/raid1/www/Hosts/bankrupt/TCRLA

/raid1/www/Hosts/bankrupt/TCRLA_Public/231019.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 Thursday, October 19, 2023, Vol. 24, No. 210 Headlines B R A Z I L BANCO BMG: Fitch Affirms 'B+' LongTerm IDRs, Outlook Stable BANCO MASTER: Fitch Hikes LongTerm IDRs to 'B+', Outlook Stable BANCO PAN: Fitch Affirms 'BB' LongTerm IDRs, Outlook Stable BINANCE: CEO, Other Exchange Leaders at Risk of Brazil Indictment BRAZIL: Auto Exports to Plunge as Argentina Crisis Hits Hard BRAZIL: Farming Grapples with High Interest Rates PETROLEO BRASILEIRO: Targets Offshore Wind Energy Leadership H A I T I HAITI: Closes its Border Gates and Slows the Reopening of Commerce J A M A I C A JAMAICA: Bartlett Again Calls For Global Tourism Resilience Fund - - - - - =========== B R A Z I L =========== BANCO BMG: Fitch Affirms 'B+' LongTerm IDRs, Outlook Stable ----------------------------------------------------------- Fitch Ratings has downgraded the Long-Term and Short-Term National rating of Banco BMG S.A. (BMG) to 'A-(bra)' from 'A(bra)' and to 'F2' from 'F1'. In addition, Fitch has affirmed BMG's Long-Term Foreign and Local Currency Issuer Default Ratings (IDR) at 'B+'. The Rating Outlooks remain Stable for all long-term ratings. KEY RATING DRIVERS National Ratings Downgraded: BMG's intrinsic credit profile, as illustrated by its Viability Rating (VR) of 'b+', underpins its IDRs and National Ratings. However, Fitch downgraded the bank's National Ratings due to a sustained deterioration in the bank's financial metrics relative to Brazilian peers. Satisfactory Business Profile: BMG's business profile remains satisfactory as the bank holds a strong position in its core business segments. BMG also continues to expand and refine the businesses of its subsidiaries that offer other products and services such as insurance. The bank is very liquid and management has renewed its focus on improving the bank's profitability metrics and the quality of its credit portfolio while improving its capitalization metrics. The bank's main credit exposures relate to its traditional, lower risk, pension/payroll-backed (consignado) credit portfolio. To diversify its sources of revenues, the bank also offers a variety of other retail, wholesale products and insurance products and has invested heavily to grow its digital bank capabilities, which has already seen its number of digital account holders reach 8.5 million as of June 30, 2023. Profitability Remains a Challenge: Achieving consistent, recurring operational profitability over the past few years continues to be a relevant challenge for BMG. Operational profitability was slightly above break-even for YE 2022 and YE 2021 and negative for the first half of 2023. Operating profit to risk weighted assets (RWAs) was negative 1.36% at June 2023. The recent deterioration of its profitability metrics was due to multiple factors including lower margins, high investment expenses and higher operating costs. Lower margins were in part due to interest rate caps on the bank's consignado portfolio. Management expects to begin reporting improved operating profit ratios by further expense control and focusing on its more traditional and profitable lines of business. Loan Impairments Increased: Asset quality metrics saw a slight deterioration from the previous year. BMG's multiple credit products have a variety of underwriting standards and risk tolerances. The bank's consignado products are lower risk products by nature and as a result are less profitable due to lower pricing. In BMG's case, these products account for nearly 61% of the total loan portfolio (of which the vast majority of the payroll-backed exposure is federal government risk) which usually results in lower levels of impairment. Higher pricing is used to mitigate the higher level of impairments common in some of the bank's non-consignado credit portfolios. The over 90 day non-performing loan ratio to total loan ratio at June 2022 rose to 5.5% (from the 4.4% reported a year earlier). Fitch conservatively looks at the Impaired loan ratio (which includes loans 60 days past due [known as 'D-H loans' as classified by the Central Bank]) and that ratio was up to 6.95% driven in part by the bank's non-consignado credit portfolios. As a result, management has chosen to exit some of these higher risk business segments and expects the impaired ratios to improve over the rest of the year. Pressured Capitalization Ratios: BMG's capitalization ratios remain adequate despite a recent reduction driven in part by an increase in RWAs and weak capital generation. As of June 30, 2023, the bank's Common Equity Tier I ratio decreased to 9.3% and the total capital ratio to 12.5%. The current Tier I ratio does not compare as well as the peer averages but is expected to grow in the next few quarters through higher earnings