/raid1/www/Hosts/bankrupt/TCRLA_Public/240715.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 15, 2024, Vol. 25, No. 141
Headlines
A R G E N T I N A
ARGENTINA: Biggest Forex, Futures Markets Agree to Merge
ARGENTINA: IMF Backs Negotiator Who Drew Milei's Ire in Aid Talks
ARGENTINA: Milei's Therapy Sends Demand for Beef to 110-Year Low
TELECOM ARGENTINA: Fitch Rates New USD500MM Unsec. Notes 'B'
B E R M U D A
APEX STRUCTURED: Fitch Affirms 'B' LongTerm IDR, Outlook Stable
APEX STRUCTURED: Moody's Alters Outlook on 'B2' CFR to Stable
B R A Z I L
BRAZIL: Industrial Production in 7 Areas Exceed Pre-Pandemic Levels
BRAZIL: Steady Course for Service Sector in May
ELETROBRAS: Sets Stage for Major Stake Sale in ISA Cteep
C O L O M B I A
COLOMBIA: Inflation Accelerates for the First Time in 15 Months
D O M I N I C A N R E P U B L I C
AEROPUERTOS DOMINICANOS XXI: Fitch Rates USD500MM Notes 'BB+'
M E X I C O
BANCO BANCREA: Fitch Assigns 'BB-' LongTerm IDRs, Outlook Stable
X X X X X X X X
[*] BOND PRICING: For the Week July 8 to July 12, 2024
- - - - -
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A R G E N T I N A
=================
ARGENTINA: Biggest Forex, Futures Markets Agree to Merge
--------------------------------------------------------
Ignacio Olivera Doll at Bloomberg News reports that Argentina's
Mercado Abierto Electronico and Matba-Rofex have agreed to merge
into a single exchange, creating the country's largest futures and
foreign-exchange market, according to one person with direct
knowledge of the matter.
The companies expect to make the announcement after the market
closes, the person said, asking not to be named because the
information isn't public, according to Bloomberg News. The new
exchange will include agricultural transactions, peso futures
against dollars and trading on bonds, including local Treasury and
Central Bank notes, they said, Bloomberg News notes.
Argentina's foreign exchange and fixed income market volume has
plummeted since the country reintroduced capital controls in 2019,
Bloomberg News recalls. Markets have since recovered some of the
volume by becoming the main space for sophisticated operations for
domestic investors, known as the "blue-chip swap" or "dolar CCL,"
which allows Argentines to obtain dollars outside the official
exchange market, Bloomberg News says.
MAE didn't immediately respond to a request for comment, while
Matba-Rofex declined to comment. A spokesperson for Argentina's
market regulator CNV said that it has not yet been informed of the
merger and that, given the rumours, it will send the companies a
request for information if they don't contact regulators soon,
Bloomberg News relays.
Bloomberg News discloses that Argentina's market is currently
driven by four competing companies: Bolsas y Mercados Argentinos
(BYMA), Mercado Abierto Electrónico, Matba-Rofex and Mercado
Argentino de Valores (MAV).
Matba Rofex is the largest futures trading platform, with US$227.6
billion in financial derivatives and 57 million tons of wheat,
soybeans and corn in 2023. MAE is the largest foreign exchange
platform with US$166.5 billion in negotiated volume last year,
Bloomberg News says.
The new exchange, which has yet to be named, could be valued at
US$500 million and its ownership will be divided 50-50 by the
companies, according to the person, Bloomberg News notes.
BYMA is the largest fixed income and equities trading platform in
the country, and had attempted to integrate with other players in
early 2020, though plans didn't progress, Bloomberg News adds.
About Argentina
Argentina is a country located mostly in the southern half of South
America. Its capital is Buenos Aires. Javier Milei is the current
president of Argentina after winning the November 19, 2023 general
election. He succeeded Alberto Angel Fernandez in the position.
Argentina has the third largest economy in Latin America. The
country's economy is an upper middle-income economy for fiscal year
2019, according to the World Bank. Historically, however, its
economic performance has been very uneven, with high economic
growth alternating with severe recessions, income maldistribution
and in the recent decades, increasing poverty.
The IMF's executive board completed on August 23, 2023, the fifth
and six reviews of Argentina's 30-month Extended Fund Facility
(EFF), and approved a US$7.5-billion disbursement to Argentina as
part of the larger program, which refinances payments Argentina
owes the institution from a previous bailout that failed to
stabilize the economy in 2018. Argentina would receive another IMF
disbursement in November of about US$2.75 billion pending another
staff-level agreement and board approval.
S&P Global Ratings, on March 15, 2024, raised its local currency
sovereign credit ratings on Argentina to 'CCC/C' from 'SD/SD' and
its national scale rating to 'raB+' from 'SD'. S&P also raised its
long-term foreign currency sovereign credit rating to 'CCC' from
'CCC-' and affirmed its 'C' short-term foreign currency rating. The
outlook on the long-term ratings is stable. In addition, S&P
revised its transfer and convertibility assessment to 'CCC' from
'CCC-'.
S&P said the stable outlook on the long-term ratings balances the
risks posed by pronounced economic imbalances and policy
uncertainties with the favorable change in near-term debt service
obligations. S&P also expect no further debt exchanges that it
would likely consider to be distressed.
Fitch Ratings upgraded on June 13, 2023, Argentina's Long-Term
Foreign Currency (FC) Issuer Default Rating (IDR) to 'CC' from
'C'and affirmed the Long-Term Local Currency (LC) IDR at 'CCC-'.
Fitch typically does not assign Outlooks to sovereigns with a
rating of 'CCC+' or below.
The upgrade of the FC IDR reflects that Fitch no longer deems a
default-like process to have begun, as the authorities have not
signaled a clear intention to follow through with an intra-public
debt swap announced in March. The new 'CC' rating signals a default
event of some sort appears probable in the coming years, regardless
of the outcome of upcoming elections. The affirmation of the LC IDR
at 'CCC-' follows the peso debt swap in June that Fitch did not
deem to be a "distressed debt exchange" (DDE).
Moody's Investors Service, in September 2022, affirmed Argentina's
Ca foreign-currency and local-currency long-term issuer and senior
unsecured ratings. The outlook remains stable. The decision to
affirm the Ca ratings balances Argentina's limited market access,
weak governance, and history of recurrent debt restructurings with
recent efforts to marshal fiscal and monetary measures to start
addressing underlying macroeconomic imbalances in the context of
the IMF program that was approved in 2022, according to Moody's.
DBRS, Inc. confirmed Argentina's Long-Term Foreign Currency Issuer
Rating at CCC and downgraded its Long-Term Local Currency Issuer
Rating to CCC from CCC (high) on March 3, 2023.
ARGENTINA: IMF Backs Negotiator Who Drew Milei's Ire in Aid Talks
-----------------------------------------------------------------
Eric Martin & Patrick Gillespie at Bloomberg News report that the
head of the International Monetary Fund is standing by her top
negotiator as the lender weighs the future of Argentina's
US$44-billion program after President Javier Milei coyly criticized
the official.
Western Hemisphere Director Rodrigo Valdes is the most senior IMF
official leading talks with Milei's government, which is seeking
fresh funding in an eventual new program, according to Bloomberg
News. The libertarian president referenced Valdes in a radio
interview last month without explicitly naming him, criticising the
IMF official's time as finance minister in Chile from 2015 to 2017,
suggesting his economic ideology was too left leaning, Bloomberg
News notes.
Managing Director Kristalina Georgieva "has full confidence in
Rodrigo Valdes and her entire senior leadership team," IMF Chief
Spokesperson Julie Kozack said at a press briefing, Bloomberg News
relays. "Our engagement with the Argentine authorities remains
active and constructive," he added.
Bloomberg News notes tjat Milei is apparently not alone in his
opinion of the IMF official. La Nacion newspaper also reported
that Economy Minister Luis Caputo said at a June cabinet meeting
that he hoped to negotiate with other staff instead of Valdes,
Bloomberg News relays.
Caputo's press office declined to comment, pointing to the
minister's comments in a radio interview earlier in which he said
"the relationship with the Fund is excellent" and that "we're
starting to talk about a new agreement for this year," Bloomberg
News discloses.
Milei's criticism showed the wide gap of views on key policy issues
between his economic team and IMF staff, which said in June that
Argentina had committed to make its currency policy more flexible,
Bloomberg News says. Since then, the president has indicated he'll
go in the opposite direction, slowing the pace of the peso's
monthly devaluation, Bloomberg News relates.
Kozack nonetheless applauded Argentina's austerity efforts, as well
as the passage of Milei's reform package in Congress, Bloomberg
News notes.
The head of the International Monetary Fund is standing by her top
negotiator as the lender weighs the future of Argentina's
US$44-billion program after President Javier Milei coyly criticized
the official, Bloomberg News relays.
Western Hemisphere Director Rodrigo Valdes is the most senior IMF
official leading talks with Milei's government, which is seeking
fresh funding in an eventual new program, Bloomberg News discloses.
The libertarian president referenced Valdes in a radio interview
last month without explicitly naming him, criticizing the IMF
official's time as finance minister in Chile from 2015 to 2017,
suggesting his economic ideology was too left leaning, Bloomberg
News says.
