We maintain our preference for the VAMOBZ 9.200% 2031 notes as the primary expression of a constructive view on the credit. Since January 6, SIMHBZ 2031 has compressed by roughly 148 bps to 498 bps, while VAMOBZ 2031 has drifted modestly wider to 649 bps, creating a 151 bps spread gap versus the essentially flat relationship that existed at initiation and a 160 bps yield gap in VAMOBZ’s favor. VAMOBZ also retains a shorter duration at 3.5 years versus 4.0 years for SIMHBZ. In our view, this combination of higher carry, lower duration, and operating-company positioning continues to make VAMOBZ the most attractive way to express the improving Simpar credit story for investors focused on defensive carry and downside protection. MOVIBZ 2029 remains the middle ground for investors focused on shorter duration and liquidity.

The 4Q25 results validate the directional thesis we outlined at initiation. Operating performance improved meaningfully, leverage continued to decline, and capital intensity reached its lowest level in five years, supporting the view that the group has entered a lower-investment and potentially more cash-generative phase. That said, underlying free cash flow remains dependent on working capital support and asset monetization rather than recurring operations alone, while Brazil’s elevated interest rate environment continues to constrain deleveraging by absorbing a large share of EBITDA and keeping EBITDA interest coverage thin. Liquidity is adequate, capital markets access has remained open at improving cost levels, and management has framed 2026 as a value-extraction and efficiency phase, with cash generation expected to become more resilient as investment needs normalize.

Within the group, cash conversion trends also reinforce our preference for Vamos. The comparison is directional rather than fully comparable, but it remains informative. In 4Q25, Vamos generated EBITDA equal to 3.8x net capex, versus only 0.6x at Movida, highlighting that Vamos is already operating in a much clearer lower-investment and higher-cash-conversion phase, while Movida remains materially more capital intensive. Simpar sits in between at the consolidated level, but the ratio is closer to 1.1x when using adjusted EBITDA rather than reported EBITDA, which benefited from the Ciclus Rio divestment. We think this reinforces the view that the strongest internal cash-generation profile in the complex currently sits at Vamos.

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We downgrade Braskem to Neutral from Overweight. The recent report that the company is considering seeking local court protection against creditors, even if no final decision has been made and plans may still change, materially alters the risk profile and, in our view, is difficult to reconcile with an Overweight stance. This comes on top of an already very weak 4Q25 backdrop, with results remaining below expectations, liquidity deteriorating sharply, leverage increasing further, and management framing 2026 around liquidity preservation and capital structure reorganization rather than recovery. Braskem’s own disclosure that its results indicate a material uncertainty that may cast significant doubt on the company’s ability to continue as a going concern further reinforces this shift in the credit narrative. In that context, we no longer think it is appropriate to recommend adding risk until there is greater clarity on whether Braskem can secure a credible out of court solution or will need to pursue a more formal restructuring path.

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We maintain our Overweight recommendation on JBS, as 4Q25 results continue to support a constructive credit view despite some sequential pressure on profitability. The main strength of the story remains the scale and diversification of JBS’s global protein platform, which continues to offset weaker conditions in businesses facing more challenging livestock and commodity dynamics. This was again evident in 4Q25, as stronger performances in Brazil, Australia, and poultry helped balance weaker results in North America Beef and pork. The company also ended the quarter with strong liquidity, solid free cash flow, and net leverage of 2.68x, comfortably within management’s 2x to 3x target and supportive of investment-grade metrics. While we continue to view North America Beef as the main operating overhang into 2026, we think JBS’s diversified earnings base and healthy cash generation keep the overall credit story well anchored.

Within the curve, we continue to see the best value concentrated in the long end. We favor the JBS 7.250% 2053s from a carry-to-duration standpoint, as they offer a 6.5% YTW at 158 bps OAS, a price of $109.3, and 12.2 years of duration. Relative to Tyson, that implies 53 bps of incremental spread versus TSN’s 5.100% 2048s at 105 bps OAS and 56 bps versus TSN’s 4.550% 2047s at 102 bps, with broadly comparable duration. The 2053s also trade 53 bps wide to the U.S. Corp Long benchmark at 105 bps OAS, although we view that comparison more as a technical reference given the materially higher quality of that index. While that pickup has narrowed modestly from the roughly 60 bps differential implied by 3-month average spreads, we think the long end has retained more of its relative value than the belly, where compression versus Tyson and broader BBB benchmarks has been more pronounced. We also like the JBS 4.375% 2052s, which yield 6.3% at a price of $75.4 and 134 bps OAS. While the 2052s carry modestly higher duration than the 2053s and trade at a lower OAS, the $75.4 price embeds meaningful pull-to-par and convexity that we think compensate for the additional duration. In our view, the discount price offers better pull-to-par and somewhat better protection if spreads widen, while the 2053s provide stronger carry. The JBS 6.500% 2052s at $100.6 also remains a reasonable near-par alternative in the long end, but we continue to see the clearest value in the 2052s and 2053s.

