/raid1/www/Hosts/bankrupt/TCRLA_Public/250407.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
Monday, April 7, 2025, Vol. 26, No. 69
Headlines
A R G E N T I N A
ARGENTINA: IMF Met Again as Upfront Payment Proves Contentious
ARGENTINA: Poverty Falls to 38.1% in 2nd Half of 2024, INDEC Says
B A H A M A S
FTX GROUP: Sitting on $11.4B in Cash to Distribute to Creditors
FTX GROUP: Trust Seeks Alternative Service in $1.76B Binance Suit
B E R M U D A
NABORS INDUSTRIES: CFO William Restrepo to Retire Sept. 30
B R A Z I L
CIELO SA: Fitch Affirms Then Withdraws 'BB+' IDRs, Stable Outlook
INTERCEMENT BRASIL: Gets Ch. 15 Recognition of Brazil Restructuring
J A M A I C A
JAMAICA: Customer Confidence in Safety While Banking Declines
JAMAICA: Financial System Remains Resilient To Shocks, Says BOJ
P E R U
HUNT OIL: Moody's Affirms Ba1 CFR, Rates New $500MM Sr. Notes Ba1
TELEFONICA DEL PERU: Chapter 15 Case Summary
TELEFONICA DEL PERU: Creditors Hire Houlihan Lokey, CMS Grau
TELEFONICA DEL PERU: Seeks U.S. Recognition of Peruvian Proceedings
- - - - -
=================
A R G E N T I N A
=================
ARGENTINA: IMF Met Again as Upfront Payment Proves Contentious
--------------------------------------------------------------
Jorgelina do Rosario & Eric Martin at Bloomberg News report that
the International Monetary Fund's executive board met to discuss a
new Argentina program during an informal session in Washington,
according to people familiar with the matter.
A central topic of discussion at the meeting was how much of the
US$20-billion program would be disbursed immediately, the people
said, asking not to be named because the discussions are private,
according to Bloomberg News.
There is still no consensus among board members on the size of the
upfront payment, the people added, without referring to a specific
amount under discussion, Bloomberg News notes.
The IMF press office declined to comment, but flagged previous
remarks by Managing Director Kristalina Georgieva on early
disbursements, Bloomberg News says. Argentina's Economy Ministry
didn't immediately respond to text messages or a phone call, notes
the report.
Georgieva said March 31 that it was "reasonable" for the country to
ask the IMF to disburse 40 percent of the new loan in a first
payment. "They've earned it, given their performance," she told
Reuters, Bloomberg News discloses.
Board members previously discussed Argentina's program during an
informal meeting on March 25, Bloomberg News notes. These meetings
are key steps toward a staff-level agreement for the loan, which
later would need to be formally approved by the IMF board,
Bloomberg News relays.
Giving Argentina more money sooner, a practice known as
frontloading, is a contentious issue because any financing for the
country before its next capital payment to the IMF would be
considered fresh funds, increasing the lender's exposure to
Argentina, Bloomberg News notes.
The crisis-prone nation now led by libertarian President Javier
Milei needs to repay more than US$40 billion from its previous 2022
program, with the next required capital payment due in September
next year, Bloomberg News relays.
Argentina is looking for a large portion of the new loan to be paid
out immediately, Bloomberg News reported after Economy Minister
Luis Caputo announced the amount of its next IMF program would be
US$20 billion.
IMF loans usually are disbursed gradually over a few years, with
countries needing to meet certain benchmarks over time, Bloomberg
News says.
Milei and Caputo travelled to Florida to attend an event at
Mar-a-Lago, hoping to rally US political support for Argentina's
request, Bloomberg News discloses. Milei told local media prior to
the trip that he could meet informally with President Donald Trump,
but the Argentine leader left for home without seeing his US
counterpart, 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.
ARGENTINA: Poverty Falls to 38.1% in 2nd Half of 2024, INDEC Says
-----------------------------------------------------------------
Buenos Aires Times reports that Argentina's poverty rate dropped to
38.1 percent of the population in the second half of last year - a
decline of almost 15 points from the preceding half-year.
Extreme poverty, meanwhile, fell to 8.2 percent of the
47-million-strong population, down from 18.1 percent in the
previous semester, according to Buenos Aires Times.
The data, released by the INDEC national statistics bureau,
highlights a significant reversal in the national poverty rate,
which had surged to 52.9 percent in the first six months of
President Javier Milei's government, following a sharp devaluation
of the peso, the report notes.
Overall, the number of those considered to be poor declined 14.8
percentage points from the middle to the end of last year - a
massive advance despite the economy entering recession, the report
relays.
Poverty, which is measured by INDEC across 31 urban areas, is now
at its lowest rate since the 39.2 percent recorded in the second
half of 2022, the report recalls.
