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250729.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 Monday, July 28, 2025, Vol. 26, No. 149 Headlines A R G E N T I N A AGUA Y SANEAMIENTOS: Gov't. Confirms Start of Privatization Process CORREO ARGENTINO: Tops Redundancy Rankings YPF SA: Argentina Says it Won't Negotiate With Burford Over Shares [] Moody's Takes Rating Action on 5 Argentinean Banks B A H A M A S FTX GROUP: Ends 6 Suits Over Political Donations in Ch. 11 B R A Z I L USINAS SIDERURGICAS: Squeezed by Cheap Steel Imports in Q2 2025 VIRGOLINO DE OLIVEIRA: Gets U.S. Restructuring Recognition G U A T E M A L A CT TRUST: Fitch Affirms 'BB+' Long-Term IDR, Outlook Stable J A M A I C A [] JAMAICA: Small Businesses Urged to Protect Ops From Disasters M E X I C O FIDEICOMISO IRREVOCABLE: Fitch Affirms BBsf Rating on A-2 MXN Notes PETROLEOS MEXICANOS: Fitch Puts 'B+' LongTerm IDR on Watch Positive P U E R T O R I C O SILVER AIRAWAYS: Trustee Seeks to Tap KapilaMukamal as Accountant - - - - - ================= A R G E N T I N A ================= AGUA Y SANEAMIENTOS: Gov't. Confirms Start of Privatization Process ------------------------------------------------------------------- Buenos Aires Times reports that Argentina's government has formally announced the start of the privatization process for struggling state-owned waterworks AySA. The struggling state firm provides water and sanitation services to some 11.2 million people in Buenos Aires and part of its suburbs, according to Buenos Aires Times. The privatization plan is part of President Javier Milei's economic program, the report notes. AySA was included in the so-called 'Ley de Bases' mega-reform passed last year, which includes a package of economic reforms and a list of state-owned companies that were "subject to privatization," the report relays. "The privatisation of the company will allow for the modernisation of the sector and improve the price and quality of the service," said Presidential Spokesperson Manuel Adorni at a press conference, the report notes. The process will incorporate "private capital through the transfer of 90 percent of the company's shares, currently held by the state," he explained, the report relays. This will be done through "a national and international public tender" to select a new operator for the company and, in parallel, an "initial public offering to open up the company's capital to other investors," Adorni added. He further noted that the proposal keeps the company's employees as shareholders, with 10 percent of the firm's share capital, the report discloses. AySA currently has 6,202 employees, according to official data. The government did not specify whether there will be lay-offs as a result of the privatisation, though it is widely expected, the report says. The company, formally known as Agua y Saneamientos Argentinos Sociedad Anonima (AySA), was originally concessioned in 1993 to the French company Suez and other minor partners, the report relays. In 2006, it returned to state ownership when Nestor Kirchner's 2003-2007 government terminated the contract, the report recalls. AySA needed contributions from the Treasury worth some US$13.4 billion since its renationalisation until 2023, according to Adorni, the report says. In 2024, the company produced a surplus for the first time since 2007, the report adds. As reported by the Troubled Company Reporter - Latin America on November 7, 2024, Fitch Ratings affirmed Agua y Saneamientos Argentinos S.A.'s (AySA) Long-Term Foreign and Local Currency Issuer Default Ratings (IDRs) at 'CCC-'. Fitch has also affirmed the company's USD310 million senior unsecured amortizing notes due 2026 at 'CCC-'with a Recovery Rating of 'RR4'. The 'RR4' for the company's senior unsecured notes incorporates an average expected recovery given default of 31% to 50% as per country cap established for Argentina. CORREO ARGENTINO: Tops Redundancy Rankings ------------------------------------------ Buenos Aires Times reports that over the past year, President Javier Milei's government used special emergency powers and public employment reforms contained in its 'Ley de Bases' mega-reform to enforce sweeping lay-offs across Argentina's state-owned companies and autonomous public bodies. The move was driven by Federico Sturzenegger, Milei's deregulation and state transformation minister, according to Buenos Aires Times. A year on, as the government's special powers expire, three entities top the list of redundancy rankings: Correo Argentino (Post Office), the Agencia de Recaudacion y Control Aduanero tax agency (ARCA, formerly known as AFIP) and Operadora Ferroviaria (commonly known as Trenes Argentinos), the report notes. Sturzenegger, who served as Central Bank governor under former president Mauricio Macri, led the reduction of staffing numbers across the state apparatus, leaving practically no agency or public company untouched, the report says. Among state-owned companies, Correo Argentino saw the greatest number of redundancies (4,945), followed by Operadora Ferroviaria (2,293), state carrier Aerolíneas Argentinas (1,780), Banco de la Nacion Argentina (1,689) and the Agua y Saneamientos Argentinos (AySA) waterworks with 1,577, the report discloses. Following AySA came the Agencia Publicidad del Estado (644, a consequence of the break up of the Telam state news agency), the Casa de Moneda national mint (576), Corredores Viales (537) highways body, arms manufacturer Fabricaciones Militares (371) and the Belgrano Cargas cargo firm in tenth place with 358 departures, the report says. Among decentralised public bodies, the hardest hit were ARCA (2,996), the ANSES social security agency (1,423), the CONICET national scientific research institute (985), the Navy General Staff (787), communications regulator ENACOM (778), the National Institute of Industrial Technology (INTI, 726), National Road Directorate (510), SENASA food health agency (482), National Registry of Persons (RENAPER, 479) and the ANDIS national disability agency (468), the report notes. Several of the cuts ordered by Sturzenegger triggered union responses, the report relates. For instance, the SECASFPI union representing ANSES workers filed a case in the labour courts, arguing most of the dismissals amounted to union persecution, the report notes. National Labour Court No. 6 sided with the union led by Carlos Ortega, ruling that 84.6 percent of those dismissed were union members, the report says. The government has appealed the ruling. In proportional terms, Telam was one of the worst hit, losing 79 percent of its workforce, the report discloses. It was followed by ENARSA Patagonia (66 percent), the National Council for Social Policy Coordination (64 percent), the Transport Safety Board (44 percent), INAES (41 percent), ENACOM (38 percent) and the National Agency for the Promotion of Research (37 percent), the report relates. The National Cancer Institute also fell victim to the government's 'chainsaw' approach: it has lost 36 percent of its workforce compared to last year, and the remaining staff warn of serious operational issues, the report relays. Government officials have hailed these figures, the report notes. Milei and Sturzenegger attended an event at the Casa Rosada, at which the President hailed his deregulation chief, describing him as a "colossus," the report adds. YPF SA: Argentina Says it Won't Negotiate With Burford Over Shares ------------------------------------------------------------------ Patrick Gillespie, Manuela Tobias & Bob Van Voris and Bloomberg News report that Argentina won't negotiate with Burford Capital, the firm leading efforts to collect a US$16-billion judgment against the South American nation, a spokesman