250704.mbx

250704.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 Friday, July 4, 2025, Vol. 26, No. 133 Headlines B E R M U D A BERMUDA: DBRS Warns of Risks During Ratings Upgrades C H I L E CHILE: IDB OKs $50MM to Revitalize Heritage Neighborhoods C O L O M B I A CARDIF COLOMBIA: S&P Lowers ICR to 'BB+', Outlook Negative ECOPETROL SA: S&P Lowers ICR to 'BB', Outlook Negative PACIFICO TRES: Fitch Affirms BB+ Rating on Revenue Bonds [] S&P Lowers Ratings on 5 Colombian Finc'l. Institutions [] S&P Takes Actions on 7 Colombian Infrastructure Entities E L S A L V A D O R EL SALVADOR: IMF Approves SDR86-MM Release Under 40-Month EFF Deal H O N D U R A S BANCO ATLANTIDA: Fitch Hikes LongTerm IDRs to 'B+', Outlook Stable J A M A I C A EDUFOCAL: Terminates Partnership With Signature and Creed Associate JAMAICA: Successfully Reduced Public Debt, IMF Says M E X I C O ASCEND PERFORMANCE: Committee Hires Ducera as Investment Banker ASCEND PERFORMANCE: Committee Taps Brown Rudnick LLP as Co-Counsel - - - - - ============= B E R M U D A ============= BERMUDA: DBRS Warns of Risks During Ratings Upgrades ---------------------------------------------------- David Fox at Royal Gazette reports that a rating agency has highlighted some potential economic uncertainties facing Bermuda, including issues around corporate income tax. During a somewhat positive outlook on Bermuda's credit worthiness, the report from Morningstar DBRS raised concerns for the medium term, according to Royal Gazette. It said: "Bermuda faces several downside risks to growth. The new corporate income tax may reduce Bermuda's attractiveness as an insurance/reinsurance hub, the report notes. "However, this risk is mitigated by Bermuda's advanced regulatory framework with equivalence in the US and the EU, its knowledgeable workforce and high level of competition spurring innovation, all of which are compelling factors for the insurance industry to remain in Bermuda, the report relays. "In addition, Bermuda faces an ageing and shrinking population, which is coupled with emigration of the educated workforce, which could stress future healthcare expenditures and pensions, the report notes. "Rising costs of living could also affect affordability for residents and contribute to higher labour costs, thereby reducing the competitiveness of the tourism and international business sectors," the report discloses. Morningstar DBRS had that, and more, to say as it upgraded Bermuda's long-term foreign and local currency-issuer ratings to A (high) from "A", and upgraded Bermuda's short-term foreign and local currency-issuer ratings to R-1 (middle) from R-1 (low), the report notes. The trend on all ratings have returned to stable from positive, the report says. David Burt, the Premier and Minister of Finance, welcomed the upgrade, calling it "a strong vote of confidence in Bermuda's economic strategy, fiscal discipline and the resilience of our people," the report relays. The agency said the new corporate income tax would provide a boost to fiscal revenues in the near term, with initial payments expected in August, the report relays. The report discloses that Morningstar DBRS said: "According to the Government's conservative estimates, Bermuda could receive $600 million annually in corporate tax receipts (a little over 6 per cent of 2024 gross domestic product). "However, uncertainties remain around the CIT, such as the scale of receipts, potential offsetting tax credits and the broader planned tax reform. Additionally, government revenues are increasingly reliant on the international business sector," the report notes. The easing of the tax burden on those on lower incomes has increased the share borne by high-income earners, generally employed by the international business sector, the report relays. The report warns it could leave public finances vulnerable should the sector decline or relocate to another jurisdiction, Royal Gazette notes. While the Government's gross debt as a share of revenues is expected to decline, there are still substantial contingent liabilities in the form of government guarantees to commercial projects, which amount to $920 million (10 per cent of GDP), Royal Gazette discloses. The report said: "Of the remaining guarantees, the Bermuda Hospitals Board is the most significant ($697 million, around 7 per cent of GDP), although there are also two hotel development projects covered as well, Royal Gazette relays. "These factors underpin our negative qualitative adjustment to the 'debt and liquidity' building block assessment," Royal Gazette relays. Bermuda's robust growth outlook and steady improvement in public finances have strengthened its credit quality, Royal Gazette discloses. Key credit rating considerations from Morningstar DBRS include the strong economic growth post-pandemic, a strong performance in the international business sector and a steadily recovering tourism industry, Royal Gazette says. The report said: "Bermuda's fiscal deficit has declined from an average of 3.5 per cent of gross domestic product between fiscal year 2012-2013 to fiscal year 2016-2017, to an average of 0.4 per cent over the last four years," Royal Gazette relays. "The Government is expected to improve upon the balanced budget in 2024-2025, the first in two decades, to reach a small surplus of 0.4 per cent in 2025-2026. The public debt ratio has gradually declined to 35 per cent of GDP in 2024, after peaking at 46 per cent in 2020," Royal Gazette discloses. Royal Gazette relays Mr. Burt said: "Through carefully targeted reforms and sustained fiscal discipline, we have laid the foundation for sustained growth." The agency said public finances would be supported by new corporate income tax revenues, with the Government's conservative estimates of full-year receipts reaching around 6 per cent of GDP in 2026-27 and the new revenue enhancing the Government's financing flexibility, Royal Gazette relays. The report said: "The credit rating action reflects improvements in the ‘debt and liquidity' building block. Furthermore, the Government's prudent medium-term fiscal strategy with regards to corporate income tax receipts should aid the country in diversifying the economy, responding to ageing demographics and rising healthcare costs, and managing the effects of climate change, Royal Gazette notes. "Bermuda's A (high) credit ratings are supported by the country's high GDP per capita, strong fiscal track record and stable political environment, Royal Gazette notes. "Per capita income in Bermuda is among the highest in the world, in part due to its outsized role in the global insurance/reinsurance sector. Effective public institutions, stable domestic politics and a legal system based on English common law all increase Bermuda's attractiveness as an international financial center, Royal Gazette relays. "The two major parties, the Progressive Labour Party and the One Bermuda Alliance, broadly agree on the direction of macroeconomic policies, Royal Gazette discloses. "In Morningstar DBRS's view, these strengths counterbalance the credit challenges associated with the country's very small and relatively concentrated economy, as well as its limited monetary flexibility due to the pegged exchange rate." The company's credit rating rationale includes the expectation that the island's strong fiscal performance is expected to continue, aided by high projections of corporate income tax receipts, Royal Gazette adds. ========= C H I L E ========= CHILE: IDB OKs $50MM to Revitalize Heritage Neighborhoods --------------------------------------------------------- The Inter-American Development Bank (IDB) approved a $50 million financing package to support Chile's efforts to revitalize emblematic heritage neighborhoods and promote safe, inclusive urban infrastructure. The package includes a $45 million loan and a $5 million non-reimbursable grant from the IDB's Grant Facility, aimed at supporting countries experiencing large and sudden intraregional migration inflows. The program will support the safe and inclusive revitalization and management of emblematic heritage neighborhoods by enhancing municipalities' technical and management capacities, supporting municipalities in project planning, interagency coordination, and inclusive governance. It will promote economic reactivation and sociocultural integration in these neighborhoods, benefiting local and migrant populations by financing community-based initiatives and integration programs. These migrant inclusion efforts are specifically supported by the program's non-reimbursable grant. Chile is one of the countries in the region that has received the largest inflow of migrants over the last 10 years. The program will also rehabilitate heritage and urban infrastructure, considering migration, environment, security, and social aspects, investing in safe, accessible, resilient public spaces and heritage assets. The initiative will directly benefit over 124,000 residents and business owners across 18 neighborhoods, including nearly 21,000 migrants. Indirectly, it is expected to impact more than 4.1 million people living or working in these areas. This is Chile's second operation supported by the IDB's Grant Facility for migration, reinforcing the country's commitment to inclusive urban policies that respond to demographic shifts and social challenges. The $45 million IDB loan has a 25-year repayment term, a 5.5-year grace period, and an interest rate based on SOFR. As reported in the Troubled Company Reporter in August 2024, Fitch Ratings affirmed Colombia's Long-Term Foreign Currency Issuer Default Rating (IDR) at 'BB+' with a Stable Rating Outlook. =============== C O L O M B I A =============== CARDIF COLOMBIA: S&P Lowers ICR to 'BB+', Outlook Negative ---------------------------------------------------------- S&P Global Ratings lowered the issuer credit and financial strength ratings on Cardif Colombia Seguros Generales S.A. to 'BB+' from 'BBB-'. The outlook is negative. On June 26, 2025, S&P Global Ratings lowered its sovereign credit ratings on Colombia because a steady deterioration of its fiscal results has decreased investor confidence, weakened economic performance, and raised government debt and interest burden. The outlook on Colombia remains negative. S&P said, "The rating action on Cardif Colombia follows a similar action on Colombia, where the company's operations are based. Our ratings and outlook on Cardif Colombia reflect our views of its intrinsic credit profile and the influence of the sovereign ratings. Typically, our foreign currency rating on the country of domicile limits our ratings on strategically important insurance subsidiaries of international groups, such as Cardif Colombia, if we don't think they would withstand a sovereign default scenario on their own. Cardif Colombia passes our sovereign stress test in foreign currency