/raid1/www/Hosts/bankrupt/TCRLA

/raid1/www/Hosts/bankrupt/TCRLA_Public/220928.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, September 28, 2022, Vol. 23, No. 188 Headlines A R G E N T I N A ARGENTINA: Drought Push Farmers to Grow More Soy ARGENTINA: Second-Quarter Economic Growth Surpasses Expectations BANCO HIPOTECARIO: Fitch Hikes LongTerm IDRs to 'CCC-' BANCO SUPERVIELLE: Fitch Affirms 'CCC' LongTerm IDRs GAUCHO GROUP: Enters Into Exchange Agreement With Noteholders TARJETA NARANJA: Fitch Raises LongTerm IDRs to 'CCC' B E L I Z E BELIZE: IDB Approves US$8M-Loan to Attract More Foreign Investment B R A Z I L BRAZIL: Bolsonaro Aims to Set Income Tax to Zero for Foreigners [*] BRAZIL: Underscores Ability to Provide Clean, Low-Cost Energy E L S A L V A D O R EL SALVADOR: Fitch Cuts LongTerm Foreign Currency IDR to 'CC' M E X I C O BUPA MEXICO: A.M. Best Affirms C++(Marginal) Fin. Strength Rating ELECTRICIDAD FIRME: Fitch Affirms 'BB' IDRs, Outlook Stable P U E R T O R I C O PUERTO RICO: Wachtell, McConnell Advise on Fuel Line Lenders X X X X X X X X CREDIT SUISSE: To Consider Selling LatAm Wealth Management Unit LATAM: Caricom Survey Finds Hike in Food Insecurity - - - - - ================= A R G E N T I N A ================= ARGENTINA: Drought Push Farmers to Grow More Soy ------------------------------------------------ Jonathan Gilbert at Bloomberg News reports that farmers in Argentina are grappling with a third straight year of withering drought ahead of the growing season, but this year they have a new strategy to beat it: plant soybeans. For the first time since 2015, growers on the Pampas crop belt are set to expand the area planted with soybeans as they try to shield their businesses from the dryness, according to Bloomberg News. This is an unexpected move because corn has been preferred over soybeans in past seasons to get the most out of droughts, Bloomberg News relays. This year, however, corn is the bigger risk, Bloomberg News discloses. The yellow grain uses far more fertilizer, whose costs soared amid Russia's invasion of Ukraine, Bloomberg News notes. Farmers are loath to throw too much money at a season portending low yields on parched fields, so soybeans, which are cheaper to plant, are making a comeback, Bloomberg News says. Traders watch Argentina closely because it's the world's biggest exporter of soy meal used in raising animals for meat, as well as soy oil for cooking and biofuels, Bloomberg News notes. Any increase in supplies from the South American nation would flow to global markets and become a significant factor in food prices, which have been rising and recently touched record highs, Bloomberg News relays. On the most productive slither of the Pampas, known as the zona nucleo, "farmers are changing the way they face the season: They're going defensive," said Cristian Russo, who's in charge of crop estimates at the Rosario Board of Trade, Bloomberg News relays. "We're seeing a lot of them switch to soy because it reduces risk," he added. Soy planting could expand to 17 million hectares (42 million acres) from last season's 16.3 million, said Martin Lopez, an analyst at the Buenos Aires Grain Exchange, Bloomberg News notes. To be sure, that's nowhere near the record highs of 20 million hectares in the mid-2010s, Bloomberg News discloses. In a preliminary forecast last month, the Rosario bourse said the soy area may grow by four percent, with corn acreage shrinking about three percent, Bloomberg News says. The longer it stays dry, the bigger the shift will be, Lopez said. "It's all about October," he said, Bloomberg News notes. "If it doesn't rain in October, we'll see more soy planted," he added. Soy planting in Argentina has shrunk for six straight years, according to Buenos Aires Grain Exchange data, as farmers were drawn to corn because of lower export taxes and the drier climate: Corn, of which Argentina is also a top-three exporter, has a larger planting window that allows more chance for rainfall, Bloomberg News notes. This is Argentina's third consecutive drought, causing farmers everywhere to suffer, Bloomberg News says. In southern Buenos Aires Province, grower Ignacio Philipp said it rained last weekend for the first time in 80 days, Bloomberg News notes. To the northwest, in La Pampa province, agronomist Santiago Dalla Via said much of the wheat that's currently in the ground is struggling to grow after a dry southern hemisphere winter, Bloomberg News relays. "There was hardly a drop of rain," Dalla Via said, Bloomberg News notes. "The new season is getting started with barely any moisture in the soil," he added. Maps of farmland water reserves sent on September 19 by the Agriculture Secretariat showed the drought sprawling even wider in the zona nucleo, Bloomberg News relays. "In these circumstances, farmers don't want to bury too much capital in the ground," said Eugenio Irazuegui, head of research at grains brokerage Enrique Zeni in Rosario, Bloomberg News notes. "They'll go with soy over corn," he added. About Argentina Argentina is a country located mostly in the southern half of South America. Its capital is Buenos Aires. Alberto Angel Fernandez is the current president of Argentina after winning the October 2019 general election. He succeeded Mauricio Macri 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. Last March 25, 2022, Argentina finalized agreement with the IMF for a new USD44 billion Extended Funding Facility (EFF) intended to fund USD40 billion in looming repayments of the defunct Stand-By Arrangement (SBA), with an extra USD4 billion in up-front net financing. This has averted the risk of a default to the IMF and is facilitating a parallel rescheduling of Paris Club debt. As reported by The Troubled Company Reporter - Latin America on Aug. 12, 2022, S&P Global Ratings affirmed its foreign and local-currency sovereign credit ratings of 'CCC+/C' on the Republic of Argentina. The outlook remains stable. S&P also affirmed its national scale 'raBBB-' rating and its 'CCC+' transfer and convertibility assessment. S&P said the stable outlook reflects the challenges in managing pronounced economic imbalances ahead of the 2023 national elections given disagreement on policy within the government coalition and financing pressures in the local market. Last April 14, 2022, Fitch Ratings affirmed Argentina's Long-Term Foreign and Local Currency Issuer Default Ratings (IDR) at 'CCC'. Fitch said Argentina's 'CCC' ratings reflect weak external liquidity and pronounced macroeconomic imbalances that undermine debt repayment capacity, and uncertainty regarding how much progress can be made on these issues under a new IMF program. On July 19, 2022, Fitch Ratings placed Argentina's Long-Term Foreign Currency Issuer Default Rating (IDR) and Long-Term Local Currency IDR Under Criteria Observation (UCO) following the conversion of the agency's Exposure Draft: Sovereign Rating Criteria to final criteria. The UCO assignment indicates that ratings may change as a direct result of the final criteria. It does not indicate a change in the underlying credit profile, nor does it affect existing Rating Outlooks. Moody's credit rating for Argentina was last set at Ca on Sept. 28, 2020. DBRS has also confirmed Argentina's Long-Term Foreign Currency Issuer Rating at CCC and Long-Term Local Currency Issuer Rating at CCC (high) on July 21, 2022. ARGENTINA: Second-Quarter Economic Growth Surpasses Expectations ---------------------------------------------------------------- Patrick Gillespie at Bloomberg News reports that Argentina's economy grew more than expected in the second quarter of the year as rising commodity prices boosted exports, even as rising inflation eroded consumer purchasing power. Gross domestic product expanded one percent in the quarter from the previous three months, beating economists' median estimate of 0.7 percent growth. On a year-on-year basis, the economy grew by 6.9 percent, according to government data released, according to Bloomberg News. Capital spending and exports drove activity during the quarter, while imports weighed on growth, the report notes. While Argentina's economy is expected to post positive economic growth in 2022, economists are currently forecasting a contraction in the second half, the report relays. A widening trade deficit, inflation heading towards 100 percent and political turmoil has