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260107.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, January 7, 2026, Vol. 27, No. 5 Headlines A R G E N T I N A ARGENTINA: Eases Tax Evasion Rules to Draw Out 'Mattress Dollars' ARGENTINA: Sells Dollars to Curb Peso Slide as New Rules Kick In PAN AMERICAN: Fitch Rates Sr. Unsec. Notes 'BB-', Outlook Stable PAN AMERICAN: Moody's Affirms B1 CFR; Rates New $500M Sr. Notes B1 C A Y M A N I S L A N D S VITALITY RE XVII: Fitch Rates Series 2026 Class C Notes 'BB-(EXP)' C H I L E VTR FINANCE: Fitch Hikes LongTerm IDRs to 'B+', Outlook Stable G U A T E M A L A BANCO INDUSTRIAL: Fitch Rates Tier 2 Sub. Notes 'BB-(EXP)' BANCO INDUSTRIAL: S&P Rates New Sub Loan Participation Notes 'BB-' J A M A I C A [] JAMAICA: BOJ Says Adoption of JAM-DEX Remains Limited P U E R T O R I C O ASOCIACION HOSPITAL: Cash Collateral Access Extended Until Jan. 30 PALMAS ATHLETIC: Court OKs Continued Cash Collateral Access V E N E Z U E L A MARTIN MIDSTREAM: Fitch Affirms 'B-' LongTerm IDR, Outlook Stable - - - - - ================= A R G E N T I N A ================= ARGENTINA: Eases Tax Evasion Rules to Draw Out 'Mattress Dollars' ----------------------------------------------------------------- AFP News reports that President Javier Milei has formally signed into law a so-called "fiscal innocence" bill, which aims to encourage people to bank dollars stashed under mattresses or in offshore accounts by forgiving a degree of tax evasion. Over years of high inflation and currency controls, Argentines have traded their pesos for dollars, which they often hoarded at home, in cash, according to AFP News. The government estimates citizens are sitting on some US$251 billion in what are commonly called "mattress dollars" - six times the Central Bank's reserves which stood at US$41 billion on December 30, the report notes. Milei has been on a mission to get citizens to bank their greenbacks to help the state meet foreign debt payments totaling US$19 billion this year, according to the Congressional Budget Office, the report says. The International Monetary Fund, to which Argentina owes tens of billions of dollars, asked the government to step up its efforts to rebuild its depleted currency reserves, the report notes. To lure deposits, Congress in December voted to raise 66-fold the amount for which citizens can face prosecution for tax evasion to the equivalent of US$70,000 per fiscal year, the report says. The law also reduces the statute of limitations - the number of years after an alleged offense during which a person can be held liable - for financial crimes and creates a new regime which exempts taxpayers from having to report changes in their net worth, the report discloses. Economy Minister Luis Caputo urged banks to immediately accept the deposits from people registered under the forgiveness regime, the report relays. He advised citizens to deposit their money in the state-owned Banco Nacion if private banks asked too many questions about the provenance of the funds, the report notes. "They deposit their dollars in the bank and can access them immediately, to spend as they wish or to save and earn interest, just like anywhere else in the world," Caputo wrote on X, the report notes. Opposition leaders, however, warned that the initiative would turn Argentina into a money-laundering mecca, the report says. "It transforms us into a haven for laundering dirty money and of laundering by drug-traffickers," said opposition Peronist lawmaker Jorge Taiana in a post on X, the report notes. Milei launched a large tax amnesty programme within months of taking office in December 2023, the report recalls. That scheme brought more than US$20 billion into the banking system, the report says. The funds were frozen in special accounts until Friday, when owners gained the right to freely dispose of them, 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. S&P Global Ratings on Dec. 17, 2025, raised its local currency sovereign credit ratings on Argentina to 'CCC+/C' from 'SD/SD'. S&P also raised its long-term foreign currency sovereign credit rating to 'CCC+' from 'CCC' and affirmed its 'C' short-term foreign currency rating. The outlook on the long-term ratings is stable. In addition, S&P raised its issue ratings on local currency bonds to 'CCC+' from 'CCC'. S&P's 'B-' transfer and convertibility assessment is unchanged. Moody's Ratings on July 17, 2025, upgraded Argentina's long-term foreign currency and local currency issuer ratings to Caa1 from Caa3 and changed the outlook to stable from positive. Fitch Ratings, on May 12, 2025, upgraded Argentina's Long-Term Foreign-Currency and Local-Currency Issuer Default Rating (IDR) to 'CCC+' from 'CCC'. DBRS, Inc. upgraded Argentina's Long-Term Foreign and Local Currency Issuer Ratings to B (low) from CCC in November 2024. ARGENTINA: Sells Dollars to Curb Peso Slide as New Rules Kick In ---------------------------------------------------------------- Ignacio Olivera Doll at Bloomberg News reports that Argentina's Treasury sold dollars on Jan. 2, people familiar with the matter said, looking to limit the decline of the peso on the first day that new rules allowing for larger swings kicked in. Traders estimated sales of US$150 million to US$200 million, asking not to be named because the information is private, according to Bloomberg News. The Treasury didn't immediately respond to a request for comment, note the report. Argentina's Central Bank declined to comment. The peso weakened 1.4 percent to 1,475 per dollar on Jan. 2, the initial trading day of the year that marked the debut of Argentina's new foreign-exchange trading band regime, Bloomberg News relays. Under the new framework, announced in December, the peso's trading bands will expand at the same rate as monthly inflation instead of being capped at one percent per month, Bloomberg News says. Argentina is just days away from having to make a January 9 payment on its dollar bonds, Bloomberg News notes. Investors are confident the South American nation will meet its obligations - which include principal and interest - with outstanding notes maturing between 2030 and 2038 trading above 75 cents on the dollar, according to data compiled by Bloomberg. 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. S&P Global Ratings on Dec. 17, 2025, raised its local currency sovereign credit ratings on Argentina to 'CCC+/C' from 'SD/SD'. S&P also raised its long-term foreign currency sovereign credit rating to 'CCC+' from 'CCC' and affirmed its 'C' short-term foreign currency rating. The outlook on the long-term ratings is stable. In addition, S&P raised its issue ratings on local currency bonds to 'CCC+' from 'CCC'. S&P's 'B-' transfer and convertibility assessment is unchanged. Moody's Ratings on July 17, 2025, upgraded Argentina's long-term foreign currency and local currency issuer ratings to Caa1 from Caa3 and changed the outlook to stable from positive. Fitch Ratings, on May 12, 2025, upgraded Argentina's Long-Term Foreign-Currency and Local-Currency Issuer Default Rating (IDR) to 'CCC+' from 'CCC'. DBRS, Inc. upgraded Argentina's Long-Term Foreign and Local Currency Issuer Ratings to B (low) from CCC in November 2024. PAN AMERICAN: Fitch Rates Sr. Unsec. Notes 'BB-', Outlook Stable ---------------------------------------------------------------- Fitch Ratings has assigned a 'BB-' rating to Pan American Energy, S.L., Argentine Branch's proposed benchmark-size unsecured bonds. The notes will be guaranteed by Pan American Energy S.L. (PAE; BB-/Stable), and net debt proceeds will be used to finance capex and working capital, growth of its Oil & Gas business in Argentina