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251029.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 Wednesday, October 29, 2025, Vol. 26, No. 216 Headlines B E R M U D A NORTHEAST INSURANCE: Chapter 15 Case Summary B O L I V I A BOLIVIA: Next President Paz Targets Pragmatic Path Out of Crisis BOLIVIA: To Restore US Ties Cut Nearly Two Decades Ago, Says Paz D O M I N I C A N R E P U B L I C [] DOMINICAN REPUBLIC: Raises US$1.6BB Through Sovereign Bonds E C U A D O R BANCO BOLIVARIANO: Fitch Affirms 'CCC+/C' Issuer Default Ratings BANCO DEL AUSTRO: Fitch Affirms 'CCC+/C' Issuer Default Ratings BANCO GUAYAQUIL: Fitch Affirms 'CCC+/C' Issuer Default Ratings BANCO PICHINCHA: Fitch Affirms 'CCC+/C' Issuer Default Ratings BANCO PROCREDIT: Fitch Affirms 'B' Issuer Default Ratings PRODUBANCO: Fitch Affirms 'B-/B' Issuer Default Ratings J A M A I C A JAMAICA: S&P Warns of Rising Banking Risks Amid Slow Growth P U E R T O R I C O CABALLITO LLC: Hires Rodriguez Espola LLC as Accountant S U R I N A M E SURINAME: Moody's Assigns Caa1 Rating to New USD Bond Issuance - - - - - ============= B E R M U D A ============= NORTHEAST INSURANCE: Chapter 15 Case Summary -------------------------------------------- Chapter 15 Debtor: Northeast Insurance Company Limited Clarendon House 2 Church Street Hamilton HM 11 Bermuda Business Description: Northeast Insurance Company Limited, incorporated in Bermuda on Dec. 16, 1975, provides insurance and reinsurance coverage for medical malpractice, general and auto liability, property deductible, directors' and officers' liability, and workers' compensation risks, primarily serving hospitals, camps, nursing homes, and other not-for- profit institutions associated with UJA/Federation of Jewish Philanthropies of New York. The Company operates as a Class 2 insurer under Bermuda's Insurance Act 1978. Chapter 15 Petition Date: October 15, 2025 Court: United States Bankruptcy Court Southern District of New York Case No.: 25-12275 Judge: Hon. Judge Michael E. Wiles Foreign Representatives: Michael Morrison and Mark Allitt of TENEO (BERMUDA) LTD 19 Par-la-ville Road, 3rd Floor Hamilton HM 11 Bermuda Foreign Proceeding: Supreme Court of Bermuda Companies (Winding Up) Commercial Court 2025: No. 252 Foreign Representatives' Coulsel: Glenn S. Walter, Esq. HONIGMAN LLP 2290 First National Building 660 Woodward Avenue Detroit, MI 48226-3506 Tel: (313) 465-7712 Email: gwalter@honigman.com Estimated Assets: Unknown Estimated Debt: Unknown A full-text copy of the Chapter 15 petition is available for free on PacerMonitor at: https://www.pacermonitor.com/view/KX7CV2Q/Northeast_Insurance_Company_Limited__nysbke-25-12275__0001.0.pdf?mcid=tGE4TAMA ============= B O L I V I A ============= BOLIVIA: Next President Paz Targets Pragmatic Path Out of Crisis ---------------------------------------------------------------- Buenos Aires Times reports that fresh off winning the election, Bolivia's next president Rodrigo Paz is blazing a rare centrist path out of his country's economic crisis, focusing on practical policies over ideological divisions engulfing its neighbors. The folksy president-elect maintains friendly terms with a range of politicians whose support he'll need to rescue this landlocked nation from economic ruin, according to Buenos Aires Times. And he's not shy about mending ties with the United States and other countries shunned by his predecessors. Amid scarce fuel and dollars, the stakes are high for Bolivia's first centrist leader in a generation, the report relates. His victory drew a range of nods, notably a grudging acknowledgement from rabble-rousing former president Evo Morales at home and a hearty congratulations from Venezuela's conservative opposition leader María Corina Machado abroad, the report notes. Heading into his November 8 inauguration, Paz's first test will be to replenish fuel supply that the outgoing administration of Luis Arce ran out of money to pay for, the report says. He plans to surge in fuel through deferred payments while awaiting dollar injections from multilateral lenders and other foreign sources, said José Gabriel Espinoza, economic adviser to his Partido Demócrata Cristiano (Democratic Christian Party, PDC), the report discloses. "You don't need dollars when you make a deferred payment," Espinoza told reporters. "The problem with waiting for the dollars is that the fuel doesn't arrive," he added. Paz's team is in talks with the US as well as Brazil, Argentina, Paraguay and Uruguay to secure emergency supplies, Espinoza said, the report points out. "The US is working with us to facilitate supply routes. The commitment was reaffirmed by Deputy Secretary of State Christopher Landau," he said. The PDC is developing plans to set up a "stabilisation fund" and allow the private sector to import fuel. In the meantime the task will be overseen by state-owned energy company YPFB, he added. The US State Department didn't immediately respond to a request for comment. However, the office released a statement congratulating Paz on his victory "after two decades of mismanagement," the report relates. Bolivia normally imports fuel through neighbouring Chile with which it broke diplomatic relations in 1978 because of a longstanding dispute over sovereign access to the Pacific, he report notes. Paz won the run-off with 54.4 percent of the vote, defeating right-wing rival Jorge 'Tuto' Quiroga of Alianza Libre, who conceded defeat, the report discloses. "Bolivia is breathing winds of change," Paz said in his victory speech. He proclaimed the backing of three other parties in Congress – Libre, Unidad and Súmate – enabling him to pass laws to access international credit and reform the energy and mining sectors to attract foreign investment, the report notes. Paz hasn't ruled out the possibility of resorting to the International Monetary Fund, a touchy recourse in Latin America because of orthodox policy trade-offs, the report relays. In a press conference, he said his team is already preparing an initial financial lifeline from regional development banks CAF and Fonplata, the report discloses. "Gradualism requires time. Time requires financing. Financing requires credibility. And none of that is guaranteed," wrote Jonathan Fortun, senior economist at the Institute of International Finance, the report adds. "The question is not if Paz will turn to the IMF, but how long he can pretend not to," Fortun added. The report relays that Bolivia could move to a single, market-driven dollar exchange rate by January, Espinoza said. He also mentioned plans to restructure government spending and halve this year's estimated 10 percent fiscal deficit in 2026. The Paz administration plans to rejuvenate Bolivia's gas industry by reopening dormant production wells before implementing structural reforms, including possible changes to the state-oriented hydrocarbons law and even the constitution, Espinoza said, the report relates. "For the next six months things are going to look very positive. Many political actors in Bolivia are excited about the chance to move on from the MAS era," said James Bosworth, founder of the political risk firm Hxagon, the report notes. This honeymoon may not last long, he added, as political and personal differences emerge, possibly threatening the existing legislative coalition between Paz’s party and others, the report says. Crucially, Morales accepted the run-off results, attributing Paz's victory to his supporters' votes. "Paz and Lara won with the evista vote," he posted on X, referring to his supporters. "But that doesn't give them a blank cheque. The new government must consult the people," the report relates. Paz dismissed any formal alliance with Morales. When asked about the former president’s remarks, Vice-president-elect Edmand Lara said only that the party is “grateful to everyone who supported us.” Paz is likely to keep his distance from the coca leader who ran Bolivia for a turbulent 13 years, the report notes. “I think if Rodrigo Paz is smart politician, and he’s proven to be, he won’t form an alliance with Evo Morales,” Bosworth said. In his victory speech, Paz struck a pragmatic tone, a sharp contrast with the fiery evista rhetoric that lost popular resonance in recent years as hardship grew, the report relays. “Ideology doesn’t put food on the table,” Paz told jubilant supporters. “What does is the right to work, strong institutions, legal security and private property.” But after two decades of socialist rule, weary Bolivians are longing for results, the report says. “I know it won’t be easy, because of