for President Javier Milei told reporters. The spokesman, Manuel Adorni, also denied that the government had held any secret talks, according to Bloomberg News. "Argentina will not negotiate with the plaintiffs and categorically denies any malicious discussion of parallel meetings or secret agreements," he said. Adorni's remarks come a few weeks after US District Judge Loretta Preska in New York ordered Argentina to hand over its 51 percent stake in oil company YPF SA to partially satisfy the judgment, the report notes. Preska is also the judge who in 2023 awarded US$16 billion to YPF shareholders expropriated by the Argentine government in 2012, Bloomberg News recalls. Milei's administration is appealing both the original judgment and Preska's June 30 handover order, Bloomberg News notes. Many legal experts have said the more recent order is likely to put pressure on Argentina to reach a settlement. Burford declined to comment. Its shares have surged in the last few weeks on such expectations, Bloomberg News says. The litigation funding firm's share price was largely unchanged, Bloomberg News discloses. The government's registrar of visitors recently disclosed that two Burford negotiators met with Milei's cabinet chief back in October, but the government said talks never advanced, Bloomberg News relays. Adorni's comments come a day after the Trump administration submitted a court filing supporting Argentina in the federal appeals court in New York. The US Justice Department said that allowing the YPF handover order to take effect would violate legal protections of sovereign immunity, Bloomberg News relays. Argentina ordered a restructuring of the Treasury prosecutor's office, which is handling the case on its behalf, Bloomberg News discloses. The decision comes after local media reports on suspected information leaks in the trial for YPF, Bloomberg News relays. Adorni denied that the restructuring had anything to do with the purported leaks, Bloomberg News 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 strateg [] Moody's Takes Rating Action on 5 Argentinean Banks ----------------------------------------------------- Moody's Ratings has taken rating actions on five Argentinean banks, including Banco de Galicia y Buenos Aires S.A.U. (Galicia), Banco Hipotecario S.A. (Hipotecario), Banco Macro S.A. (Macro), Banco Santander Argentina S.A. (Santander Argentina) and Banco Supervielle S.A. (Supervielle). All of the banks' Baseline Credit Assessments (BCA), Adjusted BCAs and long-term ratings -including deposit, senior unsecured debt, subordinate debt and counterparty risk, where applicable, were upgraded. The ratings outlook on the long-term deposits of Galicia, Macro, Santander Argentina and Supervielle remains stable, while the outlook on the long-term deposits of Hipotecario was changed to stable, from positive. The rating actions were prompted by the upgrade to Caa1, from Caa3, of the Government of Argentina's (Argentina) sovereign ratings, and the change of its outlook to stable, from positive. RATINGS RATIONALE (1) CHANGE OF ARGENTINA'S MACRO PROFILE REFLECTS FURTHER IMPROVEMENTS IN OPERATING CONDITIONS Moody's have raised Argentina's Macro Profile to 'Very Weak+', from 'Very Weak'. The recent relaxation of restrictive foreign exchange controls is enhancing market functioning and, despite the intense macroeconomic adjustments, economic activity is rebounding. After six consecutive quarters of contraction, the economy began to grow again in the fourth quarter of 2024, while in the first quarter of 2025, the economy expanded by 5.9%, driven by domestic demand and buoyed by renewed confidence. This, coupled with the disinflation process, has resulted in real wage growth and a resurgence of credit, no longer overshadowed by public sector borrowing as the government advances in its fiscal consolidation agenda, in turn leading to the ongoing normalization of banks' operations. However, macroeconomic conditions continue to pose challenges, particularly due to weak external buffers and structural impediments to investment, that represent persistent challenges to achieving external stability and reserve accumulation, which are in turn the main constrains of the sovereign's credit profile and lead to the Very Weak+ macro profile for banks. For the banking system, the ongoing normalization process has resulted in higher non-performing loans, increased capital consumption, lower liquidity buffers and negative margin pressure, which is expected as banks rise credit appetite supported by the favorable macroeconomic environment. Moody's considers banks renewed focus on lending to be positive, while profitability and asset quality pressures stemming from this process are key factors to monitor during this transition. Banks still hold nearly 30% of their assets in Argentinean sovereign debt as of April 2025, albeit down from a peak of 50% in 2024. (2) ENTITY-SPECIFIC CONSIDERATIONS The upgrade of the five banks' BCAs follows Argentina's sovereign rating upgrade and the improvement in the macro profile, and reflects the banks' robust financial fundamentals to support the growth momentum. The main risks embedded on all five banks' ratings is still related to the weak sovereign credit profile, and therefore all banks' BCAs are positioned at the same level of the sovereign. However, Moody's considers Galicia, Macro, and Santander Argentina to be the strongest entities among rated banks in the country, with well-established banking franchises, steady funding and business diversification that provides them with strong earnings recurrence. However, their BCAs are constrained by direct and indirect connections with the government, such as sovereign debt holdings and macroeconomic conditions. In the case of Supervielle and Hipotecario, even as their BCAs are at the same as the other three banks, their credit profiles consider these banks' more limited financial flexibility compared to the largest banks in the country and more concentrated loan books, despite a relatively diversified operation. -- BANCO GALICIA Y BUENOS AIRES The upgrade of Galicia's BCA to caa1 from caa3 reflects the upgrade of the Argentinean sovereign rating and the bank's intrinsic credit strengths, which have demonstrated resilience through adverse economic cycles in Argentina. These strengths include sufficient capital levels, with a tangible common equity (TCE) to risk-weighted assets ratio of 12.8% as of March 2025, and substantial liquidity reserves, with liquid assets constituting 46% of tangible assets as of the same date. Additionally, steady access to core deposits further supports these strengths. The bank's acquisition of HSBC Bank Argentina S.A., announced in April 2024 and with the merger approved in May 2025, is expected to further consolidate its market position in the country and provide cost synergies. Apart from the exposure to difficult operating conditions, challenges arise from recent oversized credit expansion, that is already leading to higher problem loans and provisions, which led to reduced earnings in the first quarter of 2025. Galicia's foreign-currency subordinate debt rating of Caa2, which was upgraded from Caa3, is notched down from the bank's caa1 adjusted BCA to reflect higher expected loss due to subordination. -- BANCO MACRO The upgrade of Macro's BCA to caa1 from caa3 considers the Argentine sovereign rating and the bank's intrinsic credit strengths, which have demonstrated resilience through Argentina's challenging economic cycles. These strengths include robust and above-peers capitalization, with a TCE ratio of 23.2% as of March 2025, substantial liquidity levels, and a favorable funding profile supported by an inexpensive and highly