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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 14, 2025, Vol. 26, No. 139
Headlines
A R G E N T I N A
ARGENTINA: Milei Shutters Agencies
ARGENTINA: Prices in Buenos Aires City Rose 2.1% in June
B E L I Z E
BELIZE: Subdues Growth in Near Term While Inflation Decelerated
C A Y M A N I S L A N D S
MONTEGO BAY AIRPORT: S&P Assigns Prelim 'BB' Rating on Sec. Notes
C O L O M B I A
RUTA AL MAR: Moody's Cuts Rating on COP522BB Secured Notes to B1
D O M I N I C A N R E P U B L I C
DOMINICAN REPUBLIC: Launches RD$100MM Fund for Irrigation Systems
G U A T E M A L A
GUATEMALA: Fitch Rates 2036 and 2055 USD Notes 'BB'
GUATEMALA: S&P Assigns 'BB+' Issue Rating on $1.5BB New Notes
J A M A I C A
JAMAICA: BOJ Reports Net Profit of $20.5BB for January to June
MONTEGO BAY AIRPORT: Fitch Gives BB+(EXP) Rating on USD385MM Notes
MONTEGO BAY AIRPORT: Moody's Rates New $385MM Secured Notes 'Ba3'
M E X I C O
LEISURE INVESTMENTS: Asks Court OK for Chapter 11 Sales Process
P U E R T O R I C O
VALMAR CORP: Seeks Chapter 11 Bankruptcy in Puerto Rico
V E N E Z U E L A
VENEZUELA: Oil Revenue Surges, but Sanctions Shift Playing Field
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A R G E N T I N A
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ARGENTINA: Milei Shutters Agencies
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Buenos Aires Times reports that President Javier Milei's government
has ordered the "definitive" closure of the National Road
Administration, the National Traffic and Road Safety Commission and
the Road Safety Agency.
State agencies in charge of roads and highways will be shuttered to
make way for a new entity created to oversee private road
construction, Milei's top spokesman Manuel Adorni said at a Casa
Rosada press conference, according to Buenos Aires Times.
To replace it, Adorni said, the government will create a new body,
the Agencia de Control de Concesiones y Servicios Públicos del
Transporte ("Agency for the Control of Transport Concessions and
Public Services"), to oversee road concessions, the report notes.
As a result, the government will now "open bidding for 9,120
kilometres (5,667 miles) of roads," he added.
Adorni did not specify how many lay-offs would ensue as a result of
the decisions, but he claimed the Direccion Nacional de Vialidad
had been "created to facilitate" widespread graft, the report
relays.
"Corruption in public works has been given its death certificate,
and President Javier Milei has just signed it," referring to the
closure of the body, which supervises the maintenance and
construction of roads and motorways, the report discloses.
Confirmation of the closure of the Direccion Nacional de Vialidad,
Comision Nacional del Transito y la Seguridad Vial and Agencia
Nacional de Seguridad Vial was formalised by an announcement in
edition of the Official Gazette, the report notes.
It was accompanied by further moves to restructure at least seven
other state bodies, the report says.
The measures were announced a day before special emergency powers
Congress granted Milei for one year expired, the report relays.
The administration has said it will not seek an extension of those
powers, which enabled the Executive branch of government to take
actions usually reserved for Congress, the report discloses.
Some 65 measures enacted during this period "represent savings of
US$2 billion annually," Adorni claimed, the report relays.
The government's new plan for road control and management will see
infrastructure design and planning pass to the Economy Ministry,
with supervision and control of concessions overseen by the new
state body, the report says.
Maintenance, said the government, will be carried out by another
dedicated unit, with part of the work outsourced to private
companies, the report relays.
According to the government, the Direccion Nacional de Vialidad has
more than 5,000 employees and restructuring will save the state an
estimated US$100 million a year, the report discloses.
Chainsaw Cuts
Milei, a self-declared "anarcho-capitalist," came to power in
December 2023 wielding a chainsaw as a symbol of his plan to
restore fiscal discipline and rein in inflation, the report notes.
He has since slashed public spending by around 4.7 percent of GDP,
yanked subsidies, halted public works and dismissed tens of
thousands of public employees, the report relays.
Milei's order to close the three agencies overseeing road
maintenance and construction, traffic and road safety was
criticised by the opposition, the report discloses.
A separate government statement also announced the restructuring of
seven "inefficient" state agencies, including institutes devoted to
industrial and agricultural technology, the report relays.
No longer autonomous, their functions will be brought under the
Economy Ministry, via the Industry & Trade Secretariat and
Agriculture, Livestock & Fisheries Secretariat, the report notes.
Experts have warned the changes will damage ongoing research, the
report relays.
Workers at the Instituto Nacional de Tecnologia Industrial
(National Institute of Industrial Technology, INTI) and Instituto
Nacional de Tecnologia Agropecuaria (National Institute of
Agricultural Technology, INTA) launched protest action, resulting
in clashes with police, the report relays.
Both bodies will be "downsized," according to a government
resolution, with talks of voluntary retirement plans being offered,
the report discloses.
Other agencies eliminated include Instituto Nacional de Agricultura
Familiar Campesina, the Instituto Nacional de Semillas (National
Seed Institute, INASE) and the Instituto Nacional de
Vitivinicultura (National Institute of Viticulture, INV), the
report relates.
"The government has declared war on civil servants and turned the
state into a huge battlefield," wrote Rodolfo Aguiar, secretary
general of ATE state workers union, the report relays.
Last year, Argentina recorded its first budget surplus in a decade,
and monthly inflation reached its lowest rate in five years at 1.5
percent in May, the report notes.
But the collateral damage has been a loss of purchasing power,
jobs, and consumer spending, the report says.
For months, citizens bearing the brunt of the cuts have mounted a
weekly march to protest the austerity measures, amid a heavy
security presence, the report discloses.
Full List of 21 Bodies Affected
Argentina's government formally announced the closure, merger or
transformation of 21 public bodies, as part of its ongoing effort
to shrink the state and cut public spending, the report relays.
The move was detailed in the Official Gazette and affects agencies
linked to health, transport, agroindustry, industrial policy and
road safety, among other sectors, the report notes.
Core responsibilities previously held by the affected organisations
will be transferred to other ministries or secretariats, the report
relays. Staff will retain their positions until the new
organisational structures are put in place, the report discloses.
The government said the move followed an internal review which
found a sharp rise in the number of decentralised agencies and
their personnel. Some bodies were found to have overlapping roles,
poor internal monitoring or administrative irregularities, the
report says.
Dissolved Agencies and Their Destinations Body/Agency
Supervision passed to:
Comision Nacional del Transito y la Seguridad Vial
(National Road Safety Commission)
Undersecretariat for Automotive Transport
Agencia Nacional de Seguridad Vial (National Road Safety Agency,
ANSV)
Transport Secretariat / National Gendarmerie
Direccion Nacional de Vialidad (National Highways Directorate,
DNV)
Economy Ministry / Agencia de Control de Concesiones y Servicios
Públicos de Transporte
Fondo Fiduciario Federal de Infraestructura Regional (Federal Trust
Fund for Regional Infrastructure, FFFIR)
Economy Ministry
Fondo Nacional de Desarrollo Productivo (National Productive
Development Fund, FONDEP)
Economy Ministry
Delegaciones Sanitarias Federales (Federal Health Delegations)
Health Ministry
Agencia Regulatoria de la Industria del Cañamo y Cannabis
Medicinal (Hemp and Cannabis Regulation, ARICCAME)
ANMAT (National Administration of Drugs, Foods, and Medical
Devices) / Economy Ministry
Instituto Nacional de la Agricultura Familiar, Campesina e Indigena
(INAFCI Agriculture Institute)
Agriculture Secretariat
Instituto Nacional de Semillas (National SEed Institute, INASE)
Agriculture Secretariat
Comision Nacional de Semillas (National Seed Commission)
Agriculture Secretariat
Instituto Nacional de Medicina Tropical (Institute of Tropical
Medicine, INMET)
ANLIS-Malbran
Instituto Nacional de Prevencion de Enfermedades Cardiovasculares
(Institute for Cardiovascular Disease Prevention)
Health Ministry
SAMIC Hospital network (Servicios de Atencion Médica Integral para
la Comunidad)
Health Ministry
Restructured or merged bodies
Body/agency
New status
Comision Nacional de Regulacion del Transporte (National Traffic
and Road Safety Commission, CNRT)
Agencia de Control de Concesiones y Servicios Públicos de
Transporte (Agency for to Oversee Concessions and Public
Transport)
Junta de Seguridad en el Transporte (Transport Safety Board)
Agencia de Investigacion de Accidentes e Incidentes de Aviacion
(Aviation Accident and Incident Investigation Agency)
Instituto Nacional del Cancer (National Cancer Institute)
Unit within Health Ministry
Hospitales Nacionales e INAREPS (National Hospitals and INAREPS, )
Administracion Nacional de Establecimientos de Salud (National
Health Establishments Administration, ANES)
Instituto Nacional de Vitivinicultura (Viticulture, INV)
Unit within Agriculture Secretariat
Instituto Nacional de Tecnologia Industrial (Industrial Technology,
INTI)
Unit within Industry Secretariat
Instituto Nacional de Tecnologia Agropecuaria (Agro-Tech, INTA)
Semi-autonomous body under Agriculture Secretariat
Instituto Nacional de la Propiedad Industrial (Intellectual
Property, INPI)
Semi-autonomous body under Industry Secretariat
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: Prices in Buenos Aires City Rose 2.1% in June
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Buenos Aires Times reports that monthly inflation in Buenos Aires
picked up in June to 2.1 percent, according to data released by
City Hall official statistics bureau.
