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250526.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 26, 2025, Vol. 26, No. 104 Headlines A R G E N T I N A ARGENTINA: Milei Stumbles in Bid to Unchain Farmers ARGENTINA: Rich Face Higher Energy Bills After Milei Subsidy Cut B A H A M A S FTX GROUP: Binance Calls Ch. 11 Clawback Suit 'Legally Deficient' B R A Z I L BANESTES SA: Fitch Affirms 'BB-' LongTerm IDRs, Outlook Stable ELETROBRAS: Moody's Upgrades CFR to Ba1, Outlook Remains Stable HIDROVIAS DO BRASIL: Moody's Puts 'B1' CFR on Review for Upgrade C A Y M A N I S L A N D S AIRNET TECH: Net Loss Widens to US$13.6 Million for FY 2024 C O L O M B I A GEOPARK LTD: S&P Affirms 'B+' ICR & Alters Outlook to Negative J A M A I C A JAMAICA: BOJ Pump $1.1BB Into Forex Market from April 2024-2025 JAMAICA: Trade Deficit Hit US$513 Million in January M E X I C O CINEMEX EAST 62ND: Parent Wins Bid to Dismiss 400 East 62nd Case P A N A M A AES PANAMA: Fitch Affirms 'BB+' LongTerm IDRs, Outlook Stable P U E R T O R I C O SILVER AIRWAYS: Gets Court Approval for $5.5MM DIP Financing - - - - - ================= A R G E N T I N A ================= ARGENTINA: Milei Stumbles in Bid to Unchain Farmers --------------------------------------------------- Jonathan Gilbert at Bloomberg News reports that President Javier Milei's vow to unleash Argentina's beleaguered farmers is faltering after a decision to raise duties on soy exports by about seven percentage points. The libertarian swept to power in late 2023 promising to bring the full force of free markets to an economy floundering under government meddling, according to Bloomberg News. It was welcome news to farmers hampered for years by the interventions, in particular a rare habit of taxing their exports, Bloomberg News relays. For traders dealing in South America, that relegated Argentina to a mere side note as Brazil embarked on a relentless crop boom, Bloomberg News discloses. Disappointment set in, however, as Economy Minister Luis Caputo announced that a tax cut for exports of soy and corn will end as planned, Bloomberg News discloses. Farmers on the Pampas growing belt had hoped, even expected, that the cut would be extended, Bloomberg News says. But in July the tariff for soy meal and oil will go back to 31 percent from the current 24.5 percent, Bloomberg News relays. And for soybeans, the rate returns to 33 percent from 26 percent, Bloomberg News notes. In a signal of goodwill, Caputo said the temporary reductions will be prolonged for the next round of wheat and barley, Bloomberg News relays. But these crops are generally worth much less to farmers, Bloomberg News discloses. Caputo and Milei have been clear that the government's top priority is consistent budget surpluses after years of deficits that they see as the root cause of Argentina's economic woes. Bloomberg News notes. For now – despite the President's campaign pledge – they can't achieve that goal without the billions of dollars of annual revenue from taxing crop exports, Bloomberg News discloses. Farming associations that had already been clamouring for the tariffs to be scrapped doubled down on the message after Caputo's announcement, Bloomberg News says. "The reality is that we need the taxes on exports – which is the worst kind of tax – to be removed definitively," Andrea Sarnari, president of the Federacion Agraria Argentina that represents small-scale farmers, told reporters, Bloomberg News relays. Ending tariff relief on soy and corn is another blow to farmers grappling with low global prices and struggling to turn a profit, Bloomberg News relays. The sector has also been hit by heavy rains, which risk some losses in fields that still need to be harvested or to production stored in silo bags, Bloomberg News notes. Separately, another part of Milei's vision to turbocharge Argentina's crop shipments – already worth some US$30 billion a year – suffered a setback in February when an auction for a contract to deepen the Parana River was cancelled after drawing just one bid, Bloomberg News discloses. Still, farmers continue to support Milei, recognising several favourable policies that he has been able to implement, like ditching export quotas and starting to unify multiple currency rates, Bloomberg News relays. More than anything, they strongly identify with his free-market spirit, Bloomberg News notes. "I don't see it as Milei not fulfilling" his promise, said Javier Mariscotti, a grains broker in Rosario, Argentina's crop-export hub. "It's more like a debt that still needs to be settled. Let's give him more leeway," he added. Javier Preciado Patiño, a farming consultant who served as Argentina's head of agriculture markets from 2019 to 2022, said Milei may bring soy duties down again later in the year, perhaps in a bid to woo rural voters ahead of provincial and midterm elections or if he sees that farmers are withholding sales to exporters, Bloomberg News notes. "Those two factors will be key," he added. 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. Fitch Ratings, on May 12, 2025, upgraded Argentina's Long-Term Foreign-Currency and Local-Currency Issuer Default Rating (IDR) to 'CCC+' from 'CCC'. The upgrade reflects the launch of a new IMF program, among other things. 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+'. 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. DBRS, Inc. upgraded Argentina's Long-Term Foreign and Local Currency Issuer Ratings to B (low) from CCC in November 2024. ARGENTINA: Rich Face Higher Energy Bills After Milei Subsidy Cut ---------------------------------------------------------------- Buenos Aires Times reports that President Javier Milei will cut energy subsidies for all gated communities in the Greater Buenos Aires region, a move that will hit a portion of Argentina's upper class that for years has been paying a fraction of their gas and electric bills. The move will affect 15,500 energy users and save the government about US$2.6 million per year, spokesman Manuel Adorni said in announcing the measure at a regular press briefing, according to Buenos Aires Times. Puerto Madero, a posh neighbourhood that's become an extension of the capital's downtown financial district, will also be excluded from government aid, the report notes. About half of those users had previously been considered low-income, and the other half middle-income, the report relays. "Energy is expensive and those who can pay for it, should pay for it," Adorni said, the report discloses. "This policy marks the end of privileges that some politicians enjoyed just because they lived in Puerto Madero or gated communities," he added, in a nod to Milei's Peronist predecessor, former president Alberto Fernandez, who is said to reside in a friend's luxurious apartment in the neighbourhood, the report relays. Milei already eliminated a big chunk of energy subsidies for the richest households, the report relays. But difficulties in categorising exclusive gated communities that neighbour low-income areas have allowed some high-earners to continue to avoid paying full price, the report says. The government used geo-location technology to make the change, according to a separate statement by the energy department, the report notes. Households will have the opportunity to appeal with proof, the report discloses. Through aggressive spending cuts, Milei's government achieved Argentina's first budget