/raid1/www/Hosts/bankrupt/TCRLA_Public/240805.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, August 5, 2024, Vol. 25, No. 156
Headlines
A R G E N T I N A
ARGENTINA: 8MM People Face Extreme Poverty
ARGENTINA: Increases 2024 Budget; Allocates ARS100BB to Spy Agency
CAPEX SA: Fitch Hikes LongTerm IDR to 'B-', Outlook Stable
B A H A M A S
FTX GROUP: Bankruptcy Claims Boost Hedge Fund Diameter's Gains
FTX GROUP: Exec Gets Prison Report Date Delayed After Dog Attack
B R A Z I L
MV24 CAPITAL: Fitch Affirms 'BB+' Rating on Senior Secured Notes
[*] BRAZIL: Industrial Production Hits Four-Year High in June 2024
C H I L E
CHILE: Holds Rate at 5.75% in Pause to Yearlong Easing Cycle
X X X X X X X X
[*] BOND PRICING: For the Week July 29 to Aug. 2, 2024
[*] IMF Issues Conclusions of XVIII Regional Conference on CAPDR
- - - - -
=================
A R G E N T I N A
=================
ARGENTINA: 8MM People Face Extreme Poverty
------------------------------------------
Buenos Aires Times reports that over 25 million people are
considered poor in Argentina today and, out of that total, nearly
eight million are facing extreme poverty.
The numbers are not only a screenshot of what is happening in the
country - it also provides a worrying forecast of what could happen
if the situation is prolonged, according to Buenos Aires Times.
The growth of these indicators was exponential in the first quarter
of the year, and in the medium and long run, they will prove
decisive for others, such as child mortality and life expectancy,
the report notes.
During a recent interview, Buenos Aires Province Habitat & Urban
Development minister (and former national economy minister) Silvina
Batakis stated that the mortality rate this year and next year
would worsen due to the lack of medication and food, the report
relays.
Specialists consulted by Perfil say that, even though poverty and
access to healthcare have a high impact on mortality and life
expectancy data, for these figures to be representative they must
be measured in the medium and long term, Buenos Aires Times
discloses. The extent of the damage, they warn, may not be seen
for years to come, the report relays.
Rising Poverty
Using recent data exclusively from official sources - the INDEC
national statistics bureau and the Health Ministry - a correlation
may be noted in terms of poverty, destitution and child mortality,
the report relays.
In 2020, extreme poverty reached 10.5 percent of the population and
poverty 42 percent, while child mortality stood at 8.4 out of every
1,000 live births under one year old, the report notes. By the
following year, both poverty (37.3 percent) and destitution (8.2
percent) had dropped slightly, the report discloses. So did child
mortality, down to 8 out of 1,000. In 2022 - the last year for
which child mortality data is available - poverty once again rose
(39.2 percent) offset by a slight drop in extreme poverty (8.1
percent), the report relays. During that year, child mortality was
8.4 out of every 1,000, the report says.
The growth in levels of both poverty and extreme poverty, even
though it has been sustained, climbed in the first quarter of 2024
as against the last quarter of 2023: the former level went from
44.7 percent to 55.5 percent and the latter from 9.6 percent in
December 2023 to 17.5 percent, according to data tracked by the
Catholic University of Argentina's Social Debt Observatory, the
report notes.
Life Expectancy
Just as poverty and destitution are not the only indicators driving
child mortality, they are not the only factor they affect either,
the report relays. Access to food and healthcare, closely related
with these rates, also affects life expectancy, the report
discloses.
Dr. Eugenio Semino, Ombudsman for the Elderly in Buenos Aires City,
told this publication that in Argentina "life expectancy is
declining, and the gap which favored women is narrowing," the
report relays.
In Argentina, explained Semino, life expectancy is between 74 and
75 years old - almost three years below the world average. He added
that there is no accurate data because there are no statistics
reflecting the true reality of ageing in the country's population,
the report relays.
According to the Centro de Economia Politica (CEPA, "Argentine
Political Economy Centre"), which has prepared a report based on
official data, during the first five months of 2024, out of every
adjusted 100 pesos, 31.5 pesos come from pension cutbacks and 23.2
from public works cutbacks, the report notes.
These falls, if maintained in the long run, could have a further
impact on both child mortality and life expectancy in the years to
come, the report 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: Increases 2024 Budget; Allocates ARS100BB to Spy Agency
------------------------------------------------------------------
Buenos Aires Times reports that President Javier Milei's government
has increased the national budget for 2024, expanding it by another
100 billion pesos in order to "strengthen" the newly reorganized
intelligence services.
The funds will be dedicated to the new SIDE state intelligence
secretariat, which has been reinstated following the shutdown of
the AFI federal intelligence agency, according to Buenos Aires
Times.
The cash, according to a government statement, comes from "reserved
funds," the report notes.
The new allocation for SIDE was confirmed via Decree 656/2024,
published on the Official Gazette, the report relays. It was
signed by President Milei, Economy minister Luis Caputo and
Deregulation & State Transformation Minister Federico Sturzenegger,
among others, the report notes.
The government announced the dissolution of the AFI, saying it
would be replaced by the resurrected SIDE, an organization with a
complicated history, the report discloses.
The new change explained that "it is necessary to allocate the
budgetary items which help initially settle the actions to
reorganize the National Intelligence System and the proper
operation of the aforementioned decentralized bodies comprising
it," the report says.
"The main aim of those funds will be the National Intelligence
System to ensure the security, defence and integrity of the
Argentine Republic", confirmed the document decreeing the
allocation of the budget to the Argentine Intelligence System, the
National Security Agency, the Cybersecurity Agency and the Internal
Affairs Division, the report notes.
They pointed out that it was necessary to "establish their reserved
nature" due to "the nature of the destination of the allocated
funds" and that "their publicity would affect the normal
development of tasks of the bodies comprising the system," the
report relays.
"The exceptional nature of this situation makes it impossible to
follow the ordinary formalities set forth in the Constitution to
approve laws", they concluded, the report relays.
After the results obtained in the receivership of the agency which
took place last December 12, 2023, the government ordered the
dissolution of the AFI, and in its stead, the body governing the
National Intelligence System became the SIDE, left in charge of
Sergio Neiffert, the report discloses.
In a release from the President's Office, the AFI's closing was
grounded on "the altering of the role of the intelligence agency
for decades being full" and that "the body was used for such
spurious activities as internal espionage, the trafficking of
influences and political and ideological persecution," the report
says.
According to the government, "without proper supervision, resulting
from receiverships which lasted for years, the proliferation of
these conducts amounted to a debt to the democratic and republican
system which we have just begun settling today," the report
relays.
They went on to explain that the new intelligence system will have
four agencies commanded by the SIDE, left in charge of Sergio
Neiffert, who a month ago was appointed comptroller of the AFI
after Silvestre Sivori's exit, who left together with former
Cabinet chief Nicolas Posse, the report discloses.
