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T R O U B L E D C O M P A N Y R E P O R T E R
L A T I N A M E R I C A
Monday, July 7, 2025, Vol. 26, No. 134
Headlines
A R G E N T I N A
ARGENTINA: Court Strikes Down Decree Restricting Right to Strike
ARGENTINA: Economic Pick-Up Fails to Filter Through to Job Market
BUENOS AIRES: S&P Affirms 'B-' LongTerm ICR, Outlook Stable
CORDOBA PROVINCE: Sells US$725 Million of Debt Abroad
EDENOR: S&P Raises ICR to 'B-', Outlook Stable
B A R B A D O S
BARBADOS: Moody's Rates New $500MM Senior Unsecured Bond 'B2'
B R A Z I L
F-BRASILE SPA: S&P Withdraws 'B-' Rating on $505MM Secured Notes
NATURA COSMETICOS: S&P Affirms 'BB' ICR, Outlook Stable
C O L O M B I A
ECOPETROL SA: Moody's Affirms 'Ba1' CFR, Outlook Remains Stable
D O M I N I C A N R E P U B L I C
DOMINICAN REPUBLIC: Central Bank Growth Stabilize Economy
J A M A I C A
DOLPHIN COVE: Mexican Directors Removed From Board
MARIA SOCORRO LUGO: San Juan Property Not Part of Bankr. Estate
P U E R T O R I C O
AMBASSADOR VETERANS: Taps Vilarino & Associates as Legal Counsel
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A R G E N T I N A
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ARGENTINA: Court Strikes Down Decree Restricting Right to Strike
----------------------------------------------------------------
AFP News reports that Alabour court has declared unconstitutional a
decree issued by President Javier Milei that restricted the right
to strike for several sectors by classifying them as essential
services.
According to a ruling released, the National Labour Court ruled
that the conditions of "strict exceptionality" required for the
Executive to assume powers belonging to Congress were not met, the
report notes.
The Confederación General del Trabajo (General Confederation of
Labour, CGT) umbrella union grouping had filed a legal challenge
against the presidential decree, arguing it violated labour
statutes and the constitutional right to strike, according to AFP
News.
Milei's decree expanded the list of essential activities, which are
required to maintain specific level of services during industrial
action, the report relays.
The court questioned whether the decree met the criteria of
"necessity and urgency" required by law, particularly given that it
was issued while Congress was in session – meaning the Executive
could have submitted a bill for legislative debate, rather than
issuing a decree, the report discloses.
"There are no exceptional circumstances or situations of necessity
and urgency that would have prevented the constitutional process
for enacting legislation," wrote Judge Moira Fullana as she struck
down the measure, the report notes.
The courts had already suspended implementation of the decree and
have now ruled on its substance, declaring it void on
constitutional grounds, the report says.
The decree also introduced a new category of "services of
transcendental importance," which included passenger transport,
construction, the food industry and catering – all of which were
also subjected to strike limitations, the report relays.
Upon taking office in December 2023, Milei had issued a sweeping
presidential decree that included similar labour measures, the
report notes. That order was suspended by the courts in August
2024 for being unconstitutional – a decision still pending review
by the Supreme Court, the report discloses.
Judge Fullana is the same magistrate who last week suspended
another Executive measure that eliminated a public holiday for
national civil servants — a benefit still enjoyed by most other
sectors, but labelled a "privilege" by the government, the report
relays.
The government has appealed the ruling, the report adds.
About Argentina
Argentina is a country located mostly in the southern half of South
America. Its capital is Buenos Aires. Javier Milei is the current
president of Argentina after winning the November 19, 2023 general
election. He succeeded Alberto Angel Fernandez in the position.
Argentina has the third largest economy in Latin America. The
country's economy is an upper middle-income economy for fiscal year
2019, according to the World Bank. Historically, however, its
economic performance has been very uneven, with high economic
growth alternating with severe recessions, income maldistribution
and in the recent decades, increasing poverty.
In March 2022, the International Monetary Fund (IMF) approved a
30-month arrangement under an Extended Fund Facility for Argentina
in the amount of SDR 31.914 billion (equivalent to US$44 billion,
or 1000 percent of quota) -- with an approved immediate
disbursement of an equivalent of US$9.65 billion. Argentina's
IMF-supported program sought to improve public finances and start
to reduce persistent high inflation through a multi-pronged
strategy.
On April 11, 2025, the IMF further approved a 48-month Extended
Fund Facility (EFF) arrangement for Argentina totaling US$20
billion (or 479 percent of quota), with an immediate disbursement
of US$12 billion, and a first review planned for June 2025 with an
associated disbursement of about US$2 billion. The program is
expected to help catalyze additional official multilateral and
bilateral support, and a timely re-access to
international capital markets.
Fitch Ratings, on May 12, 2025, upgraded Argentina's Long-Term
Foreign-Currency and Local-Currency Issuer Default Rating (IDR) to
'CCC+' from 'CCC'. The upgrade reflects the launch of a new IMF
program, among other things. S&P Global Ratings, in February 2025
lowered its local currency sovereign credit ratings on Argentina to
'SD/SD' from 'CCC/C' and its national scale rating to 'SD' from
'raB+'. Moody's Ratings, in January 2025, raised Argentina's local
currency ceiling to B3 from Caa1 and the foreign currency ceiling
to Caa1 from Caa3. DBRS, Inc. upgraded Argentina's Long-Term
Foreign and Local Currency Issuer Ratings to B (low) from CCC in
November 2024.
ARGENTINA: Economic Pick-Up Fails to Filter Through to Job Market
-----------------------------------------------------------------
Martin Fernandez Nadale at Buenos Aires Times reports that despite
economic activity having reverted part of last year's plunge in
Argentina, with evident signs of pick up, formal employment in the
private and public sectors has not been affected. According to the
data from the SIPA (Sistema Integrado Previsional Argentino)
pension fund system, over 7,000 jobs were lost in March. Formal
jobs lost during President Javier Milei's presidency to date
comfortably top 100,000.
A report by the CEPA (Centro de Economía Politica Argentina) think
tank shows 7,310 formal jobs were lost in the third month of this
year, with the cumulative total rising to 115,353 since November
2023, Buenos Aires Times points out. Up until August of the same
year, registered employment had climbed for 37 months running – a
streak only interrupted in September 2023, in the midst of
electoral uncertainty, according to Buenos Aires Times.
With the arrival of Milei's La Libertad Avanza administration to
office, the downward employment trend sharpened due to a
contraction of economic activity, the report notes. Since August
2024, its evolution has been erratic, with months of improvement
interwoven with others of decline, the report relays. Yet even
when economic activity started to show positive signs, employment
did not respond in the same direction, the report discloses.
Between November 2024 and January 2025, Argentina's economy grew a
monthly 0.9 percent and 0.5 percent respectively but the job
figures kept falling, the report says. The exception was last
February when both activity and employment grew, the report
relates. In March, both variables shrank with activity retreating
1.8 percent, accompanied by a new dip in jobs, the report says.
Daniel Schteingart, the Productive Planning director of the Fundar
think tank, underlined this disconnection by affirming that "the
economic revival of recent months has not come accompanied by new
jobs," the report relays. After the plunge in the first half of
2024, he explained, formal private-sector employment "stabilised
but without triggering a significant recovery," he added.
