Uruguay is likely to be the next Latin American country to win an investment grade rating from Moody's Investors Service, with a review likely late this year, a senior officer from the ratings agency said on Sunday.
Moody's rates Uruguay's long-term sovereign foreign currency credit at Ba1, one notch below investment grade, with a positive outlook. If upgraded, the country would join bigger peers such as Brazil, Colombia and Peru, which have won coveted investment grade ratings in recent years.
The only country that is just below the line with a positive outlook is Uruguay, Mauro Leos, Moody's Latin American regional credit officer, said on the sidelines of Inter-American Development Bank meetings.
It would seem to be that at the earliest we would be discussing Uruguay again late in the year, he added.
Both Standard & Poor's and Fitch Ratings have Uruguay at the similar rating level of BB-plus, but with stable outlooks.
Uruguay in the late nineties had achieved investment grade but lost it when the Argentine 2001/02 crisis and default spilt over to its financial system, where many Argentines traditionally safeguard their assets.
Uruguay's Economy Ministry has been working to reduce the country's foreign currency debts and extend maturities, steps seen as crucial for an upgrade to investment grade status.
However, in spite of the good debt ratio showing of Uruguay and sustained growth of its economy the country still presents a serious problem with inflation and the budget deficit, which it tries to control by letting the local currency appreciate.
Other Moody's ratings actions likely this year include a review of Brazil's Baa2 rating, probably in the second half of the year, and a look at Peru, which has had a positive outlook on its Baa3 rating for almost a year.
Peru has a strong balance sheet and President Ollanta Humala, who has shed his hard line past and embraced private investment, has a strong mandate, Leos said.
The positive outlook was assigned about a year ago so ... by mid-year we may be taking another look at Peru to determine what to do, he said.
Commenting for this story is now closed.
If you have a Facebook account, become a fan and comment on our Facebook Page!
the word meaning of [ Moody] is depressive person...!!Mar 19th, 2012 - 10:38 am 0
and there is also standard & poors (also not very positive sounding).Mar 19th, 2012 - 02:08 pm 0
The third one is Bitch Ratings, sorry... Fitch Ratings :D
Back to the there, congrats Uruguay... you surely deserve this.
Chile, Peru and Uruguay would be in the club then.
I have every support for Uruguay but am less impressed with the 'ratings agencies'.Mar 19th, 2012 - 03:50 pm 0
These are the morons who, after years of shouting their own praises, failed utterly to see the crash coming.
They also said similar things to this last year and then failed to carry through with the grading, even though Uruguay had done everything they said was 'necessary'.