/raid1/www/Hosts/bankrupt/TCRLA

/raid1/www/Hosts/bankrupt/TCRLA_Public/230809.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, August 9, 2023, Vol. 24, No. 159 Headlines A R G E N T I N A ARGENTINA: IMF to Loan as Much as US$10.8BB This Year B E R M U D A VESTTOO: Shake-up at the Top of Firm Over Growing Scandal B R A Z I L ACU PETROLEO: Fitch Hikes Rating on $600MM Secured Notes to 'BB+' BANCO DE DESENVOLVIMENTO: Fitch Upgrades Long Term IDR to 'BB' BRAZIL: Central Bank President Calls For Extended Autonomy of Bank BRAZIL: Market Forecast for 2023 Inflation Rate Adjusted to 4.84% RIO OIL 2014-1: Fitch Upgrades Rating on 2 Tranches to 'BB' G U Y A N A GUYANA: Tables Legislation to Increase The Country's Loan Limit P U E R T O R I C O BED BATH: Fine-Tunes Plan Documents T R I N I D A D A N D T O B A G O TRINIDAD CEMENT: Records $105 Million Net Income in Q2 - - - - - ================= A R G E N T I N A ================= ARGENTINA: IMF to Loan as Much as US$10.8BB This Year ----------------------------------------------------- Patrick Gillespie and Eric Martin at Bloomberg News report that the International Monetary Fund will give Argentina as much as US$10.8 billion in loans for the rest of the year as part of a refinancing agreement that will help the cash-strapped nation to navigate a turbulent period ahead of presidential elections. The first payment of US$7.5 billion will be made in August, after approval by the IMF's executive board in the second half of the month, the Fund said in a statement, confirming its staff had reached an agreement with the government of outgoing President Alberto Fernandez, according to Bloomberg News. That means the money won't be available before a key primary election Argentina holds on Aug. 13, nor in time for the government to repay US$2.6 billion it owes the IMF from a previous loan, Bloomberg News discloses. "It's very good news," Massa, who's both negotiating with the IMF and running for president in the October election, said about the IMF deal in a TV interview, Bloomberg News discloses. "This lets us get through this second half of the year that is obviously marked by the election, which sometimes creates uncertainty or doubts, with a lot more calm." The next review is expected to take place in November, the fund added in the statement, Bloomberg News relays. While it didn't say how much money it would release then, two people familiar with the matter said the combined disbursements for August and November would range between US$9.4 billion and US$10.8 billion, Bloomberg News notes. "Argentina scored a partial win following protracted negotiations with the International Monetary Fund, says Bloomberg Economics' Adriana Dupita, economist for Argentina and Brazil. "It will have early access to the lender's cash despite failing to meet the conditions for regular disbursements. In exchange, the fund insisted on policy measures the government has departed from in recent months, and imposed a lower, but still challenging target of net reserve accumulation." Among the conditions imposed by the Fund for the agreement are the accumulation of at least US$1 billion worth of foreign reserves by the end of the year and no direct monetary financing of Argentina's primary deficit, which excludes interest payments, Bloomberg News relays. The deal also restricts the central bank's ability to intervene in the foreign exchange market to moments of "disorderly conditions." "Although the agreement gives the government some room to manoeuvre prior to the general elections, meeting the new fiscal and reserve accumulation goals will be very challenging," Jaime Reusche, a senior analyst at Moody's Investors Service wrote in emailed comments, Bloomberg News notes. "Macroeconomic conditions will continue to deteriorate until the end of the year," 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. S&P Global Ratings, on June 13, 2023, raised its local currency sovereign credit ratings on Argentina to 'CCC-/C' from 'SD/SD' and its national scale rating to 'raCCC+' from 'SD'. S&P also affirmed its 'CCC-/C' foreign currency sovereign credit ratings on Argentina. The outlook on the long-term ratings is negative. S&P's 'CCC-' transfer and convertibility assessment is unchanged. None of its rated bond issues are affected. S&P said the negative outlook on the long-term ratings is based on the risks surrounding pronounced economic imbalances and policy uncertainties before and after the 2023 national elections. Divisions within the government coalition, and infighting among the opposition, constrain the sovereign's ability to implement timely changes in economic policy. Fitch Ratings also upgraded on June 13, 2023, Argentina's Long-Term Foreign Currency (FC) Issuer Default Rating (IDR) to 'CC' from 'C' and affirmed the Long-Term Local Currency (LC) IDR at 'CCC-'. Fitch typically does not assign Outlooks to sovereigns with a rating of 'CCC+' or below. The upgrade of the FC IDR reflects that Fitch no longer deems a default-like process to have begun, as the authorities have not signaled a clear intention to follow through with an intra-public debt swap announced in March. The new 'CC' rating signals a default event of some sort appears probable in the coming years, regardless of the outcome of upcoming elections. The affirmation of the LC IDR at 'CCC-' follows the peso debt swap in June that Fitch did not deem to be a "distressed debt exchange" (DDE). Moody's Investors Service, in September 2022, affirmed Argentina's Ca foreign-currency and local-currency long-term issuer and senior unsecured ratings. The outlook remains stable. The decision to affirm the Ca ratings balances Argentina's limited market access, weak governance, and history of recurrent debt restructurings with recent efforts to marshal fiscal and monetary measures to start addressing underlying macroeconomic imbalances in the context of the IMF program that was approved in 2022, according to Moody's. DBRS, Inc. confirmed Argentina's Long-Term Foreign Currency Issuer Rating at CCC and