/raid1/www/Hosts/bankrupt/TCRLA_Public/240207.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
L A T I N A M E R I C A
Wednesday, February 7, 2024, Vol. 25, No. 28
Headlines
A R G E N T I N A
ARGENTINA: IMF Sharply Cuts Growth Forecast on Milei's Plan
ARGENTINA: Milei Wins IMF Approval for US$4.7-Billion Disbursement
ARGENTINA: Rob McEwen Seeks US$100MM for Copper Mine
B R A Z I L
BRAZIL: Central Bank Cuts Selic Rate to 11.25% in 1st 2024 Meeting
BRAZIL: Jobless Rate Falls to 7.4% in Late 2023
BRAZIL: Speeds Up $1 Billion Rescue for Troubled Airlines
D O M I N I C A N R E P U B L I C
DOMINICAN REPUBLIC: Fuel Prices Among Highest in Central America
M E X I C O
PETROLEOS MEXICANOS: $152.2MM Bank Debt Trades at 16% Discount
P U E R T O R I C O
ACADEMIA SANTA: Hires Wilber Davila Appraisal as Appraiser
- - - - -
=================
A R G E N T I N A
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ARGENTINA: IMF Sharply Cuts Growth Forecast on Milei's Plan
-----------------------------------------------------------
Maria Eloisa Capurro at Bloomberg News reports that the
International Monetary Fund (IMF) revised down its growth estimate
for Argentina, forecasting South America's second-largest economy
will shrink for two consecutive years as President Javier Milei
pushes for a "significant policy adjustment."
Argentina's gross domestic product will contract 2.8 percent this
year as inflation soars, following a 1.1 percent decline in 2023,
according to the IMF's latest estimates for the global economy
published, according to Bloomberg News. Back in October, the Fund
forecast 2.8 percent growth in 2024, Bloomberg News relays.
Since taking office in December, Milei has eliminated government
subsidies and price controls, announced a 54 percent currency
devaluation and put forward plans to shore up public accounts,
Bloomberg News notes. Thousands swarmed the capital, Buenos Aires,
after unions called for a 12-hour strike to protest his austerity
measures, Bloomberg News says.
The government's push to cut down on spending is "absolutely
needed" to rein in inflation, which the IMF estimates will slow
down to near 150 percent a year by December, Bloomberg News
discloses.
"It's a very sizeable fiscal adjustment," IMF chief economist
Pierre-Olivier Gourinchas said at a press conference in
Johannesburg, South Africa, Bloomberg News relays. "The root cause
for inflation is that there's been quite a bit of monetary
financing, so it's very important for government accounts to be
consolidated and stabilised," he added.
Still, Milei's plan to eliminate the primary budget deficit this
year is proving difficult to implement, Bloomberg News notes. In a
bid to get his package of key reforms approved in Congress, he gave
up on hundreds of proposed measures, including plans to increase
taxes on exports and to privatise oil company YPF, Bloomberg News
relays.
Analysts in the most recent survey by Argentina's central bank
expect the economy to shrink 2.6 percent in 2024, Bloomberg News
discloses. Back in November, the Institute of International
Finance projected a 1.3 percent contraction this year, Bloomberg
News notes.
With inflation accelerating in the near term as relative prices
realign, Argentina's decline will also drag on Latin America's
growth during 2024, Bloomberg News says. IMF economists see the
region growing just 1.9 percent, down from last year's 2.5 percent
pace. Argentina could revert to growth in 2025, with the fund
estimating a five percent expansion, Bloomberg News adds.
About Argentina
Argentina is a country located mostly in the southern half of South
America. Its capital is Buenos Aires. Javier Milei is the current
president of Argentina after winning the November 19, 2023 general
election. He succeeded Alberto Angel Fernandez in the position.
Argentina has the third largest economy in Latin America. The
country's economy is an upper middle-income economy for fiscal year
2019, according to the World Bank. Historically, however, its
economic performance has been very uneven, with high economic
growth alternating with severe recessions, income maldistribution
and in the recent decades, increasing poverty.
