/raid1/www/Hosts/bankrupt/TCRLA_Public/240927.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
Friday, September 27, 2024, Vol. 25, No. 195
Headlines
A R G E N T I N A
AEROLINEAS ARGENTINAS: Government Responds to Strikes with Threat
ARGENTINA: Unemployment Affected 7.6% in Second Quarter
B A H A M A S
BAHAMAS: S&P Affirms 'B+' Sovereign Credit Ratings, Outlook Stable
B R A Z I L
PRIO SA: Fitch Affirms 'BB' LongTerm IDRs, Outlook Stable
REDE D'OR SAO LUIZ: Fitch Affirms 'BB+' Foreign Currency IDR
D O M I N I C A N R E P U B L I C
DOMINICAN REPUBLIC: Cabinet Approves DOP1.48-Bil. Budget for 2025
DOMINICAN REPUBLIC: Education Ministry Refutes Advertising Costs
J A M A I C A
JAMAICA: S&P Affirms 'BB-' Sovereign Credit Ratings, Outlook Pos.
[*] JAMAICA: Urged to Implement Strategies to Spur Economic Growth
P E R U
AUNA SA: Fitch Affirms 'B+' LongTerm IDRs, Outlook Stable
U R U G U A Y
SURINAME: Implements Ambitious Economic Reform Agenda
URUGUAY: Pot Companies Are Fleeing Country
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A R G E N T I N A
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AEROLINEAS ARGENTINAS: Government Responds to Strikes with Threat
-----------------------------------------------------------------
Buenos Aires Times reports President Javier Milei's government
warned aviation unions that continuing strike action for wage
increases will prompt a speedier sell-off of state flagship carrier
Aerolineas Argentinas.
Owing to the escalation of conflict with aviation workers, the
national government has started talks with "several Latin American
private companies" to take over Aerolineas "in case the extortion
continues," said Presidential Spokesperson Manuel Adorni, according
to Buenos Aires Times.
The privatisation of Argentina's state airline is a long-held
desire of President Milei, who included it on a list of state
companies to be sold off in his so-called 'Ley de Bases'
mega-reform bill, Buenos Aires Times notes.
However, during negotiations to secure the bill's passage through
Congress, the administration pulled the firm from the slate of
firms up for sale, the report discloses.
Demands of Aviation Workers
Aviation workers are demanding salary increases amid falling
purchasing power and incomes, Buenos Aires Times notes.
Unions had rejected in August as "provocative" a single-digit offer
proposed by the government, the report says.
Inflation over the last 12 months totals 236 percent, the report
relays. Consumer prices last month rose 4.2 percent, the report
discloses.
Adorni on the other hand questioned the right to strike: "In a
private company, if you go on strike and complicate operations, you
get fired," the report notes.
Milei declared air transport services to be "essential" by decree,
obliging unions to guarantee 50 percent of services in the event of
strikes, the report discloses.
The unions slammed the move as an "illegal" impingement on the
right to strike, Buenos Aires Times cites.
Under new rules set forth in two decrees published in the Official
Gazette, unions must give five days notice of a strike, the report
notes.
A commission will then have 24 hours to decide which flights will
be maintained during the strike, "which must not be less than 50
percent of those affected," Federico Sturzenegger, Milei's minister
for deregulation and state transformation, wrote on the social
platform X, the report relays.
If the commission fails to reach agreement, the Labour Ministry
will determine which flights must be maintained, he added.
Unions accuse the government of "seeking the self-inflicted closure
of Aerolineas Argentinas," the report relays.
Unions Reported
Adorni also revealed that the Security Ministry had reported the
secretary general of APLA Airline Pilots' Association Pablo Biro
for "threats and extortion," after he stated that the conflict with
the government "is serious and will get much worse," Buenos Aires
Times relays.
Buenos Aires Times relays that former president Mauricio Macri
backed Milei, calling for the "urgent dismantling" of Aerolineas
Argentinas, describing the firm as a "ruinous dead-end."
About Aerolineas Argentinas
Headquartered in the Torre Bouchard, located in San Nicolas, Buenos
Aires, Aerolineas Argentinas, formerly Aerolineas Argentinas S.A.,
is Argentina's largest domestic and international airline. It is
the national airline and carries around 70% of Argentina's domestic
traffic and 40% of international flights from Ministro Pistarini
International Airport, which is located in Ezeiza, Buenos Aires.
Aerolineas Argentinas is currently owned in its majority by the
Argentine government, which seized the airline from Spanish tourism
company Grupo Marsans in 2009.
In June 2001, the airline filed for protection from creditors and
went into administration. In 2002, a Buenos Aires judge accepted
its debt restructuring agreement with creditors.
ARGENTINA: Unemployment Affected 7.6% in Second Quarter
-------------------------------------------------------
Buenos Aires Times reports that unemployment in Argentina affected
7.6 percent of the population in the second quarter of the year, a
tenth of a percentage point lower than in the preceding three
months.
The data, posted by the INDEC national statistics bureau, shows
that joblessness has risen from last year - 6.2 percent of people
were unemployed in the same quarter of 2023, according to Buenos
Aires Times.
The unemployment rate, as defined by INDEC, refers to people not
employed, who are available for work and actively seeking
employment as a proportion of the economically active population,
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.
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 A H A M A S
=============
BAHAMAS: S&P Affirms 'B+' Sovereign Credit Ratings, Outlook Stable
------------------------------------------------------------------
S&P Global Ratings, on Sept. 25, 2024, affirmed its 'B+' long-term
foreign and local currency sovereign credit ratings on the
Commonwealth of The Bahamas. The outlook remains stable. S&P also
affirmed its 'B' short-term sovereign credit ratings.
Outlook
S&P said, "The stable outlook reflects our view that over the next
12 months, a stable economy, combined with fiscal consolidation
efforts, will limit the government's debt burden. We expect the
domestic market and multilateral lenders will meet the sovereign's
relatively large, albeit decreasing, financing needs."
Downside scenario
S&P said, "We could lower the ratings in the next 12 months if
income per capita deteriorates significantly or if the government
reverses the progress it has made on fiscal performance, leading to
persistently large fiscal deficits. We could also lower the ratings
if the sovereign's access to external liquidity were to deteriorate
unexpectedly."
Upside scenario
S&P said, "We could raise the ratings in the next 12 months if the
government enacts public finance reform faster than we expect,
leading to sustained near-balanced financial results and improved
economic prospects. This could result from stronger revenues
supported by, among other things, successful implementation of a
corporate income tax and carbon credits, combined with improved
state-owned enterprise (SOE) finances after effectively executing
energy sector reforms."
Rationale
Institutional and economic profile: Slowing economic growth
expected over the next one to two years; promising energy reform
-- S&P expects the economy to slow to 1.8% in 2024, then return to
trend growth.
-- S&P doesn't expect public finance reforms to the existing tax
structure in the next one to two years, though introducing the
minimum corporate income tax could support fiscal results.
-- The government's energy reform plans could translate into
efficiencies and savings over the medium term.
The Bahamas' economy grew in 2023 at a more subdued pace, with GDP
growth at 2.6%, given the dissipation of pent-up demand following
the pandemic. However, The Bahamas' tourism sector continued to
perform very well, largely driven by a new cruise terminal in
Nassau that opened in May 2023. Total arrivals in 2023 were 9.6
million, compared with 7.0 million the year before, which is about
132% of 2019 levels.
S&P said, "We expect growth in 2024 to return to 1.8%, accounting
for a soft landing in the U.S.; GDP per capita is estimated at
US$36,490. The number of inbound arrivals reached 5.7 million in
the first half of the year, compared with five million during the
same period in 2023. Despite good growth over the past two to three
years, we expect growth to return to historical levels, which
underpins our view of the sovereign's below-average long-term
growth performance compared with that of others at a similar level
of development."
Tourism is the main driver of the economy, although The Bahamas
also has a sizable financial sector estimated to be 10%-15% of GDP.
While opportunities exist to foster the local fintech sector and
expose the country to opportunities in the digital asset space, we
view this as a longer-term goal. S&P did not view the recent
bankruptcy of FTX, a digital asset exchange headquartered in
Bahamas, as weighing on the broader financial sector.
In July 2024, the Ministry of Energy introduced comprehensive
energy reforms. While still in the early stage, it involves
upgrades to the country's transmission and distribution
infrastructure and diversifying energy sources in favor of solar
power and natural gas. This could create important savings and ease
the high costs of doing business in The Bahamas over the long
term.
The Bahamas is a stable parliamentary democracy with orderly
changes in government. Political leadership has alternated between
the Free National Movement and the Progressive Liberal Party (PLP)
over several decades. The current government, led by Prime Minister
Philip Davis of the PLP, was elected in September 2021 and has a
majority in parliament.
The Bahamas has faced two large negative shocks (hurricane Dorian
in 2019 and the pandemic in 2020), resulting in a significant rise
in government debt and testing the government's resolve to sustain
the nation's finances. While the government has been able to reduce
the deficit on the back of the country's economic recovery, it did
not introduce material new revenues or significant cost cutting
measures. S&P thinks the country's record of slow progress in
reforming public finances and key economic sectors led to a
weakening of its financial profile.
