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       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

          Friday, September 20, 2024, Vol. 25, No. 190

                           Headlines



A R G E N T I N A

ARGENTINA: Economy Forecast to Extend Recession in Second Quarter


B R A Z I L

AZUL SA: Close to New Debt Deal with Lessors
SIMPAR SA: S&P Affirms 'BB-' ICR & Alters Outlook to Stable


H O N D U R A S

HONDURAS: Fund Team Welcomes 2025 Draft Budget Bill


P E R U

PETROLEOS DEL PERU: Board Submits Resignation

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A R G E N T I N A
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ARGENTINA: Economy Forecast to Extend Recession in Second Quarter
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globalinsolvency.com, citing a Reuters poll, reports that
Argentina's economy likely shrank 1.4% in the second quarter versus
a year earlier, the fifth such decline as a recession deepens under
a tough austerity drive by libertarian President Javier Milei.

That median GDP estimate from 15 analysts polled by Reuters for the
April-June period would follow a 5.1% year-over-year contraction in
the first quarter, according to globalinsolvency.com.  The official
data is released.

Milei's cost-cutting has hurt economic activity and pushed up
poverty and unemployment, the report notes.

                      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.

In March 2022, the International Monetary Fund (IMF) approved a new
30-month arrangement under an Extended Fund Facility for Argentina
in the amount of SDR 31.914 billion (equivalent to US$44 billion,
or 1000 percent of quota).  The IMF Executive Board's decision
allowed the authories an immediate disbursement of an equivalent of
US$9.65 billion in March 2022.

Argentina's IMF-supported program seeks to improve public finances
and start to reduce persistent high inflation through a
multi-pronged strategy, involving a gradual elimination of monetary
financing of the fiscal deficit and enhancements in the monetary
policy framework.

In June 2024, the IMF Board completed an eighth review of the
Extended Arrangement under the Extended Fund Facility for
Argentina.  The IMF Board's decision enabled a disbursement of
around US$800 million to support the authorities' efforts to
entrench the disinflation process, rebuild fiscal and external
buffers, and underpin the recovery.

S&P, in March 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 S&P ratings have
been affirmed as of August 2024.  S&P said the stable outlook on
the long-term ratings balances the risks posed by pronounced
economic imbalances and other uncertainties with recent progress in
making fiscal adjustments, reducing inflation, and undertaking
structural reforms to address long-standing microeconomic
weaknesses that have contributed to poor economic performance for
many years that it would likely consider to be distressed.

In June 2023, Fitch ratings also upgraded 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-'.
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 2023.  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.




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B R A Z I L
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AZUL SA: Close to New Debt Deal with Lessors
--------------------------------------------
globalinsolvency.com, citing Reuters, reports that Brazilian
airline Azul SA has moved closer to clinching a new deal with
lessors as the company offers them equity to pay off some $600
million in debt.

Shares in the carrier jumped over 20% in trading after Reuters
first reported on the progress in negotiations, according to
globalinsolvency.com.  

Azul's shares had slipped over 40% since August on media reports
that it was considering filing for chapter 11 bankruptcy protection
as it struggles with its debt load, the report notes.

The company has said it is focused on direct talks with creditors,
the report adds.

As reported in the Troubled Company Reporter-Latin America in July
2024, Fitch Ratings has affirmed Azul S.A.'s (Azul) Long-Term
Foreign and Local Currency Issuer Default Ratings (IDRs) at 'B-'
and its Long-Term National Scale rating at 'BB(bra)'. Fitch has
also affirmed Azul Investments LLP's unsecured bonds at
'CCC+'/'RR5', as well as Azul Secured Finance LLP's senior secured
notes at 'B-'/'RR4'. The Rating Outlook of Azul's IDRs has been
revised to Negative from Stable. Fitch has assigned a Negative
Outlook to Azul's Long-Term National Scale Rating.


SIMPAR SA: S&P Affirms 'BB-' ICR & Alters Outlook to Stable
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S&P Global Ratings, on Sept. 18, 2024, revised the outlook on
Simpar S.A. to stable from positive and affirmed the global and
national scale ratings on Simpar at 'BB-' and 'brAA+',
respectively.  S&P also affirmed the issue-level ratings on the
company's senior unsecured debentures and senior notes, with a
recovery rating of '4' (35%).

S&P said, "The stable outlook indicates our view that Simpar will
remain focused on efficiency measures to balance continued high
interest rates. We forecast FFO to debt of 10%-15% and EBIT
interest coverage of 1.2x-1.5x in the next two years."

Moreover, Simpar faces continued elevated depreciation rates. The
group ended June 2024 with consolidated gross debt of Brazilian
real (R$) 49.6 billion, of which R$6.7 billion was debt at the
holding company.

