/raid1/www/Hosts/bankrupt/TCRLA_Public/240930.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
L A T I N A M E R I C A
Monday, September 30, 2024, Vol. 25, No. 196
Headlines
A R G E N T I N A
ARGENTINA: Gov't. Dismisses Responsibility for Jump in Poverty Rate
ARGENTINA: Poverty Soars Past 50% as Milei Austerity Hits Hard
LA RIOJA: Fitch Affirms 'RD' LongTerm Issuer Default Ratings
B E R M U D A
INVESTMENT ENERGY: Moody's Alters Outlook on 'Ba3' Rating to Neg.
B R A Z I L
BANCO MASTER: Moody's Alters Outlook on B3 Deposit Rating to Pos.
BRF SA: Moody's Hikes CFR to 'Ba2' & Alters Outlook to Stable
COMPANHIA SIDERURGICA: Moody's Alters Outlook on Ba2 CFR to Neg.
MOVIDA PARTICIPACOES: S&P Affirms 'BB-' National Scale Rating
USIMINAS: Moody's Affirms 'Ba2' CFR, Outlook Stable
C A Y M A N I S L A N D S
AIRPORT PARKING: Voluntary Arrangement Vote Due by Oct. 2
CAZOO GROUP: Taps Teneo (Cayman) as Liquidators
COPHALL PARKING: Voluntary Arrangement Vote Due by Oct. 2
FAT PROJECTS: Creditors' Meeting Set for Oct. 8
GROUP FIRST: Voluntary Arrangement Vote Due by Oct. 2
HELP-ME-PARK.COM LTD: Voluntary Arrangement Vote Due by Oct. 2
LONDON LUTON: Voluntary Arrangement Vote Due by Oct. 2
PARK FIRST GATWICK: Voluntary Arrangement Vote Due by Oct. 2
PARK FIRST GLASGOW: Voluntary Arrangement Vote Deadline Set Oct. 2
PARK FIRST MGMT: Voluntary Arrangement Vote Due by Oct. 2
PAYPARK LIMITED: Voluntary Arrangement Vote Due by Oct. 2
POINTGUARD VENTURES: Taps Kroll (Cayman) as Liquidator
SABLE INT'L: Fitch Rates USD500MM Secured Notes Due 2032 'BB-'
SABLE INT'L: Moody's Rates New $500MM Secured Notes Due 2032 'Ba3'
SABLE INT'L: S&P Rates New $500MM Secured Notes Due 2032 'BB-'
C O S T A R I C A
BANCO DE COSTA RICA: Moody's Hikes Bank Deposit Ratings to 'Ba3'
D O M I N I C A N R E P U B L I C
[*] DOMINICAN REPUBLIC: Seeks to Strengthen Energy Transition
J A M A I C A
JAMAICA: Trade Deficit Lower For First Five Months of 2024
M E X I C O
CYDSA SAB: S&P Affirms 'BB/B' ICRs & Alters Outlook to Stable
X X X X X X X X
[*] BOND PRICING COLUMN: For the Week Sept. 23 to Sept 27, 2024
- - - - -
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A R G E N T I N A
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ARGENTINA: Gov't. Dismisses Responsibility for Jump in Poverty Rate
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Buenos Aires Times reports that President Javier Milei's government
went on the defensive as it denied responsibility for rising
poverty in Argentina.
Poverty in Argentina reached 52.9 percent of the population in the
first half of 2024, a sharp increase of 11.2 percentage points
compared to the same period in 2023, the INDEC national statistics
bureau earlier indicated, according to Buenos Aires Times.
Extreme poverty rose 6.2 points year-on-year to 18.1 percent, the
report notes.
The number "is the consequence of 20 years of populism and
destruction . . . we took on the disaster and we are correcting
it," said Presidential Spokesperson Manuel Adorni at his daily
press conference, the report relays.
The spokesman said that according to undisclosed data from the
Ministry of Human Capital, poverty reached "maximum peaks of almost
55 percent in the first quarter," the report notes.
Based on that statement, he claimed that the government had managed
to reduce it in the second quarter of the year, the report
discloses.
In the first three months of the year, Argentina recorded a fiscal
surplus of 0.4 percent of Gross Domestic Product, albeit at the
cost of a contraction that caused GDP to slump 1.7 percent in the
second quarter compared to the previous one, deepening the ongoing
recession, the report notes.
Adorni stressed that "the big adjustment has already been made,"
the report relays.
"Today that adjustment is going to be much more surgical, area by
area," he explained.
However, he clarified, for the government "the chainsaw has no
end," the report notes.
The chainsaw was a symbol of Milei's election campaign to promote
his policy of fiscal rigour, the report discloses.
"Whatever we can cut, we will cut until the last day of our
existence in our government," Adorni stressed, the report adds.
About Argentina
Argentina is a country located mostly in the southern half of South
America. Its capital is Buenos Aires. Javier Milei is the current
president of Argentina after winning the November 19, 2023 general
election. He succeeded Alberto Angel Fernandez in the position.
Argentina has the third largest economy in Latin America. The
country's economy is an upper middle-income economy for fiscal year
2019, according to the World Bank. Historically, however, its
economic performance has been very uneven, with high economic
growth alternating with severe recessions, income maldistribution
and in the recent decades, increasing poverty.
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.
ARGENTINA: Poverty Soars Past 50% as Milei Austerity Hits Hard
--------------------------------------------------------------
Manuela Tobias at Bloomberg News reports that poverty in Argentina
reached its highest level since the aftermath of the 2001 financial
crisis in the first half of the year, as President Javier Milei
unleashed a shock therapy program to put an already reeling economy
back on its feet.
About 52.9 percent of Argentines were mired below the poverty line
in the first half of the year, up from 41.7 percent in the second
half of 2023, according to government data published, Bloomberg
News notes. It's the result of an aggressive cost-cutting exercise
meant to tame inflation that the government warns would have
continued spiralling higher in its absence, according to Bloomberg
News.
"This is a number that, surely, will reflect the crude reality that
Argentine society is going through as a consequence of the populism
that has put Argentina through so many years of disgrace and
devastation," Presidential Spokesperson Manuel Adorni said in a
preview of the data at a press briefing earlier, Bloomberg News
relays.
Annual inflation nearing 237 percent drove the increase in
Argentina's poverty rate, which is calculated using a basket of
household goods and average wages, Bloomberg News discloses. The
proportion of people who can't make ends meet has now more than
doubled since the second half of 2017, Bloomberg News says.
Yearly consumer price gains are down from a peak of 289 percent in
April but still far higher than the 18 percent Milei is boldly
predicting by December 2025, Bloomberg News notes. Monthly
inflation has fallen to about four percent after hitting nearly 26
percent in December, when the President liberated price controls on
everything from milk to phone bills, sharply devalued the currency
and let price gains outpace pensions and public wages in the first
months of the year, Bloomberg News discloses.
Though mired in its sixth recession in a decade, South America's
second-biggest economy is showing incipient signs of recovery, with
wage growth edging above inflation for three straight months as
well as recent gains in both consumer spending and manufacturing,
Bloomberg News relays. Economic activity rose 1.7 percent in July
from a month earlier, led by agriculture and mining, Bloomberg News
says.
Opposition to the government's austerity push, however, risks
jeopardising the consistent budget surpluses that have helped put a
lid on inflation, Bloomberg News notes. This month, Milei vetoed a
bill that would have significantly raised spending on pensions,
triggering violent protests outside congress, Bloomberg News
discloses. Public universities are threatening more public unrest
and a 24-hour strike over the libertarian's promised veto of their
expanded budget, Bloomberg News relays.
Evidence of growing hardship is rampant, Bloomberg News notes.
People begging outside grocery stores, digging through the trash
and ringing doorbells for used clothes have become mainstays in the
capital of Buenos Aires, Bloomberg News says. The government has
increased funding for both the country's main child support and
food stamp programmes, Adorni said, Bloomberg News adds.
About Argentina
Argentina is a country located mostly in the southern half of South
America. Its capital is Buenos Aires. Javier Milei is the current
president of Argentina after winning the November 19, 2023 general
election. He succeeded Alberto Angel Fernandez in the position.
Argentina has the third largest economy in Latin America. The
country's economy is an upper middle-income economy for fiscal year
2019, according to the World Bank. Historically, however, its
economic performance has been very uneven, with high economic
growth alternating with severe recessions, income maldistribution
and in the recent decades, increasing poverty.
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.
LA RIOJA: Fitch Affirms 'RD' LongTerm Issuer Default Ratings
------------------------------------------------------------
Fitch Ratings has affirmed the Argentinian Province of La Rioja's
Long-Term Foreign and Local Currency Issuer Default Ratings (IDRs)
at 'RD'. Fitch has also affirmed La Rioja's USD318.4 million senior
unsecured step-up notes due 2028 at 'D'. La Rioja's Standalone
Credit Profile (SCP) is assessed at 'rd'. Fitch has relied on its
rating definitions to position the province's ratings and SCP.
The Province of La Rioja defaulted on principal semi-annual
payments of its USD318.4 million senior unsecured bonds due in
2028. The province did not perform principal payments of USD 15.9
million as of Feb. 24, 2024, and USD 37.8 as of August 24, 2024.
The province remains in default. Fitch has closely monitored La
Rioja's liquidity position since December 2023. The February 2024
default occurred amidst the expectation of a significant
deterioration of operating revenues in 2024, due to the
non-transfer of national resources that corresponded to
approximately 17.6% of the Operating Revenues, on average, between
2021 and 2023.
Due to the loss of resources, the province's liquidity position has
deteriorated dramatically in 2024, which has led to the issuance of
bearer bonds for provincial circulation (Chachos). The bonds were
used to pay wages for public servants and pay suppliers.
Key Rating Drivers
Risk Profile: Vulnerable
The 'Vulnerable' assessment, for all Argentine local and regional
governments (LRGs) reflects the sovereign IDR being below the 'B'
category, rather than Argentina's implied operating environment of
'bb'. Fitch views the risk profile as indicating a very high risk
of the issuer's ability to cover debt service. This risk could be
due to lower revenue, higher expenditure, or an unexpected rise in
liabilities or debt-service requirements, weakening the operating
balance unexpectedly over the scenario horizon.
Revenue Robustness: 'Weaker'
The assessment reflects the evolving national fiscal framework, the
province's dependence on a 'CC' sovereign counterparty for a
three-year average of 91% of its total revenue, and an adverse
macroeconomic environment with higher inflation. According to law,
federal co-participation transfers to provinces have never been
interrupted to date.
La Rioja is historically dependent on national budgetary transfers.
Although these transfers are extra-budgetary national resources,
they maintain highly discretionary. The co-participation regime
accounts for an average of 73.6% of the province's operating income
over three years and is also highly dependent on national budgetary
transfers, which constitute a three-year average of 17.8% of
operating income. Since December 2023, these transfers have been
interrupted and have not been reinstates as of August 2024.
Revenue Adjustability: 'Weaker'
Fitch considers local revenue adjustability for Argentine LRGs to
be low. The country's large and distortive tax burden and the weak
macroeconomy impact affordability. La Rioja's ability to generate
additional revenue during economic downturns is further limited by
its high dependence on transfers and small tax base. In its rating
case, Fitch expects operating income to increase below the average
inflation rate for 2024. Local collection revenue represents a
three-year average of 8.2% of operating income, which reduces the
province's revenue flexibility.
Expenditure Sustainability: 'Weaker'
Argentine LRGs face high expenditure responsibilities amid
structurally high inflation. The country's fiscal regime is
structurally imbalanced regarding revenue-expenditure
decentralization. Since 2021, real salary increases have caused
operating balances to decrease, converging toward historic levels.
In 2023, the operating balance was 13.2% of operating revenue in
2023, down from 13.3% in 2022. Amid an economic recession (GDP
-1.6%), operating income and real operating expenditure both fell
by 6%, keeping the operating balance constant between 2022 and
2023.
Expenditure Adjustability: 'Weaker'
For Argentine subnationals, infrastructure needs and expenditure
responsibilities are high, with limited ability to cut expenses in
an adverse macroeconomic context. National capex is low and
insufficient to shift capex burdens to LRGs. In, 2023, capex
reached 21.8% of total expenditure, above the five-year average of
17.2%. As of June 2024, capital expenditure contracted by 77% in
real terms.
Liabilities and Liquidity Robustness: 'Weaker'
Unhedged foreign currency debt exposure, the weak national
framework for debt and liquidity, and an underdeveloped local
market are key weaknesses factoring into Fitch's assessment of the
robustness of the province's liabilities and liquidity. The
assessment also reflects a 'CC' sovereign that restructured its
debt in 2020, curtailing external market access to LRGs.
By YE 2023, the province's direct debt increased by about 393% yoy,
underpinned by high inflation and currency depreciation (368%),
totaling ARS330.97 billion. Approximately 97.6% of La Rioja's
direct debt is denominated in foreign currency and is unhedged,
mainly in U.S. dollars, which is a rating risk in the current
environment of high inflation and currency depreciation. However,
98.5% of La Rioja's total debt has fixed-interest rates.
The senior unsecured notes were initially issued to finance the
construction of the Arauco Wind Farm (Parque Eolico Arauco) with
the expectation that the province would be able to generate
revenues through a mirror loan with the parks that would finally be
used to repay the bonds, although revenues were not formally
secured. The wind farm is not yet fully operational, requiring
further investments, and currently generates a low level of
revenue.
In 2020, La Rioja executed a DDE process and restructured its U.S.
dollar senior unsecured notes. La Rioja's DDE, concluded in
September 2021, was a protracted process and involved a default
event that took one year to be resolved. The downgrade of La
Rioja´s ratings to 'RD' in March 2024, followed the province´s
non-payment of its senior unsecured notes due in 2028, specifically
a principal semi-annual payment due Feb. 24, 2024 for USD15.9
million.
The province's failure to cure the missed principal payment after
the three-day cure period is considered an event of default, per
the transaction documents and Fitch. The province remains in
default, has not caught up with the missed payments from February,
and did not make the semi-annual payment due in 24 August 2024 of
USD 37.8 million.