granular deposit base, driven by its role as a financial agent for many Argentine provinces. Challenges continue to arise from difficult operating conditions, despite recent improvements, including asset quality pressures on recent fast loan growth, and margin pressure as competition for deposits and lending intensifies amid the country's normalization process. Macro's foreign-currency subordinate debt rating of Caa2, which was upgraded from Caa3, is notched down from the bank's caa1 adjusted BCA to reflect higher expected loss due to subordination. -- BANCO SANTANDER ARGENTINA The upgrade of Santander Argentina's BCA to caa1 from caa3 and adjusted BCA to b3 from caa2 reflects the upgrade of the Argentine sovereign rating; Moody's unchanged assumption of a moderate probability of affiliate support from Banco Santander, S.A. (Spain) (A2 positive, baa1), resulting in one notch of uplift to an Adjusted BCA of b3; and the bank's strong fundamental credit strengths. These strengths include a solid capitalization with a TCE ratio of 16.3% as of March 2025, and strong liquidity with liquid assets comprising 44% of tangible assets as of the same date. The bank's exposure to Argentine sovereign securities remains high albeit it is lower than local peers, accounting for 1.1x its TCE as of March 2025. Similar to its local peers, problem loans and provisions have been increasing as a result of the strategy to increase lending, with implication to profitability coming from higher cost of credit, something expected as the bank shifts from transaction to credit focus. However, Santander Argentina has performed better than peers through the first quarter of 2025, less impacted by reduced earnings from sovereign securities. -- BANCO HIPOTECARIO The upgrade of Hipotecario's BCA to caa1 from caa3 reflects the upgrade of the Argentine sovereign rating and the improvement in the macro profile. Positive drivers for the upgrade were a recovery in its asset quality metrics after reporting higher-than-average NPLs between 2017 and 2023, improved profitability with a net income of 3.0% of tangible assets in 2024, despite the -1.3% ratio reported in March 2025 primarily related to weak results on sovereign securities. Hipotecario also reported adequate capital and liquidity buffers. The bank's ratings also take into account its higher reliance on wholesale funding and higher exposure to sovereign debt. In March 2025, the exposure to sovereign debt remained higher than local peers at 2.1x Hipotecario's tangible common equity (average of 1.2x reported by the other four rated banks). One of the challenges for Hipotecario relative to largest banks in the system is a concentrated commercial loan portfolio, which can translate into larger asset quality pressures on troubled commercial borrowers. -- BANCO SUPERVIELLE The upgrade of Supervielle's BCA to caa1 from caa3 reflects the improvement of the Argentine sovereign rating and the increase in Argentina's macro profile to Very Weak+. The ratings and BCA upgrade also consider the bank's improved asset quality metrics since 2023, adequate earnings supported by increased lending activities, despite negative pressure on Q1 2025 due to weak results on sovereign securities, as well as a diversification strategy that intends to enhance portfolio granularity with a stable deposit base. However, Moody's also considers Supervielle's reliance on wholesale funding, with about 50% of deposits sourced from institutional and corporate clients, which balances its high liquidity buffers. Also, the bank's loan growth has outpaced peers in the last year, which has led to faster capital consumption and an exposure to asset quality deterioration. In turn, the bank's loan book has more concentrations than the largest banks in the country. -- OUTLOOKS The stable ratings outlook on the long-term deposit ratings of Galicia, Macro, Santander Argentina, Supervielle and Hipotecario reflects Moody's views that the expected performance of the banks´ financial fundamentals over the next 12-18 months is appropriately captured in their current deposit and debt (where available) ratings. Also, the stable outlook on the Government of Argentina makes a potential upgrade of the banks' ratings less likely. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS Upward movement on these banks' BCAs and ratings would be dependent on an upgrade of the Government of Argentina's Caa1 sovereign rating, which currently has a stable outlook, provided that better operating conditions continue to consolidate and the entities' main credit metrics remained stable or improve. Negative pressures on these banks' ratings could arise from a downgrade of the Argentinean sovereign rating, by an unexpected deterioration in the country's operating environment for banks, or a deterioration of the financial institutions' fundamentals. LIST OF AFFECTED RATINGS Issuer: Banco de Galicia y Buenos Aires S.A.U. Upgrades: Adjusted Baseline Credit Assessment, Upgraded to caa1 from caa3 Baseline Credit Assessment, Upgraded to caa1 from caa3 LT Counterparty Risk Assessment, Upgraded to B3(cr) from Caa2(cr) LT Counterparty Risk Rating (Foreign Currency), Upgraded to B3 from Caa2 LT Counterparty Risk Rating (Local Currency), Upgraded to B3 from Caa2 Senior Unsecured Medium-Term Note Program (Foreign Currency), Upgraded to (P)Caa1 from (P)Caa2 Subordinate (Foreign Currency), Upgraded to Caa2 from Caa3 Senior Unsecured Medium-Term Note Program (Local Currency), Upgraded to (P)Caa1 from (P)Caa2 Senior Unsecured (Foreign Currency), Upgraded to Caa1 STA from Caa2 STA LT Bank Deposits (Foreign Currency), Upgraded to Caa1 STA from Caa2 STA LT Bank Deposits (Local Currency), Upgraded to Caa1 STA from Caa2 STA Affirmations: ST Counterparty Risk Assessment, Affirmed NP(cr) ST Counterparty Risk Rating (Foreign Currency), Affirmed NP ST Counterparty Risk Rating (Local Currency), Affirmed NP ST Bank Deposits (Foreign Currency), Affirmed NP ST Bank Deposits (Local Currency), Affirmed NP Outlook Actions: Outlook, Remains Stable Issuer: Banco Hipotecario S.A. Upgrades: Adjusted Baseline Credit Assessment, Upgraded to caa1 from caa3 Baseline Credit Assessment, Upgraded to caa1 from caa3 LT Counterparty Risk Assessment, Upgraded to B3(cr) from Caa3(cr) LT Counterparty Risk Rating (Foreign Currency), Upgraded to B3 from Caa3 LT Counterparty Risk Rating (Local Currency), Upgraded to B3 from Caa3 Senior Unsecured (Foreign Currency), Upgraded to Caa1 STA from Caa3 POS LT Bank Deposits (Foreign Currency), Upgraded to Caa1 STA from Caa3 POS LT Bank Deposits (Local Currency), Upgraded to Caa1 STA from Caa3 POS Affirmations: ST Counterparty Risk Assessment, Affirmed NP(cr) ST Counterparty Risk Rating (Foreign Currency), Affirmed NP ST Counterparty Risk Rating (Local Currency), Affirmed NP ST Bank Deposits (Foreign Currency), Affirmed NP ST Bank Deposits (Local Currency), Affirmed NP Outlook Actions: Outlook, Changed To Stable From Positive Issuer: Banco Macro S.A. Upgrades: Adjusted Baseline Credit Assessment, Upgraded to caa1 from caa3 Baseline Credit Assessment, Upgraded to caa1 from caa3 LT Counterparty Risk Assessment, Upgraded to B3(cr) from Caa2(cr) LT Counterparty Risk Rating (Foreign Currency), Upgraded to B3 from Caa2 LT Counterparty Risk Rating (Local Currency), Upgraded to B3 from Caa2 Senior Unsecured Medium-Term Note Program (Foreign Currency), Upgraded to (P)Caa1 from (P)Caa2 Senior Unsecured Medium-Term Note Program (Local Currency), Upgraded to (P)Caa1 from (P)Caa2 Subordinate (Foreign Currency), Upgraded to Caa2 from Caa3 Senior Unsecured (Foreign Currency), Upgraded to Caa1 STA from Caa2 STA LT Bank Deposits (Foreign Currency), Upgraded to Caa1 STA from Caa2 STA LT Bank Deposits (Local Currency), Upgraded