US “very concerned” about effects of YPF nationalization; Argentina’s risk soars to 1.044
The US government finally broke silence regarding the YPF controversy and expressed “deep concern’ over the expropriation plans. A State Department spokesman said on Wednesday the plans “could have an adverse effect on the Argentine economy.”
“We’re very concerned about the Government of Argentina’s intent to nationalize Repsol YPF,” State Department spokesman Mark Toner said.
The US official indicated that they view it as “a negative development against foreign investors” that could “ultimately have an adverse effect on the Argentine economy and could further dampen the investment climate in Argentina.”
“We would just urge Argentina to normalize its relationship with the international financial and investment community,” he said during the daily press conference at the Department of State.
Tamer revealed that the US has raised this issue on numerous occasions and at the highest levels of the Government of Argentina, since our concerns about these kinds of actions is that they can affect the investment climate in Argentina”.
Meantime Argentina's credit risk increased sharply after the Senate signalled that it would approve the YPF nationalization.
Argentina’s component of the JP Morgan Emerging Markets Bond Index Plus (EMBI+) widened on Wednesday by 51 basis points to 1,044 basis points, a huge move on a day when underlying benchmark US Treasuries were little changed.
The increase shows that investors see Argentina as being roughly three times as risky as other emerging markets.