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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
Friday, June 12, 2026, Vol. 27, No. 117
Headlines
A R G E N T I N A
ARGENTINA: OECD Warns of Slower Global Growth, Forecast Holds
ARGENTINA: S&P Raises Sovereign Credit Ratings to 'B-/B'
B A H A M A S
FTX GROUP: Bankman-Fried Seeks Trump Pardon on Fraud Conviction
B R A Z I L
AZUL SA: Judge Blocks Creditors in Brazil Under Ch. 11 Plan
JSL SA: Fitch Affirms & Then Withdraws 'BB-' LongTerm IDRs
MOVIDA PARTICIPACOES: Fitch Affirms 'BB-' IDRs, Outlook Stable
SAO PAULO: Fitch Affirms 'BB' LongTerm IDRs, Outlook Stable
SIMPAR SA: Fitch Affirms 'BB-' LongTerm IDRs, Outlook Stable
VAMOS LOCACAO: Fitch Affirms 'BB-' LongTerm IDRs, Outlook Stable
M E X I C O
ALSEA SAB: Moody's Upgrades CFR to Ba2 & Alters Outlook to Stable
DEL MONTE: Minority Lenders Seek Direct Appeal to 3rd Circuit
DEL MONTE: Plan Rolls On, ABC Law Gains Steam
P A N A M A
SIXTEENTH MORTGAGE: Fitch Affirms 'CCsf' Rating on Class C Notes
P E R U
VOLCAN COMPANIA: Fitch Hikes LongTerm IDRs to 'B+', Outlook Stable
P U E R T O R I C O
ESJ TOWERS: Special Counsel Loses Bid to Dismiss Adversary Case
SN TRANSPORT: Loses Bid to Stay Dismissal of Bankruptcy Case
V E N E Z U E L A
CITGO PETROLEUM: Crystallex Warns of Delay Tactic in Sale Appeal
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A R G E N T I N A
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ARGENTINA: OECD Warns of Slower Global Growth, Forecast Holds
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Buenos Aires Times reports that Argentina's economy is forecast to
grow 2.8 percent in 2026 despite a worsening global outlook,
according to an updated projection by the Organisation for Economic
Co-operation and Development (OECD).
In its latest report – 'Under Pressure' – the Paris-based
organisation warns that the conflict in the Middle East is set to
slow world growth and fuel inflation through higher energy and
fertiliser costs, according to Buenos Aires Times.
As a result, the OECD has cut its global growth forecasts, stating
that the economic consequences of the war involving the United
States, Israel and Iran would continue to be felt well beyond any
eventual ceasefire, the report notes.
The OECD now expects global growth to slow from 3.4 percent in 2025
to 2.8 percent in 2026 if disruptions remain limited, the report
relays. A more prolonged conflict could reduce growth to as low as
2.1 percent next year, below projections published in March, the
report discloses.
"The energy shock stemming from the conflict in the Middle East is
real and severe," OECD Secretary-General Mathias Cormann said while
presenting the report, Buenos Aires Times says. "It is generating
higher costs and greater uncertainty for households and businesses
around the world," he added.
The organisation said the closure of key energy shipping routes and
disruptions to global supply chains have increased pressure on
commodity markets, particularly oil and fertilisers, Buenos Aires
Times notes.
Latin America Outlook
For Latin America, the direct impact is expected to be less severe
than in Asia or the Gulf region, which depend more heavily on
Middle Eastern energy imports, the report relays. However, OECD
economists warned that rising fertiliser prices could eventually
feed through to higher food production costs and consumer prices
across the region, the report discloses.
The report left Argentina's 2026 growth forecast unchanged at 2.8
percent, while slightly upgrading Brazil's outlook to 1.6 percent
and cutting Mexico's projection to 1.3 percent, Buenos Aires Times
says.
Among the world's major economies, India is expected to remain the
fastest-growing large economy with growth of 6.3 percent, ahead of
China at 4.5 percent, the report notes. The United States is
projected to expand by two percent, while the eurozone is expected
to grow just 0.8 percent, the report discloses. Spain is forecast
to outperform its European peers with growth of 2.2 percent,
compared with 0.7 percent in both Germany and France, the report
says.
The OECD also expects inflation across the G20 economies to rise
from 3.4 percent in 2025 to four percent in 2026 before easing
again in 2027 as energy and food prices stabilise, the report
discloses.
Against that backdrop, the organisation urged governments to reduce
their dependence on imported hydrocarbons, diversify energy
supplies and remain cautious with fiscal support measures, the
report notes. It also called on central banks to remain vigilant
against broader inflationary pressures, the report says.
Argentina Assessment
In its report, the OECD predicted that Argentina's GDP will grow
3.5 percent next year, driven mostly by exports from the energy,
mining and agricultural sectors, the report relays.
The report notes that the assessment was generally positive, with
OECD officials noting that “private investment is benefiting from
an increasingly favourable business environment.”
They warned, however, that "private consumption growth will remain
modest, limited by high interest rates and a slow recovery of real
wages," the report relays.
The report discloses that the OECD praised President Javier Mieli's
government for increasing reserve accumulation at the Central Bank
and predicted that the recently passed labour market reform, "once
implemented, will support formal job creation."
It further called for the elimination of "distortive taxes," a
"broadening" of the tax base and "simplification" of the tax
system, the report relays.
"Phasing out inefficient subsidies, raising public-sector
efficiency and replacing distortionary taxes with broader income
and consumption taxes would strengthen macroeconomic stability, the
report says.
"Eliminating remaining natural gas subsidies, while providing
support to low-income households, would provide market signals to
steer resources towards alternative energy sources in the longer
term," said the OECD, the report notes.
Critical Minerals
Earlier, OECD officials said there is a major opportunity for Latin
America as global powers seek alternatives to China for the supply
of critical minerals essential to the energy transition and the
expansion of digital technologies, the report says.
Speaking at the OECD's 18th International Economic Forum on Latin
America and the Caribbean in Paris, Cormann said the region was
uniquely positioned to benefit from the reorganisation of global
supply chains, the report notes.
"The world is offering Latin America and the Caribbean an
unprecedented opportunity," he said. "Demand for critical minerals
is growing and the region has exactly what global markets need," he
added.
Argentina features prominently in that strategy, the report says.
Alongside Bolivia and Chile, it forms part of the so-called Lithium
Triangle, home to some of the world's largest reserves of the
battery metal, the report relays. The country is also attracting
growing interest from the United States and European nations
seeking to secure supplies of strategic minerals outside China, the
report notes.
Brazil, meanwhile, holds more than 20 million tonnes of rare earth
reserves, according to estimates from the United States Geological
Survey, making it second only to China globally, the report
discloses. Chile and Peru are major copper producers, while Cuba
is an important source of cobalt, 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.
Fitch Ratings, on May 5, 2026, upgraded Argentina's Long-Term
Foreign Currency and Local Currency Issuer Default Rating (IDR) to
'B-' from 'CCC+'. The rating Outlook is Stable.
S&P Global Ratings, on Dec. 17, 2025, raised its local currency
sovereign credit ratings on Argentina to 'CCC+/C' from 'SD/SD'. S&P
also raised its long-term foreign currency sovereign credit rating
to 'CCC+' from 'CCC' and affirmed its 'C' short-term foreign
currency rating. The outlook on the long-term ratings is stable. In
addition, S&P raised its issue ratings on local currency bonds to
'CCC+' from 'CCC'. Its 'B-' transfer and convertibility assessment
is unchanged.
Moody’s Ratings, on July 17, 2025 upgraded the Government of
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 its view 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.
DBRS, Inc. upgraded Argentina's Long-Term Foreign and Local
Currency Issuer Ratings to B (low) from CCC in November 2024, and
confirmed such ratings in November 2025.
ARGENTINA: S&P Raises Sovereign Credit Ratings to 'B-/B'
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S&P Global Ratings, on June 10, 2026, raised its long- and
short-term local and foreign currency sovereign credit ratings on
Argentina to 'B-/B' from 'CCC+/C'. The outlook on the long-term
ratings is stable. S&P also raised its transfer and convertibility
assessment to 'B' and its issue ratings on foreign and local
currency bonds to 'B-'.
Outlook
The stable outlook on the long-term ratings reflects S&P's
expectation that the government will continue its fiscal austerity
program as the central bank boosts its foreign exchange reserves,
sustaining economic growth and reducing inflation. The outlook
balances risks posed by persistent economic vulnerabilities with
positive fiscal outcomes and other measures that improve the
government's liquidity.
Downside scenario
S&P said, "We could lower the ratings during the coming 12 months
in the event of a reversal of recent progress in stabilizing the
economy and in improving the sovereign's access to market funding.
When evaluating sovereign debt exchanges, we would consider the
government's overall financial metrics and its access to
alternative liquidity. We could lower the ratings to 'SD' if the
government undertook a debt exchange in the foreign or local market
that we would deem distressed based on the context and low rating
level."
Upside scenario
S&P could raise the ratings in the next 18 to 24 months if greater
medium-term policy certainty facilitates sustained access to
external liquidity and limits economic volatility. This would
likely be in the context of economic growth, continued commitment
to the fiscal anchor, and skillful management of inflation and the
exchange rate.
Rationale
The upgrade reflects easing economic vulnerabilities and gradually
improving external liquidity that set the stage for continued
economic recovery. Fiscal austerity, along with other measures, has
improved the government's access to voluntary funding from capital
markets, as well as official lenders, to meet substantial foreign
currency commercial debt servicing needs in 2026 and 2027.
The government has obtained funding by issuing U.S.
dollar-denominated bonds in the local market, through guarantees
from official lenders, and from repurchase agreements with global
banks to pay amortization on its commercial external debt. The
combination of continued fiscal surpluses and the accumulation of
foreign exchange reserves by the central bank strengthened the
government's liquidity profile.
S&P said, "Our base case assumes that there will likely be stress
over the next 12 to 18 months that risk undermining economic
stability. However, we expect that a combination of fiscal,
monetary, and exchange rate policies will enable the government to
meet these challenges without defaulting or entering into a
distressed debt exchange, under our definitions.
"Our ratings on Argentina reflect a history of macroeconomic
instability, high but declining inflation, exchange rate
volatility, low monetary flexibility, and low foreign exchange
reserves. They also reflect the benefits of a fiscal balance that
has anchored the stabilization program, an improved central bank
balance sheet, and our expectation of a near balanced current
account in 2026."
Institutional and economic profile: Economic performance will
depend on sustained stabilization and positive policy signals
-- A history of macroeconomic instability and sharp changes in
economic policy underpin the low credibility and predictability of
Argentina's governing institutions.
-- The administration was able to pass several economic reforms
that create conditions for better growth and for formalization of
the economy, although continued macroeconomic stability will be
critical for their implementation.
-- S&P expects economic growth of 2.7% in 2026 and around 3% in
coming years.
S&P's ratings on Argentina reflect weak institutions and a history
of large swings in economic policy following changes in political
leadership. Prolonged political polarization has typically hindered
the ability of Argentine governments to implement their economic
agenda. Volatile policies have led to swings in exchange rate
regimes, approaches to monetary policy, the size of the state, and
its influence on investment and growth--all contributing to low GDP
growth. This has also impaired sovereign debt payment capacity and
undermined the debt payment culture.
President Javier Milei has sought to break from Argentina's past by
implementing drastic changes in economic policy after his election
in 2023. Strong commitment to a fiscal anchor has been the
cornerstone of President Milei's economic program while the
exchange rate, either as a crawling peg or a band, has also been a
secondary anchor to bring down inflation.
Beyond the stabilization program, the administration has passed
economic legislation to set the stage for higher growth, despite
lacking majorities in congress. This includes commitments to fiscal
and foreign exchange policies, and regulatory stability for large
investments under the RIGI program (a special program to offer
favorable conditions for new investments in targeted sectors of the
economy). Milei has also been successful in securing passage of
labor reform and changes to the Glacier Law to promote mining
investment particularly in Andean provinces.
Future political cooperation with congress and with provincial
governors will depend on, among other things, perceptions about
socio-economic indicators (such as poverty and unemployment) and on
President Milei's prospects in the national elections in October
2027.
S&P's forecast for 3% growth on average in 2026-2029 assumes broad
continuity of economic policy and gradual recovery of
labor-intensive sectors like manufacturing and construction that
have faced some challenges. Sectoral performance has been uneven,
as export-driven industries (mining, energy, and agriculture) have
been performing very well.
S&P said, "Argentina has posted poor GDP growth on average over the
past two decades, which is why we incorporate below-average growth
in our analysis of creditworthiness. This long-term stagnation is
reflected in GDP per capita that we expect will be around US$14,800
in 2026, compared with about US$14,600 in 2017 (the long-term
stagnation also reflects currency depreciation)."
Flexibility and performance profile: Strong commitment to fiscal
anchor mitigates pressures from already high debt service needs
amid a vulnerable external profile
-- Foreign exchange reserve accumulation has accelerated, albeit
from a low starting point.
-- A sustained fiscal adjustment, combined with tight monetary
policy, is the anchor of the economic plan.
-- High but declining inflation and some uncertainty about the
medium-term trajectory of the exchange rate lead to low monetary
flexibility.
Argentina's external position has recently improved thanks to
better access to liquidity, but the country remains vulnerable to
adverse shocks. The government is likely to meet its foreign
currency debt service owed to commercial creditors (both domestic
and external) in the next 18 months largely through a combination
of dollar purchases in the foreign exchange market and borrowing
both at home and abroad.
Foreign exchange reserve accumulation ramped up in 2026, with the
central bank's purchases of U.S. dollars exceeding $10 billion
during the first five months of the year. Dollar inflows have risen
due to very good export performance--and the liquidation of the
agriculture harvest, particularly--corporate and provincial bond
issuance, as well as increased credit in U.S. dollars.
Nevertheless, Argentina's net foreign exchange reserves, which
deduct debt owed to China for a currency swap, reserve requirements
on dollar deposits in the banking system, and other liabilities
(such as loans from the IMF), are likely to remain modestly
negative. Favorable external flows and S&P's expectation of gradual
ramp-up in gross reserves (including gold and available swap lines
from China) support the upgrade.
