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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
Tuesday, June 10, 2025, Vol. 26, No. 115
Headlines
A R G E N T I N A
ARGENTINA: Buenos Aires Debt Climbs as Milei Face Election Test
ARGENTINA: Unity March Boosts Pensioners' Protest
B R A Z I L
AZUL SA: Davis Polk Advises on Chapter 11 Restructuring
AZUL SA: Gets Chapter 11 Process First Day Court Approvals
C O L O M B I A
ECOPETROL SA: S&P Affirms 'BB+' ICR, Outlook Negative
D O M I N I C A N R E P U B L I C
DOMINICAN REPUBLIC: CNS OKed Wage Hike for Hospitality Sector
DOMINICAN REPUBLIC: Tariffs Have Not Yet Impacted Economy
J A M A I C A
DIGICEL INTERNATIONAL: S&P Rates $1.025BB Secured Term Loans 'B'
JAMAICA: BOJ Accepts 228 Bids for $37BB Certificate of Deposit
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A R G E N T I N A
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ARGENTINA: Buenos Aires Debt Climbs as Milei Face Election Test
---------------------------------------------------------------
Buenos Aires Times reports that investors are snapping up debt from
Argentina's largest province on bets that President Javier Milei's
political party will extend its winning streak in another local
election in less than three months.
Dollar notes issued by Buenos Aires Province are the
best-performing government credits across emerging-markets since
the president's libertarian bloc, La Libertad Avanza or LLA, won in
a city hall race in mid-May, according to pricing data compiled by
Bloomberg, according to Buenos Aires Times.
Now, bondholders wager that Milei - with a tighter grip on the
country's political right - will be in a better position to fend
off challenges from the Peronist opposition in the province's
legislative contest this September, the report notes. His allies
are currently working to seal an alliance with former president
Mauricio Macri's PRO party to jointly field candidates in the
region, the report relays.
The vote will serve as an important temperature check of voter
sentiment ahead of the midterm elections in October, when Milei
will seek more seats in both houses of Congress, the report notes.
Buenos Aires Province accounts for more than a third of the
country's voters and has historically swung left, the report
discloses. Money managers are keen for any signals on whether the
government's strict austerity project still has popular support,
the report relays. So far, they're optimistic about the
president's chances, the report notes.
"It looks like LLA and PRO are well positioned to gain space in the
provincial legislature," said Carlos de Sousa, a portfolio manager
at Vontobel Asset Management, who cited Milei's progress in taming
inflation and sparking economic growth following a brutal
recession, the report says.
Growing Divides
Adding to Milei's election prospects are tensions between the
leaders of Argentina's centre-left coalition, the report relays.
After months of jabs between ex-president Cristina Fernández de
Kirchner and Buenos Aires Province Governor Axel Kicillof, the
former announced she's running for a seat on the provincial
legislature, the report says.
Kicillof was long considered Fernández de Kirchner's protégé but
in recent months carved out a path of his own as a potential
presidential candidate, the report notes.
"This is a power play," said Joaquín Bagues, managing director at
local brokerage Grit Capital Group. Kirchner is saying "'This is
mine. If you want it all, you have to beat me here,'" he added.
Should the divisions on the left persist, it stands to push the
extra yield investors demand to hold Buenos Aires Province debt
over similarly-dated Argentine sovereign paper below 200 basis
points, according to Ramiro Blazquez, a strategist at StoneX, the
report relays.
That risk premium currently stands at roughly 240 basis points,
down from a high of around 990 basis points in March 2024,
according to pricing data compiled by Bloomberg.
Spending Cuts
The state is one of the few that have failed to generate a fiscal
surplus for at least the past 20 years, Jefferies strategist Javier
Kulesz wrote in a note dated May 7, the report recalls.
Adding to the woes, Buenos Aires Province has borne the brunt of
the president's spending cuts, some of which bypassed congressional
support, the report discloses. The state faced a sharp drop in
federal funding in 2024, the report recalls.