to Caa1 STA from Caa2 STA Affirmations: ST Counterparty Risk Assessment, Affirmed NP(cr) ST Counterparty Risk Rating (Foreign Currency), Affirmed NP ST Counterparty Risk Rating (Local Currency), Affirmed NP ST Bank Deposits (Foreign Currency), Affirmed NP ST Bank Deposits (Local Currency), Affirmed NP Outlook Actions: Outlook, Remains Stable Issuer: Banco Santander Argentina S.A. Upgrades: Adjusted Baseline Credit Assessment, Upgraded to b3 from caa2 Baseline Credit Assessment, Upgraded to caa1 from caa3 LT Counterparty Risk Assessment, Upgraded to B2(cr) from Caa1(cr) LT Counterparty Risk Rating (Foreign Currency), Upgraded to B2 from Caa1 LT Counterparty Risk Rating (Local Currency), Upgraded to B2 from Caa1 LT Bank Deposits (Foreign Currency), Upgraded to B3 STA from Caa1 STA LT Bank Deposits (Local Currency), Upgraded to B3 STA from Caa1 STA Affirmations: ST Counterparty Risk Assessment, Affirmed NP(cr) ST Counterparty Risk Rating (Foreign Currency), Affirmed NP ST Counterparty Risk Rating (Local Currency), Affirmed NP ST Bank Deposits (Foreign Currency), Affirmed NP ST Bank Deposits (Local Currency), Affirmed NP Outlook Actions: Outlook, Remains Stable Issuer: Banco Supervielle S.A. Upgrades: Adjusted Baseline Credit Assessment, Upgraded to caa1 from caa3 Baseline Credit Assessment, Upgraded to caa1 from caa3 LT Counterparty Risk Assessment, Upgraded to B3(cr) from Caa2(cr) LT Counterparty Risk Rating (Foreign Currency), Upgraded to B3 from Caa2 LT Counterparty Risk Rating (Local Currency), Upgraded to B3 from Caa2 LT Bank Deposits (Foreign Currency), Upgraded to Caa1 STA from Caa2 STA LT Bank Deposits (Local Currency), Upgraded to Caa1 STA from Caa2 STA Affirmations: ST Counterparty Risk Assessment, Affirmed NP(cr) ST Counterparty Risk Rating (Foreign Currency), Affirmed NP ST Counterparty Risk Rating (Local Currency), Affirmed NP ST Bank Deposits (Foreign Currency), Affirmed NP ST Bank Deposits (Local Currency), Affirmed NP Outlook Actions: Outlook, Remains Stable PRINCIPAL METHODOLOGY The principal methodology used in these ratings was Banks published in November 2024. Macro's caa1 BCA is set three notches below the "Financial Profile" initial score of b1 to reflect the impact of the sovereign's weak credit profile and the recent fast loan growth, which leads to an expectation of weaker asset quality and capital metrics. Santander Argentina's caa1 BCA is set four notches below the "Financial Profile" initial score of ba3 to reflect the impact of the sovereign's weak credit profile and the recent fast loan growth, which leads to an expectation of weaker asset quality and capital metrics, while the expected margin pressure will also likely lead to lower profitability. For Galicia, Hipotecario and Supervielle, 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. ============= B A H A M A S ============= FTX GROUP: Ends 6 Suits Over Political Donations in Ch. 11 ---------------------------------------------------------- Alex Wittenberg at law360.com reports that fallen cryptocurrency exchange FTX has agreed to dismiss adversary proceedings in Delaware bankruptcy court against six political organizations, lawsuits that were aimed at recovering roughly $28.75 million in donations made to the groups prior to FTX's bankruptcy. About FTX Group FTX is the world's second-largest cryptocurrency firm. FTX is a cryptocurrency exchange built by traders, for traders. FTX offers innovative products including industry-first derivatives, options, volatility products and leveraged tokens. Then CEO and co-founder Sam Bankman-Fried said Nov. 10, 2022, that FTX paused customer withdrawals after it was hit with roughly $5 billion worth of withdrawal requests. Faced with liquidity issues, FTX on Nov. 9, 2022, struck a deal to sell itself to its giant rival Binance, but Binance walked away from the deal amid reports on FTX regarding mishandled customer funds and alleged US agency investigations. SBF agreed to step aside, and restructuring vet John J. Ray III was quickly named new CEO. FTX Trading Ltd (d/b/a FTX.com), West Realm Shires Services Inc. (d/b/a FTX US), Alameda Research Ltd. and certain affiliated companies then commenced Chapter 11 proceedings (Bankr. D. Del. Lead Case No. 22-11068) on an emergency basis on Nov. 11, 2022. Additional entities sought Chapter 11 protection on Nov. 14, 2022. FTX Trading and its affiliates each listed $10 billion to $50 billion in assets and liabilities, making FTX the biggest bankruptcy filer in the US this year. According to Reuters, SBF shared a document with investors on Nov. 10, 2022, showing FTX had $13.86 billion in liabilities and $14.6 billion in assets. However, only $900 million of those assets were liquid, leading to the cash crunch that ended with the company filing for bankruptcy. The Hon. John T. Dorsey is the case judge. The Debtors tapped Sullivan & Cromwell, LLP as bankruptcy counsel; Landis Rath & Cobb, LLP as local counsel; and Alvarez & Marsal North America, LLC as financial advisor. Kroll is the claims agent, maintaining the page https://cases.ra.kroll.com/FTX/Home-Index The Official Committee of Unsecured Creditors tapped Paul Hastings as counsel, FTI Consulting, Inc., as financial advisor, and Jefferies LLC as the investment banker. Young Conaway Stargatt & Taylor LLP is the Committee's Delaware and conflicts counsel. Montgomery McCracken Walker & Rhoads LLP, led by partners Gregory T. Donilon, Edward L. Schnitzer, and David M. Banker, is representing Sam Bankman-Fried in the Chapter 11 cases. White-collar crime specialist Mark S. Cohen has reportedly been hired to represent SBF in litigation. Lawyers at Paul Weiss previously represented SBF but later renounced representing the entrepreneur due to a conflict of interest. =========== B R A Z I L =========== USINAS SIDERURGICAS: Squeezed by Cheap Steel Imports in Q2 2025 --------------------------------------------------------------- Rio Times Online reports that Usinas Siderurgicas de Minas Gerais S.A. reported a second quarter 2025 net profit of R$128 million -- 62% less than the prior three months. This fall comes as a flood of cheap steel imports, mostly from China, put heavy pressure on Brazil's steel industry, according to Rio Times Online. Last year, Usiminas had actually lost money in this same period, so the shift back to profit shows some recovery, but the market remains tough, the report relays. The company's operating profit (EBITDA) fell to R$408 million, down sharply from R$733 million in the previous quarter, as profit margins dropped to 6% from 11%, the report says. Usiminas' total revenues stood at R$6.6 billion, slightly down from the quarter before but 4% higher than last year, the report discloses. Still, Usiminas made gains elsewhere, the report notes. It sold 1.08 million tons of steel, almost unchanged from early 2025, and boosted iron ore sales by 11% quarter-on-quarter to 2.46 million tons—up 22% compared to last year, the report relays. These numbers show that demand for its products remains solid even with stiffer competition, the report discloses. A bright spot came from a big cash flow turnaround, the report notes. Usiminas generated R$281 million in free cash, reversing a big outflow last quarter, the report relays. The company used this positive cash to shrink its net debt by nearly a quarter, to R$1.05 billion, the report relays. Its financial position is now much stronger, the report says. However, company leaders warn that rising imports of low-cost steel, combined with high interest rates at home, threaten future profits and investment, the report notes. Current trade barriers have not solved this problem, leaving Usiminas and other local producers under growing pressure to cut costs and delay