and other general corporate purposes. Fitch currently rates PAE's Long-Term Foreign and Local Currency Issuer Default Rating (IDR) 'BB-'. The Rating Outlook is Stable. PAE's 'BB-' ratings reflect its stable, strong business profile, production track record, large reserve base, and moderate leverage. The ratings are constrained by the three-notch uplift over the Country Ceiling of Argentina of 'B-', in line with Fitch's Corporate Rating criteria. The company has cash in foreign currency and cash flows from its Mexican and Bolivian operations which adequately covers the next 24 months of debt service by a ratio exceeding 1.5x. Key Rating Drivers Rating Above the Country Ceiling: PAE's cash flow generation is concentrated in Argentina (CCC+) at 89% of the EBITDA. The Long-Term Foreign Currency IDR is capped three notches above Argentina's Country Ceiling (B-), as the company is able to cover hard currency debt service with export revenue and cash in foreign currency, while maintaining a foreign currency debt service coverage ratio above the 1.5x threshold for at least three years. Integrated Business Model: PAE's energy business model in Argentina gives the company flexibility to optimize profitability. It operates the country's largest privately owned oil and gas (O&G) business, with 13% market share in oil production and 14% in gas production, and is the third-largest refiner, with a 14% market share. PAE has a strong and stable production profile consistent with a higher rating category. Fitch's base case assumes average production of 240 thousand barrels of oil equivalent per day (kboe/d) for 2026-2027. PAE reported 1,574 million barrels of oil equivalent (MMboe) in proven (1P) reserves as of fiscal 2024, consistent with the 'BBB' rating category. Adequate Financial Profile: Fitch projects EBITDA leverage will hover around 3.0x over the rating horizon as the company deploys its capex plan, estimated to average USD1.4 billion per year between 2026 and 2028. On a boe-basis, Fitch estimates debt to 1P of close to $2.6/boe between 2026 and 2028. PAE's strong financial flexibility allows it to mitigate the risks associated with its high-risk operating environment. Fitch expects FCF to be negative over the rating horizon, as the company deploys an aggregate capex plan close to USD4.0 billion. Strong Ownership: PAE is rated on a standalone basis. Per Fitch's parent-subsidiary criteria, it views the legal, strategic and operational incentive from its shareholders as low. The company's primary shareholders are a 50/50 strategic alliance between BP plc (A+/Stable) and BC Energy Investments Corp. (BC Energy). BC Energy is also a 50/50 joint venture between Bridas Energy Holdings Ltd. and CNOOC International Ltd, a subsidiary of CNOOC Limited (A/Stable). However, PAE's ratings are not affected by its shareholders' ratings. The company benefits from its industry and international expertise and relationships with global creditors. Peer Analysis PAE's Foreign Currency IDR continues to be constrained by the Argentine Operating Environment (OE) of 'b'. However, its medium production sales size of 222kboed and strong 1P reserve life of close to 19 years compare favorably to other 'BB' rated oil and gas exploration and production companies. These peers include Murphy Oil Corporation (BB+/Stable) with 184kboed and YPF SA (CCC+) with 523kboed. PAE reported 1,574 million boe of 1P reserves at YE 2024, equating to a reserve life of 19.8 years. Fitch expects the company to be able to maintain its strong reserve life over the rating horizon. Fitch estimates PAE's 2025 EBITDA gross leverage to be close to 3.0x, higher than Murphy Oil's 1.0x. On debt to 1P reserve basis, Fitch PAE's debt as of 2024 to 1P reserves at USD2.25boe lower than YPF's USD8.2boe. PAE operates in a weaker OE, which is a constraining factor for its ratings, but receives a three-notch uplift from the Country Ceiling due to its cash flows from export revenue and abroad. Fitch's Key Rating-Case Assumptions -- Average Brent prices from 2025 to 2028 (USD/bbl): 65, 65, 65, 60; -- A reserve replacement ratio of 100% per annum; -- Domestic gas price of 3.50MMBTU over the rated horizon; -- Average net production sales of 222kboe/d in 2025; -- Production cost of $13.0boe between 2025-2028; -- Royalties of $7.0boe in 2025; -- SG&A of $7.0boe between 2025-2028; -- Annual consolidated capex averaging of USD1,400 million per year from 2025-2028. RATING SENSITIVITIES Factors That Could, Individually or Collectively, Lead to Negative Rating Action/Downgrade -- Sustained gross leverage above 4.0x; -- Sizable debt-financed M&A transactions; -- A downgrade of the Argentina's Country Ceiling; -- PAE's ratings could be negatively affected if hard-currency liquidity is weakened by capital controls; -- Inability to renew hard-currency-committed credit lines from highly rated international banks. Factors That Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade -- Cash flows from operations in Mexico adequately covering hard currency gross interest expense by at least 2.5x for 12 months, while maintaining hard currency debt service coverage ratio above 1.5x. Liquidity and Debt Structure Fitch believes PAE can comfortably service debt with cash on hand and cash flows through the rating horizon. As of 3Q25, the company had close to USD972 million in cash and equivalents and USD750 million in undrawn committed credit lines, while having short-term debt of USD737 million. PAE also has a strong track record of tapping local and international markets and accessing capital at competitive rate. Issuer Profile PAE is a leading integrated energy company with upstream and downstream operations in Argentina, as well as upstream operations in Bolivia and Mexico. It is the second-largest oil and gas producer in Argentina and the third- largest exporter of oil. PAN AMERICAN: Moody's Affirms B1 CFR; Rates New $500M Sr. Notes B1 ------------------------------------------------------------------ Moody's Ratings has affirmed Pan American Energy, S.L. (PAE)'s B1 Corporate Family Rating and Pan American Energy, S.L., Argentine Branch (PAE Argentine Branch)'s B1 senior unsecured notes' rating. At the same time, Moody's have assigned a B1 rating to the proposed up to $500 million backed senior unsecured notes. The notes are guaranteed by PAE and rank pari passu with PAE Argentine Branch´s and PAE's other present and future unsecured and unsubordinated debt obligations. The outlook remains stable for all ratings. Net proceeds from the proposed issuance will be used in the exploration and development of assets in Argentina, finance PAE Argentine Branch's investment plan for expansion, acquiring, constructing, or improving refining assets and the distribution network of refined products as well as some liability management. The rating of the proposed notes assumes that the final transaction documents will not be materially different from draft legal documentation reviewed by us to date and assume that these agreements are legally valid, binding and enforceable. RATINGS RATIONALE PAE's credit profile is supported by its status as the second-largest integrated oil and gas producer and one of the largest exporters of hydrocarbons in Argentina (Government of Argentina Caa1 stable), with a sound market position and financial and operating performance; good foreign-currency liquidity; and sizable exports. PAE also has exploration, development and production interests in Bolivia (Government of Bolivia Ca stable) and Mexico (Government of Mexico Baa2 negative), and renewable power generation projects in Argentina and Brazil (Government of Brazil Ba1 stable). PAE's main subsidiary is