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

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

          Friday, January 26, 2024, Vol. 25, No. 20

                           Headlines



A R G E N T I N A

YPF SA: Out of Milei's Privatization Crosshairs


B A H A M A S

FTX GROUP: Customers Feel Short-Changed by Crypto Valuations


B R A Z I L

ALUPAR INVESTIMENTO: Fitch Affirms 'BB+' LT Foreign Currency IDR
BRAZIL: Unlikely to Meet 2024 Fiscal Goals, Audit Court Says
EMBRAER SA: Fitch Affirms 'BB+' LongTerm IDRs, Outlook Positive
MUNICIPALITY OF NITEROI: Fitch Affirms 'BB' IDRs, Outlook Stable


D O M I N I C A N   R E P U B L I C

DOMINICAN REPUBLIC: Bananas Remain Expensive in Grocery Stores


J A M A I C A

JAMAICA: Inflation for December 2022 to December 2023 was 6.9%
JAMAICA: Reaches Staff-Level Agreement With IMF


N I C A R A G U A

NICARAGUA: Economy Remains Resilient in Face of Multiple Shocks


V I R G I N   I S L A N D S

IDC OVERSEAS: S&P Affirms 'B/B' ICRs, Outlook Stable


X X X X X X X X

LATAM: IDB Governors to Discuss Challenges, Opportunities

                           - - - - -


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A R G E N T I N A
=================

YPF SA: Out of Milei's Privatization Crosshairs
-----------------------------------------------
Buenos Aires Times reports that President Javier Milei's government
has decided not to include the privatisation of Argentina's state
energy firm YPF SA in its massive 'Omnibus' bill.

The potential sell-off of the national oil driller was a
non-negotiable line for lawmakers from the UCR, PRO and Consenso
Federal caucuses. They said they would not support the government's
'Ley de Bases' bill without the YPF's removal from the list of
firms to be sold, according to Buenos Aires Times.

Simultaneously, YPF announced an agreement with the Santa Cruz
government to return conventional oil fields owned by the firm to
provincial control, the report relays.

Santa Cruz is the first to initiate talks with the state-owned
company on the subject, the report discloses.  Governor Claudio
Vidal, who described the agreement as "historic," is hoping able to
exploit resources located on the northern fringe of the province's
territory, the report relays.

The agreement was sealed at a meeting attended by the governor and
YPF President Horacio Marin, among others, the report says.

Vidal explained that "these are YPF's areas - some of them without
[new] investment - with notable production losses in recent years,
the report notes.  As a consequence, many small and medium-sized
companies have ceased to operate, others are facing the reduction
of their contracts, and society is absorbing the loss of regional
economic movement," the report relays.

The fields from which YPF will divest are Los Perales-Las Mesetas,
Barranca Yankowsky, Canadon de la Escondida-Las Heras, Canadon
León-Meseta Espinosa, Canadon Vasco, Canadon Yatel, Cerro
Piedra-Cerro Guadal Norte, El Guadal-Lomas del Cuy, Los Monos and
Pico Truncado-El Cordón, the report relays.

Governor Vidal said in a statement that the reactivation of the
areas would "sustain and generate a greater number of genuine jobs
in the private sector, in addition to increasing production to
obtain higher royalties, and thus successfully address the high
public spending that the province has today in terms of health,
education and state salaries," the report relays.

Santa Cruz's request is not new and has been made for many years by
oil-producing provinces, mainly in Patagonia, the report discloses.
The demands usually focus on mature wells, some of them without
activity, which were relegated by the shale boom of Vaca Muerta,
the report says.

Vidal said that "the only way to move forward is for everyone to
work, produce and strengthen each and every activity, including the
oil fields," the report adds.

                     About YPF SA

YPF S.A. is a vertically integrated, majority state-owned Argentine
energy company, engaged in oil and gas exploration and production,
and the transportation, refining, and marketing of gas and
petroleum products.

Founded in 1922, YPF was an oil company established as a state
enterprise.  YPF was later privatized under president Carlos Menem
and was bought by the Spanish firm Repsol in 1999, and the
resulting merged company was call Repsol YPF.  

In 2012, about 51% of the firm was renationalized and this was
initiated by President Cristina Fernandez se Kirchner.  The
government of Argentina agreed to pay $5 billion compensation to
Repsol.

In April 2023, S&P Global Ratings lowered its local and foreign
currency ratings on YPF SA to 'CCC-' from 'CCC+'.  The outlook on
these ratings is now negative.  The downgrade follows a similar
action on S&P's long-term foreign currency ratings and T&C on
Argentina, following announced plans that, if implemented, would
oblige some nonfinancial public-sector entities to exchange or sell
their holdings of global- and local-law dollar-denominated bonds
issued during the 2020 restructuring for other locally issued peso
debt, likely dollar- and/or inflation-linked bonds. In S&P's view,
the lack of clarity and the apparent motivation for the potential
transaction underscore heightened credit vulnerabilities, in
particular given the increasing pressures from the severe drought
that Argentina is facing, which further constrains the already
disrupted FX market. This expected greater pressure on the FX
markets also explains S&P's downward revision of the T&C assessment
to 'CCC-'.




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B A H A M A S
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FTX GROUP: Customers Feel Short-Changed by Crypto Valuations
------------------------------------------------------------
Dietrich Knauth at Reuters reports that dozens of FTX customers
have asked a U.S. bankruptcy judge to stop the collapsed crypto
exchange from using 2022 prices to value their cryptocurrency
deposits, saying that FTX is preventing its customers from
benefiting from a rebound in crypto prices.

One FTX customer, Anthony Maurin, said in a letter to U.S.
Bankruptcy Judge John Dorsey in Delaware, who is overseeing FTX's
Chapter 11 proceedings, that he felt "aggrieved and robbed" when
FTX's bankruptcy prevented him from accessing his account, and
called the exchange's bankruptcy plan a "second act of theft,"
according to Reuters.

The plan would pay customers back in U.S. dollars, based on
cryptocurrency prices at the time that FTX filed for bankruptcy in
November 2022, the report recalls.

While FTX says that U.S. bankruptcy law calls for claims to be
valued based on that date, FTX customers argue that the approach
undervalues volatile cryptocurrencies that have greatly increased
in value since the market bottomed out in 2022, the report
recalls.

In addition to Maurin, FTX customers from around the world have
filed dozens of similar letters in U.S. bankruptcy court over the
past few days, ahead of a deadline for objecting to FTX's valuation
method. FTX will seek approval of its list of cryptocurrency
prices, opens new tab at a Jan. 25 court hearing in Wilmington, the
report relays.

Some customers said the proposal is "grossly unfair" to holders of
bitcoin and other volatile assets and will result in preferential
treatment for customers who held stablecoin and outside investors
who bought FTX bankruptcy claims for cheap, the report notes.

Three of the largest cryptocurrencies held by FTX customers -
Bitcoin, Ether and Solana - have substantially increased in price
since FTX's bankruptcy, the report relays.

The price of Bitcoin has risen to about $46,000 from its November
2022 price of $16,871.63, and Solana has risen to about $98 from
$16.25. Ether has nearly doubled in price over the same period, the
report discloses.  For each cryptocurrency, FTX's bankruptcy plan
would pay customers a percentage of the November 2022 price, the
report says.

Some FTX customers have also opposed the company's decision to
value its equity shares and its own proprietary crypto token, FTT,
at $0, the report relays.  FTX customers held over $700 million in
FTT and FTX equity, which would be wiped out under the bankruptcy
plan, the report says.

FTX said in a Dec. 27 court filing that fixing crypto prices based
on the date of its bankruptcy petition is the only practical way to
move forward and begin repaying customers, the report discloses.

Courts have allowed other bankrupt crypto companies - including
Celsius Network, BlockFi, and Voyager Digital - to use
petition-date prices when valuing their customers' claims, FTX
said, the report notes.

