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/raid1/www/Hosts/bankrupt/TCRLA_Public/241126.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 Tuesday, November 26, 2024, Vol. 25, No. 237 Headlines B A H A M A S FTX GROUP: Examiner Wraps Probe, Clawback Try Goes Forward C H I L E FALABELLA S.A: Reports Earnings Results for 3Q Ended Sept 30, 2024 C O L O M B I A COLOMBIA: Fitch Affirms 'BB+' Foreign Currency IDR, Outlook Stable D O M I N I C A N R E P U B L I C DOMINICAN REPUBLIC: Fitch Affirms 'BB-' IDR, Outlook Positive E L S A L V A D O R EL SALVADOR: Fitch Assigns 'CCC+' Rating to $1BB 2054 Bond J A M A I C A JAMAICA: Revive Dying Cattle Industry, Ex Agricultural Pres. Says M E X I C O BRASKEM IDESA: Fitch Affirms 'B+' LT IDR, Alters Outlook to Stable P U E R T O R I C O PUERTO RICO: Bankruptcies Increased YOY 32% Through Oct. 2024 T R I N I D A D A N D T O B A G O TRINIDAD & TOBAGO: Forex Shortage Hits SMEs X X X X X X X X LATAM: Modest Foreign Investment Limits Caribbean Economic Outlook - - - - - ============= B A H A M A S ============= FTX GROUP: Examiner Wraps Probe, Clawback Try Goes Forward ---------------------------------------------------------- Rick Archer at law360.com reports that a Delaware bankruptcy judge gave an examiner in the Chapter 11 case of FTX Trading permission to wind down his investigation and for discovery to continue in an attempt to undo a $240 million payment FTX made just before it went under. FTX is the world's second-largest cryptocurrency firm. FTX is a cryptocurrency exchange built by traders, for traders. FTX offers innovative products including industry-first derivatives, options, volatility products and leveraged tokens. Then CEO and co-founder Sam Bankman-Fried said Nov. 10, 2022, that FTX paused customer withdrawals after it was hit with roughly $5 billion worth of withdrawal requests. Faced with liquidity issues, FTX on Nov. 9, 2022, struck a deal to sell itself to its giant rival Binance, but Binance walked away from the deal amid reports on FTX regarding mishandled customer funds and alleged US agency investigations. SBF agreed to step aside, and restructuring vet John J. Ray III was quickly named new CEO. FTX Trading Ltd (d/b/a FTX.com), West Realm Shires Services Inc. (d/b/a FTX US), Alameda Research Ltd. and certain affiliated companies then commenced Chapter 11 proceedings (Bankr. D. Del. Lead Case No. 22-11068) on an emergency basis on Nov. 11, 2022. Additional entities sought Chapter 11 protection on Nov. 14, 2022. FTX Trading and its affiliates each listed $10 billion to $50 billion in assets and liabilities, making FTX the biggest bankruptcy filer in the US this year. According to Reuters, SBF shared a document with investors on Nov. 10, 2022, showing FTX had $13.86 billion in liabilities and $14.6 billion in assets. However, only $900 million of those assets were liquid, leading to the cash crunch that ended with the company filing for bankruptcy. The Hon. John T. Dorsey is the case judge. The Debtors tapped Sullivan & Cromwell, LLP as bankruptcy counsel; Landis Rath & Cobb, LLP as local counsel; and Alvarez & Marsal North America, LLC as financial advisor. Kroll is the claims agent, maintaining the page https://cases.ra.kroll.com/FTX/Home-Index The Official Committee of Unsecured Creditors tapped Paul Hastings as counsel, FTI Consulting, Inc., as financial advisor, and Jefferies LLC as the investment banker. Young Conaway Stargatt & Taylor LLP is the Committee's Delaware and conflicts counsel. Montgomery McCracken Walker & Rhoads LLP, led by partners Gregory T. Donilon, Edward L. Schnitzer, and David M. Banker, is representing Sam Bankman-Fried in the Chapter 11 cases. White-collar crime specialist Mark S. Cohen has reportedly been hired to represent SBF in litigation. Lawyers at Paul Weiss previously represented SBF but later renounced representing the entrepreneur due to a conflict of interest. ========= C H I L E ========= FALABELLA S.A: Reports Earnings Results for 3Q Ended Sept 30, 2024 ------------------------------------------------------------------ marketscreener.com reports that Falabella S.A. reported earnings results for the third quarter and nine months ended September 30, 2024. For the third quarter, the company reported sales was CLP 2,402,953.87 million compared to CLP 2,206,436.62 million a year ago. Net income was CLP 87,506.65 million compared to net loss of CLP 4,641.73 million a year ago. Basic earnings per share from continuing operations was CLP 35 compared to basic loss per share from continuing operations of CLP 2 a year ago, according to marketscreener.com. Diluted earnings per share from continuing operations was CLP 35 compared to diluted loss per share from continuing operations of CLP 2 a year ago, the report notes. For the nine months, sales was CLP 7,240,767.68 million compared to CLP 6,701,080.26 million a year ago. Net income was CLP 260,885.35 million compared to net loss of CLP 9,794.32 million a year ago, the report says. Basic earnings per share from continuing operations was CLP 104 compared to basic loss per share from continuing operations of CLP 4 a year ago, the report relays. Diluted earnings per share from continuing operations was CLP 104 compared to diluted loss per share from continuing operations of CLP 4 a year ago, the report adds. As reported in the Troubled Company Reporter-Latin America on Nov. 20, 2024, Fitch Ratings has affirmed Falabella S.A.'s (Falabella) Long-Term Foreign and Local Currency Issuer Default Ratings (IDRs) at 'BB+' and the National Long-Term Rating at 'A+(cl)'. Fitch has also affirmed Falabella's senior unsecured notes at 'BB+' and National Equity Rating at 'First Class Level 2(cl)'. The Rating Outlook has been revised to Stable from Negative. =============== C O L O M B I A =============== COLOMBIA: Fitch Affirms 'BB+' Foreign Currency IDR, Outlook Stable ------------------------------------------------------------------ Fitch Ratings has affirmed Colombia's Long-Term Foreign Currency Issuer Default Rating (IDR) at 'BB+' with a Stable Rating Outlook. Key Rating Drivers Stable Credit Fundamentals: Colombia's ratings reflect the country's track record of macroeconomic and financial stability, underpinned by an independent central bank with an inflation targeting regime and a free-floating currency. The ratings are constrained by high fiscal deficits and uncertain prospects for consolidation needed to stabilize debt/GDP, a high interest burden, and high commodity dependence. Fiscal Challenges as Revenue Underperforms: Fitch expects the central government deficit to reach 5.6% of GDP in 2024, a decline from 4.3% in 2023. Revenue has significantly underperformed this year, largely given shortfalls in tax administration efforts as well as the increase in the tax withholding last year that brought forward tax payments that would have been paid this year. The government has announced spending adjustments of nearly 2% of GDP in order to meet its fiscal target, including under-execution of public infrastructure projects. There are downside risks to Fitch's fiscal forecast this year. Fiscal Uncertainties to Persist: Fitch expects the central government's (CG) fiscal deficit to remain high but narrow to 5.1% of GDP in 2025. Fitch expects an uptick in revenue given the likely economic recovery next year. The CG is seeking additional tax measures and a revision to its fiscal rule in 2025, which will provide more flexibility for increased spending. Even with the possible changes, Fitch envisages difficulties meeting the revised fiscal rule target next year given that downside risks will persist as the government projects 1.6% of additional revenue, largely based