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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, August 4, 2025, Vol. 26, No. 154
Headlines
A R G E N T I N A
ARGENTINA: Milei's Shake Up Splits Nation Along Financial Lines
PAMPA ENERGIA: S&P Affirms 'B-' Rating, Outlook Stable
B R A Z I L
BRAZIL: Pres. Trump Signs Order to Justify 50% Tariffs on Brazil
BRAZIL: Rare Earth Exports to China Triple, Shift Away from U.S.
BRAZIL: Sees 35.9% of Exports to U.S. Facing Steeper Tariff
HAITONG BRASIL: S&P Affirms 'BB+/B' ICRs, Alters Outlook to Neg.
C O L O M B I A
ATP TOWER: S&P Alters Outlook to Stable, Affirms 'BB-' ICR
BANCO GNB: Moody's Affirms 'Ba2' LT Deposit Rating, Outlook Stable
G U A T E M A L A
[] GUATEMALA: Tops List of Informal Employment Rate at 83.2.%
J A M A I C A
JAMAICA: Consumer Goods Import Bill Hits US$519.4 Million
P U E R T O R I C O
HOGAR LUZ: Seeks Subchapter V Bankruptcy in Puerto Rico
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A R G E N T I N A
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ARGENTINA: Milei's Shake Up Splits Nation Along Financial Lines
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Sonia Avalos at AFP News reports that Javier Milei's Argentina is
undergoing a boom in car sales, real estate and flights are fully
reserved. But among low-income sectors, consumption has fallen,
employment is precarious and supermarket bills are being paid on
credit.
The Milei government has slashed inflation from an annual 117
percent last year to 1.6 percent in June while achieving a historic
fiscal surplus, according to AFP News. But this has come at the
cost of devaluing the peso and removing subsidies, making access to
housing, health and education more expensive, the report notes.
The plunging consumption seen in 2024 picked up a bit as from May,
but in a fragmented fashion - while the demand for consumer
durables from high-income households soared, mass consumption stays
rock-bottom, the report says.
Nine of 10 households are in debt and 12.8 percent in arrears, the
report discloses.
Two Faces
The first half of this year has seen 78 percent more cars sold than
in the first six months of 2024 -- "The best six months in the last
seven years," according to Sebastian Beato, the president of ACARA
(Asociacion de Concesionarios de Automotores de la Republica
Argentina) car dealers association, the report discloses.
Loans, lower interest rates and tax cuts, promotions and government
policies permitting so-called "mattress dollars" to return to the
market have all contributed, the report discloses.
Real-estate purchases and sales have also revived, up 22 percent in
May in Buenos Aires as against the same month last year, the report
says.
The first four months of the year saw more mortgages signed than in
all 2024, although barely a quarter of lenders could meet
requisites of job and income stability, the report relays.
"The change of government was very positive for this sector," said
Diego Sardano, the third generation of his family to head a
real-estate agency in Lanus in the southern suburbs of Greater
Buenos Aires, explaining, the report relays.
"Dollar stability and a supply of credit not available since 2017
have proved favourable. With the previous government we could pass
months and months without a sale and now we have five a month," he
added.
It is peaking because "people's purchasing power is not
increasing," said Sardano, the report relays.
A strong peso in relation to the dollar favours those who travel
abroad but hurts local tourist operators whose reservations have
been plunging, the report notes.
Brazil has become cheap for Argentines and the aeroplanes flying
there "take off full," said Sandra Peliquero, a 30-year veteran of
the travel industry, the report discloses.
Between January and April some six million Argentines travelled
abroad, 70 percent more than the same period last year, while only
two million foreign visitors entered for a drop of 21 percent, the
lowest figure in the last decade, the report says.
For The Few
But only a select group of the population is attending this
consumer party in Argentina. Barely six percent belong to the upper
class while half are in the lower classes, earning less than US$960
a month, the report relays.
The middle class, once the main consumer engine, is the worst-hit
by the Milei government's "chainsaw" austerity, the report notes.
A study by the Moiguer consultancy firm highlights that the
economic recovery after months of recession (including an annual
contraction of minus 1.8 percent in 2024) does not benefit
everybody "and aggravates the current inequality," the report
discloses.
Half the population say that they cannot reach the end of the month
while 30 percent postpone or cut out expenses to pay for basic
services, the report notes.
"The licensing of upmarket cars is on the rise while less food is
being consumed, sweeping away the middle class," commented Rodolfo
Aguilar, the secretary-general of ATE state workers union, which
has suffered the loss of over 40,000 jobs since Milei took office
in December 2023, the report recalls.