FTX's approach will allow it to calculate a percentage recovery for
its customers and allow customers to make an informed decision on
whether or not they will support FTX's bankruptcy plan, the company
said, the report relays.

FTX's official creditors committee and an ad hoc group of non-U.S.
customers has agreed to support FTX's proposal, the report relays.

FTX, which collapsed in November 2022, has committed to using at
least 90% of its assets to repay customers.

The case is FTX Trading Ltd, U.S. Bankruptcy Court for the District
of Delaware, No. 22-11068.

The case is In re FTX Trading Ltd, U.S. Bankruptcy Court for the
District of Delaware, No. 22-11068.

For FTX: Brian Glueckstein, Andrew Dietderich, James Bromley and
Alexa Kranzley of Sullivan & Cromwell

For the official creditors committee: Kris Hansen and Kenneth
Pasquale of Paul Hastings

For the ad hoc committee of non-U.S. customers of FTX.com: Erin
Broderick of Eversheds Sutherland

                         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.




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B R A Z I L
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ALUPAR INVESTIMENTO: Fitch Affirms 'BB+' LT Foreign Currency IDR
----------------------------------------------------------------
Fitch Ratings has affirmed Alupar Investimento S.A.'s (Alupar) and
its subsidiary Alupar Chile Inversiones SpA's (Alupar Chile)
Long-Term Foreign and Local Currency Issuer Default Ratings (IDRs)
at 'BB+' and 'BBB-', respectively. In addition, Fitch has affirmed
Alupar's and its subsidiary Foz do Rio Claro Energia S.A.'s
National Scale Ratings and outstanding local debentures at
'AAA(bra)'.

Fitch has also affirmed Alupar's subsidiary Amazônia Empresa
Transmissora de Energia S.A.'s (AETE) National Scale Rating, and
outstanding local debenture's at 'AA+(bra)'. The Rating Outlooks
for the corporate ratings are Stable.

Alupar's ratings reflect its low business risk relative to its
diversified portfolio of power transmission assets in Brazil, with
predictable revenues and high operating margins. The company also
benefits from its generation activity, which helps mitigate
operational and regulatory risks. Fitch expects the group to reduce
leverage and have positive free cash flow (FCF) in the coming years
as capex declines. Alupar's Foreign Currency IDR is constrained by
Brazil's 'BB+' country ceiling, while Brazil's operating
environment limits the Local Currency IDR.

Alupar Chile's and Foz do Rio Claro's ratings mainly reflect
Alupar's high legal incentives to support these companies, while
the AETE's rating benefits from medium operational incentives.

KEY RATING DRIVERS

Predictable Revenues: Alupar's credit profile benefits from its
combination of energy transmission and generation activities mainly
in Brazil. This accomplished through a sizable and diversified
asset base that dilutes potential operational and regulatory risks.
The group's concessions in transmission will not begin to expire
until 2030, and 2044 in generation, and will occur on a staggered
basis over the following years.

For transmission, concession revenue (Annual Permitted Revenues
[PAR]) is generated through the availability of its assets, without
demand risk and annually adjusted for inflation. This segment will
remain as the group's main business representing 80% of the
consolidated EBITDA. For generation, long-term contracts for the
sale of a large part of the asset's assured energy and the partial
protection for hydrological risk, also create an expectation of
strong and predictable performance.

Leverage to Reduce: Fitch expects consistent consolidated leverage
with Alupar's current Local Currency IDR in the rating horizon,
considering its current portfolio of projects. The base case
scenario contemplates an adjusted net debt-to-EBITDA ratio between
2.5x-3.5x, with 3.4x at the end of Sept. 30, 2023, according to
Fitch's criteria.

Adjusted net leverage ratios include guarantees provided to
non-consolidated projects (considered off-balance sheet debt),
estimated at around BRL450 million at 2024 and BRL3.0 billion in
2027, mainly coming from a transmission line concession (Lote 2)
obtained in December 2023 and Transnorte Energia S.A. (TNE).

Capex Reduction Strengthens FCF: Fitch expects Alupar's positive
FCF should be around BRL800 million in 2024 and annual average of
BRL1.1 billion during 2025-2026, due to capex reduction and
dividend distribution corresponding to 50% of net income. The base
case scenario considers BRL643 million in capex in 2024 and annual
average of BRL342 million in the following three years,
significantly below the annual BRL1.6 billion average during the
2020-2022 period and estimated BRL680 million in 2023.

Consolidated EBITDA, calculated through regulatory accounting,
should reach BRL2.7 billion in 2023 and 2024 and BRL2.8 billion in
2025, while cash flow from operations (CFFO) should range from
BRL1.7 billion to BRL1.9 billion. EBITDA margins are high at around
80%-85%, characteristic of transmission companies in Brazil. In the
LTM ended on Sept. 30, 2023, Alupar's consolidated EBITDA was
BRL2.6 billion, with an 83% margin.

Parent Strengthens Subsidiaries' Ratings: Using Fitch's "Parent and
Subsidiary Linkage Criteria," Alupar Chile's IDRs and Foz do Rio
Claro's National Scale Rating are equalized with Alupar's IDRs and
National Scale Ratings. Alupar owns 100% of both subsidiaries;
therefore, it has high legal incentives to support Aupar Chile.
Based on agreements, Alupar will be a co-guarantor of all Alupar
Chile's obligations, debts, guarantees and fines, as well as for
any company that Alupar Chile may establish, if a new entity is
created as a result of winning a bid to build a power transmission
line in Chile.

In addition, Alupar Chile is covered by cross-default clauses from
parent debt instruments and of other debt instruments from
subsidiaries where the parent is also the guarantor. For Foz do Rio
Claro, Alupar is the guarantor of the company's single debt, the
financial covenants of which are based on Alupar's consolidated
figures. Foz do Rio Claro also operates in Alupar's core business.

For AETE, there are no legal or strategic incentives of support
from the parent, but Fitch believes there are "medium" operational
incentives that benefit the rating. Alupar does not guarantee
AETE's debt and there is no cross-default between them. Alupar owns
32,06% of AETE, which is part of its main business. AETE is not
relevant in terms of consolidated revenues (around 1% of PAR), but
has synergies with four other assets in the group. On a standalone
basis, Fitch believes AETE's net leverage will be a low 2.5x at the
end of 2023.

DERIVATION SUMMARY

Alupar's financial profile is stronger than Latin American peers
Interconexion Electrica S.A. E.S.P. (Foreign Currency IDR
BBB/Stable) and Consorcio Transmantaro S.A. (Foreign Currency IDR
BBB/Stable), in Colombia, and Transelec S.A. (Foreign Currency IDR
BBB/Stable), in Chile. All these peers have low business risk
profiles and predictable cash flow generation, characteristic of
transmission electricity companies in a regulated industry. The
main difference in Alupar's IDRs and these companies is the country
where they generate their main revenues and the location of assets.
While its peers are located in countries with higher IDRs, Alupar's
ratings are negatively affected by Brazil's 'BB+' country ceiling.

Compared to Transmissora Alianca de Energia Eletrica S.A.'s (Taesa;
Local Currency IDR BB+/Stable; Foreign Currency IDR BB+/Stable),
also located in Brazil, both company's benefit from a diversified
portfolio of transmission companies. Nevertheless, Fitch expects
Taesa's leverage metrics to be higher in the coming years, due to
strong investments plan, which justifies the difference in the
Local Currency IDR.

KEY ASSUMPTIONS

Fitch's Main Assumptions in its Base Scenario for the Issuer
Include:

- PARs adjusted annually by inflation;

- Generation scaling factor of 0.87 in 2024 and 0.89 in 2025;

- Operating expenses adjusted by inflation;

- Distribution of dividends equivalent to 50% of net income (net
income based on regulatory accounting standards);

- Development of the non-consolidated projects TNE and Lote 2;

- Consolidated investments of BRL1.9 billion during 2023-2027
period and absence of acquisitions and/or new investments out of
the current portfolio.

