---

       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, May 9, 2024, Vol. 25, No. 94

                           Headlines



A R G E N T I N A

GAUCHO GROUP: Regains Nasdaq Compliance
GAUCHO GROUP: Says Argentina's NATO Bid Paves Path for Growth


B R A Z I L

BANCO BMG: Moody's Assigns 'B1' Bank Deposit Ratings, Outlook Neg.
BANCO DO ESTADO: S&P Places 'BB-' ICR on CreditWatch Negative
BRAZIL: Succumbs to the Retail Apocalypse It Staved Off for Years
GRUPO CASAS: Soars After Filing Out-Of-Court Debt Deal


D O M I N I C A N   R E P U B L I C

[*] DOMINICAN REPUBLIC: Offers an Attractive Business Climate


J A M A I C A

JAMAICA: World Bank Settles Catastrophe Bond


M E X I C O

OPERADORA DE SERVICIOS: S&P Cuts LT ICR to 'CCC-', Outlook Neg.


S T .   V I N C E N T   A N D   T H E   G R E N A D I N E S

ST. VINCENT & GRENADINES: Economy Faces Challenges Amid High Debt

                           - - - - -


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

GAUCHO GROUP: Regains Nasdaq Compliance
---------------------------------------
Gaucho Group Holdings, Inc. on May 1, 2024, received a notice from
the Listing Qualifications Department of the Nasdaq Stock Market
notifying the Company that, due to the Company's filing of its
Annual Report on Form 10-K for the fiscal year ended December 31,
2023 with the Securities and Exchange Commission on April 30, 2024,
the Company is now back in compliance with Nasdaq's continued
listing requirements under Nasdaq Listing Rule 5250(c)(1), which
requires the timely filing of all required periodic reports with
the SEC.

Gaucho Group received a delinquency compliance alert notice from
the Listing Qualifications Department of The Nasdaq Stock Market
LLC advising the Company that due to the Company's failure to
timely file its Annual Report on Form 10-K for the fiscal year
ended December 31, 2023, with the Commission, the Company was not
in compliance with Nasdaq's continued listing requirements under
Nasdaq Listing Rule 5250(c)(1).

Nasdaq provided the Company 60 days to submit a plan to regain
compliance with the Rule. The Company intends to submit its plan of
compliance to Nasdaq on or before June 17, 2024. If Nasdaq accepts
the plan, the Company may be granted an extension of 180 calendar
days from the due date of the Form 10-K or October 14, 2024 to
regain compliance with the Rule. In the event the plan is not
accepted by Nasdaq, the Company may appeal that decision to a
Hearings Panel.

                     About Gaucho Group

Headquartered in New York, NY, Gaucho Group Holdings, Inc.'s
mission has been to source and develop opportunities in Argentina's
undervalued luxury real estate and consumer marketplace.  The
Company has positioned itself to take advantage of the continued
and fast growth of global e-commerce across multiple market
sectors, with the goal of becoming a leader in diversified luxury
goods and experiences in sought after lifestyle industries and
retail landscapes. With a concentration on fine wines
(algodonfinewines.com & algodonwines.com.ar), hospitality
(algodonhotels.com), and luxury real estate
(algodonwineestates.com) associated with its proprietary Algodon
brand, as well as the leather goods, ready-to-wear and accessories
of the fashion brand Gaucho - Buenos Aires (gaucho.com), these are
the luxury brands in which Argentina finds its contemporary
expression.

Gaucho reported a net loss of $21.83 million for the year ended
Dec. 31, 2022, compared to a net loss of $2.39 million for the year
ended Dec. 31, 2021.  As of Sept. 30, 2023, the Company had $18.91
million in total assets, $11.02 million in total liabilities, and
$7.89 million in total stockholders' equity.