Since April 2024, some holders have initiated a lawsuit in the
Southern District of New York. Fitch will monitor the situation. On
September 11th, Bondholder group won USD 39.8m summary judgment in
a US court.
Liabilities and Liquidity Flexibility: 'Weaker'
Fitch perceives the Argentine national framework in place for
liquidity support and funding available to subnationals as
'Weaker', as there are no formal emergency liquidity support or
bail-out mechanisms established. The sovereign counterparty's
rating is weak, at 'CC'. For liquidity, Argentine LRGs rely mainly
on their own unrestricted cash. In 2023, La Rioja's unrestricted
cash totaled around ARS51.6 billion (USD62 million). La Rioja's
liquidity coverage ratio averaged 6.1x in 2019-2023, but Fitch
projects it will decline below 1.0x starting 2024.
Financial Profile: 'bb' Category
The 'bb' Financial Profile score reflects a 'aa' primary payback
ratio of 15.1x for 2024 under Fitch's rating case. Additionally,
the score reflects an override from the 'b' ADSCR of 0.4x in 2024.
The Financial Profile metrics are analyzed to evaluate the
province's specific debt repayment capacity and its liquidity
position in the next 12 months. Since La Rioja is not able to
comply with its financial obligation, the calculation of the
Financial Profile becomes less relevant.
ESG - Creditor Rights: The province's failure to cure the missed
principal payment after the three-day cure period is considered an
event of default as per the transaction documents and by Fitch. The
missed principal payment of its USD318.4 million senior unsecured
step-up notes underpins the elevated score on creditor rights on
the back of a significant depreciation of the real exchange rate
and lower operating margins amid a negative economic environment.
This credit event is highly relevant to the current rating
downgrade and is a key rating driver on an individual basis.
Derivation Summary
Province of La Rioja's SCP is assessed at 'rd'. La Rioja's has a
'vulnerable' risk profile and a 'bb' Financial Profile score, less
relevant given the RD. Fitch has relied on its rating definitions
and has incorporated the province's restrictive-default event to
position the province's ratings and its SCP.
Key Assumptions
Qualitative assumptions:
Risk Profile: 'Vulnerable'
Revenue Robustness: 'Weaker'
Revenue Adjustability: 'Weaker'
Expenditure Sustainability: 'Weaker'
Expenditure Adjustability: 'Weaker'
Liabilities and Liquidity Robustness: 'Weaker'
Liabilities and Liquidity Flexibility: 'Weaker'
Financial Profile: 'bb'
Support (Budget Loans): 'N/A'
Support (Ad Hoc): 'N/A'
Asymmetric Risk: 'N/A'
Sovereign Cap: 'N/A'
Sovereign Floor: 'N/A'
Quantitative assumptions - Issuer Specific:
Fitch's rating case is a "through-the-cycle" scenario, which
incorporates a combination of revenue, cost and financial risk
stresses. It is based on 2019-2023 figures and 2024-2026 projected
ratios. The key assumptions for the scenario include the
following:
- Operating income average growth of 120.1% for 2024-2026; assuming
growth below average inflation towards the medium term to stress
operating margins;
- Operating expenditure average growth of 126.3% for 2024-2026;
assuming growth above average inflation towards the medium term to
assume real term expenditure re-composition;
- Average capital expenditure/ total expenditure levels of around
3.8%; below the 17.2% average of the last 5 years, due to a lack of
funding and financing.;
- Cost of debt considers non-cash debt movements due to currency
depreciation with an average exchange rate of ARS1,005.4 per U.S.
dollar for 2024 (YE 1,400), ARS1,873.1 for 2025 (YE 2,213.5), and
ARS2,674.7 for 2026 (YE 2,932.6);
- Consumer price inflation (annual average % change) of 256.4% for
2024, 117.3% for 2025, 49.8% for 2026.
RATING SENSITIVITIES
Factors that Could, Individually or Collectively, Lead to Negative
Rating Action/Downgrade
- La Rioja is rated 'RD'; therefore, there can be no further
negative rating action on its ratings.
Factors that Could, Individually or Collectively, Lead to Positive
Rating Action/Upgrade
- La Rioja's IDRs and SCP would be reassessed upon the completion
of a debt restructuring process to reflect its new credit profile,
or it cures its defaults on principal and accrued interest.
Issuer Profile
La Rioja is located in the northeast region of Argentina and has a
GDP of around USD2 billion, or less than 1% of national GDP. Due to
its relatively small size, public sector employees represent almost
one third of the local economy. The province reports below average
income of around USD5,200 per capita.
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
La Rioja has an ESG Relevance Score of '5' for Creditor Rights due
to the province's failure to cure the missed principal payment
after the three-day cure period for the USD318.4 million senior
unsecured step-up notes. This credit event drives the elevated
score on creditor rights. This credit event is highly relevant to
the current rating downgrade and is a key rating driver on an
individual basis.
The province has an ESG relevance score of '4' for Rule of Law,
Institutional & Regulatory Quality, Control of Corruption as it
presents weak management practices and regulations toward its
financial obligations, which has a negative impact on the credit
profile, and is relevant to the ratings in conjunction with other
factors.
The highest level of ESG credit relevance is a score of '3', unless
otherwise disclosed in this section. A score of '3' means ESG
issues are credit-neutral or have only a minimal credit impact on
the entity, either due to their nature or the way in which they are
being managed by the entity. Fitch's ESG Relevance Scores are not
inputs in the rating process; they are an observation on the
relevance and materiality of ESG factors in the rating decision.
Entity/Debt Rating Prior
----------- ------ -----
La Rioja, Province of LT IDR RD Affirmed RD
LC LT IDR RD Affirmed RD
senior unsecured LT D Affirmed D
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B E R M U D A
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INVESTMENT ENERGY: Moody's Alters Outlook on 'Ba3' Rating to Neg.
-----------------------------------------------------------------
Moody's Ratings affirmed the Ba3 ratings assigned to Investment
Energy Resources Limited (IERL) ("IERL" or "Issuer"). The outlook
changed to negative from stable.
RATINGS RATIONALE
IERL's rating outlook change to negative from stable reflects a
weaker financial performance of the company due to: (a) technical
and operational issues in RENACE power plant in conjunction with
(b) lower hydro and wind generation and (c) the ongoing challenges
to collect from ENEE, the electric utility in Honduras. The
combination of these events has led IERL to obtain waivers for
covenant compliance on its $110 million syndicated bank loan
(initial balance of $300 million). Moody's recognize that the
company has made early amortization on the loan, reducing leverage
and partially mitigating the effect of the weaker financial
performance. The loan ranks pari passu with the Ba3 rated $700
million RegS/144A notes (Notes).
Supporting the Ba3 rating affirmation at this time, is the return
to operations of Renace II (August 2024) and Renace I (expected in
mid-2025) power plants, that will lead to a gradual improvement in
metrics, along with Moody's view that the company's liquidity
profile remains adequate ahead of its cash needs and financing
obligations over the next 12 to 18 months.
Environmental considerations were material for this credit action
since IERL's operating and financial performance has been affected
by weather conditions and operational issues. El Niño conditions
prevailed in the first quarter of 2024 resulting in
lower-than-average hydrology and wind generation and higher spot
prices in Guatemala. Since summer, El Niño conditions have
normalized (neutral), with strong likelihood of La Niña phenomenon
to develop in the coming months, potentially benefiting
hydroelectric generation during the last months of the year.
In November 2023, one of Renace I hydro generation units with a
capacity of 22MW (in Guatemala) stopped operating due to major
damage, and repairs are expected to be completed around the first
half of 2025. In March this year operations of the Renace 2 plant
(114MW) were suspended since damage in one of the tunnels was
identified during a routine maintenance, although operations were
resumed in August after repairs on the affected tunnel were
completed.
IERL has also been facing challenges regarding the collections of
one of its off-takers, ENEE, the government-owned utility in
Honduras. While pending accounts receivables of $119 million were
collected last year, renegotiated PPAs between IERL and ENEE are in
the process of approval with the Honduran congress. In the
meantime, new arrears continue to accumulate, which as of June
amount to $63 million.
The combination of challenges described above, resulted in weaker
financial performance. In 2023, IERL recorded cash interest
coverage and FFO/debt of 2.7x and 12.5%, respectively (3-year
average). As of June 2024, cash interest coverage and FFO/debt of
2.6x and 12.7%, commensurate with a B1 scorecard indicated outcome
under Moody's methodology for Unregulated Utilities and Unregulated
Power Companies. Moody's projections for this period encompassed
interest coverage and FFO/debt of 3.4x and 16.7%, respectively.
The poor performance led IERL to preemptively negotiate a waiver
from syndicated loan bank lenders regarding a Debt / EBITDA
covenant that sets a limit of 5.15 times. The company was able to
meet the covenant in the second quarter of 2024, but would not be
able to meet it in the third and fourth quarters. Creditors allowed
a reset of this covenant at 6.0x through the end of 2024. Moody's
expectation is that the return to operations of the damaged unit of
Renace I power plant and of Renace II power plant along with better
hydrology conditions, will lead to a gradual improvement in
metrics.
IERL has adequate liquidity over the next 12 to 18 months. As of
June 2024, the company held a cash and equivalents balance of
approximately $40 million. The company does not face material debt
maturities, as the syndicated loan is amortizing around $16 million
per year, and the Notes are due only in 2029.
The negative outlook reflects Moody's view that IERL could face
downward rating pressure should the operating performance take
longer to recover, leading to increased financial burden arising
from additional covenant renegotiations or waiver fees in the next
6 to 12 months. Specifically, Moody's project cash interest
coverage ratio to remain around 3.0x and CFO pre-WC/debt 12%,
during 2024-26.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
Given the negative outlook, an upgrade of IERL's ratings in the
near term is unlikely. However, the outlook could be stabilized if
the company records cash interest coverage ratios above 3.0x and
FFO/debt above 12% on projected and sustained basis. A stable
outlook would also consider the track record of balanced dividend
distributions, allowing the company to gradually expand its
financial flexibility ahead of debt maturities.
Conversely, a sustained weak financial performance of IERL would
trigger a downgrade. If IERL's cash interest coverage ratios remain
below 2.5x or FFO/debt below 11% would also exert downward
pressure. High dividend distributions while performance is still
recovering from recent stresses could also indicate a more
aggressive financial policy standard from sponsors, which exert
downward pressure on the ratings.
PROFILE
Investment Energy Resources Limited (IERL) is the entity through
which Corporacion Multi Inversiones (CMI), a conglomerate with
operations in Central America and the Caribbean, owns the operating
assets of its energy business unit (CMI Energia).
IERL and its subsidiaries control a total of 763 megawatts (MW) of
installed capacity through five hydropower plants, eight wind
plants and four solar plants. These assets are located in
Government of Guatemala (Ba1 stable), Government of Honduras (B1
stable), Government of Costa Rica (Ba3 positive), Government of
Nicaragua (B2 stable) and the Government of Dominican Republic (Ba3
positive). In addition, IERL owns 50% of the equity in a joint
venture with The AES Corporation (Baa3 stable) (the Bósforo and
Cuscatlan Solar joint venture), which owns several solar plants
with a total of 110 MW of installed capacity in Government of El
Salvador (Caa1 stable), and a 49% stake in a joint venture with BAS
Corporation which owns the 55MW El Soco solar plant in the
Dominican Republic.
The principal methodology used in these ratings was Unregulated
Utilities and Unregulated Power Companies published in December
2023.
LIST OF AFFECTED RATINGS
Issuer: Investment Energy Resources Limited (IERL)
Affirmations:
LT Corporate Family Rating, Affirmed Ba3
Senior Secured, Affirmed Ba3
Outlook Actions:
Outlook, Changed To Negative From Stable
===========
B R A Z I L
===========
BANCO MASTER: Moody's Alters Outlook on B3 Deposit Rating to Pos.
-----------------------------------------------------------------
Moody's Ratings has affirmed Banco Master S.A.'s (Master) B3 and
Not Prime long- and short-term local and foreign currency deposit
ratings, as well as the B2 and Not Prime local- and
foreign-currency counterparty risk ratings, long- and short-term,
respectively. The bank's baseline credit assessment (BCA) and
adjusted BCA were also affirmed at b3, as well as its counterparty
risk assessments (CRAs) of B2(cr) and Not Prime(cr), long- and
short-term, respectively. The outlook on Master's long-term local
and foreign currency deposit ratings was changed to positive, from
stable.
RATINGS RATIONALE
The affirmation of Master's b3 BCA reflects a fast-growing
franchise that is focused on corporate and payroll lending
businesses. Between December 2019 and June 2024, Master grew its
lending portfolio by 86% on average per year, and its deposit base
went up by 60%, while maintaining capitalization and profitability
at adequate levels. Master has undergone an accelerated expansion
strategy both organically and inorganically, through the
acquisition of four institutions that has helped the bank to build
its own deposit franchise, which will continue to support business
growth. However, the bank continues to present important
concentrations in its loan portfolio, as well significant exposure
to credit-linked and equities held on its securities portfolio that
adds asset risk and opacity to its balance sheet structure.
In changing the outlook on the B3 deposit ratings to positive, from
stable, Moody's acknowledge recent improvements and ongoing efforts
to strengthen corporate governance that will help the bank to
enhance risk management discipline as it continues to growth its
credit and investment banking platforms.
Master's b3 BCA, however, still reflects the bank's accelerated
growth strategy and a balance sheet structure that remains
relatively opaque compared to other similar sized lenders in the
system. While problem loan ratio remained low at 0.5% as of June
2024, with corporate lending leading the credit expansion, the
ratio was helped by the high growth of the credit portfolio that
increased 81% in the last twelve months ended in June 2024.
Master still has a significant portion of its assets held in
government judicial bonds that showed a gradual reduction in volume
last year, but still represented 34% of total loans as of June
2024, down from 47% in December 2023 and 61% in 2022. In June 2024,
the top 20 credit exposures accounted for 219% of tangible common
equity (TCE), and government judicial bonds represented 175% of the
same metric.