surplus since 2009 last year and continues to put the national accounts in order to wrestle inflation down to multi-year lows, the report relays. Cuts to energy subsidies are playing a key role, the report says. From last April, real spending on energy fell 78 percent, according to the Instituto Argentino de Analisis Fiscal, a consultancy firm focused on budget analysis, the report notes. Lower spending on energy rank second behind cuts to social welfare in helping the government achieve its surplus, it found, the report discloses. The measure also offers Milei some publicity and goodwill with voters in Buenos Aires Province, where most of the gated communities are located, ahead of local elections in September, the report relays. The libertarian outsider rose to power in part on a pledge to bring an end to the "decadence" long enjoyed the country's wealthy and its political class, the report adds. About Argentina Argentina is a country located mostly in the southern half of South America. Its capital is Buenos Aires. Javier Milei is the current president of Argentina after winning the November 19, 2023 general election. He succeeded Alberto Angel Fernandez in the position. Argentina has the third largest economy in Latin America. The country's economy is an upper middle-income economy for fiscal year 2019, according to the World Bank. Historically, however, its economic performance has been very uneven, with high economic growth alternating with severe recessions, income maldistribution and in the recent decades, increasing poverty. In March 2022, the International Monetary Fund (IMF) approved a 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. Fitch Ratings, on May 12, 2025, upgraded Argentina's Long-Term Foreign-Currency and Local-Currency Issuer Default Rating (IDR) to 'CCC+' from 'CCC'. The upgrade reflects the launch of a new IMF program, among other things. 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+'. 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. DBRS, Inc. upgraded Argentina's Long-Term Foreign and Local Currency Issuer Ratings to B (low) from CCC in November 2024. ============= B A H A M A S ============= FTX GROUP: Binance Calls Ch. 11 Clawback Suit 'Legally Deficient' ----------------------------------------------------------------- Ben Zigterman at law360.com reports that Binance has asked a Delaware bankruptcy judge to dismiss FTX's lawsuit seeking to recover $1.76 billion that was transferred to Binance, accusing the estate of FTX of trying to "shift the blame" for that company's November 2022 collapse. About FTX 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 =========== BANESTES SA: Fitch Affirms 'BB-' LongTerm IDRs, Outlook Stable -------------------------------------------------------------- Fitch Ratings has affirmed Banestes SA - Banco do Estado do Espirito Santo's (Banestes) Long-Term, Foreign- and Local-Currency Issuer Default Ratings (IDRs) at 'BB-'. Fitch has also affirmed Banestes' Viability Rating (VR) and the Shareholder Support Rating (SSR) at 'bb-'. Fitch has additionally affirmed the bank's National Long-Term Rating (NLTR) at 'AA+(bra)'. The Rating Outlook on the Long-Term IDRs and NLTR is Stable. Key Rating Drivers VR and SSR aligned: Banestes' IDRs are driven by its intrinsic strength, despite the VR and SSR aligned with each other. The VR underscores Banestes' ongoing solid financial profile and stable business profile, highlighted by its strong presence in regional markets, though it has a smaller footprint and market share in the national financial system. Owned by a subnational government, Banestes strategically focuses on providing financial services and credit offerings to state and municipal employees, while also supporting businesses seeking to invest in the State of Espírito Santo. Furthermore, the ratings reflect Banestes' approach to risk management, aligning with the stringent controls utilized by prominent domestic banks. The National Ratings are based on Fitch's evaluation of the credit quality of the State of Espírito Santo. Stable Business Profile: Banestes, as a commercial banking institution, serves both corporate and individual clients, holding a strong market position in the State of Espirito Santo. By December 2024, it had captured a 39% share of the credit and securities market and held 41% of the state's total deposit base. The bank maintains a stable business profile, offering a wide range of financial products and services to its customers. Although Banestes, like other publicly-owned entities, may be affected by political factors due to its ownership structure, it has established a solid framework for corporate governance. Between 2021 and 2024, Banestes' total operating income averaged USD294 million. Moderate Risk Profile: Banestes exhibits a moderate risk appetite, adhering to underwriting standards comparable to those of leading banks. Credit risk is the primary contributor to capital consumption, representing 83% of the bank's total risk-weighted assets (RWAs) as of December 2024. The loan portfolio is predominantly retail-focused, consisting mainly of payroll and real estate loans (68%), alongside corporate loans primarily to SMEs (32%). As of December 2024, the bank's top 10 largest borrowers comprised 6.0% of the overall loan portfolio, reflecting a diversified credit exposure. Market risk in relation to RWAs is minimal, remaining below 1% as of December 2024. The bank's securities portfolio is largely composed of federal government securities, which are considered stable and low-risk. Satisfactory Asset Quality: Banestes' asset quality is deemed satisfactory, with Banestes maintaining a stable and acceptable non-performing loans (NPLs) ratio of 1.7% as of December 2024, slightly down from 1.8% in December 2023. The proportion of impaired loans within the 'D-H' risk category accounted for 5.1% of the total loan portfolio in December 2024, down from 5.4% in 2023, showing an improvement compared to the 2021-2024 average of 5.5%. For 2023, the bank has set aside provisions covering 62% of the 'D-H' impaired loans. Fitch expects the asset quality indicator to continue improving, supported by the bank's strategy to expand its credit portfolio in more collateralized segments, such as payroll loans and real estate. Strong Profitability: Banestes has exhibited robust profitability metrics, with an operating profit to RWAs ratio of 3.6% in 2024 and 3.8% in 2023. Over the four years spanning from 2021 to 2024, the average stood at 3.7%. Fitch forecast stable net interest margins, to balance lower spreads on payroll being given competition and lower interest rates offset by funding repricing. Consistent Capitalization: Banestes maintains a solid and consistent level of capitalization. As of December 2024, the bank's Common Equity Tier 1 (CET1) capital ratio stood at 14.0%, showing a slight decline from 14.6% in 2023 and 15.0% in 2022. Fitch assesses that the bank's capital position continues to be satisfactory and robust enough to support its strategic objectives in the medium term. Good Liquidity and Diversified Funding: Fitch upgraded Banestes' funding and liquidity score to 'bb+' from 'bb'. Banestes boasts a steady and diversified funding base, with its principal sources of financing stemming from demand deposits, as well as savings and term deposits. The loans-to-deposits ratio for Banestes was consistent an average of 