Managing Director Kristalina Georgieva "has full confidence in
Rodrigo Valdes and her entire senior leadership team," IMF Chief
Spokesperson Julie Kozack said at a press briefing. "Our
engagement with the Argentine authorities remains active and
constructive," he added.
Bloomberg News notes that Milei is apparently not alone in his
opinion of the IMF official. La Nacion newspaper also reported
that Economy Minister Luis Caputo said at a June cabinet meeting
that he hoped to negotiate with other staff instead of Valdes,
Bloomberg News relays.
Bloomberg News discloses that Caputo's press office declined to
comment, pointing to the minister's comments in a radio interview
earlier in which he said "the relationship with the Fund is
excellent" and that "we're starting to talk about a new agreement
for this year."
Milei's criticism showed the wide gap of views on key policy issues
between his economic team and IMF staff, which said in June that
Argentina had committed to make its currency policy more flexible,
Bloomberg News notes. Since then, the president has indicated
he'll go in the opposite direction, slowing the pace of the peso's
monthly devaluation, Bloomberg News says.
Kozack nonetheless applauded Argentina's austerity efforts, as well
as the passage of Milei's reform package in Congress, Bloomberg
News relays.
IMF officials have been removed from Argentina negotiations in the
past, but Valdes - who was personally appointed by Georgieva - took
up his post a little over a year ago when the current programme
review was already well underway, Bloomberg News discloses. In
2020, one of Valdes' predecessors, Alejandro Werner, stepped back
from talks after clashing with Economy Minister Martin Guzman,
Bloomberg News relates. Werner retired shortly after his criticism
became public, Bloomberg News adds.
Both Georgieva and Milei's officials are expected to be in Brazil
later this month for a meeting of Group of 20 finance ministers and
central bankers, Bloomberg News notes. Kozack declined to discuss
any potential bilateral talks, saying she would provide more
information on the managing director's itinerary at the appropriate
time, Bloomberg News says.
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: Milei's Therapy Sends Demand for Beef to 110-Year Low
----------------------------------------------------------------
Jonathan Gilbert at Bloomberg News reports that Argentina has made
a surprising pivot toward cheaper chicken as households try to
stretch their dwindling pay-cheques.
Beef demand is forecast to drop below 45 kilogrammes (99 pounds) a
person this year, the lowest in data going back to 1914, according
to a report by the Rosario Board of Trade based on government data,
according to Bloomberg News. That would mark the first time
Argentina's demand for beef is essentially on par with chicken,
which has been growing in popularity across the globe, Bloomberg
News notes.
Halfway into President Javier Milei's first calendar year in
office, Argentina is mired in a deep economic recession after he
devalued the country's currency and eroded shoppers' purchasing
power, Bloomberg News relays. Pork and poultry cost roughly half
as much as beef, Bloomberg News notes. A greater awareness of the
importance of balanced diets has also driven more families to
choose poultry and pork, Bloomberg News discloses.
That said, Argentines — together with neighbouring Uruguayans —
are still comfortably the planet's biggest beef eaters, Bloomberg
News adds.
About Argentina
Argentina is a country located mostly in the southern half of South
America. Its capital is Buenos Aires. Javier Milei is the current
president of Argentina after winning the November 19, 2023 general
election. He succeeded Alberto Angel Fernandez in the position.
Argentina has the third largest economy in Latin America. The
country's economy is an upper middle-income economy for fiscal year
2019, according to the World Bank. Historically, however, its
economic performance has been very uneven, with high economic
growth alternating with severe recessions, income maldistribution
and in the recent decades, increasing poverty.
The IMF's executive board completed on August 23, 2023, the fifth
and six reviews of Argentina's 30-month Extended Fund Facility
(EFF), and approved a US$7.5-billion disbursement to Argentina as
part of the larger program, which refinances payments Argentina
owes the institution from a previous bailout that failed to
stabilize the economy in 2018. Argentina would receive another IMF
disbursement in November of about US$2.75 billion pending another
staff-level agreement and board approval.
S&P Global Ratings, on March 15, 2024, raised its local currency
sovereign credit ratings on Argentina to 'CCC/C' from 'SD/SD' and
its national scale rating to 'raB+' from 'SD'. S&P also raised its
long-term foreign currency sovereign credit rating to 'CCC' from
'CCC-' and affirmed its 'C' short-term foreign currency rating. The
outlook on the long-term ratings is stable. In addition, S&P
revised its transfer and convertibility assessment to 'CCC' from
'CCC-'.
S&P said the stable outlook on the long-term ratings balances the
risks posed by pronounced economic imbalances and policy
uncertainties with the favorable change in near-term debt service
obligations. S&P also expect no further debt exchanges that it
would likely consider to be distressed.
Fitch Ratings upgraded on June 13, 2023, Argentina's Long-Term
Foreign Currency (FC) Issuer Default Rating (IDR) to 'CC' from
'C'and affirmed the Long-Term Local Currency (LC) IDR at 'CCC-'.
Fitch typically does not assign Outlooks to sovereigns with a
rating of 'CCC+' or below.
The upgrade of the FC IDR reflects that Fitch no longer deems a
default-like process to have begun, as the authorities have not
signaled a clear intention to follow through with an intra-public
debt swap announced in March. The new 'CC' rating signals a default
event of some sort appears probable in the coming years, regardless
of the outcome of upcoming elections. The affirmation of the LC IDR
at 'CCC-' follows the peso debt swap in June that Fitch did not
deem to be a "distressed debt exchange" (DDE).
Moody's Investors Service, in September 2022, affirmed Argentina's
Ca foreign-currency and local-currency long-term issuer and senior
unsecured ratings. The outlook remains stable. The decision to
affirm the Ca ratings balances Argentina's limited market access,
weak governance, and history of recurrent debt restructurings with
recent efforts to marshal fiscal and monetary measures to start
addressing underlying macroeconomic imbalances in the context of
the IMF program that was approved in 2022, according to Moody's.
DBRS, Inc. confirmed Argentina's Long-Term Foreign Currency Issuer
Rating at CCC and downgraded its Long-Term Local Currency Issuer
Rating to CCC from CCC (high) on March 3, 2023.
TELECOM ARGENTINA: Fitch Rates New USD500MM Unsec. Notes 'B'
------------------------------------------------------------
Fitch Ratings has assigned a long-term rating of 'B'/'RR3' to
Telecom Argentina S.A.'s proposed new USD500 million senior
unsecured notes issuance maturing in approximately seven years. The
proceeds will be used to refinance existing debt and for other
general corporate purposes.
Telecom Argentina's ratings reflect Fitch's expectation that the
telecom operator will be able to continue mitigating inflationary
pressures while maintaining its strong market position. Despite the
macroeconomic instability in Argentina, where the majority of its
operations and assets are located, the company has historically
managed to pass most inflation effects onto consumers, thereby
alleviating some macroeconomic concerns.
Telecom Argentina's robust financial and operational profile is
supported by its strong cash flow generation, relatively
conservative capital structure, and competitive strengths in both
fixed and mobile services.
KEY RATING DRIVERS
Country Ceiling Limits Foreign Currency Ratings: Telecom
Argentina's Long-Term Foreign Currency Issuer Default Rating (FC
IDR) is limited by Argentina's 'B-' Country Ceiling. Fitch expects
that any default by the company would likely stem from transfer and
convertibility restrictions rather than a significant decline in
its operational performance.
Strong Operator, Weak Operating Environment: Telecom Argentina is
the leading integrated operator in the country, with strong
competitive positions in both fixed and mobile services. The
company's robust product offerings and brand recognition bolster
its ability to generate strong cash flow.
Historically, Telecom Argentina has managed the volatile
macroeconomic environment by adjusting service prices to counteract
rising operational costs, thus maintaining solid credit metrics.
However, macroeconomic risks remain, as demonstrated by the sharp
devaluation of the Argentine peso in December 2023, which
temporarily increased the company's leverage. Fitch anticipates
appreciation of the peso in real terms in 2024, allowing leverage
to revert to its long-term trend.
Price-Setting Independence: In April 2024, the Argentine government
repealed a policy that regulated the prices of internet, mobile
phone, and cable television services, granting telecom service
providers the freedom to set their own tariffs. Since March 2023,
Telecom Argentina has been raising prices monthly to keep pace with
accelerated inflation. Fitch expects the company to continue
adjusting prices as necessary to mitigate inflationary pressures,
maintaining an EBITDA margin around 25% over the rating horizon.
Financial Profile Comparable to Investment-Grade Peers: Telecom
Argentina's financial structure is among the strongest of
Fitch-rated telecom companies in the region, characterized by a
conservative capital structure and positive cash flow. Fitch
projects the company's net debt/EBITDA ratio will remain between
1.8x and 2.4x over the rating horizon, aligning with stronger
investment-grade operators in the region. However, fluctuations in
the Argentine peso introduce volatility to the company's leverage
profile. Fitch expects Telecom Argentina to refinance upcoming
maturities as needed and maintain debt levels around USD 2.2
billion.
DERIVATION SUMMARY
The speculative ratings of Telecom Argentina compare with those of
other Argentine issuers YPF S.A. (CCC-) and Arcor S.A.I.C.
(B/Stable) that have solid business and capital structures but
whose ratings are restricted by the difficulties of operating in
Argentina. Arcor's ratings are higher than those of YPF and Telecom
Argentina due to its operations in Brazil and the cash it holds
abroad in its foreign subsidiaries.
