Fitch Argentine Local and Regional Governments - Peer Review 2023

Public Finance
Local and Regional Governments

Argentina
Argentine Local and Regional Governments

Peer Review 2023
Special Report │ January 11, 2024 fitchratings.com 1

Public Finance
Argentina
Argentine Local and Regional Governments —

Peer Review 2023
Weakening Institutional Framework Is Pressuring Provincial Liquidity
Fitch Ratings views Argentine local and regional governments (LRGs)
Issuers Ratings as facing significant risks due to ‘Vulnerable’ Risk Profiles and ‘Weak’
Jurisdiction SCP LT FC IDR LT LC IDR Revenue Frameworks and Debt Sustainability. Most LRGs were
City of Buenos Aires b+ B– B– downgraded due to sovereign linkage.
Province of Santa Fe b– B– B– The overall economic environment is poor for LRGs, due to historically
Province of Cordoba b– CCC+ CCC+ high inflation of more than 130% in 2023, which is expected to continue
Province of Salta ccc CC CCC– to rise in 2024–2025. FX rates are expected to continue to depreciate
in our rating case horizon for 2023–2025.
Province of Chaco ccc CC CCC–
Municipality of Cordoba ccc– CC CCC– Operating balances continued to perform above average levels in
Province of Entre Rios ccc– CC CCC– 2016–2019 but on a converging downward trend. This is the result of
accelerated inflation and expenditure pressures increasing in 4Q22 and
Province of La Rioja cc CC CC
in 2023, along with a deteriorating institutional framework that is
Province of Neuquen cc CC CC negatively affecting revenue and expenditure predictability. Capacity to
Province of Chubut cc CC CC access the FX market is also becoming uncertain.
SCP – Standalone Credit Profile. LT FC IDR – Long-Term Foreign Currency Issuer Default
Rating. LT LC IDR – Long-Term Local Currency Issuer Default Rating.
‘Vulnerable’ Risk Profiles
Source: Fitch Ratings The Risk Profile for Argentine LRGs is assessed as ‘Vulnerable’, as there
is a high risk of operating cash flow not covering debt repayment.
‘Weak’ Revenue Framework and Sustainability
The subnational fiscal framework is considered ‘Weak’ due to a complex
and imbalanced federal co-participation regime stemming from a
‘CC’ rated sovereign counterparty with macroeconomic weaknesses.
Fiscal challenges cloud national/provincial agreements and could result
in impositions or modifications to agreed upon intergovernmental
revenue allocation.
Related Research
High Expenditure Structures
What Investors Want to Know: Argentina’s Economic and Rating Argentine LRGs operate in a weak macroeconomic context with
Outlook Under Milei (December 2023) high inflation, currency depreciation and high infrastructure needs. This
Latin American Local and Regional Governments Outlook 2024 imposes additional risks to entities’ elevated expenditure structures.
(November 2023) Tight Liquidity and FX Debt Risks
Interpretations of Central Bank of Argentina’s FX Restrictions for Structural fiscal and financial weaknesses and tight liquidity translate
LRGs Vary (July 2023) into low debt service coverage ratios (DSCRs). High unhedged FX
Overview of Argentina’s Subnationals Ahead of 2023 Elections: exposure and regulatory capital exchange controls also pose important
Policy Uncertainty Could Heighten Credit Risks (March 2023) risks to Debt Sustainability.
Criteria Rating Definitions
International Local and Regional Governments Rating Criteria Due to the low sovereign ratings and according to our criteria, we rely
(September 2021) on our rating definitions to position these LRG ratings.
Analysts
Natalia Etienne
+52 81 4161-7082
natalia.etienne@fitchratings.com
Diego Estrada
+52 81 4161-7079
diego.estrada@fitchratings.com

Public Finance
Argentina
Rating Actions Risk Profile: Key Risk Factors Analysis

Argentina’s Long-Term (LT) Foreign Currency (FC) Issuer Default Rating Argentine subnationals are Type B LRGs according to our criteria as the
(IDR) was downgraded to ‘C’ from ‘CCC–’ on March 24, 2023 and then entities must cover debt service from cash flows annually. Argentine
upgraded to ‘CC’ on June 13, 2023. This fluid rating action environment LRGs have a ‘Vulnerable’ Risk Profile captured in Fitch’s ‘Weaker’ Key
resulted in sovereign-driven rating actions for Argentine LRGs capped Risk Factors (KRFs) assessments. ‘Weaker’ assessments are typical of
by the sovereign rating. nations rated in the ‘B’ category or below, which is the case of Argentina.
The LT FC IDRs of the Municipality of Cordoba and the Provinces of
Salta, Chaco, Entre Rios and La Rioja were downgraded in March 2023
Revenue Framework
to ‘CC’ rather than ‘C’ per Fitch Ratings’ guidance and rating definitions. In terms of revenue, the most important components are the federal
Fitch did not deem a default as imminent’ for these LRGs. When the transfers received from the regime of fiscal resource distribution
sovereign LT FC IDR was upgraded in June 2023 no further rating between the nation and provinces (federal co-participation), followed
actions were taken on the Argentine LRGs. by local taxes. Regarding fiscal autonomy, the affordability to raise local
taxes remains limited in the context of high tax burdens and recent
La Rioja’s LT Local Currency (LC) IDR was downgraded to ‘CC’ from
social affordability losses due to high inflation.
‘CCC–’ on Sept. 26, 2023 and its Standalone Credit Profile (SCP) was
lowered to ‘cc’ signaling deterioration in budgetary performance and
2022 Provincial Revenue Breakdowna
higher debt risks.
Operating Total
The City of Buenos Aires and the Province of Santa Fe remain at ‘B–’ as (%) revenue revenue
these entities meet certain rating considerations per Fitch’s International Local taxes 34.6 ―
Local and Regional Governments Rating Criteria even when the sovereign Transfers received 59.6 ―
is rated lower. The Province of Cordoba also meets these conditions but
Fees, fines and other operating revenue 5.8 ―
its ‘CCC+’ rating signals the negative effects of asymmetric risk due to its includes hydrocarbon royalties
2021 distressed debt exchange (DDE).
Operating revenue ― 95.2
Argentine LRGs Current Context Interest revenue ― 2.5
Argentine LRGs operate in a ‘Vulnerable’ macroeconomic environment. Capital revenue ― 2.3
In general, operating balances benefited from the 2021–2022 economic a
Consolidated total for 24 jurisdictions. Preliminary data
rebound and higher inflation-driven revenue than expenditure, aiding Source: Direccion Nacional de Asuntos Provinciales
debt and liquidity metrics in the short term.
Revenue Robustness: Growth, Stability and Predictability
However, high expenditure needs remain a main risk to Debt (Risk That Revenue Shrinks)
Sustainability, as in some cases pension expenditure burdens will Argentina operates under a federal democratic, representative,
continue to grow if unaddressed. In the medium term, inflation and republican system, in which provinces have some political and
revenue deceleration, coupled with operating expenditure (opex) economic autonomy. The institutional framework for the distribution
real term recomposition, could pose additional risks. of fiscal resources between the nation and provinces is complex, with
Revenue performance, underpinned by automatic co-participation no revenue equalization mechanisms for subnational governments.
transfers and medium-term sustainability of positive provincial Law No. 23.548 (the law), enacted on Jan. 22, 1988, defined the
budgetary performance, could be challenged by real-term expenditure co-participation distribution coefficients between the nation and
recomposition. provinces, as fixed percentages.
Modifications to the revenue framework allocation imposed in YE 2023 Secondary Federal Revenue Distribution to Provinces
and current uncertainty under Milei’s new regime could also pose further (%)
risks to provincial revenue performance. Higher than expected sovereign 20
fiscal imbalances could result in expenditure responsibility transfers to 15
subsovereigns. 10
The new national administration’s regulatory modifications are still 5
uncertain regarding national-provincial macro and fiscal policy direction 0
Chubut
Rio Negro
Cordoba
Formosa
Jujuy
La Rioja
Neuquen
Santa Fe
Mendoza
Corrientes
San Luis
La Pampa
Buenos Aires
Chaco
Tucuman
Catamarca
Salta
San Juan
Entre Rios
Misiones
Santa Cruz
Santiago del Estero
in 2024, with inflation levels reaching historical highs amid recent peso
devaluation.
Although capital controls were extended to LRGs in June 2023, entities
are interpreting imposed norms in varied ways and were able to
continue servicing capital external debt payments throughout 2023.
Note: Percentages are for the total mass of funds distributed to the provinces.
As payments rise in 2024 and 2025, refinancing risks could resurge, Source: Law No. 23.548
especially in a context of liquidity compression derived from higher
Of the total mass of co-participation funds, 42.34% of national taxes
inflation pressures and further currency depreciation.
under Article 3 of the law are allocated to the national government,
We perceive budgetary performance of Argentine LRGs worsened at 54.66% is distributed to provinces according to fixed coefficients, with
YE 2023 and will further deteriorate in 2024 with operating balances an additional 2% to Buenos Aires, Chubut, Neuquen and Santa Cruz.
converging to historically lower levels than in 2020 to 2022.