downgraded its Long-Term Local Currency Issuer Rating to CCC from CCC (high) on March 3, 2023. ============= B E R M U D A ============= VESTTOO: Shake-up at the Top of Firm Over Growing Scandal --------------------------------------------------------- David Fox at The Royal Gazette reports that a major shake-up for principal figures could be on the cards at Vesttoo, a spokesman has confirmed. Vesttoo is an Israeli start-up insurtech which uses artificial intelligence technology to connect the insurance industry and capital markets, and which has a Bermuda entity at the centre of its business model, according to The Royal Gazette. But a brewing scandal, which has brought an FBI investigation could lead to the ouster of company co-founders, the report relays. The company said in a statement: "We can confirm that the board is considering the removal of Yaniv Bertele, chief executive officer and Alon Lifshitz, chief financial engineer, from their positions at the company. "They will be on paid leave until a final decision is taken. We are exploring multiple options for interim replacements, but no decision has been taken, as of yet. "We want to emphasise that there are no plans to liquidate the company. Our aim is to help the company overcome this crisis, provide solutions to affected clients, and focus on our core services and value proposition in order to rebuild the company. "The board has actively stepped in to assist in the company's day-to-day operations for this purpose," the report discloses. The FBI Financial Crimes team is conducting an investigation into alleged fraudulent activity after claims of fake letters of credit - potentially to the tune of billions of dollars - provided by investors to insurers for reinsurance transactions involving Vesttoo, the report notes. Insurers felt compelled to outline their collateral position and their association with Vesttoo, the report says. Meanwhile, the Bermuda office appeared to be in the midst of staffing changes as separately, Vesttoo, earlier, said it was laying off around 150 employees or 75 per cent of the company's workforce, the report discloses. Set for closure are three offices in Asia, while Bermuda is one of the offices being retained, the report notes. At the time, the company said it was conducting a rigorous internal and external analysis of the events leading up to the first report of a fraudulent LOC, the report relays. They said: "We have engaged an experienced global risk, audit and compliance expert and external attorneys to advise us throughout this process. "In order to solidify the foundation of the company and reassure the industry, leadership must return its focus to core services while reducing overall costs, including parting ways with some of our employees," the report notes. The company in an earlier statement suggested that, at the least it seemed that Vesttoo's procedures were circumvented, the report discloses. The company, which uses artificial intelligence technology to connect the insurance industry and capital markets, last raised $80 million at a $1 billion value last October, the report relays. At the time, it said it would use the funds to further expand its global presence, the report notes. Reuters said DBRS Morningstar global head of insurance Marcos Alvarez said in a recent note that the issue with letters of credit "could have ramifications for the broader insurance and reinsurance market," the report discloses. The news agency said: "Vesttoo's platform aimed to provide insurers with alternative forms of reinsurance. If insurers' reinsurance turns out not to be valid, they will need to find replacement cover, or pay any claims in full, industry sources say," the report relays. Insurance ratings agency AM Best said it was "monitoring the rapidly evolving situation" at Vesttoo and "reviewing . . . insurers that have material amounts of reinsurance counterparty credit risk and reliance on various forms of collateral," the report notes. Major insurance broker Aon said in a filing that some of its clients and counterparties have begun, or said they might begin, legal proceedings against Aon over the fraudulent letters of credit issue, the report says. The Bermuda Monetary Authority was "aware of the recent developments surrounding Vesttoo", a spokesperson told Reuters by e-mail, the report notes. "Per the BMA's remit, it is closely examining and, where needed, will act accordingly," the report adds. =========== B R A Z I L =========== ACU PETROLEO: Fitch Hikes Rating on $600MM Secured Notes to 'BB+' ----------------------------------------------------------------- Fitch Ratings has upgraded the ratings for three Brazilian infrastructure sector issuances following the upgrade of Brazil's sovereign rating and Country Ceiling's revision. -- Acu Petroleo Luxembourg S.A.R.L.'s (Acu Petroleo) USD600 million senior secured notes due in 2035. Upgrade to 'BB+' from 'BB'. The Outlook is Stable. -- Prumo Participacoes e Investimentos S.A.'s (Prumopar) USD350 million senior secured notes due in 2031. Upgrade to 'BB+' from 'BB'. The Outlook is Stable. -- Entrevias Concessionaria de Rodovias S.A. (Entrevias) BRL1.0 billion second debentures issuance due in 2030. International Long-Term Rating upgraded to 'BB' from 'BB-'. The Outlook is Stable. RATING RATIONALE The upgrade of the Long-Term International Rating of Acu Petroleo's and Prumopar's senior secured notes to 'BB+' from 'BB' follow the revision of Brazil's Country Ceiling on July 26, 2023. Both transactions are exposed to transfer and convertibility risk, and the revision of Brazil's Country Ceiling reduced the concerns of a higher risk of controls on the transfer of foreign currency to serve the debt. Acu Petroleo Luxembourg and Prumopar metrics are commensurate to higher ratings according to Transportation Criteria; nonetheless, their ratings are constrained by Brazil's country ceiling as the notes are denominated in USD. The upgrade of the Long-Term International Rating of Entrevias' Second Debentures Issuance reflects the upgrade