In the belly, the JBS 6.750% 2034s remain the most interesting intermediate bond, but at 110 bps OAS they now trade well inside their 3-month average of 153 bps and their 1-year average of 123 bps, suggesting valuations have tightened materially and that upside is more limited from current levels. They are also only 15 bps wide to Tyson’s 5.700% 2034s at 95 bps OAS and 23 bps wide to Tyson’s 4.875% 2034s at 87 bps, which reinforces our view that the belly now looks closer to fair value. More broadly, the 2034s are only modestly wide to the U.S. BBB benchmark at 107 bps OAS and are tight to the EM BBB benchmark at 122 bps, while the JBS 5.950% 2035s at 119 bps OAS still offer somewhat better relative value in that part of the curve. That said, management’s comments around potential liability management involving the 2033 and 2034 bonds provide an additional technical element worth monitoring, as those bonds carry coupons of 5.750% and 6.750%, respectively, above what JBS could likely issue today in long-dated maturities.

We remain Neutral on the short end. The 2029s yield 4.7% for 2.7 years of duration and trade at 71 bps OAS, leaving them only 3 to 6 bps wide to Tyson’s 2029s, which in our view is not enough pickup to make the short end particularly compelling.

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We downgrade Minerva to Neutral following the significant spread compression observed across the curve over the past twelve months. The re-rating we anticipated has largely played out, and the bonds now reflect a credit that has completed its integration and stabilized its financial profile. At current levels, the investment case no longer offers the asymmetric risk-reward that underpinned our prior Overweight stance. The BEEFBZ 4.375% 2031 notes yield 6.3% for 4.3 years of duration, below the EM BB index yield of 6.8% at 5.8 years, while the BEEFBZ 8.875% 2033 notes yield 7.0% measured to the 2028 call date, trading inside the LatAm BB curve on an OAS basis and at the tight end of their 1-year range. With spread compression largely exhausted and carry no longer offering a meaningful premium relative to the broader EM BB universe, we think the risk-reward is balanced rather than asymmetric. The 2026 outlook reinforces this view, as the acquisition-driven deleveraging tailwind has been substantially absorbed, the resumption of dividends introduces a more balanced capital allocation framework, and margin compression from rising cattle costs is expected to keep EBITDA broadly stable in absolute terms. In this context, the credit is well managed and the fundamental trajectory remains constructive, but the bonds are fully priced for it. For investors already holding exposure, we prefer the BEEFBZ 4.375% 2031 notes as the more efficient and defensive exposure at current levels. We therefore view the current risk-reward as balanced rather than compelling.

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We maintain an Opportunistic Overweight recommendation on CSN, with a preference for the CSNBZ 4.625% 2031s and CSNBZ 5.875% 2032s, which in our view continue to offer the best combination of attractive carry, valuation, and upside potential along the curve. We use the Opportunistic Overweight label deliberately, as the thesis is driven by spread dislocation following rating actions and ongoing capital structure concerns rather than by an improving fundamental trajectory. 4Q25 results came in above expectations on both revenues and EBITDA, but they also confirmed ongoing credit pressure from negative free cash flow and rising leverage. While we think current spread levels already reflect the near-term pressure from cash burn, elevated capex, high financing costs, and still weak underlying steel profitability, persistent weak cash generation and softer credit metrics continue to reinforce the market’s cautious stance. Liquidity fully covers 2026 maturities and, assuming typical bank debt rollover, extends coverage into 2027. That said, cash declined meaningfully to R$16.0 billion, covering short term debt by 1.5x, and we no longer characterize the liquidity position as strong. We would view liquidity as becoming a more material concern if cash continues to decline without a corresponding improvement in operating cash flow or successful execution of liability management initiatives. Management reiterated that deleveraging remains a top priority, to be pursued through asset monetizations, liability management initiatives, and additional financing structures.

