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T R O U B L E D C O M P A N Y R E P O R T E R
L A T I N A M E R I C A
Monday, April 6, 2026, Vol. 27, No. 68
Headlines
B R A Z I L
AEGEA SANEAMENTO: S&P Lowers ICR to 'B+', On CreditWatch Negative
C H I L E
EXPORTADORA SANTA: Declared Bankrupt; Owes CLP55BB
J A M A I C A
JAMAICA: BoJ Allocates $1BB in Liquidity Support to Institutions
JAMAICA: STATIN Reports Slight Dip in Unemployment
M E X I C O
DEL MONTE: Lenders' Appeal Bid to Be Decided Soon
P E R U
RUTAS DE LIMA: S&P Lowers Issue Rating to 'D'
P U E R T O R I C O
BUILDERS HOLDING: Court Says MAFRE Entitled to Summary Judgment
NBG MACHINE: Jose Diaz Crespo Named Subchapter V Trustee
PUERTO RICO: Bankruptcy Stymies Paul Weiss, ACLU Fee Bids
S U R I N A M E
SURINAME: Moody's Affirms 'Caa1' Issuer & Senior Unsecured Ratings
T R I N I D A D A N D T O B A G O
CARIBBEAN AIRLINES: Seeks New Government Bailout
X X X X X X X X
LATAM: IDB and Saudi Eksab Sign MoU to Advance Equity Investment
LATAM: Oil Surge Elicits Tough Love From Trump's Allies in Region
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B R A Z I L
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AEGEA SANEAMENTO: S&P Lowers ICR to 'B+', On CreditWatch Negative
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S&P Global Ratings lowered its issuer credit and issue ratings on
Brazil-based water utility Aegea Saneamento e Participacoes S.A. to
'B+' from 'BB-' and placed the ratings on CreditWatch with negative
implications. In addition, S&P's recovery rating on Aegea Finance
S.a.r.l.'s bonds remains '3'.
The CreditWatch negative indicates the possibility of a
multiple-notch downgrade of Aegea if it fails to publish its
financial statements within the seven-business-day cure period and
if that triggers debt acceleration. S&P could also lower the
ratings if accounting revisions lead to a deterioration in key
credit metrics beyond its current expectations.
S&P's downgrade of Aegea reflects uncertainties around its
financial reporting and the potential impact of the restatements on
its credit metrics.
Aegea announced it will delay publishing its 2025 financial
statements after a review of certain accounting practices and
estimates related to its customer portfolio, leading to the
re-presentation of its 2024 financial statements.
The company indicated the adjustments are accounting in nature and
should not affect cash flow, liquidity, or financial covenants
compliance. Given Aegea's complex structure and our reliance on
analytical adjustments, the restatements increase uncertainty
around the company's already constrained credit metrics and, to a
lesser extent, the risk of debt acceleration if financial
statements aren't published within the seven-business-day cure
period for its stricter debentures documentation.
The company indicated that the adjustments are accounting in nature
and should not affect cash flow, liquidity, or financial covenants
compliance. However, Aegea already operates with a complex group
structure, and S&P rely on analytical adjustments to consolidate
cash flow and debt across key operating subsidiaries.
The restatements increase uncertainty around the company's
financial reporting and could raise the risk of weaker credit
metrics once the revised figures are released given that the
company's leveraged credit metrics, with debt to EBITDA at 4.3x and
funds from operation (FFO) to debt at 14% as of September 2025.
This leaves limited headroom for further deterioration depending on
the outcome of the restatements, or if the starting point of
leverage in 2025 results in a prolonged period of leverage above
the expected levels.
In addition, if the company fails to publish its financial
statements within the seven-business-day cure period under its
affirmative covenants of its seventh and ninth debentures (totaling
R$1.1 billion), that could trigger debt acceleration provisions.
This event follows a first restatement--the company also restated
its 2022-2024 financial statements in September 2025 after a
reassessment of the accounting treatment applied to unrealized
profits in related-party transactions, particularly in construction
activities under sanitation concession contracts. In our view,
multiple restatements may raise concerns regarding the reliability
and consistency of the company's financial reporting. This is
relevant from a credit perspective, given Aegea's already complex
corporate and financing structure, including multiple holding
entities and nonconsolidated debt at key subsidiaries, and
continued aggressive growth. As a result, these developments weigh
negatively on our assessment of management and governance regarding
transparency, reporting practices, and risk management culture.
Environmental, social, and governance (ESG) credit factors for this
change in credit rating/outlook and/or CreditWatch status:
-- Governance - Risk management, culture, and oversight
-- Governance - Transparency and reporting
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C H I L E
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EXPORTADORA SANTA: Declared Bankrupt; Owes CLP55BB
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Eurofruit reports that one of Chile's leading fruit exporters,
Exportadora Santa Cruz, has filed for bankruptcy with debts of
around CLP55 billion.
It follows a second failed reorganization process embarked on by
the company in less than a year, prompting creditors to request
forced liquidation due to noncompliance with the reorganisation
plan, according to the report.
The 1st Civil Court of Santiago declared bankruptcy on March 18 and
scheduled a hearing for April 30 to finalize the voting rights
process and the constitutive creditors' meeting, the report notes.
In mid-March an order was issued to seize all the company's assets,
including its books and documents, and the company has been
prohibited from making payments or delivering goods to the debtor,
recounts the report.
Founded in 1990, Exportadora Santa Cruz was a leading exporter of
avocados, kiwifruit, citrus and blueberries to global markets, with
a particular focus on avocado exports to the US. In recent years,
it had suffered a string of financial challenges, including high
debt, a fire at its facilities in 2021, and logistical challenges,
Eurofruit discloses.
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J A M A I C A
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JAMAICA: BoJ Allocates $1BB in Liquidity Support to Institutions
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RJR News reports that the Bank of Jamaica has disclosed five bids,
totaling $3 billion, were submitted by financial institutions
seeking liquidity support.
However, the central bank allocated just one billion dollars at an
average interest rate of 5.87 per cent per annum, according to RJR
News.
The central bank provides short-term cash support to institutions
through repurchase agreements, also known as repos, the report
notes.
These arrangements involve the sale of a financial instrument with
an agreement to repurchase it at a higher price at a later date,
the report adds.
About Jamaica
Jamaica is an island country situated in the Caribbean Sea. Jamaica
is an upper-middle income country with an economy heavily dependent
on tourism. Other major sectors of the Jamaican economy include
agriculture, mining, manufacturing, petroleum refining, financial
and insurance services.
On Feb. 21, 2025, Fitch Ratings affirmed Jamaica's Long-Term
Foreign-Currency Issuer Default Rating (IDR) at 'BB-', with a
positive rating outlook. In October 2023, Moody's upgraded the
Government of Jamaica's long-term issuer and senior unsecured
ratings to B1 from B2, and senior unsecured shelf rating to (P)B1
from (P)B2. The outlook has been changed to positive from stable.
In September 2024, S&P affirmed 'BB-/B' longterm foreign and local
currency sovereign credit ratings on Jamaica and revised outlook to
positive.