retention and a stricter management of its RWAs. Comfortable Liquidity Position and Diverse Funding: For the past few years, BMG has been operating with a comfortable liquidity position, which was partially enhanced by securitizations of receivables, funding from diversified customer deposits and the strategic downsizing of its certain credit portfolios. The bank's gross loan to deposit ratio at June 30, 2023 was at a conservative level of 96%. The bank's very liquid asset position (Caixa) also remained very high at slightly over BRL 5 billion at June 30, 2023. This level of liquidity is likely to slightly decrease during the next few quarters to support credit growth and improve profitability. RATING SENSITIVITIES Factors that Could, Individually or Collectively, Lead to Negative Rating Action/Downgrade - Weak financial performance (negative trend in operating profit-to-RWAs from current low levels); - A sustained deterioration in its asset quality (non-performing loans over 90 days/gross loans remaining above 8%); - A sustained deterioration in capitalization (CET I ratio falling below 9%). Factors that Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade - A Positive rating action/upgrade for BMG's IDRs is not likely given the bank's current financial profile. Over the medium-term, positive trends in its credit metrics (notably asset quality, operating profits and capitalization) could result in a positive rating action on the National Ratings;; - A consolidation of the bank's business model, including a relevant and sustained improvement in its operating profits/RWA ratio above 2.5%, especially if coupled with further and sustained declines in its impaired loan ratio (D-H) to below 5% of total loans, without increased charge-offs and foreclosed assets, would be positive for BMG's National Ratings; - Maintenance of CET 1 ratio above 12%. ESG CONSIDERATIONS The highest level of ESG credit relevance is a score of '3', unless otherwise disclosed in this section. A score of '3' means ESG issues are credit-neutral or have only a minimal credit impact on the entity, either due to their nature or the way in which they are being managed by the entity. Fitch's ESG Relevance Scores are not inputs in the rating process; they are an observation on the relevance and materiality of ESG factors in the rating decision. Entity/Debt Rating Prior ----------- ------ ----- Banco BMG S.A. LT IDR B+ Affirmed B+ ST IDR B Affirmed B LC LT IDR B+ Affirmed B+ LC ST IDR B Affirmed B Natl LT A-(bra)Downgrade A(bra) Natl ST F2(bra)Downgrade F1(bra) Viability b+ Affirmed b+ Government Support ns Affirmed ns BANCO MASTER: Fitch Hikes LongTerm IDRs to 'B+', Outlook Stable --------------------------------------------------------------- Fitch Ratings has upgraded Banco Master S.A.'s (Master) Long-Term (LT) Foreign and Local Currency Issuer Default Ratings (IDRs) to 'B+' from 'B'. The Rating Outlook is Stable. Master's Viability Rating (VR) has also been upgraded to 'b+' from 'b'. At the same time, Fitch upgraded Master's Long-Term National Rating to 'BBB(bra)' from 'BBB-(bra)'; the Short-Term National Rating to 'F2(bra)' from 'F3(bra)' and assigned a Positive Outlook. The upgrade of Master's ratings reflects the stabilization of its financial profile with good liquidity, asset quality and profitability levels when compared to peers. Fitch has noted an improvement in the bank's business profile - with better visibility of its strategy and core revenues. The Positive Outlook on the LT National Rating considers the bank's anticipated progress in its commercial repositioning. Fitch expects Master to prioritize greater consistency in its business model in the medium term, which will contribute to improving and/or maintaining the bank's good financial profile relative to its domestic peers. KEY RATING DRIVERS Ratings Driven by VR: Master's ratings reflect its growing, but still evolving franchise and business model. Although no longer dependent on the sale of assets, the bank continues to face the challenge of reducing the volatility of its results, mainly derived from its high level of recent investments as well as the risks associated with its assets that carry credit risk. The ratings also reflect the improvement observed in its funding and liquidity structure, as well as its adequate capitalization. Operation Environment (OE) at 'bb': The actual OE for banks in Brazil reflects the positive trend in Fitch's core metrics for the OE assessment and the Brazilian economy's sustained recovery, translating to resilient banking sector performance. Fitch's key metrics used to determine the country's OE score are the Operational Risk Index (ORI) and GDP per capita. Both of these metrics indicated a positive trend for Brazil as the OE recovered from recent macro challenges. Gain of Scale in the Business Profile: Master continues to expand its