/raid1/www/Hosts/bankrupt/TCRLA

/raid1/www/Hosts/bankrupt/TCRLA_Public/250213.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 Thursday, February 13, 2025, Vol. 26, No. 32 Headlines A R G E N T I N A BANCO GALICIA: S&P Upgrades LongTerm ICR to 'B-', Outlook Stable BUENOS AIRES: S&P Raises ICRs to 'B-', Outlook Stable [] S&P Hikes Currency Ratings on 8 Argentine Companies to 'B-' C A Y M A N I S L A N D S C&W SENIOR: Fitch Assigns BB- Rating on $550MM Sr. Unsecured Notes C&W SENIOR: Moody's Rates New $550MM Senior Unsecured Notes 'B2' D O M I N I C A N R E P U B L I C DOMINICAN REPUBLIC: Reports Record Figure in Energy Generation J A M A I C A JAMAICA: Businesses Urged to Diversify Markets Amid Trade Shifts JAMAICA: Production Challenges Hinder Local Consumption of Eggs JN FINANCIAL: Grapples With $2.5BB Loss, Looks to Shed Some Assets M E X I C O ACCURIDE CORP: Gets Court Okay to Tap Additional $20MM Ch11 Loan N I C A R A G U A NICARAGUA: IMF Says Economic Performance Remains Robust P U E R T O R I C O ERC MANUFACTURING: Seeks Chapter 11 Bankruptcy in Puerto Rico - - - - - ================= A R G E N T I N A ================= BANCO GALICIA: S&P Upgrades LongTerm ICR to 'B-', Outlook Stable ---------------------------------------------------------------- S&P Global Ratings raised its long-term issuer credit rating on Banco Galicia to 'B-' from 'CCC', senior unsecured debt rating to 'B-' from 'CCC', and its subordinated debt rating to 'CCC' from 'CC'. At the same time, S&P raised its issuer credit ratings on Banco Patagonia to 'B-/B' from 'CCC/C'. The outlook on both entities is now stable. S&P said, "The rating action on these financial entities follows the upward revision of our T&C assessment based on our perception of modestly diminished risk of the sovereign interfering with the ability of domestic companies to access, convert, and transfer money abroad. The T&C assessment limits the rating on banks in Argentina. "At the same time, we revised the economic risk trend in our Banking Industry Country Risk Assessment on Argentina to positive from stable and the industry risk trend to stable from negative. We maintained the BICRA group classification at '9', with an economic risk score of '10' and an industry risk score of '7' (on a scale from '1' to '10', '1' being the strongest). "The positive trend in economic risk reflects our expectation that the current administration's comprehensive measures to reduce inflation, improve the central bank's balance sheet, and lower interest rates are gradually addressing existing imbalances in the banking sector. These actions are paving the way for economic stabilization and a return to sustained growth, which could enhance banks' operating performance and mitigate risks." The stable industry risk trend reflects a decrease in the risk of deposit volatility due to improving economic conditions and greater deposit confidence, as demonstrated by the high participation of Argentines in the tax amnesty. Although Argentina's economic conditions remain fragile and the sovereign lacks access to external capital markets, banks' high levels of liquidity and strong regulatory solvency help mitigate these challenges. Outlook The stable rating outlook on the entities reflects that on the sovereign rating. The outlook on the latter balances the risks posed by persistent economic vulnerabilities with recent progress in fiscal outcomes, easing inflation, a narrowing gap between the official and blue-chip exchange rate, and structural reforms undertaken to address long-standing weaknesses that have contributed to poor economic performance for many years. Downside scenario S&P could lower the ratings on both banks in the next six to 12 months if the risk of the sovereign interfering with the ability of domestic banks to access, convert, and transfer money abroad rises. Upside scenario S&P could raise the ratings on both banks if it raises the sovereign ratings to 'B-' and the banks meet the stress scenario for a sovereign default. The latter may be more challenging, as S&P anticipates that banks will increase lending, which could reduce their regulatory capital ratios. BICRA score snapshot* Argentina To From BICRA group 9 9 Economic risk 10 10 Economic resilience Extremely Extremely high risk high risk Economic imbalances Very high risk Very high risk Credit risk in the economy Very high risk Extremely high risk Industry risk 7 7 Institutional framework High risk High risk Competitive dynamics High risk High risk Systemwide funding High risk Very high risk Economic risk trend Positive Stable Industry risk trend Stable Negative *BICRA--Banking Industry Country Risk Assessment. Ratings List Upgraded; Ratings Affirmed To From Banco De Galicia Y Buenos Aires S.A.U. Issuer Credit Rating B-/Stable/NR CCC/Stable/NR Senior Unsecured B- CCC Subordinated CCC CC Upgraded To From Banco Patagonia S.A. Issuer Credit Rating B-/Stable/B CCC/Stable/C BUENOS AIRES: S&P Raises ICRs to 'B-', Outlook Stable ----------------------------------------------------- S&P Global Ratings raised its foreign and local currency issuer credit ratings to 'B-' from 'CCC' on the following LRGs: -- City of Buenos Aires; -- Province of Mendoza; -- Province of Neuquen; -- Province of Jujuy; and -- Province of Salta. S&P also raised its foreign and local currency issuer credit ratings on the following provinces to 'CCC+' from 'CCC': -- Province of Buenos Aires (PBA); -- Province of Entre Rios; and -- Province of Rio Negro. The outlooks on the eight issuer credit ratings are stable. S&P also raised its issue-level ratings on these LRGs to the current issuer credit rating level from 'CCC'. Outlook The stable outlooks on the eight Argentine LRGs reflect S&P's assessment of lower risk in accessing foreign currency to make debt service payments, juxtaposed with risks posed by Argentina's still weak external