PAE Argentine Branch, which typically accounts for most of PAE's total oil and gas production and holds PAE's refining assets. Given PAE's high exposure to Argentina's business environment (92% of revenues and 89% of production for oil and gas as of the Nine Months ended in September 2025), its rating reflects Moody's views that PAE's creditworthiness cannot be completely de-linked from the credit quality of the Argentine government. However, PAE's credit profile stands out among other Argentine companies because of its strong sponsors, diversified income — including foreign operations and exports — and ample liquidity, supporting its capacity to manage foreign currency debt. PAE's ratings are mainly constrained by its geographic concentration of assets and operations in Argentina, although this is partially mitigated by some assets and operations in Mexico, Bolivia and Brazil, and by sales diversification through exports. Additionally, the company is exposed to regulatory risks within Argentina and to the volatility of energy commodity prices. The ratings also take into account PAE's strong sponsors, which provide certain operational advantages in terms of technical knowledge, administrative practices and corporate governance policies, also support the rating. PAE is 50% owned by BP p.l.c. (BP, A1 stable) and 50% owned by BC Energy Investments Corp (BC). BC is a privately owned oil and gas company, which is 50% owned by Bridas Energy Holdings Ltd. and 50% owned by CNOOC International LTD, a subsidiary of CNOOC Limited (CNOOC, A1 negative). PAE's liquidity is good. As of September 2025, the proposed bond issuance together with cash and equivalent and cash generated from operations compared favorably with debt maturing in the next 12 months. PAE's gross leverage is conservative and well below that of its peers with a B rating, with gross debt to EBITDA standing at 2.7x (Moody's-adjusted) as of September 2025, and Moody's expects will remain around 2.5x-3.0x in fiscal-years 2025-2026, and debt to book capitalization remaining at around 27%-28%. Also, PAE has a long track record of securing a diversified pool of funding sources through international and local financial institutions and capital markets. Moreover, PAE will adjust its investments to protect its liquidity, in case of need. PAE's stable outlook reflects the company's solid credit metrics for its rating category and good liquidity. However, PAE's creditworthiness cannot be completely de-linked from the credit quality of the Argentine government, where it generates the bulk of its revenue, and thus its ratings and outlook incorporate the risks that it shares with the sovereign, in line with Moody's cross-sector rating methodology, Assessing the Impact of Sovereign Credit Quality on Other Ratings, published in June 2019. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS An upgrade of PAE's ratings is contingent upon its relative positioning in the event of an upgrade of the Government of Argentina's credit rating. Additionally, expansion and diversification of operations beyond Argentina while maintaining strong credit metrics and good liquidity could also contribute to positive rating action. The ratings could be downgraded if the government of Argentina's Caa1 rating is downgraded. Also, a downgrade could be triggered in the event of a material and sustained decline in liquidity or credit metrics. PROFILE Pan American Energy, S.L. (PAE) is a privately owned integrated energy company based in Argentina. PAE's activities include (i) upstream operations in Argentina, Bolivia and Mexico; (ii) downstream operations in Argentina; and, (iii) power generation in Argentina and Brazil. PAE's main subsidiary is Pan American Energy, S.L., Argentine Branch (PAE Argentine Branch), which typically accounts for most of PAE's total oil and gas production and holds PAE's refining assets. The principal methodology used in these ratings was Integrated Oil and Gas published in September 2022. The difference between the scorecard-indicated outcome, both historical and projected, and the actual B1 rating assigned to the company exceeds two notches. This difference results from applying the cross-sector rating methodology due to the company's asset base concentration in Argentina. =========================== C A Y M A N I S L A N D S =========================== VITALITY RE XVII: Fitch Rates Series 2026 Class C Notes 'BB-(EXP)' ------------------------------------------------------------------ Fitch Ratings expects to rate Series 2026 Principal-At-Risk Variable Rate Notes issued by Vitality Re XVII Limited (the Issuer), a Cayman Islands exempted company licensed as a Class C insurer. All classes of Notes have a Scheduled Termination Date of Jan. 8, 2030 and a Final Extended Redemption Date of Jan. 8, 2031. The expected principal amount for the Class A Notes is $160,000,000, $60,000,000 for the Class B Notes and $30,000,000 for the Class C Notes with no amortization. The interest spread for the notes will be determined at time of pricing. This preliminary rating is based on the 'weakest-link' of the following key rating drivers: i) medical benefit ratio excess-of-loss (XoL) risk assessment; ii) the Issuer Default Rating (IDR) of ceding insurer; and iii) the credit quality of the permitted investments. Fitch believes the risk assessment of the medical benefit ratio XoL presents the greatest risk. RATING ACTIONS Rating ------ Vitality Re XVII Limited Series 2026, Class A Notes Principal-at-Risk Variable Rate Notes due January 8, 2030 LT BBB+(EXP)sf Expected Rating Series 2026, Class B Principal-at-Risk Variable Rate Notes due January 8, 2030 LT BB+(EXP)sf Expected Rating Series 2026, Class C Principal-at-Risk Variable Rate Notes due January 8, 2030 LT BB-(EXP)sf Expected Rating This is the 17th medical benefit ratio "ILS bond" for covered business underwritten by Aetna Life Insurance Company (ALIC, the Covered Business Company). Effectively, Vitality Re XVII replaces Vitality Re XIII Limited, which matures in January 2026, while Vitality Re XIV Limited, Vitality Re XV Limited and Vitality Re XVI remain outstanding. Fitch has assigned ratings to Vitality Re XV and Vitality Re XVI Notes. Capitalized but undefined terms have the meaning provided in the Offering Circular Supplement and the Offering Circular for the Notes. Transaction Summary The Series 2026 Notes (Class A, B, C) provide collateralized, multi-year, indemnity-based annual aggregate XoL reinsurance protection to Health Re, Inc., a Vermont domiciled special purpose financial insurance company. Health Re is wholly-owned by Aetna Inc. (Aetna) and assumes a quota share of certain commercial group health insurance policies (the Covered Business) underwritten by ALIC. Aetna is wholly-owned by CVS Health Corporation (CVS Health). The Covered Business to be ceded to Health Re primarily consists of commercial insured accident and health business, namely Preferred Provider Organization (PPO), Point of Service (POS) and Indemnity products, directly written by ALIC. These are reportable in ALIC's statutory annual statements as Accident and Health Group. Excluded Risks include the following products: Group Insurance, dental and vision, Medicaid and Medicare, individual medical, stop-loss, employee assistance programs, AARP, "mini-med", student health, domestic expatriate and plans where the insured pays 100% of the premium. For the nine months ended Sept. 30, 2025, ALIC earned $9.8 billion of premiums on approximately 1.7 million members for the Covered Business. ALIC will cede $1.0 billion of anticipated gross annual premiums to Health Re. Full-year premiums for the Covered Business for 2024 