Fitch Revises Outlook on Six Argentine LRGs to Stable; Affirms IDRs at 'B'
09 MAY 2018 1:45 PM ET
Fitch Ratings-Monterrey-09 May 2018: Fitch Ratings has affirmed the Long-Term Foreign and Local Currency Issuer Default Ratings (IDRs) on six Argentine local and regional governments (LRGs) at 'B'. The Rating Outlooks have been revised to Stable from Positive.
The LRGs include: City of Buenos Aires, Provinces of Cordoba, La Rioja, San Juan, Santa Fe, and the Municipality of Cordoba. A full list of ratings follows at the end of this release.
KEY RATING DRIVERS
These rating actions follow Fitch's May 4, 2018, revision of Argentina's 'B' sovereign ratings Outlook to Stable from Positive. The revision of Argentina's Outlook to Stable from Positive reflects macroeconomic policy frictions and political headwinds that have intensified beyond Fitch's prior expectations, highlighting risks surrounding the gradual policy adjustment process. Fitch expects policy adjustments underway to progress despite recent political noise and market volatility, gradually reducing still high inflation and fiscal imbalances, and supporting a stronger and more stable growth outlook. Nevertheless, recent developments have highlighted the vulnerability of the current policy strategy amid market sentiment and political support.
RATING SENSITIVITIES
The ratings of City of Buenos Aires, Municipality of Cordoba, Province of San Juan, Cordoba, Santa Fe, and La Rioja are constrained by the sovereign rating. Consequently, any positive or negative rating action on Argentina's rating would directly impact their ratings in the same direction.
Fitch has affirmed the following ratings and revised their Rating Outlooks to Stable from Positive:
