/raid1/www/Hosts/bankrupt/TCRLA_Public/250324.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
L A T I N A M E R I C A
Monday, March 24, 2025, Vol. 26, No. 59
Headlines
A R G E N T I N A
ARCADIUM LITHIUM: KPMG LLP Raises Going Concern Doubt
ARGENTINA: CGT Plans General Strike Against Milei Government
ARGENTINA: Disinflation Stalled Despite Strength of the Peso
B A H A M A S
FTX GROUP: Feds Say Crypto Lobbyist Can't Delay FTX-Tied Case
B R A Z I L
BANCO DA AMAZONIA: Fitch Affirms 'BB' Long-Term IDR, Outlook Stable
BANCO DO NORDESTE: Fitch Affirms 'BB' Long-Term IDR, Outlook Stable
BANCO NACIONAL: Fitch Affirms 'BB' Long-Term IDR, Outlook Stable
CAIXA ECONOMICA: Fitch Affirms 'BB' Long-Term IDR, Outlook Stable
C O L O M B I A
ECOPETROL SA: Fitch Alters Outlook on 'BB+' IDR to Negative
FIDEICOMISO PA COSTERA: Fitch Alters Outlook on 'BB+' Rating to Neg
D O M I N I C A N R E P U B L I C
[] DOMINICAN REPUBLIC: FUNDECOM Notes 10 Limitations of Consumers
J A M A I C A
[] JAMAICA: Nearly 3,000 MSMEs to Benefit From J$1.9BB EU Grant
P U E R T O R I C O
ORION SECURITY: Seeks Chapter 11 Bankruptcy in Puerto Rico
- - - - -
=================
A R G E N T I N A
=================
ARCADIUM LITHIUM: KPMG LLP Raises Going Concern Doubt
-----------------------------------------------------
Arcadium Lithium plc disclosed in a Form 10-K Report filed with the
U.S. Securities and Exchange Commission for the fiscal year ended
December 31, 2024, that its auditor expressed an opinion that there
is substantial doubt about the Company's ability to continue as a
going concern.
Philadelphia, Pennsylvania-based KPMG LLP, the Company's auditor
since 2017, issued a "going concern" qualification in its report
dated February 27, 2025, citing that the Company has incurred
negative cash flows from operating and investing activities and
projects insufficient liquidity in its future cash flows due to
various restrictions under the Rio Tinto Transaction Agreement that
raise substantial doubt about its ability to continue as a going
concern.
According to the Company, it is limited to ordinary course working
capital strategies under the Rio Tinto Transaction Agreement.
The Company has incurred negative cash flow from operating and
investing activities of $176 million and $445.3 million,
respectively, for the year ended December 31, 2024. "Our
prospective success in funding our cash needs will depend on the
strength of the lithium market and our continued ability to
generate cash from operations and raise capital from other
sources," the Company explained.
The Company's ability to continue developing its portfolio of
expansion projects is dependent on, among other factors, whether
the Company can obtain the necessary financing through a
combination of, but not limited to, the issuance of debt financing,
equity, government funding, and financing and/or prepayments from
existing or future customers. Pursuant to the Rio Tinto Transaction
Agreement, while the Rio Tinto Transaction is pending, as is
standard, we are restricted or prohibited from certain non-ordinary
course capital expenditures without the consent of Rio Tinto and
are required to use commercially reasonable efforts to continue our
existing expansion plans.
"Additionally, during that same time, we are subject to various
restrictions under the Rio Tinto Transaction Agreement on
non-ordinary course raising of additional capital, issuing
additional equity or debt, and pursuing certain activities that
could use significant amounts of our liquidity, including assuming
or incurring additional debt, repurchasing equity, and entering
into certain acquisition and disposition transactions, among other
restrictions without the consent of Rio Tinto, which is not to be
unreasonably withheld. We are permitted to continue to borrow under
our Revolving Credit Facility, under existing project financing
arrangements, and in connection with letters of credit entered into
in the ordinary course of business. Rio Tinto has agreed to
cooperate with the Company to facilitate any necessary or
appropriate actions and arrangements with respect to the Company's
indebtedness in anticipation of the Rio Tinto Transaction. The Rio
Tinto Transaction Agreement also contains standard prohibitions on
the Company's ability to pursue working capital financing
strategies outside the ordinary course that otherwise may be
available to us before Closing, and the Pari Passu Term Loan limits
our ability to manage the timing and amount of certain capital
expenditures. If the transaction does not close, limitations would
cease on the Company's ability to manage its working capital
strategies. In that case, there is no assurance that the Company
will be successful in attracting additional funding. Even if
additional financing is available, it may not be available on terms
favorable to the Company. Failure to secure additional financing on
favorable terms when it becomes required would have an adverse
effect on the Company's financial position and on its ability to
execute its business plan. Our ability to continue as a going
concern is dependent upon our generating cash flow sufficient to
fund operations and reducing operating expenses. Our business
strategy may not be successful in addressing these issues. If we
cannot continue as a going concern, our stockholders may lose their
entire investment."
A full-text copy of the Company's Form 10-K is available at:
https://tinyurl.com/yr8zdpn4
About Arcadium Lithium
Arcadium Lithium plc -- https://arcadiumlithium.com/ -- is a
leading global lithium chemicals producer committed to safely and
responsibly harnessing the power of lithium to improve people's
lives and accelerate the transition to a clean energy future. We
collaborate with our customers to drive innovation and power a more
sustainable world in which lithium enables exciting possibilities
for renewable energy, electric transportation and modern life.
Arcadium Lithium is vertically integrated, with industry-leading
capabilities across lithium extraction processes, including
hard-rock mining, conventional brine extraction and direct lithium
extraction (DLE), and in lithium chemicals manufacturing for high
performance applications. The Company has operations around the
world, with facilities and projects in Argentina, Australia,
Canada, China, Japan, the United Kingdom and the United States.
As of December 31, 2024, the Company has $10.2 billion in total
assets, $3 billion in total liabilities, and total stockholders'
deficit of $7.2 billion.
ARGENTINA: CGT Plans General Strike Against Milei Government
------------------------------------------------------------
Buenos Aires Times reports that Argentina's largest labour
federation, the CGT umbrella union group, will call for a general
strike on April 8, in a fresh challenge to President Javier Milei's
government.
Details of the walkout will be finalised at a meeting of the labour
federation's board, according to Buenos Aires Times. It remains
unclear if the strike will include a mobilisation of workers to
Congress or the Casa Rosada, the report notes.
Leaders from the Confederacion General del Trabajo (CGT),
historically aligned with Peronism, have been fiercely critical of
Milei and his austerity measures, the report notes. Next month's
walkout will be the first CGT strike of 2025 and the third since
the President took office in December 2023, the report recalls.
The meeting will see discussions over a plan of "action and
measures in repudiation of the pressure," said Hector Daer, one of
the CGT's top leaders, in an interview with the TN news channel,
the report relays.