and 2023 were $13.7 billion and $12.9 billion, respectively. Each Class of Notes is "principal-at-risk," meaning a principal loss will occur if the Covered Business's medical benefit ratio (MBR) exceeds a predetermined attachment (MBR Attachment), set at inception and reset annually during the second, third and fourth Annual Risk Periods. The initial MBR Attachment level is 98.5% for Class C, 101.5% for Class B and 107.5% for Class A. A total principal loss (MBR Exhaustion) occurs if the MBR reaches 101.5% for Class C, 107.5% for Class B and 123.5% for Class A. There are four Annual Risk Periods, each running from Jan. 1 to Dec. 31. Milliman, Inc. acting as Modeling Agent, will deliver the MBR Risk Analysis Report, which informs the probabilities of attachment and expected loss. Milliman will also act as the Reset Agent, delivering a Reset Report for the second, third and fourth Annual Risk Periods using Updated Health Industry Exposure Data and the Updated Aetna Exposure Data. The updated MBR Attachment and updated MBR Exhaustion will be established to maintain the same modeled probability of attachment and expected loss as the initial modeled probabilities (used in the MBR Risk Analysis Report) and will be effective Jan. 1 of each Annual Risk Period. The interest spread will not change. The Notes may be redeemed due to specified Early Redemption Events, including: i) clean-up events; ii) Health Re's failure to meet Vermont capital requirements; iii) regulatory or legislative changes affecting ALIC (or Health Re) leading ALIC to terminate coverage; iv) Health Re defaulting on an Installment Premium payment; v) failure to replace the Reset Agent, Claims Reviewer, or Loss Reserve Specialist if they cannot perform their duties; or vi) Health Re's election to terminate the XoL Agreement under certain conditions. An Early Termination Event Premium will be paid to noteholders for events (ii) and (iv). Health Re may, at its option, elect to require Vitality Re XVII to extend the term of each XoL agreement (thereby extending the maturity date of the related Class of Notes) past the Scheduled Termination Date. This extension may be four additional quarters with the Final Extended Redemption Date being Jan. 8, 2031 and is not considered an additional risk period. Generally, claims incurred in a given calendar year are 99% completely paid within 12 months following the end of that year. KEY RATING DRIVERS Medical Benefit Ratio XoL Risk Assessment Performance Under Historical Events (Positive Trait): To date, noteholders have not experienced any principal loss on any prior transaction. The Series 2026 MBR Attachment Levels of 98.5%, 101.5% and 107.5%, provide varying degrees of conservatism relative to historical results. The calendar year average annual MBR from 2017-2024 was 86.4%, with a maximum 90.8% in 2021. The prior three years show an increasing reported annual MBR trend of 85.8% (2022), 86.6% (2023) and 89.6% (2024). Through the nine months of 2025, the reported MBR was 90.6%. Although the MBR trigger is determined over a calendar year, no quarterly MBR over the prior 31 quarters (from 1Q18 to 3Q25) would cause a Series 2026 MBR Trigger event; the maximum 96.3% occurring in 3Q25. This time period includes the pandemic-stress experience on the Covered Business. Third-Party Model is Complex (Neutral): The rating analysis supporting the risk assessment of the MBR XoL is highly model-driven, and actual losses may differ from the results of simulation analyses. This model and its prior iterations have been used in all prior Vitality transactions. Fitch reviewed this third-party model according to its "Insurance Linked Securities Criteria" and found it sufficient. The model produces a MBR probability distribution as a combination of two separate component models: i) a Claims Trend Module comprised of nine sub-modules with corresponding data and assumptions; and ii) a Premium Trend Module comprised of nine sub-modules, including output from the Claims Trend Module. A total of two million simulations are run to generate a volume of modeling points in the tail of the distribution. Initial Modeled MBR Attachment Probability (Neutral): The modeled one-year attachment probability based on the best estimate (base case) assumptions was 5 bp, 53 bp and 167 bp for the Class A, B and C Notes, respectively. These probabilities of first dollar loss correspond to an implied rating of 'bbb+' for Class A, 'bb+' for Class B and 'bb-' for Class C, according to Fitch's ILS Calibration Matrix. Fitch qualitatively reviewed sensitivity analysis (see below) that generally showed a one to two rating downgrade possibility under adverse conditions. This review, along with baseline modeled results, determined Fitch's medical benefit ratio XoL risk assessment. Model Assumptions Appear Reasonable (Neutral): An important driver and starting point for the model is the realized historic MBR for the first Annual Risk Period which is set at the recent five-year average ending Sept. 30, 2025 of 88.68% and increased to 88.85% to account for certain provisions of Affordable Care Act such as the Health Insurer Fee and Small Group Exchange. The averaging of historical reported results can smooth annual volatility but understates the most recent reported results above. The assumed mean medical cost trend is 6.84% with a standard deviation of 4.19% based on 1995-2024 data. The mean rises by 40 bp to 7.24% in total due to inflation expectations. Per the MBR Risk Analysis Report, the primary driver of 'normal' historical medical insurance financial fluctuations is volatility in per capita claim trends and lags in insurers' reactions to these trend changes in their premium rating actions. Other volatility factors include changes in expenses, target profit margins, and enrollment growth and declines. Extreme tail risk is primarily driven by a severe pandemic which contributes an estimated 98% and 76% and 46% of the initial modeled MBR attachment probability for the Class A, B and C Notes, respectively. Sensitivity Analysis Illustrated Downside but Limited Risks (Negative): Sensitivity tests were provided by changing certain underlying model assumptions. Given the structure of the 2026 Series, the Class A Notes appear resilient to these changes, while Class B and C could face a one to two notch decrease in implied ratings. The results are as follows: Nine claim trend sensitivities were provided with the attachment probability for Class A ranging from ========= C H I L E ========= VTR FINANCE: Fitch Hikes LongTerm IDRs to 'B+', Outlook Stable -------------------------------------------------------------- Fitch Ratings has upgraded VTR Finance N.V.'s Long-Term Local and Foreign Currency Issuer Default Ratings (IDRs) to 'B+' from 'CCC+'. Fitch has also upgraded VTR Comunicaciones SpA's USD307 million senior notes due 2029 to 'BB' with a Recovery Rating of 'RR2' from 'CCC+'/'RR4'. The Outlook on the IDRs is Stable. The upgrades reflect a sharp reduction in leverage following the repayment of VTR and VTR Comunicaciones' 2028 senior notes. The parent company injected capital, which enabled the payment of 68% of the consolidated debt. These actions show strong financial support from America Movil, S.A.B. de C.V. (AMX; 'A-'/Stable) for Claro Chile SpA and VTR Finance N.V. While legal linkage remains low, medium operational and strategic incentives support a two-notch uplift from VTR's Standalone Credit Profile. The Stable Outlook reflects Fitch's expectation of stable leverage, gradual improvement in operational performance and continued support from AMX. Key Rating Drivers Lower Leverage Expected: VTR's leverage is projected to decline