42% from 2021 to 2024, positioning it among the most favorable in comparison to its competitors. The bank's liquidity position is considered satisfactory, and Fitch anticipates that the loans-to-deposits ratio will experience an uptick over the medium term in line with Banestes' strategy to expand its loan book. Rating Sensitivities Factors that Could, Individually or Collectively, Lead to Negative Rating Action/Downgrade IDRs and VR The ratings may be downgraded if the bank presents a material deterioration in its asset quality, which compromises its profitability indicators, with an operating result/RWAs ratio below 2%. In addition, a deterioration in its capital position, with a Tier 1 capital ratio of less than 11% and significant outflows in its funding base, compromising its liquidity, could lead to negative actions. In addition, negative actions on the sovereign's IDRs may result in similar actions for the bank's IDRs. National Ratings Banestes' National Ratings may be raised by a change in Fitch's perception of the bank's local relativity towards other entities. SSR Banestes' SSR would be revised if there is any change in its strategic importance or changes in the capacity or propensity of the State of Espirito Santo to provide support to the bank. Factors that Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade IDRs and VR The combination of a stronger business and risk profile (impaired loan ratio sustainably below 5% and operating profit/RWAs ratio at least above 3%) and maintaining a CET1 ratio consistently above 13% would be positive for the international ratings. National Ratings National Ratings are sensitive to strengthening creditworthiness relative to other Brazilian issuers. SSR Banestes's SSR can be revised if there is any change in its strategic importance or changes in the capacity or propensity of the State of Espirito Santo to provide support to the bank. SSR Strategically Important to State of Espirito Santo: Banestes' SSR of 'bb-' reflects the limited likelihood of support from its controlling shareholder, the State of Espirito Santo. Fitch believes that the state would have a high propensity but limited capacity to support the bank, if necessary. Banestes is strategically important for Espirito Santo, as it acts as its main tax collection agent, making transfers to municipalities and is responsible for cash management. In addition, public entities, to which the bank provides services and grants credit to suppliers, as well as payroll deductible credits to public employees, make up an important portion of Banestes' business. Factors that Could, Individually or Collectively, Lead to Negative Rating Action/Downgrade Banestes' SSR can be revised if there is any change in its strategic importance or changes in the capacity or propensity of the State of Espirito Santo to provide support to the bank. Factors that Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade Banestes' SR can be revised if there is any change in its strategic importance or changes in the capacity or propensity of the State of Espirito Santo to provide support to the bank. VR ADJUSTMENTS The VR has been assigned in line with the implied VR. The business profile score of 'bb-' has been assigned above the implied 'b' category score due to the following adjustment reason: group benefits and risks (positive). The funding and liquidity score of 'bb' has been assigned below the 'bbb' category implied score due to the following adjustment reason: historical and future metrics (negative). Public Ratings with Credit Linkage to other ratings Banestes' SSR and national ratings are driven by a private assessment of State of Espirito Santo. ESG Considerations The highest level of ESG credit relevance is a score of '3', unless otherwise disclosed in this section. A score of '3' means ESG issues are credit-neutral or have only a minimal credit impact on the entity, either due to their nature or the way in which they are being managed by the entity. Fitch's ESG Relevance Scores are not inputs in the rating process; they are an observation on the relevance and materiality of ESG factors in the rating decision. Entity/Debt Rating Prior ----------- ------ ----- Banestes S.A. – Banco do Estado do Espirito Santo LT IDR BB- Affirmed BB- ST IDR B Affirmed B LC LT IDR BB- Affirmed BB- LC ST IDR B Affirmed B Natl LT AA+(bra) Affirmed AA+(bra) Natl ST F1+(bra) Affirmed F1+(bra) Viability bb- Affirmed bb- Shareholder Support bb- Affirmed bb- ELETROBRAS: Moody's Upgrades CFR to Ba1, Outlook Remains Stable --------------------------------------------------------------- Moody's Ratings has upgraded Centrais Eletricas Brasileiras SA-Eletrobras' (Eletrobras) baseline credit assessment (BCA) to ba2 from ba3, and its Long Term Corporate Family Ratings and Senior Unsecured Foreign Currency debt rating to Ba1 from Ba2. The outlook remains stable. RATINGS RATIONALE The ratings' upgrade reflects the evidences that Eletrobras continues to make sustainable progress on its corporate strategy to improve profitability. It also considers the recent resolution on pending negotiations with the government around disputes emerging from the company's privatization, along with Moody's views that the company will maintain its ample liquidity to support investments with the absence of meaningful refinancing needs over the next three to five years of Moody's forecasts period. As a government-related issuer (GRI), Eletrobras Ba1 Corporate Family Rating takes into consideration the application of Moody's Joint Default Analysis. This framework incorporates: (i) the upgraded BCA of ba2 from ba1, a measure of the company's standalone credit risk, (ii) Moody's unchanged assumption of high degree of default dependence between the company and the Government of Brazil (Ba1 positive) and (iii) a Moody's unchanged view of moderate likelihood of extraordinary government support in case of the company's need. The Ba1 CFR is one notch above Eletrobras' ba2 BCA, reflecting the expectation of extraordinary support from the Government of Brazil, in case of need, because of its high indirect ownership (45.7% of common shares), combined with the utility's relevance as the main electric company in Brazil. Following the privatization in June 2022, Eletrobras has established, sticked and executed on a corporate simplification strategy, aiming at cost reduction and de-risking. The company reduced the amount of compulsory loans to BRL13.1 billion in March 2025 from BRL26.2 billion in June 2022, the number of special purpose entities (SPEs) it controls to 62 in March 2025 from 81 in December 2021, while also executing meaningful cost reduction ambitions through the reductions in personnel, material, services and other expenses (PMSO), which amounted to BRL7.6 billion in 2024, marking a 24% reduction from the BRL10.0 billion of 2022. Moody's expects further reductions of 7% in PSMO until 2026. In July 2024, Furnas Centrais Elétricas S.A. was incorporated into Eletrobras for synergies and tax optimization, taking advantage of the holdings accumulated losses to reduce income tax paid. These initiatives have supported a meaningful leverage reduction with the debt to EBITDA ratio dropping to 4.4x in December 2024 from 6.6x in December 2022. Moody's forward-looking views is that credit metrics will continue to gradually improve, as illustrated by a CFO pre-WC over net debt rising above 20% from the current 