/raid1/www/Hosts/bankrupt/TCRLA_Public/240425.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
L A T I N A M E R I C A
Thursday, April 25, 2024, Vol. 25, No. 84
Headlines
A R G E N T I N A
ARGENTINA: Inflation Falling 'Faster Than Expected,' IMF Says
B R A Z I L
BRAZIL: Eyes Argentine Gas Amid Regional Collaboration
C O L O M B I A
COLOMBIA TELECOMUNICACIONES: S&P Ups ICR to 'B+', Outlook Positive
COLOMBIA: Top Central Banker Signals Rate Cuts But No Surprises
C O S T A R I C A
BANCO INTERNACIONAL: Moody's Hikes Long Term Deposit Rating to Ba3
D O M I N I C A N R E P U B L I C
DOMINICAN REPUBLIC: Use of Checks at Banks Fell by Half in a Decade
J A M A I C A
JAMAICA: BOJ Welcomes Reduction in Inflation
JAMAICA: Level of Remittance Has Hit a Plateau, Anderson Says
M E X I C O
OPERADORA DE SERVICIOS: Moody's Cuts Issuer Ratings to Caa3
P U E R T O R I C O
EXPRESS INC: Case Summary & 30 Largest Unsecured Creditors
TRADITION FRANCAISE: Seeks to Hire Tamarez CPA as Accountant
T R I N I D A D A N D T O B A G O
TRINIDAD & TOBAGO: Not Immune to Venezuela-US Dynamics
U R U G U A Y
SANCOR SEGUROS: Fitch Ups LT IFS Rating to 'BB-', Outlook Stable
- - - - -
=================
A R G E N T I N A
=================
ARGENTINA: Inflation Falling 'Faster Than Expected,' IMF Says
-------------------------------------------------------------
Buenos Aires Times reports Argentina's inflation "is coming down a
little faster than initially expected," International Monetary Fund
(IMF) managing director Kristalina Georgieva said.
The remarks were the latest in a string of IMF praise for President
Javier Milei's government in recent weeks, according to Buenos
Aires Times. They arrived hours before Economy Minister Luis
Caputo met with Georgieva's deputy, Gita Gopinath, in Washington
for talks on Argentina's US$44.5-billion credit program, the report
notes.
The multilateral lender has been vocal in its support for the new
government since the libertarian leader's arrival to office last
December, the report relays.
The IMF still expects inflation to exceed 150 percent this year,
though it forecasts a considerable slowing in 2025, the report
discloses.
Despite high year-on-year inflation, price increases moderated for
a third consecutive month in Argentina in March, reaching 11
percent, according to data from the INDEC national statistics
bureau, the report relays.
Though many citizens are struggling to make ends meet, Georgieva
seems satisfied with Milei's fiscal adjustment, the report notes.
"Argentina, a country that has long been perceived as a laggard
from the point of view of reforms, is now moving very quickly in
adjusting fiscal spending, gaining the capacity of private
investment," she said during a press conference in Washington, the
report relays.
Nevertheless, both the IMF and the World Bank have warned the Milei
government not to leave "the most vulnerable" behind, the report
says. More than half of the population lives in poverty and social
unrest is growing in response to fierce austerity and a wave of
public sector lay-offs, the report relays.
The remarks were delivered prior to Caputo's meeting with Gopinath,
the IMF's deputy managing director Gita Gopinath for talks. The
"wide-ranging conversation," as an Argentine diplomatic source put
it, involved the discussion of Argentina's economic targets for the
first quarter, the report discloses.
The goal of the Argentine delegation, which includes Central Bank
Governor Santiago Bausili, is to convince the IMF and the US
Treasury to extend its current US$44.5-billion credit program, so
that the country can access fresh dollars to accelerate its exit
from capital controls, the report relays. Milei has previously
said that Argentina needs to raise around US$15 billion to
facilitate the move, the report notes.
Initial reports described the 30-minute encounter between Caputo
and Gopinath as relaxed and good, but sources played down
expectations that the IMF will dish out fresh funds to Argentina to
increase Central Bank reserves and speed its exit from currency
controls, the report relays.
IMF spokespersons said that idea was "premature," while Argentine
officials said the issue had been parked for future discussions,
the report notes.
Earlier, IMF economists forecast that Argentina's economy would
contract by 2.8 percent this year, before returning to growth in
2025, the report discloses.
As for Latin America in general, Georgieva applauds the fact that
countries have put their policies in order, "which have allowed
them to reduce inflation faster" than elsewhere, the report 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 March 15, 2024, raised its local currency
sovereign credit ratings on Argentina to 'CCC/C' from 'SD/SD' and
its national scale rating to 'raB+' from 'SD'. S&P also raised its
long-term foreign currency sovereign credit rating to 'CCC' from
'CCC-' and affirmed its 'C' short-term foreign currency rating. The
outlook on the long-term ratings is stable. In addition, S&P
revised its transfer and convertibility assessment to 'CCC' from
'CCC-'.
S&P said the stable outlook on the long-term ratings balances the
risks posed by pronounced economic imbalances and policy
uncertainties with the favorable change in near-term debt service
obligations. S&P also expect no further debt exchanges that it
would likely consider to be distressed.
Fitch Ratings 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: Eyes Argentine Gas Amid Regional Collaboration
------------------------------------------------------
Juan Martinez at Rio Times Online reports that Brazil plans to
deepen its energy ties with Argentina, aiming to import three
million cubic meters of natural gas daily from Vaca Muerta.
Located in southern Argentina, Vaca Muerta is the world's
second-largest reserve of unconventional oil and gas, making it a
key regional energy player, according to Rio Times Online.
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).
