250917.mbx

250917.mbx T R O U B L E D C O M P A N Y R E P O R T E R L A T I N A M E R I C A Wednesday, September 17, 2025, Vol. 26, No. 186 Headlines A R G E N T I N A ARGENTINA: Boost for Milei as Aug. Inflation Stays Below Monthly 2% ARGENTINA: Posts Strong Debt Auction After Local Vote Fuelled Rout B R A Z I L AZUL SA: Seeks to Extend Plan Exclusivity to Jan. 5 Next Year C A Y M A N I S L A N D S BRIGHTON SPC: Deadline to File Proof of Debt Set for Sept. 26 D O M I N I C A N R E P U B L I C DOMINICAN REPUBLIC: Faces Impact From Higher Fuel and Import Costs G U A T E M A L A ENERGUATE TRUST 2: Fitch Assigns 'BB' LT IDRs, Outlook Positive P E R U ORAZUL ENERGY: Fitch Rates Up to USD380MM New Unsec. Notes 'BB' VOLCAN COMPANIA: Fitch Alters Outlook on 'B-' IDRs to Positive P U E R T O R I C O ALUMAX INC: Seeks to Extend Plan Exclusivity to Oct. 2 PALMAS ATHLETIC: Seeks to Tap Richard & Escalera as Counsel - - - - - ================= A R G E N T I N A ================= ARGENTINA: Boost for Milei as Aug. Inflation Stays Below Monthly 2% ------------------------------------------------------------------- Buenos Aires Times reports that President Javier Milei received a boost when the INDEC national statistics bureau reported that consumer prices in Argentina rose 1.9 percent last month, slightly lower than anticipated. Inflation in the eighth month of the year stayed below the crucial two-percent threshold, said the bureau, according to Buenos Aires Times. That was slightly better than most forecasts, which predicted a rate of between two and 2.2 percent. The monthly REM market expectations survey, tracked by the Central Bank, anticipated 2.1 percent, the report notes. Some analysts, however, saw an acceleration, pointing to higher food prices and the weakness of the peso against the dollar, the report says. To date, prices in Argentina this year have risen 19.5 percent. Inflation over the last 12 months is 33.6 percent – a stark fall from the triple-digit figures seen when Milei took office in December 2023, the report recalls. Transport (3.6 percent) was the category that recorded the highest increases in August, followed by alcoholic drinks and tobacco (3.5 percent) and restaurants and hotels (3.4 percent), the report says. Housing, education, goods and services all registered above-average increases, the report relays. At the other end of the scale, clothing and footwear prices fell 0.3 percent, the report notes. Regulated prices rose 2.7 percent in August, with core inflation of two percent. Services jumped 2.5 percent, while goods only 1.6 percent, the report discloses. The Buenos Aires City government reported that inflation in the capital slowed to 1.6 percent last month – a drop of 0.9 points from July, the report relays. Most analysts and consultancy firms believe that inflation will stabilise for the rest of the year, remaining between 1.5 percent and two percent a month, the report notes. President Javier Milei thanked Economy Minister Luis Caputo for the monthly figure, writing on social media that the positive indicator came "in the context of a month of extreme volatility in the demand for money," the report discloses. Inflation is a chronic problem in Argentina, but in 2021, price increases spiralled out of control, the report says. In 2023, the year Milei took office, annual inflation was 211 percent, the report relays. The Milei government managed to slow price hikes to almost 118 percent in 2024 and has maintained the downward trend in 2025, the report relays. Caputo celebrated in X that, "for the first time since November 2017, there were four consecutive months of inflation below two percent per month," the report notes. But consumption has plummeted and not everyone feels that their daily reality has improved, the report says. "Products and services are increasing above the price index reflected by Indec, and my salary is always below the inflation rate, so every month I lose purchasing power," complained Matías Schmukler, a 28-year-old architect, on the streets of Buenos Aires, 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: Posts Strong Debt Auction After Local Vote Fuelled Rout ------------------------------------------------------------------ Nicolle Yapur at Bloomberg News reports that Argentina refinanced almost all of its upcoming local maturities in a debt auction, a reprieve for President Javier Milei after his party lost a local election by a landslide. Milei's administration rolled over more than 91 percent of peso-denominated notes coming due, selling a total of 6.6 trillion pesos (US$4.7 billion) in government notes, according to an X post by Finance Secretary Pablo Quirno, according to Bloomberg News. However, the Treasury's most subscribed Lecap notes included annual interest rates above 59 percent, a sign of how borrowing costs remain elevated as Milei's government has significantly tightened liquidity in the financial system to contain currency volatility, Bloomberg News notes. Before the auction, yields on local debt had jumped to record highs even ahead of the surprise vote in Buenos Aires Province as investors grew increasingly anxious about the viability of Milei's free-market program, forcing the administration to repeatedly raise banks' reserve requirements to keep its tight grip on the peso, Bloomberg News relays. "Rates were pretty elevated," said Ramiro Blazquez, a strategist at StoneX. "This implies that the government continues to prioritise low inflation ahead of the election, at the cost of economic activity," he added. It has been a high-stakes period for Argentina and its slumping peso, the worst performer in all of emerging markets in 2025, Bloomberg News relays. Losses mounted after Milei's party lost the Buenos Aires Province vote by a much wider margin than investors expected, raising investors' concerns that it could suffer a similar defeat in nationwide midterm elections next month, Bloomberg News notes. Rolling over a large chunk of the maturing bonds, including some dollar-linked securities, helps the government