/raid1/www/Hosts/bankrupt/TCRLA_Public/250304.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
L A T I N A M E R I C A
Tuesday, March 4, 2025, Vol. 26, No. 45
Headlines
A R G E N T I N A
AES ARGENTINA: Fitch Affirms 'CCC' LongTerm IDRs
ARGENTINA: Allows Live Cattle Exports as Milei Scraps 1973 Policy
ARGENTINA: Economy Beat Expectations Again in December
BANCO DE LA NACION: Court Halts Transformation into Limited Firm
B A R B A D O S
BARBADOS: Increases its Captive Insurance Market Share
B R A Z I L
BANRISUL: Moody's Alters Outlook on 'Ba3' Deposit Ratings to Stable
ELDORADO BRASIL: Fitch Affirms 'BB' LongTerm IDRs, Outlook Stable
SAMARCO MINERACAO: Moody's Hikes CFR to B2 & Alters Outlook to Pos.
C O S T A R I C A
COSTA RICA: Fitch Alters Outlook on BB Foreign Currency IDR to Pos.
J A M A I C A
JAMAICA: BOJ Spent US$1.1-Billion to Stabilise Dollar Last Year
P U E R T O R I C O
EL CANO: Seeks to Hire Modesto Bigas Mendez as Bankruptcy Counsel
T R I N I D A D A N D T O B A G O
TRINIDAD & TOBAGO: Suffering From Carnival Data Poverty
- - - - -
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A R G E N T I N A
=================
AES ARGENTINA: Fitch Affirms 'CCC' LongTerm IDRs
------------------------------------------------
Fitch Ratings has affirmed AES Argentina Generacion S.A.'s (AAG)
Long-Term Foreign Currency and Local Currency Issuer Default
Ratings (IDRs) at 'CCC'.
AES Argentina Generacion S.A.'s (AAG) ratings reflect its exposure
to the Argentine sovereign (CCC) due to the electricity sector's
reliance on government subsidies and AAG's dependence on payments
from FONINVEMEM funds, which are sovereign obligations.
Fitch assesses the ratings of AAG on a standalone basis from its
parent, The AES Corporation (BBB-/Stable), due to a lack of legal
guarantees from the parent and a low strategic and operational
incentive for it to support AAG.
Key Rating Drivers
Counterparty Exposure Partially Offset by Receivables: AAG depends
on payments from its main off-taker, the Wholesale Electricity
Market Clearing Company, or Compania Administradora del Mercado
Electrico Mayorista S.A. (CAMMESA), which acts as an agent on
behalf of an association representing agents of electricity
generators, transmission, distribution and large consumers or the
wholesale market participants. CAMMESA's payment delays to the
electricity sector has materially improved, averaging close to 45
days in 9M24 from over 80 days in the previous year.
Counterparty risk is mitigated by AAG's predictable receivables
from FONINVEMEM investments, with USD45 million expected in 2025.
Upon repayment of the outstanding approximately USD50 million owed
to AAG as of 3Q24, the company will own an equity stake of up to
30% in Guillermo Brown, a 578MW single-cycle plant. Repayments of
FONINVEMEM obligations are U.S. dollar-denominated and have been
made on schedule. AAG's other main revenue source is its 200MW of
wind farms, which generate approximately USD40 million a year and
do not depend on commodity inputs.
Hydro Concession Expirations and Limited Growth: The expiration of
concessions for key hydro assets will maintain EBITDA below USD100
million in 2025. The concession for the 1,050MW Alicura hydro plant
on the Limay River was set to expire on May 17, 2024, but was
extended until Aug. 2025. Fitch anticipates a decrease of about
USD10 million in EBITDA on a full-year basis. The expiration of
concessions for the 102MW Cabra Corral and 45MW El Tunal assets in
Nov. 2025 will have a less-pronounced impact given their smaller
size.
A 100MW wind expansion project at the Vientos Bonarenses plant is
expected in the short term. Fitch forecasts capex totalling
approximately USD160 million, with the unit coming online in 2026.
This new capacity will offset the hydro expirations with an
expected incremental of around USD20 million. Fitch expects
leverage for YE2024 to be 2.5x, including USD180 million in debt
and around USD80 million in EBITDA. Fitch expects the company's
leverage to remain under 3.0x over the rating horizon.
Base Energy Inflation Adjustment: The indexation of Base Energy, or
Energia Base, will be important for AAG and other producers, as
revenue is nearly 65% derived from Energia Base when including
FONINVEMEM collections. Base Energy was 'pesified,' or denominated
in Argentine pesos per Resolution 31/2020. Since Aug. 2024, monthly
resolutions have increased remuneration rates for generation
companies. Starting Nov. 1, the Argentine government allows
generators to contract with distributors directly, excluding
CAMMESA's role. Fitch will monitor closely as specific regulations
unfold.
Parent Linkage: The ratings are based on AAG's Standalone Credit
Profile, as overall legal, operational and strategic incentives for
its parent to support AAG, if needed, are low. AAG is fully owned
by AES, but there are no guarantees from the parent or
cross-default clauses. Strategic incentives are low, as AAG does
not provide a significant financial contribution to AES. While both
entities have the same core business and there is some material
common management, operational benefits to the parent are not
material. Considering all three linkage factors are assessed as
low, Fitch rates AAG on a standalone basis.
Derivation Summary
AAG's ratings reflect exposure to CAMMESA as an offtaker, which is
reliant on subsidies from the Argentine government. This is the
same situation for Argentine utility and energy peers Pampa Energia
S.A. (Pampa; B-/Stable), Capex S.A. (B-/Stable), MSU Energy S.A.
(CCC) and Generacion Mediterranea S.A (GEMSA) (CCC). AAG is
concentrated only in the electricity generation sector, presenting
a balanced portfolio between thermal, wind and hydro assets.
Pampa has a more diversified business profile as a leading company
in electricity generation, distribution, transmission, gas
production and transportation, while Capex has an advantageous
vertical integration in the thermoelectric generation segment, with
the flexibility to use its own natural gas reserves to supply
plants. MSU and GEMSA have only thermal operations and are mainly
exposed to CAMMESA.
In terms of credit metrics, AAG's Fitch-calculated expected gross
leverage as of YE 2025 is 2.5x, compared with Pampa at 1.2x,
Generacion Mediterranea S.A. at 4.6x, MSU Energy S.A. at 4.1x and
Capex at 3.6x. On a net basis, AAG's leverage was 3.7x in 3Q24,
reflecting USD66 million of cash and equivalents. Fitch estimates
AAG's projected gross leverage will average 2.5x in the medium
term, below Argentine peers' median of 3.0x.