of the Brazil sovereign rating to 'BB', from 'BB-' on July 26, 2023, as Entrevias is a highway concessionaire with performance highly correlated to the domestic economic environment. Entrevias metrics are commensurate to its 'BB' rating according to applicable criteria. KEY RATING DRIVERS Brazil's upgrade reflects better-than-expected macroeconomic and fiscal performance amid successive shocks in recent years, proactive policies and reforms that have supported these, and Fitch's expectation that the new government will work toward further improvements. The Country Ceiling for Brazil is one notch above the Long-Term Foreign Currency Issuer Default Rating (IDR). This reflects moderate constraints and incentives, relative to the IDR, against capital or exchange controls being imposed that would prevent or significantly impede the private sector from converting local currency into foreign currency and transferring the proceeds to non-resident creditors to service debt payments. RATING SENSITIVITIES Factors that Could, Individually or Collectively, Lead to Negative Rating Action/Downgrade Acu Petroleo Luxembourg S.A.R.L: -- A negative rating action on Brazil's sovereign rating; -- Fitch's expectations of oil prices to be below USD65 per barrel, leading to a lower uplift on volume projections. Prumo Participacoes e Investimentos S.A: -- Operational disruption negatively impacting the cash flows; -- A negative rating action on Brazil's sovereign rating. Entrevias Concessionaria de Rodovias S.A: -- Delays or cost overruns in investments consistently above those contemplated in Fitch's Base Case. Factors that Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade Acu Petroleo Luxembourg S.A.R.L: -- A strengthening of the credit profile of the Brazilian sovereign, particularly the risk of imposing controls on the transfer of foreign currency, provided metrics are in line with the new rating Prumo Participacoes e Investimentos S.A: -- A strengthening of the credit profile of the Brazilian sovereign, particularly the risk of imposing controls on the transfer of foreign currency; provided metrics are in line with the new rating -- Achievement of the target amortization schedule in a sustained basis; -- Favorable track record of operations without disruption. Entrevias Concessionaria de Rodovias S.A: -- Sustained annual traffic growth around 4%, provided Capex and cost profile are in line with Fitch's Base Case. BEST/WORST CASE RATING SCENARIO International scale credit ratings of Sovereigns, Public Finance and Infrastructure issuers have a best-case rating upgrade scenario (defined as the 99th percentile of rating transitions, measured in a positive direction) of three notches over a three-year rating horizon; and a worst-case rating downgrade scenario (defined as the 99th percentile of rating transitions, measured in a negative direction) of three notches over three years. The complete span of best- and worst-case scenario credit ratings for all rating categories ranges from 'AAA' to 'D'. Best- and worst-case scenario credit ratings are based on historical performance. REFERENCES FOR SUBSTANTIALLY MATERIAL SOURCE CITED AS KEY DRIVER OF RATING The principal sources of information used in the analysis are described in the Applicable Criteria. BANCO DE DESENVOLVIMENTO: Fitch Upgrades Long Term IDR to 'BB' -------------------------------------------------------------- Fitch Ratings has upgraded the Long-Term (LT) Issuer Default Ratings (IDRs) of Banco de Desenvolvimento do Espirito Santo S.A. (Bandes), Banco Regional de Desenvolvimento do Extremo Sul (BRDE) and Desenvolve SP - Agencia de Fomento do Estado de Sao Paulo S.A. (Desenvolve SP) to 'BB'/Stable from 'BB-'/Stable. This follows the upgrade of the LT IDRs of Sao Paulo and Parana to 'BB/Stable' from 'BB-/Stable' on Aug. 1, 2023 and a change in Fitch assessment of the credit quality of the states of Espirito Santo and Rio Grande do Sul. Fitch has also upgraded the Shareholder Support Ratings (SSR) of the Brazilian Development Entities controlled by subnational governments to 'bb' from 'bb-', as well as those of Banco do Estado Rio Grande do Sul, S.A. (Banrisul) and Banestes S.A. - Banco do Estado do Espirito Santo (Banestes) to 'bb-' from 'b+' (Fitch also affirmed the Viability Ratings (VRs) for these entities). The banks' National Ratings were not directly affected, as these ratings reflect the relative strengths and weaknesses of each institution in the domestic jurisdiction. KEY RATING DRIVERS IDRs and SSRs of Support-Driven Entities: -- Bandes; -- BRDE; -- Desenvolve SP. The IDRs on the institutions of this group are driven by their SSRs. Fitch believes the shareholders' propensity to provide support is high as those entities are controlled by their respective LRGs and are considered core entities due to their relevant roles for the development and economic growth of their respective states/regions. The ability to support is moderate as reflected in Fitch's assessment of these LRGs' creditworthiness. Due to that, for all the entities, the respective IDRs and SSRs are equalized to the ratings/assessments of their parent's. As is the case for policy agencies or banks, Fitch does not assess Standalone Credit Profile (SCP) or VR, since according to Fitch's methodology, SCPs and VRs are not usually assigned to entities whose operations are largely determined by their policy roles. IDRs and SSRs of VR-Driven Entities: -- Banrisul; -- Banestes. The entities' IDRs are driven by their intrinsic creditworthiness, as reflected by their VRs of 'bb-'. However, the IDRs are also underpinned by potential support from their controlling shareholders, the states of Rio Grande do Sul and Espirito Santo, as reflected by the banks SSRs of 'bb-'. The VRs and LT IDRs of Banrisul and Banestes, were affirmed at 'bb-' and 'BB-', respectively. The SSRs were upgraded to 'bb-', from 'b+' and are now at the same level as the banks' VRs. The VRs reflect both banks' strong presence in their respective states with relevant market shares by loans and