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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
Thursday, August 28, 2025, Vol. 26, No. 172
Headlines
A R G E N T I N A
ARGENTINA: Economy Extends Downturn in June Before Midterms
TRANSPORTADORA DE GAS: Moody's Withdraws 'B2' Corp. Family Rating
B R A Z I L
BRAZIL: Market Slips as Inflation Data Surprises and Oil Weakens
BRAZIL: Pushes Back on U.S. Section 301 Trade Probe
BRAZIL: Quietly Raises Economic "Speed Limit"
M E X I C O
ASCEND PERFORMANCE: Hires GA Group as Valuation Advisor
BANCO BASE: Fitch Affirms 'BB' Long-Term IDR, Outlook Stable
BANCO MONEX: Fitch Affirms 'BB+' Long-Term IDR, Outlook Stable
DEL MONTE: Won't Decide on Tomato Contracts
P U E R T O R I C O
OMEGA INVESTIGATION: Seeks Chapter 11 Bankruptcy in Puerto Rico
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A R G E N T I N A
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ARGENTINA: Economy Extends Downturn in June Before Midterms
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Buenos Aires Times reports that Argentina's economy contracted in
June for the fourth month this year just before interest rates
soared in July, a slight setback for President Javier Milei before
the country heads to midterm elections in October.
Economic activity fell 0.7 percent from May, below economists'
estimates for a 0.2 percent dip, according to Buenos Aires Times.
From a year ago, the economy expanded 6.4 percent, more than
expected, according to government statistics published, the report
notes.
The drop in June activity aligns with a consumer spending setback
in recent months as wages adjusted for inflation fell into negative
territory earlier in the year, the report relays. Despite
Argentina's agriculture harvest driving exports and sharp growth in
Argentine oil fields, the consumer outlook remains fragile after
unemployment in the first quarter reached its highest level in
nearly four years, the report discloses.
"Weaker Argentine activity in June raises the possibility that GDP
may have contracted in the second quarter, cutting short the
rebound that began in mid-2024," said Adriana Dupita, Bloomberg's
Brazil and Argentina economist, the report discloses. "The outlook
isn't much better. Market-based rates surged in July after changes
to the monetary policy framework, and are holding high in August.
That risks an economic downturn, rather than a stall, and may
jeopardize the analyst consensus of five percent growth this
year."
In July, interest rates soared as the government unwound holdings
of central bank notes and the peso fell 12 percent, which
economists widely expect to further dampen economic activity, the
report says. The TAMAR, the rate governing private deposits, hit
an annual rate of 56 percent, a historic high since its creation,
compared to 12-month inflation expectations below 30 percent, the
report notes.
Argentines will head to the polls in early September to vote for
the Buenos Aires Province legislature and later, to renew
Argentina's Congress in late October, the report relays. The
elections are widely expected to be a referendum on Milei's
government, the report says.
Economists forecast growth for the year at five percent, according
to the Central Bank's July monthly survey, the report adds.
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.
TRANSPORTADORA DE GAS: Moody's Withdraws 'B2' Corp. Family Rating
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Moody's Ratings has withdrawn Transportadora de Gas del Sur S.A.
(TGS) corporate family rating at B2. At the time of withdrawal the
outlook was stable.
RATINGS RATIONALE
Moody's have decided to withdraw the rating(s) following a review
of the issuer's request to withdraw its rating(s).
COMPANY PROFILE
Transportadora de Gas del Sur S.A. is one of the largest natural
gas transportation companies in Latin America, operating more than
9,248 kilometers of pipelines. The company also transports about
60% of the natural gas transported in Argentina, serving more than
six million residential customers in the southern region of the
country, including the City of Buenos Aires and the Province of
Buenos Aires (reaching around 40% of the country's population).
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B R A Z I L
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BRAZIL: Market Slips as Inflation Data Surprises and Oil Weakens
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Rio Times Online reports that Brazil's main stock index, the
Ibovespa, fell 0.18% to 137,771.39 on Aug. 26, reflecting a mix of
local and global pressures. The move looked small, but the reasons
matter.
At home, the IPCA-15 inflation preview fell 0.14% in August, the
first monthly decline in more than a year. Yet the fall was smaller
than economists expected, according to Rio Times Online.
The 12-month rate stayed at 4.95%, still close to the upper half of
the central bank's comfort zone, the report notes. That meant
markets had to rethink how quickly Brazil's Central Bank might cut
rates, the report relays.
The currency market confirmed the tension. The Central Bank's PTAX
reference closed at 5.4215 reais per dollar, showing demand for
safety despite easing prices, the report discloses.
On the equity side, investors followed company-specific stories.
Minerva and GPA both rose more than 3%, supported by strong cash
flow prospects and shareholder activism, the report says.
Vibra Energia, Banco do Brasil, and Ultrapar also advanced. In
contrast, MRV Engenharia sank more than 3% on concerns about U.S.
property assets. Raizen slid nearly 3% to new lows, and Yduqs also
lost ground, the report relays.
