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250730.mbx T R O U B L E D C O M P A N Y R E P O R T E R L A T I N A M E R I C A Wednesday, July 30, 2025, Vol. 26, No. 151 Headlines A R G E N T I N A ARGENTINA: IDB OKs $1.2BB to Support Fiscal & Regulatory Reforms RCI BANQUE: Moody's Hikes Rating on Long Term Issuer Rating to B1 B R A Z I L BRAZIL: Economy Struggles as Current Account Deficit Widens C A Y M A N I S L A N D S CHARITABLE DAF: Court Tosses Bid to Halt Probe in Highland Case D O M I N I C A N R E P U B L I C DOMINICAN REPUBLIC: Among LatAm's Worst for Electricity Losses G U A T E M A L A GUATEMALA: IDB OKs $350M Loan to Expand Northern Highway Lanes J A M A I C A DIGICEL MIDCO: Fitch Assigns 'B-' Rating to Sr. Unsecured Notes JAMAICA: Goods Import Bill Hits US$519.4M as Trade Gap Persists NCB FINANCIAL: Fitch Puts 'B+(EXP)' Rating to New Sr. Secured Notes M E X I C O GRUPO AXO: Moody's Affirms 'Ba2' CFR, Alters Outlook to Positive HIPOTECARIA SU CASITA: Moody's Affirms Caa2 Rating on Cl. A Notes P U E R T O R I C O ALUMAX INC: Cannot Renege on Stipulation with CEFI, Court Says - - - - - ================= A R G E N T I N A ================= ARGENTINA: IDB OKs $1.2BB to Support Fiscal & Regulatory Reforms ---------------------------------------------------------------- The Inter-American Development Bank (IDB) approved two loans for Argentina totaling $1.2 billion that will advance critical reforms to strengthen fiscal sustainability, improve the business climate, and boost competitiveness under the Bank's new 2025-2028 Country Strategy. The first loan, for $800 million, is the second in a series of two programmatic policy-based loans (PBLs). It aims to support tax reforms that enhance the efficiency and equity of the tax system, reducing distortionary taxes and eliminating exemptions and deductions to improve the country's capacity to collect revenue. The loan also backs measures that reduce the cost of tax compliance by simplifying filing processes for value-added and personal income taxes. The financing will also support reforms to make public spending more efficient, including more precise targeting of subsidies for public services to improve the efficiency of the energy and water sectors. Other measures aim to improve the targeting and efficiency of social-assistance programs, increase budget transparency, and establish more efficient intergovernmental fiscal relations. The second loan, for $400 million, is part of another series of programmatic PBLs. It will support key reforms to reduce regulatory burdens, increase private-sector participation in the economy, and streamline foreign-trade operations. Reforms include the repeal or amendment of 700 outdated regulations and the creation of a digital platform for reporting bureaucratic obstacles that is expected to contain more than 12,000 reports by 2027. The reforms focusing on the business environment will benefit approximately 500,000 businesses across Argentina by lowering compliance costs and opening markets previously dominated by state-owned enterprises. They will also enhance efficiency for about 24,000 importers and 9,500 exporters through faster and more transparent trade procedures. The newly approved loans are part of $10 billion in IDB financing assistance for Argentina that was announced in April, to be apportioned over the next three years under the Bank's 2025-2028 Country Strategy. The financing is aligned with ongoing support from the International Monetary Fund and the World Bank and reinforces the country's commitment to fiscal sustainability and structural transformation. Both IDB loans have a 20-year maturity, a 5.5-year grace period, and an interest rate based on the Secured Overnight Financing Rate (SOFR).  About Argentina Argentina is a country located mostly in the southern half of South America. Its capital is Buenos Aires. Javier Milei is the current president of Argentina after winning the November 19, 2023 general election. He succeeded Alberto Angel Fernandez in the position. Argentina has the third largest economy in Latin America. The country's economy is an upper middle-income economy for fiscal year 2019, according to the World Bank. Historically, however, its economic performance has been very uneven, with high economic growth alternating with severe recessions, income maldistribution and in the recent decades, increasing poverty. In March 2022, the International Monetary Fund (IMF) approved a 30-month arrangement under an Extended Fund Facility for Argentina in the amount of SDR 31.914 billion (equivalent to US$44 billion, or 1000 percent of quota) -- with an approved immediate disbursement of an equivalent of US$9.65 billion. Argentina's IMF-supported program sought to improve public finances and start to reduce persistent high inflation through a multi-pronged strategy. On April 11, 2025, the IMF further approved a 48-month Extended Fund Facility (EFF) arrangement for Argentina totaling US$20 billion (or 479 percent of quota), with an immediate disbursement of US$12 billion, and a first review planned for June 2025 with an associated disbursement of about US$2 billion. The program is expected to help catalyze additional official multilateral and bilateral support, and a timely re-access to international capital markets. Fitch Ratings, on May 12, 2025, upgraded Argentina's Long-Term Foreign-Currency and Local-Currency Issuer Default Rating (IDR) to 'CCC+' from 'CCC'. The upgrade reflects the launch of a new IMF program, among other things. S&P Global Ratings, in February 2025 lowered its local currency sovereign credit ratings on Argentina to 'SD/SD' from 'CCC/C' and its national scale rating to 'SD' from 'raB+'. Moody's Ratings, in January 2025, raised Argentina's local currency ceiling to B3 from Caa1 and the foreign currency ceiling to Caa1 from Caa3. DBRS, Inc. upgraded Argentina's Long-Term Foreign and Local Currency Issuer Ratings to B (low) from CCC in November 2024. RCI BANQUE: Moody's Hikes Rating on Long Term Issuer Rating to B1 ----------------------------------------------------------------- Moody's Ratings upgraded RCI Banque Sucursal Argentina's local currency long-term issuer rating to B1 from B3. The outlook remains stable. This action follows the upgrade of the Government of Argentina's long-term foreign currency and local currency issuer ratings to Caa1 from Caa3 and the change of the outlook to stable from positive, as well as the raise of local and foreign currency ceilings to B1 and B2, respectively, on July 17, 2025. RATINGS RATIONALE RCI Banque Sucursal Argentina is a branch of RCI Banque (RCI, Baa1/Baa1 stable, baa3) located in Argentina. The local currency long-term issuer rating of RCI Banque Sucursal Argentina is constrained by the B1 local currency bond ceiling of the Government of Argentina. The ratings of RCI Banque are unaffected by this rating action. OUTLOOK The outlook on RCI Banque Sucursal Argentina's local currency long-term issuer rating remains stable as it is constrained by the B1 local currency bond ceiling of the Government of Argentina. Ceilings do not necessarily move in lockstep with sovereign ratings. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATING RCI Banque Sucursal Argentina's local currency long-term issuer rating could be upgraded if the country's local currency bond ceiling is upgraded. An upgrade of RCI's Baseline Credit Assessment (BCA), Adjusted BCA or senior unsecured ratings would not result in an upgrade of RCI Banque Sucursal Argentina's local currency long-term issuer rating. This is because the branch's rating is constrained by Argentina's local currency bond ceiling. RCI Banque Sucursal Argentina's long-term issuer rating could be downgraded if Argentina's local currency bond ceiling is lowered as a result of a downgrade of the sovereign rating. PRINCIPAL METHODOLOGY The principal methodology used in this rating was Banks published in November 2024. 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 R A Z I L =========== BRAZIL: Economy Struggles as Current Account Deficit Widens ----------------------------------------------------------- Rio Times Online reports that official figures released on July 25, 2025, reveal Brazil's economy is under significant pressure due to a growing current account deficit and declining foreign direct investment. These developments present critical challenges for businesses evaluating their investment strategies in Latin America's largest economy, according to Rio Times Online. Brazil's current account deficit sharply widened to $5.13 billion in June, surpassing the forecasted deficit of $4.36 billion, notes the report. This notable increase from May's deficit of $2.93 billion highlights a worsening trade and investment imbalance, as the country imports more goods, services, and capital than it exports, the report notes. Simultaneously, foreign direct investment (FDI) into Brazil dropped markedly to $2.81 billion in June, well below the projected $4.50 billion, the report relays. This decline from the previous month's figure of $3.66 billion reflects reduced investor confidence, possibly driven by ongoing concerns about Brazil's economic outlook and global market conditions, the report says. Further complicating the economic scenario, Brazil's Mid-Month Consumer Price Index (CPI) rose by 0.33% in July, exceeding the forecasted increase of 0.30%, the report discloses. The annual inflation rate now stands at 5.30%, slightly higher than the anticipated 5.26%. Rising inflationary pressures could restrain consumer spending and pose additional obstacles to economic growth, the report relays. Despite these economic challenges, consumer confidence in Brazil showed modest improvement, reaching 86.7 in July compared to June's 85.9, according to Fundacao Getulio Vargas (FGV), the report notes. This marginal increase suggests consumers maintain cautious optimism despite broader economic uncertainties, the report relays. For international businesses, these economic indicators underscore the need for vigilant risk assessment, the report discloses. Persistent inflation, declining foreign investment, and a widening current account deficit suggest a cautious approach, the report notes. Companies should carefully watch policy decisions by Brazilian authorities, which will significantly influence future economic stability and growth opportunities, adds the report. About Brazil Brazil is the fifth largest country in the world and third largest in the Americas. Luiz Inacio Lula da Silva won the 2022 Brazilian general election. He was sworn in on January 1, 2023, as the 39th president of Brazil, succeeding Jair Bolsonaro. In October 2024, Moody's Ratings upgraded the Government of Brazil's long-term issuer and senior unsecured bond ratings to Ba1 from Ba2, the senior unsecured shelf rating to (P)Ba1 from (P)Ba2; and maintained the positive outlook. S&P Global Ratings raised on Dec. 19, 2023, its long-term global scale ratings on Brazil to 'BB' from 'BB-'. Fitch Ratings affirmed on Dec. 15, 2023, Brazil's Long-Term Foreign-Currency Issuer Default Rating (IDR) at 'BB' with a Stable Outlook. DBRS' credit rating for Brazil was last reported at BB with stable outlook at July 2023. =========================== C A Y M A N I S L A N D S =========================== CHARITABLE DAF: Court Tosses Bid to Halt Probe in Highland Case --------------------------------------------------------------- Alicia McElhaney of The Wall Street Journal reports that Texas Attorney General Ken Paxton sought to pause proceedings in Highland Capital Management's Chapter 11 case to investigate individuals and entities linked to the bankruptcy, according to court records. His focus includes Charitable DAF Holdings Corp., a U.S. affiliate of a Cayman Islands-based nonprofit entity established in 2011 by Highland founder James Dondero to support various charities, documents reviewed by The Wall Street Journal show. But on Monday, July 21, 2025, U.S. Bankruptcy Judge Stacey Jernigan in Dallas denied Paxton's request, ruling that the alleged misconduct involving Charitable DAF CEO Mark Patrick wasn't closely tied enough to Highland's bankruptcy estate or its settlement agreement to justify halting the case. Charitable DAF Holdco, the Cayman-based affiliate, is now in liquidation. Its court-appointed administrators recently accused Patrick of improperly transferring $270 million away from nonprofit beneficiaries, including the Dallas Foundation, the Santa Barbara Foundation, the Community Foundation of North Texas, and the Greater Kansas City Foundation. Patrick has denied wrongdoing in court filings, arguing the restructuring was intended to prevent Dondero from using the nonprofit's funds to support litigation or settle obligations linked to other legal matters involving Highland. He also contends Dondero has no claim to the nonprofit's funds and that the restructured entity continues to pursue a charitable mission, according to The Wall Street Journal. Paxton recently demanded documents from Patrick related to Charitable DAF's valuations, finances, and communications with Highland-linked entities, according to a letter reviewed by The Journal. The attorney general's office declined to comment. The dispute over Charitable DAF's