260202.mbx

260202.mbx T R O U B L E D C O M P A N Y R E P O R T E R L A T I N A M E R I C A Monday, February 2, 2026, Vol. 27, No. 23 Headlines A R G E N T I N A ARGENTINA: Merz Says Trade Deal Should Take Effect Provisionally B R A Z I L BRAVA ENERGIA: Fitch Affirms 'BB-' IDR & Alters Outlook to Positive BTG PACTUAL: Fitch Rates USD750MM Unsec. Notes Due 2031 'BB+' C O S T A R I C A BAC SAN JOSE: Fitch Affirms 'BB+' LongTerm IDRs, Outlook Stable D O M I N I C A N R E P U B L I C DOMINICAN REPUBLIC: Economy Grows 2.1% in 2025, Says Central Bank E C U A D O R ECUADOR: Fitch Rates 2034 and 2039 USD Bonds 'B-' J A M A I C A PORTLAND JX: Incurs US$3.7M Net Loss for 9-Mo. Period Ended Nov. 30 M E X I C O HEXION INC: Moody's Affirms B3 CFR & Cuts 1st Lien Term Loan to B3 P A N A M A MULTIBANK INC: Fitch Puts Longterm IDR on Watch Positive P U E R T O R I C O FIRSTBANK PUERTO RICO: S&P Alters Outlook on BB+ ICR to Positive V E N E Z U E L A VENEZUELA: U.S. Pushes for Quickest Fixes to Boost Oil Output - - - - - ================= A R G E N T I N A ================= ARGENTINA: Merz Says Trade Deal Should Take Effect Provisionally ---------------------------------------------------------------- Buenos Aires Times reports that German Chancellor Friedrich Merz urged the European Union to implement a new trade agreement with South American countries on a provisional basis, effectively sidestepping a judicial review of the pact engineered by its opponents in the European Parliament. The "democratic legitimacy" of the EU's Mercosur deal with Argentina, Brazil, Uruguay and Paraguay is beyond doubt, Merz told reporters after talks with Italian Prime Minister Giorgia Meloni in Rome, according to Buenos Aires Times. It can provisionally take effect as soon as the first of those South American nations ratifies it, he said, the report notes. "I regret very much that the European Parliament made its decision at a time when the world expects the European Union to demonstrate its ability to act," Merz said, the report relays. "We mustn't let ourselves be held back by those who want to use the lever of trade policy to drive the weakening of Europe," he added. The EU recently approved the Mercosur agreement after more than 25 years of negotiations, pushing it through over strong objections from France, which argued that the free-trade agreement would undermine European agriculture, the report notes. Meloni’s government also had initial doubts but ultimately backed the pact. Meloni reiterated that stance on, saying it was a "balanced deal" in part thanks to her lobbying and should come into effect, the report discloses. EU leaders raised the issue of applying the Mercosur agreement provisionally during a summit in Brussels, according to European Commission President Ursula von der Leyen, the report says. She said the Commission, which handles trade matters for the EU, hasn't decided yet on applying the trade deal, the report relays. Buenos Aires Times notes that Merz and Meloni were speaking at a joint press conference after German-Italian government consultations with senior ministers from both countries. Merz is seeking to deepen Germany's ties with Italy having grown frustrated over widening divisions with French President Emmanuel Macron in policy areas like trade and defence, as well as how to deal with an increasingly erratic US President Donald Trump, the report discloses. In a speech at the World Economic Forum in Davos, the conservative German leader said he hoped the Berlin-Rome axis would produce "almost revolutionary ideas" to spur economic growth and help create "a fast, dynamic Europe," the report relays. Merz and Meloni are not obvious political bedfellows – the Italian premier's Brothers of Italy party has its roots in the country's fascist movement -- but have agreed to present joint proposals on how to boost competitiveness to EU counterparts at a summit in Belgium on February 12, 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. 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. The upgrade reflects Moody's views that the extensive liberalization of exchange and (to a lesser extent) capital controls, alongside a new International Monetary Fund (IMF) program, support the availability of hard currency liquidity and ease pressure on external finances. This reduces the likelihood of a credit event. In January 2025, Moody's raised Argentina's local currency ceiling to B3 from Caa1 and the foreign currency ceiling to Caa1 from Caa3. Fitch Ratings, on May 12, 2025, upgraded Argentina's Long-Term Foreign-Currency and Local-Currency Issuer Default Rating (IDR) to 'CCC+' from 'CCC'. S&P Global Ratings, in February 2025 lowered its local currency sovereign credit ratings on Argentina to 'SD/SD' from 'CCC/C' and its national scale rating to 'SD' from 'raB+'. DBRS, Inc. upgraded Argentina's Long-Term Foreign and Local Currency Issuer Ratings to B (low) from CCC in November 2024. =========== B R A Z I L =========== BRAVA ENERGIA: Fitch Affirms 'BB-' IDR & Alters Outlook to Positive ------------------------------------------------------------------- Fitch Ratings affirmed Brava Energia's Long-Term Local and Foreign Currency Issuer Default Ratings (IDRs) at 'BB-' and Long-Term National Scale rating at 'AA-(bra)'. The Outlook was revised to Positive from Stable. Fitch also affirmed 3R Lux S.