the way this government has left us,” said Yenny Rojas, 60, a street vendor in the political capital of La Paz. “He has a lot of work to do. God help him. It won’t be this year, maybe two years. We have to learn to wait,” he added. As reported in the Troubled Company Reporter-Latin America in June 2025, S&P Global Ratings lowered its long-term foreign and local currency sovereign credit ratings on Bolivia to 'CCC-' from 'CCC+'. The outlook on the long-term ratings is negative. S&P also affirmed its 'C' short-term foreign and local currency sovereign credit ratings. At the same time, S&P revised its transfer and convertibility assessment to 'CCC-' from 'CCC+'. BOLIVIA: To Restore US Ties Cut Nearly Two Decades Ago, Says Paz ---------------------------------------------------------------- Buenos Aires Times reports that Bolivia's new pro-business president-elect vowed to renew diplomatic ties with Washington after the country veered right after nearly two decades under socialist rule blamed by many for its myriad economic woes. Rodrigo Paz, a 58-year-old economist-turned senator, emerged victorious in a run-off election, beating fellow right-wing rival Jorge 'Tuto' Quiroga after a first voting round in August saw the socialist MAS party founded by ex-leader Evo Morales ousted from the race, according to Buenos Aires Times. In his victory speech, Paz proclaimed Bolivia was "reclaiming its place on the international stage," the report relates. And, he told reporters Bolivia's relationship with the United States "will be resumed" nearly 20 years after Morales kicked out Washington's ambassador, the report notes. "We have been talking with the US government in particular. I believe this is very important," he said. Paz is set to take office on November 8 facing an uphill task, the report relays. Bolivia's economy is in recession, according to the World Bank, and long queues for fuel have become a way of life, the report says. Dollars are in short supply and annual inflation is over 20 percent, the report discloses. Under Morales, in office from 2006 to 2019, Bolivia took a sharp turn to the left – nationalising energy resources, breaking ties with Washington and making alliances with China, Russia and fellow leftists in Cuba, Venezuela and elsewhere in Latin America, the report points out. In 2008 Morales expelled the US ambassador and officials of the US Drug Enforcement Administration (DEA), accusing them of interference in Bolivia's affairs. USAID officials followed in 2013, the report recalls. Washington expelled Bolivia's ambassador in retaliation, and the envoys were never replaced, the report relates. Paz's election victory was welcomed by US Secretary of State Marco Rubio, who said in a statement Washington "stands ready to partner with Bolivia on shared priorities," the report notes. Rubio added that "after two decades of mismanagement, President-elect Paz's election marks a transformative opportunity for both nations," the report says. Paz said he had also received a congratulatory message from US President Donald Trump, who is embroiled in bitter public feuds with Latin American leftists including Venezuela's Nicolás Maduro and Gustavo Petro of Colombia, the report relates. 'Capitalism for All' On the campaign trail, the Christian Democratic Party candidate had vowed a "capitalism for all" approach to economic reform, with decentralisation, lower taxes and fiscal discipline mixed with continued social spending, the report notes. He promised to maintain social programmes while stabilising the economy, but economists have said the two things are not possible at the same time, the report relays. Paz said his interim government has had talks with US Deputy Secretary of State Chris Landau about measures to find a solution to Bolivia's fuel shortage "along with friendly countries like Brazil, Uruguay, Paraguay, and Argentina," the report says. The election closed out an economic experiment marked by initial prosperity funded by Morales's nationalisation of natural gas reserves, the report discloses. The boom was followed by bust, notably with critical shortages of fuel and foreign currency under outgoing leader Luis Arce, the report points out. Successive governments under-invested in the hydrocarbons sector, once the backbone of the economy, the report notes. Production plummeted and Bolivia almost depleted its dollar reserves to sustain a universal subsidy for fuel that it can no longer afford to import, the report relays. As reported in the Troubled Company Reporter-Latin America in June 2025, S&P Global Ratings lowered its long-term foreign and local currency sovereign credit ratings on Bolivia to 'CCC-' from 'CCC+'. The outlook on the long-term ratings is negative. S&P also affirmed its 'C' short-term foreign and local currency sovereign credit ratings. At the same time, S&P revised its transfer and convertibility assessment to 'CCC-' from 'CCC+'. =================================== D O M I N I C A N R E P U B L I C =================================== [] DOMINICAN REPUBLIC: Raises US$1.6BB Through Sovereign Bonds -------------------------------------------------------------- Dominican Today reports that the Dominican government, via the Ministry of Finance and Economy, successfully issued US$1.6 billion in sovereign bonds on international markets with a 10-year maturity and a yield of 5.875%, fully covering its external financing needs for fiscal year 2025. The offering attracted demand exceeding US$5 billion—over three times the amount issued—demonstrating strong investor confidence in the Dominican economy and its prudent fiscal and monetary management, according to Dominican Today. Finance Minister Magín Díaz highlighted that the results confirm the country's reliability as an issuer in emerging markets, especially amid global financial volatility and high-interest rate pressures, the report notes. He also noted that the country’s risk, measured by the JP Morgan EMBI index, is at a historic low of around 200 basis points, reflecting international trust in the nation’s macroeconomic stability, fiscal discipline, central bank management, and institutional stability, the report relays. Deputy Minister of Public Credit María José Martínez emphasized that the oversubscription and favorable rate underscore investor confidence and provide resources to boost public investment in key sectors, including transportation, energy, water, health, and education, the report discloses. The funds will be allocated according to the 2025 General State Budget Law, supporting infrastructure and other capital projects while reinforcing sustainable fiscal management, the report says. This issuance positions the Dominican Republic as one of Latin America’s most consistent and competitive sovereign bond issuers despite the challenging global financial environment, the report adds. 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 C U A D O R ============= BANCO BOLIVARIANO: Fitch Affirms 'CCC+/C' Issuer Default Ratings ---------------------------------------------------------------- Fitch Ratings has affirmed Banco Bolivariano C.A.'s (Bolivariano) Long-Term Issuer Default Rating (IDR) and Short-Term IDR at 'CCC+' and 'C', respectively. It has also affirmed its Viability Rating (VR) at 'ccc+'. Fitch typically does not assign Rating Outlooks to issuers rated 'CCC+' or below. Fitch has also affirmed Bolivariano's Government Support Rating at 'ns'. Key Rating Drivers Operating Environment Caps Ratings: Bolivariano's VR drives its IDR, but the ratings are capped by Fitch's 'ccc+' operating environment (OE) score for Ecuador, which is aligned with the sovereign rating. The OE reflects ongoing economic challenges, including insecurity and regulatory constraints. Despite OE pressures, banks remain resilient, with moderate asset quality deterioration, improved profitability and stable capitalization and liquidity. This resilience is supported by conservative lending and excess liquidity, which have allowed sustained net interest margins. Fitch expects pressures to persist but lessen as economic conditions stabilize. GDP per capita and Operational Risk Index (ORI) are projected to remain stable, supporting the current OE score. Fitch does not rule out further asset-quality deterioration; however, any impact on banks' overall financial profiles is expected to be limited. Consistent Business Profile: Bolivariano's business profile is underpinned by its consistent business model. The model is focused on lower-risk segments, which allows the bank to weather credit cycles. Commercial loans accounted