/raid1/www/Hosts/bankrupt/TCRLA_Public/250411.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 11, 2025, Vol. 26, No. 73
Headlines
A R G E N T I N A
ARGENTINA: Stocks in Freefall Over Trump Tariffs
BANCO DE GALICIA: S&P Affirms 'B-' Long-Term ICR, Outlook Stable
B R A Z I L
BRAZIL: Companies Face Debt Crisis Amid Rising Interest Rates
HYPERA SA: S&P Downgrades ICR to 'BB', Outlook Stable
C U B A
CUBA: Resurrects Dollar-Only Stores, a Symbol of Inequality
J A M A I C A
JAMAICA: JMEA Troubled by US Tariff on Eve of Expo Jamaica
JAMAICA: To Widen Export Destination Options
JAMAICA: Trump's 10% Tariff Could Widen Trade Deficit
P U E R T O R I C O
PUERTO RICO: PREPA Allegedly Failed to Keep USD2.9BB Aside
U R U G U A Y
NAVIOS SOUTH: Moody's Withdraws 'B2' Corporate Family Rating
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A R G E N T I N A
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ARGENTINA: Stocks in Freefall Over Trump Tariffs
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Buenos Aires Times reports that Argentine stocks took a battering,
falling more than seven percent in response to US President Donald
Trump's reciprocal tariffs list, amid panic on global markets over
the start of a trade war.
Mexican stocks also plunged 4.87 percent, despite the country being
left off Trump's list, according to Buenos Aires Times.
The Mexican rout came despite stocks ending marginally, by 0.54
percent, reflecting initial relief in Latin America's
second-biggest economy at having dodged Trump's so-called
"Liberation Day" tariffs, the report notes.
If Mexico was part-spared, Latin America's biggest economy Brazil,
and Argentina, the third-largest, were not, the report says.
Argentina's flagship Merval Index fell 7.38 percent while Brazil's
Bovespa Index lost 2.96 percent, the report relays.
Both countries were hit with 10 percent tariffs, like much of Latin
America - at the lower end of a spectrum ranging upwards to 50
percent, the report notes.
Meanwhile, Argentina's country risk rating - tracked by JP Morgan -
rose to 925 points, 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.
BANCO DE GALICIA: S&P Affirms 'B-' Long-Term ICR, Outlook Stable
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S&P Global Ratings affirmed its 'B-' long-term issuer credit rating
on Banco de Galicia y Buenos Aires S.A.U. (Banco Galicia). The
outlook is stable. S&P also affirmed the issue rating on the bank's
senior unsecured debt at 'B-', and the issue rating on the
subordinated debt at 'CCC'.
Banco Galicia's well-established brand, sound presence in the
Argentine financial system, and solid earning capacity--despite the
country's economic challenges--support its strong competitive
position. The recent acquisition of HSBC Bank Argentina S.A.,
temporarily operating under the Galicia Más brand, further
reinforces its business position. Banco Galicia acquired 58% of the
direct holdings, while its parent Grupo Financiero Galicia (GFG;
not rated) acquired the remaining 42%. The integration has begun
but the banks will continue to operate as independent entities
until this process is finalized, which is expected during
first-half 2025.
As of December 2024, Banco Galicia ranked as the second largest
financial institution in the country in terms of loans and
deposits, with market shares of 15.8% and 16.8%, respectively,
versus 12.9% and 11.6% not considering Galicia Más. The bank
enjoys a growing customer base and diversified operations across
economic sectors, segments, and clients.
As of Dec. 31, 2024, following the acquisition of Galicia Más, the
portfolio composition remained similar, with retail banking
accounting for 45% of total loans and wholesale banking for 55%.
Notably, Galicia Más' retail banking primarily targets high-income
segments, which we expect will add more transactions and operating
revenue. The overlap between clients of the two banks is expected
to be manageable. Additionally, credit cards and documents loans
remain the most significant products, representing 27% and 35% of
the total loan portfolio respectively.