===============
C O L O M B I A
===============
COLOMBIA TELECOMUNICACIONES: S&P Ups ICR to 'B+', Outlook Positive
------------------------------------------------------------------
S&P Global Ratings raised its issuer credit and issue-level ratings
on Colombia Telecomunicaciones S.A. E.S.P. (Coltel) to 'B+' from
'B' and removed the ratings from CreditWatch with negative
implications, where S&P placed them on Dec. 18, 2023.
Following its Dec. 18, 2023, rating action on Coltel, S&P's
removing its ratings from CreditWatch negative and revising o
assessment of the company's liquidity to a stronger category. This
is mainly based on the proposed refinancings that would allow the
company to extend its short-term debt maturity schedule for at
least the next 12-15 months.
Coltel plans to refinance COP565 billion in bank loans (out of
COP815 billion maturing during 2024) through the following:
-- The COP400 billion bank loan with a bullet maturity in 2027;
and
-- The COP165 billion bank loan with a bullet maturity in 2029.
The company also plans to refinance COP775 billion in bank loans
(out of the COP1.1 trillion maturing during the first quarter of
2025) through:
-- The COP500 billion sustainability bank loan with a bullet
maturity in 2027; and
-- The COP275 billion alternative bank loan with a bullet maturity
in 2026.
S&P said, "For another upgrade to occur, we would like to see a
continuity in leverage metrics for the next 12-24 months, in line
with the expected operating cost efficiencies and consistent
revenue generation. Excluding nonoperating asset sales, Coltel's
revenue increased by 2% to COP7.1 trillion during 2023 from COP6.9
trillion in 2022, while EBITDA remained flat year over year at
COP1.5 trillion. On the other hand, adjusted debt rose 7.8% to
COP5.6 trillion in 2023 from COP5.2 trillion in 2022, primarily due
to higher lease obligations and lower accessible cash. As a result,
adjusted debt to EBITDA climbed to 3.7x by the end of 2023 from
3.4x in 2022, while FOCF to debt weakened to about 7.2% from 22.7%.
Our base-case scenario assumes that the leverage metric will drop
slightly below 3x by 2025, depending on Coltel's ability to
strengthen revenue, profitability, as well as cash balance. We
don't expect substantial debt reduction, aside from lease payments,
for the next 24 months.
"Our negative comparable rating analysis assessment continues to
incorporate our view that the company's financial, business and
liquidity profiles are at the lower end of the current scoring. We
will continue to evaluate the company's ability to strengthen
leverage metric, market position, and cash generation.
"Coltel failed to deliver expected EBITDA, debt reduction, and
stronger cash position for the past two years. According to our
methodology, if the company's results continue to deviate from our
expectations, we could revise our financial risk profile assessment
to a weaker category.
"The company refrains from aggressively increasing prices in order
not to lose market share, causing revenue growth to slow. Moreover,
even though Coltel shifted its strategy after divesting its fiber
assets, EBITDA margins remained at 21% and Return on Capital close
to 3%, below the industry average. We could revise our assessment
of Coltel's business risk profile to a lower category stemming from
weaker operating efficiencies if the company is unable to increase
sharply its scale and/or lower operating costs.
"The positive outlook reflects our view that Coltel has shown
stronger metrics than our previous expectations. However, we would
need to see a continuity and consistency of cash generation through
operations (excluding extraordinary asset sales and others) for us
to revise our assessment of the Coltel's financial risk profile to
a stronger category. In order for us to maintain the current
business risk profile assessment, we expect the company to continue
focusing on strengthening market share and increasing subscriber
base, allowing for higher absorption of operating costs, while also
reducing capital expenditure (capex) for fiber deployment. For the
next 12-18 months, we expect the company to post debt to EBITDA
close to 3x and FOCF to debt of about 10%."
S&P could revise the outlook back to stable and/or downgrade Coltel
in the next 12 months for the following reasons:
-- Liquidity pressures rise from short-term debt maturities, cash
shortfalls, and/or higher-than-expected cash expenses, leading the
company to rely on higher debt or refinancings, which could suggest
weaker risk management and/or unsustainable debt; or
-- The company fails to strengthen operating cash flow, raising
debt to EBITDA toward 4x, while FOCF to debt remains below 10%; or
-- The company deviates from the current projected scenario,
suggesting a weaker business risk profile.
S&P could upgrade Coltel in the next 12-18 months if it does the
following:
-- Maintain debt to EBITDA close to 3x, while strengthening FOCF
to debt above 10%;
-- Posts higher-than-expected operating revenue that suggests a
favorable trend in business dynamics; and
-- Demonstrates business efficiencies through consistently higher
EBITDA, reduces volatility in cash flow, and covers capex and
working capital needs without requiring additional debt and/or
reducing cash balance.
COLOMBIA: Top Central Banker Signals Rate Cuts But No Surprises
---------------------------------------------------------------
Bloomberg News reports that Colombia is trying to cut interest
rates at a pace that won't surprise markets, trigger destabilizing
capital outflows or jeopardize the aim of hitting the inflation
target range by mid-2025, the head of the central bank said.
The fastest consumer price rises among peers, and above-target
inflation expectations are "elements of concern" that call for
prudence from policymakers, Governor Leonardo Villar said,
according to the report.
But if the inflation outlook brightens the bank might accelerate
the pace of monetary easing, the report relays.
"If these expectations adjust toward the target, and if the
projections of the bank's own economists are consistent with the
target, more significant adjustments in the interest rate become
easier," Villar said in Cartagena, in an interview on the sidelines
of a conference of the pension fund industry, the report discloses.
The central bank lowered its key interest rate half a percentage
point to 12.25% last month, though two of the seven board members
voted for a bigger reduction, the report notes.
