The Risk Qualifier highlighted the order of the district’s financial accounts, but only sees an access to external financing to improve the debt profile.
The Debt Risk Qualifier Standard & Poor’s (S&P) raised the note of the Autonomous City of Buenos Aires (CABA) From “BB-” A “BB”. While from the Buenos Aires government they emphasize that this news is the product of the order in local accounts and accelerates the return to international credit markets, some economists underline that the report does not say the same.
“This new qualification is the result of a serious and responsible policy regarding the administration of liabilities, which allows us to have the lowest debt stock in the last 15 years. In that sense, the management of Jorge Macri reduced the weight of the interests of the debt on the budget, currently being 0.9% of the total, when in 2019 it reached 9.4%, “he said Gustavo ArangoMinister of Finance and Finance of CABA.
Arengo said that S&P values the city’s ability to surf the national macroeconomic instability, with surplus in its public accounts and a considerable reduction of its liabilities.
S&P was cautious about a strong return from CABA to debt markets
However, a section of the report expresses a skepticism regarding the possibility of going out for a lot of external debt in the future. “While the conditions to access global markets have improved during the last year, We believe that the city will access capital markets only to improve its debt profile. We believe that it will prioritize a more balanced currency combination (almost all the debt is currently called foreign currency) without adding pressure to the interest load, “the ratingter predicted.
The entity highlighted the structural strengths of the city, which “have helped mitigate economic volatility and the episodes of negative intervention of the central government,” but he still sees risks associated with “the fragility of the economic foundations of Argentina and global uncertainty” and a possible overestimation of GDP per capita due to exchange appreciation.
“We are talking about the best province (in financial terms), with US $ 2550 million of financial surplus and without default history. The vision of S&P of Argentina is not what they want to sell us here that we are 10 points to go to finance debt in international markets. The appreciation of weight is a problem – separate discussion whether or not – and quite high risks, “he said in his X account Santiago Battistaeconomist and executive director of the I-city Institute.
Source: Ambito
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