Moody's rates Buenos Aires bonds B3

Moody's Investors Service said it assigned a global scale foreign-currency rating of B3 to the $550 million senior unsecured global bonds to be issued by the Province of Buenos Aires, along with a Argentina national scale rating of A3.ar.

The proceeds will be used for general purposes, including capital and social projects and also to finance fiscal imbalances.

The bullet-maturity bonds, which constitute direct, unconditional, unsecured and unsubordinated obligations of the province, are to be nominated in U.S. dollars and will pay a fixed annual interest rate of 11¾% on a semi-annual basis beginning in April 2011, Moody's said.

The ratings are in line with the province's issuer ratings of B3 and A3.ar, which reflect the considerable economic uncertainty, cost pressures and weakened financial performance since 2005, the agency said.

The ratings also take into account the financial dependence on the federal government, Moody's said.

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