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251008.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, October 8, 2025, Vol. 26, No. 201 Headlines B R A Z I L BANCO SOFISA: Moody's Withdraws 'Ba2' Deposit Ratings TUPY SA: S&P Affirms 'BB+' ICR & Alters Outlook to Negative C A Y M A N I S L A N D S STONECO LTD: Moody's Affirms 'Ba2' CFR & Alters Outlook to Positive C O L O M B I A COLOMBIA: Elevated Sovereign Spreads, Investment Remains Weak D O M I N I C A N R E P U B L I C DOMINICAN REPUBLIC: Coffee Harvest at Risk Amid Labor Shortage DOMINICAN REPUBLIC: Tourist Tax Brings RD$3.85BB to Economy J A M A I C A JAMAICA: Tourism Sector Rebounding From COVID-19 NATIONAL COMMERCIAL: Makes Leadership Changes to Corporate M E X I C O RUTAS DE LIMA: S&P Lowers Issue Rating to 'CC', On Watch Negative P A R A G U A Y PARAGUAY: Fitch Alters Outlook on 'BB+' LongTerm IDR to Positive P U E R T O R I C O BED BATH: Hudson Bay Obtains Dismissal in Trading Gains Dispute ECGPR LLC: Case Summary & Six Unsecured Creditors - - - - - =========== B R A Z I L =========== BANCO SOFISA: Moody's Withdraws 'Ba2' Deposit Ratings ----------------------------------------------------- Moody's Ratings has withdrawn all ratings of Banco Sofisa S.A. (Sofisa), including the Ba2 and Not Prime long- and short-term local- and foreign-currency deposit ratings, as well as the Ba1 and Not Prime local- and foreign-currency counterparty risk ratings, in the long- and short-term, respectively. The bank's ba2 baseline credit assessment (BCA) and adjusted BCA were also withdrawn, as well as its counterparty risk assessments (CRAs) of Ba1(cr) and Not Prime(cr), in the long- and short-term, respectively. The outlook on the long-term deposit ratings was changed to rating withdrawn from stable. RATINGS RATIONALE Moody's have decided to withdraw the rating(s) following a review of the issuer's request to withdraw its rating(s). Banco Sofisa S.A. is headquartered in São Paulo, Brazil, with assets of BRL17.5 billion and shareholders' equity of BRL1.1 billion as of June 2025. TUPY SA: S&P Affirms 'BB+' ICR & Alters Outlook to Negative ----------------------------------------------------------- S&P Global Ratings revised its outlook on Brazil-based auto supplier Tupy S.A. to negative from stable and affirmed its 'BB+' issuer credit rating. S&P also affirmed its 'BB+' issue-level rating on the company's senior unsecured debt; the '3' recovery rating remains unchanged. S&P said, "The negative outlook reflects our view that Tupy will report weaker credit metrics amid a more fragile industry environment for commercial vehicles, with leverage peaking by the end of 2025. "We revised our expectations for Tupy's financial performance in light of weaker demand for commercial vehicles. "We expect Tupy S.A. to post higher leverage from weaker cash flows because of more challenges in the industry. "We forecast the company's EBITDA margin close to 8% in 2025, resulting in debt to EBITDA around 3.5x by the end of the year, then falling to close to 2.0x in the coming years." Global commercial vehicle production (excluding China) is projected to fall by 5% in 2025 compared with 2024. This anticipated contraction is primarily attributable to heightened geopolitical uncertainties, a complex global trade landscape influenced by U.S. tariffs, and elevated interest rates. These factors negatively affected the industry during the second quarter of 2025, as evidenced by Tupy's 10% volume decrease compared with the same period in 2024. S&P said, "We expect these pressures to persist across Tupy's key geographic markets and continue to constrain the company's financial performance in subsequent quarters. We now forecast Tupy S.A.'s net revenue to decline to approximately R$10 billion in 2025, accompanied by significantly weaker profitability. This is largely attributable to increased idle capacity. We project an EBITDA margin of around 8%, compared with 12% in 2024." S&P said, "However, we expect an important rebound in margins in 2026, reaching close to 11%. This would be driven by increasing demand mainly related to fleet renewal and new contracts already signed. In addition, since 2024, Tupy has been implementing operational efficiency measures to adjust its production capacity after recent acquisitions, and the company anticipates a 25% reduction in its total capacity by 2026. Management expects this will result in fixed cost reductions of approximately R$ 100 million in 2026 and R$ 180 million in 2027. It also expects an improvement of at least two percentage points in EBITDA margin from other efficiency measures focused on increasing productivity and integration. We also expect solid performance in the replacement parts, manufacturing contracts, and energy & decarbonization businesses. "Within this scenario, we project a peak in leverage in 2025, followed by an improvement in 2026. Reflecting the anticipated lower cash generation, we now expect adjusted debt to increase to approximately R$2.8 billion at year-end, which, when combined with reduced EBITDA, results in our forecast of debt to EBITDA of around 3.5x at year-end 2025. This level is significantly higher than the company's historical range of 1.0x-2.0x and prompted us to revise our financial risk profile on Tupy to intermediate from modest. However, with our forecast of increasing EBITDA and improved cash generation in 2026, the company may be able to reduce leverage to approximately 2.0x by year-end. However, the uncertainty surrounding the speed of this profitability and credit metrics rebound led to us revising our outlook to negative. "We expect Tupy to maintain a strong liquidity position, in line with the past years. The company benefits from a well-extended debt maturity profile, with