/raid1/www/Hosts/bankrupt/TCRLA_Public/250212.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
L A T I N A M E R I C A
Wednesday, February 12, 2025, Vol. 26, No. 31
Headlines
A R G E N T I N A
ARGENTINA: Data Shows 185,000 Jobs Lost in Milei's First 12 Months
ARGENTINA: Milei Considers Taking Country Out of Paris Deal
B A H A M A S
FTX TRADING: Objection to Unverified Customer Claims Sustained
B R A Z I L
BRAZIL: Central Bank Raises Alert on Near-Term Inflation Woes
C H I L E
CHILE: IMF Says Economy's Imbalances Have Been Largely Resolved
D O M I N I C A N R E P U B L I C
DOMINICAN REPUBLIC: MCIM Ensures LPG Availability Amid Closures
J A M A I C A
JAMAICA: BOJ Pumps US$90 Million Into Forex Market
M E X I C O
BBVA MEXICO: Fitch Assigns 'BB' Final Rating on Tier 2 Sub. Notes
MEGA NEWCO: Gets Cautious OK For UK Reorg. of US Debt
T R I N I D A D A N D T O B A G O
PORT OF SPAIN: Fitch Gives BB Foreign Currency IDR, Outlook Stable
V E N E Z U E L A
CITGO PETROLEUM: Proving a Tough Sell for Bidders
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A R G E N T I N A
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ARGENTINA: Data Shows 185,000 Jobs Lost in Milei's First 12 Months
------------------------------------------------------------------
Buenos Aires Times reports that more than 185,000 formal jobs were
lost in the first 12 months of President Javier Milei's government
amid widespread austerity, spending cuts and the halting of all
public works projects.
According to data from the Labour Secretariat spanning December
2023 to November 2024, registered private-sector employment fell by
119,000, dropping from 6.38 million to 6.26 million workers, the
report notes.
Meanwhile, public-sector employment shrank by 51,000 (from
3,484,000 to 3,433,000), with domestic workers also falling by
15,000 (from 464,000 to 449,000), according to Buenos Aires Times.
By contrast, the number of self-employed workers under the
monotributo self-employed scheme increased, but by 25,000 (from
2,037,000 to 2,062,000), Buenos Aires Times relays.
In November 2023, registered employment declined by 0.1 percent on
a monthly basis, equating to 16,500 fewer workers. Coming on the
back of a similar drop in October, data indicates that while there
has been a slowdown in job losses, a recovery is not yet evident,
Buenos Aires Times says.
Formal employment has either contracted or stagnated in 11 of the
first 12 months of the Milei administration, which took place in
December 2023, Buenos Aires Times recalls.
Private-sector job creation in November amounted to just 2,400 new
positions, Buenos Aires Times notes.
The report highlights that formal employment growth over the past
four months has been "modest" compared to the sharp contractions
seen in previous months, Buenos Aires Times discloses.
In other words, while the economy is beginning to recover, this has
not yet translated into increased labour demand, Buenos Aires Times
relays.
Formal employment continues to fluctuate on a month-to-month basis
and has yet to stabilise. While net job creation accelerated in
September and October compared to August, it slowed again in
December, returning to levels similar to those recorded in August,
the report states, Buenos Aires Times says.
According to data from the Labour Indicators Survey (EIL),
private-sector employment fell by 0.2 percent in December compared
to the previous month, a drop authorities attributed to "seasonal
factors," Buenos Aires Times notes.
Buenos Aires Times discloses that the report also notes that
private-sector employment grew slightly only in the manufacturing
industry (0.1 percent) yet remained stagnant in trade, restaurants,
and hotels (zero percent).
Decreases were seen in transport, financial services, and social
services (ranging between zero and minus 0.5 percent), though fell
most sharply in construction (minus 1.9 percent), Buenos Aires
Times notes.
The Labour Secretariat report also reveals that from December 2023
to October 2024, average registered salaries saw year-on-year
variations that ran below inflation in every month, Buenos Aires
Times relays. It was only in November that wage growth outpaced
inflation for the first time, Buenos Aires Times says.
The average gross nominal salary in November 2024 was a monthly 1.4
million pesos, reflecting a 172.8 percent increase compared to the
same month the previous year, while inflation stood at 166 percent
over the same period, Buenos Aires Times 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.
In March 2022, the International Monetary Fund (IMF) approved a new
30-month arrangement under an Extended Fund Facility for Argentina
in the amount of SDR 31.914 billion (equivalent to US$44 billion,
or 1000 percent of quota). The IMF Executive Board's decision
allowed the authorities an immediate disbursement of an equivalent
of US$9.65 billion in March 2022.
Argentina's IMF-supported program seeks to improve public finances
and start to reduce persistent high inflation through a
multi-pronged strategy, involving a gradual elimination of monetary
financing of the fiscal deficit and enhancements in the monetary
policy framework.
In June 2024, the IMF Board completed an eighth review of the
Extended Arrangement under the Extended Fund Facility for
Argentina. The IMF Board's decision enabled a disbursement of
around US$800 million to support the authorities' efforts to
entrench the disinflation process, rebuild fiscal and external
buffers, and underpin the recovery.
On Jan. 8, 2025, Moody's Ratings raised Argentina's local currency
ceiling to B3 from Caa1 and the foreign currency ceiling to Caa1
from Caa3. Moody's said the decision to raise the local and
foreign currency ceilings reflects the increased predictability and
the greater consistency in economic policy that has led to a rapid
reduction in monetary and fiscal imbalances that were stoking very
high inflation.
