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Argentina’s foreign currency rating was upgraded to CC from C by Fitch. Meanwhile, its local currency rating was affirmed at CCC-. The primary reasons cited include the lack of follow through with an intra-public debt swap announced in March, as well as a forecasted increase in its coupon payments over the next few years. Argentina has moved away from a potential default scenario after its authorities have yet to signal a clear intention to carry out the aforementioned debt swap, which would have constituted a default. Furthermore, Argentina is expected to make a $1bn coupon payment on its foreign currency bonds in July, with these payments forecasted to rise to $4.3bn in 2024 and $9.5bn in 2025 and 2026. However on the negative side, Fitch notes that the unorthodox policies adopted by the government to stave off a potential devaluation will entail an accumulation in imbalances and liabilities, creating numerous challenges in the future. They added that Argentina is currently not on track to securing external financing from IMF, as its federal government primary deficit rose to 3.2% of GDP in 2023 from 2.6% last year. This was much higher than the 1.9% target set by IMF
Argentina’s 5.875% 2028s are currently trading at distressed levels of 37.7 cents on the dollar, yielding 33%.