because of its high capitalization and liquidity, which will enable it to withstand shocks better than other domestic insurers. As a result, we rate Cardif Colombia above the 'BB' foreign currency rating on Colombia. "However, we don't think the company would withstand a sovereign default in the country's local currency-denominated obligations, given deeper adverse effects on the economy and on Cardif Colombia's investment portfolio in such a scenario. Therefore, the local currency rating on Colombia limits the ratings on the insurer. Thus, the recent action on the sovereign local currency rating results in the same action on Cardif Colombia." The downgrade of Colombia reflects the combination of large fiscal deficits and weak economic performance, which has worsened the sovereign's public finances and increased its vulnerability to external shocks. Expansive government primary spending, a growing interest burden, and lower-than-expected revenue collections have caused it to significantly miss fiscal targets and to post large deficits since 2024. Fiscal policy has also become less predictable, as highlighted by the government's recent decision to suspend the country's fiscal rule for three years. The outlook on Colombia remains negative, reflecting the risk that steady fiscal deterioration could persist over several years alongside the country's heightened security challenges, further worsening its financial profile. Concerns about the long-term trajectory of fiscal policy could hurt investor sentiment and contribute to poor economic performance. S&P said, "We expect Cardif Colombia will maintain its solid intrinsic creditworthiness in the next few years, while its SACP remains at 'bbb'. The company benefits from a robust competitive position across its major business lines, thanks to its successful bancassurance-like model, ability to build value for its major commercial partners, and favorable profitability prospects. In addition, we expect the company's capitalization and liquidity to remain satisfactory in the next two years. "The negative outlook on Cardif Colombia mirrors that on the local currency sovereign rating. The latter limits the rating on the insurer because we don't believe it could withstand a hypothetical sovereign default on the country's local-currency-denominated obligations, given the company's large asset concentration in Colombia. "We could downgrade Cardif Colombia in the next 12 months if we were to lower the local currency rating on Colombia. We could also downgrade Cardif Colombia to the foreign currency sovereign rating level if we think the company's capital and liquidity buffers are insufficient to withstand a sovereign default scenario in foreign currency. "We could revise the outlook on Cardif Colombia to stable if we were to take the same action on our local currency rating on Colombia, while all other credit factors for the insurer are unchanged, including its ability to pass our sovereign stress test in foreign currency." ECOPETROL SA: S&P Lowers ICR to 'BB', Outlook Negative ------------------------------------------------------ S&P Global Ratings lowered its issuer credit and issue-level ratings on Ecopetrol S.A. to 'BB' from 'BB+', while its stand-alone credit profile (SACP) remains at 'bb+'. The negative outlook on Ecopetrol continues to reflect that on Colombia. On June 26, 2025, S&P Global Ratings lowered its long-term foreign currency sovereign credit rating on Colombia to 'BB' from 'BB+' and local currency to 'BB+' from 'BBB-' because of delayed improvements on the sovereign fiscal deficit. S&P's ratings on Ecopetrol S.A. remain capped by the sovereign rating based on its relevance in Colombia's revenue generation, government-related entity status, and very important role in the country's energy transition. Deterioration of Colombia's fiscal results has contributed to weaker economic performance, higher level of government debt and interests, while also lowering confidence for foreign investments. Our ratings on Colombia capture its limited fiscal flexibility, high debt burden, weak external position (including its volatile terms of trade), and moderate GDP per capita. The combination of large fiscal deficits and weak economic performance has worsened Colombia's public finances and increased its vulnerability to external shocks. Expansive government primary spending, a growing interest burden, and lower-than-expected revenue collections have caused it to significantly miss fiscal targets and post large deficits since 2024. Fiscal policy has also become less predictable, as highlighted by the government's recent decision to suspend the country's fiscal rule for three years. S&P said, "Our rating on Ecopetrol moves in tandem with the rating on Colombia. We think the likelihood that the Colombian government would provide timely and sufficient extraordinary support to the company under a stress scenario is very high. We base our view on Ecopetrol's strong link with the government, given its 88.49% ownership of the company, and Ecopetrol's very important role as Colombia's leading oil and gas producer. We cap our ratings on Ecopetrol at the same level as the foreign currency sovereign credit rating (BB/Negative/B) because of the company's connection with the government and potential for extraordinary negative government intervention. "We expect Ecopetrol will maintain consistency in both leverage and profitability while achieving its growth prospects. Our base-case scenario for the next two years expects leverage to remain around 2.0-2.5x and EBITDA margins at about 40%. Our assumed credit metrics already take into account Ecopetrol's emphasis on increasing production and reserves, operating refineries at more than 90% of installed capacity, and the 2040 strategy aimed at enhancing the share of renewable energy sources. "The negative outlook on Ecopetrol continues to reflect the negative outlook on Colombia. We expect Ecopetrol to continue playing a very important role in the Colombian economy and maintain a very strong link with the government. Therefore, our ratings on Ecopetrol will most likely move in tandem with those on the sovereign. "We could lower the ratings on Ecopetrol in the next 12 months if we downgrade Colombia." S&P could revise down its SACP in the next 12 months if: -- S&P said, "The company's financial performance weakens such that we expect its adjusted net debt to EBITDA to consistently rise close to 3.0x. This could stem from lower prices, weaker production sales, and/or increased debt beyond our expectations;" -- S&P perceives weaker business for Ecopetrol if it posts declines in production or replacement ratios below 100%; or -- Ecopetrol prioritizes cash outflows as dividends rather than for maintenance and growth capital expenditures (capex). S&P could revise the outlook to stable on Ecopetrol if it was to take a similar action on the foreign currency sovereign credit rating on Colombia. Although unlikely in the next 12-18 months, S&P could revise up the SACP to 'bbb-' if the company's operating and financial performance is well above its expectations. This scenario could result if: -- Ecopetrol has higher-than-expected production stemming from investments in Colombia and/or international fields; -- The company has debt-to-EBITDA ratios below 2.0x, while improving profitability margins despite price volatility; -- Ecopetrol improves cash flows after capex and dividends, leading to discretionary cash flow to debt at or above 15%; or -- There are more independent board members and the company improves board member turnover. PACIFICO TRES: Fitch Affirms BB+ Rating on Revenue Bonds -------------------------------------------------------- Fitch Ratings has affirmed the ratings of the following debt instruments of Fideicomiso P.A. Pacifico Tres (Pacifico Tres) at 'BB+' with a Negative Rating Outlook: - USD260.4 million USD bonds; - COP397,000 million UVR bonds; - COP300,000 million UVR loan. In addition, Fitch has upgraded the national scale ratings of the following instruments to 'AAA(col)' from 'AA+(col)': - COP397,000 million UVR bonds; - COP300,000 million UVR loan; - COP450,000 million COP loan A and B; - COP150,000 million COP loan C. The Outlook on the national ratings is Stable, and the Rating Watch Positive has been removed. RATING RATIONALE These rating actions reflect that the credit quality of the notes is now consistent with the highest rating on the national scale. Although completion risk had been mitigated since Fitch's last review, the new shareholders were still required to provide operating and maintenance (O&M) support as stipulated in the financing documents. This requirement has now been fulfilled through the issuance of two letters of credit (LOCs) totaling COP40.2 billion by Bancolombia on June 19, 2025. These LOCs are to be maintained until the project's completion date. The establishment of this guarantee was contingent upon the completion of the concession sale, which was acquired by Rodovías España S.L.U. and MC Victorias Tempranas S.A.S. Fitch considers that the O&M support strengthens the project's capacity to meet its operational obligations, given that the cash flows and the 12-month O&M reserve already provide sufficient liquidity to cover operational expenses. The ratings are based on Pacifico Tres' low revenue risk due to traffic top-ups and grantor payments, a strong debt structure with several prefunded reserve accounts, distribution tests, a cash sweep mechanism and robust liquidity mechanisms. Under Fitch's rating case, Pacifico Tres has a loan life coverage ratio (LLCR) of 1.5x. This is strong for the rating category according to applicable criteria and revenue profile, but it is limited by the credit quality of Agencia Nacional de Infraestructura (ANI). Fitch views ANI as a credit-linked entity to the Government of Colombia (BB+/Negative). KEY RATING DRIVERS The key rating factors assigned are the same as in the previous review. For more details, please see the press release "Fitch Affirms Pacifico Tres' USD and UVR Notes at 'BB+'; Places National Ratings on Watch Positive" dated Nov. 21, 2024. RATING SENSITIVITIES Factors that Could, Individually or Collectively, Lead to Negative Rating Action/Downgrade - Deterioration in the financial and/or operational performance of the project, leading to a minimum projected loan life coverage ratio (LLCR) below 1.3x under Fitch's rating case assumptions; - Deterioration in Fitch's view of the credit quality of ANI's grantor obligations. Factors that Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade - For the international scale ratings, an improvement in Fitch's view of the credit quality of ANI's grantor obligations. SECURITY The secured parties benefit from a first-priority security interest in, control over, and lien on all the issuer rights in the indenture trustee accounts and the funds, financial assets and other properties deposited and to be deposited in such accounts. Senior lenders share common collateral on a pari passu basis in relation to all current and future debt of the project company. All proceeds from the collateral will be paid to the intercreditor agent who, in turn, will distribute the monies to the secured parties. None of the parties will have the right to take independent enforcement in respect to the common collateral. 