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250515.mbx T R O U B L E D C O M P A N Y R E P O R T E R L A T I N A M E R I C A Thursday, May 15, 2025, Vol. 26, No. 97 Headlines A R G E N T I N A ARGENTINA: IDB OKs $500MM Loan to Increase Macroeconomic Stability GENERACION MEDITERRANEA: Moody's Alters Outlook on Caa3 CFR to Neg. [] ARGENTINA: China Seeks Country's Crops as it Skirts US Tariffs B R A Z I L INVEPAR: S&P Lowers LongTerm ICR to 'CC' on Debt Acceleration ODEBRECHT ENGENHARIA: US Trustee's Objections to RJ Plan Overruled PRIO SA: Moody's Affirms 'Ba3' CFR, Outlook Remains Positive C A Y M A N I S L A N D S SIGMA FINANCE: Deadline to Submit Opposition Set May 30 J A M A I C A JAMAICA: Has Successfully Reduced its Public Debt, IMF Says [] JAMAICA: CHTA Cautiously Optimistic About Tourism Outlook M E X I C O MEXICO: Households Grow Wary as CCI Drops Again P U E R T O R I C O KYTTO ENTERPRISE: Hires Vilarino & Associates LLC as Counsel - - - - - ================= A R G E N T I N A ================= ARGENTINA: IDB OKs $500MM Loan to Increase Macroeconomic Stability ------------------------------------------------------------------ Argentina will receive a $500 million loan from the Inter-American Development Bank (IDB) to strengthen its balance of payments, advance structural reforms of its fiscal policy framework, and support its economic recovery process. The loan is part of a $10 billion package of IDB financing for the country's public and private sectors over the next three years to continue boosting the efficiency of public administration and creating better conditions for private-led development. The financing aligns with the country's recent agreements with the International Monetary Fund and the World Bank for restoring economic stability and the path to sustainable development. The IDB's budget support, provided as a Special Development Loan, will back the country as it addresses balance-of-payment challenges, reinforces fiscal sustainability, strengthens external stability, and deepens structural reforms to create a more market-oriented economy. The program supports the most vulnerable sectors. This support is provided through the strengthening of targeted social programs and the reduction of the inflation rate, achieved by implementing a robust fiscal anchor, eliminating monetary issuance, and recapitalizing the Central Bank of the Argentine Republic. The financing will help the Government of Argentina implement policies to accumulate reserves and create better conditions for development driven by the private sector. The IDB loan has a disbursement period of 12 months and a repayment period of seven years, with an interest rate based on SOFR. 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 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) -- with an approved immediate disbursement of an equivalent of US$9.65 billion. Argentina's IMF-supported program sought to improve public finances and start to reduce persistent high inflation through a multi-pronged strategy. On April 11, 2025, the IMF further approved a 48-month Extended Fund Facility (EFF) arrangement for Argentina totaling US$20 billion (or 479 percent of quota), with an immediate disbursement of US$12 billion, and a first review planned for June 2025 with an associated disbursement of about US$2 billion. The program is expected to help catalyze additional official multilateral and bilateral support, and a timely re-access to international capital markets. S&P Global Ratings, in February 2025, lowered its local currency sovereign credit ratings on Argentina to 'SD/SD' from 'CCC/C' and its national scale rating to 'SD' from 'raB+'. S&P affirmed its 'CCC/C' foreign currency sovereign credit ratings on Argentina. The outlook on the long-term foreign currency rating remained stable. Moody's Ratings, in January 2025, raised Argentina's local currency ceiling to B3 from Caa1 and the foreign currency ceiling to Caa1 from Caa3. Fitch Ratings, in November 2024, 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-'. DBRS, Inc. upgraded Argentina's Long-Term Foreign and Local Currency Issuer Ratings to B (low) from CCC in November 2024. GENERACION MEDITERRANEA: Moody's Alters Outlook on Caa3 CFR to Neg. ------------------------------------------------------------------- Moody's Ratings has changed the rating outlook of Generacion Mediterranea S.A. (Gemsa) to negative from stable and has affirmed the company's Caa3 corporate family rating and senior secured rating. RATINGS RATIONALE The outlook change to negative was prompted by the company's announcement on April 30 that it would not make the interest payment due May 5 on its outstanding $354 million senior secured notes due 2031. Notably, the nonpayment announcement was released one week after the company had communicated (on April 24) that the payment would be made on time. This reversal follows the company's April 15 announcement that its financial manager had resigned. Gemsa's Caa3 rating has incorporated a high default probability, and the negative outlook reflects Moody's views that these events indicate an increased likelihood of a lower recovery for creditors. They also indicate indicate a weak corporate governance that could diminish investor confidence during upcoming creditor negotiations. The company recently announced that a financial advisor will assist in designing a refinancing proposal that will improve the company's capital structure, which in Moody's views could include haircuts for creditors. The upcoming restructuring comes after the 2024 debt exchanges in which Gemsa exchanged various classes of its local notes (in August) and international bonds (in October) that had near-term maturities for debt maturing up to 2031. Even after those debt exchanges, the company's liquidity remained extremely weak, indicating an overall aggressive and unsustainable financing strategy. Moody's acknowledge that the company's recent investments have improved the efficiency of its asset base, which, in combination with its long-term contracts (capacity-based revenues at a fixed, dollar-denominated price) should provide stable cash flow generation. This credit strength is offset by high leverage, elevated interest burden, weak metrics compared to peers and weak liquidity, in addition to Gemsa's exposure to Cammesa's counterparty risk. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS Given the negative outlook, an upgrade of the ratings is unlikely. However if the company is able to improve its capital structure and, more importantly, its liquidity position by a significant extension of its debt maturity profile, the outlook could be stabilized. Moody's could downgrade the rating if creditor negotiations are prolonged, if the company's liquidity is insufficient to sustain operations prior to a restructuring or if Moody's views of the likely recovery for investors falls below 80%. Headquartered in Buenos Aires, Argentina, Generación Mediterránea S.A. is an operating-holding company that owns and operates 1,833 megawatts (MW), with an additional 25 MW under construction. The principal methodology used in these ratings was Unregulated Utilities and Unregulated Power Companies published in December 2023. [] ARGENTINA: China Seeks Country's Crops as it Skirts US Tariffs ----------------------------------------------------------------- Jonathan Gilbert & Manuela Tobias at Bloomberg News reports that China signed a letter of intent with exporters in Argentina to buy about US$900 million of soybeans, corn and vegetable oil, the latest indication that the Asian nation will avoid sourcing from the US during President Donald Trump's trade war. Chinese officials were in Buenos Aires to sign the non-binding agreement, according to two people familiar with the matter who couldn't be named discussing private talks, according to Bloomberg News. Argentina newspaper Clarín first reported the news. A delegation from China Council for the promotion of International Trade visited Argentina on May 7, and met with officials in charge of international trade and agriculture markets from the South American country, according to a statement published on the website of the government trade body, Bloomberg News relays. Chinese delegates also had discussions with business representatives in Argentina, on topics including promoting bilateral economic development and safeguarding free trade, Bloomberg News discloses. The two sides signed a memorandum of understanding, the statement said, without providing further details, Bloomberg News says. China is already Argentina's biggest buyer of unprocessed soybeans, the report notes. It buys some Argentine soy oil and it also opened its doors last year to the country's corn, Bloomberg News relays. Still, Argentina is a minor supplier of crops to China, and hasn't exported any soybean to the world's largest market since January this year, Bloomberg News discloses. Corn shipments remain zero, according to Chinese customs data, Bloomberg News notes. While not the first of its kind, such a large upfront commitment by China for Argentine crops is unusual, Bloomberg News relates. And its arrival amid an escalating trade war is a sign that China is prepared to keep tariffs on the US in place — in retaliation against Trump's duties — and instead source crops from South America, Bloomberg News notes. The Buenos Aires press office for Chinese trading house Cofco International Ltd said in a statement that it reached an understanding with Sinograin, the state company in charge of managing China's strategic food reserves, "to extend the supply of agriculture commodities from Argentina to China and explore further long-term cooperation," Bloomberg News notes Separately, China's Fufeng Group Ltd is interested in