"We are going to be respectful of the fact that, we will have a
meeting of the CGT's board of directors, but what all of us who are
here have agreed on, and we are going to build it together, is a
24-hour strike before April 10," said the labor leader, the report
adds.
About Argentina
Argentina is a country located mostly in the southern half of South
America. Its capital is Buenos Aires. Javier Milei is the current
president of Argentina after winning the November 19, 2023 general
election. He succeeded Alberto Angel Fernandez in the position.
Argentina has the third largest economy in Latin America. The
country's economy is an upper middle-income economy for fiscal year
2019, according to the World Bank. Historically, however, its
economic performance has been very uneven, with high economic
growth alternating with severe recessions, income maldistribution
and in the recent decades, increasing poverty.
In March 2022, the International Monetary Fund (IMF) approved a new
30-month arrangement under an Extended Fund Facility for Argentina
in the amount of SDR 31.914 billion (equivalent to US$44 billion,
or 1000 percent of quota). The IMF Executive Board's decision
allowed the 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: Disinflation Stalled Despite Strength of the Peso
------------------------------------------------------------
Manuela Tobias at Bloomberg News reports that Argentina inflation
picked up slightly in February, in spite of President Javier
Milei's move to slow down the peso's monthly depreciation.
Consumer prices rose 2.4 percent from January, more than the 2.3
percent median estimate of analysts surveyed by Bloomberg. The
previous monthly inflation print came in at 2.2 percent. Annual
inflation slowed down to 66.9 percent, according to government data
published, according to Bloomberg News.
On February 1, the Central Bank slowed down the currency's monthly
slide to one percent from two percent, a move meant to cool
domestic prices that have been stuck between two percent and three
percent per month since October, Bloomberg News relays. While it
boosts Milei's popularity at home, the slowdown also chips away at
the currency's competitiveness abroad and widens the country's
trade balance, which has in the past resulted in devaluations,
Bloomberg News discloses.
"It's a slight acceleration with regards to January's general
print, but nothing we weren't expecting," said Pedro Siaba Serrate,
head of research and strategy at Portfolio Personal Inversiones, a
Buenos Aires broker, Bloomberg News notes. "We'll have to wait to
see how March goes, which our high frequency indicators show could
put a ceiling on this rhythm," he added.
Economy Minister Luis Caputo had previously said in an interview he
hoped the monthly inflation rate would dip below two percent after
the modification, Bloomberg News relays. But economists were
already expecting red meat, which weighs heavily on the inflation
basket, to have a negative impact, Bloomberg News discloses. Kids
started going back to school in February, also putting pressure on
prices, Bloomberg News says. Price hikes were led by housing
costs, followed by food, according to the government data,
Bloomberg News notes.
"Unlike in previous months, food and beverages led increases,
especially red meat, which increased more than seven percent and
less so other areas like vegetable oil," said Maria Castiglioni,
director of consulting firm C&T Asesores in Buenos Aires, Bloomberg
News relays. "Even so, year-on-year inflation fell dramatically
compared with last February," he added.
The economy has been showing consistent signs of gaining momentum
after a deep slump. Economic activity rose 0.5 percent in December,
beating expectations for the third month in a row, Bloomberg News
notes. Meanwhile, the government has sent clear signals that a
fresh program with the International Monetary Fund is closer than
ever, Bloomberg News relays.
Economists surveyed by Argentina's Central Bank expect year-on-year
inflation to plunge to 23 percent this year, while the government
predicted 18 percent in its 2025 budget, 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.
=============
B A H A M A S
=============
FTX GROUP: Feds Say Crypto Lobbyist Can't Delay FTX-Tied Case
-------------------------------------------------------------
Katryna Perera at law360.com reports that New York federal
prosecutors opposed a request from attorney and crypto lobbyist
Michelle Bond to extend filing deadlines for pre-trial motions in
her criminal case until June, saying Bond's inability to access her
assets due to bankruptcy proceedings involving her FTX-affiliated
husband is not enough to warrant a delay.
About FTX Group
FTX is the world's second-largest cryptocurrency firm. FTX is a
cryptocurrency exchange built by traders, for traders. FTX offers
innovative products including industry-first derivatives, options,
volatility products and leveraged tokens.
Then CEO and co-founder Sam Bankman-Fried said Nov. 10, 2022, that
FTX paused customer withdrawals after it was hit with roughly $5
billion worth of withdrawal requests.
Faced with liquidity issues, FTX on Nov. 9, 2022, struck a deal to
sell itself to its giant rival Binance, but Binance walked away
from the deal amid reports on FTX regarding mishandled customer
funds and alleged US agency investigations. SBF agreed to step
aside, and restructuring vet John J. Ray III was quickly named new
CEO.
FTX Trading Ltd (d/b/a FTX.com), West Realm Shires Services Inc.
(d/b/a FTX US), Alameda Research Ltd. and certain affiliated
companies then commenced Chapter 11 proceedings (Bankr. D. Del.
Lead Case No. 22-11068) on an emergency basis on Nov. 11, 2022.
Additional entities sought Chapter 11 protection on Nov. 14, 2022.
FTX Trading and its affiliates each listed $10 billion to $50
billion in assets and liabilities, making FTX the biggest
bankruptcy filer in the US this year.
According to Reuters, SBF shared a document with investors on Nov.
10, 2022, showing FTX had $13.86 billion in liabilities and $14.6
billion in assets. However, only $900 million of those assets were
liquid, leading to the cash crunch that ended with the company
filing for bankruptcy.
The Hon. John T. Dorsey is the case judge.
The Debtors tapped Sullivan & Cromwell, LLP as bankruptcy counsel;
Landis Rath & Cobb, LLP as local counsel; and Alvarez & Marsal
North America, LLC as financial advisor. Kroll is the claims
agent, maintaining the page
https://cases.ra.kroll.com/FTX/Home-Index
The Official Committee of Unsecured Creditors tapped Paul Hastings
as counsel, FTI Consulting, Inc., as financial advisor, and
Jefferies LLC as the investment banker. Young Conaway Stargatt &
Taylor LLP is the Committee's Delaware and conflicts counsel.
Montgomery McCracken Walker & Rhoads LLP, led by partners Gregory
T. Donilon, Edward L. Schnitzer, and David M. Banker, is
representing Sam Bankman-Fried in the Chapter 11 cases.
White-collar crime specialist Mark S. Cohen has reportedly been
hired to represent SBF in litigation. Lawyers at Paul Weiss
previously represented SBF but later renounced representing the
entrepreneur due to a conflict of interest.
===========
B R A Z I L
===========
BANCO DA AMAZONIA: Fitch Affirms 'BB' Long-Term IDR, Outlook Stable
-------------------------------------------------------------------
Fitch Ratings has affirmed Banco da Amazonia SA's (BASA) Long-Term
Foreign and Local Currency Issuer Default Ratings (IDRs) at 'BB'
with a Stable Outlook. Fitch does not assign a Viability Rating to
BASA due to its policy role. In its view, BASA's business activity
and funding profile are heavily determined by its development
status.
