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250702.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 Wednesday, July 2, 2025, Vol. 26, No. 131 Headlines A R G E N T I N A ARGENTINA: China Imports Soy Meal in Trial Amid US Tensions ARGENTINA: Cordoba Province Sells US$725 Million of Debt Abroad B R A Z I L AZUL SA: Section 341(a) Meeting of Creditors on July 30 REFINARIA DE MATARIPE: Fitch Affirms 'B+' IDRs, Outlook Stable C H I L E LATAM AIRLINES: Moody's Rates New Secured Notes Due 2031 'Ba2' D O M I N I C A N R E P U B L I C DOMINICAN REPUBLIC: Public Debt Grows by Over US$3.7BB in 2025 DOMINICAN REPUBLIC: Working on a Counterproposal to U.S. Tariffs E C U A D O R ECUADOR: IDB Approves $400MM Loan to Strengthen Organized Crime M E X I C O FINANCIERA INDEPENDENCIA: Fitch Hikes IDRs to 'BB', Outlook Stable LEISURE INVESTMENTS: Committee Taps Force Ten as Financial Advisor P E R U ORAZUL ENERGY: S&P Withdraws 'BB-' LongTerm Issuer Credit Rating - - - - - ================= A R G E N T I N A ================= ARGENTINA: China Imports Soy Meal in Trial Amid US Tensions ----------------------------------------------------------- Alfred Cang & Hallie Gu at Bloomberg News reports that China has booked a rare shipment of soybean meal from Argentina, as the country seeks to secure supplies of a key animal feed ingredient amid an ongoing trade war with the United States. Several Chinese traders and feed producers jointly ordered the cargo from the world's top exporter of soy meal and oil as a trial shipment, according to people with the knowledge of the deal, according to Bloomberg News. It marks the first purchase since Beijing opened the door to imports from the country in 2019, the people said, Bloomberg News notes. The 30,000-ton shipment is expected to leave Argentina in July and arrive at the southern Chinese province of Guangdong in September, said the people, who asked not to be named discussing private deals, Bloomberg News relays. The cargo was priced at about US$360 a ton including freight, the people said. While the volume is small, the purchase is seen as a test ahead of the fourth quarter, when US soybeans usually dominate the global market after the US harvest, Bloomberg News discloses. China typically relies on imports of raw soybeans, which are crushed domestically into meal for livestock, as well as cooking oil, Bloomberg News says. Argentina's top crop exporting and crushing group, which includes the major trading houses as members, met in Buenos Aires with Liu Huanxin, chief of China's National Food and Strategic Reserves Administration, according to Gustavo Idigoras, who heads the group called Ciara-Cec, Bloomberg News relays. They discussed the commercial feasibility of Argentine soy meal exports, Idigoras said, Bloomberg News discloses. In an effort to avoid US crops during the trade war with Washington, Beijing has sought out a range of other suppliers, Bloomberg News notes. It also imported a record monthly volume of Brazilian soybeans in May, Bloomberg News relays. China imposed retaliatory tariffs on a raft of US farm products, including soybeans, earlier this year, Bloomberg News notes. After talks earlier this month, the US said the two sides had agreed to a trade framework, a potential step toward resolving the tariffs disputes and easing tensions. Many details remain unclear, however, Bloomberg News says. The Argentine cargo was first reported by Reuters, Bloomberg News adds. About Argentina Argentina is a country located mostly in the southern half of South America. Its capital is Buenos Aires. Javier Milei is the current president of Argentina after winning the November 19, 2023 general election. He succeeded Alberto Angel Fernandez in the position. Argentina has the third largest economy in Latin America. The country's economy is an upper middle-income economy for fiscal year 2019, according to the World Bank. Historically, however, its economic performance has been very uneven, with high economic growth alternating with severe recessions, income maldistribution and in the recent decades, increasing poverty. In March 2022, the International Monetary Fund (IMF) approved a 30-month arrangement under an Extended Fund Facility for Argentina in the amount of SDR 31.914 billion (equivalent to US$44 billion, or 1000 percent of quota) -- with an approved immediate disbursement of an equivalent of US$9.65 billion. Argentina's IMF-supported program sought to improve public finances and start to reduce persistent high inflation through a multi-pronged strategy. On April 11, 2025, the IMF further approved a 48-month Extended Fund Facility (EFF) arrangement for Argentina totaling US$20 billion (or 479 percent of quota), with an immediate disbursement of US$12 billion, and a first review planned for June 2025 with an associated disbursement of about US$2 billion. The program is expected to help catalyze additional official multilateral and bilateral support, and a timely re-access to international capital markets. 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: Cordoba Province Sells US$725 Million of Debt Abroad --------------------------------------------------------------- Kevin Simauchi at Bloomberg News reports that Argentina's Cordoba Province tapped fixed-income investors in the country's first international debt sale by a local government since President Javier Milei took office in late 2023. Córdoba, the country's second largest by population, sold US$725 million of dollar notes due in 2032 under New York law, according to a person familiar with the matter, according to Bloomberg News. The securities priced at par and carry a yield of 9.75 percent, the person added, asking not to be named discussing a private transaction, Bloomberg News notes. The proceeds of the notes will be used to conduct a buyback of the province's securities due in 2027, with the remainder of the cash to be used to finance infrastructure projects and repay existing liabilities, Bloomberg News relays. Córdoba's sale follows a flurry of emerging market borrowers rushing to credit markets to lock in financing ahead of any potential geopolitical escalations in the Middle East and before any developments in US President Donald Trump's trade war sap risk appetite, Bloomberg News