Despite that, 28.6 percent of households nationwide are below the
poverty line, with 6.4 percent classified as in extreme poverty,
the report discloses.
In terms of age groups, more than half (51.9 percent) of the people
in Argentina live in households that fall below the poverty line,
the report says.
The urban areas with the highest poverty rates were Gran
Resistencia (60.8 percent), Santiago del Estero (47 percent),
Formosa (46.2 percent), La Rioja (46 percent), and Gran Catamarca
(45.8 percent), the report relays.
According to INDEC, "compared to the first half of 2024, the
incidence of poverty recorded a decline in both households and
individuals, decreasing by 13.9 and 14.8 percentage points
respectively. In the case of extreme poverty, there was a
reduction of 7.2 percentage points among households and 9.9
percentage points among individuals."
"At the regional level, a decline in poverty and destitution was
observed across all regions," noted the bureau, the report
discloses.
For the most part, the dramatic improvement marks the impact of
falling inflation, the report says. Milei's government has managed
to reduce consumer price hikes considerably, falling from an
annualized 211 percent in 2023 to 118 percent last year, the report
relays.
The drop in poverty is a "direct effect of the fight against
inflation led by President Javier Milei, along with macroeconomic
stability and the elimination of restrictions that for years
limited the economic potential of Argentines,' cheered the
Presidency in a statement posted on social media, notes the
report.
Since taking office in December 2023, Milei's government has
embarked upon a fierce austerity campaign, slashing public spending
to record Argentina's first annual surplus in 14 years, the report
discloses.
The economy contracted 1.8 percent last year, less than
anticipated, though cutbacks resulted in thousands of job losses
due to the elimination or downsizing of state agencies and the
halting of public works, the report says.
Public service charges were also deregulated, tripling in value,
while the prices of rent and medicine, among others, were
liberalised - leading to increases that disproportionately affected
pensioners, the sector hardest hit by the adjustment, the report
discloses.
Argentina's economic contraction was reflected in consumption,
which has now declined for 15 consecutive months, the report
notes.
Despite this, INDEC's data confirms an improvement in poverty,
which is measured by income, the report relays.
According to the bureau's methodology, "households classified as
poor are those whose income is insufficient to purchase a basic
basket of goods," the report relays.
In its latest report, INDEC stated that this basket was valued at
342,370 pesos (around US$313 at the official exchange rate) as of
last February, the report discloses.
During a presentation to the Inter-American Development Bank (IDB),
President Milei said that poverty "has already fallen to 36 percent
due to the strong economic recovery," the report relays.
"We inherited a monthly poverty rate of 57 percent, and today it
stands at 36 percent, meaning we have reduced poverty by 21
points," he said, the report notes.
"This decline was driven by lower inflation, sustained increases in
real wages and pensions, as well as real-term increases in the
Universal Child Allowance [payment, AUH] and the Plan Alimentar"
food assistance scheme, he argued, 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.
=============
B A H A M A S
=============
FTX GROUP: Sitting on $11.4B in Cash to Distribute to Creditors
---------------------------------------------------------------
Alex Wittenberg at law360.com reports that FTX has $11.4 billion in
funds ready to be handed out to creditors, but it still has much
work to do to sort out the massive number of claims asserted
against the collapsed cryptocurrency exchange, an attorney for the
company told a Delaware bankruptcy judge.
About FTX Group
FTX is the world's second-largest cryptocurrency firm. FTX is a
cryptocurrency exchange built by traders, for traders. FTX offers
innovative products including industry-first derivatives, options,
volatility products and leveraged tokens.
Then CEO and co-founder Sam Bankman-Fried said Nov. 10, 2022, that
FTX paused customer withdrawals after it was hit with roughly $5
billion worth of withdrawal requests.
Faced with liquidity issues, FTX on Nov. 9, 2022, struck a deal to
sell itself to its giant rival Binance, but Binance walked away
from the deal amid reports on FTX regarding mishandled customer
funds and alleged US agency investigations. SBF agreed to step
aside, and restructuring vet John J. Ray III was quickly named new
CEO.
FTX Trading Ltd (d/b/a FTX.com), West Realm Shires Services Inc.
(d/b/a FTX US), Alameda Research Ltd. and certain affiliated
companies then commenced Chapter 11 proceedings (Bankr. D. Del.
Lead Case No. 22-11068) on an emergency basis on Nov. 11, 2022.
Additional entities sought Chapter 11 protection on Nov. 14, 2022.
FTX Trading and its affiliates each listed $10 billion to $50
billion in assets and liabilities, making FTX the biggest
bankruptcy filer in the US this year.
According to Reuters, SBF shared a document with investors on Nov.