on tax administration efforts. Fitch expects a further reduction in the CG deficit to 4.7% in 2026 given some improvement in tax administration efforts and further expenditure restraint. Mounting spending pressures and budgetary rigidities will make further deficit reduction difficult to achieve beyond 2026 without implementing tax reforms. Colombia has a good track record of implementing revenue-enhancing tax reforms amid fiscal pressures, although Fitch does not anticipate additional tax reforms during the rest of the Petro administration. Debt Burden to Rise: Fitch projects consolidated general government (GG) debt to increase to 58.9% of GDP in 2026, from 56.3% in 2024, above the projected 'BB' median of 54.5%. Colombia's GG interest/revenue ratio is expected to increase to 14.6% in 2024, which is higher than the 'BB' median of 10% and up from 12.5% in 2023. However, this ratio is projected to gradually decline primarily due to an anticipated rise in revenue. LRG Transfers Reform Progresses: The Congress of Colombia has initiated a constitutional reform that seeks to increase CG transfers to local and regional governments to 39.6% of spending, up from the current 24%. A law redistributing competencies to local and regional governments would also be put in place. The increased transfers would be implemented gradually over a 12-year period beginning in 2027 (or once the law is in place). In Fitch's view, this will further increase the already significant budget rigidities (estimated at over 80% currently) in the medium term, but has no effect in the short term. Reforms Progress: In June 2024, the Congress passed a pension reform that creates a solidarity and semi-contributive pillars, with an estimated fiscal cost of 0.3% of GDP. It also redirects pension contributions (up to 2.3x the minimum wage) to a public pension fund from individual private accounts. The outlook for the government's other key initiatives, such as health and labor reform, is uncertain given stronger opposition in the Congress. Growth Set to Accelerate: Fitch expects growth to pick up in 2025 to 2.8% from 1.8% in 2024, as less-restrictive monetary policy drives higher consumption and investment. Fitch believes that growth will reach a trend pace of 3% in 2026. However, uncertainties about trend growth persist due to the decline in investment, which Fitch believes will remain below historic levels (averaging 22% of GDP from 2010 to 2020) throughout the forecast period. In addition, low productivity growth contributes to these uncertainties. Inflation Slowly Falls: Fitch expects inflation to continue declining to 5.3% by YE 2024, which is still above the upper band of the central bank's 3% (+/- 1pp) target, and fall below the upper bound of the target range by YE 2025. Widespread indexation and unwinding of fuel subsidies in 2023-2024 have led to a more gradual decline in inflation than most inflation targeting countries in the region. The central bank has cut interest rates cumulatively by 350 bp since December 2023 to 9.75% in October 2024. Fitch expects additional cuts reaching a terminal rate of 6.5% by YE 2025, but there is the risk of a more gradual pace from stronger than expected peso depreciation. Narrower Current Account Deficits: The current account deficit is expected to narrow marginally in 2024 to 2.4% of GDP from 2.5% in 2023, sharply below its 2022 high of 6.1%. Foreign direct investment (FDI) has proven resilient to date despite political uncertainties, reaching over USD16 billion in net terms in 2023 (4.4% of GDP). Fitch expects some moderation in net FDI in 2024-2025, but that will fully cover the current account deficit this year and nearly 80% in 2025. The central bank has accumulated reserves to boost its external liquidity position, with an expected accumulation of nearly USD3 billion in 2024. In April 2024, the IMF approved a new two-year flexible credit line of USD8.1 billion for Colombia, which provides an additional buffer to help the country cope with external shocks, a resource Colombia has utilized in the past. ESG - Governance: Colombia has an ESG Relevance Score (RS) of '5' for both Political Stability and Rights and for the Rule of Law, Institutional and Regulatory Quality and Control of Corruption. Theses scores reflect the high weight that the World Bank Governance Indicators (WBGI) have in Fitch's proprietary Sovereign Rating Model (SRM). Colombia has a medium WBGI ranking at 42.9 reflecting a track record of violence but peaceful political transitions, a moderate level of rights for participation in the political process, moderate institutional capacity, established rule of law and a moderate level of corruption. RATING SENSITIVITIES Factors that Could, Individually or Collectively, Lead to Negative Rating Action/Downgrade Public Finances: A sustained deterioration in Colombia's general government debt-to-GDP ratio relative to the 'BB' peer median, for example from persistently high fiscal deficits and/or weak growth; Macro: Deterioration of investment and medium-term growth prospects with adverse social ramifications, such as high unemployment and poverty levels; External Finances: A marked increase in external vulnerabilities, for example due to renewed large current accounts deficits, a sharp fall in foreign direct investment and/or an increase in net external debt-to-GDP. Factors that Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade Public Finances: Achievement of fiscal consolidation consistent with a steadily declining general government debt-to-GDP ratio and enhanced fiscal policy credibility; Macro: Sustained medium-term economic growth above Colombia's historical averages, accompanied by broader macro-financial stability; Structural: Improvement in governance and social cohesion. Sovereign Rating Model (SRM) and Qualitative Overlay (QO) Fitch's proprietary SRM assigns Colombia a score equivalent to a rating of 'BB+' on the Long-Term Foreign Currency IDR scale. Fitch's sovereign rating committee did not adjust the output from the SRM to arrive at the final Long-Term Foreign Currency IDR. Fitch's SRM is the agency's proprietary multiple regression rating model that employs 18 variables based on three-year centered averages, including one year of forecasts, to produce a score equivalent to a Long-Term Foreign Currency IDR. Fitch's QO is a forward-looking qualitative framework designed to allow for adjustment to the SRM output to assign the final rating, reflecting factors within its criteria that are not fully quantifiable and/or not fully reflected in the SRM. Country Ceiling The Country Ceiling for Colombia is affirmed at 'BBB-', 1 notch above the Long-Term Foreign Currency IDR. This reflects moderate constraints and incentives, relative to the IDR, against capital or exchange controls being imposed that would prevent or significantly impede the private sector from converting local currency into foreign currency and transferring the proceeds to non-resident creditors to service debt payments. Fitch's Country Ceiling Model produced a starting point uplift of +1 notch above the IDR. Fitch's rating committee did not apply a qualitative adjustment to the model result. ESG Considerations Colombia has an ESG Relevance Score of '5' for Political Stability and Rights as World Bank Governance Indicators have the highest weight in Fitch's SRM and are therefore highly relevant to the rating and a key rating driver with a high weight. As Colombia has a percentile rank below 50 for the respective Governance Indicator, this has a negative impact on the credit profile. Colombia has an ESG Relevance Score of '5' for Rule of Law, Institutional & Regulatory Quality and Control of Corruption as World Bank Governance Indicators have the highest weight in Fitch's SRM and are therefore highly relevant to the rating and are a key rating driver with a high weight. As Colombia has a percentile rank below 50 for the respective Governance Indicators, this has a negative impact on the credit profile. Colombia has an ESG Relevance Score of '4' [+] for Human Rights and Political Freedoms as the Voice and Accountability pillar of the World Bank Governance Indicators is relevant to the rating and a rating driver. As Colombia has a percentile rank above 50 for the respective Governance Indicator, this has a positive impact on the credit profile. Colombia has an ESG Relevance Score of '4' [+] for Creditor Rights as willingness to service and repay debt is relevant to the rating and is a rating driver for Colombia, as for all sovereigns. As Colombia has track record of 20+ years without a restructuring of public debt and captured in Fitch's SRM variable, this has a positive impact on the credit profile. 