prevent a sudden surge of cash into the economy that would have stoked further declines in the peso and threaten the progress that Milei has made in quelling runaway inflation, Bloomberg News discloses. At 1,423.5 pesos per US dollar, the exchange rate is nearing the upper limit of a trading band implemented as part of the South American nation's US$20-billion agreement with the International Monetary Fund, Bloomberg News says. To stay within that range, officials have required banks to increase the percentage of deposits they need to park at the Central Bank through the purchase of government debt, Bloomberg News relates. That restricts banks' lending abilities and in turn keeps more pesos out of the system and pushes up borrowing costs, Bloomberg News notes. This time, authorities didn't announce any previous monetary measures, signaling the government was willing to sell the debt at high rates to ensure demand, Bloomberg News relays. Before the auction, the yield for the local notes due in October was at 55.3 percent, Bloomberg News discloses. "It is noteworthy that no reserve requirement hike was announced ahead of the auction," said Pedro Siaba Serrate, head of Research & Strategy of PPI Argentina, Bloomberg News relays. Before the Buenos Aires Province election, Quirno surprised traders by saying the government was participating in the exchange market, Bloomberg News says. That has done little to contain the sell off, though Argentina's stocks and bonds inched higher in the past two days after massive losses. The peso, meanwhile, has continued to slide, Bloomberg News relays. To address the immediate fallout from the provincial vote, Milei created a special working group, signalling he's willing to strengthen political alliances, though the next concrete steps remain unclear, Bloomberg News notes. A solid rollover was expected, "particularly now that markets have stabilised and Milei is signalling a willingness to strengthen ties with the governors, raising the odds of a respectable showing in the October national midterms," said Pedro Quintanilla-Dieck, a strategist at UBS, Bloomberg News 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. =========== B R A Z I L =========== AZUL SA: Seeks to Extend Plan Exclusivity to Jan. 5 Next Year ------------------------------------------------------------- Azul S.A. and affiliates asked the U.S. Bankruptcy Court for the Southern District of New York to extend their exclusivity periods to file a plan of reorganization and obtain acceptance thereof to January 5, 2026 and March 4, 2026, respectively. The Debtors explain that they are Brazil's largest airline in terms of departures and cities served, offering passengers a full service experience to approximately 137 destinations in Brazil as of the Petition Date, as well as select international destinations, including in the United States, Portugal, France, Spain, Argentina, Uruguay, Paraguay, and Curaçao. Given the magnitude of the Chapter 11 Cases, the Debtors respectfully submit that the extensions requested herein are appropriate. The Debtors claim that they continue to make timely payments on account of their undisputed postpetition obligations as they come due and, as applicable, in accordance with the terms of the relevant settlements negotiated during the pendency of the Chapter 11 Cases. As such, this factor also weighs in favor of allowing the Debtors to extend the Exclusive Periods. The Debtors expect to be in a position to file a chapter 11 plan in short order. Having entered chapter 11 with RSAs with the Secured Ad Hoc Group, AerCap, and the Strategic Partners, the Debtors continue to diligently negotiate with parties in interest and are making progress with various constituencies toward reaching agreements that will further aid their reorganization efforts. The Debtors asserts that the continued exclusivity will permit the companies to continue diligently working with many various creditor groups and other parties in interest. The Debtors have made meaningful progress thus far in the Chapter 11 Cases. The Debtors are seeking an extension of the Exclusive Periods to preserve and build upon the progress made to date. Accordingly, this factor also weighs in favor of the relief requested herein. Counsel to the Debtors: DAVIS POLK & WARDWELL LLP Marshall S. Huebner, Esq. Timothy Graulich, Esq. Joshua Y. Sturm, Esq. Jarret Erickson, Esq. Richard J. Steinberg, Esq. 450 Lexington Avenue New York, New York 10017 Telephone: (212) 450-4000 About Azul S.A. Azul S.A. (B3: AZUL4, NYSE: AZUL), the largest airline in Brazil by number of flight departures and cities served, offers 900 daily flights to over 150 destinations. With an operating fleet of over 200 aircrafts and more than 15,000 Crewmembers, the Company has a network of 300 non-stop routes. Azul was named by Cirium (leading aviation data analysis company) as the most on-time airline in the world in 2023. In 2020, Azul was awarded best airline in the world by TripAdvisor, the first time a Brazilian flag carrier earned the number one ranking in the Traveler's Choice Awards. On the Web: http://www.voeazul.com.br/imprensa On May 28, 2025, Azul S.A. and 19 affiliated debtors filed voluntary petitions for relief under Chapter 11 of the United States Bankruptcy Code (Bankr. S.D.N.Y. Lead Case No. 25-11176). The cases are pending before Judge Sean H. Lane. The Company is supported by Davis Polk & Wardwell LLP, White & Case LLP, and Pinheiro Neto Advogados as legal counsel; FTI Consulting as financial advisor; Guggenheim Securities, LLC as investment banker; SkyWorks Capital LLC as fleet advisor; and FTI Consulting, C Street Advisory Group, and MassMedia as strategic communications advisors. Stretto is the claims agent. The Participating Lenders are supported by Cleary Gottlieb Steen & Hamilton LLP and Mattos Filho as legal counsel and PJT Partners as investment banker. United Airlines is supported by Hughes Hubbard & Reed LLP and Sidley Austin LLP as legal counsel and Barclays Investment Bank as investment banker. American Airlines