JAMAICA: STATIN Reports Slight Dip in Unemployment
--------------------------------------------------
RJR News reports that Statistical Institute of Jamaica (STATIN) is
reporting a slight decline in unemployment, even as fewer people
were employed at the start of the year.
According to the January 2026 Labour Force Survey, the unemployment
rate fell to 3.6 per cent, down from 3.7 per cent a year earlier,
according to RJR News.
The number of unemployed persons declined to 51,500, the report
notes.
However, total employment also fell, with 1.38 million people
employed—down by just over 30,000 compared to January 2025, the
report relates.
STATIN says the labour force shrank to 1.44 million persons, as
both male and female participation declined, the report notes.
The overall labour force participation rate dropped to 66.8 per
cent from 68.4 per cent, the report discloses.
Youth employment was also impacted, with the number of employed
young people falling by more than 11 per cent, the report says.
Youth unemployment, however, improved, declining to 10.7 per cent,
the report relays.
The data also show an increase in the number of persons outside the
labour force, which rose to 714,800—an increase of nearly 33,000
people, the report discloses.
STATIN notes that the survey used an abbreviated questionnaire in
several western parishes, which limited the production of some
indicators for the period, the report adds.
About Jamaica
Jamaica is an island country situated in the Caribbean Sea. Jamaica
is an upper-middle income country with an economy heavily dependent
on tourism. Other major sectors of the Jamaican economy include
agriculture, mining, manufacturing, petroleum refining, financial
and insurance services.
On Feb. 21, 2025, Fitch Ratings affirmed Jamaica's Long-Term
Foreign-Currency Issuer Default Rating (IDR) at 'BB-', with a
positive rating outlook. In October 2023, Moody's upgraded the
Government of Jamaica's long-term issuer and senior unsecured
ratings to B1 from B2, and senior unsecured shelf rating to (P)B1
from (P)B2. The outlook has been changed to positive from stable.
In September 2024, S&P affirmed 'BB-/B' longterm foreign and local
currency sovereign credit ratings on Jamaica and revised outlook to
positive.
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M E X I C O
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DEL MONTE: Lenders' Appeal Bid to Be Decided Soon
-------------------------------------------------
Alex Wittenberg at law360.com reports that a New Jersey bankruptcy
judge said on Thursday, April 2, he would decide whether to certify
a Del Monte settlement for direct appeal to the Third Circuit based
on papers already filed in the case, after the canned food company
urged the court to let a lender group's challenge unfold in
district court instead.
About Del Monte Foods Corporation II Inc.
Founded in 1886 and headquartered in Walnut Creek, California, the
Del Monte business has been a cornerstone of American grocery
stores for more than 130 years. Del Monte Foods has been driven by
its mission to nourish families with earth's goodness. As the
original plant-based food company, Del Monte is always innovating
to make nutritious and delicious foods more accessible to
consumers
across its portfolio of beloved brands, including Del Monte,
Contadina, College Inn, Kitchen Basics, JOYBA, Take Root Organics
and S&W. On the Web: @ www.delmontefoods.com/ or
@ www.joyba.com/
On July 1, 2025, Del Monte Foods Corporation II, Inc. and 17
affiliated debtors filed voluntary petitions for relief under
Chapter 11 of the United States Bankruptcy Code (Bankr. D.N.J.
Lead
Case No. 25-16984) to address $1.235 billion in funded debt
obligations. At the time of the filing, the Debtors listed $1
billion to $10 billion in both assets and liabilities.
Judge Michael B. Kaplan presides over the case.
The Debtors tapped Michael D. Sirota, Esq., at Cole Schotz P.C.
and
Herbert Smith Freehills Kramer (US), LLP as legal counsel;
Jonathan
Goulding, managing director at Alvarez & Marsal North America,
LLC,
as chief restructuring officer; and Stretto, Inc. as claims and
noticing agent.
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. as investment banker.
Wilmington Savings Fund Society, FSB, as DIP Term Loan Agent, is
represented by ARENTFOX SCHIFF LLP.
JPMorgan Chase Bank, N.A., as Prepetition and DIP ABL Agent, is
represented by GREENBERG TRAURIG, LLP and SIMPSON THACHER &
BARTLETT LLP.
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P E R U
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RUTAS DE LIMA: S&P Lowers Issue Rating to 'D'
---------------------------------------------
S&P Global Ratings lowered its issue rating on Rutas de Lima S.A.C.
(RdL) to 'D' from 'CC'. S&P does not anticipate a restructuring of
the debt, given the complete absence of cash flow generation within
the project.
RdL has a 30-year concession with the MML to operate and execute
mandatory and complementary construction and maintenance work along
the three main roads into Lima, Peru. The concession includes 114.6
kilometers (km) of road infrastructure: 95.6 km of existing
highways and 19 km of new construction.
RdL's road network is divided into three sections:
-- Panamericana Sur (PS; 54.1 km), the main access road to Lima
from the south;
-- Panamericana Norte (PN; 31.5 km), the main access road to Lima
from the north; and
-- Ramiro Priale (RP; 10 km of existing road and 19 km of new
construction), the access road to the city from the east.
On Feb. 9, 2026, bondholders on RdL's initiated the process to
accelerate its debt, with corresponding payments received on March
4, 2026, of about Peruvian sol (PEN) 110 million that were
available in the project's trustee.
This action followed the complete cessation of project operations
on Dec. 2, 2025, after the Metropolitan Municipality of Lima (MML)
suspended toll collections on the Panamericana Norte and Sur.
Consequently, RdL lost all cash flow generation.
According to the concession agreement, the MML transferred the
operation and maintenance (O&M) management of PN and PS to RdL on
Feb. 10, 2013. Brookfield Infrastructure Partners L.P.
(BBB+/Stable/A-2) controls 57% of the project's shares, while CNO
S.A. (not rated) and Sigma Fondo de Inversion de Infraestructura
(not rated) own 25% and 18%, respectively.
Debt acceleration by bondholders triggered a default of the
project's debt.
The acceleration of debt represents the final stage in a series of
negative developments that damaged RdL's creditworthiness. On Sept.
29, 2025, RdL initiated dissolution and liquidation proceedings
under Peruvian corporate law, anticipating the impending financial
distress. Despite this, operations continued until Dec. 2, 2025,
when the MML's suspension of toll collections effectively halted
revenue generation. This action, stemming from a legal dispute
concerning freedom of movement related to a competing free road,
fundamentally undermined the concession's economic viability.
In this context, a debt acceleration process initiated on Feb. 9,
2026, resulted in payments of approximately 6% of the outstanding
PEN1.809 billion debt (as of December 2025) on March 4, 2026.
Therefore, S&P lowered the rating on the project to 'D'. It does
not anticipate a restructuring of the debt, given the complete
absence of cash flow generation within the project.