S&P said, "Our forecasts for Simpar's EBIT interest coverage of
1.2x-1.5x and FFO to debt of 12%-15% in 2024-2025 are commensurate
with its current 'BB-' rating. In addition, we expect the group's
measures to manage its liabilities, combined with higher cash flow
in the next few years (mostly from internal growth), will help to
control leverage."

For example, the group's rental car subsidiary Movida Participacoes
S.A. (BB-/Stable/--) issued debt in the domestic market at an
average interest rate of 2.3% over the Brazilian interbank deposit
rate (CDI) to prepay debt at CDI + 2.8%.

S&P said, "We expect Movida to continue working on improving
utilization rates while modestly expanding its fleet to
approximately 230,000 – 255,000 vehicles 2024-2026. We expect the
company will allocate 60% of this fleet to long-term contracts and
use the rest as shorter-term rental cars.

"We therefore expect Movida to maintain an average operational
utilization rate of 85%-90% coupled with average rental price
adjustments--supporting an EBIT margin consistently above 20%,
versus almost 16% in 2023 due to impairments.

"At the group's truck rental subsidiary, Vamos Locacao de
Caminhoes, Maquinas e Equipamentos S.A. (BB-/Stable/--), we expect
continued efforts to sign new contracts to expand the company's
backlog while it manages inventory at dealerships. We forecast a
net revenue increase of approximately 30% in 2024, mostly from
truck rentals sufficiently balancing the weak dealerships (the ones
with exposure to agribusiness). We expect Vamos' EBIT margin will
be comfortably around 40% in the next few years.

"We expect logistics services provider JSL S.A. (BB-/Stable/--)
will post an EBITDA margin near 20%, with the consolidation of
assets it acquired in the past 18 months, management to remain
focused on efficiencies, and net revenue expansion from its solid
existing backlog. We also expect JSL to continue signing contracts
with new clients or cross-selling. The company added R$2.3 billion
in new contracts to its backlog in the first half of 2024, with an
average term of 57 months, which provides important cash flow
predictability.

"Finally, we believe the group's car dealership subsidiary Automob
will continue expanding through strategic acquisitions.

"We assume net capex of about R$8.5 billion–R$10.5 billion in
2024-2026, mostly directed to Movida and Vamos.

"For Movida, we forecast net capex of about R$2.6 billion this year
for fleet renewal and modest fleet expansion, but in 2025 and 2026
we forecast higher capex mostly for expected new long-term
contracts. We anticipate Vamos' net capex will be around R$4.5
billion this year and R$3 billion–R$3.5 billion in 2025-2026 to
meet growing market demand. Our forecasts for the main subsidiaries
indicate that they will continue financing capex with internal cash
flow and new debt."




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H O N D U R A S
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HONDURAS: Fund Team Welcomes 2025 Draft Budget Bill
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An International Monetary Fund (IMF) mission led by Mr. Ricardo
Llaudes issued a statement following in person and virtual
discussions with the Honduran authorities on policies to support
the authorities' economic program:

"The Fund team welcomes the adoption by the Council of Ministers of
Honduras of the 2025 draft Budget Bill. The draft Budget is in line
with the authorities' economic program supported by the IMF,
providing space for critical social and infrastructure spending.

"In addition, productive discussions, both virtual and in person,
have taken place over the past months on economic policies to
safeguard Honduras' domestic and external stability, paving the way
for a program review mission planned for the first half of
October."




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P E R U
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PETROLEOS DEL PERU: Board Submits Resignation
---------------------------------------------
globalinsolvency.com, citing Bloomberg News, reports that the board
of ailing state-owned company Petroleos del Peru submitted its
resignation.

"As several days have passed without the government making a
statement, the directors appointed by the general shareholders
meeting, unanimously, have presented our resignation," the members
said in a statement obtained by the news agency.

As reported in the Troubled Company Reporter-Latin America in July
2024, globalinsolvency.com, citing Bloomberg News, relayed that
Peru's struggling state-owned oil company is asking the government
to convert some of its loans into equity and push back deadlines to
avoid running out of cash this year.  Petroleos del Peru SA has
been navigating a worsening liquidity crisis for years, tied to the
construction of a brand new refinery that came in over budget and
was repeatedly delayed, according to globalinsolvency.com.

Petroleos del Peru - Petroperu S.A. (Petroperu) is a Peruvian
state-owned petroleum company under private law and dedicated to
oil production, transportation, refining, distribution and
marketing of fuels and other petroleum-derived products. Refineries
are located at Talara, Iquitos and Conchan.



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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
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Chapman, Editors.

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