On Nov. 15, 2024, Fitch Ratings upgraded Argentina's Long-Term
Foreign-Currency Issuer Default Rating (IDR) to 'CCC' from 'CC',
and its Long-Term Local-Currency IDR to 'CCC' from 'CCC-'.
Argentina's upgrade to 'CCC' from 'CC' reflects developments that
have improved Fitch's confidence in the authorities' ability to
make upcoming foreign-currency bond payments without seeking relief
of some sort.
S&P, in March 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 S&P ratings have
been affirmed as of August 2024. S&P said the stable outlook on
the long-term ratings balances the risks posed by pronounced
economic imbalances and other uncertainties with recent progress in
making fiscal adjustments, reducing inflation, and undertaking
structural reforms to address long-standing microeconomic
weaknesses that have contributed to poor economic performance for
many years that it would likely consider to be distressed.
DBRS, Inc. upgraded Argentina's Long-Term Foreign and Local
Currency Issuer Ratings to B (low) from CCC on November 25, 2024.
The trend on all ratings is Stable.
ARGENTINA: Milei Considers Taking Country Out of Paris Deal
-----------------------------------------------------------
Buenos Aires Times reports that just days after announcing its
departure from the World Health Organization, President Javier
Milei could be about to make another high-profile multilateral
withdrawal.
Milei, 54, revealed in an interview published that he is analysing
whether to withdraw Argentina from the Paris Climate Agreement,
according to Buenos Aires Times.
Denouncing the historic climate deal – adopted in 2015 by 195
parties to curb greenhouse gas emissions driving climate change –
as a "fraud" of "cultural Marxism," Milei told French newspaper Le
Point that he is considering withdrawal, the report notes.
Earlier, Milei announced that Argentina would be leaving the WHO,
following in the footsteps of US President Donald Trump, the report
says. The Republican leader has already withdrawn the United
States from the Paris climate accords, the report notes.
The Paris Agreement is a legally binding international treaty on
climate change, the report says. Its goal is to limit global
warming to well below two degrees Celsius, preferably to 1.5
degrees Celsius, compared to pre-industrial levels, the report
relays.
Back in 2016, during then-president Mauricio Macri's government,
Argentina ratified the agreement and has adhered to it ever since,
the report recalls.
If Milei follows through with the withdrawal, Argentina will join
the United States, Iran, Libya, and Yemen as the only UN member
states that are not part of the climate pact, the report notes.
Milei's statements to the French newspaper echo those of Trump, who
withdrew the United States from the Paris Agreement during his
first term, though without leaving the United Nations Framework
Convention on Climate Change, the report discloses.
Trump's successor, Joe Biden, restored Washington as a signatory to
the deal, but on the first day of his second term last month, Trump
ordered a fresh withdrawal.
"I do not agree with the environmentalist agenda, which I consider
a complete fraud. The way we talk about climate change today is
entirely wrong," Milei told Le Point, the report says.
Arguing that global warming "has nothing to do with human
presence," Milei argued that climate change is linked to the
planet's natural temperature cycles, the report relays.
"This agenda is inspired by cultural Marxism, which sees human
beings as the oppressors and the environment as the oppressed," he
said, the report discloses.
"Nowadays, if you don't talk about climate change, they label you a
flat-earther or a conspiracy theorist, and as a result, they censor
and silence you. This is the censorship of wokeism that is gagging
us, which I denounced" at the World Economic Forum in Davos,
Switzerland, he concluded, the report notes.
Critics warn the Paris withdrawal undermines global cooperation on
reducing fossil fuel use and could embolden major polluters like
China and India to weaken their commitments, the report relays.
There is an overwhelming scientific consensus linking fossil fuel
combustion to rising global temperatures and increasingly severe
climate disasters, 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.
In March 2022, the International Monetary Fund (IMF) approved a new
30-month arrangement under an Extended Fund Facility for Argentina
in the amount of SDR 31.914 billion (equivalent to US$44 billion,
or 1000 percent of quota). The IMF Executive Board's decision
allowed the authorities an immediate disbursement of an equivalent
of US$9.65 billion in March 2022.
Argentina's IMF-supported program seeks to improve public finances
and start to reduce persistent high inflation through a
multi-pronged strategy, involving a gradual elimination of monetary
financing of the fiscal deficit and enhancements in the monetary
policy framework.
In June 2024, the IMF Board completed an eighth review of the
Extended Arrangement under the Extended Fund Facility for
Argentina. The IMF Board's decision enabled a disbursement of
around US$800 million to support the authorities' efforts to
entrench the disinflation process, rebuild fiscal and external
buffers, and underpin the recovery.
On Jan. 8, 2025, Moody's Ratings raised Argentina's local currency
ceiling to B3 from Caa1 and the foreign currency ceiling to Caa1
from Caa3. Moody's said the decision to raise the local and
foreign currency ceilings reflects the increased predictability and
the greater consistency in economic policy that has led to a rapid
reduction in monetary and fiscal imbalances that were stoking very
high inflation.
On Nov. 15, 2024, Fitch Ratings upgraded Argentina's Long-Term
Foreign-Currency Issuer Default Rating (IDR) to 'CCC' from 'CC',
and its Long-Term Local-Currency IDR to 'CCC' from 'CCC-'.
Argentina's upgrade to 'CCC' from 'CC' reflects developments that
have improved Fitch's confidence in the authorities' ability to
make upcoming foreign-currency bond payments without seeking relief
of some sort.
