/raid1/www/Hosts/bankrupt/TCRLA_Public/241213.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
L A T I N A M E R I C A
Friday, December 13, 2024, Vol. 25, No. 250
Headlines
A R G E N T I N A
BUENOS AIRES: Moody's Rates $600M Sr. Unsec. Medium-Term Notes Caa3
B A R B A D O S
BARBADOS: Launched Debt-for-Climate-Resilience Operation
B R A Z I L
BRAZIL: Coffee Exporters Granted Grace Period in Debt Talks
NATURA & CO: Davis Polk Advises on Settlement w/ Avon Debtors
PRIO SA: Fitch Affirms 'BB' LongTerm IDR, Outlook Positive
D O M I N I C A N R E P U B L I C
DOMINICAN REPUBLIC: Senate approves 2025 Budget Bill
E C U A D O R
INTERNATIONAL AIRPORT: Fitch Affirms B Rating on $400M Sr Sec Notes
G U A T E M A L A
CT TRUST: Fitch Affirms 'BB+' LongTerm IDR, Outlook Stable
H O N D U R A S
HONDURAS: Can Withdraw US$198M From Credit Facility, IMF Says
P A N A M A
SIXTEENTH MORTGAGE-BACKED: S&P Affirms 'CCC+' Rating on C Notes
- - - - -
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A R G E N T I N A
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BUENOS AIRES: Moody's Rates $600M Sr. Unsec. Medium-Term Notes Caa3
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Moody's Ratings has assigned a Caa3 rating to the Senior Unsecured
Medium-Term Notes to be issued by the City of Buenos Aires for up
to USD600 million under its Medium-Term Note Program. The rating is
in line with the City's long term foreign currency debt rating. The
outlook is stable.
RATINGS RATIONALE
The rating is positioned one notch above the Government of
Argentina (Ca, stable), because Moody's view the City of Buenos
Aires' idiosyncratic risk profile as relative stronger than the
sovereign because of the city's large economy, strategic importance
and track record of operating surpluses underpinned by a
consistently prudent fiscal approach. The Caa3 rating furthers
considers that Buenos Aires can withstand a prolonged restriction
on market access given that its foreign-currency-denominated debt
profile is adequate compared with its liquidity and cash
generation. Nonetheless, the significant macroeconomic and
financial links with the sovereign constrains the rating.
The proposed Notes issuance (Series 13 Notes) has been authorized
by the City's Laws N° 6.734 and 6.504 and will serve for liability
management purposes. The City of Buenos Aires will use the net
proceeds of the Notes to pay, repurchase or refinance up to USD550
million of nominal value of its 7.50% Series 12 Senior Unsecured
Medium-Term Notes due 2027 pursuant to a public tender offer made
by the City on December 2, 2024.
The Notes, which constitute direct, unconditional, unsecured and
unsubordinated obligations of the City will be denominated and
payable in US dollars. Amortization will take place in three annual
installments and the notes will pay fixed interest rate on a
semi-annual basis. The issuance will be subject to the English
Law.
The assigned ratings are based on preliminary documentation
received by us as of the rating assignment date. Moody's do not
expect changes to the documentation reviewed over this period nor
anticipates changes in the main conditions that the Notes will
carry. Should issuance conditions and/or final documentation of
these Notes deviate from the original ones submitted and reviewed
by the rating agency, Moody's will assess the impact that these
differences may have on the ratings and act accordingly.
A comprehensive review of all credit ratings for the respective
issuer(s) has been conducted during a rating committee.
RATING OUTLOOK
The stable outlook reflects Moody's expectation of adequate and
stable credit metrics despite the difficult operating environment
for Argentine issuers, including the exposure to the sovereign's
policymaking. The outlook reflects Moody's assumption that the
investors' recovery in an event of default would remain consistent
with the Caa3 rating.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATING
Given the strong macroeconomic and financial linkages between the
Government of Argentina´s and Sub-sovereigns economic and
financial ratings, and upgrade of Argentina´s sovereign bonds
ratings and/or the improvement of the country´ operating
environment could lead to an upgrade of the City of Buenos Aires
ratings.
Conversely, a downgrade in Argentina's bond ratings and/or further
systemic deterioration or idiosyncratic risks arising in the City
of Buenos Aires -such as a rapid increase in the debt to total
revenues ratio of the City- could exert downward pressure on the
ratings assigned and could translate into a downgrade in the near
to medium term.
The principal methodology used in this rating was Regional and
Local Governments published in May 2024.
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B A R B A D O S
===============
BARBADOS: Launched Debt-for-Climate-Resilience Operation
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Barbados has successfully completed an unprecedented debt-for
climate operation to finance water and sewage projects resilient to
climate change. Through support from its international funding
partners, Barbados replaced outstanding, more expensive debt with
more affordable financing, generating US$125 million in fiscal
savings which will be used to enhance water resource management and
increase water and food security.
CIBC Caribbean, as lead arranger, successfully closed the
Sustainability Linked Loan transaction. The loan was backed by
US$300 million in guarantees - US$150 million each from the
Inter-American Development Bank (IDB) and the European Investment
Bank (EIB), the latter under the European Union's Global Gateway
Initiative. With the support of the guarantees, Barbados secured a
long-tenor, local currency loan at favorable conditions arranged by
CIBC Caribbean, with regional banks investing in the transaction.
The debt conversion will create the necessary fiscal space to
finance upgrading the South Coast sewage treatment plant into a
modern water reclamation facility plus several associated
facilities. The water reclamation facility, one of the first in the
Caribbean, will produce water with a suitable quality for use in
agricultural irrigation and groundwater recharge.
The additional fiscal space also allows for investments to reduce
water losses and improve the sewer system. The reduction in marine
and groundwater pollution will help protect marine ecosystems and
nearshore reefs, groundwater quality and safeguard public health.
The IDB and the Green Climate Fund (GCF) are providing a total of
US$110 million upfront funding for the project, including a US$40
million grant from the GCF.
Barbados, one of the world's most water-scarce countries, faces an
average per capita water availability four times less than the
global average—a challenge set to worsen with climate change. It
also faces a large annual food import bill, as farmers lack water
to expand crop production.
The debt-for-climate conversion has been structured as a Sovereign
Sustainability-Linked Loan (SSLL), marking the first SSLL tied to a
sovereign water security project. The sustainability targets
underpinning the loan relate to the volume and quality of reclaimed
water generated by the upgraded plant. If the targets are not met,
the government incurs a financial penalty, which will be paid into
a specialized trust for environmental investments, the Barbados
Environmental Sustainability Fund.