weakened activity so far in the second half of the year, during which time President Alberto Fernandez has had three economy ministers, the report relays. Analysts expect the economy to grow by 3.6 percent this year and to slow to one percent in 2023, according to the Central Bank's monthly survey, the report adds. About Argentina Argentina is a country located mostly in the southern half of South America. Its capital is Buenos Aires. Alberto Angel Fernandez is the current president of Argentina after winning the October 2019 general election. He succeeded Mauricio Macri 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. Last March 25, 2022, Argentina finalized agreement with the IMF for a new USD44 billion Extended Funding Facility (EFF) intended to fund USD40 billion in looming repayments of the defunct Stand-By Arrangement (SBA), with an extra USD4 billion in up-front net financing. This has averted the risk of a default to the IMF and is facilitating a parallel rescheduling of Paris Club debt. As reported by The Troubled Company Reporter - Latin America on Aug. 12, 2022, S&P Global Ratings affirmed its foreign and local-currency sovereign credit ratings of 'CCC+/C' on the Republic of Argentina. The outlook remains stable. S&P also affirmed its national scale 'raBBB-' rating and its 'CCC+' transfer and convertibility assessment. S&P said the stable outlook reflects the challenges in managing pronounced economic imbalances ahead of the 2023 national elections given disagreement on policy within the government coalition and financing pressures in the local market. Last April 14, 2022, Fitch Ratings affirmed Argentina's Long-Term Foreign and Local Currency Issuer Default Ratings (IDR) at 'CCC'. Fitch said Argentina's 'CCC' ratings reflect weak external liquidity and pronounced macroeconomic imbalances that undermine debt repayment capacity, and uncertainty regarding how much progress can be made on these issues under a new IMF program. On July 19, 2022, Fitch Ratings placed Argentina's Long-Term Foreign Currency Issuer Default Rating (IDR) and Long-Term Local Currency IDR Under Criteria Observation (UCO) following the conversion of the agency's Exposure Draft: Sovereign Rating Criteria to final criteria. The UCO assignment indicates that ratings may change as a direct result of the final criteria. It does not indicate a change in the underlying credit profile, nor does it affect existing Rating Outlooks. Moody's credit rating for Argentina was last set at Ca on Sept. 28, 2020. DBRS has also confirmed Argentina's Long-Term Foreign Currency Issuer Rating at CCC and Long-Term Local Currency Issuer Rating at CCC (high) on July 21, 2022. BANCO HIPOTECARIO: Fitch Hikes LongTerm IDRs to 'CCC-' ------------------------------------------------------ Fitch Ratings has upgraded Banco Hipotecario S.A.'s Long-Term Foreign and Local Currency Issuer Default Ratings (IDR) to 'CCC-' from 'CC' and Viability Rating (VR) to 'ccc-' from 'cc'. The upgrade reflects Hipotecario's improvements in the bank's asset quality, funding mix and profitability during the past six quarters and the lower refinancing risk given the significant reduction of its capital markets debt. Fitch has withdrawn the banks Support Rating of '5' and the Support Floor of 'No Floor' (NF) and assigned a new Government Support Rating of 'No Support' ('ns') as these ratings are no longer relevant to the agency's coverage. KEY RATING DRIVERS Intrinsic Creditworthiness: Hipotecario's IDRs are based on the bank's intrinsic creditworthiness as determined by its VR. The bank's VR is one notch below its implied VR due to its comparatively weaker funding and liquidity profile. Despite improving trends in terms of the diversification of the bank's funding sources, concentration remains high when compared to international peers. Challenging Operating Environment: Hipotecario's implied Viability Rating (VR) and IDRs are constrained by Argentina's volatile operating environment, and the bank's funding and liquidity profile. The risks to Argentina's operating environment are clearly skewed to the downside, underpinning Fitch Ratings' Negative Outlook on this score. Market volatility, low loan growth, higher credit costs and rising expenses, due to high inflation, will continue to weigh on Hipotecario's financial profile. Satisfactory Asset Quality: During the first half of 2022 the bank's loan impairment ratio saw a significant improvement, decreasing to a low of 4.5% as of June 30, 2022 from the nearly 14% reported at December 2021. Securities (mostly liquid, Central Bank securities) accounted for nearly 50% of total assets while gross loans represented nearly 20% at June 30, 2022. Coverage ratios remain satisfactory. Recovering Profitability: Profitability metrics strongly improved as a result of earnings from its securities portfolio and benefits from cost control initiatives and lower credit costs. The contained operating expenses have offset lower revenues from the smaller credit portfolio and lower fee income resulting from government regulation intended to support the economy. The benchmark operating profit to risk-weighted asset ratio sharply improved from YE 2021 when it was negative to a positive 8.5% at 1H2022. Stronger Capitalization Metrics: The bank posts satisfactory capitalization levels with a CET 1 ratio of 18.7% and total capital ratio of 18.9%, in line with its peers and well-exceeds the regulatory minimums as of June 30, 2022. The June 2022 level was an improvement on the nearly 16% ratio posted at YE 2021. Fitch expects this ratio to decrease when the economy recovers. Greater Funding Diversification: Hipotecario has made significant progress towards diversifying its funding base from predominantly funding by bonds to customer deposits as the main source of funding. Deposits now represent 84% of its non-equity funding. The bank's loan to deposit ratio is very low compared to peers at only 29.5% at 1H22. Deposit concentration has improved, but still high, as the top 10 depositors accounted for 39% of total deposits as of June 30, 2022. As of the same date, the bank reported adequate liquidity metrics of LCR 139% and NSFR of 219%. RATING SENSITIVITIES Factors that could, individually or collectively, lead to negative rating action/downgrade: The IDRs and VRs would be pressured by a downgrade of Argentina's Sovereign Rating or deterioration in the local operating environment beyond current expectations, leading to a significant deterioration in its financial profile. Any policy announcements or deterioration in the local operating environment detrimental to the bank's ability to service obligations would be negative for creditworthiness. This includes a tightening of capital controls, to the extent they restrict debt payments. Factors that could, individually or collectively, lead to positive rating action/upgrade: Maintaining the improvement in the bank's funding profile and asset quality in the context of a sovereign upgrade or a better operating environment would be positive for the bank's ratings. OTHER DEBT AND ISSUER RATINGS: KEY RATING DRIVERS The rating of Hipotecario's senior medium-term notes is aligned with the bank's Long-Term Foreign Currency IDR. Fitch considers the Long-Term Foreign Currency IDR an appropriate anchor for this issue rating, given the transfer and convertibility risk associated with settlement in foreign currency, notwithstanding the issuer will not incur material currency risk. The notes' Recovery Rating of 'RR4' reflects the average expected recovery in case of bank liquidation. The bank has recently repaid a portion of its senior debt and has access to sufficient foreign currency to repay the upcoming November 2022 maturity. OTHER DEBT AND ISSUER RATINGS: RATING SENSITIVITIES Any change, either positive or negative, to Hipotecario's IDR could result in a similar change to the senior debt rating. VR ADJUSTMENTS - The implied 'ccc' Viability Rating has been adjusted to 'ccc-' due to operating environment/sovereign rating constraint (negative); - The Operating Environment score of 'ccc' has been assigned below the implied score of 'b' due to the following adjustment reason: Sovereign Rating (negative); ESG CONSIDERATIONS Banco Hipotecario S.A. has an ESG Relevance Score of '4' for Management Strategy. This reflects the high level of government intervention in the Argentine banking sector. The