10, 2022, showing FTX had $13.86 billion in liabilities and $14.6
billion in assets. However, only $900 million of those assets were
liquid, leading to the cash crunch that ended with the company
filing for bankruptcy.
The Hon. John T. Dorsey is the case judge.
The Debtors tapped Sullivan & Cromwell, LLP as bankruptcy counsel;
Landis Rath & Cobb, LLP as local counsel; and Alvarez & Marsal
North America, LLC as financial advisor. Kroll is the claims
agent, maintaining the page
https://cases.ra.kroll.com/FTX/Home-Index
The Official Committee of Unsecured Creditors tapped Paul Hastings
as counsel, FTI Consulting, Inc., as financial advisor, and
Jefferies LLC as the investment banker. Young Conaway Stargatt &
Taylor LLP is the Committee's Delaware and conflicts counsel.
Montgomery McCracken Walker & Rhoads LLP, led by partners Gregory
T. Donilon, Edward L. Schnitzer, and David M. Banker, is
representing Sam Bankman-Fried in the Chapter 11 cases.
White-collar crime specialist Mark S. Cohen has reportedly been
hired to represent SBF in litigation. Lawyers at Paul Weiss
previously represented SBF but later renounced representing the
entrepreneur due to a conflict of interest.
FTX GROUP: Trust Seeks Alternative Service in $1.76B Binance Suit
-----------------------------------------------------------------
Vince Sullivan at law360.com reports that the recovery trust
created under the Chapter 11 plan of defunct cryptocurrency
exchange FTX has asked the Delaware bankruptcy court for permission
to serve people and entities related to Binance Holdings via
alternative means, saying their locations have made traditional
service difficult or impossible in a $1.76 billion clawback lawsuit
against the rival crypto business.
About FTX Group
FTX is the world's second-largest cryptocurrency firm. FTX is a
cryptocurrency exchange built by traders, for traders. FTX offers
innovative products including industry-first derivatives, options,
volatility products and leveraged tokens.
Then CEO and co-founder Sam Bankman-Fried said Nov. 10, 2022, that
FTX paused customer withdrawals after it was hit with roughly $5
billion worth of withdrawal requests.
Faced with liquidity issues, FTX on Nov. 9, 2022, struck a deal to
sell itself to its giant rival Binance, but Binance walked away
from the deal amid reports on FTX regarding mishandled customer
funds and alleged US agency investigations. SBF agreed to step
aside, and restructuring vet John J. Ray III was quickly named new
CEO.
FTX Trading Ltd (d/b/a FTX.com), West Realm Shires Services Inc.
(d/b/a FTX US), Alameda Research Ltd. and certain affiliated
companies then commenced Chapter 11 proceedings (Bankr. D. Del.
Lead Case No. 22-11068) on an emergency basis on Nov. 11, 2022.
Additional entities sought Chapter 11 protection on Nov. 14, 2022.
FTX Trading and its affiliates each listed $10 billion to $50
billion in assets and liabilities, making FTX the biggest
bankruptcy filer in the US this year.
According to Reuters, SBF shared a document with investors on Nov.
10, 2022, showing FTX had $13.86 billion in liabilities and $14.6
billion in assets. However, only $900 million of those assets were
liquid, leading to the cash crunch that ended with the company
filing for bankruptcy.
The Hon. John T. Dorsey is the case judge.
The Debtors tapped Sullivan & Cromwell, LLP as bankruptcy counsel;
Landis Rath & Cobb, LLP as local counsel; and Alvarez & Marsal
North America, LLC as financial advisor. Kroll is the claims
agent, maintaining the page
https://cases.ra.kroll.com/FTX/Home-Index
The Official Committee of Unsecured Creditors tapped Paul Hastings
as counsel, FTI Consulting, Inc., as financial advisor, and
Jefferies LLC as the investment banker. Young Conaway Stargatt &
Taylor LLP is the Committee's Delaware and conflicts counsel.
Montgomery McCracken Walker & Rhoads LLP, led by partners Gregory
T. Donilon, Edward L. Schnitzer, and David M. Banker, is
representing Sam Bankman-Fried in the Chapter 11 cases.
White-collar crime specialist Mark S. Cohen has reportedly been
hired to represent SBF in litigation. Lawyers at Paul Weiss
previously represented SBF but later renounced representing the
entrepreneur due to a conflict of interest.
=============
B E R M U D A
=============
NABORS INDUSTRIES: CFO William Restrepo to Retire Sept. 30
----------------------------------------------------------
Nabors Industries Ltd. announced executive leadership changes as
part of its succession planning process. William Restrepo, Nabors
CFO, informed the Company of his intention to retire from his
current position effective September 30, 2025. On that date, Mr.