building a corn-processing plant, the Argentine Rural Society said in a post on X last month, 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 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) -- with an approved immediate disbursement of an equivalent of US$9.65 billion. Argentina's IMF-supported program sought to improve public finances and start to reduce persistent high inflation through a multi-pronged strategy. On April 11, 2025, the IMF further approved a 48-month Extended Fund Facility (EFF) arrangement for Argentina totaling US$20 billion (or 479 percent of quota), with an immediate disbursement of US$12 billion, and a first review planned for June 2025 with an associated disbursement of about US$2 billion. The program is expected to help catalyze additional official multilateral and bilateral support, and a timely re-access to international capital markets. S&P Global Ratings, in February 2025, lowered its local currency sovereign credit ratings on Argentina to 'SD/SD' from 'CCC/C' and its national scale rating to 'SD' from 'raB+'. S&P affirmed its 'CCC/C' foreign currency sovereign credit ratings on Argentina. The outlook on the long-term foreign currency rating remained stable. Moody's Ratings, in January 2025, raised Argentina's local currency ceiling to B3 from Caa1 and the foreign currency ceiling to Caa1 from Caa3. Fitch Ratings, in November 2024, 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-'. DBRS, Inc. upgraded Argentina's Long-Term Foreign and Local Currency Issuer Ratings to B (low) from CCC in November 2024. =========== B R A Z I L =========== INVEPAR: S&P Lowers LongTerm ICR to 'CC' on Debt Acceleration ------------------------------------------------------------- S&P Global Ratings lowered its long-term issuer credit rating on Investimentos e Participacoes em Infraestrutura S.A. (Invepar) to 'CC' from 'CCC' and its national scale rating on the company to 'brCC' from 'brB-'. S&P also lowered the national scale ratings on its third and fifth debentures to 'brC' from 'brCCC' and placed all the ratings on the company and its debt on CreditWatch negative. The CreditWatch negative reflects the risks of a default if the company cannot honor its debt obligations. On May 9, 2025, the trustee of Invepar's fifth debentures issuance notified the company about the early maturity of its debt totaling R$517.3 million after the company failed to use proceeds from the sale of VLT and shareholder loans from equity affiliate Concessionária ViaRio S.A (Via Rio) to partially amortize the debentures. Later, on May 13, 2025, the trustee of Invepar's third debentures also declared the acceleration of that issuance totaling R$159.3 million because of the same reasons. Invepar now has a five-business-day grace period that ends on May 16, 2025, to comply with its financial obligations for the total amount of the fifth debentures. In S&P's view, considering the company's weak cash position of about R$100 million and its total financial debt of more than R$1.4 billion (third and fifth debentures totaling R$648 million and bank debt of R$814 million as of Dec. 31, 2024), Invepar is highly vulnerable to nonpayment. The company now depends on receiving a capital injection from its shareholders, which is unlikely considering current business and financial conditions. S&P will reassess the ratings accordingly by the end of the cure period. The CreditWatch with negative implications incorporates the risk of a default if Invepar cannot honor its debt obligations in the next five business days. If this occurs, S&P would lower the ratings to 'D' (default). ODEBRECHT ENGENHARIA: US Trustee's Objections to RJ Plan Overruled ------------------------------------------------------------------ Chief Judge Martin Glenn of the United States Bankruptcy Court for the Southern District of New York entered an order granting all the relief requested by the foreign representative of Odebrecht Engenharia e Construcao S.A. - Em Recuperacao Judicial, et al.: (1) recognizing the Debtors' Brazilian recuperacao judicial proceeding as the Debtors' foreign main proceeding, (2) recognizing the full force and effect of the subsequent RJ plan, (3) giving full force and effect to the related Brazilian court confirmation order, and (4) providing further relief which this Court deemed just and proper. No party objected to the recognition of the Brazilian RJ proceeding as the foreign main proceeding, nor to the recognition and enforcement of the RJ Plan in the United States. The only objection was filed by the United States Trustee, which objected to language in the Debtors' proposed order which provided additional relief. The Court entered the Debtors' final proposed order without further modifications. The U.S. Trustee objected to portions of the proposed order granting recognition (but not to the recognition of the Brazilian RJ proceeding or to the