/raid1/www/Hosts/bankrupt/TCRLA

/raid1/www/Hosts/bankrupt/TCRLA_Public/230227.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 Monday, February 27, 2023, Vol. 24, No. 42 Headlines B R A Z I L BRAZIL: Industrial Inflation Ends 2022 With a High of 3.13% D O M I N I C A N R E P U B L I C DOMINICAN REPUBLIC: 32% of Cigarettes Sold in 2022 Were Illegal DOMINICAN REPUBLIC: Shows Level of Economic Inequality in LatAm G U A T E M A L A ENERGUATE TRUST: Fitch Hikes LongTerm IDRs to 'BB', Outlook Stable [*] Fitch Takes Actions on Five Guatemalan Banks J A M A I C A DIGICEL GROUP: Fitch Lowers LongTerm Issuer Default Rating to 'CC' JAMAICA: Interest Paid on Deposit Accounts Not in Line With Policy P U E R T O R I C O ESJ TOWERS: Gets OK to Tap Luis Muniz as Special Counsel INSIGHT MANAGEMENT: Case Summary & 20 Largest Unsecured Creditors T R I N I D A D A N D T O B A G O TRINIDAD & TOBAGO: Finance Minister Faces Lower Natural Gas Prices X X X X X X X X [*] BOND PRICING: For the Week Feb. 20 to Feb. 24, 2023 - - - - - =========== B R A Z I L =========== BRAZIL: Industrial Inflation Ends 2022 With a High of 3.13% ----------------------------------------------------------- Richard Mann at Rio Times Online reports that industrial sector prices in Brazil fell 1.29% in December 2022 compared to the previous month, the 5th negative result in sequence. With this, industry inflation closed in 2022 with a high of 3.13%, the 3rd lowest accumulated value since the beginning of the historical series in 2014. The data are from the IPP (Producer Price Index), released on February 1 by IBGE. The 2022 high was approximately 25 p.p. (percentage points) lower than 2021, according to Rio Times Online. About Brazil Brazil is the fifth largest country in the world and third largest in the Americas. Luiz Inacio Lula da Silva won the 2022 Brazilian general election. He was sworn in on January 1, 2023, as the 39th president of Brazil, succeeding Jair Bolsonaro. As recently reported in the Troubled Company Reporter-Latin America, Fitch Ratings, in December 2022, affirmed Brazil's Long-Term Foreign Currency Issuer Default Rating (IDR) at 'BB-' with a Stable Outlook. The ratings are constrained by high government indebtedness, a rigid fiscal structure, weak economic growth potential, and a record of governability challenges that have hampered efforts to address these fiscal and economic issues and clouded policy predictability. The Stable Outlook reflects Fitch's expectation that growth will slow in the coming year and that recent fiscal improvement will erode under a new government, but within a margin consistent with the current rating, and from a better starting point than previously expected. Uncertainty is elevated regarding the plans of the incoming government and the extent to which these could ease or aggravate fiscal and economic challenges. However, Fitch does not expect policies that jeopardize broad economic stability. Standard & Poor's affirmed its 'BB-/B' long- and short-term foreign and local currency sovereign credit ratings on Brazil, and the outlook remains stable (June 2022). The stable outlook reflects S&P's base-case assumption that Brazil will maintain its fiscal anchors over the next two years despite an increasing interest burden, preventing significant fiscal slippage and limiting the rise in its already high debt burden. Moody's credit rating for Brazil was last set at Ba2 in 2018 with stable outlook. Moody's affirmed the Ba2 issuer ratings and senior unsecured bond ratings in April 2022. DBRS's credit rating for Brazil is BB (low) with stable outlook (March 2018). =================================== D O M I N I C A N R E P U B L I C =================================== DOMINICAN REPUBLIC: 32% of Cigarettes Sold in 2022 Were Illegal --------------------------------------------------------------- Dominican Today reports that according to the Ministry of Industry, Commerce, and Mipymes (MICM) and the Specialized Body for the Control of Fuels and Merchandise Trade (Ceccom), by 2022, 32.5% of cigarettes sold in the Dominican Republic were illegal. The institutions shared a report with statistical data on the illicit trade of this type of product through a press release, highlighting that irregular marketing of cigarettes has decreased by 2.8 % since 2021 when 372 million units of illegal cigarettes circulated in the country, according to Dominican Today. Between January and December of 2022, approximately 34,717,869 illegally traded cigarettes were seized in Dominican territory, the report notes. According to the document, Dajabon had the highest rate of operations performed. According to industry data, Capital, which is manufactured in the United Arab Emirates (Dubai) and arrives in the country via land and/or sea crossings on the Haitian-Dominican border, has the highest incidence in the Dominican Republic, the report notes. It is estimated that the treasury did not receive 11.3 billion pesos between 2016 and 2022. In terms of cigarettes, this volume of contraband is equivalent to the circulation of around 2.1 billion units of the Capital brand, says the note, the report relays. According to the statement, the economic impact of illegal trade reduces benefits, jobs, and the ability to contract more services from companies and formal businesses, the report discloses. In this sense, the amount of money made by informal groups profiting from this illegal trade does not compensate for the formal economy of that sector, 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. TCRLA reported in April 2019 that the Dominican To related 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. Fitch Ratings, in December 2021, revised the Outlook on Dominican Republic's Long-Term Foreign-Currency Issuer Default Rating (IDR) to Stable from Negative and affirmed the IDRs at 'BB-'.The revision of the Outlook to Stable reflects the narrowing of Dominican Republic's government deficit and financing needs since Fitch's last review resulting in the stabilization of the government debt/GDP ratio, as well as the investment-driven economic momentum, reflected in the faster-than-expected economic recovery in 2021 that Fitch expects to carry into above-potential GDP growth during 2022 and 2023. Standard & Poor's, also in December 2021, revised its outlook on the Dominican Republic to stable from negative.S&P also affirmed its 'BB-' long-term foreign and local currency sovereign credit ratings and its 'B' short-term sovereign credit ratings. The stable outlook reflects S&P's expectation of continued favorable GDP growth and policy continuity over the next 12 to 18 months that will likely stabilize the government's debt burden, despite lack of progress with broader tax reforms, S&P said.A rapid economic recovery from the downturn because of the pandemic should mitigate external and fiscal risks. Moody's affirmed the Dominican Republic's long-term issuer and senior unsecured ratings at Ba3 and maintained the stable outlook in March 2021. DOMINICAN REPUBLIC: Shows Level of Economic Inequality in LatAm --------------------------------------------------------------- Dominican Today reports that after at least four international reports stating that the Dominican Republic would have the "strongest" or highest growth of its gross domestic product (GDP) during 2023, a recurring question would be: "where is that economic development?" The answer could lie in the