Public Finance
Argentina
The remaining 1% goes to the national treasury contribution fund, An economic rebound continued in 2022 at 5.2% but now a 1.3% decline
which is allocated discretionally by the Argentine Ministry of the is expected for 2023 and a further 4.3% drop in 2024. Structurally weak
Interior. The national government distributes funds to the City of and volatile national economic performance is factored into the
Buenos Aires and Tierra de Fuego from its corresponding percentage Revenue Robustness KRF assessment. For Argentine LRGs, Fitch’s
according to Article 8 of the law. The fiscal regime defined in this law evaluation of this KRF is ‘Weaker’ across the portfolio and is only
was intended to be transitory but persists to date. ‘Midrange‘ for the City of Buenos Aires.
The continued lack of reform in the co-participation law and the need This is due to the resiliency of the City of Buenos Aires’ revenue
to resolve issues caused by numerous successive reforms to the law structure and high fiscal autonomy with volatile national economic
led to an increasingly complex system of revenue distribution between performance. The City of Buenos Aires has strong estimated GDP per
the national government and provinces. capita of USD42,064 relative to the national USD13,724 for YE 2022.
The funding system became highly centralized on the revenue side Revenue Adjustability (Ability to Increase)
and highly decentralized on the expenditure side, worsening fiscal
Fitch considers local Revenue Adjustability as ‘Low’ and challenged by
imbalances over the last few decades. Complexity and system reforms
a large and distortive tax burden. The weak macroeconomic
also led to fiscal litigation between the different tiers of government.
environment limits LRGs’ ability to increase tax rates and expand tax
Federal Law No. 27.606 returned the City of Buenos Aires’ federal bases to boost local operating revenue. Structurally high inflation
co-participation coefficient to 1.40% from 2.32% in 2020. The City of constantly erodes real-term revenue growth and affects affordability.
Buenos Aires engaged in litigation against the national government and
on Dec. 21, 2022 the Supreme Court of Justice dictated a cautionary Provincial jurisdictions have legal autonomy to set tax rates on local
measure suspending the application of Law No. 27.606 and ordering revenue that mainly consists of turnover taxes, or ingresos brutos, and
that the executive transfer automatically to the City the 2.95% defined stamps. Local taxes represented 33% of total consolidated provincial
in Article 2 of Law 23.548 instead of 1.40%. However, to date, national revenue, on average, in 2022, reflecting low fiscal autonomy and
authorities have not complied with the ruling as stipulated. reliance on federal transfers from the co-participation regime.
In Fitch’s view, the lack of compliance with the Supreme Court’s ruling Most Argentine LRGs have small and weak local economies. Buenos
sets a negative precedent in the tax distribution framework between Aires, Santa Fe and Cordoba are the most important economic and
the nation and provinces. Provinces are exposed to increasingly social centers. The capital city and surrounding province of Buenos Aires
uncertain and discretionary decisions at the executive level. There is a makes up more than 50% of national GDP, translating into higher than
weakening of the national/provincial institutional framework and a average local tax collection. The provinces with hydrocarbon activity,
lack of further fiscal advancements since the 2016 Nation/Provinces such as Chubut and Neuquen, have local revenues mainly in the sector.
agreement and posterior fiscal pacts.
Provincial Local Taxes
Argentina’s agreement with the IMF in 2018 established fewer current 2022, % total revenue
and capital transfers from the nation toward subsovereigns, including (%) 0 20 40 60 80 100
elimination of the Federal Soy Fund that financed capex. The recent City of Buenos Aires
2022IMF agreement includesdelegation of expenditure responsibilities Buenos Aires
to provinces over interjurisdiction transport and social electricity tariffs. Total
Misiones
For more information see Fitch’s commentary Argentina’s Preliminary Cordoba
IMF Deal Is Neutral for Provinces. Santa Fe
Mendoza
Co-participation transfers are an important determinant of fiscal Neuquen
performance for Argentine LRGs, as they represented, on average, Tucuman
La Pampa
around 51.4% of consolidated provincial total revenues in 2022, Chubut
whereas current and capital transfers that are of a more discretionary Rio Negro
Entre Rios
nature represented 5.3% and 2.3%, respectively, of total revenues. Salta
Non-earmarked co-participation funds are automatic transfers that Tierra del Fuego
San Luis
are from a ‘CC’ rated sovereign counterparty, which is a ‘Weak’ Santa Cruz
characteristic for the Revenue Robustness assessment. National GDP Jujuy
Chaco
dropped 2.6% in 2018, 2.0% in 2019 and 9.9% in 2020 due to the San Juan
pandemic. The economy recovered in 2021 at 10.4%. Corrientes
Catamarca
Transfers of National Origin (Deflated) Santiago del Estero
La Rioja
(%) Transfers (annual % change) Real National GDP Formosa
15
10 Source: Direccion Nacional de Asuntos Provinciales
5 Of Fitch-rated LRGs only the City of Buenos Aires has a relatively higher
0
level of revenue autonomy and a lower reliance on federal transfers,
-5
which in YE 2022 represented around 16.1% of total revenue.
-10
-15
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023P
P – Preliminary
Source: Fitch Ratings, Fitch Solutions, Direccion Nacional de Asuntos Provinciales

Public Finance
Argentina
Operating Balance 2022 Provincial Expenditure Breakdowna

% of operating revenue
Average 2016–2019 Average 2020–2022 (%) Opex Total Expenditure
(%)
Staff expenses 55.9 ―
20
15 Goods and services 11.9 ―
10 Current transfers 32.2 ―
5 Opex ― 84.2
0
Interest expenditure ― 2.4
-5
Capex ― 13.4
Municipality of
Buenos Aires
Buenos Aires
Province of
Province of
Province of
Province of
Province of
Province of
Province of
Province of
(All Provinces)
Entre Rios
Consolidated
Province of
Neuquen
Cordoba
Santa Fe
La Rioja
Chubut
Chaco
Cordoba
Salta
a
City of
Consolidated total for 24 jurisdictions; preliminary data.

Source: Direccion Nacional de Asuntos Provinciales.
Spending decentralization may continue to rise and spiking inflation adds

Note: Province of Buenos Aires considers estimates not rated by Fitch. more expenditure and fiscal pressure to subnational governments. Some
Source: Fitch Ratings, Fitch Solutions, Direccion Nacional de Asuntos Provinciales entities have fiscal prudence policies and expenditure controls.
Hydrocarbon Royalties Structurally high inflation pressures expenditures. The lagged effect
Some Argentine provinces receive royalty revenue derived from inflation tends to have on expenditures due to real term wage
hydrocarbon exploitation activities in accordance with the national recomposition compounds the weakness of expenditure predictability,
energy framework and regulations. Hydrocarbon royalties are linked or sustainability, in Fitch criteria terminology. Currency depreciation
to the U.S. dollar and payable monthly in Argentine pesos. However, the negatively affects expenditure costs, such as capex projects.
hydrocarbon market in Argentina is subject to federal government
Opex Growth 2022
interference, regulatory uncertainty and external price shocks.
2022P Interannual inflation
Hydrocarbon Royalties (%)
2022, % total revenue 100
(%) 80
40 60
40
30
20
20 0
Municipality of
Buenos Aires
Province of
Province of
Province of
Province of
Province of
Province of
Province of
Province of
Entre Rios
10
Neuquen
Cordoba
Santa Fe
La Rioja
Chubut
Chaco
Cordoba
Salta
City of
0
Neuquen Chubut Santa Tierra del Rio Mendoza Total Salta
Cruz Fuego Negro
P – Preliminary figures
Source: Direccion Nacional de Asuntos Provinciales Source: Fitch Ratings, Fitch Solutions, Direccion Nacional de Asuntos Provinciales,
Other weaknesses include the lack of a transparent framework for Banco Central de la Republica Argentina
the liquidation of hydrocarbon royalties, exposing provinces with Operating balances benefited in 2020–2021 from real term expenditure
hydrocarbon revenue to discretionary price regulations at the national containment and operating performance improved due to economic
level. Commodity-based revenue adds cyclicality and volatility to the recovery and real term revenue growth. Financial headroom was
financial performance of these entities, where hydrocarbon royalties achieved in terms of liquidity for some LRGs as a consequence of debt
compose more than 20% of total revenue in some cases. restructuring processes in 2020–2021.
The Provinces of Neuquen and Chubut were negatively affected by the After several years of opex growth below inflation levels in 2022
global oil price shock in 2020. Recently, national price regulations and historically high inflation levels are resulting in higher pressures via
currency depreciation after 2023 primary elections increased the price wage renegotiations for most LRGs, as these are taking place more
mismatch of hydrocarbon royalties to international hydrocarbon prices. often than in past years. As 2023 was an electoral year at the federal
and provincial level, this will also result in higher expenses.
Expenditure Framework
Staff expenses are an important component of the subnational opex Expenditure Adjustability (Ability to Curb)
structure, as high levels of inflation represent additional expenditure Fitch views leeway or flexibility to cut expenses for Argentine LRGs as
pressures due to lagged salary adjustments. Capex levels are perceived weak, relative to international peers, considering only an average of
as low relative to the high infrastructure needs in the country. 13.4% of consolidated provincial total expenditures corresponded to
capex in 2022. The nation and provinces have very high infrastructure
Expenditure Sustainability (Risk That Expenditures Rise)
needs, thus increasing capex does not necessarily translate into
Argentine provinces have high expenditure responsibilities, such as economic growth due to infrastructure lag, reflecting limited flexibility
healthcare, education, water, transportation and services. The fiscal to adjust capex.
regime is imbalanced in revenue/expenditure decentralization.
Compared with international peers, Argentine LRGs have a high share
Although neutral in principle, the 2022 IMF agreement will result in the
of opex/total expenditure, at around 84.2% in 2022, down from 87.1%,
federal government transferring some expenditure responsibilities to
on average, in 2020 mainly due to temporary real term expenditure
provinces by cutting current and capital transfers, and subsidies in
containment in a context of historically high inflation levels.
interjurisdiction transport and social electricity tariffs.

