Category: Argentina

Argentina’s economy grew by 8.5% between January and November last year, according to the government. Year on year, the economy expanded by 8.6% in November, driven by construction and industrial production and rose 0.6% on a monthly basis.

Moody’s Investors Service has changed the rating outlook to positive, from stable, for two local governments in Argentina. The agency said the action was prompted by a similar, recent, outlook change for Argentina’s B2 foreign currency country ceiling for bonds. The governments and ratings affected are: City of Buenos Aires foreign currency bonds rated B2 (global scale) and Aa3.ar (Argentina national scale). Both were assigned a positive outlook; these ratings are constrained by Argentina’s foreign currency country ceiling. The outlook for domestic currency bonds rated B1 and Aa2.ar remains stable, said the agency. Meanwhile, Province of Mendoza foreign currency bonds due September 2018 rated B2 (global scale) were assigned a positive outlook; this rating is constrained by Argentina’s foreign currency country ceiling. The outlook for the province’s domestic currency issuer ratings of B1 (global scale) and Aa3.ar (Argentina national scale), as well as for its foreign currency bonds due September 2018 rated Aa3.ar (Argentina national scale), remains stable.

Moody’s Investors Service has raised the outlook on its B3 foreign- and local-currency rating of Argentina’s sovereign bonds from stable to positive. The change was due to “continued improvement in the fiscal accounts that, combined with robust economic growth and substantial accumulation of international reserves, has contributed to strengthening the government’s overall credit profile and to reducing external vulnerabilities”, according to Moody’s. An outlook change to positive from stable was also made to Argentina’s B2 foreign currency country ceiling for bonds and to the Caa1 ceiling for foreign currency bank deposits. Unaffected by the rating action is Argentina’s Ba1 local currency bond ceiling, the highest possible rating that could be assigned to obligors and obligations denominated in local currency within the country remains stable, as well as the Ba1 local currency deposit ceiling.

Argentine property conglomerate IRSA is to issue 10 years bonds worth up to $150 million. The money raised will be used to finance expansion of its office-building business, including acquisitions. The bonds have been awarded a local A+ rating from Standard & Poor’s and an A minus national scale rating from Fitch. The issue will be coordinated by Citigroup and Credit Suisse.

Argentina’s Banco Macro Bansud is planning to sell up to $150 million of 10-year bonds, the bank announced Wednesday. Last month, Banco Macro sold $150 million of 30-year notes, which priced at par to yield 9.75% before stepping up to 7.11%. Credit Suisse and UBS led that transaction.

A group of US investors, led by JP Morgan, has increased its 19.5% stake in Argentine power holding company Empresa Distribuidora Eléctrica Regional (Emdersa) to over 78%. The company groups together several local electricity distributors. The investor group bought a further 58.78% of Emdersa after paying $85.7 million to GPU Argentina Holdings for its share.

Roberto Lavagna, the former economy minister who led Argentina out of financial meltdown, has officially confirmed he will be contesting the presidency later this year. Lavagna managed the economy from the start of 2002 until he resigned in November 2005 following disagreements with President Néstor Kirchner. He has been hinting at running for the “Casa Rosada” for the past six months but formally confirmed his plans to stand in October’s elections in interviews with the country’s leading dailies on Friday. Lavagna will face either President Kirchner, seeking a second term, or his wife, senator Cristina Fernández de Kirchner.

Argentina succeeded in keeping inflation last year under double digits, thanks to the year-long drive of heterodox price freeze agreements, say the government. Annual inflation came in at 9.8% after prices in December rose by 1.0%, according to INDEC, the country’s national statistics bureau. This compares with inflation of 12.3% in 2005.

Argentina is heard to be preparing the next tranche of its Bonar VII debt issue. The sovereign is expected to tap international markets for a further $500 million to take the total issue of the bonds, which mature 2013, to $1.5 billion. The Republic last issued the securities in November when it achieved a yield of 8.03%, but expects to get below 8% this time around. Argentina’s external financing needs in the first quarter of the year total $3.76 billion.

Luxembourg-based Ternium, Latin America’s largest steel group, has increased its stake in Argentina’s steel producer Siderar to 60.9%. It agreed to pay $107.5 million, or $6.376 per share, to Brazil’s Companhia Vale do Rio Doce (CVRD) for its 4.85% share. Ternium is owned by Argentine group Techint.