is supported by Latham & Watkins LLP as legal counsel. AerCap is supported by Pillsbury Winthrop Shaw Pittman LLP as legal counsel. The U.S. Trustee for Region 2 appointed an official committee to represent unsecured creditors in the Chapter 11 cases. The Committee retained Willkie Farr & Gallagher LLP as its counsel, Alvarez & Marsal North America, LLC, as its financial advisor, Houlihan Lokey Capital, Inc., as its investment banker. =========================== C A Y M A N I S L A N D S =========================== BRIGHTON SPC: Deadline to File Proof of Debt Set for Sept. 26 ------------------------------------------------------------- The Joint Official Liquidators of Brighton SPC (In Official Liquidation) intend to deciare an interim dividend to ordinary unredeemed investors of its Segregated Portfolios, Kijani Commodity Fund (USD), Kijani Commodity Fund (EUR), Kijani Commodity Fund (GBP) and Kijani Commodity Fund (CHF) and Kijani Income Fund. Any Creditor or Investor who has not already lodged his proof of debt and supporting evidence with the Joint Official Liquidators must do so no later than September 26, 2025. The Joint Official Liquidators are not obliged to adjudicate upon any proof of debt received after this date with the result that your failure to lodge a proof of debt by the final date for proofing may result in you being excluded from the final distribution. Contact information: Email: ky_brighton@pwc.com ƒ Address for Service: PO Box 258 Grand Cayman KY1-1104 Cayman Islands =================================== D O M I N I C A N R E P U B L I C =================================== DOMINICAN REPUBLIC: Faces Impact From Higher Fuel and Import Costs ------------------------------------------------------------------ Dominican Today reports that rising U.S. dollar and crude oil prices are putting pressure on fuel costs and the Dominican economy. Although the country imports refined fuels, fluctuations in these international markets directly affect domestic prices, according to Dominican Today. As of September 9, 2025, the U.S. dollar closed at 64.02 pesos for sale and 63.53 for purchase, exceeding the 2025 budget projection of 63.1 pesos, the report notes. This higher exchange rate increases import costs, particularly for fuels, and could strain the national budget, the report says. Meanwhile, crude oil prices rose globally: West Texas Intermediate (WTI) reached US$63.30 per barrel, OPEC crude US$69.88, and Brent US$67.56, all showing moderate increases, the report relays. The government had projected US$81.30 per barrel for 2025 but later revised it to US$70.70, the report notes. Current prices are close to this revised figure, highlighting ongoing challenges for economic stability, the report discloses. About Dominican Republic The Dominican Republic is a Caribbean nation that shares the island of Hispaniola with Haiti to the west. Capital city Santo Domingo has Spanish landmarks like the Gothic Catedral Primada de America dating back 5 centuries in its Zona Colonial district. Luis Rodolfo Abinader Corona is the current president of the nation. TCR-LA reported in April 2019 that Juan Del Rosario of the UASD Economic Faculty cited a current economic slowdown for the Dominican Republic and cautioned that if the trend continues, growth would reach only 4% by 2023. Mr. Del Rosario said that if that happens, "we'll face difficulties in meeting international commitments." An ongoing concern in the Dominican Republic is the inability of participants in the electricity sector to establish financial viability for the system. Standard & Poor's credit rating for Dominican Republic was raised to 'BB' in December 2022 with stable outlook. Moody's credit rating for Dominican Republic was last set at Ba3 in August 2023 with the outlook changed to positive. Fitch, in December 2023, affirmed the Dominican Republic's Long-Term Foreign-Currency Issuer Default Rating (IDR) at 'BB-' and revised the outlook to positive. ================= G U A T E M A L A ================= ENERGUATE TRUST 2: Fitch Assigns 'BB' LT IDRs, Outlook Positive --------------------------------------------------------------- Fitch Ratings has assigned first-time 'BB' Long-Term Foreign and Local Currency Issuer Default Ratings (IDRs) to Energuate Trust 2.0 (Energuate 2) and a 'BB' rating to the proposed USD600 million senior unsecured notes. Energuate 2 net proceeds will refinance pari passu debt at the prior obligor, Energuate Trust (BB/Positive), including USD330 million of unsecured notes due 2027 and another bank loan, and to fund general corporate purposes and issuance costs. The notes are joint and several obligations of distribution companies DEORSA and DEOCSA. The Rating Outlook is Positive. The ratings and Outlook reflect DEORSA's and DEOCSA's combined operations and exposure to Guatemala (BB/Positive) via subsidies and government counterparty exposure across low-income and rural customers. They also reflect growing regulated revenue and cash flow, a stable operating profile that supports leverage of about 3.2x, and adequate liquidity. Elevated non-technical losses and security challenges in the service areas temper these strengths. Key Rating Drivers Sovereign Exposure Drives Positive Outlook: Energuate 2's exposure to the Guatemalan sovereign rating stems from systemic government subsidies (about 12% of average revenues) and exposure to government counterparty risk, given the extensive service area of operating companies Distribuidora de Electricidad del Oriente S.A. (DEORSA) and Distribuidora de Electricidad del Occidente S.A. (DEOCSA) covering nearly three-quarters of the population. Subsidies support electricity access for low-usage, low-income customers and advance rural economic development. The Instituto Nacional de Electrificacion maintains a strict 60-day payment cycle, and Energuate 2 disconnects service after two months of nonpayment. VAD Tariff Drives Cash Flows: Energuate 2's gross margin is primarily driven by the regulated value-added distribution (VAD) tariff, which covers 99% of customers. The