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250915.mbx T R O U B L E D C O M P A N Y R E P O R T E R L A T I N A M E R I C A Monday, September 15, 2025, Vol. 26, No. 184 Headlines A R G E N T I N A ARGENTINA: Milei Vows No Shift in Policy as IMF Offers Support ARGENTINA: Morgan Stanley's Flip-Flop Shows Speed of Crisis B A H A M A S FTX GROUP: Part of $167M Ch.11 SkyBridge Suit Sent to Arbitration B R A Z I L SAMARCO MINERACAO: Fitch Hikes LongTerm IDRs to B, Outlook Positive USIMINAS: Fitch Affirms 'BB' LongTerm IDRs, Outlook Stable C A Y M A N I S L A N D S OMNIYAT SUKUK 1: Fitch Rates Upcoming USD200MM Programme 'BB-' D O M I N I C A N R E P U B L I C [] DOMINICAN REPUBLIC: Tourism Contributes US$9BB/Yr to Economy M E X I C O PETROLEOS MEXICANOS: Fitch Puts 'BB' LongTerm IDRs on Watch Pos. PETROLEOS MEXICANOS: Moody's Ups CFR & Sr. Unsecured Notes to B1 P A N A M A BLADEX: Fitch Gives 'BB-(EXP)' Rating on Upcoming USD Sub. Notes P U E R T O R I C O ASOCIACION HOSPITAL: Hires CPA Luis R. Carrasquillo as Consultant EL VERDE: Unsecured Creditors Will Get 100% of Claims in Plan - - - - - ================= A R G E N T I N A ================= ARGENTINA: Milei Vows No Shift in Policy as IMF Offers Support -------------------------------------------------------------- Buenos Aires Times reports that Argentina President Javier Milei said Milei vows no shift in policy after IMF support. 'Not a millimetre,' he said, according to the report. Following damaging electoral defeat and resulting market jitters, President insists his economic reform plan will continue unchanged, according to Buenos Aires Times. The report notes that President Javier Milei has vowed to stay the course with his economic program, despite a damaging defeat in the elections in Buenos Aires Province. In a post on social media, the La Libertad Avanza leader said his plan for Argentina's struggling economy remained unchanged and would not be shifted even by "a millimetre," despite the loss and subsequent market jitters, the report relays. The report discloses that Milei's government lost key local legislative elections in Buenos Aires Province, the opposition Peronist stronghold that represents 40 percent of Argentina's electorate. La Libertad Avanza won 33.7 percent of the vote in the region, some way behind the opposition Peronist alliance, Fuerza Patria, which secured a commanding 47.2 percent, the report relays. The defeat comes just weeks before national midterm elections on October 26, in which Milei will seek to boost his party's representation in Congress, the report discloses. "Just as I stated, we will not shift our economic programme by even a millimetre," Milei posted on X, the report relays. The report notes that the president underscored ongoing support from the International Monetary Fund (IMF), quoting a message from the organisation in support of Argentina's monetary and exchange-rate stability plans, fiscal discipline and deregulation agenda. "IMF staff is closely engaged with the Argentine authorities as they implement their program for entrenching stability and improving the country's growth prospects," said IMF spokesperson Julie Kozack in a post on X, the report says. "We support their commitment to ensure the sustainability of the programme's FX and monetary framework, as well as their continued adherence to the fiscal anchor and comprehensive deregulation agenda," added the official, the report discloses. Milei outlined the pillars of his plan: fiscal balance, strict limits on money-printing and adherence to an exchange-rate band agreed with the IMF, the report relays. That system, part of a US$20-billion program with the multilateral lender signed in April (of which US$14 billion has already been disbursed), restricts government intervention in the currency market unless the dollar trades outside the range of 975 to 1,470 pesos, the report says. The range adjusts monthly by one percent through micro-devaluations, the report relays. Economy Minister Luis Caputo also reinforced the message. "We will not deviate one iota from the economic program," said the official on X, the report notes. The Milei administration has spent much of the week grappling with the economic fall-out of the defeat, the report relays. Some Argentine shares listed on Wall Street plunged by as much as 15 percent, while the Buenos Aires Stock Exchange fell 13 percent, the report says. The Milei government shifted policy to intervene pre-emptively in the foreign exchange market to curb the dollar's rise, even though it had not breached the upper limit of the floating band, the report relays. The President is facing heavy political pressure amid a developing scandal over alleged corruption at the ANDIS national disability agency, the report says. Leaked audio recordings quoting the body's former chief implicate the president's sister, Karina Milei, in an alleged bribery scheme involving the public procurement of medicine and services for the disabled, the report discloses. Karina, who serves as the President's chief-of-staff, is the head of state's closest confidant, the report notes. A criminal investigation into the recordings, which has yet to verify their veracity, is ongoing, the report relays. The ruling party announced the creation of a "national political committee" and called for dialogue with Argentina's powerful provincial governors, 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. Fitch Ratings, on May 12, 2025, upgraded Argentina's Long-Term Foreign-Currency and Local-Currency Issuer Default Rating (IDR) to 'CCC+' from 'CCC'. The upgrade reflects the launch of a new IMF program, among other things. S&P Global Ratings, in February 2025 lowered its local currency sovereign credit ratings on Argentina to 'SD/SD' from 'CCC/C' and its national scale rating to 'SD' from 'raB+'. Moody's Ratings, in January 2025, raised Argentina's local currency ceiling to B3 from Caa1 and the foreign currency ceiling to Caa1 from Caa3. DBRS, Inc. upgraded Argentina's Long-Term Foreign and Local Currency Issuer Ratings to B (low) from CCC in November 2024. ARGENTINA: Morgan Stanley's Flip-Flop Shows Speed of Crisis ----------------------------------------------------------- Vinicius Andrade & Nicolle Yapur at Bloomberg News report that it took less than a week – and a landslide defeat for free-market reformer Javier Milei – to make Morgan Stanley abandon its bullish call on Argentina. The Wall Street bank, alongside rivals including Bank of America Corp and JPMorgan Chase & Co, advised clients to buy the government's bonds ahead of a key local election in Buenos Aires Province, betting that the president's recent political stumbles had already been priced in during sell-offs that swept through the nation's financial markets the past few months, according to Bloomberg News. Bloomberg News notes that word came that Milei's party had been handed a crushing defeat in the vote, a troubling sign ahead of nationwide congressional elections next month, and, the bullish calls had backfired spectacularly. Some of Argentina's hard-currency bonds tumbled by nearly seven cents to 55 cents on the dollar, the steepest drop in two years, sending the yield hurtling up to 12.7 percent, Bloomberg News relays. The local stock market tanked 13 percent in the worst one-day rout since the onset of the pandemic. And as global investors rushed to the exits, the peso slid as much as seven percent to a new all-time low, Bloomberg News notes. As the sell-off got underway, Morgan Stanley ditched its optimism, Bloomberg News discloses. The rout sent a clear message: investors are increasingly concerned that Milei, ensnared in a corruption scandal involving his sister, will suffer such a rebuke in next month's vote that it will hobble his ability to push through the reforms needed to cement the gains he's made in slashing inflation and sparking an economic recovery, Bloomberg News says. For investors long accustomed to the wild ups and downs in Argentina, a country that's defaulted on its debts nine times over its history, a plunge back into crisis was suddenly a very plausible scenario, Bloomberg News relays. "With market uncertainty set to last, we move to the sidelines despite likely much cheaper levels today," Morgan Stanley economist Fernando Sedano and strategist Simon Waever wrote in a note, also removing their "like" stance on the dollar bonds, Bloomberg News notes. Bloomberg News discloses that the market turmoil underscored how much Milei's political power has been battered by reports of a bribery scandal involving his sister and purported kickbacks paid in return for government pharmaceutical contracts, which the government has denied. The reports have tarnished his reputation as a radical reformer and outsider untainted by politics as usual. Irate protesters have gone so far as to pelt him with rocks during a recent public appearance, Bloomberg News relays. Milei had been expected to be handed a defeat in the local election, but the magnitude of his party's loss to the left-leaning Peronist opposition – the gap was almost 14 percentage points – surprised investors and spurred talk that the president would shake up his cabinet to contain the damage, Bloomberg News notes. Milei said he was embarking on "deep self-critique," Bloomberg News discloses. A Market Star Milei, a libertarian economist, had become a favourite of global investors for enacting deep spending cuts that reduced a bloated budget deficit and sweeping free-market reforms in a bid to turn around South America's second-largest economy, Bloomberg News says. His shock therapy was beginning to show some success, leading to a plunge in inflation, a surprising budget surplus and a US$20-billion deal with the International Monetary Fund, Bloomberg News