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A Paradox: Provincial Versus Sovereign Debt Restructuring in Argentina
Standard & Poors, March 2004
Abstract
On March 4, 2004, the Province of Mendoza paid the coupon due on its outstanding international bond-avoiding, once again, a default on this obligation. Neither Mendoza nor the Province of Salta have defaulted on their international bonds, and the autonomous City of Buenos Aires finalized the restructuring of its defaulted international bonds in March 2003 with no reduction in face value. At the same time, the Republic of Argentina seems still far from an agreement with its creditors and is proposing the most aggressive capital haircut seen in international capital markets in many years. What dynamics explain these differences? This commentary examines the approach undertaken by the most important Argentine provinces toward their international debt and relates it to that...
Companies mentioned in this report are: Argentina (Republic of) (Unsolicited Ratings),Buenos Aires (Province of),Buenos Aires (City of),Mendoza (Province of)
Standard and Poors RatingsXpress Credit Research provides in-depth coverage of international corporates, financial institutions, insurance companies, utilities, sovereigns and structured finance programs. RatingsXpress Credit Research lets users determine the credit rating of holdings and identify key factors underlying an issuer's creditworthiness, distinguishes the different risk exposures for new and existing deals, and provides an understanding of how their analysts interpret key regulatory, political and environmental events and their economic impact.
Research Type: Commentary
Criteria articles describe the thought process and methodology Standard & Poor's analysts use in determining ratings. These commentary pieces discuss both the quantitative (economic and financial) and qualitative (business analysis and caliber of management) aspects of the analysis, as well as legal issues.
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