its next relevant maturity being the R$790 million first series of debentures in 2029. In June 2025, Tupy had a cash position of almost R$ 1.5 billion and short-term debt of only about R$ 196 million. Despite expected weaker cash flow generation in the coming months, we think Tupy will maintain a robust liquidity position, given the absence of significant near-term debt maturities. Additionally, the company's investments are primarily focused on operational improvements and projects with secured revenue streams, supporting enhanced cash flow generation from 2026 onwards. "Our rating on Tupy is currently one notch above our 'BB' foreign currency rating on Brazil, reflecting our view that there's a high likelihood that the company wouldn't default in a sovereign default scenario. The company's production and sales abroad as well as its sound cash position (part of it abroad as well) and extended debt maturity profile leads to our view that it would maintain sufficient liquidity sources to service short-term debt and minimum capital expenditure needs in a hypothetical sovereign default scenario. "The negative outlook reflects our view that Tupy will report weaker credit metrics amid a more fragile industry environment for heavy vehicles, with leverage peaking at around 3.5x by the end of this year. It also reflects the uncertainty on how fast the industry will rebound, allowing the company to return to profitability and leverage levels aligned with our previous expectations. "We may downgrade Tupy's ratings in the next 12-18 months if the company is unsuccessful in its operational efficiency measures or if demand remains weak, resulting in weaker profitability and credit metrics for longer than projected. In this scenario, we would not see EBITDA margin improving to above 10% and debt to EBITDA trending close to or below 2x in 2026. "We could revise the outlook to stable in the next 12-18 months if Tupy has a recovery in volumes and margins, as a result of its internal measures and improving industry prospects. In this scenario, we would expect the company's leverage to reduce to consistently below 2x and EBITDA margin above 10%, combined with the maintenance of a strong liquidity." =========================== C A Y M A N I S L A N D S =========================== STONECO LTD: Moody's Affirms 'Ba2' CFR & Alters Outlook to Positive ------------------------------------------------------------------- Moody's Ratings has affirmed the Ba2 corporate family rating of StoneCo Ltd. (Stone), as well as Stone Instituicao de Pagamento S.A.'s Ba2 backed senior unsecured notes fully and unconditionally guaranteed by Stone. Stone's outlook was changed to positive, from stable, and Moody's also assigned a positive outlook to Stone Instituição de Pagamento S.A. RATINGS RATIONALE AFFIRMATION OF Ba2 CFR AND DEBT RATINGS The Ba2 ratings reflect Stone's strong market position as the largest independent payment acquirer in Brazil, built upon an innovative and scalable business model that has been supporting recurring earnings generation over time. Moody's ratings assessment also factors in recent improvement in the company's funding structure and its adequate liquidity profile, which is backed by Brazil's well-regulated card scheme and high-quality receivables from large banks. Stone's ratings are, however, constrained by challenges inherent to the highly competitive, easily disrupted payment industry, as well as the likely slowdown in economic activity in Brazil amid elevated interest rates. Since acquiring a term deposit-taking license in 2024, Stone has significantly improved its funding mix, supporting its focus on expanding total payment volumes and its lending portfolio. Alongside its rapidly growing customer and brokered deposits, the company has relied on non-recourse sales of credit card receivables, its own capital and debt to meet its financing needs. In June 2025, its debt, including deposits, represented 4.1x EBITDA when factoring in the interest expenses associated with the true-sale of receivables, compared to 2.3x in the prior year. While the debt to EBITDA ratio is rising as deposits replace non-recourse sales of credit card receivables, 71% of total deposits are stable, granular resources from its customer base. In June 2025, Stone's cash and net receivables represented 176% of its balance sheet debt and brokered deposits, compared to 149% a year earlier. While this cushion will decrease as part of company's stated intention to return excess capital to shareholders, Moody's anticipates that Stone will maintain a high level of cash liquidity and capital to support business growth prospects and provide adequate buffers to navigate macroeconomic volatility. The Ba2 ratings also incorporate recent operational shifts as Stone grows its lending book, adding asset risks to its business model. The company's loan book grew by 154% in the twelve months ending June 2025, yet it represented only 18% of tangible common equity, with a loan loss reserve accounting for 13% of gross loans and high product margins providing additional cushions against losses. CHANGE IN OUTLOOK TO POSITIVE The positive outlook reflects Moody's expectations that core customer deposits, which attained 16.8% of Stone's liabilities in June 2025, will continue to grow as a percentage of total funding, reducing its high reliance on confidence-sensitive institutional sources, and providing a diversification of funds to support the franchise expansion. The outlook also acknowledges Stone's consistent improvement in operational results since 2023, with the net income to average managed assets ratio averaging 4.3% from 2023 to June 2025, compared to 0.7% from 2020 to 2022, supported by its continued business growth, disciplined risk management, and increasing penetration of value-added services, particularly banking solutions, which are all factors Moody's expects to be sustained over the next 12 to 18 months. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS The ratings could be upgraded if Stone's recent improvements in funding diversification are sustained and continue to support the expansion into riskier products while maintaining strong profitability. Conversely, the ratings could be downgraded if there is a sudden deterioration in profitability due to increased competition, adverse risk taking, or changes in the regulatory environment. A shift to a more aggressive financial policy could also negatively impact Stone's ratings or trigger a change in outlook. The principal methodology used in these ratings was Finance Companies published in July 2024. StoneCo Ltd.'s "Assigned Financial Profile" score of baa3 is set three notches below the "Financial Profile" initial score of A3 to reflect for the issuer's high reliance on confidence-sensitive investors to meet its heavy funding needs and execution risks associated with accelerated credit growth and multiple acquisitions. =============== C O L O M B I A =============== COLOMBIA: Elevated Sovereign Spreads, Investment Remains Weak ------------------------------------------------------------- The Executive Board of the International Monetary Fund (IMF) concluded the Article IV consultation with Colombia on September 29, 2025. The authorities have consented to the publication of the Staff Report prepared for the said consultation. Staff Report Colombia enters a pre-electoral year amid a mixed economic backdrop. Growth has strengthened somewhat, while inflation is gradually easing, aided by appropriately tight monetary policy. International reserves remain adequate and continue to be strengthened. However, a widening fiscal deficit and rising debt levels have led to elevated sovereign spreads, and private investment remains weak amid lingering concerns and uncertainties over the direction of policies. In June, the government invoked the escape clause to suspend the fiscal rule through 2027. Real GDP growth is projected to reach around 2 1/2 percent in 2025, but is expected to moderate over the coming years due to planned fiscal adjustment, before gradually converging to its potential. Returning to the fiscal rule by 2028 will require substantial consolidation efforts, although confidence gains and lower spreads could limit the fiscal drags on growth. Inflation is expected to ease gradually to about 4½ percent by end-2025 and the 3 percent target by early 2027, conditional on tight monetary policy and the resumption of fiscal restraint. The current account deficit is expected to widen to around 2 1/2 percent of GDP in 2025. International reserves remain adequate and continue to be strengthened, reaching 131 percent of the ARA metric by end-June 2025. The outlook is subject to significant downside risks. On the external front, tighter global financial conditions, rising trade barriers, stricter immigration policies, and heightened geopolitical tensions could dampen growth, disrupt exports, FDI, and supply chains, reduce remittances, and raise borrowing costs. Domestically, further delays in fiscal consolidation could raise concerns about unanchored fiscal policy, further undermine investor confidence, and potentially trigger a sudden stop in capital inflows. Rising political uncertainties and an intensification of violent crime and insecurity could weigh on economic activity and private sector development. Executive Board Assessment Executive Directors welcomed the strengthening of the Colombian economy and were encouraged by the progress in reducing inflation and poverty. Directors also recognized Colombia's resilience and history of prudent macroeconomic policies and solid institutions. They noted, however, challenges posed by weakened fiscal positions, amid significant downside risks related to domestic policy uncertainty and external headwinds. Directors underscored the importance of implementing the authorities' fiscal consolidation plan and maintaining agile policymaking to safeguard macroeconomic stability. Directors agreed that, amid repeated fiscal slippages and the temporary suspension of the fiscal rule—a key policy anchor—Colombia's fiscal policy and policy framework have deteriorated since the 2024 request of the Flexible Credit Line (FCL). In this context, Directors noted that the fiscal policy and policy framework have weakened considerably from a previously "very strong” assessment that is required for continued qualification for the FCL. Directors encouraged the authorities to step up their efforts to meet the near-term deficit targets and, looking ahead, supported the authorities' ambitious plan to return to the fiscal rule by 2028. As Colombia's gross public debt would remain sustainable over the medium term conditional on the assumed fiscal consolidation, Directors emphasized the importance of decisive and credible actions to implement the consolidation plan, which would help re-anchor expectations, lower borrowing costs, and improve the overall policy mix. In this regard, they recommended pursuing a balanced mix of growth-friendly expenditure and revenue measures, addressing budget rigidities, and adopting robust contingency planning. Directors commended the central bank's tight monetary policy stance, which has supported reducing inflation. They stressed that maintaining a tight monetary policy stance remains important to address persistent inflation pressures and upside risks, including those from continued expansionary fiscal policy. Moving forward, the normalization of monetary policy should proceed cautiously and remain data-dependent. Directors