14.3%, with interest coverage remaining above 2.0x over the next three years. These metrics do not include BRL25.4 billion of off-balance-sheet guarantees to debt issued by unconsolidated subsidiaries and contingencies of around BRL13.1 billion as of March 2025, which constrains further improvement in the overall company's credit profile. Moody's expects Eletrobras to maintain prudent liquidity management over the foreseeable future, in line with the company's last year track record. As per Moody's most recent liquidity assessment, considering that the company had BRL30.3 billion as cash and equivalents as of March 2025, the expected monetization of BRL639 million from debenture receivables and of BRL3.0 billion from the sale of thermal assets in 2025, Eletrobras will have sufficient buffers to operate over a 24 month period without the need of access the debt market, other than for opportunistic liability management. Eletrobras has issued over BRL30 billion in 2024, taking advantage of lower spreads to extend its debt maturity profile and reducing the overall cost of debt. As such, the spread over the interbank rate that the company pays on its debt currently stands at only 0.1%, with no significant maturities over the next five years. The rating action also reflects the recent advancements on governance through the settlement of an arbitration on the dispute with the Federal Government around Eletrobras' voting structure, and the reduction in exposure to the Angra 3 nuclear power project, given its 35.9% ownership of ordinary voting shares (68.0% of total shares) in Eletronuclear S.A.. Eletrobras' privatization law settled that no shareholder would be entitled to more than 10% of voting rights, a measure that was criticized and challenged under arbitration by the government, that holds about 45.7% of Eletrobras' common shares. In February 2025, the company and the government reached an agreement, as the government secured three seats on the company's board of directors, of a total of 10 members. In exchange, Eletrobras will no longer have to inject further capital into Angra 3 if the construction were to continue, which the government expects could require a further BRL20 billion investment to be completed. Instead, Eletrobras would subscribing to BRL2.4 billion debentures issued by Eletronuclear that will be used to extend the life of Angra 1. In addition, Eletrobras still provides guarantees of BRL3.2 billion for Angra 3. Moody's considers that the agreement reduces uncertainties and governance risks, by capping the amount of required financial support to this unconsolidated subsidiary in up to BRL5.6 billion. The arbitration agreement did not encompass an anticipation of the amortization schedule of the BRL37 billion energy development account (CDE) obligations assumed by Eletrobras in 2022, which Moody's to consider as debt per Moody's standard adjustments. The ba2 BCA still reflects Eletrobras' exposure to recontracting risk, energy prices and hydrology risks, its relatively high indebtedness, further exacerbated by large contingent liabilities and off-balance-sheet guarantees, its long-term concession obligations, and the execution risks arising as the company follows its business plan. The stable outlook reflects Moody's views that the company will maintain its strong liquidity and competitive position as the market leader in Brazil's power generation business, with a meaningful share of transmission activities will support the stability of its revenue base over the next 12-to-18 months. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS An upgrade would depend on further reduction on the company's leverage trajectory, along with maintenance of adequate liquidity. Quantitatively, positive rating pressure on the standalone credit profile would materialize if CFO pre-WC/net debt stays above 20% and interest coverage ratio remains above 3.5x, both on a sustained basis. A rating upgrade would also depend on a similar action on the Government of Brazil's rating. Conversely, the rating could be downgraded if there is a strategic shift toward a more aggressive financial policy that encompasses higher dividend payouts or leveraged acquisitions. Evidence of detrimental government or regulatory intervention would also increase negative rating pressure. Quantitatively, Moody's would consider a rating downgrade if CFO pre-WC/total over net debt remains persistently below 17% and the interest coverage ratio below 2.0x for a prolonged period. LIST OF AFFECTED RATINGS Issuer: Centrais Eletricas Brasileiras SA-Eletrobras Upgrades: Baseline Credit Assessment, Upgraded to ba2 from ba3 LT Corporate Family Rating, Upgraded to Ba1 from Ba2 Senior Unsecured, Upgraded to Ba1 from Ba2 Outlook Actions: Outlook, Remains Stable The methodologies used in these ratings were Unregulated Utilities and Unregulated Power Companies published in December 2023. HIDROVIAS DO BRASIL: Moody's Puts 'B1' CFR on Review for Upgrade ---------------------------------------------------------------- Moody's Ratings changed the direction of its ratings review of Hidrovias do Brasil S.A. (Hidrovias) to review for upgrade from review for downgrade, including the B1 corporate family rating of Hidrovias and B1 backed senior unsecured ratings of the notes issued by Hidrovias International Finance S.a.r.l. due 2031, fully and unconditionally guaranteed by Hidrovias, and its fully-owned subsidiaries (guarantor group), except for the bauxite operations subsidiaries. The outlook remains Ratings Under Review (RUR). The change in direction of Hidrovias' rating to review for upgrade from review for downgrade was prompted by the acquisition of control of Hidrovias by Ultrapar Participações S.A. (Ultrapar, Ba1 positive) in conjunction with the announcement, on May 9th, that Ultrapar will guarantee a proposed issuance of up to BRL2.2 billion in debentures by Hidrovias, which will comprise a majority of Hidrovias total debt (60%-70%, on a pro-forma basis considering total debt at the end of 1Q25). Proceeds of the issuance will reinforce liquidity and support the tender of Hidrovias notes due 2031 ($442 million). Previously, Hidrovias' ratings were on review for downgrade following the announcement of the cancellation of a proposed capital increase of up to BRL1.5 billion that was expected to close in December 2024. On the February 28, 2025, Hidrovias launched a new capital increase of up to BRL1.2 billion. The capital increase was fully subscribed and approved by Hidrovias' board of directors on May 8th. At the conclusion of the transaction, Ultrapar indicated that its subsidiary Ultrapar Logística Ltda had subscribed to a total of over 682 million shares, thus reaching a 50.15% stake, acquiring the control of Hidrovias. Refinancing risk for Hidrovias reduced substantially with the capital increase which will eliminate a BRL500 million liability relating to Advance for Future Capital Increase provided by Ultrapar Logística, amortize BRL400 million debentures raised on January 2025, and reinforce the company's cash balance. During the initial review period, Hidrovias amortized a $150 million bond due January 2025. The review for upgrade will observe the execution of the proposed liability management and the percentage of Hidrovias' total debt which will be guaranteed by Ultrapar. Following the execution of the proposed issuance, Moody's expects that 60% - 70% of