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P U E R T O R I C O
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BUILDERS HOLDING: Court Says MAFRE Entitled to Summary Judgment
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Judge Edward A. Godoy of the United States Bankruptcy Court for
the District of Puerto Rico granted the motion for summary
judgment filed by MAPFRE in the adversary proceeding captioned
NOREEN WISCOVITCH RENTAS, TRUSTEE FOR THE ESTATE OF BUILDERS
HOLDINGS CO., CORP., PLAINTIFF, v. ORIENTAL BANK and the PUERTO
RICO FINANCING AUTHORITY, DEFENDANTS; MAPFRE PRAICO INSURANCE
COMPANY AND ENDURANCE ASSURANCE, INTERVENOR-PLAINTIFF, v.
ORIENTAL BANK, BUILDERS HOLDING CO., CORP., and the PUERTO RICO
FINANCING AUTHORITY INTERVENOR-DEFENDANTS; ORIENTAL BANK,
COUNTER-CLAIMANT, v. BUILDERS HOLDING CO., and MAPFRE PRAICO
INSURANCE COMPANY AND ENDURANCE ASSURANCE, COUNTER-DEFENDANTS,
ADV. PROCEEDING NO. 17-00012 (Bankr. D.P.R.). Oriental's motion
for summary judgment and opposition to MAPFRE's summary
judgment is denied.
Builders Holding Co., a general contractor, and the Puerto Rico
Financing Authority entered into a contract for the
construction of a project known as "Revitalizacion del Poblado
de Boqueron en el Municipio de Cabo Rojo." Builders failed to
make payments to the project's vendors. MAPFRE, the bonding
company, sent a letter to the Financing Authority informing it
of claims received under the bonds covering the project and
that all further project payments, including progress payments,
retainage, or additional claim amounts, had to be sent to
MAPFRE and made payable jointly to Builders and MAPFRE. The
Financing Authority failed to comply with MAPFRE's request and
made a deposit of $537,924.18 to Builders' account at Oriental
Bank. At the time of the erroneous deposit, Builders had a
matured debt with Oriental on two lines of credit. As a
consequence, on the same day the deposit was made, Oriental
applied $464,757.60 to the outstanding balance of the lines
of credit.
As of the date of the erroneous deposit, MAPFRE paid $523,166.55
for labor, materials, and equipment furnished in the bonded
project pursuant to its obligations under the bonds and had
incurred net aggregate losses under all bonds issued on behalf
of Builders that exceeded the amount of $537,924.18.
As of March 21, 2018, MAPFRE incurred losses amounting to
$1,069,849.13 due to payments made under the bonds for the project
and $7,863,012.93 under all bonds issued on behalf of the debtor.
Builders filed a bankruptcy petition under chapter 11 and later
filed this adversary proceeding against the Financing Authority and
Oriental.
The Bankruptcy Court determines that no material issue of fact
exists, and MAPFRE is entitled to summary judgment in its favor as
a matter of law.
Pursuant to equitable subrogation principles and the statutes that
regulate governmental construction projects in Puerto Rico,
MAPFRE's interest in the funds deposited in Builder's account is
superior to the rights of other creditors of Builders, including
Oriental.
Oriental argued that even if the former Article 9 of Law 241-1996
did not allow it to perfect by control its interest in Builders'
deposit account, Oriental's set-off was still senior to MAPFRE's
secured interest in the same collateral under common law
principles.
The Bankruptcy Court finds that Builders had a priority interest
over the progress payment deposited by the Financing Authority in
Builders' deposit account.
Oriental is ordered to turn over to MAPFRE and the Chapter 7
trustee, jointly, the money Oriental set-off from Builders' bank
account.
A copy of the Court's Opinion and Order dated March 16, 2026, is
available at https://urlcurt.com/u?l=6LlZ7M from PacerMonitor.com.
About Builders Holding Co.
Builders Holding Co., Corp. sought protection under Chapter 11 of
the Bankruptcy Code (Bankr. D.P.R. Case No. 16-06643) on August 20,
2016. The petition was signed by Ismael Carrasquillo Sanchez,
president. At the time of the filing, the Debtor disclosed $9.72
million in assets and $10.53 million in liabilities.
Judge Edward A. Godoy presides over the case.
Fausto David Godreau, Esq., at Godreau & Gonzales Law, is the
Debtor's bankruptcy counsel. The Debtor hired Monge Robertin &
Asociados, Inc. as insolvency and restructuring advisor; and
Rivera Colon & Associated Co. as external auditor.
No official committee of unsecured creditors has been appointed in
the case.
NBG MACHINE: Jose Diaz Crespo Named Subchapter V Trustee
--------------------------------------------------------
The U.S. Trustee for Region 21 appointed Jose Diaz Crespo as
Subchapter V trustee for NBG Machine Builder & Precision Tooling.
Mr. Diaz Crespo will be paid an hourly fee of $200 for his
services
as Subchapter V trustee and will be reimbursed for work related
expenses incurred. Also, a retainer of $2,500 is requested.
Mr. Diaz Crespo declared that he is a disinterested person
according to Section 101(14) of the Bankruptcy Code.
About NBG Machine Builder & Precision Tooling
NBG Machine Builders & Precision Tooling, Inc., a company based in
Sabana Grande, Puerto Rico, delivers precision machining and custom
tooling solutions for industrial clients. Its operations include
manufacturing precision parts for the pharmaceutical sector and
general manufacturing, repairing and maintaining critical
production components, and providing technical support for
automated systems and industrial equipment. Founded in 2006 and led
by President Welderman Matos Alemany, the company employs a few
staff.
NBG filed a petition under Chapter 11, Subchapter V of the
Bankruptcy Code (Bankr. D.P.R. Case No. 26-01087) on March 13,
2026, with $1,060,708 in assets and $862,799 in liabilities.
Welderman Matos Alemany, president of NBG, signed the petition.
The Debtor is represented by:
Juan C. Bigas, Esq.
Juan C. Bigas Law
PO Box 7011
Ponce, PR 00732-7011
Phone: (787) 259-1000
cortequiebra@yahoo.com
PUERTO RICO: Bankruptcy Stymies Paul Weiss, ACLU Fee Bids
---------------------------------------------------------
Carolyn Muyskens at law360.com reports that American Civil
Liberties Union and Paul Weiss attorneys who successfully eased
restrictions on voting by mail in Puerto Rico during the COVID-19
pandemic cannot collect fees for their work because they were
discharged in Puerto Rico's bankruptcy proceeding, the First
Circuit has ruled.
About Puerto Rico
Puerto Rico is a self-governing commonwealth in association with
the United States. The chief of state is the President of the
United States of America. The head of government is an elected
Governor. There are two legislative chambers: the House of
Representatives, 51 seats, and the Senate, 27 seats. The
governor-elect is Ricardo Antonio Rossello Nevares, the son of
former governor Pedro Rossello.
In 2016, the U.S. Congress passed PROMESA, which, among other
things, created the Financial Oversight and Management Board and
imposed an automatic stay on creditor lawsuits against the
government, which expired May 1, 2017.
The members of the oversight board are: (i) Andrew G. Biggs, (ii)
Jose B. Carrion III, (iii) Carlos M. Garcia, (iv) Arthur J.
Gonzalez, (v) Jose R. Gonzalez, (vi) Ana. J. Matosantos, and (vii)
David A. Skeel Jr.