welcomed the strengthened international reserves position. They agreed that Colombia's flexible exchange rate regime should continue to play its role as a shock absorber and that foreign exchange intervention should remain limited to episodes of disorderly market conditions. Directors also underscored the importance of safeguarding central bank independence. Directors agreed that the financial sector remains broadly resilient, while emphasizing the need for continued close monitoring of risks amid still-elevated real interest rates, rising sovereign exposures, and close linkages between banks and nonbank financial institutions. They encouraged continued progress in implementing the 2022 FSAP recommendations and stressed that establishing a sound governance framework and prudent investment principles for the new public pension savings fund will be critical. To strengthen long-term growth prospects, Directors recommended reforms to raise productivity, boost labor force participation, and diversify the economy. Noting the authorities' ambitious energy transition plan, they emphasized the importance of a well-designed and carefully phased transition to support long-run sustainability and resilience and safeguard macroeconomic stability. Directors also encouraged the authorities to further strengthen governance and transparency, including to enhance the investment climate. As reported in the Troubled Company Reporter in August 2024, Fitch Ratings affirmed Colombia's Long-Term Foreign Currency Issuer Default Rating (IDR) at 'BB+' with a Stable Rating Outlook. =================================== D O M I N I C A N R E P U B L I C =================================== DOMINICAN REPUBLIC: Coffee Harvest at Risk Amid Labor Shortage -------------------------------------------------------------- Dominican Today reports that the Dominican Republic is facing the risk of losing its most promising coffee harvest in a decade due to a severe labor shortage, threatening over RD$6 billion in potential income for coffee-producing families. Farmers project more than 300,000 quintals of production this year - the highest since 2013 - at a time when international coffee prices have reached historic highs, with a quintal selling for RD$21,500, according to Dominican Today. In the southern region alone, producers expect over 120,000 quintals, but many fear the crop could spoil because there aren't enough workers to pick it, the report notes. Farmers note that while local labor is scarce, restrictions on Haitian workers - traditionally key to the harvest - have left them without alternatives, the report relays. Heavy rains in October are accelerating grain ripening, worsening the urgency, the report discloses. Producers accuse authorities of inaction, pointing out that neither the Dominican Coffee Institute (INDOCAFE) nor the Ministry of Agriculture have implemented contingency measures, the report says. "Every pound of coffee that falls to the ground represents 21 pesos lost forever,” one grower lamented, warning that without immediate intervention, a golden opportunity for rural communities could turn into an economic disaster, 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. DOMINICAN REPUBLIC: Tourist Tax Brings RD$3.85BB to Economy ----------------------------------------------------------- Dominican Today reports that the tourist tax, or US$10 tourist card, applied to foreign visitors entering the Dominican Republic, generated RD$3,852.8 million in the first eight months of 2025, reflecting a 0.6% increase compared to the same period in 2024, according to the General Directorate of Internal Revenue (DGII). The fee is mandatory for tourists but exempts Dominicans, foreign residents, diplomats, and certain private aviation travelers, according to Dominican Today. In August 2025, the tax contributed RD$469.8 million, marking a 7.8% growth from August 2024. While there have been calls to eliminate the fee, only Arajet has managed to exempt certain passengers, particularly those who do not require a consular visa, the report notes. The DGII maintains a reimbursement mechanism for passengers charged ineligible fees, and refunds can be requested via the DGII portal within one month of ticket purchase, the report relays. In 2024, refunds totaled US$118,940, the report discloses. The tourist tax has been in effect since 2018 and is included in airfare purchased abroad, the report says. It is enforced by multiple institutions, including the General Directorate of Immigration, Ministry of Foreign Affairs, DGII, Civil Aviation Institute, and Ministry of Tourism, the report notes. Similar tourist taxes are applied in other countries, such as Japan, Italy, France, Spain, Germany, Australia, Indonesia, Thailand, and New Zealand, often varying by season, accommodation, or type of tourist, 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. ============= J A M A I C A ============= JAMAICA: Tourism Sector Rebounding From COVID-19 ------------------------------------------------ RJR News reports that the Tourism Minister Edmund Bartlett says the country's tourism sector is well on the way to rebounding from the fallout caused by the deadly COVID-19 pandemic. He said the country is projected to welcome 1.34 million cruise passengers this year, a 7% increase when compared with last year, according to RJR News. Mr. Bartlett, however, stressed that in order for this rebound to continue, the country must carefully navigate the challenges related to emissions and environmental concerns, the report notes. About Jamaica Jamaica is an island country situated in the Caribbean Sea. Jamaica is an upper-middle income country with an economy heavily dependent on tourism. Other major sectors of the Jamaican economy include