for 69.6% of total loans as of 3Q25. Strong customer relationships ensure consistent total operating income despite the bank's moderate market position in Ecuador. As of September 2025, Bolivariano was fifth in terms of assets (8%) and sixth in terms of loans (8.3%) and deposits (7.7%). Strong Risk Profile: Fitch believes Bolivariano's risks are adequately handled, supported by the bank's low risk appetite compared to peers and appropriate risk management. Although the bank exhibits high concentration by borrower and geography, its consistent focus on lower-risk borrowers and segments, together with sound underwriting standards, has proven to be effective and has consistently resulted in adequate and stable financial metrics. Good Asset Quality: Fitch views Bolivariano's asset quality as good, characterized by a low past-due loan (PDL) ratio that aligns with its conservative business model and risk appetite. While loan concentrations are high, these risks are mitigated by ample loan-loss provisions and strong guarantee coverage. As of 3Q25, the 30-day PDL ratio increased to 1.7% from 0.8% at YE24, but remains below peers and the Ecuadorian banking system average of 3.2%. The deterioration primarily reflects pressures in the retail segment. For YE25, Fitch expects retail sector challenges to persist, exerting a slight pressure on PDLs; however, the 30-day PDL ratio is anticipated to remain below 2%. Stable Profitability Ratios: Bolivariano's profitability remains consistent, supported by effective management of the net interest margin (NIM), good loan portfolio quality, and controlled expenses. Although the net interest margin (NIM) declined, the bank defended operating profitability through other operating income and cost discipline. As of 3Q25, the operating profit-to-risk-weighted assets (RWAs) ratio slightly decreased to 1.6% from 1.7% at YE24, reflecting a 7.3% increase in RWAs that modestly pressured the ratio. For YE25, Fitch anticipates operating profit/RWAs will remain stable. Although the NIM should stay broadly unchanged, Bolivariano's operating profit is set to be underpinned by forecast loan growth, controlled impairment charges, and disciplined administrative expenses. Adequate Capitalization Levels: Bolivariano's capitalization is adequate due to the bank's business model. Levels have remained stable due to internal capital generation and a historical earnings retention rate of approximately 70%. As of 3Q25, the Fitch Core Capital (FCC)-to-RWAs ratio was 10.7%, reflecting stability through economic cycles (four-year average: 10.7%). For YE25, Fitch expects the FCC ratio to remain stable, and while internal capital generation is set to increase, anticipated loan growth should offset the improvement. Stable Funding and Ample Liquidity: Bolivariano's funding profile is adequate and stable. The loans-to-customer-deposits ratio was sound at 93.5% as of 3Q25. The bank also has access to debt capital markets and wholesale funding. Consistent with its business profile, Bolivariano exhibits high deposit concentration, with the 20 largest depositors accounting for 17.4% of total deposits as of 1H25. This risk is mitigated by an adequate level of liquid assets: cash and securities represented 40.9% of total customer deposits as of 3Q25. The bank also maintains credit lines with local and foreign financial institutions to complement its liquidity. GOVERNMENT SUPPORT RATING The GSR of 'ns' reflects that despite Bolivariano's moderate market share and local franchise, Fitch believes that there is no reasonable assumption of support being forthcoming from the sovereign. This is due to Ecuador's limited financial flexibility and the lack of a lender of last resort. Rating Sensitivities Factors that Could, Individually or Collectively, Lead to Negative Rating Action/Downgrade - The IDRs are sensitive to changes in the sovereign rating or to further deterioration of the local operating environment; - The IDRs and VR could be downgraded if there is significant deterioration in the bank's business and financial profiles, although downside potential is somewhat limited given the low VR level imposed by the sovereign constraint; - The GSR has no downgrade potential as it is at the lowest possible level. Factors that Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade - Bolivariano's rating upside potential is limited. In the long term, an upgrade would require improved prospects for the operating environment and a meaningful and sustained improvement in the bank's core profitability and capital ratios; - The government of Ecuador's propensity or ability to provide timely support to Bolivariano is not likely to change given the sovereign's low sub-investment-grade IDR. As such, the GSR has no upgrade potential. VR ADJUSTMENTS The VR has been assigned below the implied VR due to the following adjustment reason(s): OE/Sovereign Rating constraint (negative). The OE score has been assigned below the implied score due to the following adjustment reason: Sovereign Rating (negative). Sources of Information - Banco Bolivariano's webpage and audited financial statements; - Superintendencia de Bancos del Ecuador. 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 Bolivariano C.A. LT IDR CCC+ Affirmed CCC+ ST IDR C Affirmed C Viability ccc+ Affirmed ccc+ Government Support ns Affirmed ns BANCO DEL AUSTRO: Fitch Affirms 'CCC+/C' Issuer Default Ratings --------------------------------------------------------------- Fitch Ratings has affirmed Banco del Austro S.A.'s (Austro) Long-Term Issuer Default Rating (IDR) at 'CCC+', Short-Term IDR at 'C' and Viability Rating (VR) at 'ccc+'. Fitch has also affirmed the Government Support Rating (GSR) at 'ns'. Key Rating Drivers Operating Environment (OE) with High Influence: Austro's VR drives its IDR, but the ratings are capped by Fitch's 'ccc+' OE score for Ecuador, aligned with the sovereign rating. The OE reflects persistent economic challenges, including insecurity, and regulatory constraints. Despite OE pressures, banks remain resilient, with moderate asset quality deterioration, improved profitability, and stable capitalization and liquidity, supported by conservative lending and excess liquidity that allows sustained net interest margins. Fitch expects pressures to persist but lessen amid steadier economic conditions. GDP per capita and Operational Risk Index (ORI) are projected to remain stable, supporting current OE score. Fitch does not rule out asset quality deterioration, though any impact on banks' overall financial profiles is expected to be limited. Moderate Franchise and Business Model: Austro's business profile reflects its position as the seventh-largest bank in Ecuador by assets (4.5% as of 3Q25) and its diversified loan portfolio. Consumer loans represent 63.0% of total loans, followed by commercial loans (33.8%) and mortgages (3.2%). The bank's business model has shown resilience through economic cycles, supporting moderate and consistent earnings generation. This is evidenced by its four-year (2021-2024) average total operating income (TOI) of USD134 million. Stable Asset Quality but Vulnerable to OE Risks: Austro's asset quality remains stable, with a regulatory impaired loans ratio of 3.1% in 3Q25, close to its four-year average. The 90-day impaired loans ratio improved to 2.2%, supported by stronger collections, conservative underwriting, and enhanced risk controls, helping offset OE challenges like high interest rates and social insecurity. Regulatory relief measures in late 2024 and 2025 also supported asset quality. Fitch expects some deterioration once relief measures expire, driven by ongoing OE risks and potential adverse effects from droughts and power outages anticipated toward YE 2025. Nonetheless, the impact is expected to be limited, supported by reduced political uncertainty and stronger economic growth compared to 2024. However, potential deterioration could also stem from adverse effects of droughts and power outages anticipated toward the YE 2025. Stable Margins Support Profitability Growth: Austro's profitability improved in 2025, driven by higher interest income, lower funding costs due to excess liquidity, controlled impairment charges, and efficient operational spending. As of 3Q25, its operating profit to risk weighted assets (RWA) ratio rose to 1.7%, more than doubling from 0.75% at YE 2024. The bank also benefited from strong performance in consumer lending, which supported a rise in net interest margin (NIM) to 5.9%, up from 5.3%. Fitch expects profitability to remain stable, supported by