Fitch has also affirmed BASA's Long-Term National Rating at
'AAA(bra)'/Stable.
Key Rating Drivers
Government Support Drives Ratings: BASA's IDRs are driven by its
Government Support Rating (GSR) of 'bb' and reflects the potential
for support from the Brazilian authorities. The Stable Outlook on
BASA's Long-Term IDRs mirror the Outlook on the Brazilian sovereign
rating (BB/Stable). BASA's 'AAA(bra)' Long-Term National Rating is
based on potential support and reflects the bank's creditworthiness
relative to other issuers in Brazil.
Moderate Ability of Support: BASA's GSR reflects a moderate
probability of support from the Brazilian government. It's
propensity to support BASA is high, but its ability to do so is
only moderate. This view is largely based on BASA's key regional
policy role and majority state ownership. The sovereign's ability
to provide support is moderate, as reflected in its 'BB' Long-Term
IDRs.
High Policy Role: BASA acts as a key financial agent for the
Brazilian government, prioritizing credit for micro, small, and
medium producers. Its strategy is to enhance the productive sector
and reduce regional disparities, particularly through rural
development. BASA expands credit access across the Amazon region,
playing a crucial role in government development plans and
countercyclical policies to promote economic and social growth in
Brazil's Northern Region.
Majority Government Funding: BASA's policy role is reinforced by
its exclusive management of several government-established funds,
including the Constitutional Fund of the North (FNO), which is
essential for the northern region's economic development. FNO
accounts for about two-thirds of BASA's funding and contributes 50%
of its operating income by assuming part of the credit risk from
FNO loans and managing the fund's operationalization.
Strengthened Business and Financial Profile: Although not
profit-driven, BASA has materially improved risk management,
digital transformation, and governance standards, enhancing
profitability over the last few years. BASA is also diversifying
funding sources beyond FNO funds by pursuing long-term agreements
with institutional investors and multilateral institutions. Fitch
will continue to monitor whether the bank maintains its policy role
with adequate corporate governance and without compromising the
sustainability of its credit metrics.
Controlled Asset-Quality: Despite BASA's risk profile being more
sensitive to downturns than local banks, its 5.2% impaired loans
ratio is well managed through proactive exposure management,
recoveries, and robust loan growth. Rapid expansion introduces
risks, requiring ongoing relief efforts. Delinquency is controlled,
and BASA expects improved asset quality with commodity price
recovery.
Resilient Performance: In 9M24, BASA's operating profit to RWA
ratio declined to 2.85% from 3.6% in 9M23 due to higher loan loss
provisions. Strong revenue from increased business volumes, high
government bond yields, and expanded FNO fund operations, with full
risk assumption, helped offset these pressures. BASA continues to
focus on improving cross-selling and developing additional revenue
streams. Though initially small, these efforts are gradually
contributing to its financial results.
Adequate Capital Buffers: Despite strong loan growth, the CET1
ratio showed improvement at end-3Q24, rising to 14.6% from 13% at
year-end 2023, buoyed by adequate earnings retention and internal
capital generation with a return on average equity (ROAE) of 21.8%.
This provides a satisfactory buffer above minimum requirements and
against moderate asset quality shocks.
Rating Sensitivities
Factors that Could, Individually or Collectively, Lead to Negative
Rating Action/Downgrade
- BASA's Long-Term IDRs and GSR would be downgraded if Brazil's
sovereign rating is downgraded.
- BASA's ratings are also sensitive to a reduced likelihood of
government support. This could be indicated by an adverse change in
BASA's policy role or a material reduction in government
ownership;
- BASA's National Long-Term Rating is sensitive to a negative
change in Fitch's opinion of the bank's creditworthiness relative
to other Brazilian issuers.
Factors that Could, Individually or Collectively, Lead to Positive
Rating Action/Upgrade
- An upgrade of the Long-Term IDRs would require a sovereign
upgrade.
- BASA's National Long-Term Rating is at the highest level on
Fitch's Brazilian national rating scale and cannot be upgraded.
Public Ratings with Credit Linkage to other ratings
BASA's ratings are equalized with Brazil's sovereign rating.
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
----------- ------ -----
Banco da Amazonia
S.A. LT IDR BB Affirmed BB
ST IDR B Affirmed B
LC LT IDR BB Affirmed BB
LC ST IDR B Affirmed B
Natl LT AAA(bra) Affirmed AAA(bra)
Natl ST F1+(bra) Affirmed F1+(bra)
Government Support bb Affirmed bb
BANCO DO NORDESTE: Fitch Affirms 'BB' Long-Term IDR, Outlook Stable
-------------------------------------------------------------------
Fitch Ratings has affirmed Banco do Nordeste do Brasil S.A.'s (BNB)
Long-Term Foreign and Local Currency Issuer Default Ratings (IDRs)
at 'BB'. The Rating Outlooks are Stable. Fitch has also affirmed
BNB's Long-Term National Rating at 'AAA(bra)'/Stable.
Key Rating Drivers
Ratings Equalized with Sovereign: BNB's IDRs are driven by its 'bb'
Government Support Rating (GSR) and reflect the potential support
from the Brazilian authorities. BNB's IDRs, as reflected by its
'bb' GSR are equalized with Brazil's sovereign ratings. The Stable
Outlook on BNB's Long-Term IDR mirrors the sovereign's Outlook.
BNB's National Long-Term Rating is the highest on the Brazilian
National Scale, reflecting potential support from the Brazilian
sovereign.
No Viability Rating Assigned: Fitch does not assign a Viability
Rating (VR) to BNB, consistent with its approach for development
banks. According to Fitch's criteria, VRs are not assigned to
policy banks whose operations are primarily driven by their policy
roles. BNB's business model is heavily influenced by its role as a
key government regional policy bank, executing development plans
and counter-cyclical policies in Brazil's Northeast Region.
Government Support: The Brazilian authorities have a high
propensity to support BNB due to its 97.9% state ownership and
well-defined policy role. However, Fitch considers the authorities'
ability to support BNB as moderate, reflected by Brazil's Long-Term
IDR. Fitch will monitor BNB to ensure it maintains its policy role
with adequate corporate governance, without compromising the
sustainability of its credit metrics.
Important Policy Role: BNB plays a crucial role in long-term
financing in Brazil's Northeast Region, significantly impacting the
market through its management of the Fundo Constitucional de
Financiamento do Nordeste (FNE). Together, BNB and FNE account for
54% of total long-term financing and 48% of rural and
agro-industrial financing, demonstrating their influence in these
sectors. Additionally, BNB's Crediamigo program, the largest
productive microcredit initiative in South America, supports small
entrepreneurs.
State Funds Distribution: As the manager of FNE, BNB supports
economic and social development in Brazil's Northeast. FNE
addresses credit gaps and promotes businesses across various
sectors, focusing on the semi-arid region that requires significant
investment to reduce inequality. FNE's lending assets reached
BRL140.5 billion in 2024, while BNB's own portfolio was BRL17.2
billion.
