ARGENTINA: Moody’s Upgrades Argentina’s Rating to B2; Outlook Stable

Friday December 8 2017

On 29^th November Moody’s Investors Service upgraded he Government of Argentina’s local and foreign currency issuer and senior unsecured ratings to B2 from B3.

The key drivers behind the upgrade of the rating to B2 are:

1) A record of macro-economic reforms that are beginning to address long existing distortions in Argentina’s economy.

(2) The likelihood that reforms will continue and in turn sustain the recent return to positive economic growth.

The stable outlook on Argentina’s B2 ratings balances Argentina’s credit strengths of its large, diverse economy and moderate income levels against the credit challenges posed by still high fiscal deficits and a reliance on external financing, which increases its vulnerability to external event risk.

Moody’s has also raised Argentina’s foreign currency bond ceiling to B1 from B2 and the foreign currency deposit ceiling to B3 from Caa1. The long term local currency bond and deposit ceilings were raised to Ba2 from Ba3. The short-term foreign-currency bank deposit ceiling, the short-term foreign-currency bond ceiling, and the short term local currency bond and deposit ceilings all remain unchanged at NP.

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