independent regulator, Comision Nacional de Energia Electrica (CNEE), sets the VAD every five years to recover operating expenses, capex and a 7% regulatory weighted average cost of capital. The VAD reset in November 2024, producing a slight incremental increase in recognized revenue. The framework also provides semiannual inflationary and foreign exchange adjustments, and quarterly variable electricity generation costs updates. Generation costs are fully passed through to customers. Strong Margins, Stable Leverage: Energuate 2 has demonstrated cost efficiency and operational stability over time, supported by stable and growing revenue through demand growth and the VAD tariff. Fitch's base case projects leverage of around 3.2x going forward, assuming amortizing debt, periodic adjusted tariffs, and the full draw down of $175 million in multilateral development bank debt for capex. The company has rating headroom to fund potential supplementary VAD-related capex with a mix of cash and additional debt. Challenging Area, Cost Savings Plan: The rural service area presents financial and operational challenges from high energy theft, violent crime and an informal economy. Energy losses average around 19.6%, of which the VAD compensates ~14.9%; any excess is a loss, estimated at around USD8 million per percentage point. Loss and theft reduction measures account for the largest share of the company's capex plan (estimated at 28%), followed by revenue-generating capex for new connections and technical quality (estimated at 26% and 23%, respectively). Geographic Factors Discourage Competition: The low population density of Energuate 2's service area and high investment requirements to reach new clients disincentivizes competition and mitigates risks from the non-exclusivity of the concession. The current concession period expires in 2048 and includes 21 of Guatemala's 22 departments, excluding Sacatepéquez. Fitch's base case expects a 4% average growth in energy demand and customer base yoy through 2028, conservatively based on historical averages Peer Analysis Energuate 2's profitability compares favorably with Elektra Noreste S.A. (ENSA; BB+/Stable), a minority state-owned Panamanian distributor also linked to the sovereign (Panama: BB+/Stable). Like Energuate 2, ENSA is a regulated utility with wholly domestic cash flows and structural government subsidies (about 5% of ongoing revenues for ENSA versus 12% on average for Energuate 2). ENSA's average EBITDA margin of around 20% is weaker than Energuate's but exceeds regional peers at roughly 13%-14%. Energuate's leverage is improving to below 3x, compared with ENSA's 3.5x. Energuate 2's linkage to its host government is broadly comparable with that of AES Espana B.V. (BB-/Positive) and Empresa Generadora de Electricidad Haina, S.A. (BB-/Positive) in the Dominican Republic (BB-/Positive). Both companies receive material support, albeit indirectly, from government transfers to state-owned distribution companies to compensate for high energy losses, low collection rates and substantial structural subsidies. Key Assumptions - VAD tariff updated in November 2024 for a slight increase cycle on cycle, with semiannual inflation and foreign exchange adjustments each forecast year; - Annual average consolidated revenue growth of 6% through 2028; - Total energy purchased of over 5,000 GWh by 2028 exceeds total energy sold of around 4,000 GWh due to chronic energy losses of 18% through the forecast; - Annual average inflation of around 3% through 2028; - Effective annual tax rate averaging 35% of income; - Minimal foreign exchange fluctuation, reflecting Guatemala's managed float; - Average capex of around USD75 million annually through the medium term, supported by FCF and development bank loans; - Refinancing of Energuate's bonds and certain loans during 2025; - Additional USD45 million in multilateral development debt to be disbursed through 2026; - Dividends approximate 100% of prior year's net income, with the maintenance of minimum target cash balance post-obligations above USD8 million policy level, and subject to financial stability and debt service payment prioritization RATING SENSITIVITIES Factors that Could, Individually or Collectively, Lead to Negative Rating Action/Downgrade - A negative rating action on Guatemala's sovereign rating; - A significant weakening in the country's electricity regulation system, either through tariff adjustments or a material change in subsidies received by Energuate 2; - Weaker operational results due to higher-than-expected energy losses and lower-than-anticipated tariff increases; - A significant interference in Energuate's capital structure that results in debt/EBITDA sustained at 5.5x or greater. Factors that Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade - Energuate 2's geographically limited operations and fundamental exposure to macroeconomic conditions make an upgrade unlikely barring a positive rating action on the sovereign rating, in combination with sustained debt/EBITDA below 3.5x. Liquidity and Debt Structure Energuate 2's liquidity is supported by stable cash flows and a comfortable amortization profile. The company's main financial obligations include a USD330 million 144A/REG S bond due in 2027 and a USD335 million local-currency long-term loan due in 2043. Fitch expects the company's 2027 bond to be refinanced with this issuance, as well as the majority of the local-currency loan. The company additionally has drawn down 74% of a syndicated loan for up to USD175 million from the International Finance Corporation (USD100 million) and the Japan International Cooperation Agency (USD75 million) to support capex. The loan has a two-year drawdown period and will finance Energuate's annual capex through 2026. Liquidity is further supported by short-term revolving lines of credit for working-capital purposes totaling USD155 million, of which USD25 million is committed and the remaining USD130 million is uncommitted. Energuate's cash on hand as of March 31, 2025 was USD159 million Issuer Profile Energuate Trust 2.0 owns Guatemala's two largest rural electricity distribution companies, DEORSA (northeast) and DEOCSA (west), serving about 2.5 million regulated customers across 21 of 22 departments —74% of the population outside Guatemala City — as of YE 2024. 