• Following the continued inability to place short-term paper with private-sector market participants, the Argentine government unilaterally extended the maturity of all short-term paper on Aug. 28. This constitutes default under our criteria, and we are lowering the local and foreign currency sovereign credit ratings to 'SD' and the short-term issue ratings to 'D'.
  • The administration is also sending legislation to Congress seeking support from the Argentine political class to engage in a re-profiling of the remaining debt, so we are lowering our long-term foreign and local currency issue ratings to 'CCC-' on heightened risk of a default under our criteria.
  • As the new terms for short-term debt have become effective already, we plan to raise the sovereign credit ratings from 'SD' on Aug. 30. We plan to raise the long-term sovereign credit ratings to 'CCC-' and the short-term sovereign credit ratings to 'C'.

Rating Action

On Aug. 29, 2019, S&P Global Ratings lowered its sovereign credit ratings on Argentina to 'SD' from a long-term rating of 'B-' and a short-term rating of 'B' (our criteria do not distinguish on short or long term when there is a default). We also took the following rating actions:

  • We lowered our short-term issue ratings to 'D' from 'B';
  • We lowered our long-term issue ratings to 'CCC-' from 'B-';
  • We lowered our transfer and convertibility assessment on Argentina to 'B-' from 'B'; and
  • We lowered our national scale rating on Argentina to 'SD' from 'raAA-'and removed it from CreditWatch with negative implications, where we placed it on Aug. 16.


Following the continued inability to place short-term paper with private-sector market participants, the Argentine government unilaterally extended the maturity of all short-term paper on Aug. 28. Under our distressed exchange criteria, and in particular for 'B-' rated entities, the extension of the maturities of the short-term debt with no compensation constitutes a default. As the new terms became effective immediately, the default has also been cured. Therefore, we plan to raise the long-term ratings to 'CCC-' and the short-term ratings to 'C' on Aug. 30, in line with our policies.

Lowering the long-term issue ratings on Argentina to 'CCC-' from 'B-' reflects heightened risk of another distressed exchange as the Macri Administration seeks approval from Congress to engineer a possible maturity extension of all long-term debt in the remainder of its current term in office. This action is in line with our 'CCC' rating criteria and distressed exchange criteria as we see the most likely scenario as an extension of maturities, which will not be compensated by the issuer. Alternatively, there are risks associated with failure to advance, and prospects for ongoing stressed market dynamics post the national elections.

We lowered our transfer and convertibility assessment to 'B-' from 'B'. The transfer and convertibility assessment remains higher than the sovereign rating because the government aims to avoid capital controls and preserve international reserves with its action on short-term debt and potential action on long-term debt.

The heightened vulnerabilities of Argentina's credit profile stem from the quickly deteriorating financial environment, the absence of confidence in the financial markets about policy initiatives under the next administration--elections are not until October--and the inability of the Treasury to roll over short-term debt with the private sector.

This has immensely stressed debt dynamics amid a depreciating exchange rate, a likely acceleration in inflation, and a deepening economic recession.

These factors have stressed capacity to pay, leading to the maturity extension of short-term debt.

The challenges confront the ability of both the current administration and the leading presidential candidate to contain market volatility and restore financial and economic stability. (Please see our latest research update on Argentina, titled "Argentina Long-Term Sovereign Ratings Lowered To 'B-' As Market Turbulence Weakens Creditworthiness; Outlook Negative," published Aug. 16, 2019.)