The company's business and financial profile are in line, or
superior to, regional IG telecom operators including Telefonica
Moviles Chile S.A. (BBB-/Stable) and Empresa Nacional de
Telecomunicaciones S.A. (BBB-/Stable). Telecom Argentina has either
a more conservative capital structure, or a stronger market
position, or both. Ultimately, both the FC and Local Currency (LC)
IDR of Telecom Argentina will continue to be driven by the
difficulties of the Argentine OE.
KEY ASSUMPTIONS
Fitch's Key Assumptions Within Its Rating Case for the Issuer
Include:
- The company is able to pass on the majority of inflation to
consumers each year;
- Net leverage trending near 2.0x;
- EBITDA margins around 25-26%;
- Capital intensity around 17%-18%.
RECOVERY ANALYSIS
For going-concern EBITDA, Fitch assumes that the company would be
unable to pass on a significant portion of the projected inflation
of Argentina, while the company's expenses would rise at inflation.
This scenario implies a significant drop in EBITDA margins to 20%.
Fitch uses a 4x multiple, lower than the average telecom Enterprise
value/EBITDA multiple of 5x-7x, to account for a discount for
Argentine assets.
Although Fitch's recovery methodology suggests a 'RR2' recovery for
Telecom Argentina, the methodology also applies a standard cap of
'RR4' for instrument ratings in Argentina. Fitch applies
country-specific caps to instrument ratings for a given
jurisdiction, reflecting Fitch's view that average recoveries could
be lower in regimes that are debtor-friendly and/or have weak
enforceability, and higher in regimes that are creditor-friendly
and/or have strong enforceability. The caps limit the assignment of
higher Recovery Ratings for obligations of issuers that are
incorporated, or whose assets or cash flows are located in less
creditor-friendly jurisdictions.
However, per Fitch's Country Specific Treatment of Recovery
Criteria, when an issuer actually enters a distressed or defaulted
state, such as Argentina (CC), Fitch can assign a higher recovery
rating for an issuer instrument if it believes that recoveries in
the individual case will be consistent with a higher Recovery
Rating, as is in this case. Therefore, the recovery rating for
Telecom Argentina's senior unsecured notes is assessed at 'RR3'.
RATING SENSITIVITIES
Factors That Could, Individually or Collectively, Lead to Positive
Rating Action/Upgrade
- Telecom Argentina's FC IDR is bound by Argentina's 'B-' Country
Ceiling; therefore, an upgrade of the Argentine sovereign rating
and concurrent upgrade of the Argentine Country Ceiling would
result in an upgrade;
- Telecom Argentina's LC IDR is constrained by the difficult
Argentine OE; therefore, a decrease in macroeconomic turmoil could
result in an upgrade.
Factors That Could, Individually or Collectively, Lead to Negative
Rating Action/Downgrade
- Telecom Argentina's FC IDR is bound by Argentina's 'B-' Country
Ceiling; therefore, a downgrade of the Argentine sovereign rating
and concurrent downgrade of the sovereign's Country Ceiling would
result in a downgrade.
LIQUIDITY AND DEBT STRUCTURE
Sufficient Liquidity: Telecom Argentina maintains sufficient
liquidity, with ARS466 billion in cash available against ARS718
billion in short-term debt as of March 2024. The company also
possesses ample borrowing capacity in local capital markets. The
majority of Telecom Argentina's cash and debt is denominated in
U.S. dollars.
While Telecom Argentina has smaller operations outside of Argentina
in Paraguay, Uruguay, Chile, and the U.S., Fitch does not view
these operations as substantial enough to bypass the Argentine
Country Ceiling (B-).
Telecom Argentina's refinancing risk is deemed manageable. The
company's liquidity and financial flexibility are bolstered by
strong cash flow, which Fitch expects to sufficiently cover capital
expenditures. Telecom Argentina also has a long-standing track
record of refinancing and rolling over bank debt and loans from
international agencies, such as the International Finance
Corporation.
Fitch anticipates that Telecom Argentina will maintain a debt level
of approximately USD2.2 billion over the coming years. The
company's ability to transfer inflation costs to consumers has been
vital in sustaining its cash flow.
ISSUER PROFILE
Telecom Argentina S.A. is the largest integrated telecommunications
services provider in Argentina, offering broadband, pay TV and
fixed and mobile telecommunications services throughout the
country. The company also has smaller operations in Paraguay,
Uruguay, Chile, and the U.S.
DATE OF RELEVANT COMMITTEE
15 August 2023
ESG CONSIDERATIONS
The highest level of ESG credit relevance is a score of '3', unless
otherwise disclosed in this section. A score of '3' means ESG
issues are credit-neutral or have only a minimal credit impact on
the entity, either due to their nature or the way in which they are
being managed by the entity. Fitch's ESG Relevance Scores are not
inputs in the rating process; they are an observation on the
relevance and materiality of ESG factors in the rating decision.
Entity/Debt Rating Recovery
----------- ------ --------
Telecom Argentina S.A.
senior unsecured LT B New Rating RR3
=============
B E R M U D A
=============
APEX STRUCTURED: Fitch Affirms 'B' LongTerm IDR, Outlook Stable
---------------------------------------------------------------
Fitch Ratings has affirmed Apex Structured Intermediate Holdings
Limited's (Apex) Long-Term Issuer Default Rating (IDR) at 'B' with
a Stable Outlook. Fitch has also affirmed Apex Group Treasury
Limited's and Apex Group Treasury LLC's first-lien term loan B
(TLB) at 'B+' with a Recovery Rating of 'RR3'.
Apex's ratings reflect the group's solid business risk profile
characterised by strong geographic and customer diversification and
its scale, combined with recurring revenue streams and low churn
levels, which supports cash flow stability. The ratings also
reflect high leverage, a legacy from many debt-funded M&As, weak
interest coverage metrics and execution risks related to
integration of the acquired companies and the respective synergy
realisation.
The company issued recently USD1.1 billion Holdco PIK notes, which
Fitch expects to be used for partial repayment of the operating
companies' (opco) debt. This will support the company's
deleveraging and improve EBITDA interest coverage, which Fitch
expects will increase to above 2.5x beyond 2026 compared to its
previous forecast of about 2.0x.
KEY RATING DRIVERS
M&A Growth Strategy: Fitch understands from Apex's management that
following a period of high growth through M&A the group will pursue
organic growth, with only small, accretive bolt-on M&A. Thus, the
current rating and Stable Outlook assumes a more disciplined
financial policy towards deleveraging.
Apex has made 48 acquisitions since 2017 and has typically financed
the transactions through a combination of equity and new debt.
Acquisitions have helped improve Apex's product and geographic
diversification and increase its market shares in several regions.
Execution risks have been meaningful, although they are declining
given the slower pace of M&A-led growth. Revenue has also increased
strongly organically in the high single-digit to low double-digit
pace in each of the past five years.
Deleveraging Capacity: Fitch expects Fitch-defined EBITDA leverage
to remain above the downgrade sensitivity of 7.5x at end-2024, pro
forma for acquired and signed acquisitions in 2023-2024. However,
Apex has robust capacity to deleverage organically and Fitch
expects leverage to fall to 6.3x in 2025 on rising EBITDA,
supported by top-line growth and synergies and cost savings.
Deleveraging will also be supported by the PIK note issuance, which
Fitch treats as equity as per its Corporate Rating Criteria. Fitch
expects the proceeds to be used to repay part of the debt in the
senior secured restricted group.
Improving Interest Coverage: Apex's debt is at floating rates with
margins ranging from 4% to 7.50% over Euribor, Libor and SOFR with
only part of the company's debt being hedged. Fitch expects the
company's EBITDA interest coverage to remain weak at 1.3x in 2024.
However, Fitch expects the partial repayment of the opco's debt
using the PIK note proceeds as well decreasing interest rates to
improve the EBITDA interest cover to 2.4x in 2026 and further to
2.7x in 2027.
Profitability Improvement Potential: Fitch estimates Apex's
Fitch-defined EBITDA margin was 27.5% in 2023 on a pro forma basis.
This is lower than its previous expectation of 31.6% as a result of
delays in some cost savings realisations. However, Fitch expects
EBITDA margin to improve to 35% by 2025 supported by already
actioned cost-cutting measures, economies of scale and synergy
realisation.
Cash-Generative Business: Apex has a scalable operating structure
that is cash-generative. Fitch expects the enlarged group to start
generating positive Fitch-defined free cash flow (FCF) in 2025, one
year later than Fitch previously forecasts as a result of higher
integration and restructuring costs and lower EBITDA margin.
However, growing EBITDA, lower interest payments following the
partial debt repayment and reduced one-off costs should support
positive FCF from 2025.
Strong Market Position: Following recent acquisitions, including
Sanne, MMC and Maitland, Apex has become one of the largest
alternative asset service platforms globally with more than USD3
trillion of assets on the platform (AOP), as of July 2024, and
around USD1.5 billion of revenue expected in 2024 on a pro-forma
basis. Apex has been outperforming its market in the past five
years. Apex's main competitive advantages are its scale as well as
product and geographical diversification, which enable it to be a
single-source solution provider.