The Company's operating needs include the planned costs to operate
its business, including amounts required to fund working capital
and capital expenditures.  Based upon projected revenues and
expenses, the Company believes that it may not have sufficient
funds to operate for the next twelve months from the date these
financial statements are made available.  Since inception, the
Company's operations have primarily been funded through proceeds
received from equity and debt financings.  The Company believes it
has access to capital resources and continues to evaluate
additional financing opportunities.  There is no assurance that the
Company will be able to obtain funds on commercially acceptable
terms, if at all.  There is also no assurance that the amount of
funds the Company might raise will enable the Company to complete
its development initiatives or attain profitable operations. The
aforementioned factors raise substantial doubt about the Company's
ability to continue as a going concern for a period of one year
from the issuance of its financial statements, according to the
Company's Quarterly Report for the period ended Sept. 30, 2023.


GAUCHO GROUP: Says Argentina's NATO Bid Paves Path for Growth
-------------------------------------------------------------
Gaucho Group Holdings, Inc. disclosed that Argentina's recent
effort to become a "global partner" of NATO could herald
significant economic stability and growth. This alignment, which
seeks to reconnect Argentina with the U.S. and other Western
economies, is anticipated to boost the business environment and, by
extension, enhance the value of Gaucho Holdings' luxury real estate
investments in the region.

Given the historical economic boosts observed in countries
post-NATO alliances, Gaucho Holdings is optimistic about
Argentina's resultant economic stability and growth. Argentina's
effort to form a partnership with NATO comes at a time when the
country is taking considerable steps to mend and strengthen its
economic policies and international relationships. These actions
are expected to foster an environment rife for investment and
growth, particularly in sectors where Gaucho Holdings operates.

The Company's CEO and Founder, Scott Mathis, commented on the
development, stating, "We are observing a pivotal transformation in
Argentina's international relations, which we believe can lead to
substantial economic stability and growth. Such an environment is
conducive for significant appreciation in real estate values,
especially in prime markets where Gaucho Holdings maintains
considerable assets. This move could greatly benefit our
stakeholders and enhance the intrinsic value of our extensive
portfolio in Argentina."

Gaucho Holdings aims to deliver exclusive luxury experiences to its
clientele, driven by unique products and tailored services. With a
robust presence in Argentina's flourishing markets, Gaucho Holdings
is dedicated to upscale investments and promising opportunities in
the region.

                   About Gaucho Group

Headquartered in New York, NY, Gaucho Group Holdings, Inc.'s
mission has been to source and develop opportunities in Argentina's
undervalued luxury real estate and consumer marketplace.  The
Company has positioned itself to take advantage of the continued
and fast growth of global e-commerce across multiple market
sectors, with the goal of becoming a leader in diversified luxury
goods and experiences in sought after lifestyle industries and
retail landscapes. With a concentration on fine wines
(algodonfinewines.com & algodonwines.com.ar), hospitality
(algodonhotels.com), and luxury real estate
(algodonwineestates.com) associated with its proprietary Algodon
brand, as well as the leather goods, ready-to-wear and accessories
of the fashion brand Gaucho - Buenos Aires (gaucho.com), these are
the luxury brands in which Argentina finds its contemporary
expression.

Gaucho reported a net loss of $21.83 million for the year ended
Dec. 31, 2022, compared to a net loss of $2.39 million for the year
ended Dec. 31, 2021.  As of Sept. 30, 2023, the Company had $18.91
million in total assets, $11.02 million in total liabilities, and
$7.89 million in total stockholders' equity.

The Company's operating needs include the planned costs to operate
its business, including amounts required to fund working capital
and capital expenditures.  Based upon projected revenues and
expenses, the Company believes that it may not have sufficient
funds to operate for the next twelve months from the date these
financial statements are made available.  Since inception, the
Company's operations have primarily been funded through proceeds
received from equity and debt financings.  The Company believes it
has access to capital resources and continues to evaluate
additional financing opportunities.  There is no assurance that the
Company will be able to obtain funds on commercially acceptable
terms, if at all.  There is also no assurance that the amount of
funds the Company might raise will enable the Company to complete
its development initiatives or attain profitable operations. The
aforementioned factors raise substantial doubt about the Company's
ability to continue as a going concern for a period of one year
from the issuance of its financial statements, according to the
Company's Quarterly Report for the period ended Sept. 30, 2023.