Master's capital position, measured by Moody's ratio of tangible
common equity to adjusted risk weighted assets (RWA), stood at
9.4%, up from 8.2% one year prior. This ratio incorporates Moody's
adjustment to RWA, applying 100% risk-weigh to government
securities, including holdings of government judicial bonds, which
increases the bank's leverage and lowers its loss-absorption
capacity.
Over the 12 months ended in June 2024, Master has reported
increased expenses driven by the growing nature of its operation.
In June 2024, the bank posted net income to tangible assets of 0.3%
after adjusting for non-recurring gains related to Banco Voiter's
acquisition in 2023. This profitability ratio remained below the
level of 1.0% reported in the past five years. The decline in
profitability was driven by increased loans loss provisions, as the
bank reinforced its balance sheet after the incorporation of Banco
Voiter. Noteworthy, Master still relies on loan sales to support
positive bottom-line results. Looking forward, the bank's strategy
to grow into low-risk payroll loans will support recurring earnings
generation.
In affirming Master's b3 BCA, Moody's also take into account the
challenges related to the bank's liquidity profile and limited
funding diversification, both important to support its high growth
plans into corporate lending and long-tenor payroll loans. In June
2024, roughly 65% of Master's funding mix comprised customer
deposits, primarily through third-party broker platforms (95% in
2022). Additionally, a considerable portion of its liquidity
consists of credit-linked and equity investment funds, which are
less liquid than government securities. These funds accounted for
69% of the bank's liquid assets as of June 2024.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
Upward pressure on Master's BCA could result from significant and
sustainable generation of recurring earnings, while the bank is
able to reduce asset risk concentration. The bank's BCA could also
be affected positively if Master reports consistent growth of its
own deposit franchise and reduces its reliance on third party
brokers deposits, while enhancing its liquidity profile by
increasing liquid asset quality. Continued efforts to improve its
governance structure, compliance and risk management guidelines,
while building up on acquisition, could also lead to positive
pressure on the BCA and deposit ratings.
Conversely, Master's BCA could be downgraded if the bank reports a
consistent deterioration of its asset quality and profitability
metrics, which could also pressure its capital base negatively.
Further acquisitions would also delay the seasoning of its
franchise and the stabilization of its credit fundamentals .
The principal methodology used in these ratings was Banks
Methodology published in March 2024.
BRF SA: Moody's Hikes CFR to 'Ba2' & Alters Outlook to Stable
-------------------------------------------------------------
Moody's Ratings has upgraded BRF S.A.'s corporate family rating and
its senior unsecured notes to Ba2 from Ba3. The outlook changed to
stable from positive.
RATINGS RATIONALE
The upgrade to Ba2 reflects strong improvement in credit metrics,
supported by sound balance sheet and operational performance. The
improvement is based on reduction in absolute debt levels, which
will continue through 2H24; improvement in operating performance
from focus on internal efficiencies, a strategy which captured over
BRL 3 billion in gains in 2023-1H24 and support higher volumes and
improved mix of products; and positive market fundamentals, with
strong performance in all markets leading to consolidated EBITDA
margins at the highest levels since 2019. The recovery in
operational performance is supported by a combination of external
factors to the company, such as lower grain prices and higher
prices in Brazil and export markets, which help improve margins.
During 1H24, BRF obtained 57 new licenses to access new markets
such as the UK, US and southeast Asian countries.
Moreover, continued liability management strategies reduces
liquidity risk and increases the company's flexibility to continue
to focus on operational efficiencies and take advantage of more
favorable supply and demand fundamentals for poultry/pork markets.
Liquidity is enhanced by a strong liquidity position, with a cash
balance of BRL 11.5 billion at the end of June 2024, and BRL 1.5
billion fully available under committed credit facilities, which
covers debt amortizations through 2030, reducing refinancing risk.
BRF ratings remains supported by its strong business profile and
leadership in both processed foods in Brazil and global poultry
exports. The company's good liquidity and comfortable debt
amortization schedule also support the Ba2 ratings. Offsetting
these positive attributes are the relatively low geographic
diversity in terms of production footprint, as most of BRF's plants
and production facilities are in Brazil, and heavy concentration in
poultry, which makes the company strongly exposed to grain prices
and currency volatility, given the large share of exports in
revenues.
The stable outlook reflects Moody's expectation that BRF will be
able to continue to leverage its operations and benefit from its
strong position in its key markets, such as Brazil and Halal, in
the next 12 to 18 months, supported by lower financial leverage and
strong liquidity, maintaining positive free cash generation. The
stable outlook also incorporates Moody's assumption that BRF will
keep very good liquidity over the next 12-18 months and that the
company will maintain financial discipline in terms of capital
allocation related to its growth strategy and dividend payments.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
An upgrade would be considered if BRF is able to sustain operating
performance at healthy levels, with positive free cash flow
generation while maintaining financial discipline towards capital
allocation. An upward rating movement would require BRF to maintain
a strong liquidity position and further reduce leverage, with total
adjusted Debt/EBITDA sustained at 3x or lower, and interest
coverage, measured by EBITDA/interest expense sustained at 7x or
higher through the different protein cycles, in particular down
cycles. An upward consideration would also be dependent on the
relative positioning to the rating of Marfrig Global Foods S.A.
(Ba2 stable), which currently controls BRF through a share of
50.49% of the company's total capital. It is unlikely that BRF
would be positioned above Marfrig's rating.
A downgrade could result from a deterioration in BRF's operating
performance, with, for example, crop disruptions leading to higher
grain prices or a global oversupply of poultry and pork pressuring
margins, or disruption in production coming from bird flu. Weak
demand in key markets, such as Brazil and Halal, could also affect
profitability. A deterioration in liquidity position, with negative
free cash flow limiting the company's ability reduce leverage,
could also prompt a negative rating action. Quantitatively, a
downgrade could also occur if total adjusted debt/EBITDA increases
and stays above 3.5x on a sustained basis and RCF/net debt declines
and stays below 20% on a prolonged basis.
The principal methodology used in these ratings was Protein and
Agriculture published in August 2024.
BRF S.A. is one of the largest food companies globally and posted
consolidated net revenue of BRL56.5 billion ($11.3 billion,
considering average exchange rate) for the twelve months ended in
June 2024. BRF's business profile combines frozen products, in
natura proteins - mainly poultry and pork - margarines, cold cuts,
lunch meats, ingredients and animal feed, including a large
portfolio of value-added products. The company operates 44 plants,
103 distribution centers and two innovation centers in the world.
BRF also has a strong presence in the export markets, with a strong
focus on the Halal and Asian markets. BRF exports to more than 120
countries and has a leading position in global poultry exports.
Marfrig Global Foods S.A. currently owns 50.49% of BRF.
COMPANHIA SIDERURGICA: Moody's Alters Outlook on Ba2 CFR to Neg.
----------------------------------------------------------------
Moody's Ratings has affirmed Companhia Siderurgica Nacional (CSN)'s
Ba2 Corporate Family Rating, the Ba2 Backed Senior Unsecured Notes
ratings of CSN Resources S.A. and the Ba2 Backed Senior Unsecured
Notes rating of CSN Inova Ventures. The outlook for these issuers
was changed to negative from stable.
RATINGS RATIONALE
The change in CSN's rating outlook to negative reflects Moody's
expectations that the company's credit metrics will remain
pressured in the next 12-18 months because of weaker market
conditions in the steel and iron ore segments. CSN's adjusted
EBITDA decreased to BRL11.0 billion in the 12 months that ended
June 2024 from BRL11.5 billion in 2023, reflecting lower prices,
and the company's adjusted leverage increased to 4.7x from 4.0x
during the same period. Moody's expect CSN's adjusted leverage
ratio to remain within 4x-4.5x over the next 12-18 months based on
lower steel and iron ore prices, but to strengthen to 3x-3.5x over
time based on the price scenario of $80-$110 per ton for iron ore
(62% Fe) and normalized profitability on steel operations. However,
unless CSN is able to accelerate deleveraging through asset sales,
the company's credit metrics will be weak for its rating category
in the next 2 years.
CSN's Ba2 ratings reflect the company's position as a leading
manufacturer of flat-rolled steel in Brazil, with a favorable
product mix that is focused on value-added products, and as a major
producer of iron ore (the second-largest exporter in Brazil).
Historically, the company has reported a strong Moody's-adjusted
EBITDA margin of 20%-35% (25.1% in the 12 months that ended June
2024), supported by its solid domestic market position, wide range
of products across different segments and globally competitive
production costs for both steel and iron ore. CSN's ratings also
incorporate an improvement in the company's liquidity, driven by
several measures implemented over the past three years, and the
company's improved operating performance.
CSN's ratings are constrained by the company's track record of
aggressive financial policies, including a highly leveraged capital
structure, an appetite for growth and dividend requirements to
cover debt service at the parent level. Additional credit concerns
include CSN's exposure to the volatility in the steel business in
Brazil and iron ore prices, its concentration in a single
production site in the mining segment and potential overhangs
related to ongoing judicial disputes.
CSN has historically maintained a highly leveraged capital
structure. However, the company reduced its leverage rapidly in
2020 and 2021 because of a higher EBITDA stream coming from the
strong performance of the iron ore export business and
better-than-expected performance of steel in 2021. The company's
steel and iron ore operations are softening after the recent peak
performance but will remain adequate based on still
higher-than-historical price levels, despite weakness in the
Brazilian steel market coming from competition from imports. CSN
generated significant free cash flow (FCF) in 2022 and 2023, but
the company directed proceeds for acquisitions and dividend
payments. The acquisitions and dividend payments do not jeopardize
CSN's credit profile and liquidity substantially, considering the
significant buffer the company has built under credit metrics, but
it does highlight CSN's appetite for growth and its capital
allocation strategy, which does not prioritize debt reduction.
Accordingly, the company will still need to build a track record of
conservative financial management to improve its credit profile
further, either through the restoring of its cash position after
all acquisitions or through the acceleration of gross debt
reduction.
LIQUIDITY
CSN's cash position was BRL15.5 billion (BRL16.8 billion, including
Usinas Siderurgicas de Minas Gerais S.A.'s shares) at the end of
June 2024. The company's cash position increased as a result of the
FCF generated since mid-to-late 2020 and the company's
liquidity-enhancing initiatives, such as the BRL4 billion initial
public offering (IPO) of its mining subsidiary and the monetization
of BRL1.3 billion related to Usiminas' preferred shares. CSN's debt
amortization schedule also improved sustainably with liability
management initiatives that reduced debt costs and increased debt
tenors.
Moody's expect CSN to maintain a recurring cash position close to
BRL15 billion, and CSN has stated its target to maintain net
leverage below 2.5x, although the company will not comply with the
measure in 2024. Such milestones increase visibility into CSN's
ability to maintain solid credit metrics and liquidity while the
company continues to invest in growth and pursues merger and
acquisition (M&A) activities, namely the potential acquisition of
InterCement's assets, although the company still lacks a track
record of adhering to such targets.
RATING OUTLOOK
The negative outlook reflects Moody's expectation that CSN's credit
metrics will remain weak for its rating category in the next 12-18
months, but that the company will maintain a good liquidity and
pursue deleveraging initiatives.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
CSN's ratings could be downgraded if the company's performance over
the next 12-18 months does not improve, such that its leverage
remains above 4.0x and EBIT/interest remains below 2.5x on a
sustained basis. Evidence of more aggressive financial management,
such as large acquisitions or dividend distributions, or a
deterioration in the company's liquidity would also trigger a
rating downgrade.
CSN's ratings could be upgraded if the company exhibits
conservative financial management over an extended period, or
builds a track record of financial flexibility, either through a
strengthened cash position or a lower debt balance through
commodity cycles. An upgrade would also require total leverage
below 3.0x total adjusted debt/EBITDA and an interest coverage
ratio, measured as EBIT/interest expense, above 4.0x on a sustained
basis.
COMPANY PROFILE
With an annual capacity of 5.6 million tons of crude steel,
Companhia Siderurgica Nacional (CSN) is a vertically integrated,
low-cost producer of flat-rolled steel, including slabs, hot and
cold rolled steel, and a wide range of value-added steel products,
such as galvanized sheet and tin plates. In addition, the company
has downstream operations to produce customized products,
pre-painted steel and steel packaging. CSN sells its products to a
broad array of sectors and industries, including automotive,
capital goods, packaging, construction and home appliance. CSN owns
and operates cold rolling and galvanizing facilities in Portugal,
along with long steel assets in Germany, through its subsidiary
Stahlwerk Thüringen GmbH. The company also has a long steel line
(500,000 tons capacity) at the Volta Redonda plant. CSN is a major
producer of iron ore (the second-largest exporter in Brazil), with
a sales volume of 42.1 million tons in the 12 months that ended
June 2024. The company has operations in other segments, such as
cement, logistics, port terminals and power generation. CSN
reported revenue of BRL43.7 billion ($7.9 billion) in the 12 months
that ended June 2024, with an adjusted EBITDA margin of 25.1%.
The principal methodology used in these ratings was Steel published
in November 2021.
MOVIDA PARTICIPACOES: S&P Affirms 'BB-' National Scale Rating
-------------------------------------------------------------
S&P Global Ratings revised the management and governance (M&G)
modifier assessments to neutral from moderately negative on:
-- JSL S.A.,
-- Movida Participacoes S.A., and
-- Vamos Locacao de Caminhoes, Maquinas e Equipamentos S.A.
S&P said, "At the same time, we affirmed the global and national
scale ratings on JSL, Movida, and Vamos at 'BB-' and 'brAA+',
respectively, with a stable outlook. We also did not change the
existing issue-level ratings on the subsidiaries' debt, the
recovery rating on which remains 3 (65%).
"The M&G modifier revision on these three entities mirrors our
revision of the M&G modifier of their parent company, Simpar S.A."
The previous modifiers reflected the fact that the group's CEO and
indirect controlling shareholder, Mr. Fernando Antonio Simoes, was
implicated in alleged fraud in bidding for contracts, corruption,
and bribery. However, most of the cases against him have already
been ruled off, and some have been dismissed for lack of proof. The
amounts associated with the remaining lawsuits are immaterial, in
S&P's view.