For the next 12-24 months, the bank will primarily focus on the
integration with Galicia Más, and on maintaining its customer
base. S&P also expects it will continue its growth path and
increase the loan portfolio 50%-60% in real terms, surpassing the
growth of the banking system, while maintaining a relatively stable
portfolio composition.
Banco Galicia's capitalization will allow it to maintain its
business plan despite profitability pressures and dividend
distributions. S&P said, "Our opinion of the bank's capital and
earnings stems primarily from our risk-adjusted capital (RAC) ratio
forecast of 5.6%-5.4% for the next 12-24 months. Our forecast
incorporates the following base-case scenario assumptions."
-- GDP growth of 4.8% in 2025 and 2.8% in 2026.
-- Average inflation of 45.8% in 2025 and 25% in 2026.
-- Loan portfolio growth of 55% in 2025, and 40% in 2026, both
measures in real terms.
-- Compression in margins, as reference rates stabilize.
-- Return on equity (ROE) of 16% in 2025, considering the absence
of extraordinary items that positively affected the 2024 results,
such as the acquisition of HSBC Bank Argentina and the valuation of
government securities, net of higher expenses related to the
merging process. In 2026, ROE will improve to 18%-20%.
-- Manageable asset quality metrics, with nonperforming loans
(NPLs) at 2.0% of total loans, fully covered by reserves.
-- Dividend distributions according to the central bank's rules.
Payouts of about 24% in 2025 (Argentine peso [ARS] 300,000 million
as of December 2024 figures), and 30% in 2026. However, there will
be some flexibility to adjust these payouts if necessary.
Banco Galicia's regulatory capital ratio was 21.6% in 2024,
comfortably exceeding the 8% regulatory minimum, but below the
26.9% average of private banks in the industry.
As of December 2024, Banco Galicia reported an ROE of 34.2%, up
from 18.2% a year earlier (including the consolidation of Galicia
Más as of Dec. 6, 2024). Private banks recorded an average ratio
of 13% as of December 2024 and 23% the previous year,
respectively.
The bank's enhanced profitability is primarily driven by the
acquisition of HSBC Bank Argentina, which generated a gain of
ARS674.080 million, and higher net interest income, attributed to
lower funding costs resulting from declining benchmark interest
rates. Additionally, income rose from repurchase agreement
operations with the central bank in the first quarter, and higher
valuations of government securities,
These factors offset the effects of rising administrative expenses,
which included a provision of about ARS 100,000 million for the
restructuring process, as well as losses from inflation
adjustments. However, the latter significantly decreased following
a slowdown in inflation rates, which fell to 2.2% monthly in
January 2025 from 25.5% in December 2023.
Following the integration with Galicia Mas, S&P expects asset
quality metrics will remain manageable over the next 12-24 months,
aligning with average banking system trends amid an uneven sector
recovery. The bank's portfolio is diversified by customer, economic
sector, and location. The top-10 borrowers accounted for 10% of
total financing, increasing from 6% in December 2023. As of
December 2024, NPLs were reported at 2.1%, down from 2.8% in
December 2023, considering the healthy portfolio of Galicia Más.
In addition, reserve coverage remained good at 160% of NPLs. In
comparison, private banks' average NPL ratio stood at 1.6% for both
2024 and 2023, with coverage at 181% and 183%, respectively.
Banco Galicia's direct exposure to the public sector has moderated,
reflecting industry changes. Exposure to public securities,
including instruments issued by the central bank, decreased to 22%
at year-end 2024 from 37% in 2023. S&P anticipates a gradual
decrease in public sector exposure as the credit portfolio
expands.
Banco Galicia benefits from a relatively low-cost short-term and
diversified deposit base, and its funding profile has remained
stable following the acquisition of HSBC Bank Argentina. As of
December 2024, customer deposits accounted for nearly 92% of total
funding, with transactional sight deposits making up 70% of total
deposits, surpassing the private bank average of 62%. Term deposits
represented 16% of the deposit base. Other funding sources included
senior and subordinated bonds, with maturities in the short to
medium term. The stable funding ratio (SFR) was 148%, averaging
160% over the past three years. S&P expects the bank to maintain
its funding structure in the next 12-24 months.
