Argentina

Argentina's state oil company YPF has agreed to pay nearly $300 million to the creditors of one of its now-bankrupt subsidiaries after they sued the company in relation to a historical U.S. environmental case, Reuters reported. The case against Maxus Energy Corp., which YPF acquired in the 1990s, dates back to 2005, when the state of New Jersey successfully sued the subsidiary for the contamination of the Passaic River decades earlier. In 2016, Maxus Energy Corp. filed for chapter 11 protection in the U.S. Bankruptcy Court in Delaware.

Fitch Ratings on Friday cut Argentina's foreign currency rating to "C" from "CCC-" citing an "imminent" default after the country ordered public sector bodies to sell or exchange their holdings of some sovereign dollar bonds, Reuters reported. A presidential decree said on Thursday that public sector bodies would have to sell or auction five local law dollar bonds maturing between 2029 and 2041, and to swap six foreign law dollar bonds for peso debt.

Inflation of more than 100% in Argentina is erasing the advantage the country’s top companies used to have by booking revenue in US dollars, Bloomberg News reported. Investor darlings in the energy sector — natural gas and power producer Pampa Energia SA, pipeline operator TGS SA, and state-run oil driller and refiner YPF SA — are struggling with costs that are coming under pressure from rising prices, which surpassed 100% on an annual basis last month. In the past, Argentine energy companies could compensate for inflation on their balance sheets through revenues linked to the US dollar.

Argentina’s central bank is considering raising its benchmark rate Thursday for the first time since September after annual inflation surged above 100% last month, Bloomberg News reported. The monetary authority’s board will consider an increase after leaving the key Leliq rate unchanged at 75% for several months, the people said, asking not to be named discussing internal decisions. The board hasn’t decided on the size of the hike in case they opt for such move, they said.

Argentina’s annual inflation surpassed 100% last month, one of the world’s fastest rates, putting extra pressure on an economy that’s expected to fall into recession ahead of presidential elections this year, Bloomberg News reported. Consumer prices rose 102.5% in February from a year prior, the highest since late 1991 when the economy was cooling off from 3,000% hyperinflation. Prices rose 6.6% on the month, more than all estimates in a Bloomberg survey of analysts that had a 6% median forecast, according to government data published Tuesday.

Argentina will give investors the chance to exchange holdings of local debt into new bonds in a bid to ease fears of a default on the government’s $35 billion of local debt coming due in the second quarter, Bloomberg News reported. Economy Minister Sergio Massa said the government would offer investors two swap options to exchange local bonds coming due between April and June. The government is seeking to build the local bond curve to 2024 and 2025, Massa said in a broadcast video statement.

Argentine officials intend to lower a key target in the country’s $44 billion agreement with the International Monetary Fund as a severe drought weakens the economic outlook, according to an Argentine government official, Bloomberg News reported. Both sides are discussing a smaller figure for net reserve accumulation in 2023, a cornerstone of the deal seen as the only major anchor providing some stability to the South American economy. Negotiators have met in Buenos Aires and Washington in recent weeks for the fourth review of the program.

Argentina’s inflation sped up more than expected in January as price controls prove ineffective, further complicating the government’s strategy ahead of presidential elections later this year, Bloomberg News reported. Consumer prices rose 98.8% from a year earlier, more than the 98.6% median forecast from economists in a Bloomberg survey. Prices gained 6% from December, the second straight month of faster increases, according to government data published Tuesday. Higher costs of recreation, housing and communication propelled increases in January on a monthly basis.

Cut off from global credit markets, Argentina’s government is selling ever more local currency bonds, amassing a debt load that already totals 33 trillion pesos ($174 billion) and is rising almost exponentially, Bloomberg News reported. In one week, the Treasury will seek to roll over 300 billion pesos of debt, offering higher interest rates and shorter maturities to entice investors as they have in each of the previous four months.