Ratings Score Snapshot
VAMOS LOCACAO
DE CAMINHOES,
MOVIDA MAQUINAS E
PARTICIPACOES EQUIPAMENTOS
JSL S.A. S.A. S.A.
ISSUER CREDIT
RATING BB-/STABLE/-- BB-/STABLE/-- BB-/STABLE/--
NATIONAL SCALE
RATING BRAA+/STABLE/--BRAA+/STABLE/--BRAA+/STABLE/--
Business risk: Fair Fair Fair
Country risk Moderately Moderately Moderately high
High high
Industry risk Intermediate Intermediate Intermediate
Competitive
Position Fair Fair Fair
Financial risk: Aggressive Significant Significant
Cash flow/leverage Aggressive Significant Significant
Anchor bb- bb bb
Modifiers:
Diversification/
Portfolio effect Neutral Neutral Neutral
(no impact) (no impact) (no impact)
Capital structure Neutral Neutral Neutral
(no impact) (no impact) (no impact)
Financial policy Neutral Neutral Neutral
(no impact) (no impact) (no impact)
Liquidity Adequate Adequate Adequate
(no impact) (no impact) (no impact)
Management and Neutral Neutral Neutral
Governance (no impact) (no impact) (no impact)
Comparable rating
Analysis Neutral Negative Negative
(no impact) (-1 notch) (-1 notch)
Stand-alone credit
profile: bb- bb- bb-
Ratings List
RATINGS AFFIRMED
JSL S.A.
VAMOS LOCACAO DE CAMINHOES, MAQUINAS E EQUIPAMENTOS S.A.
MOVIDA PARTICIPACOES S.A.
Issuer Credit Rating BB-/Stable/--
Brazil National Scale brAA+/Stable/--
JSL S.A.
Senior Unsecured brAA+
Recovery Rating 3(65%)
MOVIDA PARTICIPACOES S.A.
Senior Unsecured brAA+
Recovery Rating 3(65%)
MOVIDA EUROPE
Senior Unsecured BB-
Recovery Rating 3(65%)
MOVIDA LOCACAO DE VEICULOS S.A.
Senior Unsecured brAA+
Recovery Rating 3(65%)
VAMOS LOCACAO DE CAMINHOES, MAQUINAS E EQUIPAMENTOS S.A.
Senior Unsecured brAA+
Recovery Rating 3(65%)
USIMINAS: Moody's Affirms 'Ba2' CFR, Outlook Stable
---------------------------------------------------
Moody's Ratings has affirmed Usinas Siderurgicas de Minas Gerais
S.A.'s ("Usiminas") Ba2 corporate family rating and the Ba2 rating
of the $750 million backed senior unsecured notes due 2026 issued
by Usiminas International S.a r.l. and fully and unconditionally
guaranteed by Usiminas. The outlook for the issuers is stable.
RATINGS RATIONALE
Usiminas' Ba2 ratings reflect the company's solid position in the
Brazilian flat-steel market and its track record of quickly
adjusting operations to market conditions in Brazil. The ratings
are also supported by Usiminas' good credit metrics and liquidity
through economic and commodity cycles, and its enhanced financial
flexibility to withstand the volatility in its main end markets.
Usiminas has been able to prevent cash burn and maintain covenant
compliance in the recent past, which reduces the potential
liquidity risks in tougher operating environments.
The ratings are mainly constrained by Usiminas' exposure to the
volatility of the automotive industry in Brazil because of its
concentration in flat-steel production in the country, and the
ongoing ramp-up related to the revamp of its main blast furnace in
2024. Although Usiminas' ability to downsize provides some
flexibility, its concentration of operations in two plants
introduces event risks and is an additional negative credit
consideration.
Usiminas' consolidated EBITDA decreased to BRL1.7 billion in the 12
months that ended June 2024 from BRL2.6 billion in 2023 as steel
prices in Brazil declined with tougher competition from imports.
The company's gross leverage ratio increased to 4.1x in the twelve
months ended June 2024, but net leverage ratios remained more
stable at 1x. Moody's expect Usiminas' operating performance to
recover with higher sales volumes, efficiency gains related to the
recent investments in its blast furnace and stable prices, which
will help reduce gross leverage to 3.1x-2.6x in the next 12-18
months. Overtime, Moody's expect Usiminas' leverage to remain
within a normalized range of 1.5x-3.5x through commodity cycles,
and its net leverage ratio will remain stable over time based on a
sustainably higher cash position.
LIQUIDITY
Usiminas has good liquidity, with a total cash position of BRL5.6
billion as of the end of June 2024, sufficient to cover its total
reported debt by 0.9x; a comfortable debt amortization schedule
with no debt maturities until 2026; and a significant buffer under
its financial covenants. About BRL3.4 billion in cash is available
at the parent level, with the remainder held primarily by the
mining subsidiary, MUSA. This cash is only accessible to Usiminas
via a dividend upstream, which requires approval from MUSA's
minority shareholder, Sumitomo Corporation (Baa1 stable). In
September 2024, Usiminas announced the issuance of at least BRL1.6
billion in debentures due in 5, 7 and 10 years, and will use the
proceeds to prepay part of the outstanding notes due 2026,
lengthening its debt amortization schedule further.
The company's normalized annual cash flow from operations is
sufficient to cover non-discretionary cash outflow such as
maintenance capital spending (around BRL800 million) and net
interest payments (about BRL200 million). In addition, the
company's dividend payments are usually capped at the minimum
required by Brazilian law (25% of net income). The company's total
capital spending will amount to BRL1.4-1.9 billion in 2024 and
Moody's expect the company to continue generating positive free
cash flow despite the recent weakness in the steel market, which
supports the company's credit quality during the downturn.
Usiminas' strong cash position and ability to quickly adjust
operations to market conditions show its commitment to a certain
degree of financial discipline. All these factors support Moody's
view that the company will continue to prevent cash burn, thereby
reducing liquidity and covenant breach risks. Moody's expect
Usiminas to maintain its conservative financial approach to
leverage and liquidity, matching any future potential expansion
investments (that is, investments at MUSA and new rolling lines)
with its internal cash generation, thus preserving its
creditworthiness.
RATING OUTLOOK
The stable rating outlook incorporates Moody's assumption that
Usiminas will maintain good liquidity and adequate credit metrics
over the next 12-18 months despite softening market conditions, and
that the company will maintain a disciplined approach to
liquidity.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
An upgrade of Usiminas' ratings would require further strengthening
of the company's capital structure through gross debt reduction or
an improvement in the business profile that would reduce Usiminas'
exposure to the volatility in the flat-steel market in Brazil.
Quantitatively, an upgrade would also require strong operating
performance and market fundamentals on a sustained basis, with
Moody's-adjusted leverage remaining below 2.5x, interest coverage
of at least 3.5x (EBIT/interest expense) and maintenance of strong
liquidity and cash flow, which will enhance the buffer to withstand
the volatility in its end markets.
The ratings would be downgraded if Usiminas' performance
deteriorates significantly with no prospects of improvement, with
leverage exceeding 4.0x, EBIT/interest declining below 2.0x,
liquidity contracting significantly or if market conditions
deteriorate.
COMPANY PROFILE
Headquartered in Belo Horizonte, Minas Gerais, Usinas Siderurgicas
de Minas Gerais S.A. (Usiminas) is the largest integrated
flat-steel manufacturer in Latin America. It has a production
capacity of 5 million tons of crude steel and sales capacity for
6.9 million tons of flat-rolled steel products. The company
reported consolidated net revenue of BRL26.1 billion ($5.2 billion)
for the 12 months that ended June 2024. Usiminas also owns iron ore
mining properties, as well as steel distribution and capital goods
subsidiaries in Brazil. In the 12 months that ended June 2024,
Usiminas produced 8.6 million tons of iron ore, of which 6.9
million tons were sold to third parties.
===========================
C A Y M A N I S L A N D S
===========================
AIRPORT PARKING: Voluntary Arrangement Vote Due by Oct. 2
---------------------------------------------------------
Airport Parking Rentals (Gatwick) Limited was placed into
administration proceedings in the High Court of Justice Business &
Property Courts of England and Wales.
The supervisors (conveners) of the company are seeking a decision
from creditors (including investors) by way of correspondence in
order to vary the terms of the Company Voluntary Arrangement.
A creditor's vote by correspondence must be received by no later
than Oct. 2, 2024 at 11:59 p.m. by email to
voting.parkfirst@evelyn.com
The joint supervisors can be reached out:
Finbarr Thomas O'Connell
Henry Stephens
Clare Lloyd
Christopher Marsden
Evelyn Partners LLP
45 Gresham, Street London
EC2V 7BG
Email: voting.parkfirst@evelyn.com
Tel No: +44(0)20 8146 7261
CAZOO GROUP: Taps Teneo (Cayman) as Liquidators
-----------------------------------------------
Cazoo Group Limited, which is in liquidation, disclosed that it
appointed Neema Griffin of Teneo (Cayman) Limited as liquidator.
The liquidator can be reached at:
Neema Griffin
Teneo (Cayman) Limited
Ground Floor, Harbour Place
103 South Church Street
PO Box 10245, George Town
Grand Cayman, KYI-1003
COPHALL PARKING: Voluntary Arrangement Vote Due by Oct. 2
---------------------------------------------------------
Cophall Parking Gatwick Ltd was placed into administration
proceedings in the High Court of Justice Business & Property Courts
of England and Wales.
The supervisors (conveners) of the company are seeking a decision
from creditors (including investors) by way of correspondence in
order to vary the terms of the Company Voluntary Arrangement.
A creditor's vote by correspondence must be received by no later
than Oct. 2, 2024 at 11:59 p.m. by email to
voting.parkfirst@evelyn.com
The joint supervisors can be reached out:
Finbarr Thomas O'Connell
Henry Stephens
Clare Lloyd
Christopher Marsden
Evelyn Partners LLP
45 Gresham, Street London
EC2V 7BG
Email: voting.parkfirst@evelyn.com
Tel No: +44(0)20-8146-7261
FAT PROJECTS: Creditors' Meeting Set for Oct. 8
-----------------------------------------------
Chris Kenney, joint liquidator for Fat Projects Acquisition,
disclosed that the company will hold a creditor's meetings on
Tuesday, Oct. 8, 2024 at 10:00 a.m. via teleconference.
The purpose of the meeting is to consider, and if thought fair,
approve:
(a) the basis and amount of the joint voluntary liquidators' and
joint official liquidators' fees and expenses;
(b) the liquidators' remuneration agreement;
(c) the liquidators' intention to see waiver of requirement to
establish a liquidation committee pursuant to CWR Order 9,
rule I; and
(d) the liquidators' intention to seek the dissolution fo the
company.
A copy of the form can be requested from the liquidator via email
to Eli Reback at ereback@alvarezanmarsal.com
Any creditor wishing to attend the meeting should send a notice of
their intention to do so, together with a completed proof of debt
form, to the contact email above by 5:00 p.m. on Oct. 4, 2024.
For inquiries contact:
Eli Reback
2nd Floor, Flagship Building
142 Seafarers Way
P.O. Box 2507
George Town, Grand Cayman
Cayman Islands, KY-1104
Email: ereback@alvarezanmarsal.com
GROUP FIRST: Voluntary Arrangement Vote Due by Oct. 2
-----------------------------------------------------
Group First Global Limited was placed into administration
proceedings in the High Court of Justice Business & Property Courts
of England and Wales.
The supervisors (conveners) of the company are seeking a decision
from creditors (including investors) by way of correspondence in
order to vary the terms of the Company Voluntary Arrangement.
A creditor's vote by correspondence must be received by no later
than Oct. 2, 2024 at 11:59 p.m. by email to
voting.parkfirst@evelyn.com
The joint supervisors can be reached out:
Finbarr Thomas O'Connell
Henry Stephens
Clare Lloyd
Christopher Marsden
Evelyn Partners LLP
45 Gresham, Street London
EC2V 7BG
Email: voting.parkfirst@evelyn.com
Tel No: +44(0)20-8146-7261
HELP-ME-PARK.COM LTD: Voluntary Arrangement Vote Due by Oct. 2
--------------------------------------------------------------
Help-Me-Park.com Limited was placed into administration proceedings
in the High Court of Justice Business & Property Courts of England
and Wales.
The supervisors (conveners) of the company are seeking a decision
from creditors (including investors) by way of correspondence in
order to vary the terms of the Company Voluntary Arrangement.
A creditor's vote by correspondence must be received by no later
than Oct. 2, 2024 at 11:59 p.m. by email to
voting.parkfirst@evelyn.com
The joint supervisors can be reached out:
Finbarr Thomas O'Connell
Henry Stephens
Clare Lloyd
Christopher Marsden
Evelyn Partners LLP
45 Gresham, Street London
EC2V 7BG
Email: voting.parkfirst@evelyn.com
Tel No: +44(0)20-8146-7261
LONDON LUTON: Voluntary Arrangement Vote Due by Oct. 2
------------------------------------------------------
London Luton Airport Parking Limited was placed into administration
proceedings in the High Court of Justice Business & Property Courts
of England and Wales.
The supervisors (conveners) of the company are seeking a decision
from creditors (including investors) by way of correspondence in
order to vary the terms of the Company Voluntary Arrangement.
A creditor's vote by correspondence must be received by no later
than Oct. 2, 2024 at 11:59 p.m. by email to
voting.parkfirst@evelyn.com
The joint supervisors can be reached out:
Finbarr Thomas O'Connell
Henry Stephens
Clare Lloyd
Christopher Marsden
Evelyn Partners LLP
45 Gresham, Street London
EC2V 7BG
Email: voting.parkfirst@evelyn.com
Tel No: +44(0)20 8146 7261
PARK FIRST GATWICK: Voluntary Arrangement Vote Due by Oct. 2
------------------------------------------------------------
Park First Gatwick Rentals Limited was placed into administration
proceedings in the High Court of Justice Business & Property Courts
of England and Wales.