Policymakers try not to blindside financial markets when setting
interest rates for fear of triggering exchange rate volatility,
according to Villar, the report adds.
===================
C O S T A R I C A
===================
BANCO INTERNACIONAL: Moody's Hikes Long Term Deposit Rating to Ba3
------------------------------------------------------------------
Moody's Ratings has upgraded Banco Internacional de Costa Rica,
S.A.'s (BICSA) long-term foreign-currency deposit rating to Ba3
from B1, its long-term foreign-currency Counterparty Risk Rating
(CRR) to Ba2 from Ba3 and its long-term Counterparty Risk
Assessment (CRA) to Ba2(cr) from Ba3(cr). Moody's has also upgraded
the bank's Baseline Credit Assessment (BCA) and Adjusted BCA to ba3
from b1. At the same time, Moody's has affirmed the bank's Not
Prime short-term foreign currency deposit rating, Not Prime
short-term CRR as well as its Not Prime(cr) short-term CRA. The
outlook on the long-term deposit rating was changed to stable, from
positive.
RATINGS RATIONALE
In upgrading BICSA's long-term deposit rating to Ba3, Moody's
acknowledges the improvement in the bank's improved financial
profile over the past two years, underpinned by the increased
earnings generation capacity as a result of increased interest
income, rising non-interest income and significant efforts to
contained operating costs, which reinforces future capitalization.
Over the past two years, BICSA's profits have improved
significantly supported by an increase in the bank's earnings
generation capacity that will structurally support overall future
profitability. The bank's net income doubled in the past year, to
0.6% of tangible assets at the end of 2023 from 0.3% in 2022.
Moody's expects that BICSA will be able to sustain this improvement
in earning generation and efficiency supported by the favorable
operating conditions and growing business volumes in Central
America and Mexico.
Capitalization is a credit strength in BICSA's financial profile,
despite expectation of dividend payouts in upcoming years. As of
December 2023, Moody's preferred ratio of tangible common equity to
adjusted risk weighted assets increased to a solid 16.1%, above the
14.2% by year-end 2019.
BICSA's asset quality has improved in 2023, and it's supported by
the bank's collateral coverage and short-term duration of its loan
book, while the bank has concentrated its growth in stronger
operating environments, such as Mexico and Panama, supporting
geographical diversification. In 2023, problem loan ratio stood at
2.2%, a significant improvement from the 4.1% in 2022 and below
2019, and in line with peers that also focus on Central America.
BICSA's low reserve coverage, at 54% of problem loans in 2023, is
partly compensated by the bank's loan collateral, which is an
important mitigant of asset risks. Moreover, the bank is focused on
short-term financing to companies related to external trade, with
50% of loans maturing in less than a year, and benefits from sector
and geographical diversification, which supports asset quality.
At the same time, BICSA's short-term trade financing portfolio
helps to contain refinancing and liquidity risks, the bank's main
credit challenge. Historically, roughly 50% of BICSA's funding are
markets funds exposing the bank to global financial markets
volatility. However, these market-based resources are in the form
of domestic debt and credit lines from development and commercial
banks, which helps to mitigates risks. Most deposits, which
comprise 57% of total liabilities, are term deposits sourced from
Panamanian and Costa Rican institutional depositors, and a higher
share of core deposits as a component of total funding would ensure
lower sensitivity to market rates and stronger margins.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
BICSA's long-term deposit rating could be upgraded if profitability
and asset quality fundamentals continue to improve, providing
sustainable support to capitalization and to the bank's plans to
increase dividend payments. In addition, improvement in funding
structure, including maturity extension and deposit
diversification, would also support upward pressure to the bank's
ratings.
Negative pressures could arise if asset quality deteriorates
materially and unexpectedly from current levels, and earnings
reverse its positive trend, with pressures coming from sudden
increase in loan loss provisioning expenses.
The principal methodology used in these ratings was Banks
Methodology published in March 2024.
===================================
D O M I N I C A N R E P U B L I C
===================================
DOMINICAN REPUBLIC: Use of Checks at Banks Fell by Half in a Decade
-------------------------------------------------------------------
Dominican Today reports that the Association of Multiple Banks of
the Dominican Republic (ABA) announced a significant decline in
check transactions within the Dominican banking system between 2014
and 2023. This decrease, exceeding 50%, is attributed to the
digitization and modernization of payment systems, facilitating a
shift towards electronic transactions.
According to data from the Central Bank, the volume of checks
processed by multiple banks nationwide plummeted from 35.8 million
in 2014 to 17.9 million by the end of 2023, the report discloses.
The ABA explained that this trend is driven by the increasing
prevalence of real-time banking transactions conducted via
computers and mobile devices, according to Dominican Today. Such
methods offer enhanced efficiency and security, prompting more
customers to opt for electronic channels, the report relays.
In the past year, the majority of checks (70.8%) were cashed
in-person at bank teller windows, while 29.1% were processed
through the Central Bank's Check Compensation System, the report
relates. Only a marginal 0.1% of transactions were conducted via
mobile devices facilitated by banking institutions, the report
notes.
In terms of transaction value, the ABA noted a 20% decrease,
amounting to RD$561,082 million over the period of 2014-2023, the
report relays. This translates to a reduction from RD$2,785,876
million to RD$2,224,793 million, the report discloses. Moreover,
in 2023, checks accounted for 32.6% of the gross domestic product
(GDP), marking a sharp decline from 95.2% in 2014, the report
recalls.
The ABA emphasized that while checks are still utilized, their
diminishing role suggests an eventual disappearance as a payment
method, the report notes. This shift is driven by the ongoing
migration towards digital payment channels, as outlined in an
analysis by the ABA's Technical Directorate, 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.