Key Assumptions
- Energia Base assets are remunerated under Resolution 27/2025,
with full inflation pass-through in each subsequent year;
- CAMMESA making payments in 45 days in 2025 and throughout the
rating horizon;
- Gross generation of about 4,521 gigawatt-hour (GWh) in 2024, and
averaging 6,500 GWh from 2025-2027;
- AAG achieves generation capacity factors of 25% for thermal
assets, 20% for hydro and 40% for wind during the rating horizon;
- Additional 100MW of wind capacity contracted coming online in
2026;
- Average annual maintenance capex of USD14 million over the rating
horizon;
- No dividend payments over the rating horizon;
- U.S. dollar-denominated receivables related to FONINVEMEM of
about USD50 million per annum until 2026, all related to Guillermo
Brown.
RATING SENSITIVITIES
Factors that Could, Individually or Collectively, Lead to Negative
Rating Action/Downgrade:
- A downgrade to the ratings of Argentina could result in a
negative rating action;
- Delayed payments by CAMMESA.
Factors that Could, Individually or Collectively, Lead to Positive
Rating Action/Upgrade:
- An upgrade to the ratings of Argentina could result in a positive
rating action;
- Given the issuer's high dependence on subsidies from CAMMESA, any
regulatory developments leading to a more independent market that
is less reliant on support from the Argentine government could
positively affect collections and cash flow.
Liquidity and Debt Structure
As of Sept. 30, 2024, AAG reported available cash of ARS36.4
billion (USD38 million) and no committed lines of credit.
Additionally, the company additionally benefits from
CAMMESA-improved payment days, which is currently around 45,
in-line with the contractually agreed upon 42 days.
In May 2024, AES Argentina was paid for receivables totalling ARS37
billion (including FONINVEMEM payments owed by CAMMESA) in Dec.
2023, Jan. 2024 and Feb.2024. Fitch expects YE 2025 leverage to be
2.5x.
Issuer Profile
AES Argentina Generacion S.A. (AAG), which is 100% owned by the AES
Corporation (BBB-/Stable), is an electricity generation company in
Argentina with an installed capacity of 3,001MW.
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
----------- ------ -----
AES Argentina
Generacion S.A. LT IDR CCC Affirmed CCC
LC LT IDR CCC Affirmed CCC
ARGENTINA: Allows Live Cattle Exports as Milei Scraps 1973 Policy
-----------------------------------------------------------------
Jonathan Gilbert & Ken Parks at Bloomberg News report that
Argentina, one of the world's top beef exporters, will now be able
to send its cattle abroad for slaughter as President Javier Milei
pushes to deregulate the economy.
Milei, in an executive order, struck down a policy dating to 1973
that prohibits Argentina from shipping its cows to abattoirs
overseas. He cited his own libertarian rulebook designed to pull
Argentina out of years of protectionism and promote free markets,
according to Bloomberg News.
The measure, which will be implemented from, could roil Argentina's
meatpackers, where local names like Grupo Coto and Grupo Beltran
compete with Brazilian companies Marfrig Global Foods SA and
Minerva SA, Bloomberg News relays.
Agriculture powerhouse Argentina has a cattle herd of about 53
million, easily topping its human population, and is the world's
fifth-biggest beef exporter, according to the US Department of
Agriculture, Bloomberg News adds.
About Argentina
Argentina is a country located mostly in the southern half of South
America. Its capital is Buenos Aires. Javier Milei is the current
president of Argentina after winning the November 19, 2023 general
election. He succeeded Alberto Angel Fernandez in the position.
Argentina has the third largest economy in Latin America. The
country's economy is an upper middle-income economy for fiscal year
2019, according to the World Bank. Historically, however, its
economic performance has been very uneven, with high economic
growth alternating with severe recessions, income maldistribution
and in the recent decades, increasing poverty.
In March 2022, the International Monetary Fund (IMF) approved a new
30-month arrangement under an Extended Fund Facility for Argentina
in the amount of SDR 31.914 billion (equivalent to US$44 billion,
or 1000 percent of quota). The IMF Executive Board's decision
allowed the authorities an immediate disbursement of an equivalent
of US$9.65 billion in March 2022.
Argentina's IMF-supported program seeks to improve public finances
and start to reduce persistent high inflation through a
multi-pronged strategy, involving a gradual elimination of monetary
financing of the fiscal deficit and enhancements in the monetary
policy framework.
In June 2024, the IMF Board completed an eighth review of the
Extended Arrangement under the Extended Fund Facility for
Argentina. The IMF Board's decision enabled a disbursement of
around US$800 million to support the authorities' efforts to
entrench the disinflation process, rebuild fiscal and external
buffers, and underpin the recovery.
On Feb. 17, 2025, S&P Global Ratings lowered its local currency
sovereign credit ratings on Argentina to 'SD/SD' from 'CCC/C' and
its national scale rating to 'SD' from 'raB+'. At the same time,
S&P affirmed its 'CCC/C' foreign currency sovereign credit ratings
on Argentina. The outlook on the long-term foreign currency rating
remains stable.
On Jan. 8, 2025, Moody's Ratings raised Argentina's local currency
ceiling to B3 from Caa1 and the foreign currency ceiling to Caa1
from Caa3. Moody's said the decision to raise the local and
foreign currency ceilings reflects the increased predictability and
the greater consistency in economic policy that has led to a rapid
reduction in monetary and fiscal imbalances that were stoking very
high inflation.
On Nov. 15, 2024, Fitch Ratings upgraded Argentina's Long-Term
Foreign-Currency Issuer Default Rating (IDR) to 'CCC' from 'CC',
and its Long-Term Local-Currency IDR to 'CCC' from 'CCC-'.
Argentina's upgrade to 'CCC' from 'CC' reflects developments that
have improved Fitch's confidence in the authorities' ability to
make upcoming foreign-currency bond payments without seeking relief
of some sort.
DBRS, Inc. upgraded Argentina's Long-Term Foreign and Local
Currency Issuer Ratings to B (low) from CCC on November 25, 2024.
The trend on all ratings is Stable.
ARGENTINA: Economy Beat Expectations Again in December
------------------------------------------------------
Manuela Tobias at Bloomberg News reports that Argentina's economy
expanded more than expected in December, solidifying the country's
bounceback in the last quarter of the year under President Javier
Milei's watch.
Economic activity rose 0.5 percent from November, more than the 0.2
percent median estimate of economists surveyed by Bloomberg.
Monthly growth beat expectations the previous month, too. From a
year ago, the gross domestic product proxy grew 5.5 percent,
compared with the median estimate of 3.5 percent, according to
government data published, according to Bloomberg News.
South America's second-largest economy has been showing consistent
signs of gaining momentum after a deep slump exacerbated by Milei's
austerity policies in the first half of 2024, Bloomberg News
notes.
Wages in Argentina beat monthly inflation again in December,
continuing a dynamic that began in April, Bloomberg News says.
With wages picking up, private estimates monitored closely by the
government indicate poverty declined below 37 percent by the end of
2024 after surpassing 54 percent at the start of the year,
Bloomberg News relays.
Manufacturing, retail and the financial sector helped drive annual
growth in December, while construction and fishing posted declines,
Bloomberg News notes. Argentina's third-quarter growth was driven
by capital expenditures, consumer spending, and exports, Bloomberg
News discloses.