to about 3.5x by YE 2025, down from 10.6x for the 12 months ended September 2025, primarily due to the full repayment in December 2025 of the USD703 million 2028 senior notes. Fitch expects medium-term FCF to remain negative, even with lower capex over the rating horizon. Capex will be about 40% of revenue in YE 2025 and is projected to fall to around 20% or lower thereafter, focused on network upgrades. Fitch expects AMX's financial support for Claro Chile and VTR to cover any negative FCF, if needed. PSL Linkage with AMX: Fitch applies its Parent and Subsidiary Linkage Rating Criteria via the stronger parent path, viewing AMX as the ultimate parent with a stronger credit profile, greater diversification and a solid business model. Legal incentive for support is low since AMX does not guarantee VTR's debt, while strategic and operational incentives are medium. Financial Support from AMX: Fitch notes strong parental support, evidenced by VTR's recent capitalization to repay debt and clearer signs of common management across VTR Finance, Claro Chile, and AMX. This is supported by AMX's contributions used to fully repay the 2028 senior notes (USD483 million for VTR Finance and USD220 million for VTR Comunicaciones), AMX's 100% ownership of Claro Chile, and the reorganization of the corporate structure, businesses, and assets of its Chilean operations. EBITDA Margin Improvement: Fitch expects the EBITDA margin to recover gradually over the rating horizon. VTR's EBITDA margin improved to 19.7% for the LTM to September 2025 from 9.5% in 2024, with EBITDA rising to CLP81 billion from CLP42 billion on consolidation synergies and cost efficiencies. As of September 2025, VTR has not grown RGUs due to intense price competition. Broadband subscribers dropped to under 1.03 million from 1.3 million since the pandemic, pressuring earnings. Peer Analysis VTR's performance is pressured by intense competition in Chile's broadband market. Its fixed-line operating profile is comparable to Telefonica Chile S.A. Claro Chile, on a consolidated basis, has scale and diversification similar to Telefonica Moviles Chile S.A. (TMCH; BB-/Negative), and benefits from a strong shareholder with a clear commitment to growth in the local market. Compared to Empresa Nacional de Telecomunicaciones S.A (Entel; BBB-/Stable), VTR has higher exposure to fixed services and lower exposure to mobile. Entel's geographic diversification is broader because of its Chile and Peru operations, and its financial profile is stronger, with net leverage consistently below 3.0x. Compared with Millicom International Cellular S.A.'s (BB+/Stable) subsidiaries Comcel (CT Trust; BB+/Stable) and Telefonica Celular del Paraguay (Telecel; BB+/Stable), VTR operates in a more competitive market but within a stronger operating environment. CT Trust and Telecel have more dominant market positions and lower net leverage. Their ratings reflect strong linkage to Millicom, which relies on dividends from these wholly owned subsidiaries to service its debt. Fitch's Key Rating-Case Assumptions -- About a 4% decline in fixed-line revenue in 2025, flat in 2026, then a modest recovery of around 2.0% in the medium term; low single-digit ARPU growth; -- EBITDA margin rises to around 22% in the medium term, driven by consolidation synergies and a conservative ARPU recovery; -- 2025 repayment of the 2028 senior secured notes—VTR Finance (USD483 million) and VTR Comunicaciones (USD220 million); -- Capex declining to below 20% of revenue in the medium term; -- No dividend distributions. Recovery Analysis Fitch applies a bespoke recovery analysis to issuers with IDRs of 'B-' or below. The analysis assumes VTR would be treated as a going concern in bankruptcy and reorganized rather than liquidated. The going concern EBITDA of CLP81 billion is based on sustainable, post-reorganization earnings that reflect intense competition in the Chilean market. A 4.0x enterprise value to EBITDA multiple is applied, reflecting challenging operating performance and a softer financial profile, despite a strong market position. Fitch applies a waterfall analysis to the post-default enterprise value based on relative claims in the capital structure. The debt waterfall is based on the company's total consolidated debt as of Sept. 30, 2025, and reflects the recent payments of the 2028 senior secured notes made in December 2025. These assumptions result in a Recovery Rating of 'RR1' for VTR Comunicaciones' 2029 secured notes; however, Fitch applies the standard instrument cap of 'RR2' in Chile, resulting in a two-notch uplift of the IDR to 'BB'. The improved recovery prospects primarily reflect the full repayment of VTR Finance's 2028 senior notes (USD483 million) and VTR Comunicaciones' 2028 senior notes (USD220 million). RATING SENSITIVITIES Factors that Could, Individually or Collectively, Lead to Negative Rating Action/Downgrade -- Weaker operational or strategic linkage between VTR Finance and AMX; -- Inability to fund capex plan internally or externally; -- Deterioration in operational performance and reduced financial flexibility. Factors that Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade -- Sustained recovery and stability in operating performance in subscribers, ARPU, and EBITDA margin; -- Material Improvement in financial flexibility; -- Clear evidence of stronger linkage with AMX (such as guarantees on the company's existing debt); -- CFO-capex to debt consistently above 2.0%. Liquidity and Debt Structure VTR's financial flexibility is weak, given negative FCF expected due to the strong investment while it restructures and integrates fixed and mobile operations. Additional funding to cover capex over the medium term is expected to come largely from contributions from Claro Chile if needed. The 2028 senior notes (USD483 million and USD220 million) were recently fully repaid using capital contributions from Claro Chile to VTR Finance. As of September 2025, VTR Finance's cash balance was CLP1.6 billion, supported by improved operating performance and cash received from derivative instruments. The next relevant maturity is VTR Comunicaciones' 2029 bond, totaling USD306 million. Issuer Profile VTR is part of Claro Chile SpA, a direct affiliate of AMX. Claro Chile SpA is the first provider of fixed broad band in Chile and the largest provider of pay TV services. RATINGS ACTION Rating Prior ------ ----- VTR Comunicaciones SpA senior secured. LT BB Upgrade RR2 CCC+ VTR Finance N.V. LT IDR B+ Upgrade CCC+ LC LT IDR B+ Upgrade CCC+ ================= G U A T E M A L A ================= BANCO INDUSTRIAL: Fitch Rates Tier 2 Sub. Notes 'BB-(EXP)' ---------------------------------------------------------- Fitch Ratings has assigned Banco Industrial, S.A.'s (Industrial) upcoming issue of Tier 2 subordinated notes an expected long-term rating of 'BB-(EXP)'. The expected rating is two notches below the bank's Viability Rating (VR) and aligns with Fitch's baseline notching for Tier 2 subordinated notes. The notes will be issued through Banco Industrial, S.A.'s Industrial Subordinated Trust 2.0. The tenor is expected to be 10.25NC5, and the amount of the U.S. dollar-denominated notes is yet to be determined. Proceeds from the issuance will be used to support credit operations for small and medium-sized enterprises (SMEs) and women-owned SMEs. The final rating is contingent upon receipt of final documents confirming the information already received. Key Rating Drivers Notching from Industrial's VR: The expected rating for the upcoming issuance is two notches below Industrial's anchor rating, its VR of 'bb+', reflecting that the notes will depend on Industrial's creditworthiness. The