While some of that money is expected to return in 2025, the
administration has so far been "very selective" in allocating
additional resources to provinces, according to economists Juan
Manuel Pazos and Santiago Resico of brokerage firm one618, the
report notes.
However, a Milei-friendly result in the September vote may push the
administration to change its approach, the report notes. It "opens
up the possibility of the province's leadership being aligned with
the national government after 2027," said Graham Stock, senior
emerging-markets sovereign strategist with RBC Bluebay. That might
imply a recovery in discretionary transfers, he added.
To be sure, concerns over the province's spending have eased in
recent months, with its fiscal deficit narrowing to US$623 million
in 2024 from US$1.17 billion the year before, according to data
compiled by one618, the report discloses. Investors have also
shown confidence in the province's ability to meet bond payments of
over US$350 million due later this year, the report relays.
"Buenos Aires has not only demonstrated resilience to recent
economic shocks, but it is also well positioned for the near term,"
said Pablo López, Economy Minister for Buenos Aires Province, 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.
ARGENTINA: Unity March Boosts Pensioners' Protest
-------------------------------------------------
Buenos Aires Times reports that thousands of protesters - including
scientists, doctors, LGBT+ rights activists, people with
disabilities and others - joined Argentina's pensioners, boosting
the retirees' weekly demonstration against President Javier Milei's
austerity measures.
Rallying under a call of unity, demonstrators gathered outside a
heavily barricaded Congress building under tight security in Buenos
Aires, according to Buenos Aires Times. They carried slogans such
as "Cruelty cannot be faced alone" and "Get the chainsaw off our
rights," the report notes.
The demonstration, which was mirrored in cities across the country,
brought together families of people with disabilities, providers of
support services, feminist collectives like Ni Una Menos,
scientists from the CONICET national scientific research institute,
Hospital Garrahan workers and various other organisations, the
report relays.
Groups of retirees, supported by left-wing organisations and picket
groups, have been marching to Congress for months to protest the
meagre value of their pensions, the report discloses.
In March, one such demonstration was joined by football fans and
more than 100 people were arrested after clashes left dozens
injured, the report says.
Pensioners have suffered the most under Milei, whose sweeping
budget cuts have helped bring inflation under control and reduce
Argentina's fiscal deficit, the report discloses. A minimum state
pension is about US$300 a month, barely above the poverty line, the
report relays.
Since taking office in December 2023, Milei has slashed public
spending by the equivalent of 4.7 percent of GDP, cutting inflation
from 211 percent in 2023 to 118 percent in 2024, the report
recalls.
"It is the retirees who are bearing a third of the famous chainsaw
cutbacks, which may have gained international attention but are
severely affecting people's living conditions," feminist activist
Luci Cavallero said as she marched, the report notes.
The demonstrations, which have often been repressed by the security
forces, have also drawn support from the Catholic Church, the
report discloses.
"The worst part is how shamelessly we're being repressed. It's
heartbreaking at my age. I've been protesting since I was 17 and I
never thought I'd have to go through this again," said Cristina
Rivada, a 74-year-old pensioner who rallies every week.
'No Alternative'
As the protest unfolded outside Congress, lawmakers debated - and
eventually passed - proposals including a 7.2 percent rise in
pensions and the declaration of a state of emergency in disability
care, the report relays. The government opposes the measures,
citing their fiscal impact, the report notes.
Disability rights groups demanded urgent approval of an emergency
law on disability, citing a collapse in services due to years of
underfunding and recent cuts, the report relates. Protesters
highlighted closed care centres and stagnating payments to
providers like therapeutic aides and transport workers, the report
notes.
"For every unpaid service, a right is violated," said Juan Pérez
Brancatto, the president of a Buenos Aires Province transport
association for people with disabilities, the report discloses.
Also joining the protest were resident doctors from the Garrahan
Children's Hospital, a nationally and internationally renowned
institution, the report notes. By nightfall, local media reported
that staff had ended a days-long strike after facing threats of
disciplinary action, the report says.