discloses. The province's return to global markets also highlights how Argentina's local governments are benefitting from investor optimism surrounding Milei's economic overhaul and its success in slashing inflation, Bloomberg News relays. The bond sale is also poised to serve as an early signal to investors that the sovereign may also look to launch its own return to international capital markets, Bloomberg News notes. In May, Milei's government hailed its return to markets in a US$1-billion debt issuance where investors bought notes denominated in pesos with dollars, though the bonds are under Argentine law, Bloomberg News relays. Bankers from JPMorgan Chase & Co and Banco Santander arranged the transaction, Bloomberg News adds. About Argentina Argentina is a country located mostly in the southern half of South America. Its capital is Buenos Aires. Javier Milei is the current president of Argentina after winning the November 19, 2023 general election. He succeeded Alberto Angel Fernandez in the position. Argentina has the third largest economy in Latin America. The country's economy is an upper middle-income economy for fiscal year 2019, according to the World Bank. Historically, however, its economic performance has been very uneven, with high economic growth alternating with severe recessions, income maldistribution and in the recent decades, increasing poverty. In March 2022, the International Monetary Fund (IMF) approved a 30-month arrangement under an Extended Fund Facility for Argentina in the amount of SDR 31.914 billion (equivalent to US$44 billion, or 1000 percent of quota) -- with an approved immediate disbursement of an equivalent of US$9.65 billion. Argentina's IMF-supported program sought to improve public finances and start to reduce persistent high inflation through a multi-pronged strategy. On April 11, 2025, the IMF further approved a 48-month Extended Fund Facility (EFF) arrangement for Argentina totaling US$20 billion (or 479 percent of quota), with an immediate disbursement of US$12 billion, and a first review planned for June 2025 with an associated disbursement of about US$2 billion. The program is expected to help catalyze additional official multilateral and bilateral support, and a timely re-access to international capital markets. Fitch Ratings, on May 12, 2025, upgraded Argentina's Long-Term Foreign-Currency and Local-Currency Issuer Default Rating (IDR) to 'CCC+' from 'CCC'. The upgrade reflects the launch of a new IMF program, among other things. S&P Global Ratings, in February 2025 lowered its local currency sovereign credit ratings on Argentina to 'SD/SD' from 'CCC/C' and its national scale rating to 'SD' from 'raB+'. Moody's Ratings, in January 2025, raised Argentina's local currency ceiling to B3 from Caa1 and the foreign currency ceiling to Caa1 from Caa3. DBRS, Inc. upgraded Argentina's Long-Term Foreign and Local Currency Issuer Ratings to B (low) from CCC in November 2024. =========== B R A Z I L =========== AZUL SA: Section 341(a) Meeting of Creditors on July 30 ------------------------------------------------------- A meeting of creditors of Azul S.A. and its debtor-affiliates is set for July 30, 2025, at 12:00 p.m. (prevailing Eastern Time). Telephone conference: Dial-in Number: (877) 92905805, Passcode: 1293922#. The Debtors' representative must attend the meeting to be questioned under oath. Creditors may attend but are not required to do so. The meeting may be continued or adjourned to a later date. Further information regarding the meeting of creditors, contact (833) 888-6055 (Toll-Free) or +1 (949) 556-3896 (International) or visit https://cases.stretto.com/Azul 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 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. The U.S. Trustee for Region 2 appointed an official committee to represent unsecured creditors in the Chapter 11 cases of Azul S.A. and its affiliates. REFINARIA DE MATARIPE: Fitch Affirms 'B+' IDRs, Outlook Stable -------------------------------------------------------------- Fitch Ratings has affirmed Refinaria de Mataripe S.A. (REFMAT) Long-Term Foreign and Local Currency Issuer Default Ratings (IDRs) of 'B+'. The Rating Outlook is Stable. Fitch has affirmed MC Brazil Downstream Trading S.a.r.l.'s USD1,800 million senior secured notes due 2031 at 'B+' with a Recovery Rating of 'RR4'. REFMAT's ratings reflect its status as a single-site, medium-complexity refiner in a competitive geographic location. Cash flow generation is moderate because compressed crack spreads continue pressuring financial performance. The company implemented operating efficiency measures that have somewhat offset the negative market pressures, helping stabilize EBITDA generation and leverage metrics. Fitch expects REFMAT will realize a weighted average crack spread of USD9.5/barrels (bbl) between 2025 and 2028, higher than the 8.8/bbl realized in 2024. Key Rating Drivers Moderately Supportive Market: REFMAT's location in northeastern Brazil provides a competitive advantage because most domestic refining capacity is in the south and southeast. This location, coupled with Brazil's structural deficit of refined products, supports the company's continued import parity pricing, a practice seen in Brazil in recent years. Tight spreads have also affected the ratings, despite some stabilization in the last quarters. Fitch estimates REFMAT's weighted adjusted crack spread for 2025 at USD8.8/bbl, up from USD7.7/bbl in 2024. Fitch forecasts that leverage will improve to 4.7x in 2025 and average 3.7x through the rating horizon. Three factors support this forecast: lower price pressures from Petrobras, product spreads stabilizing at mid-cycle values, and an improved product mix. Domestic Pricing Policies: REFMAT's cash flows are vulnerable to domestic pricing policies for gasoline and diesel, as well as its ability to source oil domestically at competitive prices. In 2023 and 2024, the company faced challenges sourcing domestic oil, as independent oil producers prioritized exports over domestic sales, as a tax arbitrage. Fitch expects this situation to continue to evolve favorably because industry reforms will incentivize local sales. The high dependence from Petrobras for feedstock hinders the company's ability