Key Statistics

Table 1

Argentina--Key Statistics
2012 2013 2014 2015 2016 2017 2018 2019e 2020f 2021f
Economic indicators (%)
Nominal GDP (bil. LC) 2,637.91 3,348.31 4,579.09 5,954.51 8,228.16 10,644.78 14,566.56 21,916.55 31,937.90 42,349.65
Nominal GDP (bil. $) 581.43 613.32 567.05 644.90 557.20 642.68 518.48 438.33 456.26 529.37
GDP per capita (000s $) 13.9 14.5 13.3 15.0 12.8 14.5 11.6 9.7 10.0 11.5
Real GDP growth (1.0) 2.4 (2.5) 2.7 (2.1) 2.7 (2.5) (2.3) 0.5 2.0
Real GDP per capita growth (2.1) 1.3 (3.6) 1.6 (3.1) 1.0 (3.4) (3.2) (0.4) 1.1
Real investment growth (7.1) 2.3 (6.8) 3.5 (5.8) 12.2 (5.8) (12.0) 2.0 3.5
Investment/GDP 16.5 17.3 17.3 17.1 17.7 16.2 16.2 14.2 14.0 14.0
Savings/GDP 16.1 15.2 15.6 14.3 15.0 11.3 10.8 13.4 12.4 11.4
Exports/GDP 16.2 14.6 14.4 10.7 12.5 11.2 14.4 17.2 18.2 18.5
Real exports growth (4.1) (3.5) (7.0) (2.8) 5.3 1.7 (0.0) 17.0 6.0 4.0
Unemployment rate 6.9 6.4 6.9 6.7 8.4 8.4 9.2 10.0 10.0 9.5
External indicators (%)
Current account balance/GDP (0.4) (2.1) (1.6) (2.7) (2.7) (4.9) (5.4) (0.7) (1.5) (2.6)
Current account balance/CARs (2.2) (13.8) (10.5) (23.5) (19.6) (39.5) (32.9) (3.4) (7.9) (13.7)
CARs/GDP 17.0 15.5 15.4 11.6 13.8 12.4 16.4 21.4 19.5 18.7
Trade balance/GDP 2.6 0.8 1.0 (0.1) 0.8 (0.8) (0.2) 4.0 3.2 1.7
Net FDI/GDP 2.5 1.5 0.6 1.7 0.3 1.6 2.0 1.6 2.0 1.7
Net portfolio equity inflow/GDP (0.0) 0.0 0.1 0.1 0.4 0.4 (0.2) 0.0 0.0 0.0
Gross external financing needs/CARs plus usable reserves 102.4 110.1 117.3 133.8 136.1 149.9 133.8 109.9 120.5 123.6
Narrow net external debt/CARs 88.2 104.6 116.7 154.6 153.6 192.2 213.5 205.7 216.4 199.2
Narrow net external debt/CAPs 86.4 91.9 105.6 125.2 128.4 137.8 160.7 199.0 200.5 175.3
Net external liabilities/CARs (28.7) (37.7) (37.5) (51.0) (56.2) (20.9) (45.3) (21.6) (13.7) 1.4
Net external liabilities/CAPs (28.1) (33.1) (33.9) (41.3) (46.9) (15.0) (34.1) (20.9) (12.7) 1.2
Short-term external debt by remaining maturity/CARs 45.8 44.5 46.1 59.9 53.8 72.1 77.1 75.7 88.0 79.1
Usable reserves/CAPs (months) 5.2 4.6 3.6 3.6 2.8 3.5 5.1 7.3 7.0 5.9
Usable reserves (mil. $) 41,590 29,236 27,799 21,155 32,913 48,505 59,164 55,668 55,386 53,841
Fiscal indicators (general government; %)
Balance/GDP (2.5) (2.8) (4.2) (4.6) (6.9) (6.3) (5.7) (4.0) (3.7) (3.3)
Change in net debt/GDP 6.5 4.0 9.5 18.6 14.7 14.3 39.5 33.6 14.2 10.2
Primary balance/GDP (0.5) (1.4) (2.1) (2.6) (3.6) (3.6) (2.1) (0.5) 0.7 0.4
Revenue/GDP 32.7 34.2 35.3 35.3 34.3 33.0 30.8 30.8 31.2 31.7
Expenditures/GDP 35.2 37.1 39.5 39.9 41.2 39.3 36.5 34.8 34.9 35.0
Interest/revenues 6.2 4.3 6.0 5.9 9.7 8.2 11.8 11.4 14.1 11.6
Debt/GDP 39.3 36.3 37.7 47.6 50.7 54.8 85.6 90.0 76.0 67.5
Debt/revenues 120.2 105.9 106.9 135.0 147.9 166.3 278.0 292.3 243.4 213.1
Net debt/GDP 32.5 29.7 31.2 42.6 45.5 49.4 75.6 83.8 71.8 64.3
Liquid assets/GDP 6.7 6.6 6.5 5.0 5.2 5.4 9.9 6.1 4.2 3.2
Monetary indicators (%)
CPI growth 21.0 24.5 42.1 26.4 39.1 24.6 34.3 54.0 45.0 30.0
GDP deflator growth 22.3 23.9 40.3 26.6 41.1 26.0 40.4 54.0 45.0 30.0
Exchange rate, year-end (LC/$) 4.90 6.50 8.51 13.10 15.89 18.65 37.60 63.00 75.00 85.00
Banks' claims on resident non-gov't sector growth 30.9 31.0 20.2 36.7 31.4 51.3 33.1 12.6 45.7 37.6
Banks' claims on resident non-gov't sector/GDP 14.3 14.7 12.9 13.6 12.9 15.1 14.7 11.0 11.0 11.4
Foreign currency share of claims by banks on residents N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A
Foreign currency share of residents' bank deposits 8.4 7.5 8.0 11.8 20.6 23.8 31.4 52.7 52.7 52.7
Real effective exchange rate growth (14.4) (3.7) 5.3 (21.7) 13.5 (6.5) 34.7 N/A N/A N/A
Definitions: Savings is defined as investment plus the current account surplus (deficit). Investment is defined as expenditure on capital goods, including plant, equipment, and housing, plus the change in inventories. Banks are other depository corporations other than the central bank, whose liabilities are included in the national definition of broad money. Gross external financing needs are defined as current account payments plus short-term external debt at the end of the prior year plus nonresident deposits at the end of the prior year plus long-term external debt maturing within the year. Narrow net external debt is defined as the stock of foreign and local currency public- and private-sector borrowings from nonresidents minus official reserves minus public-sector liquid assets held by nonresidents minus financial-sector loans to, deposits with, or investments in nonresident entities. A negative number indicates net external lending. N/A--Not applicable. LC--Local currency. CARs--Current account receipts. FDI--Foreign direct investment. CAPs--Current account payments. e--Estimate. f--Forecast. The data and ratios above result from S&P Global Ratings' own calculations, drawing on national as well as international sources, reflecting S&P Global Ratings' independent view on the timeliness, coverage, accuracy, credibility, and usability of available information.