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 ----------- ------ ----- Colombia LT IDR BB+ Affirmed BB+ ST IDR B Affirmed B LC LT IDR BB+ Affirmed BB+ LC ST IDR B Affirmed B Country Ceiling BBB- Affirmed BBB- senior unsecured LT BB+ Affirmed BB+ Senior Unsecured-Local currency LT BB+ Affirmed BB+ =================================== D O M I N I C A N R E P U B L I C =================================== DOMINICAN REPUBLIC: Fitch Affirms 'BB-' IDR, Outlook Positive ------------------------------------------------------------- Fitch Ratings has affirmed Dominican Republic's Long-Term Foreign-Currency Issuer Default Rating (IDR) at 'BB-'. The Rating Outlook is Positive. Key Rating Drivers Positive Outlook, Ratings Affirmed: The Positive Outlook reflects a trend improvement in governance indicators, robust growth prospects that should lift per capita income, and the potential for fiscal reforms to improve the macro institutional framework. Constitutional reforms and a fiscal responsibility law (FRL) were approved following the administration's second term election victory by a wide margin in May. However, a widely anticipated tax reform was withdrawn in October following a public backlash. Fitch will monitor the ability of the recently approved fiscal rule to anchor spending growth and alternative plans to raise revenue absent a broader tax reform, among other areas, to assess improvements in the policy framework and creditworthiness. The Dominican Republic's ratings are supported by a track record of robust economic growth, a diversified export structure, high per-capita GDP and social indicators, and governance scores that compare favorably to peers. They are constrained by fiscal weaknesses including a high interest burden and subsidization of a loss-making electricity sector, heavy sovereign reliance on external bond market financing, and lingering weaknesses in the policy framework related to a large central-bank quasi-fiscal deficit and relatively modest external liquidity buffers (which have been under pressure this year) in the context of a heavily managed exchange-rate. Second Abinader Term Begins: President Luis Abinader began his second term in August. The majorities of his PRM party in both houses of congress have enabled approval of constitutional reforms that limit presidents to two terms in office, enhance the autonomy of the public prosecutor's office and reduce the number of members in the chamber of deputies, while the FRL was approved during the interim period in July. However, the sudden withdrawal of the tax reform calls into question the ability to pass more difficult reforms, after prior efforts also did not advance during the administration's first term due to the impact of the pandemic and inflation. A less contentious labor reform remains on the agenda and was submitted to congress in October. Growth Returns to Potential: Growth has resumed its historically robust pace this year, reaching 5.1% in 1H24, following a slowdown to 2.3% in 2023 due to the high interest rate environment. Free trade zones and tourism continue to be bright spots in the economy, with tourist arrivals continuing to reach record highs. Fitch forecasts growth of 5% in 2024 and 2025, well above the forecast 2024 'BB' median of 3.1%. Record levels of FDI, particularly in the tourism and energy sectors, are supportive of robust medium-term growth prospects. One-Off Boosts 2024 Revenue: The 2024 budget targets a central government deficit of 3.1% of GDP, down slightly from 3.3% in 2023. A mid-year budget reformulation appears net neutral, with increased spending (up 13% through September) funded by higher-than-expected revenues, mainly a one-off 0.7% of GDP revenue boost from the Aerodom airport concession. Interest costs continue to rise quickly (15% through September). Fitch projects this will further lift the high interest-to-revenue burden, which continues to weigh on the credit profile, to 22.5% in 2025 from 20.1% in 2023, one of the highest in the 'BB' category. Fiscal Rule Approved: A fiscal rule was approved by Congress in July, which establishes a real expenditure growth cap of 3% (7% in nominal terms) and a debt anchor of 40% of GDP by 2035. The new fiscal rule will face its first test with the 2025 budget, which targets a 3% of GDP deficit. The original budget proposal did not assume a tax reform, which according to the fiscal responsibility law would allow for a larger real spending increase above the 3% cap, and so it will not be directly affected by the withdrawal of the reform. Fitch forecasts the 2025 deficit to be broadly in line with the target, but without tax reform it will require significant expenditure restraint to compensate for the loss of this year's one-off revenues. Tax Reform Withdrawn: The proposed tax reform aimed to raise 1.5% of GDP in additional revenue, primarily through reducing widespread tax exemptions and broadening the base of the 18% VAT rate. The primary focus of raising additional revenue was to enable higher spending in priority areas such as social spending and infrastructure, rather than for fiscal consolidation. The administration is in the process of outlining an alternative plan, based on more ad hoc tax administration measures where new legislation is not required and addressing high levels of tax evasion. Foreign Currency Debt Share Falls: The share of foreign currency debt continues to gradually decline, falling to 67% as of September 2024 (its 2019 level) from 69% at end 2023, through greater issuance of global peso-linked bonds in recent years. Fitch expects the government debt stock to inch up to 47.9% of GDP in 2024 from 46.8% in 2023. Gradual fiscal consolidation should help stabilize debt over the medium-term. Consolidated public sector debt is higher at 62.5%, accounting for the large debt of the central bank (USD18.1 billion or 14.6% of GDP at end June 2024). Inflation Below Target: Inflation through October this year averaged 3.3%, below the BCRD's target of 4%. The BCRD has reduced its policy rate to 6.25% from a peak of 8.5% in May 2023. However, other interest rates in the economy remain high despite declines in the policy rate. Interbank lending rates stood at 12.3% at end-October. This could signal a still restrictive monetary policy stance, in particular to contain exchange-rate pressures. Reserves Under Some Pressure: The exchange rate has been under some pressure in 2024, prompting foreign exchange intervention (data on which are not publicly available) to prevent a steeper depreciation (down 4% YTD). This has led international reserves to fall by USD2.1 billion to USD13.3 billion as of November 8 (or -14%), despite a