250723.mbx

250723.mbx T R O U B L E D C O M P A N Y R E P O R T E R L A T I N A M E R I C A Wednesday, July 23, 2025, Vol. 26, No. 146 Headlines A R G E N T I N A ARGENTINA: Moody's Ups LT Issuer Rating to Caa1, Outlook Now Stable ARGENTINA: Tightens Grip on Currency Market Left Awash in Pesos CAPEX S.A.: Fitch Affirms 'B-' Long-Term IDR, Outlook Stable YPF SA: Appeals Court Halts Handover of Company Shares For a Week B R A Z I L AURA MINERALS: S&P Alters Outlook to Positive, Affirms 'B+' ICR BRAZIL: Economy Has Grown Strongly Over The Past 3 Years, IMF Says OI SA: Considers Novel Ch. 15-to-Ch. 11 Shift UNIGEL GROUP: Investors Push for Bankruptcy Protection J A M A I C A JAMAICA: Upsizes Montego Bay Airport Bond to USD400 Million P U E R T O R I C O PUERTO RICO: Sunnova's Chapter 11 Complicates Solar Fund Payments VALMAR CORP: Hires Homel Antonio Mercado as Legal Counsel - - - - - ================= A R G E N T I N A ================= ARGENTINA: Moody's Ups LT Issuer Rating to Caa1, Outlook Now Stable ------------------------------------------------------------------- Moody's Ratings has upgraded the Government of Argentina's long-term foreign currency and local currency issuer ratings to Caa1 from Caa3 and changed the outlook to stable from positive. The upgrade reflects Moody's views that the extensive liberalization of exchange and (to a lesser extent) capital controls, alongside a new International Monetary Fund (IMF) program, support the availability of hard currency liquidity and ease pressure on external finances. This reduces the likelihood of a credit event. The ongoing gradual transition toward a more open capital account and continued release of exchange controls is an initial step towards external payments sustainability. The disinflation process driven by a forceful shift in fiscal and macroeconomic policy and the economic reforms that seek to remove market distortions and attract real investment will also support the IMF program objective of medium-term balance of payments sustainability. However, weak external buffers and structural impediments to investment represent persistent challenges to external stability, constraining the sovereign's credit profile at the Caa1 rating level. The stable outlook reflects a balance of upside and downside risks as policy challenges and uncertainties persist at the current Caa1 rating level. The economic recovery and popular support for the government's adjustment policies ahead of the legislative midterm elections in October could grant the government a stronger political mandate to accelerate its economic reform agenda. Downside risks stem from the removal of the remaining capital and exchange controls which could re-ignite macroeconomic imbalances that jeopardize balance of payments sustainability. Argentina's local currency country ceiling was raised to B1 from B3, while its foreign currency country ceiling was raised to B2 from Caa1. The three-notch gap between the local currency ceiling and the Caa1 sovereign rating balances the increasing predictability of government actions and institutions and a decreased footprint of the government in the economy and the financial system, against weak external balance of payments stability. The one-notch gap between the foreign currency ceiling and local currency ceiling reflects improved policy effectiveness and relatively low external indebtedness, balanced by low capital account openness. RATINGS RATIONALE RATIONALE FOR THE UPGRADE TO Caa1 EXCHANGE AND CAPITAL CONTROL LIBERALIZATION IS A KEY STEP TOWARD EXTERNAL PAYMENTS SUSTAINABILITY The upgrade reflects the decrease in the risk of a credit event, as the gradual lifting of foreign exchange restrictions enables a transition toward a more robust foreign exchange regime anchored on building international reserve buffers. In April, the authorities replaced the crawling peg system with a new exchange rate regime in which the Argentine peso floats within a band. Distortive restrictions on accessing foreign exchange in the official market were mostly unwound, although some still remain, and a small set of capital account restrictions were eased. The more flexible exchange rate framework is designed to rebuild reserves, limit overvaluation risks that have hindered competitiveness, and enable faster adjustment of external finances to enhance the availability of hard currency liquidity and remain current on external debt service. The easing of distortive foreign exchange controls is improving market functioning in various sectors of the economy. Following six quarters where the economy contracted on a year-on-year basis, economic activity returned to growth in the fourth quarter of 2024. The economy expanded 5.9% in the first quarter of 2025, driven by domestic demand and underpinned by a recovery in confidence. Disinflation has contributed to real wage increases, while the fiscal tightening has enhanced the availability of credit that is no longer crowded out by public sector borrowing. The balanced fiscal position represents a break from Argentina's long history of fiscal dominance and central bank financing of the deficit, suggesting that the current recovery is likely to be more durable. Moody's forecasts that real GDP will grow 4% in 2025 and slow marginally to 3.5% in 2026, although there is some upside risk to Moody's projections. The continued liberalization of the remaining exchange and capital controls will be gradual in order to avoid triggering instability during the ongoing macroeconomic adjustment process. The transition to the new regime has not led to substantial financial or macroeconomic volatility, easing risks that previously constrained the sovereign's rating at a lower level. DISBURSEMENTS FROM LATEST IMF PROGRAM STRENGTHEN RESERVE BUFFERS AND EASE PRESSURE ON EXTERNAL FINANCES The exchange and capital control liberalization is backed by a new Extended Fund Facility (EFF) from the IMF providing funding of $20 billion (3% of GDP) over four years, with $12 billion disbursed when the program was approved in April, and another $3 billion subject to reviews through the end of 2025. Additionally, forthcoming non-IMF multilateral disbursements will reach $6.1 billion that will further increase reserve buffers. In contrast to all other previous IMF programs, the