Fitch: Liquidity Risk Remains High for Argentine High Yield Issuers

NEW YORK--(Business Wire)--
Access to the global capital markets will remain limited for Argentina high
yield corporate issuers as these companies will find it difficult to
differentiate themselves from sovereign risks, according to Fitch Ratings.

Cash generation continues to be dampened by both inflationary pressures and a
contraction in domestic and global demand. To cope with reduced internal cash
flow generation and limited access to external financing, Argentine corporate
issuers will continue to minimize capital expenditures and adjust dividend
policies during the current crisis. Limited reinvestment in the form of capital
expenditure will likely have long term negative consequences on the
competitiveness of the corporate sector in general.

'Liquidity and refinancing risk will become an important factor for credit
ratings over the next 12-18 months as the global recession unfolds,' said
Cecilia Minguillon, Director and head of Argentine corporate ratings. 'Upcoming
debt maturities are manageable but the potential deterioration of liquidity
levels and credit quality will factor significantly into rating decisions in
2010.'

A further impediment for Latin American corporates is the nationalization of
Argentine pension funds in late-2008. This action reduced the depth and size of
the local capital market, significantly increasing the cost of funding. Further,
the government now holds numerous board seats in many of the large corporates
and the possibility of interference in the strategic decision-making process of
these firms cannot be ruled out.

Fitch notes, however, that on the positive side, Argentine companies have sound
credit metrics and adequate financial profiles, as they had taken advantage of
favorable market conditions in 2007 to reduce leverage and extend debt
maturities to confront the ongoing economic environment.

For more information, a special report titled 'Argentine Corporate Liquidity
Risk Remains High' is available on the Fitch Ratings' web site
www.fitchratings.com.

Fitch's rating definitions and the terms of use of such ratings are available on
the agency's public site, 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 Ratings
Cecilia Minguilon, 5235 8123, Buenos Aires
Ana Paula Ares, 5235 8121, Buenos Aires
Daniel Kastholm, 312-368-2070, Chicago
or
Media Relations:
Brian Bertsch, 212-908-0549, New York
Email: brian.bertsch@fitchratings.com

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