Holdings Limited's (Avolon) 'BBB-' IDR, reflecting
higher default risk of the holding company relative to the aircraft
lessor operating subsidiary. This was due to the high double
leverage and significant influence of minority shareholder, ORIX
Corporation (A-/Stable), which owns the remaining 30% outstanding
ordinary shares of Avolon.
The expected rating assigned to the notes was anchored to GALC's
Long-Term IDR, which Fitch deems as having the higher credit
quality of the two co-issuers. If the dividend payment capacity of
the lower-credit quality subsidiary (GSCL II) is diminished, Fitch
assumes the higher rated subsidiary (GALC) would be responsible for
fulfilling the obligations under the note indenture in full given
the joint and several guarantee.
The Key Rating Drivers applicable to GALC's Long-Term IDR have not
changed materially since Fitch's last rating action. For further
details, see Fitch Rates Global Aircraft Leasing 'BB'; Assigns
Expected 'BB-' Rating to Sr PIK Toggle Notes.
RATING SENSITIVITIES
Factors that Could, Individually or Collectively, Lead to Negative
Rating Action/Downgrade
Negative rating sensitivities are not applicable as the ratings
have been withdrawn.
Factors that Could, Individually or Collectively, Lead to Positive
Rating Action/Upgrade
Positive rating sensitivities are not applicable as the ratings
have been withdrawn.
DEBT AND OTHER INSTRUMENT RATINGS: RATING SENSITIVITIES
Rating sensitivities for the debt instruments are not applicable as
the ratings have been withdrawn.
Entity/Debt Rating Prior
----------- ------ -----
Global Aircraft
Leasing Co., Ltd. LT IDR BB Affirmed BB
LT IDR WD Withdrawn BB
senior secured LT WD Withdrawn BB-(EXP)
Global Sea Containers
Two Limited
senior secured LT WD Withdrawn BB-(EXP)
===================================
D O M I N I C A N R E P U B L I C
===================================
DOMINICAN REPUBLIC: No More Financial Blackouts, Says President
---------------------------------------------------------------
Dominican Today reports that during his fourth accountability
speech, President Luis Abinader affirmed that blackouts in the
country are a thing of the past since the Energy Distribution
Companies supply 98% of the national electricity demand, leaving
behind the blackouts caused by State debts, as had happened in the
past.
In this sense, the president recognizes a long way to go. Still,
during his term of office, they strengthened the national electric
sector, injecting hundreds of megawatts into the energy system in
less than four years.
"Regarding distribution, we can say that undoubtedly, we have many
opportunities for improvements in the financial and technical part
of the EDEs, but we cannot fail to highlight that we currently
serve 98% of the energy demand through the electricity
distributors. Blackouts are caused by breakdowns. Today, in our
country, there are no more financial blackouts," said the
president
Likewise, he mentioned his government's axes in this sector,
allowing him to execute public policies to improve one of the most
criticized sectors during the last decades.
"Our energy policy is based on 5 lines of action; the expansion of
the electricity generation park, modernization of the transmission
system, sanitation and management of distribution companies, the
promotion of electricity production from renewable sources and the
updating of the legal and regulatory framework of the electricity
sector," he said.
President Luis Abinader affirms that the EDEs supply 98% of the
local demand.
The president also pointed out the growth in distribution that the
Dominican Republic has registered, adding some 2,000 megawatts to
the system, only from thermal generation.
"As an example of our policy, with the public tender of 800 new
megawatts launched last November, added to the 800 megawatts
tendered in 2021 and which will be built in Manzanillo, plus the
400 megawatts tendered urgently also in 2021 and already in
operation, we have tendered so far this administration some 2000
new megawatts of thermal generation, a milestone in the history of
the public electricity sector in the Dominican Republic," he said.
About what has been done during his term in office compared to past
administrations, Abinader said that "it is enough to point out that
during the four periods of government from 2004 to 2020, only one
tender was made for a new generation in the country. In 2023, 273
new megawatts of renewable energy started production out of the 570
MW installed during my administration, totaling 1126 MW installed
since 2011."