Hidrovias total debt will be guaranteed by Ultrapar. The ratings could be upgraded by one or two notches with the conclusion of both the issuance of debentures, putting in place the guarantees, and the result of the tender of the outstanding notes. If Hidrovias capital structure does not become majoritarily guaranteed by Ultrapar, Moody's could confirm the ratings at the current level at the end of the review process. RATINGS RATIONALE / FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS The B1 ratings incorporate the position of Ultrapar as the controlling shareholder and its evident commitment to Hidrovias. The rating also incorporates the successful execution of the capital increase, with Ultrapar's acquisition of control, and improving Hidrovias liquidity and financial flexibility to put in place expansion investments in its North Corridor. Hidrovias' results have been negatively affected in 2024 by strong restrictions in the navigability in its South and North corridors. The sharp drop in EBITDA starting in Q4 2023 resulted in an increase its Moody's adjusted gross leverage to 13.2x as of the last twelve months that ended on March 2025 (or 6.3x excluding non-cash effects of hedges). Moody's expects Moody's adjusted gross leverage to reach 4.8x by December 2025 and 4.3x by December 2026, with an improvement in the company's EBITDA, including Moody's adjustments, to BRL826 million in 2025 from BRL202 million in 2024, and debt to remain at, or below, BRL4 billion compared to BRL5.1 billion in December 2024. Hidrovias' ratings primarily reflect the company's solid business model, with about 80% of its revenue coming from long-term take-or-pay agreements with strong off-takers. The agreements contain minimum volume guarantees and cost pass-through clauses, which translate into predictable cash flow, high capacity utilization rates and high operating margins for the company. The positive outlook on agricultural production and waterborne transportation in Brazil and Paraguay, and the strategic location of Hidrovias' operations, also support its ratings. The ratings are constrained by the company's high gross leverage, short operating track record and small size compared with that of its rated peers. The high degree of product and geographic concentration also constrains Hidrovias' ratings because it exposes the company to adverse weather conditions that could limit agricultural production and river navigability. As an inland operator, the company is exposed to climate-related risks such as low rainfall and river water levels, which hurt volumes and may increase costs. Hidrovias also has a high degree of client concentration, although the clients' good credit quality and history of contract compliance mitigate related risks. Headquartered in Sao Paulo, Hidrovias do Brasil S.A. is South America's largest independent provider of integrated logistics focused on waterway transportation. The company's operations include shipping, transshipment, storage and port services for dry bulk cargo, including grains, iron ore, bauxite, fertilizers and pulp in the Paraná-Paraguay waterway and the Amazon river systems, as well as port operations in Barcarena (Pará) and Santos (São Paulo). As of the last twelve months that ended on March 2025, the company generated BRL1.4 billion ($253 million) in revenue, with an adjusted EBITDA margin of 22.6%, mainly from shipping activities and other logistics services. The principal methodology used in these ratings was Shipping published in June 2021. =========================== C A Y M A N I S L A N D S =========================== AIRNET TECH: Net Loss Widens to US$13.6 Million for FY 2024 ----------------------------------------------------------- AirNet Technology Inc. filed with the U.S. Securities and Exchange Commission its Annual Report on Form 20-F reporting a net loss of $13.6 million for the year ended December 31, 2024, compared to a net loss of $0.2 million for the year ended December 31, 2023. The Company incurred loss from continuing operations of $7.4 million, $3.8 million and $6.8 million for the years ended December 31, 2022, 2023 and 2024, respectively. As of December 31, 2024, it had an accumulated deficit of $332.5 million and a working capital deficiency of $52.6 million. Singapore-based Assentsure PAC, the Company's auditor since 2025, issued a "going concern" qualification in its report dated May 2, 2025, attached to the Company's Annual Report on Form 10-K for the year ended December 31, 2024, citing that the Company has a history of operating losses and negative operating cash flows and has negative working capital of approximately US$52.6 million as of December 31, 2024. These conditions raise substantial doubt about the Company's ability to continue as a going concern. Historically, the Company has relied principally on both operational sources of cash and non-operational sources of equity and debt financing to fund its operations and business development. The Company's ability to continue as a going concern depends on management's ability to successfully execute its business plan which includes increasing the utilization rate of existing staffs and potential financing from public market or private placement. However, there is no assurance that the measures can be achieved as planned. AirNet Technology said, "We intend to meet the cash requirements for the next 12 months from the date of this annual report through business restructuring plan and private placement. In February 2024, we entered into share transfer agreement with a third party to sell the 33.67% equity interest we held in Unicom AirNet (Beijing) Network Co., Ltd for a consideration of RMB197 million. On April 15, 2024, we completed a private placement of US$5.7 million with certain investors. As a result, our management prepared the consolidated financial statements assuming our company will continue as a going concern. We have a significant working capital deficiency, have incurred significant losses and have generated negative cash flows from operations. We need to raise additional funds to meet our obligations and sustain our operations." A full-text copy of the Company's Form 20-F is available at: https://tinyurl.com/bdef9bn4 About AirNet Technology AirNet Technology Inc. was incorporated in the Cayman Islands on April 12, 2007. AirNet, its subsidiaries, through its variable interest entities and the VIEs' subsidiaries, operate its out-of-home advertising network, primarily air travel advertising network, in the People's Republic of China. The Company also conducts cryptocurrencies mining business operations by its Hong Kong subsidiary, Blockchain Dynamics Limited. =============== C O L O M B I A =============== GEOPARK LTD: S&P Affirms 'B+' ICR & Alters Outlook to Negative -------------------------------------------------------------- S&P Global Ratings revised the outlook to negative from stable and affirmed the 'B+' long-term issuer credit and issue ratings on Colombia-based oil and gas producer GeoPark Ltd. (GPRK) and its senior unsecured debt. The negative outlook signals weaker production and reserve prospects, increasing business vulnerability in the medium term, absent new acquisitions. The negative outlook reflects challenges ahead for GPRK to restore a higher production and reserve base. GPRK's failure to complete the acquisition of Vaca Muerta assets in Argentina reduces the company's production