Standard & Poor's Argentine national credit rating scale serves issuers,
insurers, counterparties, intermediaries and investors in the Argentine financial
markets by providing both Debt Credit Ratings which apply to a specific debt
instrument, and Enterprise Credit Ratings which apply to an obligor (i.e., borrower,
guarantor, insurer, or other provider of credit enhancement). The Argentine
national credit rating scale uses Standard & Poor's global rating symbols
with the addition of an "ra" prefix to denote "Republica de Argentina"
and the scale's focus on Argentine financial markets. In contrast to Standard
& Poor's global scale, the Argentine national scale does not address sovereign
risk, and in particular the potential risk of exchange controls. In turn, the
Argentine national scale makes no rating distinctions between debt issues denominated
in U.S. dollars or Argentine pesos. As a result, the Argentine national rating
scale is not directly comparable to Standard & Poor's global scale.
Debt Credit Ratings
A Standard & Poor's Argentine national scale Debt Credit Rating is a current
opinion of the creditworthiness of an obligor to meet the financial commitments
associated to a specific debt, bond, lease, commercial paper program, certificate
of deposit, or other financial instrument ("obligation") relative
to the debt servicing and repayment capacity of other Argentine obligors with
respect to their own financial obligations. Argentine obligors include all active
borrowers, guarantors, insurers and other providers of credit enhancement domiciled
in Argentina, as well as any foreign obligor active in the Argentine financial
markets.
A Debt Credit Rating is not a recommendation to purchase, sell, or hold a specific
obligation, as it does not comment on market price or suitability for a particular
investor. Debt Credit Ratings are based on current information furnished by
the obligors or obtained by Standard & Poor's from other sources deemed
reliable. Standard & Poor's does not perform an audit in connection with
any credit rating, and may, on occasion, rely on unaudited financial information.
Debt Credit Ratings may be changed, suspended, or withdrawn as a result of changes
in, or availability of, such information, or based on other circumstances.
Standard & Poor's Argentine national scale Debt Credit Ratings are based,
in varying degrees, on the following considerations:
- Likelihood of payment-the rating assesses the obligor's capacity and willingness
to meet its financial commitments in accordance with the terms of the obligation;
- The obligation's nature and provisions; and
- Protection afforded to, and relative position of, the obligation in the
event of bankruptcy, reorganization, or other arrangement under bankruptcy
laws and other laws affecting creditors' rights.
Long-Term Debt Credit Ratings
Apply to obligations with an original maturity of one year and over.
raAAA
An obligation rated 'raAAA' has the highest rating assigned on Standard &
Poor's Argentine national scale. The obligor's capacity to meet its financial
commitments on the obligation, relative to other Argentine obligors, is EXTREMELY
STRONG.
raAA
An obligation rated 'raAA' differs from the highest rated debt only to a small
degree. The obligor's capacity to meet its financial commitments on the obligation,
relative to other Argentine obligors, is VERY STRONG.
raA
An obligation rated 'raA' is somewhat more susceptible to adverse effects of
changes in circumstances and economic conditions than higher-rated debt. Still,
the obligor's capacity to meet its financial commitments on the obligation,
relative to other Argentine obligors, is STRONG.
raBBB
An obligation rated 'raBBB' denotes ADEQUATE protection parameters relative
to other Argentine obligations. However, adverse economic conditions or changing
circumstances are more likely to lead to a weakened capacity on the part of
the obligor to meet its financial commitments on the obligation.
raBB
An obligation rated 'raBB' denotes SOMEWHAT WEAK protection parameters relative
to other Argentine obligations. The obligor's capacity to meet its financial
commitments on the obligation is somewhat weak because of major ongoing uncertainties
or exposure to adverse business, financial, or economic conditions.
raB
An obligation rated 'raB' denotes WEAK protection parameters relative to other
Argentine obligations. The obligor currently has the capacity to meet its financial
commitments on the obligation. But adverse business, financial, or economic
conditions would likely impair capacity or willingness of the obligor to meet
its financial commitments on the obligation.
raCCC
An obligation rated 'raCCC' is CURRENTLY VULNERABLE to non-payment, and is dependent
upon favorable business and financial conditions for the obligor to meet its
financial commitments on the obligation.
raCC
An obligation rated 'raCC' is CURRENTLY HIGHLY VULNERABLE to non-payment.
raC
The 'raC' rating may be used to cover a situation where a bankruptcy petition
has been filed or similar action has been taken, but payments on the obligation
are being continued.
raD
An obligation is rated 'raD' when it is in payment default, or the obligor has
filed for bankruptcy. The 'raD' rating is used when interest or principal payments
are not made on the date due, even if the applicable grace period has not expired,
unless Standard & Poor's believes that such payments will be made during
such grace period.