Banco Galicia's ratio of broad liquid assets to short-term
wholesale funding remained high at 13.6x as of December 2024, in
line with those of its domestic peers. This results from high
liquidity and relatively low wholesale funding at the bank and in
the industry. S&P expects liquidity to gradually decrease as credit
demand picks up.
The stable rating outlook on Banco Galicia mirrors that on the
sovereign rating. The outlook on Argentina balances persistent
economic vulnerabilities against improved fiscal outcomes, falling
inflation, and renewed GDP growth. Global capital markets remain
closed to Argentina, leading the government to rely on the local
market by using debt exchanges, as well as traditional debt
auctions, to manage large maturities.
S&P said, "We could lower the ratings on Banco Galicia in the next
six to 12 months if the risk of the sovereign interfering with the
ability of domestic banks to access, convert, and transfer money
abroad rises.
"We could raise the ratings on the bank if we raise the sovereign
ratings to 'B-' and Banco Galicia endures our stress scenario for a
sovereign default. The latter may be more challenging, since we
anticipate the bank will increase lending, which could reduce its
regulatory capital ratios."
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B R A Z I L
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BRAZIL: Companies Face Debt Crisis Amid Rising Interest Rates
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Richard Mann at Rio Times Online reports that Brazilian companies
are grappling with mounting financial pressure as interest rates
surge, threatening their ability to manage debt and maintain
operations.
A study conducted by Integra analyzed 153 operational,
non-financial firms across ten sectors and revealed that their
financial leverage rose to 2.4 times net debt-to-EBITDA by the end
of 2024, according to Rio Times Online.
This marks the first increase since 2021, when the ratio peaked at
3.3 times, reversing a three-year trend of deleveraging, the report
notes. The Brazilian Central Bank's Selic rate, projected to reach
15% in 2025, has driven borrowing costs to unsustainable levels for
many businesses, the report relays.
The average loan rate for companies now stands at approximately 22%
annually, significantly straining cash flows, the report notes.
Sectors such as transportation, commercial real estate,
agribusiness, healthcare, aviation, retail, and construction are
particularly vulnerable due to their reliance on credit or
sensitivity to economic slowdowns, the report discloses.
Approximately 21% of the companies studied had leverage ratios
exceeding 3.5 times EBITDA by the end of 2024, surpassing the
healthy threshold of three times, the report says. This heightened
debt burden has led to a surge in judicial recovery filings, the
report relays.
Brazil's Corporate Strain
Brazil recorded 2,273 bankruptcy protection requests in 2024, the
highest number since records began in 2005 and a 62% increase
compared to 2023. Experts anticipate this figure could rise further
in 2025 as more firms struggle with debt repayment, the report
discloses.
High-profile cases like FMU Group and Cervejaria Petropolis
illustrate that even large corporations are not immune to these
pressures. Smaller firms face greater challenges due to limited
access to capital markets and reliance on bank loans, the report
notes.
Companies are increasingly exploring restructuring options such as
debt renegotiation and asset sales to alleviate financial strain,
the report relays. Gol Airlines implemented a plan in early 2024
that reduced $1.7 billion of debt through equity conversion, the
report discloses.
The updated Brazilian Bankruptcy Law (2020) has facilitated
smoother recovery processes by extending payment timelines and
enabling debt-to-equity swaps, the report says.
Banks have also improved their restructuring capabilities,
providing more support for struggling businesses, the report
relays. Despite these measures, persistently high interest rates
continue to tighten credit conditions and curb growth initiatives
across industries, the report notes.
Brazil's corporate sector faces an uphill battle as economic
challenges mount, the report discloses. While proactive
restructuring offers some relief, many businesses remain at risk of
insolvency in this volatile financial landscape, the report adds.