disbursements will not be used to finance budget deficits, rather to support balance of payments stability. The large multilateral and IMF disbursements will help cover external debt service needs, while the expected boost in exports from the extractive sector and net FDI inflows should offset other foreign currency needs, as the remaining exchange and capital controls are gradually eliminated. Notwithstanding clear improvements in external finances, so far, the government's macroeconomic adjustment program has not yet yielded an endogenous accumulation of reserves, independent of IMF and multilateral inflows. This denotes some vulnerability that continues to weigh on the rating. RATIONALE FOR THE STABLE OUTLOOK The stable outlook balances the positive developments noted above, which could be more pronounced than Moody's currently expect, against continued credit challenges from the, as of yet, limited structural rebalancing of the external accounts. Less favorable terms of trade in 2025, the further easing of current account restrictions, and the cyclical recovery of domestic demand alongside the relative strength of the local currency have led to a much narrower trade surplus than last year. Outward tourism has strengthened, leading to a large deficit in the services balance. If positive domestic sentiment overstimulates economic activity, import demand could continue strengthening, requiring additional financing in 2026-27 to stabilize reserve levels. Mitigating some of these risks are the large pool of savings held abroad and strong corporate balance sheets. Argentina's positive net international investment position is a reflection of decades of capital flight due to economic instability. In the current context, these assets held abroad by the Argentine private sector (which could be as much $200 billion or 31% of GDP, two-thirds of which are held as cash and deposits) represent a potential source of support for external finances. Moreover, corporate sector balance sheets are strong, with very low debt levels. The planned gradual but full liberalization of controls and continued progress on macroeconomic adjustment should support capital inflows and asset repatriation that would, over time, ensure balance of payments sustainability. ENVIRONMENTAL, SOCIAL AND GOVERNANCE CONSIDERATIONS Argentina's Credit Impact Score of CIS-5 indicates that ESG considerations, particularly weak governance, are material to the rating and weigh heavily on the sovereign's credit profile. Argentina's exposure to environmental risks (E-3 issuer profile score) is relatively limited and arises from physical climate risks, carbon transition, water stress and threats to natural capital. Heat and water risks present credit challenges for the foreseeable future given the economy's heavy reliance on the agricultural sector that is the main earner of foreign currency for the country through the export of cereals and grains. Argentina's exposure to social risks (S-4 issuer profile score) is driven by labor and income trends that have deteriorated markedly owing to macroeconomic instability that has led to declining income levels and increased poverty rates within a highly rigid labor market. Wealth disparities and declining incomes exacerbate social tensions and increase political risks despite favorable demographics and comparatively strong educational outcomes. Governance risks (G-5 issuer profile score) weigh heavily on Argentina's credit profile due to long-standing challenges that have in the past led to inconsistent policymaking and debt defaults. Years of unpredictable and unsustainable fiscal and monetary policy frameworks have repeatedly resulted in fiscal and external imbalances that leave the economy prone to recession. GDP per capita (PPP basis, US$): 29,263 (2024) (also known as Per Capita Income) Real GDP growth (% change): -1.7% (2024) (also known as GDP Growth) Inflation Rate (CPI, % change Dec/Dec): 117.8% (2024) Gen. Gov. Financial Balance/GDP: 0.3% (2024) (also known as Fiscal Balance) Current Account Balance/GDP: 1% (2024) (also known as External Balance) External debt/GDP: 43.6% (2024) Economic resiliency: ba3 Default history: At least one default event (on bonds and/or loans) has been recorded since 1983. On July 14, 2025, a rating committee was called to discuss the rating of the Argentina, Government of. The main points raised during the discussion were: The issuer's economic fundamentals, including its economic strength, have materially increased. The issuer's institutions and governance strength, have materially increased. The issuer's fiscal or financial strength, including its debt profile, has materially increased. The issuer's susceptibility to event risks has not materially changed. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS Moody's would upgrade the sovereign's rating if continued progress on economic liberalization and/or a deepening of structural reforms durably address economic imbalances and begin to entrench debt sustainability. A sustained buildup of international reserves from materially higher non-debt generating inflows of foreign currency could support a higher rating. Conversely, the reemergence of balance of payments pressures or foreign exchange shortages that jeopardize the sovereign's ability to remain current on its external debt service could result in a downgrade. Political or economic shocks that undermine macroeconomic stability or cause increased financial volatility disrupting the progress made on macroeconomic stabilization, may also result in a rating downgrade. The principal methodology used in these ratings was Sovereigns published in November 2022. The weighting of all rating factors is described in the methodology used in this credit rating action, if applicable. Argentina's "baa3" economic strength is set below the initial score of "baa1" to reflect Moody's views that the country's comparatively high wealth levels and large economic size overstate the strength and resilience of the economy. This leads to a final scorecard-indicated outcome of B2-Caa1, compared to an initial scorecard-indicated outcome of B1-B3. The assigned rating is within the final scorecard-indicated outcome. ARGENTINA: Tightens Grip on Currency Market Left Awash in Pesos --------------------------------------------------------------- Ignacio Olivera Doll & Manuela Tobias at Bloomberg News report that investors in Argentina began to anticipate a subtle policy change as President Javier Milei seemed to ease his control of how many pesos circulate in the economy, a trade-off between inflation and economic growth ahead of October midterm elections. Before an unexpected debt auction though, Milei's economic team sent a signal to the market that it still has an iron grip on Argentina's money supply, a key ingredient to thwarting inflation, stabilising the peso -- and Milei's high approval ratings, according to Bloomberg News. "The priority always was, is and will be that there isn't an excess of pesos, as a way of consolidating the disinflation process we're going through," Economy Minister Luis Caputo posted on X, adding the Central Bank had absorbed five trillion pesos (US$4 billion) of liquidity in three trading sessions, Bloomberg News relays. This episode began when, in an effort to improve its balance sheet, Argentina's Central Bank stopped rolling over some 15 trillion pesos in short-term notes called LEFIs. It had previously offered the debt to banks to mop up excess liquidity Milei inherited from his predecessors, Bloomberg News notes. As banks searched for where to park their pesos, demand for other instruments surged so much that the one-month yield on Treasury notes called Lecaps -- now considered the new benchmark for Argentina's monetary policy -- fell to 30 percent from 35 percent over the same period, Bloomberg News relays. Argentina's Treasury sold notes worth 8.5 trillion pesos, well below how many LEFIs matured, Bloomberg News notes. "The market was left awash in pesos," Marcos Buscaglia, director of consulting firm Alberdi Partners, said in a report to investors, notes the report. "It likely also contributed to the depreciation of the peso against the dollar." The peso has lost nearly 4.6 percent so far this month against the dollar, the most in emerging markets, as investors expected the shift from LEFIs to Lecaps to ultimately expand the money supply. The Central Bank hasn't yet published monetary base figures since the LEFIs ended, Bloomberg News says. To partially take advantage of the excess pesos left in the market, the government will hold an unscheduled sale of more Treasury notes, Bloomberg News relates. As liquidity increased in recent days, analysts speculated -- and Caputo later confirmed -- that the Central Bank sought to contain that monetary expansion, Bloomberg News notes. "While the financial system may see some relief, the Central Bank appeared to send a signal to markets that – contrary to earlier expectations – it will not loosen its monetary grip," Joaquin Bagues, managing director at Buenos Aires-based Grit Capital Group, said in a phone interview, Bloomberg News relays. Milei's ability to contain Argentina's monetary base has thwarted inflation as annual price gains fell to a four-year low of 39 percent in June from a peak of nearly 290 percent in April 2024, Bloomberg News recalls. Still, a lack of liquidity has limited bank lending that could help sustain an economic recovery, Bloomberg News notes. Argentine financial markets are growing more jittery about the balancing act between lowering inflation and stimulating growth as analysts point out the impact on the monetary base from unwinding central bank debt as well as a sudden drop in interest rates, according to Bloomberg. "We're seeing a sharp increase in the monetary base that isn't justified by any rise in money demand," said Emiliano Merenda, chief executive officer and partner at Pharos Capital in Buenos Aires, Bloomberg News says. "Two decisions in less than three months – the transfer of Central Bank profits to the Treasury and the unwinding of the LEFIs – have nearly doubled the broad monetary base," he added. Timing adds to the challenge, notes the report. Dollars tend to dry up in Argentina in the third quarter as the peak of the agricultural harvest -- its main source of hard currency -- winds down, Bloomberg News notes. At the same time, political uncertainty ahead of elections is fuelling dollar demand as a hedge. Outbound tourism during South America's winter holidays is also pressuring reserves, Bloomberg News relays. Argentina's economy is feeling the effects of a tight money supply, Bloomberg News discloses. Interest rates adjusted for inflation -- once as high as 30 percentage points -- has curbed credit, slowed spending, and stressed corporate payment chains, Bloomberg News says. Meanwhile, an overvalued peso has hurt exporters by eroding competitiveness and margins, Bloomberg News relays. Argentina posted a US$1.9–billion trade surplus in the first five months of 2025, down 79 percent from a year earlier, Bloomberg News notes. Construction activity contracted in May for the third time in five months, and retail sales remain severely depressed, Bloomberg News says. So far, the short-lived liquidity influx may bring temporary relief but risks rekindling inflation to some extent, though no analysts anticipate price hikes like the ones seen at the beginning of Milei's term, Bloomberg News discloses. Some, however, see the policy change as a strategic move to revive growth ahead of elections – sacrificing tight monetary policy for pragmatism, Bloomberg News says. "The government is recalibrating -- relaxing monetary policy marginally and accepting somewhat higher inflation in pursuit of balance," Federico Filippini, chief economist at Adcap, said in a report to investors, relates Bloomberg. "The new mix reflects, among other things, the need to inject liquidity into the financial system," he added. 