According to the governor, these actions reduced the "consumption
of fossil fuels for the production of electricity, with savings of
approximately 280 million dollars."
He also assures that "the expansion of renewable energies
continues, and a total of 26 projects are currently under
construction that will contribute 1,451 new megawatts expected to
start production between this year 2024 and next year 2025."
"As can be seen, the country is undergoing a broad and deep process
of transformation and modernization of its electricity generation
park. The strategic objectives of this process are to provide our
electricity system for the first time and in the first place with a
cold reserve of generation close to 15 or 20% of the maximum annual
power demand. And, secondly, through an adequate and flexible
combination of types of generating plants and renewable sources, to
guarantee the security of energy supply in any international
scenario that makes it difficult to access any of the fuels
required to produce electricity," he emphasized.
Abinader is committed to the modernization of the energy sector, as
he stated during his speech.
Luis Abinader also highlighted the confidence his administration
has generated in foreign investment, which is reflected in the
millions of dollars these projects have injected into the Dominican
Republic.
"It is within the framework of this strategy that the government
has managed to attract large investments of local and foreign
capital to develop energy projects. Precisely, last year, the
Energy sector led foreign direct investment in the Dominican
economy totaling US$826.9 million according to figures from the
Central Bank as of September. It is expected that the final
bulletin will reveal that foreign direct investment in energy for
the whole year exceeded one billion dollars, which would mean a
historic milestone in this sector," said the president
The Dominican head of state made the declarations during his speech
on the 180th anniversary of Dominican Independence, representing
this presidential term's last speech.
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.
===============
H O N D U R A S
===============
BANCO ATLANTIDA: Fitch Affirms 'B' LongTerm IDRs, Outlook Stable
----------------------------------------------------------------
Fitch Ratings has affirmed the Long-Term (LT) and Short-Term (ST)
Issuer Default Ratings (IDRs) for Banco Atlantida, S.A.'s
(Atlantida) at 'B'. Fitch has also affirmed Inversiones Atlantida,
S.A. (Invatlan) LT IDR at 'B-' and ST IDR at 'B'. Fitch has
additionally affirmed Atlantida's Viability Rating (VR) at 'b' and
its National LT and ST ratings at 'A+(hnd)' and 'F1(hnd)',
respectively. The Rating Outlook on the LT IDRs and National LT
rating is Stable. Fitch has also affirmed Atlantida's Government
Support Rating (GSR) at 'b-' and the debt ratings for Atlantida and
Invatlan.
KEY RATING DRIVERS
Leading Local Franchise: The ratings are driven by Atlantida's
intrinsic performance reflected in its VR of 'b'. The bank's VR is
one notch above the 'b-' implied VR to reflect its strong and
consistent business profile that Fitch considers as a key rating
strength. The ratings also consider the the stable, though still
pressured, operating environment. The agency believes that
Atlantida's business profile is a significant strength that heavily
influences the ratings, due to its leading position in the Honduran
loans and deposits market and its substantial pricing power in the
country.
Rapid Growth and Loan Concentrations Limit Asset Quality: As of
March 2024, Atlántida's Nonperforming Loan ratio (NPL; 90+ days
past due loans) stood at a reasonable 2.8%, slightly up from its
2020-2024 fwe-year average of 2.7%, influenced by rapid growth of
high double digit over the past three years and a consequent spike
in consumer loan delinquencies.
However, asset quality is constrained by high borrower
concentration and modest reserve coverage, with exposure to its 20
largest borrowers representing a high 2.7x of its FCC, which
compares unfavorably to international peers. Fitch expects the bank
to maintain an NPL ratio below 3%, supported by its strong
commercial focus, but asset quality will remain constrained by high
borrower concentrations.
Increased Funding and Credit Costs Pressure Profitability:
Atlantida's operating profit to risk weighted assets (RWA) ratio
declined from 2.3% in 2022 to 1.6% in 2023 due to a reduced net
interest margin (NIM) impacted by higher funding costs.
