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250715.mbx T R O U B L E D C O M P A N Y R E P O R T E R L A T I N A M E R I C A Tuesday, July 15, 2025, Vol. 26, No. 140 Headlines A R G E N T I N A TRANSPORTADORA DE GAS DEL SUR: Fitch Affirms B- IDR, Outlook Stable B A H A M A S FTX GROUP: Trust Says Blockchain Co. Has Not Delivered $1.3MM Coins B R A Z I L BRAZIL: Trade Tensions Spark Dollar Rally, Real Faces Steep Decline D O M I N I C A N R E P U B L I C DOMINICAN REPUBLIC: Secures Agricultural Export Deal with Bahamas J A M A I C A JAMAICA: BOJ Accepts 141 Bids for 28-Day Fixed Rate Certificate JAMAICA: Investor Demand for GOJ Treasury Bills Exceed Expectation P U E R T O R I C O AMBASSADOR VETERANS: Seeks to Hire Financial Consultant INCAR GROUP: Seeks Chapter 11 Bankruptcy in Puerto Rico NEW FORTRESS: Moody's Cuts CFR to Ca, Outlook Remains Negative V E N E Z U E L A CITGO PETROLEUM: Bondholders, Bidders Object to Gold Reserve Bid - - - - - ================= A R G E N T I N A ================= TRANSPORTADORA DE GAS DEL SUR: Fitch Affirms B- IDR, Outlook Stable ------------------------------------------------------------------- Fitch Ratings has affirmed Transportadora de Gas del Sur S.A.'s (TGS) Long-Term Foreign and Local Currency Issuer Default Ratings (IDRs) at 'B-'. Fitch has also affirmed TGS's USD490 million unsecured obligations at 'B' with a Recovery Rating of 'RR3'. The Rating Outlook is Stable. The rating reflect TGS's solid business and financial profile, its strong market position as the largest provider of gas transportation service in Argentina and its limited exposure to commodity price fluctuations. Fitch rates TGS on a standalone basis. TGS's rating is also constrained by Argentina's 'B-' Country Ceiling, which limits the Foreign Currency IDR due to transfer and convertibility risk. In addition, the rating action included the application of a criteria variation to Fitch's published "Country-Specific Treatment of Recovery Ratings Criteria." The variation resulted in the assignment of an instrument Recovery Rating of 'RR3', which allows for a one-notch uplift from TGS's Foreign Currency IDR. Key Rating Drivers Weak Operating Environment Constrains Ratings: TGS's assets and operations are mostly located in Argentina (CCC+), which has been characterized by high inflation, unemployment, high cost of capital, capital controls and an unstable regulatory environment, making TGS vulnerable to the country's volatile economy, the risk of abrupt disruptions in financial access, and weak systemic governance. These factors temper TGS's ratings. Tariff Increases Improve Margins: The recent increases in tariffs have improved the company's operating margins, particularly in the natural gas transportation (NGT) business which is regulated by ENARGAS. NGT recently approved a tariff increase of 675% in April 2024, followed by increases ranging from 1% to 3.5% from August 2024 to March 2025. Around 83% of this segment's cash flows are driven by long-term ship-or-pay contracts. These tariff hikes have resulted in an increase of the segment's LTM EBITDA to USD355 million as of March 2025. Fitch expects EBITDA for this segment to remain around USD300 million to USD320 million during 2025 and 2026. Regarding the liquids production and commercialization (LPC) business, the heavy rains in Bahia Blanca on March 7, 2025 paralyzed liquids production. However, operations gradually resumed, reaching normal levels in mid-May 2025. Fitch expects the impacts of the segment for 2Q25 to be like 1Q25, and for EBITDA to be around USD170 during 2025 and improve to above USD220 in 2026. Strong Capital Structure: Fitch projects EBITDA leverage will remain below 1.0x over the rating horizon. TGS's financial flexibility allows it to mitigate the risks associated with its high-risk operating environment, the company does not face any important debt maturities until 2031 when the USD490 million notes are due. LTM 1Q25 gross leverage was 1.1x. Strong CFO: TGS boasts relatively stable and robust CFO. Fitch projects CFO to be USD460 million annually on average, fully covering the annual maintenance capex budget of USD90 million. Fitch expects expansionary project to start by the end of 2025 elevating capex to USD200 million and USD500 million during 2026. Expansionary capex is mainly related to the Midstream business and future infrastructure developments in Vaca Muerta strengthening its position in the industry. The company's pre-dividend FCF would enable it to maintain conservative leverage metrics. The company does not have a formal dividend policy; it approved USD175 million in dividends in 2025. Strategic Asset for Argentina: TGS