RATING SENSITIVITIES

Factors that could, individually or collectively, lead to positive
rating action/upgrade:

- Positive rating action for the company's Foreign Currency IDR
depends on an upgrade on Brazil's sovereign rating;

- Positive rating action for the company's Local Currency IDR
depends on improvements of Alupar's operating environment and
EBITDA interest coverage above 4.5x;

- An upgrade is not applicable to the National Scale Rating as it
is at the highest level;

- Higher incentive for Alupar to support AETE may lead to an
upgrade on its rating.

Factors that could, individually or collectively, lead to negative
rating action/downgrade:

- A deterioration in Alupar's consolidated financial profile, with
net adjusted leverage above 3.5x and EBITDA interest coverage below
2.5x, both on a sustainable basis could lead to a downgrade of the
Local Currency IDR;

- A weakening of Alupar's operating environment may result in a
downgrade of the Local Currency IDR;

- A downgrade of Brazil's sovereign rating would result in a
similar rating action on Alupar's Foreign Currency IDR;

- A two-notch downgrade of Alupar's Local Currency IDR may lead to
a downgrade of the National Scale Rating;

- a lower incentive for Alupar to support Alupar Chile, Foz do Rio
Claro and AETE may lead to a downgrade of their ratings;

- Net debt/EBITDA ratio above 5.0x at AETE level could result in a
negative rating action on its ratings.

LIQUIDITY AND DEBT STRUCTURE

Sound Liquidity Profile: The Alupar group should continue to
benefit from a high liquidity position and broad access to the
banking and capital markets. On a consolidated basis, the group's
cash position of BRL2.7 billion at the end of September 2023
covered its short-term debt of BRL1.8 billion by 1.5x. Fitch also
expects that the operating cash generation of new assets will be
adequate to service debt. On Sept. 30, 2023, total consolidated
adjusted debt of BRL11.5 billion mainly consisted of debentures
issuances (BRL9.1 billion or 79%) and Banco Nacional de
Desenvolvimento Economico e Social (BNDES; BRL528 million, or 5% of
the total).

The holding company should use its significant cash reserves to
supply the needs of its projects, maintaining a debt maturity
schedule compatible with its cash flow expectations. As of Sept.
30, 2023, its cash position of BRL747 million (27% of the
consolidated amount) was slightly higher than the total debt of
BRL691 million. The dividends inflow is its main source of funds,
with BRL697 million received in the LTM ended on Sept. 30, 2023. In
the same period, the total debt-to-received dividends ratio was
1.0x. Alupar should be able to maintain the net debt-to-received
dividends ratio below 1.0x over the following years.

ISSUER PROFILE

Alupar is a non-operational holding company active in the energy
transmission and generation segments mainly in Brazil, with small
operations in other Latin America countries. The company's shares
are traded at B3 in Brazil.

SUMMARY OF FINANCIAL ADJUSTMENTS

Net revenues and EBITDA net of construction revenues and cost.

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
   -----------                 ------                -----
AETE - Amazonia
Empresa Transmissora
de Energia S.A.         Natl LT AA+(bra)  Affirmed   AA+(bra)

   senior unsecured     Natl LT   AA+(bra)Affirmed   AA+(bra)

Foz do Rio Claro
Energia S.A.            Natl LT   AAA(bra)Affirmed   AAA(bra)

   senior unsecured     Natl LT   AAA(bra)Affirmed   AAA(bra)

Alupar Chile
Inversiones SpA         LT IDR    BB+     Affirmed   BB+
                        LC LT IDR BBB-    Affirmed   BBB-

Alupar Investimento
S.A.                    LT IDR    BB+     Affirmed   BB+
                        LC LT IDR BBB-    Affirmed   BBB-
                        Natl LT   AAA(bra)Affirmed   AAA(bra)

   senior unsecured     Natl LT   AAA(bra)Affirmed   AAA(bra)


BRAZIL: Unlikely to Meet 2024 Fiscal Goals, Audit Court Says
------------------------------------------------------------
globalinsolvency.com, citing  Reuters reports that Brazil should
end 2024 with a primary deficit of 55.3 billion reais (US$11.2
billion), the federal audit court (TCU) said, in the latest sign of
skepticism that President Luiz Inacio Lula da Silva's government
can meet its pledge to eliminate the fiscal deficit.

After Lula upped spending on social measures in his first full year
in office, the market is worried his administration won't meet its
fiscal goals, according to globalinsolvency.com.

Despite falling interest rates, long-term future interest rates
remain high, underlining market discomfort with the government's
fiscal situation, the report notes.

In a report, the technical area of the TCU said the government's
anticipated revenue growth was based on "various measures whose
consequences are still not very clear or predictable,"
globalinsolvency.com discloses.

The government's forecast of net primary revenue reaching 19.2% of
gross domestic product (GDP), the highest level since 2010,
signifies a "value much above what has been observed in recent
years, indicating a possible overestimation," it added.

Planning Minister Simone Tebet defended the government's revenue
expectations, telling journalists they were "reasonable," the
report relays.  Utilizing the same revenue level observed in 2022
and the government's projected expense for this year, the TCU
projected that the primary deficit for this year would reach 0.5%
of GDP, 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).


EMBRAER SA: Fitch Affirms 'BB+' LongTerm IDRs, Outlook Positive
---------------------------------------------------------------
Fitch Ratings has affirmed Embraer S.A.'s Long-Term Foreign and
Local Currency Issuer Default Rating (IDR) at 'BB+' and its
National Scale Rating at 'AAA(bra)'/Outlook Stable. Fitch has also
affirmed the 'BB+' unsecured notes of Embraer Netherlands Finance
BV. The Rating Outlook for the IDRs is revised to Positive from
Stable.

The Positive Outlook reflects Embraer's improving production and
delivery profile and growing operating cash flow generation that
should benefit credit metrics. Fitch recognizes that recent
supplier issues have postponed further improvement in deliveries,
but expects ongoing progress to lead to operational normalization
throughout 2024. Fitch forecasts Embraer's consolidated total
leverage to trend down to 4.0x by 2024, with net leverage just
around 1.0x.

Embraer's ratings reflect its competitive positions in the
commercial and business jet markets; backlog of USD17.8 billion,
and product portfolio diversification that includes defense
programs and solid operations in its services and support segment.
Embraer's robust liquidity, mostly held outside Brazil, and its
large export revenue, combined with some offshore operating cash
flow, further support its ratings.

KEY RATING DRIVERS

Ongoing Backlog and Deliveries Rebound: Fitch expects commercial
aircraft deliveries to lag below 2019 levels by 28% in 2023, 12% in
2024 and stable in 2025. Commercial deliveries should be around the
low end of FY2023 guidance (65-70) and 78 aircraft deliveries
during 2024. For business jet deliveries, the rebound has been
faster; deliveries are expected to increase 6% in 2023 and 27% in
2024, with deliveries around 115 and 138, respectively. In 2022 and
2023, Embraer and the broader global aerospace and defense industry
suffered from materials shortages and supply chain constraints,
which affected deliveries targets. Fitch expects this to improve in
2024, which should support the ongoing rebound in deliveries.

Embraer's firm order backlog (commercial aviation) stood at 291
aircraft at the end of 3Q23, up from 281 in 4Q20 but still below
338 in 2019, before the pandemic. Its financial backlog has already
surpassed pre-pandemic levels, with USD17.8 billion at the end of
3Q23, higher than 2019 and an improvement from USD14.4 billion at
YE 2020. In Fitch's view, Embraer's backlog supports production for
the next several years but suffers from concentration. Embraer
continues to work to boost orders of its E2 aircraft, while
remaining active in the sale of E1 for regional airlines in the
U.S. The growing operations with the E2 in Europe and Canada could
also support better opportunities in the main lines in the U.S. as
well.

