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S&P maintains Argentina’s rating stable at “B”, supported by strong surplus

Tuesday, September 13th 2011 - 02:22 UTC
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Standard & Poor’s reported that Argentina’s rating remains as “B” (global scale, local and foreign currency) and “raAA” (national scale for Argentina). Read full article

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  • GeoffWard2

    The S&P ratings allocate B rating to Argentina.

    Nations usually are accorded AAA, AA(AA+, AA, AA-), A(A+, A, A-), BBB.

    BB and below are ‘Non-Investment Grade’, sometimes called ‘junk grade’.

    “B: Vulnerable but currently has the capacity to meet its financial commitments.
    Adverse business, financial, or economic conditions will likely impair capacity or willingness to meet its financial commitments.” (Wiki)

    B grade for Argentina is bad, but it could be worse –

    “C grades are available for the highly vulnerable and likely defaulters.”

    But there is a certain case to be made that Argentina should be graded even lower:
    • R: “Under regulatory supervision owing to its financial condition. During the pendency of the regulatory supervision, the regulators may have the power to favor one class of obligations over others or pay some obligations and not others.”

    • SD:” has selectively defaulted on some obligations”

    • D: “has defaulted on obligations and S&P believes that it will generally default on most or all obligations” (ibid.)

    Because of Argentina’s recent default, the highest rating that S&P SHOULD allocate is a resounding SD.

    Sep 13th, 2011 - 10:07 pm - Link - Report abuse 0

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