S&P said, "We expect a slight current account deficit of -0.2% of
GDP in 2026, improving from -1.1% in 2025, reflecting a better
trade balance mostly driven by robust export performance, a similar
services deficit, and a modestly larger income deficit. The
financial account was affected in 2025 by private capital outflows,
including by residents investing abroad (especially after adverse
election results for Milei in the province of Buenos Aires in
September 2025). Based on the assumption of continued gradual
economic stabilization, we believe the current account could post
modest surpluses in 2027-2029. We expect foreign direct investment
(FDI) and portfolio inflows to improve."
Successful development of Argentina's nonconventional energy
resources should improve GDP growth and balance-of-payments
dynamics over time. The energy sector is growing rapidly and could
generate a trade surplus of US$10 billion in 2026 (1.4% of GDP)
from US$5.9 billion in 2024 and deficits of 0.5% of GDP between
2017 and 2023. S&P projects narrow net external debt to average
about 155% of current account receipts (CARs) in 2026-2027 and
gross external financing needs to usable reserves and CARs to
average about 130% over 2027-2029.
Fiscal surpluses are the anchor of the economic stabilization
program. The administration's commitment to fiscal austerity has
remained robust even amid several months of poor revenue
performance. The administration continues to navigate the task of
reconciling its fiscal targets with congressional spending demands
and its own commitment to further tax cuts. S&P said, "We expect
the general government (GG) balance, which includes local
governments and social security, to post a modest 0.7% of GDP
deficit in 2026 and of 1% in 2027-2029. We project that primary
fiscal surpluses should contribute to mitigating pressures on debt
service financing needs."
Argentina has limited monetary flexibility due to its history of
high inflation. Steps to strengthen the autonomy of the central
bank (BCRA) could gradually boost monetary policy credibility.
S&P expects average inflation to decline to 32% in 2026 from 42% in
2025, and fall toward 9% by 2029. These levels compare with 207%
inflation in 2024. There has been less passthrough from exchange
rate depreciation into inflation in the past couple of years.
However, the inflation rate remains above the rate of depreciation,
which could pose challenges for external competitiveness.
S&P Global Ratings ranks the banking sector of Argentina in group
'9' under its Banking Industry Country Risk Assessment (BICRA).
Argentine banks continue to show good liquidity and regulatory
solvency. Just over 20% (21.7% as of December 2025) of loans and
33% of deposits are in foreign currency. Banking system assets'
exposure to government securities is 27%. While loans are fully
covered by loss provisions, reported nonperforming loans hiked to
7.0% as of March 2026, partly due to the strong increase in
interest rates in the second half of 2025 amid pressures on the
exchange rate during the legislative elections that affected debt
refinancing capacity, especially for households. S&P expects credit
to the private sector from resident financial institutions to
resume only gradually and rise to roughly 18% by 2029, from 15.6%
in 2025 (which is very low by global standards).
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
Upgraded
To From
Argentina
Sovereign Credit Rating B-/Stable/B CCC+/Stable/C
Transfer & Convertibility Assessment
Local Currency B B-
Senior Unsecured B- CCC+
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B A H A M A S
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FTX GROUP: Bankman-Fried Seeks Trump Pardon on Fraud Conviction
---------------------------------------------------------------
Dorothy Atkins at law360.com reports that FTX founder Sam
Bankman-Fried, who is currently serving a 25-year prison sentence,
has asked President Donald Trump to pardon him for defrauding
customers who placed billions of dollars with the fallen
cryptocurrency exchange, according to the U.S. Department of
Justice's Office of the Pardon Attorney.
About FTX Group
FTX is the world's second-largest cryptocurrency firm. FTX is a
cryptocurrency exchange built by traders, for traders. FTX offers
innovative products including industry-first derivatives, options,
volatility products and leveraged tokens.
Then CEO and co-founder Sam Bankman-Fried said Nov. 10, 2022, that
FTX paused customer withdrawals after it was hit with roughly $5
billion worth of withdrawal requests.
Faced with liquidity issues, FTX on Nov. 9, 2022, struck a deal to
sell itself to its giant rival Binance, but Binance walked away
from the deal amid reports on FTX regarding mishandled customer
funds and alleged US agency investigations. SBF agreed to step
aside, and restructuring vet John J. Ray III was quickly named new
CEO.
FTX Trading Ltd (d/b/a FTX.com), West Realm Shires Services Inc.
(d/b/a FTX US), Alameda Research Ltd. and certain affiliated
companies then commenced Chapter 11 proceedings (Bankr. D. Del.
Lead Case No. 22-11068) on an emergency basis on Nov. 11, 2022.
Additional entities sought Chapter 11 protection on Nov. 14, 2022.
FTX Trading and its affiliates each listed $10 billion to $50
billion in assets and liabilities, making FTX the biggest
bankruptcy filer in the US this year.
According to Reuters, SBF shared a document with investors on Nov.
10, 2022, showing FTX had $13.86 billion in liabilities and $14.6
billion in assets. However, only $900 million of those assets were
liquid, leading to the cash crunch that ended with the company
filing for bankruptcy.
The Hon. John T. Dorsey is the case judge.
The Debtors tapped Sullivan & Cromwell, LLP as bankruptcy counsel;
Landis Rath & Cobb, LLP as local counsel; and Alvarez & Marsal
North America, LLC as financial advisor. Kroll is the claims
agent, maintaining the page
https://cases.ra.kroll.com/FTX/Home-Index
The Official Committee of Unsecured Creditors tapped Paul Hastings
as counsel, FTI Consulting, Inc., as financial advisor, and
Jefferies LLC as the investment banker. Young Conaway Stargatt &
Taylor LLP is the Committee's Delaware and conflicts counsel.
Montgomery McCracken Walker & Rhoads LLP, led by partners Gregory
T. Donilon, Edward L. Schnitzer, and David M. Banker, is
representing Sam Bankman-Fried in the Chapter 11 cases.
White-collar crime specialist Mark S. Cohen has reportedly been
hired to represent SBF in litigation. Lawyers at Paul Weiss
previously represented SBF but later renounced representing the
entrepreneur due to a conflict of interest.
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B R A Z I L
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AZUL SA: Judge Blocks Creditors in Brazil Under Ch. 11 Plan
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Rick Archer at law360.com reports that a New York bankruptcy judge
has ruled Brazilian airline Azul SA's Chapter 11 plan wiped clean
debts two banks are seeking to collect in the Brazilian courts,
overruling arguments he had no jurisdiction over the dispute.
About Azul SA
Headquartered in Barueri near the City of Sao Paulo, Brazil, Azul
S.A. is a Brazilian airline founded by David Neeleman in 2008.Â
The company is the largest airline in Brazil by number of cities
covered and departures, serving more than 160 destinations with an
operating fleet of 168 aircraft and operating more than 900
flights
daily.
Azul S.A. and affiliates sought protection under Chapter 11 of the
U.S. Bankruptcy Code (Bankr. S.D.N.Y. Case No. 25-11176) on May
28, 2025, listing up to $10 billion in both assets and
liabilities.
Judge Sean H. Lane oversees the case.
The Debtors tapped Davis Polk & Wardwell LLP and Togut, Segal &
Segal LLP as counsel.
On June 13, 2025, the United States Trustee for Region 2 appointed
the Committee under section 1102 of the Bankruptcy Code.
On December 19, 2025, Judge Lane entered an order confirming
the company's overwhelmingly consensual plan of
reorganization. On February 20, 2026, Azul completed its
restructuring and emerged from bankruptcy.
As reported in the Troubled Company Reporter-Latin America on March
17, 2026, Fitch Ratings has assigned 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.
JSL SA: Fitch Affirms & Then Withdraws 'BB-' LongTerm IDRs
----------------------------------------------------------
Fitch Ratings has affirmed and withdrawn JSL S.A.'s (JSL) 'BB-'
Long-Term Foreign Currency (FC) and Local Currency (LC) Issuer
Default Ratings (IDRs). At the time of withdrawal, the Outlook was
Stable. Fitch has also affirmed JSL's Long-Term National Scale
Ratings and its unsecured debentures issuance at 'AA(bra)'. The
Rating Outlook is Stable.
The ratings reflect JSL's strong business profile, underpinned by
its robust scale, diversified service portfolio, and resilient
profitability. The rating also incorporates the company's leading
position in the Brazilian road logistics and dedicated services
segments, where it has grown rapidly through organic expansion and
acquisitions. The ratings also reflect Fitch's expectation of
positive FCF, supported by lower capex and accelerating used-asset
sales. These factors should keep net debt/EBITDA below 3.0x over
the rating horizon. The rating also reflects adequate liquidity and
a well-managed debt amortization profile.
Fitch has withdrawn the LC and FC IDRs for commercial reasons.
Key Rating Drivers
Parent and Subsidiary Linkage: JSL's ratings reflect its Standalone
Credit Profile (SCP), which is aligned with that of its parent,
Simpar S.A. (Simpar). Fitch expects the two entities' ratings to
remain aligned, given the strong ties between JSL and Simpar, even
if either company's standalone credit profile changes. Medium legal
and strong operational and strategic incentives to support JSL
equalize the ratings of the two companies. Limited legal
ring-fencing and Simpar's control of JSL support a consolidated
analysis.
Strong Business Profile: JSL's strong business profile is a result
of its robust scale in the fragmented and competitive outbound
logistics market (FTL) in Brazil. FTL has a relatively low capital
intensity and an average business risk, which is strongly
correlated with the economic cycle. In addition, there are few
barriers to entry.
The company also benefits from its broad service portfolio, its
diversified customer base and a relevant presence at inbound
logistics, a more capital-intensive segment, where the strategic
and operational nature of the services provided and the medium- to
long-term contracts mitigate its exposure to more volatile economic
cycles. JSL's robust scale provides greater bargain purchase power
to buy assets for the inbound segment and in the routing of its
outbound activities.
Adequate Operating Performance: Fitch expects JSL's EBITDAR to
increase gradually over the next two years. Fitch forecasts
adjusted EBITDAR of BRL2.3 billion in 2026 and BRL2.5 billion in
2027, compared to BRL2.0 billion in 2025. EBITDAR margins should
average around 22% over the rating horizon, in line with the 21%
average between 2023 and 2025. Fitch projects cash flow from
operations (CFFO) to reach BRL570 million in 2026 and BRL700
million in 2027.
Positive FCF: Fitch expects FCF to remain positive, underpinned by
the strategy to reduce capex by transitioning to an asset-light
transportation model, whereby the company will rely on third-party
carriers rather than owning and maintaining its own fleet,
materially reducing vehicle acquisition requirements. Base case
scenario incorporates neutral to slightly positive net capex over
the rating horizon, resulting in FCF of approximately BRL175
million in 2026 and BRL550 million in 2027.
Moderate Capital Structure: Fitch expects gross and net adjusted
debt to adjusted EBITDAR to decline towards 3.0x and 2.5x,
respectively, by 2027, following lower capex. These metrics were
4.3x and 3,4x, respectively, on average, from 2022 to 2025, and
4.1x and 3.4x in 2025.
Peer Analysis
JSL has the weakest position in the 'BB' rating category relative
to transportation and logistics peers across the region, which are
generally rated in the 'BB' to 'BBB' categories. JSL's rating is
constrained by its operation in the cyclical road transportation
market, lower operating margins and the weakest capital structure
among Brazilian peers, including MRS Logistica S.A. (Local Currency
IDR BBB-/Stable), Rumo S.A. (Local Currency IDR BB+/Watch
Negative), and VLI S.A. (AAA[bra]/Stable).
JSL's net leverage is expected to remain above the other rated
Brazilian peers in the transportation and logistics sector with
more mature operations and with higher ratings. Rumo, VLI and MRS
Logistica should report net leverage below 2.5x in the next two
years.
Fitch’s Key Rating-Case Assumptions
- Organic revenue growth of 8.8% in 2026 and 8.2% in 2027;
- EBITDAR margin averaging 22% in 2026-2028;
- Total capex of BRL1.2 billion in the 2026-2028;
- Dividend payout at 30%.
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
('bb-', Higher), market and competitive positioning ('bb+',
Moderate), diversification and asset quality ('bb', Lower), company
operational characteristics ('bb', Moderate), profitability ('bb+',
Moderate), financial structure ('bb-', 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 2026 and 40% for the forecast
year 2027.
The governance assessment of 'good' has no impact.
The operating environment assessment of 'bb' has no impact.
The SCP is 'bb-'.
To derive the Long-Term IDR:
Fitch made no adjustments to the SCP, resulting in an IDR of
'BB-'.
Application of Fitch's Parent Subsidiary Linkage Rating Criteria
results in a same credit profile for both parent and subsidiary
approach
RATING SENSITIVITIES
Factors that Could, Individually or Collectively, Lead to Negative
Rating Action/Downgrade
- A downgrade of Simpar's ratings;
- Deterioration of SCP of Simpar, Movida, Vamos would warrant a
review of JSL's ratings.
Factors that Could, Individually or Collectively, Lead to Positive
Rating Action/Upgrade
- An upgrade of Simpar's ratings;
- Improvement of Simpar's, Movida's, Vamos' SCP would warrant a
review of JSL's ratings.
Liquidity and Debt Structure
JSL's positive FCF trends and access to capital markets help the
company manage its liquidity. As of March 2026, JSL had BRL1.4
billion of cash and equivalents, BRL288 million of undrawn
committed credit lines and BRL8.1 billion of total adjusted debt,
with BRL1.7 billion due in the short term and BRL987 million in
2027, according to Fitch's criteria.
The company's debt profile is mainly comprised of agribusiness
receivables certificates (CRAs; certificado de recebiveis do
agronegocio) and real estate receivables certificate (CRIs;
certificado de recebiveis imobiliários) (37%), local debentures
(23%) and Finame lines (10%).
Issuer Profile
JSL is the largest integrated road logistics company in Brazil,
operating outbound and inbound logistics, serving corporate clients
in Brazil, Mercosul and South Africa. JSL is publicly traded on
Brasil, Bolsa, Balcão (B3 S.A.). Its free float is 22.1%, and
Simpar holds 71.9% as the main shareholder.