Petrobras slipped as Brent crude fell more than 2%, showing how
exposed the index remains to commodity swings. Vale managed a small
gain, despite softer iron ore, the report notes.
Abroad, Wall Street rose modestly, with the Nasdaq closing at
21,544, while Europe struggled, the report notes. France's CAC 40
fell 1.7% as budget fights shook confidence, the report relates.
That mix -- U.S. resilience but European stress -- kept global
investors cautious on riskier assets, the report discloses.
Technical signals from the Ibovespa suggest a market in balance
rather than in flight, the report says. On the daily chart, the
index sits above its 200-day moving average, a long-term support,
the report notes. The RSI rests in neutral territory and the MACD
is flat, pointing to indecision, the report discloses.
The 4-hour view, however, shows momentum picking up, with the MACD
crossing into positive and the RSI rising toward 60, the report
relates. That means the market has energy to push higher if global
conditions allow, the report says.
The Global Liquidity Index, shown as the yellow line on charts,
turned up slightly in mid-August but remains below early-summer
levels, the report notes. That limits fuel for bigger rallies.
The story behind the story is simple: Brazil's market now trades
between two forces, the report discloses. On one side, inflation
is finally bending lower, which could justify rate cuts later, the
report relates.
On the other, the economy still faces high service costs, volatile
oil, and global political risks. Investors reward firms with strong
balance sheets and punish those reliant on fragile sectors, the
report notes.
For outsiders watching Brazil, the message is clear: progress is
happening, but confidence remains fragile and easily shaken by
global moves, 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: Pushes Back on U.S. Section 301 Trade Probe
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Iolanda Fonseca at Rio Times Online reports that Brazil's
government filed a 91-page rebuttal on August 18, 2025, rejecting
the authority of the U.S. Trade Representative (USTR) under Section
301.
Officials defended the country's digital payment system Pix, tariff
preferences, ethanol policies, intellectual property enforcement,
and environmental regulation, according to Rio Times Online.
They insisted that only the World Trade Organization (WTO) has the
right to handle disputes, the report notes. Yet the central fact
is unavoidable: Washington already imposed tariffs of up to 50
percent on many Brazilian exports in late July, the report relays.
These duties cover beef, coffee, seafood, textiles, footwear, and
fruit, while exempting aircraft and orange juice, the report
discloses. Brazil's formal rejection does not change tariffs
already in force, the report says.
The Section 301 investigation, launched on July 15, 2025, focuses
on whether Brazil's policies disadvantage American companies, the
report relays.
The USTR singled out Pix, which now includes 70 million new users
and became a model abroad, the report discloses. U.S. officials
argue Brazil gives its own system preferential conditions, while
Brazil insists the platform treats all operators equally, the
report says.
The ethanol and sugar markets expose another fault line. Brazil
reduced duty-free access for U.S. ethanol, while accusing
Washington of maintaining high barriers on Brazilian sugar, the
report notes. U.S. farm lobbies demanded retaliation, and the
tariffs followed quickly, the report discloses.
Trade between the two countries reached about 91 to 92 billion
dollars in 2024, making the United States one of Brazil's top
partners, the report relays. Nearly 10,000 Brazilian companies
export to the U.S., and many now face costs that could double final
prices, the report notes.
Exporters lose margins, and American buyers pay more for goods
ranging from coffee to beef. Brazil requested WTO consultations,
but the dispute body's appeals system has been frozen for years,
the report discloses.
Even if Brazil won a case, the United States could block
enforcement by appealing into a deadlocked system, the report says.
That means tariffs bite immediately while legal arguments drag on,
the report relays.
Talks at the political level have collapsed. U.S. Treasury
Secretary Scott Bessent canceled a meeting with Brazil's Finance
Minister Fernando Haddad in August, closing one of the last avenues
for dialogue, the report notes.
Brazilian officials admit they have little leverage. Some hope
conditions will change, but most see no short-term path forward.
The story behind the clash is straightforward, the report
discloses.
Brazil can reject Washington's authority, but rejection has no
weight against tariffs already collecting at U.S. ports. Without
negotiation, exporters bear the cost, the report says.
The United States holds the stronger position because its tools act
quickly, while Brazil's only recourse depends on a WTO system
unable to deliver timely relief, 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: Quietly Raises Economic "Speed Limit"
---------------------------------------------
Richard Mann at Rio Times Online reports that JPMorgan now
estimates that Brazil's potential GDP has risen from about 1.5% to
2%. This measure, often called the economy's "speed limit," shows
how fast a country can grow without fueling inflation.
Brazil's central bank confirms that the economy has been running
above that limit, according to Rio Times Online. The output gap
stayed positive through the first quarter of 2025, meaning activity
exceeded what is usually considered sustainable, the report notes.