The International Monetary Fund estimates Argentina will grow five
percent in 2025, Bloomberg News adds.
About Argentina
Argentina is a country located mostly in the southern half of South
America. Its capital is Buenos Aires. Javier Milei is the current
president of Argentina after winning the November 19, 2023 general
election. He succeeded Alberto Angel Fernandez in the position.
Argentina has the third largest economy in Latin America. The
country's economy is an upper middle-income economy for fiscal year
2019, according to the World Bank. Historically, however, its
economic performance has been very uneven, with high economic
growth alternating with severe recessions, income maldistribution
and in the recent decades, increasing poverty.
In March 2022, the International Monetary Fund (IMF) approved a new
30-month arrangement under an Extended Fund Facility for Argentina
in the amount of SDR 31.914 billion (equivalent to US$44 billion,
or 1000 percent of quota). The IMF Executive Board's decision
allowed the authorities an immediate disbursement of an equivalent
of US$9.65 billion in March 2022.
Argentina's IMF-supported program seeks to improve public finances
and start to reduce persistent high inflation through a
multi-pronged strategy, involving a gradual elimination of monetary
financing of the fiscal deficit and enhancements in the monetary
policy framework.
In June 2024, the IMF Board completed an eighth review of the
Extended Arrangement under the Extended Fund Facility for
Argentina. The IMF Board's decision enabled a disbursement of
around US$800 million to support the authorities' efforts to
entrench the disinflation process, rebuild fiscal and external
buffers, and underpin the recovery.
On Feb. 17, 2025, S&P Global Ratings lowered its local currency
sovereign credit ratings on Argentina to 'SD/SD' from 'CCC/C' and
its national scale rating to 'SD' from 'raB+'. At the same time,
S&P affirmed its 'CCC/C' foreign currency sovereign credit ratings
on Argentina. The outlook on the long-term foreign currency rating
remains stable.
On Jan. 8, 2025, Moody's Ratings raised Argentina's local currency
ceiling to B3 from Caa1 and the foreign currency ceiling to Caa1
from Caa3. Moody's said the decision to raise the local and
foreign currency ceilings reflects the increased predictability and
the greater consistency in economic policy that has led to a rapid
reduction in monetary and fiscal imbalances that were stoking very
high inflation.
On Nov. 15, 2024, Fitch Ratings upgraded Argentina's Long-Term
Foreign-Currency Issuer Default Rating (IDR) to 'CCC' from 'CC',
and its Long-Term Local-Currency IDR to 'CCC' from 'CCC-'.
Argentina's upgrade to 'CCC' from 'CC' reflects developments that
have improved Fitch's confidence in the authorities' ability to
make upcoming foreign-currency bond payments without seeking relief
of some sort.
DBRS, Inc. upgraded Argentina's Long-Term Foreign and Local
Currency Issuer Ratings to B (low) from CCC on November 25, 2024.
The trend on all ratings is Stable.
BANCO DE LA NACION: Court Halts Transformation into Limited Firm
----------------------------------------------------------------
Buenos Aires Times reports that a judge in Argentina has suspended
the implementation of a decree from President Javier Milei seeking
to transform the state-owned Banco Nación, the country's biggest
bank, into a limited company.
The AFP news agency reported that the decree issued by Milei had
been halted by a federal judge in La Plata, according to Buenos
Aires Times.
The decree, which intended to change the status of Banco Nación to
"modernise" its structure, will "improve its competitiveness in
financial markets while optimising the assignment of funds," Milei
argued, the report notes.
But a federal judge in the Buenos Aires provincial capital ruled
that "a law of Congress is needed to declare such transformation,"
considering that the decree might constitute a "prior step" towards
a possible privatization of the bank, the report relays.
This injunction falls within a case before the La Plata Federal
Appeals Court since last year, in which a bank clerks union
questioned whether a resolution by the bank's board of directors to
advance towards its privatisation was constitutional, the report
says. The judge affirmed that it was up to the appeals court to
decide this issue, the report discloses.
Banco de la Nacion Argentina is a public institution founded in
1891, initially to absorb an economic and financial crisis, the
report notes. It progressively became the country's main
commercial bank in terms of assets, loans and deposits alike,
giving priority to small and medium-sized companies (PyMEs),
farming, regional economies and households, besides being extended
nationwide throughout the world's eighth-largest country, the
report discloses.
The bank had been removed from a list of privatisations within a
sweeping mega-reform law sent by the government and approved by
Congress last year, including economic and labour reforms while
authorising the privatisation of a dozen public companies, the
report says.
It was this exception to the so-called "Ley de Bases" which led
Federal Judge Alejo Ramos Padilla, the author of the injunction, to
consider that the decree transforming the bank "was excessive"
because while the government measure does not privatise the bank,
"it might imply a prior step to its possible privatization," the
report relays.
The judge also asked the government to present their arguments
against his ruling within five days, the report says.
Since approval of the "Ley de Bases" reform package, the
privatisation of the state companies Trenes Argentinos Cargas
freight rail lines, Corredores Viales highway concessionaires and
YCRT (Yacimientos Carboníferos Río Turbio) Patagonian coal mines
have all been decreed, the report notes.
"Nothing which should not be state-owned will remain in the hands
of the state," presidential spokesman Manuel Adorni said last
weekend with regard to YCRT, the report adds.
About Banco de la Nacion
As reported in the Troubled Company Reporter-Latin America in May
2021, Fitch Ratings affirmed Banco de la Nacion Argentina's
(Sucursal Uruguay; BNAUY) Long-Term Foreign Currency and Local
Currency Issuer Default Ratings (IDRs) at 'CCC'.
===============
B A R B A D O S
===============
BARBADOS: Increases its Captive Insurance Market Share
------------------------------------------------------
RJR News reports that the chief executive officer of the Financial
Services Commission in Barbados, Warrick Ward, says while Canada
continues to be the main source market accounting for 51 per cent
of captive insurance companies, Barbados' attractiveness as a
global hub for captive insurance companies continues to grow.
He says with the United States accounting for 25 per cent of the
global market, according to RJR News, Barbados has been able to
secure almost $50 billion in assets under management up to
September 2024, while another $123.8 billion in other classes of
insurance are managed on the island, the report notes.
As reported in the Troubled Company Reporter - Latin America in
November 2024, S&P Global Ratings raised its long-term local and
foreign currency sovereign credit ratings on Barbados to 'B' from
'B-', and affirmed its 'B' short-term ratings. The transfer and
convertibility assessment is 'B'.