Public Finance
Argentina
Staff expenses represented a rigid 47.1% of total expenses, deemed Liabilities and Liquidity Robustness
high, relative to international peer,s and in the cases of Salta, Chubut and (Risk That Debt Service Increases Suddenly)
Neuquen the ratio was above 56% in 2022.
Liabilities and Liquidity Robustness, is assessed as ‘Weaker’ for all
Another aspect affecting Expenditure Sustainability for some provinces Argentine LRGs. Capital market discipline is hindered by a protracted
is funding of social security institutions, including provincial pension macroeconomic context of weak growth, high inflation and sharp
funds, adding additional pressure to subnational budgetary performance. currency depreciation in the past decade, and is currently heightened
Federal funding to mitigate provincial pension deficits is subject to annual by a ‘CC’ rated sovereign. To date market access has not been regained
budgetary allocation, which is unpredictable and discretionary. by the sovereign nor by LRGs, thus refinancing risks could resurge
Funding is subject to the formalization of annual bilateral agreements toward 2024 when external bond capital payments commence after
through the National Social Security Administration, or Administracion 2020–2021 debt relief.
Nacional de la Seguridad Social (ANSES) that determines harmonized Unhedged foreign currency debt exposure is an important structural
past-year deficits in order to secure funding. Since 2019, no bilateral weakness considered in this KRF assessment. However, limited local
agreements were signed and in 2023 high levels of inflation are capital markets led LRGs to issue debt in foreign currency, causing
significantly eroding national funding of provincial pension deficits. structural reliance on external markets for financing. Local currency
The 13 provinces that did not transfer pensions to ANSES are Buenos options generally carry higher financial costs and shorter terms due to
Aires, Cordoba, Santa Fe, Neuquen, Entre Rios, Chaco, Corrientes, the high-inflation environment. Amid sharp currency depreciation,
Chubut, Formosa, La Pampa, Misiones, Santa Cruz and Tierra del Fuego. debt and liquidity management becomes challenging.
On the regulation front, national rules on debt and liquidity have a
Provincial Debt/National GDP
weaker track record of enforcement compared with regional peers,
(%)
such as Brazil, Colombia or Mexico. Compliance with the Federal Fiscal
10
Responsibility Law that limits debt service to less than 15% of net
8 current revenue carries no stringent consequences if breached, and
6
adherence to the law is optional.
Other considerations are off-balance-sheet risks, such as the presence
4
of large pension deficits as an additional factor that exacerbates LRGs’
2 liquidity needs, as some provinces did not transfer pensions to ANSES.
0
Other possible off-balance-sheet risks could surge from support
2016 2017 2018 2019 2020 2021 2022 guarantees to government-related entities.
Source: Direccion Nacional de Asuntos Provinciales 2020 Defaults and DDEs
Federal Fiscal Responsibility Law Several LRGs faced the dilemma of complying with debt payments in
Policy efforts to achieve fiscal equilibrium by expenditure controls and 2020 as sovereign debt distress and a negative macroeconomic
deficit reduction were historically challenged by inflationary pressures, environment, exacerbated by the coronavirus pandemic, led to a lack of
economic downturns and political opposition. Argentina’s Federal external market access. Of Fitch-rated LRGs, eight of 10 defaulted and
Fiscal Responsibility Law No. 25.917 was enacted on Aug. 24, 2004 to underwent a DDE. Argentina concluded its foreign law restructuring
establish a set of fiscal rules and guidelines to achieve sustainable debt process in early September 2020. Afterwards, LRGs rated by Fitch
borrowing and balance entities’ budgetary performance. emerged from DDEs processes at YE 2020 and in 2021.
Governments can choose whether or not to adhere to Law No. 25.917. LRGs underwent events of default due to missed coupon payments or
However, to date, despite policy implementation, structural financial DDEs. In the short term, debt restructurings provided some external
imbalances remain for most provincial governments, given the debt service relief, still 2024–2025 refinancing risks remain.
challenging macroeconomic operating environment. Of Fitch-rated issuers, the City of Buenos Aires and the Province of
Debt and Liabilities Framework Santa Fe did not default nor restructure debts. Bond capital repayments
will rise again in 2024–2025 and refinancing risk could re-surge in a
According to the Ministry of Finance, provincial debt accounted for context of uncertain macro and fiscal policy at the national level.
5.2% of Argentina’s GDP, as of December 2022. Bonds, which are
mainly foreign currency denominated, made up around 73.8% of total External Debt Payments (Bonds)
provincial debt, as of 2022, and multilateral funding around 14.5%. Local and regional governments
Capital Interest
Since the external market shutdown in 2018, LRGs face scarce (USD mil.)
financing sources to cover fiscal imbalances and debt services, in an 3,000
environment of structurally weak liquidity. Liquidity improved in 2,500
2021–2022 due to debt relief and an economic rebound. In the short to 2,000
medium term, high inflation pressures and initiation of post-DDE bond 1,500
capital payments will again exert pressure on current cash balances. 1,000
500
Multilateral funding and debt with the federal government via specific
0
national trust funds are available to provinces. Some LRGs tapped local
2023
2024
2025
2026
2027
2028
2029
2030
2031
2032
2033
2034
2035
2036
2037
capital markets in previous years. However, 2023 market volatility and

high local market interest rates, coupled with reduced liquidity needs, Source: Fitch Ratings, Fitch Solutions, Mercado Abierto Electronico
due to improvements, resulted in few local issuances in 2022 and 2023.

Public Finance
Argentina
Capital Controls Imposed on LRGs in 2023

Recently imposed FX restrictions by the Central Bank of Argentina, We see a 12-month scenario for SCP positioning. Debt Sustainability
or Banco Central de la Republica Argentina (BCRA), that incorporate metrics are analyzed to evaluate each issuer’s debt repayment capacity
capital controls on LRGs after the BCRA’s “A” 7782 communication on and liquidity. As per Fitch’s LRG criteria, entities with a base case
June 1, 2023 are being interpreted by governments and economic financial profile indicating an SCP of ‘b’ or below, the base case analysis
actors in varied ways. Fitch will monitor developments on a case by is sufficient to evaluate the risk of default.
case basis. See our commentary: Interpretations of Central Bank of For Argentine LRGs our base case is deemed as the rating case.
Argentina’s FX Restrictions for LRGs Vary. Rating case assumptions may vary case by case and are updated
The interpretations of BCRA’s guidance are varied but at the moment regularly due to the volatile environment in which Argentine LRGs
external debt servicing was not affected and provinces are accessing operate. Fitch’s rating case for 2023–2025 considers a relevant opex
the FX market. Capital controls further signal a deterioration of an and FX stress given the current macroeconomic vulnerabilities.
already ‘Vulnerable’ institutional framework and of transfer and Our recent rating case scenario included the following key assumptions
convertibility risks. This is captured in our analysis through the low for 2023 annual reviews:
sovereign ratings of Argentina and its Country Ceiling of ‘B–’.
Liabilities and Liquidity Flexibility Fitch’s Rating Case Key Assumptionsa
(Ability to Use Liquidity or Access New Financing) 2023 2024 2025
Fitch sees the Argentine national framework in place, regarding liquidity Operating revenue Growth below inflation
support and funding available to subnationals, as ‘Weaker’, as there are Opex Assumes real-term recomposition case by case
no formal emergency liquidity support mechanisms established. Net capital balance Based on historical performance and
The national government can support LRGs in liquidity distress on a capex/total expenditure ratio
case by case basis in the form of a friendly creditor, such as the Argentine pesos per
availability of some programs and loans to provinces from federal trust U.S. dollar (average)b 251–344 449–899 701–1,964
funds, and also through co-participation advancements. Consumer prices
(annual average % change)b 96–125 82–158 56–122
However, the current macroeconomic environment constrains the
predictability, size and timing of this support. At the issuer level, LRG a b
Incorporates sovereign macro assumptions. Variation is due to the date of annual review
criteria evaluates the level of unrestricted cash and committed dates as assumptions are updated frequently (March–November 2023).
Source: Fitch Ratings, Fitch Solutions
liquidity, which take various forms. Argentine LRGs rely mainly on their
own unrestricted cash funds for liquidity. Other Rating Considerations
Fitch observed a short-term improvement in 2020–2021 of liquidity If certain rating considerations are met, even when a sovereign rating is
metrics due to debt restructuring processes coupled with real term below ‘B–’, an LRG can be rated above, but capped at the Country
expenditure containment, and in 2021–2022 due to an economic Ceiling, if it maintains a fairly adequate budget, shows no significant
rebound. In the medium term the ‘Vulnerable’ environment and higher external refinancing needs and has enough liquidity to avoid a default.
inflation could erode liquidity reserves and heighten refinancing risks. This signals an LRG could still remain current on its debt obligations
An available tool for LRGs to cover seasonal cash imbalances are short- even in the context of a sovereign default, or quasi-default situation.
term Treasury bill issuances, which are issued in Argentine pesos in the The City of Buenos Aires and Province of Santa Fe were affirmed at ‘B–’
local market and accrue variable market interest rates. This instrument with Stable Outlooks as they continue to meet Fitch’s requirements.
became riskier during the 2018–2019 interest rate hikes in Argentina The Province of Cordoba meets the three conditions but the province’s
due to rising financial costs and refinancing risk. recent DDE track record weighs negatively on Fitch’s view of its credit
strengths.
Due to historically, high inflation and high local market interest rates,
issuances fell in 2023 in the local market. Recent liquidity improvements Additional Considerations for SCP Below ‘b–’
provided financial cushion for most LRGs during 2023. For SCPs that are positioned below ‘b–’, Fitch considers a 12-month
The current context of national capital controls is another weakness horizon for evaluating debt repayment capacity coupled with the
captured in the Liquidity Flexibility Assessment, as the imposition of qualitative assessment of default risks.
FX regulations could affect LRGs’ ability to fulfill financial obligations. SCPs at ‘ccc’: Still considered performing and indicate exposure to
refinancing risk, high liquidity risk and weak DSCRs. Very low margin for
Lower Speculative-Grade Leads to Rating safety, default is a real possibility. (+ to – differentiate qualitative and
Definitions quantitative factors).
When the IDR for an issuer is in the ‘B’ category or below, such an issuer SCPs at ‘cc’: Considers a high level of credit risk and reflects that a
will have little capacity to navigate adverse economic conditions and default or DDE is likely in the next 12 months. (Due to a DSCR<1x,
metrics are less useful for scaling ratings from ‘B’ to ‘C’. or negative operating balance).
Due to the low ratings of the sovereign and according to criteria, Fitch SCPs at ‘c’: Reflects when a default or default-like process has begun.
relies on the rating definitions for guidance on positioning these LRG The issuer is in a formal payment standstill period, or payment capacity
ratings, reflecting a qualitative assessment of the level of default risk. is irrevocably impaired.
Fitch is only projecting a rating case for YE 2023–YE 2025 due to the
sovereign rating and curtailment of the external market, amid a volatile
macroeconomic and regulatory context.

