Fitch Takes Rating Actions on Argentine Local and Regional Governments Following Sovereign Downgrade

BUENOS AIRES, Argentina--()--Fitch Ratings has downgraded several Argentine local and regional governments' Long-term foreign currency and Local Currency issuers' ratings and related issues. Fitch has also affirmed National Scale Ratings. The Ratings Outlook was revised to Negative from Stable. A full list of ratings follows at the end of this release.

These rating actions follow the downgrade of the Argentina Foreign Currency and Local Currency Sovereign rating to 'CC'/'B-' with a Negative Outlook by Fitch, as well the Country Ceiling to 'B-' (see 'Fitch Downgrades Argentina FC IDR to 'CC'; LC IDR to 'B-' with a Negative Outlook'; dated Nov. 27, 2012 at www.fitchratings.com). Fitch's downgrade of Argentina's local currency IDR reflects the sustained deterioration of its credit fundamentals; while the downgrade of the foreign currency IDR reflects that a default by Argentina is probable.

The Negative Outlook assigned is based on the high correlation of the subnationals with the sovereign and is in line with the Negative Outlook assigned to Argentina's local currency IDR, reflecting a deterioration of its credit fundamentals.

At the same time, Fitch has affirmed National Scale Ratings despite the Sovereign LC IDR was downgraded to 'B-'. The National Scale ratings reflect the relativities risk between different issuers within the local market (Argentina) and Fitch believes that the downgrade the sovereign ratings in the global scale did not affect the relative capacity of repayment of the local and regional governments in Argentina. However the Outlook on National long-term ratings is Negative as well as the LC sovereign rating.

With this rating action the Rating Watch Negative in place since Nov. 08, 2012 foreign currency IDR and the long-term foreign currency and national long-term ratings on debt securities issued internationally and payable exclusively in foreign currency of several Argentine financial institutions was resolved.

Fitch rates the following:

City of Buenos Aires
--Long-term foreign and local currency ratings downgraded to
'B-' from 'B';
--Short-term rating affirmed at 'B';
--National Long and short term rating affirmed at 'AA(arg)'/ 'A1+(arg)';
--Euro Medium-Term Note Programme (EMTN) up to USD1400 million downgraded to 'B-' from 'B' and affirmed National Long-term rating at 'AA(arg)';
--Series 7 for USD 50 million downgraded Long-term rating to
'B-' from 'B' and affirmed National Long-term rating at 'AA(arg)'.
--Series 8 for USD 475 million downgraded Long-term rating to 'B-' from 'B' and affirmed National Long-term rating at 'AA(arg)';
--Series 9 for USD 85 million affirmed short-term rating at 'B'/A1+(arg).
--Series 10 for USD 415 million downgraded Long-term rating to 'B-' from 'B' and affirmed National Long-term rating at 'AA(arg)';
--Bonds Class 1 for USD 100 million issued under Financing in Local Market Programme affirmed National Long-term rating at 'AA(arg)'.
--Programme of Short-Term Treasury Bills up to ARP 950 million affirmed Short-term rating at 'B'/'A1+(arg)'.

The Outlook on the Long-term ratings is Negative.

Province of Salta
--Long-term foreign and local currency ratings downgraded to
'B-' from 'B';
--National Long-term rating affirmed at 'AA-(arg)';
--Secured Note (Provincial Law 7,691) for USD 185 million downgraded Long-term rating to 'B-' from 'B' and affirmed National Long-term rating at 'AA-(arg)';

The Outlook on the Long-term ratings is Negative.

Municipality of La Plata
--Long-term foreign and local currency ratings downgraded to
'B-' from 'B';
--National Long-term rating affirmed at 'AA-(arg)';

The Outlook on the Long-term ratings is Negative.

Province of San Juan
--Secured Note for USD 60.8 million affirmed National Long-term rating at 'AA(arg)'.

The Outlook is Negative.

Additional information is available at www.fitchratings.com. The ratings above were solicited by, or on behalf of, the issuer, and therefore, Fitch has been compensated for the provision of the ratings.

Applicable Criteria and Related Research:
--'Tax-Supported Rating Criteria' (Aug. 14, 2012);
--'International Local and Regional Governments Rating Criteria Outside the United States' (Aug. 17, 2012);
--'Rating Subnationals Above the Sovereign - Outside US' (May. 02, 2012).

Applicable Criteria and Related Research:
Tax-Supported Rating Criteria
http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=686015
International Local and Regional Governments Rating Criteria - Outside the United States
http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=684304
Rating Subnationals Above the Sovereign -- Outside US
http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=675029

ALL FITCH CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS AND DISCLAIMERS. PLEASE READ THESE LIMITATIONS AND DISCLAIMERS BY FOLLOWING THIS LINK: HTTP://FITCHRATINGS.COM/UNDERSTANDINGCREDITRATINGS. IN ADDITION, RATING DEFINITIONS AND THE TERMS OF USE OF SUCH RATINGS ARE AVAILABLE ON THE AGENCY'S PUBLIC WEBSITE WWW.FITCHRATINGS.COM. PUBLISHED RATINGS, CRITERIA AND METHODOLOGIES ARE AVAILABLE FROM THIS SITE AT ALL TIMES. FITCH'S CODE OF CONDUCT, CONFIDENTIALITY, CONFLICTS OF INTEREST, AFFILIATE FIREWALL, COMPLIANCE AND OTHER RELEVANT POLICIES AND PROCEDURES ARE ALSO AVAILABLE FROM THE 'CODE OF CONDUCT' SECTION OF THIS SITE.

Contacts

Fitch Ratings
Primary Analyst:
Cintia Defranceschi, +54 11 5235 8143
Director
Fitch Argentina Calificadora de Riesgo S.A.
Sarmiento 663 - 7 Piso - C1041AAM - Buenos Aires.
or
Secondary Analyst:
Humberto Panti, +52 81 8399 9100
Senior Director
or
Committee Chairperson:
Peter Shaw, +1 212 908 0553
Managing Director
or
Media Relations:
Elizabeth Fogerty, +1 212 908 0526
elizabeth.fogerty@fitchratings.com

Sharing

Contacts

Fitch Ratings
Primary Analyst:
Cintia Defranceschi, +54 11 5235 8143
Director
Fitch Argentina Calificadora de Riesgo S.A.
Sarmiento 663 - 7 Piso - C1041AAM - Buenos Aires.
or
Secondary Analyst:
Humberto Panti, +52 81 8399 9100
Senior Director
or
Committee Chairperson:
Peter Shaw, +1 212 908 0553
Managing Director
or
Media Relations:
Elizabeth Fogerty, +1 212 908 0526
elizabeth.fogerty@fitchratings.com