Having a job does not guarantee reaching the end of the month
because "wage recovery is minimal against the aggressive increases
in taxation, gas, electricity, transport and schooling," said
Fernando Savore, who heads a federation grouping shopkeepers in
Buenos Aires Province, the report relays.
"Much of the money earned by workers goes on those obligations.
Some things are not sold any more like sweets and desserts. People
buy the necessary, pasta and tomato puree and nothing more," he
said with many paying on credit, the report relays.
"As shopkeepers we do not want any more inflation because it knocks
us out but now we hope that things sort themselves out," he added,
notes the report.
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.
Moody's Ratings on July 17, 2025, upgraded Argentina's
long-term foreign currency and local currency issuer ratings to
Caa1 from Caa3 and changed the outlook to stable from positive.
The upgrade reflects Moody's views that the extensive
liberalization of exchange and (to a lesser extent) capital
controls, alongside a new International Monetary Fund (IMF)
program, support the availability of hard currency liquidity and
ease pressure on external finances. This reduces the likelihood of
a credit event. In January 2025, Moody's raised Argentina's local
currency ceiling to B3 from Caa1 and the foreign currency ceiling
to Caa1 from Caa3.
Fitch Ratings, on May 12, 2025, upgraded Argentina's Long-Term
Foreign-Currency and Local-Currency Issuer Default Rating (IDR) to
'CCC+' from 'CCC'. 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+'. DBRS, Inc. upgraded Argentina's Long-Term Foreign and Local
Currency Issuer Ratings to B (low) from CCC in November 2024.
PAMPA ENERGIA: S&P Affirms 'B-' Rating, Outlook Stable
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S&P Global Ratings affirmed its 'B-' rating on Pampa Energia S.A.,
which remain capped by Argentina's transfer and convertibility
(T&C) assessment.
S&P also revised upward Pampa's stand-alone credit profile (SACP)
to 'bb-' from 'b+'. The outlook is stable mirroring the outlook on
the sovereign.
The development of the Rincon de Aranda shale oil field will bring
considerable revenue and EBITDA growth and improve production
diversification into liquids.
In the first few months of the year, Pampa drilled five pads,
fracked four, and tied in two, ramping up shale oil production in
Rincon de Aranda, and expects to tie-in seven pads per year in 2025
and 2026. Therefore, S&P expects it will reach 20 thousand barrels
per day (Kbpd) of shale oil by the end of 2025, and around 40 Kbpd
at the end of 2026, before reaching a plateau of 45 Kbpd in the
first half of 2027. This will bring total oil and gas production to
135 thousand barrels of oil equivalent per day (Kboepd) in 2027, up
from 78 Kboepd in 2024.
The company has already secured evacuation capacity for additional
production, through Oldelvar Duplicar+ (Duplicar+) and Vaca Muerta
Oil Sur (VMOS). In April 2025, the construction of Duplicar+ was
completed and Pampa has secured additional transportation capacity
of 20 Kbpd for 2025 and 2026 for this pipeline. In addition, Pampa
holds 11% in the VMOS project and has a contract to transport 50
Kbpd, including storage and loading. VMOS is already in
construction and expects to be operating by the end of 2026. In
early July this year, VMOS secured $2 million in loans to finance
the construction.
S&P said, "We expect natural gas production to remain around 12
million cubic meters of gas per day (Mcmpd) in 2025 and 2026.
However, we expect natural gas production to accelerate growth in
2027, to about 14.5 Mcmpd, as the Sothern Energy LNG project
becomes operational, in which Pampa currently holds a 20% stake."
The project will handle 27 Mcmpd, of which Pampa will supply up to
6 Mcmpd, representing a 50% increase from its current average
production.
S&P said, "Consequently, we expect exploration and production (E&P)
EBITDA to increase to $384 million in 2025 (from $371 million in
2024), $708 million in 2026, and triple to $1.1 billion in 2027.
Pampa plans to export 100% of revenues related to Rincon de Aranda,
improving its access to foreign currency and decreasing its
exposure to Argentina. In addition, this will improve
diversification in the E&P business, since currently around 90% of
the production relates to natural gas and we expect oil to
represent 30% by 2027.
"We expect stable cashflows from Pampa's power generation unit.
Decreasing inflation along with lower peso depreciation will
positively weigh on legacy power generation contracts, currently
representing about 70% of generation capacity, which are exposed to
local currency remuneration. From February 2024, prices in ARS rose
136%, outpacing inflation (96%) and the peso's depreciation (28%).
