/raid1/www/Hosts/bankrupt/TCRLA_Public/250220.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
L A T I N A M E R I C A
Thursday, February 20, 2025, Vol. 26, No. 37
Headlines
A R G E N T I N A
ARGENTINA: Hits Lowest Level Since Mid-2020
ARGENTINA: Trade War Puts Trump-First Foreign Policy to The Test
B E R M U D A
AFINITI LTD: Appoints New CEO Amid Post-Bankruptcy Recovery
APEX STRUCTURED: Fitch Alters Outlook on B LongTerm IDR to Positive
B R A Z I L
PETROBRAS: Navigates Production Declines
C O L O M B I A
ALLIED CORP: Calum Hughes Resigns as CEO, Director
EMPRESAS PUBLICAS DE MEDELLIN: Fitch Affirms 'BB+' LongTerm IDR
J A M A I C A
WIGTON ENERGY: Records Net Loss of $100MMM at end of December 2024
P U E R T O R I C O
[] Puerto Rico Bankruptcy Filings Rise 21.1% in January 2025 YOY
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A R G E N T I N A
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ARGENTINA: Hits Lowest Level Since Mid-2020
-------------------------------------------
Buenos Aires Times reports that inflation in Argentina reached its
lowest level since President Javier Milei took office and annual
consumer prices dipped below 100 percent for the first time in two
years as he continues to tame expectations in the crisis-prone
economy.
Consumer prices rose 2.2 percent in January, compared with the 2.3
percent median estimate of economists surveyed by Bloomberg, the
lowest since July 2020. Annual inflation slowed to 84.5 percent,
according to government data published, according to Buenos Aires
Times.
Monthly inflation has been falling steadily since hitting a
three-decade high of 25.5 percent in December 2023 as Milei has
taken an axe to a bloated government budget and chipped away at
taxes, the report notes. Since the abrupt currency devaluation in
December 2023 that had an outsize impact on annual inflation, Milei
has carefully managed the peso's monthly devaluation to limit its
effect on prices, the report relays.
Restaurants and hotels led price increases, followed by housing and
utilities, the report discloses.
In January, Milei removed a key tax on US dollar purchases,
relieving some pressure on the prices of imported goods and
services, the report notes. This month, the government slowed the
peso's monthly depreciation to one percent from two percent, which
economists believed had become a floor for some prices, the report
says. The Central Bank cut rates by 300 basis points to 29 percent
on January 30 on reduced inflation expectations, dramatically down
from 133 percent when Milei took office, the report relays.
Economy Minister Luis Caputo said in a recent interview he hopes
the monthly inflation rate will dip below two percent starting in
February, following the adjustment to the currency peg, the report
discloses. Slowing inflation is the biggest factor buoying Milei's
continued popularity, the report says.
Economists surveyed by Argentina's Central Bank expect year-on-year
inflation to plunge to 23 percent this year, while the government
predicted 18 percent in its 2025 budget, 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 Feb. 17, 2025, S&P Global Ratings lowered its local currency
sovereign credit ratings on Argentina to 'SD/SD' from 'CCC/C' and
its national scale rating to 'SD' from 'raB+'. At the same time,
S&P affirmed its 'CCC/C' foreign currency sovereign credit ratings
on Argentina. The outlook on the long-term foreign currency rating
remains stable.
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.
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: Trade War Puts Trump-First Foreign Policy to The Test
----------------------------------------------------------------
Jonathan Gilbert at Bloomberg News reports that Argentina's Javier
Milei has spent his presidency cozying up to Donald Trump. So far,
it hasn't kept his nation off the front lines of the US leader's
global trade war, the report notes.
Trump ordered 25 percent tariffs on steel and aluminum that could
hammer the nation that ranked as the seventh-largest supplier of
the latter metal to the United States last year, according to the
Census Bureau, Bloomberg News relates. He told his government to
propose reciprocal levies on countries that charge steep tariffs on
US goods - a direct threat to highly-protectionist Argentina and
its nearly US$30 billion in annual trade with the US, according to
Bloomberg News.
While too early to estimate the impact the tariffs would have on
Argentina, they are set to test a pillar of Milei's political
strategy: the libertarian president has enthusiastically embraced
Trump, made pilgrimages to US conservative events and even pitched
the idea of a free trade agreement with the United Sttes - all part
of a push to bolster his clout abroad while rebuilding a
beleaguered economy at home, Bloomberg News notes.
But Argentina's suddenly vulnerable position demonstrates that not
even friends are clear of Trump's trade ire, a challenge for any
leader like Milei who may see personal affinity as their path out
of his glare, Bloomberg News says.
"Milei has a privileged relationship with Trump, but he needs to
build the diplomatic scaffolding to get concrete results," said
Juan Cruz Díaz, a political analyst in Buenos Aires. "The next
few weeks will be key to trying to reduce the hit on Argentina of a
global policy," he added.
He'll get his first crack: Milei is planning to attend the
Trump-friendly Conservative Political Action Conference in the
United States, where he is seeking a meeting with his counterpart,
Infobae reported, Bloomberg News notes.
The new metals tariffs aren't set to start until March 12, while
the US will conduct studies on country-specific reciprocal levies
that should take until April to complete, according to its own
estimates, Bloomberg News relays. That gives Milei some time to
swing a deal - and recent history suggests it's possible, Bloomberg
News discloses.
During his first term, Trump agreed to exempt Argentina from higher
steel and aluminum tariffs after reaching a quota agreement with
former president Mauricio Macri, Bloomberg News discloses.