Resident doctors currently earn around US$660 per month. Although
the government announced a raise, workers said it was just a
one-off bonus and vowed to keep demonstrating, the report relays.
"We demand an end to threats of dismissal and an increase in
wages," wrote Rodolfo Aguiar, head of the ATE state workers' union,
on the X social network after a failed round of talks with the
government, the report discloses.
ATE said it would stage a nationwide strike and demonstrations
across the health sector in solidarity with staff at the Garrahan
and "to reject the health crisis being caused by the government's
defunding policies," the report relates.
"We're going to take this fight to every hospital in the country,"
Aguiar warned on X.
Presidential Spokesperson Manuel Adorni acknowledged that "doctors
should earn more," but accused the Garrahan of being bloated with
administrative staff, claiming "there's always someone trying to
cling to a privilege," the report relays.
Doctors from other institutions joined the march to call for better
wages, alongside scientists and researchers protesting staffing and
funding cuts, the report discloses.
University students, families of people with disabilities, and
feminist groups also joined – the latter marking 10 years since
the birth of the Ni Una Menos anti-gender violence movement, the
report notes.
The causes were diverse, but the call to action is clear. "As
feminists, we have no choice but to embrace this struggle and call
on all sectors under attack to join in," said Cavallero, 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.
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B R A Z I L
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AZUL SA: Davis Polk Advises on Chapter 11 Restructuring
-------------------------------------------------------
Davis Polk is advising Azul S.A. and its subsidiaries in connection
with their restructuring under chapter 11 of the United States
Bankruptcy Code. Azul intends to use the chapter 11 process to
implement a comprehensive restructuring that will significantly
deleverage its balance sheet by eliminating over $2 billion of
debt, rationalize its fleet and position the company for long-term
operational and financial success.
Azul has entered into restructuring support agreements with its key
stakeholders, including its existing bondholders; its largest
lessor, AerCap, representing the majority of the company's lease
obligations; and strategic partners United Airlines and American
Airlines. Azul also secured commitments for a debtor-in-possession
(DIP) financing facility that will provide Azul with approximately
$670 million of new liquidity and equity financing of up to $950
million upon emergence from bankruptcy.
On May 28, 2025, Azul filed voluntary petitions for relief under
chapter 11 in the United States Bankruptcy Court for the Southern
District of New York. At a hearing held on May 29, 2025, Judge Sean
H. Lane approved all of Azul's first-day requests for relief,
including the authority to pay employees and certain critical
vendors and to continue operations in the ordinary course. Judge
Lane also approved Azul's DIP facility on an interim basis,
providing Azul with immediate access to $250 million of liquidity.
Azul is the largest airline in Brazil measured by departures and
cities served, with approximately 900 daily departures to 137
destinations in Brazil. With a fleet of 226 aircraft and more than
16,000 crewmembers, Azul operates approximately 300 direct routes.
Azul's flight network also includes select international
destinations, including in the United States, Portugal, France,
Spain, Argentina, Uruguay, Paraguay and Curaçao.
The Davis Polk restructuring team includes partners Marshall S.
Huebner and Timothy Graulich, counsel Joshua Y. Sturm, Jarret
Erickson and Richard J. Steinberg and associates Andrew Frisoli,
Motty (Mordechai) Rivkin, Benjamin Weissler and Jacob Goldberger.
The finance team includes partner James A. Florack and counsel Yuko
Sin. The capital markets team includes partner Manuel Garciadiaz.
Members of the Davis Polk team are based in the New York and Sao
Paulo offices.
Davis Polk refers to Davis Polk & Wardwell LLP, a New York limited
liability partnership, and its associated entities.
