Fitch ups select Argentine corporates

Fitch Ratings said it upgraded select Argentine corporates following its upgrade of Argentina's long-term local currency issuer default rating to B from B- and country ceiling to B+ from B.

The agency upgraded Cerveceria y Malteria Quilmes SA's foreign currency issuer default rating to B+ from B; Pan American Energy's foreign currency issuer default rating to BB- from B+; Petrobras Energia SA's foreign currency issuer default rating to B+ from B; Telefonica Holding de Argentina SA's foreign currency issuer default rating to B+ from B and senior unsecured notes due 2007 to B+ from B; Telefonica de Argentina SA's foreign currency issuer default rating to B+ from B; and YPF SA's foreign currency issuer default rating to BB+ from BB.

Cerveceria y Malteria Quilmes' ratings are on ratings watch positive. The outlook is stable for the remaining corporates' ratings.

Fitch said the Argentine sovereign rating actions reflect reductions in government financing requirements and favorable near-term economic prospects. Debt amortization requirements through the end of 2007 are modest compared with those of other speculative-grade sovereigns, and refinancing them with new local market issues and proceeds from an expected budget surplus appears feasible.

Small as its near-term requirements are, Argentina could still encounter refinancing difficulties if international market conditions deteriorate sharply because most demand for local issues has come from non-residents, the agency noted.

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