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250612.mbx T R O U B L E D C O M P A N Y R E P O R T E R L A T I N A M E R I C A Thursday, June 12, 2025, Vol. 26, No. 117 Headlines A R G E N T I N A ARGENTINA: Milei Bill Aim to Protect Dirty 'Mattress Dollars' MASTELLONE HERMANOS: Fitch Affirms B- LongTerm IDRs, Outlook Stable B R A Z I L [] Moody's Takes Actions on 4 Brazilian Regional/Local Governments C H I L E TELEFONICA MOVILES: Fitch Lowers LongTerm IDRs to BB-, Outlook Neg. C O S T A R I C A COSTA RICA: IMF OKs Two-Year US$1.5BB Flexible Credit Line Deal D O M I N I C A N R E P U B L I C DOMINICAN REPUBLIC: Gets Pressure From Tourism Sector J A M A I C A NCB FINANCIAL: Plans to Raise US$300MM on International Market P A N A M A BI-BANK SA: Fitch Assigns 'BB' Long-Term IDR, Outlook Positive P U E R T O R I C O CONCORDE METRO: Seeks to Hire Christiansen Commercial as Realtor FIGUERO TELEPHONE: Taps Ramon Trabal as Accountant T R I N I D A D A N D T O B A G O TRINIDAD & TOBAGO: Energy Transparency Remains Crucial to Fortunes TRINIDAD GENERATION: S&P Affirms BB+ ICR & Alters Outlook to Stable - - - - - ================= A R G E N T I N A ================= ARGENTINA: Milei Bill Aim to Protect Dirty 'Mattress Dollars' ------------------------------------------------------------- Buenos Aires Times reports that Argentina's government said it had sent a new bill to Congress as part of its sweeping "mattress dollars" plan to persuade citizens to bank the hundreds of billions of dollars in cash they have stashed in their homes, as well as in safety deposit boxes and offshore accounts. At a Casa Rosada press conference announcing the 'Ley de Principio de Inocencia Fiscal,' (or the Fiscal Presumption of Innocence bill) La Libertad Avanza national deputy Jose Luis Espert declared that "there will be no more persecution" of Argentines holding undeclared dollars "as if they were Al Capone," according to Buenos Aires Times. Over years of high inflation and currency controls, Argentines traded their battered pesos for dollars, which they often hoarded at home, in cash, the report notes. As part of a plan to buttress the peso by increasing the amount of dollars in circulation, Milei now wants citizens to spend or deposit their greenbacks and undeclared foreign currency, the report relays. Milei's government has formally christened his scheme "Plan de Reparación Histórica de los Ahorros de los Argentinos" ("Historical Reparation Plan for Argentines' Savings"), the report discloses. Espert, who serves as the chair of the lower house Budget Committee was joined at the Casa Rosada by the head of the ARCA tax bureau, Juan Pazo, who provided further details of the bill, the report relays. It has already entered Congress and is expected to be debated in the coming weeks, the report discloses. Threshold Raised Pazo said the bill had two main goals, the report relays. The first involves changes to tax rules, specifically raising the thresholds for triggering evasion investigations, the report discloses. "Until now, in Argentina, you could be treated as a petty tax evader for a discrepancy of just 1.5 million pesos [around US$1,200 at the official exchange]," said Pazo, a level he described as "utterly absurd," he report relays. "From now on, these thresholds will be significantly raised. Of the 7,000 active cases in the tax criminal court, only 200 will remain, as these involve substantial and genuine tax evasion," said Pazo, the report discloses. The statute of limitations for ARCA's tax assessments will also be reduced from five to three years, "provided citizens or businesses have filed their tax returns correctly and on time," Pazo added. "Anyone who fails to do so and is notified will be able to settle matters by paying their dues. Under the new framework set out by this law, tax issues will be resolved through payment. We'll provide citizens with all the mechanisms necessary to regularize their tax status without facing criminal charges." Cabinet Chief Guillermo Francos confirmed earlier that the Executive has submitted a bill to ensure legal certainty around the use of undeclared savings of up to 50 million pesos by individuals, the report discloses. "It's a law with multiple components, including changes to existing regulations, thresholds for the application of criminal economic law, and statutes of limitation. It covers a variety of measures aimed at ensuring that people who spend their own money – their savings – are not penalised under previous legislation," Francos explained, the report says. New Scheme The second goal is to "permanently shield" participants who join the new tax scheme (Regimen Simplificado del Impuesto a las Ganancias," or "Simplified Income Tax Regime.") introduced by President Javier Milei's government, the report relays. Pazo declared that "Argentines who have protected their money from politicians for years" will now be able to join the scheme, the report notes. "This regime represents a major shift in Argentina's tax system. People who opt in will be able to regularize their financial situation by paying income tax based solely on their invoiced earnings, regardless of changes in their assets," Pazo confirmed, the report relays. For those joining the new scheme, the official explained, ARCA will assess income tax liabilities "solely on reported earnings for the relevant period, regardless of any increase in net worth or personal spending," the report relays. "To give an extreme example: if, in a single fiscal year, someone purchases five properties, ARCA will only tax them based on declared income minus deductible expenses. This law ensures that no future administration can target them," Pazo explained, the report discloses. The report notes that Pazo added that the bill will ensure no future government can target Argentines for their wealth: "No administration, regardless of political affiliation, addicted to persecution, will be able to treat decent Argentines like criminals ever again." "We call on the people to join this new regime: sign up, pay, and forget about it," Pazo concluded. Sign Ups Pazo emphasised that the steps would allow thousands of Argentines to regularise their financial affairs, the report relays. The ARCA tax chief also revealed that 13 provinces and Buenos Aires City have already signed up the new rules, with the two more set to join, the report relays. Espert issued a warning to the provinces yet to sign up: "It is now in your hands whether to return freedom to your citizens, or to persist with this perverse system that has caused so much harm to our country," the report discloses. In line with the government's broader strategy of cutting red tape and facilitating investment and asset acquisition, the Financial Information Unit (UIF) money-laundering watchdog announced updated thresholds for cash transactions and activity in the automotive and property markets, the report says. The threshold for cash bank deposits without requiring depositor identification has been doubled to the equivalent of around US$10,000 at the current exchange rate, the report relays. Regulations governing the National Motor Vehicle Registry have also been updated, the report notes. From now on, proof of origin for funds will only be required for transactions exceeding 115 million pesos (approximately US$100,000), 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. MASTELLONE HERMANOS: Fitch Affirms B- LongTerm IDRs, Outlook Stable ------------------------------------------------------------------- Fitch Ratings has affirmed Mastellone Hermanos Sociedad Anonima's Long-Term Foreign Currency Issuer Default Rating (IDR) and Local Currency Long-Term IDR at 'B-' The Rating Outlook is Stable. Additionally, Fitch has affirmed Mastellone's senior secured notes at 'B-' with a Recovery Rating of 'RR4'. Mastellone's ratings reflect its strong market position as the largest dairy company in Argentina, important economies of scale and comfortable debt maturity profile, which is expected to support financial stability amid Argentina's evolving economic landscape. Argentina's 'B-' Country Ceiling constrains the company's Long-Term Foreign Currency IDR. The Stable Outlook is supported by the company's operational resilience and access to local funding, which will allow it to refinance short-term maturities. Key Rating Drivers Resilience Amid Economic