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250925.mbx T R O U B L E D C O M P A N Y R E P O R T E R L A T I N A M E R I C A Thursday, September 25, 2025, Vol. 26, No. 192 Headlines A R G E N T I N A ARGENTINA: Triple Setback for Milei as Congress Rejects Vetoes B R A Z I L LD CELULOSE: Fitch Alters Outlook on 'BB-' LongTerm IDR to Positive E L S A L V A D O R EL SALVADOR: IDB OKs $170MM-Loan to Supports Enhanced Services J A M A I C A JAMAICA: MSME Sector Faces Financing Challenges RJRGLEANER COMMUNICATIONS: Gets $500MM Loan to Drive Initiatives P U E R T O R I C O EASY RENTAL: Case Summary & Seven Unsecured Creditors ERC MANUFACTURING: Seeks to Hire Milton Flores as Appraiser V E N E Z U E L A PDVSA: U.S. Judge Declares 2020 Bonds Valid - - - - - ================= A R G E N T I N A ================= ARGENTINA: Triple Setback for Milei as Congress Rejects Vetoes -------------------------------------------------------------- Buenos Aires Times reports that lawmakers in Congress dealt President Javier Milei a triple blow, with both chambers voting to strike down his vetoes of bills previously approved by Congress. The Senate rejected a presidential veto of a bill defining the automatic distribution of ATN national Treasury contributions by an overwhelming opposition-led majority, according to Buenos Aires Times reports. That came less than 24 hours after the Milei administration saw two other vetoes rejected in the lower house Chamber of Deputies, the report notes. ATN vote was 59 in favor, nine against and three abstentions – a larger margin than when it gained preliminary approval on July 10, with 56 votes in favor, the report discloses. The veto was supported only by the La Libertad Avanza caucus and PRO senators Luis Juez, Carmen Alvarez Rivero and Francisco Paoltroni, the report says. Abstentions came from Mariana Juri and Rodolfo Suarez, the two Radical senators who answer to Mendoza Province Governor Alfredo Cornejo. The other came from Entre Rios senator and head of the PRO caucus, Alfredo De Angeli, the report relays. ATN funding, or Aportes del Tesoro Nacional, are special, non-automatic discretionary funds, created to assist provinces facing fiscal imbalances or emergency situations, the report discloses. The report relays that the opposition says the new bill, which was pushed by governors, ensures resources are allocated in a direct, transparent, equitable and predictable manner, avoiding the discretionary element that has historically marked their distribution. After breaking with governors at the end of June and this month's electoral defeat in Buenos Aires Province, the government has sought to rebuild bridges with provincial leaders in recent days, the report relays. But the die had already been cast in the upper house, the report relays. The lower house is normally less hostile territory for Milei, even though he has suffered defeats in the chamber – including two key ones, the report discloses. Paediatric Emergency, State Universities The ATN vote came less than 24 hours after the ruling party saw lawmakers in the lower house reject vetoes of bills that will boost funding for paediatric care and state universities, the report relays. As the Casa Rosada had feared, the opposition secured the required two-thirds majority in the Chamber of Deputies in both of those cases, the report notes. It marks the government's first major parliamentary defeat since its electoral loss in Buenos Aires Province earlier this month, the report says. The measures now head to the Senate for final approval. The upper house had yet to vote at press time, though the chamber has previously signed off on both bills by large majorities, the report discloses. The first vote concerned the declaration of a paediatric emergency in Argentina, focusing mainly on conditions facing staff at the prestigious Garrahan Children's Hospital, the report relays. Workers at the institution have walked off the job on repeated occasions in protest at working conditions and low pay, the report discloses. Milei's veto of the bill was rejected by 181 votes to 60, comfortably reaching the required majority, the report says. Minutes later, deputies turned their attention to the National Universities Funding Law, the report relays. A slightly lower margin, 174, voted to overturn the veto with 67 opposed, the report notes. As the vote concluded at the end of a tense session, opposition lawmakers rose from their seats and broke into chants in defence of state higher education, the report discloses. Government sources said they expected a defeat, but not to the extent suffered, the report says. Both measures will again need a two-thirds majority in the Senate to secure their passage into law, the report relates. The string of legislative defeats hits the ruling party at the worst possible time – in the midst of a key election campaign. With the October 26 midterm elections looming, Milei tried to project strength with a nationally televised speech, presenting his 2026 Budget bill under the slogan "zero deficit," the report discloses. However, the political cost has been evident: each vote in Congress reflects the growing isolation of La Libertad Avanza. Parliamentary weakness is conditioning every step the Executive branch takes, the report adds. 