Summary of Financial Adjustments
- Fitch considers interest on lease obligations and amortization of
vehicle right-of-use assets to be operating items that affect
EBITDA;
- Fitch adjusts JSL's debt to include vehicle lease liabilities
related to right-of-use assets.
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 JSL S.A.
Fitch uses Climate Vulnerability Signals (Climate.VS) as a
screening tool to identify credits with higher exposure to
climate-related risks. If Fitch identifies an entity as higher risk
(i.e. its Climate.VS in 2035 is 50 or higher), the entity receives
additional analysis and consideration in rating reviews. Climate.VS
range from 0 (lowest risk) to 100 (highest risk). For more
information on Climate.VS, see Fitch's Corporate Rating Criteria.
For more detailed, sector-specific information on how Fitch
perceives climate-related transition risks, see Fitch's latest
'Climate Vulnerability Signals for Non-Financial Corporate Sectors"
report.
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
----------- ------ -----
JSL S.A. LT IDR BB- Affirmed BB-
LT IDR WD Withdrawn
LC LT IDR BB- Affirmed BB-
LC LT IDR WD Withdrawn
Natl LT AA(bra) Affirmed AA(bra)
senior unsecured Natl LT AA(bra) Affirmed AA(bra)
MOVIDA PARTICIPACOES: Fitch Affirms 'BB-' IDRs, Outlook Stable
--------------------------------------------------------------
Fitch Ratings has affirmed Movida Participaçoes S.A.'s (Movida)
'BB-' Long-Term Foreign Currency (FC) and Local Currency (LC)
Issuer Default Ratings (IDRs) and its senior unsecured bond issued
by Movida Europe S.A. at 'BB-'. Fitch has also affirmed Movida's
Long-Term National Scale Ratings and its unsecured debentures
issuance at 'AA(bra)'. The Rating Outlook is Stable.
Movida's ratings are supported by its solid business position as
the second-largest player in Brazil's car and fleet rental
industry, underpinned by relevant scale, a national footprint and
demonstrated bargaining power with auto manufacturers across both
the rent-a-car (RaC) and fleet management (GTF) segments. The
ratings also reflect Fitch's expectation of a sustained decline in
leverage. Net debt/EBITDA will remain below 3.0x over the rating
horizon, supported by a BRL750 million capital injection in 2026,
accelerating used-car sales, a gradual recovery in return on
invested capital (ROIC) toward historical levels and positive FCF
in 2026.
Key Rating Drivers
Parent and Subsidiary Linkage: Movida's ratings reflect its
Standalone Credit Profile (SCP), which is aligned with that of its
parent, Simpar. Fitch expects the two entities' ratings to remain
aligned given the strong ties between Movida and Simpar, even if
either company's SCP changes. Medium legal and strong operational
and strategic incentives to support Movida equalize the ratings of
the two companies. Limited legal ring-fencing and Simpar's control
of Movida support a consolidated analysis.
Capital Injection Accelerates Deleveraging: Fitch expects the
capital increase to reduce Movida's leverage, in addition to
supporting stronger EBITDA generation. Fitch expects net
debt/EBITDA to remain below 3.0x over the rating horizon, compared
with an average of 3.6x in 2022-2025 and 3.2x in 2025, following
Movida's aggressive growth through 2024. The rating case includes a
BRL750 million capital injection in 2026, which allows BNDESPar to
acquire approximately 5.95% of Movida's total capital and dilute
Simpar's stake to 60.9% from 69.5% prior to the transaction.
FCF Turning Positive: Movida's strategy to improve its capital
structure should improve the company's cash flow profile. Fitch's
rating case assumes Movida will accelerate used car sales (97,975
and 92,358, respectively, in 2026 and 2027, compared to 97,345 in
2025). Fitch forecasts cash flow from operations to reach BRL3.8
billion in 2026 and BRL4.2 billion in 2027. Fitch expects FCF to
turn positive in 2026, at approximately BRL475 million, after net
capex of BRL3.2 billion. It will become negative in 2027 and 2028
after average annual net capex of BRL4.7 billion, partially funded
by debt, and a dividend payout ratio of 25%.
Adequate Operating Performance: Fitch expects Movida's EBITDA to
increase gradually over the next two years, mainly based on rate
repositioning and resilient margins. Balanced demand and supply
dynamics should continue to allow adequate rental rates, resulting
in a gradual recovery of Movida's ROIC closer to historical levels.
Fitch forecasts consolidated net revenue of BRL16.1 billion (up
9.7% from 2025) and adjusted EBITDA of BRL6.1 billion (37.3%
margin, up 12% from 2025) in 2026, and BRL16.6 billion and BRL6.6
billion (39.8% margin) in 2027 from BRL14.7 billion and BRL5.4
billion (36.9% margin), respectively, in 2025.
Solid Business Position: As the second-largest player in the car
and fleet rental industry in Brazil, Movida has a strong business
position supported by its relevant scale, positive operating
performance, national footprint and an adequate used car sale
operation. As of March 2026, Movida's total fleet of 267,000
vehicles — consisting of 125,307 in RaC and 141,949 in GTF —
secured meaningful market shares in both RaC and GTF. Movida has
demonstrated strong bargaining power with auto manufacturers and
captures economies of scale. At YE2026 and YE2027, Fitch forecasts
Movida's own total fleet at approximately 276,100 and 287,400
vehicles, respectively.
Peer Analysis
Movida's credit profile is weaker than that of Localiza Rent-a-Car
S.A. (Localiza; FC and LC IDRs BB+ and National Long-Term Rating
AAA(bra), all with a Stable Outlook). It has a smaller scale
compared to that of Localiza and a weaker financial profile, with
higher leverage and more pressured FCF. These factors constrain its
SCP.
Compared with Unidas Locações e Serviços S.A. (Unidas; FC and LC
IDRs BB- and National Long-Term Rating AA(bra), all with a Positive
Outlook), Movida has larger scale and a stronger business profile.
These advantages are offset by slightly higher historical leverage
compared to Unidas.
Fitch’s Key Rating-Case Assumptions
- Total fleet increase by 0.5% in 2026 and 4.1% in 2027;
- Average ticket for RaC and GTF increasing 7.5% in 2026 and 6.0%
in 2027;
- Net capex of BRL3.2 billion in 2026, BRL4.4 billion in 2027 and
BRL4.9 billion in 2028;
- Capital increase of BRL750 million in 2026;
- Dividend payout of 25%.
Corporate Rating Tool Inputs and Scores
Fitch scored the issuer as follows, using its Corporate Rating Tool
(CRT) to produce the SCP:
- Business and financial profile factors (assessment, relative
importance): management (bb, Moderate), sector characteristics
(bb+, Lower), market and competitive positioning (bb+, Higher),
diversification and asset quality (bbb-, Moderate), company
operational characteristics (bb, Moderate), profitability (b+,
Moderate), financial structure (bb-, 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 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 assessment of 'good' has no impact.
- The Operating Environment assessment of 'bb' has no impact.
- The SCP is 'bb-'.
- Fitch made no adjustments to the SCP, resulting in an IDR of
'BB-'.
- Application of Fitch's "Parent and Subsidiary Linkage Rating
Criteria" results in a same credit profile for both the parent and
subsidiary approach.
RATING SENSITIVITIES
Factors that Could, Individually or Collectively, Lead to Negative
Rating Action/Downgrade
- A downgrade of Simpar's ratings;
- Deterioration of the SCP of Simpar, Vamos or JSL would warrant a
review of Movida's ratings.
Factors that Could, Individually or Collectively, Lead to Positive
Rating Action/Upgrade
- An upgrade of Simpar's ratings;
- Improvement of the SCP of Simpar, Vamos or JSL would warrant a
review of Movida's ratings.
Liquidity and Debt Structure
Movida has been successful in issuing new debt and refinancing the
high short-term debt. As of March 2026, Movida had BRL3.9 billion
of cash and equivalents and BRL21.7 billion of total adjusted debt,
with BRL4.5 billion due in the short term. During the second
quarter of 2026, the company issued USD350 million (BRL1.75
billion) of senior notes, due in 2033, which also contributed to
extend the debt maturity profile, releasing pressure during 2026.
Movida's debt profile is mainly comprised of local debentures
(BRL15.2 billion or 70%), bank loans (BRL7.0 billion or 33%) and
the fully hedged U.S. dollar denominated bonds due 2031 (BRL2.5
billion or 12%). The company's ability to postpone growth capex to
adjust to the economic cycle and the considerable number of the
group's unencumbered assets, with a book value of fleet over net
debt at around 1.3x, add to its financial flexibility.
Issuer Profile
Movida is Brazil's second-largest vehicle and fleet rental company
by fleet size and revenue, and also sells used vehicles. The
company is publicly traded on B3, with a free float of 32.9%;
Simpar is the main shareholder (60.9% stake).
Summary of Financial Adjustments
Fitch considers interest on rental obligations and amortization of
right-of-use to be operating items; they impact 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 Movida Participacoes 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
----------- ------ -----
Movida Europe S.A.
senior unsecured LT BB- Affirmed BB-
Movida Participacoes S.A.
LT IDR BB- Affirmed BB-
LC LT IDR BB- Affirmed BB-
Natl LT AA(bra) Affirmed AA(bra)
senior unsecured Natl LT AA(bra) Affirmed AA(bra)
senior secured Natl LT AA(bra) Affirmed AA(bra)
SAO PAULO: Fitch Affirms 'BB' LongTerm IDRs, Outlook Stable
-----------------------------------------------------------
Fitch Ratings has affirmed the Brazilian State of Sao Paulo's (Sao
Paulo) Long-Term Foreign and Local Currency Issuer Default Ratings
(IDRs) at 'BB' with a Stable Rating Outlook and its Short-Term
Foreign and Local Currency IDRs at 'B'. Fitch has also affirmed Sao
Paulo's National Long-Term Rating at 'AAA(bra)' with a Stable
Outlook and its National Short-Term Rating at 'F1+(bra)'. Fitch
raised Sao Paulo's Standalone Credit Profile (SCP) to 'bb' from
'bb-'.
The State of São Paulo's IDRs are derived directly from its SCP.
Intergovernmental finance support is no longer reflected in the
state's ratings because São Paulo's SCP is already aligned with
the sovereign rating level, and such support cannot result in a
rating above that of the lending government, that is, the
sovereign. Intergovernmental debt accounts for 86.5% of direct
debt.
Fitch raised São Paulo's SCP due to an improvement in debt
coverage ratios, resulting from the renegotiation of its
intergovernmental debt. The federal government established the
Program for Full Payment of State Debts (Propag), which grants debt
service discounts on intergovernmental debt in exchange for debt
prepayment, investments in strategic sectors, and contributions to
a fund to be shared among Brazilian states.
In practice, Sao Paulo´s intergovernmental debt will now be
indexed to the IPCA (Consumer Price Index) and will carry a 0%
interest rate. Previously, debt cost was the lowest between IPCA
plus 4% or the policy rate (Selic). The amortization schedule has
also been extended by nine years until 2056.
KEY RATING DRIVERS
Standalone Credit Profile
The State of Sao Paulo SCP of 'bb' is derived from a 'Low Midrange'
risk profile, 'a' financial profile, and the peer comparison.
Risk Profile: 'Low Midrange'
State of Sao Paulo's 'Low Midrange' risk profile resulted from a
mix of 'Midrange' and 'Weaker' assessments of six key risk factors,
as outlined below.
Revenue Robustness: 'Midrange'
Fitch evaluates Revenue Robustness as 'Midrange' due to the state's
high fiscal autonomy, with very low dependency on federal
transfers.
The Brazilian tax collection framework transfers a large share of
the responsibility to collect taxes to states and municipalities.
Constitutional transfers exist as a mechanism to compensate poorer
entities. For that reason, Fitch considers the high dependency on
transfers as a weak feature for Brazilian local and regional
governments (LRGs).
The primary metric for Revenue Robustness is the transfers ratio
(transfers to operating revenues). Fitch classifies LRGs with a
transfer ratio more than or equal to 40% as 'Weaker' and those with
a ratio below 40% as 'Midrange'. Sao Paulo reports high fiscal
autonomy, with a low transfer ratio, which drives this factor to
'Midrange'. Transfers averaged 10.6% of operating revenue in
2021-2025, and 12.6% in 2025.
Between 2020 and 2025, operating revenues dropped by an average of
0.4% annually in real terms, compared to a 3.3% average GDP growth.
The weaker performance of tax revenue reflects limitations to the
Imposto sobre Circulação de Mercadorias e Serviços (ICMS) tariff
over fuels, electricity and telecommunications imposed by the
Brazilian National Congress in July 2022, which were only partially
reversed later.
Moreover, the state exempted pensioners benefit up to the national
security system ceiling from pension contributions, reducing
contributions from 2023. Fitch expects operating revenues to align
with GDP growth going forward. In fact, operating revenues
increased 6.2% in real terms between 2023 and 2025.
Revenue Adjustability: 'Weaker'
Fitch evaluates this factor as 'Weaker' due to Brazilian states'
reliance on a small number of taxpayers and the history of federal
intervention in state tax policy.
Fitch believes Brazilian states and municipalities have limited
capacity to increase revenue during a downturn. Tax tariffs are
close to the constitutional national ceiling, and a few taxpayers
contribute a large share of tax collection. Brazil also has a
history of federal intervention in subnational taxation. In July
2022, the National Congress set a ceiling on the ICMS tariff on
fuels and electricity. This caused revenue losses for states and
municipalities, which were only partially reversed later.
The most significant tax, the ICMS, has a concentrated taxpayer
base. The state reports that, on average, the 10 largest taxpayers
corresponded to 32% of total ICMS tax collection, by sector, in
2024.
Expenditure Sustainability: 'Midrange'
Fitch evaluates Expenditure Sustainability as 'Midrange' due
adequate operating margins in recent years.
States have moderately countercyclical responsibilities because
they handle healthcare, education and law enforcement. Expenditures
grow with revenues due to earmarked revenues. States and
municipalities must allocate a share of revenues to health and
education. This creates procyclical spending in good times, as
strong revenue growth drives spending. However, personnel
expenditures are significant, and salary costs remain rigid,
preventing expenditures from dropping at a similar pace during
downturns despite lower revenues.