Shifts: Fitch expects Mastellone's operating performance to remain stable throughout 2025, supported by Argentina's economic recovery, which is likely to benefit dairy product consumption. The company's results for 2024 were still affected by the Argentinean peso devaluation, which directly increased production costs and significantly raised prices for milk and related products. Geographic Concentration: Mastellone is concentrated in Argentina (rated CCC+), which accounts for about 80% of its sales. This exposes the company to inflation and sovereign-related risks like currency depreciation. The company generated about 12% of sales in Brazil (BB/Stable) and around 8% to other countries, including Paraguay (BB+/Stable) in 2024. This distribution remained unchanged in 1Q25. Exposure to Currency Risk: Most of Mantellone's debt is denominated in USD, while over 80% of its sales are in Argentine pesos. The company refinanced its debt in 2021 and reduced USD exposure by extending major debt repayments to 2026. Recent changes in Argentina's capital controls lifted restrictions on U.S. dollars purchases and reduced refinancing risk for Argentinean companies. Fitch anticipates these controls will remain in place for now. Mastellone's exports and overseas operations help to somewhat mitigate currency risk. Persistent Operating Environment Risk: Fitch expects Mastellone to maintain a cautious growth strategy given Argentina's still weak operating environment. Fitch will monitor the company's ability to balance capex while maintaining sufficient liquidity for short-term obligations and keep leverage stable. Mastellone's assets and cash flow are primarily domestic. Manageable Debt Maturity Profile: Mastellone's debt maturity profile is manageable, with a USD20 million local note due in June 2025, a USD44 million secured loan due in 2029, and a USD111 million secured bond due in June 2026. The company will liquidate the USD20 million local note due in June 2025 upon maturity. Improving Leverage: Fitch expects Mastellone's gross leverage in ARS to decline toward 1.5x over the next two to three years, aided by Argentina's economic recovery and disinflation. These conditions are likely to positively impact leverage metrics, as the company demonstrates operational resilience and access to local funding. Fitch forecasts EBITDA to remain around USD100 million in 2025 and 2026, consistent with 2024 figures when gross leverage in ARS was 2.0x, and EBITDA USD93.5 million. Strong Business Position: Mastellone is Argentina's largest dairy company and leading processor, with 65% market share in the fluid milk market by volume. It is the leader in fresh dairy product production, primarily serving the domestic market. Mastellone ranks among the top five dairy market leaders in South America, benefiting from economies of scale in production, marketing and distribution. The company holds an important negotiating power with suppliers as it purchases about 11% of all raw milk produced in Argentina. Volatility of Raw Milk Production: Raw milk production volatility exposes the company to potential shortages that could disrupt exports and foreign operations or raising production costs. Mastellone divides its business among domestic sales in Argentina, Brazil and Paraguay, exporting any excess raw milk supply. Arcor and Bagley Call Option: Arcor S.A.I.C. and Bagley Argentina, S.A., jointly own about 49% of Mastellone's shares. Arcor has a call option on the remaining 51% stock since 2020. The Arcor/Bagley purchase option was exercised on April 28 and rejected by the company's majority shareholders. Fitch considers Mastellone strategically important for Arcor in the long term. Peer Analysis Mastellone has a weaker position in scale, product diversification, profitability and geographic diversification compared with international peers like Fonterra Co-operative Group Limited (A/Stable), Nestle SA (A+/Stable), Sigma Alimentos, S.A. de C.V. (BBB/Stable) and Arcor (B/Stable). Mastellone business is similar to Grupo Lala, S.A.B. de C.V. (AA(mex)/Stable). Both companies have similar EBITDA margins, at around 8%, and net leverage close to 2x, indicating they both operate with comparable efficiencies and debt structures. Additionally, both companies have a high geographical concentration in their respective local markets, an important business strategy factor, and exposure to country specific economic risk. Key Assumptions - Revenues in U.S. dollars remain similar to the past three-year average. - EBITDA and EBITDA margin around USD100 million and 8%, respectively, for 2025-2026. - Debt/EBITDA around 2.0x in Argentine pesos or below 2x in US dollars for 2025-2026. Recovery Analysis Mastellone's bonds have an 'RR4' Recovery Rating to reflect average recovery expectation for creditors in the event of a default. Fitch's criteria consider bespoke recovery analysis for issuers with 'B+' IDRs and below. The bespoke recovery analysis assumes that Mastellone would be considered a going concern (GC) in bankruptcy and that the company would be reorganized rather than liquidated. GC Assumptions: - A 10% administrative claim. - The GC EBITDA is estimated at ARS51,971 million. The GC EBITDA estimate is a discount of 60% from Fitch's forecasted 2025 EBITDA. It assumes further peso devaluation and potential stress to Mastellone's cash generation in the event of a reorganization. - The enterprise value/EBITDA multiple of 5x. Fitch applies a waterfall analysis to the post-default enterprise value based on the relative claims of debt in the capital structure. With these assumptions, Fitch's waterfall results in a 'RR3' Recovery Rating for the senior unsecured notes. However, according to Fitch's Country-Specific Treatment of Recovery Ratings Criteria, the Recovery Rating for corporate issuers in Argentina is capped at 'RR4'. RATING SENSITIVITIES Factors that Could, Individually or Collectively, Lead to Negative Rating Action/Downgrade - A downgrade of Argentina's Country Ceiling would likely lead to a negative rating action on the Foreign- and Local-Currency IDRs; - Sustained debt to EBITDA above 5x. Factors that Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade - An upgrade of the Argentine sovereign could result in a positive rating action for the Foreign-Currency IDR; - Increased ownership above 50% by Arcor and Bagley could result in positive actions for both the Foreign- and Local-Currency IDRs. Liquidity and Debt Structure Mastellone has adequate liquidity, with a cash position of ARS 15.1 billion (approximately USD14 million) as of 1Q25. Its debt is comprised by USD110.8 million secured bond due in June 2026, a USD37.5 million secured loan amortized over 15 quarters starting September 2025 and a USD20 million local bond due in June 2025, which will be paid by the company upon maturity. Issuer Profile Mastellone is the largest dairy company and leading processor of dairy products in Argentina. It holds the top position in the fluid milk market, based on physical volume. It ranks first or second in most of its product lines. 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 The highest level of ESG credit relevance is a score of '3', unless otherwise disclosed in this section. A score of '3' means ESG issues are credit-neutral or have only a minimal credit impact on the entity, either due to their nature or the way in which they are being managed by the entity. Fitch's ESG Relevance Scores are not inputs in the rating process; they are an observation on the relevance and materiality of ESG factors in the rating decision. Entity/Debt Rating Recovery Prior ----------- ------ -------- ----- Mastellone Hermanos Sociedad Anonima LT IDR B- Affirmed B- LC LT IDR B- Affirmed B- senior secured LT B- Affirmed RR4 B- =========== B R A Z I L =========== [] Moody's Takes Actions on 4 Brazilian Regional/Local Governments ------------------------------------------------------------------ Moody's Ratings has taken rating actions on four Brazilian regional and local governments (RLGs): affirmation of the ratings and revision of the outlooks to stable from positive for the Municipality of Belo Horizonte, the Municipality of Niteroi and the State of Sao Paulo and the affirmation of ratings and maintenance of the positive outlook for the State of Minas Gerais. This action follows the affirmation of the Government of