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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, September 22, 2025, Vol. 26, No. 189
Headlines
A R G E N T I N A
BUENOS AIRES: Fitch Affirms B- LongTerm Currency IDRs
PROVINCE OF LA RIOJA: Fitch Affirms 'RD' LongTerm Currency IDRs
PROVINCE OF SANTA FE: Fitch Affirms B- LongTerm Currency IDRs
B E R M U D A
UNITED ENERGY: Fitch Assigns 'BB-' LongTerm IDR, Outlook Stable
B R A Z I L
AMBIPAR PARTICIPACOES: Fitch Alters Outlook on BB- IDRs to Negative
BRF SA: Fitch Alters Outlook on 'BB+' LongTerm IDRs to Stable
NEOENERGIA SA: S&P Affirms 'BB' ICR, Outlook Remains Stable
NEW FORTRESS: Advisers Gear Up for Confidential Debt Talks
D O M I N I C A N R E P U B L I C
DOMINICAN REPUBLIC: To Expand Efforts to Recover Assets Abroad
E L S A L V A D O R
DAVIVIENDA SALVADORENO: Fitch Affirms 'B+' Long-Term IDR
J A M A I C A
JAMAICA: Consumer Prices Rose 0.3% in August
JAMAICA: JMEA Urges Commercial Banks to Cut Lending Rates
JAMAICA: JMEA Urges Gov't to be Humble & Accountable in 3rd Term
JAMAICA: JSE Concerned About Late Reporting by Listed Companies
M E X I C O
ELECTRICIDAD FIRME: Fitch Affirms & Then Withdraws BB LongTerm IDR
P A N A M A
NG PACKAGING: Fitch Alters Outlook on BB+ Long-Term IDR to Negative
TELECOMUNICACIONES DIGITALES: Fitch Affirms 'BB+' LongTerm IDRs
P U E R T O R I C O
ALUMAX INC: Plan Exclusivity Period Extended to October 2
T R I N I D A D A N D T O B A G O
CITGO PETROLEUM: Parent Auction Sale Hearing Kicks Off
TRINIDAD & TOBAGO: Small Decrease in Inflation, CSO Says
V E N E Z U E L A
CITGO PETROLEUM: Bondholders, Creditors Clash Amid Auction Decision
X X X X X X X X
TRINIDAD & TOBAGO: Central Bank Says Finc'l. System Stable in 2024
- - - - -
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A R G E N T I N A
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BUENOS AIRES: Fitch Affirms B- LongTerm Currency IDRs
-----------------------------------------------------
Fitch Ratings has affirmed the City of Buenos Aires' (CBA)
Long-Term Foreign and Local Currency Issuer Default Ratings (IDRs)
at 'B-' with a Stable Rating Outlook and Short-Term IDRs at 'B'.
Fitch also affirmed the city's euro medium-term note program (EMTN)
and series 12 7.50% senior unsecured notes at 'B-'.
Fitch revised CBA's Standalone Credit Profile (SCP) to 'bb-' from
'b+' based on the strengthening of its financial profile to 'aaa'.
The IDR is capped by Argentina's 'B-' Country Ceiling.
CBA continues to meet Fitch's criteria requirements for a rating of
'B-', which is above Argentina's 'CCC+' sovereign rating, due to
its strong budget, lack of need for external debt refinancing, and
sufficient liquidity.
KEY RATING DRIVERS
Standalone Credit Profile
Fitch now assesses CBA's SCP at 'bb-', based on its 'Vulnerable'
risk profile and 'aaa' financial profile under Fitch's rating case
scenario. The SCP is at the low end of the category, which reflects
peer comparisons.
Risk Profile:
'Vulnerable'
The 'Vulnerable' assessment weighs the sovereign IDR below the 'B'
category rather than Argentina's implied operating environment of
'bb'. The risk profile reflects the combination of six 'Weaker' key
risk factors, as outlined below.
Revenue Robustness:
'Midrange'
This key risk factor is 'Midrange' due to the resiliency of CBA's
revenue structure and high fiscal autonomy in the context of
volatile national economic performance. CBA has a strong GDP per
capita (2024: USD42,413) within the national context (USD13,597)
and relative to international peers. Amid a complex national and
imbalanced fiscal framework for local and regional governments
(LRGs), compared with Argentine LRGs, CBA has a high revenue
autonomy underpinned by the importance of the service sector in its
economic structure, and therefore a low reliance on federal
transfers.
The share of federal revenues that stem from a 'CCC+' sovereign
counterparty decreased from 23.8% of total revenues in 2020 to 11%
in 2023 derived from Federal Law no. 27606 that returned CBA's
federal co-participation coefficient to 1.4% (from 3.5%), and in
YE2024 the share increased towards 15.8% due to the Supreme Court
ruling that mandates an increase in shared funds. The measure
affects federal revenue predictability and risk, reflecting a
negative precedent in the tax distribution framework between the
nation and provinces, as jurisdictions are exposed to increasingly
uncertain and discretionary decisions at the executive level.
Overall, during 2024, revenue sharing contracted sharply (-12.9%
real) due to the considerable regulatory changes and economic
contraction as well as historically high inflation levels. Still,
current transfers (non-automatic component of federal revenues)
grew 210% in real terms and as of June 2025 also had significant
real term growth. Since August 2024 the national government has
complied with a Supreme Court ruling that mandates an increase in
shared funds. Fitch will continue to monitor compliance with this
ruling. However, overall CBA maintains a high level of local
revenues, reflecting its resilient revenue structure and
expenditure flexibility.
Revenue Adjustability:
'Weaker'
CBA's local revenue adjustability is low for Argentine LRGs.
Additionally, the country's large and distortive tax burden,
combined with a weak macroeconomy, and high inflation levels
affects affordability. National GDP fell by 1.8% in 2023 and 1.3%
in 2024; for 2025, better macroeconomic prospects signal an
estimated growth of 5%.
During 2024, operating revenues fell about 16% in real terms,
mainly due to high inflation. Given CBA's historically prudent
budgetary performance, operating expenses followed this dynamic and
decreased around 9% in real terms. In 2024, tax revenues
represented 72.6% of CBA's total revenues, reflecting the city's
economic importance, and averaged 75.6% during 2020-2024. Fitch
expects this share to decline in 2025 due to changes in the
revenue-sharing coefficient (currently implemented through
discretionary transfers) and the restitution of income tax starting
in August 2024.
From July 2024, the elimination of gross income revenue from
BCRA-remunerated liabilities weighed on revenue. However, by June
2025, higher federal current transfers drove real growth in
operating revenue, amid moderating inflation versus 2024.
Expenditure Sustainability:
'Weaker'
Argentine LRGs have high expenditure responsibilities, in a context
of structurally high inflation. The country's fiscal regime is
structurally imbalanced in terms of decentralization of revenue and
expenditure.
Local economic strength, revenue growth above inflation and
expenditure dynamics supported CBA's budgetary performance from
2021 to 2023. Although the city's operating balance was 13.8% in
2024 (2023: 19.9%), mainly due to inflation dynamics, it remained
at elevated levels.
Fitch estimates that the average operating margin will be 14.7%
from 2025 to 2027, compared to an average of 16.8% in the
2020-2024. As of June 2025, operating revenues increased by 20.5%
in real terms year-over-year, while operating expenses grew at a
slightly lower pace at 19.7% in real terms. As monthly inflation
has moderated relative to 2024, salary negotiations are also
occurring less often; thus easing opex adjustment pressures. Still,
CBA has a prudent track record regarding real term opex
adjustments.
Expenditure Adjustability:
'Weaker'
For Argentine subnationals, infrastructure needs and expenditure
responsibilities are high, while flexibility to cut expenses is
low. From 2020 to 2024, CBA's capital expenditure averaged 14.6% of
total expenditure. In 2023, capital expenditure recovered to 17.4%
of total expenditure and remained high in 2024 at 16.2%. CBA has
sustained capex levels above those in the pandemic, unlike other
LRGs that have significantly reduced capex levels amidst decreased
national capital resources. CBA's access to multilateral funding
has also helped support relevant capex works.
In 2024 operating expenditure represented 82.3% of total
expenditure, and staff expenses remained controlled at 43.8%, close
in line with the historical average of 43.9% from 2020 to 2024.
Liabilities and Liquidity Robustness:
'Weaker'
CBA's exposure to unhedged foreign currency debt is a significant
weakness, along with the inadequate national framework for debt and
liquidity and underdeveloped local market. The assessment also
considers the 'CCC+' sovereign rating, with Argentina having
restructured its debt in 2020, which significantly limited external
market access for LRGs. From 2020 to 2021, CBA did not engage in
debt restructuring processes, unlike other Argentine LRGs.
CBA's debt consists mostly of issuances and multilateral loans in
USD, which accounted for 97% of total stock in 2024. At year-end
(YE) 2024, direct debt totaled ARS1,621.8 billion, reflecting an
increase of around 21% compared to 2023 due to currency
depreciation. As of June 2025, direct debt stock decreased to
ARS1,471 billion, following the first capital amortization of its
Series 12 notes due on June 1, 2025, for USD296.6 million. The
notes current outstanding are now of USD593.4 million. The city has
laws that allow for up to USD1.185 billion in new debt, potentially
for liability management operations if market windows arise. Fitch
will monitor all debt operations carried out by the city.
As of June 2025, the city maintained a strong liquidity position,
coupled with positive operating balance generation and financial
equilibrium, which clears up uncertainty regarding the entity's
payment capacity over the next 24 months.
Liabilities and Liquidity Flexibility:
'Weaker'
Argentine LRGs primarily depend on their own unrestricted cash for
liquidity. At YE 2024, CBA's unrestricted cash totaled around
ARS1,821 billion, and as of June 2025 around ARS1,655 billion.
CBA's liquidity coverage ratio averaged 4.3x during from 2020 to
2024 and strengthened significantly in 2023 and 2024 at 5.6x and
10x, respectively. Fitch projects it will remain at strong levels,
with an average of 7.7x for the 2025 to 2027 period.
To cover seasonal cash imbalances, if needed, the city can issue
short-term treasury bills; to date CBA has no outstanding short
term treasury bills. Payables remain under control with and
equivalent of around 12.2% of operating revenues in YE2024 (42.5
days of primary expenditure).
Financial Profile: 'aaa category'
CBA's financial profile assessment has strengthened to 'aaa' from
'aa' in its previous review. The 'aaa' score reflects the city's
negative net adjusted debt in 2024 and projected in Fitch's rating
case for 2025-2027; therefore, no override is applied from
secondary metric results. Anyway, the actual debt service coverage
ratio (ADSCR) is expected above 4x in 2025 and 2026, and of 3.7x in
2027, averaging 3.9x in 2025-2027 scenario.
CBA's primary balance has been positive in the past four years, and
in 2024 the city had negative net adjusted debt as well as strong
debt service coverage and liquidity levels. The city's 'aaa'
financial profile is reflecting the city's continued prudent
budgetary and debt management policies, continued local economic
strength, and a manageable debt maturity profile matched with solid
liquidity levels throughout 2025-2027 in a context of inflation
moderating to lower levels than those observed in 2023-2024 but
still with economic volatility.
Fitch classifies CBA as a type B LRG as it covers annual debt
service from cash flow and refers to a payback ratio as a primary
metric.
Additional Risk Factors Considerations
Fitch does not apply any asymmetric risk or extraordinary support
from upper-tier government. According to Fitch's criteria, CBA's
ratings are capped by Argentina's Country Ceiling of 'B-'.
Short-Term Ratings
CBA's Long-Term Foreign and Local Currency IDRs of 'B-' correspond
to Short-Term IDRs of 'B', according to Fitch's Rating
Correspondence Table.
Debt Ratings
Fitch has affirmed CBA's USD890 million 7.5% Series 12 senior
unsecured notes at 'B-', which is in line with its IDR.
Peer Analysis
CBA has a 'Vulnerable' risk profile, like all of its Argentine
peers. The city has a higher SCP (bb-) than the Provinces of Santa
Fe and Cordoba, for example due to its 'aaa' financial profile.
Lagos State, Nigeria, an international peer for CBA, has a
'Vulnerable' risk profile and a lower financial profile at 'aa'
with a lower SCP of 'b+'. Tashkent City, Uzbekistan is more
comparable to CBA with a 'bb-' SCP, but it has a 'Weaker' risk
profile and 'aa' financial profile. The State of Sao Paulo has an
SCP of 'bb-' due to its weaker financial profile of 'a' but a
better risk profile at 'Low Midrange'. Another peer, Istanbul,
Turkiye, also has a 'aaa' financial profile like CBA, but it has a
better risk profile of 'Weaker' and therefore has an SCP of
'bbb-'.
Issuer Profile
The City of Buenos Aires is Argentina's federal capital city and
the country's most important social and economic center.
Key Assumptions
Qualitative assumptions:
Risk Profile: 'Vulnerable'
Revenue Robustness: 'Midrange'
Revenue Adjustability: 'Weaker'
Expenditure Sustainability: 'Weaker'
Expenditure Adjustability: 'Weaker'
Liabilities and Liquidity Robustness: 'Weaker'
Liabilities and Liquidity Flexibility: 'Weaker'
Risk Profile:
Revenue Robustness:
Revenue Adjustability:
Expenditure Sustainability:
Expenditure Adjustability:
Liabilities and Liquidity Robustness:
Liabilities and Liquidity Flexibility:
Financial Profile: 'aaa'
Asymmetric Risk: 'N/A'
Support (Budget Loans): 'N/A'
Support (Ad Hoc): 'N/A'
Rating Cap (LT IDR): 'B-'
Rating Cap (LT LC IDR) 'B-'
Rating Floor: 'N/A'
Quantitative assumptions - Issuer Specific
Fitch's rating case is a "through-the-cycle" scenario, which
incorporates a combination of revenue, cost and financial risk
stresses. It is based on 2020-2024 figures and 2025-2027 projected
ratios. The key assumptions for the scenario include:
- Operating revenue average growth of 28.9% for 2025-2027; assuming
growth in line with average inflation towards the medium term.
- Operating expenditure average growth of 29.5% for 2025-2027;
assuming growth above average inflation towards the medium term.
- Average capital expenditure/ total expenditure levels of around
14.5% for 2025-2027; similar to the 2020-2024historical average of
14.6%.