Sao Paulo reports moderate control over expenditure growth, with
sound margins. Operating margins averaged 12.5% in 2021-2025 and
9.9% at YE 2025. The state is current on its payroll bill and has
no significant delays for the payment of suppliers. The state
recorded a negative operating expenditure compound average growth
rate (CAGR) of -0.87% in real terms in 2020-2025, aligned operating
revenues CAGR of -0.41%. As per the local fiscal framework, Sao
Paulo pursues a current savings ratio of at least 10%.
Expenditure Adjustability: 'Weaker'
Fitch evaluates Expenditure Adjustability as 'Weaker' due to budget
rigidity and the limited ability to reduce spending.
Brazilian local governments have a rigid cost structure, driving
this factor to 'Weaker'. As per the Brazilian Constitution,
expenditure cuts have limited flexibility, especially for payroll
and pensions. As a result, whenever there is an unpredictable
revenue reduction, operating expenditures does not decline in
parallel.
Sao Paulo's personnel expenditures were 43.2% of total expenditures
in 2025. This item has very limited flexibility for adjustments
given salary rigidity and limited ability to manage human resources
or pensions. Other operating expenditures were close to 46% of
total expenditures in 2025 with some flexibility for adjustments.
However, they are still limited by constitutional mandates on
health and education. Capex was 6.4% of total spending in 2025 and
averaged 6.7% between 2021 and 2025. Brazilian LRGs often rely on
investment cuts in challenging economic scenarios.
Liabilities and Liquidity Robustness: 'Midrange'
Fitch evaluates liabilities and liquidity robustness as 'Midrange'
due to the state's relatively easy access to new lending and the
robust subnational framework for debt.
The Brazilian credit market for subnational governments is rather
limited and highly controlled by the federal government. LRGs often
seek new loans with federal guarantees, which are only granted to
subnationals rated 'A' or 'B' under the National Treasury's CAPAG
assessment. Within this limited market, the State of Sao Paulo has
relatively easier access to new loans, given the strength of its
economy.
There is a moderate national framework for debt and liquidity
management, characterized by prudent borrowing limits and
restrictions on loan types. Sao Paulo does not present maturity
concentration. External debt accounted for 7.7% of direct debt as
of YE 2025, with no relevant maturity concentration. Debt directly
owed to the federal government represented 86.5% of total debt in
December 2025, or BRL306.8 billion.
Net adjusted debt totaled BRL338.225 billion as of YE 2025,
reflecting unrestricted cash balances of BRL30.7 billion. Sao
Paulo's intergovernmental debt increased significantly in recent
years because the national Treasury applied a monetary adjustment
linked to the Selic rate. Under the Propag, the dynamics of
intergovernmental debt stock are expected to improve. Debt
indexation will be limited to the IPCA.
Sao Paulo has joined the Propag and renegotiated the terms of its
intergovernmental debt with the sovereign. The debt cost was
lowered to IPCA +0% and the amortization profile extended until
2056. Sao Paulo committed to a 20% prepayment of intergovernmental
debt, which will be mainly paid with resources from the FNDR (Fundo
Nacional de Desenvolvimento Regional), starting in 2029. Overall,
the renegotiation leads to substantially lower debt cost with
immediate impact and a more favorable intergovernmental debt
dynamics, which is likely to start decreasing by 2029. Fitch
expects savings from lower debt service to be redirected to capex.
Under the Fiscal Responsibility Law of 2000, Brazilian LRGs are
required to comply with indebtedness limits. Consolidated net debt
for states cannot exceed 2x (200%) of net current revenue. The
State of Sao Paulo reported a debt ratio of 123.5% as of YE 2025,
according to the National Treasury's calculations. The law sets a
limit on guarantees at 32% of the current net revenue. Sao Paulo
reported guarantees to state-owned companies totaling 1.94% of net
current revenue in 2025.
There is moderate off-balance-sheet risk stemming from the pension
system, which represents a burden for most Brazilian LRGs,
especially for states given a mandate over education and public
security. Another relevant contingent liability is the payment of
judicial claims, or "precatorios".
Liabilities and Liquidity Flexibility: 'Midrange'
The federal government has a framework to provide emergency
liquidity support by extending the maturity date for the state's
federal debt. Fitch assesses the entity's available liquidity,
excluding sovereign support, to decide between 'Weaker' and
'Midrange' assessments for liabilities and liquidity flexibility.
Fitch's liquidity rate for Brazilian LRGs is defined as the ratio
of short-term financial obligations to net cash, as established by
the previous version of the CAPAG system by the Brazilian National
Treasury. The CAPAG, or Capacidade de Pagamento, decides which
entities qualify for federal government guarantees.
Fitch has set a threshold of 100% for the average of the last three
years (2023-2025) and for the last year-end results available
(December 2025), which would result in a 'Midrange' assessment for
this factor. Sao Paulo reported a three-year average liquidity
ratio of 49.4%. As of December 2025, the metric reached 55.9%,
supporting the 'Midrange' assessment.
Financial Profile: 'a category'
Financial Profile: 'a category'
Fitch's rating case forward-looking scenario indicates that the
payback ratio (net adjusted debt to operating balance), the primary
metric of the financial profile, is expected to average 9.4x for
the period from 2028 to 2030, in line with an 'a' assessment. The
actual debt service coverage ratio (ADSCR), the secondary metric,
is projected to average 1.5x in 2028-2030, at the high-end of the
'bbb' category.
Fiscal debt burden is projected at 81% for the same period. Fitch
assesses Sao Paulo overall financial profile at 'a' considering
that the secondary metric is only one category below the primary
metric. Overall, leverage ratios are in line with the previous
annual review, but coverage ratios strengthened to 1.5x from 1.1x
on the back of the intergovernmental debt renegotiation.
To join the Proprag, Sao Paulo renegotiated a 20% prepayment of
intergovernmental debt plus 1% contribution to the FEF (Fundo de
Equalização Federativa) and 1% investments in strategic sectors.
Starting on February 2026, intergovernmental debt cost was reduced
to IPCA + 0% from IPCA +4% (or Selic, the lowest between the two).
Debt prepayment will be mainly performed with transfer from the
FNDR, a compensation fund created within the Brazilian Consumption
Tax Reform, that will kick in starting in 2029 and gradually
increase with the transition to the new tax system.
In practice, this means that the extraordinary amortization of
intergovernmental debt stock will only start by 2029 and gradually
increase until it achieves the 20% reduction. Therefore, Fitch
observes an immediate impact over debt coverage ratios, but
leverage is expected to remain stable until the end of the rating
horizon (2030).
Short-Term Ratings
Sao Paulo's Short-Term Foreign and Local Currency ratings are
positioned at 'B' following the Rating Correspondence Table. For
the national scale, the correspondence table indicates an
'F1+(bra)' Short-Term rating.
National Ratings
Sao Paulo's national scale rating is affirmed at 'AAA(bra)',
reflecting the peer comparison and the potential support from the
sovereign through intergovernmental debt.
Peer Analysis
The State of São Paulo's IDRs are derived directly from its SCP.
Intergovernmental finance support is no longer reflected in the
state's ratings because its SCP is already aligned with the
sovereign rating level, and such support cannot result in a rating
above that of the lending government, i.e. the sovereign.
Nevertheless, intergovernmental debt accounts for 86.5% of direct
debt. Sao Paulo´s closest peers are the City of Rio de Janeiro
('BB'/Stable) and Distrito Especial Industrial y Portuario de
Barranquilla ('BB'/Stable).
Issuer Profile
The State of Sao Paulo is classified by Fitch as a Type B local and
regional government, which is required to cover debt service from
cash flow on an annual basis. Sao Paulo is the most populous
Brazilian state, with about 45.9 million people. It is also the
strongest regional economy, accounting for about 31% of national
GDP.
Key Assumptions
Risk Profile: 'Low Midrange'
Revenue Robustness: 'Midrange'
Revenue Adjustability: 'Weaker'
Expenditure Sustainability: 'Midrange'
Expenditure Adjustability: 'Weaker'
Liabilities and Liquidity Robustness: 'Midrange'
Liabilities and Liquidity Flexibility: 'Midrange'
Financial Profile: 'a'
Asymmetric Risk: 'N/A'
Support (Budget Loans): 'N/A'
Support (Ad Hoc): 'N/A'
Rating Cap (LT IDR): 'N/A'
Rating Cap (LT LC IDR) 'N/A'
Rating Floor: 'N/A'
Quantitative assumptions - Issuer Specific
Fitch's rating case is a "through-the-cycle" scenario, which
incorporates a combination of revenue, cost and financial risk
stresses. It is based on 2021-2025 figures and 2026-2030 projected
ratios. The key assumptions for the scenario include:
- YoY 4.4% increase in operating revenue on average in 2026-2030;
- YoY 4.6% increase in tax revenue on average in 2026-2030;
- YoY 4.7% increase in operating expenditure on average in
2026-2030;
- Net capital balance of - BRL 31,947 million on average in
2026-2030;
- Cost of debt: 2.4% on average in 2026-2030.
Quantitative assumptions - Sovereign Related
Figures as per Fitch's sovereign actual for 2025 and forecast for
2026-2027, respectively (no weights and changes since the last
review are included as none of these assumptions was material to
the rating action).
Rating Sensitivities
Factors that Could, Individually or Collectively, Lead to Negative
Rating Action/Downgrade
A negative rating action on Brazil's Long-Term IDR would lead to a
corresponding rating action on Sao Paulo, given that, per criteria,
Brazilian LRGs cannot be rated above the sovereign.
Sao Paulo's IDRs would be downgraded if its enhanced payback ratio
is projected above 9x and its enhanced ADSCR is projected below
1.2x, which Fitch views as unlikely.
Factors that Could, Individually or Collectively, Lead to Positive
Rating Action/Upgrade
A positive rating action on Brazil's Long-Term IDR could lead to a
corresponding rating action on Sao Paulo, given that the state
could benefit from intergovernmental finance support.
Climate Vulnerability Signals
The results of its Climate.VS screener did not indicate an elevated
risk for Sao Paulo, State of.
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
----------- ------ -----
Sao Paulo, State of
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)
SIMPAR SA: Fitch Affirms 'BB-' LongTerm IDRs, Outlook Stable
------------------------------------------------------------
Fitch Ratings has affirmed Simpar S.A.'s (Simpar) Long-Term Foreign
and Local Currency Issuer Default Ratings (IDRs) at 'BB-' and its
Long-Term National Scale Rating at 'AA(bra)'. Fitch has also
affirmed the senior unsecured bond issuances of Simpar and its
financial vehicles at 'BB-'. The Rating Outlook is Stable.
Simpar's ratings reflect its large scale, robust business profile
and strong competitive position in Brazil's rental and logistics
industry. The group benefits from a diversified service portfolio
and long-term contracts that support a significant portion of
revenue, underpinning solid and resilient operating performance.
Simpar's consolidated leverage continues to exceed the 'BB' rating
thresholds, and the ratings incorporate Fitch's expectation that
EBITDA growth and lower capex will lead to a gradual reduction in
leverage. This trend will help offset high cash burn from
still-elevated interest rates in Brazil. Simpar has adequate
liquidity and strong financial flexibility, supported by
unencumbered assets, although its consolidated debt maturity
profile remains concentrated. Simpar's rating headroom is low, and
weaker-than-expected cash flow generation, higher-than-expected
capex or inorganic growth could pressure the ratings.
Key Rating Drivers
Strong Business Profile: Simpar holds a No. 1 position in the
rental and logistics industry in Brazil, and its large scale
provides a competitive advantage in asset purchases and operating
costs compared with peers. The group's diversified service
portfolio and presence across multiple sectors also support its
credit profile. Long-term contracts account for approximately
70%-80% of cash flow across most of Simpar's rental and logistics
businesses, supporting a resilient and predictable cash flow
profile. Simpar's strategic and operational role and competitive
cost structure further minimize exposure to Brazil's more volatile
economic cycles.
Positive FCF: Simpar's shift to efficiency gains and capital
structure improvement marks a structural turning point and a key
credit positive, after years of negative free cash flow (FCF)
driven by aggressive fleet expansion. Fitch expects FCF to turn
positive from 2026, after being slightly negative in 2025, totaling
BRL2.1 billion in 2026 and 2027, after annual average capex of
BRL15.5 billion, partly funded by used vehicle sales of BRL9.7
billion on average. This compares with approximately BRL16.0
billion in annual expansion capex incurred over the prior two
years.
Fitch expects Simpar to reduce capex by transitioning JSL S.A.
(JSL) to an asset-light transportation model, whereby JSL will rely
on third-party carriers rather than owning and maintaining its own
fleet, materially reducing vehicle acquisition requirements. In its
Movida and Vamos businesses, Simpar will renew rather than expand
its fleet, further containing capital intensity. Cash flow from
operations (CFO) should reach BRL6.1 billion in 2026 and BRL7.6
billion in 2027.
Solid Profitability: Fitch forecasts consistent, gradually
improving consolidated EBITDAR, driven mainly by operating
efficiency. Balanced demand and supply dynamics should support
adequate rental and service rates and high occupancy. This should
lead to a gradual recovery in Simpar's return on invested capital
(ROIC) toward historical levels. Fitch forecasts consolidated net
revenue of BRL50 billion (+15.5% over 2025) and adjusted EBITDAR of
BRL14.1 billion (28% margin, up 7.8% over 2025) in 2026, rising to
BRL54 billion and BRL15.3 billion (28.6% margin) in 2027. This
compares with BRL44 billion in revenue and BRL13 billion in EBITDAR
(30% margin) in 2025.
Moderate Capital Structure: Fitch forecasts Simpar's consolidated
gross and net adjusted debt to adjusted EBITDAR below 4.0x and
3.5x, respectively, in 2026 and 2027. The rating case includes a
BRL2.9 billion capital injection in 2026, of which BRL1.9 billion
was at the holding level. Consolidated net adjusted leverage
averaged 4.5x from 2023 to 2025 and stood at 3.9x in 2025,
reflecting Simpar's historically aggressive growth strategy. Fitch
revised the net leverage downgrade sensitivities to 4.0x from 5.5x
to reflect Simpar's structural shift toward positive FCF
generation, reduced capital intensity and improving debt
trajectory, and in line with the 'BB' rating thresholds.
