×

Fitch Places FC IDRs of Argentine Financial Institutions on Rating Watch Negative

BUENOS AIRES, Argentina--(BUSINESS WIRE)-- Fitch Ratings has placed the foreign currency Issuer Default Ratings (IDR) and the long-term foreign currency and national long-term ratings on debt securities issued internationally and payable exclusively in foreign currency (largely US Dollars) of several Argentine financial institutions on Rating Watch Negative. A complete list of ratings is provided at the end of this release. These actions follow Fitch's decision to place the 'B' foreign currency IDR of Argentina on Rating Watch Negative, as a result of increased uncertainty about the government's ability to service its international securities issued under New York Law on a timely basis using the U.S. financial system. (see 'Fitch Places Argentina on Rating Watch Negative' published on Oct.r 30, 2012 at www.fitchratings.com).

On Oct. 26, the U.S. Court of Appeals for the Second Circuit in New York upheld U.S. District Judge Griesa's ruling that Argentina breached the 'Equal Treatment Provision' of the original New York-based law bonds defaulted in 2001. The provision states that the payments rank at all times 'at least equally with all other present and future unsecured and unsubordinated external indebtedness.' The remedy of the ruling orders Argentina to make payments to holdouts at the same time as or prior to its payments to holders of the 2005 and 2010 restructured debt.

Fitch notes that there is some uncertainty about the timeframe of the legal process and when or how it could affect the country's ability to pay NY law external debt. Currently, Fitch understands that the government of Argentina is not legally restrained from making payments on its performing debt under NY law without making payments to the plaintiffs. However, this could change depending on Judge Griesa's observations and the subsequent considerations by the Appeals Court on these issues. The next coupon payment for the securities is on Dec. 1, 2012.

Although this ruling should not directly impact the ability of the Argentine financial institutions to make payments on their foreign currency obligations using the U.S. financial system, it may further impact the willingness of the Argentine government to provide financial institutions with foreign exchange to make payments to their cross currency debt obligations. Other issues under foreign legislation that allow for the possibility of payments in local currency in Argentina are not affected by this committee.

Fitch expects to resolve the Rating Watch Negative status of the financial institutions listed below once the Rating Watch on the sovereign rating is resolved.

Fitch placed the foreign currency IDR of the following issuers on Rating Watch Negtive:

--Banco Macro S.A. foreign currency IDR of 'B';

--Tarjeta Naranja S.A. foreign currency IDR of 'B';

In conjunction with these rating actions, Fitch has also placed the following issue ratings on Rating Watch Negative:

Banco Macro S.A.

--USD150 million senior unsecured bonds due 2017 'B/RR4/AA+(arg)'.

--USD150 million subordinated bonds due 2036 'CCC/RR6/A+(arg)'.

Banco Supervielle S.A.

--USD50 million Subordinated notes due 2017 'B-/A+(arg)'.

Banco Hipotecario S.A.

--USD449.9 million senior unsecured notes due 2013 'AA(arg)'.

--EUR278.3 million senior unsecured notes due 2013 'AA(arg)'.

--USD250 million senior unsecured notes due 2016 'AA(arg)'.

The other ratings assigned to these issuers were not reviewed in this committee.

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:

--'Global Financial Institutions Rating Criteria' (Aug. 15, 2012).

Applicable Criteria and Related Research:

Global Financial Institutions Rating Criteria

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=686181

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.

Fitch Ratings
Primary Analyst
Santiago Gallo, +54-11-5235-8137
Director
Fitch Argentina Calificadora de Riesgo S.A.
Sarmiento 663 - piso 7 - C1041AAM
Buenos Aires, Argentina
or
Secondary Analyst
Maria Fernanda Lopez, +54-11-5235-8130
Director
or
Committee Chairperson
Franklin Santarelli
Managing Director
franklin.santarelli@fitchratings.com
or
Media Relations:
Elizabeth Fogerty, +1 212-908-0526
Email: elizabeth.fogerty@fitchratings.com

Source: Fitch Ratings