Strong Market Position: Embraer's strong market position for
commercial jets with fewer than 150 seats and within the global
executive jets industry are key factors supporting the expected
recovery in the company's backlog in the medium term. Midsize
commercial jets producers are expected to continue to have
opportunities with mainline or low-cost carriers that continue to
look to rightsize their fleets to adjust capacity. The weaker
financial or business positions of a few competitors, or in some
cases changes in strategy, enable growth opportunities for Embraer
that are helping the company see deliveries rebounding in
2023-2024.

Improving Diversification: Embraer has been efficient in improving
its business diversification after several years of investing in
new projects, such as E2 family, KC-390 and on its service and
support operations. The expansion of the service& support segment,
better product mix in both commercial aviation and executive jets
and improving scenario for Defense are likely to benefit Embraer's
business profile in the medium term. Embraer's revenue during the
first nine months of 2023 operates were distributed as 33% of
commercial aviation, 24% executive jets, 10% Defense & Security,
32% Service & Support and 1% others. Embraer is also developing its
Evtol operation through its subsidiary Eve Inc. (89.5% share
ownership).

EBIT Margin Recovering: Embraer's operating performance is expected
to improve as deliveries rebound (gains of scale) and well as from
past quarter of cost structure improvements. Fitch projects
Embraer's EBIT margins will recover to around 5.4% in 2023 and
continue to expand in 2024 and 2025 towards 7%, with the likely
increase in backlog. Before the pandemic, the company faced
challenges as it navigated several new development programs. Lower
deliveries in commercial aviation and less favorable mix affected
Embraer's fixed cost dilution in 2020-2022.

FCF Expansion Limited by Eve and Inventories Normalization: After a
strong working capital inflow during 2021-2023 (average USD302
million) mostly monetization of inventories and pre-delivery
deposits (PDPs), Embraer's operating cash flow will start to be
consumed by working capital consumption ahead of deliveries volume
ramp-up, ongoing capex programs and developments at Eve. The strong
FCF during 2022 represented an improvement from the USD1 billion of
FCF burn in 2020 and positive FCF of USD239 million in 2021. For
2023 and 2024, FCF is expected to be around USD120 million and
USD173 million, including Eve and before any asset sale. For Eve,
Fitch estimates around USD100 million of operating expenses and
capex of around USD15 million, USD60 million and USD25 million in
2024, 2025 and 2026 related to the construction of its plant
facility. For 2023-2024, Fitch's rating case does not currently
assume dividend distributions.

Net Leverage Trending Down: Fitch forecasts Embraer's net
debt/EBITDA to reach 1.5x in 2023, down from 2.4x in 2022 and 4.3x
in 2021. This compares with 20.7x in 2020, 4.1x in 2019 and average
of 1.0x during the 2015-2017 period. On gross leverage, Embraer's
leverage remains high for the rating, around 5.8x, with positive
trends to decline to 4.0x and 3.0x by 2024 and 2025. The company's
ability to maintain positive FCF generation, to reduce gross
leverage, while maintaining net leverage consistently below 2.5x
during the next years and navigate the development of Eve is key to
potential positive rating actions in the medium term.

Modest Brazilian Risk: Approximately 90% of Embraer's revenue is
generated from exports or from business operations based abroad.
Nonetheless, Brazil's economic and political environment is a
concern as the majority of Embraer's operating asset base is
locally domiciled, and the government represents a large portion of
the defense segment backlog. Brazil is listed as a related party in
Embraer's SEC filings as a result of the Brazilian government's
"golden share" and a direct shareholder stake (approximately 5% of
Embraer) via a company controlled by the government. Embraer's
recent contract renegotiations with the federal government was an
item to watch, but Fitch does not expect any major impact to cash
flow.

Rating Above Country Ceiling: Fitch does not consider Brazil's
country ceiling a rating constraint for Embraer currently, given
the company's large cash holding outside of Brazil, as well as its
heavy focus on exports, stand-by credit facility and growing
business outside of Brazil. Based on these factors, under Fitch's
criteria, Embraer could be rated up to three notches higher than
the Brazilian country ceiling.

DERIVATION SUMMARY

Embraer is one the market leaders for commercial jets with fewer
than 150 seats. Its aircraft are known for their engineering,
commonality across models and interior design. The company had 291
firm jet orders in backlog as of Sept. 30, 2023. Embraer's total
backlog, including contracts from all segments, was USD17.8 billion
at Sept. 30, 2023. Embraer's weaker competitive position compared
with major global peers, notably Airbus SE (A-/Stable) and The
Boeing Company (BBB-/Positive) based on scale and financial
strength, is partially offset by its good business position in the
niche of commercial jets with fewer than 150 seats, and its
manageable financial profile. Embraer's bulk of operations are in
Brazil, but its large exports flow, cash balances and operating
cash flow abroad are factors supporting its ratings above the
country ceiling, as per Fitch's criteria.

KEY ASSUMPTIONS

- Embraer's commercial deliveries to be close to the low-end of the
company's guidance of 65-70 in 2023 and 78 in 2024 (-28% and -12%
versus 2019);

- The business jet market deliveries to be around 115 in 2023 and
138 in 2024;

- EBIT margin of 5.3% in 2023 and moving around 7% during
2024-2025;

- Consolidated investment expenditures of USD287 million in 2023
and USD332 million in 2024;

- Embraer to maintain its strong liquidity throughout the forecast
period and active liability management strategy to manage
refinancing risks.

RATING SENSITIVITIES

Factors that could, individually or collectively, lead to positive
rating action/upgrade:

- An upgrade to investment-grade level would be dependent on a
return to net leverage below 2.5x on sustainable basis, in addition
to gross leverage below 4.5x and strong liquidity position with no
major refinancing risks in the medium term;

- Strong rebound in deliveries to 2019 levels earlier than expected
leading to EBIT margins above 7%;

- Solid expansion of E2 portfolio;

- Steady positive FCF generation.

Factors that could, individually or collectively, lead to negative
rating action/downgrade:

- Higher than expected capex levels, including additional cash
outflows related to Eve;

- Substantial order cancellations in the E1 and E2 programs and
business jet segment, or significant delays and cost increases on
the new programs;

- Net leverage remaining consistently above 3.5x;

- Substantial declines in liquidity without commensurate debt
reductions;

- Multiple-notch downgrade of Brazil's sovereign rating, along with
a similar reduction in the country ceiling.

LIQUIDITY AND DEBT STRUCTURE

Strong Liquidity: Embraer's financial flexibility is solid and it
is a key factor supporting the ratings. The company had USD2.9
billion of debt as of Sept. 30, 2023, with cross-border unsecured
bonds representing 61% of this amount. Cash position at the end of
the period were USD1.3 billion, excluding Eve (USD256 million), and
is sufficient to support debt amortization up to at least 2026
(USD166 million). During 2023, the company completed a refinancing
and improved its debt schedule amortization. Embraer also increased
its exposure to BNDES, with debt increasing to around USD612
million from average of USD305 million during 2021-2022, and this
should increase in the next few years and BNDES should finance
Eve's production plant (USD150 million). The company's liquidity is
further enhanced by a USD650 million revolving credit facility.

Fitch expects Embraer to remain disciplined with its liquidity
position, maintaining its proactive approach in liability
management to avoid exposure to refinancing risks. At Sept. 30,
2023, approximately 98% of the company's cash, equivalents and
financial investments were in U.S. dollars and a major part being
held abroad.

ISSUER PROFILE

Embraer is a market leader for commercial jets with fewer than 150
seats. Its aircraft are known for their engineering, commonality
across models, and interior design. The company also manufactures
executive jets, and Defense & Security aviation segment.