a steady NIM, moderate balance sheet growth, and disciplined operational expense management. While potential pressures could arise from a sharper-than-expected decline in loan interest rates and higher impairment charges, especially if asset quality deteriorates, Fitch does not anticipate a material impact on profitability metrics. Lower Capitalization Levels: Austro's capitalization remains adequate for its business model, with a Fitch Core Capital (FCC) to RWA ratio of 9.4% and a regulatory capital ratio of 10.7% as of 3Q25. While these figures are below system averages, the decline in ratios was mainly due to a 13.8% expansion in the bank's balance sheet, which increased RWAs. Current regulations limit the inclusion of profits in capital, allowing only 50% of realized net income. Fitch expects capitalization to improve by YE 2025, supported by moderate growth and continued profit retention. No material deterioration is anticipated, as internal capital generation is expected to remain sufficient to support expansion. Strong Liquidity Supports Funding Stability: Austro's funding structure remains solid, with customer deposits accounting for 91.4% of total funding as of 3Q25. Its loans-to-deposits ratio stood at 69.9%, well below the system average of 88.1%, supported by strong deposit growth outpacing loan growth. This reflects excess liquidity at the system level and has helped Austro maintain a healthy funding profile. The bank consistently exceeds regulatory liquidity requirements. However, its limited allocation of liquid assets to investment-grade international issuers (approximately 5% of securities portfolio) is viewed as a weakness compared to the largest banks. Given Austro's moderate growth outlook, with similar projected increases in loans and deposits, the loans-to-deposits ratio is expected to remain stable, with slight improvements for 2025 and 2026. Rating Sensitivities Factors that Could, Individually or Collectively, Lead to Negative Rating Action/Downgrade For the IDRs and VR: - The IDRs are sensitive to changes in the sovereign rating, or further deterioration within the local operating environment; - The IDRs and VR could be downgraded if there is significant deterioration in the banks' intrinsic credit profile, although downside potential due to intrinsic financial deterioration is somewhat limited, given the low VR level imposed by the sovereign constraint. For the GSR: - The GSR has no downgrade potential, as it is at the lowest possible level. Factors that Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade For the IDRs and VR: - Austro's upside potential is limited. In the long term, a rating upgrade would require improved prospects for the operating environment, a meaningful and sustained increase in the bank's core profitability, and enhancements in the bank's credit quality and capitalization. For the GSR: - Ecuador's propensity or ability to provide timely support to Austro is not likely to change given the sovereign's low sub-investment-grade IDR. As such, the GSR has no upgrade potential. Austro's GSR of 'ns' (no support) reflects Fitch's view that, notwithstanding the bank's market share and local franchise, there is no reasonable assumption of support from the sovereign due to Ecuador's limited financial flexibility and the lack of a lender of last resort. VR ADJUSTMENTS The VR of 'ccc+' has been assigned below the 'b-' implied VR due to the following adjustment reason: Operating Environment (negative). Fitch has assigned an Operating Environment score of 'ccc+' that is below the 'b' category implied score due to the following adjustment reason: Sovereign Rating (negative). Sources of Information - Banco del Austro S.A. - Superintendencia de Bancos del Ecuador ESG Considerations Unless otherwise disclosed in this section, the highest level of ESG credit relevance is a score of '3'. This means ESG issues are credit-neutral or have only a minimal credit impact on the entity, either due to their nature or the way in which they are being managed by the entity. Entity/Debt Rating Prior ----------- ------ ----- Banco del Austro S.A. LT IDR CCC+ Affirmed CCC+ ST IDR C Affirmed C Viability ccc+ Affirmed ccc+ Government Support ns Affirmed ns BANCO GUAYAQUIL: Fitch Affirms 'CCC+/C' Issuer Default Ratings -------------------------------------------------------------- Fitch Ratings has affirmed Banco Guayaquil S.A.'s (Guayaquil) Long-Term Issuer Default Rating (IDR) at 'CCC+', Short-Term IDR at 'C' and Viability Rating (VR) at 'ccc+'. Fitch has also affirmed Guayaquil's Government Support Rating (GSR) at 'ns'. Key Rating Drivers Operating Environment with High Influence: Guayaquil's VR drives its IDR, but the ratings are capped by Fitch's 'ccc+' operating environment (OE) score for Ecuador, which is aligned with the sovereign rating. The OE reflects ongoing economic challenges, including insecurity and regulatory constraints. Despite OE pressures, banks remain resilient, with moderate asset quality deterioration, improved profitability and stable capitalization and liquidity. This resilience is supported by conservative lending and excess liquidity, which have allowed sustained net interest margins. Fitch expects pressures to persist but lessen as economic conditions stabilize. GDP per capita and Operational Risk Index (ORI) are projected to remain stable, supporting the current OE score. Fitch does not rule out further asset-quality deterioration; however, any impact on banks' overall financial profiles is expected to be limited. Strong Franchise and Business Model: Fitch's 'b' score for Guayaquil's business profile reflects its position as the third largest bank in the Ecuadorian financial system, with a market share of 12.5% by assets as of 3Q25, and its diversified loan portfolio with commercial loans accounting for 55.9% of total loans, 40.3% of consumer loans and 3.7% of mortgages. The bank's business model has remained stable over time; it has a long track record of stable, resilient earnings across economic cycles. However, Guayaquil's total operating income (TOI) four-year average of USD544 million is almost three times lower than the market leader. Strong Asset Quality Amid OE Risks: Guayaquil's regulatory impaired loans ratio increased to 2.6% as of 3Q25, up from a four-year average of 1.9%, mainly due to OE challenges affecting its consumer loan portfolio. The 90-day impaired loans ratio also rose slightly to 1.3% in 2Q25 from 1.0% at year-end 2024. Despite these pressures, Guayaquil's conservative underwriting standards and solid risk controls have helped mitigate the impact of high interest rates and ongoing, systemwide social unrest. Regulatory relief measures in late 2024 and into 2025 provided limited support, given their small scale and near-full amortization. Fitch expects some system-wide asset quality deterioration as relief measures expire, driven by ongoing OE risks. However, the impact on Guayaquil's asset quality score is expected to be minimal, supported by the bank's conservative underwriting standards and the limited scope of reliefs granted, allowing the bank to maintain its current asset quality 'b' score. Improvements in Profitability Levels: Fitch upgraded Guayaquil's earnings and profitability score to 'b' from 'b-'as the bank's profitability has strengthened due to a combination of factors, including higher interest income from loan expansion, lower funding costs — driven by excess systemic liquidity that has reduced financial expenses — controlled impairment charges, and improved efficiency resulting from disciplined operational spending. As of 3Q25, the operating profit-to-risk-weighted assets (RWA) ratio rose to 2.3%, up from 2.0% at year-end 2024. Fitch expects Guayaquil's profitability ratios to remain broadly stable in 2025, supported by a resilient net interest margin (NIM), controlled operating expenses, and double-digit balance sheet growth. While potential pressures could arise from a sharper-than-expected decline in loan interest rates and higher impairment charges — especially if asset quality deteriorates — Fitch does not anticipate a material impact on profitability metrics. Even with these risks, profitability levels are expected to remain commensurate with Guayaquil's current 'b' score. Strong Capitalization Ratios: Fitch upgraded Guayaquil's capitalization and leverage score to 'b' from 'b-'. Guayaquil's FCC ratio was 12.4% at 3Q25, adequate and remaining consistently above some similarly sized peers, despite that under current regulation realized net profits during the year only compute 