Erstwhile Brazil leader Jair Bolsonaro, who like Milei built close
bonds with his fellow right-wing populist, later succeeded in
saving a similar agreement after Trump threatened to end it,
Bloomberg News notes.
Canada and Mexico also just won postponements on levies Trump had
pledged to impose, even though their leaders are ideological
opposites of the US president, Bloomberg News says.
But reaching a deal may not be easy, Bloomberg News relays. Trump
insisted that the metals tariffs would be implemented "without
exceptions or exemptions" this time around, and in his proclamation
accused Argentina of continuing to export steel to the United
States at "unsustainable quantities." The document also dinged
Argentina's official trade statistics for making it "difficult to
assess the levels of steel being imported from places like China
and Russia, and other potential sources of excess capacity," he
added.
Bloomberg News discloses that avoiding reciprocal tariffs could
prove even more difficult after Trump said that he had decided to
match "whatever countries charge the United States of America."
Outside of Venezuela, Argentina applies the highest average tariff
of any country in Latin America, according to United Nations data.
The average US levy on imports is about 3.5 percent, while
Argentina's average import tax on foreign goods is 13.5 percent,
Bloomberg News relays.
"Trump is doing something different this time around, which is
these reciprocal tariffs. And that's where Argentina has a
problem," said Marcelo Elizondo, an Argentine consultant who
specialises in trade. "Argentina is a very closed-off economy with
very high tariffs. We have much higher tariffs on American products
than they have on our products," he added.
The stakes are high for Milei, who has rested his presidency on his
ability to rebuild Argentina's crisis-prone economy - and his
argument that short-term pain caused by a "shock therapy" approach
would lead to future prosperity, Bloomberg News notes. That vision
has so far wooed global investors, who have bought up sovereign
bonds and moved to spend big on energy and mining, Bloomberg News
says. And inflation, which was near 200 percent on an annual basis
when he took office, slowed to 84.5 percent in January, Bloomberg
News relays.
But the tariff threats have generated deep concerns among companies
with Argentine operations like Aluar, an aluminum producer that
exports most of its product to North America, and steel pipe
manufacturer Tenaris SA, part of billionaire Paolo Rocca's Techint
Group empire, Bloomberg News notes.
Argentines, meanwhile, are pessimistic about Trump's return no
matter Milei's efforts to paint himself as one of the new
president's closest friends, Bloomberg News discloses. Nearly half
expect Trump to have a negative impact on Argentina, compared to 37
percent who think he will help, according to LatAm Pulse, a survey
conducted by AtlasIntel for Bloomberg News in late January and
released, Bloomberg News relays.
About 60 percent said they are fearful of tariffs, and unlike their
neighbours in Brazil, Chile and Colombia, Argentines aren't yet
convinced that their government should forge closer ties to the
United States: While clear majorities in those three nations backed
the idea, Argentines were evenly split, Bloomberg News adds.
About Argentina
Argentina is a country located mostly in the southern half of South
America. Its capital is Buenos Aires. Javier Milei is the current
president of Argentina after winning the November 19, 2023 general
election. He succeeded Alberto Angel Fernandez in the position.
Argentina has the third largest economy in Latin America. The
country's economy is an upper middle-income economy for fiscal year
2019, according to the World Bank. Historically, however, its
economic performance has been very uneven, with high economic
growth alternating with severe recessions, income maldistribution
and in the recent decades, increasing poverty.
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 Feb. 17, 2025, S&P Global Ratings lowered its local currency
sovereign credit ratings on Argentina to 'SD/SD' from 'CCC/C' and
its national scale rating to 'SD' from 'raB+'. At the same time,
S&P affirmed its 'CCC/C' foreign currency sovereign credit ratings
on Argentina. The outlook on the long-term foreign currency rating
remains stable.
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.
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 E R M U D A
=============
AFINITI LTD: Appoints New CEO Amid Post-Bankruptcy Recovery
-----------------------------------------------------------
CX Today reports that Afiniti has named Jerome Kapelus as its new
CEO as the company works to regain stability following its recent
bankruptcy. He succeeds Hassan Afzal, who will transition into a
strategic advisory role.
Kapelus brings 25 years of experience in financial leadership and
business transformation. He previously served as Chief Financial
Officer at Quartet Health and TCGplayer, which was later acquired
by eBay. Most recently, he was President of PWCC Marketplace, where
he oversaw its acquisition by Fanatics and its integration, the
report states.
"It's an honor to lead Afiniti," Kapelus said, recognizing Afzal's
contributions. "I look forward to building on his legacy by
investing in advanced AI technologies that create real value for
our customers and optimize their customer experience."
Afiniti continues to serve major brands like AT&T, Verizon, and
Virgin with its AI-driven call routing solutions. However, as the
contact center industry moves to the cloud, competition has
intensified, with tech giants like AWS, Google, and Microsoft
reshaping the market.
In November 2024, Afiniti filed for bankruptcy in Delaware due to
financial pressures. The company exited Chapter 15 in just over a
month, pledging to expand its portfolio to stay competitive.
Kapelus' appointment signals a strategic move toward stability and
innovation. Vista Credit Partners, one of Afiniti’s key
lenders,
welcomed the leadership change.
"Jerome is a proven leader with a strong track record of driving
transformation and growth,†said David Flannery, President
of
Vista Credit Partners and Chairman of Afiniti's Board of Directors.
"He is the right choice to guide Afiniti through this next
stage."
To stay relevant, Afiniti must evolve beyond its core AI-powered
routing technology. While it has expanded into industry-specific
and omnichannel solutions, the rise of integrated CCaaS platforms
has increased competition.
