260101.mbx

260101.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 Thursday, January 1, 2026, Vol. 27, No. 1 Headlines B A H A M A S SCILEX HOLDING: Subsidiary Secures $100MM Non-Recourse Loan B R A Z I L ACHE LABORATORIES: Fitch Affirms 'BB+' LT Foreign Currency IDR BANCO DE BRASILIA: S&P Withdraws 'B-/B' Issuer Credit Ratings C O L O M B I A [] Fitch Takes Actions on 3 Colombian Local & Regional Gov'ts. [] Fitch Takes Actions on 5 Colombian Transportation Projects P A N A M A BANISTMO SA: Moody's Alters Outlook on Ba1 Deposit Rating to Neg. P U E R T O R I C O RED LOBSTER: High Rents Force Executive Cuts During Turnaround V E N E Z U E L A VENEZUELA: Starts Shutting Oil Wells as U.S. Blockade Halts Flows - - - - - ============= B A H A M A S ============= SCILEX HOLDING: Subsidiary Secures $100MM Non-Recourse Loan ----------------------------------------------------------- Scilex Holding Company disclosed in a Form 8-K Report filed with the U.S. Securities and Exchange Commission that SCLX Stock Acquisition JV LLC, a wholly-owned subsidiary of the Company, entered into a Non-Recourse Loan and Securities Pledge Agreement with The St. James Bank & Trust Company Ltd., a corporation existing under the laws of the Bahamas, pursuant to which the Lender agreed to loan SCLX JV an aggregate principal amount of up to $100 million in one or more tranches. The timing and amount of any particular tranche of the Loan shall be determined at the sole discretion of the Lender, and the Lender shall notify SCLX JV in advance of its intention to fund a particular tranche. The Loan will accrue interest at the rate of the 12-month Secured Overnight Financing Rate, with such interest due and payable on the earlier of Maturity Date and the date of an event of default. The "Maturity Date" of the Loan is the eighth anniversary of the closing date of the first tranche of the Loan, and may be extended by up to 12 months at the request of SCLX JV. SCLX JV is also required to pay a fee of 0.25% of the principal amount of each tranche. Pursuant to the terms of the Loan Agreement, SCLX JV agreed to pledge such number of shares of common stock of the Company currently held by SCLX JV equal to 70% of the aggregate principal amount of the Loan, calculated in accordance with the terms set forth in the Loan Agreement in favor of the Lender as security for SCLX JV's satisfaction of its obligations thereunder. The Pledged Securities will be held in a securities account that SCLX JV or its affiliates will open with the Lender. The Loan Agreement contains certain events of default, including, without limitation: * a decrease in the closing price of the Pledged Securities of more than 20%, provided that such decrease is not cured within three days by delivering additional securities into the securities account or depositing cash into a bank account with the Lender as security for the Loan; * a decrease in the average trading volume of the Pledged Securities for any three consecutive trading days of more than 20% relative to the average trading volume of the 30 trading day period immediately preceding the closing of a tranche of the Loan; * or the Pledged Securities are delisted from the national securities exchange on which they are currently listed. If an event of default occurs and is not cured within the specified cure period under the terms of the Loan Agreement, then the Lender has certain remedies under the Loan Agreement, in addition to any remedies provided at law or in equity, including, without limitation, that the interest rate of the Loan will increase by an additional 5.0% per annum and the Loan Agreement will terminate automatically with the Lender entitled to foreclose upon or otherwise dispose of the Pledged Securities. The Loan Agreement also contains positive and negative covenants, representations and warranties and indemnification provisions that are customary for transactions of this type. A full text copy of the Loan Agreement is available at https://tinyurl.com/4cud6yxn About Scilex Holding Company Palo Alto, Calif.-based Scilex Holding Company -- www.scilexholding.com -- is an innovative revenue-generating company focused on acquiring, developing and commercializing non-opioid pain management products for the treatment of acute and chronic pain and, following the formation of its proposed joint venture with IPMC Company, neurodegenerative and cardiometabolic disease. Scilex targets indications with high unmet needs and large market opportunities with non-opioid therapies for the treatment of patients with acute and chronic pain, and is dedicated to advancing and improving patient outcomes. Scilex's commercial products include: (i) ZTlido (lidocaine topical system) 1.8%, a prescription lidocaine topical product approved by the U.S. Food and Drug Administration for the relief of neuropathic pain associated with postherpetic neuralgia, which is a form of post-shingles nerve pain; (ii) ELYXYB, a potential first-line treatment and the only FDA-approved, ready-to-use oral solution for the acute treatment of migraine, with or without aura, in adults; and (iii) Gloperba, the first and only liquid oral version of the anti-gout medicine colchicine indicated for the prophylaxis of painful gout flares in adults. In its report dated March 31, 2025, the Company's auditor, BMP LLP, issued a "going concern" qualification, attached to the Company's Annual Report on Form 10-K for the year ended Dec. 31, 2024, citing that the Company has suffered recurring losses from operations and has a net capital deficiency that raise substantial doubt about its ability to continue as a going concern. As of June 30, 2025, Scilex Holding had $83.76 million in total assets, $332.74 million in total liabilities, and a total stockholders' deficit of $248.99 million. =========== B R A Z I L =========== ACHE LABORATORIES: Fitch Affirms 'BB+' LT Foreign Currency IDR -------------------------------------------------------------- Fitch Ratings has affirmed Ache Laboratorios Farmaceuticos S.A's (Ache) Long-Term Foreign Currency Issuer Default Rating (LT FC IDR) and national scale and senior unsecured ratings, respectively at 'BB+' and 'AAA(bra)'. Fitch has also downgraded Ache Laboratorios Farmaceuticos S.A.'s Long-Term Local Currency Issuer Default Rating (LT LC IDR) to 'BB+' from 'BBB'. The Rating Outlook is Stable. The affirmation of Ache's LT FC IDR, national scale and senior unsecured ratings reflect its solid regional position in Brazil's stable pharmaceutical retail market. The company leads the prescription segment and maintains strong, well-established brands that command pricing premiums. The downgrade of the LC IDR reflects the concentration of Ache's operations in Brazil, lack of geographic diversification and its smaller size compared to the top global pharmaceutical companies, which limits the rating at this level. It also reflects Ache's challenges in recovering EBITDA margins and preserving market share amid a more competitive business environment. Key Rating Drivers Pressured Market Position and Diversification: Fitch expects Ache's market position to remain limited by the highly competitive environment. Ache is the fourth-largest retail pharmaceutical company in Brazil and a leader in prescription drugs. It has well-established brands and a diverse product portfolio. However, industry players are operating under aggressive commercial conditions, actively acquiring brands from multinationals and expanding their products across segments. Fitch believes the company will continue to face challenges defending its market position, which will limit its ability to increase scale and diversification away from Brazil. Lower Margins Likely to Sustain: As a result of this competitive environment, Ache's EBITDA margins should revolve around 19%-20% through 2028, down from a previous expectation of 25%. The company's strategy to increase investments in sales and R&D to regain market share and increase profitability in a more competitive environment may take some time to prove successful. Recurring Operating Cash Flow: Ache's pre-dividend FCF should remain close to historical levels. Fitch forecasts EBITDA and cash flow from operations (CFFO) of BRL1.1 billion and BRL900 million, respectively, in 2025, and BRL1.2 billion and BRL800 million in 2026, compared with EBITDA of BRL1 billion and CFFO of BRL930 million in 2024. This growth is supported by increased sales from new product launches and lower working capital pressures. Conservative Capital Structure: Fitch expects Ache to maintain its historically low leverage ratios and a conservative capital structure. Gross and net leverage are expected to remain between 1.5x-2.0x, and 1.0x-1.5x, respectively, from 2025 to 2028, as margins linger in the high-teens. In 2024, those metrics were 2.2x-1.3x. Low Portfolio Risk: Ache is not significantly exposed to license renewals or patent expirations. Like other emerging market pharmaceutical companies, it has a narrower R&D pipeline than multinational competitors and a weaker portfolio of patented products. The company's mature and consistently renewed portfolio, alongside its capacity to sustain product launches and increase innovation, will be key factors in maintaining its competitive position. Positive Industry Prospects: The pharmaceutical industry has positive long-term fundamentals in Brazil, driven