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260317.mbx T R O U B L E D C O M P A N Y R E P O R T E R L A T I N A M E R I C A Tuesday, March 17, 2026, Vol. 27, No. 54 Headlines A R G E N T I N A ARGENTINA: Missed Early Window to Sell Bonds, Investors Say ARGENTINA: Oil Rally Can Boost Shale Industry, Vista CEO Says ARGENTINA: Textile Crisis Deepens as Cheap Imports Surge PROVINCE OF MENDOZA: S&P Affirms 'B-' LT ICR, Outlook Stable B R A Z I L AZUL S.A.: Fitch Assigns 'B-' Final Long-Term IDRs, Outlook Stable BANCO DA AMAZONIA: Fitch Affirms 'BB' Long-Term IDR, Outlook Stable BANCO DO NORDESTE: Fitch Affirms 'BB' Long-Term IDR, Outlook Stable BANCO NACIONAL: Fitch Affirms 'BB' Long-Term IDR, Outlook Stable CAIXA ECONOMICA: Fitch Affirms 'BB' Long-Term IDR, Outlook Stable OI S.A.: Fitch Cuts IDR to 'RD' on Uncured Payment Default PILGRIM'S PRIDE: Moody's Alters Outlook on 'Ba2' CFR to Positive RUMO S.A.: Fitch Puts 'BB+' Long-Term IDR on Watch Negative SAMARCO MINERACAO: Fitch Affirms 'B' Issuer Default Ratings UNIDAS LOCACOES: Fitch Affirms 'BB-' IDR, Outlook Stable C O L O M B I A COLOMBIA: Tax Burden on Foreign Firms Could Hit 90% M E X I C O DEL MONTE: Lenders Contest Approval of Chapter 11 Settlement V E N E Z U E L A VENEZUELA: Inflation Hits 600% Despite Recovery Promises - - - - - ================= A R G E N T I N A ================= ARGENTINA: Missed Early Window to Sell Bonds, Investors Say ----------------------------------------------------------- David Feliba at Bloomberg News reports that ambitious goals from Argentina's government to bring down country risk are at odds with reality and may have caused it to miss a window to return to debt markets, investors say. Javier Milei's administration passed on a chance to issue in January, deeming it too expensive even as sovereign spreads fell to eight-year lows and anticipation was building, according to Bloomberg News. Now, momentum has faded, with the rally in the nation's bonds stalled and the war in Iran all but shuttering the market for high yield debt sales, Bloomberg News notes. In private meetings with investors in New York, Economy Minister Luis Caputo continued to pitch spreads in the 250 to 300 basis-point range -- about half of where they currently trade, Bloomberg News relays. "Country risk will go to the level that we think it should be. Whether that takes six months, a year or a year and a half, we do not know," he said at an event, Bloomberg News discloses. Investors see those levels as out of reach for now, pointing to low levels of cash reserves at Argentina's Central Bank as the main issue, Bloomberg News says. "Argentina yields are fair," said Katie Exum, Co-Head of Sovereign Research & Strategy at Gramercy Funds Management LLC. "The key issue is organic FX reserve accumulation under the current framework, especially given the country’s maturity profile with both private markets and the IMF in the coming years. Investors need to see policies that credibly and sustainably address those maturities," he added. Bloomberg News relays that Argentina's Central Bank has been consistently purchasing greenbacks, buying up US$2.8 billion since January in a push to build reserves, officials said. Through December, however, the country faces US$15 billion in debt service, including US$4.2 billion on global bonds in July, Bloomberg News notes. That number steepens next year, when the average annual debt service jumps to US$27.7 billion, according to a JPMorgan note from March 9, Bloomberg News says. Bloomberg News discloses that traders are hoping for an issuance later in the year, once volatility linked to the Middle East subsides, to re-establish market access and secure funding before presidential elections come into view in 2027. A liability management similar to Ecuador's would also address investors' main concern: that FX reserves being built could be depleted when maturities come due, especially given looming payments this year and the next, Bloomberg News says. Late last year, the government took several steps seen as precursors to Argentina's first bond sale since the previous administration defaulted in 2020, Bloomberg News recalls. While an issuance was mulled in January, the administration ultimately decided against it, arguing that current macro metrics justify better pricing than yields of about 10 percent, Bloomberg News notes. Alejandro Lew, who had been hired as a deputy to Caputo in November to tap markets, resigned on February 27 after clashing over plans to raise funds in international capital markets, Bloomberg News says. The government has pivoted to alternative financing sources to bridge needs, including potential government-to-government loans, asset sales and privatizations, and local law issuances, Bloomberg News relates. "I would have preferred that they moved forward in January. I respect the team, they’ve done a phenomenal job so far, but it could be a bumpy ride," said Kevin Murphy, senior managing director at Wellington Management, Bloomberg News notes. "Argentine spreads should be narrowing, and what Argentina could probably do to hustle that along is take some steps to get the credit upgraded and make sure they have permanent financing in place," he added. Bloomberg News says that Caputo, who's in New York alongside Milei and other government officials for a three-day event dubbed 'Argentina Week' in a bid to attract investment, said the government is "exploring alternatives of funding." "We will replace what we have to pay to Wall Street, which is not that much, and with that we will improve the technical position so that fundamentals will prevail," he said, Bloomberg News relays. Positioning is another constraint. Many global fixed-income funds have held Argentine bonds since the 2020 restructuring, and exposure is already meaningful, Bloomberg News notes. Last year's volatility ahead of local elections served as a reminder of how quickly sentiment can sour in the country, Bloomberg News says. Even a small transaction -- particularly if structured as a tender or liability management operation -- could help normalise the curve and reduce uncertainty, investors say, Bloomberg News relays. Caputo disagrees, arguing it would not generate immediate cost savings given higher coupons, and instead prefers to meet maturities using accumulated reserves and other financing capabilities, Bloomberg News discloses. Still, most investors expect an issuance in the second half of the year, Bloomberg News relays. With 2027 shaping up as an election year, many argue that consolidating market access beforehand would reduce risk, Bloomberg News notes. The war in Iran has only underscored how exposed high-beta countries remain to sudden shifts in global sentiment, Bloomberg News discloses. "Spreads are not falling further because we haven't had sufficient positive catalysts related to the weakest aspect of the Argentina story, which is FX reserves," said Aaron Gifford, head of Sovereign Research at T. Rowe Price, Bloomberg News relays. "My base case is they'll wait closer to the July payments to reenter the market assuming domestic news flow continues to be positive and yields are still squarely within single digits," he added. 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: Oil Rally Can Boost Shale Industry, Vista CEO Says ------------------------------------------------------------- Jonathan Gilbert at Bloomberg News reports that higher oil prices stemming from the war in Iran could boost capital expenditure in Argentina's thriving shale patch where production is already accelerating, Vista Energy SAB Chief Executive Officer Miguel Galuccio said in an interview. Even before oil rose back to US$100 a barrel, crude drillers in Argentina were poised to ramp up production this year to a level that would put the country inside the top 20 globally, according to Bloomberg News. Those plans, drafted prior to the conflict, accounted for Brent to be around US$65, Bloomberg News notes. That's why Galuccio, who leads Argentina's second biggest shale oil company, thinks investments and exports may move even quicker, Bloomberg News says. "We have a lot of elasticity: We drill a pad of four wells in four months," he said in a Bloomberg Television interview, notes the report. "So if we push a button today because we have more capex because the oil price is higher, in four months we’ll be delivering more to the world." Bloomberg News says that Galuccio clarified that it's still too early to say whether Vista will update its investment guidance for the year, which stands at US$1.5 billion to US$1.6 billion. Vista's US-listed shares are up about 27 percent so far this year and trade near an all-time high at US$62, Bloomberg News relays. Argentina's shale revolution is at a turning point with construction underway of an oil pipeline from the middle of Patagonia to the Atlantic coast projected to be ready by early 2027, Bloomberg News notes. The so-called VMOS project would increase daily shipments of Argentina's light crude by 180,000 barrels and eventually have capacity for more than 700,000, Bloomberg News discloses. That may at least start to put Argentina on traders' radars at a time when Middle Eastern supply volumes are uncertain, Bloomberg News says. "The most important thing is how we recover energy security," the report notes Galuccio as saying. "Where is the rest of the oil going to come from? And I think Argentina has a role as a new player at the global scale," he added. Bloomberg News relays that the next chapter for the shale patch, known locally as Vaca Muerta, may feature a migration of US shale companies that are running out of prime Tier 1 acreage in the Permian Basin. Continental Resources Inc. became the first US shale independent to invest late last year, lured by the free-market policies of President Javier Milei, and more fracking fleets are also arriving, Bloomberg News notes. Galuccio said a bigger wave of entrants that would increase scale and reduce costs is crucial, Bloomberg News discloses. "We've been blessed by the rock," he said, notes the report. "But to accelerate, we need more capital, we need more oil service providers, more product providers, more competition," he added. 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: Textile Crisis Deepens as Cheap Imports Surge -------------------------------------------------------- Sofia Gabriela Martinez at Rio Times Online reports that the Argentina textile crisis unfolding behind the glamour of Buenos Aires Fashion Week is one of the sharpest industrial contractions in Latin America. Since President Javier Milei took office in December 2023, the sector has lost more than 18,000 formal jobs, with employment falling from roughly 121,000 to 102,000 workers, according to Rio Times Online. Factories are running at about one-third of installed capacity, the report notes. A century-old cotton textile firm, Emilio Alal, shuttered both plants in January 2026, dismissing 260 workers and ending over 100 years of production in Argentina's northeast, the report relays. The crisis pits Milei's free-market conviction that Argentine clothing was a "rip-off" against an industry that employs over 500,000 people across its entire value chain, the report says. The Rio Times covers Latin American financial news and the trade policy debates reshaping the region's manufacturing base, the report notes. The Argentina Textile Crisis in Numbers The Milei government cut import duties on clothing and footwear from 35% to 20%, reduced fabric tariffs from 26% to 18%, and raised the duty-free threshold for courier shipments from $50 to $400, the report discloses. Clothing imports by weight more than doubled in the first eight months of 2025 compared to the same period in 2024, the report recalls. China's share of textile and apparel imports climbed from approximately 55% in 2022 to over 70% by 2025, with platforms Shein and Temu becoming household names, the report says. Consumer goods imports overall hit a record $11.4 billion in 2025, up 55% year-on-year, while cross-border e-commerce purchases nearly tripled to $955 million, the report notes. Domestic clothing prices fell 30.6%, a boon for consumers but devastating for producers whose costs -- taxes, labor charges, union obligations, and energy — did not fall with them, the report relates. At the family-owned factory Amesud in San Martín on the outskirts of Buenos Aires, which supplies Nike, Puma, and the local children's brand Mimo & Co., production has dropped to 30% of capacity, the report says. CEO David Kim invested $10 million in imported machinery over the past decade; much of it now sits idle, the report notes. His workforce has shrunk from 420 to roughly 240, and production days from five per week to four, the report discloses. The Federation of Argentine Textile Industries (FITA) reported that sector activity fell 20.5% year-on-year in September 2025 -- the worst decline and lowest level in a decade, the report notes. The Argentine Industrial Union warned that without a parallel competitiveness agenda, the tariff cuts would accelerate closures, the report says. Consumers vs. Producers: The Political Divide The government is unapologetic, notes Rio Times Online. Economy Minister Luis Caputo said publicly that he had never bought clothes in Argentina because prices were extortionate, the report relates. Chief of Cabinet Manuel Adorni accused textile entrepreneurs of being "liars" for failing to explain where jobs were being lost when imported jeans cost $25 versus $100 domestically, the report says. For consumers like 24-year-old Sarah Alcaje in Mendoza, who previously crossed the border to Chile to find affordable clothing, the change is transformative -- she now orders everything from her phone in days, the report discloses. Surveys show 50% of Argentines are struggling to make ends meet, and ultra-cheap imports offer a lifeline that local price-protected manufacturers never did, the report notes. Yet the Argentina textile crisis carries a geopolitical irony that extends beyond economics, the report relays. Milei is Washington's closest ally in Latin America, yet his trade liberalization has made Argentina more dependent on Chinese imports precisely as the Trump administration pressures regional partners to reduce ties with Beijing, the report relates. China's share of Argentine imports is growing while other countries -- including Trump's own United States, France, Indonesia, and South Africa -- are raising barriers against Shein and Temu, the report notes. Priscila Makari of the Fundacion Pro Tejer called the situation "very dramatic," warning that decades of textile expertise, family traditions, and highly skilled workers are being lost permanently. For factory owners like Kim, the question is existential: "We hope we won't be the next to disappear," the report adds. About Argentina Argentina is a country located mostly in the southern half of South America. Its capital is Buenos Aires. Javier Milei is the current president of Argentina after winning the November 19, 2023 general election. He succeeded Alberto Angel Fernandez in the position. Argentina has the third largest economy in Latin America. The country's economy is an upper middle-income economy for fiscal year 2019, according to the World Bank. Historically, however, its economic performance has been very uneven, with high economic growth alternating