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250725.mbx T R O U B L E D C O M P A N Y R E P O R T E R L A T I N A M E R I C A Friday, July 25, 2025, Vol. 26, No. 148 Headlines A R G E N T I N A ARCOR S.A.I.C: Fitch Assigns 'B+' Rating to Sr. Unsecured Notes B R A Z I L AZUL SA: Creditors Support Bankrupt Airline's $1.57B DIP Package JBS SA: Invests $7 Mil Toward Livestock Traceability Program C A Y M A N I S L A N D S ARABIAN CENTRES III: Fitch Lowers Rating on Sr. Unsec Debt to 'BB' D O M I N I C A N R E P U B L I C DOMINICAN REPUBLIC: Recovers More Than RD$6.5BB Lost to Corruption E C U A D O R CUENCA DPR: Fitch Affirms 'B' Rating on Two Series Loans H O N D U R A S HONDURAS: Moody's Affirms 'B1' Issuer & Senior Unsecured Ratings J A M A I C A BIRDSHACK: Closes Red Hills Outlet Less Than a Year After Opening DIGICEL MIDCO: S&P Rates Proposed $415MM Sr. Unsec Notes 'B-' JAMAICA: Needs Strong Middle Class to Drive Econonic Growth LASCO FINANCIAL: Jaycinth Hall to Step Down as Managing Director M E X I C O UNIVISION COMMUNICATIONS: Moody's Rates New Sr. Sec. Notes 'B2' P U E R T O R I C O MACY'S RETAIL: Moody's Rates New Senior Unsecured Notes 'Ba2' - - - - - ================= A R G E N T I N A ================= ARCOR S.A.I.C: Fitch Assigns 'B+' Rating to Sr. Unsecured Notes --------------------------------------------------------------- Fitch Ratings has assigned Arcor S.A.I.C.'s (Arcor) proposed benchmark-size senior unsecured notes due 2033 a 'B+' rating with a Recovery Rating of 'RR3'. Proceeds from the issuance will be used to refinance the company's short-term debt. Fitch currently rates Arcor's Long-Term Foreign Currency and Local Currency Issuer Default Ratings (IDRs) at 'B'. The Rating Outlook is Stable. The rating reflects the company's broad market presence in South America's confectionary sector, recognized brands, and vertical integration. It also reflects its adequate leverage and access to alternative financing. Arcor's IDRs are one notch higher than Argentina's Country Ceiling (CC) of 'B-', reflecting Fitch's expectations that the company will be able to cover its hard currency debt service with a combination of cash held abroad, export earnings, and cash flow from subsidiaries outside of Argentina. Key Rating Drivers Strong Business Position: Arcor is a leading Latin American producer of confectionary and cookie products. The company specializes in consumer food (69% of its revenue), packaging (19%), and agribusiness (12%). Its vertical integration ensures the quality of supplies and the availability of main inputs. Arcor's good brand recognition and distribution network support its leading market shares in chocolates, candies, cookies, and packaging in Argentina, its main market. The company has a brand portfolio that reaches consumers in over 100 countries. FC IDR Above Country Ceiling: Argentina CC of 'B-' is applicable to Arcor, due to its primary operations in the country. The company is rated one notch above Argentina's CC due to sufficient cash balance outside Argentina, cash generation from exports, and sufficient offshore operating EBITDA to comfortably cover its hard currency debt service for at least 12 months. Fitch's framework for rating FC IDRs above an issuer's applicable CC assesses the issuer's ability to cover hard currency debt service from recurring cash flows or available liquidity held out of where the CC is applicable. If coverage is 1.0x-1.5x for at least 12 months and that ratio is projected to be maintained throughout the forecast period, the issuer's FC IDR may be rated one notch above the applicable CC. Geographic Concentration: Arcor's operations are concentrated in Argentina (rated CCC+), which accounts for about 70% of its sales and close to 85% of its EBITDA. This exposes the company to inflation and sovereign-related risks like currency depreciation. The company generated about 8% of sales in Brazil (BB/Stable), around 10% in Andean region (Chile, Peru, and Ecuador), and the remaining 12% in other Latin American countries, Mexico, the U.S., and Africa. This distribution remained unchanged in 1Q25. Persistent Operating Environment Risk: Fitch expects Arcor's operational and financial strategy to remain prudent given Argentina's still-weak operating environment. In 2024, the company's results continued to be affected by the devaluation of the Argentinean peso. This increased production costs and led to price increases for consumer food products, which is Arcor's largest business segment representing 69% of total sales. Fitch will monitor the company's ability to balance capex while maintaining sufficient liquidity for short-term obligations and keep leverage stable. Leverage Expected to Improve: Fitch expects Arcor's EBITDA leverage to be in the 2.0x to 2.5x range over the next few years, based on profitability recovery. Arcor has shown operational resilience and the ability to access local sources of funding. The company has already refinanced a portion of its 2025 short-term maturities via local bond issuances. Arcor and Bagley Call Option: Arcor S.A.I.C. and Bagley Argentina, S.A., jointly own about 49% of the shares of Mastellone Hermanos Sociedad Anonima (B-/Stable), a leading dairy producer in Argentina. Arcor has a call option on the remaining 51% stock since 2020. The Arcor/Bagley purchase option was exercised on April 28 and rejected by Mastellone's majority shareholders due to disagreements on the transaction's price. Fitch believes Arcor has sufficient headroom to execute the purchase option without triggering negative rating sensitivities and will monitor the resolution of the purchase option. Fitch views Mastellone as strategic for Arcor in the long term. Peer Analysis Arcor has lower scale relative to other packaged food companies, such as Nestle SA (A+/Stable), Kraft Heinz Company (BBB/Stable), and Grupo Bimbo, S.A.B. de CV (BBB+/Stable), which have broader diversification and global presence. Arcor's operations are concentrated in Argentina. However, it has grown through organic and inorganic means, and entered into partnerships to expand its regional presence. Fitch estimates that Arcor's EBITDA leverage will be under 2.5x over the next few years. This is comparable to investment-grade peers such as Alicorp S.A.A.(BBB/Stable), Bimbo, and Nestle, which have EBITDA leverage ratios in a similar range. Arcor has lower EBITDA leverage than Kraft, which is expected to be sustained in the low-to-mid 3x range. In terms of profitability, Arcor's projected EBITDA margins of around 8.8% are lower than the 12%-13% expected for Bimbo and Alicorp and the 19%-25% range of Nestle and Kraft. Key Assumptions - Revenue growth driven by inflation and real GDP growth. - EBITDA to remain around USD350 million per year over 2025-2027. - Capex to be around USD120 million per year for 2025-2027. - Debt to EBITDA ratio around 2.5x in 2025 and then trend lower. - Dividend payment of around USD30 million per year in 2025-2026. Recovery Analysis Arcor's bonds have a 'RR3' Recovery Rating to reflect above average recovery expectation for creditors in the event of a default. Fitch's criteria consider bespoke recovery analysis for issuers with 'B+' IDRs and below. The bespoke recovery analysis assumes that Arcor would be liquidated in bankruptcy. Although Fitch's recovery methodology suggests an 'RR2' Recovery Rating for Arcor, the methodology also applies a standard cap of 'RR4' for instrument ratings from issuers in countries assigned in group D, like Argentina. Fitch applies country-specific caps to instrument ratings for a given jurisdiction, reflecting its view that average recoveries could be lower in regimes that are debtor-friendly and/or have weak enforceability and higher in regimes that are creditor-friendly and/or have strong enforceability. The