"Thus, the State Intelligence Secretariat is created, to be
dependent directly on the President, which will have operational
control of four agencies created in order to transform and
modernise the intelligence system, by promoting excellence and
professionalism in the development of its tasks", the President's
Office underlined, the report 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.
CAPEX SA: Fitch Hikes LongTerm IDR to 'B-', Outlook Stable
----------------------------------------------------------
Fitch Ratings has upgraded Capex S.A.'s Long-Term Foreign and Local
Currency Issuer Default Ratings (IDR) to 'B-' from 'CCC+'. The
Rating Outlook is Stable. Fitch has also upgraded Capex's
senior-unsecured notes to 'B'/'RR3' from 'B-'/'RR3'.
The upgrade reflects Capex's shift towards being a more
concentrated Oil & Gas company, expected to constitute a sustained
70% of its consolidated EBITDA by FY2025, and the company's strong
leverage profile that is projected to peak at 3.0x in FY25 to fund
capex, but decline to 2.0x by FY27, with robust EBITDA interest
coverage of at least 6.0x.
Fitch has assigned a criteria variation to the Country Specific
Treatment of Recovery Criteria to assign the Recovery Rating (RR)
of 'RR3', which implies a recovery of 51% to 70%. The RR reflects
Fitch's bespoke recovery analysis that estimates a higher implied
recovery than the 'RR3' assigned recovery, coupled with numerous
precedents where exchanges were launched by Argentine corporates in
compliance with capital control, and the recoveries were greater
than the implied recoveries of an 'RR3'. Refer to the criteria
variation section of the press release for more detail.
Key Rating Drivers
Shift in Business Profile: Capex's ratings reflect a sustained
shift in its business profile to be more concentrated in the Oil &
Gas segment, which will represent approximately 70% of its
consolidated EBITDA in FY25, compared to 58% in 2021. Fitch
forecasts a total output of roughly 17,500 barrels of oil
equivalent per day (boed) for fiscal years 2025-2027, with gas
production accounting for 52% of the total output, which puts the
company's operating profile consistent with the b category. Fitch
expects with this shift the company will increases its cash flow
from exports to represent 45% of EBITDA.
Operating Environment: Capex operates in an environment
characterized by regulatory risks in the electricity sector and
favorable dynamics in the oil and gas industry, which Fitch
foresees improving. The oil and gas sector will benefit from the
new regulations which are aimed to encourage further development in
the sector and will provide tax, customs, and currency exchange
incentives in turn, catalyzing investment in the country.
Conversely, the company's energy operations are subject to
significant regulatory oversight, with the government exerting
considerable influence over price and tariff regulations and
controlling subsidies for industry participants.
Moderate Medium-Term Leverage: Capex's fiscal 2025 gross leverage
is estimated to be close to 3.0x mainly due to increased debt for
capital expenditures. It is then expected to decline towards 2.0x
by fiscal 2027, which is consistent with a 'bb' in the Oil and Gas
Production Companies Navigator. Fitch expects average EBITDA
interest coverage to be strong at least 6.0x over the rating
horizon. Net leverage is expected to be below 3.0x over the rating
horizon.
Derivation Summary
As a vertically integrated energy and electricity company, Capex's
'B-' Long-Term Foreign and Local Currency IDR reflects its
diminishing exposure to CAMMESA as an off-taker for its electricity
and gas revenues. Capex is rated in line with Petroquimica Comodoro
Rivadavia (PCR; B-/Stable), which has a similar average boe/d
through the rating horizon of 18,000 compared to Capex's 17,500.
All of Capex's revenues are created in Argentina, while PCR's
EBITDA is more diversified with its Oil & Gas operations in
Argentina (60%) and Ecuador (40%). Additionally, PCR has a Cement
segment alongside its growing Renewable Segment. Capex has a strong
1P reserve life around 13 years compared with PCR and Pampa's
around four and 8.6-year reserve life, respectfully. Fitch expects
Capex's EBITDA to increase in the O&G segment while PCR's is
expected to increase in the Renewables segment.
Capex's gross leverage is expected to be close to 3.0x in fiscal
2025 due to increased debt from investment in their Oil & Gas
segment. There leverage is expected to decline towards 2.0x by
fiscal 2027. Capex's expected medium-term leverage is in line with
that of PCR at 3.0x in fiscal 2023 and close to 2.0x by fiscal
2025. Pampa's leverage is expected to drop from 2.1x in 2023 to
1.6x in 2025.
Key Assumptions
- Fitch's price deck for Brent oil prices adjusted for Capex's FYE
of April 30 at USD76/barrel (bbl) in 2025, USD68/bbl in 2026,
USD65/bbl in 2027;
- Natural gas production of approximately 9,000 boed over fiscal
years 2024-2027;
- Realized natural gas prices at USD2.4/million British thermal
units (MMBTU) during fiscal years 2024-2027;
- Oil production reaching approximately 8,000 boed over fiscal
years 2024-2027;
- Annual electricity production of approximately 4,500
gigawatt-hour (GWh);
- Electricity prices denominated in Argentine pesos around
USD12.00/megawatt-hour (MWh);
- Diadema Wind Farm average availability factor over fiscal years
2024-2027 at 96% and average load factor of 49% with an average
power purchase agreement price of USD103/MWh;
- Total capex of approximately USD415 million over fiscal years
2025-2027, mostly concentrated in the fields of Agua del Cajon;
- No dividends payments over fiscal years 2025-2027.
Recovery Analysis
Fitch classifies Argentina as a Group D country per The
Country-Specific Treatment of Recovery Criteria, which would
ordinarily result in Capex's recovery rating being capped at 'RR4'.
However, Fitch has applied a criteria variation to assign an 'RR3'
(51% to 70%). Please refer to the criteria variation section for
more details on the variation.
RATING SENSITIVITIES
Factors that Could, Individually or Collectively, Lead to Positive
Rating Action/Upgrade
- Net production rising on a sustainable basis to 35,000 boed;
- Increase in reserve size and diversification while maintaining a
minimum 1P reserve life of at close to 10 years.
Factors that Could, Individually or Collectively, Lead to Negative
Rating Action/Downgrade
- A downgrade by one notch of Argentina's Country Ceiling;
- Cash falling below USD15 million;
- Total debt/EBITDA of 4.0x or more.
Liquidity and Debt Structure
Adequate Liquidity: As of April 2024, Capex had available cash and
equivalents of USD17 million. 1.5 million cash in USD is held
abroad. Capex's maturities are spread-out with its largest
obligation is being a USD188 million bond due in 2028. The bond
payments started in February 2024 and has eight semi-annual
payments.
73% of its financial debts in U.S. dollars through the issuance of
Class II, V, and VIII Negotiable Obligations and 26.7% of
dollar-denominated negotiable obligations to be settled in
Argentine pesos at the prevailing exchange rate through the
issuance of Class II, IV, VI and VII Negotiable Obligations.