IDB and CIBC Caribbean acted as Sustainability Structuring Agents
with the support of CIBC's Global Sustainable Finance Team.
Sustainalytics, a leading provider of second-party opinions for
sustainability-linked financial instruments, reviewed Barbados'
Climate Resilience Sovereign Sustainability-Linked Financing
Framework to which the SSLL is aligned. They found that the
Framework aligns with international best practices, assessing the
Key Performance Indicator (KPI) as "strong" and the Sustainability
Performance Target (SPT) as "highly ambitious."
The transaction will help Barbados advance its resilience plans
outlined in the country's Updated Nationally Determined
Contribution (NDC) and its Investment Plan for Prosperity and
Resilience, in alignment with the Paris Agreement and the country's
Roofs to Reefs Program, by enhancing climate resilience through
increasing water availability and food security and preventing
marine pollution.
Prime Minister Hon. Mia Mottley, SC, MP:
"In the face of the climate crisis, this groundbreaking transaction
serves as a model for vulnerable states, delivering rapid
adaptation benefits for Barbados. With upfront funding from our
partners, we are building a state-of-the-art facility to boost
water management, food security, and resilience—showcasing how
innovation and cooperation drive environmental and fiscal gains."
IDB President Ilan Goldfajn:
"This is an important milestone in several dimensions. It is the
first debt-for-climate operation focused on climate resilience,
paired with a groundbreaking financial innovation with unprecedent
partnerships," said IDB President Ilan Goldfajn. "I will have the
opportunity to be in Barbados in a few days to do a deep dive on
this operation and related project and see how we can replicate
this model in other instances. This is impact at scale with
innovation and partnership at work."
EIB President Nadia Calvino:
"The European Investment Bank is providing innovative financing
solutions to support those most vulnerable to climate change,
alongside our partners, the Inter-American Development Bank, the
Green Climate Fund and the European Commission," said EIB Group
President Nadia Calvino. "As the Climate Bank, we are proud to be
part of the first debt-for-climate resilience conversion, which
will support vital investments in Barbados and could give us an
important model for other such operations in the future."
CIBC Caribbean's Chief Executive Officer, Mark St. Hill:
"Barbados' initiative enhances climate resilience and sets a
benchmark for sustainable adaptation for the Caribbean. CIBC
Caribbean is honored to again collaborate with the Government of
Barbados and multilateral agencies like the IDB and EIB in setting
precedents for innovative financial mechanisms that drive
environmental stewardship in our region. This partnership
underscores our commitment to accelerating climate action and
fostering sustainable development across the Caribbean."
GCF Executive Director, Mafalda Duarte:
"Debt-for-climate conversions can support responses to two
overlapping crises: constraining debt and the escalating climate
emergency. The Green Climate Fund is a proud partner of Barbados in
bringing a coalition of financiers together, all backing an
innovative financial instrument aimed at helping the island nation
achieve its development and climate goals."
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B R A Z I L
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BRAZIL: Coffee Exporters Granted Grace Period in Debt Talks
-----------------------------------------------------------
Bloomberg News reports that Brazil coffee exporters owned by
Montesanto Tavares Group Participacoes SA were granted a 60-day
grace period to renegotiate debt with creditors.
The decision, seen by Bloomberg News, was issued Friday, Dec. 6, by
Judge Murilo Silvio de Abreu. The judge earlier declined a similar
request for a grace period from the two companies owned by
Montesanto -- Atlantica Exportacao e Importacao SA and Cafebras
Comercio de Cafes do Brasil SA, according to the report.
Futures prices for arabica beans -- the variety favored for
high-end brews -- have been on a rampage, jumping around 70%
between January and late November to the highest in more than four
decades, according to the report. When prices rise, brokers require
coffee producers and exporters to put up more cash in the form of
margin deposits to cover possible losses.
Court documents filled by Montesanto show a list of companies to
which Atlantica and Cafebras owe about 530 million Brazilian reais
($87.8 million) in the form of margin calls. That list includes
Cargill as well as Marex Group and Banco Pine SA among the main
creditors, adds the report.
About Brazil
Brazil is the fifth largest country in the world and third largest
in the Americas. Luiz Inacio Lula da Silva won the 2022 Brazilian
general election. He was sworn in on January 1, 2023, as the 39th
president of Brazil, succeeding Jair Bolsonaro.
In October 2024, Moody's Ratings has upgraded the Government of
Brazil's long-term issuer and senior unsecured bond ratings to
Ba1 from Ba2, the senior unsecured shelf rating to (P)Ba1 from
(P)Ba2; and maintained the positive outlook.
S&P Global Ratings raised on Dec. 19, 2023, its long-term global
scale ratings on Brazil to 'BB' from 'BB-'. Fitch Ratings
affirmed on Dec. 15, 2023, Brazil's Long-Term Foreign-Currency
Issuer Default Rating (IDR) at 'BB' with a Stable Outlook.
DBRS' credit rating for Brazil was last reported at BB with
stable outlook at July 2023.
NATURA & CO: Davis Polk Advises on Settlement w/ Avon Debtors
-------------------------------------------------------------
Davis Polk is advising Natura &Co Holding S.A. and certain of its
affiliates in connection with the chapter 11 proceedings of its
non-operational subsidiary Avon Products, Inc. (API) and other
non-operational Avon entities, including Natura's coordinated
settlement of the Avon debtors' bankruptcy estate claims and a
$125
million credit bid for substantially all of the Avon debtors'
assets.
Following the Avon debtors' August 2024 voluntary chapter 11
filings in the United States Bankruptcy Court for the District of
Delaware, the Avon debtors sought bankruptcy court approval for a
settlement with Natura &Co and for Natura &Co to serve as stalking
horse bidder with a credit bid of $125 million for substantially
all of the Avon debtors' assets.
The official committee of unsecured creditors appointed in the
Avon
debtors' cases objected to the proposed Natura &Co. settlement and
sale and filed motions seeking (a) to dismiss the Avon debtors'
bankruptcy cases and (b) derivative standing for the committee to
pursue estate causes of action. Negotiations among Natura &Co, the
Avon debtors and the committee resulted in the committee
withdrawing its various objections and motions in exchange for a
revised global settlement, pursuant to which Natura &Co agreed to,
among other things, (i) increase cash contributions to the Avon
debtors' estates to approximately $34 million, (ii) fund in full
the DIP financing, (iii) waive all secured and unsecured claims
not
being credit bid and (iv) leave certain other assets in the Avon
debtors estate as part of the sale.
