Moody’s raises Uruguay’s credit rating to Ba1, one level below investment grade
Uruguay’s credit-rating outlook was raised on Thursday to positive by Moody’s Investors Service, which cited the government’s commitment to keeping its budget deficit in check.
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Moody’s raised Uruguay’s outlook from stable 13 months after lifting the rating to Ba1, or one level below investment grade.
“A steady improvement in Uruguay’s sovereign credit profile as a result of a strong and continued commitment by the government to fiscal discipline, a condition that has led to moderate deficits and declining debt metrics,” wrote Mauro Leos, a Latin America sovereign credit analyst for Moody’s Investors Service, in a report.
“Along with a better capacity to administrate adverse financial and economic conditions, the profile of the Government’s credit has improved gradually but steadily, thus getting closer to the line that the sovereign countries with the highest ratings have,” Moody’s added.
Yields on government dollar bonds due in 2022 fell 4 basis points, or 0.04 percentage point, to 3.94% and the extra yield investors demand to hold Uruguayan bonds instead of US Treasuries rose 3 basis points to 210. That’s less than some investment-grade countries including Peru, Russia, and Poland.
The Uruguayan government reduced its debt by extending average maturities and decreasing the share of foreign currency- denominated debt, according to the report.
Fellow credit rating agencies Standard& Poor’s and Fitch maintain a similar rating with Uruguay -BB+- with stable panoramas.
Moody’s lowered Uruguay’s rating to Ba2, two levels below investment grade, in 2002 because of the spillover from neighboring Argentina struggling in the aftermath of its record default.
Source: MercoPress.com
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