Ratings Score Snapshot

Table 2

Argentina Ratings Score Snapshot
Key rating factors Score Explanation
Institutional assessment 6 Policy choices likely weaken capability and willingness to maintain sustainable public finances and balanced economic growth, and thus, debt service. Future policy responses are difficult to predict because of a highly polarized political landscape.
Debt payment culture is weak.
Economic assessment 5 Based on GDP per capita ($) as per Selected Indicators in Table 1.
Weighted average real GDP per capita trend growth over a 10-year period is -0.8%, which is well below sovereigns in the same GDP category.
External assessment 6 Based on narrow net external debt and gross external financing needs as per Selected Indicators in Table 1.
There is a risk of marked deterioration in the cost of or access to external financing.
Fiscal assessment: flexibility and performance 6 Based on the change in net general government debt (% of GDP) as per Selected Indicators in Table 1.
Fiscal assessment: debt burden 5 Based on net general government debt (% of GDP) and general government interest expenditures (% of general government revenues) as per Selected Indicators in Table 1.
Over 70% of gross government debt is denominated in foreign currency.
Monetary assessment 5 Argentina’s exchange-rate regime is a managed float.
Persistently high inflation, as per Selected Indicators in Table 1. The central bank has limited independence due to perceived political interference. Argentina has a small domestic capital market and a low level of credit to GDP.
Indicative rating b- As per Table 1 of "Sovereign Rating Methodology."
Notches of supplemental adjustments and flexibility (5) Argentina is currently in selective default.
Final rating
Foreign currency SD
Notches of uplift 0 Default risks do not apply differently to foreign- and local-currency debt
Local currency SD
S&P Global Ratings' analysis of sovereign creditworthiness rests on its assessment and scoring of five key rating factors: (i) institutional assessment; (ii) economic assessment; (iii) external assessment; (iv) the average of fiscal flexibility and performance, and debt burden; and (v) monetary assessment. Each of the factors is assessed on a continuum spanning from 1 (strongest) to 6 (weakest). S&P Global Ratings' "Sovereign Rating Methodology," published on Dec. 18, 2017, details how we derive and combine the scores and then derive the sovereign foreign currency rating. In accordance with S&P Global Ratings' sovereign ratings methodology, a change in score does not in all cases lead to a change in the rating, nor is a change in the rating necessarily predicated on changes in one or more of the scores. In determining the final rating the committee can make use of the flexibility afforded by §15 and §§126-128 of the rating methodology.

Related Criteria

Related Research

In accordance with our relevant policies and procedures, the Rating Committee was composed of analysts that are qualified to vote in the committee, with sufficient experience to convey the appropriate level of knowledge and understanding of the methodology applicable (see 'Related Criteria And Research'). At the onset of the committee, the chair confirmed that the information provided to the Rating Committee by the primary analyst had been distributed in a timely manner and was sufficient for Committee members to make an informed decision.

After the primary analyst gave opening remarks and explained the recommendation, the Committee discussed key rating factors and critical issues in accordance with the relevant criteria. Qualitative and quantitative risk factors were considered and discussed, looking at track-record and forecasts.

The committee's assessment of the key rating factors is reflected in the Ratings Score Snapshot above.

The chair ensured every voting member was given the opportunity to articulate his/her opinion. The chair or designee reviewed the draft report to ensure consistency with the Committee decision. The views and the decision of the rating committee are summarized in the above rationale and outlook. The weighting of all rating factors is described in the methodology used in this rating action (see 'Related Criteria And Research').