- Debt projections consider an average exchange rate of ARS1,191
per U.S. dollar for 2025 (year-end 1,350), ARS1,458for 2026
(year-end 1,566), and ARS1,668 for 2027 (year-end ARS1,770);
- Consumer price inflation (annual average % change) of 43.8% for
2025, 22.5% for 2026, 16.5% for 2027.
Rating Sensitivities
Factors that Could, Individually or Collectively, Lead to Negative
Rating Action/Downgrade
A downgrade of Argentina's Country Ceiling would negatively affect
CBA's ratings as well as any introduction of regulatory impediments
for the Argentine provinces to access foreign exchange. The IDR
could be downgraded if the ADSCR drops below 1.0x in tandem with a
liquidity coverage ratio below 1.0x underpinned by lower operating
margins and unrestricted cash; regardless of whether the payback
ratio remains below 5x. Thus, CBA will not meet all the conditions
to be rated above the sovereign.
Factors that Could, Individually or Collectively, Lead to Positive
Rating Action/Upgrade
An upgrade on Argentina's Country Ceiling above 'B-' could
positively benefit CBA's ratings provided that their payback ratio
remains below 5xand ADSCR at a level above 2.0x
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.
Public Ratings with Credit Linkage to other ratings
CBA's ratings are capped by Argentina's Country Ceiling and are
above the sovereign's ratings.
Entity/Debt Rating Prior
----------- ------ -----
Buenos Aires, City of LT IDR B- Affirmed B-
ST IDR B Affirmed B
LC LT IDR B- Affirmed B-
LC ST IDR B Affirmed B
senior unsecured LT B- Affirmed B-
PROVINCE OF LA RIOJA: Fitch Affirms 'RD' LongTerm Currency IDRs
---------------------------------------------------------------
Fitch Ratings has affirmed the Argentinian Province of La Rioja's
Long-Term Foreign and Local Currency Issuer Default Ratings (IDRs)
at 'RD'. Fitch has also affirmed La Rioja's USD318.4 million senior
unsecured step-up notes due 2028 at 'D'. La Rioja's Standalone
Credit Profile (SCP) is assessed at 'rd'. Fitch has relied on its
rating definitions to position the province's ratings and SCP.
The affirmation of La Rioja's ratings reflects the province's
ongoing payment defaults on its senior unsecured notes due 2028,
beginning on February 24, 2024. As of September 2025, the province
remains in default, which constitutes an event of default under the
transaction documents and as recognized by Fitch. Since Feb. 24,
2024, the Province of La Rioja has accumulated unpaid principal
totaling USD204.98 million, in addition to accrued and unpaid
interest.
KEY RATING DRIVERS
Province of La Rioja's SCP is assessed at 'rd'. La Rioja's has a
'vulnerable' risk profile and a 'a' Financial Profile score, which
is less relevant given the 'rd'. Fitch has relied on its rating
definitions and has incorporated the province's restrictive-default
event to position the province's ratings and its SCP.
Risk Profile:
Vulnerable
The 'Vulnerable' assessment, for all Argentine local and regional
governments (LRGs) reflects the sovereign IDR being below the 'B'
category, rather than Argentina's implied operating environment of
'bb'. Fitch views the risk profile as indicating a very high risk
of the issuer's ability to cover debt service. This risk could be
due to lower revenue, higher expenditure, or an unexpected rise in
liabilities or debt-service requirements, weakening the operating
balance unexpectedly over the scenario horizon.
Revenue Robustness:
Weaker
The assessment reflects the evolving national fiscal framework, the
province's reliance on a 'CCC+' rated sovereign counterparty for an
average of 90.1% of its total revenue over the past three years,
and an adverse macroeconomic environment. According to law, federal
co-participation transfers to provinces have never been interrupted
to date.
La Rioja has historically been highly dependent on national
budgetary transfers. Although these funds are considered
extra-budgetary national resources, they remain highly
discretionary. The co-participation regime accounted for an average
of 79% of the province's operating revenue over the past three
years and is also significantly reliant on national budgetary
transfers, which represented an average of 17% of operating revenue
through 2023. Since December 2023, these transfers have been
interrupted and have not been reinstated, resulting in a
significant contraction of the province's current resources.
Revenue Adjustability:
Weaker
Fitch considers the local revenue adjustability of Argentine
subnational entities to be low. The country's high and distortive
tax burden, combined with a weak macroeconomic environment,
negatively impacts affordability. La Rioja's ability to generate
additional revenue during periods of economic downturn is further
constrained by its high dependence on transfers and a limited tax
base. In its rating case, Fitch expects operating revenue to grow
in line with the average inflation rate in 2025. Local tax
collection represents a three-year average of 9.8% of operating
revenue, which reduces the province's revenue flexibility.
Expenditure Sustainability:
Weaker
Argentine subnational entities face significant expenditure
responsibilities in a context of structurally high inflation. The
country's fiscal regime is structurally imbalanced with respect to
revenue and expenditure decentralization. Since 2021, real salary
increases have led to a reduction in operating balances, which have
tended to converge toward historic levels. In 2024, the operating
balance was 9.7% of operating revenue, compared to 13.2% in 2023.
Amid an economic recession (GDP -1.3% in 2024), real operating
revenue contracted by 24.8%, which was greater than the 21.7%
reduction in real operating expenditure, resulting in a decrease in
the operating margin in 2024.
Expenditure Adjustability:
Weaker
Argentine subnational governments face high infrastructure needs
and expenditure responsibilities, with limited flexibility to
reduce spending amid an adverse macroeconomic environment. National
capital expenditure remains low and is insufficient to transfer
capex burdens to LRGs. In 2024, capex accounted for 7.7% of total
expenditure, well below the five-year average of 17.1%.
Liabilities and Liquidity Robustness:
Weaker
Unhedged foreign currency debt exposure, a weak national framework
for debt and liquidity, and an underdeveloped local market are key
weaknesses considered by Fitch in its assessment of the robustness
of the province's liabilities and liquidity. The assessment also
reflects the sovereign's 'CCC+' rating, which underwent a debt
restructuring in 2020, restricting subnationals' access to external
markets.
As of year-end 2024, the province's direct debt increased by
approximately 29.2% year-on-year, driven by inflation and currency
depreciation, totaling ARS427.54 billion. Approximately 96% of La
Rioja's direct debt is denominated in foreign currency and remains
unhedged, mainly in U.S. dollars, which poses a rating risk in the
current environment of high inflation and currency depreciation.
The senior unsecured notes were originally issued to finance the
construction of the Arauco Wind Farm, with the expectation that the
province would generate revenues through a mirror loan with the
parks, which would ultimately be used to repay the bonds, although
these revenues were not formally secured. The wind farm is not yet
fully operational, requires further investment, and currently
generates a low level of revenue.
In 2020, La Rioja implemented a distressed debt exchange (DDE) and
restructured its U.S. dollar senior unsecured notes. The DDE
process, concluded in September 2021, was protracted and involved a
default event that took one year to resolve. The downgrade of La
Rioja's ratings to 'RD' in March 2024 followed the province's
non-payment on its senior unsecured notes due 2028, specifically
the semi-annual principal payment of USD15.9 million due on Feb.
24, 2024.
The province's failure to cure the missed principal payment after
the three-day cure period is considered an event of default under
the transaction documents and by Fitch. As of September 2025, the
province remains in default, which constitutes an event of default
under the transaction documents and as recognized by Fitch. Since
Feb. 24, 2024, the Province of La Rioja has accumulated unpaid
principal totaling USD204.98 million, in addition to accrued and
unpaid interest.
Since April 2024, some noteholders have initiated legal proceedings
in the Southern District of New York. Fitch will continue to
monitor the situation.
Liabilities and Liquidity Flexibility:
Weaker
Fitch views the current Argentine national framework for liquidity
support and funding available to subnational entities as 'Weak', as
there are no formal emergency liquidity support or bail-out
mechanisms in place. The sovereign counterparty rating is low, at
'CCC+'. In terms of liquidity, Argentine subnationals rely
primarily on their own unrestricted cash. In 2024, La Rioja's
unrestricted cash totaled approximately ARS126.58 billion (USD122.7
million).
Financial Profile:
Fitch classifies La Rioja as a Type B LRG and views the payback
ratio as a primary metric. Since La Rioja is not able to comply
with its financial obligation, the calculation of the Financial
Profile becomes less relevant. Fitch's projected rating case for
2025-2026 weighs the sovereign's 'CCC+' rating and barriers to
accessing the external market amid a volatile macroeconomic and
regulatory context.
Financial Profile metrics are analyzed to evaluate La Rioja's debt
repayment capacity and liquidity position in the next 12 months.
The score reflects a 'aa' primary payback ratio of 6.5x for 2026
under Fitch's rating case. Also, Financial Profile reflects an
override from the 'b' ADSCR of 0.6x in 2026. The overall Financial
Profile score at 'a' is underpinned by the medium-term maturity of
debt in tandem with high refinancing risks stemming from a 'CCC+'
macroeconomic environment, where transfer and convertibility risks
prevail.
ESG - Creditor Rights: The failure to cure the missed principal
payment on its USD318.4 million senior unsecured step-up notes is
considered an event of default as per the transaction documents and
by Fitch. The missed principal payment of its USD318.4 million
senior unsecured step-up notes underpins the elevated score on
creditor rights on the back of a significant depreciation of the
real exchange rate and lower operating margins amid a negative
economic environment. This credit event is highly relevant to the
current rating and is a key rating driver on an individual basis.
Debt Ratings
La Rioja's senior secured step-up notes of USD318.43 million due in
2028 are positioned at D'.
Peer Analysis
Since the rating is derived from Fitch's definitions, a peer
comparison is not necessary.
Issuer Profile
La Rioja is located in the northeast region of Argentina and has a
GDP of around USD2 billion, or less than 1% of national GDP. Due to
its relatively small size, public sector employees represent almost
one third of the local economy. The province reports below average
income of around USD4,837 per capita. The population is growing in
line with the national average with limited pressure on
infrastructure.
Qualitative assumptions:
Risk Profile: 'Vulnerable'
Revenue Robustness: 'Weaker'
Revenue Adjustability: 'Weaker'
Expenditure Sustainability: 'Weaker'
Expenditure Adjustability: 'Weaker'
Liabilities and Liquidity Robustness: 'Weaker'
Liabilities and Liquidity Flexibility: 'Weaker'
Financial Profile: 'a'
Support (Budget Loans): 'N/A'
Support (Ad Hoc): 'N/A'
Asymmetric Risk: 'N/A'
Sovereign Cap: 'N/A'
Sovereign Floor: 'N/A'
Risk Profile:
Revenue Robustness:
Revenue Adjustability:
Expenditure Sustainability:
Expenditure Adjustability:
Liabilities and Liquidity Robustness:
Liabilities and Liquidity Flexibility:
Financial Profile:
Asymmetric Risk:
Support (Budget Loans):
Support (Ad Hoc):
Rating Cap (LT IDR):
Rating Cap (LT LC IDR)
Rating Floor:
Quantitative assumptions - Issuer Specific
Quantitative assumptions - Issuer Specific:
Fitch's rating action is driven by the following assumptions for
reference metrics under its 2025-2027 rating case scenario. These
include their respective changes since the last review and weights
in the rating decision:
- payback ratio: 6.5x in 2026
- actual debt service coverage ratio: 0.6x in 2026
- fiscal debt burden: 33.6% in 2026Fitch's through-the-cycle rating
case incorporates a combination of revenue, cost and financial risk
stresses. It is based on [2020-2024] published figures and its
expectations for 2025-2027:
- Operating revenue average growth of 27.11% for 2024-2027;
assuming growth in line with average inflation towards the medium
term.
- Operating expenditure average growth of 29.2% for 2024-2026;
assuming growth above average inflation towards the medium term.
- Average capital expenditure/ total expenditure levels of around
7.5%; below the 17.1% average of the last 5 years, due to a lack of
funding and financing.
- Cost of debt considers non-cash debt movements due to currency
depreciation with an average exchange rate of ARS1,191 per U.S.
dollar for 2025 (year end 1,350), ARS1,458 for 2026 (year end
1,566), and ARS1,668 for 2027 (year end 1,770);
- Consumer price inflation (annual average % change) of 43.8% for
2025, 22.6% for 2026, 16.5% for 2027.
Rating Sensitivities
Factors that Could, Individually or Collectively, Lead to Negative
Rating Action/Downgrade
La Rioja is rated 'RD'; therefore, there can be no further negative
rating action on its ratings
Factors that Could, Individually or Collectively, Lead to Positive
Rating Action/Upgrade
La Rioja's IDRs and SCP would be reassessed upon the completion of
a debt restructuring process to reflect its new credit profile.
ESG Considerations
La Rioja has an ESG Relevance Score of '5' for Creditor Rights due
to the province's the province's failure to cure the missed
principal payment on its USD318.4 million senior unsecured step-up
notes. This credit event drives the elevated score on creditor
rights. This credit event is highly relevant to the current rating
and is a key rating driver on an individual basis.
The province has an ESG relevance score of '4' for Rule of Law,
Institutional & Regulatory Quality, Control of Corruption as it
presents weak management practices and regulations toward its
financial obligations, which has a negative impact on the credit
profile, and is relevant to the ratings 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
----------- ------ -----
La Rioja, Province of LT IDR RD Affirmed RD
LC LT IDR RD Affirmed RD
senior unsecured LT D Affirmed D
PROVINCE OF SANTA FE: Fitch Affirms B- LongTerm Currency IDRs
-------------------------------------------------------------
Fitch Ratings has affirmed the Province of Santa Fe, Argentina's
Long-Term Foreign and Local Currency Issuer Default Ratings (IDRs)
at 'B-'. The Rating Outlook is Stable. Fitch has also affirmed
Santa Fe's 6.9% senior unsecured notes for USD250 million due 2027
at 'B-'. The IDR is capped by Argentina's 'B-' Country Ceiling.
Santa Fe's Standalone Credit Profile (SCP) was revised to 'b' from
'b-' due to its strengthened financial profile. Debt service
coverage improved significantly on stable operating margins during
2020-2024 and stronger liquidity, resulting in negative net
adjusted debt in 2024. Santa Fe continues to meet Fitch's criteria
for 'B-' rating, which is above Argentina's sovereign, supported by
a strong budget, no external refinancing needs, and ample available
liquidity.
KEY RATING DRIVERS
Standalone Credit Profile
Santa Fe's 'b' SCP reflects a combination of a 'Vulnerable' risk
profile and 'aa' financial profile score. The SCP notch specific
derivation also considers comparisons with national and
international peers, including those in Argentina and Nigeria.