business verticals. As of June 2023, the most relevant were: payroll loans activities, judicial securities issued by Brazil federal government (precatorios), foreign exchange and private credit operations securitized through its funds. At the same time, the bank has also sought to develop new business lines to achieve greater revenue and client diversification. Master's main initiatives include the development of its investment banking arm and wealth management, combined with its international expansion strategy. Risk Profile Moderate: Master continues in its process of updating/developing and implementing its risk controls and policies, for both its legacy operations and new portfolios. New people have been hired to improve models, as well as monitor the evolution of portfolios. Although the bank has established market policies, in Fitch's view the operating history is short, especially in new products. The bank's business model, as well as its organizational structure, is more complex relative to its peers, given Master's current strategy of investing in investment funds (FIDCs) and equity investment funds (FIPs) -- instruments with lower liquidity compared with government bonds. This structure reduces investors' visibility of holdings/exposures that could affect the bank's financial performance. Adequate Asset Quality: Master's asset quality ratios compare positively with its peers, benefiting from growth of 18% during the first half of 2023 (1H23; strong growth in 2022: +140,7%), as well as a high proportion of precatorios, which reached 54% of total loans during this period, but with a downward trend in portfolio representation. Loans classified between 'D-H' (Impaired Loans) declined to 2.3% of gross loans in June 2023 from a four-year average of 3.4% (2019-2022). Despite low delinquencies, the bank maintains a moderate client concentration, with the 20 largest credit exposures accounting for 19% of gross loans. Excluding precatorios operations, the 20 largest exposures reached 41.5% of gross loans. Improvements in Profitability Ratios: In the 1H23, Master reported an operating profit close to BRL453 million, its best result, due to the increase in scale gains and the maturation of its business profile. In 1H23, the operating profits/risk weighted assets (RWA) was strong at 6% against a four-year average of 2.5%. Despite the volatility, the 2023 results show progress. The bank is currently no longer dependent on the sale of its portfolio of assigned credit. At the same time, its subsidiaries have contributed positively. It is expected that with capital injections the bank will increase its retention of the loan portfolio which will contribute to the maintenance of good profitability ratios in the medium term. Better Capital Levels: Master's capitalization ratios have gradually improved despite strong asset expansion, supported by the shareholders' constant capital contributions in recent years and internal capital generation. At June 2023, the bank's common equity tier 1 capital (CET1) ratio increased to 12.2%, a level in line with its peers, from a four-year average of 10.7%. Even though capitalization has improved and the bank's profitability ratios will recover, new capital injections will be necessary to sustain Master's medium-term growth strategy. Satisfactory Liquidity and Funding Structure: Fitch considers Master's funding structure as satisfactory for its business model. Funding has gradually improved in recent years, reflecting the bank's strategy of expanding its funding channels, with the increase in the number of partners that distribute their funding products. As of June 2023, the bank's gross loans/customer deposits ratio was 50.1% in June 2023 compared to a four-year average of 58.0%. The bank's liquid assets were adequate in recent years. RATING SENSITIVITIES Factors that Could, Individually or Collectively, Lead to Negative Rating Action/Downgrade - A substantial deterioration of the bank's asset quality, with the reduction of its profitability, operating profit/RWA ratio below 1.5%; - A sustained reduction in the bank's capitalization, CET1 ratio below 10.0%. Factors that Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade - Over time, Master ratings could benefit from the stability of its business model, with scale gains and maintenance of current asset quality ratios coupled with an increase in its profitability levels (operating profit/RWA ratio sustained above 2.5%); - Substantial reduction of investor attributions in its funding base, diversification of products and channels and increase of its liquidity; - CET1 ratio close to 12% on a sustained basis. The Government Support Rating (GSR) of 'No Support' (ns) reflects Master's small franchise within the Brazilian financial system (less than 1% of customer deposits at YE 2022). In Fitch's view, there is no reasonable