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
   -----------                 ------              -----
Embraer Netherlands
Finance BV

   senior unsecured   LT        BB+     Affirmed   BB+

Embraer S.A.          LT IDR    BB+     Affirmed   BB+
                      LC LT IDR BB+     Affirmed   BB+
                      Natl LT   AAA(bra)Affirmed   AAA(bra)


MUNICIPALITY OF NITEROI: Fitch Affirms 'BB' IDRs, Outlook Stable
----------------------------------------------------------------
Fitch Ratings has affirmed the Municipality of Niteroi's Long-Term
Foreign Currency and Local Currency Issuer Default Ratings (IDRs)
at 'BB'. The Rating Outlook is Stable. Fitch also affirmed
Niteroi's Short-Term IDRs at 'B', its National Long-Term rating at
'AAA(bra)' and its National Short-Term Rating at 'F1+(bra)'.
Additionally, Fitch raised Niteroi's Standalone Credit Profile
(SCP) to 'a' from 'bbb'.

The Municipality of Niteroi's IDRs are capped by Brazil's sovereign
IDR (BB/Stable). Per Fitch's criteria, Brazilian Local and Regional
Governments do not qualify to be rated above the sovereign due to
the regulatory framework. The Federal Government has strong
influence over local governments, as evidenced by the establishment
of a salary floor for teachers and pre-clearance to enter into
foreign credit operations, among others.

Niteroi's SCP was upgraded to 'a' as Fitch reassessed the
municipality's Risk Profile to 'Low Midrange' from 'Weaker'.
Niteroi's expenditure adjustability was reassessed to midrange on
the back of increasing capex, indicating the municipality
flexibility to adjust expenditures has increased over the years,
with less than 90% share of mandatory or committed expenditures. In
fact, the three-month moving average of capex to total expenditures
ratio has increased to 14.9% in 2020-2022. Fitch views the share of
capex as an indication of budget flexibility, considering that
Brazilian LRGs tend to rely on investment cuts when faced with
fiscal pressures due to opex rigidity related to a high share of
personal expenditures, pensions and constitutional mandates for
expenditures on health and education.

KEY RATING DRIVERS

Risk Profile: 'Low Midrange'

The assessment reflects Fitch's view that there is a moderately
high risk of the issuer's ability to cover debt service with the
operating balance weakening unexpectedly over the scenario horizon
(2023-2027) due to lower revenue, higher expenditures or an
unexpected rise in liabilities or debt service requirements.

Revenue Robustness: 'Weaker'

Revenue Robustness is assessed as Weaker, reflecting Niteroi´s
heavy dependence on revenues from highly cyclical economic
activities related to the oil sector. Dependency toward volatile
revenue sources, such as commodity sales, is considered as a weaker
feature for Revenue Robustness. For Niteroi, oil royalties
represented 46.3% of operating revenue in 2022.

Overall, the Brazilian tax collection framework transfers to states
and municipalities a large share of the responsibility to collect
taxes. Constitutional transfers exist as a mechanism to compensate
poorer entities. For that reason, a high dependency toward
transfers is also considered a weak feature for a Brazilian LRG.

Fitch also factors in Niteroi's reliance on transfers when
assessing Revenue Robustness. LRGs that report a transfer ratio
above or equal to 40% are classified as 'Weaker', while others with
a ratio below 40% are classified as 'Midrange'. Transfers
represented 63.1% of Niteroi´s operating revenue on average in
2018-2022, corroborating with the Weaker assessment.

Revenue Adjustability: 'Midrange'

The 'Midrange' assessment for Revenue Adjustability is mainly
explained by Revenue Equalization Fund, which was instituted in
2019 through a municipal law and regulated by Decree No.
13.215/2019 and Law No. 3633 of Sept. 15, 2021. Resources are
allocated in fixed income through Brazilian sovereign bonds and
fixed-income investment funds.

The municipal treasury is responsible for the financial management
of Revenue Equalization Fund (FER). Revenue constitutes of 10% of
the special participation over oil royalties. The fund will also
keep interest revenue from its investments. The municipality might
also add additional allocations to the Revenue Equalization Fund
when it deems adequate.

Access to funds will be allowed during a period of revenue
shortfall related to oil royalties. Niteroi may withdraw up to 50%
of the revenue loss, the expected royalty revenue as estimated by
the National Oil Agency (Agência Nacional do Petróleo, Gás
Natural e Biocombustíveis) versus the actual royalty revenue, as
long as the amount is equal to or smaller than 20% of the available
funds under the Revenue Equalization Fund. As of November 2023,
Niteroi reported BRL949 million in assets under FER.

Expenditure Sustainability: 'Midrange'

Municipalities are mostly engaged in providing healthcare and
elementary education services. They are also responsible for urban
infrastructure and social housing, but such mandates consume a
lesser portion of the municipal budget when compared with health
and education.

Expenditure tends to grow with revenue as a result of earmarked
revenue. States and municipalities are required to allocate a share
of revenue in health and education. This results in procyclical
behavior in good times, as periods of high revenue growth result in
similar behavior for expenditures. However, due to the large weight
of personal expenditures and salary rigidity, downturns that result
in lower revenue are not followed by similar cuts in expenditures.

The municipality of Niteroi kept expenditure growth below revenue
growth in 2018-2022. Operating margins averaged 29.5% in the same
period, which is a high figure for Brazilian LRGs. During the
pandemic, margins dropped to 13.2%, which is still robust
performance considering the challenging environment. The adequate
control over expenditure growth across the years translates into a
'Midrange' assessment for Expenditure Sustainability.

Expenditure Adjustability: 'Midrange'

Expenditure adjustability was reassessed to Midrange from Weaker,
considering the continuous growth of capex as a share of total
expenditures, indicating the municipality flexibility to adjust
expenditures has increased over the years, with less than 90% share
of mandatory or committed expenditures.

Overall, Brazilian local governments suffer from a fairly rigid
cost structure. As per the Brazilian Constitution, the
affordability of an expenditure reduction is low. As a result,
whenever there is an unpredictable reduction in revenue, operating
expenditure does not follow automatically. Fitch views the share of
capex as an indication of budget flexibility, considering that
Brazilian LRGs tend to rely on investment cuts when faced with
fiscal pressures due to opex rigidity.

For Niteroi, the three-month moving average of capex to total
expenditures has increased to 14.9% in 2020-2022 from 13.9% in
2019-2021 and 11.4% in 2018-2020. This is a high figure when
compared with other Brazilian LRGs rated by Fitch and aligned with
other Latam entities with a Midrange assessment.

Overall, personal expenditures corresponded to 46.4% of total
expenditures in 2022. This item has very limited flexibility for
adjustments given salary rigidity and limited ability to manage
human resources and pension payments. Other operating expenditures
amounted to close to 34% of total expenditures in 2022 and have
some flexibility for adjustments, but still limited by
constitutional mandates. Lastly, capex represented 18.6% of total
expenditures in 2022 and 14.9%, on average, in 2020-2022.
Historically, Brazilian LRGs have often relied on investments cuts
when facing a more challenging economic environment.

Liabilities & Liquidity Robustness: 'Weaker'

Access to new loans is restricted as Brazilian LRGs are not allowed
to access the market through bond issuances. Lenders consist mainly
of public commercial and development banks and multilateral
organizations. Often, loans are guaranteed by the federal
government, especially for foreign currency loans. For that reason,
the federal government has strict control over new lending to
LRGs.

There is a moderate national framework for debt and liquidity
management since there are prudential borrowing limits and
restrictions on loan types. Under the Fiscal Responsibility Law of
2000, Brazilian LRGs have to comply with indebtedness limits.
Consolidated net debt for municipalities cannot exceed 1.2x, or
120%, of net current revenue. Niteroi reported a debt ratio of
-44,74% as of YE 2022 due to sizable cash position. The law also
sets limits for guarantees at 22% of net current revenue. Niteroi
had no guarantees as of YE 2022.