About Azul SA
Azul S.A. (B3: AZUL4, NYSE: AZUL), the largest airline in Brazil by
number of flight departures and cities served, offers 900 daily
flights to over 150 destinations. With an operating fleet of over
200 aircrafts and more than 15,000 Crewmembers, the Company has a
network of 300 non-stop routes. Azul was named by Cirium (leading
aviation data analysis company) as the most on-time airline in the
world in 2023. In 2020 Azul was awarded best airline in the world
by TripAdvisor, the first time a Brazilian flag carrier earned the
number one ranking in the Traveler's Choice Awards. On the Web:
http://www.voeazul.com.br/imprensa
On May 28, 2025, Azul S.A. and 19 affiliated debtors filed
voluntary petitions for relief under Chapter 11 of the United
States Bankruptcy Code (Bankr. S.D.N.Y. Lead Case No. 25-11176).
The cases are pending before the honorable Judge Sean H. Lane.
The Company is supported by Davis Polk & Wardwell LLP, White & Case
LLP, and Pinheiro Neto Advogados as legal counsel; FTI Consulting
as financial advisor; Guggenheim Securities, LLC as investment
banker; SkyWorks Capital LLC as fleet advisor; and FTI Consulting,
C Street Advisory Group, and MassMedia as strategic communications
advisors. Stretto is the claims agent.
The Participating Lenders are supported by Cleary Gottlieb Steen &
Hamilton LLP and Mattos Filho as legal counsel and PJT Partners as
investment banker.
United Airlines is supported by Hughes Hubbard & Reed LLP and
Sidley Austin LLP as legal counsel and Barclays Investment Bank as
investment banker.
American Airlines is supported by Latham & Watkins LLP as legal
counsel.
AerCap is supported by Pillsbury Winthrop Shaw Pittman LLP as legal
Counsel.
AZUL SA: Gets Chapter 11 Process First Day Court Approvals
----------------------------------------------------------
Roshan Fernandez of The Wall Street Journal reports that Azul has
obtained interim court approval tied to its Chapter 11 bankruptcy
filings in the United States.
According to the report, at a first-day hearing, the court granted
the Brazilian airline access to $250 million of its $1.6 billion in
debtor-in-possession (DIP) financing. The company stated that this
funding, combined with ongoing revenue and other court approvals,
will ensure sufficient liquidity to maintain normal operations
during its restructuring process.
CEO John Rodgerson described the Chapter 11 filing, made on
May 28, 2025, as a strategic and voluntary move to
strengthen Azul's capital structure. Headquartered in Sao Paulo,
Azul -- Brazil's largest airline by number of destinations --
continues to face financial strain from the pandemic, economic
challenges, and supply chain issues affecting the aviation sector.
"These court approvals, along with the strong support from key
stakeholders including United Airlines, American Airlines, and
AerCap, will help drive our accelerated transformation plan
forward," Rodgerson said.
A second-day hearing to consider final approval of the relief
sought is scheduled for July 9, 2025, the report states.
Azul was founded in 2008 by aviation entrepreneur David Neeleman,
who also founded JetBlue Airways and Breeze Airways in the U.S.
About Azul SA
Azul SA is Brazil's third-largest airline. The company operates a
major air transportation network providing scheduled passenger
services across Brazil and to international destinations. Founded
in 2008, Azul has grown to become one of Brazil's leading carriers
with a focus on domestic routes and connecting previously
underserved markets throughout the country.
Azul SA and affiliates sought relief under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. S.D.N.Y. Case No. 25-11176) on May 28,
2025. In its petition, the Debtor reports $4.5 billion in assets
and $9.6 billion in liabilities.
The Debtor is represented by Timothy Graulich, Esq. at Davis Polk &
Wardwell LLP. The Debtor's Financial Advisor / CRO is Samuel
Aguirre at FTI Consulting Inc. and its Claims Agent is Stretto,
Inc.
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C O L O M B I A
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ECOPETROL SA: S&P Affirms 'BB+' ICR, Outlook Negative
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S&P Global Ratings on June 4, 2025, affirmed its 'BB+' issuer and
issue-level ratings on Ecopetrol S.A., despite the change in
stand-alone credit profile (SACP), because it continues to cap the
rating by the sovereign.
S&P's negative outlook on Ecopetrol continues to reflect that on
Colombia.