agriculture, mining, manufacturing, petroleum refining, financial and insurance services. On Feb. 21, 2025, Fitch Ratings affirmed Jamaica's Long-Term Foreign-Currency Issuer Default Rating (IDR) at 'BB-', with a positive rating outlook. In October 2023, Moody's upgraded the Government of Jamaica's long-term issuer and senior unsecured ratings to B1 from B2, and senior unsecured shelf rating to (P)B1 from (P)B2. The outlook has been changed to positive from stable. In September 2024, S&P affirmed 'BB-/B' longterm foreign and local currency sovereign credit ratings on Jamaica and revised outlook to positive. NATIONAL COMMERCIAL: Makes Leadership Changes to Corporate ---------------------------------------------------------- RJR News reports that the National Commercial Bank Jamaica (NCBJ) has announced a series of leadership changes aimed at strengthening its corporate and investment banking division. At the centre of the move is the promotion of Angus Young to Executive Vice President, Corporate and Investment Banking, according to RJR News. Young, who remains Chief Executive Officer of NCB Capital Markets Limited, will now also oversee NCB's Corporate Banking Division, bringing both arms of the business under one umbrella, the report notes. NCBJ CEO Bruce Bowen said the alignment will create a more seamless experience for the clients and enhance the bank's ability to deliver solutions at scale, the report discloses. As part of the changes, Carlene Lyn has been appointed Vice President, Corporate Banking, marking her return to NCB, the report says. With more than 17 years of experience in commercial banking across the Caribbean and Central America, she has a strong background in credit risk and corporate finance, the report discloses. Meanwhile, Jason Saunders, Vice President of Corporate and Commercial Banking, has departed the bank after five years of service, the report relays. He was credited with helping to strengthen the division and supporting clients during a period of transformation, the report adds. As reported in the Troubled Company Reporter-Latin America in March 2024, Fitch Ratings upgraded National Commercial Bank Jamaica Limited's (NCBJ) Long-Term Foreign and Local Currency Issuer Default Ratings (IDRs) to 'BB-' from 'B+'. Fitch has also upgraded NCBJ's Viability Rating (VR) to 'bb-' from 'b+'. The Rating Outlooks on the Long-Term IDRs are Positive following a similar Outlook on Jamaica's Long-Term IDRs. =========== M E X I C O =========== RUTAS DE LIMA: S&P Lowers Issue Rating to 'CC', On Watch Negative ----------------------------------------------------------------- S&P Global Ratings lowered its issue rating on Rutas de Lima S.A.C. (RdL) to 'CC' from 'CCC-'. The negative CreditWatch placement reflects our view that RdL is at imminent risk of defaulting on its notes, particularly if bondholders exercise their right to accelerate debt repayment, and given the cash outflows expected in the short term. On Sept. 29, 2025, RdL initiated the dissolution and liquidation process under Peru's corporate law, primarily due to the suspension of toll collections at its key plazas (Chillon and Conchan) along the Panamericana Sur road, compounded by regulatory penalties in the last two years. S&P said, "In our opinion, this decision significantly increases the project's exposure to nonpayment risks, further eroding RdL's credit quality. We anticipate that default is virtually inevitable once cash reserves are exhausted or debt payment acceleration is enacted." RdL has a 30-year concession with the Metropolitan Municipality of Lima (MML) to operate and execute mandatory and complementary construction and maintenance work along the three main roads into Lima, Peru. The concession includes 114.6 kilometers (km) of road infrastructure: 95.6 km of existing highways and 19 km of new construction. RdL's road network is divided into three sections: -- Panamericana Sur (PS; 54.1 km), the main access road to Lima from the south; -- Panamericana Norte (PN; 31.5 km), the main access road to Lima from the north; and -- Ramiro Priale (RP; 10 km of existing road and 19 km of new construction), the access road to the city from the east. According to the concession agreement, the MML transferred the operation and maintenance (O&M) management of PN and PS to RdL on Feb. 10, 2013. Brookfield Infrastructure Partners L.P. (BBB+/Stable/A-2) controls 57% of the project's shares, while CNO S.A. (not rated) and Sigma Fondo de Inversion de Infraestructura (not rated) own 25% and 18%, respectively. The approval of RdL's dissolution and liquidation process has markedly intensified the project's vulnerability to payment default. Despite the process, the company will continue operating concessioned roads and meeting obligations to workers, suppliers and users, although in this liquidation process bondholders could exercise their step-in rights. However, in S&P's view, the risk of default is heightened, as the project will continue to deplete its cash position or if bondholders decide to accelerate debt repayment, given that the percentage needed to approve it is by at least 75%. The Sept. 29, 2025, decision stems from the suspension of toll collection at RdL's critical plazas and from regulatory penalties. Currently, RdL remains operational, albeit with negative cash flow, holding approximately PEN278 million in cash reserves, which includes a debt service reserve account sufficient to cover coupon payments due December 2025. The negative CreditWatch placement reflects S&P's view that RdL is at imminent risk of defaulting on its notes, particularly if bondholders exercise their right to accelerate debt repayment, and given the cash outflows expected in the short term. =============== P A R A G U A Y =============== PARAGUAY: Fitch Alters Outlook on 'BB+' LongTerm IDR to Positive ---------------------------------------------------------------- Fitch Ratings has affirmed Paraguay's Long-Term Foreign Currency Issuer Default Rating (IDR) at' BB+' and revised the Rating Outlook to Positive from Stable. Key Rating Drivers Positive Outlook: The Outlook revision to Positive reflects Paraguay's strong growth performance and prospects due to a robust investment pipeline, low fiscal deficits, an expected decline in the public debt burden, and structural increases to the still low revenue base. It also reflects an active economic reform agenda and gradual reduction of the high foreign currency share of government debt. Paraguay's ratings reflect its history of generally prudent and consistent macroeconomic policies, low government debt compared to similarly rated peers, and robust external liquidity. Its ratings are constrained by weak governance indicators, a low revenue base, a shallow local capital market that narrows fiscal financing flexibility, and vulnerability to adverse climactic shocks (albeit increasingly mitigated by greater economic diversification). Robust Growth: Fitch forecasts growth of 4.8% in 2025, the third consecutive year with growth rates above private sector estimates of potential (3.5%-3.8%), up from 4.2% in 2024. Consumption and investment have been important growth drivers, amidst subdued government spending from ongoing fiscal consolidation and net export contraction. Growth in 1H25 was 5.9% in both quarters. This was driven by services, manufacturing and construction despite a decline in agricultural output, reflecting Paraguay's greater economic diversification away from traditional sectors. Fitch forecasts growth of 4.3% in 2026 and 4% in 2027; however, the advancement of large-scale investment projects is an upside to its forecasts. Large Investment Pipeline: Large-scale investment projects (totaling 16% of projected 2025 GDP) across various sectors have the potential to boost Paraguay's medium-term growth prospects. The Paracel pulp mill project (estimated value of USD3.8 billion, 8% of GDP) has been on the horizon for several years but has faced delays in securing full financing. Once greenlighted, the construction phase is expected to take two years, boosting investment during that period, with a significant increase in exports expected once operational. Other large projects, such as the ATOME fertilizer plant (2.2% of GDP), are moving forward, with one company recently signing a 10-year purchase agreement for fertilizer from the plant. Stable Inflation: Inflation has remained low and broadly stable, averaging 4.1% through September. Headline inflation has picked up over the last few months (to 4.3% in September, above the central bank's 3.5% inflation target). However, this has been impacted by seasonal climatic factors affecting food prices and high meat prices. FX appreciation this year should support disinflation towards the target this year. Inflation expectations at 24 months are anchored at the central bank's 3.5% target. The monetary policy rate has remained at 6% since March 2024. Return to Fiscal Rule Compliance: Fitch expects the government to remain on track on its fiscal consolidation plan. The plan envisions a 1.9% of GDP deficit this year and a return to the 1.5% of GDP deficit limit next year, as outlined in the recently proposed 2026 budget. Tax revenue growth this year has been more in line with nominal GDP growth than last year (10% through August), while other revenues from the hydro dams have fallen, and primary spending growth is contained (6%). The rolling 12-month deficit was 2.5% of GDP as of August, but should fall as high spending growth from 2024 rolls off. The 2026 budget projects increased spending and even higher revenues to meet the 1.5% deficit limit. However, Fitch expects further capex compression may be required to achieve this target. Sustaining low fiscal deficits in accordance with the fiscal rule will require an offsetting fiscal effort in the coming years to account for the rising deficit of the public sector pension system (caja fiscal). A new government actuarial study projects this deficit to rise from 0.5% of GDP to 1.5% by 2028. The fiscal impact of any reform will likely be gradual, so further fiscal effort may be necessary. Gradual Debt Decline: Lower deficits in combination with a stronger exchange rate this year means government debt likely peaked at 37.8% of GDP in 2024. Fitch forecasts debt falling to 35% in 2025 with a gradual reduction over the medium term to 34% in 2027. Gradually Falling Foreign Currency Debt Share: For a second year, Paraguay issued global guarani bonds (USD600 million in February, extending the curve to 10 years with a 8.5% coupon). As a result, the foreign currency government debt share fell to 84.2% as of August, from 90% at end 2023. Additionally, recent capital markets reforms now give non-resident investors direct access to the local market. The June government domestic bond auction (USD80 million equivalent) was the first to attract direct non-resident participation (about half). Active Reform Agenda: The government is actively pursuing reform efforts to modernize the state, improve the business environment and promote economic growth, investment and productivity. The Peña administration has approved more than 20 reforms in its first two years. The administration recently presented a package of 10 additional reforms, including new tax incentives to attract foreign investment, a revision of the maquila sector tax regime to include services, and a law to establish tax incentives for production and assembly of electronic equipment. Congress has already approved some of these measures. Reform of the 