with severe recessions, income maldistribution and in the recent decades, increasing poverty. In March 2022, the International Monetary Fund (IMF) approved a 30-month arrangement under an Extended Fund Facility for Argentina in the amount of SDR 31.914 billion (equivalent to US$44 billion, or 1000 percent of quota) -- with an approved immediate disbursement of an equivalent of US$9.65 billion. Argentina's IMF-supported program sought to improve public finances and start to reduce persistent high inflation through a multi-pronged strategy. On April 11, 2025, the IMF further approved a 48-month Extended Fund Facility (EFF) arrangement for Argentina totaling US$20 billion (or 479 percent of quota), with an immediate disbursement of US$12 billion, and a first review planned for June 2025 with an associated disbursement of about US$2 billion. The program is expected to help catalyze additional official multilateral and bilateral support, and a timely re-access to international capital markets. Moody's Ratings on July 17, 2025, upgraded Argentina's long-term foreign currency and local currency issuer ratings to Caa1 from Caa3 and changed the outlook to stable from positive. The upgrade reflects Moody's views that the extensive liberalization of exchange and (to a lesser extent) capital controls, alongside a new International Monetary Fund (IMF) program, support the availability of hard currency liquidity and ease pressure on external finances. This reduces the likelihood of a credit event. In January 2025, Moody's raised Argentina's local currency ceiling to B3 from Caa1 and the foreign currency ceiling to Caa1 from Caa3. Fitch Ratings, on May 12, 2025, upgraded Argentina's Long-Term Foreign-Currency and Local-Currency Issuer Default Rating (IDR) to 'CCC+' from 'CCC'. S&P Global Ratings, in February 2025 lowered its local currency sovereign credit ratings on Argentina to 'SD/SD' from 'CCC/C' and its national scale rating to 'SD' from 'raB+'. DBRS, Inc. upgraded Argentina's Long-Term Foreign and Local Currency Issuer Ratings to B (low) from CCC in November 2024. PROVINCE OF MENDOZA: S&P Affirms 'B-' LT ICR, Outlook Stable ------------------------------------------------------------ S&P Global Ratings affirmed its 'B-' long-term issuer credit and issue ratings on the province of Mendoza and its debt. The outlook remains stable. Outlook S&P said, "The stable outlook reflects our expectation for continued cautious budgetary execution, ongoing economic recovery, and balanced fiscal results. We expect resources from the Resarcimiento trust to partially finance high capex, somewhat easing pressure on the budget. In addition, we expect available liquidity along with access to local financing to cover forthcoming debt service obligations. Should Mendoza consider tapping global markets, as other Argentine provinces have in recent months, we assume the terms of any issuance will be consistent with our view of opportunistic debt management." Downside scenario S&P could lower the ratings on the province in the next 12 months if adverse developments, such as increased macroeconomic instability that weighs on the sovereign's fiscal performance or its access to financing, lead the national administration to tighten access to foreign exchange for debt service. This in turn could impair the ability of Argentine local and regional governments (LRGs) to service their foreign-currency debt. Alternatively, S&P could downgrade the province if its fiscal profile deteriorates, heightening liquidity pressures and raising the risk to its timely debt service. Finally, S&P would downgrade the province if it were to undertake a debt management operation (including a debt repurchase) that it deems a distressed exchange, hence tantamount to default, under its methodology. Upside scenario S&P said, "The stand-alone credit profile on Mendoza is one notch above our issuer credit rating on the province. Since Argentine LRGs do not meet the conditions for us to rate them above the sovereign, an upgrade of Mendoza would require an improvement in the predictability of the federal fiscal system and in our transfer and convertibility (T&C) assessment for Argentina--both of which would likely follow improved sovereign creditworthiness." Rationale The 'B-' ratings on the Province of Mendoza and the 'b' stand-alone credit profile reflect our expectation that balanced fiscal performance, along with available liquidity and financing options, will facilitate timely payment of its debt service in the next 12 months. While revenue was lower than S&P expected in 2025, it expects economic growth should contribute to a gradual recovery, while the province contains spending pressures. Cautious financial management in the province has shown its capacity to navigate difficult macroeconomic conditions in recent years, limit fiscal imbalances, and service debt obligations. However, Mendoza's creditworthiness is constrained by a volatile and underfunded institutional framework for Argentine local governments, combined with Argentina's broader macroeconomic challenges. Track record of cautious budgetary and debt management practices amid macroeconomic challenges The institutional framework for Argentine LRGs--a framework that S&P considers to be very volatile and underfunded--limits Mendoza's capacity for fiscal planning and exposes it to the potential transfer of fiscal stress from higher tiers of government. In 2024, this entailed deep cuts in discretionary transfers while national macroeconomic stress weighed on nondiscretionary transfers to all the provinces. Argentina's track record of volatile and inconsistent economic policies has generated macroeconomic imbalances, providing LRGs less space for effective financial planning and impairing their budgetary execution. The shift toward market-oriented economic policies and fiscal "shock therapy" since President Javier Milei's administration assumed office in December 2023 is noteworthy and sets the stage for Argentina to normalize its economy. However, fiscal correction initiatives by the administration (such as cuts in discretionary transfers and infrastructure spending) have increased stress for provincial governments. Despite the limited planning horizon associated with macroeconomic volatility, continuity in local political management and a consensus on policy priorities has enabled Mendoza to establish a track record of cautious budgetary and debt management practices. Governor Alfredo Cornejo is serving his second term and will complete the third consecutive mandate of the Radical Party (UCR) in the province. Following two years of economic contraction, Argentina posted real GDP growth of over 4% in 2025. S&P projects growth of 3%-4% in 2026-2028. It estimates Mendoza's GDP per capita reached US$8,300 in 2025, below the Argentine average of US$14,700. Located in the Andes, Mendoza has huge copper potential, but social resistance has limited mining investment in the past. The provincial administration has taken advantage of the recent stabilization of the Argentine economy and the sovereign's efforts to foster an investor-friendly economy. It's renewing the push to develop the province's mining sector, and there are various exploration projects that could open space for larger-scale copper investment in the future. Copper mining could replace the now-stagnant oil sector. Development of such potential new high-income sectors could, over time, improve the province's trend growth and raise income levels. Fiscal erosion in 2025 reflects uneven economic recovery and short-term challenges from lower inflation S&P projects Mendoza will generate average operating surpluses of 7.7% of operating revenue over 2026-2028, with modestly positive balances after capital expenditure (capex). This is supported by gradually recovering revenue and the province's efforts to contain operating spending. Furthermore, Mendoza benefits from approximately US$1 billion in resources--equivalent to 30% of operating revenue--held within the Resarcimiento trust (formerly for the Portezuelo del Viento hydro plant). This trust, unique to Mendoza, contributes to easing budgetary pressures. The funds from the trust, transferred from the national government during 2019-2024 to settle a judicial claim from the 1990s, are restricted to specific capex projects. Project execution started in late 2025. S&P anticipates these resources, which will be accounted for as capital revenue, will finance the bulk of the capex that it expects (13% of total spending). Lower inflation, clearly positive in the longer term to foster sounder and longer-dated financial planning and public policies, does pose a challenge for provincial budgetary execution in the near term. High and accelerating inflation served as a key adjustment tool during the past years. It supported the average 16% operating surplus over 2023-2024 and 4.3% average surplus after capex, despite an economic contraction of 1.6% on average and fiscal stress from the sovereign over that period. In 2025, real salaries and other spending on goods and services recovered. However, revenue did not, despite headline economic growth, owing to differences in the economic recovery by sector. Meanwhile, the province didn't curtail capex, which remained at 12% of spending. This led to an estimated 7.4% operating surplus and a deficit after capex at 4.4% of total revenue. Liquidity remained robust in 2025, although S&P notes that fiscal deficits were partly covered by suppliers' debt. Our liquidity calculation, which incorporates haircuts to holdings of key assets and our expectations for more solid fiscal performance this year and next, points to full debt service coverage in the next 12 months. That said, there can be intraannual pressures, which S&P expects to be covered with alternative sources of financing. Without access to global capital markets, Mendoza shifted to local markets to cover its financing needs during 2024 and 2025. However, this has shortened the maturity of its debt. Over the next 12 months, Mendoza has US$325 million equivalent in debt service (11% of revenue) coming due, consisting largely of short-term peso-denominated bonds issued locally and the international 2029 bond (total of US$94.6 million due in March and September). S&P said, "We anticipate that Mendoza may take advantage of recently improved investor appetite for Argentine debt, as other Argentine LRG issuers have, by tapping global markets to refinance upcoming maturities and extend the tenor of its debt. However, we don't expect the terms to be consistent with a distressed debt exchange under our methodology. "We expect Mendoza's debt burden will remain moderate, at approximately 20% of operating revenue, a significant decrease from 60% in 2020." While the debt burden, measured in U.S. dollars, has been declining due to limited market access for Mendoza and other local governments in Argentina, there was a small increase in 2025 resulting from the issuance of peso-denominated bonds to service international debt. The province's foreign currency exposure, representing 70% of its total debt, could introduce volatility in the debt. In accordance with S&P's relevant policies and procedures, the Rating Committee was composed of analysts that are qualified to vote in the committee, with sufficient experience to convey the appropriate level of knowledge and understanding of the methodology applicable. At the onset of the committee, the chair confirmed that the information provided to the Rating Committee by the primary analyst had been distributed in a timely manner and was sufficient for Committee members to make an informed decision. After the primary analyst gave opening remarks and explained the recommendation, the Committee discussed key rating factors and critical issues in accordance with the relevant criteria. Qualitative and quantitative risk factors were considered and discussed, looking at track-record and forecasts. The committee's assessment of the key rating factors is reflected in the Rating Component Scores above. The chair ensured every voting member was given the opportunity to articulate his/her opinion. The chair or designee reviewed the draft report to ensure consistency with the Committee decision. The views and the decision of the rating committee are summarized in the above rationale and outlook. The weighting of all rating factors is described in the methodology used in this rating action. Ratings List Ratings Affirmed Mendoza (Province of) Issuer Credit Rating B-/Stable/-- Senior Unsecured B- =========== B R A Z I L =========== AZUL S.A.: Fitch Assigns 'B-' Final Long-Term IDRs, Outlook Stable ------------------------------------------------------------------ Fitch Ratings has assigned Azul S.A. (Azul) a final 'B-' Foreign and Local Currency Issuer Default Ratings (IDRs) and National Long-Term Rating of 'BBB-(bra)'. The Rating Outlook is Stable. Fitch has also assigned Azul Secured Finance LLP's senior secured USD1.375 billion exit finance notes a final 'B-' rating with a Recovery Rating of 'RR4'. These actions follow the completion of Azul's Chapter 11 process. The notes are secured by a first lien on Azul's Brand & IP and by receivables and investments in selected subsidiaries. Azul used proceeds from the exit notes, along with other initiatives, to refinance the USD1.57 billion debtor-in-possession (DIP) financing, pay restructuring expenses, and for general corporate purposes. The 'B-' rating reflects 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, limited liquidity, and the company's post-restructuring debt. Fitch has withdrawn Azul Secured Finance LLP's previous senior secured long-term ratings and Azul Investments LLP's senior unsecured long-term ratings because those notes have been paid in full. Key Rating Drivers Completion of Chapter 11: Azul emerged from Chapter 11 in February 2026, following issuance of the exit notes. The notes are 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), supported the DIP payment. An additional USD100 million from American Airlines, Inc. (B+/Stable) is still pending regulatory approval. Significant Deleveraging: Fitch expects Azul's EBITDA total and net leverage to decline to around 3.0x in 2026 and slightly lower in 2027. 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. It 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, it 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 and cost efficiencies. Fitch forecasts Azul's adjusted EBITDAR to reach around BRL6.8 billion in 2026 and BRL7.6 billion in 2027, an increase from BRL5.2 billion in 2024 and BRL6.6 billion estimated for 2025. The more efficient cost base is driving to higher EBITDAR margins, with Fitch's base case ranging around 30%-33% in 2026-2027. Moderate Growth to Drive FCF: Azul's fleet modernization and growth strategy will be key drivers of FCF. 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 will remain negative in 2026 (BRL1.6 billion) and 2027 (BRL200 million). Limited Financial Flexibility: Azul's weak unencumbered asset base and high share of secured debt remain a financial flexibility constraint. Fitch forecasts readily available liquidity of about BRL800 million at end-2026 (around 4% of LTM revenue), which remains limited and provides little rating headroom. Lower short- to medium-term refinancing risks supported by the post-emergence debt profile and reduced rental payments partially offset this weak liquidity. 