May 24, 2013
Moody's changes Argentine insurers, guarantors outlook to negative
Moody's Investors Service changed outlook to negative for most Argentine insurers and reciprocal guarantors, today.
Companies reached by the new outlook are: ACE Seguros, Allianz Argentina Cia. de Seguros, BBVA Consolidar Seguros, Caja de Seguros, Caruso Cia. Argentina de Seguros, Chubb Argentina de Seguros, Generali Argentina Compañía de Seguros, La Segunda ART, La Segunda Compañía de Seguros de Personas y La Segunda Coop. Ltda. de Seguros Generales, Mapfre Argentina ART, Mapfre Argentina de Seguros de Vida, Mapfre Argentina Seguros, Nación Seguros de Retiro, Nación Seguros, Provincia Seguros, Royal & Sun Alliance Seguros, San Cristóbal Sociedad Mutual de Seguros Generales, Aval Rural SGR, Fondo de Garantías Buenos Aires (Fogaba), Garantía de Valores SGR, Garantizar SGR, Vínculos SGR.
The news come after the investors service had recently changed the rating outlook on Argentina to negative from stable, citing haphazard economic policy decisions coupled with increasing questions about the reliability of official statistics.
Moody's said it could cut the country's ratings into the Caa category if policy decisions hurt the main economic and debt metrics.
A large and sustained deterioration of commodity prices, a persistent decline in international reserves and failure to make needed fiscal adjustments leading to a rise in the debt ratios, could also result in a lower rating, it said.
Moody's said it would consider moving the rating outlook back to stable should Argentina's policy mix becomes more consistent and predictable.
In particular a resolution of either the Paris Club debt arrears or material improvements in the quality of official economic data would be considered credit positive for the rating, the agency said.
The change to negative affected Argentina's B3 local- and foreign-currency government bond ratings. The B3 ratings themselves as well as the B2 foreign currency bond ceiling, Caa1 foreign currency deposit ceiling, and the Ba3 local currency bond and deposit ceiling remain unchanged.