The credit rating agency Moody’s Investors Service upgraded Uruguay’s sovereign bond rating to «BAA2» with a stable outlook, with which our country achieved the highest credit rating in its history.
Uruguay’s sovereign credit profile was shifted upwards on the scale of the Moody’s Investors Services credit rating agency to «BAA2» assigning a stable outlook.
The Minister of Economy and Finance, Mario Bergara, stressed that the decision was based on «sustained economic growth, the high level of investment and the diversification of exports».
This is the first time that one of the world’s three most recognized credit rating agencies raises Uruguay’s bond rating one notch above the lowest investment grade level.
With the “BAA2” grade, Uruguay consolidated “the credit upgrade achieved in recent years, especially after having regained the «Investment Grade» in April 2012″, stated the Secretary of State in a press release.
Moody’s report
The key drivers of Moody’s decision to upgrade government bond rating include: «consolidation of Uruguay’s government sovereign credit profile, the transition towards more stable growth levels based on a steady increase in the investment ratio and productivity gains, a decline in Uruguay’s exposure to regional shocks and an increase in its commodity diversification».
Furthermore, the agency has expressed that in the current context of uncertainty and risk in capital markets “the national economy looks less vulnerable to the adverse turn of events in Latin America or in countries that set prices for commodities or Uruguay’s main export products, such as meats, grains and forest derivatives”.
Thus, Uruguay’s economy is on the same rating level as Peru and Brazil, and above Colombia, whose credit rating is «BAA3».
Moody’s report was issued this Thursday in New York.
Correctly assigned
In this context, the former executive director of the Association of Private Banks of Uruguay and former president of the Central Bank of Uruguay, Julio De Brun, said that the rating has been «correctly assigned» as the market credited Uruguayan bonds at said level.
“In relation to its peers, in terms of size of the debt, maturity profile and accessibility to the international market, I believe Uruguay’s rating has been correctly assigned”, De Brun told to Carve radio.
He added that «if today Uruguay had fiscal surplus the grade should be much higher».
Moreover, this Thursday it was announced that Uruguay’s level of foreign direct investment continued to rise and reached 5% of the Gross Domestic Product (GDP) of 2013, which is considered as “very high for the region”, according to data from the Economic Commission for Latin America and the Caribbean (ECLAC).
With regard to the Uruguayan chapter, the ECLAC states in its report that in 2013 Uruguay received foreign direct investment for a total value of «2,796 million dollars, a figure slightly higher than the 2,687 million dollars received in 2012».