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. It 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 an inherently 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 (B+/Stable), United Airlines (BB+/Stable) 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 USD2.5-2.7 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 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 (b+, Moderate), Sector Characteristics (b+, Lower), Market and Competitive Positioning (bb-, Moderate), Diversification and Asset Quality (bb, Moderate), Company Operational Characteristics (bb-, Moderate), Profitability (b-, Moderate), Financial Structure (b-, Higher), and Financial Flexibility (b-, 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. - B+ to CC considerations apply in its analysis and result in an adjustment of -1 notch(es). - The Governance assessment of 'Good' results in no adjustment. - The Operating Environment assessment of 'bb' results in no adjustment. - The SCP is 'b-'. To derive the IDR: Fitch made no adjustments to the SCP resulting in a Foreign and Local Currency IDR of 'B-'. 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. 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' category, but due to the soft cap of Brazil at 'RR4', Azul's senior secured debt is rated 'B-'/'RR4'. 100% of Azul's debt falls under first-priority lien class. RATING SENSITIVITIES 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 4.5 and 4.0, 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 - 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. - Gross and net leverage consistently below 3.0 and 3.5x, 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. Liquidity and Debt Structure Fitch expects Azul's pro forma post-emergence liquidity to improve, reflecting a higher cash balance and reduced near-term refinancing risks. Under the plan, Azul received 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 investments from American Airlines remains subject to regulatory approval and is not incorporated into Fitch's forecasts. Fitch expects pro forma debt 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 will mainly consist of USD1.375 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. The pro forma short- to medium-term refinancing risk, together with lower lease payments, partially offsets this constraint. Azul other liquidity sources include accounts receivable (BRL2.6 billion) and security deposits (BRL4.4 billion) as of Sept. 30, 2025. Fitch's does not include these sources in the liquidity and net leverage metrics. Further liquidity improvement will depend on continued access to new credit lines and stronger FCF 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 ending September 2025, 93% of its revenues came from passengers, while 7% came from cargo and other sources. MACROECONOMIC ASSUMPTIONS AND SECTOR FORECASTS Fitch's latest quarterly Global Corporates Sector Forecasts Monitor data file which aggregates key data points used in its credit analysis. Fitch's macroeconomic forecasts, commodity price assumptions, default rate forecasts, sector key performance indicators and sector-level forecasts are among the data items included. Climate Vulnerability Signals The results of its Climate.VS screener indicate elevated risk for Azul, reflecting the gradually growing costs linked to the decarbonization of the sector. Climate transition risks do not currently have a material influence on the ratings because the potentially disruptive changes due to the transition are unlikely to materialize in the next eight to 10 years. ESG Considerations The highest level of ESG credit relevance is a score of '3', unless otherwise disclosed in this section. A score of '3' means ESG issues are credit-neutral or have only a minimal credit impact on the entity, either due to their nature or the way in which they are being managed by the entity. Fitch's ESG Relevance Scores are not inputs in the rating process; they are an observation on the relevance and materiality of ESG factors in the rating decision. Entity/Debt Rating Recovery Prior ----------- ------ -------- ----- AZUL Investments LLP senior unsecured LT WD Withdrawn C Azul S.A. LT IDR B- New Rating B-(EXP) LC LT IDR B- New Rating B-(EXP) Natl LT BBB-(bra)New Rating Azul Secured Finance LLP senior secured LT B- New Rating RR4 B-(EXP) senior secured LT WD Withdrawn C Senior Secured 2nd Lien LT WD Withdrawn C BANCO DA AMAZONIA: Fitch Affirms 'BB' Long-Term IDR, Outlook Stable ------------------------------------------------------------------- Fitch Ratings has affirmed Banco da Amazonia S.A.'s (BASA) Long-Term Foreign and Local Currency Issuer Default Ratings (IDRs) at 'BB' with a Stable Outlook. In its view, BASA's business activity and funding profile are heavily determined by its development status. Fitch has also affirmed BASA's Long-Term National Rating at 'AAA(bra)'/Stable. Key Rating Drivers Government Support Drives Ratings: BASA's IDRs are driven by its Government Support Rating (GSR) of 'bb' and reflects the potential for support from the Brazilian authorities. The Stable Outlook on BASA's Long-Term IDRs mirrors the Outlook on the Brazilian sovereign rating (BB/Stable). BASA's 'AAA(bra)' Long-Term National Rating is based on potential support and reflects the bank's creditworthiness relative to other issuers in Brazil. Fitch does not assign a Viability Rating to BASA due to its policy role. Fitch will continuously monitor whether the bank maintains its policy role with adequate corporate governance and without compromising the sustainability of its credit metrics. Moderate Ability of Support: BASA's GSR reflects a moderate probability of support from the Brazilian government. The sovereign's propensity to support the bank is high given BASA's key regional policy role and majority state ownership. However, the sovereign's its ability to provide support is constrained, as reflected in its 'BB' Long-Term IDRs. Leading Bank in North of Brazil: BASA is the leading financial institution in the vast, low-density North region of Brazil. Economic activity is concentrated notably in Manaus and Belém and in key logistics corridors. The regional economy relies heavily on commodities and extractive activities (particularly agriculture and mining in Pará), on Manaus' manufacturing base, and logistics corridors for commodity export flows from Brazil's Center-West region. Although the agriculture and industrial sectors play an increasingly prominent role in the region, infrastructure projects, especially energy and sanitation, are gaining traction. BASA acts as an important catalyst for the region's bioeconomy, fostering sustainable green-economy projects linked to the Amazon. Public Mission with Long-Term Diversification: BASA pairs its public development mandate in Brazil's Legal Amazon with a strategy for long-term growth and stronger commercial sustainability. The bank's transformation program aims to modernize all business areas and achieve higher technological and operational standards. BASA's core funding and revenue source is Fundo Constitucional de Financiamento do Norte (FNO). The bank is also expanding beyond credit into acquiring, cards (pilot), insurance and credit consortium products. These initiatives should deepen client relationships, enhance cross-sell and diversify income. Rising credit demand across the Amazon region further supports BASA's efforts to broaden funding sources, reduce reliance on FNO, and increase flexibility in credit allocation. Agribusiness Weights on Asset Quality: BASA's core metric of impaired loans increased to 7.5% in September 2025 from 5.3% at end-2024. The bank's exposure to the agribusiness segment weighted negatively on the metrics, as adverse climate and pricing conditions affected the sector during 2025. NPLs over 90 days were 4.1% for the same period, versus 2.3% a year before. Despite such deterioration, current ratios are in line with other peer's average and still adequate to BASA's rating level. Fitch expects such delinquency to remain at higher levels through the first half of 2026 and start to decline by year-end. Weaker But Adequate Profits: BASA's net profit declined 29.6% in the 3Q25 comparing to the 3Q24 and 6.8% in the yearly comparison. This results from stronger provisioning expenses due to higher delinquency, additional requirements from Resolution CMN 4,966, coupled with stronger expenses on investments and personnel. Fitch's core ratio of operating profit/risk-weighted assets (RWA) declined to 2.3% in the 9M25, versus 2.85% a year before. Still, the ratio is adequate, and Fitch expects it to remain stable through 2026, reflecting ongoing investments and still high delinquency. Adequate Capitalization and Funding Profile: Despite strong loan growth and new accounting rules, the CET1 ratio showed improvement at end-3Q25, rising to 14.2% from 13.7% at year-end 2024, supported by adequate earnings retention and internal capital generation. This provides a reasonable buffer above minimum requirements and against moderate asset quality shocks. BASA also has flexibility to reduce dividend distribution in scenarios of stress. BASA's funding profile is solid, as funds comes mainly from federal funds such as the FNO. However, the bank has been focusing on the diversification of funding sources through market issuances and long-term multilateral funding to support stronger regional credit demand. Rating Sensitivities Factors that Could, Individually or Collectively, Lead to Negative Rating Action/Downgrade - BASA's Long-Term IDRs and GSR would be downgraded if Brazil's sovereign rating is downgraded. - BASA's ratings are also sensitive to a reduced likelihood of government support. This could be indicated by an adverse change in BASA's policy role or a material reduction in government ownership. - BASA's National Long-Term Rating is sensitive to a negative change in Fitch's opinion of the bank's creditworthiness relative to other Brazilian issuers. Factors that Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade - An upgrade of the Long-Term IDRs would require a sovereign upgrade. - BASA's National Long-Term Rating is at the highest level on Fitch's Brazilian national rating scale and cannot be upgraded. Public Ratings with Credit Linkage to other ratings BASA's ratings are equalized with Brazil's sovereign rating. ESG Considerations The highest level of ESG credit relevance is a score of '3', unless otherwise disclosed in this section. A score of '3' means ESG issues are credit-neutral or have only a minimal credit impact on the entity, either due to their nature or the way in which they are being managed by the entity. Fitch's ESG Relevance Scores are not inputs in the rating process; they are an observation on the relevance and materiality of ESG factors in the rating decision. Entity/Debt Rating Prior ----------- ------ ----- Banco da Amazonia S.A. LT IDR BB Affirmed BB ST IDR B Affirmed B LC LT IDR BB Affirmed BB LC ST IDR B Affirmed B Natl LT AAA(bra) Affirmed AAA(bra) Natl ST F1+(bra) Affirmed F1+(bra) Government Support bb Affirmed bb BANCO DO NORDESTE: Fitch Affirms 'BB' Long-Term IDR, Outlook Stable ------------------------------------------------------------------- Fitch Ratings has affirmed Banco do Nordeste do Brasil S.A.'s (BNB) Long-Term Foreign and Local Currency Issuer Default Ratings (IDRs) at 'BB'. The Rating Outlooks are Stable. Fitch has also affirmed BNB's Long-Term National Rating at 'AAA(bra)'/Stable. Key Rating Drivers Government Support Drives Ratings: BNB's IDRs are driven by its Government Support Rating (GSR) of 'bb' and reflects the potential for support from the Brazilian authorities. The Stable Outlook on BNB'S Long-Term IDRs mirrors the Outlook on the Brazilian sovereign rating (BB/Stable). BNB's 'AAA(bra)' Long-Term National Rating is based on potential support and reflects the bank's creditworthiness relative to other issuers in Brazil. Fitch does not assign a Viability Rating to BNB due to its policy role. Fitch continuously monitors BNB to ensure it maintains its policy role with adequate corporate governance, without compromising the sustainability of its credit metrics. Moderate Ability of Support: BNB's GSR reflects a moderate probability of support from the Brazilian government. While the sovereign's propensity to support the bank is high, given BNB's key regional policy role and majority state ownership, its ability to provide support is constrained, as reflected in its 'BB' Long-Term IDRs. Largest Bank in Northeast Brazil: BNB leads financial operations across Brazil's Northeast—a large, populous region where activity concentrates in state capitals and key industrial/logistics hubs. The economy spans services, public administration, agribusiness (irrigated fruit, sugar/ethanol, grains, livestock) and industry (petrochemicals, refining, automotive and wind/solar supply chains). The region is structurally lower-income and climate-sensitive (drought in the semi-arid interior) but benefits from expanding renewable generation, ports and logistics investments, and tourism. BNB plays a central role in channeling development funding to infrastructure, SMEs and energy transition projects. Growing Portfolio: BNB's credit portfolio was BRL 19.1 billion in September 2025, up 28% yoy. Infrastructure projects leaned towards renewable energy, and the bank has focused expansion on both oriented microcredit programs, targeted to micro entrepreneurs and micro agricultural producers - Crediamigo and Agroamigo - increasing its client base and geographic penetration. Around 78% of BNB's credit exposure is tied to the guarantees it extends to the FNE on fund-originated lending, while the remainder comes from risk in its own commercial loan book. FNE's loan book is currently BRL 154 billion, of which around 44% has shared risk with BNB. Well-Managed Asset Quality: Despite recent metric deterioration, BNB's asset-quality remains adequate. The impaired loans ratio (Stage 3 loans/total loans) rose to 6.2% in September 2025 from 4.8% a year earlier; NPLs over 90 days reached 4.2% from 2.2%. Delinquencies rose broadly due to a challenging macroeconomic environment and persistently high interest rates, not bank-specific issues, and compare favorably with industry averages. Fitch expects stabilization this year. BNB has improved charging processes and renegotiations alongside loan book growth. BNB shares 50% of the risk on off-balance-sheet FNE loans. Resilient Profitability: BNB's earnings rose consistently in recent quarters. Fitch's core metric, operating profit/risk-weighted assets, reached 3.9% in September 2025 from 3.6% a year earlier. This reflects solid, stable revenues from FNE administration, fees from shared risk operations (del credere), an expanding credit portfolio with stronger NIM (net interest margin) and increasing services. Strong earnings and efficiency measures plus improved technological processes reduced fixed costs. Coupled with low funding costs and steady FNE fee revenues, this should sustain profitability at current levels. Adequate Capital Buffers: BNB has an adequate buffer over minimum regulatory requirements, with a CET1 ratio of 12.9% at September 2025. The bank also has BRL790 million of Additional Tier 1 (perpetual financial letters) and BRL 1.1 billion of Tier 2 perpetual bonds with