transports 60% of the gas consumed domestically through 9,248 km of pipelines. The company operates via four business segments: NGT services, LPC, midstream, and telecommunications (through its subsidiary Telcosur S.A.). TGS's LPC business operates at the Cerri Complex, where ethane, LPG products and natural gasoline are produced and sold domestically and internationally. Regulatory Exposure: The NGT business is regulated by ENARGAS, which is entitled to set the basis for the calculation, monitoring and approval of tariffs. The LPC business is regulated by the secretary of energy (SE) regarding the volumes of liquefied petroleum gas (LPG) products sold domestically to ensure that domestic demand is fully met. In January 2025, the SE eliminated the maximum sale prices set for products provided under the Home Program. The midstream and telecommunications businesses are not regulated. Peer Analysis TGS is similar to other midstream companies in Latin America, such as GNL Quintero S.A. (GNLQ; A-/Stable), Transportadora de Gas del Peru (TGP; BBB+/Stable), Transportadora de Gas Internacional S.A. ESP (TGI; BBB/Negative), and Oleoducto Central S.A. (OCENSA; BB+/Negative) in that it benefits from stable and predictable cash flows. All the companies are characterized by manageable business risk due to solid contractual structures and low exposure to commodity price or volume risk. Fitch considers TGS's operating environment to be challenging due to Argentina's economic issues and regulatory unpredictability. However, the company's financial profile remains strong, with leverage at 1.1x LTM as of March 2025. Key Assumptions - 2025 NGT business EBITDA near USD300 million, LPC business near USD170 million (incorporating the impact of the Cerri floods) and midstream EBITDA near USD150 million; - 2025 capex of around USD360 million, maintenance capex of USD90 million, USD70 million Tratayen modules 4 and 5 expansion, and USD200 million related to the construction of GPM Section 1 and Final Sections projects; - 2026 capex of around USD590 million, maintenance capex of USD90 million and USD500 million related to the construction of GPM Section 1 and Final Sections projects; - Minimum cash balance of USD80 million; - Dividends distributions in the absence of expansion projects and after covering the minimum cash balance. Recovery Analysis The recovery analysis assumes that TGS would be a going concern (GC) in bankruptcy and that it would be reorganized rather than liquidated. GC Approach: - A 10% administrative claim; - The GC EBITDA is estimated at ARS413 billion. The GC EBITDA estimate reflects Fitch's view of a sustainable, post-reorganization EBITDA level upon which Fitch bases the valuation of TGS; - EV multiple of 4.0x. Argentina is assigned to Group D, as per the Country Groups specified in Fitch's "Country-Specific Treatment of Recovery Ratings Criteria," where the assigned Recovery Ratings are capped at 'RR4'. Fitch believes the recovery prospects for TGS are higher than the expected recovery of 31%-50% for the 'RR4' band. This is based on Fitch's bespoke recovery analysis for each individual issuer as well as precedents of debt exchange offerings driven by capital control restriction put in place by the Argentine Central Bank. In all cases, the calculated recovery was higher than the expected recovery of 51%-70% for the 'RR3' band, but Fitch capped the Recovery Ratings at 'RR3' to reflect a less predictable range of outcomes. A Recovery Rating of 'RR3' supports a one-notch uplift for the instrument rating from the issuer's Foreign Currency IDR. RATING SENSITIVITIES Factors that Could, Individually or Collectively, Lead to Negative Rating Action/Downgrade - Lower Argentina Country Ceiling; - Worsening of the regulatory environment; - An increase in commodity exposure, a decline in competitive position, and/or heightened re-contracting risk, which result in more volatile operating cash flow and a weaker financial profile. Factors that Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade - Positive rating actions are limited by Argentina's Country Ceiling of B- and sovereign rating of CCC+; - Improvement in the regulatory framework; - Establishment of a tariff framework with automatic inflation adjustments. Liquidity and Debt Structure TGS maintains a strong liquidity position, primarily driven by internally generated cash flows. As of March 2025, the company had a total of ARS47.8 billion in available cash and cash equivalents, most of which was held locally. During the same period, total debt consisted of ARS577 billions, of which ARS523 billion are from the international senior unsecured notes due 2031 and an additional