liquidity and persistent economic vulnerabilities. Significant risks remain despite recent progress in reducing fiscal imbalances and inflation, narrowing the gap between the official and blue chip exchange rate, and in undertaking structural reforms to address long-standing obstacles that have contributed to poor economic performance for many years. Downside scenario S&P said, "We could lower the ratings on these entities over the coming 12 months if adverse developments undermine the sovereign's already limited access to financing amid increased macroeconomic instability or a tightening of access to foreign exchange, impairing the Argentine LRGs' ability to service foreign-currency debt. In addition, if their individual credit profiles deteriorate--for example, if weaker budgetary performance strains liquidity--we could also lower the ratings over the next six-12 months. We would likely consider a debt exchange or restructuring by the local government as distressed, rather than opportunistic, and tantamount to a default at such low rating levels." Upside scenario S&P could raise the ratings on one or more of these entities in the next 12 months following an improvement in their individual credit quality, such as through resilient fiscal outcomes, along with adequate debt and liquidity management. For entities rated 'B-', the upgrade would also require a higher T&C assessment, which could follow from the sovereign's improved creditworthiness. This could occur amid further improvements in external liquidity and declining economic vulnerabilities, which would set the stage for greater stability and continued economic recovery. Under such a scenario, the central government would enjoy better access to funding from external capital markets, which would facilitate LRGs' access to external financing. Rationale S&P said, "Our upward revision of the T&C assessment and the upgrade of several Argentine LRGs to 'B-' reflect our perception of modestly diminished risk of the sovereign interfering with the ability of domestic issuers to access, convert, and transfer money abroad amid somewhat improved external indicators. "In our opinion, Argentine LRGs don't satisfy the conditions under our criteria to be rated above our T&C assessment of the sovereign. Moreover, LRGs are highly sensitive to sovereign risk. The country's macroeconomic imbalances have constrained subnational governments' space for effective financial planning and weighed on their budgetary execution. Moreover, we believe Argentine LRGs operate under a weak institutional framework, and stressed sovereign conditions often lead to swings in policies." In addition, the central government has historically passed fiscal stress to LRGs, most recently in the form of cuts to nonautomatic transfers or increased spending responsibilities. Still, despite pressure on their revenues from the sovereign's fiscal adjustment and an estimated 2.8% contraction in real GDP fiscal and economic pressures in 2024, all Argentine LRGs (except for the province of La Rioja [SD/--/--]) took steps to avoid default. As of September 2024, the average year-on-year real decline in revenues of the eight LRGs was 13%, given lower automatic and nonautomatic transfers, as well as own-source revenue following the steep economic downturn. Nonautomatic transfers account for 2.5% to 20% of total transfers the provinces receive; these were virtually entirely cut by the central government. Most provinces adjusted their fiscal accounts by cutting capex and operating expenditure, especially payroll amid high inflation. As of September 2024, provincial spending had declined 21% in real terms. Local governments didn't tap global capital markets last year because they were locked out. Therefore, LRGs serviced their debt through accumulated cash savings, peso-denominated issuances in the domestic capital market--for larger entities with a track record of such operations--and loans from domestic banks. The relatively smooth profile of foreign currency debt service, which totaled for all Argentine provinces US$2.6 billion in 2024, followed various LRG debt restructurings in 2020-2021. Domestic-currency obligations are generally less burdensome compared to their operating revenues while not all are indexed to inflation. In contrast with the sovereign, provinces have been able to roll over local debt instruments without recurring to swap-like transactions, which that could be considered as distressed exchanges at these ratings levels. S&P expects some recovery in LRG revenues in 2025 amid a rebound of the economy. However, it also expects spending pressure to rise after last year's fiscal adjustment. Declining inflation is key for predictability and long-term planning, but could pose budgetary challenges in the short term, as spending pressure exceeds revenue growth. Furthermore, some LRG administrations will look to increase capex in their second year in office. S&P said, "Except for the City of Buenos Aires, our base-case scenario assumes that access to external capital markets will be limited for LRGs this year. The city's financial and economic profile is significantly stronger than those of its peers, and its liquidity could very comfortably cover its debt service payments for the next couple of years. We incorporate this strength in the city's 'bb-' stand-alone credit profile (SACP)." In provinces of Mendoza, Neuquen, Jujuy and Salta, improved fiscal performance over the past several years has led to liquidity accumulation, supporting their capacity to finance moderate debt payments. This is reflected in the 'b-' SACP for these entities. Mendoza and Neuquen also have wider access to the domestic capital market: Mendoza issued ARP77 billion during the first half of 2024, and Neuquen issued US$100 million in October 2023 amid the transition in government. The PBA made a fiscal adjustment