à.r.l.'s USD500 million secured notes due 2031 at 'BB-'. The Positive Outlook reflects the expectation that Brava's production will increase significantly if the company successfully completes the recently announced acquisition of a 50% interest in the Tartaruga Verde and Espadarte Module III fields (together, Tartaruga Verde) and its short-term offshore drilling activity. Brava announced the acquisition of the Tartaruga Verde assets for USD450 million, subject to downward adjustment regarding the asset's cash flows since July 1, 2025. If successful, the transaction is likely to support scale gains without pressuring credit metrics. Brava's ratings reflect its limited scale and modest, but improving operating efficiency, and well-diversified asset base across several Brazilian basins and moderate leverage. Key Rating Drivers Substantial Production Increase: The Tartaruga Verde acquisition would likely increase Brava's production by 28 kboe/d (+28%, proforma) after completion and make it exceed the upgrade sensitivity threshold of 125 kboe/d in 2027. The greater scale is a key rating driver, as it further dilutes high offshore fixed costs. The acquisition would benefit Brava's asset diversification, which already compares favorably with other independent Latin American (Latam) O&G producers. Tartaruga Verde's proved reserves are not certified but Brava's current reserves (511 million boe) are consistent with a 'BB' rating. Factoring the acquisition and assuming a successful offshore drilling campaign, Fitch projects Brava's production will reach 94 kboe/d in 2026, on average, and 127 kboe/d in 2027, growing towards 131 kboe/d in 2029. New wells in Atlanta and Papa-Terra, and a medium-term onshore drilling campaign, will be the main organic growth drivers, as well as Papa Terra's greater efficiency. Tertiary recovery techniques may be effective in slowing depletion onshore. Significant Deleverage: Fitch forecasts EBITDA total and net leverage at 2.8x and 2.2x in 2026, from 2.9x and 1.9x expected for fiscal-year ended 2025, dropping to 1.3x and 1.2x in 2027 even under weaker Brent prices. The reduction in 2027 will be driven by the production ramp-up and capex reduction in Atlanta and Papa Terra, assuming a successful drilling campaign. Despite being debt-funded, the acquisition should accelerate deleveraging, given the asset's strong cash flow generation relative to the transaction value. Brava has been able to reduce leverage by expanding production, advancing receivables, cutting onshore capex and sharing infrastructure assets. Improving Cost Profile: Higher production and economies of scale should drive lifting costs (LC) down to USD17/boe in 2026 and USD16/boe in 2027, from USD18/boe in 9M25. The Tartaruga Verde acquisition would contribute to Brava's efficiency, assuming LC close to USD15/boe, although efficiency gains would depend on the operator's strategy (Petrobras, BB/Stable). Fitch expects Papa Terra and Atlanta to keep improving on efficiency. Atlanta will be the most efficient asset, with EBITDA close to USD45/boe over 2026-2027, above the estimate of USD30/boe for the entire portfolio, offsetting Papa Terra and Parque das Conchas' lower efficiency. CFO to Cover Capex: Brava's cash flow from operations (CFO) should exceed capex from 2027 onward, as the former keeps expanding and the latter declines significantly. EBITDA is estimated at BRL5.7 billion in 2026 and BRL8.3 billion in 2027, and more than half should convert into CFO, considering significant tax efficiencies and tax credits. Capex should peak around BRL4.3 billion in 2026, driven by the drilling campaign in Papa Terra and Atlanta, then reducing to BRL2.7 billion in 2027. Capex on Tartaruga Verde is modest and slightly reduces Brava's total capex per boe produced. Fitch expects FCF to turn consistently positive as of 2027, assuming a 25% dividend payout. Resilience to Price Volatility: In a scenario of sharp price declines, Brava could further reduce capex, especially onshore where chartering is more flexible. Despite the impact on production and LC, CFO would be sufficient to cover the adjusted capex under Brent prices above USD35/boe in 2026-2028. Fitch estimates that Brent prices below USD50/boe could pressure net leverage to levels above 3.0x. Fitch's base case scenario considers Brent prices at USD63 for 2026 and 2027. Peer Analysis Brava has lower scale and is more leveraged than North American onshore, oil-weighted producers Matador Resources Company (Matador, BB/Stable) and SM Energy Company, L.P. (SM Energy, BB/Positive Watch). The same applies for Brazilian offshore producer PRIO S.A. (PRIO; BB+/Stable). These factors currently offset the broader diversification of Brava's asset base. Matador and SM produce around 200 kboe/d and PRIO is expected to reach this level in 2026, with the Peregrino and Wahoo oil fields. This is more than double the current scale of Brava. The latter benefits from a long 1P reserve life, estimated around 14 years over 2026-2027 on average, which is in line with PRIO and above the nine- to 11-year range for the other peers. For each boe produced, Fitch estimates Brava will generate around USD26 of CFO over 2026-2027, below PRIO and Matador (close to USD28/boe) and above SM Energy (USD23/boe). The company's American peers benefit from lower royalties, producing costs and interest costs compared to Brava, but they sell at significantly lower prices. This reflects the WTI discount over Brent and the higher share of gas in the revenues of these peers, as well as their trading efficiencies. For 2026 Fitch projects EBITDA net leverage of 2.0x for Brava, 1.4x for PRIO and around 1.3x for the