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 ----------- ------ Energuate Trust 2.0 LT IDR BB New Rating LC LT IDR BB New Rating senior unsecured LT BB New Rating ======= P E R U ======= ORAZUL ENERGY: Fitch Rates Up to USD380MM New Unsec. Notes 'BB' --------------------------------------------------------------- Fitch Ratings has assigned a 'BB' rating to Orazul Energy Peru S.A.'s (Orazul) proposed unsecured notes for up to USD380 million. Net proceeds will refinance the company's USD363 million unsecured notes due 2027, repay USD5 million in short-term loans that funded capex, and fund issuance costs. Orazul's ratings reflect the company's predictable cash flows supported by its contractual position, historically efficient and reliable hydroelectric generation assets and cost structure flexibility. Fitch estimates gross leverage (total debt/EBITDA) will average of 4.8x over the rating horizon. Key Rating Drivers Contracted Cash Flows: Orazul's ratings reflect cash flows supported by revenues from USD-linked power purchase agreements (PPAs) that cover around 65% of an average 2,000 gigawatt-hours (GWh) per year of generation, as well as exposure to the spot market for the balance of uncontracted energy. Orazul's PPAs have 5.5 years of remaining life as of 2Q25, with strong off-taker credit quality that include major distribution companies, reputable mining operations, and other large industrial clients. Fitch expects low re-contracting risk based on the company's solid market position as the fourth largest hydro company in the country, and its prioritized dispatch order as a low-cost energy producer. Spot Market Exposure: Orazul's average 60%-70% contracted PPA level and non-diversified resource base subjects the company to potentially volatile spot market risk. A nationwide drought and plant outages in 2023 nearly doubled the average annual spot price to an unprecedented USD73/MWh. Orazul was required to purchase energy at higher costs, which reduced EBITDA by 8%. The company mitigated its cash flows by deferring dividends. Fitch's base case assumes spot prices of USD36/MWh through 2028 based on national hydrology estimates that incorporate historical drought periods and normalized national plant availability. The company will maintain a 64% contracted position through 2027, allowing flexibility to accommodate hydroelectric generation volatility. Leverage Profile; Coverage: Structural gross leverage (total debt/EBITDA) will average 4.8x going forward based on non-amortizing debt of USD380 million (current issuance) and EBITDA that will step up to USD84 million in 2027 with certain PPA price increases. The current issuance incorporates new money for capex spending that totals USD13.6 million in 2025 for improvements to hydroelectric plant Cañon del Pato, followed by annual renewal capex averaging USD4 million through 2028. EBITDA/interest expense will remain robust at over 3x. Solid Market Position, Reliable Generation: Orazul is a baseload operator in Peru due to its low-cost energy generation and consistent contribution of nearly 5% of energy to the Peruvian system. The company's two run-of-river hydroelectric plants have a total installed capacity of 376MW with a typical average capacity factor of around 66% across 11 turbines and in two separate rivers with low hydrological variability. Fitch's base case expects Orazul to sell its uncontracted energy to the spot market as planned, while successfully re-contracting existing PPAs or securing new off-takers to replace expiring contracts. Parent-Subsidiary Linkage Considerations: Per Fitch's Parent and Subsidiary Linkage Rating Criteria, Orazul is rated on a standalone basis from co-investors I Squared (68.5%), GIC Buckland Investment (16%), the International Finance Corporation (IFC, 8%) and ADIC Portman Limited (7.5%). Fitch views the ownership structure as neutral to Orazul's credit profile, as it has resulted in financial, managerial and operational continuity. Peer Analysis Orazul's closest peers are generation companies in the region, such as Kallpa Generacion S.A. (Kallpa; BBB-/Stable), Fenix Power Peru S.A. (Fenix; BBB-/Stable), Investment Energy Resources Limited (IERL, BB/Stable) and AES Panama Generation Holdings SRL (AESPGH; BB+/Stable). Their ratings reflect stable, diversified asset bases and predictable cash flows, supported by solid contractual positions embodied by medium- to long-term PPAs with financially strong counterparties, and manageable volume exposure or strong shareholder support. Orazul is rated two notches below Kallpa and Fenix, as both companies benefit from highly efficient combined cycle natural gas generation capacity and have stronger market positions. Orazul is rated on par with IERL, which is also a fully renewable energy generation company with cash flow and spot market exposure to environmental variability. Orazul is rated one notch below AESPGH due to the latter's more diversified resource base, lower leverage and a longer-dated PPA average life. Key Assumptions - Spot injection prices average USD36/MWh, and average withdrawal prices of USD37/MWh through 2028; - 59% firm energy contracted position in 2025, then approximately 65% of firm energy, with spot sales accounting for the balance of energy sold; - An increase in average regulated PPA prices to USD62/MWh and unregulated PPA prices to USD41/MWh in the next four years; - Average annual dividends of USD47 million, while maintaining a minimum year-end cash balance of USD10 million; - Capex of USD13.6 million in 2025, mostly from improvements to Cañón del Pato, then minor capex averaging USD4 million over the following three years; - Refinancing of the company's USD363 million note, due 2027, over the next 12 months; - Ongoing capacity factor averaging 