S&P, in March 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 S&P ratings have
been affirmed as of August 2024. S&P said the stable outlook on
the long-term ratings balances the risks posed by pronounced
economic imbalances and other uncertainties with recent progress in
making fiscal adjustments, reducing inflation, and undertaking
structural reforms to address long-standing microeconomic
weaknesses that have contributed to poor economic performance for
many years that it would likely consider to be distressed.
DBRS, Inc. upgraded Argentina's Long-Term Foreign and Local
Currency Issuer Ratings to B (low) from CCC on November 25, 2024.
The trend on all ratings is Stable.
=============
B A H A M A S
=============
FTX TRADING: Objection to Unverified Customer Claims Sustained
--------------------------------------------------------------
Judge John T. Dorsey of the United States Bankruptcy Court for the
District of Delaware sustained the one hundred thirtieth omnibus
objection FTX Trading Ltd. and its affiliated debtors and
debtors-in-possession to unverified customer entitlement claims.
The Debtors seek to disallow and expunge in their entirety the
Unverified Claims set forth in Schedule 1.
The Court determined that the relief requested in the Objection is
in the best interests of the Debtors and their estates.
The Court found that the legal and factual bases set forth in the
Objection establish just cause for the relief granted herein.
In the event that the Original Holder of an Unverified Claim listed
on Schedule 1 does not commence the KYC submission process with
respect to such Unverified Claim on or prior to March 1, 2025 at
4:00 p.m. (ET), such Unverified Claim shall be disallowed and
expunged in its entirety.
In the event that the Original Holder of an Unverified Claim listed
on Schedule 1 does not submit all KYC information requested by the
Debtors or their KYC vendors on or prior to June 1, 2025 at 4:00
p.m. (ET), such Unverified Claim shall be disallowed and expunged
in its entirety.
If the Original Holder of an Unverified Claim listed on Schedule 1
both (a) commences the KYC submission process with respect to such
Unverified Claim on or prior to the KYC Commencing Deadline and (b)
submits all requested KYC information requested by the Debtors or
their KYC vendors on or prior to the KYC Submission Deadline, the
Debtor shall deem such Unverified Claim to be removed from Schedule
1 and shall consider the Objection resolved with respect to such
Unverified Claim.
Upon expiration of the KYC Commencing Deadline and the KYC
Submission Deadline, as applicable, the Debtors shall file a notice
of expungement with the Court attaching a schedule of all
Unverified Claims that are disallowed and expunged in their
entirety pursuant to paragraphs 2 and 3 of this Order.
To the extent that an Unverified Claim in Schedule 1 had been
transferred to a different Holder of record on or before July 13,
2023 when the customer claims portal went online, then the Debtors
shall permit such secondary Holder of such Unverified Claim a
reasonable opportunity to submit original source KYC information
under penalty of perjury on the Original Holder's behalf for the
Debtors' consideration, subject to the Debtors conducting sanctions
screening on the Original Holder, prior to disallowing and
expunging such Unverified Claim pursuant to paragraphs 2 or 3 of
this Order.
The rights of the Debtors and all holders of Claims are reserved in
the event KYC information is completed by the KYC Submissions
Deadline but cannot be validated or is otherwise rejected by the
Debtors.
Should one or more of the grounds of objection stated in the
Objection be dismissed, the Debtors' right to object on any other
grounds that the Debtors discover are preserved.
To the extent a response is filed regarding any Unverified Claim,
each such Unverified Claim, and the Objection as it pertains to
such Unverified Claim, will constitute a separate contested matter
as contemplated by Bankruptcy Rule 9014. This Order will be deemed
a separate order with respect to each Unverified Claim. Any stay of
this Order pending appeal by any claimants whose claims are subject
to this Order shall only apply to the contested matter which
involves such claimant and shall not act to stay the applicability
and/or finality of this Order with respect to the other contested
matters listed in the Objection or this Order.
A copy of the Court's decision dated Feb. 3, 2025, is available at
https://urlcurt.com/u?l=tCVV1x from PacerMonitor.com.
About FTX Trading Ltd.
FTX is the world's second-largest cryptocurrency firm. FTX is a
cryptocurrency exchange built by traders, for traders. FTX offers
innovative products including industry-first derivatives, options,
volatility products and leveraged tokens.
Then CEO and co-founder Sam Bankman-Fried said Nov. 10, 2022, that
FTX paused customer withdrawals after it was hit with roughly $5
billion worth of withdrawal requests.
Faced with liquidity issues, FTX on Nov. 9 struck a deal to sell
itself to its giant rival Binance, but Binance walked away from the
deal amid reports on FTX regarding mishandled customer funds and
alleged US agency investigations.
At 4:30 a.m. on Nov. 11, Bankman-Fried ultimately agreed to step
aside, and restructuring vet John J. Ray III was quickly named new
CEO.
FTX Trading Ltd (d/b/a FTX.com), West Realm Shires Services Inc.
(d/b/a FTX US), Alameda Research Ltd. and certain affiliated
companies then commenced Chapter 11 proceedings (Bankr. D. Del.
Lead Case No. 22-11068) on an emergency basis on Nov. 11, 2022.
Additional entities sought
Chapter 11 protection on Nov. 14, 2022.
FTX Trading and its affiliates each listed $10 billion to $50
million in assets and liabilities, making FTX the biggest
bankruptcy filer in the US this year. According to Reuters, SBF
shared a document with investors on Nov. 10 showing FTX had $13.86
billion in liabilities and $14.6 billion in assets. However, only
$900 million of those assets were liquid, leading to the cash
crunch that ended with the company filing for bankruptcy.
The Hon. John T. Dorsey is the case judge.