in 2024 and complied with all its foreign-currency debt obligations, while demonstrating strong capacity to roll over its domestic-currency debt in the domestic market. However, its fiscal performance is weaker than those provinces with a higher rating. S&P believes that there is a mismatch between PBA's and our estimate of available versus published liquidity data, with available liquidity more robust than what fiscal performance suggests. This factor and structural fiscal vulnerabilities are reflected in its 'ccc+' SACP. The 'ccc+' SACP on the Province of Rio Negro reflects some recent improvement in its fiscal performance, still limited capacity to build liquidity buffers, and in S&P's view, its dependence on favorable economic conditions to generate fiscal space to pay its international debt. S&P said, "We revised upward the SACP for the Province of Entre Rios to 'ccc+' from 'ccc', raised our ratings on it to 'CCC+' from 'CCC', and assigned a stable outlook. We assigned the negative outlook in May 2024 amid deterioration in Entre Rios' public finances and cash reserves, along with limited financing options that increased the risk of default." While vulnerabilities remain, Entre Rios improved its financial performance during the second half of the year and has remained current on all of its obligations. Meanwhile, the Province of La Rioja defaulted on Feb. 29, 2024, and pursued a debt restructuring, still under negotiation, despite the low debt service in 2024. [] S&P Hikes Currency Ratings on 8 Argentine Companies to 'B-' -------------------------------------------------------------- S&P Global Ratings raised its local and foreign currency ratings on eight Argentine companies to 'B-' from 'CCC' and on three companies to 'CCC+' from 'CCC'. S&P also affirmed the ratings on one entity at 'CCC'. The outlooks on all these ratings are stable. On Feb. 5, 2025, S&P Global Ratings revised upward its transfer and convertibility (T&C) assessment on Argentina to 'B-' from 'CCC'. At the same time, S&P affirmed its long-and short-term foreign and local currency ratings on the country at 'CCC/C'. Following the action on the sovereign, S&P raised its local and foreign currency ratings on eight Argentine infrastructure and corporate entities to 'B-' from 'CCC' and three others to 'CCC+' from 'CCC', depending on their stand-alone credit profiles (SACPs). S&P revised upward its T&C assessment to 'B-' from 'CCC'. This was based on its perception of modestly diminished risk of the sovereign interfering with the ability of domestic entities to access, convert, and transfer money abroad. Still, Argentina's economic conditions remain fragile, and external liquidity is a weakness despite modest improvement. Whichever the refinancing path the sovereign takes in the following quarters, the capacity of Argentine companies to make foreign-currency debt payments will remain largely influenced by their ability to get foreign currency. S&P upgraded the following eight entities to 'B-' from 'CCC': -- Aeropuertos Argentina 2000 S.A.; -- CAPEX S.A.; -- Genneia S.A. (GEN); -- Pampa Energia S.A.; -- Telecom Argentina S.A.; -- Transportadora de Gas del Sur S.A. (TGS); -- YPF Energia Electrica S.A. (YPF Luz); and -- YPF S.A. With the exceptions of YPF Luz and CAPEX, the SACPs of which S&P revised upward to 'b' and that of GEN was already at 'b+', it lifted the SACPs of the rest of these companies to 'b+'. Future upward T&C revisions will trigger similar actions on all these entities, as their ratings are capped at the T&C assessment. S&P raised the ratings on the following three entities to 'CCC+' from 'CCC': -- Compania General de Combustibles S.A.; -- Compañía Latinoamericana de Infraestructura y Servicios S.A. (CLISA); and -- Empresa Distribuidora Y Comercializadora Norte S.A. These issuers face heightened intrinsic risks than the entities above, either due to weak business conditions and/or challenging debt maturities schedules in the next 12 months. Their SACPs remain at 'ccc+'. S&P Said, "Finally, we affirmed our 'CCC' ratings on AES Argentina Generación S.A. We believe the regulated nature of its business, the heavy dependence on Argentina's power system regulator, CAMMESA (the Spanish acronym for Compañia Administradora del Mercado Mayorista Eléctrico Sociedad Anónima), and the uncertainties around concession terms are substantial. Therefore, its credit profile remains more tightly correlated to Argentina, in our opinion." Ratings List Ratings Affirmed AES Argentina Generación S.A. Issuer Credit Rating CCC/Stable/-- AES Argentina Generación S.A. Senior Unsecured CCC Upgraded To From Aeropuertos Argentina 2000 S.A. Issuer Credit Rating B-/Stable/-- CCC/Stable/-- Senior Secured B- CCC Upgraded To From CAPEX S.A. Issuer Credit Rating B-/Stable/-- CCC/Stable/-- Senior Unsecured B- CCC Upgraded To From CLISA-Compania Latinoamericana de Infraestructura & Servicios S.A. Issuer Credit Rating CCC+/Stable/-- CCC/Stable/-- Senior Secured CCC+ CCC Upgraded To From Transportadora de Gas del Sur S.A. (TGS) Issuer Credit Rating B-/Stable/-- CCC/Stable/-- Senior Unsecured B- CCC Upgraded To From Compania General de Combustibles S.A. Issuer Credit Rating CCC+/Stable/-- CCC/Stable/-- Senior Unsecured CCC+ CCC Upgraded To From Empresa Distribuidora Y Comercializadora Norte S.A. Issuer Credit Rating CCC+/Stable/-- CCC/Stable/-- Senior Unsecured CCC+ CCC Upgraded To From Genneia S.A. Issuer Credit Rating B-/Stable/-- CCC/Stable/-- Upgraded To From Pampa Energia S.A. Issuer Credit Rating B-/Stable/-- CCC/Stable/-- Senior Unsecured B- CCC Upgraded To From Telecom Argentina S.A. Issuer Credit Rating B-/Stable/-- CCC/Stable/-- Senior Unsecured B- CCC Upgraded To From YPF Energia Electrica S.A. Issuer Credit Rating B-/Stable/-- CCC/Stable/-- Senior Unsecured B- CCC Upgraded To From YPF S.A. Issuer Credit Rating B-/Stable/-- CCC/Stable/-- Senior