The IMF's executive board completed on August 23, 2023, the fifth
and six reviews of Argentina's 30-month Extended Fund Facility
(EFF), and approved a US$7.5-billion disbursement to Argentina as
part of the larger program, which refinances payments Argentina
owes the institution from a previous bailout that failed to
stabilize the economy in 2018. Argentina would receive another IMF
disbursement in November of about US$2.75 billion pending another
staff-level agreement and board approval.
S&P Global Ratings, on June 13, 2023, raised its local currency
sovereign credit ratings on Argentina to 'CCC-/C' from 'SD/SD' and
0its national scale rating to 'raCCC+' from 'SD'. S&P also affirmed
its 'CCC-/C' foreign currency sovereign credit ratings on
Argentina. The outlook on the long-term ratings is negative. S&P's
'CCC-' transfer and convertibility assessment is unchanged. None of
its rated bond issues are affected.
S&P said the negative outlook on the long-term ratings is based on
the risks surrounding pronounced economic imbalances and policy
uncertainties before and after the 2023 national elections.
Divisions within the government coalition, and infighting among the
opposition, constrain the sovereign's ability to implement timely
changes in economic policy.
Fitch Ratings also upgraded on June 13, 2023, Argentina's Long-Term
Foreign Currency (FC) Issuer Default Rating (IDR) to 'CC' from
'C'and affirmed the Long-Term Local Currency (LC) IDR at 'CCC-'.
Fitch typically does not assign Outlooks to sovereigns with a
rating of 'CCC+' or below.
The upgrade of the FC IDR reflects that Fitch no longer deems a
default-like process to have begun, as the authorities have not
signaled a clear intention to follow through with an intra-public
debt swap announced in March. The new 'CC' rating signals a default
event of some sort appears probable in the coming years, regardless
of the outcome of upcoming elections. The affirmation of the LC IDR
at 'CCC-' follows the peso debt swap in June that Fitch did not
deem to be a "distressed debt exchange" (DDE).
Moody's Investors Service, in September 2022, affirmed Argentina's
Ca foreign-currency and local-currency long-term issuer and senior
unsecured ratings. The outlook remains stable. The decision to
affirm the Ca ratings balances Argentina's limited market access,
weak governance, and history of recurrent debt restructurings with
recent efforts to marshal fiscal and monetary measures to start
addressing underlying macroeconomic imbalances in the context of
the IMF program that was approved in 2022, according to Moody's.
DBRS, Inc. confirmed Argentina's Long-Term Foreign Currency Issuer
Rating at CCC and downgraded its Long-Term Local Currency Issuer
Rating to CCC from CCC (high) on March 3, 2023.
ARGENTINA: Milei Wins IMF Approval for US$4.7-Billion Disbursement
------------------------------------------------------------------
The Executive Board of the International Monetary Fund (IMF)
completed the seventh review of the extended arrangement under the
Extended Fund Facility (EFF) for Argentina. The Board's decision
enables an immediate disbursement of around US$4.7 billion (or
SDR3.5 billion) to support the authorities' upfront policy efforts
and strong commitments to restore macroeconomic stability and help
Argentina meet its balance of payments needs. This brings total
disbursements under the arrangement to about US$ 40.6 billion [1].
In completing the review, the Executive Board assessed that key
program targets through end-December 2023 were missed by large
margins due to severe policy setbacks, requiring the approval of
waivers of non-observance. The Board approved waivers of
non-observance associated with the introduction of temporary
measures that gave rise to the introduction or intensification of
exchange restrictions and multiple currency practices. In addition,
program targets were modified, in line with the authorities'
initial actions and ambitious plans to bring the program back on
track, and restore macroeconomic stability while protecting the
most vulnerable. The Board also approved an extension of the
arrangement through December 31, 2024, along with some rephasing of
planned disbursements within the existing envelope of the program.
At the conclusion of the Executive Board's discussion, Ms.
Kristalina Georgieva, Managing Director and Chair made the
following statement:
"Following completion of the last reviews, Argentina's already
large imbalances and distortions grew more acute, and the program
went significantly off track, reflecting the inconsistent policies
of the previous government. Amidst this difficult
inheritance-elevated and rising inflation, depleted reserves, and
high poverty levels-the new administration is taking bold actions
to restore macroeconomic stability and begin to address
long-standing impediments to growth. These initial actions averted
a balance of payments crisis, although the path to stabilization
will be challenging.