assumption of support being forthcoming. Factors that could, individually or collectively, lead to positive rating action/upgrade Master's GSR of 'ns' is sensitive to changes in Fitch's assessment about the ability and/or propensity of the sovereign to provide timely support to the bank and would only be likely to occur with a significant increase in the bank's systemic importance. VR ADJUSTMENTS The Asset Quality score has been assigned below the implied score due to the following adjustment reason: Underwriting Standards and Growth (negative). The Earnings & Profitability score has been assigned below the implied score due to the following adjustment reason: Earnings Stability (negative). The Capitalisation & Leverage score has been assigned below the implied score due to the following adjustment reason: Risk Profile and Business Model (negative). ESG CONSIDERATIONS Master has an ESG score of '4' for Group Structure due to the opacity of the bank's high exposure to funds, which adds to group complexity and limits transparency. This has a negative impact on the credit profile and is relevant to the ratings in conjunction with other factors. The highest level of ESG credit relevance is a score of '3', unless otherwise disclosed in this section. A score of '3' means ESG issues are credit-neutral or have only a minimal credit impact on the entity, either due to their nature or the way in which they are being managed by the entity. Fitch's ESG Relevance Scores are not inputs in the rating process; they are an observation on the relevance and materiality of ESG factors in the rating decision. Entity/Debt Rating Prior ----------- ------ ----- Banco Master S.A. LT IDR B+ Upgrade B ST IDR B Affirmed B LC LT IDR B+ Upgrade B LC ST IDR B Affirmed B Natl LT BBB(bra) Upgrade BBB-(bra) Natl ST F2(bra) Upgrade F3(bra) Viability b+ Upgrade b Gov't Support ns Affirmed ns BANCO PAN: Fitch Affirms 'BB' LongTerm IDRs, Outlook Stable ----------------------------------------------------------- Fitch Ratings has affirmed Banco PAN S.A.'s (PAN) Long-Term (LT) Local and Foreign Currency Issuer Default Ratings (IDRs) at 'BB' and Long-Term National Rating (NLTR) at 'AAA(bra)' with Stable Outlooks and Viability Rating (VR) at 'bb-'. At the same time, Fitch has also affirmed PAN's Shareholder Support Rating (SSR) at 'bb'. KEY RATING DRIVERS Ratings Driven by Support: PAN's IDRs and National Ratings are driven by potential shareholder support from its parent, Banco BTG Pactual S.A. (BTG; BB/Stable), which is reflected in the bank's SSR of 'bb'. Fitch believes the bank's parent has strong incentives to support PAN as Fitch considers it a strategic division of the group's consumer finance activities in Brazil. Fitch's assessment of shareholder support also considers that the parent and PAN operate in the same jurisdiction and share the same regulatory perimeter in Brazil. Well-Established Niche Franchise: PAN's VR reflects the bank's well-established consumer financing business in Brazil, despite its small size in national terms, and comfortable capitalization buffers considering the bank's credit risk profile. It also reflects PAN's solid risk management expertise and adequate funding and liquidity profiles. Consumer Finance Business Oriented: PAN's business model is biased towards consumer banking, but it has become more diversified in recent years following the good execution of its business plan, which included the ramp-up of its digital banking platform and product diversification. Those fronts have been additive for overall business volumes, as reflected by the a much larger share of commissioned business (11% of revenues) and improved client relationships. Moderate Risk Profile: PAN's risk profile is commensurate with its business model, which is dominated by vehicle financing (49%) and secured payroll lending receivables (42%) and complemented by its unsecured businesses (9%). Fitch believes PAN is in an adequate position to absorb asset-quality pressures from the still high interest rate environment due to its well-developed underwriting framework, its seasoned unsecured book, and high loan collateralization. Well-Managed Pressure in Profitability: PAN's well-established consumer banking franchise and adequate risk-pricing result in fairly resilient profitability, despite the high interest rate environment and intense competition in its key markets. Between 2022 and 1H23, the operating profit/risk-weighted assets (RWA) ratio remained resilient at 2.7%, although lower than levels of 3.8% in prior years given weaker portfolio growth and revenue pressures. Over the medium term, Fitch expects PAN's operating profit to revert to a level above 3% of RWAs, supported by continued business growth and cost efficiency measures. Asset-Quality Risks: The bank's impaired loans ratio of 10.5% at June 2023 is higher than its peer