/raid1/www/Hosts/bankrupt/TCRLA_Public/250404.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
Friday, April 4, 2025, Vol. 26, No. 68
Headlines
A R G E N T I N A
ARGENTINA: Requested New US$20BB Loan Program, IMF Confirms
ARGENTINA: Seeks Large Portion of US$20-billion IMF Deal Up Front
TELEFONICA SA: Milei Blocks Sale of Argentina Unit to Clarin
B R A Z I L
BANCO VOTORANTIM: S&P Rates New Senior Unsecured Notes 'BB'
KLABIN SA: Fitch Affirms 'BB+' Long-Term IDR, Outlook Stable
C H I L E
CAP SA: S&P Affirms 'BB+' ICR, Alters Outlook to Negative
J A M A I C A
DIGICEL GROUP: To Shift to Renewable Energy
JAMAICA: BoJ to Maintain Policy Rate at 6% Per Annum
JAMAICA: Export Earnings Fell 8.6% During Jan-Nov 2024, STATIN Says
M E X I C O
DOLPHIN COMPANY: Files Chapter 11 to Restructure Finances
P U E R T O R I C O
BILLY J. CUEVAS ITHIER: Wins Bid to Dismiss Bankruptcy Case
- - - - -
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A R G E N T I N A
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ARGENTINA: Requested New US$20BB Loan Program, IMF Confirms
-----------------------------------------------------------
AFP News reports that the International Monetary Fund confirmed it
was in talks with Argentina about a new US$20-billion, four-year
loan program to support the country's economic reforms.
"Progress on the new program is very advanced and engagement
continues at all levels to finalise an agreement that will help
Argentina consolidate its already successful economic program," an
IMF spokesperson said in a statement shared with AFP, adding that
any deal would need to be confirmed by the Fund's executive board,
the report discloses.
President Javier Milei's government had already disclosed that
Argentina -- the IMF's biggest debtor by far -- was seeking a
US$20-billion loan on top of the US$44 billion it already owes the
IMF, the report says.
The previous loan, signed in 2018, was the biggest ever by the
Washington-based lender of last resort to Argentina, a serial
defaulter, the report relays. In all, the IMF has bailed out South
America's second-biggest economy 22 times, the report notes.
The new program has yet to be approved by the Fund's board.
Economy Minister Luis Caputo said the new money would be used to
recapitalize the country's Central Bank, the report discloses.
He added that Argentina was also negotiating loans with the World
Bank and Inter-American Development Bank, the report relays.
Caputo said that the loans would increase the Central Bank's
reserves to "at least" US$50 billion, compared to US$26.23 billion
at present, the report says.
The prospect of another IMF loan has caused a run on the peso,
prompted by fears that the new deal could entail a possible
devaluation which Milei has rebuffed, adds the report.
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: Seeks Large Portion of US$20-billion IMF Deal Up Front
-----------------------------------------------------------------
Buenos Aires Times reports that Argentina is seeking an upfront
payment representing a large portion of its future US$20-billion
program with the International Monetary Fund, as negotiations now
focus on the size and timing of disbursements, according to people
familiar with the matter.
The size of Argentina's first disbursement has become the most
important issue of negotiations at this stage, according to one
person, who asked not to be named because talks are private,
according to Buenos Aires Times. The exact amount Argentina is
requesting is unclear, and no final decision has been reached as
negotiations are ongoing, the report notes. IMF loans usually are
disbursed gradually over several years, with countries needing to
meet certain benchmarks over time, the report relays.
Giving Argentina more money sooner, known as frontloading, is a key
point in the talks as the country aims to strengthen its
international reserves, with the Treasury planning to use some of
the IMF funding to pay down its debt with the Central Bank under
the so-called non-transferable notes, the report discloses. The
repayment would allow Argentina to recapitalise its Central Bank,
the report says.
Argentina's Economy Ministry didn't respond to a request for
comment about how much money the country is seeking up front in the
program, the report relays. The IMF's press office referred to
remarks by Chief Spokeswoman Julie Kozack that the pace and size of
disbursements are still being negotiated, the report notes.
"As with all of our prograes, disbursements will come in tranches
over the life of the program. But the exact phasing and the size of
each tranche is also, of course, part of the discussions that are
underway," the report quotes Kozack as saying.
Investors are keenly watching this detail of the programafter
Economy Minister Luis Caputo confirmed the deal will total US$20
billion, which Bloomberg News had previously reported, the report
notes.
Before the separate remarks by Caputo and Kozack, Morgan Stanley
said earlier that its base case is for the program to disburse US$5
billion up front in 2025, according to a report led by economist
Fernando Sedano, relates the report. The bank also expects another
US$5 billion from other international financial institution.