The ratings from 'raAA' to 'raB' may be modified by the addition of a plus
(+) or minus (-) sign to show relative strength within the rating category.
Short-Term Debt Credit Ratings
Apply to obligations with an original maturity of less than one year.
raA-1
A short-term obligation rated 'raA-1' is rated in the highest category on Standard
& Poor's Argentine domestic scale. The obligor's capacity to meet its commitments
on the obligation, relative to other Argentine obligors, is STRONG.
raA-2
A short-term obligation rated 'raA-2' is slightly more susceptible to adverse
changes in circumstances and economic conditions than obligations rated 'raA-1'.
The obligor's capacity to meet its financial commitments on the obligation,
relative to other Argentine obligors, is SATISFACTORY.
raA-3
A short-term obligation rated 'raA-3' denotes ADEQUATE protection parameters
relative to other short-term Argentine obligations. It is, however, more vulnerable
to adverse effects of changes in circumstances than obligations carrying the
higher designations.
raB
A short-term obligation rated 'raB' denotes SIGNIFICANT VULNERABILITY to adverse
business, financial, or economic conditions regarding timely payment of interest
or repayment of principal, relative to other short-term Argentine obligations.
raC
A short-term obligation rated 'raC' denotes DOUBTFUL capacity for payment.
raD
A short-term obligation rated 'raD' denotes a payment default.
Rating Outlook Definitions
A Standard & Poor's Argentine national scale Rating Outlook assesses the
potential direction of an obligor's long-term credit rating over the intermediate
to longer-term. In determining a Rating Outlook, consideration is given to any
changes in the economic and/or fundamental business conditions. An Outlook is
not necessarily a precursor of a rating change or future CreditWatch action.
Positive indicates that ratings may be raised.
Negative means ratings may be lowered.
Stable indicates that ratings are not likely to change.
Developing means ratings may be raised or lowered.
means not meaningful.
Enterprise Credit Ratings
A Standard & Poor's Argentine national scale Enterprise Credit Rating is
a current opinion of the overall creditworthiness of a debt issuer, guarantor,
insurer, or other provider of credit enhancement ("obligor") to meet
its financial obligations relative to other Argentine obligors. Such Argentine
obligors include all active borrowers, guarantors, insurers and other providers
of credit enhancement domiciled in Argentina, as well as foreign obligors active
in the Argentine financial markets. Counterparty credit ratings are a form of
Enterprise Credit Ratings.
Enterprise Credit Ratings do not apply to specific obligations, as they do
not take into account the nature of and provisions of the obligation, its standing
in bankruptcy or liquidation, statutory preferences, or the legality and enforceability
of the obligation. In addition, it does not take into account the creditworthiness
of the guarantors, insurers, or other forms of credit enhancement on the obligation.
An Enterprise Credit Rating is not a recommendation to purchase, sell, or hold
a financial obligation issued by an obligor, as it does not comment on market
price or suitability for a particular investor. Enterprise Credit Ratings are
based on current information furnished by the obligors or obtained by Standard
& Poor's from other sources deemed reliable. Standard & Poor's does
not perform an audit in connection with any credit rating, and may, on occasion,
rely on unaudited financial information. Enterprise Credit Ratings may be changed,
suspended, or withdrawn as a result of changes in, or availability of, such
information, or based on other circumstances.
