/raid1/www/Hosts/bankrupt/TCRLA

/raid1/www/Hosts/bankrupt/TCRLA_Public/231030.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, October 30, 2023, Vol. 24, No. 217 Headlines B A H A M A S FTX GROUP: Founder Says Lawyers Were Involved in Key Decisions FTX TRADING: Bankman-Fried to Testify in Fraud Trial FTX TRADING: Founder May Regret Past Tweets as He Takes the Stand B R A Z I L BRAZIL: Launches First Private Export Zone to Boost Trade and Jobs BRAZIL: Turns Northeast for Next Decade's Growth INPASA AGROINDUSTRIAL: Fitch Affirms 'BB-' IDRs, Outlook Stable INVEPAR: S&P Downgrades ICR to 'D' on Distressed Debt Exchange C O L O M B I A UNE EPM: Fitch Hikes LongTerm IDRs to 'B+', Outlook Stable D O M I N I C A N R E P U B L I C [*] DOMINICAN REPUBLIC: To Receive US$6M for Carbon Credits in 2024 T R I N I D A D A N D T O B A G O TRINIDAD & TOBAGO: Country's Middle Class is Shrinking X X X X X X X X [*] BOND PRICING COLUMN: For the Week Oct. 23 to Oct. 27, 2023 - - - - - ============= B A H A M A S ============= FTX GROUP: Founder Says Lawyers Were Involved in Key Decisions -------------------------------------------------------------- Luc Cohen and Jody Godoy at Reuters report that FTX founder Sam Bankman-Fried testified at his fraud trial outside the jury's presence that lawyers at his now-bankrupt cryptocurrency exchange were involved in key decisions at the heart of the case, as he sought to distance himself from responsibility for any wrongdoing. Bankman-Fried, taking the witness stand hours after the prosecution rested its case presented over 12 trial days, gave testimony that fit with the defense argument that he acted in good faith while running FTX, which collapsed in November 2022 following a wave of customer withdrawals, according to Reuters. On cross-examination by prosecutors, Bankman-Fried often struggled to point to specific conversations in which lawyers approved his actions and hedged his responses with phrases such as, "I am not trying to give a definitive legal ruling on what this does or does not say," the report notes. Accused of stealing billions of dollars from unwitting customers, Bankman-Fried has pleaded not guilty to two counts of fraud and five counts of conspiracy, the report relays. If convicted, he could face decades in prison, the report discloses. Prosecutors have said Bankman-Fried used the misappropriated funds to prop up his crypto-focused hedge fund, Alameda Research, make speculative venture investments and donate more than $100 million to U.S. political campaigns, the report says. The 31-year-old former billionaire, clad in a gray suit, was called to the stand in Manhattan federal court after his lawyers kicked off the defense case with testimony from two other witnesses, the report notes. U.S. District Judge Lewis Kaplan decided that Bankman-Fried would initially provide testimony without jurors present so he could determine which portions of it, if any, would be admissible as evidence. Prosecutors have said Bankman-Fried should not be allowed to suggest that the involvement of lawyers in decision-making showed that he lacked criminal intent, the report says. Speaking in a confident tone, Bankman-Fried often gave lengthy responses to questions from defense lawyer Mark Cohen, the report discloses. Bankman-Fried said FTX's lawyers were involved in crafting its document-retention policies, setting up a system under which FTX customers deposited their funds into an Alameda bank account, and crafting loans that he and other executives took from Alameda, the report relays. Reuters notes that prosecutors have said Bankman-Fried encouraged employees to use encrypted messaging platforms such as Slack and Signal and auto-delete their communications to hide their tracks. They also have said he stole funds by having FTX customers deposit money into accounts controlled by Alameda, which then lent money to FTX executives, the report says. Swaying Side To Side Under cross-examination by prosecutor Danielle Sassoon, Bankman-Fried swayed slightly side to side and motioned with his hands when speaking, the report says. He frequently began responses by saying "yep," the report discloses. Much of Sassoon's questioning focused on what FTX lawyers told Bankman-Fried about the company's practice of having FTX customers deposit funds intended for the exchange into accounts belonging to Alameda, which Bankman-Fried testified happened for a time because FTX did not yet have its own bank account, the report notes. When Sassoon asked if he ever spoke with lawyers about the "permissibility" of Alameda spending the deposits, Bankman-Fried paused for several seconds and said, "I don't recall any conversations that were contemporaneous and phrased that way," the report relays. The judge sent the jurors home for the day after Bankman-Fried's lawyers said they planned to elicit testimony from the defendant about the involvement of FTX lawyers in key company decisions, the report discloses. Legal experts have said Bankman-Fried has little to lose by bucking conventional wisdom and testifying to the jury, given weeks of the testimony against him by insiders painting an unflattering portrait of his character, the report notes. Cohen said Bankman-Fried's direct testimony to the jury could last close to five hours, before prosecutors get a chance to cross-examine him, the report relays. Former close FTX colleagues who testified for the prosecution told the jury that Bankman-Fried directed them to commit crimes by diverting customer funds to Alameda and lying to investors and lenders, the report says. Bankman-Fried's risky decision to testify gives prosecutors the chance to cross-examine him on those claims, the report discloses. His lawyers have said three of his former colleagues, who have pleaded guilty and agreed to cooperate with prosecutors, tailored their testimony to implicate Bankman-Fried in the hopes of receiving lenient sentences, the report relays. Bankman-Fried has maintained that while he made mistakes running FTX, he never intended to steal funds, the report discloses. The prosecution rested after calling one final witness - FBI agent Marc Troiano, who told jurors about Bankman-Fried's use of Signal, the report relays. The defense's first two witnesses were: Krystal Rolle, Bankman-Fried's lawyer in the Bahamas; and database expert Joseph Pimbley, the report adds. About FTX Group FTX is the world's second-largest cryptocurrency firm. FTX is a cryptocurrency exchange built by traders, for traders. FTX offers innovative products including industry-first derivatives, options, volatility products and leveraged tokens. Then CEO and co-founder Sam Bankman-Fried said Nov. 10, 2022, that FTX paused customer withdrawals after it was hit with roughly $5 billion worth of withdrawal requests. Faced with liquidity issues, FTX on Nov. 9 struck a deal to sell itself to its giant rival Binance, but Binance walked away from the deal amid reports on FTX regarding mishandled customer funds and alleged US agency investigations. At 4:30 a.m. on Nov. 11, 2022, Bankman-Fried ultimately agreed to step aside, and restructuring vet John J. Ray III was quickly named new CEO. FTX Trading Ltd (d/b/a FTX.com), West Realm Shires Services Inc. (d/b/a FTX US), Alameda Research Ltd. and certain affiliated companies then commenced Chapter 11 proceedings (Bankr. D. Del. Lead Case No. 22-11068) on an emergency basis on Nov. 11, 2022. Additional entities sought Chapter 11 protection on Nov. 14, 2022. FTX Trading and its affiliates each listed $10 billion to $50 million in assets and liabilities, making FTX the biggest bankruptcy filer in the US this year. According to Reuters, SBF shared a document with investors on Nov. 10, 2022, showing FTX had $13.86 billion in liabilities and $14.6 billion in assets. However, only $900 million of those assets were liquid, leading to the cash crunch that ended with the company filing for bankruptcy. The Hon. John T. Dorsey is the case judge. The Debtors tapped Sullivan & Cromwell, LLP as bankruptcy counsel; Landis Rath & Cobb, LLP as local counsel; and Alvarez & Marsal North America, LLC as financial advisor. Kroll is the claims agent, maintaining the page https://cases.ra.kroll.com/FTX/Home-Index The Official Committee of Unsecured Creditors tapped Paul Hastings as counsel, FTI Consulting, Inc., as financial advisor, and Jefferies LLC as the investment banker. Young Conaway Stargatt & Taylor LLP is the Committee's Delaware and conflicts counsel. Montgomery McCracken Walker & Rhoads LLP, led by partners Gregory T. Donilon, Edward L. Schnitzer, and David M. Banker, is representing Sam Bankman-Fried in the Chapter 11 cases. White-collar crime specialist Mark S. Cohen has reportedly been hired to represent SBF in litigation. Lawyers at Paul Weiss previously represented SBF but later renounced representing the entrepreneur due to a conflict of interest. FTX TRADING: Bankman-Fried to Testify in Fraud Trial ---------------------------------------------------- Luc Cohen and Jonathan Stempel at Reuters report that Sam Bankman-Fried plans to testify in his own defense at his criminal fraud trial, after his closest associates blamed the former billionaire for the collapse in November 2022 of his now-bankrupt FTX cryptocurrency exchange. In a telephone conference with U.S. District Judge Lewis Kaplan, who oversees the case in Manhattan federal court, Bankman-Fried's lawyer Mark Cohen said the defense planned to call three other witnesses to testify briefly after prosecutors finish presenting their case, according to Reuters . "And our client is also going to be testifying," Cohen said, the report notes. Taking the stand could allow Bankman-Fried, who has pleaded not guilty to fraud and conspiracy charges, to tell jurors face-to-face that while he made mistakes running FTX, he never intended to steal customers' money, the report relays. Testifying carries significant risks, and will likely subject Bankman-Fried, 31, to a tough cross-examination by prosecutors armed with documents, messages and testimony from cooperating witnesses they can use to attack his credibility, the report notes. Still, Bankman-Fried's penchant for risk and willingness to publicly discuss the case following his arrest may reflect his confidence he can convince at least one of the 12 jurors that he did not intend to commit fraud, legal experts said, the report discloses. Three former members of Bankman-Fried's inner circle, who pleaded guilty and agreed to cooperate with prosecutors, testified that he directed them to commit crimes, and was aware his hedge fund Alameda Research had taken billions of dollars from FTX customers without their consent, the report says. Prosecutors have said Bankman-Fried used that money to prop up Alameda, make speculative investments, and donate more than $100 million to U.S. political candidates and campaigns, the report notes. In the three weeks since the trial began, they have tried to prove that Bankman-Fried intended to defraud his customers, Alameda lenders and FTX equity investors, the report relays, the report discloses. Defense lawyers have said some activities that prosecutors said amounted to theft of customer funds, such as granting Alameda special privileges to trade on FTX, were reasonable business decisions for Bankman-Fried to make at the time, the report says. The report relays that they have also sought to blame FTX's collapse on Bankman-Fried's inner circle saying they tailored their testimony in the hope of receiving lenient sentences. Those testifying against Bankman-Fried have included his former girlfriend and Alameda chief executive Caroline Ellison, former FTX director of engineering Nishad Singh, and former FTX technology chief Gary Wang, the report discloses. On the witness stand, Bankman-Fried may have to address testimony that he had spoken with former colleagues about Alameda's huge debts to FTX customers, the report says. He may also have to explain text messages previously shown to jurors, indicating he knew about the funds shortfall when he posted on Twitter that FTX was "fine" just days before the exchange's demise, even as withdrawals were mounting, the report notes. Cohen said the other defense witnesses could include a database expert, a records custodian, and Krystal Rolle, a lawyer in the Bahamas, where FTX had been based, the report says. Prosecutors expect to rest their case, the report notes. Cohen said the defense could wrap up its case, depending on how long cross-examination by prosecutors lasts, the report relays. Closing arguments could begin, the report adds. About FTX Group FTX is the world's second-largest cryptocurrency firm. FTX is a cryptocurrency exchange built by traders, for traders. FTX offers innovative products including industry-first derivatives, options, volatility products and leveraged tokens. Then CEO and co-founder Sam Bankman-Fried said Nov. 10, 2022, that FTX paused customer withdrawals after it was hit with roughly $5 billion worth of withdrawal requests. Faced with liquidity issues, FTX on Nov. 9 struck a deal to sell itself to its giant rival Binance, but Binance walked away from the deal amid reports on FTX regarding mishandled customer funds and alleged US agency investigations. At 4:30 a.m. on Nov. 11, 2022, Bankman-Fried ultimately agreed to step aside, and restructuring vet John J. Ray III was quickly named new CEO. FTX Trading Ltd (d/b/a FTX.com), West Realm Shires Services Inc. (d/b/a FTX US), Alameda Research Ltd. and certain affiliated companies then commenced Chapter 11 proceedings (Bankr. D. Del. Lead Case No. 22-11068) on an emergency basis on Nov. 11, 2022. Additional entities sought Chapter 11 protection on Nov. 14, 2022. FTX Trading and its affiliates each listed $10 billion to $50 million in assets and liabilities, making FTX the biggest bankruptcy filer in the US this year. According to Reuters, SBF shared a document with investors on Nov. 10, 2022, showing FTX had $13.86 billion in liabilities and $14.6 billion in assets. However, only $900 million of those assets were liquid, leading to the cash crunch that ended with the company filing for bankruptcy. The Hon. John T. Dorsey is the case judge. The Debtors tapped Sullivan & Cromwell, LLP as bankruptcy counsel; Landis Rath & Cobb, LLP as local counsel; and Alvarez & Marsal North America, LLC as financial advisor. Kroll is the claims agent, maintaining the page https://cases.ra.kroll.com/FTX/Home-Index The Official Committee of Unsecured Creditors tapped Paul Hastings as counsel, FTI Consulting, Inc., as financial advisor, and Jefferies LLC as the investment banker. Young Conaway Stargatt & Taylor LLP is the Committee's Delaware and conflicts counsel. Montgomery McCracken Walker & Rhoads LLP, led by partners Gregory T. Donilon, Edward L. Schnitzer, and David M. Banker, is representing Sam Bankman-Fried in the Chapter 11 cases. White-collar crime specialist Mark S. Cohen has reportedly been hired to represent SBF in litigation. Lawyers at Paul Weiss previously represented SBF but later renounced representing the entrepreneur due to a conflict of interest. FTX TRADING: Founder May Regret Past Tweets as He Takes the Stand ----------------------------------------------------------------- Jody Godoy at Reuters reports that as FTX founder Sam Bankman-Fried prepares to takes the stand at his trial on charges of taking billions in customer funds, he is likely to be asked about online posts assuring users the cryptocurrency exchange was safe. Reuters notes that here are some of the posts that appeared on the messaging platform X, formerly known as Twitter, that Bankman-Fried will likely be asked about: "FTX is fine. Assets are fine" Jurors at the trial saw screenshots of a deleted thread that Bankman-Fried posted on Nov. 7 assuring the world the exchange was "fine," amid a flood of redemption requests, according to Reuters. The crypto mogul also wrote that "FTX has enough to cover all client holdings," the report relays. Gary Wang, FTX's former chief technology officer, testified that FTX did not actually have the assets to cover withdrawals, the reprot notes. Wang said Bankman-Fried also posted a misleading tweet on FTX's official account blaming delays in redeeming stablecoins, which are digital