To this should be added the fact that not even the push of vibrant
energy sectors, like Vaca Muerta or lithium, were sufficient to
sustain employment levels in oil and mining, which lost almost
3,000 jobs in the period under study, the report notes.
By Sector, Province
As for the most stricken sectors, construction is responsible for
over half the jobs lost since last December – to be exact, 61,956
destroyed, representing 53.7 percent of the total in the context of
the political decision to paralyse public works completely, the
report relays.
Argentina's manufacturing industry also showed a significant
decline – 4,162 less jobs in March while there were 2,088 less
workers in agriculture, livestock, hunting and forestry and 1,185
less in education, the report discloses.
In contrast, only a few sectors showed some level of growth.
Retailing added 1,871 jobs, followed by hotels and restaurants
(+1,696) and community, social and personal services (+743), the
report relates. Nevertheless, these gains are modest in comparison
with the total losses and do not manage to revert the general
trend, the report notes.
At provincial level, job destruction is uneven. In March, 14 of
the 24 districts nationwide (23 provinces plus Buenos Aires City)
shed jobs with Salta (-1,810), Santa Cruz (-1,277) and Córdoba
(-1,095) the most affected. Among the provinces creating
employment, Buenos Aires (+660), Santa Fe (+333) and Formosa (+153)
stand out, the report discloses.
Even so, the general panorama is worrying – since Milei came to
power, 79.2 percent of districts (19) have seen employment fall,
the report notes. The most extreme situation is registered in La
Rioja Province, where the losses amounted to 11.8 percent of the
formal private-sector employment, the report says.
State Workers Down, Self-Employed Up
Faced with a decline of salaried employment, many workers have
resorted to monotributo self-employment although the official
statistics reveal that this has not compensated for the loss of
formal jobs, the report relays. Since November 2023, 74,997
persons have joined the simplified tax regime, a number inferior to
the 115,353 salaries lost in the private sector, the report notes.
Nor has the public sector proved a refuge. As of March 2025, state
employment accounted for 3,408,521 persons nationwide but there
have also been falls there – in that month alone 802 jobs were
lost with an accumulated total of 58,210 jobs in total since the
beginning of December 2023, taking into consideration the national,
provincial and municipal levels, the report discloses. In total,
the destruction of formal salaried employment since Milei's
inauguration climbs to 173,563 jobs, adding together the private
and public sectors, the report notes.
Luis Campos, a researcher for the Instituto de Estudios y
Formación think tank of the Central de Trabajadores de la
Argentina - Autonoma (CTA - Autónoma) labour umbrella, offers a
critical outlook on the evolution of formal employment, the report
relays. According to him, the labour market entered into a phase
of "very marked destruction" between September 2023 and July 2024,
followed by prolonged stagnation, the report discloses.
"Private-sector employment stopped falling in July 2024, and in the
following eight months grew barely 0.3 percent," he warned,
remarking that such growth is insufficient to compensate for
population growth over the same period, the report says.
Campos also questioned the government's promises: "Some said that
labour reform would beef up formal employment. That has not
happened."
"A pretty clear pattern is being consolidated: if nothing weird
happens, in the best of cases, the situation of the workers will
not improve," said Campos, the report notes.
The researcher further highlighted that the fall in employment has
possibly been conditioned by the downturn of activity in March,
especially in industry and construction, though he noted that the
relationship between both variables has not been linear in recent
months, the report notes. In his analysis, "employment was not
informed of the rebound," the report adds.
The perspectives look challenging. To Campos, the scenario "looks
ugly" due to the wage recovery verified in the second half of 2024
already running out of steam. Consumption, he warns, is barely
holding up by extraordinary means, the report discloses.
"Credit, dollars from under the mattress, whatever. The labour
market is needing somebody to drive it," Campos summed up, the
report adds.
About Argentina
Argentina is a country located mostly in the southern half of South
America. Its capital is Buenos Aires. Javier Milei is the current
president of Argentina after winning the November 19, 2023 general
election. He succeeded Alberto Angel Fernandez in the position.
Argentina has the third largest economy in Latin America. The
country's economy is an upper middle-income economy for fiscal year
2019, according to the World Bank. Historically, however, its
economic performance has been very uneven, with high economic
growth alternating with severe recessions, income maldistribution
and in the recent decades, increasing poverty.
In March 2022, the International Monetary Fund (IMF) approved a
30-month arrangement under an Extended Fund Facility for Argentina
in the amount of SDR 31.914 billion (equivalent to US$44 billion,
or 1000 percent of quota) -- with an approved immediate
disbursement of an equivalent of US$9.65 billion. Argentina's
IMF-supported program sought to improve public finances and start
to reduce persistent high inflation through a multi-pronged
strategy.
On April 11, 2025, the IMF further approved a 48-month Extended
Fund Facility (EFF) arrangement for Argentina totaling US$20
billion (or 479 percent of quota), with an immediate disbursement
of US$12 billion, and a first review planned for June
2025 with an associated disbursement of about US$2 billion. The
program is expected to help catalyze additional official
multilateral and bilateral support, and a timely re-access to
international capital markets.
Fitch Ratings, on May 12, 2025, upgraded Argentina's Long-Term
Foreign-Currency and Local-Currency Issuer Default Rating (IDR) to
'CCC+' from 'CCC'. The upgrade reflects the launch of a new IMF
program, among other things. S&P Global Ratings, in February 2025
lowered its local currency sovereign credit ratings on Argentina to
'SD/SD' from 'CCC/C' and its national scale rating to 'SD' from
'raB+'. Moody's Ratings, in January 2025, raised Argentina's local
currency ceiling to B3 from Caa1 and the foreign currency ceiling
to Caa1 from Caa3. DBRS, Inc. upgraded Argentina's Long-Term
Foreign and Local Currency Issuer Ratings to B (low) from CCC in
November 2024.
BUENOS AIRES: S&P Affirms 'B-' LongTerm ICR, Outlook Stable
-----------------------------------------------------------
S&P Global Ratings, on July 3, 2025, affirmed its 'B-' global scale
issuer credit and issue ratings on the City of Buenos Aires. The
outlook remains stable.
Outlook
The stable outlook balances the city's solid budgetary performance
and strong cash reserves with the risks from Argentina's
substantial economic vulnerabilities and ongoing challenges to
tackle those. While President Javier Milei's administration has
undertaken comprehensive reforms designed to stabilize the economy,
Argentina's economic fundamentals remain fragile.
Downside scenario
S&P could lower the long-term ratings on Buenos Aires in the next
12 months if the central government tightens access to foreign
currency, which could impair the city's ability to service foreign
currency debt.
Upside scenario
S&P said, "The City of Buenos Aires' SACP is four notches above our
final rating. Because Argentine local and regional governments
(LRGs) do not meet the conditions for us to rate them above the
sovereign, an upgrade of the city would require an improvement in
our transfer and convertibility (T&C) assessment of Argentina and
the predictability of the fiscal federal system, either of which
would likely stem from the sovereign's improved creditworthiness.