Restrepo will remain available as a Strategic Advisor to Anthony G.
Petrello, Nabors Chairman, CEO and President.
Mr. Petrello, commented, "As Nabors CFO for the past 11 years,
William has been instrumental in the Company's success in
refocusing in the drilling space, expanding our strength
internationally and supporting Nabors' technology leadership. He
also contributed to the growth of Nabors Drilling Solutions.
William was a key player in the divestiture of our Completions &
Workover business, as well as the acquisitions of Tesco and Parker
Wellbore. At the same time, he led our efforts to cut our debt in
half, while navigating the pronounced industry cyclicality during
his tenure. The company's ability to withstand the severe industry
downturns in 2015 and again in 2020 are a testament to his
outstanding financial leadership.
"William's accomplishments help position the Company for even more
success in the future. I thank him for his contributions, and will
continue to use his counsel as we transform Nabors over this
exciting period."
Nabors Senior Vice President – Operations Finance, Miguel
Rodriguez, will progressively transition into the role of CFO over
the next several months. Mr. Rodriguez joined Nabors in 2019, after
spending more than 25 years in finance roles at SLB. These included
several international postings with increasing responsibility,
before leading the financial function for SLB's Drilling Group. In
his role at Nabors, Mr. Rodriguez revamped and streamlined the
Operations Finance function, before adding the Company's Treasury
and Tax functions to his area of responsibility.
Mr. Petrello added, "I am excited for Miguel to take on the
additional challenges of his new role. He has worked closely with
William in preparing for this new position. Miguel has been a key
member of our leadership team and has helped us align our cost and
support structure during Nabors' transformation and the recent
industry cycles. Over the last few years, he has become
increasingly involved in our capital markets transactions, our
banking relationships and our global tax organization. I am
confident he's ready to take on his new responsibilities. I look
forward to benefitting from his contributions and leadership."
About Nabors
Bermuda-based Nabors Industries Ltd. (NYSE: NBR) owns and operates
land-based drilling rig fleets and provides offshore platform rigs
in the United States and several international markets. Nabors also
provides directional drilling services, tubular services,
performance software, and innovative technologies for its own rig
fleet and those of third parties.
Nabors Industries reported a net loss of $11.8 million for the year
ended December 31, 2023, a net loss of $307.22 million in 2022, a
net loss $543.69 million in 2021, a net loss of $762.85 million in
2020, a net loss of $680.51 million in 2019, a net loss of $612.73
million in 2018, and a net loss of $540.63 million in 2017. As of
March 31, 2024, the Company had $4.64 billion in total assets,
$3.37 billion in total liabilities, and $522.82 million in total
stockholders' equity.
* * *
In August 2024, Fitch Ratings has assigned a 'CCC'/'RR6′ rating
to Nabors Industries, Inc.'s proposed senior guaranteed notes (PGN)
due 2031. Nabors plans to utilize the proceeds from these notes to
refinance the 7.25% PGN due 2026 held at Nabors Industries, Ltd.
(Bermuda) and for general corporate purposes. The proposed notes
will rank pari passu with Bermuda's existing PGN due 2026 and PGN
due 2028.
Nabors' existing 'B-' Long-Term Company Default Rating and Stable
Outlook reflect the softening U.S. drilling environment since the
beginning of 2023, alongside a steadily growing international
segment. Fitch's credit profile assessment is supported by the
expectation that free cash flow (FCF) will be directed toward gross
debt reduction, as well as the company's proactive management of
its maturity profile and its adequate liquidity.
However, these positive factors are partially offset by the
company's large note maturities starting in 2027, which Fitch
anticipates will likely require partial refinancing through capital
markets. Additionally, potential declines in rig activity and day
rates could negatively impact cash flow and restrict FCF and
near-term gross debt reduction. The company's complex capital
structure, combined with the current high-interest rate
environment, could also limit refinancing options and increase
interest expenses.
In March 2024, S&P Global Ratings revised its outlook to stable
from positive and affirmed its 'B-' Company credit rating on Nabors
Industries Ltd. At the same time, S&P affirmed its 'B-' issue-level
rating on the company's senior priority guaranteed notes, with a
recovery rating of '3,' and a 'CCC' issue-level rating on the
company's priority guaranteed notes, with a recovery rating of '6.'
The stable outlook reflects S&P's expectation for the company's
operating performance, industry fundamentals, near-term debt
maturity profile, and credit metrics to remain appropriate for the
'B-' Company credit rating. The outlook revision reflects S&P's
expectation of reduced free cash flow generation and lower than
anticipated debt reduction.
