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250512.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, May 12, 2025, Vol. 26, No. 94 Headlines B A H A M A S FTX GROUP: Former Exec.'s Wife Says Charges are Built on Deception B R A Z I L OCEANICA ENGENHARIA: Moody's Cuts CFR to B3, Alters Outlook to Neg. PRIO S.A.: S&P Affirms 'BB-' Long-Term ICR, Outlook Positive C A Y M A N I S L A N D S OMNIYAT SUKUK 1: Fitch Puts BB- Final Rating to USD500M Trust Cert. D O M I N I C A N R E P U B L I C DOMINICAN REPUBLIC: Minister Reaffirms Commitment to Fair Wages J A M A I C A JAMAICA: BOJ Accepts 225 Bids for $31BB Certificate of Deposit JAMAICA: Gov't. Decision Could Cost Coffee Industry $150MM JAMAICA: Missing Out on Potential Earnings From Castor Oil Market P A N A M A EMPRESA DE TRANSMISION: Moody's Cuts LT Issuer Rating to Ba1 P U E R T O R I C O BED BATH: Investor Drops Meme-Stock Case After Class Action Denial PUERTO RICO: Requests Commonwealth Funding to Settle PREPA Debt - - - - - ============= B A H A M A S ============= FTX GROUP: Former Exec.'s Wife Says Charges are Built on Deception ------------------------------------------------------------------ Elliot Weld at law360.com reports that attorney and cryptocurrency lobbyist Michelle Bond, the wife of jailed former FTX executive Ryan Salame, told a Manhattan federal judge that her campaign finance case should be tossed because prosecutors broke a promise that she wouldn't be charged if her husband pled guilty. 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 R A Z I L =========== OCEANICA ENGENHARIA: Moody's Cuts CFR to B3, Alters Outlook to Neg. ------------------------------------------------------------------- Moody's Ratings has downgraded Oceanica Engenharia e Consultoria S.A. (Oceanica)'s Corporate Family Rating to B3 from B2 and the rating of the $375 million Backed Senior Secured Notes due 2029 issued by Oceanica LUX and fully and unconditionally guaranteed by Oceanica Engenharia e Consultoria S.A. to B3 from B2. The outlook for the ratings was changed to negative from stable. RATINGS RATIONALE The downgrade of Oceanica's rating to B3 reflects the weaker than anticipated results the company posted in 2024 and the resulting weakened credit metrics and liquidity. Oceanica's Moody's-adjusted leverage has increased from 4.4x in 2023 to 10.2x in 2024 (excluding FX and the credit linked debentures) because of delays in the ramp up of new contracts and significant investments, but Moody's expects the ratio to decline to 3.5x-4x from 2025 onwards due to the new existing service contracts, which already started to operate during Q4'24 and Q1'25. Still, credit metrics and liquidity will fall short of Moody's initial expectations, since a more depreciated foreign exchange rate and higher interest rates will weight on debt service, and the company's issuance in October 2024 was smaller than initially expected. Accordingly, Oceanica needs to raise additional debt to refinance upcoming maturities in 2025-26 and to restore its cash position. Recent increase in market volatility might also lead to higher funding costs and tougher access to the capital market for refinancing, increasing the credit risk for Oceanica and making its financial profile more commensurate with a lower rating. Oceanica's B3 rating is supported by its scale and leading market position in the Brazilian offshore services industry, long-term relationship with its main customer Petroleo Brasileiro S.A. - PETROBRAS (Petrobras, Ba1 positive), and firm backlog of contracts that provides cash flow visibility through 2027. The company had a fleet of 17 vessels and 55 remotely operated vehicles (ROV) at the end of December 2024 with an average vessel fleet age of 17 years and a firm backlog of BRL9.8 billion, and benefits from contractual protections and from the specialized, mission-critical nature of its service that provides track record of operating profitably through commodity price cycles. The company is benefitting from increasing demand in its offshore energy business in Brazil while pursuing growth in other business segments in the offshore industry. The rating is also supported by the company's improving credit metrics and liquidity related to the ramp up of its service contracts. The rating is constrained by Oceanica's small size and concentrated operations compared to those of its peers, its exposure to re-contracting and repricing risks despite the track record of no contract cancellation with Petrobras, its growth strategy and the capital intensity of its business. The largely encumbered asset base and high funding cost also limits the rating, as well as the lack of track record of prudent capital allocation through investment cycles. The company's weakened credit metrics and liquidity after the transition and mobilization of several assets in 2024 also constrains the rating. Oceanica's total debt will continue to increase as the company pursues its growth strategy on the Brazilian offshore market, although any fleet expansion would be tied to the signing of new contracts. As new contracts ramp up, Oceanica will generate annual cash flow from operations of BRL350 million, which will be sufficient to cover CAPEX requirements in a capped amount of BRL350 million as per its notes indentures. LIQUIDITY Oceanica has weak liquidity, with around BRL204 million in cash and