50% in regulatory capital. The regulatory capital ratio was 13.8% at 3Q25, well above the 9.0% minimum, and mainly Tier I (about 80%). Guayaquil maintains a 50% maximum payout to support internal capital generation and retained 50% of 2024 net profits. Fitch expects capitalization ratios to improve by year-end 2025. Given moderate balance sheet expansion and improved profitability, with an expected 50% earnings retention to support growth, capitalization ratios are also projected to remain stable in 2026. As such, Guayaquil's capitalization metrics are expected to remain commensurate with its current 'b' score in the medium term. Strong Liquidity Supports Ample Funding Levels: Guayaquil's liquidity position is conservative. The loans-to-deposits ratio remained sound at 93.1% at 3Q25, supported by systemic excess liquidity. Customer deposits remain the primary funding source (84.7% at 3Q25), complemented by solid access to wholesale and capital markets. Around 80% of the securities portfolio is invested in international investment-grade issuers (considered more liquid than domestic instruments) and 13% in sovereign bonds (0.3x of FCC). The bank also maintains committed credit lines with international and local institutions and has a diversified payment rights (DPR) program as an alternative funding source. Given Guayaquil's projected double-digit deposit growth, the loans-to-deposits ratio is expected to remain stable, with slight improvements in 2025 and 2026. Overall, liquidity and funding metrics are expected to remain adequate, supporting its current 'b' score. Rating Sensitivities Factors that Could, Individually or Collectively, Lead to Negative Rating Action/Downgrade IDRs and VR: - The IDRs are sensitive to changes in the sovereign rating or to further deterioration within the local OE; - The IDRs and VR could be downgraded if there is significant deterioration in the banks' intrinsic credit profile, although downside potential due to intrinsic financial deterioration is somewhat limited given the low VR level imposed by the sovereign constraint. GSR: - The GSR has no downgrade potential as it is at the lowest possible level. Factors that Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade IDRs and VR: - Guayaquil's upside potential is limited. In the long term, a rating upgrade would require improved prospects for the OE and a meaningful and sustained improvement in the bank's core profitability, along with improvement in the bank's credit quality and capitalization. GSR: - Ecuador's propensity or ability to provide timely support to BG is not likely to change given the sovereign's low sub-investment-grade IDR. As such, the GSR has no upgrade potential. The GSR of 'ns' reflects that despite BG's important market share and local franchise, Fitch believes there is no reasonable assumption of support being forthcoming from the sovereign due to Ecuador's limited financial flexibility and the lack of a lender of last resort. VR ADJUSTMENTS The VR of 'ccc+' has been assigned below the 'b-' implied VR due to the following adjustment reason: Operating Environment (negative). Fitch has assigned an Operating Environment score of 'ccc+' that is below the 'b' category implied score due to the following adjustment reason: Sovereign Rating (negative). Sources of Information - Banco Guayaquil S.A.; - Superintendencia de Bancos del Ecuador. 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 Guayaquil, S.A. LT IDR CCC+ Affirmed CCC+ ST IDR C Affirmed C Viability ccc+ Affirmed ccc+ Government Support ns Affirmed ns BANCO PICHINCHA: Fitch Affirms 'CCC+/C' Issuer Default Ratings -------------------------------------------------------------- Fitch Ratings has affirmed Banco Pichincha C.A. y Subsidiarias' (Pichincha) Long-Term Issuer Default Rating (IDR) at 'CCC+', Short-Term IDR at 'C' and Viability Rating (VR) at 'ccc+'. Fitch typically does not assign Rating Outlooks to issuers rated 'CCC+' or below. Key Rating Drivers Operating Environment with High Influence: Pichincha's VR drives its IDR, but ratings are capped by Fitch's 'ccc+' operating environment (OE) score for Ecuador, which is aligned with the sovereign rating. The OE reflects ongoing economic challenges, including insecurity and regulatory constraints. Despite OE pressures, banks remain resilient, with moderate asset quality deterioration, improved profitability and stable capitalization and liquidity. This resilience is supported by conservative lending and excess liquidity, which have allowed sustained net interest margins. Fitch expects pressures to persist but lessen as economic conditions stabilize. GDP per capita and Operational Risk Index (ORI) are projected to remain stable, supporting the current OE score. Fitch does not rule out asset quality deterioration; however, any impact on banks' overall financial profiles is expected to be limited. Strong Franchise: Pichincha's business profile score of 'b+' reflects its sustained strong performance and market leadership. Pichincha remains Ecuador's largest bank, with market shares of 28.6% in loans, 35.2% in demand deposits, and 22.6% in time deposits. Its robust competitive position and pricing power support sizable business volumes and consistently higher total operating income (TOI) than peers, averaging USD 1,571 million over 2020-2024. However, the assigned score considers that 81% of its consolidated assets are placed in Ecuador, a low-rated jurisdiction. Impaired Loans Rise, Reserves Strong: Pichincha's regulatory impaired loans ratio stood at 3.5% as of 2Q25, reflecting a deterioration from its four-year average (2021-2024) of 3.15%, driven by ongoing OE challenges. The 90-day impaired loans ratio reached 2.5% in 2Q25, up slightly from 2.3% at year-end 2024. Despite this, reserve coverage remains strong at 249.7%, significantly above peers, highlighting the bank's conservative approach to provisioning. Fitch anticipates moderate system-wide asset quality deterioration, primarily due to persistent OE risks. However, this deterioration is expected to be contained, allowing the bank to maintain its current asset quality 'b-' score. Profitability in Recovery: Pichincha's profitability improved in 1H25, with operating profit over RWA ratio at 1.3% versus a 0.8% four-year average while NIM rose to 6.0% in 2Q25 from 5.6% at YE24, trending toward the 6.7% four-year average as funding costs ease and asset yields remain strong. Profitability remains constrained by credit costs and expenses, but provisions density is improving. Impairment charges absorb 69.3% of pre-impairment profit, down from the 81% four-year average, modestly lifting operating leverage. Fitch estimates a slight loan portfolio deterioration, which could keep impairments elevated. However, ongoing rate correction should partly mitigate this by strengthening repayment capacity and lowering funding costs, allowing the bank to maintain its current 'b-' score. Modest Capitalization: Fitch revised Pichincha's capitalization and leverage score to 'b-' from 'b' following deterioration in the core metric to 10% at 2Q25, down from 10.9% at YE24 and 11.5% at YE23, bringing it closer to peers scored at 'b-' on capitalization and leverage. Despite strong reserve coverage of 250% at 2Q25, Fitch views loss-absorption capacity as constrained by relatively modest capital in relation to the bank's business scale and inherent risk profile. Fitch expects the FCC ratio to remain around the 2Q25 level, reflecting the bank's growth ambitions and under recovery profitability. Sound Funding and Liquidity Levels: Pichincha's funding and liquidity profile benefits from its strong franchise in Ecuador. As the country's leading bank, it maintains a large and diversified stable retail deposit base. As of 2Q24, Pichincha's loan-to-deposit ratio was 79.9%. Most of its deposits come from Ecuador, but approximately 28% derive from other markets where the bank operates, mainly Spain and Peru. The bank has a sound liquidity position, with available liquid assets accounting for 39.7% of total customer deposits. Around 40% of the securities portfolio is invested in international investment-grade issuers, which are considered more liquid than domestic instruments. Given the bank's estimated double-digit growth of deposits, the loans-to-deposits ratio is expected to remain stable, with slight improvements for 2025 and 2026. Overall, liquidity and funding metrics are expected remain adequate with its current 'b' score. Rating Sensitivities Factors that Could, Individually or Collectively, Lead to Negative Rating Action/Downgrade