richest 1% of the country. This is stated by the World Inequality Database (WID), which every year publishes a report on how wealth is distributed in the world. According to recent data, the Dominican Republic has the highest rate of economic inequality in Latin America, the report relays. Only 1% of the population earns about 30% of the national income, the report notes. This is the highest rate in the region, although it is a common factor throughout Latin America, the report discloses. Together with Peru and Mexico, they concentrate between 25% and 30% of the profits, the report says. In general, the poorest 50% of the Latin American population receives 10% of the income, while the richest 10% receives 55% in the region, Dominican Today relays. In fact, the richest 1% capture 25% of the national income of their countries, compared to 18% in the United States, Dominican Today notes. This is a reality that everyone seems to be aware of. "The Dominican Republic is the country of comparisons where the 1% of people with the highest incomes receive the highest proportion of gross national income, 30.5%, with a participation that exceeds between 2 and 5 percentage points to that of Mexico, Chile and Brazil", pointed out at the time the Minister of Economy, Planning and Development, Pavel Isa Contreras, the report relates. A report prepared between the Government, the Economic Commission for Latin America and the Caribbean (Cepal), and the World Inequality Lab, details that the 10% of the Dominican population with the lowest income receive less than 1% of the national income, while the 10 % of higher-income receives more than half, with 55%, Dominican Today discloses. In fact, the study classifies as "high" the levels of participation of the top 1% and 10% in the distribution of national income, the report notes. More specifically, it indicates that the top 1% receives 30% of income, the report relays. When that range is widened, the top 10% earn around 40%, the report says. In the rest of the distribution, that is, in the 90% with the lowest income, the opposite effect is observed to that established for the 10% with the highest income, the report discloses. Indeed, according to the report, the participation of the bottom 50% of income is approximately 17% of the total, 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. TCRLA reported in April 2019 that the Dominican To related 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. Fitch Ratings, in December 2021, revised the Outlook on Dominican Republic's Long-Term Foreign-Currency Issuer Default Rating (IDR) to Stable from Negative and affirmed the IDRs at 'BB-'.The revision of the Outlook to Stable reflects the narrowing of Dominican Republic's government deficit and financing needs since Fitch's last review resulting in the stabilization of the government debt/GDP ratio, as well as the investment-driven economic momentum, reflected in the faster-than-expected economic recovery in 2021 that Fitch expects to carry into above-potential GDP growth during 2022 and 2023. Standard & Poor's, also in December 2021, revised its outlook on the Dominican Republic to stable from negative.S&P also affirmed its 'BB-' long-term foreign and local currency sovereign credit ratings and its 'B' short-term sovereign credit ratings. The stable outlook reflects S&P's expectation of continued favorable GDP growth and policy continuity over the next 12 to 18 months that will likely stabilize the government's debt burden, despite lack of progress with broader tax reforms, S&P said.A rapid economic recovery from the downturn because of the pandemic should mitigate external and fiscal risks. Moody's affirmed the Dominican Republic's long-term issuer and senior unsecured ratings at Ba3 and maintained the stable outlook in March 2021. ================= G U A T E M A L A ================= ENERGUATE TRUST: Fitch Hikes LongTerm IDRs to 'BB', Outlook Stable ------------------------------------------------------------------ Fitch Ratings has upgraded Energuate Trust's Long-Term Local and Foreign Currency Issuer Default Ratings (IDRs) to 'BB' from 'BB-' and its USD330 million bond due in 2027 to 'BB' from 'BB-'. The Rating Outlook is Stable. The upgrade reflects Energuate's strong linkage to the Guatemalan sovereign rating. Fitch upgraded Guatemala's IDR to 'BB' from 'BB-'on Feb. 16, 2023. The Rating Outlook is Stable. Energuate relies on elevated and systemic government subsidization; as of fiscal 2022, approximately 61% of the Fitch-estimated EBITDA was derived from government subsidies. Energuate's ratings further reflect the combined operations of Distribuidora de Electricidad del Oriente S.A. (DEORSA) and Distribuidora de Electricidad del Occidente S.A. (DEOCSA), two rural electricity distribution companies. Energuate adds material cash flows and business diversification to the consolidated profile of parent Nautilus Inkia Energy (BB/Stable), averaging around 36% of Fitch-estimated total EBITDA through 2026. However, the company is rated on a stand-alone basis from its parent company as their IDRs are equal. KEY RATING DRIVERS Upgrade Based on Sovereign; Strong Linkage: The Feb. 16, 2023 upgrade of Guatemala's sovereign rating to 'BB-'/Stable, reflected the sovereign's very strong fiscal and economic recovery and further improved external metrics following the pandemic and global price shocks. The post-pandemic recovery of real GDP was one of the fastest in Latin America. Government subsidies play an important role in Energuate's operating profile, given the weak social indicators of much of the company's service territory. Fitch estimates that government subsidies comprise a material average of 72% of Energuate's EBITDA historically, and around 61% on an ongoing basis. Over the past year, the government extended further electricity rate payer relief by increasing its subsidy eligibility threshold for customers who consume 88 kilowatt hours per month (kwh/month), up to 125kwh/month. This temporary increase was the result of higher commodity and energy prices during 2022. Absent subsidies, Energuate's already elevated delinquency rate would be even higher during periods of extraordinarily high energy costs. The current period of increased subsidies should last through at least mid-year 2023. VAD Tariff Supports Strong Cash Flow: Energuate's gross margin is primarily driven by the regulated value added from distribution (VAD) charges to customers, representing around 99% of total rate payers and leading to a favorable average of 22% in EBITDA margin over the past five years. The VAD tariff is set by the independent regulator Comision Nacional de Energia Electrica (CNEE), and is determined to recover the company's operating expenses, capex and cost of capital of a model efficient distribution company. The VAD is updated every five years and was last approved in April 2020 through October 2024. The VAD adjusts semi-annually to reflect inflation, fuel cost increases and local currency exchange rates against the U.S. dollar. Electricity charges adjust on a quarterly basis to reflect variations in the actual cost of electricity purchased versus projected costs. As a distribution-only company, Energuate is not subject to electricity price changes, as energy, capacity and transmission costs are passed through directly to the customer. Leverage Expected to Decline: YE 2022 total debt/EBITDA is expected