===========
B R A Z I L
===========

BANCO BMG: Moody's Assigns 'B1' Bank Deposit Ratings, Outlook Neg.
------------------------------------------------------------------
Moody's Ratings has all ratings and assessments assigned to Banco
BMG S.A. (BMG), including its B1 long-term local and foreign
currency bank deposit ratings and Ba3 long-term local and foreign
currency Counterparty Risk Ratings. The Baseline Credit Assessment
(BCA) and adjusted BCA of b1, the long and short-term Counterparty
Risk Assessments of Ba3(cr) and Not Prime(cr), respectively, as
well as the short-term local and foreign currency bank deposit
ratings and Counterparty Risk Ratings of Not Prime were also
affirmed. The outlook on the bank deposit ratings remains
negative.

RATINGS RATIONALE

When affirming BMG's ratings and assessments, Moody's acknowledges
that bank's future earnings generation will benefit from a
strategic shift that has been undergoing since early 2023, which is
focused on cost savings measures, including to lower funding costs,
and improve the bank's efficiency metrics. BMG's b1 BCA also
reflects Moody's expectations of a continued decline in loan loss
provision expenses, from a high 6.9% of gross loans reported in
2023, as the bank adopts tighter underwriting standards for
unsecured loans, which will benefit bottom line results and also
reduce delinquency level in 2024.

Moody's decision to maintain the negative outlook on BMG's deposit
ratings incorporates Moody's view that the bank's capital position
remains low, well below those reported by local midsize banks in
Brazil, and the challenges it faces in rebuilding its
loss-absorption capacity in a context of squeezed margins on its
core product. In addition, BMG's recent strategic pivot, focusing
on enhancing product penetration while concurrently restructuring
its operational framework to cut costs, inherently carries
execution risks amid a highly competitive landscape.

BMG's asset quality position has historically benefitted from the
resilient risk profile of its core business, the payroll credit
card product, with over 70% of its loan book made up from granular
and low-risk secured loans. In December 2023, the bank's problem
loans fell to 2.6%, from 3.7% a year earlier, helped by the sale
and write-off of a portion of 7.8% of its total loan book, and the
gradual reduction in loan origination of unsecured consumer
products.

With a high revenue dependence on payroll lending products that
accounted for approximately 60% of total earnings in 2023,
profitability is exposed to both regulatory risks and competitive
pressures. Since 2022, BMG's margins have been negatively impacted
by multiple government decisions to reduce the regulatory rate cap
on payroll loans for retirees and pensioners, which have pressured
the bank's net interest margin (NIM). At the end of 2023, NIM stood
at 9.3%, in line with 2022 levels, but down considerably from 17.2%
in 2020.  At the same time, net income to tangible assets ratio
remained flat at 0.5% in the the past two years, below the average
of 0.9% between 2015 and 2020. However, we acknowledge that
efforts towards increasing cross-selling and enhancing business
diversification, including insurance products, to over 10 million
clients are positive in the medium term.

In the meantime, BMG has reported modest earnings generation that
continues to hinder its internal capital replenishment capacity. In
2023, Moody's adjusted tangible common equity to risk weighted
assets (TCE ratio) fell to 4.0%, from 5.4% a year earlier, which
remains a negative credit driver. The bank's regulatory core
capital of 9.4% as of December 2023 remains lower than the average
reported by banks with similar risk profile and size in Brazil. A
sustainable expansion of its capital position will be associated
with the necessary improvement in earnings generation, which will
allow for the realization of the bank's large stock of deferred tax
assets as well as lower dividends payouts as compared to prior
years.

BMG's reliance on market funds and large institutional depositors
has declined, offset by a larger share of more granular deposits
from individuals, which are, however, majorly sourced from brokers.
Seeking capital optimization, BMG is increasing the usage of
securitization structures, including non-recourse loan sales to
third parties, as a funding alternative.

FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS

Given the negative outlook, Moody's do not anticipate upward
pressures on BMG's ratings at this point. Sustainable core earnings
generation would allow for capital restoration, which would be
material developments to stabilizing its ratings.