BRL463 million in debt maturing until the end of 2026, compared to Moody's previous expectations of BRL900 million in cash and only one debt instrument maturing in 2029. Moody's expects the company's cash flow from operations to amount to around BRL300-400 million per year from 2025 onwards, which is sufficient to cover maintenance investment requirements in its fleet, however the company will continue to rely on external funding to fund fleet growth. The company's notes due 2029 have incurrence covenants setting a maximum net leverage of 4.5x in 2024, gradually declining to 2.5x from 2026 onwards, and limit dividend payments to 50% of net income and capex to BRL350 million per year. Moody's expects the company to maintain a disciplined approach to capital allocation, including dividend distributions, as it starts to increase its cash from operations. Moody's also expects Oceanica to pursue additional liability management initiatives to address upcoming debt maturities and increase its cash position. STRUCTURAL CONSIDERATIONS Oceanica's $375 million secured notes are rated B3, at the same level as the company's B3 CFR, reflecting the instrument's collateral package, which includes a first-priority security interest on specific equipment, receivables, collateral account, vessels, DSRA and escrow account. The senior notes represent 87% of Oceanica's debt. The notes contain a pledge of the lower of: i) 70% of company's receivables or ii) 2x the outstanding principal amount, tested quarterly, and will have leverage-based cash flow sweeps. RATING OUTLOOK The negative rating outlook reflects Oceanica's high liquidity risks and the ongoing ramp up of credit metrics and liquidity related to existing contracts and additional liability management initiatives. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS Given the negative rating outlook, an upgrade is unlikely in the short term. Longer term, Oceanica's rating could be upgraded if the company is able to execute its existing backlog and build an operational and financial track record, while continuing to secure contract's renewal and growth, and significantly increase its scale. Quantitatively, the rating could be upgraded if the company's maintains debt-to-EBITDA remains below 3.5x, improves its free cash flow generation, increases interest coverage (EBITDA/interest) to above 2.5x and maintains at least adequate liquidity. The failure to successfully complete additional liability management initiatives and reinforce its cash balance and reduce liquidity risks would trigger a downgrade of the rating. Oceanica's rating could also be downgraded if the company's liquidity deteriorates or if leverage (measured by debt-to-EBITDA) is sustained above 4.5x. Change in financial policy, such as using significant amounts of debt for growth or dividend payments, could also lead to a downgrade. COMPANY PROFILE Headquartered in Rio de Janeiro, Brazil and founded in 1978, Oceanica is a leading provider of prevention, contingency and engineering services to the offshore oil and gas industry in Brazil. The company operates a fleet of 55 ROVs and 17 support vessels with an average fleet age of 17 years. The company generates the totality of its revenue in Brazil and mostly through contracts with Petrobras, and related to prevention services (70% of revenues), followed by engineering (20%) and contingency services (10%). In 2024, the company reported revenue of BRL1.1 billion with a Moody's-adjusted EBITDA margin of 24.7%. The principal methodology used in these ratings was Oilfield Services published in January 2023. PRIO S.A.: S&P Affirms 'BB-' Long-Term ICR, Outlook Positive ------------------------------------------------------------ S&P Global Ratings affirmed its 'BB-' and 'brAA+' long-term issuer credit and national scale ratings and its 'brA-1+' short-term national scale rating on Prio S.A., its 'BB' issue-level rating on its senior secured notes, and its 'brAA+' issue-level rating on its senior unsecured debentures. The outlook remains positive, indicating that S&P could raise the ratings in the next 12 months once the company increases production and reduces leverage. Prio S.A. announced the acquisition of a 60% stake in Peregrino field from Equinor Brasil Energia Ltda, which we estimate will add about 60 thousand barrels of oil equivalent per day (kboe/d) to production and 202 million barrels of oil to its current reserves. With this acquisition and assuming Wahoo's production in 2026, S&P now expects Prio's daily production will approach 200 kboe in 2026, although the deal depends on regulatory approval and Wahoo on environmental permits, the timing of which are uncertain. Upon the conclusion of the above factors, S&P expects Prio to maintain leverage below 2.0x and sustain comfortable liquidity. S&P estimates it will add about 60 kboe/day to Prio's production and 202 million barrels of proved reserves (1P) until first-half 2026, when the company estimates the acquisition will be concluded. The deal totals $3.5 billion, but cash disbursements will be lower, estimated at about $2.4 billion, considering the field's cash generation since Jan. 1, 2024 (the deal effective date), which will be adjusted at closing. The deal is divided in two parts: the acquisition of a 40% stake and operation of the field, and the acquisition of a 20% stake. It depends on antitrust