Fitch does not apply any asymmetric risk or extraordinary support
from upper-tier government. The SCP is positioned in the middle of
the 'b' category, reflecting the peer comparison.
Risk Profile: 'Vulnerable'
Santa Fe's 'Vulnerable' risk profile reflects 'Weaker' attributes
across the six key risk factors in a sovereign context rated below
the 'B' category. For Argentine LRGs, the 'Vulnerable' assessment
stems from the sovereign IDR being below the 'B' category, not the
implied operating environment of 'bb'. Fitch sees a very high risk,
relative to international peers, that Santa Fe's operating balance
may not cover debt service over the forecast horizon (2025-2027).
This could be due to lower revenue, higher expenditure, or an
unexpected rise in liabilities, debt or debt-service requirements.
Revenue Robustness: 'Weaker'
Fitch assesses Santa Fe's revenue robustness as 'Weaker',
reflecting its high dependence on federal transfers. These
transfers represent around 54% (five-year average) of operating
revenue in 2020 to 2024 under Argentina's weak and complex fiscal
framework. Federal transfers flow automatically via the
co-participation tax-sharing regime and derive from a 'CCC+' rated
sovereign counterparty, amid high inflation. By law, federal
co-participation transfers to provinces have never been
interrupted.
In 2024, local taxes and federal non-earmarked transfers
(co-participaciones) increased below the inflation rate yoy, which
resulted in a reduction of 13% in real terms in a macroeconomic
context where inter-annual inflation reached 236.8%. Operating
revenue is mostly comprised of taxes, including turnover tax
(impuesto sobre los ingresos brutos), which totaled 24.2% of
operating revenue in 2024, and stamp duty, which totaled 2% at YE
2024. As of June 2025, national transfers to Santa Fe increased 57%
yoy in nominal terms in a macroeconomic context where inter-annual
inflation was 39.4% at the end of June 2025.
Revenue Adjustability: 'Weaker'
Local revenue adjustability is low and challenged by the country's
large and distortive tax burden. The negative macroeconomic
environment further limits the province's ability to increase tax
rates and expand tax bases to boost its local operating revenues.
Structural high inflation also constantly erodes real-term revenue
growth and affects affordability.
Provinces have legal autonomy to set turnover tax rates. In 2024,
Santa Fe's tax collection was 27% of consolidated provincial
revenue, reflecting low fiscal autonomy and reliance on federal
transfers from the revenue-sharing transfers. Santa Fe's tax
revenue performance lagged peers in 2021, but was among the least
affected in 2020 by the pandemic. In 2022, tax collection increased
slightly above inflation, but decreased in 2023 by 3.3% in real
terms and 12% in 2024. In 2024, Santa Fe also approved a tax reform
that progressively raised turnover tax rates on casinos and
financial entities from 5.5% to 7% and 9%, respectively.
The province is focusing on management actions (audit, oversight)
to improve collectability indicators. The turnover tax base is
evolving in line with the underlying economy. Definitions of the
tax base and deductions were included, which broadened and
clarified the taxable base.
Expenditure Sustainability: 'Weaker'
Argentine LRGs have high expenditure responsibilities, in a context
of structurally high inflation. The country's fiscal regime is
structurally imbalanced regarding revenue-expenditure
decentralization, which is further exacerbated by high spending
responsibilities transferred to the provinces.
Regardless, Santa Fe's operating margins have remained steady,
averaging at 7.3% over the period of 2020 to 2024 due to fiscal
prudence policies and expenditure controls. In its rating case,
Fitch expects operating margin to remain around 5.4% for 2025-2027.
There have been significant salary adjustments, as the staff
expenditure rose by 4.3% and 12.3% in 2022 and 2023, respectively.
Santa Fe was one of the provinces with the highest increases in
staff costs between 2019 and 2023.
In 2024 staff expenditure decreased sharply in real terms by 17.5%
to keep stable balances. At YE 24 the operating margin bounced back
and reached 8.5% from 2% in 2023. Santa Fe is among the provinces
that did not transfer their pension scheme to the nation and is
responsible for any shortfall in pension deficit funding, which
represents an additional expenditure burden and risk for its
operating balance results. As of June 2025, Santa Fe's operating
margin was 6.8%, considering its pension burden, due to the growth
in staff cost and current transfers above the rate of inflation.
In October 2024, Santa Fe implemented certain reforms to ease its
pension burden and reduce pension deficit by increasing staff
contributions. The share of spending associated with the deficit
fell from roughly 25% of total expenditures to below 15%, with
projected further declines over the next two to three years. Even
without national transfers, the province's required contribution is
expected to be lower.
Expenditure Adjustability: 'Weaker'
Fitch views the leeway or flexibility to cut expenses for Santa Fe
as weak relative to international peers, considering that only 9.5%
of consolidated provincial total expenditures corresponded to
capital expenditure (capex) in 2024 (average of 8.6% from 2022 to
2024). Santa Fe has very high infrastructure needs, thus increasing
capex does not necessarily translate into economic growth due to
the infrastructure lag, reflecting limited flexibility to adjust
expenditures. Santa Fe has increased capex levels between 2022 and
2024, contrary to other LRGs that have significantly reduced them
amidst decreased national capital resources. In 2024, operating
expenses (opex) accounted for 89.7% of total expenditure, despite
staff expenses rising to 42.8% of total expenditure in 2024, above
the historical average of 40.8% from 2020 to 2024.
Liabilities and Liquidity Robustness: 'Weaker'
The exposure to unhedged foreign currency debt is an important
weakness, along with the inadequate national framework for debt and
liquidity and underdeveloped local market. The assessment also
considers the 'CCC+' sovereign rating, with Argentina having
restructured its debt in 2020, which significantly limited external
market access for LRGs. From 2020 to 2021, Santa Fe did not engage
in debt restructuring processes, unlike other Argentine LRGs.
However, Santa Fe has very low leverage and high liquidity
reflected in negative payback ratio and fiscal debt burden in 2024.
AT YE 2024 about 86.8% of Santa Fe's direct debt is denominated in
foreign currency, unhedged and mainly in USD. FX risk is mitigated
due to the low debt stock and the fact that half of it consists of
obligations to multilateral organizations at low rates and long
maturities Most of its debt has fixed interest rates. The province
looks at multilateral, banking and commercial sources of funding
for capex.
In 2025, the province took two loans granted by CAF (formerly the
Andean Development Corporation and now the Development Bank of
Latin America and the Caribbean). The first was for USD 75 million
to finance works related to the Odesur Games, and the second for
USD 150 million to advance the comprehensive urban and metropolitan
logistics program for Greater Rosario.
The province intends to place debt in the international market, but
it depends on market conditions and political issues. Issuance
proceeds would fund public works (gas pipelines, midstream
electricity, roads and social and security infrastructure) and
refinance its current issuance of USD250 million. Fitch will
monitor the effect of the issuance characteristics in the projected
debt metrics on a timely manner.
In November 2025, the first principal payment of this bond is for
USD83.3 million. The upcoming principal payments of the bond are
scheduled in November 2026 and November 2027. As of June 2025, the
province maintained a strong liquidity position, coupled with
positive operating balance generation and financial equilibrium,
which clears up uncertainty regarding the entity's payment capacity
over the next 24 months.
Liabilities and Liquidity Flexibility: 'Weaker'
Fitch views the Argentine national framework for liquidity support
and funding available to sub-nationals as 'Weaker', as there are no
formal emergency liquidity support mechanisms established. The
national government can support LRGs in liquidity distress on a
case-by-case basis as a friendly creditor, making available
programs and loans to provinces from federal trust funds and
co-participation advancements.
However, the current macroeconomic environment constrains the
predictability, size and timing of this support. The Argentine
government's 'CCC+' ratings drive the assessment of this support to
'Weaker', considering the counterparty risk. The province's
liquidity coverage ratio averaged at 6.1x during 2020-2024, and
Fitch projects it will remain sufficient to service debt for
2025-2027.
The province holds a portfolio position in market-tradable
securities indexed to CER, stemming from a favorable court ruling
for the province, although these instruments are subject to market
risk. The income generated by the stock of these bonds enables the
continued financing of regional public works amid federal cutbacks
and may also be applied to debt service payments where such debt is
linked to public works.
Financial Profile: 'aa category'
Financial Profile - 'aa' Category: Under Fitch's rating case
scenario (2025-2027), Santa Fe's financial profile, evaluated at
'aa', considers a 'aaa' primary payback ratio below 1x in 2025-207
and an ADSCR above 2x by end-2026, reflecting assumed new borrowing
and the 6.9% notes principal payments. The assessment also factors
in a 'aaa'-level fiscal debt burden. The override reflects a weaker
Actual Debt Service Coverage Ratio (ADSCR), projected at 3.4x in
2025 and 2.7x in 2026, which results in an improved assessment to
'aa' versus the 'a' level at the prior review.
Santa Fe's financial performance has been steady over the past four
years, with rising cash levels and a very low level of
indebtedness. Consequently, the province posted negative net
adjusted debt in 2024, alongside strong debt service coverage
metrics. Fitch expects Santa Fe's financial profile to remain
adequate, supported by positive budgetary outturns and prudent debt
management, in a context of moderating inflation relative to
2023-2024 levels, albeit with continued economic volatility.
Fitch classifies the Province of Santa Fe as type B LRGs according
to its criteria because the entities must cover debt service from
their own cash flow annually.
Additional Risk Factors Considerations
Santa Fe's IDRs are capped by Argentina's Country Ceiling of 'B-'.
Fitch's Argentine subnational evaluations do not consider any
extraordinary or liquidity support from the sovereign. Santa Fe has
strong budget and enough liquidity to avoid a default, which is
clear from the quality of its liquidity coverage ratios. Therefore,
the province continues to meet Fitch's criteria requirements to be
rated at 'B-', above the sovereign's 'CCC+' Foreign Currency IDR
Debt Ratings
To finance major capital projects and tackle infrastructure lag,
Santa Fe issued USD500 million of notes through two USD250 million
placements. The first one, placed in October 2016, attracted a 6.9%
interest rate, payable semi-annually, with a final maturity of 11
years and three annual installments of USD83.3 million in the last
three years (2025, 2026 and 2027). The first instalment would be in
November 2025. The other one matured in 2023.
Peer Analysis
Santa Fe's SCP of 'b' results from a combination of a 'Vulnerable'
risk profile and a financial profile assessment of 'aa'. The SCP
factors in international peer comparisons, such as entities in
Argentina or Nigeria. All Argentine peers have Vulnerable risk
profiles, that consider the vulnerable macroeconomic context and
fiscal framework in which LRGs operate. Santa Fe's SCP and IDRs
compare well with that of peers rated above the sovereign, the city
of Buenos Aires and province of Cordoba, and other Argentine LRGs.
Issuer Profile
Province of Santa Fe is in central-eastern Argentina. Santa Fe's
economy is the nation's third largest and is relatively broad,
diversified and stable with a strong agro-industrial base,
manufacturing, logistics, and services, which makes it resilient to
most external economic shocks. Santa Fe contributed 10.2% of the
nation's GDP in 2023. It has 3.6 million residents, according to a
2022 census, making it the third most populous province,
representing 8% of the country's population. Rosario, the most
populated city in the province, is an industrial/logistics hub in
Argentina.
Key Assumptions
Qualitative assumptions:
Risk Profile: 'Vulnerable'
Revenue Robustness: 'Weaker'
Revenue Adjustability: 'Weaker'
Expenditure Sustainability: 'Weaker'
Expenditure Adjustability: 'Weaker'
Liabilities and Liquidity Robustness: 'Weaker'
Liabilities and Liquidity Flexibility: 'Weaker'
Financial Profile: 'aa'
Asymmetric Risk: 'N/A'
Support (Budget Loans): 'N/A'
Support (Ad Hoc): 'N/A'
Rating Cap (LT IDR): 'B-'
Rating Cap (LT LC IDR) 'B-'
Rating Floor: 'N/A'
Quantitative assumptions - Issuer Specific
Fitch's rating case is a "through-the-cycle" scenario, which
incorporates a combination of revenue, cost and financial risk
stresses. It is based on 2020-2024 figures and 2025-2027 projected
ratios. The key assumptions for the scenario include:
- Operating revenue average growth of 27.1% for 2025-2027; assuming
growth in line with average inflation towards the medium term.
- Operating expenditure average growth of 29.2% for 2025-2027;
assuming growth above average inflation towards the medium term.
- Average capital expenditure/ total expenditure levels of around
8.4% for 2025-2027; considering the historical average of 8.6% in
2022-2024.
- Debt projections consider an average exchange rate of ARS1,191
per U.S. dollar for 2025 (year-end 1,350), ARS1,458 for 2026
(year-end 1,566), and ARS1,668 for 2027 (year-end ARS1,770);
- Consumer price inflation (annual average % change) of 43.8% for
2025, 22.5% for 2026, 16.5% for 2027
Rating Sensitivities
Factors that Could, Individually or Collectively, Lead to Negative
Rating Action/Downgrade
- A downgrade of the Country Ceiling would negatively affect the
ratings, as well as any regulatory restrictions to access foreign
exchange by LRGs;
- The IDR could be downgraded if the ADSCR drops below 1.0x in
tandem with a liquidity coverage ratio below 1.0x underpinned by
lower operating margins and unrestricted cash, regardless of
whether the payback ratio stays below 5x. As a result, Santa Fe
would not meet the conditions to be rated above the sovereign.
Factors that Could, Individually or Collectively, Lead to Positive
Rating Action/Upgrade
- An upgrade of the Country Ceiling in tandem with its ADSCR that
remains above 2x, from Fitch's forward-looking scenario of 3.4x in
2025 and 2.7x in 2026, could positively affect the ratings,
provided the payback ratio remains below 5x.
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.
Public Ratings with Credit Linkage to other ratings
Santa Fe's ratings are capped by Argentina's Country Ceiling and
are above the sovereign's ratings.
Entity/Debt Rating Prior
----------- ------ -----
Santa Fe, Province of LT IDR B- Affirmed B-
LC LT IDR B- Affirmed B-
senior unsecured LT B- Affirmed B-
=============
B E R M U D A
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UNITED ENERGY: Fitch Assigns 'BB-' LongTerm IDR, Outlook Stable
---------------------------------------------------------------
Fitch Ratings has assigned United Energy Group Limited (UEG) a
Long-Term Issuer Default Rating (IDR) of 'BB-' and a senior
unsecured rating of 'BB-'.