enforcement of the RJ Plan as written). The U.S. Trustee argued that the limitation on liability is inappropriate because it is a "veiled exculpation clause," it goes beyond the relief granted by the Brazilian court, and there is no statutory basis for granting the limitation. Assuming arguendo that the limitation on liability is appropriate, the UST also objected on the grounds that the limitation "lacks the hallmarks of an acceptable exculpation provision in a chapter 11 proceeding". There is no temporal limitation, and the clause creates "prospective immunity by exculpation." Furthermore, the U.S. Trustee argued, the exculpation applies to too many parties, so the exact parties to whom the exculpation applies are not known, and it also covers non-estate fiduciaries. The U.S. Trustee also argued that the proposed order created impermissible non-consensual third-party releases. The Foreign Representative's argued the language of the order limiting liability is customary and similar to language this Court approved in other chapter 15 cases. It contended that the provision in Section 11.5 of the RJ Plan is proper under both Brazilian and U.S. law, as it does not create a third-party release. The Foreign Representative then argued that the UST misread the language of the proposed confirmation order, as it does not create a wide-reaching release but rather bars only those "actions that contravene relief set forth in the RJ Plan and Brazilian Confirmation Order"â€"i."e., the order sought only "enforcement of the relief granted in the Brazilian RJ Proceeding within the territorial jurisdiction of the United States and nothing more." Even if Section 11.5 of the RJ Plan did create nonconsensual third-party releases, however, the Foreign Representative maintained that enforcement of such a provision is acceptable because Purdue does not apply in Chapter 15 cases. In this case, the exculpated parties (the Directed Parties) are the indenture trustee of certain notes cancelled pursuant to the RJ Plan, the custodians of those notes, and the clearing system involved with the effectuation of the RJ Plan. These parties are clearly essential to the implementation of the RJ Plan, which is being supervised by a Brazilian court. There is no indication in the record before the Court that the Directed Parties have acted in anything but good faith. Moreover, the Foreign Representative has submitted that the cancellation of these notes is "one of the central parts of the RJ Plan" and that without the cooperation of the Directed Parties, they cannot be cancelled; no party has contested this claim. The exculpation provision in the Order is, therefore, integral to the recognition and enforcement of the RJ Plan. The Court finds that the exculpation provision in the Order complies with the requirements courts place on exculpation provisions in Chapter 11 cases. The Supreme Court held in Purdue that the Bankruptcy Code does not authorize a bankruptcy court to approve, as part of a plan of reorganization under Chapter 11, a release and injunction that extinguishes claims against non-debtor third parties without the consent of affected claimants. The Court finds that, in the present case, the issuance of a third-party release which enables the distribution of the foreign debtor's estate in the manner set forth in the RJ Plan enables the just treatment of all claimants, substantially in accordance with U.S. law. The Court finds that it had the authority under the Code to issue the Order as written. The U.S. Trustee's objections were overruled. A copy of the Court's decision is available at https://urlcurt.com/u?l=U7WR7u from PacerMonitor.com. Attorneys for the Foreign Representative of Odebrecht Engenharia e Construcao S.A. - Em Recuperacao Judicial and affiliated debtors are: Thomas S. Kessler, Esq. Luke A. Barefoot, Esq. CLEARY GOTTLIEB STEEN & HAMILTON LLP One Liberty Plaza New York, NY 10006 Phone: (212) 225-2000 Email: tkessler@cgsh.com lbarefoot@cgsh.com About Odebrecht Engenharia Odebrecht Engenharia e Construcao SA is a Brazilian company specializing in large-scale civil engineering, construction, and infrastructure development projects. It offers turnkey solutions, managing every phase of construction from planning to execution for both public and private sector clients. The Company operates in five key sectors: urban development, energy, sanitation, industrial plants, and transport and logistics. As a wholly owned subsidiary of Novonor, OEC serves markets in Brazil, Angola, Peru, and the United States. Odebrecht Engenharia e Construcao SA sought relief under Chapter 15 of the U.S. Bankruptcy Code (Bankr. S.D.N.Y. Case No. 25-10482) on March 14, 2025. The Debtor's foreign representative is Adriana Henry Meirelles and Luke A. Barefoot, Esq. and Thomas S. Kessler, Esq. are the Debtor's foreign representative counsel. PRIO SA: Moody's Affirms 'Ba3' CFR, Outlook