relays. The result unleashed a strong run in Argentina's markets, sending shares higher and handing owners of its dollar bonds a 136 percent gain since Milei was elected, lagging only Lebanon and Ecuador among emerging-market debt tracked by Bloomberg. Those returns stoked optimism among some strategists, and some anticipate that the sell-off may be short-lived, Bloomberg News notes. JPMorgan strategists Luis Oganes and Jonny Goulden reaffirmed their overweight recommendation on Argentina's sovereign bonds, saying they anticipate that Milei will be able to salvage his reform agenda and "recalibrate its political strategy to address missteps," Bloomberg News discloses. Bank of America, which has been holding an overweight rating on Argentina debt since mid-2023, also maintained the stance in a note after the election results, though its strategists warned that investors are likely to brace for "less market-friendly" outcomes next month, Bloomberg News says. While some money managers have been trimming exposure after reaping triple-digit returns since Milei rose to power in late 2023, Argentina remains an overweight among institutional investors and hedge funds, according to a note from Goldman Sachs Group Inc's trading desk seen by Bloomberg. But the political dynamics are now fanning concerns about the precarious nature of the nascent turnaround heading into next month's legislative election, Bloomberg News relays. The government had already started wading into the currency market to try to prop up the peso, Bloomberg News notes. "The next weeks until the October election will be critical to assess whether the government can control the damage," Andres Borenstein, an analyst at BTG Pactual wrote in a note, Bloomberg News discloses. "But any meaningful improvement in Argentine asset prices will likely have to wait until the end of October at the earliest," he added. As Milei approaches the middle of his tenure, the legislative vote will be key to whether he can continue to push Argentina down a new economic path, Bloomberg News notes. His defeat in the Buenos Aires Province election echoed the one Mauricio Macri suffered in the primary election in 2019, which fuelled fears that his pro-business policies were coming to an end, Bloomberg News relays. Meanwhile, Milei's strategy to stabilize the currency is unravelling. The peso has been hovering around record lows since August, despite the government's efforts to ease dollar demand by squeezing banks' liquidity and directly intervening in the exchange market, a move that spooked investors even more, Bloomberg News discloses. The peso was trading above 1,400 per, getting closer to the upper level of the band set by policymakers, Bloomberg News says. "We see room for further volatility in the run-up to the October" vote, said Kathryn Exum, co-head of sovereign research at Gramercy Funds Management. Prospects for Argentina to regain market access or the need for the country to do liability management next year "will hinge on Milei's performance in October – and more importantly on policy execution in the aftermath," Bloomberg News relays. Despite the negative sentiment, Milei vowed to double down on his economic plan in a speech just after the Buenos Aires results were announced, claiming that the mistakes that led to the poor electoral outcome came mostly from the political front, Bloomberg News notes. "A drastic change in political leadership" and a healthier alliance with other parties "would be very positive," said Joaquin Bagues, managing director at local brokerage Grit Capital Group, which is maintaining a buy-on-weakness bias. "Better an early correction than a late one," he added. About Argentina Argentina is a country located mostly in the southern half of South America. Its capital is Buenos Aires. Javier Milei is the current president of Argentina after winning the November 19, 2023 general election. He succeeded Alberto Angel Fernandez in the position. Argentina has the third largest economy in Latin America. The country's economy is an upper middle-income economy for fiscal year 2019, according to the World Bank. Historically, however, its economic performance has been very uneven, with high economic growth alternating with severe recessions, income maldistribution and in the recent decades, increasing poverty. In March 2022, the International Monetary Fund (IMF) approved a 30-month arrangement under an Extended Fund Facility for Argentina in the amount of SDR 31.914 billion (equivalent to US$44 billion, or 1000 percent of quota) -- with an approved immediate disbursement of an equivalent of US$9.65 billion. Argentina's IMF-supported program sought to improve public finances and start to reduce persistent high inflation through a multi-pronged strategy. On April 11, 2025, the IMF further approved a 48-month Extended Fund Facility (EFF) arrangement for Argentina totaling US$20 billion (or 479 percent of quota), with an immediate disbursement of US$12 billion, and a first review planned for June 2025 with an associated disbursement of about US$2 billion. The program is expected to help catalyze additional official multilateral and bilateral support, and a timely re-access to international capital markets. Fitch Ratings, on May 12, 2025, upgraded Argentina's Long-Term Foreign-Currency and Local-Currency Issuer Default Rating (IDR) to 'CCC+' from 'CCC'. The upgrade reflects the launch of a new IMF program, among other things. S&P Global Ratings, in February 2025 lowered its local currency sovereign credit ratings on Argentina to 'SD/SD' from 'CCC/C' and its national scale rating to 'SD' from 'raB+'. Moody's Ratings, in January 2025, raised Argentina's local currency ceiling to B3 from Caa1 and the foreign currency ceiling to Caa1 from Caa3. DBRS, Inc. upgraded Argentina's Long-Term Foreign and Local Currency Issuer Ratings to B (low) from CCC in November 2024. ============= B A H A M A S ============= FTX GROUP: Part of $167M Ch.11 SkyBridge Suit Sent to Arbitration ----------------------------------------------------------------- Clara Geoghegan at law360.com reports that a Delaware bankruptcy judge partially denied investment firm SkyBridge Capital's bid to arbitrate most of FTX's $167 million lawsuit against it, while staying bankruptcy-specific portions to let an arbitrator first decide breach of contract claims. About FTX FTX is the world's second-largest cryptocurrency firm. FTX is a cryptocurrency exchange built by traders, for traders. FTX offers innovative products including industry-first derivatives, options, volatility products and leveraged tokens. Then CEO and co-founder Sam Bankman-Fried said Nov. 10, 2022, that FTX paused customer withdrawals after it was hit with roughly $5 billion worth of withdrawal requests. Faced with liquidity issues, FTX on Nov. 9, 2022, struck a deal to sell itself to its giant rival Binance, but Binance walked away from the deal amid reports on FTX regarding mishandled customer funds and alleged US agency investigations. SBF agreed to step aside, and restructuring vet John J. Ray III was quickly named new CEO. FTX Trading Ltd (d/b/a FTX.com), West Realm Shires Services Inc. (d/b/a FTX US), Alameda Research Ltd. and certain affiliated companies then commenced Chapter 11 proceedings (Bankr. D. Del. Lead Case No. 22-11068) on an emergency basis on Nov. 11, 2022. Additional entities sought Chapter 11 protection on Nov. 14, 2022. FTX Trading and its affiliates each listed $10 billion to $50 billion in assets and liabilities, making FTX the biggest bankruptcy filer in the US this year. According to Reuters, SBF shared a document with investors on Nov. 10, 2022, showing FTX had $13.86 billion in liabilities and $14.6 billion in assets. However, only $900 million of those assets were liquid, leading to the cash crunch that ended with the company filing for bankruptcy. The Hon. John T. Dorsey is the case judge. The Debtors tapped Sullivan & Cromwell, LLP as bankruptcy counsel; Landis Rath & Cobb, LLP as local counsel; and Alvarez & Marsal North America, LLC as financial advisor. Kroll is the claims agent, maintaining the page https://cases.ra.kroll.com/FTX/Home-Index The Official Committee of Unsecured Creditors tapped Paul Hastings as counsel, FTI Consulting, Inc., as financial advisor, and Jefferies LLC as the investment banker. Young Conaway Stargatt & Taylor LLP is the Committee's Delaware and conflicts counsel. Montgomery McCracken Walker & Rhoads LLP, led by partners Gregory T. Donilon, Edward L. Schnitzer, and David M. Banker, is representing Sam Bankman-Fried in the Chapter 11 cases. White-collar crime specialist Mark S. Cohen has reportedly been hired to represent SBF in litigation. Lawyers at Paul Weiss previously represented SBF but later renounced representing the entrepreneur due to a conflict of interest. =========== B R A Z I L =========== SAMARCO MINERACAO: Fitch Hikes LongTerm IDRs to B, Outlook Positive ------------------------------------------------------------------- Fitch Ratings has upgraded Samarco Mineracao S.A.'s (Samarco) Long-Term Foreign and Local Currency Issuer Default Ratings (IDRs) to 'B' from 'B-' and Long-Term National Scale rating to 'BBB+(bra)' from 'BB(bra)'. Fitch has also upgraded Samarco's senior unsecured notes due 2031 to 'B' with a Recovery Rating of 'RR4' from 'B-'/'RR4'. The Rating Outlook is Positive. The upgrade reflects improvements in Samarco's financial flexibility after concluding its Judicial Recovery Process in Brazil, as well as the successful Phase 2 operational recovery, and progress in Germano dam decommissioning. The ratings are constrained by high leverage and ongoing Phase 3 ramp-up and funding risks. The financial impact of the 2015 Mariana dam incident is capped at USD1 billion through the end of