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. CAPEX S.A.: Fitch Affirms 'B-' Long-Term IDR, Outlook Stable ------------------------------------------------------------ Fitch has affirmed Capex S.A.'s (Capex) Long-Term (LT) Foreign Currency (FC) and Local Currency (LC) Issuer Default Ratings (IDRs) at 'B-'. Fitch has also affirmed the company's USD188 million senior unsecured bonds due 2028 at 'B' with a Recovery Rating of 'RR3'. The Rating Outlook is Stable. Capex produces under 20,000 barrels of oil equivalent per day (boed), constraining it to the low end of the 'B' rating category. However, vertical integration through its generation plant provides some benefit. The ratings reflect Capex's moderate U.S. dollar-denominated leverage profile, which is expected to be around 3.0x in fiscal 2026 and remain at that level through fiscal 2028, with robust EBITDA interest coverage of 5.0x. Key Rating Drivers Small Production Profile: Capex´s ratings are constrained by its production of less than 20,000 boed, placing it at the low end of the 'B' category. The company´s small and concentrated production profile in Argentina exposes it to operational and macroeconomic risks typical of small-scale oil and gas producers. Fitch expects Capex's production to average 17,500 boe per day (boed) from fiscal 2026 to fiscal 2028, with gas production representing approximately 49% of total output. As of April 2025, 42% of the company's 1P gas reserves and 28% of its oil reserves were developed. Capex had proven reserves (1P) of 87.2 million boe and Reserve Life Index (RLI) of 14 years as of January 2025. An upgrade would require production above 45,000 boed. The company has a strong concession life, with almost 90% of its production from concessions with an expiration in 2045 or later. Operating Environment: Capex operates in an environment characterized by regulatory risks in the electricity sector and favorable dynamics in the oil and gas industry, which Fitch expects to improve. The oil and gas sector will benefit from new regulations aimed at encouraging further development in the sector and will provide tax, customs, and currency exchange incentives, catalyzing investment in the country. Conversely, the company's energy operations are subject to significant regulatory oversight, with the government exerting considerable influence over price and tariff regulations and controlling subsidies for industry participants. Moderate Medium-Term Leverage: Fitch estimates Capex's fiscal 2026 U.S. dollar-denominated gross leverage to be near 3.0x, in line with its fiscal 2025 leverage 2.8x, which spiked largely from increased debt for capital expenditures. Subsequently, Fitch expects leverage to average 2.9x by fiscal 2028, consistent with a 'bb' assessment in Fitch's Oil and Gas Production Companies Sector Navigator. Oil prices may influence the pace at which Capex is able to deleverage. Fitch projects oil prices will drop to USD60/bbl by YE 2028 from USD76.6/bbl at YE 2024. Fitch expects average EBITDA interest coverage to be strong at 5.0x and net leverage to average below 3.0x through the rating horizon. Peer Analysis Capex's closest peer is Petroquimica Comodoro Rivadavia (PCR; B-/Stable). Both companies derive most of their revenues from hydrocarbon production and electricity, while PCR benefits from its cement sector. Production is relatively flat for both companies, with Capex and PCR averaging 17,500 boe/d and 19,000 boe/d, respectively, over the rating horizon. Pampa Energia S.A. (Pampa; B-/Stable), an integrated energy company in Argentina, averages 100,000 boe/d of oil and gas. Capex and PCR's electricity revenues are exposed to CAMMESA, which directly reflects sovereign risk. However, PCR's Ecuadorian cash flow, oil exports from Argentina and cash held abroad, covers its hard currency interest expense by 1.5x for the next four years. This mitigates risk from Argentina's challenging economic environment. Capex has a higher RLI of 14 years, compared to PCR's 2.7 years. Capex's gross leverage is expected to average 2.9x throughout the rating horizon, compared to PCR's 2.7x. Key Assumptions - Fitch published Argentina USD/ARS average exchange rate adjusted for Capex's fiscal YE of April 30 at 1,279 in fiscal YE 2026, 1,527 in fiscal YE 2027, and 1,667 in fiscal YE 2028. - Fitch's price deck for Brent oil prices adjusted for Capex's fiscal YE of April 30 at USD70/barrel (bbl) in 2025, USD65/bbl in 2026, USD65/bbl in 2027, USD60/bbl in 2028. - Natural gas production averaging approximately 8,500 boed annually over fiscal 2026-2028. - Oil production reaching averaging 8,500 annual boed over fiscal 2026-2028. - Annual electricity production of about 4,500 gigawatt-hour. - Diadema Wind Farm average availability factor over fiscal years 2024-2027 at 96% and average load factor of 49%, with an average power purchase agreement price of USD103/megawatt-hours. - 1P reserve life replacement of at least 100% over the rating horizon. - Total capex of about USD270 million over fiscal 2026-2028, mostly concentrated in the fields of Agua del Cajon. - No dividends payments. Recovery Analysis Fitch classifies Argentina as a Group D country in line with its Country-Specific Treatment of Recovery Criteria, which would ordinarily result in Capex's recovery rating being capped at 'RR4'. However, Fitch has applied a criteria variation to assign an 'RR3' (51% to 70%). See the criteria variation section for more details on the variation. RATING SENSITIVITIES Factors that Could, Individually or Collectively, Lead to Negative Rating Action/Downgrade - A downgrade of Argentina's Country Ceiling; - Cash falling below USD15 million; - Total debt/EBITDA of 4.0x or more. Factors that Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade - Net production rising on a sustainable basis to 45,000 boed; - Increase in reserve size and diversification while maintaining a minimum 1P reserve life of close to 10 years. Liquidity and Debt Structure As of April 2025, Capex had available cash and equivalents of USD18 million. Capex's maturities are spread out, with its largest obligation being a USD188 million bond due in 2028. The bond payments started in February 2024 and there will be eight semi-annual payments. The company recently issued USD45 million local notes at 7.75% to refinance upcoming maturities. At fiscal YE 2026 and 2027, the company has maturities of ARS 134 billion and ARS144 billion, respectively. Issuer Profile Capex is an integrated company focused on the exploration and exploitation of hydrocarbons and the generation of electric, thermal and renewable energy in Argentina. Criteria Variation Fitch applied a criteria variation to assigning an 'RR3' rating to the debt instrument. The criteria variation applies to the section "When an Instrument Enters a Distressed or Defaulted State" of the Country-Specific Treatment of Recovery Ratings Criteria, where the criteria allow for the assigned RR 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 Capex's IDRs rated at 'B-', reflecting the highly speculative credit profile and its operations within a distressed operating environment (Argentina, as reflected by the Foreign Currency IDR and Country Ceiling). Argentina is in Group D, where the assigned recovery ratings are capped at 'RR4'. Fitch believes the recovery prospects for Capex are higher than the expected recovery of 31%-50% for the 'RR4' band. This is based on Fitch's bespoke recovery analysis for Capex and precedents of debt exchange offerings driven by capital control restrictions established 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 recovery ratings were capped 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. 