OREANDA-NEWS. For the first time since 2007, Argentine annual corporate upgrades are projected to outpace downgrades, according to a new Fitch Ratings report.

Argentina's Country Ceiling was upgraded to 'B' from 'CCC' in March 2016. Nine companies were subsequently upgraded, since the majority of their ratings are constrained by the country ceiling rating. The Fitch-rated Argentine portfolio was comprised by 11 companies as of June 30, 2016.

Approximately 73% of Fitch's Argentine corporate portfolio has been assigned a Stable Outlook, while 18% have a Negative Outlook; the remainder have no Rating Outlook assigned because Fitch does not assign Outlooks to issuers rated 'CCC' or below.

Argentine corporates have weak liquidity. The country's low cash levels compared with regional counterparts reflect the previous administration's restrictive policies and the general lack of investment opportunities. Short-term debt balances are also high in proportion to total debt.

"The Fitch-rated Argentine portfolio issued USD3.2 billion in bonds as of June 30, 2016. Fitch expects issuances to continue, as corporates are looking to replace expensive, local debt with cheaper, longer-term U. S. dollar-denominated debt," said Cristina Madero, Associate Director.

The proportion of U. S. dollar-denominated debt is increasing as companies are refinancing local debt with international issuances. For some oil and gas companies almost 100% of debt is denominated in U. S. dollars.