the 2030 per bonds indenture and is included in the ratings. The Positive Outlook indicates Fitch's expectation of a growing operational profile as Phase 3 advances. This should lead to leverage improvement as well as the ongoing Germano dam decommissioning progresses. Key Rating Drivers Judicial Recovery Exit: The courts-approved formal retirement of the Judicial Recovery improves Samarco's financial flexibility by unencumbering its governance and facilitating access to working capital lines. As a result, Fitch believes a broader set of alternatives to meet phase 3 funding needs should become available, which increases the likelihood of the project approval by year end. Phase 2 Ramp-Up Achieved: Operational progress continued with the completion of the full capacity of the Phase 2 obtained in July. Fitch expects production to grow to 14.8 million tons of pellet and pellet feed sales in 2025, enabling further cost reductions. Samarco would effectively surpass 55% of full capacity recovery by year end. The phase 3 to reach 26.4 million tons by 2028 is pending final board approval but long-term operational environmental licenses were awarded, and engineering studies were concluded. Dam Decommissioning Advances: The Germano dam decommissioning passed 90% completion in June. Final works on the last phase of the geo-technical stability and vegetation protection are expected for 2H26, ahead of the previous target in 2029. Use of the Germano pit ended in 2023. Research and development studies focused on dry stacking, which aim to process ultrafine tailings and extend the mine's lifespan by four years, are expected to complete testing in 2025. Limited Reparation Outflows: The Fundao tailings dam settlement during 2024 limited the potential effects of environmental uncertainties and litigation risks. Total reparations amount to BRL170 billion (USD32 billion) and include past disbursements of BRL 38 billion (USD 7.9 billion), payment obligations of BRL 100 billion (USD 18 billion), and performance obligations of BRL 32 billion (USD 5.8 billion). As of June 30, 2025, the provision for remaining reparation payments is nearly USD13.6 billion, partly funded by the shareholders. Shareholder Support and Financial Cap: Per Samarco's 2031 bonds indenture, remediation or compensation outflows are capped at a total of USD1billion by June of 2031. Out of the expected 2025 disbursement of about USD4 billion, 95% are expected to be equally financed with shareholders equity contributions (Vale S.A (Vale - BBB/Positive Outlook) and BHP Group Limited (A/Stable Outlook). Fitch does not expect any major change in this framework or with new issuances in the short to medium term. Strengthening Business Profile: Samarco aims to re-establish itself as a low-cost, long-lived, significant pellet producer. Upon reaching full capacity by 2028, Samarco is projected to become a top three pellet exporter globally, alongside Vale and LKAB, according to metals consultancy CRU. CRU positions Samarco in the first quartile of iron ore seaborne business costs, supported by integrated operations and low-cost slurry pipelines for iron ore transportation. Weakening in Iron Ore Prices: Fitch expects iron ore prices to decrease as supply grows an demand softens but pellet premia to remain high driven by high-quality feedstock demand. Overall iron ore demand may begin to fall, driven primarily by reduced steel production in China, where construction steel demand remains lackluster. Australia and Brazil are expected to continue leading iron ore export volume growth until the Simandou project in Guinea significantly expands in 2027. CRU Group forecasts that global consumption of iron ore pellets could rise by over 10% in the next five years. Low FCF Generation: Fitch projects Samarco's EBITDA will reach approximately USD 1.0 billion in 2025 and remain at a similar level in 2026, 20% more than in 2024 spurred by the phase 2 completion. The forecast also factors in minimal working capital requirements and a decrease in capital expenditures to USD 380 million from USD 400 million in 2024, keeping capex intensity (as a percentage of revenue) above 20%. Fitch expects FCF to be positive, with average margin of 9% over 2025-2027 before reparation payments and supporting equity injections are accounted for. Gradual Deleveraging: Average gross debt between 2025 and 2026 is projected to be USD 5.2 billion, consisting of the JR's resulting senior debt of USD 4.2 billion and additional PIK accumulation. The period of intense investment and substantial remediation outflows constrain cash accumulation. As a result, Fitch expects EBITDA leverage and net leverage ratios to average 4.9x and 4.8x, respectively, in 2025-2026. Upon resumption of full capacity post-2028, leverage metrics should fall below 4.0x. Peer Analysis Samarco's (B/Stable) pellet and pellet feed production business profile is comparable to CAP S.A. (BB+/Stable), Champion Iron Limited (BB-/Stable) and Vale S.A. (BBB/Positive), despite Samarco's growing scale (at 14.8 million tons), low costs (1st quartile position) and long mine life (relationship between reserves and last year production) of about 20 years considering future production rates. Chile-based CAP produced approximately 2 million tons of iron ore pellets, supplemented by sales of more than 14 million tons of high-grade iron ore pellet and sinter feed. While positioned in the less favorable third quartile of cost, CAP benefits from a long reserve life at nearly 50 years and enhanced financial flexibility. Canada-based Champion Iron has a production capacity of approximately 15 million tons of iron ore but has a lower value-added portfolio. Champion has a lower mine life of 15 years at its Bloom Lake complex, but a low execution risk of its Quebec based Direct Reduction Pellet Feed project and a low leverage profile. Vale, the global leader in low-cost iron ore production and one of the top three global mining companies, derives about 90% of its EBITDA from iron ore and pellets. Vale produces about 38 million tons of pellets and briquettes. The company also has significant contributions from copper, nickel, and other minerals. Vale faces a more challenging operating environment in Brazil (BB/Stable) due to increased scrutiny of mining companies' governance practices following the Mariana and Brumadinho dam disasters. However, its financial outlook remains strong, with Fitch-expected EBITDA leverage below 1.0x and EBITDA net leverage below 0.6x over the medium term. Key Assumptions - Total iron ore pellet, pellet feed and pellet screening sales volumes of around 14.8 million tons in 2025, 15.3 million tons in 2026 and 15.4 million tons in 2027. - Iron ore pellet premium average USD42 per ton between 2025 and 2027. - Benchmark 62% iron ore prices average USD90/ton in 2025, USD85/ton in 2026, USD75/ton in 2027; - Capex of USD380 million in 2025 (including Phase 3 pre-commitment), USD500 million in 2026 and USD600 million in 2027; - No dividend distributions; - Foreign exchange BRL/USD Rates of 5.80 in 2025, 5.80 in 2026, and 5.80 in 2027 Recovery Analysis The recovery analysis assumes Samarco would be reorganized as a going-concern in bankruptcy rather than liquidated. Fitch assumed a 10% administrative claim. Samarco's going-concern EBITDA assumption is based on no further ramp-up of the phase 2. The going-concern EBITDA estimate reflects Fitch's view of a sustainable, post-reorganization EBITDA level upon which Fitch bases the enterprise valuation in a low iron ore price environment. An enterprise valuation multiple of 5x EBITDA is applied to the going-concern EBITDA to calculate a post-reorganization enterprise value (EV). The choice of this multiple considered the following factors: the historical bankruptcy case study exit multiples for peer companies were 4.0x-6.0x. Fitch applies a waterfall analysis to the post-default EV based on the relative claims of the debt in the capital structure. The debt waterfall assumptions consider the company's total debt. These assumptions result in a recovery rate for the secured debt within the 'RR2' range, but due to the soft cap of Brazil at 'RR4', Samarco's senior secured are rated at 'B+'/'RR4'. RATING SENSITIVITIES Factors That Could, Individually or Collectively, Lead to Negative Rating Action/Downgrade - Significant delays in increasing production; - Indications of weaker shareholder commitment to meet remediation payments when Samarco's cash flow is insufficient; - Additional legal remediation charges stemming from unfavorable litigation outcomes, after the cap ends in 2031; - Deviation from conservative financial policy; - Net leverage above 5.5x on a sustained basis; Factors That Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade - At least 75% of ramp-up of operations is achieved; - Significant progress in dam decommissioning; - Consistent net leverage ratio moving below 3.5x Liquidity and Debt Structure Samarco ended June 30, 2025 with USD416 million of cash and marketable securities, gross debt of USD4.6 billion and no short-term debt. The amortization profile has an average maturity of six years. As a result of the JR, total debt was restructured to USD7.7 billion from USD11.4 billion. USD3.7 billion of new notes due in 2031 were exchanged for the past non-performing indebtedness (due in 2022, 2023, and 2024) of USD4.9 billion in December 2023. The unsecured debt has Payment-In-Kind features that decrease significantly in 2026 and end by 2028. USD260 million in 9% senior unsecured notes owed to shareholders were issued at the end of 2023. USD3.85 billion of indebtedness with shareholders was converted into a subordinated instrument with no cash or PIK interest obligation and a 2036 maturity. About USD27 million of out of court debt