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T R O U B L E D C O M P A N Y R E P O R T E R
L A T I N A M E R I C A
Thursday, February 5, 2026, Vol. 27, No. 26
Headlines
A R G E N T I N A
ARGENTINA: Beef Prices, New Methodology Cloud Inflation Outlook
ARGENTINA: Investors Flock to Peso, Attracted by 38% Returns
B O L I V I A
BCP BOLIVIA: Fitch Affirms 'B-' LongTerm IDRs, Outlook Stable
B R A Z I L
AZUL SA: Fitch Withdraws 'D' Issuer Default Ratings
FORESEA HOLDING: Moody's Affirms B2 CFR & Rates New $150MM Notes B2
FORESEA HOLDING: S&P Affirms 'B' ICR & Alters Outlook to Stable
OI SA: S&P Lowers ICR to 'D' Following Missed Interest Payment
C A Y M A N I S L A N D S
VITALITY RE XVII: Fitch Rates Series 2026 Class C Notes 'BB-sf'
E L S A L V A D O R
FIFTEENTH MORTGAGE: Fitch Affirms Bsf Rating on 2 Classes
J A M A I C A
JAMAICA: DBJ Partners with Firms to Speed up Recovery Financing
NEW FORTRESS: BlackRock Holds 9.8% Equity Stake as of Dec. 31
M E X I C O
CHAMBERLAIN GROUP: Fitch Affirms 'B-' LongTerm IDR, Outlook Stable
DEL MONTE: Pushes for Creditor Settlement, Chapter 11 Asset Sales
N I C A R A G U A
NICARAGUA: Weathered Well Multiple Shocks Since 2018, IMF Says
P A N A M A
ENA NORTE: Fitch Affirms BB on USD Notes & Alters Outlook to Stable
S U R I N A M E
SURINAME: Growth is Slowing, Driven by a Decline in Gold, IMF Says
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A R G E N T I N A
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ARGENTINA: Beef Prices, New Methodology Cloud Inflation Outlook
---------------------------------------------------------------
Manuela Tobias at Bloomberg News reports that Argentina's push to
further curb inflation faces risks in coming months after President
Javier Milei hammered it down from triple-digit territory, the
Central Bank said in its monthly monetary policy report.
A change in methodology, persistently high beef prices and upcoming
increases in utility bills could all impact consumer prices in the
near term, according to the report, according to Bloomberg News.
Costs for clothing and education also tend to jump significantly in
March for the start of school in the Southern Hemisphere, Bloomberg
News relays. Beef, a staple of the Argentine diet, rose 17.3
percent from October to December, Bloomberg News notes.
"During the first quarter of 2026, the pace of the disinflation
process faces risks of a seasonal nature and therefore transitory,"
the Central Bank said in its December report, published, Bloomberg
News says. It added that officials also face "uncertainty" under
new methodology introduced by the national statistics agency,
Bloomberg News relays.
The new outlook comes after monthly inflation – which Milei has
vowed to bring below one percent later this year – accelerated
for a fourth consecutive time in December to 2.8 percent, led by
transportation, utilities and food prices, Bloomberg News notes.
Sticky inflation also risks bleeding through to the currency, which
floats freely within an upper and lower bound determined, as of
January, by monthly inflation, Bloomberg News says. Higher price
gains translate to bands widening at a faster pace, Bloomberg News
notes.
The government authorised a partial increase on petrol and diesel
taxes, as well as natural gas and electricity price hikes,
effective February 1, Bloomberg News relays. Services, like
utilities and rent, weigh more heavily in the new inflation
methodology, which goes into effect this month, Bloomberg News
says.
The Central Bank also says Argentina will have to make deeper
budget cuts in 2026 than those outlined in the newly passed budget
because the government was unable to veto university and disability
funding increases passed by Congress last year, Bloomberg
Newsnotes. The government will have to cut more spending,
equivalent to about 0.5 percent of gross domestic product, in areas
like salaries, subsidies and social welfare, according to the
monetary authority, Bloomberg News says.
Bloomberg News discloses that revenue for social welfare,
meanwhile, is set to drop if Milei passes the labor reform set to
wind its way through Congress next month, according to the report.
The reform could have a fiscal cost of between 0.7 percent and 0.8
percent of GDP, according to a separate research note published by
JPMorgan Chase & Co, Bloomberg News relays. The fall in revenue
corresponds to less social security contributions and some tax
cuts, Bloomberg News notes. That’s expected to be reversed in
the medium term, as formal employment – and therefore the tax
base – grows, Bloomberg News says.
Annual inflation is still expected to drop to 20 percent this year
from about 32 percent currently, according to economists surveyed
by the Central Bank, Bloomberg News adds.
About Argentina
Argentina is a country located mostly in the southern half of
South America. Its capital is Buenos Aires. Javier Milei is the
current president of Argentina after winning the November 19,
2023 general election. He succeeded Alberto Angel Fernandez
in the position.
Argentina has the third largest economy in Latin America. The
country's economy is an upper middle-income economy for fiscal
year 2019, according to the World Bank. Historically, however,
its economic performance has been very uneven, with high economic
growth alternating with severe recessions, income maldistribution
and in the recent decades, increasing poverty.
In March 2022, the International Monetary Fund (IMF) approved a
30-month arrangement under an Extended Fund Facility for Argentina
in the amount of SDR 31.914 billion (equivalent to US$44 billion,
or 1000 percent of quota) -- with an approved immediate
disbursement of an equivalent of US$9.65 billion. Argentina's
IMF-supported program sought to improve public finances and start
to reduce persistent high inflation through a multi-pronged
strategy.
On April 11, 2025, the IMF further approved a 48-month Extended
Fund Facility (EFF) arrangement for Argentina totaling US$20
billion (or 479 percent of quota), with an immediate disbursement
of US$12 billion, and a first review planned for June
2025 with an associated disbursement of about US$2 billion. The
program is expected to help catalyze additional official
multilateral and bilateral support, and a timely re-access to
international capital markets.
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.
ARGENTINA: Investors Flock to Peso, Attracted by 38% Returns
------------------------------------------------------------
Ignacio Olivera Doll at Bloomberg News reports that having lost
more of its value than any other major currency in the world this
century, Argentina's peso has long been seen as far too unstable to
lure carry-trade investors. But in a sign of just how much
President Javier Milei has regained the market's confidence in the
wake of his party's midterm-election victory, evidence is mounting
that those investors are starting to pile into the peso, according
to Bloomberg News.
Bloomberg News says that after a stomach-churning stretch last
year, Argentina's currency has moved in a narrower range since the
end of November, tempting foreign-exchange investors looking to
harvest the peso’s rich yields. One sign that the carry trade
– where investors borrow in dollars to buy the local currency –
is in play can be seen in money market fund balances held in pesos,
which have grown by seven percent so far in January, according to
local consulting firm 1816 Economia & Estrategia, Bloomberg News
discloses.
Bloomberg News says that while Argentina remains a high-risk play
by any definition, obstacles that would have made the strategy
unthinkable a few months ago no longer loom as large. These
include a political picture that's become more settled since
Milei's comeback victory in October gave the avowed libertarian a
strong mandate to keep pursuing free-market policies that won a
financial lifeline from US President Donald Trump, Bloomberg News
relays.
Meanwhile, inflation expectations are subsiding, while strong
inflows into the peso – from investors, farm export flows and
companies repatriating proceeds from a recent dollar bond sale –
have kept the Argentine currency aloft even as the Central Bank
boosted reserves by a net US$1 billion in January, Bloomberg News
notes. The Central Bank's cash pile now stands at its highest
level in more than four years, helping push down the country's
sovereign risk ahead of a closely-watched bond sale, Bloomberg News
says.
"This has happened only a few times over the past 10 years: a
stretch of FX calm ahead – potentially four months – combined
with historically very high real interest rates. It's an ideal mix
for putting on the carry trade" said Belisario Alvarez de Toledo, a
partner at Buenos Aires-based trading house True Grit Capital,
which advises and executes orders for hedge funds, Bloomberg News
relays.
Bloomberg News says that the market's reaction to the rare period
of macroeconomic calm can be seen in Argentina's risk premium,
which has fallen to the lowest level in seven years. At the same
time, peso interest rates have climbed to 38 percent, their highest
in three months, Bloomberg News notes. Many investors are looking
to hold pesos into the mid-year soybean harvest, which typically
floods the market with greenbacks, Bloomberg News says.
Also helping is a weakening US dollar, which has provided a boost
across emerging market currencies as it slipped to near its lowest
level in about four years, Bloomberg News relays.
"There's a combination of local factors that's contributing to a
perception of greater FX stability," said Diego Chameides, chief
economist at Banco de Galicia, Argentina's largest private bank,
Bloomberg News notes. While carry strategies are inherently risky,
"in a context of global USD weakness, appetite for these kinds of
trades tends to increase," Bloomberg News relays.
Of course, few are convinced that the periodic upheavals that have
upended Argentina for years are at an end. Capital controls remain
firmly in place for the country's corporations, while many expect
tighter monetary policy to eventually hurt growth, Bloomberg News
discloses. With investors ready to cut and run at the first sign
of fresh trouble, the carry trade is vulnerable to swift reversals
that could eat up the profits of those who linger too long,
Bloomberg News notes.
Bloomberg News relates that still, signs of steady reserve
accumulation could allay doubts about the ability of Argentina –
a serial defaulter – to pay its debts. Indications of growing
stability could eventually help the country find its way back into
international markets, according to Adrian Yarde Buller, a
strategist at local broker Facimex, Bloomberg News relates.
“We’re seeing favourable conditions to put on carry
strategies,” he said, Bloomberg News relates. “International
financial conditions remain very supportive for the EM universe,
with signs of appetite for high-risk EM debt that improve
Argentina’s prospects of regaining market access soon,”
Bloomberg News adds.
About Argentina
Argentina is a country located mostly in the southern half of
South America. Its capital is Buenos Aires. Javier Milei is the
current president of Argentina after winning the November 19,
2023 general election. He succeeded Alberto Angel Fernandez
in the position.
Argentina has the third largest economy in Latin America. The
country's economy is an upper middle-income economy for fiscal
year 2019, according to the World Bank. Historically, however,
its economic performance has been very uneven, with high economic
growth alternating with severe recessions, income maldistribution
and in the recent decades, increasing poverty.