Brazil's foreign-currency and local currency long-term issuer ratings at Ba1 with the stabilization of the outlook from positive, on May 30, 2025. RATINGS RATIONALE The tapering of the upside risks of the sovereign credit profile translate into a tapering of the upside risks for the credit profile of the RLGs. Moody's forecasted higher interest rate scenario and resulting monetary policy tightening will impact gross domestic product (GDP) growth resulting in, for example, lower transfers to the RLGs from the central government. Transfers from the central government constitute a significant portion of sub-sovereigns' operating revenue, accounting for approximately 15% for states and around 35% for municipalities. It also leads to a view of a more stable quality of support from the central government, which highly influences the RLGs' resilience to shocks. There is a strong correlation between the sovereign's macroeconomic performance and the states' tax bases because around 60-70% of their operating revenue are from ICMS taxes which are very sensitive to macroeconomic trends, and in turn revert into transfers to their municipalities. Moody's expects that the weaker macroeconomic operating environment will revert into slower improvement on fiscal results for most Brazilian states and municipalities, hence the affirmations in the individual baseline credit assessments (BCAs) of the State of Sao Paulo and the State of Minas Gerais and the Municipalities of Belo Horizonte and Niteroi. Nevertheless, Moody's considers that the potential for further progress towards a reduction on the State of Minas Gerais' debt burden drive the maintenance of the positive outlook. -- STATE OF SAO PAULO The affirmation of the State of Sao Paulo's ba2 BCA reflects its large and diverse economy that supports a strong own-source revenue base, underpinned by the state's prudent fiscal management, and its adequate liquidity. The BCA is one notch below the BCA Scorecard Indicated Outcome of ba1 incorporating Moody's views of the state's modest and somewhat volatile fiscal surpluses, which Moody's expects to gradually compress with the state's pension burden as a share of total revenue increasing. The ba2 BCA also takes into account Sao Paulo's high indebtedness compared with that of its national peers. The state's Ba1 long term issuer rating reflects the combination of its standalone credit profile, as reflected in the ba2 BCA, and Moody's assumptions of a high likelihood of extraordinary support from the Government of Brazil (Ba1 stable) should the state face acute liquidity stress. The stable outlook on the State of Sao Paulo's rating is aligned with the stable outlook on the Government of Brazil's rating. -- STATE OF MINAS GERAIS The affirmation of the State of Minas Gerais' caa1 Baseline Credit Assessment (BCA) takes into consideration the state's very weak credit profile on a standalone basis, given its large personnel expense structure, high debt and pension burden, and very weak liquidity which has led to a history of difficulties to address debt service without support from the federal government. In January 2025, the state formally joined the federal government's fiscal recovery regime (RRF), introducing austerity measures for future administrations and restructuring the schedule of its debt obligations with the federal government. The RRF plan relies on funds from privatizations and other fiscal consolidation measures to support debt service, but execution risk remains high. Despite this, Brazil has serviced most of Minas Gerais' debt since 2018, reinforced by irrevocable and unconditional guarantees on the state debt, and the state's significant 9% contribution to the national gross domestic product. The state's B1 long term issuer rating combines a BCA of caa1, and a high level of extraordinary support from the Government of Brazil. The positive outlook on the State of Minas Gerais' rating reflects the potential for further progress towards a reduction in the state's debt burden, combined with improvements in fiscal flexibility over the next 12 to 18 months, given the uncorrelated nature of the RRF outcomes and the factors driving the stable outlook of Brazil. -- MUNICIPALITY OF BELO HORIZONTE The Municipality of Belo Horizonte's ba1 BCA reflects the municipality's robust standalone credit profile, as depicted by its relatively strong liquidity, its economic resilience, low leverage and adequate debt profile compared to global peers. The credit profile also takes into consideration the municipality's strong and consistent cash financing surpluses, that result from its prudent fiscal management. The municipality's Ba1 long term issuer rating reflects the combination of its standalone credit profile, as reflected in its BCA of ba1, and Moody's assumptions of a strong likelihood of extraordinary support from the Brazilian government in the event that the entity faces acute liquidity stress. The stable outlook on the Municipality of Belo Horizonte's rating is aligned with the stable outlook on the Government of Brazil's rating. -- MUNICIPALITY OF NITEROI The Municipality of Niteroi's ba1 BCA reflects its established track record of fiscal surpluses, conservative budget setting, prudent fiscal management and a stable political environment, all of which highlight a robust governance framework which presents low governance risk to the credit profile. The rating also take into consideration the municipality's revenue profile that is largely reliant on volatile oil royalties. Partially mitigating this risk is an equalization fund to offset potential shortfalls in revenue transfers. The municipality demonstrates a very strong liquidity position to face its modest indebtedness. The Municipality of Niteroi's Ba1 long term issuer rating combines a BCA of ba1 and a strong likelihood of extraordinary support coming from the Government of Brazil. The stable outlook on the Municipality of Niteroi's rating is aligned with the stable outlook on the Government of Brazil's rating. ENVIRONMENTAL, SOCIAL AND GOVERANCE CONSIDERATIONS The ESG considerations for the RLGs have a limited impact on the current credit rating with potential for greater negative impact over time with most having a CIS-3, except for Minas Gerais (CIS-4). These risks are partially offset by the federal government of Brazil strong support for RLGs. The RLGs are broadly exposed (E-3 and E-4) to environmental risks, primarily water management risks and have some moderate exposure in almost all other environmental categories. Nevertheless, the damaging effects of climate shocks have not affected the RLGs' infrastructure nor its economic base. Overall, the RLGs in Brazil face negative social pressures (S-3 and S-4) due to income inequality, as well as health and safety accessibility as potential sources of social unrest. Regarding governance, the RLGs deliver documents in a timely manner; accuracy and detail of information are overall complete, and the level of data transparency is satisfactory. With the exception of Minas Gerais (G-4), which faces risk stemming from policy credibility and effectiveness, the other Brazilian RLGs have G-2 governance risks. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS The strengthening of Brazil's credit profile, as reflected by an upgrade of the sovereign rating, would have positive credit implications for the Brazilian sub-sovereigns in general via reduction in the systemic risk and exert upward pressure on the ratings, except for the State of Minas Gerais, due to its higher idiosyncratic risks. For Minas Gerais, a reduction in the state's debt burden or material improvements in the conditions for debt repayments significantly reducing the probability of future defaults could lead to positive credit pressures. A sustained improvement in key financial metrics that provides for improved capacity to make debt service payments could also lead to upward credit pressures. Given the significant uplift provided to Minas Gerais' ratings already by Brazil, an upgrade of Brazil's sovereign ratings would not necessarily lead to an upgrade of Minas Gerais' issuer ratings, although it would exert positive pressure. Alternatively, a deterioration of sovereign credit strength would exert downward pressure on all the ratings of Brazilian RLGs. Factors such as fiscal slippage, rapidly rising debt levels, or the emergence of significant liquidity risks could also exert downward pressure on the BCA of Brazilian sub-sovereigns. LIST OF AFFECTED RATINGS Issuer: Sao Paulo, State of Affirmations: Baseline Credit Assessment, Affirmed at ba2 LT Issuer Rating, Affirmed at Ba1 Outlook Actions: Outlook, Changed to Stable from Positive Issuer: Minas Gerais, State of Affirmations: LT Issuer Rating, Affirmed at B1 Baseline Credit Assessment, Affirmed at caa1 Outlook Actions: Outlook, Remains Positive Issuer: Belo Horizonte, Municipality of Affirmations: LT Issuer Rating, Affirmed at Ba1 Baseline Credit Assessment, Affirmed at ba1 Outlook Actions: Outlook, Changed to Stable from Positive Issuer: Niteroi, Municipality of Affirmations: Baseline Credit Assessment, Affirmed at ba1 LT Issuer Rating, Affirmed at Ba1 Outlook Actions: Outlook, Changed to Stable from Positive The principal methodology used in these ratings was Regional and Local Governments published in May 2024. ========= C H I L E ========= TELEFONICA MOVILES: Fitch Lowers LongTerm IDRs to BB-, Outlook Neg. ------------------------------------------------------------------- Fitch Ratings has downgraded Telefónica Moviles Chile S.A.'s (TMCH) Long-Term Foreign Currency and Long-Term Local Currency Issuer Default Ratings (IDRs) and senior unsecured bonds to 'BB-' from 'BBB-'. Fitch has downgraded TMCH's and Telefónica Chile S.A.'s (TCH) national long-term ratings and national senior unsecured notes to 'BBB+(cl)' from 'AA-(cl)'. Fitch has downgraded TCH's short-term national rating to 'N2(cl)' from 'N1+(cl)' and affirmed equity rating at 'Primera Clase Nivel 4 (cl)'. The Rating Outlook is Negative. The multi-notch downgrade reflects the significant increase in net leverage, reaching 5.0x in 2024 and 6.6x in 1Q25, driven by declining EBITDA margins and revenue. The Negative Outlook reflects challenges in deleveraging amid competition and Fitch's expectations of negative FCF, despite capex and dividends cuts. Fitch projects net leverage around 4.7x in 2025 and a negative CFO-capex/debt ratio, exceeding 'BB-' thresholds. The accelerated sale of Telefonica S.A.'s Latin American operations adds uncertainty to TMCH's medium-term strategy. Key Rating Drivers Significant Increase in Leverage: TMCH's leverage continues to deteriorate, driven by a reduction in revenues and EBITDA margin, beyond Fitch's previous expectations. Fitch expects gross and net leverage to remain high at 7.3x and 4.7x in 2025, respectively, with a negative CFO-capex/debt ratio, consistent with metrics in the 'B' rating category. Slight improvements are expected thereafter, supported by TMCH's cost-reduction strategy and conservative revenue growth alongside limited capital expenditures and no dividend distributions. Failure to reduce gross and net leverage below 5.0x and 4.7x, respectively, and improve the CFO-capex/debt ratio to neutral to positive territory in the short term could result in a downgrade. Pressured Profitability: The ratings reflect the anticipated low profitability for 2025 driven by intense competition, which TMCH plans to counter through cost-cutting and commercial initiatives. TMCH experienced an 8.8% and 6.7% decline in revenue in 2024 and 1Q25, respectively, below Fitch's previous expectations. EBITDA margin fell to 9.2% in 2024 and 9.0% in LTM ending March 2025, factoring in leasing adjustments (14% in 2023). Fitch forecasts a gradual recovery in the EBITDA margin, reaching approximately 12% by 2028. Enhanced tariff rationality in the mobile industry is expected to support this. Failure to achieve this could exert pressure on the rating. Negative FCF Expected: Fitch expects the company to generate negative FCF in the medium term due to low EBITDA. Despite Fitch expecting a gradual recovery in EBITDA margin and no dividend distribution in the medium term, TMCH's CFO generation will primarily be used to finance capex requirements and interest payments, resulting in an average FCF margin of around -1.2% during the 2025-2028 period. The company aims to maintain capex intensity at approximately 10% of revenue for 2025-2028 (9.9% in 2024 and 11% in 2023). The lower investment in fiber will be partially offset by the increase in updates for its 5G network. Strong Competition: The Chilean telecom market faces intense competition, sustaining strong ARPU and FCF pressures, partially eased by adopting an asset-light model. Fitch anticipates modest mobile growth due to high penetration and limited postpaid migration, with ARPU rising with inflation. Fixed business competition is likely to intensify in 2025-2026, driven by high fiber optic penetration and OnNet network consolidation (40% TMCH-owned), amid reductions in fixed voice and pay-TV services, increasingly supplanted by streaming. Diversified Position: TMCH's diverse revenue streams and strong market positions in the fixed and mobile segments mitigate its lack of geographic diversification. As of December 2024, TMCH ranks third in mobile broadband at 19.4% and leads in fiber optic connections at 39%. It is second in total fixed broadband subscribers, holding a 30.4% share, closely trailing America Móvil S.A.B de C.V (AMX; A-/Positive). It also holds a 20% share in pay TV services. Key competitors Empresa Nacional de Telecomunicaciones S.A (ENTEL; BBB-/Stable) and WOM are primarily focused on the mobile segment. AMX's operations in Chile have similar product diversification compared to TMCH's. Parent Subsidiary Linkages: TMCH and TCH have similar standalone credit profiles. Fitch equalizes the companies' ratings given their shared operational and administrative functions, along with the complementary nature of the companies' product portfolios. TCH and TMCH have weaker standalone credit profiles compared to their ultimate parent, Telefónica SA (TEF; BBB/Stable). Fitch views legal, strategic, and operational incentives for support from TEF as low, which is evidenced by TEF's decision to monetize the Latin American operations. TMCH and TCH are rated on a standalone basis, with no notching uplift from their ultimate parent. TCH Equity Rating: TCH's listed stock accounts for less than 1% of the company's equity. The rest is held by TMCH. The equity rating for TCH is 'Level 4(cl)' given the low level of free float due to TMCH holding a majority stake. This is mitigated by its solvency and long history in the Chilean stock market. Peer Analysis Compared with AMX (A-/Positive), TMCH has a higher leverage profile. AMX's scale and geographic diversification are much higher than TMCH's, given its service footprint across Latin America. AMX also maintains a stronger competitive position with market leadership in nearly all its markets. TMCH has better product diversification than ENTEL (BBB-/Stable) and similar service diversification compared with the VTR/Claro joint venture (VTR Finance N.V.; CCC) as the second player in broadband internet and mobile, while ENTEL is focused on mobile services. TMCH also has lower margins and higher leverage compared with ENTEL. The latter benefits from its geographic diversification into the Peruvian market and the larger scale of its combined operations. TMCH's business model is like that of its sister company, Colombia Telecomunicaciones S.A. E.S.P. B.IC. (BB+/Stable), and Une EPM Telecomunicaciones S.A. (BB+/Stable), both of which are characterized by a strong local presence and diverse services. However, they exhibit better profitability and financial structures than TMCH. Compared to Empresa de Telecomunicaciones de Bogota S.A. E.S.P. (BB+/Negative), TMCH has a stronger national footprint and diversification, but ETB has better leverage and profitability. Fitch expects competition to remain intense in Chile and Colombia, though Chile's higher GDP per capita supports a more sustainable market than Colombia. Key Assumptions - Mobile subscribers remain near 6.5 million as post-paid penetration continues to increase, along with an increase in ARPU of 2%-2.5%; - Fiber subscribers increase to around 1.5 million in 2027 with the take-up rate (homes connected/homes passed) in the 32% to 35% range, while fixed voice, BAM and OMV revenue declines; - Overall revenue grows at the low-single-digit level, mainly driven by slight gains in ARPU growth; - EBITDA after leases reaches 9.6% in 2025 and gradually increases to 12% in the 2025 to 2028 period; - Capex intensity