"An upgrade of Argentina and an improvement in our T&C assessment
would depend on successful execution of policies that reduce the
country's major macroeconomic imbalances and vulnerabilities,
setting the stage for sustainable fiscal outcomes, lower inflation,
and continued economic recovery. In such a scenario, the government
would have better access to voluntary capital market funding, which
would also augur well for LRGs."
Rationale
S&P revised up the City of Buenos Aires' SACP to 'bb' from 'bb-',
reflecting the city's stronger balance sheet, with cash reserves
that could cover all of its debt stock. The city's financial
management has experience at navigating the fluctuations of
Argentina's economic and political landscape. During periods of
significant economic stress, the management has leveraged the
city's robust economy to implement actions that have resulted in a
resilient financial profile.
Since 2022, Buenos Aires has generated fiscal surplus, despite high
revenue volatility and sharp foreign exchange fluctuations. Changes
in the national political leadership have led to inconsistency in
policies and shifts in policy direction, including legal disputes
around the city's transfers that have affected revenues in the
past. S&P captures this risk in our very volatile and underfunded
assessment for Argentina's institutional framework, which
ultimately caps its ratings on Argentine LRGs at Argentina's T&C
assessment.
The economic recovery and slowing inflation will allow for more
ambitious budget planning
S&P said, "After two consecutive years of economic contraction, we
expect Argentina's GDP to grow 5.2% in 2025 and average 3.0% in
2026-2027. We forecast the economic rebound to raise the city's GDP
per capita to $40,200 in 2025, well above Argentina's average of
$16,000 and higher than that of all Latin American peers.
"That said, we think risks to our growth outlook are substantial,
given Argentina's still fragile economic fundamentals and global
uncertainty." Moreover, per capita GDP indicators may be
overestimated by some appreciation of the Argentine peso.
Regardless, the city's wealth has underpinned infrastructure
coverage above that of other LRGs in emerging markets, along with
higher formality in the economy. These structural strengths have
helped mitigate economic volatility and episodes of negative
intervention from the central government.
Argentina has weak institutions and a history of major swings in
economic policy following shifts in political leadership. The ratio
of coparticipation (transfers from the national government to LRGs)
revenue-sharing corresponding to the City of Buenos Aires has been
a source of dispute with the national government over the past few
years, which increased the volatility of the city's operating
revenues beyond the impacts of economic performance fluctuations.
As a result of the recent political disputes, transfers from the
national government fell over 25% in real terms in 2021 and again
in 2023, but began recovering in 2024 after the Supreme Court of
Argentina ruled in favor of the city.
The city's management has gained experience in navigating volatile
macroeconomic conditions and policy shifts at the national level by
quickly adapting fiscal policies. After prolonged uncertainty,
policymaking has become more cautious, prioritizing the
consolidation of financial buffers over ambitious capital
expenditure (capex) projects. The creation of a countercyclical
fund by the city's outgoing administration in December 2023
reflects that caution.
S&P said, "However, we think as the Argentine economy stabilizes,
the city may be able to extend its planning horizon. The
administration has already announced large-scale infrastructure
projects, the execution of which we expect to extend beyond the
current governing period."
The city's strong revenue base and high cash reserves mitigate the
risk from revenue volatility stemming from changes to transfers
S&P said, "We expect the operating surplus to average 18% of
operating revenues in 2025-2027, a slight erosion from 20% in
2023-2024. While the economy has rebounded more strongly than we
anticipated, local tax collection remains subdued." In the first
half of this year, tax revenues grew just in line with inflation.
This partly reflects the reduction of the central bank outstanding
remunerated liabilities after it transferred debt to the national
treasury. This reduction has markedly deteriorated the tax base of
the city's emergency tax on financial gains from central bank
holdings last year.
That said, transfers from the national government are more than
compensating for the weak local tax collection. National grants
represent less of the city's revenues (10% in 2023 versus 50% on
average for Argentine LRGs) but have doubled following the
settlement of the coparticipations dispute in August 2024. S&P's
expect transfers to stabilize at about 20% of operating revenues,
assuming that the national government will continue to honor its
transfers commitment going forward.
Revenue volatility has prompted the city to maintain cautious
spending since the beginning of Mayor Jorge Macri's term in
December 2023. High inflation has provided some budgetary
flexibility, but periodic payroll adjustments have limited room for
long-term planning. More stable prices and a consistent exchange
rate policy are key to developing and executing large
infrastructure plans, in our opinion.
S&P said, "We forecast a gradual rise in public works in 2025 and
2026, assuming that more favorable economic conditions will enable
the city to ease its cost-control measures. The city has announced
ambitious transportation infrastructure goals, including replacing
subway cars and constructing a new subway line. We expect these
long-term projects to gradually increase capex to nearly 20% of
total expenditures, up from 15% in 2024. That said, we expect the
city to finance the capex with its own cash flow, leading to nearly
balanced accounts in 2025-2027, from a 5% surplus in 2023-2024."
Years of fiscal surplus have allowed the city to deleverage
significantly. In June 2025, Buenos Aires made the first
amortization payment on its Tango bond, reducing the debt stock to
$1.2 billion from $2.8 billion in 2020. S&P anticipates that the
debt stock will remain around 15% of operating revenues over the
next two years and interest will remain below 2% of operating
revenues.
S&P said, "While conditions for tapping global markets have
improved over the past year, we believe the city will access
capital markets only to improve its debt profile. We think it will
prioritize a more balanced currency mix (nearly all debt is now
denominated in foreign currency) without adding pressure to the
interest burden." In December 2024, the city launched a purchase
offer on the Tango bond with the intention to extend its debt
maturity. However, the buyback did not reach the city's target to
justify the issuance of refinancing notes, so the operation was
postponed.
High cash reserves will also support a potential limited increase
in the debt burden. Current liquidity could cover debt payments for
the next 24 months, including the remaining two amortizations of
the Tango bond of nearly $300 million each. Part of the accumulated
cash ($350 million) is allocated in the city's countercyclical fund
created in 2023, which should support adequate debt coverage.
However, the bulk of liquidity is in domestic currency, and the
fund's investment rules have yet to be defined.
In accordance with S&P's relevant policies and procedures, the
Rating Committee was composed of analysts that are qualified to
vote in the committee, with sufficient experience to convey the
appropriate level of knowledge and understanding of the methodology
applicable. At the onset of the committee, the chair confirmed that
the information provided to the Rating Committee by the primary
analyst had been distributed in a timely manner and was sufficient
for Committee members to make an informed decision.
After the primary analyst gave opening remarks and explained the
recommendation, the Committee discussed key rating factors and
critical issues in accordance with the relevant criteria.
Qualitative and quantitative risk factors were considered and
discussed, looking at track-record and forecasts.
The committee's assessment of the key rating factors is reflected
in the Rating Component Scores above.
The chair ensured every voting member was given the opportunity to
articulate his/her opinion. The chair or designee reviewed the
draft report to ensure consistency with the Committee decision. The
views and the decision of the rating committee are summarized in
the above rationale and outlook. The weighting of all rating
factors is described in the methodology used in this rating
action.