The supervisors (conveners) of the company are seeking a decision
from creditors (including investors) by way of correspondence in
order to vary the terms of the Company Voluntary Arrangement.
A creditor's vote by correspondence must be received by no later
than Oct. 2, 2024 at 11:59 p.m. by email to
voting.parkfirst@evelyn.com
The joint supervisors can be reached out:
Finbarr Thomas O'Connell
Henry Stephens
Clare Lloyd
Christopher Marsden
Evelyn Partners LLP
45 Gresham, Street London
EC2V 7BG
Email: voting.parkfirst@evelyn.com
Tel No: +44(0)20 8146 7261
PARK FIRST GLASGOW: Voluntary Arrangement Vote Deadline Set Oct. 2
------------------------------------------------------------------
Park First Glasgow Rentals Limited was placed into administration
proceedings in the High Court of Justice Business & Property Courts
of England and Wales.
The supervisors (conveners) of the company are seeking a decision
from creditors (including investors) by way of correspondence in
order to vary the terms of the Company Voluntary Arrangement.
A creditor's vote by correspondence must be received by no later
than Oct. 2, 2024 at 11:59 p.m. by email to
voting.parkfirst@evelyn.com
The joint supervisors can be reached out:
Finbarr Thomas O'Connell
Henry Stephens
Clare Lloyd
Christopher Marsden
Evelyn Partners LLP
45 Gresham, Street London
EC2V 7BG
Email: voting.parkfirst@evelyn.com
Tel No: +44(0)20 8146 7261
PARK FIRST MGMT: Voluntary Arrangement Vote Due by Oct. 2
---------------------------------------------------------
Park First Management Limited was placed into administration
proceedings in the High Court of Justice Business & Property Courts
of England and Wales.
The supervisors (conveners) of the company are seeking a decision
from creditors (including investors) by way of correspondence in
order to vary the terms of the Company Voluntary Arrangement.
A creditor's vote by correspondence must be received by no later
than Oct. 2, 2024 at 11:59 p.m. by email to
voting.parkfirst@evelyn.com
The joint supervisors can be reached out:
Finbarr Thomas O'Connell
Henry Stephens
Clare Lloyd
Christopher Marsden
Evelyn Partners LLP
45 Gresham, Street London
EC2V 7BG
Email: voting.parkfirst@evelyn.com
Tel No: +44(0)20 8146 7261
PAYPARK LIMITED: Voluntary Arrangement Vote Due by Oct. 2
---------------------------------------------------------
Paypark Limited was placed into administration proceedings in the
High Court of Justice Business & Property Courts of England and
Wales.
The supervisors (conveners) of the company are seeking a decision
from creditors (including investors) by way of correspondence in
order to vary the terms of the Company Voluntary Arrangement.
A creditor's vote by correspondence must be received by no later
than Oct. 2, 2024 at 11:59 p.m. by email to
voting.parkfirst@evelyn.com
The joint supervisors can be reached out:
Finbarr Thomas O'Connell
Henry Stephens
Clare Lloyd
Christopher Marsden
Evelyn Partners LLP
45 Gresham, Street London
EC2V 7BG
Email: voting.parkfirst@evelyn.com
Tel No: +44(0)20 8146 7261
POINTGUARD VENTURES: Taps Kroll (Cayman) as Liquidator
------------------------------------------------------
PointGuard Ventures I LP, which is in liquidation, filed a petition
to the Grand Court of the Cayman Islands Financial Service
Division, to tap Mitchell Mansfield of Kroll (Cayman) Ltd appointed
as liquidator of the company.
The petition was presented by Suning International Limited, a
company incorporated under the laws of Hong Kong Special
Administrative Region.
The hearing of the petition will take place on Oct. 10, 2024 at
10:00 a.m. at the Law Courts, George Town, Grand Cayman.
The liquidators can be reached at:
Mitchell Mansfield
Kroll (Cayman) Ltd
3rd Floor,
90 North Church Street
George Town, Grand Cayman
KY1-1204
-- and --
Li Hang Chun (also known as Jonathan Li)
Kroll (HK) Ltd
Level 3, Three Pacific Place,
1 Queens Road East
Hong Kong
SABLE INT'L: Fitch Rates USD500MM Secured Notes Due 2032 'BB-'
--------------------------------------------------------------
Fitch Ratings has assigned a rating of 'BB-'/'RR4' to Sable
International Finance Limited's (SIFL) proposed USD500 million
senior secured notes issuance due 2032. The notes will be issued
out of SIFL an indirect subsidiary of Cable & Wireless
Communications Limited (CWC). The notes will be guaranteed on a
senior basis by C&W Senior Secured Parent Limited, as well as other
guarantors in the Cable & Wireless (C&W) corporate structure. The
proceeds from the notes will be used to partially redeem C&W's
existing senior secured and unsecured notes due in 2027.
The ratings reflect the company's leading market positions across
well-diversified operating geographies and service offerings,
underpinned by solid network competitiveness and leading
business-to-consumer (B2C) and business-to-business (B2B)
offerings.
Key Rating Drivers
Steady Net Leverage: Fitch forecasts C&W will maintain net leverage
in the 4.0x-4.5x range over the medium term. Moderate EBITDA margin
expansion and growth in broadband and B2B services should help the
company to delever organically at a gradual pace over the rating
horizon. Liberty Latin America (LLA) targets net leverage of around
3.5x at the group level, although investments or operating weakness
in core markets could temporarily push leverage metrics higher at
the subsidiary level. Fitch expects capital intensity to be around
10%-14% of sales, mainly due to network upgrades and, to a lesser
extent, network expansion.
Moderately Improving Operating Prospects: Fitch forecasts C&W's
EBITDA to expand above USD1.1 billion by 2025 from USD974 million
in 2023 mainly due to modest top-line growth, synergies from the
acquisition in Panama, and cost cutting efforts in C&W Caribbean.
The company's subsea cable business should continue to grow at
low-to-mid-single digits as data demand increases. Near-term
average revenue per user (ARPU) pressures in mobile are likely to
be offset by favorable growth in postpaid subscribers, while
residential fixed revenues are likely to continue growing at a
steady pace driven by opportunities for greater penetration in
fixed broadband.
Diversified Operator: The group's business diversification explains
the resilience of its revenue compared with other speculative-grade
issuers in the region, which generally have higher dependence on
mobile revenues that are less sticky than subscription fixed-line
and B2B service revenues. B2C mobile accounted for 28% of C&W's
FY23 revenue, while B2C fixed accounted for 25%, and B2B
represented the remaining 47%.
During the same period, businesses in the Caribbean and in Panama,
delivering both B2C and B2B services, generated about 55% and 20%
of EBITDA, respectively. The subsea cable business and, to lesser
extent, B2B offerings in Colombia and other Latin America countries
generated the remaining roughly 25% of consolidated EBITDA.
Strong Market Position: Strong market share in duopoly markets
reduces the risk of new entrants and allows C&W to maintain
relatively stable ARPUs. C&W has the No. 1 or 2 position in its
major markets, many of which are a duopoly between C&W and Digicel
in the Caribbean and Millicom (Tigo) in Panama. The risk of new
entrants in any given market is low given their relatively small
size. C&W's largest mobile market, Panama, has consolidated to a
two-player market after Digicel announced its exit from the market,
leaving only C&W and Tigo. This market has remained relatively
competitive despite consolidation. Although local legislation
requires three operators to participate in this market, the
economic prospects of a third operator in the near term are
questionable.
LLA Linkage: Fitch analyzes C&W on a standalone basis and also
monitors the parent's credit quality. The credit pools are legally
separate, but LLA has a history of moving cash around the group for
investments and acquisitions. LLA depends on upstream cash from
subsidiaries to service its debt. Deterioration of the financial
profile of one of the credit pools, or the group more broadly,
could potentially place more financial burdens on C&W.
Instrument Ratings and Recovery Prospects: The secured debt at
Sable International Finance Limited is secured by equity pledges in
the various subsidiaries. Per Fitch's Corporates Recovery Ratings
and Instrument Ratings Criteria, Category 2 secured debt can be
notched up to 'RR2'/'+2' from the Issuer Default Rating (IDR).
However, the instrument ratings have been capped at 'RR4' due to
Fitch's Country-Specific Treatment of Recovery Ratings Criteria.
The C&W Senior Finance Limited unsecured notes are rated
'BB-'/'RR4', which is the same as the IDR.
Derivation Summary
Compared with its sister entity, Liberty Communications of Puerto
Rico LLC (LCPR; BB-/Negative), C&W has larger scale and better
geographical diversification, although C&W also operates in weaker
operating environments. LCPR's Outlook is Negative due to
expectations that net leverage could remain above 5.0x.
C&W operates in slightly more balanced markets compared with
Millicom International Cellular S.A.'s (BB+/Stable) subsidiaries CT
Trust (Comcel; BB+/Stable) and Telefonica Celular del Paraguay
S.A.E. (Telecel; BB+/Stable), which have more dominant market
positions and significantly lower net leverage.
Millicom's consolidated net leverage, at around 3x, is lower than
LLA's at around 4.7x. Comcel's and Telecel's respective ratings
reflect strong linkage with their parent, as Millicom heavily
relies on these wholly owned subsidiaries' dividend upstreams to
service its debt. Millicom's subsidiary in Panama and key
competitor to C&W, Telecomunicaciones Digitales, S.A. (BB+/Stable),
has somewhat weaker scale and diversification relative to C&W but
benefits from a stronger financial profile while its ratings
reflect strong linkages with Millicom, similar to its sister
companies.
Key Assumptions
- B2B revenues growing low-to-mid-single digits;
- Net fixed customer additions of approximately 25,000 per year;
- Fixed-line customer ARPUs of around USD47/month;
- Mobile subscribers recovering modestly in 2024 as continued
strong growth in postpaid offsets slowing growth in prepaid;
- Mobile service ARPUs of around USD13/month;
- Fitch-defined EBITDA margins expanding to around 43% by 2026 from
38% in 2023, driven by the benefit of synergies, cost-savings
initiatives, and modest operating leverage;
- Capital intensity of around 13%-14% over the medium term;
- Excess cash flow returned to shareholders or kept for
acquisitions or investments.
RATING SENSITIVITIES
Factors that Could, Individually or Collectively, Lead to Positive
Rating Action/Upgrade
- Fitch does not anticipate an upgrade in the near term given C&W's
and LLA's leverage profiles;
- Longer-term positive actions are possible if debt/EBITDA and net
debt/EBITDA are sustained below 4.25x and 4.0x, respectively, for
C&W and LLA;
- (CFO-Capex)/Debt ratio trending towards 7.5%.
Factors that Could, Individually or Collectively, Lead to Negative
Rating Action/Downgrade
- Total debt/EBITDA and net debt/EBITDA at C&W sustained above
5.25x and 5.00x, respectively, due to organic cash flow
deterioration or M&A
- While the three credit pools are legally separate, LLA net
debt/EBITDA sustained above 5.0x could result in negative rating
actions for one or more rated entities in the group.
Liquidity and Debt Structure
Sound Liquidity: Projected pre-dividend FCF averaging around USD200
million over the rating horizon, cash of around USD200
million-USD300 million and a long-dated maturity profile support
the company's financial flexibility. As of June 30, 2024, C&W had
USD556 million availability under the C&W revolver and USD65
million under regional facilities that are committed and undrawn.
The majority of C&W's debt is due after 2027.
Issuer Profile
Cable & Wireless Communications Limited is a U.K.-domiciled
telecommunications provider that is owned by LLA, a
Bermuda-domiciled entity. The company provides B2C mobile, B2C
fixed and B2B services to customers mainly in the Caribbean and
Panama. CWC also operates a subsea and terrestrial fiber optic
cable network that connects approximately 40 markets in the
region.
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 Recovery
----------- ------ --------
Sable International
Finance Limited
senior secured LT BB- New Rating RR4
SABLE INT'L: Moody's Rates New $500MM Secured Notes Due 2032 'Ba3'
------------------------------------------------------------------
Moody's Ratings has assigned a Ba3 rating to Sable International
Finance Limited (SIFL)'s, an indirect subsidiary of Cable &
Wireless Communications Limited (C&W, Ba3 negative), proposed $500
million backed senior secured notes due 2032 and guaranteed by C&W
Senior Secured Parent Limited, Sable Holding Limited, CWIGroup
Limited, Coral-US Co-Borrower LLC, Cable and Wireless (West Indies)
Limited, and Columbus International Inc. C&W's existing ratings
remain unchanged. The outlook is negative.
The issuance is part of C&W's liability management with the
objective of extending the company's debt maturity profile. The new
issuance will not affect the company's leverage metrics since 100%
of the proceeds will be used to partially redeem SIFL's $495m
senior secured notes due 2027, partially redeem C&W Senior Finance
Limited's $1,220 Senior Notes due 2027 and pay transaction-related
premium, fees and expenses. C&W's secured debt will represent 79.7%
of the company's secured capital structure.
The new notes will rank pari passu with all other senior secured
and unsubordinated debt obligations of SIFL and ahead the remaining
of the senior unsecured notes due 2027 issued by C&W Senior Finance
Limited, rated B2. The B2 rating on the senior unsecured notes
reflects their positioning in the waterfall behind the $2.6 billion
in secured debt, including Coral-US's term loans B-5, B-6, and the
senior secured notes at SIFL, all of them rated Ba3. The senior
secured debt benefits from the guarantees of SIFL, C&W Senior
Secured Parent Limited, Sable Holding Limited, CWIGroup Limited,
Coral-US Co-Borrower LLC (Ba3 negative), Cable and Wireless (West
Indies) Limited, and Columbus International Inc., and share pledges
of all the guarantors and issuer as collateral and security
interests over shareholder loans; while the unsecured debt benefits
from a collateral that comprises the capital stock of the notes'
issuer.
The rating of the notes assumes that the final transaction
documents will not be materially different from draft legal
documentation reviewed by us to date and that these agreements are
legally valid, binding and enforceable.