=============
J A M A I C A
=============
JAMAICA: BOJ Welcomes Reduction in Inflation
--------------------------------------------
RJR News reports that the Bank of Jamaica has welcomed the
reduction in headline inflation, which was 0.6 percentage points
lower than the 6.2 per cent point-to-point inflation rate for the
period February 2023 to February 2024.
The Statistical Institute of Jamaica reported that the cost of
goods and services rose by an average of 5.6 per cent for March
2023 to March 2024, according to RJR News.
The 12-month point-to-point inflation was 5.6 per cent, which is
within the bank's 4-6 per cent target range, the report notes.
The Bank of Jamaica notes that this is the second consecutive month
of decline in headline inflation, which is a positive development,
and the first time that the inflation outturn has been within the
bank's target range since October 2023, the report relays.
It says the Monetary Policy Committee will continue to closely
watch the inflation numbers and other incoming data over the
ensuing months to assess the extent to which the current level of
inflation will be sustained before making a determination on
whether to change the bank's monetary policy stance, 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: Level of Remittance Has Hit a Plateau, Anderson Says
-------------------------------------------------------------
RJR News reports that Head of Market Research Limited, Don
Anderson, said the level of remittances to the country has hit a
plateau.
In his presentation at the release of the Jamaica Chamber of
Commerce's first quarter Business and Consumer Confidence Indices
report, Mr. Anderson said remittance inflows to the country are at
27 per cent, according to RJR News.
This, he says, is due to what is happening in more developed
countries, such as the United States, which is one of the country's
major remittance earners, the report notes.
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.
===========
M E X I C O
===========
OPERADORA DE SERVICIOS: Moody's Cuts Issuer Ratings to Caa3
-----------------------------------------------------------
Moody's Ratings has downgraded Operadora de Servicios Mega, S.A. de
C.V., SOFOM, E.R.'s ("Mega") Corporate Family Rating to Caa2 from
B3, and its long-term local and foreign currency issuer ratings to
Caa3 from Caa1, as well as its foreign currency senior unsecured
debt ratings to Caa3 from Caa1, with a developing outlook. The
Not-Prime (NP) short-term issuer ratings, in foreign and local
currency, were affirmed. Previously, the rating was on review for
downgrade.
The rating action concludes the review for downgrade that Moody's
initiated on February 14, 2024.
RATINGS RATIONALE
The downgrade of Mega's ratings reflects insufficient progress made
in securing the necessary funding to refinance its $350 million
senior unsecured notes due in February 2025. Extended efforts in
restoring its funding plan, coupled with efforts to conserve
liquidity, stifle Mega's business growth and performance, and
increase the risk of default on the obligations as time constraints
intensify. The immediate requirement to strengthen its cash
reserves and the need to secure new financing lines in the upcoming
months is crucial for the company to avoid default. At the same
time, Moody's expects that the company's delays in securing
necessary financial resources to sustain its operation and meet its
obligations will continue to tighten financial conditions,
straining its performance and making it more difficult for Mega to
restore business viability.
Due to their dependence on market funding, finance companies, such
as Mega, need to demonstrate a clear path and ability to cover
refinancing needs falling due over at least a 12-month rolling
period. In December 2023, Mega had around $65 million in cash
reserves that accounted for 41% of its credit obligations due in
2024. This coverage would drop to just 12% when the $350 million
bond due in 10 months (February 2025) were to be considered,
highlighting key vulnerabilities of its liquidity management and
funding profile, particularly during tight financial markets
conditions. In addition, Mega's delays to publish its 2023 audited
financial statements and recent announcement of a change in its
external auditor raise concerns around the integrity of the
company's financial statement and timely reporting requirement,
further challenging efforts to access market funding.
Absent a timely securing of funding for the upcoming refinancing,
the senior unsecured noteholders could suffer material losses. The
Caa3 senior unsecured debt rating captures the potential losses for
unsecured creditors in an event of distressed exchange and/or
default.
The developing outlook indicates that the rating could undergo a
further negative or positive travel over the next 12-18 months,
primarily dependent on Mega's success, or otherwise, of resolving
its urgent funding restoration. The outlook also reflects
uncertainty with respect to the timing and sufficiency of potential
restatements of its financial statements from its new external
auditors.
Governance considerations for Mega were a key driver of the rating
action, in particular related to Financial Strategy and Risk
Management, as the company's weak liquidity management has led to
its elevated refinancing risks, and Compliance and Reporting,
reflecting the recent delays in financial reporting that raise
further uncertainties. These factors have resulted in the company's
Financial Strategy and Risk Management score moving to 4 from 3 and
Compliance and Reporting to 4 from 2, leading to a Governance
Issuer Profile score (IPS) of G-4, up from G-3, and the Credit
Impact Score moving to CIS-4 from CIS-3.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
Moody's could change the outlook to negative or further downgrade
Mega's rating if (1) a default on the senior unsecured notes
occurs, (2) there are further delays in presenting a credible
refinancing plan, which, in Moody's view, would indicate that
management decisions could imply higher than expected losses for
senior unsecured creditors, or (3) if the impact of the auditor's
revisions to financial statements puts the company's solvency at
further risk. A downgrade to the lender's CFR would add negative
pressure on Mega's issuer and senior unsecured debt ratings.
A positive rating action is possible in the next 12-18 months if
Mega timely secures liquidity and completes its refinancing plan
with satisfactory terms and conditions that would alleviate
short-term refinancing pressures and set its business on a strong
growth footing.
The principal methodology used in these ratings was Finance
Companies Methodology published in November 2019.
=====================
P U E R T O R I C O
=====================
EXPRESS INC: Case Summary & 30 Largest Unsecured Creditors
----------------------------------------------------------
Lead Debtor: Express, Inc.
