S&P Global Ratings raised its debt grade for Argentina on Tuesday, acknowledging the agency made a mistake when it changed the rating in late December for the crisis hit country.
S&P bumped the rating on foreign long-term debt to 'CCC-' from 'CC,' taking it up two notches from 'SD' and back to where it was prior to December 20 when the country was declared in default.
After bumping the rating up a notch on December 30, 2019, we identified that we had misapplied our criteria, S&P said in a statement. We are now correcting this criteria misapplication.
The credit outlook remains negative which reflects the prominent downside risks to timely and full payment of debt per our criteria over the short term amid stressed economic and financial market dynamics.
The government of new President Alberto Fernandez announced emergency measures late last month to stabilize the nation's economy which is suffering its worst economic crisis in years.
He is seeking a debt restructuring from creditors, which we expect is likely to be characterized as a distressed debt exchange, and an extension of the maturity of the loans, S&P said.
Mr Fernandez has described this crisis as almost as bad as that of 2001 - when Argentina defaulted on a US$100 billion debt. Its current foreign debt stands at around 90 per cent of GDP.