Ratings list
Ratings Affirmed
Buenos Aires (City of)
Issuer Credit Rating B-/Stable/--
Senior Unsecured B-
CORDOBA PROVINCE: Sells US$725 Million of Debt Abroad
-----------------------------------------------------
Kevin Simauchi at Bloomberg News reports that Argentina's Cordoba
Province tapped fixed-income investors on June 25, 2025 in the
country's first international debt sale by a local government since
President Javier Milei took office in late 2023.
Cordoba, 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, Bloomberg News notes. 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, according to Bloomberg News.
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 says.
Cordoba's sale follows a flurry of emerging market borrowers
rushing to credit markets this week 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 notes.
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, according to Bloomberg News. 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 relays.
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.
As reported in the Troubled Company Reporter-Latin America on June
27, 2025, Fitch Ratings has assigned an expected long-term rating
of 'CCC+(EXP)' to the Province of Cordoba's proposed senior
unsecured notes of up to USD800 million. These notes are
denominated in USD and, according to the preliminary documents,
will accrue a fixed interest rate to be determined at issuance. The
notes will amortize one-third of the total principal in years five,
six, and seven. Interest will be payable semiannually, and the
notes will mature in seven years.
EDENOR: S&P Raises ICR to 'B-', Outlook Stable
----------------------------------------------
S&P Global Ratings, on June 30, 2025, raised its issuer credit
rating on Argentina-based utility Empresa Distribuidora y
Comercializadora Norte S.A. (Edenor) and the issue rating on its
debt to 'B-' from 'CCC+'. S&P also revised the stand-alone credit
profile to 'b-' from 'ccc+'.
The outlook is stable, mirroring the sovereign's and reflects S&P's
expectation that Edenor will present relatively stable and
manageable credit metrics.
S&P Global Ratings expects Edenor to improve its operational and
financial performance following ENREs recent approval of the
integral tariff review that will applicable during the next five
years.
S&P said, "We updated our base case scenario incorporating the new
tariff scheme and expect now Edenor's cash flow will be more stable
and predictable, with EBITDA margins around 10%-12% over the next
12 months, enabling the company to continue its demanding capital
expenditure (capex) plan.
"We think the new rate approval will improve Edenor's cash flow
predictability, liquidity, and capital structure. BUENOS AIRES (S&P
Global Ratings) June 30, 2025—S&P Global Ratings took the ratings
actions described above. On April 29, 2025, Argentina's energy
regulator (ENRE) approved a new rate schedule for energy
distribution companies. The new schedule has a predictable
mechanism with monthly adjustments starting in May. The monthly and
automated adjustments are based on Argentina's consumer and
producer price indices. The new framework also established a rate
mechanism and quality service guidelines for the distribution
sector for the next five years, eliminating Edenor's dependence on
discretionary adjustments from the government, which we view as a
credit positive.
"We will closely monitor the compliance of this new mechanism, as
we still consider the regulatory framework weak." While the current
government has initiated a long-term radical change in electricity
regulation, Argentina's economy has endured many years of
regulatory unpredictability and lacking transparency.
Moreover, the ratings on Edenor incorporate the regulatory
liabilities of Argentina peso (ARS) 290 billion owed to the
wholesale market administrator, Compania Administradora del Mercado
Mayorista Electrico S.A. (Cammesa). S&P said, "The company has
adhered to various payment plans to repay all of its obligations
and as of to date is in full compliance with its payments, while we
expect this to continue as long as the rate scheme is respected. In
our view, the need to face these payments place Edenor in a weaker
position compared to similarly rated peers."
S&P said, "We expect the new framework to improve the company's
operational performance. We now forecast EBITDA of close to US$240
million for this year and approximately US$300 million in 2026,
with stable margins of 10%-12%. The higher forecast for 2026 owes
to an expected increase in energy demand given heightened economic
activity in Argentina; reduced energy losses resulting from ongoing
investment plans; and the proration provided by the regulator to
recover overdue revenue, cover unrecognized costs in previous
adjustments, and compensate for delays in implementing the rate
review.
"We expect a leverage ratio close to 1.5x-2.5x for the next 24
months and funds from operations exceeding 40%. Additionally, we
believe Edenor will continue executing its annual capex plan of
approximately US$250 million, aiming at keeping its network
updated. Under this new mechanism, we forecast Edenor will use debt
and internal cash flow generation to finance capex without severely
weakening its liquidity.
"The stable outlook on Edenor mirrors that on Argentina. This is
because, under a sovereign stress scenario, the company could
experience restrictions on accessing, converting, and transferring
money abroad. Additionally, it reflects our expectations that the
company will maintain stable and predictable operational cash flow
over the next 12 months, given the new monthly adjustment mechanism
that will allow the company to meet its financial obligations and
investment plan without affecting its liquidity.
"We could downgrade Edenor in the next 12 months if the Argentine
central bank reimposes restrictions on accessing foreign currency,
worsening our assessment of the country's transfer and
convertibility risks, which we do not anticipate at this stage. We
could consider a downward revision of the ratings on Edenor ratings
if the rate adjustment mechanism is suspended or modified for
inflationary purposes, affecting the company's cash flow,
liquidity, and capital structure.
"A rating upgrade requires an upward revision of our transfer and
convertibility assessment for Argentina and a longer track record
of revenue collection under the new rate-adjustment mechanism for
2025-2030, which we deem unlikely in the next 12 months."
===============
B A R B A D O S
===============
BARBADOS: Moody's Rates New $500MM Senior Unsecured Bond 'B2'
-------------------------------------------------------------
Moody's Ratings has assigned a B2 rating to Government of Barbados'
senior unsecured bond of USD500 million maturing in June 2035.
According to the terms and conditions available to us, the notes
will constitute direct, unconditional and unsecured obligations of
the Government of Barbados (the issuer) and will rank pari passu
among themselves and equally with all other unsecured and
unsubordinated external obligations of the government.
The rating mirrors the Government of Barbados long-term issuer
rating of B2.
RATINGS RATIONALE
The B2 rating assigned to the Government of Barbados' new US$500
million senior unsecured bond is in line with the sovereign's
long-term issuer ratings. The bond ranks pari passu with existing
external debt obligations and features an 8.0% coupon, paid
semi-annually, and maturing in June 2035 with semi-annual
amortization beginning in December 2030.
The bond includes a natural disaster and pandemic clause (NDPC),
which allows Barbados to defer debt service for two years following
a qualifying event. The events that can trigger a deferral of debt
service payments are clearly defined and partly externally
verified, including specific payouts from the Caribbean Catastrophe
Risk Insurance Facility (CCRIF) for natural disasters , or a
pandemic declared by the World Health Organization (WHO) that also
leads the Government of Barbados to declare a public health
emergency as well as either a GDP contraction of 5% over two
consecutive quarters relative to the same two quarters of the
previous fiscal year, or an announcement by the government of
pandemic-related spending above US$18.75 million.
Moody's considers the clauses to be clearly specified and
contractually embedded, with no change to the original payment
promise if the NDPC is triggered. Deferred payment of principal and
interest are recapitalized and start accruing interest when they
become due and repaid over the remaining life of the bond with no
extension of final maturity.
The terms of the bond also specify a maximum of two deferrals
throughout the life of the bond, event-of-default acceleration
clauses, and the ability of bondholders who control a 50% of
outstanding principal to block activation of the deferral clause.