caps limit the assignment of higher Recovery Ratings for obligations of issuers that are incorporated or whose assets or cash flows are in less creditor-friendly jurisdictions. However, per Fitch's Country Specific Treatment of Recovery Criteria, when an issuer enters a distressed or defaulted state, in a country such as Argentina (CCC+), Fitch can assign a higher Recovery Rating to a debt instrument when Fitch expects recoveries to align with that recovery rating, as in this case. Therefore, Fitch has assigned Arcor's senior unsecured notes a Recovery Rating of 'RR3'. A Recovery Rating of 'RR3' supports a one-notch uplift for the instrument rating from the issuer's FC IDR. The 'RR3' Recovery Rating is supported by the historical precedent of numerous distressed debt exchanges by Argentine corporates that did not result in a reduction in principal. RATING SENSITIVITIES Factors that Could, Individually or Collectively, Lead to Negative Rating Action/Downgrade: - EBITDA leverage ratio above 4.0x on a sustained basis; - Exports, cash abroad and committed bank lines not covering the hard currency debt service by 1.0x-1.5x over 12 months could lead to a downgrade of the FC IDR; - A downgrade of Argentina's Country Ceiling would likely lead to a negative action on the FC IDR or Outlook. Factors that Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade: - An upgrade of Argentina's sovereign rating would lead to an upgrade of Arcor's FC IDR, given the high level of cash generated from Argentine operations; - A sustained EBITDA leverage ratio below 2.5x could lead to a revision of the Outlook or an upgrade of the LC IDR; - A significant improvement in Arcor's liquidity. Liquidity and Debt Structure As of March 2025, Arcor had approximately ARS212 billion (USD198 million) in cash and cash equivalents, and short-term debt totaling ARS800 billion (USD746 million). The company has ample access to bank lines for export financing and local market sources for refinancing, including local U.S. dollar-linked issuances to address its 2025 short-term debt. As of March 2025, 53% of Arcor's total debt was denominated in U.S. dollars, 40% in Argentine pesos, and the remainder in Brazilian reais and other currencies. Issuer Profile Arcor is a Latin American producer of confectionary and cookie products. The company is specialized in consumer food products, packaging and agribusiness. Arcor is a leader in the Argentine market and has an extensive international sales network around the world. Criteria Variation Fitch has applied a variation from its "Country-Specific Treatment of Recovery Ratings Criteria," specifically the section titled: "When an Instrument Enters a Distressed or Defaulted State." The criteria allow a Recovery Rating to be assigned 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 extended this analytical approach to all Argentine-based corporates rated 'B-', reflecting their highly speculative credit profiles and their operations within the distressed operating environment in Argentina (CCC+). Country Specific treatment of Recovery Ratings Criteria. Date of Relevant Committee 19 June 2025 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 Fitch does not provide ESG relevance scores for Arcor S.A.I.C. In cases where Fitch does not provide ESG relevance scores in connection with the credit rating of a transaction, program, instrument or issuer, Fitch will disclose any ESG factor that is a key rating driver in the key rating drivers section of the relevant rating action commentary. Entity/Debt Rating Recovery ----------- ------ -------- Arcor S.A.I.C. senior unsecured LT B+ New Rating RR3 =========== B R A Z I L =========== AZUL SA: Creditors Support Bankrupt Airline's $1.57B DIP Package ---------------------------------------------------------------- Yun Park at law360.com reports that the creditors committee for Azul SA said it supports the bankrupt Brazilian airline's $1.57 billion debtor-in-possession financing after securing concessions from the debtor's DIP lenders, including an increase in immediate funding. About Azul S.A. Azul S.A. (B3: AZUL4, NYSE: AZUL), the largest airline in Brazil by number of flight departures and cities served, offers 900 daily flights to over 150 destinations. With an operating fleet of over 200 aircrafts and more than 15,000 Crewmembers, the Company has a network of 300 non-stop routes. Azul was named by Cirium (leading aviation data analysis company) as the most on-time airline in the world in 2023. In 2020, Azul was awarded best airline in the world by TripAdvisor, the first time a Brazilian flag carrier earned the number one ranking in the Traveler's Choice Awards. On the Web: http://www.voeazul.com.br/imprensa On May 28, 2025, Azul S.A. and 19 affiliated debtors filed voluntary petitions for relief under Chapter 11 of the United States Bankruptcy Code (Bankr. S.D.N.Y. Lead Case No. 25-11176). The cases are pending before Judge Sean H. Lane. The Company is supported by Davis Polk & Wardwell LLP, White & Case LLP, and Pinheiro Neto Advogados as legal counsel; FTI Consulting as financial advisor; Guggenheim Securities, LLC as investment banker; SkyWorks Capital LLC as fleet advisor; and FTI Consulting, C Street Advisory Group, and MassMedia as strategic communications advisors. Stretto is the claims agent. The Participating Lenders are supported by Cleary Gottlieb Steen & Hamilton LLP and Mattos Filho as legal counsel and PJT Partners as investment banker. United Airlines is supported by Hughes Hubbard & Reed LLP and Sidley Austin LLP as legal counsel and Barclays Investment Bank as investment banker. American Airlines is supported by Latham & Watkins LLP as legal counsel. AerCap is supported by Pillsbury Winthrop Shaw Pittman LLP as legal Counsel. The U.S. Trustee for Region 2 appointed an official committee to represent unsecured creditors in the Chapter 11 cases of Azul S.A. and its affiliates. JBS SA: Invests $7 Mil Toward Livestock Traceability Program ------------------------------------------------------------ Rachael Oatman at meatpoultry.com reports that as part of a new state program in Para, Brazil, that seeks to trace all the region's cattle and buffalo herds by the end of 2026, JBS S.A. is investing over $7 million toward livestock traceability. The investment will support small producers in Para and builds off JBS's previous $5 million allocation toward its Traceability Accelerator Program, according to meatpoultry.com. The program encourages the adoption of animal traceability tags among JBS's indirect suppliers, the report notes. The previous investment included the donation of 2 million ear tags to producers and 175 readers to the Para State Agricultural Defense Agency (Adepara), the report notes. The readers record data from individual cattle identification tags, allowing each animal to be tracked throughout the state, which has the second largest herd in Brazil, according to JBS, the report relays. The Traceability Accelerator Program is initially focused on southeastern Para, in the region between the municipalities of Maraba and Santana do Araguaia, the report discloses. JBS plans to expand the program to other regions in the future, including the southwest, Lower Amazon and Marajo region, the report notes. The company is also interested in replicating this model in other states eventually, the report discloses. "Our actions have been designed to develop the national program by supporting direct and indirect suppliers, with the capacity to reach up to 2 million tags for herd traceability," the report quotes Fabio Dias, sustainable livestock manager at JBS as saying, during the Expedition to the Sustainable Meat and Leather Market of Para, where JBS presented its initiatives. "This phase is crucial to overcome bottlenecks and test