Fitch Places FC IDRs of Argentine Financial Institutions on Rating Watch
BUENOS AIRES, Argentina -- November 06, 2012
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
Fitch placed the foreign currency IDR of the following issuers on Rating Watch
--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
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
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Santiago Gallo, +54-11-5235-8137
Fitch Argentina Calificadora de Riesgo S.A.
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Buenos Aires, Argentina
Maria Fernanda Lopez, +54-11-5235-8130
Elizabeth Fogerty, +1 212-908-0526
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