S&P lowers four Argentina banks

Standard & Poor’s said it lowered the global scale foreign-currency ratings on Banco Hipotecario SA, Banco Patagonia SA, Banco de Galicia y Buenos Aires SA and Banco de la Provincia de Buenos Aires SA to CCC- from CCC+.

The outlook is negative.

The agency also said it placed the CCC+ global scale local-currency ratings on these banks on CreditWatch with negative implications.

The downgrades follow a similar action on the Republic of Argentina to CCC- from CCC+.

The downgrade reflects the heightened risk of default on the banks’ foreign-currency debt following a recent decision by the U.S. Supreme Court not to hear the Argentine government’s appeal against a previous decision by the U.S. Second Circuit Court of Appeals in favor of plaintiffs against the sovereign, S&P said.

The downgrades also consider the risk that the government could further tighten its exchange control regime to the extent that it impairs the private sector’s ability to service its foreign-currency debt, the agency said.

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