/raid1/www/Hosts/bankrupt/TCRLA_Public/250417.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
L A T I N A M E R I C A
Thursday, April 17, 2025, Vol. 26, No. 77
Headlines
A R G E N T I N A
ARGENTINA: IMF OKs 48-Month USD20BB Extended Arrangement
ARGENTINA: Milei Hails Shared Values During Ascuncion Talks
ARGENTINA: World Bank to Announce $12 Billion Financing Package
B E R M U D A
BERMUDA: Tariffs Threaten Construction Supply Chain
B R A Z I L
BRF S.A: Fitch Affirms 'BB+' Long-Term IDR, Alters Outlook to Pos.
MARFRIG GLOBAL: Fitch Affirms 'BB+' Long-Term IDR, Outlook Stable
G U A T E M A L A
BANCO AGROMERCANTIL: Fitch Affirms 'BB+' LongTerm IDR, Outlook Neg.
BANCO INDUSTRIAL: Fitch Affirms 'BB' LongTerm IDR, Outlook Positive
M E X I C O
LEISURE INVESTMENTS: Seeks Chapter 11 Bankruptcy in Delaware
X X X X X X X X
LATIN AMERICA: Trump Delays on Most Tariffs for 90 Days
- - - - -
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A R G E N T I N A
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ARGENTINA: IMF OKs 48-Month USD20BB Extended Arrangement
--------------------------------------------------------
The Executive Board of the International Monetary Fund (IMF)
approved a 48-month extended arrangement under the Extended Fund
Facility (EFF) for Argentina amounting to SDR 15.267 billion
(equivalent to about US$20 billion, or 479 percent of quota).
The Executive Board's decision allows the authorities an immediate
disbursement of SDR 9.2 billion, equivalent to about US$12 billion,
to be followed by a first review planned for June 2025 with an
associated disbursement of about US$2 billion.
The new arrangement follows a request by the Argentine authorities
for medium-term balance of payments assistance to support the next
phase of their stabilization and reform agenda. The program is
expected to catalyze further official financing from multilateral
sources-notably from the World Bank Group and IDB-and bilateral
sources, and seeks to facilitate a timely return to international
capital markets.
The authorities' IMF-supported program aims to consolidate the
impressive initial gains from recent policy efforts-anchored by
strong fiscal and monetary adjustment and deregulation
efforts-while addressing Argentina's remaining macroeconomic
vulnerabilities. The program supports a path toward entrenching
macroeconomic stability, strengthening external sustainability, and
laying the foundation for stronger and more resilient growth.
Key pillars of the program include maintaining a strong fiscal
anchor, transitioning towards a more robust monetary and FX regime,
with greater exchange rate flexibility in the context of a gradual
easing of FX restrictions, and advancing a broad range of
structural reforms to foster a more dynamic, market-oriented
economy. Continued steadfast policy implementation and strong
contingency planning will be critical to secure program success,
especially given elevated and rising global risks.
Following the Executive Board discussion, Ms. Kristalina Georgieva,
Managing Director and Chair, made the following statement:
"The Argentine authorities' decisive implementation of their
stabilization plan, centered on a strong fiscal anchor and broad
structural reforms, has yielded rapid disinflation, a solid
economic recovery, and incipient improvements in social indicators.
Despite this early progress, Argentina continues to face
vulnerabilities and structural challenges, including limited
external buffers to address elevated and rising global risks as
well as impediments to strong and sustainable growth.
"Against this backdrop, the authorities are embarking on a new
phase of their stabilization plan, supported by a four-year
Extended Arrangement under the IMF's Extended Fund Facility to
entrench macroeconomic stability, strengthen external viability,
and secure a timely re-access to international capital markets.
Policy priorities center on (i) sustaining the strong fiscal
anchor; (ii) facilitating an immediate transition toward a more
robust monetary and FX policy framework; and (iii) deepening
reforms to create a more open and market-based economy.
"Building on the authorities' commitment to a zero-deficit target
and track record of delivering the first fiscal surplus in almost
two decades, the program focuses on strengthening the quality and
durability of the fiscal anchor. This will be supported by ongoing
spending discipline, efficiency measures, and well-sequenced
reforms of the tax, revenue sharing, and pension systems. Efforts
will continue to provide sufficient fiscal space for priority
social assistance and priority infrastructure spending.
"The authorities will transition toward a new FX regime with
greater exchange rate flexibility to rebuild external buffers and
better manage shocks. This transition is being supported by the
establishment of an enhanced monetary targeting framework with
strict limits on central net domestic assets to support money
demand and disinflation, thereby limiting FX sales. These steps are
complemented by a carefully sequenced easing of distortive FX
restrictions, combined with prudent macroprudential policies to
avoid currency mismatches.
"Building on the impressive ongoing efforts to deregulate the
economy, the program seeks to deepen structural reforms to boost
Argentina's growth, including via its vast potential in energy and
mining. Efforts will focus on further (i) strengthening product and
labor market flexibility, and gradually opening the economy; (ii)
improving state efficiency and its regulatory predictability; and
(iii) enhancing governance and transparency, including by further
aligning anti-corruption and AML/CFT frameworks with international
standards.
"Against the global backdrop of elevated and escalating risks, the
authorities' have contingency plans in place, to be complemented by
agile policy making in the context of program reviews to refine
macroeconomic policies as needed to meet program objectives and
durably restore stability. Clear communication will remain
imperative, as well as the need for broadening the social and
political support for Argentina's ambitious reform program."
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: Milei Hails Shared Values During Ascuncion Talks
-----------------------------------------------------------
Buenos Aires Times reports that President Javier Milei said he is
on the same page as his Paraguayan counterpart Santiago Pena,
proclaiming that "Argentina and Paraguay will be an example to all
South America" in the years to come.