The country is exposed to environmental risks and has limited
fiscal buffers. While the government has demonstrated its
commitment to fiscal consolidation since the pandemic and reduced
the deficit, absent meaningful reforms to build buffers, S&P
expects it will remain vulnerable to external shocks like
hurricanes. The government plans to implement a minimum corporate
income tax, which will enhance its revenue profile. That, combined
with its ability to capitalize on carbon credits, can potentially
improve fiscal outcomes.
Flexibility and performance profile: Growing economy supported
smaller fiscal deficits and slowing debt accumulation; country's
external position remains vulnerable
-- The growing economy has supported the fiscal outturn.
-- The country has significant financing and refinancing
pressures.
-- S&P expects the government will refinance its debt through the
domestic banking sector and with multilateral financing.
The growing economy has supported reduced fiscal deficits to levels
more consistent with those seen pre-pandemic, with the fiscal
deficit as reported by the government (ended June 30, 2024) at 1.3%
of GDP. S&P expects the deficit will be gradually reduced, despite
subdued growth and absent any meaningful fiscal reform.
The outcome is supported partly by improved tax collections
(through a dedicated revenue enhancement unit, among other
initiatives) and an expansion of its property tax. The government
is discussing introducing a 15% corporate minimum tax rate in line
with the Organisation for Economic Co-operation and Development
(OECD), which could translate into additional revenues.
Bahamas is in a unique position to capitalize on its blue economy,
and specifically carbon sinks from its large mangroves and seagrass
beds, which could become important revenue sources over the
medium-term.
Material spending cuts have generally been difficult to implement
with past years' efforts unsuccessful in reforming the country's
SOEs, which remain a drain on government finances. The government
typically spends about 15% of its total expenditures on subventions
and has also had to pay on the guaranteed debt of SOEs. While the
potential energy sector reforms are significant and can translate
into marked savings, it is still in the early stages. At the same
time, the increasing interest payments on debt, exacerbated by the
pandemic and high interest rates, have weighed on expenditures.
S&P said, "We expect declining deficits and a growing economy will
lead to a slow decline in The Bahamas' financing needs as a share
of GDP, with the increase in general government net debt averaging
0.9% of GDP during 2024-2027. However, the country remains
vulnerable to refinancing risks based on its significant short-term
debt, with almost 25.9% of debt maturing in the next year. The
government expects this will be largely rolled over in the domestic
market, which we think can absorb this debt, given the liquidity
overhang and limited private-sector lending opportunities."
While the government will refinance existing domestic debt
internally, it will rely on external sources to meet its higher
borrowing needs, but is likely to avoid external bond markets in
2024 and 2025.
The country's external debt has risen in recent years--foreign
currency-denominated debt is now 43% of total debt--underscoring
the importance of generating sufficient foreign exchange to meet
debt service needs. A $300 million bond came due earlier in the
year and was repaid. As in the past, S&P expects the government
will continue to use commercial and multilateral bank funding to
support its financing needs.
S&P said, "We expect the government's net debt will fall to about
70.3% of GDP by the end of 2024, from 80.9% in 2020, while interest
payments will remain above 15% of government revenues for the next
three or more years. The government's high interest payments, at
19.1% of revenues, makes it less flexible to meet economic and
social spending goals. We net some of the assets held by the
country's social security system from our measure of net debt."
S&P forecasts the external debt of the public and financial
sectors, net of usable reserves and financial sector external
assets, will be about 42% of current account receipts in 2024.
These figures include the government's $2.56 billion in external
bonds, but do not include external debt and foreign direct
investment in the islands' substantial tourism sector.
Based on the large external liabilities of the country's banking
sector, the gross external financing needs of the public and
financial sectors will average 199% of current account receipts in
2024-2027, down from about 519% in 2020. This reflects an improving
current account deficit as tourism receipts increase, and the
financial sector's high rollover needs. However, S&P considers the
financial sector's external assets as highly liquid, diminishing
liquidity risk. Errors and omissions have historically been high
and tend to fluctuate, contributing to a weak external profile.
The Bahamas' limited monetary and exchange rate flexibility
constrains its ability to respond to external shocks. The Bahamian
dollar is fixed at par with the U.S. dollar. Lower demand for
foreign exchange and the government's external borrowing bolstered
foreign exchange reserves, which remain above $2.5 billion. S&P
expects that the central bank will continue to rely primarily on a
combination of interest rates, moral suasion, and macroprudential
tools to influence domestic credit growth.
S&P said, "We consider the banking sector's contingent liabilities
to be limited. The financial sector is dominated by foreign
subsidiaries of Canadian banks, which comprise a substantial
portion of domestic assets. Overall, the commercial banking sector
has strong capital and liquidity ratios. We estimate total bank
assets to be about 133% of GDP."
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B R A Z I L
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PRIO SA: Fitch Affirms 'BB' LongTerm IDRs, Outlook Stable
---------------------------------------------------------
Fitch Ratings has affirmed PRIO S.A.'s (PRIO) Long-Term Local and
Foreign Currency Issuer Default Ratings (IDRs) at 'BB' and
Long-Term National Scale rating at 'AA+(bra)'. Fitch has also
affirmed PRIO Luxembourg Holding S.a.r.l.'s (PRIO Lux) Foreign
Currency IDR and USD600 million secured notes at 'BB'.
Additionally, Fitch has affirmed Petro Rio Jaguar Petroleo S.A.'s
(Petro Rio Jaguar) National Scale Rating and second and third
debenture issues at 'AA+(bra)'. The Rating Outlook for the
corporate ratings is Stable.
PRIO's ratings reflect its strong reserve base and high operational
efficiency in the Campos basins. The company's production should
surpass 120 kboe/d on a sustained basis after the Wahoo project
starts in 2025, pending environmental licenses approval. Fitch
expects lifting cost to remain below USD9.0/boe and 1P reserve life
to stay above 12 years over the projection horizon. Absent
potential acquisitions, PRIO should maintain a robust financial
profile, with net leverage below 1.0x.
The ratings of Petro Rio Jaguar and PRIO Lux reflect PRIO's strong
incentives to support these subsidiaries if necessary, especially
given the guarantees provided for their debt instruments, including
PRIO Lux's senior secured notes due 2026.
Key Rating Drivers
Robust Reserves: PRIO has robust proven reserves (1P) of 627
million boe (including its 100% working interest in Wahoo), with an
estimated useful life averaging 14 years in 2024-2026, assuming no
reserve replacement. This compares favorably with 'BB' rated peers
in the Permian Basin. Proven and developed reserves (PD), which do
not require significant development capex, total 239 million boe,
with an average useful life of six years, in line with peers. The
robust reserve base and ownership of core equipment, including
three floating production, storage and offloading vessels (FPSO),
give PRIO flexibility to adjust capex according to market cycles.
High Efficiency: PRIO's competitive cost structure makes it highly
resilient to price volatility. Its lifting cost stands out among
main peers in Latin America and U.S., reflecting its expertise as
an operator and its asset concentration in the Campos Basin. This
concentration favors the sharing of equipment and logistical
support but increases exposure to operational risks. The
Wahoo-Frade tieback should drive future efficiency and contribute
to a reduction of the company's lifting cost to around USD6.5/boe
in 2025. This would be down from an expected USD8.5/boe in 2024 and
USD7.4/boe realized in 2023.
The cost increase in 2024 relates to production interruptions
caused by delays in environmental approvals, especially the
shutdown of one well in Frade and the stoppage of three wells in
Polvo & Tubarao Martelo cluster. Albacora Leste is also expected to
boost efficiency following key maintenance in the Forte FPSO,
including its water treatment system.
Strong Financial Profile: PRIO's comfortable capital structure
positions it well for consolidation opportunities in Brazil or
abroad. Without acquisitions, Fitch expects EBITDA net leverage to
remain below 1.0x, even if the company changed from its current
strategy to start paying a 100% dividend payout. Fitch estimates
this ratio at 0.7x in 2024 and 0.3x in 2025, down from 0.5x in June
2024, significantly below its main peers. Estimates for EBITDA
gross leverage approach 1.0x in 2024 and 0.7x in 2025, down from
1.1x in June 2024, assuming debt balances of BRL9.2 billion and
BRL7.9 billion at the end of 2024 and 2025, respectively, including
derivatives and M&A payables due to Petrobras.
Production to Peak by 2026: Fitch projects PRIO's production to
grow organically at an average annual rate of around 6% until 2028,
peaking at 134 kboe/d by 2026. This is up from 85 kboe/d forecast
for 2024 and 125 kboe/d forecast for 2025, although these volumes
depend on environmental approvals for workovers in Frade and
Tubarao Martelo fields. The Wahoo startup in 2025 and the expected
20% annual growth for Albacora Leste should more than compensate
for the depletion of the others fields.