In March 2022, the International Monetary Fund (IMF) approved a
30-month arrangement under an Extended Fund Facility for Argentina
in the amount of SDR 31.914 billion (equivalent to US$44 billion,
or 1000 percent of quota) -- with an approved immediate
disbursement of an equivalent of US$9.65 billion. Argentina's
IMF-supported program sought to improve public finances and start
to reduce persistent high inflation through a multi-pronged
strategy.
On April 11, 2025, the IMF further approved a 48-month Extended
Fund Facility (EFF) arrangement for Argentina totaling US$20
billion (or 479 percent of quota), with an immediate disbursement
of US$12 billion, and a first review planned for June
2025 with an associated disbursement of about US$2 billion. The
program is expected to help catalyze additional official
multilateral and bilateral support, and a timely re-access to
international capital markets.
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.
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B O L I V I A
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BCP BOLIVIA: Fitch Affirms 'B-' LongTerm IDRs, Outlook Stable
-------------------------------------------------------------
Fitch Ratings has affirmed Banco de Credito de Bolivia S.A.'s (BCP
Bolivia) Long-Term (LT) Foreign and Local Currency Issuer Default
Ratings (IDRs) at 'B-'. The Rating Outlook on the LT IDRs was
revised to Stable from Negative due to the improved Operating
Environment in Bolivia as reflected in the recent upgrade of the
sovereign rating. Fitch has also affirmed BCP Bolivia's Short-Term
Foreign and Local Currency IDRs and Shareholder Support Rating
(SSR) at 'B' and 'b-', respectively, and its Viability Rating (VR)
at 'ccc'.
Fitch has also revised its assessment of Bolivia's banking system
operating environment (OE) score to 'ccc' from 'ccc-' and revised
the outlook to Stable from Negative, reflecting the recent upgrade
of Bolivia's Long-Term Foreign Currency IDR to 'CCC' from 'CCC-'.
Key Rating Drivers
IDRs Supported by Parent: BCP Bolivia's IDRs and SSR reflect the
expected support the bank would receive from its parent, Credicorp
Ltd. (BBB/Stable), if required. Fitch views BCP Bolivia as a
strategically important subsidiary for Credicorp because it is an
integral part of the group and contributes to the parent's
geographical diversification.
However, BCP Bolivia's Foreign Currency IDR is capped by Bolivia's
Country Ceiling of 'B-', which Fitch affirmed on Jan. 16, 2025. The
Country Ceiling captures transfer and convertibility risks and
constrains Fitch's assessment of the ability of the shareholder to
support its subsidiary. The Local Currency LT IDR has a two-notch
uplift from the sovereign rating, which is the number of notches
Fitch normally limits an IDR when is driven by shareholder support,
according to Fitch's bank rating criteria. Fitch believes that the
owner's commitment to its subsidiary is likely to survive a
sovereign default and government restrictions are unlikely to be
imposed, which would prevent the bank from servicing its
obligations.
VR Aligns with Sovereign Rating: Fitch has also affirmed BCP
Bolivia's Viability Rating (VR) at 'ccc', which is in line with the
sovereign rating. Fitch's believes Bolivia has a good credit
profile in the context of the Bolivian banking system. This is
reflected in the sound asset quality compared with its local peers,
as well as the bank's liquidity profile. Liquidity is stronger than
might be expected from a reasonably well-performing bank exposed to
the OE, considering that it has normally paid its foreign currency
obligations despite the dollar scarcity in Bolivia.
Nevertheless, the bank's VR is capped by Bolivia's challenging OE
of 'ccc' level, which reflects the still deteriorated OE within a
highly regulated and interventionalist framework. Per Fitch's
criteria, this 'ccc' OE imposes a strong restriction on a potential
upgrade of BCP Bolivia's VR given the usually high correlation
between sovereign and bank credit profiles.
Good Franchise: Fitch's assessment of BCP Bolivia's business
profile score is 'b-' based on the bank's four-year average total
operating income of $130 million, commensurate with the implied 'b
or below' score. Fitch's assessment of BCP Bolivia's business
profile balances the bank's well-established local franchise and
the benefits of being 100% owned by Credicorp Ltd., the largest
financial group in Peru, as well as a business model concentrated
in a higher-risk market.
BCP Bolivia is the fifth-largest bank in its market in terms of
total loans and deposits, with market shares of approximately 8%.
BCP Bolivia reaps significant benefits from its shareholder's
reputation, synergies, technological developments and strategies.
Historically, the bank's branch expansion in the country has not
been aggressive, but the bank has a presence in nearly all of the
country's Departments (States).
Asset Quality Stabilized: Fitch affirmed BCP Bolivia's asset
quality score at 'ccc', commensurate with the implied 'b or below'
score. The impaired loan ratio was 2.7% as of 2Q25, similar to
ratios of the past three years. Fitch expects the asset-quality
metric to continue to perform in line with the implied score, and
for the bank to maintain its loss absorption capacity, supporting
the revision of the outlook to stable for the asset quality score.
The impaired loan ratio level in recent years is driven by the
worsened macroeconomic conditions and modest growth in the loan
portfolio of 3.8%. The loan loss allowance/impaired loan ratio
improved to nearly 105% at June 30, 2025.
Adequate Profitability: Fitch affirmed BCP Bolivia's earnings and
profitability score was at 'b-', commensurate with the implied
score of 'b or below'. Despite a pressured OE, the bank's operating
profit-to-risk-weighted assets (RWA) ratio slightly increased to
1.2% at 2Q25 and YE24 from an average of 0.6% during 2022-2023. Net
interest margins (NIMs) increased on the back of moderate loan
growth and higher average yields despite other profitability
pressures due to interest rate ceilings on loans placed in
productive sectors and loan impairments.
Capitalization Levels Limited but Improving: Fitch affirmed BCP's
Bolivia's bank capitalization score at 'ccc+', in line with the
implied score of 'b or below'. Capitalization ratios improved in
2Q25, mainly due to higher retained earnings. The bank's Fitch Core
Capital ratio improved to 10.6% at 2Q25 up from 10.3% at YE24 and
9.8% at YE23.
BCP Bolivia's core capitalization is higher than that of local
peers and the Bolivian banking system. The regulatory capital ratio
of 13.0% is above the FCC ratio due to subordinated bond issuances.
However, these tier 2 bonds are not considered loss-absorbing
capital under Fitch's criteria. Fitch believes that the current
capital metrics and loss-absorption capacity will be tested under a
more pressured OE that could negatively affect asset quality and
profitability.
Funding Concentration, Uncertain FX Liquidity Access: Fitch
affirmed its assessment of the bank's funding and liquidity profile
at 'ccc'. The assessment aligns with the implied score of 'b or
below' and reflects good liquidity cushions. However, it is
constrained by the poor foreign-currency availability in the local
market and depositor concentrations. Although funding concentration
is a systemic issue, Fitch believes the bank's funding
concentration is one of its weaknesses.
However, this is partially offset by the bank's solid liquidity,
reflected in its loan to deposit ratio of 96.4%. Customer deposits,
mostly in the form of stable time deposits, account for nearly 90%
of the bank's non-equity funding. The government maintains stable
time deposits in the BCP Bolivia and other Bolivian banks to
support long-term lending. In addition, liquidity risks may arise
from reduced cash flows from the ongoing liquidity restriction on
foreign and local currency.
Rating Sensitivities
Factors that Could, Individually or Collectively, Lead to Negative
Rating Action/Downgrade
-- The IDRs and SSR would be downgraded if Fitch perceives a
material weakening of the parent's ability or willingness to
support the bank;
-- The IDRs are sensitive to changes in the country ceiling, as
banks' Foreign Currency IDRs are almost always capped at the
Country Ceiling;
-- The VR is sensitive to changes in the sovereign rating or
further deterioration in the local operating environment;
-- BCP Bolivia's VR could be negatively affected if the bank's
operating profit-to-RWAs ratio are consistently negative or its FCC
ratio falls below 7%;
-- A significant deterioration of the bank's access to funding or
sustained pressure on its liquidity profile would also be negative
for its creditworthiness.
Factors that Could, Individually or Collectively, Lead to Positive
Rating Action/Upgrade
-- Rating actions on the bank's IDRs and SSR are sensitive to
actions on the sovereign rating and Country Ceiling;
-- BCP Bolivia's VR upside potential is limited given the
sovereign's current rating and limitations of the OE. Over the
medium term, the ratings could be upgraded due to an improvement in
OE and if the bank sustains a stable business and financial
profile.
VR ADJUSTMENTS
-- The Operating Environment score of 'ccc' has been assigned below
the implied score of 'b' due to the following adjustment reasons:
Macroeconomic Stability (negative) and Sovereign Rating
(negative).
-- The VR of 'ccc' has been assigned below the 'ccc+' implied VR
due to the following adjustment reason: Operating
Environment/Sovereign Rating Constraint (Negative).
RATING ACTIONS
Entity/Debt Rating Prior
----------- ------ -----
Banco de Credito
de Bolivia S.A.
LT IDR B- Affirmed B-
ST IDR B Affirmed B
LC LT IDR B- Affirmed B-
LC ST IDR B Affirmed B
Viability ccc Affirmed ccc
Shareholder
Support b- Affirmed b-
===========
B R A Z I L
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AZUL SA: Fitch Withdraws 'D' Issuer Default Ratings
---------------------------------------------------
Fitch Ratings has assigned a 'B-(EXP)' to Azul Secured Finance
LLP's proposed senior secured USD1.2 billion Exit Finance Notes and
a Recovery Rating of RR4. At same time, Fitch has withdrawn Azul
S.A.'s (Azul) FC and LC IDRs at 'D' and its National Scale Rating
at 'D(bra)' and assigned expected Long-Term Local and Foreign
Currency Issuer Default Ratings (IDRs) of 'B-(EXP)' to Azul, with a
Stable Outlook. The notes will be secured by a first lien on Azul's
Brand & IP and receivables and investments in selected
subsidiaries. Proceeds from the Exit Notes, along with other
initiatives, will be used refinance the USD1.57 billion DIP and pay
restructuring expenses, and for general corporate purposes.
The assignment of final ratings is contingent on the receipt of
final documentation conforming to the information received. Once
the transaction is concluded, including Azul's emergence from
Chapter 11, Fitch will convert the expected ratings to final
ratings. The expected ratings will be reviewed for material changes
prior to Fitch assigning final ratings. Material changes may
include changes in the company's capital structure at emergence,
any material deviations from current assumptions, as well as
Fitch's issuance of updated criteria or criteria exposure draft.