Unsecured B- CCC =========================== C A Y M A N I S L A N D S =========================== C&W SENIOR: Fitch Assigns BB- Rating on $550MM Sr. Unsecured Notes ------------------------------------------------------------------ Fitch Ratings has assigned a rating of 'BB-' with a Recovery Rating of 'RR4' to C&W Senior Finance Limited's proposed USD550 million senior notes issuance due 2033. The notes will be issued out of C&W Senior Finance Limited, an indirect subsidiary of Cable & Wireless Communications Limited (CWC). The notes will be guaranteed by Cable & Wireless Limited. The proceeds from the notes will primarily be used to partially refinance C&W's USD735 million senior notes due 2027. The ratings reflect the company's leading market positions across well-diversified operating geographies and service offerings. These positions are underpinned by solid network competitiveness and leading business-to-consumer (B2C) and business-to-business (B2B) offerings. Key Rating Drivers Steady Net Leverage: Fitch forecasts that C&W will maintain net leverage in the 4.0x-4.5x range over the medium term. Moderate EBITDA margin expansion and growth in broadband and B2B services should help the company delever organically at a gradual pace over the rating horizon. Liberty Latin America (LLA) targets net leverage of around 3.5x at the group level; however, investments or operating weakness in core markets could temporarily push leverage metrics higher at the subsidiary level. Fitch expects capital intensity to be around 10%-14% of sales, mainly due to network upgrades and, to a lesser extent, network expansion. Moderately Improving Operating Prospects: Fitch forecasts C&W's EBITDA to rise above USD1.1 billion by 2025, up from USD974 million in 2023, driven by modest top-line growth, synergies from the Panama acquisition and cost cutting efforts in C&W Caribbean. The subsea cable business should grow in low-to-mid-single digits as data demand increases. Near-term mobile average revenue per user (ARPU) pressures are expected to be offset by growth in postpaid subscribers, while residential fixed revenues should steadily grow due to increased fixed broadband penetration opportunities. Diversified Operator: The group's business diversification model illustrates its revenue resilience compared to other regional speculative-grade issuers, which generally have higher dependence on mobile revenues that are less sticky than subscription fixed-line and B2B service revenues. In FY23, mobile service comprised 23% of C&W's revenue, fixed service 24%, and B2B 47%. During this period, businesses in the Caribbean and in Panama generated about 55% and 20% of EBITDA, respectively, through B2C and B2B services. The subsea cable business and B2B offerings in Colombia and other Latin America countries contributed the remaining roughly 25% of consolidated EBITDA. Strong Market Position: C&W's strong market share in duopoly markets reduces new entrant risks and helps maintain relatively stable ARPUs. It holds the No. 1 or 2 position in its major markets, often sharing duopolies with Digicel in the Caribbean and Millicom (Tigo) in Panama. The risk of new entrants in any given market is low given their relatively small size. Panama, C&W's largest mobile market, consolidated to two players after Digicel's exit. Despite legislation requiring three operators, the economic viability of a new entrant is uncertain, keeping competition relatively stable. LLA Linkage: Fitch analyzes C&W on a standalone basis and monitors the parent's credit quality. The credit pools are legally separate, but LLA has a history of moving cash around the group for investments and acquisitions. LLA depends on upstream cash from subsidiaries to service its debt. Deterioration of the financial profile of one of the credit pools, or the group more broadly, could potentially place more financial burdens on C&W. Derivation Summary Compared to sister entity, Liberty Communications of Puerto Rico LLC (LCPR; BB-/Negative), C&W's scale is larger and has better geographical diversification. However, C&W also operates in weaker operating environments. LCPR's Rating Outlook is Negative due to high leverage and intense competitive environment. C&W operates in slightly more balanced markets compared to Millicom International Cellular S.A.'s (BB+/Stable) subsidiaries CT Trust (Comcel; BB+/Stable) and Telefonica Celular del Paraguay S.A.E. (Telecel; BB+/Stable), which have more dominant market positions and significantly lower net leverage. Comcel's and Telecel's ratings reflect strong linkages with their parent Millicom heavily relies on these wholly owned subsidiaries' dividend upstreams to service its debt. Millicom's subsidiary in Panama and key competitor to C&W, Telecomunicaciones Digitales, S.A. (BB+/Stable), has somewhat weaker scale and diversification than C&W but benefits from a stronger financial profile and its ratings reflect strong linkages with Millicom, similar to its sister companies. Key Assumptions - B2B revenues growing low-to-mid-single digits; - Net fixed customer additions of approximately 25,000 per year; - Fixed-line customer ARPUs of around USD47/month; - Mobile subscribers recovering modestly in 2024 as continued strong growth in postpaid offsets slowing growth in prepaid; - Mobile service ARPUs of around USD13/month; - Fitch-defined EBITDA margins expanding to around 43% by 2026 from 38% in 2023, driven by the benefit of synergies, cost-savings initiatives, and modest operating leverage; - Capital intensity of around 13%-14% over the medium term; - Excess cash flow returned to shareholders or kept for acquisitions or investments. RATING SENSITIVITIES Factors that Could, Individually or Collectively, Lead to Negative Rating Action/Downgrade - Total debt/EBITDA and net debt/EBITDA at C&W sustained above 5.25x and 5.00x, respectively, due