new projects, the report discloses. The story here is simple but serious: Usiminas is holding on through a wave of foreign competition while improving its finances, but risks to Brazil’s industrial sector remain high, the report relays. Decisions made now about trade, credit, and investment will affect not just one company, but the country's larger manufacturing future, the report adds. As reported in the Troubled Company Reporter-Latin America on Sept. 30, 2024, Moody's Ratings has affirmed Usinas Siderurgicas de Minas Gerais S.A.'s ("Usiminas") Ba2 corporate family rating and the Ba2 rating of the $750 million backed senior unsecured notes due 2026 issued by Usiminas International S.a r.l. and fully and unconditionally guaranteed by Usiminas. The outlook for the issuers is stable. VIRGOLINO DE OLIVEIRA: Gets U.S. Restructuring Recognition ---------------------------------------------------------- Rick Archer of Law360 Bankruptcy Authority reports that on July 17, 2025, a New York bankruptcy judge granted U.S. recognition to the insolvency proceedings of Brazilian sugar producer and distributor Virgolino de Oliveira SA, following confirmation that the company's reorganization plan had been approved and bondholder lawsuits resolved. About Virgolino de Oliveira SA Virgolino de Oliveira S/A - Acucar e Alcool provides agriculture processing services. The Company transforms sugar cane juice into different sized sucrose crystals and produces fuel, ethanol, and renewable electrical power. Virgolino de Oliveira serves customers in Brazil. Virgolino de Oliveira SA sought relief under Chapter 15 of the U.S. Bankruptcy Code (Bankr. S.D.N.Y. Case No. 25-10696) on April 9, 2025. In its petition, the Debtor reports $735 million in debt. Honorable Bankruptcy Judge Martin Glenn handles the case. The Debtor is represented by Howard P. Magaliff, Esq. of R3M Law LLP. ================= G U A T E M A L A ================= CT TRUST: Fitch Affirms 'BB+' Long-Term IDR, Outlook Stable ----------------------------------------------------------- Fitch Ratings has affirmed CT Trust's Long-Term Foreign and Local Currency Issuer Default Ratings (IDRs) at 'BB+'. The Rating Outlook is Stable. Additionally, Fitch has affirmed CT Trust's senior unsecured debt at 'BB+'. CT Trust is a special purpose vehicle of Comcel Group and wholly owned subsidiary of Millicom International Cellular S.A. (BB+/Stable). The company's ratings are linked to Millicom, which reflects the absence of financial ring-fencing between the entities and Millicom's ability to access the subsidiary's cash flow through dividends and other measures. Comcel's ratings also reflect its strong market position and robust financial profile, partly offset by the relatively weak operating environment in Guatemala. Key Rating Drivers Parent-Subsidiary Relationship: Fitch employs a consolidated approach to Comcel's and Millicom's ratings. This approach, per Fitch's "Parent and Subsidiary Rating Linkage Criteria," limits Comcel's ratings to the 'BB+' level of its parent, Millicom, despite Comcel's 'bbb-' Standalone Credit Profile (SCP). As a holding company, Millicom relies solely on upstream cash flows from its subsidiaries. The lack of a legal ring-fencing mechanism to restrict cash flows to Millicom exposes Comcel to dividend distributions that could pressure its free cash flow (FCF), given Comcel's significant role within the group. Additionally, access and control remain open, with no formal policy separating funding, and subsidiary upstream lending. Leading Market Position: Comcel's 'bbb-' SCP stems from its robust capital structure and dominant market presence. As the largest mobile operator in Guatemala (BB/Positive), Comcel commands an estimated 63% market share in mobile subscribers and approximately 42% in broadband internet. These positions are bolstered by its reliable network, high service quality, and strong brand recognition. Weak Operating Environment: Comcel's ratings are limited by Guatemala's relatively weak operating environment, characterized by poor systemic governance, low sovereign rating, and vulnerability to economic shocks. These factors contribute to more volatile operating conditions, affecting political and regulatory stability and economic circumstances. Strong Margins: Comcel has one of the highest operating margins among telecom operators in the region. LTM EBITDA margins were around 49% as of March 2025, adjusted for the one-time gain from the sale of infrastructure to Lati Guatemala, S.A. in March 2025. These margins are expected to remain stable over the rating horizon, as reduced competitive pressures and operational savings from efficiency initiatives are likely to be partially offset by higher lease expenses as the company rents additional towers following the sale. Low Leverage Despite Debt Issuances: The company's net debt/EBITDA ratio is expected to remain below 2.0x despite potential higher debt levels. Fitch expects Comcel to issue additional debt in 2025 to be upstreamed as non-recurring dividend to Millicom to refinance its dollar debt. Net leverage is expected to stabilize through the rating horizon around 1.8x with shareholder distributions returning to historical levels in 2026. Solid FCF before Dividend: Comcel's 'bbb-' SCP reflects its low leverage and strong FCF before upstreams to Millicom. Cash flow from operations is projected to be around USD 650 million annually through 2027, with capital expenditures in the range of USD150 million to USD170 million. Fitch expects this cash flow to be primarily upstreamed, with average dividend distributions around USD 475 million and non-recurring dividends in 2025 relating to new debt and the shareholder loan for the sale of infrastructure assets to Lati. Peer Analysis Comcel's largest competitor, Claro Guatemala, is a subsidiary of America Movil S.A.B. de C.V. (AMX; A-/Stable). AMX has a stronger financial profile than Comcel's parent, Millicom, but Fitch does not expect the company to materially take market share from Comcel over the rating horizon, as Comcel maintains a leading brand presence and superior existing network infrastructure. Comcel's credit profile is strong compared with its regional telecom peers in the 'BB' rating category due to its high profitability, robust cash-flow generation, and low leverage, underpinned by its leading market shares and solid network quality and coverage. The company's credit profile is similar to its peers Telefonica Celular del Paraguay S.A.E. (Telecel; BB+/Stable), Millicom's subsidiary in Paraguay, and Telecomunicaciones Digitales, S.A. (BB+/Stable), Millicom's subsidiary in Panama. Another 'BB' category peer, Colombia Telecomunicaciones S.A. E.S.P. BIC (ColTel; BB+/Stable), has a solid market position in the competitive Colombian market, and benefits from its diversified service offerings. ColTel has sustained weaker margins than Comcel, due in part to heightened competition in the Colombian market, while ColTel's FCF has also been pressured by high capital intensity needs. Comcel's lack of geographic diversification, weak revenue diversification, and high shareholder returns constrain the rating. Key Assumptions - Mobile subscriber growth flat to slightly positive over the rating horizon; - Blended mobile ARPU growing low single digits over the rating horizon, driven by lower competitive pressures in prepaid and strong postpaid migration, partially offset by softer postpaid ARPUs; - Low single-digit growth in homes passed, with slightly negative home ARPU over the forecast horizon; - EBITDA margins stable around 49% over the medium term as cost efficiency savings are partially offset by higher lease expenses; - Capital intensity remaining relatively stable around 