deposits. The role of those banks is to support local economic and social development. However, by being commercial banks, both entities have diversified business operations, serving both companies and individuals. RATING SENSITIVITIES Factors that Could, Individually or Collectively, Lead to Negative Rating Action/Downgrade -- Fitch considers that all Financial Institutions included in this review remain constrained by the LRG rating, therefore, the main sensitivities of all entities included in this action are linked to potential changes in the LRG ratings, in any direction. Similarly, IDRs, which are derived from SSR, of the entities mentioned in this report remain dependent on Fitch's view regarding the ability and/or propensity of its ultimate parent in providing support to the controlled entity/subsidiary in case of need and will change depending on Fitch's opinion of this. For more details and for the individual sensitivities derived from each institution's VR, please refer to the individual report of each entity. -- Ratings downside primarily would also be contingent on a downgrade of the respective LRG's IDR or a deterioration in Fitch view of the LRG's creditworthiness. However, in the case of Banrisul and Banestes, the downside on the IDRs would be limited to the level of these banks' VRs, currently at 'bb-'. -- If the VRs of Banrisul and Banestes were to be downgraded from their current level, then the downside on the IDRs would be limited to the level indicated by the banks' Shareholder Support Ratings (SSR), currently at 'bb-' given the potential support from the states of Rio Grande do Sul and Espirito Santo. Factors that Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade -- Rating upside would be primarily contingent on an upgrade of the Brazilian sovereign rating and/or by an improvement in their respective parents' ability or propensity to provide support. -- For more details and for the individual sensitivities derived from each institution, please access the individual report of each entity. BEST/WORST CASE RATING SCENARIO International scale credit ratings of Financial Institutions and Covered Bond issuers have a best-case rating upgrade scenario (defined as the 99th percentile of rating transitions, measured in a positive direction) of three notches over a three-year rating horizon; and a worst-case rating downgrade scenario (defined as the 99th percentile of rating transitions, measured in a negative direction) of four notches over three years. The complete span of best- and worst-case scenario credit ratings for all rating categories ranges from 'AAA' to 'D'. Best- and worst-case scenario credit ratings are based on historical performance. REFERENCES FOR SUBSTANTIALLY MATERIAL SOURCE CITED AS KEY DRIVER OF RATING The principal sources of information used in the analysis are described in the Applicable Criteria. PUBLIC RATINGS WITH CREDIT LINKAGE TO OTHER RATINGS -- Banco Regional de Desenvolvimento do Extremo Sul's (BRDE) SSR and IDR are linked to the IDRs of its parents (state of Parana, state of Santa Catarina and state of Rio Grande do Sul); -- Banco de Desenvolvimento do Espirito Santo S.A. and Banestes S.A. - Banco do Estado do Espirito Santo's SSR and IDR are linked to the IDRs of its parent (state of Espirito Santo); -- Banco do Estado do Rio Grande do Sul S.A's SSR and IDR are linked to the IDRs of its parents (state of Rio Grande do Sul); -- Desenvolve SP - Agencia de Fomento do Estado de Sao Paulo S.A's SSR and IDR are linked to the IDRs of its parents (state of Sao Paulo). ESG CONSIDERATIONS The highest level of ESG credit relevance is a score of '3', unless otherwise disclosed in this section. A score of '3' means ESG issues are credit-neutral or have only a minimal credit impact on the entity, either due to their nature or the way in which they are being managed by the entity. Fitch's ESG Relevance Scores are not inputs in the rating process; they are an observation on the relevance and materiality of ESG factors in the rating decision. BRAZIL: Central Bank President Calls For Extended Autonomy of Bank ------------------------------------------------------------------ Richard Mann at Rio Times Online reports that in a formal session at Brazil's Chamber of Deputies, the President of the Central Bank (BC), Roberto Campos Neto, expressed the need to extend the autonomy of the institution, emphasizing that operational autonomy alone is insufficient. The event also paid tribute to his grandfather, the renowned economist, and politician Roberto Campos, who would have turned 106, according to Rio Times Online. A law signed by former President Jair Bolsonaro in February 2021 granted operational autonomy to the Central Bank, stating that the institution possesses "technical, operational, administrative, and financial" autonomy, adds the report. 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. Fitch Ratings upgraded on July 26, 2023, Brazil's Long-Term Foreign-Currency Issuer Default Rating (IDR) to 'BB', from 'BB-', with a Stable Outlook. The upgrade reflects better-than-expected macroeconomic and fiscal performance amid successive shocks in recent years, proactive policies and reforms that have supported this, and Fitch's expectation that the new government will work toward further improvements. In mid-June 2023, S&P Global Ratings, revised the outlook on its long-term global scale ratings on Brazil to positive from stable. S&P affirmed its 'BB-/B' long- and short-term foreign and local currency sovereign credit ratings on Brazil. S&P also affirmed its 'brAAA' national scale rating, and the outlook remains stable. The transfer and convertibility assessment remains 'BB+'. The positive outlook reflects signs of greater certainty about stable fiscal and monetary policy that could benefit Brazil's still-low GDP growth prospects. Continued GDP growth plus the emerging framework for fiscal policy could result in a smaller government debt burden than expected, which could support monetary flexibility and sustain the country's net external position. 