imposition of interest rate caps can lead to inadequate loan pricing, and, together with the imposition of interest rates floors on time deposits, puts significant pressure on banks' net interest margins. In addition, restrictions on fee levels can negatively affect performance ratios. This challenges Banco Hipotecario's ability to define and execute its own strategy. This has a moderately negative impact on the rating in conjunction with other factors. This has a negative impact on the credit profile, and is relevant to the ratings in conjunction with other factors. Unless otherwise disclosed in this section, the highest level of ESG credit relevance is a score of '3'. This means ESG issues are credit-neutral or have only a minimal credit impact on the entity, either due to their nature or the way in which they are being managed by the entity. Debt Rating Recovery Prior ---- ------ -------- ----- Banco Hipotecario S.A. LT IDR CCC- Upgrade CC ST IDR C Affirmed C LC LT IDR CCC- Upgrade CC LC ST IDR C Affirmed C Viability ccc- Upgrade cc Support WD Withdrawn 5 Support Floor WD Withdrawn NF Gov't Support ns New Rating senior unsecured LT CCC- Upgrade RR4 CC BANCO SUPERVIELLE: Fitch Affirms 'CCC' LongTerm IDRs ---------------------------------------------------- Fitch Ratings has affirmed Banco Supervielle's Foreign and Local currency Long-Term Issuer Default Ratings (IDRs) at 'CCC' and viability rating (VR) at 'ccc'. Fitch has also withdrawn Supervielle's Support Rating of '5' and Support Rating Floor of 'NF' as these ratings are no longer relevant to the agency's coverage following the publication of its updated Bank Rating Criteria on Nov. 12, 2021. In line with the updated criteria, Fitch has assigned Supervielle a Government Support Rating (GSR) of 'ns' (No support). KEY RATING DRIVERS In Fitch's view, regardless of its overall adequate financial condition, Supervielle's VR and IDRs are constrained by the operating environment and Argentina's low IDRs. Supervielle's assigned VR is in line with its implied VR. Highly Challenging Operating Environment: The operating environment remains adverse as asset quality continues to be pressured by a long recession, which has been exacerbated by the coronavirus pandemic and severe political uncertainties. Additionally, significant margin pressure due to regulatory imposed interest rates caps and floors and increasing operating costs due to continued high inflation have significantly affected profitability. Challenging Asset Quality: Supervielle's asset quality has historically been somewhat weaker than that of its peers, mainly due to its focus on SME and retail lending, in addition to its exposure to consumer finance (around 7% of gross loans in June 2022) through its subsidiary IUDU Compania Financiera S.A. (IUDU). However, even with the end of the regulatory forbearance and relief measures of the Central Bank in the first half 2021, the Argentine banks have improved asset quality indicators due to measures taken to strengthen collections and make originations more conservative, but also aided by high inflation. As of June 2022, Supervielle's NPLs ratio reduced to 3.9% of gross loans, reflecting lower delinquencies in corporate loans and SME. The bank's loan loss reserve coverage fell to 102% of NPLs and 4.0% of total gross loans in June 2022. Additionally, 71% of the non-performing commercial loans had tangible collateral, and 61% of retail lending is in the form of payroll loans or financing to retirees. Profitability Will Remain Under Pressure: In the first half of 2022, the bank's profitability deteriorated and the bank posted a net loss mainly reflecting increased losses at IUDU due to higher inflation and severance charges as well as still high credit costs in addition to the margin pressures mentioned above. As a result, the Supervielle's operating profit/risk weighted assets ratio fell to negative 2.3% at June 2022. Since January 2020, Argentine banks' financial statements have been adjusted by inflation, following IFRS rules, so the figures are not comparable with periods before 2019. Adequate Capitalization: Since its IPO (in 2016 and 2017), Supervielle raised a total amount of USD 623 million in capital, which significantly improved the bank's levels of capitalization. In June 2022, the bank's CET1 to risk-weighted assets ratio declined to 12.7%, from 13.7% a year earlier, mainly due to net losses in the period, despite the low loan growth over the past few years. Satisfactory Funding and Liquidity Metrics: Supervielle is almost entirely funded through deposits, which accounted by 99.3% of its total funding as of June 2022. The bank's loan to deposits ratio has rapidly decreased to 49.2%, well below the 100%-110% range shown in recent years, given that deposit growth has been significantly stronger than that of loans. The bank's liquidity levels are adequate, and the liquidity coverage ratio (LCR) remained above 100% at 108.4% in June 2022, with an NSFR of 155.9% at the same date. The immediate liquidity ratio (cash and equivalents plus short term central banks securities divided by total deposits) was high at 53.05% as of total deposits in June 2022, while only cash and equivalents represented 9.3% of deposits. RATING SENSITIVITIES Factors that could, individually or collectively, lead to negative rating action/downgrade: - The IDRs and VRs of Supervielle would be pressured by a downgrade of Argentina's sovereign rating or a deterioration in the local operating environment beyond current expectations that leads to a significant deterioration in its financial profile; - Any policy announcements that would be detrimental to the bank's ability to service its obligations, would be negative for creditworthiness. Factors that could, individually or collectively, lead to positive rating action/upgrade: - The IDRs and VRs would benefit from an upgrade of Argentina's sovereign rating. VR ADJUSTMENTS - The Operating Environment score has been assigned below the implied score due to the following adjustment reason: Sovereign Rating (negative). ESG CONSIDERATIONS Supervielle's ESG score for Management Strategy of '4', reflects the high level of government intervention in the Argentine banking sector. The imposition of interest rate caps can lead to inadequate loan pricing and, together with the imposition of interest rates floors on time deposits, puts significant pressure on banks' net interest margins. In addition, restrictions on fee levels can negatively impact on performance ratios. This challenges Supervielle's ability to define and execute its own strategy. This has a negative impact on the rating in conjunction with other factors. Unless otherwise disclosed in this section, the highest level of ESG credit relevance is a score of '3'. This means ESG issues are credit-neutral or have only a minimal credit impact on the entity, either due to their nature or the way in which they are being managed by the entity. Debt Rating Prior ---- ------ ----- Banco Supervielle S.A. LT IDR CCC Affirmed CCC ST IDR C Affirmed C LC LT IDR CCC Affirmed CCC LC ST IDR C Affirmed C Viability ccc Affirmed ccc Support WD Withdrawn 5 Support Floor WD Withdrawn NF Gov't Support ns New Rating GAUCHO GROUP: Enters Into Exchange Agreement With Noteholders ------------------------------------------------------------- Gaucho Group Holdings, Inc. and certain investors entered into a Securities Purchase Agreement, dated as of Nov. 3, 2021, and the Company issued to the investors certain senior secured convertible notes, the Company previously disclosed in a Form 8-K filing with the U.S. Securities and Exchange Commission. On Sept. 22, 2022, the Company entered into an exchange agreement with the investors in order to amend and waive certain provisions of the Existing Note Documents and exchange $100 in aggregate principal amount of each of the Existing Notes, on the basis and subject to the terms and conditions set forth in the Exchange Agreement, for warrants to purchase up to 1,090,983 shares of the Company's Common Stock at an exercise price of $0.3182 (subject to customary adjustment upon subdivision or combination of the common stock). The Exchange Agreement amends the original terms of payment of the Existing Notes and waives payment of principal and interest due on each of Sept. 7, 2022 and Oct. 7, 2022. All principal, interest, and fees are due on