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       T R O U B L E D   C O M P A N Y   R E P O R T E R

                 L A T I N   A M E R I C A

          Thursday, December 29, 2022, Vol. 23, No. 254

                           Headlines



A R G E N T I N A

ARGENTINA: IMF Board Completes 3rd Review of EFE


B R A Z I L

BANCO NACIONAL:  Okays Financing of US$94M for Embraer's Flying Car


D O M I N I C A N   R E P U B L I C

DOMINICAN REPUBLIC: Says Economy "On the Right Track"


V E N E Z U E L A

PDVSA: Hunts Oil for Cash in New Caribbean Agreements

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A R G E N T I N A
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ARGENTINA: IMF Board Completes 3rd Review of EFE
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The Executive Board of the International Monetary Fund (IMF)
completed the third review of the extended arrangement under the
Extended Fund Facility (EFF) for Argentina. The Board's decision
enables an immediate disbursement of SDR 4.5 billion (about US$6
billion), bringing total disbursements under the arrangement to
about US$23.5 billion.

In completing the review, the Executive Board assessed that all
quantitative performance criteria through end-September 2022 were
met, on the back of prudent macroeconomic management by the new
economic team. In addition, the Board also approved waivers of
non-observance associated with the introduction of policy measures
that gave rise to new exchange restrictions and multiple currency
practices and called for their unwinding as conditions permit.

Argentina's 30-month EFF arrangement, with access of SDR 31.914
billion (equivalent to US$44 billion, or about 1000 percent of
quota), was approved on March 25, 2022 (see Press Release No.
22/89). The authorities' IMF-supported program provides Argentina
with balance of payments and budget support that is linked to the
implementation of polices to strengthen public finances, tackle
persistent high inflation, improve reserve coverage, and set the
basis for sustained and inclusive economic growth.

At the conclusion of the Executive Board's discussion, Ms. Gita
Gopinath, First Deputy Managing Director and Acting Chair, made the
following statement:

"Continued decisive policy actions are starting to bear fruit.
Against a more challenging external and domestic backdrop, resolute
policy implementation, including tightening of fiscal and monetary
policies, is leading to a reduction in inflation as well as
improvements in the trade balance and reserve coverage.
Nevertheless, macroeconomic imbalances persist, and conditions
remain fragile. Continued enhanced program implementation will
therefore be critical to achieve key program objectives and
maintain the program as an anchor for stability. Exchange
restrictions and multiple currency practices should be avoided and
unwound as early as conditions permit, and macroeconomic imbalances
are addressed.

"Fiscal consolidation as budgeted will be needed to support the
disinflation and reserve accumulation processes, alleviate
financing pressures, and strengthen debt sustainability. Reducing
the primary fiscal deficit to 1.9 percent of GDP in 2023 while
providing space for priority infrastructure spending will require
continued efforts to mobilize revenues, strengthen expenditure
controls, and, importantly, improve the targeting of energy
subsidies and social assistance. The timely implementation of
measures will be critical to boost credibility.

"Sustained positive real interest rates remain essential to reduce
persistent high inflation and strengthen the demand for peso
assets. In addition, it would allow for improvements in
competitiveness and reserve coverage, while avoiding reliance on
ad-hoc FX incentives and restrictions as they are not a substitute
to consistent macroeconomic policies. Meanwhile, voluntary price
and wage coordination could play a complementary role as
macroeconomic imbalances are addressed.

"A proactive market-oriented debt management strategy is vital to
mobilize domestic financing, mitigate rollover risks, and reduce
central bank financing of the deficit. Building on recent progress,
including the welcome restructuring agreement with Paris Club
creditors, mobilizing support from multilateral and bilateral
partners remains essential to ensure financing commitments are met
and reserve coverage is strengthened.

"Continued efforts on the structural front remain key to support
broader macroeconomic goals, including by strengthening public
financial management, the peso government debt market, AML/CFT
framework, the central bank balance sheet, and the efficiency and
sustainability of the energy sector.

"Agile policy making remains essential to meet program objectives,
and further policy actions could be necessary to safeguard
macroeconomic stability if downside risks materialize. Broad
political support for program policies remains critical in the
period ahead."