The Debtors tapped Sullivan & Cromwell, LLP as bankruptcy counsel;
Landis Rath & Cobb, LLP as local counsel; and Alvarez & Marsal
North America, LLC as financial advisor. Kroll is the claims
agent,
maintaining the page https://cases.ra.kroll.com/FTX/Home-Index
The official committee of unsecured creditors tapped Paul Hastings
as bankruptcy counsel; Young Conaway Stargatt & Taylor, LLP as
Delaware and conflicts counsel; FTI Consulting, Inc. as financial
advisor; and Jefferies, LLC as investment banker.
Montgomery McCracken Walker & Rhoads LLP, led by partners Gregory
T. Donilon, Edward L. Schnitzer, and David M. Banker, is
representing Sam Bankman-Fried in the Chapter 11 cases.
White-collar crime specialist Mark S. Cohen has reportedly been
hired to represent SBF in litigation. Lawyers at Paul Weiss
previously represented SBF but later renounced representing the
entrepreneur due to a conflict of interest.
===========
B R A Z I L
===========
BRAZIL: Central Bank Raises Alert on Near-Term Inflation Woes
-------------------------------------------------------------
globalinsolvency.com, citing Bloomberg News, reports that
Brazil's central bank said annual inflation will run above the
tolerance range for the next six months, as food prices rise
significantly and services costs remain elevated despite aggressive
interest rate hikes.
There will be a target breach with June 2025 inflation under the
new framework, central bankers wrote in the minutes to their Jan.
28-29 policy meeting, when they stuck with prior guidance and
lifted the Selic to 13.25%, according to globalinsolvency.com.
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.
In October 2024, Moody's Ratings upgraded the Government of
Brazil's long-term issuer and senior unsecured bond ratings to Ba1
from Ba2, the senior unsecured shelf rating to (P)Ba1 from (P)Ba2;
and maintained the positive outlook. S&P Global Ratings raised on
Dec. 19, 2023, its long-term global scale ratings on Brazil to
'BB' from 'BB-'. Fitch Ratings affirmed on Dec. 15, 2023, Brazil's
Long-Term Foreign-Currency Issuer Default Rating (IDR) at 'BB' with
a Stable Outlook. DBRS' credit rating for Brazil was last reported
at BB with stable outlook at July 2023.
=========
C H I L E
=========
CHILE: IMF Says Economy's Imbalances Have Been Largely Resolved
---------------------------------------------------------------
The Executive Board of the International Monetary Fund (IMF)
concluded the Article IV consultation[1] with Chile on February 3,
2025 and endorsed the staff appraisal without a meeting on a
lapse-of-time basis.
The economy's imbalances have been largely resolved. Real GDP is
expected to expand by 2.2 percent in 2024, close to its potential
pace, driven by the strong mining and service exports, and 2-2.5
percent in 2025, related to an expected recovery in domestic
demand. However, the recovery has been uneven across industries,
with the construction sector lagging and the unemployment rate
remaining high. Inflation is set to return to the 3-percent target
in early 2026, after the impact of the significant increase in
electricity tariffs between June 2024 and early 2025 subsides. The
current account deficit has continued to narrow and is projected to
reach around 2½ percent of GDP in 2024 and 2025.
External risks and uncertainty remain elevated. The commodity price
volatility linked to the economic outlook of Chile's main trading
partners and the pace of the global green transition is a key
external risk. Moreover, the uncertainty surrounding monetary and
fiscal policies in advanced economies could lead to tight financial
conditions for longer periods of time and higher financial
volatility. Domestically, concerns about crime, migration, and
inequality persist; and political polarization is hindering the
structural reform progress.
Policies have supported macroeconomic stability. The Central Bank
of Chile lowered the monetary policy rate by 325 basis points since
January 2024 to 5 percent in December 2024. The headline fiscal
deficit is projected to reach 2.7 percent of GDP in 2024 due to a
notable revenue underperformance and despite significant spending
restraint compared to the budget. The 2025 budget envisions a
notable deficit reduction within a medium-term fiscal plan toward a
broadly balanced fiscal position by 2027. By setting the neutral
level of the countercyclical capital buffer at 1 percent of
risk-weighted assets with a gradual and state-contingent
implementation path from the current level of 0.5 percent, the
Central Bank of Chile has provided banks with planning certainty
for strengthening financial resilience.
Executive Board Assessment
The economy is broadly balanced but external risks are elevated.
Chile's macroeconomic position is sound due to its very strong
fundamentals, policies, and policy frameworks. Real GDP is growing
around its potential and inflation is expected to reach the
3-percent target in early 2026. The current account deficit has
continued to narrow, and the 2024 external position is assessed as
moderately weaker than implied by medium-term fundamentals. Public
debt is still relatively low and sustainable with high probability.
However, the external environment is unstable and uncertain, which
calls for policies that further strengthen economic buffers to
provide additional policy space for future shocks.
Lifting Chile's growth potential is a must to raise living
standards and tackle social and fiscal pressures. Taking a
consultative approach, the government is advancing several growth
initiatives, including: (i) expediting investment permit
applications and environmental evaluations to encourage investment,
(ii) fostering the development of emerging industries, particularly
those related to renewable energy to maximize the benefits from the
global green transition, and (iii) facilitating R&D. Swift and
consistent implementation of these initiatives is crucial,
especially in rationalizing the regulatory burden and improving
essential infrastructure. Additionally, better integrating women
into the labor market could partially offset the unfavorable
demographic trends. The proposed new development bank requires a
targeted mandate, sound risk management practices, and robust
corporate governance.