assets meant to track currencies, on banks being closed, the report relays. FTX had actually run out of stablecoins, Wang said, the report discloses. "Backstopping customer assets should always be primary. Everything else is secondary," he added. Prosecutors allege Bankman-Fried misled FTX customers about the safety of their assets before the exchange filed for bankruptcy in November 2022, the report recalls. Caroline Ellison, Alameda's former chief executive, testified at trial that Bankman-Fried's post about "backstopping" customer assets on June 27, 2022, was misleading, the report notes. Alameda had borrowed several billion dollars of FTX customer assets to repay its lenders the month before, she said, the report says. Wang also testified that the customer "backstop fund" FTX listed publicly was a "fake number," the report discloses. "We don't invest client assets, even in treasuries." In another of Bankman-Fried's deleted posts from Nov. 7, he said FTX did not invest customer funds, the report relays. "We have a long history of safeguarding client assets and that remains true today," he said in the thread, the report notes. Ellison testified at trial that by the summer of 2022, Alameda was drawing from FTX customer funds to make venture investments, the report says. She recounted living in "dread" of FTX customers withdrawing too much from the exchange, as she knew Alameda had depleted the funds, the report adds. About FTX Group FTX is the world's second-largest cryptocurrency firm. FTX is a cryptocurrency exchange built by traders, for traders. FTX offers innovative products including industry-first derivatives, options, volatility products and leveraged tokens. Then CEO and co-founder Sam Bankman-Fried said Nov. 10, 2022, that FTX paused customer withdrawals after it was hit with roughly $5 billion worth of withdrawal requests. Faced with liquidity issues, FTX on Nov. 9 struck a deal to sell itself to its giant rival Binance, but Binance walked away from the deal amid reports on FTX regarding mishandled customer funds and alleged US agency investigations. At 4:30 a.m. on Nov. 11, 2022, Bankman-Fried ultimately agreed to step aside, and restructuring vet John J. Ray III was quickly named new CEO. FTX Trading Ltd (d/b/a FTX.com), West Realm Shires Services Inc. (d/b/a FTX US), Alameda Research Ltd. and certain affiliated companies then commenced Chapter 11 proceedings (Bankr. D. Del. Lead Case No. 22-11068) on an emergency basis on Nov. 11, 2022. Additional entities sought Chapter 11 protection on Nov. 14, 2022. FTX Trading and its affiliates each listed $10 billion to $50 million in assets and liabilities, making FTX the biggest bankruptcy filer in the US this year. According to Reuters, SBF shared a document with investors on Nov. 10, 2022, showing FTX had $13.86 billion in liabilities and $14.6 billion in assets. However, only $900 million of those assets were liquid, leading to the cash crunch that ended with the company filing for bankruptcy. The Hon. John T. Dorsey is the case judge. The Debtors tapped Sullivan & Cromwell, LLP as bankruptcy counsel; Landis Rath & Cobb, LLP as local counsel; and Alvarez & Marsal North America, LLC as financial advisor. Kroll is the claims agent, maintaining the page https://cases.ra.kroll.com/FTX/Home-Index The Official Committee of Unsecured Creditors tapped Paul Hastings as counsel, FTI Consulting, Inc., as financial advisor, and Jefferies LLC as the investment banker. Young Conaway Stargatt & Taylor LLP is the Committee's Delaware and conflicts counsel. Montgomery McCracken Walker & Rhoads LLP, led by partners Gregory T. Donilon, Edward L. Schnitzer, and David M. Banker, is representing Sam Bankman-Fried in the Chapter 11 cases. White-collar crime specialist Mark S. Cohen has reportedly been hired to represent SBF in litigation. Lawyers at Paul Weiss previously represented SBF but later renounced representing the entrepreneur due to a conflict of interest. =========== B R A Z I L =========== BRAZIL: Launches First Private Export Zone to Boost Trade and Jobs ------------------------------------------------------------------ Richard Mann at Rio Times Online reports that Brazil's leader signed a directive establishing the country's first privately-managed Export Processing Zone (EPZ). Located in Aracruz, Espirito Santo, this industrial hub has a specific focus. It aims to accelerate exports, according to Rio Times Online. Covering a wide area of 50,232 hectares, the Imetame Group will manage this new zone, the report notes. Before becoming operational, the zone needs customs clearance, the report relays. The Federal Revenue Department will provide this approval, the report says. Moreover, the National Council of Export Processing Zones has already approved the project, 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: Turns Northeast for Next Decade's Growth ------------------------------------------------ Lachlan Williams at Rio Times Online reports that Tendencias Consultoria predicts Brazil's economically fragile Northeast will be the nation's fastest-growing region from 2025 to 2033. This growth comes from planned investments in both the public and private sectors. Before the recession in 2014, the Northeast was already growing faster than the national average, according to Rio Times Online. Meanwhile, the North and Central-West regions are also looking up, the report notes. Investments and the agriculture industry will fuel this growth, 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). INPASA AGROINDUSTRIAL: Fitch Affirms 'BB-' IDRs, Outlook Stable --------------------------------------------------------------- Fitch Ratings has affirmed Inpasa Agroindustrial S.A.'s (Inpasa) Long-Term Local and Foreign Currency Issuer Default Ratings (IDRs) at 'BB-' and its Long-Term National Scale rating at 'A+(bra)'. The Rating Outlook is Stable. The ratings reflect Inpasa's large-scale operations and low production cash cost in the volatile Brazilian ethanol industry. The high volatility of Brazil's corn and ethanol prices and the lack of meaningful short-term price correlation between these two commodities are key rating considerations. In addition, Inpasa is exposed to Petrobras' pricing policy for fuels in Brazil, which may curb ethanol prices. The ratings incorporate the expectation of negative FCF in 2023 and in 2024 due to Inpasa's aggressive growth strategy, then turning to positive in 2025 following the startup of operations of the new plants. The ratings also reflect Inpasa's limited liquidity and increasingly concentrated debt amortization profile. The Stable Outlook reflects the expectation that net leverage should be below 2.0x, even during the period of high investments of about BRL6.5 billion from 2023 to 2025. KEY RATING DRIVERS High Price Volatility: Inpasa is exposed to price volatility from corn, its main raw material, and ethanol, its main output. Corn prices adjust rapidly to global supply and demand imbalances and follow parity with Chicago Board of Trade (CBOT) corn prices over the long run. Brazilian ethanol prices depend largely on local gasoline price levels, which move in tandem with international oil prices and the Brazilian FX rate, andthe price policy set by Petrobras. Ethanol prices are also indirectly influenced by sugar prices, as nearly 85% of all Brazilian ethanol produced comes from sugar cane processors, which typically shift a portion of production between ethanol and sugar depending on prevailing price parity with sugar. Weaker Corn and Ethanol Prices Correlation: Corn prices in Brazil have declined in 2023 following a reduction in international price levels and a record high production in the Brazilian corn winter crop. Fitch projects international corn prices of USD5,55 per bushel in 2023 and USD5,00 per bushel in 2024. Hydrous ethanol prices are currently trading at nearly BRL2.18/liter (CEPEA/ESALQ as of September 2023), which is 19% lower than ethanol prices of BRL2.68/liter in October 2022. Fitch projects average Brent prices of USD80/bbl in 2023 and of USD75/bbl in 2024. Large Scale Corn-Based Ethanol Producer: Inpasa is