As businesses prioritize generative and predictive AI, Afiniti must
clearly define its value proposition. In an industry where AI
promises have often outpaced actual results, demonstrating
measurable impact will be critical.
The key question is whether Afiniti will continue with its existing
approach or undergo a major transformation. One thing is certain
success will require more than just recovery; it will
demand reinvention, according to CX Today.
About Afiniti Ltd.
Afiniti Ltd. provides management consultancy services.
Afiniti Ltd. sought relief under Chapter 15 of the U.S. Bankruptcy
Code (Bankr. D. Del. Case No. 1:24-bk-12539) on Nov. 3, 2024, to
seek U.S. recognition of the liquidation proceedings in Bermuda.
The Debtor's U.S. counsel is Kara Hammond Coyle of Young Conaway
Stargatt & Taylor LLP.
APEX STRUCTURED: Fitch Alters Outlook on B LongTerm IDR to Positive
-------------------------------------------------------------------
Fitch Ratings has revised Apex Structured Intermediate Holdings
Limited's (Apex) Outlook to Positive from Stable, while affirming
its Long-Term Issuer Default Rating (IDR) at 'B'. Fitch has also
assigned a 'B+(EXP)' expected rating to its upcoming US dollar- and
euro-denominated senior secured term loans B (TLB) in February
2025. Fitch has also affirmed the existing first-lien TLBs at 'B+'.
The Recovery Ratings are 'RR3'.
The Outlook revision reflects Fitch's view of an improving credit
profile with leverage declining below 6.0x in 2026, supported by
revenue growth and cost efficiencies. It also reflects its
expectations of a stronger focus on organic growth, as opposed to
debt-funded M&A, and improved financial flexibility
post-refinancing.
Apex's ratings reflect high leverage, weak interest coverage, and
execution risks in integrating acquired companies, balanced by a
solid business risk profile with strong geographic diversification,
recurring revenue streams, and low churn levels, which support cash
flow stability.
Key Rating Drivers
Enhanced Financial Flexibility: The proceeds of the new loans will
be used to refinance Apex's existing TLBs and the outstanding
amount of its revolving credit facility (RCF). Fitch expects Apex's
planned refinancing to improve its financial flexibility by
extending debt maturities to 2032 and 2030 for its TLBs and RCF,
respectively, from 2028 and 2026. The planned repricing will
support a strengthening of its EBITDA interest cover. Fitch expects
it to improve to 2.3x in 2026, from an estimated 1.3x in 2024.
Deleveraging Capacity: Fitch estimates Fitch-defined EBITDA
leverage at 7.6x at end-2024, pro forma for acquisitions made and
signed in 2023-2024. The refinancing will be neutral to leverage.
Apex has a robust capacity to deleverage organically. Fitch expects
leverage to fall to 6.6x in 2025 and 5.8x in 2026. This will be
supported by rising EBITDA following revenue growth and the
realisation of synergies and cost savings.
Improved Profitability: Fitch estimates Apex's Fitch-defined EBITDA
margin to have increased to 31% in 2024 on a pro-forma basis for
acquisitions from 27.5% in 2023. Fitch expects EBITDA margin to
improve further to 35% in 2026, supported by economies of scale and
a further realisation of cost-cutting measures and synergies.
M&A Growth Strategy: Fitch understands from Apex's management that
following a period of high growth through M&A, the group will
pursue organic growth, with only small, accretive bolt-on M&As.
Thus, the rating and Positive Outlook assume a more disciplined
financial policy towards deleveraging. Apex has made more than 50
acquisitions since 2017, which it has typically financed with a mix
of equity and new debt. Execution risks have been meaningful, but
are abating due to slower M&A-led growth.
Cash-Generative Business: Apex has a scalable operating structure
that is cash-generative. Fitch expects the enlarged group
post-acquisitions to start generating positive Fitch-defined free
cash flow (FCF) in 2025, supported by growing EBITDA, lower
interest payments following the repricing and the partial debt
repayment in 2024, plus reduced one-off costs.
Strong Market Position: Following recent acquisitions, including
Sanne, MMC and Maitland, Apex has become one of the largest
alternative asset service platforms globally with more than USD3
trillion of assets on the platform (AOP), at end-2024, and around
USD1.5 billion of revenue on a pro-forma basis. Apex's main
competitive advantages are its scale as well as product and
geographical diversification, which enable it to be a single-source
solution provider.
Low Revenue Volatility: The majority of Apex's revenue is based on
fixed fees. This limits volatility as a result of capital-market
fluctuations as demonstrated during the Covid-19 pandemic. While
average contract durations are not long, churn levels are minimal,
as evident in Apex's retention rates of 99%. This, combined with
geographic diversification, a comprehensive product portfolio, and
low customer concentration, results in strong revenue visibility.
Derivation Summary
Apex is one of the largest alternative asset service platforms
globally by AOP. Its scale, diversification, low customer
concentration and cash flow margins rank well compared with peers',
resulting in a slightly higher leverage capacity with upgrade and
downgrade sensitivities of 6.0x and 7.5x, respectively, on a total
debt-to-EBITDA basis.
The nature of the business enables Apex to realise economies of
scale, leading to an EBITDA margin in line with or above a 'B'
rating in Fitch's privately rated portfolio of direct peers. Fitch
expects the FCF margin to be in line with or above privately rated
'B' category peers', due to low capex requirements and an expected
lack of dividend payments.
Apex's publicly rated peers by Fitch include Vistra Holdings
Limited (B+/Stable) and FNZ Group Limited (B-(EXP)/Positive). Both
Vistra and Apex are similar in size and have strong product and
geographic diversification. However, Vistra is rated one notch
higher as it has lower leverage.