to decline to 3.2x from 3.8x the prior year as revenue growth from higher average sale prices, higher demand and strong customer growth more than offset higher energy purchase costs that year. Fitch's rating case includes ongoing tariff adjustments, forecasts energy sales volume growth to average 3.3% per year, in line with annual GDP growth assumptions, and does not assume additional debt. The rating case also expects a reduction in combined technical and non-technical energy losses of around 0.4% per year, with total losses still averaging an elevated 17.7% through 2026. Debt amortization of around USD84 million between 2023 through 2026 will also contribute to an ongoing leverage decline, settling in the 3.0x range over the medium term. Challenging Structural Inefficiencies, Cost Savings Plan: The rural service area presents financial and operational challenges, including high energy theft, violent crime and an underdeveloped formal economy. Energy losses amounted to 18.7% in 2022 and have averaged a high 19.7% since fiscal 2017. Energuate employs cost savings initiatives and technology-based energy theft reduction improvements to improve repair response times when theft occurs. The VAD compensates for 14% of energy losses, anything above which is a loss for the company. Geographic Factors Discourage Competition: The low population density of Energuate's service area, coupled with high investment requirements to reach new clients, disincentivizes competition and mitigates risks related to the non-exclusivity of the concession. The concession includes 21 of 22 departments in Guatemala, all except Sacatepéquez. The area includes 91,557 km of distribution lines that delivered 3,088Wh of electricity in 2022 across a dispersed area of approximately 101,914 km2. DERIVATION SUMMARY Energuate's profitability continues to compare favorably to Elektra Noreste S.A. (ENSA; BBB/Stable), a state-owned distribution company in Panama. Its EBITDA margin continued a steady upward trajectory in 2022, estimated at 24%, higher than that of peers, which tend to have EBITDA margins of 13%-14%. Energuate's leverage increased to 3.2 to 3.8x in 2021 due to a new bank loan of $230 million to pay a distribution to its shareholders. It nonetheless remains comparable to the 3.2x for ENSA. The distribution model generally supports higher leverage than other industries, and Energuate's deleveraging trajectory is in line with the 'BB' category. Similar to AES Andres, Energuate derives a material component of its cash flow from government subsidies. The Guatemalan government, through the Instituto Nacional de Electrificación, has maintained a strict 30-day payment cycle, and Energuate will shut off service should non-payment occur for two months. Nevertheless, Energuate central rating sensitivity remains its exposure to an increasingly fraught political environment and material government counterparty risk. KEY ASSUMPTIONS - VAD tariff prices based on 2022 average annual prices; - Annual average Inflation of around 3.6% from 2022 through 2026; - Annual taxes averaging around 25% of income; - Average energy losses of 18% in the next four years; - Flat annual customer growth; - Minimal FX fluctuation, reflecting Guatemala's managed float; - Ongoing dividends paid averaging USD75 million; - Average capex of around USD56 million annually through the medium term, supported by FCF; - No additional debt in forecast period. RATING SENSITIVITIES Factors that could, individually or collectively, lead to positive rating action/upgrade: - Considering Energuate's geographically limited operations and fundamental exposure to macroeconomic conditions, an upgrade is unlikely barring a positive rating action on the sovereign in combination with sustained debt/EBITDA below 3.5x. Factors that could, individually or collectively, lead to negative rating action/downgrade: - A downgrade to Guatemala's sovereign rating; - A significant weakening in the country's electricity regulation system, either regarding tariff adjustments or a material change in subsidies received by Energuate; - Weaker operational results due to higher than expected energy losses and lower than anticipated tariff increases; - A downgrade of Energuate's parent, Nautilus Distribution Holdings LLC, coupled with significant interference in Energuate's capital structure. - Sustained debt/EBITDA of 5.5x or greater. LIQUIDITY AND DEBT STRUCTURE Adequate Liquidity: Energuate Trust's liquidity is supported by stable cash flow generation, comfortable amortization profile and committed credit lines. Its main financial obligations include a USD330 million bond due in 2027, as well as a local currency loan for USD232.1 million loan, payable over 13 years, and local currency loans totaling USD73million. As of September 2022, long-term indebtedness totaled USD626 million. The company has short-term revolving lines of credit for working capital purposes for a total of USD80 million, of which USD40 million are committed and the remaining USD40 million are uncommitted. Cash on hand as of Dec. 31 2021 and Sept. 30 2022 equated to USD221.3 million and USD13.5 million, respectively. Energuate plans to adjust dividends to shareholders to match future cash flow. Fitch expects the company's 2027 bond to be rolled over upon maturity. ISSUER PROFILE Energuate Trust is the holding trust of Guatemala's two largest rural electricity distribution companies, DEORSA in the northeast and DEOCSA in the west. The service area covers 73% of the population, excluding Guatemala City, with approximately 2.3 million regulated customers across 21 of the country's 22 departments at YE 2022. 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 ----------- ------ ----- Energuate Trust LT IDR BB Upgrade BB- LC LT IDR BB Upgrade BB- senior unsecured LT BB Upgrade BB- [*] Fitch Takes Actions on Five Guatemalan Banks ------------------------------------------------ Fitch Ratings has taken rating actions on five Guatemalan banks and four foreign related-companies following the upgrades of Guatemala's Long-Term Foreign and Local Currency Issuer Default Ratings (IDRs) to 'BB' from 'BB-' with Stable Outlook (See "Fitch Upgrades Guatemala to 'BB'; Outlook Stable", dated Feb. 16, 2023,). Fitch also revised its assessment for Guatemalan banking system's operating environment (OE) to 'bb-' from 'b+' with a stable trend. The OE revision reflects Fitch's assessment of the Guatemalan very strong economic recovery, which would continue to positively influences in to the banking system's resilient business and financial performance, and supports the macro stability. Fitch upgraded the Foreign and Local Currency Long-Term IDRs of Banco Industrial, S.A. (Industrial), Banco de Desarrollo Rural, S.A. (BanRural), Banco G&T Continental, S.A. (G&TC) and Banco de los Trabajadores (Bantrab) to 'BB' from 'BB-', driven by the upgrade of their Viability Ratings (VR) to 'bb' from 'bb-'. The Rating Outlook on the banks' Long-Term IDRs is Stable, mirroring the OE's trend. The upgrades keep these ratings aligned with the sovereign rating. Likewise, all Short-Term IDRs were affirmed. Fitch also upgraded the Government Support Rating (GSR) of Industrial, Banrural, G&TC and Bantrab to 'bb-' from 'b+'. The bank's GSR reflects Fitch's opinion of moderate probability of support that the banks would receive from the sovereign, if needed. Industrial's subordinated debts were