PRIO's track record mitigates the increasing execution risks as the
company advances on ultradeep waters in Albacora Leste, which
contributes more than 40% of the output estimated through 2028.
Nearly half of the production should come from the Frade-Wahoo
cluster, where the tieback will be PRIO's second, although more
complex. Fitch expects PRIO to obtain licenses for drilling in
Wahoo and launching the pipelines to connect its production to
Frade's FPSO in 2024. By the end of 2025, all four wells should be
operational, adding around 27 kboe/d in 2025 and 40 kboe/d in
2026.
Strong Cash Flows: Fitch forecasts EBITDA of BRL9.2 billion in 2024
and BRL11.9 billion in 2025, from BRL9.2 billion in 2023. The
projection for 2024 incorporates further impacts from the
interruption caused by pending environmental approvals, while the
boost in 2025 reflects Wahoo startup and solid growth expected for
Albacora Leste's output. Fitch expects that around 75% of EBITDA
will translate into cash flow from operations (CFFO) over
2024-2026, on average.
Projections consider a declining Brent curve, averaging around
USD70/bbl over this period, and effective discount to Brent
averaging USD3.0/bbl. PRIO's strategy of selling directly to final
customers reduces the overall discounts but may add some price
volatility arising from logistic risks. Projections consider annual
investments averaging BRL2.8 billion in 2024-2026, and
conservatively includes annual dividends averaging BRL4.8 billion
over the same period (equivalent to 50% payout), given the
company's robust capital structure, leading to positive free cash
flows (FCFs) from 2025 on.
Equalized Ratings: Fitch equalizes the ratings of Petro Rio Jaguar
and PRIO Lux's with that of PRIO, given the guarantees provided by
the parent company to all or most of the debts issued by these
subsidiaries, according to Fitch's "Parent and Subsidiary Linkage
Rating Criteria". Petro Rio Jaguar is also the main subsidiary,
accounting for almost 90% of total production estimated through
2028. It concentrates the working interests in Albacora Leste,
Frade and Wahoo, the group's largest concessions.
Derivation Summary
PRIO's high profitability is a key differentiation factor relative
to its Brazilian peer 3R Petroleum Oleo e Gas S.A. (Brava, IDR
BB-/Outlook Stable) and to North American oil-weighted producers in
the onshore Permian basin (Texas/New Mexico), such as Matador
Resources Company (Matador; IDR BB-/Outlook Positive), SM Energy
Company, L.P. (SM; IDR BB-/Watch Positive) and Vermilion Energy
Inc. (Vermillion; IDR BB-/Outlook Stable).
Brava and Vermillion have similar production scale, with 1P
production averaging close to 95 kboe/d and 85 kboe/d,
respectively, over 2024-2026. Brava has a broader asset base,
operating several assets across six different basins onshore and
offshore, but its lower profitability makes it less resilient than
PRIO to market downturns. Fitch projects PRIO's half-cycle costs
around USD12/boe over 2024-2026, which is well below the estimates
for Brava (USD28/boe) and Vermillion (USD23/boe) over the same
period. Considering royalties, cash tax, debt interest and other
costs, PRIO should generate operating cash flow of around USD43/boe
produced, as measured by FFO (Funds from Operations), which is well
beyond the estimates for the other two peers, around USD22/boe.
Matador and SM Energy operate onshore fields with larger scale than
PRIO, in the range from 170 kboe/d to 190 kboe/d, but their
profitability is lower, with average half-cycle costs estimated at
USD15/boe and USD13/boe over the 2024-2026 period, and FFO/boe
around USD34/boe and USD26/boe, respectively.
PRIO also compares favorably with the American peers in terms of 1P
reserve life. Fitch estimates seven to nine years range over
2024-2026, on average, for Matador, SM Energy and Vermillion, and
13 years for PRIO (same level for Brava).
In terms of financial profile, PRIO compares favorably with Brava,
Matador and SM Energy. Absent potential M&As, Fitch projects EBITDA
leverage ratios close to 1.5x for these peers over 2024-2026, on
average, above the 0.7x ratio estimated for PRIO (same level for
Vermillion).
Key Assumptions
- Average Brent prices from 2024 to 2027 (USD/bbl): 80, 70, 65,
60;
- Wahoo first oil in first half 2025;
- Average daily production from 2024 to 2027 (kboe/d): 83; 123;
134; 131;
- Oil sales consider discount to Brent around USD3/bbl;
- Lifting cost of USD8.5/boe in 2024, approaching USD6.2/boe by
2026;
- Annual capex around BRL3.2 billion over 2024-2025;
- Dividend payout ratio of 50% of net income.
RATING SENSITIVITIES
Factors That Could, Individually or Collectively, Lead to Positive
Rating Action/Upgrade
- Net production approaching 150 kboe/d on a sustained basis while
maintaining 1P reserve life of at least 15 years and/or sustained
gross 1P reserves of at least 800 million boe or more.
Factors That Could, Individually or Collectively, Lead to Negative
Rating Action/Downgrade
- Weak liquidity profile;
- Debt/EBITDA consistently above 3.0x;
Major operational disruptions to key productive assets that result
in material decrease in production.
Liquidity and Debt Structure
Comfortable Liquidity: Under Fitch's base case scenario, PRIO
doesn't need to raise funds to pay the secured notes due 2026, with
outstanding balance of BRL3.3 billion at June, 2024, although it
has proved access to long-term funding in domestic and
international markets to roll over the notes, if necessary. Fitch
expects PRIO to maintain adequate liquidity levels, with cash
balance above short-term debt, even in the event of an
acquisition.
At the end of June 2024, total debt was BRL12.1 billion, comprised
of debentures (53% of the total amount after derivatives), secured
notes due 2026 (27%), loans from local banks (13%) and M&A payables
due to Petrobras (8%). Cash and equivalents were BRL6.4 billion
compared to short-term debt of BRL2.2 billion.
Issuer Profile
PRIO is an independent oil and gas company in Brazil, focused on
operating and developing offshore mature fields. Petro Rio Jaguar
is PRIO's most relevant subsidiary, responsible for more than 85%
of the group's production. PRIO Lux is a funding vehicle that
incorporates the trading activity. PRIO
Summary of Financial Adjustments
Fitch incorporated leasing cost into EBITDA.
MACROECONOMIC ASSUMPTIONS AND SECTOR FORECASTS
Fitch's latest quarterly Global Corporates Macro and Sector
Forecasts data file which aggregates key data points used in its
credit analysis. Fitch's macroeconomic forecasts, commodity price
assumptions, default rate forecasts, sector key performance
indicators and sector-level forecasts are among the data items
included.
ESG Considerations
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
----------- ------ -----
Petro Rio Jaguar
Petroleo S.A. Natl LT AA+(bra)Affirmed AA+(bra)
senior unsecured Natl LT AA+(bra)Affirmed AA+(bra)
Petrorio Luxembourg
Holding S.a r.l. LT IDR BB Affirmed BB
senior secured LT BB Affirmed BB
Prio S.A. LT IDR BB Affirmed BB
LC LT IDR BB Affirmed BB
Natl LT AA+(bra)Affirmed AA+(bra)
REDE D'OR SAO LUIZ: Fitch Affirms 'BB+' Foreign Currency IDR
------------------------------------------------------------
Fitch Ratings has affirmed Rede D'Or Sao Luiz S.A.'s Long-Term
Foreign Currency Issuer Default Rating (IDR) at 'BB+', Long-Term
Local Currency IDR at 'BBB-' and National Long-Term Rating at
'AAA(bra)'. Fitch also affirmed the ratings of Rede D'Or Finance
S.a.r.l's unsecured bonds at 'BB+' and Rede D'Or's local debentures
at 'AAA(bra)'. The Outlook for the LT LC IDR was revised to Stable
from Negative, and the Outlooks for the LT FC IDR and the National
LT Rating remain Stable.
The Outlook revision on the LT LC IDR reflects the improvements in
Rede D'Or's operating performance, especially in the insurance
business, combined with expected leverage reduction from 2025 on.
Fitch expects total debt/EBITDA below 3.5x in 2025 compared to 4.5x
in 2024, and net leverage below 2.5x in the rating horizon.
Rede D'Or's ratings reflect the defensive nature of its business,
its leading position in the fragmented hospital industry in Brazil,
and robust financial flexibility and liquidity.
Key Rating Drivers
Leading Business Position: Rede D'Or is the largest private
hospital network in Brazil, with 11% of market share in terms of
private beds for profit. The company has 74 hospitals, 11,905 total
beds and 9,891 operating beds as of June 30, 2024. Rede D'Or's
solid business position and large scale of operations in its key
markets serve as key competitive advantages, allowing for lower
fixed costs and significant bargaining power with counterparties
and the medical community.
Deleveraging on Track: Stronger operating cash flow and the
expectation of lower investments, after its peak of organic and
inorganic growth, should alleviate pressures on Rede D'Or's FCF
generation in the following years. Fitch projects total debt to
EBITDA of 4.5x in 2024 and 3.3x in 2025, and net leverage around
2.5x in 2024 and 2.0x in 2025. Rede D'Or's ability to effectively
deleverage while managing its business growth and within a
challenging operating environment in terms of higher operating
costs and competition are key rating considerations.