ARS54 billion of loans from local banks. Issuer Profile TGS is the largest natural gas transporter in Argentina, transporting roughly 60% of the gas consumed domestically through more than 9,248 km of gas pipelines. The company's operations include natural gas transportation services, liquids production and commercialization, midstream, and telecommunications. Criteria Variation The criteria variation applies to the section titled "When an Instrument Enters a Distressed or Defaulted State" in the "Country-Specific Treatment of Recovery Ratings Criteria," where the criteria allows for the assigned Recovery Rating to be above the defined cap for distressed issuers when Fitch has reason to believe that recoveries in an individual case would be consistent with a higher recovery rating. Fitch has applied a variation to extend this analytical approach to all Argentine-based corporates rated 'B-', reflecting their highly speculative credit profiles and their operations within a distressed operating environment (Argentina, Foreign Currency IDR CCC+). Public Ratings with Credit Linkage to other ratings TGS's ratings are linked to Argentina's sovereign rating. MACROECONOMIC ASSUMPTIONS AND SECTOR FORECASTS Fitch's latest quarterly Global Corporates Macro and Sector Forecasts data file which aggregates key data points used in its credit analysis. Fitch's macroeconomic forecasts, commodity price assumptions, default rate forecasts, sector key performance indicators and sector-level forecasts are among the data items included. ESG Considerations The highest level of ESG credit relevance is a score of '3', unless otherwise disclosed in this section. A score of '3' means ESG issues are credit-neutral or have only a minimal credit impact on the entity, either due to their nature or the way in which they are being managed by the entity. Fitch's ESG Relevance Scores are not inputs in the rating process; they are an observation on the relevance and materiality of ESG factors in the rating decision. Entity/Debt Rating Recovery Prior ----------- ------ -------- ----- Transportadora de Gas del Sur S.A. (TGS) LT IDR B- Affirmed B- LC LT IDR B- Affirmed B- senior unsecured LT B Affirmed RR3 B ============= B A H A M A S ============= FTX GROUP: Trust Says Blockchain Co. Has Not Delivered $1.3MM Coins ------------------------------------------------------------------- Yun Park at law360.com reports that a recovery trust for the bankrupt cryptocurrency exchange FTX filed a Chapter 11 adversary proceeding in Delaware bankruptcy court seeking turnover of $1.3 million worth of $XION digital tokens that the debtor's subsidiaries purchased prior to the bankruptcy filing. FTX is the world's second-largest cryptocurrency firm. FTX is a cryptocurrency exchange built by traders, for traders. FTX offers innovative products including industry-first derivatives, options, volatility products and leveraged tokens. Then CEO and co-founder Sam Bankman-Fried said Nov. 10, 2022, that FTX paused customer withdrawals after it was hit with roughly $5 billion worth of withdrawal requests. Faced with liquidity issues, FTX on Nov. 9, 2022, struck a deal to sell itself to its giant rival Binance, but Binance walked away from the deal amid reports on FTX regarding mishandled customer funds and alleged US agency investigations. SBF agreed to step aside, and restructuring vet John J. Ray III was quickly named new CEO. FTX Trading Ltd (d/b/a FTX.com), West Realm Shires Services Inc. (d/b/a FTX US), Alameda Research Ltd. and certain affiliated companies then commenced Chapter 11 proceedings (Bankr. D. Del. Lead Case No. 22-11068) on an emergency basis on Nov. 11, 2022. Additional entities sought Chapter 11 protection on Nov. 14, 2022. FTX Trading and its affiliates each listed $10 billion to $50 billion in assets and liabilities, making FTX the biggest bankruptcy filer in the US this year. According to Reuters, SBF shared a document with investors on Nov. 10, 2022, showing FTX had $13.86 billion in liabilities and $14.6 billion in assets. However, only $900 million of those assets were liquid, leading to the cash crunch that ended with the company filing for bankruptcy. The Hon. John T. Dorsey is the case judge. The Debtors tapped Sullivan & Cromwell, LLP as bankruptcy counsel; Landis Rath & Cobb, LLP as local counsel; and Alvarez & Marsal North America, LLC as financial advisor. Kroll is the claims agent, maintaining the page https://cases.ra.kroll.com/FTX/Home-Index The Official Committee of Unsecured Creditors tapped Paul Hastings as counsel, FTI Consulting, Inc., as financial advisor, and Jefferies LLC as the investment banker. Young Conaway Stargatt & Taylor