to optimize pricing, but recent negotiations have resulted in improved pricing conditions Operational Improvements: REFMAT executed capex of USD 172 million in 2023 and USD 168 million in 2024, with investments that improved the refinery's availability, efficiency, and extended its residual life by at least 20 years and extends major maintenance capex to 11 years from the previous assumed five years. Fitch expects that operating costs per barrel will decrease by at least 15% to 7.0/bbl in 2025, which combined with improved product mix will bolster EBITDA. Fitch assumes average utilization rate of 87% over the rated horizon, above the historical average of 80.7%, due to operational improvements. Deleveraging Strategy: Fitch forecasts 2025 leverage at 4.7x in 2025 and below 4.0x through the rating horizon, an improvement from 2024 metrics. This forecast is supported by successful commercial and operational initiatives to improve EBITDA, and bond-specific deleveraging mechanisms. The DSCR is likely to exceed 3.0x through the rating horizon, underscoring expected EBITDA and FFO improvement. The positive trend, combined with the issuer's amortizing debt structure, strong cash balance of USD 345 million as of 1Q25, and approximately USD 725 million in available committed lines, supports REFMAT's liquidity during periods of market volatility. Peer Analysis REFMAT's ratings reflect its status as a single-site, medium-complexity refiner with a competitive geographic location. The company has a nameplate capacity of 302,000 barrels per day (bpd), which compares with CVR Energy, Inc.'s (B+/Stable) nameplate capacity approximately 206,500 bpd. REFMAT is smaller than peers PBF Holding Company LLC (BB/Negative) with 1.023 million bpd and KMG International NV (B+/Stable) with 131,000 barrels of oil equivalent per day. The company's location is comparable with other midcontinental refineries in U.S., such as CVR Energy, which gives these companies a competitive advantage in sourcing crude oil close to production facilities while having more control on product pricing, particularly for domestic sales. REFMAT should be well positioned to take advantage of higher than normal very low sulphur fuel oil crack spreads that may prevail for the next few years because of its ability to access local markets that it was not accessing before. The company continues to develop a domestic market for VLSFO, which plays favorably in its product mix and resulting blended realized pricing. REFMAT's expected average gross leverage, defined as total debt/EBITDA, of 3.7x is generally in line with 'B' peers, with leverage of 4x. Key Assumptions - Brent oil prices of USD65/bbl 2025-2027 and USD 60/bbl in 2028; - Crack spreads in Brazil's northeast region between USD8.8-USD10.1 per bbl over the forecast period; - Utilization rate averaging 87% through the rating horizon; - Average operating expenses of USD7.2/bbl; - Average capex of USD154 million per year over the rating cycle; - Cash flows from hedging activities are not being incorporated in the base case. Recovery Analysis The recovery analysis assumes that REFMAT would be a going concern (GC) in bankruptcy and that it would be reorganized rather than liquidated. GC Approach: - A 10% administrative claim. - The GC EBITDA is estimated at BRL3,848 million. The GC EBITDA estimate reflects Fitch's view of a sustainable, post-reorganization EBITDA level upon which Fitch bases the valuation of REFMAT. - EV multiple of 4x. With these assumptions, Fitch's waterfall generated recovery computation (WGRC) for the senior secured notes is in the 'RR2' band. However, according to Fitch's Country-Specific Treatment of Recovery Ratings Criteria, the Recovery Rating in Brazil for the senior secured notes is capped at 'RR4'. RATING SENSITIVITIES Factors that Could, Individually or Collectively, Lead to Negative Rating Action/Downgrade - EBITDA/interest expense below 2.0x; - Debt to EBITDA above 4.5x on a sustained basis; - Cash balance below BRL2.0 billion; -Sustained deterioration of crack spreads. Factors that Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade - Greater operations and earnings diversification or evidence of lower cash flow volatility; - Sustained debt/EBITDA leverage at or below 3.0x; - Sustained DSCR below 1.0x. Liquidity and Debt Structure REFMAT's liquidity is supported by a six-month debt service reserve account and an initial USD 300 million cash policy, that covers roughly two years of debt service, mitigating short-term cash flow disruptions from price volatility in crude oil or refined products. REFMAT's debt comprises USD 1.8 billion in amortizing notes and drawn credit lines. The notes follow a sculpted amortization schedule and include a cash sweep provision: a minimum of 25% of available cash flow is swept when net leverage is below 2.5x, increasing to 50% at 2.5x-3.0x, and up to 75% if leverage exceeds 3.0x. In 2024, the cash sweep totaled USD 14 million. Debt servicing is prioritized through a cash waterfall structure, covering operating expenses, purchases, capex, taxes, and hedging, followed by senior debt service, reserve funding, cash sweep payments, and finally distributions, subject to restricted payment tests. The senior secured notes are collateralized by all assets, contracts, and receivables, except the crude purchase liquidity facility. As of June 17, 2025, REFMAT had USD 725 million in committed lines, USD 345 million in cash (as of March 2025), and total debt of USD 1.78 billion. Issuer Profile MC Brazil, now Refinaria de Mataripe S.A., was formed for the purpose of acquiring and operating the Landulpho Alves Refinery, now REFMAT, from Petrobras. The refinery sells its products to Brazil's north and northeast regions and exports fuel oils. 