the maturity date of the Nov. 9, 2022. The Warrants are immediately exercisable and may be exercised at any time, and from time to time, on or before the third anniversary of the date of issuance. The Warrant includes a "blocker" provision that, subject to certain exceptions described in the Warrant, prevents the Investors from exercising the Warrant to the extent such exercise would result in the Investors together with certain affiliates beneficially owning in excess of 4.99% of the Common Stock outstanding immediately after giving effect to such exercise. About Gaucho Group Headquartered in New York, NY, Gaucho Group Holdings, Inc. -- http://www.algodongroup.com-- was incorporated on April 5, 1999. Effective Oct. 1, 2018, the Company changed its name from Algodon Wines & Luxury Development, Inc. to Algodon Group, Inc., and effective March 11, 2019, the Company changed its name from Algodon Group, Inc. to Gaucho Group Holdings, Inc. Through its wholly-owned subsidiaries, GGH invests in, develops and operates real estate projects in Argentina. GGH operates a hotel, golf and tennis resort, vineyard and producing winery in addition to developing residential lots located near the resort. In 2016, GGH formed a new subsidiary and in 2018, established an e-commerce platform for the manufacture and sale of high-end fashion and accessories. The activities in Argentina are conducted through its operating entities: InvestProperty Group, LLC, Algodon Global Properties, LLC, The Algodon - Recoleta S.R.L, Algodon Properties II S.R.L., and Algodon Wine Estates S.R.L. Algodon distributes its wines in Europe through its United Kingdom entity, Algodon Europe, LTD. Gaucho Group reported a net loss of $2.39 million for the year ended Dec. 31, 2021, a net loss of $5.78 million for the year ended Dec. 31, 2020, and a net loss of $6.96 million for the year ended Dec. 31, 2019. As of June 30, 2022, the Company had $25.01 million in total assets, $10.25 million in total liabilities and $14.75 million in total stockholders' equity. TARJETA NARANJA: Fitch Raises LongTerm IDRs to 'CCC' ---------------------------------------------------- Fitch Ratings has upgraded Tarjeta Naranja, S.A.U.'s (TN) Foreign and Local Currency Long-Term Issuer Default Ratings (IDR) to 'CCC' from 'CCC-' and affirmed the Foreign and Local Currency Short-Term IDR at 'C'. KEY RATING DRIVERS The upgrade reflects TN's reduced default risk given the recent maturity of its last international debt issuance. The latter, although small in amount, was subject to capital controls in Argentina which, if tightened could have affected TN's capacity to obtain U.S. dollars to make the payment. TN's IDRs are predominantly influenced by Argentina's volatile operating environment and low sovereign ratings (CCC). The ratings also consider TN's higher risk appetite relative to bank peers with a moderate importance. The latter is due to its business concentration in credit cards targeting low- and middle-income segments. However, in Fitch's view, TN's robust niche franchise as the largest credit card issuer in Argentina and one of the top credit card issuers in the region, as well as its good revenue generation capacity and track record of adequate asset quality for its business model and segments served, somewhat mitigate this constraint. As a non-bank financial institution with short-term assets, TN's funding profile relies primarily on accounts payable and local issuances. Almost 100% of its liabilities were unsecured at June 30, 2022. After the recent maturity of the last international debt issuance, TN's default risk has decreased as it is now less exposed to capital controls in Argentina. No-cost accounts payable to merchants (for an average tenor of 45 days) represented roughly 60% of total liabilities, while a further 19.3% derive from local issues of unsecured debt and bank financing for 16.2%. TN's liquidity is strengthened by the predictable churn of its short-term loan assets (with an average duration of approximately four months). TN's profitability has historically been sound, driven by ample margins and fee income sourced from both customers and merchants, showing a robust recurring double-digit Pre-tax profit/average assets ratio until 2017. However, since 2018, the persistently high inflation in Argentina and higher credit costs have significantly affected the company's profitability since it was required to adjust its financial statements by inflation, in line with IAS29. Since 2020, TN's revenues have improved due to stronger loan growth, wide net interest margins despite higher funding costs, and growing fees. However, in 1H22, TN's profitability was affected by the significantly higher inflation adjustment due to the rise in the inflation rate. As such, TN's pre-tax profit/total assets ratio decreased to 3.8% at June 30, 2022, from 10.2% at Dec. 31, 2021. The company has taken some measures to partly hedge the impact of inflation during 2H22. Fitch expects TN's profitability to remain adequate based on its strong revenue generation capacity and good risk management, although it will likely be affected by the persistently high inflation levels. TN's asset quality has historically been adequate for its business model and segments served, although, given its business focus, its portfolio is highly sensitive to the evolution of the economic environment. TN's loan quality indicators deteriorated significantly between 2017 and 2019 due to the tough operating environment, especially faced by lower income segments of the population due to high inflation, and the decline of the loan book. However, after a series of measures taken to improve collections and restrict credit origination, and higher charge-offs, its asset quality indicators have significantly improved since 2020. As a result, the NPL ratio has remained under control and, as of June 30, 2022 it was 2.56%, below the pre-pandemic levels. Net charge-offs also decreased significantly and as of June 30, 2022 were only 2.04% of gross loans (annualized). Additionally, TN's reserve coverage remains sound as the company sets up loan loss provisions according to its expected loss models. As of June 2022, reserve coverage reached an ample 209% of impaired loans. Fitch expects TN's asset quality indicators to be under some pressure due to the adverse operating environment, but to remain under control. TN's capitalization and leverage are adequate for its business model and risk appetite. Capital is mostly composed of tangible equity with limited intangible assets. As of June 30, 2022, the company's leverage (debt/tangible equity) reached 1.4x, still below the level reported up to 2018 of around 4x. Fitch expects TN's leverage to gradually increase to levels more similar to its historical levels when the economic environment in Argentina improves. TN's capital and leverage position benefit from strong internal capital generation and moderate dividend payments, of around 20%. RATING SENSITIVITIES Factors that could, individually or collectively, lead to negative rating action/downgrade: - TN's IDRs would be pressured by a downgrade of Argentina's sovereign rating or a deterioration in the local operating environment beyond current expectations that leads to a significant deterioration in its financial profile. Factors that could, individually or collectively, lead to positive rating action/upgrade: - The IDRs would benefit from an upgrade of Argentina's sovereign rating if the company maintains an adequate financial profile. 