The B2 rating of Barbados incorporates Moody's assessments of "ba3"
economic strength, reflecting the economy's limited diversification
and historically weak, but improving economic growth. Moody's
assesses the strength of Barbados' institutions and governance at
"ba1" to reflect Barbados relatively strong rankings on Worldwide
Governance Indicators, balanced against the recent sovereign
default. Moody's also notes that meaningful institutional changes
to the functioning of the central government, central bank and
state-owned enterprise (SOE) sector are underway and have supported
fiscal consolidation and debt sustainability. Barbados credit
profile also reflects "b3" fiscal strength due to the sovereign's
high debt burden balanced against improved fiscal performance since
the debt restructuring. Moody's assessments of Barbados'
susceptibility to event risk is set at "ba" driven by elevated
government liquidity risk and external vulnerability risk.
The stable outlook reflects Moody's expectations that past reforms
efforts have strengthened Barbados' economic resilience, increasing
the sovereign's shock-absorption capacity. The continued execution
of Barbados economic reforms and the government's commitment to
fiscal prudence anchor Moody's expectations for a steady reduction
in government debt. In addition, Barbados external position has
strengthened, reflected in an adequate foreign exchange buffer,
supporting its ability to respond to external shocks. Although
Barbados has enjoyed strong post-pandemic growth performance, its
economy remains reliant on tourism and vulnerable to external
shocks. In this event, Moody's expects Barbados government will
maintain prudent fiscal policies in line with its medium-term
fiscal framework.
ENVIRONMENTAL, SOCIAL, GOVERNANCE CONSIDERATIONS
Barbados' ESG Credit Impact Score (CIS-3) reflects its high
exposure to environmental risks related to climate change and
social risks related to aging population, which is mitigated by
efforts to improve climate resilience, improve immigration policies
and strong governance.
Barbados' environmental issuer profile score (E-4) reflects the
economy's exposure to environmental risks due to the impact of
weather-related shocks, which are expected to increase in severity
due to climate change. Exposure to physical climate risk and high
water stress negatively impacts performance in the tourism sector,
a key industry for the island. Barbados' exposure is somewhat
mitigated through ongoing efforts to improve resilience to shocks,
transition to renewable energy sources, and support from
development partners.
Exposure to social risks (S-3) reflects negative demographic
trends, balanced against adequate provision of basic services, a
welfare state, and relatively strong education outcomes. Future
social pressure may arise if economic growth weakens, reducing
support from economic reforms and leading to weaker fiscal
consolidation. The government efforts to attract inward migration
to the island, particularly from Barbadians abroad would contribute
to stronger potential growth and mitigate those risks.
Relatively strong institutions and governance framework support
Barbados' credit profile, balanced against a recent history of
default, leading to a moderately negative exposure to governance
risk (G-3 issuer profile score).
GDP per capita (PPP basis, US$): 22,062 (2024) (also known as Per
Capita Income)
Real GDP growth (% change): 4% (2024) (also known as GDP Growth)
Inflation Rate (CPI, % change Dec/Dec): 3.5% (2024)
Gen. Gov. Financial Balance/GDP: -1.6% (2024) (also known as Fiscal
Balance)
Current Account Balance/GDP: -6.9% (2024) (also known as External
Balance)
External debt/GDP: 36.8% (2024)
Economic resiliency: ba2
Default history: At least one default event (on bonds and/or loans)
has been recorded since 1983.
On June 27, 2025, a rating committee was called to discuss the
rating of the Barbados, Government of. The main points raised
during the discussion were: The issuer's economic fundamentals,
including its economic strength, have not materially changed. The
issuer's fiscal or financial strength, including its debt profile,
has not materially changed
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATING
As the bond rating is positioned in line with the sovereign's
long-term issuer rating, a change in Barbados B2 ratings would
affect the rating of this debt instrument.
Barbados' ratings could be upgraded if continued fiscal
consolidation and structural reforms lead to a sustained decline in
debt and improved affordability. Higher economic growth, supported
by competitiveness-enhancing reforms could also support an
upgrade.
Conversely, the rating could face downward pressure if external
shocks or weaker policy effectiveness reverse fiscal gains or
reduce financing options. Renewed pressure on foreign exchange
reserves could also lead to negative rating action.
The principal methodology used in this rating was Sovereigns
published in November 2022.
The weighting of all rating factors is described in the methodology
used in this credit rating action, if applicable.
Barbados economic strength is set at "ba3", below the initial score
of "ba1", to reflect short track-record of stronger real GDP growth
compared to average growth rates, and Barbados exposure to external
shocks that may weaken growth performance in the near-term.
Barbados institutions and governance strength is set at "ba1",
below the initial score of "baa3" on account of recent history of
default. The final score for fiscal strength is set at "b3", above
the initial score of "caa2" to account for lower exposure to
exchange rate risk due to Barbados long-standing currency peg,
despite relatively large share of foreign-currency denominated
debt. This leads to a final scorecard-indicated outcome of B1-B3,
compared to an initial scorecard-indicated outcome of Ba3-B2. The
assigned rating is within the final scorecard-indicated outcome
range.
===========
B R A Z I L
===========
F-BRASILE SPA: S&P Withdraws 'B-' Rating on $505MM Secured Notes
----------------------------------------------------------------
S&P Global Ratings withdrew its 'B-' long-term ratings on F-Brasile
S.p.A. and its $505 senior secured notes due Aug. 15, 2026,
following the completion of the company's acquisition by U.S.-based
alternative investment firm Stonepeak and the subsequent repayment
of its rated debt. At the time of the withdrawal, the outlook on
S&P's rating on F-Brasile was positive.
Following the withdrawal, Efesto Bidco S.p.A. (B-/Positive/--), the
group's ultimate parent company and issuer of the outstanding $825
million senior secured notes is now the only rated entity. S&P's
ratings on Efesto Bidco and these outstanding notes are unchanged.
S&P said, "We expect the group to continue to benefit from strong
underlying market conditions in its Aerospace and Defense division,
which generated about 74% of the group's revenue in 2024, and
should more than compensate for the prolonged slowdown in its
industrial division (the remaining 26%). In our base case, we
foresee profitability remaining high, fueled by higher volumes and
increased operating efficiencies."
NATURA COSMETICOS: S&P Affirms 'BB' ICR, Outlook Stable
-------------------------------------------------------
S&P Global Ratings affirmed its 'BB' global scale and 'brAAA'
national scale ratings on Natura Cosmeticos and withdrew the
ratings on Natura & Co Holding. The issue level rating remains
'BB,' with the recovery rating maintained at 3 (65%).
The stable outlook reflects S&P's continued view that Natura will
gradually improve profitability while sustaining leverage below
2x.
Incorporating the holding company doesn't change our rating
analysis of Natura Cosmeticos or its debt.
On July 1, 2025, Natura Cosmeticos fully incorporated its parent
company Natura & Co Holding S.A., aiming to simplify its corporate
structure, reduce corporate expenses, and optimize tax
efficiencies. All subsidiaries, including debt holders and Avon
subsidiaries, will now be under Cosmeticos, while Natura & Co will
no longer exist.