restructuring spans multiple legal venues, including Highland's bankruptcy case. Dondero, ousted from Highland after the firm filed for bankruptcy in 2019, continues to challenge the reorganization overseen by new directors and court-appointed administrators. According to Cayman liquidators, Patrick last 2024 issued new shares to seize control of Charitable DAF Holdco and transferred $270 million into a newly formed entity. Patrick has claimed in Texas court filings that Dondero is attempting to regain control of the nonprofit for personal gain. He says the nonprofit's governance documents gave him authority to issue shares and transfer assets. Dondero, meanwhile, has asked the bankruptcy court to block Patrick from moving assets to entities under his control. Nonprofit beneficiaries have separately urged the Texas Business Court to freeze Charitable DAF's assets and appoint a receiver, accusing Patrick of self-dealing, fraud, and fiduciary breaches. Patrick has moved to dismiss those claims, the report states. About Highland Capital Management Highland Capital Management, LP was founded by James Dondero and Mark Okada in Dallas in 1993. Highland Capital is the world's largest non-bank buyer of leveraged loans in 2007. It also manages collateralized loan obligations. In March 2007, it raised $1 billion to buy distressed loans. Collateralized loan obligations are created by bundling together loans and repackaging them into new securities. Highland Capital Management sought Chapter 11 protection (Bank. D. Del. Case No. 19-12239) on Oct. 16, 2019. On Dec. 4, 2019, the case was transferred to the U.S. Bankruptcy Court for the Northern District of Texas and was assigned a new case number (Bank. N.D. Tex. Case No. 19-34054). Judge Stacey G. Jernigan is the case judge. At the time of the filing, Highland had between $100 million and $500 million in both assets and liabilities. The Debtor tapped Pachulski Stang Ziehl & Jones LLP as bankruptcy counsel, Foley & Lardner LLP as special Texas counsel, and Teneo Capital, LLC as litigation advisor. Kurtzman Carson Consultants, LLC, is the claims and noticing agent. The U.S. Trustee for Region 6 appointed a committee of unsecured creditors on Oct. 29, 2019. The committee tapped Sidley Austin LLP and Young Conaway Stargatt & Taylor LLP as bankruptcy counsel, and FTI Consulting, Inc. as financial advisor. =================================== D O M I N I C A N R E P U B L I C =================================== DOMINICAN REPUBLIC: Among LatAm's Worst for Electricity Losses -------------------------------------------------------------- Dominican Today reports that while some countries, such as Chile and Costa Rica, have managed to keep electricity losses below 10%, others, including the Dominican Republic and Honduras, record losses exceeding 35%. These losses can represent a drain on public resources, weaken service quality, and, in many cases, reflect the inefficiency of state-owned distribution companies, notes Dominican Today. According to the study "Economics of Electricity Losses in Latin America and the Caribbean" published by the Inter-American Development Bank, countries with greater private participation in electricity distribution have lower average losses (14.1%) than those where state management predominates (22.3%), the report notes. This is no coincidence: private sector participation has enabled better governance, provided greater incentives for efficiency, and led to sustained improvements in service quality, the report says. Public enterprises, such as the Dominican Republic's EDEs, do not depend on their efficiency, but rather on the ongoing support of public finances, the report discloses. By May 2025, EDEs had already received more than 35 billion pesos in state subsidies, representing a significant burden for taxpayers, the report adds. Addressing the problem of electricity losses requires more than investment: it requires reforming the institutional nature of the system, the report relays. Persisting with an inefficient state-run model means postponing the modernization of the electricity sector, perpetuating the burden on the treasury, and condemning users to poor service, the report notes. Evidence shows that where there is private management, there are fewer losses and better quality, the report relays. About Dominican Republic The Dominican Republic is a Caribbean nation that shares the island of Hispaniola with Haiti to the west. Capital city Santo Domingo has Spanish landmarks like the Gothic Catedral Primada de America dating back 5 centuries in its Zona Colonial district. Luis Rodolfo Abinader Corona is the current president of the nation. TCR-LA reported in April 2019 that Juan Del Rosario of the UASD Economic Faculty cited a current economic slowdown for the Dominican Republic and cautioned that if the trend continues, growth would reach only 4% by 2023. Mr. Del Rosario said that if that happens, "we'll face difficulties in meeting international commitments." An ongoing concern in the Dominican Republic is the inability of participants in the electricity sector to establish financial viability for the system. Standard & Poor's credit rating for Dominican Republic was raised to 'BB' in December 2022 with stable outlook. Moody's credit rating for Dominican Republic was last set at Ba3 in August 2023 with the outlook changed to positive. Fitch, in December 2023, affirmed the Dominican Republic's Long-Term Foreign-Currency Issuer Default Rating (IDR) at 'BB-' and revised the outlook to positive. ================= G U A T E M A L A ================= GUATEMALA: IDB OKs $350M Loan to Expand Northern Highway Lanes -------------------------------------------------------------- The Inter-American Development Bank (IDB) has approved a loan of $350 million to help Guatemala add lanes to the Teculutan-Mayuelas section of Northern Highway CA-9. The operation, which has been approved by the IDB Board of Executive Directors, finances a plan to better connect international trade hubs and further integrate the region in a safe and resilient way. This operation is part of the "America en el Centro" program. Adding more lanes to the Teculutan-Mayuelas section will benefit 86,600 residents and 2,057 businesses in Teculutan, Rio Hondo, and Gualan in the department of Zacapa. It will also benefit the 19,000 people who use this stretch of road daily and anyone else travelling on the northern part of Highway CA-9. Additionally, it will help 4,475 families through forest conservation in the watersheds that the highway crosses. Northern Highway CA-9 is the main corridor for international trade, integrating the