by an aging population, increased demand for chronic disease medication and improved healthcare access. Sector growth has consistently outpaced that of the Brazilian economy, with annual increases above 10% since 2021, and Fitch believes that this rate will be sustained at 7% to 10% in the following years. Innovation and investment in specialized treatments should enhance medicine consumption. Investment in R&D, maintenance of a sustainable volume of launches each year and the expansion of the ability to benefit from sector growth will be key for Ache. Peer Analysis Teva Pharmaceutical Industries Limited (BB+/Stable) and Viatris Inc. (BBB/Negative) have far broader geographic footprints than Ache and product breadth in generics/specialty. This provides diversification and scale advantages. Teva's innovative assets and biosimilars underpin growth, but leverage is higher, and litigation/policy risks weigh on its financial profile. Viatris' scale and diversified manufacturing footprint support resilient cash generation, though U.S. generics pricing pressure and reinvestment needs temper margins. Hikma Pharmaceuticals PLC's (BBB/Stable) focused strategy in sterile injectables and strong MENA/U.S. presence deliver structurally higher EBITDA margins (over 25%) and conservative leverage (over 1.5x), distinguishing its financial profile from Aché's high-teens margin outlook. Royalty Pharma PLC's (BBB-/Stable) model is fundamentally different. Its diversified royalty portfolio with minimal operating costs yields very high margins and strong free cash flow, albeit with revenue concentration and dependence on product sales trajectories. Originators like Amgen Inc. (BBB/Positive) and diversified life sciences players like Bayer AG (BBB/Stable) benefit from global scale, innovation pipelines, and access to capital, supporting stronger business and financial profiles than Aché. While both face event risks (patent cycles, litigation), their diversification and cashflow capacity typically provide greater rating headroom. Overall, Aché's lower geographic diversification and sustained margin pressure, despite low leverage and adequate cash generation, are the key differentiators versus larger, globally diversified and higher margin peers. Fitch's Key Rating-Case Assumptions -- Sales volume growth of 4%-6%, with average price growth of 4%-7% per year in 2025-2028; -- Revenue growth of 6% in 2025 and 8%-10% per year in 2026-2028; -- Average annual capex of BRL400 million in 2025-2028; -- Dividend pay-out of 7% to 10% of net revenue per year. RATING SENSITIVITIES Factors that Could, Individually or Collectively, Lead to Negative Rating Action/Downgrade -- Gross and net leverage sustained above 3.5x and 3.0x, respectively, coupled with EBITDA margin below 15%. -- Intensifying competitive pressure leading to continued market-share losses or brand deterioration. -- A downgrade of Brazil's sovereign rating and/or Country Ceiling, which could trigger negative rating action on Ache's IDRs. Factors that Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade -- An upgrade of the LC IDR could occur if Ache's business profile improves due to a stronger market position and diversification that reduces exposure to Brazil; -- Gross and net leverage sustained below 2.0x and 1.5x, respectively, coupled with EBITDA margin above 25%. Liquidity and Debt Structure Ache has historically maintained robust liquidity. The company reported cash and marketable securities of BRL825 million as of Sept. 30, 2025. Liquidity is further strengthened by an undrawn BRL300 million revolving credit facility, strong pre-dividend FCF, and flexible dividend payment to manage cash needs. Ache's total debt of BRL2.3 billion consists of long-term transactions from development banks such as Banco Nacional de Desenvolvimento Economico e Social (BNDES; BB/Stable) with 8%, Banco do Nordeste do Brasil S.A. (BB/Stable) and others with 14%, debentures with 56% and Certificates of Real Estate Receivables - CRI with 22%. Issuer Profile Ache is the fourth-largest pharmaceutical company in the Brazilian retail market. It is a leader in prescription drugs with solid brand recognition and a diversified product portfolio. RATING ACTIONS Rating Prior ------ ----- Ache Laboratorios Farmaceuticos S.A. LT IDR BB+ Affirmed BB+ LC LT IDR BB+ Downgrade BBB Natl LT AAA(bra) Affirmed AAA(bra) senior unsecured Natl LT AAA(bra) Affirmed AAA(bra) BANCO DE BRASILIA: S&P Withdraws 'B-/B' Issuer Credit Ratings ------------------------------------------------------------- S&P Global Ratings withdrew its long-term 'B-' and short-term 'B' issuer credit ratings on BRB - Banco de Brasilia S.A. at the issuer's request. The