S&P upgrades Banco Hipotecario

Standard & Poor' s said it upgraded its rating on the securities issued by Banco Hipotecario SA to CCC+ from CCC as a result of the debt exchange completed by the bank last January, including its €277.3 million long-term notes due 2013, $448.2 million long-term notes due 2013, and $298.7 million guaranteed notes due 2010.

At the same time, the new securities were assigned a raBBB- in the Argentine national scale rating.

The original securities that were subject to the debt exchange, although reduced to a small 3% of the bank's total liabilities, remain in default, as a result of which Banco Hipotecario's counterparty credit rating will be maintained at SD until the bank successfully implements a strategy to materially resolve the situation of this unsettled debt, S&P said.

"The upgrade reflects the significant improvement in the institution's financial profile following the completion of its debt restructuring, which allowed BH to reduce its total debt burden and to extend maturities, significantly improving the institution's overall financial profile, with key progress attained in terms of margins and solvency," said S&P credit analyst Carina Lopez.

S&P said other positive factors include the bank's achievements in cost reductions and its improving asset quality trend, as a result of which Banco Hipotecario's private loan portfolio shows the lowest nonperforming figures among major banks in Argentina.

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