The figure is a half-point on the preceding month, when consumer
prices rose 1.6 percent, according to Buenos Aires Times. April
had seen hikes of 2.3 percent, the report notes.
Prices so far have increased by 15.3 percent in the first half of
the year – a sharp drop from previous years. Over the past 12
months, prices have risen by 44.5 percent, says City Hall, the
report discloses.
The sharpest increases in June were seen in financial services (up
3.5 percent), housing (3.1 percent) and transport (3.1 percent),
the report says.
Food prices rose by 1.6 percent, with notable hikes for bread and
baked goods (2.4 percent), meats (1.8 percent) and dairy products
(1.1 percent). These were partially offset by a 1.4 percent drop in
the price of vegetables, tubers and legumes, the report relays.
The hike in housing costs was largely driven by adjustments to
public utility rates and rental contracts, the report discloses.
Transport inflation was mainly the result of fare increases for
urban buses, along with higher fuel prices, the report says.
Health costs increased by 2.6 percent, following adjustments to
prepaid healthcare plans, the report notes. Alcoholic beverages
and tobacco rose by 2.9 percent, matching the increase in
recreation and cultural services, the report relays.
Clothing prices, by contrast, remained nearly flat, posting just a
0.3 percent uptick, the report relates.
Inflation for goods was 1.4 percent, while services increased by
2.6 percent, the report notes. Seasonal prices climbed 1.2 percent
and regulated prices rose by 2.4 percent, according to City Hall,
the report discloses.
Last month's rise in prices in the City had been widely anticipated
by private consultancy firms and is a potential precursor for the
nationwide inflation figure, due to be released by the INDEC
national statistics bureau on July 14, the report says.
Inflation dropped to 1.5 percent in May nationwide, dropping below
a monthly two percent for the first time since July 2020, the
report adds.
About Argentina
Argentina is a country located mostly in the southern half of South
America. Its capital is Buenos Aires. Javier Milei is the current
president of Argentina after winning the November 19, 2023 general
election. He succeeded Alberto Angel Fernandez in the position.
Argentina has the third largest economy in Latin America. The
country's economy is an upper middle-income economy for fiscal year
2019, according to the World Bank. Historically, however, its
economic performance has been very uneven, with high economic
growth alternating with severe recessions, income maldistribution
and in the recent decades, increasing poverty.
In March 2022, the International Monetary Fund (IMF) approved a
30-month arrangement under an Extended Fund Facility for Argentina
in the amount of SDR 31.914 billion (equivalent to US$44 billion,
or 1000 percent of quota) -- with an approved immediate
disbursement of an equivalent of US$9.65 billion. Argentina's
IMF-supported program sought to improve public finances and start
to reduce persistent high inflation through a multi-pronged
strategy.
On April 11, 2025, the IMF further approved a 48-month Extended
Fund Facility (EFF) arrangement for Argentina totaling US$20
billion (or 479 percent of quota), with an immediate disbursement
of US$12 billion, and a first review planned for June
2025 with an associated disbursement of about US$2 billion. The
program is expected to help catalyze additional official
multilateral and bilateral support, and a timely re-access to
international capital markets.
Fitch Ratings, on May 12, 2025, upgraded Argentina's Long-Term
Foreign-Currency and Local-Currency Issuer Default Rating (IDR) to
'CCC+' from 'CCC'. The upgrade reflects the launch of a new IMF
program, among other things. S&P Global Ratings, in February 2025
lowered its local currency sovereign credit ratings on Argentina to
'SD/SD' from 'CCC/C' and its national scale rating to 'SD' from
'raB+'. Moody's Ratings, in January
2025, raised Argentina's local currency ceiling to B3 from Caa1
and the foreign currency ceiling to Caa1 from Caa3. DBRS, Inc.
upgraded Argentina's Long-Term Foreign and Local Currency Issuer
Ratings to B (low) from CCC in November 2024.
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B E L I Z E
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BELIZE: Subdues Growth in Near Term While Inflation Decelerated
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An International Monetary Fund (IMF) team led by Metodij
Hadzi-Vaskov held discussions for the 2025 Article IV consultation
with Belize during July 1—11. The team met with Mr. John
Briceño, Prime Minister; Mr. Christopher Coye, Minister of State;
Mr. Joseph Waight, Financial Secretary; Mr. Kareem Michael,
Governor of the Central Bank; and other senior government
officials, representatives of the opposition, the private sector,
and labor unions.
After a remarkable recovery following the pandemic, preliminary
economic data points to subdued growth in the near term while
inflation has decelerated, and the public debt-to-GDP ratio has
declined sharply. Growth is expected to converge to its potential
of about 2 percent over the medium term, reflecting capacity
constraints. In an unchanged policies scenario, the public
debt-to-GDP ratio is projected to fall more slowly, requiring
additional fiscal consolidation and growth-enhancing structural
reforms to reduce debt to 50 percent of GDP by 2030. Policy
priorities include revenue mobilization and reprioritization of
expenditure; greater spending in priority areas; expanded access to
finance; accelerating growth-enhancing and structural reforms; and
building resilience to natural disasters.
Recent Developments, Outlook, and Risks
Belize's economy has recovered strongly following the pandemic,
supporting improvements in social outcomes and financial stability.
After expanding by a cumulative 27.6 percent between 2021 and 2023,
real GDP grew by 8.1 percent in 2024, driven by tourism, trade, and
transport. Consequently, the poverty rate declined substantially to
22 percent in 2024, from 36 percent in 2021, according to the
multidimensional poverty index. The strong economic recovery,
combined with the prudent management of public sector wages and a
sharp rebound in government revenues, improved the primary fiscal
balance to 1.7 percent of GDP in FY2024. Consequently, public debt
fell sharply to 61.1 percent of GDP by end-2024 from 103.3 percent
of GDP in 2020, supported as well by a debt-for-marine protection
swap and a negotiated discount on Belize's Petrocaribe debt.
Financial stability risks have declined, following the accumulation
of additional tier 1 capital among vulnerable banks and a decline
in aggregate nonperforming loans. Staff's preliminary analysis
suggests Belize's external position in 2024 was stronger than the
level implied by fundamentals and desirable policies.
Growth is expected to slow considerably in the near term before
converging to its potential of about 2 percent over the medium
term. Staff projects growth to decelerate to 1.5 percent in 2025 in
line with the observed slowdown in stayover visitor arrivals growth
and weak agricultural sector performance as a result of unfavorable
weather conditions and fungal disease affecting sugarcane. Growth
is expected to recover in 2026, before gradually moderating to 2
percent over the medium term, absent increased hotel and flight
capacity. Staff expects inflation to decline further to 1.3 percent
over the medium term as inflationary pressures from major trading
partners and oil prices subside. Public debt is expected to fall
more slowly as a percentage of GDP, reflecting slower nominal
growth and higher spending on salaries. The current account deficit
is expected to moderate to about 1.2 percent of GDP over the medium
term, largely on account of lower oil prices. Staff projects a
gradual increase in international reserves to about 4 months of
imports, albeit not reaching the ARA metric by 2030.
Staff assesses risks to the outlook as tilted to the downside.
External downside risks stem from higher global policy uncertainty
and increased trade barriers—which would weigh on Belize's growth
and current account—and higher-for-longer global interest rates.