IDRs and VR: - The IDRs are sensitive to negative changes in the sovereign rating or further deterioration within the local OE; - IDRs and VR could be downgraded if there is material and persistent deterioration of the bank's business and financial profile, although this is unlikely at the current very low rating levels. GSR: - Pichincha's Government Support Rating (GSR) has no downgrade potential as it is at the lowest possible level. Factors that Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade IDRs and VR: - Pichincha's upside potential is limited. In the long term, a rating upgrade would require improved prospects for the OE and a meaningful and sustained improvement in the bank's core profitability, along with sustained good asset quality and capital metrics. GSR: - Ecuador's propensity or ability to provide timely support to Pichincha is not likely to change, given the sovereign's low sub-investment-grade IDR. As such, the GSR has no upgrade potential. Government Support Rating: The bank's GSR of 'ns' (no support) reflects that, despite Pichincha's significant market share and local franchise, Fitch believes there is no reasonable assumption of support forthcoming from the sovereign due to Ecuador's limited financial flexibility and the lack of a lender of last resort. VR ADJUSTMENTS Pichincha's VR of 'ccc+' has been assigned below the 'b' implied VR due to the following adjustment reason: Operating Environment (negative). Fitch has assigned an Operating Environment score of 'ccc+' that is below the 'b' category implied score due to the following adjustment reasons: Sovereign Rating (negative). Fitch has assigned a Business Profile score of 'b+' that is below the 'bb' category implied score due to the following adjustment reasons: Business Model (negative). Sources of Information - Banco Pichincha C.A. y Subsidiarias; - Superintendencia de Bancos del Ecuador. 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 Pichincha C.A. y Subsidiarias LT IDR CCC+ Affirmed CCC+ ST IDR C Affirmed C Viability ccc+ Affirmed ccc+ Gov't Support ns Affirmed ns BANCO PROCREDIT: Fitch Affirms 'B' Issuer Default Ratings --------------------------------------------------------- Fitch Ratings has affirmed Banco ProCredit S.A.'s (PCEC) Long-Term Issuer Default Rating (LT IDR) and its Short-Term IDR (ST IDR) at 'B'. The Rating Outlook for the LT IDR is Stable. Fitch has also affirmed the bank's Viability Rating (VR) at 'ccc+' and the ex-government support ratings (LT IDR XGS and ST IDR XGS) at 'B'. Key Rating Drivers Shareholder Support Rating: PCEC's IDRs are driven by Fitch's assessment of the ability and propensity of potential support it would receive from its parent, ProCredit Holding AG & Co. KGaA (PCH; BBB/Stable), if required. The 'b' Shareholder Support Rating reflects Fitch's view of parent support as robust but constrained by Ecuador's transfer and convertibility risks, captured by the 'B' Country Ceiling rating. Fitch's assessment of support considers limited synergies with parent in the role that PCEC plays for PCH through its operation. PCH is an international group of development-oriented commercial banks with a focus on Eastern Europe. Ecuador is the group's only remaining operation in Latin America. PCH's ability to provide timely support contemplates PCEC's relative size of approximately 6% of consolidated assets. Fitch believes any required support would be immaterial relative to the parent's ability to provide it. The propensity and commitment of PCH to provide support is reflected in the high level of operational and managerial integration and the reputational implications of subsidiary default. In addition, Fitch considers the presence of related funding and guarantees during different economic cycles in the support assessment. Operating Environment with Moderate Influence: PCEC SSR underpins its IDR. However, the Viability Rating (VR) is capped by Fitch's 'ccc+' OE score for Ecuador, aligned with the sovereign rating. The OE reflects persistent economic challenges, including insecurity, and regulatory constraints. Despite OE pressures, banks remain resilient, with moderate asset quality deterioration, improved profitability, and stable capitalization and liquidity, supported by conservative lending and excess liquidity that allowed sustained net interest margins. Fitch expects pressures to persist but lessen amid steadier economic conditions. GDP per capita and Operational Risk Index (ORI) are projected to remain stable, supporting current OE score. Fitch does not rule out asset quality deterioration, though any impact on banks' overall financial profiles is expected to be limited Limited Business Profile: PCEC's business profile is limited by its small size with a modest market share of assets, loans and deposits in the Ecuadorian banking system of 1.2%, 1.3% and 1.2%, respectively as of 3Q25. This is reflected in the four-year average total operating income (2021-2024) of USD 24 million, notably below than its relevant peers. In addition, its concentrated business model with focus on higher risk segments such as Micro, Small, and Medium Enterprises (MSMEs) further supports Fitch's assessment of the business profile. Asset Quality Remains Challenged: Despite a better impaired loans ratio of 3.9% in 3Q25 (2024: 4.3%), Fitch downgraded PCEC's asset quality score to 'ccc+' from 'b-'. Fitch expects the complex OE to persist and pressure the bank's clients' payment capacity and, therefore, its asset quality metrics during the next two years. Fitch believes the bank will reach metrics more commensurate with its focus and business profile. Operating Losses: PCEC's operating income remains insufficient to absorb non-interest expenses and loan impairment charges. This lack is a result of a lower interest margin and increased funding costs, coupled with general social and economic headwinds in the Ecuadorian financial system. PCEC's operating losses-to-risk-weighted assets (RWA) ratio was -2% at 3Q25. Fitch does not expect further deterioration, and a slight improvement is possible if funding and credit costs decrease. Pressured Capitalization; Parent Supported: As of 3Q25, PCEC's Fitch Core Capital (FCC)-to-RWA ratio continued to deteriorate, reaching 9.2%, mainly due to compressed internal profit generation. This compares unfavorably to the bank's four-year average of 10.9% and its regional peers. Fitch expects capitalization metrics to remain cushioned by PCH's propensity to provide support. Stable and Adequate Liquidity: Fitch believes PCEC maintains a stable funding structure and adequate liquidity. As of 3Q25, its loans-to-deposits ratio was 85.6%, reflecting reliance on external funding sources, which are primarily related to the parent. This enhances Fitch's view of support. Fitch does not rule out further funding diversification in line with retail deposits, consistent growth and regulatory limits on parent funding. Rating Sensitivities Factors that Could, Individually or Collectively, Lead to Negative Rating Action/Downgrade IDR/SSR PCEC's IDRs and SSR could be downgraded if the country ceiling is downgraded or if PCH's propensity or ability to support is materially weakened. VR The VR could be downgraded in the event of a sharp deterioration of the asset quality and consequently on its profitability metrics that would significantly reduce capital metrics. XGS PCEC's Long-Term IDR ex-government support (xgs) could be downgraded if PCH's ability or propensity to provide support weakens, as assessed by Fitch. The former could stem from an increase in country risks as assessed by Fitch. Short-Term IDR (xgs) are primarily sensitive to changes in Long-Term IDR (xgs) ratings and could be downgraded if the latter is downgraded and the new Long-Term ratings map to lower Short-Term ratings in accordance with Fitch's criteria. Factors that Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade IDR/SSR PCEC's IDR and SSR could be upgraded in the event of an upgrade of Ecuador's country ceiling. VR The VR has limited upside potential considering the still challenging operating environment. An upgrade of PCEC's VR would also require sustainable improvements of its profitability ratios. XGS An upgrade of PCEC's Long-Term IDR (xgs), which is constrained by Ecuador's transfer and convertibility risks, would require an upgrade of Ecuador's Country Ceiling, provided Fitch's view on the parent bank's ability and propensity to provide support remains otherwise unchanged. The Short-Term IDR (xgs) ratings is primarily sensitive to a change in the Long-Term IDR (xgs) could be upgraded if the latter is upgraded and the new Long-Term rating map to higher Short-Term ratings in accordance with Fitch's criteria. VR ADJUSTMENTS The OE score has been assigned below the implied score due to the following adjustment reason: Sovereign Rating (negative). Sources of Information - PCEC - Superintendencia de Bancos de Ecuador Public Ratings with Credit Linkage to other ratings PCEC's SSR is driven by PCH's IDR. 