average, but acceptable given its business model, where yields are usually high for the risks taken. While Fitch expects the inflow of impaired exposures of unsecured businesses to continue in 2H23 and 2024, Fitch expects asset-quality metrics to remain broadly stable over the medium term. This will be supported by the bank's more conservative underwriting standards and loan growth. Comfortable Capitalization, Liquidity: Wholesale funding still comprises a moderate share of PAN's funding base, but is more diversified than its rating peers and supported by PAN's established access to wholesale funding domestically. Its assessment of PAN's funding profile incorporates ordinary support from its parent, and this led to the upgrade of PAN's funding and liquidity midpoint to 'bb-' from 'b+'. PAN's liquidity profile is adequate, with the stock of cash and liquid accounting for 30% of one-year funding maturities. By June 2023, PAN's CET1 ratio was 15%, and Fitch expects the bank to maintain comfortable levels of capitalization, funding and liquidity going forward. RATING SENSITIVITIES Factors that Could, Individually or Collectively, Lead to Negative Rating Action/Downgrade PAN's IDRs would be downgraded if BTG's IDRs were downgraded. PAN's IDRs are also sensitive to a downgrade of Brazil's sovereign rating. PAN's VR has ample headroom at current levels. The most likely trigger for a downgrade of PAN's VR would be the bank's inability to maintain its adequate earnings generation capacity, resulting in an operating profit structurally below 2% of RWA and CET1/RWA ratio below 10%. This could stem, for instance, from a scenario of prolonged lower business activity, and higher than expected credit risks. PAN's SSR would be downgraded if BTG's IDRs were downgraded, or if PAN becomes less strategic for the group or significantly less integrated, which Fitch does not expect. Factors that Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade An upgrade of PAN's VR is currently unlikely. An upgrade of the IDRs would require an upgrade of BTG's IDRs, which in turn is contingent upon an upgrade of Brazil's sovereign rating. VR ADJUSTMENTS The Funding & Liquidity score of 'bb-' has been assigned above the implied 'b' score due to the following adjustment reason: Liquidity Access and Ordinary Support (positive). PUBLIC RATINGS WITH CREDIT LINKAGE TO OTHER RATINGS PAN's ratings are driven by BTG's ratings. ESG CONSIDERATIONS The highest level of ESG credit relevance is a score of '3', unless otherwise disclosed in this section. A score of '3' means ESG issues are credit-neutral or have only a minimal credit impact on the entity, either due to their nature or the way in which they are being managed by the entity. Fitch's ESG Relevance Scores are not inputs in the rating process; they are an observation on the relevance and materiality of ESG factors in the rating decision. Entity/Debt Rating Prior ----------- ------ ----- Banco PAN S.A. LT IDR BB Affirmed BB ST IDR B Affirmed B LC LT IDR BB Affirmed BB LC ST IDR B Affirmed B Natl LT AAA(bra)Affirmed AAA(bra) Natl ST F1+(bra)Affirmed F1+(bra) Viability bb- Affirmed bb- Shareholder Support bb Affirmed bb BINANCE: CEO, Other Exchange Leaders at Risk of Brazil Indictment ----------------------------------------------------------------- globalinsolvency.com, citing Bloomberg News, reports that in the latest blow to Binance's global ambitions, a Brazilian congressional committee has recommended the indictment of four of the company's senior leaders, including its founder and CEO Changpeng Zhao. The committee, which had been conducting a probe into crypto-related ponzi schemes in Brazil, can only make suggestions, according to globalinsolvency.com. Brazilian police will decide whether to proceed with actual indictments, the report notes. The committee accused Zhao and three local Binance employees of fraudulent management, of offering or trading in securities without prior authorization, and of operating a financial institution without authorization, the report relays. Binance is "surrounded by suspicion" in Brazil, lawmaker Ricardo Silva wrote in the report accompanying the committee's recommendations, the report says. In a statement sent to Bloomberg by email, Binance said it went to "great lengths" to actively collaborate with the committee, the report discloses. However, the exchange "strongly rejects any attempts to make Binance a target or even expose its users and employees with allegations of bad practices without any proof, amid competitive disputes given the company's leadership position in Brazil and in the world," the report relays. The committee - which is comprised of 28 lower house representatives - further recommended that the Federal Public Prosecutor's Office scrutinize the tax compliance of the crypto exchange's local unit and a separate arm, Binance