Well-Managed Asset Quality: BNB's asset-quality metrics are sound
despite its sensitive risk profile due to its policy role. The
impaired loans ratio improved to 5.4% in 2024 from 7.7% in 2023,
benefiting from better collections and renegotiations,
outperforming the industry average. BNB shares 50% of the risk on
off-balance-sheet FNE loans. The bank's record-low NPL ratio in
2024 may rise slightly in 2025 amid high interest rates.
Sound Profitability Despite Policy Role: BNB's profitability is
sound, with a 3.6% operating profit to risk-weighted assets ratio
in December 2024 and a four-year average of 3.7%. Stable income
generation and low funding costs provide a solid buffer against
asset-quality costs.
Adequate Capital Buffers: BNB maintains an adequate buffer over
minimum regulatory requirements, with a CET1 ratio of 12.6% at
end-2024. Fitch expects this ratio to drop marginally in 2025 due
to credit expansion. The bank's capital metrics are bolstered by
Tier II instruments from FNE, which will phase out gradually until
2029. Fitch believes BNB's internal capital generation will manage
this reduction effectively.
Stable Liquidity: BNB's funding and liquidity are stable, with FNE
proceeds as the largest funding source at BRL 14.6 billion, or 35%
of total funding. The bank is actively diversifying funding,
especially from international multilateral agencies, as seen in
2024. Liquidity buffers are ample, at 77% of total assets,
primarily invested in Brazil's sovereign debt.
Rating Sensitivities
Factors that Could, Individually or Collectively, Lead to Negative
Rating Action/Downgrade
- BNB's Long-Term IDR would be downgraded if its GSR was
downgraded. This would result from either the government's weaker
ability to provide support, as indicated by a sovereign downgrade,
or a lower propensity to provide support. The Outlook on Brazil's
sovereign rating is Stable.
- BNB's National Long-Term Rating is also sensitive to a negative
change in Fitch's opinion of the bank's creditworthiness relative
to other Brazilian issuers.
Factors that Could, Individually or Collectively, Lead to Positive
Rating Action/Upgrade
- An upgrade of BNB's Long-Term IDR could follow an upgrade of its
GSR. This would result from the government's stronger ability to
provide support, as indicated by a sovereign upgrade.
- BNB's National Long-Term Rating is at the highest level on
Fitch's Brazilian National Rating Scale for entities with
international ratings equalized with the sovereign and, therefore,
cannot be upgraded.
Public Ratings with Credit Linkage to other ratings
BNB's ratings are equalized with Brazil's sovereign rating.
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
----------- ------ -----
Banco do Nordeste
do Brasil S.A. LT IDR BB Affirmed BB
ST IDR B Affirmed B
LC LT IDR BB Affirmed BB
LC ST IDR B Affirmed B
Natl LT AAA(bra) Affirmed AAA(bra)
Natl ST F1+(bra) Affirmed F1+(bra)
Government Support bb Affirmed bb
BANCO NACIONAL: Fitch Affirms 'BB' Long-Term IDR, Outlook Stable
----------------------------------------------------------------
Fitch Ratings has affirmed Banco Nacional de Desenvolvimento
Econômico e Social's (BNDES) Long-Term Foreign and Local Currency
Issuer Default Ratings (IDRs) at 'BB'. The Rating Outlook is
Stable. Fitch has also affirmed BNDES's long-term National Rating
at 'AAA(bra)'/Stable.
Key Rating Drivers
Ratings Equalized with Sovereign: BNDES's IDRs are driven by its
'bb' Government Support Rating (GSR) and are equalized with
Brazil's sovereign ratings, reflecting the potential support from
the Brazilian authorities. The Stable Outlook on BNDES's Long-Term
IDR mirrors the sovereign's Outlook. BNDES's National Long-Term
Rating is the highest on the Brazilian National Scale.
No Viability Rating Assigned: Fitch does not assign a Viability
Rating (VR) to BNDES, consistent with its approach for policy banks
whose operations are largely determined by their policy roles. The
bank's business model is fully aligned with public policy
guidelines and most of the disbursements involve lending directed
to strategic sectors, representing BNDES's unique policy role.
Government Support: The Brazilian authorities have a high
propensity to support BNDES, the leading development bank, due to
its full federal ownership, policy bank status, and role in
implementing government economic policies. However, Fitch considers
the authorities' ability to support as moderate, as indicated by
Brazil's Long-Term IDR. Fitch will monitor BNDES to ensure it
maintains its policy role with adequate corporate governance,
without compromising the sustainability of its credit metrics.
Key Policy Role: BNDES targets financing for developmental and
large infrastructure projects in key sectors like climate change
mitigation (specifically electric energy), agriculture and small
and medium enterprises (SMEs). Management plans to reinforce its
development agenda by accelerating loan growth like it did in 2024,
following strong balance-sheet deleveraging. BNDES expects
approvals to reach about 2% and disbursements 1.5% of GDP by 2026
and aims to diversify funding sources to support loan portfolio
growth.
Sound Profitability and Capitalization: BNDES has maintained strong
recurring earnings, enhancing internal capital generation. In
December 2024, the bank achieved a 4.5% operating profit to
risk-weighted assets ratio, with a four-year average of 7.4%.
Robust earnings have sustained a solid Common Equity Tier 1 (CET1)
capital ratio of 23.1% at the end of 2024, despite significant
credit expansion and dividends. Though the ratio decreased from
23.8% at YE 2023 due to credit portfolio growth, it remains well
above minimum requirements. The bank's BRL82 billion equity
portfolio offers further capital flexibility through potential
divestments.
Ample Liquidity: BNDES is seeking new funding sources to support
growth, although FAT (Fundo de Amparo ao Trabalhador - the national
worker's unemployment support fund) remains its main funding source
(53%). BNDES's liquid assets remain high, at BRL 144 billion,
despite debt prepayments to the National Treasury.
Rating Sensitivities
Factors that Could, Individually or Collectively, Lead to Negative
Rating Action/Downgrade
- Rating downside for the bank's IDRs and GSR would be contingent
primarily on a downgrade of Brazil's IDRs.
- BNDES's ratings are also sensitive to changes in its strategic
importance to the Brazilian government, which Fitch currently does
not expect.
- The National Long-Term Rating is sensitive to a negative change
in Fitch's opinion of the bank's creditworthiness relative to other
Brazilian issuers.
Factors that Could, Individually or Collectively, Lead to Positive
Rating Action/Upgrade
- Any upside of BNDES's Long-Term IDRs and GSR is contingent on an
upgrade of Brazil's Long-Term IDRs.
- BNDES's National Long-Term Rating is at the highest level on
Fitch's Brazilian national rating scale for entities with
international ratings equalized with the sovereign and, therefore,
cannot be upgraded.
Public Ratings with Credit Linkage to other ratings
BNDES' ratings are equalized with Brazil's sovereign rating.