and reserve prospects, increasing business vulnerability in the medium term, absent new acquisitions. On May 14, 2025, GPRK announced that Phoenix Global Resources (not rated), the counterparty to the Vaca Muerta deal, withdrew from the agreement and that the transaction was terminated. Consequently, GPRK displayed the following metrics compared with those pro forma the Vaca Muerta deal: -- Average production in first-quarter 2025 of 29,000 barrels of oil equivalent per day (boe/d), versus 36,000. -- Proved reserves (1P) in 2024 of 64 million boe versus 102 million boe. -- A 2024 1P reserve-life-index of 5.2 years instead of 8.2. -- A 2024 proved reserves-replacement-ratio (RRR) of 61% instead of 345%. S&P said, "In line with this, we revised our forecast downwards. We now assume lower production volumes for 2025 of 25,700 boe/d from 33,900 boe/d in 2024. Therefore, we now forecast EBITDA will fall to about $288 million, including the benefits of about 80% of oil production hedging for the remainder of 2025." GPRK enjoys solid liquidity with ample cash balances and no material debt maturities until 2027. The company has considerable cash on hand of $330 million and only $94 million in debt due January 2027, followed by the $550 million bullet bond due 2030. GPRK also has a fully undrawn $100 million senior unsecured credit line from Banco BTG Pactual S.A. and Banco Latinoamericano de Comercio Exterior S.A. S&P also forecasts positive discretionary cash flow (DCF) generation of about $140 million in 2025 and about $90 million in 2026. This considerable cash position supports its strategy to evaluate inorganic growth opportunities that provide business sustainability in the medium to long term. The negative outlook signals weaker production and reserves prospects, increasing business vulnerability in the medium term, absent new acquisitions. S&P said, "We expect the company to keep debt to EBITDA below 3.0x and positive free operating cash flow in the next 12 months. We also think GPRK will maintain adequate liquidity, with currently no meaningful debt amortization until January 2027." S&P said, "We could downgrade GPRK in the next 12 months absent significant production and reserves recovery that positively affects our view of the business risk profile. We could also downgrade GPRK if we expect weaker business performance to erode EBITDA, resulting in debt to EBITDA above 3.0x or funds from operations (FFO) to debt below 30% on a consistent basis. "We could revise our outlook on GPRK to stable or raise our ratings if the company raises its production and reserves rate well above our expectations on a consistent basis. In this sense, we would expect an RRR above 100%. GPRK would also need to maintain debt to EBITDA consistently below 3.0x and FFO to debt above 30%." ============= J A M A I C A ============= JAMAICA: BOJ Pump $1.1BB Into Forex Market from April 2024-2025 --------------------------------------------------------------- RJR News reports that Bank of Jamaica Governor Richard Byles said the BOJ pumped $1.1 billion into the foreign exchange market between April 2024 and the end of April this year in order to keep the fall in the value of the dollar to 2% for the period May 2024 to May 14, 2025. He also pointed out that this was more than the $983 million spent during the similar period of the previous year, according to RJR News. Governor Byles adds that there was an acceleration in the rate of decline in the value of the dollar between the end of April and early May this year due to increased demand by authorised dealers in order to build up their foreign exchange positions, the report notes. 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: Trade Deficit Hit US$513 Million in January ---------------------------------------------------- RJR News reports that Jamaica's trade deficit, the difference between the merchandise imports and exports, was US$513 million during the month of January this year. Imports fell by 6.1% to US$647.6 million while exports tumbled by 15.2% to US$134.2 million, according to RJR News. The intermediate goods and raw materials bill of US$191.6 million was the largest import bill, followed by food and consumer goods and the fuel import bill, the report notes. On the export side, manufactured goods accounted for US$64.9 million, mining and quarrying US$56 million and agriculture US$7.3 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. =========== M E X I C O =========== CINEMEX EAST 62ND: Parent Wins Bid to Dismiss 400 East 62nd Case ---------------------------------------------------------------- Judge Jennifer L. Rochon of the United States District Court for the Southern District of New York granted Grupo Cinemex, S.A. DE C.V.'s motion to dismiss the second amended complaint in the case captioned as 400 EAST 62ND PROPERTIES, LLC, Plaintiff, -against- GRUPO CINEMEX, S.A. DE C.V., Defendant, Case No. 1:20-cv-04917-JLR (S.D.N.Y.) for lack of subject matter jurisdiction under Rule 12(b)(1). This case arises out of a commercial lease gone awry between landlord 400 East 62nd Properties, LLC and tenant Cinemex East 62nd Street, LLC, a nonparty seeking to operate a movie theatre at the subject premises. Plaintiff brings this action to recover monies allegedly owed by Grupo Cinemex, S.A. DE C.V., a Mexican entity, for breach of a guaranty agreement executed in connection with that commercial lease. According to Plaintiff, Grupo Cinemex is on the hook for the Tenant's rental payments, which the Tenant ceased making once COVID-19 descended on New York City. On or about Oct. 1, 2016, Plaintiff and Tenant entered into a commercial lease agreement for certain space at 400 East 62nd Street, New York, New York, for use primarily as a movie theater. On Oct. 27, 2016, Grupo Cinemex executed a written guaranty of payment and performance, whereby Grupo Cinemex unconditionally and irrevocably guaranteed to Plaintiff the full and timely payment by Tenant of all its obligations under the Lease. On or about April 1, 2020, Tenant ceased making rent payments under the lease. Later that month, on April 25, 2020, Tenant commenced a Chapter 11 bankruptcy case in the United States Bankruptcy Court for the Southern District of Florida. On June 26, 2020, Plaintiff commenced this action to recover rent payments under the Guaranty, as well as attorneys' fees and expenses incurred in enforcing the Guaranty. On Dec. 4, 2024, Plaintiff filed its Second Amended Complaint, and on Jan. 15, 2025, Grupo Cinemex filed a motion to dismiss the Second Amended Complaint. Grupo Cinemex asserts that Plaintiff's claims fail for a lack of subject matter jurisdiction because Plaintiff's citizenship cannot be ascertained, rendering it "stateless" for the purposes of diversity jurisdiction. It argues that Plaintiff's filing of a parallel state court action amounts to a concession that diversity jurisdiction is lacking in this case. It contends that Plaintiff's claims are effectively precluded by a bankruptcy court order excusing Tenant's performance under a different movie theatre lease and, alternatively, by the doctrines of impossibility and frustration of purpose. Plaintiff's corporate structure is convoluted. Plaintiff is owned by eight Nevada trusts. The trustee of each of the eight Nevada trusts is HNB Trust Company, LLC, a Nevada LLC. HNB Trustee is in turn owned by four different Nevada trusts. HNB Trustee is