Profitability was further affected by increased credit costs,
particularly from higher NPLs in SMEs and consumer loans, as well
as slightly deteriorated operational efficiency.
Although the average deposit rate rose in 2023, loan rates remained
unchanged until 2024, when the bank decided to increase its loan
interest rates to mitigate the heightened funding costs.. Fitch
believes this will improve profitability, though the effects may
not be fully realized until 2025. The agency expects the operating
profit to RWA ratio to remain in the 1.5%-2.0% range, supported by
an enhanced NIM and controlled operating expenses, but warns that
further asset quality deterioration could increase pressure on
profits.
Credit Growth Straps Capitalization: The bank's rapid credit growth
and recurrent dividend payments continue to tight its
capitalization metrics. As of March 2024, its FCC to RWA ratio was
7.7%, a figure that compares unfavorably with international peers.
Local regulatory requirements for risk-weight calculation are
stricter to some extent than international standards, likely
overstating the RWAs.
However, the bank's tangible common equity to tangible assets of
6.2%, also compared behind local and international peers. Fitch
estimates that Atlantida's FCC ratio will gradually improve and
remain above 8%, driven by a moderated loan growth rate, consistent
income generation, and an expected halt in dividend payments in
2024. These actions are part of the bank's strategy to prepare for
the coming increase in minimum capital ratio requirement which is
expected to reach 12.5% by December 2025.
Solid Funding Structure: The bank maintains stable funding and
liquidity profile supported by its large depositor base, which has
proven resilient despite high concentrations (top 20 clients: 35.2%
of total deposits). As of March 2024, the loan-to-deposit ratio
stood at 96.4%, while funding is complemented by bilateral loans,
private bond issuance, and subordinated debt. Liquidity management
is adequate, and Fitch expects it to remain so in the future.
RATING SENSITIVITIES
Factors that Could, Individually or Collectively, Lead to Negative
Rating Action/Downgrade
- A negative change in Fitch's operating environment (OE)
assessment due to deteriorated macroeconomic stability or Fitch's
view on the sovereign credit quality;
- Downgrades of Atlantida's IDRs, VR and national ratings could
also result from continued, weakened capitalization metrics
reflected in an FCC/RWA ratio consistently below 8% or tangible
common equity to tangible assets ratio consistently below 6%;
- The bank's national long-term senior unsecured debt rating is
sensitive to negative changes in Atlantida's National Long-Term
Rating;
- Fitch may also take a negative rating action on the GSR if the
agency perceives a lower propensity or capacity of the sovereign to
support the bank.
Factors that Could, Individually or Collectively, Lead to Positive
Rating Action/Upgrade
- A positive change in Fitch's OE assessment or Fitch's view on the
sovereign credit quality;
- Atlantida's IDRs have limited upside potential, as they are not
expected to be rated two notches above the OE. National ratings
could be upgraded if the bank shows a sustained improvement in
capital and profitability metrics, which would be materialized in a
consistent FCC/RWA ratio comfortably above 9% and operating
profitability to RWA consistently above 2%;
- A positive change in the GSR would reflect Fitch's opinion of a
higher propensity or capacity of support from the government;
- The bank's national long-term senior unsecured debt rating is
sensitive to positive changes in Atlantida's National Long-Term
Rating.
OTHER DEBT AND ISSUER RATINGS: KEY RATING DRIVERS
Senior Debt
Atlantida's outstanding senior unsecured notes (Bonos Bancatlan
2018) issued in the local capital market are rated at the same
level as the bank's national rating of 'A+(hnd)', as the likelihood
of a default of the notes is the same as for the company.
OTHER DEBT AND ISSUER RATINGS: RATING SENSITIVITIES
Government Support Rating
Atlantida's 'b-' GSR reflects the bank's high systemic importance,
with almost 20% share of system deposits and loans. This rating
also considers the lack of recent history of government support for
systematically important financial institutions.