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
----------- ------ -----
Banco Nacional de
Desenvolvimento
Economico e Social
(BNDES) LT IDR BB Affirmed BB
ST IDR B Affirmed B
LC LT IDR BB Affirmed BB
LC ST IDR B Affirmed B
Natl LT AAA(bra) Affirmed AAA(bra)
Natl ST F1+(bra) Affirmed F1+(bra)
Government Support bb Affirmed bb
CAIXA ECONOMICA: Fitch Affirms 'BB' Long-Term IDR, Outlook Stable
-----------------------------------------------------------------
Fitch Ratings has affirmed Caixa Economica Federal's Long-Term
Foreign and Local Currency Issuer Default Ratings (IDRs) at 'BB'.
The Rating Outlook is Stable. In addition, Fitch has affirmed
Caixa's Government Support Rating (GSR) at 'bb' and Long-Term
National rating at 'AAA(bra)'/Outlook Stable.
Key Rating Drivers
Ratings Driven by GSR: Caixa Economica Federal's IDRs are driven by
its 'bb' Government Support Rating (GSR) and aligned with Brazil's
'BB' IDRs. Caixa's National Ratings indicates its adequate credit
profile relative to Brazilian peers. Fitch's assessment of support
considers Caixa's important policy role and its full ownership by
Brazil's Federal Government.
Moderate Probability of Support: As a state-owned policy bank,
Caixa's IDRs are equalized with Brazil's IDRs due to the
government's strong propensity to support the bank. This is due to
Caixa's important and unique public policy role, and long-term and
strategic government ownership. However, the sovereign's ability to
provide support is moderate due to its actual rating level.
Public Policy Role: Fitch Ratings does not assign a Viability
Rating (VR) to Caixa because, according to the agency's criteria,
VRs are not given to policy banks whose operations are primarily
driven by their policy roles. Still, there has not been any
structural change in the bank's overall strategy. Fitch will
continue to monitor the institution to ensure it maintains its
policy role with adequate corporate governance and without
compromising the sustainability of its credit metrics.
Brazil's Largest Mortgage Lender: Caixa is the third-largest bank
in Brazil by total assets. It dominates the mortgage and savings
sectors, with market shares of 67.2% and 37.4%, respectively, as of
2024. Caixa has various competitive advantages due to its
considerable size, ability to operate at scale, widespread
presence, and established reputation. These strengths contribute to
a diverse and stable revenue stream. Strategically, Caixa aims to
sustain a strong position in the agribusiness market while
expanding total credit origination.
Policy Role Drives Risk Profile: Caixa's primary exposure is to
credit risk, which constitutes 89% of its risk-weighted assets
(RWA). The institution's underwriting standards have historically
fluctuated with economic conditions, reflecting its mandate to
provide credit to lower-income individuals. Nonetheless, Caixa's
leadership is refining these standards, demonstrating a subdued
risk tolerance, increased prudence, and an enhanced emphasis on
financial performance.
Resilient Asset Quality: Fitch considers Caixa's asset quality
stable despite the challenging operating environment of the past
few years. The impaired loans to gross loans ratio was 6.3% at
2024, in line with that of other sizable Brazilian banks. The
four-year average was 7.1% from 2021 to 2024. The ratio of
nonperforming loans (NPLs) was modest at 1.97% at 2024 (2.16% at
2023), reflecting low delinquency, mainly in the real estate loan
portfolio. Fitch does not foresee a marked uptick in impaired loans
over the medium to long term, given the solid collateral backing of
the loan portfolio.
Profitability Below Private Sector Peers: Caixa has traditionally
shown lower profitability than its peers due to its narrower net
interest margins and higher operating costs associated with its
policy role and social mandate. In 2024, Caixa's operating profit
as a percentage of RWA slumped to 1.2%. From 2021 to 2024, this
ratio averaged 1.2%. Fitch expects these ratios to maintain at
current levels through 2025 despite ongoing efforts to improve
profitability metrics.
Capitalization Adequate: Caixa's common equity Tier 1 (CET1)
capital ratio was 14.4% in 2024, a slight increase from 13.9% at
2023. Caixa has taken steps to strengthen its capital structure,
such as cutting costs and boosting its share capital. The bank's
CET1 ratio is strong compared with other major Brazilian banks.
Fitch anticipates this ratio will not significantly drop in the
coming years. In October 2023, Caixa negotiated with the national
treasury to extend BRL18.1 billion in payments from the remaining
BRL33 billion to 2030, instead of 2026.
Strong Funding Profile: The bank's funding base is highly
diversified, supported by its extensive network and primarily
retail funded. Customer deposits (including savings) and
deposit-like local financial bills comprised 59% of total funding
at 2024. The gross loan/deposits ratio was 170% at December 2024,
with a four-year average of 166% (2021-2024).
Caixa holds a strong position in savings despite recent declines
and has increased its issuance of financial bills, especially those
backed by real estate credit, where it has significant exposure.
Caixa maintained robust liquidity, with its LCR indicator at 242.7%
in 2024 and 195.6% in 2023.
Rating Sensitivities
Factors that Could, Individually or Collectively, Lead to Negative
Rating Action/Downgrade
- Caixa's Long-Term IDRs and National Rating, as well as its GSR,
would be downgraded if Brazil's Long-Term IDRs are downgraded;
- Caixa's ratings are also sensitive to a reduced propensity of the
government to support the bank. This could be indicated by an
adverse change in Caixa's policy role or a material reduction in
government ownership;
- Caixa's National Long-Term Rating is also sensitive to a negative
change in Fitch's opinion of the bank's creditworthiness relative
to other Brazilian issuers.
Factors that Could, Individually or Collectively, Lead to Positive
Rating Action/Upgrade
- Positive rating actions on Caixa's Long-Term IDRs and GSR are
contingent on an upgrade on of Brazil's Long-Term IDRs;
- Caixa's National Long-Term Rating is at the highest level on
Fitch's Brazilian National Rating scale for entities with
international ratings equalized with the sovereign and therefore
cannot be upgraded.
VR ADJUSTMENTS
Fitch does not assign a VR or score the standalone credit factors.
Public Ratings with Credit Linkage to other ratings
Caixa's ratings are driven by Brazil's Sovereign Support.
ESG Considerations
The ESG Relevance Score for Community Relations, Social Access,
Affordability is '4[+]'. Caixa's public sector ownership supports
its ability to attract low-cost retail deposits, while its policy
role ensures it retains a dominant position in the low-income
retail mortgage market. These factors considerably boost Caixa's
franchise, strengthen its credit profile and have a moderately
positive impact on its ratings in conjunction with other factors.
Unless otherwise disclosed in this section, the highest level of
ESG credit relevance is a score of '3'. This 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.
