Argentine Corporates Likely to Sit Tight Post Election
- Argentine corporates may adopt a wait-and-see approach with business strategies over the near term, even after President-elect Alberto Fernandez's widely-anticipated victory on Sunday.
- Electric utilities may be most vulnerable, given an increased possibility of Argentine pesification (paying back liabilities in pesos rather than dollars) of contract rates, but all Argentine issuers are subject to risks stemming from the country's economic crisis, monetary policy changes and uncertain regulation.
- Political uncertainty remains high due to the tight fiscal constraints the incoming government will inherit, lack of clarity on its policy orientation, and what this could mean for existing regulatory policies. Additionally, Argentine peso volatility can further stress issuers' ability to service debt.
(Source: Fitch Solutions)