"The agreed ambitious stabilization plan is centered on the
establishment of a strong fiscal anchor that ends all central bank
financing of the government. The achievement of a primary fiscal
surplus of about 2 percent of GDP this year will be underpinned by
a combination of temporary import-related taxes and the
strengthening of fuel taxes, alongside efforts to streamline energy
and transport subsidies, administrative costs, and lower-priority
discretionary spending. Social assistance is also being reinforced
to support the most vulnerable and safeguard the real value of
pensions. Over time, higher-quality fiscal measures are envisaged
to deliver structural improvements in revenue and spending and
secure consolidation and more equitable burden sharing.
"Following the exchange rate realignment, FX policy should continue
to secure reserve accumulation goals. Important steps are being
taken to address the large commercial debt overhang and create a
more transparent and rules-based system to import. In addition, the
authorities are committed to eliminate remaining distortive
exchange restrictions and multiple currency practices in the near
term, and to develop plans for gradually unwinding capital flow
management measures, as conditions permit.
"The monetary policy stance should evolve to support money demand
and disinflation while the monetary policy framework and operations
will be adjusted to strengthen its anchoring role. Further
strengthening the central bank's balance sheet remains a priority.
"Efforts are underway to correct large and extensive relative price
misalignments, reform the energy sector, and create a simpler,
rules-based, and market-oriented economy. Barriers to growth,
formal employment, and trade are being addressed, while a more
predictable regulatory framework is envisaged to boost investment
and unlock Argentina's energy and mining potential.
"Agile policymaking and contingency planning will be essential, and
further measures may be needed to secure program objectives and
durably restore stability. Clear communication and well-targeted
social assistance remain imperative, as well as continued efforts
to build social and political support for the program."
About Argentina
Argentina is a country located mostly in the southern half of South
America. Its capital is Buenos Aires. Javier Milei is the current
president of Argentina after winning the November 19, 2023 general
election. He succeeded Alberto Angel Fernandez in the position.
Argentina has the third largest economy in Latin America. The
country's economy is an upper middle-income economy for fiscal year
2019, according to the World Bank. Historically, however, its
economic performance has been very uneven, with high economic
growth alternating with severe recessions, income maldistribution
and in the recent decades, increasing poverty.
The IMF's executive board completed on August 23, 2023, the fifth
and six reviews of Argentina's 30-month Extended Fund Facility
(EFF), and approved a US$7.5-billion disbursement to Argentina as
part of the larger program, which refinances payments Argentina
owes the institution from a previous bailout that failed to
stabilize the economy in 2018. Argentina would receive another IMF
disbursement in November of about US$2.75 billion pending another
staff-level agreement and board approval.
S&P Global Ratings, on June 13, 2023, raised its local currency
sovereign credit ratings on Argentina to 'CCC-/C' from 'SD/SD' and
0its national scale rating to 'raCCC+' from 'SD'. S&P also affirmed
its 'CCC-/C' foreign currency sovereign credit ratings on
Argentina. The outlook on the long-term ratings is negative. S&P's
'CCC-' transfer and convertibility assessment is unchanged. None of
its rated bond issues are affected.
S&P said the negative outlook on the long-term ratings is based on
the risks surrounding pronounced economic imbalances and policy
uncertainties before and after the 2023 national elections.
Divisions within the government coalition, and infighting among the
opposition, constrain the sovereign's ability to implement timely
changes in economic policy.
Fitch Ratings also upgraded on June 13, 2023, Argentina's Long-Term
Foreign Currency (FC) Issuer Default Rating (IDR) to 'CC' from
'C'and affirmed the Long-Term Local Currency (LC) IDR at 'CCC-'.
Fitch typically does not assign Outlooks to sovereigns with a
rating of 'CCC+' or below.
The upgrade of the FC IDR reflects that Fitch no longer deems a
default-like process to have begun, as the authorities have not
signaled a clear intention to follow through with an intra-public
debt swap announced in March. The new 'CC' rating signals a default
event of some sort appears probable in the coming years, regardless
of the outcome of upcoming elections. The affirmation of the LC IDR
at 'CCC-' follows the peso debt swap in June that Fitch did not
deem to be a "distressed debt exchange" (DDE).