Issuer Profile
Capex is an integrated Argentine company dedicated to the
exploration and exploitation of hydrocarbons and the generation of
electric, thermal and renewable energy.
Criteria Variation
A criteria variation was applied to assigning an 'RR3' rating to
the debt instrument. The criteria variation applies to the section
titled "When an Instrument Enters a Distressed or Defaulted State"
of the Country-Specific Treatment of Recovery Ratings Criteria,
where the criteria allow for the assigned RR to be above the
defined cap for distressed issuers when Fitch has reason to believe
that recoveries in an individual case would be consistent with a
higher recovery rating.
Fitch has applied a variation to extend this analytical approach to
Capex's IDRs rated at 'B-', reflecting the highly speculative
credit profile and its operations within a distressed operating
environment (Argentina, Foreign Currency IDR Country Ceiling).
Argentina is assigned to Group D, where the assigned recovery
ratings are capped at 'RR4'. Fitch believes the recovery prospects
for Capex are higher than the expected recovery of 31%-50% for the
'RR4' band. This is based on Fitch's bespoke recovery analysis for
Capex as well as precedents of debt exchange offerings driven by
capital control restrictions put into place by the Argentine
Central Bank.
In all cases, the calculated recovery was higher than the expected
recovery of 51%-70% for the 'RR3' band, but recovery ratings were
capped at 'RR3' to reflect a less predictable range of outcomes. A
recovery rating of 'RR3' supports a one-notch uplift for the
instrument rating from the issuer's Foreign-currency IDR.
ESG Considerations
Capex S.A. has an ESG Relevance Score of '4' for GHG Emissions &
Air Quality due to the growing importance of the continued
development and execution of the company's energy-transition
strategy. 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
----------- ------ -------- -----
Capex S.A. LT IDR B- Upgrade CCC+
LC LT IDR B- Upgrade CCC+
senior unsecured LT B Upgrade RR3 B-
=============
B A H A M A S
=============
FTX GROUP: Bankruptcy Claims Boost Hedge Fund Diameter's Gains
--------------------------------------------------------------
Laura Benitez and Nishant Kumar of Bloomberg News report that a
large bet and a quirk in the bankruptcy proceedings following the
chaotic collapse of Sam Bankman-Fried's FTX crypto exchange is
resulting in bumper profits for hedge fund Diameter Capital
Partners.
The firm initially wagered that claims on assets of the exchange,
which is under Chapter 11 bankruptcy protection following a
fraud-fueled implosion, would fetch more than 20 cents on the
dollar. Instead, they have surged to more than 100 cents.
About FTX Group
FTX is the world's second-largest cryptocurrency firm. FTX is a
cryptocurrency exchange built by traders, for traders. FTX offers
innovative products including industry-first derivatives, options,
volatility products and leveraged tokens.
Then CEO and co-founder Sam Bankman-Fried said Nov. 10, 2022, that
FTX paused customer withdrawals after it was hit with roughly $5
billion worth of withdrawal requests.
Faced with liquidity issues, FTX on Nov. 9 struck a deal to sell
itself to its giant rival Binance, but Binance walked away from the
deal amid reports on FTX regarding mishandled customer funds and
alleged US agency investigations.
At 4:30 a.m. on Nov. 11, Bankman-Fried ultimately agreed to step
aside, and restructuring vet John J. Ray III was quickly named new
CEO.
FTX Trading Ltd (d/b/a FTX.com), West Realm Shires Services Inc.
(d/b/a FTX US), Alameda Research Ltd. and certain affiliated
companies then commenced Chapter 11 proceedings (Bankr. D. Del.
Lead Case No. 22-11068) on an emergency basis on Nov. 11, 2022.
Additional entities sought Chapter 11 protection on Nov. 14, 2022.
FTX Trading and its affiliates each listed $10 billion to $50
million in assets and liabilities, making FTX the biggest
bankruptcy filer in the US this year.
According to Reuters, SBF shared a document with investors on Nov.
10, 2022, showing FTX had $13.86 billion in liabilities and $14.6
billion in assets. However, only $900 million of those assets were
liquid, leading to the cash crunch that ended with the company
filing for bankruptcy.
The Hon. John T. Dorsey is the case judge.
The Debtors tapped Sullivan & Cromwell, LLP as bankruptcy counsel;
Landis Rath & Cobb, LLP as local counsel; and Alvarez & Marsal
North America, LLC as financial advisor. Kroll is the claims
agent,
maintaining the page https://cases.ra.kroll.com/FTX/Home-Index
The Official Committee of Unsecured Creditors tapped Paul Hastings
as counsel, FTI Consulting, Inc., as financial advisor, and
Jefferies LLC as the investment banker. Young Conaway Stargatt &
Taylor LLP is the Committee's Delaware and conflicts counsel.
Montgomery McCracken Walker & Rhoads LLP, led by partners Gregory
T. Donilon, Edward L. Schnitzer, and David M. Banker, is
representing Sam Bankman-Fried in the Chapter 11 cases.
White-collar crime specialist Mark S. Cohen has reportedly been
hired to represent SBF in litigation. Lawyers at Paul Weiss
previously represented SBF but later renounced representing the
entrepreneur due to a conflict of interest.
FTX GROUP: Exec Gets Prison Report Date Delayed After Dog Attack
----------------------------------------------------------------
Gina Kim at law360.com reports that a New York federal judge
allowed ex-FTX executive Ryan Salame to delay his surrender date to
begin his prison term from August to October, as he was forced to
undergo medical treatment and surgery after being mauled by a
German shepherd while visiting a friend's house last month.
About FTX Group
FTX is the world's second-largest cryptocurrency firm. FTX is a
cryptocurrency exchange built by traders, for traders. FTX offers
innovative products including industry-first derivatives, options,
volatility products and leveraged tokens.
Then CEO and co-founder Sam Bankman-Fried said Nov. 10, 2022, that
FTX paused customer withdrawals after it was hit with roughly $5
billion worth of withdrawal requests.
Faced with liquidity issues, FTX on Nov. 9 struck a deal to sell
itself to its giant rival Binance, but Binance walked away from
the deal amid reports on FTX regarding mishandled customer funds
and alleged US agency investigations.
At 4:30 a.m. on Nov. 11, Bankman-Fried ultimately agreed to step
aside, and restructuring vet John J. Ray III was quickly named new
CEO.
FTX Trading Ltd (d/b/a FTX.com), West Realm Shires Services Inc.
(d/b/a FTX US), Alameda Research Ltd. and certain affiliated
companies then commenced Chapter 11 proceedings (Bankr. D. Del.
Lead Case No. 22-11068) on an emergency basis on Nov. 11, 2022.
Additional entities sought Chapter 11 protection on Nov. 14, 2022.
FTX Trading and its affiliates each listed $10 billion to $50
million in assets and liabilities, making FTX the biggest
bankruptcy filer in the US this year.