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We maintain our Overweight recommendation on Telecom Argentina (B2/B-/B), but with a revised preference across the curve following the January 2026 refinancing and the repricing of the front end. We continue to view the acquisition of Telefónica Móviles Argentina as strategically positive for the credit over the medium term, as it expands Telecom’s scale across mobile and broadband services, strengthens its competitive position in Argentina, and should support operating efficiencies as the integration progresses. At the same time, the 4Q25 results also show that margin normalization is likely to remain gradual rather than immediate, particularly at the acquired operations.

Operational performance in 4Q25 remained broadly resilient. Revenue growth was supported by the consolidation of TMA and higher ARPU across mobile, broadband, and Pay TV services, while leverage improved and free cash flow was healthy. Profitability softened sequentially, reflecting higher operating costs and integration-related pressures, but the underlying trajectory remains constructive. TMA’s EBITDA margin improved materially to 22.2% in 2025 from 11.0% in 2024, suggesting that the efficiency plan is beginning to gain traction even if quarterly progress is not linear.

From a credit perspective, the most important development is the improvement in the maturity profile. The US$600 million issuance of 2036 notes in January 2026, together with the repayment of acquisition-related loans and the redemption of the July 2026 notes, materially reduced near-term refinancing pressure. We view this as a meaningful credit positive, given that weak liquidity had been one of the main constraints in the Telecom story. While the transaction does not eliminate liquidity risk entirely, as short-term debt remains elevated and the company continues to operate without committed revolving credit facilities, the maturity profile is now more manageable. We also note that a significant portion of the remaining near-term obligations is denominated in local currency or dollar-linked instruments, which tend to be easier to refinance than hard-currency bonds.

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We maintain our Overweight recommendation on Pemex, supported by the continued demonstration of extraordinary sovereign backing and the resulting improvement in the company’s refinancing profile. Mexico’s 2025 debt strategy, including sovereign bond issuance, the $12 billion pre-capitalized securities (P-Caps) transaction, and the $9.9 billion bond buyback, has materially reduced Pemex’s financial debt and shifted part of the refinancing burden onto the sovereign balance sheet. These measures have strengthened liquidity visibility and improved the company’s maturity profile, reinforcing the sovereign’s commitment to supporting the company and anchoring near-term credit performance.

At the same time, 4Q25 results highlight the structural fragility of Pemex’s operating model. Revenues declined sequentially amid weaker crude realizations and a sharp contraction in export volumes, while adjusted EBITDA decreased to $1.85 billion from $3.20 billion in 3Q25. Free cash flow before working capital remained deeply negative, as operating cash generation was insufficient to cover elevated capital expenditures and interest payments. While recent liability management operations have helped reduce gross financial debt and improve leverage metrics, funds from operations remained negative, underscoring the company’s continued dependence on government support to stabilize liquidity and sustain investment.

Looking ahead, the 2026 credit story appears more dependent on technical and policy factors than on a meaningful improvement in underlying operating fundamentals. The large-scale support measures implemented during 2025 materially reduced near-term refinancing risk, but the scope for additional extraordinary interventions appears more limited in the near term. As a result, we believe the next phase of performance will likely depend more heavily on the pace of sovereign support through the federal budget, the evolution of Pemex’s funding strategy, and broader EM credit market conditions.

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We maintain our Overweight recommendation on YPF (B2/B-/CCC+), as 4Q25 confirms that the structural transformation of the asset base is translating into a more resilient credit profile, even if liquidity remains the key constraint.

We think 4Q25 reinforces the structural improvement in the operating profile. The transition toward a lower cost, more oil weighted portfolio continued to gain traction, with shale oil production up 41.9% YoY, representing 71.5% of total crude, and total lifting costs down 44.2% YoY. This mix shift, together with the sharp recovery in downstream profitability, helped lift adjusted EBITDA 53.0% YoY. The accelerated exit from mature conventional fields, combined with Vaca Muerta scale and midstream and export projects, including VMOS, with first oil expected in December 2026 at ~180 kbbl/d and ramping to ~550 kbbl/d by 3Q27, and Argentina LNG, with FID targeted for 2026, continues to de risk the asset base and improve through cycle margin resilience. This supports a more durable hard currency cash generation profile as export capacity expands and strengthens the standalone credit profile.