In July 2024, S&P Global Ratings assigned its 'CCC' issue-level
rating and '6' recovery rating to Nabors Industries Ltd.'s proposed
$550 million senior guaranteed notes due 2031. The company's
subsidiary, Nabors Industries Inc., will issue the notes. The '6'
recovery rating indicates S&P's expectation of negligible (0%-10%;
rounded estimate: 0%) recovery of principal by creditors in the
event of a payment default.
===========
B R A Z I L
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CIELO SA: Fitch Affirms Then Withdraws 'BB+' IDRs, Stable Outlook
-----------------------------------------------------------------
Fitch Ratings has affirmed Cielo S.A. - Instituicao de Pagamento's
Long-Term Foreign and Local Currency Issuer Default Ratings (IDRs)
at 'BB+' with a Stable Outlook. Fitch has subsequently withdrawn
the IDRs for commercial reasons. Fitch continues to rate Cielo's
Long-Term National Scale Rating at 'AAA(bra)' with Stable Outlook.
Cielo's ratings reflect its strong position in the Brazilian card
payment industry. It benefits from a competitive advantage due to
its relationship with the distribution network of its shareholders,
which are two important banks in the Brazilian banking system,
Banco do Brasil S.A. (BdB, BB/Stable, AAA(bra)/Stable) and Banco
Bradesco S.A. (Bradesco, BB+/Negative, AAA(bra)/Stable). Cielo's
ratings also incorporate Fitch's expectations for strong operating
cash flow and maintenance of strong financial flexibility.
Fitch has withdrawn Cielo S.A. - Instituição de Pagamento's
Long-Term Foreign and Local Currency IDRs for commercial reasons.
Key Rating Drivers
Highly Competitive Environment: Fitch believes that the Brazilian
payment industry will continue to evolve rapidly, with market
dynamics changing quickly and competition remaining strong in the
near term. Technological innovations and new payment options are
expected to structurally transform the traditional business model.
Cielo faces significant challenges swiftly adapting its business
model and enhancing diversification in other products such as
financial solutions and software services. The completion of the
tender offer for the acquisition of all of Cielo's common shares in
October 2024 is anticipated to boost the company's competitive
advantages and create higher synergies with its shareholders.
Strong Position in the Brazilian Market: Cielo is the second
largest Brazilian merchant acquirer, with 20.5% market share as of
December 2024 (21.6% in 2023); the leader has around 21.4%. Its
strategy of focusing on profitability recovery over Total Payment
Volume (TPV) resulted in the loss of market share since 2021, and
Fitch expects market share to stabilize at current levels. The
significant increase in competition in the past few years
contributed to a less concentrated industry, with the two largest
participants accounting for approximately 42% of the market.
TPV Growth Expected for 2025: Cielo's TPV increased 2,6% in 2024
and Fitch expects it to present growth in line with the industry
from 2025 on. The base case scenario incorporates a TPV growth of
6.3% in 2025. Fitch projects that Brazilian market TPV is expected
to grow around 6.0% in 2026 going forward.
Strong Operating Margins: Fitch expects EBITDA margin between 40%
and 45% in 2025-2027, compared to an average of 37.4% from 2020 to
2024. Higher volume of pre-payment products should contribute to
this growth. The greater stability of Cateno's results (the joint
venture responsible for managing services related to BdBs card
business), which represents between 35% and 40% of Cielo's EBITDA
adds stability to the company's cash flow generation.
FCF to Remain Positive: Cielo is expected to generate strong EBITDA
of BRL4.8 billion in 2025, including income from anticipation to
merchants, and BRL4.6 billion in 2026, compared to BRL4.3 billion
in 2024, according to Fitch's calculations. Fitch expects positive
FCFs close to BRL1.0 billion in 2025-2026, since Cielo's working
capital needs are directly linked to the company's strategy to
finance the acquisition of receivables to merchants. Base case
projections incorporate average annual investments of BRL560
million and dividends of around BRL600 million per year.
Low Risk of Credit Loss: Cielo has no direct credit exposure to
cardholders, as the card-issuing bank guarantees their payments,
while Cielo's exposure to merchants is limited. The company is,
however, partially exposed to card-issuing bank defaults on a
payment settlement for Visa and MasterCard transactions. This risk
is mitigated because more than 62% of the volume of transactions is
concentrated in the five largest local banks, BdB, Bradesco, Itaú
(BB+/Stable), Caixa Economica Federal (BB/Stable), and Santander
Brasil (not rated). For some non-investment-grade banks, Cielo's
risk management policy requires the card-issuing bank to pledge
collateral and/or provide Standby Letters of Credit.
Strong Capital Structure: Cielo's net adjusted leverage, measured
by the net debt to adjusted EBITDA ratio, including financial
income derived from the acquisition of receivables from merchants,
should remain close to 2.5x in the next three years. As of Dec. 31,
2024, net adjusted leverage was 2.7x.