LLP is the Committee's Delaware and conflicts counsel. Montgomery McCracken Walker & Rhoads LLP, led by partners Gregory T. Donilon, Edward L. Schnitzer, and David M. Banker, is representing Sam Bankman-Fried in the Chapter 11 cases. White-collar crime specialist Mark S. Cohen has reportedly been hired to represent SBF in litigation. Lawyers at Paul Weiss previously represented SBF but later renounced representing the entrepreneur due to a conflict of interest. =========== B R A Z I L =========== BRAZIL: Trade Tensions Spark Dollar Rally, Real Faces Steep Decline ------------------------------------------------------------------- Rio Times Online reports that the U.S. dollar gained ground against the Brazilian real on July 12, driven by a new wave of tariffs announced by the U.S. administration. Official sources confirm that the spot USD/BRL rate reached 5.561 on July 12 morning, up from 5.5475 at the previous close, according to Rio Times Online. The real depreciated 2.26% against the dollar, reflecting the impact of trade policy and shifting investor sentiment, the report notes. President Donald Trump's decision to impose a 50% tariff on Brazilian imports, the highest among 23 targeted countries, set the tone for global currency markets, the report relays. The tariffs, which take effect on August 1, extend earlier measures and exclude only energy and essential minerals, the report discloses. Trump cited trade imbalances and political disputes as reasons for the move, the report says. The announcement also included a 35% tariff on Canadian goods and the possibility of 15–20% tariffs on other countries, the report relays. Brazilian officials responded with strong language, recalls the report. President Luiz Inacio Lula da Silva pledged to challenge the tariffs at the World Trade Organization and to work with BRICS partners, the report discloses. He also warned of reciprocal measures if talks fail. The governor of Sao Paulo met with U.S. representatives to discuss the consequences for both countries' industries, seeking a pragmatic solution, the report relays. The dollar benefited from safe-haven flows as investors reacted to the trade dispute, according to the report. The U.S. Treasury reported record customs revenue in June, with a federal budget surplus of $27 billion, reinforcing the dollar's appeal, the report relays. Brazil's fundamentals added pressure to the real, says Rio Times Online. The country reported a trade deficit in June and weaker industrial output, which reduced foreign currency inflows, the report recalls. Falling prices for key exports like oil and iron ore compounded the negative outlook, the report discloses. Technical analysis of the USD/BRL pair supports the recent move, the report says. The daily chart shows a bullish reversal, with the price breaking above the 50-day and 100-day moving averages, the report notes. The MACD indicator crossed into positive territory, while the RSI rose to 54.16, indicating growing momentum but not yet overbought conditions, the report relays. Bollinger Bands widened, reflecting increased volatility, the report discloses. The 4-hour chart reveals a sharp rally after the tariff announcement, with the RSI reaching overbought territory at 66.29 and the MACD confirming strong momentum, the report relates. Immediate resistance stands at 5.58 to 5.62, while support lies at 5.51 and 5.48, the report notes. Volume spiked as traders repositioned for higher volatility, the report says. ETF flows showed risk aversion, with outflows from emerging markets and inflows into U.S. assets, the report relays. No official data indicated significant Brazil-specific ETF moves, but broader trends favored the dollar, the report relates. Market sentiment remains cautious, the report notes. Investors await further developments in trade negotiations and monitor for any signs of diplomatic progress, the report discloses. The combination of aggressive tariffs, weak Brazilian fundamentals, and technical breakouts drove the real lower and supported the dollar's advance, the report says. The next sessions will test whether this trend holds or if a new round of negotiations alters the landscape, the report adds. About Brazil Brazil is the fifth largest country in the world and third largest in the Americas. Luiz Inacio Lula da Silva won the 2022 Brazilian general election. He was sworn in on January 1, 2023, as the 39th president of Brazil, succeeding Jair Bolsonaro. In October 2024, Moody's Ratings upgraded the Government of Brazil's long-term issuer and senior unsecured bond ratings to Ba1 from Ba2, the senior unsecured shelf rating to (P)Ba1 from (P)Ba2; and maintained the positive outlook. S&P