also upgraded. Fitch upgraded the Foreign Currency Long-Term IDR of Banco Agromercantil de Guatemala, S.A. (BAM) to 'BB+' from 'BB', with Outlook Stable. The agency affirmed the bank's Local Currency IDR at 'BB+', one notch above the sovereign rating; its Outlook is Stable, mirroring the same as its parent, Bancolombia, S.A. ('BB+'; Stable). BAM's VR was also upgraded to 'bb-' from 'b+', as well as Shareholder Support Rating (SSR) to 'bb+' from 'bb'. At the same time, Fitch upgraded the Long and Short-Term National ratings for Bi-Bank, S.A. (Bi-Bank) and GTC Bank, Inc. (GTC) in Panama, and the Long-Term National ratings of Banco del Pais, S.A. (Banpais) and Banco de Desarrollo Rural Honduras, S.A. (Banrural Honduras) in Honduras, as a result of their supporting companies' ratings upgrade (Industrial, G&TC and BanRural) indicating their improved creditworthiness relative to other rated issuers in their respective country, Panama and Honduras. The Stable Outlook on the Long-Term ratings reflects the same of their support entities. Bi-Bank's, Banpais' and Banrural Honduras' debt issuances ratings were also upgraded. The national ratings of the five Guatemalan banks, their Guatemalan subsidiaries and affiliated companies, as well as those of other financial institutions rated in Guatemala, are unchanged since they are not directly affected by the sovereign upgrade. KEY RATING DRIVERS Industrial Industrial's IDRs are based on its intrinsic creditworthiness embodied in its VR of 'bb', which is also aligned to its implied VR. This capture its leadership position in the market, its consistent business model and robust risk profile, reflected in a resilient financial performance characterized by its outstanding asset quality and sound deposit franchise, along a stable profitability and appropriate capitalization. Debt Instruments: Industrial Subordinated Notes (ISbN) are two notches below Industrial's VR, driven by their subordinated status, ranking junior to all Industrial's present and future senior indebtedness, pari passu with all other unsecured subordinated debt and senior to Industrial's capital and tier I hybrid securities. Industrial's Subordinated Tier I capital (IST-I) notes are rated four notches below Industrial's VR reflecting its deep subordination status and discretionary coupon omission. BanRural BanRural's VR of 'bb' is in line with its implied VR, which also boosts its ratings. Fitch believes BanRural is capable of maintaining its good business profile and strong market position to improve its performance. The bank is characterized by sound profitability, an improving asset quality alongside sound capitalization and funding and liquidity structure. G&TC VR drives G&TC's IDRs. The bank's VR is in line with its implied VR of 'bb', which shows G&TC's solid business profile, and also reflects Fitch's opinion on the improved creditworthiness of G&TC, particularly in asset quality and profitability, while the bank maintains a sound capitalization and a strong funding profile. Bantrab Bantrab's IDRs are driven by its VR. Bantrab's VR of 'bb', which is in line with its implied VR, is influenced by its business profile, characterized by a robust franchise in the local consumer segment and a consistent business model, as well as a remarkable financial performance. The bank shows a sound asset quality, a favorable, although decreasing, profitability, and a robust capitalization. BAM BAM's IDRs are driven by the potential support it would receive from its parent, if required. Fitch's assessment of Bancolombia's ability and propensity to support its subsidiary results in BAM's ratings being equalized to those of its parent given its high integration and key role in the group's regional strategy. Guatemala's country ceiling lift resulted in the upgrade of both BAM's Long-Term Foreign Currency IDR and SSR. Also, the upgrade of Guatemala's OE drives an upgrade of BAM's VR, reflecting the bank's good market position, strong loan quality, good but below peers profitability and capitalization metrics, as well as stable funding and liquidity profile. Foreign Subsidiaries and Affiliated Companies Bi-Bank Bi-Bank's national ratings in Panama are driven by potential support from its sister company, Industrial, and reflect Industrial's strong propensity and ability to provide support, if needed. Fitch's support assessment weighs significantly the high reputational risk that a Bi-Bank default would constitute for the group, as well as the relevant role it represents for the conglomerate in its country diversification strategy. GTC GTC's national ratings in Panama are based on Fitch's opinion of G&TC's ability and propensity to support its subsidiary, which the agency believes will continue until the operations consolidation process with its shareholder is fully completed, given the significant reputational risk for its parent. Banpais Banpais national ratings in Honduras reflect Fitch's opinion on the potential support from its sister company, Industrial, if required. Fitch's opinion on the ability and propensity to provide support is based on Banpais' relevant role in the group's geographic diversification. Banrural Honduras Banrural Honduras' national ratings reflect Fitch' assessment of the capacity and propensity of support, if necessary, from its parent BanRural Guatemala. In the agency's opinion, the support towards the Honduran bank would be relevant given that the linkage of the BanRural brand is of high importance in the support propensity given the significant impact that a default of its subsidiary could imply for the franchise. RATING SENSITIVITIES Factors that could, individually or collectively, lead to negative rating action/downgrade: Industrial, BanRural, G&TC and Bantrab - The banks' ratings are sensitive to a downgrade of the sovereign rating and to a material deterioration in the local OE; however, this is not currently Fitch's base case scenario given the Stable Outlook and trend; - Industrial's IDRs and VR could be downgraded if sustained deterioration in its financial performance drives a decline in the bank's operating profit to risk weighted assets (RWA) metric to a level continuously below 1.5% and its Fitch Core Capital (FCC) to RWA ratio to a level consistently below 10.0%; - Industrial ratings of the ISbN and IST-I notes would be downgraded if Industrial's VR is downgraded; - BanRural's VR and IDRs could be downgraded by the deterioration of its financial profile caused by a significant decline of its operating profit to RWA ratio consistently below 2.0% and/or a decline in its FCC to RWA ratio close to 13.0%; - G&TC's ratings could be downgraded from a sustained deterioration of the bank's financial performance reflected in an increase of impairment levels, weakened profitability (Operating profit to RWA consistently below 1.5%) or erosion of capital cushions with an FCC ratio falling consistently below 12.0%; - Bantrab's VR and IDRs could be downgraded if a deterioration of the entity's financial profile becomes significant, reflected in a weakening of its funding profile, decline of its operating profit to RWA consistently below 2.0%, thus causing a sustained reduction in its FCC to RWA ratio below to 15.0%; - Industrial's, BanRural's, G&TC's and Bantrab's GSRs are sensitive to a downgrade of the sovereign rating, as well as its propensity to provide support. BAM - A downgrade on Bancolombia's IDRs