FNZ has tighter leverage thresholds relative to Apex, with lower
revenue visibility, weaker FCF generation and profitability, and is
less geographically diversified.
Key Assumptions
- Full consolidation of recent acquisitions
- Revenue growth of 6%-7% in 2025-2027 on alternative assets under
management (AuM) growth, increasing outsourcing penetration, and
cross-selling opportunities
- Pro-forma Fitch-defined EBITDA margin to improve to 35.5% by
2027, from 27.5% in 2023, supported by cost savings and synergy
realisation
- Working-capital requirements at 3% of revenue in 2025-2027
- Capex at 5% of revenue a year to 2027
- Bolt-on acquisition of about USD50 million per year in 2025-2027
- No dividend payments for the next four years
- Holdco payment-in kind (PIK) notes not treated as debt of Apex
Recovery Analysis
Fitc believes that Apex would be reorganised as a going concern
(GC) in bankruptcy rather than liquidated, given its asset-light
business model.
Fitch estimates that post-restructuring pro-forma GC EBITDA would
be around USD400 million. Fitch assumes financial stress would be
driven by failed integration of acquired companies, combined with
limited synergies, more competition leading to revenue loss, and
end-clients shifting from alternative funds to low-cost
exchange-traded funds.
Fitch applies a multiple of 6.0x to the GC EBITDA to calculate a
post-reorganisation enterprise valuation (EV). The multiple is in
line with that of similar peers. This reflects Apex's leading
market position following its acquisitions in 2021-2024, good
revenue visibility, geographic and customer diversification, and a
strong cash-generative business. Fitch deducts 10% of
administrative claims from EV to account for bankruptcy and
associated costs.
The total amount of first-lien secured debt for claims includes
USD3.5 billion equivalent of senior secured first-lien TLBs
post-refinancing and an equally ranking USD460 million RCF that
Fitch assumes to be fully drawn in distress. This results in the
senior secured first-lien debt rating of 'B+' with a Recovery
Rating of 'RR3'. Based on current metrics and assumptions, the
waterfall analysis generates a ranked recovery at 55%.
Under the current capital structure, with USD3.3 billion equivalent
of senior secured first-lien TLBs and an equally ranking USD460
million RCF assumed fully drawn in distress, the recovery analysis
results in a 'B+' rating for the instruments with a 'RR3' Recovery
Rating, and a ranked recovery of 58%.
RATING SENSITIVITIES
Factors that Could, Individually or Collectively, Lead to
Downgrade
- Material slowdown in organic growth, due to intensified
competition and slower-than-expected growth in global AuM
- Failure to integrate acquired companies and extract synergies, or
to benefit from scale economies, resulting in sustained weaker
EBITDA margin and FCF generation
- Debt-funded acquisitions preventing deleveraging, resulting in
Fitch-defined EBITDA leverage above 7.5x on a sustained basis
- EBITDA interest coverage below 2.0x
Factors That Could, Individually or Collectively, Change the
Outlook to Stable
- Debt-funded acquisitions or delays in achieving synergies and
cost savings, resulting in Fitch-defined EBITDA leverage above 6.0x
on a sustained basis and flat-to-negative FCF
- EBITDA interest coverage consistently below 2.5x
Factors that Could, Individually or Collectively, Lead to Upgrade
- Continued organic growth, supported by successful integration of
acquired companies with continued EBITDA margin improvement
- Fitch-defined EBITDA leverage below 6.0x on a sustained basis
- EBITDA interest coverage sustained above 2.5x
- Cash flow from operations less capex/debt sustained above 5%
Liquidity and Debt Structure
Fitch estimates Apex's pro-forma unrestricted cash at USD71 million
at end-2024. The liquidity profile is underpinned by an USD460
million RCF, which Fitch expects to be undrawn post-refinancing.
The liquidity is further supported by positive FCF generation from
2025 and no near-term debt maturities, although the US dollar
first-lien term loan has an amortising profile of 1% a year.
Refinancing risk is manageable with RCF and TLBs maturing in 2030
and 2032, respectively, post-refinancing, and given Apex's
deleveraging capacity in the absence of debt-funded M&A.
Issuer Profile
Apex is a leading independent global provider of services to
alternative investment management and corporate sectors. Services
include fund, corporate and trust administration services, middle
office, regulatory reporting, custody, depositary, and banking
solutions.
MACROECONOMIC ASSUMPTIONS AND SECTOR FORECASTS
Fitch's latest quarterly Global Corporates Macro and Sector
Forecasts data file which aggregates key data points used in its
credit analysis. Fitch's macroeconomic forecasts, commodity price
assumptions, default rate forecasts, sector key performance
indicators and sector-level forecasts are among the data items
included.
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 Recovery Prior
----------- ------ -------- -----
Apex Group
Treasury LLC
senior secured LT B+(EXP) Expected Rating RR3
senior secured LT B+ Affirmed RR3 B+
Apex Group
Treasury Limited
senior secured LT B+(EXP) Expected Rating RR3
senior secured LT B+ Affirmed RR3 B+
Apex Structured
Intermediate
Holdings Limited LT IDR B Affirmed B
===========
B R A Z I L
===========
PETROBRAS: Navigates Production Declines
----------------------------------------
Rio Times Online reports that Petroleo Brasileiro S.A. saw a 10.5%
year-over-year production drop in Q4 2024, pumping 2.628 million
barrels of oil equivalent per day (Mboed). Annual output fell 3%
to 2.698 million barrels daily, reflecting strategic recalibrations
amid market pressures, according to Rio Times Online.