During a brief visit to Asuncion, set against a backdrop of a
global trade war ignited by US President Donald Trump and the
Mercosur trade bloc in crisis, Milei talked up Argentina's ties
with Paraguay and said he and Pena shared a common outlook,
according to Buenos Aires Times.
"Both President Pena and myself know that there is no other road to
prosperity than deregulation and fiscal surplus with the common
good arriving via ideas of liberty," he proclaimed at the end of a
meeting at government house in the Paraguayan capital, the report
relays. "Not via the idea of social justice, which is forced
redistribution of wealth by collectivists."
"On this common denominator of values, we are constructing with
President Peña a bilateral relationship bringing together our
countries which will eventually be transferred to the rest of the
region," stated Milei, adding: "A continent which has suffered too
long the onslaughts of populism can thus move forward for once,"
the report discloses.
The challenge facing both presidents was "the eternal battle
against the omnipresent state and the fiscal deficit via peaceful
cooperation and trade with the outside world," the report relays.
"There is no extravagant mechanism but the conviction that liberty
is the only way possible, enabling me to view with hope a future of
collaboration between our nations," he insisted, speaking with Pena
at his side, the report notes.
Milei said that in recent decades Paraguay "has diligently applied
the ideas of economic freedom and as a result hasovercome inflation
with non-stop growth for over 20 years, attracting investors and
residents from all over the world" while also adding the
achievements of his own government against the "social catastrophe
of inflation," the report relays.
"Evidently they must be doing something right," was his conclusion
on Paraguay at a makeshift press conference which nevertheless
excluded questions from the press, the report discloses.
The two presidents then shared a lunch, following which Milei
boarded a return flight to Argentina, the report notes.
Argentina currently holds the pro-tempore presidency of the
Mercosur trade bloc and Milei is seeking allies to line up against
Brazil's Luiz Inacio Lula da Silva, who has rejected Trump's
proposed tariffs and strongly questioned the Republican leader,
notes the report. Uruguay, now under the leadership of leftist
Yamandu Orsi, is a far from natural ally, the report says.
Milei's visit preceded a meeting of Mercosur foreign ministers,
where Trump's 10-percent tariffs -- slapped on all South American
countries alike -- loomed as a prime issue, the report notes.
Trump's last-minute decision to halt the duties for 90 days will
give the bloc further breathing room, though any shared position is
unlikely, the report discloses. Milei has already indicated that
he wants to secure a free-trade deal independently with the United
States and has even threatened to take Argentina out of Mercosur if
necessary in order to do so, the report says.
While Argentina and Paraguay have pending issues regarding the
Hidrovia waterway and the Yacyreta hydro-electric dam, Milei sought
agreement with Pena regarding the aggressive US tariff policies,
the report notes.
Underlining the extent of his unhappiness, Lula described Trump as
"a citizen who believes himself entitled to dictate rules to
everything in the world," the report notes.
Foreign Ministry officials in Brasilia, however, indicate that
there is room for negotiations with the US government, 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: World Bank to Announce $12 Billion Financing Package
---------------------------------------------------------------
globalinsolvency.com, citing Reuters, reports that the World Bank
is poised to announce a $12 billion financing package for
Argentina, supplementing the International Monetary Fund's expected
approval of a $20 billion Argentina loan deal, a source with
knowledge of the plan said.
The Inter-American Development Bank also is expected to announce
its own Argentina financing package, a second source said after
Argentina's central bank announced that it will ease its foreign
exchange market controls, allowing the peso to freely fluctuate
within a moving band of between 1,000 and 1,400 pesos per dollar,
according to the report.
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 E R M U D A
=============
BERMUDA: Tariffs Threaten Construction Supply Chain
---------------------------------------------------
Claire Shefchik at Bermuda Royal Gazette reports that as
international trade tensions ramp up, the construction supply
sector is facing the prospect of proposed port fees for shipping
companies of up to $1.5 million per call for vessels built or
flagged in China.
It would drive up the costs for importers, according to Bermuda
Royal Gazette.
"I can't absorb the cost. We sell building supplies. It isn't a
high margin business," said Sascha Bearden, the owner of Baptiste
Ltd, a key construction supplies distributor, the report notes.
Higher prices aren't the solution, either. "There's sort of a
certain price point that people will pay for a product, and you
just simply can't sell it for more than that. People would either
go without. I mean, it's not like milk, eggs and bread," she added,
the report relates.
In the past, manufacturers have relocated to circumvent previous
tariffs, she said. But that won't work this time, the report
notes.
"What happened was a lot of kitchen cabinets and furniture was made
in China. When President Trump was first in office, he introduced
tariffs on exactly that. So what they did was all these companies
just pivoted to manufacturing in Vietnam or somewhere else," she
said, the report relays.
"Our in-stock kitchen cabinet line is made in Vietnam to avoid the
tariffs. Well, now he's put tariffs on Vietnam," she added.
Baptiste is investigating alternative sourcing, with Ms Bearden's
gaze in particular, turned south. "We can pretty quickly pivot to
Mexico," she said. "There's a lot of great manufacturers down
there that we could get plumbing and electrical from," she noted,
the report relays.
However, she added that transportation logistics pose headaches.
"The problem starts becoming the freight, right?
"Because buying out of Florida, the container rate is really good.
But once you start buying from Canada, now you need to start doing
an intermodal rate, the report notes.
"You'd have to pay trucking from Canada to the US East Coast, that
starts adding thousands to a container."
Large US distributors also offer economies of scale that Canadian
suppliers cannot match, she said, the report relays.
"They're huge, and they have buying power with so many different
manufacturers that we couldn't buy enough from them at a time," she
explained. "And then I have to buy a container of bathtubs and a
container load of tools just to make it worth my while and then I
end up sitting on it, so it's not great for cashflow."
The company is exploring other logistics hacks, including using
bonded warehouses, the report notes.
