Upgrades broaden horizons for Uruguay
South American country’s credit rating climb is widening the field of potential investors, says public credit head Azucena Arbeleche
Moody's upgrade of Uruguay to Baa2, two
years after the country regained investment grade status, opens
the way for the country to further diversify its investor base,
the head of public credit told LatinFinance.
Moody's praised Uruguay for improving its
fiscal and debt metrics, for more stable - albeit lower -
growth levels, and for consolidating its sovereign credit
profile when it announced the one-notch upgrade last week.
"The upgrade allows us to press ahead with
efforts to reach different types of investors, to further
diversify our investor base," Azucena Arbeleche told
LatinFinance on Friday.
"This improvement in the rating for
Uruguay is a confirmation of the efforts the country has
systematically been doing, which allowed us to recover
investment grade status in April 2012," she said.
Standard and Poor's was the first agency
to raise Uruguay to investment grade. Moody's followed suit in
August 2012, and Fitch in March 2013.
"Despite the uncertainty and the risks in
capital markets, Uruguay's fundamentals have improved and that
shows in the rating and also in the prices its bonds have in
the market," Arbeleche said.
Uruguay's efforts to reduce exposure to
regional shocks and its diversification of its commodity base -
which could boost the country's resilience to external
volatility - were also cited by Moody's. Arbeleche recently
described Uruguay's push for long-term liquidity as
an expensive insurance policy, but one "worth having".
Uruguay has no concrete plans to tap the
international bond markets this year, but that the country is
always monitoring market conditions in case a window opens, she
said on Friday.
Uruguay is rated BBB- by Standard and
Poor's and Fitch. LF
Uruguay's liquidity defenses
expensive, but "worth having"
DEBT: Pick and choose