On May 3, 2017, the Commonwealth of Puerto Rico filed a petition
for relief under Title III of the Puerto Rico Oversight,
Management, and Economic Stability Act (PROMESA). The case is
pending in the United States District Court for the District of
Puerto Rico under case number 17-cv-01578. A copy of Puerto Rico
PROMESA petition is available at
http://bankrupt.com/misc/1701578-00001.pdf
On May 5, 2017, the Puerto Rico Sales Tax Financing Corporation
(COFINA) commenced a case under Title III of PROMESA (D.P.R. Case
No. 17-01599). Joint administration has been sought for the Title
III cases.
On May 21, 2017, two more agencies; Employees Retirement System of
the Government of the Commonwealth of Puerto Rico and Puerto Rico
Highways and Transportation Authority (Case Nos. 17-01685 and
17-01686) commenced Title III cases.
U.S. Chief Justice John Roberts named U.S. District Judge Laura
Taylor Swain to preside over the Title III cases.
The Oversight Board has hired as advisors, Proskauer Rose LLP and
Neill & Borges LLC as legal counsel, McKinsey & Co. as strategic
consultant, Citigroup Global Markets as municipal investment
banker, and Ernst & Young, as financial advisor.
Martin J. Bienenstock, Esq., Scott K. Rutsky, Esq., and Philip M.
Abelson, Esq., of Proskauer Rose LLP; and Hermann D. Bauer, Esq.,
at O'Neill & Borges LLC are onboard as attorneys.
Prime Clerk LLC is the claims and noticing agent. Prime Clerk
maintains the case Web site
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S U R I N A M E
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SURINAME: Moody's Affirms 'Caa1' Issuer & Senior Unsecured Ratings
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Moody's Ratings has affirmed the Government of Suriname's issuer
and senior unsecured ratings at Caa1, and maintained the outlook at
positive.
The Caa1 rating reflects Suriname's still-weak institutional
capacity and elevated fiscal risks, balanced by an improved
post-restructuring debt service profile following the full
repayment of the Value Recovery Instrument and funds in an overseas
escrow account to cover interest on new Eurobonds until 2028.
Fiscal and monetary slippage in 2025 weakened the near-term fiscal
outlook and reduced cash buffers, limiting flexibility to absorb
shocks in a highly dollarized economy where policy loosening can
pass through quickly to the exchange rate and inflation. A broad,
multi-party governing coalition complicates decision making,
reducing the speed and consistency of policy implementation and
increasing the risk of slower reform momentum and weaker policy
predictability.
The positive outlook reflects Moody's views that Suriname's credit
profile will likely strengthen materially over the medium term as
Block 58 moves closer to its expected start of production in 2028.
Once production begins, Moody's expects offshore oil output to
underpin an increase in GDP that would double the size of the
economy within the first three years of production, strengthen the
external position, and expand fiscal capacity relative to the
current pre-oil period, representing a meaningful structural
improvement in credit fundamentals. At the same time, realization
of this upside will depend on maintaining macroeconomic stability
ahead of first oil production, rebuilding buffers, preserving
exchange rate flexibility, and further strengthening the
institutional framework for managing future mineral revenues.
Suriname's local and foreign currency country ceilings remain
unchanged at B2 and B3, respectively. The local currency ceiling at
B2, two notches above the sovereign rating, reflects a heavy
reliance on a single commodity contributing to external imbalances
and weak institutions and policy predictability. The foreign
currency ceiling at B3 representing a one-notch gap to the local
currency ceiling, reflects low policy effectiveness, high external
indebtedness, and relatively closed capital account that generate a
degree of transfer and convertibility risk, notwithstanding a track
record of limited intervention.
RATINGS RATIONALE
RATIONALE FOR THE AFFIRMATION OF THE Caa1 RATINGS
IMPROVED FUNDING FLEXIBILITY AND REMOVAL OF LEGACY CLAIMS REDUCE
NEAR-TERM DEBT SERVICE OBLIGATIONS
Recent financing developments provide a source of support to
Suriname's credit profile ahead of first offshore oil production.
The November 2025 Eurobond issuance reopened access to market-based
foreign-currency financing and materially eased near-term liquidity
pressures, while the subsequent February 2026 re-tap of the 2035
notes indicates that access extended beyond a single transaction.
These transactions have been used not only to extend financing, but
also to simplify the sovereign's future obligations. The
authorities used part of the November 2025 bond proceeds to fully
repay the outstanding value recovery instrument (VRI) in January
2026. The full repayment of the VRI removes a contingent claim on
future oil-related revenues, simplifies the post-offshore oil
fiscal outlook, and allows a larger share of future oil inflows to
accrue directly to the sovereign once production begins.
Taken together, the renewed access to external financing and the
extinguishment of the VRI strengthen Suriname's ability to manage
the period before oil production begins in 2028, improving funding
flexibility and reducing near-term debt service uncertainty, and
preserving the prospective benefit from future oil revenues for the
budget.
2025 POLICY SLIPPAGES HAVE WEAKENED NEAR-TERM FISCAL OUTLOOK AND
BUFFERS
Suriname's rating remains primarily constrained by a weaker
near-term fiscal outlook in the post-IMF program period, with the
policy slippage seen in 2025 leaving limited room for
underperformance in 2026–27. Since the completion of the
IMF-supported program in March 2025, fiscal outcomes have
deteriorated and liquid fiscal buffers have weakened materially
compared to 2024. Central government debt is estimated to rise to
106.3% of GDP in 2025, from 88.0% in 2024, and the fiscal deficit
widened to 10.0% of GDP, primarily driven by a recapitalization of
the central bank of about 5% of GDP. Although key fiscal-governance
legislation was passed in 2024, delays in 2026 budget approval
limits visibility into how far the new framework is being put into
practice and near-term fiscal projections.
At the same time, inflation and exchange-rate dynamics remain
highly sensitive to domestic policy settings. In this context,
looser fiscal and monetary conditions have contributed to higher
inflation and renewed pressure on the exchange rate, while
foreign-exchange intervention has reduced reserve buffers. With
fiscal liquidity diminished and policy implementation uneven, the
risk of renewed macroeconomic instability remains elevated,
underscoring the need for sustained policy discipline to contain
inflation, preserve exchange-rate stability, and prevent further
erosion of buffers.
The fiscal deterioration has been accompanied by a sharp reduction
in liquid buffers. This is important given the still high debt
level and the high degree of dollarization; fiscal or monetary
loosening can translate quickly into exchange rate and inflation
pressure. Fiscal deposits at the central bank declined from 9.2% of
GDP (2024) to 3.4% of GDP (2025). At the same time, buffer erosion
occurred alongside weaker expenditure control. Supplier arrears
increased to SRD 7.1 billion (about 4% of GDP) by September 2025
(from SRD 4.1 billion at end-2024), indicating that part of the
adjustment to tighter financing conditions occurred through delayed
payments rather than fully through policy correction, reinforcing
liquidity and execution risks.