Peer Analysis
Cielo is the second largest company in Brazil's merchant acquiring
and payment processing industry, with an estimated 20.5% market
share, after Redecard (not rated; controlled by Itau Unibanco
Holding S.A.) with a 21.4% share. The third largest is GetNet (not
rated; controlled by Grupo Santander) with an estimated
market-share of 15%.
Compared with independent players, such as PagSeguro (10.6%) and
Stone (10.8%), the three leaders have some competitive advantages
due to their controlling shareholders' structure, as their
relationship with leading commercial banks gives them access to a
broad customer base to acquire merchant accounts. As is
characteristic of the industry in Brazil, Cielo and its peers have
no direct credit exposure to cardholders, as the card-issuing bank
guarantees cardholders' payments.
Key Assumptions
- Revenues of Cielo of approximately BRL6.0 billion in 2025 and
BRL6.1 billion in 2026;
- Revenues of Cateno of approximately BRL4.5 billion in 2025 and
BRL4.8 billion in 2026;
- Annual investments of approximately BRL560 million;
- Dividends of 35% of net income in 2025 and 2026.
RATING SENSITIVITIES
Factors That Could, Individually or Collectively, Lead to Negative
Rating Action/Downgrade
- An increase in the volume of credit and debit transactions with
banks rated 'BB-' and below without collateral being pledged by the
card-issuing bank or not guaranteed by MasterCard;
- Weakening credit profile of the main banks that operate with
Cielo;
- A significant loss due to fraud and chargebacks;
- Tougher competition leading to a significant loss of market share
and profitability;
- Significant changes in regulatory risk;
- A negative rating action on Brazil's sovereign ratings that leads
to negative rating actions on Banco do Brasil, Bradesco, Caixa
Economica Federal and Itau.
Factors That Could, Individually or Collectively, Lead to Positive
Rating Action/Upgrade
- Not applicable for the National Scale rating.
Liquidity and Debt Structure
As of Dec. 31, 2024, Cielo reported cash and marketable securities
of BRL1.4 billion, while the total debt was BRL12.8 billion. Cielo
has around BRL8.3 billion of debt maturing in the short term. It
has strong financial flexibility to address upcoming maturities and
good access to the bank and capital markets, including a sizable
pool of receivables. The total debt was composed of public
debentures (59%) and Fundos de Investimento em Direitos
Creditórios (FIDCs) (41%).
Issuer Profile
Cielo, a joint venture controlled by Banco Bradesco and Banco do
Brasil, processes transactions for merchants using international
brands like Mastercard, Visa, and Amex, as well as local brands,
with both banks having equal decision rights per their agreement.
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
----------- ------ -----
Cielo S.A. - Instituicao
de Pagamento LT IDR BB+ Affirmed BB+
LT IDR WD Withdrawn
LC LT IDR BB+ Affirmed BB+
LC LT IDR WD Withdrawn
INTERCEMENT BRASIL: Gets Ch. 15 Recognition of Brazil Restructuring
-------------------------------------------------------------------
Ben Zigterman at law360.com reports that New York bankruptcy judge
recognized cement supplier InterCement's reorganization efforts in
Brazil, overruling an objection from an ad hoc group of New York
noteholders that said a subsidiary's restructuring belonged in the
Netherlands.
Intercement Brasil is a producer of cement and concrete based in
Brazil. Overall, the Company has 34 production units, with an
active capacity of more than 33 million tons of cement per year,
employing more than 6,000 professionals.
Intercement Brasil and affiliates sought relief under Chapter 15 of
the U.S. Bankruptcy Code (Bankr. S.D.N.Y. Lead Case No. 24-11226)
on July 15, 2024.
The firm's foreign representative is Antonio Reinaldo Rabelo Filho.
The Foreign Representative's counsel is John K. Cunningham, Esq.
At WHITE & CASE LLP.
=============
J A M A I C A
=============
JAMAICA: Customer Confidence in Safety While Banking Declines
-------------------------------------------------------------
RJR News reports that the Statistical Institute of Jamaica has
reported that only 6.8 out of every 10 Jamaicans said they felt
safe when doing business in the country's commercial banks in 2023,
compared with 8.9 out of 10 during 2019.
STATIN also says only 4.7 out of every 10 Jamaicans felt safe when
withdrawing money from the country's 866 ATMS in 2023, compared
with 5.6 in 2019, according to RJR News.
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: Financial System Remains Resilient To Shocks, Says BOJ
---------------------------------------------------------------
RJR News reports that the Financial Policy Committee of the Bank of
Jamaica says the country's financial system remains resilient to
shocks.
The Committee says it is implementing measures to mitigate and
respond to any challenges to system stability, according to RJR
News.