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 Refinaria de Mataripe S.A. has an ESG Relevance Score of '4' for GHG Emissions & Air Quality due to the nature of the refining business and the emissions associated to it, which has a negative impact on the credit profile, and is relevant to the ratings in conjunction with other factors. The highest level of ESG credit relevance is a score of '3', unless otherwise disclosed in this section. A score of '3' means ESG issues are credit-neutral or have only a minimal credit impact on the entity, either due to their nature or the way in which they are being managed by the entity. Fitch's ESG Relevance Scores are not inputs in the rating process; they are an observation on the relevance and materiality of ESG factors in the rating decision. Entity/Debt Rating Recovery Prior ----------- ------ -------- ----- MC Brazil Downstream Trading S.a.r.l. senior secured LT B+ Affirmed RR4 B+ Refinaria de Mataripe S.A. LT IDR B+ Affirmed B+ LC LT IDR B+ Affirmed B+ ========= C H I L E ========= LATAM AIRLINES: Moody's Rates New Secured Notes Due 2031 'Ba2' -------------------------------------------------------------- Moody's Ratings has assigned a Ba2 rating to LATAM Airlines Group S.A. (LATAM)'s proposed benchmark sized senior secured notes due 2031 issued by LATAM. LATAM's existing Ba2 Corporate Family Rating, secured debt ratings and stable outlook remain unchanged. The proposed issuance is part of LATAM's liability management strategy and proceeds will be used to prepay the company's senior secured notes due 2029, thus reducing LATAM's average cost of debt and not affecting the company's debt protection metrics. The rating of the proposed notes assumes that the final transaction documents will not be materially different from draft legal documentation reviewed by us to date and assume that these agreements are legally valid, binding and enforceable. RATINGS RATIONALE LATAM's Ba2 rating reflects the company's scale and superior network connectivity, which translate into leading positions in the five domestic markets in which it operates, in intraregional flights in Latin America and in international long-haul flights as of March 2025. The rating also reflects its well-diversified business portfolio of air transportation services and strategic alliances. The rating is also supported by LATAM's improved post-bankruptcy capital and cost structures, and good liquidity, which will allow the company to weather the volatile recovery of the industry. The rating is constrained by LATAM's exposure to the airline industry and to macroeconomic risks and oil prices. LATAM will have to contend with higher costs derived from labor (denominated in local currencies), fuel, and other US dollar-denominated inputs, which can hamper profitability despite firm demand and capacity discipline in its key markets. LATAM's Moody's-adjusted leverage improved to 2.1x at the end of March 2025 from 2.2x at the end of 2024, while it generated $1.4 billion of free cash flow since the beginning of 2023. Moody's expects LATAM's leverage to remain within 2.0-2.5x and its cash position to amount to above 15% of revenues in the next 2 years, which provides cushion to the company's credit quality even under stress scenarios. The proposed transaction is part of LATAM's liability management strategy and proceeds will be used to prepay the company's senior secured notes due in 2029 thus reducing debt cost and strengthening its interest coverage after the expensive issuance of its exit financing. The strong operating performance and strengthened credit metrics reflect sustained improvements in LATAM's cost and capital structures, which provides LATAM cushion to withstand potentially weaker market conditions. LATAM's operating performance remains strong in 2025, with Moody's-adjusted EBIT margin increasing to 15.3% in the twelve months ended March 2025 compared to 7.5% in 2019. The strong performance was driven by LATAM's sustained improvements in its cost base, combined with a disciplined approach towards capacity and airfares by all Latin American airlines following industry consolidation, supply chain bottlenecks that prevent major fleet expansion and tight balance sheets and liquidity. LATAM's CASK ex-fuel stood at around $4.6 cents in the first quarter of 2025, $0.1 cents higher relative to 2019 levels, evidencing LATAM's cost-driven management despite the inflationary pressures faced by the region in the last four years. The company restructured its cost base, simplified its fleet, increased the share of variable costs, outsourced non-core activities and renegotiated over 1,000 contracts, most of which do not contain step-up or termination clauses, making the improvements sustainable. So far, air travel demand has remained robust in the region even amid stagnant economic growth and lower disposable income. LATAM's total RPK recovered to 108% of 2019 level in March 2025, with Brazil and Spanish speaking countries RPKs at 120% and 104%, respectively, and international RPKs at 104%. LIQUIDITY LATAM has a good liquidity profile with $2.1 billion in cash and $408 million in debt maturing before the end of 2026. The company's cash balance covers short term financial debt maturities of $307 million by 7.0x. The company's debt amortization schedule is comfortable, with most of the upcoming maturities represented by the exit financing notes and the new proposed notes, due beyond 2027. The company also has two secured, undrawn revolving committed credit facilities amounting to $1.1 billion since November 2022, which were upsized to $1.55 billion in July 2024 and extended until July 2029, and generated $537 million of free cash flow as of the last twelve months ended March 2025. The company's cash generation benefits from a reduction of about 40% in annual fleet cash costs from 2019 levels following the renegotiation of the fleet contracts done during Chapter 11, and the company continues to have flexibility in terms of fleet and non-fleet capex. Moody's expects that LATAM will generate about $2.0-2.5 billion in cash flow from operations annually, which is sufficient to cover annual capex needs by about 1.5x, including fleet renewal and expansion. Moody's also expects a neutral to positive free cash flow from 2025 onwards, reflecting flexibility in maintenance capex and costs. The company also has other potential liquidity sources, including unencumbered assets that could be used in potential secured financing transactions. RATING OUTLOOK The stable outlook reflects Moody's expectations that LATAM's credit metrics and liquidity will remain strong in the next 12-18 months, and that the company will maintain its conservative approach towards liquidity, costs and capacity management. The outlook also reflects Moody's expectations that LATAM will continue to pursue liability management initiatives to reduce its debt cost further. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATING LATAM's ratings could be upgraded if the company strengthens its balance sheet and liquidity further, such that the company builds cushion in credit metrics under stress scenarios. Quantitatively an upgrade would require adjusted leverage (measured by total debt / EBITDA) sustained below 3.0x and interest coverage (measured by (FFO + interest expense) / interest expense) above 5.5x on a sustained basis. The maintenance of an adequate liquidity profile, with positive free cash flow generation even during times of fleet expansion would also be required for an upgrade. The rating could be downgraded if credit metrics deteriorate, with adjusted leverage remaining above 4.0x and interest coverage below 4.0x on a sustained basis. A deterioration in the company's liquidity profile or additional shocks to demand or profitability that lead to cash burn could also result in a downgrade of the rating. COMPANY PROFILE LATAM Airlines Group S.A. (LATAM) is a Chile-based airline holding company formed by the business combination of LAN Airlines S.A. of Chile and TAM S.A. (TAM) of Brazil in June 2012. LATAM is the largest airline group in South America, with a local presence for domestic passenger services in five countries (Brazil, Chile, Peru, Ecuador and Colombia). The company also provides intraregional and international passenger services, has a cargo operation that is carried out using belly space on passenger flights and a dedicated freighter service and has LATAM Pass, the largest frequent flyer program in the region and 7th largest in the world in terms of members. In the twelve months ended March 2025, LATAM generated $12.9 billion in net revenue. LATAM serves passengers in around 153 destinations in 27 different countries; provides cargo services to 160 destinations in 33 countries; and as of March 2025, had a fleet of 348 aircraft and a set of bilateral alliances. The principal methodology used in this rating was Passenger Airlines published in August 2024. =================================== D O M I N I C A N R E P U B L I C =================================== DOMINICAN REPUBLIC: Public Debt Grows by Over US$3.7BB in 2025 -------------------------------------------------------------- Dominican Today reports that the Dominican Republic's public debt increased by US$3.75 billion during the first four months of 2025, marking a 6.52% rise so far this year. According to the General Directorate of Public Credit, total debt for the Non-Financial Public Sector (SPNF) reached US$61.34 billion, continuing an upward trend that has accelerated since 2022, the report notes. When adding the Central Bank's debt of US$16.29 billion, the country's consolidated public debt now totals US$77.63 billion, according to Dominican Today. This marks an increase of more than US$9.48 billion (18%) from 2022, when the debt stood at US$51.85 billion, the report relays. Key drivers of the debt surge include the financing of budget deficits, interest payments on existing debt, and unfavorable international conditions, such as rising global interest rates, the report relays. The increasing debt burden has sparked concern among economists and civil society over its potential impact on the national budget, debt servicing capacity, and the country's long-term fiscal flexibility, the report discloses. Experts are calling for stronger fiscal discipline and more sustainable financing strategies to safeguard the Dominican Republic's economic future, 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: Working on a Counterproposal to U.S. Tariffs ---------------------------------------------------------------- Dominican Today reports that Vice President Raquel Peña reported that the government is working on presenting a counterproposal to the 10% tariff imposed by President Donald Trump on local products shipped to the United States. Upon hearing the demands of these producers, who are asking the government to expand their export market for Banilejo mangoes, the vice president asserted that the executive branch is working to resolve the situation with U.S. authorities, according to Dominican Today. On April 2, President Trump presented his proposal for minimum global tariffs of 10% and additional tariffs on a country-by-country basis, claiming that these taxes "will bring unprecedented growth" and "faster than anyone thinks," the report notes. The table the US president showed at the time establishes 10% tariffs for countries such as Argentina, Brazil, Colombia, Chile, Ecuador, Guatemala, Honduras, Peru, the Dominican Republic, Costa Rica, and Nicaragua, the report relays. "We haven't given up, just as they've proposed. We're working to negotiate the 10% tariff counterproposal they really want to impose on us. We're going to work and we're going to defend ourselves," Pena said, the report discloses. "I want to tell you that through President Abinader himself, the Ministry of Agriculture and everything related to agricultural products, but also the Ministry of Industry, Commerce, MSMEs, and the Ministry of Foreign Affairs, we are working to present a counterproposal. In other words, we haven't abandoned it, just as you've presented it to us," he added. From Wednesday to Sunday, Bani will celebrate the twenty-first edition of its Mango Harvest Fair, Expomango 2025, a time that the government took advantage of to listen to the needs and issues that the local mango producers have to address for their growth and development, both in production and in the sale and export of the product, the report relays. 