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. Debt Rating Prior ---- ------ ----- Tarjeta Naranja S.A.U. LT IDR CCC Upgrade CCC- ST IDR C Affirmed C LC LT IDR CCC Upgrade CCC- LC ST ID C Affirmed C =========== B E L I Z E =========== BELIZE: IDB Approves US$8M-Loan to Attract More Foreign Investment ------------------------------------------------------------------ The Inter-American Development Bank has approved an US$8 million loan to promote Belize's foreign direct investment and trade performance through a series of measures aimed at streamlining trade and investment procedures and providing tools for small and medium-sized firms to join global value chains. The loan - approved by the IDB's Board of Executive Directors - will seek to reverse Belize's struggling external sector. Foreign Direct Investment (FDI) has been decreasing since 2014 (except for 2018) and has lagged its neighbors with similar economies. Trade flows were below those of its peers. The project will reduce trade and investment permit approval times through automatized, simplified, and standardized processes. It seeks to attract more FDI projects by strengthening Belize's investment promotion institutions. IDB research shows that for every US$1 invested in FDI promotion generates an additional US$56 in FDI. The project also promotes local Small and medium-sized enterprises (SMEs) exports by identifying and supporting export-ready SMEs. The project identifies the need for more women in senior management positions in both international and local firms. Data intelligence based on gender-disaggregated data will be included to support public sector gender equality policies and strategies, but it can also assist private investors in making location decisions, among other gender-related activities Gender inclusion, attracting more foreign investments, and joining global and regional value chains are key priorities established in the IDB's Vision 2025 to accelerate the region's economic recovery. The loan will enhance trade facilitation through reengineering and digitalizing trade administration procedures, aiming to reduce transaction costs. For instance, single window entry points can cut the time needed to prepare trade documents by 40 percent. The Ministry of Finance, Economic Development and Investment (MFEDI) will execute the loan. It has an amortization period of 25 years and an interest rate based on SOFR. As reported in the Troubled Company Reporter-Latin America on Aug. 23, 2022, S&P Global Ratings affirmed its 'B-/B' long- and short-term foreign and local currency sovereign credit ratings on Belize. The outlook on the long-term ratings remains stable. In addition, its transfer and convertibility (T&C) assessment remains at 'B-'. =========== B R A Z I L =========== BRAZIL: Bolsonaro Aims to Set Income Tax to Zero for Foreigners --------------------------------------------------------------- Richard Mann at Rio Times Online reports that a provisional measure issued by President Jair Bolsonaro reduces the income tax of foreigners who have invested in Brazil to zero. The matter was published in the Official Gazette of the Union on Sept. 22 and will now be considered by Congress, according to Rio Times Online. The law amends Law 11,312 of 2006, under which the tax rate reduction applies to income earned between Jan. 1, 2023, and Dec. 31, 2027, the report relays. The benefit may be extended to residents or domiciled abroad who are shareholders of infrastructure investment funds (FIP-IE) and investment participation in economic productions with intensive research, development, and innovation, the report notes. About Brazil Brazil is the fifth largest country in the world and third largest in the Americas. Jair Bolsonaro is the current president, having been sworn in on Jan. 1, 2019. As reported in the Troubled Company Reporter-Latin America on July 18, 2022, Fitch Ratings has affirmed Brazil's Long-Term Foreign Currency Issuer Default Rating at 'BB-' and revised the Rating Outlook to Stable from Negative. On June 17, 2022, S&P Global Ratings affirmed its 'BB-/B' long- and short-term foreign and local currency sovereign credit ratings on Brazil. Moody's Investors Service also affirmed on April 15, 2022, Brazil's long-term Ba2 issuer ratings and senior unsecured bond ratings, (P)Ba2 senior unsecured shelf ratings, and maintained the stable outlook. DBRS Inc. confirmed Brazil's Long-Term Foreign and Local Currency Issuer Ratings at BB (low) on Aug 12, 2022. At the same time, DBRS Morningstar confirmed the Federative Republic of Brazil's Short-term Foreign and Local Currency Issuer Ratings. [*] BRAZIL: Underscores Ability to Provide Clean, Low-Cost Energy ----------------------------------------------------------------- Juan Martinez at Rio Times Online reports that Brazil's Environment Minister Joaquim Leite said that the country, Latin America's largest economy, will offer itself to the international community as a secure and low-cost supplier of clean energy at a time of rising inflation, especially in Europe. Brazil's offer of low-cost energy from renewable sources will be presented at the November UN Climate Change Conference in Egypt, according to Rio Times Online. About Brazil Brazil is the fifth largest country in the world and third largest in the Americas. Jair Bolsonaro is the current president, having been sworn in on Jan. 1, 2019. As reported in the Troubled Company Reporter-Latin America on July 18, 2022, Fitch Ratings has affirmed Brazil's Long-Term Foreign Currency Issuer Default Rating at 'BB-' and revised the Rating Outlook to Stable from Negative. On June 17, 2022, S&P Global Ratings affirmed its 'BB-/B' long- and short-term foreign and local currency sovereign credit ratings on Brazil. Moody's Investors Service also affirmed on April 15, 2022, Brazil's long-term Ba2 issuer ratings and senior unsecured bond ratings, (P)Ba2 senior unsecured shelf ratings, and maintained the stable outlook. DBRS Inc. confirmed Brazil's Long-Term Foreign and Local Currency Issuer Ratings at BB (low) on Aug 12, 2022. At the same time, DBRS Morningstar confirmed the Federative Republic of Brazil's Short-term Foreign and Local Currency Issuer Ratings. ===================== E L S A L V A D O R ===================== EL SALVADOR: Fitch Cuts LongTerm Foreign Currency IDR to 'CC' ------------------------------------------------------------- Fitch Ratings has downgraded El Salvador's Long-Term Foreign Currency Issuer Default Rating (IDR) to 'CC' from 'CCC'. Fitch does not assign Outlooks to sovereigns with a rating of 'CCC+' or below. Fitch has removed the Long-Term IDR from Under Criteria Observation (UCO). KEY RATING DRIVERS Downgrade to 'CC': The downgrade of El Salvador to 'CC' reflects Fitch's view that El Salvador's tight fiscal and external liquidity positions and extremely constrained market access amid high fiscal financing needs and a large USD800 million external bond maturity in January 2023 make default of some sort probable. The government of El Salvador recently announced a voluntary cash buyback of USD360 million for its 2023 and 2025 external bonds at below par, which will likely further weaken its already strained liquidity position. In July 2022, the government had proposed a USD560 million transaction. The size and scope of the transaction does not materially alter the probability of default in Fitch's opinion. Weak Fiscal Liquidity Position: El Salvador's liquidity situation is dire ahead of the January 2023 Eurobond payment. Fitch estimates financing needs of USD3.7 billion from September 2022 through January 2023 (USD1 billion in fiscal deficit, USD1.2 billion in amortizations including the USD800 million Eurobond payment, and USD1.5 billion in short-term debt). Fitch assumes they roll over the short-term debt with the banks. Fitch estimates an unidentified financing gap of nearly USD900 million, not including any amount to buy back some of the USD800 million 2025 bond as per the announced transaction. Furthermore, expected multilateral disbursements have been slow to materialize YTD further increasing liquidity constraints. Precarious External Position: El Salvador's external position has weakened amidst a high current account deficit and upcoming external amortizations. Fitch forecasts a current account deficit of USD2.4 billion in 2022 (7.8% of GDP) and estimates nearly USD400 million in external amortizations with another USD800 million due in January 2023. External disbursements and use of Special Drawing Rights (SDRs) will cover nearly USD1.4 billion and Fitch expects FDI to reach around USD700 million and some private bank inflows as well. But there is still an unidentified gap of nearly USD1 billion. If external sources are not found, El Salvador's international reserves (comprised mostly of the banking sector's reserve requirements) could come under additional pressures, increasing the probability of a payment default. ESG - Governance: El Salvador has an ESG Relevance Score (RS) of '5' for both Political Stability and Rights and for the Rule of Law, Institutional and Regulatory Quality and Control of Corruption, as is the case for all sovereigns. These scores reflect the high weight that the World Bank Governance Indicators (WBGI) has