Both the global settlement and the credit bid sale were approved
by
the Honorable Craig T. Goldblatt at a hearing on December 4, 2024.
Following the bankruptcy court's approval of the settlement and
sale, the Avon debtors expect to seek approval of a chapter 11
plan
of liquidation to distribute their remaining assets to general
unsecured creditors.
API is the non-operational holding company of the Avon beauty
brand
and of Avon operations outside the United States, which include
more than 50 countries in five continents.
Natura &Co is a Brazilian cosmetics company, headquartered in São
Paulo. Natura &Co connects more than 200 million clients
worldwide,
engaging them through nearly seven million dedicated consultants
and representatives, 900 stores and franchises and 19,000
employees
The Davis Polk restructuring team includes partner Darren S.
Klein,
counsel Josh Sturm and associates Amber Leary, Mariya Dekhtyar and
Kevin L. Winiarski. The litigation team includes partner Elliot
Moskowitz, counsel Marc J. Tobak and associates James C. Butler,
Christina Costello and Thomas Hislop. The mergers and acquisitions
team includes partner Michael Senders and associate Andrew R.
Board. The finance team includes partner David J. Kennedy and
associate Anmol Sheth. The intellectual property team includes
partner Frank J. Azzopardi and associate Lachlan J. Forrester.
Partner Manuel Garciadiaz is providing corporate advice. Members
of
the Davis Polk team are based in the New York and São Paulo
offices.
Davis Polk refers to Davis Polk & Wardwell LLP, a New York limited
liability partnership, and its associated entities.
About Natura & Co Holding S.A.
Natura is one of the largest conglomerates in the global CF&T
segment, consisting of two iconic brands, Natura and Avon.
Company's founders control approximately 38% of shares, while
the remainder are listed on the Brazilian stock exchange.
As reported in the Troubled Company Reporter-Latin America on
April 5, 2024, Fitch Ratings has upgraded Natura &Co Holding
S.A.(Natura) and Natura Cosmeticos S.A.'s Long-Term Foreign and
Local Currency Issuer Default Ratings (IDRs) to 'BB+' from 'BB'
and National Scale Rating to 'AAA(bra) from 'AA+(bra)'. Fitch
has also upgraded Natura & Co Luxembourg Holdings S.a.r.l's
unsecured notes to 'BB+' from 'BB'. In addition, Fitch has
affirmed Avon Products, Inc. and its unsecured notes at 'BB'.
Rating Outlook is Stable. In August 2024, Fitch affirmed its
ratings.
On Aug. 13, 2024, S&P Global Ratings lowered its issuer credit
rating on Avon Products Inc. (API), a subsidiary of Natura & Co
Holding S.A, to 'D' from 'BB-'. At the same time, S&P lowered its
issue rating on API's debt to 'D' from 'BB-'.
About AIO US and Avon Products
AIO US Inc., Avon Products Inc, and some of its affiliates are
manufacturers and marketers of beauty, fashion, and home products
with operations and customers across the globe.
AIO US and its affiliates sought relief under Chapter 11 of the
U.S. Bankruptcy Code (Bankr. D. Del. Lead Case No. 24-11836) on
Aug. 12, 2024. In the petition filed by Philip J. Gund as chief
restructuring officer, AIO US disclosed $1 billion to $10 billion
in assets and debt.
Richards, Layton & Finger, P.A. and Weil, Gotshal & Manges LLP are
counsel to the Debtors. Ankura Consulting Group LLC serves as
restructuring advisor to the Debtors. Rothschild & Co US Inc is
the Debtors' investment banker and financial advisor. Epiq
Corporate Restructuring LLC acts as claims and noticing agent to
the Debtors.
PRIO SA: Fitch Affirms 'BB' LongTerm IDR, Outlook Positive
----------------------------------------------------------
Fitch Ratings has removed from Watch Positive and upgraded the
Long-Term National Scale ratings of PRIO S.A. (PRIO), Petro Rio
Jaguar Petroleo S.A. (Petro Rio Jaguar) and Petro Rio Jaguar's
debenture issues to 'AAA(bra)' from 'AA+(bra)'. The Rating Outlook
for the National Scale ratings is Stable.
Fitch has also affirmed PRIO's Long-Term Local and Foreign Currency
Issuer Default Ratings (IDRs), as well as PRIO Luxembourg Holding
S.a.r.l.'s (PRIO Lux) Foreign Currency IDR and its USD600 million
secured notes at 'BB'. The Outlook for the IDRs is Positive.
The upgrade in National Scale follows the closing of the Sinochem
acquisition, which brings a 40% interest in Peregrino field to
PRIO's portfolio, significantly increasing its scale. The Positive
Outlook for the IDRs reflects the expectation that PRIO will
continue to organically expand production, despite uncertainties
related to environmental approvals, while preserving its strong
financial profile, robust reserve base and high efficiency.
Key Rating Drivers
Acquisition is Positive: The Sinochem acquisition increases PRIO's
proven reserves (1P) to 740 million boe (+18%) and 1P production to
120 kboe/d (+42%). In Fitch's view, the higher scale and the
maintenance of a strong balance sheet more than compensate for the
marginal negative impact on efficiency. PRIO's overall discount to
Brent should increase to USD5.5/boe, from USD3.0/boe, reflecting
Peregrino's lower quality oil, while its lifting cost should
slightly increase. PRIO should remain among the world's most
efficient independent producers, generating FFO close to USD37/boe
produced. Equinor will continue to operate the asset with the
remaining 60% interest. The acquisition reduces operating risks
through greater asset diversification and better positions PRIO to
develop growth opportunities.
Uncertainties in Production Growth: Production levels considered in
Fitch's base-case scenario depend on PRIO obtaining licenses for
drilling in Wahoo and launching the pipelines to connect its
production to Frade's FPSO and environmental approvals for
workovers in Frade and Tubarao Martelo fields. Fitch projects
PRIO's production to reach 82 kboe/d in 2024 and 154 kboe/d in
2025, peaking at 175 kboe/d in 2026. Projections consider all four
wells of Wahoo becoming operational by end 2025, adding 27 kboe/d
in 2025 and 40 kboe/d in 2026.