About Brazil
Brazil is the fifth largest country in the world and third largest
in the Americas. Luiz Inacio Lula da Silva won the 2022 Brazilian
general election. He was sworn in on January 1, 2023, as the 39th
president of Brazil, succeeding Jair Bolsonaro.
In October 2024, Moody's Ratings upgraded the Government of
Brazil's long-term issuer and senior unsecured bond ratings to Ba1
from Ba2, the senior unsecured shelf rating to (P)Ba1 from (P)Ba2;
and maintained the positive outlook. S&P Global Ratings raised on
Dec. 19, 2023, its long-term global scale ratings on Brazil to
'BB' from 'BB-'. Fitch Ratings affirmed on Dec. 15, 2023, Brazil's
Long-Term Foreign-Currency Issuer Default Rating (IDR) at 'BB' with
a Stable Outlook. DBRS' credit rating for Brazil was last reported
at BB with stable outlook at July 2023.
HYPERA SA: S&P Downgrades ICR to 'BB', Outlook Stable
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S&P Global Ratings lowered its global scale long-term issuer credit
rating on Brazil-based pharmaceutical company Hypera S.A. to 'BB'
from 'BB+' and lowered its Brazil national scale issuer credit and
issue ratings to 'brAA+' from 'brAAA'.
The stable outlook reflects S&P's expectation that the company will
be able to recover its revenue, EBITDA, and margins while improving
the distribution and delivery of its products over the coming
months and continuing to generate strong cash flow.
S&P expects the effects of changes in the working capital policy
will become evident in 2025.
In October 2024, Hypera informed the market that after internal
discussions, it had decided to start optimizing working capital by
reducing the payment term policy granted to customers. The aim of
the process would be to increase operating cash generation,
according to the statement issued by the company, by R$2.5 billion
by 2028 and R$7.5 billion over the next 10 years. Hypera's
management believes this strategy can increase financial
flexibility to capture growth opportunities, as well as improve
operational efficiency.
Meanwhile, the results for the fourth quarter of 2024 showed a
quarterly drop of 18.2% in net revenue and 74.6% in EBITDA from
continuing operations. Year on year, net revenue and EBITDA from
continuing operations fell by 6% and 23.8%, respectively. These
drops resulted in much higher leverage than we expected, with the
company reporting adjusted debt to EBITDA of 4.0x, compared with
our previous forecast of 2.7x by the end of 2024. Given the hit to
revenue and profitability, S&P expects adjusted debt to EBITDA to
remain around 3.4x in 2025, up from our previous forecast of 2.0x.
Hypera has stated that with the conclusion of working capital
optimization in 2025, its product stocks with customers will reach
levels commensurate with the overall pharmaceutical industry in
Brazil, without compromising the sales volume forecast for the
coming years, the remuneration of its shareholders, or planned
investments. S&P therefore projects revenue of R$8 billion-R$10
billion and EBITDA of R$3 billion over the next two years, with
margins of 26% in 2025 and 34% in 2026. But macroeconomic
challenges, with rising interest rates, high inflation, and
weakening GDP growth, will create execution risks for the company's
strategy.
Strong cash flow partially mitigates Hypera's exposure to
short-term obligations and higher leverage. The company has
generated consistently satisfactory cash flow and maintained
prudent liability management, especially of its short-term
obligations. S&P said, "Despite the contraction in results and the
consequent increase in leverage, we expect Hypera will maintain its
ability to honor its obligations and related interest expenses,
gradually increasing adjusted operating cash flow in relation to
debt to 28%-30% in 2025 and 2026.
"We expect operating cash flow to cover interest expenses and our
forecast annual capital expenditure (capex) and intangible
acquisitions of about R$850 million, with the remainder distributed
to shareholders through interest on own capital. As a result, we
forecast discretionary cash flow (DCF) generation from 2025 on.
"We believe Hypera's robust brand portfolio can help balance its
higher leverage. We expect leverage to gradually decrease over the
next few years as the company focuses on completing the working
capital optimization and improving the research and development
pipeline. In our base case, we expect adjusted net debt to EBITDA
will be around 3.4x at the end of 2025, then fall to 2.1x in 2026.