"Some of our product comes in-bond, so it might be made in Mexico,
but it sits in-bond in Florida on its way to us, so that'll never
attract a tariff," Ms. Bearden explained, the report discloses.
Fortunately, Baptiste Ltd maintains some insulation from potential
disruptions, the report relays.
"Our windows and doors are all made in the US. Our tile comes from
Europe. A lot of our housewares come from Europe," she said, the
report notes.
With Bermuda's population, the economic stakes are particularly
high, but Ms Bearden admitted there's not a lot local government
can do to mitigate them, the report relays.
"Look, there's 60,000 of us sitting on a little rock in the middle
of the Atlantic. I mean, we probably have as much sway as penguins
do on the islands," she remarked.
But as trade tensions continue, local enterprises will survive, she
said. "We'll adapt. We certainly can't afford our prices to go up
by 25 to 50 per cent across the board. Because, I mean, imagine
what that would do for inflation here in Bermuda. It's already an
expensive place to live.
"I think all of us, like all of the retailers in Bermuda, if the
tariffs last, we'll all start pivoting more towards Europe, Canada,
Mexico, or figuring out ways of doing stuff in-bond through the
United States," she added, notes the report.
===========
B R A Z I L
===========
BRF S.A: Fitch Affirms 'BB+' Long-Term IDR, Alters Outlook to Pos.
------------------------------------------------------------------
Fitch Ratings has affirmed BRF S.A.'s Long-Term Foreign Currency
(FC), Local Currency (LC) Issuer Default Ratings (IDRs) and senior
unsecured notes issued by BRF and by BRF Gmbh, guaranteed by BRF,
at 'BB+', and its National Scale Long-Term Rating and its local
bonds at 'AAA(bra)'. The Rating Outlook for the IDRs has been
revised to Positive from Stable. The Rating Outlook for the
National Scale rating is Stable.
The Positive Outlook incorporates Fitch's expectation of sustained
operating efficiencies and strong cash flow generation that would
result in BRF's net leverage trending below 1.0x by YE 2025.
Sustained solid operating results and credit metrics through the
industry cycle, along with financial discipline, could support an
upgrade for the IDRs.
BRF's ratings reflect its leading position in global poultry
exports and the Brazilian processed food market, solid liquidity,
and low refinancing risk.
Key Rating Drivers
Strong Market Positions: BRF holds a leading role as one of the
world's largest poultry exporters and a prominent processed foods
business in Brazil. Its extensive distribution network and strong
brands provide significant market scale and diversification,
setting it apart from competitors. BRF's diverse sales, including
substantial international operations, reduce exposure to domestic
risks and enhance its business strategy compared to other players
in the Brazilian market.
Positive Chicken Meat Demand: Fitch expects a positive long-term
outlook for the protein sector, driven by the increasing demand for
chicken meat, which is more affordable than other proteins like
beef or pork, and solid export market demand. The U.S. Department
of Agriculture projects stable domestic chicken meat consumption in
Brazil and export growth of approximately 2.0% YoY in 2025.
Stable Grains Prices: Conab (National Supply Company in Brazil)
forecasts Brazil's soybean and corn production to reach 167 million
and 120 million tons, respectively, in 2025. It also expects
increased grain output to benefit pork and poultry industries by
keeping costs under control, as grains constitute a significant
portion of animal protein processing costs.
Processed Food Provides Stable Margins: The strong brands and
participation in the Brazilian domestic market of processed food
with more stable margins help reduce volatility in the poultry
business. The poultry and pork industries are subject to
cyclicality and volatility in commodity and animal protein prices
and demand. These are influenced by global trading dynamics,
weather conditions, disease outbreaks, supply chain disruptions,
regulatory changes, and FX rates.
Positive FCF: According to Fitch's calculations, BRF's EBITDA will
be BRL9.5 billion in 2025, relatively stable compared to BRL9.0
billion in 2024, and a significant increase from the BRL3.6 billion
in 2023. Margin improvement is boosting cash flow generation and
resulting in positive FCF. Capex is expected to remain steady at
around BRL3.4 billion, with dividends at about 25% of net income.
Net Leverage below 1.0x in 2025: Fitch anticipates that BRF's net
leverage (calculated by Fitch) will strengthen to below 1.0x by YE
2025, down from 5.4x in 2022, 3.1x in 2023 and 1.1x in 2024. This
deleveraging performance was supported by a BRL5.3 billion capital
infusion in 2023, declining corn and soybean prices since 2023,
rising chicken prices in 2024, and the group's efficiency program,
which improved feed conversion rates, reduced logistics expenses,
and boosted productivity.
Parent Subsidiary Linkages: BRF's Standalone Credit Profile (SCP)
is 'bb+'. Fitch's assessment considers BRF has the same credit
profile as Marfrig, its parent company and consolidating entity.
However, if BRF had a stronger credit profile, with no legal
ring-fencing and porous access & control, it could be rated up to
one notch above Marfrig.
Peer Analysis
BRF's (BB+/Positive) ratings are below other large food processors
such as Grupo Bimbo S.A.B de C.V.'s (Bimbo; BBB+/Stable), Sigma
Alimentos, S.A. de C.V.'s (Sigma; BBB/Stable), and The Kraft Heinz
Company (Kraft Heinz; BBB/Stable). Despite the level of exports,
most of BRF's industrial plants and revenues are in Brazil. The
weaker operational environment of Brazil in relation to Mexico and
the U.S. should be considered when comparing BRF with these other
issuers.
BRF's credit metrics are strong and are projected to remain robust
in 2025. However, Fitch considers BRF's profit has been more
volatile than the processed food industry average over the past
four years.
Key Assumptions
- Single-digit revenue growth driven by volume and price growth;
- EBITDA around of BRL9.5 billion in 2025 and 2026;
- Capex around BRL 3.4 billion in 2025 and 2026;
- Dividends of 25% of net income.