Domestically, increased or sustained climate-related disasters
could cause severe damage to the agriculture, energy, and tourism
sectors. A slowdown in the economy could also increase risks to the
financial sector. However, the implementation of several large
infrastructure projects—particularly in the energy, utilities,
and transport sectors—could push growth higher over the medium
term.
Policy Priorities
The policies implemented by the authorities have been broadly
consistent with staff advice and technical assistance
recommendations. Legislative amendments to allow for the
introduction of electronic tax invoicing, new penalties for tax
noncompliance, and a requirement that all taxes are paid before the
sale of any entities or businesses have sought to improve tax
administration. The central bank has reduced its holdings of
government securities and increased the level of international
reserves. The passage of the Fiscal Incentives Act—which
encourages the formalization of firms—and the establishment of
the collateral registry have the potential to increase firms'
access to credit. The central bank also required vulnerable banks
to accumulate additional tier 1 capital to reduce financial
stability risks. However, reforms to the Pension Plan for Public
Officials (PPPO) have been delayed. Going forward, the authorities
remain committed to making use of capacity development to further
strengthen institutions and the policy framework.
Reducing public sector debt to below 50 percent of GDP would help
build fiscal buffers against adverse shocks. This would require
gradually increasing the primary surplus to 2 percent of GDP by
FY2026, supported by:
Greater revenue mobilization. This could be achieved by broadening
the base of the General Sales Tax, raising specific taxes and fees,
and improving revenue administration;
Reprioritization of current expenditure through reforms to the PPPO
to reduce the present value of future deficits and lower fiscal
risks; and Expanding priority spending on targeted social programs,
infrastructure, and crime prevention.
This adjustment should be part of a broader medium-term fiscal
strategy with clear targets and measures, which—combined with
improvements to public financial management—would enhance its
credibility and lay the foundation for the development of a
well-designed fiscal responsibility law with specific fiscal
rules.
Accelerating the implementation of growth-enhancing structural
reforms would foster job creation and boost potential growth.
Belize's potential growth has significantly declined over the past
decade, driven in part by negative growth in total factor
productivity in the period since the global financial crisis up to
the COVID-19 pandemic. Expanding ongoing efforts to address
structural barriers and promote growth remains a key priority. In
particular:
Strong economic activity in the services sector requires more and
better skilled labor. The demographic push, which has been a
consistent driver of Belize's growth over the past decades, is
expected to diminish over time. The authorities recognize
constraints to growth resulting from the tight labor market and are
devising various initiatives to address these challenges, including
improving intermediation services to help match job seekers to job
vacancies, engaging with the private sector to reduce skill
mismatches, and introducing legislative amendments regarding
seasonal migrant workers. Policies that aim at increasing female
labor force participation, including enhancing childcare and
education, would support the strong economic activity in the
services sector and mitigate the expected impact from decelerating
population growth.
Addressing key bottlenecks in the tourism sector is necessary to
accelerate growth in stayover arrivals and support tourism growth
over the medium term. Priorities include developing road
infrastructure to ease cross-district transportation and expanding
flight capacity.
The degree of resource misallocation among firms in Belize is one
of the highest in the Caribbean, leading to lower aggregate
productivity. Continued efforts to improve the business climate and
address structural barriers, in particular reforms to improve
firms' access to finance, business license and permits processes,
tax administration, and workforce education, would help foster
productivity growth and job creation.
Rising sea levels, hurricanes, floods, droughts, and coastal
erosion pose significant threats to the economy, particularly to
tourism, agriculture, and energy. Given Belize's vulnerability to
natural disasters, continued efforts to enhance resilience to
natural disasters remains essential. The authorities have made
considerable progress toward building resilience, including plans
to invest in a battery energy storage system and renewable energy,
and developing a Climate Finance Strategy. In this context,
adoption of a Disaster Resilience Strategy to complement the
National Preparedness and Response Plan would further help to
provide a coherent guide to the authorities' efforts and could help
facilitate coordination of donor support.
Strengthening the currency peg requires accumulating additional
international reserves. Successfully implementing structural
reforms and fiscal consolidation—combined with a gradual
reduction in the central bank's large stock of government
securities—is crucial to accelerating official reserve
accumulation. Combining this with reforms to develop the domestic
capital market, including the introduction of a fully market-based
auction for Treasury Notes, would also increase the government's
access to domestic private sector finance and help to reduce excess
liquidity in the financial system. Such reforms would also provide
opportunities for the Social Security Board to reduce the share of
cash instruments in their investment portfolio, improving the
General Social Security Scheme's long-term viability.
Improving the private sector's access to finance and enhancing the
financial safety net should be key policy priorities. Accelerating
growth in private sector credit could be supported by initiatives
to:
Increase the demand for credit from domestic firms and households.
Savings deposits at domestic banks are subject to a regulatory 2½
percent floor on interest earned, while lending spreads are widest
among the largest and most liquid banks. Removing this floor and
supporting greater competition among domestic banks could reduce
private sector borrowing costs, which remain elevated even amid
high excess liquidity.
Removing constraints to expanding the supply of credit. This
includes ensuring that domestic banks have sufficient capital above
the regulatory requirement, reducing information asymmetries
between borrowers and lenders by operationalizing the credit
bureau, and expanding access to grants and other non-debt
instruments for early-stage firms.
Operationalizing the deposit insurance framework and improving
coordination across regulatory agencies would further enhance
financial stability.
Belize should build on the successful completion of its Anti-Money
Laundering/Countering-Terrorism Financing (AML/CFT) assessment with
the Caribbean Financial Action Task Force (CFATF). In its report
published in January 2025, the CFATF assessed Belize as compliant
or largely compliant on all of the FATF's 40 Recommendations and
substantially effective in achieving several immediate outcomes of
a sound AML/CFT framework. Going forward, the authorities are
encouraged to continue addressing the remaining shortcomings in the
AML/CFT framework, including: finalizing and approving the National
Risk Assessment; enhancing risk-based supervision; and
strengthening the collection of beneficial ownership information of
legal entities.
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C A Y M A N I S L A N D S
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MONTEGO BAY AIRPORT: S&P Assigns Prelim 'BB' Rating on Sec. Notes
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S&P Global Ratings assigned its 'BB' preliminary rating to Montego
Bay Airport Revenue Finance Ltd.'s (MoAir) proposed issuance.
The stable outlook reflects our expectation of a gradual increase
in passenger volumes, enabling debt service coverage ratios of
approximately 1.7x in the coming 12-24 months
Montego Bay's Sangster International Airport (SIA) is owned by the
Airport Authority of Jamaica (AAJ). The AAJ operated SIA for
approximately 29 years (previously operated by the government of
Jamaica since 1949), but in 2003, it granted a 30-year concession
to MBJ Airports Ltd. (MBJA). As part of the agreement, MBJA
committed to transfer the concession's revenue share to the AAJ as
a concession fee payment. In 2015, Grupo Aeroportuario del Pacifico
S.A.B de C.V. (GAP), a private airport operator, acquired 75% of
MBJA's stake, becoming the major stakeholder of the operating
vehicle.
As part of the agreement, the concession's revenue share consists
of a base concession fee payment paid monthly, as well as an
additional concession fee and excess benefit payments paid once
every year, if applicable. With the remainder of the revenue, the
operator must cover SIA's operations, maintenance, and capital
expenditure. The concession fee is, therefore, senior to any of the
airport's expenses.
At the direction of the government, the AAJ plans to transfer its
revenue share from the concession to a bankruptcy-remote
nonrecourse special-purpose vehicle established in the Cayman
Islands, Montego Bay Airport Revenue Finance Ltd. (MoAir). MoAir
will raise $385 million in senior secured 144A/Reg S notes. The
noteholders will hold a pledge of the shares of MoAir; the right to
receive its revenue share; and the project's accounts, including an
offshore six-month debt service reserve account (DSRA).
S&P expects MoAir's revenue share to represent 28%-35% of SIA's
previous-year total revenue, plus a top-up from the government in
the case the project receives a lower revenue percentage for any
reason. MoAir's right to receive this revenue share won't depend on
which entity operates the airport. Therefore, if the concession
ends early or if it won't be renewed, MoAir's creditors would still
have the right to receive the pledged revenue.
As a result, the revenue share is MoAir's only source of funds
unless the top-up is triggered. In addition, the portion of the
airport revenue that covers its operations and maintenance or
associated expenses is not part of the MoAir waterfall, structure,
or security package.