Natura Cosmeticos' credit quality reflects the consolidated
analysis of Natura & Co.
S&P's current analysis considers the consolidated operations and
financials of the holding company, which includes the full
operation of Cosmeticos and the other subsidiaries that will
migrate to Cosmeticos on July 1. The change also doesn't affect our
ratings on the company's bonds, because they are already guaranteed
by Cosmeticos and don't have a clause triggering early redemption
due to this restructuring.
The group decided to simplify its corporate structure to optimize
corporate expenses and tax efficiencies. Because of the sales of
Aesop and The Body Shop in recent years, Cosmeticos already
represented more than 80% of the group's revenue and almost 100% of
its EBITDA generation expected for 2025.
S&P said, "We continue to expect margins to gradually recover. We
think the company will conclude the second wave of its integration
of Natura and Avon brands in Latin America in 2025, with the
rollout in Mexico in the third quarter. This comes after a rollout
in Argentina in the second quarter, and the consolidation of this
process in Brazil and other countries such as Colombia and Chile.
"As a result, we expect net revenue to grow by over 20% (with Avon
International consolidated throughout 2025) and adjusted debt to
EBITDA to remain below 2.0x in 2025 and to continue to fall as
profitability improves.
"We have updated our forecasts, with improvements in profitability
and the top line. That reflects the improved profitability of the
past quarters, and the first fruits of the brand integration in
Latin America. Nevertheless, we expect free operating cash flow
will remain slightly negative in 2025 and turn positive in 2026, at
over Brazilian real (R$) 800 million.
"The stable outlook reflects our expectation that Natura will
continue to improve profitability while it integrates Natura and
Avon's brands in Latin America in 2025. Additionally, the company
will continue to seek solutions to Avon International assets. We
expect no meaningful mergers or acquisitions in the coming years
and controlled shareholder remuneration through dividends and share
buybacks.
"We could downgrade Natura in the next 12 months if the improvement
in profitability stalls, dragging down the company's cash
generation and increasing leverage. Also, we could lower the
ratings if the group becomes more aggressive in terms of mergers
and acquisitions or shareholder returns, with net debt to EBITDA of
about 4x.
"Although unlikely, we could upgrade Natura in the next 12 months
if it successfully integrates Natura and Avon brands across its
Latin American operations, improving profitability and cash
generation. An upgrade would also require Natura to maintain a
conservative financial policy regarding leverage and shareholder
payments. We would expect net debt to EBITDA to remain below 2x,
funds from operations to debt above 45%, and free operating cash
flow to debt above 15%."
===============
C O L O M B I A
===============
ECOPETROL SA: Moody's Affirms 'Ba1' CFR, Outlook Remains Stable
---------------------------------------------------------------
Moody's Ratings affirmed Ecopetrol S.A.'s ("Ecopetrol") b1 Baseline
Credit Assessment (BCA) and its Ba1 corporate family rating and
senior unsecured ratings. The outlook remains stable.
RATINGS RATIONALE
Ecopetrol's Ba1 ratings reflect the company's status as Colombia's
leading oil and gas producer, accounting for about 60% of the
country's production and 100% of oil product supply, as well as its
large power transmission business in Colombia and other countries
in Latin America.
Furthermore, Moody's assumes high probability of support from the
Government of Colombia (Baa3 stable) and a moderate default
dependence between the two entities; this assessment results in a
three-notch uplift of Ecopetrol's rating to Ba1 from its b1
Baseline Credit Assessment (BCA), which reflects the company's
intrinsic credit risk without support considerations. The Colombian
government's commitment to supporting Ecopetrol has been evidenced
in part by its decision to phase out fuel subsidies—starting with
gasoline and with plans to extend to diesel—which has contributed
to improved liquidity for the company, as reflected in the decline
of FEPC-related accounts receivable since 2024 and expected to
continue in 2025.
Ecopetrol's b1 Baseline Credit Assessment (BCA) reflects the
company's leverage, equivalent to 2.3x gross debt/EBITDA per the
last twelve months as of March 2025, its ambitious investment plan,
and its aggressive financial policies regarding dividend
distribution, as it distributed a share above its policy range of
40-60% in the last two years. These factors are partially mitigated
by its increasing production, a reduction on receivables related to
the fuel subsidies received from the Fondo de Estabilización de
Precios de los Combustibles (FEPC), supporting the company's
liquidity and lower refinancing risk until at least 2029.
Ecopetrol's liquidity position is good. During the 12-month period
ending in March 2025, Ecopetrol registered a positive free cash
flow of $430 million and its cash position equaled $3.3 billion.
Moody's expects that in 2025 the company's cash generation along
with the Government's transfer to compensate fuel subsidies will be
enough to cover mandatory cash obligations plus annual capital
expenditures of about $5.5 billion, as per management's guidance,
and dividends. However, Moody's expects that liquidity will be
tight during 2026 and 2027 per Moody's expectations that capex will
remain around $6 billion, and if dividend distributions continue to
outpace the policy range.
Moody's expects Ecopetrol's financial obligations will continue to
be supported by access to global and Colombian capital markets, and
government support. Ecopetrol's Ba1 ratings also take into
consideration the solid and relatively stable cash flow from its
power transmission company, Interconexion Electrica S.A. E.S.P.
(ISA) and its midstream subsidiary, Cenit SAS, which includes
Oleoducto Central S.A. that represented 40% of the company's
EBITDA.
The stable outlook on Ecopetrol's ratings reflects Moody's views
that its credit profile will remain mostly unchanged over the next
12-18 months.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
An upgrade on Ecopetrol's Ba1 ratings is unlikely over the next
12-18 months because Moody's expects the company's credit metrics
to remain relatively stable. However, if the company manages to
strengthen its financial policies and simultaneously demonstrates
ability to register recurrent positive free cash flow, reduce
financial leverage while growing production and keeping proved
reserve life at least stable, its ratings could be upgraded.
Specifically, its rating could be upgraded if the company's
Leverage Full Cycle Ratio remains at 1.5 times, which would
indicate stable finding and development costs, and retained cash
flow/net debt would have to be over 40% on a sustained basis.
A ratings downgrade could occur if there is a deterioration in
Ecopetrol's operating performance, including a significant decline
of its reserve life on a sustained basis, or increasing liquidity
risk or debt leverage from the current levels; or if retained cash
flow/net debt declines to around 15%.
In addition, because Ecopetrol's ratings benefit from implicit
support from the Government of Colombia, a negative action on the
government's rating or a change in Moody's assumptions about
government support could lead to a negative action on Ecopetrol's
ratings.
Profile
Ecopetrol, 88.5% owned by the Government of Colombia, is the
largest integrated oil and gas company in the country. The company
has three business segments, namely hydrocarbons, energies for the
transition and energy transmission and toll roads. Its net
production averaged close to 677 mboed and total assets amounted to
COP $71.6 billion on March, 2025.
ISA, headquartered in Medellin, Colombia, is an operating holding
company with businesses in the electricity transmission, toll
roads, telecommunications, and systems management sectors. The
company holds direct and indirect ownership stakes in a portfolio
of subsidiaries located in Colombia, Brazil, Peru, and Chile.