"The stable outlook reflects S&P Global Ratings' expectation that
Hypera will recover its credit metrics, albeit slowly, alongside
more conservative liability management, which will keep its
liquidity comfortable in the coming years. We expect the
reorganization of the company's working capital to strengthen its
cash generation and reduce its adjusted leverage, with adjusted
debt to EBITDA of 3.4x at the end of 2025 and closer to 2.0x from
2026 on.
"We could downgrade Hypera in the next 12 months if the company's
credit metrics weaken and it fails to deliver the expected recovery
in EBITDA and leverage. In this scenario, adjusted debt to EBITDA
would remain above 3.5x, with consistently negative DCF and
tightened liquidity.
"We could upgrade Hypera in the next 12 months following a
faster-than-expected drop in leverage and accelerated EBITDA
growth, with the company maintaining its conservative approach to
debt. In this scenario, adjusted net debt to EBITDA would be
consistently below 3.0x and DCF to debt above 10%."
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C U B A
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CUBA: Resurrects Dollar-Only Stores, a Symbol of Inequality
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AFP News reports that in communist Cuba, a state-owned supermarket
which opened in January, situated on the ground floor of a luxury
hotel in the upmarket Miramar neighbourhood, is the first of
several dollar-denominated stores set to open across the island as
part of a bid to boost its battered economy.
Prime Minister Manuel Marrero said the move was a "necessary
process" for the State to get its hands on some of the dollars
circulating "illegally" on the black market, the report discloses.
The Caribbean nation of 9.7 million is experiencing its worst
economic crisis in 30 years, marked by shortages of food and fuel,
recurring blackouts and a critical shortage of hard currency, the
report says.
Remittances from Cuban migrants are the island's second-biggest
source of precious dollars, after the payments it receives from
loaning tens of thousands of doctors to around 60 countries,
including Venezuela and Brazil, the report notes.
But many Cubans have no access to greenbacks. That leaves the
country divided between the haves, who can purchase plentiful goods
in dollar-payment stores, and the have-nots, who is paid in Cuban
pesos - which they then convert into MLC, a virtual currency
introduced in 2019 that has lost much of its value, the report
relays.
"The main problem of dollarisation is that it's partial," Cuban
economist Mauricio de Miranda told AFP, noting that while consumer
goods may be available in dollars, salaries are not, the report
notes.
"This naturally leads to the exclusion of people who have no way of
obtaining dollars," Miranda, a researcher at Javieriana University
in the Colombian city of Cali, said, the report discloses.
Cuba has a long, turbulent relationship with the dollar, recounts
the report.
After the nationalist revolution that brought Fidel Castro to power
in 1959, the dollar was strictly banned, the report relays.
Being in possession of a single greenback could land a person in
prison for a year, the report says. It took the collapse of the
Soviet Union, Cuba's main ally and financial backer, to bring a
change of heart.
In 1993, Castro finally decriminalised possession of dollars, and
the first stores accepting greenbacks were opened, the report
recalls. But a decade later, amid a row with the United States, the
dollar was scrapped as legal tender, the report notes.
Cuba blames its current economic woes on a tightening, during
Donald Trump's first presidency, of the six-decade-long US trade
embargo, the report discloses.
But it is also reeling from a decline in tourists, who are put off
by the widespread shortages and blackouts, and a failed monetary
reform in 2021 that drove up the price of dollars on the black
market, the report notes.
The Government has billed its partial dollarisation strategy as a
temporary measure aimed at reviving the economy - and says its
ultimate goal is to wean Cubans off the US currency altogether, the
report says.
For Tamarys Bahamonde, a Cuban economist at the American University
in Washington, it's an illusory goal, the report relates.
Cuba, she argued, is a "nearly textbook case of the difficulties
you face when you try to de-dollarise an economy," the report adds.