Moody's Investors Service, in September 2022, affirmed Argentina's
Ca foreign-currency and local-currency long-term issuer and senior
unsecured ratings. The outlook remains stable. The decision to
affirm the Ca ratings balances Argentina's limited market access,
weak governance, and history of recurrent debt restructurings with
recent efforts to marshal fiscal and monetary measures to start
addressing underlying macroeconomic imbalances in the context of
the IMF program that was approved in 2022, according to Moody's.
DBRS, Inc. confirmed Argentina's Long-Term Foreign Currency Issuer
Rating at CCC and downgraded its Long-Term Local Currency Issuer
Rating to CCC from CCC (high) on March 3, 2023.
ARGENTINA: Rob McEwen Seeks US$100MM for Copper Mine
----------------------------------------------------
James Attwood & Jonathan Gilbert at Bloomberg News report that
Canadian entrepreneur Rob McEwen is in talks to raise about US$100
million for a copper project in Argentina, at a time when miners
are betting that deregulation by the new government of Javier Milei
will boost prospects for the industry.
His closely-held firm, McEwen Copper Inc, is speaking with existing
holders - which include automaker Stellantis NV and a Rio Tinto
Group venture - as well as prospective new investors, he said in an
interview, according to Bloomberg News. The idea is to secure
fresh funds within six months for feasibility and engineering work.
Longer-term options include expanded partnering with a major mining
company such as Rio Tinto, Bloomberg News notes.
"We're socialising the concept," McEwen said, the report relays.
"Just getting in front of a lot of people who finance large
projects, not only for our immediate needs but for the longer
term," he added.
Bloomberg News discloses that the industry veteran who founded
Goldcorp Inc is hoping President Milei's efforts to free up
Argentina's tightly controlled economy will help unlock vast copper
deposits in San Juan province. That's where McEwen wants to build
the US$2.5-billion Los Azules mine that would start up toward the
end of the decade, when demand for the wiring metal is expected to
accelerate in the shift away from fossil fuels, Bloomberg News
relays.
Milei, a libertarian who took office on December 10, wants to cut
red tape as well as do away with customs and capital restrictions,
Bloomberg News discloses. If he can win over congressional
opposition, such changes would reduce risks for investors, who
remain optimistic yet cautious, McEwen said, Bloomberg News
relays. The challenge for Milei is to move swiftly because metal
markets are cyclical and financing windows can shut quickly, he
said.
Bloomberg News notes that Los Azules isn't waiting around for
change. It already has 21 drill rigs on site, and it's working on
a renewable-energy supply deal from YPF Luz and a leaching method
that would help it to be carbon neutral, Bloomberg News discloses.
It hopes to obtain an environmental permit this year, have a
feasibility study ready in early 2025 and do pre-construction work
from 2026, Michael Meding, who heads McEwen Copper, said in the
same interview, Bloomberg News relays.
McEwen's copper unit had planned to go public, but it's now
focusing on raising money privately since market conditions aren't
ripe for an IPO, McEwen said, Bloomberg News notes. He and Meding
recognised that the investment climate for mining generally is
tough, but said that tax incentives proposed for large Argentine
infrastructure projects in Milei's signature legislation could help
lure partners, Bloomberg News relays.
"We think that we would classify as a large-scale infrastructure
project and that would generate additional taxation stability,"
Meding said. "And that would be very helpful in future financing
discussions with the international community," he added.
About Argentina
Argentina is a country located mostly in the southern half of South
America. Its capital is Buenos Aires. Javier Milei is the current
president of Argentina after winning the November 19, 2023 general
election. He succeeded Alberto Angel Fernandez in the position.
Argentina has the third largest economy in Latin America. The
country's economy is an upper middle-income economy for fiscal year
2019, according to the World Bank. Historically, however, its
economic performance has been very uneven, with high economic
growth alternating with severe recessions, income maldistribution
and in the recent decades, increasing poverty.