For the remainder of the year, we expect prices in pesos to outpace
inflation, which, combined with higher volumes due to new installed
capacity from the commissioning of PEPE 6 (adding 140 megawatts
[MW]), will allow Pampa to improve EBITDA coming from the
generation unit to around $380 million in 2025. We expect EBITDA
from this business to remain relatively stable, between $380-$400
million in the following two years as Pampa does not have any new
power generation projects in its pipeline."
Pampa successfully executed liability management. During the past
year, the company has actively worked on liability management. On
May 20, 2025, Pampa reopened its international bond maturing in
December 2034, for $340 million, with a 7.875% interest rate, to
redeem notes due in April 2029. With this transaction, the company
was able to extend its maturity profile, reaching an average life
of 6.1 years. As a result, the company faces a very manageable
amortization profile with the next meaningful debt maturity only
expected by 2031.
S&P said, "We expect leverage to remain below 2.5x despite a heavy
investment pipeline for the next three years. The Rincon de Aranda
shale oil project will require further investment of around $1.5
billion in the next three years, keeping capex between $1
billion-$1.1 billion in the next two years, and around $900 million
in 2027. Therefore, we now expect negative free operating cash flow
of about $400 million in 2025, narrowing to $300 million in 2026,
and only turning positive by 2027.
"However, as previously mentioned, the ramp-up of Rincon de Aranda
will result in rapid EBITDA growth, which should allow Pampa's
leverage metrics to remain comfortable for the rating level. We
forecast S&P Global Ratings-adjusted gross debt to EBITDA to
decrease to about 2.2x in 2025 and remain between 1.5x-1.0x in the
following two years.
"Argentina's T&C risk continues to limit the rating. The 'B-'
rating on Pampa is lower than its 'bb-' SACP. We continue to cap
our ratings on Pampa by our 'B-' T&C assessment of Argentina, since
Pampa's operations are fully based in Argentina and currently only
about 15% of revenues comes from exports. Although the risk of the
sovereign interfering with the ability of domestic entities to
access, convert, and transfer money abroad has diminished,
Argentina's economic conditions remain fragile and external
liquidity is a weakness. Our SACP on Pampa reflects its status as a
strong player in the Argentine energy sector, and the company's low
leverage and ample liquidity, tempered by its exposure to the
country's fragile economy and volatile regulatory framework.
"The stable outlook mirrors that on Argentina and reflects the
country's improving external conditions (although still fragile)
and the potential for policy swings or a deepening of the country's
macroeconomic imbalances. We also expect Pampa to keep relatively
conservative credit metrics, with debt-to-EBITDA below 2.5x, while
its production rises, maintaining a comfortable debt maturity
profile.
"We could lower the rating on Pampa following a downward revision
T&C assessment. Alternatively, we could revise downward the SACP if
cash flow deficits or weaker market access threaten the company's
financial flexibility or if debt to EBITDA remains consistently
above 3x."
An upgrade would require the easing of T&C risks, assuming all
other factors are unchanged.
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B R A Z I L
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BRAZIL: Pres. Trump Signs Order to Justify 50% Tariffs on Brazil
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The Associated Press reports that President Donald Trump signed an
executive order Wednesday, July 31, to impose his threatened 50%
tariffs on Brazil, setting a legal rationale that Brazil's policies
and criminal prosecution of former President Jair Bolsonaro
constitute an economic emergency under a 1977 law.
Trump had threatened the tariffs July 9 in a letter to President
Luiz Inacio Lula da Silva, notes the report. But the legal basis of
that threat was an earlier executive order premised on trade
imbalances being a threat to the U.S. economy, it adds. But America
ran a $6.8 billion trade surplus last year with Brazil, according
to the U.S. Census Bureau.
A statement by the White House said Brazil's judiciary had tried to
coerce social media companies and block their users, though it did
not name the companies involved, X and Rumble, AP relates.
According to the report, Trump appears to identify with Bolsonaro,
who attempted to overturn the results of his 2022 loss to Lula.
Similarly, Trump was indicted in 2023 for his efforts to overturn
the results of the 2020 U.S. presidential election.
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.
BRAZIL: Rare Earth Exports to China Triple, Shift Away from U.S.
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Richard Mann at Rio Times Online reports that Brazil's exports of
rare earth minerals to China shot up to $6.7 million in the first
half of 2025, tripling the full-year total from 2024.
Data from the China-Brazil Business Council shows that almost all
of this growth went directly to China, not to the United States,
according to Rio Times Online.
These rare earths -- key materials for high-tech devices and
renewable energy -- are now mostly fueling Chinese industry, the
report relays.
While rare earths make up a small share of Brazil's overall
exports, their significance is huge, the report discloses.