Brazil's largest corn-based ethanol producer, and its business model benefits from its sizable ethanol production capacity. The company has an aggressive growth strategy, to increase its crushing capacity to 11.6 million tons and annual ethanol production capacity to 5.3 billion liters by the end of 2026 from 6.3 million tons and 2.8 billion, respectively, at the end of 2023. Investments are estimated at about BRL6.5 billion from 2023 to 2025 and include two new plants in the states of Mato Grosso do Sul and Maranhao and the expansion of the Sinop plant's production capacity. Competitive Cost Structure: Inpasa is the most efficient corn-based ethanol producer in the country, and its cash cost structure is in line with some of the most efficient sugar cane producers. The company produces and sells animal nutrition product and corn oil, the prices of which tend to correlate with corn prices, providing a natural hedge against corn price volatility. Fitch expects 45% coverage of corn costs provided by animal nutrition products from 2023 to 2025. The average cost of the corn was around BRL71,00 per bag in 2022, and Fitch estimates it will reduce to around BRL52,00 per bag in 2023 and BRL42,00 per bag in 2024. The industrial plants are located in the states of Mato Grosso and Mato Grosso do Sul, Brazil's two important corn producing states, which attenuates corn origination risks. Strong Operating Cash Flows: Inpasa's cash flow generation should improve over the rating period, as the company increases its production capacity. Fitch expects Inpasa to generate EBITDA of BRL2.5 billion and CFFO of BRL1.8 billion in 2023, compared with EBITDA of BRL2.6 billion and CFFO of BRL198 million in 2022 as per Fitch's calculations. In 2024, base case projections incorporate EBITDA of BRL3.6 billion and CFFO of BRL2.6 billion supported by higher sales volume and corn cost reduction, despite lower ethanol prices. EBITDA margin is expected to improve to around 28% in 2024, from 23% projected for 2023. Fitch expects negative FCF of BRL700 million in 2023 and negative BRL 1 billion in 2024 due to Inpasa expansionary investments. FCF should be positive in 2025, when new sales volume kicks in. Fitch's base case projection incorporates investments of BRL2.3 billion in 2023 and BRL3.5 billion in 2024 and dividends of around BRL125 million in 2023 and 2024. Leverage to Remain Low: Inpasa should preserve net leverage below 2.0x during its new heavy investment cycle. Fitch's base case projection incorporates net debt/EBITDA of around 1.5x in 2023 and 2024, compared with 1.3x in 2022. The company's growth in Brazil was largely financed by the group with intercompany loans and short-term bank debt, but this has been gradually replaced by bank debt as operating cash flow generation improves. Inpasa reported total debt of BRL3.1 billion as of Sept. 30, 2023, of which bank debt and related party loans amounted to BRL2.8 billion and BRL284 million, respectively. DERIVATION SUMMARY Inpasa's IDRs are four notches lower than Raizen S.A. (BBB/Stable). Inpasa is smaller than Raizen and is more exposed to commodity price risk compared with sugar cane processors, which rely on a market pricing mechanism that links sugar cane costs to commodity prices. Inpasa also has weaker liquidity than Raizen. Inpasa's business model is similar to FS Ltda. (FS; BB-/Stable, National Scale AA-[bra]/Stable). Both companies are low-cost producers, with capacity to produce ethanol with cash cost comparable with Jalles Machado S.A. (AA-[bra]/Stable), a cost benchmark in the industry. Both FS and Inpasa have concluded investments in their third plants. FS's National Scale rating benefits from its stronger liquidity and more diversified access to financing compared to Inpasa, while Inpasa is still challenged to increase its access to both the banking and capital markets in Brazil. Inpasa's National Scale Rating is one notch below that of Jalles Machado (Jalles; National Scale AA-[bra]/Stable). Both companies are well positioned in the Brazilian food and renewable energy market landscape in terms of cash costs. Jalles should consume its currently high liquidity as it advances with its investments plan, but its National Scale rating benefits from stronger liquidity and more diversified access to financing than Inpasa. KEY ASSUMPTIONS Fitch's Key Assumptions Within Its Rating Case for the Issuer: - Ethanol sales volumes of 2.8 billion liters in 2023 and 3.7 billion liters in 2024 following investments in capacity expansion. Hydrous ethanol will make up around 60% of total ethanol volumes going forward. - Sales of animal nutrition products of 1.4 million tons in 2023 and over 1.9 million tons in 2024. - Ethanol prices to vary in tandem with a combination of oil prices and the FX rate. Brent crude prices have been forecast to average USD80/bbl in 2023 and USD75/bbl in 2024. - Corn prices around BRL52/bag in 2023 and BRL42/bag in 2024. - Average FX rate at BRL5.00/USD in fiscal 2023 and at BRL5.10/USD in 2024. - Animal nutrition products providing more an average 45% coverage for total corn costs. - Total investments of BRL2.3 billion in 2023 and BRL3.5 billion in 2024. - Dividends around BRL125 million in 2023 and in 2024. RATING SENSITIVITIES Factors that could, individually or collectively, lead to positive rating action/upgrade: - Longer track record in different cycles of ethanol and corn prices; - FCF consistently positive, with the maintenance of conservative capital structure; - Improve liquidity, with more extended maturity debt profile, and positive track record in accessing the banking and capital markets. Factors that could, individually or collectively, lead to negative rating action/downgrade: - Deterioration in liquidity and/or difficulties refinancing short-term debt; - EBITDA margins below 20% on a sustainable basis; - Net leverage above 3.0x on a sustainable basis. LIQUIDITY AND DEBT STRUCTURE Limited Liquidity: Inpasa's liquidity is limited, and the company would need to improve access to long-term credit facilities to finance working capital needs and large investments on a sustainable basis. As of Sept. 30 2023, Inpasa reported cash and marketable securities of BRL649 million and total debt of BRL3.1 billion, of which BRL719 million is due in the short term and about BRL2.0 billion from October 2024 to December 2025. Corn inventories and offtake contracts with large fuel distributors reduce refinancing risks and improve financial flexibility; inventories can be easily monetized and accounts receivables can be used as collateral under new credit facilities, if required. ISSUER PROFILE Inpasa produces corn-based hydrous and anhydrous ethanol, dried distillers' grains with Solubles for animal nutrition, corn oil and energy from cogeneration. The company runs three plants with total capacity to crush 6.3 million tons of corn and produce 2.8 billion liters of ethanol annually. ESG CONSIDERATIONS Inpasa Agroindustrial S/A has an ESG Relevance Score of '4' for Governance Structure due to lack of board independence and effectiveness. Inpasa has no independent members on the board and one-man risk is present, as decision making is highly concentrated in the hands of the founder and main shareholder. This has a negative impact on the credit profile, and is relevant to the rating 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 ----------- ------ ----- Inpasa Agroindustrial S/A LT IDR BB- Affirmed BB- LC LT IDR BB- Affirmed BB- Natl LT A+(bra)Affirmed A+(bra) INVEPAR: S&P Downgrades ICR to 'D' on Distressed Debt Exchange -------------------------------------------------------------- S&P Global Ratings lowered its 'CCC-' global scale and 'brCCC-' national scale issuer credit ratings on Investimentos e Participacoes em Infraestrutura S.A. -- Invepar to 'D'. S&P also lowered the debt ratings on its third and fifth debentures to 'D' from 'brC'. In addition, S&P removed the ratings from CreditWatch with negative implications. S&P will reevaluate Invepar's capital structure once the company concludes the debt negotiation of its subsidiary, BR-040 S.A. (Via 040), because Invepar