The BOJ and the Financial Services Commission have already started
to conduct joint prudential and market conduct examinations under
the Twin Peaks Initiative, the report notes.
The committee says plans are also in place for continuous training
and capacity building for BOJ and FSC employees to ensure a smooth
transition towards Twin Peaks supervision, 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.
=======
P E R U
=======
HUNT OIL: Moody's Affirms Ba1 CFR, Rates New $500MM Sr. Notes Ba1
-----------------------------------------------------------------
Moody's Ratings affirmed the Ba1 Corporate Family Rating and senior
unsecured rating of Hunt Oil Co. of Peru L.L.C., Suc. Del Peru
(HOCP). At the same time, Moody's assigned a Ba1 senior unsecured
rating to HOCP's $500 million 13.5-year amortizing trust-enhanced
global senior unsecured notes. The outlook is stable.
The company will use the proceeds of the notes for debt refinancing
and for general corporate purposes. The rating of the proposed
notes assumes that the final transaction documents will not be
materially different from draft legal documentation reviewed by us
to date and that these agreements are legally valid, binding and
enforceable.
RATINGS RATIONALE
The Ba1 ratings affirmation and the assigned Ba1 rating of the
proposed notes reflect the company's large proved gas reserves,
equivalent to 16 years of life, and its solid asset base in the
world-class, prolific Camisea gas fields. The ratings also consider
the low volume risk given the strong demand both in the local and
international markets. Moody's views relatively stable prices for
natural gas and natural gas liquids through 2025, which will lead
to relatively stable credit metrics for its rating category, pro
forma for the proposed notes.
On the other hand, the ratings are tempered by HOCP's small
production size, asset concentration in only two gas blocks,
operating dependence on only two pipelines owned by Transportadora
de Gas del Peru (TGP) (TGP - Baa1 stable), no operating control
over the gas blocks, vulnerability to commodity prices, and high
dividend payout rate.
The proposed notes will start to amortize in 2032 and will be
protected by a trust account under Peruvian law, similar to the
outstanding notes. The trust account will be pledged for the
benefit of the noteholders. Moody's considers the debt agreement's
provisions that help ring-fence HOCP from its, as distributions
will be limited in case of a triggered retention event, such as
registering debt service coverage below 1.3x.
Moody's estimates that the company's debt/EBITDA ratio and
EBITDA/interest coverage ratio will pro forma for the proposed
issuance be at 2.2x and 6.6x, respectively, in 2025, from 1.8x and
6.5x in 2024. However, HOCP's retained cash flow (funds from
operations less dividends) to total debt will be weak, given the
company's relatively high dividend payout. This is mitigated by
HOCP's relatively low capital reinvestment requirements to maintain
production.
HOCP has good liquidity pro forma for the proposed notes and debt
repayment. Cash in the amount of $159.8 million as of December
2024, plus $183 million in cash from operations, and roughly
$50-100 million in net new debt will fund $46 million in capital
spending in the next 12 months. The company also counts on a $90
million committed revolving credit facility that matures in 2027.
The new issuance will allow HOCP to reprofile its debt profile, a
credit positive.
The stable rating outlook reflects Moody's belief that HOCP will
sustain its low business risk profile, maintain solid financial
policies, and be able to reduce its financial leverage per the
amortizations of the notes.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
Factors that could drive an upgrade in HOCP's ratings include a
significant increase in average daily production to at least 100
Mboe/day, significant debt reduction on a sustained basis without
affecting its operating performance, and an increase in retained
cash flow (RCF) to keep a solid cash position resulting in RCF/Debt
higher than 40%. The credit profile of HOCP's parent company, Hunt
Oil Company, would be relevant information to consider a positive
action on HOCP's rating.
HOCP's ratings could be downgraded if it faces extended operational
disruptions or if its production declines. An interest coverage, as
measured by EBITDA/interest ratio, below 6x could also trigger a
negative rating action.
PROFILE
HOCP is a wholly-owned, indirect subsidiary of Hunt Oil Company,
one of the largest privately-owned hydrocarbon companies in the
United States. HOCP was incorporated in 1999 and began its
activities in 2000. HOCP is one of the leading gas exploration and
production companies in Peru. Its primary assets include a 25.2%
interest in license contracts related to the largest natural
gas-producing fields in Peru, the Camisea Fields, which include
Block 88 and Block 56 in the Ucayali Basin of Peru. Block 88, whose
license expires in 2040, is the largest source of natural gas
production in Peru and also contains the largest number of proven
reserves. Block 56, whose license expires in 2044, is the second
largest in Peru in terms of natural gas production and proven
reserves levels. HOCP also owns a 25.2% interest in the facilities
related to the Camisea Fields, including the Malvinas Plant, a
natural gas processing plant near the Camisea Fields, and the Pisco
Plant, a liquids fractionation facility near Pisco, Peru on the
Pacific coast.