The US Geological Survey ranks Brazil as holding the world's
second-largest reserves of these minerals, though actual production
is still tiny compared to China, the global leader, the report
says.
Still, China increased its purchases of Brazilian rare earths
sevenfold in the first quarter alone, seeking new sources as trade
tensions with the US get worse, the report notes.
At the same time, China invests across Brazil's major industries,
from mining to digital infrastructure, the report discloses. China
now accounts for most of Brazil's rare earth demand and around 84%
of its hybrid vehicle imports, the report relays.
Brazil's Mixed Signals Amplify U.S. Tariff Conflict
According to Rio Times Online, Brazil's overall trade balance with
China has narrowed, as Brazilian imports from China jumped by over
20%, hitting $35.7 billion, even while Brazil's exports shrank.
Brazil's government, led by President Lula, has signed off on
dozens of new deals with China, deepening ties across mining,
technology, and public works, the report discloses.
Meanwhile, US-Brazil relations have cooled. The US set new tariffs
on Brazilian imports and launched trade probes, signaling concern
about losing influence in the region, the report says.
China's expanding role in Brazil means more than just business
deals—it gives China new leverage in global technology and energy
supply chains, the report adds.
About Brazil
Brazil is the fifth largest country in the world and third largest
in the Americas. Luiz Inacio Lula da Silva won the 2022 Brazilian
general election. He was sworn in on January 1, 2023, as the 39th
president of Brazil, succeeding Jair Bolsonaro.
In October 2024, Moody's Ratings upgraded the Government of
Brazil's long-term issuer and senior unsecured bond ratings to Ba1
from Ba2, the senior unsecured shelf rating to (P)Ba1 from (P)Ba2;
and maintained the positive outlook. S&P Global Ratings raised on
Dec. 19, 2023, its long-term global scale ratings on Brazil to
'BB' from 'BB-'. Fitch Ratings affirmed on Dec. 15, 2023, Brazil's
Long-Term Foreign-Currency Issuer Default Rating (IDR) at 'BB' with
a Stable Outlook. DBRS' credit rating for Brazil was last reported
at BB with stable outlook at July 2023.
BRAZIL: Sees 35.9% of Exports to U.S. Facing Steeper Tariff
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Reuters reports that Brazil estimates that 35.9% of its exports to
the U.S. by value will be hit by a steep 50% tariff under a new
executive order by Donald Trump's administration, Vice President
Geraldo Alckmin said, emphasizing efforts to reverse the levies on
key goods such as coffee.
The estimate confirms earlier reporting by Reuters, with sources
saying 44.6% of local products will be subject to the preexisting
10% tariff, while the remaining 19.5% will fall under tariffs the
U.S. applies globally, ranging from 25% to 50%, according to 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.
HAITONG BRASIL: S&P Affirms 'BB+/B' ICRs, Alters Outlook to Neg.
----------------------------------------------------------------
S&P Global Ratings revised its outlook on Haitong Banco de
Investimento do Brasil S.A. (Haitong Brasil) to negative from
stable. At the same time, S&P affirmed the 'BB/B' long- and
short-term issuer credit ratings and the 'brAAA/brA-1+ ' long- and
short-term national scale ratings.
On July 30, 2025, S&P Global Ratings revised its outlook on
Portugal-based Haitong Bank S.A. (HB) to negative from stable and
affirmed the 'BB+/B' long- and short-term issuer credit ratings.
This followed uncertainty surrounding HB's importance within the
new Chinese entity Guotai Haitong Securities Co. Ltd.'s (GTHT)
international strategy.
Due to an ongoing strategic restructuring and global integration,
Guotai Haitong may reassess or streamline its international
operations, including in Europe. Following the consolidation of the
newly merged entity Guotai Haitong Securities Co. Ltd. (GTHT),
between Guotai Junan Securities Co., Ltd. and Haitong Securities
Co., Ltd. (HTS), there is now uncertainty regarding Haitong Bank
(HB)'s alignment with its new owner's overseas strategy. This is
because GTHT is currently focused on integrating the recently
merged HTS, which requires more time. HB, based in Portugal,
represents less than 2% of the merged group's equity, has limited
profitability, and operates in a different segment. This raises
questions about the bank's consistency with GTHT's international
strategy as it integrates its overseas subsidiaries. While HB is
currently considered a strategically important subsidiary and is
expected to receive extraordinary support from GTHT, this could
change if it no longer aligns with GTHT's long-term strategy,
potentially leading to a revision of its group status and a
decrease in the support factored into our rating.