According to Reuters, SBF shared a document with investors on Nov.
10, 2022, showing FTX had $13.86 billion in liabilities and $14.6
billion in assets. However, only $900 million of those assets were
liquid, leading to the cash crunch that ended with the company
filing for bankruptcy.
The Hon. John T. Dorsey is the case judge.
The Debtors tapped Sullivan & Cromwell, LLP as bankruptcy counsel;
Landis Rath & Cobb, LLP as local counsel; and Alvarez & Marsal
North America, LLC as financial advisor. Kroll is the claims
agent,
maintaining the page https://cases.ra.kroll.com/FTX/Home-Index
The Official Committee of Unsecured Creditors tapped Paul Hastings
as counsel, FTI Consulting, Inc., as financial advisor, and
Jefferies LLC as the investment banker. Young Conaway Stargatt &
Taylor LLP is the Committee's Delaware and conflicts counsel.
Montgomery McCracken Walker & Rhoads LLP, led by partners Gregory
T. Donilon, Edward L. Schnitzer, and David M. Banker, is
representing Sam Bankman-Fried in the Chapter 11 cases.
White-collar crime specialist Mark S. Cohen has reportedly been
hired to represent SBF in litigation. Lawyers at Paul Weiss
previously represented SBF but later renounced representing the
entrepreneur due to a conflict of interest.
===========
B R A Z I L
===========
MV24 CAPITAL: Fitch Affirms 'BB+' Rating on Senior Secured Notes
----------------------------------------------------------------
Fitch Ratings has affirmed the rating on the senior secured notes
issued by MV24 Capital B.V. at 'BB+'. The Rating Outlook remains
Stable and reflects the Outlook on the sovereign.
Entity/Debt Rating Prior
----------- ------ -----
MV24 Capital B.V.
Senior Secured
Notes 55388RAA4 LT BB+ Affirmed BB+
The affirmation is based on Fitch's view that the partners have a
high incentive to meet their obligations under the concession
agreement. The operating environment in Brazil continues to limit
the uplift from Brazil's IDR (BB/Stable). According to Fitch's
Structured Finance Country Risk Criteria, this limit for Brazil can
be up to three notches above the sovereign LC IDR; however, Fitch
has tempered this to two notches due to Petrobras' status as a
state-owned enterprise and its potentially higher exposure to
political interference. This is further limited to one notch due to
transaction performance metrics and debt service coverage ratios
(DSCRs), which are lower than expected since closing and currently
support 'BB' category ratings.
Transaction Summary
The senior secured notes issued by MV24 Capital B.V. are backed by
the flows related to the charter agreement initially signed with
Tupi B.V. for the use of the FPSO Cidade de Mangaratiba MV24 for a
term of 20 years. The BM-S-11 consortium is comprised of Petrobras,
with a 65% share, and Shell Brasil (wholly owned subsidiary of
Royal Dutch Shell plc) with a 25% share, and Petrogral Brazil S.A.
(a joint venture [JV] between Galp Energia and Sinopec) with a 10%
share.
The vessel is operated by Modec do Brasil Ltda., the Brazilian
subsidiary of Modec, Inc., through a services agreement. Modec is
one of four Japanese sponsors of the project, together with Mitsui
& Co., Mitsui OSK Lines and Marubeni.
The MV24 FPSO began operating at the Lula/Tupi oil field in October
of 2014. Fitch's rating addresses the timely payment of interest
and principal on a semiannual basis until the legal final maturity
in June 2034.
KEY RATING DRIVERS
CONSORTIUM OBLIGATION STRENGTH EXCEEDS PETROBRAS'
The offtaking consortium is backed by Petrobras (65% share), the
Shell subsidiary Shell Brasil Petróleo Ltda (25%) and the
Galp/Sinopec joint venture (10%). The offtakers' obligations
related to the 20-year charter and joint operating agreements are
several, but not joint, as each party guarantees that it will make
its portion of the payment. However, Fitch views these payments as
joint and several as the underlying concession states that each
party must support all the obligations related to ongoing
production. Fitch expects the payments to continue given the high
economic incentives to maintain the concession. Therefore, the
rating of the lowest-rated member, Petrobras (BB/Stable), does not
strictly limit the notes' rating
OPERATOR CREDIT QUALITY
Modec Brasil's credit quality is in line with investment-grade
metrics, and this is relevant due to the underlying support offered
by Modec to the transaction. In addition to the complexities
involved with replacement of the operator, the services agreement
and overall operating costs are supported by Modec. The average
availability since commencing commercial operations stands at
approximately 95%, which is marginally below industry standards.
Availability has decreased over the past two years due to
unscheduled shutdowns associated with VRU (Vapor Recovery Unit)
repairs. However, as of July 17, 2024, all repairs have been
completed, and the FPSO unit is anticipated to resume normal
operations. Finally, operational expenses have remained relatively
stable and will be capped for the life of the transaction. Opex in
excess of the cap is guaranteed by MV24 and certain expenditures
ultimately guaranteed by Modec through the O&M support agreement.
'BB' CATEGORY FINANCIAL METRICS
The key leverage metric for fully amortizing FPSO transactions is
the debt service coverage ratio (DSCR). The transaction is
currently constrained by leverage at the 'BB' rating level. Fitch
expects base case DSCRs to be in the range of 1.18x-1.22x
considering a 10 maintenance day annual average assumption, which
would constrain the rating to the 'BB' category.
The charter rates are fixed with escalators for inflation, and
operating expenses are capped with any overage guaranteed by Modec;
therefore, DSCR levels indicate sufficient buffer to mitigate any
downtime risks associated with operations. Fitch has observed low
average DSCR levels over the 12-month and six-month periods,
attributed to multiple unscheduled FPSO maintenances over the last
12 months. However, with the completion of repairs, the average
DSCR remains sufficient to support a BB category rating.
RATING SENSITIVITIES
Factors that Could, Individually or Collectively, Lead to Negative
Rating Action/Downgrade
As described in the Key Rating Drivers, the rating of the
transaction is linked to Brazil's IDR and transaction performance,
with an uplift of one notch over Brazil's IDR. Therefore, a
multi-notch sovereign downgrade or further DSCR deterioration may
trigger a downgrade of the notes. Both ratings have a Stable
Outlook.
For offtakers, Fitch could assign a rating in excess of Petrobras'
by two notches, and this remains possible as long as the other
offtakers remain rated above the notes. Given the current ratings
of the other offtakers and the transaction currently being limited
due to transaction performance and DSCR levels, Fitch deems this
risk particularly remote.
The other counterparty that could constrain the rating is the
operator, MODEC, which Fitch considers to be of better credit
quality than the senior notes.
Finally, the cash flow analysis results in an output consistent
with ratings in the 'BB' category. DSCRs and ultimate debt
repayment depend on uptime, maintenance days, opex and CPI; poor
performance amongst these variables could drive ratings down under
the stresses Fitch applies.