OTHER DEBT AND ISSUER RATINGS: RATING SENSITIVITIES
Negative
- The bank's National LT senior unsecured debt rating is sensitive
to negative changes in Atlantida's National LT Rating;
- Fitch may also take a negative rating action on the GSR if the
agency considers a lower propensity or capacity from the sovereign
to support the bank.
Positive
- A positive change in the GSR would reflect the Fitch's opinion of
a higher propensity or capacity of support from the government;
- The bank's National LT senior unsecured debt rating is sensitive
to positive changes in Atlantida's National LT Rating.
SUBSIDIARIES & AFFILIATES: KEY RATING DRIVERS
INVATLAN'S KEY RATING DRIVERS - IDRs AND SENIOR DEBT
Invatlan's IDRs of 'B-' reflect the creditworthiness of its main
subsidiary, Atlantida (rated B). Invatlan is rated one notch below
Atlantida due to its high double leverage ratio, which was 161.7%
as of March 2024 (March 2023: 150.1%). Invatlan's Outlook mirrors
Atlantida's Outlook as the main subsidiary of the controlling
group. Invatlan operates in Honduras, El Salvador, Nicaragua,
Panama, and Ecuador, and the group is continuously looking for
opportunities to expand its business in the Latin American region.
Fitch expects this ongoing expansion to continue pressuring
Invatlan's double leverage ratio, as recent investments are still
under consolidation.
Fitch also affirmed the USD300 million senior secured notes rating
at 'B-'/'RR4', as these mirror Invatlan's IDR. Despite being senior
secured obligations, Fitch believes the collateral mechanism would
not significantly impact recovery rates. According to Fitch's
rating criteria, recovery prospects for the notes are average,
which is reflected in their Recovery Rating of 'RR4'.
SUBSIDIARIES AND AFFILIATES: RATING SENSITIVITIES
INVATLAN'S RATING SENSITIVITIES - IDRs AND SENIOR DEBT
Negative
- Invatlan's ratings will likely move in line with those of its
main subsidiary, Atlantida;
- A significant reduction in dividends transfers from Invatlan's
main subsidiaries that ultimately affect its liquidity to service
debt or a sustained increase of double leverage to above 200%;
- The global senior secured debt ratings would mirror any change to
Invatlan's IDR.
Positive
- Invatlan's IDRs could be upgraded by one notch if the company's
double-leverage ratio decreases at a level consistently below 120%
resulting from a continued expansion financed by capital
injections;
- The global senior secured debt ratings would mirror any change to
Invatlan's IDRs.
VR ADJUSTMENTS
The VR of 'b' has been assigned above the implied rating of 'b-'
due to the high influence of Atlantida's business profile, driven
by the bank's leading local franchise.
SUMMARY OF FINANCIAL ADJUSTMENTS
Pre-paid expenses were reclassified as intangible and deducted from
total equity to reflect its low absorption capacity.
PUBLIC RATINGS WITH CREDIT LINKAGE TO OTHER RATINGS
Invatlan's IDRs are linked to Banco Atlantida's IDRs.
ESG CONSIDERATIONS
Banco Atlantida S.A. has an ESG Relevance Score of '4' for
Financial Transparency due to third-party disclosure that remains
weaker than international best practices. This has a negative
impact on the credit profile, and is relevant to the ratings in
conjunction with other factors.
Inversiones Atlantida S.A. has an ESG Relevance Score of '4' for
Financial Transparency due to lagging or missing information
disclosure. This has a negative impact on the credit profile, and
is relevant to the ratings in conjunction with other factors.
The highest level of ESG credit relevance is a score of '3', unless
otherwise disclosed in this section. A score of '3' means ESG
issues are credit-neutral or have only a minimal credit impact on
the entity, either due to their nature or the way in which they are
being managed by the entity. Fitch's ESG Relevance Scores are not
inputs in the rating process; they are an observation on the
relevance and materiality of ESG factors in the rating decision.