===========
B R A Z I L
===========
BANRISUL: Moody's Alters Outlook on 'Ba3' Deposit Ratings to Stable
-------------------------------------------------------------------
Moody's Ratings has affirmed all ratings and assessments assigned
to Banco do Estado do Rio Grande do Sul S.A. (Banrisul), including
its long- and short-term local and foreign currency deposit ratings
at Ba3 and Not Prime, its long- and short-term counterparty risk
ratings at Ba2 and Not Prime, respectively, as well as the bank's
foreign currency subordinate debt rating of B2 (hyb). Moody's also
affirmed Banrisul's standalone baseline credit assessment (BCA) and
adjusted BCA, both at ba3, and the long- and short-term
counterparty risk assessments at Ba2(cr) and Not Prime(cr). The
outlook on Banrisul's long-term deposit ratings has changed to
stable, from negative.
RATINGS RATIONALE
By affirming Banrisul's ba3 BCA and Ba3 long-term deposit ratings,
Moody's acknowledge the bank's entrenched operations in the state
of Rio Grande do Sul that provides the bank a steady and granular
deposit base and established participation in banking businesses in
its core local market, particularly among public servants. In 2024,
Banrisul had significant market share in time deposits (43.4%),
demand deposits (19.8%) and loans (19.7%) within the state of Rio
Grande do Sul.
The ba3 BCA also reflects the bank's adequate asset quality metrics
through the cycle, and adequate liquidity profile, factors that
help to compensate for the bank's below-peers profitability and
capitalization. Banrisul's focus on secure consumer and
agricultural loans has supported asset risk metrics amid the higher
interest rate environment since 2021. As of December 2024, the
problem loan ratio improved 2.2% of gross loans from 2.6% one year
prior, remaining below the pre-pandemic level of 3% to 4%.
Moreover, after two quarters since the floods in Rio Grande do Sul
in May 2024, the impact on asset risk was limited and mitigated by
government relief measures as well as by the strong collateral
structure that helps to shield Banrisul's loan book. The bank also
maintained loan loss reserves at a comfortable level, covering 194%
of problem loans as of December 2024 - including BRL78.3 million of
additional provisions related to the floods - providing a buffer
against future losses. Banrisul's strategic focus considers a shift
to increase origination of unsecured personal loans and loans to
small and medium size companies, that aims to reinforce margins.
While this strategic move will likely strain on credit risk,
Moody's expects this to be manageable as the bank adopts cautious
credit policies.
In 2024, Banrisul reported net income to tangible assets ratio at
0.6%, mostly due to margin compression resulting from the Selic
rate increase, and related impact to funding cost, and to increased
investments in technology. Focus on fee-based businesses,
particularly related to insurance and credit card platforms, will
also help compensate for higher credit costs and competitive
pressures.
The change in outlook to stable from negative reflects the limited
impacts of the severe floods that affected the state of Rio Grande
do Sul in May 2024 and the loan forbearances that followed the
event.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
An upward pressure on Banrisul's ba3 BCA could come from
sustainable and consistent improvement to profitability metrics,
which will reinforce its capital replenishment capacity, while
asset quality metrics remain adequate as the bank move to a more
diversified lending strategy.
Conversely, the bank's BCA could be downgraded in case of a sharp
deterioration on asset quality, and further pressures to
profitability and capital, which would weaken the bank's
fundamentals.
The principal methodology used in these ratings was Banks published
in November 2024.
ELDORADO BRASIL: Fitch Affirms 'BB' LongTerm IDRs, Outlook Stable
-----------------------------------------------------------------
Fitch Ratings has affirmed Eldorado Brasil Celulose S.A.'s
Long-Term Foreign and Local Currency Issuer Default Ratings (IDRs)
at 'BB' and National Scale Long-Term Rating at 'AA+(bra)'. The
Rating Outlook on the corporate ratings is Stable.
The ratings reflect Eldorado's solid operating performance and
strong credit metrics. Its strong cash flow generation and low
investments in the past few years allowed the company to
significantly reduce leverage. The ratings also incorporate
Eldorado's limited diversification, with one pulp mill located in
Brazil.
The Stable Outlook reflects Fitch's expectation that Eldorado will
maintain a conservative capital structure, with net leverage below
1.0x absent a new investment cycle. Eldorado's deleveraging
strategy in the past few years should allow the company's balance
sheet to absorb a period of higher investments if the Vanguarda II
project is approved.
Key Rating Drivers
Above-Average Business Profile: Eldorado has only one pulp mill,
located in Brazil, with an annual production capacity of 1.7
million tons of bleached eucalyptus kraft pulp (BEKP). Like other
Latin American pulp companies, Eldorado has a competitive cost
structure, with cash cost of production of approximately USD177 per
ton in 2024, placing it firmly in the lowest quartile of the cost
curve. Eldorado has been able to consistently operate above its
nominal annual capacity.
The company's competitiveness is also related to its modern
production facility, as well the productivity of its forestry
assets. Eldorado's forest assets further enhance the company's
financial flexibility, as the accounting value of the biological
assets of its forest plantations was BRL5.0 billion as of Sept. 30,
2024.
Litigation's Limited Impact on Financial Flexibility: Fitch expects
limited impact from the shareholders' litigation process on
Eldorado's financial flexibility. The company's cash and expected
FCF should adequately cover its maturities within the rating
horizon. The company has shown good access to the local market,
should it need to extend its debt profile. However, this is not
part of Fitch's current rating case. Fitch will reassess the
company's strategy and credit quality following a conclusive
outcome of the arbitration process.
Stable Pulp Prices in 2025 Average bleached eucalyptus kraft pulp
prices for 2024 reached USD625 per tonne, up from USD585 per tonne
in 2023. Fitch expects prices to remain around USD600 per tonne in
2025, considering a low starting point and a gradual increase
during the year. After Suzano's Cerrado project came online in
2024, no major capacity increases are expected until 2028, likely
pushing prices upwards up despite softer demand growth compared to
previous years.
Strong FCF: Eldorado is expected to generate about BRL3 billion of
EBITDA and BRL2.6 billion in CFFO in 2024, and BRL2.8 billion and
BRL2.5 billion, respectively, in 2025, compared to BRL2.1 billion
and BRL1.6 billion in 2023. As a low-cost producer, the company
maintains strong operating margins throughout the pulp price cycle.
Fitch forecasts FCF of BRL1 billion in 2024 and BRL502 million in
2025, with base case projections including average investments of
around BRL1.5 billion over the next three years and a 25% net
profit dividend payout. Capex will cover maintenance, forestry and
a railway project starting in 2025.
Leverage to Remain Low: Eldorado's net leverage was 0.3x as of
September 2024, and Fitch expects it to stay below 0.5x in the
rating horizon. Net debt decreased to BRL632 billion by September
2024, with further reductions anticipated. Continued leverage
reduction relies on avoiding significant expansion projects and
using FCF to pay down debt. Eldorado's past deleveraging strategy
positions the company to handles higher investments if the
Vanguarda II project proceeds.
Derivation Summary
Like other Latin American pulp producers, Eldorado's pulp
production cash costs are among the lowest in the world, ensuring
its long-term competitiveness. This places the company's business
risk profile in line with Latin America pulp companies like Suzano
S.A. (BBB-/Stable), Empresas CMPC S.A. (BBB/Stable) and Celulosa
Arauco y Constitución S.A. (BBB/Negative).