IBGE data illustrate the point, says Rio Times. The economy grew
3.2% in 2023 and 3.4% in 2024, reaching BRL11.7 ($2.2) trillion,
the report relays. In the first quarter of 2025 alone, GDP
expanded 1.4% compared with the previous quarter, the report
discloses.
For four years in a row, actual growth has outpaced forecasts,
challenging old assumptions that Brazil could not grow faster than
1.5% a year, the report says.
The change did not happen overnight. Since 2016, Brazil has
advanced a series of reforms, the report discloses. A 2017 labor
law gave firms more hiring flexibility and reduced lawsuits, the
report says. A 2019 pension reform adjusted retirement rules to
improve long-term fiscal stability, the report relays.
In 2020, a sanitation law set universal access targets for water
and sewage by 2033, drawing billions in private investment, the
report relates. The 2022 privatization of Eletrobras, the
country's largest power utility, aimed to improve efficiency and
attract new capital, the report discloses.
Reforms and Pix drive Brazil's Productivity
The most ambitious reform came in 2023, when Congress approved a
new tax system built on a dual value-added tax, now moving into
regulation, the report discloses. Alongside these changes, the
central bank launched Pix, its instant payment system, the report
says.
Pix handled 63.8 billion transactions in 2024 and broke a
single-day record of 276.7 million transfers in June 2025, the
report relates. By lowering costs and speeding up transfers, Pix
has boosted productivity, especially for small businesses, the
report says.
The story behind these numbers is that Brazil has slowly lifted its
growth ceiling, the report notes. The economy can now expand at a
faster pace before inflation sets in, the report says.
Yet potential growth of 2% remains modest compared with actual
results of over 3% in recent years, the report relays. That gap
explains why interest rates remain high, even as reforms create
better conditions for investment, the report notes.
For businesses and investors, the message is straightforward, the
report notes. Brazil has become a market with more stable rules,
higher productivity, and stronger infrastructure, the report
discloses.
For policymakers, the challenge is to keep narrowing the distance
between potential and actual growth, so the economy's speed limit
matches the country's real ambitions, 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.
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M E X I C O
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ASCEND PERFORMANCE: Hires GA Group as Valuation Advisor
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Ascend Performance Materials Holdings Inc. seeks approval from the
U.S. Bankruptcy Court for the Southern District of Texas to hire GA
Group Advisory & Valuation Services, LLC to serve as valuation
advisor.
GA Group will provide these services:
(a) review data provided by the Debtors and fixed asset
accounting records;
(b) perform a "Desktop" valuation of the personal property and
inventory without physical inspection at twelve locations
specified in the Engagement Letter and as selected with the
management of the Debtors;
(c) perform a "Desktop" valuation of the personal property
described in the Engagement Letter under lease agreement without
physical inspection;
(d) apply the market approach to estimate value of certain
personal property through the comparison of pricing, recent sales,
and other transaction data for guideline assets similar to the
subject assets;
(e) apply the cost approach to estimate the value of the
personal property, by class and location, under a liquidation
basis, using a trending methodology if appropriate fixed asset
accounting data is available; and
(f) perform a "Desktop" valuation of the real property without
physical inspection at eight locations specified in the Engagement
Letter and as selected with the management of the Debtors.
GA Group will be paid a flat fee, inclusive of all costs, totaling
$135,250 for the completion of the appraisals, with 50% due upon
execution of the Engagement Letter and the balance due upon
completion but before release of any verbal values, drafts, or the
final report.
GA Group is a "disinterested person" within the meaning of Section
101(14) of the Bankruptcy Code, according to court filings.
The firm can be reached at:
GA Group Advisory & Valuation Services, LLC
30870 Russell Ranch Road, Suite 250
Westlake Village, CA 91362
About Ascend Performance Materials Holdings
The Debtors, together with their non-Debtor affiliates, are one of
the largest, fully-integrated producers of nylon, a plastic that is
used in everyday essentials, like apparel, carpets, and tires, as
well as new technologies, like electric vehicles and solar energy
systems. Ascend's business primarily revolves around the production
and sale of nylon 6,6 (PA66), along with the chemical intermediates
and downstream products derived from it. Common applications of
PA66 include heating and cooling systems, air bags, batteries, and
athletic apparel. Headquartered in Houston, Texas, Ascend has a
global workforce of approximately 2,200 employees and operates
eleven manufacturing facilities that span the United States,
Mexico, Europe, and Asia.
Ascend Performance Materials Holdings Inc. and its affiliates filed
voluntary petitions for relief under Chapter 11 of the Bankruptcy
Code (Bankr. S.D. Tex. Lead Case No. 25-90127) on April 21, 2025.
In the petitions signed by Robert Del Genio, chief restructuring
officer, the Debtors disclosed $1 billion to $10 billion in both
estimated assets and liabilities.
Judge Christopher M. Lopez oversees the cases.