Conversely, BMG's ratings could be downgraded if the downward trend
in core capital metric is not consistently reverted, or if there is
a deterioration in the bank's liquidity and funding conditions.
Also, downward pressure on BMG's financial profile could stem from
a failure in the implementation of its new strategy, and/or if the
bank is not able to manage pressures from intense competition and
regulatory risks associated with its core product.

PRINCIPAL METHODOLOGY

The principal methodology used in these ratings was Banks
Methodology published in March 2024.

BANCO DO ESTADO: S&P Places 'BB-' ICR on CreditWatch Negative
-------------------------------------------------------------
S&P Global Ratings placed its 'BB-' and 'brAA+' ratings on
state-owned Banco do Estado do Rio Grande do Sul (Banrisul) on
CreditWatch negative.

It also incorporates S&P's view that it's too early at this point
to assess how the fallout from the flooding will affect the
agricultural sector, services industry, private property, and
public infrastructure in the region, where the bank has significant
exposure.

The bank is well known across southern Brazil, and its operations
have been resilient despite RS' prolonged weak finances. In
addition, we think the state's ability to intervene in the bank's
operations is limited because of Brazil's Fiscal Responsibility
Law, banking regulations, and Banrisul's strong corporate
governance.

S&P will continue monitoring new developments in the region and how
they could affect the bank.

Environmental, social, and governance (ESG) credit factors for this
change in credit rating/outlook and/or CreditWatch status:

-- Climate transition risks


BRAZIL: Succumbs to the Retail Apocalypse It Staved Off for Years
-----------------------------------------------------------------
Bloomberg News reports that the retail shakeout has reached Brazil,
where local players are starting to restructure and consolidate
amid stiff competition from foreign giants like Amazon.com Inc.,
MercadoLibre Inc. and Shein Group Ltd.

Though e-commerce reshaped retailing in the US and Europe even
before the pandemic, a confluence of economic, financial and
logistical circumstance kept the South American nation insulated
from the trend until later, according to Bloomberg News.

That means the bankruptcies, mergers and strategic shifts that have
rippled through the sector elsewhere are now coming for some of the
biggest Brazilian chains, the report notes.

Marcelo Noronha, the top executive at Banco Bradesco SA, flagged
retail as one of the weakest segments of the Brazilian economy
right now, the report relays.

"When compared with other sectors, there are more challenges for
retailers," he told reporters.  

Grupo Casas Bahia SA - one of country's most popular chains - filed
an out-of-court recovery plan to reschedule around 4.1 billion
reais ($802 million) in debt payments, the report notes.  And
credit has been tight ever since the downfall of Americanas SA in
an accounting scandal last year, which put the entire sector under
the microscope, the report relays.  

There's also a growing wave of tie-ups, notes the report. Pet
Center Comercio e Participacoes SA, known as Petz, agreed to be
bought by its rival Cobasi last month, the report says.  And in
February, Arezzo Industria e Comercio SA purchased Grupo de Moda
Soma SA in a bid to create a retail giant, 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.

As reported in the TCR-LA on May 6, 2024, Moody's Ratings affirmed
the Government of Brazil's long-term issuer and senior unsecured
bond ratings at Ba2, senior unsecured shelf rating at (P)Ba2 and
changed the outlook to positive from stable. Moody's assesses that
Brazil's real GDP growth prospects are more robust than in the
pre-pandemic years, supported by the implementation of structural
reforms over multiple administrations, as well as the presence of
institutional guardrails that reduce uncertainty around future
policy direction. The outlook change to positive is underpinned
by Moody's assessment that more robust growth combined with
continued, albeit gradual, progress towards fiscal consolidation,
may allow Brazil's debt burden to stabilize. However, there are
risks to the government's execution of continued fiscal
consolidation.

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.

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).

GRUPO CASAS: Soars After Filing Out-Of-Court Debt Deal
------------------------------------------------------
Bloomberg News reports that Grupo Casas Bahia SA shares jumped as
much as 21% after the Brazilian retailer filed an out-of-court deal
with its main creditors to reschedule the payment of BRL4.1 billion
($801 million) in debt.