Eldorado has only one mill located in Brazil, which makes it
comparable to LD Celulose S.A. (BB-/Stable), while other Latin
American peers have higher scale of operations and geographic
diversification. Eldorado is also concentrated only in BEKP pulp
and is therefore more exposed to the cyclicality of pulp prices
compared with companies with higher product diversification like
Klabin, Arauco and CMPC, which are leaders in the packaging, wood
products segment and tissue markets, respectively.
Key Assumptions
- Pulp sales volume of 1.75 million tons in 2025 and 2026;
- Average net hardwood pulp prices of USD600 per ton in 2025 and
USD 700 per ton in 2026;
- Dividends paid for 25% of net profit;
- Capex for a total of BRL5.35 billion between 2025 and 2027,
including investments in the new railroad project;
- Base case does not incorporate investments in the new pulp mill.
RATING SENSITIVITIES
Factors That Could, Individually or Collectively, Lead to Negative
Rating Action/Downgrade
- Continued uncertainties regarding the conclusions of the
arbitrage process, which affects Eldorado's ability to access
adequate financing locally or abroad;
- Increase in short-term debt maturities above its cash flow
generation capacity.
Factors That Could, Individually or Collectively, Lead to Positive
Rating Action/Upgrade
- Given the low diversification of the company and uncertain
strategy and capital structure once the litigation ends, an upgrade
is not likely in the near term.
Liquidity and Debt Structure
Eldorado had cash and marketable securities of BRL1.3 million as of
Sept. 30, 2024 and total debt of BRL1.9 billion, of which BR400
million was due in the short term. In addition, Fitch expects
positive FCF in 2025 and 2026, which should be mainly used to
reduce debt.
The company does not rely on international debt market due to a
significant decrease in its debt during the past few years, as well
as the successful refinancing of its financial obligations through
local banks debt market.
Issuer Profile
Eldorado started operations in December 2012 and has one pulp mill
located in Mato Grosso do Sul State in Brazil. Eldorado's pulp mill
has an annual production capacity of 1.7 million tons of BEKP.
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
Eldorado Brasil Celulose S.A. has an ESG Relevance Score of '4[+]'
for Energy Management as the company sells excess energy to the
grid from cogeneration based upon a renewable resource, which has a
positive impact on the credit profile, and is relevant to the
rating[s] in conjunction with other factors.
Eldorado Brasil Celulose S.A. has an ESG Relevance Score of '4' for
Governance Structure due to the arbitrage process involving J&F and
the company's non-controlling shareholder, Paper Excellence, which
has a negative impact on the credit profile, and is relevant to the
rating[s] in conjunction with other factors.
The highest level of ESG credit relevance is a score of '3', unless
otherwise disclosed in this section. A score of '3' means ESG
issues are credit-neutral or have only a minimal credit impact on
the entity, either due to their nature or the way in which they are
being managed by the entity. Fitch's ESG Relevance Scores are not
inputs in the rating process; they are an observation on the
relevance and materiality of ESG factors in the rating decision.
Entity/Debt Rating Prior
----------- ------ -----
Eldorado Brasil
Celulose S.A. LT IDR BB Affirmed BB
LC LT IDR BB Affirmed BB
Natl LT AA+(bra) Affirmed AA+(bra)
SAMARCO MINERACAO: Moody's Hikes CFR to B2 & Alters Outlook to Pos.
-------------------------------------------------------------------
Moody's Ratings has upgraded Samarco Mineracao S.A. corporate
family rating and senior unsecured rating to B2 from B3. The
outlook changed to positive from stable.
RATINGS RATIONALE
The upgrade to B2 reflects the improvement in cash flows from
operations with the start-up of the second concentrator in December
2024, significantly increasing pellet production volumes (from
levels around 9 million tons to 15 million tons annually) and
reducing cash costs. The B2 rating also reflects the final
settlement in October 2024 for remediation and compensation
liabilities related to the 2015 tailings dam incident. The
agreement increases the visibility of cash outflows over 20 years.
This final agreement of BRL170 billion ($31.7 billion), including
past and future obligations, brought more clarity to Samarco's
legal liabilities and provided cash flow visibility, reducing the
risk of additional disbursements in the future. Samarco remains
the primary obligor to the full amount of liabilities, while
shareholders Vale S.A. (Baa2 positive) and BHP Group Limited (BHP,
A1 stable) will equally share the obligations that Samarco cannot
fund, following the same approach as for obligations already
disbursed. Under the indenture of the bonds outstanding,
compensation/remediation outflows are capped at a total of $1
billion through the end of 2030.
The positive outlook reflects Moody's expectations that Samarco's
operations will continue to improve as the company builds a track
record operating two concentrators and reduces costs overtime,
further strengthening cash flow generation. The positive outlook
also reflects Samarco's financial strategy and capital allocation
as stated in the judicial recovery plan, which allows the company
to meet debt obligations while it continues to invest in the
operations.
The ratings are constrained by Samarco's still weak credit metrics
as the company is not operating at full capacity, and execution
risks related to the ramp-up of operations through 2028, when the
company expects to achieve 100% capacity. The ratings are also
constrained by Samarco being under judicial recovery, which limits
its financial flexibility.
Samarco has adequate liquidity, supported by cash flow from
operations, no cash interest to be paid until 2026 (PIK interest)
and the cap on remediation expenses at $200 million per year until
2026 and $100 million from 2027 until 2030 ($1 billion in total
through the end of 2030). The majority of debt obligations mature
in 2031, including the $3.9 billion senior unsecured notes issued
in December 2023. Moody's expects shareholders Vale and BHP to
continue to meet the obligations related to the settlement above
the cap established at Samarco.
ENVIRONMENTAL, SOCIAL & GOVERNANCE CONSIDERATIONS
As for the environmental, social and governance (ESG) factors
incorporated into Samarco's ratings, Moody's considers Samarco's
high exposure to environmental risks, associated primarily with
natural capital and waste and pollution (including credit
implications of the tailings dam disaster), and to social risks,
arising mainly from health and safety concerns around the
operations, which are inherent to the mining industry, as well as
responsible production, given the 2015 tailings dams incident and
its implications to the surrounding communities and room for
additional lawsuits. As the company has progressed with reparation
programs and has more visibility on future cash flows (with the
settlement in October 2024), Moody's have changed the score for
responsible production to 4 (from 5) and the overall social score
to S-4 (from S-5). Moody's have changed the waste and pollution
score to 4 from 5, as Samarco has almost completed the
decommissioning of the Germano dam and currently relies primarily
on dry-stacking.
Governance considerations reflect Samarco's judicial recovery plan
and the still limited track record of financial strategy and risk
management under the current capital structure.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
An upgrade would require Samarco to expand its scale – thus
allowing for higher fixed cost dilution - with the ramp-up of its
operations, strengthening its cash flows, and reducing leverage.
Quantitively, an upgrade would require that the company generates
positive free cash flow on a sustained basis and maintains leverage
below 4x.