Margins to Improve: Fitch expects Rede D'Or's consolidated adjusted
EBITDA margins to improve to close 15% in 2024 and 17% in 2025,
from 14% in 2023 (the first year of the insurance consolidation).
The hospital margin should remain flat around 25%-26% in the rating
horizon, higher than its global peers, supported by Rede D'Or's
ability to pass through costs. The insurance margin should be close
to 4% in 2024 and 6% in 2025 after improvements in the medical loss
ratio (MLR), which is expected to reach 82.7% in 2024 and 82% in
2025, compared to 86.5% in 2023 and 83.2% in 1H24, as per Fitch's
calculations.
Gradual Recovery of CFFO Generation: Fitch forecasts adjusted
EBITDA pre-IFRS-16 of BRL7.4 billion in 2024 and BRL9.2 billion in
2025, after BRL6.6 billion in 2023. The consolidation of the
insurance operation has reduced the impact of working capital needs
for Rede D'Or on a consolidated basis, given its shorter cash cycle
(27 days in the LTM ended on June compared to 118 days of the
hospital segment). Fitch projects average working capital
consumption around BRL640 million in 2024-2025, lower than the
BRL2.2 billion average in 2020-2022 that considered only the
hospital operations. That, combined with lower capex levels, should
alleviate the pressures in Rede D'Or's cash flow derived from high
interest burden due to its still high indebtedness.
CFFO is expected to increase to BRL1.8 billion in 2024 and BRL3.1
billion in 2025, following continuous strengthening of the
insurance operations, against BRL52 million reported in 2023, while
FCF should remain negative at BRL1.1 billion in 2024 and positive
in the range of BRL650 million and BRL700 million in 2025. Capex
should decline to BRL2.3 billion in 2024 and BRL1.8 billion in
2025, compared to BRL2.7 million in 2023, and are mostly destined
to brownfields' projects.
Withstanding a Challenging Industry: Consolidation movements and
the increasing vertical integration among peers has increased
competition in the healthcare industry over the years, but demand
fundamentals remain solid in the long term, supported by an ageing
population and the structural imbalance between supply and demand
for hospital services in Brazil. Post-pandemic, insurance
companies' increasing MLRs impacted the entire sector, increasing
average receivable terms for healthcare providers up to 30 days, on
average, against pre-pandemic levels, leading to strong pressures
in the providers' working capital needs.
Rede D'Or's large business scale, the quality of its assets, and
recognition within the medical community constitute essential
competitive advantages that help mitigate the pressures from payors
in pricing negotiations and working capital management. Fitch
believes Rede D'Or is well positioned to face the ongoing
developments in industry dynamics.
Country Ceiling Constraints: Rede D'Or's Long-Term Foreign Currency
IDR is constrained by Brazil's 'BB+' Country Ceiling because its
operations are domiciled in Brazil. The investment-grade Long-Term
Local Currency IDR reflects the resilience of Rede D'Or's business
to economic downturns and the positive prospects over the long
term.
Derivation Summary
Rede D'Or's ratings reflect Brazil's private hospital industry's
low to moderate business risk and its positive business
fundamentals, adequate capital structure and strong financial
flexibility. Compared with Auna S.A.A. (B+/Stable), Rede D'Or has
stronger business scale, capital structure and financial
flexibility in terms of liquidity and proven access to equity and
credit markets. Rede D'Or compares well in terms of business scale
and operating margins with the Brazilian non-profit hospital
Sociedade Beneficente Israelita Brasileira Hospital Albert Einstein
(Einstein; AAA(bra)/Stable). However, Einstein has a track record
of lower leverage.
Compared with the Brazilian diagnostic and hospital competitor
Diagnosticos da America S.A (Dasa; AA(bra)/Negative), Rede D'Or has
lower business risk due to much lower competitive pressures. Both
companies have aggressive growth strategies. From a financial risk
perspective, Rede D'Or has lower leverage and greater financial
flexibility.
Rede D'Or, Auna, Einstein and Dasa all benefit from strong brands
and reputations in the industry, which offer important competitive
advantages and translate to strong relationships with
counterparties. On a global scale, the dynamics of the Brazilian
hospital industry and regulation are not directly comparable with
other countries. Rede D'Or's operating margins and financial
metrics are quite sound compared with other rated hospitals within
Fitch's global universe.
Key Assumptions
Fitch's main assumptions for Rede D'Or's rating case include:
- Addition of 243 operating beds in 2024 and 404 in 2025;
- Bed occupancy rate of 80% in 2024 and 80.5% in 2025;
- Daily patients of 2.9 million in 2024 and 3.0 million in 2025;
- Average hospital ticket (excluding oncology) at BRL9.7 thousand
in 2024 and BRL10.1 thousand in 2025;
- Hospital EBITDA margins between 25% and 26% in 2024-2025;
- Number of insurance users around 5 million in 2024-2025;
- Average monthly insurance tickets between BRL460 and BRL480 in
2024-2025;
- Insurance medical loss ratio (MLR) of 82.7% in 2024 and 82% in
2025;
- Capex at BRL2.3 billion in 2024 and BRL1.8 billion in 2025;
- A 25% minimum dividend payout.
RATING SENSITIVITIES
Factors that Could, Individually or Collectively, Lead to Positive
Rating Action/Upgrade
- Positive rating action for the LT FC IDR is limited by Brazil's
'BB+' Country Ceiling;
- Upward rating potential for Rede D'Or's 'BBB-' Long-Term Local
Currency IDR is unlikely in the medium term given the company's
lack of geographic diversification and large exposure to Brazil's
operating environment.
Factors that Could, Individually or Collectively, Lead to Negative
Rating Action/Downgrade
- A change in management's strategy with regard to its conservative
capital structure could also lead to a downgrade, as could a
deterioration in the company's reputation and market position;
- Hospital's segment EBITDA margin declining to below 22% and/or
consolidated EBITDA margin below 14%, on recurring basis;
- EBITDA leverage above 4.0x and EBITDA net leverage consistently
above 2.5x, on recurring basis;
- Deterioration of a sound liquidity position leading to
refinancing risk exposure;
- Major legal contingencies that represent a disruption in the
company's operations or a significant impact to its credit
profile.
Liquidity and Debt Structure
Robust Liquidity: Rede D'Or's financial flexibility is solid, with
proven access to local and cross-border capital markets. The
company has a history of maintaining strong cash balances while
pursuing aggressive growth plans, and no changes in this approach
are expected. As of June 30, 2024, available cash (excluding
regulatory technical provisions from the insurance business)
amounted to BRL17.6 billion against total debt of BRL35.9 billion.
Approximately BRL1.7 billion of Rede D'Or's debt matures by
December 2024 and BR3.3 billion in 2025. The cash position at the
end of June was sufficient to support debt amortization until
2028.
Total debt is mainly composed of local market issuances —
debentures (56%) and Certificados de Recebíveis Imobiliários
(CRIs) (23%) — as well as 17% in senior notes. About 18% of Rede
D'Or's debt as of June was linked to foreign currencies (the U.S.
dollar and euro), including the BRL6.1 billion senior unsecured
notes due 2028-2030. The company uses hedge instruments to mitigate
currency mismatch risks, as nearly 100% of its revenue is generated
in Brazil. Rede D'Or does not have committed credit facilities.
Issuer Profile
Rede D'Or is a leader in the Brazilian private hospital sector,
with a network of 74 hospitals and 9,891 operational beds as of
June 2024. It has a diversified business profile, which includes
one of the largest private insurers in Brazil, with 5 million
beneficiaries. The company is controlled by the Moll family, which
owns 47.3% of its shares, with the remaining distributed among the
market, minority shareholders, management and treasury.
Summary of Financial Adjustments
Fitch uses the EBITDA pre-IFRS-16 metric, and also adjusts its
EBITDA with non-recurring or non-cash items. Total debt included
obligations related to acquisitions (seller financing).
MACROECONOMIC ASSUMPTIONS AND SECTOR FORECASTS
Fitch's latest quarterly Global Corporates Macro and Sector
Forecasts data file which aggregates key data points used in its
credit analysis. Fitch's macroeconomic forecasts, commodity price
assumptions, default rate forecasts, sector key performance
indicators and sector-level forecasts are among the data items
included.
ESG Considerations
Fitch has revised Rede D'Or São Luiz S.A.'s ESG Relevance Score
related to Labor Relations & Practices to '3' from '4' following a
favorable decision by the Administrative Council of Tax Appeals
(CARF) for Rede D'Or. This decision suspended the payment of the
owed amount of BRL 1.4 billion by Rede D'Or, calculated as of
December 2023, with a fine of BRL 2 million left, which is not
material for the company.