The expected 'B-' rating reflects the material improvement in
Azul`s credit metrics, following an approximately 42% haircut on
debt and reductions in fleet and lease costs. The rating remains
constrained by the industry's high volatility and Azul's limited
financial flexibility, including a lack of unencumbered assets,
still-limited liquidity, and the company's post-restructuring
debt.
Fitch has withdrawn Azul's 'D' ratings while the company remains in
the Chapter 11 debt restructuring process.
Key Rating Drivers
Exit from Chapter 11: Azul is expected to emerge from Chapter 11 in
February 2026, following completion of the current issuance. The
notes will be secured by a first lien on Azul Brand & IP, and
receivables associated with Azul Fidelidade, Azul Viagens and Azul
Cargo.
Proceeds of the Exit Notes, together with an Equity Rights Offering
(ERO) of USD650 million, USD100 million of additional investment
from certain bondholders and USD100 million from United Airlines,
Inc. (BB+/Stable Outlook), will support the DIP payment. An
additional USD100 million from American Airlines, Inc. (B+/Stable
Outlook) is still pending regulatory approval. The transaction will
close into escrow with release of funds subject to Azul's Chapter
11 emergence.
Significant Deleveraging: Fitch expects Azul's EBITDA total and net
leverage to decline to around 3.0x and 2.8x, respectively in 2026
and to trend to 2.8x and 2.5x by 2028. This represents a
significant deleveraging from 6.2x and 6.0x and 6.0x and 5.8x at
the end of 2024 and 2025, respectively, and reflects a debt
reduction of about 42% by end-2026 versus 2025, leading to lower
interest expense. Fitch forecasts Azul's debt at around BRL23
billion at end-2026, with leasing obligations accounting for
roughly 60%.
Lower Fleet Burden. Azul has been working toward greater cost
efficiency and fleet optimization. As part of the renegotiations,
Azul has rightsized its fleet through discussions with lessors and
the return of selected aircraft, materially reducing rent payments.
The company is also streamlining its network by focusing on core
hubs and high-demand leisure destinations, while exiting
loss-making routes. Azul is maintaining a balanced fleet mix by
slowing deliveries and retaining cost-efficient E1 aircraft. Under
the agreed plan, Azul expects lease payments to decline by about
33% to USD557 million from USD827 million in the pre-filing
budget.
Improving Cost Structure: Fitch expects Azul's operating cash flow
to improve during 2026 due to solid domestic traffic levels,
relatively lower fuel prices and cost efficiencies. Fitch forecasts
Azul's adjusted EBITDAR to reach around BRL7.6 billion in 2026 and
BRL7.8 billion in 2027, an increase from BRL5.2 billion in 2024 and
BRL6 billion estimated for 2025. The more efficient cost base is
driving to higher EBITDAR margins, with Fitch's base case reaching
33.3% during 2026, ranging around 34% in 2027-2028.
Moderate Growth to Drive FCF: Azul's fleet modernization and growth
strategy will be key drivers of free cash flow. Assuming relatively
favorable fuel and FX conditions, capex volumes will be the main
determinant of FCF generation. In 2026, as the company executes its
exit plan, working capital is also likely to absorb cash flow,
alongside higher capex. Fitch estimates capex around BRL2.1 billion
in 2026 and BRL2.5 billion in 2027, an increase from an average of
BRL1.5 billion in 2024 and 2025. Fitch forecasts FCF generation to
remain negative in 2026 (BRL865 million) and to turn marginally
positive in 2027 (BRL30 million).
Limited Financial Flexibility: Azul's weak unencumbered asset base
and high share of secured debt remains a financial flexibility
constraint. Fitch forecasts readily available liquidity of about
BRL1.6 billion at end-2026 (around 6% of LTM revenue), which
remains limited and provides little rating headroom. Fitch views
lower short- to medium- term refinancing risks — supported by the
post-emergence debt profile and reduced rental payments — as a
partial offset to this weak liquidity position.
Strong Local Market Position: Fitch views Azul's business position
as sustainable in the medium term, based on its solid market
position in Brazil, with an average market of share of 30% over the
past five years. The company has a differentiated regional
strategy, focusing on underserved markets and fast-growing regions
in Brazil. The company has a large footprint with less overlap of
routes than its competitors. Azul is the leader in 92% of routes,
and the only carrier in 84% of its market, with a strong presence
in Brazil's busiest airports. Azul's cargo operations are also
performing well and have shown strong resilience over the past few
quarters.
Above-Average Industry Risks: The airline industry is inherently a
high-risk sector given its cyclical, capital-intensive business
with various structural challenges and exposure to exogenous
shocks. High fixed costs combined with swings in demand and fuel
prices typically translate into volatile profitability and cash
flows. Foreign-exchange exposure is an additional risk for Latin
American airlines, as most costs are U.S. dollar-denominated while
a large portion of operating cash flow is generated in local
currency.
Peer Analysis
Azul's 'B-' reflects its credit profile immediately after its
Chapter 11 emergence, its solid position in the Brazilian airline
market, moderate leverage. and still-limited liquidity and
financial flexibility. Compared with Latin American peers, LATAM
Airlines Group S.A. (LATAM; BB/Positive) is rated higher due to
materially stronger liquidity, a larger pool of unencumbered
assets, broader route diversification, and a clearer path to
sustaining positive free cash flow and lower leverage.
Avianca Group International Limited (Avianca; B+/Stable) is rated
above Azul, supported by ongoing deleveraging, improving
profitability, and adequate liquidity with manageable refinancing
risk following recent liability management actions. Gol Linhas
Aereas Inteligentes S.A. (GOL; CCC+/Positive) remains weaker,
reflecting high leverage, negative near-term free cash flow, and
constrained financial flexibility.
Compared with North American peers, Azul's rating sits well below
American Airlines, United Airlines and Air Canada (BB/Stable), all
of which benefit from significant scale, global networks, robust
liquidity and deeper access to capital markets, plus diversified
revenue streams and extensive loyalty programs that support
stronger credit metrics and shock absorption.
JetBlue Airways Corporation (Jetblue; B-/Negative), while smaller
and more exposed to intense U.S. domestic competition, still
exhibits liquidity and market-access advantages. Its cash balance
and remaining unencumbered assets provide some flexibility to
manage near-term demand weakness, but projected FCF is negative in
the near term.
Fitch’s Key Rating-Case Assumptions
-- Fitch's base case during 2026 and 2027 includes a marginal
increase in ASK of around 2%-3%;
-- Load factors around 80%-81%% during 2026-2027;
-- Jet fuel ranging around USD2.40-2.45 in 2026- 2027;
-- Capex of BRL2.1 billion in 2026 and BRL2.4 billion in 2027;
-- No dividends payments during 2025 and 2026.
Corporate Rating Tool Inputs and Scores
Fitch scored Azul 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) as
follows: Management ('b+', moderate), Sector Characteristics ('b+',
moderate), Market and Competitive Positioning ('bb', moderate),
Diversification and Asset Quality ('bb', moderate), Company
Operational Characteristics ('bb-', moderate), Profitability ('b-',
moderate), Financial Structure ('b-', high), and Financial
Flexibility ('b-', high).
The quantitative financial subfactors are assessed based on custom
financial period parameters of 20% weight for the latest historical
fiscal year 2024 and 40% for forecast fiscal years 2025 and 2026.
The governance assessment of 'good' results in no adjustment.
The operating environment assessment of 'bb' results in no
adjustment.
The SCP is 'b-(EXP)'.
Recovery Analysis
The recovery analysis assumes that Azul would be considered a going
concern in bankruptcy and that the company would be reorganized
rather than liquidated. Fitch has assumed a 10% administrative
claim.
Going-Concern Approach: Azul's going concern EBITDA is BRL2.5
billion which incorporates the company's EBITDA post-restructuring,
adjusted by lease expenses, plus a discount of 20%. The
going-concern EBITDA estimate reflects Fitch's view of a
sustainable, post reorganization EBITDA level, upon which Fitch
bases the valuation of the company. The enterprise value
(EV)/EBITDA multiple applied is 5.5x, reflecting Azul's strong
market position in Brazil.
Fitch applies a waterfall analysis to the post-default EV based on
the relative claims of the debt in the capital structure. The debt
waterfall assumptions consider the company's total debt. These
assumptions result in a Recovery Rating for the first lien secured
debt within the RR1 range, but due to the soft cap of Brazil at
RR4, Azul's senior secured debt will be rated at 'B-'/RR4.
Currently. 100% of Azul's debt falls under first-priority lien
class.
RATING SENSITIVITIES
Following the completion of the Chapter 11 process and the planned
issuance of the Exit Notes, Fitch expects to assign a final rating
of 'B-'/'RR4' to the new Exit Notes, and to convert the expected
IDRs to final IDRs of 'B-'.
Factors that Could, Individually or Collectively, Lead to Negative
Rating Action/Downgrade
-- Sustained liquidity weakening, with cash-to-LTM revenue
consistently below 6%;
-- Gross and net leverage consistently above 4.0 and 3.5,
respectively;
-- EBITDAR fixed-charge coverage sustained at or below 1.0x;
-- Competitive pressure resulting in a material loss of market
share or yield deterioration;
-- An aggressive growth strategy (including consolidation) funded
primarily with debt.
Factors that Could, Individually or Collectively, Lead to Positive
Rating Action/Upgrade
-- Gross and net leverage consistently below 2.5 and 2.0x,
respectively;
-- Sustainably neutral FCF;
-- Sustained cost discipline, with adjusted EBITDAR margins above
33%;
-- Continued ability to refinance high-cost debt on more favorable
terms and improve the secured and unsecured mix;
-- Maintenance of strong liquidity (cash above 10% of LTM revenue)
and an extended debt maturity profile with no material medium-term
refinancing risks;
-- EBITDAR fixed-charge coverage sustained above 1.2x.
Liquidity and Debt Structure
Azul's pro forma post-emergence liquidity is expected to improve,
reflecting a higher cash balance and reduced near-term refinancing
risks. Under the plan, Azul will receive around USD850 million of
new equity, comprising a USD650 million backstopped ERO and USD200
million from both United and certain bondholders. An additional
USD100 million investment from American Airlines remains subject to
regulatory approval and it is not incorporated into Fitch's
forecasts.
Pro forma debt is expected to decline to about USD3.8 billion from
USD7.3 billion pre-emergence. Part of the reduction reflects the
use of proceeds to prepay certain obligations, in addition to
supporting liquidity. Post-emergence debt is expected to consist
mainly of USD1.2 billion new Exit Notes due 2031, USD132 million of
drawn secured letters of credit, USD87 million of local debentures,
and USD69 million of aircraft debt.