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 ProCredit S.A. LT IDR B Affirmed B ST IDR B Affirmed B Viability ccc+ Affirmed ccc+ LT IDR (xgs) B(xgs) Affirmed B(xgs) Shareholder Support b Affirmed b ST IDR (xgs) B(xgs) Affirmed B(xgs) PRODUBANCO: Fitch Affirms 'B-/B' Issuer Default Ratings ------------------------------------------------------- Fitch Ratings has affirmed Banco de la Produccion S.A. Produbanco y Subsidiarias's Long-Term Issuer Default Rating (IDR) at 'B-'and Short-Term IDR at 'B'. Fitch has also affirmed the bank's Viability Rating (VR) at 'ccc+'. The Rating Outlook for the Long-Term IDR is Stable. Key Rating Drivers Supported IDRs: Produbanco's Long-Term IDR is anchored by its Shareholder Support Rating (SSR), reflecting Fitch's view of parent Promerica Financial Corporation's (PFC; B+/Stable) ability and propensity to provide support if needed. The 'b-' SSR is two notches below PFC's as Produbanco's size—about 34% of PFC's consolidated assets—means any required assistance would be significant relative to the parent's capacity. The rating also reflects Fitch's expectation of strong parent support because Produbanco is a long-standing core subsidiary of PFC, delivering essential products and services to the group. PFC's propensity and commitment to support are are further evidenced by the high degree of operational and managerial integration and the material reputational implications of a subsidiary default. VR Operating Environment with High Influence: Produbanco's SSR underpins its IDR. However, the Viability Rating (VR) is capped by Fitch's 'ccc+' operating environment (OE) score for Ecuador, aligned with the sovereign rating. The OE reflects persistent economic challenges, including insecurity, and regulatory constraints. Despite OE pressures, banks remain resilient, with only moderate asset-quality deterioration, improved profitability, and stable capitalization and liquidity. Conservative lending and excess liquidity have supported sustained net interest margins. Fitch expects pressures to persist but ease as economic conditions stabilize. GDP per capita and Operational Risk Index (ORI) are projected to remain stable, supporting the current OE score. Fitch does not rule out further asset-quality deterioration, but any impact on banks' overall financial profiles should be limited. Strong Franchise: Produbanco's sustained market position is strong compared with local peers, ranking as the third-largest private bank in Ecuador's financial system, with an 11.6% share of total assets and 12.3% of total loans. This is reflected in a four-year average total operating income (2021-2024) of USD 491 million, supported by a well-established franchise. Pressured Asset Quality: By 3Q25, the regulatory impaired ratio improved to 2.8%, aided by tighter origination and stronger collections. This followed YE 2024 deterioration, when the stricter regulatory NPL metric, tighter than the 90-days-past-due measure, rose to 3.4% from 2.8% at YE 2023, which already reflected a 100bp impact from the end of regulatory forbearance. Historically solid asset quality—driven by a large corporates focus and disciplined risk management—was pressured since 2023 amid ongoing economic challenges. Further improvement is unlikely under current operating conditions, which present systemwide headwinds and may continue to weigh on borrowers' repayment capacity. Slight Profitability Recovery: By 3Q25, operating profit/RWA improved to 0.8%, still below 1%, indication a gradual recovery. This follows YE 2024, when operating profit/RWA fell to 0.1% amid social and economic headwinds, elevated impairment charges (97.0% versus an 85% average for 2021-2024), and a temporary government-imposed contribution that affected sector-wide results. Fitch expects slight loan portfolio deterioration that could keep impairments elevated, but ongoing rate correction should partly mitigate this by strengthening repayment capacity and lowering funding costs. Structurally Low Capitalization: Produbanco's FCC-to-RWA ratio has remained slightly above Fitch's 9% downside sensitivity since 2021 and stood at 9.3% in 3Q25, indication limited unexpected loss absorption. This aligns with the parent's capital-efficiency strategy and stable core capitalization. Under local rules, the capital adequacy ratio—enhanced by subordinated debt—was 13% in 3Q25. The capital and leverage score also reflects solid loan-loss reserve coverage of 176% in 3Q25. Fitch expects capitalization to remain appropriate for the rating category, supported by steady internal capital generation and a more conservative dividend policy. Good Deposit Base and Adequate Liquidity: The bank is primarily deposit-funded and maintains adequate liquidity, a trend Fitch expects to persist. Customer deposits cover 86% of the loan portfolio, while financial and subordinated debt—mostly from multilateral agencies—accounts for the remaining 14%. As of 3Q25, the loans-to-customer-deposits ratio was 93.8%, indicating the loan book is largely deposit-funded, which supports stability and helps mitigate liquidity pressures during market stress. Rating Sensitivities Factors that Could, Individually or Collectively, Lead to Negative Rating Action/Downgrade IDR/SSR - Produbanco's IDRs and SSR could be downgraded if PFC's propensity or ability to support materially weakens or if regulatory controls undermine potential support; VR - The VR would be downgraded if the FCC-to-RWA ratio is sustained below 9% without a credible plan to strengthen and restore capitalization metrics, along with a deterioration in its profitability performance. Factors that Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade IDR/SSR - Produbanco's IDR could be upgraded in the event of an upgrade of PFC's Long-Term IDR. The VR has limited upside potential considering the still challenging operating environment; VR - Upside potential is limited. However, in the long term, a VR upgrade would require improved prospects for the operating environment and a meaningful and sustained improvement of capital metrics and core profitability, combined with improvements in the bank's asset quality. VR ADJUSTMENTS Fitch has assigned a VR score of 'ccc+' that is below the 'b' implied VR due to the following adjustment reason: Operating Environment/Sovereign Rating Constraint (negative). Sources of Information - Produbanco - Superintendencia de Bancos de Ecuador Public Ratings with Credit Linkage to other ratings Produbanco's SSR is driven by PFC's IDR. 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 de la Produccion S.A. Produbanco y Subsidiarias LT IDR B- Affirmed B- ST IDR B Affirmed B Viability ccc+ Affirmed ccc+ Shareholder Support b- Affirmed b- ============= J A M A I C A ============= JAMAICA: S&P Warns of Rising Banking Risks Amid Slow Growth ----------------------------------------------------------- RJR News reports that credit rating agency Standard and Poor's is warning that Jamaica's commercial banking sector faces growing risks due to the country's slow economic growth and low per capita income. S&P says Jamaica's per capita GDP when divided among a population of roughly 2.7 million remains lower than most countries in Latin America and to the Caribbean, according to RJR News. The agency says this limits how much many Jamaicans can afford to borrow and that affects the ability of banks to grow their loan portfolios, the report notes. It notes that most of the banks' $1.6 trillion in loans are tied to industries which are more sensitive to downturns in the economy, the report says. S&P also highlights that private sector borrowing remains low at just 51 per cent of gross domestic product, signalling a small and less stable market for banking products, the report relays. The agency says stronger economic growth will be needed to support a more resilient and profitable banking sector, the report adds. About Jamaica Jamaica is an island country situated in the Caribbean Sea. Jamaica is an upper-middle income country with an economy heavily dependent on tourism. Other major sectors of the Jamaican economy include agriculture, mining, manufacturing, petroleum