One Express Drive
Columbus Ohio 43230
Business Description: The Debtors are an omnichannel fashion
retail company whose business operates
under a multi banner portfolio comprised of
Express, UpWest, and Bonobos. The Debtors
offer their merchandise through
approximately 600 stores throughout the
United States and Puerto Rico -- located
primarily in high traffic shopping malls,
lifestyle centers, and outlets -- as well as
online through their U.S. e-commerce
websites.
Chapter 11 Petition Date: April 22, 2024
Court: United States Bankruptcy Court
District of Delaware
Twelve affiliates that concurrently filed voluntary petitions for
relief under Chapter 11 of the Bankruptcy Code:
Debtor Case No.
------ --------
Express, Inc. (Main Case) 24-10831
Express Topco LLC 24-10832
Express Holding, LLC 24-10833
Express Finance Corp. 24-10834
Express, LLC 24-10835
Express Fashion Investments, LLC 24-10836
Express Fashion Logistics, LLC 24-10837
Express Fashion Operations, LLC 24-10838
Express GC, LLC 24-10839
Express BNBS Fashion, LLC 24-10840
UW, LLC 24-10841
Express Fashion Digital Services
Costa Rica, S.R.L. 24-10842
Judge: TBD
Debtors'
Bankruptcy
Counsel: Joshua A. Sussberg, P.C.
Emily E. Geier, P.C.
Nicholas M. Adzima, Esq.
KIRKLAND & ELLIS LLP AND
KIRKLAND & ELLIS INTERNATIONAL LLP
601 Lexington Avenue
New York, New York 10022
Telephone: (212) 446-4800
Facsimile: (212) 446-4900
Email: joshua.sussberg@kirkland.com
emily.geier@kirkland.com
nicholas.adzima@kirkland.com
- AND -
Charles B. Sterrett, Esq.
333 West Wolf Point Plaza
Chicago, Illinois 60654
Tel: (312) 862-2000
Fax: (312) 862-2200
Email: charles.sterrett@kirkland.com
Debtors'
Local
Bankruptcy
Counsel: Domenic E. Pacitti, Esq.
Michael W. Yurkewicz, Esq.
Alyssa M. Radovanovich, Esq.
KLEHR HARRISON HARVEY BRANZBURG LLP
919 North Market Street, Suite 1000
Wilmington, Delaware 19801
Tel: (302) 426-1189
Fax: (302) 426-9193
Email: dpacitti@klehr.com
myurkewicz@klehr.com
aradvanovich@klehr.com
- AND -
Morton R. Branzburg, Esq.
1835 Market Street, Suite 1400
Philadelphia, Pennsylvania 19103
Tel: (215) 569-3007
Fax: (215) 568-6603
Email: mbranzburg@klehr.com
Debtors'
Investment
Banker: MOELIS & COMPANY LLC
Debtors'
Restructuring
Advisor: M3 ADVISORY PARTNERS, LP
Debtors'
Claims &
Noticing
Agent: STRETTO, INC.
Total Assets as of March 2, 2024: $1,298,055,000
Total Debts as of March 2, 2024: $1,199,781,226
The petitions were signed by Stewart Glendinning as chief
executive
officer.
A full-text copy of the Lead Debtor's petition is available for
free at PacerMonitor.com at:
https://www.pacermonitor.com/view/SUIAMGY/Express_Inc__debke-24-10831__0001.0.pdf?mcid=tGE4TAMA
Consolidated List of Debtors' 30 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