guarantees this bank loan. Invepar recently announced the restructuring of its holding level debt, the third and fifth debenture issuances (balance of R$1.05 billion as of June 30, 2023). Invepar extended the maturity of the debentures by 24 months--to Aug. 31, 2026, from Aug. 31, 2024. It also will keep the same interest rate of 6.5% until Feb. 28, 2025, when the rate will rise to 12.6% from March 2025 onward. Under the original debentures contract, the index rate that adjusts the debt's value would have increased to 12.6% in September 2023. The restructuring agreement also entails Invepar paying an extraordinary amortization of roughly R$85 million to creditors of the debentures, which we believe Invepar will fund with its own cash position (R$316 million as of June 30, 2023). Also, 70% of any cash in excess of R$100 million at Invepar's holding level will be used to amortize part of the debentures. In line with the terms, the minimum cash amount at Invepar's level will decrease to R$90 million from September 2025 to February 2026, and to R$80 million from March 2026 until the debentures mature in August 2026. S&P said, "Despite the extraordinary partial amortization that will reduce the outstanding amount of the debentures, we see the debt restructuring as a distressed exchange considering Invepar's fragile financial situation and the fact the group is not honoring the conditions agreed upon under the previous debt restructuring. In addition to the debt extension and maintenance of current interest rates for a longer period, we think that absent this debt exchange, there would be a realistic possibility of a conventional default on the debentures due in August 2024, because of Invepar's insufficient cash balance and limited cash contribution from its assets. "Pro forma the debt restructuring and debt amortization, we expect Invepar's holding level debt to be about R$850 million, and its cash position at the minimum level according to the new amended terms to be R$100 million. In our view, even with the debt extension, Invepar will continue relying on external events to honor its debt, such as a favorable conclusion of Linha Amarela S.A.'s legal dispute with the municipality of Rio de Janeiro that has been ongoing since 2020." =============== C O L O M B I A =============== UNE EPM: Fitch Hikes LongTerm IDRs to 'B+', Outlook Stable ---------------------------------------------------------- Fitch Ratings has upgraded UNE EPM Telecomunicaciones S.A.'s (Tigo UNE) Long-Term Foreign Currency and Local Currency Issuer Default Ratings (IDRs) to 'B+' from 'CCC', National Long-Term Rating to 'A-(col)' from 'CCC(col)' and COP unsecured notes to 'A-(col)'/'RR4' from 'CCC(col)'/'RR4'. Fitch has also upgraded Tigo UNE's National Short-Term Rating to 'F2(col)' from 'C(col)' and its CP rating under the "Programa de Emisión y Colocación de Bonos Ordinarios y Papeles Comerciales" to 'F2(col)' from 'C(col)'. The Rating Outlook is Evolving. The upgrades reflect Tigo UNE's improved liquidity following the agreement by its two shareholders, Millicom and Empresas Publicas de Medellin (EPM), to jointly capitalize the company with each partner contributing COP300 billion. This equity injection, along with an agreement to rollover bank debt with Bancolombia, have allowed the company to greatly reduce its refinancing risk. Fitch believes the uncertainty created by the shareholder dispute reduces visibility for Tigo UNE to avoid future liquidity pressures, limiting the rating to the 'B' category. KEY RATING DRIVERS Reduced refinancing risk: The announced agreement by Millicom and EPM to provide a timely equity injection have greatly reduced Tigo UNE's refinancing risk, with this new cash used in part to repay the maturity of the COP150 billion note due October 20, while the company was able to rollover a bank loan with Bancolombia previously maturing in October. Tigo UNE is also obligated to make the initial payment on the renewal of its spectrum holdings in the 1900Mhz band in November 2023 and Fitch believes the company will have sufficient liquidity available to make this payment. ESG - Governance: The dynamics between Tigo UNE's shareholders, Millicom and EPM, resulted in the Ministry of Telecommunications interceding with the company's shareholders to seek a solution to Tigo UNE's liquidity problems. While Millicom and EPM were able to come to an agreement on the equity injection, uncertainty of conditions to avoid future disputes could result in potential further liquidity concerns. Cash Flow Compression: Fitch expects Tigo UNE's EBITDA margins to be constrained in the mid-20% range in the medium term as strong post-paid subscriber growth is offset by competitive pressures on average revenue per user (ARPU) in both post-paid mobile and fixed home. Fitch also expects the company to post protracted negative FCF over the rating horizon as continued large network investments, including spectrum costs, will likely lead to additional debt financing. Fitch expects capital intensity to surpass 22% in 2023 and 27% in 2024, as the company faces renewals of its 40MHz in the 1900Mhz band and 30MHz in the AWS band. Deployment of 5G will add to the company's investment needs over the coming years. Given these trends, Fitch expects the company's leverage profile to gradually weaken from historical levels, with debt/EBTIDA and net debt/EBITDA near 2.1x and 1.9x, respectively, in 2023. Intense Price Competition: Fitch expects the Colombian mobile market to continue to show significant pricing pressure as incumbent operators maintain promotional activity. Industry ARPU is likely to be particularly pressured in the post-paid segment as WOM Colombia S.A.S. seeks to become a significant player. The country's mobile penetration, which is above 150% compared with 135% in 2019, is also contributing to lower ARPU. Competition is also growing in fixed broadband. Competitors Movistar and Claro have continued their aggressive promotional strategy to gain share to fill out network capacity as demand for broadband services has slowed post-pandemic. Defending Market Position: Tigo UNE demonstrates relative strength in the fixed home segment, a strong spectrum position aligned with its coverage strategy, and a mobile network buildout with strong post-paid data user growth. Fitch believes these factors will help the company weather WOM Colombia's entry into the country's mobile market and aggressive promotional activity in the home segment from competitors Movistar and Claro. Broad Service Offerings: The company's service diversification compares well with other operators in the region. Tigo UNE is well-diversified across fixed, mobile, and B2B, with respective service revenue shares of approximately 38%, 39% and 20% during 2022. Tigo UNE operates entirely within the Colombian telecommunications market, which has continued to grow more competitive following the entry of WOM Colombia. Parent Subsidiary Linkages: Fitch believes Tigo UNE has a weaker standalone credit profile compared to Millicom. Based on Fitch's Linkage Factor Assessment, legal, strategic, and operational incentives are assessed as low, and accordingly no uplift is considered in Tigo UNE's rating. The company's ratings incorporate weak linkages with both Empresas Publicas de Medellin E.S.P. (EPM; BB+/Negative Watch) and Millicom International Cellular S.A. (BB+/Stable). The ratings of both entities are limited by sovereign risks, the first as a Colombian government related entity and the second by the majority of its cash flows from speculative grade countries. Although UNE EPM is structured as a 50/50 joint venture (JV), of the two parent entities, Millicom exerts greater influence. UNE EPM Telecomunicaciones S.A. has an ESG Relevance Score of '5' for Governance Structure due to the dynamics between its Tigo UNE's shareholders, Millicom and Empresas Publicas de Medellin (EPM), that have impacted their ability to address the company's capitalization needs. UNE EPM Telecomunicaciones S.A. has an ESG Relevance Score of '4' for Management Strategy due to ongoing governance concerns, which have impaired