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 ----------- ------ ----- Fideicomiso P.A. Pacifico Tres Fideicomiso P.A. Pacifico Tres/ Project Revenues – First Lien/1 LT LT B B+ Affirmed BB+ Fideicomiso P.A. Pacifico Tres/ Project Revenues – First Lien/1 Natl LT Natl LT AAA(col) Upgrade AA+(col) [] S&P Lowers Ratings on 5 Colombian Finc'l. Institutions --------------------------------------------------------- S&P Global Ratings, on June 27, 2025, lowered its long- and short-term issuer credit ratings on the following Colombian financial entities and subsidiaries, and maintained a negative outlook: -- Grupo Cibest S.A., its Colombian core subsidiary Bancolombia S.A. y Companías Subordinadas (Bancolombia) and its Panama-based core subsidiaries Banistmo S.A. and Bancolombia Panama S.A. -- Banco de Bogota S.A. y Subsidiarias (BdBogota); -- Banco Davivienda S.A. (Davivienda); -- Financiera de Desarrollo Territorial S.A. (Findeter); and -- Financiera de Desarrollo Nacional S.A. (FDN). At the same time, S&P affirmed its 'B-/B' ratings on Banco Agricola S.A., Cibest's core Salvadorian subsidiary. The outlook on the entity is stable. On June 26, 2025, S&P Global Ratings lowered its long-term foreign currency sovereign credit rating on Colombia to 'BB' from 'BB+' and its local currency sovereign credit rating to 'BB+' from 'BBB-'. The outlook is negative, indicating the risk of a downgrade in the next 18 months, absent timely and effective measures to stabilize Colombia's fiscal accounts and debt level while it sustains its GDP growth. S&P said, "As a result, we downgraded six Colombian commercial financial institutions and two government-owned banks, and maintained the negative outlook on them. This is because we don't rate Colombian financial institutions above the foreign currency sovereign ratings due to the direct and indirect effects sovereign stress would have on the entities' business operations and creditworthiness. "In addition, we kept our Banking Industry Country Risk Assessment (BICRA) on Colombia unchanged at group '6', along with the economic and industry risk scores of '7' and '5', respectively. Therefore, the anchor for financial institutions operating mainly in Colombia remained unchanged at 'bb+'. "Nevertheless, we revised our trend on the economic and industry risks in the BICRA to negative from stable. This was based on concerns over the sovereign's fiscal accounts and weak investor sentiment, which might harm the banking system's loan book performance. We also believe these factors, coupled with the challenging operating conditions for the banking industry, could continue eroding its profitability for the next two years." Rationale The sovereign rating action to 'BB' from 'BB+' stems from large fiscal deficits and weak economic performance that have worsened Colombia's public finances and increased its vulnerability to external shocks. In S&P's view, the risk that steady fiscal deterioration in Colombia could persist over several years, which along with heightened security challenges, will further worsen the sovereign's financial profile. Concerns about the long-term trajectory of fiscal policy could hurt investor sentiment and contribute to poor economic performance. Likewise, expansive government primary spending, a growing interest burden, and lower-than-expected revenue collections have caused Colombia to significantly miss fiscal targets and post large deficits since 2024. In this regard, fiscal policy has also become less predictable, as highlighted by the government's recent decision to suspend the country's fiscal rule for three years. The outlook on the sovereign ratings is negative, indicating the risks of a downgrade in the next 12-18 months if the government fails to take effective and timely measures to stabilize fiscal accounts and debt level, while also sustaining GDP growth. A continuation of wide fiscal deficits could dampen investor confidence and reduce GDP growth prospects. S&P said, "As a result, we're downgrading six Colombian financial entities to 'BB' from 'BB+' and maintained a negative outlook on them. We're downgrading Cibest and its subsidiaries (Bancolombia, Bancolombia Panama, and Banistmo), BdBogota, and Davivienda. This is because we don't rate Colombian financial institutions above the foreign currency sovereign ratings due to the direct and indirect effects sovereign stress would have on banks' business operations and creditworthiness." The ratings on the government-related entities Findeter and FDN benefit from the sovereign support and thus move in tandem with the ratings on Colombia. BICRA S&P said, "We revised our trend on the economic and industry risks to negative from stable. We kept the BICRA scores, group, and anchor unchanged (please see the table). On the other hand, we believe that worsening fiscal deficits and weak economic performance have amplified the economic resilience risks that the banking system will face going forward. We believe the uncertainty over Colombia's fiscal and debt accounts could erode public finances and the country's external position. If debt level continues to grow due to persistently wide fiscal deficits, the sovereign could maintain a restrictive monetary policy, harming its growth prospects. "In our view, if these potential risks become a structural downshift in economic growth, they could also dent credit expansion and increase pressure on the financial system's performance during 2025 and 2026. We believe these factors could also harm the banking system's profitability and asset quality indicators, which are currently weaker than historical levels despite a modest recovery since the second half of 2024. "We expect Colombian banks' credit growth of 2.0%-2.5% in real terms for 2025-2026. We also forecast challenges in improving their margins, especially due to the interest-rate cap in the country that banks can charge for their loans--it has decreased from 47% to 25% in the last two years--and banks' strategy to increase the volume of fixed-rate loans, such as mortgages. In addition, we forecast banks' cost of risk--measured as new loan-loss provisions to average customer loans--to remain above historical levels, at about 2.8%. This, coupled with a relatively rigid cost structure, will keep profitability below its historical level for the next two years. "If one of these risks arises in the next 12 months, we could revise our economic risk and/or industry risk score(s). This would lower the anchor for banks operating mainly in Colombia to 'bb' from 'bb+', reflecting weakening economic resilience and/or worsening competitive dynamics." Cibest Outlook S&P said, "The negative outlook on Cibest mirrors our negative outlook on Colombia. Likewise, the negative outlooks on its subsidiaries Bancolombia, Banistmo, and Bancolombia Panama mirror the outlook on Cibest. The ratings on these subsidiaries will move in tandem with those on their parent because we consider them integral to the group's operations and strategy." Downside scenario S&P said, "If we downgrade Colombia in the next 12 months, we could take the same action on Cibest's consolidated credit profile, and therefore on the ratings on its subsidiaries Bancolombia, Bancolombia Panama, and Banistmo. Likewise, we could take a negative rating action if Cibest's consolidated risk-adjusted capital (RAC) ratio falls below 3% or if its nonperforming asset ratio deteriorates beyond our expectations, prompting us to revise down our group credit profile. Additionally, we could downgrade Cibest if its double leverage ratio increases above 120% in the next 12 months." Upside scenario If S&P revises the outlook on Colombia to stable in the next 12 months, it would take the same action on Cibest and its subsidiaries Bancolombia, Banistmo, and Bancolombia Panama. BdBogota And Davivienda Outlook The negative outlook for the next 12-18 months on Davivienda and BdBogota mirrors that on Colombia. Downside scenario S&P could lower the ratings on both entities if it downgrades the sovereign in the next 12-18 months. Upside scenario S&P could revise its outlook on both entities to stable if S&P was to take the same rating action on the sovereign. Findeter S&P said, "Following the abovementioned actions, we also revised our assessment of Findeter's capital and earnings to adequate from strong. This is because the downgrade of Colombia increased the bank's risk-weighted assets, weakening its projected RAC ratio below 10%, a level consistent with the adequate category. The change in the capital and earnings assessment prompted us to revise downward the bank's stand-alone credit profile (SACP) to 'bb' from 'bb+'. The bank's all other SACP factors remained unchanged." Outlook The negative outlook on Findeter for the next 12-18 months reflects the negative outlook on Colombia. Therefore, the ratings on Findeter will continue to move in tandem with those on the sovereign, reflecting the entity's key role for--and very strong link to--the government, as Findeter provides funding to the domestic infrastructure sector. Downside scenario S&P could lower the ratings on the entity if it downgrades Colombia in the next 12-18 months. Upside scenario S&P could revise the outlook on Findeter to stable in the next 12-18 months if it was to take the same action on Colombia. FDN Outlook The negative outlook on FDN for the next 12-18 months reflects the negative outlook on Colombia. The ratings on FDN will continue to move in tandem with those on the sovereign, reflecting the entity's key role for--and very strong link to--the government, given FDN's funding of large infrastructure projects in the country. Downside scenario S&P could lower the ratings on the entity if it downgrades Colombia in the next 12-18 months. Upside scenario S&P could revise the outlook on FDN to stable in the next 12-18 months if it was to take the same action on Colombia. Colombia BICRA To From BICRA group 6 6 Economic risk 7 7 Economic resilience Very high risk High risk Economic imbalances High risk High risk Credit risk in the economy High risk High risk Trend Negative Stable Industry risk 5 5 Institutional framework Intermediate risk Intermediate risk Competitive dynamics Intermediate risk Intermediate risk Systemwide funding High risk High risk Trend Negative Stable Ratings list Banco Davivienda S.A. Downgraded To From Banco Davivienda S.A. Issuer Credit Rating BB/Negative/B