RATING SENSITIVITIES
Factors that Could, Individually or Collectively, Lead to Negative
Rating Action/Downgrade:
- Net debt/EBITDA above 3.5x or gross debt/EBITDA above 4x for a
sustained period;
- Sustained negative FCF generation;
- Downgrade of more than one notch of the parent company.
Factors that Could, Individually or Collectively, Lead to Positive
Rating Action/Upgrade
- Gross leverage below 3x and net leverage below 2.5x for a
sustained period;
- EBITDA margin before IFRS toward 15%;
- FCF margin toward 3%;
- An upgrade of Marfrig.
Liquidity and Debt Structure
BRF's liquidity has improved compared to previous years. BRF had
BRL12.7 billion in cash and cash equivalents at fiscal YE 2024 and
BRL941 million in short-term debt, composed mainly of trade finance
and working capital lines, and excluding non-recourse factoring of
receivables. Approximately 58% of gross debt is denominated in
foreign currency.
Issuer Profile
BRF is one of the largest food companies in the world, with brands
such as Sadia, Perdigao, Qualy, Banvit, Perdix. Its products are
sold in more than 120 countries in the Americas, Africa, Asia,
Europe, Eurasia and the Middle East.
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
BRF S.A. has an ESG Relevance Score of '4' for Governance Structure
due to the influence of Marfrig on BRF's board and its 50% share of
the company. The shareholder's strong influence on management could
result in decisions detrimental to the company's creditors, 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
----------- ------ -----
BRF S.A. LT IDR BB+ Affirmed BB+
LC LT IDR BB+ Affirmed BB+
Natl LT AAA(bra) Affirmed AAA(bra)
senior unsecured LT BB+ Affirmed BB+
senior unsecured Natl LT AAA(bra) Affirmed AAA(bra)
BRF GmbH
senior unsecured LT BB+ Affirmed BB+
MARFRIG GLOBAL: Fitch Affirms 'BB+' Long-Term IDR, Outlook Stable
-----------------------------------------------------------------
Fitch Ratings has affirmed Marfrig Global Foods S.A.'s Long-Term
Foreign Currency and Local Currency Issuer Default Ratings (IDRs)
at 'BB+'. Fitch has also affirmed MARB BondCo PLC and NBM US
Holdings, Inc.'s senior unsecured notes at 'BB+'. Fitch has
additionally affirmed Marfrig's National Scale rating and
debentures at 'AAA (bra)'. The Rating Outlook is Stable.
Marfrig's ratings reflect its strong business profile as a global
animal protein player, with well established assets in Brazil and
in the U.S., in beef, poultry and processed food through its
controlling stake in National Beef and BRF S.A. (BRF) as well as
its beef operation in South America.
The Stable Outlook reflects a deleveraging expectation over the
rating horizon, supported by strong operating cash flow from BRF,
good liquidity, with a favorable debt amortization profile, asset
sales in South America, and a focus on more profitable markets,
although Fitch does not anticipate margin recovery for the U.S.
beef sector.
Key Rating Drivers
Strong Business Profile: Marfrig is an important global animal
protein player, operating as a beef producer in south America,
mainly in Brazil, and controlling National Beef, the fourth largest
beef processor in the U.S. and BRF, the leading poultry exporter
and processed food producer in Brazil. Combined these three
operations provide adequate diversification in proteins, location
of industrial plants, products, brands and markets attended.
Net Leverage below 3.0x in 2025: Fitch forecasts Marfrig's
consolidated net leverage to decline toward 2.7x in 2025 (from 3.3x
in 2024) based on BRF's strong performance, driven by operating
efficiency, low feed costs and positive chicken demand, despite
National Beef margins remaining flat.
Animal Protein Perspectives: U.S. beef market fundamentals remain
challenging, resulting in compressed processing spreads due to high
live cattle prices and multidecade low beef inventories from herd
liquidation. In contrast, Brazilian beef processors benefit from a
favorable cattle cycle due to expanding production, rising
consumption and increasing exports. The poultry market fundamentals
remain healthy in 2025, supported by stable grain prices and
continued consumption growth in key regions such as the U.S. and
Brazil.
Navigating New U.S. Tariffs Challenges: Fitch believes the recently
announced 10% tariff on U.S. imports from Brazil is neutral to
positive for Marfrig, as the company attends the U.S. market mainly
from the operations of National Beef (U.S. company), which is
focused on the domestic market (90% of the revenues). The exports
are mainly held by BRF and South American operation, which Fitch
believes may gain some space in foreign markets.
Asset Sale was Positive: The sale of several beef industrial assets
in South America positively impacted Marfrig's deleveraging process
and improved its financial flexibility. In addition, the reduction
of South American operation to a few beef industrial plants, will
support the company's strategy to focus on value-added products, to
increase plant utilization rates and enhance cattle traceability.
This shift will expedite the reaching of cattle traceability
targets, reduce environmental risks related to deforestation in the
Amazon Biome and supply chain monitoring. In terms of scale, the
new transaction reduced Marfrig's diversification in South America,
moving it from the 2nd to the 3rd largest beef producer in Brazil.
BRF Boosts Marfrig's Cash Flow: Fitch evaluates Marfrig's
financials on a consolidated basis, including 100% of BRF but
excluding dividends from BRF to minorities in its EBITDA
calculations for credit ratios, as per out methodology. As South
American beef operations are scaled back and North American beef
operational margins are not projected to recover yet, BRF is
becoming increasingly vital to the group's cash generation; it
contributed ~75% of the Group's EBITDA in 2024 and Fitch forecasts
that this contribution will continue for 2025 and 2026, making it
the primary focus for projected Capex and growth strategies of the
Group.