The IDR reflects its medium-scale production, a conservative
financial structure, and strong cash flow generation. UEG's
operating environment risks related to its asset locations are
mitigated by collections through offshore accounts in US dollars,
international sales, and access to global funding.
The Stable Outlook reflects Fitch's expectation that UEG will
maintain its strong financial profile, with net EBITDA leverage
below 1.0x after completing the planned acquisition of assets in
Egypt and investment in Uzbekistan.
Key Rating Drivers
Medium-Sized Producer: UEG's daily production was 108,000 barrels
of oil equivalent per day (kboe/d) with a 1P reserve base of 442
million barrels of oil equivalent (mmboe) at end-2024, based on
working interest. Its Iraq reserves are moderately developed, which
could lead to a lower reserve replenish rate over the rating
horizon. Yet, Fitch expects proven reserve (1P) life to stay at
8-10 years over the rating horizon (2024: 11.2 years), supported by
potential reserve upward revision from existing assets, and new
assets from the planned Egypt acquisition.
Low Costs Support Cash Flow: UEG benefits from low operating costs
and limited greenfield development requirements, resulting in capex
that is consistently lower than cash flow from operations (CFO),
and low leverage over the past few years. Fitch expects UEG will
continue to fund all capex from internal sources, utilising
incremental debt only for future acquisitions. EBITDA per barrel is
around USD25, supported by its low average lifting cost of
USD4.3/boe over 2021-2024.
Strong Financials Provide Acquisition Buffer: UEG has demonstrated
a modest appetite for acquisitions. Its low leverage, with a net
cash position at end-2024, will provide some buffer. Fitch has
included HKD1.4 billion for the Egypt asset acquisition and HKD0.8
billion of committed investment in 2025, and assumed HKD1 billion
each year for 2026 and 2027 for potential further investment; Fitch
expects UEG to maintain EBITDA net leverage below 1x and robust
interest coverage after these investments.
Planned Acquisitions: UEG's subsidiary agreed to acquire Apex
International Energy's Egypt upstream assets on 7 February 2025.
Apex holds interests in eight Western Desert concessions. UEG
signed a Production Enhancement Contract with Uzbekneftegaz JSC on
13 June 2025 to undertake production enhancement and exploration at
21 oilfields and 10 exploration blocks in Uzbekistan's Gazli
region.
Mitigants to Exposure to High-Risk Countries: These risks are
mitigated by UEG's ability to sell products outside these markets
and collect payments internationally, with a substantial share of
revenue from global trading partners and receipts remitted to
offshore accounts. UEG also has access to international funding via
its Hong Kong treasury. Fitch believes UEG is not exposed to
material transfer and conversion risks due to its payment
collections through offshore accounts in US dollars for over 90% of
its E&P revenue.
Peer Analysis
Compared with PT Medco Energi Internasional Tbk (BB-/Stable), UEG
and Medco both focus on upstream production in emerging markets
with moderate scale and limited diversification. Medco is slightly
larger and benefits from fixed-price gas contracts, supporting
stable earnings. UEG has a stronger financial profile with lower
leverage and higher EBITDA interest coverage. Medco's assets are in
lower-risk regions, while UEG mitigates location risks through
offshore US dollar collections and international sales.
Compared with Azule Energy Holdings Limited (B+/Stable), which
operates primarily in deep water offshore Angola, UEG faces no
material transfer & convertibility risks, unlike Azule whose rating
is constrained by these risks. UEG's business profile is slightly
weaker due to lower production and reserves, but both have low
leverage and robust coverage ratios.
UEG's production is much larger than that of Colombia's GeoPark
Limited (B+/Stable) which averages 40kboe/d and with a 1P reserve
life of 5.4 years, both below UEG's metrics. GeoPark's rating is
constrained by small scale and limited diversification, while UEG
compares favourably with stronger coverage, lower leverage, larger
reserves, and higher production.
Key Assumptions
Fitch's Key Assumptions Within Its Rating Case for the Issuer:
- Oil and gas prices per Fitch Ratings' rating case assumptions:
for Brent, assuming USD70/barrel (bbl) in 2025, USD65/bbl for 2026,
USD65/bbl for 2027 and USD60/bbl for 2028 (2024:USD80.5/bbl);
- Daily working-interest production to be around 110kboe/d over
2025-2028 (2024:108kboe/d);
- EBITDA of HKD7.4 billion in 2025, HKD7.1 billion in 2026, HKD7.6
billion in 2027 and HKD6.5 billion in 2028 (2024: HKD7.7 billion);
- Capex of HKD4.2 billion in 2025, HKD5.9 billion in 2026, HKD5.1
billion in 2027 and HKD4.4 billion in 2028 (2024: HKD6.3 billion);
- Investment or acquisition cash outflow of HKD1.4 billion in 2025,
HKD0.8 billion in 2026, HKD1.0 billion in 2027 and HKD1.0 billion
in 2028.
RATING SENSITIVITIES
Factors that Could, Individually or Collectively, Lead to Negative
Rating Action/Downgrade
- Sustained deterioration in 1P working-interest reserve base to
below 300mmboe
- Consolidated EBITDA net leverage sustained at above 2.5x
- Deterioration in the operating environment, including a downgrade
of the sovereign ratings of key operating regions, and/or material
changes to the regulatory framework in key operating countries,
which could have an adverse impact on cash flow
Factors that Could, Individually or Collectively, Lead to Positive
Rating Action/Upgrade
- Average daily working-interest production approaching 175kboe/d,
while expanding 1P working-interest reserve base to 600mmboe,
together with asset diversification into lower-risk countries.
Liquidity and Debt Structure
UEG's cash and equivalents were HKD2.9 billion at end-2024,
adequate to cover its short-term debt of HKD1.8 billion. Its
short-term debt is mainly the repayment facility from its trading
partner. Fitch expects UEG had adequate financial resources at
end-June 2025 to support its planned investment in Egypt and
Uzbekistan.
Issuer Profile
UEG is a medium-sized upstream oil and gas producer listed on the
Hong Kong Stock Exchange (467.HK). The company now operates assets
in Pakistan, Iraq and Egypt. Its 1P working-interest reserve as of
end-2024 was 442mmboe (Iraq 384mmboe, Pakistan 49mmboe, and Egypt 8
mmboe). Its daily working-interest production is 108 kboe/day
(Iraq: 60kboe/day, Pakistan 37kboe/day, Egypt 12kboe/day) in 2024.
Date of Relevant Committee
Sept. 10, 2025
MACROECONOMIC ASSUMPTIONS AND SECTOR FORECASTS
Fitch's latest quarterly Global Corporates Macro and Sector
Forecasts data file which aggregates key data points used in its
credit analysis. Fitch's macroeconomic forecasts, commodity price
assumptions, default rate forecasts, sector key performance
indicators and sector-level forecasts are among the data items
included.
ESG Considerations
The highest level of ESG credit relevance is a score of '3', unless
otherwise disclosed in this section. A score of '3' means ESG
issues are credit-neutral or have only a minimal credit impact on
the entity, either due to their nature or the way in which they are
being managed by the entity. Fitch's ESG Relevance Scores are not
inputs in the rating process; they are an observation on the
relevance and materiality of ESG factors in the rating decision.
Entity/Debt Rating
----------- ------
United Energy
Group Limited LT IDR BB- New Rating
senior unsecured LT BB- New Rating
===========
B R A Z I L
===========
AMBIPAR PARTICIPACOES: Fitch Alters Outlook on BB- IDRs to Negative
-------------------------------------------------------------------
Fitch Ratings has affirmed Ambipar Participações e
Empreendimentos S.A.'s (Ambipar) Foreign and Local Currency Issuer
Default Ratings (IDRs) at 'BB-' and its National Long-Term Rating
and its rated subsidiaries at 'AA-(bra)'. Fitch has also affirmed
Ambipar group's senior unsecured issuances at 'BB-' and 'AA-(bra)'.
The Rating Outlook was revised to Negative from Positive.
The Negative Outlook reflects ongoing corporate governance issues,
as shown by recent shortfall events, which may raise Ambipar's
funding costs. It also reflects moderately weaker Fitch's-adjusted
credit metrics than previous estimates.
Ambipar's ratings continue to reflect strong liquidity, an extended
debt maturity profile, and Fitch's expectation of positive FCF
within three years, which mitigates refinancing risks. The group
maintains a solid position in the environmental services industry,
growth potential, geographic revenue diversification and stable
margins. The ratings are constrained by high consolidated gross
leverage and significant cash flow commitment to interest.
Key Rating Drivers
Governance Shortfall: Fitch's updated relevance score of governance
to 4 reflects the combination of occurrences in the last quarters
that includes late filing of a subsidiary's 20F, an ongoing
administrative process from Comissão de Valores Mobiliários (CVM)
regarding the company's temporary free float percentage below
required minimal levels, and limited transparency on recent
accounting figures. Heightened market scrutiny has weakened its
capital markets access, but refinancing risks are mitigated by its
robust liquidity profile.
Strong Business Model: Ambipar's business model includes service
provisions in its two main operating segments: environment (mainly
waste management and recovery) and response (mitigation of
environmental damage from accidents). The environment segment (in
which the environmental subsidiary operates) represents around 55%
of the revenue. The segment benefits from agreements averaging five
years in duration and low contractual exposure to volume risk.
The response segment (where the subsidiary Emergência operates)
corresponds to around 45% of revenue and is supported by renewable
contracts lasting around three years. Approximately quarter of this
revenue is from subscriptions, and the remainder is related to the
number of occurrences. The company's current strategy, focused on
organic growth, reduces its exposure to acquisition risks.
Geographic Diversification: Ambipar's international activities are
mainly in low-risk countries in Latin America, in addition to North
America and Europe, which represent around 5%, 15% and 10% of its
revenues, respectively. The historical renewals rate, above 95%,
reflects reduced competition within similar geographic coverage and
service offering, which gives Ambipar a competitive advantage. The
company's strategy focuses on private clients and organic expansion
through complementary service in an evolving industry with low
penetration, high competitiveness and significant growth
potential.
Improved Profitability: Fitch expects Ambipar's EBITDA margins to
improve to around 32% from less than 30% in recent years, as the
company benefits from economies of scale and synergies from past
acquisitions. About 70% of the cost structure is variable and
mostly accounts for personnel, allowing greater flexibility to
adjust and protect margins in periods of weak demand. Service
provision contracts allow the pass through of payroll and other
non-manageable costs.
Increasing EBITDA: The base scenario considers Ambipar's EBITDA at
BRL2.2 billion in 2025 with gradual growth to BRL2.5 billion in
2027, supported by business expansion and higher efficiency. Cash
flow from operations (CFFO) should reach close to BRL800 million in
2025 and BRL1.2 billion in 2027, negatively affected by high
interest payments. Investments are estimated to be around
BRL500-600 million, resulting in average annual FCF close to BRL300
million.
Deleverage Expectation: Fitch assumes Ambipar will gradually
deleverage due to its strategy to focus on organic growth. Fitch
expects gross leverage of 4.6x at YE 2025 and in the 3.5x-4.5x
range 2026 onward, as Ambipar strengthens its EBITDA and pays down
debt. Net financial leverage has been moderate, with Fitch's base
case scenario trending to below 3.0x in the rating horizon. The
substantial debt volume and high interest rates should result in
modest interest coverage by EBITDA of less than 2.0x through 2027.
Peer Analysis
Ambipar's credit profile is weaker than Aegea Saneamento e
Participações S.A.'s (Aegea; BB/Stable). Both operate under
long-term contracts, with relatively stable demand, although
Aegea's business is more resilient. Aegea's EBITDA margins in the
50%-60% range are higher than those of Ambipar (around 30%),
although the geographic diversification of Ambipar's operations is
superior, which strengthens its business model.
Ambipar's rating incorporates the expectation of a gradual increase
in its operating cash generation. Aegea's rating considers the
significant challenge of investments and efficiency improvements in
recently incorporated key assets. Aegea's moderate leverage
reflects the company's strong investment cycle and is likely to
remain moderately higher than Ambipar's over the rating horizon.
Aegea's demonstrated access to the capital markets supports its
financial flexibility.
Ambipar's credit profiles compares favorably with that of Waste Pro
USA Inc (Waste Pro; B+/Stable), due to its improved business model
with a more diverse geographical footprint and service provision.
Waste Pro is geographically focused on municipal solid waste
collection in U.S. Southeast. Fitch expects both companies to
achieve similar leverage levels.
Key Assumptions
- Average EBITDA margins close to 32% in 2025-2027;
- Average annual investments in the BRL500 million-BRL600 million
range in 2025-2027;
- Dividends of 25% of net income;
- No acquisitions.
RATING SENSITIVITIES
Factors that Could, Individually or Collectively, Lead to Negative
Rating Action/Downgrade
- Materialization of events that demonstrate corporate governance
and control issues;
- Deterioration on liquidity and/or funding access;
- Net debt/EBITDA above 4.0x and gross debt/EBITDA above 5.0x, both
on a sustained basis;
- EBITDA interest coverage ratio below 1.5x, on a sustained basis;
- Deterioration of profitability, with EBITDA margins below 22%.
Factors that Could, Individually or Collectively, Lead to Positive
Rating Action/Upgrade
- Build a tracking record of better corporate governance in
conjunction with stable operating and financial profiles.
Liquidity and Debt Structure
Fitch believes Ambipar will maintain robust liquidity, with a
consolidated cash balance above BRL2.5 billion in the coming years.
At the end of June 2025, the group had a strong cash balance and
equivalents of around BRL4 billion, compared with short-term debt
of BRL957 million. Fitch assumes that Ambipar should use a part of
its liquidity to reduce total debt as they come due. The company's
lengthened debt maturity profile and positive FCFs support Fitch's
view of manageable refinancing risks in the short to medium term.
Ambipar's consolidated total adjusted debt by the end of June was
BRL11.1 billion, mainly consisting of outstanding notes and
debentures. The parent company's debt of BRL1.6 billion (mainly
debentures) is guaranteed by its subsidiaries.
Issuer Profile
Ambipar provides environmental services in Latin America (primarily
Brazil), the U.S., Canada and the UK. It operates in two main
segments: response (mitigating and preventing environmental damage
from accidents) and environment (managing and recovering industrial
waste from private clients).