Maintenance surges at Buzios field drove the quarterly decline,
offset partially by new platforms Maria Quiteria and Marechal Duque
de Caxias coming online, the report notes. The state-owned firm
met its 2024-2028+ strategic production targets despite these
headwinds, achieving pre-salt production records of 2.2 million
daily barrels solo and 3.2 million with partners, the report
relays.
Pre-salt reserves now supply 81% of Petrobras' total output,
underscoring operational focus on high-yield assets, the report
discloses. Financial disclosures lag behind operational data due
to auditing requirements, the report says. While Q4 2024
production figures released on February 3, 2025, the company's Q4
financial results—detailing revenue, profit, and
investment—will not publish until February 26, 2025, the report
notes.
This explains why the latest financial metrics available are from
Q3 2024, including a 22% net profit surge to $5.66 billion and debt
reduction to $59.1 billion, the lowest since 2008, the report
relays. The delay allows Petrobras to consolidate complex
financial data across its global operations, the report discloses.
Sales of oil, gas, and fuels dipped 3.1% annually to 2.914 million
barrels per day, while exports slid 1% to 798,000 barrels, the
report says. Gasoline demand rose 9.1% in Q4, fueled by holiday
travel and year-end bonus spending, the report relays.
Aviation kerosene sales climbed 6.4%, mirroring airline industry
recovery, the report notes. Diesel consumption fell 3.8% as summer
crop planting concluded and industrial activity slowed, the report
discloses. Natural gas sales dropped by 2 million cubic meters
daily, pressured by competitor market share gains and reduced
non-thermoelectric demand, the report says.
Refineries adapted to shifting consumption, boosting gasoline
production 4.8% and aviation fuel 4.5% in Q4, the report relays.
Thermal power generation fell 12.5%, as hydropower reservoirs
stabilized, reducing reliance on costlier energy sources, the
report notes.
This operational reality reflects broader market dynamics:
Petrobras navigates maintenance cycles and platform deployments
while responding to consumer behavior and sectoral demand, the
report notes. The 13th-month salary effect on gasoline sales and
aviation's seasonal rebound reveal economy-wide linkages beyond
corporate control, the report relays.
Pre-salt dominance signals efficiency prioritization in Brazil's
deepwater fields, where technological investments yield
disproportionate returns, the report says. Export resilience
despite global volatility highlights Petrobras' pricing agility in
contested markets, the report discloses.
The diesel downturn exposes agriculture and industry's cyclical
nature, while gas competition underscores a diversifying energy
landscape, the report says. Thermal power's retreat aligns with
fiscal pragmatism as renewables stabilize grids, the report
relays.
Analysts await Q4 2024 financials to assess how production declines
impacted margins and whether cost controls offset lower output, the
report discloses. The February 26 report will clarify if Petrobras
sustained its Q3 dividend momentum ($3B paid in November 2024) and
how its $111B five-year investment plan adjusts to evolving market
conditions, the report says.
Petrobras' story in 2024 encapsulates balancing strategic foresight
with market immediacy—a testament to operational discipline in
volatile conditions. Its output adjustments mirror global energy
players' realities: optimize core assets, trim inefficiencies, and
let demand dictate supply, the report adds.
About Petrobras
Petroleo Brasileiro S.A. or Petrobras (in English,
BrazilianPetroleum Corporation - Petrobras) is a semi-public
Brazilian multinational corporation in the petroleum industry
headquartered in Rio de Janeiro, Brazil. Petrobras control
significant oil and energy assets in 16 countries in Africa, the
Americas, Europe and Asia. But, Brazil represents majority of its
production.
The Brazilian government directly owns 54% of Petrobras' common
shares with voting rights, while the Brazilian Development Bankand
Brazil's Sovereign Wealth Fund (Fundo Soberano) each control5%,
bringing the State's direct and indirect ownership to 64%.
A corruption scandal was uncovered in 2014 that involved
Petrobras. The scandal is related to money laundering that
involved Petrobras executives. The executives were alleged to get
received kickbacks from overpriced contracts, to the tune of about
$3 billion in total. Over a thousand warrants were issued against
politicians and businessmen in relation to the scandal. In 2016,
Marcelo Odebrecht, CEO of Odebrecht, was sentenced to 19 years in
prison after being convicted of paying more than $30 million in
bribes to Petrobras executives.
In January 2018, Petrobras agreed to pay $2.95 billion to settle
a U.S. class action corruption lawsuit. In September 2018,
Petrobras agreed to pay $853.2 million to settle with Brazilian and
U.S. authorities.
Moody's Ratings, in October 2024, affirmed Petrobras' Ba1
corporate family rating. At the same time, Moody's affirmed
Petrobras' ba1 Baseline Credit Assessment (BCA) and the Ba1 rating
of the backed senior unsecured debt issuances of Petrobras Global
Finance B.V. and Petrobras International Finance Company. The
outlook for all ratings changed to positive from stable.
S&P Global Ratings, in January 2024, assigned a new management &
governance (M&G) assessment of moderately negative to Petrobras. At
the same time, S&P has affirmed its issuer credit ratings on
Petrobras at 'BB' on the global scale and 'brAAA' on the Brazilian
national scale.
Fitch Ratings, in July 2022, affirmed Petrobras' BB- Long-Term
Issuer Default Rating. In addition, Fitch has revised the Rating
Outlook to Stable from Negative. Also in July 2022, Egan-Jones
Ratings Company upgraded the foreign currency and local currency
senior unsecured ratings on debt issued by Petrobras to BB+ from
BB.