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
----------- ------ -----
Rede D'Or Finance
S.a. r.l.
senior unsecured LT BB+ Affirmed BB+
USD 500 mln 4.95%
bond/note 17-Jan-2028
USL7915RAA43 LT BB+ Affirmed BB+
USD 500 mln 4.95%
bond/note 17-Jan-2028
75735KAA7 LT BB+ Affirmed BB+
USD 1.2 bln 4.5%
bond/note 22-Jan-2030
75735GAA6 LT BB+ Affirmed BB+
Rede D'Or Sao Luiz S.A. LT IDR BB+ Affirmed BB+
LC LT IDR BBB- Affirmed BBB-
Natl LT AAA(bra)Affirmed AAA(bra)
senior unsecured Natl LT AAA(bra)Affirmed AAA(bra)
17th Debentures
Issuance - BRL 6.7
bln bond/note 17-Jan-
2030 BRHSLZDBS0F7 Natl LT AAA(bra)Affirmed AAA(bra)
BRL 4 bln debentures
- 19th Issuance
BRRDORDBS0A0 Natl LT AAA(bra)Affirmed AAA(bra)
BRL 750 mln Floating
legacy Series 19 bond
/note 08-Nov-2026
BRSULADBS0H5 Natl LT AAA(bra)Affirmed AAA(bra)
BRL 750 mln Floating
legacy Series 29
bond/note 8-Nov-2028
BRSULADBS0I3 Natl LT AAA(bra)Affirmed AAA(bra)
BRL 2.38 bln Floating
bond/note 15-May-2032
BRRDORDBS0D4 Natl LT AAA(bra)Affirmed AAA(bra)
BRL 600 mln Floating
bond/note 10-Oct-2032
BRRDORDBS0G7 Natl LT AAA(bra)Affirmed AAA(bra)
BRL 1.1 bln Floating
bond/note 20-Feb-2030
BRRDORDBS0I3 Natl LT AAA(bra)Affirmed AAA(bra)
BRL 490 mln Floating
bond/note 25-May-2028
BRRDORDBS0J1 Natl LT AAA(bra)Affirmed AAA(bra)
BRL 1 bln Floating
bond/note 25-Jul-2031
BRRDORDBS0K9 Natl LT AAA(bra)Affirmed AAA(bra)
BRL 500 mln bond/note
05-Oct-2031
BRRDORDBS0L7 Natl LT AAA(bra)Affirmed AAA(bra)
BRL 2 bln Floating
Series D3 bond/note
05-May-2034
BRRDORDBS0Q6 Natl LT AAA(bra)Affirmed AAA(bra)
===================================
D O M I N I C A N R E P U B L I C
===================================
DOMINICAN REPUBLIC: Cabinet Approves DOP1.48-Bil. Budget for 2025
-----------------------------------------------------------------
Dominican Today reports that the Dominican Republic's Council of
Ministers, led by President Luis Abinader, approved the draft
General Budget Law for 2025, which allocates over 1,484,235,000,000
pesos.
During the session, it was revealed that projected revenues will
amount to 1,233,721,000,000 pesos, with a fiscal deficit of 3.1% of
GDP, according to Dominican Today.
Finance Minister Jose Manuel Vicente highlighted that the 2025
budget marks the first to incorporate the recently enacted Fiscal
Responsibility Law, the report notes. This law limits the growth
of government spending to stabilize debt, aiming to reduce it to no
more than 40% of GDP by 2025, the report relays. He emphasized the
bill's focus on balancing public finances by capping spending
growth, the report dicloses.
The 2025 budget is expected to be about 4% higher than the 2024
budget, reflecting an increase of approximately 65,000 million
pesos, the report adds.
About Dominican Republic
The Dominican Republic is a Caribbean nation that shares the island
of Hispaniola with Haiti to the west. Capital city Santo Domingo
has Spanish landmarks like the Gothic Catedral Primada de America
dating back 5 centuries in its Zona Colonial district. Luis Rodolfo
Abinader Corona is the current president of the nation.
TCR-LA reported in April 2019 that Juan Del Rosario of the UASD
Economic Faculty cited a current economic slowdown for the
Dominican Republic and cautioned that if the trend continues,
growth would reach only 4% by 2023. Mr. Del Rosario said that if
that happens, "we'll face difficulties in meeting international
commitments."
An ongoing concern in the Dominican Republic is the inability of
participants in the electricity sector to establish financial
viability for the system.
Standard & Poor's credit rating for Dominican Republic was raised
to 'BB' in December 2022 with stable outlook. Moody's credit
rating for Dominican Republic was last set at Ba3 in August 2023
with the outlook changed to positive. Fitch, in December 2023,
affirmed the Dominican Republic's Long-Term Foreign-Currency Issuer
Default Rating (IDR) at 'BB-' and revised the outlook to positive.
DOMINICAN REPUBLIC: Education Ministry Refutes Advertising Costs
----------------------------------------------------------------
Dominican Today reports that the Ministry of Education of the
Dominican Republic (Minerd) clarified that it has only spent
RD$19.4 million on advertising so far this year, averaging
RD$74,000 per day. This contradicts claims made by the digital
newspaper De Ultimo Minuto, which reported that the ministry spends
RD$2 million daily on advertising, according to Dominican Today.
Minerd explained that its budget for "Advertising, Printing, and
Binding" includes not only advertising but also the printing of
textbooks and other materials, the report notes. It highlighted
that it has invested RD$566 million in printing educational
materials to support the teaching process, the report relays.
The ministry urged the media and public to verify such information
through its official channels, emphasizing transparency in budget
management, the report adds.
About Dominican Republic
The Dominican Republic is a Caribbean nation that shares the island
of Hispaniola with Haiti to the west. Capital city Santo Domingo
has Spanish landmarks like the Gothic Catedral Primada de America
dating back 5 centuries in its Zona Colonial district. Luis Rodolfo
Abinader Corona is the current president of the nation.
TCR-LA reported in April 2019 that Juan Del Rosario of the UASD
Economic Faculty cited a current economic slowdown for the
Dominican Republic and cautioned that if the trend continues,
growth would reach only 4% by 2023. Mr. Del Rosario said that if
that happens, "we'll face difficulties in meeting international
commitments."
An ongoing concern in the Dominican Republic is the inability of
participants in the electricity sector to establish financial
viability for the system.
Standard & Poor's credit rating for Dominican Republic was raised
to 'BB' in December 2022 with stable outlook. Moody's credit
rating for Dominican Republic was last set at Ba3 in August 2023
with the outlook changed to positive. Fitch, in December 2023,
affirmed the Dominican Republic's Long-Term Foreign-Currency Issuer
Default Rating (IDR) at 'BB-' and revised the outlook to positive.
=============
J A M A I C A
=============
JAMAICA: S&P Affirms 'BB-' Sovereign Credit Ratings, Outlook Pos.
-----------------------------------------------------------------
S&P Global Ratings, on Sept. 24, 2024, revised its outlook on
Jamaica to positive from stable. At the same time, S&P Global
Ratings affirmed its 'BB-' long-term foreign and local currency
sovereign credit ratings on Jamaica, its 'B' short-term foreign and
local currency sovereign credit ratings, and its transfer and
convertibility assessment of 'BB'.
Outlook
The positive outlook reflects the possibility of an upgrade if
continued strengthening of the policy framework raises the
likelihood of more sustainable public finances and balanced
economic growth over the long term. Continuity with cautious public
sector management, combined with macroeconomic policy that enhances
economic resilience, could strengthen Jamaica's institutional
framework.
Downside scenario
S&P could revise the outlook to stable during the next 12-18 months
if it believed changing fiscal policy would lead to sustained
deficits, reversing debt reduction and resulting in a persistently
higher debt burden; or if the economy fails to perform as expected,
weakening the country's external position.
Upside scenario
S&P said, "We could raise the ratings over the next 12-18 months if
Jamaica demonstrates continuity of fiscal policy that increases the
sovereign's economic resilience. We could also raise the rating if
the economic growth rate rises consistently and converges with that
of peers at a similar level of economic development."
Rationale
Institutional and economic profile: Jamaica's economy will resume
growth in 2025 after a recession in 2024.
After Hurricane Beryl in early July, the Jamaican government had
ready access to contingency savings, insurance proceeds, and
multilateral funding to meet its immediate financial needs without
compromising its ability to service debt. This reflects
preparations Jamaica has made in past years to be ready for such
events and demonstrates proactive policymaking. Other indicators of
institutional strengthening include the modernization of the Bank
of Jamaica, with its legal independence and official
inflation-targeting mandate. S&P could raise the rating if there is
continuity in Jamaica's generally effective policymaking,
sustainable public finances, and government support for balanced
economic growth.
Jamaica has a stable democracy with smooth transitions of
government and broad predictability in key economic policies. S&P
said, "We expect the next national election will take place by the
end of 2025. Jamaica's two main political parties -- the ruling
Jamaica Labor Party and the opposition People's National Party --
share a similar outlook on economic policymaking and commitment to
fiscal consolidation. This political commitment has survived
changes in government and we believe is representative of
bipartisan consensus on the direction of macroeconomic policies. We
expect the government will remain focused on fiscal consolidation,
which will foster macroeconomic stability."
