Upgrades broaden horizons for Uruguay

Upgrades broaden horizons for Uruguay


 Source: LatinFinance

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


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