===============
C O L O M B I A
===============
ALLIED CORP: Calum Hughes Resigns as CEO, Director
--------------------------------------------------
Allied Corp. disclosed in a Form 8-K Report filed with the U.S.
Securities and Exchange Commission that Calum Hughes resigned as
Chief Executive Officer and a Director of the Company, effective
January 30, 2025.
The Company wishes him well in his next position.
About Allied Corp.
Headquartered in Kelowna, BC, Canada, Allied Corp. is an
international cannabis company with its main production center in
Colombia, is one of the few companies that has exported from
Colombia internationally, and among the first company to export
commercial cannabis flower from Colombia. By leveraging the
Colombian advantages and its Canadian cannabis cultivation
expertise, Allied offers consistent supply of premium cannabis
product at scale and attractive prices, while meeting high quality
standards, thus significantly de-risking its partners supply
chain.
The Woodlands, TX-based M&K CPAS, PLLC, the Company's auditor since
2022, issued a "going concern" qualification in its report dated
Dec. 16, 2024. The report highlights that the Company has suffered
net losses from operations, has a net capital deficiency, and has
minimal revenue, which raise substantial doubt about its ability to
continue as a going concern.
As of Nov. 30, 2024, Allied Corp. had $1.95 million in total
assets, $9.59 million in total liabilities, and a total
stockholders' deficit of $7.64 million.
EMPRESAS PUBLICAS DE MEDELLIN: Fitch Affirms 'BB+' LongTerm IDR
---------------------------------------------------------------
Fitch Ratings has removed the Rating Watch Negative on Empresas
Publicas de Medellin E.S.P.'s (EPM) Long-Term Foreign and Local
Currency Issuer Default Ratings (IDRs) and National Scale Long-Term
rating. Fitch has affirmed the ratings at 'BB+' and 'AAA(col)',
respectively. The Rating Outlook is Stable.
Fitch has also removed the RWN on EMP's subsidiaries; EPM
Inversiones S.A., Empresa de Energía del Quindío S.A. E.S.P.
(EDEQ), Centrales Eléctricas del Norte de Santander S.A. E.S.P.
(CENS), Central Hidroeléctrica de Caldas S.A. E.S.P. (CHEC),
Electrificadora de Santander S.A. E.S.P. (ESSA), Aguas Nacionales
EPM S.A. E.S.P. (AGN) and Caribemar de la Costa S.A.S E.S.P.
(Afinia). Fitch has affirmed the subsidiaries' national long-term
ratings at 'AAA(col)' with a Stable Outlook and the national
short-term ratings at 'F1+(col)'.
Fitch removed the RWN on Aguas Regionales EPM S.A. E.S.P.'s (AR)
national long-term rating and affirmed it at 'AA-(col)' with a
Stable Outlook and affirmed the national short-term rating at
'F1+(col)'. Fitch affirmed Empresas Varias de Medellin S.A. E.S.P.
(Emvarias) national long-term rating at 'AA+(col)' with a Stable
Outlook and affirmed the national short-term rating at 'F1+(col)'.
The actions follows the successful closure of the right tunnel of
Hidroituango (Ituango's) blocked Auxiliary Diversion System in
2024. This enabled EPM to regain full control of the project,
effectively mitigating the risk of major flooding downstream. With
this risk eliminated, the project is now on a stable trajectory
towards full completion by 2027, reinforcing EPM's operational
stability and enhancing the project's overall risk profile. EPM's
ratings reflect strong ownership and control by its owner, the city
of Medellin (BB+/Stable).
The ratings of EPM Inversiones, EDEQ, CENS, CHEC, ESSA, Afinia and
AGN are equalized with EPM's, given the existence of relevant legal
documentation that link their ratings with that of their parent.
The ratings also reflect strategic incentives evidenced in the
importance of the energy distribution and water segments for EPM's
business profile, as well as financial support provided to the
subsidiaries. Operational incentives are high, given fully
integrated management decisions and service branding. Strategic and
operational incentives are lower for Emvarias and AR, given lower
financial contribution and more moderate avoidance of costs for
EPM. As a result, these subsidiaries are rated with a top-down
approach.
Key Rating Drivers
Ituango Risk Mitigated: Fitch has removed EPM's ratings from RWN
following the company's successful sealing of the right tunnel of
the auxiliary diversion system at Ituango in 2024. Fitch originally
placed the ratings on Watch due to a 2018 emergency that led to
significant cost overruns and operational delays. The project
reached 93.2% completion in October 2024, and four out of eight
generation units were fully operational. Once all units are
completed, Ituango's capacity will be 2.4GW, representing nearly
13% of the country's installed capacity.
Strong Linkage with Parent: EPM's ratings are linked to the City of
Medellin's (BB+/Stable) ratings given the financial relevance of
the company to Medellin, lack of effective documentation limiting
dividend distribution, and the city's influence on the company's
administration and operations. EPM's distributions contribute an
average 20% or more of government revenues and a material 20%-30%
of the city's investment budget.
Strong Credit Profile: Fitch assesses EPM's standalone credit
profile (SCP) at 'bbb-' and has also removed its RWN, supported by
operations in regulated businesses in mature markets, a robust and
diversified asset base, moderate leverage (debt/EBITDA) and a
strong liquidity position. Over 80% of EPM's EBITDA and capex
pertain to the energy business (including electricity generation
and distribution and natural gas distribution), with water and
waste treatment segment accounting for the balance. The company
commands market dominance within Colombia's generation and
distribution matrices.