management's ability to execute on its strategy, which 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. For more information on Fitch's ESG Relevance Scores. DERIVATION SUMMARY Tigo UNE's business profile compares to other telecom operators in Latin America; however, governance issues and weak cash flow generation constrain Tigo UNE's ratings. Tigo UNE's overall business is similar to that of direct competitor Colombia Telecomunicaciones (BBB-/Negative), with similar revenue shares of the overall Colombian market, although Tigo UNE has a longer history of maintaining lower leverage. Tigo UNE is also relatively stronger in the fixed broadband and pay-TV business, which could imply more subscription like cash flows, as the Colombian mobile market is still mostly prepaid. Tigo UNE's business profile is similar to Empresa Nacional de Telecomunicaciones S.A. (ENTEL; BBB/Stable). ENTEL's credit profile has strengthened due to increased penetration in the Peruvian market and debt reduction. ENTEL benefits from its status as the largest Chilean mobile operator with leading post-paid market share and ARPUs, while continuing to operate in two very competitive markets. Relative to Entel, Tigo UNE has a higher cash burn rate and weaker liquidity position. With greater scale and diversification, Tigo UNE's business profile is somewhat stronger than 'BB' category domestic telecom peers, such as Empresa de Telecomunicaciones de Bogota, S.A., E.S.P. (ETB; BB+/Stable), while Tigo UNE's weaker liquidity position and corporate governance concerns demonstrate a weaker credit profile. Another 'BB' category peer, Telefonica del Peru, S.A.A. (TdP; BB-/Negative), has a relatively strong market share but falling market share in fixed, while Peru's relatively even four-operator mobile market is even more competitive than Colombia's. Tigo UNE carries lower leverage than TdP as TdP's profitability has suffered in recent years and has been burdened by an unfavorable outcome from a dispute with the Peruvian tax authority. Tigo UNE is rated below Telefonica Moviles Chile S.A. (BBB-/Stable), the leading integrated telecommunications service provider in Chile. In comparison, Tigo UNE holds a secondary position in Colombia behind Claro in the fixed business and is the third largest mobile player, by market share. Both telcos operate in highly competitive markets. KEY ASSUMPTIONS - Broadband and pay-TV revenue gaming units contract slightly in 2023 due to heightened competition, and grow by low single digits in 2024 and 2025; - Home ARPU growth roughly flat due to competitive pressures in broadband and pay-TV and secular declines in fixed voice; - B2B revenue growth in the mid-single digits on growing demand for digital services; - Total mobile subscriptions grow in the low single digits as conversion of customers from prepaid to post-paid continues; - Blended mobile ARPUs growing modestly in the low to mid-single-digit range due to mix-shift effects from strong post-paid growth; overall mobile revenues grow by high single digits in 2023; - EBITDA margins mostly flat from 2022, and will remain constrained due to high levels of competition; - Capex of around COP1.2 trillion in 2023 and COP1.5 trillion in 2024, at roughly 22% and 27% of revenue respectively, elevated due mainly to spectrum renewals; capital intensity declining to around 19% over time; - Gross debt/EBITDA of around 2.1x-2.5x and net debt to EBITDA of around 1.9x-2.2x over the rating horizon - No material dividends over the rating horizon as the company focuses on investments. RATING SENSITIVITIES Factors that could, individually or collectively, lead to positive rating action/upgrade: - A sale of EPM's stake to Millicom could lead to a multiple notch upgrade; - A material improvement in liquidity position could lead to a one notch upgrade; - Asset sales that could lead to positive FCF after 5G investments could lead to a one notch upgrade. Factors that could, individually or collectively, lead to negative rating action/downgrade: - Continued shareholder disputes, or inability to access financing due to governance issues could lead to a multiple notch downgrade; - Deterioration in business position due to competitive pressures. LIQUIDITY AND DEBT STRUCTURE Improving Liquidity: Tigo UNE's liquidity has improved following the announcement that the company's shareholders, Millicom and EPM, would be each making equity contributions to support Tigo UNE's liquidity needs, including the repayment on the local bonds which matured on October 20 as well as the upcoming initial payment on the renewal of the company's 1900 MHz spectrum renewal. Fitch expects the company to generate continued negative FCF over the near-to-medium term, as competitive pressures and investment requirements (including spectrum renewals and a new 5G auction) pressure cash flow, which may demand additional debt financing sources. As of June 30, 2023, the company's debt totaled COP3.1 trillion, of which 93% was Colombian peso-denominated, with the remainder comprised of a USD50 million syndicated loan. The company's debt is evenly split between bank loans and COP bonds. Tigo UNE had COP43 billion in cash and equivalents as of June 30, 2023. Pro forma for the recent financing actions, the company is expected to increase cash by COP600 billion due to the equity contributions from its shareholders, and has rolled forward its loan with Bancolombia in the amount of COP85 billion. The company repaid its COP150 billion local bond maturing on October 20. The company is expected to make the initial payment for its 1900 MHz spectrum renewal in November 2023 for COP230 billion, with the next major debt maturity in May 2024 for COP160 billion. Fitch also expects the company to refinance the upcoming syndicated loan maturing in December 2024. ISSUER PROFILE Tigo UNE is an integrated telecommunications services provider in Colombia. The company offers mobile, broadband internet, fixed telephony, and Pay-TV. The company operates as a JV between Millicom International Cellular S.A. and Empresas Publicas de Medellin (EPM). SUMMARY OF FINANCIAL ADJUSTMENTS Standard lease adjustments. ESG CONSIDERATIONS UNE EPM Telecomunicaciones S.A. has an ESG Relevance Score of '5' for Governance Structure due to the dynamics between its Tigo UNE's shareholders, Millicom and Empresas Publicas de Medellin (EPM), that have impacted their ability to address the company's capitalization needs. UNE EPM Telecomunicaciones S.A. has an ESG Relevance Score of '4' for Management Strategy due to ongoing governance concerns, which have impaired management's ability to execute on its strategy, which 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 Recovery Prior ----------- ------ -------- ----- UNE EPM Telecomunicaciones S.A. LT IDR B+ Upgrade CCC LC LT IDR B+ Upgrade CCC Natl LT A-(col)Upgrade CCC(col) Natl ST F2(col)Upgrade C(col) senior unsecured Natl LT A-(col)Upgrade RR4 CCC(col) senior unsecured Natl ST F2(col)Upgrade C(col) =================================== D O M I N I C A N R E P U B L I C =================================== [*] DOMINICAN REPUBLIC: To Receive US$6M for Carbon Credits in 2024 ------------------------------------------------------------------- Dominican Today reports that the Dominican Republic will receive the first results of the international carbon credits market with a US$6.0 million payment by the World Bank (WB) in 2024. According to Yvonne Arias, executive director of Grupo Jaragua and technical secretary of the Dominican Committee of Man and the Biosphere (MAB); Federico Franco, vice-minister of Protected Areas and Biodiversity; Solhanlle Bonilla, director of Sustainability, and Lemuel Familia, head of the Ecosystems Division of the Ministry of the Environment and Natural Resources, this payment would mark a before and after, because to meet the goal of reducing carbon dioxide (Co2) the country would be obliged to continue trading in this market, the report discloses. Participating as guests at HOY's Economic Meeting, the officials and the biologist recalled that in May 2021, the Dominican Republic's Ministries of Finance and