traceability tools and solutions on a large scale." Through its traceability program, JBS teams and partner organizations conduct field visits to farms in Para, working directly with traceability operators who have been trained and accredited by the state of Para, the report relays. The JBS Traceability Accelerator Program already has partner companies for field operations through a strategic partnership with Adepara and The Nature Conservancy Brazil, the report notes. A significant portion of JBS's investment will be allocated to the Green Offices of Para, the report discloses. These offices provide free, specialized support for the environmental regularization of rural properties, particularly giving attention to small producers, the report says. The main objective of the JBS Green Offices is to assist producers from registration to validation in the Rural Environmental Registry (CAR), to promote membership in the Environmental Regularization Program (PRA) where applicable, to support the lifting of embargoes, and to help producers who do not comply with the rules regain commercial qualification, the report relays. The offices also help connect producers with requalification programs, such as SIRFLOR and Reconecta in Para, the report notes. In Para, JBS operates four Green Offices located in the southeast region, the report relays. The JBS Green Offices program launched in 2021 and has since received $2 million in funds from the meatpacker, the report notes. Through the program, 18,042 farms have been regularized, and 7,005 hectares are undergoing forest restoration, the report adds. About JBS SA JBS S.A. is a Brazilian company that is a large meat processing enterprise, producing factory processed beef, chicken, salmon, pork, and also selling by-products from the processing of these meats. It is headquartered in Sao Paulo. It was founded in 1953 in Anapolis, Goias. As reported in the Troubled Company Reporter-Latin America in August 2021, S&P Global Ratings revised the global scale outlook on JBS S.A. (JBS) and its fully owned subsidiary JBS USA Lux S.A. (JBS USA) to positive from stable and affirmed its 'BB+' issuer credit rating. The recovery expectations remain unchanged, and S&P affirmed the 'BB+' ratings on the senior unsecured notes and the 'BBB' ratings on the secured term loans. =========================== C A Y M A N I S L A N D S =========================== ARABIAN CENTRES III: Fitch Lowers Rating on Sr. Unsec Debt to 'BB' ------------------------------------------------------------------ Fitch Ratings has downgraded Arabian Centres Company's (trading as Cenomi Centres) Long-Term Issuer Default Rating (IDR) and senior unsecured debt to 'BB' from 'BB+'. The Recovery Rating is 'RR4'. The Rating Outlook remains Negative. The downgrades reflect Cenomi's burden of its development programme on its leverage metrics, which are above their negative sensitivities. The ratings are constrained by Cenomi's portfolio being concentrated in a limited number of assets and the presence of head leases on half of its property portfolio. The Negative Outlook reflects Cenomi's shrinking liquidity, with around SAR2.1 billion committed capex to finance by end-2025. Cenomi plans to rely on asset sales, in addition to available undrawn project financing and cash, to support its investment plan. However, the execution of disposals, including their timing and pricing, is uncertain. Rental income from the newly developed assets, despite them being mostly pre-let, will fully stabilise only in 2027. Fitch will monitor progress on those assets' pre-lets and performance. Key Rating Drivers Heightened Refinancing Risk: Cenomi's liquidity is deteriorating, pressured by the maturity of its SAR3.3 billion sukuk in October 2026, for which the company is actively pursuing a refinancing. It has very limited access to liquidity, as its revolving credit facility is fully drawn and capacity to draw on other lines is limited to project financing for its malls, which are being completed. In addition, Fitch expects that any refinancing will lead to a substantially higher cost of borrowing, which will be more in line with its 2029 sukuk priced nearly 4% higher at 9.5%. This will weigh on fixed charge coverage. Any delay in refinancing the bond could result in a downgrade of the rating. The company's net debt had increased by over 50% by March 2025 from end-2022, due to high capex on new mall developments. Large Development Pipeline: Fitch expects new mall additions to reduce business risk, by lowering the share of existing leasehold malls within the portfolio. Cenomi's property development pipeline is led by two large flagship malls in Jeddah and Riyadh, for a combined investment of nearly SAR5.5 billion. These malls will have gross lettable areas (GLA) of 104,000sqm and 220,000sqm, respectively, and are scheduled to open in early 2026. The new malls will be branded Westfield, as part of a recently signed licensing partnership with Unibail-Rodamco-Westfield SE (BBB+/Stable), benefitting from the global reach of the French shopping centre operator, which should draw new retailers to Cenomi. Two smaller new malls are likely to open over the next 24 months, which should drive a total increase of around 560,000sqm or 50% more of GLA. Capex Increases Leverage: Higher capex has increased leverage, as the company funded most investment with new debt. Net debt/EBITDAR was 8.1x at end-2024 and Fitch expects this to increase to around 9x in 2025. Fitch believes it would take about 24 months to reduce leverage to a level commensurate with a 'BB+' rating, as the handover of both phases of the leasehold Dhahran Mall to its landlord by April 2026 will be offset by the opening of the likely more profitable, freehold Jawharat Jeddah and Jawharat Riyadh Malls by 1H26. In addition, higher interest costs will weigh on cash flow, reducing financial flexibility due to an increased debt burden. Largest Saudi Malls Operator: Cenomi's portfolio is reasonably diversified in Saudi Arabia, comprising 22 assets, including three super-regional malls exceeding 100,000sqm, 14 regional malls and four community malls located in key cities across Saudi Arabia, including Riyadh and Mecca. The total GLA of this portfolio is 1.4 million sqm and its market value at end-1Q25 exceeded SAR20 billion (EUR4.5 billion), or SAR27.9 billion (EUR6.3 billion), including projects under development. Good Operating Performance: Cenomi recorded 4% like-for-like revenue growth for its shopping centres in 2024, underpinned by active leasing activity and an improving retail environment, with occupancy rising to 94.4% (2023: 92.9%). The rental income profile benefits from over 90% of leases containing indexation clauses, which helps mitigate inflation risk and support predictable cash flows. Around 60% of the current leases are due to expire in the next two years. However, lease renewals in 2024 and through 1Q25 were robust, with more than 90% of tenants extending their commitments. Related-Party Tenants Diminishing: Cenomi's exposure to its related-party tenants (Cenomi Retail) has reduced to about 10%, from over 20% at end-2022, as the company diversifies towards other brands. This is partly offset by increasing receivables from its related-party tenants, due to slow payment by the parent company, the handing back of the Dahran Mall and the resulting reduction in GLA. The decrease in GLA nearly offsets the rental uplift from the other assets stemming from rent renegotiations and the introduction of new GLA. Cenomi Retail is negotiating a SAR1.3 billion shareholder loan agreement, part of which would be used to reduce its exposure to Cenomi. Peer Analysis Cenomi's operating environment differs from most EMEA rated peers'. The Saudi Arabian economy can be materially affected by oil