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. ============= E C U A D O R ============= ECUADOR: IDB Approves $400MM Loan to Strengthen Organized Crime --------------------------------------------------------------- The Inter-American Development Bank (IDB) has approved a $400 million loan to Ecuador to strengthen the country's institutional capacity to prevent and tackle criminal violence and illicit financial flows. This programmatic policy-based loan addresses growing insecurity in a country where the homicide rate has risen from 7 to 39 per 100,000 inhabitants between 2020 and 2024, an increase of over 400%. The program lays out a comprehensive, cross-sector, and evidence-based response that includes new regulatory frameworks, channels for inter-institutional coordination, intervention strategies, and tools for tracing and controlling illicit assets. The "Program for Institutional Strengthening to Prevent and Address Violence and Crime in Ecuador" aims to clamp down on criminal violence and illicit markets through structural reforms that prevent children and adolescents from being recruited by criminal groups, modernize the police, combat money laundering and recover illicit assets, and reduce illegal mining. The IDB-backed program will directly benefit over five million children and adolescents, 641,000 residents of the Ecuadorian Amazon, students at 1,785 schools with high recruitment risks, and 5.88 million inhabitants of 23 vulnerable cantons. It is expected to reduce the average homicide rate in these cantons from 73.9 to 66.6 per 100,000 inhabitants by 2027, and increase perceived safety in school communities by 10 percent. The plan also includes specific measures to protect migrant children and adolescents, including a protocol to stop migrant smuggling and a procedure allowing unaccompanied minors to obtain legal immigration status. This initiative is part of the IDB's "Alliance for Security, Justice, and Development" strategy to enhance regional coordination to combat organized crime. Important program initiatives include a national strategy to prevent children and adolescents from being recruited to criminal groups, a new territory- and evidence-based service model for the police, a new anti-money laundering law that meets Financial Action Task Force standards, and a National Mining Sector Integrity Committee to address illegal mining. The operation will also support innovations such as the INTERPOL Silver Notice for recovering illicit assets abroad and the REBEFICS registry for identifying beneficial owners behind shell companies used to launder assets. The program will be executed by Ecuador's Ministry of Economy and Finance, in coordination with key institutions in the security, justice, education, mining, and finance sectors. It includes rigorous monitoring and evaluation structures, as well as technical assistance to ensure the sustainability of the reforms. By approving this loan, the IDB underscores its commitment to institutional strengthening, citizen security, and sustainable development in Latin America and the Caribbean. =========== M E X I C O =========== FINANCIERA INDEPENDENCIA: Fitch Hikes IDRs to 'BB', Outlook Stable ------------------------------------------------------------------ Fitch Ratings has upgraded Financiera Independencia, S.A.B. de C.V., Sociedad Financiera de Objeto Multiple, Entidad No Regulada's (Findep) Long-Term Local and Foreign Currency Issuer Default Ratings (IDRs) to 'BB' from 'BB-', and the senior unsecured long-term debt rating to 'BB' from 'BB-'. Fitch has also affirmed the Short-Term Local and Foreign Currency IDRs at 'B'. The Rating Outlook on the Long-Term ratings is Stable. Fitch has also upgraded Findep's and Apoyo Economico Familiar, S.A. de C.V., Sociedad Financiera de Objeto Multiple, E.N.R. (AEF) Long-Term National rating to 'A(mex)' from 'A-(mex)', and the Short-Term National Rating to 'F1(mex)' from 'F2(mex)'. The Outlook of the Long-Term ratings is Stable. The upgrades reflect the strengthened funding, liquidity and coverage profile of the company, after strategic decision that lead to improvements on its maturity profile, an upward revision of the company's business profile score that incorporates Fitch's expectation of continued total net operating income (TNOI) growth, and an improved assessment of the risk profile score reflecting enhanced liquidity risk management. Fitch expects pressures of the macroeconomic environment to be reasonably managed by the entity given consistent short-term maturities reduction, its proven ability to generate cash and its high net interest margin (NIM) levels. Key Rating Drivers IDRs Based on Standalone Credit Profile: Findep's ratings reflect its recognized franchise and concentration in unsecured loans in the microfinance sector, as well as better-than peers' geographical diversification. The ratings also consider the higher risk profile, high non-performing loan (NPL) metrics, and a reasonable maturity profile with excess liquidity coverage. Findep's low tangible leverage and sound profitability are rating strengths. SROE Underpinned by Geographical Diversification: The sector risk operating environment (SROE) score at 'bbb-' with a negative trend is above the Mexican finance and leasing companies' (FLCs) SROE ('bb+' with negative trend), capturing the company's international operation in the U.S. through its subsidiary Apoyo Financiero Inc. (AFI). The negative trend on the SROE reflects macroeconomic pressures that may affect the entity's growth and asset quality. Solid Business Profile: Fitch increased the score for the Business Profile to 'bb' from 'bb-' due to the good pricing structures in its business model. This is reflected in a positive trend in its four-year average total net operating income, which reached USD249 million as of December 2024. This figure compares well with several Fitch-rated non-bank financial institutions (NBFIs) in Latin America. Good Execution and Reasonable Risk Controls: Fitch increased Management and Strategy score to 'bb' from 'bb-', mainly reflecting good execution in managing debt maturities. The Risk Profile factor was also improved to 'b+' from 'b' to reflect the actions taken to maintain a sound liquidity position and better manage refinancing risks, as well as appropriate loan origination and collection practices considering the riskier segment it targets. Controlled Delinquency Metrics but High Charge-offs: Findep reduced its core metric of stage 3 loans to total loan portfolio. However, net charge-offs represent a high percentage of the average gross loan portfolio. As of March 2025, the delinquency metric was 5.7% (2024: 5.9%) and net charge-offs to average gross loans were 18.1% (2024: 16.4%). Fitch foresees asset quality pressures arising from the adverse macroeconomic