'Demagoguery' The report notes that the Milei administration has reacted strongly to the string of congressional defeats. During a press conference, Presidential Spokesperson Manuel Adorni called for fiscal responsibility and accused Congress of "demagoguery." "It seems that the efforts made by the people to maintain fiscal balance and, of course, to set Argentina on a different path, a path of growth and a future, do not matter," complained Milei's top spokesperson, the report relays. The official took aim at the opposition: "Once again, the modus operandi of the caste has been exposed: zero interest in fiscal balance, obsession with destroying the economic plan that lifted millions of Argentines out of poverty and is destroying inflation month after month," the report notes. Adorni also referred to Marcha Federal protest: "March brought together all, absolutely all, the enemies of progress: the CGT, the CTA, ATE [unions], [Axel] Kicillof, the left, Kirchnerites disguised as other political parties and even Palestinian flag-bearers," the report relays. Milei's run of defeats in Congress comes after a brutal week on the markets. Argentina's dollar bonds posted some of the worst losses in emerging markets, putting them on track for the longest weekly rout since April as pressure on Milei's government continues to build, the report says. Investors had hoped midterm elections next month would boost Milei's support in Congress enough to push his economic reform agenda forward, the report relays. But with his disapproval ratings on the rise, the economy contracting and a string of political setbacks – from corruption scandals to pushback from lawmakers — traders began ditching the country's assets, the report notes. Milei's administration was forced to intervene in the currency markets as the peso weakened against the dollar, surpassing the limits of a band imposed to limit the weakening of the national currency, the report adds. About Argentina Argentina is a country located mostly in the southern half of South America. Its capital is Buenos Aires. Javier Milei is the current president of Argentina after winning the November 19, 2023 general election. He succeeded Alberto Angel Fernandez in the position. Argentina has the third largest economy in Latin America. The country's economy is an upper middle-income economy for fiscal year 2019, according to the World Bank. Historically, however, its economic performance has been very uneven, with high economic growth alternating with severe recessions, income maldistribution and in the recent decades, increasing poverty. In March 2022, the International Monetary Fund (IMF) approved a 30-month arrangement under an Extended Fund Facility for Argentina in the amount of SDR 31.914 billion (equivalent to US$44 billion, or 1000 percent of quota) -- with an approved immediate disbursement of an equivalent of US$9.65 billion. Argentina's IMF-supported program sought to improve public finances and start to reduce persistent high inflation through a multi-pronged strategy. On April 11, 2025, the IMF further approved a 48-month Extended Fund Facility (EFF) arrangement for Argentina totaling US$20 billion (or 479 percent of quota), with an immediate disbursement of US$12 billion, and a first review planned for June 2025 with an associated disbursement of about US$2 billion. The program is expected to help catalyze additional official multilateral and bilateral support, and a timely re-access to international capital markets. Fitch Ratings, on May 12, 2025, upgraded Argentina's Long-Term Foreign-Currency and Local-Currency Issuer Default Rating (IDR) to 'CCC+' from 'CCC'. The upgrade reflects the launch of a new IMF program, among other things. S&P Global Ratings, in February 2025 lowered its local currency sovereign credit ratings on Argentina to 'SD/SD' from 'CCC/C' and its national scale rating to 'SD' from 'raB+'. Moody's Ratings, in January 2025, raised Argentina's local currency ceiling to B3 from Caa1 and the foreign currency ceiling to Caa1 from Caa3. DBRS, Inc. upgraded Argentina's Long-Term Foreign and Local Currency Issuer Ratings to B (low) from CCC in November 2024. =========== B R A Z I L =========== LD CELULOSE: Fitch Alters Outlook on 'BB-' LongTerm IDR to Positive ------------------------------------------------------------------- Fitch Ratings has affirmed LD Celulose S.A.'s (LDC) Long-Term Foreign and Local Currency Issuer Default Ratings (IDRs) at 'BB-' and National Scale Long-Term Rating at 'AA(bra)'. Fitch has also affirmed at 'BB-' the USD650 million senior secured notes due 2032 issued by LD Celulose International GmbH and unconditionally and irrevocably guaranteed by LDC and LD Florestal S.A (Florestal). The Rating Outlook on the corporate ratings was revised to Positive from Stable. The Positive Outlook reflects its expectation of faster deleveraging than projected, supported by improved operating efficiency and performance. Under current price assumptions, LDC can likely reduce net leverage below 3.0x by 2026 using FCF. The ratings are supported