Entity/Debt Rating Prior
----------- ------ -----
Caixa Economica
Federal LT IDR BB Affirmed BB
ST IDR B Affirmed B
LC LT IDR BB Affirmed BB
LC ST IDR B Affirmed B
Natl LT AAA(bra) Affirmed AAA(bra)
Natl ST F1+(bra) Affirmed F1+(bra)
Government Support bb Affirmed bb
===============
C O L O M B I A
===============
ECOPETROL SA: Fitch Alters Outlook on 'BB+' IDR to Negative
-----------------------------------------------------------
Fitch Ratings has revised the Outlooks on Colombian Corporates'
Foreign Currency (FC) and Local Currency (LC) Issuer Default
Ratings (IDR) to Negative. The action followed the recent revision
of Colombia's sovereign outlook to Negative.
Key Rating Drivers
Fitch affirmed Ecopetrol S.A.'s Long-Term Foreign and Local
Currency Issuer Default Ratings (IDRs) at 'BB+' and revised the
Outlook to Negative from Stable, reflecting the change in the
Rating Outlook of Republic of Colombia's IDR (BB+/Negative).
The strong linkage to the sovereign reflects Colombia's credit
profile. The ratings also reflect the Colombian government's
significant incentive to support Ecopetrol in the event of
financial distress. This support stems from Ecopetrol's strategic
importance as a key liquid fuel supplier in Colombia and owner of
100% of the country's refining capacity.
Fitch affirmed Interconexion Electrica S.A. E.S.P.'s (ISA)
Long-Term Foreign and Local Currency Issuer Default Ratings (IDRs)
at 'BBB' and revised the Outlook to Negative from Stable, in line
with Ecopetrol. ISA's credit profile matches its 'BBB' rating and
is not limited by the credit profile of its controlling owner,
Ecopetrol. According to Fitch's "Parent and Subsidiary Linkage
Rating Criteria," because Ecopetrol owns more than 51% of ISA,
linkage should be considered in the assessment. The presence of
regulatory ring-fencing mechanisms, material minority shareholders
and a track record of strong governance practices prevent
Ecopetrol's capacity to extract value from its stronger
subsidiary.
Fitch views ISA's funding and cash management policies as highly
autonomous from Ecopetrol, expects ISA to maintain its
independency, positively reflected in the ratings. Consequently,
ISA's ratings result from a 'consolidate plus two' approach to an
IDR of 'BBB'. Any changes in ISA's corporate governance, business,
or financial strategy, may exert downward pressure on the company,
particularly in the event of a structural increase in its dividend
payout ratio.
Fitch affirmed Oleoducto Central S.A. (OCENSA)'s Long-Term Foreign
and Local Currency Issuer Default Ratings (IDRs) at 'BB+' and
revised the Outlook to Negative from Stable, in line with
Ecopetrol. OCENSA's ratings reflect its linkage with Ecopetrol's
credit profile, the largest crude oil producer in Colombia and
OCENSA's main off-taker. OCENSA's operations are integral to
Ecopetrol's core business due to operational synergies. Ecopetrol
relies heavily on OCENSA's infrastructure to transport crude oil
from production fields to refineries and export terminals. Fitch
considers OCENSA strategically important for Ecopetrol because it
transported 82% of Ecopetrol's crude oil production in 2Q24.
Fitch affirmed A.I. Candelaria (Spain), S.A.'s Long-Term Foreign
and Local Currency Issuer Default Ratings (IDRs) at 'BB' and
revised the Outlook to Negative from Stable, in line with OCENSA.
A.I. Candelaria's outstanding notes will remain structurally
subordinated to OCENSA's outstanding USD400 million notes. As the
holding company, A.I. Candelaria depends on dividends from OCENSA
to service its obligations. Therefore, a substantial leverage
increase at OCENSA could increase the structural subordination of
A.I. Candelaria's creditors.
This risk is mitigated by OCENSA's record of stable dividend
distributions and A.I. Candelaria's right to veto changes to
OCENSA's dividend policy and capex plans above USD100 million.
Fitch believes the projected dividend stream will be more than
sufficient to cover interest expense and principal payments on A.I.
Candelaria's outstanding notes.
Fitch affirmed Grupo Energia Bogota S.A. E.S.P. (GEB)'s Long-Term
Foreign and Local Currency Issuer Default Ratings (IDRs) at 'BBB'
and revised the Outlook to Negative from Stable, reflecting the
change to the Rating Outlook of the IDR of Bogota (BB+/Negative).
Fitch assesses GEB's Standalone Credit Profile (SCP) at 'bbb'. GEB
operates independently and autonomously, positively affecting its
ratings.
Fitch believes regulatory ring-fencing mechanisms, material
minority shareholders, and strong governance practices reduce the
parent's capacity to extract value from its stronger subsidiary.
Under Fitch's "Parent-Subsidiary Rating Criteria," these factors
lead Fitch to rate GEB two notches above Bogota's consolidated
profile.
Fitch affirmed Transportadora de Gas Internacional S.A. ESP (TGI)'s
Long-Term Foreign and Local Currency Issuer Default Ratings (IDRs)
at 'BBB' and revised the Outlook to Negative from Stable, in line
with GEB. Fitch caps TGI's SCP at Colombia's 'BBB-' country
ceiling, as 100% of the company's 2024 EBITDA was generated in
Colombia.
TGI's ratings receive a one-notch uplift considering GEB's
medium-to-high operational and strategic incentives to support TGI,
equalizing their ratings, per Fitch's Parent-Subsidiary Linkage
Criteria. These incentives reflect GEB's nearly 100% ownership of
TGI and the substantial financial contribution to GEB of
approximately 45% of GEB's operating EBITDA. Fitch also expects
investment in Colombia and midstream businesses, such as TGI's, to
remain a strategic focus for GEB's future growth.
Fitch affirmed Empresas Publicas de Medellin E.S.P. (EPM)'s
Long-Term Foreign and Local Currency Issuer Default Ratings (IDRs)
at 'BB+' and revised the Outlook to Negative from Stable,
reflecting the change to the Rating Outlook of Medellin's IDR
(BB+/Negative). The linkage reflects the financial relevance of the
company to Medellin, lack of effective documentation that limits
dividend distribution, and the city's influence on the company's
administration and operations. EPM's distributions contribute an
average 20% or more of government revenues and a material 20%-30%
of the city's investment budget.
Fitch affirmed Enel Colombia S.A. E.S.P.'s Long-Term Foreign and
Local Currency Issuer Default Ratings (IDRs) at 'BBB' and revised
the Outlook to Negative from Stable, reflecting the change to the
Rating Outlook of the Republic of Colombia's IDR. The company is
headquartered in Colombia (BB+/Negative), and its operation in this
country represented approximately 90% of its consolidate EBITDA
accumulated for the LTM ended September 2024.
Fitch caps Enel Colombia's SCP at Colombia's 'bbb-', given the
substantial cash flow generation from the country. Cash flows from
the operations in Panama (BB+/Stable), Guatemala (BB/Positive) and
Costa Rica (BB/Positive), exceed the company's hard currency debt
service coverage for the next 12 months by more than 1.5x.
N/A
RATING SENSITIVITIES
Factors That Could, Individually or Collectively, Lead to Positive
Rating Action/Upgrade
- Please refer to each issuer's most recent Rating Action
Commentary at www.fitchratings.com for developments that could
result in a positive rating action.