Global Ratings raised on Dec. 19, 2023, its long-term global scale ratings on Brazil to 'BB' from 'BB-'. Fitch Ratings affirmed on Dec. 15, 2023, Brazil's Long-Term Foreign-Currency Issuer Default Rating (IDR) at 'BB' with a Stable Outlook. DBRS' credit rating for Brazil was last reported at BB with stable outlook at July 2023. =================================== D O M I N I C A N R E P U B L I C =================================== DOMINICAN REPUBLIC: Secures Agricultural Export Deal with Bahamas ----------------------------------------------------------------- Dominican Today reports that the Dominican Republic has achieved a major breakthrough in trade relations with The Bahamas, securing access for six Dominican agricultural products -- bitter orange, pineapple, lime, avocado, banana, and plantain -- into the Bahamian market for the first time. This milestone, announced by the Dominican Embassy in Jamaica (also accredited to The Bahamas), follows nearly two years of joint sanitary inspections, regulatory alignment, and diplomatic coordination, according to Dominican Today. The approval was granted by The Bahamas Agricultural Health and Food Safety Authority (BAHFSA), with strong support from the Dominican Ministries of Agriculture and Foreign Affairs, the report notes. The effort was led by Ambassador Angie Martinez, who has actively worked to strengthen bilateral ties since becoming the first Dominican envoy to The Bahamas in 2023, the report recalls. This development builds on the recent launch of Dominican egg exports to The Bahamas and forms part of a broader strategy to position the Dominican Republic as a competitive and reliable supplier in the Caribbean, the report notes. The embassy is also working on gaining approval for over 80 more Dominican products, including fruits, vegetables, meats, dairy, seafood, and processed goods, the report relays. The Bahamas, with a high demand for food imports and a growing tourism industry, is seen as a key market, 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. ============= J A M A I C A ============= JAMAICA: BOJ Accepts 141 Bids for 28-Day Fixed Rate Certificate --------------------------------------------------------------- RJR News reports that the Bank of Jamaica is reporting that 229 bids, valued at $21.9 billion, were submitted for the $15 billion it wanted to withdraw from circulation, in order to help stabilize the dollar. The bank, however, says it accepted only 141 bids, valued at an average interest rate of 5.8% per annum, for 28-day fixed rate Certificate of Deposit, according to RJR News. The lowest bid was 5.4% per annum for $1 billion, while the highest bid was 7.5% per annum for $300 million, the report notes. 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. JAMAICA: Investor Demand for GOJ Treasury Bills Exceed Expectation ------------------------------------------------------------------ RJR News reports that the Government of Jamaica says investor demand for its short-term treasury bills has far exceeded expectations. It was seeking to raise $2.2 billion through its 90-day, 182-day and 270-day treasure bills to help fund this year's budget, according to RJR News. But investors pumped in more than double that amount, some $5.5 billion, the report notes. The 90-day bill, which targeted $700 million, attracted $1.9 billion in an average interest rate of 5.2% per year, the report relays. Another $2.1 billion was invested in the 182-day bill, also above the $700 million target, at an average interest rate of 5.4%, and the 270-day instrument, which aimed to raise $800 million, received $1.6 billion at an average rate of 5.8%, the report notes. The total amount of outstanding treasure bills now stands at $10.34 billion, 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. ===================== P U E R T O R I C O ===================== AMBASSADOR VETERANS: Seeks to Hire Financial Consultant ------------------------------------------------------- Ambassador Veterans Services of Puerto Rico LLC seeks approval from the U.S. Bankruptcy Court for the District of Puerto Rico to employ Luis R. Carrasquillo & Co., P.S.C. as financial consultant. The firm's services include providing advice in strategic planning and the preparation of Debtor's plan of reorganization, disclosure statement and business plan, and participating in negotiations with Debtor's creditors. The firm will be paid at these rates: Partner $200 per hour External Accountant $200 per hour Senior CPA $160 per hour Accountant $60 to $110 per hour Admin Support $45 per hour The firm will be paid a retainer in the amount of $10,000. The firm will also be reimbursed for reasonable out-of-pocket expenses incurred. Mr. Carrasquillo Ruiz 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 at: Luis R. Carrasquillo Ruiz CPA Luis R. Carrasquillo & Co., P.S.C. 28th Street, TI - 26 Turabo Gardens, Caguas PR 00725 Tel: (787) 746-4555 (787) 746-4556 E-mail: luis@cpacarrasquillo.