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
Ambipar Participacoes e Empreendimentos S.A. has an ESG Relevance
Score of '4' for Financial Transparency due to to a set of
occurrences in the last few quarters including late report filing
of one subsidiary, ongoing administrative process from Brazilian
regulator and transparency on accounting figures, which has a
negative impact on the credit profile, and is relevant to the
ratings 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
----------- ------ -----
Ambipar Lux S.a.r.l.
senior unsecured LT BB- Affirmed BB-
Environmental ESG
Participacoes S.A. Natl LT AA-(bra) Affirmed AA-(bra)
senior unsecured Natl LT AA-(bra) Affirmed AA-(bra)
Ambipar Participacoes
e Empreendimentos S.A. LT IDR BB- Affirmed BB-
LC LT IDR BB- Affirmed BB-
Natl LT AA-(bra) Affirmed AA-(bra)
senior unsecured Natl LT AA-(bra) Affirmed AA-(bra)
Emergencia
Participacoes S.A. Natl LT AA-(bra) Affirmed AA-(bra)
senior unsecured Natl LT AA-(bra) Affirmed AA-(bra)
BRF SA: Fitch Alters Outlook on 'BB+' LongTerm IDRs to Stable
-------------------------------------------------------------
Fitch Ratings has affirmed BRF S.A.'s Long-Term Foreign and Local
Currency Issuer Default Ratings (IDRs) and the senior unsecured
notes issued by BRF and by BRF GmbH (guaranteed by BRF) at 'BB+',
and its National Scale Long-Term Rating and local bonds at
'AAA(bra)'. Fitch also revised the IDR Outlook to Stable from
Positive. The Rating Outlook for the National Scale rating is
Stable.
The Outlook revision follows CADE's (Brazilian Antitrust Authority)
approval of the merger between Marfrig Global Foods S.A (IDRs
BB+/Stable) and BRF. Fitch bases BRF's ratings on its parent's
consolidated profile under the new structure, reflecting open legal
ring-fencing and the parent's open access to, and control of,
subsidiary resources.
Key Rating Drivers
Parent Subsidiary Linkages: Fitch's assessment considers BRF has
the same credit profile as Marfrig, its parent and consolidating
entity. Under the new structure, Fitch assesses legal ring-fencing
and access & control as 'open', so even if BRF's individual credit
quality improves, its rating would align with the parent's
consolidated profile.
Strong Market Positions: BRF is a leading global poultry exporter
with 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 enhances its business
strategy compared to competitors in the Brazilian market.
Positive Chicken Meat Demand: Fitch expects the long-term outlook
for the protein sector will be positive, driven by 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 170 million
and 137 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.
Peer Analysis
BRF's 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/Rating Watch Negative). 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.
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;
RATING SENSITIVITIES
Factors that Could, Individually or Collectively, Lead to Negative
Rating Action/Downgrade
- A downgrade of Marfrig ratings.
Factors that Could, Individually or Collectively, Lead to Positive
Rating Action/Upgrade
- An upgrade of Marfrig ratings.
Liquidity and Debt Structure
BRF's liquidity has improved compared to previous years. BRF had
BRL15 billion in cash and cash equivalents as of June, 2025 and
BRL2 billion in short-term debt, composed mainly of trade finance
and working capital lines, and excluding non-recourse factoring of
receivables. Approximately 50% 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 creditor, 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+
NEOENERGIA SA: S&P Affirms 'BB' ICR, Outlook Remains Stable
-----------------------------------------------------------
S&P Global Ratings affirmed its 'BB' global scale ratings on
Neoenergia S.A. and its subsidiaries, Neoenergia Coelba, Neoenergia
Pernambuco, and Neoenergia Cosern.
The outlook on Neoenergia and its subsidiaries remains stable,
reflecting S&P's view that the group will continue executing its
sizable investment plan amid the current high interest rate. It
expects debt to EBITDA of about 4.5x and FFO to debt of 10%-12% in
2025 and 2026.
Iberdrola S.A. announced on Sept. 11 a deal to purchase Caixa de
Previdencia dos Funcionarios do Banco do Brasil's 30.3% stake in
Neoenergia S.A., increasing its ownership to 83.8% from 53.5%.
S&P said, "We believe the transaction, if completed, would simplify
Neoenergia's shareholder structure. However, we don't expect the
deal to immediately strengthen Iberdrola's willingness or ability
to provide extraordinary support to Neoenergia because Neoenergia
is likely to remain largely self-funded and managed on a
stand-alone basis.
"Our rating affirmation reflects that Iberdrola's larger stake
increases control, but Neoenergia is likely to operate
independently.
Iberdrola's planned acquisition of Caixa de Previdencia dos
Funcionarios do Banco do Brasil's (Previ) 30.3% stake for R$11.95
billion (about EUR1.88 billion), once approved and finalized, would
consolidate its position as Neoenergia's controlling shareholder
with an 83.8% stake. The remaining stake will remain free floating.
The transaction remains conditional on approval from Brazil's
National Electric Energy Agency (ANEEL).
"At this point, we don't foresee raising our group status for
Neoenergia, which already implies financial support if needed. We
expect Neoenergia to preserve operational and financial autonomy,
funding its own investments and servicing its obligations without
reliance on Iberdrola's capital or debt guarantees. In addition, we
don't expect Iberdrola's larger stake to have implications for
Neoenergia's credit quality because the transaction is funded at
Iberdrola's level.
"We will look out for any indications of additional financial
support from Iberdrola toward Neoenergia in the upcoming quarters.
We believe support could increase if Iberdrola further raises its
stake through the purchase of minority shareholders' interests,
adopts a longer-term strategy involving higher investments in
Brazil, or provides more substantial financial support, such as
intercompany loans and debt guarantees. If there is a sufficient
track record of such support and we believe Iberdrola would
continue to support Neoenergia even in a sovereign default scenario
in Brazil, we could upgrade Neoenergia.
"We expect Neoenergia to continue representing 12%-15% of
Iberdrola's adjusted EBITDA in the near future. We don't expect
Iberdrola's capital allocation in Neoenergia will significantly
increase because of the higher ownership, considering that
Neoenergia is focusing on finalizing the construction of
transmission lines by 2026 and on expanding, maintaining, and
improving its distribution networks. It's doing so in the context
of stricter operational quality metrics requirements amid renewal
of distribution concessions in Brazil.
"In addition, we think Iberdrola will continue to focus on less
risky jurisdictions, such as the U.K. or the U.S., for its future
growth. Although we assess the Brazilian regulatory framework for
the electric sector as credit supportive, with the track record of
fully respected contracts, it is more subject to political
intervention than the other jurisdictions Iberdrola operates in.
"The stable outlook reflects our view that Neoenergia will continue
executing its investment plan amid the current high interest rate
in Brazil, with debt to EBITDA about 4.5x in 2025 and 2026 and
funds from operations (FFO) to debt of 10%-12%. The stable outlooks
on the subsidiaries--Neoenergia Coelba, Neoenergia Pernambuco, and
Neoenergia Cosern--mirror that on Neoenergia, since they operate in
the distribution business, a segment responsible for 75%-80% of
Neoenergia's cash flow.
"We could downgrade Neoenergia in the next 12 months if we take a
similar action on Brazil. We could also lower the ratings on
Neoenergia if Iberdrola has fewer incentives to provide support to
its Brazilian operations, combined with a deterioration in
Neoenergia's credit metrics." The latter scenario would consist of
FFO to debt below 9% and debt to EBITDA above 5.5x on a consistent
basis, which could result from worsening of hydrology conditions
that raise working capital needs because of higher energy costs, or
due to higher-than-expected investments, a large debt-financed
acquisition or a more aggressive dividend payout.
The ratings on the subsidiaries will move in tandem with those on
Neoenergia in case of a negative rating action.
Currently, the sovereign rating on Brazil caps the rating on
Neoenergia. S&P said, "Therefore, we would raise the rating on the
group if we upgrade the sovereign, assuming the current group
support from Iberdrola continues, or if there are indications that
Iberdrola's increased ownership results in greater operational and
financial integration with the parent company, leading to stronger
financial support, such as through intercompany loans or debt
guarantees. In our view, this could also reflect a strategic plan
involving higher investments in Brazil."
S&P said, "On a stand-alone basis, if Neoenergia improves its
adjusted debt-to-EBITDA ratio below 3.5x and FFO to debt above 23%
on a consistent basis, we could revise the stand-alone credit
profile (SACP) to 'bb+'. Under this scenario, we would also expect
the group to generate positive free operating cash flows, enabling
it to finance investments with its own cash, rather than issuing
additional debt."
An upgrade of Neoenergia would result in a similar action on its
subsidiaries.
NEW FORTRESS: Advisers Gear Up for Confidential Debt Talks
----------------------------------------------------------
Reshmi Basu of Bloomberg News reports that New Fortress Energy Inc.
has signed non-disclosure agreements with advisers to several
creditor groups as it begins debt restructuring discussions, people
familiar with the situation said.
The liquefied natural gas developer, led by billionaire Wes Edens,
is weighing strategies to cut its debt load and interest burden
amid prolonged project setbacks, according to the people, who
requested anonymity.
About New Fortress Energy Inc.
New Fortress Energy Inc., a Delaware corporation, is a global
energy infrastructure company founded to help address energy
poverty and accelerate the world's transition to reliable,
affordable and clean energy. The Company owns and operates natural
gas and liquefied natural gas infrastructure, ships and logistics
assets to rapidly deliver turnkey energy solutions to global
markets. The Company has liquefaction, regasification and power
generation operations in the United States, Jamaica, Brazil and
Mexico. The Company has marine operations with vessels operating
under time charters and in the spot market globally.
For the fiscal year ended December 31, 2024, the Company had $12.9
billion in total assets, $10.8 billion in total liabilities, and a
total stockholders' equity of $2 billion.
* * *
In July 2025, S&P Global Ratings lowered its issuer credit rating
on New Fortress Energy Inc. (NFE) to 'CCC' from 'B-' . . . The
negative outlook reflects heightened refinancing risk on the
company's notes due September 2026 and an increased possibility
that a payment default or distressed exchange may occur within the
next 12 months.
===================================
D O M I N I C A N R E P U B L I C
===================================
DOMINICAN REPUBLIC: To Expand Efforts to Recover Assets Abroad
--------------------------------------------------------------
Dominican Today reports that the Dominican Republic disclosed that
it will intensify efforts to recover public assets diverted and
hidden overseas, reinforcing its fight against administrative
corruption. The decision was shared by Ambassador Gilka Melendez
during the UN Convention Against Corruption Conference, held in
Vienna from September 1 to 5, 2025, according to Dominican Today.
Melendez highlighted the achievements of the Public Asset Recovery
Team (ERPP), which in just over four years has secured more than
6.3 billion pesos (around US$106 million) for the State and filed
claims totaling 136 billion pesos (US$2.27 billion), the report
relays. She emphasized that the government now seeks to expand
these results through final rulings and stronger international
cooperation to repatriate assets, curb tax evasion and smuggling,
and ensure the ERPP's continuity beyond the current administration,
the report notes.
About Dominican Republic
The Dominican Republic is a Caribbean nation that shares the island
of Hispaniola with Haiti to the west. Capital city Santo Domingo
has Spanish landmarks like the Gothic Catedral Primada de America
dating back 5 centuries in its Zona Colonial district. Luis Rodolfo
Abinader Corona is the current president of the nation.
TCR-LA reported in April 2019 that Juan Del Rosario of the UASD
Economic Faculty cited a current economic slowdown for the
Dominican Republic and cautioned that if the trend continues,
growth would reach only 4% by 2023. Mr. Del Rosario said that if
that happens, "we'll face difficulties in meeting international
commitments."
An ongoing concern in the Dominican Republic is the inability of
participants in the electricity sector to establish financial
viability for the system.
Standard & Poor's credit rating for Dominican Republic was raised
to 'BB' in December 2022 with stable outlook. Moody's credit
rating for Dominican Republic was last set at Ba3 in August 2023
with the outlook changed to positive. Fitch, in December 2023,
affirmed the Dominican Republic's Long-Term Foreign-Currency Issuer
Default Rating (IDR) at 'BB-' and revised the outlook to positive.
=====================
E L S A L V A D O R
=====================
DAVIVIENDA SALVADORENO: Fitch Affirms 'B+' Long-Term IDR
--------------------------------------------------------
Fitch Ratings has affirmed Banco Davivienda Salvadoreno, S.A.'s
(Davivienda Sal) Long-Term Issuer Default Rating (IDR) at 'B+'. The
Rating Outlook is Stable. Fitch has also affirmed Davivienda Sal's
Short-Term IDR at 'B', Shareholder Support Rating (SSR) at 'b+' and
Viability Rating (VR) at 'b-'.
Key Rating Drivers
Support-Driven Ratings: Davivienda Sal's IDRs are driven by its
'b+' SSR, which reflects Fitch's opinion regarding the probability
of support it would receive from Colombian parent Banco Davivienda
S.A. (Davivienda), if required. Davivienda's ability to support is
reflected in its 'BB+' Long-Term IDR/Negative Outlook.
Parent Support Highly Influenced by Country Risks: El Salvador's
country risks, reflected in its 'B+' Country Ceiling (CC), highly
constrain Davivienda Sal's ability to draw on parent support. The
CC captures transfer and convertibility risks and caps Davivienda
Sal's SSR and Long-Term IDR at three notches below Davivienda's
IDR. Fitch views the Colombian parent's support commitment to the
Salvadoran subsidiary as solid, placing Davivienda Sal's Long-Term
IDR and SSR at the CC level, two notches above El Salvador's 'B-'
Long-Term IDR.
Relevant Role in Key Regional Operations: Fitch also considers
Davivienda Sal's role within the Colombian parent's consolidated
Central American platform. It also weighs the significant
reputational risk that a Davivienda Sal default would pose for
Davivienda and its other subsidiaries. Davivienda has a
well-recognized, diversified strategy, a relevant market position
and shares the parent's commercial brand, reinforcing the group's
regional linkage.
Operating Environment Highly Weighs on VR: Davivienda Sal's VR is
constrained by the Salvadoran banking system's Operating
Environment (OE) score of 'b-'. Fitch believes sovereign risks
materially influence local banks' credit profiles, moderately
affecting their funding sources and costs. Local banks have
delivered resilient performance in recent years, with somewhat
better funding access and liquidity amid relatively improved
sovereign financial flexibility. However, their still-significant
holdings of government debt underscore the linkage to sovereign
creditworthiness.