Fitch forecasts readily available liquidity of BRL1.6 billion at
end-2026, up from BRL0.6 billion as of Sept. 30, 2025 and BRL1.2
billion at end-2024 (pre-Chapter 11 filing). Despite the
improvement, liquidity remains limited and provides modest rating
headroom to absorb industry volatility. Fitch views the pro forma
short- to medium-term refinancing risk, together with lower lease
payments, as partially offsetting this constraint.
Azul also cites other liquidity sources — accounts receivable
(BRL2.6 billion) and security deposits (BRL4.4 billion) as of Sept.
30, 2025 — which are not included in Fitch's liquidity and net
leverage metrics.
Further liquidity improvement will depend on continued access to
new credit lines and stronger free cash flow generation supported
by a prudent growth strategy.
Issuer Profile
Azul is one of Brazil's largest airlines, dominating the regional
market and serving as the sole carrier on 84% of its routes. For
the LTM ended September 2025, 93% of its revenue came from
passengers and 7% from cargo/other.
RATING ACTIONS
Entity/Debt Rating Prior
----------- ------ -----
Azul S.A.
LT IDR WD Withdrawn D
LT IDR B-(EXP) Expected Rating
LC LT IDR WD Withdrawn D
LC LT IDR B-(EXP) Expected Rating
Natl LT WD(bra) Withdrawn D(bra)
Azul Secured Finance LLP
senior secured LT B-(EXP) Expected Rating RR4
FORESEA HOLDING: Moody's Affirms B2 CFR & Rates New $150MM Notes B2
-------------------------------------------------------------------
Moody's Ratings has affirmed FORESEA Holding S.A. (Foresea)'s B2
corporate family rating as well as the existing B2 Back Senior
Secured rating. At the same time, Moody's have assigned a B2 rating
to Foresea's proposed $150 million backed Senior Secured Notes due
2030. This transaction is an add-on to the original $300 million
backed Senior Secured Notes due 2030 issued in June 2023. The
outlook for the ratings remains stable.
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
Foresea's B2 rating is supported by its strong market position in
Brazil, long term relationship with customers and firm backlog of
contracts that provides cash flow visibility through the end of
2029. The company has about 16% of market share in Brazil, and a
track record that includes over 440 wells interventions and more
than 700 thousand meters drilled as of 2025. The company currently
has a firm backlog of $1.6 billion (as of September 2025), mostly
concentrated in contracts with Petroleo Brasileiro S.A. - PETROBRAS
(Ba1 stable, 99%), and PRIO S.A. (Ba2 stable, 1%). The positive
fundamentals for the offshore drilling industry, a result of tight
supply and high daily rates, and Foresea's good credit metrics and
adequate liquidity after its out-of-court reorganization also
support the rating.
The rating is constrained by Foresea's scale and concentration of
operations in five drilling units, in the oil and gas industry, in
a single country. Foresea is one of the largest pure-play operators
of ultra-deepwater rigs, focused on chartering and operations of
rigs in the Brazilian offshore oil and gas industry. Although the
company increased its managed fleet portfolio in 2025, it continues
to have a smaller scale and a narrower diversification when
compared to global peers. Foresea's small scale and concentration
of operations introduce event risk, as the company's credit metrics
and cash generation would be materially affected in case of
operational disruptions in any of its drilling units. The
inherently cyclical nature of the offshore drilling industry and
the high level of volatility in oil and gas prices also constrain
Foresea's credit profile since those entail significant
re-contracting risks. Finally, the lack of track record in terms of
capital allocation after the out-of-court reorganization also
constrains the rating.
Foresea has low debt levels and adequate liquidity as a result of
the out-of-court reorganization made by Ocyan S.A. The current debt
level and related debt service can easily be accommodated in
Foresea's cash generation, especially when considering the current
high daily rates. Foresea's EBIT margin has historically hovered
around 30-40% and Moody's expects profitability to recover to these
levels in the future because of higher daily rates in its existing
contracts.
Proceeds from the proposed transaction will be used for general
corporate purposes, including payments to shareholders. While
credit negative, the impact of the additional indebtedness will not
strain Foresea' credit quality based on the existing cushion the
company has on credit metrics. Moody's expects Foresea's Moody's
adjusted leverage to increase to around 1.7x from 1.2x in the
twelve months ended September 2025 with the add-on, maintaining
this ratio through 2027, based on the expected performance of
existing contracts. Interest coverage (measured by EBITDA/Interest
expense) will also decline to 7.2x from 10.9x in the twelve months
ended September 2025.
LIQUIDITY
Foresea has an adequate liquidity profile with $109 million in cash
as of September 2025 and only one debt instrument maturing in 2030.
Moody's expects the company's cash flow from operations to amount
to around $200 million per year, which is sufficient to cover
investment requirements in its fleet. Debt incurrence limitations
in its bond indentures limit additional debt issuances and the
company has financial covenants setting a maximum gross leverage of
3.5x (1.0x currently) and a minimum liquidity level of $50 million.
Any additional investments in fleet expansion will be done through
ring-fenced structures that protect existing bondholders. Moody's
expects the company to maintain a disciplined approach to capital
allocation, including dividend distributions, as it starts to
increase its cash from operations.
STRUCTURAL CONSIDERATIONS
The B2 rating of the $300 million senior secured notes due 2030 and
$150 million senior secured notes due 2030 add-on stands at the
same level as the company's corporate family rating. The notes
represent the totality of Foresea's debt. The notes are secured by
a first priority lien on substantially all of Foresea's material
assets.
RATING OUTLOOK
The stable outlook reflects Moody's expectations that Foresea's
credit metrics and liquidity will remain adequate in the next 12-18
months, supported by the terms of the existing charter and service
contracts.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
Foresea's ratings could be upgraded if the company achieves larger
scale with revenues above $750 million as well as longer duration
of contracts in a healthy industry environment, if the company
sustains a track record of strong profitability and maintains a
strong balance sheet with leverage below 1.5x, positive FCF
generation and prudent shareholder distributions. Further balance
sheet strengthening, with a high cash position or extremely low
leverage that mitigates its small size and narrow product offering
could also result in positive pressure on the rating.
Foresea's ratings could be downgraded if the company's earnings and
backlog deteriorate materially, leading to gross leverage
sustainedly in excess of 3.0x and EBITDA / Interest expense falls
below 3x, if FCF generation turns negative, as a result of weaker
operating performance or more aggressive than currently anticipated
financial policies, including dividend distributions or high
refinancing risk, or if its liquidity position weakens.
COMPANY PROFILE
Foresea is a Luxembourg-based company created in June 2023 after
the spin-off of Ocyan's drilling assets. The company owns 5
offshore drilling units (4 drillships and 1 semisubmersible)
focused on chartering and operations of rigs in the Brazilian
offshore oil and gas industry, and provides services to other
third-party assets (one semisubmersible and four offshore fixed
rigs). As of the twelve months ended September 2025, the company
generated $558 million in revenue and around $246 million in
Moody's adjusted EBITDA.
The principal methodology used in these ratings was Oilfield
Services published in October 2025.
Moody's current scorecard indicated outcome, as well as Moody's
12-18 month forward view, maps to a Ba3, exceeding the B2 rating by
two notches. This difference results from Moody's expectations
constraints regarding scale and lack of diversification despite the
continued strong metrics and enhanced production.
FORESEA HOLDING: S&P Affirms 'B' ICR & Alters Outlook to Stable
---------------------------------------------------------------
S&P Global Ratings, on Feb. 2, 2026, revised the outlook on
Brazilian offshore drilling company Foresea Holding S.A. to stable
from positive and affirmed the 'B' issuer credit rating. S&P also
affirmed its 'B+' issue-level rating on the company's senior
secured debt; the '2' recovery rating is unchanged.
The stable outlook reflects S&P's expectation that Foresea will
maintain leverage near 2.0x, with higher gross debt and an EBITDA
margin above 40%.
S&P said, "Foresea announced a proposed reopening of its senior
secured notes, which will increase leverage compared with our
previous expectations. The company will use the proceeds for
general corporate purposes, including distributions to
shareholders.
"We expect the company to maintain solid operational efficiency and
profitability, and continue to extend contracts and sign new ones.
"Foresea's proposed reopening of its senior secured notes due 2030
indicate the company's tolerance for higher leverage than we were
previously expecting. SAO PAULO (S&P Global Ratings) Feb. 2,
2026—S&P Global Ratings took the ratings actions described above.
Foresea intends to use the proceeds of the reopening for general
corporate purposes, including distributions to shareholders. We now
forecast debt of US$450 million, up from US$300 million, so we
expect the company will maintain debt to EBITDA closer to 2.0x and
funds from operations (FFO) to debt below 55%. Our previous
positive outlook reflected our expectations that the company would
reduce leverage toward 1.0x and maintain FFO to debt above 60%,
under the assumption of stable debt levels and increasing EBITDA
generation.
"We anticipate that contract extensions and expected new contracts
will sustain relatively stable profitability. After a significant
revenue increase in 2025 due to new contracts at higher day rates,
we now expect revenue to be stable in 2026. This is due to two
special periodic surveys and one stoppage for preparation to a
contract requirement during the year, which will reduce operating
days. We believe the company will be able to maintain solid uptime
rates of 96% on average, resulting in an EBITDA margin of about
40%-41% in 2026 and 2027."
On Jan. 4, operation of Foresea's ODN II drillship was suspended
after a leakage of fluid. S&P said, "We understand that Foresea is
doing required inspections, which for now indicate no material
damage to the drillship. Public news indicate that Brazil's
National Petroleum Agency should inspect over the next days, after
which the drillship could be allowed to start operations again,
likely by mid-February. Depending on the time it takes for the
drillship to restart operations and eventual cost compensation, we
could see somewhat lower revenue and EBITDA generation than we
currently forecast."
S&P said, "The stable outlook reflects our expectation that Foresea
will maintain leverage closer to 2.0x, with somewhat higher debt
levels following the retap on the notes. We also anticipate solid
operational efficiency and assume the company will continue to
secure new contracts at attractive rates.
"We could lower our rating on Foresea if the company experiences
longer-than-expected maintenance shutdowns, reducing operational
availability and cash flow generation, or if it employs an
aggressive growth strategy financed with debt and not accompanied
by new contracts. In this scenario, we would expect debt to EBITDA
to move toward 3.0x while constant negative discretionary cash flow
would pressure the company's liquidity.