by LDC's strong operating performance, with competitive cost structure. LDC has limited scale and diversification, with a single dissolving wood pulp mill in Brazil. It is exposed to one counterparty risk, as Lenzing AG (Lenzing) is the sole offtaker. Key Rating Drivers Expected Leverage Reduction: Fitch expects LDC's leverage is to decrease as the company uses FCF to amortize debt. Net leverage reached 3.2x in 2024, from 4.4x in 2023, and is likely to continue its downward trend, reaching below 3.0x in 2026. Fitch expects net debt to decrease to about USD700 million by YE 2026, from USD918 million in December 2024. Limited Business Diversification: LDC has only one mill in Brazil, with a nominal annual production capacity of 500,000 tons of dissolving wood pulp (DWP) used to produce textile fibers. The company's limited scale of operations could make it vulnerable to a prolonged business interruption. The company has insurance policies covering business interruption as a safeguard against such events. Sustainable Competitive Advantage: LDC has one of the industry's lowest cost structures, arising from its state-of-the-art mill located in Brazil, with high forestry yield and low transportation costs and average distance from the forest to the mill. This will allow LDC to generate strong operating cash flows even in the case of market downturns, ensuring its long-term competitiveness. The company's cash cost was USD450/ton in 2024, which placed it firmly in the lowest quartile of the cost curve. Lenzing Is Sole Off-taker: LDC has an estimated market share of 7% of global of DWP, while Lenzing, one of its shareholders, is the third-largest global DWP producer, with an estimated market share of 13% including LDC production. LDC sales are concentrated in only one off-taker, Lenzing. Despite this long-term take-or-pay contract, the lack of diversification of clients exposes LDC to counterparty risk. Conversely, Lenzing trades in the market more than half of LDC production to other textile fiber producers, which are served directly by LDC. Lenzing has a leveraged capital structure, with net debt/EBITDA of 4x in 2024. Positive FCF: Fitch projects EBITDA of USD260 million in 2025 and USD271 million in 2026, with EBITDA margins between 48% and 49%. This compares with EBITDA of USD279 million in 2024, outperforming Fitch's projections. Base case scenario incorporates almost 600 thousand tons of production due to the company's capacity to further capture industrial and forestry management efficiencies and outstanding productivity of its wood. Fitch expects LDC to report positive FCF, around USD120 million per year in 2025 and 2026, and consider investments around USD50 million yearly and no dividends this year and in 2026, and USD5 million in 2027. Fitch's base case considers capex for maintenance and forestry base. Positive Market Dynamics: Despite a challenging 2025 due to global trade effects of tariffs imposed by the U.S., DWP market fundamentals remain solid. World DWP has shown a stable 5% demand growth since 2011, and demand is expected to continue growing at similar pace, outpacing the supply growth. This gap between demand and supply growth will support a steady price increase in the following years. Peer Analysis Similar to other Latin American pulp producers, LDC's pulp production cash costs are among the lowest in the world, ensuring its long-term competitiveness. LDC is rated lower than Latin America pulp companies like Suzano (BBB-/Positive), Empresas CMPC (BBB/Negative) and Celulosa Arauco (BBB/Negative), as the company has limited scale of operations, with only one mill located in Brazil and one offtaker, while these peers have a higher scale of operations and geographic diversification. LDC's smaller diversification is comparable with Eldorado's (BB/Stable), which also only has one mill. LDC is concentrated only in DWP and is therefore more exposed to the cyclicality of pulp prices compared with companies with higher product diversification like Klabin (BB+/Stable), Arauco, and CMPC, which are leaders in the packaging, wood products. and tissue markets, respectively. LDC has lower liquidity and financial access than these larger peers, which have longstanding proven and unsecured market access. Key Assumptions - Volumes in similar levels to those reached in 2024 going forward; - Average DWP of USD890 per ton in 2025, USD950 per ton in 2026 and 2027; - 99.5% standard grade DWP production from 2025 onward; - Dividend distribution according to the maximum allowed by year in the contract, starting in 2027. RATING SENSITIVITIES Factors That Could, Individually or Collectively, Lead to Negative Rating Action/Downgrade - Average net debt/EBITDA projected above 4.0x throughout the DPW price cycle; - Increase in short-term debt maturities above its cash flow generation capacity; - Disruptions on the take or pay contract with Lenzing, or a significant deterioration of the offtaker. Factors That Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade - Average net debt/EBITDA below 3.0x throughout the DWP price cycle; - Improved credit position of its offtaker. Liquidity and Debt Structure LDC had cash and marketable