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 Capex S.A. has an ESG Relevance Score of '4' for GHG Emissions & Air Quality due to to the growing importance of the continued development and execution of the company's energy-transition strategy, which has a negative impact on the credit profile, and is relevant to the rating[s] in conjunction with other factors. The highest level of ESG credit relevance is a score of '3', unless otherwise disclosed in this section. A score of '3' means ESG issues are credit-neutral or have only a minimal credit impact on the entity, either due to their nature or the way in which they are being managed by the entity. Fitch's ESG Relevance Scores are not inputs in the rating process; they are an observation on the relevance and materiality of ESG factors in the rating decision. Entity/Debt Rating Recovery Prior ----------- ------ -------- ----- Capex S.A. LT IDR B- Affirmed B- LC LT IDR B- Affirmed B- senior unsecured LT B Affirmed RR3 B YPF SA: Appeals Court Halts Handover of Company Shares For a Week ----------------------------------------------------------------- Buenos Aires Times reports that Argentina has secured a temporary reprieve in its legal battle over the 2012 expropriation of state energy firm YPF, the latest twist in a complicated case. A New York appeals court suspended for one week an order requiring the country to hand over a majority stake in the public company, according to Buenos Aires Times. The court granted a "temporary administrative stay" on enforcement of the so-called "turnover order" issued on June 30, which would have forced Argentina to transfer 51 percent of YPF shares to the litigation fund Burford Capital and other claimants, the report relays. According to the ruling, the pause was granted to allow for an "orderly presentation and consideration" of arguments from both sides, the report says. Burford had until July 17 to file its opposition to a longer suspension, while Argentina's response was due July 22, the report notes. A panel of three judges will then assess the submissions and decide whether to keep the order on hold for the duration of Argentina's broader appeal, the report discloses. If the court rejects Argentina's request, the turnover order would come back into effect immediately, the report notes. For now, President Javier MIlei's government has bought itself a brief but significant delay in a case with major financial and political stakes, the report adds. About YPF SA YPF SA, an energy company, engages in the oil and gas upstream and downstream activities in Argentina. Its upstream operations include the exploration, exploitation, and production of crude oil, and natural gas. The company's downstream operations include petrochemical production and crude oil refining; transportation and distribution of refined and petrochemical products; commercialization of crude oil, petrochemical products, and specialties. As reported in the Troubled Company Reporter-Latin America in January 2025, Fitch Ratings affirmed YPF S.A.'s Long-Term Foreign and Local Currency Issuer Default Ratings (IDRs) at 'CCC'. Additionally, Fitch has affirmed YPF's outstanding senior unsecured notes at 'CCC' with Recovery Rating of 'RR4'. The company's Standalone Credit Profile (SCP) remains 'b', and its ratings are aligned with Fitch's "Government Related Entities Criteria," reflecting government ownership and strategic importance. =========== B R A Z I L =========== AURA MINERALS: S&P Alters Outlook to Positive, Affirms 'B+' ICR --------------------------------------------------------------- On July 21, 2025, S&P Global Ratings revised the global scale and national scale rating outlooks on Aura Minerals Inc. to positive from stable. S&P also affirmed the global scale long-term issuer credit rating at 'B+' and the Brazilian national scale rating at 'brAA'. In addition, S&P affirmed the 'brAA' issue-level ratings on the debenture issued by Aura Almas, with the recovery ratings of '3' (65%) unchanged. The positive outlook indicates the possibility of an upgrade in the next 12 months if the company succeeds in growing its scale, namely with the ramp up of Borborema, integrating Serra Grande, and starting another project in that timeframe, while it keeps gross debt to EBITDA below 2.0x. Aura Minerals Inc. (Aura) concluded an IPO on U.S. stock exchange the Nasdaq on July 17, 2025, raising almost $200 million from the listing, which will help it sustain low leverage metrics despite the ongoing growth strategy. Aura also announced the acquisition of Serra Grande, a mine of 80,000 ounces (oz) of production capacity per year, which will accelerate volume growth. The U.S. listing should allow accelerated growth for Aura without any increase in leverage. Aura raised $196 million from the IPO by issuing 8.1 million shares, or about 10% of the company's capital. The proceeds will be used to pay for the $76 million acquisition of Serra Grande mine in Brazil and the development of new projects, such as Matupa in Brazil and Era Dorada in Guatemala. With the ramp up of the low cash cost Borborema mine in third-quarter 2025, and the annualized output of Serra Grande (transaction still to be approved by antitrust authorities), Aura's production should surpass 400,000 oz in 2026 and get close to 500,000 oz in 2027 with the startup of a new project. Aura has built a track record of constructing small to medium projects and successfully turning around older assets. Since the change in ownership in 2016, Aura has