remains and USD17.7 million of BRL denominated debentures. Issuer Profile Samarco Mineracao is a leading iron ore pellet producer from Minas Gerais and Espirito Santo, Brazil. It resumed operations in 2020 after a tailings dam incident disrupted operations for five years and sent the company into bankruptcy protection. MACROECONOMIC ASSUMPTIONS AND SECTOR FORECASTS Fitch's latest quarterly Global Corporates Macro and Sector Forecasts data file which aggregates key data points used in its credit analysis. Fitch's macroeconomic forecasts, commodity price assumptions, default rate forecasts, sector key performance indicators and sector-level forecasts are among the data items included. ESG Considerations Samarco Mineracao S.A. has an ESG Relevance Score of '4' for Employee Wellbeing due to the remaining work required to improve dam monitoring and upstream dams' de-characterization. Dry tailings piling will be used without the operation of dams, while heightening attention to the safety of geotechnical structures and to the de-characterization of the Germano mining dam will continue along with the capacity utilization resumption efforts under way. This has a negative impact on the credit profile and is relevant to the ratings in conjunction with other factors. The highest level of ESG credit relevance is a score of '3', unless otherwise disclosed in this section. A score of '3' means ESG issues are credit-neutral or have only a minimal credit impact on the entity, either due to their nature or the way in which they are being managed by the entity. Fitch's ESG Relevance Scores are not inputs in the rating process; they are an observation on the relevance and materiality of ESG factors in the rating decision. Entity/Debt Rating Recovery Prior ----------- ------ -------- ----- Samarco Mineracao S.A. LT IDR B Upgrade B- LC LT IDR B Upgrade B- Natl LT BBB+(bra) Upgrade BB(bra) senior unsecured LT B Upgrade RR4 B- USIMINAS: Fitch Affirms 'BB' LongTerm IDRs, Outlook Stable ---------------------------------------------------------- Fitch Ratings has affirmed Usinas Siderurgicas de Minas Gerais S.A.'s (USIMINAS) Long-Term Foreign and Local Currency Issuer Default Ratings (IDRs) at 'BB' and National Scale rating at 'AA+(bra)'. Fitch has also affirmed the 'BB' rating for the senior unsecured notes due in 2032 issued by Usiminas International S.a r.l. and guaranteed by Usiminas. The Rating Outlook is Stable. Usiminas' ratings reflect its leadership in Brazil's flat steel market, vertical integration from mining to distribution, and strong pricing power from a high share of value-added products. They also reflect a profitability rebound as efficiency projects come online — energy and coal injection by 2026 and coke batteries by 2028 or later. Constraints include ineffective trade measures and rising import pressure on low profitability. Fitch expects leverage to remain contained, with EBITDA leverage/net leverage of 3.2x/0.4x, respectively, in 2025 and 2.8x/0.5x, respectively, in 2026, with total/net debt averaging BRL6.4bn and BRL1.0bn, respectively, through 2027. Key Rating Drivers Robust Business Position: Usiminas holds a leading position in Brazil's flat steel market and maintains a strong presence in the domestic automotive supply chain. The company is vertically integrated across the value chain, from mining and crude steelmaking to downstream transformation and distribution. Its sales mix is weighted toward higher value-added products, such as galvanized and heavy plate, which represented roughly 40% of sales in 2024 and support pricing resilience and reduced demand sensitivity. Challenging Steel Market: Despite some resilience in domestic demand, tariff and quota measures have been ineffective at preventing price erosion. Imports, particularly from China, have risen sharply with import penetration reaching a record 23% in 1H25, up from 18.4% in 1H24. Against this backdrop, Usiminas' cost-control initiatives in energy, coking-coal battery efficiency and the implementation of pulverized coal injection are expected to lift EBITDA per ton to about USD70 in 2026, from USD57 in 2025. Recovering Mining Operations: Fitch expects iron ore sales to recover to about 9.0 million tons in 2026 from 8.5 million tons in 2024 as operations in new mining areas consolidate. This has also supported a reduction in costs, with cash costs averaging BRL121.5/ton in 1H25 versus BRL134/ton in 2024. According to CRU, Usiminas' mining costs are in the fourth quartile of the seaborne iron ore cost curve, close to USD60/ton. Limited Cash Flows: Usiminas' EBITDA is projected at BRL1.9 billion in 2025, supported by cost savings and mining recovery. Fitch expects working capital to stabilize and maintains capex flexibility in 2025 amid a lackluster steel outlook. The base case implies a 0.3% free cash flow margin after BRL1.3 billion in capex and less than BRL300 million in dividends. (CFO-capex)/debt is about 6% in 2025, declining to 0.4% in 2026 as capex ramps. Strong Capital Structure: Usiminas has sustained low leverage over the past five years. Fitch projects gross and net debt to remain modest, averaging about BRL6.4 billion and BRL1.0 billion between 2025 and 2027. The anticipated EBITDA improvement in 2025 signals the start of normalization after a cyclical peak in 2024. Fitch expects gross and net leverage of 3.2x and 0.4x, respectively, in 2025 and 2.8x and 0.5x, respectively, in 2026. Peer Analysis Usiminas' business risk mirrors that of Companhia Siderúrgica Nacional (BB/Negative) as both are highly exposed to Brazil's steel market. CSN is more diversified (larger mining and cement segments), while Usiminas' strong niche positioning is an advantage. In terms of costs, CSN sits in CRU's HRC first quartile versus Usiminas in the lower fourth quartile and Gerdau S.A. (BBB/Stable) in the third quartile. Usiminas and CSN trail Gerdau's profile: Gerdau has a diversified footprint, significant overseas cash flow (mainly in the U.S.), and a more flexible model. Capacity also favors Gerdau at 17 million tons of crude steel per year versus Usiminas' 5 million and CSN's 5.6 million. Internationally, United States Steel (BBB-/Stable) and JSW Steel Limited (BB/Stable) have similar blast furnace/basic oxygen furnace flat steel profiles but ship far more than Usiminas. JSW is in the first half of CRU's cost curve; US Steel, like Usiminas, is in the fourth quartile. US Steel and Usiminas both run low EBITDA net leverage below 1.0x while JSW is around 3.0x. Among Brazilian peers, Gerdau maintains the strongest balance sheet, has the most manageable amortization, and has repeatedly strengthened its capital structure via asset sales or equity. CSN's gross debt remains high versus Gerdau and Usiminas. Usiminas' net leverage has averaged 0.5x over the past five years versus Gerdau's 0.8x and CSN's 2.6x. Key Assumptions - Iron ore prices in line with Fitch's commodity price assumptions (iron ore prices average USD90/ton in 2025, USD85/ton in 2026 and USD75/ton in 2027); - Iron ore COGS/ton decrease 19% in 2025 and 8% in 2026; - Iron ore sold rises to 9.0 million tons in 2025 and remains at that level in 2026; - Total steel volumes sold remain at 4.3 million tons in 2025 and beyond; - Steel EBITDA/ton grows to USD57.0 in 2025 and to USD70.7 in 2026; - Iron ore EBITDA/ton falls to USD11 in 2025 and to USD10 in 2026; - Flexibility to reduce capex to around BRL1.3 billion in 2025 and BRL1.6 billion in 2026; - Foreign exchange BRL/USD rates of 5.80 in 2025, 5.80 in 2026, and 5.80 in 2027. RATING SENSITIVITIES Factors that Could, Individually or Collectively, Lead to Negative Rating Action/Downgrade - Persistently negative (CFO-capex)/debt ratio; - Failure to improve cost position consistent with a third-quartile level; - EBITDA leverage ratios consistently above 4.5x; - Maintenance of net leverage ratios above 3.5x. Factors that Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade - Additional diversification in products and geography; - Consistent and positive FCF generation; - EBITDA margins higher than 12% through the cycle; - EBITDA leverage ratios consistently below 3.5x; - Net leverage ratios consistently below 2.5x. Liquidity and Debt Structure Usiminas has maintained a robust liquidity position and good access to credit markets, which are important rating considerations. Usiminas had BRL5.6 billion of cash and marketable securities at June 30, 2024 and BRL6.5 billion of Fitch adjusted debt. The debt mainly consists of a USD750 million (BRL4.3 billion) note that matures in 2026 and BRL2.2 billion of Brazilian real-denominated debentures that mature from 2027 to 2032. The company's recent announcement of BRL1.6 billion to 2.0 billion of debentures, the proceeds of which were used to repay the 2026 notes and local debentures, improved Usiminas' maturity profile and lessened its refinancing risk. Issuer Profile Usiminas is the largest domestic supplier of flat steel products in Brazil, holding approximately 35% share of the flat steel market in the local market. The company has a robust position within the local automotive industry. MACROECONOMIC ASSUMPTIONS AND SECTOR FORECASTS Fitch's latest quarterly Global Corporates Macro and Sector Forecasts data file which aggregates key data points used in its credit analysis. Fitch's macroeconomic forecasts, commodity price assumptions, default rate forecasts, sector key performance indicators and sector-level forecasts are among the data items included. ESG Considerations The highest level of ESG credit relevance is a score of '3', unless otherwise disclosed in this section. A score of '3' means ESG issues are credit-neutral or have only a minimal credit impact on the entity, either due to their nature or the way in which they are being managed by the