and regulatory approvals. S&P said, "We estimate Prio's daily production will approach 200 kboe by 2026, considering 100% of Peregrino, Wahoo's first oil, and continued solid performance at existing fields. For 2025, we currently project daily production of about 110 kboe, lower than 150 kboe in our previous forecast because of delayed approvals for environmental licenses. We previously expected Wahoo's first oil in midyear 2025, and in our base case now assume first-quarter 2026." In February 2025, Prio received the approval for Wahoo's drilling campaign, but is still awaiting environmental permits for subsea works and interconnection to the Frade floating, production, storage and offloading (FPSO) vehicle. S&P expects Prio to maintain EBITDA margins above the industry average, despite Peregrino's higher lifting costs and higher price discounts to Brent. The company ended 2024 with an average lifting cost of $9 per barrel (/bbl), which considered only one month of its 40% stake in Peregrino, versus $7.7/bbl in 2023. Peregrino's lifting cost (estimated at about $18.5/bbl for 2025) is much higher than Prio's other assets (average $7.5/bbl). S&P now forecasts consolidated lifting costs at $12.8/bbl in 2025 and decreasing to $9.7/bbl in 2026. The reduction considers the conclusion of the works on a gas pipeline at Peregrino by midyear 2026, shifting energy supply to natural gas from diesel, reducing production costs, and the operation at Wahoo with much lower lifting costs. Moreover, due to the quality of oil and logistics costs, Peregrino's discount to Brent is higher at about $10.5/bbl, versus $2.5/bbl-$5.0/bbl for the Frade, Polvo and Tubarao Martelo, and Albacora Leste fields. Furthermore, Prio's EBITDA margin is affected by its trading operations, which have very low margins due to the nature of the business. Combined, S&P now forecasts EBITDA margins at about 60% in 2025 but approaching 70% in 2026 due to the expected reduction in lifting costs. S&P said, "We expect Prio to adequately fund the new acquisition, maintaining reasonable leverage and liquidity. The company already paid $335 million of the acquisition at signing, with its cash position of $715 million as of March 31, 2025. In first-quarter 2025, it raised about $200 million (Brazilian real [R$] 1.2 billion) in debentures and refinanced about $300 million of bank loans (about R$1.7 billion) originally due in 2026. "We believe Prio has access to the domestic credit market and good relationships with banks, proven by debt refinancing and the funding for previous mergers and acquisitions (M&A). We also believe it could tap the international bond market, like in the past, at reasonable costs. However, current global uncertainties could pose risks to the timing and cost of funding. "In our view, Prio has proven its ability to deleverage quickly after large M&A, with a focus on operational efficiencies. Prio's fields are all in the Campos Basin, which increases efficiencies between fields and enables better terms with suppliers. We believe that higher EBITDA generation after consolidation of the acquired stake and Wahoo's production will result in leverage reduction to 1.5x-2.0x in 2026 from about 3.5x-4.0x by year-end 2025. This metric for 2025 considers the amount to be paid for the acquisition but no cash generation from the 60% stake in Peregrino. If we exclude the acquisition amount, debt to EBITDA would be about 2.0x. "The positive outlook indicates that we could raise our ratings on Prio in the next 12 months once it increases daily production to comfortably above 150 kboe with controlled leverage. "We would revise the outlook back to stable in the next 12-18 months if the company's production and sales are significantly lower than our expectations because of delays in the approval of the Peregrino acquisition and/or Wahoo's development, or if oil prices are well below our current price deck assumptions for a sustained period, resulting in lower EBITDA that weakens credit metrics. "We could also revise the outlook to stable if Prio's growth strategy becomes more aggressive, increasing leverage significantly and reducing free operating cash flow (FOCF). These scenarios would lead to debt to EBITDA trending to 3.0x and negative FOCF on a sustained basis. "We could raise the ratings in the next 12 months once we see the company comfortably delivering production at about or above 150 kboe/d in 2026, with debt to EBITDA at about 2.0x, and measures to address acquisition funding and next debt maturities to support a comfortable liquidity position." These factors would result from the approval and successful integration of the additional 60% stake in Peregrino and/or Wahoo's proved production at our forecast levels after first oil. =========================== C A Y M A N I S L A N D S =========================== OMNIYAT SUKUK 1: Fitch Puts BB- Final Rating to USD500M Trust Cert. ------------------------------------------------------------------- Fitch Ratings has assigned Omniyat Holdings Ltd's (Omniyat) sukuk trust certificate issuance of USD500 million 8.375% maturing in May 2028 a final rating of 'BB-' with a Recovery Rating of 'RR4'. The sukuk have been issued through the trustee, Omniyat Sukuk 1 Limited. The final rating is in line with Omniyat's Long-Term Issuer Default Rating (IDR) and senior unsecured rating of 'BB-'. Omniyat Sukuk 1 