to organic cash flow deterioration or M&A; - While the three credit pools are legally separate, LLA net debt/EBITDA sustained above 5.0x could result in negative rating actions for one or more rated entities in the group. Factors that Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade - Fitch does not anticipate an upgrade in the near term given C&W's and LLA's leverage profiles; - Longer-term positive actions are possible if debt/EBITDA and net debt/EBITDA are sustained below 4.25x and 4.0x, respectively, for C&W and LLA; - (CFO-Capex)/Debt ratio trending towards 7.5%. Liquidity and Debt Structure Sound Liquidity: Liquidity is sound due to projected positive pre-dividend FCF. As of Sept. 30, 2024, C&W had USD454 million availability under the C&W revolver and USD80 million under regional facilities that are committed and undrawn. Issuer Profile Cable & Wireless Communications Limited is a U.K.-domiciled telecommunications provider owned by Bermuda-based LLA. The company offers B2C mobile, B2C fixed and B2B services mainly in the Caribbean and Panama. It operates a subsea and terrestrial fiber optic cable network that connects approximately 40 markets in the region. Date of Relevant Committee 03 May 2024 MACROECONOMIC ASSUMPTIONS AND SECTOR FORECASTS Fitch's latest quarterly Global Corporates Macro and Sector Forecasts data file which aggregates key data points used in its credit analysis. Fitch's macroeconomic forecasts, commodity price assumptions, default rate forecasts, sector key performance indicators and sector-level forecasts are among the data items included. ESG Considerations The highest level of ESG credit relevance is a score of '3', unless otherwise disclosed in this section. A score of '3' means ESG issues are credit-neutral or have only a minimal credit impact on the entity, either due to their nature or the way in which they are being managed by the entity. Fitch's ESG Relevance Scores are not inputs in the rating process; they are an observation on the relevance and materiality of ESG factors in the rating decision. Entity/Debt Rating Recovery ----------- ------ -------- C&W Senior Finance Limited senior unsecured LT BB- New Rating RR4 C&W SENIOR: Moody's Rates New $550MM Senior Unsecured Notes 'B2' ---------------------------------------------------------------- Moody's Ratings has assigned a B2 rating C&W Senior Finance Limited's, a subsidiary of Cable & Wireless Communications Limited (C&W, Ba3 negative), proposed $550 million backed senior unsecured notes due 2033 and guaranteed by Cable & Wireless Limited. C&W's existing ratings remain unchanged. The outlook is negative. The issuance is part of C&W's ongoing liability management with the objective of extending the company's debt maturity profile. The new issuance will not affect the company's leverage metrics since 100% of the proceeds will be used to partially redeem C&W Senior Finance Limited 's remaining $735m backed senior unsecured notes due 2027 and pay transaction-related premium, fees and expenses. The B2 rating on the senior unsecured notes reflects their positioning in the waterfall behind close to $3.8 billion in secured debt, including $2.1 billion related to Coral-US's B-5, B-6 term loans, and $1.0 billion related to the senior secured notes at Sable International Finance Limited (SIFL)'s, an indirect subsidiary of C&W, all of them rated Ba3. The rated senior secured debt benefits from the guarantees of SIFL, C&W Senior Secured Parent Limited, Sable Holding Limited, CWIGroup Limited, Coral-US Co-Borrower LLC, Cable and Wireless (West Indies) Limited, and Columbus International Inc., and share pledges of all the guarantors and issuers as collateral and security interests over certain shareholder loans; while the unsecured debt benefits from a collateral that comprises the capital stock of the notes' issuer. The rating of the notes assumes that the final transaction documents will not be materially different from draft legal documentation reviewed by us to date and that these agreements are legally valid, binding and enforceable. RATINGS RATIONALE C&W's Ba3 corporate family rating (CFR) reflects its integrated business model and leading market positions throughout the Caribbean and Panama, which drive strong profitability. The company's strong liquidity also supports the CFR. Conversely, the rating is constrained by the company's large exposure to emerging economies and its tolerance to high leverage. C&W's Moody's-adjusted leverage has been consistently above 5x since 2020. It gradually declined to 4.8x as of September 30, 2024, which is still high for the Ba3 rating category. Moody's expect the company to improve leverage in the next twelve months on EBITDA improvements, mainly driven by average revenue per user (ARPU) and subscriber growth in fixed, and cost reduction initiatives in C&W's Caribbean business; postpaid growth; and full synergy benefits and the lack of integration costs following market consolidation in Panama. These initiatives should sustain and even improve the EBITDA margin above 40%, helping reduce leverage in line with LLA's public guidance of 3.5x net leverage at the consolidated level, from 4.8x as of September 2024. Because C&W represents 59% of LLA's debt and 66% of its EBITDA as of the same date, C&W's leverage must improve to reach LLA's public target. The company's strong profitability is supported by its leading market positions in markets with 2 or 3 players, and its solid performance in the B2B segment and the rest of the markets in the Caribbean. Moody's expect C&W's liquidity to be solid, supported by positive cash generation before dividends and access to $580 million in revolving credit facilities available at C&W level and $80 million under regional revolving credit facilities. C&W held $479 million in cash as of September 2024 and does not face any large debt maturity before 2027. The company's negative outlook reflects C&W's persistently high Moody's-adjusted leverage at 4.8x for the 12 months that ended September 2024 and Moody's view that it will remain above 4x in the next 12-18 months. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATING A rating upgrade could be considered if leverage (Moody's-adjusted debt/EBITDA) is comfortably sustained below 3.5x on a consolidated basis; Moody's-adjusted EBITDA margin of at least 40%; and sound positive free cash flow generation (FCF), all on a sustained basis. Quantitatively, a downgrade could occur if Moody's-adjusted leverage is sustained above 4.5x by FYE 2024 or above 4.0x by 2025, its EBITDA margin declines toward 35% on a sustained basis. C&W's rating could be downgraded if its liquidity position weakens significantly due to a large cash distribution to its parent company in a way that it jeopardizes the company's liquidity or requires additional debt. The principal methodology used in this rating was Telecommunications Service Providers published in November 2023. C&W is a subsidiary of Liberty Latin America Ltd (LLA). The company is an integrated telecommunications provider offering mobile, broadband, video, fixed-line, business, IT and wholesale services in Panama, Jamaica, the Bahamas, Trinidad and Tobago, Barbados and other markets in the Caribbean and Central America. For the 12 months that ended September 30, 2024, the company generated revenue of $2.6 billion. As of the same date, C&W served 2.4 million revenue generating units (RGUs) through its fixed network, which passes 2.7 million homes. The company also serves 3.9 million mobile subscribers. Following the acquisition of Claro Panama (a subsidiary of America Movil, S.A.B de C.V. [Baa1 stable]) in July 2022, Panama remains C&W's highest revenue-generating market, with a share of 30% of revenue for the 12 months that ended September 2024. =================================== D O M I N I C A N R E P U B L I C =================================== DOMINICAN REPUBLIC: Reports Record Figure in Energy Generation -------------------------------------------------------------- Dominican Today reports that the Dominican Republic reached a milestone in its energy transition by registering a record 1,101 megawatts (MW) in renewable energy generation, representing 46.5% of the power online. The Minister of Energy and Mines, Joel Santos, highlighted this progress as part of the national strategy to diversify the energy matrix and reduce dependence on fossil fuels, according to Dominican Today. He explained that the country is accelerating tenders for renewable energy projects, with the aim of having these sources represent 25% of the energy matrix by 2025, the report notes. The renewable generation recorded was 743.6 MW of solar, 328 MW of wind, and 28.6 MW of biomass, reflecting the country's potential to continue moving towards a more sustainable energy system, the report relays. This growth has been sustained in recent years, the report notes. The Dominican Republic's energy matrix closed in 2024 with a generation capacity of 1,396 MW through renewable sources (solar, wind, and biomass), equivalent to 23.32% of the national generation capacity, the report says. An increase of more than 137% compared to 2020, when the capacity of these sources was 588 MW and represented 11.94%, the report relays. In addition, the country has more than 460 MW installed on the roofs of residences, businesses, and industries for self-consumption, which shows a strong commitment to decentralizing and democratizing access to clean energy, the report discloses. In 2024, 27 new renewable energy parks were incorporated, some of which have already started production, while others will come into operation in 2025, the report says. Together, they will contribute 1,567.47 MW to the national energy system, the report relays. On the other hand, in addition to promoting renewable energies, thermal generation projects are being developed, mainly using natural gas, with a capacity under construction of 2,179 MW for the next four years, the report notes. More than 600 MW will come into operation this year with the commissioning of three new plants, the report adds. About Dominican Republic The Dominican Republic is a Caribbean nation that shares the island of Hispaniola with Haiti to the west. Capital city Santo Domingo has Spanish landmarks like the Gothic Catedral Primada de America dating back 5 centuries in its Zona Colonial district. Luis Rodolfo Abinader Corona is the current president of the nation. TCR-LA reported in April 2019 that Juan Del Rosario of the UASD Economic Faculty cited a current economic slowdown for the Dominican Republic and cautioned that if the trend continues, growth would reach only 4% by 2023. Mr. Del Rosario said that if that happens, "we'll face difficulties in meeting international commitments." An ongoing concern in the Dominican Republic is the inability of participants in the electricity sector to establish financial viability for the system. Standard & Poor's credit rating for Dominican Republic was raised to 'BB' in December 2022 with stable outlook. Moody's credit rating for Dominican Republic was last set at Ba3 in August 2023 with the outlook changed to positive. Fitch, in December 2023, affirmed the Dominican Republic's Long-Term Foreign-Currency Issuer Default Rating (IDR) at 'BB-' and revised the outlook to positive. ============= J A M A I C A ============= JAMAICA: Businesses Urged to Diversify Markets Amid Trade Shifts ---------------------------------------------------------------- RJR News reports that in light of evolving global trade dynamics and recent trade tensions involving the United States, Jamaican businesses are being strongly encouraged to proactively diversify their markets, exploring both regional and international opportunities. Senior Director, Regulations, Policy, Monitoring and Enforcement at the Jamaica Special Economic Zone Authority, JSEZA), Ainsley Brown, has highlighted the United Arab Emirates as a particularly promising market for Jamaican exports, according to RJR News. Mr. Brown was delivering a presentation at the Business Acceleration Centre Accelerator Series, the report notes. 