Fitch Publishes Argentine Provinces Dashboard 2016

MONTERREY, Mexico--(BUSINESS WIRE)-- Fitch Ratings has published its Argentine Provinces Dashboard 2016. The publication explores key elements around the credit profile of Argentine Provinces.

Over the last decade, provincial debt as a percentage of current revenues and/or GDP remains at very low levels. Although there is no solvency risk, the market difficulties to access long-term financing have been leaving provinces exposed to refinancing risk. Moreover, a high percentage of the consolidated provincial debt is denominated or linked to foreign currency (USD). Therefore, debt service and debt stock have been affected by the currency depreciation. Borrowing requirements by provinces in 2016 amount to ARS66 billion (USD4.6 billion). This amount could be higher as some provinces also have authorization to refinance existing debt to get better terms and conditions.

On the fiscal performance, provinces have a rigid expenditure structure. Thus, the high inflation environment has pressured operating margins since 2009, through salaries and prices adjustments. In contrast, the devolution to the provinces of the 15% federal transfers share withhold by the nation is a credit positive. Negotiations are undergoing regarding the progressiveness of the devolution and the debt recognition of the years where the withholding was effective. Currently, at a consolidated level, federal transfers represent 50% of provinces' current revenues.

Compared to international peers, the key debt and fiscal metrics of the majority of Argentinian Provinces, would suggest an intrinsic credit profile higher than the country ceiling of 'B'.

The full report, 'Argentine Provinces Dashboard 2016', is available at www.fitchratings.com or by clicking on the link.

Additional information is available at 'www.fitchratings.com'.

Argentinian Provinces Dashboard (May 2016)

https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=881556

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View source version on businesswire.com: http://www.businesswire.com/news/home/20160511006291/en/

Fitch Ratings
Humberto Panti
Senior Director
+52 81 8399 9100
Fitch Mexico S.A. de C.V.
Prol. Alfonso Reyes 2612
Monterrey, N.L. Mexico
or
Gerardo Carrillo
Senior Director
+52 55 5955 1600
or
Media Relations:
Elizabeth Fogerty, +1 212-908-0526
[email protected]

Source: Fitch Ratings

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