61% between the two plants, and future hydrological conditions consistent with low historical volatility. RATING SENSITIVITIES Factors that Could, Individually or Collectively, Lead to Negative Rating Action/Downgrade - Total debt/EBITDA substantially exceeding 5.0x on a sustained basis; - Excessive cash distribution to shareholders; - Inability to refinance the series 2027 notes; - A material rebalancing of the contractual base, resulting in significant cash flow volatility. Factors that Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade - Gross leverage, measured by total debt/EBITDA, falling below 4.0x on a sustained basis; - Maintenance of an adequate contracted position with similar terms contributing to cash flow predictability. Liquidity and Debt Structure Orazul's cash position was USD58 million at June 30, 2025 with USD5 million in short-term debt to be repaid with this issuance. Annual liquidity has averaged USD26 million over the past three years, supportive of interest and capital spending costs. It is driven by reliable cash flows and a USD25 million undrawn committed credit line. Fitch expects the company to maintain its liquidity policy of more than its year-end minimum cash balance of USD10 million following distributions of excess cash to shareholders. The company's only long-term debt is a USD363.2 million bullet bond that matures in 2027. Issuer Profile Orazul Energy Peru S.A. owns and operates two hydroelectric power plants in northern Peru with a combined capacity of 377MW, including a 1MW solar plant, and represents the fourth largest hydroelectric complex within the Peruvian system. Date of Relevant Committee 13 June 2025 MACROECONOMIC ASSUMPTIONS AND SECTOR FORECASTS Fitch's latest quarterly Global Corporates Macro and Sector Forecasts data file which aggregates key data points used in its credit analysis. Fitch's macroeconomic forecasts, commodity price assumptions, default rate forecasts, sector key performance indicators and sector-level forecasts are among the data items included. ESG Considerations 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 ----------- ------ Orazul Energy Peru S.A. senior unsecured LT BB New Rating VOLCAN COMPANIA: Fitch Alters Outlook on 'B-' IDRs to Positive -------------------------------------------------------------- Fitch Ratings has affirmed Volcan Compania Minera S.A.A.'s Long-Term Foreign and Local Currency Issuer Default Ratings (IDRs) at 'B-'. Fitch has also affirmed the ratings of Volcan's senior secured notes due 2030 at 'B-' with a Recovery Rating of 'RR4'. Fitch upgraded senior unsecured notes due in 2026 to 'B-'/'RR4' from 'CCC'/'RR6'. Fitch has also revised the Rating Outlook to Positive from Stable. The Outlook revision reflects Fitch's expected medium-term improvements in Volcan's credit profile. A rebound in operating cash flow, driven by higher volumes and better prices, should support neutral to positive FCF after elevated capex. Successful execution of its financial strategy, including funding and debt refinancing of its Romina mine, would enhance flexibility and support ratings. The ratings reflect a mid-scale, concentrated operating profile and relatively short mine life, despite solid profitability. Execution risk on the Romina expansion and residual refinancing risk continue to constrain the rating. Key Rating Drivers Rising Production, Lowering Costs: Fitch expects Volcan's operational recovery to continue. The company aims for total zinc production of for more than 240,000 MT in 2025 and nearly 340,000 MT in 2027 after past regulatory stoppages, and from new mining zones and continued streamlining. Metals consultancy CRU Group expects Yauli mine's zinc all-in sustaining cost (AISC) of nearly USD1560/MT, improving its third quartile position toward the peer average. Romina Remains Key: The polymetallic Romina mine is the main near-term growth project of Volcan and is expected to start commercial production in 2H26. It will replace the aging Alpamarca mine and will use its operating plant. Fitch expects Romina to contribute 8% of revenue in 2026 and 13% in 2027. The resulting cost reductions and mine life improvement is key to Volcan's business sustainability and helps to strengthen its credit profile. Capex to Pressure FCF Generation: Fitch expects EBITDA to reach about USD430 million, driven by recovering operations and supportive prices. Capex is expected to increase to USD260 million in 2025 and fall to USD250 million in 2026 during the final stage of Romina's construction. Despite no expected dividend payments, FCF should turn marginally negative in 2026 after a slight increase in 2025, as zinc prices weaken towards Fitch's mid-cycle view. Refinancing Still Needed: The expected improvement in operating cash flow generation is expected to help Volcan to execute its refinancing strategy, which also includes USD68 million outstanding of its 2026 bond. Fitch expects Volcan to achieve less-restrictive terms on growth investments and cash management financing from its period of liquidity difficulties in 2023-2024, thereby improving its financial flexibility. Low Leverage: Fitch expects Volcan to maintain low leverage metrics with an improved maturity profile. EBITDA leverage and net leverage are expected to reach 1.8x and 1.5x in 2025 but decrease towards 1.6x and 1.3x, respectively, by 2026 as higher zinc and silver from Yauli, Chungar, and the early ramp-up of Romina may offset falling prices, according to Fitch's price deck. Total debt is expected to average USD700 million and net debt USD575 million. Peer Analysis Volcan's metals diversification exceeds that of Ero Copper Corp (B/Stable) and Aris Mining Corp (B+/Stable), matches that of Compania de Minas Buenaventura S.A.A. (BB/Stable) and Minsur S.A. (BBB-/Stable), but trails that of Industrias Penoles S.A.B. de C.V. (BBB/Stable). It operates in a single country (Peru), like Buenaventura (Peru), Minsur (Peru), Penoles (Mexico), Ero (Brazil) and Aris (Colombia), while Nexa Resources S.A. (BBB-/Stable) is split between Peru and Brazil. Its