country with the rest of the region. It links the ports of Santo Tomas de Castilla and Puerto Barrios on the Atlantic Ocean with the ports of San Jose and Quetzal on the Pacific Ocean, via its southern counterpart. It also runs through Guatemala City, the country's main logistics, industrial, and consumer hub. The current infrastructure of the Teculutan-Mayuelas section is inadequate and highly vulnerable to extreme events like floods. This leads to low levels of service, long travel times, higher vehicle operation costs, unsafe conditions, and limited accessibility in cities. To tackle these challenges, the program will fund work to four-lane 47.5 kilometers of this section, using resilient designs to ensure the highway stays open. It will build and improve bypasses, structures, intersections, and paving; construct bridges and culverts; and implement road safety measures, universal accessibility in cities, and infrastructure to promote active mobility. To mitigate the effects of floods and make the infrastructure more sustainable, the program will use nature-based solutions in high-risk areas. These measures build the capacity of farmers in the watersheds to preserve and restore forests and expand the area covered by agroforestry, silvopasture, and other restorative systems. The program will also fund pre-investment studies with the engineering design for sections of Northern Highway CA-9 to Puerto Barrios that have yet to be widened and improved. The $350 million operation has a 23-year repayment term, a 7.5-year grace period, and an interest rate based on the Secured Overnight Financing Rate (SOFR). ============= J A M A I C A ============= DIGICEL MIDCO: Fitch Assigns 'B-' Rating to Sr. Unsecured Notes --------------------------------------------------------------- Fitch Ratings has assigned a rating of 'B' with a Recovery Rating of 'RR4' to Digicel International Finance Limited's (DIFL) USD1.55 billion senior secured notes and USD750 million term loan issuances (co-issued by DIFL US LLC and Digicel Intermediate Holdings Limited) due in 2032. Fitch has also assigned a rating of 'B-'/'RR5' to Digicel Midco Limited's (Digicel) USD415 million unsecured notes (co-issued by DIFL US II LLC) due in 2032. The rating reflects the notes' structural subordination in the group's structure and lower recovery prospects. Proceeds will be used to refinance existing debt. Digicel and DIFL have Long-Term Foreign Currency Issuer Default Ratings (IDRs) of 'B' and Stable Rating Outlooks. The proposed new refinancing will further extend the companies' existing debt maturity and improve financial flexibility. As a leading Caribbean mobile operator, Digicel maintain metrics aligned with the 'B' rating category. However, weak operating environments in markets like Haiti and currency depreciation risks offset these strengths. Key Rating Drivers IDR Equalization: Fitch applies its "Parent and Subsidiary Rating Linkage Criteria" and takes the stronger subsidiary path for DIFL because of its lower leverage compared to the consolidated group. However, Fitch equalizes the IDRs of DIFL and Digicel Midco due to extensive past restructuring across multiple levels, the cross-default provisions between Digicel's senior unsecured debt and DIFL's secured debt, and ownership structure. DIFL's secured debt matures before Digicel's unsecured debt. Fitch assesses the group's credit profile using Digicel Holding (Bermuda) financials, which align closely with Digicel's credit metrics. Strong Competitive Position: The ratings reflect Digicel's strong market and diversification across 25 Caribbean markets, where duopoly conditions often reduce the risk of new entrants and sustain consistent EBITDA margins (before leases) of about 40%. In the mobile segment, most of Digicel's subscribers are pre-paid consumers, making them more price sensitive. While Digicel is expanding into higher-growth B2B solutions and home entertainment (B2C broadband and TV), these segments contribute about 25% of revenues. Positive Free Cash Flow: Fitch expects Digicel to generate positive FCF based on its moderate capex and lack of dividends. Fitch projects adjusted EBITDA (post leases) of approximately USD720-USD730 million at FYE 2026 from approximately USD680 million at FYE 2025. This is driven by single-digit growth in the B2B and fixed operations, steady revenues from its mobile operations and lower costs due to operating efficiency measures. Fitch projects capex-to-sales to remain close to 12% at FYE 2026. Improved Net Leverage: Fitch expects adjusted gross leverage to reach about 4.0x in fiscal 2026 (4.1x in fiscal 2025) based on improved EBITDA, positive FCF, and interest expenses of about USD 240 million. Fitch expects net leverage to trend toward 3.5x by FYE 2026 (3.7x in fiscal 2025). Haiti Exposure: The ratings also reflect Digicel's exposure to a low rated and volatile economic environment, including weather related events. Fitch estimates that Haiti represents about 17% of the company's revenues, with the company reporting high losses in prepaid subscribers due to civil unrest. Debt Restructuring and Maturity: The ratings reflect the post-restructuring capital structure, as debt was reduced by USD1.7 billion enabling the company to begin deleveraging and reducing refinancing risk. This restructuring aligns creditors, who are the main shareholders, with new management on the company's strategy and priorities. The proposed new refinancing will further extend the existing debt maturity and will reinforce the company's financial flexibility as the company is also setting up a new USD 200 million secured revolving credit facility. Peer Analysis Digicel's business profile, characterized by leading mobile market shares in well-diversified operational geographies supported by network competitiveness, is stronger than Oi S.A. (C), which has also restructured its debt. Digicel's business profile is weaker than its regional diversified telecom peers in the speculative grade rating categories, including Millicom International Cellular S.A. (BB+/Stable) and Cable & Wireless Communications Limited (BB-/Stable). Digicel's business profile is relatively smaller and less diversified on a service basis due to its reliance on mobile and exposure to non-investment-grade countries with significant exchange rate volatility. Liberty Communications of Puerto Rico LLC (B/Stable) has weaker credit metrics than Digicel. However, Fitch expects the metrics will improve over time due to the integration process and as it operates in an environment free from currency risks. Additionally, Liberty Puerto Rico's revenue mix features a