Low Revenue Volatility: The majority of Apex's revenue is based on
fixed fees. This limits volatility as a result of capital market
movements as demonstrated during the Covid-19 pandemic. While
average contract durations are not long, churn levels are minimal,
as evident in Apex's retention rates of greater than 99%. This,
combined with geographic diversification, an end-to-end product
portfolio and low customer concentration, results in low revenue
volatility.
DERIVATION SUMMARY
Apex is one of the largest alternative asset service platforms
globally by AOP. Its scale, diversification, low customer
concentration and cash flow margins rank well compared with peers',
resulting in a slightly higher leverage capacity with upgrade and
downgrade sensitivities of 6.0x and 7.5x, respectively (on a total
debt-to-EBITDA basis).
The nature of the business enables Apex to realise economies of
scale, leading to an EBITDA margin in line with or above 'B' in
Fitch's privately rated portfolio of direct peers. Fitch expects
the FCF margin to be in line with or above privately rated 'B'
category peers', due to low capex requirements and with no dividend
payments expected in the near future.
Apex' publicly rated by Fitch peers include Thevelia Holdings
Limited (B+/Stable) which is an investment vehicle set up by BPEA
EQT to acquire and hold Tricor (a business expansion specialist
with operations across Asia) and Vistra (a leading provider of
corporate, trust and outsourcing services in 46 jurisdictions).
Both peers are similar in size and have strong product and
geographic diversification. However, Thevelia is rated one notch
higher as it has lower leverage.
KEY ASSUMPTIONS
- Full consolidation of recent acquisitions
- Pro forma revenue growth of 13.5% in 2024 and 6%-8% annually in
2025-2027 on alternative assets under management (AuM) growth,
increasing outsourcing penetration and cross-selling opportunities
- Pro forma Fitch-defined EBITDA margin to improve to 35% by 2027
from 27.5% in 2023, supported by cost savings and synergy
realisation
- Working-capital requirements of 3% of revenue in 2024-2027
- Capex of 4%-4.5% of revenue a year to 2027
- No dividend payments for the next four years
- Holdco PIK notes treated as equity
RECOVERY ANALYSIS
Fitch believes that Apex would be reorganised as a going concern
(GC) in bankruptcy rather than liquidated given its asset-light
business model.
Fitch estimates that post-restructuring pro forma GC EBITDA would
be around USD360 million. In this scenario, the stress on EBITDA
could result from integration failure of acquired companies,
combined with limited synergies, more competition leading to a fall
in revenue losses and end-clients shifting from alternative funds
to low-cost exchange-traded funds.
Fitch applies an enterprise value (EV) multiple of 6.0x to the GC
EBITDA to calculate a post-reorganisation EV. The multiple is in
line with that of similar peers. This reflects Apex's leading
market position following the acquisitions in 2021-2024, good
revenue visibility combined with geographic and customer
diversification, and a strong cash-generative business. Fitch
deducts 10% of administrative claims from EV to account for
bankruptcy and associated costs.
The total amount of first-lien secured debt for claims includes
USD3.3 billion senior secured first-lien term loans and an equally
ranking USD460 million revolving credit facility (RCF) that Fitch
assumes to be fully drawn in distress. This results in the senior
secured first-lien debt instrument rating of 'B+' with a Recovery
Rating of 'RR3' and 52% recovery expectations upon default.
RATING SENSITIVITIES
Factors that Could, Individually or Collectively, Lead to Positive
Rating Action/Upgrade
- Continued organic growth supported by successful integration of
acquired companies with continued EBITDA margin improvement
- Fitch-defined EBITDA leverage below 6.0x on a sustained basis
- EBITDA interest coverage sustained above 2.5x
- (CFO-capex)/debt sustained above 5%
Factors that Could, Individually or Collectively, Lead to Negative
Rating Action/Downgrade
- Material slowdown in organic growth due to intensified
competition and slower than expected growth in global AuM
- Failure to integrate acquired companies and extract synergies, or
to benefit from scale economies, resulting in sustained weaker
EBITDA margin and FCF generation
- Debt-funded acquisitions preventing deleveraging, resulting in
Fitch-defined EBITDA leverage above 7.5x on a sustained basis
- EBITDA interest coverage below 2.0x
LIQUIDITY AND DEBT STRUCTURE
Satisfactory Liquidity: Fitch estimates Apex's pro forma
unrestricted cash at around USD77 million at end-March 2024. The
liquidity profile is underpinned by an USD460 million RCF, which
Fitch expects to be undrawn in 2025 following the PIK note
issuance, its forecast of positive FCF generation from 2025 and no
near-term debt maturities, although the US dollar first-lien term
loan has an amortising profile (1% a year).
Refinancing risk is manageable with the RCF maturing in 2026 and
term loans in 2028-2029, given Apex's proven access to markets, as
demonstrated by the recent PIK Holdco debt issuance.
ISSUER PROFILE
Apex Group is a leading independent global provider of services to
alternative investment management and corporate sectors. Services
include fund, corporate and trust administration services, middle
office, regulatory reporting, custody, depositary, and banking
solutions.
ESG CONSIDERATIONS
The highest level of ESG credit relevance is a score of '3', unless
otherwise disclosed in this section. A score of '3' means ESG
issues are credit-neutral or have only a minimal credit impact on
the entity, either due to their nature or the way in which they are
being managed by the entity. Fitch's ESG Relevance Scores are not
inputs in the rating process; they are an observation on the
relevance and materiality of ESG factors in the rating decision.
Entity/Debt Rating Recovery Prior
----------- ------ -------- -----
Apex Group
Treasury LLC
senior secured LT B+ Affirmed RR3 B+
Apex Group Treasury
Limited
senior secured LT B+ Affirmed RR3 B+
Apex Structured
Intermediate
Holdings Limited LT IDR B Affirmed B
APEX STRUCTURED: Moody's Alters Outlook on 'B2' CFR to Stable
-------------------------------------------------------------
Moody's Ratings affirmed the B2 corporate family rating and B2-PD
probability of default rating of Apex Structured Intermediate
Holdings Ltd. (Apex). Concurrently, Moody's downgraded to B2 from
B1 the rating of the senior secured bank credit facilities borrowed
by Apex Group Treasury Limited and Apex Group Treasury LLC. The
outlook for all entities was changed to stable from negative.
This rating action reflects the issuance of a $1.1 billion HoldCo
PIK note outside of the restricted group the proceeds of which, to
the extent not used to refinance preferred equity, are expected to
be downstreamed as equity and utilised primarily to repay second
lien debt and reduce the outstandings on the revolver.
RATINGS RATIONALE
The rating action incorporates (i) the planned repayment of the
second lien term loan ($455 million); (ii) M&A earnouts previously
funded under the revolving credit facilities (RCF) with $300
million used for a partial repayment of the RCF drawings and
funding a bolt-on acquisition; and (iii) refinancing certain series
of existing preferred equity. Following the repayment of the
second lien term loan Moody's anticipate a decrease in leverage;
for 2024, Moody's estimate pro forma leverage to be 6.6x, closer to
the 6.5x guidance for outlook stabilisation and down from 9.1x in
2023. Moody's expect interest cover, as measured by
Moody's-adjusted EBITA / interest expense to improve towards 1.6x
and Apex to be free cash flow positive in the next 12-18 months.
The rating action also takes into consideration the expected
improvement in financial performance in 2024, supported by good
organic revenue growth, which Moody's expect to be around 13% in
2024. The successful realisation of synergies related to the
various recently completed acquisitions, the reduction in staffing
costs and lower exceptional costs than in previous years as M&A is
expected to come to an end, will also support further margin
improvements. Moody's estimate Moody's-adjusted EBITDA margin to be
above 30% in 2024. This is after weaker EBITDA margin in 2023 due
to lower staff attrition and higher than planned exceptional costs
that should not reoccur.
The ratings for the senior secured bank credit facilities were
downgraded to align with the CFR, reflecting the all senior secured
pari passu capital structure following the repayment of the second
lien debt. Still, this repayment is credit positive in terms of
reducing overall leverage and accretive to interest coverage owing
to the elimination of the most expensive debt in the capital
structure.
Apex's B2 CFR continues to reflect Apex's position as one of the
largest independent fund services providers globally and its
largely recurring revenue streams with limited exposure to market
volatility. The rating also benefits from good profitability and
potential for substantial free cash flow generation. Furthermore,
Apex has a diversified customer base with high retention rates.
The ratings also reflect elevated financial leverage, a high level
of pro forma adjustments to EBITDA, and the integration risk
related to recently closed acquisitions. Furthermore, the ratings
are hindered by an acquisition-driven growth strategy that
constraints deleveraging possibilities and increases the
susceptibility to regulatory and legal risks. Moody's understand
that this strategy is expected to conclude with the closing of the
last M&A transaction in the third quarter of 2024.
In 2023 total adjustments to IFRS EBITDA , including refinancing,
acquisition and other exceptional costs, as well as some unrealized
synergies, amounted to approximately $255 million, which Moody's
expect to reduce substantially over the next 12-18 months as M&A is
scaled back and synergies are realized. Once this process has
largely completed the level of recurring costs within these EBITDA
adjustments will become clearer and Moody's will include these
recurring costs within Moody's calculation of Moody's-adjusted
EBITDA.