turned around older and costlier assets. This includes the Aranzazu and San Andres mines, which had life of mines (LOM) of about five years and were extended continuously with higher exploration expenses, maintaining stable production volumes in the past five years. Additionally, the company started commercial operations at Almas in 2023 and should ramp up Borborema in the next few months. This track record will be necessary for the company in its attempt to decrease cash costs and increase production at the newly acquired Serra Grande mine, and to develop new projects such as Matupa or Era Dorada. Record high gold prices are propelling free operating cash flow (FOCF) amid the company's significant expansion capital expenditure (capex) program. The geopolitical uncertainties that drove gold demand up are resulting in record prices that reached $3,450 per oz in June 2025 and an average of $3,100 per oz in the year to date, versus $2,200 in the same period of 2024. This, along with growing volumes, means S&P expects FOCF of about $90 million in 2025, and about $130 million annually in the next few years, even amid a heavy expansion capex plan of at least $170 million per year. Also, S&P expects gross debt to EBITDA will be close to 1.0x, even considering extraordinary dividend payments and discretionary share repurchases. S&P said, "Our rating reflects our view of Aura's limited scale. Aura is a smaller gold producer, with production for 2025 estimated at slightly below 300,000 oz. It has diversified production between six mines, considering Borborema's startup and Serra Grande's integration, but it still lacks scale compared to higher-rated peers. Nevertheless, the comprehensive pipeline of new projects and cushion in its metrics partially mitigate this smaller scale. "The positive outlook reflects our view that the company should accelerate volume growth following the U.S. listing and the acquisition of the Serra Grande mine in Brazil. Aura should approach 400,000 oz of production in 2026 and get close to 500,000 oz in 2027. Additionally, the company's cash generation is boosted by favorable gold prices, which should maintain gross debt to EBITDA below 1.5x in the next few years, allowing the company to internally fund its significant capex plan, and acquisitions. "We could revise the outlook back to stable in the next 12 months if the company does not continue growing, or if a drop in gold and copper prices or poorer operational volumes from a decrease in ore grades or adverse weather hurt volumes, while high capex, dividends, and working capital needs weaken credit metrics." BRAZIL: Economy Has Grown Strongly Over The Past 3 Years, IMF Says ------------------------------------------------------------------ The Executive Board of the International Monetary Fund (IMF) completed the Article IV Consultation for Brazil. The authorities have consented to the publication of the Staff Report prepared for this consultation, which states that: Brazil's economy has grown strongly over the past three years, surprising on the upside, and, as expected, is showing signs of moderation. The expansion has reflected strong consumption supported by fiscal stimulus on the demand side, and supply-side factors. Growth is projected to moderate from 3.4 percent in 2024 to 2.3 percent in 2025, amid tight monetary and financial conditions, a scaling back of fiscal support, and heightened global policy uncertainty. Over the medium term, growth is forecasted to recover to 2.5 percent, supported by the normalization of monetary policy and supportive structural factors, notably the implementation of the efficiency-enhancing VAT reform and the acceleration in hydrocarbon production. Inflation is expected to reach 5.2 percent by end-2025, before gradually converging to the 3 percent target by end-2027. The balance of risks to the growth outlook is tilted to the downside amid heightened global policy uncertainty. Risks to the inflation outlook are broadly balanced. In the near term, higher growth could stem from stronger-than-expected household consumption in the context of a still tight labor market. Over the medium term, upside risks stem from faster implementation of productivity-enhancing reforms and the Ecological Transformation Plan. Downside risks stem externally from a slowdown in major economies amid heightened global trade tensions and policy uncertainty; and domestically from larger-than-expected effects from monetary policy tightening and the possibility of a lower-than-envisaged fiscal effort, which—while supporting near-term growth—could increase policy uncertainty, resulting in higher borrowing costs, weaker investment, and ultimately lower growth. Executive Board Assessment Executive Directors welcomed the Brazilian economy's strong growth performance and falling unemployment and poverty in recent years, and commended the progress in structural reforms which has helped lift medium-term growth prospects. Noting downside risks, including from the recent increase in global policy uncertainty and heightened trade tensions, Directors encouraged the authorities to ensure the continued convergence of inflation to target, secure fiscal sustainability, and continue structural reforms to tackle long-standing challenges. Directors commended the authorities' efforts to continue improving the fiscal position and recommended further steps to put public debt on a firm downward path, facilitate a lower path of interest rates, and open space for priority investments. They concurred that measures to mobilize revenues, including rationalizing inefficient tax expenditures and tackling budget rigidities, would support these efforts. Directors considered that the ongoing VAT reform would simplify the tax system and boost productivity, and recommended personal income tax reforms to enhance the tax system's progressivity and domestic revenue mobilization. An enhanced fiscal framework with a strong medium-term anchor would reinforce credibility and sustainability. Directors commended the Central Bank of Brazil's (BCB) clear commitment to price stability and indicated that the monetary policy tightening has been appropriate and consistent with bringing inflation back to the 3 percent target. Directors also noted that the continued credibility of both fiscal and