of 9.6% and 9.8% over revenue, and inflows coming from OnNet dividends; - There is no dividend distribution. RATING SENSITIVITIES Factors that Could, Individually or Collectively, Lead to Negative Rating Action/Downgrade - Gross and net leverage above 5.0x and 4.7x, respectively; - EBITDA interest paid coverage ratio below 2.0x; - Material reduction in cash position in the short term, due to persistent negative FCF; - CFO-capex/debt ratio neutral to negative; - Excessive shareholder distributions via dividends or from asset sale proceeds being distributed to the parent company. Factors that Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade - Sustained gross and net leverage of 4.4x and 4.2x, respectively; - Positive FCF generation and a CFO-capex/debt ratio of 5%, while maintaining the company's market position. Liquidity and Debt Structure TMCH had a limited liquidity position as of March 2025. It recently announced the board's approval of a holding company loan from Telefónica S.A. of CLP371 billion, with a five-year term, which will be used mainly to support the liquidity position and refinance the company's next relevant maturities. Fitch considers this debt to be a relief for the 2026 refinancing requirement. The company had cash and equivalents of CLP241 billion, compared to short-term debt of CLP301 billion, which includes CLP79 billion of factoring debt. The short-term debt includes CLP47 billion of bank debt and CLP167 billion of bond maturities, mainly composed of CLP71 billion of National Bond Serie O, due in December 2025, and CLP90 billion of National Bond Serie Q, due in March 2026. The next relevant maturities in 2026 are CLP248 billion of bullet bank loans, which include the total debt of TCH for CLP45 billion. Issuer Profile Telefonica Móviles Chile is an integrated Chilean telecommunications provider that operates mobile and fixed-line platforms under the Movistar brand. TMCH and TCH offer mobile voice, mobile data, broadband internet, pay TV, and digital services to consumers, businesses, and government clients. Summary of Financial Adjustments - Adjustments for hedge derivatives over financial debt; - Lease and factoring adjustments. 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 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 ----------- ------ ----- Telefonica Chile S.A. Natl LT BBB+(cl) Downgrade AA-(cl) Natl ST N2(cl) Downgrade N1+(cl) Nat Equity Rating Primera Clase Nivel 4 Affirmed Primera Clase Nivel 4 senior unsecured Natl LT BBB+(cl) Downgrade AA-(cl) Telefonica Moviles Chile S.A. LT IDR BB- Downgrade BBB- LC LT IDR BB- Downgrade BBB- Natl LT BBB+(cl) Downgrade AA-(cl) senior unsecured LT BB- Downgrade BBB- senior unsecured Natl LT BBB+(cl) Downgrade AA-(cl) =================== C O S T A R I C A =================== COSTA RICA: IMF OKs Two-Year US$1.5BB Flexible Credit Line Deal --------------------------------------------------------------- The Executive Board of the International Monetary Fund (IMF) approved a two-year arrangement for Costa Rica under the Flexible Credit Line (FCL) in an amount equivalent to SDR 1.1082 billion (about US$1.5 billion, equivalent to 300 percent of quota). Costa Rica has maintained a close relationship with the Fund through surveillance, capacity development, and lending. The authorities sought Fund support through the Rapid Financing Instrument (in April 2020), an Extended Fund Facility (EFF) arrangement (approved on March 1, 2021, and completed on June 14, 2024), and a Resilience and Sustainability Facility (RSF) arrangement (approved on November 14, 2022 and completed on June 14, 2024). The FCL is reserved for countries with very strong policy frameworks and track records in economic performance. Costa Rica's very strong fundamentals and institutional policy frameworks, sustained track records of implementing very strong policies, and continued commitment to maintaining such policies in the future all justify the transition to an FCL arrangement. The arrangement is intended to send a very clear signal of the quality of the country's very strong policies and institutional frameworks. Unlike the EFF arrangement, the FCL has no ex-post conditionality in which disbursements are subject to compliance with specific targets and reforms. Qualification is assessed regularly for countries wanting to maintain access. The authorities plan to treat the arrangement as precautionary. The arrangement provides Costa Rica with upfront access to IMF resources in case needed if future external shocks materialize. Following the Executive Board's discussion on Costa Rica, Mr. Kenji Okamura, Deputy Managing Director and Acting Chair, issued the following statement: "Costa Rica has very strong economic fundamentals and institutional policy frameworks. An impressive reform track record has simultaneously spurred GDP growth, reduced public debt, and lowered poverty. The economic outlook remains favorable. "The authorities are committed to maintaining their very strong policies and frameworks. They are appropriately prioritizing further reducing public debt, enshrining central bank independence, and further strengthening financial supervision and crisis management. "Nonetheless, Costa Rica is vulnerable to the shifting external environment. In the context of increased external risks, the new Flexible Credit Line (FCL) arrangement will provide valuable insurance. Downside risks include a prolonged increase in global uncertainty, slower growth in major trading partners, tighter global financial conditions, and higher oil prices. "The authorities intend to treat the FCL arrangement as precautionary and would consider requesting reduced access in the future if external risks were to decline." =================================== D O M I N I C A N R E P U B L I C =================================== DOMINICAN REPUBLIC: Gets Pressure From Tourism Sector ----------------------------------------------------- Dominican Today reports that former Central Electoral Board President and Fuerza del Pueblo political leader Roberto Rosario has sounded the alarm over mounting pressure from the Dominican Republic's tourism sector to implement a new plan regulating Haitian workers. Speaking on the television program "Hoy Mismo" (Color Visión) and radio station La Super 7, Rosario noted that unlike construction and agriculture, which have long relied on Haitian labor, hotel and resort operators are now lobbying for formal quotas, according to Dominican Today. Rosario argued that any jobs generated by the booming tourism sector could be readily filled by Dominican workers, the report notes. He cautioned that periodic "regulation plans" risk becoming a permanent fixture unless clear policies are established to train and qualify locals for those roles, the report relays. "We must preserve Dominican labor and exercise state control over migration," he said. Highlighting a dramatic demographic shift, Rosario recalled that in 2017 roughly 500,000 foreigners lived in the country under manageable conditions, the report discloses. Today, he warned, that figure has "multiplied considerably," driven by Haitians fleeing what he described as a "dysfunctional narco-state." "There is no prospect for resolution on the horizon," he lamented. To reduce reliance on migrant workers, Rosario urged the government to mechanize agricultural production and streamline internal labor processes, the report relays. Without such measures, he predicted, dependence on Haitian labor will only deepen complications across both rural and urban economies, the report says. Rosario's 2024 Warning on Migration Enforcement In October 2024, Rosario publicly challenged President Luis Abinader to enforce migration policies consistently, following comments by Agriculture Minister Limber Cruz defending the use of undocumented Haitian labor, the report relays. Rosario pointed out that the 2014 Migration Law's regularization plan should have been used to legalize these workers rather than circumvented, the report notes. He accused Cruz of violating national law and profiting from human-trafficking networks that exploit irregular migrants, the report discloses. Rosario concluded that without accountability, both for business owners who hire undocumented workers and for officials who enable them, sovereignty and the rule of law will continue to erode, the report relays. "If we truly defend our national identity, we must also defend our laws," he added. 