Entity/Debt Rating Recovery Prior
----------- ------ -------- -----
Banco
Atlantida S.A. LT IDR B Affirmed B
ST IDR B Affirmed B
LC LT IDR B Affirmed B
LC ST IDR B Affirmed B
Natl LT A+(hnd)Affirmed A+(hnd)
Natl ST F1(hnd)Affirmed F1(hnd)
Viability b Affirmed b
Government Support b- Affirmed b-
senior
unsecured Natl LT A+(hnd)Affirmed A+(hnd)
Inversiones
Atlantida S.A. LT IDR B- Affirmed B-
ST IDR B Affirmed B
LC LT IDR B- Affirmed B-
LC ST IDR B Affirmed B
senior
secured LT B- Affirmed RR4 B-
=============
J A M A I C A
=============
JAMAICA: Manufacturers Hit With Average 3% Rise in Input Costs
--------------------------------------------------------------
RJR News reports that producers in the Manufacturing industry faced
an average three per cent rise in costs associated with delivering
inputs on an annual basis as at May.
The Statistical Institute of Jamaica has attributed this to a 13
per cent increase in the average cost of Refined Petroleum Products
and a 1.2% upward movement in costs associated with Food, Beverages
& Tobacco, RJR News relays.
For the month of May alone, STATIN reported a 0.8% incline in the
cost of Refined Petroleum Products, the report discloses.
There was however a 0.1% increase in prices faced by producers in
the heaviest weighted major group, Food, Beverages & Tobacco, the
report adds.
About Jamaica
Jamaica is an island country situated in the Caribbean Sea.
Jamaica is an upper-middle income country with an economy heavily
dependent on tourism. Other major sectors of the Jamaican economy
include agriculture, mining, manufacturing, petroleum refining,
financial and insurance services.
In October 2023, Moody's upgraded the Government of Jamaica's
long-term issuer and senior unsecured ratings to B1 from B2, and
senior unsecured shelf rating to (P)B1 from (P)B2. The outlook has
been changed to positive from stable. The upgrade of Jamaica's
rating to B1 reflects the government's sustained commitment to
fiscal consolidation and debt reduction. The positive outlook
reflects Moody's assessment that a continuation of the favorable
fiscal trajectory will further increase Jamaica's credit
resilience.
S&P Global Ratings raised on September 13, 2023, its long-term
foreign and local currency sovereign credit ratings on Jamaica to
'BB-' from 'B+', and affirmed its short-term foreign and local
currency sovereign credit ratings at 'B'. The stable outlook
reflects S&P's expectation that the government will remain
committed to prudent fiscal policies and reducing debt, as well as
supportive economic policies including a flexible exchange rate
regime and effective monetary policy.
In March 2022, Fitch Ratings affirmed Jamaica's Long-Term Foreign
Currency Issuer Default Rating (IDR) at 'B+'. The Rating Outlook is
Stable.
JAMAICA: Sees 9.3% Annual Inflation in Equipment Prices
-------------------------------------------------------
RJR News reports that Jamaican consumers paid more money for
furniture and other household equipment for the 12 months to May.
The Statistical Institute of Jamaica says annual inflation for the
category 'Furnishings, Household Equipment, and Routine Household
Maintenance' was 9.3 per cent, according to RJR News.
For the month of May alone, STATIN says prices in the group rose by
0.1 per cent, the report notes.
It says the main contributors to this increase were the groups
'Furniture, Furnishings, and Loose Carpets' and 'Goods and Services
for Routine and Household Maintenance,' the report adds.
About Jamaica
Jamaica is an island country situated in the Caribbean Sea.
Jamaica is an upper-middle income country with an economy heavily
dependent on tourism. Other major sectors of the Jamaican economy
include agriculture, mining, manufacturing, petroleum refining,
financial and insurance services.
In October 2023, Moody's upgraded the Government of Jamaica's
long-term issuer and senior unsecured ratings to B1 from B2, and
senior unsecured shelf rating to (P)B1 from (P)B2. The outlook has
been changed to positive from stable. The upgrade of Jamaica's
rating to B1 reflects the government's sustained commitment to
fiscal consolidation and debt reduction. The positive outlook
reflects Moody's assessment that a continuation of the favorable
fiscal trajectory will further increase Jamaica's credit
resilience.