ENVIRONMENTAL, SOCIAL & GOVERNANCE CONSIDERATIONS
Governance is an important rating driver for Apex and this rating
action was driven by the company's downstreaming equity into the
restricted group. This was positive for the credit as it allowed
Apex to repay some of its obligations and reduce leverage. Still,
the presence of a PIK note as part of the capital structure
increases structural complexity and highlights the group's
tolerance for high leverage.
LIQUIDITY
Moody's consider Apex's liquidity to be adequate. As of March 31,
2024, the company had $77 million of cash on balance sheet, as well
as $175 million that is considered as restricted for regulatory
purposes. The group's liquidity is supported by its a $460 million
revolving credit facility (RCF) due July 2026, which is expected to
be drawn by $79 million pro forma for the new PIK.
Apex's liquidity profile further benefits from its good cash
generation ability and Moody's forecast proforma free cash flow to
reach around $100 million in 2024, following negative free cash
flow in 2023 due to sizeable one-off costs.
STRUCTURAL CONSIDERATIONS
The company's debt facilities consist of a first-lien term loan due
2028, divided into tranches of currently outstanding $1,338 million
and EUR725 million, incremental tranches of $320 million and $400
million raised in 2022 and $400 million raised in September 2023,
as well as a pari passu ranking $460 million RCF due July 2026. The
B2 rating on the first-lien senior secured facilities is in line
with the B2 CFR given the planned repayment of the second lien term
loan facility.
RATING OUTLOOK
The stable outlook reflects Moody's expectation that the company
will grow its EBITDA through a combination of good organic revenue
growth and the successful realisation of synergies related to the
various recently completed acquisitions. Moody's further
anticipate Apex to continue to de-lever below 6.5x on a Moody's
adjusted basis over the next 12-18 months, after deductions for
exceptional items deemed recurring. The outlook further assumes
that liquidity will remain adequate and that any larger
acquisitions will not lead to material re-leveraging. Furthermore,
the outlook also incorporates Moody's expectations that currently
large exceptional costs and unrealized synergies will reduce and
free cash flow generation will strengthen.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
Upward rating pressure could occur if Moody's-adjusted debt /
EBITDA sustainably decreases to below 5.5x, (after adjusting for
exceptional items considered recurring), Apex maintains high
operating profitability and substantial free cash flow generation.
Moreover, Apex would need to execute the integration of the
recently closed acquisitions and realise targeted synergies
successfully leading to a substantial reduction in one-off items
and other EBITDA adjustments.
Downward pressure on the rating could develop if Apex fails to
reduce its Moody's-adjusted debt/EBITDA to below 6.5x (after
adjusting for exceptional items considered recurring). A
significant decrease in EBITA margins from the current high levels
or sustained reduction in free cash flow generation would also put
pressure on the rating.
PRINCIPAL METHODOLOGY
The principal methodology used in these ratings was Business and
Consumer Services published in November 2021.
CORPORATE PROFILE
Apex is one of the largest independent providers of fund
administration services, financial and corporate solutions, founded
in 2003 by its current CEO and with headquarters in Bermuda. The
group is a global operator with presence in 50 countries across the
world, serving more than 10,000 clients with over $3 trillion of
assets on its platforms. Apex is majority-owned by private equity
firm Genstar (56%), with minority shareholders TA Associates (24%),
Management (12%), Mubadala (5%) and Carlyle (1%).
===========
B R A Z I L
===========
BRAZIL: Industrial Production in 7 Areas Exceed Pre-Pandemic Levels
-------------------------------------------------------------------
Rio Times Online, citing Brazilian stats agency IBGE, reports that
as we look at Brazil's industrial sector in May 2024, we see a
mixed landscape.
In seven of the fifteen areas surveyed, industrial production has
exceeded pre-pandemic levels, according to Rio Times Online. This
data highlights a significant recovery in these regions, the report
notes.
Leading the pack, Mato Grosso has seen a robust growth of 23.8%,
with Rio de Janeiro and Goias also showing notable increases of
10.5% and 8.9%, respectively, the report relays.
Yet, on a national scale, Brazil's average industrial production
still trails 1.4% behind pre-pandemic figures, the report notes.
This includes regions like Rio Grande do Sul, where production has
plummeted by 23.8%, the report discloses.
The industrial parks that surpassed pre-COVID levels were
-- Mato Grosso (23.8% above pre-pandemic),
-- Rio de Janeiro (10.5% above),
-- Goias (8.9% above),
-- Minas Gerais (5.0% above),
-- Santa Catarina (4.5% above),
-- Amazonas (4.3% above), and
-- Sao Paulo (1.6% above).
Regions with industrial production levels below pre-COVID-19
figures included:
-- Pernambuco (-0.4%),
-- Parana (-0.8%),
-- Ceara (-13.1%),
-- Northeast (-15.6%),
-- Para (-15.7%),
-- Espírito Santo (-16.5%),
-- Bahia (-17.6%), and
-- Rio Grande do Sul (-23.8%).
This mixed recovery highlights the varied effects of global
disruptions and different regional industry recoveries, the report
relays.
Brazil's industrial sector shows resilience and persistent
challenges, reflecting worldwide post-pandemic recovery trends, the
report notes.
Background
In May, Brazil's industrial production fell 0.9%, the second
consecutive decline after April's 0.5% drop, reports IBGE, the
report discloses.
This reduction erased the 1.1% gain achieved between February and
March, the report says.
Consequently, the industry now operates below the pre-pandemic
level of February 2020 and 17.8% below its peak in May 2011, the
report relays.
Compared to May 2023, industrial production dropped by 1.0%,
following an 8.4% rise in April, the report notes.
The industrial sector has grown by 2.5% in the first five months of
2024, the report discloses. Over the past 12 months, the sector
saw a 1.3% growth, although the pace has slowed, the report notes.
Out of 25 activities surveyed, 16 experienced a decline in May. The
most significant downturns were in:
-- motor vehicles, trailers, and semi-trailers (-11.7%) and
-- food products (-4.0%).
These sectors were heavily impacted by the floods in Rio Grande do
Sul.
Other sectors that declined included:
-- chemicals (-2.5%),
-- electrical machinery and equipment (-6.3%),
-- tobacco products (-28.2%),
-- metallurgy (-2.8%),
-- machinery and equipment (-3.5%),
-- printing and reproduction of recordings (-15.0%), and
-- various other products (-8.5%).
About Brazil
Brazil is the fifth largest country in the world and third largest
in the Americas. Luiz Inacio Lula da Silva won the 2022 Brazilian
general election. He was sworn in on January 1, 2023, as the 39th
president of Brazil, succeeding Jair Bolsonaro.
S&P Global Ratings raised on Dec. 19, 2023, its long-term global
scale ratings on Brazil to 'BB' from 'BB-'. The outlook on the
long-term ratings is stable. S&P affirmed Brazil's global scale
short-term ratings at 'B' and its national scale long-term rating
at 'brAAA'. S&P also raised the transfer and convertibility
assessment on the country to 'BBB-' from 'BB+'. S&P said, "The
stable outlook reflects our expectation that Brazil will maintain
A strong external position, thanks to strong commodity output and
limited external financing needs. We also believe Brazil's
institutional framework can sustain stable and pragmatic
policymaking based on extensive checks and balances across the
executive, legislative, and judicial branches of government. We
expect a very gradual fiscal correction but anticipate fiscal
deficits will remain large."
Fitch Ratings affirmed on Dec. 15, 2023, Brazil's Long-Term
Foreign-Currency Issuer Default Rating (IDR) at 'BB' with a Stable
Outlook. Fitch said Brazil's ratings are supported by its large and
diverse economy, high per-capita income, and deep domestic markets
and a large cash cushion that support the sovereign's financing
flexibility and its high local-currency debt share. Strong external
finances support resilience to shocks, underpinned by a flexible
exchange rate, robust international reserves and a sovereign net
external creditor position. The ratings are constrained by weak
economic growth potential, relatively low governance scores, high
and rising government debt/GDP, and budgetary rigidities. A new
fiscal framework introduced this year aims to anchor a gradual
consolidation process and address these fiscal weaknesses, but its
effectiveness is increasingly unclear.
Moody's credit rating for Brazil was last set at Ba2 in 2018 with
stable outlook. Moody's affirmed the Ba2 issuer ratings and
senior unsecured bond ratings in April 2022.
DBRS Inc., on August 15, 2023, upgraded Brazil's Long-Term
Foreign and Local Currency - Issuer Ratings to BB from BB (low).
At the same time, DBRS Morningstar confirmed Brazil's
Short-term Foreign and Local Currency - Issuer Ratings at R-4.
The trend on all ratings is Stable (March 2018).
BRAZIL: Steady Course for Service Sector in May
-----------------------------------------------
Rio Times Online reports that in May 2024, Brazil's service
industry maintained its momentum, marking a pause after months of
gains.
The sector's performance remained unchanged from April, yet it
logged a slight 0.8% year-over-year increase, according to IBGE
data, according to Rio Times Online.
This modest growth contrasts sharply with the robust 5.5% rise
observed just the month before, the report relays.
Rio Times Online discloses that such fluctuations underscore the
broader recovery trajectory post-2020, with services now 12.7%
above pre-pandemic benchmarks, albeit slightly trailing December
2022's peak by 0.9%.
As 2024 progresses, services have expanded by 2.0% compared to last
year, although the pace has moderated recently, the report notes.