If competition rises -- either if any new international airport
that caters to business passengers is built or any existing airport
in Jamaica is upgraded to accommodate such passengers (aside from
SIA or Ian Fleming International Airport) -- and the project's debt
service coverage ratio (DSCR) falls below 1.4x, the government will
make payments to MoAir to lift and maintain its DSCR above that
level. However, we would not factor such an event into our analysis
until it happened.
In addition, in the case of a change in the concession that sets
the new revenue share to below 28% of the previous year's revenue,
the government will top up the required amounts to meet 28% of the
previous year's revenue.
S&P said, "Given these characteristics, we rate the project
according to our "Principles Of Credit Ratings" methodology.
Particularly, we assess the cash flow coverage according to the
contractual cash waterfall at the project level. We think
notionally amending the project's cash flow waterfall by adding
operating costs wouldn't capture the overall ability to cover these
costs, given that MoAir doesn't receive all the airport's revenue.
"Instead, to recognize the importance of continued operations for
ongoing cash flow, we consider GAP (the current concessionaire) to
be a material and irreplaceable counterparty whose credit quality
directly affects that of the issuer. However, if the concession
were not renewed and GAP was no longer the operator, the same terms
would apply to the new counterparty.
"We assign a preliminary 'BB' issue rating to the proposed bonds
with a stable outlook, but a final rating will depend on the final
transaction details and conditions. Accordingly, the preliminary
rating shouldn't be construed as evidence of the final rating. If
we don't receive the final documentation within a reasonable time
frame, or if the final transaction departs from our assumptions, we
reserve the right to withdraw or change the rating.
"The project's operational risks drive the preliminary rating
because SIA does not bear construction risk at this stage. The
project's operational phase will extend from the debt placement
date until 2045, which we estimate as the project's economic life,
without the airport making expansionary investments to increase its
annual passenger capacity above 9 million.
"During the operational phase, we divide our analysis in two
phases: before and after the expected refinancing of the notes,
projected to occur in 2035." The following elements underpin our
analysis in both stages:
-- S&P assesses the asset class' stability--the risk that a
project's cash flow will differ from expectations due to
operational issues--at 3, reflecting relatively simple operating
complexity, a predictable cost structure, and very limited risk
that any interruption would affect SIA for long periods.
-- S&P assigns a positive operating leverage score, considering
the specific cash waterfall for this transaction, where revenues
received from the airport go directly toward servicing interest and
principal, given the concessionaire will be in charge of servicing
the airport's operational costs and capital expenditure.
-- Market exposure is medium, given the project is exposed to
fluctuations in passenger volumes. Cash flow available for debt
service might fall by 18% during the debt's term under a stressed
scenario. S&P also considers that the airport operates in a region
prone to environmental risks, such as hurricanes, that could
temporarily lower enplanements, as well as the almost purely
tourism-related passenger volume, which is more volatile than that
of passengers visiting friends and relatives.
-- The competitive position is neutral because we believe SIA will
remain Montego Bay's main airport in the coming years, given its
available capacity, its status as the origin and destination
airport for 98.7% of passengers, and its almost exclusively
tourism-related passenger volumes. In addition, the airport
operates under a well-defined framework, with a predictable regime
for rate adjustments.
-- The operations counterparty dependency assessment is
irreplaceable because revenue generation is predicated on GAP's
operating of the airport at least until 2034, when the concession
matures. GAP, together with its subsidiaries, holds concessions to
develop, operate, and manage 12 international airports in Mexico
and two international ones in Jamaica (in Montego Bay and
Kingston). It also offers aeronautical and nonaeronautical
services.
S&P said, "We view the project as able to withstand a hypothetical
sovereign stress event, which allows it to be rated at the level of
our transfer and convertibility assessment for Jamaica, one notch
above the sovereign credit rating (BB-/Positive/B).
"We expect the project to withstand a hypothetical sovereign stress
scenario because of the resiliency under a stress test that
incorporates a decrease of 10% in passenger volumes and no rate
adjustments. We believe the project would be able to withstand such
stress without depleting its DSRA. In addition, the project's
accounts will be held offshore in Citibank N.A. (A+/Stable/A-1),
where the airport's operator will directly transfer the funds
related to the revenue share pledge the airport's revenue is also
dollar denominated, mitigating any foreign exchange risks.
"We view the airport as a government-related entity (GRE) because
we believe it's highly likely the Jamaican government would provide
extraordinary support to the airport in the event of financial
distress. We base this on our assessment of the airport's very
important role and strong link to the government, given it's a main
entryway for international passengers and has a covenant package
that would prompt the government to support the airport's (and
consequently, the issuer's) profitability under certain
circumstances. This package is in addition to the top-up payments
that the government will inject in the structure in the event of
the concessionaire's insufficient payment of the concession fee.
"Despite GAP's concession, we also view the government as a strong
and stable shareholder of the airport. Considering the stand-alone
credit profile of the transaction, however, the relationship with
the government and the potential support in a stress scenario are
neutral for the rating.
"The stable outlook incorporates our expectation that the issuer
would withstand a hypothetical sovereign stress scenario because of
its financial structure, which includes a cash waterfall where
revenues received from the airport go directly toward servicing
interest and principal. The outlook also incorporates an expected
gradual increase in air passenger volumes (a result of the
airport's importance to Jamaica's main tourist gateway), which will
enable DSCRs of approximately 1.7x in the next 12-24 months.
"We could lower the rating if passenger volumes fall and cause the
minimum DSCR to fall consistently below 1.2x.
"We could also lower the rating if we perceive a weakening in the
issuer's resiliency, refinancing risk increases, or the
creditworthiness of the concessionaire deteriorates below that of
the project.
"Moreover, if the mechanism that obliges the Jamaican government to
fulfil the minimum payment at 28% is triggered, and therefore it
becomes a material and irreplaceable counterparty, we might lower
the project rating to the same level as the sovereign rating.
"Assuming all other factors remain unchanged, we could raise the
rating in the next 12 months if we take the same rating action on
Jamaica and revise up our transfer and convertibility assessment
for the country."
===============
C O L O M B I A
===============
RUTA AL MAR: Moody's Cuts Rating on COP522BB Secured Notes to B1
----------------------------------------------------------------
Moody's Ratings downgraded the rating to B1 from Ba1 assigned to
the Series A COP522 billion senior secured UVR Indexed Notes Due
2044 issued by Fideicomiso P.A. Concesion Ruta al Mar (the Issuer,
or Ruta al Mar) - with Concesion Ruta al Mar S.A.S. as co-obligor
(the Project, or RaM). The outlook remains negative.
RATINGS RATIONALE
Ruta al Mar rating downgrade reflects the longstanding construction
delays of the project hindering its cash generation capacity. The
rating action also considers Moody's assessments of a weaker
governance as reflected by tight liquidity and the lack of
visibility around the project's ability to conclude the project or
amend the scope of the concession.
Construction delays are limiting the project's cash generation
capacity and its ability to reduce debt as initially expected. Ruta
al Mar is facing a COP $215 billion loan due in 2027 (outstanding
balance) that is designed to be repaid through a cash sweep
mechanism as construction milestones were achieved and toll revenue
collections materialized.
Ruta al Mar will cease to receive sufficient cash compensations due
to lack of funds in the project's specific support account managed
by the Agencia Nacional de Infraestructura (ANI). Moody's
acknowledges that until recently, RaM received cash compensations
for construction delays linked to local community opposition and
lack of timely tariff increases. A support account managed by ANI
is funded with 0.9% of the project revenue for these purposes, but
the account has been almost depleted. Other construction
contingency funds remain, but these will be insufficient to fully
reverse the poor performance of the project.
The combination of a high inflation environment, lack of timely
tariff increases, and construction delays have resulted in working
capital needs for the project that have been addressed by using
funds from the debt service reserve account, according to the cash
waterfall established for the project. The reserve is replenished
on a cash sweep basis, and RaM has been able to meet debt service
reserve requirements every semi-annual reporting period. Since
January 2025, tariffs have been fully increased by inflation, but
cash flow is still insufficient to prevent the project using the
reserve to meet its operating requirements. Moody's also
acknowledges that the project still benefits from committed equity
from the sponsor (backed by letters of credit) that would also
improve liquidity pressures if needed.
Colombian toll road concession contracts provide strong risk
sharing mechanisms between the public and private stakeholders.
Notwithstanding, ANI and RaM have not yet been able to negotiate
amendments to the concession to compensate for the project's credit
challenges either by reducing the scope of the project or extending
the life of the concession contract, or both.