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. INCAR GROUP: Seeks Chapter 11 Bankruptcy in Puerto Rico ------------------------------------------------------- On July 7, 2025, INCAR Group LLC 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 INCAR Group LLC INCAR Group LLC is a construction contractor based in Cidra, Puerto Rico. INCAR Group LLC sought relief under Chapter 11 of the U.S. Bankruptcy Code (Bankr. D.P.R. Case No. 25-03067) on July 1, 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 Carlos A. Ruiz Rodriguez, Esq. NEW FORTRESS: Moody's Cuts CFR to Ca, Outlook Remains Negative -------------------------------------------------------------- Moody's Ratings downgraded the ratings of New Fortress Energy Inc. (NFE), including its corporate family rating to Ca from Caa1, probability of default rating to Ca-PD from Caa1-PD, its senior secured term loans B to Ca from B3 and legacy 2026 and 2029 senior secured notes to C from Caa2. Concurrently, Moody's also downgraded the senior secured notes under NFE Financing LLC to Ca from B3. The Speculative Grade Liquidity rating is downgraded to SGL-4 from SGL-3. The outlook remains negative. RATINGS RATIONALE The downgrade of NFE's CFR to Ca is a result of the downgrade of the probability of default rating to Ca-PD, indicating a high risk of default, and Moody's views on overall recovery. NFE's operating results for Q1 2025 showed lower than expected performance, adding to Moody's existing concerns about the company's ability to generate sufficient cash flow to meet its debt service obligations in 2025-26 and an unsustainable capital structure that could lead to transactions that Moody's would view as a distressed exchange and a default. The company has a very complicated capital structure and the downgrade of the debt instrument ratings reflects Moody's views on potential recovery. NFE's management identified and continues to execute on a number of remedial measures, that include pursuing the settlement of NFE's claims resulting from the termination of its emergency power services contract in Puerto Rico; realization of up to $110 million in proceeds from the modification of Genera's Operation and Maintenance Agreement; receipt of remaining $98 million in proceeds from the Jamaica asset sale; and improvement in expected cash flows from new business in Puerto Rico, where NFE was just awarded a new long term LNG supply contract replacing the emergency power services contract terminated in 2024. The timing and effectiveness of these measures are inherently uncertain. NFE's high governance risks are reflected in its G-5 score and CIS-5 credit impact score and are an important consideration in these rating actions. The latest 10-Q report for Q1 2025 revealed a material weakness in internal controls over financial reporting as of March 31, 2025. Management indicates the company may not be able to continue operating unless it completes the remedial measures and addresses the material weakness promptly. The negative outlook on the ratings reflects significant execution risks and substantial uncertainty concerning the timing and adequacy of the remediation measures proposed by the management team. NFE has weak liquidity, reflected in its SGL-4 liquidity assessment. NFE relies on its sizable cash balances and expected proceeds from various claims to support its liquidity amid lower operating cash flow. To support the liquidity position, the management team has also delayed certain discretionary payments, including planned capital expenditures and dividends. In Q1 2025, NFE generated operating loss and negative operating cash flow (before capital expenditures). To support the liquidity position, the management team has delayed certain discretionary payments, including planned capital expenditures and dividends. At the end of Q1 2025, NFE reported that it had $447 million in unrestricted cash (and further $379 million in cash restricted under terms of loan agreements) prior to the closing of the divestment of its operations in Jamaica that brought about $678 million in net cash proceeds (with the remaining $98 million retained in escrow accounts pending completion of certain conditions of sale). The company used some of the proceeds to repay $270 million outstanding under its fully drawn senior secured revolver facility and to repay $55 million out of $324 million outstanding