Peer Analysis
Simpar's business profile is stronger than that of Localiza
Rent-a-Car S.A. (Localiza; BB+/Stable; AAA[bra]/Stable). Simpar
matches Localiza in scale and offers a more diversified service
portfolio but has a weaker financial profile, with higher leverage
and more concentrated debt amortization profile.
Compared with Unidas Locacoes e Servicos S.A. (BB-/Positive;
AA[bra]/Positive), Simpar has a higher scale and stronger and more
diversified business profile. These advantages are offset by
slightly higher historical leverage compared to Unidas.
RATING SENSITIVITIES
Factors that Could, Individually or Collectively, Lead to Negative
Rating Action/Downgrade
- Limits to Simpar's unrestricted ability to access the operating
companies' cash;
- Failure to preserve liquidity and inability to access adequate
funding;
- Prolonged decline in demand coupled with company inability to
adjust operations;
- Consolidated gross and net adjusted leverage above 4.5x and 4.0x
on a sustainable basis;
- Material deterioration on the group's fleet rental and logistics
businesses;
- Deterioration of SCP of Movida, Vamos, JSL would warrant a review
of Simpar's ratings.
Factors that Could, Individually or Collectively, Lead to Positive
Rating Action/Upgrade
- Consolidated gross and net adjusted debt/EBITDA below 3.5x and
3.0x on a sustainable basis;
- Consolidated EBITDA interest coverage above 4.0x
- Strengthening of the group's scale and profitability, without
further deterioration of its capital structure;
- Improvement of SCP of Movida, Vamos, JSL would warrant a review
of Simpar's ratings.
Liquidity and Debt Structure
Simpar has an adequate consolidated liquidity, with cash covering
adjusted short-term debt by 1.2x in March 2026. Expected moderate
capex resulting in a positive FCF trend is also a positive
liquidity assessment. The BRL2.9 billion in net cash from the
recent capital increase also enhances the company's liquidity, as
part of the proceeds will result in gross debt reduction. As of
March 2026, Simpar had BRL13.9 billion of cash and equivalents,
BRL800 million in undrawn committed credit lines, and BRL62 billion
in total adjusted consolidated debt (about 5% secured), with
BRL11.5 billion due in the short term. The group continues to have
a more concentrated debt amortization profile.
At the holding level, Simpar had BRL3.3 billion in cash and
equivalents and BRL6.1 billion in total debt, with BRL585 million
due in the short term. Simpar's strategy to reduce net debt to zero
will contribute to a more conservative financial profile.
Structural subordination risk is mitigated by Simpar's board
control and significant ownership in its operating companies, as
there are no restrictions on dividend upstreaming or intercompany
loans that a majority board vote cannot override.
The consolidated debt profile consists of mainly local debentures
(40%), bank loans (16%), agribusiness receivables certificates
(CRAs; certificados de recebiveis imobiliarios) and real estate
receivables certificates (CRIs; certificados de recebiveis
imobiliarios) (19%), and fully hedged USD bonds (13%). Simpar's
financial flexibility is also supported by the group's ability to
defer growth capex to adjust to economic cycles and considerable
unencumbered assets, with fleet market value over net debt at about
1.2x.
Fitch’s Key Rating-Case Assumptions
- Average consolidated annual revenue growth remains at 9.2% from
2026 to 2028;
- Consolidated EBITDAR margin averages 26.6% from 2026 to 2028;
- Average annual net capex at approximately BR6.2 billion in
2026-2028;
- Capital increase of BRL2.9 billion in 2026;
- Sale of Ciclus Amazonia for BRL121.5 million in 2026;
- Dividends of 25% of net income.
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
('bb+', Moderate), market and competitive positioning ('bbb-',
Moderate), diversification and asset quality ('bbb-', Higher),
company operational characteristics ('bb+', Moderate),
profitability ('bbb+', Lower), 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 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 assessment of 'good' has no impact.
The operating environment assessment of 'bb' has no impact.
The SCP is 'bb-'.
To derive the Long-Term IDR:
Fitch made no adjustments to the SCP, resulting in an IDR of
'BB-'.
Issuer Profile
Simpar is a non-operational holding company that controls and
manages eight independent companies that provide mainly rental,
logistics and mobility services, focused on long-term contracts.
The company is listed on the Brazilian stock exchange, and its main
shareholder is JSP Holding S.A. (48.7%), the Simoes family holding
company.
Summary of Financial Adjustments
- Fitch considers interest on lease obligations and amortization of
vehicle right-of-use assets to be operating items that affect
EBITDA;
- Fitch adjusts Simpar's debt to include vehicle lease liabilities
related to right-of-use assets.
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 Simpar S.A.
Fitch uses Climate Vulnerability Signals (Climate.VS) as a
screening tool to identify credits with higher exposure to
climate-related risks. If Fitch identifies an entity as higher risk
(i.e. its Climate.VS in 2035 is 50 or higher), the entity receives
additional analysis and consideration in rating reviews. Climate.VS
range from 0 (lowest risk) to 100 (highest risk). For more
information on Climate.VS, see Fitch's Corporate Rating Criteria.
For more detailed, sector-specific information on how Fitch
perceives climate-related transition risks, see Fitch's latest
"Climate Vulnerability Signals for Non-Financial Corporate Sectors"
report.
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
----------- ------ -----
Simpar S.A.
LT IDR BB- Affirmed BB-
LC LT IDR BB- Affirmed BB-
Natl LT AA(bra) Affirmed AA(bra)
senior unsecured Natl LT AA(bra) Affirmed AA(bra)
Simpar Europe
senior unsecured LT BB- Affirmed BB-
CS Finance S.a r.l.
senior unsecured LT BB- Affirmed BB-
VAMOS LOCACAO: Fitch Affirms 'BB-' LongTerm IDRs, Outlook Stable
----------------------------------------------------------------
Fitch Ratings has affirmed Vamos Locacao de Caminhoes, Maquinas e
Equipamentos S.A.'s (Vamos) 'BB-' Long-Term Foreign Currency (FC)
and Local Currency (LC) Issuer Default Ratings (IDRs) and the
senior unsecured bond issued by Vamos Europe at 'BB-'. Fitch has
also affirmed Vamos' Long-Term National Scale Ratings and its
unsecured debentures issuance at 'AA(bra)'. The Rating Outlook is
Stable.
Vamos' ratings are supported by its leadership position in Brazil's
heavy vehicles, machinery and equipment leasing market, underpinned
by strong bargaining power with suppliers, its nationwide presence
and an adequate used-asset retail operation in a
still-underpenetrated and highly fragmented sector. The ratings
also reflect Fitch's expectation that FCF will turn positive in
2027 — after being slightly negative in 2026 — supported by a
BRL600 million capital injection in 2026 and accelerating
used-asset sales. These factors, along with adequate liquidity and
a well-managed debt amortization profile, will keep net debt/EBITDA
below 3.5x over the rating horizon.
Key Rating Drivers
Parent and Subsidiary Linkage: Vamos' ratings reflect its
Standalone Credit Profile (SCP), which is aligned with that of its
parent, Simpar. Fitch expects the two entities' ratings to remain
aligned given the strong ties between Vamos and Simpar, even if
either company's SCP changes. Medium legal and strong operational
and strategic incentives to support Vamos equalize the ratings of
the two companies. Limited legal ring-fencing and Simpar's control
of Vamos support a consolidated analysis.
Capital Injection Accelerates Deleveraging: Fitch expects stronger
EBITDA generation combined with the capital increase to reduce
Vamos' leverage. Fitch expects net debt/EBITDA to remain below 3.5x
over the rating horizon, compared with an average of 3.9x in
2023-2025 and 3.7x in 2025, following Vamos' aggressive growth
through 2024. The rating case includes a BRL600 million capital
injection in 2026, which allows BNDESPar to acquire approximately
5.4% of Vamos' total capital and dilute Simpar's stake to 56% from
62% prior to the transaction.
FCF Turning Positive: Vamos' strategy to improve its capital
structure should soften the company's cash flow. The rating
scenario considers that Vamos will reduce its total fleet by
accelerating used asset sales. Fitch forecasts cash flow from
operations (CFFO) to reach BRL1.8 billion in 2026 and BRL2.3
billion in 2027. FCF is expected to be slightly negative in 2026
but turn positive by 2027, after average annual capex of BRL4.0
billion in 2026 to 2028, partially funded by the sale of used
vehicles from rentals and a dividend payout ratio of 25%.
Adequate Operating Performance: Over the next two years, Vamos'
EBITDA should increase gradually, mainly based on an increasing
occupancy rate above 92% combined with used-car sales activity.
Fitch has forecast consolidated net revenue of BRL6.8 billion
(+16.8% over 2025) and adjusted EBITDA of BRL4.0 billion (+9% over
2025) in 2026 and BRL7.2 billion and BRL4.2 billion, respectively,
in 2027. EBITDA margins should decline to close to 60% from 2026
onward, from 62.8% in 2025, due to the increasing of used-car sales
activities whose operating margins are close to 2%, increasing the
occupancy rate of the fleet rental business.
Leadership Position: Vamos' business profile benefits from its
leadership in a still underpenetrated and highly fragmented sector,
which provides opportunities to scale up. As Brazil's largest
lessor of heavy vehicles, machinery and equipment, Vamos has strong
bargaining power with suppliers, further bolstered by the group's
strength, solid operating performance, nationwide presence and an
adequate used-asset retail operation. As of March 2026, Vamos'
rental fleet of 53,501 assets comprised 41,293 heavy vehicles
(including truck tractors, trailers, light commercial vehicles and
buses) and 12,208 machines and equipment.
Peer Analysis
Vamos' credit profile is weaker than that of Localiza Rent-a-Car
S.A. (Localiza; FC and LC IDRs BB+ and National Long-Term Rating
AAA(bra), all with a Stable Outlook). It has a smaller scale versus
that of Localiza and a weaker financial profile, with higher
leverage and more pressured FCF. These factors constrain its SCP.
Vamos has the same credit profile compared with Unidas Locações e
Serviços S.A. (Unidas; FC and LC IDRs BB- and National Long-Term
Rating AA(bra), all with a Positive Outlook), offset by slightly
higher historical leverage compared to Unidas.
Fitch's Key Rating-Case Assumptions
- End-of-period rental fleet decline of 12% in 2026 and 16% in
2027, and an increase 18% in 2028;
- Average EBITDA margin of 87% in the rental business from 2026 to
2028;
- Average annual net capex of BRL4.0 billion in 2026-2028;
- BRL600 million capital injection in 2026;
- Dividend payments of 25% of net income.
Corporate Rating Tool Inputs and Scores
Fitch scored the issuer as follows, using its Corporate Rating Tool
(CRT) to produce the SCP:
- Business and financial profile factors (assessment, relative
importance): management (bb, Moderate), sector characteristics
(bb+, Moderate), market and competitive positioning (bbb-, Higher),
diversification and asset quality (bb+, Lower), company operational
characteristics (bb, Moderate), profitability (bbb-, 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 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 assessment of 'good' has no impact.
- The Operating Environment assessment of 'bb' has no impact.
- The SCP is 'bb-'.
To derive the Long-Term IDR:
- Fitch made no adjustments to the SCP, resulting in an IDR of
'BB-'.
- Application of Fitch's "Parent and Subsidiary Linkage Rating
Criteria" results in a same credit profile for both parent and
subsidiary approach.
RATING SENSITIVITIES
Factors that Could, Individually or Collectively, Lead to Negative
Rating Action/Downgrade
- A downgrade of Simpar's ratings;
- Deterioration of Simpar's, Movida's or JSL's SCP would warrant a
review of Vamos' ratings.
Factors that Could, Individually or Collectively, Lead to Positive
Rating Action/Upgrade
- An upgrade of Simpar's ratings;
- Improvement of Simpar's, Movida's or JSL's SCP would warrant a
review of Vamos' ratings.
Liquidity and Debt Structure
Vamos' liquidity is manageable, as evidenced by its short- and
medium-term obligations, reflected in a reasonably lengthened debt
amortization schedule. Positive FCF trends from 2027 onward, after
being slightly negative in 2026, are expected to enhance Vamos'
financial flexibility. Vamos' cash and marketable
securities/short-term debt ratio averaged above 1.7x over the past
four years.
As of March 2026, the company had BRL4.8 billion in cash and
marketable securities and total adjusted debt of BRL17.5 billion,
of which BRL2.7 billion matures in the short term. Financial
flexibility is enhanced by a committed line with the Brazilian
Development Bank of BRL850 million, out of which BRL335 million
remains to be withdrawn.
Vamos' debt profile consists mainly of debentures (37%), bank loans
(27%), agribusiness receivables certificates (17%), senior notes
(13%), and sale of receivables (7%). The ability to defer expansion
investments to adjust to the economic cycle, and the group's
considerable number of unencumbered assets — reflected in a net
book value of fleet/adjusted net debt ratio of around 1.2x — also
contribute to its financial flexibility.
Issuer Profile
Vamos is Brazil's largest lessor of heavy vehicle fleets,
machinery, and equipment, and also sells used vehicles. Publicly
listed on B3, it has a 43.13 % free float (5.39% BNDESPar); Simpar
is the main shareholder with a 55.9% stake.
Summary of Financial Adjustments
Fitch considers interest on rental obligations and amortization of
right-of-use to be operating items; they impact 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 Vamos Locacao de Caminhoes, Maquinas e Equipamentos 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
----------- ------ -----
Vamos Europe
senior unsecured LT BB- Affirmed BB-
Vamos Locacao de
Caminhoes, Maquinas e
Equipamentos S.A.
LT IDR BB- Affirmed BB-
LC LT IDR BB- Affirmed BB-
Natl LT AA(bra) Affirmed AA(bra)
senior unsecured Natl LT AA(bra) Affirmed AA(bra)
===========
M E X I C O
===========
ALSEA SAB: Moody's Upgrades CFR to Ba2 & Alters Outlook to Stable
-----------------------------------------------------------------
Moody's Ratings upgraded Alsea S.A.B. de C.V.'s ("Alsea") Corporate
Family Rating to Ba2 from Ba3. The outlook was changed to stable
from positive.