an annual phase-out until 2029. In Fitch's view, BNB's good internal capital generation prospects will likely be sufficient to manage the gradual reduction of these instruments and to support the bank's expanding credit portfolio. Ample Funding and Liquidity: BNB's funding sources have been diversifying in the last few years. Although still reliant on FNE, which represents 37% of total funding as of 2025, the bank has been increasing partnerships with multilateral agencies, increasing on-lending. Deposits, subordinated debt and financial treasury bills also composes the bank's funding profile. Fitch believes such diversification is key to the bank's long-term growth strategy. Its liquidity remains adequate, aided by FNE's cash and equivalents position, which is accounted for on BNB's balance sheet and must be invested in government securities. Rating Sensitivities Factors that Could, Individually or Collectively, Lead to Negative Rating Action/Downgrade - BNB's Long-Term IDR would be downgraded if its GSR were downgraded. This would result either from a weaker ability of the government to provide support, as reflected in a sovereign downgrade, or a lower propensity to support. The Outlook on Brazil's sovereign rating is Stable. - BNB's National Long-Term Rating is also sensitive to a negative change in Fitch's opinion of the bank's creditworthiness relative to other Brazilian issuers. Factors that Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade - An upgrade of BNB's Long-Term IDR could follow an upgrade of its GSR. This would result from a stronger ability of the government to provide support, as reflected in a sovereign upgrade. - BNB's National Long-Term Rating is at the highest level on Fitch's Brazilian national rating scale for entities with international ratings equalized with the sovereign and, therefore, cannot be upgraded. Public Ratings with Credit Linkage to other ratings BNB's ratings are equalized with Brazil's sovereign ratings. ESG Considerations The highest level of ESG credit relevance is a score of '3', unless otherwise disclosed in this section. A score of '3' means ESG issues are credit-neutral or have only a minimal credit impact on the entity, either due to their nature or the way in which they are being managed by the entity. Fitch's ESG Relevance Scores are not inputs in the rating process; they are an observation on the relevance and materiality of ESG factors in the rating decision. Entity/Debt Rating Prior ----------- ------ ----- Banco do Nordeste do Brasil S.A. LT IDR BB Affirmed BB ST IDR B Affirmed B LC LT IDR BB Affirmed BB LC ST IDR B Affirmed B Natl LT AAA(bra) Affirmed AAA(bra) Natl ST F1+(bra) Affirmed F1+(bra) Government Support bb Affirmed bb BANCO NACIONAL: Fitch Affirms 'BB' Long-Term IDR, Outlook Stable ---------------------------------------------------------------- Fitch Ratings has affirmed Banco Nacional de Desenvolvimento Economico e Social's (BNDES) Long-Term Foreign and Local Currency Issuer Default Ratings (IDRs) at 'BB'. The Rating Outlook is Stable. Fitch has also affirmed BNDES's long-term National Rating at 'AAA(bra)'/Stable. Key Rating Drivers Ratings Equalized with Sovereign: BNDES's IDRs are driven by its 'bb' Government Support Rating (GSR) and are equalized with Brazil's sovereign ratings, reflecting the potential support from the Brazilian authorities. The Stable Outlook on BNDES's Long-Term IDR mirrors the sovereign's Outlook. BNDES's National Long-Term Rating is the highest possible rating on the Brazilian National Scale. No Viability Rating Assigned: Fitch does not assign a Viability Rating (VR) to BNDES. This is consistent with its approach for policy banks whose operations, risk appetite and balance-sheet evolution are predominantly determined by public policy objectives rather than standalone commercial considerations. BNDES's business model is fully aligned with government policy guidelines, and a significant share of its disbursements is directed toward strategic sectors defined by the federal government. Government Support: The Brazilian authorities have a high propensity to support BNDES, reflecting the bank's full federal ownership, long-standing policy mandate and institutional integration with the Brazilian State. The bank operates as the government's primary development finance institution and plays a central role in implementing industrial, infrastructure, climate and export-support policies. However, Fitch considers the authorities' ability to support as moderate, as indicated by Brazil's Long-Term IDR. Key Policy Role: BNDES's policy relevance reflects the bank's role as the country's main development finance institution. Recent initiatives reinforce BNDES's strategic relevance and ongoing alignment with federal economic policy. These include the operationalization of the Brazil Soberano program, the expansion of climate-transition funding mechanisms, and emergency credit schemes. Fitch will continue to monitor BNDES to ensure it maintains its policy role with adequate corporate governance, without compromising the sustainability of its credit metrics. Sound Profitability and Earnings Profile: BNDES has maintained sound recurring profitability, supported by portfolio expansion, stable spreads and very low credit losses. On a nine-month accumulated basis in 2025, recurring earnings increased year on year to BRL11.2 billion in 9M25 from BRL9.8 billion in 9M24, reflecting higher average earning assets and disciplined cost control. Headline net income remains structurally volatile, largely due to dividend income from equity participations and the timing of non-recurring items. Fitch views this volatility as inherent to BNDES's business model and places greater weight on recurring earnings generation, which continues to support internal capital formation. Very Strong Asset Quality: The expanded portfolio of credit and on-lending operations was approximately BRL616 billion at end-September 2025, representing 68% of total assets. Under the expected-loss framework implemented in 2025, 84% of credit and repass exposures were classified in Stage 1, while only around 2% were classified in Stage 3. While the loan portfolio is concentrated by borrower and sector, Fitch views credit risk as low relative to domestic and international peers, supported by long-tenor project exposures, strong collateralization and the strategic nature of many financed projects. Renegotiated exposures represented approximately 1.15% of the gross portfolio, declining from prior periods as emergency restructuring programs rolled off. Provisioning expenses in 3Q25 were modest at BRL369 million. Capitalization Remains Robust: The total capital ratio was 25.8% at end-September 2025, comfortably above the 10.5% regulatory minimum and providing a buffer of roughly 15 percentage points. Although capital ratios have declined modestly as balance-sheet growth resumed and dividends were paid to the Treasury, Fitch considers current buffers ample relative to risk exposure and policy-bank peers. BNDES's sizeable equity participations portfolio provides additional capital flexibility if leverage is needed, albeit Fitch does not rely on divestments as a core support factor. Ample Liquidity and Stable Funding: Liquidity buffers are sufficient to meet disbursement needs, debt service and dividend payments. Fitch views BNDES's funding and liquidity profile as closely linked to sovereign access and policy decisions, reinforcing the support-driven nature of the ratings. Funding continues to be anchored by long-term sovereign-linked sources, particularly the Fundo de Amparo ao Trabalhador (FAT), which represented approximately 52% of total funding at end-September 2025. Other sources include domestic market instruments, development funds and a growing share of international funding, which nearly doubled year on year. Rating Sensitivities Factors that Could, Individually or Collectively, Lead to Negative Rating Action/Downgrade - Rating downside for the bank's IDRs and GSR would be contingent primarily on a downgrade of Brazil's IDRs. - BNDES's ratings are also sensitive to changes in its strategic importance to the Brazilian government, which Fitch currently does not expect. - The National Long-Term Rating is sensitive to a negative change in Fitch's opinion of the bank's creditworthiness relative to other Brazilian issuers. Factors that Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade - Any upside of BNDES's Long-Term IDRs and GSR is contingent on an upgrade of Brazil's Long-Term IDRs. - BNDES's National Long-Term Rating is at the highest level on Fitch's Brazilian national rating scale for entities with international ratings equalized with the sovereign and, therefore, cannot be upgraded. Public Ratings with Credit Linkage to other ratings BNDES' ratings are equalized with Brazil's sovereign rating. ESG Considerations The highest level of ESG credit relevance is a score of '3', unless otherwise disclosed in this section. A score of '3' means ESG issues are credit-neutral or have only a minimal credit impact on the entity, either due to their nature or the way in which they are being managed by the entity. Fitch's ESG Relevance Scores are not inputs in the rating process; they are an observation on the relevance and materiality of ESG factors in the rating decision. Entity/Debt Rating Prior ----------- ------ ----- Banco Nacional de Desenvolvimento Economico e Social (BNDES) LT IDR BB Affirmed BB ST IDR B Affirmed B LC LT IDR BB Affirmed BB LC ST IDR B Affirmed B Natl LT AAA(bra) Affirmed AAA(bra) Natl ST F1+(bra) Affirmed F1+(bra) Government Support bb Affirmed bb CAIXA ECONOMICA: Fitch Affirms 'BB' Long-Term IDR, Outlook Stable ----------------------------------------------------------------- Fitch Ratings has affirmed Caixa Economica Federal's Long-Term Foreign and Local Currency Issuer Default Ratings (IDRs) at 'BB'. The Rating Outlook is Stable. In addition, Fitch has affirmed Caixa's Government Support Rating (GSR) at 'bb' and Long-Term National rating at 'AAA(bra)'/Outlook Stable. Key Rating Drivers Ratings Driven by GSR: Caixa's IDRs are driven by its 'bb' GSR and aligned with Brazil's 'BB' IDRs. Caixa's National Ratings indicates its adequate credit profile relative to Brazilian peers. Fitch's assessment of support considers Caixa's important policy role and its full ownership by Brazil's Federal Government. Public Policy Role: As a state-owned policy bank, Caixa's IDRs are equalized with Brazil's IDRs, reflecting the government's strong propensity to support the bank. This stems from Caixa's important and distinctive public policy role and the government's long-term, strategic ownership. However, the sovereign's ability to provide support is moderate, given Brazil's current rating level. Fitch does not assign Caixa a Viability Rating (VR) according to the agency's criteria. Fitch does not assign VRs to policy banks with operations primarily driven by their policy roles. Fitch has not seen any structural change in Caixa's overall strategy. Fitch will continue to monitor the institution to ensure it maintains its policy role with appropriate corporate governance and without undermining the sustainability of its credit metrics. Operating Environment: The Operating Environment score for Brazil's banks is based on Brazil's GDP per capita of USD10,000 and Fitch's Operational Risk Index (ORI) of 47.9 (percentile ranking). Fitch projects Brazilian GDP growth of 1.9% in 2026, reflecting normalization in agricultural output along with steady domestic demand. Brazil's Largest Mortgage Lender: Caixa is Brazil's third-largest bank by total assets. It is the leading institution in the mortgage and savings markets, with market shares of 67.7% and 38.8%, respectively, as of 2025. Caixa benefits from several competitive advantages, including its large scale, extensive distribution network, and well-established franchise. These strengths support a diversified and stable revenue base. Strategically, Caixa aims to maintain its position in agribusiness while expanding overall credit origination. Policy Role Drives Risk Profile: Caixa's primary exposure is to credit risk, which constitutes 62% of its asset base in 2025. The institution's underwriting standards have traditionally fluctuated with economic conditions, mirroring its mandate and approach to providing credit to individuals with lower incomes. Nonetheless, Caixa's leadership is progressively refining these standards, demonstrating a subdued risk tolerance, increased prudence, and an enhanced emphasis on financial performance. Asset Quality Benefited by Mortgages: Fitch considers Caixa's asset quality stable despite a challenging operating environment in recent years. The impaired loans ratio (Stage 3 loans/gross) was 6.6% in December 2025, versus 6.3% in 2024 (D-H loans), aligned with other sizable Brazilian banks. The four-year average was 7.1% from 2021- 2024 (D-H loans). NPLs (over 90 days past due) rose to 3.07% in December 2025 from 1.97% in 2024 and 2.16% in 2023, reflecting higher delinquency in non-mortgage segments, while mortgages remained low a 1.18%. Fitch does not expect a marked uptick in impaired loans over the medium to long term, given solid collateral backing. Profitability Below Private Sector Peers: Caixa has traditionally shown lower profitability than peers due to its narrower net interest margins and higher operating costs associated with its policy role and social mandate. In 2025, Caixa's operating profit as a percentage of RWA increase to 1.6% against this ratio averaged 1.2%.in 2021-2024. Fitch expects these ratios to maintain at current levels (between 1.0%-2.0%) through 2026 despite ongoing efforts to improve profitability metrics. Capitalization Adequate: Caixa's common equity Tier 1 (CET1) capital ratio was 14.3% in 2025, in line with 2024 (14.4%). Caixa has taken steps to strengthen its capital structure, such as cutting costs and boosting its share capital. The bank's CET1 ratio (15.0% in 2025) is strong compared to other major Brazilian banks. Fitch expects this ratio to remain stable. In October 2023, Caixa negotiated with the national treasury to extend BRL18.1 billion in payments from the remaining BRL35 billion to 2030, instead of 2026. Strong Funding Profile: The bank's funding base is highly diversified, supported by its extensive network and primarily retail funded. Customer deposits (including savings) and deposit-like local financial bills comprised around 60% of total funding at 2025. The gross loan/deposits ratio was 179% at December 2025, against a four-year average of 166% (2021-2024). Caixa holds a strong position in savings despite recent declines and has increased its issuance of financial bills, especially those backed by real estate credit, where it has significant exposure. Caixa maintained robust liquidity, with its LCR indicator at 268% in 2025 and 243% in 2024. Rating Sensitivities Factors that Could, Individually or Collectively, Lead to Negative Rating Action/Downgrade - Caixa's Long-Term IDRs and National Rating, as well as its GSR, would be downgraded if Brazil's Long-Term IDRs were downgraded; - Caixa's ratings are also sensitive to a reduced propensity of the government to support the bank. This could be indicated by an adverse change in Caixa's policy role or a material reduction in government ownership; - Caixa's National Long-Term Rating is also