Moody's projects that RaM will record lower Debt Service Coverage
Ratios (DSCR) and Concession Life Coverage Ratios (CLCR) from the
original expectations. Moody's Base Case assumes that tariffs will
be increased this year according to the decree, and in January 2025
and every year by inflation, according to the concession agreement.
Under Moody's updated Base Case, Moody's projects RaM to record
DSCR close to 1.0x for the period 2025-2027, before the maturity of
loan previously mentioned. Absent any amendments to the concession
or a material improvement in cash generation, the project will
require the equity funds to meet the maturity in 2027.
The overall credit profile throughout the operating phase is
enhanced by the structural features embedded in the project finance
transaction. In addition to the standard six-month DSRA and
six-month O&M reserve accounts, the structure includes backward,
and forward-looking restricted payment tests set at 1.35x or 1.45x,
depending on how traffic performs throughout the construction
period. Other features include the validation of annual budgets
which provide incentives for the issuer to maintain a lean
operating structure to manage costs and expenses, as well as cash
sweep mechanisms in case of traffic overperformance, mitigating the
risk of the debt schedule extending beyond concession maturity in
upside scenarios, adequately preserving creditors position.
The outlook on the rating is negative, reflecting the uncertainty
adjustments to the concession agreement to adjust for the pending
construction milestones of the project. The negative outlook also
incorporates the lack of visibility around construction completion
and the working capital needs of the project that are leading to
draws from the debt service reserve fund.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATING
An upgrade of Ruta al Mar's rating is unlikely given the negative
outlook. Moody's could stabilize the rating outlook if construction
progress on the pending milestones or confirmation that concession
agreement will be amended without financial impact to the project,
would also support the rating outlook stabilization.
Moody's could downgrade Ruta al Mar's rating if Moody's assesses
(1) working capital needs prevail requiring draws from the debt
service reserve account, (2) further tariff interference
materializes such that inflation adjustments are disallowed or
further delayed, (3) project completion remains uncertain or
amendments to the concession agreement are insufficient such that
RaM is projected to have a weaker financial performance than
Moody's current base case.
Fideicomiso P.A. Concesion Ruta al Mar is a trust under the laws of
Colombia created for purposes of the operations of Concesion Ruta
al Mar S.A.S. Concesion Ruta al Mar S.A.S. is a toll road
concession encompassing 491 kilometers of roads in Colombia's
northwestern region. The concession was awarded by Agencia Nacional
de Infrastructura (ANI) as a private initiative 4G project, which
works as an unsolicited public-private partnership transaction.
Private initiative projects do not involve public funding for
either construction or revenue generation. Revenue is fully based
on tolled traffic, and the project takes on all of the traffic-risk
exposure. The concession is likely to last for 34 years based on
initial traffic projections. The term can be shortened or extended
depending on the present value of the accumulated cash flow. The
project sponsors are El Condor and its funds managed by InfraRed
Capital Partners Limited (InfraRed), each with a 50% share of the
project.
The principal methodology used in this rating was Privately Managed
Toll Roads published in December 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: Launches RD$100MM Fund for Irrigation Systems
-----------------------------------------------------------------
Dominican Today reports that the Agricultural Bank of the Dominican
Republic (Bagricola) and the National Irrigation Technology
Directorate (TNR) have launched a call for proposals offering
non-reimbursable funds of up to 35% for agricultural producers in
San Juan province seeking to modernize their irrigation systems.
This initiative is part of the implementation of the Fund for the
Promotion of the Modernization of the National Irrigation System
(FOTESIR) in the southern region, according to Dominican Today.
With an initial investment of RD$100 million, the program aims to
improve irrigation on 470,000 acres across San Juan, Azua,
Bahoruco, and Independencia over the next four years, the report
notes.
The launch event took place at the Autonomous University of Santo
Domingo (UASD) and was led by Claudio Caamaño Vélez, director of
TNR, and Juan Rosario, technical deputy administrator of Banco
Bagricola, the report relays. They explained that the FOTESIR fund
will cover up to 35% of the total cost of irrigation modernization
projects, including training, water conduction, filtration,
fertilization, and drainage, the report discloses.
Eligible applicants include small and medium-sized
producers—individuals or legal entities—whose properties in San
Juan do not exceed 500 net tareas. Proposals must be submitted by
July 25 at 4:00 p.m. through certified suppliers registered with
TNR, the report says. Beneficiaries will be selected based on a
scoring system evaluating their financial contribution and the
cost-efficiency of their projects, the report adds.
About Dominican Republic
The Dominican Republic is a Caribbean nation that shares the island
of Hispaniola with Haiti to the west. Capital city Santo Domingo
has Spanish landmarks like the Gothic Catedral Primada de America
dating back 5 centuries in its Zona Colonial district. Luis Rodolfo
Abinader Corona is the current president of the nation.
TCR-LA reported in April 2019 that Juan Del Rosario of the UASD
Economic Faculty cited a current economic slowdown for the
Dominican Republic and cautioned that if the trend continues,
growth would reach only 4% by 2023. Mr. Del Rosario said that if
that happens, "we'll face difficulties in meeting international
commitments."
An ongoing concern in the Dominican Republic is the inability of
participants in the electricity sector to establish financial
viability for the system.
Standard & Poor's credit rating for Dominican Republic was raised
to 'BB' in December 2022 with stable outlook. Moody's credit
rating for Dominican Republic was last set at Ba3 in August 2023
with the outlook changed to positive. Fitch, in December 2023,
affirmed the Dominican Republic's Long-Term Foreign-Currency Issuer
Default Rating (IDR) at 'BB-' and revised the outlook to positive.
=================
G U A T E M A L A
=================
GUATEMALA: Fitch Rates 2036 and 2055 USD Notes 'BB'
---------------------------------------------------
Fitch Ratings has assigned ratings of 'BB' to Guatemala's USD800
million notes maturing Aug. 15, 2036 and USD700 million notes
maturing Aug. 15, 2055. The notes have coupon rates of 6.25% and
6.875%, respectively.
The proceeds of the issuance will be used for general budgetary
purposes, including the refinancing of existing public
indebtedness.
Key Rating Drivers
The ratings are in line with Guatemala's Long-Term (LT) Foreign
Currency (FC) Issuer Default Rating (IDR). On Feb. 7, 2025, Fitch
affirmed Guatemala's LT FC IDR at 'BB' and revised the Rating
Outlook to Positive from Stable.
ESG - Governance: Guatemala has an ESG Relevance Score (RS) of '5'
for both Political Stability and Rights and for the Rule of Law,
Institutional and Regulatory Quality and Control of Corruption.
These scores reflect the high weight that the World Bank Governance
Indicators (WBGI) have in its proprietary Sovereign Rating Model.
Guatemala has a low WBGI ranking at the 27th percentile, reflecting
relatively weak rights for participation in the political process,
weak institutional capacity, uneven application of the rule of law
and a high level of corruption.
RATING SENSITIVITIES
Factors that Could, Individually or Collectively, Lead to Negative
Rating Action/Downgrade
- The bond rating would be sensitive to any negative changes in
Guatemala's LT FC IDR.
Factors that Could, Individually or Collectively, Lead to Positive
Rating Action/Upgrade
- The bond rating would be sensitive to any positive changes in
Guatemala's LT FC IDR.
Date of Relevant Committee
06 February 2025
ESG Considerations
Guatemala has an ESG Relevance Score of '5' for Political Stability
and Rights as World Bank Governance Indicators have the highest
weight in Fitch's SRM and are therefore highly relevant to the
rating and a key rating driver with a high weight. As Guatemala has
a percentile rank below 50 for the respective Governance
Indicators, this has a negative impact on the credit profile.
Guatemala has an ESG Relevance Score of '5' for Rule of Law,
Institutional & Regulatory Quality and Control of Corruption as
World Bank Governance Indicators have the highest weight in Fitch's
SRM and are therefore highly relevant to the rating and are a key
rating driver with a high weight. As Guatemala has a percentile
rank below 50 for the respective Governance Indicators, this has a
negative impact on the credit profile.
Guatemala has an ESG Relevance Score of '4' for Human Rights and
Political Freedoms as the Voice and Accountability pillar of the
World Bank Governance Indicators is relevant to the rating and a
rating driver. As Guatemala has a percentile rank below 50 for the
respective Governance Indicators, this has a negative impact on the
credit profile.