The Wahoo startup in 2025 and the strong growth from Albacora Leste
should more than offset the depletion of the other fields. PRIO's
track record mitigates the increasing execution risks as the
company advances on ultradeep waters in Albacora Leste, which
contributes more than 30% of the output estimated through 2028.
Nearly 40% of the production should come from the Frade-Wahoo
cluster.
Strong Financial Profile: Fitch projects EBITDA of BRL10.0 billion
in 2024 and BRL14.8 billion in 2025, based on average Brent prices
of USD80/bbl and USD70/bbl, respectively. Assuming no dividend
distribution in 2024 and 25% dividend payout in 2025, net leverage
should increase to 1.4x this year (or 0.9x on a pro forma basis)
and decline to 0.5x in 2025. Fitch expects around 70% of EBITDA to
translate into cash flow from operations (CFFO) over 2024-2026, on
average. FCFs should remain positive, around BRL2.5 billion in 2024
and BRL7.3 billion in 2025-2026, on average. Peregrino is well
developed and should add marginal incremental capex, although it
offers lower growth potential compared to previous acquisitions.
High Efficiency: PRIO's competitive cost structure makes it
resilient to price volatility, while the robust reserve base and
ownership of core equipment add flexibility to adjust capex
according to market cycles. The issuer's lifting cost should
continue to stand out among its peers, reflecting its expertise and
its asset concentration in the Campos Basin. Fitch projects lifting
costs of USD8.4/boe in 2024, up from USD7.4/boe in 2023, then
declining to USD8.2/boe in 2025 and USD6.9/boe in 2026. The higher
cost in 2024 mainly reflects production interruptions. The
Wahoo-Frade tieback and Albacora Leste's ramp-up should increase
efficiency. PRIO's strategy of selling directly to final customers
reduces the overall discounts but may add some price volatility
arising from logistic risks.
Equalized Ratings: Fitch equalizes the ratings of Petro Rio Jaguar
and PRIO Lux's with that of PRIO, given the guarantees provided by
the parent company to all or most of the debts issued by these
subsidiaries, according to Fitch's "Parent and Subsidiary Linkage
Rating Criteria." Petro Rio Jaguar is also the main subsidiary,
accounting for almost 90% of total production estimated through
2028. It concentrates the working interests in Albacora Leste,
Frade and Wahoo, the group's largest concessions.
Derivation Summary
PRIO's high profitability is a key differentiation factor relative
to its Brazilian peer 3R Petroleum Oleo e Gas S.A. (Brava, IDR
BB-/Outlook Stable) and to North American oil-weighted producers in
the onshore Permian basin (Texas/New Mexico), such as Matador
Resources Company (Matador; IDR, BB-/ Positive), SM Energy Company,
L.P. (SM; IDR BB/Stable) and Vermilion Energy Inc. (Vermillion;
IDR, BB-/Stable).
Brava and Vermillion have similar production scales, with 1P
production averaging close to 95 kboe/d and 85 kboe/d,
respectively, over 2024-2026. Brava has a broader asset base,
operating several assets across six different basins onshore and
offshore, but its lower profitability makes it less resilient than
PRIO to market downturns. Fitch projects PRIO's half-cycle costs
around USD12/boe over 2024-2026, which is well below the estimates
for Brava (USD28/boe) and Vermillion (USD23/boe) over the same
period.
The acquisition places PRIO close to the 'bbb' range of production
(175 to 700 kboe/d), although not on a sustaining basis. Matador
and SM Energy operate onshore fields within that range, from 170
kboe/d to 190 kboe/d, but their cost structure is slightly higher
than PRIO's, with average half-cycle costs estimated between
USD13/boe and USD15/boe over the 2024-2026 period.
Considering royalties, cash tax, debt interest and other costs,
PRIO should generate operating cash flow of around USD37/boe
produced, as measured by funds from operations (FFO), which is
beyond the estimates for the other two peers (SM Energy: USD26/boe
over 2024-2026, on average; Matador: USD34/boe). The estimates for
PRIO incorporate a negative impact from the Sinochem acquisition.
PRIO also compares favorably with its American peers in terms of 1P
reserve life. Fitch estimates a seven- to nine-year range over
2024-2026, on average, for Matador, SM Energy and Vermillion, and
12 years for PRIO for 2025-2026 (and the same level for Brava).
In terms of its financial profile, PRIO compares favorably with
Brava, Matador and SM Energy. Fitch projects EBITDA net leverage
ratios close to 1.5x for these peers over 2024-2026, on average,
above the 0.6x ratio estimated for PRIO.
Key Assumptions
- Average Brent prices from 2024 to 2027 (USD/bbl): 80, 70, 65,
60;
- Wahoo first oil in first half 2025;
- Average daily production from 2024 to 2027 (kboe/d): 82; 154;
175; 171;
- Oil sales consider discount to Brent around USD5.5/bbl;
- Lifting cost from 2024 to 2027 (USD/boe): 8.4; 8.2; 6.9; 7.0;
- Annual capex around BRL3.1 billion over 2024-2026;
- Dividend payout ratio of 25% of net income as of 2025.
RATING SENSITIVITIES
Factors That Could, Individually or Collectively, Lead to Negative
Rating Action/Downgrade
- Weak liquidity profile;
- Debt/EBITDA consistently above 3.0x;
- Major operational disruptions to key productive assets that
result in a material decrease in production.
Factors That Could, Individually or Collectively, Lead to Positive
Rating Action/Upgrade
- Net production approaching 150 kboe/d on a sustained basis with
1P reserve life of at least 10 years and/or sustained 1P reserves
close to 800 million boe;
- An upgrade is not applicable to National Scale ratings since they
are already at the highest level of the scale.
Liquidity and Debt Structure
Fitch expects PRIO to substantially reduce, over 2025, debt
maturities in 2026 that total BRL8.1 billion, including the secured
notes (BRL3.3 billion). The company's comfortable reserve life and
high operating efficiency should continue to support its strong
access to domestic and international funding to roll over its debt.
On September 2024, PRIO's debt totaled BRL16.4 billion, mainly
composed of bank loans (41%), debentures (36%), notes (19%) and M&A
payables (5%). Pro forma cash after Sinochem acquisition was enough
to cover short-term debt of BRL1.1 billion and short-term leases of
BRL304 million.
Issuer Profile
PRIO is a Brazilian oil and gas company, focused on operating and
developing offshore mature fields. Petro Rio Jaguar is PRIO's most
relevant subsidiary and Petrorio Lux is a funding vehicle that
incorporates the trading activity. PRIO has no controlling
shareholder.