securities of USD87 million as of June 30, 2025 and total debt of USD970 million, of which USD73 million was due in the short term. The company has an extended debt maturity profile, with annual debt maturities around USD70 million and higher debt maturities only in 2029. Approximately 65% of the debts are bond, and the remainder is an amortizing syndicated loan. Financial flexibility is enhanced by a USD75 million unused revolving credit facility with the company's shareholders. The bond and bank loans are pledged by most of the company's assets as collateral, including 80% of its biological assets, which leaves LDC with limited financial flexibility to raise additional debt. Conversely, the company does not have any significant expansion plan in the medium term and no new debt is expected to be needed at its current production capacity. Issuer Profile LD Celulose S.A. (LDC) is a joint venture between the Austrian company Lenzing and the Brazilian company Dexco (BB/Stable). Located in Minas Gerais, Brazil, the plant has an nominal annual production capacity of 500,000 tons of dissolving wood pulp. 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 LD Celulose S.A. has an ESG Relevance Score of '4' [+] for Energy Management as the company sells excess energy to the grid from cogeneration based upon a renewable resource, which has a positive impact on the credit profile, and is relevant to the rating[s] in conjunction with other factors. 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 ----------- ------ ----- LD Celulose International GmbH senior secured LT BB- Affirmed BB- LD Celulose S.A. LT IDR BB- Affirmed BB- LC LT IDR BB- Affirmed BB- Natl LT AA(bra) Affirmed AA(bra) ===================== E L S A L V A D O R ===================== EL SALVADOR: IDB OKs $170MM-Loan to Supports Enhanced Services -------------------------------------------------------------- The Inter-American Development Bank (IDB) has approved a $170 million loan to help El Salvador bolster the economies of the Santa Tecla and La Libertad districts through a program to improve access to quality public services and urban infrastructure in both areas. The operation, which has been approved by the IDB's Board of Executive Directors, will particularly focus on revitalizing the municipal markets in Santa Tecla and La Libertad, making them universally accessible and climate-resilient. The program will also renew public spaces in these communities, including streets, parks, plazas, and green areas. The program supports small-scale merchants in expanding their productive and commercial capacity, and it promotes digital payment solutions. In addition, the loan will strengthen the institutional and financial capacities of the municipalities of Libertad Sur and Libertad Costa to better prepare them to successfully manage their urban growth. The interventions will directly benefit 2,000 small-scale merchants: 1,500 in Santa Tecla and 500 in La Libertad. The improved urban environment, better public services, and more dynamic economy will also positively affect approximately 1,800 residents of Santa Tecla and 2,500 of La Libertad. The improvements to infrastructure and amenities will also benefit domestic and international tourists. La Libertad's estimated 3.8 million annual visitors will enjoy safer, more orderly, and more attractive spaces. The IDB loan has a 25-year repayment term, a 5.5-year grace period, and an interest rate based on the Secured Overnight Financing Rate (SOFR). ============= J A M A I C A ============= JAMAICA: MSME Sector Faces Financing Challenges ----------------------------------------------- RJR News reports that the Planning Institute of Jamaica had disclosed that the MSME sector contributes forty per cent of GDP, employs more than a third of the labour force, and pays in excess of $80 billion in taxes. Despite this, however, the sector faces serious financing challenges, according to RJR News. As a result, PSOJ president Metry Seaga is urging the financial sector to rethink its rigid lending requirements and better support entrepreneurs, 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. RJRGLEANER COMMUNICATIONS: Gets $500MM Loan to Drive Initiatives ---------------------------------------------------------------- RJR News reports that the RJRGLEANER Communications Group says it recently obtained a $500 million loan to provide the liquidity needed to facilitate its turnaround programme, expected to bear results this year and next year. This, after the company lost $666 million and another $180 million during the first quarter of this year, according to RJR News. Speaking at a recent investor briefing, Group Chairman Joseph Matalon stressed that this 12-month turnaround process will be driven by its digital assets, which will be used to extract more value from members of the diaspora, the report notes. He also noted that its digital footprint includes 7.3 million followers and 66% share of the Jamaican online audience, the report adds. RJRGLEANER Communications Group is the leading media company operating from Jamaica but with footprints in USA and UK. ===================== P U E R T O R I C O ===================== EASY