Guatemala has an ESG Relevance Score of '4'[+] for Creditor Rights
as willingness to service and repay debt is relevant to the rating
and is a rating driver for Guatemala, as for all sovereigns. As
Guatemala has track record of 20+ years without a restructuring of
public debt and captured in its SRM variable, this has a positive
impact on the credit profile.
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
----------- ------
Guatemala
senior unsecured LT BB New Rating
GUATEMALA: S&P Assigns 'BB+' Issue Rating on $1.5BB New Notes
-------------------------------------------------------------
S&P Global Ratings assigned its 'BB+' issue rating to Guatemala's
new notes totaling an equivalent of US$1.5 billion. The notes are
made up of two tranches:
-- US$800 million 6.25% notes due 2036, and
-- US$700 million 6.875% notes due 2055.
The ratings on the notes are at the same level as the long-term
foreign currency sovereign credit rating on Guatemala
(BB+/Stable/B). The sovereign will use the issuance proceeds for
general budgetary purposes, including to refinance its outstanding
debt.
The 'BB+' ratings on Guatemala reflect its track record of
macroeconomic stability and economic resiliency. The country's
manageable fiscal deficits, very low net debt, strong external
profile, and history of sound monetary policy constitute key credit
strengths.
Substantial social and infrastructure needs in the country continue
to curtail growth prospects. Guatemala's still-developing public
institutions, historically high perceived corruption, and a
challenging political environment constrain policymaking
effectiveness.
S&P said, "The stable outlook indicates our view that cautious
macroeconomic policies and low government debt will persist in the
next two years despite somewhat higher fiscal deficits stemming
from the planned rise in infrastructure spending. We also expect
Guatemala to maintain its strong external balance sheet even amid
uncertain global conditions."
=============
J A M A I C A
=============
JAMAICA: BOJ Reports Net Profit of $20.5BB for January to June
--------------------------------------------------------------
RJR News reports that the Bank of Jamaica is reporting net profit
of $20.5 billion for the year-to-date January to June 2025.
That's based on total assets of $1.2 trillion, up from $1.1
trillion for the similar period last year, according to RJR News.
The increase was largely driven by a jump in the central bank's
foreign assets, which climbed to $945.7 billion as at June 25, up
from $820.9 billion a year earlier, the report notes.
But the bank's local assets declined to $241.3 billion in June this
year, down from $269.7 billion in June last year, 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.
MONTEGO BAY AIRPORT: Fitch Gives BB+(EXP) Rating on USD385MM Notes
------------------------------------------------------------------
Fitch Ratings has assigned Montego Bay Airport Revenue Finance
Ltd.'s (MoAir) USD385 million notes due in 2035 a 'BB+(EXP)'
expected rating. The Rating Outlook is Stable.
RATING RATIONALE
The rating reflects the revenue risk related to Sangster
International Airport (SIA or Montego Bay Airport) in Jamaica, the
main airport and gateway for tourism in the country. It serves one
of the most important leisure destinations in the Caribbean. The
airport is a strategic asset for the country given the importance
of the tourism industry to the country's economy.
Despite competition from other Caribbean destinations, traffic at
MoAir is resilient with low volatility. Almost all traffic is from
international passengers, mainly from North America, but with
adequate diversification in terms of carriers and origins. A
hybrid-till regulatory regime governs maximum aeronautical tariffs,
subject to reviews every five years incorporating inflation
indexation among other factors.
The issuer is a special-purpose vehicle (SPV) entitled to receive
concession fees directly from the concessionaire into offshore
accounts. Therefore, the transaction structure isolates the
airport's cost and operating risks.
The debt will be senior, U.S. dollar-denominated, with a fixed
interest rate and a bullet maturity in 2035. The debt will benefit
from a six-month offshore debt service reserve account (DSRA),
adequate covenant package, including limitations on additional
indebtedness and restricted payments. It will also benefit from a
top-up payment mechanism from the Government of Jamaica (GoJ,
Long-Term Foreign- and Local-Currency Issuer Default Ratings (IDRs)
at 'BB-' with a Positive Outlook).
The refinancing risk is considered manageable and mitigated by the
perpetual ownership and the strategic and essential nature of the
asset for the country. Besides, Fitch considers the sponsor's
adequate market access as positive, as notes refinancing will rely
on international capital markets due to the limited size of
Jamaica's domestic credit market.
Under Fitch's rating case, maximum leverage, measured as net debt
to CFADS, is projected to be 7.8x in 2026, with an expected
deleveraging to around 5.6x at refinancing in 2035. These metrics
are considered adequate for the rating, according to Fitch's
applicable criteria.
Despite the fact that MoAir's revenues are U.S. dollar-denominated
and collected offshore, payments will be made by the
concessionaire. This exposes the transaction to transfer and
convertibility (T&C) risk. However, this risk is mitigated as the
majority of the concessionaire's revenue is collected offshore, and
Fitch believes that MoAir will have sufficient access to U.S.
dollar liquidity to preserve debt service if short-lived capital
controls are imposed. The top-up payment provision from the GoJ, as
well as the possibility for excess cash from MoAir to be
distributed to the government, create incentives to prevent capital
controls from affecting debt repayment. The aforementioned factors,
including supportive financial metrics, justifies a one-notch
uplift from Jamaica's Country Ceiling of 'BB'.
KEY RATING DRIVERS
Leisure-Dedicated Airport (Revenue Risk - Volume: Midrange):
Montego Bay Airport is the main international gateway to Jamaica,
characterized by stable demand and low volatility, as air travel is
the most relevant means of transportation to visit the country,
followed by cruise ships. As a result, almost all traffic is from
international passengers. The airport serves about 78% of visitors
to Northwest region of the island, which reflects the relevance of
the asset for a tourism-reliant country. It faces low competition
from domestic airports but competes with other leisure destinations
in the Caribbean.
However, it is the fifth-largest airport in the Caribbean in terms
of seats offered and has historically maintained a stable market
share. Around 90% of traffic comes from the U.S. and Canada.
Additionally, it has more than 45 routes from the main cities in
North America and Europe, surpassing Nassau but lagging Punta Cana.
The airport serves mainly international airlines and is adequately
diversified, with no single carrier representing over 20% of seat
capacity.
Hybrid-Till Tariff -Setting (Revenue Risk - Price: Midrange):
Airport's tariffs are regulated by the authority using a price cap
mechanism based on a Regulated Asset Base (RAB) model. The model,
in addition to tracking inflation, considers variables such as
expected capex, opex, and a target return, as well as a portion of
commercial revenues. Regulated aeronautical charges are reviewed
every five years.
Adequately Maintained Airport (Infrastructure Development and
Renewal: Midrange): The airport is adequately maintained and is
currently undergoing expansion works to better serve its users.
Short-term and long-term maintenance needs are well defined in the
Airport Master Plan, which is updated every five years and
considers traffic projections and the required expansions,
refurbishments, and improvements. The operator is responsible for
the maintenance of the airport. Concession fees are senior to
concessionaire's opex and capex, and the operator has a track
record of properly funding the required works.
Manageable Refinancing Risk and Adequate Covenants (Debt Structure:
Midrange): The debt is U.S. dollar-denominated, senior secured, and
has a fixed rate. The debt has a bullet maturity, but refinancing
risk is mitigated by the perpetual ownership of the airport by the
GoJ, the strategic and essential nature of the asset for the
country, and the demonstrated government support for airport
profitability.
The structure benefits from a six-month offshore debt service
reserve account (DSRA) and a covenant package that includes
provisions such as limitation on additional indebtedness and
distribution triggers. The security package is typical of project
finance structures and includes a Top-Up agreement. Under the
agreement, the GoJ has agreed to cover any shortfall if the issuer
receives less than the full payment from the operator during a
payment period. The Top-Up agreement can also be used to provide
compensation related to an alternate airport, if applicable.
Financial Profile
Under Fitch's rating case, maximum leverage, measured as Net Debt
to CFADS, is projected to reach 7.8x in 2026, and is expected to
decrease to around 5.6x at debt maturity. These metrics align with
the assigned rating based on the Volume and Price Risk assessments
as per Fitch's applicable criteria.
PEER GROUP
SIA's closest regional peer is Aeropuertos Dominicanos Siglo XXI,
S.A. (Aerodom, notes rated 'BB+' with a Stable Outlook). Both
issuers are related to the main airports in their respective
countries as they are the main gateways for international visitors.
They also have a concentration in leisure travelers and have low
demand volatility. As a result, they have the Volume Risk assessed
as Midrange. In addition, they share similar assessments for price
risk, infrastructure, and debt structure.