entity. Fitch's ESG Relevance Scores are not inputs in the rating process; they are an observation on the relevance and materiality of ESG factors in the rating decision. Entity/Debt Rating Prior ----------- ------ ----- Usiminas International S.a r.l. senior unsecured LT BB Affirmed BB Usinas Siderurgicas de Minas Gerais S.A. (Usiminas) LT IDR BB Affirmed BB LC LT IDR BB Affirmed BB Natl LT AA+(bra)Affirmed AA+(bra) =========================== C A Y M A N I S L A N D S =========================== OMNIYAT SUKUK 1: Fitch Rates Upcoming USD200MM Programme 'BB-' -------------------------------------------------------------- Fitch Ratings has assigned Omniyat Holdings Ltd's (Omniyat, BB-/Stable) increased trust certificate issuance programme and an upcoming issue of around USD200 million under the programme a rating of 'BB-' and an expected rating of 'BB-(EXP)', respectively. The programme is issued by Omniyat Sukuk 1 Limited. The Recovery Rating is 'RR4'. Omniyat Sukuk 1 Limited is the trustee and has been incorporated solely for the purpose of issuing the certificates. BNY Mellon Corporate Trustee Services Limited is acting as delegate of the trustee. Omniyat is the obligor, seller, lessee and service agent. The programme allows for the issuance of trust certificates in an aggregate face amount of up to USD2 billion (or equivalent) The assignment of the final rating is contingent on the receipt of final transaction documents materially conforming to information already reviewed. If these conditions are not met, or if the instrument is not put into place, Fitch will review the rating. Omniyat will use the proceeds for general corporate purposes, including green financing and debt refinancing. Key Rating Drivers The debt rating is in line with Omniyat's Long-Term Issuer Default Rating (IDR) and senior unsecured rating of 'BB-' This reflects Fitch's view that a default of these senior unsecured obligations would reflect a default of Omniyat, in accordance with the agency's rating definitions. Fitch has given no consideration to any underlying assets or collateral provided, as the agency believes that the trustee's ability to satisfy payments due on the certificates will ultimately depend on Omniyat meeting its unsecured payment obligations to the trustee under the transaction documents described in the base offering circular and other supplementary documents. In addition to Omniyat's propensity to ensure repayment of the trust certificates, Fitch considers Omniyat as contractually required to ensure the full and timely repayment of Omniyat Sukuk 1 Limited's obligations. This is due to its various roles and obligations under the sukuk structure and documentation, especially but not limited to the below features: - On any dissolution or default event, and following the receipt of a dissolution notice, the certificates of the relevant series are immediately due and payable at the dissolution distribution amount. The trustee will have the right under the purchase undertaking to require the obligor to purchase and accept the transfer on the dissolution event date of all the trustee's rights, title, interests, benefits and entitlements in, to and under the lease assets at the exercise price. - The exercise price payable by Omniyat under the purchase undertaking to the trustee, together with the aggregate amount of the deferred sale price then outstanding, if any, are intended to fund the dissolution amount payable by the trustee under the trust certificates. The dissolution amount should equal the sum of the outstanding face amount of such trust certificate; and any due and unpaid periodic distribution amounts for such certificates, or such other amount specified in the applicable pricing supplement. - The rental due on a rental payment date and the Murabaha profit instalment, will be sufficient to fund the periodic distribution amounts payable by the trustee in respect of the relevant certificates. - The lessor shall agree that the lessee may sub-lease the lease asset to any third party, provided that: (i) any such sub-lease does not in any way affect, impair or reduce the obligations of the lessee; and (ii) any use of the lease assets under such sub-lease does not and will not contravene the principles of Shari'a. If the lessee failed to comply, it would constitute a dissolution event. - The lessee (Omniyat) shall permit the lessor and any person authorised by the lessor at all reasonable times to inspect and examine the condition of the lease assets of each series. If the lessee failed to comply, it would constitute a dissolution event. - Additionally, if the lessee failed to maintain the lease assets in suitable condition (other than fair wear and tear), the lessor shall be entitled, but not obliged, to take possession of the lease assets and carry out all necessary remedial actions (at the cost and expense of the lessee) to ensure that the lease assets are in suitable condition for their current or intended use. -In a loss event (unless the lease assets are replaced), if there is a shortfall from the insurance proceeds, the servicing agent (Omniyat) must pay the loss shortfall amount directly into the transaction account. If the servicing agent fails to comply with the obligation to insure the assets against total loss or partial loss events, it must immediately notify the trustee and the delegate in writing, with the details of non-compliance; this would constitute a dissolution event. - Omniyat shall irrevocably and unconditionally authorise the trustee to, as soon as is practicable, register the lease assets in the name of the trustee or its nominee, agent, delegate or assignee at the Dubai Land Department, if Omniyat has failed to purchase the lease assets and as a result has failed to pay the exercise price, and the trustee is unable to make a claim under the indemnity. This is provided it is possible to register the lease assets under all applicable laws and a total loss event has not occurred and is continuing. - Fitch does not believe this clause is sufficient for it to treat the debt as secured or higher ranking than existing indebtedness, due to uncertainties and complexities related to the legal framework and regulations, Omniyat's willingness and ability to register the lease assets, and the lack of precedents. Its assessment of the effect of future asset-registration clauses will be case by case, and Fitch is monitoring developments in this evolving area. - Fitch could reassess the above assumption regarding Omniyat's ratings and debt ranking, if warranted by developments. - The payment obligations of Omniyat under the transaction documents, will be direct, unconditional, unsubordinated, and unsecured obligations. Subject to certain negative pledge conditions, they will at all times rank at least pari passu with all present and future unsecured and unsubordinated obligations of Omniyat. from time to time outstanding. The pari-passu ranking does not require Omniyat to make equal or rateable payment(s) on its other unsecured obligations at the same time as, or as a condition, of paying sums due under the transaction documents and vice versa. - The sukuk documentation will include an obligation on Omniyat to ensure that at all times, the tangible asset ratio defined as the aggregate value of the lease assets/aggregate value of the lease assets and the deferred sale price outstanding is more than 50%. Failure of Omniyat to comply with this obligation will not constitute an obligor event. If the tangible asset ratio falls below 33% (tangibility event), the certificate holders will have the option to require the redemption of all or any of their trust certificates at the dissolution amount and the trust certificates will be delisted. In this event, there would be implications for the tradability and listing of the trust certificates. - Fitch expects Omniyat to maintain a tangible asset ratio above 50%. The obligor has a small base of unencumbered tangible assets amounting to USD345 million, of which USD100 million will be allocated to the upcoming sukuk instrument. As such, Omniyat's asset base is sufficiently strong to support the trust certificates. - The terms of the trust certificates will include a negative pledge provision, obligor event, change-of-control clause, restrictive and financial covenants with respect to the trustee. The transaction documents will be governed by English law and the laws of the Emirate of Dubai and, to the extent applicable in the Emirate of Dubai, the federal laws of the United Arab Emirates. Fitch does not express an opinion on whether the relevant transaction documents are enforceable under any applicable law. However, Fitch's rating on the trust certificates reflects the agency's belief that Omniyat would stand behind its obligations. - Fitch does not express an opinion on the trust certificates' compliance with Shari'a principles when assigning ratings to the trust certificates. Peer Analysis The instrument's rating is derived from Omniyat's Long-Term IDR. Key Assumptions The instrument is issued on behalf of Omniyat via the special-purpose vehicle Omniyat Sukuk 1 Limited. RATING SENSITIVITIES Factors that Could, Individually or Collectively, Lead to Negative Rating Action/Downgrade - A downgrade of Omniyat's IDR would lead to similar action on the sukuk rating. The sukuk's rating may also be sensitive to adverse changes to the roles and obligations of Omniyat and Omniyat Sukuk 1 Limited under the trust certificates' structure and documents Factors that Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade - An upgrade of Omniyat's IDR will be mirrored in the sukuk rating Liquidity and Debt Structure See Omniyat Rating Action Commentary 'Fitchxxx' dated XX. Issuer Profile Omniyat is a Dubai-based homebuilder