also the trustee of those four trusts. This case therefore presents an unusual (and cyclical) party configuration -- the trustee of Plaintiff's members is itself an LLC. That LLC is in turn owned by four different trusts, for whom it is also the trustee. Grupo Cinemex argues that this structure produces an "endless loop" whereby HNB Trustee's citizenship depends on the four trusts' state of citizenship, which in turn depends on HNB Trustee's state of citizenship. Grupo Cinemex contends that, as a result, Plaintiff cannot demonstrate that it is a citizen of any state, and thus, there is no diversity jurisdiction in this case, necessitating dismissal with prejudice. Plaintiff, however, argues that it should be considered a citizen of the place of its registration -- Nevada -- and that complete diversity therefore exists under section 1332(a)(2). The Court agrees with Grupo Cinemex. According to the Court, the fact that the trust structure was organized under Nevada law does not address the entity's citizenship for purposes of federal diversity jurisdiction. The Court concludes Plaintiff's downstream company structure is such that it cannot establish diversity of citizenship under 28 U.S.C. Sec. 1332. Under these circumstances, dismissal for a lack of subject matter jurisdiction is warranted. The Court therefore dismisses Plaintiff's claims for a lack of diversity jurisdiction without prejudice. A copy of the Court's decision is available at https://urlcurt.com/u?l=zeRVki from PacerMonitor.com. About Cinemex Holdings Cinemex USA Real Estate Holdings Inc. and Cinemex Holdings USA, Inc., a company that operates a movie theater chain, sought protection under Chapter 11 of the Bankruptcy Code (Bankr. S.D. Fla. Case Nos. 20-14695 and 20-14696) on April 25, 2020. On April 26, 2020, CB Theater Experience, LLC, filed a Chapter 11 petition (Bankr. S.D. Fla. Case No. 20-14699). The cases are jointly administered under Case No. 20-14695. At the time of the filing, the Debtors each disclosed assets of between $100 million and $500 million and liabilities of the same range. Quinn Emanuel Urquhart & Sullivan, LLP and Bast Amron, LLP serve as the Debtors' bankruptcy counsel. =========== P A N A M A =========== AES PANAMA: Fitch Affirms 'BB+' LongTerm IDRs, Outlook Stable ------------------------------------------------------------- Fitch Ratings has affirmed AES Panama Generation Holdings, S.R.L.'s (AESPGH) Long-Term Foreign and Local Currency Issuer Default Ratings (IDRs) at 'BB+'. Fitch has also affirmed the Long-Term National Scale Rating at 'AA+(pan)'. The Rating Outlook on all ratings is Stable. Additionally, Fitch has affirmed the company's USD1.38 billion senior secured notes ratings at 'BB+' and 'AA+(pan)' on the international and national scales, respectively. Fitch expects AESPGH's leverage to range around 4x and below from 2025-on due to amortizing debt, EBITDA growth from increased liquefied natural gas (LNG) storage terminal utilization, and better power purchase agreement (PPA) margins due to declining spot prices. A parent and subsidiary relationship exists between AESPGH and The AES Corporation (BBB-/Stable). Fitch rates AESPGH on a standalone basis, not assuming implicit support from the parent company. Fitch views inherent linkage to Panama's sovereign credit quality based on AESGPH's position as a regulated generation company with domestic cash flows, a leading market position and essentiality and an upstream exposure to government subsidies received by regulated distribution companies. Key Rating Drivers Strong Market Position: AESPGH is the largest private electricity generator in Panama, commanding a strong market position due to a large and diversified portfolio of assets and a flexible cost structure. The combined generation across the three generation companies (AES Panama SRL, AES Changuinola SRL, and AES Colon) accounts for 39% of the country's market share, and is incrementally increasing through expansion into solar assets. AES Panama SRL also owns a 49% stake in the 670MW Generadora Gatún (Gatun) natural gas plant. The diversified asset base is an important mitigating factor amid climate variability that periodically affects hydrology conditions. The company is also Panama's sole LNG supplier, operating an LNG pier, a 180,000m3 storage tank and regassification terminal. EBITDA from the growing business of storage, transportation and sales of LNG account for an average 20% of the company's structure. LNG customers include domestic clients, the largest being the Gatún combined cycle electricity plant and other domestic clients, as well as vessels related to the Panama Canal, and exports. Roughly one quarter of the company's tank is still available for commercialization. Future Deleveraging, Strong Cash Flow: Fitch expects gross leverage, defined as total debt/EBITDA, to approximate 4x in 2025 and beyond due to continued debt payments totaling USD180 million through 2028 from the amortizing USD1.4 billion outstanding note and related company loans, and incremental EBITDA from AES Colon LNG sales and terminal storage fee growth. Leverage reduced yoy in 2024 to 4.6x from 5.2x in 2023 with improved hydrology, increased generation sales, and ongoing debt amortization. EBITDA will approach USD340 million in 2025, supportive of a 40% EBITDA margin, and driving leverage to 4x and EBITDA/interest expense of 5.6x. Cash flows are 80% underpinned by stable contracted generation sales with a six-year average tenor. Over 80% of contracted capacity is with regulated distribution companies, and the balance with commercial and industrial clients. Spot sale exposure varies but is mitigated by the company's efficient thermal market dominance. About 6% of revenues are split evenly between LNG and terminal use sales. Cash flow from operations will approximate USD240 million/year through 2028, supportive of minimal annual capex and debt maturities, dividends equating to 100% of excess cash flow, and a minimum annual cash balance of USD65 million. Regulatory Risk: The ratings also reflect country and regulatory risk, as the government is a 51% majority shareholder in operating company AES Panama SRL. Fitch estimates government oversight of 23% of company-wide decision making and an ability to perform certain corporate processes. AES Panama SRL generates roughly 45% of total company revenues. Per Fitch's understanding, major decisions require unanimous approval from the board, where the government controls only two (of five) board seats. Diversified Asset Base: AESPGH's installed capacity of 1,189MW base is diversified, including 60% hydrology, 32% natural gas, 5% wind and 4% solar assets. This mix enables the company to mitigate periodic drought risk with efficient thermal generation and optimize low variable cost energy during strong hydrology periods. Fitch expects the activation of the Gatun plant should help reduce spot prices from over USD100/MWh historically. Fitch's base case assumes the company will be in a net power purchasing position in the intermediate term as the Colon plant reduces in generation, and coincident with the reduced spot market costs. Parent/Subsidiary Linkage: Fitch rates AESPGH on a standalone basis one notch below from 100% controlling parent The AES Corporation. Fitch assumes a linkage based on the parent's sole ownership and material brand strategy overlap. However, per its Parent and Subsidiary Linkage