From April to May, growth slowed from 1.6% to 1.3%, the report
relays. This data, derived from the Monthly Service Survey (PMS)
by the IBGE, reflects subtle yet critical economic pulses, the
report says.
Rodrigo Lobo, who oversees the survey, remarked on the stable yet
uneven performance across different areas, the report discloses.
While three out of five sectors dipped, notably transportation by
1.6% due to dwindling air and road passenger revenues, there were
gains elsewhere, the report notes.
Household services rebounded by 3.0%, erasing previous losses,
propelled by dining out on Mother's Day and major events like a
Madonna concert in Rio, the report relays.
Professional services also ticked up by 0.5%, a partial recovery
from prior declines, the report discloses.
Tourism tells a mixed tale. Overall, tourist activities slipped by
0.2%, with significant regional variances, the report relates.
Rio Grande do Sul felt acute impacts from recent flooding,
affecting local services and infrastructure, the report notes.
Conversely, Rio de Janeiro and Bahia experienced gains, the report
says.
Steady Course for Brazil's Service Sector in May 2024
Nationally, the service volume in 19 federal units declined, with
notable decreases in Minas Gerais and Santa Catarina, the report
discloses.
In contrast, Mato Grosso's service volume jumped by 6.2%, thanks to
robust cargo transport linked to agriculture, a vital part of the
central-west's economy, the report notes.
These developments matter as they indicate not only the resilience
and challenges within Brazil's service sector but also the varying
regional dynamics shaping the national economic landscape, the
report relays.
As the PMS continues to track these changes, upcoming reports will
further illuminate the sector's role in Brazil's economic recovery
and growth, the report adds.
About Brazil
Brazil is the fifth largest country in the world and third largest
in the Americas. Luiz Inacio Lula da Silva won the 2022 Brazilian
general election. He was sworn in on January 1, 2023, as the 39th
president of Brazil, succeeding Jair Bolsonaro.
S&P Global Ratings raised on Dec. 19, 2023, its long-term global
scale ratings on Brazil to 'BB' from 'BB-'. The outlook on the
long-term ratings is stable. S&P affirmed Brazil's global scale
short-term ratings at 'B' and its national scale long-term rating
at 'brAAA'. S&P also raised the transfer and convertibility
assessment on the country to 'BBB-' from 'BB+'. S&P said, "The
stable outlook reflects our expectation that Brazil will maintain
A strong external position, thanks to strong commodity output and
limited external financing needs. We also believe Brazil's
institutional framework can sustain stable and pragmatic
policymaking based on extensive checks and balances across the
executive, legislative, and judicial branches of government. We
expect a very gradual fiscal correction but anticipate fiscal
deficits will remain large."
Fitch Ratings affirmed on Dec. 15, 2023, Brazil's Long-Term
Foreign-Currency Issuer Default Rating (IDR) at 'BB' with a Stable
Outlook. Fitch said Brazil's ratings are supported by its large and
diverse economy, high per-capita income, and deep domestic markets
and a large cash cushion that support the sovereign's financing
flexibility and its high local-currency debt share. Strong external
finances support resilience to shocks, underpinned by a flexible
exchange rate, robust international reserves and a sovereign net
external creditor position. The ratings are constrained by weak
economic growth potential, relatively low governance scores, high
and rising government debt/GDP, and budgetary rigidities. A new
fiscal framework introduced this year aims to anchor a gradual
consolidation process and address these fiscal weaknesses, but its
effectiveness is increasingly unclear.
Moody's credit rating for Brazil was last set at Ba2 in 2018 with
stable outlook. Moody's affirmed the Ba2 issuer ratings and
senior unsecured bond ratings in April 2022.
DBRS Inc., on August 15, 2023, upgraded Brazil's Long-Term
Foreign and Local Currency - Issuer Ratings to BB from BB (low).
At the same time, DBRS Morningstar confirmed Brazil's
Short-term Foreign and Local Currency - Issuer Ratings at R-4.
The trend on all ratings is Stable (March 2018).
ELETROBRAS: Sets Stage for Major Stake Sale in ISA Cteep
--------------------------------------------------------
Rio Times Online reports that Centrais Eletricas Brasileiras S.A.
(Eletrobras) (ELET3) recently launched a major financial
initiative, initiating a secondary public offering of up to 130
million preferred shares in ISA Cteep.
This move is crucial for streamlining operations by offloading
non-essential minority stakes, according to Rio Times Online.
Initially, the offering will include 60 million shares, potentially
expanding to 130 million to meet rising demand, the report notes.
The pricing will be finalized on July 18.
As a major entity in Brazil's electrical sector, ISA Cteep
specializes in transmitting high-voltage electricity nationwide,
the report relays.
This sale could generate over R$3.5 billion if additional shares
are fully subscribed, the report discloses. These funds are vital
as Eletrobras reshapes its asset base post-privatization, the
report says. However, the shares fell by 4.13% to R$25.98 soon
after the announcement, the report notes.
Citigroup, Itau BBA, Banco Safra, and XP Investimentos are
coordinating the sale, reflecting Eletrobras' commitment to
refining its investment portfolio.
Holding 35.74% of Cteep, Eletrobras considered a complete
divestiture last year but withdrew, the report says.
This year, with debenture holder waivers secured, the company can
pursue various strategic transactions, like asset swaps and control
modifications, the report discloses.
This effort by Eletrobras is more than a financial transaction; it
marks a strategic shift towards greater operational efficiency and
a streamlined corporate structure, the report notes.
Two years since its privatization on June 9, 2022, Eletrobras
(ELET3) has significantly reshaped Brazil's energy sector
landscape, the report recalls.
Privatization fueled optimism, promising streamlined operations and
less government interference, the report relays.
Analysts from XP and Bank of America express a mostly positive
outlook. They commend improved management and cost-efficiency, the
report notes.
Rio Times Online says that the XP suggests a target price of
R$57.00 for ELET3 shares, indicating significant growth potential.
Bank of America also adjusts its price targets based on market
conditions and political dynamics, the report says. XP forecasts
energy prices rising steadily in the coming years, the report
adds.
About Eletrobras
Eletrobras (NYSE: EBR) or Centrais Eletricas Brasileiras S.A. --
eletrobras.com -- is a major Brazilian electric utilities company.
It is Latin America's biggest power utility company, having a
generating capacity of about 43,000 MW. The company holds stakes
in a number of Brazilian electric companies and employs more than
25,000 people. The Brazilian federal government owns 52% stake in
Eletrobras. The company was founded in 1962 and is based in Rio de
Janeiro, Brazil.
Its subsidiaries include Eletrobras Distribuicao Acre; Eletronorte
(Centrais Eletricas do Norte do Brasil SA); Eletrobras Electropar;
CHESF (Companhia Hidro-Eletrica do Sao Francisco; Sao Francisco's
Hydroelectric Company); and Eletrobras CGTEE.
S&P Global Ratings affirmed in April 2022, its 'BB-' global scale
issuer credit and issue-level ratings on Eletrobras. S&P also
affirmed its 'brAAA/brA-1+' national scale ratings. The outlook on
Eletrobras remains stable, mirroring that on the sovereign.
Fitch Ratings in May 2024 affirmed Eletrobras' Long-Term Foreign
and Local Currency Issuer Default Ratings (IDRs) and outstanding
senior unsecured bond rating at 'BB-'. Fitch has affirmed the
National Scale ratings for Eletrobras and its subsidiary Companhia
Hidro Eletrica do Sao Francisco (Chesf), including Chesf's local
debenture issuance, at 'AA(bra)'. The Outlook for the corporate
ratings is Negative.
Moody's, in May 2024, affirmed Eletrobras' Corporate Family Rating
at Ba2 and Baseline Credit Assessment (BCA) at ba3, outlook remains
stable. The rating action follows Moody's change in outlook on the
Ba2 rating of the Government of Brazil to positive from stable, on
May 1, 2024.
===============
C O L O M B I A
===============
COLOMBIA: Inflation Accelerates for the First Time in 15 Months
---------------------------------------------------------------
globalinsolvency.com, citing Bloomberg News, reports that Colombian
inflation accelerated for the first time in 15 months in a setback
for the government which wants faster interest rate cuts to revive
economic growth.
Consumer prices rose 7.18% in June from a year earlier, the
statistics agency said, from 7.16% in May, according to
globalinsolvency.com.
Prices roses 0.32% from a month earlier, slightly higher than the
0.30% median forecast of 25 analysts surveyed by Bloomberg.
One measure of core inflation closely tracked by the central bank,
which excludes volatile food prices, slowed to 7.64%% from a year
earlier, globalinsolvency.com adds.
As reported in the Troubled Company Reporter-Latin America, S&P
Global Ratings, on Jan. 18, 2024, revised the outlook on its
long-term ratings on Colombia to negative from stable. S&P
affirmed its 'BB+' long-term foreign currency and 'BBB-' long-term
local currency sovereign credit ratings on Colombia. S&P also
affirmed its 'B' short-term foreign currency and 'A-3' short-term
local currency ratings.
===================================
D O M I N I C A N R E P U B L I C
===================================
AEROPUERTOS DOMINICANOS XXI: Fitch Rates USD500MM Notes 'BB+'
-------------------------------------------------------------
Fitch Ratings has assigned Aeropuertos Dominicanos Siglo XXI,
S.A.'s (Aerodom) USD500 million notes due in 2034 a final rating of
'BB+' with a Stable Outlook. Final pricing for the USD notes was a
coupon of 7.00%, below the rate assumed in Fitch's base and rating
cases by the time the expected rating was assigned. The debt
structure's closing features are also consistent with those
previously reviewed by Fitch.