Samarco's ratings could be downgraded if its profitability and cash
generation capacity deteriorate significantly due to a decline in
metal prices (iron ore pellets) or significantly lower production
volumes, or the company is not able to fulfill the conditions
stated in the judicial recovery plan relative to the changes in the
capital structure. Quantitatively, a downgrade could be triggered
if leverage stays above 4.5x on a sustained basis, and EBIT margins
fall below 10%.
The principal methodology used in these ratings was Mining
published in October 2021.
Headquartered in Minas Gerais, Samarco Mineracao S.A. is a 50%-50%
joint venture (JV) between mining companies Vale and BHP Billiton
Brazil Ltda., an indirect subsidiary of BHP Group Limited. The
company is a major exporter of seaborne iron ore pellets worldwide
with operations in Espirito Santo and Minas Gerais, in the
Southeast region of Brazil. The company has a fully integrated
business model with a nominal capacity to produce about 27 million
metric tons of pellets annually. Samarco should produce about 15
million metric tons of pellets in 2025. Operations were suspended
after the tailings dam incident in November 2015 and resumed in
December 2020. Samarco reported net operating revenue of $1.5
billion in the twelve months ended in September 2024.
===================
C O S T A R I C A
===================
COSTA RICA: Fitch Alters Outlook on BB Foreign Currency IDR to Pos.
-------------------------------------------------------------------
Fitch Ratings has affirmed Costa Rica's Long-Term Foreign-Currency
Issuer Default Rating (IDR) at 'BB'. The Rating Outlook has been
revised to Positive from Stable.
Key Rating Drivers
Positive Outlook: The Positive Outlook reflects robust growth,
improvements in Costa Rica's external position, gradually declining
debt trajectory, and continuation of primary surpluses, despite
some easing of fiscal gains. Costa Rica's rating is supported by
structural strengths relative to the 'BB' category, including high
per-capita income relative to peers. This is counterbalanced by
still high interest payments that are a source of fiscal rigidity
and a track record of political gridlock hindering reforms and
financing flexibility despite strong governance indicators.
Strong Growth: Real GDP grew 4.3% in 2024, down from 5.1% in 2023
but still above estimates of potential growth (3%-4%), driven by
consumption and a dynamic export sector. The 'dual economy'
continues to be a feature of Costa Rica's growth profile, with
stronger economic activity in the free trade zones (FTZs) than in
the broader economy. Fitch expects growth to slow to 3.8% in 2025
and to 3.5% over the medium-term.
Inflation Still Below Target: Inflation has remained among the
lowest in the region, averaging -0.4% in 2024. A strong exchange
rate (26% appreciation since mid-2022) contributed to negative
inflation in 2023 and 1H24. Fitch expects average inflation to
reach 1.7% in 2025, gradually converging with the lower end of the
3% +/- 1 target range, in line with recent trends. The central bank
has kept the policy rate at 4% since October 2024, following 500
bps of cuts starting in early 2023, and Fitch does not expect more
cuts due to the recent pickup in inflation.
Fiscal Momentum Slows: Revenue growth has begun to decelerate, with
tax revenue growing only 2.4% in 2024. Total expenditure growth
(6.3%) exceeded overall revenue growth (3.2%) in 2024, in part due
to some one-off expenses (i.e., a retroactive salary increase).
Current primary spending grew 5.7% (driven by 6.5% increase in
wages) and capex by 17%, while interest expenditure growth slowed
to 5%, as domestic interest rates have fallen.
As a result, the central government primary surplus fell to of 1.1%
of GDP in 2024, down from 1.6% in 2023. The overall central
government deficit grew in line with this deterioration, rising to
3.8% of GDP in 2024 from 3.3% in 2023, as the high interest burden
remained flat at 4.8% of GDP.
Gradual Fiscal Consolidation: Fitch expects the central government
to reach a 3.1% overall deficit in 2025 (primary surplus of 1.5%)
supported by a reversal of one-off effects and lower interest
burden. Medium term fiscal consolidation is likely to come from a
slow reduction in the wage bill and a declining interest burden, as
domestic debt is rolled over at lower rates. Primary surpluses are
then likely to stabilize at around these levels, absent new tax
measures, as the impact of the 2018 tax reform seems to have run
its course and flexibilization of spending limits under the fiscal
rule from 2026 could put some upward pressure on spending.
Central government debt fell below the 60% threshold (59.8%) at end
2024, down from 61.1% in 2023, in part due to support from a strong
exchange rate and a drawdown of deposits. This means a less
stringent version of the fiscal rule will apply to the 2026 budget,
with capex not subject to the strict spending growth cap. Fitch
estimates consolidated general government debt fell to 55% in 2024,
down from 55.3% in 2023.
External Borrowing Authorization: Lower than expected primary
surpluses led the government to propose revisions to the targets in
the Eurobond law, which provides multi-year external borrowing
authorization. Proposed revisions to the law would extend the
additional annual USD1 billion Eurobond issuance authorization by
one year (to 2025 and 2026). The revisions are still being
discussed in Congress, but Fitch expects them to be approved. A
proposed constitutional amendment, that would provide the
government more flexibility in external borrowing on a more
permanent basis, is likely to face greater challenges, particularly
in the run-up to elections in February 2026.
Deep Local Market, Lower Cost Financing: The 2024 deficit was
financed through multilateral financing and the domestic market.
Fitch expects a similar funding mix in 2025, with the potential
addition of USD1 billion in Eurobond issuance if the external
borrowing authorization extension is approved, although Fitch
expects the government to be able to comfortably finance deficits
absent this authorization.
Local interest rates have fallen, and the government has taken
advantage of lower rates to conduct liability management operations
to lower costs and extend maturities, with average maturity of
domestic debt increasing to seven years in 2024 from 5.7 years in
2021. Lower interest rates will help lower the high interest to
revenue ratio (32% at central government level) over the medium
term, although it remains the highest in the 'BB' category and well
above the 'BB' median (10%).
Stronger External Position: Fitch estimates the current account
deficit reached 1.4% in 2024, in line with 2023 and well below its
2010-2019 average (3.7%) and 'BB' median (2.3%). Strong export
performance and tourism sector have led to robust foreign exchange
inflows. Costa Rica seems to be a beneficiary of nearshoring
trends, with strong FTZ export performance and FDI inflows (USD2.6
bn through Q3 2024, on track to match the record set in 2023).
International reserves grew to USD14.2 billion at end 2024, up from
USD13.2 billion at end 2023. Reserves at end 2024 reflected 146% of
the IMF's ARA metric and 4.3 months of CXP (up from 3.1 months in
2022 and approaching BB median of 4.8 months). Greater reserve
accumulation has put Costa Rica in a slight net sovereign external
creditor position as of 2024 (+1%).