Environment and Natural Resources signed a historic agreement with the World Bank's Forest Carbon Partnership Facility (FCPF), which will allow the country to receive payments of up to US$25 million for verifiable greenhouse gas reductions from forest carbon from that date until 2025, through the Dominican Republic's emissions reduction program, according to Dominican Today. They highlighted the importance for the country of this fact to achieve the transition from activities harmful to water production to others beneficial to preserving this resource, the report notes. They explained that of the US$6.0 million the country will receive, 30% will be invested in protected areas, the report relays. At the same time, the rest will go to agricultural associations that are part of the project because they have changed the intensive form of production, the report says. On the subject, they added that a carbon dioxide market is being created, which must be so to have a balance, so there are already countries in the decontamination process, which will take longer for some, the report discloses. In contrast, for others that do not produce so many gases, it will be faster, so there is compensation for the forests, especially in the tropical areas of the world, for being the most efficient for reducing greenhouse gases, the report notes. They indicated that it is being collected in the country through a network that recognizes not only carbon but also the ecosystem services of the forests, 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. TCR-LA reported in April 2019 that Juan Del Rosario of the UASD Economic Faculty cited a current economic slowdown for the Dominican Republic and cautioned that if the trend continues, growth would reach only 4% by 2023. Mr. Del Rosario said that if that happens, "we'll face difficulties in meeting international commitments." An ongoing concern in the Dominican Republic is the inability of participants in the electricity sector to establish financial viability for the system. On August 14, 2023, the TCR-LA reported that Moody's Investors Service has changed the outlook on the Government of Dominican Republic's ratings to positive from stable and affirmed the local and foreign-currency long-term issuer and senior unsecured ratings at Ba3. Moody's said the key drivers for the outlook change to positive are: (i) sustained high growth rates have enhanced the scale and wealth levels of the economy; and (ii) a material decline in the government debt burden coupled with improved fiscal policy effectiveness will support medium-term debt sustainability. The affirmation of the Ba3 ratings balances the Dominican Republic's strong economic growth dynamics and relatively contained susceptibility to event risks, with a comparatively weaker fiscal position, reflecting long-standing credit challenges which include: (i) a shallow revenue base compared to peers, (ii) weak debt affordability metrics, and (iii) high exposure to foreign currency borrowing. S&P Global Ratings, in December 2022, raised its long-term foreign and local currency sovereign credit ratings on the Dominican Republic to 'BB' from 'BB-'. The outlook on the long-term ratings is stable. S&P affirmed its 'B' short-term sovereign credit ratings. S&P also revised its transfer and convertibility (T&C) assessment to 'BBB-' from 'BB+'. The stable outlook reflects S&P's expectation of continued favorable GDP growth and policy continuity over the next 12-18 months that will likely stabilize the government's debt burden. In February 2023, S&P said its BB ratings reflect the country's fast-growing and resilient economy. It also incorporates the country's historical political and social challenges in passing structural reforms to contain fiscal deficits, despite recent improvements in the electricity sector. The ratings are constrained by relatively high debt, a hefty interest burden, and limited monetary policy flexibility. Fitch Ratings, in December 2022, affirmed the Dominican Republic's Long-Term Foreign Currency Issuer Default Rating (IDR) at 'BB-' with a Stable Rating Outlook. ===================================== T R I N I D A D A N D T O B A G O ===================================== TRINIDAD & TOBAGO: Country's Middle Class is Shrinking ------------------------------------------------------ Melissa Maynard at Trinidad Express reports that many families are living pay check to pay check in Trinidad and Tobago. The report relates that an unamed family said they they are in survival mode as they can only replenish their food supply until the next pay day. The report notes that some months, families sacrifice groceries to meet other basic needs. This reality has prompted economists to assert that the middle class is gradually disappearing, according to Trinidad Express. One psychologist believes this situation can have far-reaching effects on people's mental health, to the point of affecting job performance, the report notes. Express Business explored the effects of financial hardship on a typical household, the report discloses. Mother of two Lisa (not her real name) told Express Business that she and her husband are feeling the pinch of the soaring cost of living now more than ever. Economist: More People Living Month To Month Economist Dr. Indera Sagewan, in an interview, categorized both families in this article as middle class, with one family at the mid-point and the other at the lower end, the report discloses. Stating that the middle class is eroding, she said had these families been paying a rent or mortgage, their financial burdens would have worsened to the point of not being able to sustain payments, the report notes. The report relays that she commented: "The middle class has a high propensity to spend—not in a bad way, but most of the income that they earn is spent. There's very little money that they have left over for savings." Sagewan said more people are living pay cheque to pay cheque: "They need to get the pay cheque in order to meet the expenses of the month, until they earn the next pay cheque." She noted that, before Covid, while some families still had income for entertainment to take their children out, that lifestyle changed with the onset of the pandemic, the report relays. Also, she noted the economic impacts of the Russia-Ukraine war have also been felt here, the report says. Cutting back for Divali, Christmas With Divali and Christmas upon us, people have already been cutting back because they have to measure holiday spending against purchasing food for the remaining days, said Sagewan, the report notes. Sagewan believes the Government must balance hard decisions with humane decisions, suggesting it should hold back on increased electricity rates to ease an already burdened public, the report says. The bottom line, she said, is the need for a holistic approach and "a real recognition by those who govern us, that these are real issues that need to be addressed," she added. Mental Health, Work Performance Affected The report discloses that clinical psychologist Dr Kelly McFarlane spoke of the stress created by financial challenges: "Your financial status is directly tied to your survival—your ability to provide or accumulate . . .