American peers. Fitch's Key Rating-Case Assumptions -- Average Brent prices from 2026 to 2028 (USD/bbl): 63, 63 and 60; -- Average daily production from 2026 to 2028 (kboe/d): 94, 127 and 125; -- Oil sales consider a discount to Brent around USD5/bbl; -- 100% effective working interest in Papa Terra, with no payment arising from the arbitration; -- Lifting costs from 2026 to 2028 (USD/boe): 17, 16 and 14; -- Annual capex averaging BRL3.1 billion from 2026 to 2028; -- Significant price adjustment on Tartaruga Verde's acquisition value, reflecting Brava's interest on cash flows produced from the effective transaction date to the estimated date of closing; -- Effective tax rate around 22%; -- Dividend payout ratio of 25%. Corporate Rating Tool Inputs and Scores Fitch scored the issuer as follows, using its Corporate Rating Tool (CRT) to produce the Standalone Credit Profile (SCP): -- The business and financial profile factors are assessed (in the format of the 'assessment', followed by relative importance and trend) as follows: Management ('bb-', moderate), Sector Characteristics ('b', lower), Market and Competitive Positioning ('bb-', higher), Diversification and Asset Quality ('bb+', moderate), Company Operational Characteristics ('bb-', moderate), Profitability ('bb+', moderate), Financial Structure ('bbb', moderate), and Financial Flexibility ('bb', moderate). -- The quantitative financial subfactors are assessed based on custom financial period parameters of 20% weight for the forecast year 2025, 40% for the forecast year 2026 and 40% for the forecast year 2027. -- The Governance assessment of 'Good' results in no adjustment to the SCP. -- The Operating Environment assessment of 'bbb' results in no adjustment to the SCP. -- The SCP is 'bb-', after one-notch calibration adjustment to reflect execution risks related to the completion of the Tartaruga Verde acquisition, including final regulatory approvals, and to expectations for organic growth. RATING SENSITIVITIES Factors That Could, Individually or Collectively, Lead to Negative Rating Action/Downgrade -- The Outlook could be revised to Stable if the Tartaruga Verde acquisition is not completed or if Brava's organic growth underperforms Fitch's expectations; -- Debt/EBITDA and net debt/EBITDA ratios above 3.5x and 2.5x, respectively; -- Weakening of the liquidity profile; -- Major operational disruptions at key assets, resulting in a significant reduction in production. Factors That Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade -- Debt/EBITDA and net debt/EBITDA ratios below 3.0x and 2.0x, respectively; --Increasing production to levels consistently above 125 kboe/d while maintaining 1P reserve life of at least seven years. Liquidity and Debt Structure Brava has a strong liquidity position and has a track record of access to local banks/capital markets. Fitch expects Brava to fund the Tartaruga Verde acquisition with debt and to access long-term funding in 2026 to maintain its liability management strategy. The anticipation of FPSO receivables and liability management transactions carried over in 2025 resulted in a comfortable debt amortization schedule and reduced the company`s average cost of debt. As of September 2025, Brava had BRL5.7 billion in readily available cash balance, which was sufficient to cover all debt amortization through 2028, including M&A payables. The BRL14.8 billion debt was mainly composed of debentures (66%, including derivatives), secured notes due 2031 (18%) and M&A payables (11%). More than 90% of Brava's debt is denominated or indexed to USD, at an annual average spread of 8.1%. Issuer Profile Brava is an independent, well-diversified oil and gas producer focused on revitalizing mature fields both onshore and offshore in Brazil. It has no controlling shareholder. 3R Lux is a funding vehicle domiciled in Luxembourg and is wholly owned by Brava. RATING ACTIONS Entity / Debt Rating Prior ------------- ------ ----- 3R Lux S.a.r.l. senior secured LT BB- Affirmed BB- Brava Energia S.A. LT IDR BB- Affirmed BB- LC LT IDR BB- Affirmed BB- Natl LT AA-(bra) Affirmed AA-(bra) BTG PACTUAL: Fitch Rates USD750MM Unsec. Notes Due 2031 'BB+' ------------------------------------------------------------- Fitch Ratings has assigned a 'BB+' final long-term rating to Banco BTG Pactual S.A.'s USD750 million senior unsecured notes. The notes were issued through its Cayman Islands Branch and are due 2031. The final rating is in line with the expected rating that Fitch assigned to the proposed debt on Jan. 21, 2026. Key Rating Drivers The rating on the notes is at the same level of BTG Pactual's Long-Term Foreign Currency Issuer Default Rating (IDR, BB+/Stable) as the notes are senior obligations and the default equates to default of bank and the expected recoveries are average upon default. BTG Pactual's ratings are driven by its standalone creditworthiness, as measured by its 'bb+' Viability Rating (VR). Rating Sensitivities Factors that Could, Individually or Collectively, Lead to Negative Rating Action/Downgrade The notes' rating could be downgraded if BTG Pactual's VR and IDR are downgraded. Factors that Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade The notes' rating could be upgraded if BTG Pactual's VR and IDR are upgraded. =================== C O S T A R I C A =================== BAC SAN JOSE: Fitch Affirms 'BB+' LongTerm IDRs, Outlook Stable --------------------------------------------------------------- Fitch Ratings has affirmed Banco BAC San Jose, S.A. 