more balanced distribution between fixed and mobile services. In contrast, most of Digicel's mobile customers use prepaid plans and tend to be more cost sensitive. Key Assumptions - Steady revenue in FYE26 followed by revenue growth of about 2%-3% driven by Digicel business and Digicel+. - EBITDA margins (adjusted by leases) of about 35%-40%. - Average capex of close to 12% of revenues. - No dividend payments to controlling shareholders. - Success in refinancing its main debts due in 2027 until May 2026. Recovery Analysis The recovery analysis assumes the company would be reorganized as a going concern in bankruptcy rather than liquidated. Fitch has assumed a 10% administrative claim. The going concern operating EBITDA reflects Fitch's estimates of mid-cycle EBITDA that is achievable in the medium term, given the company's performance post-debt restructuring, its position primarily in duopoly markets and its exposure to weak operating environment and currency risks. This going concern EBITDA of USD580 million. Fitch uses an enterprise value/EBITDA multiple of 5.0x, reflecting the company's long-term prospects and good market shares in mostly duopoly markets amid a scenario of financial distress. Fitch forecasts recovery rates commensurate with 'RR1' for the DIFL's senior secured notes and term loan. All these secured debt instrument recovery ratings are capped at 'RR4' resulting in ratings equal to the IDRs, in accordance with Fitch's Country Specific Treatment of Recovery Ratings Criteria that constrains the upward notching of instruments. The senior unsecured debt is rated 1-notch below the IDRs due to lower expected recovery and lower position in the group's structure. RATING SENSITIVITIES Factors that Could, Individually or Collectively, Lead to Negative Rating Action/Downgrade - Inability to refinance its secured debt due in 2027 by May 2026; - Deterioration of liquidity or performance; - Negative FCF on a sustained basis; - Debt/EBITDA above 5x. Factors that Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade - Progress in refinancing of existing debt (secured and unsecured); - Improved financial flexibility; - CFO-capex/debt above 2.5% on a sustained basis; - Debt/ EBITDA below 3.75x on a sustained basis; - EBITDA net leverage below 3.25x on a sustained basis. Liquidity and Debt Structure Digicel's liquidity improved following the group's restructuring with a reduction in cash interest burden and an extension of the debt amortization profile. The company's liquidity is mainly supported by its cash balance and the expectation that the company will generate positive FCF. Fitch expects Digicel to successfully refinance its debt, extending the maturity schedule to 2032 and improving its financial flexibility thanks to the addition of the new revolving credit facility. Of the consolidated USD2.8 billion of debt as of March 2025, USD2.3 billion (excluding leases) is at the DIFL level, USD455 million at the Digicel Midco level. The DIFL debt comprises USD1.3 billion of secured notes and USD1 billion of secured term loans due May 25, 2027. The Digicel Midco debt mainly comprises USD455 million of unsecured PIK/cash notes due Nov. 25, 2028. Issuer Profile Digicel is a diversified telecom operator that provides mobile and fixed-line services to consumers and businesses in the Caribbean. Date of Relevant Committee 02 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 Digicel Midco Limited has an Environmental, Social and Corporate Governance (ESG) Relevance Score (RS) of '4' for Group Structure due to its incorporation status in several countries with debt levels at several entities level, which has a negative impact on the credit profile, and is highly relevant to the rating, resulting in an implicitly lower rating. Digicel Midco Limited has an ESG RS of '4' for Exposure to Environmental Impacts due to its presence in a hurricane prone region, 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 ----------- ------ -------- DIFL US LLC senior secured LT B New Rating RR4 DIFL US II LLC senior unsecured LT B- New Rating RR5 Digicel International Finance Limited senior secured LT B New Rating RR4 Digicel Midco Limited senior unsecured LT B- New Rating RR5 Digicel Intermediate Holdings Limited senior secured LT B New Rating RR4 JAMAICA: Goods Import Bill Hits US$519.4M as Trade Gap Persists --------------------------------------------------------------- The Statistical Institute of Jamaica (STATIN) is reporting that Jamaica's food and consumer goods import bill for the first quarter of 2025 amounted to US$519.4 million, exceeding the country's total merchandise exports, which stood at US$485.2 million during the same period. The data highlights a persistent trade imbalance, with STATIN noting that for every US$1 earned from exports, Jamaica spent approximately US$3.90 on imports. The figures underscore the country's continued reliance on imported goods, particularly in the food and consumer sectors, and raise concerns about the sustainability of the trade gap. 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. NCB FINANCIAL: Fitch Puts 'B+(EXP)' Rating to New Sr. Secured Notes ------------------------------------------------------------------- Fitch Ratings has assigned NCB Financial Group Limited (NCBFG) proposed senior secured notes an expected Long-Term (LT) rating of 'B+ (EXP)' with a Recovery Rating of 'RR4'. The U.S. dollar-denominated issuance amount, rate and tenor are yet to be determined. The net proceeds will be used to redeem part of its existing indebtedness and for general corporate purposes. The final rating is contingent upon the receipt of final documents conforming to the information already received. The LT rating of 'B+(EXP)' for the senior unsecured debt published on June 4, 2025, has been withdrawn because the issuer is no longer issuing debt under those previous conditions. The expected terms of NCBFG's debt issuance have changed such that the debt type is no longer classified as senior unsecured, but rather as secured. For more information, see "Fitch Rates NCBFG's Proposed Senior Unsecured Notes 'B+(EXP)'" at www.fitchratings.com. Key Rating Drivers NCBFG's senior secured notes are rated at the same level as its LT Issuer Default Rating (IDR; B+/Positive), as the likelihood of default of the notes is the same as that of the holding company. In accordance with Fitch's rating criteria, recovery prospects for the notes are average and reflected in their Recovery Rating of 'RR4'. Although these notes are senior secured, Fitch believes the collateral mechanism would not significantly enhance recovery rates. The notes will