The principal methodology used in these ratings was Independent
Exploration and Production published in December 2022.
TELEFONICA DEL PERU: Chapter 15 Case Summary
--------------------------------------------
Chapter 15 Debtor: Telefonica del Peru S.A.A.
Jiron Domingo Martinez Lujan 1130
Surquillo Lima 15048
Business Description: The Chapter 15 Debtor is a major
telecommunications company in Peru,
providing mobile, fixed-line,
television, and business-to-business
services across the country. The
company serves around 13 million
customers with a workforce of over
3,600 employees and collaborates with
various business partners, vendors,
and suppliers. The Chapter 15
Debtor's infrastructure supports
roughly 33.05% of the country's
internet connections and nearly a
third of its mobile connections. It
has also led the way in fiber optic
technology deployment, connecting more
than 4.4 million homes.
Chapter 15 Petition Date: February 25, 2025
Court: United States Bankruptcy Court
Southern District of Texas
Case No.: 25-90022
Judge: Hon. Alfredo R Perez
Foreign Representative: Timothy O'Connor
23951 Delville Way
Malibu CA 90265
Foreign Proceeding: Poceeding pending before the National
Institute for the Defense of
Competition and Protection of
Intellectual Property
Foreign
Representative's
Counsel: Charles R. Koster, Esq.
WHITE & CASE LLP
609 Main Street, Suite 2900
Houston TX 10020
Tel: (713) 496-9700
Email: charles.koster@whitecase.com
Estimated Assets: Unknown
Estimated Debt: Unknown
A full-text copy of the Chapter 15 petition is available for free
on PacerMonitor at:
www.pacermonitor.com/view/MKE6AQI/Telefonica_del_Peru_SAA__txsbke-25-90022__0001.0.pdf?mcid=tGE4TAMA
TELEFONICA DEL PERU: Creditors Hire Houlihan Lokey, CMS Grau
------------------------------------------------------------
Irene Garcia Perez of Bloomberg News reports that a group of
Telefonica del Peru creditors has hired investment bank Houlihan
Lokey Inc. and law firm CMS Grau to advise them after the company
initiated insolvency proceedings in Peru, according to sources
familiar with the matter.
Representatives for CMS and Houlihan Lokey declined to comment,
while Telefonica del Peru did not respond to a request for
comment, the report states.
The company filed for insolvency after failing to secure a buyer
for the business, according to Bloomberg News.
About Telefonica del Peru
Telefonica del Peru sought relief under Chapter 15 of the U.S.
Bankruptcy Code (Bankr. S.D. Tex. Case No. 25-90022) on February
25, 2025.
Honorable Bankruptcy Judge Alfredo R. Perez handles the case.
Foreign Representative is Timothy O'Connor and is represented by
Charles R. Koster, Esq., at WHITE & CASE LLP, in Houston, Texas.
As reported in the Troubled Company Reporter-Latin America on March
17, 2025, Moody's Ratings has downgraded Telefonica del Peru S.A.A.
(TdP)'s corporate family rating and senior unsecured ratings to C
from Caa3. The outlook was revised to stable from negative.
TELEFONICA DEL PERU: Seeks U.S. Recognition of Peruvian Proceedings
-------------------------------------------------------------------
Vince Sullivan at law360.com reports that the former national phone
company of Peru, advised by lawyers from White & Case LLP, is
navigating a Chapter 15 case in Texas to obtain recognition of its
Peruvian insolvency proceedings, which the company launched after
authorities in its home country imposed a $372 million tax bill.
Valentine Hilaire of Bloomberg Law, citing a regulatory filing,
previously reported that the controlling
owner was working with Rothschild & Co to explore strategic options
for the company's assets in Peru.
About Telefonica del Peru
Telefonica del Peru sought relief under Chapter 15 of the U.S.
Bankruptcy Code (Bankr. S.D. Tex. Case No. 25-90022) on February
25, 2025.
Honorable Bankruptcy Judge Alfredo R. Perez handles the case.
Foreign Representative is Timothy O'Connor and is represented by
Charles R. Koster, Esq., at WHITE & CASE LLP, in Houston, Texas.
As reported in the Troubled Company Reporter-Latin America on March
17, 2025, Moody's Ratings has downgraded Telefonica del Peru S.A.A.
(TdP)'s corporate family rating and senior unsecured ratings to C
from Caa3. The outlook was revised to stable from negative.
*********
S U B S C R I P T I O N I N F O R M A T I O N
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Chapman, Editors.
Copyright 2025. All rights reserved. ISSN 1529-2746.
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