Under the rating case, Aerodom's maximum leverage, measured as net
debt to EBITDA, is projected to be 4.3x and is expected to decrease
to around 3x in 2029. These metrics are strong for the rating.
Similar to MoAir, Aerodom's notes are subject to T&C risk. This
risk is mitigated by the fact that Aerodom directly collects
approximately 75% of its revenues in offshore accounts, which,
together with robust financial metrics, a strong ultimate parent,
and a concession clause protecting the concession from existing or
future exchange controls or funds transfers measures, supports a
two-notch uplift from the Dominican Republic's Country Ceiling of
'BB-'.
Fitch considers the fact that MoAir also presents mitigants to T&C
risk. However, its metrics are in line with the assigned rating,
justifying a one-notch uplift from Jamaica's country ceiling.
RATING SENSITIVITIES
Factors that Could, Individually or Collectively, Lead to Negative
Rating Action/Downgrade
- Deterioration in Jamaica's sovereign credit profile, particularly
the risk of imposition of capital controls;
- Traffic growth or overall financial performance consistently
below Fitch's rating case assumptions, which could lead to a
sustained leverage above 7x.
Factors that Could, Individually or Collectively, Lead to Positive
Rating Action/Upgrade
- Traffic growth or overall financial performance consistently
above Fitch's base case assumptions, which could lead to a
sustained leverage around 6x, while continuing to deleverage;
- Strengthening of the credit profile of Jamaica, particularly the
risk of imposition of capital controls, as long as MoAir presents
metrics commensurate with a higher rating.
TRANSACTION SUMMARY
The transaction aims to raise up to USD385 million by issuing
senior secured 144A/Reg S notes via the newly created SPV called
Montego Bay Airport Revenue Finance Ltd., registered in the Cayman
Islands. The debt will have a legal bullet maturity in June 2035,
and mandatory bi-annual coupon payments.
It serves as the primary gateway for international visitors,
handling about 78% of annual arrivals to the northwest region of
the island.
The SPV will be a bankruptcy-remote entity and will receive the
greater of 28% of SIA's gross annual revenue (aeronautical and
non-aeronautical) or SIA's concession fees, which comprise the
monthly Concession Fee and the Additional Concession Fee, paid
annually in the first half of each year. The structure will include
an Accrual Account, which will retain part of the Additional
Concession Fee to service December interest payments and will be
prefunded with a minimum of USD14.6 million. In addition, it will
include a DSRA equal to the next six months of interest payments.
The transaction proceeds will be used for (i) funding access to
clean water, (ii) supporting small and medium-size enterprises,
(iii) general budgetary purposes of the GoJ, (iv) funding the DSRA,
the Accrual Account and the Revenue Account; (v) transaction fees
and expenses, and (vi) paying the purchase price under the true
sale of revenue right.
The financing documents will be governed by New York law, except
for the true sale of revenue rights, which will be under Jamaican
law. The security documents will be governed by the laws of Jamaica
or the Cayman Islands.
FINANCIAL ANALYSIS
Fitch's base case assumes traffic growth of 0.9% in 2025,
reflecting an expected increase in the available seat capacity in
2H25. For 2026 and onward, a compounded annual growth rate (CAGR)
of 3.3% is assumed. U.S.' GDP growth aligns with Fitch's
projections of 1.5% for 2025 and 2026, 2.1% for 2027, and 1.9%
thereafter. Tariffs are assumed to be adjusted in line with Fitch's
U.S. inflation forecasts of 3.8% for 2025, 3.4% for 2026, 2.4% for
2027, and 2.2% onward, subject to the yield caps agreed with the
AAJ for the 2026-2030 period. Opex is based on the issuer's budget
and stressed by 5%.
Under Fitch's base case, maximum leverage, measured as Net Debt to
CFADS, reaches 7.7x in 2026. The issuer is expected to achieve
leverage of around 5x only close to maturity.
Fitch rating case also assumes traffic growth of 0.9% in 2025. From
2026 onward, a CAGR of 2.3% is assumed. U.S. GDP growth and tariff
adjustments are consistent with the base case. Opex is based on the
issuer's budget and stressed by 7.5%.
Under Fitch's rating case, maximum leverage, measured as Net Debt
to CFADS, is 7.8x in 2026. The issuer is expected to achieve
leverage of around 5.6x only close to maturity.
SECURITY
The security package for the notes includes:
- Pledge/charge over all shares of the issuer;
- Pledge/charge over all assets of the issuer, including rights
over the issuer's revenues;
- Security assignment/charge over the concession fees or the 28% of
the airport's gross revenues prior to its "true sale" to the
issuer;
- Lien over offshore accounts, including a Revenue Account, DSRA
and Accrual Account.
Date of Relevant Committee
03 July 2025
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
----------- ------
Montego Bay Airport
Revenue Finance Ltd.
Montego Bay Airport
Revenue Finance
Ltd./Airport Revenues
- Senior Secured Debt/1 LT LT BB+(EXP) Expected Rating
MONTEGO BAY AIRPORT: Moody's Rates New $385MM Secured Notes 'Ba3'
-----------------------------------------------------------------
Moody's Ratings assigned a Ba3 rating to the upcoming issuance of
up to $385 million senior secured notes due 2035 issued by the
special-purpose-vehicle Montego Bay Airport Revenue Finance Limited
("MoAir" or "the Issuer"). MoAir's rating outlook is positive, in
line with the Government of Jamaica ("Government" or "Jamaica")
rating outlook.
The assigned rating is based on preliminary documentation received
by us as of the rating assignment date. Moody's do not expect
changes to the documentation reviewed over this period nor does it
anticipate changes in the main conditions that the notes will
carry. Should issuance conditions and/or final documentation of the
notes deviate from the original ones submitted and reviewed by the
rating agency, Moody's will assess the impact that these
differences may have on the ratings and act accordingly.
RATINGS RATIONALE
The Ba3 rating recognizes the origin and destination passenger
profile of Sangster International Airport which caters an important
passenger traffic volume in the country, being the primary gateway
for tourism in Jamaica. It also reflects its well diversified
carrier base, where its main airlines are American Airlines, Inc.
(Ba2 stable) and JetBlue Airways Corp. (B3 stable), managing
roughly 21% and 16% of the total passengers, respectively. Also
supporting the issuer's credit quality are the structural elements
of the transaction that include cash flows managed by an
independent trustee in offshore accounts that follow well-defined
waterfall rules mitigating exposure to sovereign risk. The limited
FX risk given the natural hedge between USD denominated tariffs
collected in part offshore and debt, the robust governance and
institutional strength of Jamaica, the cash flow diversification
that stems from a diversified passenger base, mostly from the US,
Canada and the UK, are important factors to position this issuance
one notch above the sovereign rating of Jamaica.
The rating also acknowledges the relatively stronger financial
metrics compared to peers in the region, including Kingston Airport
Revenue Finance Limited (Ba3 stable), even in a more conservative
Moody's Base Case which incorporates a limited passenger growth
trend (Moody's case considers an average 1% growth from 2026
onwards, compared to a 3% 10-year CAGR on the Management's case).
Moody's analytical approach for revenue forecast balances the
airport's strong market position and service offering with the
higher volatility associated with a 100% leisure passenger profile
mix. Under Moody's Base Case, the debt service coverage ratio
(DSCR) averages 1.9x during the tenor period, displaying a minimum
DSCR of 1.6x. As such, there is reasonable buffer to withstand the
intrinsic volatility in revenues. Under a break even scenario,
Moody's estimates that annual debt service, encompassing interest
expense only, would continue to be serviced with traffic volumes
that are roughly 25% lower than the management's scenario.
Tempering the credit quality is the refinancing risk, given the
bullet debt payment that happens a year after the expiration of the
current concession (2034). This risk is mitigated by the terms and
conditions of the assigned revenues, that ensure secured creditors
rights over their share in the airport future revenues under
alternative contractual scenarios, including a new operating
concession or the direct operation by the Government of Jamaica.
Moody's baseline scenario is of a concession renewal with similar
terms and conditions of the existing concession, supported by
Moody's favorable view on the quality and stability of Jamaica's
institutional and governance, which is quite robust compared to
that of its regional peers. The strong concession's termination
rights considers the ability for the government to step-in if the
concessionaire fails to comply with its obligations. Moody's also
notes some transfer risks are present since the operator collects
revenue before transferring the Issuer's revenue share to off-shore
SPV accounts. The security package for noteholders will include a
top-up from the Government in the event the SPV receives less than
its revenue share for any reason. Physical climate risks are also
present, given its location in the hurricane belt of the Caribbean
and the increased frequency of natural disasters, primarily
hurricanes and tropical storms that have adverse impact on
passenger traffic and flight operations, which can lead to
unexpected business interruptions.