POLITICAL CONSTRAINTS AND GOVERNANCE CHALLENGES REMAIN SALIENT
AHEAD OF OFFSHORE OIL PRODUCTION
A broad coalition government continues to complicate
consensus-building and slow the implementation of reforms,
underscoring Suriname's persistent institutional and governance
weaknesses. Even though key fiscal-governance legislation was
passed in 2024, translating these reforms into practice has proven
more difficult. Delays in budget approval, uneven transparency
across state-owned enterprises, and broader implementation gaps
reduce policy predictability and limit confidence in the
authorities' ability to sustain fiscal discipline.
While offshore oil production scheduled to begin in 2028 is on
track according to Staatsolie, the state-owned oil company, the
institutional framework needed to manage the expected oil windfall
is still incomplete. The government that took office in July 2025
is a broad coalition of multiple political parties, which in
Moody's views increases the risk that politically difficult reforms
lose momentum or are implemented only partially. If this leads to
weak policy coordination and implementation capacity, risks that
the benefits of future oil revenues are diluted by fiscal slippage
are heightened.
The legal framework approved in late 2024, including measures to
strengthen the fiscal framework and the Savings and Stabilization
Fund Suriname, now requires effective operationalization. Full
implementation would support more transparent management of mineral
revenues, including through the adoption of the necessary decrees
and the incorporation of a multi-year fiscal framework with annual
primary spending ceilings and a clear debt anchor beginning with
the 2026 budget. In Moody's views, these reforms could strengthen
fiscal discipline over time, but their credit relevance depends on
whether they are embedded credibly in day-to-day policymaking.
The SOE sector more broadly remains a source of fiscal risk,
compounded by weak transparency and oversight. Many SOEs reportedly
do not submit financial statements to the Ministry of Finance on a
timely basis, reflecting weak enforcement of reporting
requirements. Although legal provisions for the publication of
audited financial statements exist, compliance remains uneven.
Oversight is further constrained by limited audit coverage and
capacity challenges at the supreme audit institution, although, in
collaboration with the World Bank, the authorities have initiated
annual credit risk assessments of state-owned enterprises. This
reduces visibility into contingent liabilities and increases the
risk that fiscal pressures materialize through government support
to entities.
RATIONALE FOR THE POSITIVE OUTLOOK
The positive outlook reflects Moody's views that Suriname's credit
profile will likely strengthen materially over the medium term as
the country moves closer to first offshore oil production from the
Block 58 project, scheduled for 2028. Credit metrics are expected
to improve as offshore oil production begins, provided Suriname
maintains macroeconomic stability, rebuilds cash buffers, preserves
exchange rate flexibility, and continues strengthening fiscal
institutions and governance to ensure durable fiscal gains from oil
revenues.
In a statement from December 2025, Staatsolie said that the Block
58 project timeline is progressing as planned. Moreover, the
project has many similarities to the already operational offshore
facilities in Guyana, providing a blueprint for development.
Moody's are two years closer to the start of production since the
last rating action in 2024, which improves visibility and reduces
execution risk compared to when production was more distant.
Once offshore oil production from Block 58 begins, Moody's expects
output to underpin an increase in nominal GDP to $13 billion in
2030 from about $5 billion in 2025 with average real GDP growth of
36% in 2028-29. Offshore oil production will also strengthen the
external position and significantly expand fiscal capacity relative
to the current pre-oil period. This would represent a structural
shift in Suriname's credit profile that is not achievable under
existing oil production alone.
Furthermore, adding to expected upside, Suriname expects another
investment decision related to Block 52 and references optimism
following testing results in the Sloanea 1 well. Staatsolie reports
continued progress on offshore developments and notes that Petronas
completed drilling of the Caiman 1 exploration well in Block 52
with "encouraging results," as part of a multi well drilling
campaign.
ENVIRONMENTAL, SOCIAL, GOVERNANCE (ESG) CONSIDERATIONS
Suriname's CIS-5 indicates the rating is lower than it would have
been if ESG risk exposures did not exist. The principal driver is
very weak governance, combined with high exposure to social and
environmental risks. Weak policy credibility and effectiveness
further amplify the impact of environmental and social
vulnerabilities, as the government's limited institutional capacity
constrains its ability to implement reforms or respond to shocks.
Suriname's E-4 score reflects vulnerability to physical climate
risk, carbon transition risk, and water risk. Suriname's exposure
to physical climate risk encompasses threats from sea level rise
and flooding due to the country's low-lying geography. These risks
threaten infrastructure, agriculture, and population centers,
directly affecting the sovereign's economic stability and fiscal
outlook.
Suriname's S-4 score reflects its exposure to labor and income
risks. Persistent macroeconomic instability has resulted in high
youth unemployment and a widening poverty gap, which in turn
constrain human capital development and social cohesion. These
social pressures increase fiscal demands and reduce the
government's capacity to respond to shocks. High youth unemployment
– estimated at 24% at the end of 2024 - and a significant poverty
gap – the poverty rate was estimated at 17.5% based on the upper
middle income threshold of $6.85 per day (2017 PPP) - underscore
the depth of these social vulnerabilities and their negative impact
on the sovereign's credit profile.
Suriname's G-5 score is driven by very weak policy credibility and
effectiveness. This assessment is underpinned by a history of
default, persistent fiscal imbalances, and low transparency. These
governance weaknesses undermine investor confidence and limit the
sovereign's ability to implement reforms or respond to ESG shocks.
Persistent weaknesses in fiscal policy effectiveness and low scores
for transparency, accountability, and corruption highlight the
structural nature of these governance risks and their material
impact on the credit profile.
SUMMARY OF MINUTES FROM RATING COMMITTEE
GDP per capita (PPP basis, US$): 21,519 (2024) (also known as Per
Capita Income)
Real GDP growth (% change): 3% (2024) (also known as GDP Growth)
Inflation Rate (CPI, % change Dec/Dec): 10.1% (2024)
Gen. Gov. Financial Balance/GDP: -2.4% (2024) (also known as
Fiscal Balance)
Current Account Balance/GDP: 0.2% (2024) (also known as External
Balance)
External debt/GDP: 101.8% (2024)
Economic resiliency: b2
Default history: At least one default event (on bonds and/or
loans) has been recorded since 1983.
On March 24, 2026, a rating committee was called to discuss the
rating of the Suriname, Government of. The main points raised
during the discussion were: The issuer's economic fundamentals,
including its economic strength, have not materially changed. The
issuer's institutions and governance strength, have not materially
changed. The issuer's fiscal or financial strength, including its
debt profile, have not materially changed. The issuer has become
less susceptible to event risks.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
An upgrade would occur with a sustained improvement in policy
credibility and buffers, including a durable improvement in the
fiscal balance, rebuilding of government cash buffers and reserves,
and a reduction in inflation and exchange-rate pressures as the
start of Block 58 offshore oil production approaches.
A return to stable could occur if fiscal and monetary slippages
persist and lead to renewed inflation and exchange-rate
instability, weakening buffers and financing flexibility. Delays or
setbacks in the oil timeline would further weaken the medium-term
upside that supports the positive outlook. Downward rating pressure
would be consistent with renewed arrears accumulation, missed or
delayed debt service, or failure to implement the institutional and
governance reforms.