Remains Positive ------------------------------------------------------------ Moody's Ratings has affirmed PRIO S.A.'s ("PRIO") Ba3 corporate family rating and the Ba3 rating on PRIO Luxembourg Holding S.a.r.l. ("PetroLux") $600 million backed senior secured notes due 2026. Simultaneously, Moody's maintained the positive outlook on the ratings, following the announcement of the acquisition of the remaining 60% stake in Peregrino, an oil and gas producing field in Brazil that will materially increase PRIO's production and reserves size, upon closing of the transaction. RATINGS RATIONALE The affirmation of PRIO's Ba3 rating and positive outlook follows the announcement of the signing of an agreement to acquire the remaining 60% of Peregrino, an oil and gas producing field from Equinor for approximately $3.5 billion subject to usual price adjustments, including the retrospective cash generation of the asset since January 2024. In December 2024, PRIO acquired 40% of the asset for $1.9 billion. The field produces around 88kboed of oil and is located near PRIO's Polvo and Tubarão Martelo cluster. Upon closing, Peregrino's will be fully owned and operated by PRIO. With this acquisition, PRIO will add over 57kboed of oil production and around 150Mbbl in 1P reserves, an increase of about 45% and 24%, from May 2025 levels, respectively. The deal is subject to precedent conditions, such as the approval by the Brazilian oil and gas regulator and the antitrust body. The acquisition value will be of around $3.5 billion and PRIO will likely pay 40% until the end of 2025 and the remaining 20% until mid-2026 with the usual price adjustments. Moody's expects PRIO to raise around $2 billion in new debt to fund the acquisition. Pro forma to the new debt and acquisition payment, PRIO's Moody's-adjusted leverage will peak at around 3.5x, up from 2.2x in the twelve months ended March 2025, but Moody's estimates leverage will decline to about 1.5x through 2026 when the company benefits from the additional EBITDA of Peregrino. Net leverage ratios will remain more comfortable at the peak of 2.3x upon the closing of the acquisition, gradually declining to 0.8x in 2026. PRIO expects to extract synergies from the fields, namely reduced costs based on operational and logistics synergies between Peregrino and PRIO's current fields. PRIO's Ba3 ratings reflect the company's high operating efficiency and cash generation, which supports low debt leverage and good interest coverage ratios. The rating is also supported by PRIO's high capital spending flexibility, favorable regulatory environment, and the fact that the company's capital is listed on the Brazilian stock exchange, which strengthens its corporate governance. The Ba3 rating also reflects the increase in the company's production and proved developed reserve size after the acquisition of the Albacora Leste and Peregrino fields. The ratings are primarily constrained by PRIO's still-small asset base and size of crude oil production compared with those of peers, its high operating risk because of geographic concentration and the mature nature of its oil and gas assets, and the company's dependence on acquisitions of oil and gas assets to increase production levels sustainably and maintain the reserve level. The company's current lifting costs of $12.8/bbl, full cycle costs of $25-30/bbl and breakeven costs of $20-25/bbl already compares favorably with offshore and onshore producers, and Moody's expects additional cost reduction as the company starts operations in Wahoo in 2026, assuming no delays on the licensing process. Wahoo will have very low lifting costs because it will be operated by the same facilities such as FPSOs used for Frade. The low cost structure provides PRIO with flexibility to withstand commodity price volatility and continue generating positive free cash flow to meet debt maturities even under adverse scenarios. PRIO has extremely low leverage ratios, with total adjusted debt/EBITDA of 2.2x in the twelve months ended March 2025, RCF/debt of 35.2% and interest coverage (EBITDA/interest) of 6.8x in the same period. Moody's expects PRIO's metrics to return to pre-acquisition levels through 2026, assuming Moody's price estimates of $55-75/bbl for Brent. All of PRIO's producing fields are mature and have high annual production decline rates of close to 10%. LIQUIDITY PRIO has good liquidity, with a cash position of $725 million at the end of March 2025 and $1125 million in debt coming due through the end of 2026. With the Peregrino acquisition Moody's expects the company to generate free cash flow cash of around $1.8 billion through commodity cycles, more than enough to cover capital spending of around $600 million per year, and the company to maintain its conservative approach toward future M&A and dividend distribution to preserve its liquidity. PRIO's next major refinancing need are