'caja fiscal' remains on the government's agenda and will likely require more political capital than previous reforms, given the required parametric changes to public sector retirement ages. Wider Current Account Deficits: The current account deficit widened to 3.9% in 2024, from 0.4% a year prior, due to weaker soy prices (despite high production) and lower hydroelectricity exports, combined with strong import demand both for consumer and capital goods. Fitch forecasts a slightly wider CAD in 2025, as drought conditions in some areas will likely lower production and strong economic growth along with FX appreciation will support import demand. Construction of the Paracel pulp mill remains delayed, but once green-lighted, Fitch expects moderately wide CADs to persist during the construction phase. Strong External Buffers: External liquidity buffers remain strong, with international reserves covering 5.8 months of current external payments in 2024, above the 'BB' median of 4.8 months. Reserves are up through September 2025, reaching USD10.3 billion from USD9.9 billion at end 2024, as higher gold prices and sovereign external borrowing have offset USD sales due to FX intervention. ESG - Governance: Paraguay's scores for both Political Stability and Rights and for the Rule of Law, Institutional and Regulatory Quality and Control of Corruption reflect the high weight that the World Bank Governance Indicators (WBGI) have in its proprietary Sovereign Rating Model. Paraguay has a medium WBGI ranking at the 36th percentile, reflecting a recent track record of peaceful political transitions, a moderate level of rights for participation in the political process, weak institutional capacity, weak rule of law, and a high level of corruption. RATING SENSITIVITIES Factors that Could, Individually or Collectively, Lead to Negative Rating Action/Downgrade Public Finances: Rising public debt to GDP due to a failure to sustain low fiscal deficits or address structural spending pressures on public finances. Macro: Lack of progress on large-scale investment projects that reduces prospects for a sustainable improvement in growth and/or materialization of a shock, such as an adverse weather event, that negatively impacts growth, fiscal and external metrics. Structural: Reduced confidence in the ability to advance the structural reform agenda. Factors that Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade Macro: Greater confidence in higher growth in the context of macroeconomic stability and progress on large-scale investment projects, that promotes economic diversification and increases prospects for GDP per capita convergence with higher rated sovereigns. Public Finances: Improvement in fiscal flexibility through reducing the public debt/GDP ratio, expanding the revenue base, and addressing the public sector pension deficit, as well as improvement in the currency composition of government debt. Structural: Evidence of a sustained improvement in governance including combatting corruption and strengthening public institutions. Sovereign Rating Model (SRM) and Qualitative Overlay (QO) Fitch's proprietary SRM assigns Paraguay a score equivalent to a rating of 'BB' on the Long-Term Foreign Currency (LT FC) IDR scale. Fitch's sovereign rating committee adjusted the output by +1 notch from the SRM score to arrive at the final LT FC IDR of 'BB+' by applying its QO, relative to SRM data and output, as follows: Macro: +1 notch, to reflect Paraguay's track record of prudent and consistent macroeconomic policies, including a floating FX regime and inflation targeting, that have helped manage shocks from recurring droughts and are not fully captured by the low governance scores feeding into the SRM score. Fitch's SRM is the agency's proprietary multiple regression rating model that employs 18 variables based on three-year centred averages, including one year of forecasts, to produce a score equivalent to a LT FC IDR. Fitch's QO is a forward-looking qualitative framework designed to allow for adjustment to the SRM output to assign the final rating, reflecting factors within its criteria that are not fully quantifiable and/or not fully reflected in the SRM. Debt Instruments: Key Rating Drivers Senior Unsecured Debt Equalized: The senior unsecured long-term debt ratings are equalised with the applicable Long-Term IDR, as Fitch assumes recoveries will be 'average' when the sovereign's Long-Term IDR is 'BB-' and above. No Recovery Ratings are assigned at this rating level. See Rating Actions below for the full set of instrument ratings. Country Ceiling The Country Ceiling for Paraguay is 'BBB-', 1 notch above the LT FC IDR. This reflects strong constraints and incentives, relative to the IDR, against capital or exchange controls being imposed that would prevent or significantly impede the private sector from converting local currency into foreign currency and transferring the proceeds to non-resident creditors to service debt payments. Fitch's Country Ceiling Model produced a starting point uplift of +1 notch above the IDR. Fitch's rating committee did not apply a qualitative adjustment to the model result. Climate Vulnerability Signals The results of its Climate.VS screener did not indicate an elevated risk for Paraguay. ESG Considerations Paraguay has an ESG Relevance Score of '5' for Political Stability and Rights as World Bank Governance Indicators have the highest weight in Fitch's SRM and are therefore highly relevant to the rating and a key rating driver with a high weight. As Paraguay has a percentile rank below 50 for the respective Governance Indicator, this has a negative impact on the credit profile. Paraguay has an ESG Relevance Score of '5' for Rule of Law, Institutional and Regulatory Quality and Control