9.5% with no additional spectrum over the medium term; - Additional debt issued in 2025 to be upstreamed directly to Millicom for the purpose of refinancing its dollar debt; - Cash flow related to the sale of infrastructure assets to Lati to be distributed to Millicom in 2025; - Shareholder distributions hold leverage to around 1.8x on a net debt/EBITDA basis over the medium term. RATING SENSITIVITIES Factors that Could, Individually or Collectively, Lead to Negative Rating Action/Downgrade - A negative rating action on Millicom; - A material weakening of CT Trust's standalone credit profile; - A multi-notch downgrade of Guatemala's sovereign rating or Country Ceiling could lead to a downgrade of Comcel's Foreign Currency IDR. Factors that Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade - An upgrade of Millicom, Comcel's controlling shareholder, would have positive rating implications. Liquidity and Debt Structure Comcel maintains a robust liquidity profile supported by its substantial cash reserves, stable cash flow from operations, and well-distributed debt maturities. As of March 31, 2025, the company held USD166 million in cash and equivalents, with no short-term debt maturities. Approximately 70% of cash and equivalents were held in USD, with the remaining amount in GTQ. The company's debt consisted of USD496 million in bank financing and USD737 million in bonds due 2032. Issuer Profile CT Trust is a special-purpose vehicle (SPV) created in the Cayman Islands to issue senior unsecured notes on behalf of Comcel Group, a group of several legal entities providing telecommunication services in Guatemala under the Tigo brand. Summary of Financial Adjustments - Standard Lease adjustments MACROECONOMIC ASSUMPTIONS AND SECTOR FORECASTS Fitch's latest quarterly Global Corporates Macro and Sector Forecasts data file which aggregates key data points used in its credit analysis. Fitch's macroeconomic forecasts, commodity price assumptions, default rate forecasts, sector key performance indicators and sector-level forecasts are among the data items included. ESG Considerations The highest level of ESG credit relevance is a score of '3', unless otherwise disclosed in this section. A score of '3' means ESG issues are credit-neutral or have only a minimal credit impact on the entity, either due to their nature or the way in which they are being managed by the entity. Fitch's ESG Relevance Scores are not inputs in the rating process; they are an observation on the relevance and materiality of ESG factors in the rating decision. Entity/Debt Rating Prior ----------- ------ ----- CT Trust (Comcel) LT IDR BB+ Affirmed BB+ LC LT IDR BB+ Affirmed BB+ senior unsecured LT BB+ Affirmed BB+ ============= J A M A I C A ============= [] JAMAICA: Small Businesses Urged to Protect Ops From Disasters ---------------------------------------------------------------- RJR News reports that Latoya Hayden-Cousins, Client Relations Manager at JN Bank Small Business Loans, is urging small business operators to take steps to protect their equipment and inventories, and, by extension, their businesses from hurricanes and flooding. She points out that hurricanes and floods can damage machinery, infrastructure and inventory, leading to temporary or permanent business closures, according to RJR News. The small business executive also stressed that these closures can be devastating for small entrepreneurs and their staff due to the scarcity and unaffordability of capital, the report notes. She says small business operators should therefore develop proactive contingency plans to deal with natural disasters, not only during the hurricane season but year round, due to the effects of climate change, 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. =========== M E X I C O =========== FIDEICOMISO IRREVOCABLE: Fitch Affirms BBsf Rating on A-2 MXN Notes ------------------------------------------------------------------- Fitch Ratings has affirmed the international and national scale ratings assigned to notes issued by Fideicomiso Irrevocable y Traslativo de Dominio Numero 2400 (Trust 2400 - Sponsored by GICSA). The Rating Outlook is Stable. Entity/Debt Rating Prior ----------- ------ ----- Trust 2400 (Sponsored by GICSA) A-1 MXN XS2094574584 LT BB+sf Affirmed BB+sf A-1 MXN XS2094574584 Natl LT AA(mex)vra Affirmed AA(mex)vra A-1 USD 89835RAA2 LT BB+sf Affirmed BB+sf A-1 USD 89835RAA2 Natl LT AA(mex)vra Affirmed AA(mex)vra A-2 MXN XS2094576282 LT BBsf Affirmed BBsf A-2 MXN XS2094576282 Natl LT A+(mex)vra Affirmed A+(mex)vra KEY RATING DRIVERS Improved Cash Flow Inflows: Asset performance continues to show recovery, as evidenced by increasing collection proceeds and higher occupancy levels. Collection rates appear to have stabilized, with smaller variances between accrued and actual amounts collected. As of March 2025, the last 12 months (LTM) average collections of MXN174.21 million exceeded those reported in the previous review (March 2024: MXN142.77 million). Overall performance remains in line with Fitch's assumptions used to determine Fitch net cash flow (FNCF), which stood at MXN1,285.8 million as of March 2025 (March 2024: MXN1,211.6 million). The LTM average occupancy as of March 2025 was 91.6%, higher than the 88.9% observed in March 2024 and 88.5% in June 2023. Nevertheless, one office property continues to record declining occupancy. Stable Portfolio Characteristics: Fitch's expectations for retail sector performance remain flat and depend on the occupancy of anchor store spaces, while the office sector continues a gradual recovery but remains below pre-pandemic levels. Consequently, Fitch cap rate was adjusted to 11.5% from 10.4% (March 2024) in line with market expectations and portfolio composition. Portfolio characteristics continue stable, with a weighted average remaining lease term of 30 months as in its previous review. The servicer commented capex have been used to improve and expand available spaces in properties with higher demand which could further increase the number of tenants and therefore total revenue. Property Value Updated: Fitch property value was updated at MXN11,181.3 million after the updated cap rate at 11.5%. As of March 2025, the transaction classes had an outstanding balance of MXN6,763 million, USD93.94 million, and MXN563.63 million for Classes A-1 (MXN), A-1 (USD), and A-2, respectively. The agency calculated an LTV of 77.6% for Class A-1 and 82.6% for Class A-2, both in line with the notes' rating levels, after considering the current outstanding balance of the notes and updated Fitch's property value. Adequate Structural Mechanisms: DSCR levels reported by GICSA have remained close to the target for MXN DSCR and have shown an increasing trend for USD DSCR after a positive exchange rate impact. As of March 2025, the reported MXN DSCR and USD DSCR were 1.41x and 2.78x, respectively (compared to 1.42x and 1.81x, respectively, in 1Q24). Fitch considers that the transaction's structure is strong and protects the notes from performance deterioration, with triggers that could accelerate amortization or even result in property disposal. The transaction also maintains cash reserves that support payment obligations, although the payment obligation of the notes is due at maturity. RATING SENSITIVITIES Factors that Could, Individually or Collectively, Lead to Negative Rating Action/Downgrade Increased operational risks that negatively impact transaction's collection levels and/or limit liquidity could also derive in a negative rating action. Fitch analyzed the rating sensitivity to changes to Fitch's NCF in up and down environments. The results show ratings would not be resilient to a decrease of 10% in the FNCF, leading to a downgrade of at least one notch, while a decrease of 20% or higher in the FNCF could lead to a multiple-notch downgrade. Factors that Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade Sustained higher collection derived from stable occupancy levels in both sectors and improved LTV levels could lead to a positive rating action. 