environment but considers that moderate deterioration is already reflected in current asset quality score of 'b'. Good Profitability Amid Increasing Impairment Charges: Findep continues to exhibit good profitability levels. As of March 2025, the four-year average remains consistent with a 'bbb-' factor score. Fitch expects this level to be sustained given Findep's plans to maintain loan growth while controlling operational and interest expenses, which may offset macroeconomic pressures. As of March 2025, the core ratio of pre-tax income to average assets was 8.2%. Low Tangible Leverage: Fitch estimates that tangible leverage will remain commensurate with the entity's current score of 'bb+' given its stable profit generation and sound capital base after the recent dividend payment and debt issuances. As of March 2025, the core metric of total debt to tangible equity was a low 1x incorporating AFIs recent securitization. Proactive Actions to Address Debt Maturities: Findep has taken several actions to address short-term debt and reduce financing costs, such as prepaying of an aggregate principal amount of USD39 million (52.7%) of the senior notes due March 2028, which feature a step-up to 12% in March 2026; issuing AFI's securitization (USD84.3 million) with an interest rate of 7.72% and a maturity in 2034. In addition, Findep issued senior notes with a three-year maturity on May 20, 2025, for a total amount of USD25 million and a coupon rate of 9.25%, which is lower than the coupon rate of the current senior notes. Increased Funding, Liquidity and Coverage Score: Fitch increased the score of funding, liquidity and coverage to 'bb' from 'bb-', based on an unsecured debt to total debt metric will remain close to 50% and liquidity coverage of short term debt that will remain adequate after dividend payments. As of March 2025, unsecured debt was 49.8% of total debt, and unrestricted cash covered short-term debt by around 18x. The expected metrics will remain within the current score and well above the triggers for a rating downgrade across the rating horizon. In Fitch's view, Findep's funding structure is exposed to market sentiment, given that around 64% of its total debt as of March 2025 is represented by issuances in international debt market. RATING SENSITIVITIES Factors that Could, Individually or Collectively, Lead to Negative Rating Action/Downgrade - A ratio of cash and undrawn committed credit facilities to short-term funding below 0.5x in a sustained manner, in conjunction with a significant reduction of unsecured debt portion consistently below 40% of total debt; - A weaker assessment of multijurisdictional SROE; - A significant asset quality deterioration, sustained and significant deterioration on profitability and tangible leverage ratios. Factors that Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade - If the entity improves its business profile significantly with a relevant increase of TNOI. The latter while maintains similar to recent metrics of profitability, tangible leverage, increased funding flexibility and a liquidity coverage above 1x. - A sustained improvement on asset quality with a significant reduction of charge-offs. DEBT AND OTHER INSTRUMENT RATINGS: KEY RATING DRIVERS Findep's global debt issuance rating is aligned with its IDR, reflecting average recovery prospects. DEBT AND OTHER INSTRUMENT RATINGS: RATING SENSITIVITIES The senior unsecured debt rating will mirror any changes to Findep's IDRs, or it could be downgraded below Findep's IDRs if the level of unencumbered assets substantially deteriorates, subordinating bondholders to other debt. SUBSIDIARY AND AFFILIATE RATINGS: KEY RATING DRIVERS Subsidiary Ratings: AEF national ratings are equalized to Findep's, driven by Fitch's opinion that the high integration and large relative size of the subsidiary support a group rating approach. As of March 2025, AEF accounted for close to 22.2% of Findep's consolidated assets after eliminations and plays a relevant role to the consolidated operation. As of December 2024, the company received a significant amount of its funding from related parties. SUBSIDIARY AND AFFILIATE RATINGS: RATING SENSITIVITIES AEF's national ratings will move in tandem with Findep's national ratings, which is consistent with the group rating approach. ADJUSTMENTS The Business Profile score has been assigned below the implied score due to the following adjustment reason(s): Business model (negative). The Asset Quality score has been assigned below the implied score due to the following adjustment reason(s): Loan charge-offs, depreciation or impairment policy (negative). The Earnings & Profitability score has been assigned below the implied score due to the following adjustment reason(s): Revenue diversification (negative). The Capitalization & Leverage score has been assigned below the implied score due to the following adjustment reason(s): Risk profile and business model (negative). The Funding, Liquidity & Coverage score has been assigned below the implied score due to the following adjustment reason(s): Funding flexibility (negative). Summary of Financial Adjustments Pre-paid expenses and other deferred assets were reclassified as intangibles and deducted from equity to reflect their low loss absorption capacity. Sources of Information Financial figures are in accordance with the CNBV criteria. 