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. JAMAICA: Production Challenges Hinder Local Consumption of Eggs --------------------------------------------------------------- RJR News reports that egg farmers would like to see Jamaicans eat more eggs. Jamaicans consume on average about 1 and a half eggs per week and the Ministry of Agriculture wants to increase this to 2 eggs per week over the next three years, according to RJR News. But first, they have to address production challenges, the report notes. The current demand for eggs in Jamaica is about 900,000 per day – far more than the country's supply which is estimated at about 650,000 daily, the report says. A number of countries have been grappling with a major egg shortage and Jamaica has not been spared, the report discloses. Authorities are unsure when there will be some relief, the report relays. "The reality is that the vast majority of the birds in the field now are old birds. And old birds are usually on the way down. Their graph is heading down," conceded Mark Campbell, President of the Egg Farmers Association, the report says. Global issues like the bird flu are also reducing hopes of prompt recovery, the report notes. But some local egg farmers have been managing to stay afloat because of a recent increase in the price of eggs, the report discloses. Before Hurricane Beryl, a tray of 30 eggs would sell for approximately $900, the report says. Today, most retailers are selling it for at least $1,400, the report relays. "Based upon current production figures . . . it takes approximately, dollar figure, $1,160 per flat of eggs to facilitate production and replacement of pullets. Which simply means that unless you're selling eggs for at least $1,300 to $1,400 a flat, you're actually behind the eight ball," said Dr. Kirk Harris, Production Manager at Jamaica Egg Services, the report discloses. And this increase in prices could continue, the report says. In the US, consumers are being urged to brace for higher prices later in 2025, sparking fears that the same will happen in Jamaica, 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. JN FINANCIAL: Grapples With $2.5BB Loss, Looks to Shed Some Assets ------------------------------------------------------------------ RJR News reports that the JN Financial Group is selling a number of its assets such as the JN General Insurance Company and JN Fund Managers in order to offset three consecutive years of net losses. The company recorded a loss of $2.5 billion for the year ending March 2024, according to RJR News. This followed a loss of a similar amount in 2023 and a $165 million loss for the year ended March 2022, the report notes. These results represent massive declines when compared with record profits of $6.5 billion generated for the year 2021 and $619 million in 2020, the report adds. =========== M E X I C O =========== ACCURIDE CORP: Gets Court Okay to Tap Additional $20MM Ch11 Loan ---------------------------------------------------------------- Alex Wittenberg of Law360 Bankruptcy Authority reports that a Delaware bankruptcy judge approved wheel manufacturer Accuride Corp.'s request on February 6, 2025, to increase its Chapter 11 financing by $20 million, which the company intends to use to maintain operations ahead of next week's reorganization plan confirmation hearing. About Accuride Corp. Accuride Corporation and its affiliates are a global leader in steel and aluminum wheels and wheel-end components and assemblies, supplying innovative products to over 1,000 customers in the commercial vehicles, passenger cars, agriculture, construction and industrial equipment markets. Headquartered in Livonia, Michigan, the Debtors are part of a global enterprise that employs approximately 3,600 individuals at facilities in the United States, Canada, Mexico, Germany, France, Turkey, Russia, and China. Accuride's U.S. entities first filed for Chapter 11 protection in October 2009, also in Delaware, to restructure in excess of $675 million in debt. The Court confirmed the Company's Plan of Reorganization in February 2010. On Oct. 9, 2024, Accuride Corp. and its U.S. entities filed voluntary petitions for protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. D. Del. Lead Case No. 24-12289). Accuride reported $500 million to $1 billion in assets and liabilities as of the bankruptcy filing. In the new Chapter 11 cases, the Debtors tapped Kirkland & Ellis LLP as bankruptcy counsel; Young Conaway Stargatt & Taylor, LLP, as local bankruptcy counsel; Quinn Emanuel Urquhart & Sullivan, LLP as special counsel; Perella Weinberg Partners LP as investment banker; and Deloitte & Touche LLP as independent auditor. Alvarez & Marsal North America, LLC is the CRO provider and Omni Agent Solutions is the claims agent. On Dec. 10, 2024, the Office of the U.S. Trustee appointed an official committee of unsecured creditors in these Chapter 11 cases. The committee tapped McDermott Will & Emery LLP as counsel. ================= N I C A R A G U A ================= NICARAGUA: IMF Says Economic Performance Remains Robust ------------------------------------------------------- The Executive Board of the International Monetary Fund (IMF) concluded the Article IV consultation with Nicaragua. Nicaragua's economic performance remains robust, underpinned by prudent macroeconomic policies and very strong remittance flows. The economy continues to be open and resilient, on a backdrop of transfers of private property to the