"We could raise the rating on Foresea in the medium term if it
reduces leverage, with increasing EBITDA generation allowing the
company to maintain debt to EBITDA below 1.5x and FFO to debt
consistently above 60%. An upgrade would also depend on our view
that the company would maintain a disciplined approach to
shareholder distributions, protecting leverage and maintaining
adequate liquidity."
OI SA: S&P Lowers ICR to 'D' Following Missed Interest Payment
--------------------------------------------------------------
S&P Global Ratings lowered the issue rating on Brazilian
telecommunications operator Oi S.A.'s 2026 senior secured notes to
'D' from 'CC' and withdrew the '3' recovery rating on the notes.
At the same time, S&P lowered the global scale issuer credit
ratings on Oi to 'D' (default) from 'SD' (selective default).
The lowering of the rest of S&P's global scale ratings on Oi to 'D'
follows the most recent court decision extending the suspension of
the enforceability of the company's postpetition claims.
Oi S.A. missed the interest payment on its 2026 senior secured
notes that was due on Jan. 30, 2026.
The nonpayment follows a court decision from Jan. 16, 2026, which
extended the suspension of the enforceability of the company's
postpetition claims for an additional 90 days (starting Jan. 20).
On Jan. 16, 2026, a reporting judge in the state of Rio de Janeiro
extended the suspension of the enforceability of Oi's postpetition
claims, both past-due claims and future claims, for an additional
90 days (starting Jan. 20). The suspension has been in effect since
Sept. 30, 2025.
As a result of these decisions, Oi missed an interest payment that
was due Jan. 30, 2026, on its senior secured notes maturing later
this year. Following the court decisions, S&P believes the company
will fail to pay all or substantially all of its obligations as
they come due.
===========================
C A Y M A N I S L A N D S
===========================
VITALITY RE XVII: Fitch Rates Series 2026 Class C Notes 'BB-sf'
---------------------------------------------------------------
Fitch Ratings has assigned ratings to the 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
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 Class A notes is 2.00%, 2.40% for Class
B and 4.00% for Class C.
This 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 greater risk.
RATING ACTIONS
Entity/Debt Rating Prior
----------- ------ -----
Vitality Re XVII Limited
Series 2026, Class A Notes
Principal-at-Risk Variable
Rate Notes due January 8,
2030 LT BBB+sf New Rating BBB+(EXP)sf
Series 2026, Class B
Principal-at-Risk Variable
Rate Notes due January 8,
2030 LT BB+sf New Rating BB+(EXP)sf
Series 2026, Class C
Principal-at-Risk Variable
Rate Notes due January 8,
2030 LT BB-sf New Rating BB-(EXP)sf
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.
Transaction Summary
The Series 2026 notes (classes 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. (Milliman) 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
=====================
E L S A L V A D O R
=====================
FIFTEENTH MORTGAGE: Fitch Affirms Bsf Rating on 2 Classes
---------------------------------------------------------
Fitch Ratings has affirmed Salvadoran RMBS transactions originated
by El Salvador La Hipotecaria, S.A. de C.V. and underlying U.S.
transactions. Fitch has affirmed the 'B+sf' rating for the series A
notes on the Thirteenth Mortgage-Backed Notes Trust and Fifteenth
Mortgage-Backed Notes Trust. Fitch has also affirmed the series B
and C notes issued by the Fifteenth Mortgage-Backed Notes Trust at
'Bsf'. The Rating Outlook is Stable.
Fitch has also affirmed the 'AA+sf' rating for La Hipotecaria El
Salvadorian Mortgage Trust 2016-1 certificates with a Stable
Outlook.
RATING ACTIONS
Entity / Debt Rating Prior
Thirteenth Mortgage-Backed
Notes Trust
A PAL3008861A4 LT B+sf Affirmed B+sf
La Hipotecaria El
Salvadorian Mortgage
Trust 2016-1
2016-1 50346VAA7 LT AA+sf Affirmed AA+sf
Fifteenth Mortgage-Backed
Notes Trust
A LT B+sf Affirmed B+sf
B LT Bsf Affirmed Bsf
C LT Bsf Affirmed Bsf
KEY RATING DRIVERS
Country of Assets Determine Maximum Achievable Ratings: El
Salvador's Country Ceiling (CC) is 'B+'. According to Fitch's
'Structured Finance and Covered Bonds Country Risk Rating
Criteria,' the ratings of Structured Finance notes cannot exceed
the CC of the country of the assets, unless the transfer and
convertibility (T&C) risk is mitigated. While the series A notes of
the two RMBS transactions have sufficient credit enhancement to be
rated above the country's Issuer Default Rating (IDR), the T&C risk
is not mitigated. Therefore, the ratings remain constrained by the
CC and are ultimately linked to the Long-Term IDR of El Salvador.
The ratings are also constrained to the structured finance maximum
achievable rating in El Salvador, which is also 'B+sf'.
Operational Risk Mitigated (Latin America RMBS Rating Criteria):
Grupo ASSA, S.A. (BBB-/Stable, primary servicer) has hired La
Hipotecaria S.A. de C.V. (LHES) (the sub-servicer) to be the
servicer for the mortgages. Fitch has reviewed LHES procedures and
is satisfied with its servicing capabilities. Additionally, Banco
General S.A. (BBB-/Stable) has been designated as back-up servicer
to mitigate the exposure to operational risk and will replace the
defaulting servicer within five days of a servicer disruption
event.
Thirteenth Mortgage-Backed Notes Trust
Transaction Performance Consistent to Rating: CE for class A notes
has been increasing due to the sequential nature of the structure.
As of December 2025, CE has increased to approximately 26.1% up
from 23.9% observed in December 2024 for the series A notes. The
series A notes also benefit from reserve accounts equivalent to
1.0625% the outstanding balance of the series A notes, covering
almost 3x their next interest payment and senior expenses.
Frequency of Foreclosure Revised: Under Fitch's assumptions in a
'B+sf' scenario, the A notes would need to support a Weighted
Average Foreclosure Frequency (WAFF) of 32.9% and a Weighted
Average Loss Given Default (WALGD) of 32.1%, compared with WAFF of
33.0% and WALGD of 33.3% from previous review. These assumptions
consider the main characteristics of the assets, where Original
Loan-to-Value (OLTV) is 87.1%, the seasoning average 151 months and
remaining term 197 months, WA current loan-to-value is 66.2% and
the majority of performing borrowers (57.1%) pay through a payroll
deduction mechanism. The assumptions also consider a Performance
Adjustment Factor of 0.7x considering the historical performance of
the portfolio.
Fifteenth Mortgage-Backed Notes Trust
Transaction Performance Consistent to Rating: CE has increased
during the last year due to the sequential nature of the structure
and current CE are consistent to a 'B+sf' for class A and 'Bsf' for
class B and C. As of December 2025, CE has increased approximately
22.9% up from 21.0% observed in December 2024 for the series A
notes, 13.0% up from 10.8% observed in last review for the series B
notes, and 9.2% up from 7.3% observed in last review for the series
C notes.
A few factors contributed, such as stability in the excess spread
and good asset performance. The series A notes and the series B
notes also benefit from reserve accounts equivalent to 3x their
next interest payment in the form of a letter of credit.
Frequency of Foreclosure Revised: Under Fitch's assumptions in a
'B+sf' scenario, the A notes would need to support a WAFF of 29.4%
and a WALGD of 44.9% compared with WAFF of 28.9% and WALGD of 46.1%
from previous review. For the B and C notes, at a 'Bsf' level, it
would need to support a WAFF of 14.1% and a WALGD of 30.3%,
compared with WAFF of 14.0% and WARR of 31.6% from previous
review.
These assumptions consider the main characteristics of the assets,
where OLTV is 87.3%, the seasoning averages 125 months and the
remaining term is 227 months, WA current loan-to-value is 71.4% and
the majority of performing borrowers (60.6%) pay through a payroll
deduction mechanism. The assumptions also consider a Performance
Adjustment Factor of 0.7x considering the historical performance of
the portfolio.
CLN Transaction
La Hipotecaria El Salvadorian Mortgage Trust 2016-1
DFC's Credit Quality Supports Rating: The rating assigned to La
Hipotecaria El Salvadorian Mortgage Trust 2016-1 certificates is
commensurate with the credit quality of the guarantee provider. The
credit quality of U.S. International Development Finance
Corporation (DFC) is directly linked to the U.S. sovereign rating
(AA+/F1+/Stable), as guarantees issued by, and obligations of, DFC
are backed by the full faith and credit of the U.S. government,
pursuant to the Foreign Assistance Act of 1969.
Reliance on DFC Guaranty: Fitch assumes the payment on the
certificates will rely on the DFC guaranty. Through this guaranty,
DFC will unconditionally and irrevocably guarantee the receipt of
proceeds from the underlying notes in an amount sufficient to cover
timely scheduled monthly interest amounts and the ultimate
principal amount on the certificates.
Ample Liquidity: The certificates benefit from liquidity, in the
form of a five-day buffer between payment dates on the underlying
notes and payment dates on the certificates. Additionally, the
certificates benefit from liquidity in the form of an interest
reserve account or a letter of credit at the underlying note level.
Fitch considers this sufficient to keep debt service current on the
guaranteed certificates until funds under a claim of DFC are
received.
RATING SENSITIVITIES
Factors that Could, Individually or Collectively, Lead to Negative
Rating Action/Downgrade
The ratings of Thirteenth Mortgage-Backed Trust series A notes and
Fifteenth Mortgage-Backed Notes Trust series A, B and C notes could
be downgraded in case of severe increases in foreclosure frequency
as well as reductions in recovery rates. Also, ratings could be
downgraded if El Salvador's CC level or the maximum achievable
ratings in Structured Finance (SF Cap) changes.
In the case of La Hipotecaria El Salvadorian Mortgage Trust 2016-1
certificates, the rating assigned could be downgraded if there's a
negative change in the perception of the credit quality of DFC,
which is directly linked to the U.S. sovereign rating.
Factors that Could, Individually or Collectively, Lead to Positive
Rating Action/Upgrade
The ratings of Thirteenth Mortgage-Backed Notes Trust series A
notes and Fifteenth Mortgage Backed Notes Trust series A notes are
currently capped at El Salvador's CC level. These ratings could
only be upgraded if El Salvador's CC is upgraded, as well as the SF
Cap. The Fifteenth Mortgage Backed Notes Trust series B and C notes
can be upgraded if the notes present a higher credit enhancement
that could withstand higher stresses, consistent to a 'B+sf'
rating.
In the case of La Hipotecaria El Salvadorian Mortgage Trust 2016-1
certificates, the rating assigned could be upgraded if there's a
positive change in the perception of the credit quality of DFC,
which is directly linked to the U.S. sovereign rating.