The plan was built with Banco Bradesco SA and Banco do Brasil SA,
the main creditors, which hold approximately 55% of the debt in
bank loans, according to Casas Bahia's chief financial officer,
Elcio Ito, the report notes.

The rest of the debt is spread out among several local bondholders,
with Santander Asset Management and Banco do Brasil's asset
management unit holding significant chunks of debenture notes,
according to Bloomberg News.

"This plan reduces interest rate payments but the debt continues,
there was no haircut on the debt," Ito said in an interview. "There
is no immediate deleveraging for the company," he added.

Casas Bahia, one of the country's most popular retail chains, filed
for the extra-judicial recovery plan, the report relays.

Brazilian retailers have struggled with truckloads of debt, fierce
competition from international players, and logistical hurdles, the
report notes.  Casas Bahia saw its market value plunge over 98%
from BRL28 billion in 2020 to BRL619.9 million, the report adds.




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

[*] DOMINICAN REPUBLIC: Offers an Attractive Business Climate
-------------------------------------------------------------
Dominican Today reports that the honorary consul of Malaysia,
Fernando Gonzalez Nicolas, affirmed that the Dominican Republic
offers an attractive business and investment climate.

He affirmed that the country's economy is based on pillars such as
the tourism sector, which attracted more than 10 million tourists
last year, according to Dominican Today.

The free trade zones continue to make the Dominican Republic the
world's leading exporter of quality cigars, as well as the
manufacture of medical equipment, the report notes.

Another sector that influences the country's economy is mining, and
one of the largest gold mines in the world operates in the country,
the report relays.

He indicated that the Dominican Republic is beginning to stand out
in the Caribbean and the Americas as a distribution center for
goods and services, the report notes.  The country's privileged
geographic location and infrastructure facilitate its leadership,
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: World Bank Settles Catastrophe Bond
--------------------------------------------
RJR News reports that the World Bank settled a catastrophe bond
that was issued on behalf of Jamaica in the amount of US$150
million.

The cat bond attracted fifteen global investors, providing funding
for catastrophe insurance to Jamaica for four hurricane seasons,
according to RJR News.

In the event of a named storm, insurance payouts to Jamaica will be
triggered once the storm meets the criteria for location and
severity set forth in the bond terms, the report notes.

In 2021, Jamaica became the first developing country in the world
to independently sponsor a catastrophe bond, 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.
       



===========
M E X I C O
===========

OPERADORA DE SERVICIOS: S&P Cuts LT ICR to 'CCC-', Outlook Neg.
---------------------------------------------------------------
S&P Global Ratings lowered its long-term global scale issuer credit
and issue-level ratings on Operadora de Servicios Mega S.A. de C.V.
SOFOM E.R. (GFMega) to 'CCC-' from 'CCC+'. The outlook is
negative.

Although GFMega is in the process of obtaining a secured credit
facility, the company hasn't closed the transaction, and there's no
certainty that the funds will be enough to cover the outstanding
principal amount of its 2025 bond. This upcoming maturity
represents about 43% of GFMega's liabilities. In S&P's
view, this increases the risk of a default--either conventional or
through a distressed debt exchange--absent favorable developments.
In addition, the company's financial performance deteriorated
during 2023, which S&P believes heightens the risks mentioned
above.

In the meantime, the company faces additional debt payments for
almost $150 million, including about $125 million in monthly
payments on its credit lines and a coupon payment for about $25
million due August 2024. Therefore, S&P believes GFMega's liquidity
position is vulnerable, considering the significant challenge to
obtain new funding sources amid investors' risk aversion towards
the Mexican nonbanking financial institution sector.

