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July 28, 2014
Wednesday, March 19, 2014

Moody's lowers ratings for Argentine provinces

International credit rating organisation Moody's has lowered the grade of the debt held by the majority of Argentine provinces and municipalities, also changing the projection for lending from stable to negative.

The agency also moved to lower the rating of several national banks and financial institutions, following the previous decision to downgrade Argentine sovereign bonds to the Caa1 category earlier in the week.

In a press statement, Moody's affirmed that the decision was based on the growing risks faced by issuers of subsovereign bonds with respect to accessing foreign currency, in order to continue honouring commitments in the medium term.

"The grade lowering continues to reflect the tight institutional and financial links that these issuers have with the federal government, which exposes their credit quality to increased and systematic risk," the agency said.

The decision affects bonds issued by the provinces of Buenos Aires, Córdoba, Chubut, Entre Ríos and Mendoza, as well as the City of Buenos Aires and the Córdoba districts of the capital and Río Cuarto.

"Potential adverse effects of a weakened economic perspective, along with certain government measures and exchange controls have caused this revision," the statement underlined.

Simultaneously, the debt ratings of 19 banks were reduced, while 26 financial institutions saw their deposit grades go down in the latest report from the international agency.
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Tags:  Moody's  debt  Argentina  international reserves  





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