1. Li&Fung(Trading) Limited Trade Payable $36,572,074
5th Floor, Lifung Tower, 888
Cheung Sha Wan Road,
Kowloon
Rohan Sood
Email: RohanSood@lfsourcing.com
Phone: 852-2300-5000
Winnie Chan
Email: WinnieChanPY@LFSourcing.com
2. NewTimes Development Limited Trade Payable $9,182,274
Ayazaga Mah, Mimar Sinan
Sok., No.21 B/34 Sariyer,
Istanbul
Sue Lee
Email: Suelee@newtimesgroup.com
Phone: 852-2711-111
Eunice Kim
Email: EuniceKim@newtimesgroup.com
3. Manchu Times Fashion Ltd Trade Payable $8,902,887
Park-In Commercial Bldg, RM
1316, 56 Dundas Street
Kowloon
Michael Li
Email: MichaelLi@manchutimesfashion.com
Olivia Luk, Director,
Cross Functional Teams
Email: OliviaLuk@manchutimesfashion.com
Phone: 852-23888373
4. Chacon Legal Services $7,750,000
1875 Century Park East, Suite 1000
Los Angeles, CA 90067
Raul Perez
Phone: 310-556-4881
Email: Raul.perez@capstonelawyers.com
2 Venture Parkway, Ste. 240
Irvine, CA 92618
Armond M. Jackson
Phone: 949-281-6857
Email: ajackson@jacksonapc.com
8889 West Olympic Blvd., #200
Beverly Hills, CA 90211
Joseph Lavi
Phone: 310-362-2016
18250 Ventura Blvd.
Tarzana, CA 91356
Sahag Majarian
Phone: 944-978-2683
5. Pacific Buying and Trade Payable $7,218,028
Marketing Service Ltd
22/F, Tai, Yau Bldg, 181
Johnson Rd, Wai Chai
Carol Hong, Managing Director
Phone: 82-2-748-9203
Email: carolhong@pbms.biz
6. Radial Inc. Trade Payable $7,114,394
PO Box 204113, Dallas, TX
75320-4114
Kat Gibson, VP Client Account
Management
Email: gibsonk@radial.com
Phone: 423.432.7464
Emily Jones, Assistant General Counsel
Email: ejones@radial.com
Phone: (610) 491 â€" 7124
7. Lever Style Ltd. Trade Payable $5,945,516
Wing Tai Centre Room 76
Flat A 7th Floor
12 Hing Yip Street
Kwun Tong, Kowloon
Hong Kong
Eddie Chan, CEO
Email: eddie.chan@leverstyle.com
Phone: 852-9034-7713
William Tan, COO
Email: william.tan@leverstyle.com
Derek Lee, CFO
Email: derek.lee@leverstyle.com
Winnie Man
Email: winnie.man@leverstyle.com
8. Commission Junction LLC Trade Payable $4,731,288
#774140, 4140 Solutions Center
Chicago, IL 60677-4001
Camelia Gehrke, VP Corporate
Development
Email: camelia.gehrke@cj.com
Phone: 415-471-3867
9. Alvarez & Marsal Professional $3,500,000
600 Madison Ave; 8th Floor Services
New York, NY 10022
Patricia Hong, Managing Director
Email: phong@alvarezandmarsal.com
Email: Sanjay Srikanth, Managing Director
Email: Sanjay.Srikanth@alvarezandmarsal.com
10. Motives Trade Payable $3,177,573
499th Avenue 19th Floor,
New York, NY 10018
Corey Baggett, CEO
Email: corey@motivesny.com
Phone: 212-265-2885
11. Tote Fashion Sourcing Trade Payable $2,929,814
Limited
5F-7, No.1, Fu Shing North
Road, Taipei Taiwan, ROC105
Keven Lin, Merchandise Director
Email: keven@totefashion.com.tw
Phone: 886-2-27775974
12. RR Donnelley Trade Payable $2,417,521
7810 Solution Center
Chicago, IL 60677-7008
Todd Fallon, Strategic Sales Executive
Phone: 614-985-2124
Email: Todd.fallon@rrd.com
13. Urban Crown Limited Trade Payable $1,900,628
1101 West Tower, Exchange Rd
Ortigas Ctr, Pasig City 1605
Kevin Moylan, President
Email: kevin@crownsmart.com
Phone: 632-687-0741
14. 1552 Broadway Retail Owner LLC Landlord Claim $1,779,867
PO Box 417368
Boston, MA 02241-7368
Brett Herschenfeld
Phone: 212-216-1670
Email: brett.herschenfeld@slgreen.com
15. Fortune Footwear Inc. Trade Payable $1,705,548
174 Hudson Street, 3rd Floor
New York, NY 10013
Thomas Paccione, CFO
Email: tpaccione@fortunefootwear.com
Phone: 212-431-6480
16. Bernardo Manufacturing Trade Payable $1,664,304
54 Taylor Dr, East
Providence, RI 02916
Gregg Castelluci,
Customer Service Manager
Phone: 401-272-2885
17. CFL Distribution Inc. Trade Payable $1,551,243
Hore De Macau Limitada
Avenida Da Praia Grande, 665
Edif Great Will
Lynda Wong, CMO
Email: Lynda_wong@cflhk.com
Phone: 853-2897 3743
18. Brierley & Partners, Inc. Trade Payable $1,508,810
PO Box 847439,
Dallas, TX 75284
Elizabeth Keller,
Email: elisabeth.keller@capillarytech.com
Phone: 214-743-5415
Sridhar Bollam, Chief Customer Officer
Email: sridhar.bollam@capillarytech.com
19. Pandera Systems, LLC Professional $1,347,164
189 S Orange Ave Ste 1250 Services
Orlando, FL 32801
Steve Jones, Managing Partner, Account
Executive
Email: steve.jones@66degrees.com
Phone: 240-660-8425
20. Silver Crest Clothing Pvt Ltd Trade Payable $1,279,792
- Unit III
Plot No. 4E1 & E2, Kiadb
Industrial Area, Attibele, KA
562107
Gautam Golchha
Email: gautam@silvercrest.in
Phone: +91 9886745888
21. Monument Consulting LLC Professional $1,274,569
1800 Summit Ave, Richmond, VA Services
23230
Allison Hutchcroft, Lead Account
Manager
Email: Allison.Hutchcroft@MonumentConsulting.com
Phone: 804-405-2943
22. Crescent Bahuman Limited Trade Payable $1,242,980
45-A Off Zafar Ali Rd,
Goldberg V, Lahore, 54660
Abdul Mateen Khan, Brand Manager
Email: amateen@crescentbahuman.com
Phone: 92 345 767 6994
23. Macerich Cerritos LLC Landlord Claim $1,087,129
PO Box 849445
Los Angeles, CA 90084-9445
Doug Healey
Phone: 585-249-4401
Email: Doug.Healey@macerich.com
24. GGP Columbia Mall Landlord Claim $1,085,579
Rouse Fashion Place, SDS-12 2780
PO Box 86
Minneapolis, MN
55486-2780
Troy Benson
Phone: 312-960-5796
Email: Troy.Benson@bpretail.com
25. Salesforce Inc. Trade Claim $1,060,018
PO Box 203141
Dallas, TX 75320-3140
Michael Lipton, Tech Support
Email: mlipton@salesforce.com
Phone: 612-283-3976
26. Adobe Systems, Inc. Trade Payable $1,026,831
75 Remittance Dr, #1025
Chicago, IL 60675-1025
Scott Burns
Phone: 630-262-6202
Email: sburns@adobe.com
27. Queens Center SPE, LLC Landlord Claim $997,837
PO Box 849433, Los Angeles
CA 90084-9433
Doug Healey
Phone: 585-249-4401
Email: Doug.Healey@macerich.com
28. BlueCore Inc. Trade Claim $921,113
124 Rivington St, New York
NY 10002
Liz Madsen
Email: liz.madsen@bluecore.com
Phone: 512-554-6565
29. Simon Capital GP Landlord Claim $914,038
867925 Reliable Pkwy
Chicago, IL 60686-0079
Jon Murphy
Email: jonmurphy@simon.com
Phone: 347-260-0628
30. Tanger Properties Limited Landlord Claim $879,345
Partnership
PO Box 414225
Boston, MA
02241-4225
Justin Stein
Phone: 862-352-0444
Email: js@tanger.com
TRADITION FRANCAISE: Seeks to Hire Tamarez CPA as Accountant
------------------------------------------------------------
Tradition Francaise Inc. seeks approval from the U.S. Bankruptcy
Court for the District of Puerto Rico to employ Tamarez CPA, LLC as
its accountant.