Peer Analysis
Marfrig's ratings (BB+/Stable) reflect its solid business profile
and geographic diversification in the beef industry, with an
important presence in South America (notably in Brazil) and the
U.S. through National Beef and in the poultry and proceed food
business in BRF. Its size compares favorably with regional peer
Minerva S.A. (BB/Stable), which became a larger beef processor in
South America, but does not have poultry and access the U.S. market
by exports. JBS S.A. (BBB-/Stable) and Tyson Foods, Inc
(BBB/Stable) enjoy a larger scale of operations, and higher product
and geographical diversification than Marfrig.
Key Assumptions
- Profitability in 2025 and 2026 in line with 2024;
- Positive FCF;
- Adjusted net leverage below 3x as of YE 2025.
RATING SENSITIVITIES
Factors that Could, Individually or Collectively, Lead to Negative
Rating Action/Downgrade--Negative FCF on a sustained basis;
- Net leverage above 3.5x on a sustainable basis.
Factors that Could, Individually or Collectively, Lead to Positive
Rating Action/Upgrade
- Net leverage below 2.5x, respectively and gross leverage below
3.5x, on a sustained basis.
- (CFO-Capex)/Debt above 7.5%.
Liquidity and Debt Structure
On consolidated basis, Marfrig had BRL22.5 billion of cash and cash
equivalents compared with BRL8.3 billion and BRL10 billion due in
2025 and 2026, respectively as of FYE 2024.
Issuer Profile
Marfrig Global Foods S.A. is a multinational in the animal protein
sector, operating as a beef processor in South America and
controlling National Beef, the fourth largest US beef processor,
and BRF, a leading poultry exporter and processed food company in
Brazil.
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
Marfrig Global Foods S.A. has an ESG Relevance Score of '4' for
Waste & Hazardous Materials Management; Ecological Impacts due to
supply chain management and its exposure to cattle sourcing from
the Amazon biome. The company's exposure to land use and ecological
impact could result in decisions being made to the detrimental to
the company's, which has a negative impact on the credit profile,
and is relevant to the rating[s] in conjunction with other
factors.
Marfrig Global Foods S.A. has an ESG Relevance Score of '4' for
Governance Structure due to the Molina family's control of the
company and the lack of a detailed succession plan. The company has
pursued multiple strategies in the past decade, buying and selling
companies, which remains a key credit consideration. The
shareholder's strong influence on management could result in
decisions that are made to the company's detriment, 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
----------- ------ -----
NBM US Holdings, Inc.
senior unsecured LT BB+ Affirmed BB+
MARB BondCo PLC
senior unsecured LT BB+ Affirmed BB+
Marfrig Global
Foods S.A. LT IDR BB+ Affirmed BB+
LC LT IDR BB+ Affirmed BB+
Natl LT AAA(bra)Affirmed AAA(bra)
=================
G U A T E M A L A
=================
BANCO AGROMERCANTIL: Fitch Affirms 'BB+' LongTerm IDR, Outlook Neg.
-------------------------------------------------------------------
Fitch Ratings has affirmed Banco Agromercantil de Guatemala, S.A.'s
(BAM) Long-Term (LT) Foreign and Local Currency Issuer Default
Ratings (IDRs) at 'BB+'. Fitch also affirmed BAM's Short-Term (ST)
Foreign and Local currency IDRs at 'B', the Shareholder Support
Rating (SSR) at 'bb+' and the Viability Rating (VR) at 'bb- '. The
Outlook on the LT IDRs is Negative.
Key Rating Drivers
Ratings Driven by Shareholder Support: BAM's IDRs are driven by its
'bb+' Shareholder Support Rating (SSR), reflecting Fitch's
assessment of Bancolombia S.A.'s (Bancolombia) ability and
propensity to support the Guatemalan bank, if necessary, due to
BAM's strategically significant role in Bancolombia's international
operations. In Fitch's view, any support requested by the
subsidiary would not impose a significant financial burden on
Bancolombia, as BAM's total assets represented approximately 7.2%
of Bancolombia's consolidated total assets as of YE 2024.
Bancolombia's future corporate evolution, in which it ceases to act
as a holding company and transfers its activities to Grupo Cibest,
will not alter operations, debt structure, asset divestment, or
interrupt any business lines. Fitch does not foresee a reduction in
the propensity to support after the process is completed and
expects BAM´s ratings to remain at current levels.
Strategic Role Underpins Support: Fitch believes BAM's significant
strategic role for its shareholder in Central America underpins the
propensity for support, especially given Bancolombia's goals to
strengthen its international franchise presence in the region.
Support is evident through credit facilities, capital injections,
and client referral programs that benefit the Guatemalan
subsidiary.
BAM's commercial objectives are closely aligned with Bancolombia's,
resulting in strong synergies and a high degree of integration in
administration, technology, controls, and human resources. Given
this extensive integration, any default by BAM would pose a
significant reputational risk to Bancolombia and its affiliates.
BAM's banking activities cover services across the retail, private,
commercial, and insurance sectors, offering products such as credit
cards, savings accounts, investments, credit facilities, and
treasury services.
Good Franchise Drives BAM´s VR: BAM's 'bb-' Viability Rating (VR)
reflects its consistent business model and good market position
within the Guatemalan banking system. As of YE 2024, the bank
ranked fourth in the country by total loans, holding a market share
of 10.0%, and fifth by customer deposits, with a market share of
7.9%. This positioning has led to a stable Total Operating Income
(TOI), with a four-year average of USD265.4 million, although still
below direct peers. Despite some profitability deterioration, the
VR considers BAM's good asset quality, sound capitalization, and
stable funding profile.