large international bond issuance in June and an improving current account deficit. The ongoing exchange-rate pressures and reserve losses in the context of improved balance-of-payments dynamics highlights lingering weaknesses in the policy framework, in its view. Fitch forecasts international reserves to partially recover due to seasonal effects in the remainder of the year and end 2024 at USD14.6 billion, equivalent 3.9 months of CXP, slightly above the 2019 level of 3.5 months and below the 'BB' median of 4.5 months. ESG-Governance: Dominican Republic has ESG Relevance Scores (RS) of '5'[+] for Political Stability and Rights and for the Rule of Law, Institutional and Regulatory Quality, and Control of Corruption. These scores reflect the high weight that the World Governance Indicator (WGI) have in its proprietary Sovereign Rating Model (SRM). Dominican Republic has a medium WGI ranking at the 51.9 percentile, reflecting a recent track record of peaceful political transitions, a moderate level of rights for participation in the political process, moderate institutional capacity and rule of law and a fairly high degree of corruption. RATING SENSITIVITIES Factors that Could, Individually or Collectively, Lead to Negative Rating Action/Downgrade - Public Finances: Continued rise in government debt/GDP and interest/revenues ratios, for example, through the loosening of fiscal policy, lower-than-expected growth, or financial losses of the public electric utilities; - External Finances: Further deterioration of the external liquidity position that increases external vulnerability; - Macro: Sustained period of growth below historical averages. Factors that Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade - Public finances/Structural: Implementation of policy measures that strengthen fiscal flexibility and/or enhanced credibility of the newly approved fiscal rule to anchor expenditure growth. - Macro: Sustained high growth rates and an improved macroeconomic policy mix that improves monetary and exchange rate policy credibility and effectiveness. Sovereign Rating Model (SRM) and Qualitative Overlay (QO) Fitch's proprietary SRM assigns Dominican Republic a score equivalent to a rating of 'BB+' on the Long-Term Foreign-Currency IDR scale. Fitch's sovereign rating committee adjusted the output from the SRM to arrive at the final Long-Term Foreign Currency IDR by applying its Qualitative Overlay (QO), relative to SRM data and output, as follows: - Structural: Fitch has added a -1 notch as improvements in governance indicators and the government's significant political capital following elections have not yet been reflected in the ability to enact policy measures to address key longstanding issues and may understate constraints on policy. - Public Finances: -1 notch to reflect structural fiscal vulnerabilities stemming from a relatively low tax take, budgetary rigidity and vulnerability posed by a heavily-subsidized electricity sector, and contingent liabilities related to the large market debt and sizeable quasi-fiscal deficit of the central bank. Fitch's SRM is the agency's proprietary multiple regression rating model that employs 18 variables based on three-year centered averages, including one year of forecasts, to produce a score equivalent to a Long-Term Foreign Currency IDR. Fitch's QO is a forward-looking qualitative framework designed to allow for adjustment to the SRM output to assign the final rating, reflecting factors within its criteria that are not fully quantifiable and/or not fully reflected in the SRM. Country Ceiling The Country Ceiling for the Dominican Republic is in line with the Long-Term Foreign Currency IDR. This reflects no material constraints and incentives, relative to the IDR, against capital or exchange controls being imposed that would prevent or significantly impede the private sector from converting local currency into foreign currency and transferring the proceeds to non-resident creditors to service debt payments. Fitch's Country Ceiling Model produced a starting point uplift of +1 notch above the IDR. Fitch's rating committee applied an offsetting -1 notch qualitative adjustment to this, under the Macro-Financial Stability Risks and Exchange Rate pillar. Membership in the CAFTA-DR trade agreement puts some limits on incentives for the use of transfer-and-convertibility restrictions, but this is balanced by a managed exchange-rate regime and fairly low international financial integration. ESG Considerations Dominican Republic has an ESG Relevance Score of '5'[+] for Political Stability and Rights as the WGIs have the highest weight in Fitch's SRM and are therefore highly relevant to the rating and a key rating driver with a high weight. As Dominican Republic has a percentile rank above 50 for the respective Governance Indicator, this has a positive impact on the credit profile. Dominican Republic has an ESG Relevance Score of '5'[+] for Rule of Law, Institutional & Regulatory Quality and Control of Corruption as the WGIs have the highest weight in Fitch's SRM and are therefore highly relevant to the rating and are a key rating driver with a high weight. As Dominican Republic has a percentile rank above 50 for the respective WGIs, this has a positive impact on the credit profile. Dominican Republic has an ESG Relevance Score of '4'[+] for Human Rights and Political Freedoms as the Voice and Accountability pillar of the WGIs is relevant to the rating and a rating driver. As Dominican Republic has a percentile rank above 50 for the respective WGI, this has a positive impact on the credit profile. Dominican Republic has an ESG Relevance Score of '4' for Creditor Rights as willingness to service and repay debt is relevant to the rating and is a rating driver for Dominican Republic, as for all sovereigns. As Dominican Republic has a fairly recent restructuring of public debt in 2005, this has a negative impact on the credit profile. 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 ----------- ------ ----- Dominican Republic LT IDR BB- Affirmed BB- ST IDR B Affirmed B LC LT IDR BB- Affirmed BB- LC ST IDR B Affirmed B Country Ceiling BB- Affirmed BB- senior unsecured LT BB- Affirmed BB- ===================== E L S A L V A D O R ===================== EL SALVADOR: Fitch Assigns 'CCC+' Rating to $1BB 2054 Bond ---------------------------------------------------------- Fitch Ratings has assigned a 'CCC+' rating to El Salvador's USD1 billion bond maturing in 2054. The bond carries a coupon of 9.65%. El Salvador plans to use bond proceeds to repurchase outstanding debt and general budgetary purposes. Key Rating Drivers The bond ratings are in line with El Salvador's 'CCC+' Long-Term Foreign Currency Issuer Default Rating (IDR), affirmed on April 30, 2024. ESG - Governance: El Salvador has an ESG Relevance Score (RS) of '5' for both Political Stability and Rights and for the Rule of Law, Institutional and Regulatory Quality and Control of Corruption. These scores reflect the high weight that the World Bank Governance Indicators (WBGI) has in Fitch's proprietary Sovereign Rating Model. El Salvador has a medium WBGI percentile ranking of 41.0%, reflecting a recent track record of peaceful political transitions, a moderate level of rights for participation in the political process, moderate institutional capacity, established rule of law and a moderate level of corruption. RATING SENSITIVITIES Factors that Could, Individually or Collectively, Lead to Negative Rating Action/Downgrade The bond rating would be sensitive to any negative change in El Salvador's Long-Term Foreign Currency IDR. Factors that Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade The bond