The IMF's executive board completed on August 23, 2023, the fifth
and six reviews of Argentina's 30-month Extended Fund Facility
(EFF), and approved a US$7.5-billion disbursement to Argentina as
part of the larger program, which refinances payments Argentina
owes the institution from a previous bailout that failed to
stabilize the economy in 2018. Argentina would receive another IMF
disbursement in November of about US$2.75 billion pending another
staff-level agreement and board approval.
S&P Global Ratings, on June 13, 2023, raised its local currency
sovereign credit ratings on Argentina to 'CCC-/C' from 'SD/SD' and
0its national scale rating to 'raCCC+' from 'SD'. S&P also affirmed
its 'CCC-/C' foreign currency sovereign credit ratings on
Argentina. The outlook on the long-term ratings is negative. S&P's
'CCC-' transfer and convertibility assessment is unchanged. None of
its rated bond issues are affected.
S&P said the negative outlook on the long-term ratings is based on
the risks surrounding pronounced economic imbalances and policy
uncertainties before and after the 2023 national elections.
Divisions within the government coalition, and infighting among the
opposition, constrain the sovereign's ability to implement timely
changes in economic policy.
Fitch Ratings also upgraded on June 13, 2023, Argentina's Long-Term
Foreign Currency (FC) Issuer Default Rating (IDR) to 'CC' from
'C'and affirmed the Long-Term Local Currency (LC) IDR at 'CCC-'.
Fitch typically does not assign Outlooks to sovereigns with a
rating of 'CCC+' or below.
The upgrade of the FC IDR reflects that Fitch no longer deems a
default-like process to have begun, as the authorities have not
signaled a clear intention to follow through with an intra-public
debt swap announced in March. The new 'CC' rating signals a default
event of some sort appears probable in the coming years, regardless
of the outcome of upcoming elections. The affirmation of the LC IDR
at 'CCC-' follows the peso debt swap in June that Fitch did not
deem to be a "distressed debt exchange" (DDE).
Moody's Investors Service, in September 2022, affirmed Argentina's
Ca foreign-currency and local-currency long-term issuer and senior
unsecured ratings. The outlook remains stable. The decision to
affirm the Ca ratings balances Argentina's limited market access,
weak governance, and history of recurrent debt restructurings with
recent efforts to marshal fiscal and monetary measures to start
addressing underlying macroeconomic imbalances in the context of
the IMF program that was approved in 2022, according to Moody's.
DBRS, Inc. confirmed Argentina's Long-Term Foreign Currency Issuer
Rating at CCC and downgraded its Long-Term Local Currency Issuer
Rating to CCC from CCC (high) on March 3, 2023.
===========
B R A Z I L
===========
BRAZIL: Central Bank Cuts Selic Rate to 11.25% in 1st 2024 Meeting
------------------------------------------------------------------
Richard Mann at Rio Times Online reports that Brazil's Central Bank
cut its main interest rate, the Selic, by 0.5%. The new rate is
11.25% per year, according to Rio Times Online.
This level is the lowest since March 2022, the report notes. At
that time, the rate was 10.75%, the report relays. This change
matters because it affects loans and savings, the report says.
Lower rates can boost spending and investment, the report notes.
The Monetary Policy Committee Copom, with eight directors and the
president, Roberto Campos Neto, agreed on this, 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.
S&P Global Ratings raised on Dec. 19, 2023, its long-term global
scale ratings on Brazil to 'BB' from 'BB-'. The outlook on the
long-term ratings is stable. S&P affirmed Brazil's global scale
short-term ratings at 'B' and its national scale long-term rating
at 'brAAA'. S&P also raised the transfer and convertibility
assessment on the country to 'BBB-' from 'BB+'. S&P said, "The
stable outlook reflects our expectation that Brazil will maintain a
strong external position, thanks to strong commodity output and
limited external financing needs. We also believe Brazil's
institutional framework can sustain stable and pragmatic
policymaking based on extensive checks and balances across the
executive, legislative, and judicial branches of government. We
expect a very gradual fiscal correction but anticipate fiscal
deficits will remain large."