ratings were on CreditWatch with negative implications at the time of the withdrawal, and the bank didn't have any outstanding international issuances or short-term plans to issue abroad. S&P's ratings reflected the bank's tight margins and profitability, constrained capital metrics, and governance and risk management, particularly in light of investigations into alleged fraud in loans acquired from Banco Master. Moreover, the CreditWatch negative reflected the 1-in-2 possibility of a downgrade in the short term, given it's still unclear how the investigation will unfold and how much it could affect the bank's reputation, financial risk, funding, and liquidity. =============== C O L O M B I A =============== [] Fitch Takes Actions on 3 Colombian Local & Regional Gov'ts. -------------------------------------------------------------- Fitch Ratings has downgraded the Long-Term Foreign and Local Currency Issuer Default Ratings (IDRs) of Bogota, the capital district of Colombia, and the city of Medellin to 'BB' from 'BB+'. The Rating Outlooks for both are Stable following the downgrade. Fitch has also revised the Outlook on the Long-Term Foreign and Local Currency IDRs of Distrito Especial Industrial y Portuario de Barranquilla to Stable from Positive and affirmed the IDRs at 'BB'. Key Rating Drivers The rating actions reflect the downgrade of the Colombian sovereign to 'BB' from 'BB+' on Dec. 16, 2025. Colombian local and regional governments (LRGs) are subject to decisions of the central government that influence their finances and responsibilities, and for this reason they cannot be rated above the sovereign (BB/Stable). The LRGs' other key rating drivers are unchanged, as are the standalone credit profiles. For other key rating drivers please see the previous published rating action commentary for each LRG. Key Assumptions Qualitative Assumptions: -- Risk Profile: Low Midrange; -- Revenue Robustness: Midrange (Bogotá and Medellín), Weaker (Barranquilla); -- Revenue Adjustability: Midrange; -- Expenditure Sustainability: Midrange; -- Expenditure Adjustability: Midrange; -- Liabilities and Liquidity Robustness: Midrange; -- Liabilities and Liquidity Flexibility: Weaker; -- Financial Profile: 'aa' (Bogotá and Medellín)/'a' (Barranquilla); -- Budget Loans (Notches): N.A.; -- Ad-Hoc Support (Notches): N.A.; -- Asymmetric Risks (Notches): N.A; -- Floor: N.A.; -- Sovereign Cap: 'BB'; -- Sovereign Cap (Local Currency): 'BB'. RATING SENSITIVITIES Factors that Could, Individually or Collectively, Lead to Negative Rating Action/Downgrade -- A negative action on the sovereign would be reflected in the LRGs' ratings; -- Bogota's IDRs could be downgraded if the payback ratio is close to 11x in the last years of Fitch's rating case; -- Medellin's IDRs could be downgraded if the enhanced payback ratio is close to 9.0x, coupled with an enhanced synthetic debt service coverage ratio (DSCR) below 1.5x, under Fitch's rating case; -- Barranquilla's IDRs could be downgraded if the payback ratio is consistently close to 7.0x, with coverage ratios consistently below 1.2x under Fitch's rating case or if there is a reassessment to 'Weaker' of one of the KRFs assessed as 'Midrange'. Factors that Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade -- A positive action on the sovereign would be reflected in Bogota's and Medellin's ratings, all other factors being equal. For Barranquilla, a payback ratio consistently close to 5.0x with a ADSCR close to 2.0x, or a payback ratio below 5.0x, under Fitch's rating case would also be required for an upgrade. Public Ratings with Credit Linkage to other ratings The IDRs of Bogota and Medellin are capped by those of the Colombian sovereign. In addition, Barranquilla's Outlooks are influenced by the Colombian sovereign Outlooks. RATINGS ACTION Rating Prior ------ ----- City of Medellin LT IDR BB Downgrade BB+ LC LT IDR BB Downgrade BB+ Distrito Especial Industrial y Portuario de Barranquilla LT IDR BB Affirmed BB LC LT IDR BB Affirmed BB Bogota, Distrito Capital LT IDR BB Downgrade BB+ LC LT IDR BB Downgrade BB+ senior unsecured LT BB Downgrade BB+ [] Fitch Takes Actions on 5 Colombian Transportation Projects ------------------------------------------------------------- Fitch Ratings has taken the following rating actions on five transportation projects in Colombia: -- P.A. Autopista Rio Magdalena (ARM): Affirmed the ratings on COP915,500 million UVR Notes and COP278,000 million UVR Loan at 'BB'. The Outlook was revised to Stable from Positive. -- Fideicomiso P.A. Costera (Costera): Downgraded the ratings on USD150.8 million USD bonds, COP327,000 million UVR bonds, and COP135,000 million UVR loan to 'BB' from 