BB+/Negative/B Banco de Bogota S.A. y Subsidiarias Downgraded To From Banco de Bogota S.A. y Subsidiarias Issuer Credit Rating BB/Negative/B BB+/Negative/B Senior Unsecured BB BB+ Bancolombia S.A. y Companias Subordinadas Downgraded To From Bancolombia S.A. y Companias Subordinadas Bancolombia Panama S.A. Banistmo S.A. Issuer Credit Rating BB/Negative/B BB+/Negative/B Foreign Currency BB/Negative/B BB+/Negative/B Ratings Affirmed Banco Agricola S.A. Issuer Credit Rating B-/Stable/B Foreign Currency B-/Stable/B Financiera de Desarrollo Nacional S.A. Downgraded To From Financiera de Desarrollo Nacional S.A. Issuer Credit Rating BB/Negative/-- BB+/Negative/-- Financiera de Desarrollo Territorial S.A. FINDETER Downgraded To From Financiera de Desarrollo Territorial S.A. FINDETER Issuer Credit Rating BB/Negative/B BB+/Negative/B Grupo Cibest S.A. Downgraded To From Grupo Cibest S.A. Issuer Credit Rating BB-/Negative/B BB/Negative/B [] S&P Takes Actions on 7 Colombian Infrastructure Entities ----------------------------------------------------------- S&P Global Ratings took various rating actions on Colombian infrastructure entities following its downgrade of the sovereign. On June 26, 2025, S&P lowered the long-term foreign currency sovereign credit rating on Colombia to 'BB' from 'BB+' and the long-term local currency rating to 'BB+' from 'BBB-'. The outlook on the long-term ratings is negative. S&P's ratings on Colombia capture its limited fiscal flexibility, high debt burden, weak external position (including its volatile terms of trade), and moderate GDP per capita. The combination of large fiscal deficits and weak economic performance has worsened Colombia's public finances and increased its vulnerability to external shocks. Expansive government primary spending, a growing interest burden, and lower-than-expected revenue collections have caused it to significantly miss fiscal targets and post large deficits since 2024. S&P said, "Following the sovereign rating action, we took rating actions on Isagen, Ocensa, Termocandelaria, and A.I. Candelaria's debt. These entities remain exposed to Colombia given that they operate in what we perceive as highly regulated sectors (dependent on rate or tariff adjustments approved by local regulators) and demand for their services is in some cases correlated to the country's GDP growth. Consequently, we believe the entities could suffer from heavier regulation in a sovereign stress scenario and wouldn't generate or maintain sufficient cash to honor their financial obligations. "Isagen sells about 25% of its energy to distributors in Colombia, which have their rates set by the regulator. Therefore, we believe payments to the company could weaken in case of regulatory or political interference in distributors' rates. Moreover, Isagen sells a portion of its energy output on the spot market, which we believe could also be at its regulatory floor amid sovereign stress. As a consequence, the sovereign rating on Colombia continues to cap the rating on Isagen. "We took a similar rating action on Ecopetrol and, therefore, on its subsidiary Ocensa, because we continue to view it as core to the parent and we don't believe there are meaningful regulatory mechanisms or other structural barriers that restrict the parent from accessing Ocensa's cash flows in a stress scenario. Moreover, Ecopetrol is Ocensa's main client, representing the bulk of volumes transported and revenue. "We also lowered the issue-level rating on A.I. Candelaria Spain's debt to 'B' from 'B+'. This is because we continue to incorporate the subordination to, and reliance on, dividend payments from its operating subsidiary, Ocensa, which distributes them after funding its operating and financial needs. "Furthermore, we revised the rating outlook on Termocandelaria to negative from stable. This is because the company has exposure to local distributors as well as spot prices in the country. In this context, we believe the entity's cash generation and leverage metrics could be dampened by the regulator's intervention in setting tariffs or prices in a sovereign stress scenario. "We also revised the outlooks to negative on entities that generate a relevant portion of their cash flow in Colombia but due to operations in other investment-grade countries could withstand a sovereign stress. Our analysis of Enel Americas incorporates our expectation of financial support from the parent company -- Enel SpA (BBB/Stable/A-2) -- even under the scenario of a sovereign default. It also considers the company's exposure to Brazil (50% of first-quarter 2025 EBITDA) and Colombia (41%), speculative-grade countries with macroeconomic, regulatory, and political risks. The rating incorporates the group's sensitivity to sovereign risks and the potential we see for a deterioration of weighted country risk if we downgrade Colombia and/or we expect higher contributions from the assets in Argentina. These risks are reflected in the negative outlook on Enel Americas. "We equalize the ratings on Enel Colombia to those on controlling shareholder Enel Americas, since we believe the company is integral to the group's identity and strategy and should receive parental support under any foreseeable circumstances. This view allowed us to rate Enel Colombia a maximum of two notches above the sovereign foreign currency rating. Therefore, the negative outlook reflects a potential downgrade following the same action on Colombia, while all other factors are unchanged. "Furthermore, we affirmed our ratings on Enfragen's debt but revised the outlook to negative. The project has a portfolio of 23 power assets totaling 2.1 gigawatts (GW) of installed capacity, using multiple technologies located in Chile, Colombia, Panama, and Costa Rica. Despite our expectation that the project will generate about 50% of its EBITDA in Colombia, we expect it will withstand a sovereign stress, as indicated by a cash-sources-to-uses ratio under a hypothetical sovereign stress scenario that remains above 1x. This is given the remaining cash flow from Chile and Panama, proceeds from the debt reserve accounts totaling $50 million in the form of the first demand letter of credit, an $8 million additional cash-funded debt service reserve account, $15 million of sweep funding, and the $10 million operations and maintenance account. We also consider that all remaining cash flows from operations are deposited in offshore accounts--in the co-issuers' accounts in Chile and Spain--compensating for foreign exchange conversion risk. Still, if we downgrade Colombia again, we expect Enfragen to follow the same path, due its high sensitivity and our belief that the maximum differential with Colombia is two notches." Outlooks S&P said, "The negative outlook on Isagen mirrors that on Colombia. Additionally, we expect Isagen to maintain its conservative commercial strategy, with most of its output sold through contracts and the rest exposed to hydrological conditions. We expect debt to EBITDA to remain at 2.5x-3.0x and funds from operations (FFO) to debt at 20%-25%, while Isagen upstreams excess cash to its shareholders of Colombian peso (COP) 1 trillion per year on average. "The negative outlook on Ocensa mirrors that on its parent, Ecopetrol, given that we consider the company a core subsidiary of the group. In addition, the negative outlook on Ecopetrol mirrors that on Colombia, because we think the likelihood that the Colombian government would provide timely and sufficient extraordinary support to Ecopetrol under stress scenarios is very high, based on its very important role in the domestic economy and very strong link with the government. "The negative outlook on Termocandelaria mirrors that on the sovereign. Additionally, we expect the company's debt to EBITDA to remain at 3.0x-3.5x in the next 12 to 24 months. We assume that it will only use capital expenditure (capex) for maintenance going forward." The negative outlooks on Enel Americas, Enel Colombia, and Enfragen mirror that on Colombia, given the relevant exposure the group has to Colombia in terms of consolidated revenue and EBITDA generation. Downside scenario S&P said, "We could lower the rating on Isagen in the next 12 months if we take a similar action on the sovereign rating, which could happen if economic growth is below our expectations. Moreover, we could revise down Isagen's stand-alone credit profile (SACP) if the company adopts a more aggressive commercial strategy or repays its intercompany loan from its parent faster than we expect, impairing its financial flexibility. This could result in debt to EBITDA consistently above 4.0x or FFO to debt below 20%. "We could downgrade Ocensa if we take the same action on Colombia and, consequently, on Ecopetrol. In addition, we could revise down the company's SACP if its financial position weakens materially, with net debt to EBITDA rising above 1.5x and FFO to debt falling below 60%. We view such a scenario as unlikely in the next 12 months, given our expectations that Ocensa's EBITDA will remain robust, there are no investments requiring further financing on the horizon, and that its dividend policy will not change. "We could lower the rating on Termocandelaria in the next 12 months if we take a similar action on the sovereign rating, which could happen if economic growth is below our expectations. In addition, we could lower the ratings on Termocandelaria in the next 12 months if net debt to EBITDA increases consistently above 4x, potentially from weaker-than-expected energy demand on the Atlantic coast or new, unforeseen debt issuances. We could also lower the ratings if liquidity worsens, driving the ratio of cash sources to cash uses below 1.2x. "We could downgrade Enel Americas and Enel Colombia following a similar action on Colombia, all other factors remaining equal. We will also downgrade Enel Americas if we believe the group has become less important to its parent, which could occur if, for instance, Enel SpA slashes its stake in the group or makes significant divestments. In addition, we could revise down the SACP on Enel Americas if its credit metrics worsen, particularly if debt to EBITDA rises above 2x. This could result from a more aggressive debt-financed investment program, which we don't currently envision, or from a major operational issue at its main cash flow contributors. Furthermore, we could revise down the SACP if liquidity worsens, for instance, if the ratio of sources over uses of cash falls below 1.1x in the next 12 months, which we believe is unlikely. "We could lower the ratings on Enfragen following a similar action on Colombia, all other factors remaining equal. In the next 18 months, we could lower the rating if the minimum debt service coverage ratio falls and remains below 1.25x, which could result from lower asset availability due to extended maintenance stoppages. In