in Fitch's proprietary Sovereign Rating Model. El Salvador has a medium WBGI percentile ranking of 39.1%, reflecting a recent track record of peaceful political transitions, a moderate level of rights for participation in the political process, moderate institutional capacity, established rule of law and a moderate level of corruption. ESG - Creditor Rights: El Salvador has an ESG Relevance Score of '5' for creditor rights as willingness to service and repay debt is highly relevant to the rating and is a key rating driver for El Salvador, given the announcement of a cash tender offer for the 2023 and 2025 external bonds at below par and the 2017 debt default on pension related debt. RATING SENSITIVITIES Factors that could, individually or collectively, lead to negative rating action/downgrade: Public Finances -Failure to make timely payment on upcoming local and/or external bond amortizations or an announcement of a distressed debt exchange. Factors that could, individually or collectively, lead to positive rating action/upgrade: Public Finances—Full and timely payment of the USD800 million January 2023 eurobond amortization and a sustained easing of financing constraints through progress in unlocking predictable sources of financing. SOVEREIGN RATING MODEL (SRM) AND QUALITATIVE OVERLAY (QO) Fitch's proprietary SRM assigns El Salvador a score equivalent to a 'B-' Long-Term Foreign Currency IDR. However, in accordance with its rating criteria, Fitch's sovereign rating committee has not utilized the SRM and QO to explain the ratings in this instance. Ratings of 'CCC+' and below are instead guided by the rating definitions. Fitch's SRM is the agency's proprietary multiple regression rating model that employs 18 variables based on three-year centered averages, including one year of forecasts, to produce a score equivalent to a Long-Term Foreign Currency IDR. Fitch's QO is a forward-looking qualitative framework designed to allow for adjustment to the SRM output to assign the final rating, reflecting factors within Fitch's criteria that are not fully quantifiable and/or not fully reflected in the SRM. Fitch's SRM is the agency's proprietary multiple regression rating model that employs 18 variables based on three-year centered averages, including one year of forecasts, to produce a score equivalent to a Long-Term Foreign Currency IDR. Fitch's QO is a forward-looking qualitative framework designed to allow for adjustment to the SRM output to assign the final rating, reflecting factors within our criteria that are not fully quantifiable and/or not fully reflected in the SRM. ESG CONSIDERATIONS El Salvador has an ESG Relevance Score of '5' for Political Stability and Rights as World Bank Governance Indicators have the highest weight in Fitch's SRM and are therefore highly relevant to the rating and a key rating driver with a high weight. As El Salvador has a percentile rank below 50 for the respective Governance Indicator, this has a negative impact on the credit profile. El Salvador has an ESG Relevance Score of '5' for Rule of Law, Institutional, Regulatory Quality and Control of Corruption as World Bank Governance Indicators have the highest weight in Fitch's SRM and are therefore highly relevant to the rating and are a key rating driver with a high weight. As El Salvador has a percentile rank below 50 for the respective Governance Indicators, this has a negative impact on the credit profile. El Salvador has an ESG Relevance Score of '5' for Creditor Rights as willingness to service and repay debt is highly relevant to the rating and is a key rating driver for El Salvador given the announcement of a cash tender offer for the 2023 and 2025 bonds at below par and the 2017 debt default on pension related debt. El Salvador has an ESG Relevance Score of '4' for Human Rights and Political Freedoms as the Voice and Accountability pillar of the World Bank Governance Indicators is relevant to the rating and a rating driver. As El Salvador has a percentile rank below 50 for the respective Governance Indicator, this has a negative impact on the credit profile. 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. Debt Rating Prior ---- ------ ----- El Salvador LT IDR CC Downgrade CCC ST IDR C Affirmed C Country Ceiling B- Affirmed B- senior unsecured LT CC Downgrade CCC =========== M E X I C O =========== BUPA MEXICO: A.M. Best Affirms C++(Marginal) Fin. Strength Rating ----------------------------------------------------------------- AM Best has revised the outlooks to positive from stable and affirmed the Financial Strength Rating of C++ (Marginal), the Long-Term Issuer Credit Rating of "b+" (Marginal), and the Mexico National Scale Rating of "bbb.MX" (Good) of BUPA Mexico, Compania de Seguros, S.A. de C.V. (Bupa Mexico) (Mexico). The Credit Ratings (ratings) reflect Bupa Mexico's balance sheet strength, which AM Best assesses as weak, as well as its adequate operating performance, limited business profile and appropriate enterprise risk management. The positive outlooks result from improvements in the company's balance sheet strength underpinned by an adequate risk-adjusted capitalization, as measured by Best's Capital Adequacy Ratio (BCAR), following the company's change in reinsurance program, and fully retained quality business. Bupa Mexico is a subsidiary of Bupa Insurance Company (BIC), and is tied to the group's commercial strategy of expanding into Mexico's insurance market, leveraging on the Bupa brand. Bupa Mexico's focus is on the individual and group major medical coverage segment, and the individual segment represents the biggest share of business, at approximately 89%. The target market used to be small clients with high net worth; however, the company is seeking to diversify itself by opening up coverage to other sectors, with a higher volume of lower premium business. The company's historically favorable financial flexibility was achieved through the capital and reinsurance support historically provided by its ultimate parent. Beginning in third-quarter 2021, changes in the Mexico-based subsidiary's reinsurance program significantly raised its underwriting risk, pressuring BCAR. Nonetheless, the company's flagship business, which previously was ceded for the most part, historically has demonstrated operating performance in line with industry benchmarks, enhancing the company's balance sheet strength assessment. Bupa Mexico's business volume has outpaced the market for the past five years, resulting in a compound annual growth rate of 17%. However, an offsetting rating factor is the small size of the subsidiary, reflected in a market share of 3% as of December 2021 in an industry led by bigger participants. As of August 2022, Bupa Mexico posted a positive bottom-line result of MXN 193 million, which was mainly a result of contained claims, as well as a transition to an internal service team, which includes areas of customer service and a core business system. The company foresees these changes reducing operating expenses in the medium term; however, a challenging and concentrated operating environment raise uncertainty over the expected success of the new business strategy. Positive rating actions could occur as a result of sustained improvement in balance sheet strength as a consequence of the new business strategy being successfully executed. Negative rating actions could occur if the strategic importance of the company to Bupa group decreases, which could diminish AM Best's expectations of parental support toward the Mexico-based subsidiary. Negative rating actions could also take place as a result of the execution risk derived from the new business strategy. ELECTRICIDAD FIRME: Fitch Affirms 'BB' IDRs, Outlook Stable ----------------------------------------------------------- Fitch Ratings has affirmed Electricidad Firme de Mexico Holdings, S.A. de C.V. (EFM) Local Currency and Foreign Currency Issuer Default Rating (IDR) at BB. The Rating Outlook is Stable. The ratings also apply to the USD350 million senior secured notes due in 2026. The notes are secured by the first-priority lien on EFM and Electricidad Cometa de México, S.A. de C.V. shares. EFM's ratings are linked to Cometa Energia 's (Cometa, BBB-/Stable) credit profile. EFM indirectly owns 100% of Cometa and is EFM's only source of dividends to service debt. The ratings are constrained by EFM's high leverage