The firm will render these services:
a) reconcile financial information to assist Debtor in the
preparation of monthly operating reports;
b) assist in the reconciliation and clarification of proof of
claims filed and amount due to creditors;
c) provide general accounting and tax services to prepare
year-end reports and income tax preparation, if necessary; and
d) assist Debtor and Debtor's counsel in the preparation of
the supporting documents for the Chapter 11 Reorganization Plan.
The firm will be paid at these rates:
Albert Tamarez-Vasquez, CPA CIRA $165 per hour
CPA Supervisor $110 per hour
Senior Accountant $90 per hour
Staff Accountant $70 per hour
The firm will receive a post-petition retainer in the total amount
of $5,000.
Albert Tamarez Vasquez, CPA, owner of Tamarez CPA, disclosed in
acourt filing that his firm is a "disinterested person" as that
term is defined in Section 101(14) of the Bankruptcy Code.
The firm can be reached through:
Albert Tamarez Vasquez, CPA
Tamarez CPA, LLC
1519 Ave. Ponce De Leon, Suite 412
San Juan, PR 00909
Telephone: (787) 795-2855
Facsimile: (787) 200-7912
Email: atamarez@tamarezcpa.com
About Tradition Francaise Inc.
Tradition Francaise Inc. d/b/a LA Boulangerie filed its voluntary
petition for relief under Chapter 11 of the Bankruptcy Code (Bankr.
D.P.R. Case No. 24-00841) on March 1, 2024. The petition was signed
by Fernando Perez as president. At the time of filing, the Debtor
estimated $100,000 to $500,000 in assets and $1 million to $10
million in liabilities.
Javier Vilarino, Esq. at Vilarino & Associates LLC represents the
Debtor as counsel.
=====================================
T R I N I D A D A N D T O B A G O
=====================================
TRINIDAD & TOBAGO: Not Immune to Venezuela-US Dynamics
------------------------------------------------------
Vishanna Phagoo at Trinidad Express reports that Prime Minister Dr
Keith Rowley hopes the Government's efforts in
relationship-building over the years will protect the country in
the face of what he admitted was an uncertain future for the Dragon
gas deal, given the strained relations between the United States
and Venezuela.
Rowley made the statement during the post-Cabinet news conference
in response to a question about the United States' re-imposition of
oil sanctions against Venezuela, according to Trinidad Express.
This action was taken over what the US said was the Nicolas Maduro
government's failure to adhere to democratic principles ahead of
elections in July, the report notes.
"We are not immune to what goes on between Venezuela and the United
States, because as we say, that, too, is a moving target. What we
have done is to try and build relationships and promote our
interest in a wider sphere than in Port of Spain. So that whatever
happens, or whatever is happening or is to happen with Washington
and Caracas, we have resolutely kept our interest in front of all
parties," Rowley said, the report notes.
"If the United States does things to Venezuela or about Venezuela,
we can't guarantee that some of those things would not be
detrimental to us, as in fact, it has already been. But we have
some things in place which are not now directly affected by that.
But that does not mean that it would not be affected sometime in
the future, as the goalposts keep changing," he said, the report
relays.
The report discloses that Mr. Rowley said that there have been
positive developments regarding the Dragon gas deal so far.
"The whole idea of getting Venezuela to agree to export gas to
Trinidad and Tobago--that is a positive. If it does not happen
this year and it happens ten years from tomorrow, then that is a
good thing, so we could go from zero to whatever that is. We would
love for it to happen sooner," he said, the report relays.
"The whole idea of us having, out of that agreement, a 30-year
arrangement--that is positive. When it is going to start, there
are some difficulties there, but it might be influenced by the
outcome of the US election, because they are all intertwined,"
Rowley said, the report notes.
As an illustration of how swiftly circumstances can shift, Rowley
cited the removal of the chairman of one of the committees in
Washington that was previously engaged in addressing the issue, the
report says.
"Things happen. We don't know how it will work out or what could
happen," Rowley said, the report discloses.
"What we did with all the contacts that we were making is to place
value on the building of relationships and it is that approach that
has worked for us. We are not unknown in many quarters where
decisions are made and where those decisions are important to our
interests. So we have worked hard on that, and I think we are
better off; we are in a better position now than we were ten years
ago, five years ago," he added.
The Office of Foreign Assets Control (OFAC), Department of Treasury
of the United States Government issued General Licence 44A which
governs sanctions related to the Bolivarian Republic of Venezuela
and deals with authorising the wind down of transactions related to
oil or gas sector operations in Venezuela, the report notes.
"The Ministry of Energy and Energy Industries wishes to advise that
this amendment to the OFAC General Licence 44 does not affect the
Specific Amended OFAC licence that was issued to the Government of
the Republic of Trinidad and Tobago on October 17, 2023, which
authorised the Government of Trinidad and Tobago, the National Gas
Company of Trinidad and Tobago Ltd (NGC), Shell PLC and their
affiliates to conduct business with the Government of Venezuela and
Petroleos de Venezuela (PDVSA) with respect to the Dragon Gas Field
in Venezuela," a release from the Energy Ministry stated, the
report relays.