Ratings List

To From


Transfer & Convertibility Assessment B- B


Senior Unsecured CCC- B-
Downgraded; CreditWatch/Outlook Action
To From


Sovereign Credit Rating SD/D B-/Negative/B

Certain terms used in this report, particularly certain adjectives used to express our view on rating relevant factors, have specific meanings ascribed to them in our criteria, and should therefore be read in conjunction with such criteria. Please see Ratings Criteria at www.standardandpoors.com for further information. Complete ratings information is available to subscribers of RatingsDirect at www.capitaliq.com. All ratings affected by this rating action can be found on S&P Global Ratings' public website at www.standardandpoors.com. Use the Ratings search box located in the left column.

Primary Credit Analyst:Lisa M Schineller, PhD, New York (1) 212-438-7352;
Secondary Contacts:Joydeep Mukherji, New York (1) 212-438-7351;
Sebastian Briozzo, Buenos Aires (54) 114-891-2185;
Media Contact:Miriam Hespanhol, New York + 1 (212) 438 1406;

No content (including ratings, credit-related analyses and data, valuations, model, software or other application or output therefrom) or any part thereof (Content) may be modified, reverse engineered, reproduced or distributed in any form by any means, or stored in a database or retrieval system, without the prior written permission of Standard & Poor’s Financial Services LLC or its affiliates (collectively, S&P). The Content shall not be used for any unlawful or unauthorized purposes. S&P and any third-party providers, as well as their directors, officers, shareholders, employees or agents (collectively S&P Parties) do not guarantee the accuracy, completeness, timeliness or availability of the Content. S&P Parties are not responsible for any errors or omissions (negligent or otherwise), regardless of the cause, for the results obtained from the use of the Content, or for the security or maintenance of any data input by the user. The Content is provided on an “as is” basis. S&P PARTIES DISCLAIM ANY AND ALL EXPRESS OR IMPLIED WARRANTIES, INCLUDING, BUT NOT LIMITED TO, ANY WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR USE, FREEDOM FROM BUGS, SOFTWARE ERRORS OR DEFECTS, THAT THE CONTENT’S FUNCTIONING WILL BE UNINTERRUPTED OR THAT THE CONTENT WILL OPERATE WITH ANY SOFTWARE OR HARDWARE CONFIGURATION. In no event shall S&P Parties be liable to any party for any direct, indirect, incidental, exemplary, compensatory, punitive, special or consequential damages, costs, expenses, legal fees, or losses (including, without limitation, lost income or lost profits and opportunity costs or losses caused by negligence) in connection with any use of the Content even if advised of the possibility of such damages.

Credit-related and other analyses, including ratings, and statements in the Content are statements of opinion as of the date they are expressed and not statements of fact. S&P’s opinions, analyses and rating acknowledgment decisions (described below) are not recommendations to purchase, hold, or sell any securities or to make any investment decisions, and do not address the suitability of any security. S&P assumes no obligation to update the Content following publication in any form or format. The Content should not be relied on and is not a substitute for the skill, judgment and experience of the user, its management, employees, advisors and/or clients when making investment and other business decisions. S&P does not act as a fiduciary or an investment advisor except where registered as such. While S&P has obtained information from sources it believes to be reliable, S&P does not perform an audit and undertakes no duty of due diligence or independent verification of any information it receives. Rating-related publications may be published for a variety of reasons that are not necessarily dependent on action by rating committees, including, but not limited to, the publication of a periodic update on a credit rating and related analyses.

To the extent that regulatory authorities allow a rating agency to acknowledge in one jurisdiction a rating issued in another jurisdiction for certain regulatory purposes, S&P reserves the right to assign, withdraw or suspend such acknowledgment at any time and in its sole discretion. S&P Parties disclaim any duty whatsoever arising out of the assignment, withdrawal or suspension of an acknowledgment as well as any liability for any damage alleged to have been suffered on account thereof.

S&P keeps certain activities of its business units separate from each other in order to preserve the independence and objectivity of their respective activities. As a result, certain business units of S&P may have information that is not available to other S&P business units. S&P has established policies and procedures to maintain the confidentiality of certain non-public information received in connection with each analytical process.

S&P may receive compensation for its ratings and certain analyses, normally from issuers or underwriters of securities or from obligors. S&P reserves the right to disseminate its opinions and analyses. S&P's public ratings and analyses are made available on its Web sites, www.standardandpoors.com (free of charge), and www.ratingsdirect.com and www.globalcreditportal.com (subscription), and may be distributed through other means, including via S&P publications and third-party redistributors. Additional information about our ratings fees is available at www.standardandpoors.com/usratingsfees.

Any Passwords/user IDs issued by S&P to users are single user-dedicated and may ONLY be used by the individual to whom they have been assigned. No sharing of passwords/user IDs and no simultaneous access via the same password/user ID is permitted. To reprint, translate, or use the data or information other than as provided herein, contact S&P Global Ratings, Client Services, 55 Water Street, New York, NY 10041; (1) 212-438-7280 or by e-mail to: research_request@spglobal.com.