MACROECONOMIC ASSUMPTIONS AND SECTOR FORECASTS
Fitch's latest quarterly Global Corporates Macro and Sector
Forecasts data file which aggregates key data points used in its
credit analysis. Fitch's macroeconomic forecasts, commodity price
assumptions, default rate forecasts, sector key performance
indicators and sector-level forecasts are among the data items
included.
ESG Considerations
The highest level of ESG credit relevance is a score of '3', unless
otherwise disclosed in this section. A score of '3' means ESG
issues are credit-neutral or have only a minimal credit impact on
the entity, either due to their nature or the way in which they are
being managed by the entity. Fitch's ESG Relevance Scores are not
inputs in the rating process; they are an observation on the
relevance and materiality of ESG factors in the rating decision.
Entity/Debt Rating Prior
----------- ------ -----
Petro Rio Jaguar
Petroleo S.A. Natl LT AAA(bra) Upgrade AA+(bra)
senior
unsecured Natl LT AAA(bra) Upgrade AA+(bra)
PRIO Luxembourg
Holding S.A.R.L LT IDR BB Affirmed BB
senior secured LT BB Affirmed BB
PRIO S.A. LT IDR BB Affirmed BB
LC LT IDR BB Affirmed BB
Natl LT AAA(bra) Upgrade AA+(bra)
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D O M I N I C A N R E P U B L I C
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DOMINICAN REPUBLIC: Senate approves 2025 Budget Bill
----------------------------------------------------
Dominican Today reports that the Dominican Senate swiftly approved
the 2025 General State Budget bill, declaring it urgent and passing
it in two consecutive readings. Of the 27 senators present, 26
voted in favor, ensuring the bill now proceeds to the Executive
Branch for promulgation, according to Dominican Today. This
approval followed an extensive analysis by the Bicameral Commission
comprising senators and deputies, the report notes.
In addition to the budget, the Senate passed other significant
measures, the report relays. A bill promoting the installation of
renewable energy sources in public and private buildings, aimed at
enhancing energy efficiency and savings, was approved in its second
reading, the report discloses. Proposed by senators Alexis
Victoria Yeb and Santiago JoseZorrilla, the legislation encourages
the adoption of alternative energy solutions for both new and
remodeled structures, the report says.
The Senate also approved bills to elevate the Las Cabuyas section
in La Vega to a municipal district and to transfer the Dominican
Republic Library's jurisdiction to the Ministry of Education, the
report notes. These measures reflect ongoing efforts to address
local development and national energy sustainability priorities,
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.
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.
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E C U A D O R
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INTERNATIONAL AIRPORT: Fitch Affirms B Rating on $400M Sr Sec Notes
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Fitch Ratings has affirmed International Airport Finance S.A.'s
USD400 million senior secured notes at 'B'. The issuance is
connected with Corporacion Quiport S.A. (Quiport), the
concessionaire of Quito's Mariscal Sucre International Airport. The
Rating Outlook has been revised to Stable from Positive.
The Outlook revision to Stable from Positive reflects Quiport's
challenging operating environment, affected by prolonged political
instability and a security crisis that has impacted the
international perception of the country, which could negatively
affect tourism and airport traffic volume. It also reflects the
energy crisis the country is undergoing, which could raise the
airport's operating cost. The rating has been affirmed given that
projected metrics remain robust and support high stresses in
projected volume.
RATING RATIONALE
The rating reflects Quiport's strategic but somewhat modest traffic
base, comprised mostly of origin and destination (O&D) and
leisure-oriented passenger traffic, a history of moderate
volatility, and some competition from Guayaquil's Jose Joaquin de
Olmedo International Airport, the country's second-largest airport.
The rating also reflects a tariff-setting mechanism that allows for
indexation according to increases in U.S. and Ecuadorian consumer
prices. The rated debt is fixed-rate, fully amortizing, and
includes additional liquidity in the form of an offshore DSRA and a
standby letter of credit (SBLC), enough to cover 12 months of debt
service.
Under Fitch's rating case, minimum and average debt service
coverage ratios (DSCRs) for 2025-2032 are 1.4x (in 2025) and 1.7x,
respectively. According to Fitch, Quiport's essential role as the
main gateway for the country will support its economic viability
even if the sovereign encounters a period of financial distress.
This, coupled with its ability to service debt under severe traffic
shocks, supports a rating that is two notches above Ecuador's
'CCC+' Long-Term Foreign Currency Issuer Default Rating (IDR).
Metrics are strong for the assigned rating according to Fitch's
applicable criteria.
KEY RATING DRIVERS
Revenue Risk - Volume - Midrange
O&D, Leisure-Oriented Airport: The airport is located in Quito's
metropolitan region, which accounts for 16% of the country's
population (2.7 million people), and had a smaller enplanement base
of 2.7 million departing passengers (pax) in 2023. The airport's
traffic base is mostly O&D (approximately 99% of total), with
leisure-oriented traffic exceeding business traffic.
Traffic volatility is moderate with the largest historic
peak-to-trough of 12.9% occurring between 2014 and 2016. Carrier
concentration in terms of revenue is low. There is some competition
from Ecuador's second largest airport, Guayaquil's Jose Joaquin de
Olmedo International Airport.
Revenue Risk - Price - Midrange
Dual Till Regulation: Regulated revenue tariffs are indexed
according to inflation in Ecuador and the U.S., and commercial
revenue has no tariff-setting restrictions.
Infrastructure Dev. & Renewal - Stronger
Modern Infrastructure: The airport is modern and well-maintained,
and has relatively detailed short- and long-term expansion plans.
Future expansions are to be funded with internal cash flow
generation, while the associated expenditures are smoothed through
a rolling capex reserve. Any requested changes to the airport's
Master Capex Plan as a result of material deviations to traffic
projections must be approved by the grantor. The Master Capex Plan
defines the works and milestones to be reached, but not specific
investment amounts, which must be estimated by the airport.
The debt structure also includes an offshore capex reserve account
or SLOC covering staggered percentages of the next 18 months' capex
needs.
Debt Structure - 1 - Stronger
Fully Amortizing Debt Structure with Strong Liquidity: The senior
secured debt is composed of a single fixed-rate U.S.
dollar-denominated tranche with a fully amortizing repayment
profile. Structural features include an offshore 12-month DSRA,
which limits transfer and convertibility risk and a capex reserve
account. The structure has robust debt incurrence and dividend
distribution tests.