The goal of a broadly balanced fiscal position by 2027 remains
appropriate but has become more challenging. The authorities'
commitment to fiscal restraint by adjusting spending plans in 2024
and 2025 is welcome. To achieve a balanced fiscal position over the
next three years, a gap of at least 1 percent of GDP needs to be
filled. This could be achieved largely from the important tax
compliance law if its implementation yields the planned additional
revenue and is not used for new spending initiatives. It is
therefore crucial to carefully monitor developments in tax
compliance and remain flexible to adjust current spending in case
revenue mobilization falls short of plans, while aiming to preserve
public investment outlays in support of medium-term growth.
Ensuring that any structural spending increases align with higher
structural revenues is vital for fiscal sustainability, while
unifying fragmented social programs could enhance access and
effectiveness for the most vulnerable.
Continuous enhancements to Chile's already very strong fiscal
framework would foster fiscal policy formulation and transparency.
For instance, providing more details on debt-creating flows outside
the fiscal deficit ("below-the-line" items) would strengthen the
monitoring of fiscal pressures. Updating fiscal forecasting
methods, in line with the government's plans, could improve revenue
projections in the context of economic and policy shifts. Adopting
a medium-term strategy to rebuild the size of the Economic and
Social Stabilization Fund (ESSF) would help provide resources to
respond to future shocks. Finally, simplifying the presentation of
the fiscal targets and budget execution in the Public Finance
Report could deepen the understanding of the fiscal balance rule
framework.
A pension reform is essential to ensure adequate pensions and
address the fiscal costs of population aging. Raising contribution
rates and the number of contribution periods is vital for
sustainably self-financing old-age pensions. The minimum guaranteed
pension (PGU) has strengthened the system's solidarity, increased
replacement ratios, and reduced old-age poverty, but it also incurs
high fiscal costs. With the ratio of pensioners to the working-age
population set to nearly double in two decades, it is crucial to
manage public spending pressures while maintaining a solid safety
net. Targeting the PGU to the most vulnerable elderly, linking the
retirement age to life expectancy, and implementing the proposed
unemployment insurance for pension contributions could further
strengthen the system.
A cautious data dependent approach to the pace of monetary policy
easing is warranted. The BCCh's monetary policy adjustments have
been in line with its inflation-targeting framework. The real
monetary policy rate is close to its estimated neutral range. With
near-term inflation risks tilted to the upside, future cuts to the
policy rate should remain contingent on evidence that inflation is
heading decisively back to its target.
Rebuilding international reserve buffers is important for enhancing
resilience. While the flexible exchange rate plays a critical role
as a shock absorber, the Central Bank of Chile's access to
international liquidity can provide an additional shield against
potential external shocks. This underscores the importance of
incorporating a comprehensive international liquidity framework
into the central bank's longer-term financial stability strategy.
The strategy and operational design should continue to follow high
transparency standards, be persistent and robust to changes in
external risks, and minimize distortions in the foreign exchange
market.
The financial system remains resilient despite rising
vulnerabilities related to the real estate sector and lower
financial market depth. The real estate sector is expected to
recover modestly as long-term interest rates gradually decline, and
there are several mitigants to credit risk associated with lending
to this sector. Nevertheless, supervisors need to carefully monitor
banks and insurers' portfolio quality and buffers, including by
closing commercial real estate data gaps and enhancing stress test
models. Rebuilding the depth of local financial markets by
increasing pension contributions, which would increase the pool of
investable savings, is important to help reduce market volatility
and sensitivity to shocks.
Financial sector policies need to continue reinforcing resilience.
The recent adoption of a positive neutral level of the
counter-cyclical capital buffer with a gradual and state-contingent
implementation provides banks with planning certainty. The ongoing
implementation of Basel III capital and liquidity requirements
needs to be completed. Prompt implementation of the Financial
Market Resilience Law would enhance the BCCh's ability to respond
to financial distress situations. Other priorities continue to
include adopting an industry-funded deposit insurance and a bank
resolution framework, providing budget independence to the CMF,
further enhancing bank corporate governance, and implementing the
Consolidated Debt Registry.
===================================
D O M I N I C A N R E P U B L I C
===================================
DOMINICAN REPUBLIC: MCIM Ensures LPG Availability Amid Closures
---------------------------------------------------------------
Dominican Today reports that the Dominican Republic Ministry of
Industry, Commerce, and SMEs (MICM) assured on Feb. 2, 2025 that
there is no risk of a Liquefied Petroleum Gas (LPG) shortage in the
country. This statement comes in response to reports from citizens
about several gas stations being out of service, the report
discloses.
According to the MICM, these closures are due to scheduled
maintenance by suppliers rather than issues with LPG availability,
according to Dominican Today. The ministry emphasized that it is
closely monitoring the sector and maintaining direct communication
with key stakeholders to ensure a stable supply nationwide, the
report notes.
Authorities reaffirmed their commitment to preventing disruptions
and addressing public concerns, reinforcing that the current
situation does not indicate a supply crisis, the report relays.
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.
Standard & Poor's credit rating for Dominican Republic was raised
to 'BB' in December 2022 with stable outlook. Moody's credit
rating for Dominican Republic was last set at Ba3 in August 2023
with the outlook changed to positive. Fitch, in December 2023,
affirmed the Dominican Republic's Long-Term Foreign-Currency Issuer
Default Rating (IDR) at 'BB-' and revised the outlook to positive.
=============
J A M A I C A
=============
JAMAICA: BOJ Pumps US$90 Million Into Forex Market
--------------------------------------------------
RJR News reports that the Bank of Jamaica (BOJ) intervened in
foreign exchange market with another US$30 million.