Factors That Could, Individually or Collectively, Lead to Negative
Rating Action/Downgrade
- Please refer to each issuer's most recent Rating Action
Commentary at www.fitchratings.com for developments that could
result in a negative rating action.
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
Ecopetrol S.A. has an ESG Relevance Score of '4' for Management
Strategy due to reduced visibility on the execution of its growth
strategy, which has a negative impact on the credit profile, and is
relevant to the rating[s] in conjunction with other factors.
Ecopetrol S.A. has an ESG Relevance Score of '4' for Exposure to
Social Impacts due to multiple attacks on its pipelines, which has
a negative impact on the credit profile, and is relevant to the
rating[s] in conjunction with other factors.
Empresas Publicas de Medellin E.S.P. (EPM) has an ESG Relevance
Score of '4' for Governance Structure due to its majority
government ownership and the inherent governance risk that arises
with a dominant state shareholder, which has a negative impact on
the credit profile, and is relevant to the rating[s] in conjunction
with other factors.
The highest level of ESG credit relevance is a score of '3', unless
otherwise disclosed in this section. A score of '3' means ESG
issues are credit-neutral or have only a minimal credit impact on
the entity, either due to their nature or the way in which they are
being managed by the entity. Fitch's ESG Relevance Scores are not
inputs in the rating process; they are an observation on the
relevance and materiality of ESG factors in the rating decision.
Entity/Debt Rating Recovery Prior
----------- ------ -------- -----
Interconexion
Electrica S.A. E.S.P. LT IDR BBB Affirmed BBB
LC LT IDR BBB Affirmed BBB
senior unsecured LT BBB Affirmed BBB
Ecopetrol S.A. LT IDR BB+ Affirmed BB+
LC LT IDR BB+ Affirmed BB+
senior unsecured LT BB+ Affirmed BB+
Empresas Publicas de
Medellin E.S.P. (EPM) LT IDR BB+ Affirmed BB+
LC LT IDR BB+ Affirmed BB+
senior unsecured LT BB+ Affirmed BB+
Oleoducto Central
S.A. (OCENSA) LT IDR BB+ Affirmed BB+
LC LT IDR BB+ Affirmed BB+
Grupo Energia Bogota
S.A. E.S.P. (GEB) LT IDR BBB Affirmed BBB
LC LT IDR BBB Affirmed BBB
senior unsecured LT BBB Affirmed BBB
A.I. Candelaria
(Spain), S.A. LT IDR BB Affirmed BB
LC LT IDR BB Affirmed BB
senior secured LT BB Affirmed BB
Enel Colombia
S.A. E.S.P. LT IDR BBB Affirmed BBB
LC LT IDR BBB Affirmed BBB
Transportadora de
Gas Internacional
S.A. ESP (TGI) LT IDR BBB Affirmed BBB
LC LT IDR BBB Affirmed BBB
senior unsecured LT BBB Affirmed BBB
FIDEICOMISO PA COSTERA: Fitch Alters Outlook on 'BB+' Rating to Neg
-------------------------------------------------------------------
Fitch Ratings has affirmed the following ratings of Colombian
infrastructure issuers:
- Fideicomiso P.A. Costera's (Costera) USD150.8 million USD bonds,
COP327,000 million UVR bonds, and COP135,000 million UVR loan at
'BB+';
- Fideicomiso P.A. Pacifico Tres's (Pacifico Tres) USD260.4 million
USD bonds, COP397,000 million UVR bonds and COP300,000 million UVR
loan at 'BB+';
- Patrimonio Autonomo Union del Sur's (Union del Sur) USD125
million and USD152 million loans, COP1,019.5 billion loan and
COP1,027.5 billion UVR notes at 'BB+'.
The Outlook on the above ratings was revised to Negative from
Stable.
No actions were taken on the national scale ratings of these
issuers.
RATING RATIONALE
The Negative Outlook reflects the potential deterioration of
Fitch's view on the credit quality of Agencia Nacional de
Infraestructura (ANI)'s contributions to the projects, which is one
of their main revenue sources. This action follows Fitch's recent
actions on Colombia's ('BB+'/Negative) sovereign ratings, as ANI is
considered a credit-linked entity to the Government of Colombia.
KEY RATING DRIVERS
Fitch revised the Outlook on Colombia's ratings to Negative from
Stable, given the deterioration in its fiscal position and
uncertain prospects for corrective measures. The central government
fiscal deficit for 2024 came in at 6.7% of GDP, sharply
underperforming Fitch's forecast of 5.6% of GDP, mainly due to
revenue shortfalls and an inability to implement offsetting
spending cuts.
As a result, general government debt to GDP jumped to an estimated
58% from 53% in 2023. Fitch believes that fiscal risks are tilted
to the downside as the government will continue to struggle to meet
fiscal targets and debt to GDP will continue to rise over the
forecast period. For additional details, see "Fitch Revises
Colombia's Outlook to Negative; Affirms IDR at 'BB+'" dated March
6, 2025, available at www.fitchratings.com.
RATING SENSITIVITIES
Factors that Could, Individually or Collectively, Lead to Negative
Rating Action/Downgrade
Costera
- Deterioration in the financial and/or operational performance of
the project, leading to a minimum projected loan life coverage
ratio (LLCR) below 1.3x under Fitch rating case assumptions;
- Deterioration of Fitch's view of the credit quality of ANI's
contributions to the project.
Pacifico Tres
- Failure by the concessionaire to obtain a waiver and/or provide
operations and maintenance (O&M) support that triggers a negative
credit event;
- Deterioration in Fitch's view of the credit quality of ANI's
grantor obligations.
Union del Sur
- Deterioration in the financial and/or operational performance of
the project, leading to a minimum projected LLCR below 1.3x under
Fitch rating case assumptions;
- Deterioration of Fitch's view of the credit quality of ANI's
contributions to the project.
Factors that Could, Individually or Collectively, Lead to Positive
Rating Action/Upgrade
Costera
- Improvement in Fitch's view of the credit quality of ANI's
grantor obligations.
Pacifico Tres
- National scale ratings could be upgraded if the requested waiver
to extend the deadline of the O&M support is approved and the
guarantee is effectively constituted before the extended deadline;
- For the international scale ratings, an improvement in Fitch's
view of the credit quality of ANI's grantor obligations.
Union del Sur
- Improvement in Fitch's view of the credit quality of ANI's
grantor obligations.
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
----------- ------ -----
Fideicomiso P.A.
Costera
Fideicomiso P.A.
Costera/Project
Revenues - First Lien/1 LT LT BB+ Affirmed BB+
Patrimonio Autonomo
Union del Sur
Patrimonio Autonomo
Union del Sur/Project
Revenues - First Lien/1 LT LT BB+ Affirmed BB+
Fideicomiso P.A.
Pacifico Tres
Fideicomiso P.A.