S&P believes that unsecured funding sources won't be available for
the company, so the alternatives are secured credit facilities that
require loans to be pledged as collateral. Currently, secured debt
represents about 21% of GFMega's liabilities. But if the
abovementioned secured credit facility is closed, this portion
could increase very rapidly to about 45% in the next few months,
denting the company's financial flexibility. This also requires
that GFMega maintain healthy asset quality indicators, to have
enough loans to pledge for the secured transactions. Although the
company currently maintains a stable nonperforming loan (NPL) ratio
(3.8% as of Dec. 31, 2023), its Stage 2 loans deteriorated during
2023, with Stage 2 and 3 loans representing almost 14% of the
portfolio. This could also represent another obstacle for obtaining
new funding in the future.

As of Dec. 31, 2023, the company reported a net annual loss of
MXN16 million. Bottom-line results took a hit from the drop in
originations (lowering fee income) and the increase in loan-loss
provisions resulting from the portfolio quality deterioration. S&P
expects a similar trend for 2024, as we believe that a decreasing
loan portfolio, coupled with higher funding costs, would continue
eroding GFMega's already weak margins.

S&P believes that GFMega's NPLs could rise, which would increase
the cost of risk and further weaken overall profitability. The
latter would eventually erode the company's capital base and
solvency indicators.




===========================================================
S T .   V I N C E N T   A N D   T H E   G R E N A D I N E S
===========================================================

ST. VINCENT & GRENADINES: Economy Faces Challenges Amid High Debt
-----------------------------------------------------------------
An IMF staff team, led by Ms. Nan Geng, visited Kingstown during
April 23 - May 7, 2024, for the 2024 Article IV consultation
discussions on economic developments and macroeconomic policies.
The team issued the following statement:

St. Vincent and the Grenadines has achieved a robust recovery from
recent compounded shocks, supported by the authorities' decisive
policy responses, large-scale investment projects, and robust
growth in tourism. The outlook is favorable but subject to downside
risks mainly stemming from the uncertain external environment. In
addition, the economy is facing challenges from a rapidly ageing
population and the ever-present threat of natural disasters and
climate change, amid the still high public debt. Policies need to
be calibrated to continue to build buffers and resilience and
support sustainable and inclusive growth while safeguarding debt
sustainability and financial sector stability.

Recent Developments, Outlook, and Risks

The economy rebounded strongly in 2022-23, returning to
pre-pandemic output levels. Growth reached 3.1 percent in 2022 and
is estimated to have accelerated to 5.8 percent in 2023. This was
supported by large public and private investment and a robust
recovery of tourism, which were partly offset by a drop in
agriculture due to lingering effects from volcanic eruptions and
the historic high temperature in 2023. Stayover arrivals approached
pre-pandemic levels in 2023 supported by significant improvement in
airlift. Formal employment surpassed pre-pandemic levels in 2022
and is estimated to have continued to grow in 2023, fueled by the
recovery in tourism and higher demand in other services.
Nevertheless, recent compounded shocks have left a lasting negative
impact on employment of young men. As regards public finances, even
though non-interest current spending was significantly reduced, the
fiscal deficit is estimated to have widened in 2022-23 largely due
to the phasing of port-related spending and temporary factors.
Public debt declined from its peak in 2021 to about 87 percent of
GDP in 2023 but remains well above pre-pandemic levels. The
external position improved in 2022-23 supported by recovery in
goods exports and tourism receipts.

The outlook is favorable though subject to downside risks. Growth
is projected at 4.9 percent in 2024, which implies that economic
activity would surpass the level projected for the medium term
before the pandemic. Near-term growth will be supported by
continued recovery in tourism and strong investment on
infrastructure, particularly the port project. Inflation is
projected to ease to around 2 percent by end-2024, on account of
lower imported inflation. Risks to the outlook stem primarily from
an abrupt global slowdown, commodity price volatility, potential
delays in investment projects, and the ever-present threat of
natural disasters and climate change. On the upside,
stronger-than-expected tourism development and agriculture sector
recovery could enhance growth and improve the external position.

Support Resilient and Inclusive Growth and Safeguard Debt
Sustainability Through a More Efficient Tax and Expenditure
Framework

The fiscal stance embedded in the 2024 budget strikes an
appropriate balance between maintaining fiscal prudence and
supporting inclusive and resilient growth. The government continues
to rationalize current spending and build the Contingencies Fund
while prioritizing capital spending on reconstruction, essential
upgrade and resilience building of economic infrastructure, and
health and education investments to propel people-centered and
sustainable growth.

