LONDON, May 19 /PRNewswire/ -- As part of the process of harmonising
ratings between Fitch IBCA and Duff & Phelps Credit Rating Co. (DCR), which
are expected to merge in early June, 2000, DCR has adjusted Argentina's
long-term local currency (Argentine peso) sovereign rating to
BB+ (Double-B-Plus) from BBB- (Triple-B-Minus). Argentina's long-term foreign
currency sovereign rating remains the same at BB (Double-B).
Argentina's sovereign ratings are supported by the smooth political
transition effected late last year, followed by the enactment by the new
government of a substantive economic reform programme. This programme has
included a credible deficit reduction plan for 2000, a cap on provincial
transfers and labour market liberalisation. In conjunction with the fiscal
responsibility law passed last autumn, which aims to balance the budget by
2003, and the privatisation of social security, the fiscal costs of which are
expected to begin declining in 2003, these reforms should improve Argentina's
sovereign credit fundamentals markedly over the medium term. Nevertheless,
Argentina's ratings remain constrained by the country's heavy public external
debt service schedule over the next five years, in addition to concerns about
Argentina's low savings rate and export competitiveness.
DCR became a subsidiary of Fitch IBCA on April 12, 2000 and it is expected
that the companies will merge by early June, 2000. As previously announced,
the combined analytical staffs of Fitch IBCA and DCR have been working
together to harmonise the ratings and rating approach for the new company. As
part of this process, analysts from Fitch IBCA participated with analysts from
DCR as part of the joint committee that determined this ratings action.
For additional research on Sovereign Ratings, visit DCR's web site at
http://www.dcrco.com (Quick Search: Sovereigns). DCR's research is also
available on Bloomberg at DCR, First Call's BondCall Direct/Research
Direct at http://www.firstcall.com and Multex at http://www.multex.com , as
well as through other third-party providers.
SOURCE Duff & Phelps Credit Rating Co.
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Related links:
http://www.dcrco.com
CONTACT:
Richard Fox of Fitch IBCA,
+44-0-20-7417-4357, or rfox@fitchibca.com; or Roger M. Scher of
Duff & Phelps Credit Rating Co., 212-908-0240, or scher@dcrco.com
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