RATING RATIONALE
The rating reflects the risk regarding a six-airport portfolio
located in the Dominican Republic, one of the largest tourism
destinations in the Caribbean, which holds a significant market
share of the country's air traffic and cargo. Traffic at Santo
Domingo Airport (SDQ), which accounts for 85% of the portfolio's
total volume, has demonstrated low volatility and resilient traffic
patterns, partially supported by the Dominican diaspora.
Traffic is highly concentrated in international and leisure
passengers, heavily reliant on North American demand, and somewhat
exposed to competition from neighboring touristic destinations. The
concession allows for periodic tariff increases according to
inflation in the U.S. and requires a USD830 million capex
investment plan (CIP) through maturity.
The rating also reflects the transaction's exposure to refinancing
risk and to interest rate volatility given the term loan carries a
floating rate (SOFR). Refinancing risk is mitigated by Aerodom's
proven market access and long concession tail. The risk of rate
volatility is substantially mitigated, with only 44% of debt
affected for five years. Fitch also expects that cash flow will
easily cover minor interest rate hikes. The debt is USD
denominated, but the risk of foreign currency variations is
mitigated by the high proportion of USD denominated revenues and
high operational margins.
Under the rating case, maximum leverage, measured as net debt to
EBITDA, is 4.3x and the issuer is expected to deleverage to around
3x in the fifth year. These metrics are strong for the rating,
according to Fitch's applicable criteria, but the rating is
ultimately constrained by risks related to general economic
conditions in the Dominican Republic and by the Country Ceiling.
Fitch believes that Aerodom has sufficient liquidity to preserve
debt service if short-lived capital controls are imposed, as over
90% of revenues are USD-denominated and around 75% are collected
offshore and the transaction will have a six-month offshore debt
service reserve account (DSRA). The latter, coupled with robust
financial metrics, a strong ultimate parent and a concession clause
that mentions that existing or future exchange controls or funds
transfers measures shall not be applicable to the concession,
support a two-notch uplift from the Dominican Republic's Country
Ceiling of 'BB-'.
KEY RATING DRIVERS
Leisure-Oriented Portfolio Anchored by Capital City Airport
(Revenue Risk - Volume: Midrange): Aerodom's six airports handle
36% of the Dominican Republic's passenger volume, primarily leisure
travelers and those visiting friends and relatives (VFR), who
exhibit low volatility. Traffic fully recovered from the
coronavirus pandemic by 2022. SDQ is the country's main airport,
has a stable traffic profile and serves diverse carriers, with the
potential for growth with the establishment of low-cost carrier
Arajet's hub. The portfolio's performance is partially linked to
economic conditions in North America and Europe, as more than 95%
of traffic is international.
Inflation Adjusted Tariffs (Revenue Risk - Price: Midrange): The
concession agreement allows for periodic tariff increases in line
with changes in the U.S. consumer price index (CPI) without
government approval, from 2024, which is credit positive. Aerodom
was also granted an additional increase of 18.4% to be implemented
between 2023 and 2025 to make up for the suspension of tariffs
during 2017-2023. More than 90% of revenues are U.S.
dollar-denominated and about 75% of total revenues are collected in
offshore accounts.
Well-Defined Capex Plan for Regional Airports (Infrastructure
Development and Renewal: Midrange): Aerodom's infrastructure has a
well-defined CIP to be funded with its cashflow plus 20% of
shareholder distributions. The concession extension includes a
commitment to build and operate a new terminal with the capacity of
four million passengers at SDQ to be completed by 2028, as well as
other capex and replacement expenditure (repex) obligations.
The budgeted capex exceeds the contractual USD830 million required
by the concession through 2060 and is deemed adequate by the
independent engineer (IE). The portfolio benefits from management
by Vinci Airports, a reputable global operator with proven
experience in the sector and in Latin America.
Bullet Debt, Adequate Covenants (Debt Structure: Midrange): The
rated debt is pari-passu with an unrated U.S. dollar-denominated
five-year floating-rate term loan, which is included in its
financial projections. The interest rate risk from the term loan is
largely mitigated by the relatively short term of the debt, its
weight with respect to total debt (44%) and Aerodom's ample
projected cashflow.
Bullet debt structure's refinance risk is mitigated by Aerodom's
proven market access and a 26-year concession tail. Debt holders
benefit from a six-month offshore DSRA and a covenant package that
includes limits on additional indebtedness if leverage reaches 5x.
The foreign-currency risk is mitigated by the high proportion of
U.S. dollar denominated revenues (over 90%) and high operational
margins.
Financial Profile
The most relevant financial metric for this project is leverage,
measured as net debt to EBITDA, given the debt's bullet payment
structure. Under the rating case, the maximum leverage is 4.3x and
will decline to around 3x in the fifth year, as EBITDA strengthens
gradually, which is considered positive for the refinancing
prospects.
PEER GROUP
Aerodom's closest regional peer is ACI Airport SudAmerica, S.A.
(ACI, BB+/Stable). ACI operates the Carrasco International Airport
in Uruguay. ACI is also an origin and destination (O&D) airport
with mostly international passengers. ACI's volume and price risk
assessments are similar to Aerodom's, but it has a stronger
infrastructure assessment and a fully amortizing debt structure
with a partial cash-sweep and a springing guarantee, though metrics
are lower than Aerodom's.
ACI's rating also reflects its dependence on structural liquidity
to meet obligations and a delayed recovery from the pandemic. In
contrast, Aerodom's projected leverage is strong for the rating,
but constrained by the Dominican Republic's Country Ceiling and the
company's buffer to support short lived capital controls.
RATING SENSITIVITIES
Factors that Could, Individually or Collectively, Lead to Negative
Rating Action/Downgrade
- Deterioration on Fitch's view regarding the Dominican Republic's
risk of imposing capital controls, affecting the ability to
transfer currency or if offshore revenue collection reduces over
time.
- Traffic growth or overall financial performance consistently
below Fitch's rating case assumptions (7.2 and 7.6 million
passengers in 2024 and 2025, respectively), that could lead to a
sustained leverage position of around 5.0x.
Factors that Could, Individually or Collectively, Lead to Positive
Rating Action/Upgrade
- Improvement in Fitch's view regarding the Dominican Republic's
risk of imposing capital controls, provided issuer's financial
profile is still consistent with a higher rating and offshore
revenue collection continues to be above 75% of total revenues.
TRANSACTION SUMMARY
Aerodom is the concessionaire of six airports in the Dominican
Republic: SDQ, Gregorio Luperón Airport (POP), La Isabela (JBQ),
El Catey (AZS), María Montez (BRX), and Arroyo Barril (EPS). The
Dominican Republic has record of robust economic growth and,
according to the traffic advisor, is the largest Caribbean tourism
market and one of the fastest-growing economies in the region. In
2016, Aerodom was acquired by Vinci Airports, fully controlled by
Vinci S.A (the Sponsor), which took over the airports' operations
in that year.
Aerodom operates under a concession agreement that was granted in
1999 by the Airport Commission, which has been extended to expire
in March 2060. The concession features an automatic tariff
adjustment linked to the U.S. CPI, economic equilibrium clauses for
downside protection, a termination payment clause that could cover
outstanding senior debt repayment, and a CIP in which Aerodom is
committed to invest USD830 million. Of that amount, USD272 million
is earmarked for the new terminal at SDQ, the refurbishment of the
existing one and new control towers at SDQ and POP.
The CIP aims to cover all capex and repex needed to ensure the
portfolio copes with the envisioned traffic growth, and improve and
maintain the quality of services provided in all airports.
Aerodom's airports are crucial to the Dominican Republic's
connectivity. They serve as key gateways for passengers and cargo,
and handle 36% of the country's traffic and more than half of
import and export volumes. Aerodom's traffic grew by a CAGR of 2.7%
over 2003-2023, with international traffic, mainly tourists and
non-resident Dominicans VFR, accounting for 99.9% of all
passengers.
Aerodom has implemented a USD900 million debt structure comprised
of i) USD500 million, 10-year, bullet secured notes in the 144A /
Reg S market (rated), and ii) USD400 million, 5-year, bullet senior
secured term loan (not rated). Both tranches are pari-passu and
subject to cross-acceleration features. After the term loan's full
disbursement, debt proceeds will be used to repay the existing
debt, pay the remaining concession extension fee, reimburse the
payment of the first concession fee instalment to the Sponsor, pay
a success fee to the Sponsor for the closing of the financing, and
cover transaction costs.
SECURITY
The debt is secured on a first priority basis by a pledge of 100%
of the shares of Aerodom.
ESG CONSIDERATIONS
The highest level of ESG credit relevance is a score of '3', unless
otherwise disclosed in this section. A score of '3' means ESG
issues are credit-neutral or have only a minimal credit impact on
the entity, either due to their nature or the way in which they are
being managed by the entity. Fitch's ESG Relevance Scores are not
inputs in the rating process; they are an observation on the
relevance and materiality of ESG factors in the rating decision.