Limited has been incorporated solely for the purpose of issuing the certificates. BNY Mellon Corporate Trustee Services Limited is acting as delegate of the trustee. Omniyat is the obligor, seller, lessee and service agent. Omniyat will use the proceeds for general corporate purposes including green financing and debt refinancing. Key Rating Drivers The instrument's rating is aligned with Omniyat's IDR. This reflects Fitch's view that a default of these senior unsecured obligations would reflect a default of Omniyat, in accordance with the agency's rating definitions. Fitch has given no consideration to any underlying assets or collateral provided, as the agency believes that the trustee's ability to satisfy payments due on the certificates will ultimately depend on Omniyat satisfying its unsecured payment obligations to the trustee under the transaction documents described in the base offering circular and other supplementary documents. In addition to Omniyat's propensity to ensure repayment of the trust certificates, in Fitch's view, Omniyat is required to ensure the full and timely repayment of Omniyat Sukuk 1 Limited's obligations, due to Omniyat's various roles and obligations under the sukuk structure and documentation, especially but not limited to the below features: - The rental due on a rental payment date and the murabaha profit instalment, will be sufficient to fund the periodic distribution amounts payable by the trustee in respect of the relevant certificates. - On any dissolution or default event, and following the receipt of a dissolution notice, the certificates of the relevant series are immediately due and payable at the dissolution distribution amount. The trustee will have the right under the purchase undertaking to require the obligor to purchase and accept the transfer on the dissolution event date of all the trustee's rights, title, interests, benefits and entitlements in, to and under the lease assets at the exercise price. - On any dissolution or default event, the aggregate outstanding amounts of deferred sale price then outstanding will become immediately due and payable by Omniyat, and the trustee will have the right under the purchase undertaking to require Omniyat to purchase all of its rights, title, interest, benefit and entitlement, present and future, in to and under the relevant lease assets at the exercise price. - The exercise price payable by Omniyat under the purchase undertaking to the trustee, together with the aggregate amount of the deferred sale price then outstanding, if any, are intended to fund the dissolution distribution amount payable by the trustee under the trust certificates. The dissolution distribution amount should equal the sum of the outstanding face amount of such trust certificate; and any due and unpaid periodic distribution amounts for such certificates, or such other amount specified in the applicable pricing supplement. - The outstanding deferred sale price payable by Omniyat and the exercise price together are intended to fund the dissolution distribution amount payable by the trustee. - The dissolution amount is the sum of the outstanding face amount of a certificate and any due and unpaid periodic distribution amounts relating to the certificates; or other amount specified in the applicable pricing supplement. - The lessor agrees that the lessee may sublease the lease asset to any third party, provided that: (i) any such sublease does not in any way affect, impair or reduce the obligations of the lessee; and (ii) any use of the lease assets pursuant to any such sublease does not and will not contravene the principles of Shari'a. If the lessee fails to comply, it would constitute a dissolution event. - The lessee (Omniyat) undertakes to permit the lessor and any person authorised by the lessor at all reasonable times to inspect and examine the condition of the lease assets. If the lessee fails to comply, it would constitute a dissolution event. - Additionally, if the lessee fails to keep and maintain the lease assets in suitable condition (other than fair wear and tear), the lessor shall be entitled, but not obliged, to take possession of the lease assets for the purpose of taking all necessary steps or measures or doing all acts as may be necessary (at the cost and expense of the lessee) to ensure that the lease assets are in suitable condition for the purpose for which they are currently employed or intended to be employed. - In a loss event (unless the lease assets is/are replaced), if there is a shortfall from the insurance proceeds, the service agent (Omniyat) will undertake to pay the loss shortfall amount directly into the transaction account. If the service agent is not in compliance with the obligation to insure the assets against total loss or partial loss events, it will immediately deliver written notice to the trustee and the delegate of such non-compliance and the details thereof, and this will constitute an obligor event. - The payment obligations of Omniyat under the transaction documents, are and will be direct, unconditional, unsubordinated, and unsecured obligations, and (subject to certain negative pledge conditions) will at all times rank at least pari passu with all present and future unsecured and unsubordinated obligations of Omniyat from time to time outstanding, provided, further, that Omniyat will have no