RENTAL: Case Summary & Seven Unsecured Creditors ----------------------------------------------------- Debtor: Easy Rental Holdings Inc. Barrio Vayas Torres Local Industrial 4 Ponce, PR 00731 Business Description: Easy Rental Holdings Inc. provides real estate support services in Puerto Rico, including property management and real estate appraisal for residential and commercial properties. Chapter 11 Petition Date: September 15, 2025 Court: United States Bankruptcy Court District of Puerto Rico Case No.: 25-04130 Debtor's Counsel: Wigberto Lugo Mender, Esq. LUGO MENDER GROUP, LLC 100 Carr 165 Suite 501 Guaynabo, PR 00968-8052 Tel: (787) 707-0404 E-mail: wlugo@lugomender.com Total Assets: $2,700,001 Total Liabilities: $6,169,099 Juan Carlos Teissonniere Quinones signed the petition as president. A full-text copy of the petition, which includes a list of the Debtor's seven unsecured creditors, is available for free on PacerMonitor at: https://www.pacermonitor.com/view/AAHEMDI/EASY_RENTAL_HOLDINGS_INC__prbke-25-04130__0001.0.pdf?mcid=tGE4TAMA ERC MANUFACTURING: Seeks to Hire Milton Flores as Appraiser ----------------------------------------------------------- ERC Manufacturing, Inc. seeks approval from the U.S. Bankruptcy Court for the District of Puerto Rico to employ Milton Flores as appraiser. Mr. Flores will provide appraisal services for the Debtor's machinery, equipment and commercial property located at Bo. Cedro Adbajo PR 14 KM 0.8, Naranjito, Puerto Rico. Mr. Torres will be paid a single flat amount of $3,000. He will also be reimbursed for reasonable out-of-pocket expenses incurred. Mr. Flores disclosed in a court filing that the firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. He can be reached at: Milton Flores Condado Monderno Development B-6 1st Street Caguas, PR About ERC Manufacturing, Inc. ERC Manufacturing Inc. owns the property located at Carr 814 Km 0.8 Cedro Abajo, Naranjito, Puerto Rico, spanning 6,977.84 square meters. It includes a two-story commercial office building, two metal concrete industrial buildings, 28 parking spaces, two offices, two terraces, two workshops, two mezzanines, and two bathrooms. The appraised value is $213,000, as of July 27, 2016. ERC Manufacturing Inc. sought relief under Chapter 11 of the U.S. Bankruptcy Code (Bankr. D.P.R. Case No. 25-00475) on February 4, 2025. In its petition, the Debtor reports total assets of $785,322 and total liabilities of $1,599,734. The Debtor is represented by Juan C. Bigas, Esq., in Ponce, Puerto Rico. ================= V E N E Z U E L A ================= PDVSA: U.S. Judge Declares 2020 Bonds Valid ------------------------------------------- globalinsolvency.com, citing Reuters, reports that a U.S. judge upheld the validity of Venezuelan state oil company PDVSA's 2020 bonds, in a blow to the company, which had argued that the defaulted bonds were not properly issued. The bonds are secured by a majority stake in U.S. refiner Citgo , which is owned by PDVSA. The company defaulted on the bonds in 2019, putting the refiner at risk of seizure by creditors, according to globalinsolvency.com. U.S. District Judge Katherine Polk Failla in Manhattan ruled that the bonds were indeed properly issued under Venezuelan law, the report adds. About PDVSA Founded in 1976, Petroleos de Venezuela, S.A. (PDVSA) is the Venezuelan state-owned oil and natural gas company, which engages in exploration, production, refining and exporting oil as well as exploration and production of natural gas. It employs around 70,000 people and reported $48 billion in revenues in 2016. In May 2019, Moody's Investors Service withdrew all the ratings of Petroleos de Venezuela, S.A. including the senior unsecured and senior secured ratings due to insufficient information. At the time of withdrawal, the ratings were C and the outlook was stable. Citgo Petroleum Corporation (CITGO) is Venezuela's main foreign asset. CITGO is majority-owned by PDVSA. CITGO is a United States-based refiner, transporter and marketer of transportation fuels, lubricants, petrochemicals and other industrial products. However, CITGO formally cut ties with PDVSA at about February 2019 after U.S. sanctions were imposed on PDVSA. The sanctions are designed to curb oil revenues to the administration of President Nicolas Maduro and support for the Juan Guaido-headed party. ********* S U B S C R I P T I O N I N F O R M A T I O N Troubled Company Reporter-Latin America is a daily newsletter co-published by Bankruptcy Creditors' Service, Inc., Fairless Hills, Pennsylvania, USA, and Beard Group, Inc., Washington, D.C., USA, Marites O. Claro, Joy A. Agravante, Rousel Elaine T. Fernandez, Julie Anne L. Toledo, Ivy B. Magdadaro, and Peter A. Chapman, Editors. Copyright 2025. All rights reserved. ISSN 1529-2746. This material is copyrighted and any commercial use, resale or publication in any form (including e-mail forwarding, electronic re-mailing and photocopying) is strictly prohibited without prior written permission of the publishers. Information contained herein is obtained from sources believed to be reliable, but is not guaranteed. 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