Entity/Debt Rating Prior
----------- ------ -----
Aeropuertos Dominicanos
Siglo XXI, S.A.
Aeropuertos Dominicanos
Siglo XXI, S.A./Airport
Revenues - Senior
Secured Debt/1 LT LT BB+ New Rating BB+(EXP)
===========
M E X I C O
===========
BANCO BANCREA: Fitch Assigns 'BB-' LongTerm IDRs, Outlook Stable
----------------------------------------------------------------
Fitch Ratings has assigned Banco Bancrea, S.A., Institucion de
Banca Multiple (Bancrea) 'BB-' Long-Term Foreign and Local Currency
Issuer Default Ratings (IDRs), 'B' Short-Term Foreign and Local
Currency IDRs and a 'bb-' Viability Rating (VR). In addition, Fitch
has assigned Bancrea a 'ns' Government Support Rating (GSR). The
Rating Outlook for the Long-Term IDRs is Stable.
KEY RATING DRIVERS
Gradual Business Consolidation: Bancrea's IDRs are driven by its
'bb-' VR and consider the bank's consistently executed business
strategies and objectives, which culminate in recurring total
operating income (TOI) generation. At YE2023, the bank reported a
TOI of USD116 million, which increased 80% from YE2022 and averaged
USD66 million over the last four-years (2020 to 2023).
The TOI was boosted by the bank's net interest margin and
significant non-interest income streams, such as foreign exchange
trading and trust services. Fitch assigned the bank a Business
Profile score of 'b+' reflecting its material gap in scale and
revenues when compared with its peers among Mexican mid-sized
banks. However, Fitch expects Bancrea's total income to continue
expanding in the medium term and reflects this with a positive
outlook for the Business Profile score.
Bancrea's clearly articulated business model partially offsets its
modest market share, accounting for less than 0.5% of the banking
system's total loans and deposits.
High Balance Sheet Expansion: Fitch assigned a 'bb-' risk profile
score to Bancrea considering the bank's underwriting standards,
which demonstrate a higher risk appetite than that of its closest
peers. These standards are notably shaped by the bank's high credit
concentrations per borrower and, given broad balance sheet
expansion, these factors could potentially exert pressure on the
bank's solvency. As of the end of 1Q24, Bancrea reported 20.5%
year-over-year growth in its total loan portfolio, significantly
outpacing the banking system's average.
Limited Asset Quality: Bancrea continues to maintain low Stage 3
loan to total loans metrics. As of 1Q24, this metric stood at 0.6%,
compared to an average of 0.4% from 2020 to 2023, while loan loss
allowance coverage remained strong at 1.7x of Stage 3 loans.
Although Bancrea's average core asset quality metric implies 'bbb,'
the score has been adjusted to 'bb' to account for its high credit
concentrations. As of the same date, the top 20 borrowers accounted
for 27.9% of the total loan portfolio, or 2.8x Common Equity Tier 1
(CET1) (1Q23: 28.9% and 3.2x, respectively).
Additionally, Stage 3 loans plus foreclosed assets represented 3%
of total loans plus foreclosed assets, a level that compares
unfavorably with peers. Fitch expects a gradual increase in
Bancrea's impaired loan rates, potentially aligning with those
observed in mid-sized banks with a corporate focus, but still
within levels consistent with its current rating.
Good Profitability: Fitch has assigned Bancrea an Earnings and
Profitability score of 'bb-' with a positive outlook. Fitch expects
Bancrea's profitability to continue improving, supported by
consistent loan portfolio expansion in a high-interest-rate
environment, low credit costs and sustained growth in customer
deposits. Customer deposits have enabled the bank to replace
higher-cost financial liabilities.
The consistent increase in non-financial income, primarily from
foreign exchange brokerage and fiduciary services, has also
contributed to profitability. As of 1Q24, the operating profit to
risk-weighted assets (RWA) ratio was 2.9%, compared to an average
of 1.3% from 2020 to 2023.
Intrinsic Capitalization Improvement: Fitch expects Bancrea's
capitalization to continue improving, driven by profit generation.
The bank's reduced need for shareholder contributions has been
factored into the current ratings. Fitch has assigned the bank a
Capitalization and Leverage score of 'bb-'. The CET1 to RWA ratio
as of 1Q24 stood at 10.4%, a level that compares unfavorably with
its peers and the banking system in general. Fitch estimates that
this ratio will improve to around 11% by the end of 2024, supported
by retained earnings and growth in RWAs.
Additionally, Fitch views positively the bank's capacity to absorb
losses, which is attributed to its credit reserves and the use of
hybrid capital instruments with high triggers for coupon deferral
or conversion. Bancrea regularly issues additional and
supplementary capital instruments, which, as of 1Q24, contributed
to a total regulatory capitalization ratio of 13.8%. At the same
date, these instruments represented close to 25% of the regulatory
capital.
Good Funding and Liquidity: Fitch has assigned Bancrea a Funding
and Liquidity score of 'bb'. The agency projects that Bancrea will
continue to fund its operations primarily through customer deposits
and will maintain its efforts to reduce funding costs. Customer
deposit growth remains robust, contributing to improvements in the
loan-to-deposit ratio, which stood at 107.6% as of the end of 1Q24.
As of the same date, customer deposits grew by 28% year-over-year,
although their structure is concentrated in term deposits and by
depositor.
The top 20 depositors accounted for 27.8% of total deposits (1Q23:
24.4%). Liquidity levels are deemed adequate to withstand stress
scenarios, with regulatory liquidity ratios as of 1Q24 standing at
139% for the Liquidity Coverage Ratio and 117% for the Net Stable
Funding Ratio.
RATING SENSITIVITIES
Factors that Could, Individually or Collectively, Lead to Negative
Rating Action/Downgrade
- Bancrea's ratings could be downgraded if its financial profile is
pressured by deteriorating asset quality and weakened capital
position, specifically if the CET1 to RWA ratio consistently
remains below 10%, the total regulatory capitalization ratio does
not stay near 12%, or the operating profit to RWA ratio
consistently falls below 1.25%.
Factors that Could, Individually or Collectively, Lead to Positive
Rating Action/Upgrade
- A substantial medium- to long-term improvement in the bank's
business profile. This would be characterized by a sustained
increase in TOI and a reduction in credit concentrations, while
consistently maintaining operating profit to RWA metrics above 2%,
CET1 to RWA ratios near 12% and a total regulatory capitalization
ratio of 15%.
Government Support Rating: Bancrea's 'ns' GSR reflects Fitch's
assessment that there is no reasonable assumption that support from
authorities will be available since the bank is not considered as a
domestic systemically important bank (D-SIB), has low market share
and interconnectedness within the financial system. As of 1Q24,
Bancrea customer deposits represented 0.4% of the Mexican banking
system.
- Upside potential is limited and can only occur over time with a
material growth of the bank's market share.
- There is no downside potential for the GSR.
VR ADJUSTMENTS
The Asset Quality score has been assigned below the implied score
due to the following adjustment reason: Concentrations (negative).
SUMMARY OF FINANCIAL ADJUSTMENTS
Fitch classified pre-paid expenses and other deferred assets as
intangibles and deducted them from total equity due to their low
loss absorption capacity.
DATE OF RELEVANT COMMITTEE
27 June 2024
ESG CONSIDERATIONS
The highest level of ESG credit relevance is a score of '3', unless
otherwise disclosed in this section. A score of '3' means ESG
issues are credit-neutral or have only a minimal credit impact on
the entity, either due to their nature or the way in which they are
being managed by the entity. Fitch's ESG Relevance Scores are not
inputs in the rating process; they are an observation on the
relevance and materiality of ESG factors in the rating decision.
Entity/Debt Rating
----------- ------
Banco Bancrea, S.A.,
Institucion de
Banca Multiple LT IDR BB- New Rating
ST IDR B New Rating
LC LT IDR BB- New Rating
LC ST IDR B New Rating
Viability bb- New Rating
Government Support ns New Rating
===============
X X X X X X X X
===============
[*] BOND PRICING: For the Week July 8 to July 12, 2024
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Issuer Name Cpn Price Maturity Cntry
Curr
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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
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CK HutchisonInt'l 20 3.4 74.1 5/8/2050 KY USD
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Colombia Gov't Int'l Bond 4.1 61.2 5/15/2051 CO USD
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Colombia Gov't Int'l Bond 7.3 71.1 10/26/2050 CO COP
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Colombia Telecomunicaciones 5.0 67.5 7/17/2030 CO USD
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Colombian TES 7.3 70.9 10/26/2050 CO COP
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Earls Eight 0.1 64.5 12/20/2031 KY AUD
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El Salvador Gov'tInt'l Bond 7.1 68.3 1/20/2050 SV USD
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ENA Master Trust 4.0 70.5 5/19/2048 PA USD
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Enel Generacion Chile SA 6.2 29.2 10/15/2028 CL CLP
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Esval SA 3.5 13.1 2/15/2026 CL CLP
Farfetch 3.8 4.3 5/1/2027 KY USD
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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
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Genneia SA 2.0 56.9 7/14/2028 AR USD
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Guacolda Energia SA 4.6 70.5 4/30/2025 CL USD
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Hector A Bertone SA 1.9 0.0 4/7/2024 AR USD
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Multiplo SA 3.3 59.5 BR USD
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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
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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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contact Peter A. Chapman at 215-945-7000.
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