S&P cuts 4 Argentine provinces

Standard & Poor's said it lowered the national scale ratings on the province of Buenos Aires to raA from raAA-, province of Cordoba to raAA- from raAA, province of Mendoza to raA+ from raAA and province of Neuquen to raA+ from raAA.

The agency also said it affirmed the raAA national scale rating on the city of Buenos Aires.

S&P also said it lowered the short-term national scale rating on Neuquen to raA-1 from raA-1 and affirmed the short-term national scale rating on Buenos Aires at raA-1+.

The outlooks all remain negative.

The ratings reflect the impact of current economic slowdown and high inflation on the provinces' fiscal balances, the agency said.

The revenues of the provinces are shrinking, S&P said. At the same time, high inflation is pressuring the public-sector costs especially amid demands for higher wages, which account for more than 50% of the governments' expenses, the agency said.

As a result, S&P said it expect increasing fiscal deficits for most of the provinces in 2012.

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