addition, lower cash flow available for debt service could result from unexpected climate events, like a prolonged dry season in Panama or lower thermal dispatch in Colombia." Upside scenario S&P said, "We could revise the outlook to stable or raise the ratings on Isagen in the next two years if we take a similar action on the sovereign, while all other factors are unchanged. We could revise up the SACP if Isagen posts debt to EBITDA below 2.5x and FFO to debt above 30% on a consistent basis, for example, if the company can sign attractive power contracts, bolstering average sales prices. "We could revise the outlook on Ocensa to stable or raise the ratings if we do the same on the sovereign and Ecopetrol. "All other factors being equal, we could revise the outlooks to stable on Termocandelaria, Enel Americas, Enel Colombia, and Enfragen in the next two years if we take a similar action on the sovereign." Ratings list Downgraded To From A.I. Candelaria Spain Senior Secured B B+ Oleoducto Central S.A. (OCENSA) Issuer Credit Rating BB/Negative/-- BB+/Negative/-- Senior Unsecured BB BB+ Isagen S.A. E.S.P. Issuer Credit Rating BB/Negative/-- BB+/Negative/-- Ratings Affirmed; Outlook Action To From Enel Americas S.A. Issuer Credit Rating Foreign Currency BBB-/Negative/-- BBB-/Stable/-- Enel Colombia S.A E.S.P. Issuer Credit Rating Foreign Currency BBB-/Negative/-- BBB-/Stable/-- Prime Energia SpA Senior Secured BBB-/Negative/-- BBB-/Stable/-- Termocandelaria Power S.A. Issuer Credit Rating BB/Negative/-- BB/Stable/-- EnfraGen Spain, S.A.U Senior Secured BBB-/Negative/-- BBB-/Stable/-- EnfraGen Energia Sur, S.A.U. Senior Secured BBB-/Negative/-- BBB-/Stable/-- Ratings Affirmed Enel Americas S.A. Senior Unsecured BBB- Termocandelaria Power S.A. Senior Unsecured BB ===================== E L S A L V A D O R ===================== EL SALVADOR: IMF Approves SDR86-MM Release Under 40-Month EFF Deal ------------------------------------------------------------------ The Executive Board of the International Monetary Fund (IMF) concluded El Salvador's 2025 Article IV consultation and completed the first review of the Extended Fund Facility (EFF) arrangement. Completion of this review allows immediate disbursement of SDR 86.16 million (about US$118 million), bringing total disbursements under this arrangement to SDR 172.32 million (about US$231 million). The authorities have consented to the publication of the Staff Report. El Salvador's 40-month EFF arrangement was approved by the Executive Board on February 26, 2025, with total access of SDR 1,033.92 million (about US$1.4 billion or 360 percent of quota). The program remains focused on strengthening public finances, rebuilding external and financial buffers, and enhancing governance and transparency frameworks to create the conditions for stronger and more resilient growth. Program performance has been solid, with the economy continuing to expand as macroeconomic imbalances are being addressed. Key fiscal and international reserve targets were met with margins and progress continues with the ambitious reform agenda in the areas of governance, transparency, and financial resilience. Specifically, in the context of the first review, (i) a new Fiscal Sustainability Law has been enacted; (ii) a presidential decree limiting exceptions to the Procurement Law has been issued; (iii) financial information on the largest state-owned enterprises has been published; and (iv) information on public contracts has been made more accessible. Steps continue to be taken to mitigate Bitcoin associated risks and unwind the public sector's participation in Chivo. The 2025 Article IV consultation focused on policies to boost medium-term growth and resilience. Special attention was given to policies to support foreign direct investment, employment and exports, while considering the implications of a more challenging external backdrop. Following the Executive Board discussion on El Salvador, Mr. Nigel Clarke, Deputy Managing Director and Acting Chair, issued the following statement: "El Salvador's economic program, supported by the Extended Fund Facility arrangement, had an auspicious start. Notably, the economy continues to expand, inflation has further moderated, and the current account deficit has narrowed amid efforts to address macroeconomic imbalances. Fiscal consolidation remains on track, external and financial buffers are being rebuilt, and governance and transparency reforms are proceeding in line with program commitments. In light of rising external risks, agile policy making and contingency planning remain essential to protect program objectives, including in the context of the dollarization regime. "Efforts to strengthen public finances must continue, especially through a further rationalization of the wage bill and other current spending. Beyond this year, comprehensive reforms to the civil service and pension reforms are needed to safeguard fiscal consolidation and protect priority social and infrastructure spending. Meanwhile, continued efforts to mobilize official support will help further reduce reliance on bank and pension fund financing and support private sector credit. "Sustained efforts are needed to rebuild financial sector buffers and enhance oversight and regulation. The steady implementation of the planned increases in banks' reserve requirements and liquidity buffers is critical to enhancing resilience and preserving financial stability. These efforts should be complemented by enhancements in the oversight of banks as well as nonbank financial institutions. "Steps to strengthen governance and transparency must continue. A consistent and evenhanded application of the new Anti-Corruption Law remains critical, alongside efforts to reinforce the AML/CFT framework in line with international best practices. Boosting confidence and investment requires elevating standards of fiscal reporting and transparency about public contracts, and improved access to public information. Focused efforts should be considered to support foreign direct investment and address infrastructure gaps, including through well-designed public-private partnerships and investor protection schemes. "Bitcoin risks should continue to be mitigated. An early unwinding of the public sector's participation in the government's e-wallet (Chivo) remains critical, and efforts should continue to keep the public sector's holdings of Bitcoin unchanged, and to improve the oversight of crypto assets to enhance consumer and investor protection." Executive Board Assessment Executive Directors agreed with the thrust of the staff appraisal. They commended the Salvadoran authorities for the strong ownership and satisfactory performance under the Fund‑supported program and welcomed the continued efforts to address macroeconomic imbalances. Directors noted, however, downside risks related to escalating global trade tensions and tighter immigration policies elsewhere, which could negatively impact remittances and growth. Against this backdrop, Directors emphasized the importance of sustaining the reform momentum to safeguard macroeconomic stability and durably address El Salvador's longstanding structural challenges and encouraged the authorities to stand ready to activate contingency plans as needed. Directors underscored the need to sustain fiscal consolidation by further rationalizing the wage bill and containing current expenditures to secure space for priority social and infrastructure spending and put debt firmly on a downward trajectory. They concurred that contingency measures to broaden tax revenues and streamline tax expenditures could also be considered. Directors welcomed the new Fiscal Responsibility Law and agreed that developing and implementing civil service and pension reforms and further strengthening public financial management are essential to underpin the fiscal adjustment over the medium term. Continuing to mobilize official external support would help reduce reliance on bank and pension fund financing and support private sector credit. While noting that the financial system remains sound, Directors emphasized the importance of further rebuilding financial sector buffers and strengthening oversight and regulation. They agreed that implementing the new Financial Stability Law and improving the supervision and governance of nonbank financial institutions in line with best practices are also key. Directors encouraged mitigating risks from the use of Bitcoin and boosting the oversight of crypto assets. They stressed the need to unwind the public sector's participation in the government e‑wallet (Chivo) and to not increase overall Bitcoin holdings by the public sector and underscored the importance of clear and consistent communication in this regard. Directors also emphasized the need to enhance the autonomy of the central bank and strengthen its capital position and boost international reserves. Directors underscored the importance of advancing structural reforms to unlock El Salvador's growth potential. They recommended further strengthening governance and transparency and, in this regard, encouraged enhancing the AML/CFT framework in line with FATF recommendations, securing the consistent and evenhanded application of the new anti‑corruption framework, and strengthening the transparency of public information, including in the procurement process. Noting that the improvements in domestic security offer a unique opportunity to further boost growth, Directors welcomed the authorities' Long‑term Growth Strategy and encouraged reforms to raise productivity, improve the investment climate, and enhance financial inclusion. They welcomed ongoing efforts to reduce red tape and logistics costs, as well as plans to address large infrastructure and human capital gaps, with support of the private sector. Directors also encouraged strengthening resilience to climate‑related shocks. It is expected that the next Article IV consultation with El Salvador will be held in accordance with the Executive Board decision on consultation cycles for members with Fund arrangements. =============== H O N D U R A S =============== BANCO ATLANTIDA: Fitch Hikes LongTerm IDRs to 'B+', Outlook Stable ------------------------------------------------------------------ Fitch Ratings has upgraded Banco Atlantida, S.A.'s (Atlantida) Long-Term (LT) Foreign and Local Currency Issuer Default Ratings (IDRs) to 'B+' from 'B', its Viability Rating (VR) to 'b+' from 'b', and its Government Support Rating (GSR) to 'b' from 'b-'. Fitch has also upgraded Inversiones Atlantida, S.A.'s (Invatlan) LT Foreign and Local Currency IDRs to 'B' from 'B-'. In addition, Fitch has affirmed the Short-Term IDRs of Atlantida and Invatlan at 'B'. The Rating Outlook on the LT IDRs is Stable. Fitch has also upgraded Invatlan's senior debt rating. The rating upgrades follow Fitch's view of improved