Factors that Could, Individually or Collectively, Lead to Positive
Rating Action/Upgrade
The rating is constrained by leverage, DSCRs, operating environment
and counterparty ratings. Sustained improved transaction
performance may result in an upgrade after taking into account any
changes in the operating environment and counterparty ratings.
USE OF THIRD PARTY DUE DILIGENCE PURSUANT TO SEC RULE 17G -10
Form ABS Due Diligence-15E was not provided to, or reviewed by,
Fitch in relation to this rating action.
ESG Considerations
The highest level of ESG credit relevance is a score of '3', unless
otherwise disclosed in this section. A score of '3' means ESG
issues are credit-neutral or have only a minimal credit impact on
the entity, either due to their nature or the way in which they are
being managed by the entity. Fitch's ESG Relevance Scores are not
inputs in the rating process; they are an observation on the
relevance and materiality of ESG factors in the rating decision.
[*] BRAZIL: Industrial Production Hits Four-Year High in June 2024
------------------------------------------------------------------
Richard Mann at Rio Times Online reports that the Brazilian
industrial sector grew by 4.1% in June 2024 compared to May,
according to the the stats agency (IBGE).
This increase exceeded the median market expectation of 2.3%, with
forecasts ranging from 1.1% to 4.9%, according to Rio Times Online.
This growth represents the highest monthly increase in four years,
the report relays.
Compared to June 2023, industrial production rose by 3.2%, the
report relays. This figure also surpassed the market's median
expectation of 1.6%, with projections ranging from a 1.3% decline
to a 4% increase, the report says.
The industrial sector has accumulated a growth of 1.5% over the
past 12 months and a 2.6% increase in 2024 thus far, the report
notes.
Despite these gains, the sector remains 14.3% below its peak in May
2011 and 2.8% above the pre-pandemic level of February 2020, the
report relays.
All four major categories of the industrial sector showed growth in
June:
* Capital Goods: Increased by 0.5% from May and 9% from June
2023.
* Intermediate Goods: Grew by 2.6% from May and 1.1% from June
2023.
* Durable Goods: Rose by 4.4% from May and 12% from June 2023.
* Semi-Durable and Non-Durable Goods: Increased by 4.1% from May
and 5.8% from June 2023.
* Broader Perspective and Regional Comparison
* Brazil's industrial production growth contrasts with the
performance of other major South American economies.
Here is a comparative analysis:
Brazil
Industrial Production Growth (June 2024): 4.1%
Year-over-Year Growth (2023-2024): 3.2%
Argentina
Industrial Production Growth (June 2024): 0.8%
Year-over-Year Growth (2023-2024): 1.5%
Chile
Industrial Production Growth (June 2024): 1.2%
Year-over-Year Growth (2023-2024): 2.0%
Colombia
Industrial Production Growth (June 2024): 1.5%
Year-over-Year Growth (2023-2024): 2.5%
Peru
Industrial Production Growth (June 2024): 1.0%
Year-over-Year Growth (2023-2024): 1.8%
Venezuela
Industrial Production Growth (June 2024): -2.0%
Year-over-Year Growth (2023-2024): -5.0%
|
Ecuador
Industrial Production Growth (June 2024): 1.3%
Year-over-Year Growth (2023-2024): 2.2%
Uruguay
Industrial Production Growth (June 2024): 1.1%
Year-over-Year Growth (2023-2024): 1.7%
Paraguay
Industrial Production Growth (June 2024): 1.4%
Year-over-Year Growth (2023-2024): 2.3%
Analysis of Brazil's Industrial Sector
Brazil's industrial sector has been volatile, influenced by
domestic economic policies, global market conditions, and internal
challenges such as infrastructure and regulatory issues, the report
disclsoes.
The report notes that The recent growth can be attributed to
several factors:
Government Initiative: The Brazilian government has introduced
various measures to boost industrial production, including fiscal
reforms and infrastructure investments.
Global Demand: Increased global demand for Brazilian exports,
particularly in commodities, has also contributed to the industrial
sector's performance.
Future Outlook
Looking ahead, Brazil's industrial production is expected to
continue its recovery, albeit at a potentially slower pace, the
report discloses.
The long-term forecast suggests a trend of around 2% growth by
2025, the report notes. However, challenges such as political
uncertainty, economic reforms, and global market dynamics will play
crucial roles in shaping the sector's future trajectory, the report
says.
Conclusion
The 4.1% growth in Brazil's industrial production in June 2024
highlights a robust recovery, surpassing expectations and marking
the highest monthly increase in four years, the report relays.
This growth positions Brazil favorably compared to other regional
economies, though sustaining this momentum will require addressing
ongoing economic and structural challenges, the report notes.
The government's continued focus on fiscal reforms and
infrastructure development will be critical in supporting the
industrial sector's long-term 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.
As reported in the TCR-LA on May 6, 2024, Moody's Ratings affirmed
the Government of Brazil's long-term issuer and senior
unsecured bond ratings at Ba2, senior unsecured shelf rating at
(P)Ba2 and changed the outlook to positive from stable. Moody's
assesses thatBrazil's real GDP growth prospects are more robust
than in the pre-pandemic years, supported by the implementation of
structural reforms over multiple administrations, as well as the
presence of institutional guardrails that reduce uncertainty
around future policy direction. The outlook change to positive is
underpinned by Moody's assessment that more robust growth combined
with continued, albeit gradual, progress towards fiscal
consolidation, may allow Brazil's debt burden to stabilize.
However, there are risks to the government's execution of
continued fiscal consolidation.
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-TermForeign-Currency Issuer Default Rating (IDR) at 'BB' with
a StableOutlook. 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.
DBRS Inc., on August 15, 2023, upgraded Brazil's Long-TermForeign
and Local Currency - Issuer Ratings to BB from BB (low).At the same
time, DBRS Morningstar confirmed Brazil'sShort-term Foreign and
Local Currency - Issuer Ratings at R-4.The trend on all ratings is
Stable (March 2018).
=========
C H I L E
=========
CHILE: Holds Rate at 5.75% in Pause to Yearlong Easing Cycle
------------------------------------------------------------
Bloomberg News reports that Chile's central bank kept its key
interest rate unchanged, surprising most economists by pausing its
yearlong easing cycle as inflation pressures increase, while
indicating that the halt was likely to be temporary.
Policymakers voted unanimously to hold borrowing costs at 5.75% as
expected by just four of 20 analysts in a Bloomberg survey,
according to the report. The other 16 forecast a quarter-point cut.
Central bankers led by Rosanna Costa interrupted an easing cycle
that has shaved 550 basis points from rates in just over a year,
the report relays. While a rebound in economic growth at the start
of 2024 has started to fade, rising energy prices are set to push
inflation further above target. The bank doesn't see cost-of-living
rises back at the 3% goal until 2026, it notes.
