BUENOS AIRES (Reuters) - Global ratings agency S&P upgraded Argentina's long-term sovereign credit rating on Monday, pulling it out of default territory after the South American country successfully restructured over $100 billion in sovereign debt.
The agency lifted the country's rating to 'CCC+' from the previous 'SD', or selective default, citing the conclusion of "complex" foreign and local-law debt restructurings that would significantly reduce coupon payments in the next few years.
"This important step forward provides the opportunity for the government to articulate a broader plan to tackle various post-pandemic macroeconomic challenges," it said.
Argentina has over the last week restructured around $65 billion in foreign bonds and over $40 billion in foreign currency debt issued under local law, a big win for the country that has been mired in recession and default.
The grains producer now has to turn its attentions to negotiating a new deal with the International Monetary Fund to replace a failed $57 billion credit facility from 2018 and to hold talks with the Paris Club groups of lenders.
It is also facing its third straight year of recession with forecasts for a 12% contraction this year, high inflation, draining reserves and rising pressure on the peso currency.
S&P gave Argentina a "stable" outlook, though the agency said it could downgrade the country again if any "unexpected negative political developments undermine prospects for economic recovery and for some reversal of the fiscal deterioration in 2020."
"This scenario could damage fragile local investor confidence in particular and hamper access to peso-denominated debt markets," the ratings agency said.