The principal methodology used in these ratings was Sovereigns
published in November 2022.
The weighting of all rating factors is described in the methodology
used in this credit rating action, if applicable.
Suriname's "ba2" economic strength is set below the initial score
of "baa3" to reflect the extraordinarily high average growth rate,
which captures the start of off-shore oil production, but which
overstates Suriname's growth potential. The "caa2" institutions and
governance strength score is one notch below the initial score of
"caa1" to reflect the government default history and track record
of arrears. The "caa2" fiscal strength score is one notch below the
initial score of "caa1" to reflect a near-term deterioration
despite the expected windfall of oil revenue on fiscal accounts.
This leads to a final scorecard-indicated outcome of B3-Caa2,
compared to the initial scorecard-indicated outcome of B2-Caa1. The
assigned Caa1 rating is inside the final scorecard-indicated
outcome range.
=====================================
T R I N I D A D A N D T O B A G O
=====================================
CARIBBEAN AIRLINES: Seeks New Government Bailout
------------------------------------------------
Trinidad and Tobago Guardian reports that Caribbean Airlines
Limited (CAL) is seeking a financial bailout from the Government to
counter the rising cost of fuel as a result of the US/Israel war
against Iran and its impact on the carrier's operational costs.
Guardian Media understands the CAL board put forward several
options to the Ministry of Finance during a meeting to cushion the
airline -- the introduction of a fuel surcharge on tickets, the
removal of the subsidy on the airbridge, an increase in the overall
cost of tickets and a further slashing of lower revenue routes,
according to Trinidad and Tobago Guardian.
However, CAL is also seeking further financial support from the
State, which sources say could come in the form of a billion-dollar
debt write-off, the report notes.
And according to the 2026 budget document, Details of Estimates of
Recurrent Expenditure, dated March 25, 2026, the Government has
allocated $626.84 million for the principal repayment on the CAL's
local loans. That sum is triple the revised allocation for
principal repayment of $200.8 million in fiscal 2025, the report
recalls.
As a last resort, without any support, there is the possibility of
shutting down the airline, the report notes.
Guardian Media understands there is a division of opinion on the
board about the airline’s viability, the report says. While
CAL's chair, Reyna Kowlessar, is pushing to get further State
support to realign the airline’s business model, at least two
directors believe it should either be shut down or sold, the report
relays.
Across the world, airlines are grappling with higher fuel costs,
with several airlines already introducing fuel surcharges, raising
fares and rationalising routes, the report discloses. The fuel
surcharge, Guardian Media understands, would follow several
international airlines such as British Airways, Air France-KLM,
Emirates, Singapore Airlines and Qatar Airways that already have
one in place, the report relays.
CAL is a billion-dollar foreign exchange-earning company with
tentacles throughout the region and North America, the report
notes. However, it has been hamstrung by its debt and lack of
financial audits, the report relates. The airline has not
published financial audits for the last eight years, in breach of
its statutory obligations, which affects its ability to raise money
without State support, the report says.
Over the years, the company has published management statements
which give an indication as to its performance, but the statutory
breach is on actual audited statements, the report discloses.
Despite this, Finance Minister Davendranath Tancoo said his
predecessor had "repeatedly approved financing for CAL in 2017,
2018, 2019, and as recently as March 2025 to cover operational
pressures," ignoring the lack of transparency, the report relates.
During his budget contribution last year, Tancoo accused the former
administration of presiding over "criminal negligence" at the
airline after he revealed that CAL spent more than $60 million on
audits with international firms EY and PriceWaterhouseCoopers
(PwC), yet failed to submit a single audited financial statement
for over nine years, the report says.
The government has acted as guarantor of four loans for CAL: a
US$75 million loan ($504,455,772.11) from First Citizens, a US$55
million loan from First Citizens, a $436 million loan from Ansa
Merchant Bank and a $443 million loan from Ansa Merchant Bank, the
report notes.
Guardian Media understands that these loans have been repeatedly
refinanced over the years, the report discloses.
Last year, Minister of Transport and Civil Aviation Eli Zakour took
issue with the Airports Authority of T&T (AATT) writing off a $205
million debt owed by CAL as the state entity was struggling to meet
its own expenses, the report says.
JetPak Re-evaluation
As part of re-evaluating its business model, last month CAL
commissioned PWC- at a cost of $268,000 - to do a valuation of its
courier service, JetPak, the report relays. CAL's general manager
of cargo and new business, Marklan Mosely, resigned, the report
notes.
Mosely's resignation takes the number of executive managers leaving
the company to eight in the last eight months, the report notes.
Former corporate communications executive manager Dionne Ligoure
was the first to leave in August 2025. She was followed by chief
executive Garvin Medera, who resigned in October 2025, the report
notes. In a matter of weeks, Chief Financial Officer Varuna
Kuarsingh, Chief Commercial Officer Martin Aeberli, Corporate
Secretary Nalini Lalla and General Manager Procurement Arlene Hunt
followed suit, the report says. Last month, Chief Information
Officer Jeremy Mohammed also resigned, the report recalls.
Not only did the exit of eight senior officers from the airline
remove a layer of management, but also a layer of institutional
knowledge from the organisation, the report says.
Last August, Prime Minister Kamla Persad-Bissessar said that CAL
did not operate a single profitable route and had warned the
airline's management that they had two years to fix the company's
finances or face dismissal, the report discloses.
"I am giving the management of Caribbean Airlines two years, max.
They have to sort out the mess, otherwise, everyone there will be
looking for a new job . . .. Your future is in your hands," she had
said at a Monday night forum meeting, the report says.
"No longer will we accept taxes paid by ordinary citizens, paid by
teachers, paid by policemen, small enterprises . . . to upkeep
CAL," the Prime Minister further warned as she accused management
of receiving "large salaries for . . . failing in their jobs."
'Fuel Surcharge Inevitable'
Informed sources told Guardian Media that a fuel surcharge is
almost an inevitable possibility for the airline, the report says.
While the airline has struggled through financial turbulence
several times, especially during the COVID years, CAL's most
pressing cost now is its rising fuel bill, causing it to spend more
operationally than it is earning at this point, the report relays.
Though higher energy prices, as a result of the United States and
Israel's war with Iran, may augur well for the country's coffers,
the knock-on effect for CAL is that it's costing more for aviation
fuel, which it purchases at market rates from different ports of
the various routes it services, the report notes.
In addition to aviation fuel, CAL's operational expenses include
employee costs, lease of aircraft, maintenance, passenger expenses,
marketing and commissions, the report discloses.
When CAL was established in 2007, apart from having a clean balance
sheet, it had benefited from a government-supported US$50 a barrel
fuel hedge to stabilise costs against volatile oil prices, the
report relates. It was removed in 2013 after costing the State
$300 million, the report notes.
With no buffer in place, CAL has no option but to implement the
charge on customers, the report says.
Airbridge
For fiscal 2026, CAL has been allocated $70 million from the
Ministry of Finance, according to the budget documents, the report
relays.