Bloomberg News says the decision to hold borrowing costs was in
line with the bank's strategy to "continue reducing the key rate
during the horizon of monetary policy at a rhythm that takes into
account macro-economic trends and their implication for inflation,"
policymakers said in a statement accompanying the decision.
This decision came hours after the Federal Reserve voted to leave
borrowing costs at the highest level in more than two decades and
Chair Jerome Powell said an interest-rate cut could come as soon as
September, adds the report.
===============
X X X X X X X X
===============
[*] BOND PRICING: For the Week July 29 to Aug. 2, 2024
------------------------------------------------------
Alfa Desarrollo SpA 4.6 74.5 9/27/2051 CL USD
Alfa Desarrollo SpA 4.6 74.7 9/27/2051 CL USD
Alibaba Group Holding 3.2 65.4 2/9/2051 KY USD
Alibaba Group Holding 2.7 68.6 2/9/2041 KY USD
Alibaba Group Holding 3.3 62.9 2/9/2061 KY USD
AMTD IDEA Group 1.5 7.5 KY USD
AMTD IDEA Group 4.5 55.3 KY SGD
Amwaj 6.4 71.6 KY USD
Amwaj 4.5 50.9 KY USD
Argentina Bonar Bonds 1.0 43.7 7/9/2029 AR USD
Argentina Treasury Dual 3.3 45.8 4/30/2024 AR USD
Argentine Bonos del Tesoro 15.5 40.3 10/17/2026 AR ARS
Argentine Gov't Int'l Bond 1.0 47.5 7/9/2029 AR USD
Argentine Gov't Int'l Bond 0.5 41.9 7/9/2029 AR EUR
Argentine Gov't Int'l Bond 0.1 42.5 7/9/2030 AR EUR
Ascent Finance 1.2 61.0 7/12/2047 KY EUR
Ascent Finance 3.4 66.6 2/6/2043 KY AUD
Ascent Finance 3.8 67.9 6/28/2047 KY AUD
Astra Cumulative 2019 1.5 62.1 11/1/2029 KY USD
At Home Cayman 11.5 69.3 5/12/2028 KY USD
At Home Cayman 11.5 70.6 5/12/2028 KY USD
AYC Finance 3.9 63.2 KY USD
Banco Davivienda SA 6.7 65.8 CO USD
Banco Davivienda SA 6.7 70.3 CO USD
Banco de Chile 2.7 75.1 3/9/2035 CL AUD
Banco del Estado de Chile 3.1 71.2 2/21/2040 CL AUD
Banco del Estado de Chile 2.8 67.7 3/13/2040 CL AUD
Banco Nacional de Panama 2.5 75.4 8/11/2030 PA USD
Banco Nacional de Panama 2.5 75.2 8/11/2030 PA USD
Banco Santander Chile 3.1 71.2 2/28/2039 CL AUD
Banco Santander Chile 1.3 73.9 11/29/2034 CL EUR
Banda de Couro Energetica 8.0 55.1 1/15/2027 BR BRL
Baraunas II Energetica S/A 8.0 12.5 1/15/2027 BR BRL
Bishopsgate Asset Finance 4.8 66.9 8/14/2044 KY GBP
Bolivian Gov'tInt'l Bond 4.5 58.3 3/20/2028 BO USD
Bolivian Gov'tInt'l Bond 7.5 59.4 3/2/2030 BO USD
Bolivian Gov'tInt'l Bond 4.5 58.5 3/20/2028 BO USD
Bolivian Gov'tInt'l Bond 7.5 59.5 3/2/2030 BO USD
Bonos Para La Reconstruccion 5.0 63.6 10/31/2027 AR USD
Bonos Para La Reconstruccion 3.0 60.5 5/31/2026 AR USD
Bonos Para La Reconstruccion 5.0 51.9 10/31/2027 AR USD
Brazilian Gov't Int'l Bond 4.8 74.1 1/14/2050 BR USD
BRF SA 5.8 78.1 9/21/2050 BR USD
BRF SA 5.8 78.1 9/21/2050 BR USD
Caja de Compensacion 2.4 49.6 4/5/2025 CL CLP
Camposol SA 6.0 72.3 2/3/2027 PE USD
Camposol SA 6.0 72.6 2/3/2027 PE USD
CFLD Cayman Investment 2.5 3.4 1/31/2031 KY USD
CFLD Cayman Investment 2.5 3.4 1/31/2031 KY USD
CFLD Cayman Investment 2.5 2.9 1/31/2031 KY USD
CFLD Cayman Investment 2.5 3.8 1/31/2031 KY USD
CFLD Cayman Investment 2.5 2.2 1/31/2031 KY USD
CFLD Cayman Investment 2.5 3.5 1/31/2031 KY USD
CFLD Cayman Investment 2.5 2.9 1/31/2031 KY USD
CFLD Cayman Investment 2.5 3.5 1/31/2031 KY USD
CFLD Cayman Investment 2.5 2.2 1/31/2031 KY USD
Chile Gov'tInt'l Bond 3.5 72.7 1/25/2050 CL USD
Chile Gov'tInt'l Bond 3.1 73.6 5/7/2041 CL USD
Chile Gov'tInt'l Bond 3.1 62.8 1/22/2061 CL USD
Chile Gov'tInt'l Bond 3.5 72.3 4/15/2053 CL USD
Chile Gov'tInt'l Bond 1.3 67.4 1/29/2040 CL EUR
Chile Gov'tInt'l Bond 1.3 54.0 1/22/2051 CL EUR
Chile Gov'tInt'l Bond 3.3 62.9 9/21/2071 CL USD
Chile Gov'tInt'l Bond 1.3 74.4 7/26/2036 CL EUR
China Yuhua Education Corp 0.9 65.1 12/27/2024 KY HKD
CK HutchisonInt'l 19 II 3.4 74.4 9/6/2049 KY USD
CK HutchisonInt'l 19 II 3.4 74.4 9/6/2049 KY USD
CK HutchisonInt'l 20 3.4 74.1 5/8/2050 KY USD
CK HutchisonInt'l 20 3.4 74.1 5/8/2050 KY USD
Colombia Gov't Int'l Bond 4.1 61.2 5/15/2051 CO USD
Colombia Gov't Int'l Bond 3.9 57.2 2/15/2061 CO USD
Colombia Gov't Int'l Bond 5.2 72.4 5/15/2049 CO USD
Colombia Gov't Int'l Bond 4.1 66.7 2/22/2042 CO USD
Colombia Gov't Int'l Bond 7.3 71.1 10/26/2050 CO COP
Colombia Gov't Int'l Bond 6.3 73.3 7/9/2036 CO COP
Colombia Gov't Int'l Bond 7.3 71.1 10/26/2050 CO COP
Colombia Gov't Int'l Bond 5.0 71.6 6/15/2045 CO USD
Colombia Gov't Int'l Bond 6.3 73.3 7/9/2036 CO COP
Colombia Telecomunicaciones 5.0 67.5 7/17/2030 CO USD
Colombia Telecomunicaciones 5.0 67.5 7/17/2030 CO USD
Colombian TES 7.3 70.9 10/26/2050 CO COP
Colombian TES 6.3 73.1 7/9/2036 CO COP
Coopeucha 4.6 38.3 6/1/2029 CL CLP
CODELCO 3.7 67.4 1/30/2050 CL USD
CODELCO 3.2 61.0 1/15/2051 CL USD
CODELCO 3.7 67.3 1/30/2050 CL USD
CODELCO 3.2 61.0 1/15/2051 CL USD
CODELCO 3.6 74.7 7/22/2039 CL AUD
Earls Eight 0.1 64.5 12/20/2031 KY AUD
Earls Eight 1.7 72.4 6/20/2032 KY AUD
Ecopetrol SA 5.9 73.6 5/28/2045 CO USD
Ecopetrol SA 5.9 70.5 11/2/2051 CO USD