two-notch difference reflects higher loss severity for the notes relative to the bank's senior debt due to their subordinated status, and Fitch's view of a heightened likelihood of poor recoveries in a default scenario. Fitch does not apply any notching for non-performance risk because the notes do not have additional going-concern loss-absorption (e.g. interest deferral) features. Poor Recoveries in Liquidation Scenario: The notes will be unsecured and subordinated obligations. In the event of bankruptcy or liquidation, they will rank junior in right of payment to all of Industrial's existing and future senior obligations; pari passu in right of payment to the issuer's existing and future parity obligations; and senior to existing and future junior obligations. Consistent Performance: Industrial's VR reflects its solid business and funding profiles, underpinned by its robust competitive position as the leading bank in Guatemala. The bank's market shares in assets, loans and deposits were 29.0%, 28.9% and 26.6%, respectively, as of September 2025. Industrial has a consistent business model with a recognized franchise in Central America as part of a regional group. The bank has broad access to diverse financing sources. Industrial has demonstrated consistent financial performance characterized by good asset quality and relatively stable profitability. Fitch expects this trend to continue over the rating horizon. Internal capital generation has supported the bank's capital levels, although they have been tight. Fitch's capitalization assessment incorporates Industrial's track record of access to capital in global markets through AT1 and T2 instruments, which provide an additional loss-absorption cushion. Rating Sensitivities Factors that Could, Individually or Collectively, Lead to Negative Rating Action/Downgrade -- The subordinated debt rating would mirror any negative action on the bank's VR and would likely maintain the downward notching from the VR. Factors that Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade -- The subordinated debt rating would mirror any positive action on the bank's VR and would likely maintain the downward notching from the VR. Summary of Financial Adjustments Fitch's core capital calculation excluded prepaid expenses and other deferred assets from shareholders' equity. BANCO INDUSTRIAL: S&P Rates New Sub Loan Participation Notes 'BB-' ------------------------------------------------------------------ S&P Global Ratings assigned its 'BB-' long-term issue level rating to the proposed non-deferrable subordinated loan participation notes (LPN) to be issued by Banco Industrial through its special purpose vehicle (SPV), Industrial Subordination Trust 2.0. Industrial Subordination Trust 2.0, a special purpose vehicle (SPV) by Guatemalan based bank Banco Industrial (BB+/Stable/B), plans to issue non-deferrable subordinated notes to purchase 100% participation in a subordinated credit facility provided by International Finance Corporation (IFC, AAA/Stable/A-1+) to Banco Industrial. The proceeds, along with another $100 million subordinated loan directly provided by IFC to Banco Industrial, will be used to support credit operations for small and medium-sized enterprises (SMEs) and women-owned SMEs. S&P rates the proposed non-deferrable subordinated loan participation notes (LPNs) issued by Industrial Subordination Trust 2.0. relative to other debt obligations of Banco Industrial and treat the contractual obligations of the SPV as financial obligations of BI. S&P rates the proposed non-deferrable subordinated LPNs issued by Industrial Subordination Trust 2.0. (the SPV) relative to BI's other debt obligations and treat the SPV's contractual obligations as financial obligations of BI. The SPV meets the conditions regarding issuance by special-purpose vehicles (SPVs) set out in our group rating methodology: -- All of the SPV's debt obligations are backed by equivalent-ranking obligations with equivalent payment terms issued by the sponsor; -- The SPV is a strategic financing entity for the sponsor, set up solely to raise debt on behalf of the sponsor's group; and -- S&P thinks the sponsor is willing and able to support the SPV to ensure full and timely payment of interest and principal on the debt issued by the SPV, including paying the SPV's expenses. In addition, the notes share the same terms and conditions of the participation agreement between the SPV and the International Finance Corporation (IFC), and of the subordinated loan provided by IFC to BI. In this sense, BI will make the corresponding loan payments to the IFC, who will then transfer the funds to the SPV. The SPV will use the cash flows from the participation agreement with the IFC to fulfill its obligations to note holders. S&P said, "Our starting point to rate the proposed notes is our ICR (issuer credit rating) on Banco Industrial (BB+/Stable/B). The 'BB-' issue level rating on the notes is two notches below our rating on BI, given that the notes are contractually subordinated to other senior debt, are non-deferrable, and don't have loss absorption capacity. The proposed notes will have a fixed rate and will mature in 10.25 years, with a call option available after five years. The notes will be used to support credit operations for small and medium-sized enterprises (SMEs) and women-owned SMEs. The final terms of the issue will be defined at the time of the placement of the notes. "The notes will be classified as Tier 2 capital by the Guatemalan regulator, potentially improving BI's consolidated regulatory capital ratio, which, as of November 2025 was 12.03%. However, given that the notes don't have loss absorption features, we classify them as conventional non-deferrable subordinate debt with no equity content. Accordingly, our consolidated risk adjusted capital (RAC) ratio for BI will remain unchanged and around 7.2% in the next two years. "Following the proposed transaction, we do not expect significant changes to BI's funding mix, which as of September 2025 is mostly made up of a highly diversified deposit base, representing around 75% of total funding. After the issuance, the bank's funding mix will remain largely unchanged, with subordinated debt accounting for about 3% of the total funding." ============= J A M A I C A ============= [] JAMAICA: BOJ Says Adoption of JAM-DEX Remains Limited -------------------------------------------------------- RJR News reports that the Bank of Jamaica (BOJ) says adoption of its digital currency, JAM-DEX, remains limited, with just 2,379 merchants currently accepting the payment option. As a result, BOJ Governor Richard Byles says the entire Bank of Jamaica staff will be aggressively pushing for point-of-sale machines across commercial banks to be converted to accept JAM-DEX, according to RJR News. He says this is necessary to allow for wider marketing and to encourage more Jamaicans to use the digital currency instead of cash, the report notes. Governor Byles also noted that the total value of JAM-DEX in circulation increased by just $1.6 million to $260 million at the end of November, the report relays. Deputy Governor with responsibility for financial markets and payment systems, Natalie Haynes, says the modest increase was mainly due to the entry of a new participant into the digital payments space, the report adds. 