or lower support propensity would lead a downgrade of BAM's Foreign Currency and Local Currency IDRs and SSR; - BAM's VR could be downgraded by a deteriorated financial performance that weakens its market position or business model; particularly by a material deterioration of asset quality, an operating profit to RWA ratio consistently under 1.0% and a FCC to RWA below 9.0%. Foreign Subsidiaries and Affiliated Companies - Bi-Bank's national ratings could be downgraded in case of a lower Industrial's ability, reflected by its IDRs, and propensity to provide support. Also, a downgrade of the senior unsecured debt rating would result from a negative action on Bi-Bank's short-term rating; - Any negative action on G&TC's IDRs could lead to a similar action on GTC's national ratings; which could also be downgrades if Fitch's assessment of its parent's willingness to support it is reduced; - Banpais and its senior debt ratings could be downgraded upon a reduction in Fitch's perception of the parent's willingness to support it. Also, a downgrade in Industrial's IDRs could lead to a similar action in Banpais' national ratings; - Banrural Honduras' national ratings would be affected by a downgrade in BanRural's IDRs or deterioration in its support propensity. Also, Banrural Honduras' senior debt rating would be downgraded by a downgrade of the bank's ratings. Factors that could, individually or collectively, lead to positive rating action/upgrade: Industrial, BanRural, G&TC and Bantrab - The banks' IDRs and VR have limited upside potential given that they are at the sovereign level. These ratings could be upgraded in the event, although not the current Fitch's base case scenario given the Stable Outlook and trend, of the same action on Guatemala's sovereign rating and an improvement in Fitch's assessment of OE's score. This in addition that Industrial, BanRural, G&TC and Bantrab maintain their solid financial performances; - Industrial's ratings of the ISbN and IST-I notes would be upgraded if Industrial's VR is upgraded; - Industrial's, BanRural's, G&TC's and Bantrab's GSRs could be upgraded if Guatemala´s sovereign rating is upgraded. BAM - BAM's FC IDR and SSR would be upgraded if Guatemala's country ceiling and Bancolombia's IDR are upgraded; while the Local Currency IDR would be upgraded if Bancolombia's IDR is upgraded; - The VR could be upgraded if the bank improves its operating profit to RWA ratio consistently above 2.0% or its FCC/RWA above 13.0%, while maintains stable loan quality and funding and liquidity profile. Foreign Subsidiaries and Affiliated Companies - Bi-Bank's ratings could be upgraded in case of positive changes in Industrial's ability to support it, as reflected by its Foreign Currency IDR, and propensity to provide support. The Short-Term national rating and its senior debt rating are at the top of the national scale, therefore there is no room for improvement; - Positive rating actions on GTC's Long-Term National Rating could be driven by positive rating actions on G&TC's Foreign Currency IDR. The Short-Term national rating is at the top of the national scale, therefore there is no possibility of upgrading; - Banpais', Banrural Honduras', as well as their senior debt national ratings are at the top of the national scale, therefore no positive rating actions are possible. VR ADJUSTMENTS - Industrial's, BanRural's, G&TC's, Bantrab's and BAM's Operating Environment score of 'bb-' has been assigned above the 'b' category implied score due to the following adjustment reason: Sovereign Rating (positive). Industrial - The Capitalization & Leverage score of 'bb-' has been assigned above the 'b & below' category implied score due to the following adjustment reason: Reserve Coverage and Asset Valuation (positive). Bantrab - The Business Profile score of 'bb-' has been assigned above the 'b' category implied score due to the following adjustment reasons: Market Position (positive) and Business Model (positive). - The Earnings & Profitability score of 'bb+' has been assigned below the 'bbb' category implied score due to the following adjustment reason: Historical and Future Metrics (negative). - The Capitalization & Leverage score of 'bb+' has been assigned below the 'bbb' category implied score due to the following adjustment reason: Capital Flexibility and Ordinary Support (negative). BAM - The Business Profile score of 'bb-' has been assigned above the 'b' category implied score due to the following adjustment reason: Market Position (positive). - The Capitalization & Leverage score of 'bb-' has been assigned above the 'b & below' category implied score due to the following adjustment reason: Capital Flexibility and Ordinary Support (positive). SUMMARY OF FINANCIAL ADJUSTMENTS Industrial, BanRural, G&TC and BAM: Prepaid expenses and other deferred assets were reclassified as intangible assets and deducted from total equity as Fitch considers these to have low capacity to absorb losses. BanRural: Equity interests in insurance companies are also deducted from equity. Bantrab: Net asset value from an insurance subsidiary was reclassified as intangible and deducted from total equity in order to calculate FCC. PUBLIC RATINGS WITH CREDIT LINKAGE TO OTHER RATINGS Industrial's, Banrural's, G&TC's y Bantrab's GSRs are linked to the sovereign Foreign Currency IDR of Guatemala. BAM's IDRs and SSR are based on the potential support the entity would receive from Bancolombia, if required. Bi-Bank's and Banpais' national ratings are driven by support from Industrial. GTC's national ratings are driven by support from G&TC. Banrural Honduras' national ratings are driven by support from BanRural. 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 ----------- ------ ----- Bi-Bank, S.A. Natl LT A+(pan) Upgrade A-(pan) Natl ST F1+(pan)Upgrade F1(pan) senior unsecured Natl ST F1+(pan)Upgrade F1(pan) Banco Agromercantil de Guatemala S.A. LT IDR BB+ Upgrade BB ST IDR B Affirmed B LC LT IDR BB+ Affirmed BB+ LC ST IDR B Affirmed B Viability bb- Upgrade b+ Shareholder Support bb+ Upgrade bb Banco del Pais, S.A. Natl LT AAA(hnd)Upgrade AA(hnd) Natl ST F1+(hnd)Affirmed F1+(hnd) senior unsecured Natl LT AAA(hnd)Upgrade AA(hnd) Banco Industrial, S.A. LT IDR BB Upgrade BB- ST IDR B Affirmed B LC LT IDR BB Upgrade BB- LC ST IDR B Affirmed B Viability bb Upgrade bb- Government Support bb- Upgrade b+ subordinated LT B- Upgrade CCC+ subordinated LT B+ Upgrade B Banco de Desarrollo Rural, S.A. LT IDR BB Upgrade BB- ST IDR B Affirmed B LC LT IDR BB Upgrade BB- LC ST IDR B Affirmed B Viability bb Upgrade bb- Government Support bb- Upgrade b+ GTC Bank, Inc. (Panama) Natl LT A+(pan) Upgrade A-(pan) Natl ST F1+(pan)Upgrade F1(pan) Banco de los Trabajadores LT IDR BB Upgrade BB- ST IDR B Affirmed B LC LT IDR BB Upgrade BB- LC ST IDR B Affirmed B Viability bb Upgrade bb- Government Support bb- Upgrade b+ Banco de Desarrollo Rural Honduras, S.A. Natl LT AAA(hnd)Upgrade AA(hnd) Natl ST F1+(hnd)Affirmed F1+(hnd) senior unsecured Natl LT AAA(hnd)Upgrade AA(hnd) Banco G&T Continental S.A. LT IDR BB Upgrade BB- ST IDR B Affirmed B LC LT IDR BB Upgrade BB- LC ST IDR B Affirmed B Viability bb Upgrade bb- Government Support bb- Upgrade b+ ============= J A M A I C A ============= DIGICEL GROUP: Fitch Lowers LongTerm Issuer Default Rating to 'CC' ------------------------------------------------------------------ Fitch Ratings has downgraded the Long-Term