S&P ups Argentina local-currency rating

S&P said it raised its local-currency sovereign credit ratings on Argentina to CCC-/C from SD/SD and its national scale rating to raCCC+ from SD. The agency also affirmed the CCC+/C foreign-currency sovereign credit ratings on Argentina.

The higher ratings follow the government completing its peso-debt exchange that S&P said it considered distressed.

“Last week's swap cleared peso-denominated maturities coming due in the first quarter 2023 and was the third such operation since August 2022. We will continue to analyze any subsequent debt exchanges at this low rating level on a case-by-case basis incorporating the macroeconomic and political context. Our methodology indicates that we classify exchanges as a distressed exchange when in our view, absent participation, a conventional default would likely ensue.

“Based on our criteria, a CCC- rating reflects that a default, distressed exchange, or redemption appears to be inevitable within six months, absent unanticipated significantly favorable changes in the issuer's circumstances,” S&P said in a press release.

The outlook is negative.

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