rating would be sensitive to any positive change in El Salvador's Long-Term Foreign Currency IDR. Date of Relevant Committee 29 April 2024 ESG Considerations El Salvador has an ESG Relevance Score of '5' for Political Stability and Rights as World Bank Governance Indicators have the highest weight in Fitch's SRM and are therefore highly relevant to the rating and a key rating driver with a high weight. As El Salvador has a percentile rank below 50 for the respective Governance Indicator, this has a negative impact on the credit profile. El Salvador has an ESG Relevance Score of '5' for Rule of Law, Institutional, Regulatory Quality and Control of Corruption as World Bank Governance Indicators have the highest weight in Fitch's SRM and are therefore highly relevant to the rating and are a key rating driver with a high weight. As El Salvador has a percentile rank below 50 for the respective Governance Indicators, this has a negative impact on the credit profile. El Salvador has an ESG Relevance Score of '4' for Creditor Rights as willingness to service and repay debt is highly relevant to the rating and is a key rating driver for El Salvador given the recent implementation of pension debt exchange that Fitch deemed a default. El Salvador has an ESG Relevance Score of '4' for Human Rights and Political Freedoms as the Voice and Accountability pillar of the World Bank Governance Indicators is relevant to the rating and a rating driver. As El Salvador has a percentile rank below 50 for the respective Governance Indicator, this has a negative impact on the credit profile. 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 ----------- ------ El Salvador senior unsecured LT CCC+ New Rating ============= J A M A I C A ============= JAMAICA: Revive Dying Cattle Industry, Ex Agricultural Pres. Says ----------------------------------------------------------------- Jamaica Observer reports that Lenworth Fulton, a former president of the Jamaica Agricultural Society, said the rapid decline in the island's cattle population is cause for concern, with dairy cattle levels at crisis proportions, both with the number of farms and animals existing today. Beef cattle production in Jamaica has also fallen sharply since the 1980s, and now, most large beef cattle farms have gone out of operation due to cheaper beef imports, shift from agriculture by bauxite mining companies like Reynolds Jamaica Mines, Kaiser Aluminium and Aluminium Company of Canada (Alcan) - all former companies which operated in Jamaica - scared of mad cow disease, and the deregulation of the veterinary service coupled with poor land distribution policies bias to small crop farmers in agroparks, according to Jamaica Observer. The decline must be attributed to insufficient research from government facilities like Bodles Research Station, Montpelier Research Station and Minard Estate Jamaica, as well as a lack of emphasis on livestock production by Rural Agricultural Development Authority (RADA) and the College of Agriculture, Science and Education (CASE), the report notes. A successful livestock industry depends on cheap and available sources of feed like grasses and there is no reason why Jamaica's cattle and other ruminants should not be grass fed, especially, because imported grains such as corn and sorghum for poultry and animal feeds are costly with their imports valued at US$140 million currently, the report relays. According to the report, refocusing on the livestock industry could save millions of US dollars spent on importing beef and other meat proteins like canned fish, mutton and chicken back and neck. Jamaica imports 13 million kilograms of chicken back and necks in 2023, and spent US$20 million on mutton in 2022 which can be greatly reduced by placing more emphasis on ruminant production -- cattle, goats, sheep and rabbits, the report discloses. Besides, there are a large number of trained cattle farmers throughout Jamaica, but they lack access to land, the report says. Jamaica also has high levels of fish and fish products imports of which very little can be done to reduce these foreign exchange expenditures because of the affordability to the poorer class in the country, the report relays. Salted fish import is about US$18.5 million. Tinned mackerel imports cost at US$15.6 million and sardines set the country back by US$15.5 million, according to the latest trade data, the report notes. These level of importation are unsustainable but difficult to control because of overfishing and poaching in Jamaican waters by its neighbours from Central and South American countries, and these products are more affordable and have longer shelf life than other meat types, the report says. It makes economic sense to concentrate on pasture development and preservation of local cattle breeds like Jamaica Red, Jamaica Black and Brahman for beef cattle resuscitation, since the country has the advantage from research and development from the work of TP Lecky and others like Karl Wellington, Jasmine Holness and others in cattle breeding and established nutrition research in various grasses and fodders by scientists like Dinsdale McCloud, Ray Hill, Paul Jennings and so on, the report discloses. Many grass trials have been conducted locally over the years, notably among them are pangola, brachiaria, African star and Mombasa, the report relays. However, there is no national pasture development programme which would be the hub of a ruminant expansion drive to make meat and milk more affordable and available especially to the vulnerable in the society, the report discloses. Jamaica is currently exporting beef products like patties to Caribbean countries and North America and local beef would have beneficial effects on rural employment, import substitution and development in research and cattle genetic, the report says. Government must play a more direct role in both the dairy and beef subsectors by initiating policies to drive research, make land available at reasonable rates, facilitate financial support through loans and grants and protect the neucleous herds for the established breeds (Jamaica Red, Black, Brahman and Jamaica Hope). Also to educate and train these landless cattle farmers that raise their animals on the streets and make land available to them on ruminant agro parks in the same way orchard crops and food types farmers are accommodated on agro parks, the report relays. The report says the Jamaica Hope milk breed is heading for extinction while milk production fell from 40 million liters in the 1980s to about 12 million liters currently. Jamaica Dairy Development Board in it cattle census of 2014 revealed that milk and milk products importation in 2012 and 2013 had a compounded value of US$101 million and these imports are growing, whilst the cattle industry continues to decline and the consuming public increasing with record of tourism arrivals and a large undernourished student population, the report relays. Although these import seem moderate, this economy cannot afford to spend foreign exchange unnecessarily on food that can be produced locally, the report discloses. In the recent past, one of Jamaica newspapers carried a grim story of Jamaica Red Poll cattle dying of starvation and thirst at a foreign operated mining entity and with a government promised to act in the best interest of all concerned, the report says. But to date, the plan to preserve this valuable national treasure, Jamaica Red Poll cattle, is not yet announced and some dairy establishments have butchered Jamaica Hope with little years of productive life left in them, the report notes. These practices are trampling on decades of cattle genetic achievements of