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). BRAZIL: Market Forecast for 2023 Inflation Rate Adjusted to 4.84% ----------------------------------------------------------------- Rio Times Online reports that financial market participants have lowered the inflation expectation for 2023 to 4.84%, according to the Focus Bulletin by the Central Bank. This marks the second consecutive week of decrease following a brief interruption in an eight-week downtrend, according to Rio Times Online. The expectation is 0.14 percentage point lower than a month ago, and it indicates a downward trend for the coming year, the report notes. For 2024, analysts predict an inflation rate of 3.89%, the report adds. 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. Fitch Ratings upgraded on July 26, 2023, Brazil's Long-Term Foreign-Currency Issuer Default Rating (IDR) to 'BB', from 'BB-', with a Stable Outlook. The upgrade reflects better-than-expected macroeconomic and fiscal performance amid successive shocks in recent years, proactive policies and reforms that have supported this, and Fitch's expectation that the new government will work toward further improvements. In mid-June 2023, S&P Global Ratings, revised the outlook on its long-term global scale ratings on Brazil to positive from stable. S&P affirmed its 'BB-/B' long- and short-term foreign and local currency sovereign credit ratings on Brazil. S&P also affirmed its 'brAAA' national scale rating, and the outlook remains stable. The transfer and convertibility assessment remains 'BB+'. The positive outlook reflects signs of greater certainty about stable fiscal and monetary policy that could benefit Brazil's still-low GDP growth prospects. Continued GDP growth plus the emerging framework for fiscal policy could result in a smaller government debt burden than expected, which could support monetary flexibility and sustain the country's net external position. 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). RIO OIL 2014-1: Fitch Upgrades Rating on 2 Tranches to 'BB' ----------------------------------------------------------- Fitch Ratings has upgraded the series 2014-1, 2014-3 and 2018-1 notes issued by Rio Oil Finance Trust to 'BB' from 'BB-'. The Rating Outlook is Stable. The upgrade on the notes is driven by the recent upgrade of both Petrobras' and Banco do Brasil's international Long-Term Issuer Default Ratings to 'BB' from 'BB-' following the upgrade of Brazil's Sovereign Rating to 'BB' from 'BB-'. The ratings are not directly linked to the originator's credit quality. The ratings are based on potential production and generation risk and are ultimately linked to Petrobras' IDR, as it is the main source of cash flow generation. The ratings are capped at Petrobras' rating level (BB/Stable), as the largest obligor of royalties and special participations payments. Additionally, the ratings are also capped at Banco do Brazil's rating level (BB/Stable), given it cannot be replaced as collection account bank. The assigned ratings address timely payment of interest and timely payment of principal on a quarterly basis. ENTITY/DEBT RATING PRIOR ---------- ------- ----- Rio Oil Finance Trust 2014-1 76716XAA0 LT BB Upgrade BB- 2014-1 REGS USU76673AA72 LT BB Upgrade BB- 2014-3 76716XAB8 LT BB Upgrade BB- 2014-3 regs USU76673AB55 LT BB Upgrade BB- TRANSACTION SUMMARY The notes issued by Rio Oil Finance Trust, a Delaware-based special purpose vehicle (SPV) constituted for the sole purpose of this transaction are backed by the royalty flows owed by oil concessions, predominantly operated by Petrobras, to the government of the state of Rio de Janeiro (RJS), which has assigned 100% of the flows to RioPrevidencia (RP). For the purpose of this transaction, RP sold its rights to Rio Oil Finance Trust. KEY RATING DRIVERS Ratings Not Directly Linked to Originator's: RP is an autonomous government agency that is part of the Secretary of State for Planning and Management of RJS (BB/Stable). Performance of the originator will not affect the collateral as the generation of the cash flow needed to meet timely debt service is not dependent on either RP or RJS. Largest Obligor Rating Cap: Petrobras' rating is the ultimate cap for the proposed transaction, as it is the main source of cash flow generation. Petrobras carries Local and Foreign Currency IDRs of 'BB'/Stable and 'AAA(bra)'/Stable. The company is majority controlled by the federal government of Brazil and has the rights to E&P of the vast majority of Brazil's oil fields. Future Production Risk: The transaction benefits from growth in production levels as it increases the total royalty flows. Depressed oil prices have led Petrobras to reduce production targets on multiple occasions. Nevertheless, Petrobras recently increased their 2023-2027 capital expenditure projection from 2022-2026 projections, and increasing production levels would benefit the transaction in the near to medium term. Cash Flows Support Rating: The expected levels of annualized average debt service coverage ratios (AADSCRs) over 4.0x partially mitigate the transaction's exposure to fluctuations in oil prices and production levels at the current rating level. Fitch expects AADSCRs to be over 4.0x for the life of the transaction, assuming that Law 12,734 has been implemented. Oil Revenues Dedicated Account Modification Mitigates Redirection Risk: Pursuant to the Oil Revenues Dedicated Account Modification Legislation, the RioPrevi Oil Revenues initially deposited to the RJS Oil Revenues Dedicated Account are no longer required by legislation to be deposited into a state-owned account. Oil revenues assigned to this transaction are instead deposited into an account under the name of the issuer. This change in the account mitigates potential redirection of flows to RJS. As Banco do Brasil (BdB) cannot be replaced as a collection bank, the transaction is directly linked to the credit quality of BdB (BB/Stable). Ample Liquidity for Timely Payment: The transaction benefits from liquidity, in the form