Fitch Upgrades Argentine Financial Institutions to 'B' Following Sovereign Upgrade

MONTERREY, Mexico--(BUSINESS WIRE)-- Following the upgrade of Argentina's sovereign, Fitch Ratings took positive rating actions on five Argentine Financial Institutions (FIs).

The upgrade on the FIs ratings was driven by the same action on Argentina's sovereign rating. Fitch upgraded the sovereign's local currency (LC) Issuer Default Rating (IDR) and Country Ceiling to 'B' from 'CCC' on March 22, 2016 (see 'Fitch Affirms Argentina's FC IDR at 'RD'; Upgrades LC IDR to 'B'; Outlook Stable'). At the time of the sovereign's local currency upgrade, Fitch indicated the resumption of timely debt service on defaulted bonds would lead to the upgrade of the long-term foreign currency IDR, most likely to the level of the long-term local currency IDR.

Argentine FIs ratings are driven by the still volatile and adverse economic and operating environment, albeit some structural recent improvements to Argentina's policy framework could benefit FIs' performance, specifically the lower level of intervention in the financial system.

In Fitch's view, regardless of its overall reasonable financial condition, Argentine FIs' ratings are currently capped by the LC sovereign rating, due to the weak operating environment. Although the new government is taking measures in the right direction to normalize the situation with foreign creditors and reducing political and regulatory intervention into the banking system, the local environment in Argentina is still characterized by ample economic imbalances and measures are being taken gradually and, therefore, the recovery of the economy will likely take some time to materialize.

Fitch has published individual Rating Action Commentaries (RACs) for each company, which are available at 'www.fitchratings.com'. These RACs include each issuer's key rating drivers and sensitivities, as well as the list of all rating actions taken.

Fitch has taken the following rating actions:

Banco Macro S.A.:

-- Foreign and local currency long-term IDRs upgraded to 'B' from 'CCC'; Outlook Stable;

-- Foreign and local currency short-term IDRs upgraded to 'B' from 'C';

-- Viability rating upgraded to 'b' from 'ccc';

-- USD150 million senior bonds class 2 due 2017 upgraded to 'B/RR4' from 'CCC/RR4';

-- USD150 million subordinated debt due 2036 upgraded to 'CCC/RR6' from 'CC/RR6';

-- Support Rating affirmed at '5';

-- Support Rating Floor affirmed at 'NF'.

Banco Santander Rio S.A.:

-- Local currency long-term IDR upgraded to 'B' from 'CCC'; Outlook Stable;

-- Viability rating upgraded to 'b' from 'ccc';

-- Support Rating affirmed at '5';

BBVA Banco Frances S.A.:

-- Local currency long-term IDR upgraded to 'B' from 'CCC'; Outlook Stable;

-- Viability rating upgraded to 'b' from 'ccc';

-- Support Rating affirmed at '5'.

Banco Supervielle S.A.:

-- Foreign and local currency long-term IDRs upgraded to 'B' from 'CCC'; Outlook Stable;

-- Foreign and local currency short-term IDRs upgraded to 'B' from 'C';

-- Viability rating upgraded to 'b' from 'ccc';

-- Subordinated debt upgraded to 'B-/RR6' from 'CC/RR5';

-- Support affirmed at '5';

-- Support Floor affirmed at 'NF'.

Tarjeta Naranja S.A.:

-- Foreign and local currency long-term IDRs upgraded to 'B' from 'CCC'; Outlook Stable;

-- Foreign and local currency short-term IDRs upgraded to 'B' from 'C';

-- USD200 million senior unsecured bonds upgraded to 'B/RR4' from 'CCC/RR4'.

Additional information is available on www.fitchratings.com

ALL FITCH CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS AND DISCLAIMERS. PLEASE READ THESE LIMITATIONS AND DISCLAIMERS BY FOLLOWING THIS LINK: HTTP://FITCHRATINGS.COM/UNDERSTANDINGCREDITRATINGS. IN ADDITION, RATING DEFINITIONS AND THE TERMS OF USE OF SUCH RATINGS ARE AVAILABLE ON THE AGENCY'S PUBLIC WEBSITE 'WWW.FITCHRATINGS.COM'. PUBLISHED RATINGS, CRITERIA AND METHODOLOGIES ARE AVAILABLE FROM THIS SITE AT ALL TIMES. FITCH'S CODE OF CONDUCT, CONFIDENTIALITY, CONFLICTS OF INTEREST, AFFILIATE FIREWALL, COMPLIANCE AND OTHER RELEVANT POLICIES AND PROCEDURES ARE ALSO AVAILABLE FROM THE 'CODE OF CONDUCT' SECTION OF THIS SITE. FITCH MAY HAVE PROVIDED ANOTHER PERMISSIBLE SERVICE TO THE RATED ENTITY OR ITS RELATED THIRD PARTIES. DETAILS OF THIS SERVICE FOR RATINGS FOR WHICH THE LEAD ANALYST IS BASED IN AN EU-REGISTERED ENTITY CAN BE FOUND ON THE ENTITY SUMMARY PAGE FOR THIS ISSUER ON THE FITCH WEBSITE.

View source version on businesswire.com: http://www.businesswire.com/news/home/20160419006782/en/

Fitch Ratings
Veronica Chau, +52 818 399 9169
Senior Director
Fitch Mexico S.A. de C.V.
Prol. Alfonso Reyes 2612, Edificio Connexity Piso 8
Col. Del Paseo Residencial
64920 Monterrey, N.L., Mexico
or
Santiago Gallo, +562 24993320
Director
or
Alejandro Tapia, +52 818 399 9156
Director
or
Media Relations, New York
Alyssa Castelli, +1-212-908-0540
[email protected]

Source: Fitch Ratings

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