El Salvador Gov'tInt'l Bond 7.1 68.3 1/20/2050 SV USD
El Salvador Gov'tInt'l Bond 7.6 72.0 9/21/2034 SV USD
El Salvador Gov'tInt'l Bond 7.6 72.8 2/1/2041 SV USD
El Salvador Gov'tInt'l Bond 5.9 65.1 1/30/2025 SV USD
El Salvador Gov'tInt'l Bond 7.6 72.6 9/21/2034 SV USD
El Salvador Gov'tInt'l Bond 7.1 68.4 1/20/2050 SV USD
El Salvador Gov'tInt'l Bond 7.6 72.9 2/1/2041 SV USD
Embotelladora Andina SA 6.5 23.2 6/1/2026 CL CLP
EFE 3.8 65.7 9/14/2061 CL USD
EFE 3.1 59.8 8/18/2050 CL USD
EFE 3.1 59.8 8/18/2050 CL USD
EFE 3.8 65.8 9/14/2061 CL USD
EFE 6.5 11.1 1/1/2026 CL CLP
ETESA 5.1 71.5 5/2/2049 PA USD
ETESA 5.1 72.2 5/2/2049 PA USD
Metro SA 3.7 65.1 9/13/2061 CL USD
Metro SA 3.7 65.0 9/13/2061 CL USD
Metro SA 5.5 50.1 7/15/2027 CL CLP
Metro SA 5.0 63.8 5/11/2025 AR USD
ENAP 4.5 73.2 9/14/2047 CL USD
ENAP 4.5 73.2 9/14/2047 CL USD
ENA Master Trust 4.0 70.5 5/19/2048 PA USD
ENA Master Trust 4.0 70.9 5/19/2048 PA USD
Enel Generacion Chile SA 6.2 29.2 10/15/2028 CL CLP
Equatorial Energia 10.9 1.1 10/15/2029 BR BRL
Equatorial Energia 10.8 1.0 5/15/2028 BR BRL
Esval SA 3.5 13.1 2/15/2026 CL CLP
Farfetch 3.8 4.3 5/1/2027 KY USD
Fospar S/A 6.5 1.4 5/15/2026 BR BRL
GDM Argentina SA 2.5 0.0 9/8/2024 AR USD
GDS Holdings 4.5 67.7 1/31/2030 KY USD
Generacion Mediterranea SA 4.6 0.0 11/12/2024 AR ARS
General Shopping Finance 10.0 66.2 KY USD
General Shopping Finance 10.0 65.0 KY USD
Genneia SA 2.0 56.9 7/14/2028 AR USD
Greenland Hong Kong 10.2 13.4 KY USD
Guacolda Energia SA 4.6 70.5 4/30/2025 CL USD
Guacolda Energia SA 10.0 70.1 12/30/2030 CL USD
Guacolda Energia SA 4.6 71.8 4/30/2025 CL USD
Guacolda Energia SA 10.0 70.1 12/30/2030 CL USD
Hector A Bertone SA 1.9 0.0 4/7/2024 AR USD
Hilong Holding 9.8 68.7 11/18/2024 KY USD
Hilong Holding 9.8 69.7 11/18/2024 KY USD
Hilong Holding 9.8 69.4 11/18/2024 KY USD
Multiplo SA 3.3 59.5 BR USD
Itau Unibanco SA/Nassau 5.8 20.2 5/20/2027 BR BRL
Jamaica Gov't Bond 6.3 67.8 7/11/2048 JM JMD
Jamaica Gov't Bond 8.5 73.0 12/21/2061 JM JMD
Lani Finance 1.7 63.5 3/14/2049 KY EUR
Lani Finance 1.9 66.9 10/19/2048 KY EUR
Lani Finance 3.1 66.1 10/19/2048 KY AUD
Lani Finance 1.9 65.8 9/20/2048 KY EUR
Link Finance Cayman 2009 2.2 70.0 10/27/2038 KY HKD
LIPSA Srl 1.0 0.0 8/23/2024 AR USD
Logan Group Co 7.0 5.1 KY USD
Longfor Group Holdings 4.0 43.3 9/16/2029 KY USD
Longfor Group Holdings 3.4 56.1 4/13/2027 KY USD
Longfor Group Holdings 3.9 38.4 1/13/2032 KY USD
Longfor Group Holdings 4.5 53.1 1/16/2028 KY USD
Luminis III 2.3 41.8 9/22/2048 KY USD
Luminis III 2.4 55.3 9/22/2048 KY AUD
Luminis IV 3.2 70.4 1/22/2042 KY AUD
Luminis 2.3 54.8 9/22/2048 KY AUD
Lunar Funding I 1.7 8/11/2056 KY GBP
MTR Corp CI 2.8 73.3 9/6/2047 KY HKD
MTR Corp CI 3.0 73.1 3/11/2051 KY HKD
MTR Corp CI 3.0 75.4 4/26/2047 KY HKD
MTR Corp CI 3.2 73.7 2/5/2055 KY HKD
MTR Corp CI 3.0 73.1 3/11/2051 KY HKD
NIO Inc 4.6 73.1 10/15/2030 KY USD
Panama Gov'tInt'l Bond 4.5 63.1 4/1/2056 PA USD
Panama Gov'tInt'l Bond 2.3 70.2 9/29/2032 PA USD
Panama Gov'tInt'l Bond 3.9 55.8 7/23/2060 PA USD
Panama Gov'tInt'l Bond 4.5 64.9 4/16/2050 PA USD
Panama Gov'tInt'l Bond 4.5 62.0 1/19/2063 PA USD
Panama Gov'tInt'l Bond 4.5 66.6 5/15/2047 PA USD
Panama Gov'tInt'l Bond 4.3 62.6 4/29/2053 PA USD
Peruvian Gov'tInt'l Bond 3.6 71.8 3/10/2051 PE USD
Peruvian Gov'tInt'l Bond 2.8 57.3 12/1/2060 PE USD
Peruvian Gov'tInt'l Bond 3.2 57.3 7/28/2121 PE USD
Peruvian Gov'tInt'l Bond 3.6 65.7 1/15/2072 PE USD
Peruvian Gov'tInt'l Bond 3.3 74.3 3/11/2041 PE USD
Petroleos del Peru SA 5.6 68.3 6/19/2047 PE USD
Petroleos del Peru SA 5.6 68.3 6/19/2047 PE USD
Powerlong Real Estate 6.3 10.3 8/10/2024 KY USD
Provincia de Cordoba 7.1 39.6 10/27/2026 AR USD
Provincia de la Rioja 7.5 45.9 7/20/2032 AR USD
Provincia de la Rioja 4.5 51.8 1/20/2027 AR USD
Chaco Argentina 4.0 0.0 12/4/2026 AR USD
QNB Finance 13.5 63.1 10/6/2025 KY TRY
QNB Finance 11.5 71.7 1/30/2025 KY TRY
QNB Finance 2.9 74.2 9/16/2035 KY AUD
QNB Finance 2.9 72.9 12/4/2035 KY AUD
QNB Finance 3.0 75.4 2/14/2035 KY AUD
QNB Finance 3.4 72.0 10/21/2039 KY AUD
Radiance Holdings Group 7.8 49.6 3/20/2024 KY USD
Rio Alto Energias Renovaveis 7.0 29.1 7/15/2027 BR BRL
Santander Consumer Chile SA 2.9 72.7 11/27/2034 CL AUD
Seazen Group 6.0 75.2 8/12/2024 KY USD
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[*] IMF Issues Conclusions of XVIII Regional Conference on CAPDR
----------------------------------------------------------------
Central bank governors, finance ministers, and bank superintendents
of Central America, Panama, and the Dominican Republic (CAPDR), and
IMF officials met in San Jose, Costa Rica, on July 29-30 to review
the regional economic outlook and discuss policy measures needed to
tackle key structural issues facing the region. The First
Vice-President of the Republic of Costa Rica, Stephan Brunner, and
the IMF's Deputy Managing Director, Kenji Okamura, inaugurated the
conference.