Public Finance
Argentina
Environmental, Social and Governance (ESG) The Provinces of Chubut and Neuquen have an ESG.RS of ‘4’ for
‘Biodiversity and Natural Resource Management’ due to significant
Considerations economic and financial concentration in the hydrocarbon sector, which
The City of Buenos Aires and Province of Santa Fe have ESG Relevance negatively influences the credit profile and is relevant to the rating in
Scores (ESG.RS) at ‘3’ which implies ESG issues are credit-neutral or conjunction with other factors.
have only a minimal credit impact on these entities. The Province of Chubut has an ESG.RS of ‘4’ for ‘Labor Relations &
Eight-rated Argentine LRGs have an ESG.RS of ‘4’ for ‘Rule of Law, Practices’ as a result of its historically volatile operating balances, which
Institutional & Regulatory Quality, Control of Corruption’ reflecting the created continuous delays in funding employee salaries.
negative effects of a weak regulatory framework and the unpredictable Chubut is now current on its payroll and paid all accumulated salaries
national policy shifts on LRGs, which has a negative impact on the credit arrears in 2021. Risk remains that weaker, future operating performance
profile, and is relevant to the rating in conjunction with other factors. could result in salary delays, negatively affecting the credit profile and is
Five-rated Argentine LRGs had an ESG.RS revised to ‘4’ from ‘5’ for relevant to the rating in conjunction with other factors.
‘Creditor Rights’ after concluding DDEs improved the LRGs willingness The highest level of ESG credit relevance is a score of ‘3’, unless
to service and repay debt obligations. DDEs from 2020–2021 continue otherwise disclosed in this section. A score of ‘3’ means ESG issues are
to weigh on credit profiles in conjunction with other factors. credit-neutral or have only a minimal credit impact on the entity, either
The Provinces of La Rioja and Cordoba have an ESG.RS of ‘5’. For La Rioja due to the nature or way in which they are being managed by the entity.
this score is pinned by protracted debt default and lengthy negotiations Fitch’s ESG.RS are not inputs in the rating process; they are an
(full year) to conclude its DDE. For Cordoba, the ESG.RS of ‘5’ speaks for observation on the relevance and materiality of ESG factors in the
a recent DDE limiting its current rating assignment from a higher rating rating decision. For more information on Fitch’s ESG.RS, visit
level. Therefore, for both, creditor rights remain a key rating driver. https://www.fitchratings.com/topics/esg/products#esg-relevance-scores.
Risk Profile and Key Risk Factors

Revenue Expenditure Liabilities and Liquidity
Issuer Robustness Adjustability Sustainability Adjustability Robustness Flexibility Risk Profile
City of Buenos Aires Midrange Weaker Weaker Weaker Weaker Weaker Vulnerable
Province of Neuquen Weaker Weaker Weaker Weaker Weaker Weaker Vulnerable
Province of Salta Weaker Weaker Weaker Weaker Weaker Weaker Vulnerable
Province of Entre Rios Weaker Weaker Weaker Weaker Weaker Weaker Vulnerable
Province of Cordoba Weaker Weaker Weaker Weaker Weaker Weaker Vulnerable
Province of Santa Fe Weaker Weaker Weaker Weaker Weaker Weaker Vulnerable
Province of Chubut Weaker Weaker Weaker Weaker Weaker Weaker Vulnerable
Province of Chaco Weaker Weaker Weaker Weaker Weaker Weaker Vulnerable
Province of La Rioja Weaker Weaker Weaker Weaker Weaker Weaker Vulnerable
Municipality of Cordoba Weaker Weaker Weaker Weaker Weaker Weaker Vulnerable
Note: A ‘Vulnerable’ Risk Profile indicates a majority of Weaker Key Risk Factor attributes, in countries rated in the ‘B’ category or below.
Summary of Debt Sustainability Assessments

Secondary metrics
Primary metric Fiscal debt
payback ratio, Actual DSCR, burden (%), Liquidity coverage ratio (x)
Issuer SCP DS Score 2024 rc (x) 2024 rc (x) 2024 rc YE 2022 2024 rc
City of Buenos Aires b+ aa 0.8 5.9 12.8 3.1 7.0
Province of Santa Fe b– aa 2.0 3.9 9.8 4.2 5.0
Province of Cordoba b– aa 1.2 1.8 17.7 6.9 2.3
Province of Salta ccc aa 1.8 1.0 10.4 1.3 1.6
Province of Chaco ccc aa 3.4 2.7 33.0 YE 2021: 5.2 0.1
Province of Entre Rios ccc– aa 1.8 1.2 13.2 4.9 2.4
Municipality of Cordoba ccc– aa 2.8 1.3 32.5 7.0 0.8
Province of La Rioja cc a 6.2 0.7 37.4 6.5 0.6
Province of Neuquen cc b 2025 rc: 28.1 0.15 28.9 1.6 0.3
Province of Chubut cc bb 2025 rc: 14.3 0.2 42.1 0.8 0.1
SCP – Standalone Credit Profile. DS – Debt sustainability. Rc – Fitch’s rating case. DSCR – Debt service coverage ratio.
Source: Fitch Ratings

Public Finance
Argentina
Individual Issuer Summaries/Reports

Individual issuer summaries, including Risk Profile assessment and Debt Sustainability analysis estimates from the 2023 review cycle are presented
in this section.
Jurisdictions Page
City of Buenos Aires 10
Province of Neuquen 11
Province of Salta 12
Province of Entre Rios 13
Province of Cordoba 14
Province of Santa Fe 15
Province of Chubut 16
Province of Chaco 17
Province of La Rioja 18
Municipality of Cordoba 19
Map ofArgentine
Map of Argentine Provinces
Provinces
Jujuy
Tucuman
Salta Formosa
Chaco s
Cat ne
ama Santiago isio
rca del Estero M
Corrientes
La Rioja Santa
Fe
San Juan
Cordoba Entre
Rios City of
San
Luis Buenos Aires
Mendoza
Buenos Aires
La Pampa
Neuquen
Rio Negro
Chubut
Santa Cruz
Tierra del Fuego
Source: Fitch Ratings

Public Finance
Argentina
City of Buenos Aires Issuer Data

Ratings Affirmed: Fitch affirmed the City of Buenos Aires’ (CBA)
Location
ratings at ‘B–’ with a Stable Outlook. CBA continues to meet Fitch’s
criteria requirements to be rated at ‘B–’, above the sovereign’s LT FC
IDR. CBA has a SCP of ‘b+’ derived from a ‘Vulnerable’ Risk Profile and
a Debt Score of ‘aa’. No asymmetric risks are considered.
Vulnerable Risk Profile: CBA’s economic importance translates into
high tax revenue/total revenue of 76.9% at YE 2022. CBA has lower Ad hoc support No
reliance on federal transfers, which at YE 2022 represented around
Asymmetric risk No
16.1% of total revenue. The share of federal revenues declines due to
Federal Law No. 27606 that returned CBA’s federal co-participation Long-Term FC IDR/Outlook B–
coefficient share to 1.4%. Long-Term LC IDR/Outlook B–
The city’s personnel expenses remained controlled at 43.6%, close to Population (mil., 2022) 3.08
the historical average of 43.7% for 2018–2022. CBA’s capex/ Population growth (%, CAGR 2001–2010) 0.4
total expenditure was 15.1% in 2022, which reflects capacity for some Local GDP per capita (USD, 2022E) 42,064
budgetary adjustments to accommodate other opex pressures. Local GDP (2005 % of country GDP) 20.5
Direct debt totaled ARS363.8 billion at YE 2022 increasing around Unemployment rate (%, 2Q23) 3.9
33.9%, relative to 2021, and further grew to ARS489.3 billion in FC – Foreign currency. LC – Local currency. IDR – Issuer Default Rating. E – Estimates.
June 2023 due to currency depreciation. CBA has no significant Source: Fitch Ratings, Fitch Solutions, Comision Economica para America Latina
U.S. dollar capital maturities from external bond payments until y el Caribe, Instituto Nacional de Estadistica y Censos
June 1, 2025 for USD296.6 million.
Debt Sustainability, ‘aa’ Category: The score reflects an ‘aaa’ primary
payback ratio of 0.7x for 2025 under Fitch’s rating case. We included an Key Metrics
override from the ‘aa’ actual debt service coverage ratio (ADSCR) of (ARS mil.) 2021 2022 2024rc
2.7x in 2025, as in that year the city will have external debt capital Operating revenue 675,286.4 1,283,822.3 6,769,185.4
payments from its Series 12 bond. The projected ADSCR remains
Opex 563,655.9 971,054.4 5,623,893.6
aligned with the city’s 2018–2022 average of 1.7x.
Operating balance 111,630.5 312,767.9 1,145,291.8
Rating Sensitivities: A downgrade of Argentina’s Country Ceiling Net adjusted debta 229,401.7 227,825.7 864,863.0
would negatively affect CBA’s ratings. The SCP could be lowered within
Payback ratio (x) 2.1 0.7 0.8
the ‘b’ category or lower if CBA’s operating balance deteriorates
triggering an ADSCR below 1.0x in Fitch’s rating case and if the payback ADSCR (x) 1.2 2.7 5.9
ratio is above 9x. An upgrade on Argentina’s IDRs above ‘B–’ could Fiscal debt burden (%) 33.9 17.7 12.7
positively benefit CBA’s ratings if the payback ratio remains below 5x. a
Adjusted debt – unrestricted cash. Rc – Fitch rating case scenario.
ADSCR – Actual debt service coverage ratio.
Issuer Profile: CBA is Argentina’s federal capital and the country’s most Source: Fitch Ratings, Fitch Solutions
important social and economic center. The city represents about 20.6%
of the country’s GDP, and the surrounding province generates an Rating Report: City of Buenos Aires (October 2023)
additional 31.7% of the national GDP. These entities together
represent more than half of the country’s economic activity.
External Bond Debt Payments Actual Debt Service Coverage Ratio Payback Ratio
2023–2030 — Fitch's Rating Case Scenario 2018–2025rc
aaa aa
Historical bbb bb
(USD mil.) (x) Rating case (x) b Historical
350 7 40 Rating case
300 6
30
250 5
200 4 20
150 3
100 2 10
50 1
0 0 0
2022
2018
2019
2020
2021
2023rc
2024rc
2025rc
2023
2024
2025
2026
2027
2028
2029
2030
2018
2019
2020
2021
2022
2023rc
2024rc
2025rc
Source: Fitch Ratings, Fitch Solutions, Mercado Rc –Rating case Rc –Rating case
Abierto Electronico, City of Buenos Aires Source: Fitch Ratings, Fitch Solutions, City of Buenos Aires Source: Fitch Ratings, Fitch Solutions, City of Buenos Aires