Long-Term Enterprise Credit Ratings
Apply to obligors' capacity to meet financial commitments over a time horizon
of one year and over.
raAAA
An obligor rated 'raAAA' has an EXTREMELY STRONG capacity to meet its financial
commitments relative to other Argentine obligors.
raAA
An obligor rated 'raAA' differs from the highest rated obligors only to a small
degree, and has a VERY STRONG to meet its financial commitments relative to
other Argentine obligors.
raA
An obligor rated 'raA' is somewhat more susceptible to the adverse effects of
changes in circumstances and economic conditions than higher-rated obligors.
Still, the obligor has a STRONG capacity to meet its financial commitments relative
to that of other Argentine obligors.
raBBB
An obligor rated 'raBBB' has an ADEQUATE capacity to meet its financial commitments
relative to that of other Argentine obligors. However, adverse economic conditions
or changing circumstances are more likely to lead to a weakened capacity of
the obligor to meet its financial commitments.
raBB
An obligor rated 'raBB' has a SOMEWHAT WEAK capacity to meet its financial commitments
relative to that of other Argentine obligors. The obligor faces ongoing uncertainties
or exposure to adverse business, financial, or economic conditions which could
result in an inadequate capacity on the part of the obligor to meet its financial
commitments.
raB
An obligor rated 'raB' has a WEAK capacity to meet its financial commitments
relative to that of other Argentine obligors. Adverse business, financial, or
economic conditions will likely impair the obligor's capacity or willingness
to meet its financial commitments.
raCCC
An obligor rated 'raCCC' is CURRENTLY VULNERABLE, and is dependent upon favorable
business and financial conditions to meet its financial commitments.
raCC
An obligor rated 'raCC' is CURRENTLY HIGHLY VULNERABLE to defaulting on its
financial commitments.
An Enterprise Credit Rating is withdrawn upon the first occurrence of any of
the following: (1) a payment default on any financial obligation, rated or unrated,
other than a financial obligation subject to a bona fide commercial dispute;
(2) a voluntary bankruptcy filing by the issuer or similar action; or (3) in
the case of banks, upon the seizure of the bank by a regulator, or, in the case
of insurance companies, upon placement of the insurer under regulatory supervision
due to its financial condition.
The ratings from 'raAA' to 'raB' may be modified by the addition of a plus
(+) or minus (-) sign to show relative strength within the rating category.
Short-Term Enterprise Credit Ratings
Apply to obligors' capacity to meet financial commitments over a time horizon
of less than one year.
raA-1
The obligor's capacity to meet financial commitments on short-term obligations
relative to that of other Argentine obligors is STRONG.
raA-2
The obligor's capacity to meet financial obligations on short-term obligations
relative to that of other Argentine obligors is SATISFACTORY.
raA-3
The obligor's capacity to meet financial commitments on short-term obligations
relative to that of other Argentine obligors is ADEQUATE. However, the obligor
may be more vulnerable to adverse changes in business circumstances or economic
conditions than higher-rated obligors.
raB
The obligor's capacity to meet financial commitments on short-term obligations,
relative to that of other Argentine obligors is WEAK, and vulnerable to adverse
business, financial, or economic conditions.
raC
The obligor's capacity to meet commitments on short-term obligations is DOUBTFUL.
An Enterprise Credit Rating is withdrawn upon the first occurrence of any of
the following: (1) a payment default on any financial obligation, rated or unrated,
other than a financial obligation subject to a bona fide commercial dispute;
(2) a voluntary bankruptcy filing by the issuer or similar action; or (3) in
the case of banks, upon the seizure of the bank by a regulator, or, in the case
of insurance companies, upon placement of the insurer under regulatory supervision
due to its financial condition.
Rating Outlook Definitions
A Standard & Poor's Argentine national scale Rating Outlook assesses the
potential direction of an obligor's long-term credit rating over the intermediate
to longer-term. In determining a Rating Outlook, consideration is given to any
changes in the economic and/or fundamental business conditions. An Outlook is
not necessarily a precursor of a rating change or future CreditWatch action.
Positive indicates that ratings may be raised.
Negative means ratings may be lowered.
Stable indicates that ratings are not likely to change.
Developing means ratings may be raised or lowered.
N.M. means not meaningful.
Direct questions about Argentine Scale Ratings to Fernanda Cravero in Buenos
Aires (54) 11-4891-2100.
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