Consistent and Well-Positioned Business Profile: Davivienda Sal
operates a universal banking model with a balanced focus on
consumer, mortgage and corporate commercial segments, reasonably
diversified by sector. It holds a well-established market position
as the fourth largest bank in El Salvador. Its 2021-2024 average
total operating income (TOI) was USD176.6 million, lower than some
larger local peers but consistent with its Business Profile score
of 'b'.
Reasonable Asset Quality: Despite presenting a gradual impairment
rise, Fitch believes Davivienda Sal maintains reasonable levels of
asset quality. The bank's non-performing loans (NPL) ratio was 2.4%
at 2Q25 (2021-2024 average: 2.1%), with the uptick driven by higher
delinquency in certain consumer and mortgage segments. Given
ongoing recoveries plans and prudent risk controls, Fitch expects
asset quality to remain consistent with the 'b-' score over the
rating horizon.
Stable Profitability: Davivienda Sal's profitability is steady but
remains relatively below similarly rated peers. As of 2Q25,
operating profit to risk weighted assets (RWA) was 1.6% (YE 2024:
1.6%), sustained by a moderate net interest margin, stable but
material loan impairment charges and controlled operating expenses.
Fitch expects the bank's profitability levels to remain aligned
with the current 'b-' score, reflecting moderate growth prospects
under El Salvador's challenging operating environment.
Comfortable Capitalization: Davivienda Sal maintains a consistently
reasonable capital position, reflected in a capitalization and
leverage score of 'b'. As of 2Q25, the Fitch Core Capital (FCC) to
RWA metric was 14.2%, slightly below 14.4% at YE 2024 due to faster
credit growth and mild loan deterioration. Fitch expects
capitalization to remain controlled, supported by prudent risk
appetite, conservative growth, partial earnings retention, and
Davivienda's capacity and propensity to provide support.
Sound Funding and Liquidity Structure: Davivienda Sal's funding
profile relies on a solid deposit base that has remained stable
over the past four years. Steady deposits, coupled with modest
credit growth, have gradually improved the loans-to-deposits ratio
to 94.4% at 2Q25 (2021-2024 average: 101.7%) and supported
liquidity levels. The funding and liquidity score of 'b' also
reflects potential support from the parent, Davivienda, if needed,
which in Fitch's view partly mitigates liquidity risk.
Rating Sensitivities
Factors that Could, Individually or Collectively, Lead to Negative
Rating Action/Downgrade
- Because Davivienda Sal's Long-Term IDR and SSR are capped by El
Salvador's CC, they are more sensitive to sovereign rating changes
than to changes in the Colombian parent's ratings, given the
three-notch wide gap between Davivienda Sal's Long-Term IDR and
Davivienda's Long-Term IDR. Therefore, any negative change in the
bank's Long-Term IDR or SSR would mirror a downgrade of El
Salvador's CC.
- Any negative change in Davivienda Sal's Long-Term IDR and SSR
stemming from a parent rating downgrade, would result from a three
or more-notch downgrade in Davivienda's IDR, although this is not
Fitch's base-case scenario;
- Any perception by Fitch of a relevant reduction of the strategic
importance of Davivienda Sal for its parent could trigger a
downgrade of its SSR and IDR;
- The bank's Short-Term IDR would only be downgraded if its
Long-Term IDR were downgraded to 'CCC+' or below;
- A downgrade of El Salvador's sovereign rating could lead to a
downgrade of Fitch's assessment of the OE score for Salvadoran
banks, which would pressure Davivienda Sal's VR. Davivienda Sal's
VR could also be downgraded due to material deterioration of its
business position, delivering relevant credit impairment, reduced
funding sources and lower earnings, specifically if this affects
the operating profit to RWAs ratio, resulting in consistent
operating losses along FCC-to-RWAs ratios consistently below 10%.
Factors that Could, Individually or Collectively, Lead to Positive
Rating Action/Upgrade
- Davivienda Sal's VR, Long-Term IDR and SSR could be upgraded
following an upgrade of El Salvador's sovereign rating and its CC.
As Davivienda Sal's VR and IDR are capped by the sovereign IDR and
by the Salvadoran CC, respectively, they are more sensitive to any
change in the sovereign ratings than to any change in its Colombian
parent. Fitch would also maintain the two-notch uplift from the
sovereign for the SSR;
- The upside potential for Davivienda Sal's VR is limited due to
Fitch's assessment of the OE. Davivienda Sal's VR could only be
upgraded over the medium term on an improvement in the OE while
maintaining solid business and financial profiles.
VR ADJUSTMENTS
The VR of 'b-' has been assigned below the 'b' implied VR, due to
the following adjustment reason: OE/Sovereign Rating Constraint
(negative).
Summary of Financial Adjustments
Fitch's Core Capital and tangible capital calculations excluded the
balance sheet's prepaid expenses from total equity.
Public Ratings with Credit Linkage to other ratings
Davivienda Sal's ratings are linked to its parent, Davivienda's,
ratings.
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 Davivienda
Salvadoreno, S.A. LT IDR B+ Affirmed B+
ST IDR B Affirmed B
Viability b- Affirmed b-
Shareholder Support b+ Affirmed b+
=============
J A M A I C A
=============
JAMAICA: Consumer Prices Rose 0.3% in August
--------------------------------------------
RJR News reports that the Statistical Institute of Jamaica (STATIN)
says consumer prices rose by 0.3% in August when compared with
July.
The increase was driven mainly by higher food prices, particularly
for watermelon, pineapple, papaya, sweet potato, Irish potato,
green bananas and cabbage, the report notes.
There was also a 0.9% rise in the index for recreation, sports and
culture, the report relays.
This was partly offset by a 0.4% decline in housing, water,
electricity, gas and other fuels, the report discloses.
STATIN adds that annual inflation measured between August last year
and August this year slowed to 1.25% down from 3.3% in the July
period, the report relays.
This was influenced by a 5.2% increase in restaurants and
accommodation services, a 9.8% rise in education and a 5.8% dip in
information services, the report adds.
About Jamaica
Jamaica is an island country situated in the Caribbean Sea. Jamaica
is an upper-middle income country with an economy heavily dependent
on tourism. Other major sectors of the Jamaican economy include
agriculture, mining, manufacturing, petroleum refining, financial
and insurance services.
On Feb. 21, 2025, Fitch Ratings affirmed Jamaica's Long-Term
Foreign-Currency Issuer Default Rating (IDR) at 'BB-', with a
positive rating outlook. In October 2023, Moody's upgraded the
Government of Jamaica's long-term issuer and senior unsecured
ratings to B1 from B2, and senior unsecured shelf rating to (P)B1
from (P)B2. The outlook has been changed to positive from stable.
In September 2024, S&P affirmed 'BB-/B' longterm foreign and local
currency sovereign credit ratings on Jamaica and revised outlook to
positive.
JAMAICA: JMEA Urges Commercial Banks to Cut Lending Rates
---------------------------------------------------------
RJR News reports that the Jamaica Manufacturers & Exporters
Association is urging commercial banks to cut lending rates.
Executive Director, Kamesha Turner Blake, says the call comes as
the Bank of Jamaica is set to reduce its benchmark rate again on
September 29, following an expected cut by the US Federal Reserve,
according to RJR News.
The BOJ has already lowered rates from seven to five point
seven-five percent over the past two years, but commercial banks
have not adjusted accordingly, 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.
JAMAICA: JMEA Urges Gov't to be Humble & Accountable in 3rd Term
----------------------------------------------------------------
RJR News reports that the Jamaica Manufacturers & Exporters
Association is urging the Jamaica Labour Party to show greater
humility, accountability, and public sector effectiveness in its
upcoming third consecutive term in government.
Kamesha Turner Blake, Executive Director of the JMEA, says the
government must focus on energy security, fast-track stalled
projects such as workforce training, and address deficiencies in
the electoral system, according to RJR News.
The JMEA also wants more consultation on policy matters, including
adjustments to the national minimum wage, to ensure decisions are
sustainable and aligned with productivity growth, 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.
JAMAICA: JSE Concerned About Late Reporting by Listed Companies
---------------------------------------------------------------
RJR News reports that the Jamaica Stock Exchange (JSE) is raising
concerns about late reporting, particularly among Junior Market
companies.
Its April regulatory report shows that of 52 annual reports due,
only 30 were submitted on time while 22 are still outstanding when
the report was compiled - a compliance rate of just 58 per cent,
according to RJR News.
The exchange says the situation has worsened compared to last year
and now includes delays in audited financial statements and other
key disclosures which are critical to investor confidence, 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.
===========
M E X I C O
===========
ELECTRICIDAD FIRME: Fitch Affirms & Then Withdraws BB LongTerm IDR
------------------------------------------------------------------
Fitch Ratings has affirmed Electricidad Firme de Mexico Holdings,
S.A. de C.V.'s (EFM) Local Currency and Foreign Currency Long-Term
Issuer Default Rating (IDR) at 'BB' and subsequently withdrawn the
rating.
Fitch has withdrawn the ratings for commercial reasons, as the
company repaid the USD350 million senior secured notes in March
2025 and has chosen to discontinue its participation in the rating
process. As a result, Fitch will no longer have sufficient
information to maintain EFM's ratings and will cease to provide
ratings or analytical coverage for EFM. The EFM notes were repaid
using proceeds from Saavi Energia's USD1,100 million issuance.
Key Rating Drivers
The Key Rating Drivers are no longer applicable as the ratings have
been withdrawn.
RATING SENSITIVITIES
The Ratings Sensitivities are no longer applicable as the ratings
have been withdrawn.
Issuer Profile
EFM is the indirect owner of 100% of the equity interest in
Cometa.
MACROECONOMIC ASSUMPTIONS AND SECTOR FORECASTS
Fitch's latest quarterly Global Corporates Macro and Sector
Forecasts data file which aggregates key data points used in its
credit analysis. Fitch's macroeconomic forecasts, commodity price
assumptions, default rate forecasts, sector key performance
indicators and sector-level forecasts are among the data items
included.
ESG Considerations
The highest level of ESG credit relevance is a score of '3', unless
otherwise disclosed in this section. A score of '3' means ESG
issues are credit-neutral or have only a minimal credit impact on
the entity, either due to their nature or the way in which they are
being managed by the entity. Fitch's ESG Relevance Scores are not
inputs in the rating process; they are an observation on the
relevance and materiality of ESG factors in the rating decision.
Entity/Debt Rating Prior
----------- ------ -----
Electricidad Firme
de Mexico Holdings,
S.A. de C.V. LT IDR BB Affirmed BB
LT IDR WD Withdrawn
LC LT IDR BB Affirmed BB
LC LT IDR WD Withdrawn
===========
P A N A M A
===========
NG PACKAGING: Fitch Alters Outlook on BB+ Long-Term IDR to Negative
-------------------------------------------------------------------
Fitch Ratings has affirmed NG Packaging & Recycling Corporation
Holdings S.A.'s (SMI) Long-Term Issuer Default Rating (IDR) at
'BB+'. Fitch has also affirmed the unsecured notes co-issued by NG
PET R&P Latin America S.A. and San Miguel Industrias PET S.A. at
'BB+'. The Rating Outlook on the IDR has been revised to Negative
from Stable.
Fitch's credit analysis incorporated the combined accounts of SMI
and NG Packaging & Recycling Corporation Holdings II S.A. (Sinea),
known as SMI Group.
The Negative Outlook reflects Fitch's expectation of higher
leverage metrics, driven by a more challenging business environment
and weaker cash flow generation. SMI Group's EBITDA net leverage
was approximately 4.0x in 2024, and Fitch anticipates it will
remain near this level in 2025, with a gradual improvement towards
3.5x in the next 12-18 months.
The ratings affirmation incorporates SMI Group's resilient business
model as a one-stop shop for rigid plastic packaging.
Key Rating Drivers
Higher Leverage in 2025: Fitch projects SMI Group's EBITDA net
leverage will remain relatively high at 4.0x in 2025 and will start
to deleverage to levels close or below 3.5x in the next 12-18
months. Fitch could downgrade the rating is there is a delay in
deleveraging. The company is facing a challenging business
environment in its main markets, which has resulted in lower demand
for bottled beverages from the region's leading beverage players.
While a gradual recovery in SMI's Group profitability is expected
over the next 12-18 months, EBITDA margin is projected to be around
16% in 2025 due to lower operating leverage and higher costs
related to energy and logistics.
Delay from Recycled Resin Investments: SMI Group's investments in
recycled resin have not yet delivered projected benefits.
Unit-level gross margin and cash flow improvements are taking
longer than expected as some facilities continue their ramp up
process. The company is well positioned to secure long-term
contracts on current contracted customers and small and
medium-sized businesses, despite major bottling companies reducing
recycled resin usage. End markets such as soft drinks, edible oil,
dairy, and home care will likely drive organic growth in the medium
to long term.
FCF Capacity Key to Deleveraging: Fitch believes that SMI Group'
capacity to generate positive FCF over 2025-2027 will drive
deleveraging. The company's cash flow from operations is projected
to average annually around USD70 million, which will be sufficient
to cover capex requirements of around USD50 million. SMI Group does
not expect to distribute dividends in 2025-2027. Fitch believes
positive FCF should support the company's EBITDA net leverage
improvement in the absence of major investments, acquisitions, or
capital distributions to shareholders.
Fully Integrated Operations: SMI Group, including the SMI business
alongside the Sinea closures business, is a one-stop shop regional
supplier, with packaging solutions for containers, closures,
thermoforming, and recycled resin. This creates barriers to entry
for competitors. Fitch anticipates the containers segment and
closures business will represent about 80% and 15%, respectively,
of the group's total EBITDA in 2025-2026.
Geographic and Product Diversification: Fitch estimates
approximately 65% of the group's revenues in 2024 were generated
outside of Peru, primarily in Central America, Colombia, Ecuador,
and Mexico. Around 53% of its total sales volume was related to
closures, 43% containers, and the rest from thermoforming and other
products. This geographic and product diversification enables the
company to pursue international contracts and negotiate more
effectively with international suppliers.
Contracted Sales: The rating is supported by SMI Group's long-term
contracts in its container and closures divisions, as they provide
predictability in cash flow generation and reduce business risk.