Public Finance
Argentina
Province of Neuquen Issuer Data

Ratings Affirmed: Fitch affirmed the Province of Neuquen’s LT FC and Location
LC IDRs at ‘CC’. We maintained Neuquen’s SCP at ‘cc’. Fitch relied on
its rating definitions to position the province’s ratings and SCP.
Vulnerable Risk Profile: Neuquen has a lower reliance on federal
transfers from the co-participation regime, with current transfers at
around 24.6% of total revenue at YE 2022. Hydrocarbon royalties
represented 34.8% of Neuquen’s YE 2022 revenue. Commodity-based
revenue adds cyclicality and volatility to the finances of Neuquen.
The ratio of staff expenses in the opex structure is high at 66.4% with Ad hoc support No
opex totaling around 86.4% of total expenditure. On average, only a Asymmetric risk No
low (2018–2022) 10.1% of total expenditure corresponds to capex.
Neuquen is among the provinces that did not transfer their pension to Long-Term FC IDR/Outlook CC
the nation. Long-Term LC IDR/Outlook CC
Population (mil., 2022) 0.7
Direct debt totaled ARS209.8 billion at YE 2022, and was denominated
in foreign currency, and total debt grew 58.8% relative to 2021 mainly Population growth (%, CAGR 2001–2010) 1.7
due to currency depreciation. Debt totaled ARS305.1 billion in Local GDP per capita (USD, 2022E) 24,151
June 2023 of which 87.65% was foreign currency denominated. Local GDP (2005 % of country GDP) 2.6
Debt Sustainability, ‘b’ Category: In Fitch’s rating case (2023–2025), Unemployment rate (%, 2Q23) 5.6
the primary metric of payback will be between 11.2x and 28.1x with a FC – Foreign currency. LC – Local currency. IDR – Issuer Default Rating. E – Estimates.
score of ‘b’, reflecting the province’s weak and volatile operating Source: Fitch Ratings, Fitch Solutions, Comision Economica para America Latina
balances and growing expenditure pressures in a context of high y el Caribe, Instituto Nacional de Estadistica y Censos
inflation pressures. ADSCR is expected below 1.0x, which is a score
of ‘b’, resulting in a final ‘b’ assessment.
Key Metrics
Rating Sensitivities: A downgrade could occur if there are signs of
(ARS mil.) 2021 2022 2024rc
deeper liquidity stress that could compromise debt repayment capacity
in the short to medium term., or if there are indications of any credit Operating revenue 238,623.3 451,714.6 2,498,569.0
event that reflects a near default situation. An improved operating Opex 201,453.4 399,258.8 2,449,135.0
balance that strengthens the ADSCR above 1.0x, on a sustained basis, Operating balance 37,169.9 52,455.8 49,434.0
fueled by containment in opex could lead to an upgrade. Net adjusted debt a
117,081.0 189,724.9 722,790.0
Issuer Profile: Neuquen is located in the southwestern region of Payback ratio (x) 3.1 3.6 14.6
Argentina. The province’s economy is highly concentrated in the ADSCR (x) 1.9 1.3 0.1
hydrocarbon sector, as of June 2023. Neuquen remains the main crude
Fiscal debt burden (%) 49.0 42.0 28.9
oil producer at 51% and gas producer at 64% of the national total.
a
Rating Report: Province of Neuquen (December 2022)
aaa aa
Historical bbb bb
100 2.0 40 Rating case
1.8
80 1.6
1.4 30
60 1.2
1.0 20
40 0.8
0.6
20 0.4 10
0.2
0 0.0 0
2023
2028
2030
2024
2025
2026
2027
2029
2018
2019
2020
2021
2022
2023rc
2024rc
2025rc
2018
2019
2020
2021
2022
2023rc
2024rc
2025rc
Abierto Electronico, Province of Neuquen Source: Fitch Ratings, Fitch Solutions, Province of Neuquen Source: Fitch Ratings, Fitch Solutions, Province of Neuquen

Public Finance
Argentina
Province of Salta Issuer Data

Ratings Actions: Fitch affirmed the Province of Salta’s LT LC IDR at Location
‘CCC–’ and downgraded the LT FC IDR to ‘CC’ from ‘CCC–’ following
Argentina’s sovereign downgrade in March 2023. Salta’s SCP is
assessed at ‘ccc’.
Vulnerable Risk Profile: Salta has a high dependence on federal
transfers, which account for 74% (average for 2018–2022) of its
operating revenue. Local taxes were 24.5% of total consolidated
provincial revenue, on average, in 2022, reflecting low fiscal autonomy
and reliance on federal transfers from the co-participation regime.
Ad hoc support No
Salta’s payroll bill is high at 63.4% of total expenditures in 2022, among Asymmetric risk No
the highest for Argentine LRGs, limiting the province’s budgetary
flexibility. The province reported capex at 8.9% of total expenditures in Long-Term FC IDR/Outlook CC
2022, and a 7.1% average for 2018–2022. Long-Term LC IDR/Outlook CCC–
Direct debt totaled ARS94.9 billion at YE 2022 and adjusted debt Population (mil., 2022) 1.4
ARS96.3 billion. Fitch estimates the province’s liquidity coverage ratio Population growth (%, CAGR 2001–2010) 1.3
at 2.3x by YE 2021 and 2.5x by the YE 2022. Local GDP per capita (USD, 2022E) 9,358
Debt Sustainability, ‘aa’ Category: The primary metric of payback Local GDP (2005 % of country GDP) 1.5
burden, or net adjusted debt/operating balance, will be below 5x with a Unemployment rate (%, 2Q23) 5.0
score of ‘aaa’. The ADSCR, measured as operating balance/debt FC – Foreign currency. LC – Local currency. IDR – Issuer Default Rating. E – Estimates.
service, is projected slightly above 1.0x, a score of ‘bb’, resulting in a final Source: Fitch Ratings, Fitch Solutions, Comision Economica para America Latina
y el Caribe, Instituto Nacional de Estadistica y Censos
Debt Sustainability Assessment of ‘aa’, reflecting an override of the
payback ratio due to the weaker coverage level.
Rating Sensitivities: A deterioration of the ADSCR, signs of deeper Key Metrics
liquidity stress that could compromise debt repayment capacity in the (ARS mil.) 2021 2022 2024rc
next 12 months of the projected horizon, and any formal announcement Operating revenue 186,985 339,500 1,163,486
assessed as a DDE under Fitch’s rating definitions would lead to a
Opex 172,128 319,261 1,097,436
downgrade and a downgrade of the sovereign IDR. An upgrade of
Argentina’s IDR would result in an upgrade of Salta. Operating balance 14,857 20,239 66,050
Net adjusted debta 58,497 92,296 120,468
Issuer Profile: Salta is located in the northwest of Argentina and has a
small and weak local economy concentrated in the tertiary sector,
heavily weighted in social services and the public sector. The primary ADSCR (x) 1.6 1.3 1.0
sector contributes and includes some hydrocarbon extraction. Fiscal debt burden (%) 21.9 16.9 10.4
The province’s population is estimated at 1.4 million or 3.1% of the a
national population. ADSCR – Actual debt service coverage ratio.
Rating Report: Province of Salta (November 2022)
2023–2030 2018–2025rc
— Fitch's Rating Case Scenario aaa aa
Historical bbb bb
1.6
80 1.4 30
1.2
60 1.0
0.8 20
40
0.6
20 0.4 10
0.2
0 0.0 0
2023
2030
2024
2025
2026
2027
2028
2029
2018
2019
2020
2021
2022
2019
2018
2020
2021
2022
2023rc
2024rc
2025rc
2023rc
2024rc
2025rc
Abierto Electronico, Province of Salta Source: Fitch Ratings, Fitch Solutions, Province of Salta Source: Fitch Ratings, Fitch Solutions, Province of Salta