monetary policy frameworks will be important for anchoring inflation expectations. They agreed that the flexible exchange rate regime and adequate FX reserves remain valuable shock buffers. Directors encouraged the authorities to continue to gradually phase out the financial transaction tax, which would eliminate a multiple currency practice. Directors welcomed that the financial system remains resilient, with banks highly liquid and adequately capitalized. While commending the authorities' implementation of regulatory changes aimed at further strengthening financial sector resilience, Directors encouraged close monitoring and oversight of household credit risks, including in light of the recently enhanced private payroll loan program. Directors also welcomed the authorities' leadership in the financial innovation agenda, which has promoted financial inclusion, efficiency, and competition. They concurred that providing the BCB with greater administrative and financial autonomy would support continued progress with technological innovations. Directors commended the authorities on their leadership in multilateral cooperation, including their implementation of Brazil's Ecological Transformation Plan and their progress in reducing deforestation. They positively noted that Brazil is on track to meet its Nationally Determined Contribution targets. Directors also emphasized that continued efforts to simplify regulations, strengthen the anti-corruption and AML/CFT frameworks, increase labor force participation, especially for women, and facilitate skills upgrading would further raise medium-term growth prospects, while extending gains in social inclusion. 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. OI SA: Considers Novel Ch. 15-to-Ch. 11 Shift --------------------------------------------- Ben Zigterman at law360.com reports that Oi S.A., a Brazilian telecommunications company, that won Chapter 15 recognition of its $6.7 billion restructuring proceedings in its native country is now asking to terminate that recognition so that it can file for a global restructuring of its assets under Chapter 11, a maneuver Chapter 15 experts said would likely be a first. As reported by the Troubled Company Reporter-Latin America on June 5, 2025, Fitch Ratings has downgraded Oi S.A.'s Foreign and Local Currency Long-Term Issuer Default Rating (IDR) to 'C' from 'CCC-' and its National Long-Term rating to 'C(bra)' from 'CCC-(bra)'. Fitch has also downgraded Oi's USD655 million super senior secured notes due in June 2027 and USD1.4 billion subordinated secured debt PIK notes due in December 2028 to 'C' with a Recovery Rating of 'RR4' from 'CCC-'/'RR4'. The downgrade reflects Oi's worsening financial situation, highlighted by intensified cash burn beyond Fitch's expectations, according to the report. UNIGEL GROUP: Investors Push for Bankruptcy Protection ------------------------------------------------------ globalinsolvency.com, citing ValorInternational.com, reports that Brazilian petrochemical group Unigel is considering filing for judicial recovery (bankruptcy protection) to facilitate a new round of capitalization. The company has already signed non-disclosure agreements (NDAs) with potential investors, who have until October to review its financial data and business turnaround plans, according to the report. According to sources close to the informal talks, one interested group has made its investment conditional on a bankruptcy filing, a condition Unigel has not resisted, the report notes. Unigel Participacoes SA is a Brazilian fertilizer manufacturer. As reported by the Troubled Company Reporter-Latin America on July 21, 2025, S&P Global Ratings lowered its global scale issuer credit ratings on Unigel Participacoes S.A. to 'CC' from 'CCC' and its national scale issuer credit rating to 'brCC' from 'brB-'. The negative outlook indicates that S&P will lower its ratings on Unigel to 'SD' (selective default) or 'D' (default) upon confirmation of the standstill agreement and suspension of payments or if the company enters a new debt restructuring process. S&P said it now considers a default to be a virtual certainty as Unigel announced that it has begun negotiations with its financial creditors to formalize an agreement that will temporarily suspend the enforceability of certain pecuniary obligations of the company. This potential standstill agreement would constitute an event of default, S&P added. ============= J A M A I C A ============= JAMAICA: Upsizes Montego Bay Airport Bond to USD400 Million ----------------------------------------------------------- RJR News reports that the government is seeking to raise more money on the international market, increasing its planned borrowing through its special purpose vehicle Montego Bay Airport Revenue Finance Limited to US$400 million. That's up from the original target of US$385 million, due to strong investor demand, according to RJR News. Citigroup has been named the sole book runner for the deal, which was expected to close July 22, the report notes. The bond will mature in June 2035 -- 10 years from now -- and carries an interest rate of 6.6% per annum, the report relays. The funds will go toward clean water infrastructure, general administrative expenses and six months of interest payments which will be set aside in the debt service reserve account, 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 ===================== PUERTO RICO: Sunnova's Chapter 11 Complicates Solar Fund Payments ----------------------------------------------------------------- Angelica Serrano-Roman of Bloomberg Law reports that Puerto Rico's solar installers are keeping a close eye on how Sunnova Energy International Inc.'s bankruptcy -- and any transfer of its assets -- will affect the release of millions in federal reimbursements for installing solar panels in underserved communities. The company partnered with local dealers to carry out installations under a $281 million agreement with the U.S. Department of Energy announced in 2023, according to the report. While the reimbursements represent only a fraction of Sunnova's overall debt, they highlight the wider consequences of the Chapter 11 case for businesses on the island, according to Bloomberg Law. About Puerto Rico Puerto Rico is a self-governing