refining, financial and insurance services. On Feb. 21, 2025, Fitch Ratings affirmed Jamaica's Long-Term Foreign-Currency Issuer Default Rating (IDR) at 'BB-', with a positive rating outlook. In October 2023, Moody's upgraded the Government of Jamaica's long-term issuer and senior unsecured ratings to B1 from B2, and senior unsecured shelf rating to (P)B1 from (P)B2. The outlook has been changed to positive from stable. In September 2024, S&P affirmed 'BB-/B' longterm foreign and local currency sovereign credit ratings on Jamaica and revised outlook to positive. ===================== P U E R T O R I C O ===================== CABALLITO LLC: Hires Rodriguez Espola LLC as Accountant ------------------------------------------------------- Caballito LLC seeks approval from the U.S. Bankruptcy Court for the District of Puerto Rico to employ Jerry Rodriguez Espola, managing partner of Rodriguez Espola, LLC, to serve as accountant in its Chapter 11 case. The firm will provide these services: (a) review accounting records for preparation of month and year end accounting and financial reports; (b) prepare monthly reconciliations of all bank accounts; (c) accumulate payroll transactions to produce quarterly and annual payroll tax returns; (d) prepare liquidation analysis, financial projections, claim reconciliation, and related financial documents as support for a Plan of Reorganization; and (e) prepare the Monthly Operating Reports to be filed with the Court. Mr. Rodriguez Espola will receive a fixed rate of $500 monthly. Rodriguez Espola (RELLC), LLC is a "disinterested person" within the meaning of Section 101(14) of the Bankruptcy Code, according to court filings. The firm can be reached at: Jerry Rodriguez Espola Rodriguez Espola (RELLC), LLC PO Box 16036 San Juan, PR 00908 Tel No: (787)903-1156 About Caballito LLC Caballito LLC is a limited liability company. Caballito LLC sought relief under Chapter 11 of the U.S. Bankruptcy Code (Bankr. D. P.R. Case No. 25-04578) on October 9, 2025. In its petition, the Debtor reports estimated assets and liabilities between $100,001 and $1 million each. Honorable Bankruptcy Judge Mildred Caban handles the case. The Debtor is represented by Jose M. Prieto Carballo, Esq. of JPC Law Office. =============== S U R I N A M E =============== SURINAME: Moody's Assigns Caa1 Rating to New USD Bond Issuance -------------------------------------------------------------- Moody's Ratings has assigned a foreign currency senior unsecured rating of Caa1 to the Government of Suriname's proposed US dollar-denominated notes. The outlook is positive. The assigned rating is based on preliminary documentation. According to the terms and conditions available to Moody's, the notes will constitute direct, unconditional, unsubordinated, and unsecured obligations of the Government of Suriname and will rank pari passu among themselves and equally with all other existing and future unsubordinated and unsecured external indebtedness of the government. The notes are backed by the full faith and credit of the Republic of Suriname. Moody's does not anticipate changes in the main conditions that the debentures will carry. Should issuance conditions and/or final documentation deviate from the original ones submitted and reviewed by the rating agency, Moody's will assess the impact that these differences may have on the rating and act accordingly. The rating mirrors the Government of Suriname's long-term issuer rating of Caa1 with a positive outlook. RATINGS RATIONALE The Caa1 rating assigned to the Government of Suriname's new US dollar-denominated senior unsecured notes is in line with the sovereign's long-term issuer rating. The notes rank pari passu with existing external debt obligations and are governed by New York law. The proceeds from the issuance, which will be a dual-maturity issuance, are expected to be used for liability management of the outstanding Notes due 2033 and the 2050 Value Recovery Instrument. The proceeds will also include a Prefunding of Government Obligations which will cover the first five debt service payments by the government of Suriname. Suriname's Caa1 rating reflects the country's strong growth potential, particularly in the hydrocarbon sector, set against its small economic scale, weak governance, and high debt burden, which leave it susceptible to external shocks. The authorities' policy efforts under the IMF Extended Fund Facility (EFF) program have improved the debt trajectory following the sovereign default in 2020, and the successful completion of the EFF in March 2025 has supported macroeconomic stabilization and fiscal consolidation. The rating incorporates Suriname's "ba2" economic strength, reflecting the country's large mineral and hydrocarbon resources and relatively favorable investment prospects, but also its small size and limited diversification. Institutions and governance strength is assessed at "caa3," reflecting low policy effectiveness and a history of default, although gradual improvements have been made under the IMF program. Fiscal strength is assessed at "caa2," reflecting a still-high debt burden (estimated at 85.9% of GDP as of June 2025) and weak debt affordability, but with expectations for a rapid decline in debt ratios once oil production begins. Susceptibility to event risk is assessed at "ca," driven by government liquidity risk and limited access to market-based funding. The positive outlook reflects the potential for further improvement in Suriname's economic and fiscal strength, driven by continued reforms and favorable investment prospects, especially as oil production from the GranMorgu Oil Project is expected to commence in 2028. ENVIRONMENTAL, SOCIAL, GOVERNANCE CONSIDERATIONS Suriname's CIS-5 indicates the rating is lower than it would have been if ESG risk exposures did not exist. The principal driver is very weak governance, combined with high exposure to social and environmental risks. Weak policy credibility and effectiveness further amplify the impact of environmental and social vulnerabilities, as the government's limited institutional capacity constrains its ability to implement reforms or respond to shocks. This credit rating and any associated review or outlook has been assigned on an anticipated/subsequent basis. This credit rating and any associated review or outlook has been assigned on an anticipated/subsequent basis. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS The implementation of legislation that provides a framework to effectively and transparently manage future oil-related revenue would increase confidence in the government's ability to generate future revenue, potentially leading to upward rating momentum. Additionally, improvements in policy effectiveness, as demonstrated through continued economic and structural reforms, would reduce the sovereign's exposure to external shocks and would also be positive for the rating. A sustained decline in the government debt burden, aided by continued fiscal reforms that broaden non-mining revenue, could lead to an upgrade Conversely, a failure to maintain fiscal discipline, which leads to a deterioration in the government's fiscal balance, could lead to a downgrade. An increase in gross financing needs not commensurate with projected oil-related revenue could lead to a downgrade of the rating. Furthermore, delays in the start of offshore oil production or lower-than-expected future revenue would place pressure on the rating. The principal methodology used in these ratings was Sovereigns published in November 2022. The weighting of all rating factors is described in the methodology used in this credit rating action, if applicable. ********* S U B S C R I P T I O N I N F O R M A T I O N Troubled Company Reporter-Latin America is a daily newsletter co-published by Bankruptcy Creditors' Service, Inc., Fairless Hills, Pennsylvania, USA, and Beard Group, Inc., Washington, D.C., USA, Marites O. Claro, Joy A. Agravante, Rousel Elaine T. Fernandez, Julie Anne L. Toledo, Ivy B. Magdadaro, and Peter A. Chapman, Editors. Copyright 2025. All rights reserved. ISSN 1529-2746. This material is copyrighted and any commercial use, resale or publication in any form (including e-mail forwarding, electronic re-mailing and photocopying) is strictly prohibited without prior written permission of the publishers. Information contained herein is obtained from sources believed to be reliable, but is not guaranteed. The TCR Latin America subscription rate is US$775 per half-year, delivered via e-mail. 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