Public Finance
Argentina
Province of Entre Rios Issuer Data

Ratings Actions: Fitch affirmed the Province of Entre Rios’ LT LC IDR
Location
at ‘CCC–’ and downgraded the LT FC IDR to ‘CC’ from ‘CCC–’ following
Argentina’s sovereign downgrade in March 2023. Entre Rios’s SCP is
assessed at ‘ccc-’.
Vulnerable Risk Profile: Entre Rios has a high dependence on federal
transfers, which represented around 71% (average for 2018-2022) of
operating revenue. Tax collection accounted for 23.4% of total
consolidated provincial revenue in 2022, reflecting low fiscal autonomy.
Staff expenses represented a rigid 66.7% of total expenses in 2022. Ad hoc support No
The province’s leeway or flexibility to cut expenses is viewed as weak
Asymmetric risk No
relative to international peers, considering only a low (2018–2022)
average 6.6% of the province’s total expenditure corresponds to capex. Long-Term FC IDR/Outlook CC
Entre Rios is among the provinces that did not transfer their pension to Long-Term LC IDR/Outlook CCC–
the nation. Direct debt totaled ARS153.9 billion at YE 2022 with 85.6% Population (mil., 2022) 1.4
foreign currency denominated. Total debt grew around 58%, with Population growth (%, CAGR 2001–2010) 0.7
regard to 2021, mainly due to currency depreciation. Local GDP per capita (USD, 2021E) 8,515
Debt Sustainability, ‘aa’ Category: The debt payback ratio will remain Local GDP (2005 % of country GDP) 1.9
below 5x, with a score of ‘aaa’. The ADSCR, measured as operating Unemployment rate (%, 2Q23) 6.2
balance/debt service, is projected above 1x for the next two years, FC – Foreign currency. LC – Local currency. IDR – Issuer Default Rating. E – Estimates.
consistent with a score of ‘bb’ and below 1x in 2025, in the ‘b’ range. Source: Fitch Ratings, Fitch Solutions, Comision Economica para America Latina
The final Debt Sustainability Assessment of ‘aa’ reflects an override of y el Caribe, Instituto Nacional de Estadistica y Censos
the debt payback ratio due to the projected weaker coverage level.
Rating Sensitivities: Signs of deeper liquidity stress that could Key Metrics
compromise debt repayment capacity in the next 12 months of the (ARS mil.) 2021 2022 2024rc
projected horizon, and any formal announcement assessed as a DDE
Operating revenue 241,211.4 425,026.6 1,456,678.4
under Fitch’s rating definitions, or a sovereign downgrade would lead to
a negative rating action. An upgrade could occur if Debt Sustainability Opex 188,479.3 353,023.1 1,351,402.1
metrics remain in line with projections of payback below 5x and ADSCR Operating balance 52,732.1 72,003.5 105,276.3
above 1x in tandem with a sustainable liquidity coverage ratio. Net adjusted debta 54,018.8 76,849.9 191,564.9
Issuer Profile: Entre Rios is located in the northeast region of Payback ratio (x) 1.0 1.1 1.8
Argentina. Its territory is suitable for livestock, 53% of the province’s ADSCR (x) 3.7 3.0 1.2
surface is suitable for agricultural activity and agribusiness. The local Fiscal debt burden (%) 22.4 18.1 13.1
economy is heavily based in agricultural, mainly soy and poultry. a
Rating Report: Province of Entre Rios (November 2022)
2023–2030 — Fitch's Rating Case Scenario (2018–2025rc)
aaa aa
Historical
bbb bb
3.5
80 3.0 30
60 2.5
2.0 20
40 1.5
10
1.0
20 0.5 0
0 0.0
2019
2021
2018
2020
2022
2023rc
2024rc
2025rc
2022
2018
2019
2020
2021
2023rc
2024rc
2025rc
2023
2028
2024
2025
2026
2027
2029
2030
Abierto Electronico, Province of Entre Rios Source: Fitch Ratings, Fitch Solutions, Province of Entre Rios Source: Fitch Ratings, Fitch Solutions, Province of Entre Rios

Public Finance
Argentina
Province of Cordoba Issuer Data

Ratings Affirmed: Fitch affirmed the Province of Cordoba’s IDRs at
Location
‘CCC+’. Cordoba meets Fitch’s criteria requirements to be rated above
the sovereign rating. The province’s SCP is assessed at ‘b-’.
Fitch applies an asymmetric risk that lowers Cordoba’s IDR by
one notch from its SCP. This leads to Cordoba’s IDR being at ‘CCC+’
three notches above Argentina’s LT FC IDR of ‘CC’ but one notch below
Argentina’s Country Ceiling of ‘B–’.
Vulnerable Risk Profile: Cordoba has dependence on a ‘CCC’
sovereign counterparty risk for 51.3% (three year-average) of its total
Ad hoc support No
revenue. Operating revenue is mainly made up of taxes, including
turnover tax, which was 27% of operating revenue in 2022, and stamp Asymmetric risk Yes
duty, which made up 3.7%. Long-Term FC IDR/Outlook CCC+
Cordoba’s track record of prudent fiscal policies and expenditure Long-Term LC IDR/Outlook CCC+
controls are hindered by Argentina’s structurally high inflation Population (mil., 2022) 3.8
pressuring expenditures. In 2022, 19.8% of total expenditures Population growth (%, CAGR 2001–2010) 0.85
corresponded to capex. Staff expenses represented 39.4% of total Local GDP per capita (USD, 2022E) 12,528
expenses (five year-average was 45.5%). Cordoba is among the
Local GDP (2005 % of country GDP) 7.6
provinces that did not transfer its pension to the nation.
Unemployment rate (%, 2Q23) 8.3
Direct debt increased by about 66.6% by YE 2022 underpinned by
FC – Foreign currency. LC – Local currency. IDR – Issuer Default Rating. E – Estimates.
high inflation and currency depreciation, totaling ARS439.5 billion. Source: Fitch Ratings, Fitch Solutions, Comision Economica para America Latina
Approximately 97.3% of Cordoba’s direct debt is denominated in y el Caribe, Instituto Nacional de Estadistica y Censos
foreign currency and is unhedged, mainly in U.S. dollars
Debt Sustainability, ‘aa’ Category: Debt payback will remain below
5.0x by 2024 and was 1.6x in 2022, for an assessment of ‘aaa’.
Key Metrics
ADSCR was 1.8x in 2024 and 4.5x in 2022, leading to an ‘a’ assessment. (ARS mil.) 2021 2022 2024rc
The overall debt score is ‘aa’ and underpinned by the medium-term Operating revenue 545,437.8 914,780.5 4,818,174.0
maturity of debt in tandem with high refinancing risks stemming from
Opex 415,962.0 715,980.0 4,133,098.0
a ‘CC’ macroeconomic environment.
Operating balance 129,475.8 198,800.5 685,076.0
Rating Sensitivities: A downgrade of Argentina’s Country Ceiling would Net adjusted debta 155,891.4 320,423.0 851,382.0
negatively affect Cordoba’s rating. Refinancing risks are underpinned
by an inability to tap the international capital market and could
compromise debt repayment capacity. An upgrade of Argentina’s ADSCR (x) 4.1 4.5 1.8
Country Ceiling above ‘B–’ could lead to a positive rating action. Fiscal debt burden (%) 28.6 35.0 17.7
a
Issuer Profile: Cordoba is Argentina’s second-largest economic center Adjusted debt – unrestricted cash. Rc – Fitch rating case scenario.
after Buenos Aires and has a diversified economic profile. Source: Fitch Ratings, Fitch Solutions.
Rating Report: Province of Cordoba (December 2022)
aaa aa
Historical
(USD mil.) bbb bb
(x) Rating case (x) b Historical
400
350 4 30
300
250 3
200 20
150 2
100 10
1
50
0 0 0
2030
2023
2024
2025
2026
2027
2028
2029
2018
2019
2020
2021
2022
2023rc
2024rc
2025rc
2018
2021
2019
2020
2022
2023rc
2024rc
2025rc
Source: Fitch Ratings, Fitch Solutions, Mercado Rc –Rating case Rc –Rating case.
Abierto Electronico, Province of Cordoba Source: Fitch Ratings, Fitch Solutions, Province of Cordoba Source: Fitch Ratings, Fitch Solutions, Province of Cordoba

