Credit rating agency Moody’s has elevated Buenos Aires City’s debt rating to “AAA,” marking it as the sole Argentine region to achieve this highest classification by the agency. According to the report published on Tuesday, the upgrade was based on the city’s fiscal and financial performance, as well as improvements in its maturity profile. City Finance and Public Credit Minister Gustavo Arengo stated that the credit rating upgrade was the “result of having orderly public accounts and fiscal discipline.” He added, “This allows us to achieve a solid credit reputation, an essential condition for accessing low-cost financing, thereby increasing our investment capacity.” For the city, this enables access to foreign financing with reduced interest rates. However, it is important to recognise that its bonds are also linked to Argentina’s sovereign debt rating.
For reference, the highest rating assigned to debt by Moody’s is AAA, followed by Aa, which is further divided into subcategories: Aa1, Aa2, and Aa3. This process is similarly repeated for the A, Baa, Ba, and ultimately Caa categories. Argentina’s sovereign debt holds a Caa1 rating, signifying a very high risk of default, yet it maintains a stable outlook. Moody’s report highlighted that Buenos Aires’ ratings demonstrate its “credit resilience, evidenced by its ability to navigate challenging environments in recent years.” Before President Javier Milei took office, it was noted that local and regional governments were navigating a “challenging” economic and social landscape characterised by rising inflation, dwindling international reserves, and political instability. With Milei’s arrival, it was observed that “structural changes occurred” that have influenced regional governments in various aspects. In 2025, regional governments faced “a notable deterioration in their fiscal metrics, possibly due to difficulties in the recovery of economic activity.”
In the situation concerning Buenos Aires, it was observed that this decline resulted from delays in non-automatic transfers by the national government. They noted, however, that the two have recently come to an agreement to resolve the outstanding balance from July 2025 to March 2026. “In 2026, our baseline scenario anticipates a gradual normalisation of key economic variables,” Moody’s added. Pablo Repetto indicated that the enhancement in Buenos Aires’ circumstances is associated with the recent issuance of a 10-year bond amounting to US$500 million. This enabled it to “pay off debt maturing in the very short term.” He remarked, “The maturity horizon for the [city’s] debt has become much clearer.” He also pointed out that there are historical factors contributing to BA being the region with the highest credit rating in Argentina, significantly surpassing the level of Argentina’s sovereign debt. “[They were] the sole debt issuer that maintained its standing without defaulting in 2001–2002, during a period when all of Argentina’s debt faced default,” he explained.
Repetto indicated that unless the Milei administration “does what Buenos Aires did,” he does not foresee the city’s ratings improvement having an effect on the country’s sovereign debt. He observed that the critique directed at the Milei administration is that it is not addressing debt maturities for the upcoming years. “Even if you have to pay a slightly longer-term and higher rate, you clean up the maturity profile, and that alone will improve your rating and payment perception,” he added. In 2027, Argentina is projected to encounter obligations exceeding US$8.5 billion in sovereign bonds. According to data from GMA Capital, this amount exceeds twice what is due for payment this year. Last month, Moody’s acknowledged that it does not foresee an immediate upgrade of Argentina’s sovereign debt rating. It highlighted the ongoing political risk as the country approaches next year’s presidential elections and noted that it is still waiting for a program outlining how it will fulfil its significant financial obligations for 2027.