Reasonable Asset Quality: As of YE 2024, BAM's impaired loans to
gross loan ratio increased to 2.2%, up from its four-year average
of 1.8%, after a 14.5% rise in delinquent loans. The credit
portfolio deterioration primarily stemmed from retail lending,
which has faced challenging market conditions since 2023. However,
risks have been partially mitigated by loan loss allowances,
covering 99.1% of impaired loans and increasing by 42.7% in 2024.
Fitch expects asset quality to remain reasonable and commensurate
with its current 'bb' score. Better credit underwriting in consumer
segment and efforts to boost business volumes in the commercial
credit portfolio are anticipated to offset the current
deterioration in asset quality.
Weak Profitability: BAM's operating profit to risk-weighted assets
(RWA) ratio declined to -0.14% in 2024, its lowest level in recent
history. Despite this drop, the last four-year average of this core
metric remains at 1.1%, allowing the factor to be scored at 'b+'
without affecting BAM's viability rating of 'bb-'. Earnings
continue to be impacted by high impairment charges due to increased
reserves, following the bank's alignment with local regulatory
changes focused on expected losses. Fitch anticipates a modest
improvement in the bank's profitability, driven by increased
business volume, enhanced operational efficiency, and a shift
towards lower-cost funding.
Good Capitalization Metrics: BAM's capitalization metrics remain in
line with regulatory and internal limits, which, in Fitch's view,
reflects the bank's ability to support business growth and absorb
potential operational losses. As of YE 2024, the Fitch Core Capital
(FCC) to RWA ratio was 11.1%, slightly below its four-year average
of 11.3%. The recent performance allows BAM's capitalization and
leverage key rating driver to be scored at 'bb-' with a Stable
trend. Despite a dividend payment of GTQ77.8 million and reduced
net income due to higher impairment charges, the total capital
ratio met its regulatory requirement of 10%, standing at 12.4% in
2024.
Stable Funding and Adequate Liquidity: As of YE 2024, the bank's
loan-to-deposit ratio was 100.1%, closely aligning with its
four-year average of 100.3%. In Fitch's opinion, this outcome
reflects the stability of customer deposits, which grew by 7.3%,
alongside a moderate 5.9% growth in gross loans during 2024.
Throughout this period, customer deposits remained the primary
source of funding, as indicated by the customer deposits to total
non-equity funding ratio of 83.1% (2023: 84.3%). Nonetheless, BAM
maintains ample local and international funding options, helping
reach adequate liquidity levels, as evidenced by its liquidity
coverage ratio of 219% in 2024.
Rating Sensitivities
Factors that Could, Individually or Collectively, Lead to Negative
Rating Action/Downgrade
- A downgrade of Bancolombia's IDR or lower support propensity
could result in a downgrade of BAM's LT and ST IDRs, and SSR;
- BAM's VR could be downgraded in the event of a prolonged and
significant decline in loan quality that persistently erodes
profitability and leads to a diminished assessment by Fitch of the
bank's business profile strength.
Factors that Could, Individually or Collectively, Lead to Positive
Rating Action/Upgrade
- BAM's FC IDR and SSR could be upgraded if the Guatemala's country
ceiling and Bancolombia's IDRs are also upgraded; the LC IDR could
be upgraded due to an upgrade in Bancolombia's IDR;
- VR could be upgraded if the bank improves its operating profit to
RWAs consistently above 2.5% or its FCC to RWAs above 13.0%,
maintaining a stable asset quality, funding and liquidity profile.
VR ADJUSTMENTS
- BAM's OE score of 'bb-' has been assigned above the 'b' category
implied score due to the following adjustment reason: Sovereign
rating (positive).
- The business profile assessment of 'bb-' has been assigned above
the implicit assessment of category 'b' due to the following
adjustment reason: Market position (positive).
Summary of Financial Adjustments
Prepaid expenses and other deferred assets were reclassified as
other intangible assets and were deducted from FCC since the agency
considers these to have low capacity to absorb losses.
Public Ratings with Credit Linkage to other ratings
BAM's ratings derive from the support of Bancolombia
(BB+/Negative).
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 Agromercantil
de Guatemala S.A. LT IDR BB+ Affirmed BB+
ST IDR B Affirmed B
LC LT IDR BB+ Affirmed BB+
LC ST IDR B Affirmed B
Viability bb- Affirmed bb-
Shareholder Support bb+ Affirmed bb+
BANCO INDUSTRIAL: Fitch Affirms 'BB' LongTerm IDR, Outlook Positive
-------------------------------------------------------------------
Fitch Ratings has affirmed Banco Industrial, S.A.'s (Industrial)
Long-Term (LT) Foreign Currency (FC) and Local Currency (LC) Issuer
Default Ratings (IDRs) at 'BB', Short-Term (ST) FC and LC IDRs at
'B', Viability Rating (VR) at 'bb', and Government Support Rating
(GSR) at 'bb-'. The Rating Outlook for the LT IDRs is Positive.
Fitch has also affirmed Industrial's subordinated notes.
Key Rating Drivers
Ratings Underpinned by Standalone Performance: Industrial's IDRs
are supported by the bank's intrinsic creditworthiness captured in
its 'bb' VR, which is consistent with its implied VR level. The VR
denotes Industrial's solid business profile and strong risk
management, as well as its leadership position in Guatemala, which
has reflected in its steady financial profile.
The IDRs' Positive Outlook mirrors the Outlook on Guatemalan
banking system's operating environment (OE) assessment and
Guatemala's IDR. This reflects Fitch's expectation that
improvements in the OE will enhance the bank's credit profile, as
its solid market position is anticipated to continue to support its
financial performance.
Strong Business Profile and Leadership: Industrial's business
profile score of 'bb', with positive trend reflects its notable
competitive position as Guatemala's leading bank, with loan and
deposit market shares of 29.2% and 26.9%, respectively, as of
December 2024. Its consistent business model, effective execution,
along with its recognized franchise in Central America as part of
Corporación Bi, and broad access to diverse funding sources, have
resulted in total operating income growing to USD978 million in
2024 (2020-2023 average: USD711 million). This TOI is the second
highest in the Guatemalan banking industry, though it remains
relatively modest globally.