                     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 in the Troubled Company Reporter-Latin America on Nov.
18, 2022, S&P Global Ratings affirmed its 'CCC+/C' foreign currency
sovereign credit ratings on Argentina. S&P lowered the long-term
local currency sovereign credit rating to 'CCC-' from 'CCC+' and
the national scale rating to 'raCCC+' from 'raBBB-'. S&P also
affirmed its 'C' short-term local currency rating. The outlook on
the long-term ratings is negative. S&P's 'CCC+' transfer and
convertibility assessment is unchanged.

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.




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B R A Z I L
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BANCO NACIONAL:  Okays Financing of US$94M for Embraer's Flying Car
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Adele Cardin at Rio Times Online reports that Eve Solucoes de
Mobilidade Aerea Urbana Ltda (Eve), an independent company founded
by Embraer, will receive R$490 (US$94) million from the National
Bank for Economic and Social Development (BNDES) to execute the
first phase of the project for the production of electric vertical
takeoff and landing aircraft (eVTOL).

With zero local emissions, the vehicle will be available on the
market starting in 2026, according to Rio Times Online.

According to the bank, the vehicle, known as the flying car, "will
be designed to perform urban flights, with low noise levels and
greater sustainability when compared to traditional vehicles, the
report notes.

As reported in the Troubled Company Reporter-Latin America on June
7, 2022, Fitch Ratings has affirmed the Long-Term Foreign and Local
Currency Issuer Default Ratings (IDRs) of Banco Nacional de
Desenvolvimento Economico e Social (BNDES) at 'BB-' with a Negative
Rating Outlook.  Fitch also affirmed BNDES's long-term National
Rating at 'AA(bra)'/Stable.




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D O M I N I C A N   R E P U B L I C
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DOMINICAN REPUBLIC: Says Economy "On the Right Track"
-----------------------------------------------------
Dominican Today reports that Jose Manuel Vicente, Minister of
Finance, stated that the country is economically on a "good path"
because all loans requested by the Executive Power and approved by
the National Congress were previously budgeted.

"Amid the country's worst economic and health crisis, we addressed
and resolved this situation by keeping the debt as a percentage of
GDP (gross domestic product) the same, but with a downward trend,
that we received when we came to power (August 16, 2020); From the
Ministry of Finance, we are committed to the issue of debt
sustainability," Vicente explained, according to Dominican Today.

According to the official, the fact that the financial entity
"Standard & Poor's" has given the country the highest credit
rating, "BB," is a "recognition" of the "good path" that it has
taken in terms of monetary and fiscal policies, the report notes.

The minister's remarks were made at a press conference held at the
National Palace, after the spokesman for the Dominican Liberation
Party (PLD) bench, Yvan Lorenzo called the upper house of
Congress's attempt to approve a US$140 million loan a
"provocation", the report relays.

                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.

As reported in the Troubled Company Reporter-Latin America on Dec.
21, 2022,  S&P Global Ratings raised its long-term foreign and
local currency sovereign credit ratings on the Dominican Republic
to 'BB' from 'BB-'. The outlook on the long-term ratings is stable.
S&P affirmed its 'B' short-term sovereign credit ratings. S&P also
revised its transfer and convertibility (T&C) assessment to 'BBB-'
from 'BB+'.

The 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.




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V E N E Z U E L A
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PDVSA: Hunts Oil for Cash in New Caribbean Agreements
-----------------------------------------------------
Jamaica Observer reports that analyst source Bloomberg is
highlighting how Venezuela's State oil company is pushing to revive
the flagging energy pact with Caribbean countries under different
terms as it seeks markets that are willing to pay cash for oil and
refined products.

In a CMC report, St Vincent and the Grenadines Prime Minister Dr
Ralph Gonsalves disclosed the type of agreements being sought,
noting that Caracas has agreed to cancel St Vincent and the
Grenadines' debt under Petrocaribe, according to Jamaica Observer.

Bloomberg said that overall, Petroleos de Venezuela SA (PDVSA) is
lobbying island governments to negotiate terms for the new
shipments under a revived Petrocaribe agreement, an arrangement
abandoned four years ago as oil production fell and also as
Petrocaribe members ran up debts for the shipments, the report
notes.

Petrocaribe was a multilateral agreement between Venezuela and 13
Caribbean countries which created the Petrocaribe Initiative, the
report relays.  Subsequently, the membership was increased,
bringing the total to 18 countries, the report notes.

However, it fell victim to cooling US policy and increased
sanctions, with Caribbean members only now calling for a revival as
oil prices increase, the report relays.