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 ============= NCB FINANCIAL: Plans to Raise US$300MM on International Market -------------------------------------------------------------- RJR News reports that NCB Financial Group has announced plans to raise US$300 million through the issuance of new senior notes in the international securities markets. The proposed offering, subject to terms acceptable to the group, including pricing, will not be made in the United States or any jurisdiction where it would be unlawful without registration, according to RJR News. The securities will be offered only to qualified institutional buyers in the US and non-US persons in offshore transactions in compliance with the US Securities Act of 1933, the report notes. NCB Financial expects to finalize pricing for the notes with the transaction closing shortly after, the report relays. The notes are set to be rated by both Standards and Poor's rating services and Fitch Ratings, the report discloses. But investors are reminded that a securities rating is not a recommendation to buy, sell, or hold, and ratings may change at any time, the report adds. About NCB Financial The NCB Financial Group Limited is a financial services conglomerate operating in the Caribbean region and headquartered in Kingston, Jamaica. NCB Financial Group Limited is the parent company of the National Commercial Bank of Jamaica, the largest and most profitable financial institution in Jamaica. It is also the majority shareholder of Guardian Holdings Limited, one of the largest insurance providers in the Caribbean, and of Clarien Group Limited, a banking and investment management services provider based in Bermuda. The company is listed on the Jamaica Stock Exchange and Trinidad & Tobago Stock Exchange. As reported in the Troubled Company Reporter-Latin America on March 14, 2025, Fitch Ratings has affirmed National Commercial Bank Jamaica Limited's (NCBJ) Long-Term and Short-Term Foreign and Local Currency Issuer Default Ratings (IDRs) at 'BB-' and 'B', respectively. Fitch has also affirmed NCBJ's Viability Rating (VR) at 'bb-'Fitch has additionally affirmed NCB Financial Group Limited's (NCBFG) Long-Term Foreign and Local Currency IDRs and Short-Term Foreign and Local Currency IDRs at 'B+' and 'B', respectively. The Rating Outlook for both NCBJ and NCBFG's Long-Term IDRs is Positive. The Positive Outlook on the Long-Term IDRs is aligned with the Positive Outlook on Jamaica's sovereign rating and reflects Fitch's expectations of continued improvement in the Operating Environment (OE). =========== P A N A M A =========== BI-BANK SA: Fitch Assigns 'BB' Long-Term IDR, Outlook Positive -------------------------------------------------------------- Fitch Ratings has assigned Bi-Bank, S.A. a 'BB' Long-Term Issuer Default Rating (IDR), 'B' Short-Term IDR, 'bb' Shareholder Support Rating (SSR) and 'bb- 'Viability Rating (VR). The Rating Outlook for the Long-Term IDR is Positive. Key Rating Drivers Support from Sister Company: Bi-Bank' IDRs, SSR and national ratings reflect the support it would receive from its sister company, Banco Industrial S.A. (Industrial; 'BB'/Outlook Positive), if needed. Fitch's support assessment heavily weighs both the substantial reputational risk of a Bi-Bank default to the group and Bi-Bank's strategic importance to the conglomerate's country diversification strategy. Business Model Aligned to its Parent: Bi-Bank's business model aligns with parent, BI Capital Corporation by supporting the group's expansion strategy and serving its regional clients. Operating under a universal banking model, Bi-Bank focuses mainly on corporate and commercial loans, which comprised 95.1% of total loans as of YE 2024, while also offering residential mortgages (2.6%) and consumer loans (2.3%). About 58.2% of its loans are to clients in Panama, with 41.8% to clients outside the country. Given its relatively short track record, Bi-Bank has a small franchise, holding a 1.2% market share by assets in Panama's national banking system as of YE 2024. This has led to modest income generation, with a four-year average total operating income (TOI) of USD 27 million. Revenue diversification is limited, with net interest margin comprising 95.8% of total operating income. Good Asset Quality Metrics: Bi-Bank shows strong asset quality metrics due to its conservative underwriting standards. As of YE 2024, the Stage 3 loans ratio was 0.4%, comparing favorably to local peers with similar business models. The bank's double-digit growth, far exceeding system averages, has helped dilute impairment levels. While recent growth might indicate an unseasoned loan book, Fitch believes Bi-Bank's robust underwriting standards, aligned with Industrial's best practices, ensure current impairment metrics accurately reflect loan portfolio risks. Improvements in Profitability Metrics: As of YE 2024, Bi-Bank's operating profit to risk-weighted assets (RWA) was 1.9%, supported by a stable net interest margin (NIM), low impairment charges, and controlled operational expenses. The bank's profitability has shown significant improvement compared to historical levels, driven by increased income due to substantial loan growth and enhanced operational efficiency. Fitch anticipates profitability metrics will remain stable in the medium term, although potential pressures could emerge from the bank's high growth strategy. Adequate Capitalization: Bi-Bank's capitalization ratios are considered adequate, given its business model and growth prospects. As of YE 2024, the CET1 ratio was 10.2%, improved from 9.2% at YE 2023, driven by the retention of 100% of net profits and recent capital injections made by its parent to enhance capital metrics and support growth. Including the dynamic provision, which offers an additional countercyclical buffer (CCyB) for loss absorption in stress scenarios, the capital ratio increases to 11.84%. Solid Funding and Liquidity Structure: Bi-Bank maintains an adequate funding structure with an 87.0% loans-to-deposits ratio as of YE 2024, compared to its 75.7% four-year average. Customer deposits represent 87.0% of total funding, with term deposits at 63.8%. Securities and cash cover 15.9% of customer deposits, while the liquidity coverage ratio the liquidity coverage ratio (LCR) reached 140.6% at YE 2024. These metrics, along with available credit lines, demonstrate strong liquidity. Rating Sensitivities Factors that Could, Individually or Collectively, Lead to Negative Rating Action/Downgrade IDRs and Shareholder Support Rating - Negative rating actions on Industrial' IDRs would lead to similar actions in Bi-Bank's IDR's and the SSR; - Bi-Bank's IDRs and SSR could also change if Fitch's assessment of Industrial's ability and/or willingness to support the bank changes. VR - Bi-Bank's VR could face negative impacts by a significant deterioration in asset quality metrics, pressuring operating profit to RWAs consistently below 1.25%, resulting in a sustained erosion of the CET1 ratio (including the dynamic provision) to levels below 10.0%. Factors that Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade IDRs and Shareholder Support Rating - Positive rating actions on Industrial' IDRs would lead to similar actions in Bi-Bank's IDR's and the SSR. VR - Bi-Bank's VR could benefit from improvements in its income generation and volume of operations, reflected in a higher TOI, accompanied by higher profitability levels and capitalization metrics, while maintaining adequate asset quality ratios. VR ADJUSTMENTS The OE score of 'bb+' has been assigned below the 'bbb' implied score due to the following adjustment reason(s): Sovereign Rating (Negative) Date of Relevant Committee 19 May 2025 Public Ratings with Credit Linkage to other ratings Bi-Bank's SSR, IDCO, IDR's and National Ratings are support driven from its sister company Banco Industrial. 