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. In December 2025, Moody's Ratings upgraded the Government of Jamaica's long-term issuer and senior unsecured ratings to Ba3 from B1, and the senior unsecured shelf rating to (P)Ba3 from (P)B1. The outlook has been changed to stable from positive. Also in December 2025, S&P revised its outlook on Jamaica to stable from positive. At the same time, S&P affirmed its 'BB' long-term and 'B' short-term foreign and local currency sovereign credit ratings on Jamaica. S&P's transfer and convertibility assessment remains 'BB+'. Fitch Ratings in November 2025, affirmed Jamaica's Long-Term Foreign-Currency Issuer Default Rating (IDR) at 'BB-' and revised its Outlook to Stable from Positive. ===================== P U E R T O R I C O ===================== ASOCIACION HOSPITAL: Cash Collateral Access Extended Until Jan. 30 ------------------------------------------------------------------ The U.S. Bankruptcy Court for the District of Puerto Rico entered an order granting the joint motion for a fourth extension of the stipulation between Asociacion Hospital Del Maestro, Inc. and its secured creditor, Banco Popular de Puerto Rico, related to the use of cash collateral. The Court concluded that extending the cash collateral stipulation is in the best interests of the Debtor, its estate, and creditors. The extension was found necessary to preserve the Debtor's going concern value and to prevent immediate and irreparable harm, and that good and sufficient cause existed for approval. The order extended the stipulation through January 30, subject to its existing terms and conditions. The "adequate protection" provisions contained in the stipulation remain in full force and effect. About Asociacion Hospital Del Maestro Inc. Asociacion Hospital Del Maestro Inc., also known as Hospital El Maestro, is a nonprofit general medical and surgical hospital located in San Juan, Puerto Rico, that was founded in 1955 to serve the teaching community and has since expanded to provide services to the broader population. The hospital operates about 126 staffed beds and offers emergency care, intensive care, radiology, surgery, hemodialysis, and a range of medical specialties for children and adults. It is accredited by the Joint Commission and functions as a 501(c)(3) organization with a focus on healthcare, education, and community service. Asociacion Hospital Del Maestro Inc. sought relief under Chapter 11 of the U.S. Bankruptcy Code (Bankr. D.P.R. Case No. 25-03780) on August 25, 2025. In its petition, the Debtor reports total assets of $13,396,955 and total liabilities of $39,669,466. Honorable Bankruptcy Judge Enrique S. Lamoutte Inclan handles the case. The Debtor tapped Wigberto Lugo Mender, Esq., at Lugo Mender Group, LLC as legal counsel; CPA Luis R. Carrasquillo & Co., P.S.C. as financial consultant; and IEC Consulting, LLC as investment consultant. Banco Popular de Puerto Rico, as secured creditor, is represented by Luis C. Marini-Biaggi, Esq. and Carolina Velaz-Rivero, Esq. at Marini Pietrantoni Muniz, LLC. PALMAS ATHLETIC: Court OKs Continued Cash Collateral Access ----------------------------------------------------------- The U.S. Bankruptcy Court for the District of Puerto Rico approved a stipulation between Palmas Athletic Club Corp and UBS Trust Company of Puerto Rico regarding the use of cash collateral. The parties agreed to extend a previously approved stipulation regarding the use of cash collateral and adequate protection. Palmas Athletic Club filed for Chapter 11 bankruptcy on August 4, 2025, and has been operating as a debtor-in-possession. On August 18, 2025, the Debtor and Bond Trustee submitted an emergency stipulation to use cash collateral, which the court approved on August 25, 2025. A prior extension was granted on October 29, 2025, to continue the stipulation until January 1, with monthly adequate protection payments increased to $80,000. Under the new stipulation, the parties agreed to extend the use of cash collateral through March 31 and maintain the $80,000 monthly protection payments. All other terms remain unchanged. Both parties continue to reserve their rights, claims, and defenses under the original stipulation, and the Bond Trustee specifically reserves rights concerning any potential defaults by the Debtor. A copy of the stipulation is available at https://urlcurt.com/u?l=vSWIqd from PacerMonitor.com. 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 Aug. 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, at Charles A. Cuprill, PSC, Law Offices, as counsel; and CPA Luis R. Carrasquillo & Co., PSC, as financial consultant. UBS Trust Company of Puerto Rico, as Bond Trustee, is represented by Marini Pietrantoni Muniz LLC. ================= V E N E Z U E L A ================= MARTIN MIDSTREAM: Fitch Affirms 'B-' LongTerm IDR, Outlook Stable ----------------------------------------------------------------- Fitch Ratings has affirmed Martin Midstream Partners, LP's (Martin) and Martin Midstream Finance Corp.'s (FinCo) Long-Term Issuer Default Rating (IDR) at 'B-', and second lien secured notes at 'B+' with a Recovery Rating of 'RR2'. The Rating Outlook is Stable. The ratings reflect Martin's primarily fee-based cash flow profile, longstanding top-customer relationships, business-line diversity, and low leverage. The ratings are constrained by the company's modest size and tighter liquidity after weak 3Q25 performance, which increased leverage and reduced interest coverage and, due to covenants, restricted full revolver access. The Stable Outlook reflects Fitch's expectations that earnings will recover in 4Q25 but stabilize below prior expectations. Liquidity is currently manageable given no near-term maturities, limited working-capital needs, and no major growth projects. Martin is expected to proactively refinance the second lien notes, which would ease liquidity pressures and mitigate potential refinancing risks. KEY RATING DRIVERS Weakness in Operating Performance: Martin's 3Q25 earnings were pressured by weakness in transportation and specialty products segments. Marine transportation utilization fell as Gulf Coast refineries blended more light crude, and the grease business lost a major customer that moved services in-house. Utilization of marine vessels should improve in 4Q25 as refineries blend more heavy crude. Fitch expects earnings to recover modestly but stabilize below its prior forecast, reflecting volatility in heavy crude blending due to geopolitical risks, including Venezuelan sanctions, and challenges replacing lost volumes on the grease business. Tighter Liquidity Position: Weaker operating performance resulted in leverage increasing to about 4.6x and interest coverage falling to around 1.9x for LTM 3Q25 (per Fitch's calculations). Fitch expects these metrics to remain near these levels at YE 2025, then improve to around 4.0x-4.5x leverage and 2.3x-2.5x interest coverage in 2026-2028. Covenant headroom on the credit facility, Martin's primary liquidity source, is limited, restricting full revolver access. While leverage is strong for the rating, high interest burden strains interest coverage and pressures liquidity. Modest Yet Diversified Business: Martin's size is modest, with EBITDA of around $100 million and operations concentrated in the U.S. Gulf Coast. Smaller companies are less able to absorb industry downturns, and recent operating weakness has reduced Martin's earnings resilience. However, the Gulf Coast hosts leading petrochemical facilities with strong utilization rates, partly offsetting regional concentration risk. Martin's business-line diversity is also a credit positive, given exposure to multiple commodities and non-oil and gas customers. This reduces the chance of simultaneous impact across businesses, providing some stability to cashflows, mitigating size constraints. Growth Initiative Advancing Slowly: Martin's Project ELSA, a joint venture to provide Samsung C&T America, Inc.'s Texas semiconductor facility