S&P rates Mendoza notes B

S&P said it assigned a B rating on the Province of Mendoza's proposed senior unsecured notes for up to 5.5 billion in Argentine pesos.

The province will use the proceeds to make debt-service payments, the agency said.

S&P also said it doesn't view this additional debt as harmful to the province's financial profile.

The agency said expects that its moderate debt burden will continue to support Mendoza's credit profile.

The foreign-currency rating on the province is the same as the B global scale long-term issuer credit rating on Argentina, S&P said.

Mendoza, like most Argentine local- and regional-governments, doesn't meet the criteria to have a higher rating than the rating on the sovereign, mostly because the province's liquidity isn't sufficient to cover all of its debt obligations, the agency said.

Mendoza's individual credit profile also is constrained by its rigid operating spending structure, limited room to increase revenues, volatile budgetary performance and continued operating deficits and deficits after capital expenditure, S&P said.

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