obligation to effect equal or rateable payment(s) at any time with respect to any such other obligations and, in particular, will have no obligation to pay such other obligations at the same time or as a condition of paying sums due under the transaction documents to which it is a party and vice versa. - The sukuk documentation includes an obligation on Omniyat to ensure that at all times, the tangibility ratio defined as the aggregate value of the lease assets/aggregate value of the lease assets and the deferred sale price outstanding is more than 50%. Failure of Omniyat to comply with this obligation will not constitute an obligor event. If the tangible asset ratio falls below 33% (tangibility event), the certificate holders will have the option to require the redemption of all or any of their trust certificates at the dissolution amount and the trust certificates will be delisted. In this event, there would be implications for the tradability and listing of the trust certificates. - Fitch expects Omniyat to maintain a tangible asset ratio above 50%. The obligor has a small base of unencumbered tangible assets amounting to USD345 million, of which USD275 million will be allocated to the upcoming sukuk instrument. As such, Omniyat's asset base is sufficiently strong to support the trust certificate. - The terms of the trust certificates include a negative pledge provision, obligor event, change-of-control clause, restrictive and financial covenants with respect to the trustee. The transaction documents are governed by English law and the laws of the Emirate of Dubai and, to the extent applicable in the Emirate of Dubai, the federal laws of the United Arab Emirates. Fitch does not express an opinion on whether the relevant transaction documents are enforceable under any applicable law. However, Fitch's rating on the trust certificates reflects the agency's belief that Omniyat would stand behind its obligations. - Fitch does not express an opinion on the trust certificates' compliance with sharia principles when assigning ratings to the trust certificates. Peer Analysis The instrument's rating is derived from Omniyat's Long-Term IDR. Key Assumptions The instrument is issued on behalf of Omniyat via the special-purpose vehicle Omniyat Sukuk 1 Limited. RATING SENSITIVITIES Factors that Could, Individually or Collectively, Lead to Negative Rating Action/Downgrade - A downgrade of Omniyat's IDR would lead to similar action on the sukuk rating. The sukuk's rating may also be sensitive to adverse changes to the roles and obligations of Omniyat and Omniyat Sukuk 1 Limited under the trust certificates' structure and documents Factors that Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade - An upgrade of Omniyat's IDR will be mirrored in the sukuk rating Issuer Profile Omniyat is a Dubai-based homebuilder focused on the luxury end of the housing market. Date of Relevant Committee 24-Apr-2025 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 Omniyat Holdings Ltd has an ESG Relevance Score of '4' for Governance Structure. This reflects significant dependence on the decision-making of the founders, which has a negative impact on the credit profile, and is relevant to the rating[s] in conjunction with other factors. The highest level of ESG credit relevance is a score of '3', unless otherwise disclosed in this section. A score of '3' means ESG issues are credit-neutral or have only a minimal credit impact on the entity, either due to their nature or the way in which they are being managed by the entity. Fitch's ESG Relevance Scores are not inputs in the rating process; they are an observation on the relevance and materiality of ESG factors in the rating decision. Entity/Debt Rating Recovery Prior ----------- ------ -------- ----- Omniyat Sukuk 1 Limited senior unsecured LT BB- New Rating RR4 BB-(EXP) =================================== D O M I N I C A N R E P U B L I C =================================== DOMINICAN REPUBLIC: Minister Reaffirms Commitment to Fair Wages --------------------------------------------------------------- Dominican Today reports that Minister of Labor Eddy Olivares Ortega reaffirmed the government's commitment to improving wages, combating informal employment, and strengthening workplace safety and health during the observance of International Workers' Day. Speaking at an event organized by the country's three main labor unions, held in the conference hall of the Central Nacional de Unidad Sindical (CNUS), Olivares urged union leaders to join the fight against labor informality in order to uphold workers' rights and ensure access to social security and dignified pensions for Dominican families, according to Dominican Today. The event was led by prominent labor figures Rafael "Pepe" Abreu, Gabriel del Rio, and Jacobo Ramos, alongside Rafael Santos, director of the National Institute for Technical and Vocational Training (INFOTEP), the report notes. Minister Olivares commended their leadership and dedication to building a labor movement grounded in social dialogue and the best interests of both the nation and its workers, the report relays. He praised President Luis Abinader as a "pro-worker president," citing wage increases of 20%, 25%, and even 30% across various productive sectors during his administration—measures aimed at addressing the longstanding gap in minimum wage levels and