Financial Profile
Under Fitch's rating case, minimum and average DSCR is 1.4x and
1.7x, respectively. DSCRs are commensurate with a higher rating
according to Fitch's applicable criteria.
PEER GROUP
Quiport's closest peer is ACI Airports SudAmerica, S.A. (ACI;
BB+/Stable), the indirect sponsor of Puerta del Sur S.A., which
holds the concession for Montevideo's Carrasco International
Airport in Uruguay. Both airports are smaller, main international
gateways to their countries. Under Fitch's rating case, minimum and
average DSCRs of ACI are 0.96x (2024) and 1.7x, respectively.
Although ACI's average DSCR is commensurate with higher ratings,
the DSCRs up to 2027 are close to 1.1x which, combined with the
current limited liquidity, constrains the rating. Quiport's metrics
(minimum DSCR 1.4x and average 1.7x under rating case) are also
consistent with a higher rating.
RATING SENSITIVITIES
Factors that Could, Individually or Collectively, Lead to Negative
Rating Action/Downgrade
- Annual traffic growth consistently below 3%;
- Deterioration of the credit profile of Ecuador's sovereign IDR;
- Substantial increase in energy costs that are expected to prevail
in the long term.
Factors that Could, Individually or Collectively, Lead to Positive
Rating Action/Upgrade
- Positive rating action on the sovereign, as long as project
fundamentals and metrics support a higher rating;
- Stable operating environment supporting annual traffic growth
above 3% and stable operating cost.
SECURITY
Notes Collateral: The notes are secured for the benefit of the
holders by a first-priority security interest in (a) all of the
Capital Stock of the Issuer, (b) the Lender's rights in the Loans
Agreement, (c) the Lender Debt Service Payment Account and the
Lender Debt Service Reserve Account and amounts on deposit therein,
(d) all of the Capital Stock of the Borrower, (e) all future
subordinated indebtedness incurred by the Issuer and (f) any
proceeds of the Issuer.
Loans Collateral: The Loans are secured for the benefit of the
Senior Secured Loans Parties by a Lien on all future Subordinated
Indebtedness incurred by the Borrower and all proceeds thereof. In
addition, the Lender will benefit from an assignment of the trust
beneficiary rights in respect of the Onshore Borrower Trust
Agreement pursuant to the Assignment of Fiduciary Trust Rights,
except for the Municipality's interest over the NQIA Surcharges.
ESG Considerations
The highest level of ESG credit relevance is a score of '3', unless
otherwise disclosed in this section. A score of '3' means ESG
issues are credit-neutral or have only a minimal credit impact on
the entity, either due to their nature or the way in which they are
being managed by the entity. Fitch's ESG Relevance Scores are not
inputs in the rating process; they are an observation on the
relevance and materiality of ESG factors in the rating decision.
Entity/Debt Rating Prior
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International Airport
Finance S.A.
International Airport
Finance S.A./Airport
Revenues - First Lien/1 LT LT B Affirmed B
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G U A T E M A L A
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CT TRUST: Fitch Affirms 'BB+' LongTerm IDR, Outlook Stable
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Fitch Ratings has affirmed CT Trust's Long-Term Foreign Currency
(FC) and Local Currency (LC) Issuer Default Ratings (IDRs) at 'BB+'
with a Stable Rating Outlook. Fitch has also affirmed CT Trust's
senior unsecured debt at 'BB+'.
CT Trust, a special purpose vehicle of Comcel Group (Comcel) and a
wholly-owned subsidiary of Millicom International Cellular S.A.
(BB+/Stable), has its ratings linked to Millicom. This linkage
reflects the absence of financial ring-fencing between the entities
and Millicom's ability to access the subsidiary's cash flow through
dividends and other measures. Comcel's ratings also reflect its
strong market position and robust financial profile, partly offset
by the relatively weak operating environment in Guatemala.
Key Rating Drivers
Parent-Subsidiary Relationship: Fitch employs a consolidated
approach to the ratings of Comcel and Millicom. This approach,
guided by Fitch's Parent and Subsidiary Rating Linkage Criteria,
limits Comcel's ratings to the 'BB+' level of its parent, Millicom,
despite Comcel's 'bbb-' Standalone Credit Profile (SCP). As a
holding company, Millicom relies solely on upstream cash flows from
its subsidiaries.
The lack of a legal ring-fencing mechanism to restrict cash flows
to Millicom exposes Comcel to dividend distributions that could
pressure its FCF, given Comcel's significant role within the group.
Additionally, access and control remain open, with no formal policy
separating funding and subsidiary upstream lending occurring.
Leading Market Position: Comcel's SCP of 'bbb-' is attributed to
its robust capital structure and dominant market presence. As the
largest mobile operator in Guatemala (BB/Stable), Comcel commands
an estimated 63% market share in prepaid mobile subscribers and
approximately 42% in broadband internet. These positions are
bolstered by its reliable network, high service quality, and strong
brand recognition. The company's spectrum acquisitions in 2023 have
strengthened its mobile network, enabling it to counteract
aggressive competition from its main rival, Claro. This, along with
significant growth in Comcel's emerging postpaid mobile segment, is
expected to sustain strong blended mobile ARPU growth.
Strong Margins: Comcel boasts one of the highest operating margins
among telecom operators in the region, with LTM EBITDA margins
around 49% as of September 2024. These margins are expected to
remain stable over the rating horizon, as reduced competitive
pressures and operational savings from efficiency initiatives are
anticipated to be partially balanced by increased lease expenses.
Low Leverage: Comcel's 'bbb-' Standalone Credit Profile (SCP)
reflects its low leverage and strong FCF before upstreams to
Millicom. The company's net debt/EBITDA ratio is expected to remain
around 1.5x over the rating horizon, supported by robust
operational cash generation. Fitch does not anticipate any
significant improvement in Comcel's leverage profile in the medium
term, as excess cash is expected to be upstreamed to Millicom. Cash
flow from operations is projected to be around USD 650 million
annually through 2026, with capital expenditures in the range of
USD170 million-USD180 million.
Weak Operating Environment: Comcel's ratings are limited by the
relatively weak operating environment in Guatemala, characterized
by poor systemic governance, a low sovereign rating, and
vulnerability to economic shocks. These factors contribute to more
volatile operating conditions, affecting political and regulatory
stability as well as economic circumstances.