Public Finance
Argentina
Province of Santa Fe Issuer Data

Ratings Affirmed: Fitch affirmed the Province of Santa Fe’s IDRs Location
at ‘B–’ and assessed the SCP at ‘b–’. The province continues to meet
Fitch’s criteria requirements to be rated above the sovereign and is
aligned with Argentina’s Country Ceiling.
Vulnerable Risk Profile: Santa Fe is dependent on federal transfers,
with transfers representing around 62.9% (five-year average) of
operating revenue. Local taxes were 28.9% of total provincial revenue
in 2022, reflecting low fiscal autonomy and reliance on federal
transfers from the co-participation regime.
Ad hoc support No
Flexibility to cut expenses is weak, relative to international peers, as
Asymmetric risk No
only 9.8% of consolidated provincial total expenditures corresponded
to capex in 2022 (an average of 10.9% in 2018–2022). Santa Fe is Long-Term FC IDR/Outlook B–
among the provinces that did not transfer its pension to the nation. Long-Term LC IDR/Outlook B–
Approximately 87% of Santa Fe’s direct debt is foreign currency Population (mil., 2022) 3.5
denominated, unhedged and mainly in U.S. dollars as of 2022. Population growth (%, CAGR 2001–2010) 0.7
The province is current on its obligations and did not engage in any debt Local GDP per capita (USD, 2022E) 13,386
restructuring processes, unlike other Argentine LRGs. Local GDP (2005 % of country GDP) 7.6
Debt Sustainability, ‘aa’ Category: Debt payback is ‘aaa’ and reflects a Unemployment rate (%, 2Q 2023) 8.1
ratio of 3.4x for 2025 under Fitch’s rating case. The assessment also FC – Foreign currency. LC – Local currency. IDR – Issuer Default Rating. E – Estimates.
considers the ‘aaa’ fiscal debt burden of 11.6% and an override Source: Fitch Ratings, Fitch Solutions, Comision Economica para America Latina
y el Caribe, Instituto Nacional de Estadistica y Censos
stemming from a weaker score of the ADSCR at 1.8x in 2023 when
Santa Fe’s 7.0% senior unsecured notes were fully paid and 1.4x in
2025, when the 6.9% senior unsecured notes will start to be amortized. Key Metrics
Rating Sensitivities: A downgrade of Argentina’s Country Ceiling (ARS mil.) 2021 2022 2024rc
would negatively affect the ratings along with any regulations for Operating revenue 529,696.0 948,991.8 5,002,608.4
Argentine provinces to access FX. The IDR could be downgraded if the
Opex 453,135.9 835,501.7 4,751,658.7
operating balance deteriorates triggering a payback above 5x and an
ADSCR below 1.0x. Operating balance 76,560.1 113,490.1 250,949.7
Net adjusted debta 31,546.5 27,308.1 426,779.1
An upgrade of Argentina’s Country Ceiling, combined with Santa Fe’s
debt service coverage above 2x from Fitch’s forward-looking scenario
of 1.8x in 2023 and 1.4x in 2025, could positively affect Santa Fe’s ADSCR (x) 4.6 2.8 4.0
ratings provided its payback ratio remains below 5x. Fiscal debt burden (%) 5.9 2.8 8.5
a
Issuer Profile: Santa Fe is located in central Argentina and is the third- Adjusted debt – unrestricted cash. Rc – Fitch rating case scenario.
largest province and is relatively broad, diversified and stable. Santa Fe Source: Fitch Ratings, Fitch Solutions
contributed almost 13% of the nation’s total GDP in 2022.
Rating Report: Province of Santa Fe (January 2023)
aaa aa
Historical bbb bb
(USD mil.) (x) Rating case b Historical
(x)
120 16
14 30
100 12
80 10
8 20
60
40 6
4 10
20 2
0 0 0
2024
2023
2025
2026
2027
2028
2029
2030
2023rc
2024rc
2025rc
2018
2019
2020
2021
2022
2019
2018
2020
2021
2022
2023rc
2024rc
2025rc
Abierto Electronico, Province of Santa Fe. Source: Fitch Ratings, Fitch Solutions, Province of Santa Fe Source: Fitch Ratings, Fitch Solutions, Province of Santa Fe

Public Finance
Argentina
Province of Chubut Issuer Data

Ratings Affirmed: Fitch affirmed the Province of Chubut’s IDRs at ‘CC’.
Location
Chubut’s SCP is assessed at ‘cc’.
Vulnerable Risk Profile: The revenue structure highlights moderate
fiscal autonomy and reliance on cyclical oil and gas royalties and
transfers from the ‘CC’ sovereign. Transfers from the national
government amounted to 43.4% of total revenue (three-year average).
Royalties amounted to 25.3% of operating revenue in 2020–2022 and
tax collection represented 23% of operating revenue.
Chubut’s operating balance was quite volatile over the years, reflecting Ad hoc support No
its dependency on oil royalties. Capex/total expenditure averaged
11.1% for 2018–2022. Staff costs in 2020 corresponded to 61.4% of Asymmetric risk No
opex. The province did not transfer its pension to the nation. Long-Term FC IDR/Outlook CC
The province’s direct debt totaled ARS163 billion at YE 2022. Long-Term LC IDR/Outlook CC
Approximately 68% of debt is foreign currency denominated. Exposure Population (mil., 2022) 0.6
to foreign exchange risk and capital controls is a significant weakness Population growth (%, CAGR 2001–2010) 2.3
of Argentine LRGs. Local GDP per capita (USD, 2022E) 18,594
Debt Sustainability, ‘bb’ Category: The payback ratio is projected at Local GDP (2005 % of country GDP) 1.9
14.3x for 2025 under Fitch’s rating case and is aligned with the Unemployment rate (%, 2Q23) 7.1
‘bbb’ category. ADSCR, projected at 0.2x in 2025, is aligned with the FC – Foreign currency. LC – Local currency. IDR – Issuer Default Rating. E – Estimates.
‘b’ category. Fitch applies an override to the overall Debt Sustainability Source: Fitch Ratings, Fitch Solutions, Comision Economica para America Latina
assessment given the significantly weaker coverage ratio. Fiscal debt y el Caribe, Instituto Nacional de Estadistica y Censos
burden is projected at 33.4% in 2025.
Rating Sensitivities: A downgrade could occur with signs of deeper Key Metrics
liquidity stress that may compromise debt repayment capacity.
(ARS mil.) 2021 2022 2024rc
This includes evidence of increased refinancing risk in LC and FC debt,
or if there are any indications of a credit event that reflects a near Operating revenue 136,496.5 234,312.1 1,303,908.0
default situation. An upgrade could occur if improved operating Opex 108,678.2 202,227.2 1,250,550.0
balances strengthen the ADSCR above 1.0x on a sustained basis under Operating balance 27,818.3 32,084.9 53,358.0
Fitch’s rating case projection horizon. Net adjusted debta 106,917.8 167,217.4 548,638.0
Issuer Profile: Chubut is located in the Patagonian region of Argentina. Payback ratio (x) 3.8 5.2 10.3
The province’s economy is based on services and the hydrocarbon ADSCR (x) 1.4 0.8 0.2
sector, due to oil production. Fiscal debt burden (%) 78.3 71.3 42.0
a
Rating Report: Province of Chubut (January 2023)
aaa aa
Historical bbb bb
100 1.2 40
80 0.8
20
60 0.4
40 0.0 0
20 -0.4 -20
0 -0.8 -40
2023
2027
2024
2025
2026
2028
2029
2030
2018
2019
2020
2021
2022
2023rc
2024rc
2025rc
2018
2019
2020
2021
2022
2023rc
2024rc
2025rc
Abierto Electronico, Province of Chubut Source: Fitch Ratings, Fitch Solutions, Province of Chubut Source: Fitch Ratings, Fitch Solutions, Province of Chubut

Public Finance
Argentina
Province of Chaco Issuer Data

Ratings Actions: Fitch affirmed Chaco’s LT LC IDR at ‘CCC–’ and Location
downgraded the LT FC IDR to ‘CC’ from ‘CCC–’ following Argentina’s
sovereign downgrade in March 2023. Chaco’s SCP is assessed at ‘ccc’.
Vulnerable Risk Profile: The province depends on a ‘CCC’ sovereign
counterparty risk for 83.5% (three-year average) of its total revenue.
Tax revenue/total revenue represented a low 12% in YE 2021 and
wealth metrics are below the national average.
Chaco has a high share of opex/total expenditure at 83.2% (three-year
average). Staff expenses were 52.0% of total expenses in 2021 Ad hoc support No
(five-year average of 54.5%). Around 11.8% of consolidated provincial Asymmetric risk No
total expenditure was for capex from 2017 to 2021. Chaco is among
Long-Term FC IDR/Outlook CC
the provinces that did not transfer their pension to the nation.
Long-Term LC IDR/Outlook CCC–
Direct debt increased by 25.5% in 2021 due to currency depreciation,
totaling ARS64.6 billion. Outstanding debt is ARS83.7 billion as of
Population growth (%, CAGR 2001–2010) 0.77
3Q22. Approximately 64.7% of Chaco’s direct debt is foreign currency
denominated and unhedged, mainly in U.S. dollars. Local GDP per capita (USD, 2022E) 6,103
Local GDP (2005 % of country GDP) 1.2
Debt Sustainability, ‘aa’ Category: Payback will remain below 5.0x by
2024 and was 1.4x in 2021, an ‘aaa’ assessment. ADSCR stands at 2.4x Unemployment rate (%, 2Q23) 5.6
in 2024 and was 3.4x in 2021, an ‘aa’ assessment. The final Debt FC – Foreign currency. LC – Local currency. IDR – Issuer Default Rating. E – Estimates.
Source: Fitch Ratings, Fitch Solutions, Comision Economica para America Latina
Sustainability assessment at the ‘aa’ level reflects an override for a y el Caribe, Instituto Nacional de Estadistica y Censos
lower secondary metric in comparison with the payback ratio category.
Rating Sensitivities: A downgrade could occur from signs of deeper
liquidity stress that may compromise debt repayment capacity in the
Key Metrics
next 12 months. This includes increased refinancing risks underpinned (ARS mil.) 2020 2021 2024rc
by an inability to access international capital markets, a deterioration Operating revenue 127,609.2 207,277.3 1,252,028.0
of operating margins resulting in ADSCR below 1.0x, or a formal Opex 106,101.0 166,796.4 1,148,921.0
announcement of a DDE. IDRs are capped by the sovereign rating.
Operating balance 21,508.2 40,480.9 103,107.0
An upgrade of Argentina’s IDR would lead to a corresponding rating
action on Chaco if the SCP remains at ‘ccc’. Net adjusted debta 31,940.0 58,066.2 492,191.0
Issuer Profile: Chaco is located in northeast Argentina and has a small,
low value-added local economy with weak socioeconomic indicators. ADSCR (x) 3.6 3.3 2.3
Soybeans are the most important commodity, followed by sunflower Fiscal debt burden (%) 25.0 28.0 39.0
seeds, despite a historical prevalence of cotton production. a
Source: Fitch Ratings, Fitch Solutions.
Rating Report: Province of Chaco (March 2023)
aaa aa
Historical bbb bb
60 3.5
50 3.0 30
2.5
40
2.0 20
30 1.5
20 1.0 10
10 0.5
0 0.0 0
2022rc
2023rc
2024rc
2017
2020
2018
2019
2021
2017
2018
2019
2020
2021
2022rc
2023rc
2024rc
2023
2024
2025
2026
2027
2028
2029
2030
Abierto Electronico, Province of Chaco Source: Fitch Ratings, Fitch Solutions, Province of Chaco Source: Fitch Ratings, Fitch Solutions, Province of Chaco