External debt amounted to BRL423 million as of YE 2022, which
represents 62% of direct debt. It consists of two contracts with
multilateral organizations and counts with a federal guarantee.
Overall, Niteroi reports a low debt burden and smooth amortization
profile.

There is moderate off-balance sheet risk stemming from the pension
system, which is a burden for most Brazilian LRGs. Another relevant
contingent liability refers to the payment of judicial claims, the
precatorios.

Liabilities & Liquidity Flexibility: 'Midrange'

A framework exists for providing emergency liquidity support from
the federal government via the granting of extended maturity over
the prevalent federal debt portion. Fitch assesses the entity's
available liquidity to differentiate between 'Weaker' and
'Midrange' for liabilities and liquidity flexibility.

The Brazilian National Treasury analyzes the liquidity rate for
LRGs to assess which entities qualify for federal government
guarantees (Capacidade de Pagamento or CAPAG), which is measured by
the LRGs' short-term financial obligation to net cash.

The federal government's threshold to rate this ratio 'A' is 100%.
Fitch has set a threshold of 100% for the average of the last three
years (2020-2022 year-end) and for the last year-end results
available (December 2022), which would result in a 'Midrange'
assessment for this factor.

Niteroi reported a three-year average liquidity ratio of 15.2%. As
of December 2022, the metric reached 12%, corroborating with the
'Midrange' assessment.

Debt Sustainability: 'aaa category'

Fitch's rating case forward-looking scenario indicates that the
payback ratio, measured as net adjusted debt/operating balance, the
primary metric of the debt sustainability assessment, will reach an
average of -0.9x for 2025-2027, which is aligned with a 'aaa'
assessment. The actual debt service coverage ratio, the secondary
metric, is projected at 6.9x for the 2025-2027 average, aligned
with a 'aaa' assessment. Fiscal debt burden is projected at -13.3%
for the same period.

For its rating case, Fitch takes into consideration the
municipality's historical performance and projections for main
macro variables, such as GDP growth and inflation. By nature, the
rating case is a stressed scenario. Niteroi´s negative payback
ratio is explained by a high level of unrestricted cash, low
current debt, and limited plans for new loans as projected under
Fitch´s rating case. The municipality benefits from high levels of
royalty's revenues, which, aligned with prudent opex management,
translate into low financing needs.

DERIVATION SUMMARY

Fitch assesses the Municipality of Niteroi SCP at 'a'. This
reflects the combination of a 'Low Midrange' risk profile, debt
sustainability metrics at 'aaa' category, and the national and
international peer comparison, which also factors in Niteroi´s
dependence towards volatile revenue sources relative to peers. The
municipality´s IDRs of 'BB'/Stable are capped by the sovereign.

KEY ASSUMPTIONS

Risk Profile: 'Low Midrange'

Revenue Robustness: 'Weaker'

Revenue Adjustability: 'Midrange'

Expenditure Sustainability: 'Midrange'

Expenditure Adjustability: 'Midrange'

Liabilities and Liquidity Robustness: 'Weaker'

Liabilities and Liquidity Flexibility: 'Midrange'

Debt sustainability: 'aaa'

Support (Budget Loans): 'N/A'

Support (Ad Hoc): 'N/A'

Asymmetric Risk: 'N/A'

Rating Cap (LT IDR): 'BB'

Rating Cap (LT LC IDR) 'BB'

Rating Floor: 'N/A'

Quantitative assumptions - Issuer Specific

Fitch's rating case is a "through-the-cycle" scenario, which
incorporates a combination of revenue, cost and financial risk
stresses. It is based on 2018-2022 figures and 2023-2027 projected
ratios. The key assumptions for the scenario include:

- YoY 0.7% decrease in operating revenue on average in 2023-2027,
mainly reflecting the high share of oil royalties relative to
operating revenues and the projected fall in oil prices;

- Oil prices are as per Fitch projections for the Brent (USD/bbl)
as of January 2024:

2023: 82

2024: 80

2025: 70

2026: 65

2027: 65.

For its rating case, Fitch applies a further 15% reduction to oil
prices.

- YoY 6.6% increase in tax revenue on average in 2023-2027,
reflecting projected inflation plus spread as per historical
performance;

- YoY 6.5% increase in operating expenditure on average in
2023-2027, reflecting projected inflation plus spread as per
historical performance;

- Net capital balance of -BRL 1,231 million on average in
2023-2027, CAPEX is projected to sustain historical values in real
terms and to absorb excess cash generation through the projection
horizon;

- Cost of debt of 6.8% on average in 2023-2027, reflecting
government´s debt service schedule and a 50bps shock to debt cost
in the rating case.

Quantitative assumptions - Sovereign Related

Figures as per Fitch's sovereign actual for 2022 and forecast for
2023-2027, respectively (no weights and changes since the last
review are included as none of these assumptions was material to
the rating action).

Liquidity and Debt Structure

Net adjusted debt considers BRL682 million of direct debt and
unrestricted cash of BRL2.6 billion as of YE 2022. Fitch estimates
that close to 54% of debt is guaranteed by the federal government
and consists of foreign debt contracts with multilateral
organizations. Niteroi has a history of strong liquidity, with an
'A' score under the National Treasury payment capacity system for
the last three years.

Issuer Profile

Niteroi is a Brazilian municipality in the Metropolitan Region of
Rio de Janeiro, in the state of Rio de Janeiro. With an estimated
population of 487,000, it holds the highest Municipal Human
Development Index of Rio de Janeiro and the second-highest average
monthly per capita household income among Brazilian municipalities.
Niteroi's economy is highly reliant on the oil sector.

RATING SENSITIVITIES

Factors that Could, Individually or Collectively, Lead to Negative
Rating Action/Downgrade

- A negative rating action on Brazil's IDR would lead to a negative
rating action on the Municipality of Niteroi given that its ratings
are currently capped by the sovereign;

- The Municipality of Niteroi IDRs would be downgraded if its
payback ratio is projected above 9x and its actual debt service
coverage ratio is projected below 1.5, which Fitch views as
unlikely.

Factors that Could, Individually or Collectively, Lead to Positive
Rating Action/Upgrade

- A positive rating action on Brazil's IDR would lead to a positive
rating action on the Municipality of Niteroi given that its ratings
are currently capped by the sovereign.

ESG CONSIDERATIONS

Municipality of Niteroi has an ESG Relevance Score of '4' for
Biodiversity and Natural Resource Management due to Niteroi´s
economic and financial dependence on the hydrocarbon sector, 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.

DISCUSSION NOTE

There was an appropriate quorum at the committee and the members
confirmed that they were free from recusal. It was agreed that the
data was sufficiently robust relative to its materiality. During
the committee no material issues were raised that were not in the
original committee package. The main rating factors under the
relevant criteria were discussed by the committee members. The
rating decision as discussed in this rating action commentary
reflects the committee discussion.

PUBLIC RATINGS WITH CREDIT LINKAGE TO OTHER RATINGS

The ratings of the Municipality of Niteroi are capped by the
Brazilian sovereign.

   Entity/Debt             Rating                Prior
   -----------             ------                -----
Municipality of
Niteroi            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)




===================================
D O M I N I C A N   R E P U B L I C
===================================

DOMINICAN REPUBLIC: Bananas Remain Expensive in Grocery Stores
--------------------------------------------------------------
Dominican Today reports that the banana continues to sell the same
as at the beginning of last year in the grocery stores and has only
had a slight market decrease.

The unit of plantains in the grocery stores is between RD$30.00 and
RD$35.00, although this price will often depend on the size,
according to Dominican Today.

For consumers, the price of plantains is relatively high, mainly in
grocery stores and supermarkets, where most of them buy, the report
relays.