RATINGS RATIONALE
C&W's Ba3 corporate family rating (CFR) reflects its integrated
business model and leading market positions throughout the
Caribbean and Panama, which drive strong profitability. The
company's strong liquidity also supports the CFR. Conversely, the
rating is constrained by the company's large exposure to emerging
economies and its tolerance to high leverage.
C&W's Moody's-adjusted leverage has been consistently above 5x
since 2020. It gradually declined to 4.7x as of June 31, 2024,
which is still high for the Ba3 rating category. Moody's expect the
company to improve leverage in the next twelve months on EBITDA
improvements, mainly driven by average revenue per user (ARPU) and
subscriber growth in fixed, and cost reduction initiatives in C&W's
Caribbean business; postpaid growth; and full synergy benefits and
the lack of integration costs following market consolidation in
Panama. These initiatives should sustain and even improve the
EBITDA margin above 40%, helping reduce leverage in line with LLA's
public guidance of 3.5x net leverage at the consolidated level,
from 4.9x as of June 2024. Because C&W represents 59% of LLA's debt
and 66% of its EBITDA as of the same date, C&W's leverage must
improve to reach LLA's public target.
The company's strong profitability is supported by its leading
market positions in markets with 2 or 3 players, and its solid
performance in the B2B segment and the rest of the markets in the
Caribbean.
Moody's expect C&W's liquidity to be solid, supported by about $466
million in cash as of June 2024 supported by positive cash
generation before dividends. Furthermore, the company has access to
$636 million in revolving credit facilities. C&W does not face any
large debt maturity before 2027, which upon the completion of the
proposed issuance will be reduced to $1.2 billion from $1.7
billion.
The company's negative outlook reflects C&W's persistently high
Moody's-adjusted leverage at 4.7x for the 12 months that ended June
2024 and Moody's view that it will remain above 4x in the next
12-18 months.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATING
A rating upgrade could be considered if leverage (Moody's-adjusted
debt/EBITDA) is comfortably sustained below 3.5x on a consolidated
basis; Moody's-adjusted EBITDA margin of at least 40%; and sound
positive free cash flow generation (FCF), all on a sustained
basis.
Quantitatively, a downgrade could occur if Moody's-adjusted
leverage is sustained above 4.5x by FYE 2024 or above 4.0x by 2025,
its EBITDA margin declines toward 35% on a sustained basis. C&W's
rating could be downgraded if its liquidity position weakens
significantly due to a large cash distribution to its parent
company in a way that it jeopardizes the company's liquidity or
requires additional debt.
The principal methodology used in this rating was
Telecommunications Service Providers published in November 2023.
C&W is a subsidiary of Liberty Latin America Ltd (LLA). The company
is an integrated telecommunications provider offering mobile,
broadband, video, fixed-line, business, IT and wholesale services
in Panama, Jamaica, the Bahamas, Trinidad and Tobago, Barbados and
other markets in the Caribbean and Central America. For the 12
months that ended June 31, 2024, the company generated revenue of
$2.6 billion. As of the same date, C&W served 2.4 million revenue
generating units (RGUs) through its fixed network, which passes 2.7
million homes. The company also serves 3.9 million mobile
subscribers.
Following the acquisition of Claro Panama (a subsidiary of America
Movil, S.A.B de C.V. [Baa1 stable]) in July 2022, Panama remains
C&W´s highest revenue-generating market, with a share of 30% of
revenue for the 12 months that ended June 2024.
SABLE INT'L: S&P Rates New $500MM Secured Notes Due 2032 'BB-'
--------------------------------------------------------------
S&P Global Ratings assigned its 'BB-' issue-level rating to Sable
International Finance Ltd.'s new senior secured notes for $500
million due 2032. Sable is a subsidiary of Cable & Wireless
Communications Ltd. (CWC; BB-/Stable/B).
S&P views the transaction to be leverage neutral, given that CWC
will use proceeds to partially redeem Sable's $495 million senior
notes due 2027, and C&W Senior Finance Ltd.'s $1.22 billion senior
notes due 2027, as well as to pay premiums and fees in connection
with the transaction.
The new senior secured notes will have the same incurrence
covenants as CWC's existing debt, calculated on a proportionate
basis, which require a maximum net leverage ratio of 5.0x and a
maximum senior secured net leverage ratio of 4.0x.
On a pro forma basis, the refinancing won't affect CWC's current
debt capital structure in terms of notching. C&W Senior Finance's
senior notes due 2027 will remain structurally subordinated to the
obligations of Sable and fellow CWC subsidiary Coral-US Co-Borrower
LLC.
S&P said, "We believe this transaction aligns with the company's
debt refinancing strategy and will extend CWC's debt maturity
profile to 4.2 years from 3.6 years.
"Our ratings on CWC continue to reflect its incumbent position in
Jamaica and solid results in Panama, as well as its continued
strong performance in its postpaid mobile and business-to-business
segments. They also reflect the company's strong EBITDA margins and
decreasing leverage. The company had a S&P Global Ratings-adjusted
net debt to EBITDA ratio of 4.9x as of June 30, 2024, and we expect
it to approach low 4.0x by the end of 2025."
===================
C O S T A R I C A
===================
BANCO DE COSTA RICA: Moody's Hikes Bank Deposit Ratings to 'Ba3'
----------------------------------------------------------------
Moody's Ratings upgraded certain ratings and assessments assigned
to Banco Nacional de Costa Rica (BNCR) and Banco de Costa Rica
(BCR), including their long-term local and foreign currency bank
deposits ratings to Ba3, from B1, as well as the long-term
counterparty risk ratings to Ba2, from Ba3, both in local and
foreign currencies. These banks' baseline credit assessment (BCA)
and adjusted BCAs were also upgraded to ba3, from b1, and their
long-term Counterparty Risk Assessments (CRA) upgraded to Ba2(cr),
from Ba3(cr). The short-term bank deposits ratings and short-term
counterparty risk ratings, both in local and foreign currencies,
were affirmed at Not Prime, as well as the short-term CRAs, were
affirmed at NP(cr). The outlook for both banks' long-term deposit
ratings remained positive.
In the same rating action, all ratings and assessments assigned to
Banco Internacional de Costa Rica, S.A. (BICSA) were affirmed,
including the Ba3/NP long- and short-term foreign currency bank
deposits ratings, Ba2/NP long- and short-term Counterparty Risk
Rating, and its Ba2(cr)/NP(cr) long- and short-term CRA,
respectively. Moody's also affirmed the bank's ba3 BCA and Adjusted
BCA. The outlook on BICSA's long-term deposit ratings was changed
to positive, from stable, in line with positive outlook on its
parent banks, BCR and BNCR.
The action follows the upgrade of the Government of Costa Rica's
sovereign bond rating to Ba3, from B1, and the decision to maintain
the positive outlook.
The sovereign action reflects Costa Rica's strengthened fiscal
profile that is benefitting from a marked improvement in debt
affordability as a result of stronger debt management capabilities
and lower borrowing costs, and a rapid reduction in government debt
ratios due to auspicious economic growth that has exceeded Moody's
projections. Fiscal liquidity has also improved as treasury
deposits have remained at consistently higher levels than in the
past, providing a fiscal buffer against shocks.
A List of Affected Credit Ratings is available at
https://urlcurt.com/u?l=8a1jjM
RATINGS RATIONALE
UPGRADE OF RATINGS AND ASSESSMENTS ASSIGNED TO BNCR AND BCR
The upgrade of BNCR and BCR's BCAs to ba3, from b1, acknowledges
these banks' well-established banking franchises that provide them
large and stable core-funding base, primarily made of retail and
public-sector deposits, a condition linked to their government
ownership. This strength has resulted in a low reliance on market
funds, standing at 6.1% of tangible banking assets for BNCR and
12.2% for BCR as of June 2024. Both BNCR and BCR maintain ample
liquidity buffers, amounting to 35% and 36% of tangible banking
assets, respectively, in June 2024, predominantly held in sovereign
securities.
The ba3 BCAs also reflect these banks' broadly stable asset risk
metrics, supported by the strong economic activity in Costa Rica,
and easing monetary policy that has been supporting the expansion
of credit market in the country. Both BCR and BNCR have benefited
from a diversified loan portfolio and a relatively low proportion
of loans denominated in USD at these banks, approximately 22% of
total loans, compared to about 65% for privately owned banks in
June 2024. Problem loans have been manageable with BNCR reporting
2.2% of total loans, and BCR 2.6% as of June 2024, compared to 1.8%
at the system level in the period. In both cases, loan loss reserve
coverage ratio remained adequate at 133% and 174% of problem loans,
respectively in June 2024.
Historically, these public banks have exhibited lower profitability
levels in comparison to private banks in Costa Rica. As of June
2024, the net income to tangible assets ratio was 0.6% for BNCR and
0.8% for BCR. This subdued profitability results from their focus
on lower-yielding asset classes, significant mandatory
contributions to government entities that are deducted from
earnings, and weak efficiency ratios.
Capitalization remained adequate when Moody's consider Moody's
preferred capital measures of tangible common equity to risk
weighted assets (TCE ratio). In June 2024, BNCR reported a TCE
ratio of 10.3% and BCR 10.9%, which in both instances, remained
below the median for banks with a BCA of ba3, but have been
adequate to support the expansion of the portfolio over the past 3
years.
The Ba3 deposit ratings assigned to both BNCR and BCR are aligned
with Costa Rica's government bond rating of Ba3 and consider these
banks as government-related entities, given their full ownership by
the Government of Costa Rica that also provides a guarantee to
both their obligations. This alignment also takes into account
these banks' public policy mandates, and the importance of their
deposit and loan franchises within the Costa Rican financial
system.
AFFIRMATION OF BICSA'S RATINGS AND ASSESSMENTS, OUTLOOK CHANGED TO
POSITIVE
The outlook on BICSA's Ba3 long-term deposit ratings was changed to
positive, from stable, in line with positive outlook on its parent
banks, BCR and BNCR. This alignment acknowledges the high
probability of affiliate support that, in Moody's view, would be
provided to the bank in Panama from its controlling parent BCR, in
case of stress.
In affirming BICSA's BCA at ba3, Moody's continue to highlight the
bank's profit improvement in profitability over the past 18 months
resulted from the increased earnings generation capacity as a
result of increased interest income, rising non-interest income and
significant efforts to contained operating costs. The bank' net
income more than doubled to 0.8% of tangible assets in June 2024,
from 0.3% reported in December 2022. BICSA's capitalization
remained strong with a tangible common equity to adjusted
risk-weighted assets ratio of 15% as of June 2024 that will
continue to provide room for the bank's expansion in the highly
competitive trade financing segment in Central America.
However, the bank's BCA is constrained by BICSA's limited business
diversification, and it has reported some volatility in asset
quality metrics in the last two quarters. This has been evidenced
by the marked transition of single-name corporate loan exposure
from Stage 2 to Stage 3 in the first six months of 2024, a 64%
increase to 3.5% of total gross loans by June 2024, significantly
up from 2.2% in December 2023 Additionally, roughly 40% of BICSA's
funding base is concentrated in market funds as of June 2024, which
exposes the bank to global volatility. However, Moody's acknowledge
that most of its loans are short-term trade finance operations,
which help to mitigate this risk.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
BNCR and BCR
Both banks' BCAs and ratings would be upgraded if Costa Rica's
sovereign bond rating was to be upgraded considering Moody's
assessment of full public support for BNCR and BCR.
Conversely, these banks' standalone BCAs could face downward
pressure in case of sustained deterioration in their financial
fundamentals, including asset quality, profitability, or capital,
that could arise from accelerated growth strategies that would lead
to adverse selection. However, if the banks' BCA were downgraded
without a preceding downgrade of the sovereign rating, their
deposit ratings could be maintained due to Moody's assessment of
full support to the government-owned banks.
BICSA
BICSA's deposit ratings would face upward pressure if its
shareholder BCR and BNCR's BCAs are upgraded.
At the same, upward pressure on its standalone BCA of ba3 could be
upgraded if profitability and asset quality fundamentals continue
to improve, coupled with a stable capitalization and an improvement
in funding structure.
Conversely, while a downgrade on the bank's BCA and ratings are
unlikely at this point given the positive outlook, negative
pressures would accumulate if the bank's asset quality deteriorates
materially and unexpectedly from current levels, and earnings
reverse its positive trend, with pressures coming from sudden
increase in loan loss provisioning expenses.
===================================
D O M I N I C A N R E P U B L I C
===================================
[*] DOMINICAN REPUBLIC: Seeks to Strengthen Energy Transition
-------------------------------------------------------------
Dominican Today reports that the executive director of the National
Energy Commission (CNE), Edward Veras, announced during Energyear
Caribe 2024 that the CNE's board of directors approved the
modification of Resolution CNE-AD-0004-2023, which raises the
storage requirements for renewable energy projects. The new
regulation, officially issued after completing administrative
steps, will require projects of more than 20 megawatts to include
at least 50% battery storage capacity, according to Dominican
Today.
Veras stressed that energy storage is now a critical public policy,
supported by President Luis Abinader, who considers this measure
essential to ensure the success of the country's energy transition,
the report notes.
Likewise, the private sector's response has been very positive, the
report relays. 80% of the concessions granted already include
storage systems, demonstrating developers' commitment to this
regulation, the report notes. "Storage is crucial to integrate
more renewable energies efficiently and maintain the stability of
the electricity system," Veras added.
The director also highlighted that in 2023, the CNE granted
unprecedented concessions for renewable projects, reflecting the
growing interest in the sector and the confidence that local and
international investors have placed in the Dominican market, the
report discloses. "This record number of concessions not only
increases generation capacity but also ensures the viability and
security of the projects for investors," he said, the report
relays.
Veras attributed these achievements to the country's political and
economic stability, which has been vital in attracting investments
and generating confidence in the energy market, especially in the
spot market, which is considered a safe and attractive environment
for developers, the report says. "Our spot market is a benchmark
in the region, allowing projects to be financed without the need
for PPA contracts, something unusual in other international
markets," he explained, the report notes.
The official also highlighted the collaboration between the public
and private sectors as essential factors in advancing the energy
transition, the report says. "Government institutions are aligned
and working in a coordinated manner to facilitate this transition,"
he added.
