Political Risk Latin America Blog @PolRiskLatam

Republic Of Argentina Ratings Raised To ‘B’; Outlook Remains Stable

Posted in News and Articles, Political Risk by politicalrisklatam on September 14, 2010

Standard & Poor’s Press Release, September 13th, 2010. 

  • Continued funding from public sector agencies has reduced the level of capital market debt maturing over the next two years.
  • We have raised our foreign and local currency rating on Argentina to ‘B’. The ratings remain constrained by a polarized political and economic environment, lack of predictability in government policies and high inflation.
  • The outlook remains stable.

Standard & Poor’s Ratings Services said today that it raised its long-term foreign and local currency credit ratings on the Republic of Argentina to ‘B’ from ‘B-‘. In addition, we have raised our transfer and convertibility assessment on Argentina to ‘B’ from ‘B-‘. Standard & Poor’s ‘4’ recovery rating on the republic’s unsecured debt issues remains unchanged. The outlook on the ratings remains stable. 

Standard & Poor’s raised the sovereign ratings on the republic of Argentina following improvements in the government’s financial profile thanks to lower debt levels and diminished short-term liquidity pressures. “The combination of a strong economic recovery in 2010 supported by favorable external conditions that are expected to persist over the medium term should ease rollover risk,” said Standard & Poor’s credit analyst Sebastian Briozzo. “Despite the prevalence of a confrontational political and economical approach that has increased polarization, we expect GDP to increase by 7% in 2010 and 4.5% in 2011.”

 The government of Argentina has been able to reduce debt levels in terms of GDP and improve its debt maturity profile in recent years. Standard & Poor’s expects net general government debt to come down to 44% of GDP by year-end 2010 from about 75% at the end of 2005. (continue reading… )

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