Pacifico Tres/Project
Revenues - First Lien/1 LT LT BB+ Affirmed BB+
===================================
D O M I N I C A N R E P U B L I C
===================================
[] DOMINICAN REPUBLIC: FUNDECOM Notes 10 Limitations of Consumers
-----------------------------------------------------------------
Dominican Today reports that March 15 was International Consumer
Rights Day. To mark the occasion, the Foundation for Consumer
Rights, FUNDECOM, and other organizations have listed 10
limitations that Dominicans face in services, according to
Dominican Today.
'How is the situation of Dominican consumers?'
The report discloses that in this decalogue of issues affecting
citizens in their relationship with the market, consumers and
organizations highlighted the most critical issues and challenges
faced by consumers:
1) High cost of food and medicine
-- An effective public policy is needed to counteract the high
cost of living.
-- Medicines for chronic diseases are not included in the Social
Security catalogue, which implies a high expense to treat diseases
such as diabetes, hypertension, and some types of cancers.
-- The currency's depreciation directly affects the poorest since
the rise in the dollar premium accelerates inflation. The current
exchange rate is the highest on record, impacting the prices of
goods and services without wages compensating for this increase.
2) Purchasing power and insufficient minimum wage
-- According to ILO calculations, the minimum wage should be $815,
but the one set by the National Wages Committee is only half that
figure.
-- The cost of the family basket exceeds 54,000 pesos, affecting
all economic quintiles.
-- The right to healthy food must be guaranteed for the entire
population.
3) Blackouts and high billing in the electric service
-- Blackouts have returned, affecting health, safety, and small
businesses.
-- The interruption of the cold chain puts the preservation of
food and medicines at risk.
-- The electricity bill continues to increase without improvements
in the quality of service.
4) Deficiencies in telephone and internet services
-- The providers deliberately deteriorate the service to force
customers to pay for "improvements".
-- Mobile internet is unstable: calls drop and signal is lost on
the street.
-- INDOTEL must audit telephone companies to prevent abuses
against consumers.
-- In Europe, planned obsolescence is prohibited; A similar
measure should be implemented here to avoid unnecessary expenses on
electronic equipment.
5) Lack of a Nutritional Warning Front Labeling Law
-- Consumers must know what is contained in the products they
consume.
-- Poor diet contributes to diseases such as anemia, tuberculosis,
and other non-communicable diseases such as diabetes, hypertension,
obesity, and certain types of cancers.
6) Shrinkflation: Less product, same price
Although this problem has been reported for four years, the
authorities have not taken action.
-- In Europe and several US states, shrinkflation has been
banned.
Example:
Before: Packages of cookies with 5-6 units -> Now: 4 units, but at
the same price.
The same goes for toothpaste, napkins, soaps, and toilet paper.
-- Shrinkflation is a form of hidden inflation that forces
consumers to buy more to meet their needs.
7) Right to a healthy environment
-- Lack of adequate sanitation and pollution of rivers and natural
resources put public health at risk.
-- Urgent sanitation and water management laws are needed, without
conceding recourse to private companies.
-- The UN recognizes access to water as a fundamental human right,
guaranteeing the exercise of other rights, such as food, health,
and human dignity.
-- The lack of attention to the claims against the construction of
the Cola dam in Pueblo Viejo, Cotuí, due to the damage it implies,
in addition to the disappearance of rivers and streams in the area
that it causes.
-- A social license must be obtained before authorizing the
construction of the aforementioned tailing dam and dedicating part
of the national territory to mining.
8) Suggested prices for essential products
-- The depreciation of the Dominican peso has triggered inflation,
and prices for rice, among other staples in the Dominican diet,
have reached levels never seen before.
-- Price controls in the market were removed, which has allowed
for uncontrolled increases. However, the Law suggests frequent
information on prices in the market, condemns speculation, and
mandates the creation of technical tables to suggest prices in line
with the reality of the market.
-- The government is proposed to establish a list of suggested
prices for basic foodstuffs such as rice, beans, chicken, eggs,
milk, sugar, and drinking water.
9) Lack of access to quality health services
-- Health is a fundamental right, but it is only accessible to
those who can afford expensive health insurance.
-- The majority of the population does not have access to decent
medical services.
10) Right to transit and urban mobility
-- Sidewalks are occupied by construction and businesses, forcing
pedestrians to risk their lives on the streets.
-- The public transport system is deficient, which has driven the
massive purchase of vehicles and motorcycles, increasing traffic
jams in the main cities.
-- The lack of traffic regulations affects the quality of life of
citizens.
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.
S&P Global Ratings affirmed its 'BB' long-term foreign
and local currency sovereign credit ratings on the
Dominican Republic on December 3, 2024. The outlook remains
stable. S&P also affirmed its 'B' short-term sovereign
credit ratings and kept the transfer and convertibility
(T&C) assessment unchanged at 'BBB-'.
Fitch, on November 26, 2024, affirmed the Dominican Republic's
Long-Term Foreign-Currency Issuer Default Rating (IDR) at 'BB-'.
The Rating Outlook is Positive.
Moody's credit rating for Dominican Republic was last set at Ba3
in August 2023 with the outlook changed to positive.
=============
J A M A I C A
=============
[] JAMAICA: Nearly 3,000 MSMEs to Benefit From J$1.9BB EU Grant
---------------------------------------------------------------
RJR News reports that nearly 3,000 micro, small and medium sized
enterprises are expected to benefit from a J$1.9 billion grant from
the European Union.
These funds are being used to help these businesses digitize their
operations through the Jamaica Business Development Corporation,
according to RJR News.
Industry, Investment and Commerce Minister, Aubyn Hill, speaking at
the opening of the JBDC's Manchester Business Centre recently,
said approximately EUR1.7 million in grants have been secured for
the JBDC, 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.
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.
: Cornerstone Business Named as Administrators
=====================
P U E R T O R I C O
=====================
ORION SECURITY: Seeks Chapter 11 Bankruptcy in Puerto Rico
----------------------------------------------------------
On March 7, 2025, Orion Security Service and Investigation
Incorporated filed Chapter 11 protection in the U.S. Bankruptcy
Court for the District of Puerto Rico. According to court filing,
the Debtor reports between $1 million and $10 million in
debt owed to 1 and 49 creditors. The petition states funds will be
available to unsecured creditors.
About Orion Security Service and Investigation
Incorporated Orion Security Service and Investigation Incorporated
Orion Security Service and Investigation Incorporated sought relief
under Chapter 11 of the U.S. Bankruptcy Code (Bankr. D.P.R. Case
No. 25-01003) on March 7, 2025. In its petition, the Debtor reports
estimated assets between $500,000 and $1 million and estimated
liabilities between $1 million an $10 million.
The Debtor is represented by:
Rafael A. Gonzalez Valiente, Esq.
GODREAU & GONZALEZ, LLC
P.O. Box 9024176
San Juan, PR 00902-4176
Tel: 787-726-0077
E-mail: rgv@g-glawpr.com
*********
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 * * *