The stable outlook reflects Moody's expectations that Alsea will
sustain liquidity and credit metrics consistent with the Ba2 rating
over the next 12–18 months, underpinned by resilient operating
performance across its portfolio as the company continues to
execute its expansion strategy.
RATINGS RATIONALE
The upgrade of Alsea's rating reflects the effective execution of
liability management and refinancing initiatives, which have
materially strengthened its credit profile. The transactions
reduced near- to medium-term maturities and lowered interest costs,
supporting improved interest coverage metrics in line with the Ba2
category. In addition, the refinancing reduced foreign currency
mismatches, mitigating FX risk, lowering debt servicing costs, and
eliminating the need for hedging.
The liability management plan will have a direct and positive
impact on Alsea's credit metrics. Moody's expects EBIT/interest
expense at around 2.3x by 2026 and towards 2.5x thereafter; up from
1.8x as of the last twelve months ended in March 2026 (LTM Mar-26)
and 1.3x in 2024. This improvement will be driven by lower interest
costs and enhanced operating performance. At the same time, Moody's
expects that Alsea's Moody's-adjusted debt/EBITDA will remain
around 2.7x in the next two to three years.
Alsea's Ba2 CFR is supported by its strong brand
portfolio—particularly Starbucks and Domino's Pizza—and
regional footprint in Latin America and Europe, besides Mexico.
Alsea's focus on high-growth, high-margin brands, enhances its
business profile and resilience through economic cycles. The
company's conservative capital allocation and ongoing investments
in refurbishing, digitalization, delivery sales and loyalty
programs will also support profitability and cash flow generation.
Alsea's rating remains constrained by intense competition, cash
flow concentration in Mexico (representing 68% of the company's
EBITDA), and high capital spending needs. While Alsea can reduce
expansion investments if needed, ongoing spending is still required
to maintain its market position.
In Mexico, weakening investment and softer domestic demand are
increasingly constraining growth, which now Moody's expects to be
0.9% in 2026 and 1.3% in 2027, up from 0.6% in 2025. Meanwhile, the
global economy faces another potential energy and food-price shock
with vulnerabilities in the form of higher energy prices, tighter
global financial conditions and weaker risk appetite. Nonetheless,
Moody's expects Alsea to protect profitability leveraging on its
portfolio of strong brands and geographic location, and its ability
to pass a significant portion of cost inflation, particularly for
energy and certain products, onto prices. Moody's also expects
Alsea to continue with its conservative capital allocation to
maintain credit metrics in line with the Ba2 category including its
guidance of net leverage at 2.7x post IFRS16.
Alsea's liquidity is good with cash and equivalents of MXN5,248
million further supported by its MXN800 million committed credit
facility that is fully available until 2030 and no major maturities
before 2030. Moody's also expects Alsea to distribute dividends
above historical levels in line with the company's cash generation
and expansion plan maintaining its good liquidity.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATING
Alsea's ratings could be upgraded if the company maintains a
Moody's-adjusted debt to EBITDA ratio below 3.0x, adjusted EBIT to
interest expense above 2.75x, sustained retained cash flow to debt
above 20% and financial policies that support the maintenance of
good liquidity.
Conversely, a sustained increase in Moody's-adjusted debt to EBITDA
ratio above 4.0x and a drop in EBIT to interest expense below 2.5x
could lead to a downgrade. Deterioration of liquidity profile due
to aggressive financial policies or lower than expected operating
performance could also lead to a downgrade.
COMPANY PROFILE
Alsea S.A.B. de C.V. (Alsea), headquartered in Mexico City, is a
restaurant operator with a presence in Mexico, Europe and South
America. Alsea targets the fast food, coffee shop, casual dining
and family dining segments. Alsea operates 13 brands, such as
Starbucks, Domino's, VIPs and Burger King, among others. The
company reported revenue of MXN85.4 billion ($4.6 billion) as of
LTM Mar-26.
The principal methodology used in this rating was Restaurants
published in September 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.
DEL MONTE: Minority Lenders Seek Direct Appeal to 3rd Circuit
-------------------------------------------------------------
Emily Lever at law360.com reports that minority lenders to bankrupt
canned food giant Del Monte are seeking to appeal the May
confirmation of Del Monte's Chapter 11 plan to the U.S. Court of
Appeals for the Third Circuit over issues including "impermissible
gerrymandering" of creditor classes.
About Del Monte
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: http://www.delmontefoods.com/or
http://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 Herbert Smith Freehills Kramer (US), LLP and
Cole Schotz P.C. 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. The committee hired
Morrison & Foerster LLP as counsel; Province, LLC as financial
advisor; Kelley Drye & Warren LLP as co-counsel; and Stifel,
Nicolaus & Co., Inc. as investment banker.
DEL MONTE: Plan Rolls On, ABC Law Gains Steam
---------------------------------------------
Emlyn Cameron at law360.com reports that the U.S. Supreme Court
will not consider an appeal related to an early Texas two-step
case, a New Jersey bankruptcy judge declined a Del Monte lender
group's request for a plan confirmation stay, and a law to
standardize assignment for the benefit of creditors proceedings is
gaining traction.
About Del Monte
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: http://www.delmontefoods.com/or
http://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 Herbert Smith Freehills Kramer (US), LLP and
Cole Schotz P.C. 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. The committee hired
Morrison & Foerster LLP as counsel; Province, LLC as financial
advisor; Kelley Drye & Warren LLP as co-counsel; and Stifel,
Nicolaus & Co., Inc. as investment banker.
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P A N A M A
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SIXTEENTH MORTGAGE: Fitch Affirms 'CCsf' Rating on Class C Notes
----------------------------------------------------------------
Fitch Ratings has affirmed notes issued by La Hipotecaria
Panamanian Mortgage Trust 2014-1, La Hipotecaria Mortgage Trust
2019-1, La Hipotecaria Mortgage Trust 2019-2, La Hipotecaria
Panamanian Mortgage Trust 2021-1. Additionally, Fitch has affirmed
the notes from Twelfth Mortgage-Backed Notes Trust (Trust 12),
Fourteenth Mortgage-Backed Notes Trust (Trust 14) and Sixteenth
Mortgage-Backed Notes Trust (Trust 16). The Rating Outlook is
Stable for all ratings, except series B and C notes from Trust 16,
which do not have an Outlook.
Entity/Debt Rating Prior
----------- ------ -----
La Hipotecaria Mortgage
Trust 2019-2
Series 2019-2 Certificates
US50346XAA37 LT BB+sf Affirmed BB+sf
La Hipotecaria Panamanian
Mortgage Trust 2021-1
Series 2021-1 Certificates LT BB+sf Affirmed BB+sf
Fourteenth Mortgage-Backed
Notes Trust
A LT BB+sf Affirmed BB+sf
B LT BB+sf Affirmed BB+sf
C LT Bsf Affirmed Bsf
Sixteenth Mortgage-Backed
Notes Trust
A US50347JAA34 LT BB+sf Affirmed BB+sf
B LT CCCsf Affirmed CCCsf
C LT CCsf Affirmed CCsf
La Hipotecaria Mortgage
Trust 2019-1
Series 2019-1 Certificates
Class AAA 50346WAA5 LT AA+sf Affirmed AA+sf
La Hipotecaria Panamanian
Mortgage Trust 2014-1
Class A-1 50346EAA5 LT AA+sf Affirmed AA+sf
Class A-2 50346EAB3 LT BB+sf Affirmed BB+sf
Twelfth Mortgage-Backed
Notes Trust
Series A PAL3006961A4 LT BB+sf Affirmed BB+sf
KEY RATING DRIVERS
RMBS Transactions
Twelfth Mortgage-Backed Notes Trust (Trust 12), Fourteenth
Mortgage-Backed Notes Trust (Trust 14), Sixteenth Mortgage-Backed
Notes Trust (Trust 16)
Country of Assets Determine Maximum Achievable Ratings: Panama's
Issuer Default Rating (IDR) is 'BB+'/Stable. The series A notes
from Trust 12, Trust 14 and Trust 16 are capped at the sovereign
IDR, given the high exposure to public servants, subsidies (for the
Trust 12 and Trust 16) and to liquidity for these series through a
Letter of Credit provided by Banco General (BBB-/Stable). However,
this entity does not currently constrain the rating.
Operational Risk Mitigated (Latin America RMBS Rating Criteria):
Grupo ASSA, S.A. (BBB-/Stable, primary servicer) has hired Banco La
Hipotecaria, S.A. (the sub-servicer) to service the mortgages.
Fitch has reviewed Banco La Hipotecaria's systems and procedures
and is satisfied with its servicing capabilities. Fitch does not
expect additional impact from the sale of Grupo ASSA's stake to
Inversiones Cuscatlan Centroamerica, S.A. Additionally, Banco
General S.A. (BBB-/Stable) has been designated as back-up servicer
in order to mitigate the exposure to operational risk, and will
replace the defaulting servicer within five days of a servicer
disruption event.
Twelfth Mortgage-Backed Notes Trust
Asset Assumptions Similar to Last Review: Based on April 2026,
under a 'BB+sf' scenario, the A note would need to support a
Weighted Average Foreclosure Frequency (WAFF) of 36.9% and a
Weighted Average Recovery Rate (WARR) of 96.3%, compared to a WAFF
of 22.1% and a WARR of 95.0% from last annual review. The increase
in WAFF is mainly due to recalibration of assumptions performed for
La Hipotecaria - Panama in December 25.
Additionally, these assumptions consider the assets' following
characteristics: OLTV of 91.5%, the seasoning average of 176 months
and remaining term of 195 months, WA current loan-to-value is 57.3%
and the majority of performing borrowers (57.3%) pay through
payroll deduction mechanism. The assumptions also consider a
Performance Adjustment Factor of 0.7x considering the historical
performance of the portfolio.
Robust Credit Enhancement Supports Assigned Rating: CE has
increased following the sequential nature of the transaction and
good asset performance. As of April 26, CE has increased to 34.6%
from 30.1% in May 2025 for series A. The transaction also benefits
from a reserve account of 1% of the outstanding balance of the
series A notes in the form of a Letter of Credit, which is
sufficient to cover almost three months of senior expenses and
interest payment on the Series A notes.
Fourteenth Mortgage-Backed Notes Trust
Asset Assumptions Similar to Last Review: Based on April 2026,
under a 'BB+sf' scenario, the A and B notes would need to support a
WAFF of 35.8% and a WARR of 84.2%, compared to a WAFF 20.9% and a
WARR of 83.0% from last annual review. In a 'Bsf' scenario, the
series C notes would need to support a WAFF of 14.5% and a WARR of
92.6%, compared to a WAFF of 11.7% and a WARR of 91.2% from its
last annual review. The increase in WAFF is mainly due to a
recalibration of assumptions performed for La Hipotecaria - Panama
in December 25.
These assumptions consider the following: OLTV of 84.0%, the
seasoning average of 162 months and remaining term of 198 months,
WA current loan-to-value is 60.6% and the majority of performing
borrowers (59.0%) pay through payroll deduction mechanism. The
assumptions also consider a Performance Adjustment Factor of 0.7x
considering the historical performance of the portfolio.
Transaction Performance in Line With Current Ratings: CE has
increased during the last year due to the sequential nature of the
structure. As of April 2026, CE has increased to approximately
18.2% up from 15.2% in May 2025 for the series A notes, to 7.6%
from 5.4% for the series B notes. For series C it increased to 4.1%
from 2.2%. The series A notes benefits from a reserve account
equivalent to 3x its next interest payment in the form of a letter
of credit. Given increasing credit enhancement and good asset
performance, the series B and C notes have been upgraded to 'BB+sf'
and 'Bsf', respectively.
Sixteenth Mortgage-Backed Notes Trust
Asset Assumptions Similar to Last Review: Based on April 2026,
under a 'BB+sf' scenario, the A note would need to support a WAFF
of 31.8% and a WARR of 63.4%, compared to a WAFF of 20.9% and a
WARR of 61.6% from last annual review. For the base case scenario,
the the WAFF was updated to 11.0% from 10.2% and the WARR 79.8%
from 77.0%. These assumptions consider the following: OLTV of
90.0%, the seasoning average 103 months and remaining term 258
months, WA current loan-to-value is 68.2% and the majority of
performing borrowers (70.1%) pay through payroll deduction
mechanism. The assumptions also consider a Performance Adjustment
Factor of 0.8x considering the historical performance of the
portfolio.
Transaction Performance in Line With Current Ratings: CE has been
volatile due to high reliance on fiscal credits. Series A CE
increased to 10.9% from 6.8%, while series B increased to -1.0%
from -4.5% and series C -3.9% from -7.3%. Current levels are in
line with those in 2024. The series A notes are supported by an
interest reserve account equal to 3x their upcoming interest
payment and excess spread. They also benefit from a sequential pay
structure where target amortization payments for series A rank
senior to both interest and principal payments on the series B and
C notes.
CLN Transactions
La Hipotecaria Panamanian Mortgage Trust 2014-1 A-1, La Hipotecaria
Trust 2019-1
DFC's Credit Quality Supports Rating: The ratings for La
Hipotecaria Panamanian Mortgage Trust 2010-1, La Hipotecaria
Panamanian Mortgage Trust 2014-1 A-1, and La Hipotecaria Trust
2019-1 certificates is commensurate with the credit quality of the
guarantee provider. The credit quality of U.S. International
Development Finance Corporation (DFC) is directly linked to the
U.S. sovereign rating ('AA+'/F1+/Stable), as guarantees issued by,
and obligations of, DFC are backed by the full faith and credit of
the U.S. government, pursuant to the Foreign Assistance Act of
1969. The ULT rating assigned to the 2010-1 certificates is
commensurate with the credit quality of the series A notes of the
Tenth Mortgage-Backed Notes Trust.
Reliance on DFC Guaranty: Fitch assumes the payment on the La
Hipotecaria Panamanian Mortgage Trust 2014-1 A-1, and La
Hipotecaria Trust 2019-1 certificates will rely on the DFC
guaranty. Through this guaranty, DFC will unconditionally and
irrevocably guarantee the receipt of proceeds from the underlying
notes in an amount sufficient to cover timely scheduled monthly
interest amounts and the ultimate principal amount on the
certificates.