Elections in 2026: Congressional and presidential elections will
take place in February 2026. The beginning of the electoral cycle
may mean that any further reforms are hard to advance ahead of
elections, including the constitutional amendment related to
external financing. There is still uncertainty over the potential
candidates this far ahead of elections given Costa Rica's many
political parties and fragmented system. The president's current
popularity remains high, with key voter concerns related to rising
crime and violence.
ESG Governance: Costa Rica has an ESG Relevance Score of '5' for
Political Stability and Rights and '5' [+] for the Rule of Law,
Institutional and Regulatory Quality and Control of Corruption.
These scores reflect the high weight that the World Bank Governance
Indicators (WBGI) have in its proprietary Sovereign Rating Model.
Costa Rica has a high WBGI ranking at 71, reflecting its long track
record of stable and peaceful political transitions, well
established rights for participation in the political process,
strong institutional capacity, effective rule of law and a low
level of corruption.
RATING SENSITIVITIES
Factors that Could, Individually or Collectively, Lead to Negative
Rating Action/Downgrade
- Public Finances: Fiscal policy reversal that results in an upward
debt trajectory in a context of fiscal rigidity;
- External Finances: Evidence of external liquidity stress; for
example, a sharp decline of international reserves.
Factors that Could, Individually or Collectively, Lead to Positive
Rating Action/Upgrade
- Public Finances: Sustained decline in central government's
debt/GDP ratio and interest to revenue ratio;
- Structural Factors: Evidence of reduced political gridlock that
supports progress on reforms and ensures financing flexibility.
Sovereign Rating Model (SRM) and Qualitative Overlay (QO)
Fitch's proprietary sovereign rating model (SRM) assigns Costa Rica
a score equivalent to a rating of 'BBB' on the Long-Term
Foreign-Currency IDR scale.
Fitch's sovereign rating committee adjusted the output from the SRM
score to arrive at the final Long-Term Foreign-Currency IDR by
applying its qualitative overlay (QO), relative to SRM data and
output, as follows:
Structural: -2 notches; reflects a long track record of
institutional gridlock that has hindered timely progress on
necessary reforms and access to external financing, which is not
fully captured in the high governance scores that feed into the
SRM.
Public Finances: -1 notch; reflects an adverse fiscal structure due
to a high central government interest to revenue ratio. Central
government fiscal metrics are much weaker than the general
government metrics that feed into the SRM, signaling greater fiscal
financing and rigidity challenges.
Fitch's SRM is the agency's proprietary multiple regression rating
model that employs 18 variables based on three-year centered
averages, including one year of forecasts, to produce a score
equivalent to a Long-Term Foreign-Currency IDR. Fitch's QO is a
forward-looking qualitative framework designed to allow for
adjustment to the SRM output to assign the final rating, reflecting
factors within Fitch's criteria that are not fully quantifiable
and/or not fully reflected in the SRM.
Country Ceiling
The Country Ceiling for Costa Rica is 'BBB-,' two notches above the
Long-Term Foreign-Currency IDR. This reflects strong constraints
and incentives, relative to the IDR, against capital or exchange
controls being imposed that would prevent or significantly impede
the private sector from converting local currency into foreign
currency and transferring the proceeds to non-resident creditors to
service debt payments.
The BCCR has allowed for greater currency flexibility in recent
years, prompting the IMF to change its classification of the
exchange-rate regime from "crawl-like arrangement" to "floating",
and helping the score in Fitch's CCM.
Fitch's CCM produced a starting point uplift of +2 notches above
the IDR. Fitch's rating committee did not apply a qualitative
adjustment to the model result.
ESG Considerations
Costa Rica has an ESG Relevance Score of '5' for Political
Stability and Rights, as WBGI have the highest weight in Fitch's
SRM and are therefore highly relevant to the rating and a key
rating driver with a high weight. As Costa Rica has a percentile
rank above 50 for the respective governance indicator but has a
track record of political gridlock that is highly relevant to a -2
QO notch adjustment, this has a negative impact on the credit
profile.
Costa Rica has an ESG Relevance Score of '5' [+] for Rule of Law,
Institutional & Regulatory Quality and Control of Corruption as
WBGI have the highest weight in Fitch's SRM and are therefore
highly relevant to the rating and are a key rating driver with a
high weight. As Costa Rica has a percentile rank above 50 for the
respective governance indicators, this has a positive impact on the
credit profile.
Costa Rica has an ESG Relevance Score of '4' [+] for Human Rights
and Political Freedoms as the Voice and Accountability pillar of
the WBGI is relevant to the rating and a rating driver. As Costa
Rica has a percentile rank above 50 for the respective governance
indicator, this has a positive impact on the credit profile.
Costa Rica has an ESG Relevance Score of '4' [+] for Creditor
Rights as willingness to service and repay debt is relevant to the
rating and is a rating driver for Costa Rica, as for all
sovereigns. As Costa Rica has record of 20+ years without a
restructuring of public debt, which is captured in Fitch's SRM
variable, this has a positive impact on the credit profile.
The highest level of ESG credit relevance is a score of '3', unless
otherwise disclosed in this section. A score of '3' means ESG
issues are credit-neutral or have only a minimal credit impact on
the entity, either due to their nature or the way in which they are
being managed by the entity. Fitch's ESG Relevance Scores are not
inputs in the rating process; they are an observation on the
relevance and materiality of ESG factors in the rating decision.
Entity/Debt Rating Prior
----------- ------ -----
Costa Rica LT IDR BB Affirmed BB
ST IDR B Affirmed B
LC LT IDR BB Affirmed BB
LC ST IDR B Affirmed B
Country Ceiling BBB- Affirmed BBB-
senior unsecured LT BB Affirmed BB
=============
J A M A I C A
=============
JAMAICA: BOJ Spent US$1.1-Billion to Stabilise Dollar Last Year
---------------------------------------------------------------
RJR News reports that Bank of Jamaica Governor Richard Byles has
revealed that the Bank spent US$1.1 billion to intervene in the
foreign exchange market in order to stabilise the dollar during the
12-month period ended January 2025.
This compares with US$897 million spent during the 12 month period
ended January 2024, according to RJR News.
This is indicative of the pressures on the exchange rate due to the
widening trade gap and shrinking net remittance flows, the report
notes.
The trade gap widened to US$4.16 billion during the first nine
months of last year, while remittances dipped to US$2.851 billion
during the first 11 months of last year, 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.
On Feb. 21, 2025, Fitch Ratings affirmed Jamaica's Long-Term
Foreign-Currency Issuer Default Rating (IDR) at 'BB-', with a
positive rating outlook. 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 2024, S&P affirmed 'BB-/B' longterm foreign and local
currency sovereign credit ratings on Jamaica and revised outlook to
positive.
=====================
P U E R T O R I C O
=====================
EL CANO: Seeks to Hire Modesto Bigas Mendez as Bankruptcy Counsel
-----------------------------------------------------------------
El Cano Development Inc. seeks approval from the U.S. Bankruptcy
Court for the District of Puerto Rico to employ Modesto Bigas
Mendez, Esq., an attorney practicing in Ponce, Puerto Rico, to
handle its Chapter 11 case.
