Ventodivino
מגן ולא יראה
Qui il reporet di S&P (B- con outlook negativo)
OVERVIEW
On Aug. 16, 2019, S&P Global Ratings lowered its long-term foreign and local currency sovereign credit ratings on Argentina to 'B-' from 'B'. The outlook is negative. We also affirmed our 'B' short-term foreign and local currency sovereign credit ratings. At the same time, we placed our 'raAA-' national scale rating on Argentina on CreditWatch with negative implications and lowered our transfer and convertibility assessment to 'B' from 'B+'.
OUTLOOK
The negative outlook on our 'B-' rating reflects a greater than one-in-three chance of a downgrade over the coming year amid very complex economic and financial market dynamics exacerbated by the timing of the electoral calendar. In our view, the increased vulnerabilities of Argentina's credit profile stem from the depreciating exchange rate, a likely acceleration in inflation, and a deepening economic recession. These factors will increasingly challenge the ability of both the current administration and the leading presidential candidate to contain market volatility and restore financial and economic stability.
According to the preset electoral calendar, primary elections (known as the PASO) occurred more than two months before the presidential election and four months before the elected government takes office. Ongoing volatility amid this lengthy period complicates the current administration's authority and legitimacy to contain the financial shock given that the PASO results shifted more electoral power to the opposition. Recovering private-sector market confidence that has taken a hit following the PASO is difficult during the ensuing electoral period. Initial rounds of communications between presidential candidates and moderate statements from representatives of the Peronist party constitute positive policy signals. However, the depth of the recent market deterioration exacerbates the economic and financial challenges ahead for whoever wins the election.
In addition, the pressures on the government's financing profile are significant in the local market--with about US$12 billion in peso or dollar short-term treasury notes (LETEs) coming due over the remainder of 2019. Policy decisions will be complicated by an electorate looking for economic recovery as recession and inflation will worsen.
We could lower the ratings over the next 12-18 months if economic and financial stresses continue to mount, implying persistent difficulties to place or roll over government debt in the local markets with private-sector participants. We also could lower the ratings if access to International Monetary Fund (IMF) funding appears at risk depending on the future negotiations between the IMF and whoever is elected, or following unexpected negative political developments or policy signaling on commitment to fiscal prudence or timely debt service.
We could revise the outlook to stable over the coming months or year if proactive policy signals and execution--be it by the current or next government--successfully turn around or stabilize private-sector confidence. That could facilitate local and external market access for government financing, greater currency stability, demand for peso assets, and a reversal of the spike in interest rates, implying some stabilization of the economy and inflation. To that end, signs of ongoing commitment from the current or next government to implement economic measures that mitigate the additional deterioration in Argentina's external and fiscal debt profiles would support the current rating
OVERVIEW
- Pronounced financial market turbulence, with significant depreciation of the peso and a spike in interest rates, following last Sunday's primary elections in Argentina has meaningfully weakened the sovereign's already vulnerable financial profile.
- This more complicated economic scenario (with a deeper, prolonged recession, even higher inflation, and more stressed debt and financing dynamics) increases the challenges for both current and prospective policymakers ahead of October's elections and with a new administration taking office in December.
- As a result, we are lowering our long-term foreign and local currency ratings on Argentina to 'B-' from 'B'. We are affirming our short-term foreign and local currency ratings at 'B'.
- The negative outlook reflects the risks Argentina faces as the authorities work to stabilize the economy and financial markets. Along with this, uncertainty continues on the private sector's predisposition to roll over government debt and hold pesos while depreciation stresses the government's high financing needs.
On Aug. 16, 2019, S&P Global Ratings lowered its long-term foreign and local currency sovereign credit ratings on Argentina to 'B-' from 'B'. The outlook is negative. We also affirmed our 'B' short-term foreign and local currency sovereign credit ratings. At the same time, we placed our 'raAA-' national scale rating on Argentina on CreditWatch with negative implications and lowered our transfer and convertibility assessment to 'B' from 'B+'.
OUTLOOK
The negative outlook on our 'B-' rating reflects a greater than one-in-three chance of a downgrade over the coming year amid very complex economic and financial market dynamics exacerbated by the timing of the electoral calendar. In our view, the increased vulnerabilities of Argentina's credit profile stem from the depreciating exchange rate, a likely acceleration in inflation, and a deepening economic recession. These factors will increasingly challenge the ability of both the current administration and the leading presidential candidate to contain market volatility and restore financial and economic stability.
According to the preset electoral calendar, primary elections (known as the PASO) occurred more than two months before the presidential election and four months before the elected government takes office. Ongoing volatility amid this lengthy period complicates the current administration's authority and legitimacy to contain the financial shock given that the PASO results shifted more electoral power to the opposition. Recovering private-sector market confidence that has taken a hit following the PASO is difficult during the ensuing electoral period. Initial rounds of communications between presidential candidates and moderate statements from representatives of the Peronist party constitute positive policy signals. However, the depth of the recent market deterioration exacerbates the economic and financial challenges ahead for whoever wins the election.
In addition, the pressures on the government's financing profile are significant in the local market--with about US$12 billion in peso or dollar short-term treasury notes (LETEs) coming due over the remainder of 2019. Policy decisions will be complicated by an electorate looking for economic recovery as recession and inflation will worsen.
We could lower the ratings over the next 12-18 months if economic and financial stresses continue to mount, implying persistent difficulties to place or roll over government debt in the local markets with private-sector participants. We also could lower the ratings if access to International Monetary Fund (IMF) funding appears at risk depending on the future negotiations between the IMF and whoever is elected, or following unexpected negative political developments or policy signaling on commitment to fiscal prudence or timely debt service.
We could revise the outlook to stable over the coming months or year if proactive policy signals and execution--be it by the current or next government--successfully turn around or stabilize private-sector confidence. That could facilitate local and external market access for government financing, greater currency stability, demand for peso assets, and a reversal of the spike in interest rates, implying some stabilization of the economy and inflation. To that end, signs of ongoing commitment from the current or next government to implement economic measures that mitigate the additional deterioration in Argentina's external and fiscal debt profiles would support the current rating