creditworthiness, which prompted an upgrade of the Honduran banks' operating environment (OE) score to 'b' from 'b-' with a Stable Outlook. Fitch's assessment of the OE directly impacts Atlantida's VR. Honduras' consistent macroeconomics dynamics have enhanced economic development, which is expected to continue sustaining Fitch's core metrics in line with the assigned OE score. The country's estimated GDP per capita for 2024 was USD3,446 and Fitch's operational risk index (ORI) percentile was 15.2% as of April 2025. These factors result in the implied score of 'b'. Fitch believes these metrics will allow Honduran banks to continue generating business volumes over the medium term, supporting their consistent financial performance. Key Rating Drivers Leading Market Position in Honduras: Atlantida's IDRs are driven by its adequate financial performance in the Honduran banking system, which is reflected in its VR of 'b+'. The bank's VR is one notch above the 'b' implied VR to reflect its relevant and recently upgraded business profile to 'b+'/stable, which is one notch above the OE. This key rating strength comes from Atlantida's leading market position in Honduras and consistent revenue generation. As of 1Q25, the bank's market share in terms of loans and customer deposits was above 20%, according to local regulator data. Stable Asset Quality Metrics: Fitch upgraded the risk profile and asset quality scores to 'b'/Stable from 'b-'/Stable. This reflects the relative stability in the nonperforming loans (over 90 days overdue)-to-total loans metric, which is expected to remain close to 2.5% during 2025. Fitch expects the improved macroeconomic dynamics in Honduras and the expected moderate loan growth strategy to support the stability of the asset quality metrics. As of 1Q25, the core asset quality metric was 2.5%, compared with the 2021-2024 average of 2.6%. Nevertheless, Fitch's assessment also considers the high concentration in the top 20 borrowers, which represented 3x the Fitch Core Capital (FCC). Reasonable Profitability: Over the past year, Atlantida's profitability was pressured mainly by higher credit costs, resulting in an operating profit to risk-weighted assets (RWA) ratio of 1.3% at 1Q25, compared with the 2021-2024 average of 1.7%. Nevertheless, the bank's profitability indicators remain within the threshold for its current 'b-' score. Fitch expects Atlantida's profitability to improve and stabilize around 2%, supported by consistent income generation and operational efficiencies, which are expected to partially offset moderate pressures from asset quality. Tight Capitalization: Fitch views capitalization as Atlantida's weakest financial factor and considers it tight relative to its balance sheet size. At 1Q25, the FCC to RWA ratio fell to 7.1% from 7.4% in 2024. Nonetheless, Fitch expects the core metric could slightly improve to levels close to 8%, considering the bank's moderate loan portfolio growth strategy compared with previous years, as well as consistent profit reinvestment and moderate dividend payments. Solid Funding and Liquidity Profile: Fitch upgraded the funding and liquidity score to 'b+'/Stable, from 'b'/Stable, one notch above the OE. Atlantida's funding and liquidity position reflects its relevant market position in the Honduran banking system, underpinned by a diversified depositor base that accounted for 84.6% of total non-equity funding at 1Q25. The loan-to-deposit ratio was 93.5% in the same period, slightly below the four-year average of 93.6%. Fitch considers Atlantida's liquidity management to be prudent and anticipates no material changes to its funding and liquidity profile in the ratings horizon. Rating Sensitivities Factors that Could, Individually or Collectively, Lead to Negative Rating Action/Downgrade - A negative change in Fitch's OE assessment due to a deterioration in macroeconomic environment or Fitch's view of the sovereign credit quality; - Downgrades of Atlantida's IDRs and VR could also result from continued asset quality deterioration, with an operating profit-to-RWA ratio consistently below 1% and weakened capitalization metrics that are reflected in an FCC to RWA ratio consistently below 8%. Factors that Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade - A positive change in Fitch's OE assessment or Fitch's view of the sovereign credit quality; - Atlantida's IDRs have limited upside potential, as they are not expected to be rated two notches above the OE. Government Support Rating (GSR) High Systemic Importance: Atlantida's 'b' GSR reflects the bank's high systemic importance, with close to 20% share of system deposits. Fitch also considers the support to be restricted by the limited financial flexibility of the sovereign. SUBSIDIARIES & AFFILIATES: KEY RATING DRIVERS Main Subsidiary Drives Ratings: Invatlan's IDRs of 'B' reflect the creditworthiness of its main subsidiary, Atlantida (rated 'B+'). Invatlan is rated one notch below Atlantida due to its high double leverage ratio, which has consistently remained above 120%. As of YE 2024, this indicator was 156.2% and Fitch does not expect material changes over the rating horizon. Fitch's assessment also incorporates the demonstrated capacity of the subsidiaries to support Invatlan's performance. While Atlantida has suspended dividend payments as part of its capital strengthening strategy, Fitch expects Invatlan's other Latin American operations, primarily its insurance companies and pension fund manager, to continue to provide income streams to the holding company to meet its financial commitments. However, unforeseen downturns in the economies of the countries and regions where Invatlan operates could constrain liquidity transfers from its subsidiaries. Fitch has also upgraded the USD300 million senior secured notes to 'B', in line with Invatlan's ratings. Although these notes are senior secured, Fitch believes the collateral mechanism would not significantly enhance recovery rates. In accordance with Fitch's criteria, recovery prospects are considered average, which is consistent with the assigned Recovery Rating of 'RR4'. SUBSIDIARIES AND AFFILIATES: RATING SENSITIVITIES Factors that Could, Individually or Collectively, Lead to Negative Rating Action/Downgrade - Invatlan's ratings will likely move in line with those of its main subsidiary, Atlantida, maintaining a one-notch difference due to its current double leverage level; - A significant reduction in dividends transfers from Invatlan's main subsidiaries that ultimately affect its liquidity to service debt or a sustained increase of double leverage to above 200%; - The global senior secured debt ratings would mirror any change to Invatlan's IDR; - Increasing refinancing risks due to the upcoming debt maturity could be detrimental for Invatlan's ratings. Factors that Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade - Invatlan's IDRs could be upgraded by one notch if the company's double-leverage ratio decreases at a level consistently below 120% resulting from a continued expansion financed by capital injections; - The global senior secured debt ratings would mirror any change to Invatlan's IDRs. VR ADJUSTMENTS The VR of 'b+' has been assigned above the implied rating of 'b' due to the high influence of Atlantida's business profile, driven by the bank's leading local franchise. Summary of Financial Adjustments Pre-paid expenses were reclassified as intangibles and deducted from total equity to reflect the low-loss absorption capacity of these assets. Public Ratings with Credit Linkage to other ratings Invatlan's IDRs are linked to Atlantida's IDRs. ESG Considerations Banco Atlantida S.A. has an ESG Relevance Score of '4' for Financial Transparency due to third-party disclosure that remains weaker than international best practices. This has a negative impact on the credit profile and is relevant to the ratings in conjunction with other factors. Inversiones Atlantida S.A. has an ESG Relevance Score of '4' for Financial Transparency due to lagging or missing information disclosure. This 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 ----------- ------ -------- ----- Banco Atlantida S.A. LT IDR B+ Upgrade B ST IDR B Affirmed B LC LT IDR B+ Upgrade B LC ST IDR B Affirmed B Viability b+ Upgrade b Government Support b Upgrade b- Inversiones Atlantida S.A. LT IDR B Upgrade B- ST IDR B Affirmed B LC LT IDR B Upgrade B- LC ST IDR B Affirmed B senior secured LT B Upgrade RR4 B- ============= J A M A I C A ============= EDUFOCAL: Terminates Partnership With Signature and Creed Associate ------------------------------------------------------------------- RJR News reports that EduFocal Group recently informed the Jamaica Stock Exchange that it will be terminating its relationship with financial outsourcing firm Signature and Creed Associates, which operated as its fractional CFO until mid-June. The company's financial oversight will now be handled by a financial controller who will report directly to the group's CEO Gordon Swaby, according to RJR News. Mr. Swaby, however, says the new financial controller will not sit on the group's management team because it wants to reduce its administrative costs, the report notes. Jamaica Observer reports that the child company of the group, EduFocal Limited's ordinary shares have been suspended from trading for the second time in over a year related to the delay in submitting its audited financial statements. The education technology company was suspended from trading effective June 3 pending the submission of its 2024 audited financials, which are 93 days overdue, according to Jamaica Observer. The audited numbers were due from March 1. EduFocal Limited has indicated that it intends to submit its audited financials by June 27 and the annual report within 30 days of that submission, Jamaica Observer notes. The company also expects to submit its first quarter report by June 5. The company was suspended for 17 days during June 2024 due to its audited financials being more than 90 days past the original due date, Jamaica Observer relays. The company indicated in late December that it would be moving to change its filing period related to its financial year in 2025, Jamaica Observer disclsoes. That would see the company producing an unaudited fourth quarter report in 45 days and audited financial statements in 90 days from the financial year end, Jamaica Observer says. "EduFocal's 2024 performance reflects the ongoing challenges we've faced in a difficult market environment. Despite the setbacks, we have made meaningful progress in repositioning the business for future growth. By focusing on revenue diversification, operational efficiency, and technology enhancements, we are setting the foundation for a more resilient business model. While the path to recovery will be gradual, we are confident that the steps we've taken in 2024 