Weak Credit Profile at Afinia: EPM's subsidiary Afinia accounts for
12% of capex spending for the energy segment. Afinia's cash
position has weakened materially over the past two years due to
elevated energy and financing costs, accumulated pandemic-era
balances from restricted tariff increases and government subsidy
payment delays. The resulting USD520 million liability will drive
negative EBITDA and operating cash flows at YE 2024. EPM has
extended a credit line of up to around USD280 million to support
the subsidiary while maintaining a stable consolidated credit
profile.
Moderate Leverage Expected: Fitch expects leverage to average 2.8x
and net leverage to average 2.5x, coupled with negative free cash
flow, reflecting new debt estimated at USD1.7 billion to fund an
increased capex program, and annual EBITDA of around USD3 billion.
The company will also address significant refinancing needs from
bond maturities in 2027, reversing a three-year deleveraging
trend.
Moderate Regulatory Risk: Fitch considers EPM's exposure to
regulatory risk moderate following president Petro's attempt to
control regulations of the country's public services. Fitch
considers the company's risk exposure moderate due to EPM's
concentration in regulated businesses. All regulatory changes must
provide all market players with financial stability to operate
properly and may not impose undue hardship.
Derivation Summary
EPM's ratings are linked to those of its owner, the city of
Medellin (BB+/Stable), due to the latter's strong ownership and
control over the company. The company's low business-risk profile
is commensurate with that of Grupo Energia Bogota S.A. E.S.P.'s
(BBB/Stable), Enel Americas S.A. (BBB+/Stable), AES Andes
(BBB-/Stable), Enel Colombia S.A. E.S.P. (BBB/Stable) and Promigas
(BBB-/Stable).
Fitch projects EPM's total leverage to remain slightly below 3.0x
over the rating horizon, considering the financing needed for its
investments plan, including demanding capex needs at Afinia, as
well as covering working capital needs. This is in line with AES
Andes' and Promigas' expected average gross leverage, that will
remain between 3.5x and 4.0x. It is higher than Enel Colombia,
which will remain below 2.0x.
EPM also compares well with electricity generation peers that have
national ratings, namely Enel Colombia S.A. E.S.P., Isagen S.A.
E.S.P. and Celsia Colombia S.A. E.S.P., all rated 'AAA(col)'.
Similar to peers, EPM has an efficient portfolio of low-cost hydro
assets. In 2024, EPM ranked first in installed capacity, ahead of
Enel Colombia, and first in generation, ahead of Enel Colombia and
Isagen, which were second and third, respectively.
Key Assumptions
- Ituango units 5 through 8 come online in 2027 with no penalties
or further significant delays;
- A generation load factor of about 55% over the rated horizon;
- Distribution tariffs increase at the expected rate of inflation
between 2025 and 2028;
- COP2.3 trillion in uncharged revenue are recovered up until
2029;
- Dividend payout of 55% of previous year's net income;
- No divestments in 2025 or over the rating horizon;
- Total debt disbursements of COP25 trillion between 2025 and
2028;
- Capex of COP8.4 trillion in 2025, COP8.4 trillion in 2026, COP7.2
trillion in 2027 and COP5.7 trillion in 2028.
RATING SENSITIVITIES
Factors that Could, Individually or Collectively, Lead to Negative
Rating Action/Downgrade
- A negative rating action on the City of Medellin's ratings;
- Sustained gross leverage above 3.5x.
Factors that Could, Individually or Collectively, Lead to Positive
Rating Action/Upgrade
- Although unlikely, Fitch may consider a positive rating action if
there is a positive rating action on the company's owner, the City
of Medellin.
Liquidity and Debt Structure
As of 3Q24, EPM had a cash in hand and equivalents of COP2.7
trillion (~USD656 million) at the group level, and around COP672
billion (~USD160 million) of which was at the parent company. As of
3Q24, the company had consolidated debt of COP29.4 trillion
(~USD7.1 billion), the majority of which was due in 2027. The
company faces scheduled maturities of COP1.3 trillion and COP3.9
trillion in 2025 and 2026, respectively, which Fitch considers
manageable.
Fitch estimates available cash on hand plus forecast CFO will cover
more than 2x short-term maturities on average as of YE 2024. In
2024, EPM approved an intercompany loan for Afinia, around
USD116million of which has been disbursed, to support its weakened
liquidity position. The repayment of this loan is tied to the
recovery of Afinia's accumulated balances from unpaid government
subsidies and delayed tariff increases.
Issuer Profile
EPM provides public utility services. It participates in the
generation, transmission, distribution and commercialization of
electricity, the distribution and commercialization of natural gas
and the provision of water, sewage and waste management services.
Public Ratings with Credit Linkage to other ratings
EPM's ratings are capped by the ratings of its owner, the city of
Medellin.
MACROECONOMIC ASSUMPTIONS AND SECTOR FORECASTS
Fitch's latest quarterly Global Corporates Macro and Sector
Forecasts data file which aggregates key data points used in its
credit analysis. Fitch's macroeconomic forecasts, commodity price
assumptions, default rate forecasts, sector key performance
indicators and sector-level forecasts are among the data items
included.
ESG Considerations
Empresas Publicas de Medellin E.S.P. (EPM) has an ESG Relevance
Score of '4' for Governance Structure due to its nature as a
majority government-owned entity and the inherent governance risk
that arises with a dominant state shareholder, which has a negative
impact on the credit profile, and is relevant to the ratings in
conjunction with other factors.