That said, we continue to view liquidity and refinancing execution as a constraint. Liquidity remains weak, with short term debt of $2.36 billion equivalent to 197% of cash plus short term investments, and roughly $2.1 billion of maturities scheduled for 2026. We think YPF’s continued market access helps offset this constraint, including the $500 million 2031 re tap in 4Q25, the $700 million export backed syndicated loan with $650 million undrawn as of February 2026, and the $550 million 2034 re tap in January 2026 that was partly used to prepay the $324 million CAF A/B loan. Divestment execution also remains an important part of the liquidity bridge, including proceeds collected from the Profertil stake sale and the signed sale of Manantiales Behr, which remains subject to closing.

The balance of the story remains Argentina risk. Despite improving operating fundamentals, sovereign and policy dynamics continue to act as the dominant overlay and can reprice the curve quickly. As the 2027 presidential cycle approaches, we expect political volatility to reemerge, limiting the scope for sustained decoupling in longer dated bonds and reinforcing the need for disciplined bond selection and careful duration control.

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We maintain our Overweight recommendation on Vista Energy, with a continued preference for the VISTAA 8.500% 2033 notes as the most attractive way to express a constructive view on the credit.

4Q25 results reinforce Vista’s strong operating momentum, with continued production growth, solid EBITDA generation, and leverage remaining around 1.6x on a pro forma basis. We think the company maintains a robust business profile anchored in Vaca Muerta, supported by an oil-weighted portfolio, growing export exposure, and structurally improving unit costs following the ramp-up of midstream infrastructure. While the reduction of Al Mehwar’s stake to 2.77% removes a previously cited liquidity mitigant in a stress scenario, we believe Vista’s standalone fundamentals, a consistent track record of capital markets access, and improved short-term debt coverage support a resilient credit profile under our base case assumptions.

The acquisition of Equinor’s stakes in Bandurria Sur and Bajo del Toro further reinforces our constructive stance, as discussed in our recent note, “Vista Acquires Equinor’s Vaca Muerta Assets, Reinforcing Core Acreage Position.” The transaction increases pro forma production to roughly 150 kboe/d, enhances oil weighting and export exposure, and adds low-cost barrels at attractive implied valuation metrics. We view the leverage impact as broadly neutral despite higher absolute debt, with pro forma gross leverage remaining around 1.9x and net leverage increasing only modestly to approximately 1.7x, while scale and hard currency EBITDA increase meaningfully. In our view, the transaction improves medium-term cash flow durability and enhances visibility on the development plan, further strengthening the fundamental case for holding duration in the belly of the curve.

From a curve positioning standpoint, the VISTAA 8.500% 2033 notes trade at an OAS of 327 bps, with a 3.7-year duration and a yield to worst of 7.0%, while the VISTAA 7.625% 2035 notes trade at 312 bps OAS, with a 5.5-year duration and a yield to worst of 7.2%. In our view, the modest yield pickup on the 2035s does not adequately compensate for nearly two additional years of duration and higher exposure to Argentina risk. The 2033s offer a more balanced combination of carry and lower volatility, in what we view as the most efficient part of the curve for investors seeking exposure to Argentina’s shale growth story without assuming incremental duration risk.

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We maintain our Neutral recommendation on MercadoLibre. We continue to view MELI as one of the highest-quality BBB credits in LatAm, supported by structural leadership in e-commerce and fintech, strong ecosystem dynamics, and solid internal cash generation. However, at current spread levels, we see limited scope for further material spread compression. While the credit profile remains sound, near-term margin pressure and structurally higher funding needs tied to credit growth limit the case for a re-rating.

The 4Q25 results reinforced robust growth across Commerce and Fintech, but also confirmed that management remains focused on ecosystem expansion rather than margin optimization. Strategic initiatives in Brazil logistics, first-party operations, cross-border trade, and credit card scaling continue to weigh on profitability in the near term. While we view this as supportive of long-term franchise value, it sustains elevated investment intensity and a structurally higher balance sheet footprint, reflected in higher reported debt and a tighter liquidity coverage profile.