S&P said, "We still see Haitong Brasil as a key subsidiary for HB,
but this could change based on a potential strategic reassessment
by the GTHT group regarding its cross-border subsidiaries. The
possible restructuring of GTHT group's international operations
creates uncertainty about the significance of HB and Haitong
Brasil. This, along with Haitong Brasil's ongoing struggle for
profitability since 2022--despite efforts to streamline
operations--has led us to no longer consider it a core subsidiary
of HB. Nevertheless, we continue to regard Haitong Brasil as a
highly strategically important entity for HB due to still-strong
synergies, Chinese and Portuguese representatives from HB being
part of the board and strategic committees of Haitong Brasil, and
part of the operations of the Brazilian bank being booked under the
Portuguese parent company. We also note the parent's long-term
commitment to the Brazilian operations, and our view that HB would
support the bank under any foreseeable circumstances, except in a
sovereign stress scenario. As of year-end 2024, Haitong Brasil
still represented 12% of HB's equity and continues to serve as the
central hub for the group's operations in Latin America.
"We revised the outlook on Haitong Brasil to negative because its
creditworthiness is tied to that of its parent. Because of our
expectation of a possible downward revision of HB's group status
for GTHT (which would lead to a downgrade of the Portuguese bank),
we revised the outlook on HB to negative and, in turn, the global
and national scale rating outlooks on Haitong Brasil to negative.
"The negative outlook on our ratings on Haitong Brasil for the next
12 months mirrors the outlook on our ratings on its direct
controller, HB, given its importance as a highly strategic
subsidiary of the Portuguese parent.
"Despite the uncertainty surrounding GTHT's new international
strategy, we still expect the Brazilian subsidiary to remain fully
aligned with HB's strategy in Latin America, and to continue
representing a significant part of the consolidated revenue and
balance sheet of the Portuguese controller. Therefore, we believe
the group will provide support to the bank under any foreseeable
circumstances, except in the event of sovereign distress.
"We could lower the ratings on Haitong Brasil if we deem either the
Brazilian bank or HB to have become less important to the
international group overall. Moreover, we could lower the ratings
on Haitong Brasil if we lowered the sovereign ratings on Brazil.
"We could raise the global scale ratings on Haitong Brasil
following the same action on both HB and on Brazil, provided that
we believe the group's strategy toward Latin America and HB is
unchanged, and we still deem Haitong Brasil a highly strategic
subsidiary of HB. The bank is already at the highest national
rating scale."
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C O L O M B I A
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ATP TOWER: S&P Alters Outlook to Stable, Affirms 'BB-' ICR
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On July 31, 2025, S&P Global Ratings revised the outlook on Latin
American tower and fiber operator ATP Tower Holdings LLC (ATP) to
stable from negative, affirmed the 'BB-' issuer credit and
issue-level ratings on the company and its debt, and removed the
ratings from under criteria observation (UCO).
The stable outlook reflects S&P's view that the company will
maintain adjusted debt to EBITDA at about 5.5x and funds from
operations (FFO) to debt above 9% through steady growth with low
incremental debt requirements, based on prudent capital expenditure
(capex) and maximizing co-location opportunities.
ATP has demonstrated steady and resilient growth amid a highly
competitive telecommunications market in the Andean region. Fiscal
2024 was the company's fifth consecutive year with double-digit
revenue growth, on the back of continuous asset deployment and an
acceleration of co-location.
ATP maintains a resilient growth and deleveraging track record amid
a highly competitive but still underpenetrated telecom market in
the Andean region. On July 23, 2024, S&P revised its rating outlook
to negative, which reflected its view that the company's revenue
and cash flow growth could be hindered by slower investments by
carriers in the countries where it operates. This was due to
clients' lower liquidity and an overall delay in the adoption of
new technologies, such as 5G, at that time.
Nevertheless, for first-quarter 2025 (ended March 31), ATP
maintained double-digit revenue growth, improved profit margins,
and posted a steady reduction in adjusted leverage. This was in
line with the company's guidance for its top and bottom line
despite headwinds for carriers, while it also reduced leverage
quicker than S&P forecasts through lower debt issuance than it
expected. S&P believes this momentum will continue through 2025,
based on the following ongoing factors:
-- An expected expansion of the asset portfolio by over 350 sites
and nearly 1,000 kilometers (km) of fiber in 2025, representing an
increase of about 8% for each segment.
-- Favorable demand in Colombia, despite some headwinds for
telecom operators due to fierce price competition and uncertainty
regarding merger and acquisition (M&A) activity, which have been
somewhat offset by the transition into 5G boosting tower
construction, and co-location opportunities in fiber.