commonwealth in association with the United States. The chief of state is the President of the United States of America. The head of government is an elected Governor. There are two legislative chambers: the House of Representatives, 51 seats, and the Senate, 27 seats. The governor-elect is Ricardo Antonio Ã¢â‚¬Å"RickyÃ¢â‚¬Â Rossello Nevares, the son of former governor Pedro Rossello. In 2016, the U.S. Congress passed PROMESA, which, among other things, created the Financial Oversight and Management Board and imposed an automatic stay on creditor lawsuits against the government, which expired May 1, 2017. The members of the oversight board are: (i) Andrew G. Biggs, (ii) Jose B. Carrion III, (iii) Carlos M. Garcia, (iv) Arthur J. Gonzalez, (v) Jose R. Gonzalez, (vi) Ana. J. Matosantos, and (vii) David A. Skeel Jr. On May 3, 2017, the Commonwealth of Puerto Rico filed a petition for relief under Title III of the Puerto Rico Oversight, Management, and Economic Stability Act (Ã¢â‚¬Å"PROMESAÃ¢â‚¬Â). The case is pending in the United States District Court for the District of Puerto Rico under case number 17-cv-01578. A copy of Puerto Rico PROMESA petition is available at http://bankrupt.com/misc/1701578-00001.pdf On May 5, 2017, the Puerto Rico Sales Tax Financing Corporation (COFINA) commenced a case under Title III of PROMESA (D.P.R. Case No. 17-01599). Joint administration has been sought for the Title III cases. On May 21, 2017, two more agencies Ã¢â‚¬â€ Employees Retirement System of the Government of the Commonwealth of Puerto Rico and Puerto Rico Highways and Transportation Authority (Case Nos. 17-01685 and 17-01686) commenced Title III cases. U.S. Chief Justice John Roberts named U.S. District Judge Laura Taylor Swain to preside over the Title III cases. The Oversight Board has hired as advisors, Proskauer Rose LLP and OÃ¢â‚¬â„¢Neill & Borges LLC as legal counsel, McKinsey & Co. as strategic consultant, Citigroup Global Markets as municipal investment banker, and Ernst & Young, as financial advisor. Martin J. Bienenstock, Esq., Scott K. Rutsky, Esq., and Philip M. Abelson, Esq., of Proskauer Rose LLP; and Hermann D. Bauer, Esq., at O'Neill & Borges LLC are onboard as attorneys. Prime Clerk LLC is the claims and noticing agent. Prime Clerk maintains the case Web site https://cases.primeclerk.com/puertorico Jones Day is serving as counsel to certain ERS bondholders. Paul Weiss is counsel to the Ad Hoc Group of Puerto Rico General Obligation Bondholders. About Sunnova Energy Sunnova Energy International Inc. (NYSE: NOVA) is an industry-leading adaptive energy services company focused on making clean energy more accessible, reliable, and affordable for homeowners and businesses. Through its adaptive energy platform, Sunnova provides a better energy service at a better price to deliver its mission of powering energy independence. Sunnova Energy sought relief under Chapter 11 of the U.S. Bankruptcy Code (Bankr. S.D. Tex. Case No. 25-90160) on June 8, 2025. In its petition, the Debto reports estimated assets and liabilities between $10 billion and $50 billion each. The Debtor is represented by Jason Gary Cohen, Esq. at Bracewell, LLP. VALMAR CORP: Hires Homel Antonio Mercado as Legal Counsel --------------------------------------------------------- Valmar Corp. seeks approval from the U.S. Bankruptcy Court for the District of Puerto Rico to employ Homel Antonio Mercado Justiniano, Esq. as counsel. The firm's services include: a) examining documents of the Debtor and other necessary information to submit Schedules and Statement of Financial Affairs; b) preparing the Disclosure Statement, Plan of Reorganization, records and reports as required by the Bankruptcy Code and the Federal Rules of Bankruptcy Procedure; c) preparing Applications and proposed orders to be submitted to the Court; d) identifying claims and causes of action assert able by the Debtor-in-possession on behalf of the estate herein; e) examining proof of claims filed and to be filed in the case herein and the possible objections to certain of such claims; f) advising the Debtor-in-possession and preparing documents in connection with the ongoing operation of Debtor's business; g) advising the Debtor-in-possession and preparing documents in connection with the liquidation of the assets of the estate, if needed, including analysis and collection of outstanding receivables and possible Motion for Sale or for Post Petition Loans; and h) assisting and advising the Debtor-in-possession in the discharge of any and all the duties imposed by the applicable dispositions of the Bankruptcy Code and the Federal Rules of Bankruptcy Procedure. The firm will be paid at these rates: Attorneys $250 per hour Associates $125 per hour Paralegals $50 per hour The firm received from the Debtor a retainer of $8,000 on July 2, 2025. The firm will also be reimbursed for reasonable out-of-pocket expenses incurred. As 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: Homel Antonio Mercado Justiniano, Esq. Calle Ramirez Silva, Esq. Ensanche Martinez, Esq. Mayaguez, PR 00680-4714 Tel: (787) 831-2577 Fax: (787) 805-7350 Email: hmjlaw2@gmail.com 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. ********* S U B S C R I P T I O N I N F O R M A T I O N Troubled Company Reporter-Latin America is a daily newsletter co-published by Bankruptcy Creditors' Service, Inc., Fairless Hills, Pennsylvania, USA, and Beard Group, Inc., Washington, D.C., USA, Marites O. Claro, Joy A. Agravante, Rousel Elaine T. Fernandez, Julie Anne L. Toledo, Ivy B. Magdadaro, and Peter A. Chapman, Editors. Copyright 2025. All rights reserved. ISSN 1529-2746. This material is copyrighted and any commercial use, resale or publication in any form (including e-mail forwarding, electronic re-mailing and photocopying) is strictly prohibited without prior written permission of the publishers. Information contained herein is obtained from sources believed to be reliable, but is not guaranteed. The TCR Latin America subscription rate is US$775 per half-year, delivered via e-mail. Additional e-mail subscriptions for members of the same firm for the term of the initial subscription or balance thereof are US$25 each. For subscription information, contact Peter A. Chapman at 215-945-7000. . * * * End of Transmission * * *