Derivation Summary
Comcel's largest competitor, Claro Guatemala, is a subsidiary of
America Movil S.A.B. de C.V. (AMX; A-/Positive). AMX has a stronger
financial profile than Comcel's parent, Millicom, but Fitch does
not expect the company to materially take market share from Comcel
over the rating horizon, as Comcel maintains a leading brand
presence and superior existing network infrastructure.
Comcel's credit profile is strong compared with its regional
telecom peers in the 'BB' rating category due to its high
profitability, robust cash-flow generation and low leverage,
underpinned by its leading market shares and solid network quality
and coverage. The company's credit profile is similar to its peers
Telefonica Celular del Paraguay S.A.E. (Telecel, BB+/Stable),
Millicom's subsidiary in Paraguay, and Telecomunicaciones
Digitales, S.A. (BB+/Stable), Millicom's subsidiary in Panama.
Another 'BB' category peer, Colombia Telecomunicaciones S.A. E.S.P.
BIC (ColTel; BB+/Stable), has a solid market position in the
competitive Colombian market, and benefits from its diversified
service offerings. ColTel has sustained weaker margins than Comcel,
due in part to heightened competition in the Colombian market,
while ColTel's FCF has also been pressured by high capital
intensity needs. Comcel's lack of geographic diversification, weak
revenue diversification and high shareholder returns constrain the
rating.
Key Assumptions
- Mobile subscriber growth roughly flat over the rating horizon;
- Blended mobile ARPU growing low single digits over the rating
horizon, driven by lower competitive pressures in prepaid and
strong postpaid migration, partially offset by softer postpaid
ARPUs;
- Low single-digit growth in homes passed, with flat to slightly
negative home ARPU over the forecast horizon;
- Revenue generating unit per home passed declining gradually over
time due to secular trends;
- EBITDA margins near 50% over the medium term as cost efficiency
savings are partially offset by higher lease expense;
- Capital intensity (including spectrum) remaining relatively
stable around 10%-11% over the medium term;
- Shareholder distributions hold leverage to around 1.5x on a net
debt/EBITDA basis over the medium term and 2.0x on a lease-adjusted
basis.
RATING SENSITIVITIES
Factors that Could, Individually or Collectively, Lead to Positive
Rating Action/Upgrade
- An upgrade of Millicom, Comcel's controlling shareholder, would
have positive rating implications.
Factors that Could, Individually or Collectively, Lead to Negative
Rating Action/Downgrade
- A negative rating action on Millicom;
- A multi-notch downgrade of Guatemala's sovereign rating or
Country Ceiling could lead to a downgrade of Comcel's Foreign
Currency IDR.
Liquidity and Debt Structure
Solid Liquidity: Comcel maintains a robust liquidity profile
supported by its substantial cash reserves, stable cash flow from
operations, and well-distributed debt maturities. As of Sept. 30,
2024, the company held USD114 million in cash and equivalents, with
no short-term debt maturities. Approximately 63% of cash and
equivalents were held in USD, with the remaining amount in GTQ. The
company's debt consisted of USD495 million in bank financing and
USD737 million bonds due 2032.
Issuer Profile
CT Trust is a special-purpose vehicle (SPV) created in the Cayman
Islands to issue senior unsecured notes on behalf of Comcel Group,
a group of several legal entities providing telecommunication
services in Guatemala under the Tigo brand.
Summary of Financial Adjustments
Fitch applied standard lease adjustments.
MACROECONOMIC ASSUMPTIONS AND SECTOR FORECASTS
Fitch's latest quarterly Global Corporates Macro and Sector
Forecasts data file which aggregates key data points used in its
credit analysis. Fitch's macroeconomic forecasts, commodity price
assumptions, default rate forecasts, sector key performance
indicators and sector-level forecasts are among the data items
included.
ESG Considerations
The highest level of ESG credit relevance is a score of '3', unless
otherwise disclosed in this section. A score of '3' means ESG
issues are credit-neutral or have only a minimal credit impact on
the entity, either due to their nature or the way in which they are
being managed by the entity. Fitch's ESG Relevance Scores are not
inputs in the rating process; they are an observation on the
relevance and materiality of ESG factors in the rating decision.
Entity/Debt Rating Prior
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CT Trust (Comcel) LT IDR BB+ Affirmed BB+
LC LT IDR BB+ Affirmed BB+
senior unsecured LT BB+ Affirmed BB+
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H O N D U R A S
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HONDURAS: Can Withdraw US$198M From Credit Facility, IMF Says
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The Executive Board of the International Monetary Fund (IMF)
completed the first and second reviews of the arrangements for
Honduras under the Extended Fund Facility and Extended Credit
Facility. The completion of the reviews enables the authorities to
immediately draw about US$198 million (SDR 150 million), bringing
total disbursements under the program so far to about US$315
million (SDR 239 million). Honduras' 36-month arrangements totaling
about US$823 million (SDR 624.5 million) were approved on September
21, 2023.
In completing the review, the Executive Board assessed quantitative
performance targets for end-December 2023 and end-June 2024. The
Board assessed that while all end-December 2023 performance
criteria were met, the end-June 2024 criteria on net international
reserves, central bank net domestic assets, and the stock of
domestic arrears at the public electricity utility ENEE were not
met. The Board approved the authorities' requests for waivers of
non-observance of these end-June performance criteria on the basis
of corrective actions.
The Honduran economy has remained resilient, growing 3.6 percent in
2023 and projected to expand by close to 4 percent in 2024, despite
the negative impact of this year's El Nino-related drought on
agricultural exports and energy production and a recent tropical
storm. Inflation has also continued to decline close to the 4
percent objective. Fiscal performance has been strong, with the
fiscal deficit outperforming the program target in 2023 at 1.3
percent of GDP and projected to outperform again in 2024 at around
1.5 percent of GDP. On the other hand, international reserves,
while remaining adequate, continued to decline in 2024 in the
context of the drought-related shock and lower-than-expected
external financing support.
At the conclusion of the Executive Board's discussion, Mr. Kenji
Okamura, Deputy Managing Director and Acting Chair made the
following statement:
"The Honduran economy remains resilient despite global and domestic
challenges, including several climate-related shocks. The
authorities' policy adjustments and remedial actions demonstrate
strong commitment to their Fund-supported program, which aims to
durably strengthen macroeconomic stability and foster inclusive,
sustainable growth.