Jamaica's economy had been expanding since 2021, before Hurricane
Beryl passed close to the country. The damage was mostly
concentrated in the southwest of the country, hurting agriculture
badly. Although the important tourism sector escaped material
damage, tourism had already been slowing in the first half of the
year. S&P said, "We now expect a 1.5% contraction in the economy
for 2024, versus our pre-hurricane expectation of 1.6% growth. We
expect that, as the country recovers, growth will resume and by
2026 and 2027 will return to trend of 1%-2% annually. We expect GDP
per capita will be US$7,200 in 2024."
The Jamaican economy is relatively well diversified, with tourism,
agriculture, mining, and manufacturing, but it is vulnerable to
hurricanes, flooding, and droughts. Over the past decade, the
government has made numerous reforms that support diversification
and economic growth. Nevertheless, growth is constrained by high
security costs, perceived corruption, low productivity, low
business competitiveness, and vulnerability to external shocks
including weather-related ones. Real GDP per capita had slowly
begun to increase before 2020, and S&P expects the country's
10-year, weighted-average growth rate will be 1.2%, which, while
increasing, remains below that of sovereigns in the same GDP
category. Although the government is trying to boost growth through
reforms, the dividends of these efforts will take time to translate
into higher GDP.
Flexibility and performance profile: S&P expects a temporary
deviation from fiscal surpluses this year after the hurricane; the
country remains vulnerable to external shocks
S&P said, "We expect the financial effects of the hurricane will
lead the government to deviate from its past surpluses and report
fiscal results close to balance for the current fiscal year (ending
March 31, 2025). We expect lower revenues and higher expenses in
the current year, and that savings and inflows from insurance
payouts will help the government maintain debt near current levels.
The average annual change in net government debt should be 0.8% of
GDP over the next three-four years, reflecting a return to
surpluses as well as the negative effect of a likely depreciating
Jamaican dollar on the value of the country's large foreign
currency denominated external debt."
Jamaica's net debt to GDP is falling and is now below 60% of GDP.
The government's interest burden remains high but is also
decreasing. S&P said, "We expect the interest burden will fall
modestly to 16.8% of government revenues in fiscal 2025 and to less
than 15% by 2027. The government estimates its financing needs will
be J$191 billion this year, and we expect it will meet them through
a combination of predominantly concessionary multilateral funding
and domestic borrowing."
The government has announced goals to dramatically expand
infrastructure, with many projects to be funded via public-private
partnerships. S&P will not incorporate these plans into its
forecasts until it has more clarity on the size of the projects,
timeline, and any potential contingent liability that could accrue
to the government.
Jamaica's debt burden has significant exposure to exchange rate
movements, as approximately 60% of general government debt is
denominated in foreign currency. This exposure and the depreciation
of the Jamaican currency are significant factors in our assessment
of the change in net general government debt, as currency
depreciation can offset debt reduction somewhat.
S&P assesses Jamaica's contingent liabilities from the financial
sector and all nonfinancial public enterprises as limited. The
limited assessment of contingent liabilities of banks is based on
its Banking Industry Country Risk Assessment score of '8' (with '1'
being the lowest-risk category and '10' the highest) and the ratio
of banking sector assets to GDP of less than 100%.
In 2023, Jamaica's external accounts returned an unexpected current
account surplus of 2.9% of GDP, propelled by strong tourism
receipts and continued high remittances. S&P said, "This was
considerably higher than our estimate; nevertheless, we expect the
surplus will drop down closer to historical levels during our
forecast horizon. Remittances continued to bolster external
balances, although they decreased slightly year over year to just
under US$3.4 billion (about 17% of GDP) in 2023. We expect
remittances will return to previous levels over the next one-two
years. We expect the current account will remain at levels more in
line with historical trends, with a deficit of 0.8% of GDP in 2025.
Nevertheless, a growing economy (including continued strength in
tourism) will support external balances and foreign exchange, and
current account deficits will average about 0.7% of GDP over the
next four years."
S&P said, "We expect the external debt of the public, private, and
financial sectors, net of usable reserves and financial sector
external assets, will be about 58% of current account receipts in
2024, and the country's gross external financing needs will remain
steady at 98% of current account receipts and usable reserves in
2025. Jamaica's net external liability position is substantially
larger than its net external debt position, which could expose the
country to elevated risk of disruptions to external funding.
External shocks are a risk for Jamaica. To address the country's
vulnerabilities to weather-related events, the government has
created a disaster risk policy framework to build resiliency and
respond faster in the aftermath of a disaster, which served Jamaica
well at the onset of the pandemic. The multilayered approach to
mitigating the fiscal risks associated with a disaster includes a
contingency fund, insurance, a disaster line of credit with a
multilateral institution, and the issuance of a catastrophe bond.
Although Jamaica has made progress on mitigating the fiscal risks,
its economy and infrastructure remain vulnerable to physical
risks.
Inflation in Jamaica has moderated and stood at 5.1% in July 2024,
within the Bank of Jamaica's target of 4%-6%. The central bank had
responded to rising inflation with a series of increases to the
policy interest rate, which peaked at 7%, compared with 0.5% in
August 2021. In 2024, the Bank of Jamaica began reducing its policy
rate, and it is 6.75% as of August 2024. S&P believes that the bank
will maintain a cautious monetary policy which, combined with tight
fiscal policy, will keep inflation within the target band over the
next several years.
Although the central bank has a relatively short track record under
its recently enhanced autonomy, S&P believes it will continue
facilitating orderly movements in the floating exchange rate, as
shown by the two-way movement recorded against the U.S. dollar in
the past year. Dollarization is still high in the financial system,
but it has decreased during the past couple of years. In June 2024,
about 33% of financial assets were denominated in U.S. dollars,
down from 46% at the end of 2016.
Environmental, social, and governance (ESG) credit factors for this
change in credit rating/outlook and/or CreditWatch status:
-- Risk management, culture, and oversight
-- Transparency and reporting
[*] JAMAICA: Urged to Implement Strategies to Spur Economic Growth
------------------------------------------------------------------
Javaughn Keyes at RJR News reports that the Jamaican government is
being urged to consider deliberate strategies to induce economic
growth in the local economy.
In an interview with Radio Jamaica News, Michael Lee-Chin, Chairman
of NCB Financial Group, said without this, low economic output will
continue, according to RJR News.
"Jamaica has been plagued by low growth historically . . . . We
have not been so resolute and focused about growth, growth, growth.
So we have to have that focus or it's not going to happen. We will
continue to have low growth unless it's a focus and we put
strategies together and we execute on them religiously," said the
businessman, who previously served as the chairman of the now
defunct Economic Growth Council, according to RJR News.
The Economic Growth Council was set up in 2016 by the Andrew
Holness led government, as part of broader initiatives to stimulate
economic growth and job creation, the report notes.
The primary goal was to achieve 5 per cent growth in gross domestic
product within four years, commonly referred to as the "5 in 4"
initiative, the report relays.
The roles of the council are now rolled into different arms of
government, the report notes.
The call for more to be done comes as the Planning Institute of
Jamaica estimates growth of 0.1 per cent in the April to June
quarter, the report discloses.
The projection has GDP output declining by 0.1 to 1 per cent for
the current July to September quarter, the report adds.
About Jamaica
Jamaica is an island country situated in the Caribbean Sea. Jamaica
is an upper-middle income country with an economy heavily dependent
on tourism. Other major sectors of the Jamaican economy include
agriculture, mining, manufacturing, petroleum refining, financial
and insurance services.
In October 2023, Moody's upgraded the Government of Jamaica's
long-term issuer and senior unsecured ratings to B1 from B2, and
senior unsecured shelf rating to (P)B1 from (P)B2. The outlook has
been changed to positive from stable. In September 2023, S&P
Global Ratings raised its long-term foreign and local currency
sovereign credit ratings on Jamaica to 'BB-' from 'B+', and
affirmed its short-term foreign and local currency sovereign credit
ratings at 'B', with a stable outlook. In March 2022, Fitch
Ratings affirmed Jamaica's Long-Term Foreign Currency Issuer
Default Rating (IDR) at 'B+'. The Rating Outlook is Stable.
=======
P E R U
=======
AUNA SA: Fitch Affirms 'B+' LongTerm IDRs, Outlook Stable
---------------------------------------------------------
Fitch Ratings has affirmed Auna S.A.'s Long-Term Foreign and Local
Currency Issuer Default Ratings (IDRs) at 'B+'. Fitch has also
affirmed Auna's 2029 secured notes at 'B+'/'RR4' and 2025 unsecured
notes at 'B'/'RR5'. The Rating Outlook for the corporate rating is
Stable.