Caputo added that the IMF's executive board could take weeks to
approve a new loan, without providing a specific timeline, the
report discloses. He also said that funds combined from the IMF,
World Bank, Inter-American Development Bank and regional bank CAF
would put Argentina's Central Bank reserves near US$50 billion.
Today, reserves stand at US$26.2 billion, notes the report.
Negotiations around frontloading have dominated Argentina's past
two IMF agreements in 2018 and 2022 that failed to stabilise the
economy, the report notes.
In 2018, the IMF agreed to give Argentina more money up front and
boost the total size of the program to US$57 billion, a move that
ultimately squandered billions after a presidential election veered
the deal off track and a currency sell-off, the report discloses.
Four years later, the next government received US$9.8 billion in
the first disbursement from the IMF as part of a total
US$45-billion deal to refinance the prior one, the report relays.
A few months before the 2023 presidential election, Argentina
secured US$7.5 billion from the IMF by combining two disbursements
into one even as that administration repeatedly broke the program's
rules, 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.
TELEFONICA SA: Milei Blocks Sale of Argentina Unit to Clarin
------------------------------------------------------------
Buenos Aires Times reports President Javier Milei's government has
confirmed it will take preventive action to suspend the sale of the
local branch of Spain's Telefonica to Telecom.
In a March 21 statement, it said the move would lead to
concentration of over 60 percent of the telephone and Internet
market, according to Buenos Aires Times.
Argentina's government has made "the decision to take preventive
measures to suspend the effects of the purchase of Telefonica by
Telecom," read a Milei administration communique published on the X
social network, the report notes.
The preventive measures take the form of a recommendation by the
CNDC (Comision Nacional de Defensa de la Competencia) anti-monopoly
watchdog seeking to defend the consumers and "competition from any
market distortion," the report relays.
Last month, the government of Milei -- an outspoken free-market
economist who has slashed state spending in a bid to tame inflation
-- had announced that it would investigate the possible formation
of a monopoly, the report discloses.
"The result of the operation would imply a concentration of 61
percent in the mobile telephone market, 69 percent for landlines
while for residential Internet services in some parts of the
country the concentration could reach 80 percent," assured the
Milei presidency on X, the report says.
It said preventive measures will be maintained "until the analysis
of the notified operation has been deepened," the report relays.
Telefonica last month announced the sale of its Argentine branch to
Telecom, belonging to the Grupo Clarin media conglomerate for
US$1.245 billion, the report notes. The Presidency responded by
issuing a communique explaining that it would evaluate whether
"this operation does not constitute the formation of a monopoly,"
the report relays.
"This merger," the government then explained, "could leave
approximately 70 percent of telecommunication services in the hands
of a single economic group, which would generate a monopoly," the
report discloses.
"In that event, the state will take the pertinent measures to avoid
it," the Presidency had said, the report relays.
The government measure is "only a statement" because the operation
cannot be suspended without prior intervention by the ENACOM (Ente
Nacional de Comunicaciones) watchdog, a source close to the sector
explained to the AFP news agency, the report notes.
ENACOM must request documentation from the parties involved in the
operation prior to a possible intervention but the watchdog's
participation is not mentioned in the communique, the report
relays.
Cabinet Chief Guillermo Francos granted interviews stating that the
government's objections were based on competition and concentration
of the broadcast market, the report notes.
According to the Noticias Argentinas news agency, Francos explained
that the merger between the two companies would exceed the limits
established by law on the amount of broadcast spectrum that can be
held by a single concessionaire, which could consolidate an
oligopoly in the cellular and fibre optic market, the report
notes.
"A single company would have approximately . . . I won't tell you
the precise number because there are different versions… but
close to 70 percent of the total activity," Francos said, adding
that allowing such a concentration would go against the logic of
competition that the state should guarantee, the report relays.
The cabinet chief backed the action of the National Commission for
the Defence of Competition, which rejected the operation, and
remarked that the process will continue through the corresponding
legal channels, the report adds.
About Telefonica SA
Headquartered in Madrid, Spain, Telefonica SA operates as a
telecommunications company.
As reported in the Troubled Company Reporter-Latin America,
Egan-Jones Ratings Company on January 7, 2025, maintained its 'BB-'
foreign currency and local currency senior unsecured ratings on
debt issued by Telefonica SA. EJR also withdrew the rating on
commercial paper issued by the Company.
===========
B R A Z I L
===========
BANCO VOTORANTIM: S&P Rates New Senior Unsecured Notes 'BB'
-----------------------------------------------------------
S&P Global Ratings assigned its 'BB' issue-level rating on BV
Luxembourg Branch's proposed benchmark-size senior unsecured
notes.
The notes are part of Banco Votorantim S.A.'s (Banco BV's;
BB/Stable/B) $5.0 billion global notes program. The bank will use
the proceeds primarily for general corporate purposes.