international recognition -- it must stop and programmes be put in place to move the beef cattle population to 350, 000 and the dairy to 30,000 heads they were in the 1980s, the report recalls. The estimated amount of dairy cattle now is about 10,000 heads, the report says. According to the 1996 agricultural census, there were 49,663 cattle holdings with 287,000 animals islandwide, the report notes. Since 2001, beef and milk production have been on the decline, with beef production moving from 14.01 million metric tonnes in the year 2000 to 6 million metric tonnes in 2014, the report recalls. Over this period, the number of cattle slaughtered fell from 60,302 to 22,455 in year 2014. Milk production declined from 23.77 million litres to 11.93 million litres over the same period, the report notes. The improvement in both beef and and milk production to levels obtained in the 1970s would afford the country to offer school children fresh milk as a part of their nutrition and avail grass-fed beef to consumers and hotel sector at competitive prices, the report says. The cattle industry need not decline any further if government, cattle farmers, universities and colleges get involved in research, pasture development, breed preservation and public education to complement cattle shows at JAS events and Minard beef cattle show held annually in St Ann, 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 September 2024, S&P affirmed 'BB-/B' sovereign ratings on Jamaica and revised outlook to positive. 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 =========== BRASKEM IDESA: Fitch Affirms 'B+' LT IDR, Alters Outlook to Stable ------------------------------------------------------------------ Fitch Ratings has affirmed Braskem Idesa, S. A. P. I.'s (Braskem Idesa) Long-Term Foreign and Local Currency Issuer Default Ratings (IDRs) at 'B+'. The Rating Outlook has been revised to Stable from Negative. In addition, Fitch has affirmed Braskem Idesa's senior secured bonds at 'B+' with a Recovery Rating of 'RR4'. The 'B+' rating reflects a persisting weak outlook for polyethylene (PE) and a slower-than-expected market recovery path. The revised Outlook to Stable reflects the start of a turnaround of the negative price trends of 2023 and early 2024, in addition to the advancement of the Terminal Quimica Puerto Mexico (TQPM) and achieved efficiencies, all of which is expected to support EBITDA generation through the rating horizon. Key Rating Drivers Spreads Remain Under Pressure: PE prices remained weaker than expected in 2024, and spreads have been lower, despite a decline in ethane prices. Fitch Ratings expects that the cycle will turn in 2H25, but is now incorporating the view of a U-shaped recovery rather than the V-shape expected for 2024, that did not materialize. With the prolonged price pressure through 2024, Fitch expects more substantial curtailments in capacity sector-wide that should support price recovery. Fitch's base case reflects its assumptions of Braskem Idesa's PE prices of USD1,144/ton in 2024, USD1,116/ton in 2025 and USD1,126/ton in 2026 and spreads of USD871/ton in 2024, USD814/ton in 2025 and USD819/ton in 2026. As a second-quartile producer on the global cost curve, Braskem Idesa will be able to quickly benefit from improved pricing conditions. High Near-Term Leverage Moderating: Fitch expects PE prices to remain lower than previously expected in 2024 and 2025, which will cause Braskem Idesa's net leverage to continue to be elevated and commensurate with the 'B' category. Cost efficiencies and a continuing favorable ethane price helped stabilize EBITDA, improving net leverage and firmly placing net leverage below the 6.0x trigger for downgrade through the rating horizon at a 4.7x average. Fitch forecasts the company's EBITDA for 2024 and 2025 at approximately USD298 million and USD282 million, respectively. EBITDA interest coverage will still be modest at 2.0x in 2024 and 2.1x in 2025, reflecting favorable EBITDA trends. The elevated leverage is offset by the company's long-dated debt maturity profile. Business Risk: Braskem Idesa is vulnerable to PE price swings and spikes in raw material costs, as well as its dependence on a single product and single site operations. The company is exposed to operational risk from Petroleos Mexicanos (PEMEX; B+/Stable), which has an agreement to supply a minimum volume of 30,000 barrels per day (bpd) of ethane until the earlier of February 2025 or the start-up of the ethane import terminal. The date can be extended and gives Braskem Idesa pre-emptive rights to acquire all PEMEX's ethane not used for its own production through 2045, which should supplement the feedstock imported via the new terminal upon completion. The terminal was 87% complete at September 2024, reflecting lower execution risk, and increased probability of favorable ethane cost conditions for Braskem Idesa to materialize through 2025. The ethane terminal is critical to Braskem Idesa's long-term viability and competitiveness, as it is expected to lower the cost of imported feedstock by at least 20%, further supporting EBITDA growth. Standalone Rating Approach: Fitch considers Braskem Idesa's ratings and those of its majority shareholder Braskem S.A., with a 75% equity interest, to be independent due to Braskem S.A.'s lack of strong legal incentive to support Braskem Idesa, as there are no parent guarantees or cross-default provisions on Braskem Idesa's debt. In addition, Braskem Idesa's financial contribution in the form of dividends to the parent has been low and operational synergies between the companies are weak. Derivation Summary Fitch's calculation of Braskem Idesa's expected net leverage for YE 2024 was above that of its peers at 5.8x, compared with Braskem S.A. (BB+/Negative) at 3.6x, Orbia Advance Corporation, S.A.B. de C.V. (BBB/Stable) at 3.7x, Cydsa, S.A.B. de C.V. (BB+/Stable) at 2.9x and Alpek, S.A.B. de C.V.(BBB-/Stable) at 2.9x. Historically, Braskem Idesa benefited from access to a competitive cost feedstock, with its EBITDA margin well positioned relative to other PE producers such as Braskem S.A. and more diversified participants, such as Dow, in terms of operating margins. Braskem Idesa has higher exposure to supply/contract risks than its peers. The company also has a weaker position in terms of exposure to a single asset and product. Key Assumptions - Pemex provides 28kbpd in 2024, 20kbpd in 2025, 20kbpd in 2026 and 15kbpd thereafter; - Imported ethane of 20kpbd in 2023, 27kpbd in 2024, via the Fast Track; 37kbpd in 2025 and 47kbpd in 2026 via the ethane import terminal; - Operating rates of 80% in 2024, 81% in 2025 and 97% in 2026 onwards; - Braskem Idesa PE prices of USD1,144/ton in 2024, USD1,116/ton in 2025 and USD1,126/ton in 2026; - Average ethane purchase costs of USD273/ton in 2024, USD302/ton in 2025 and USD307/ton in 2026; - Braskem Idesa PE-ethane spreads of USD871/ton in 2024, USD814/ton in 2025 and USD819/ton in 2026; - Braskem Idesa earns an 10% service margin over the industry reference PE price; - The ethane import terminal begins operations in 2025 and operates at a rate of 45kbpd, lowering cost to USD190/ton; - MXN/USD exchange rates of 18.16 in 2024, 18.96 in 2025 and 18.50 thereafter. Recovery Analysis The recovery analysis assumes that Braskem Idesa would be a going concern (GC) in bankruptcy and that it would be reorganized rather than liquidated. GC Approach: - A 10% administrative claim; - The GC EBITDA is estimated at MXN5,187 million. The GC EBITDA estimate reflects Fitch's view of a sustainable, post-reorganization EBITDA level upon which Fitch bases the valuation of Braskem Idesa; - EV multiple of 5.0x. With these assumptions, Fitch's