sensitive to a negative change in Fitch's opinion of the bank's creditworthiness relative to other Brazilian issuers. Factors that Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade - Positive rating actions on Caixa's Long-Term IDRs and GSR are contingent on an upgrade on of Brazil's Long-Term IDRs; - Caixa's National Long-Term Rating is at the highest level on Fitch's Brazilian National Rating scale for entities with international ratings equalized with the sovereign and therefore cannot be upgraded. OTHER DEBT AND ISSUER RATINGS: KEY RATING DRIVERS Fitch has affirmed Caixa's long-term senior unsecured notes at 'BB'. The notes are due 2030. The the notes' rating is at the same level as Caixa's Long-Term Foreign Currency IDR (BB/Stable). The notes are senior obligations, a default on the notes would equate to a default by the bank. Expected recoveries upon default are average. OTHER DEBT AND ISSUER RATINGS: RATING SENSITIVITIES Factors that Could, Individually or Collectively, Lead to Negative Rating Action/Downgrade - The notes' rating could be downgraded in the event of a downgrade of Caixa's IDR. Factors that Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade - The note's rating could be upgraded in the event of an upgrade of Caixa's IDR. VR ADJUSTMENTS Fitch does not assign a VR or score the standalone credit factors. Public Ratings with Credit Linkage to other ratings Caixa's ratings are driven by Brazil's Sovereign Support. ESG Considerations The ESG Relevance Score for Community Relations, Social Access, Affordability is '4[+]'. Caixa's public sector ownership supports its ability to attract low-cost retail deposits, while its policy role ensures it retains a dominant position in the low-income retail mortgage market. These factors considerably boost Caixa's franchise, strengthen its credit profile and have a moderately positive impact on its ratings in conjunction with other factors. Unless otherwise disclosed in this section, the highest level of ESG credit relevance is a score of '3'. This means ESG issues are credit-neutral or have only a minimal credit impact on the entity, either due to their nature or the way in which they are being managed by the entity. Entity/Debt Rating Prior ----------- ------ ----- Caixa Economica Federal LT IDR BB Affirmed BB ST IDR B Affirmed B LC LT IDR BB Affirmed BB LC ST IDR B Affirmed B Natl LT AAA(bra) Affirmed AAA(bra) Natl ST F1+(bra) Affirmed F1+(bra) Government Support bb Affirmed bb senior unsecured LT BB Affirmed BB OI S.A.: Fitch Cuts IDR to 'RD' on Uncured Payment Default ---------------------------------------------------------- Fitch Ratings has downgraded Oi S.A.'s Foreign and Local Currency Long-Term Issuer Default Rating (IDR) to 'RD' (Restricted Default) from 'C', and its National Long-Term rating to 'RD(bra)' from 'C(bra)'. Fitch has affirmed Oi's USD700 million senior secured notes due in June 2027 and USD1.5 billion subordinated secured debt payment-in-kind (PIK) notes due in December 2028 at 'C' with a Recovery Rating of 'RR4'. The downgrade reflects the uncured payment default on interest coupon due Jan. 30, 2026, on the senior secured notes due July 2026. A court order effective January 20 extending the suspension of post-petition claims for a period of additional 90 days, prohibits Oi from making non-essential payments, including debt service, which is scheduled to remain in place until April 20, 2026. While Fitch recognizes the company is legally restricted from making the payment, the non-payment constitutes a breach of the indenture from creditors' perspective. Key Rating Drivers Uncured Missed Interest Payment: A court order has prohibited Oi from paying the Jan. 30, 2026, coupon on its notes due 2026. Fitch views the failure to cure the missed interest payment within the contractual 30-day grace period as an RD under its rating definitions. Pending Sale of V.tal Stake: Oi has scheduled a court hearing to conduct an auction of its 27.26% stake in V.tal on March 5. The company estimates the stake's value at BRL11.0 billion-BRL13.5 billion, while the judicial recovery court has set a minimum price of BRL12.3 billion. Proceeds are expected to be applied to amortize senior secured and subordinated secured loans in line with the priority of payments established under the Plan of Reorganization (POR), which would materially reduce Oi's debt burden. If the auction receives no bids, the company and the court may consider alternative monetization or restructuring options. Real Estate Sales: Oi's plan to dispose real estate assets entails execution risks and timing uncertainty. The migration from a concession to an authorization regime enables Oi to sell up to roughly 7,500 properties, which the company estimates could be worth around BRL5.0 billion. Proceeds are intended to reduce take-or-pay commitments with suppliers, with any residual proceeds directed toward the repayment of new money (if outstanding), and roll-up debt amortization. Asset sales should also lower fixed costs associated with maintaining these properties. Limited Financial Disclosure: Financial disclosure remains limited as the company has not published its 3Q25 results. The company has until end-March to publish its annual financial statements. Peer Analysis Oi's 'RD' IDR reflects the company's uncured payment default on the coupon of its 2026 senior secured notes. Fitch’s Key Rating-Case Assumptions Fitch is unable to provide meaningful rating case assumptions without an assessment of an updated restructuring plan. 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 (ccc-, Moderate), Sector Characteristics (bbb-, Lower), Market and Competitive Positioning (ccc, Moderate), Diversification and Asset Quality (b-, Lower), Company Operational Characteristics (b, Moderate), Profitability (ccc-, Moderate), Financial Structure (ccc-, Higher), and Financial Flexibility (ccc-, Higher). - 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. - Assessments of the quantitative financial subfactors also include bespoke calculations. - The Governance assessment of 'Material Failures' results in no adjustment. - The Operating Environment assessment of 'bb' results in no adjustment. - The other risk elements adjustment applies and results in an adjustment of -3 notches. - The SCP is 'd or rd'. - Fitch made no adjustments to the SCP, resulting in a FC and LC IDR of 'RD'. Recovery Analysis Fitch is using the liquidation value approach to estimate Recovery Ratings for Oi's 2027 senior and the 2028 subordinated secured bonds, respectively. The divestment program is ongoing, with the sale of the stake in V.tal, valued between BRL11 billion and BRL13.5 billion, expected for 2026. Fitch forecasts recovery rates commensurate with 'RR1' for Oi's BRL4.4 billion first lien senior secured debt and with 'RR2' for approximately BRL8 billion in second lien secured debt. All these secured debt instrument recovery ratings are capped at 'C'/'RR4' as Oi operates predominantly in Brazil, a group D country in accordance with Fitch's Country Specific Treatment of Recovery Ratings Criteria. This limitation constrains the upward notching of instruments to the IDR. RATING SENSITIVITIES Factors that Could, Individually or Collectively, Lead to Negative Rating Action/Downgrade - Entrance into receivership, liquidation, or other formal wind-up procedure or the entity otherwise ceases business, would lead to a downgrade to 'D'. Factors that Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade - Upgrades are unlikely in the short term. In the medium to long term, the rating could be upgraded if Oi sells a substantial part of its asset pool and reduces the overall debt that exempts the company to solicit waivers. Liquidity and Debt Structure Oi's liquidity is expected to remain critical until the company completes the sale of its 27.3% stake in V.tal, valued at BRL12.3 billion. As of the last public disclosure (June 30, 2025; 2Q25), total debt was BRL35.3 billion in face value. The capital structure is predominantly non-cash-pay: about 90% of total debt accrues PIK interest, and most hard-currency debt bears zero cash interest. The main higher-cost instrument is the roll-up debt of BRL8.0 billion (22% of total), which accrues interest at 8.5% PIK. Issuer Profile Oi provides IT and telecom services for corporate customers, using its own copper telecommunications infrastructure and an affiliate fiber-optic network. MACROECONOMIC ASSUMPTIONS AND SECTOR FORECASTS Fitch's latest quarterly Global Corporates Sector Forecasts Monitor data file which aggregates key data points used in its credit analysis. Fitch's macroeconomic forecasts, commodity price assumptions, default rate forecasts, sector key performance indicators and sector-level forecasts are among the data items included. Climate Vulnerability Signals The results of its Climate.VS screener did not indicate an elevated risk for Oi S.A. ESG Considerations Oi S.A. has an ESG Relevance Score of '4' for Management Strategy as it remains uncertain how management will succeed in turning around the business and stop the cash burn, which has a negative impact on the credit profile, and is relevant to the rating[s] in conjunction with other factors. Oi S.A. has an ESG Relevance Score of '4' for Financial Transparency in light of the non-publication of 3Q25 financial statements, ended Sept. 30, 2025, which has a negative impact on the credit profile, and is relevant to the ratings in conjunction with other factors. The highest level of ESG credit relevance is a score of '3', unless otherwise disclosed in this section. A score of '3' means ESG issues are credit-neutral or have only a minimal credit impact on the entity, either due to their nature or the way in which they are being managed by the entity. Fitch's ESG Relevance Scores are not inputs in the rating process; they are an observation on the relevance and materiality of ESG factors in the rating decision. Entity/Debt Rating Recovery Prior ----------- ------ -------- ----- Oi S.A. LT IDR RD Downgrade C LC LT IDR RD Downgrade C Natl LT RD(bra) Downgrade C(bra) senior secured LT C Affirmed RR4 C PILGRIM'S PRIDE: Moody's Alters Outlook on 'Ba2' CFR to Positive ---------------------------------------------------------------- Moody's Ratings affirmed Pilgrim's Pride Corporation's ("Pilgrim's") Ba2 Corporate Family Rating, Ba2-PD Probability of Default Rating, Ba2 senior unsecured notes rating, and (P)Ba2 senior unsecured shelf rating. The speculative grade liquidity rating is unchanged at SGL-1. Moody's revised the outlook to positive from stable. The outlook change to positive from stable reflects Pilgrim's continued emphasis on maintaining a conservative financial policy, low leverage, and strong free cash flow. Supported by a sustained recovery from the trough of the recent poultry cycle, Pilgrim's Moody's adjusted debt to EBITDA leverage improved to 1.5x in fiscal 2025 from 3.3x in fiscal 2023. Moody's expects leverage to remain below 2.0x over the next 12 to 18 months, driven primarily by continued strong though moderating conditions in the poultry market. In addition, the potential for higher grain costs appears limited, given relatively high corn stock-to-use levels, increased soybean supplies due to favorable weather in South America, a relatively slow pace of US soybean exports, and above-average wheat production. The positive outlook also incorporates Pilgrim's improved sales and operating performance in Europe and Mexico, management's strategy to further expand its geographic footprint in fresh and prepared foods, and meaningful capital spending to improve cost efficiency that should improve margins throughout the poultry cycle. Moody's affirmed the existing ratings because poultry prices have begun to decline from their cyclical peak reached in fiscal 2025, and the company's position below its stated leverage target creates some re-leveraging risk. The volatility and uncertainty within the poultry market for the next 12 to 18 months will also test the company's ability to sustain lower leverage. While poultry demand in the US is expected to remain resilient, supported by chicken's position as a relatively affordable alternative to pork and beef, declining prices adversely affected Pilgrim's operating performance in the fourth quarter of 2025. On a Moody's adjusted basis, 4Q25 EBITDA declined by 24% compared with 4Q24. The majority of the decline was attributable to lower poultry prices in the US and Mexico, partially offset by stronger performance in Pilgrim's US prepared foods business and its European operations. The SGL-1 rating reflects Pilgrim's Pride's very good liquidity. As of December 28, 2025, the company had roughly $1.8 billion of liquidity comprised of $640 million of cash, $846 million of availability on a $850 million senior unsecured revolving credit facility that expires in October 2028, $202.5 million equivalent of availability on a GBP150.0 million multicurrency unsecured revolving credit facility expiring in June 2027 through its Moy Park subsidiary, $71.2 million of availability through a MXP 1.3 billion credit facility expiring in December 2028, and $83.8 million of availability through a MXP 1.5 billion credit facility expiring in October 2030. The company has no note maturities until 2031 and the cash sources provide good flexibility to fund investments and working capital, and support operations if the poultry cycle weakens. RATINGS RATIONALE Pilgrim's Ba2 CFR is supported by its position among the world's largest chicken processors, a growing packaged foods business, strong free cash flow, low leverage and very good liquidity. The company's operating strategy is focused on maximizing profitability and earnings stability by maintaining operational excellence, improving the diversity of the product portfolio and focusing on key customers. These focused efforts allow the company to at least partially offset sector headwinds caused by external factors such as grain prices, biological risks, trade restrictions and government policies that are largely out of its control. These strengths are balanced against the company's focus in the cyclical chicken processing industry, which is characterized by volatile earnings, modest profit margins, and high operating leverage. The inherent earnings, financial leverage and free cash flow volatility requires very good liquidity to manage through weak earnings and cash flow periods. At the top of the cycle, Moody's expects financial leverage to be very modest relative to comparably rated companies. Conversely, at the bottom of the cycle, the company can often have financial leverage that is well outside Moody's central expectations for the rating for a limited period of time. Pilgrim's credit metrics have improved meaningfully alongside the recovery in the poultry cycle over the last few years, with debt to EBITDA leverage at the low end of the range Moody's expects for the rating. The financial policy of maintaining good access to cash and committed external sources of liquidity helps the company manage through the earnings volatility. Pilgrim's 1.1x net debt-to-EBITDA leverage (based on the company's calculation) is well below the company's 2-3x target range, indicating that leverage could rise over the next few years. Moody's evaluate Pilgrim's credit profile on a stand-alone basis because the debt is not guaranteed by its 80%-shareholder JBS S.A. Thus, the ratings are not directly affected by the credit profile of JBS. However, the strategic importance of Pilgrim's to JBS, as it provides protein and geographic diversification, and potentially earnings stability, is a positive credit factor because Pilgrim's does not pay a recurring dividend, at least a portion of earnings are being reinvested in Pilgrim's growth and there is likely incentive for JBS to support Pilgrim's through temporary cyclical slowdowns if necessary. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS The ratings could be upgraded if the company enhances earnings stability through improvements in business and product mix, debt to EBITDA is sustained below 2.0x, there is consistent improvement in the EBITDA margin, the company generates consistent and comfortably positive free cash flow, and liquidity sources (cash plus unused revolver commitment availability) are maintained consistently above $1 billion. The ratings could be downgraded if deteriorating industry conditions or weak execution leads to prolonged period of lower earnings or weak free cash flow. The ratings could also be downgraded if debt-to-EBITDA is sustained above 3x, the company pursues leveraged acquisitions or share buybacks, liquidity deteriorates such as cash plus unused revolver commitment below $750 million or if legal, governance or other challenges at related entities, including JBS S.A., negatively affect the risk profile of Pilgrim's. The principal methodology used in these ratings was Protein and Agriculture published in October 2025. The net effect of any adjustments applied to rating factor scores or scorecard outputs under the primary methodology(ies), if any, was not material to the ratings addressed in this announcement. Headquartered in Greeley, Colorado, Pilgrim's Pride Corporation (NASDAQ: PPC) is the second largest chicken processor in the world, with operations in the United States, U.K., European Union, Mexico and Puerto Rico. The company produces, processes, markets and distributes fresh, frozen and value-added chicken products to foodservice customers, distributors and retail operators worldwide. Pilgrim's also is a leading integrated prepared pork supplier in Europe. For the last 12-month period ended December 28, 2025, Pilgrim's revenues totaled $18.5 billion. Pilgrim's Pride is controlled by Sao Paulo, Brazil based JBS S.A., the largest processor of animal protein in the world. Since June 2025 JBS N.V. (Baa3 Stable) became the new parent company of JBS S.A. As of December 28, 2025, JBS S.A. owns in excess of 80% of Pilgrim's outstanding common stock. RUMO S.A.: Fitch Puts 'BB+' Long-Term IDR on Watch Negative ----------------------------------------------------------- Fitch Ratings has placed Rumo S.A.'s (Rumo) Long-Term Foreign Currency (FC) and Local Currency (LC) Issuer Default Ratings (IDRs) and its unsecured bonds, issued by Rumo Luxembourg S.a.r.l., rated 'BB+', on Rating Watch Negative (RWN). Fitch has also placed Rumo's and its subsidiaries' National Scale Long-Term Ratings and unsecured debentures of 'AAA(bra)' on RWN. The RWN follows the downgrade and assignment of a RWN to Cosan S.A. (LC IDR: BB-/RWN) on Feb. 27. Rumo's rating is constrained by Cosan's under the Parent and Subsidiary Linkage Rating Criteria. Rumo's IDRs are capped at up to two notches above Cosan's. A downgrade of Cosan would lead to a downgrade of Rumo's IDRs. Rumo's National Scale Long-Term Ratings could be downgraded by more than one notch. Rumo's ratings reflect its strong position as a leading Brazilian railroad operator, with solid and growing operating cash flow and strong liquidity, despite expected negative FCF. The ratings also reflect Fitch's expectation that leverage will remain within the rating category, even during a high investment period and elevated dividends. Agribusiness concentration is partly offset by rail's competitive advantages in Brazil's cargo transport. Key Rating Drivers Credit Linkage Incorporated: Rumo's RWN reflects the RWN on Cosan's ratings. Fitch views Rumo's legal and regulatory ring-fencing to limit Cosan's access to its cash as porous, as debt instruments limit capital reductions and leverage metrics. Fitch assesses Cosan's control of Rumo as porous and Rumo's funding and cash management as insulated. This supports a rating differential of up to two notches above Cosan's 'BB-'/RWN. Sustained high dividend distributions or related party transactions that weaken Rumo's financial flexibility or capital structure could pressure its ratings. Rumo's and its subsidiaries' ratings are equalized mainly because of strong legal ties, including debt guarantees and cross-default clauses. Medium or high strategic and operational incentives for Rumo to support its subsidiaries also reinforce the ratings equalization. Capex and Dividends Pressure FCF: Obligations related to Rumo Malha Paulista's concession renewal and the significant capex requirements for the extension of Rumo Malha Norte will likely pressure FCF. Fitch projects high capex of around BRL19.3 billion during 2026-2028 and a 95% dividend payout ratio will lead to negative FCF of roughly BRL5.6 billion over the period. Fitch expects the Rumo Malha Norte expansion to begin operations in 2027. In 2025, the company distributed extraordinary dividends of BRL1.5 billion. Fitch's base case considers a 95% dividend payout starting in 2026. Leverage Profile: Rumo is expected to keep its leverage within its rating category, even during the high investment period and elevated dividends. Fitch's base case scenario forecasts improvements in Rumo's operating cash flow generation, with gains of scale from investments, resulting in net debt/EBITDAR limited at 3.2x in 2026-2028. Gross leverage should decline toward 3.8x over the medium term, compared with an average of 4.6x from 2021 to 2024. Solid Industry Fundamentals: Railroad sector risks are low due to strong demand and limited competition. Rumo benefits from its market position as the main rail transport company in southern and central-western Brazil. It has a large network of five concessions, which allows it to operate more than 13,500 km of tracks and access to three ports. The company's low-cost structure gives it solid competitive advantages over truck transport, supporting stable demand, mitigating operating concentration in agribusiness, and limiting volume volatility over cycles. Strengthening Business Profile: The Rumo Malha Central line project and expansion of Rumo Malha Norte up to Lucas do Rio Verde are credit positives, as these stretches drive opportunities for capturing greater grain volumes. Fitch expects Rumo to transport 87 billion revenue ton kilometers (RTK) in 2026, up from 84 billion RTK in 2025. The potential non-renewal of Rumo Malha Sul and Rumo Malha Oeste in 2027 is expected to have a limited impact on credit metrics. These businesses contribute approximately 10% of consolidated EBITDAR and have lower operating margins (around 35%) compared to the consolidated margins of 50% to 55%. Moderate Volume Growth: Volumes should increase 3.9% in 2026 and decrease about 7.7% to around 81 billion RTK in 2027 due to the concessions' expiration. Volumes are projected to increase by an average of 1.8% in 2028 and 2029, driven by Brazil's strong agricultural sector. Brazilian GDP is expected to grow 1.9% in 2026 and 1.8% in 2027. Rumo's primary cargo is agricultural products, predominately exports of soybean and soymeal (43% in 2025), corn (26%), fertilizers (7%) and sugar (7%). Strong Cash Generation: Rumo's EBITDAR margin is likely to increase to 58%-62% over the coming three years, as the group may release the Southern and Western operations which are less profitable than the consolidated business. Fitch's rating case forecasts EBITDAR and cash flow from operations (CFFO) of BRL8.9 billion and BRL6.1 billion, respectively, in 2026 and BRL9.0 billion and BRL6.1 billion, respectively, in 2027, under Fitch's criteria definitions. Peer Analysis Rumo's Local Currency IDR is below those of other Class I railroad companies in North America, which are generally rated in the high 'BBB' to low 'A' rating categories. Rumo's 'BB+' rating negatively compares with Mexico-based Grupo Ferroviario Mexicano, S.A. de C.V.'s 'BBB+' and U.S.-based Union Pacific Corporation's (UPC) 'A-'. Although the three railroads operate with similar business profiles and competitive positions in their respective markets, Grupo Ferroviario Mexicano and Union Pacific are more mature, more geographically diversified — operating in Mexican, U.S. and Canadian markets — and less leveraged. Rumo's Local Currency IDR is lower than that of Brazilian peer MRS Logistica S.A. (MRS; Local Currency IDR BBB-/Stable). MRS is the best-positioned railroad in Brazil due to its more resilient cargo profile, track record of positive FCF, captive customer base which also are shareholders, and lower net leverage. Rumo's Local Currency IDR is the same as Hidrovias do Brasil S.A.'s (Hidrovias; BB+/Stable). Hidrovias' Standalone Credit Profile is lower than its railroad peers' because of its medium-sized scale, hydrological risks and the weakest capital structure in the peer group. The ratings benefit from support from its parent, Ultrapar. Fitch’s Key Rating-Case Assumptions - Release of Rumo Malha Sul and Rumo Malha Oeste concessions when they expire in 2027; - Agricultural volumes in the North, Paulista, Central and South networks increase by an average of 8.5% in 2026 and 2027; - Industrial volumes increase by the projected GDP growth rate of 1.9% in 2026 and 1.8% in 2027; - Average tariffs increase by 4.5% in 2026 and 4.0% in 2027; - Total capex of BRL19.3 billion from 2026 to 2028, with BRL6.2 billion in 2025; - Dividends corresponding to 95% of net income from 2026 onward. 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 (a-, Lower), Market and Competitive Positioning (bbb+, Higher), Diversification and Asset Quality (bbb, Moderate), Company Operational Characteristics (bbb, Moderate), Profitability (b+, Moderate), Financial Structure (bb, Higher), and Financial Flexibility (bb, Moderate). - The quantitative financial subfactors are based on custom CRT financial period parameters: 20% for the forecast year 2025, 40% for the forecast year 2026 and 40% for the forecast year 2027. - The Governance assessment of 'Good' results in no adjustment. - The Operating Environment assessment of 'bb' results in no adjustment. - The SCP is 'bb+'. To derive the IDR: - Application of Fitch's Parent and Subsidiary Linkage Rating Criteria results in a consolidated profile +2 approach. RATING SENSITIVITIES Factors that Could, Individually or Collectively, Lead to Negative Rating Action/Downgrade - An inability to finance capex with long-term and low-cost debt, pressuring Rumo's debt amortization schedule; - Weakening of its EBITDAR margins; - Gross adjusted leverage trends above 4.0x on a sustained basis; - Net adjusted leverage trends above 3.5x on a sustained basis; - If Cosan's IDRs are downgraded to 'B+' or lower, and Cosan's access to Rumo's cash remains unchanged, Rumo's IDRs would be downgraded to Cosan's rating plus two notches. Factors that Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade - A removal of the RWN would be linked to the removal of the RWN on Cosan's ratings or if Cosan's access to Rumo's cash becomes insulated by legal ring-fencing. Liquidity and Debt Structure Fitch expects Rumo's liquidity to remain healthy during the higher investment cycle. The cash to short-term debt ratio has been strong, above 3.0x since 2019. Rumo's ability to raise long-term funds to finance negative FCF and preserve its liquidity is an important credit consideration. On Sept. 30, 2025, Rumo had cash and equivalents of BRL7.2 billion, which favorably compares with BRL3.2 billion debt maturing in the short term. Consolidated total debt was BRL26.4 billion, mainly consisting of debentures of BRL14.2 billion, senior notes of BRL5.3 billion (net of derivatives) and debt with Banco Nacional de Desenvolvimento Economico e Social of BRL1.5 billion. Issuer Profile Rumo, Latin America's largest independent rail-based logistics operator, provides railroad transportation, port terminal, and warehousing services. Its service area extends over Mato Grosso, Sao Paulo and other southern states in Brazil. The company is the logistics arm of Cosan Group. Summary of Financial Adjustments - Confirming (reverse factoring) operations adjusted in Rumo's debt; - Restricted cash, including long-term amounts, treated as readily available liquidity; - Net derivatives adjusted in relation to debt; - Dividends from associates and minorities included in EBITDA adjustments; - Lease and concession expenses treated as operating expenses, affecting EBITDA. MACROECONOMIC ASSUMPTIONS AND SECTOR FORECASTS Fitch's latest quarterly Global Corporates Sector Forecasts Monitor data file which aggregates key data points used in its credit analysis. Fitch's macroeconomic forecasts, commodity price assumptions, default rate forecasts, sector key performance indicators and sector-level forecasts are among the data items included. Climate Vulnerability Signals The results of its Climate.VS screener did not indicate an elevated risk for Rumo S.A. ESG Considerations The highest level of ESG credit relevance is a score of '3', unless otherwise disclosed in this section. A score of '3' means ESG issues are credit-neutral or have only a minimal credit impact on the entity, either due to their nature or the way in which they are being managed by the entity. Fitch's ESG Relevance Scores are not inputs in the rating process; they are an observation on the relevance and materiality of ESG factors in the rating decision. Entity/Debt Rating Prior ----------- ------ ----- Rumo Luxembourg S.a.r.l senior unsecured LT BB+ Rating Watch On BB+ Rumo Malha Paulista S.A. Natl LT AAA(bra) Rating Watch On AAA(bra) senior unsecured Natl LT AAA(bra) Rating Watch On AAA(bra) Rumo Malha Norte S.A. Natl LT AAA(bra) Rating Watch On AAA(bra) Rumo Malha Sul S.A. Natl LT AAA(bra) Rating Watch On AAA(bra) Rumo S.A. LT IDR BB+ Rating Watch On BB+ LC LT IDR BB+ Rating Watch On BB+ Natl LT AAA(bra) Rating Watch On AAA(bra) senior unsecured Natl LT AAA(bra) Rating Watch On AAA(bra) SAMARCO MINERACAO: Fitch Affirms 'B' Issuer Default Ratings ----------------------------------------------------------- Fitch Ratings has affirmed the ratings of seven Latin American (LatAm) mining companies and their related subsidiaries. These actions follow the update of Fitch's "Corporate Rating Criteria" and the "Sector Navigators Addendum to the Corporate Rating Criteria" on Jan. 9, 2026. The companies' ratings and Outlooks are unaffected by the criteria changes. Key Rating Drivers For full key ratings drivers for each issuer, see the RACs listed below: Vale S.A. "Fitch Upgrades Vale IDRs to 'BBB+'; Outlook Stable," dated Oct. 23, 2025 Vale Base Metals Ltd. "Fitch Upgrades Vale Base Metals to 'BBB+'; Outlook Stable," dated Oct. 23, 2025 Industrias Penoles, S.A.B. de C.V. "Fitch Affirms Industrias Penoles at 'BBB'; Outlook Stable," dated Sept. 12, 2025 Nexa Resources S.A. "Fitch Affirms Nexa Resources at 'BBB-'; Outlook Stable," dated Sept. 17, 2025 Aris Mining Corp. "Fitch Affirms Aris Mining at 'B+'; Outlook Stable," dated June 18, 2025 Ero Copper Corp. "Fitch Upgrades Ero Copper's Ratings to 'B+'; Outlook Stable," dated Dec. 19, 2025 Samarco Mineracao S.A. "Fitch Upgrades Samarco's IDRs to 'B'; Outlook Positive," dated Sept. 4, 2025 Peer Analysis Refer to the RAC for each issuer. Fitch’s Key Rating-Case Assumptions Refer to the RAC for each issuer. Corporate Rating Tool Inputs and Scores Vale S.A. 