Ample Liquidity: The La Hipotecaria Panamanian Mortgage Trust
2014-1 A-1 and La Hipotecaria Trust 2019-1 certificates benefit
from liquidity, in the form of a five-day buffer between payment
dates on the underlying notes and payment dates on the
certificates. Additionally, the certificates benefit from liquidity
in the form of an interest reserve account or a letter of credit at
the underlying note level. Fitch considers this sufficient to keep
debt service current on the guaranteed certificates until funds
under a claim of DFC are received.
La Hipotecaria Panamanian Mortgage Trust 2014-1 A-2 Certificates,
La Hipotecaria Trust 2019-2, La Hipotecaria Panamanian Mortgage
Trust 2021-1
Credit Quality of the Underlying Notes Support Ratings: The 2014-1
A-2, 2019-2 and 2021-1 certificates are a repackaging of the Trust
12, Trust 14 and Trust 16 Series A notes, respectively, therefore
the rating assigned to the certificates is commensurate with the
credit rating of the series A notes of each transaction, which
carry a rating of 'BB+sf'/Outlook Stable. The interest received
from the underlying notes is expected to be sufficient to cover the
expenses and coupon payments due for the certificates.
RATING SENSITIVITIES
Factors that Could, Individually or Collectively, Lead to Negative
Rating Action/Downgrade
The ratings of the A notes from Trust 12, Trust 14 and Trust 16 and
series B notes from Trust 14 are sensitive to changes in the credit
quality of Panama.
A downgrade of Panama's ratings could lead to a downgrade on the
notes. In addition, the ratings of the A Notes from Trust 12 and
Trust 14 could be sensitive to changes in the credit quality of
Banco General as the Letter of Credit provider. Finally, severe
increases in foreclosure frequency as well as reductions in
recovery rates could lead to a downgrade of the notes.
The series B of Trust 14 can be downgraded two notches if there is
a reduction in WARR of 15% or one notch if WAFF is increased in
15%. The B class would be downgraded once if there is a reduction
in WARR and an increase in WAFF to 30% combined, while class A
would be downgraded one notch in the same scenario.
The series A of Trust 16 could be downgraded one notch if WAFF is
increased 15% or if WARR is decreased 30%. The series A would be
downgraded once if there is a reduction in WARR and an increase in
WAFF to 30% combined. The series B of Trust 16 can also be
downgraded if credit enhancement deteriorates to a level no longer
considered sufficient to align with current level stresses.
For series C of Sixteenth Mortgage-Backed Notes Trust, the rating
can be downgraded if the C notes are irrevocably impaired such that
it is no longer expected to pay interest or principal in full in
accordance with the terms of the obligation's documentation during
the life of the transaction. This assessment would be consistent
with a C category.
DFC Guaranteed Notes: For La Hipotecaria Panamanian Mortgage Trust
2014-1-A-1 Tranche and the La Hipotecaria Mortgage Trust 2019-1
notes, the assigned rating could be downgraded if the U.S.
sovereign rating is downgraded.
The La Hipotecaria Panamanian Mortgage Trust 2014-1 A-2
certificates' ratings are sensitive to changes in the credit
quality of the Twelfth Mortgage-Backed Notes Trust Series A notes.
If Twelfth Mortgage-Backed Notes Trust Series A notes are
downgraded a downgrade of the certificates could occur.
The La Hipotecaria Mortgage Trust 2019-2 certificates' ratings are
sensitive to changes in the credit quality of the Fourteenth
Mortgage-Backed Notes Trust Series A notes. If Fourteenth
Mortgage-Backed Notes Trust Series A notes are downgraded, a
downgrade of the certificates could occur.
The La Hipotecaria Panamanian Mortgage Trust 2021-1 certificates'
ratings are sensitive to changes in the credit quality of the La
Hipotecaria Sixteenth Mortgage Backed Notes Trust series A notes.
If Sixteenth Mortgage-Backed Notes Trust Series A notes are
downgraded a downgrade of the certificates could occur.
Factors that Could, Individually or Collectively, Lead to Positive
Rating Action/Upgrade
The ratings of the series A notes from Trust 12, Trust 14 and Trust
16, as well as series B notes from Trust 14 are sensitive to
changes in Panama's credit quality. An upgrade of Panama's ratings
could lead to an upgrade on the series mentioned above.
The ratings of Trust 14 Series C Notes and Trust 16 Series B and C
notes could be upgraded if CE improves.
DFC Guaranteed
For the La Hipotecaria Panamanian Mortgage Trust 2014-1-A-1 Tranche
and the La Hipotecaria Mortgage Trust 2019-1 notes, the ratings
could be upgraded if the U.S. sovereign rating is upgraded.
The La Hipotecaria Panamanian Mortgage Trust 2014-1 A-2
certificates' ratings are sensitive to changes in the credit
quality of the Twelfth Mortgage-Backed Notes Trust Series A notes.
If Twelfth Mortgage-Backed Notes Trust Series A notes are upgraded
an upgrade of the certificates could occur.
The Hipotecaria Mortgage Trust 2019-2 certificates' ratings are
sensitive to changes in the credit quality of the Trust 14 series A
notes. If this series is upgraded an upgrade of the certificates
could occur.
The La Hipotecaria Panamanian Mortgage Trust 2021-1 certificates'
ratings are sensitive to changes in the credit quality of the Trust
16 Series A notes. If this series is upgraded an upgrade of the
certificates could occur.
USE OF THIRD PARTY DUE DILIGENCE PURSUANT TO SEC RULE 17G -10
Form ABS Due Diligence-15E was not provided to, or reviewed by,
Fitch in relation to this rating action.
DATA ADEQUACY
Data provided is sufficiently robust.
PUBLIC RATINGS WITH CREDIT LINKAGE TO OTHER RATINGS
- The rating of the A-1 certificates issued by La Hipotecaria
Panamanian Mortgage Trust 2014-1 is directly linked to the credit
quality of the DFC and the rating of the A-2 certificates issued by
La Hipotecaria Panamanian Mortgage Trust 2014-1 is directly linked
to the rating of the Series A Notes issued by Trust 12.
- The rating of the 2019-1 certificates issued by La Hipotecaria
Trust 2019-1 is directly linked to the credit quality of the DFC.
- The rating of the 2019-2 certificates issued by La Hipotecaria
Trust 2019-2 is directly linked to the rating of the Series A Notes
issued by Trust 14.
- The rating of the 2021-1 certificates issued by La Hipotecaria
Trust 2021-1 is directly linked to the rating of the Series A Notes
issued by Trust 16.
- The ratings of the A Notes from Trust 12, 14, 16 are capped by
Panama's credit quality.
ESG Considerations
The Twelfth Mortgage-Backed Notes Trust has a Human Rights,
Community Relations, Access & Affordability score of '4[+]' for its
exposure to accessibility to affordable housing, which in
combination with other factors, impacts the rating.
The Fourteenth Mortgage-Backed Notes Trust has a Human Rights,
Community Relations, Access & Affordability score of '4[+]' for its
exposure to accessibility to affordable housing, which in
combination with other factors, impacts the rating.
The Sixteenth Mortgage-Backed Notes Trust has a Human Rights,
Community Relations, Access & Affordability score of '4[+]' for its
exposure to accessibility to affordable housing, which in
combination with other factors, impacts the rating.
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.
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P E R U
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VOLCAN COMPANIA: Fitch Hikes LongTerm IDRs to 'B+', Outlook Stable
------------------------------------------------------------------
Fitch Ratings has upgraded Volcan Compania Minera S.A.A.'s
Long-Term Foreign and Local Currency Issuer Default Ratings (IDRs)
to 'B+' from 'B'. Fitch also upgraded Volcan's senior secured notes
due 2030 and 2032 to 'B+' with a Recovery Rating of 'RR4' from
'B'/'RR4'. The Rating Outlook is Stable.
The upgrade reflects Volcan's lower execution risk, following
progress at its Romina's project, which remains on budget and on
schedule. Volcan's ratings reflect its medium business scale,
limited geographic and product diversification and moderate cost
position. They also reflect the intrinsically low five-year mine
life of its polymetallic operations.
Fitch expects Volcan to maintain an adequate credit profile over
the rating horizon. The ratings also reflect Volcan's strong
liquidity, with no significant debt maturity until 2032. The
successful ramp-up of Romina, cost structure improvements, reserve
replacements and prudent capital allocation will be key to
supporting any positive rating action in the medium term.
Key Rating Drivers
Low Leverage: Fitch expects Volcan to maintain solid credit
metrics, with EBITDA leverage at about 1,2x in 2026-2028. This
represents an improvement from 2.0x in 2025 and 2024. This is
driven by higher zinc and silver prices, higher output from Yauli
and Chungar, and the Romina ramp-up.
Fitch expects Volcan to manage shareholder returns and growth
conservatively to avoid deterioration of its financial profile
throughout the commodity cycle. The company remains focused on
several small debottlenecking capex strategies, seeking to improve
its cost structure, long-term production visibility and reserve
replacement. Any material deviation on conservative capital
deployment could pressure the ratings.
Growth Strategy Drives FCF: Fitch expects EBITDA of approximately
USD840 million in 2026, supported by recovering operations and
supportive metal prices. Capex will rise to an average of USD400
million per year during 2026-2028, including the final stages of
the Romina, and the development of the Esperanza project. Fitch
projects positive FCF averaging approximately USD80 million per
year between 2026-2028, as metal prices remain strong and
production recovers. Aggressive shareholder distributions or
inorganic growth could deteriorate the FCF and the credit metrics.
Romina Ramp-Up Remains Key: The cost reductions and mine life
expansion following the completion of Romina are key to Volcan's
business sustainability and has helped strengthen its credit
profile. The polymetallic Romina mine is Volcan's main near-term
growth project. Fitch expects commercial production to begin in
2026. The mind will replace the aging Alpamarca mine and will use
its operating plant. Fitch expects Romina to contribute
approximately 10% of revenue in 2026 and 20% in 2027.
Business Profile Constrains Ratings: Volcan's ratings are
constrained by limited geographic and product diversification,
medium operational scale, mine life of about five years and
moderate cost position, considering its third-quartile cost
position on the C1 curve, according to Wood Mackenzie. Volcan's
position as a top-10 global zinc producer partially offsets these
constraints.
Limited Scale: The company operates only in Peru, with 85% of
production from silver and zinc. Fitch expects production to
recover to about 280,000 metric tons (MT) in 2026 and about 340,000
MT in 2027-2028 after past stoppages, supported by new mining zones
and operational streamlining. Wood Mackenzie expects Volcan to
improve its third-quartile cost position toward the peer average
and the entrance of new projects should increase the mine life.
Metal Price Sensitivity: Fitch estimates a 10% increase in assumed
silver or zinc prices would add USD65 million to USD80 million to
EBITDA in 2026 under Fitch's base-case scenario. Under mid-cycle
prices of zinc of USD2,500/tonne and silver of USD44/ ounce (oz),
Volcan's EBITDA leverage is 1.9x.
Peer Analysis
Volcan (B+/Stable) has a metals diversification comparable to
Compania de Minas Buenaventura S.A.A. (BB/Stable), Minsur S.A.
(BBB-/Stable) and Nexa Resources S.A. (BBB-/Stable), with one large
base and one precious metal main revenue streams. Volcan's is more
broadly diverse than Ero Copper Inc. (B+/Stable) and Aris Mining
Inc. (B+/Stable), which largely rely on one main revenue stream.
Nexa's diversified production across Brazil and Peru and integrated
smelting operations, support a stronger business profile. Volcan
operates only in Peru, like Buenaventura and Minsur, Ero operates
in Brazil and Aris in Colombia. Volcan's scale is larger than Ero's
and Aris's, and smaller than Minsur, Nexa and Buenaventura.
Volcan's consolidated reserves imply about five years of mine life,
which is low for mainly underground peers, such as Nexa's 13 years.
Aris's and Ero's 18 years each are mostly based on open pit mining.
Volcan's all-in sustaining cost (AISC) is in the third quartile of
the zinc AISC curve, similar to Nexa's and Aris's, and better than
Buenaventura's and Ero's, which are both in the fourth quartile in
their respective metals.
Fitch expects Volcan's capital structure and liquidity to be
similar to those of its named peers, with leverage near the middle
of the peer group relative to similarly rated Aris and Ero.
Volcan's gross leverage is expected to average 1.2x in the next
three years, similar to Buenaventura (1.2x) and Ero Copper (1.2x)
but higher than Aris (0.6x).
Fitch’s Key Rating-Case Assumptions
- Average zinc price of USD3,000/tonne in 2026, USD2,800/tonne in
2027, and USD2,600/tonne in 2028;
- Average zinc price (including the hedge strategy) for Volcan of
USD3,075/tonne in 2026, USD2,935/tonne in 2027, and USD2,795/tonne
in 2028;
- Average silver price of USD64/ounce (oz) in 2026, USD54/oz in
2027, and USD47/oz in 2028;
- Average silver price (including the hedge strategy) for Volcan of
USD66/ ounce (oz) in 2026, USD61/oz in 2027, and USD60/oz in 2028;
- Zinc output of 280,000 MT in 2026 and 340,000 MT in 2027-2028;
- Silver output of 14.4 million oz, 15,9 million oz, and 15,1
million oz in 2026, 2027, and 2028, respectively;
- Fitch expects Yauli to contribute more than 50% of revenues in
2026 and 47% in 2027-2028;
- Romina is expected to start operations during 2026 (and is
already in the commissioning phase) and achieve full production in
2027. Fitch expects Romina expansion, to contribute 10% of revenues
in 2026 and 20% in 2027-2028;
- Capex of ~USD400 million per year in 2026-2028;
- No dividends;
- No additional asset sales.
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
('bb', Lower), market and competitive positioning ('bb-',
Moderate), diversification and asset quality ('b', Higher), company
operational characteristics ('bb', Moderate), profitability ('bb-',
Moderate), financial structure ('bb', Moderate), and financial
flexibility ('bb', Moderate).
The quantitative financial subfactors are based on custom CRT
financial period parameters: 10% weight for the historical year
2025, 10% for the forecast year 2026, 30% for the forecast year
2027, 30% for the forecast year 2028 and 20% for the forecast year
2029.