The Debtors tapped Bracewell LLP and Kirkland & Ellis LLP as
counsel; PJT Partners, Inc. as investment banker; FTI Consulting,
Inc. as restructuring advisor; and Deloitte LLP as tax advisor.
Epiq Corporate Restructuring LLC is the Debtors' claims, noticing,
and solicitation agent.
BANCO BASE: Fitch Affirms 'BB' Long-Term IDR, Outlook Stable
------------------------------------------------------------
Fitch Ratings has affirmed Banco Base, S.A., Institucion de Banca
Multiple, Grupo Financiero Base's (Base) Long- and Short-Term
Foreign and Local Currency Issuer Default Ratings (IDR) at 'BB' and
'B', respectively, Viability Rating (VR) at 'bb', and Government
Support Rating (GSR) at 'no support' (ns). The Rating Outlooks for
the Long-Term IDRs are Stable.
Fitch also has affirmed the Long- and Short-Term National Ratings
of Base and Casa de Bolsa Base, S.A. de C.V., Grupo Financiero Base
(CB Base) at 'A+(mex)' and 'F1+(mex)', respectively. The Rating
Outlook for the Long-Term Ratings is Stable.
Key Rating Drivers
Ratings Driven by Intrinsic Creditworthiness: Base's IDRs are
driven by its intrinsic creditworthiness, captured in its 'bb' VR.
The VR reflects Base's recognized FX trading franchise, which has
led to increased profitability metrics and sound capitalization
levels. Fitch's assessment also considers the bank's higher risk
profile due to its concentrated business model sensible to market
and non-financial risks.
Stable Operating Environment: Fitch believes Base will maintain
business volumes with acceptable risk levels, supported by the
agency's 'bb+'/Stable Operating Environment (OE) assessment for
Mexican banks. Despite lower GDP growth pressures from tariff
uncertainty, and reduced U.S. growth, Fitch considers Mexico's
diverse and large economy beneficial for GDP per capita stability
and the Operational Risk Index (ORI). As of July 2025, Fitch's ORI
percentile is 46.5%, with YE 2025 forecast for Mexico's GDP per
capita at USD13,509.
Business Profile Underpinned by FX Trading: The bank's business
profile assessment is underpinned by its good local market position
in the FX wholesale trading market, offsetting its moderate market
share in the local banking system and allowing it to be positively
adjusted to a 'bb' score, above the implied 'b and below' score. As
2Q25, Base was the sixth- largest bank in net gains on trading and
derivatives in the Mexican banking sector, accounting for 4.9% of
the industry, according to the local regulator.
The bank's solid franchise in this segment has led to growing
revenues across the cycle, strengthening its financial profile.
Base's four-year average total operating income (TOI) was USD248
million, with a 3.1% yoy growth as of 1H25 in local currency.
Less Diversified Business Model: Base's 'bb-' risk profile score
highlights its less diversified business model compared to peers,
with earnings more reliant on volatile business highly correlated
to market conditions, leading to greater market, operational and
reputational risks. The assessment also considers more flexible
underwriting standards than larger commercial banks, due to credit
portfolio concentrated per region, sector and debtor, high
proportion of unsecured loans, and a focus on mid-tier regional
enterprises.
Balance Sheet Derisking: Under the bank's strategy, credit risk has
decreased as the credit portfolio shrinks with controlled
deterioration. Growth in the share of securities linked to Mexico's
sovereign, a larger capital base, and recurrent earnings strengthen
loss absorption. Fitch expects Base's credit risk to remain
controlled in the medium term. The stage 3 loans ratio was 2.9% at
2Q25, higher than the four-year average of 2.6%, but charge-offs
have reduced, improving the adjusted impaired loans ratio. Asset
quality is supported by a sizable securities portfolio, 77.9% of
total assets at 2Q25, mostly in Mexican government securities that
have lower counterparty risk than domestic issuers.
Profitability Easing: The 'bb+' score is below the 'bbb' category
implied score due to a negative adjustment in Fitch's assessment of
revenue diversification, as the bank heavily relies on the FX
trading business, which is susceptible to earnings volatility.
Base's profitability remains high but has declined over the past
two years because of a lower net interest margin and slowing
trading gains, surpassed by non-interest expenses growth.
Fitch believes the bank's earnings and profitability could face
challenges from OE pressures and rising non-interest costs to
enhance operational capabilities, but metrics should stay sound for
now. The operating profit to risk-weighted assets ratio was 7.1% at
2Q25, exceeding its four years average and the Mexican banking
industry.
Capital Adequacy Strengthening: The factor's score of 'bb+' is
below the 'bbb' implied score due to a negative adjustment in
Fitch's assessment, which considers the risk profile and business
model. The bank's significant concentration on a single business
line potentially limits its loss absorption capacity and capital
generation ability. Sustainable RWA growth, supported by consistent
reinvested earnings, has strengthened Base's capital adequacy.