From a relative value perspective, MELI (BBB-) 3.125% 2031 notes trade at approximately 102 bps OAS with 4.4 years of duration and a 4.6% YTW. The bonds are currently priced at $93.4, below par, which provides visible pull-to-par support over time if spreads remain stable. That said, the discount price largely reflects the lower coupon structure rather than an outright spread concession, and convexity benefits are moderate given the intermediate duration profile. At current levels, we think meaningful price upside would primarily require further spread compression.

Versus benchmarks, the 2031s trade through the EM BBB index at 117 bps, implying roughly 15 bps of tightness despite MELI’s meaningful exposure to higher-risk Latin American markets. The bonds also trade through their recent historical averages, with the 3-month average at 134 bps and the one-year average at 126 bps, while remaining above the one-year low of 84 bps. Spread performance versus EM Corp BBB shows that the 2031s have typically traded modestly tight to the index, reinforcing their premium positioning within the asset class.

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We maintain our Neutral recommendation on Gerdau. We continue to view the company as a solid BBB credit with a conservative balance sheet, strong liquidity, and a structurally advantaged North American footprint. However, at current spread levels, we see limited scope for material re-rating, particularly as Brazil remains challenged by persistent import penetration and only incremental progress on trade-defense measures.

From a business-risk perspective, 4Q25 reinforced the structural divergence within the portfolio. North America, which accounted for 73% of consolidated adjusted EBITDA in the quarter, continues to benefit from Section 232 protection, resilient non-residential construction demand, data center and renewable energy investment, and a supportive backlog. By contrast, margins in Brazil remain pressured, with import penetration at 21% and EBITDA margins in the high single digits. While Miguel Burnier should structurally enhance Brazilian cost competitiveness from 1H26 onward, we think the timing and magnitude of margin normalization remain contingent on effective trade enforcement and domestic pricing dynamics.

Financially, leverage at 0.91x net and 1.55x gross remains conservative, with FFO to debt at 47.3% and liquidity covering maturities through 2035. The reduction in 2026 capex to R$4.7 billion should support a clearer free cash flow inflection, but shareholder distributions and buybacks limit the scope for materially lower leverage in the near term. As a result, we view the credit as stable and resilient, but without a clear catalyst for meaningful spread tightening from current levels.

At current levels, Gerdau’s curve appears broadly aligned with LatAm BBB comparables, offering limited incremental compensation for extending duration beyond the belly.

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We continue to view Suzano as a high-quality BBB- credit in LatAm, supported by its global cost leadership in hardwood pulp, diversified revenue base, and disciplined financial policy. Spreads have tightened modestly versus 3Q25 and, in our view, now appear broadly fair across most of the curve. Accordingly, we maintain a Neutral recommendation at the issuer level while identifying selective relative value opportunities within the curve, particularly in the 2031s and 2032s.

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We maintain our Neutral recommendation on Cemex. While we continue to view the company as an attractive and resilient LatAm credit, we see limited room for further spread compression at current levels, with bonds trading close to LTM tights. This view is underpinned by a robust credit profile supported by strong liquidity, manageable refinancing needs, and sufficient flexibility to navigate near-term macro and operating volatility. Management’s continued focus on profitability, margin expansion, and balance sheet discipline remains constructive, and we do not expect the credit to underperform. However, valuation plays a more prominent role in our stance, as recent spread compression limits near-term upside.

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We maintain a constructive view of JBS’s overall financial and business risk as it continues to benefit from its scale as the world’s largest protein company, supported by a diversified portfolio across proteins and a global footprint anchored by well-recognized brands. This diversification has helped offset weaker profitability in North America, underscoring the company’s resilience and credit stability.

We see greater value at the long end of the curve and recommend an Overweight position, favoring the 2053s from a carry-to-duration standpoint. We keep a Neutral stance on the short end, where valuations already reflect positive results and strong credit metrics. The 2029s yield 4.4% for a 3.0-year duration, at the lower end of the BBB LatAm range and screening tight versus LatAm peers. Within the belly, most bonds trade tight to JBS’s curve, though we find some value in the 2034 notes, which yield 5.3% for a 6.3-year duration. By contrast, a meaningful portion of the long end trades wide to JBS’s curve, with yields of 6.1%–6.4% that compare favorably to LatAm peers Suzano and Vale, while the 2053s offer a 6.4% yield for a 12.7-year duration. From a price standpoint, we also find value in the JBS 4.375% 2052 notes, yielding 6.1% for a 13.9-year duration, and the 6.250% 2056 notes, yielding 6.3% for a 13.2-year duration, as these bonds are the only ones in the long end priced below par at $77.2 and $99.0, respectively. We think this offers more potential upside and lower sensitivity to spread widening.