That sum is the subsidy paid to CAL to service the airbridge
between Trinidad and Tobago, the report notes.
In 2025, CAL received the same amount of $70 million, in 2024, CAL
received $73 million, in 2023, the subsidy was $85.6 million, while
in 2022 it was $95 million, the report discloses.
The reduced annual allocation by the State was a result of
increasing the cost of tickets on the airbridge in January 2023,
the report recalls.
The two-way fare, which was $300, was increased by $100 to $400,
the report notes.
"Revenues from international travel are used to subsidise the
inter-island air bridge. Additionally, the rise in global energy
commodity prices has resulted in higher operational costs for both
the inter-island airbridge and seabridge. In this regard and
consistent with our overall policy of sharing the burden of the
cost of transport, I propose to increase the cost of inter-island
air travel for all tickets by $50.00," then finance minister Colm
Imbert had said at the time, the report he added.
"The estimated increase in annual revenue to Caribbean Airlines for
the operation of the airbridge will be $50 million, which, with
this increased price, will still require subsidies of the airbridge
of over $50 million per year," Imbert added, the report relays.
In August 2022, CAL issued a release which stated that its domestic
operation was characterised by consistent losses (US$9.6 million as
at June 2022) and other critical variables, such as subsidised
flights, high operating costs and low prices, which do not reflect
actual market value and one-way peak demand periods outside of the
July-August school holiday period, the report recalls.
The airline said as at June 2022, its total operational costs for
the airbridge stood at US$18.7 million, while the cost per flight
hour was US$17,306, the report says.
It noted that the high costs were driven by the frequency of
flights and the short distance (52 miles), leading to an
undesirable low block hour utilisation of aircraft, crews and
maintenance costs, the report notes.
"Nonetheless, the domestic schedule (inclusive of peak travel
periods) considers the essential nature of the service, events and
activities in Tobago, the total number of passengers over a
12-month period and other information relevant to its operation,"
the airline added, the report discloses.
It said that in terms of passenger and flight details, for the
period July 17, 2021, to July 31, 2022, the airline operated 6,527
flights carrying 416,780 passengers, the report relates.
"Caribbean Airlines is mindful of the need to have an effective
airbridge between Trinidad and Tobago and the company continues to
closely manage the same, bearing in mind the considerable
constraints outlined above," it had said, the report says.
Changes Already Underway at CAL
On October 13, 2025 when CAL announced its new acting chief
executive, Nirmala Ramai, the company said the board and senior
leadership team would be focusing on five key initiatives:
supporting employees and stakeholders with open communication and
care; reviewing operations to increase efficiency and
modernisation; enhancing the customer experience with improved
services; developing a long-term, financially responsible and
sustainable growth plan; and conducting full and thorough audits of
all departments and processes, to strengthen governance, safety,
and accountability, the report notes.
The airline also put up two of its ATRs for sale and it plans to
welcome three additional Boeing 737 MAX 8 within the next 12
months, the report says.
In January, CAL also put in motion changes to the airline as part
of its ongoing network optimisation programme, the report
discloses.
It discontinued service to Tortola, British Virgin Islands and San
Juan, Puerto Rico routes following what the airline said were
comprehensive evaluations of route performance and resource
deployment, the report says.
It also announced it would restructure its Barbados hub from
February 2026, with aircraft and crew to be transitioned to operate
from Trinidad, the report relays.
In November 2025, CAL discontinued flights between Fort Lauderdale,
Florida and Montego Bay and Kingston in Jamaica due to poor
performance, the report relates.
"These changes form a critical part of our plan to deliver reliable
service while managing our resources responsibly. Our customers
remain our priority, and these adjustments ensure we continue to
provide strong regional connectivity, supported by a sustainable
and competitive operational model," Ramai had said, the report
notes.
Guardian Media sent questions to Ramai, but she neither
acknowledged nor answered those questions, the report relates.
CAL's Turbulent Years
For Caribbean Airlines (CAL), profitability has been as cyclical as
the aviation business, the report relays. While it has posted some
profits on paper between 2009 and 2019, these were outweighed by
its mammoth billion-dollar debt, the report recalls.
In the course of the company’s operations, it accumulated losses
of US$454 million ($3 billion), according to its 2020 management
accounts, the report notes.
CAL started operations on January 1, 2007, capitalised with US$100
million ($677 million), the report says. A clean balance sheet, a
leaner flight schedule, subsidised fuel with a fuel hedge set at
US$50 and a smaller staff were key to its initial success, the
report relays.
However, several bad investments over the years resulted in over $1
billion in losses, the report discloses.
In 2021, after the airline suffered financial losses because T&T
closed its borders during the pandemic, it had to retrench workers.
CAL cut a total of 280 jobs, including 79 pilots, in a bid to
streamline its operations, the report says.
The company subsequently issued a release explaining that the job
cuts were fewer than the projected 450 jobs it had intended to
sever when the restructuring exercise began, the report notes.
Then finance minister Colm Imbert had pegged the severance costs at
$110 million to be paid by the T&T taxpayers, as there would be no
input from CAL's minority party, Jamaica, the report says.
In 2020, with the COVID-19 pandemic, the airline made a loss of
US$103 million, the report adds.
About Caribbean Airlines
Caribbean Airlines Limited provides passenger airline services in
the Caribbean, South America, and North America. The company also
offers freighter services for perishables, fish and seafood, live
animals, human remains, and dangerous goods. In addition, it
operates a duty free store in Trinidad. Caribbean Airlines
Limited was founded in 2006 and is based in Piarco, Trinidad and
Tobago.
As reported in the Troubled Company Reporter-Latin America on Oct.
21, 2025, Joel Julien at Trinidad and Tobago Express said that
Caribbean Airlines Limited has finally submitted its audited
financial statements for the year ended December 31, 2016, nearly
nine years after the financial period closed.
The independent audit by KPMG Chartered Accountants, completed in
April 2025, resulted in a qualified opinion after the auditors
were unable to fully verify the accuracy of several key financial
items reported by the airline for that year, in part due to the
prolonged duration of the audit, according to Trinidad and Tobago
Express.
Caribbean Airlines is among many airlines whose business has been
greatly affected in 2020 by the slowdown of international travel
caused by the COVID-19 pandemic. The government of Trinidad &
Tobago guaranteed a US$65 million loan for the airline, and that
funding has helped with the airlines' cash flow shortfall since
May 2020. In September 2020, the airline related it will be taking
cost-cutting measures to help keep it afloat. The measures, which
was to affect some 1,700 employees, included salary deductions,
no-pay leaves and lay-offs.
===============
X X X X X X X X
===============
LATAM: IDB and Saudi Eksab Sign MoU to Advance Equity Investment
----------------------------------------------------------------
Saudi Eksab for International Investments Company and the
Inter-American Development Bank (IDB) Group signed a memorandum of
understanding (MoU) at FII Priority Miami 2026 to advance equity
investment in Latin America and the Caribbean.
Signed by Saudi Eksab CEO Yazeed AlYahya and IDB Group President
Ilan Goldfajn, the agreement focuses on equity financing through
direct and indirect investments, with an initial emphasis on
Central America and the Caribbean.