's Long-Term Foreign and Local Currency Issuer Default Ratings (IDRs) at 'BB+' and its Shareholder Support Rating (SSR) at 'bb+'. Fitch also removed the Rating Watch Evolving (RWE), affirmed the Short-Term Foreign and Local Currency IDRs at 'B' and removed the Rating Watch Positive (RWP). Fitch took the same action recently on parent, BAC International Bank, Inc's (BIB) Long-Term IDR. This action reflects Fitch's view that BIB's planned acquisition of Multibank Inc. will have a neutral effect on BIB's credit profile. The Rating Outlook on BAC San Jose's Long-Term IDRs is Stable. These actions reflect the strong linkage of BAC San Jose's ratings to BIB's. They are driven by shareholder support. Fitch did not take rating action on BAC San Jose's Viability Rating (VR) because Fitch does not expect the transaction to affect the bank's intrinsic credit profile. Key Rating Drivers Shareholder Support Drives IDRs: BAC San Jose' IDRs are driven by the bank's SSR, which reflects Fitch's view of parent BIB's (BB+/Stable) high propensity and adequate ability to extend support, if needed. BAC San Jose's IDRs are equalized with that of its shareholder. Core Subsidiary; High Integration: Fitch's assessment of the parent's ability to provide support considers BAC San Jose's key and integral role in BIB's regional diversification strategy. The Costa Rican subsidiary provides core products in a strategically important jurisdiction. Reputational Influence: BIB's subsidiaries in Central America operate under the same brand. Therefore, Fitch's support assessment reflects its view that an unexpected default of BAC San Jose or any of BIB's rated subsidiaries would constitute reputational risk for the parent and could significantly affect its franchise. Rating Sensitivities Factors that Could, Individually or Collectively, Lead to Negative Rating Action/Downgrade -- Any material reduction in BIB's propensity to provide support may trigger a downgrade of BAC San Jose's IDRs and SSR. Additionally, a downgrade of BIB's IDRs could lead to a similar action on BAC San Jose's ratings. -- Negative changes in BAC San Jose's IDRs and SSR could result from a downgrade of more than one notch in Costa Rica's sovereign rating or country ceiling. Factors that Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade -- BAC San Jose's IDRs and SSR could be upgraded by one notch following a similar action on BIB's IDR due to country ceiling restrictions. RATING ACTIONS Entity / Debt Rating Prior ------------- ------ ----- Banco BAC San Jose, S.A. LT IDR BB+ Affirmed BB+ ST IDR B Affirmed B LC LT IDR BB+ Affirmed BB+ LC ST IDR B Affirmed B Shareholder Support bb+ Affirmed bb+ =================================== D O M I N I C A N R E P U B L I C =================================== DOMINICAN REPUBLIC: Economy Grows 2.1% in 2025, Says Central Bank ----------------------------------------------------------------- Dominican Today reports that the Central Bank of the Dominican Republic (BCRD) reported that the country's economy recorded accumulated growth of 2.1% in 2025, according to the Monthly Indicator of Economic Activity (IMAE). Economic performance was driven mainly by the agricultural and mining sectors, along with financial intermediation services and activities related to hotels, bars, and restaurants, which showed solid momentum throughout the year, according to Dominican Today. On a year-on-year basis, economic activity expanded by 2.3% in December, consolidating overall growth despite a challenging global environment marked by external shocks, the report notes. The BCRD emphasized that the Dominican economy maintained a path of sustained expansion, supported by resilient domestic sectors and timely policy measures, the report relates. To stimulate economic activity, the Central Bank reduced the Monetary Policy Rate (MPR) by a cumulative 50 basis points during the second half of 2025, bringing monetary conditions closer to a neutral stance in line with inflation expectations, the report says. In addition, the BCRD implemented an RD$81 billion liquidity program to support productive sectors, the report notes. As a result, financial conditions eased, reflected in a decline in the interbank rate from 12.6% in June 2025 to 7.1% in January 2026, as well as lower deposit and lending rates across the banking system, helping to strengthen domestic demand, the report adds. About Dominican Republic The Dominican Republic is a Caribbean nation that shares the island of Hispaniola with Haiti to the west. Capital city Santo Domingo has Spanish landmarks like the Gothic Catedral Primada de America dating back 5 centuries in its Zona Colonial district. Luis Rodolfo Abinader Corona is the current president of the nation. TCR-LA reported in April 2019 that Juan Del Rosario of the UASD Economic Faculty cited a current economic slowdown for the Dominican Republic and cautioned that if the trend continues, growth would reach only 4% by 2023. Mr. Del Rosario said that if that happens, "we'll face difficulties in meeting international commitments." An ongoing concern in the Dominican Republic is the inability of participants in the electricity sector to establish financial viability for the system. Standard & Poor's credit rating for Dominican Republic was raised to 'BB' in December 2022 with stable outlook. Moody's credit rating for Dominican Republic was last set at Ba3 in August 2023 with the outlook changed to positive. Fitch, in December 2023, affirmed the Dominican Republic's