-- Ample room to grow for independent operators in the region,
given they maintain a relatively lower market share than their
peers in more mature markets, while mobile network operators (MNOs)
continue to hold a large portion of the region's infrastructure;
and
-- Ongoing under-penetration in the Andean region for both
wireless and broadband services, which points to long-term
expansion opportunities.
S&P said, "Ultimately, we believe these factors mean steady EBITDA
and FFO growth, with a high degree of visibility, resulting in
improving credit metrics and a stable financial risk profile
through the business cycle, while ATP continues to capitalize on
ongoing expansion demand. In this sense, we believe that ATP has
broadly met its operational and financial targets in 2024 and for
the beginning of 2025 and forecast it will continue to do so
despite challenges for telecom operators in its core markets.
"We forecast the company will maintain adjusted leverage below 6.0x
and to reach positive cash flow in the next three years. In our
view, the company's site portfolio growth, fiber deployment, and
co-location in both business segments should continue to translate
into enhanced EBITDA (up 24% for fiscal 2024). On top of this,
after the issuance of its $500 senior unsecured notes in February,
ATP limited the transaction to refinancing purposes and didn't
incur additional debt. This ultimately led to adjusted debt to
EBITDA below the 6.0x threshold that we revised in 2024 for a
potential downside, with even an improvement to 5.3x on an
annualized basis for first-quarter 2025.
"Going forward, we forecast ATP will continue to enhance EBITDA,
offsetting modest increases in debt to fund capex. These
investments can be funded through the available balance under the
company's $120 million committed revolving credit facility (RCF),
which was also extended to 2029. This is not only positive for our
expectations of steady deleveraging, with adjusted debt to EBITDA
set to consolidate below 5.5x in the next 12-18 months, but also
ensures ample liquidity headroom for the next three years. Given
the predictability of earnings, we believe this financial position
provides increased headroom to the company's credit metrics.
"We have revised our outlook triggers based on the application of
our updated "Sector-Specific Corporate Methodology". On July 7,
2025, S&P Global Ratings published an updated version of its
"Sector-Specific Corporate Methodology" criteria, to incorporate
specific considerations for digital infrastructure companies,
including tower, fiber, and data center operators. As a result, we
are now incorporating FFO to debt as a relevant core metric to our
analysis of ATP's financial risk profile. This is in line with our
view that tower companies typically pay significant debt service
costs due to their stable cash flows and ability to support higher
debt loads. Our upside trigger for debt to EBITDA has also been
revised. We believe these changes are testament to the company's
earnings predictability and prudent approach to debt, on the back
of take-or-pay contracts, with inflation-linked escalators, cost
pass-through mechanisms, and a long-term average remaining life, as
well as due to ATP's built-to-suit approach toward expansion,
rather than a speculative asset deployment strategy. These factors
support our view of the company's credit metric predictability.
"The stable outlook on ATP reflects our view that the company will
maintain adjusted debt to EBITDA of about 5.5x and FFO to debt
above 9%, because of a prudent approach to capex requirements to
meet growing demand for tower and fiber capacity, and favorable
co-location prospects with new tenants.
"The outlook also reflects our view that growth opportunities in
the Andean region will support ATP as its tower and fiber networks
continue to expand and the region transitions to 5G, despite some
headwinds for telecom operators."
S&P could downgrade ATP in the next 12 months if:
-- Leverage increases so that we expect debt to EBITDA to remain
above 6.0x or FFO to debt to fall below 9.0% consistently, while
S&P doesn't see a clear path for ATP to post positive free
operating cash flow (FOCF);
-- Financial policy becomes more aggressive, resulting in material
and sudden changes to credit metrics or a deterioration of
liquidity; or
-- A weakened business risk profile, due to hindered expansion
capabilities for ATP. These would result in a delay in growth and
cash flow forecasts.
S&P could upgrade ATP in the next 12 months if:
-- The company reduced its leverage so that debt to EBITDA falls
below 4.5x, consistently; or
-- ATP generates positive free operating cash flow (FOCF) while
maintaining debt to EBITDA below 6.0x and FFO to debt above 9%. The
latter would stem from material and stable revenue growth, with
improved EBITDA margins through co-location.
At the same time, an upgrade would require ATP to maintain an
adequate liquidity position.