The team welcomes the authorities' continued commitment to reaching
the regional debt target and the medium-term fiscal strategy set
out in the 2021 Rapid Credit Facility. This includes further
strengthening tax administration, continued containment of the
growth of wages (as manifested in the prudent public sector wage
growth over 2023-25 agreed in the recent round of negotiation) and
non-priority current spending, and prioritizing capital programs to
balance the needs for a resilient recovery with safeguarding debt
sustainability. As such, the primary balance is expected to improve
to a surplus of about 3¼ percent of GDP from 2026 once the
large-scale projects are near completion. This would put the
debt-to-GDP ratio on a downward path from 2025 and, if sustained,
reach 60 percent before the regional target date of 2035.

The elevated global uncertainty and the country's high
vulnerability to shocks call for contingency planning and stronger
fiscal buffers. The team welcomes the authorities' adoption of a
Disaster Risk Financing Strategy and the ongoing efforts to
establish a new Catastrophe Deferred Drawdown Option of US$20
million with the World Bank and contingency budgetary planning for
disaster responses and resilience activities. In addition to these
efforts, bringing the primary surplus to around 3¾ percent of GDP
in the medium term (about ½ percentage above the current
medium-term target) would build a safety margin for public debt to
guard against risks and meet the regional debt target and debt
sustainability with a higher probability.

Continued efforts to build a more efficient and equitable tax and
expenditure framework will help create space to withstand shocks
and support resilient and inclusive growth. Significant work is
underway to improve the efficiency and inclusiveness of public
spending and services and should be sustained, including
modernizing the social assistance system, digitalizing government
infrastructure, platforms, and services, adopting gender-responsive
budgeting, and implementing the recommendations from IMF's Public
Investment Management Assessment with a Climate Module (C-PIMA). On
the revenue side, the efficiency and progressivity of the tax
system can be improved while enhancing revenue by drawing on the
comprehensive roadmap for tax reforms from recent IMF technical
assistance. The proposed reform roadmap includes enhancing the
progressivity and fairness of personal income tax, improving the
design of tax incentives and corporate income tax, streamlining
value-added tax (VAT), and modernizing recurrent property tax.

Coordinated reforms to the National Insurance Services and Public
Sector Pension System (PSPS) are needed to improve their
efficiency, sustainability, and fairness. The team welcomes the
recently launched pension reform package to bolster the National
Insurance Services' (NIS) financial sustainability in view of the
rapid population ageing and the still low contributions compared to
generous payouts. Additional measures to ensure NIS's long-term
sustainability and further enhance its efficiency and fairness
could be considered, including linking retirement age to life
expectancy and applying a uniform accrual rate across years to
promote long careers. Reforming the non-contributory PSPS to better
align it with the NIS is urgently needed to improve fairness and
reduce fiscal costs.

Continued strengthening of fiscal institutions is key to underpin
fiscal efforts and reinforce fiscal credibility. The government is
stepping up efforts to enhance revenue administration, including
through the recent initiative to enforce VAT for private home
vacation rentals, modernizing the Customs Act, and digitalizing the
tax information management system. The team welcomes the
publication of the Fiscal Responsibility Mechanism's (FRM) first
report, pursuant to the Fiscal Responsibility Framework (FRF)
adopted in 2020. In view of the tight global financial conditions
and still elevated debt level, it will be important to further
strengthen the FRF and signal a credible medium-term fiscal plan,
including by recalibrating and fully operationalizing the FRF,
timely publishing and incorporating forward-looking budgetary
advice into the FRM report, improving the budget process and
medium-term fiscal planning, and strengthening SOE oversight and
the cash management system.