prices, government policies and geopolitical issues, and the retail market is comparatively underdeveloped. Mall penetration is much lower than in Dubai, Abu Dhabi and Europe, and e-commerce penetration is very low. The lower level of development provides good growth opportunities, particularly given the positive dynamics and the company's market share of 18%, but the market will typically be more volatile than most other EMEA real estate markets. Cenomi also differs from other rated EMEA real estate companies because of its high level of long-term leaseholds over properties. Eleven of the group's present malls are located on leasehold land (one property is held under an operational agreement). The cost of the leases reduces Cenomi's EBITDA margins by about 10% compared with most EMEA retail real estate companies, which typically have limited, if any, leasehold payment obligations. Cenomi also has significantly more related-party activities, with almost all its assets having been built by group company Lynx, while the single largest tenant is group company Cenomi Retail. Key Assumptions Fitch's Key Assumptions within Its Rating Case for the Issuer - Development programme for the next two years totalling SAR3.1 billion - Low single-digit like-for-like revenue growth in 2025, with larger increases stemming from new developments due to open in 2026 - Average occupancy ratio at about 95% to 2028 - Stable dividend policy in 2025-2028 - No M&A or expansionary capex to 2028 RATING SENSITIVITIES Factors that Could, Individually or Collectively, Lead to Negative Rating Action/Downgrade - Deterioration in the operating environment - EBITDAR net leverage above 8x on a sustained basis - EBITDAR fixed-coverage charge under 1.5x - Lack of progress in refinancing the existing sukuk maturing in October 2026 by end-2025 - Heightened related-party risk Factors that Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade - EBITDAR net leverage consistently below 7x - Improvement of the operating environment on a sustained basis - A material reduction in asset concentration - A smoother lease maturity profile Liquidity and Debt Structure Cenomi reported SAR245 million cash at end-1Q25, with its revolving credit facility fully drawn and no further availability. Liquidity remains tight due to SAR2.1 billion capex needs by end-2025 and a USD750 million (SAR3.3 billion) sukuk maturing in October 2026. In 2024, Cenomi issued a new USD710 million (SAR2,662.5 million) Shari'ah-compliant sukuk maturing in 2029 at a 9.5% yield to repay its sukuk that was due in November 2024. Further sukuk issuance included USD100 million in March 2024 and USD110 million in December 2024 under the same programme. Issuer Profile Cenomi is the largest owner and operator of shopping malls in Saudi Arabia. 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 Cenomi has an ESG Relevance Score of '4' for Group Structure, reflecting a high number of related-party transactions. This has a negative impact on the credit profile and is relevant to the ratings in conjunction with other factors. The highest level of ESG credit relevance is a score of '3', unless otherwise disclosed in this section. A score of '3' means ESG issues are credit neutral or have only a minimal credit impact on the entity, either due to their nature or the way in which they are being managed by the entity. Fitch's ESG Relevance Scores are not inputs in the rating process; they are an observation on the relevance and materiality of ESG factors in the rating decision. Entity/Debt Rating Recovery Prior ----------- ------ -------- ----- Arabian Centres Sukuk III Limited senior unsecured LT BB Downgrade RR4 BB+ Arabian Centres Company LT IDR BB Downgrade BB+ LC LT IDR BB Downgrade BB+ Natl LT BBB+(sau)Downgrade A-(sau) senior unsecured LT BB Downgrade RR4 BB+ Arabian Centres Sukuk IV Limited senior unsecured LT BB Downgrade RR4 BB+ Arabian Centres Sukuk II Limited senior unsecured LT BB Downgrade RR4 BB+ =================================== D O M I N I C A N R E P U B L I C =================================== DOMINICAN REPUBLIC: Recovers More Than RD$6.5BB Lost to Corruption ------------------------------------------------------------------ Dominican Today reports that President Luis Abinader disclosed that the Dominican government has recovered more than RD$6.5 billion allegedly stolen through corruption in previous administrations. Speaking during his weekly address from the National Palace, he credited a government-appointed legal team tasked with safeguarding public assets for the successful recovery, according to Dominican Today. According to Abinader, RD$3.5 billion was recovered through legal settlements and court proceedings, while another RD$3 billion came from transactions tied to corruption in the energy sector, the report notes. He emphasized that these efforts not only ease pressure on public finances but also help rebuild public trust and improve the country's image in the fight against corruption, the report relays. The president acknowledged that the recovery process has encountered internal resistance, including from some current government officials, the report notes. He also revealed that additional funds are currently being pursued through ongoing judicial processes, though specific figures were not disclosed, the report says. Abinader concluded by framing these actions as part of a broader cultural shift within the Dominican State, aimed at defending public resources and governing with integrity. "It hasn't been easy, but we're proving it can be done," he said, 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. ============= E C U A D O R ============= CUENCA DPR: Fitch Affirms 'B' Rating on Two Series Loans -------------------------------------------------------- Fitch Ratings has affirmed the outstanding series 2021-1 loan and 2023-1 loan issued by Cuenca DPR at 'B-' and expects to rate to the series 2025-1 loans to be issued at 'B-(EXP)'. The Rating Outlook is Stable. Entity/Debt Rating Prior ----------- ------ ----- Cuenca DPR 2021-1 G2706*AA4 LT B- Affirmed B- 2023-1 G2706*AB2 LT B- Affirmed B- 2025-1 LT B-(EXP) Expected Rating Transaction Summary Cuenca DPR is expected to enter into a loan agreement to receive a disbursement of $57 million as part of an existing future flow program. This program is backed by U.S. dollar-denominated existing and future diversified payment rights (DPRs) originated by Banco del Austro S.A. (Austro) of Ecuador. Citibank N.A. processes 100% of DPR flows in the U.S. as the sole designated depository bank (DDB) in this transaction. Citibank executed an account agreement (AA) irrevocably obligating the bank to make payments to an account controlled by the transaction trustee. Fitch's rating addresses timely payment of interest and principal on a quarterly basis. KEY RATING DRIVERS Future Flow Rating Driven by Originator's Credit Quality: The rating of this future flow transaction is tied to the credit quality of the originator, Banco del Austro S.A. On Oct. 31, 2024, Fitch affirmed Austro's Long-Term (LT) Issuer Default Rating (IDR) at 'CCC+' and Viability Rating (VR) at 'ccc+'. Austro's IDR and VR are sensitive to its local operating environment, Ecuador (CCC+). On Aug. 13, 2024 Fitch affirmed Ecuador's IDR at 'CCC+'. Notching Differential Limited by Going Concern Assessment (GCA) Score: Fitch uses the GCA score to gauge the likelihood that the originator of a future flow transaction will stay in operation through the transaction's life. Fitch's Financial Institutions (FI) group assigns a GCA score of 'GC3' to Austro, which reflects the bank's position as the seventh-largest bank in Ecuador by total assets, with a market share of around 4% as of June 2025. Although Austro's business model is adequately diversified, it does not