waterfall generated recovery computation (WGRC) for the senior secured notes is in the 'RR3' band. However, according to Fitch's Country-Specific Treatment of Recovery Ratings Criteria, the Recovery Rating for corporate issuers in Mexico is capped at 'RR4'. RATING SENSITIVITIES Factors that Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade - An improvement in liquidity; - Net leverage of 2.5x through the cycle - Interest coverage to 5.0x through the cycle; - A recovery in PE prices and the PE-ethane spread. Factors that Could, Individually or Collectively, Lead to Negative Rating Action/Downgrade - Failure to obtain a waiver on the term loan's maintenance covenant; - A cash balance below USD200 million; - EBITDA to interest coverage below 1.5x in consecutive years; - Net debt to EBITDA sustainably above 6.0x. Liquidity and Debt Structure Liquidity Profile: Braskem Idesa reported total debt of USD2.2 billion and net debt of USD2.0 billion at Sept. 30, 2024. The majority of the company's debt is a USD900 million bond due 2029 and a USD 1.2 billion bond due 2032, evidencing a favorable debt maturity schedule. Issuer Profile Braskem Idesa, S.A.P.I. is a polyethylene producer with operations in the city of Coatzacoalcos, Mexico. Its annual production is 1.05 million tons of high- and low-density polyethylene. It began operations in early 2016. 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 Braskem Idesa SAPI has an ESG Relevance Score of '4' for Financial Transparency due to lack of footnotes and adequate disclosures, which has a negative impact on the credit profile, and is relevant to the rating[s] in conjunction with other factors. Braskem Idesa SAPI has an ESG Relevance Score of '4' for Governance Structure due to shareholder concentration, which has a negative impact on the credit profile, and is relevant to the rating[s] in conjunction with other factors. The highest level of ESG credit relevance is a score of '3', unless otherwise disclosed in this section. A score of '3' means ESG issues are credit-neutral or have only a minimal credit impact on the entity, either due to their nature or the way in which they are being managed by the entity. Fitch's ESG Relevance Scores are not inputs in the rating process; they are an observation on the relevance and materiality of ESG factors in the rating decision. Entity/Debt Rating Recovery Prior ----------- ------ -------- ----- Braskem Idesa SAPI LT IDR B+ Affirmed B+ LC LT IDR B+ Affirmed B+ senior secured LT B+ Affirmed RR4 B+ ===================== P U E R T O R I C O ===================== PUERTO RICO: Bankruptcies Increased YOY 32% Through Oct. 2024 ------------------------------------------------------------- Boletin de Puerto Rico reports that from January to October 2024, Puerto Rico experienced a notable rise in bankruptcy filings, with a total of 4,769 cases, marking a 32% increase compared to the same period in 2023. Of these cases, Chapter 13 bankruptcies, which allow individuals to reorganize their finances under court supervision, comprised the largest share at 66.5%, totaling 3,173 cases -- up 30.8% year-over-year, the report says. Chapter 7 filings, involving full asset liquidation, accounted for 32.2% of cases, with 1,534 filings, a 37.2% increase, the report adds. According to Boletin de Puerto Rico, Chapter 11 filings, predominantly filed by businesses aiming to reorganize while remaining operational, dropped by 1.8% but still reached 49 cases. Chapter 12, which pertains to family farmers and fishermen, saw 13 filings, reflecting a significant increase, although specific growth percentages were not disclosed, the research firm says. The report also highlighted industries most impacted by the surge in bankruptcies. The restaurant industry reported 19 cases with a total debt of $8.1 million, while the construction sector followed with 13 cases and $7.6 million in debt. The agriculture industry faced eight cases totaling $8 million in debt, and the real estate sector, although with only eight filings, accumulated the highest debt -- $75.8 million -- indicating substantial challenges within the sector. In terms of geography, San Juan, Ponce, and Bayamon were the municipalities with the highest bankruptcy numbers. San Juan led with 391 filings, Bayamon had 293, and Ponce recorded 219 cases, all showing significant increases. Additionally, commercial bankruptcies saw dramatic spikes in several areas, with a 400% rise in Manati, a 225% increase in Guaynabo, and a 171% increase in San Juan. Across Puerto Rico, commercial bankruptcies surged by 22.8%, with 285 cases filed in the first 10 months of 2024. Noteworthy bankruptcies included Full House Development Inc., which reported $44.5 million in debt in the real estate sector. Other significant cases were Golden Triangle Realty SE with $27.4 million in debt, Eco Green Recycle Corp. with nearly $8 million, and Orengo Air Corp. with $5.3 million in debts. The total reported debt for bankruptcies in Puerto Rico from January to October 2024 reached $730.5 million, a 29.7% decrease from the $891.5 million reported in 2023. This figure excludes HIMA Hospitals' 2023 bankruptcy, which accounted for $472.3 million of last year's debt. Excluding this, 2023's debt would have been $419.2 million, reflecting a 74.2% increase in reported debt for 2024. ===================================== T R I N I D A D A N D T O B A G O ===================================== TRINIDAD & TOBAGO: Forex Shortage Hits SMEs ------------------------------------------- Geisha Kowlessar-Alonzo at Trinidad and Tobago Guardian reports that it is mostly "gloom and doom" this Christmas for many micro, small and medium-sized (MSMEs) businesses, as the most recent cut in forex availability by RBC to its credit card holders will mean these entities will either be forced to close up shop or limit the number of items they will be offering this season. The Canadian multinational financial services company, in notice to its customers stated that the monthly limits for most of its credit cards will be further reduced to $14,000 (US$2,058) from $41,000 (US$6,020) effective December 1, according to Trinidad and Tobago Guardian. Similar action was taken by Scotiabank when it announced a significant reduction on the forex spend on its range of credit cards on October 30, the report notes. Scotiabank said that effective December 1, holders of the Aero Mastercard Black would only be able to spend a maximum of US$5,000 a month. Other credit cards offered by the majority Canadian-owned bank would have a US$2,000 limit, the report relays. Republic Bank made similar changes to the forex limits on all its credit cards since September, 2023, reducing its credit limit to a maximum of US$5,000, the report notes. The decisions by these locally based commercial banks continue to have a crippling effect on MSMEs, the report discloses. The Sunday Business Guardian reached out to several small businesses, most of whom requested anonymity whose complaints have a common thread--"It's worse than ever before," the report says Some said they are already looking "outside T&T" to do business instead, the report relays. Another small businessperson reiterated that the ability of SMEs to pay their foreign suppliers in a timely manner is no longer possible, noting that relationships that were built up over years of doing business are starting to fray given the current lack of forex, the report relays. As a result, she said, local companies are getting bad credit ratings, the report discloses. In the area of electronics, one medium-sized business said it has been forced to only bring in the "essentials" for this Christmas like laptops, the report