1Q25, 2024, 2023 and 2022 figures include recent accounting changes in the process to converge to International Financial Reporting Standards (IFRS). Prior years did not include this change and the agency believes they are not directly comparable Public Ratings with Credit Linkage to other ratings AEF's ratings are linked to Financiera Independencia's ratings. ESG Considerations Financiera Independencia, S. A. B. de C. V., Sociedad Financiera de Objeto Multiple, Entidad No Regulada has an ESG Relevance Score of '4' for Exposure to Social Impacts due to the fact that its business model (individual loans to unbanked, low-income segments) is exposed to shifts of consumer or social preferences or to measures that the government could take to increase financial inclusion, which has a negative impact on the credit profile, and is relevant to the rating[s] in conjunction with other factors. Financiera Independencia, S. A. B. de C. V., Sociedad Financiera de Objeto Multiple, Entidad No Regulada has an ESG Relevance Score of '4' for Customer Welfare - Fair Messaging, Privacy & Data Security due to the fact that its business model has high lending rates to unbanked, lower income segments of the population, exposing Findep to relatively high regulatory, legal and reputational risks, which has a negative impact on the credit profile, and is relevant to the rating[s] in conjunction with other factors. The highest level of ESG credit relevance is a score of '3', unless otherwise disclosed in this section. A score of '3' means ESG issues are credit-neutral or have only a minimal credit impact on the entity, either due to their nature or the way in which they are being managed by the entity. Fitch's ESG Relevance Scores are not inputs in the rating process; they are an observation on the relevance and materiality of ESG factors in the rating decision. Entity/Debt Rating Prior ----------- ------ ----- Financiera Independencia, S. A. B. de C. V., Sociedad Financiera de Objeto Multiple, Entidad No Regulada LT IDR BB Upgrade BB- ST IDR B Affirmed B LC LT IDR BB Upgrade BB- LC ST IDR B Affirmed B Natl LT A(mex) Upgrade A-(mex) Natl ST F1(mex)Upgrade F2(mex) senior unsecured LT BB Upgrade BB- Apoyo Economico Familiar S. A. de C. V., Sociedad Financiera de Objeto Multiple, E. N. R. Natl LT A(mex) Upgrade A-(mex) Natl ST F1(mex)Upgrade F2(mex) LEISURE INVESTMENTS: Committee Taps Force Ten as Financial Advisor ------------------------------------------------------------------ The official committee of unsecured creditors of Leisure Investments Holdings, LLC and its affiliates seeks approval from the U.S. Bankruptcy Court for the District of Delaware to employ Force Ten Partners, LLC as financial advisor. The firm will render these services: (a) review and analyze the Debtors' financial information, including cash flow projections, budgets, cash receipts and disbursement analysis, asset and liability analysis, economic analysis of proposed transactions requiring Court approval, and other related financial materials; (b) analyze debtor-in-possession financing arrangements; (c) assist in reviewing reports or filings required by the Bankruptcy Court or the U.S. Trustee (e.g., schedules of assets and liabilities, statements of financial affairs, initial and monthly operating reports); (d) evaluate potential employee incentive, retention, and severance plans; (e) identify potential cost-containment opportunities; (f) identify asset redeployment opportunities; (g) evaluate reorganization strategies and alternatives available to creditors; (h) evaluate proposed asset sales; (i) review and analyze the Debtors' capital structure; (j) prepare enterprise, asset, and liquidation valuations; (k) review and/or prepare information and analyses necessary for plan confirmation; (l) evaluate and analyze avoidance actions, including fraudulent conveyances, preferential transfers, and other actions; (m) advise and assist the Committee in negotiations and meetings with the Debtors, potential buyers, secured lenders, the U.S. Trustee, other stakeholders, and their professionals; (n) attend meetings, teleconferences, and depositions on behalf of the Committee; (o) assist in prosecuting Committee responses/objections to the Debtors' motions, including providing expert reports/testimony as required; (p) assist with claims-resolution procedures, including analyses of creditors' claims by type, entity, and associated recoveries; (q) provide litigation consulting services and expert witness testimony on confirmation issues, avoidance actions, or other relevant matters; and (r) perform other general business consulting or related financial advisory functions, as requested by the Committee or its counsel, provided these services are consistent with the role of a financial advisor. The firm's customary hourly rates are: Partners $890 to $990 Managing Directors $595 to $795 Directors and Senior Associates $500 to $580 Associates and Staff $240 to $520 Force Ten Partners is a "disinterested person" as that term is defined in section 101(14) of the Bankruptcy Code; and does not hold or represent any interest adverse to the Debtors' estates, according to court filings. Force 10 Partners can be reached through: Adam Meislik FORCE 10 PARTNERS 5271 California Suite 270 Irvine, CA 92617 Tel: (949) 357-2364 Email: nrubin@force10partners.com About Leisure Investments Holdings Leisure Investments Holdings LLC and affiliates are operating under the name "The Dolphin Company," manage over 30 attractions, including dolphin habitats, marinas, water parks, and adventure parks, located in eight countries across three continents. Their primary operations are based in Mexico, the United States, and the Caribbean, with locations in Jamaica, the Cayman Islands, the Dominican Republic, and St. Kitts. These attractions are home to approximately 2,400 animals from more than 80 species of marine life, including a variety of marine mammals such as dolphins, sea lions, manatees, and seals, as well as birds and reptiles. As of 2023, the marine mammal population at the Debtors' parks includes roughly 295 dolphins, 51 sea lions, 18 manatees, and 18 seals. Leisure Investments Holdings LLC sought relief under Chapter 11 of the U.S. Bankruptcy Code (Bankr. D. Del. Lead Case 25-10606) on March 31, 2025. In its petition, the Debtor reports estimated assets and liabilities between $100 million and $500 million each. Honorable Bankruptcy Judge Laurie Selber Silverstein handles the case. The Debtors tapped Young Conaway Stargatt & Taylor, LLP as counsel; Riveron Management Services, LLC as restructuring advisor; and Kurtzman Carson Consultants, LLC d/b/a Verita Global, as claims & noticing agent. ======= P E R U ======= ORAZUL ENERGY: S&P Withdraws 'BB-' LongTerm Issuer Credit Rating ---------------------------------------------------------------- S&P Global Ratings withdrew its 'BB-' long-term issuer credit and issue ratings on Orazul Energy Peru at the issuer's request. Orazul's financial performance remained in line with its expectations at the time of the withdrawal. The outlook was stable. ********* 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 * * *