S&P said, "Our 'BB' rating on the proposed notes reflects their
pari-passu ranking with the bank's other senior unsecured and
unsubordinated debt obligations. As a result, the rating is the
same as the long-term issuer credit rating on Banco BV. The
proposed notes will constitute less than 5% of the bank's total
funding base. In our view, this issuance doesn't change our view of
the bank's funding profile and doesn't increase refinancing risk."
S&P's issuer credit ratings on Banco BV reflect its leading
position in the used-vehicle financing segment and its diversified
product portfolio for corporate clients, which bolster business
stability. A sizable portion of the bank's revenue comes from auto
loans, a segment in which Banco BV has extensive experience. Banco
BV's corporate banking business, which includes its commercial
loans and guarantees portfolio, is also an important source of
revenue. The bank has also been working on improving its digital
services and increasing cross-selling opportunities in the retail
lending segment. The bank's significant exposure to used-vehicle
financing--a potentially volatile niche market with high
delinquency rates--represents a risk factor, which is mitigated by
the bank's extensive experience in this segment.
Banco BV is also a moderately strategic subsidiary to Votorantim
S.A. (global scale: BBB/Stable/--; national scale:
brAAA/Stable/--), which owns 50% of the bank. S&P said, "We don't
view the banking business as the group's priority in terms of
growth and long-term strategy. However, given the reputational
linkage and Brazil's regulations, we believe that Votorantim would
provide extraordinary support to the bank under some circumstances.
As a result, our stand-alone credit profile on Banco BV has a one
notch uplift."
KLABIN SA: Fitch Affirms 'BB+' Long-Term IDR, Outlook Stable
------------------------------------------------------------
Fitch Ratings has affirmed Klabin S.A.'s Long-Term Foreign Currency
(FC) and Local Currency (LC) Issuer Default Ratings (IDRs) at
'BB+', its National Scale Long-Term Rating at 'AAA(bra)' and its
National Scale bonds at 'AAA(bra)'. Fitch has also affirmed Klabin
Austria Gmbh's senior notes, guaranteed by Klabin, at 'BB+'. The
Rating Outlook for Klabin remains Stable.
Klabin S.A.'s ratings reflect the company's leading position in the
Brazilian paper and packaging sector and large forestry assets,
providing a low production cost structure and high vertical
integration. The company's solid liquidity and low refinancing risk
remain key credit considerations. Fitch expects Klabin's cash flow
generation to remain strong due to its low-cost position in the
industry and strong demand in the paper and packaging segment.
The Stable Outlook incorporates a projected deleveraging after the
acquisition of 150,000 hectares of land from Arauco (Caete
project), with net leverage returning to below 3.5x in 2026.
Key Rating Drivers
Strong Brazilian Market Share: Klabin has a leading position in the
Brazilian packaging sector and a high degree of vertical
integration, which enhances product flexibility in the competitive
but fragmented packaging industry. The company has market shares of
22% and 40%, respectively, in the Brazilian corrugated boxes and
coated board sectors. Klabin is the sole producer of liquid
packaging board in Brazil and is the largest producer of kraftliner
and industrial bags, with market shares of 60% and 51%,
respectively.
Klabin's strong market shares allow it to be a price leader in
Brazil and to preserve more stable sales volume and operating
margins during unstable economic scenarios than its competitors.
The paper and packaging business represented 59% of Klabin's EBITDA
in 2024, while pulp represented 41%. Fitch views the company's
competitive advantage as sustainable due to its scale, high level
of integration and diversified client base in the more resilient
food sector, which represents about 67% of paper and packaging
sales.
Caete Increases Own Wood Supply: Klabin acquired 150,000 hectares
of land, including 85,000 hectares of productive land, in 2024. The
transaction is part of Klabin's strategy to increase the percentage
of its own eucalyptus wood in the production process to about 75%,
which will have a positive impact on cash costs as the main blocks
of land acquired are in relatively proximity to Klabin's facilities
and have a lower harvest cost.
The company also reached an agreement to monetize part of the
forestry base while maintaining operating control of the assets
which will result in cash inflow of BRL 1.8 billion during 2025,
expected to be used to reduce debt. Additional monetization could
happen in the short term for the same purpose of strengthening the
capital structure.
Leverage Temporarily Above Sensitivities: Klabin's net leverage
reached 4.3x as of December 2024, and Fitch expects it to decline
to below 4.0x in 2025 and below 3.5x in 2026. The leverage peak in
2024, although high for Klabin's current rating, is within
tolerance during the low part of the cycle and during an investment
period, considering the company's capacity to deleverage to within
its rating sensitivities. Klabin also updated its financial policy
to underscore its commitment to maintain leverage below 3.5x across
the cycle.
