S&P raises Argentina

S&P said it raised its foreign currency sovereign credit ratings on Argentina to CC from SD. The outlook on the long-term sovereign credit ratings is negative. “We had lowered the ratings to SD (selective default) on Dec. 20 following the unilateral extension of U.S. dollar-denominated short-term paper (Letes) held by private-sector market participants on Dec. 19, 2019; our criteria do not distinguish between short- or long-term ratings when there is a default,” the agency said in a press release.

Argentina cured its short-term defaults by holding two auctions for peso-denominated debt and curing the short-term default.

“Both the CC ratings and negative outlook incorporate that we view debt repayment as highly vulnerable. The new administration is expected to advance with a restructuring plan in the coming months, the terms of which are unknown, affecting its long-term debt with the private sector,” said S&P.

The next debt restructuring would be in line with the agency’s CCC rating criteria and distressed exchange criteria; it could entail an extension of maturities, which will not be compensated by the issuer, or a reduction in the face value of debt. Alternatively, there are risks associated with failure to advance with a timely debt renegotiation, raising the possibility of missing principal or interest payments, the agency said.

Fitch puts Geo Dipa on positive watch

Fitch Ratings said it placed PT Geo Dipa Energi (Persero)’s national long-term rating of A(idn) on rating watch positive.

The RWP is based on expectations of added support from its parent, the Indonesian sovereign for its proposed investments. Any extra support is likely to result in strengthening of linkages between the state and the company, as set out in Fitch’s parent subsidiary linkages criteria and is likely to result in a rating upgrade, the agency said.

Fitch said it will assess the nature and extent of support from the state, including the continuation of support over the medium to long term, in determining the linkages and consequently the extent of notching. If state support is provided via equity contribution and extension of project debt, Geo Dipa could be rated on a top-down basis, in the agency’s view, and this may lead to a rating upgrade of more than one notch.

Fitch assigns BB to ANZ Bank (Vietnam)

Fitch Ratings said it assigned a first-time long-term foreign-currency issuer default rating of BB and long-term local-currency IDR of BBB- to ANZ Bank (Vietnam) Ltd.

The bank’s ratings are support driven. Fitch said it believes the bank’s parent Australia and New Zealand Banking Group Ltd., which is rated AA-, has a strong ability to extend extraordinary support to its Vietnam subsidiary given the parent’s credit profile and the bank’s small asset base that accounted for only around 0.2% of the parent’s total assets at end-2018.

The outlook is positive. The positive outlook reflects Fitch’s outlook on the Vietnam sovereign.

S&P revises China Orient Asset view to stable.

S&P said it revised the outlook on the long-term issuer credit ratings on China Orient Asset Management Co. Ltd., China Orient Asset Management (International) Holding Ltd., and Dongxing Securities Co., Ltd. to stable from positive.

Concurrently, S&P affirmed its BBB+ long-term ratings on China Orient and Orient International and the BBB long-term issuer credit rating on Dongxing. The agency also affirmed the BBB+ issue credit rating on the senior unsecured notes and credit enhanced loan participation notes Orient International guarantees and the BBB issue rating on the senior unsecured notes Dongxing guarantees. Orient International is China Orient’s wholly owned subsidiary based in Hong Kong and Dongxing is its China-based securities subsidiary.

“The outlook revision reflects our view that the improved leverage of China Orient's core distressed asset management unit alone is unlikely to be sufficient to raise the group's overall credit profile over the next 12–24 months,” said S&P in a press release.

“We expect the leverage ratio of China Orient's core business unit – as measured by adjusted debt to adjusted total equity (ATE) – to remain below 6.5x, the threshold for a moderate assessment, despite the company's strong initiatives to enhance its position in China's distressed asset management market,” the agency said.

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