will drive meaningful improvements in the years to come," stated the Q4 report signed by Chairman Peter Levy and Chief Executive Officer Gordon Swaby, Jamaica Observer relays. Moreover, our.today relays that EduFocal Limited, which has been rocked by two fresh resignations days after the sudden exit of long-time board chairman Peter Levy. The latest resignations come from Paul Allen, the company's chief technical officer and Herbert Hall, who served as mentor to the board of directors, according to our.today. In the case of Allen, his resignation took effect on May 31, while Hall's departure is effective September 10, the report adds. As reported in the Troubled Company Reporter-Latin America in June 2024, RJR News related that EduFocal is reporting a loss of just over $79 million for the financial year ended December 2023. The company said, during the comparative period ended December 2022, it recorded a loss of $179 million, according to RJR News. EduFocal says this is mainly due to an increased bad debt write off of $65.7 million and an impairment amounting to $38.4 million, the report noted. JAMAICA: Successfully Reduced Public Debt, IMF Says --------------------------------------------------- The Executive Board of the International Monetary Fund (IMF) concluded the Article IV consultation with Jamaica and considered and endorsed the staff appraisal without a meeting. The authorities have consented to the publication of the Staff Report prepared for the consultation. IMF's Staff Report is as follows: Over the last decade, Jamaica has successfully reduced its public debt, firmly anchored inflation and inflation expectations, and strengthened its external position. It has built an enviable track record of investing in institutions and prioritizing macroeconomic stability. Jamaica has met recent global shocks and natural disasters in an agile, prudent, and growth-supportive manner. GDP declined in FY2024/25 due to hurricane Beryl and tropical storm Raphael which damaged agriculture and infrastructure and undermined tourism. Nonetheless, economic activity is projected to normalize as these effects wane. Unemployment has fallen to all-time low levels (3.7 percent in January 2025) and inflation has converged to the Bank of Jamaica (BOJ)'s target band of 4-6 percent. The current account has been in surplus for the last two fiscal years with strong tourism revenues and high remittances. The international reserves' position has continued to improve. The outlook points to growth settling at its potential rate once the FY2025/26 recovery is complete, with inflation stabilizing within the BOJ's target range. Nonetheless, global developments require continued close monitoring as downside risks emanating from tighter global financial conditions, lower growth in key source markets for tourism, and trade policy disruptions remain high. Finally, extreme weather events could negatively affect economic activity. The Jamaican authorities are implementing sound macroeconomic policies in the context of strong policy frameworks. A prudent fiscal stance supports a reduction in public debt towards the target in the Fiscal Responsibility Law. The Bank of Jamaica has anchored inflation around the mid-point of the inflation target band and inflation expectations have declined to close to the upper band of the BOJ's target range. The lowering of the policy rate in 2024 was justified in view of the temporary nature of the weather-related shocks and the expected convergence of inflation to the BOJ's target. The current fiscal-monetary policy mix places Jamaica in a good position to respond to the various downside global risks, should they realize. Executive Board Assessment "In concluding the 2025 Article IV consultation with Jamaica, Executive Directors endorsed staff's appraisal, as follows: "Over more than a decade, Jamaica has been implementing sound macroeconomic policies supported by strong policy frameworks. These efforts have allowed Jamaica to accumulate meaningful policy buffers, reduce public debt, anchor inflation, and improve its external position. "Recent policy efforts have further strengthened fiscal responsibility, improved the effectiveness of public sector compensation, bolstered tax and customs administration, enhanced financial oversight, and built resilience to climate change including in the context of the recently completed PLL/RSF arrangements. These advances allowed agile, prudent, and growth-supportive responses to recent global shocks and natural disasters. "The economy, which declined in FY2024/25 due to the weather events, is rebounding this year and is projected to grow at its potential rate with risks broadly balanced. The recovery is supported by a rebound in agriculture and tourism and its spillovers to other sectors. Risks comprise extreme weather events posing downside risks for tourism and agriculture, trade policy shocks, and disruptions to tourism or the flow of remittances. Upside risks include a faster-than-expected recovery from recent weather events, favorable tourism trends, and favorable commodity price developments. "Maintaining primary fiscal surpluses to reach the FRL's ceiling of 60 percent of GDP by FY2027/28 remains essential. However, fiscal policy could become too pro-cyclical in the face of severe shocks when the debt-to-GDP ratio reaches the FRL's target. Incorporating an explicit operational medium-term debt anchor in the FRL at a level below 60 percent of GDP would help guide policies and ensure that debt is kept at moderate levels, creating fiscal buffers to respond to adverse events. The timeline for the eventual adoption of an operational debt anchor should be assessed in the context of heightened uncertainties, which could limit the country's ability to meet a lower debt anchor in the medium-term. "The authorities continue to improve the fiscal policy framework. The IFC became operational in January 2025 and assessed the consistency of current fiscal plans with the FRL. The A-PEFA assessment was completed in June 2024, providing recommendations to enhance public financial management. Reforms of tax and customs administration are supporting revenue mobilization, and sound debt management continues. The wage bill reform eliminating distortions and improving the transparency and competitiveness of the public pay to help retain skilled employees was completed last FY. "Ongoing efforts to bolster the monetary and financial policy frameworks should continue. Staff supports the BOJ's cautious data-dependent monetary policy, noting that there should be scope to lower the policy rate but the heightened global uncertainties call for a cautious approach. An inflation targeting regime with a strong international reserves' position and stable FX markets have served Jamaica well. Going forward, there is scope to deepen FX markets by reducing surrender requirements and scaling back the BOJ's FXI. Deepening capital markets, further de-dollarizing the economy, and boosting banking sector competition would improve resource allocation and help strengthen monetary transmission. The adoption of Basel III, the expansion of the BOJ supervisory remit, and unification of financial supervision under a twin-peaks regime are all going in the right direction. Jamaica exited FATF's increased monitoring (grey list) in June 2024. Building on this achievement, the authorities continue to strengthen AML/CFT and are preparing for the fifth round of the Mutual Evaluation Process (expected by mid-2026). "A multipronged approach is required to overcome supply-side constraints to growth. Low productivity resulting from the misallocation of resources is amplified by structural impediments including high crime, barriers to competition, poor educational outcomes, inadequate infrastructure, and barriers to trade. The authorities are addressing these barriers through product and labor market reforms, education, infrastructure, trade, and climate-aware reforms including by completing reform measures under the RSF completed last September. These reforms have the potential to catalyze private sector financing for climate-related investment." About Jamaica Jamaica is an island country situated in the Caribbean Sea. Jamaica is an upper-middle income country with an economy heavily dependent on tourism. Other major sectors of the Jamaican economy include agriculture, mining, manufacturing, petroleum refining, financial and insurance services. On Feb. 21, 2025, Fitch Ratings affirmed Jamaica's Long-Term Foreign-Currency Issuer Default Rating (IDR) at 'BB-', with a positive rating outlook. In October 2023, Moody's upgraded the Government of Jamaica's long-term issuer and senior unsecured ratings to B1 from B2, and senior unsecured shelf rating to (P)B1 from (P)B2. The outlook has been changed to positive from stable. In September 2024, S&P affirmed 'BB-/B' longterm foreign and local currency sovereign credit ratings on Jamaica and revised outlook to positive. =========== M E X I C O =========== ASCEND PERFORMANCE: Committee Hires Ducera as Investment Banker --------------------------------------------------------------- The official committee of unsecured creditors of Ascend Performance Materials Holdings Inc. and its affiliates seeks approval from the U.S. Bankruptcy Court for the Southern District of Texas to employ Ducera Partners LLC and its affiliates including, where appropriate, Ducera Securities LLC, as investment banker. Ducera shall provide these financial advisory and investment banking services to the Committee: (a) General Advisory and Investment Banking Services; Restructuring Services. If requested by the Committee (including through the Committee's lead counsel, Brown Rudnick LLP (together with any other legal counsel retained by the Committee in connection with the Chapter 11 Cases, "Counsel")), Ducera shall: (1) familiarize itself with the Company's business, operations, financial condition, and capital structure; (2) assist with the assessment of the Company's liquidity and uses of liquidity and with identifying potential sources of financing in connection with future transactions; (3) analyze various Restructuring scenarios and the potential impact of these scenarios on the Existing Obligations of the Company and the recoveries of those stakeholders impacted by the Restructuring; (4) provide investment banking and financial advice and assistance to the Committee in connection with any Restructuring proposals advanced by the Committee, the Debtors or any other parties or stakeholders; (5) provide investment banking and financial advice and assistance to the Committee in structuring any new securities to be issued by the Debtors in connection with a Restructuring; (6) provide investment banking and financial advice and assistance to the Committee in connection with any proposed sale of the Debtors' assets (including any 363 