Long-Term Foreign-Currency Issuer Default Rating (IDR) at 'BB-' and revised the outlook to positive. ============= E C U A D O R ============= ECUADOR: Fitch Rates 2034 and 2039 USD Bonds 'B-' ------------------------------------------------- Fitch Ratings has assigned 'B-' ratings, with Recovery Ratings of RR3, to Ecuador's USD2.2 billion notes maturing on Jan. 29, 2034, and USD1.8 billion notes maturing on Jan. 29, 2039. The notes have respective coupon rates of 8.75% and 9.25%. Ecuador plans to use net proceeds from the sale of the notes for general government purposes, including the refinancing and repurchase of its external debt. Key Rating Drivers The bond ratings are one notch above Ecuador's Long-Term (LT) Foreign Currency (FC) Issuer Default Rating (IDR), reflecting Fitch's expectation of good recovery prospects in a default scenario as reflected in the 'RR3' Recovery Rating. On Nov. 11, 2025, Fitch assigned a Recovery Rating of 'RR3' to Ecuador's long-term debt ratings, reflecting the sovereign's low public debt burdens, measured as government debt to GDP or general government interest payments as a percentage of revenue relative to debt-carrying capacity. On Aug. 7, 2025, Fitch affirmed Ecuador's LT FC IDR at 'CCC+'. Fitch typically does not assign Rating Outlooks to sovereigns with a rating of 'CCC+' or below. ESG-Governance: Ecuador has an ESG Relevance Score (RS) of '5' for both Political Stability and Rights and for the Rule of Law, Institutional and Regulatory Quality and Control of Corruption. Theses scores reflect the high weight that the World Bank Governance Indicators (WBGI) have in Fitch's proprietary Sovereign Rating Model. Ecuador has a low WBGI ranking of 30.1, reflecting high political uncertainty undermined by periodic social protests and high insecurity, moderate voice and accountability, weak rule of law, and weak control of corruption. RATING SENSITIVITIES Factors that Could, Individually or Collectively, Lead to Negative Rating Action/Downgrade Downgrade of Ecuador's LTFC IDR The rating action commentary dated Aug. 7, 2025 highlighted the following IDR downside sensitivity: - Public Finances: Greater financing strains that could jeopardize repayment capacity, or signs of weaker willingness to service commercial debt. Factors that Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade - Upgrade of Ecuador's LT FC IDR by more than one notch. The rating action commentary dated Aug. 7, 2025 highlighted the following IDR upside sensitivities: - Structural: A reduction in political risk and uncertainty, consistent with improved governability, and continued implementation of economic and fiscal reforms; - Public Finances: Fiscal consolidation that supports a sustained reduction in government financing needs with an improvement in financing access and a stable/downward trajectory for the debt-to-GDP ratio. ============= J A M A I C A ============= PORTLAND JX: Incurs US$3.7M Net Loss for 9-Mo. Period Ended Nov. 30 ------------------------------------------------------------------- RJR News reports that Portland JX has reported a net loss of US$3.7 million for the nine-month period ending November 30, 2025. The loss came despite interest income of US$168,000, other income of US$10,000, and foreign exchange gains of US$69,000, according to RJR News. These were outweighed by net fair value losses of nearly three million US dollars and operating expenses of US$769, the report notes. The outturn represents a sharp deterioration, compared with the same period in 2024, when Portland JX recorded a net loss of US$746,000, the report relays. Last year's results reflected higher interest income, modest fair value and foreign exchange gains, and slightly lower operating expenses, resulting in a much smaller operating loss and lower bond costs, the report adds. =========== M E X I C O =========== HEXION INC: Moody's Affirms B3 CFR & Cuts 1st Lien Term Loan to B3 ------------------------------------------------------------------ Moody's Ratings affirmed Hexion Inc.'s (Hexion) B3 Corporate Family Rating and B3-PD Probability of Default Rating. Moody's also downgraded the rating on its backed senior secured first lien term loan to B3 from B2 and affirmed the Caa2 rating on its senior secured second lien term loan. The outlook remains stable. RATINGS RATIONALE The affirmation of Hexion's B3 CFR with a stable outlook reflects Moody's views that, although the December 2025 sale of its US Gulf Coast formalin business modestly reduced the company's scale and end-market diversity and resulted in a slight increase in leverage, these effects are counterbalanced by solid operating performance in the core wood adhesives business, anticipated improvement in credit metrics in 2026, and adequate liquidity with no near-term maturities. On balance, these factors continue to support a credit profile consistent with the current rating. The downgrade of Hexion's first lien term loan reflects the predominance of first lien debt in the capital structure following the partial paydown of second lien debt with proceeds from the asset sale. The company repaid $300 million of debt ($150 million of each of the first and second lien debt), paid a dividend of $425 million to shareholders and added $40 million of cash to the balance sheet. In December 2025, Hexion completed the divestiture of its US Gulf Coast formalin business to Ancala. This business accounted for approximately 10% of Hexion's revenue and over 25% of its Moody's-adjusted EBITDA by Moody's