Fitch expects Base to maintain a sufficient capital base to support
growth, mitigate concentration risks and absorb base scenario
losses if needed. As of 2Q25, the CET1 to RWAs ratio was 21.3%,
above the average regulatory capitalization ratio for the Mexican
banking industry and expected to remain above this level in the
medium term.
High Liquidity: Base's funding and liquidity profile benefits from
its liquid balance sheet, reflecting its highly focused trading
business model, repo funding and a growing deposit franchise. Repos
and securities lending were the main funding sources, comprising
76.1% at 2Q25, supporting treasury and money market activities.
This leads to sizable liquid assets, with regulatory metrics well
above minimum requirements.
Customer deposits, accounting for 23.9% of funding sources at 2Q25,
are well diversified, have consistently grown, and fully cover
gross loans. The gross loans-to-deposits ratio was 31.6% at 2Q25,
the best metric since 2021.
Rating Sensitivities
Factors that Could, Individually or Collectively, Lead to Negative
Rating Action/Downgrade
- A weakened business profile resulting from a reduced market
position that materially affects TOI, leading to deterioration in
capitalization as well as the funding and liquidity profile.
Factors that Could, Individually or Collectively, Lead to Positive
Rating Action/Upgrade
- A significant TOI increase and greater business model
diversification over the medium term, while preserving its market
position in FX trading, along with maintaining high profitability
and capitalization levels.
OTHER DEBT AND ISSUER RATINGS: KEY RATING DRIVERS
Base's GSR: Fitch assesses Base's GSR at 'ns' because there is no
reasonable assumption that support from authorities will be
available. The bank is not a domestic systemically important bank
(D-SIB), and it has low market share and interconnectedness within
the financial system compared to major Mexican banks. As of June
2025, Base's deposits represented only 0.4% of the Mexican banking
system's deposits.
OTHER DEBT AND ISSUER RATINGS: RATING SENSITIVITIES
- There is no downside potential for the GSR; however, upside
potential is limited and could only occur over time with a material
increase in the bank's systemic importance.
SUBSIDIARIES & AFFILIATES: KEY RATING DRIVERS
Base CB's Ratings Driven by Base: CB Base's ratings are aligned
with those of Base, reflecting of Grupo Financiero Base, S.A. de
C.V.'s (GF Base) obligation to support its subsidiaries. Support
would be provided by the bank, the group's largest and most
relevant operating subsidiary. Fitch also considers in the
assessment the securities firm's essential role and relevance to
the group's operations.
SUBSIDIARIES AND AFFILIATES: RATING SENSITIVITIES
- Base CB's national ratings would mirror any changes in Base's
national ratings. Additionally, a change in Fitch's perception of
the entity's lower strategic importance for the bank and the
financial group could lead to a negative rating action/downgrade.
VR ADJUSTMENTS
The Business Profile Score of 'bb' has been assigned above the 'b'
category implied score due to the following adjustment reason:
Market Position (positive).
The Earnings and Profitability Score of 'bb+' has been assigned
below the 'bbb' category implied score due to the following
adjustment reason: Revenue Diversification (negative).
The Capitalization and Leverage Score of 'bb+' has been assigned
below the 'bbb' category implied score due to the following
adjustment reason: Risk Profile and Business Model (negative).
Summary of Financial Adjustments
Fitch's calculation of tangible equity excluded prepaid expenses
and other deferred assets from total equity.
Sources of Information
Financial figures are in accordance with the Comision Nacional
Bancaria y de Valores criteria. Figures since 2022 include recent
accounting changes in the process to converge to International
Financial Reporting Standards. Prior years did not include these
changes, and Fitch believes they are not directly comparable.
Public Ratings with Credit Linkage to other ratings
Base CB's ratings and Outlook are aligned with those of Base due to
GF Base's legal obligation to provide support to its subsidiaries.
ESG Considerations
The highest level of ESG credit relevance is a score of '3', unless
otherwise disclosed in this section. A score of '3' means ESG
issues are credit-neutral or have only a minimal credit impact on
the entity, either due to their nature or the way in which they are
being managed by the entity. Fitch's ESG Relevance Scores are not
inputs in the rating process; they are an observation on the
relevance and materiality of ESG factors in the rating decision.
Entity/Debt Rating Prior
----------- ------ -----
Banco BASE, S. A.,
Institucion de Banca
Multiple, Grupo
Financiero BASE LT IDR BB Affirmed BB
ST IDR B Affirmed B
LC LT IDR BB Affirmed BB
LC ST IDR B Affirmed B
Natl LT A+(mex) Affirmed A+(mex)
Natl ST F1+(mex) Affirmed F1+(mex)
Viability bb Affirmed bb
Government Support ns Affirmed ns
Casa de Bolsa Base,
S. A. de C. V., Grupo
Financiero Base Natl LT A+(mex) Affirmed A+(mex)
Natl ST F1+(mex) Affirmed F1+(mex)
BANCO MONEX: Fitch Affirms 'BB+' Long-Term IDR, Outlook Stable
--------------------------------------------------------------
Fitch Ratings has affirmed Banco Monex, S.A., Institucion de Banca
Multiple, Monex Grupo Financiero's (Banco Monex) Long- and
Short-Term Foreign and Local Currency Issuer Default Ratings (IDR)
at 'BB+' and 'B', respectively, Viability Rating (VR) at 'bb+', and
Government Support Rating (GSR) at 'no support' (ns). The Rating
Outlooks for the Long-Term IDRs are Stable.