=============
J A M A I C A
=============
JAMAICA: DBJ Partners with Firms to Speed up Recovery Financing
---------------------------------------------------------------
RJR News reports that the Development Bank of Jamaica (DBJ) has
strengthened partnerships with four financial institutions under
its M5 Business Recovery Programme, aimed at helping businesses
recover from the impact of Hurricane Melissa.
The commitment signing brought together First Global Bank, Sagicor
Bank, EXIM Bank and JN Bank, which will provide financing to
affected enterprises, including micro, small and medium-sized
businesses, according to RJR News.
DBJ says additional banks and financial institutions are expected
to be onboarded in the coming weeks to expand the program's reach,
the report notes.
The M5 Business Recovery Programme offers concessional interest
rates, flexible repayment terms and extended loan tenures, as well
as the option to restructure existing credit facilities, the report
relays.
Speaking at the signing, DBJ Managing Director Dr. David Lowe said
collaboration with financial partners is critical to ensuring
recovery financing reaches businesses quickly and effectively, 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.
On Feb. 21, 2025, Fitch Ratings affirmed Jamaica's Long-Term
Foreign-Currency Issuer Default Rating (IDR) at 'BB-', with a
positive rating outlook. In October 2023, Moody's upgraded the
Government of Jamaica's long-term issuer and senior unsecured
ratings to B1 from B2, and senior unsecured shelf rating to (P)B1
from (P)B2. The outlook has been changed to positive from stable.
In September 2024, S&P affirmed 'BB-/B' longterm foreign and local
currency sovereign credit ratings on Jamaica and revised outlook to
positive.
NEW FORTRESS: BlackRock Holds 9.8% Equity Stake as of Dec. 31
-------------------------------------------------------------
BlackRock, Inc., disclosed in a Schedule 13G (Amendment No. 1)
filed with the U.S. Securities and Exchange Commission that as of
December 31, 2025, it beneficially owns 27,907,624 shares of New
Fortress Energy Inc.'s Common Stock, representing 9.8% of the
shares outstanding.
BlackRock, Inc. may be reached through:
Spencer Fleming, Managing Director
50 Hudson Yards
New York, NY 10001
Phone: (212) 810-5800
A full-text copy of BlackRock's SEC report is available at:
https://tinyurl.com/art9cvy7
About New Fortress Energy Inc.
New Fortress Energy Inc., a Delaware corporation, is a global
energy infrastructure company founded to help address energy
poverty and accelerate the world's transition to reliable,
affordable and clean energy. The Company owns and operates natural
gas and liquefied natural gas infrastructure, ships and logistics
assets to rapidly deliver turnkey energy solutions to global
markets. The Company has liquefaction, regasification and power
generation operations in the United States, Jamaica, Brazil and
Mexico. The Company has marine operations with vessels operating
under time charters and in the spot market globally.
As of September 30, 2025, the Company had $11.9 billion in total
assets, $10.8 billion in total liabilities, and a total
stockholders' equity of $1.1 billion.
* * *
In November 2025, S&P Global Ratings lowered its issuer credit
rating on New Fortress Energy Inc. (NFE) to 'SD' (selective
default) from 'CCC'. At the same time, S&P lowered its issue level
rating on NFE's 12% senior secured notes due 2029 to 'D' from
'CCC-'. The downgrade reflects NFE's decision to enter into a
forbearance agreement. S&P will reevaluate its ratings on NFE
before the end of November as more information becomes available.
The Company has initiated a process to evaluate its strategic
alternatives to improve its capital structure. It has retained
Houlihan Lokey Capital, Inc. as financial advisor and Skadden,
Arps, Slate, Meagher & Flom LLP as legal advisor to assist it in
this evaluation. The Company, along with its advisors, is
considering all options available, including asset sales, capital
raising, debt amendments and refinancing transactions, and other
strategic transactions that seek to provide additional liquidity
and relief from acceleration under its debt agreements.
As part of this process, the Company is engaging in discussions
with various existing stakeholders and potential investors. There
are inherent uncertainties as the outcome of these negotiations and
potential transactions are outside management's control, and
therefore there are no assurances that management will be
successful in these negotiations and that any of these potential
transactions will occur.
In addition, there can be no assurances that these transactions
will sufficiently improve the Company's liquidity or that the
Company will otherwise realize the anticipated benefits.
Moreover, if the Company fails to obtain amendments and
forbearance, the Company may be required or compelled to pursue
additional restructuring initiatives to preserve value and
optionality, including possible out-of-court restructurings, or
in-court relief, which could have a material and adverse impact on
the Company's stockholders.
===========
M E X I C O
===========
CHAMBERLAIN GROUP: Fitch Affirms 'B-' LongTerm IDR, Outlook Stable
------------------------------------------------------------------
Fitch Ratings has affirmed Chariot Parent LLC and Chariot Buyer
LLC's (dba Chamberlain Group) Long-Term Issuer Default Ratings
(IDRs) at 'B-'. Fitch has also affirmed the company's first lien
secured revolver and term loan, including the proposed add-on to
the term loan, at 'B-' with a Recovery Rating of 'RR4'. The Rating
Outlook is Stable.
Chamberlain Group's 'B-' IDR and Stable Outlook reflect its high
leverage, offset by strong profitability and pre-dividend free cash
flow (FCF) margins, solid competitive position, and diversified end
markets. The rating also considers the company's financial policy,
including occasional large debt-funded shareholder distributions,
along with its extended maturity schedule and tariff exposure
stemming from concentrated manufacturing.
Key Rating Drivers
Volatile Post-Dividend FCF: Chamberlain's FCF is volatile, driven
primarily by the timing and size of shareholder distributions.
Fitch expects Chamberlain to generate $125 million-$150 million of
positive FCF in 2025, reflecting solid underlying cash generation
and no distributions. In 2024, FCF before distributions was
positive, but $300 million of shareholder distributions more than
offset it, resulting in reported FCF of negative $107 million. In
2026, Fitch expects FCF before distributions to remain positive,
but planned $400 million of shareholder distributions will push
reported FCF to negative $200 million-$250 million.
High Leverage Levels: Fitch projects EBITDA leverage at 7.6x at the
end of 2025, up slightly from 7.5x at year-end 2024, reflecting
higher debt levels from the acquisition of Arrow Tru-Line, and
expects leverage to remain at similar levels in 2026 as EBITDA
margins only improve slightly. Fitch's rating case does not assume
debt repayment beyond required term loan amortization; therefore,
any additional debt reduction or margin improvement above
expectations could result in lower leverage.
Projected Margin Improvement: Fitch projects EBITDA margins to
expand by 40 bps-80 bps, supported by continued price realization
and SG&A efficiency initiatives. Chamberlain has implemented price
increases to mitigate potential tariff impacts, and Fitch expects
the company to continue pushing through incremental pricing to
support further margin improvement into 2026.
Solid Overall Competitive Position: Chamberlain holds a strong
competitive position, supported by well-recognized brands and
leadership in both residential and commercial garage door opener
markets. Its diversified distribution network includes dealers,
installers, OEMs, and major retailers like Home Depot and Lowe's.
This reinforces its value chain presence and supports stable to
growing margins. The acquisition of Arrow further enhances
Chamberlain's suite of product offerings, which could provide
revenue synergies longer term.
Repair Segment Exposure Limits Cyclicality: Chamberlain's diverse
end-market exposure is about 50% residential, 40% commercial, and
10% automotive and international, which limits cyclicality.
Approximately 76% of residential revenue comes from the less
cyclical retrofit market, primarily non-discretionary break-fix
replacements. This supports stable revenues and cash flow through
economic cycles.
Manufacturing and Distribution Footprint: The majority of
Chamberlain's products are manufactured at its Nogales, Mexico
facility. Recent U.S.-based acquisitions, including Arrow, have
increased domestic production capacity and reduced reliance on
Nogales. This strategic footprint enables competitive costs but
also exposes the company to significant risks from facility
disruptions or adverse tariff changes. Fitch expects management to
further evaluate alternatives to hedge against manufacturing
concentration risk.
Blackstone Ownership Supports Leverage Tolerance: Fitch expects
Blackstone's private equity ownership to support a higher leverage
tolerance, with capital allocation likely to prioritize equity
returns over accelerated debt repayment. As a result, Fitch expects
excess cash flow to be directed toward shareholder distributions
and/or growth initiatives (including acquisitions), limiting
deleveraging beyond required amortization and keeping leverage
elevated. At the same time, Fitch expects Chamberlain to benefit
from Blackstone's sponsorship through enhanced resources and
execution support to accelerate growth in commercial garage door
openers and access solutions.
Parent-Subsidiary Linkage: Fitch applied the strong subsidiary/weak
parent approach under its "Parent and Subsidiary Linkage
Criteria."
Fitch views the linkage as strong between Chariot Parent LLC
(issuer of financial statements) and Chariot Buyer LLC (borrower
under the credit agreements) given the openness of access and
control by the parent and relative ease of cash movement within the
structure. Fitch views the rated entities on a consolidated basis.
Peer Analysis
Chamberlain has similar profitability and FCF metrics but
meaningfully higher leverage than Fitch's publicly rated universe
of building products manufacturers, which are concentrated in the
low-investment-grade rating categories. These peers typically have
EBITDA leverage of less than or equal to 3.0x and global operating
profiles.
Chamberlain's leverage is modestly lower than that of Park River
Holdings, Inc. (B-/Stable), but higher than LBM Acquisition, LLC's
(B/Negative). While smaller in scale, Chamberlain is better
positioned in the value chain, with significantly higher
profitability and stronger FCF metrics compared to these building
products distributors.
Fitch's Key Rating-Case Assumptions
- Revenue grows mid-to-high single digits in 2025 and 2026;
- Positive FCF of $125 million-$175 million in 2025, and negative
FCF of $200 million-$250 million in 2026;
- No shareholder distributions in 2025; $400 million of
distributions in 2026.
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):
- Business and financial profile factors (assessment, relative
importance): Management (bb, Moderate), Sector Characteristics
(bbb, Lower), Market and Competitive Positioning (bbb+, Higher),
Diversification and Asset Quality (bb, Moderate), Company
Operational Characteristics (bb+, Moderate), Profitability (bb-,
Moderate), Financial Structure (ccc, Higher), and Financial
Flexibility (ccc+, Moderate).
- The quantitative financial subfactors are based on standard CRT
financial period parameters: 20% weight for the latest historical
year 2024, 40% for the forecast year 2025 and 40% for the forecast
year 2026.