BANCO GNB: Moody's Affirms 'Ba2' LT Deposit Rating, Outlook Stable
------------------------------------------------------------------
Moody's Ratings has affirmed Banco GNB Sudameris S.A.'s (GNB
Sudameris) long- and short-term local and foreign currency deposit
ratings at Ba2 and Not Prime, respectively, following the
affirmation of the bank's Baseline Credit Assessment (BCA) and
Adjusted BCA at ba3. Moody's also affirmed GNB Sudameris'
subordinate debt ratings at B1 and B2 (hyb), the long- and
short-term local and foreign currency Counterparty Risk Ratings of
Ba1 and Not Prime, respectively, as well as the Counterparty Risk
Assessments of Ba1(cr) and Not Prime(cr), for long and short-term,
respectively. The outlook on the long-term deposit ratings remains
stable.
RATINGS RATIONALE
The affirmation of GNB Sudameris' BCA at ba3 reflects the bank's
consistent track record of lower-than-average capitalization
compared to peers, along with still-challenged profitability
metrics. According to Moody's preferred measure, tangible common
equity to risk-weighted assets (TCE/RWA), the capital remained low
at 6.65% in March 2025. In addition, the bank's regulatory Tier 1
capital ratio was 8.14%, the lowest among rated banks in Colombia.
The bank's bottom-line performance in the first quarter of 2025 was
adversely affected by a sharp increase in loan-loss provisions,
which rose by 148.8% year-over-year and accounted for 59.2% of
pre-provision income. While the net income to tangible assets
(NI/TA) ratio was 1.25% in March 2025, up from 0.47% one year
earlier, the bank's profitability for the quarter was primarily
bolstered by nonrecurring earnings from the valuation of equity
instruments, specifically shares of Grupo Nutresa S.A. (Baa3
stable). Nonetheless, between 2021 and 2024, the bank recorded low
bottom-line profitability, as indicated by an annual average NI/TA
ratio of 0.59%.
These challenges to the bank's BCA are partly mitigated by steady
asset quality metrics observed over the past two years, including
the maintenance of adequate loan loss buffers. As of March 2025,
the bank's problem loan ratio, measured as Stage 3 loans under IFRS
to total loans, stood at 3.04%, slightly lower than the average
annual ratio of 3.36% from 2021 to 2024. GNB Sudameris' asset risk
profile reflects its focus on low-risk corporate borrowers, who
accounted for approximately 66% of total loans in March 2025, along
with inherently secured payroll-deductible loans, which constituted
roughly 28% of total loans. As of the same date, GNB Sudameris
maintained loan-loss reserves covering approximately 99.8% of Stage
3 loans and 171.7% of loans overdue by more than 90 days. In the
last two quarters, the bank has increased provisions for loan
losses to cover its commercial loan book, cushioning its capital
against potential losses and credit risk from high borrower
concentration in relation to TCE.
GNB Sudameris' ba3 BCA is supported by the bank's high share of
granular and low-cost demand and savings deposits, which
constituted 47.7% of its total funding as of March 2025.
Additionally, the bank has maintained a strong liquidity profile
over the past five years, as shown by a liquid banking assets to
tangible banking assets ratio of 41.9% in March 2025.
GNB Sudameris' Ba2 deposit ratings reflect Moody's assessments of a
moderate probability of support from the Government of Colombia
(Baa3 stable) in the event of stress, resulting in a one-notch
uplift from the bank's ba3 BCA. This support assumption is based on
the bank's deposit market share of approximately 3.6% in Colombia
as of March 2025.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
An upgrade of GNB Sudameris' BCA would be contingent upon the bank
demonstrating a strong and sustained improvement in both
capitalization and profitability metrics. Consistent reporting of
asset quality metrics at low levels, coupled with growth in loan
origination, could also positively impact its BCA and deposit
ratings.
Conversely, GNB Sudameris' BCA could face a downgrade if the bank
experiences sudden deterioration in asset quality, resulting in
negative effects on profitability and capital position during the
upcoming outlook period. The bank's ratings would remain unaffected
by a downgrade of Colombia's sovereign rating, which is considered
unlikely at this time given the stable outlook on the rating.
The principal methodology used in these ratings was Banks published
in November 2024.
GNB Sudameris' "Assigned BCA" score of ba3 is positioned two
notches below the "Financial Profile" initial score of ba1. This
adjustment reflects the bank's asset risks and inherently low
profitability during a period of slow economic recovery in
Colombia. Additionally, this gap also considers a qualitative
adjustment related to corporate behavior attributed to the dominant
ownership by a single major shareholder, as well as related-party
transactions as the bank's ownership is related to large corporate
and financial conglomerates in Colombia.
=================
G U A T E M A L A
=================
[] GUATEMALA: Tops List of Informal Employment Rate at 83.2.%
-------------------------------------------------------------
Dominican Today reports that informal employment in the Dominican
Republic accounts for approximately 54.7%, according to the
Regional Competitive Bulletin published by the Honduran Council of
Private Enterprise (Cohep).