OUTLOOK
MoAir's rating outlook is positive, in line with the rating outlook
of the Government of Jamaica and also reflecting Moody's
expectations of continuous stable traffic growth performance
through the next 12-18 months underpinned by a relatively strong
leisure travel demand.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATING
The rating would be upgraded if the credit rating of the Government
of Jamaica is upgraded while quantitatively, interest coverage (FFO
+ interest expense / interest expense) and leverage metrics remain
positioned above 1.9x and 13% respectively, on a sustained basis.
The rating would be downgraded if the rating of the Government of
Jamaica is downgraded. The rating would also face negative pressure
if the airport records weaker-than-expected passenger traffic
volumes or tariff adjustments below the baseline projections, such
that (FFO + interest expense / interest expense) and FFO/debt are
below 1.6x and 6%, respectively. Moreover, evidence of cash
transfer disruptions from the operator to the issuer could lead to
negative pressure.
PROFILE
Montego Bay Airport Revenue Finance Limited ("MoAir") is an orphan
SPV incorporated in the Cayman Islands that will issue up to $385
million non-amortizing senior secured notes with a 10-year tenor.
The proceeds from the financing will be applied to fund a six-month
debt service reserve account, fund the initial accrual account
funding, pay transaction costs and expenses, and to make a one-time
payment to the Government of Jamaica for the financing of certain
water infrastructure projects.
MoAir financing structure contemplates the monetization of SIA's
concession fees that is currently paid to the Airports Authority of
Jamaica, the Government's agency in charge of developing Jamaica's
airports. The SPV will purchase the right to receive SIA's
concession fees, which includes the total present concession fees
(equivalent to roughly 31% of the current airport revenues), and
future concession fees (28% of future total airport revenues if the
concession is terminated or amended). The security package includes
the true sale of such MoAir revenue share, rights under the
government top-up agreement, shares of the Issuer and all assets
and accounts of the MoAir SPV.
The principal methodology used in this rating was Privately Managed
Airports and Related Issuers published in November 2023.
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.
===========
M E X I C O
===========
LEISURE INVESTMENTS: Asks Court OK for Chapter 11 Sales Process
---------------------------------------------------------------
Emily Lever of Law360 reports that Leisure Investments Holdings
LLC, a provider of dolphin encounter experiences, has requested
approval from a Delaware bankruptcy court to begin marketing its
worldwide assets. The company said it has regained "some measure of
control" over its operations through litigation since entering
Chapter 11.
About Leisure Investments Holdings
Leisure Investments Holdings LLC and affiliates are operating under
the name "The Dolphin Company," manage over 30 attractions,
including dolphin habitats, marinas, water parks, and adventure
parks, located in eight countries across three continents. Their
primary operations are based in Mexico, the United States, and the
Caribbean, with locations in Jamaica, the Cayman Islands, the
Dominican Republic, and St. Kitts. These attractions are home to
approximately 2,400 animals from more than 80 species of marine
life, including a variety of marine mammals such as dolphins, sea
lions, manatees, and seals, as well as birds and reptiles. As of
2023, the marine mammal population at the Debtors' parks includes
roughly 295 dolphins, 51 sea lions, 18 manatees, and 18 seals.
Leisure Investments Holdings LLC sought relief under Chapter 11 of
the U.S. Bankruptcy Code (Bankr. D. Del. Lead Case 25-10606) on
March 31, 2025. In its petition, the Debtor reports estimated
assets and liabilities between $100 million and $500 million each.
Honorable Bankruptcy Judge Laurie Selber Silverstein handles the
case.
The Debtors tapped Young Conaway Stargatt & Taylor, LLP as counsel;
Riveron Management Services, LLC as restructuring advisor; and
Kurtzman Carson Consultants, LLC d/b/a Verita Global, as claims &
noticing agent.
=====================
P U E R T O R I C O
=====================
VALMAR CORP: Seeks Chapter 11 Bankruptcy in Puerto Rico
-------------------------------------------------------
On July 2, 2025, VALMAR Corp. filed Chapter 11 protection in the
U.S. Bankruptcy Court for the District of Puerto Rico. According
to
court filing, the Debtor reports between $500,000 and $1
million in debt owed to 1 and 49 creditors. The petition states
funds will be available to unsecured creditors.
About VALMAR Corp.
VALMAR Corp. is a food service business operating in Cabo Rojo,
Puerto Rico.
VALMAR Corp. sought relief under Chapter 11 of the U.S. Bankruptcy
Code (Bankr. D.P.R.Case No. 25-03044) on July 2, 2025. In its
petition, the Debtor reports estimated assets up to $50,000 and
estimated liabilities between $500,000 and $1 million.
The Debtors are represented by Homel Mercado Justiniano.
=================
V E N E Z U E L A
=================
VENEZUELA: Oil Revenue Surges, but Sanctions Shift Playing Field
----------------------------------------------------------------
Juan Martinez at Rio Times Online reports that Venezuela's state
oil company, PDVSA, earned $17.52 billion from oil exports in 2024,
official reports confirm. The company increased its daily oil
exports to 805,500 barrels, up from 700,000 the year before,
according to Rio Times Online.
Oil production also rose to 952,000 barrels per day, compared to
783,000 in 2023, the report notes. This growth happened while the
United States allowed some foreign companies, like Chevron, to buy
Venezuelan oil under special licenses, the report relays.
In May 2025, the US cancelled these licenses and added a 25 percent
tariff on any country importing Venezuelan oil, the report
discloses. This move forced companies to stop buying Venezuelan
oil for the US and European markets, the report says.
The US government said this action responded to political issues in
Venezuela, including blocked opposition candidates and concerns
over elections, the report says.
After the US restrictions, Venezuela sent 90 percent of its oil
exports to China, with smaller shipments to Cuba, Europe, and
India, the report notes. Chinese buyers now dominate Venezuela's
oil trade, the report relays.
They often negotiate lower prices due to the risk of sanctions and
the heavy quality of Venezuelan crude, the report notes. The
country's oil infrastructure remains weak, and the local currency
keeps losing value, reducing the real income from oil sales, the
report discloses.
Oil exports are Venezuela's main source of foreign money, the
report relays. The brief surge in sales during the US license
period gave the country some relief, the report notes. However,
the renewed sanctions and tariffs have left Venezuela with fewer
buyers and lower profits, the report relays.
The government now depends almost entirely on China, faces higher
costs, and must deal with ongoing risks to its oil business, the
report discloses. The core of the story is that Venezuela's oil
industry, vital for its survival, faces a shrinking market and
growing challenges, the report notes.
The country's leaders must keep finding ways to sell oil in a world
where the rules can change overnight, the report relays. The
numbers show a country adapting, but also struggling with the
limits of its options, the report adds.
About Venezuela
Venezuela, officially the Bolivarian Republic of Venezuela, is a
country on the northern coast of South America, consisting of a
continental landmass and a large number of small islands and islets
in the Caribbean sea. The capital is the city of Caracas.
Hugo Chavez was president to Venezuela from 1999 to 2013. The
Chavez presidency was plagued with challenges, which included a
2002 coup d'etat, a 2002 national strike and a 2004 recall
referendum. Nicolas Maduro was elected president in 2013 after the
death of Chavez. Maduro won a second term at the May 2018
Venezuela elections, but this result has been challenged by
countries including Argentina, Chile, Colombia, Brazil, Canada,
Germany, France and the United States who deemed it fraudulent and
moved to recognize Juan Guaido as president.
The presidencies of Chavez and Maduro have challenged Venezuela
with a socioeconomic and political crisis. It is marked by
hyperinflation, climbing hunger, poverty, disease, crime and death
rates, social unrest, corruption and emigration from the country.
Moody's has withdrawn 'C' local currency and foreign currency
ceilings for Venezuela in September 2022. Standard & Poors has
also withdrawn its 'SD/D' foreign currency sovereign credit
ratings and 'CCC-/C' local currency ratings on Venezuela in
September 2021 due to lack of sufficient information. Fitch
withdrew its own 'RD/C' Issuer Default Ratings on Venezuela in
June 2019 due to the imposition of U.S. sanctions on the country's
government.
*********
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