Assessments of the quantitative financial subfactors also include
bespoke calculations.
The governance assessment of 'good' has no impact.
The operating environment assessment of 'bbb-' has no impact.
The calibration adjustment applies and results in an adjustment of
-1 notch(es) reflecting the combination of Volcan`s recent
financial stress, execution risks and weaker relative positioning
compared to its peers in terms of product portfolio and mine life.
The SCP is 'b+'.
To derive the Long-Term IDR:
Fitch made no adjustments to the SCP, resulting in an IDR of 'B+'.
Recovery Analysis
Going-Concern Approach
The recovery analysis assumes that Volcan would be considered a
going concern in an event of bankruptcy and that the company would
be reorganized rather than liquidated. Fitch has assumed a 10%
administrative claim. The going concern EBITDA estimate reflects
Fitch's view of a sustainable, post-reorganization EBITDA level
upon which it bases the enterprise valuation in a low zinc price
environment.
An enterprise valuation multiple of 4.5x EBITDA is applied to the
going concern EBITDA to calculate a post-reorganization enterprise
value. The choice of this multiple considered the following
factors: the historical bankruptcy case study exit multiples for
peer companies were 4.0x-6.0x, improving financial subfactors,
mid-quality assets, and high-quality counterparties despite
challenging dynamics in a volatile and commoditized industry.
Fitch applies a waterfall analysis to the post-default enterprise
valuation based on the relative claims of debt in the capital
structure. The debt waterfall assumptions consider the company's
pro forma debt following refinancing and debt exchange as well as
the debt-funded capex plan.
The allocation of value in the liability waterfall results in
recovery corresponding to 'RR1' for the secured bonds and the
unsecured debt. However, per Fitch's "Country-Specific Treatment of
Recovery Ratings Criteria," Peru, where EBITDA is generated, is
considered Group D. Therefore, Fitch caps the instruments' Recovery
Ratings at 'RR4', resulting in no rating uplift from the IDR 'B+'
for both secured bonds.
RATING SENSITIVITIES
Factors that Could, Individually or Collectively, Lead to Negative
Rating Action/Downgrade
- Delays in the commercialization of Romina's mineral;
- Mine life declining below five years;
- Consolidated cost position deteriorating to the fourth quartile;
- Prolonged negative FCF deteriorating liquidity;
- EBITDA interest coverage consistently below 4.0x;
- EBITDA leverage above 3.5x on a sustained basis with an
unwillingness or inability to deleverage.
Factors that Could, Individually or Collectively, Lead to Positive
Rating Action/Upgrade
- Improve business scale while maintaining a downward trend in
all-in sustaining costs;
- Mine life increasing to about 10 years;
- Positive to neutral FCF over the rating horizon;
- EBITDA interest coverage consistently above 5.0x;
- EBITDA leverage below 2,5x on a sustained basis.
Liquidity and Debt Structure
As of March 31, 2026, the company had USD295 million in cash and
equivalents against USD818 million in total debt. Total debt
includes 2032 notes (USD750 million) and the remaining 2030 notes
(USD35 million). The 2032 notes currently rank pari passu with the
2030 notes and include a collateral release condition linked to the
full repurchase of the 2030 notes, which have a call option
beginning in September 2026. The 2032 notes will become senior
unsecured once this condition is satisfied, with covenants similar
to the 2026 notes.
Fitch expects the company to continue its liability management
strategy, improving its liquidity position and maintaining solid
credit metrics over the rating horizon.
Issuer Profile
Volcan is a Peru-based polymetallic miner with more than 80 years
of operations, producing zinc, lead and silver. The company is
among the top-ten zinc producers worldwide and is controlled by
Transition Metals AG, a subsidiary of Integra Capital.
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 Volcan Compania Minera S.A.A..
ESG Considerations
Volcan Compania Minera S.A.A. has an ESG Relevance Score of '4' for
Management Strategy due to recent years governance concerns, which
have impaired management's ability to execute on its strategy,
which has a negative impact on the credit profile, and is relevant
to the ratings in conjunction with other factors.
Volcan Compania Minera S.A.A. has an ESG Relevance Score of '4' for
Governance Structure due to the dynamics between its shareholders
in the recent years, 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
----------- ------ -------- -----
Volcan Compania Minera S.A.A.
LT IDR B+ Upgrade B
LC LT IDR B+ Upgrade B
senior secured LT B+ Upgrade RR4 B
=====================
P U E R T O R I C O
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ESJ TOWERS: Special Counsel Loses Bid to Dismiss Adversary Case
---------------------------------------------------------------
Judge Enrique S. Lamoutte of the U.S. Bankruptcy Court for the
District of Puerto Rico denied the motion filed by Luis Daniel
Muniz to dismiss the amended complaint in the adversary proceeding
captioned as ESJ TOWERS, INC, Plaintiff, vs. LUIS DANIEL MUNIZ, and
DE ANGEL & COMPANIA CPA, LLC, Defendants, ADV. PROC. 25-00036
(Bankr. D.P.R.).
On July 14, 2022, roughly a month after the Petition Date, the
Debtor filed an application to employ Muniz as special counsel for
a wide variety of matters. The Original Muniz Application proposed
to pay Muniz a "retainer" of $3,500 per month for up to 30 hours of
work, and $150.00 per hour for any work in excess of the 30 hours.
On March 3, 2023, less than a month after the Muniz Order, Muniz
filed an interim fee application pursuant to section 331 of the
Bankruptcy Code.
The Interim Muniz Fee Application requested payment of $21,000 --
that is, $3,500 for six months of work from July 2022 through
February 2023, but excluding December 2022 and January 2023.
On April 3, 2023, when no one had objected to the Interim Muniz
Application, the Court entered an Order granting the request. On
March 28, 2023, shortly after the Court entered the Interim Muniz
Award, the Debtor paid counsel $21,000.
During the ensuing 14 months, through May 24, 2024, the Debtor paid
counsel another $52,500, all without court approval.
Muniz did not file a final fee application before (or after) the
Administrative Expense Claim Bar Date.
The Official Committee of Unsecured Creditors filed an adversary
proceeding complaint against Muniz and De Angel & Compania CPA, LLC
("DAC") on July 20, 2025. An Amended Complaint was subsequently
filed on October 30, 2025.
The Amended Complaint includes two counts related to Muniz. In
Count I, the Committee alleges Muniz was not allowed fees on a
final basis and, thus, requests the Court to enter an order
requiring Muniz to disgorge the full amount that he was paid by the
Debtor ($73,500.00). Meanwhile, in Count II the Committee seeks to
avoid the $52,500.00 of allegedly unauthorized payments made to
Muniz by the Debtor between April 2023 and May 2024.
Muniz argues in the Motion to Dismiss that the issues raised by the
UCC in relation to the compensation received by the Defendant can
be entertained with a final application for compensation Nunc Pro
Tunc. Further, Muniz posits that the Committee failed to assert an
actionable claim for relief against him, even when the
non-conclusory allegations in the Amended Complain are assumed to
be true. Lastly, Muniz argues that the filing of an adversary
proceeding, instead of filing an objection to the Final Fee
Application for Compensation is the incorrect mechanism to
entertain the matter before the court.
The Committee states that the motion nowhere argues that the
Amended Complaint's allegations fail to provide Muniz with notice
of a substantively plausible claim. Nor does the motion attempt to
explain why -- even if the Bankruptcy Code or the Confirmed Plan
would allow the court to enter a nunc pro tunc fee award -- Muniz
would qualify for such extraordinary relief in this case.
The Court agrees with the Committee's position, holding that the
conclusory and unsupported allegations in the Motion to Dismiss do
not adequately contest the well-plead allegations in the Amended
Complaint as to the Committee's claims against Muniz. In addition,
as of this date and over four months after the filing of the Motion
to Dismiss, no final application for compensation has been filed by
Muniz. Moreover, contrary to Muniz's assertion, an adversary
proceeding, such as the instant case, is the proper method to
recover the money allegedly paid improperly to Muniz by the Debtor.
Accordingly, the Motion to Dismiss filed by Muniz is denied.
A copy of the Court's Opinion and Order dated May 28, 2026, is
available at https://urlcurt.com/u?l=HVWCFc from PacerMonitor.com
About ESJ Towers
ESJ Towers, Inc. owns the ESJ Towers in Carolina, P.R. The luxury
apartments and condo units at ESJ Towers have direct access to Isla
Verde Beach, widely considered one of the best in Puerto Rico.
ESJ sought protection under Chapter 11 of the U.S. Bankruptcy Code
(Bankr. D.P.R. Case No. 22-01676) on June 10, 2022, with as much as
$50 million in both assets and liabilities. ESJ President Keith St.
Clair signed the petition.
Judge Enrique S. Lamoutte Inclan oversees the case.
The Debtor tapped Charles A. Cuprill, Esq., at Charles A. Cuprill,
PSC Law Offices as bankruptcy counsel; Ramon Luis Nieves, Esq., at
RL Legal Consulting Services, LLC and Luis Daniel Muniz, Esq., as
special counsels; Dage Consulting CPAS, PSC as financial advisor;
CPA Luis R. Carrasquillo & Co., P.S.C. as financial consultant; and
De Angel & Compania, PA, LLC as auditor.
The U.S. Trustee for Region 21 appointed an official committee of
unsecured creditors on Sept. 12, 2022. The committee tapped the Law
Office of Jonathan A. Backman as lead bankruptcy counsel; Julio
Cesar Alejandro Serrano, Esq., at JCAS Law as local counsel; and
Dage Consulting CPAS, PSC as financial advisor.
The Court confirmed the Debtor's Chapter 11 plan of reorganization
on May 21, 2024.
SN TRANSPORT: Loses Bid to Stay Dismissal of Bankruptcy Case
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Judge Mildred Caban Flores of the U.S. Bankruptcy Court for the
District of Puerto Rico denied the motion of SN Transport Inc. to
stay the Bankruptcy Court's order dismissing the bankruptcy case
pending appeal.
Upon the United States Trustee's motion to dismiss, after notice
and a hearing, the Bankruptcy Court dismissed the present case for
cause pursuant Secs. 1112(b)(4)(E), (F), and (H) of the Bankruptcy
Code. The Debtor appealed the dismissal order to the United States
District Court for the District of Puerto Rico and requested a stay
pending appeal, which is opposed by the U.S. Trustee.
The U.S. Trustee requested the dismissal of the present case
pursuant Sec. 1112(b)(4)(F) and (H) for Debtor's failure to file
schedules and failure to provide the information requested by the
U.S. Trustee for the Initial Debtor Interview ("IDI"). Debtor
opposed U.S. Trustee's request for dismissal asserting, in summary,
that it had cured the deficiencies and that there was a reasonable
likelihood of rehabilitation, even though, to this day, it has not
filed its schedules.
At the hearing and supported by the case record, the U.S. Trustee
established and demonstrated that there was cause for the dismissal
of the case. The U.S. Trustee demonstrated that Debtor did not file
the schedules of the case as required by Sec. 521(a)(1) nor
submitted the requested documents for the IDI meeting as required
by Sec. 521(a)(3). Moreover, the record showed that Debtor did not
comply with the Bankruptcy Court's order to coordinate with the
U.S. Trustee the IDI. Debtor and its counsel were not present at
the hearing on the U.S. Trustee's motion to dismiss, failing to
establish any valid defense pursuant to Sec. 1112(b)(2) for which
the motion to dismiss should not be granted. Accordingly, the case
was dismissed pursuant Secs. 1112(b)(4)(E), (F) and (H).
Judge Flores holds, "In the present case, Debtor is not likely to
succeed on the merits. Debtor asserts in its motion for stay
pending appeal that it is likely to succeed on appeal because the
dismissal was imposed without finding of bad faith and without
consideration of lesser sanctions. However, there is no need of a
finding of bad faith to dismiss a case pursuant Section
1112(b)(4).
Debtor has not filed the required schedules in the present case.
Debtor's request for a stay pending appeal does not satisfy the
first requirement which is a strong showing of success on the
merits. Consequently, SN Transport motion for stay pending appeal
is denied."
A copy of the Court's Opinion and Order dated May 29, 2026, is
available at https://urlcurt.com/u?l=bMBcUt from PacerMonitor.com.
About SN Transport Inc.
SN Transport, Inc., a privately held company founded in June 2014
and based in Cabo Rojo, Puerto Rico, provides commercial
transportation and goods delivery services across the island.
Incorporated under the laws of the Commonwealth of Puerto Rico, the
firm qualifies as a small business debtor under the U.S. Bankruptcy
Code.
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. D.P.R. Case No. 26-01095) on March 15,
2026, with $100,000 to $500,000 in assets and $1 million to $10
million in liabilities. Whesley Eliezer Sepulveda Rodriguez, owner,
signed the petition.
Jose Francisco Gierbolini, Esq., represents the Debtor as legal
counsel.
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V E N E Z U E L A
=================
CITGO PETROLEUM: Crystallex Warns of Delay Tactic in Sale Appeal
----------------------------------------------------------------
Caroline Simson at law360.com reports that defunct Canadian miner
Crystallex urged the Third Circuit to order Venezuela's counsel to
prove its authority as the country challenges an order
greenlighting the nearly $6 billion sale of Citgo to satisfy
billions of dollars of its debt, pointing to the new administration
of Delcy Rodriguez.
About Citgo Petroleum
Citgo Petroleum Corporation is a United States-based refiner,
transporter and marketer of transportation fuels, lubricants,
petrochemicals and other industrial products. Based in Houston,
Texas, Citgo is majority-owned by PDVSA, a state-owned company of
the Venezuelan government (although due to U.S. sanctions, in
2019,
they no longer economically benefit from Citgo.)
As reported in the Troubled Company Reporter-Latin America in
September 2025, Fitch Ratings affirmed the Long-Term Issuer
Default Rating (IDR) of CITGO Petroleum Corp. (CITGO, or Opco) at
'B' with a Stable Outlook and CITGO Holding, Inc. (Holdco) at
'CCC+'. Fitch also affirmed Opco's existing senior secured notes
and industrial revenue bonds at 'BB' with a Recovery Rating of
'RR1'.
*********
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