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Moody’s gives first trustee grade to Argentina’s Banco de Valores

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Moody’s Investors Service has assigned its first trustee quality rating in Latin America. The agency gave Argentina’s Banco de Valores a grade of TQ1.ar,’ the highest such rating for an entity in that country. The rating is based on Valores’ capability in managing assets for securitizations, according to a report by the agency. Among the trustee’s strengths are “clear origination procedures, safeguards in the event of stress, and [a] proactive role in monitoring and reporting,” said Moody’s Assistant Vice President Victoria Moreno in the report. The agency introduced its methodology for trustee quality ratings two months ago. The objective of the ratings is to provide the market with a tool to evaluate trustees. Moody’s has said it plans to launch ratings in Mexico and Brazil, aside from Argentina.

Standard & Poor’s formally introduced its trustee rankings in Argentina in March when it assigned an Above Standard to Banco Patagonia. The agency had already begun ranking trustees in Mexico.

Elsewhere in Latin American ratings news, S&P upped its rating on a transaction issued by the Argentina province of Salta. The 11.5% deal due 2015 is now rated B’ from CCC-‘ previously.

An improvement in the underlying assets prompted the upgrade. The transaction was rated an investment grade BBB-‘ when it came out via Lehman Brothers in February 2001. The devaluation at the end of that year and the government’s subsequent moves to cap gas prices eroded the deal’s performance, leading to downgrades. The deal is backed by 80% of all royalty payments owed the province by about 18 private companies operating concessions in the oil and gas sectors.

Amounting to $234 million at launch, the deal has amortized down to $200 million, according to a report by S&P. Amortizations at this pace weren’t part of the initial structure, but the province has decided to take advantage of an increase in royalty payments to pay down its debt. Moody’s rates the transaction Caa2.’

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