The collaboration is structured around two priorities:
-- Build an investment pipeline collectively through the
identification of opportunities serving the long-term objectives
-- Potential creation of an investment mobilization vehicle to
channel capital into specific framework investment deployment.
To deliver on these priorities, the parties are exploring concrete
actions such as, for example:
-- A potential private equity vehicle focused on Central America
and the Caribbean, with participation from Saudi Eksab and IDB
Invest;
-- Expanding early-stage investment efforts through IDB Lab,
including support to venture capital funds and direct equity
opportunities, leveraging its network and experience to strengthen
the pipeline across stages.
Through this collaboration, the parties aim to mobilize private
capital, create a socioeconomic impact, and strengthen investment
across Latin America and the Caribbean.
Yazeed Al-Yahya, CEO of Saudi Eksab, stated: “This partnership
represents a strategic step in strengthening long-term
collaboration across high-potential markets. Through our
collaboration with IDB group, we aim to unlock investment
opportunities at scale, strengthen investment ecosystems, and
advance shared prosperity.”
Ilan Goldfajn, president of the IDB Group, emphasized: “We are
advancing concrete equity investments and building a pipeline of
opportunities that connects global capital with Latin America and
the Caribbean, supporting growth, jobs, and stronger economies.”
LATAM: Oil Surge Elicits Tough Love From Trump's Allies in Region
-----------------------------------------------------------------
Patricia Garip at Bloomberg News reports that Latin American
governments from Panama to Chile that politically aligned
themselves with Donald Trump are now absorbing a hit from the
global oil-price surge triggered by their US ally's war on Iran.
So far, many regional leaders are asking their people to grin and
bear price increases rather than return to fuel subsidies that were
once commonplace but have gone out of vogue because of they can no
longer afford them, according to Bloomberg News.
But voters have long memories, and older generations can recall
getting more help from the government in past crises, Bloomberg
News notes. As inflationary pressures swell – and anger simmers
from below – it’s getting harder for right-wing leaders to stay
the course, Bloomberg News relays. In Chile, the new government of
conservative President Jose Antonio Kast is blaming reckless
spending by his predecessor for forcing his hand, Bloomberg News
discloses.
"I have all the empathy in the world," Chilean Finance Minister
Jorge Quiroz said when asked about the hardship wrought by pump
price hikes of up to 54 percent imposed, Bloomberg News relays. "My
empathy comes from truth," he added.
Bloomberg News discloses that the looming turbulence shows how the
crisis in the Strait of Hormuz is rippling beyond Asia, which was
hit first given its direct reliance on Middle East supply. Though
Latin America is far from the key oil and gas artery that's been
mostly choked off by Iran, it's still heavily exposed to oil price
volatility, Bloomberg News notes.
While countries like Brazil and Mexico are crude exporters, the
region as a whole imports more fossil fuels than it produces,
Bloomberg News relays. Most of the shipments come the US Gulf
Coast rather than the Mideast, Bloomberg News says. Pricing is tied
to the international benchmarks, including Brent crude that has
soared by more than 50 percent since the US and Israel launched the
war on Tehran nearly a month ago, Bloomberg News notes.
The regional trailblazer for dismantling steep energy price
adjustments is Argentina, where President Javier Milei took a
"chainsaw" to massive fuel subsidies after taking office in 2023,
Bloomberg News recalls. Prices for domestic natural gas were once
kept so low that Argentines would open windows in the wintertime
rather than turn down the heat, Bloomberg News notes.
Pump prices are up sixfold over Milei's term so far, Bloomberg News
notes. But yellow lights are now flashing. Petrol prices have
climbed another 15 percent since the start of March, according to
data tracked by the University of Buenos Aires, Bloomberg News
relates. In a bid to stem the rise, the government loosened
ethanol blending rules this week to reduce the volatile oil
component, and suspended a fuel tax increase due to take effect
next month, Bloomberg News notes. But the overall trend is
challenging his core pledge to slay inflation that’s still
running at around 33 percent annually, Bloomberg News discloses.
In Panama, which imports all of its oil and gas, President Jose
Raul Mulino at first ruled out fuel subsidies in response to the
war-driven price surge, Bloomberg News says. A 2022 freeze at the
pumps to quell cost-of-living protests was a "disaster," he said at
the time. "Panama is going to pay the price that has to be paid.
I'm sorry."
Bloomberg News relays that it didn't take long for Mulino to back
down. On March 25, his government announced caps on public
transport fares, residential electricity rates and cooking gas
prices, vowing further measures to monitor food and fertiliser
costs, Bloomberg News notes. "We're working on a support plan in
the face of the global energy crisis," Economy and Finance Minister
Felipe Chapman said, Bloomberg News discloses.
In oil-exporting Ecuador, President Daniel Noboa has so far
maintained gradual upward revisions in fuel prices to align with
international levels, Bloomberg News says. Even though the country
is now earning more from crude exports, it's also paying more for
refined products like diesel that it has to import to meet demand
that its refineries can no longer accommodate, Bloomberg News
notes. The Noboa administration is weighing whether to extend
costly subsidies for buses without aggravating the budget deficit,
Bloomberg News discloses.
Both Panama and Ecuador use the US dollar, so are less exposed than
neighboring countries where currencies have plummeted, Bloomberg
News says.
In Brazil, Latin America’s biggest economy, leftist President
Luiz Inacio Lula da Silva took a more aggressive approach right
from the start by stripping out taxes to keep fuel prices in check.
Against the historic backdrop of crippling truckers' strikes, the
issue is especially sensitive in an election year, Bloomberg News
relays. But consumer prices blew past forecasts in early March,
highlighting the far broader economic effects of the war, Bloomberg
News says.
Inflation is also accelerating in Mexico. State-owned oil company
Petroleos Mexicanos is struggling to maintain costly subsidies on
fuels, much of which are imported. If the war persists, President
Claudia Sheinbaum's officials fear fiscal accounts will suffer,
Bloomberg News notes.
Surprisingly, fellow leftist Gustavo Petro of oil-producing
Colombia is sounding more like his right-wing neighbors, Bloomberg
News discloses. "Gasoline subsidies are no longer possible," Petro
said on March 21. "As international prices go up, so will prices in
Colombia."
Bloomberg News notes that in Chile, trucking unions are so far
sticking by Kast even though they were excluded from a package of
relief measures. But protests are gathering pace, Bloomberg News
says. To fill a 50-litre tank of 93-octane gasoline at the new
estimated price, Chileans are now paying around 15% of the monthly
minimum wage, Bloomberg News relates.
Facing signs of a backlash, Kast "thought he could use the occasion
to pull a Milei moment - that there's no money, Bloomberg News
says. But Chileans don’t perceive that the country is in a
fiscal budget crisis," said Patricio Navia, a political scientist
at New York University, Bloomberg News notes.
"This will be a hard sell," Navia added," Bloomberg News says.
"Other governments read history or have institutional memory and
know that fuel price hikes often topple governments."
*********
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.
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* * * End of Transmission * * *