estimates. The earnings of this business were very predictable and stable, and demonstrated stronger credit quality than its other operations in Moody's views. While the divestiture reduced scale and diversity, it was part of Hexion's strategic transformation to focus on innovation, growth markets, and sustainable cellulosic materials. Pro forma leverage increased to above 7.0x from the high 6.0x range, reflecting the loss of EBITDA from the divested operations, partially offset by debt reduction. Despite ongoing headwinds from a weak housing market, Moody's expects Hexion to achieve mid-single-digit EBITDA growth in 2026, driven by continued, though moderating, efficiency gains and procurement savings. Free cash flow is projected to remain around breakeven for the year, and with modestly higher EBITDA, leverage is expected to decline back to the high 6.0x range by year-end 2026. Hexion's credit profile is supported by its leading position in wood adhesives in North America, and the modest diversification benefits from the Versatics Acids and Derivative business, which is included in the Chemical Intermediates segment. Hexion's wood adhesive businesses, accounting for the majority of its sales and earnings, benefits from the contractual pass through of raw material costs and limited competition, which should provide a more stable stream of sales, earnings and operational cash flow than many other comparably rated peers in the chemical industry. The company's adequate liquidity continues to support its credit profile. Hexion's credit profile is constrained by its high exposure to housing and limited number of large customers in the North American engineered wood products industry. The rating also reflects the company's high leverage and limited free cash flow generation following the weak housing activities in North America. The stable outlook reflects Moody's expectations that Hexion's performance will modestly improve and its credit metrics will strengthen and remain consistent with its rating in the next 12 to 18 months. LIQUIDITY ANALYSIS The company maintains adequate liquidity. The company has a cash balance of $87 million pro forma the transaction. The company has $109 million available under their $240 million revolving credit facility. Moody's do not expect Hexion will need to draw additional funds from the revolver on yearly basis with its break-even level free cash flows in 2025. STRUCTURAL CONSIDERATIONS The B3 rating on the first lien term loan reflect their priority in the capital structure and the first lien on the non-ABL collateral at facilities in the US and two-thirds of the stock of the foreign entities, and a second lien on the ABL collateral. The Caa2 rating on the second lien term loan reflects its subordination to a substantial amount of first lien debt as well the limited value of the collateral package. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS The ratings could be upgraded if Hexion's leverage falls below 6.0x and annualized free cash flow rises above $50 million on a sustained basis. The ratings could be downgraded if its free cash flow is persistently negative or liquidity availability is sustained below $60 million. ESG CONSIDERATIONS Environmental, social, and governance factors are important factors influencing Hexion's credit quality, but not a driver of the actions. Hexion's (CIS-4) score indicates that the rating is lower than it would have been if ESG risk exposures did not exist. The score mainly reflects its aggressive financial policy with tolerance for high financial leverage under private equity ownership and the exposure to environmental and social risks due to the use of fossil fuel derived raw materials and energy usage, and the toxic, hazardous or flammable nature of the products used and produced by the company. Hexion Inc., headquartered in Columbus, OH, is a chemical company with two main lines of business. Its main business is wood adhesive business where it is the largest producer in North America with similar operations in Brazil, Australia and New Zealand. The second business is Versatic Acids and Derivatives, which is used in a wide variety of applications, including construction materials and architectural and automobile coatings. Pro forma the sale of its US Gulf Coast formalin business, Hexion's annual revenue is about $1.6 billion. The principal methodology used in these ratings was Chemicals published in October 2023. 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 A N A M A =========== MULTIBANK INC: Fitch Puts Longterm IDR on Watch Positive -------------------------------------------------------- Fitch Ratings has revised the Rating Watch Evolving (RWE) to Rating Watch Positive (RWP) on Multibank, Inc.'s (Multibank) Long-Term Issuer Default Rating (IDR), Long-Term National Rating and long-term debt ratings while maintaining the ratings. Fitch has also revised the Rating Watch Negative on the Shareholder Support Rating (SSR) to RWP. This follows Fitch's affirmation of BAC International Bank's (BIB) IDR and removal of its Rating Watch. At the same time, Fitch affirmed and removed the Rating Watch on Multibank's Short-Term IDR, Short-Term National Rating, and Senior Unsecured Debt Short-Term National Rating. The rating actions follow the Oct. 28, 2025, announcement that BAC International Corporation (BIC), the holding company of BIB, will acquire a majority stake in Multi Financial Group Inc. (MFG) and its subsidiaries, including Multibank, from Banco de