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 (bbb, Higher), Sector Characteristics (bbb, Moderate), Market and Competitive Positioning (bbb+, Moderate), Diversification and Asset Quality (bbb+, Moderate), Company Operational Characteristics (a-, Higher), Profitability (a-, Moderate), Financial Structure (a, Moderate), and Financial Flexibility (a, Lower). - The quantitative financial subfactors are based on custom CRT financial period parameters: 10% weight for the historical year 2024, 10% for the forecast year 2025, 30% for the forecast year 2026, 30% for the forecast year 2027 and 20% for the forecast year 2028. - The Governance Impact assessment of 'Good' results in no adjustment. - The Operating Environment Impact assessment of 'bbb+' results in no adjustment. - The SCP is 'bbb+'. Fitch made no adjustments to the SCP, resulting in a Foreign and Local Currency IDR 'BBB+'; Outlook Stable. Vale Base Metals Ltd. 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 (bbb, Higher), Sector Characteristics (bbb+, Moderate), Market and Competitive Positioning (bbb-, Moderate), Diversification and Asset Quality (bbb, Moderate), Company Operational Characteristics (bbb-, Higher), Profitability (bb+, Moderate), Financial Structure (a+, Lower), and Financial Flexibility (bbb-, Moderate). - The quantitative financial subfactors are based on custom CRT financial period parameters: 10% weight for the historical year 2024, 10% for the forecast year 2025, 30% for the forecast year 2026, 30% for the forecast year 2027 and 20% for the forecast year 2028. - The Governance assessment of 'Good' results in no adjustment. - The Operating Environment assessment of 'a-' results in no adjustment. - The SCP is 'bbb-'. Application of Fitch's Parent and Subsidiary Linkage Rating Criteria results in an equalized approach with a Foreign and Local Currency IDR 'BBB'; Outlook Stable. Industrias Penoles, S.A.B. de C.V. 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 (bbb, Lower), Sector Characteristics (bbb, Moderate), Market and Competitive Positioning (bbb, Moderate), Diversification and Asset Quality (bbb-, Moderate), Company Operational Characteristics (bb+, Higher), Profitability (bbb-, Moderate), Financial Structure (a, Moderate), and Financial Flexibility (bbb+, Moderate). - The quantitative financial subfactors are based on custom CRT financial period parameters: 10% weight for the historical year 2024, 10% for the forecast year 2025, 30% for the forecast year 2026, 30% for the forecast year 2027 and 20% for the forecast year 2028. - The Governance assessment of 'Good' results in no adjustment. - The Operating Environment assessment of 'bbb+' results in no adjustment. - The SCP is 'bbb'. Fitch made no adjustments to the SCP, resulting in a Foreign and Local Currency IDR 'BBB'; Outlook Stable. Nexa Resources S.A. 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 (bbb-, Moderate), Sector Characteristics (bbb, Moderate), Market and Competitive Positioning (bb, Moderate), Diversification and Asset Quality (bb, Higher), Company Operational Characteristics (bb+, Lower), Profitability (bbb-, Moderate), Financial Structure (bbb, Moderate), and Financial Flexibility (bb, Moderate). - The quantitative financial subfactors are based on custom CRT financial period parameters: 10% weight for the historical year 2024, 10% for the forecast year 2025, 30% for the forecast year 2026, 30% for the forecast year 2027 and 20% for the forecast year 2028. - The Governance assessment of 'Good' results in no adjustment. - The Operating Environment assessment of 'bbb' results in no adjustment. - The SCP is 'bb+'. Application of Fitch's Parent and Subsidiary Linkage Rating Criteria results in an equalized approach with a Foreign and Local Currency IDR 'BBB-'; Outlook Stable. Aris Mining Corp. 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+, Lower), Sector Characteristics (bb, Moderate), Market and Competitive Positioning (b, Higher), Diversification and Asset Quality (b, Higher), Company Operational Characteristics (bb-, Moderate), Profitability (bb, Moderate), Financial Structure (bbb+, Lower), and Financial Flexibility (bb, Moderate). - The quantitative financial subfactors are based on custom CRT financial period parameters: 10% weight for the historical year 2024, 10% for the forecast year 2025, 30% for the forecast year 2026, 30% for the forecast year 2027 and 20% for the forecast year 2028. - B+ to CC considerations apply in its analysis and result in no adjustment. - The Governance Impact assessment of 'Good' results in no adjustment. - The Operating Environment Impact assessment of 'bbb' results in no adjustment. - The SCP is 'b+'. Fitch made no adjustments to the SCP, resulting in a Foreign and Local Currency IDR 'B+'; Outlook Stable. Ero Copper Corp. 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+, Lower), Sector Characteristics (bbb-, Moderate), Market and Competitive Positioning (b, Higher), Diversification and Asset Quality (b, Higher), Company Operational Characteristics (bb, Moderate), Profitability (bbb, Moderate), Financial Structure (a, Lower), and Financial Flexibility (bb, Moderate). - The quantitative financial subfactors are based on custom CRT financial period parameters: 10% weight for the historical year 2024, 10% for the forecast year 2025, 30% for the forecast year 2026, 30% for the forecast year 2027 and 20% for the forecast year 2028. - B+ to CC considerations apply in its analysis and result in no adjustment. - The Governance assessment of 'Good' results in no adjustment. - The Operating Environment assessment of 'bbb' results in no adjustment. - The SCP is 'b+'. Fitch made no adjustments to the SCP, resulting in a Foreign and Local Currency IDR 'B+'; Outlook Stable. Samarco Mineracao S.A. 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, Lower), Sector Characteristics (ccc, Moderate), Market and Competitive Positioning (bb, Moderate), Diversification and Asset Quality (bb, Moderate), Company Operational Characteristics (bb, Moderate), Profitability (b+, Moderate), Financial Structure (b-, Higher), and Financial Flexibility (bb+, Moderate). - The quantitative financial subfactors are based on custom CRT financial period parameters: 10% weight for the historical year 2024, 10% for the forecast year 2025, 30% for the forecast year 2026, 30% for the forecast year 2027 and 20% for the forecast year 2028. - B+ to CC considerations apply in its analysis and result in no adjustment. - The Governance assessment of 'Good' results in no adjustment. - The Operating Environment assessment of 'bbb' results in no adjustment. - The SCP is 'b'. Fitch made no adjustments to the SCP, resulting in a Foreign and Local Currency IDR 'B'; Outlook Positive. RATING SENSITIVITIES Refer to the RAC for each issuer. Liquidity and Debt Structure Refer to the RAC for each issuer. Issuer Profile Refer to the RAC for each issuer. Summary of Financial Adjustments Refer to the RAC for each issuer. Sources of Information Refer to the RAC for each issuer. MACROECONOMIC ASSUMPTIONS AND SECTOR FORECASTS Fitch's latest quarterly Global Corporates Sector Forecasts Monitor data file which aggregates key data points used in its credit analysis. Fitch's macroeconomic forecasts, commodity price assumptions, default rate forecasts, sector key performance indicators and sector-level forecasts are among the data items included. Climate Vulnerability Signals The results of its Climate.VS screener did not indicate an elevated risk for Vale S.A., Vale Base Metals Ltd., Industrias Penoles S.A.B. de C.V., Nexa Resources S.A., Aris Mining Corp., Ero Copper Corp or Samarco Mineracao S.A. ESG Considerations Refer to the RAC for each issuer. Entity/Debt Rating Recovery Prior ----------- ------ -------- ----- Vale Base Metals Limited LT IDR BBB+ Affirmed BBB+ LC LT IDR BBB+ Affirmed BBB+ Samarco Mineracao S.A. LT IDR B Affirmed B LC LT IDR B Affirmed B senior unsecured LT B Affirmed RR4 B Industrias Penoles, S.A.B. de C.V. LT IDR BBB Affirmed BBB LC LT IDR BBB Affirmed BBB senior unsecured LT BBB Affirmed BBB Nexa Resources S.A. LT IDR BBB- Affirmed BBB- LC LT IDR BBB- Affirmed BBB- senior unsecured LT BBB- Affirmed BBB- Ero Copper Corp. LT IDR B+ Affirmed B+ senior unsecured LT B+ Affirmed RR4 B+ Vale Overseas Limited senior unsecured LT BBB+ Affirmed BBB+ Aris Mining Corporation LT IDR B+ Affirmed B+ LC LT IDR B+ Affirmed B+ senior unsecured LT B+ Affirmed RR4 B+ Vale S.A. LT IDR BBB+ Affirmed BBB+ LC LT IDR BBB+ Affirmed BBB+ senior unsecured LT BBB+ Affirmed BBB+ Vale Canada Limited senior unsecured LT BBB+ Affirmed BBB+ UNIDAS LOCACOES: Fitch Affirms 'BB-' IDR, Outlook Stable -------------------------------------------------------- Fitch Ratings has affirmed five Latam transportation companies' and their related subsidiaries' ratings. These actions follow the update of Fitch's 'Corporate Rating Criteria' and the 'Sector Navigators Addendum to the Corporate Rating Criteria' on Jan. 9, 2026. The companies' ratings and Outlooks are unaffected by the criteria changes. Key Rating Drivers For full key ratings drivers for each issuer, see the RACs listed below: MRS Logistica S.A. "Fitch Affirms MRS Logistica's Ratings at 'BB+' and 'AAA(bra)'; Outlook Stable", dated Dec. 23, 2025 Grupo Ferroviario Mexicano, S.A. de C.V. "Fitch Affirms GFM at 'BBB+' and GMexico Transportes and Ferromex at 'AAA(mex)'; Outlook Stable", dated Nov. 20, 2025 Hidrovias do Brasil S.A. "Fitch Upgrades Hidrovias' Ratings; Outlook Stable", dated July 15, 2025 Localiza Rent a Car S.A. "Fitch Affirms Localiza's IDRs at 'BB+'; Outlook Stable", dated Oct. 3, 2025 Unidas Locacoes E Servicos S/A "Fitch Revises Unidas' Outlook to Positive; Affirms IDRs at 'BB-'", dated Dec. 8, 2025 Peer Analysis Refer to the RAC for each issuer. Fitch’s Key Rating-Case Assumptions Refer to the RAC for each issuer. Corporate Rating Tool Inputs and Scores MRS Logistica S.A. 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 (bbb, Lower), Sector Characteristics (a-, Moderate), Market and Competitive Positioning (bbb+, Higher), Diversification and Asset Quality (bbb, Moderate), Company Operational Characteristics (bbb+, Moderate), Profitability (bbb, Moderate), Financial Structure (bb, Higher), and Financial Flexibility (bb+, Moderate). - The quantitative financial subfactors are based on custom CRT financial period parameters: 10% weight for the historical year 2024, 15% for the forecast year 2025, 15% for the forecast year 2026, 30% for the forecast year 2027 and 30% for the forecast year 2028. - Assessments of the quantitative financial subfactors also include bespoke calculations. - The Governance Impact assessment of 'Good' results in no adjustment. - The Operating Environment Impact assessment of 'bb' results in no adjustment. - The SCP is 'bbb-'. To derive the IDR: - Fitch made no adjustments to the SCP, resulting in a Local Currency IDR of 'BBB-'. - Country ceiling considerations apply and result in an adjustment of -1 notch to the Foreign Currency IDR. Grupo Ferroviario Mexicano, S.A. de C.V. 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 (bbb, Lower), Sector Characteristics (a-, Moderate), Market and Competitive Positioning (bbb+, Higher), Diversification and Asset Quality (a-, Moderate), Company Operational Characteristics (bbb+, Moderate), Profitability (bbb, Moderate), Financial Structure (bbb+, Higher), and Financial Flexibility (bbb, Moderate). - The quantitative financial subfactors are based on standard CRT financial period parameters: 20% weight for the latest historical year 2025, 40% for the forecast year 2026 and 40% for the forecast year 2027. - The Governance assessment of 'Good' results in no adjustment. - The Operating Environment assessment of 'bbb-' results in no adjustment. - The SCP is 'bbb+'. To derive the Foreign and Local Currency IDRs: - Application of Fitch's "Parent-Subsidiary Linkage Rating Criteria" results in a consolidated approach. Hidrovias do Brasil S.A. 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 (bbb, Lower), Sector Characteristics (bb+, Moderate), Market and Competitive Positioning (bb-, Moderate), Diversification and Asset Quality (bb, Moderate), Company Operational Characteristics (bb+, Higher), Profitability (b-, Moderate), Financial Structure (b, Moderate), and Financial Flexibility (bb+, Moderate). - The quantitative financial subfactors are based on custom CRT financial period parameters: 20% weight for the forecast year 2025, 40% for the forecast year 2026 and 40% for the forecast year 2027. - The Governance assessment of 'Good' results in no adjustment. - The Operating Environment assessment of 'bb' results in no adjustment. - The SCP is 'bb-'. To derive the IDR: Fitch made adjustments to the SCP, due to its linkage to its parent company, Ultrapar Participações S.A.'s (Ultrapar), resulting in a Local and Foreign Currency IDRs of 'BB+'. Localiza Rent a Car S.A. 