of a Debt service reserve account (DSRA) and a Liquidity Reserve Account. Funds in deposit in these two accounts shall at all times be sufficient cover three P&I payments, which is considered sufficient to keep debt service current on the notes under different stress scenarios. Potential Exposure Political Risk Partially Mitigated: The state's liquidity constraints, evidenced by various delays in commercial and other payments, have heightened the transactions political risk exposure. However, provisions included in the sixth rescission waiver and amendment, such as the rescission of the trapping of excess cash and of the early amortization period, will increase the cash flows returned to the state, and, in turn, decrease the transaction's exposure to potential political risk. Legal Changes May Affect Collateral Stability: Although, to date, no amendments affecting the distribution of royalties for the existing concession Regime have been implemented, provisions regarding the change in allocation percentages incorporated in Law 12,734 are currently under review. The transaction was analyzed assuming the law will change and DSCRs remain sufficiently robust and commensurate with the expected ratings. True Sale Valid under Brazilian Law: Collateral backing this transaction was transferred to RP by RJS through a state decree, making RP the legal owner of the royalties. This transfer gives RP the right to sell the collateral into the trust. Transfer and Convertibility Risk: Series 2014-1, 2014-3 and 2018-1 notes are exposed to transfer and convertibility risk as royalty flows are paid in an account in Brazilian reais. This exposure caps the rating of the transaction at the country ceiling of Brazil, which is currently 'BB+'. To partially mitigate operational risk that may arise from transferring and converting flows on a daily basis to an off-shore account, the transaction contemplates reserve funds that covers three P&I payment. RATING SENSITIVITIES Factors that Could, Individually or Collectively, Lead to Negative Rating Action/Downgrade -- The transaction is exposed to oil price and production volume risks. Sustained low prices or declines in prices or production levels significantly below expectations may trigger downgrades; -- The ratings are capped by the credit quality of Petrobras, the main obligor generating cash flows to support the transaction, and to the sovereign rating and country ceiling assigned to Brazil. A downgrade of Petrobras or the sovereign would trigger a downgrade on the notes; -- The ratings are sensitive to the rating of 'BdB' given the excessive counterparty exposure to the transaction; therefore, a downgrade of 'BdB' would trigger a downgrade on the notes. Factors that Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade -- The main constraints to the program rating are the ratings of Petrobras and BdB. An upgrade of both Petrobras and BdB, together with sustained high oil prices, which in turn supports growth in production levels, could trigger a positive rating action. BEST/WORST CASE RATING SCENARIO International scale credit ratings of Structured Finance transactions have a best-case rating upgrade scenario (defined as the 99th percentile of rating transitions, measured in a positive direction) of seven notches over a three-year rating horizon; and a worst-case rating downgrade scenario (defined as the 99th percentile of rating transitions, measured in a negative direction) of seven notches over three years. The complete span of best- and worst-case scenario credit ratings for all rating categories ranges from 'AAAsf' to 'Dsf'. Best- and worst-case scenario credit ratings are based on historical performance. USE OF THIRD PARTY DUE DILIGENCE PURSUANT TO SEC RULE 17G -10 Form ABS Due Diligence-15E was not provided to, or reviewed by, Fitch in relation to this rating action. REFERENCES FOR SUBSTANTIALLY MATERIAL SOURCE CITED AS KEY DRIVER OF RATING The principal sources of information used in the analysis are described in the Applicable Criteria. PUBLIC RATINGS WITH CREDIT LINKAGE TO OTHER RATINGS The future flow ratings are ultimately capped by the credit risk of Banco do Brasil S.A. and Petroleo Brasileiro S.A. (Petrobras) as measured by their Long-Term IDR. ESG CONSIDERATIONS The highest level of ESG credit relevance is a score of '3', unless otherwise disclosed in this section. A score of '3' means ESG issues are credit-neutral or have only a minimal credit impact on the entity, either due to their nature or the way in which they are being managed by the entity. Fitch's ESG Relevance Scores are not inputs in the rating process; they are an observation on the relevance and materiality of ESG factors in the rating decision. =========== G U Y A N A =========== GUYANA: Tables Legislation to Increase The Country's Loan Limit --------------------------------------------------------------- RJR News reports that the Guyana government has tabled legislation increasing the country's limits of external and public loans. This will allow the country to access more funds from international markets, bolstering investments in infrastructure, social programs and economic development, according to RJR News. The limit of external loans will move from 650 billion dollars to 900 billion, and the limit of public loans from 500 billion dollars to 750 billion, the report notes. In February 2021, the government pushed through an increase in the external debt ceiling from 400 billion dollars to 650 billion and the domestic debt ceiling from 150 billion dollars to 500 billion, the report relays. ===================== P U E R T O R I C O ===================== BED BATH: Fine-Tunes Plan Documents ----------------------------------- Bed Bath & Beyond Inc. and its Debtor Affiliates submitted an Amended Joint Chapter 11 Plan dated July 31, 2023. The Debtors believe that the Plan maximizes stakeholder recoveries in these Chapter 11 Cases. Although for purposes of administrative convenience and efficiency the Plan has been filed as a joint plan for each of the Debtors