constitute the NCBFG's direct, secured, unsubordinated, and senior obligations, ranking pari passu with all existing and future similarly secured and unsubordinated obligations. They will rank senior to any subordinated indebtedness and effectively senior to any unsecured indebtedness, limited to the value of the collateral securing the notes. The notes will be effectively junior to other obligations secured by liens on assets not included as collateral for the notes, to the extent of such collateral. NCBFG ratings are based on the creditworthiness of its main subsidiary National Commercial Bank Jamaica Limited (NCBJ), which is the largest bank in the country by assets and represents 53% of the group's consolidated assets. NCBFG's income is mainly derived from dividend income from its subsidiaries, followed by management fees and interest income (65%, 24% and 11%, in the same order). For more details on NCBFG, see "Fitch Rates "Fitch Affirms NCBJ at 'BB-'; Affirms NCBFG at 'B+'; Outlook Positive". Rating Sensitivities Factors that Could, Individually or Collectively, Lead to Negative Rating Action/Downgrade - NCBFG's senior secured debt ratings are directly linked to the holding's Long-Term IDR. Any negative rating action on the IDR will result in a similar rating action on these debt ratings. Factors that Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade - NCBFG's senior secured debt ratings are directly linked to the holding's Long-Term IDR. Any positive rating action on the IDR will result in a similar rating action on these debt ratings. Public Ratings with Credit Linkage to other ratings NCBFG's senior unsecured debt EXP rating is rated at the same level as the holding's LT IDR. Holding's IDR is based on creditworthiness of its main subsidiary, National Commercial Bank of Jamaica Limited. ESG Considerations Fitch does not provide ESG relevance scores for NCBFG. 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 Prior ----------- ------ -------- ----- NCB Financial Group Limited senior unsecured LT WD Withdrawn B+(EXP) senior secured LT B+(EXP) Expected Rating RR4 =========== M E X I C O =========== GRUPO AXO: Moody's Affirms 'Ba2' CFR, Alters Outlook to Positive ---------------------------------------------------------------- Moody's Ratings changed Grupo Axo, S.A.P.I. de C.V. (Axo), outlook to positive from stable. At the same time Moody's affirmed Axo's Ba2 corporate family rating. The outlook change to positive reflects Axo's ability to maintain solid credit metrics over the past several years, despite operating in a challenging environment. Supply chain disruptions, elevated inflation, currency pressures, and softer consumer spending have posed significant headwinds, yet Axo has sustained robust credit performance, with Moody's-adjusted debt/EBITDA around 2.2x. Looking ahead, the positive outlook also incorporates Moody's expectations that Axo's credit metrics will strengthen from 2026 onward. This improvement is anticipated as one-off costs related to recent liability management taper off and revenue contributions from recent investments begin to materialize. Key indicators—such as interest coverage and retained cash flow (RCF) to net debt—are projected to improve significantly. In 2024, Axo undertook several strategic initiatives aimed at enhancing its long-term financial and operational profile. These included a liability management strategy to optimize its capital structure, the launch of a joint venture to operate Specialty Beauty Ulta Beauty stores in Mexico, and the sale of a 49% stake in its off-price segment to The TJX Companies, Inc. (A2 stable). While these actions temporarily elevated financial expenses and dividend payouts—resulting in interest coverage (EBIT to interest expense) of 1.6x and RCF to net debt of 6.8% (both including Moody's standard adjustments)—they are expected to support future revenue growth and cash generation. Capex is expected to remain high through 2025 due to joint venture investments. However, by 2026, adjusted EBIT to interest expense is projected to improve to 2.3x, reaching around 3.0x by 2026. RCF to net debt is also expected to rise to nearly 30% by 2026. Despite negative free cash flow through 2026, the company is forecasted to return to positive free cash flow with accelerating growth thereafter. RATINGS RATIONALE Axo's credit profile reflects its solid market position, well-known brands, broad product offering, and track record of growth both organically and through new licenses and acquisitions. Axo generates strong operating cash through a profitable business model that leverages the company's clout with suppliers, and obtains synergies from its integration throughout the entire apparel business cycle and price points. The rating also captures governance factors such as a conservative leverage policy that targets debt reduction and seeks to maintain moderate leverage. Axo's history of expanding through acquisitions increases its execution risk despite its solid track record of integrating acquired operations. A business model focused on apparel also leaves it exposed to fashion risk, while its license concentration renders the company more susceptible to shifts in brand strategies and reputations. Axo maintains good liquidity, with a MXN4.3 billion cash balance as of March 2025—well above its MXN1 billion in short-term debt, including lease liabilities. Liquidity improved following recent liability management actions that lowered refinancing risk. In 2024, Axo signed a credit agreement with Mexican banks and used the proceeds to redeem nearly MXN8 billion ($410 million) in debt maturing in 2026, including MXN1.7 billion in local notes and $325 million in 5.75% global notes. That same year, Axo used proceeds from sale of 49% of its off-price business to TJX, to fund a close to MXN2 billion extraordinary dividend and reduce debt. Recently, Axo extended the maturity of the credit agreement to 2028, refinancing 2025 and 2026 obligations. Additionally, Axo retains access to close to MXN 950 million in available committed liquidity. The following large maturities Axo will face are scheduled in 2027, amounting close to MXN2 billion and in 2028 amounting MXN4 billion. Since most of Axo's debt is denominated at variable rates, it would continue to benefit from the decline in interest rates. Free cash flow (FCF) is expected to remain negative through 2026 due to partnership-related investments. Capex, including lease adjustments, will be around MXN5 billion in 2025 but is projected to fall below MXN4 billion by 2027, enabling a return to positive free cash flow. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS Ratings could be upgraded if the company successfully executes its multiyear strategic plan to improve capabilities of the off price segment leveraging TJX expertise and the launch of Ulta Beauty in Mexico. An upgrade would also require maintenance of strong liquidity, including the refinancing of debt maturities at economic rates, and financial policies that support deleveraging. Quantitatively, a rating upgrade would require Axo to maintain its debt/EBITDA below 3.5x and EBIT/interest expense above 3.0x, both on a Moody's-adjusted basis. Ratings could be downgraded if operating performance, credit metrics or liquidity were to materially deteriorate or if financial strategy turns more aggressive, such as extraordinary dividends or a sizable acquisition. Quantitatively, ratings could be downgraded if debt/EBITDA was sustained above 4.5x and EBIT/interest expense below 2.0x. Headquartered in Mexico, Grupo Axo, S.A.P.I. de C.V. is a multibrand fashion platform sourcing and marketing owned and licensed internationally recognized brands through its own stores and e-commerce platforms under full-price and discount-price formats, and through a presence in department stores. Axo has operations in Mexico, Chile, Peru and Uruguay. Some of the brands in its portfolio include Abercrombie & Fitch, Bath & Body Works, Brooks Brothers, Calvin Klein, Coach, Guess, Hollister, Laces, Lust, Nike, Old Navy, Olga, Rapsodia, Speedo, Taf, Taf Kids, Tommy Hilfiger, Victoria's Secret and Warner's. In 2024, Axo announced an agreement with The TJX Companies, Inc. (A2 stable) to create a joint venture (JV) that will comprise Axo's more than 200 Promoda, Urban and Reduced off-price stores. Also in 2024, Axo announced a JV with Ulta Beauty, Inc. to operate Ulta Beauty's business in Mexico. The principal methodology used in this rating was Retail and Apparel published in November 2023. The net effect of any adjustments applied to rating factor scores or scorecard outputs under the primary methodology(ies), if any, was not material to the ratings addressed in this announcement. HIPOTECARIA SU CASITA: Moody's Affirms Caa2 Rating on Cl. A Notes ----------------------------------------------------------------- Moody's Ratings has affirmed the rating of Hipotecaria Su Casita - Cross-border, Class A Insured Residential Mortgage Backed Floating Rate Notes ("Class A") wrapped by MBIA Insurance Corporation ("MBIA Corp") and upgraded the underlying rating. Mx Peso699.91M Class A Notes, Affirmed Caa2 (sf); previously on Oct 8, 2024 Downgraded to Caa2 (sf) Underlying Rating: Upgraded to Caa2 (sf); previously on Mar 18, 2016 Downgraded to Ca (sf) RATINGS RATIONALE The upgrade reflects the repayment history and Moody's revised loss-given-default expectation for the rated notes. While Class A has a high likelihood of taking a loss without the support of MBIA Corp, the notes have already received a repayment of 87.2% of their original balance, including a payment of USD4.8 million as of February 2025, provided by the MBIA Corp. acting as insurer. The level of loss for Class A before considering any payments from the insurer is commensurate with the upgrade to Caa2 (sf). Moody's expectations of loss-given-default assesses losses experienced and expected future losses as a percent of the original bond balance. Moody's affirmed the rating of Class A after accounting for the financial insurance provided by MBIA Corp. The Insurance Financial Strength (IFS) rating of MBIA Corp is Caa2, with a negative outlook. The principal methodology used in this rating was "Residential Mortgage-Backed Securitizations" published in October 2024. The analysis undertaken by Moody's at the initial assignment of a rating for RMBS securities may focus on aspects that become less relevant or typically remain unchanged during the surveillance stage. Factors that would lead to an upgrade or downgrade of the rating: Factors or circumstances that could lead to an upgrade of the rating include (1) a decrease in sovereign risk, (2) performance of the underlying collateral that is better than Moody's expected, (3) an increase in available credit enhancement, (4) improvements in the credit quality of the transaction counterparties. Factors or circumstances that could lead to a downgrade of the rating include (1) an increase in sovereign risk, (2) performance of the underlying collateral that is worse than Moody's expected, (3) deterioration in the notes' available credit enhancement and (4) deterioration in the credit quality of the transaction counterparties. ===================== P U E R T O R I C O ===================== ALUMAX INC: Cannot Renege on Stipulation with CEFI, Court Says -------------------------------------------------------------- Judge Maria de los Angeles Gonzalez of the United States Bankruptcy Court for the District of Puerto Rico denied Alumax Inc.'s motion for relief from an order that approved a stipulation it entered into with Commercial Equipment Finance, Inc. regarding contested matters between the parties. On Dec. 6, 2024, Alumax filed a petition for relief under Chapter 11. Debtor listed in schedule A/B four 2021 Isuzu NPR valued at $135,980 and two units of 2021 Ford Transits valued at $45,828. On schedule D, Alumax listed CEFI as a secured creditor with liens in the amounts of $48,099.44 over the Ford Transits and $141,037.30 over the Isuzu NPRs. On Jan. 2, 2025, CEFI filed: -- secured claim number 1, in the amount of $31,446.83; -- secured claim number 2, in the amount of $23,516.75; -- secured claim number 3, in the amount of $42,371.70; and -- secured claim number 4, in the amount of $269,257.20. On March 11, 2025, Alumax filed an Objection to Proof of Claim #2. Alumax objected CEFI's claim number 2 to the extent it asserted secured status. On April 21, 2025, CEFI filed an amended secured claim number 2-2, for the secured amount of $23,516.75. CEFI also filed a Reply to Debtor's Objection to Claim #2, on May 2, 2025. On June 18, 2025, Alumax filed an Objection to Proof of Claim #2-2. It objected to the amended claim 2-2 and reasserted that CEFI's claim should be disallowed in its entirety or, in the alternative, reclassified as an unsecured claim. On March 7, 2025, CEFI filed a Motion for Relief of the Automatic Stay Under 11 U.S.C. Sec. 362. CEFI requested the lifting of the automatic stay as a result of Alumax's failure to provide adequate protection to the creditor and its failure to continue making post petition payments, despite its retention and use of CEFI's loan collateral. On April 11, 2025, Alumax and CEFI filed a Stipulation Regarding Contested Matters Between Debtor and CEFI, resolving the Motion for Relief from Stay filed by CEFI on March 7. 