Even though it has a relatively affordable price in the market, the
colmados take advantage and sell them at high prices due to the
demand, the report notes.

                    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 December 4, 2023, the TCR-LA reported that Fitch Ratings has
affirmed Dominican Republic's Long-Term Foreign-Currency Issuer
Default Rating (IDR) at 'BB-' and revised the Outlook to Positive
from Stable. Fitch says the Positive Outlook reflects a trend
improvement in governance, and robust growth prospects that should
lead to continued gains in per capita income.  According to Fitch,
growth has decelerated in 2023, but it expects Dominican Republic
to recover to high levels during 2024-2025. External liquidity
metrics have improved in recent years, and foreign currency share
of government debt is on a downward path.

In August 2023, Moody's Investors Service 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.




=============
J A M A I C A
=============

JAMAICA: Inflation for December 2022 to December 2023 was 6.9%
--------------------------------------------------------------
RJR News reports that inflation for December 2022 to December 2023
was 6.9 per cent.  This was outside of the Bank of Jamaica's 4 to 6
per cent target, according to RJR News.

The performance brought inflation for January to December 2023 to
7.5 per cent, the report notes.

The Statistical Institute of Jamaica says the point-to-point
increase in the cost of goods and services up to December, was
linked to an 8.7 per cent rise in the cost of  'Food and
Non-Alcoholic Beverages,' the report relays..

Over the year, 'Transport' costs went up 10 point 6 per cent, while
'Restaurants and Accommodation Services' increased by 9.4 per cent,
the report discloses.

Compared with November 2023, the cost of goods and services rose
0.5 per cent in December, the report notes.

STATIN says this was mainly due to an upward movement of 2.5 per
cent, in the index for the 'Housing, Water, Electricity, Gas and
Other Fuels' division, the report adds.

                       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.

In October 2023, Moody's upgraded the Government of Jamaica's
long-term issuer and senior unsecured ratings to B1 from B2, and
senior unsecured shelf rating to (P)B1 from (P)B2. The outlook has
been changed to positive from stable.  The upgrade of Jamaica's
rating to B1 reflects the government's sustained commitment to
fiscal consolidation and debt reduction.  The positive outlook
reflects Moody's assessment that a continuation of the favorable
fiscal trajectory will further increase Jamaica's credit
resilience.

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.  

In March 2022, Fitch Ratings affirmed Jamaica's Long-Term Foreign
Currency Issuer Default Rating (IDR) at 'B+'. The Rating Outlook is
Stable.


JAMAICA: Reaches Staff-Level Agreement With IMF
-----------------------------------------------
Javaughn Keyes at RJR News reports that Jamaica is set to gain
access to about $255 million under the IMF's Resilience and
Sustainability Facility (RSF).

After the second review of the Precautionary and Liquidity Line
(PLL) and the RSF for which the country was approved last year, a
staff-level agreement was reached with the Jamaican authorities,
according to RJR News.

The International Monetary Fund completed its Article IV review for
2024.

The agreement is subject to approval by the IMF Executive Board,
expected to consider the reviews in February 2024.

The completion of the review will make the funds available, the
report discloses.

A team led by Esteban Vesperoni held meetings in Kingston and
carried out a virtual mission with the Jamaican authorities, the
report relays.

In commending Jamaica on its achievements, he said "Over the last
years, the country has successfully reduced public debt, anchored
inflation, and strengthened its external position," the report
discloses.

The IMF says Jamaica has made good progress in implementing its
policy agenda under the Precautionary and Liquidity Line and the
Resilience and Sustainability Facility, the report notes.

Both facilities were approved by the Executive Board in March 2023,
with a combined access of about US$1.732 billion, the report says.


Finance Minister Dr. Nigel Clarke said the latest review gives
credibility to the current economic policies.

"The IMF staff press release confirms that Jamaica's economy is on
firm footing and our economic programme is achieving its targets
and objectives. Jamaica has the lowest unemployment rate in our
history. We have experienced 10 consecutive quarters of economic
growth, the second longest stretch of quarterly economic growth
since we started measuring growth in 1997. Our debt is at a 25-year
low, for the first time in 30 years, we have recorded a current
account surplus and the foreign exchange reserves in our central
bank are at an all-time high," he boasted, the report adds.

                        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.

In October 2023, Moody's upgraded the Government of Jamaica's
long-term issuer and senior unsecured ratings to B1 from B2, and
senior unsecured shelf rating to (P)B1 from (P)B2. The outlook has
been changed to positive from stable.  The upgrade of Jamaica's
rating to B1 reflects the government's sustained commitment to
fiscal consolidation and debt reduction.  The positive outlook
reflects Moody's assessment that a continuation of the favorable
fiscal trajectory will further increase Jamaica's credit
resilience.

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.  

In March 2022, Fitch Ratings affirmed Jamaica's Long-Term Foreign
Currency Issuer Default Rating (IDR) at 'B+'. The Rating Outlook is
Stable.




=================
N I C A R A G U A
=================

NICARAGUA: Economy Remains Resilient in Face of Multiple Shocks
---------------------------------------------------------------
The Executive Board of the International Monetary Fund (IMF)
concluded the Article IV consultation1 with Nicaragua and
considered and endorsed the staff appraisal without a meeting.

Nicaragua's economy has remained resilient in the face of multiple
shocks, supported by appropriate economic policies, substantial
buffers, and multilateral support. After a very strong rebound in
2021, the economy grew at a steady pace since 2022 and is expected
to grow by 4 percent in 2023. Inflation is declining, and the
central government is maintaining a small surplus and healthy
government deposits. Remittances are projected to reach about 28
percent of GDP at end-2023, double their end-2021 level, and
supporting a turnaround in the current account balance to a surplus
of about 4 percent of GDP in 2023. The foreign exchange inflows and
prudent macroeconomic policies, contributed to a rapid accumulation
of gross international reserves to US

$5 billion by end-October (or about 6 months of imports, excluding
maquila).

Economic growth is expected to continue over the medium-term,
albeit at a slower rate than average. In 2024 and over the medium
term, real GDP is projected to grow by about 3½ percent, supported
primarily by private consumption. These projected growth rates
remain below historical averages (2000-17) of 3.9 percent, given
the cautious recovery in investment, limited approved new official
financing lower and lower labor contribution to growth due to
recent emigration. The external and fiscal positions are assessed
to be sustainable under the baseline scenario, given the current
policy mix and financing plans.

This positive outlook is accompanied by balanced risks. On the
upside, real GDP growth might be higher than projected due to a
more sustained recovery in domestic demand, including investment,
and stronger remittances than projected, especially in the near
term. On the downside, a deterioration of the terms of trade, or a
more severe global downturn than currently incorporated into the
baseline scenario could result in lower exports and remittances
growth. Economic activity and social outcomes could be vulnerable
to natural disasters, given Nicaragua's high exposure and economic
dependence on climate sensitive sectors. In the political
environment, stricter and wider international sanctions, could
negatively affect the economic outlook.

Executive Board Assessment2
In concluding the 2023 Article IV consultation with Nicaragua,
Executive Directors endorsed staff's appraisal, as follows:

Nicaragua's economy has remained resilient in the face of multiple
shocks, supported by appropriate macroeconomic policies,
substantial buffers, and multilateral support. After a very strong
rebound in 2021, the economy has continued to grow at a steady pace
(about 4 percent in 2023).

Inflation is declining, and the central government has maintained a
small fiscal surplus and healthy government deposits. Remittances,
which doubled since end-2021 are reaching about 28 percent of GDP
at end-2023, supporting a turnaround in the current account balance
to a projected surplus of about 4 percent of GDP in 2023. The
foreign exchange inflows from remittances, sustained FDI, and
exports, along with prudent macroeconomic policies, contributed to
a rapid accumulation of gross international reserves to US$5
billion by end-October (or about 6 months of imports, excluding
maquila). The policy mix was consistent and adequate in 2023, with
tight fiscal and monetary policies and a continued reserve
accumulation, supporting a balanced growth path. The external
position at end-2022 was assessed as stronger than the level
implied by medium-term fundamentals and desired policies. Nicaragua
is assessed at moderate overall risk of external and public debt
distress.