The bulletin also states that Honduras ranks second in Central
America, with the highest informal employment rate, at 82.6%,
behind only Guatemala, according to Dominican Today.
The report reveals that Guatemala tops the list with an informality
rate of 83.2%, followed by Honduras, Dominican Today relays. In
contrast, countries such as Costa Rica (37.4%) and the Dominican
Republic (54.7%) have considerably lower levels, the report
discloses.
Meanwhile, El Salvador has an informality rate of 66.5%, Nicaragua
63%, and Panama 58.7%, the document detailed, the report says.
"Informal employment remains one of the main obstacles to
productivity in the region," the bulletin notes, while warning that
millions of workers are forced to resort to this type of employment
due to the lack of opportunities in the formal economy, the report
notes.
This situation exacerbates the "levels of vulnerability and
precariousness" associated with employment, and restricts access to
fundamental rights such as social protection, decent working
conditions, and job security, the report relays.
"In countries like Honduras and Guatemala, eight out of 10 workers
are in the informal sector. This doesn't happen by choice; it
happens due to a lack of real opportunities, and changing this
reality must be a priority in our public policies," said Alejandro
Kaffati, Economic Policy Officer at Cohep, the leading private
sector umbrella organization in Honduras, the report relays.
Economic Performance
Regarding regional economic performance, the bulletin notes that in
2024, Central America and the Dominican Republic reached a combined
Gross Domestic Product (GDP) of $498 billion, representing a growth
of 2.8%, according to data from the Economic Commission for Latin
America and the Caribbean (ECLAC), the report notes.
Kaffati emphasized that countries like Honduras, El Salvador, and
Nicaragua contributed only between 4% and 7% of the region's total
GDP, which, in his opinion, "forces" countries to focus on "how to
boost our economies from within," the report relays.
In addition to the individual impact, COHEP warns that informality
affects the entire economy, reducing public revenues, limiting the
state's ability to address social needs, and limiting the
sustainability of formal businesses, the report says.
Informality is an "obstacle to workers' rights, including
fundamental principles and rights at work, as well as to social
protection and teaching working conditions," he added.
He also asserts that most people who join the informal economy "do
so not by choice, but rather as a result of a lack of opportunities
in the formal economy and a lack of other means of support," the
report adds.
=============
J A M A I C A
=============
JAMAICA: Consumer Goods Import Bill Hits US$519.4 Million
---------------------------------------------------------
RJR News reports that 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, according to RJR News.
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, the report
notes.
About Jamaica
Jamaica is an island country situated in the Caribbean Sea. Jamaica
is an upper-middle income country with an economy heavily dependent
on tourism. Other major sectors of the Jamaican economy include
agriculture, mining, manufacturing, petroleum refining, financial
and insurance services.
On Feb. 21, 2025, Fitch Ratings affirmed Jamaica's Long-Term
Foreign-Currency Issuer Default Rating (IDR) at 'BB-', with a
positive rating outlook. In October 2023, Moody's upgraded the
Government of Jamaica's long-term issuer and senior unsecured
ratings to B1 from B2, and senior unsecured shelf rating to (P)B1
from (P)B2. The outlook has been changed to positive from stable.
In September 2024, S&P affirmed 'BB-/B' longterm foreign and local
currency sovereign credit ratings on Jamaica and revised outlook to
positive.
=====================
P U E R T O R I C O
=====================
HOGAR LUZ: Seeks Subchapter V Bankruptcy in Puerto Rico
-------------------------------------------------------
On July 23, 2025, Hogar Luz Divina Mia Inc. filed Chapter 11
protection in the U.S. Bankruptcy Court for the District of Puerto
Rico. According to court filing, the Debtor reports between
$50,000 and $100,000 in debt owed to 1 and 49 creditors. The
petition states funds will be available to unsecured creditors.
About Hogar Luz Divina Mia Inc.
Hogar Luz Divina Mia Inc. is a residential care facility likely
providing services for individuals with intellectual/developmental
disabilities, mental health issues, or substance abuse problems
based on its NAICS classification (6232).
Hogar Luz Divina Mia Inc. sought relief under Subchapter V of
Chapter 11 of the U.S. Bankruptcy Code (Bankr. D.P.R. Case No.
25-03287) on July 23, 2025. In its petition, the Debtor
reports estimated assets up to $50,000 and estimated liabilities
between $50,000 and $100,000.
The Debtor is represented by Javier Vilarino, Esq. at Vilarino &
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
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