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 (bbb, Lower), Sector Characteristics (bb+, Moderate), Market and Competitive Positioning (bbb-, Higher), Diversification and Asset Quality (bbb-, Moderate), Company Operational Characteristics (bbb-, Moderate), Profitability (bb-, Moderate), Financial Structure (bbb-, Moderate), and Financial Flexibility (bb, Moderate). - The quantitative financial subfactors are based on custom CRT financial period parameters: 20% weight for the forecast year 2025, 40% for the forecast year 2026 and 40% for the forecast year 2027. - Assessments of the quantitative financial subfactors also include bespoke calculations. - The Governance Impact assessment of 'Good' results in no adjustment. - The Operating Environment Impact assessment of 'bb' results in no adjustment. - The SCP is 'bb+'. To derive the IDR: - Fitch made no adjustments to the SCP, resulting in Local and Foreign Currency IDRs of 'BB+'. Unidas Locacoes E Servicos S/A 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 (bbb, Lower), Sector Characteristics (bb+, Moderate), Market and Competitive Positioning (bb+, Higher), Diversification and Asset Quality (bbb-, Moderate), Company Operational Characteristics (bbb-, Moderate), Profitability (bb-, Moderate), Financial Structure (b+, Higher), and Financial Flexibility (bb-, 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. - Assessments of the quantitative financial subfactors also include bespoke calculations. - The Governance Impact assessment of 'Good' results in no adjustment. - The Operating Environment Impact assessment of 'bb' results in no adjustment. - The SCP is 'bb-'. To derive the IDR: - Fitch made no adjustments to the SCP, resulting in Local and Foreign Currency IDRs of 'BB-'. Recovery Analysis No recovery analysis. RATING SENSITIVITIES Refer to the RAC for each issuer. Liquidity and Debt Structure Refer to the RAC for each issuer. Issuer Profile Refer to the RAC for each issuer. Summary of Financial Adjustments Refer to the RAC for each issuer. Sources of Information Refer to the RAC for each issuer. MACROECONOMIC ASSUMPTIONS AND SECTOR FORECASTS Fitch's latest quarterly Global Corporates Sector Forecasts Monitor data file which aggregates key data points used in its credit analysis. Fitch's macroeconomic forecasts, commodity price assumptions, default rate forecasts, sector key performance indicators and sector-level forecasts are among the data items included. Climate Vulnerability Signals The results of its Climate.VS screener did not indicate an elevated risk for MRS Logistica S.A., Grupo Ferroviario Mexicano, S.A. de C.V., Hidrovias do Brasil S.A., Localiza Rent a Car S.A.and Unidas Locacoes E Servicos S/A. ESG Considerations Refer to the RAC for each issuer. Entity/Debt Rating Prior ----------- ------ ----- Unidas Locacoes E Servicos S/A LT IDR BB- Affirmed BB- LC LT IDR BB- Affirmed BB- Localiza Rent a Car S.A. LT IDR BB+ Affirmed BB+ LC LT IDR BB+ Affirmed BB+ Hidrovias International Finance S.a.r.l. senior unsecured LT BB+ Affirmed BB+ MRS Logistica S.A. LT IDR BB+ Affirmed BB+ LC LT IDR BBB- Affirmed BBB- Hidrovias do Brasil S.A. LT IDR BB+ Affirmed BB+ LC LT IDR BB+ Affirmed BB+ Grupo Ferroviario Mexicano, S.A. de C.V. LT IDR BBB+ Affirmed BBB+ LC LT IDR BBB+ Affirmed BBB+ =============== C O L O M B I A =============== COLOMBIA: Tax Burden on Foreign Firms Could Hit 90% --------------------------------------------------- Florencia Belen Ruiz at Rio Times Online reports that the Colombia tax burden on foreign companies has reached levels that industry groups say are unprecedented among OECD members. Under emergency Decree 0173, signed on February 24, branches and permanent establishments of foreign companies are now subject to the same wealth tax that the Petro government imposed on domestic firms -- adding another layer to a cumulative fiscal load that analysts calculate can exceed 90% of profits for companies in the extractive and financial sectors, according to Rio Times Online. The decree targets approximately 15,000 companies with net assets of COP10.5 billion ($2.4 million) or more, measured as of March 1, 2026, and aims to raise COP8 trillion ($1.8 billion) to fund disaster relief after catastrophic flooding triggered by extraordinary rainfall across several regions, the report notes. How the Colombia Tax Burden Stacks Up According to the report, he problem is not any single tax but their accumulation. The base corporate income tax rate is 35%, but extractive and financial sector companies pay surcharges that push the rate to 40%, the report relates. When a company distributes profits, dividends face an additional 20% withholding tax for foreign shareholders, the report discloses. On top of this sits the 19% value-added tax, the municipal industry and commerce tax (ICA) ranging from 0.4% to 1.2% depending on jurisdiction, a capital gains tax, a financial transactions levy, and mandatory parafiscal contributions that together exceed 4% of payroll, the report says. The new emergency wealth tax adds rates of 0.5% for most companies and 1.6% for financial institutions and extractive firms — crucially, the tax is not deductible against income tax, making it a pure addition to the effective rate, the report relays. Foreign branches must file their declaration by April 30, with 50% due immediately and the balance on June 1 — different dates from domestic companies, creating additional administrative complexity, the report notes. Lisandro Junco, former director of Colombia's tax authority DIAN, warned that the Colombia tax burden is now actively pushing capital out, the report discloses. Companies that can relocate will do so, he argued, and those that cannot will resort to aggressive tax planning in anticipation of further changes, the report says. Bruce Mac Master, president of the national industrialists’ association ANDI, called the decree an affront to the principle that there should be no taxation without representation, noting that foreign branches had no voice in the emergency legislation process, the report relates. Cesar Cermeno of the Universidad de los Andes added that the effective burden extends beyond taxes to include what he described as extremely high administrative compliance costs -- a factor that does not appear in rate calculations but weighs heavily on investment decisions, the report notes. Emergency Justification vs. Investment Reality The government's defense rests on genuine emergency. Decree 0150 of February 2026 declared an economic and social emergency after severe flooding devastated regions including Cordoba, and the wealth tax is presented as a temporary measure to fund reconstruction, the report discloses. The decree includes anti-avoidance provisions requiring companies that split through corporate spin-offs between February 25 and March 1 to aggregate their net assets, closing a potential loophole, the report says. Health sector companies, state-supervised entities, and public utilities in affected municipalities are exempt, the report relays. Holland & Knight analysis notes the decree will face constitutional review by the Corte Constitucional, which previously suspended parts of an earlier emergency tax decree (Decree 1474/2025), creating additional legal uncertainty about whether the current measure will survive judicial scrutiny, the report notes. For foreign investors, the issue is cumulative and structural. Colombia’s fiscal position requires a deficit correction from 6.4% to 5.1% of GDP in 2026, growth forecasts have been revised down from 3% to 2.6%, and inflation expectations have risen from 3.2% to 5.8%, the report notes. Emergency taxes that are presented as temporary have a pattern of becoming permanent in Colombia — the wealth tax itself began as a one-time measure in 2019 before being made permanent by the 2022 tax reform, the report says. For companies already operating under surcharges in the hydrocarbon and banking sectors, the latest decree turns a difficult fiscal environment into one that multiple analysts describe as the most punitive in the OECD, the report adds. As reported in the Troubled Company Reporter-Latin America in December 2025, Fitch Ratings has downgraded Colombia's Long-Term Foreign Currency (LT FC) Issuer Default Rating (IDR) to 'BB' from 'BB+'. The Rating Outlook is Stable following the downgrade. =========== M E X I C O =========== DEL MONTE: Lenders Contest Approval of Chapter 11 Settlement ------------------------------------------------------------ Emily Lever of Law360 reports that the minority lenders in the bankruptcy case of Del Monte Foods have taken their fight over a creditor settlement to the appellate level. The lenders recently filed an appeal challenging a bankruptcy judge's approval of the agreement, arguing it waives causes of action that could be worth more than $200 million. The deal was approved last February 2026 by the U.S. Bankruptcy Court for the District of New Jersey, which found the settlement to be a reasonable compromise among competing creditor groups. But dissenting lenders have consistently argued that the agreement undervalues potential claims related to the company's prior financial dealings, the report states. In their appeal, the lenders are asking the U.S. District Court for the District of New Jersey to reconsider the ruling. They contend the settlement unfairly releases valuable claims and could limit recoveries available to certain creditors in the restructuring process, according to report. 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. About Fresh Del Monte Fresh Del Monte Produce Inc. is a globally recognized producer and distributor of high-quality fresh and fresh-cut fruits and vegetables, supported by a vertically integrated operating model and sales in more than 80 countries. The company is also a leading supplier of prepared foods in Europe, Africa, and the Middle East. Fresh Del Monte's global portfolio is marketed under the DEL MONTE(R) brand, a long-standing emblem of product quality, innovation, and dependability for more than 135 years. ================= V E N E Z U E L A ================= VENEZUELA: Inflation Hits 600% Despite Recovery Promises -------------------------------------------------------- Florencia Belen Ruiz at Rio Times Online reports that the Venezuela inflation crisis is deepening rather than easing in the two months since the Trump administration captured Nicolas Maduro and promised economic recovery. Annual inflation accelerated to approximately 600% in February from 475% in December, the IMF's projection of the world's highest rate for 2026 now materializing in real time. Oil production -- the petrostate's lifeline -- fell 21% in January to 780,000 barrels per day, choking the dollar supply that Venezuelans depend on for daily transactions in an economy where the official minimum wage stands at 130 bolivares, approximately $0.30 per month, according to Rio Times Online. A Meganalisis survey found that roughly 80% of residents say their economic situation has not improved since the start of the year, the report notes. Why Venezuela Inflation Keeps Climbing The mechanics are straightforward: Venezuela's economy runs on dollars, and there are not enough of them, the report discloses. Oil exports -- historically the dominant source of foreign exchange -- have plummeted under sanctions and infrastructure decay, the report says. Production has fallen from over 3 million barrels per day in the early 2000s to under 800,000 today, less than a third of pre-Maduro levels, the report notes. The dollar auction system introduced by the interim government of Delcy Rodriguez after Maduro's capture distributes oil revenue through private banks, which sell dollars to businesses, the report relays. Banks report selling at roughly 500 bolivares per dollar, above the official rate but below the parallel market rate of approximately 600, the report discloses. However, sources told Bloomberg that many companies actually pay rates much closer to the parallel market, creating a gap between official statistics and street reality that distorts pricing across the economy, the report says. JPMorgan analyst Katherine Marney noted that Venezuela inflation is likely to remain elevated until dollar supply increases and exchange rates converge, recalling that when Venezuela could export oil freely in mid-2024, the rates converged and annual inflation dropped to 35%, the report notes. The problem now is that sanctions remain partially in place, infrastructure has deteriorated, and the political transition has not yet translated into the investment needed to restore production capacity, the report says. Per-capita GDP has collapsed from approximately $15,500 to about $2,500, one of the largest peacetime economic contractions in modern history, the report relays. The monthly cost of a basic food basket for a family of five stands at $677 according to the Caracas-based research group Cendas, while most workers earn a fraction of that through informal jobs and remittances from the nearly 8 million Venezuelans who emigrated under Maduro, the report discloses. Hope vs. Reality on the Ground Some analysts see reasons for cautious optimism, notes the report. Datanalisis president Luis Vicente Leon projected that oil revenues could nearly double in the second half of 2026, potentially driving a 17% increase in consumer demand, the report relays. Over 75% of Venezuelans believe their situation will improve soon, even if only 7% have seen actual improvement so far, the report notes. The interim government has reformed the decades-old hydrocarbon law to give officials flexibility on taxes and royalties, aiming to attract the private capital that Trump says will take Venezuelan production to record levels, the report discloses. US Energy Secretary Chris Wright and Interior Secretary Doug Burgum visited Caracas recently, and a new mining law targets the organized crime and environmental degradation that took hold after the state confiscated international mining assets years ago, the report says. But patience is wearing thin. Protests increased 53% in January, with approximately 50 linked to labor demands. Workers, pensioners, and students mobilized nationwide in March demanding wages that reflect the cost of living rather than the symbolic minimum, the report relays. Ecoanalitica director Alejandro Grisanti warned that political progress is outpacing economic progress and that the process must accelerate, the report notes. Eduardo Fortuny of Dinámica Venezuela cautioned that excessive optimism risks converting into frustration: two out of three families now expect relatives to return from abroad, but the conditions for that return -- jobs, housing, functioning public services -- do not yet exist, the report relates. The gap between what Venezuelans expect and what the post-Maduro economy can deliver remains the defining risk of the transition, the report adds. About Venezuela Venezuela, officially the Bolivarian Republic of Venezuela, is a country on the northern coast of South America, consisting of a continental landmass and a large number of small islands and islets in the Caribbean sea, according to globalinsolvency.com. The capital is the city of Caracas, the report notes. Hugo Chavez was president to Venezuela from 1999 to 2013. The Chavez presidency was plagued with challenges, which included a 2002 coup d'etat, a 2002 national strike and a 2004 recall referendum. Nicolas Maduro was elected president in 2013 after the death of Chavez. Maduro won a second term at the May 2018 Venezuela elections, but this result has been challenged by countries including Argentina, Chile, Colombia, Brazil, Canada, Germany, France and the United States who deemed it fraudulent and moved to recognize Juan Guaido as president. The presidencies of Chavez and Maduro have challenged Venezuela with a socioeconomic and political crisis. It is marked by hyperinflation, climbing hunger, poverty, disease, crime and death rates, social unrest, corruption and emigration from the country. Moody's has withdrawn its 'C' local currency and foreign currency ceilings for Venezuela in September 2022. Standard & Poors has also withdrawn its 'SD/D' foreign currency sovereign credit ratings and 'CCC-/C' local currency ratings on Venezuela in September 2021 due to lack of sufficient information. Fitch withdrew its own 'RD/C' Issuer Default Ratings on Venezuela in June 2019 due to the imposition of U.S. sanctions on the country's government. ********* S U B S C R I P T I O N I N F O R M A T I O N Troubled Company Reporter-Latin America is a daily newsletter co-published by Bankruptcy Creditors' Service, Inc., Fairless Hills, Pennsylvania, USA, and Beard Group, Inc., Washington, D.C., USA, Marites O. Claro, Joy A. Agravante, Rousel Elaine T. Fernandez, Julie Anne L. Toledo, Ivy B. Magdadaro, and Peter A. Chapman, Editors. Copyright 2026. All rights reserved. ISSN 1529-2746. This material is copyrighted and any commercial use, resale or publication in any form (including e-mail forwarding, electronic re-mailing and photocopying) is strictly prohibited without prior written permission of the publishers. Information contained herein is obtained from sources believed to be reliable, but is not guaranteed. The TCR Latin America subscription rate is US$775 per half-year, delivered via e-mail. Additional e-mail subscriptions for members of the same firm for the term of the initial subscription or balance thereof are US$25 each. For subscription information, contact Peter A. Chapman at 215-945-7000. . * * * End of Transmission * * *