the secured notes due 2026, and the company has a number of funding alternatives, such as access to capital markets, bilateral loans and bank funding from the pre-sale of crude and factoring of receivables. PRIO has also stated that intends to refinance the bilateral loans it raised to fund the acquisition. However, PRIO does not have committed credit facilities and the company's alternate liquidity is limited because its asset base is small and is largely encumbered. RATING OUTLOOK The positive outlook on PRIO's Ba3 rating reflects Moody's expectations that the company's production will increase to above 150,000 boe/d after the acquisition of Peregrino and increase in production in other fields, namely Wahoo in 2026. The outlook also incorporates Moody's expectations that PRIO's credit metrics and liquidity will return to pre-acquisition levels in the next 12-18 months and that the company will maintain adequate liquidity even with potential volatility in oil prices. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS PRIO's Ba3 ratings could be upgraded if the company (1) increases production to levels approaching 150,000 boe/d; (2) increases its production diversification; (3) sustains leveraged full-cycle ratio, which measures an oil company's ability to generate cash after operating, financial and reserve replacement costs, consistently above 2.5x; (4) maintains E&P debt/proved developed reserves below $7.0, and (5) maintains retained cash flow (cash from operations before working capital requirements less dividends) to total debt above 30%, all of which while maintaining an adequate liquidity. PRIO's Ba3 ratings could be downgraded if (1) retained cash flow to total debt declines below 25%, with limited prospects of a quick turnaround; (2) if E&P debt/proved developed reserves remains above $10.0, with limited prospects of a quick turnaround and (3) if there is a deterioration of the company's liquidity profile. COMPANY PROFILE Founded in 2015 and headquartered in Rio de Janeiro, Brazil, PRIO is an independent oil and gas production company focused on assets located in the Campos basin. The company has operations in 5 offshore fields, and upon the closing of the Peregrino field acquisition, will own 6 fields. In the twelve months ended March 2025, the company generated $2.8 billion in revenue with total assets of $9.6 billion. The principal methodology used in these ratings was Independent Exploration and Production published in December 2022. =========================== C A Y M A N I S L A N D S =========================== SIGMA FINANCE: Deadline to Submit Opposition Set May 30 ------------------------------------------------------- The joint official liquidators of Sigma Finance Corporation has set May 30, 2025, 3:00 p.m. as the deadline for creditors to submit their opposition against their plan to file an application to the Grand Court of Cayman to dissolve the company. The liquidators can be reached at: Daria Zamkova Tel No: +13457436830 Email: daria.zamkova@fticonsulting.com ============= J A M A I C A ============= JAMAICA: Has Successfully Reduced its Public Debt, IMF Says ----------------------------------------------------------- An International Monetary Fund (IMF) team led by Mr. Mauricio Villafuerte held meetings in Kingston (and virtually) with Jamaica government counterparts, private sector, civil society, and development partners during April 30-May 7 to conduct the 2025 Article IV consultation. At the conclusion of the mission, Mr. Villafuerte issued the following statement: "Over the last decade, Jamaica has successfully reduced its public debt, firmly anchored inflation and inflation expectations, and strengthened its external position. It has built an enviable track record of investing in institutions and prioritizing macroeconomic stability. Jamaica has met recent global shocks and natural disasters in a manner that is agile, prudent, and supportive of growth. "GDP declined in FY2024/25 due to hurricane Beryl and tropical storm Raphael which damaged agriculture and infrastructure and undermined tourism. Nonetheless, economic activity is projected to normalize as these effects wane. Unemployment has fallen to all-time low levels (3.7 percent in January 2025) and inflation has converged to the Bank of Jamaica (BOJ)'s target band of 4-6 percent. The current account has been in a modest surplus for the last two fiscal years with strong tourism revenues and high remittances. The international reserves' position has continued to improve. "The outlook points to growth settling at its potential rate once the FY2025/26 recovery is complete and with inflation stabilizing at the BOJ's target range. Nonetheless, global developments require continued close monitoring. Global downside risks emanating from tighter global financial conditions, lower growth in key source markets for tourism, and trade policy