At the conclusion of the conference, the following statement was
issued by the Director of the IMF's Western Hemisphere Department,
Rodrigo Valdes; and the President of the Central Bank of Costa
Rica, and President of the Central American Monetary Council, Roger
Madrigal Lopez.
"Participants concurred that the global economy remains resilient,
with growth holding steady—projected at 3.2 and 3.3 percent in
2024 and 2025 respectively, but with important divergence across
countries and regions—and with inflation gradually returning to
target, albeit with slowing momentum. In this context, participants
acknowledged that upside risks to inflation have raised the
prospects of higher-for-even-longer interest rates, which in turn
could increase external, fiscal, and financial risks in the region.
Participants also expressed concerns that medium-term growth
prospects in Latin America appear lackluster, especially compared
to other major emerging market economies, reflecting continued weak
growth of productivity in the region.
"Participants highlighted the strong recent performance of CAPDR,
which have outperformed the rest of Latin America and other
emerging markets with stronger growth -- average real GDP levels in
2024 for CAPDR are projected to be 17 percent higher than
pre-pandemic, compared to 9 percent in Latin America and the
Caribbean as a whole—and faster convergence to inflation targets.
Participants credited these positive outcomes to sound policies
aimed at stabilizing public debt and bringing inflation under
control, while strengthening social support. Regional growth is
projected to remain robust at 3.9 percent in 2024 -- about double
that of the Latin American and Caribbean region—and inflation to
continue its downward path. That said, participants noted the
challenges posed by tighter global financial conditions on regional
debt dynamics and servicing, with adverse implications for
infrastructure and social investment. They emphasized the need for
policies to boost productivity, including by accelerating public
investment, benefitting from new patterns in the global trade
system, and addressing structural reform gaps.
"Turning to the thematic sessions, participants assessed income
convergence in CAPDR and the factors behind the stark differences
in growth across the region. Participants noted that per capita
income levels in Costa Rica, the Dominican Republic, and Panama
have converged at rates similar to those in East Asia and Eastern
Europe, while El Salvador, Guatemala, Honduras, and Nicaragua have
seen limited convergence despite solid growth. Participants
concurred that these differences can be associated with a
combination of complex factors, including the nature of BOP
inflows, particularly foreign direct investment versus remittances,
factor endowments, domestic markets size, and political stability.
As showcased by the experience of Costa Rica, participants
underscored the need for policies that attract more foreign direct
investment, including reforms to boost productivity and labor force
participation, to proactively expand overseas markets and diversify
exports, and to strengthen governance and the business climate.
They also agreed on the need for more productive use of remittances
to support domestic investment.
"In the second thematic session, participants focused on central
banks' monetary and foreign exchange policies and their
effectiveness, especially in a context of large dollar inflows amid
heightened macroeconomic uncertainty. Participants exchanged views
on the experience across the region, including the decisive
response by the Central Bank of Costa Rica to the recent price
shocks. They also discussed policies to strengthen the role of
monetary policy, including the strengthening of the financial
sector, development of foreign exchange and domestic debt markets,
financial inclusion, interaction with fiscal policy, and proactive
communication. Participants shared the view that while foreign
exchange interventions can support exchange rate stability in the
short term, they are costly and may impede the gradual policy
adjustments and market deepening required to absorb higher
financial inflows to support long run development.
"The third thematic session analyzed public debt trends in CAPDR
and the factors behind higher sovereign financing costs in the
region compared to investment-grade emerging markets (EM-IG).
Rising public debt in CAPDR alongside increases in sovereign
financing costs since the global financial crisis has led to
greater increases in interest expenses than in EM-IG. Participants
highlighted that public debt and deficits in CAPDR are above those
of EM-IG, while revenue collection and governance quality are below
those of EM-IG. Although reserves are also below EM-IG levels, it
was acknowledged that accumulating more when these are assessed to
be at adequate levels could be costly. There was consensus among
participants that sound and sustainable fiscal policy frameworks,
enhanced revenue mobilization, progress to improve governance, and
adequate communication of policy intentions should remain key
priorities for policy makers to improve credit ratings and access
to international capital markets in more favorable terms.
"Finally, a new IMF book on climate change challenges and
opportunities in Latin America and the Caribbean was discussed in
the only open session of the conference, which included
participants of the civil society and journalists. Participants
provided insights on the policy options for climate mitigation,
adaptation, and green energy transition, with a shared view that a
broad range of mitigation tools is needed, together with
comprehensive approaches to adaptation aimed at building structural
and financial resilience. Participants emphasized the need for
upfront financing from both official and private sector sources,
combined with supportive structural reforms, to reach these climate
goals.
"Participants thanked the IMF and the Central Bank of Costa Rica
for the support provided in the organization of the event and
stressed the importance of maintaining a frank and fluid policy
dialogue between the region, the IMF and other key stakeholders.
Participants expressed their deep appreciation to the Costa Rican
authorities for their superb hospitality."
*********
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