and presents together Classes of Claims against, and Interests in, the Debtors, the Plan does not provide for the substantive consolidation of any of the Debtors. On the Effective Date, the Wind-Down Debtors shall establish and fund the Professional Fee Escrow Account with Cash equal to the Professional Fee Reserve Amount plus the amount of $600,000 for payment of professional fees for the 2014 Senior Unsecured Notes Trustee (the "2014 Notes Indenture Professional Fee Reserve Amount"). The Professional Fee Escrow Account shall be maintained in trust solely for the Professionals and the 2014 Notes Indenture Professional Fee Reserve Amount shall be maintained in trust solely for the professionals retained by the 2014 Senior Unsecured Notes Trustee. Such funds shall not be considered property of the Estates or the Plan Administrator. The amount of Professional Fee Claims owing to the Professionals shall be paid in Cash to such Professionals by the Wind-Down Debtors as soon as reasonably practicable after such Professional Fee Claims are Allowed. The amount of professional fees paid to the professionals retained by the 2014 Senior Unsecured Notes Trustee shall be paid in Cash to such professionals by the Wind-Down Debtors as soon as reasonably practicable after the Effective Date. When all Allowed amounts owing to the Professionals and the professionals for the 2014 Senior Unsecured Notes Trustee have been paid in full, any amount remaining in the Professional Fee Escrow Account shall promptly be paid to the Wind-Down Debtors for distribution in accordance with the Waterfall Recovery without any further action or order of the Bankruptcy Court. Like in the prior iteration of the Plan, each Holder of an Allowed General Unsecured Claim shall receive its Pro Rata share of (i) the Shared Proceeds Pool, only if such proceeds are available after all senior Claims (other than the DIP Claims and FILO Claims) are paid in full and (ii) any remaining Distributable Proceeds available after payment in full of all senior Claims. On or after the Effective Date, the Debtors shall make distributions on account of Allowed Claims using the Distributable Proceeds. In accordance with the Final DIP Order, (a) Distributable Proceeds of Prepetition Collateral shall be paid to Holders of Allowed Claims until paid in full from time to time in the following priority: (i) first, on account of Allowed FILO Claims; (ii) second, on account of DIP Claims; (iii) third, on account of Allowed Administrative Claims (other than DIP Claims) and Priority Tax Claims; (iv) fourth, on account of Allowed Other Secured Claims; (v) fifth, on account of Allowed Other Priority Claims; (vi) sixth, on account of any Allowed Junior Secured Claims; and (vii) seventh, on account of any Allowed General Unsecured Claims; and (b) Distributable Proceeds of DIP Collateral that does not constitute Prepetition Collateral shall be paid to Holders of Allowed Claims until paid in full from time to time in the following priority: (i) first, on account of Allowed DIP Claims; (ii) second, on account of Allowed FILO Claims; (iii) third, on account of Allowed Administrative Claims (other than DIP Claims) and Priority Tax Claims; (iv) fourth, on account of Allowed Other Secured Claims; (v) fifth, on account of Allowed Other Priority Claims; (vi) sixth, on account of any Allowed Junior Secured Claims; and (vii) seventh, on account of any Allowed General Unsecured Claims (collectively, the "Waterfall Recovery"). Any Asset Sale Transaction will be either (a) conducted pursuant to the Bidding Procedures or Lease Sale Procedures, (b) approved by the Bankruptcy Court prior to the Effective Date, or (c) otherwise authorized by the Plan. The Plan Administrator, subject to the Sharing Mechanism, will fund distributions under the Plan from (a) the Combined Reserve; (b) the WARN Reserve; and (c) Distributable Proceeds in accordance with the Waterfall Recovery, unless, as it relates to each of the foregoing, such distributions are provided for in the DIP Budget. Distributable Proceeds will be created by, among other things, the prosecution and monetization of Non-Released Claims. Without limiting the foregoing, from and after the Effective Date, any Entity (other than the DIP Agent, the DIP Lenders, the ABL Agent, the FILO Lenders, or the FILO Agent) that is given the opportunity to opt out of the releases and does not exercise such opt out may not assert any claim or other Cause of Action against any Released Party based on or relating to, or in any manner arising from, in whole or in part, the Debtors. From and after the Effective Date, any Entity (other than the DIP Agent, the DIP Lenders, the ABL Agent, the FILO Lenders, or the FILO Agent) that opted out of the releases may not assert any claim or other Cause of Action against any Released Party for which it is asserted or implied that such claim or Cause of Action is not subject to the releases contained in the Plan without first obtaining a Final Order from the Bankruptcy Court (a) determining, after notice and a hearing, that such claim or Cause of Action is not subject to the releases contained in the Plan and (b) specifically authorizing such Person or Entity to bring such claim or Cause of Action against any such Released Party. For the avoidance of doubt, the terms of this paragraph shall not apply to the Plan Administrator. The Bankruptcy Court will have sole and exclusive jurisdiction to determine whether a claim or Cause of Action constitutes a direct or derivative claim, is colorable and, only to the extent legally permissible and as provided for in the Plan, the Bankruptcy Court shall have jurisdiction to adjudicate the underlying claim or Cause of Action. A full-text copy of the Amended Joint Plan dated July 31, 2023 is available at https://urlcurt.com/u?l=KjmO0d from Kroll LLC, the claims agent. Co-Counsel to the Debtors: Joshua A. Sussberg, P.C. Emily E. Geier, P.C. Derek I. Hunter, Esq. KIRKLAND & ELLIS LLP KIRKLAND & ELLIS INTERNATIONAL LLP 601 Lexington Avenue New York, New