Fitch Ratings affirmed on Dec. 15, 2023, Brazil's Long-Term
Foreign-Currency Issuer Default Rating (IDR) at 'BB' with a Stable
Outlook. Fitch said Brazil's ratings are supported by its large and
diverse economy, high per-capita income, and deep domestic markets
and a large cash cushion that support the sovereign's financing
flexibility and its high local-currency debt share. Strong external
finances support resilience to shocks, underpinned by a flexible
exchange rate, robust international reserves and a sovereign net
external creditor position. The ratings are constrained by weak
economic growth potential, relatively low governance scores, high
and rising government debt/GDP, and budgetary rigidities. A new
fiscal framework introduced this year aims to anchor a gradual
consolidation process and address these fiscal weaknesses, but its
effectiveness is increasingly unclear.
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: Jobless Rate Falls to 7.4% in Late 2023
-----------------------------------------------
Rio Times Online reports that the Brazilian jobless rate dropped to
7.4% in late 2023, the lowest since early 2015, as reported by IBGE
on January 31, 2024.
This decrease is significant, according to Rio Times Online. It
shows improvement in the job market since 2014, the report notes.
From the third to the fourth quarter of 2023, the unemployment rate
dropped by 0.3 percentage points, the report says.
Over one year, it went down by 0.5 percentage points from 7.9%, the
report notes.
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: Speeds Up $1 Billion Rescue for Troubled Airlines
---------------------------------------------------------
globalinsolvency.com, citing Bloomberg News, reports that Brazil's
government is working on an emergency plan to help alleviate
financial pressures on airlines and address the high cost of
consumer litigation and a lack of competition.
The government is proposing using public funds as collateral for
loans to the carriers from the country's development bank, known as
BNDES, the person said, according to globalinsolvency.com. It is
expected to be issued it as a provisional measure in the coming
weeks, allowing the changes to then take effect immediately, the
report relays. The amount of aid is still being discussed, but
would not exceed 5 billion reais ($1 billion), the person said, the
report discloses.
While that is far from what companies need, it would help them to
continue operating normally while they restructure debts, the
report notes.
The government has been mulling a bailout for the industry for
months, the report discloses. The plan took on added urgency after
Gol Linhas Aereas Inteligentes SA filed for chapter 11 bankruptcy
protection on January 25, the report says. Brazilian airlines have
been struggling since the pandemic, and issues have been building
amid rising fuel prices, delays in the production of new aircraft
and currency volatility, the report notes. While demand has
rebounded even as companies jack up prices - fares in Brazil have
surged nearly 50% over the past year - carriers have also had
problems with costs to handle frequent lawsuits from consumers, the
report relays. That has kept new airlines from coming into the
market, 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.
S&P Global Ratings raised on Dec. 19, 2023, its long-term global
scale ratings on Brazil to 'BB' from 'BB-'. The outlook on the
long-term ratings is stable. S&P affirmed Brazil's global scale
short-term ratings at 'B' and its national scale long-term rating
at 'brAAA'. S&P also raised the transfer and convertibility
assessment on the country to 'BBB-' from 'BB+'. S&P said, "The
stable outlook reflects our expectation that Brazil will maintain a
strong external position, thanks to strong commodity output and
limited external financing needs. We also believe Brazil's
institutional framework can sustain stable and pragmatic
policymaking based on extensive checks and balances across the
executive, legislative, and judicial branches of government. We
expect a very gradual fiscal correction but anticipate fiscal
deficits will remain large."
Fitch Ratings affirmed on Dec. 15, 2023, Brazil's Long-Term
Foreign-Currency Issuer Default Rating (IDR) at 'BB' with a Stable
Outlook. Fitch said Brazil's ratings are supported by its large and
diverse economy, high per-capita income, and deep domestic markets
and a large cash cushion that support the sovereign's financing
flexibility and its high local-currency debt share. Strong external
finances support resilience to shocks, underpinned by a flexible
exchange rate, robust international reserves and a sovereign net
external creditor position. The ratings are constrained by weak
economic growth potential, relatively low governance scores, high
and rising government debt/GDP, and budgetary rigidities. A new
fiscal framework introduced this year aims to anchor a gradual
consolidation process and address these fiscal weaknesses, but its
effectiveness is increasingly unclear.
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).
===================================
D O M I N I C A N R E P U B L I C
===================================
DOMINICAN REPUBLIC: Fuel Prices Among Highest in Central America
----------------------------------------------------------------
Dominican Today reports that the Dominican Republic is the third
country with the most expensive fuel prices compared to similar
economies in Central America, the Regional Center for Sustainable
Economic Strategies (CREES) noted in an article.