Capital Management, the report adds. BRAZIL: Auto Exports to Plunge as Argentina Crisis Hits Hard ------------------------------------------------------------ globalinsolvency.com, citing Reuters, reports that Brazilian auto exports are set to plunge by double digits in 2023 when compared with the previous year, automaker association Anfavea said, as a severe economic crisis in neighboring Argentina hits shipments to that country. The association said in a statement it now projects exports to fall 12.7% in 2023 to 420,000 vehicles, a major cut from its previous estimate of a 2.9% drop in the period, according to globalinsolvency.com. "Exports have been the major warning point for the automotive sector in the first nine months of the year," it said, the report notes. According to Anfavea, the crisis in Argentina caused the country - which has in Brazil its largest trade partner - to lose its position as the No.1 destination of Brazilian auto exports to Mexico this year, the report relays. Argentina, which will hold a presidential election in Oct. 22, has been grappling for years with a crisis that saw annual inflation hit more than 120% in 2023, the report says. Its net central bank reserves are negative and the government was forced to devalue the peso by 20% in August, 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 Inc., on August 15, 2023, upgraded Brazil's Long-Term Foreign and Local Currency - Issuer Ratings to BB from BB (low). At the same time, DBRS Morningstar confirmed Brazil's Short-term Foreign and Local Currency - Issuer Ratings at R-4. The trend on all ratings is Stable (March 2018). BRAZIL: Farming Grapples with High Interest Rates ------------------------------------------------- Richard Mann at Rio Times Online reports that in a recent meeting in Sao Paulo, the diversification of credit sources for Brazil's agriculture sector was discussed to address the financial needs of farms of all sizes. Brazil maintains a cultivation area the size of Argentina and feeds more than a billion people worldwide, according to Rio Times Online. Producers identify four main challenges: outdated Harvest Plan, budget constraints, high interest rates, and bank fees, the report notes. Due to these hurdles, over 30% of Mato Grosso's soybean crop is self-financed, according to Azael, 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 Inc., on August 15, 2023, upgraded Brazil's Long-Term Foreign and Local Currency - Issuer Ratings to BB from BB (low). At the same time, DBRS Morningstar confirmed Brazil's Short-term Foreign and Local Currency - Issuer Ratings at R-4. The trend on all ratings is Stable (March 2018). PETROLEO BRASILEIRO: Targets Offshore Wind Energy Leadership ------------------------------------------------------------ Richard Mann at Rio Times Online reports that Brazil's Petrobras aims to lead in offshore wind energy, says company president Jean Paul Prates. He spoke at a Rio de Janeiro conference. The company wants to switch from oil exploration to wind energy, according to Rio Times Online. Prates points out that skills in deep-sea oil can easily apply to wind energy, the report notes. Existing oil platforms can also be used for wind projects, the report relays. Petrobras already leads Brazil in offshore wind initiatives, the report adds. About Petrobras Petroleo Brasileiro S.A. or Petrobras (in English, Brazilian Petroleum Corporation - Petrobras) is a semi-public Brazilian multinational corporation in the petroleum industry headquartered in Rio de Janeiro, Brazil. Petrobras control significant oil and energy assets in 16 countries in Africa, the Americas, Europe and Asia. But, Brazil represents majority of its production. The Brazilian government directly owns 54% of Petrobras' common shares with voting rights, while the Brazilian Development Bank and Brazil's Sovereign Wealth Fund (Fundo Soberano) each control 5%, bringing the State's direct and indirect ownership to 64%. A corruption scandal was uncovered in 2014 that involved Petrobras. The scandal related to money laundering that involved Petrobras executives. The executives were alleged to get received kickbacks from overpriced contracts, to the tune of about $3 billion in total. Over a thousand warrants were issued against politicians and businessmen in relation to the scandal. In 2016, Marcelo Odebrecht, CEO of Odebrecht, was sentenced to 19 years in prison after being convicted of paying more than $30 million in bribes to Petrobras executives. In January 2018, Petrobras agreed to pay $2.95 billion to settle a U.S. class action corruption lawsuit. In September 2018, Petrobras agreed to pay $853.2 million to settle with Brazilian and U.S. authorities. In July 2022, Fitch Ratings affirmed Petrobras' BB- Long-Term Issuer Default Rating. In addition, Fitch has revised the Rating Outlook to Stable from Negative following a similar