Issuer Default Rating (IDR) of Digicel Group Holdings Limited (DGHL) to 'CC' from 'CCC-' as well as the IDR of Digicel Limited (DL) to 'CC' from 'CCC-'. Fitch also downgraded the IDR of Digicel International Finance Limited (DIFL) to 'CC' from 'CCC+'. The downgrade of DL reflects its very high credit risk due to limited liquidity to pay off its $925 million unsecured notes maturing in March 2023. DL has launched a consent solicitation to amend the notes' indenture to provide a 30-day grace period that could be extended to 90 days if the company enters into a restructuring agreement with creditors. The downgrade of DIFL reflects the increasing risk of a comprehensive restructuring with incremental debt being added to its capital structure or otherwise resulting in an outcome deemed by Fitch to be a distressed debt exchange. Haiti's macroeconomic weakening, resulting from its fuel crisis, has further pressured DIFL's operating performance, which Fitch expects will remain weak in FY 2024. DIFL has USD2.2 billion of debt maturities coming due in May 2024. Fitch has applied an analytical overlay to its rating approach under its Parent and Subsidiary Linkage Rating Criteria given the higher risk to DIFL from the group's distressed situation. KEY RATING DRIVERS Very High Credit Risk: DL has limited liquidity to face $925 million unsecured notes maturing in March 2023. The company's consent solicitation to amend the notes' indenture contemplates the establishment of a 30-day grace period before a default in the payment of interest or principal constitutes an event of default as defined in the 2023 notes. The grace period can be extended up to 90 days should the company enter into a restructuring support agreement with its creditors. Unsustainable Leverage: The group's operating performance will be affected by the macroeconomic weakness in Haiti. The elimination of fuel subsidies in the island has induced protests and fuel shortages, which have disrupted the group's ability to provide uninterrupted coverage and have also increased costs as its cell sites run on Diesel. The Haitian gourde has continued to depreciate in 2023. Fitch forecasts DGHL's consolidated net leverage around 8.0x in fiscal year-end 2024, considering proforma debt of USD4.5 billion, cash declining to less than USD300 million from close to USD500 million as of September 2022, and operating EBITDA of around USD550 million in fiscal year-end 2024 from USD580 million in fiscal year-end 2022. Rating Equalization: Fitch has applied an analytical overlay to its rating approach to DIFL, DL and DGHL under Parent and Subsidiary Linkage Rating Criteria as the three entities are experiencing a distressed situation given that over 70% of the debt within the group is maturing within the next 18 months. This has resulted in the three entities IDRs equalized at the same level Varying Recovery Prospects: Fitch forecasts recovery rates commensurate with 'RR1' for DIFL secured creditors due their closeness to the assets and outstanding recovery prospects while DIFL unsecured creditors' recovery is forecast at 'RR3'. All of these debt instruments are capped at 'RR4', resulting in ratings equal to the IDRs. Fitch's Country-Specific Treatment of Recovery Ratings Criteria constrains the upward notching of instruments based on concerns about the rule of law, insolvency regimes and creditor protections in a jurisdiction. The ratings of the DIFL subordinated notes, senior unsecured debt and DGHL's unsecured and convertible debt reflect poor recovery prospects. ESG - Governance Structure: Digicel's decision to restructure debt twice remains a constraint on the ratings and its corporate governance is deemed weak. The group has a concentrated ownership and control structure with a single shareholder who owns and controls the group and is heavily involved in the day-to-day operations of the business. ESG - Group Structure: Digicel's incorporation status in dozens of countries and extensa use of contractual features of debt results in a complex group structure that weakens its corporate governance and the group's consolidated credit profile. DERIVATION SUMMARY Digicel's IDRs reflect the increasing likelihood that the group will enter a debt restructuring with creditors. KEY ASSUMPTIONS The recovery analysis assumes that DGHL would be reorganized as a going concern in bankruptcy rather than liquidated. Fitch has assumed a 10% administrative claim. The going concern EBITDA reflects Fitch's estimates of mid-cycle EBITDA that is achievable in the medium term, given the company's position primarily in duopoly markets and its growth prospects under a scenario of only gradual currency depreciation. This going concern EBITDA of USD550 million is approximately equal to Fitch's projection for fiscal 2024. Fitch uses an enterprise value/EBITDA multiple of 5.0x, reflecting the company's long-term prospects and good market shares in mostly duopoly markets amid a scenario of financial distress. RATING SENSITIVITIES Factors that could, individually or collectively, lead to positive rating action/upgrade - A ratings upgrade is unlikely prior to a debt restructuring. Factors that could, individually or collectively, lead to negative rating action/downgrade - The entrance into a grace or cure period following non-payment of a material financial obligation or the announcement of a distressed debt exchange would lead to a downgrade to 'C'; - A filing for bankruptcy protection would lead to a downgrade to 'D'. LIQUIDITY AND DEBT STRUCTURE Weak Liquidity: DL faces USD925 million in note maturities in March 2023. The subsidiary has minimal cash, as USD90 million of the USD96 million of DL's consolidated cash was at DIFL and its subsidiaries at Sept. 30, 2022. DIFL faces USD2.2 billion in secured debt maturities in May 2024 and is projected to generate neutral FCF in Fiscal year 2024. DGHL's standalone cash was USD315 million as of December 2022. DGHL's consolidated financial debt as of September 2022 was approximately USD4.4 billion, of which USD2.8 billion was at DIFL, USD1.0 billion at DL and USD600 million at DGHL. In addition, about USD100 million of interest has accrued. DGHL's debt includes USD215 million of payment-in-kind perpetual convertible notes. Approximately USD1.2 billion of DIFL's USD2.2 billion of debt maturing in 2024 is fixed-rate debt at risk of resetting at higher rates. ISSUER PROFILE Digicel is a diversified telecom operator that provides mobile and fixed-line services to consumers and businesses in the Caribbean. ESG CONSIDERATIONS Digicel Group Holdings Limited has an ESG Relevance Score of '5' for Group Structure due to its complex group structure and incorporation status in dozens of countries, which has a negative impact on the credit profile, and is highly relevant to the rating, resulting in an implicitly lower. Digicel Group Holdings Limited has an ESG RS of '5' for Governance Structure due to the concentrated nature of its decision and willingness to restructure debt, which has a negative impact on the credit profile, and is highly relevant to the rating, resulting in an implicitly lower rating. Digicel Group Holdings Limited has an ESG RS of '4' for Exposure to Environmental Impacts due to its presence in a hurricane prone region, which has a negative impact on the credit profile, and is relevant to the ratings in conjunction with other factors. Digicel Group Holdings Limited