Regarding the financial challenges, Veras pointed out that to reach
the 30% renewable energy goal by 2030, at least US$5.4 billion in
investments will be needed. To this end, he proposed creating a
pool of energy projects to attract financing on a larger scale, the
report notes. In addition, he stressed the importance of
maintaining a clear and efficient regulatory framework to continue
generating confidence among investors, the report discloses.
"The challenge is financial, not technical. To meet our goals, we
must mobilize the necessary capital, and this will only be possible
with the collaboration of all the actors in the sector," he said,
the report says.
Finally, Veras emphasized that energy planning has been essential
to consolidate the Dominican Republic as a leader in the transition
to renewable energies, the report relays. "Our energy plan has
given investors the necessary confidence to see the country as a
safe destination for their projects, which has allowed us to move
towards a cleaner and more efficient energy matrix," he concluded,
the report says.
The executive director of the CNE addressed these issues during the
opening of the second day of Energyear Caribe in an #OnetoOne
entitled "Continuing Energy Planning: New Challenges," moderated by
Catalina Barrera, editor-in-chief of Review Energy, 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: Trade Deficit Lower For First Five Months of 2024
----------------------------------------------------------
Javaughn Keyes at RJR News reports that Jamaica's trade deficit was
lower for the first five months of 2024.
The Statistical Institute of Jamaica has released the data as part
of its international merchandise trade bulletin, according to RJR
News.
The difference between the sum earned from exports and what is
spent on imports in Jamaica was US$2.23 billion, the report notes.
This was down from the $2.26 billion trade deficit for January to
May 2023, the report relays.
Looking at imports, Jamaica's total spend was down by 2.4 per cent,
coming in at US$3.1 billion, the report discloses.
For the same period last year, the country spent US$3.13 billion,
the report notes.
STATIN says this decrease was largely due to a 14 per cent fall in
"Raw Materials/Intermediate Goods" imports, the report says.
The spend on "Fuels and Lubricant" products coming into the country
was down 8.2 per cent, the report discloses.
Meanwhile, earnings from total exports were valued at US$823.9
million, the report notes.
This was 5.4 per cent below the US$870.6 million earned in the
similar 2023 period, the report relays.
The performance was driven by a 57.7 per cent fall in the value of
re-exports in the category "Mineral Fuels," the report says.
However, domestic exports rose by 10.7 per cent to US$715 million
over the five-month period, the report notes.
STATIN says this was due to a 2.3 per cent increase in exports from
the Manufacturing industry, and a 26.8 per cent increase in exports
from the Mining and Quarrying industry, 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.
===========
M E X I C O
===========
CYDSA SAB: S&P Affirms 'BB/B' ICRs & Alters Outlook to Stable
-------------------------------------------------------------
S&P Global Ratings, on Sept. 24, 2024, revised its outlook on
Mexican salt, chlorine, caustic-soda, chemicals, and refrigerant
gases producer Cydsa S.A.B. de C.V. to stable from positive and
affirmed its 'BB/B' global scale issuer credit ratings on the
company.
At the same time, S&P affirmed its 'BB' issue-level rating on
Cydsa's senior unsecured notes and its '3' recovery rating,
indicating its expectation of a meaningful recovery (average 65%)
in the event of a payment default.
The stable outlook reflects S&P's view that Cydsa will maintain
consistent consolidated adjusted leverage for the next 12 to 18
months, as market prices for chlorine and caustic soda recover and
the company increases production rates from the added installed
capacity.
Cydsa will now take longer than we previously expected to improve
its adjusted debt to EBITDA to a level commensurate with a higher
rating, because the current low prices have impaired revenue and
EBITDA growth.
S&P said, "It will take longer than we expected for Cydsa to
improve adjusted debt to EBITDA while the industry’s low-price
cycle and the weaker Mexican peso (MXN) continue.For the last 18
months, the chemical and petrochemical industry has reflected the
negative impacts from Asia’s oversupply and high inventory
levels, leading to weaker prices across all regions. In addition,
the Mexican peso depreciated in the first half of 2024 to MXN18.25
per $1 from MXN17.13 per $1. These conditions have delayed growth
in the company’s revenue and EBITDA for 2024, compared to our
previous forecast. As a result, we no longer expect the company to
achieve leverage metrics commensurate with a 'BB+' rating and rated
peers in the next 12 months. We currently forecast consolidated
adjusted debt to EBITDA ratios of 2.8x for 2024 (versus 2.0x
previously) and EBITDA interest coverage of 3.1x (versus 5.9x
previously).
"The company will further reduce its exposure to foreign exchange
rate volatility as it transitions to local currency debt.In the six
months ended June 30, 2024, Cydsa reduced its exposure to U.S.
dollar-denominated debt to 51% from 65% as of year-end 2023, by
executing a cash tender offer on its 6.25% senior unsecured notes
due 2027 and exchanging this debt for local currency bank loans. We
think Cydsa intends to reduce volatility in its leverage metrics as
the depreciation of the Mexican peso against the dollar tends to
have a negative effect on the company's debt.
"Nonetheless, Cydsa has active foreign exchange hedges on the full
amount of its bond, but the remaining exposure to
dollar-denominated debt has increased gross debt 7% as the peso
depreciated in the first half of 2024. We expect the company will
continue reducing its debt exposure through active liability
management as refinancing opportunities come up.
"We now view Cydsa's capital structure as more exposed to floating
interest rates.The transition to local currency debt came with an
exposure to floating rates since all the bank loans that
substituted the fixed rated bond have variable rates. The company
substituted a 6.25% fixed rate for TIIE (about 10.5%) plus 100-150
basis points, which increases our assumed interest expense in 2024.
Even though there is a partial hedge on floating rates (19% of
total debt), the company doesn't expect to hedge additional amounts
since the Bank of Mexico and the Federal Reserve have recently
announced decreases in rates. In the six months ended June 30,
2024, Cydsa's interest expenses increased in about MXN230 million
to total MXN590 million. This weakened the company’s EBITDA
interest coverage to about 3.5x from the 5.9x we expected in our
base-case scenario last year.
"We believe Cydsa will remain resilient against challenging
industry conditions.Cydsa has historically maintained stable EBITDA
generation and margins. It continues to demonstrate active cost
optimization to secure positive results, for example its lower
production costs following its transition to membrane plants,
higher levels of autogenerated energy, and its lower packaging
expenses. Moreover, Cydsa managed to compensate for the drop in
prices by initiating operations at its new facility in Veracruz,
increasing production volumes. In addition, since the company
concluded its facility expansions earlier this year, we expect
lower capital expenditures (capex) for the next 12 months.
"In our opinion, stable EBITDA and lower capex will allow for low
but positive cash generation through the pressured industry cycle
in 2024, but not enough to improve leverage and lead to an upgrade
in the next 12 months. Our forecast metrics for the next three
years will remain consistent with our current view of its financial
risk profile, with debt to EBITDA of 2.4x, EBITDA interest coverage
of 4.3x, and free operating cash flow (FOCF) to debt of 8.0%.
"The stable outlook indicates our view that Cydsa will remain
resilient against pressured industry conditions in its chlorine and
caustic soda segment, mitigated by the rest of its businesses. We
expect this resilience will drive revenue growth and stable EBITDA
for the next 12 to 18 months, while chemical prices recover and the
company takes advantage of higher volume from increased capacity.
"Moreover, we now assume positive FOCF after capex as the company
successfully completed its expansion plans and we do not consider
it will make additional investments for now. These factors will
allow for weighted average consolidated adjusted debt to EBITDA of
about 2.5x, EBITDA interest coverage close to 4.0x, and FOCF to
debt of about 8%.
"We could lower the ratings on Cydsa in the next 12 to 18 months if
consolidated adjusted leverage metrics weaken, with consolidated
adjusted debt to EBITDA above 3.0x, EBITDA interest coverage below
3.0x, and FOCF to debt remaining negative, and/or we see a
pressured liquidity position." This could occur if:
-- Chemical prices do not recover as expected, weakening revenue
growth;
-- Exposure to foreign exchange rates and floating interest rates
hurt Cydsa's capital structure and weaken leverage;
-- Capex is higher than we expect while cash generation is
pressured; or
-- A deterioration in the rest of the company’s business
segments doesn't offset revenue or EBITDA generation.
S&P said, "We could raise the ratings on Cydsa in the next 12 to 18
months if consolidated adjusted leverage metrics surpass our
expectations, with debt to EBITDA below 2.0x, EBITDA interest
coverage above 6.0x, and positive FOCF. This could mainly occur
from a faster-than-expected recovery in its chlorine-caustic soda
business segment, while cost optimization and liquidity headroom
continue."
===============
X X X X X X X X
===============
[*] BOND PRICING COLUMN: For the Week Sept. 23 to Sept 27, 2024
---------------------------------------------------------------
Issuer Name Cpn Price Maturity Cntry Curr
---------- --- ----- -------- ----- ----
2W Ecobank SA 10.6 28.1 11/24/2029 BR BRL
ACEN Finance 4 64 KY USD
Aeropuerto Tocumen 5.1 70.1 8/11/2061 PA USD
Aeropuerto Tocumen 4 70.3 8/11/2041 PA USD
Aeropuerto Tocumen 5.1 70.3 8/11/2061 PA USD
Aeropuerto Tocumen 4 71.7 8/11/2041 PA USD
AES Tiete Energia SA 6.8 0.7 4/15/2024 BR BRL
Agile Group Holdings 5.8 16.4 1/2/2025 KY USD
Agile Group Holdings 6.1 13.4 10/13/2025 KY USD
Agile Group Holdings 5.5 12.6 5/17/2026 KY USD
Agile Group Holdings 7.9 3.3 KY USD
Agile Group Holdings 5.5 15.1 4/21/2025 KY USD
Agile Group Holdings 7.8 3.3 KY USD
Alfa Desarrollo SpA 4.6 74.7 9/27/2051 CL USD
Alfa Desarrollo SpA 4.6 74.6 9/27/2051 CL USD
Alibaba Group Holding 3.2 66 2/9/2051 KY USD
Alibaba Group Holding 2.7 68.5 2/9/2041 KY USD