Criteria, Fitch views low legal and financial incentives by the parent to support AESPGH, a low strategic support incentive based on the subsidiary's low growth potential, financial contribution and competitive advantage for the larger multinational parent, and a low operational incentive based on AESPGH's relative size of its parent representing less than 4% of total installed capacity. Peer Analysis AESPGH's credit profile is commensurate with investment-grade, diversified and highly contracted electric generation companies in the region, such as Kallpa Generación S.A. (Kallpa; BBB-/Stable) of Peru, AES Andes S.A. (BBB-/Stable) of Chile and Isagen S.A. E.S.P.'s (Isagen; BBB-/Negative) of Colombia. Fitch expects AESPGH's leverage to approximate 4x in 2025 and onwards due to incremental EBITDA growth and amortizing debt, in line with each of its peers, which have leverage ranging between 3.3x and 4x. Each of the companies also maintains a diversified asset base of natural gas, hydroelectricity and renewables, proving important to mitigate climate variability back-up thermal capacity. AESPGH's scale of assets at 1.2GW is smaller than its peers; AES Andes has an installed capacity of 5.2GW, Kallpa of 2.5GW and Isagen 3.1GW. Isagen's IDR is constrained by Colombia's 'BBB-' Country Ceiling, as the company operates entirely within Colombia, and does not have substantial offshore cash or EBITDA from other countries rated above the Country Ceiling. The company's national scale rating of 'AA+(pan)'/Stable is comparable with that of Empresa de Transmision Electrica S.A. (ETESA; BB[pan]/Stable). ETESA has higher projected medium-term leverage but it operates in the electricity transmission subsector, which is highly regulated and considerably less volatile than electricity generation. AESP's sister company, AES Changuinola (AA+[pan]), expects an ongoing leverage of around 3.6x in the intermediate term. Key Assumptions - Monomic contract prices through 2026 for each company are expected to be USD100/MWh for AES Panama SRL; USD114/MWh for AES Changuinola; and USD110/MWh for AES Colon; - Long-term hydro and renewable PPA prices have fixed prices where some adjust with inflation and prices for capacity are fixed with no change over the life of the contract; - Expiring large user hydro PPAs will be renewed with similar terms; - Thermal PPA prices adjust based on the cost of fuel and capacity prices are fixed; - Capex limited to maintenance work and solar installations and amounts to USD71 million through 2028; - Spot prices to decline with the activation of the highly efficient and large natural-gas fired Generadora Gatun plant a 670MW LNG fired plant; - Generadora Gatun, operational since October 2024 at 400MW contracted level, completes full 670 MW COD in 2H25. and contracts LNG storage with Costa Norte. - Gatun commences cash contributions to AES Panama SRL in 2025; - AESPGH purchases spot market energy at projected costs to offset a planned step-down in production at the AES Colon plant; - No significant asset sales occur during the rating horizon without corresponding debt rebalancing; - Debt amortizes for the AESPGH bond; - Year-end cash estimated exceeding USD65 million; - Dividends average USD205 million through 2028. RATING SENSITIVITIES Factors that Could, Individually or Collectively, Lead to Negative Rating Action/Downgrade - Sustained gross leverage above 4.0x and net leverage above 3.5x over the medium term; - Adverse government intervention in the sector that weakens the regulatory framework; - A downgrade of the sovereign rating; - Deterioration in the company's ability to mitigate spot-market risk; - Payment of dividends coupled with high leverage levels. Factors that Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade - Sustained gross leverage below 3.0x over the medium term; - A conservative contracting strategy that promotes cash flow stability and the ability to withstand hydrological shocks to the system; - Continued evidence of sustainable spot price stabilization as a result of asset diversification in the Panamanian electricity matrix; - Upgrade of Panama's sovereign rating and/or greater disassociation from the government. Liquidity and Debt Structure Fitch expects the combined company to generate strong FCF supportive of a year-end average USD65 million cash policy through the forecast, after capex and dividend distribution assumptions around 100% of net income. The combined companies held a robust USD86 million in readily available cash and equivalents as of Dec. 31, 2024. Most of the company's debt is long term, with just over USD1.2 billion due in 2030. Issuer Profile AESPGH is indirectly owned by AES to finance operations in Panama and is the issuer of USD1.38 billion amortizing notes. AESPGH owns and operates the largest portfolio of electricity generation and LNG assets in Panama. 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 AES Panama Generation Holdings, S.R.L. has an ESG Relevance Score of '4' for Governance Structure due to its partial government-owned corporate structure, and the inherent governance risk that arises with a material or dominant state shareholder, 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 Prior ----------- ------ ----- AES Panama Generation Holdings, S.R.L. LT IDR BB+ Affirmed BB+ LC LT IDR BB+ Affirmed BB+ Natl LT AA+(pan) Affirmed AA+(pan) senior secured LT BB+ Affirmed BB+ senior secured Natl LT AA+(pan) Affirmed AA+(pan) ===================== P U E R T O R I C O ===================== SILVER AIRWAYS: Gets Court Approval for $5.5MM DIP Financing ------------------------------------------------------------ Yun Park of Law360 Bankruptcy Authority reports that a Florida bankruptcy judge May 15, 2025, gave final approval to Silver Airways LLC's $5.5 million debtor-in-possession financing and asset sale bidding procedures, following settlements with multiple administrative expense claimants. About Silver Airways Silver Airways, LLC is a regional U.S. airline operating flights between gateways in Florida, the Southeast and The Bahamas. The Silver Airways fleet is comprised of modern, state of the art aircraft with reliable, fuel-efficient turbo-prop engines. In the summer of 2018, Silver completed the acquisition of Seaborne Airlines, a San Juan, Puerto Rico-based air carrier serving destinations throughout Puerto Rico, the U.S. Virgin Islands, and other countries in the Caribbean. Seaborne provides connections throughout the Caribbean via the carrier's hub in San Juan, while also serving as the most critical link between St. Croix and St. Thomas with the carrier's seaplane operation. Silver Airways and Seaborne Virgin Islands, Inc. filed Chapter 11 petitions (Bankr. S.D. Fla. Lead Case No. 24-23623) on December 30, 2024. At the time of the filing, Silver Airways reported $100 million to $500 million in assets and liabilities while Seaborne reported $1 million to $10 million in assets and liabilities. Judge Peter D. Russin oversees the cases. Brian P. Hall, Esq., is the Debtors' legal counsel. Brigade Agency Services, LLC, as lender, is represented by Frank P. Terzo, Esq., at Nelson Mullins Riley & Scarborough, LLP. Argent Funding LLC and Volant SVI Funding LLC, as lenders, are represented by Regina Stango Kelbon, Esq. at Blank Rome, LLP. ********* 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. 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