disruptions remain high. Finally, extreme weather events—such as floods, hurricanes, or earthquakes—could negatively affect economic activity. "The Jamaican authorities continue to implement sound macroeconomic policies, aided by robust policy frameworks. A primary surplus is expected for FY2025/26 leading public debt to fall towards 65 percent of GDP by the end of the fiscal year, the lowest level in 25 years and well below pre-pandemic levels. The Bank of Jamaica's approach to monetary policy has anchored inflation around the mid-point of the inflation target band and inflation expectations have declined close to the upper band of the BOJ's target range. The lowering of the policy rate in 2024 was justified in view of the temporary nature of the weather-related shocks and the expected convergence of inflation to the BOJ's target. The current fiscal-monetary policy mix places Jamaica in a good position to respond to the various downside global risks, should they be realized. "The policy frameworks are benefitting from ongoing improvements. A Fiscal Commission became operational in 2025 and is providing assessments of the macroeconomic and fiscal forecasts as well as the budget's consistency with Jamaica's fiscal rules. The wage bill reform has reduced distortions in public sector compensation, increasing both transparency and competitiveness of civil service salaries. Tax and customs administration improvements are increasing compliance. Progress continues with adopting the Basel III framework, introducing a "twin peaks" supervisory regime, expanding the BOJ's supervisory perimeter, and enhancing consolidated supervision. "Going forward the wage bill needs to be carefully managed to avoid crowding out other fiscal priorities. At the same time, there is room to improve the efficiency of public spending per recommendations of an Agile Public Expenditure and Financial Accountability assessment completed in June 2024. The fiscal responsibility law could benefit from the adoption of an explicit operational debt anchor below the current debt limit to help guide policies over the medium term, ensure that debt is kept at moderate levels, and build fiscal buffers. Implementing reforms to deepen foreign exchange market and allow greater exchange rate flexibility would strengthen the transmission mechanism of monetary policy. Financial stability should be further bolstered by passing the Special Resolution Regime law and making further improvements to the AML/CFT framework. "The authorities are implementing policies to foster potential growth and tackle supply side constraints that inhibit growth. Low productivity has been worsened by structural impediments including high crime, barriers to competition, poor educational outcomes, inadequate infrastructure, and barriers to trade. The authorities are addressing these issues by increasing investments in policing and security (which has led to a sustained decline in major crimes). Efforts are also underway to establish an unemployment insurance and strengthen employment services (including job counseling and job matching). The authorities continue to introduce measures to reduce pollution and incentivize the adoption of low carbon technologies. Finally, a comprehensive action plan is being developed to improve statistics. "The IMF team is grateful to the Jamaican authorities and other counterparts for their hospitality and very productive discussions." 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: CHTA Cautiously Optimistic About Tourism Outlook ------------------------------------------------------------ RJR News reports that the Caribbean Hotel and Tourism Association (CHTA) says it remains a cautiously optimistic in its outlook for tourism investment in the region, despite global headwinds and rising costs. The CHTA says the America's Lodging Investment Summit, Caribbean and Latin America, attended by more than 550 delegates from 35 countries, brought together investors, developers, government leaders and hospitality executives for three days of dialogue, networking, and strategic planning, according to RJR News. It says an investor sentiment poll conducted during the event revealed that 81% of those questioned rated the current climate for tourism-related investment in the region as good or robust, and that 70% anticipate construction and renovation costs will increase by more than 10% over the next year, the report adds. About Jamaica Jamaica is an island country situated in the Caribbean Sea. Jamaica is an upper-middle income country with an economy heavily dependent on tourism. Other major sectors of the Jamaican economy include agriculture, mining, manufacturing, petroleum refining, financial and insurance services. On Feb. 21, 2025, Fitch Ratings affirmed Jamaica's Long-Term Foreign-Currency Issuer Default Rating (IDR) at 'BB-', with a positive rating outlook. In October 2023, Moody's