have any relevant product leadership position within Ecuador, which is also reflected in the GCA score. Several Factors Limit Notching Uplift from IDR: The 'GC3' score allows for a maximum uplift of two notches from the bank's IDR, pursuant to Fitch's future flow methodology. However, the uplift is tempered to one notch from Austro's IDR due to factors mentioned below, including high future flow debt to non-deposit funding and DDB concentration risk. High Future Flow Debt Relative to Balance Sheet: Fitch estimates future flow debt will represent approximately 4.3% of Austro's total funding and around 39% of non-deposit funding considering the bank's balance sheet as of March 2025, the outstanding Series 2021 and 2023 loans balance as of June 2025, and the proposed $57 million Series 2025 loan. Fitch does not allow the maximum uplift for originators that have future flow debt greater than 30% of the overall non-deposit funding. Nevertheless, given the benefits of the proposed structure, the quality of flows and the continued deleveraging of Series 2021 and 2023, the agency allows for some differentiation (one notch) from Austro's LT IDR. Coverage Levels Commensurate with Assigned Rating: When considering average rolling quarterly DDB flows over the last five years (July 2020-June 2025) and the maximum periodic debt service over the life of the program, including Fitch's interest rate stress, the projected quarterly debt service coverage ratio (DSCR), including the 2025-1 loan, is 27.6x. Additionally, the transaction can withstand a decrease in flows of around 95% and still cover the proposed maximum quarterly debt service obligation. Nevertheless, Fitch will continue to actively monitor the performance of the flows. Structure Reduces Potential Redirection/Diversion Risk: The structure mitigates certain sovereign risks by collecting cash flows offshore until collection of the periodic debt service amount. In Fitch's view, diversion risk is partially mitigated by the AA signed by the sole DDB (Citibank) in the transaction. However, as Citibank processes 100% of DPR flows, Fitch believes this exposes the transaction to a higher degree of diversion risk relative to other Fitch-rated DPR programs in the region, limiting the overall notching differential. RATING SENSITIVITIES Factors that Could, Individually or Collectively, Lead to Negative Rating Action/Downgrade - The transaction's ratings are sensitive to changes in the credit quality of Austro. A deterioration of the credit quality of Austro by one notch would constrain the rating of the transaction at its current level. - The transaction's ratings are also sensitive to the ability of the DPR business line to continue operating, as reflected by the GCA score, and a change in Fitch's view on the bank's GCA score could lead to a change in the transaction's rating. - Additionally, the transaction's rating is sensitive to the performance of the securitized business line. The expected quarterly DSCR is approximately 27.6x, which includes Fitch's interest rate stress, and should therefore be able to withstand a significant decline in cash flows in the absence of other issues. However, significant further declines in flows could lead to a negative rating action. Fitch will analyze any changes in these variables in a rating committee to assess the possible impact on the transaction ratings. - No company is immune to the economic and political conditions of its home country. Political risks and the potential for sovereign interference may increase as a sovereign's rating is downgraded. However, the underlying structure and transaction enhancements mitigate these risks to a level consistent with the assigned rating. Factors that Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade The main constraint to the program rating is the originator's rating and Austro's operating environment. If upgraded, Fitch will consider whether the same uplift could be maintained or if it should be further tempered in accordance with the criteria. USE OF THIRD PARTY DUE DILIGENCE PURSUANT TO SEC RULE 17G -10 Form ABS Due Diligence-15E was not provided to, or reviewed by, Fitch in relation to this rating action. PUBLIC RATINGS WITH CREDIT LINKAGE TO OTHER RATINGS The future flow ratings are driven by the credit risk of Austro as measured by its Long-Term IDR. 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. =============== H O N D U R A S =============== HONDURAS: Moody's Affirms 'B1' Issuer & Senior Unsecured Ratings ---------------------------------------------------------------- Moody's Ratings has affirmed the Government of Honduras' local and foreign-currency long-term issuer and senior unsecured ratings at B1. The outlook remains stable. The rating affirmation is driven by Honduras' relatively strong government fiscal position and steady real GDP growth, combined with structural constraints from low levels of economic development and a weak institutional framework. Honduras' fiscal strength is supported by a track record of moderate fiscal deficits and a low and stable debt burden, as well as by demonstrated resilience to shocks. At the same time, the affirmation reflects long-standing structural constraints on the B1 rating, driven by the limited size of the economy, comparatively low wealth levels and relatively weak institutions and governance. The stable outlook reflects Moody's expectations that the current balance between Honduras' main credit strengths and challenges will persist. Moody's expects this balance to remain stable, including through the country's next general election in November 2025. Moody's also expects Honduras to continue to adhere to its IMF program targets through the end of its current three-year Extended Fund Facility (EFF) and Extended Credit Facility (ECF) program in September 2026. The local-currency ceiling remains unchanged at Ba1, set three notches above the sovereign rating. The Ba1 local-currency ceiling reflects an average government footprint in the economy, relatively weak predictability and reliability of institutions, moderate political risk and external imbalances, and average reliance on a single common revenue source. The foreign-currency ceiling remains unchanged at Ba3, two notches below the local-currency ceiling to reflect the economy's moderate level of external indebtedness, limited capital account openness and lower overall policy effectiveness. RATINGS RATIONALE RATIONALE FOR THE AFFIRMATION OF THE B1 RATINGS The sovereign credit profile of Honduras balances its relatively strong government fiscal position and steady real GDP growth against low levels of economic development and a weak institutional framework. The economy remains highly dependent on remittance inflows which support domestic consumption and account for around 25% of GDP. Real GDP growth of 3.6% in 2023 and 2024 aligns with the country's long-term average, driven by resilient private consumption and investment. Moody's expects growth to remain around 3.5% in 2025-26, gradually moderating over the longer term amid potential headwinds from more restrictive US immigration and trade policies. Remittances will continue to play a vital role in supporting household spending in a context of low income levels and limited social safety nets. Honduras' strong fiscal position relative to similarly rated peers is underpinned by a medium-term policy framework that emphasizes debt sustainability and includes fiscal rules that cap government deficits. The sovereign's fiscal strength reflects moderate debt levels, though the high share of foreign currency-denominated debt introduces some exchange rate risk. Over the past decade, the government has enhanced its fiscal and macroeconomic policy frameworks and pursued consolidation efforts with technical assistance from