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LatinNews Daily - 02 January 2020

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In brief: S&P lifts Argentine foreign currency rating from selective default

* Credit ratings agency Standard & Poor’s (S&P) has raised Argentina’s long-term foreign currency rating from ‘SD’ (selective default) to ‘CC’ (a measure on a rating scale meaning default is expected as a “virtual certainty”, regardless of when). On 20 December 2019 S&P downgraded the rating to SD when the administration led by President Alberto Fernández unilaterally extended the maturity of US dollar-denominated short-term letters (treasury bills or Letes for its acronym in Spanish) held by private sector creditors on 19 December 2019. However, according to S&P rating criteria, this default has since been cured” by way of two Argentine government auctions of peso-denominated debt on 20 December and 26 December 2019 for a total of Ar$18.85bn (US$314.8m). Overall, S&P maintained its 'negative' outlook for Argentina citing “highly unfavourable debt dynamics, a volatile exchange rate (which has sharply depreciated recently), high inflation, and a deep economic recession”.