Good Loan Quality Levels: In 2024, the nonperforming loan (NPL) to
gross loan ratio increased to 1.8% from 1.2% in 2023, driven by the
bank's strategy to continue growing in the retail segment, as well
as pressure on debtors' payment capacity in the system. As of
December 2024, the banking system's NPL metric was 2.5% (2023:
1.8%). Meanwhile, reserve coverage was 118.3%, below the system and
its closest peers.
Fitch expects that, given the bank's initiatives, the loan quality
ratio will remain stable and continue to improve over the medium
term, aligning with its 'bb+' score. Asset quality also
incorporates the bank's investment portfolio's exposure to
sovereign debt, as well as the high debtor concentration due its
business model with higher share in corporate lending.
Steady Profitability: The bank's performance remained relatively
stable in 2024, with an operating income to risk-weighted assets
(RWA) ratio of 2.1% (2020-2023 average: 2.3%). This was supported
by loan growth, a higher retail sector share, effective net
interest margin management, and controlled operating expenses.
These factors offset the significant increase in loan impairment
resulting from consumer loan deterioration and new credit risk
regulation.
Fitch estimates profitability will remain consistent in the rating
horizon, boosted by the bank's strategies and as operational
efficiencies materialize.
Tight Capitalization Metrics: In 2024, the Fitch Core Capital (FCC)
to RWA ratio remained stable at 10.4% (2023: 10.4%), consistent
with its 'bb-' score. This was supported by internal capital
generation, a similar growth rate of the RWA and FCC, despite the
dividend payments. Fitch estimates the ratio will remain at similar
levels. Fitch's capitalization assessment incorporates Industrial's
access to capital, due to its track record of issuing AT1 and T2
instruments in global markets, offering an additional loss
absorption cushion.
Sound Funding Profile: Industrial's financing structure, with a
broad deposit base and diverse financing alternatives, benefits
from its recognized deposit franchise and leadership in Guatemala.
Synergies from being part of a regional group further enhance this
structure. Its solid position is reflected in its relationships
with various financial institutions and extensive access to
resources from local and international markets. This access
strengthens its liquidity and provides flexibility to face adverse
conditions. In 2024, the loan-to-deposit ratio was 87.5%, above to
the banking system and its closest peers.
Rating Sensitivities
Factors that Could, Individually or Collectively, Lead to Negative
Rating Action/Downgrade
- The bank's IDRs and VR would mirror any negative action on
Guatemala's sovereign ratings and Country Ceiling or a downward
revision of Fitch's assessment of the OE;
- Industrial's IDRs and VR could be downgraded due to sustained
deterioration in its loan quality, as well as a deteriorating
financial performance, resulting in a decline in the bank's
operating profit to RWA metric to a level consistently below 2.0%
and its FCC to RWA ratio to a level consistently below 10.0%.
Factors that Could, Individually or Collectively, Lead to Positive
Rating Action/Upgrade
- Industrial's IDRs and VR would mirror any positive action in the
Guatemala's sovereign rating, while maintaining a consistent
financial profile.
OTHER DEBT AND ISSUER RATINGS: KEY RATING DRIVERS
Subordinated Debt:
Industrial's debt instruments are subordinated notes (ISbN) and
subordinated Tier 1 capital (IST-1). The 'B+' ISbN notes are rated
two notches below Industrial's VR due to loss severity as Fitch
expects weak recoveries for these in a liquidation scenario given
their subordinated status. They rank junior to all the bank's
present and future senior indebtedness, pari passu with all other
unsecured subordinated debt, and senior to Industrial's capital and
Tier 1 hybrid securities.
The 'B-' IST-1 notes are rated four notches below Industrial's VR,
reflecting two notches for loss severity due to deep subordination,
and two notches for nonperformance risk, given their discretionary
coupon omission feature.
Government Support Rating
Systemic Importance: Industrial's 'bb-' GSR reflects its high
systemic importance, with a relevant market share in customer
deposits as of YE 2024. Due to its market share, Fitch considers
the authorities' propensity to support as high to avoid contagion
risks. However, Fitch also considers the uncertainty of the
Guatemalan sovereign to provide support due to the lack of recent
history of government support for systemically important banks.
OTHER DEBT AND ISSUER RATINGS: RATING SENSITIVITIES
Subordinated Debt
Factors that Could, Individually or Collectively, Lead to Negative
Rating Action/Downgrade
- The ratings of the ISbN and IST-1 notes would be downgraded if
Industrial's VR is downgraded.
Factors that Could, Individually or Collectively, Lead to Positive
Rating Action/Upgrade
- The ratings of the ISbN and IST-1 notes would be upgraded if
Industrial's VR is upgraded.
Government Support Rating
Factors that Could, Individually or Collectively, Lead to Negative
Rating Action/Downgrade
- Industrial 's GSR is sensitive to a downgrade of the sovereign
rating, as well as its propensity to provide support.
Factors that Could, Individually or Collectively, Lead to Positive
Rating Action/Upgrade
- Industrial's GSR would mirror any positive action in the
Guatemala's sovereign rating.
VR ADJUSTMENTS
Fitch assigned an OE score of 'bb-', which is above the 'b'
category implied score, due to the following adjustment reason:
Sovereign Rating (positive).
Summary of Financial Adjustments
Prepaid expenses and other deferred assets were reclassified as
intangible assets and deducted from total equity as Fitch considers
these to have low capacity to absorb losses.
Public Ratings with Credit Linkage to other ratings
Industrial's GSR is linked to the sovereign Foreign Currency IDR of
Guatemala.