and structural subordination to Cometa's creditors. KEY RATING DRIVERS Stable Dividend Stream: EFM's ratings are supported by the quality of the dividends received from its 100% ownership of Cometa. The company's cash flow is supported by strong and stable cash flows in the generation business and predictable dividend streams. Fitch forecasts dividends received from Cometa to average USD70 million in the next four years. EFM benefits from Cometa's good market position as an efficient independent power producer in Mexico and its adequate capital structure. Structural Subordination: EFM's outstanding notes are structurally subordinated to Cometa 's senior secured USD753 million outstanding notes as of June 2022 due in 2035. EFM is a holding company that depends on dividends received from Cometa to service its own financial obligations. Therefore, a substantial increase in leverage at Cometa could increase the structural subordination of EFM's creditors. This risk is mitigated by Cometa's track record of stable dividend distributions. The projected dividend stream should be more than sufficient to cover interest expense resulting from the issuance. High Leverage: EFM's capital structure after the issuance is high. Fitch expects leverage at the holding company level, measured by holdco debt/cash distributions to range from 4.8x-5.0x in the next four years compared to 3.8x in 2021. On a consolidated basis, leverage is expected to reach 5.4x in 2022 and range from 4.5x-4.8x in the medium term. The amortized structure of Cometa's notes reduces the group's exposure to refinancing risk. Parent Subsidiary Linkage: A Parent and Subsidiary linkage exits between Electricidad Firme de Mexico Holdings, S.A. de C.V. (EFM, BB/Stable) and its stronger operating subsidiary Cometa. On Fitch´s Linkage Factor Assessment, there is an insulated legal ring-fencing relationship because Cometa has a covenant restricting dividend distribution to a minimum of 1.2x debt service coverage ratio (DSCR) after distribution. In addition, there is an insulated access and control relation despite EFM 100% ownership of Cometa, each entity has its own treasury and funding strategies. EFM will provide an LOC in the total amount of USD60 million until the amortization of Cometa's notes in 2035 in order to comply with the fulfilment of the subsidiary's debt service reserve account. Off-Taker Risk Limits Cometa's Ratings: Cometa's ratings are constrained by the credit profile of its main off-takers under long-term Power Purchase Agreements (PPAs) and compression service agreements and by the Mexican operating environment. Comissions Federal de Electricidad (BBB-/Stable) and CENAGAS will represent around 37% of EBITDA, while Mercado Mayorista will represent around 13.5% of EBITDA in 2022, exposing the company to off-taker risk or the Mexican market despite its deleveraging trajectory. Fitch views positively the company's off-taker diversification and energy exports to the CAISO system in California, which is expected to represent around 18% of its EBITDA in 2022. DERIVATION SUMMARY EFM's ratings compare well to those of other holdco utility companies in the region, such as A.I. Candelaria (BB/Stable) and Nautilus Inkia Holdings SCS (BB/Stable). These holdcos depend on the cash distributions of its main subsidiary, Cometa (BBB-/Stable), OCENSA (BB+/Stable) and Kallpa Generacion (BBB-/Stable), respectively, to service its financial obligations. EFM is rated at the same level as A.I. Candelaria. A.I. Candelaria's amortizing notes will contribute to leverage at the holdco level, which Fitch estimates to trend towards 4.5x in 2022 and below thereafter, while EFM's leverage should be in the 4.8x-5.0x range throughout the life of the transaction. EFM is rated at the same level as Inkia. Fitch expects both companies to operate with similar consolidated leverage of 4.5x-5.0x in the medium term, although Inkia's holdco leverage is much stronger at around 2.5x. While Inkia is more geographically diversified, this benefit is offset by its subsidiaries' locations in lower-rated countries. KEY ASSUMPTIONS Fitch's Key Assumptions Within Its Rating Case for the Issuer: -- EFM's Average annual EBITDA after associates at above USD200 million; -- Capex of USD92 million in 2022 and USD20 million in 2023; -- Average Annual Cash distribution of Cometa of USD70 million; contingent on meeting the required debt service reserve account and 1.2x DSCR. -- Excess cash is used for capex, acquisition or distribution to shareholders. RATING SENSITIVITIES Factors that could, individually or collectively, lead to positive rating action/upgrade: -- An upgrade of Cometa Energia credit ratings; -- Leverage measured as holdco debt/cash distributions below 4.5x over the rating horizon while consolidated leverage measured as total debt/EBITDA is below 4.5x on a sustained basis. Factors that could, individually or collectively, lead to negative rating action/downgrade: -- A downgrade of Cometa Energia credit ratings; -- A significant additional debt at Cometa Energia's level, which increases the structural subordination of EFM; -- Leverage measured as holdco debt/cash distributions above 5.0x over the rating horizon while consolidated leverage measured as total debt/EBITDA is above 5.0x on a sustained basis. LIQUIDITY AND DEBT STRUCTURE Adequate Liquidity: EFM liquidity is adequate and supported by readily available cash and consistently cash distribution from its single subsidiary, Cometa Energia. EFM Debt service is limited to the interest payments through the medium term and the notes mature in 2026. The debt service reserve account represents a liquidity buffer over the medium term which must cover the payment in full of interest and principal, if any, due on the notes on the next one succeeding payment. As of June 2022, the group reported USD40 million of cash and cash equivalents of which USD34 million were at Cometa level. ISSUER PROFILE EFM is the indirect owner of 100% of the equity interest in Cometa, which has USD753 million debt outstanding under its senior secured notes as of June 2022 and is its sole cash flow contributor. 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. Debt Rating Prior ---- ------ ----- Electricidad Firme de Mexico Holdings, S.A. de C.V. LT IDR BB Affirmed BB LC LT IDR BB Affirmed BB senior secured LT BB Affirmed BB ===================== P U E R T O R I C O ===================== PUERTO RICO: Wachtell, McConnell Advise on Fuel Line Lenders ------------------------------------------------------------ Pursuant to Rule 2019 of the Federal Rules of Bankruptcy Procedure, the law firms of Wachtell, Lipton, Rosen & Katz and McConnell Valdes LLC submitted a verified statement to disclose that they are representing the Ad Hoc Group of Fuel Line Lenders in the Chapter 11 cases of Puerto Rico Electric Power Authority. In the PREPA Title III Case, Wachtell, Lipton, Rosen & Katz and McConnell Valdes LLC represent the Ad Hoc Group of Fuel Line Lenders. Wachtell Lipton and McConnell also represent Cortland as successor administrative agent under the Credit Agreement. Simpson Thacher & Bartlett LLP represents Cortland with respect to Adversary Proceeding No. 19-00396 in the PREPA Title III case. Filings in PREPA's Title III case have been made on behalf of Cortland as administrative agent. As of Sept. 16, 2022, members of the Ad Hoc Group of Fuel Line Lenders and their disclosable economic interests are: Anchorage Capital Group, L.L.C. 610 Broadway 6th Floor New York, NY 10012 Fuel Lines: $69,000,000.00 Brigade Capital Management, LP 399 Park Avenue 16th Floor New York, NY 10022 Fuel Lines: $76,081,818.18 Davidson Kempner Capital Management LP 520 Madison Avenue 30th Floor New York, NY 10022 Fuel Lines: $139,993,182.00 $13,000,000.00 (Citibank Facility) Bonds/Other: $88,835,027.00 Hain Capital Investors Master Fund Ltd. 301 Route 17 7th Floor Rutherford, NJ 07070 Fuel Lines: $10,000,000.00 Bonds/Other: $4,203,767.02 (Trade Claim # 12398) Marathon Asset Management, LP 1 Bryant Park 38th Floor New York, NY 10036 Fuel Lines: $57,680,274.40 Serengeti Asset Management, LP 632 Broadway 9th Floor New York, NY 10012 Fuel Lines: $15,000,000.00 Silver Point Capital, L.P. Two Greenwich Plaza Greenwich, CT 06830 Fuel Lines: $40,000,000.00 $35,000,000.00 (Citibank Facility) HTA-Bonds/Other: $34,673.00 PREPA-Bonds/Other: $1,212,978.00 Solus Alternative