"The specific Amended OFAC Licence issued to Trinidad and Tobago on
October 17, 2023 is valid until October 31, 2025 and permits Shell,
NGC and contractors to continue the works being undertaken to
explore, produce and export natural gas from the Venezuelan Dragon
gas field," it stated, the report discloses.
Energy Minister Stuart Young also stated that this country secured
a 30-year Exploration and Production Licence from Venezuela on
December 21 last year for the Dragon gas field, and that the work
to explore, produce and export the natural gas from this field to
Trinidad and Tobago is continuing, the report adds.
=============
U R U G U A Y
=============
SANCOR SEGUROS: Fitch Ups LT IFS Rating to 'BB-', Outlook Stable
----------------------------------------------------------------
Fitch Ratings has upgraded Sancor Seguros S.A.'s (Sancor) Long-Term
Insurer Financial Strength (IFS) to 'BB-' from 'B+'. The Rating
Outlook is Stable.
Sancor's upgrade is based on the improvement of the insurer's
financial performance which, in addition to being favorable for the
expectations of the current rating, have allowed the company to
sharply reduce its dependence on capital from its parent company
Sancor Cooperativa, and also improve its capitalization and
leverage indicators, which are in line with the rating
expectations.
The rating continues to be limited by a less favorable business
profile, mainly as a result of its limited operating scale in
accordance with Fitch's guidelines.
KEY RATING DRIVERS
Favorable Financial Results: At YE 2023, Sancor reported positive
results, higher than those reported in 2022 and above five
year-average. The improvement on performance over the last few
years has been part of a company strategy, where improvement in
operating performance have been favorably complemented by positive
financial results mainly related to the financing of policies with
payment plans. The favorable results along with the operational
growth had a positive effect on ROAE, which reached 11.0% at YE
2023, positioning it above expectation for the current rating. The
improvement was reflected on the assigned ratings credit factor,
with a score upgraded to 'a-' from 'bbb' .
Reduced Dependence on Parent: Sancor has proven to reduce their
dependence on its Argentine parent, Sancor Cooperativa. This
separation is noticeable at the system and processes levels, and
mainly for capital requirements. Sancor's performance levels
improved over the last four years and generated positive results.
Accumulated losses have decreased, strengthening the entity's
equity base.
Moderate Business Profile: Sancor's rating reflects a moderate
business profile based on the company's moderate market position,
and its business risk profile and diversification aligned with the
Uruguayan industry. The business profile is limited by its small
operating scale (according to Fitch guidelines), which is affected
by the Uruguayan market size and the market share and concentration
of the state-owned company (69.0% December 2023), which limits
growth for all private insurers in the country.
Stronger Capitalization: During 2023, Sancor received a capital
injection which along with positive results, has contributed to the
strengthened of the capita. This also leads to an improvement on
leverage ratios, despite the operational growth, where indicators
took positions slightly under the five-year average as a result.
Sancor does not expect the distribution of dividends in the short
term, so the maintenance of positive results should strengthen
Sancor's capitalization and leverage indicators.
Sancor Cooperativa's Credit Opinion: Sancor Cooperativa's credit
opinion weighs negatively on Sancor's rating. Sancor Cooperativa is
strongly influenced by the sovereign rating of Argentina, which is
affected by the economic conditions of that country (inflation),
although it incorporates the broad solvency levels and adequate
nominal results.
Sovereign Ratings Influences Investment Risk: The investment risk
remains limited due to the wide concentration in sovereign
securities. The factor is capped by the sovereign rating due to the
portfolio exposure to these assets higher than 150%. Due to the
recent upgrade to Uruguay's sovereign rating (from BBB- to BBB),
the factor score was upgraded to 'bbb-' from 'bb+'.
RATING SENSITIVITIES
Factors that Could, Individually or Collectively, Lead to Positive
Rating Action/Upgrade
- A significant improvement in terms of operating scale or increase
on net written premium (NWP) resulting in an increase in market
share, that could have a positive impact on the business profile;
- Strengthening of the leverage indicators, including the result in
the evaluation of Fitch's Prism factor-based capital model,
maintaining a score within the upper mid-range of the 'Somewhat
Weak' category;
- Positives changes in Fitch's view regarding Sancor Cooperativa's
credit profile.
Factors that Could, Individually or Collectively, Lead to Negative
Rating Action/Downgrade
- Deterioration of capitalization reflected in bigger leverage
indicators, with gross written premium (GWP)to equity steadily
above 3.5x and a Prism score in the lower part of the 'Weak'
category;
- Significant deterioration in the technical performance
indicators, with a combined ratio increasingly above 110% and a ROE
lower than 4% could also affect;
- Changes in in Fitch's credit view and relationship with its
parent, particularly pressures on financial flexibility.
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
----------- ------ -----
Sancor Seguros S.A. LT IFS BB- Upgrade B+
*********
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.
This material is copyrighted and any commercial use, resale or
publication in any form (including e-mail forwarding, electronic
re-mailing and photocopying) is strictly prohibited without prior
written permission of the publishers.
Information contained herein is obtained from sources believed to
be reliable, but is not guaranteed.
The TCR Latin America subscription rate is US$775 per half-year,
delivered via e-mail. Additional e-mail subscriptions for members
of the same firm for the term of the initial subscription or
balance thereof are US$25 each. For subscription information,
contact Peter A. Chapman at 215-945-7000.
.
* * * End of Transmission * * *