Bogotá (BB/Stable). Key Rating Drivers Fitch affirmed BIB's IDR and removed it from Rating Watch on Jan. 16, 2026, to reflect Fitch's view regarding the potential neutral effect on BIB's credit profile, given the share purchase agreement between its holding company BIC and MFG. Multibank is relatively small in terms of BIB's consolidated balance sheet. Fitch's preliminarily view is that there appears to be a good strategic and competitive rationale for pursuing the transaction. Following the rating action on BIB, Fitch has revised Multibank's Long-Term IDR, Long-Term National Rating, long-term debt ratings from RWE to RWP, indicating upside potential tied to the expected business benefits if the transaction and planned merger are completed successfully. Currently, Banco de Bogotá is Multibank's support provider, as indicated by its existing support rating of 'bb'. However, Fitch's decision to revise Multibank's SSR from RWN to RWP reflects Fitch's expectation of Multibank's ratings being aligned with BIB's once the transaction closes and BIB becomes the new source of support. BIB is rated at 'BB+' with Stable Outlook, one notch above Banco de Bogotá. At the same time, Fitch affirmed and removed the Rating Watch on Multibank's Short-Term IDR, Short-Term National Rating, and Senior Unsecured Debt Short-Term National Rating, as all of these are aligned with the achievable short-term rating under Fitch's Criteria, both at the current level and under the upside scenario for the long-term rating. Fitch will not take any action on Multibank's Viability Rating (VR) and will wait until the transaction is completed. Rating Sensitivities Factors that Could, Individually or Collectively, Lead to Negative Rating Action/Downgrade --Multibank's IDR and SSR could be downgraded, mirroring a downgrade of BIB's LT IDR, once BIB becomes a shareholder, or due to a reduced propensity of current parent, Banco de Bogota, to support Multibank before the transaction is completed. --The Rating Watch on Multibank could be removed if the transaction does not occur. In that case, the ratings would be affirmed at their current level, reflecting a Stable Outlook from current parent, Banco de Bogota. Factors that Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade -- Multibank's IDR, SSR and National Long- Term Rating could be upgraded and its RWP removed after the completion of the transaction. At that time, the ratings and Outlook would mirror those of BIB. -- Multibank's Short-Term National Ratings have no upside potential because they are at the highest level of the rating scale. OTHER DEBT AND ISSUER RATINGS: KEY RATING DRIVERS Senior Unsecured Debt: The ratings of Multibank's outstanding long-term global-scale and national-scale senior unsecured obligations are equal to the issuer's ratings because the obligations' likelihood of default is the same as Multibank's. Subordinated Debt: The ratings of Multibank's outstanding long-term national scale subordinated obligations are two notches below the anchor ratings, the Long-Term National Scale Rating, reflecting loss severity given the instrument characteristics (no coupon flexibility). OTHER DEBT AND ISSUER RATINGS: RATING SENSITIVITIES Factors that Could, Individually or Collectively, Lead to Negative Rating Action/Downgrade: -- Multibank's senior unsecured and subordinated debt would reflect any downgrade of the bank's ratings. Factors that Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade: -- Multibank's senior unsecured and subordinated debt would reflect any upgrade of the bank's ratings. Public Ratings with Credit Linkage to other ratings Multibank's ratings reflect the support from Banco de Bogota. RATING ACTIONS Entity/Debt Rating Prior ----------- ------ ----- Multibank, Inc. LT IDR BB Rating Watch BB Revision ST IDR B Affirmed B Natl LT AA(pan) Rating Watch AA(pan) Revision Natl ST F1+(pan) Affirmed F1+(pan) Shareholder Support bb Rating Watch bb Revision senior unsecured LT BB Rating Watch BB Revision senior unsecured Natl LT AA(pan) Rating Watch AA(pan) Revision subordinated Natl LT A+(pan) Rating Watch A+(pan) Revision senior unsecured Natl ST F1+(pan) Affirmed F1+(pan) ===================== P U E R T O R I C O ===================== FIRSTBANK PUERTO RICO: S&P Alters Outlook on BB+ ICR to Positive ---------------------------------------------------------------- S&P Global Ratings revised the outlook on the long-term issuer credit rating on FirstBank Puerto Rico (FirstBank) to positive from stable. S&P also affirmed the 'BB+' long-term issuer credit rating and subsequently withdrew it based on lack of market interest. At the time of the withdrawal, the positive outlook indicated that S&P could raise the rating if capital ratios remain strong, and earnings, asset quality, funding, and liquidity metrics do not deteriorate meaningfully. FirstBank's financial performance has improved in recent years, aided by the improvement in certain asset quality metrics toward those of higher rated U.S. mainland regional banks. FirstBank has also maintained a solid market position in Puerto Rico, very high risk-weighted capital ratios, relatively stable customer deposits, and better-than-median funding metrics, while reporting consistent and solid earnings. The outlook revision primarily reflects FirstBank's improved financial performance, conservative risk appetite, and reduced local economic concerns in recent years. Asset quality has strengthened in recent years toward levels of those of higher rated