- The Governance assessment of 'Some Deficiencies' results in no
adjustment.
- The Operating Environment assessment of 'bbb' results in no
adjustment.
- The SCP is 'b-'.
To derive the IDR:
- Application of Fitch's Parent Subsidiary Linkage Rating Criteria
results in a(n) consolidated approach.
Recovery Analysis
Key Recovery Assumptions
The recovery analysis assumes that Chamberlain would be considered
a going-concern (GC) in bankruptcy and that the company would be
reorganized rather than liquidated. Fitch has assumed a 10%
administrative claim.
Chamberlain's GC EBITDA estimate of $300 million projects a
post-restructuring sustainable cash flow, which is about 30% below
the pro forma LTM EBITDA.
Fitch assumes that a default would occur from a meaningful and
continued decline in residential and commercial construction
activity, combined with the loss of one of its top customers. Fitch
estimates revenue that is 18% lower than the LTM revenue and EBITDA
margin of about 19% (over 200 bps below the Sep 30, 2025) would
result in about $300 million GC EBITDA. This would capture the
lower revenue base of the company after emerging from a downturn
plus a sustainable margin profile after right sizing.
An Enterprise Value (EV) multiple of 6.5x EBITDA is applied to the
GC EBITDA to calculate a post-reorganization enterprise value. The
6.5x multiple is below the 14.7x purchase multiple for the
Chamberlain Group. The EV multiple is higher than the 6.0x multiple
Fitch uses for LBM Acquisition, LLC and Park River Holdings,
respectively. Fitch believes Chariot has a stronger competitive
position in the value chain as a manufacturer compared with LBM and
Park River, both of which are distributors. The company also
benefits from a dominant market share, which is reflected in the
EBITDA margins in the 20% range.
The revolver is assumed to be fully drawn at default. The analysis
results in a recovery corresponding to an 'RR4' for the $250
million first lien revolver and the existing first lien secured
term loan. The distributable value was reduced by the company's
$125 million Accounts Receivables Securitization facility.
RATING SENSITIVITIES
Factors that Could, Individually or Collectively, Lead to Negative
Rating Action/Downgrade
-- EBITDA interest coverage sustained below 1.5x;
-- FCF generation sustained at neutral or negative levels, leading
to liquidity issues or concerns;
-- CFO less capex to debt sustained in negative territory (below
0%) on a consistent basis.
Factors that Could, Individually or Collectively, Lead to Positive
Rating Action/Upgrade
-- EBITDA leverage sustained below 6.5x;
-- EBITDA interest coverage sustained above 2.5x.
Liquidity and Debt Structure
Fitch expects Chamberlain's liquidity position to remain adequate
to fund operations and service its debt. The company had $338
million of cash as of Sep 30, 2025, and no borrowings under its
$250 million revolver that matures in 2028 and its $125 million
accounts receivable securitization facility expiring in January
2029. The company has no debt maturities until 2032, when its
first-lien term loan B mature. Annual TL amortization is manageable
at around $37 million on a pro forma basis.
The company is issuing a $300 million add-on to its existing term
loan B to partly fund a $400 million shareholder distribution. The
incremental term loan will have the same maturity and amortization
and will be pari passu with the revolver.
Issuer Profile
Chariot Parent, LLC (d/b/a The Chamberlain Group) is a leading
North American provider of access control solutions. It holds the
No. 1 position in residential garage door openers, commercial
garage door openers, commercial gate controls, and automotive
garage access remotes.
RATING ACTIONS
Entity / Debt Rating Recovery Prior
------------- ------ -------- -----
Chariot Buyer LLC
LT IDR B- Affirmed B-
senior secured LT B- Affirmed RR4 B-
Chariot Parent LLC
LT IDR B- Affirmed B-
DEL MONTE: Pushes for Creditor Settlement, Chapter 11 Asset Sales
-----------------------------------------------------------------
Alex Wolf of Bloomberg Law reports that Del Monte Foods Corp. II
urged a bankruptcy court to greenlight asset sales exceeding $500
million and approve a comprehensive settlement with lenders and
unsecured creditors, a move the company says would pave the way for
an orderly wind-down. The debtor argued the transactions are fair,
lawful and in the best interests of creditors overall.
Following the close of a two-day hearing Thursday, January 29,
2026, in the U.S. Bankruptcy Court for the District of New Jersey,
Del Monte defended the sales and settlement against objections
lodged by a small group of lenders. U.S. Bankruptcy Judge Michael
B. Kaplan said he would consider the arguments and rule at a later
date, the report cites.
About Del Monte Foods Corporation II Inc.
Del Monte Foods, Inc. produces, distributes, and markets branded
plant-based packaged food products in the United States and
Mexico.
Del Monte Foods Corporation II Inc. and its affiliates filed their
voluntary petitions for relief under Chapter 11 of the Bankruptcy
Code (Bankr. D.N.J. Lead Case No. 25-16984) on July 1, 2025,
listing $1,000,000,001 to $10 billion in both assets and
liabilities.
Judge Michael B Kaplan presides over the case.
Michael D. Sirota, Esq. at Cole Schotz P.C. represents the Debtor
as counsel.
The U.S. Trustee for Regions 3 and 9 appointed an official
committee to represent unsecured creditors in the Chapter 11 cases
of Del Monte Foods Corporation II, Inc. and its affiliates. The
committee hires Morrison & Foerster LLP as counsel. Province, LLC
as financial advisor. Kelley Drye & Warren LLP as co-counsel.
Stifel, Nicolaus & Co., Inc. ("Miller Buckfire") as investment
banker.
=================
N I C A R A G U A
=================
NICARAGUA: Weathered Well Multiple Shocks Since 2018, IMF Says
--------------------------------------------------------------
The Executive Board of the International Monetary Fund (IMF)
concluded the Article IV Consultation with Nicaragua and considered
and endorsed the staff appraisal without a meeting. The authorities
have consented to the publication of the Staff Report prepared for
this consultation.
The Nicaraguan economy weathered well multiple shocks since 2018,
supported by appropriate macroeconomic and financial policies,
substantial pre-2018 crisis buffers, and financing from
international financial institutions during the pandemic. Real GDP
growth was further sustained recently by favorable terms of trade
and high remittances growth. The economy is operating under
targeted international sanctions, a geopolitical reorientation of
official foreign inflows, and transfers of private property to the
state since 2022. Strong fundamentals - low inflation, a declining
public debt-to-GDP ratio, twin fiscal and external surpluses,
well-capitalized banks and sizeable buffers—should help Nicaragua
withstand headwinds from ongoing shifts in the global policy
landscape.
The short-term economic outlook remains broadly favorable, with
real GDP growth expected to reach 3.8 percent in 2025 and moderate
to 3.4 percent in 2026. The medium-term outlook remains subject to
high uncertainty, including due to global shifts in trade and
immigration policies. Risks are tilted to the downside in the
medium term, including from natural disasters, commodity price
volatility, weaker global growth, tighter U.S. immigration and
trade policies, and stricter and wider international sanctions.
Upside short-term risks include more favorable terms of trade and
higher public capital spending.
Executive Board Assessment
In concluding the 2025 Article IV consultation with Nicaragua,
Executive Directors endorsed staff’s appraisal, as follows:
Nicaragua’s economy remains resilient supported by sound
macroeconomic policies, amid a shifting global policy landscape.
Real GDP grew by 3.9 percent in the first half of 2025, as exports
and remittances increased strongly despite global trade policy
uncertainty. Inflation remains low, and the financial sector is
reportedly well capitalized with adequate liquidity and low NPLs.
The fiscal position is strong, with external and overall public
debt at moderate risk of debt distress, substantial space to absorb
shocks, and a strong debt carrying capacity. The NIIP is
sustainable, reserve coverage is adequate, and the external
position is assessed as substantially stronger than the level
implied by fundamentals and desirable policies.
The short-term outlook remains broadly favorable, while downside
risks and high uncertainty dominate over the medium term. Growth is
projected to moderate to 3.4 percent in 2026, from 3.8 percent in
2025, reflecting mostly staff’s assumptions of lower remittances,
in a context of tighter U.S. immigration policies. Over the medium
term, staff expect real GDP growth to stabilize at around 3½
percent, supported by public investment and an expanding labor
force. Foreign reserves are expected to remain ample, albeit
growing at a slower pace as CA surpluses narrow. Upside short-term
risks include more favorable terms of trade and higher public
investment. Downside risks stem from commodity price volatility,
weaker global growth, and tighter U.S. immigration and trade
policies. Natural disasters, and stricter and broader international
sanctions could also impact negatively growth.
Staff welcome the authorities’ continued commitment to
safeguarding fiscal sustainability and building buffers while
supporting growth and recommend additional measures. Staff broadly
support the 2026 capital and human development spending plans, and
advise proceeding cautiously with budget execution in line with
staff’s baseline scenario, considering downside risks, high
uncertainty, limited external financing, and persistent imbalances
in the pension system. Staff also recommend enhancing tax
collection and better targeting SOE transfers to create space for
higher priority public investment and targeted social spending. In
a downside scenario, targeted and time-bound support to vulnerable
groups could be deployed.
Monetary policy should continue preserving price and external
stability and the BCN should continue strengthening monetary policy
transmission. The ongoing easing of the monetary policy stance and
the announced rate of crawl of 0 percent for 2026 are appropriate
given external conditions and the macroeconomic and financial
policy mix. Staff recommend continuing to foster the use of local
currency and deepen capital markets to enhance monetary policy
effectiveness. In a downside scenario, the authorities should stand
ready to increase the monetary reference rate and recalibrate the
rate of crawl, if needed.
Staff support the implementation of the comprehensive set of
financial laws approved in early 2025 and recommend further
strengthening crisis preparedness. The new laws increased capital
buffers and strengthened the recovery and crisis resolution
framework. Further efforts are needed to prepare the analysis
needed for activating the CCB and contingency plans in the crisis
resolution framework. Staff also recommend standing ready to
release CCBs in a downside scenario of financial distress and
adjusting further the financial regulations in consultation with
banks to ensure they do not impose an excessive regulatory burden.
Staff recommend boosting human and physical capital and
diversifying exports. Stronger social safety nets and expanded
active labor-market policies would support a higher contribution of
labor to medium-term growth, along with the expected public
investment in transport and health. Staff welcome efforts to expand
export markets and recommend working with export firms to support
the skills needed to scale up into higher value-added products.