upgraded the Government of Jamaica's long-term issuer and senior unsecured ratings to B1 from B2, and senior unsecured shelf rating to (P)B1 from (P)B2. The outlook has been changed to positive from stable. In September 2024, S&P affirmed 'BB-/B' longterm foreign and local currency sovereign credit ratings on Jamaica and revised outlook to positive. =========== M E X I C O =========== MEXICO: Households Grow Wary as CCI Drops Again ----------------------------------------------- Rio Times Online reports that the National Institute of Statistics and Geography (INEGI) reported that Mexico's Consumer Confidence Index fell to 45.3 points in April 2025. This marks the lowest level since October 2023 and extends a six-month slide, according to Rio Times Online. The drop signals growing caution among Mexican households, who now view both their current and future economic prospects with greater skepticism, the report notes. The index fell from 46 points in March and stands well below its October 2024 peak of 49.2 points, the report relays. Households reported a weaker assessment of the country's present situation, with a score of 42.1, and outlook for the next year, at 48.6, the report discloses. Expectations for family finances also slipped, while willingness to make large purchases dropped to 29.4 points, the report says. Rising inflation has contributed to this pessimism. INEGI data show that annual inflation reached 3.93% in April, up from 3.8% in March, the report notes. Although inflation remains within the central bank's target range, it erodes purchasing power and dampens consumer sentiment, the report relays. The Bank of Mexico responded by lowering its benchmark interest rate to 9% in March, the lowest since September 2022, and may cut rates further if inflation stabilizes, the report says. Mexico's economic outlook faces additional uncertainty from shifting U.S. trade policies and global market volatility, the report discloses. These factors weigh on both household confidence and business investment, the report notes. Retail sales and private spending have also softened, reflecting the cautious mood, the report relays. The sustained decline in consumer confidence highlights the real pressures facing Mexican families, the report says. Economic headwinds, persistent inflation, and uncertain trade conditions have combined to dampen optimism and slow spending, the report notes. Businesses and policymakers now watch closely for signs of stabilization or further decline as 2025 unfolds, the report adds. ===================== P U E R T O R I C O ===================== KYTTO ENTERPRISE: Hires Vilarino & Associates LLC as Counsel ------------------------------------------------------------ Kytto Enterprise Dorado LLC seeks approval from the U.S. Bankruptcy Court for the District of Puerto Rico to employ Vilarino & Associates, LLC as counsel. The firm will provide these services: (a) advise the Debtor concerning its duties, powers, and responsibilities; (b) advise the Debtor in connection with a determination whether reorganization is feasible; (c) assist the Debtor concerning negotiations with creditors to propose and confirm a viable plan of reorganization; (d) prepare, on behalf of the Debtor, the necessary legal papers or documents; (e) appear before the bankruptcy court, or any court in which the Debtor asserts a claim interest or defense directly or indirectly related to this bankruptcy case; (f) perform such other legal services for the Debtor as may be required in these proceedings or in connection with the operation and involvement with its business; and (g) employ other professional services, if necessary. The firm will be paid at these rates: Javier Villarino, Attorney $325 per hour Associates $250 per hour Paralegals $150 per hour In addition, the firm will seek reimbursement for expenses incurred. Mr. Villarino disclosed in a court filing that the firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. The firm can be reached through: Javier Villarino, Esq. Villarino & Associates LLC P.O. Box 9022515 San Juan, PR 00902 Tel: (787) 565-9894 Email: jvillarino@vilarinolaw.com About Kytto Enterprise Dorado LLC Kytto Enterprise Inc., operating as Sushi Kytto Bar International Steak House and Sushi Kytto Juncos, operates Japanese sushi restaurants and steakhouse establishments across multiple locations in Puerto Rico, with its principal place of business located in Gurabo. Kytto Enterprise Inc. sought relief under Chapter 11 of the U.S. Bankruptcy Code (Bankr. D.P.R. Case No. 25-01382-11) on March 28, 2025. In its petition, the Debtor reports estimated assets up to $50,000 and estimated liabilities between $500,000 and $1 million. The Debtor is represented by Javier Vilarino at Vilarino & Associates LLC. ********* 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. 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