Gonsalves said that approximately 23,000 barrels of oil will arrive
in the country by the end of October under Venezuela's Petrocaribe
agreement, the report notes.

Gonsalves said in the CMC report that Venezuela would half the debt
of the other member countries of the Organization of Eastern
Caribbean States that are members of Petrocaribe, which will now be
reset to offer fuel at 35 per cent discount to participating
countries, the report discloses.

The Caribbean leader said there would also be "a revival of
Petrocaribe, which has been brought to a screeching halt
effectively by certain sanctions," the report relays.

                        Turnaround

The turnaround in regional attitudes to Venezuela has been
occasioned by the Russia-Ukraine war which has led to spiralling
oil prices, the report relays.

Bloomberg noted how nations throughout the Caribbean "have been
publicly calling on the US to ease sanctions on Venezuela, and
allow it to resume its cheap-oil diplomacy at a time when the
region is getting hit with soaring energy costs," the report
notes.

The Jamaica Observer reached out to the Ministry of Finance and
Planning (MOFP) in Jamaica and also to Petrojam to find out if the
island had been approached by Petroleos de Venezuela SA with its
offer of debt relief and subsidized oil for cash, the report says.

However, no response was received up to press time.

Meanwhile, Argus Media which tracks oil production said that output
in Venezuela is still below par, the report relays.

It noted that while the PdV report for September indicated many
fields were not producing any oil, production from the Orinoco belt
is expected to get a boost from new contracts with its neighbors,
the report notes.

                         Relationship

Jamaica's relationship with Venezuela under the Petrocaribe
Agreement was inked in 2005, with guaranteed supplies of petroleum
products and repayment allowed over 23 years using goods and
services, the report says.

Member countries were allowed to retain part of their payment in
the form of a low interest loan, the report discloses.

Within the ambit of the agreement, Venezuela purchased 49 per cent
of the shares in the Petrojam Refinery in 2008 and promised to
underwrite its upgrade, the report relays.

The current Jamaican Government, however, in response to increased
US sanctions on the Venezuelan Government, expropriated Venezuela's
share of the refinery after passing legislation to take
Venezuela/PDV-Caribe's Petrojam shares in January 2019, the report
notes.

The payment for the holding was reportedly placed in escrow, as
under US sanctions sending cash with/banking relationships with
Venezuela is not permitted, the report relays.

The Business Observer sought an update on funds held in escrow from
the MOFP, but this was not forthcoming, the report notes.

Local manufacturers have been protesting the impact of sustained,
high energy costs, the report discloses.

Crude oil could soar to $125 per barrel next year and $150 in 2023
due to OPEC's limited capacity to boost production, JP Morgan
analysts said in a new report this October, the report notes.

The US, meanwhile, has indicated interest in diversifying energy
sources since the Russia Ukraine war, the report relays.  Even
though it is constantly at odds with Venezuela, it was the South
American country's largest trade partner in the last decade, the
report says.

John Kimel man, writing for Investopedia, noted how in 2019, the US
imposed a ban on the importation of Venezuela oil shortly after
President Nicholas Maduro won re-election in a vote seen as
fraudulent, the report discloses.

However, the Biden Administration is reconsidering that decision in
the wake of the US ban on the importation of Russian crude oil and
some petroleum products in its sustained campaign against the
Russian-led war in the Ukraine, the report adds.

                          About PDVSA

Founded in 1976, Petroleos de Venezuela, S.A. (PDVSA) is the
Venezuelan state-owned oil and natural gas company, which engages
in exploration, production, refining and exporting oil as well as
exploration and production of natural gas.  It employs around
70,000 people and reported $48 billion in revenues in 2016.

In May 2019, Moody's Investors Service withdrew all the ratings of
Petroleos de Venezuela, S.A. including the senior unsecured and
senior secured ratings due to insufficient information. At the
time of withdrawal, the ratings were C and the outlook was stable.

Citgo Petroleum Corporation (CITGO) is Venezuela's main foreign
asset.  CITGO is majority-owned by PDVSA.  CITGO is a United
States-based refiner, transporter and marketer of transportation
fuels, lubricants, petrochemicals and other industrial products.

However, CITGO formally cut ties with PDVSA at about February 2019
after U.S. sanctions were imposed on PDVSA.  The sanctions are
designed to curb oil revenues to the administration of President
Nicolas Maduro and support for the Juan Guaido-headed party.


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S U B S C R I P T I O N   I N F O R M A T I O N

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