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 Industrial,
S.A. LT IDR BB Affirmed BB
ST IDR B Affirmed B
LC LT IDR BB Affirmed BB
LC ST IDR B Affirmed B
Viability bb Affirmed bb
Government Support bb- Affirmed bb-
Subordinated LT B- Affirmed B-
subordinated LT B+ Affirmed B+
===========
M E X I C O
===========
LEISURE INVESTMENTS: Seeks Chapter 11 Bankruptcy in Delaware
------------------------------------------------------------
Jonathan Randles of Bloomberg News reports that the Dolphin
Company, Latin America's largest aquatic theme park operator, has
filed for bankruptcy in the U.S. to restructure its debt and
address financial difficulties.
The Cancun, Mexico-based company, which owns Dolphin Discovery
habitats and the Selva Magica theme park in Guadalajara, sought
court protection in Delaware March 31, 2025, reporting
assets and liabilities exceeding $100 million.
Operating in eight countries, including Mexico, Argentina, Italy,
and the U.S., The Dolphin Company manages multiple dolphin habitats
and theme parks, including the Miami Seaquarium and Marineland in
St. Augustine, the report states.
About Leisure Investments Holdings LLC
Leisure Investments Holdings LLC and affiliates are operating
under the name "The Dolphin Company," manage over 30 attractions,
including dolphin habitats, marinas, water parks, and adventure
parks, located in eight countries across three continents. Their
primary operations are based in Mexico, the United States, and the
Caribbean, with locations in Jamaica, the Cayman Islands, the
Dominican Republic, and St. Kitts. These attractions are home to
approximately 2,400 animals from more than 80 species of marine
life, including a variety of marine mammals such as dolphins, sea
lions, manatees, and seals, as well as birds and reptiles. As of
2023, the marine mammal population at the Debtors' parks includes
roughly 295 dolphins, 51 sea lions, 18 manatees, and 18 seals.
Leisure Investments Holdings LLC sought relief under Chapter 11 of
the U.S. Bankruptcy Code (Bankr. D. Del. Lead Case 25-10606) on
March 31, 2025. In its petition, the Debtor reports estimated
assets and liabilities between $100 million and $500 million each.
Honorable Bankruptcy Judge Laurie Selber Silverstein handles the
case.
The Debtors tapped Robert S. Brady, Esq., Sean T. Greecher, Esq.,
Allison S. Mielke, Esq., and Jared W. Kochenash, Esq. as counsels.
The Debtors' restructuring advisor is RIVERON MANAGEMENT SERVICES,
LLC. The Debtors' Claims & Noticing Agent is KURTZMAN CARSON
CONSULTANTS, LLC d/b/a VERITA GLOBAL.
===============
X X X X X X X X
===============
LATIN AMERICA: Trump Delays on Most Tariffs for 90 Days
-------------------------------------------------------
Trinidad Express reports that facing a global market meltdown,
United States President Donald Trump abruptly backed down on his
tariffs on many nations for 90 days, but raised the tax rate on
Chinese imports to 125%.
It was seemingly an attempt to narrow what had been an
unprecedented trade war between the US and most of the world to a
showdown between the US and China, according to Trinidad Express.
The S&P 500 stock index jumped more than 7% after the announcement,
but the drama over Trump's tariffs will now be prolonged as the
administration engages in negotiations that could cause
uncertainties to persist in the world economy, the report notes.
Trump posted on Truth Social that because "more than 75 Countries"
had reached out to the US government for trade talks and have not
retaliated in meaningful way "I have authorised a 90 day PAUSE, and
a substantially lowered Reciprocal Tariff during this period, of
10%, also effective immediately," he said, the report relays.
Trump later told reporters that he pulled back on many global
tariffs -- but not on China -- because people were "yippy," and
"afraid," adding that while he expected to reach deals that
"nothing's over yet," the report notes.
The pause was announced after the global economy appeared to be in
open rebellion against Trump's tariffs as they took effect, a
signal that the US president was not immune from market pressures,
the report discloses.
The 10% tariff was the baseline rate for most nations that went
into effect, including Trinidad and Tobago, the report says.
It's meaningfully lower than the 20% tariff that Trump had set for
goods from the European Union, 24% on imports from Japan and 25% on
products from South Korea, the report notes. Still, 10% would
represent an increase in the tariffs previously charged by the US
government, the report relays.
Treasury Secretary Scott Bessent said that the negotiations with
individual countries would be "bespoke," meaning that the next 90
days would involve talks on a flurry of potential deals, the report
discloses.
Before Trump's reversal, economic forecasters say his second term
has had a series of negative and cascading impacts that could put
the country into a downturn, the report relays.
"Simultaneous shocks to consumer sentiment, corporate confidence,
trade, financial markets as well as to prices, new orders and the
labour market will tip the economy into recession in the current
quarter," said Joe Brusuelas, chief economist at the consultancy
RSM, the report notes.
Bessent has previously said it could take months to strike deals
with countries on tariff rates, the report notes. But in a
appearance on "Mornings with Maria," Bessent said the economy would
"be back to firing on all cylinders" at a point in the "not too
distant future," the report notes.
He said there has been an "overwhelming" response by "the countries
who want to come and sit at the table rather than escalate."
Bessent mentioned Japan, South Korea, and India. "I will note that
they are all around China. We have Vietnam coming today," he said,
the report relays.
What's not yet known is what Trump does with the rest of his tariff
agenda. In a speech, he said taxes on imported drugs would happen
soon, the report adds.
*********
S U B S C R I P T I O N I N F O R M A T I O N
Troubled Company Reporter-Latin America is a daily newsletter
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Fernandez, Julie Anne L. Toledo, Ivy B. Magdadaro, and Peter A.
Chapman, Editors.
Copyright 2025. All rights reserved. ISSN 1529-2746.
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* * * End of Transmission * * *