"The authorities' strong focus on fiscal discipline, as also
reflected in the 2025 draft budget submitted to Congress, has
opened space for greater public investment. Resolute efforts are
still needed to strengthen the social safety net and protect the
most vulnerable segments of the population. Continued progress in
broadening the tax base, strengthening budget execution, and
enhancing public financial management frameworks remains essential
to support the authorities' development efforts and preserve debt
sustainability.
"The recent decisive monetary policy tightening was important to
preserve low inflation and the crawling band exchange rate regime.
The strengthened implementation of the exchange rate crawl should
help improve competitiveness and preserve external stability,
including safeguarding international reserves. The authorities must
remain vigilant and stand ready to adjust policies as needed to
achieve these objectives.
"Promptly addressing energy sector challenges remains a priority.
The authorities have adopted measures to reduce electricity losses
and domestic arrears of the state-owned electricity company.
Continued progress on these fronts as well as strengthened
financial management and transparency of the state-owned company
are essential to promote needed investment in energy generation,
contain fiscal risks, and support medium-term economic growth.
"Steadfast implementation of structural reforms remains key to
fostering inclusive growth. Actions to simplify administrative
processes, enhance transparency, streamline procedures, and
strengthen procurement systems will help create a favorable
environment for investment and job creation. Additionally,
intensifying ongoing efforts to combat corruption and reinforce the
AML/CFT framework is vital for improving governance.
"The increasing frequency of climate change-related events calls
for accelerating the implementation of climate adaptation policies.
To support these efforts, the authorities have requested an
arrangement under the Resilience and Sustainability Facility. Close
engagement with IMF staff on this area will continue."
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P A N A M A
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SIXTEENTH MORTGAGE-BACKED: S&P Affirms 'CCC+' Rating on C Notes
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S&P Global Ratings affirmed its long-term ratings on Sixteenth
Mortgage-Backed Notes Trust's series A, B, and C notes and La
Hipotecaria Panamanian Mortgage Trust's series 2021-1 certificates.
Sixteenth Mortgage-Backed Notes Trust is a Panamanian RMBS
transaction backed by a portfolio of Panamanian mortgages
originated and serviced by Banco La Hipotecaria S.A. (not rated).
La Hipotecaria Panamanian Mortgage Trust's series 2021-1 is a
retranching structure of Sixteenth Mortgage-Backed Notes Trust's
series A notes.
Rating Actions
S&P said, "Following the action taken on our long-term sovereign
foreign currency rating on Panama to 'BBB-' from 'BBB', we tested
the transactions' capacity to withstand our sovereign default
stress scenarios under our cash flow model and determined that the
series A notes had sufficient credit protection to withstand such
tests; therefore allowing the ratings on the series A notes and the
series 2021-1 certificates to be above the sovereign rating on
Panama. Under our sovereign stress test, we have applied a
weighted-average foreclosure frequency and a weighted-average loss
severity of 31.44% and 36.72% respectively.
"Additionally, we have determined the transaction has a high
sensitivity to a sovereign default per our criteria; however, we
have limited each maximum rating differential above the sovereign
rating to one notch, reflecting our view of an increased
sensitivity to a sovereign default based on the fact that the
government of Panama is the provider of the subsidies for the
securitized mortgage loans."
Credit enhancement levels for Sixteenth Mortgage-Backed Notes Trust
available for the series A notes consists of excess spread,
subordination, and an interest reserve account. For the series B
notes, credit enhancement is limited to excess spread and
subordination, while for series C, credit enhancement is only
excess spread. In S&P's view, the current levels are sufficient to
support their current rating levels.
Transaction Summary
S&P said, "Since our last review, the overcollateralization ratio
(calculated as 1 minus liabilities, divided by current assets) has
slightly increased to 8.08% as of October 2024 from 7.93% in
October 2023. Calculated as of October 2024, per the transaction
documents, the credit enhancement ratio was 8.51% and remains above
the 6.00% minimum level that would detonate a trigger event.
"Since our last rating actions, the underlying portfolio continued
to perform adequately, with low default and delinquency ratios.
According to the servicer reports as of October 2024, the
cumulative default ratio, calculated per the legal documents, was
2.20%. This ratio has increased from 1.31% at the time of our last
review, but it remains within our expectations and is still far
from the 10.00% limit that would detonate a trigger event, in which
the series B interest payments would cease until the series A notes
are fully amortized."
According to information provided by the servicer, as of October
2024, the underlying portfolio was comprised of 2,684 loans and had
an outstanding balance of $92.22 million. The portfolio had a
weighted-average interest rate of 6.17% and a weighted-average
remaining term of approximately 274 months. The weighted-average
original loan-to-value (LTV) ratio was 89.9%, and the
weighted-average debt-to-income ratio (DTI) was 27.51%.
S&P said, "We analyzed the credit quality of the underlying pool
based on our criteria "Global Methodology And Assumptions:
Assessing Pools Of Residential Loans," published Jan. 25, 2019. In
our analysis of residential mortgage loans, we calculate the
projected losses for an archetypal pool of residential loans under
stress conditions commensurate with certain defined issue ratings.
"We estimate two main parameters: the foreclosure frequency, which
represents the proportion of loans in a pool likely to go into
foreclosure; and the loss severity, which is a measure of
loss-given default expressed as a percentage of the loan balance.
The results of our credit analysis, including the weighted-average
foreclosure frequency and the weighted-average recovery rate
represent inputs to our cash flow analysis.
"For this transaction, at the 'BBB' rating level, we determined a
24.55% weighted-average foreclosure frequency combined with a
32.60% weighted-average loss severity. The adjustments applied to
the weighted-average foreclosure frequency mainly reflected the
relatively high LTV at loan origination and higher DTI ratios
compared to our archetypical pool in Panama.
"We stressed the pool's cash flows, incorporating, among other
factors, various default patterns, default timings, interest rate
stresses, and prepayment rates. We also assumed a 48-month
foreclosure period for the mortgage assets.
"Per our counterparty risk assessment, the transaction is exposed
to Banco General S.A. (BBB/Stable A-2) as the transaction's bank
account provider. In addition, through certain provisions and the
minimum rating requirements stated on the legal documentation,
current ratings are supported."
Ratings Affirmed
Sixteenth Mortgage-Backed Notes Trust
Series A notes: 'BBB (sf)'
Series B notes: 'B- (sf)'
Series C notes: 'CCC+ (sf)'
La Hipotecaria Panamanian Mortgage Trust 2021-1
Series 2021-1 certificates: 'BBB (sf)'
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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
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