'BB+'. The Outlook is Stable following the downgrade. -- Fideicomiso P.A. Pacifico Tres (Pacifico Tres): Downgraded the ratings on USD260.4 million USD bonds, COP397,000 million UVR bonds and COP300,000 million UVR loan to 'BB' from 'BB+'. The Outlook is Stable following the downgrade. -- Patrimonio Autonomo Union del Sur (Union del Sur): Downgraded the ratings on USD125 million and USD152 million loans, COP1,019.5 billion loan and COP1,027.5 billion UVR notes to 'BB' from 'BB+'. The Outlook is Stable following the downgrade. -- Sociedad Concesionaria Operadora Aeroportuaria Internacional, S.A. (OPAIN): Downgraded the rating on USD415 million senior secured notes to 'BB+' from 'BBB-'. The Outlook is Stable. RATING RATIONALE The rating actions on ARM, Costera, Pacifico Tres and Union del Sur reflect the deterioration of Fitch's view on the credit quality of Agencia Nacional de Infraestructura (ANI)'s contributions to the projects, which are one of their main revenue sources. These actions follow Fitch's recent downgrade on Colombia's sovereign ratings to 'BB'/Stable, as ANI is considered a credit-linked entity to the Government of Colombia. The downgrade of OPAIN's rating follows the downgrade on Colombia's country ceiling to 'BB+' from 'BBB-'. In Fitch's view, the notes' rating is constrained by Colombia's country ceiling due to the rated debt's exposure to transfer and convertibility risks, as all revenue is collected onshore. These transactions' credit metrics are strong for the current rating category under the applicable criteria; however, they are constrained by the exposure to the credit quality of ANI obligations under the concession agreements for ARM, Costera, Pacífico Tres, and Union del Sur, and by Colombia's country ceiling in the case of OPAIN. KEY RATING DRIVERS Fitch has downgraded Colombia's ratings and country ceiling on persistent large fiscal deficits that will result in general government debt to GDP continuing to rise over the medium term and are diverging further from the peer median. Fitch expects the lack of a credible fiscal anchor, increased fiscal spending rigidities, and potential political constraints in implementing revenue-raising measures will challenge prospects for fiscal consolidation after the 2026 election, regardless of the outcome. Colombia's ratings are supported by a track record of preserving macroeconomic and financial stability, and are constrained by high fiscal deficits, rising debt/GDP, a high interest burden, and high commodity dependence. RATING SENSITIVITIES Factors that Could, Individually or Collectively, Lead to Negative Rating Action/Downgrade For ARM, Costera, Pacifico Tres and Union del Sur -- Deterioration in the financial and/or operational performance of the project, leading to a minimum projected loan life coverage ratio (LLCR) below 1.2x under Fitch rating case assumptions; -- Deterioration in the credit quality of ANI's contributions to the project. For OPAIN -- Deterioration of Colombia's country ceiling; -- A substantial deterioration of the project's operational and/or financial performance that results in DSCRs below 1.3x in FRC. Factors that Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade For ARM, Costera, Pacifico Tres and Union del Sur -- Improvement in the credit quality of ANI's grantor obligations. For OPAIN -- A positive rating action is unlikely, given the short remaining life of the rated debt and the current credit quality of the sovereign. PUBLIC RATINGS WITH CREDIT LINKAGE TO OTHER RATINGS The ratings of Costera, Union del Sur, Pacifico Tres and ARM are constrained by the transactions' exposure to the credit quality of ANI's obligations under the concession agreements. ANI is a credit-linked entity to the Government of Colombia (Local Currency IDR BB/Stable). OPAIN's rating is capped by Colombia's country ceiling. RATING ACTIONS Rating Prior ------ ----- P.A. Autopista Rio Magdalena P.A. Autopista Rio Magdalena/ Project Revenues - First Lien/ 1 LT LT UVR notes - COU 3.25 bln 6.05% bond/note 15-Jun-2036 69313QAA7 LT BB Affirmed BB UVR Loan - COU 985.56 mln term loan 15-Jun-2036 LT BB Affirmed BB Fideicomiso P.A. Costera Fideicomiso P.A. Costera/ Project Revenues - First Lien/ 1 LT LT USD 150.8 mln 6.75% Series A note 30-Jun- 2034 31574FAA5 LT BB Downgrade BB+ UVR 327 bln 6.25% (Colombia) bond/note 15-Jan-2034 31574FAB3 LT BB Downgrade BB+ COP 135 bln Floating term loan 30-Jun-2034 LT BB Downgrade BB+ Sociedad Concesionaria Operadora Aeroportuaria Internacional S.A. Sociedad Concesionaria Operadora Aeroportuaria Internacional S.A./Airport Revenues - First Lien/1 LT LT USD 415 mln 4.09% bond/ note 15-Dec-2026 P8711*AA4. LT BB+ Downgrade