scale is larger than Ero and Aris, similar to Buenaventura, smaller than Nexa and Minsur, and far below Penoles. Fitch expects Volcan's capital structure and liquidity to be similar to that of all the named peers, with leverage at the middle of the group, including versus similarly rated Aris and Ero. Volcan AISC cost is in the third quartile on the zinc AISC curve, which is better than Buenaventura and Ero (both fourth in their metals) and similar to Nexa and Aris (third). Consolidated reserves imply about five years of mine life, which is low for underground peers, comparable to Buenaventura excluding Cerro Verde, and below Aris (18 years) and Ero (17 years). Key Assumptions - Average zinc price of USD2,700/tonne in 2025, USD2,650/tonne in 2026, and USD2,550/tonne in 2027; - Average silver price of USD35/oz in 2025, USD30/oz in 2026, and USD25/oz in 2027; - Zinc output of 240,000 MT, 295,000 MT, and 340,000 MT in 2025, 2026, and 2027; - Silver output of 13.3 million oz, 15.0 million oz, and 15.5 million oz in 2025, 2026, and 2027; - Yauli's zinc and silver production grows 2% and falls 10%, respectively, in 2025, grows 15% and 20% in 2026, and rises 11% and 0% in 2027. Fitch expects Yauli to contribute 60% of revenues in 2025; - Romina is expected to start operations in mid-2026 and achieve full production in 2027. Fitch expects Romina expansion, to contribute 8% of revenues in 2026 and 12% in 2027; - Capex of USD260 million, USD250 million, and USD240 million in 2025, 2026, and 2027; - Refinancing of the outstanding 2026 bonds; - No dividends; - No additional asset sales. Recovery Analysis Going-Concern Approach The recovery analysis assumes that Volcan would be considered a going concern in an event of bankruptcy and that the company would be reorganized rather than liquidated. Fitch has assumed a 10% administrative claim. The going concern EBITDA estimate reflects Fitch's view of a sustainable, post-reorganization EBITDA level upon which it bases the enterprise valuation in a low zinc price environment. An enterprise valuation multiple of 4.5x EBITDA is applied to the going concern EBITDA to calculate a post-reorganization enterprise value. The choice of this multiple considered the following factors: the historical bankruptcy case study exit multiples for peer companies were 4.0x-6.0x, improving financial subfactors, mid quality assets, and high-quality counterparties despite challenging dynamics in a volatile and commoditized industry. Fitch applies a waterfall analysis to the post-default enterprise valuation based on the relative claims of debt in the capital structure. The debt waterfall assumptions consider the company's pro forma debt following refinancing and debt exchange as well as the debt-funded capex for Romina. The allocation of value in the liability waterfall results in recovery corresponding to 'RR1' for the secured bonds and syndicated facility debt and to 'RR2' to the senior unsecured notes. However, per Fitch's "Country-Specific Treatment of Recovery Ratings Criteria," Peru, where EBITDA is generated, is considered Group D. Therefore, Fitch caps the instruments' Recovery Ratings at 'RR4', resulting in no rating uplift from the IDR 'B-' for both first-lien bonds and syndicated facility, and for the unsecured ratings. RATING SENSITIVITIES Factors that Could, Individually or Collectively, Lead to Negative Rating Action/Downgrade - Inability to obtain financing within the next three quarters; - Further delays in the construction and ramp-up of Romina; - Negative FCF over the rating horizon impacting liquidity; - EBITDA to interest expense coverage ratio consistently below 2.5x; - A sustained EBITDA leverage ratio of more than 4.5x with an unwillingness or inability to deleverage; - A sustained EBITDA net leverage ratio of more than 4.0x with an unwillingness or inability to deleverage. Factors that Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade - Successful refinancing of its short-term debt and syndicated loan, with improvements in financial flexibility as a result of less-restrictive financial covenants; - Completion of Romina in a timely manner, resulting in an improvement in the cost profile, production and reserve life; - Positive to neutral FCF over the rating horizon; - EBITDA to interest expense coverage ratio consistently above 5.0x; - A sustained EBITDA leverage ratio of less than 3.5x in a sustained basis; - A sustained EBITDA net leverage ratio of less than 3.0x in a sustained basis. Liquidity and Debt Structure As of June 2025, the company held USD97 million in cash and equivalents (excluding restricted cash) and had short-term debt of USD96 million, including USD68 million of the 2026 notes USD4.2 million of commercial prepayments and a USD15 million syndicated loan instalment. Debt is comprised of USD330 million of a 2029 maturing secured syndicate loan, USD300 million of 2030 secured bonds, USD68 million of 2026 unsecured bonds, and commercial prepayments of concentrates of USD25 million. The collateral package for the loan and the bond ranks both pari passu with the same claims over trusts over receivables, over shares of subsidiaries and mortgages over material assets. Issuer Profile Volcan is a polymetallic mining company with a third quartile cost position on the global zinc cost curve per CRU. It has operated in Peru for over 75 years. Volcan is diversified into the base metals zinc and lead, and silver. 