improving future pension benefits, the report says. Olivares emphasized the urgency of reducing the country's high rate of informality, currently at 56%, and called for a nationwide campaign for formalization, the report notes. "Informality is a social wound that we must heal together," he said. He also announced the modernization of the Ministry of Labor, including the digitization of services and the integration of artificial intelligence to enhance inspection processes, transparency, and workplace safety, the report discloses. Additionally, he reaffirmed his support for advancing a 21st-century Labor Code, developed in collaboration with workers, employers, and the government, the report says. The minister highlighted ongoing institutional progress, including the recent certification of 555 companies for workplace hygiene and safety compliance, the report relays. He also noted the Dominican Republic's growing international recognition as a model of tripartism -- a collaborative approach between government, employers, and workers, the report discloses. This success was recently acknowledged by the International Labour Organization (ILO), which selected the country to host its upcoming regional meeting, the report adds. About Dominican Republic The Dominican Republic is a Caribbean nation that shares the island of Hispaniola with Haiti to the west. Capital city Santo Domingo has Spanish landmarks like the Gothic Catedral Primada de America dating back 5 centuries in its Zona Colonial district. Luis Rodolfo Abinader Corona is the current president of the nation. S&P Global Ratings affirmed its 'BB' long-term foreign and local currency sovereign credit ratings on the Dominican Republic on December 3, 2024. The outlook remains stable. S&P also affirmed its 'B' short-term sovereign credit ratings and kept the transfer and convertibility (T&C) assessment unchanged at 'BBB-'. Fitch, on November 26, 2024, affirmed the Dominican Republic's Long-Term Foreign-Currency Issuer Default Rating (IDR) at 'BB-'. The Rating Outlook is Positive. Moody's credit rating for Dominican Republic was last set at Ba3 in August 2023 with the outlook changed to positive. ============= J A M A I C A ============= JAMAICA: BOJ Accepts 225 Bids for $31BB Certificate of Deposit -------------------------------------------------------------- RJR News reports that the Bank of Jamaica said it received 296 bids, valued at $49.4 billion from investors for the $31 billion it wanted to take out of circulation in order to stabilise the dollar and contain inflation. The bank, however, said it accepted only 225 of these bids, amounting to $31 billion, according to RJR News. The average interest rate paid by the bank for these deposits was 5.9% per year, the report notes. The highest bid rate was 8% per year for $500 million, while the lowest bid rate was 5.5% for $158.5 million, the report adds. About Jamaica Jamaica is an island country situated in the Caribbean Sea. Jamaica is an upper-middle income country with an economy heavily dependent on tourism. Other major sectors of the Jamaican economy include agriculture, mining, manufacturing, petroleum refining, financial and insurance services. 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: Gov't. Decision Could Cost Coffee Industry $150MM ---------------------------------------------------------- RJR News reports that Managing Director of Mavis Bank Coffee Factory and President of the Jamaica Coffee Exporters Association, Norman Grant, says a recent government decision will cost the struggling industry $150 million. He says the Ministry of Agriculture and the Jamaica Commodities Regulator Authority (JACRA) awarded a contract to develop blockchain technology without first consulting industry members, according to RJR News. The goal is to meet strict EU environmental export regulations, the report notes. Mr. Grant explained that although the EU only accounts for 3 per cent of Jamaica's coffee exports, producers must still meet its rigorous environmental standards, the report relays. To comply, the authorities gave a contract to a private company to create a digital ledger system, the report notes. He added that coffee and cocoa industry officials will meet with the JACRA again to express their opposition to the move, 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: Missing Out on Potential Earnings From Castor Oil Market ----------------------------------------------------------------- RJR News reports that the Mona Institute for Applied Sciences says, although the global market for Jamaican Black castor oil is valued at US$300 million, Jamaica's share of this is less than US$5 million. Meanwhile, the wider castor oil market is valued at US$2 billion, according to RJR News. Dr. Howard Reid, Director and Principal Researcher at the Institute, says there is a proliferation of inauthentic Jamaican Black Castor Oil on the market due to a lack of standards, the report notes. The local market has also been stagnant for 10 years, despite much discussion, the report relays. Labour & Social Security Minister Pearnel Charles Jr., says the sector can contribute approximately US$100 million in foreign exchange earnings to the economy annually if production improves, the report notes. But, according to President of the Jamaica Castor Oil Industry Association Courtney Haughton, the sector is not getting enough support from the Ministry of Agriculture, the report discloses. 