under its senior secured Term loan A facility. The company's next maturity is about $511 million notes due in September 2026. If more than $100 million of the 2026 Notes remain outstanding 91 days prior to this maturity date, the outstanding principal of $2.7 billion under the 2029 Notes issued by NFE Financing LLC becomes due. Also, if any of the 2026 Notes remains outstanding 91 days prior to the maturity date, the outstanding balanced under the revolving facility, which was $750.0 million as of March 31, 2025, becomes due. NFE's term loan B matures in 2028. However, this maturity will also accelerate to July 2026, in advance of the 2026 secured notes maturity, if these notes remain outstanding. The senior secured 2029 notes issued by NFE Financing LLC and the senior secured term loan B are rated Ca, in line with the Ca CFR. The legacy 2026 and 2029 notes are rated C, reflecting their lower collateral coverage and recovery expectations, relative to the security and guarantees packages supporting the term loan B and NFE Financing LLC notes; which is why Moody's views the C rating as more appropriate than the rating suggested by Moody's Loss Given Default for Speculative-Grade Companies Methodology model. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS Failure to execute on the remediation plans, address the forthcoming refinancing requirements and improve operating cash flow generation and affordability of debt may lead to the downgrade of the ratings. The ratings may also be downgraded if Moody's views on instrument recovery is lowered. An upgrade of the ratings would require an improvement in operating cash flow generation, reduction in default risks or increased recovery expectations for the company's debts. New Fortress Energy Inc. is a US-listed, energy infrastructure company with liquefaction, regasification and distribution natural gas operations in Puerto Rico, Mexico, Nicaragua and Brazil. The principal methodology used in these ratings was Midstream Energy published in February 2022. NFE's Ca CFR is four notches below the scorecard-indicated outcome of B3. The assigned rating reflects the company's high risk of default and Moody's views on overall recovery. ================= V E N E Z U E L A ================= CITGO PETROLEUM: Bondholders, Bidders Object to Gold Reserve Bid ---------------------------------------------------------------- globalinsolvency.com, citing Reuters, reports that holders of a defaulted Venezuelan bond, some creditors and bidders that participated in a U.S. auction of shares in the parent of Venezuela-owned refiner Citgo Petroleum filed objections to the auction's recommended outcome, court documents released showed. The challenge to the $7.4 billion offer by a group led by a unit of miner Gold Reserve could again derail the sale, according to the report. Citgo, Venezuela's priced foreign asset, has been put on the auction block to pay creditors who lost billions to the South American country's expropriations and defaults, the report notes. Citgo Petroleum Corporation is a United States-based refiner, transporter and marketer of transportation fuels, lubricants, petrochemicals and other industrial products. Based in Houston, Texas, Citgo is majority-owned by PDVSA, a state-owned company of the Venezuelan government (although due to U.S. sanctions, in 2019, they no longer economically benefit from Citgo.) Fitch Ratings, in early October 2024, affirmed the Long-Term Issuer Default Rating (IDR) of CITGO Petroleum Corp. (CITGO, or Opco) at 'B' with a Stable Outlook and the IDR of CITGO Holding, Inc. (Holdco) at 'CCC+'. Fitch also affirmed Opco's existing senior secured notes and industrial revenue bonds at 'BB'/'RR1'. S&P Global Ratings, in June 2022, affirmed its 'B-' long-term issuer credit ratings on CITGO Holding Inc. and core subsidiary CITGO Petroleum Corp. ********* S U B S C R I P T I O N I N F O R M A T I O N Troubled Company Reporter-Latin America is a daily newsletter co-published by Bankruptcy Creditors' Service, Inc., Fairless Hills, Pennsylvania, USA, and Beard Group, Inc., Washington, D.C., USA, Marites O. Claro, Joy A. Agravante, Rousel Elaine T. Fernandez, Julie Anne L. Toledo, Ivy B. Magdadaro, and Peter A. Chapman, Editors. Copyright 2025. All rights reserved. ISSN 1529-2746. This material is copyrighted and any commercial use, resale or publication in any form (including e-mail forwarding, electronic re-mailing and photocopying) is strictly prohibited without prior written permission of the publishers. Information contained herein is obtained from sources believed to be reliable, but is not guaranteed. 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