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 Volcan Compania Minera S.A.A. has an ESG Relevance Score of '4' for Waste & Hazardous Materials Management; Ecological Impacts due to its zinc concentrate leak. In June 2022, a truck careened off the road spilling 30 tonnes of zinc concentrates in the Chillon river, which has a negative impact on the credit profile, and is relevant to the rating[s] 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 ----------- ------ -------- ----- Volcan Compania Minera S.A.A. LT IDR B- Affirmed B- LC LT IDR B- Affirmed B- senior unsecured LT B- Upgrade RR4 CCC senior secured LT B- Affirmed RR4 B- ===================== P U E R T O R I C O ===================== ALUMAX INC: Seeks to Extend Plan Exclusivity to Oct. 2 ------------------------------------------------------ Alumax Inc. asked the U.S. Bankruptcy Court for the District of Puerto Rico to extend its exclusivity periods to file a plan of reorganization and disclosure statement to October 2, 2025. The Debtor explains that since this Court's prior extension order, a significant contested matter has emerged that directly impacts fundamental elements of any proposed Plan. Commercial Equipment Finance, Inc. ("CEFI") filed Proof of Claim #2-2 claiming secured status based on cross-collateral agreements and UCC filings. The Debtor claims that the contested matter involves dispositive legal issues including: (i) whether CEFI's UCC filing describes the correct collateral (describing a rivet machine while the loan agreement covers a generator); (ii) whether CEFI's private cross collateral agreements are enforceable against the DIP without proper UCC amendments; and (iii) whether private cross-collateral agreements without public filing can create enforceable security interests against third parties. The Debtor notes that proposing a Plan based on incorrect assumptions about CEFI's claim status would likely require subsequent plan amendments, re-solicitation of votes, and additional confirmation hearing delays, creating greater prejudice to creditors than this brief extension. Resolution of this contested matter will provide the certainty necessary to prepare an accurate Disclosure Statement, reliable financial projections, and proper claim treatment, enabling informed creditor voting and efficient confirmation proceedings. The Debtor asserts that it requires sufficient time to resolve the CEFI contested matter before preparing a Chapter 11 Plan. The existence of this unresolved contingency directly impacts claim classification, liquidation analysis, and plan feasibility which are core elements that must be determined before proposing a viable plan to creditors. The Debtor further asserts that the timing of this request aligns with the need for judicial resolution of complex legal issues involving UCC perfection, cross-collateral enforceability, and public notice requirements. The requested extension to October 2, 2025 (which aligns with the 300-day statutory deadline) provides adequate time for the Court to consider and resolve the CEFI matter and for the Debtor to incorporate that resolution into plan formulation. The Debtor cites that creditors will not be prejudiced by this extension; quite the contrary, they will benefit significantly. The resolution of the CEFI contested matter is fundamental to creditor distribution and treatment, as it directly determines the classification of a material claim and affects recovery rates for all creditor classes. Allowing the Debtor time to resolve this matter before plan filing will strengthen the accuracy of plan proposals and increase certainty for all stakeholders. Alumax Inc. is represented by: Javier Villarino, Esq. Villarino & Associates LLC P.O. Box 9022515 San Juan, PR 00902 Telephone: (787) 565-9894 Email: jvillarino@vilarinolaw.com About Alumax Inc. Alumax Inc. manufactures aluminum doors and windows with its manufacturing infrastructure located in San Sebastian, Anasco, Ponce and San Domingo. Alumax Inc. sought relief under Chapter 11 of the U.S. Bankruptcy Code (Bankr. D.P.R. Case No. 24-05312) on December 6, 2024. In the petition filed by Frank J. Jimenez, Cruz as president, the Debtor reports total assets of $416,851 and total liabilities of $2,954,034. The Debtor is represented by Javier Vilarino, Esq. at VILARINO AND ASSOCIATES, LLC. PALMAS ATHLETIC: Seeks to Tap Richard & Escalera as Counsel ----------------------------------------------------------- Palmas Athletic Club, Corp. seeks approval from the U.S. Bankruptcy Court for the District of Puerto Rico to employ Reichard & Escalera LLC as special counsel. The firm will assist the Debtor in connection with tax exemption matters related to its tourism activities. The hourly rates of the firm's counsel and staff are as follows: Senior Partners/Partners $400 Associates $210 Paralegals $150 - $185 In addition, the firm will seek reimbursement for expenses incurred. Juan Carlos Mendez, principal at Reichard & Escalera, disclosed in a court filing that the firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. The firm can be reached through: Juan Carlos Mendez, Esq. Reichard & Escalera LLC MCS Plaza Building, 10th Floor 255 Ponce de Leon Ave. San Juan, PR 00917 Telephone: (787) 777-8834 Facsimile: (787) 765-4225 About Palmas Athletic Club Corp. Palmas Athletic Club Corp. owns and operates a 420-acre recreational property within Palmas Del Mar Resort in Humacao, Puerto Rico. The site includes two 18-hole golf courses, a 22,200-square-foot clubhouse, a 5,600-square-foot beach clubhouse, and related facilities. Palmas Athletic Club Corp. sought relief under Chapter 11 of the U.S. Bankruptcy Code (Bankr. D.P.R. Case No. 25-03489) on August 4, 2025. In its petition, the Debtor reports total assets of $16,793,944 and total liabilities of $36,514,983. The Debtor tapped Charles A. Cuprill Hernandez, Esq., at Charles A. Cuprill, PSC, Law Offices and CPA Luis R. Carrasquillo & Co., PSC as financial consultant. ********* S U B S C R I P T I O N I N F O R M A T I O N Troubled Company Reporter-Latin America is a daily newsletter co-published by Bankruptcy Creditors' Service, Inc., Fairless Hills, Pennsylvania, USA, and Beard Group, Inc., Washington, D.C., USA, Marites O. Claro, Joy A. Agravante, Rousel Elaine T. Fernandez, Julie Anne L. Toledo, Ivy B. Magdadaro, and Peter A. Chapman, Editors. Copyright 2025. All rights reserved. ISSN 1529-2746. This material is copyrighted and any commercial use, resale or publication in any form (including e-mail forwarding, electronic re-mailing and photocopying) is strictly prohibited without prior written permission of the publishers. 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