Argentine sovereign bonds climbed on Thursday, outpacing peer emerging-market debt following an upgrade by S&P Global Ratings. The ratings firm raised Argentina's long-term sovereign rating to B- from CCC+, citing recent fiscal results and policy measures that enhanced the government's ability to access liquidity for debt servicing.
Across the yield curve, bonds advanced, with particularly strong gains observed in some of the most actively traded issues. Notes due in 2035, a commonly referenced liquid benchmark, rose by roughly 2.4 cents on the dollar to trade at about 78.9 cents.
S&P made the decision public on Wednesday, and assigned a stable outlook. The ratings commentary highlighted two central developments: an easing of economic vulnerabilities and a gradual improvement in external liquidity - conditions the agency said create a foundation for ongoing economic recovery.
Analysts at S&P pointed to specific policy moves under President Javier Milei's administration that have improved the government's access to voluntary financing from capital markets and official creditors. According to S&P, those changes are particularly relevant to meeting substantial foreign-currency commercial debt repayments scheduled in 2026 and 2027.
Beyond access to markets, S&P noted that fiscal restraint resulting in continued surpluses, together with the central bank's accumulation of foreign-exchange reserves, has strengthened Argentina's overall liquidity profile. Those elements were presented as key inputs supporting the upgrade.
Ratings upgrades can broaden the set of investors willing or able to hold a sovereign's debt. S&P's move follows a similar repositioning by Fitch Ratings in May, when Fitch elevated Argentina from the deeply distressed CCC category to B-. That earlier action also sparked a rally in Argentine bonds.
While S&P places Argentina six notches below investment grade, the upgrade and the stable outlook were received positively in fixed-income markets, reflected in the gains across maturities and heightened demand for liquid benchmark notes such as the 2035 issue.
Market context
- Bond gains were broad-based across the curve, with the 2035 note moving to around 78.9 cents following a roughly 2.4-cent rise.
- S&P's upgrade to B- from CCC+ was announced Wednesday, with a stable outlook.
- S&P cited fiscal improvements, better access to voluntary market funding and official lending, and increased FX reserves as supporting factors.