To sustain higher medium-term growth, staff recommend strengthening
the business climate and economic governance, especially
significantly improving the rule of law. To improve competitiveness
and increase private investment by reducing the cost of doing
business, it is important to strengthen the business facilitation
with economic agents and maintain fiscal integrity. It is also
crucial to increase the transparency, accountability, and
effectiveness of administrative and judicial processes related to
private property rights (including of third parties), which
includes guaranteeing all adequate, effective, and fair legal
recourse. On economic governance, staff recommend continuing to
increase fiscal transparency by publishing consolidated financial
statements and audit reports, coordinating with private and NPOs to
better understand AML/CFT risks, and increase the reporting of
suspicious transactions, as needed. Staff also recommend further
strengthening the anti-corruption framework by allowing the
automatic publication of asset declarations of top-level officials
and ensuring effective management and oversight of all property of
the state.
Data provided to the Fund remains broadly adequate for surveillance
with some shortcomings. Staff recommend expanding data sources,
improving the timeliness of key statistics such as poverty rates,
and enhancing the publication of detailed balance of payments data,
including remittances.
===========
P A N A M A
===========
ENA NORTE: Fitch Affirms BB on USD Notes & Alters Outlook to Stable
-------------------------------------------------------------------
Fitch Ratings has affirmed the long-term rating on ENA Norte
Trust's (ENA Norte) USD600 million notes at 'BB' and revised the
Outlook to Stable from Negative. Fitch also affirmed the national
long-term rating at 'A+(pan)' and revised the Outlook to Stable
from Negative.
RATING RATIONALE
The Stable Outlook reflects Fitch's expectation that the company
will be able to refinance its existing debt in the near term,
supported by the extension of the concession tenor to March 2058.
Although the debt outstanding at maturity in Fitch's Rating Case
has increased to USD36 million from USD28 million in last year's
review, Fitch believes that the extension of concession tenor is a
key step that enables a refinancing strategy, which is actively
being pursued by management. In addition, the refinancing amount is
likely manageable for the sponsor, Empresa Nacional de Autopista
(ENA), which has indicated its willingness to support timely debt
repayment.
The 'BB' rating of ENA Norte incorporates a two-notch uplift to its
Standalone Credit Profile (SCP) of 'b+'. As a government-owned,
ring-fenced transaction, the uplift is supported by ENA Norte's
strong linkages to Panama (BB+/Stable), reflected in the
government's significant influence over operations through ENA.
This supports Fitch's expectation that the government will back
ENA's plans to refinance or fully repay ENA Norte notes at
maturity.
ENA Norte's ratings reflect a strong, mature asset, with a long
operational track record. Despite the project's contractual ability
to adjust tolls for inflation, there has been no increase in
several years. ENA Norte's debt structure is robust as toll revenue
is fully dedicated to meet operational and financial obligations,
allowing the project's gradual deleveraging.
Under FRC, the minimum Loan Life Coverage Ratio (LLCR) bottoms at
0.4x in 2028, indicating the debt is not fully repaid by maturity.
However, the rating is supported by Fitch's expectation that
leverage at debt maturity will be below 1x, as well as ENA's strong
historical liquidity and demonstrated willingness to support timely
debt repayment.
KEY RATING DRIVERS
Revenue Risk - Volume - Midrange
Limited Volume Risk: The corridor operates in Panama City, a strong
reference market, with a long track record of stable traffic and
moderate volatility. It is a key link for commuter and commercial
connectivity within the city's broader road network. However,
recent infrastructure changes have increased competition from free
alternatives and other transport modes.
Revenue Risk - Price - Weaker
Fixed Toll Rates: Although the concessionaire is entitled to
annually adjust toll rates for inflation, toll rates have not been
increased and are not expected to be updated in the medium term.
Infrastructure Dev. & Renewal - Midrange
Suitable Infrastructure Plan: The concession agreements include
clear requirements to fund capex. According to the independent
engineer, Corridor Norte requires major maintenance and is not in
optimal physical condition. The concessionaire has short- and
medium-term maintenance plans in place to perform the work required
in certain sections of the corridor. The capital investment program
is internally funded.
Debt Structure - 1 - Stronger
Conservative Debt Structure: ENA Norte's debt is fixed rate and
benefits from a six-month debt service reserve account covering
interest. Also, dividend distributions are not allowed, as all
excess cash after paying interest is destined to amortize
principal.
Financial Profile
Under Fitch's Rating Case, ENA Norte's minimum LLCR is 0.4x, which
is very weak under Fitch's criteria and indicates the debt is not
fully repaid at the 2028 maturity (about USD36 million is estimated
to remain outstanding). Nonetheless, the rating is supported by
Fitch's expectation that an extension of the concession tenor,
together with low leverage at maturity will allow the
concessionaire to refinance the notes.
PEER GROUP
ENA Norte is comparable to P.A. Concesion Ruta al Mar (Ruta al Mar;
B/RWN), as both projects have similar volume-risk attributes. The
Rating and the Watch Negative reflect expectations that Ruta al Mar
will face cash shortfalls on upcoming payment dates. These may be
initially covered through internal liquidity and letters of credit,
but the transaction is likely to default by August 2027 absent
near-term corrective measures.
By contrast, ENA Norte's rating is supported by the government's
ability to implement credit protection measures and by the
project's expected ability to refinance in the near term—an
outcome made more likely by the recent extension of the concession
term.
RATING SENSITIVITIES
Factors that Could, Individually or Collectively, Lead to Negative
Rating Action/Downgrade
-- Deterioration of Panama's sovereign credit profile or of
government incentive to provide support;
-- Failure to address refinancing needs in the short term or secure
a strategy to guarantee the full amortization of the notes by
maturity.
Factors that Could, Individually or Collectively, Lead to Positive
Rating Action/Upgrade
-- A positive rating action is unlikely due to the short remaining
life of the rated debt and the expectation of early repayment of
the notes.
SECURITY
The Panama-Madden Segment (Corridor Norte) is a 13.5-kilometer
(8.4-mile) toll road. It connects to Phase I at its eastern end and
runs northwest to the Colon Highway. ENA Norte operates the
Corridor Norte toll road concession and has no other material
commercial activities. ENA Norte is a subsidiary of ENA, a wholly
government-owned entity established to acquire companies holding
concessions to build, maintain and operate toll roads in Panama.
PUBLIC RATINGS WITH CREDIT LINKAGE TO OTHER RATINGS
Yes, ENA Norte's rating is linked to Panama's IDR
RATING ACTIONS
Entity / Debt Rating Prior
------------- ------ -----
ENA Norte Trust
ENA Norte Trust/Toll
Revenues - First Lien/
1 LT LT
USD 600 mln 4.95% bond/
note 25-Apr-2028
29248DAA0 LT BB Affirmed BB
ENA Norte Trust/Toll
Revenues - First Lien/
1 Natl LT Natl LT
USD 600 mln 4.95% bond/
note 25-Apr-2028
29248DAA0 Natl LT A+(pan) Affirmed A+(pan)
===============
S U R I N A M E
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SURINAME: Growth is Slowing, Driven by a Decline in Gold, IMF Says
------------------------------------------------------------------
The Executive Board of the International Monetary Fund (IMF)
completed the Article IV Consultation for Suriname. The authorities
have consented to the publication of the Staff Report prepared for
this consultation.
GDP growth is slowing, driven by a decline in gold production.
Having made important earlier progress to restore macroeconomic
stability, fiscal and monetary slippages in 2025 reduced cash
buffers, weakened the currency, and increased inflation back to
double digits. The increase in gross debt to an estimated 106
percent of GDP is mainly due to a successful liability management
operation. The current account deficit is estimated to have
exceeded 30 percent of GDP due to offshore oil field investment
imports mostly financed by FDI.
Non-natural resource growth is estimated to reach 4.7 percent in
2026, supported by positive oil-related sentiment. Oil field
development and relatively stable gold production are expected to
support growth of around 4 percent until 2028, when offshore oil
production is expected to push growth to around 30 percent.
Downside risks include policy slippages, which have the potential
to adversely affect macroeconomic stability. Over a longer horizon,
the potential for further developments of offshore oil and gas
fields represents a material upside risk.
Executive Board Assessment
Executive Directors welcomed the progress achieved under the
Fund‑supported program, concluded in March 2025, while noting
that recent fiscal and monetary slippages have eroded earlier
stabilization gains at a time when Suriname approaches a pivotal
transition to large‑scale oil production. Against this backdrop,
Directors underscored the need for renewed commitment to prudent
and credible macroeconomic policies, strengthened institutions, and
enhanced governance to safeguard macroeconomic stability and
support inclusive growth. Technical support from the Fund and other
development partners will be important to support their policy
endeavors and, in this regard, a number of Directors supported the
authorities’ request for a long‑term macro‑fiscal expert
(LTX).
Directors underscored that improving the fiscal balance is
essential to contain foreign‑exchange and inflationary pressures
and rebuild buffers. While recent liability‑management operations
provide some liquidity in the short‑term, Directors agreed about
the need for significant fiscal adjustment in 2026 to underpin
stability. They encouraged measures to raise the primary surplus
while safeguarding priority investment in human capital, including
by resuming electricity subsidy reductions, restraining the wage
bill, broadening the tax base and improving tax administration
through digitalization.
Directors highlighted that strong institutions are crucial for
effective management of the prospective oil wealth and urged full
and timely implementation of the recently passed public financial
management and Sovereign Wealth Fund legislation to ensure
transparent management of mineral revenues.
Directors emphasized that monetary policy should be firmly oriented
towards maintaining price stability and recommended bringing
reserve money to target through open‑market operations. They
supported plans to transition to a new monetary policy framework
and encouraged efforts to enhance the central bank’s capacity.
Noting the importance of exchange rate flexibility, Directors
recommended limiting FX interventions to a narrow definition of
disorderly market conditions.
Directors called for enhancing financial sector resilience, by
assessing and promoting stronger bank risk‑management practices,
and stepping up supervisory monitoring, including nonbank financial
institutions (NBFIs).
Directors underscored that governance reforms will be crucial to
transparently channel oil revenues. They called for amendments to
the anti‑corruption law, operationalization of the procurement
law, and further strengthening of the AML/CFT framework. Directors
also emphasized the need to strengthen the oversight of SOEs and
enhance data collection.
Directors looked forward to close engagement between the
authorities and the Fund under the Post Financing Assessment
framework.
It is expected that the next Article IV consultation with Suriname
will be held on the standard 12‑month cycle.
*********
S U B S C R I P T I O N I N F O R M A T I O N
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