The company's contracts have a weighted-average life of
approximately seven years, with over 85% being contracted. SMI
Group's pass-through model offers margin protection against resin
price volatility and natural hedges against currency fluctuations,
as both equipment and client contracts are denominated in U.S.
dollars.
Peer Analysis
The ratings consider SMI Group's diverse geographic and product
portfolio, its substantial contracted revenue base, and its
pass-through pricing model that shields against price fluctuations.
Although SMI Group has experienced significant growth over the past
decade, it is still smaller compared to international counterparts
like Amcor plc. The company's revenue is concentrated on a small
number of key clients, which is a common pattern in the region's
beverage and consumer industries. However, this concentration risk
is lessened by certain contractual conditions negotiated by country
with each client and by the increased scale the company has
achieved over time.
Key Assumptions
- Revenue growth averaging 4% in 2025-2027;
- EBITDA margins around 16% in 2025-2027;
- Capex around USD50 million in 2025-2027;
- No dividends payments in 2025-2027;
- FCF positive in 2025-2027.
RATING SENSITIVITIES
Factors that Could, Individually or Collectively, Lead to Positive
Rating Action/Upgrade:
- Net leverage below 2.5x on a sustained basis;
- Strong FCF generation;
- Good liquidity.
Factors that Could, Individually or Collectively, Lead to Negative
Rating Action/Downgrade:
- A delay on a deleverage trend that results in EBITDA net leverage
above 3.5x on a sustained basis by 2027;
- Dividends payments or shareholders distributions that deteriorate
leverage metrics;
- Negative FCF on a sustained basis leading to a weakness in its
liquidity position.
Liquidity and Debt Structure
Fitch considers SMI Group liquidity position is manageable given
the expectation of cash flow generation and its track record of
adequate access to bank facilities and capital markets.
As of June 30, 2025, the company had USD24.4 million in cash and
cash equivalents, with short-term debt maturities of USD73 million.
Its total debt was USD666 million out of which USD380 million was
related to senior notes due in 2028. Fitch anticipates SMI Group
will refinance its next debt maturities in 2025 and 2026.
SMI Group is a private company that is majority-owned by Nexus
Group, the leading private equity fund in Peru and is associated
with Intercorp Peru Ltd. (BBB-/Stable), one of Peru's largest
conglomerates.
Issuer Profile
SMI Group is a leading rigid plastic packaging solutions company in
Latin America, serving top multinational CPGs in the beverage,
food, personal, and home care industries. It has a visible and
diversified revenue stream with blue chip customers and resin
pass-through provisions.
MACROECONOMIC ASSUMPTIONS AND SECTOR FORECASTS
Fitch's latest quarterly Global Corporates Macro and Sector
Forecasts data file which aggregates key data points used in its
credit analysis. Fitch's macroeconomic forecasts, commodity price
assumptions, default rate forecasts, sector key performance
indicators and sector-level forecasts are among the data items
included.
ESG Considerations
The highest level of ESG credit relevance is a score of '3', unless
otherwise disclosed in this section. A score of '3' means ESG
issues are credit-neutral or have only a minimal credit impact on
the entity, either due to their nature or the way in which they are
being managed by the entity. Fitch's ESG Relevance Scores are not
inputs in the rating process; they are an observation on the
relevance and materiality of ESG factors in the rating decision.
Entity/Debt Rating Prior
----------- ------ -----
NG Packaging &
Recycling Corporation
Holdings S.A. LT IDR BB+ Affirmed BB+
San Miguel Industrias
PET S.A.
senior unsecured LT BB+ Affirmed BB+
NG PET R&P Latin
America, S.A.
senior unsecured LT BB+ Affirmed BB+
TELECOMUNICACIONES DIGITALES: Fitch Affirms 'BB+' LongTerm IDRs
---------------------------------------------------------------
Fitch Ratings has affirmed Telecomunicaciones Digitales, S.A.'s
(Tigo Panama) Long-Term Foreign and Local Currency Issuer Default
Ratings (IDRs) at 'BB+'. The Rating Outlook is Stable. Fitch has
also affirmed Tigo Panama's senior unsecured notes due 2030 at
'BB+'.
Tigo Panama's ratings are linked to its parent, Millicom
International Cellular S.A. (BB+/Stable), due to the lack of
ring-fencing and Millicom's ability to access the subsidiary's cash
flow through dividends and other measures. Tigo Panama's ratings
also reflect its leading market position, supported by an extensive
network, strong brand recognition and a solid financial profile.
Key Rating Drivers
Parent-Subsidiary Relationship: Tigo Panama ratings are capped by
Millicom's 'BB+'/Stable ratings, despite Tigo Panama's 'bbb-'
Standalone Credit Profile (SCP), per Fitch's "Parent and Subsidiary
Rating Linkage Criteria". The lack of legal ring-fencing allows
unrestricted upstream cash distributions to Millicom, which could
strain Tigo Panama's FCF. Access and control are also open because
no formal policy limits upstreaming from the subsidiary.
Market Position Ensures Steady Profitability: Fitch expects EBITDA
margins to be above 34% through the rating horizon, compared to 33%
in 2024, supported by a moderate improvement in fixed costs and
revenues and Tigo Panama's strong market position. The ability to
cross-sell mobile and broadband services to existing customers,
along with cost reductions and economies of scale, is expected to
sustain these margin levels. The company's strong market position
and solid profitability across all business segments mitigate
concerns regarding its limited geographic diversification and
provide cash flow resilience against market deceleration or an
increase in competition.
Robust FCF Generation: Fitch projects solid FCF generation before
dividends due to strong cash flow from operations that comfortably
covers capex. Tigo Panama's net leverage is expected to stabilize
around 1.8x through the rating horizon from 2.0x in 2024 due to
modestly higher EBITDA and lower capex, consistent with the
company's growth and cost-cutting initiatives. Fitch projects CFO
to remain strong, while excess FCF beyond capex needs is likely to
be upstreamed to Millicom, consistent with its sister companies' in
the region.
Post-Paid Growth Supporting Revenue: Fitch expects Tigo Panama's
post-paid subscribers to rise about 15% in 2025 and then grow at
mid-single digits over the rating horizon, offsetting stabilized
pre-paid subscriber trends and supporting low single-digit blended
ARPU growth. Despite relatively high GDP per capita, Panama's
post-paid mobile penetration remains low versus Latin America. With
over 90% of users on 4G, Tigo Panama has ample opportunity to
convert pre-paid customers to post-paid. Expected mobile revenue
growth should partially offset lower B2B revenue in 2025 as large
government projects transition from delivery and installation to
the maintenance phase.
Peer Analysis
Tigo Panama's financial profile compares favorably to regional
peers. In Panama, the company has a stronger subscriber market
share and maintains more conservative financials than its primary
competitor, Cable & Wireless Communications Limited (BB-/Stable).
Regionally, Tigo Panama is smaller than other operators across
Latin America, primarily due to the limited market size in Panama.
Larger diversified operators like Telefonica Moviles Chile S.A.
(BB-/Negative), Empresa Nacional de Telecomunicaciones S.A. (ENTEL;
BBB-/Stable), and UNE EPM Telecomunicaciones S.A. (BB+/Stable)
operate on a larger scale in their respective markets. Despite
this, Tigo Panama's strong market position across all service
offerings in Panama compensates for its smaller scale.
As with other Millicom subsidiaries, Tigo Panama's ratings reflect
the parent-subsidiary relationship given Millicom's controlling
stake. Ratings for CT Trust (Comcel) (BB+/Stable) and Telefonica
Celular del Paraguay S.A.E. (Telecel; BB+/Stable) also reflect
strong links to Millicom due to these subsidiaries financial
importance and Millicom's ability to extract dividends and use
other upstream tools. Compared to CT Trust and Telecel, Tigo Panama
faces no foreign-exchange risk and operates in a stronger operating
environment.
Key Assumptions
- Incremental homes passed per year of around 60,000 in 2025 and
10,000 annually thereafter;
- Home (residential pay-TV, broadband and fixed voice) revenue
generating units up slightly in 2025, roughly flat thereafter;
- Mobile subscribers flat over the rating horizon supported by
growth in post-paid;
- Revenues in 2025 impacted by large B2B contract in 2025, expected
to recover through the rating horizon;
- Average EBITDA margins steady around 34-35% in the medium term
with improving operational efficiencies;
- Stable capital intensity around 13%;
- Yearly dividends starting in 2026 with VCF fees around 8-9% of
revenues;
- Steady CFO-capex over the rating horizon, supporting stable net
leverage near long-term targets.
RATING SENSITIVITIES
Factors that Could, Individually or Collectively, Lead to Negative
Rating Action/Downgrade
- A negative rating action on Millicom;
- Significant deterioration in Tigo Panama's SCP due to higher
gross and net leverage levels.
Factors that Could, Individually or Collectively, Lead to Positive
Rating Action/Upgrade
- An upgrade of Millicom, Tigo Panama's controlling shareholder,
would have positive rating implications.
Liquidity and Debt Structure
Tigo Panama's liquidity is bolstered by a solid business profile
and its capacity to refinance its short-term debt maturities. Fitch
anticipates pre-dividend cash flows to remain stable while capital
intensity declines. Fitch expects Millicom to extract upstream
distributions from Tigo Panama, limiting FCF.
As of 2Q25, total debt was USD742 million, consisting primarily of
USD557 million of 4.5% notes due in 2030 and USD185 million of bank
debt due in 2025-2026, which Fitch expects the company to rollover.
The company held USD265 million in cash and equivalents as of June
30, 2025. Positively, the financial structure is not exposed to
foreign exchange risk, as cash flows and debt are U.S. dollar
linked.
Issuer Profile
Tigo Panama is controlled by Millicom and provides pay TV,
broadband internet, fixed telephony, and mobile services in Panama,
with networks covering over 1 million homes and businesses. It
serves over 2.85 million mobile customers and 1 million fixed
Revenue Generating Units (RGUs).
MACROECONOMIC ASSUMPTIONS AND SECTOR FORECASTS
Fitch's latest quarterly Global Corporates Macro and Sector
Forecasts data file which aggregates key data points used in its
credit analysis. Fitch's macroeconomic forecasts, commodity price
assumptions, default rate forecasts, sector key performance
indicators and sector-level forecasts are among the data items
included.
ESG Considerations
The highest level of ESG credit relevance is a score of '3', unless
otherwise disclosed in this section. A score of '3' means ESG
issues are credit-neutral or have only a minimal credit impact on
the entity, either due to their nature or the way in which they are
being managed by the entity. Fitch's ESG Relevance Scores are not
inputs in the rating process; they are an observation on the
relevance and materiality of ESG factors in the rating decision.
Entity/Debt Rating Prior
----------- ------ -----
Telecomunicaciones
Digitales, S.A. LT IDR BB+ Affirmed BB+
LC LT IDR BB+ Affirmed BB+
senior unsecured LT BB+ Affirmed BB+
=====================
P U E R T O R I C O
=====================
ALUMAX INC: Plan Exclusivity Period Extended to October 2
---------------------------------------------------------
Judge Maria de Los Angeles Gonzalez of the U.S. Bankruptcy Court
for the District of Puerto Rico extended Alumax Inc.'s exclusive
periods to file a plan of reorganization and disclosure statement
to October 2, 2025.
As shared by Troubled Company Reporter, the Debtor explains that
since this Court's prior extension order, a significant contested
matter has emerged that directly impacts fundamental elements of
any proposed Plan. Commercial Equipment Finance, Inc. ("CEFI")
filed Proof of Claim #2-2 claiming secured status based on
cross-collateral agreements and UCC filings.
The Debtor claims that the contested matter involves dispositive
legal issues including: (i) whether CEFI's UCC filing describes the
correct collateral (describing a rivet machine while the loan
agreement covers a generator); (ii) whether CEFI's private cross
collateral agreements are enforceable against the DIP without
proper UCC amendments; and (iii) whether private cross-collateral
agreements without public filing can create enforceable security
interests against third parties.
The Debtor asserts that it requires sufficient time to resolve the
CEFI contested matter before preparing a Chapter 11 Plan. The
existence of this unresolved contingency directly impacts claim
classification, liquidation analysis, and plan feasibility which
are core elements that must be determined before proposing a viable
plan to creditors.
The Debtor further asserts that the timing of this request aligns
with the need for judicial resolution of complex legal issues
involving UCC perfection, cross-collateral enforceability, and
public notice requirements. The requested extension to October 2,
2025 (which aligns with the 300-day statutory deadline) provides
adequate time for the Court to consider and resolve the CEFI matter
and for the Debtor to incorporate that resolution into plan
formulation.
Alumax Inc. is represented by:
Javier Villarino, Esq.
Villarino & Associates LLC
P.O. Box 9022515
San Juan, PR 00902
Telephone: (787) 565-9894
Email: jvillarino@vilarinolaw.com
About Alumax Inc.
Alumax Inc. manufactures aluminum doors and windows with its
manufacturing infrastructure located in San Sebastian, Anasco,
Ponce and San Domingo.
Alumax Inc. sought relief under Chapter 11 of the U.S. Bankruptcy
Code (Bankr. D.P.R. Case No. 24-05312) on December 6, 2024. In the
petition filed by Frank J. Jimenez, Cruz as president, the Debtor
reports total assets of $416,851 and total liabilities of
$2,954,034.
The Debtor is represented by Javier Vilarino, Esq. at VILARINO AND
ASSOCIATES, LLC.
=====================================
T R I N I D A D A N D T O B A G O
=====================================
CITGO PETROLEUM: Parent Auction Sale Hearing Kicks Off
------------------------------------------------------
Marianna Parraga at Reuters reports that a long-awaited sale
hearing expected to complete a U.S. court-organized auction of
shares in the parent of Venezuela-owned U.S. refiner Citgo
Petroleum kicked off today, Sept. 22, 2025, with bidders and
creditors locked in a bitter dispute over who should win.
The Delaware court is hearing testimony from involved parties,
witnesses and experts in the four-day showdown before Judge Leonard
Stark selects a final winner, according to Reuters.
At stake is the future of the seventh largest U.S. refiner, whose
parent was found liable for the South American nation's debt, as 15
companies with expropriated assets and holders of defaulted bonds
pursue its assets, the report notes.
Judge Stark denied a motion to extend the hearing to consider a
last-minute bid from Blue Water (BLUW.O), opens new tab, and also
denied Venezuela's request to suspend the proceeding over an
alleged conflict of interest involving law firm Weil, Gotshal &
Manges, which is advising the court, the report says. Another set
of arguments could be presented in October if the court decides
more time and evidence are needed, the report relays.