has an ESG RS of '4' for Financial Transparency due to the company's relatively opaque financial strategy and willingness to restructure debt, which 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. Entity/Debt Rating Recovery Prior ----------- ------ -------- ----- Digicel International Finance Limited LT IDR CC Downgrade CCC+ senior secured LT CC Downgrade RR4 CCC+ senior unsecured LT CC Downgrade RR4 CCC+ junior subordinated LT C Downgrade RR6 CCC+ Digicel Group Holdings Limited LT IDR CC Downgrade CCC- senior unsecured LT C Affirmed RR6 C subordinated LT C Affirmed RR6 C Digicel Limited LT IDR CC Downgrade CCC- senior unsecured LT C Downgrade RR6 CC JAMAICA: Interest Paid on Deposit Accounts Not in Line With Policy ------------------------------------------------------------------ RJR News reports that The Bank of Jamaica (BOJ) says interest paid on deposit accounts is still not moving up in line with the policy interest rate. BOJ Governor Richard Byles says the desired effect on interest charged for loans has also not been realized, according to RJR News. "The banks have made some progress in the direction that we have indicated to them. Deposit rates have come up, I believe by about 59 basis points. But that is still minimal and lending rates haven't come up at all," Mr. Byles indicated, the report notes. He said the bank is concerned Jamaica could face a wave of liquidity in the near future, arising mostly from seasonal government activity as well as the BOJ's activity in the foreign exchange market, the report relays. Mr. Byles said this is part of the reason the cash reserve requirement will be increased in April, the report discloses. There is a view that some deposit accounts are mainly used for transactions, suggesting that it may not be worthwhile to increase the interest paid on the accounts, as the holder may still not benefit, the report relays. But the BOJ governor said in the same way the banks benefit from having these deposits to service loans, the benefit to consumers should increase, the report discloses. "A large portion of the funding of the DTIs for loans comes from those very accounts that the banks are talking about are transactional. So they don't want to pay a higher rate on those accounts, but they use it to fund loans that they charge 11 per cent, 12 per cent, 13[per cent]. So you judge which one is reasonable or not," he suggested, the report relays. Deputy Governor Dr. Jide Lewis noted that the loan deposit ratio is in excess of 75 per cent, meaning that for every dollar of loans granted, $0.70 is funded from deposits, the report notes. The central bank said the banks have been disbursing more financing, with loan growth up 13 per cent, the report adds. As reported in the Troubled Company Reporter-Latin America in March 2022, Fitch Ratings has affirmed Jamaica's Long-Term Foreign Currency Issuer Default Rating (IDR) at 'B+'. The Rating Outlook is Stable. ===================== P U E R T O R I C O ===================== ESJ TOWERS: Gets OK to Tap Luis Muniz as Special Counsel -------------------------------------------------------- ESJ Towers, Inc. received approval from the U.S. Bankruptcy Court for the District of Puerto Rico to employ Luis Daniel Muniz, an attorney practicing in Carolina, P.R. Mr. Muniz, as the Debtor's special counsel, will provide legal advice on horizontal property and timeshare law matters. The attorney will bill on the basis of a monthly retainer equivalent to $3,500, which amount will cover up to 30 billable hours, and a rate of $150 per hour for any excess thereof. Mr. Muniz disclosed in a court filing that he does not have any adverse interest to the Debtor or its estate. Mr. Muniz holds office at: Luis Daniel Muniz, Esq. 6165 Isla Verde Avenue, Suite 2200 Carolina, PR 00979 About ESJ Towers ESJ Towers, Inc. owns the ESJ Towers in Carolina, P.R. The luxury apartments and condo units at ESJ Towers have direct access to Isla Verde Beach, widely considered one of the best in Puerto Rico. ESJ sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. D.P.R. Case No. 22-01676) on June 10, 2022, with as much as 50 million in both assets and liabilities. ESJ President Keith St. Clair signed the petition. Judge Enrique S. Lamoutte Inclan oversees the case. The Debtor tapped Charles A. Cuprill, Esq., at Charles A. Cuprill, PSC Law Offices as bankruptcy counsel; Ramon Luis Nieves, Esq., at RL Legal Consulting Services, LLC and Luis Daniel Muniz, Esq., as special counsels; Dage Consulting CPAS, PSC as financial advisor; CPA Luis R. Carrasquillo & Co., P.S.C. as financial consultant; and De Angel & Compania, PA, LLC as auditor. The U.S. Trustee for Region 21 appointed an official committee of unsecured creditors on Sept. 12, 2022. MRO Attorneys at Law, LLC and Dage Consulting CPAS, PSC serve as the committee's legal counsel and financial advisor, respectively. INSIGHT MANAGEMENT: Case Summary & 20 Largest Unsecured Creditors ----------------------------------------------------------------- Debtor: Insight Management Group Incorporated East Medical & Professional Center Carr. #3 Canovanas, PR 00729 Business Description: The Debtor provides specialized services in radiology. Chapter 11 Petition Date: February 22, 2023 Court: United States Bankruptcy Court District of Puerto Rico Case No.: 23-00506 Judge: Hon. Maria De Los Angeles Gonzalez Debtor's Counsel: Javier Vilarino, Esq. VILARINO & ASSOCIATES PO Box 9022515 San Juan, PR 00902-2515 Tel: (787) 565-9894 Email: jvilarino@vilarinolaw.com Estimated Assets: $500,000 to $1 million Estimated Liabilities: $10 million to $50 million The petition was signed by Jose A. Romero Cruz as president. A full-text copy of the petition containing, among other items, a list of the Debtor's 20 largest unsecured creditors is available for free at PacerMonitor.com at: https://www.pacermonitor.com/view/B6GJCSA/NSIGHT_MANAGEMENT_GROUP_INCORPORATED__prbke-23-00506__0001.0.pdf?mcid=tGE4TAMA ===================================== T R I N I D A D A N D T O B A G O ===================================== TRINIDAD & TOBAGO: Finance Minister Faces Lower Natural Gas Prices ------------------------------------------------------------------ Curtis Williams at Trinidad Express reports that Finance Minister Colm Imbert will be closely monitoring the softening of natural gas prices at the US Henry Hub which has fallen considerably and is now projected to average almost half what he projected in the 2022/23 budget. According to the US Energy Information Agency (USEIA), which Imbert has admitted he uses to determine his energy price projections, it is now assuming the Henry Hub natural gas prices will average US $3.40 per million British thermal units (MMBtu) in 2023, down almost 50 per cent from last year and about 30 per cent less that the US EIA's own January Short-Term Energy Outlook forecast, the report discloses. "We revised our outlook for Henry Hub prices as a result of significantly warmer-than-normal weather in January that led to less-than-normal consumption of natural gas for space heating and pushed inventories above the five-year average," the February report read, according to Trinidad Express. Imbert pegged his budget on a natural gas price of US$6.50 per MMBtu, the report relays. In its January Economic Bulletin, the Central Bank of Trinidad and Tobago reiterated the crucial role that strong energy prices played in the improved economic conditions