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We continue to view Telecom’s acquisition of TMA as a potentially transformative transaction for the local telecom landscape, with clear synergies in mobile and broadband services. We think operating performance is set to improve as the Telefónica integration progresses and cost-reduction initiatives continue to support margins, reinforced by quarterly ARPU increases across the businesses in real terms as inflation becomes more manageable. We also view the recent political results in the October mid-term elections as having significantly reduced near-term political risk, which should incentivize investment and improve access to international capital markets. This in turn supports broader currency stability, helping to mitigate, to some degree, Telecom’s currency mismatch, bolstering macroeconomic confidence, and reducing refinancing risk, which remains a critical consideration given the company’s weak liquidity profile.

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We maintain Braskem with an Overweight recommendation, supported by our view that the company’s large domestic footprint, political relevance, and partial government ownership make a default event less likely in the near term. That said, the timing of liquidity measures and clarity on policy relief will be decisive for any re-pricing potential. At current spread levels, we think most of the downside risk is already priced in, with Braskem bonds trading in the $37–42 range. We favor exposure to the lower-priced bonds within the curve, where investors are better protected against potential haircuts, and find greater value in the 2030 notes, priced at $38.6 and yielding 32.0% for a 3.0-year duration. By contrast, we see elevated risk in the 2081 hybrid notes due to their coupon-deferral optionality and structural subordination.

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We maintain our Overweight recommendation on YPF (B2/B-/CCC+). Encouraging mature-field divestments and a meaningful decline in lifting costs support the company’s transformation as it focuses on expanding unconventional, lower-cost production and enhancing infrastructure through key midstream and export projects such as VMOS and Argentina LNG. We also view positively management’s emphasis on deleveraging following the Total Austral acquisition and its focus on building structural competitiveness. Additionally, we think the company will benefit from an improving macroeconomic environment that supports a stronger sovereign credit profile, and we view the recent political results in the October mid-term elections as having significantly reduced near-term political risk, which should incentivize investment and improve access to international capital markets, reinforcing overall macroeconomic confidence. We expect these efforts to strengthen YPF’s credit profile and drive outperformance in its bonds over the next 9 to 12 months.

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We maintain our Overweight recommendation on Suzano (Baa3/BBB-/BBB-) 2029 and 2036 notes, and we upgrade the 2031 notes to Overweight following their 21 bps spread widening since our last downgrade. The 2031s now trade above the company’s debt curve, offering a more compelling carry-to-duration profile and more attractive relative value compared to LatAm BBB peers. We maintain a Neutral recommendation on the rest of Suzano’s curve.

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We maintain our Overweight recommendation on Minerva. We see the 2033 notes offering higher carry with less duration risk than the 2031 notes. While current yields are less compelling than six months ago, the 2033s still offer an attractive 6.7% yield for a 3.8-year duration, compared to the 2031s yielding 6.1% for a 4.6-year duration. The 2033 notes trade wide to the EM BB curve and close to the LatAm BB curve, while the 2031s trade tight to both benchmarks. This preference is further supported by comparisons with BB-rated peers.

However, we note that the 2033 notes are priced at $109.2, implying limited upside potential and higher sensitivity to spread widening than the 2031 notes priced at $92.1, which offer more room for capital appreciation, a positive pull-to-par advantage, and better downside protection. From a carry-to-duration standpoint, we favor the 2033 notes.

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We maintain our Overweight recommendation on the CSNBZ 4.625% 2031s (yielding 10.0%, priced at $77.5) and CSNBZ 5.875% 2032s (yielding 10.1%, priced at $80.4) for their attractive carry, potential price upside, and wide spreads versus LatAm BB peers. In our view, current spreads already reflect the pressures from weaker steel fundamentals, elevated capex, and limited free cash flow in the near term. While the CSNBZ 6.750% 2028 notes and CSNBZ 8.875% 2030 notes also offer an appealing above-10% carry, we favor the lower-priced bonds, which we think provide more robust downside protection.

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