the IMF, leading to a notable reduction in debt and fiscal deficits. General government debt declined to around 43% of GDP in 2024 from 54% in 2020. These improvements have been aided by robust economic growth and budget under-execution, which has helped contain spending. Looking ahead, a moderate widening of the fiscal deficit is expected as the government increases expenditure to support economic and social development in line with IMF program objectives. Nonetheless, Moody's projects the debt burden to remain stable, supported by continued prudent fiscal management and steady economic growth. In terms of external accounts, international reserves have recovered following a decline earlier in 2024, aided by a sovereign bond issuance, monetary and exchange rate policy adjustments, and favorable foreign exchange inflows in the context of high remittances and coffee prices. Honduras' B1 credit profile also reflects several structural credit constraints, including the comparatively small size of the economy, very low income levels and relatively weak institutions and governance. The scale of Honduras' economy is limited, with nominal GDP of $37 billion in 2024. Meanwhile, the country has a high incidence of poverty and low level of economic development. At about $7,600 in 2024, Honduras' GDP per capita in purchasing power parity (PPP) terms in one of the lowest in Latin America and well below the median for B1-rated peers. In addition, the country is one of the world's most vulnerable to climate disasters, mainly from droughts and hurricanes. Honduras' weak institutional framework constrains the sovereign rating and is evidenced by the country's low rankings in the Worldwide Governance Indicator scores, which reflect overall weak government effectiveness, rule of law and control of corruption. RATIONALE FOR STABLE OUTLOOK The stable outlook reflects Moody's expectations that the current balance between Honduras' main credit challenges and strengths will persist. While political polarization remains elevated in Honduras, Moody's expects policies to remain relatively consistent through the country's next general election in November 2025. Moody's also expects the government to continue to adhere to its IMF program targets through the end of its current three-year program in September 2026. Political polarization remains high in Honduras with contentious relations between the ruling and opposition parties restricting the government's ability to implement significant policy changes, including tax reform, increased social spending and efforts to reduce corruption. Moody's expects this political dynamic to persist over the course of the outlook horizon, limiting scope for positive reforms. Moody's expects Honduras' ongoing relationship with the IMF to continue to support the credit profile. In particular, Moody's expects prudent fiscal management and adjustments in monetary and exchange rate policies to support macroeconomic stability, alongside continued progress in energy sector reforms. ESG CONSIDERATIONS Honduras' ESG Credit Impact Score (CIS-4) indicates the rating is lower than it would have been if ESG risk exposures did not exist. For Honduras, this reflects a weak governance profile, high social and high environmental risks driven by exposure to physical climate risks related to climate change. GDP per capita (PPP basis, US$): 7,607 (2024) (also known as Per Capita Income) Real GDP growth (% change): 3.6% (2024) (also known as GDP Growth) Inflation Rate (CPI, % change Dec/Dec): 3.9% (2024) Gen. Gov. Financial Balance/GDP: -0.8% (2024) (also known as Fiscal Balance) Current Account Balance/GDP: -4.6% (2024) (also known as External Balance) External debt/GDP: 36.6% (2024) Economic resiliency: ba3 Default history: No default events (on bonds or loans) have been recorded since 1983. On July 15, 2025, a rating committee was called to discuss the rating of the Honduras, Government of. The main points raised during the discussion were: The issuer's economic fundamentals, including its economic strength, have not materially changed. The issuer's institutions and governance strength, have not materially changed. The issuer's fiscal or financial strength, including its debt profile, has not materially changed. The issuer's susceptibility to event risks has not materially changed. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS Evidence that a durable fiscal consolidation is underway, paired with successful implementation of reforms that help to sustainably strengthen the country's economic resilience, investment climate and growth prospects would help strengthen the sovereign credit profile and could support a potential upgrade. In addition, measures to strengthen the quality of Honduras' institutions and governance could create upward pressure on the credit rating, including adherence to recently improved macroeconomic framework. Rising debt metrics resulting from lower growth or relaxed fiscal constraints could lead to a negative rating action. In addition, lack of political will or inability to comply with IMF program targets, a material rise in external vulnerabilities, and/or increased domestic political risks that lead to material changes to macroeconomic and fiscal policies, could also lead to a negative rating action. 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. The net effect of any adjustments applied to rating factor scores or scorecard outputs under the primary methodology(ies), if any, was not material to the ratings addressed in this announcement. ============= J A M A I C A ============= BIRDSHACK: Closes Red Hills Outlet Less Than a Year After Opening ----------------------------------------------------------------- Jamaica Observer reports that less than a year after opening a Birdshack restaurant on Red Hills Road in St Andrew, operators Arya Resort Management Group was to close the outlet last July 19, 2025. The announcement was made on the fried chicken restaurant brand's social media page, according to Jamaica Observer. "To all our customers at this location, we thank you profusely for your support to date and apologise for the inconvenience the closure will cause," stated Wayne Cummings, CEO of Arya, the report notes. "We are actively hunting for other locations in and around Kingston and as soon as we find the ideal place, we will be sure to tell you of that exciting news," he added. Cummings did not state the reason for the store's closure, but noted that the Ocho Rios and Montego Bay outlets will remain open, the report says. The Red Hills Road store, the company's fifth outlet, was opened on August 1, 2024. However, it seemingly found it difficult to gain a foothold on the stretch which also includes fried chicken outlets KFC and Popeye's, as well as a number of pan chicken vendors, the report discloses. Some customers also complained about inadequate parking and the lack of a drive-thru at the location, the report notes. "The issue with that location was the parking, get another location with parking and you will do well," one person commented under the announcement on the Birdshack Instagram page, the report adds. DIGICEL MIDCO: S&P Rates Proposed $415MM Sr. Unsec Notes 'B-' ------------------------------------------------------------- S&P Global Ratings assigned its 'B-' issue rating to Caribbean telecom operator Digicel Midco Ltd.'s (Digicel) proposed senior unsecured notes for $415 million. The notes will be issued with an eight-year tenor. At the same time, S&P assigned a 'B' issue rating to its subsidiary Digicel International Finance Ltd.'s (DIFL) proposed $1.55 billion first-lien senior secured notes and $750 million first-lien term loan facility, both with seven-year tenors. Digicel (B/Stable/--) plans to use the net proceeds from the issuance to repay