in T&T, the report relays. It noted that in 2023, the domestic economy is expected to improve, bolstered by activity in the energy sector, the report says. It said Natural gas supplies will be boosted by key upstream energy sector projects such as Shell Trinidad and Tobago's Colibri, DeNovo's Zandolie and bpTT's Cassia Compression, the report notes. "Over the short term, energy prices are anticipated to remain elevated but may experience some softening. Stronger energy revenue will add to the fiscal space available for capital expenditure and targeted support programs," the economic billeting reported, the report notes. But according to the US EIA, temperatures across the United States in January were the mildest since 2006 which the EIA said reduced consumption of natural gas for space heating and significantly changed its forecast for natural gas markets in the coming months, the report discloses. The Henry Hub spot price averaged $3.27 per MMBtu in January, down more than $2/MMBtu from December, the report says. "In the United States, there were 16 per cent fewer heating degree days (HDDs) in January than the ten-year average and 9 per cent fewer than forecast in the January STEO. With less-than-expected consumption of natural gas, US stocks of natural gas ended January above our previous forecast. These developments in January contributed to significant changes in our outlook for the February STEO. We now forecast Henry Hub natural gas prices to average about $3.40/MMBtu for 2023 and to stay below $4.00/MMBtu until December. Our forecast in the January STEO was for Henry Hub prices to average almost $5.00/MMBtu in 2023," the report read, Trinidad Express notes. It noted that natural gas prices remain very volatile, the report relays. Extreme weather events and production freeze-offs it said could still potentially cause price spikes at both the Henry Hub and in regional markets, but that potential diminishes as spring approaches, particularly now that inventories have moved back above the five-year (2018-2022) average, Trinidad Express says. "Although we expect close-to-normal weather for February and March, colder temperatures than expected could put upward pressure on prices," the report noted, Trinidad Express relays. The story for oil prices looks a little more stable with Brent crude oil spot price averaging US$82 per barrel in January, about $2/b higher than the average in December 2022, the report notes. It said oil prices rose during January in part because of the expectation of increasing oil demand as a result of relaxing Covid-19 restrictions and increasing mobility in China, the report says. Perceptions of a less severe recession and some improving macroeconomic conditions also likely contributed to rising crude oil prices over the past month the USEIA revealed, Trinidad Express notes. The USEIA report noted, "Last month, we highlighted oil demand in China and oil production in Russia as two of the main uncertainties in the oil market this year, and we have revised our outlook for both in this month's forecast. The revisions result from China relaxing Covid restrictions, which have increased our forecast of oil demand growth. At the same time, more oil was produced in Russia than we anticipated during January, and we raised our forecast for Russia's oil production through the end of 2024. We have also lowered our forecast for oil production in OPEC because of rising global oil inventories," Trinidad Express relays. It said these changes have largely offset each other in its forecast global balances, and beyond the first quarter of 2023, the US EIA has left its crude oil price forecast largely unchanged from last month's outlook, Trinidad Express discloses. "We expect that the Brent spot price will average $85/b in the first half of 2023 (1H23). However, we expect global oil production to continue to outpace demand over the forecast period, leading to persistent global oil inventory builds through 2024 and falling oil prices. After increasing by an average of 0.6 million b/d in 2022, we expect global oil inventories to also build by an average of 0.6 million b/d in 2023, with builds moderating to 0.4 million b/d in 2024. Correspondingly, our forecast spot price of Brent crude oil falls to an average of $82/b in 2H23 and $78/b in 2024. Global oil demand: Global liquids fuel consumption in the forecast increases from an average of 99.4 million barrels per day (b/d) in 2022 to 102.3 million b/d in 2024, driven primarily by growth in China and other non-OECD countries," Trinidad Express relates. It noted that there is significant uncertainty around demand forecast remains February 2023 based on possible outcomes for the evolving global economic conditions and China's pivot away from a zero-Covid strategy, Trinidad Express notes. "We forecast that the reversal of restrictions will contribute to oil demand in China increasing by 0.7 million b/d in 2023 and by 0.4 million b/d in 2024. We expect OECD oil demand to remain largely flat over the forecast period, as inflationary economic pressures continue to limit GDP and oil demand growth and as the oil intensity of OECD economies declines," the report read, Trinidad Express adds. =============== X X X X X X X X =============== [*] BOND PRICING: For the Week Feb. 20 to Feb. 24, 2023 ------------------------------------------------------- Issuer Name Cpn Price Maturity Country Curr ----------- --- ----- -------- ------- --- Provincia de Cordoba 7.1 72.7 8/1/2027 AR USD Fospar S/A 6.5 1.2 5/15/2026 BR BRL Metrogas SA/Chile 6.0 41.6 8/1/2024 CL CLP Argentine Republic Gov 4.3 70.0 12/31/2033 AR JPY Sylph Ltd 2.4 65.1 9/25/2036 KY USD City of Cordoba Argent 7.9 73.1 9/29/2024 AR USD Argentine Republic Gov 8.3 72.9 12/31/2033 AR USD Argentine Republic Gov 7.1 75.7 6/28/2117 AR USD Provincia de Cordoba 7.1 74.7 8/1/2027 AR USD Province of Santa Fe 6.9 75.2 11/1/2027 AR USD Odebrecht Finance Ltd 6.0 16.4 4/5/2023 KY USD Noble Holding Internat 6.2 62.2 8/1/2040 KY USD Provincia del Chaco Ar 4.0 0.0 12/4/2026 AR USD Cia Latinoamericana de 9.5 74.3 7/20/2023 AR USD Argentine Republic Gov 8.3 74.5 12/31/2033 AR USD Odebrecht Finance Ltd 6.0 16.4 4/5/2023 KY USD Argentine Republic Gov 8.3 72.9 12/31/2033 AR USD Argentine Republic Gov 6.3 74.1 11/9/2047 AR EUR Province of Santa Fe 6.9 75.2 11/1/2027 AR USD Provincia del Chaco Ar 9.4 74.8 8/18/2024 AR USD Provincia de Rio Negro 7.8 70.3 12/7/2025 AR USD Cia Latinoamericana de 9.5 73.9 7/20/2023 AR USD Provincia de Buenos Ai 7.9 75.3 6/15/2027 AR USD AES Tiete Energia SA 6.8 1.2 4/15/2024 BR BRL Argentine Republic Gov 8.3 72.9 12/31/2033 AR USD Argentina Bonar Bonds 7.6 74.4 4/18/2037 AR USD Province of Santa Fe 6.9 74.7 11/1/2027 AR USD Provincia de Rio Negro 7.8 70.4 12/7/2025 AR USD Argentina Bonar Bonds 5.8 75.2 4/18/2025 AR USD Noble Holding Internat 6.1 62.0 3/1/2041 KY USD Odebrecht Finance Ltd 6.0 16.4 4/5/2023 KY USD Esval SA 3.5 49.9 2/15/2026 CL CLP Provincia de Rio Negro 7.8 70.3 12/7/2025 AR USD Avadel Finance Cayman 4.5 55.0 2/1/2023 US USD Noble Holding Internat 5.3 60.5 3/15/2042 KY USD Argentine Republic Gov 0.5 27.6 12/31/2038 AR JPY Argentine Republic Gov 6.9 75.2 1/11/2048 AR USD Argentine Republic Gov 8.3 74.5 12/31/2033 AR USD Province of Santa Fe 6.9 74.7 11/1/2027 AR USD ********* 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 2023. 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 * * *