state, international sanctions, and a reorientation of official financing. Real GDP growth accelerated to around 4½ percent in 2023 and the first half of 2024, from about 3.8 percent in 2022, on the back of robust domestic demand, while inflation declined. Twin fiscal and external account surpluses are leading to a decline in the public debt-to-GDP ratio and the accumulation of strong buffers. Real GDP growth is projected to moderate to 4 percent in the near term and to 3.5 percent in the medium-term, amid a slower pace of remittances growth, limited labor contribution to growth due to recent emigration, and cautious private sector investment decisions. International reserves are expected to grow at a slower pace than in the recent period, with narrowing of fiscal and current account surpluses as the authorities' increase public investment. Risks to the outlook are broadly balanced in the short-term and to the downside in the medium term. Upside risks include stronger domestic demand, while downside risks include lower global growth, a deterioration in the terms of trade, natural disasters, stricter and wider international sanctions, and a change in immigration policies in the U.S. In addition, going forward, domestic and international political developments, and deterioration of the rule of law may also impact economic performance by potentially increasing the cost of doing business. Executive Board Assessment Executive Directors agreed with the thrust of the staff appraisal. They welcomed Nicaragua's robust growth, declining inflation and public debt, and fiscal sector and current account surpluses, supported by prudent macroeconomic policies and high remittances. While noting the positive outlook, Directors stressed that risks are to the downside, including from natural disasters, international sanctions, and U.S. immigration policies. They underscored the importance of continued efforts to safeguard macroeconomic stability, strengthen buffers, and support higher and more inclusive growth. Directors welcomed the authorities' commitment to preserving fiscal sustainability, while supporting growth. Efforts to strengthen domestic revenue mobilization, enhance spending efficiency, and support higher capital and social spending are important. Noting the limited availability of concessional financing, Directors highlighted the importance of prudent debt management to safeguard debt sustainability. They underscored the need to mitigate fiscal risks by strengthening fiscal transparency, enhancing oversight of state owned enterprises, and reforming the pension system. Directors agreed that monetary policy should remain focused on supporting price stability and the exchange rate regime and highlighted the criticality of policy coordination. They recommended that the Central Bank of Nicaragua adjust monetary and exchange rate policies, as needed, enhance communication, and strengthen monetary policy transmission. Directors encouraged steadfast implementation of the 2021 safeguard assessment recommendations. Directors welcomed the commitment to maintaining financial stability. Noting the vulnerabilities, they encouraged proactive provisioning of distressed assets, close monitoring of consumer credit growth, enhanced foreign exchange risk monitoring, and aligning the crisis preparedness framework with international best practice. Measures to increase financial inclusion and deepening, including developing local bond and capital markets, would support medium term growth. Directors stressed the need for efforts to promote higher medium term growth and enhance climate resilience. Important measures include increasing human capital investment, targeted social spending, and promoting labor force participation, particularly for women. Directors also called for efforts to enhance the business climate and strengthen government institutions and frameworks to support increased private investment. Directors noted the steps taken to enhance governance, anti corruption, and AML/CFT frameworks, and emphasized that further efforts are needed to ensure their effective and appropriate application. They stressed the need to significantly improve the rule of law and safeguard judicial independence. Publishing asset declarations of politically exposed persons and supporting property rights are important. Directors welcomed the authorities' commitment to enhancing the quality and consistency of statistics. It is expected that the next Article IV consultation with Nicaragua will be held on the standard 12 month cycle. ===================== P U E R T O R I C O ===================== ERC MANUFACTURING: Seeks Chapter 11 Bankruptcy in Puerto Rico ------------------------------------------------------------- On February 4, 2025, ERC Manufacturing Inc. filed Chapter 11 protection in the U.S. Bankruptcy Court for the District of Puerto Rico. According to court filing, the Debtor reports $1,599,734 in debt owed to 1 and 49 creditors. The petition states funds will be available to unsecured creditors. About ERC Manufacturing Inc. ERC Manufacturing Inc. owns the property located at Carr 814 Km 0.8 Cedro Abajo, Naranjito, Puerto Rico, spanning 6,977.84 square meters. It includes a two-story commercial office building, two metal concrete industrial buildings, 28 parking spaces, two offices, two terraces, two workshops, two mezzanines, and two bathrooms. The appraised value is $213,000, as of July 27, 2016. ERC Manufacturing Inc. sought relief under Chapter 11 of the U.S. Bankruptcy Code (Bankr. D.P.R. Case No. 25-00475) on February 4, 2025. In its petition, the Debtor reports total assets of $785,322 and total liabilities of $1,599,734. The Debtor is represented by Juan C. Bigas, Esq., in Ponce, Puerto Rico. ********* 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 2025. 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 * * *