Fitch reviews Argentine utilities

Fitch Ratings said it placed the local currency issuer default ratings and senior unsecured issuance ratings of eight Argentine utilities on rating watch negative.

The agency also affirmed the utilities' foreign currency issuer default ratings with stable outlooks.

The utilities include AES Argentina Generacion SA, Albanesi SA, Capex SA, Genneia SA, Pampa Energia SA, Rio Energy SA, UGEN SA and Uensa SA.

“The negative rating watch reflects the Argentina's electricity sector's increased reliance on government subsidies primarily due to the Argentine peso depreciation, which increases counterparty risk for the country's generation companies,” Fitch said in a news release.

“Over the past three months, the Argentine government (B/stable) has had to materially increase subsidies to cover the country's electricity market deficit by injecting funds into Compania Administradora del Mercado Mayorista Electrico (Cammesa).

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