S&P said, "Weaker prices and foreign-exchange volatility have hit
Ecopetrol S.A.'s financial performance over the past year, and we
expect this to continue in the next few years. We forecast adjusted
debt to EBITDA to remain above 2.0x, indicating
higher-than-expected leverage.
"We also see increased governance risks due to our view of the
company's less independent board structure and past extraordinary
dividend payments that negatively affected credit metrics. As a
result, we revised Ecopetrol's SACP to 'bb+' from 'bbb-'.
"In our view, recent changes to Ecopetrol's board of directors have
reduced independence in the company's decision-making. We now
assess Ecopetrol's management and governance as moderately negative
because we no longer believe it maintains its full qualitative
independence from its main shareholder, the Colombian government.
We think less independence could damper Ecopetrol's long-term
business plans. In April 2025, Ecopetrol announced new changes to
its board of directors. These include four new members who S&P
Global Ratings views as dependent to Ecopetrol's main shareholder
(despite its board tagging them as independent) because of their
former positions in other government organizations.
"We think decisions taken at the board level, such as those related
to dividend payments and cash flow, have contributed to the
company's weaker leverage metrics. This supports our downward
revision of the stand-alone credit profile (SACP) to 'bb+' from
'bbb-'. However, we view as positive that the company's business
strategy continues to focus on achieving growth prospects, meeting
reserve replacements, strengthening portfolio diversification of
assets and business units, and improving profitability margins."
A higher dividend payout ratio than its financial policy target
pressured Ecopetrol's financial performance in 2024. Ecopetrol
distributed about Colombian peso (COP) 15.6 trillion in dividend
payments in 2024 (versus COP5.6 trillion in 2023), which represents
104% of its net income (according to S&P's calculations). The
payout ratio established by the company is 40%-60% of net income
per year, but the board approved a higher amount to help cover the
government's Fuel Price Stabilization Fund (FEPC, in Spanish)
deficit. In addition, the company invested less of its cash flow to
compensate for the higher dividends, which resulted in a neutral
effect on its cash flow. S&P said, "In our view, Ecopetrol's
continued financial support to its main shareholder placed its
leverage metrics above our thresholds for an intermediate financial
risk profile. As a result, we now view the company's financial risk
as significant. For 2025, the board approved a 58.9% payout
ratio."
S&P said, "We no longer expect adjusted debt to EBITDA to average
below 2.0x in the next few years. Ecopetrol's reported adjusted
debt to EBITDA was 2.3x in 2024 and 2.4x for the trailing 12 months
as of March 31, 2025 (versus 1.9x and 2.0x, respectively, for the
same periods the previous year). These ratios deviate from our
previous average forecast. We consider that the current volatility
in industry prices and foreign exchange rates have also hampered
the company's profitability. However, the main factor for the
deviation from our previous forecast was increased net debt,
partially related to less debt reduction than we expected. Our
base-case scenario for the next two years expects leverage to
remain above 2.0x and discretionary cash flow to debt to be close
to 0%. We assume that Ecopetrol will fund dividends and capital
expenditures (capex) through operating cash flow and won't issue
additional debt for organic growth.
"We think Ecopetrol's business strategy will continue to deliver
positive operating results while focusing on growth prospects."
Combined production rates of crude oil and natural gas were 1.2%
higher in 2024 at 746,000 barrels of oil equivalent per day (boepd;
versus 737,000 boepd in 2023). The company maintained a rate of
745,400 boepd during the first quarter of 2025, reaching the
highest production rates since 2016. Ecopetrol remains the leading
oil and gas producer in Colombia based on its 64% share of the
country's oil production and 60% share of natural gas production.
Production rates have remained stable as the company incorporated
production at the CPO-09 block into its mix, which mitigated the
slight decline from local fields affected by social events. The
company's target production rate remains 740,000-750,000 boepd.