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. 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. PETROLEOS MEXICANOS: Fitch Puts 'B+' LongTerm IDR on Watch Positive ------------------------------------------------------------------- Fitch Ratings has placed Petroleos Mexicanos' (PEMEX) 'B+' Long-Term Foreign and Local Currency Issuer Default Ratings (IDRs) on Rating Watch Positive (RWP). Fitch has also placed the rating of PEMEX's approximately USD80 billion international notes outstanding of 'B+' with a Recovery Rating of 'RR4' on RWP. The RWP reflects the impact of the announced liability management transaction, which upon successful execution would translate into an improvement of the Mexican government's track record of support to the company, leading to a reassessment of the Overall GRE Linkage Score between PEMEX and the sovereign. This reassessment could result in a multi-notch upgrade of PEMEX's IDRs into the BB category. Key Rating Drivers Tangible Commitment to Support: The announced USD9.5 billion P-Cap transaction is credit positive and demonstrates the federal government's willingness and ability to provide substantial support to PEMEX. Upon successful completion of the transaction, Fitch will likely revise the R2 subfactor Precedents of Support of its Government-Related Entity (GRE) criteria to 'strong' from 'not strong enough'. This revision of the R2 subfactor would in turn increase the difference in Fitch's Overall Linkage Score (OLS) between PEMEX and Mexico's ratings from the current 25 points to 30 points. Per Fitch's GRE criteria, this increase in the OLS triggers a change in the approach to notching for PEMEX from the current bottom-up plus 5 approach to top-down minus 2, resulting in a two-notch upgrade to 'BB'. Increased Government Oversight: Legislative actions taken in Mexico that allow PEMEX to share a debt ceiling with the Secretary of Finance and the announced transaction to materially address PEMEX's short-term maturities, signal stronger government oversight, and improving decision making. Other similar measures could trigger a revision of PEMEX's GRE criteria R1 subfactor (decision-making and oversight) to "Very Strong" from "Strong", allowing an additional 5-point increase of PEMEX's OLS to 35. This score leads to a change in notching of PEMEX's IDR from top-down minus two to top-down minus one, for an additional IDR upgrade to 'BB+'. Financial Profile Persistently Weak: PEMEX's Standalone Credit Profile (SCP) is 'ccc-', reflecting negative FFO through the rating horizon, EBITDA compression due to lower crude prices and production, and unrelenting losses in the downstream business. PEMEX's indebtedness is a key driver of its SCP. As of March 31, 2025, PEMEX reported USD101.5 billion in debt, and interest expense of USD2.0 billion, close to half of the quarter's EBITDA. Expected leverage through the rating horizon exceeds 15x. The SCP could improve after the transaction closes, reflecting enhanced financial flexibility and liquidity. However, liquidity is expected to remain consistent with the 'ccc' category. Deteriorating Operational Performance: Fitch believes the multi-year underinvestment in both the upstream and downstream assets will continue eroding operational and, thus, financial performance. Multiple incidents at critical assets furthers concerns about the lack of maintenance capex. The message of the new administration regarding a cap to upstream production and intensified efforts in the downstream will continue to pressure liquidity unless ongoing government support is provided to address capex and debt service. Production and development of new fields have declined in the last few years, making exploration and production (E&P) capex a top concern. ESG - GHG Emissions & Air Quality: PEMEX's history with GHG emissions, poses an ESG concern. Multiple fires at critical assets will likely affect local communities and the environment. Fitch believes operational management and the lack of maintenance capex for core assets and infrastructure will further challenge PEMEX's financial profile. This was a key consideration in the 'B+' rating, as PEMEX's ESG track record can further impair its ability to raise capital. ESG - Hazardous Materials Management: The last 10 years of underinvestment has contributed to the deterioration of transportation infrastructure. Certain pipelines have had leaks, releasing contaminating products near nature and population. This issue poses an ESG concern as environmental remediation costs and related litigation could further pressure the company's liquidity position. ESG - Employee Wellbeing: Employee Wellbeing is also an ESG concern in assessing PEMEX's credit profile. Several incidents stemming from underinvestment in critical assets have caused injuries and fatalities of employees and contractors. Many of these have also had damaging environmental impacts, likely affecting the company financially and reputationally. ESG - Management Strategy: Fitch gave PEMEX a relevance Score of '5' for Management Strategy due to the confluence of the company's ESG track record and its financial distress, which could complicate management's ability to execute on its strategy, which has a negative impact on the credit profile, and is highly relevant to the rating, resulting in an implicitly lower. Peer Analysis PEMEX's link to the sovereign is weaker compared to Petroleo Brasileiro S.A. (Petrobras) (BB/Stable), Ecopetrol S.A. (BB+/Negative), and Empresa Nacional del Petroleo (A-/Stable), which benefit from strong government support. However, PEMEX compares favorably to Petroleos del Peru - Petroperu S.A. (CCC+), as Peru's government only meets Petroperu's immediate needs without improving its capital structure. Petroperu's market share drop from 45% to 25% caused minimal disruptions due to alternative fuel imports. Fitch believes regional governments, except for Mexico and Peru, have taken steps to ensure their national oil and gas companies' SCPs remain viable long-term. Fitch views PEMEX's SCP as commensurate with the 'ccc-' level, which is 10 notches below Petrobras's SCP 'bbb' and 9 notches below Ecopetrol's of 'bbb-'. The differences are primarily due to PEMEX's weaker capital structure and increasing debt. PEMEX's SCP reflects the company's large transfers to Mexico's federal government, weakening operations, and a large and increasing financial debt balance when compared with 1P reserves and elevated EBITDA-adjusted leverage. Comparatively, Ecopetrol and Petrobras significantly strengthened their capital structures and maintained stable operating profiles. Key Assumptions - Average West Texas Intermediate crude prices of USD65bbl in 2025, USD60bbl in 2026, and USD57bbl for the mid-cycle; - Henry Hub prices of USD3.6/mcf in 2025, USD3.5/mcf in 2026 and USD3.0/mcf thereafter; - Oil Production stays flat at 1.75mmboed; - Annual capex average of USD12 billion; - Government take to average 60% of EBITDA per annum; - Short-term debt and debt maturities are refinanced at 8%; - PEMEX will receive necessary support from the government to ensure adequate liquidity and debt service payments; - Refined product volumes growth moves aligned with Fitch's Real GDP growth forecasts of 0.05% in 2025, 0.7 in 2026 and thereafter; - P-Cap Transaction addressing USD 5 billion of 2025 bank debt and USD 4.5 billion of 2026 bank debt ; - Government support of USD 6.7 