Stable Pulp Prices in 2025: Average bleached eucalyptus kraft pulp
prices for 2024 reached USD625 per tonne, up from USD585 per tonne
in 2023. Fitch expects prices to remain around USD600 per tonne in
2025, considering a low starting point and a gradual increase
during the year. After the start-up of the Suzano's latest mill, no
major increases in capacity are expected until 2028. This should
push prices upward in the following years, despite the softer
increase in demand projected in comparison with previous years.
Strong Operating Margins: Fitch expects Klabin's EBITDA margin to
remain close to 40% over the rating horizon. Fitch expects Klabin
to generate EBITDA of BRL8.5 billion and cash flow from operations
(CFFO) of BRL5.8 billion in 2025 and BRL9.7 billion and BRL6.0
billion, respectively, in 2026. This compares with BRL8.2 billion
of EBITDA and BRL4.3 billion of CFFO in 2024. Klabin's FCF should
turn positive in 2025 after reaching -BRL7.3 billion, due to a
reduced dividend policy and projected investment requirements.
Fitch's base case projections considered annual dividends between
BRL1.3 billion and BRL1.5 billion in 2025 and 2026, and total
investments close to BRL6.3 billion in the period.
Brazil Country Ceiling: Klabin's FC IDR of 'BB+' is not capped by
Brazil's Country Ceiling (BB+). If Fitch lowered Brazil's Country
Ceiling, Klabin's FC IDR could go up to two notches above the
Country Ceiling at the time. This is due to a combination of
exports of USD1.2 billion, about USD200 million of cash held
outside Brazil and an undrawn USD500 million offshore credit
facility. Hard currency debt service for the next 18 months is
covered more than 1.5x by 50% of EBITDA from exports, cash held
abroad and a revolving credit facility.
Peer Analysis
Klabin has a leading position in the Brazilian packaging segment.
Its size, access to inexpensive fiber and high level of integration
relative to many of its competitors give it sustainable competitive
advantages. Its business profile is consistent with a rating in the
'BBB' category.
Klabin's leverage will remain high in 2025 after the acquisition of
land and wood to increase its own forestry base. Its leverage is
higher than Empresas CMPC S.A. (CMPC; BBB/Stable), Celulosa Arauco
y Constitución S.A. (Arauco; BBB/Negative) and Suzano S.A.
(Suzano; BBB-/Positive). Liquidity is historically strong for pulp
and packaging producers, and Klabin has strong access to debt and
capital markets.
Klabin is more exposed to demand from the local market than Suzano,
CMPC and Arauco, as these companies are leading producers of market
pulp sold globally. This makes Klabin more vulnerable to
macroeconomic conditions than its peers. Positively, its
concentration of sales in the food and beverage industry, which is
relatively resilient to downturns in Brazil's economy, and its
position as the sole producer of liquid packaging board add
stability to its operating results.
Key Assumptions
- Paper and packaging sales volume of 2.6 million tons and 2.7
million tons for 2025 and 2026, respectively;
- Pulp sales volume of 1.5 million tons in 2025 and 2026;
- Average hardwood net pulp price of USD600 per ton in 2025 and
USD600 per ton 2026;
- Average FX rate of 5.80 BRL/USD in 2025 and 2026;
- Investments around BRL6.3 billion during 2025 and 2026;
- Dividends around 15% of EBITDA from 2025 onward.
RATING SENSITIVITIES
Factors that Could, Individually or Collectively, Lead to Negative
Rating Action/Downgrade
- Average net debt/EBITDA ratios of 3.5x or higher throughout the
pulp price cycle following completion of the expansion;
- Sustained net debt at Klabin of more than USD6 billion after
completion of the expansion project;
- A more unstable macroeconomic environment that weakens demand for
the company's packaging products as well as prices.
Factors that Could, Individually or Collectively, Lead to Positive
Rating Action/Upgrade
- Average net debt/EBITDA ratios of 2.5x or below throughout the
pulp price cycle following completion of the expansion project;
- Sustained net debt at Klabin of less than USD3.3 billion after
completion of the expansion project.
Liquidity and Debt Structure
Klabin's solid liquidity position and low refinancing risk remain
key credit considerations. As of Dec. 31, 2024, the company had
BRL7.5 billion of cash and marketable securities and BRL42.7
billion of total debt, including about BRL3.0 billion of factoring
transactions in line with Fitch's criteria.
The company has an extended debt amortization profile, with BRL4.9
billion of debt maturing in 2025, including BRL3.0 billion of
factoring transactions, BRL2.4 billion in 2026 and BRL3.3 billion
in 2027. Financial flexibility is enhanced by a USD500 million
unused revolving credit facility. Fitch expects Klabin to continue
to preserve strong liquidity, conservatively positioning it for
price and demand volatility, which is an inherent risk of the
packaging industry.
As of Dec. 31, 2024, about 79% of total debt was denominated in
U.S. dollars. Total debt consisted of bonds (32%), syndicated loans
(9%), factoring (7%), BNDES (7%), export credit notes and export
prepayments (5%), Agribusiness Receivables Certificate (CRA; 1%),
debentures (6%) and other loans (33%).
