Upgrades broaden horizons for Uruguay
June 2, 2014
South American country’s credit rating climb is widening the field of potential investors, says public credit head Azucena Arbeleche
| ||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
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
“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
“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
liquidity defenses expensive, but "worth having"
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