Mr. Mendez will be compensated at his hourly rate of $250 plus
expenses.
The attorney also received a retainer of $5,000 from
Desarrolladora
Connie, Inc., in favor of the Debtor.
Mr. Mendez disclosed in a court filing that he is a "disinterested
person" as the term is defined in Section 101(14) of the Bankruptcy
Code.
The attorney can be reached at:
Modesto Bigas Mendez, Esq.
Modesto Bigas Law Office
P.O. Box 7462
Ponce, PR 00732
Telephone: (787) 844-1444
Facsimile: (787) 842-4090
Email: modestobigas@yahoo.com
About El Cano Development
El Cano Development Inc. sought relief under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. D.P.R. Case No. 25-00637) on February 17,
2025, listing up to $1 million in both assets and liabilities.
Modesto Bigas Mendez, Esq., serves as the Debtor's counsel.
=====================================
T R I N I D A D A N D T O B A G O
=====================================
TRINIDAD & TOBAGO: Suffering From Carnival Data Poverty
-------------------------------------------------------
Trinidad and Tobago Guardian reports that weak data capture and
ad-hoc event-focused management are among two of the main barriers
preventing T&T from properly monetizing its Carnival product.
This from Dr. Keith Nurse, president of the College of Science
Technology and Applied Arts T&T (COSTATT), who shared his insights
with the Sunday Business Guardian on how this country can properly
cash in on its most touted festival, according to Trinidad and
Tobago Guardian.
Nurse is a former member of Government's Economic Development
Advisory Board and an economist, said, "We need to break out of the
narrow event-focused approach where we only organise for the time
leading up to Carnival. The market in T&T has peaked. The data in
terms of arrivals and even visitor expenditures has plateaued since
about 2014," he said, the report notes.
Stating that the only data that T&T "really captures" is visitor
arrivals, he said these figures have been hovering between 35,000
and 40,000 for more than a decade, the report notes.
Nurse said while visitor arrivals are key to tally, there needs to
be more drilling down on the numbers, as he said a publication
called "Carnival Digest" which used to be prepared by the Central
Statistical Office (CSO), was vital in sharing critical
information, the report says.
However, that has been discontinued for more than a decade, the
report discloses.
"That used to capture the data on not just the arrival and
expenditure, but where people came from in detail and it would also
drill down on all of the expenditures. So, the document would
indicate not just what people were spending on things for Carnival,
but also how much was being spent outside of things related to
Carnival, the report notes.
"So, for example, expenditures on attractions, going to visit the
Caroni Bird Sanctuary or going to Asa Wright. Some of that has been
captured in the tourism data so, festival tourism impact is still
something that we're capturing," Nurse said, the report says.
A resident of Glasgow, Scotland, for about four years, Nurse said
he would go to the Edinburgh festival every year witnessing the
importance of data capture and its impact, the report relays.
"They have about 10 festivals, nine of them happen all at the same
time in the summer, and one happens around Christmas time and they
document the economic impact for each. We've been running longer
than Edinburgh festival . . . And still to this day, we do not
generate an economic report identifying the economic impact, the
report relays.
"This is the greatest tragedy of all tragedies. It's a sad
commentary on our capacity as a country not to document and map the
thing that we are so successful at," Nurse said, the report says.
Noting that several "carnivals" take place at the same time all
over T&T, apart from the main Carnival event in the capital, Nurse
advised that information on the smaller carnivals can also assist
in tracking the progress of emerging ideas, the report notes.
"So, if you don't want to be in Port-of-Spain, there is another
carnival somewhere close by that you can participate in. And what
that has done is actually keep some of the more traditional
masquerade elements, like costuming, alive in some of those
carnivals, the report discloses.
"So, it's like a means of cultural preservation as well as a means
for incubating some of the new ideas that are coming into T&T
Carnival. That's one of the things that the National Carnival
Commission has done well, which it needs to continue to
facilitate," he said, the report relays.
However, Nurse pointed out that what is not being captured now is
data on the ancillary industries, the report says.
"For example, how is Carnival impacting the beverage market? . . .
How is it impacting on the media, radio stations? So, the average
cost of an ad goes up significantly during Carnival period, the
report notes.
"What is the impact on car rentals. And then there are areas
related to what we call the creative industries itself. Has the
cost of costumes gone up, or is it going down? What is the domestic
expenditure on some of these things? We generally don't know. We
have the foreign exchange impact from visitors, but the domestic
expenditure we haven't done an actual study of that for a long
time, if at all, really," Nurse said, the report discloses.
Another area that needs to be examined is intellectual property
branding, which is a big income generator, the report says.
"And that's what we're not maximizing on. So for example, if you go
around the savannah you will see those big billboards. For example,
Johnnie Walker has people on stilts and wearing Pierrot Grenade
costumes or whatever else. Those are really important branding
opportunities from a foreign alcohol producer, the report relays.
"Across from Movietowne, Absolute has a big pan in the middle of
that grassy area. That's another example but as a country, we
haven't been exploiting strategically this element of what I call
destination branding and intellectual property branding. Major
cities all around the world are doing this in a big way," Nurse
explained, the report notes.
In fact, he said "in the literature," intellectual property
branding is referred as "festivalisation," where festivals are used
as a mechanism to generate wealth, jobs, foreign exchange in
multiple sectors, the report relates.
"And that's the beauty of the creative sector. The creative sector
creates many opportunities for what we call spin-off economic
benefits, the report says.
"It has strong multiplier effects, more than you would find in any
other sector. Not in agriculture, not in banking and finance, not
in oil and gas, and so on," Nurse added.
Even after Carnival comes to an end that does not mean data
tracking should be stopped, especially as it relates to the
creative industries exports, the report relays.
He questioned how many masquerade bands are exporting their
services outside of T&T after Carnival, whether it is their design
services or if they selling costumes abroad, the report notes.
Another unknown the economist outlined is the extent to which soca
artistes are performing abroad and how much are they earn, the
report relays.
"How many steelbands are performing outside of Trinidad? What is
the size of their bands? Where are they going? How much are we
earning in intellectual property earnings? On copyright some of
that data you could get from COTT (Copyright Music Organisation of
T&T) but that's only for music. This is multifaceted," Nurse
explained, emphasising there is a whole range of opportunities
associated with T&T Carnival, the report notes.
Even in the beverage sector data can be tracked for the spin-off
Carnival events, he said, the report discloses.
"Is Carib selling more beer in New York or in Washington, DC or
Miami where there are big carnivals. How are we tapping into that?
I know some of the big bands, masquerade bands, have band launches
in these cities as well and they earn income there, the report
says.
"On that side of the equation, we have not been capturing the data.
It's very difficult to capture because often people don't want to
tell you what they're doing and how much they're earning in their
external activities. But if we are serious about building an
industry, then we need to know how our ingenuity and creativity is
being deployed and being monetised. And the key to all of this is
to capture the data," he maintained, the report adds.
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