2025, among other matters. On May 6, 2025, the Court entered an order approving the Stipulation, as the objection period elapsed and no objections were filed. On June 17, 2025, Alumax filed the Motion to Set Aside Order pursuant to Fed. R. Bankr. P. 9024 and Fed. R. Civ. P. 60(b)(5) . Alumax alleged that it operates in the aluminum manufacturing industry and relies heavily on imported aluminum to sustain its operations. As a result, its cost structure is especially vulnerable to international trade policy shifts, particularly federal tariff actions. Alumax alleged that the increase in aluminum tariffs from 10% to 25% enacted by the U.S. Government in February 2025, and the Presidential Proclamation issued on June 3, 2025, which doubled aluminum tariffs from 25% to 50% ad valorem, represented a 400% increase in aluminum tariffs from 10% rate that existed when the present bankruptcy case began. Alumax argued that by the time the Stipulation was negotiated and approved, the full financial effect of these new policies had not yet fully materialized. Debtor added that under these conditions, it is no longer able to sustain the payment obligations imposed by the Stipulation. Additionally, it alleged that the vehicles referred to in the Stipulation, specifically the Ford Transit and Isuzu vehicles, are no longer essential to its operations. It argued that the change in circumstances created by the increase in tariffs make the payment obligations agreed to in the Stipulation no longer feasible and sustainable. Therefore, relief from the order approving the Stipulation is merited under Fed. R. Civ. P. 60(b)(5) and (6). On July 9, 2025, CEFI filed Motion Requesting Dismissal or Conversion to Chapter 7 and Opposition to Motion to Set Aside Order Granting Stipulation and Request for Relief from Stay. CEFI argued that Debtor's request for relief from the order approving the stipulation should be denied; that the present case should be dismissed or converted to Chapter 7 and requested that relief from the automatic stay be granted. Regarding the opposition to the motion to set aside the order granting the Stipulation, CEFI argued that Alumax has not met the strict burden of proof required to justify the granting of relief in its favor. It alleged that the potential changes in U.S. trade policy, including increasing tariffs could be anticipated or reasonably expected when Alumax filed its petition. Further, one month prior to the filing of the Stipulation, the federal government had already raised tariffs on aluminum and steel products. CEFI asserted that the cases cited by Alumax state that relief under Fed. R. Civ. P. 60(b)(5) and (6) is reserved for exceptional and unforeseeable circumstances that render the enforcement of an order manifestly unjust. It concluded that the tariff fluctuations cited by Alumax are precisely the kind of foreseeable risks inherent in the aluminum trade at the time the Stipulation was filed. Therefore, CEFI argued that Alumax failed to meet its heavy burden to show the "extraordinary circumstances" that would justify setting aside a final, court approved agreement. The Court agrees with CEFI. Debtor is moving to set aside the order granting the Stipulation under Rule 60, but what it seeks is that the Court relieve them from its obligations under the Stipulation. However, it is undisputed that the terms of the Stipulation were negotiated at arm's-length and the order granting the Stipulation was entered after due notice was given to all parties and having received no objections to the same. The Court finds there are no extraordinary circumstances present in this case and the increase in tariffs is part of the normal risks related to this type of business. Judge Gonzalez explains, "In fact, Debtor recognizes that by March 12, 2025, tariffs on steel and aluminum products had already been raised. The Stipulation entered into willingly and voluntarily by the parties was filed on April 11, 2025, and approved by the Court on May 6, 2025. Hence, Debtor cannot argue that the increase in tariffs was unforeseeable when the Stipulation was filed or that the hardships caused to its business operations by said increase are not part of the normal risks related to the Stipulation. As such, the increase in tariffs cited by Debtor do not constitute extraordinary or surprising circumstances that warrant the relief from the order approving the stipulation. On the contrary, the relief requested by Debtor would cause unfair prejudice to CEFI, eliminating its rights under the stipulation." The Stipulation also provides that the parties believe that the proposed term of the agreement are fair and reasonable under the circumstances. Considering the date that the Stipulation was filed, these circumstances included the potential increase in aluminum and steel tariffs imposed by the U.S. Government. Alumax has failed to show extraordinary circumstances that warrant the relief of an order entered to approve a stipulation negotiated, drafted and agreed to by the parties, the Court finds. In conclusion, the Motion to Set Aside Order is denied and the Motion Requesting Dismissal or Conversion to Chapter 7 and Opposition to Motion to Set Aside Order Granting Stipulation and Request for Relief from Stay is partially granted regarding the opposition to the request to set aside the order approving the Stipulation. As scheduled, a hearing to consider CEFI's Request for Dismissal or Conversion to Chapter 7 under 11 U.S.C. Sec. 1112(b) and any oppositions thereto, and Alumax's Objection to Proof of Claim #2 2 will be held on July 30, 2025 at 10:00 a.m. at the U.S. Bankruptcy Court for the District of Puerto Rico, Jose V. Toledo Federal Building and Courthouse, 300 Recinto Sur, Third Floor, Courtroom # 3, San Juan, Puerto Rico. A copy of the Court's Opinion and Order dated July 21, 2025, is available at https://urlcurt.com/u?l=x13ZQn from PacerMonitor.com. About Alumax Inc. Alumax Inc. manufactures aluminum doors and windows with its manufacturing infrastructure located in San Sebastian, Anasco, Ponce and San Domingo. Alumax Inc. sought relief under Chapter 11 of the U.S. Bankruptcy Code (Bankr. D. P.R. Case No. 24-05312) on December 6, 2024. In the petition filed by Frank J. Jimenez, Cruz as president, the Debtor reports total assets of $416,851 and total liabilities of $2,954,034. The Debtor is represented by Javier Vilarino, Esq. at VILARINO AND ASSOCIATES, LLC. ********* 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. 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