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 ----------- ------ Bi-Bank, S.A. LT IDR BB New Rating ST IDR B New Rating Viability bb- New Rating Shareholder Support bb New Rating ===================== P U E R T O R I C O ===================== CONCORDE METRO: Seeks to Hire Christiansen Commercial as Realtor ---------------------------------------------------------------- Concorde Metro Seguros, LLC seeks approval from the U.S. Bankruptcy Court for the District of Puerto Rico to employ Christiansen Real Estate, Inc., doing business as Christiansen Commercial, as realtor. The Debtor needs a realtor to sell and market its commercial office condominium units located within the Metro Medical Center building at the Bayamon Municipality. The broker will receive a commission of 5 percent of the property sold. Ryan Christiansen, a broker at Christiansen Commercial, disclosed in a court filing that the firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. The firm can be reached through: Ryan G. Christiansen Christiansen Commercial P.O. Box 6894 San Juan, PR 00914 Email: ryan@christiansencommercial.com About Concorde Metro Seguros Concorde Metro Seguros LLC is a single-asset real estate debtor, as defined in 11 U.S.C. Section 101(51B). The Company's primary business involves managing the Metro Medical Center in Bayamon, Puerto Rico, which serves as its principal asset. Concorde Metro Seguros LLC sought relief under Chapter 11 of the U.S. Bankruptcy Code (Bankr. D.P.R. Case No. 25-01269) on March 24, 2025. In its petition, the Debtor reports estimated assets and liabilities between $1 million and $10 million each. The Debtor is represented by Javier Vilarino, Esq. at Vilarino and Associates LLC. FIGUERO TELEPHONE: Taps Ramon Trabal as Accountant -------------------------------------------------- Figueroa Telephone Construction, Inc. seeks approval from the U.S. Bankruptcy Court for the District of Puerto Rico to employ Ramon Trabal Rios & Asociados LLC CPA as accountant. The firm will render these services: (a) supervise the accounting affairs of the Debtor and its operations; (b) prepare and/or review the Debtor's monthly operating reports, as well as any other accounting reports necessary for the proper administration of the estate; (c) prepare and/or review state and/or federal income tax and property tax return, as required by law; and (d) prepare the projection and all other analysis required for the proposal and confirmation of a Chapter 11 Plan. Ramon Trabal Rios, CPA, the primary accountant in this representation, will be paid at a rate of $150 per hour and $50 per hour for support staff. Mr. Rios disclosed in a court filing that the firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. The firm can be reached through: Ramon Trabal Rios, CPA Ramon Trabal Rios & Asociados LLC, CPA Carr 417km 4.3 BO Mamey Aguada, PR 00602 Tel No: (787) 969-9911 Email: cpatrabal@gmail.com About Figueroa Telephone Construction Figueroa Telephone Construction Inc. specializes in the construction and maintenance of telecommunication systems, including both aerial and underground installations. The Company's services encompass fusion and splicing of fiber optic networks, as well as the construction and installation of handholes and manholes for cables. Figueroa Telephone Construction sought relief under Chapter 11 of the U.S. Bankruptcy Code (Bankr. D.P.R. Case No. 25-01506) on April 2, 2025. In its petition, the Debtor reports total assets of $499,203 and total liabilities of $1,131,802. The Debtor tapped Jaime Rodriguez Perez, Esq. at Hatillo Law Office, PSC as counsel and Ramon Trabal Rios & Asociados LLC, CPA as accountant. ===================================== T R I N I D A D A N D T O B A G O ===================================== TRINIDAD & TOBAGO: Energy Transparency Remains Crucial to Fortunes ------------------------------------------------------------------ Trinidad and Tobago Guardian reports that even as a new Government has entered office, Trinidad and Tobago's energy sector will continue to be at the forefront of national attention. This is underscored by ongoing foreign exchange (forex) constraints, the nation's heavy reliance on energy revenues to support the national budget, and the critical role of the Heritage and Stabilisation Fund (HSF) in maintaining economic stability, according to Trinidad and Tobago Guardian. In this moment of transition, the Trinidad and Tobago Extractive Industries Transparency Initiative (TTEITI) continues to advance transparency, accountability and good governance across the energy and mining sectors, the report notes. With over a decade of independent reporting and stakeholder engagement, the TTEITI has published 11 reports and reconciled approximately TT$180 billion in payments made by extractive companies with the government's declared receipts, providing independent verification of revenue earned and ensuring that all funds are properly accounted for, the report relays. The TTEITI has also hosted regional forums with our Caricom neighbours, including Suriname and Guyana, to foster knowledge sharing, strengthen regional collaboration, and promote best practices in extractive sector governance, the report discloses. Importantly, the TTEITI continues to serve as a vital link between government, civil society, and industry for collaboration, supporting policymakers and citizens with credible data to inform their choices and strengthen their calls for sustainable development, the report relays. Although launched earlier this year, The State of the Extractive Sector Report 2024 provides updated information on energy sector tax payments and offers key recommendations to strengthen tax collection, as well as audit and assurance systems, making it a critical tool for informed policymaking and improved resource governance, the report notes. As the nation navigates mounting economic pressures, the report provides critical insights into the sector's trajectory, highlighting persistent structural challenges while underscoring the continued importance of open data and evidence-based decision-making, the report says. The Economic Reality: Overview Of Revenue And Production T&T's economic foundation has long rested on the pillars of oil, gas, petrochemicals, and mining. In the report, 52 oil and gas entities, including seven state-owned enterprises (SOEs), participated in the reconciliation exercise, contributing a reconciled total of TT$31,063,135,040 in payments to the government for 2022, the report recalls. The Independent Administrator (IA) identified a variance of TT$7.7 million between the payments reported by the oil and gas companies and the actual receipts by the government, the report discloses. This discrepancy was attributed to foreign exchange fluctuations, the report says. Importantly, there were no unidentified differences, meaning all revenues were accurately accounted for, the report relays. While the reconciliation exercise covered fiscal 2022, in order to provide the public with up-to-date information, the TTEITI also included unaudited data up to December 2024, the report recalls. As of December 2024, the average price of WTI oil was US$70.12 per barrel, reflecting a marginal decline from US$71.90 per barrel during the same period in 2023, the report relays. Similarly, Henry Hub natural gas prices averaged US$3.01 per million British thermal units (mmBtu) in December 2024, up from US$2.52 per mmBtu in the same period of 2023, the report recalls. As of March 2025, WTI crude oil was priced at US$68.24 per barrel, while Henry Hub natural gas stood at US$4.12 per mmBtu (see charts 1 and 2), the report notes. From fiscal year 2011 to December 2024, the government collected a total of $29.3 billion in royalties, with a significant increase following the 2017 royalty rate adjustment to 12.5 per cent, the report discloses. Royalties declined by 20.92 per cent, from $3.8 billion in 2022 to approximately TT$3 billion in 2023, the report recalls. For fiscal year 2024, the government has received around $2 billion in royalties, with the three largest contributors being bpTT, Heritage and Perenco, paying approximately $1 billion, $712 million and $128 million respectively, the report notes. Between October 1, 2024 and May 16, 2025, the Government received TT $2 billion in royalties with bpTT and Heritage, paying approximately $1.2 billion and $386 million respectively, the report relays. During this period, Government also received $3 billion in share of profit from production sharing contracts with Shell and EOG Resources paying approximately $1.9 billion and $663 million respectively, the report discloses. It is important to note that these figures are unaudited, the report adds. As it relates to mining/quarrying, five