Issuer Profile
Klabin leads the Brazilian corrugated boxes and coated board
sectors. It is the sole Brazilian producer of liquid packaging
board and the largest producer of kraftliner and industrial bags.
It also has annual production capacity of 1.6 million tonnes market
pulp.
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 Prior
----------- ------ -----
Klabin S.A. LT IDR BB+ Affirmed BB+
LC LT IDR BB+ Affirmed BB+
Natl LT AAA(bra) Affirmed AAA(bra)
senior
unsecured Natl LT AAA(bra) Affirmed AAA(bra)
Klabin Austria
Gmbh
senior
unsecured LT BB+ Affirmed BB+
=========
C H I L E
=========
CAP SA: S&P Affirms 'BB+' ICR, Alters Outlook to Negative
---------------------------------------------------------
S&P Global Ratings revised its outlook to negative from stable and
affirmed its 'BB+' issuer credit rating on CAP S.A. S&P also
affirmed the issue rating on its senior unsecured notes due 2036
and lowered its issue rating to 'BB' from 'BB+' on the senior
unsecured notes due 2031, reflecting increased priority debt.
The negative outlook reflects that S&P expects ongoing issues at
Los Colorados mine will weigh on CAP's results in the first half of
2025 and this, coupled with lower iron ore prices, will continue to
pressure leverage metrics, leading to a possible downgrade if the
company cannot recover operations and make progress in reducing
leverage toward or below 2.5x.
The outlook revision reflects CAP's higher leverage and ongoing
challenges in rebounding metrics in the short term.
In October 2024, CAP experienced a geotechnical issue at the Los
Colorados mine that led to a temporary halt in mining activities.
This resulted in a 10% decrease in shipment volumes in 2024.
Additionally, a 7.6% decline in realized prices and a negative
mark-to-market effect (MtM) of $151 million significantly reduced
EBITDA generation, which dropped to $553 million in December 2024
from $819 million in 2023.
While there was some relief from improved cash costs due to a
reduction in coal tariffs and the depreciation of the Chilean peso,
these factors were insufficient to offset the overall decline in
performance and leverage peaked at 2.9x at the end of 2024.
S&P expects the group to work toward resolving the contingency at
the Los Colorados mine and recover production, but it is uncertain
how long it will take to bring leverage back to historical levels.
Lower iron ore prices are likely to weigh on CAP's credit metrics
over the next two years. S&P Global Ratings expects that iron ore
prices will drop to $100 per ton in 2025 and further decline to $90
per ton in 2026. This decrease is driven by uncertainties
surrounding China demand and geopolitical risk, including tariffs,
which could pose additional challenges for CAP's EBITDA recovery.
S&P said, "Additionally, we anticipate that ongoing issues at Los
Colorados mine will hamper shipment volumes in 2025, particularly
in the first half of the year, leading to higher cash costs and
EBITDA of $500 million.
"In 2026, although we project a recovery in shipment volumes and a
reduction in cash costs due to lower energy expenses, lower iron
ore prices will continue to weigh on EBITDA. We are forecasting
EBITDA to stay between $450 million and $500 million, with leverage
remaining around 3x for at least the next two years.
"We believe CAP has adequate liquidity to meet its commitments over
the next 12 months. As of Dec. 31, 2024, CAP had $412 million
unrestricted cash, $450 million available revolving credit
facility, and short-term debt of $592 million, primarily related to
working capital lines. Additionally, the company plans to reduce
capital expenditures to maintenance levels of approximately $275
million and will propose at next shareholders meeting not to
distribute dividends this year due to reported losses in 2024 in
order to preserve cash. These measures should help manage liquidity
during this challenging period.
"We lowered our issue rating on CAP's senior unsecured notes due
2031 to 'BB' from 'BB+'--a notch below the issuer credit rating--to
reflect its structural subordination to increased priority debt. As
of December 2024, CAP's priority debt was around 70%.
"In absolute terms, the company's debt has nearly doubled to $1.7
billion in 2024 from $1 billion in 2022. This increase is primarily
attributed to bank loans at the subsidiary level. While management
is actively working to reduce debt at the subsidiary level, we
believe this could take some time. Consequently, the company is
likely to maintain a priority debt of above our 50% threshold at
least for the next two years.
"The negative outlook reflects the possibility that we will lower
our issuer credit rating in the next 12 months if the company
cannot make substantial progress in recovering operations and
reduce leverage toward or below 2.5x. Our outlook also considers
the company maintaining adequate liquidity.
"We could lower the ratings on CAP in the next 12 months if iron
ore prices continue to decline or the company's volume output
doesn't stabilize, which would increase logistics costs. In that
scenario, we expect debt to EBITDA to remain above 2.5x, free
operating cash flow to debt below 5%, and funds from operations to
debt below 45%. We could also lower the ratings if liquidity
becomes strained.