In Ecopetrol's refining and petrochemicals business segments, both
of its main refineries continue to account for 99% of refining and
petrochemical product production, operating at an average of 90% of
the company's installed capacity. Ecopetrol maintains a broad and
diversified portfolio of refined products including gasoline,
diesel, jet fuel, liquified petroleum gas, and heavy fuel oils,
among others.
Through its subsidiary, Interconexion Electrica S.A. (ISA),
Ecopetrol continues to focus on achieving its 2040 energy targets
that include higher use of renewable energy and increased presence
of infrastructure in Latin America, among others. On March 13,
2025, ISA announced it expects to invest $22 billion-$33 billion in
the next 15 years (67% in energy transmission, 23% in new energy
and storage ventures, and 10% in roads). ISA represents about 18%
of Ecopetrol's total EBITDA and provide some stability to top-line
growth due to its higher margins.
S&P said, "Our rating on Ecopetrol moves in tandem with that on
Colombia. We think the likelihood that the Colombian government
would provide timely and sufficient extraordinary support to the
company under a stress scenario is very high. We base our view on
Ecopetrol's very strong link with the government given its 88.49%
ownership of the company, as well as Ecopetrol's very important
role as Colombia's leading oil and gas producer. We cap our ratings
on Ecopetrol at the same level as the foreign currency sovereign
rating (BB+/Negative/B) because of the company's link with the
government and the potential for extraordinary negative government
intervention.
"The negative outlook on Ecopetrol continues to reflect the
negative outlook on Colombia. We expect Ecopetrol to continue
playing a very important role in the Colombian economy and to
maintain a very strong link with the government. Therefore, our
ratings on Ecopetrol will most likely move in tandem with those on
the sovereign."
S&P could lower the ratings on Ecopetrol in the next 12 months if:
-- S&P downgrades Colombia.
-- The company's financial performance weakens such that S&P
expects its adjusted net debt to EBITDA to consistently rise close
to 3.0x. This could stem from lower prices, weaker production
sales, and/or increased debt beyond its expectations.
-- S&P perceives weaker business for Ecopetrol if it posts
declines in production or replacement ratios below 100%.
-- Ecopetrol prioritizes cash outflows as dividends rather than
for maintenance and growth capex.
S&P could revise the outlook to stable on Ecopetrol if it was to
take a similar action on the foreign currency sovereign rating on
Colombia.
Although unlikely in the next 12-18 months, S&P could revise the
SACP upward to 'bbb-' if the company's operating and financial
performance is well above its expectations. Such scenario could
result if:
-- Ecopetrol has higher-than-expected production stemming from
investments in Colombia and/or international fields.
-- The company has debt-to-EBITDA ratios below 2.0x, while
improving profitability margins despite price volatility.
-- Ecopetrol improves cash flows after capex and dividends,
leading to discretionary cash flow to debt at or above 15%.
-- S&P sees more independent board members and the company
improves board members turnover.
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D O M I N I C A N R E P U B L I C
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DOMINICAN REPUBLIC: CNS OKed Wage Hike for Hospitality Sector
-------------------------------------------------------------
Dominican Today reports that the National Wage Committee (CNS) of
the Dominican Republic has approved a minimum wage increase for
workers in the hotel, bar, and restaurant sectors, to be rolled out
in two phases beginning June 1, 2025.
In a session described as historic, government officials, business
leaders, and labor unions reached a consensus on the wage
adjustments. The hotel sector will receive a 30% increase, and the
bar and restaurant sector will see a 25% rise, according to
Dominican Today.
The report notes that for hotel workers:
June 1, 2025: Wage rises by 15%, reaching RD$19,320.
June 1, 2026: Remaining 15% applied, bringing the total to
RD$21,840.
For bar and restaurant workers:
June 1, 2025: First 13% increase.
June 1, 2026: Additional 12% increase applied.
Labor Minister Luis Miguel De Camps celebrated the agreement as a
model of effective tripartite dialogue, praised by the
International Labor Organization (ILO), the report discloses.
