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Moody’s changes Argentina rating outlook to negative from stable

Tuesday, September 18th 2012 - 09:27 UTC
Full article 30 comments
Increasing questions about the reliability of official statistics from Indec Increasing questions about the reliability of official statistics from Indec

Moody's Investors Service has changed the rating outlook on Argentina to negative from stable, citing haphazard economic policy decisions coupled with increasing questions about the reliability of official statistics.

Moody's said it could cut the country's ratings into the Caa category if policy decisions hurt the main economic and debt metrics.

A large and sustained deterioration of commodity prices, a persistent decline in international reserves and failure to make needed fiscal adjustments leading to a rise in the debt ratios, could also result in a lower rating, it said.

Moody's said it would consider moving the rating outlook back to stable should Argentina's policy mix becomes more consistent and predictable.

In particular a resolution of either the Paris Club debt arrears or material improvements in the quality of official economic data would be considered credit positive for the rating, the agency said.

The change to negative affected Argentina's B3 local and foreign-currency government bond ratings. The B3 ratings themselves as well as the B2 foreign currency bond ceiling, Caa1 foreign currency deposit ceiling, and the Ba3 local currency bond and deposit ceiling remain unchanged.
 

Categories: Economy, Argentina.

Top Comments

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  • Captain Poppy

    It's official junk status......she worked hard at it and got it !!

    Sep 18th, 2012 - 10:19 am 0
  • Rufus

    Moody's ratings are a bit hard to read. If I have it right, Argentina is currently rated at the bottom of “Highly Speculative Junk Bond”, and is in danger of being downgraded to “Substantial Risk Junk Bond”.

    That puts it two grades above “Default Immenent With Little Prospect For Recovery Junk Bond”.

    Have I got that right?

    Sep 18th, 2012 - 10:34 am 0
  • Idlehands

    Yes: http://www.moodys.com/researchdocumentcontentpage.aspx?docid=PBC_79004 - page 5

    It basically means that for every $1,000 you invest in Argentina you will lose $1,000

    Sep 18th, 2012 - 10:42 am 0
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