its outstanding $455 million senior unsecured notes due 2028, as well as $1.26 billion in senior secured notes and $1.025 billion of the senior secured term loan at DIFL's level, which are both due in 2027. The resulting capital structure will be broadly aligned with the group's existing capital structure. As a result, S&P applies a notching adjustment to Digicel's proposed $415 million senior unsecured notes--as S&P does to the existing senior unsecured notes--to account for the subordination risk to which they are exposed, resulting in the 'B-' issue rating. The adjustment is because the priority debt ratio will remain higher than 50% (close to 85%), since most of the consolidated debt will be secured and at the subsidiary (DIFL) level. The proposed secured notes and first-lien credit facility will rank pari passu. Any restricted subsidiary of Digicel (other than an excluded subsidiary) that generates more than 7.5% of consolidated adjusted EBITDA or 7.5% of consolidated total assets of the company and its restricted subsidiaries will be required to become a guarantor of the notes and facility. In addition, the first-lien credit facility requires that the aggregate consolidated adjusted EBITDA of all guarantors won't represent less than 80% of Digicel's consolidated adjusted EBITDA and the aggregate assets of all guarantors of the facility won't represent less than 80% of the total consolidated assets. S&P said, "Digicel is also signing a $200 million super senior secured revolving credit facility (RCF), which will allow the company to maintain ample cash headroom in the coming years, strengthening our view of its liquidity as adequate. We don't forecast the RCF to result in any additional subordination risk for the rest of the capital structure--although it will rank senior in payment priority with respect to all first-lien obligations--since it will only represent about 7% of total consolidated debt if fully drawn. "In our view, the proposed transaction is leverage and credit neutral, reducing Digicel's refinancing risk in upcoming years. We don't expect it to affect our forecast that Digicel will reduce adjusted debt to EBITDA below 4x in the next 12 months and maintain leverage below that threshold afterward. This is in line with Digicel's new management's five-year plan implemented since its restructuring in 2024. The plan has specific targets to improve the company's financial position, including reducing leverage to 3.25x by 2028 and raising cash flow. "The proposed instruments are subject to affirmative and negative covenants, which are broadly similar to those of the existing instruments. These mainly restrict the issuance of additional debt. The covenants also restrict acquisitions, asset divestments, liens, dividends, investments, and transactions with affiliates, and they define mandatory prepayments under the facilities, as well as events of default. The RCF also includes a maintenance leverage covenant of net first-lien debt to EBITDA below 4.625x if the drawn amount exceeds 33%. We expect Digicel to comply with this covenant, in line with our base-case scenario." JAMAICA: Needs Strong Middle Class to Drive Econonic Growth ----------------------------------------------------------- RJR News reports that principal of the Mona campus of the University of the West Indies, Professor Densil Williams, says Jamaica needs a strong middle class to drive economic growth. He believes the country must have at least 500,000 people in the middle class to generate the level of investment and spending needed for long-term development, according to RJR News. But Professor Williams said achieving this will require significant investment in education across all levels to close the current skills gap, the report notes. He stressed that this must be a long-term commitment given the severity of the issue, the report relays. In the meantime, he suggested that Jamaica may have to import skilled labour to meet the immediate demands of employers struggling to find the talent needed to drive innovation, investment and growth, 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. LASCO FINANCIAL: Jaycinth Hall to Step Down as Managing Director ---------------------------------------------------------------- RJR News reports that Jaycinth Hall Tracey is set to step down as Managing Director of Lasco Financial Services at the end of this year. It's reported that Mrs Hall Tracey will leave the post on December 31, bringing to a close nearly two decades of service with the company, according to RJR News. During her tenure, she oversaw significant growth - including the expansion of the company's remittance, microfinance, and digital operations, and under her leadership, revenues peaked at J$2.5 billion in 2020, the report notes. In recent times, though, the company has been hit by financial headwinds, the report relays. Net profits fell sharply from $306 million in 2022 to just $58.6 million as at March this year, the report adds. Lasco Financial Services Limited provides a range of financial services to customers in Jamaica. =========== M E X I C O =========== UNIVISION COMMUNICATIONS: Moody's Rates New Sr. Sec. Notes 'B2' --------------------------------------------------------------- Moody's Ratings assigned a B2 rating to Univision Communications Inc.'s (d/b/a "TelevisaUnivision," "TU" or the "company") proposed offering of senior secured notes due 2032. TU's B2 corporate family rating and negative outlook remain unchanged. Net proceeds from the new senior secured notes will be used to help repay the existing $1.5 billion outstanding 6.625% senior secured notes due 2027 (the "2027 Notes"). The new notes will rank pari passu with the company's existing senior secured bank credit facilities and senior secured notes. Upon transaction closing, and to the extent the 2027 Notes are fully repaid, Moody's will withdraw the 2027 Notes' B2 rating. The assigned rating is subject to review of final documentation and no material change in the size, terms and conditions of the transaction as advised to us. RATINGS RATIONALE The transaction is credit neutral given that pro forma financial leverage will remain unchanged at 6.7x (leverage metrics are Moody's adjusted on a two-year average EBITDA basis at LTM March 31, 2025). However, leverage is currently above the downgrade threshold, which means TelevisaUnivision's financial flexibility within the B2 CFR will be constrained until EBITDA expands and/or debt is repaid. Moody's expects the company will focus on reducing leverage primarily via EBITDA expansion. However, given Moody's expectations in 2025 for slowing economic growth in the US and 0.3% forecast for Mexico's GDP growth, Moody's expects leverage will remain near the 6.5x range over the rating horizon. Moody's forecasts considers TU's planned cost savings as well as economic uncertainty around US trade policy, which could prompt budget reductions from advertisers, especially in verticals that are more consumer sensitive. TelevisaUnivision's B2 CFR reflects the company's material scale, strong audience shares and position as the leading Spanish-language content and diversified media company. TU's diversification across multiple media platforms (i.e., broadcast, cable, digital, streaming and audio), each with dissimilar demand drivers, offers a unique value proposition compared to its broadcast and media peers, enabling TU to capitalize on its reach throughout Spanish-speaking populations in both Mexico and the US, and align its programming to its audience and advertisers. TU's streaming platform, ViX, launched in 2022, offers free ad-supported video-on-demand (AVOD), limited AVOD and subscription video-on-demand (SVOD) tiers. While ViX continues to grow at above market rates with high sell-throughs, premium pricing