The methodologies used in these ratings were Integrated Oil and Gas
published in September 2022.
The net effect of any adjustments applied to rating factor scores
or scorecard outputs under the primary methodology(ies), if any,
was not material to the ratings addressed in this announcement.
===================================
D O M I N I C A N R E P U B L I C
===================================
DOMINICAN REPUBLIC: Central Bank Growth Stabilize Economy
---------------------------------------------------------
Dominican Today reports that the Central Bank's 81 million peso
injection into productive sectors to boost the Dominican economy,
combined with the 3.1% economic growth during May, has provided
reassurance and halted the speculation that fueled pessimism.
The 3.1% year-on-year economic growth announced by the BCRD
eliminates speculation fueled by economists and paid spokespersons
who have relied more on internal realities than on external factors
such as the wars, suggesting that the institution was not
well-focused, according to Dominican Today. Opposition sectors
would also like to capitalize on this unrest.
For years, as head of the Central Bank, Governor Héctor Valdez
Albizu has maintained an optimistic outlook regarding the
management and performance of the Dominican economy, the report
notes. However, recently, speculation has arisen due to a decline
in the dollar's premium against the peso. Despite this, the
currency has demonstrated its strength in difficult external
circumstances, the report relays.
The figure released on June 28, 2025, shows an increase greater
than the 1.7% year-over-year increase recorded in April, driven
mainly by the performance of mining, agriculture, local
manufacturing, and construction, the report says.
"In this way," the BCRD statement states, "the accumulated economic
growth for the period January-May 2025 stands at 2.6% compared to
the same period last year," the report notes.
It notes that restrictive financial and liquidity conditions
prevail globally, reflected in relatively high interest rates in
capital markets, the report discloses.
The document states that "restrictive financial and liquidity
conditions prevail globally, reflected in interest rates that
remain relatively high in the capital markets," the report relays.
The report relays that it also points out that "high volatility in
the prices of financial assets (bonds, stocks) and commodities, in
an international environment characterized by growing uncertainty,
has been exacerbated by the recent escalation of the conflict in
the Middle East between Israel and Iran."
The report notes that the BCRD document quotes Kristalina
Georgieva, director of the International Monetary Fund (IMF), as
warning that "these geopolitical tensions would not only affect
energy prices, but would also have implications for risk premiums
and logistics costs."
BC Boosts The Economy
Last week, the Central Bank's Monetary Board announced the
injection of 91 million pesos to boost the economy in its key
sectors, including construction, manufacturing, exports,
agriculture, and micro, small, and medium-sized enterprises, which
have a broad impact, the report discloses.
These funds would be applied through the release of 50 billion
pesos from the legal reserve, 17 billion pesos due in six months
for final debtors, and another 14 billion pesos pending from
facilities arranged in 2024, the report relays. The funds should
be granted at a rate no higher than 9% and for a term of up to two
years, the report discloses.
The BCRD statement explaining the measure states that the Monetary
Board "took into consideration the high levels of uncertainty and
volatility in the international landscape associated with multiple
geopolitical conflicts worldwide; as well as the liquidity levels
of the financial system, the upward trend in interest rates
nationwide, and the moderation of credit to the productive
sectors," the report notes.
The Central Bank's decision comes at the right time, in response to
complaints from some sectors that "there is no money on the
streets," while others linked to businesses argue that interest
rates are too high, the report says. The measure is designed to
promote greater economic growth, the report relays.
The report adds the injection of 81 billion pesos seeks to expand
credit to the private sector and, more generally, to increase the
dynamism of the Dominican economy "in a context of price stability
and strong macroeconomic fundamentals."
About Dominican Republic
The Dominican Republic is a Caribbean nation that shares the island
of Hispaniola with Haiti to the west. Capital city Santo Domingo
has Spanish landmarks like the Gothic Catedral Primada de America
dating back 5 centuries in its Zona Colonial district. Luis Rodolfo
Abinader Corona is the current president of the nation.
TCR-LA reported in April 2019 that Juan Del Rosario of the UASD
Economic Faculty cited a current economic slowdown for the
Dominican Republic and cautioned that if the trend continues,
growth would reach only 4% by 2023. Mr. Del Rosario said that if
that happens, "we'll face difficulties in meeting international
commitments."
An ongoing concern in the Dominican Republic is the inability of
participants in the electricity sector to establish financial
viability for the system.
Standard & Poor's credit rating for Dominican Republic was raised
to 'BB' in December 2022 with stable outlook. Moody's credit
rating for Dominican Republic was last set at Ba3 in August 2023
with the outlook changed to positive. Fitch, in December 2023,
affirmed the Dominican Republic's Long-Term Foreign-Currency Issuer
Default Rating (IDR) at 'BB-' and revised the outlook to positive.
=============
J A M A I C A
=============
DOLPHIN COVE: Mexican Directors Removed From Board
--------------------------------------------------
RJR News reports that all four Mexican directors were removed from
the board of Dolphin Cove, leaving only the Jamaican directors.
In a notice recently posted to the Jamaica Stock Exchange's
website, the company said the four removed from the company's board
under Article 94(h) of its Articles of Incorporation, according to
RJR News.
Under this article, which was used to remove chairman and founder
Stafford Burrowes, a director can be asked by instrument to resign
from the board if the owners of more than 51% of the stock deliver
this request to the company's registered office for the company
secretary's attention, the report adds.
About Jamaica
Jamaica is an island country situated in the Caribbean Sea. Jamaica
is an upper-middle income country with an economy heavily dependent
on tourism. Other major sectors of the Jamaican economy include
agriculture, mining, manufacturing, petroleum refining, financial
and insurance services.
On Feb. 21, 2025, Fitch Ratings affirmed Jamaica's Long-Term
Foreign-Currency Issuer Default Rating (IDR) at 'BB-', with a
positive rating outlook. In October 2023, Moody's upgraded the
Government of Jamaica's long-term issuer and senior unsecured
ratings to B1 from B2, and senior unsecured shelf rating to (P)B1
from (P)B2. The outlook has been changed to positive from stable.
In September 2024, S&P affirmed 'BB-/B' longterm foreign and local
currency sovereign credit ratings on Jamaica and revised outlook to
positive.
MARIA SOCORRO LUGO: San Juan Property Not Part of Bankr. Estate
---------------------------------------------------------------
Judge Maria de los Angeles Gonzalez of the United States Bankruptcy
Court for the District of Puerto Rico granted the motion for relief
from stay and/or to determine that foreclosed property is not part
of María Socorro Figueroa Lugo's bankruptcy estate filed by Island
Portfolio Services LLC, as servicer for PR Recovery and Development
JV, LLC.
Island Portfolio argues that the real estate property in question
is not part of Debtor's bankruptcy estate and, therefore, is not
subject to the automatic stay. Debtor opposes and requests, in
part, that the Court pierce the corporate veil in her favor as she
has been the alter ego of The Woman from Mallorca, Inc.
("Corporation") and extend the automatic stay to the non-debtor
Corporation under 11 U.S.C. Sec. 105(a). Debtor also argued that
the Corporation was cancelled by the Puerto Rico Department of
State on Dec. 30, 2023, and that Island Portfolio had reached an
agreement with Debtor and the Corporation prior to the filing of
the petition, for the repayment of the amount owed, but failed to
honor such agreement.