S&P Global Ratings raised on September 13, 2023, its long-term
foreign and local currency sovereign credit ratings on Jamaica to
'BB-' from 'B+', and affirmed its short-term foreign and local
currency sovereign credit ratings at 'B'. The stable outlook
reflects S&P's expectation that the government will remain
committed to prudent fiscal policies and reducing debt, as well as
supportive economic policies including a flexible exchange rate
regime and effective monetary policy.
In March 2022, Fitch Ratings affirmed Jamaica's Long-Term Foreign
Currency Issuer Default Rating (IDR) at 'B+'. The Rating Outlook is
Stable.
JAMAICA: Won't Be Drawing Down on Some Emergency Financing Options
------------------------------------------------------------------
RJR News reports that Finance Minister Dr. Nigel Clarke said
Jamaica did not experience damage that will see it utilizing some
of its emergency financing measures.
In a release to the media, Dr. Clarke said funding will not be
drawn down from the Catastrophe Bond to finance recovery from
Hurricane Beryl, according to RJR News.
The World Bank settled the facility in the amount of US$150
million, the report notes.
"[It] essentially serves the purpose of providing financial
protection against a category 5 or very intense category 4
hurricane making landfall in Jamaica. Had Hurricane Beryl made
landfall in Jamaica or had Hurricane Beryl maintained its intensity
as observed, as measured by centralised air pressure, it would have
certainly triggered the Catastrophe Bond," he explained, the report
relays.
Dr. Clarke said it is also unlikely the Precautionary Liquidity
Line from the International Monetary Fund (IMF) will be utilized,
the report discloses.
That provides coverage of up to J$140 billion, ther eport says.
"The PLL is intended for countries with strong fundamentals and can
be drawn in event of liquidity problems that emerge. While it is
too early to rule anything out, we do not anticipate that Hurricane
Beryl has led to or will lead to liquidity issues for the
government of Jamaica," the minister advised, the report adds.
About Jamaica
Jamaica is an island country situated in the Caribbean Sea.
Jamaica is an upper-middle income country with an economy heavily
dependent on tourism. Other major sectors of the Jamaican economy
include agriculture, mining, manufacturing, petroleum refining,
financial and insurance services.
In October 2023, Moody's upgraded the Government of Jamaica's
long-term issuer and senior unsecured ratings to B1 from B2, and
senior unsecured shelf rating to (P)B1 from (P)B2. The outlook has
been changed to positive from stable. The upgrade of Jamaica's
rating to B1 reflects the government's sustained commitment to
fiscal consolidation and debt reduction. The positive outlook
reflects Moody's assessment that a continuation of the favorable
fiscal trajectory will further increase Jamaica's credit
resilience.
S&P Global Ratings raised on September 13, 2023, its long-term
foreign and local currency sovereign credit ratings on Jamaica to
'BB-' from 'B+', and affirmed its short-term foreign and local
currency sovereign credit ratings at 'B'. The stable outlook
reflects S&P's expectation that the government will remain
committed to prudent fiscal policies and reducing debt, as well as
supportive economic policies including a flexible exchange rate
regime and effective monetary policy.
In March 2022, Fitch Ratings affirmed Jamaica's Long-Term Foreign
Currency Issuer Default Rating (IDR) at 'B+'. The Rating Outlook is
Stable.
===============
X X X X X X X X
===============
[*] LATAM: CDB Promises Help to Member Countries Affected by Beryl
------------------------------------------------------------------
RJR News reports that The Caribbean Development Bank (CDB) said it
is prepared to provide assistance to member countries affected by
Hurricane Beryl.
In a release, the CDB said the widespread damage across a number of
islands, underscores the extreme vulnerability of the region, and
the increasing threat posed by climate change, according to RJR
News.
The CDB said it will continue to advocate for access to
concessionary resources to assist countries in meeting the
challenges posed by the changing environment, the report notes.
It said it is ready to deploy its full capacity to bolster recovery
and rebuilding efforts, the report relays.
*********
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
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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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