BBB- Patrimonio Autonomo Union del Sur Patrimonio Autonomo Union del Sur/Project Revenues - First Lien/1 LT LT USD Tranche A 124.7 mln term loan 15-May-2030 LT BB Downgrade BB+ USD Tranche B 151.8 mln term loan 15-May-2037 LT BB Downgrade BB+ IPC Loans COP 1.02 trl term loan 30-Apr-2030 LT BB Downgrade BB+ COU 3.53 bln 6.66% bond/ note 28-Feb-2041 credit agreement dated as of 10-feb-2022 70338LAA7 LT BB Downgrade BB+ Fideicomiso P.A. Pacifico Tres Fideicomiso P.A. Pacifico Tres/ Project Revenues - First Lien/ 1 LT LT USD Bond 31574EAA8 LT BB Downgrade BB+ UVR Bond 31574EAB6 LT BB Downgrade BB+ UVR Loan LT BB Downgrade BB+ =========== P A N A M A =========== BANISTMO SA: Moody's Alters Outlook on Ba1 Deposit Rating to Neg. ----------------------------------------------------------------- Moody's Ratings has affirmed all ratings and assessments assigned to Banistmo, S.A. (Banistmo), including the Ba1 long-term foreign currency deposit rating, the Ba1 long-term foreign currency senior unsecured debt rating, as well as the Baa3(cr) long-term counterparty risk assessment and Baa3 long-term counterparty risk rating. In addition, Moody's also affirmed Banistmo's ba1 baseline credit assessment (BCA) and ba1 adjusted BCA, the P-3 short-term counterparty risk rating, Not-Prime short-term deposit rating, and the P-3(cr) short-term counterparty risk assessment. The outlook on the long-term deposit and senior unsecured ratings was changed to negative, from stable. RATINGS RATIONALE The affirmation of Banistmo's Ba1 deposit rating and ba1 BCA is supported by the bank's solid capitalization sustained over the past five years and the gradual improvement in profitability since early 2025. Its sizable core deposit base, that accounted for 9% of total deposits in Panama in September 2025, is also a credit strength supporting Banistmo's ba1 BCA. However, over the past four years, Banistmo's asset quality has remained weaker than peers and historic levels, and remains a negative credit driver to its financial profile. Problem loans, measured by Stage 3 exposures, stood at 9.4% of gross loans as of September 2025, well above the system average of 2.4% in the same period. Despite efforts to stabilize Stage 2 formation, the high level of problem loans underscores the bank's significant portfolio concentration in single-name borrowers and in the construction and real estate sectors, as well as the ongoing contraction in loan volumes since 2023. While Banistmo benefits from substantial collateralization, loan loss coverage has trended downward since 2023, staying at a low 51.5% of problem loans as of September 2025. Profitability improved in September 2025, with net income to tangible assets rising to 1.1% from 0.6% a year earlier. However, the slowdown in loan origination, persistent margin compression and low efficiency metrics reported by the bank will constrain further improvements over the coming quarters. Capitalization remains a key credit strength supporting Banistmo's ba1 BCA, alongside its sizable core deposit base. The bank's tangible common equity (TCE) to risk-weighted assets (RWA) stood at 13.7% in September 2025, consistent with historical averages and providing a buffer against continued asset risk pressures. As Panama's second-largest commercial bank, Banistmo maintains a solid funding profile compared to other similar sized banks in Panama, with core deposits representing 80% of total liabilities in September 2025, despite muted annual growth in the last nine months. This funding strength helps offset its moderate liquidity buffers. OUTLOOK CHANGED TO NEGATIVE The outlook revision to negative reflects the bank's pressured financial profile, driven by persistent challenges in improving asset quality since 2023 and profitability pressures from tighter margins that have limited business expansion. In this context, the announced sale of Banistmo by Colombian GRUPO CIBEST S.A. (Ba2 stable) to Inversiones Cuscatlán Centroamérica S.A. on December 18, 2025, introduce execution risks during the integration process, given Panama's highly competitive banking segment, characterized by elevated funding costs, which continues to strain overall loan growth capacity. Banistmo's Ba1 deposit rating currently incorporates Moody's assumptions of a moderate likelihood of support from GRUPO CIBEST S.A. while the transaction awaits regulatory approval, which are expected for the second half of 2026. However, this expectation of affiliate support does not result in any ratings uplift for Banistmo. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS The BCA could be downgraded if execution risks from the change in ownership materialize and Banistmo's asset quality does not recover during the outlook horizon, or if the bank were to experience significant deterioration in capitalization, funding conditions or profitability levels as it awaits for regulatory approvals. Evidence of increased risk appetite, for example, above-peer average loan growth or a notable increase in lending concentrations, would also be negative for the BCA. While an upgrade of Banistmo's BCA and ratings is unlikely over the next 12 to 18 months given the negative outlook, the bank could return to a stable outlook if Moody's observes a faster-than-expected recovery in asset quality, alongside steady capitalization and profitability. The principal methodology used in these ratings was Banks published in November 2025. The net effect of any adjustments applied to rating factor scores or scorecard outputs under the primary methodology(ies), if any, was not material to the ratings addressed in this announcement. ===================== P U E R T O R I C O ===================== RED LOBSTER: High Rents Force Executive Cuts During Turnaround -------------------------------------------------------------- Eliza Ronalds-Hannon of Bloomberg News reports that Red Lobster is cutting executive and corporate roles while working to renegotiate burdensome leases that have complicated its efforts to return to consistent profitability after bankruptcy, according to people familiar with the matter. Dozens of poorly performing locations continue to drag on results, which remain largely unchanged from where the company stood before its bankruptcy filing last year, the people said, notes the report. The company confirmed that about 10% of its corporate workforce has been eliminated, along with roughly 200 positions at the restaurant level, the report states. About Red Lobster Restaurants Red Lobster Hospitality, LLC is an American casual dining restaurant chain headquartered in Orlando, Florida. The company has operations across most of the United States (including Puerto Rico and Guam) and Canada, as well as in China, Ecuador, Hong Kong, Japan, Malaysia, Mexico, Philippines, Turkey and the United Arab Emirates; as of June 23, 2020, the company had 719 locations worldwide. ================= V E N E Z U E L A ================= VENEZUELA: Starts Shutting Oil Wells as U.S. Blockade Halts Flows ----------------------------------------------------------------- Bloomberg News reports that Venezuela started shutting wells in a region that holds the world's largest deposits of oil in the face of a blockade by the Trump administration meant to financially squeeze the nation. Petroleos de Venezuela SA began shuttering wells in the Orinoco Belt on Dec. 28 as the state-run refiner ran out of storage space and inventory swelled, according to the report. PDVSA aims to reduce Orinoco Belt production by at least 25% to 500,000 barrels a day, the people said, the report notes. The decrease represents a 15% cut of Venezuela's overall output of 1.1 million barrels a day, the report adds. About Venezuela Venezuela, officially the Bolivarian Republic of Venezuela, is a country on the northern coast of South America, consisting of a continental landmass and a large number of small islands and islets in the Caribbean sea. The capital is the city of Caracas. Hugo Chavez was president to Venezuela from 1999 to 2013. The Chavez presidency was plagued with challenges, which included a 2002 coup d'etat, a 2002 national strike and a 2004 recall referendum. Nicolas Maduro was elected president in 2013 after the death of Chavez. Maduro won a second term at the May 2018 Venezuela elections, but this result has been challenged by countries including Argentina, Chile, Colombia, Brazil, Canada, Germany, France and the United States who deemed it fraudulent and moved to recognize Juan Guaido as president. The presidencies of Chavez and Maduro have challenged Venezuela with a socioeconomic and political crisis. It is marked by hyperinflation, climbing hunger, poverty, disease, crime and death rates, social unrest, corruption and emigration from the country. Moody's has withdrawn its 'C' local currency and foreign currency ceilings for Venezuela in September 2022. Standard & Poors has also withdrawn its 'SD/D' foreign currency sovereign credit ratings and 'CCC-/C' local currency ratings on Venezuela in September 2021 due to lack of sufficient information. Fitch withdrew its own 'RD/C' Issuer Default Ratings on Venezuela in June 2019 due to the imposition of U.S. sanctions on the country's government. ********* 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 2026. 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. 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