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J A M A I C A
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JAMAICA: JMEA Troubled by US Tariff on Eve of Expo Jamaica
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RJR News reports that Executive Director of the Jamaica
Manufacturers and Exporters Association Kamesha Turner Blake has
characterised as "unfortunate," the American imposition of a 10 per
cent tariff on Jamaican exports at a time of considerable
expenditure in preparation for Expo Jamaica.
She said that JMEA members have spent J$2 billion to promote and
attract more than 600 local and international buyers to the
four-day event, according to RJR News.
But she said members of the sector will still be displaying a range
of Jamaican products which can be supplied to the country's trading
partners on a sustainable basis, the report notes.
Mrs. Turner Blake, who spoke Real Business, on Power 106FM, also
said members of the sector are looking to the government for
incentives to cope with the current dilemma, the report relays.
Mahfood
John Mahfood, CEO of Jamaican Teas and former President of the
JMEA, suggested that Jamaican manufacturers will have to cut the
cost of their products to their suppliers in the USA by at least
five per cent and then ask the supplier to give a five per cent
discount to the consumer, in order to maintain their
competitiveness in the US market, the report notes.
He added that Jamaican exporters must seek to sell more of their
goods to the Caricom and Latin American markets, the report says.
He stressed that the sector, which contributes eight per cent of
GDP and almost 70,000 jobs, will need the government's help with
marketing, trade missions, trade agreements, and lower interest
rates in order to remain viable, 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.
JAMAICA: To Widen Export Destination Options
--------------------------------------------
RJR News reports that Jamaica's Minister of Industry, Investment &
Commerce Aubyn Hill says the government will be moving to have more
serious discussions with countries outside of the United States for
the export of Jamaican goods, a process that started more than a
year ago, according to him.
His comment comes on the heels of the Uniteed States announcing the
imposition of a 10 per cent tariff on goods it imports from Jamaica
as well as the concerns about the impact on the country's trade
deficit, according to RJR News.
Last year, Senator Hill led a delegation of public-private sector
representatives on a business mission to Guyana and Suriname to
expose them to exporting opportunities for Jamaican goods and
services, and to facilitate linkages, the report notes.
Both Guyana and Suriname are already members of the regional
trading bloc, alongside Jamaica, the report notes.
Senator Hill, speaking on The Morning Agenda, on Power 106, said
the government has also set its sights on selling Jamaican products
to other countries in South America, North America, and Europe, the
report says.
Clarification
The Minister disclosed that the government is also seeking
clarification from the Trump administration on the tariffs, the
report notes.
"We have yet to get the specifics," he said, explaining that the
customs manuals contain "thousands and thousands of goods," but,
critically, he added, it was important to learn whether
longstanding trade preferences given to CARICOM states under the
decades-old Caribbean Basin Initiative (CBI) have been disturbed by
this unilitaral tariff imposition by the Trump administration, 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.
JAMAICA: Trump's 10% Tariff Could Widen Trade Deficit
-----------------------------------------------------
RJR News reports that in the wake of United States President Donald
Trump's announcement of a 10% tariff on imports into the United
States, there's immediate concern that it could result in a
widening of Jamaica's trade deficit, the report notes.
The gap between imports and exports amounted to almost US$5 billion
last year and the tariff means Jamaica's exports to the United
States will become more expensive, the report discloses.
Jamaica exported goods valued at US$674.2 million to the USA during
the first 11 months of 2024, 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.
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P U E R T O R I C O
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PUERTO RICO: PREPA Allegedly Failed to Keep USD2.9BB Aside
----------------------------------------------------------
Michelle Kaske, writing for Bloomberg News, reports that investors
of Puerto Rico Electric Power Authority bonds claim the bankrupt
power utility failed to transfer a combined $2.9 billion over
several years to reserve accounts for debt repayment.
An outside firm hired by bondholders and insurance companies
calculated from monthly reports that the electric utility, called
Prepa, had $3.7 billion of total net revenue -- or excess funds
remaining after expenses -- from fiscal 2018 through fiscal 2023,
according to a court document filed Tuesday, April 8. Of that
amount, Prepa was supposed to direct $2.9 billion to a so-called
sinking fund that holds money for bond repayment.