revision to Brazil's Sovereign Rating Outlook. Also in July 2022, Egan-Jones Ratings Company upgraded the foreign currency and local currency senior unsecured ratings on debt issued by Petrobras to BB+ from BB. ========= H A I T I ========= HAITI: Closes its Border Gates and Slows the Reopening of Commerce ------------------------------------------------------------------ Dominican Today reports that Haiti has temporarily closed its border crossings, halting the partial reopening of commercial exchanges ordered by the Dominican government nearly a month after the crisis between the two nations over the Masacre River's waters. This closure coincides with the Dominican Republic's intention to present the canal controversy caused by Haiti's illegal construction project on the Masacre River to the Organization of American States (OAS), according to Dominican Today. An extraordinary session has been requested by the Dominican Republic at the OAS to address this matter, the report notes. In an attempt to alleviate the situation, Dominican authorities briefly opened the border with Dajabon, allowing access to the Provisional Commercial Corridors (CCP) to Haitians seeking to purchase essential goods, the report relays. However, trade activity remained minimal, with reports suggesting that some Haitian businesses are attempting to prevent the reactivation of exchanges with Dominicans, the report notes. The border situation has caused confusion and frustration among Haitian residents living in the Dominican Republic who are unable to access basic necessities, the report says. The ongoing border closure by Haitian authorities is in protest of the construction of a canal designed to divert water from the Masacre River as it flows through Haitian territory, the report discloses. Meanwhile, the Dominican government continues its biometric registration of merchants, who are required to participate in the exchange in the Provisional Commercial Corridors, the report says. The registration process is mandatory for those involved in cross-border trade, the report notes. The Dominican Foreign Minister, Roberto Alvarez, is set to present the canal dispute case to the OAS, aiming to inform member countries about the situation along the border and foster objective opinions on the matter, the report says. In response to the Kenyan High Court of Justice's temporary halt on deploying security forces to another country, the Haitian Armed Forces and the Ministry of Defense have initiated a recruitment drive, the report notes. The recruitment period extends from October 9 to 29, 2023, with specific requirements for applicants, including proficiency in the Spanish language, the report adds. ============= J A M A I C A ============= JAMAICA: Bartlett Again Calls For Global Tourism Resilience Fund ---------------------------------------------------------------- RJR News reports that Tourism Minister Edmund Bartlett has renewed his call for the establishment of a global resilience fund to aid in boosting tourism. Mr. Bartlett said the initiative would encourage tourists to take personal responsibility for bolstering the ability to respond, mitigate, adapt, and recover from the impacts of climate-related shocks, according to RJR News. He was addressing the joint 5th Urban Economy Forum and 59th ISOCARP World Planning Congress which ended, the report notes. Mr. Bartlett said it is important for Small Island Developing States, including Jamaica, to receive international support in their efforts to build resilience and pursue sustainable development in the face of these extraordinary challenges, the report relays. About Jamaica Jamaica is an island country situated in the Caribbean Sea. Jamaica is an upper-middle income country with an economy heavily dependent on tourism. Other major sectors of the Jamaican economy include agriculture, mining, manufacturing, petroleum refining, financial and insurance services. S&P Global Ratings raised on September 13, 2023, its long-term foreign and local currency sovereign credit ratings on Jamaica to 'BB-' from 'B+', and affirmed its short-term foreign and local currency sovereign credit ratings at 'B'. The stable outlook reflects S&P's expectation that the government will remain committed to prudent fiscal policies and reducing debt, as well as supportive economic policies including a flexible exchange rate regime and effective monetary policy. This is the best credit rating that Jamaica has received from S&P since it started rating the country's sovereign debt in 1999, according to The Gleaner. In March 2022, Fitch Ratings affirmed Jamaica's Long-Term Foreign Currency Issuer Default Rating (IDR) at 'B+'. The Rating Outlook is Stable. Moody's credit rating for Jamaica was last set at B2 with stable outlook (December 2019). ********* 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 * * *