Fitch cuts Argentine issuers

Fitch Ratings said it downgraded the foreign-currency and local-currency issuer default ratings of numerous corporate issuers because of its recent downgrade of Argentina's sovereign ratings to CCC- from CCC.

“Further, Fitch has taken numerous rating actions on the rated securities of select issuers, assigning a higher recovery rating of RR3 from RR4, which resulted in either an upgrade or an affirmation of the rated issuance. The revised recovering ratings reflect historical precedents of numerous distressed debt exchanges done by Argentine corporates, that did not result in a reduction in principal and the recoveries were above the implied recovery of an RR3 (51%-70%), and the previous recovery rating of RR4 (31%-50%), even when considering the intrusive capital controls laws,” the agency said in a press release.

Fitch cut the following Argentine Utilities to CCC- from CCC because they are highly exposed to the government: AES Argentina Generacion SA, Generacion Mediterranea SA, Genneia SA, and MSU Energy SA.

“YPF SA ratings have been downgraded to CCC- form CCC in line with the sovereign, as its ratings are linked to the Republic of Argentina due to its ownership structure, as well as historical precedents of government intervention,” the agency said in a press release. Fitch also trimmed its ratings for IRSA Inversiones y Representaciones SA and Clisa-Compania Latinoamericana de Infraestructura y Servicios SA to CCC- from CCC.

Finally, the agency lowered the local-currency rating of Arcor SAIC to B- from B.

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