"We could revise the outlook to stable over the next 12 months if
CAP improves its operations and its profitability recovers amid
less volatile cash flow metrics. Under this scenario, we expect
debt to EBITDA consistently below 2.0x and free operating cash flow
to debt above 25%."
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J A M A I C A
=============
DIGICEL GROUP: To Shift to Renewable Energy
-------------------------------------------
RJR News reports that Telecommunications company Digicel said it
aims to reduce its 100 per cent dependence on the Jamaica Public
Service Company's grid for its 900 cell sites to 40 per cent, or
only 360 sites, starting next month.
CEO Stephen Murad says this initiative will be undertaken in
conjunction with Caban Energy - a US based renewable energy
company, according to RJR News.
He says this initiative will to reduce greenhouse gas emissions by
38,674 tonnes, and lead to significant savings, annually, the
report notes.
About Digicel Group
Digicel Group is a mobile phone network provider operating in 33
markets across the Caribbean, Central America, and Oceania
regions.
The company is owned by the Irish billionaire Denis O'Brien, is
incorporated in Bermuda, and based in Jamaica.
As reported in the Troubled Company Reporter-Latin America in
April
2020, Moody's Investors Service downgraded Digicel Group Limited's
probability of default rating to Caa3-PD from Caa2-PD. At the same
time, Moody's downgraded the senior secured rating of Digicel
International Finance Limited to Caa1 from B3. All other ratings
within the group remain unchanged. The outlook is negative.
Also in April 2020, the TCR-LA reported that Fitch Ratings has
downgraded Digicel Limited to 'C' from 'CCC', and its outstanding
debt instruments, including the 2021 and 2023 notes to 'C'/'RR4'
from 'CCC'/'RR4'. Fitch has also downgraded Digicel International
Finance Limited to 'CCC+' from 'B-'/Negative, and its outstanding
debt instruments, including the 2024 notes and the 2025 credit
facility, to 'CCC+'/'RR4' from 'B-'/'RR4'. Fitch has removed the
Negative Rating Outlook from DIFL.
JAMAICA: BoJ to Maintain Policy Rate at 6% Per Annum
----------------------------------------------------
Radio Jamaica News Online reports that the Bank of Jamaica's
Monetary Policy Committee has voted to maintain the policy rate at
six per cent per annum, signaling confidence in Jamaica's inflation
outlook.
This decision comes even as uncertainty grows around economic
policies in Jamaica's key trading partners, notes the report.
At its March 25–26 meeting, the Committee also decided to lower
the interest rate on its Standing Liquidity Facility from 8 to 7%,
effective March 28, says the report.
This move will reduce borrowing costs for commercial banks,
ensuring greater stability in short-term market interest rates,
according to Radio Jamaica News.
Inflation continues to trend downward, with annual headline
inflation at 4.4% in February 2025, a significant drop from 6.2% in
February 2024, the report relates.
Core inflation, which excludes food and fuel prices, stood at 3.8%,
marking its 20th consecutive month below six per cent, relays the
report.
The BOJ attributes this stability to a steady exchange rate,
surplus on external accounts, moderated private sector wage
pressures, and lower imported inflation, says the report.
Despite last year's adverse weather affecting agriculture,
inflation remains on track within the BOJ's target range, adds the
report.
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.
On Feb. 21, 2025, Fitch Ratings affirmed Jamaica's Long-Term
Foreign-Currency Issuer Default Rating (IDR) at 'BB-', with a
positive rating outlook. 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 2024, S&P affirmed 'BB-/B' longterm foreign and local
currency sovereign credit ratings on Jamaica and revised outlook to
positive.
JAMAICA: Export Earnings Fell 8.6% During Jan-Nov 2024, STATIN Says
-------------------------------------------------------------------
RJR News reports that Jamaica recorded an 8.6 per cent decline in
export earnings during the January to November 2024 period.
The decline is measured against the US$1,862.8 million the country
earned during the comparable period in 2023, according to RJR
News.
This is according to the Statistical Institute of Jamaica (STATIN),
in its latest international trade merchandise bulletin released,
the report relays.
"This decline was primarily due to a 63.2 per cent decrease in the
value of re-exports, which was valued at US$168.0 million during
the review period," said STATIN, the report discloses.
Of note is that on the converse, domestic exports increased by 9.2
per cent to US$ 1,534.5 million, due to a 30.5 per cent rise in
exports from the mining and quarrying industry during the period,
the report says.
"The main contributor to this increase was a 41.2 per cent rise in
alumina earnings, which moved to US$607.2 million from US$430.1
million in 2023," STATIN said, the report notes.
Meanwhile, the value of imports declined by 4.0 per cent during the
11-month period, when compared to the US$6,982.0 million spent in
the comparable period in 2023, the report recalls.
"This decrease was attributable to lower imports of raw
materials/intermediate goods and fuels and lubricant, which fell by
10.5 per cent and 7.9 per cent, respectively," said the institute,
the report says.
It shared that Jamaica's total spending on imports was valued at
US$6,700.9 million during the period, while earnings from total
exports were valued at US$1,702.4 million, the report notes.
Jamaica imported goods mainly from the United States of America
(USA), China, Brazil, Japan and Colombia during the period under
review, the report relays.
Expenditure on imports from these countries fell by 5.6 per cent to
US$4,042.1 million, compared to US$4,282.1 million recorded for the
corresponding 2023 period, the report discloses.
STATIN said the decrease was due largely to a 15.0 per cent decline
in imports of mineral fuels, the report says.
The top five destinations for Jamaica's exports were the USA, the
Russian Federation, the Netherlands, Iceland and Canada, the report
notes.
Revenue from export to these countries rose by 17.5 per cent to
US$1,251.6 million, the report relays.
This increase was due to higher expenditure on exports of crude
materials, the value of which increased by 62.0 per cent when
compared to the similar 2023 period, 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.
On Feb. 21, 2025, Fitch Ratings affirmed Jamaica's Long-Term
Foreign-Currency Issuer Default Rating (IDR) at 'BB-', with a
positive rating outlook. 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 2024, S&P affirmed 'BB-/B' longterm foreign and local
currency sovereign credit ratings on Jamaica and revised outlook to
positive.
===========
M E X I C O
===========
DOLPHIN COMPANY: Files Chapter 11 to Restructure Finances
---------------------------------------------------------
The Dolphin Company, the largest aquatic theme park operator in
Latin America and the world's leading dolphin company, announced on
March 31, 2025, that it has voluntarily filed Chapter 11 cases in
the U.S. Bankruptcy Court for the District of Delaware. This
strategic move aims to address short-term liquidity needs and
resolve challenges regarding the Company's capital structure, while
ensuring the continuation of its operations and placing a strong
emphasis on animal safety and wellbeing.
The Chapter 11 filing will allow The Dolphin Company to restructure
its financial obligations while upholding its goal of providing
unparalleled aquatic experiences to visitors worldwide. This
decision aims to enhance business operations, animal welfare, guest
experiences, employee engagement, and vendor relationships.
Through the Chapter 11 filing process, the Company has also
completed a transition in leadership. Oversight of the business
will be shared between Independent Director, Steven Strom, of
Odinbrook Global Advisors and Chief Restructuring Officer, Robert
Wagstaff, of Riveron Management Services. Their combined expertise
will be essential in guiding the business through the restructuring
process and positioning it for long-term financial stability and
growth.
"This restructuring will best enable the company to restructure
under Chapter 11, a well-recognized court-approved process, while
improving the welfare of our animals, ensuring a seamless
experience for employees, and delivering an enhanced guest
experience," said Independent Director Steven Strom. "By taking
this proactive step, we are ensuring that The Dolphin Company can
continue to offer world-class attractions and immersive experiences
to the millions of guests who visit our parks each year."
"Since its inception, the mission of the business has been to
'create and share unforgettable experiences in harmony with the
environment.' A high priority throughout the business is ensuring
safe environments for all animals," Strom continued.
New management has expressed its intent to collaborate closely with
state, federal, and international authorities to address ongoing
requests and investigations related to the health and safety of
animals. "We're focused on achieving the best possible outcomes for
the Company, including striving to provide best in class habitats
and living conditions for its animals. To that end, we plan to
enlist the help of marine biology and veterinary experts while also
fully cooperating with the appropriate regulatory bodies," said
Chief Restructuring Officer Robert Wagstaff.
The Company is securing commitments for DIP financing, which will
provide essential liquidity to maintain ongoing operations and
support restructuring efforts. The Company is confident that this
process will allow it to emerge with a stronger balance sheet and a
more sustainable financial foundation.
The Dolphin Company appreciates the continued support of its
employees, customers, vendors, and business partners throughout
this process. Additional information about the Chapter 11 filing,
including court documents and claims information, can be found at
(https://www.veritaglobal.net/dolphinco); or by calling
888-733-1434 (U.S./Canada) or 310-751-2633 (International).
During this process, the Company is being advised by Young Conaway
Stargatt & Taylor, LLP as legal advisor; Odinbrook Global Advisors,
as Independent Director; Riveron Management Services to provide a
Chief Restructuring Officer; and Riveron Consulting as Financial
Advisor; and is currently engaging an investment banking advisor.
About The Dolphin Company
The Dolphin Company is an aquatic park operator with a global
presence, operating 30 parks and dolphin habitats in 8 countries,
focusing on interactive experiences with marine mammals and
promoting environmental stewardship through education and
conservation efforts.