focused on the luxury end of the housing market. MACROECONOMIC ASSUMPTIONS AND SECTOR FORECASTS Fitch's latest quarterly Global Corporates Macro and Sector Forecasts data file which aggregates key data points used in its credit analysis. Fitch's macroeconomic forecasts, commodity price assumptions, default rate forecasts, sector key performance indicators and sector-level forecasts are among the data items included. ESG Considerations Omniyat has an ESG Relevance Score of '4' for Governance Structure. This reflects significant dependence on the decision-making of the founders, which has a negative impact on the credit profile, and is relevant to the ratings in conjunction with other factors. The highest level of ESG credit relevance is a score of '3', unless otherwise disclosed in this section. A score of '3' means ESG issues are credit-neutral or have only a minimal credit impact on the entity, either due to their nature or the way in which they are being managed by the entity. Fitch's ESG Relevance Scores are not inputs in the rating process; they are an observation on the relevance and materiality of ESG factors in the rating decision. Entity/Debt Rating Recovery ----------- ------ -------- Omniyat Sukuk 1 Limited senior unsecured LT BB- New Rating RR4 senior unsecured LT BB-(EXP) Expected Rating RR4 =================================== D O M I N I C A N R E P U B L I C =================================== [] DOMINICAN REPUBLIC: Tourism Contributes US$9BB/Yr to Economy --------------------------------------------------------------- Dominican Today reports that the tourism sector contributes US$9 billion annually to the Dominican Republic's economy through the country's natural capital—the collection of natural resources and ecosystem services—representing 22% of the nation's GDP, according to economist Victor Gomez Valenzuela. He shared these insights during a lecture at Intec University as part of the fourth edition of the Permanent Seminar on Dominican Reality (Semper), supported by a World Bank study he led. Gomez Valenzuela highlighted that the Dominican Republic has become the sixth-highest performing economy in Latin America, Central America, and the Caribbean, largely driven by tourism and growth in other service sectors, according to Dominican Today. Compared regionally, the Dominican economy is about 30% larger than Costa Rica's, three times Honduras', four times Nicaragua's, and six times Haiti's, positioning the country as a regional economic leader, the report notes. He explained that the economy is predominantly service-based, with moderate industrial and manufacturing activity, while agriculture contributes less over time as the economy modernizes, the report relays. Natural capital provides both use values, such as water, wind, and solar energy, and non-use values, such as aesthetic enjoyment, the report notes. Regarding tourism, Gomez Valenzuela noted that 20% of the sector's production value depends on the country's natural beauty, particularly its pristine beaches and coastal ecosystems, which attract visitors seeking unspoiled scenic landscapes, the report adds. About Dominican Republic The Dominican Republic is a Caribbean nation that shares the island of Hispaniola with Haiti to the west. Capital city Santo Domingo has Spanish landmarks like the Gothic Catedral Primada de America dating back 5 centuries in its Zona Colonial district. Luis Rodolfo Abinader Corona is the current president of the nation. TCR-LA reported in April 2019 that Juan Del Rosario of the UASD Economic Faculty cited a current economic slowdown for the Dominican Republic and cautioned that if the trend continues, growth would reach only 4% by 2023. Mr. Del Rosario said that if that happens, "we'll face difficulties in meeting international commitments." An ongoing concern in the Dominican Republic is the inability of participants in the electricity sector to establish financial viability for the system. Standard & Poor's credit rating for Dominican Republic was raised to 'BB' in December 2022 with stable outlook. Moody's credit rating for Dominican Republic was last set at Ba3 in August 2023 with the outlook changed to positive. Fitch, in December 2023, affirmed the Dominican Republic's Long-Term Foreign-Currency Issuer Default Rating (IDR) at 'BB-' and revised the outlook to positive. =========== M E X I C O =========== PETROLEOS MEXICANOS: Fitch Puts 'BB' LongTerm IDRs on Watch Pos. ---------------------------------------------------------------- Fitch Ratings has placed Petroleos Mexicanos' (PEMEX) 'BB' Long-Term Local and Foreign Currency Issuer Default Ratings (IDRs) on Rating Watch Positive (RWP). Fitch has also placed Pemex's 'BB' senior unsecured notes outstanding on RWP. The RWP reflects Fitch's expectation that PEMEX's Government-Related Entity (GRE) Overall Linkage Score (OLS) will improve, driven by a higher assessment of the Decision-Making and Oversight subfactor, contingent on the successful execution of the company's USD9.9 billion tender offer across 11 security series and funded with cash proceeds from the Mexican government, as announced on Sept. 2, 2025. The improved OLS would indicate a closer linkage between PEMEX and the sovereign, thus changing the approach to notching from top-down minus two to top-down minus one and resulting in a one-notch upgrade. Key Rating Drivers Improved GRE Linkage Score: Mexico has taken legislative actions that allow PEMEX to share a debt ceiling with the secretary of finance. These changes are intended to materially address PEMEX's leverage and funding cost. If the announced USD9.9 billion tender for 11 series of PEMEX securities is executed as planned and financed with United Mexican States cash, it would operationalize the legislative intent and provide tangible evidence of stronger government direction, support and control over PEMEX's financial policy. That scenario would trigger a revision of the Oversight and Decision-Making subfactor, per Fitch's GRE criteria, from 'Very Strong' from 'Strong' and create an additional five-point increase in PEMEX's OLS to 35 from 30. This score would lead to a change in the approach to notching of PEMEX's IDR from top-down minus two to top-down minus one, for an IDR upgrade to 'BB+'. Financial Profile Persistently Weak: PEMEX's Standalone Credit Profile (SCP) is 'ccc', reflecting persistent negative FFO, EBITDA compression due to lower crude prices and production, tight liquidity, and unrelenting losses in the downstream business. On June 30, 2025, PEMEX had USD98.8 billion in debt and interest expenses of USD2.0 billion, over half of the quarter's EBITDA. Expected leverage through the rating horizon exceeds 15x. The SCP could improve after the tender offer closes, reflecting enhanced financial flexibility and liquidity. Deteriorating Operational Performance: Fitch believes the multiyear underinvestment in both the upstream and downstream assets will continue eroding operational and financial performance. Multiple incidents at critical assets signal a lack of maintenance capex. The new administration has been vocal regarding a cap to upstream production and has intensified efforts in the downstream, which will continue to pressure liquidity unless ongoing government support is provided to address capex and debt service. The production and development of new fields has declined in the last few years, making exploration and production (E&P) capex a top risk. ESG - GHG Emissions & Air Quality: PEMEX's history with GHG emissions poses an ESG concern. Multiple fires at critical assets will likely affect local communities and the environment. Fitch believes operational management and the lack of maintenance capex for core assets and infrastructure will further challenge PEMEX's financial profile. This was a key consideration in the 'B+' rating, as PEMEX's ESG track record can further impair its ability to raise capital. ESG - Hazardous Materials Management: The last 10 years of underinvestment has contributed to the deterioration of transportation infrastructure. Certain pipelines have had leaks, releasing contaminating products near nature and population. This issue poses an ESG concern as environmental remediation costs and related litigation could further pressure the company's liquidity position. ESG - Employee Wellbeing: Employee Wellbeing is also an ESG concern in assessing PEMEX's credit profile. Several incidents stemming from underinvestment in critical assets have caused injuries and fatalities of employees and contractors. Many of these have also had damaging environmental impacts, likely affecting the company financially and reputationally. ESG - Management Strategy: PEMEX's management track record and its financial distress could complicate its ability to execute on its strategy. Peer Analysis PEMEX's link to the sovereign is weaker compared to Petroleo Brasileiro S.A. (Petrobras) (BB/Stable), Ecopetrol S.A. (BB+/Negative), and Empresa Nacional del Petroleo (ENAP) (A-/Stable) which benefit from stronger government support and increased oversight. However, PEMEX compares favorably to Petroleos del Peru - Petroperu S.A. (CCC+) as Peru's government only meets Petroperu's immediate needs without improving its capital structure. Petroperu's market share drop to 25% from 45% caused minimal disruptions due to alternative fuel imports. Fitch believes regional governments, except for Mexico and Peru, have taken steps to ensure their national oil and gas companies' SCPs remain viable long term. Fitch views PEMEX's SCP as commensurate with the 'ccc' level, which is 10 notches below Petrobras's 'bbb' SCP and nine notches below Ecopetrol's 'bbb-' SCP. The differences are primarily due to PEMEX's weaker capital structure and increasing debt. PEMEX's SCP reflects the company's