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EM LATAM CREDIT: Moody's Upgrades Argentina's Rating

EM LATAM CREDIT
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  • "Moody's Ratings upgraded Argentina's currency ratings as high inflation and government debt are beginning to ease. The ratings firm also changed its outlook to positive from stable. Moody's on Friday bumped Argentina's long-term foreign and local currency issuer ratings up to Caa3 from Ca as the government's policy shift under Javier Milei has allowed fiscal and monetary adjustments that are helping address economic imbalances. External finances are stabilizing and the likelihood of a credit event is declining. The Caa3 rating still means that the country's obligations are in poor standing and subject to very high credit risk.
  • Government debt is declining and expected to move toward 50% of GDP by 2026, compared with 156% in 2023, Moody's said. The possibility of Argentina entering a new program with the International Monetary Fund would help its liquidity and allow it to regain external market access. Increased foreign energy investment in Argentina's hydrocarbon resources could also improve the country's outlook. Moody's said it would further upgrade its rating if reserves continue to grow and lead to external liquidity.
  • There are still significant risks involved in the country covering external debt payments, including ones related to removing capital and exchange controls. Negative shocks could also lead to a credit event with material losses on bondholders, Moody's said. Moody's said it would downgrade its rating if political or economic shocks undermine Argentina's stability or its ability to repay external debt." - Moody's
    ARGENT 4.125% 2035, $67.28, +.56
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  • "Moody's Ratings upgraded Argentina's currency ratings as high inflation and government debt are beginning to ease. The ratings firm also changed its outlook to positive from stable. Moody's on Friday bumped Argentina's long-term foreign and local currency issuer ratings up to Caa3 from Ca as the government's policy shift under Javier Milei has allowed fiscal and monetary adjustments that are helping address economic imbalances. External finances are stabilizing and the likelihood of a credit event is declining. The Caa3 rating still means that the country's obligations are in poor standing and subject to very high credit risk.
  • Government debt is declining and expected to move toward 50% of GDP by 2026, compared with 156% in 2023, Moody's said. The possibility of Argentina entering a new program with the International Monetary Fund would help its liquidity and allow it to regain external market access. Increased foreign energy investment in Argentina's hydrocarbon resources could also improve the country's outlook. Moody's said it would further upgrade its rating if reserves continue to grow and lead to external liquidity.
  • There are still significant risks involved in the country covering external debt payments, including ones related to removing capital and exchange controls. Negative shocks could also lead to a credit event with material losses on bondholders, Moody's said. Moody's said it would downgrade its rating if political or economic shocks undermine Argentina's stability or its ability to repay external debt." - Moody's
    ARGENT 4.125% 2035, $67.28, +.56