Alibaba Group Holding 3.3 63.4 2/9/2061 KY USD
AMTD IDEA Group 1.5 7.5 KY USD
AMTD IDEA Group 4.5 55 KY SGD
Amwaj 6.4 69.7 KY USD
Amwaj 4.5 49.6 KY USD
Argentina Bonar Bonds 1 43.3 7/9/2029 AR USD
Argentina Treasury Bond 3.3 45.8 4/30/2024 AR USD
Argentine Bonos del Te 15.5 39.7 10/17/2026 AR ARS
Argentine Gov't Int'l 1 46.4 7/9/2029 AR USD
Argentine Gov't Int'l 0.5 41.4 7/9/2029 AR EUR
Argentine Gov't Int'l 0.1 42 7/9/2030 AR EUR
Ascent Finance 1.2 61.6 7/12/2047 KY EUR
Ascent Finance 3.8 67 6/28/2047 KY AUD
Ascent Finance 3.4 65.7 2/6/2043 KY AUD
Astra Cumulative 2019 1.5 62 11/1/2029 KY USD
At Home Cayman 11.5 69.3 5/12/2028 KY USD
At Home Cayman 11.5 70 5/12/2028 KY USD
AYC Finance 3.9 62.2 KY USD
Banco Davivienda SA 6.7 64.1 CO USD
Banco Davivienda SA 6.7 70.3 CO USD
Banco de Chile 3.6 75.7 11/18/2039 CL AUD
Banco de Chile 3.5 75.4 9/5/2039 CL AUD
Banco de Chile 2.7 74.7 3/9/2035 CL AUD
Banco del Estado de Ch 3.1 70.5 2/21/2040 CL AUD
Banco del Estado de Ch 2.8 67 3/13/2040 CL AUD
Banco Nacional de Pana 2.5 74.7 8/11/2030 PA USD
Banco Santander Chile 3.1 70.6 2/28/2039 CL AUD
Banco Santander Chile 1.3 73.5 11/29/2034 CL EUR
Banda de Couro Energe 8 54.4 1/15/2027 BR BRL
Baraunas II Energeti 8 12.4 1/15/2027 BR BRL
Bishopsgate Asset Fi 4.8 66.9 8/14/2044 KY GBP
Bolivian Gov't Int'l 4.5 55.6 3/20/2028 BO USD
Bolivian Gov't Int'l 7.5 57.2 3/2/2030 BO USD
Bolivian Gov't Int'l 4.5 55.8 3/20/2028 BO USD
Bolivian Gov't Int'l 7.5 57.2 3/2/2030 BO USD
BOPREAL 5 64.7 10/31/2027 AR USD
BOPREAL 3 60.9 5/31/2026 AR USD
Brazilian Gov't Int'l4.8 73.8 1/14/2050 BR USD
BRF SA 5.8 73.5 9/21/2050 BR USD
BRF SA 5.8 73.6 9/21/2050 BR USD
Camposol SA 6 72.1 2/3/2027 PE USD
Camposol SA 6 72.5 2/3/2027 PE USD
CFLD Cayman Investment 2.5 3.4 1/31/2031 KY USD
CFLD Cayman Investment 2.5 3.6 1/31/2031 KY USD
CFLD Cayman Investment 2.5 3.1 1/31/2031 KY USD
CFLD Cayman Investment 2.5 3.8 1/31/2031 KY USD
CFLD Cayman Investment 2.5 2.4 1/31/2031 KY USD
CFLD Cayman Investment 2.5 3.4 1/31/2031 KY USD
CFLD Cayman Investment 2.5 8.7 1/31/2031 KY USD
CFLD Cayman Investment 2.5 3.4 1/31/2031 KY USD
CFLD Cayman Investment 2.5 2.2 1/31/2031 KY USD
Chile Gov't Int'l Bond 3.5 72.6 1/25/2050 CL USD
Chile Gov't Int'l Bond 3.1 73.4 5/7/2041 CL USD
Chile Gov't Int'l Bond 3.1 62.7 1/22/2061 CL USD
Chile Gov't Int'l Bond 3.5 72.1 4/15/2053 CL USD
Chile Gov't Int'l Bond 1.3 67.4 1/29/2040 CL EUR
Chile Gov't Int'l Bond 1.3 54 1/22/2051 CL EUR
Chile Gov't Int'l Bond 3.3 62.8 9/21/2071 CL USD
Chile Gov't Int'l Bond 1.3 74.2 7/26/2036 CL EUR
China Overseas Cayman 3.1 75.1 3/2/2035 KY USD
China Yuhua Education 0.9 65.8 12/27/2024 KY HKD
CK Hutchison Int'l 19 3.4 74 9/6/2049 KY USD
CK Hutchison Int'l 19 3.4 73.9 9/6/2049 KY USD
CK Hutchison Int'l 20 3.4 73.7 5/8/2050 KY USD
CK Hutchison Int'l 20 3.4 73.8 5/8/2050 KY USD
Colombia Gov't Int'l 3.9 2/15/2061 CO USD
Colombia Gov't Int'l 4.1 61.6 5/15/2051 CO USD
Colombia Gov't Int'l 5.2 72.9 5/15/2049 CO USD
Colombia Gov't Int'l 4.1 67 2/22/2042 CO USD
Colombia Gov't Int'l 6.3 73.5 7/9/2036 CO COP
Colombia Gov't Int'l 7.3 71.7 10/26/2050 CO COP
Colombia Gov't Int'l 7.3 71.7 10/26/2050 CO COP
Colombia Gov't Int'l 5 72 6/15/2045 CO USD
Colombia Gov't Int'l 6.3 73.5 7/9/2036 CO COP
Colombia Telecom 5 66.9 7/17/2030 CO USD
Colombia Telecom 5 67 7/17/2030 CO USD
Colombian TES 7.3 71.6 10/26/2050 CO COP
Colombian TES 6.3 73.4 7/9/2036 CO COP
Corp Nacional de Chile 3.7 67.5 1/30/2050 CL USD
Corp Nacional de Chile 3.2 61.2 1/15/2051 CL USD
Corp Nacional de Chile 3.7 67.5 1/30/2050 CL USD
Corp Nacional de Chile 3.6 74 7/22/2039 CL AUD
Corp Nacional de Chile 3.2 61.2 1/15/2051 CL USD
Dibens Leasing S/A 10.9 30.6 3/1/2035 BR BRL
Dibens Leasing S/A 10.9 34.6 3/1/2035 BR BRL
Dibens Leasing S/A 10.9 29.2 3/1/2035 BR BRL
Earls Eight 1.7 72 6/20/2032 KY AUD
Earls Eight 0.1 64.2 12/20/2031 KY AUD
Ecopetrol SA 5.9 74.2 5/28/2045 CO USD
Ecopetrol SA 5.9 70.7 11/2/2051 CO USD
El Salvador Gov't Int 7.1 68.7 1/20/2050 SV USD
El Salvador Gov't Int 7.6 72.9 9/21/2034 SV USD
El Salvador Gov't Int 7.6 73.3 2/1/2041 SV USD
El Salvador Gov't Int 5.9 65.1 1/30/2025 SV USD
El Salvador Gov't Int 7.6 73.5 9/21/2034 SV USD
El Salvador Gov't Int 7.1 68.7 1/20/2050 SV USD
El Salvador Gov't Int 7.6 73.5 2/1/2041 SV USD
Embotelladora Andina 6.5 23.3 6/1/2026 CL CLP
EFE 3.8 65.8 9/14/2061 CL USD
EFE 3.1 60 8/18/2050 CL USD
EFE 3.1 59.9 8/18/2050 CL USD
EFE 3.8 65.8 9/14/2061 CL USD
EFE 6.5 11.2 1/1/2026 CL CLP
ETESA 5.1 71.8 5/2/2049 PA USD
Empresa de Transmision 5.1 72.2 5/2/2049 PA USD
Metro SA 3.7 65.2 9/13/2061 CL USD
Metro SA 3.7 65.1 9/13/2061 CL USD
Metro SA 5.5 50.2 7/15/2027 CL CLP
Edsa SA 5 62.6 5/11/2025 AR USD
ENAP 4.5 73.3 9/14/2047 CL USD
ENAP 4.5 73.4 9/14/2047 CL USD
ENA Master Trust 4 70.8 5/19/2048 PA USD
ENA Master Trust 4 71.1 5/19/2048 PA USD
Enel Generacion Chile 6.2 29.4 10/15/2028 CL CLP
Equatorial Energia 11 1.1 10/15/2029 BR BRL
Equatorial Energia 10.8 1 5/15/2028 BR BRL
Esval SA 3.5 13.2 2/15/2026 CL CLP
Farfetch 3.8 4.3 5/1/2027 KY USD
Fospar S/A 6.5 1.4 5/15/2026 BR BRL
GDM Argentina SA 2.5 0 9/8/2024 AR USD
GDS Holdings 4.5 67.7 1/31/2030 KY USD
Generacion Mediterrane 4.6 0 11/12/2024 AR ARS
General Shopping Finan 10 66.2 KY USD
General Shopping Finan 10 65.1 KY USD
Genneia SA 2 56.4 7/14/2028 AR USD
Greenland Hong Kong 10.2 12.9 KY USD
Guacolda Energia SA 4.6 70.4 4/30/2025 CL USD
Guacolda Energia SA 10 70 12/30/2030 CL USD
Guacolda Energia SA 4.6 70.6 4/30/2025 CL USD
Guacolda Energia SA 10 70 12/30/2030 CL USD
Hector A Bertone SA 1.9 0 4/7/2024 AR USD
Hilong Holding 9.8 65.7 11/18/2024 KY USD
Hilong Holding 9.8 62.2 11/18/2024 KY USD
Hilong Holding 9.8 65.6 11/18/2024 KY USD
ICBC DO Brasil 3.3 59.5 BR USD
IMPSA 1 75 12/30/2031 AR USD
Itau Unibanco SA/Nassau 5.8 20.1 5/20/2027 BR BRL
Jamaica Gov't Bond 6.3 67.8 7/11/2048 JM JMD
Jamaica Gov't Bond 8.5 73 12/21/2061 JM JMD
Lani Finance 1.7 64.1 3/14/2049 KY EUR
Lani Finance 1.9 66.5 9/20/2048 KY EUR
Lani Finance 1.9 67.5 10/19/2048 KY EUR
Lani Finance 3.1 64.7 10/19/2048 KY AUD
Link Finance Cayman 2.2 69.8 10/27/2038 KY HKD
LIPSA Srl 1 0 8/23/2024 AR USD
Logan Group Co 7 5 KY USD
Longfor Group Holdings 4 45.2 9/16/2029 KY USD
Longfor Group Holdings 3.4 58 4/13/2027 KY USD
Longfor Group Holdings 3.9 40.2 1/13/2032 KY USD
Longfor Group Holdings 4.5 55.2 1/16/2028 KY USD
Luminis III 2.3 41.5 9/22/2048 KY USD
Luminis III 2.4 54 9/22/2048 KY AUD
Luminis IV 3.2 69.6 1/22/2042 KY AUD
Luminis 2.3 53.5 9/22/2048 KY AUD
Lunar Funding I 1.7 70.7 8/11/2056 KY GBP
MTR Corp CI 3 72.6 3/11/2051 KY HKD
MTR Corp CI 2.8 72.7 9/6/2047 KY HKD
MTR Corp CI 3.2 73.1 2/5/2055 KY HKD
MTR Corp CI 3 72.5 3/11/2051 KY HKD
Panama Gov't Int'l Bon 4.5 64.1 4/1/2056 PA USD
Panama Gov't Int'l Bon 2.3 70.3 9/29/2032 PA USD
Panama Gov't Int'l Bon 3.9 56.6 7/23/2060 PA USD
Panama Gov't Int'l Bon 3.3 75.7 1/19/2033 PA USD
Panama Gov't Int'l Bon 4.5 65.7 4/16/2050 PA USD
Panama Gov't Int'l Bon 4.5 63 1/19/2063 PA USD
Panama Gov't Int'l Bon 4.5 67.3 5/15/2047 PA USD
Panama Gov't Int'l Bon 4.3 63.8 4/29/2053 PA USD
Peruvian Gov't Int'l 2.8 57.2 12/1/2060 PE USD
Peruvian Gov't Int'l 3.2 57 7/28/2121 PE USD
Peruvian Gov't Int'l 3.6 71.3 3/10/2051 PE USD
Peruvian Gov't Int'l 3.6 65.4 1/15/2072 PE USD
Peruvian Gov't Int'l 3.3 74 3/11/2041 PE USD
Petroleos del Peru SA 5.6 66.3 6/19/2047 PE USD
Petroleos del Peru SA 5.6 66.4 6/19/2047 PE USD
Powerlong Real Estate 6.3 10.3 8/10/2024 KY USD
Provincia de Cordoba 7.1 39.7 10/27/2026 AR USD
Provincia de la Rioja 4.5 55.5 1/20/2027 AR USD
Provincia de la Rioja 7.5 51.1 7/20/2032 AR USD
Chaco Argentina 4 0 12/4/2026 AR USD
QNB Finance 13.5 65.4 10/6/2025 KY TRY
QNB Finance 11.5 73.2 1/30/2025 KY TRY
QNB Finance 2.9 73.4 9/16/2035 KY AUD
QNB Finance 2.9 72.1 12/4/2035 KY AUD
QNB Finance 3 74.6 2/14/2035 KY AUD
QNB Finance 3.4 70.7 10/21/2039 KY AUD
Radiance Holdings Grou 7.8 69.6 3/20/2024 KY USD
Rio Alto Energias Reno 7 28.7 7/15/2027 BR BRL
Santander Consumer Ch 2.9 72.5 11/27/2034 CL AUD
Seazen Group 6 70.3 8/12/2024 KY USD
Seazen Group 4.5 30.6 7/13/2025 KY USD
Shui On Dev't 5.5 73.2 3/3/2025 KY USD
Shui On Dev't 5.5 61.7 6/29/2026 KY USD
Silk Road Investments 2.9 66 1/23/2042 KY AUD
Skylark 1.8 59.1 4/4/2039 KY GBP
Autopista Central 5.3 37.3 12/15/2026 CL CLP
Vespucio Norte 5.3 50.7 12/15/2028 CL CLP
Minera de Chile SA 3.5 65.5 9/10/2051 CL USD
Minera de Chile SA 3.5 65.4 9/10/2051 CL USD
Southern Water Services 3 70.9 5/28/2037 KY GBP
SPE Saneamento RIO 1 7.2 10.7 1/15/2042 BR BRL
SPE Saneamento RIO 2 6.9 10.3 1/15/2034 BR BRL
SPE Saneamento RIO 3 7.2 10.8 1/15/2042 BR BRL
SPE Saneamento RIO 4 6.9 10.3 1/15/2034 BR BRL
Spica 2 74.6 3/24/2033 KY AUD
Spirit Loyalty Cayman 8 72.1 9/20/2025 KY USD
Spirit Loyalty Cayman 8 72.5 9/20/2025 KY USD
Spirit Loyalty Cayman 8 72 9/20/2025 KY USD
Spirit Loyalty Cayman 8 70.9 9/20/2025 KY USD
Sylph 2.7 68.3 3/25/2036 KY USD
Sylph 2.4 64.1 9/25/2036 KY USD
Sylph 3.1 74.6 9/25/2035 KY USD
Sylph 2.9 74.1 6/24/2036 KY AUD
SYN prop e tech SA 11.1 21.1 3/15/2024 BR BRL
Telecom Argentina SA 1 74.1 3/9/2027 AR USD
Telecom Argentina SA 1 66.2 2/10/2028 AR USD
Telefonica Moviles Chi 3.5 74.1 11/18/2031 CL USD
Telefonica Moviles Chi 3.5 74.2 11/18/2031 CL USD
Tencent Holdings 3.8 75.4 4/22/2051 KY USD
Tencent Holdings 3.2 67.3 6/3/2050 KY USD
Tencent Holdings 3.3 63.6 6/3/2060 KY USD
Tencent Holdings 3.9 73.4 4/22/2061 KY USD
Tencent Holdings 3.8 74.8 4/22/2051 KY USD
Tencent Holdings 3.2 67.2 6/3/2050 KY USD
Tencent Holdings 3.3 63.8 6/3/2060 KY USD
Tencent Holdings 3.9 73.2 4/22/2061 KY USD
Three Gorges Finance 3.2 70.5 10/16/2049 KY USD
Grupo Travessia 9 1.6 1/20/2032 BR BRL
Vina Santa Rita SA 4.4 63.8 9/15/2030 CL CLP
Volcan Cia Minera SAA 4.4 61.7 2/11/2026 PE USD
Volcan Cia Minera SAA 4.4 61.8 2/11/2026 PE USD
VTR Comunicaciones SpA 5.1 62.5 1/15/2028 CL USD
VTR Comunicaciones SpA 4.4 62.9 4/15/2029 CL USD
VTR Comunicaciones SpA 5.1 63.1 1/15/2028 CL USD
VTR Comunicaciones SpA 4.4 63.1 4/15/2029 CL USD
YPF SA 7 72.5 12/15/2047 AR USD
YPF SA 7 72.1 12/15/2047 AR USD
YPF SA 1 65.9 4/25/2027 AR USD
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S U B S C R I P T I O N I N F O R M A T I O N
Troubled Company Reporter-Latin America is a daily newsletter
co-published by Bankruptcy Creditors' Service, Inc., Fairless
Hills, Pennsylvania, USA, and Beard Group, Inc., Washington, D.C.,
USA, Marites O. Claro, Joy A. Agravante, Rousel Elaine T.
Fernandez, Julie Anne L. Toledo, Ivy B. Magdadaro, and Peter A.
Chapman, Editors.
Copyright 2024. All rights reserved. ISSN 1529-2746.
This material is copyrighted and any commercial use, resale or
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of the same firm for the term of the initial subscription or
balance thereof are US$25 each. For subscription information,
contact Peter A. Chapman at 215-945-7000.
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