with electronic level sulfuric acid (ELSA) is progressing slowly due to Samsung's delays in bringing the plant fully online. Martin receives monthly reservation fees but does not expect substantial growth until 2027. The JV is exploring sales of ELSA to other U.S. semiconductor manufacturers, where imports face tariff risk. The JV will be the sole ELSA supplier to Samsung's new facility. Once the plant is fully online, this arrangement offers substantial upside for Martin that could grow if the JV secures additional customers. Stability of Cashflow Profile: Martin's cashflow is exposed to both volumetric and commodity price risks, increasing volatility. While it expects 70%-75% of EBITDA from fee-based contracts, only 10%-15% include minimum volume commitments, leaving most of the cashflow vulnerable to volume risk. Additionally, 25%-30% of EBITDA is derived from margin-based businesses tied to commodity price relationships, which are prone to thin profitability. Relationship with Parent and Top Customers: Martin Resource Management Corporation (MRMC), is Martin's parent company and largest customer. Fitch evaluates MRMC's credit profile to be about the same as Martin's. Therefore, Martin's ratings do not consider linkage factors with MRMC. Martin also benefits from longstanding relationships with other top customers, spanning multiple decades, reducing risks associated with exposure to short-term contracts. These customers are expected to drive over 60% of EBITDA, and many are investment-grade rated. However, most customers are high-yield or unrated private companies deemed to be high yield. PEER ANALYSIS Summit Midstream Corporation (Summit; B-/Positive) is a modestly sized, gathering and processing (G&P) peer with regional diversification, but greater exposure to mature, declining basins. Martin is more geographically concentrated but operates in a prolific region and has greater business-line diversity, though it relies heavily on regional refinery utilization rates. Martin's greater commodity price exposure drives higher cash flow volatility. Near-term leverage is comparable, but Martin is expected to have lower leverage over the medium term, partly offsetting its smaller size and volatile cashflow profile leading to the same rating. Summit's Positive Rating Outlook reflects the expected improvements in its financial profile. M6 ETX Holdings II MidCo LLC (B+/Stable) is a small-sized, regionally concentrated G&P peer with less cash flow exposure to commodity prices and a similar share of revenue-assurance type ship-or-pay contracts. M6's leverage is also expected to be lower. M6 operates in the Haynesville, which is well positioned to benefit from the LNG demand pull. Martin's higher leverage, more volatile cash flow profile, smaller size, and the lack of similar industry tailwinds are the primary factors driving the two-notch difference in its rating compared with M6. FITCH'S KEY RATING-CASE ASSUMPTIONS -- Proactive refinancing of the second lien notes consistent with the prevailing forward treasury curve and spread on existing notes; -- Robust U.S. Gulf Coast refinery utilization rates, and heavy crude blending activity, though volatile, remain at decent levels; -- Modest volume recovery in specialty products segment; -- Successful execution of growth projects and growth capital spend consistent with management guidance; -- Common dividends remain consistent with the current levels, and no M&A, asset divestitures, business exits, or large growth projects over the forecast period; -- Fitch's oil and gas price deck; -- Base interest rate for the credit facility reflects Fitch's Global Economic Outlook. RECOVERY ANALYSIS For the Recovery Rating, Fitch estimates the company's going concern value was greater than the liquidation value. The going concern multiple used was a 6.0x EBITDA multiple, which is in the range of most multiples seen in recent reorganizations in the energy sector. There have been a limited number of bankruptcies within the midstream sector. Two recent gathering and processing bankruptcies of companies indicate an EBITDA multiple between 5.0x and 7.0x, by Fitch's best estimates. In Fitch's recent bankruptcy case study, U.S. Energy, Power and Commodities Bankruptcies Enterprise Values and Creditor Recoveries (published October 2025), the median enterprise valuation exit multiple for the 51 energy cases with sufficient data to estimate was 5.3x, with a wide range of multiples observed. Fitch assumed a going concern (GC) EBITDA of roughly $85 million, which reflects Fitch's view of a sustainable, post-reorganization EBITDA level, upon which it has based the company's valuation. As per criteria, the going concern EBITDA reflects some residual portion of the distress that caused the default. The GC EBITDA is unchanged from last review. Fitch calculated administrative claims to be 10%, and a fully drawn credit facility, which are standard assumptions. The outcome is a 'B+' with a recovery rating of 'RR2' for the second lien secured notes. RATING SENSITIVITIES Factors that Could, Individually or Collectively, Lead to Negative Rating Action/Downgrade -- Inability to refinance the upcoming maturities in a timely manner; -- Weakening of the liquidity profile; -- EBITDA interest coverage below 2.0x on a sustained basis; -- EBITDA leverage above 5.0x on a sustained basis. Factors that Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade -- EBITDA interest coverage above 3.0x on a sustained basis; -- EBITDA leverage below 3.5x on a sustained basis; -- Material change to cash flow stability profile or a greater proportion of EBITDA derived from long-term MVC-type contracts. LIQUIDITY AND DEBT STRUCTURE The partnership had a total liquidity of roughly $11.4 million as of Sept. 30, 2025. Martin had a modest amount of cash on the balance sheet and about $11.4 million available to draw under its first lien secured RCF (net of $600 thousand in outstanding letters of credit). On Sept. 24, 2025, Martin amended its credit agreement to extend its revolver maturity to Nov. 16, 2027, decrease the commitment amount to $130 million, and adjust the covenants. Martin had roughly $75 million available under its credit facility but cannot draw on the full availability due to the covenants on the credit agreement. Martin's liquidity is expected to improve in 4Q25, however, will remain constrained due to the covenants. Martin's only debt maturity other than the revolver is the $400 million second lien secured notes due February 2028, which the partnership is expected to address proactively. Martin's working capital needs are limited and in the absence of near-term debt maturity, its liquidity is manageable. The covenants on the credit facility were adjusted for Martin to maintain a minimum interest coverage ratio of 1.75x, a maximum first lien leverage ratio of 1.25x, and a maximum total leverage ratio of 4.75x. As of Sept. 30, 2025, Martin was compliant with all debt covenants and had an interest coverage ratio of 1.85x, first lien leverage ratio of 0.55x, and total leverage ratio of 4.63x. Fitch expects Martin to remain compliant with all the covenants in the near-term. ISSUER PROFILE Martin is a publicly traded (NASDAQ: MMLP) master limited partnership that owns and operates midstream assets primarily in the U.S. Gulf Coast. RATINGS ACTION Rating Prior ------ ----- Martin Midstream Partners L.P LT IDR B- Affirmed B- Senior Secured 2nd Lien LT B+ Affirmed RR2 B+ Martin Midstream Finance Corporation LT IDR B- Affirmed B- Senior Secured 2nd Lien LT B+ Affirmed RR2 B+ ********* 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. 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