U.S. banks. For example, nonaccrual loans to total loans declined to 0.70% as of Dec. 31, 2025, from 1.73% as of Dec. 31, 2020. Meanwhile, the net charge-off (NCO) ratio fell to 0.63% in fourth-quarter 2025, from 0.78% in fourth-quarter 2024. Furthermore, the ratio of allowance for credit losses on loans to amortized cost was a robust 1.90% as of Dec. 31, 2025. S&P said, "We think federal spending in Puerto Rico related to hurricane relief and infrastructure repair has helped bolster the local economy, improve employment rates, and strengthen local real estate markets and business activity. We expect disbursement of federal relief funds to Puerto Rico over the next several years to continue to benefit its economy." S&P said, "Capital ratios remain very high compared with those of the rated U.S. banks, and they have not declined as we had expected. On a consolidated basis, the risk-adjusted capital (RAC) ratio for First Bancorp (FirstBank's parent holding company) was 17.1% as of June 30, 2025, well above the 10%-15% range we typically view as strong. We think stability in risk-based capital ratios over the past several years suggests management's conservative risk appetite. Meanwhile, its estimated Tier 1 ratio was 16.76% as of Dec. 31, 2025--up from 16.10% at the end of 2023 and well above most rated U.S. banks. We believe FirstBank's RAC ratio and other risk-based capital ratios could decline gradually over the next few years, but we expect its tangible capital ratio (10.08% as of Dec. 31, 2025) to continue its upward trajectory, as unrealized losses on investment securities likely continue to decline. Accumulated other comprehensive losses (AOCL) were about $355 million at the end of 2025, down from $567 million at the end of 2024. "Certain funding and liquidity metrics are somewhat better than the medians of rated U.S. banks. FirstBank has a diversified deposit base, including retail and commercial customers, and its wholesale borrowings have declined substantially in the past decade, both of which we view favorably. The ratio of loans to nonbrokered deposits was approximately 79% on Sept. 30, 2025, by our calculation--up from the end of 2024, but below that of many regional bank peers. Similarly, its stable funding ratio was 129% on Sept. 30, 2025, by our calculation— somewhat better than the median of rated U.S. banks. However, FirstBank has an above-median proportion of uninsured deposits (about 52%) largely due to some concentration in Puerto Rico's public-sector deposits. Excluding collateralized deposits, the proportion of uninsured deposits is much lower and includes substantial retail deposits, which we think have low average account balances and are very stable. "Earnings have been robust for the past several years, and we expect them to remain solid. We think earnings have benefitted from net interest margin (NIM) expansion, which improved to 4.58% in 2025 from 4.25% for in 2024, aided by lower deposit costs. We believe NIM will remain elevated and could trend somewhat higher in 2026, given recent trends. In addition, we expect solid loan growth, consistent with FirstBank's 4%-6% growth in recent years. "We view FirstBank's local market position as solid. With total assets of $19.1 billion as of Dec. 31, 2025, FirstBank remains the second-largest bank in Puerto Rico. However, the bank has a modest domestic market share, and its revenue diversity is limited, given its low proportion of noninterest income to revenue (approximately 13% in 2025). Nonetheless, we view competition as less intense in its local market, given substantial consolidation in Puerto Rico's banking sector in the past two decades. "The positive outlook reflects the possibility that we could raise our ratings on FirstBank next year if the bank's asset quality metrics, such as nonperforming assets and NCOs, remain generally comparable with those of higher-rated mainland U.S. bank peers. This outlook also reflects our expectation that FirstBank will maintain strong capital ratios, good earnings, and solid funding and liquidity metrics. "We could revise the outlook to stable if asset quality deteriorates substantially, perhaps due to an economic downturn, resulting in much higher provisioning and lower profitability. We could also revise the outlook to stable if funding ratios worsen meaningfully, which we do not expect. "We could raise the rating within the next twelve months if asset quality metrics remain near current levels, risk-based capital ratios remain strong, and funding and liquidity metrics remain solid, while profitability remains consistent." ================= V E N E Z U E L A ================= VENEZUELA: U.S. Pushes for Quickest Fixes to Boost Oil Output ------------------------------------------------------------- globalinsolvency.com, citing Bloomberg News, reports that the U.S. is in talks with Chevron Corp., other crude producers and the world's biggest oilfield service providers about a plan to quickly revive output in Venezuela at a fraction of the estimated $100 billion cost for a complete rebuilding. Oilfield contractors such as SLB Ltd., Baker Hughes Co. and Halliburton Co. would focus their initial efforts on repairing or replacing damaged or outdated equipment and refreshing older drilling sites, according to senior administration officials who asked not to be identified discussing internal plans, according to globalinsolvency.com. 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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