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Fitch: Argentina Faces $9 Billion Funding Gap In 2002.



Business Editors

NEW YORK--(BUSINESS WIRE)--Aug. 9, 2001

Fitch, the international rating agency, said today in a report that Argentina, in order to avoid a sovereign bond A sovereign bond is a bond issued by a national government. Bonds issued by national governments in the country's own currency are also referred as government bonds.  default in the near term, requires strict adherence adherence /ad·her·ence/ (ad-her´ens) the act or condition of sticking to something.

immune adherence
 to the government's zero budget deficit policy, additional official financing, and a stabilization Stabilization

The action undertakes a country when it buys and sells its own currency to protect its exchange value.
Actions registered competitive traders undertake by on the NYSE to meet the exchange requirement that 75% of their traded be stabilizing, meaning that sell orders
 of the outflow of bank deposits. Fitch warns that in the absence of substantial additional official financing, the Argentine Argentine

having some relationship with the country Argentina.


Argentine tick
margaropuswinthemi.

Argentine tortoise
geochelonechilensis.
 government will have insufficient funds to meet its domestic and external obligations through the 1st quarter of next year. Fitch currently rates Argentina's sovereign bonds 'B-' with a Negative Rating Outlook.

Argentina's capacity to meet its debt obligations through the remainder of 2001 rests on domestic institutions honoring their commitment to participate in the $1.3 billion Letes (short-term treasury debt) swap announced last week as well as to purchase $2.3 billion in additional bonds. In the event of an acceleration of bank deposit flight, these financing commitments would be at risk. Deposit flight could also ultimately undermine the viability of Convertibility.

To avoid default, Argentina requires political unity behind reform and the restoration of confidence, so that interest rates could come down, economic growth could resume, and market access could be restored. To that end, the congressional elections on Oct. 14, 2001 must produce a clear consensus behind an anti-default program that would include strict adherence to the zero-deficit goal, no matter what the tax revenue outturn is. But until there are visible signs of economic recovery, doubts over the viability of the Argentine economic model, notably Convertibility, and solvency The ability of an individual to pay his or her debts as they mature in the normal and ordinary course of business, or the financial condition of owning property of sufficient value to discharge all of one's debts.


solvency n.
 will persist. Should growth and market access not be restored by early next year, the heavy amortization needs of 2002 - almost $19 billion - could compel Compel - COMpute ParallEL  Argentina to seek a rescheduling of its obligations. To stay out of the markets for most of 2002, at least $9 billion in additional official financing for debt service purposes would be required.

The Fitch Sovereign Comment, 'Argentina: Imminent Default or Margin of Maneuver maneuver /ma·neu·ver/ (mah-noo´ver) a skillful or dextrous method or procedure.

Bracht's maneuver  a method of extraction of the aftercoming head in breech presentation.
?', will be available on Fitch's web site at 'www.fitchratings.com' or by contacting Market Services at 1-800-853-4824.
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No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 2001, Gale Group. All rights reserved. Gale Group is a Thomson Corporation Company.

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Publication:Business Wire
Date:Aug 9, 2001
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