The highest level of ESG credit relevance is a score of '3', unless
otherwise disclosed in this section. A score of '3' means ESG
issues are credit-neutral or have only a minimal credit impact on
the entity, either due to their nature or the way in which they are
being managed by the entity. Fitch's ESG Relevance Scores are not
inputs in the rating process; they are an observation on the
relevance and materiality of ESG factors in the rating decision.
Entity/Debt Rating Prior
----------- ------ -----
Centrales Electricas
del Norte de
Santander S.A. E.S.P Natl LT AAA(col) Affirmed AAA(col)
Natl ST F1+(col) Affirmed F1+(col)
Empresas Publicas de
Medellin E.S.P. (EPM) LT IDR BB+ Affirmed BB+
LC LT IDR BB+ Affirmed BB+
Natl LT AAA(col) Affirmed AAA(col)
senior unsecured LT BB+ Affirmed BB+
senior unsecured Natl LT AAA(col) Affirmed AAA(col)
Aguas Nacionales
EPM S.A. E.S.P. Natl LT AAA(col) Affirmed AAA(col)
Natl ST F1+(col) Affirmed F1+(col)
Empresa de Energia del
Quindio S.A.E.S.P. Natl LT AAA(col) Affirmed AAA(col)
Natl ST F1+(col) Affirmed F1+(col)
Empresas Varias de
Medellin S.A. E.S.P. Natl LT AA+(col) Affirmed AA+(col)
Natl ST F1+(col) Affirmed F1+(col)
Central Hidroelectrica
de Caldas S.A.E.S.P. Natl LT AAA(col) Affirmed AAA(col)
Natl ST F1+(col) Affirmed F1+(col)
Electrificadora de
Santander S.A. E.S.P. Natl LT AAA(col) Affirmed AAA(col)
Natl ST F1+(col) Affirmed F1+(col)
senior unsecured Natl LT AAA(col) Affirmed AAA(col)
Aguas Regionales
EPM S.A. E.S.P. Natl LT AA-(col) Affirmed AA-(col)
Natl ST F1+(col) Affirmed F1+(col)
Caribemar de la
Costa SAS ESP Natl LT AAA(col) Affirmed AAA(col)
Natl ST F1+(col) Affirmed F1+(col)
EPM Inversiones S.A. Natl LT AAA(col) Affirmed AAA(col)
Natl ST F1+(col) Affirmed F1+(col)
=============
J A M A I C A
=============
WIGTON ENERGY: Records Net Loss of $100MMM at end of December 2024
------------------------------------------------------------------
RJR News reports that Wigton Energy has posted a net loss of $100
million on revenues of $370 million as at the end of December last
year.
The company says its average capacity utilization fell to 78 per
cent during the quarter ended last December, compared with 91 per
cent during the corresponding period in 2023, contributing to the
net loss, according to RJR News.
The company is also reporting that its net profits fell to $228
million during the period April to December of last year, compared
with $490 million during the corresponding period in 2023, the
report notes.
About Jamaica
Jamaica is an island country situated in the Caribbean Sea. Jamaica
is an upper-middle income country with an economy heavily dependent
on tourism. Other major sectors of the Jamaican economy include
agriculture, mining, manufacturing, petroleum refining, financial
and insurance services.
In October 2023, Moody's upgraded the Government of Jamaica's
long-term issuer and senior unsecured ratings to B1 from B2, and
senior unsecured shelf rating to (P)B1 from (P)B2. The outlook has
been changed to positive from stable. 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.
=====================
P U E R T O R I C O
=====================
[] Puerto Rico Bankruptcy Filings Rise 21.1% in January 2025 YOY
----------------------------------------------------------------
News is my Business (NIMB) reports that Puerto Rico saw a notable
rise in bankruptcy filings at the start of 2025, with 452 cases
recorded in January 2025 an increase of 21.2% from the 373 cases
filed in January 2024. The latest Boletin de Puerto Rico report
highlights mounting economic challenges, rising debt burdens, and
industry-specific financial struggles.
The surge was primarily driven by Chapter 7 and Chapter 13
filings.
Chapter 7 cases, which involve liquidation, increased by 29.7% to
144, up from 111 the previous year. Chapter 13 filings, allowing
individuals to restructure debt, climbed 20.2% to 304, compared to
253 in January 2024.
Meanwhile, Chapter 11 filings, typically used for business
reorganization, fell by 50%, with just four cases reported versus
eight last 2024. No Chapter 12 cases, which apply to family
farmers and fishers, were filed.
The pharmaceutical sector accounted for the highest
bankruptcy-related debt, with Neolpharma Inc. leading at $21.1
million -- 73.83% of the total reported in January. Other
industries affected included:
* Real estate: One case, $1.53 million in debt (16.64% of total).
* Food services: One case, $1.44 million in debt (11.63%).
* Landscaping: Two cases, $261,379 in total debt (2.11%).
* Beauty salons: Three cases, $182,728 in total debt (1.47%).
Total bankruptcy-related debt reached $68.5 million in January
2025, a 50.86% increase from $45.4 million in January 2024.
Despite the overall rise, commercial bankruptcies saw a slight
decline, with 25 cases in January 2025â€"down 3.8% from 26 the
previous year. However, certain municipalities experienced
significant spikes in filings:
* San Sebastián: +400%
* Salinas: +167%
* Vega Baja: +150%
* Bayamon: +240%
* Cayey: +80%
Ponce led in commercial bankruptcies with four cases (+300%),
followed by San Juan with three (+50%) and Carolina with two
(+100%).
*********
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 2025. All rights reserved. ISSN 1529-2746.
This material is copyrighted and any commercial use, resale or
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Information contained herein is obtained from sources believed to
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contact Peter A. Chapman at 215-945-7000.
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