This follows interventions of similar amounts on Feb. 5 and 6,
according to RJR News.
It brings the bank's total intervention for the week to US$90
million, 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. In September 2023, S&P
Global Ratings raised 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', with a stable outlook. In September 2024, S&P
affirmed 'BB-/B' sovereign ratings on Jamaica and revised outlook
to positive. 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
===========
BBVA MEXICO: Fitch Assigns 'BB' Final Rating on Tier 2 Sub. Notes
-----------------------------------------------------------------
Fitch Ratings assigned a final rating of 'BB' to BBVA Mexico, S.A.,
Institucion de Banca Multiple, Grupo Financiero BBVA Mexico's (BBVA
Mexico) USD1 billion Tier 2 subordinated preferred capital notes.
The notes have a 10-year tenor and a 7.625% fixed rate. The bank
has the option to redeem the notes early once in the fifth year
after the issuance day. The proceeds will be used to strengthen
capital ratios and for general corporate purposes. These notes are
issued under BBVA Mexico's USD10 billion medium-term note program.
Key Rating Drivers
Rating three notches below BBVA Mexico's VR: BBVA Mexico's Tier 2
subordinated preferred capital notes 'BB' rating is three-notches
below the bank's 'bbb' viability rating, the anchor rating. Fitch
makes a two-notch downward adjustment to reflect loss-severity risk
and an additional one notch for nonperformance risk.
Poor Recoveries in a Liquidation Scenario: According to Fitch's
criteria, the two notch-adjustment for loss-severity (-2) indicates
the subordinated preferred debt status of the issuance and Fitch's
expectation of poor recovery prospects in a liquidation scenario
compared with the bank's senior debt. The notes are subordinated to
all senior debt, pari passu with all subordinated preferred debt,
and rank senior to subordinated nonpreferred debt and all classes
of capital stock.
Regulatory Mandatory Coupons Deferral: The one-notch adjustment for
nonperformance risk (-1) considers the mandatory deferral of
coupons. According to local regulations, interest deferral is
triggered at relatively high capitalization levels before a
write-down or point of non-viability (PONV) occurs.
Mandatory coupon deferral will be activated if the total regulatory
capital ratio (Indice de Capitalizacion [ICAP]) falls below 8% or
the Tier 1 capital ratio drops below 6%, in addition to the
applicable capital supplement (an additional 1.5% for BBVA Mexico
because it is a Domestic Systemically Important Bank). Coupon
deferral is also enforced if the Mexican regulator classifies BBVA
Mexico as "Class III" or "Class IV" bank under the Mexican
Capitalization Requirements or Early Warning System.
Good Capital Buffers: No additional notches are considered for
nonperformance, as the subordinated notes indicate that a
write-down or PONV would be triggered at a relatively low
threshold, specifically when the Common Equity Tier 1 (CET1) ratio
is at or below 4.5%. Fitch believes breaching a trigger event is
unlikely due to strong supervision by the local regulator and the
bank's effective capitalization management, supported by strong
internal capital generation.
Fitch expects the bank's CET1 ratio to remain adequate at around
15% in 2025. Strong internal capital generation should continue to
offset dividend payments (MXN59,200 million in 2024). This will
maintain comfortable capital buffers enhanced by Tier 2
subordinated bonds, which add extra loss-absorbing capacity and
assist the bank in fully complying with Total Loss-Absorbing
Capacity (TLAC) requirements.
BBVA Mexico is required to meet a minimum total capital ratio of
16.87% by December 2024 and 18.50% by December 2025, levels which
the bank currently exceeds. As of Dec. 2024, preliminary
information indicates CET1 and total capital ratios were 15.2% and
18.7%, respectively.
Fitch does not consider the parent's support to mitigate
nonperformance risk due to the Mexican bank's larger size relative
to Banco Bilbao Vizcaya Argentaria S.A.'s total assets, which Fitch
believes limits the parent's ability to support.
Rating Sensitivities
Factors that Could, Individually or Collectively, Lead to Negative
Rating Action/Downgrade
The rating of this issuance could be downgraded in the event of a
downgrade of BBVA Mexico's anchor rating.
Factors that Could, Individually or Collectively, Lead to Positive
Rating Action/Upgrade
The rating of this issuance could be upgraded in the event of an
upgrade of BBVA Mexico's anchor rating, and at all times the
notching down will be maintained.
Summary of Financial Adjustments
Fitch classified pre-paid expenses and other deferred assets as
intangibles and deducted them from total equity due to their low
loss-absorption capacity.
Date of Relevant Committee
Nov. 19, 2024
Sources of Information
The principal sources of information used in the analysis are
described in the Applicable Criteria.
Financial figures are in accordance to the Comision Nacional
Bancaria y de Valores criteria. Figures for 2024, 2023 and 2022
include accounting changes in the process to converge to
International Financial Reporting Standards. Prior years did not
include these changes and Fitch believes they are not directly
comparable.
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
----------- ------
BBVA Mexico, S.A.,
Institucion de Banca
Multiple, Grupo
Financiero BBVA
Mexico y subsidiarias
Subordinated LT BB New Rating
MEGA NEWCO: Gets Cautious OK For UK Reorg. of US Debt
-----------------------------------------------------
Ben Zigterman at law360.com reports that Mega Newco Limited, a
subsidiary of Operadora de Servicios Mega, SA de CV, SOFOM, ER,
incorporated in England and Wales, received Chapter 15 recognition
of its U.K. restructuring from a New York bankruptcy judge, who
expressed concern about the structure but said no creditors were
harmed by it.