=====================
P U E R T O R I C O
=====================
BILLY J. CUEVAS ITHIER: Wins Bid to Dismiss Bankruptcy Case
-----------------------------------------------------------
Judge Maria de los Angeles Gonzalez of the United States
Bankruptcy Court for the District of Puerto Rico granted Billy J.
Cuevas Ithier's motion for voluntary dismissal of his bankruptcy
case. RB's Puerto Rico Inc.'s request for the dismissal to include
a bar to refile for one year and for the court to impose sanctions
against Debtor in the form of attorney's fees is denied.
Debtor acknowledges Claim No. 9 filed by RB's Puerto Rico, Inc. in
the amount of $143,815.79 and will not be objecting to such claim.
The loan made by RB's Puerto Rico to Debtor's corporation is
guaranteed by Debtor in his personal capacity. Debtor also stated
that he owns another corporation which operates a Marco's Pizza in
Guayama and that this restaurant does not generate any additional
income for him because it breaks even each month.
On July 5, 2024, RB's filed an objection to confirmation of the
amended Chapter 11 Plan arguing, inter alia, that Debtor is the
sole owner of two limited liabilities companies: ANJ Restaurant,
LLC and BFC Enterprise, LLC and failed to account for the value of
these entities in the liquidation value.
On July 16, 2024, Debtor filed a response to RB's objection to
confirmation stating, inter alia, that he does not have an
obligation to include the value of ANF or BFC, or their assets,
because they are separate legal entities.
On Oct. 16, 2024, RB's filed a motion to dismiss or convert under
11 U.S.C. Sec. 1112(b) for cause due to Debtor's alleged failure to
disclose the value of his interest in ANJ and BFC, failure to
disclose income from related entities, and failure to comply with
court orders by not disclosing all his assets in the amended Plan
and not producing the requested discovery.
Debtor seeks voluntary dismissal because he is convinced that he
will be unable to modify or amend the plan in order to obtain
confirmation and requests dismissal without prejudice. Debtor
argues that he had no obligation to disclose any of the assets of
ANJ and BFC or their value because they are separate legal entities
and their assets are not property of the bankruptcy estate. Debtor
also challenges RB's standing by stating that such creditor
obtained a judgment in state court against ANJ and such judgment
does not include any liability regarding Debtor.
RB's does not oppose the dismissal of the case but argues that
there is cause for such dismissal to include a twelve-month bar to
refile pursuant to 11 U.S.C. Secs. 105 and 349(a) because Debtor
failed to disclose his interest in ANJ and BFC in the schedules or
to include their value in the liquidation analysis and failed to
timely produce all documents requested by RB's as ordered by the
court.
The parties' disagreement regarding the value of Debtor's interest
in ANJ and BFC and the value of the franchise agreement were
matters that had not been adjudicated at the time of the filing of
the motion for voluntary dismissal. As such, the court cannot
conclude that Debtor failed to properly account for the value of
his interest in such entities in the liquidation analysis.
Regarding Debtor's failure to produce all documents and information
requested by RB's, RB's filed a motion to compel discovery that the
court had not been adjudicated at the time Debtor moved for the
voluntary dismissal of the case on the following day. As such, the
court cannot find that Debtor's alleged failure to produce the
requested documents and information constitutes egregious
misconduct sufficient to warrant dismissal with a bar to refile of
one year. For these reasons, RB's request for dismissal of this
case to include a bar to refile of one year is denied. The court
notes that in the event of a subsequent bankruptcy, RB's is not
devoid of remedies including those available under 11 U.S.C. Sec.
362(c)(3)(A).
In this case, RB's did not point to any statutory authority for the
court to grant attorney's fees. The court finds that Debtor's
conduct does not meet the heightened justification required under
In re Charbono, 790 F.3d 80, 87 (1st Cir. 2015) for the imposition
of sanctions in the form of attorney's fees.
A copy of the Court's decision is available at
https://urlcurt.com/u?l=pcRuZt from PacerMonitor.com.
Billy J Cuevas Ithier filed for Chapter 11 bankruptcy protection
(Bankr. D.P.R. Case No. 23-02673) on August 29, 2023, listing under
$1 million in both assets and liabilities. The Debtor was
represented by Alexandra Bigas Valedon, Esq. At the Debtor's
request, the case was dismissed on March 12, 2025.
*********
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
publication in any form (including e-mail forwarding, electronic
re-mailing and photocopying) is strictly prohibited without prior
written permission of the publishers.
Information contained herein is obtained from sources believed to
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The TCR Latin America subscription rate is US$775 per half-year,
delivered via e-mail. Additional e-mail subscriptions for members
of the same firm for the term of the initial subscription or
balance thereof are US$25 each. For subscription information,
contact Peter A. Chapman at 215-945-7000.
.
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