Argentina Credit Rating Raised by S&P on Debt Level
Argentina's credit rating was raised for the second time in a year by Standard & Poor's, which cited falling debt levels and increased investment.
New York-based S&P lifted the nation's long-term foreign currency debt rating to B, the same level as Uruguay and one step above Bolivia, from B- with a stable outlook. The rating is five levels below investment grade.
The upgrade reinforces many investors' view that the economy has recovered in Argentina five years after the government defaulted on $95 billion of bonds, said Vitali Meschoulam, a fixed-income strategist at HSBC Securities USA in New York. Yesterday Argentina sold dollar-denominated bonds to international banks for the second time since the default.
The rating change is ``further confirmation that Argentina's economy is on the right track,'' Meschoulam said.
Higher ratings in Argentina are emblematic of improved credit quality across Latin America as interest rates fall and increased exports of commodities such as oil, copper and soybeans bolster international reserves. Moody's Investors Service said this week it may lift the credit rating for Chile, ranked along with Mexico the highest in the region at Baa1. Last month, S&P raised Brazil's credit rating to BB, two levels below investment grade, from BB-.
Brazil, where the inflation rate was as high as 4,900 percent in June 1994, may achieve investment grade by the middle of next year, Nelson Rocha Augusto, president of Rio de Janeiro-based BB DTVM, Latin America's largest asset manager, said in an interview. Brazil's annual inflation rate was 5.5 percent in February.
Economic Growth
Argentina's economy grew 9.1 percent last year and has expanded more than 25 percent in the past three years, helped by record exports of commodities such as soybeans and oil. The country in December used about one third of its central bank reserves to pay off its entire debt with the International Monetary Fund, reducing its need to tap international credit markets.
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New York-based S&P lifted the nation's long-term foreign currency debt rating to B, the same level as Uruguay and one step above Bolivia, from B- with a stable outlook. The rating is five levels below investment grade.
The upgrade reinforces many investors' view that the economy has recovered in Argentina five years after the government defaulted on $95 billion of bonds, said Vitali Meschoulam, a fixed-income strategist at HSBC Securities USA in New York. Yesterday Argentina sold dollar-denominated bonds to international banks for the second time since the default.
The rating change is ``further confirmation that Argentina's economy is on the right track,'' Meschoulam said.
Higher ratings in Argentina are emblematic of improved credit quality across Latin America as interest rates fall and increased exports of commodities such as oil, copper and soybeans bolster international reserves. Moody's Investors Service said this week it may lift the credit rating for Chile, ranked along with Mexico the highest in the region at Baa1. Last month, S&P raised Brazil's credit rating to BB, two levels below investment grade, from BB-.
Brazil, where the inflation rate was as high as 4,900 percent in June 1994, may achieve investment grade by the middle of next year, Nelson Rocha Augusto, president of Rio de Janeiro-based BB DTVM, Latin America's largest asset manager, said in an interview. Brazil's annual inflation rate was 5.5 percent in February.
Economic Growth
Argentina's economy grew 9.1 percent last year and has expanded more than 25 percent in the past three years, helped by record exports of commodities such as soybeans and oil. The country in December used about one third of its central bank reserves to pay off its entire debt with the International Monetary Fund, reducing its need to tap international credit markets.
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posted by Alice at
Sunday, March 26, 2006
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