Additionally, Fitch has upgraded the Long-Term National Scale
ratings for Banco Monex, Monex Casa de Bolsa, S.A. de C.V., Monex
Grupo Financiero (Monex CB) and Monex Sociedad Anonima Promotora de
Inversion de Capital Variable (Monex SAPI) to 'AA(mex)' from
'AA-(mex)'. The Rating Outlooks for the Long-Term National ratings
are Stable. The Short-Term National Scale ratings for all these
entities were affirmed at 'F1+(mex)'.
Banco Monex's National Rating upgrade reflects sustained growth in
total operating income (TOI) and consistently strong profitability,
which continue to support capitalization metrics above 18%. Fitch
considers this necessary to offset the risks of the bank's less
diversified business model compared to national peers. The upgrade
reflects Fitch's view that Monex SAPI's international operations
are a key strategic strength, reinforcing Banco Monex's franchise,
strengthen its position in Mexican and global markets, and
enhancing resilience to local shocks.
Key Rating Drivers
Standalone Profile Drives Ratings: Banco Monex's IDRs are driven by
its 'bb+' VR. The bank's VR is underpinned by its strong
competitive position in foreign exchange (FX) trading, which
supports its good financial profile through the cycle, marked by
solid capital levels and strong liquidity. These attributes offset
Fitch's view of the bank's riskier profile relative to similarly
rated global and national bank peers. The Outlook is Stable, as
Fitch expects Banco Monex's credit fundamentals to remain in line
with its current ratings, despite Fitch's expectations for a weaker
economy in 2025. The bank's National Ratings reflect its
creditworthiness relative to Mexican issuers.
Stable Operating Environment: Fitch believes Banco Monex will
continue to generate business volumes with acceptable risk levels,
supported by the agency's 'bb+'/Stable Operating Environment (OE)
assessment for Mexican banks. Despite lower GDP growth pressures
from tariffs, tariff-related uncertainty and reduced U.S. growth,
Fitch believes Mexico's diverse and large economy will likely
benefit the stability of the GDP per capita and the Operational
Risk Index (ORI). As of July 2025, Fitch's ORI percentile ranking
is 46.5%, with forecast YE 2025 Mexico GDP per capita of
USD13,509.
Solid Market Position in Niche Market: Banco Monex's business model
continues to benefit from its dominant position in FX wholesale
trading. It ranks as the third-largest bank trading in the first
half of 2025 (1H25), according to local regulators. This business
model supports consistent financial performance with stable
earnings. As of YE 2024, the four-year average TOI was USD478
million, outperforming most mid-sized banks in the country and
region, but still lagging higher-rated local peers. Over the past
five years, revenue compound growth was 14%. Fitch believes Monex's
well-defined, consolidated business model offsets its moderate
market share, which remains below 1% in loans and deposits.
Riskier Profile than Largest Peers: Fitch assesses Banco Monex's
risk appetite at 'bb', one notch below its business profile score,
reflecting a risk profile highly influenced by more exposed market,
reputational and operational risks, primarily from its FX business
versus traditional banks. Effective risk management and good client
knowledge mitigate these risks. The bank manages operational risk
well, with low operational losses, and is strengthening anti-money
laundering policies. Fitch's assessment also considers loan growth
volatility partly due to a high portion of foreign currency loans
and higher segment and single-obligor concentrations compared to
larger traditional bank peers.
Large Non-Loan Exposure, Good Asset Quality: Fitch believes Banco
Monex maintains good asset quality, as trading securities with high
credit quality comprises 43% of total assets at 1H25. The loan
portfolio grew by 30.7% yoy but remains moderate at 18% of total
assets, while the Stage 3 loan ratio was relatively stable at 1.5%
(2024: 1.4%).
Concentrations by individual borrower exceed 1x the bank's Common
Equity Tier 1 (CET1), rising to 1.4x in 1H25. Fitch anticipates the
stage 3 loan ratio may rise modestly due to a challenging
environment but should remain below 2%, supported by prudent
underwriting standards. The high credit quality of the investment
securities portfolio and healthy delinquency ratios are expected to
continue to supporting Banco Monex's overall asset quality
assessment, aligning with the current rating.
Consistent Revenues but Concentrated: The earnings and
profitability score is 'bb+', below the implied 'bbb' score, as
Fitch views income concentration in a highly transactional,
countercyclical business line as a negative credit factor. As of YE
2024, net gains on FX and derivatives accounted for 60% of the
bank's TOI. Banco Monex's operating profit/risk-weighted assets
(RWAs) remains strong, at 5.8% in 1H25(YE 2024: 6.1%), supported by
growth in trading income, low loan impairment charges and cost
efficiency.
Fitch expects the ratio to moderate in the range of 5%-6%, as the
bank's FX and derivates business model focus usually benefits from
market volatility. This is expected to help offset the effect of
falling interest rates and pressures on margins. Fitch also expects
non-interest income and cost efficiency to support strong
earnings.
Good Capitalization: Fitch upgraded Banco Monex's capitalization
and leverage factor score to 'bb+' from 'bb' with a stable trend
due to its solid capitalization, which continues to compare
favorably with mid-sized banks. As of YE 2024, the common equity
Tier 1 (CET1) ratio decreased to 17.6% compared to 18.2% in YE 2023
due to capital distributions and increase in RWAs (21.4% in YE
2024) but retuned to 18.1% in 1H25. Fitch expects the bank to
preserve capital metrics above 18% and with good loss absorption
capacity over the rating horizon, driven by consistent earning
generation that should offset dividends payments and business
volume.
Stable Funding; Healthy Liquidity: Fitch considers in its
assessment the high liquidity of the balance sheet by consistent
income generation, short term of the asset side and growing deposit
franchise. The loan-to-deposit ratio for 1H25 of 71.7% is among the
lowest compared with local and regional peers. Customer deposits
comprised a moderate 33% of non-equity funding in 1H25, as the
bank's funding structure is heavily reliant on repos, which
represented 65.1% of total funding.
The funding base is concentrated; the top 20 depositors accounted
for 19.5% of total deposits as of 1H25.Liquidity is healthy, with
net liquid assets accounting for close to 70% of total assets, and
the liquidity coverage and net stable funding ratios have
consistently remained above regulatory minimums.
Rating Sensitivities
Factors that Could, Individually or Collectively, Lead to Negative
Rating Action/Downgrade
Banco Monex - VR, IDR and National Ratings
- A weakened business profile due to a reduced market position that
affects relevantly the TOI levels, which in turn deteriorates the
capitalization and its funding and liquidity profile;
- A sustained deterioration of the bank's operating profit to RWA
ratio consistently below 2.5% and a CET1 to RWA ratio consistently
below 14%;
- A negative rating action on the sovereign or a weaker OE would
result in a similar action on Banco Monex's IDRs and VR given its
less diversified business profile.
Factors that Could, Individually or Collectively, Lead to Positive
Rating Action/Upgrade
- An upgrade of Banco Monex's international and national ratings is
unlikely in the foreseeable future as these are already at a
relatively high level for its moderate business model and scale;
- An upgrade would require an improvement in Fitch's OE assessment
or if the bank greater diversifies its business and risk profile,
as well as a marked improvement of its gross loan and customer
deposit market shares within the Mexican financial system.
GSR
No Government Support: Banco Monex's 'ns' GSR reflects Fitch's view
that there is no reasonable assumption that government support will
be available since is not considered a domestic systemically
important bank (D-SIB) and has low market share and
interconnectedness within the financial system when compared to
major Mexican banks. As of 1H25, Banco Monex deposits represented
0.9% of the Mexican banking system's deposits.
There is no downside potential for the GSR; however, upside
potential is limited and can only occur over time with a material
growth of the bank's systemic importance.
SUBSIDIARIES & AFFILIATES: KEY RATING DRIVERS
Monex SAPI's National Ratings
Holdco Ratings Equalized with Banco Monex: Monex SAPI's national
scale ratings are equalized with those of its main operating
subsidiary, Banco Monex, reflecting Fitch expectation that the
holding company will maintain its double leverage ratio below 120%,
(2021- 2024 average of 103.8%). Fitch's assessment also considers
that Monex SAPI's failure risk is the same as Banco Monex, due to
Monex SAPI's default risk is highly linked to dividend flows from
subsidiaries, and the entity's investment valuation.
Monex CB's National Ratings
Ratings at the Same Level as the Banks': Monex CB's national scale
ratings are aligned with Banco Monex's ratings. Fitch in its
evaluation considers the legal commitment of its holding company,
Grupo Financiero Monex, S.A. de C.V., y Subsidiarias (Monex GF), to
provide support to its operating subsidiaries and that any support
will come from the bank, that it is the most relevant subsidiary of
the holding in terms of revenues and risks. Fitch also considers,
the perception of the relevant strategic role Monex CB plays for
the commercial strategy and operations of the holding.
SUBSIDIARIES AND AFFILIATES: RATING SENSITIVITIES
Monex SAPI
Factors that Could, Individually or Collectively, Lead to Negative
Rating Action/Downgrade:
- The national ratings would remain at the same level as Banco
Monex and would move in tandem with any rating actions on its main
operating subsidiary;
- A significant and sustained increase of Monex SAPI's double
leverage ratio above 120% would lead to a differentiation of one
notch with respect to the National Scale ratings of Banco Monex.