of Corruption as World Bank Governance Indicators have the highest weight in Fitch's SRM and are therefore highly relevant to the rating and are a key rating driver with a high weight. As Paraguay has a percentile rank below 50 for the respective Governance Indicator, this has a negative impact on the credit profile. Paraguay has an ESG Relevance Score of '4' for Human Rights and Political Freedoms as the Voice and Accountability pillar of the World Bank Governance Indicators is relevant to the rating and a rating driver. As Paraguay has a percentile rank below 50 for the respective Governance Indicator, this has a negative impact on the credit profile. Paraguay has an ESG Relevance Score of '4'[+] for Creditor Rights as willingness to service and repay debt is relevant to the rating and is a rating driver for Paraguay, as for all sovereigns. Given that Paraguay has record of 20 years without a restructuring of public debt, which is captured in its SRM variable, this has a positive impact on the credit profile. 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 ----------- ------ ----- Paraguay LT IDR BB+ Affirmed BB+ ST IDR B Affirmed B LC LT IDR BB+ Affirmed BB+ LC ST IDR B Affirmed B Country Ceiling BBB- Affirmed BBB- senior unsecured LT BB+ Affirmed BB+ ===================== P U E R T O R I C O ===================== BED BATH: Hudson Bay Obtains Dismissal in Trading Gains Dispute --------------------------------------------------------------- Chris Dolmetsch of Bloomberg News reports that a New York judge dismissed a lawsuit accusing Hudson Bay Capital Management of improperly avoiding stock ownership rules tied to Bed Bath & Beyond Inc.'s decline. The case, filed in May 2024, attempted to claw back $300 million in trading profits, alleging Hudson Bay broke laws mandating that investors with more than a 10% stake surrender short-term gains. The claims revolved around a 2023 derivatives transaction used to generate funding for the retailer at the height of its financial turmoil. The Troubled Company Reporter, citing Miles Weiss and Eliza Ronalds-Hannon of Bloomberg News, previously reported that the former Bed Bath & Beyond Inc., seeking to generate cash for its creditors, sued to recover more than $300 million in trading profits from Hudson Bay Capital Management, the hedge fund at the center of a last-ditch financing plan that failed to prevent the retailer's collapse. The former retailer filed a lawsuit claiming that, behind the scenes, Hudson Bay orchestrated the terms for a February 2023 offering so it could acquire a huge, cut-rate stake in Bed Bath without having to disclose the ownership under a little-known rule for corporate insiders. About Bed Bath & Beyond Bed Bath & Beyond Inc., together with its subsidiaries, is an omnichannel retailer selling a wide assortment of merchandise in the Home, Baby, Beauty & Wellness markets and operates under the names Bed Bath & Beyond, buybuy BABY, and Harmon, Harmon Face Values. The Company also operates Decorist, an online interior design platform that provides personalized home design services. At its peak, Bed Bath & Beyond operated the largest home furnishing retailer in the United States with over 970 stores across all 50 states, consistently at the forefront of major home and bath trends. Operating stores spanning the United States, Canada, Mexico, and Puerto Rico, Bed Bath & Beyond offers everything from bed linens to cookware to electric appliances, home organization, baby care, and more. Bed Bath & Beyond closed over 430 locations across the United States and Canada before filing Chapter 11 cases, implementing full-scale wind-downs of their Canadian business and the Harmon branded stores. Left with 360 Bed Bath & Beyond, and 120 buybuy BABY stores, Bed Bath & Beyond Inc. and 73 affiliated debtors on April 23, 2023, each filed a voluntary petition for relief under Chapter 11 of the United States Bankruptcy Code to pursue a wind-down of operations. The cases are pending before the Honorable Vincent F. Papalia and requested joint administration of the cases under Bankr. D.N.J. Lead Case No. 23-13359. Kirkland & Ellis LLP and Cole Schotz P.C. are serving as legal counsel, Lazard Frares & Co. LLC is serving as investment banker, and AlixPartners LLP is serving as financial advisor. Bed Bath & Beyond Inc. has retained Hilco Merchant Resources LLC to assist with inventory sales. Kroll LLC is the claims agent. ECGPR LLC: Case Summary & Six Unsecured Creditors ------------------------------------------------- Debtor: ECGPR , LLC AA 62 BO Playa Salinas, PR 00751 Business Description: ECGPR LLC holds fee simple ownership of a property at AA 62 Angel Maldonado Street in the Coco Margarita sector of Barrio Playa, Salinas, Puerto Rico, valued at about $117,000. Chapter 11 Petition Date: September 27, 2025 Court: United States Bankruptcy Court District of Puerto Rico Case No.: 25-04341 Judge: Hon. Enrique S Lamoutte Inclan Debtor's Counsel: Jacqueline Hernandez Santiago, Esq. HERNANDEZ AND ASSOCIATES LAW FIRM PO Box 366431 San Juan, PR 00936-6431 Tel: (787) 249-4264 Email: quiebras1@gmail.com Total Assets: $121,000 Total Liabilities: $1,122,000 The petition was signed by Edgardo Fernandez Laborde as president. A full-text copy of the petition, which includes a list of the Debtor's six unsecured creditors, is available for free on PacerMonitor at: https://www.pacermonitor.com/view/2Y7KPTA/ECGPR__LLC__prbke-25-04341__0001.0.pdf?mcid=tGE4TAMA ********* 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. Additional e-mail subscriptions for members of the same firm for the term of the initial subscription or balance thereof are US$25 each. For subscription information, contact Peter A. Chapman at 215-945-7000. . * * * End of Transmission * * *