Auna's ratings reflect its solid brand and market position in Latin
America, adequate operating margins and geographical
diversification. The ratings remain constrained by the company's
limited financial flexibility. Fitch projects net debt/adjusted
EBITDA will decline to 4.1x in 2024 and 3.6x by 2025, from 4.6x in
2023. The 2025 notes refinancing and maintaining a stronger
liquidity profile on sustainable basis are key credit
considerations for a positive rating revision in the mid-term.
The Stable Outlook reflects Auna's growth strategies and expected
improvements in EBITDA and FCF generation. It also considers the
company's commitment to deleverage to maintain a more balanced
capital structure from 2025 onward.
Key Rating Drivers
Stronger Business Profile: Acquisitions in Colombia and Mexico over
the past two years enhanced Auna's business profile. These
acquisitions improved the company's geographical diversification,
scale and profitability, while allowing the company to maintain a
strong business position in the Peruvian market. Oncosalud is the
largest prepaid healthcare plan in Peru, or the second largest when
including traditional insurance companies, with a 30% market share
in terms of plan members.
In Monterrey (Mexico), Auna holds a 35% market share in terms of
beds. As of June 2024, Auna generated 39% of its revenues in Peru,
33% in Colombia, and 28% in Mexico. This contrasts with 2021, when
65% of revenues came from Peru and 35% from Colombia. Auna began
operations in Mexico in October 2022 after acquiring OCA. By June
2024, the company had 31 facilities, 2,308 beds, and 1.3 million
plan memberships.
Operating Margins to Improve: Fitch expects consolidated EBITDA
margins of around 20%-22% in 2024-2025, up from 14% pre-pandemic
levels and 12% average in 2020-2022. Fitch expects Mexican EBITDA
margins to average 35% in 2024-2025, compared to 34% in 2023. Fitch
expects Peru and Colombia to maintain solid operating performance,
with EBITDA margins of 16% to 17% for Peru and around 15% for
Colombia over the next two years. Auna's recent initiatives to
increase occupancy rates in Mexico by attracting and retaining
doctors in high-complexity specialties, as well as replicating its
protocols within the region, should support margin growth from 2025
onward.
Positive FCF From 2025 On: Fitch expects Auna to generate adjusted
EBITDA of around PEN888 million in 2024 and PEN996 million in 2025,
up from PEN778 million in 2023. CFFO is projected to be around
PEN94 million in 2024 and PEN185 million in 2025, with 70% and 60%,
respectively, consumed by interest expenses and working capital
requirements. FCF is expected to be around negative PEN60 million
in 2024 and positive PEN31 million in 2025.
The company should focus on maintenance capex and non-material
opportunities to improve cash flow generation. Fitch incorporates
PEN154 million of capex in 2024-2025. Fitch's base case scenario
does not incorporate any dividend pressure from Auna to its
shareholders. Any deviation from that position could pressure the
ratings.
Leverage to Decline: The improvement in Auna's operating cash flow,
ongoing integration and increasing utilization rates should support
the deleveraging trend. Fitch expects Auna's net leverage to
decrease to 4.1x in 2024 and to 3.6x by 2025 as the company
completes asset integration and implements new operating and
service standards. The ratios represent a significant improvement
compared to 4.6x in 2023 and 7.0x average from 2020-2022, per
Fitch's calculations.
Refinancing Risks Remain: Auna faces the challenge of maintaining a
longer debt amortization profile to avoid exposure to short-term
refinancing risks. As of June 2024, available cash was PEN158
million against short-term debt of PEN516 million. Additionally,
the company has USD57 million of outstanding notes due by November
2025 that need refinancing.
Withstanding a Challenging Industry Operating Environment: The
healthcare sector benefits from strong long-term demand
fundamentals due to an aging population, increasing prevalence of
chronic diseases, and growing access to healthcare systems. These
factors underscore its enduring growth potential despite near-term
challenges. Industry consolidation and vertical integration have
increased competition, making business scale and brand recognition
crucial competitive advantages to mitigate increasing pressures
from clients and suppliers in price and terms negotiations.
Regulatory frameworks driven by social security regimes in Latin
America increase cash flow instability for healthcare providers.
However, Fitch believes Auna is well positioned to face the ongoing
developments in the industry's dynamics.
Regulatory Changes in Healthcare Sector in Colombia: In April 2024,
Colombia's healthcare regulator, Supersalud, took temporary control
of three health insurance providers (Sanitas EPS, Nueva EPS, and
SOS EPS) to ensure compliance with financial and payment
obligations. Nueva EPS, the largest insurance with over 10 million
members, represents 7% of Auna's consolidated revenues, while
Sanitas' share is immaterial. Despite the intervention, Auna
continues to receive payments. So far, no credit impact had been
noticed, but Fitch will continue to monitor further developments of
this government intervention in Colombia's healthcare system.
Derivation Summary
Auna's ratings reflect its strong market position as one of Peru's
largest and best-known health care providers, with a growing
presence in Colombia and Mexico. Compared to regional peers Rede
D'Or Sao Luiz S.A. (BB+/Stable) and Hapvida Participações e
Investimentos S.A. (AAA(bra)/Negative), Auna shares a similar
business models, comprising healthcare facility networks plus
insurance businesses, and is a regional leader. However, despite
greater geographical diversification, Auna's business scale is
smaller than Rede D'Or's and Hapvida's. Additionally, Auna has
higher leverage and more limited financial flexibility, increasing
its exposure to refinancing risks and constraining its ratings.
Key Assumptions
- Revenue growth reflects organic growth and integration of
acquired assets, reaching around PEN4.3 billion in 2024 and PEN4.7
billion in 2025;
- EBITDA margins of around 20%-22% for 2024-2025;
- Average capex of PEN154 million in 2024-2025;
- No dividend payments during the rating horizon.
Recovery Analysis
Key Recovery Rating Assumptions
The recovery analysis assumes that Auna would be considered a going
concern in bankruptcy and that the company would be reorganized
rather than liquidated. Fitch has assumed a 10% administrative
claim.
Going Concern Approach
Auna's going concern EBITDA is based on pro forma results
reflecting its recent acquisitions. The going concern EBITDA
estimate reflects Fitch's expectation of a sustainable,
post-reorganization EBITDA level, upon which Fitch bases the
valuation of the company. The enterprise value/EBITDA multiple
applied is 6.0x, reflecting Auna's strong brand and market position
in the regions it operates.
Fitch applies a waterfall analysis to the post-default enterprise
value based on the relative claims of the debt in the capital
structure. The agency's debt waterfall assumptions reflect the
company's total debt at June 30, 2024. These assumptions result in
a recovery rate for the secured bonds within the 'RR1' range, but
due to soft cap of Peru at 'RR4', Auna's secured notes are rated at
'B+'/'RR4', while its unsecured notes would be rated at 'B'/'RR5'.
RATING SENSITIVITIES
Factors that Could, Individually or Collectively, Lead to Positive
Rating Action/Upgrade
- Fitch's adjusted EBITDA margins consistently above 22%;
- Fitch's net adjusted leverage ratios consistently below 3.5x;
- EBITDA interest coverage above 2.5x.
- Successful Mexican growth strategy;
- Improved liquidity position in order to reduce exposure to
short-term refinancing risks.
Factors that Could, Individually or Collectively, Lead to Negative
Rating Action/Downgrade
- Failure to complete 2025 notes' refinancing;
- EBITDA margins below 18% on recurring basis;
- Fitch's net adjusted leverage ratio consistently above 4.5x;
- Maintenance of aggressive growth strategy or shareholder-friendly
policies limiting expected improvements in its capital structure;
- Major legal contingency issues that disrupt operations or
significantly impact the company's credit profile.
Liquidity and Debt Structure
Limited Liquidity: Auna faces the challenge of strengthening its
liquidity profile to avoid short-term refinancing risks. As of June
30, 2024, the company reported cash of PEN158 million against debt
maturities of PEN516 million and PEN590 million in the next 12 to
24 months, respectively, including the USD57 million of outstanding
from the 2025 notes due by November 2025.
Total debt amounted to PEN3.8 billion per Fitch's criteria and
excludes leases obligations. The company obtained some
pre-approved, non-committed, credit lines after June that should be
used to roll over part of this upcoming debt maturities.
Refinancing the 2025 notes and maintaining a longer debt profile
are key credit factors for the Auna's rating evolution.
Issuer Profile
Auna S.A. is one of the largest and most recognized players in the
Peruvian health care industry, with a growing presence in Colombia
and Mexico. The company offers oncological and general health care
plans and operates hospitals and clinics in those regions. As of
June 30, 2024, Auna's network included 31 healthcare facilities
with a total of 2,308 beds, and 1.3 million healthcare plans.
Summary of Financial Adjustments
- Fitch uses EBITDA pre-IFRS-16 metric, and also adjusts its EBITDA
with non-recurring or non-cash items.
- Total debt includes factoring adjustments and excludes leases
obligations.
MACROECONOMIC ASSUMPTIONS AND SECTOR FORECASTS
Fitch's latest quarterly Global Corporates Macro and Sector
Forecasts data file which aggregates key data points used in its
credit analysis. Fitch's macroeconomic forecasts, commodity price
assumptions, default rate forecasts, sector key performance
indicators and sector-level forecasts are among the data items
included.
