Moody's: Focus shift for Latin America

Because credit conditions in Latin America are currently benign, Moody's Investors Service said it will be giving more emphasis in its rating decisions to the quality of the governance and management of corporate issuers in Latin America.

Moody's rating committees for Latin America corporate issuers are spending more time on discussions about corporate governance and management quality as a differentiating factor between rated issuers, the agency said. Low leverage and high liquidity in the region make capital allocation decisions, and the process behind those decisions are key components of future creditworthiness, the agency added.

Important trends for credit quality by industry include a gradual improvement in the regulatory environment for utilities in Brazil, Moody's said, and possibly also for utilities in Argentina. Merger and acquisition activity in the telecom and media sector could result in some weakening of credit profiles, Moody's said.

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