entities, including two state-owned enterprises (SOEs), participated in the reconciliation exercise for 2022, contributing a reconciled total of $7,654,037 in payments to the government, the report says. The mining companies involved were Trinidad Cement Ltd, Hermitage Limestone Ltd, Lake Asphalt of Trinidad and Tobago (1978), Estate Management and Business Development, and Readymix Ltd, the report relays. In terms of oil and gas production, the Independent Administrator (IA) reconciled oil production to 21,127,220 barrels for 2022, the report recalls. Gas production was similarly reconciled to 947,749,899 million cubic feet for the same year. For the mining sector, mineral production reconciliation resulted in a total of 1,824,475 cubic yards in 2022, the report relays. Given energy price volatility and the decline in royalties, the question on everyone's mind is clear: how will the nation adapt and ensure a sustainable future for its people, particularly as its once-booming oil and gas sector faces an uncertain road ahead? The government has outlined plans for regional energy sector cooperation and tackling illegal quarrying, the report notes. The TTEITI through its regional outreach efforts with Suriname, Guyana and Grenada and other Caricom countries has promoted transparent and accountable resource governance and has hosted several workshops aimed at promoting best practice in quarry rehabilitation and tax collection, the report relays. A Vision for the Future T&T's economic well-being remains deeply tied to the extractive industries, the report relates. The decline in revenue presents both a challenge and an opportunity, an opportunity to rethink how the country manages its natural resources, boosts upstream investment, invests in more renewable power projects, and improves governance structures, the report discloses. As the country seeks to determine whether these initiatives will provide short, medium or long-term economic gain, transparency remains a critical factor, the report relays. The EITI framework continues to be the global standard for ensuring that the extractive sector is managed in an open and accountable manner, the report adds. TRINIDAD GENERATION: S&P Affirms BB+ ICR & Alters Outlook to Stable ------------------------------------------------------------------- S&P Global Ratings, on June 6, 2025, revised its outlook on Trinidad and Tobago-based power generator and government-owned Trinidad Generation Unlimited (TGU) to stable from negative and affirmed the 'BB+' issuer credit ratings on the company. S&P also assigned a 'BB+' issue rating to the proposed $500 million senior unsecured notes. The outlook reflects S&P's expectation that the company will be able to refinance its notes upon the announced issuance, extending its debt maturity and improving liquidity. It also mirrors the sovereign outlook. Debt refinancing will improve TGU's capital structure and liquidity, extending its debt maturity profile. The company intends to issue new notes for $500 million to prepay the outstanding $450 million under its existing notes due in November 2027. Because the existing bond started amortizing in May 2025, the company has already paid $90 million, and the announced issuance will remove the remaining five semiannual upcoming amortizations of $90 million each. This will improve liquidity and extend the average debt tenor beyond five years, resulting in a more sustainable capital structure, in our view. The terms and conditions of the new notes don't differ materially from the previous documentation. S&P said, "We view this issuance as a pure liability management initiative. Although the total amount of $500 million exceeds the amount of debt outstanding, the increase in debt is not material, in our view. The new amount will reinforce TGU's cash position following the $90 million payment in May 2025. In addition, TGU held $236 million of cash on hand as of March 2025, which could adequately cover the next two semiannual coupon payments, so we don't envision a major liquidity issue if this issuance doesn't take place. In addition, we consider it pure liability management We believe this new bond will support the company's capital structure for upcoming years. "We incorporate the potential use of excess cash after the refinancing into our highly leveraged financial risk profile. Our base-case scenario assumes steady earnings and cash flow for 2025, based on the company's contracted business model with the state-owned Trinidad and Tobago Electricity Commission. In this context, we forecast nominal EBITDA of $75 million-$80 million in 2025, with a margin around 70% and net debt to EBITDA improving to 4.0x, compared to 4.5x in 2024. Funds from operations (FFO) to net debt will also remain steady at about 11% in the next two years. "However, we think it's likely that the company will use the excess cash on hand after the refinancing of $180 million-$200 million to perform additional capital expenditures (capex). The minimum cash policy is $40 million. Accordingly, we apply a negative volatility adjustment to TGU's cash flow/leverage assessment. "We continue to view TGU as a critical electricity asset for Trinidad and Tobago, which enhances the company's creditworthiness beyond its stand-alone credit profile (SACP). Government-owned TGU is the most efficient power plant, measured by its heat rate, in the country. The company accounts for 39% of Trinidad and Tobago Electricity Commission's (T&TEC; not rated) total contracted capacity and delivers over 50% of the country's electricity demand. This, combined with the government's 100% guarantee of TGU's revenue through a power purchase agreement (PPA), its full ownership of the company, and a change-of-control provision that would trigger a debt acceleration payment, leads us to think there's a very high likelihood that the government would provide extraordinary financial support to TGU under stressed conditions. This results in a two-notch rating uplift to the company, which has a SACP of 'bb-'. "The stable outlook reflects our expectation that the company will be able to refinance its notes upon the announced issuance, extending its debt maturity and improving liquidity. It also mirrors that on Trinidad and Tobago (T&T; BBB-/Stable/A-3) and reflects our view that the very high likelihood of extraordinary support from the government will persist. "We could revise the outlook to negative or lower the ratings in the upcoming 12 months if we were to take the same action on T&T or if we perceive a lower likelihood of extraordinary support from the government, which could occur if other market participants are able to replace TGU's electricity output. "We could also downgrade the company if for any reason the issuance does not take place within the next 6, which could weaken our view of the company's capital structure and liquidity. "We could revise the outlook to positive or raise the ratings in the next 12 months if we were to do the same on the sovereign. We could also upgrade the company if it is able to maintain net debt to EBITDA consistently below 5x and FFO to debt consistently above 10%, considering the potential uses of the excess cash after the refinancing in new investments or additional dividends to the government." ********* S U B S C R I P T I O N I N F O R M A T I O N Troubled Company Reporter-Latin America is a daily newsletter co-published by Bankruptcy Creditors' Service, Inc., Fairless Hills, Pennsylvania, USA, and Beard Group, Inc., Washington, D.C., USA, Marites O. Claro, Joy A. Agravante, Rousel Elaine T. Fernandez, Julie Anne L. Toledo, Ivy B. Magdadaro, and Peter A. Chapman, Editors. Copyright 2025. All rights reserved. ISSN 1529-2746. This material is copyrighted and any commercial use, resale or publication in any form (including e-mail forwarding, electronic re-mailing and photocopying) is strictly prohibited without prior written permission of the publishers. Information contained herein is obtained from sources believed to be reliable, but is not guaranteed. The TCR Latin America subscription rate is US$775 per half-year, delivered via e-mail. Additional e-mail subscriptions for members of the same firm for the term of the initial subscription or balance thereof are US$25 each. For subscription information, contact Peter A. Chapman at 215-945-7000. . * * * End of Transmission * * *