large transfers to Mexico's federal government, weakening operations, and a large and increasing financial debt balance when compared with 1P reserves and elevated EBITDA-adjusted leverage. Comparatively, Ecopetrol and Petrobras significantly strengthened their capital structures and maintained stable operating profiles. Key Assumptions - Average West Texas Intermediate crude prices of USD65bbl in 2025, USD60bbl in 2026, and USD57bbl for the midcycle; - Henry Hub prices of USD3.6/mcf in 2025, USD3.5/mcf in 2026 and USD3.0/mcf thereafter; - Oil production stays flat at 1.75mmboed; - Annual capex average of USD12 billion; - Government take to average 60% of EBITDA per annum; - Short-term debt and debt maturities are refinanced at 8%; - PEMEX will receive necessary support from the government to ensure adequate liquidity and debt service payments; - Refined product volumes growth moves aligned with Fitch's real GDP growth forecasts of 0.05% in 2025 and 0.7% in 2026 and thereafter; - P-Cap transaction addresses USD5 billion of 2025 bank debt and USD6 billion of 2026 bank debt; - Government support of USD6.7 billion in 2025 and USD13.5 billion in 2026. RATING SENSITIVITIES Factors That Could, Individually or Collectively, Lead to Negative Rating Action/Downgrade - A downgrade of Mexico's sovereign rating; - Weakened ability and/or willingness of the government to meaningfully support PEMEX; - An inability to successfully manage supplier liability. Factors That Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade - Successful closing of the announced tender offer financed with cash proceeds from the Mexican government; - Materialization of further support from the government; - An upgrade of Mexico's sovereign rating; - An irrevocable guarantee from Mexico's government to sustainably cover more than 75% of PEMEX's debt. Liquidity and Debt Structure PEMEX's liquidity position remains weak because of negative FCF, which resulted in a relatively low cash position and reduced availability of its lines of credit. The company reported total cash and equivalents of MXN96.4 billion as of June 2025 and reported MXN1.9 trillion of total debt with MXN529 billion in short-term debt. After the P-cap transaction, as of the end of August PEMEX has repaid USD7.8 billion of its bank debt, including USD4.6 billion of its revolving credit lines. Issuer Profile PEMEX, Mexico's state-owned oil and gas company, is the country's largest enterprise and one of the world's largest vertically integrated petroleum companies. MACROECONOMIC ASSUMPTIONS AND SECTOR FORECASTS Fitch's latest quarterly Global Corporates Macro and Sector Forecasts data file which aggregates key data points used in its credit analysis. Fitch's macroeconomic forecasts, commodity price assumptions, default rate forecasts, sector key performance indicators and sector-level forecasts are among the data items included. ESG Considerations PEMEX has an ESG Relevance Score of '4' for Governance Structure due to its nature as a majority government-owned entity and the inherent governance risk that arises with a dominant state shareholder. This has a negative impact on the credit profile and is relevant to the rating in conjunction with other factors. The highest level of ESG credit relevance is a score of '3', unless otherwise disclosed in this section. A score of '3' means ESG issues are credit-neutral or have only a minimal credit impact on the entity, either due to their nature or the way in which they are being managed by the entity. Fitch's ESG Relevance Scores are not inputs in the rating process; they are an observation on the relevance and materiality of ESG factors in the rating decision. Entity/Debt Rating Prior ----------- ------ ----- Petroleos Mexicanos (PEMEX) LT IDR BB Rating Watch On BB LC LT IDR BB Rating Watch On BB senior unsecured LT BB Rating Watch On BB PETROLEOS MEXICANOS: Moody's Ups CFR & Sr. Unsecured Notes to B1 ---------------------------------------------------------------- Moody's Ratings confirmed Petroleos Mexicanos' (PEMEX) Baseline Credit Assessment (BCA) of ca, which reflects its standalone credit strength. At the same time, Moody's upgraded PEMEX's Corporate Family Rating, the backed senior unsecured ratings on the company's existing notes, as well as the backed senior unsecured ratings of Pemex Project Funding Master Trust, to B1 from B3. Moody's also upgraded both entities' backed senior unsecured MTN program to (P)B1 from (P)B3 respectively. The outlooks were changed to stable from ratings under review. Previously, the ratings were on review for upgrade. These rating actions conclude the review for upgrade that was initiated on August 18, 2025. "The ratings upgrade reflects a stronger commitment from the current administration of the Government of Mexico to support PEMEX meet its financial obligations. The Strategic Plan 2025–2035 marks a shift in the government's approach, with three coordinated transactions that represent a meaningful step toward strengthening PEMEX's financial position for the next five years. However, PEMEX continues to face persistent structural challenges, which Moody's expects will continue to pressure its financial performance and result in sustained negative free cash flow." said Roxana Muñoz, Vice President – Senior Credit Officer at Moody's Ratings. RATINGS RATIONALE The confirmation of PEMEX's Baseline Credit Assessment (BCA) of ca reflects Moody's expectations that the company will continue to generate negative free cash flow as a result of persistent operational challenges, including declining production due to limited capital investment and ongoing losses in the refining segment. While the Strategic Plan outlines the potential use of the Investment Fund to support capital expenditures further details will be key to assessing its viability and attractiveness to private sector participants. Although this strategy represents an important step toward improving PEMEX's liquidity conditions, the company still faces significant cash needs related to operational losses, supplier payments and debt amortizations. Unless structural measures are implemented to effectively reduce these cash requirements, the ratings will remain constrained. The upgrade to B1 incorporates Moody's revised assumption of government support to Very High from High. The change reflects recent actions taken by the Government of Mexico under "PEMEX's Strategic Plan 2025-2035", which signal a structural shift in the level of support provided to the company. PEMEX, in coordination with Mexico's Ministry of Finance and Mexico's Ministry of Energy, is executing a financing strategy under which Mexico will commit future equity-like contributions to PEMEX through the $12 billion P-CAP structure and will partially fund investments in the upstream business and suppliers through the Investment Fund for PEMEX. Additionally, PEMEX has launched a tender offer of up to $9.9 billion for its long-term debt, supported by government transfers funded through sovereign debt issuance. While these measures provide short-term relief to PEMEX's liquidity pressures—particularly around revolving credit facilities, credit lines, and upcoming maturities—the company's ca BCA continues to reflect substantial funding needs. These are estimated at approximately $7 billion per year in both 2026 and 2027, driven by ongoing operational challenges and remaining debt maturities. PEMEX's B1 ratings take into consideration Moody's joint default analysis, which includes the rating agency's assumptions of Very High government support in case of need and Very High default correlation between PEMEX and the Government of Mexico, resulting in six notches of uplift from the company's ca BCA. Given the strong linkages between PEMEX and the Government of Mexico, governance risk remains a relevant consideration in the rating action. PEMEX has weak liquidity and is highly dependent on government support. On June 30, 2025, the company had $5.1 billion in cash and available committed revolving credit facilities equivalent to MXN 7.5 billion and $500 million to address debt maturities. In addition, Moody's estimates that it will have substantial negative free cash flow over the next 12-18 months, driven by insufficient operating cash generation to pay interest expenses, taxes and capex. The stable outlook on PEMEX's ratings is based on Moody's expectations that the company's business strategy and financial profile will remain unchanged in the next 12-18 months. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS An upgrade of PEMEX's ratings could arise if PEMEX puts in place a sustainable strategy with evidence of recovery of the operating performance and cash flow generation. Factors that could lead to an upgrade of the BCA and potentially a higher rating for PEMEX would include the ability to strengthen further its liquidity position and internally fund sufficient capital reinvestment to fully replace reserves, deliver modest production growth and generate free cash flow for debt reduction. A downgrade of the Government of Mexico's Baa2 rating would likely result in a downgrade of PEMEX's rating. For an affirmation of PEMEX's B1 rating following a sovereign downgrade, the company's BCA would have to continue improving. Because PEMEX's rating is highly dependent on support from the Government of Mexico, a change in Moody's assumptions about government support and its timeliness could lead to a downgrade of PEMEX's rating. A downgrade of the BCA could also lead to a downgrade of PEMEX's rating. Factors that could lead to a lower BCA include material increases in net debt, an operating performance worse than forecasted, reserve declines and decreases in reserve life. The methodologies used in these ratings were Integrated Oil and Gas published in September 2022. The net effect of any adjustments applied to rating factor scores or scorecard outputs under the primary methodology(ies), if any, was not material to the ratings addressed in this announcement. Founded in 1938, PEMEX is the Government of Mexico's national oil company, with fully integrated operations in oil and gas exploration and production, refining, distribution and retail marketing, as well as petrochemicals. PEMEX is also a leading crude oil exporter, around 30% of its crude is exported to various countries, mainly to the US and Asia. In the twelve months ended December 31, 2024 the company produced an average of 2,337 thousand barrels per day of oil equivalent. =========== P A N A M A =========== BLADEX: Fitch Gives 'BB-(EXP)' Rating on Upcoming USD Sub. Notes ---------------------------------------------------------------- Fitch Ratings has assigned Banco Latinoamericano de Comercio Exterior, S.A.'s (Bladex) upcoming issue of U.S. dollar-denominated perpetual subordinated notes an expected long-term rating of 'BB-(EXP)'. The notes will constitute additional Tier 1 (AT1) capital of the bank in accordance with Panamanian banking laws. The amount of the notes is yet to be determined. The proceeds from the issue will be used for general corporate purposes, working capital, loan portfolio growth, and new product and service offerings. The notes intend to strengthen the bank's primary capital. The final rating is contingent upon receipt of final documents confirming the information already received. Key Rating Drivers The expected rating for the notes is four notches below Bladex's Viability Rating (VR) of 'bbb', reflecting two notches for high loss severity due to their deep subordination and two notches for incremental non-performance risk, given their fully discretionary, non-cumulative coupon cancellation feature according to Fitch's criteria. The agency has used the bank's VR as the anchor rating because it considers this to better reflect nonperformance risk. The notes are perpetual, with no fixed maturity or fixed redemption date, with semiannual interest payments which also will be noncumulative. The bank will have the option to redeem the notes, subject to the prior approval of Panamanian banks regulator, in whole or in part after the seventh anniversary of the issue date or on any interest payment date thereafter. The notes will rank junior in right of payment with respect to all senior debt of the bank, pari passu among themselves and any other unsecured and AT1 capital subordinated indebtedness of the bank. The notes will be senior in right of payment to Bladex's common and preferred shares and other instruments ranking junior in right of payment to the notes in a liquidation event. Interest on the notes will not be due or payable on a payment date, and such interest will not accrue under certain circumstances including when the issuer, at its sole discretion, elects to suspend the payment and accrual thereof, which will not constitute an event of default. In addition, pursuant to Panamanian law, in the case of an administrative taking of control of the issuer by the Superintendency of Banks of Panama and subsequent reorganization, the notes could be used to absorb the bank's losses. The notes will provide for the write-off on a permanent basis, upon the occurrence of a reorganization process of the issuer, by determination of the regulator to write off the notes or if the bank's Tier 1 capital ratio falls below 5.125% (a non-viability event). Bladex's VR reflects its extensive geographic diversification, its notable business and funding profiles highlighted by a widely recognized regional franchise and a strong position in the market it serves, and its robust risk framework which has translated into resilient financial performance. As of June 2025, its CET1 to risk-weighted assets ratio and capital adequacy ratio (regulatory) were 15.0% and 13.9%, respectively. For further information about the rating drivers and rating sensitivities for Bladex, please see "Fitch Affirms Bladex's IDR at 'BBB'; Outlook Stable" dated May 15, 2025. Rating Sensitivities Factors that Could, Individually or Collectively, Lead to Negative Rating Action/Downgrade - The rating of the notes is sensitive to movements in the bank's VR in any direction, and the baseline scenario is that the notching will likely remain -4 relative to the bank's VR. Factors that Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade - The rating of the notes is sensitive to movements in the bank's VR in any direction, and the baseline scenario is that the notching will likely remain -4 relative to the bank's VR. 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 ----------- ------ Banco Latinoamericano de Comercio Exterior, S.A. Subordinated LT BB-(EXP) Expected Rating ===================== P U E R T O R I C O ===================== ASOCIACION HOSPITAL: Hires CPA Luis R. Carrasquillo as Consultant ----------------------------------------------------------------- Asociacion Hospital El Maestro, Inc. seeks approval from the U.S. Bankruptcy Court for the District of Puerto Rico to employ CPA Luis R. Carrasquillo & CO, PSC as financial consultant. The firm will provide these services: (a) strategic counseling and advice; (b) pro forma modeling preparation; (c) financial/business assistance; (d) prepare documentation as requested for and during the Debtor's Chapter 11, specifically as it is related to and has an effect on it, as well as recommendations and financial/business assessments. The firm received a $50,000 retainer from the Debtor. Luis Carrasquillo, CPA disclosed in a court filing that his firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. The firm can be reached through: Luis R. Carrasquillo, CPA CPA Luis R. Carrasquillo & CO, PSC 28th St., #TI-26 Turabo Gardens Ave. Caguas, PR 00725 Telephone: (787) 746-4555 Facsimile: (787) 746-4564 About Asociacion Hospital El Maestro Asociacion Hospital El Maestro, Inc. sought relief under Chapter 11 of the U.S. Bankruptcy Code (Bankr. D.P.R. Case No. 25-03780) on Aug. 25, 2025, listing under up to $50 million in both assets and liabilities. Judge Enrique S. Lamoutte Inclan oversees the case. The Debtor tapped Wigberto Lugo Mender, Esq., at Lugo Mender Group, LLC as counsel and CPA Luis R. Carrasquillo & CO, PSC as financial consultant. EL VERDE: Unsecured Creditors Will Get 100% of Claims in Plan ------------------------------------------------------------- El Verde Associates LDP filed with the U.S. Bankruptcy Court for the District of Puerto Rico an Amended Disclosure Statement describing Plan of Reorganization dated August 27, 2025. The Debtor is a limited distribution partnership duly registered and authorized to do business in the Commonwealth of Puerto Rico. The Debtor is engaged in the business of leasing eighty-nine residential units to low income families in Vega Baja, Puerto Rico, under a contract with the United States Department of Housing and Urban Development. At the present time, Debtor owns one residential complex located at E 10 Calle 4, Vega Baja, PR 00693. In a nutshell, the Debtor had to file the instant case to stop the foreclosure of his real estate property in a case filed in State Court by WM Capital Partners 76, LLC against Mr. Cleofe Rubi González and others, Civil Case F CD2014-1469. In said case, the Debtor gave WM Capital 76, LLC a $400,000.00 note as collateral. Class 3 consists of General Unsecured Claims. Payments shall begin November 2025 to October 2030. This Class will receive a distribution of 100% of their allowed claims. This Class is unimpaired. * Claim No. 2 filed by Jose R. Nieves Sepulveda in the amount of $27,732.50 shall receive a monthly payment of $462.21. * Claim No. 4 filed by Mora Development Corp. in the amount of $168,941.27 shall receive a monthly payment of $2,815.69. Total monthly payments proposed under the Plan amount to $35,220.41 beginning in November 2025. Source of funds for payments are the following: * Rent Income received from the United States Department of Housing and Urban Development. * Lump Sum form Debtor's Members Cleofe Rubi González and Moraima Cintron Aviles. A full-text copy of the Amended Disclosure Statement dated August 27, 2025 is available at https://urlcurt.com/u?l=8jWmPD from PacerMonitor.com at no charge. Counsel to the Debtor: Hector Eduardo Pedrosa Luna, Esq. THE LAW OFFICES OF HECTOR EDUARDO PEDROSA LUNA P.O. Box 9023963 San Juan, PR 00902-3963 Tel: (787) 920-7983 Fax: (787) 754-1109 Email: hectorpedrosa@gmail.com About El Verde Associates LDP El Verde Associates LDP filed its voluntary petition for relief under Chapter 11 of the Bankruptcy Code (Bankr. D.P.R. Case No. 24-03107) on July 27, 2024, listing $1,000,001 to $10 million in both assets and liabilities. Judge Mildred Caban Flores presides over the case. ********* S U B S C R I P T I O N I N F O R M A T I O N Troubled Company Reporter-Latin America is a daily newsletter co-published by Bankruptcy Creditors' Service, Inc., Fairless Hills, Pennsylvania, USA, and Beard Group, Inc., Washington, D.C., USA, Marites O. Claro, Joy A. Agravante, Rousel Elaine T. Fernandez, Julie Anne L. Toledo, Ivy B. Magdadaro, and Peter A. Chapman, Editors. Copyright 2025. All rights reserved. ISSN 1529-2746. This material is copyrighted and any commercial use, resale or publication in any form (including e-mail forwarding, electronic re-mailing and photocopying) is strictly prohibited without prior written permission of the publishers. Information contained herein is obtained from sources believed to be reliable, but is not guaranteed. The TCR Latin America subscription rate is US$775 per half-year, delivered via e-mail. 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