On Feb. 7, 2013, Banco de Desarrollo Economico de Puerto Rico,
Island Portfolio's predecessor in interest, granted the Corporation
certain credit facilities in the total amount of $1,493,286. On the
same date, the Corporation executed a mortgage note in the amount
of $1,493,286 in favor of BDE or to its order. The Mortgage Note is
secured by Deed of Mortgage No. 10 executed on Feb. 7, 2013, which
was duly registered under the Karibe system in the Property
Registry of Puerto Rico.
The mortgage encumbered a property recorded at page 213 of volume
86 of San Juan Antiguo, property number 829, Property Registry of
San Juan, First Section.
Additionally, Debtor signed an Unlimited and Continuing Guarantee,
whereby she stood as a personal guarantor for the Loan.
On Sept. 7, 2018, the Mortgage Note that encumbered the Property
was duly endorsed in favor of PR Recovery. Island Portfolio, as
servicer for PR Recovery, is the current holder of the Mortgage
Note.
On April 8, 2019, PR Recovery filed a collection of monies and
foreclosure complaint against the Corporation, Iron Sphynx, Corp.
and Debtor ("Co-Debtors") with the Court of First Instance of
Puerto Rico, Superior Court of San Juan. The state court entered
judgment against such defendants on Jan. 26, 2023. Per the Judgment
the Corporation is the title owner of the Property.
On Nov. 22, 2023, Co-Debtors appealed the Judgment with the Puerto
Rico Court of Appeals. The Puerto Rico Court of Appeals affirmed
the Judgment, on March 27, 2024.
Upon Co-Debtors' default with the terms of the Judgment, the Puerto
Rico Court of First Instance issued an Order and Writ of Execution
of Judgment, on Jan. 21, 2025, which included the foreclosure of
the Property. The judicial sale of the Property was scheduled for
April 7, 2025.
The judicial sale of the Property was held, as scheduled, on April
7, 2025. The Property was awarded to Island Portfolio for
$1,493,286.
On April 15, 2025, Debtor filed Adversary Proceeding No. 25-00019
against Island Portfolio, claiming that the Property is part of
Debtor's bankruptcy estate, that the automatic stay should be
extended to the Corporation and that the foreclosure proceeding
should have been stayed upon notice of Debtor's bankruptcy filing.
Island Portfolio is yet to file its answer to the complaint.
The Bankruptcy Court finds the judicial sale and the execution of
the deed of judicial sale were not in violation of the automatic
stay provision of the Bankruptcy Code. The fact that the
Corporation was cancelled by the Puerto Rico State Department on
Dec. 30, 2023, does not entail the automatic transfer of its assets
to the stockholders.
In this case, the Corporation was the titleholder of the Property
and Debtor the sole stockholder of the Corporation. Island
Portfolio sued both, the Corporation as titleholder of the Property
and Debtor as guarantor, and the state court ordered the
foreclosure of the Property. At no time during the extended State
Court Case did Debtor allege that the Property was hers, and the
state court in its rulings always recognized that the Property
belonged to the Corporation. Now that Debtor seeks the
applicability of the automatic stay to the Property, she alleges
that the Corporation was her alter ego and thus she has an interest
in the Property.
According to the Bankruptcy Court, generally, a sole stockholder
cannot pierce the corporate veil in the traditional legal sense
because veil piercing is a remedy used against shareholders, not by
them. In fact, under Puerto Rico corporate law, the stockholder of
a corporation may not request the piercing of the corporate veil
when the structure of the corporation is inconvenient to the
stockholder in detriment of creditors.
Debtor is requesting that the Bankruptcy Court sanction an inside
reverse piercing of the corporate veil, whereby the corporate veil
would be disregarded for the benefit of the owner's creditors, not
the corporation's creditors, as opposed to an outside reverse
piercing where the creditor of the corporation requests the
piercing to access the owner's assets. However, alter ego is not a
doctrine that allows the persons who actually control the
corporation to disregard the corporate form. Debtor is requesting
that the Bankruptcy Court disregard the corporate entity to evade
the consequences of said incorporation. It will not.
Island Portfolio argues that the Bankruptcy Court lacks subject
matter jurisdiction under the Rooker-Feldman doctrine to consider
any challenge to its standing as a creditor for the Loan because
this argument was raised in the State Court Case and was fully
litigated.
The Bankruptcy Court agrees with Island Portfolio in that it lacks
subject matter jurisdiction under the Rooker-Feldman doctrine
because the claim that Island Portfolio/PR Recovery does not have
creditor standing was litigated at great length in the State Court
Case (including trial, intermediate and highest appellate forums)
and the issue is currently final and unappealable.
A copy of the Court's Opinion and Order is available at
https://urlcurt.com/u?l=W2ywYc
Maria Socorro Figueroa Lugo filed for Chapter 11 bankruptcy
protection (Bankr. D.P.R. Case No. 25-01546) on April 4, 2025.
=====================
P U E R T O R I C O
=====================
AMBASSADOR VETERANS: Taps Vilarino & Associates as Legal Counsel
----------------------------------------------------------------
Ambassador Veterans Services of Puerto Rico LLC seeks approval from
the U.S. Bankruptcy Court for the District of Puerto Rico to hire
Vilarino & Associates, LLC as counsel.
The firm will provide these services:
(a) advise the Debtor concerning its duties, powers, and
responsibilities;
(b) advise the Debtor in connection with a determination
whether reorganization is feasible;
(c) assist the Debtor concerning negotiations with creditors
to propose and confirm a viable plan of reorganization;
(d) prepare, on behalf of the Debtor, the necessary legal
papers or documents;
(e) appear before the bankruptcy court, or any court in which
the Debtor asserts a claim interest or defense directly or
indirectly related to this bankruptcy case;
(f) perform such other legal services for the Debtor as may be
required in these proceedings or in connection with the operation
and involvement with its business; and
(g) employ other professional services, if necessary.
The firm will be paid at these rates:
Javier Villarino, Attorney $325 per hour
Associates $250 per hour
Paralegals $150 per hour
In addition, the firm will seek reimbursement for expenses
incurred.
The firm received a retainer in the amount of $22,262.
Mr. Villarino 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:
Javier Villarino, Esq.
Villarino & Associates LLC
P.O. Box 9022515
San Juan, PR 00902
Tel: (787) 565-9894
Email: jvillarino@vilarinolaw.com
About Ambassador Veterans Services
of Puerto Rico LLC
Ambassador Veterans Services of Puerto Rico LLC operates a nursing
and intermediate care facility for veterans in Juana Diaz, Puerto
Rico. The Company provides residential healthcare services to
eligible veterans at its location in Barrio Amuelas.
Ambassador Veterans Services of Puerto Rico LLC sought relief under
Chapter 11 of the U.S. Bankruptcy Code (Bankr. D.P.R. Case No.
25-02690) on June 13, 2025. In its petition, the Debtor reports
total assets of $2,567,403 and total liabilities of $4,068,135.
The Debtors are represented by Javier Vilarino, Esq. at VILARINO
AND ASSOCIATES LLC.
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