=====================================
T R I N I D A D A N D T O B A G O
=====================================
PORT OF SPAIN: Fitch Gives BB Foreign Currency IDR, Outlook Stable
------------------------------------------------------------------
Fitch Ratings has assigned Port of Spain Waterfront Development
Limited (POSWDL) a first-time Long-Term Foreign Currency Issuer
Default Rating (IDR) of 'BB' with a Rating Outlook of Stable. Fitch
has also assigned ratings to POSWDL´s senior secured $500 million
expected issuance at 'BB', the same level as POSWDL´s rating.
The rating is based on the application of the Government-Related
Entities (GRE) Rating Criteria. Fitch views POSWDL as a GRE of
Trinidad and Tobago. POSWDL's IDR of 'BB' relies on a GRE score of
45 out of 60 points, which indicates a support category of
'virtually certain', leading to the equalization of its rating to
the credit quality of Trinidad and Tobago.
POSWDL operates as a proxy financing vehicle for the sovereign. It
issues debt for projects that are specific and strategically
important, and receives rents from the sovereign through a sublease
agreement for its facilities in the Port of Spain International
Waterfront Centre. Revenues from the sublease agreement are
designed to match POSWDL debt service and are deposited in a trust.
Rent is not subject to abatement if the Government of the Republic
of Trinidad and Tobago (GoRTT) is unable to use the property.
Fitch assesses POSWDL's expected senior secured $500 million bonds
at the same level as the issuer IDR. The expected proceeds will
repay a bank loan, complete certain capital improvements of the
POSWDL parent company, the Urban Development Corporation of
Trinidad and Tobago (UDeCOTT), and fund a debt service reserve
equal to six months of principal and interest.
KEY RATING DRIVERS
Support Score Assessment 'Virtually certain'
Fitch considers that extraordinary support from GoRTT to POSWDL
would be 'virtually certain' in case of need, reflecting a support
score of 45 (out of a maximum 60) under Fitch GRE criteria. This
reflects a combination of 'responsibility to support' and
'incentive to support' factors assessment as detailed below.
Responsibility to Support
Decision Making and Oversight 'Very Strong'
Decision making and oversight is assessed as 'Very Strong'
considering that POSWDL is a subsidiary of UDeCOTT, which is fully
owned and controlled by the GoRTT. The government tightly controls
the GRE and imposes significant requirements on POSWDL for the
execution of specific projects that are highly strategic.
Specifically, POSWDL acts as a proxy financing vehicle for the
sovereign, issuing debt to finance strategic projects through
UDeCOTT.
Precedents of Support 'Very Strong'
Precedents of Support is assessed as 'Very Strong' considering that
there is robust evidence that the government has provided
consistent support in the past to maintain the GRE's strong
financial profile and provided funding to match its debt
obligations.
The sublease agreement between POSWDL and the sovereign for the use
of Port of Spain International Waterfront Centre facilities is key
for this assessment, considering that it ensures funds will be
available through budgetary allocations to cover 100% of debt
service requirements. This same structure was used for the 2007
loan, which matured in early 2023, and will be the case for the
expected bond issuance as per the draft bond indenture and sublease
agreement.
The sublease agreement also establishes that, in the event the
property is damaged by fire or other casualty, GoRTT is obligated
to restore the property to at least its condition and value
preceding the casualty, whether or not insurance proceeds are
sufficient for that purpose. Rent is not subject to abatement if
GoRTT is unable to use the property.
Incentives to Support
Preservation of Government Policy Role 'N/A'
Fitch views the incentive to support of GoRTT for preservation of
government policy role as 'Not Applicable'. A POSWDL default should
not have a direct material impact over the continued provision of a
key public service. The complex is fully built and has been
operational for over a decade.
Moreover, a default by POSWDL should not lead to the loss of
valuable assets considering the nature of its operation. Lastly,
given the nature of POSWDL operations, Fitch does not foresee major
political implications of a default, which would be unlikely to
lead to significant public discontent.
Contagion Risk 'Very Strong'
Contagion risk is assessed as 'Very Strong' due to the fact that
POSWDL is a reference issuer for the financing market relevant for
its government, as attested by a 2007 loan and the new prospective
issuance.
The amount of issued debt is sizable compared with other GRE debt
of GoRTT, especially considering that the issuer will access the
international bond market. Moreover, POSWDL is a core government
entity, receiving support as per the sublease agreement with the
sovereign, and aligned to match its bond debt service schedule. The
bond indenture also includes cross-default provisions with the
sovereign through the sublease agreement.
The sovereign budget has a specific source of funds to comply with
sublease agreement rents used as collateral for the bond issuance.
Sublease rents are aligned with the debt service schedule and are
deposited in a trust to service debt for payment to bondholders.
Through the deed of assignment, supplemental to the trust indenture
and security Agreement, POSWDL assigns UMB Bank NA as the trustee
for the securities for the payment and discharge of secured
liabilities.
Operating Performance
POSWDL is a proxy for a financing vehicle for the GoRTT. Its
revenues originate from rent payments from the sublease agreement
with the sovereign for the use of Port of Spain International
Waterfront Centre facilities. Sublease payments are matched with
the bond debt service schedule. In fact, since fully amortizing the
2007 loan in early 2023, POSWDL reported no revenues as per the
2024 audited financial statements.
Once the new bonds issuance is executed, sublease payments will
start flowing in, matching the new debt service schedule. POSWDL
reports very low OPEX, mainly audit and legal fees, which leads to
operating margins close to 99% before payment of debt service.
Derivation Summary
The rating reflects Fitch's 'virtually certain' expectation of
extraordinary support to POSWDL by the sovereign, consistent with a
support score of 45 points (out of 60) under the GRE criteria.