(resources for) your basic needs, such as food, shelter, or water. Once you're struggling to meet those expectations . . . that creates excess stress because it threatens your survival . . . "Once your mental health is affected, it affects your performance at work . . . Your mental and emotional functioning (affects your) physiological functioning and your cognitive functioning (the way that you think). . . Whether your thinking is negatively skewed or positively skewed, or you're numb . . . (mental health issues may mean) you can't function," the report notes. She said this is why many firms provide employee assistance programs, the report relays. McFarlane noted that when people are in a crisis, or are suffering from too much stress, they often cannot reason and problem-solve as they normally would, the report discloses. So, how can stressed people cope? McFarlane said research shows social support is a key coping tool, the report says. Support may include empathy from family or friends, or having someone to lean on in times of crisis, or having someone available for spiritual help, the report notes. The report discloses that she acknowledged that some people will struggle to find solutions regardless of their stress levels. However, she noted that in many cases, people are simply not aware of some of their options: ". . . You might believe there is no way out of your situation—but it might just be that there is no way that you know of." She said asking for help can guide individuals to discovering solutions that they were not tapping into: "When your survival is threatened, you need tangible support to help you feel better and know that there is hope." McFarlane urged people to make use of available government programs and resources, the report relays. She also said such services must be accessible to everyone, so that the country could progress, adding: "It is vital that people are thriving, not just surviving," she added. =============== X X X X X X X X =============== [*] BOND PRICING COLUMN: For the Week Oct. 23 to Oct. 27, 2023 -------------------------------------------------------------- Issuer Cpn Price Maturity Country Curr ------ --- ----- -------- ------- ---- Earls Eight 2.3 75.2 05/20/2032 KY AUD Banco Davivienda SA 6.7 66.5 CO USD Banco de Chile 2.7 75.4 03/09/2035 CL AUD Banco de Chile 1.7 69.5 04/26/2032 CL EUR Banco del Estado 3.1 72.5 02/21/2040 CL AUD Banco del Estado de 1.7 70 03/01/2032 CL EUR Banco del Estado 2.8 68.9 03/13/2040 CL AUD Banco del Estado 1.7 69.2 07/05/2032 CL EUR Banco GNB Sudameris 7.5 73.3 04/16/2031 CO USD Banco GNB Sudameris 7.5 73.4 04/16/2031 CO USD Banco Santander Chile 1.3 57.6 11/29/2034 CL EUR Banco Santander Chile 3.1 72.3 02/28/2039 CL AUD Kaisa Group Holdings 10.9 9.1 KY USD Agile Group Holdings 6.1 41 10/13/2025 KY USD Agile Group Holdings 5.5 45 04/21/2025 KY USD Agile Group Holdings 5.5 39.2 05/17/2026 KY USD Alfa Desarrollo SpA 4.6 72.1 09/27/2051 CL USD Alfa Desarrollo SpA 4.6 72.1 09/27/2051 CL USD Alibaba Group 2.7 67.4 02/09/2041 KY USD Alibaba Group 3.2 65.2 02/09/2051 KY USD Agile Group Holdings 5.8 50.2 01/02/2025 KY USD QNB Finance 11.5 62.1 1/30/2025 KY TRY Lani Finance 3.1 68.6 10/19/2048 KY AUD Lani Finance 1.9 63.3 10/19/2048 KY EUR Lani Finance 1.7 60 03/14/2049 KY EUR Lani Finance 1.9 62.3 09/20/2048 KY EUR QNB Finance 3.4 75.4 10/21/2039 KY AUD QNB Finance 13.5 55.7 10/06/2025 KY TRY QNB Finance 2.9 75.3 12/04/2035 KY AUD Ruta del Maipo 2.3 53.5 12/15/2024 CL CLP Santander Consumer 2.9 73.1 11/27/2034 CL AUD Seagate HDD Cayman 3.4 73.4 07/15/2031 KY USD Seazen Group 4.5 63.6 07/13/2025 KY USD Silk Road Investments 2.9 68.8 01/23/2042 KY AUD Simpar Finance 10.8 73.8 02/12/2028 BR BRL Simpar Finance 10.8 73.8 02/12/2028 BR BRL Skylark 1.8 58.2 04/04/2039 KY GBP Tencent Holdings 3.8 74.1 04/22/2051 KY USD Tencent Holdings 3.9 72.3 04/22/2061 KY USD Tencent Holdings 3.2 66.2 06/03/2050 KY USD Tencent Holdings 3.2 66.5 06/03/2050 KY USD Tencent Holdings 3.3 63 06/03/2060 KY USD Tencent Holdings 3.3 63.5 06/03/2060 KY USD Panama Bond 4.5 73.5 01/19/2063 PA USD Panama Bond 4.3 74.8 04/29/2053 PA USD Panama Bond 3.9 66.8 07/23/2060 PA USD Earls Eight 0.1 63.8 12/20/2031 KY AUD Chile Bond 1.3 52 01/22/2051 CL EUR Chile Bond 3.1 66.9 01/22/2061 CL USD Chile Bond 1.3 65.4 01/29/2040 CL EUR Chile Bond 1.3 71.2 07/26/2036 CL EUR Chile Bond 3.3 66.6 09/21/2071 CL USD KWG Group Holdings 7.4 15.8 01/13/2027 KY USD KWG Group Holdings 6 40.8 01/14/2024 KY USD KWG Group Holdings 5.9 22.2 11/10/2024 KY USD KWG Group Holdings 6.3 17.6 02/13/2026 KY USD KWG Group Holdings 7.4 26.5 03/05/2024 KY USD KWG Group Holdings 6 19.4 08/10/2025 KY USD KWG Group Holdings 6 16.8 08/14/2026 KY USD KWG Group Holdings 7.9 27.5 08/30/2024 KY USD KWG Group Holdings 7.9 60.2 09/01/2023 KY USD MSU Energy SA 6.9 71.2 02/01/2025 AR USD Jamaica Government 8.5 68.9 12/21/2061 JM JMD Jamaica Government 6.3 72.7 07/11/2048 JM JMD China Maple Leaf 2.3 75 01/27/2026 KY USD China SCE Group 6 29 02/04/2026 KY USD China SCE Group 7.4 56.2 04/09/2024 KY USD China SCE Group 7 35.2 05/02/2025 KY USD China SCE Group 6 42.9 09/29/2024 KY USD Colombia Bond 7.3 71.3 10/18/2034 CO COP Colombia Bond 7.3 71.3 10/18/2034 CO COP Colombia Bond 7.3 61.5 10/26/2050 CO COP Colombia Bond 7.3 61.5 10/26/2050 CO COP Colombia Bond 3.9 54.8 02/15/2061 CO USD Colombia Bond 4.1 61.9 02/22/2042 CO USD Colombia Bond 5.6 72.7 02/26/2044 CO USD Colombia Bond 3.1 74 04/15/2031 CO USD Colombia Bond 3.3 72.1 04/22/2032 CO USD Colombia Bond 5.2 67.3 05/15/2049 CO USD Colombia Bond 4.1 58.8 05/15/2051 CO USD Colombia Bond 5 66.9 06/15/2045 CO USD Colombia Bond 6.3 63 07/09/2036 CO COP Colombia Bond 6.3 63 07/09/2036 CO COP Itau Unibanco SA 5.8 19.4 05/20/2027 BR BRL VTR Comunicaciones 5.1 55.3 01/15/2028 CL USD VTR Comunicaciones 5.1 53.6 01/15/2028 CL USD VTR Comunicaciones 4.4 54.4 04/15/2029 CL USD VTR Comunicaciones 4.4 54.5 04/15/2029 CL USD Vista Energy 1 73 03/03/2028 AR USD Voyager II 3.3 74.3 03/23/2034 KY AUD Transocean Inc 6.8 67.6 03/15/2038 KY USD Inversiones Latin 5.1 44.6 06/15/2033 CL USD Inversiones Latin 5.1 44.8 06/15/2033 CL USD Fospar S/A 6.5 1.3 05/15/2026 BR BRL Frigorifico 7.7 71.1 07/21/2028 PY USD Frigorifico 7.7 71.4 07/21/2028 PY USD Galaxy Digital 3 62.5 12/15/2026 KY USD Generacion 9.9 73.1 12/01/2027 AR USD Generacion 12.5 0 02/16/2024 AR USD Gol Finance Inc 8.8 40.5 KY USD Gol Finance Inc 8.8 42 KY USD Goldman Sachs 2.3 75.9 06/30/2040 KY EUR Greenland Hong Kong 10.2 45.9 KY USD Guacolda Energia SA 4.6 40.8 04/30/2025 CL USD Guacolda Energia SA 4.6 40.8 04/30/2025 CL USD Earls Eight 1.7 71.4 06/20/2032 KY AUD Ecopetrol SA 4.6 75 11/02/2031 CO USD Ecopetrol SA 5.9 63.9 11/02/2051 CO USD Ecopetrol SA 5.9 65.5 05/28/2045 CO USD Three Gorges Finance 3.2 74.2 10/16/2049 KY USD Telecom Argentina SA 1 56.5 02/10/2028 AR USD Telecom Argentina SA 1 64.2 03/09/2027 AR USD eHi Car Services 7 64.9 09/21/2026 KY USD YPF SA 1 69.8 01/10/2026 AR USD YPF SA 7 61.6 12/15/2047 AR USD YPF SA 7 61 12/15/2047 AR USD UEP Penonome II SA 6.5 73.6 10/01/2038 PA USD UEP Penonome II SA 6.5 74.1 10/01/2038 PA USD Guaranteed 5.4 73.7 01/29/2038 KY USD Guaranteed 5.3 71.9 03/23/2038 KY USD Helenbergh China 8 32.9 11/07/2024 KY USD SYN prop e tech SA 13.6 20.3 3/15/2024 BR BRL Yango Cayman 12 3.9 09/15/2023 KY USD MSU Energy SA 6.9 70.8 02/01/2025 AR USD El Salvador Bond 6.4 62.3 01/18/2027 SV USD El Salvador Bond 6.4 62 01/18/2027 SV USD El Salvador Bond 7.1 48.5 01/20/2050 SV USD El Salvador Bond 7.1 48.6 01/20/2050 SV USD El Salvador Bond 5.9 46 01/30/2025 SV USD El Salvador Bond 7.6 49.4 02/01/2041 SV USD El Salvador Bond 7.6 49.4 02/01/2041 SV USD El Salvador Bond 8.6 58.1 02/28/2029 SV USD El Salvador Bond 8.6 57.9 02/28/2029 SV USD El Salvador Bond 8.3 56.4 04/10/2032 SV USD El Salvador Bond 8.3 56.3 04/10/2032 SV USD El Salvador Bond 7.7 50 06/15/2035 SV USD El Salvador Bond 7.7 50 06/15/2035 SV USD El Salvador Bond 9.5 54.6 07/15/2052 SV USD El Salvador Bond 9.5 54.5 07/15/2052 SV USD El Salvador Bond 7.6 49.9 09/21/2034 SV USD El Salvador Bond 7.6 50 09/21/2034 SV USD Banda de Couro 8 69.1 01/15/2027 BR BRL Alibaba Group 3.3 63 02/09/2061 KY USD AMTD IDEA Group 4.5 52.5 KY SGD AAC Technologies 3.8 68.6 06/02/2031 KY USD ACEN Finance 4 70.9 KY USD AES Tiete 6.8 0.7 04/15/2024 BR BRL Agile Group Holdings 13.5 40.7 KY USD Agile Group Holdings 8.4 38.1 KY USD Agile Group Holdings 7.9 31 KY USD Argentina Bonar Bonds 1 19.8 7/09/2029 AR USD Argentina Bonar Bonds 1 27.5 08/05/2023 AR USD Argentina Treasury 2.5 25.3 11/30/2031 AR ARS Argentine Bond 0.5 19.5 07/09/2029 AR EUR Argentine Bond 1 23.7 07/09/2029 AR USD Argentine Bond 0.1 21.5 07/09/2030 AR EUR Argentine Bonos 16 72.6 10/17/2023 AR ARS Argentine Bonos 15.5 22.2 10/17/2026 AR ARS Ascent Finance 3.4 58.4 02/06/2043 KY AUD Ascent Finance 3.8 59.8 06/28/2047 KY AUD Ascent Finance 1.2 61.4 07/12/2047 KY EUR Astra Cumulative 1.5 60.6 11/01/2029 KY 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. 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