York 10022 Tel: (212) 446-4800 Fax: (212) 446-4900 Email: joshua.sussberg@kirkland.com emily.geier@kirkland.com derek.hunter@kirkland.com Co-Counsel to the Debtors: Michael D. Sirota, Esq. Warren A. Usatine, Esq. Felice R. Yudkin, Esq. COLE SCHOTZ P.C. Court Plaza North, 25 Main Street Hackensack, New Jersey 07601 Tel: (201) 489-3000 Email: msirota@coleschotz.com wusatine@coleschotz.com fyudkin@coleschotz.com About Bed Bath & Beyond Bed Bath & Beyond Inc., together with its subsidiaries, is an omnichannel retailer selling a wide assortment of merchandise in the Home, Baby, Beauty & Wellness markets and operates under the names Bed Bath & Beyond, buybuy BABY, and Harmon, Harmon Face Values. The Company also operates Decorist, an online interior design platform that provides personalized home design services. At its peak, Bed Bath & Beyond operated the largest home furnishing retailer in the United States with over 970 stores across all 50 states, consistently at the forefront of major home and bath trends. Operating stores spanning the United States, Canada, Mexico, and Puerto Rico, Bed Bath & Beyond offers everything from bed linens to cookware to electric appliances, home organization, baby care, and more. Bed Bath & Beyond closed over 430 locations across the United States and Canada before filing chapter 11 cases, implementing full scale winddowns of their Canadian business and the Harmon branded stores. Left with 360 Bed Bath & Beyond and 120 buybuy BABY stores, Bed Bath & Beyond Inc. and 73 affiliated debtors on April 23, 2023, each filed a voluntary petition for relief under Chapter 11 of the United States Bankruptcy Code to pursue a wind down of operations. The cases are pending before the Honorable Vincent F. Papalia and have requested joint administration of the cases under Bankr. D.N.J. Lead Case No. 23-13359. Kirkland & Ellis LLP and Cole Schotz P.C. are serving as legal counsel, Lazard Frares & Co. LLC is serving as investment banker, and AlixPartners LLP is serving as financial advisor. Bed Bath & Beyond Inc. has retained Hilco Merchant Resources LLC to assist with inventory sales. Kroll LLC is the claims agent. ===================================== T R I N I D A D A N D T O B A G O ===================================== TRINIDAD CEMENT: Records $105 Million Net Income in Q2 ------------------------------------------------------ Trinidad and Tobago Newsday reports that the Trinidad Cement Ltd (TCL) group recorded a $51 million increase in net income (after taxes) for the second quarter, ending June 30. In its consolidated financial report, published on the TT Stock Exchange website, TCL recorded a net income of $105 million in Q2, compared to $54 million during the same period in 2022, according to Trinidad and Tobago Newsday. According to the release, this was attributed to a 93 per cent increase in cement volumes in TT and Guyana, a positive impact of price increases implemented to contain cost inflation and improved operating results in Barbados under its new operating model, the report discloses. "It also represents a significant improvement in comparison to the loss of $2 million during the first quarter of 2023, which was because of lower cement volumes and a higher cost of sales related to planned maintenance in Jamaica," TCL said, the report relays. The consolidated revenue from continuing operations in Q2 was $595 million, an increase of 11 per cent when compared to Q2 in 2022, the report notes. The group's adjusted earnings before interest, taxes, depreciation, and amortisation (EBITDA) -- measure of profitability to net income -- of $186 million in Q2 reflected an increase of 39 per cent compared to the same period of the previous year, the report relays. This was as a result of higher sales volumes across the group, the report discloses. Cement sales volumes increased by four per cent in TT and five per cent in Jamaica, the report says. During the second quarter of 2023, the group generated net cash of $39 million from operating activities, the report relays. This was driven by improved operating results when compared to 2022, the report notes. In the director's statement - attached to the financial report - managing director Francisco Aguilera Mendoza said sustainability is a strategic priority for the group, the report says. "We continue to embrace climate action as our responsibility with an aggressive programme which features sustainable products and solutions, decarbonising our operations, circular economy, water diversity, promoting a green economy, and innovation and partnerships," Mendoza said, the report discloses. TCL's operations in TT and Jamaica partnered with their respective governments, local agencies, and other companies involved in sustainable development, the report says. The group's low-carbon cement brand - ECO Cement - accounted for 52 per cent of its total export volume to key Caricom markets, the report notes. "We are fully committed to following our sustainability roadmap towards the achievement of our targets. Despite inflation, our markets continue to show strong cement volumes, in particular Guyana with an increase of 30 per cent in cement volumes between June 2022-2023," Mendoza said, the report adds. As reported by the Troubled Company Reporter-Latin America in March 2023, Trinidad Express noted that President-General of the Oilfields Workers' Trade Union (OWTU) Ancel Roget is calling for workers at the Trinidad Cement Ltd (TCL) to be paid outstanding monies in relation to collective agreements dated back to 2015. Should this continue to be unpaid, the workers will continue to protest and strike action is also not off the cards, according to Trinidad Express. Speaking outside the TCL compound in Claxton Bay during protest action by retirees and present employees, Roget said that the outstanding monies include the Cost of Living Allowance (COLA) and profit sharing over three collective bargaining periods from 2015 to 2024, the report noted. ********* 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 * * *