Union leader Prospero Juan welcomed the wage hike but urged the
government to consider salary indexation to avoid higher income tax
burdens for workers, the report relays. On the employer side,
hotel representative Juan Bancalari argued that industry wages,
when including tips and benefits, already average around RD$37,300
per month, exceeding current minimum standards, the report adds.
About Dominican Republic
The Dominican Republic is a Caribbean nation that shares the island
of Hispaniola with Haiti to the west. Capital city Santo Domingo
has Spanish landmarks like the Gothic Catedral Primada de America
dating back 5 centuries in its Zona Colonial district. Luis Rodolfo
Abinader Corona is the current president of the nation.
TCR-LA reported in April 2019 that Juan Del Rosario of the UASD
Economic Faculty cited a current economic slowdown for the
Dominican Republic and cautioned that if the trend continues,
growth would reach only 4% by 2023. Mr. Del Rosario said that if
that happens, "we'll face difficulties in meeting international
commitments."
An ongoing concern in the Dominican Republic is the inability of
participants in the electricity sector to establish financial
viability for the system.
Standard & Poor's credit rating for Dominican Republic was raised
to 'BB' in December 2022 with stable outlook. Moody's credit
rating for Dominican Republic was last set at Ba3 in August 2023
with the outlook changed to positive. Fitch, in December 2023,
affirmed the Dominican Republic's Long-Term Foreign-Currency Issuer
Default Rating (IDR) at 'BB-' and revised the outlook to positive.
DOMINICAN REPUBLIC: Tariffs Have Not Yet Impacted Economy
---------------------------------------------------------
Dominican Today reports that the Minister of Industry, Commerce,
and Micro, Small, and Medium-Sized Enterprises (MICM), Víctor
(Ito) Bisono, spoke about the country's immigration crisis and the
impact of the tariffs imposed by the United States government on
the Dominican economy.
In response to the recent announcement by the US government of tax
increases on imports of products from the Dominican Republic to the
United States, the Minister of Industry and Commerce assured that
this has not yet had an impact on the national economy, according
to Dominican Today.
"Not yet. It's not that we're calm, because it's a process where
both sides have to sit down at the table. We've already taken some
steps, we had the first meeting in Washington; now we have to see
when and how we'll move forward with the technical aspects that you
all know about. The United States has started with China and
England, and we'll see when the opportunity will come for the
Dominican Republic," said Bisono, the report notes.
Regarding the Haitian immigration crisis in the country and the 15
measures announced by President Luis Abinader to counter this
problem, Bisonó said that the right thing to do is to have a
"regime of order," in addition to determining what "talents" we
need and how to regularize them in the country, the report relays.
"The first thing is that we must comply with the Constitution, we
must comply with the laws. We have decided that, in addition to
that, even if they have a work or tourist visa, they must comply
with our principles of religion and customs, and that is what is
happening throughout the world. The debate today in the United
States is about the deportation of illegal immigrants or citizens
who do not comply with internal regulations, even if they have a
visa."
Bisonó also clarified that, given the need for foreign labor, it
is not a question of granting citizenship, naturalization, or
nationality but instead of guaranteeing workers' rights, as is the
case in other countries, the report discloses.
"When we are talking about a foreigner being in our country, it is
not a question of granting them citizenship, naturalization, or the
state committing to granting them nationality. Nothing of the sort.
"For as long as necessary, they must be paid for their health
services, benefits, and normal processes," clarified Bisonó, the
report relays.
These statements were made at the launch of the seventh edition of
the National Private Sector Quality Award of the Dominican Republic
(Pncrd), organized by the National Association of Companies and
Industries of Herrera (Aneih), the report discloses.
The award is the highest recognition given to Dominican companies
for quality management and excellence at the national level,
valuing their efforts to improve their performance,
competitiveness, and sustainable development, the report notes.
The event was held at the Intec Social Security Auditorium with the
participation of the Minister of Industry and Commerce, who
emphasized that the award represents much more than recognition,
the report relays.