says. Other items such as home stereo systems and toys will not be brought in because they cannot afford to do so, the report discloses. The forex challenge has also affected the used-car business, the report notes. President of the T&T Automotive Dealers Association Visham Babwah said, "The recent cut in the forex from Royal Bank is having a devastating impact on the automotive industry. We are unable now to even import equipment. Besides bringing the cars into the country, we must have the up-to-date equipment to service and to repair these cars. "You have a very small limit now of US$2,000 . . . Some of these cars are modern cars so certain parts cannot be repaired. We have to import parts like sensors and everything we require for hybrid electric and these modern vehicles even the modern gasoline cars. What is happening now is we cannot have an inventory of spare parts," Babwah explained, the report notes. These constraints, mean that the customer has to wait until the required part is shipped, rendering people unable to use their vehicles for that period in some instances, the report discloses. "Sometimes the part might take longer to come because of shipping constraints we also have. We might be courteous to lend the customer a car for a week or two but it is untenable. We can't do this for everybody and everybody would be facing this same issue in automotive industry," Babwah added, the report notes. On whether importing fewer cars would alleviate the forex situation, Babwah was adamant this had nothing to do with importing vehicles saying, "I hear people saying, from time to time, that we should import fewer cars but that has nothing to do with the technical aspect of it . . . The repairs, training, the new equipment, all these are things that are being negatively affected," the report relays. To address the situation, Babwah called on the Central Bank, the Finance Minister and the commercial banks to examine their respective policies and enact the necessary changes to bring about a much needed reprieve, the report says. Babwah is also advising there be a meeting with all stakeholders, the report notes. "When and where there is a stakeholder meeting of course you know sometimes they invite specific groups. I would like all the groups to be invited and let us have our say so then they can have a true picture and understand what is happening and this meeting needs to happen ASAP because people are suffering for no apparent reason or for things that could be avoided," Babwah emphasized, the report adds. =============== X X X X X X X X =============== LATAM: Modest Foreign Investment Limits Caribbean Economic Outlook ------------------------------------------------------------------ Delisle Worrell at Jamaica Observer reports that the level of foreign investment reported for the Caribbean in the most recent update from the United Nations Economic Commission for Latin America and the Caribbean (ECLAC) does not augur well for the region's future economic growth. Foreign direct investment in 2023 is equivalent to less than 10 percent of gross domestic product (GDP) for all but three Caribbean economies, according to Jamaica Observer. The exceptions are Guyana, where thanks to the rapid expansion of the oil industry, the ratio of foreign investment to GDP is as high as 34 per cent, and Antigua-Barbuda and Grenada, with 14 and 13 per cent, respectively, the report relays. These three economies are also the only ones where foreign investment in 2023 is substantially higher than it was before the COVID-19 pandemic, the report notes. The Dominican Republic (DR) is the largest Caribbean economy for which data is reported; foreign investment in the DR was between three and four per cent of GDP, much the same as before COVID, the report says. Trinidad-Tobago, the largest English-speaking economy, recorded net outflows of investment from the domestic economy, before and after the pandemic, the report discloses. Suriname, which recorded average foreign investment of nearly six per cent before the pandemic, also reported a net foreign outflow in 2023, the report recalls. In Jamaica, The Bahamas, Barbados, Belize, Dominica, St Kitts-Nevis, and St Vincent and the Grenadines foreign investment ratios in 2023 were all significantly lower than the averages for pre-COVID years, the report says. Foreign investment is essential to sustain and accelerate the growth of Caribbean economies, the report notes. It is investment in the refurbishment, upgrade and expansion of hotel capacity which provides the basis for attracting more visitors, with the attendant benefits for restaurants and bars, sports, recreation and cultural activities, transport, security, cleaning and personal services, public utility services, etc, the report relays. Foreign investments in medical and educational facilities and services, telecommunications and similar facilities also create multiplier effects that help to accelerate growth, the report says. Foreign investment in mineral extraction and manufacturing will also have multiplier effects, though their impact may not be as widespread as for the services sectors, the report discloses. Foreign currency is essential for investment in economies as small as those of the Caribbean. Every investment involves the purchase of supplies and equipment that is imported, such as building materials, furnishings, computers, telecommunications equipment, vehicles and office supplies, the report relays. Investment which is made in local currency has to draw on the foreign reserves of the country in order to pay for these needed imports, the report notes. A robust inflow of foreign investment is also an indicator of a country's international competitiveness, the report discloses. International investors and investment bankers are always on the lookout for projects that offer a competitive rate of return, when all the circumstances and factors that affect profitability are accounted for, the report says. The things that have to be taken into account are many, and will depend on the nature of the investment, the report relays. They will always include the nature and quality of the product, the market for which it is intended, and what competitors have on offer, the report notes. They will also include government administrative and financial management, health and educational services, labour market skills, the quality of infrastructure and social and political stability, the report relays. At the end of the day, however, we know whether a project is considered to be a competitive one if the investor goes ahead to provide financing, the report discloses. On the evidence from the ECLAC report, the Caribbean has evidently not turned the corner on the anaemic economic performance of recent years, the report notes. The region may have recovered from the deep contraction which countries suffered in 2020 with the onset of the COVID-19 pandemic, the report says. However, foreign investment is not yet forthcoming to increase productive capacity, earn foreign currency and accelerate the growth of Caribbean economies, except for oil-rich Guyana, the report adds. ********* 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 publication in any form (including e-mail forwarding, electronic re-mailing and photocopying) is strictly prohibited without prior written permission of the publishers. Information contained herein is obtained from sources believed to be reliable, but is not guaranteed. The TCR Latin America subscription rate is US$775 per half-year, delivered via e-mail. Additional e-mail subscriptions for members 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. . * * * End of Transmission * * *