Additionally, it reflects Fitch´s view that POSWDL´s credit
quality cannot be effectively de-linked from its supporting
government, the GoRTT, and hence no Standalone Credit Profile (SCP)
is assigned. The combination of 'virtually certain' expectation for
extraordinary support and no SCP result in the equalization of
POSWDL rating to the credit quality of its supporting government
under the GRE criteria.
POSWDL is a subsidiary of UDeCOTT, itself a GRE of the GoRTT. While
POSWDL ownership is clearly under UDeCOTT, Fitch looks through the
parent GRE and assesses POSWDL as a GRE of the sovereign. This
approach is based on POSWDL operating as a proxy of a financing
vehicle for the sovereign. Per the GRE criteria, financing vehicles
are typically exempt from SCP analysis. When an IDR is assigned, it
is equalized with the credit quality of the relevant entity within
the group, which is the GoRTT.
Debt Ratings
Fitch assigned POSWDL´s senior secured $500 million expected
issuance at 'BB', the same level as POSWDL rating.
POSWDL is seeking to issue bonds in the amount of $500 million with
a maturity of 15 years. Bonds will have a tailored amortization
that aligns with the bi-annual instalments of base rent (as per the
sublease agreement) used to service the notes and deposited with
the trustee, with fixed interest rate and semi-annual debt service
payments. Bonds are senior secured, ranking pari passu with all
existing and future senior secured indebtedness.
Proceeds will be used to repay a Scotiabank loan in the amount of
$150 million plus accrued interest (at the UDeCOTT level), fund the
debt service reserve account equal to six months interest and
principal, and complete capital improvements of projects/facilities
outside of the POSWDL development by UDeCOTT and its affiliates.
The bond has customary corporate bond covenants, including but not
limited to limitations on indebtedness, liens, restricted payments,
asset sales, transactions with affiliates and mergers
(consolidations and dispositions). The bond indenture also refers
to the head lease and sub-lease termination as a default event, and
further stresses that a default event under the sublease agreement
also represents a default event by the bond.
Issuer Profile
POSWDL is a subsidiary of UDeCOTT, a GRE of the GoRTT. POSWDL works
as a proxy for a financing vehicle for the sovereign. It was
created to finance and build a mixed complex of corporate towers in
Port of Spain, the capital, which houses major government agencies
and a hotel. The entity has a sublease agreement directly with the
sovereign.
Liquidity and Debt Structure
POSWDL reported no debt as of Sept. 2024. Its liquidity is driven
by its sublease agreement with the sovereign, considering that the
rents it receives will be aligned with the debt service schedule of
its prospective issuance.
Rating Sensitivities
Factors that Could, Individually or Collectively, Lead to Negative
Rating Action/Downgrade
POSWDL's ratings could be downgraded if the credit quality of GoRTT
deteriorates.
POSWDL's ratings could be downgraded if the linkage to its
supporting government, as assessed by the GRE support score, is
viewed as having weakened. However, Fitch views this as unlikely.
Factors that Could, Individually or Collectively, Lead to Positive
Rating Action/Upgrade
POSWDL's ratings could be upgraded if the credit quality of GoRTT
improves.
ESG Considerations
Fitch does not provide ESG relevance scores to POSWDL, as its
ratings and ESG profile are derived from its supporting government,
Trinidad and Tobago, on which Fitch does not currently maintain a
public rating.
Public Ratings with Credit Linkage to other ratings
The ratings of POSWDL are equalized to the credit quality of its
supporting government through the GRE support score.
Entity/Debt Rating
----------- ------
Port of Spain Waterfront
Development Limited LT IDR BB New Rating
senior secured LT BB New Rating
=================
V E N E Z U E L A
=================
CITGO PETROLEUM: Proving a Tough Sell for Bidders
-------------------------------------------------
globalinsolvency.com, citing WSJ Pro Bankruptcy, reports that the
coming auction for Venezuela's Citgo Petroleum could leave its
buyer on the hook to other creditors of the South American country,
a stumbling block for the court-ordered sale.
Citgo, among the largest U.S.-based oil refiners, is being
auctioned to cover debts owed by its owner, the bankrupt Venezuelan
government, according to globalinsolvency.com.
Bidders are contending with the risk that U.S. courts could hold
Citgo responsible for judgments held by Venezuela's bondholders and
other creditors, the report notes.
About CITGO Petroleum
Citgo Petroleum Corporation is a United States-based refiner,
transporter and marketer of transportation fuels, lubricants,
petrochemicals and other industrial products. Based in Houston,
Texas, Citgo is majority-owned by PDVSA, a state-owned company of
the Venezuelan government (although due to U.S. sanctions, in
2019, they no longer economically benefit from Citgo.)
Fitch Ratings, in early October 2024, affirmed the Long-Term
Issuer Default Rating (IDR) of CITGO Petroleum Corp. (CITGO, or
Opco) at 'B' with a Stable Outlook and the IDR of CITGO Holding,
Inc. (Holdco) at 'CCC+'. Fitch also affirmed Opco's existing senior
secured notes and industrial revenue bonds at 'BB'/'RR1'. S&P
Global Ratings, in June 2022, affirmed its 'B-' long-term issuer
credit ratings on CITGO Holding Inc. and core subsidiary CITGO
Petroleum Corp.
*********
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
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Fernandez, Julie Anne L. Toledo, Ivy B. Magdadaro, and Peter A.
Chapman, Editors.
Copyright 2025. All rights reserved. ISSN 1529-2746.
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