Build Climate Resilience and Advance Structural Reforms to Promote
Investment, Employment, and Productivity

Sustained efforts to address supply-side bottlenecks would help
unleash a higher growth potential. Ongoing investment on critical
public infrastructure, including the port, roads, airports, water
supply, and agriculture production, along with the development of
sectoral strategies guided by the National Development Plan, is
instrumental in alleviating structural bottlenecks, improving
competitiveness, and releasing the country's full potential of
comparative advantage on tourism and agriculture. Strengthening
linkages with agriculture and fisheries will help increase the
domestic value-added of tourism. In addition, with relatively high
internet access and low cost, the country is well-positioned to
benefit from the ongoing digital transformation of government,
business, and financial infrastructure and services. This
transformation is expected to enhance productivity and the business
environment. Ongoing efforts to streamline the Investment Act and
establish single windows for land registration and trade are
critical to improve the investment climate.

A well-functioning labor market, with skills attuned to market
needs and higher participation, is critical for boosting
productivity and employment, especially in view of the rapid
population ageing. The team welcomes the establishment of the Prime
Ministerial Advisory Council on Youth and the recently launched
comprehensive education reform with focuses on curriculum reforms
and expansion of post-secondary and technical and vocational
education and training, which will help reduce skill mismatches and
integrate the youth into the labor market. Recent strengthening of
parental leaves would encourage participation and formality and
reduce gender gaps. Targeted social investments could further help
unleash the full potential of the female labor force, including by
enhancing access to affordable and quality child and elderly care
and reducing adolescent pregnancy. The team welcomes the planned
introduction of a permanent unemployment insurance, but it needs to
be carefully designed and complemented by continued strong efforts
in active labor market policies to ensure the scheme's
sustainability and achieve the desired labor market outcomes.

Building resilience to natural disasters and climate change remains
a priority. The authorities have stepped up efforts to strengthen
structural and financial resilience, including by incorporating
resilience feature into new infrastructure, adopting a Disaster
Risk Financing Strategy, tapping Green Climate Fund, and enhancing
the disaster management plan and legislation. Efforts to transition
to renewable energy are ongoing, including the introduction of new
solar projects and a new revenue-neutral import tax regime to
promote cleaner motor vehicles. Ongoing work to modernize the
Electricity Act and update the National Energy Policy would help
provide an enabling environment to support the transition.

Maintain Financial Sector Stability

The financial system remains sound, but efforts should continue to
reduce balance sheet vulnerabilities. Capital and liquidity buffers
are ample. Non-performing loans (NPLs) have declined from the 2022
peak and remain below regional averages, with no significant impact
from the expiration of the pandemic moratorium. Banks'
profitability has fully recovered to pre-pandemic levels, but
provisioning levels-while above the regional average-fall below the
new regional requirement and should be bolstered and disposal of
long-dated NPLs accelerated. Despite the still relatively small
size of credit union loans compared to those of banks, the
increasing role of the less stringently regulated credit union
sector in credit provision warrants continued vigilance in
oversight of asset quality and underwriting standards, especially
in the absence of resolution frameworks and financial safety nets.

Building on past achievements, the authorities should sustain the
efforts to strengthen regulatory and supervisory frameworks and
improve crisis preparedness. Priorities include (i) completing the
transition to risk-based supervision, including incorporating
climate risks, (ii) adopting amendments to the FSA Act, (iii)
establishing a National Crisis Committee to develop a crisis
management framework for the non-bank financial sector and deposit
insurance schemes in consultation with the Ministry of Finance and
the Eastern Caribbean Central Bank (ECCB), and (iv) supporting the
establishment of an ECCU regional standards setting body for
non-bank financial institutions.

Continued strengthening of the effectiveness of the AML/CFT
framework remains important to minimize the risks of losing
correspondent banking relationships. The authorities have updated
the Anti-Money Laundering and Combating the Financing of Terrorism
(AML/CFT) legal framework and started implementing risk-based
supervision for some of the higher-risk sectors. Efforts should
continue to implement other recommendations of the 2024 Caribbean
Financial Action Task Force (CFATF) Mutual Evaluation.

The IMF mission would like to thank the authorities, private sector
counterparts and other stakeholders for their warm hospitality and
the candid and constructive discussions.



                           *********


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 * * *