ESG Considerations
Auna has an ESG Relevance Score of '4' for Management Strategy due
to management's appetite for debt-financed growth, though it
diversifies the business, which underscores higher than expected
event risk and potentially higher comfort with elevated/longer
periods of leverage than anticipated. This has a negative impact on
the credit profile and is relevant to the ratings in conjunction
with other factors.
Fitch has changed Auna's ESG Relevance Score for Financial
Transparency to '3' from '4' due to the company's improvements with
disclosure of information, supported by quarterly earnings reports
and calls to the market.
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
----------- ------ -------- -----
Auna S.A. LT IDR B+ Affirmed B+
LC LT IDR B+ Affirmed B+
senior unsecured LT B Affirmed RR5 B
senior secured LT B+ Affirmed RR4 B+
=============
U R U G U A Y
=============
SURINAME: Implements Ambitious Economic Reform Agenda
-----------------------------------------------------
The Executive Board of the International Monetary Fund (IMF)
completed the seventh review under the Extended Fund Facility (EFF)
arrangement for Suriname. The completion of the review allows the
authorities to draw the equivalent of SDR 46.7 million (about USD
63 million), bringing total program disbursement to SDR 337.1
million (about USD 455 million). In completing the review, the
Executive Board approved the authorities' request for a waiver of
non-observance of the end-June 2024 performance criteria on the
central government primary balance based on the corrective actions
the authorities have already taken.
Suriname is implementing an ambitious economic reform agenda to
restore macroeconomic stability and debt sustainability, while
laying the foundations for strong and more inclusive growth. The
program includes policies to restore fiscal and debt
sustainability, protect the poor and vulnerable, upgrade the
monetary and exchange rate policy framework, address banking sector
vulnerabilities, and advance the anti-corruption and governance
reform agenda. These policies are supported by the EFF arrangement,
which was approved by the Executive Board on December 22, 2021 (see
Press Release No. 21/400), in an amount equivalent to SDR 472.8
million (366.8 percent of quota).
Following the Executive Board discussion on Suriname, Mr. Kenji
Okamura, Deputy Managing Director, and Acting Chair, issued the
following statement:
"The authorities' reforms under the EFF-supported program are being
increasingly reflected in macroeconomic stability and improving
investor confidence. The economy is growing, inflation is
declining, international bond spreads have reached historic lows,
and donor support is increasing.
"The near-term priority is to reinforce the planned fiscal
consolidation and protect the vulnerable from the burden of the
adjustment. Phasing out electricity subsidies and strengthening tax
administration will help create fiscal space for higher social
assistance and infrastructure spending. Fully implementing the
recently finalized social assistance reform plan will make social
programs more efficient and effective. Strengthening commitment
controls and addressing weaknesses in cash management will contain
public spending and prevent accumulation of supplier arrears.
"The debt restructuring process is nearing completion. Bilateral
agreements with all official creditors and most commercial
creditors have been achieved. Domestic debt arrears have been
cleared.
"A tight monetary policy is supporting disinflation. Implementing
the recently-finalized plan for central bank recapitalization will
strengthen the central bank's operational and financial autonomy.
The authorities' demonstrated commitment to a flexible,
market-determined exchange rate is supporting international reserve
accumulation. Timely implementation of recapitalization plans for
commercial banks that do not meet regulatory capital requirements
will bolster financial sector resilience.
"The authorities should persevere with their ambitious structural
reform agenda to strengthen institutions, address governance
weaknesses, build climate resilience, and improve data quality.
This important work will continue to be supported by capacity
development from the Fund and other development partners."
URUGUAY: Pot Companies Are Fleeing Country
------------------------------------------
Ken Parks at Bloomberg News reports that Uruguay led the world in
legalising marijuana a decade ago, but its dream of building a
medical cannabis and hemp powerhouse employing thousands of people
with US$1 billion in exports is facing a harsh reality check.
Shipments abroad have totaled less than US$30 million since 2018 as
anemic sales, red tape and miscalculations now fuel a business
exodus, according to Bloomberg News. Uruguay's abysmal experience,
including just 750 jobs, exemplifies challenges investors face
globally in building out an industry subject to intense regulatory
scrutiny or outright bans in many places, Bloomberg News notes.
From the US to Europe and elsewhere in Latin America, the global
pot business has lost some of its cachet since the gold rush days
of the late 2010s and the Covid pandemic, Bloomberg News relays.
But the downturn in Uruguay — a country of 3.4 million between
Brazil and Argentina where cows outnumber people — stands out
given its pioneering steps, business-friendly environment and
history of building multi-billion-dollar industries like tech and
forestry almost from scratch, Bloomberg News says.
In the past year and a half, major cannabis producers and service
providers in Uruguay like Pharmin, Global Cannabis Holdings and
Boreal closed, while pharmaceutical company MedicPlast exited the
business, Bloomberg News discloses.
MedicPlast didn't respond to requests for comment. Canada's Aurora
Cannabis plans to shut its Uruguayan operations, which it acquired
in 2018 for US$263 million, by the end of September, according to a
company spokesperson, Bloomberg News says.
The cannabis crash is happening in a relatively stable place, in
contrast to producers elsewhere in unpredictable Latin America,
Bloomberg News notes. Some of the region's richest billionaires
call Uruguay home, while Google recently chose the country to build
an US$850-million data centre, Bloomberg News relays. Add on a
relatively liberal society and Uruguay looked positioned to punch
above its weight in medical marijuana production, Bloomberg News
notes.
Cannabis producer Burey is one of the industry's survivors for now.
Like many, however, it underestimated how long it would take to get
the business off the ground in the face of heavy red tape,
Bloomberg News notes.
Executive Director Frank Roman opened Burey's indoor greenhouse and
extraction lab in late 2019, but three years passed before it could
export active pharmaceutical ingredients, or APIs, to Brazil and
Peru due to a glacial permitting process, Bloomberg News relays.
Burey's first prescription cannabis oil only reached Brazilian
patients last year for the same reason, Roman said, Bloomberg News
discloses.
"A cannabis company that starts from scratch in Uruguay will take
three to four years to begin selling and that is a killer," Roman
said in an interview. "Companies die if they don't have a lot of
backing," Bloomberg News relays.
Uruguay also hobbled medical cannabis producers by requiring
pharmaceutical grade products, while closing the door to lightly
regulated and easier to make nutritional supplements that would
have generated quick sales, said Ignacio Bussy, chief executive
officer at extraction lab GreenMed.
Similar stories have played out around the world, Bloomberg News
notes. Germany's partial legalization of pot this year and a
proposal to reclassify marijuana as a less dangerous drug in the US
failed to spark a lasting rally in cannabis ETFs, Bloomberg News
discloses. Business is so tough that Tilray Brands has diversified
into craft beer, Bloomberg News says. Bold forecasts for pot
newcomer Argentina remain largely hollow, Bloomberg News relays.
Uruguay's ruling left-wing political party made the nation the
first worldwide to legalise most recreational, medical and
manufacturing uses of pot in 2013, Bloomberg News recalls. The
idea was to take business away from drug gangs and create a new
source of export revenue, Bloomberg News says.
Fast forward eleven years: recreational consumption in Uruguay
through official channels has soared while the business never took
off. More than 96,000 people who want to get high have registered
with the government to obtain the psychedelic substance from almost
400 cannabis clubs, dozens of licensed pharmacies or as home
growers, Bloomberg News notes.
Uruguay has made it faster and cheaper to obtain medical marijuana
permits after delays in publishing regulations following
legalisation, said Carlos Lacava, who represents the health
ministry on the board of cannabis agency Ircca, Bloomberg News
says. He attributed recent setbacks to investors misjudging demand
and the regulatory burden inherent in the cannabis trade, among
other factors, Bloomberg News relates.
Entrepreneur David Luftglass and his partners are trying to develop
a business park with a cannabis nursery after shelving plans last
year to build a massive US$50-million extraction lab. "We
discovered that the international market wasn't ready," he added.
Producers like GreenMed initially prioritized shipping dried flower
to markets such as Europe and Australia in the absence of
regulatory approval to sell in Brazil and Uruguay, Bloomberg News
notes. Now it's looking to sell higher value APIs and formulated
products like CBD and THC oils to South American countries in which
medical marijuana is legal, Bloomberg News discloses.
Pot research company Prohibition Partners estimates medical sales
in eight regional countries could reach about US$153 million this
year, with Brazil accounting for about two thirds of the market,
Bloomberg News relays.
GreenMed started selling its first prescription CBD oil in
Uruguayan pharmacies last month with four other formulated products
slated for launch in the first half of 2025, according to Bussy,
the company executive, Bloomberg News notes. GreenMed made its
first commercial shipment of APIs in June to Brazil, Bloomberg News
relays.
"Brazil will be more than 50 percent of our sales in the next two
to three years," he added.
*********
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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* * * End of Transmission * * *