"First and foremost, we are committed to quality. Today, as you
know, we are also dealing with tariff issues, where it is not only
prices that matter, but quality is the main competitive factor,
followed by supply, trust. . . .," he said.
The president of the Pncrd, Ángelo Viro, said that the award is a
strategic tool that promotes a business culture based on
world-class standards and strengthens the private sector's
commitment to sustainability and the country's development, the
report notes.
"The award not only distinguishes excellence, but also promotes
internal transformation in organizations, increasing their response
capacity, motivating their teams, and strengthening their
competitive position," said Viro, the report discloses.
The call for applications for the award began on Tuesday, May 20,
and will end on Friday, June 27. The application report is
scheduled to be released on September 19.
About Dominican Republic
The Dominican Republic is a Caribbean nation that shares the island
of Hispaniola with Haiti to the west. Capital city Santo Domingo
has Spanish landmarks like the Gothic Catedral Primada de America
dating back 5 centuries in its Zona Colonial district. Luis Rodolfo
Abinader Corona is the current president of the nation.
TCR-LA reported in April 2019 that Juan Del Rosario of the UASD
Economic Faculty cited a current economic slowdown for the
Dominican Republic and cautioned that if the trend continues,
growth would reach only 4% by 2023. Mr. Del Rosario said that if
that happens, "we'll face difficulties in meeting international
commitments."
An ongoing concern in the Dominican Republic is the inability of
participants in the electricity sector to establish financial
viability for the system.
Standard & Poor's credit rating for Dominican Republic was raised
to 'BB' in December 2022 with stable outlook. Moody's credit
rating for Dominican Republic was last set at Ba3 in August 2023
with the outlook changed to positive. Fitch, in December 2023,
affirmed the Dominican Republic's Long-Term Foreign-Currency Issuer
Default Rating (IDR) at 'BB-' and revised the outlook to positive.
=============
J A M A I C A
=============
DIGICEL INTERNATIONAL: S&P Rates $1.025BB Secured Term Loans 'B'
----------------------------------------------------------------
S&P Global Ratings assigned its 'B' issue-level rating to Digicel
International Finance Ltd.'s (DIFL's) senior secured term loans for
$1.025 billion due 2027. DIFL is a subsidiary of Digicel Midco
Ltd. (Digicel; B/Stable/--), which consolidated the group's telecom
services operations across 25 markets in the Caribbean and Central
America, and accounts for more than 80% of the group's debt.
The term loans rank pari passu to other secured debt, according to
the company's first lien credit agreement, which was amended in
January 2024 in line with the group's operating and financial
restructuring. The term loans are secured by a collateral
consisting of the group's assets, with certain exceptions including
restricted assets, spectrum licenses, vehicles, governmental or
regulatory licenses, and receivables.
Under the credit agreement, Digicel is subject to affirmative and
negative covenants. These mainly restrict the company's ability to
issue additional debt. The covenants also restrict acquisitions,
asset divestments, liens, and investments, and define mandatory
prepayments under the facilities, as well as events of default. As
of Dec. 31, 2024, the company was in compliance with these
covenants, and we expect this to be the case going forward.
S&P said, "Our ratings on Digicel reflect our forecast that it will
reduce leverage below 4x in the next 12-24 months thanks to its
revised strategy, while maintaining a cautious approach to debt
financing and capital expenditure. At the same time, our rating
incorporates the company's ample liquidity headroom in the short
term and a more prudent financial policy."
JAMAICA: BOJ Accepts 228 Bids for $37BB Certificate of Deposit
--------------------------------------------------------------
RJR News reports that the Bank of Jamaica says financial
institutions, pension funds and members of the general public
submitted 244 bids valued at $42.2 billion for the $37 billion it
wanted to take out of circulation on June 4, 2025.
The bank, however, says it accepted only 228 of these bids for the
$37 billion at an average interest rate of 5.84% per year,
according to RJR News.
The BOJ also pointed out that the lowest bid was 5% per year for $2
million, while the highest bid was 7.3% per year for $250 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.
*********
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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