Moody's: Buenos Aires unaffected

Moody's Investors Service said the City of Buenos Aires' ratings remain unchanged following the recent declaration of potential debt of up to 1.6 billion Argentinean pesos budgeted for this year. The current ratings include B2 global scale and Aa3.ar national scale foreign-currency ratings and B1 global scale and Aa2.ar national scale local-currency ratings.

In December, the city legislature approved the foundation of the Social Infrastructure Fund, whose aim is to finance a large portion of the public infrastructure projects that the city plans for the coming years. The city could borrow up to 1.6 billion Argentinean pesos in the form of financial loans or public bonds. In accordance with the city's 2008 budget law, the amortization period of this new debt should not be longer than seven years.

The agency said the city currently has a manageable debt burden, which, in terms of total revenues, has been decreasing over the past four years, and that its capacity to generate own-source revenue, together with the application of prudent fiscal policies on the expense side, allows it to maintain an acceptable capacity to repay its debt.

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