Asset Management LP 25 Maple Street 2nd Floor Summit, NJ 07901 Fuel Lines: $73,487,500.00 $98,041,914.24 (Citibank Facility) Whitehaven Asset Management, LP 777 West Putnam Avenue 1st Floor Greenwich, CT 06830 Fuel Lines: $60,957,225.51 HTA-Bonds/Other: $9,505,000.00 PREPA-Bonds/Other: $375,000.00 No Member represents or purports to represent any other Member or entity in connection with the Debtors' Chapter 11 Cases. In addition, each Member of the Ad Hoc Group of Fuel Line Lenders (a) does not assume any fiduciary or other duties to any other creditor or person and (b) does not purport to act, represent or speak on behalf of any other entities in connection with the PREPA Title III case. Counsel for Cortland Capital Market Services LLC, as Administrative Agent can be reached at: Nayuan Zouairabani, Esq. MCCONNELL VALDAS LLC 270 Munoz Rivera Avenue, Suite 7 Hato Rey, Puerto Rico 00918 P.O. Box 364225 San Juan, PR 00936-4225 Telephone: (787) 250-5604 Facsimile: (787) 759-9225 E-mail: nzt@mcvpr.com - and Richard G. Mason, Esq. Amy R. Wolf, Esq. Emil A. Kleinhaus, Esq. Angela K. Herring, Esq. Michael H. Cassel, Esq. WACHTELL, LIPTON, ROSEN & KATZ 51 West 52nd Street New York, NY 10019 Telephone: (212) 403-1000 Facsimile: (212) 403-2000 E-mail: rgmason@wlrk.com E-mail: arwolf@wlrk.com eakleinhaus@wlrk.com akherring@wlrk.com mhcassel@wlrk.com A copy of the Rule 2019 filing, downloaded from PacerMonitor.com, is available at https://bit.ly/3BAhavO About Puerto Rico Puerto Rico is a self-governing commonwealth in association with the United States that's facing a massive bond debt of $70 billion, a 68% debt-to-GDP ratio and negative economic growth in nine of the last 10 years. The Commonwealth of Puerto Rico has sought bankruptcy protection, aiming to restructure its massive $74 billion debt-load and $49 billion in pension obligations. The debt restructuring petition was filed by Puerto Rico's financial oversight board in U.S. District Court in Puerto Rico (Case No. 17-01578) on May 3, 2017, and was made under Title III of 2016's U.S. Congressional rescue law known as the Puerto Rico Oversight, Management, and Economic Stability Act ('PROMESA'). The Financial Oversight and Management Board later commenced Title III cases for the Puerto Rico Sales Tax Financing Corporation (COFINA) on May 5, 2017, and the Employees Retirement System (ERS) and the Puerto Rico Highways and Transportation Authority (HTA) on May 21, 2017. On July 2, 2017, a Title III case was commenced for the Puerto Rico Electric Power Authority ("PREPA"). U.S. Chief Justice John Roberts has appointed U.S. District Judge Laura Taylor Swain to oversee the Title III cases. The Honorable Judith Dein, a United States Magistrate Judge for the District of Massachusetts, has been designated to preside over matters that may be referred to her by Judge Swain, including discovery disputes, and management of other pretrial proceedings. Joint administration of the Title III cases, under Lead Case No. 17-3283, was granted on June 29, 2017. The Oversight Board has hired as advisors, Proskauer Rose LLP and O'Neill & Borges LLC as legal counsel, McKinsey & Co. as strategic consultant, Citigroup Global Markets, as municipal investment banker, and Ernst & Young, as financial advisor. Martin J. Bienenstock, Esq., Scott K. Rutsky, Esq., and Philip M. Abelson, Esq., of Proskauer Rose; and Hermann D. Bauer, Esq., at O'Neill & Borges are on-board as attorneys. McKinsey & Co. is the Board's strategic consultant, Ernst & Young is the Board's financial advisor, and Citigroup Global Markets Inc. is the Board's municipal investment banker. Prime Clerk LLC is the claims and noticing agent. Prime Clerk maintains a case web site at https://cases.primeclerk.com/puertorico Epiq Bankruptcy Solutions LLC is the service agent for ERS, HTA, and PREPA. O'Melveny & Myers LLP is counsel to the Commonwealth's Puerto Rico Fiscal Agency and Financial Advisory Authority (AAFAF), the agency responsible for negotiations with bondholders. The Oversight Board named Professor Nancy B. Rapoport as fee examiner and to chair a committee to review professionals' fees. =============== X X X X X X X X =============== CREDIT SUISSE: To Consider Selling LatAm Wealth Management Unit --------------------------------------------------------------- Rocco Caldero at Rio Times Online reports that Credit Suisse Group AG (CS) is considering selling its wealth management operations in Latin America, part of a broad overhaul it seeks to carry out as part of a planned restructuring. Brazil, however, would remain under CS's purview, according to Rio Times Online. The bank operates in countries such as Mexico and Colombia and is in contact with potential buyers, the report notes. As reported in the Troubled Company Reporter-Europe in August 2022, Fitch Ratings has downgraded Credit Suisse Group AG's Subordinated Debt Rating to BB+. LATAM: Caricom Survey Finds Hike in Food Insecurity --------------------------------------------------- Trinidad Express reports that a CARICOM survey has revealed that the number of people facing moderate to severe levels of food insecurity in the English-speaking Caribbean has risen to 4.1 million or 57 per cent of the population. The findings were published in the latest report of the Fifth Round of the Caribbean Community (Caricom) Food Security and Livelihoods Survey, according to Trinidad Express. The survey was conducted by Caricom and the United Nations World Food Program (WFP) with the support of the European Union and the United States Agency for International Development (USAID), Bureau of Humanitarian Assistance, the report notes. Administered in July and August this year, the survey reflects the situation of over 6,300 households across 22 countries and territories, the report relays. "The survey results . . . . along with the realities highlighted simply cement the need for the region to reinvigorate its efforts and engage in new solutions to help the vulnerable groups and those living in poverty within the region, the report relays. "It emphasizes the necessity for further urgent collective action and support in addressing regional food and nutrition security. It highlights the need to increase the production of what we eat and facilitate intraregional trade," said Caricom Assistant Secretary-General, Joseph Cox, the report notes. He said that the results reveal, for the first time in five surveys over two years, that respondents top concern was over being able to meet basic food needs (48 per cent), followed by meeting essential needs (48 per cent) and unemployment (36 per cent), the report says. Cox said concerns arose as a result of the sharp increase of global food prices at the start of the Russia-Ukraine conflict, the report notes. "Major market supply disruptions of key inputs into production such as fertilisers and fuel drove up local food prices. The spikes have deteriorated food and consumption diets and destabilized and impacted the access, availability and utilisation of food," the report notes. Based on the survey results, it is estimated that 4.1 million people out of 7.1 million (57 per cent) in the English-speaking Caribbean are food insecure with Cox noting "this is a dramatic increase of 1.3 million since February 2022," the report adds. ********* S U B S C R I P T I O N I N F O R M A T I O N Troubled Company Reporter-Latin America is a daily newsletter co-published by Bankruptcy Creditors' Service, Inc., Fairless Hills, Pennsylvania, USA, and Beard Group, Inc., Washington, D.C., USA, Marites O. Claro, Joy A. Agravante, Rousel Elaine T. Fernandez, Julie Anne L. Toledo, Ivy B. Magdadaro, and Peter A. Chapman, Editors. Copyright 2022. All rights reserved. ISSN 1529-2746. This material is copyrighted and any commercial use, resale or publication in any form (including e-mail forwarding, electronic re-mailing and photocopying) is strictly prohibited without prior written permission of the publishers. Information contained herein is obtained from sources believed to be reliable, but is not guaranteed. The TCR Latin America subscription rate is US$775 per half-year, delivered via e-mail. Additional e-mail subscriptions for members of the same firm for the term of the initial subscription or balance thereof are US$25 each. For subscription information, contact Peter A. Chapman at 215-945-7000. . * * * End of Transmission * * *