The report notes that with the prices of the two types of gasoline
and optimum diesel, the country exceeds the Central American
average; it details and indicates that the Dominican Republic is
only surpassed by Costa Rica and Nicaragua in the price of fuels.
CREES explains that despite the prices paid by the public, which
include the decrease due to the subsidy that is in place in the
country, even after considering the adjustments, the prices of
premium gasoline, regular gasoline, and Optimum Gasoil exceed the
regional average by 15.3%, 14.2%, and 3.6%, respectively, the
report relays.
In explaining the high price of fuels, CREES specifies that the
high taxes on fuels and the profit margins established by law are
the main factors behind this reality, the report discloses.
CREES indicates that, for example, for the week analyzed, January
22, 2024, taxes for premium gasoline represented 33.3% of the sale
price, which places the Dominican Republic as the country in the
region with the highest taxes for this type of gasoline, the report
relays.
It is recommended that the tax reform proposal presented by CREES
could represent a step towards a more balanced and favorable tax
structure for Dominican society, the report notes.
"This important tax transformation would contribute to reduce
transportation costs, in addition to increasing the disposable
income of citizens, the report relays. In this context, there is a
need to promote policies that encourage efficiency, competition and
innovation in the commercialization and production of fuels," it
states, 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 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.
===========
M E X I C O
===========
PETROLEOS MEXICANOS: $152.2MM Bank Debt Trades at 16% Discount
--------------------------------------------------------------
Participations in a syndicated loan under which Petroleos Mexicanos
is a borrower were trading in the secondary market around 83.6
cents-on-the-dollar during the week ended Friday, February 2, 2024,
according to Bloomberg's Evaluated Pricing service data.
The $152.2 million facility is a Term loan that is scheduled to
mature on January 28, 2031. The amount is fully drawn and
outstanding.
Petroleos Mexicanos operates as an oil and gas exploration and
production services. The Company offers pipeline carriage,
petrochemical distriutor and shipping centers, logistics, and fuel
commercialization services. Petroleos Mexicanos serves customers in
Mexico.
=====================
P U E R T O R I C O
=====================
ACADEMIA SANTA: Hires Wilber Davila Appraisal as Appraiser
----------------------------------------------------------
Academia Santa Teresita De Naranjito, Inc. seeks approval from the
U.S. Bankruptcy Court for the District of Puerto Rico to employ
Wilber Davila Appraisal & Consultant PSC as appraiser.
The firm will provide appraisal services to the Debtor’s
real
property located at Cedro Arriba Ward, Road 152 KM 7.6 INT 809,
Naranjito, PR.
The firm will be paid a fee of $3,500, split into a $1,750 upfront
payment, and the rest upon report completion.
As disclosed in a court filing that the firm is a "disinterested
person" as the term is defined in Section 101(14) of the
Bankruptcy
Code.
The firm can be reached at:
Wilber Davila Rodriguez
Wilber Davila Appraisal & Consultant PSC
Q-10 Condominio Villa de Playa 2
Dorado, PR 00646
Tel: (787) 638-6536
Email: wdavila@lcdappraisal.com
About Academia Santa Teresita De Naranjito, Inc.
Academia Santa Teresita De Naranjito, Inc., filed a Chapter 11
bankruptcy petition (Bankr. D.P.R. Case No. 23-03352) on October
17, 2023, disclosing under $1 million in both assets and
liabilities.
The Debtor is represented by Licenciado Carlos Alberto Ruiz, LLC.
*********
S U B S C R I P T I O N I N F O R M A T I O N
Troubled Company Reporter-Latin America is a daily newsletter
co-published by Bankruptcy Creditors' Service, Inc., Fairless
Hills, Pennsylvania, USA, and Beard Group, Inc., Washington, D.C.,
USA, Marites O. Claro, Joy A. Agravante, Rousel Elaine T.
Fernandez, Julie Anne L. Toledo, Ivy B. Magdadaro, and Peter A.
Chapman, Editors.
Copyright 2024. All rights reserved. ISSN 1529-2746.
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