billion in 2025. Recovery Analysis PEMEX receives preferential treatment under Mexican bankruptcy law. The company cannot technically default under the current code. Still, the company has USD97 billion in debt, of which USD80 billion is in international bonds. This translates into an implied recovery using the liquidation approach of 40%. Company assets are predominately in Mexico, except for its Deer Park refinery in Texas and senior unsecured debt. Given the government ownership and strategic importance of these assets, it is highly unlikely that creditors will have claims to assets. Further, on a going concern basis, the company's equity value is negative and going concern EBITDA does not properly reflect cash flow available for debt service, given the high government take, which makes FFO negative. RATING SENSITIVITIES Factors That Could, Individually or Collectively, Lead to Negative Rating Action/Downgrade - A downgrade of Mexico's sovereign rating; - Weakened ability and/or willingness of the government to meaningfully support PEMEX; - Inaccessibility of financing and/or material increase in interest expense; - Cash balance falling below USD3.0 billion on sustained basis; - An inability to successfully manage supplier liability. Factors That Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade - Successful closing of the announced transaction; - Materialization of further support from the government; - An upgrade of Mexico's sovereign rating; - An irrevocable guarantee from Mexico's government to sustainably cover more than 75% of PEMEX's debt. Liquidity and Debt Structure PEMEX's liquidity position remains weak as a result of negative FCF, which resulted in a relatively low cash position and reduced availability of its lines of credit. The company reported total cash and equivalents of around MXN156 billion as of March 2025 and reported MXN2.1 trillion of total debt with MXN562 billion in short-term debt. Issuer Profile PEMEX, Mexico's state oil and gas company, is the nation's largest company and ranks among the world's largest vertically integrated petroleum enterprises. 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 Petroleos Mexicanos has an ESG Relevance Score of '5' for Waste & Hazardous Materials Management; Ecological Impacts due to numerous fires at its operating facilities that are expected to increase its carbon footprint and risks to polluting the environment and its impact on local communities, which has a negative impact on the credit profile, and is highly relevant to the rating, resulting in an implicitly lower rating. Petroleos Mexicanos has an ESG Relevance Score of '5' for Management Strategy due to the confluence of the company's ESG track record and its financial distress, which is expected to further complicate management's ability to execute on its strategy, which has a negative impact on the credit profile, and is highly relevant to the rating, resulting in an implicitly lower rating. Petroleos Mexicanos has an ESG Relevance Score of '5' for GHG Emissions & Air Quality due to the numerous incidents at its operating facilities that are expected to increase its carbon footprint and risks to polluting the environment and its impact on local communities, which has a negative impact on the credit profile, and is highly relevant to the rating, resulting in an implicitly lower rating. Petroleos Mexicanos has an ESG Relevance Score of '5' for Employee Wellbeing due to multiple fires that occurred in 2023 and 2024 that resulted in numerous reported injuries and fatalities of its employees. Fitch is concerned regarding the management of its operations, and the regulatory oversight to ensure PEMEX and other operators in the country are meeting industry standards pertaining to safety and employee wellbeing, which has a negative impact on the credit profile, and is highly relevant to the rating, resulting in an implicitly lower rating. Petroleos Mexicanos has an ESG Relevance Score of '4' for Governance Structure due to resulting from its nature as a majority government-owned entity and the inherent governance risk that arises with a dominant state shareholder, which 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 ----------- ------ -------- ----- Petroleos Mexicanos (PEMEX) LT IDR B+ Rating Watch On B+ LC LT IDR B+ Rating Watch On B+ senior unsecured LT B+ Rating Watch On RR4 B+ ===================== P U E R T O R I C O ===================== SILVER AIRAWAYS: Trustee Seeks to Tap KapilaMukamal as Accountant ----------------------------------------------------------------- Soneet Kapila, the trustee appointed in the cases of Silver Airways, LLC and Seaborne Virgin Islands, Inc., seeks approval from the U.S. Bankruptcy Court for the Southern District of Florida to employ KapilaMukamal LLC as accountant/financial advisor. The firm will provide these services: (a) review and analyze of the organizational structure of and financial interrelationships among the Debtors and their affiliates and insiders; (b) review and analyze of transfers to and from the Debtors to third parties, both pre-petition and post-petition; (c) attend at meetings with the Debtors, their creditors, the attorneys of such parties, and with federal, state, and local tax authorities, if requested; (d) review of the books and records of the Debtors for potential preference payments, fraudulent transfers, or any other matters that the trustee may request; (e) render such other assistance in the nature of accounting services, financial consulting, valuation issues, or other financial projects as the trustee may deem necessary; and (f) prepare estate tax returns. The firm will be paid at its ordinary and usual hourly billing rates plus out-of-pocket expenses incurred. Soneet Kapila, CPA, a founding partner at KapilaMukamal, disclosed in a court filing that the firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. The firm can be reached through: Soneet R. Kapila, CPA KapilaMukamal LLC 1000 South Federal Highway, Suite 200 Fort Lauderdale, FL 33316 About Silver Airways Silver Airways, LLC is a regional U.S. airline operating flights between gateways in Florida, the Southeast and The Bahamas. The Silver Airways fleet is comprised of modern, state of the art aircraft with reliable, fuel-efficient turbo-prop engines. In the summer of 2018, Silver completed the acquisition of Seaborne Airlines, a San Juan, Puerto Rico-based air carrier serving destinations throughout Puerto Rico, the U.S. Virgin Islands, and other countries in the Caribbean. Seaborne provides connections throughout the Caribbean via the carrier's hub in San Juan, while also serving as the most critical link between St. Croix and St. Thomas with the carrier's seaplane operation. Silver Airways and Seaborne Virgin Islands, Inc. filed Chapter 11 petitions (Bankr. S.D. Fla. Lead Case No. 24-23623) on Dec. 30, 2024. At the time of the filing, Silver Airways reported $100 million to $500 million in assets and liabilities, while Seaborne reported $1 million to $10 million in assets and liabilities. Judge Peter D. Russin oversees the cases. Brian P. Hall, Esq., is the Debtors' legal counsel. Brigade Agency Services, LLC, as lender, is represented by Frank P. Terzo, Esq., at Nelson Mullins Riley & Scarborough, LLP. Argent Funding LLC and Volant SVI Funding LLC, as lenders, are represented by Regina Stango Kelbon, Esq., at Blank Rome, LLP. Lawyers at Tucker Arensberg, PC represent Argentum Acquisition Co., LLC, emerged as the winning bidder for the airline's assets with an offer of $5,755,000 in cash plus additional amounts and the assumption of certain liabilities. ********* 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. 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