Factors that Could, Individually or Collectively, Lead to Positive
Rating Action/Upgrade:
- Any positive movement in Banco Monex's national ratings.
Monex CB
- Monex CB's national ratings would mirror any changes in Banco
Monex's national ratings. Additionally, a change in Fitch's
perception of the entity's lower strategic importance for Banco
Monex and the controlling group could lead to a negative rating
action/downgrade.
VR ADJUSTMENTS
The Earnings and Profitability Score of 'bb+' has been assigned
below the 'bbb' category implied score due to the following
adjustment reason: Revenue Diversification (negative).
Summary of Financial Adjustments
Banco Monex, Monex SAPI and Monex CB: Fitch's calculation of
tangible capital excluded balance sheet items related to prepaid
expenses and other deferred assets from total capital.
Sources of Information
Financial figures are in accordance with the Comision Nacional
Bancaria y de Valores criteria. Figures from 2022 include recent
accounting changes in the process to converge to International
Financial Reporting Standards. Prior years did not include these
changes, and Fitch believes they are not directly comparable.
Public Ratings with Credit Linkage to other ratings
Monex CB: Monex CB's ratings and Outlook are aligned with those of
Banco Monex due to Monex GF's legal obligation to provide support
to its subsidiaries.
Monex SAPI: Monex SAPI's national ratings are aligned with those of
its main operating subsidiary, Banco Monex.
ESG Considerations
The highest level of ESG credit relevance is a score of '3', unless
otherwise disclosed in this section. A score of '3' means ESG
issues are credit-neutral or have only a minimal credit impact on
the entity, either due to their nature or the way in which they are
being managed by the entity. Fitch's ESG Relevance Scores are not
inputs in the rating process; they are an observation on the
relevance and materiality of ESG factors in the rating decision.
Entity/Debt Rating Prior
----------- ------ -----
Banco Monex, S.A.,
Institucion de
Banca Multiple,
Monex Grupo
Financiero LT IDR BB+ Affirmed BB+
ST IDR B Affirmed B
LC LT IDR BB+ Affirmed BB+
LC ST IDR B Affirmed B
Natl LT AA(mex) Upgrade AA-(mex)
Natl ST F1+(mex) Affirmed F1+(mex)
Viability bb+ Affirmed bb+
Government Support ns Affirmed ns
Monex Casa de
Bolsa, S.A. de
C.V., Monex Grupo
Financiero Natl LT AA(mex) Upgrade AA-(mex)
Natl ST F1+(mex) Affirmed F1+(mex)
Monex Sociedad
Anonima Promotora
de Inversion de
Capital Variable Natl LT AA(mex) Upgrade AA-(mex)
Natl ST F1+(mex) Affirmed F1+(mex)
DEL MONTE: Won't Decide on Tomato Contracts
-------------------------------------------
Rick Archer of Law360 Bankruptcy Authority reports that Del Monte,
the packaged foods giant, asked a New Jersey bankruptcy judge to
reject tomato processors' bid for an immediate ruling on their
contracts, contending that such an early decision in the
Chapter 11 case would interfere with its search for a buyer.
About Del Monte Foods Corporation II Inc.
Del Monte Foods, Inc. produces, distributes, and markets branded
plant-based packaged food products in the United States and
Mexico.
Del Monte Foods Corporation II Inc. and its affiliates filed their
voluntary petitions for relief under Chapter 11 of the Bankruptcy
Code (Bankr. D.N.J. Lead Case No. 25-16984) on July 1, 2025,
listing $1,000,000,001 to $10 billion in both assets and
liabilities.
Judge Michael B Kaplan presides over the case.
Michael D. Sirota, Esq. at Cole Schotz P.C. represents the Debtor
as counsel.
=====================
P U E R T O R I C O
=====================
OMEGA INVESTIGATION: Seeks Chapter 11 Bankruptcy in Puerto Rico
---------------------------------------------------------------
On August 15, 2025, Omega Investigation Services Corp. filed
Chapter 11 protection in the District of Puerto Rico. According to
court filing, the Debtor reports between $500,000 and $1 million
in debt owed to 1 and 49 creditors. The petition states funds will
be available to unsecured creditors.
About Omega Investigation Services Corp.
Omega Investigation Services Corp. is a company presumably
providing investigation and security-related services based in San
Juan, Puerto Rico.
Omega Investigation Services Corp. sought relief under Chapter 11
of the U.S. Bankruptcy Code (Bankr. D.P.R. Case No. 25-03647) on
August 15, 2025. In its petition, the Debtor reports estimated
assets between $100,000 and $500,000 and estimated asset $500,000
and $1 million.
The Debtor is represented by Alexis Fuentes-Hernandez, Esq. at
Fuentes Law Offices, LLC.
*********
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