"This sale hearing represents a significant milestone in an 18-year
litigation effort that ConocoPhillips (COP.N), opens new tab has
been engaged in since its assets were expropriated in 2007 by
(Venezuelan) President Hugo Chavez," Amy Wolf, a lawyer
representing the oil company, the largest creditor in the case with
more than $11 billion in claims, said during the hearing, the
report discloses.
Blue Water representatives told Reuters the firm was granted access
to Citgo's data room and expects the court to allow it to present
supporting evidence at the end of the hearing. Weil, Gotshal &
Manges did not immediately reply to a request for comment.
Rival Bids for Citgo Clash in Court
In July, a court officer overseeing the process selected a
subsidiary of Toronto-listed miner Gold Reserve (GRZ.V), opens new
tab as the auction's frontrunner, the report says.
But following a last-minute bidding war, officer Robert Pincus
switched his recommendation to a $5.9 billion bid from Amber
Energy, an affiliate of hedge fund Elliott Investment Management,
the report relays.
The decision has unleashed objections and a motion to disqualify
Amber's bid, which remains pending, amid a battle between
expropriated companies and holders of the nation's defaulted bonds,
the report notes.
Miner Crystallex, ConocoPhillips (COP.N), opens new tab and an
affiliate of bondholder Contrarian Funds told the court they
support Amber's bid, while Venezuela, Gold Reserve and junior
creditors objected to it, the report discloses.
The hearing "will serve as the first stress test of whether the
Amber bid can survive the full gauntlet of procedural, legal, and
geopolitical risks," said lawyer Jose Ignacio Hernandez from
consultancy Aurora Macro Strategies, in a report, Reuters relays.
By including a $2.1 billion cash payment to holders of PDVSA's 2020
bonds, Amber's bid creates an opportunity to resolve a long-pending
claim that is being heard in a separate New York court, the report
discloses.
However, Venezuela and a handful of creditors prefer to wait for
the resolution of the New York case, where the validity of the
bonds is in dispute, before anything is paid to the holders, the
report notes.
The court heard testimonies from experts about Citgo's valuation,
following Venezuela's arguments that the assets should not be
auctioned at a fraction of their value, the report says.
The company was valued at some $13 billion by court advisors before
the first bidding round last year, but a more recent valuation
raised it to some $18 billion, one of the experts said, the report
relays. Bids have not surpassed $11 billion, the report notes.
About Citgo Petroleum
Citgo Petroleum Corporation is a United States-based refiner,
transporter and marketer of transportation fuels, lubricants,
petrochemicals and other industrial products. Based in Houston,
Texas, Citgo is majority-owned by PDVSA, a state-owned company of
the Venezuelan government (although due to U.S. sanctions, in 2019,
they no longer economically benefit from Citgo.)
As reported in the Troubled Company Reporter-Latin America on Sept.
3, 2025, Fitch Ratings has affirmed the Long-Term Issuer Default
Rating (IDR) of CITGO Petroleum Corp. (CITGO, or Opco) at 'B' with
a Stable Outlook and CITGO Holding, Inc. (Holdco) at 'CCC+'. Fitch
also affirmed Opco's existing senior secured notes and industrial
revenue bonds at 'BB' with a Recovery Rating of 'RR1'.
TRINIDAD & TOBAGO: Small Decrease in Inflation, CSO Says
--------------------------------------------------------
Trinidad and Tobago Newsday reports that the Central Statistical
Office (CSO) reported small decreases in the inflation rate and the
prices of food and non-alcoholic beverages in the latest consumer
price index for August 2025.
In the report, released to the media on September 16, the CSO said
the inflation rate for August - a measure of the percentage change
in the all items index for that month over the same period the year
before - was 1.4 per cent, according to Trinidad and Tobago
Newsday.
The figure is a decrease from the previous period (July 2025/July
2024), which was 1.5 per cent, the report relays.
The inflation rate for the comparative period (August 2024/August
2023) was 0.4 per cent, the report notes.
The all-items index, a calculation of all the prices collected for
August, was one per cent below the index for July, at 125.6, the
report discloses.
The index for food and non-alcoholic beverages decreased from 154.6
in July to 153.6 in August, a decrease of 0.6 per cent, the report
relays.
The decrease was because of a general drop in the prices of
tomatoes, cucumbers, ochroes, melongene, eddoes, green sweet
pepper, garlic, pumpkin, carbonated soft drinks and chives, the
report notes.
However, the full impact of these price decreases was offset by the
general increase in the prices of Irish potatoes, pimento, hot
peppers, cheddar cheese, onions, fresh carite, parboiled rice,
celery, melon and fresh steak, the report says.
Alcoholic beverages and tobacco increased 0.3 per cent, clothing
and footwear saw a 0.7 per cent increase and health products
increased by 0.2 per cent, the report adds.
=================
V E N E Z U E L A
=================
CITGO PETROLEUM: Bondholders, Creditors Clash Amid Auction Decision
-------------------------------------------------------------------
Marianna Parraga at Reuters reports that the auction of the parent
of Venezuela-owned U.S. refiner Citgo Petroleum is turning into a
heated contest between creditors trying to get compensation for the
expropriation of their Venezuelan assets and holders of a defaulted
bond issued by the country's oil company PDVSA.
The interests of both groups have become increasingly opposed as a
court in Delaware moves toward the completion of a bidding process
that has lasted nearly two years and saw the supervising officer
change his recommended winner last month amid a bidding war,
according to Reuters.
At stake is the future of the seventh largest U.S. refiner, owned
by Venezuela and found liable for the South American nation's debt,
the report notes. The court plans to listen to all parties,
witnesses and experts in a hearing to decide the auction's final
winner, the report relays.
In July, court officer Robert Pincus selected a $7.4 billion bid
from a subsidiary of Toronto-listed miner Gold Reserve (GRZ.V), as
the auction's frontrunner, the report discloses.
But following the arrival of unsolicited offers that forced the
extension of the bidding period, he marked a $5.9 billion bid, from
an affiliate of hedge fund Elliott Investment Management as his
recommended winner, mainly because it included a separate $2.1
billion cash payment that would settle a claim against Venezuela by
the holders of a defaulted PDVSA bond, the report says.
The change has triggered objections and a motion from Gold Reserve
and four other parties to disqualify the bid from Elliott's
affiliate Amber Energy, which is pending. Holders of the PDVSA 2020
bonds and top creditors Crystallex and ConocoPhillips (COP.N), have
supported Amber's bid, according to court filings, the report
notes.
The switch also has intensified a long-standing clash in U.S.
courts between companies whose Venezuelan assets were expropriated
more than a decade ago and defaulted bondholders, the report
relays.
"The sudden shift reopens the debate over how the PDVSA 2020 notes
risk is priced, a question that has swung the process before," said
consultancy Aurora Macro Strategies in a report last month, the
report discloses.
The PDVSA 2020 bonds, which have been rallying since Pincus
determined that Amber's bid was superior, were trading at 98.5
cents on the dollar after reaching an all-time record of 100 cents,
the report recalls.
Who's First?
Gold Reserve, Venezuela and other creditors want to wait for the
resolution of a separate, key case in New York over the validity of
the bonds before paying anything to the holders, while some
bidders, including Amber, propose settling the bondholders' claim
now to remove an obstacle that has been clouding the auction, the
report notes.
The difference in those strategies has created a gap of at least $2
billion in the valuation of the offers, making bids difficult to
compare, the report relays.
Court officer Pincus said that "the evaluation criteria adopted by
the court makes clear that the bid with the highest price tag will
not necessarily be the best bid," the report notes.
The gap also has become crucial for the determination of how many
of the 15 claimants registered in Delaware to collectively cash up
to $19 billion from auction proceeds will get compensation, and if
paying the bondholders beforehand will deprive some creditors of
payment, the report relays.
While Amber's bid fully covers nine creditors plus a small portion
of Gold Reserve's $1.18 billion claim if accepted, the Gold Reserve
group's bid proposes full coverage of 12 creditors, the report
discloses.
New York Judge Katherine Polk Failla said that a decision on the
bondholders' rights will come this month, which could change the
weight and priority bidders have assigned to that claim, the report
notes.
In Delaware, parties are getting ready for the sale hearing, which
could include a second set of arguments next month if Judge Leonard
Stark chooses to wait for the New York ruling before making his
final decision, the report adds.
About Citgo Petroleum
Citgo Petroleum Corporation is a United States-based refiner,
transporter and marketer of transportation fuels, lubricants,
petrochemicals and other industrial products. Based in Houston,
Texas, Citgo is majority-owned by PDVSA, a state-owned company of
the Venezuelan government (although due to U.S. sanctions, in 2019,
they no longer economically benefit from Citgo.)
As reported in the Troubled Company Reporter-Latin America on Sept.
3, 2025, Fitch Ratings has affirmed the Long-Term Issuer Default
Rating (IDR) of CITGO Petroleum Corp. (CITGO, or Opco) at 'B' with
a Stable Outlook and CITGO Holding, Inc. (Holdco) at 'CCC+'. Fitch
also affirmed Opco's existing senior secured notes and industrial
revenue bonds at 'BB' with a Recovery Rating of 'RR1'.
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TRINIDAD & TOBAGO: Central Bank Says Finc'l. System Stable in 2024
------------------------------------------------------------------
Andrew Gioannetti at Trinidad and Tobago Newsday reports that the
Central Bank's Financial Stability Report 2024 has found Trinidad
and Tobago's financial system remained broadly stable last year.
The report, however, identified a cluster of domestic
vulnerabilities -- heavy bank and insurer exposure to sovereign
debt, tighter system liquidity, rising household indebtedness and
an increase in cyber incidents -- that together raise the risk of
materially worse outcomes if shocks occur, according to Trinidad
and Tobago Newsday.
Real GDP expanded by 2.5 per cent in 2024, up from 1.5 per cent in
2023, the report relays. Unemployment rose to 5.0 per cent while
headline inflation averaged 0.5 per cent, the report discloses. At
the same time, the central government recorded an overall fiscal
deficit of $9.1 billion (5.3 per cent of GDP) for FY2023/24 and
adjusted general government debt rose to $140.6 billion or about
81.7 per cent of GDP, the report says. Fiscal pressures were
partially met through withdrawals from the Heritage and
Stabilization Fund and increased domestic borrowing, the report
notes.
Private sector credit expanded by 7.7 per cent in 2024, supported
by double-digit growth in both consumer and business lending, the
report relays.
Household debt increased materially: the household debt-to-GDP
ratio rose to 40.6 per cent (an increase of 175 basis points), the
report discloses. Non-performing loan (NPL) ratios remained low at
the sector level, but the report highlighted an upward trend in
household NPLs even as corporate NPLs improved, the report notes.
The Central Bank flagged the combination of faster credit growth
and higher household leverage as a source of concern for repayment
capacity under adverse conditions, the report says.
Sustained concentration of financial-sector holdings in domestic
government paper was a central finding, the report discloses.
Trinidad and Tobago Newsday relays domestic financing accounted for
the bulk of government borrowing in FY2024, leaving banks and
insurers significantly exposed to sovereign credit and market risk.
Stress tests that modeled adverse scenarios, including a sovereign
credit event, showed that sector capital buffers would be severely
strained, the report notes.
In the sovereign default stress test, the sector's post-shock
capital adequacy ratio fell to roughly 7.5 per cent, below the ten
per cent regulatory threshold, the report says.
The capital adequacy ratio measures the amount of capital banks
hold compared to their risk-weighted assets; dropping below the
minimum means banks could struggle to absorb losses if major shocks
occur, the report notes.
The report also noted vulnerability to shocks from large exposures
to government-related entities, the report discloses.
Liquidity tightened in early 2024. To ease pressures, the Central
Bank lowered the primary reserve requirement from 14.0 per cent to
ten per cent on July 24, 2024, injecting roughly $4 billion of
liquidity into the system, the report relays.
The report also recorded that commercial banks' excess reserves
rose by about $3 billion after the change, the report notes.
The measure eased near-term strain and supported credit growth, but
funding costs remained elevated, and banks' average liquidity
"survival horizons" shortened from 27 days to 25 days, the report
discloses.
The Central Bank has warned that an unexpected liquidity shock
could trigger rapid repricing and upward pressure on lending rates,
the report relays.
Consumer loans in the banking sector rose 9.5 per cent in 2024, the
report recalls.
About 16.4 per cent of the increase in consumer lending was
attributable to debt restructuring activities such as refinancing
and consolidation, the report notes. The bank stressed that a
deterioration in household repayment capacity (for example, from an
employment shock or rising interest rates) could raise household
NPLs and materially affect banks' capital positions, the report
says.
The report documented a notable rise in cyber incidents during
2024, including phishing and business-email-compromise attacks, and
signals growing operational risk for financial firms, Trinidad and
Tobago Newsday discloses. In response, the bank announced the
development of a cybersecurity risk-based supervision framework and
training examiners in cyber oversight, the report says. It also
called for greater sector-level coordination on threat-sharing and
resilience testing, the report notes.
To address identified vulnerabilities, the bank has accelerated
supervisory and regulatory initiatives, the report relays.
These include consultations and a submission of draft financial
institutions (liquidity) regulations, implementing a liquidity
coverage ratio and liquidity monitoring tools; preparatory work on
Pillar-3 disclosure requirements; issuance and industry
consultation on an Own Risk and Solvency Assessment (ORSA)
guideline for insurers; and implementation work related to IFRS 17
reporting for the insurance sector, the report notes.
The bank is also piloting payments-system reforms – testing a
fast payments system for instant retail transfers and participating
in the Caricom Payment and Settlement System (CAPSS) for instant
cross-border payments – while approving full or provisional
registrations for new e-money providers, the report relays.
The report concluded that Trinidad and Tobago's financial system
remained resilient during 2024 but faces elevated downside risks if
domestic fiscal pressures persist or if external shocks intensify.
The bank's assessment links those risks to the concentration of
sovereign exposure in financial-sector balance sheets, tighter
liquidity conditions, increasing household leverage and rising
operational-cyber threats, Trinidad and Tobago Newsday discloses.
In response, the report sets out a package of supervisory,
regulatory and operational measures, including liquidity standards,
enhanced disclosures, insurer solvency guidance, cyber supervision
and payments-system upgrades, intended to reduce systemic
vulnerability, 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
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
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