Sale Transaction) or any financing transactions proposed to be pursued by the Debtors (including any debtor in possession financing transactions); (7) assist the Committee and/or participate in negotiations with the Debtors, the Committee and any other entities or groups affected by the Restructuring; (8) participate in hearings before the Court and provide expert testimony and litigation support services, as requested from time to time by the Committee, regarding any of the matters to which Ducera is providing services; and (9) provide such other advisory and investment banking services as may be agreed upon by Ducera and the Committee. (b) To the fullest extent permitted by applicable laws and rules, work performed by Ducera as part of this engagement, including, without limitation, any communications with Counsel and the Committee, and any advice, analysis, or reports Ducera may prepare, shall be covered by attorney work-product doctrine, the attorney-client privilege, and all other applicable privileges. Any reports or analyses generated by Ducera are not the property of the Debtors or their estates, and such reports or analyses are the property of the Committee (and not any of its Members individually). Ducera will receive compensation as follows: (a) A nonrefundable monthly cash fee of $175,000, payable in advance (the "Monthly Advisory Fee") or as otherwise set forth in a Court order. The Monthly Advisory Fee shall commence as of the Effective Date. The first Monthly Advisory Fee and any additional Monthly Advisory Fees accrued from the Effective Date through the entry of an order of the Court approving Ducera's retention by the Committee shall be payable upon the entry of such order, subject to any other applicable orders of the Court. The Monthly Advisory Fee shall be payable until the earlier of: (1) the consummation of a Restructuring or (2) the termination of Ducera's services by the Committee; plus, (b) A restructuring fee of $3,000,000 that shall be due and payable upon consummation of any Restructuring (the "Restructuring Fee"). (c) The Company shall receive a discount of $87,500 per month against the Restructuring Fee for each month commencing after payment of the sixth (6th) full Monthly Advisory Fee (the "Ducera Discount"); provided, however, that the Ducera Discount shall only apply if any and all outstanding invoices have been paid before, or in connection with, the consummation of the Restructuring. (d) In addition to the fees, the Debtors shall, subject to approval of the Court, reimburse Ducera at cost for all reasonable and documented out-of-pocket expenses incurred in connection with the services provided to the Committee hereunder, including, but not limited to, reasonable and documented travel and transportation expenses, third party research and telecommunication expenses, printing costs, courier and other shipping and mailing costs as well as reasonable and documented expenses of Ducera's external legal counsel and other expenses incurred in performing Ducera's services hereunder during the Term on or after the Effective Date of the Engagement Letter, subject to the provisions of this subparagraph 13(d); provided, however, that this subparagraph 13(d) shall in no way affect the indemnification provisions set forth in Annex A of the Engagement Letter. All payments due under this Application (including this Paragraph 13) shall be made in U.S. dollars in immediately available funds, free and clear of any set-off, claim, and applicable taxes (with appropriate gross-up for any taxes withheld). (e) The Committee and Ducera acknowledge and agree that (1) hours worked; (2) the results achieved; and (3) the ultimate benefit to the Committee of the work performed, in each case, in connection with this engagement, may be variable, and that the parties have taken such factors into account in setting the fees set forth in this Paragraph 13. To the extent further services are requested by the Committee in connection with the Chapter 11 Cases, the Committee and Ducera agree to negotiate in good faith a reasonable scope of services and fee structure in connection with any such further services provided by Ducera, depending on the size, scope, and nature of the services to be provided. Michael Genereux, a managing director at Ducera Partners, disclosed in a court filing that the firm is a "disinterested person" as defined in Section 101(14) of the Bankruptcy Code. The firm can be reached through: Michael Genereux Ducera Partners, LLC 11 Times Square, 36th Floor New York, NY 10036 Telephone: (212) 671-9700 About Ascend Performance Materials Holdings The Debtors, together with their non-Debtor affiliates, are one of the largest, fully-integrated producers of nylon, a plastic that is used in everyday essentials, like apparel, carpets, and tires, as well as new technologies, like electric vehicles and solar energy systems. Ascend's business primarily revolves around the production and sale of nylon 6,6 (PA66), along with the chemical intermediates and downstream products derived from it. Common applications of PA66 include heating and cooling systems, air bags, batteries, and athletic apparel. Headquartered in Houston, Texas, Ascend has a global workforce of approximately 2,200 employees and operates eleven manufacturing facilities that span the United States, Mexico, Europe, and Asia. Ascend Performance Materials Holdings Inc. and its affiliates filed voluntary petitions for relief under Chapter 11 of the Bankruptcy Code (Bankr. S.D. Tex. Lead Case No. 25-90127) on April 21, 2025. In the petitions signed by Robert Del Genio, chief restructuring officer, the Debtors disclosed $1 billion to $10 billion in both estimated assets and liabilities. Judge Christopher M. Lopez oversees the cases. The Debtors tapped Bracewell LLP and Kirkland & Ellis LLP as counsel; PJT Partners, Inc. as investment banker; FTI Consulting, Inc. as restructuring advisor; and Deloitte LLP as tax advisor. Epiq Corporate Restructuring LLC is the Debtors' claims, noticing, and solicitation agent. ASCEND PERFORMANCE: Committee Taps Brown Rudnick LLP as Co-Counsel ------------------------------------------------------------------ The official committee of unsecured creditors of Ascend Performance Materials Holdings Inc. and its affiliates seeks approval from the U.S. Bankruptcy Court for the Southern District of Texas to employ Brown Rudnick LLP as co-counsel. The firm will provide these services: (a) assist, advise, and represent the committee in its meetings, consultations and negotiations with the Debtors and other parties in interest regarding the administration of these cases; (b) assist, advise, and represent the committee in understanding its powers and duties under the Bankruptcy Code and the Bankruptcy Rules and in performing other services as are in the interests of those represented by the committee; (c) assist the committee's review of the Debtors' Schedules of Assets and Liabilities, Statement of Financial Affairs and other financial reports prepared by or on behalf of the Debtors; (d) assist committee's investigation of the acts, conduct, assets, liabilities, and financial condition of the Debtors and their affiliates; (e) assist and advise the committee regarding the identification and prosecution of estate claims and causes of action; (f) assist and advise the committee in its review and analysis of, and negotiations with the Debtors and any counterparties related to, any potential sale or restructuring transactions; (g) review and analyze all applications, motions, complaints, orders, and other pleadings filed with the court by the Debtors or third parties, and advise the committee as to their propriety and, after consultation with the committee, take any appropriate action; (h) prepare necessary legal papers on behalf of the committee, and pursue or participate in contested matters and adversary proceedings as may be necessary or appropriate in furtherance of the committee's duties, interest, and objectives; (i) represent committee at hearings held before the court and communicate with the committee regarding the issues raised, and the decisions of the court; (j) assist, advise and represent committee in connection with the review of filed proofs of claim and reconciliation of or objections to such proofs of claim and any claims estimation proceedings; (k) assist, advise and represent committee in its participation in the negotiation, formulation, and drafting of a plan of reorganization/liquidation; (l) assist, advise and represent the committee with respect to its communications with the general creditor body regarding significant matters in these cases; (m) respond to inquiries from individual creditors as to the status of, and developments in, these cases; and (n) provide such other services to the committee as may be necessary in these cases or any related proceedings. The firm's counsel and staff will be paid at these hourly rates: Partners $950 - $2,450 Counsel $445 - $1,290 Associates $685 - $1,015 Paralegals $400 - $550 In addition, the firm will seek reimbursement for expenses incurred. Bennett Silverberg, Esq., a partner at Brown Rudnick, 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: Bennett S. Silverberg, Esq. Brown Rudnick LLP One Financial Center Boston, MA 02111 Telephone: (617) 856-8586 About Ascend Performance Materials Holdings The Debtors, together with their non-Debtor affiliates, are one of the largest, fully-integrated producers of nylon, a plastic that is used in everyday essentials, like apparel, carpets, and tires, as well as new technologies, like electric vehicles and solar energy systems. Ascend's business primarily revolves around the production and sale of nylon 6,6 (PA66), along with the chemical intermediates and downstream products derived from it. Common applications of PA66 include heating and cooling systems, air bags, batteries, and athletic apparel. Headquartered in Houston, Texas, Ascend has a global workforce of approximately 2,200 employees and operates eleven manufacturing facilities that span the United States, Mexico, Europe, and Asia. Ascend Performance Materials Holdings Inc. and its affiliates filed voluntary petitions for relief under Chapter 11 of the Bankruptcy Code (Bankr. S.D. Tex. Lead Case No. 25-90127) on April 21, 2025. In the petitions signed by Robert Del Genio, chief restructuring officer, the Debtors disclosed $1 billion to $10 billion in both estimated assets and liabilities. Judge Christopher M. Lopez oversees the cases. The Debtors tapped Bracewell LLP and Kirkland & Ellis LLP as counsel; PJT Partners, Inc. as investment banker; FTI Consulting, Inc. as restructuring advisor; and Deloitte LLP as tax advisor. Epiq Corporate Restructuring LLC is the Debtors' claims, noticing, and solicitation agent. ********* 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 * * *