and produces positive EBITDA, the contribution to overall EBITDA is still not material. The negative outlook reflects the structural and secular pressures in TU's business and Moody's views that the company's credit metrics are weakly positioned within the B2 CFR. Cost cutting measures will help to minimize future EBITDA pressures and Moody's expects leverage will stay in the mid 6x area (leverage metrics are Moody's adjusted on a two-year average EBITDA basis) over the rating horizon despite the absence of political revenue this year and Moody's forecasts for continuing declines in core advertising and retransmission revenue. Given continuing pressures in the TV broadcast industry against a backdrop of economic uncertainty, lower-than-expected EBITDA could lead to downside risk to Moody's leverage forecast, which is also factored in the negative outlook. Over the next 12-18 months, Moody's expects TU will maintain good liquidity. At LTM March 31, 2025, cash and cash equivalents were $345 million, FCF (defined by us as cash flow from operations less capex less dividends) totaled $270 million, and the $522 million revolving credit facility (RCF) maturing June 2027 was undrawn. Moody's expects that TU will generate positive FCF of around $200 million in 2025 driven by cost savings, ViX profitability and continued capex normalization. The RCF is subject to a first-lien net leverage maintenance financial covenant set at 7.1x (as defined in the credit agreement), stepping down to 6.75x at December 31, 2025. Moody's expects sufficient headroom relative to the covenant over the coming year. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATING The rating outlook could be stabilized if TU reduced leverage to the 6x area and Moody's expects leverage to decline further (leverage metrics are Moody's adjusted on a two-year average EBITDA basis). Though unlikely near-term, ratings could be upgraded if TU sustained leverage below 5x and FCF to debt above 4% (Moody's adjusted on a two-year average FCF basis). TU would also need to: (i) exhibit organic revenue growth and stable-to-improving EBITDA margins on a two-year average basis; (ii) adhere to conservative financial policies; and (iii) maintain at least good liquidity to be considered for an upgrade. Ratings could be downgraded if Moody's expects that leverage will be sustained above 6x as a result of weak operating performance, more aggressive financial policies or inability to reduce debt levels. A downgrade could also arise if FCF to debt was sustained below 1% (Moody's adjusted on a two-year average FCF basis) or TU experienced deterioration in liquidity or covenant compliance weakness. Headquartered in N.Y., New York, Univision Communications Inc., is a leading Spanish-language multimedia conglomerate with operations in the US (around 65% of total revenue at LTM March 31, 2025) and Mexico (35%) serving a global audience offering original in-house content production, the largest owned Spanish-language content library, entertainment, news and sports. TU is privately owned with major investors including Grupo Televisa, ForgeLight, Searchlight Capital, Liberty Global and SoftBank. Revenue totaled around $4.9 billion for the twelve months ended March 31, 2025. The principal methodology used in this rating was Media published in June 2021. ===================== P U E R T O R I C O ===================== MACY'S RETAIL: Moody's Rates New Senior Unsecured Notes 'Ba2' ------------------------------------------------------------- Moody's Ratings assigned a Ba2 rating to the new proposed backed senior unsecured notes at Macy's Retail Holdings, LLC (MRH). Proceeds from the new notes will be used to refinance existing debt and for general corporate purposes. All other ratings including the MRH Ba2 senior unsecured notes ratings and Macy's, Inc.'s (Macy's) Ba1 corporate family rating and the SGL-1 speculative grade liquidity rating (SGL) remain unchanged. The outlook for MRH and Macy's remains unchanged at stable. RATINGS RATIONALE Macy's, Inc.'s Ba1 corporate family rating reflects its very good liquidity and its conservative capital allocation strategy which includes moderate shareholder distributions. The rating also reflects Macy's market position as the US's largest department store chain with net sales of roughly $22 billion for the LTM period ending May 03, 2025. Its integrated approach to stores and online enhances its ability to meet the demands of the rapidly changing competitive environment. The company has improved its operating performance through customer re-engagement, cost reduction and solid inventory management and continues to work to increase its revenue stream beyond the traditional Macy's stores with the expansion of its off-mall small format Macy's and Bloomingdale's formats, its digital Marketplace and continued growth of its luxury concepts, Bloomingdale's and Bluemercury. Ratings remain constrained by the risk of continued pressure on discretionary spending, its low retail operating margins and any weakening of its credit portfolio. Macy's has very good liquidity evidenced by its $932 million in cash at the end of the first quarter ended May 03, 2025 and good free cash flow generation. The stable outlook reflects the company's success in reducing its cost structure and its conservative financial strategy. It also reflects the expectation that Macy's can maintain its current market position as well as its current level of credit metrics despite the difficult consumer demand environment. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATING The rating could be upgraded if Macy's demonstrates a consistent track record of sales and operating income performance which includes a stabilization or increase in its market share relative to alternative competitive channels as well as its department store peers. In addition, the company must also continue to reduce its reliance on traditional mall based assets through the successful execution of new growth strategies such as Macy's and Bloomingdale's Digital Marketplaces and its off-mall small format Macy's and Bloomingdale's concepts in order for an upgrade to be considered. An upgrade would also require sustained improvement in retail profit margins and a capital structure that is commensurate with an investment-grade rating. Quantitatively, a rating upgrade would also require maintaining very good liquidity including strong free cash flow generation and a conservative and clearly articulated financial strategy. Quantitatively rating could be upgraded if debt/EBITDA is sustained below 2.0 times and EBIT/interest expense is sustained above 5.5 times. Rating could be downgraded should Macy's liquidity or free cash flow generation deteriorate, comparable sales performance reflect weaker market positioning, operating performance including retail margins deteriorate or a more aggressive financial strategy is pursued including the utilization of unencumbered assets for any purpose other than deleveraging. Quantitatively, rating could be downgraded should debt/EBITDA be sustained above 3.25x and EBIT/interest is sustained below 3.75x. With its corporate office in New York, NY, Macy's, Inc. is one of the nation's premier retailers, with LTM May 03, 2025 net sales of approximately $22 billion. The company operates stores in 43 states, the District of Columbia, Guam and Puerto Rico under the names of Macy's, Bloomingdale's, Bloomingdale's The Outlet, Macy's Backstage, Macy's small format, Bloomie's, and Bluemercury, as well as the macys.com, bloomingdales.com and bluemercury.com websites. The principal methodology used in this rating was Retail and Apparel published in November 2023. ********* 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. 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