About Puerto Rico
Puerto Rico is a self-governing commonwealth in association with
the United States. The chief of state is the President of the
United States of America. The head of government is an elected
Governor. There are two legislative chambers: the House of
Representatives, 51 seats, and the Senate, 27 seats. The
governor-elect is Ricardo Antonio "Ricky" Rossello Nevares, the son
of former governor Pedro Rossello.
In 2016, the U.S. Congress passed PROMESA, which, among other
things, created the Financial Oversight and Management Board and
imposed an automatic stay on creditor lawsuits against the
government, which expired May 1, 2017.
The members of the oversight board are: (i) Andrew G. Biggs, (ii)
Jose B. Carrion III, (iii) Carlos M. Garcia, (iv) Arthur J.
Gonzalez, (v) Jose R. Gonzalez, (vi) Ana. J. Matosantos, and (vii)
David A. Skeel Jr.
On May 3, 2017, the Commonwealth of Puerto Rico filed a petition
for relief under Title III of the Puerto Rico Oversight,
Management, and Economic Stability Act ("PROMESA"). The case is
pending in the United States District Court for the District of
Puerto Rico under case number 17-cv-01578. A copy of Puerto Rico's
PROMESA petition is available at http://bankrupt.com/misc/17
01578-00001.pdf
On May 5, 2017, the Puerto Rico Sales Tax Financing Corporation
(COFINA) commenced a case under Title III of PROMESA (D.P.R. Case
No. 17-01599). Joint administration has been sought for the Title
III cases.
On May 21, 2017, two more agencies -- Employees Retirement System
of the Government of the Commonwealth of Puerto Rico and Puerto
Rico Highways and Transportation Authority (Case Nos. 17-01685 and
17-01686) -- commenced Title III cases.
U.S. Chief Justice John Roberts named U.S. District Judge Laura
Taylor Swain to preside over the Title III cases.
The Oversight Board has hired as advisors, Proskauer Rose LLP and
O'Neill & Borges LLC as legal counsel, McKinsey & Co. as strategic
consultant, Citigroup Global Markets as municipal investment
banker, and Ernst & Young, as financial advisor.
Martin J. Bienenstock, Esq., Scott K. Rutsky, Esq., and Philip M.
Abelson, Esq., of Proskauer Rose LLP; and Hermann D. Bauer, Esq.,
at O'Neill & Borges LLC are onboard as attorneys.
Prime Clerk LLC is the claims and noticing agent. Prime Clerk
maintains the case Web site
https://cases.primeclerk.com/puertorico
Jones Day is serving as counsel to certain ERS bondholders.
Paul Weiss is counsel to the Ad Hoc Group of Puerto Rico General
Obligation Bondholders.
=============
U R U G U A Y
=============
NAVIOS SOUTH: Moody's Withdraws 'B2' Corporate Family Rating
------------------------------------------------------------
Moody's Ratings has withdrawn the B2 corporate family rating of
Navios South American Logistics Inc. (Navios South America). The
outlook prior to the withdrawal was stable.
RATINGS RATIONALE
In August 2024, Navios South American executed a full redemption of
the outstanding $ 478.5 million of the Senior Secured Notes due
2025, the only debt instrument rated by us.
Moody's have decided to withdraw the rating(s) following a review
of the issuer's request to withdraw its rating(s).
COMPANY PROFILE
Navios South American Logistics Inc. (NSAL) is one of the principal
ports and logistics companies operating in the region river system
in South America. The company operates an iron ore port terminal, a
grain port terminal and a newly developed liquid port terminal in
Uruguay, a liquid port terminal in Paraguay, as well as storage
services, liquid and dry barge operations on the Parana-Paraguay
river and a cabotage business in Argentina.
*********
S U B S C R I P T I O N I N F O R M A T I O N
Troubled Company Reporter-Latin America is a daily newsletter
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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.
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