Economic growth is expected to continue in 2024 and over the medium
term, albeit at a slower rate than historical averages. In 2024 and
over the medium term, real GDP is projected to grow by about 3½
percent, supported primarily by private consumption, below
historical averages (2000-17) of 3.9 percent, given the cautious
recovery in investment, limited approved new official financing,
and lower labor contribution to growth due to recent emigration.

This positive outlook is accompanied by balanced risks. On the
upside, real GDP growth could be higher than projected due to a
more sustained recovery in domestic demand, including investment,
and stronger remittances than projected, especially in the near
term. On the downside, a deterioration of the terms of trade, or a
more severe global downturn than currently incorporated into the
baseline scenario could result in lower exports and remittances
growth. Economic activity and social outcomes could be vulnerable
to natural disasters, given Nicaragua's high exposure an economic
dependence on climate-sensitive sectors. Stricter and wider
international sanctions could also negatively affect the economic
outlook.

Staff supported the authorities' plans to maintain prudent fiscal
policy. Staff supported the multi-year fiscal consolidation plans
and the authorities' efforts to address the structural imbalances
in the social security system (pensions), and enhance buffers given
the country's vulnerability to natural disasters. Staff recommended
more ambitious fiscal efforts, to entrench fiscal sustainability,
build fiscal buffers and create space for higher social and capital
spending in the medium term, to reduce poverty, and support growth,
through tax administration measures, better targeting subsidies and
reallocating current expenditures.

Staff recommended that monetary policy should remain geared towards
supporting the exchange rate regime, while safeguarding price
stability. Staff supported the authorities' decision to continue
adjusting the rate of crawl of the exchange rate and emphasized the
need to remain vigilant and adjust monetary and exchange rate
policies as needed to support the exchange rate regime, while
safeguarding price stability. Staff assessed the fiscal and
monetary policy stances as appropriate, and the policy mix
supportive of growth. Staff emphasized that continued reserve
accumulation over the medium-term is essential to maintain the
exchange rate regime.

While banks are well-capitalized and liquid, the resilience of the
financial sector could be further enhanced. Staff recommended
increasing the level of provisions for distressed assets and
supported the authorities' efforts to ensure that sound lending
practices are preserved by activating countercyclical buffers as
needed and increase the minimum payments for credit cards. Staff
encouraged the authorities to align the crisis preparedness
framework with best international practices, obtain complete data
for credit and savings cooperatives, and expand their oversight if
needed. Staff also recommended continuing to monitor FX risks and
strengthen FX risk mitigation measures.

Staff welcomed the authorities' efforts to sustain medium-term
growth through continued investment in infrastructure and human
capital and recommended implementing policies to raise labor force
participation and enhance the business climate through
strengthening government institutions and frameworks in the areas
of contract enforcement, protection of property rights, and
resolution of insolvencies.

Staff recommended improving the effective application of the
AML/CFT framework. In particular, staff recommended the proper
application of the AML/CFT framework, in line with the FATF
recommendations, to ensure that Nicaragua continues to fare well in
the next evaluation round after being removed from the "gray list"
in 2022.

The authorities have taken steps to enhance governance and
anti-corruption frameworks, yet major efforts are needed to
strengthen these frameworks and their effective application,
especially the rule of law. Following on the recent progress in the
implementation of the Law of Access to public Information and
collecting asset declarations of politically exposed persons
through the digital platform, staff recommended: (i) publishing the
asset declarations of politically exposed persons; (ii)
implementing risk-based assessments of these declarations; and
(iii) enacting whistleblower protection regulations. To ensure that
the anti-corruption and governance frameworks are effective, and
property rights, contract enforcement, and investments are
protected properly, staff recommended that the government
strengthens the rule of law by guaranteeing adequate, effective,
and fair administrative and judicial recourse to legal proceedings,
especially those which have consequences for property rights.

Staff commended the authorities' efforts to improve fiscal
transparency and urges that these efforts be sustained through
continuing publication of all audit reports regarding the use of
pandemic- related funds, promptly publishing the annual financial
statements of the central government and their audit reports, and
expanding the publication of SOEs financial statements.

Staff recommended continuing to improve data quality and working
further to enhance institutional capacity in fiscal, monetary,
financial, and statistical issues.




===========================
V I R G I N   I S L A N D S
===========================

IDC OVERSEAS: S&P Affirms 'B/B' ICRs, Outlook Stable
----------------------------------------------------
S&P Global Ratings affirmed its 'B/B' long- and short-term issuer
credit ratings on IDC Overseas Ltd. (IDC). The outlook remains
stable.

The company is widening gradually its product offering in the
private equity by constituting new funds and by increasing its
participation in various venture capital funds. In our view, this
will bolster IDC's growth by double digits during the following
couple of years. Moreover, the company will continue widening its
social impact, infrastructure, capital markets and real estate
funds in order to diversify its business. Nevertheless, IDC's
assets under management (AUM) remain mostly in venture capital and
private equity funds, which S&P expects to continue representing
about 75% of its total AUMs. Therefore, S&P considers the company's
market share and brand recognition will remain limited.

The heavy dependence on private equity and venture capital, along
with the variable timing and amount of carried interest coming from
the realized projects and funds, increases volatility in
profitability. S&P said, "For instance, during 2023, IDC received
about $16 million of carried interest from its Industrial Assets
Fund, but we don't expect any for 2024. Furthermore, challenging
macroeconomic conditions in the countries where IDC operates could
hamper the appetite for new investments, delaying the consolidation
of some projects. We believe the latter could jeopardize the
company's revenue prospects, adding uncertainty over its results."

The company's maturity profile strengthened during 2023 after its
first issuances totaling $100 million, including refinancing of
short-term notes through a three-year bond. Moreover, IDC is making
efforts to continue diversifying its capital structure through
additional funding sources such as credit facilities. However, this
structure compares unfavorably with those of global peers, limiting
IDC's funding profile.

S&P said, "As a result of last year's issuances, IDC's adjusted
leverage--measured by debt to adjusted EBITDA--increased to about
6x. In our calculation of leverage, we haircut net realized carried
interest, performance fees, and investment income by 50% of the
five-year historical average. Therefore, we forecast the company
will continue to post debt to adjusted EBITDA above 6x for the next
12 months and decrease gradually as adjusted EBITDA rises. As a
result, we revised our assessment of IDC's financial risk profile
to highly leveraged from aggressive. We believe that our current
assessments on IDC's business risk and financial risk profiles are
fully capturing the company's vulnerabilities in relation to
industry peers. Therefore, we're removing the unfavorable
adjustment from our comparable rating analysis."




===============
X X X X X X X X
===============

LATAM: IDB Governors to Discuss Challenges, Opportunities
---------------------------------------------------------
RJR News reports that development challenges and opportunities in
Latin America and the Caribbean, ranging from tackling climate
change to ensuring equitable and sustainable growth, will be among
the issues to be discussed when the Inter-American Development Bank
and IDB Invest hold their annual board of governors meeting in the
Dominican Republic in March.

The IDB says the March 6 to 10 board meetings are the top
decision-making bodies, comprising finance and economy ministers
and other leading officials from the LAC, according to RJR News.

The Governors will discuss ways the IDB Group, as the region's
leading source of development financing, knowledge, and research,
can increase its support for Latin America and the Caribbean amid
rising social demands, restricted fiscal space to meet those
demands, and the need to increase financing to transition to green
economies, the report notes.



                           *********


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
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Chapman, Editors.

Copyright 2024.  All rights reserved.  ISSN 1529-2746.

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