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 A N A M A =========== EMPRESA DE TRANSMISION: Moody's Cuts LT Issuer Rating to Ba1 ------------------------------------------------------------ Moody's Ratings downgraded to Ba1 from Baa3 Empresa de Transmision Electrica, S.A. ("ETESA")'s long term issuer and senior unsecured ratings. At the same time, Moody's downgraded to ba2 from ba1 ETESA's Baseline Credit Assessment ("BCA"), a measure of the company's standalone creditworthiness. The rating outlook remains negative. RATINGS RATIONALE ETESA's ratings downgrade to Ba1 and the downgrade of the BCA to ba2 was triggered by evidence of further weaknesses in the company's governance and transparency, following (i) recurring restatements in financial disclosures, (ii) delays in the publication of audited financial statements for 2024, and (iii) the request for creditors to waiver and eliminate financial covenants on its local bonds debt documentation. These events follow the weak controls and policies that caused a delay in $12.8 million coupon payments scheduled for November 2, 2024, for which there has been insufficient evidence of meaningful improvement to this date. The persistent track record demonstrates a governance standard that is not consistent with that of an investment grade issuer. The negative outlook considers, the deterioration in ETESA's liquidity profile and its large investment plan over the next two years, which will require additional funding during a period of more volatile financial market conditions due to disruptions in global trade. The non-audited financial statements for the end of 2024, showed a cash and equivalents position of about $16 million compared to $157 million at the end of 2023. Ongoing substantial investments to improve network connectivity and reliability in the country and larger payables led to a higher cash burn. Moody's notes that the company has no debt maturities in 2025, limiting the refinancing risk in the near term; however, sizeable debt maturities in the local market of $75 million and $120 million are due in May 2026 and July 2027, respectively. The company can manage the 2025 interest expenses of approximately $35 million through internal cash generation and an available committed credit line of $30 million with Banco Nacional de Panama. But, the upcoming maturities, combined with remaining capital investment needs of approximately annual $120 million for 2026 and 2027 will require external funding sources that may limit an improvement in credit metrics. Supporting the ba2 standalone credit quality is ETESA's solid market position with exclusive legal rights to operate the Panamanian transmission network, under a regulatory framework that incorporates a tariff mechanism that allows the company to achieve a fixed return on its investment and operating costs without being exposed to volume or commodity risks. Under Moody's base case for ETESA, the 3-year average FFO to Net Debt ratio will drop to 8.4% in 2024 and 2025, from 9.7% in 2023, and will further decline but remain above 6.5% in 2026-27. Meanwhile, the 3-year average cash interest coverage ratio will slightly deteriorate to 2.7x in 2024 and 2025, from 2.9x in 2023, but will decline further to about 2.1x through 2027. The projected metrics are consistent with a "Ba" range, in Moody's Methodologies for Regulated Electric and Gas Networks. ETESA's cash flow will likely increase as these investments are completed and gradually incorporated in the regulated tariff. An important rating consideration is that the company will continue investing to reinforce the grid, in order to limit transmission shortfalls that could give rise to extraordinary costs. The Ba1 rating continues to reflect Moody's views of a high level of expected government extraordinary support in the event of financial distress, given the importance of the company's services to the country's economic development and national security as the sole transmission operator in the country. This is recognized in the application of Moody's Joint Default Analysis ("JDA") framework for Government-Related Issuers methodology ("GRIs"), which takes into account the (i) new Baseline Credit Assessment of ba2, (ii) the Baa3 rating of the Government of Panama as ETESA's support provider, (iii) Moody's estimates of high implied government support in case of extraordinary financial distress and (iv) a very high default dependence between ETESA and the Government of Panama (Baa3 negative). Factored in the sovereign's negative rating outlook are the increased risks derived from its fiscal challenges. Since the Government of Panama is the company's sole owner and extraordinary support provider in the event of financial distress, ETESA's rating outlook is therefore aligned with that of the sovereign. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS Given the negative outlook, positive pressure on the rating is unlikely in the next 12 to 18 months. Upward pressure on ETESA's rating would require an improvement in the company's liquidity buffers along with better governance and disclosures, providing higher visibility on its financing and investment strategy. Upgrade pressure would also increase if there is an improvement in the credit quality of the sovereign rating, or if ETESA's projected metrics to improve, such that the cash interest coverage and FFO/Net Debt stays above 2.8x and 9.0%, respectively, on a sustained basis. The rating would downgrade if Moody's sees deterioration in the credit quality of the sovereign rating, or a deterioration of the domestic regulatory framework. Downward pressure on ETESA's rating would also be caused by higher leverage or lower than anticipated cash flows, such that its cash interest coverage and FFO/Net Debt were to be below 1.8x or 5.0%, respectively, on a sustained basis. Additionally, perception of the continuity of weak governance practices, alongside with diminished controls and transparency, can add negative pressure to the rating. Prolonged delays in attaining an extended debt maturity schedule would also lead to negative rating pressures. PROFILE Founded in 1998, Empresa de Transmision Electrica, S.A. (ETESA) operates the country's transmission network as a monopoly and is wholly owned by the Government of Panama. ETESA, granted by law, owns and oversees the operation and maintenance of the transmission system, which consists of three transmission lines that span roughly 3,000 kilometers and 18 substations, providing interconnection between the power generation plants and regulated customers, which are primarily the three distribution companies in Panama. Additionally, the company dispatches energy according to market rules, performs energy demand planning activities and coordinates public auctions to secure supply to regulated customers. The methodologies used in these ratings were Regulated Electric and Gas Networks published in April 2022. ===================== P U E R T O R I C O ===================== BED BATH: Investor Drops Meme-Stock Case After Class Action Denial ------------------------------------------------------------------ Gillian R. Brassil of Bloomberg Law reports that an investor in Bed Bath & Beyond Inc. has withdrawn its lawsuit accusing activist investor Ryan Cohen of orchestrating a pump-and-dump scheme involving the now-bankrupt company's stock. The case was dismissed after a federal judge in Washington, D.C., reaffirmed his earlier decision to deny class certification for investors who alleged losses tied to Cohen and his firm, RC Ventures LLC, during the meme-stock frenzy. On May 8, 2025, Judge Trevor N. McFadden officially closed the case following a joint stipulation of voluntary dismissal with prejudice filed by Belgian investment firm Bratya SPRL and Cohen, the report states. About Bed Bath & Beyond Bed Bath & Beyond Inc., together with its subsidiaries, is an omnichannel retailer selling a wide assortment of merchandise in the Home, Baby, Beauty & Wellness markets and operates under the names Bed Bath & Beyond, buybuy BABY, and Harmon, Harmon Face Values. The Company also operates Decorist, an online interior design platform that provides personalized home design services. At its peak, Bed Bath & Beyond operated the largest home furnishing retailer in the United States with over 970 stores across all 50 states, consistently at the forefront of major home and bath trends. Operating stores spanning the United States, Canada, Mexico, and Puerto Rico, Bed Bath & Beyond offers everything from bed linens to cookware to electric appliances, home organization, baby care, and more. Bed Bath & Beyond closed over 430 locations across the United States and Canada before filing Chapter 11 cases, implementing full-scale wind-downs of their Canadian business and the Harmon branded stores. Left with 360 Bed Bath & Beyond, and 120 buybuy BABY stores, Bed Bath & Beyond Inc. and 73 affiliated debtors on April 23, 2023, each filed a voluntary petition for relief under Chapter 11 of the United States Bankruptcy Code to pursue a wind-down of operations. The cases are pending before the Honorable Vincent F. Papalia and requested joint administration of the cases under Bankr. D.N.J. Lead Case No. 23-13359. Kirkland & Ellis LLP and Cole Schotz P.C. are serving as legal counsel, Lazard Frares & Co. LLC is serving as investment banker, and AlixPartners LLP is serving as financial advisor. Bed Bath & Beyond Inc. has retained Hilco Merchant Resources LLC to assist with inventory sales. Kroll LLC is the claims agent. PUERTO RICO: Requests Commonwealth Funding to Settle PREPA Debt --------------------------------------------------------------- Michelle Kaske of Bloomberg News reports that Puerto Rico officials are exploring options in the commonwealth's upcoming budget to allocate funds toward repaying the debt of the island's bankrupt power utility, the Puerto Rico Electric Power Authority. The Financial Oversight and Management Board has started initial talks with Governor Jenniffer Gonzalez and lawmakers to determine how to secure the billions needed to meet the PREPA's financial obligations. According to Executive Director Robert Mujica, the board aims to identify viable revenue sources in the coming months as the commonwealth prepares its budget for the fiscal year starting July 1, 2025, Bloomberg News reports. 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/1701578-00001.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. ********* 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 be reliable, but is not guaranteed. 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. . * * * End of Transmission * * *