Public Finance
Argentina
Province of La Rioja Issuer Data

Rating Actions: Fitch affirmed the Province of La Rioja’s LT FC IDR Location
at ‘CC’. We downgraded La Rioja’s LT LC IDR to ‘CC’ from ‘CCC–’.
The SCP is assessed at ‘cc’.
Vulnerable Risk Profile: La Rioja depends on transfers from Argentina
as transfers were 91.5% of total revenue (three-year average).
The province also depends on national budgetary transfers at 17.8%
(three-year average) of operating income. Local collection revenue was
only 7.7% % (three-year average) of operating income.
Opex represented 80.3% of total expenditure in 2022 and staff Ad hoc support No
expenses remained high at 50.1%, below the historical average of Asymmetric risk No
53.2% for 2018–2022. Capex averaged 14.7% of total expenditure
(five-year average).
Long-Term LC IDR/Outlook CC
Over the next three years, principal payments on U.S. dollar notes are
USD53.7 million in 2024 to USD75.6 million each year from 2025 to
Population growth (%, CAGR 2001–2010) 1.6
2027 and USD37.8 million in 2028. The external market remains
closed; hence, the province is looking for local alternative sources of Local GDP per capita (USD, 2022E) 6,264
financing to accomplish its capex program. Local GDP (2005 % of country GDP) 0.4
Debt Sustainability, ‘a’ Category: Payback reflects an assessment Unemployment rate (%, 2Q 2023) 4.1
of ‘aa’ and a ratio of 5.6x for 2024 under Fitch’s rating case. This reflects FC – Foreign currency. LC – Local currency. IDR – Issuer Default Rating. E – Estimates.
an override from an assessment of ‘b’ and an ADSCR of 0.7x in 2024. y el Caribe, Instituto Nacional de Estadistica y Censos
Debt Sustainability metrics are analyzed to evaluate province specific
debt repayment capacity and its liquidity in the next 12 months.
Key Metrics
Rating Sensitivities: A downgrade could occur with signs of deeper
liquidity stress that may compromise debt repayment in the future. (ARS mil.) 2021 2022 2024rc
This includes evidence of increased refinancing risk in LC and FC debt Operating revenue 92,525.3 169,816.2 895,255.0
or if there are any indications of any credit event reflecting a near Opex 79,861.6 147,306.3 841,296.0
default situation. A positive rating action could occur if the operating Operating balance 12,663.7 22,509.9 53,959.0
balance improves and strengthens the ADSCR above 1.0x on a
Net adjusted debta 35,017.2 59,077.1 334,601.0
sustained basis, fueled by contained opex.
Issuer Profile: La Rioja is located in northwest Argentina. Local GDP ADSCR (x) 3.8 5.4 0.7
amounts for less than 1% of national GDP. Due to its relatively small
Fiscal debt burden (%) 37.8 34.7 37.3
size, public sector employees represent almost one-third of the local
economy, higher than the national average. a
Rating Report: Province of La Rioja (December 2022)
aaa aa
Historical bbb bb
80 6 40 Rating case
70 5
60 30
50 4
40 3 20
30 2
20 10
10 1
0 0 0
2018
2019
2020
2021
2022
2023rc
2024rc
2025rc
2020
2018
2019
2021
2022
2023rc
2024rc
2025rc
2030
2023
2024
2025
2026
2027
2028
2029
Abierto Electronico, Province of La Rioja Source: Fitch Ratings, Fitch Solutions, Province of La Rioja Source: Fitch Ratings, Fitch Solutions, Province of La Rioja

Public Finance
Argentina
Municipality of Cordoba Issuer Data

Ratings Affirmed: Fitch affirmed the Municipality of Cordoba’s LT FC Location
IDR at ‘CC’ and LT LC IDR at ‘CCC–’. The Municipality’s SCP is assessed
at ‘ccc–’. We relied on our ratings definitions to position the
municipality’s ratings and SCP.
Vulnerable Risk Profile: Co-participation transfers account for a share
of the 38% of operating revenue (three-year average), highlighting a
revenue structure of a reasonable fiscal autonomy and a modest
reliance on co-participation.
Local collection revenues represent 61.3% (three-year average) of Ad hoc support No
operating income but the municipality’s ability to raise revenue is Asymmetric risk No
constrained by the moderate income of the city’s residents by
international standards and social-political sensitivity to tax increases.
Long-Term LC IDR/Outlook CCC–
The municipality has a high level of opex/total expenditure, at around Population (mil., 2021) 1.4
73.8% in 2022, and staff expenses represented 48.3% of operating
Population growth (%, CAGR 2001–2010) 0.4%
expenses. On average, in 2018–2022, 16.4% of total expenditure went
to capex. Local GDP per capita (USD, 2021E) 12,173
Local GDP (2005 % of country GDP) 3.65%
Direct debt increased by about 77.9% by YE 2022 underpinned by high
Unemployment rate (%, 2021) n.a.
inflation and currency depreciation, totaling ARS39.6 billion.
Approximately 69.6% of direct debt is foreign currency denominated FC – Foreign currency. LC – Local currency. IDR – Issuer Default Rating. E – Estimates.
and is unhedged, mainly in U.S. dollars. y el Caribe, Instituto Nacional de Estadistica y Censos
Debt Sustainability, ‘aa’ Category: Debt Sustainability includes an
‘aaa’ assessment and payback ratio of 2.9x for 2024 under our rating
case. This reflects an override from the ‘bbb’ assessment and ADSCR of Key Metrics
1.3x in 2024, or 0.8x in our last review. Debt Sustainability metrics are
(ARS mil.) 2021 2022 2024rc
analyzed to evaluate specific debt repayment capacity and liquidity in
the next 12 months. Operating revenue 66,753 120,314 634,336
Opex 55,797 97,075 560,142
Rating Sensitivities: The Municipality of Cordoba may be downgraded
to ‘C’ if there are indications of any credit event that reflects a near Operating balance 10,956 23,239 74,194
a
default situation. As the LT FC IDR is capped by the sovereign rating, Net adjusted debt 8,699 27,305 206.084
an upgrade of Argentina would lead to a corresponding rating action if Payback Ratio (x) 0.8 1.2 2.8
the SCP remains at ‘ccc–’. ADSCR (x) 3.9 4.4 1.3
Issuer Profile: The Municipality of Cordoba is the capital of the Fiscal debt burden (%) 13.0 22.7 32.5
Province of Cordoba and the second most-populated city in Argentina, a
Adjusted debt – Unrestricted Cash. Rc – Fitch rating case scenario.
after the City of Buenos Aires. ADSCR – Actual debt service coverage ratio.
Rating Report: Municipality of Cordoba (November 2022)
aaa aa
Historical bbb bb
40 Rating case
45 5
40
35 4 30
30 3
25 20
20 2
15 10
10 1
5 0
0 0
2018
2019
2020
2021
2022
2023rc
2024rc
2025rc
2023rc
2024rc
2025rc
2018
2019
2020
2021
2022
2026
2027
2023
2024
2025
2028
2029
2030
Source: Fitch Ratings, Fitch Solutions, Mercado Rc – Rating case Rc – Rating case
Abierto Electronico, Municipality of Cordoba Source: Fitch Ratings, Fitch Solutions, Municipality of Cordoba Source: Fitch Ratings, Fitch Solutions, Municipality of Cordoba

Public Finance
Argentina
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particular security or in the particular jurisdiction of the issuer, and a variety of other factors. Users of Fitch’s ratings and reports should understand that neither an enhanced factual investigation nor any third-
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were not anticipated at the time a rating or forecast was issued or affirmed.
The information in this report is provided "as is" without any representation or warranty of any kind, and Fitch does not represent or warrant that the report or any of its contents will meet any of the
requirements of a recipient of the report. A Fitch rating is an opinion as to the creditworthiness of a security. This opinion and reports made by Fitch are based on established criteria and methodologies that
Fitch is continuously evaluating and updating. Therefore, ratings and reports are the collective work product of Fitch and no individual, or group of individuals, is solely responsible for a rating or a report. The
rating does not address the risk of loss due to risks other than credit risk, unless such risk is specifically mentioned. Fitch is not engaged in the offer or sale of any security. All Fitch reports have shared authorship.
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Public Finance

Local and Regional Governments

Argentine Local and Regional Governments

Special Report │ January 11, 2024 fitchratings.com 1

Argentine Local and Regional Governments —

Special Report │ January 11, 2024 fitchratings.com 2

Rating Actions Risk Profile: Key Risk Factors Analysis

Special Report │ January 11, 2024 fitchratings.com 3

Special Report │ January 11, 2024 fitchratings.com 4

Operating Balance 2022 Provincial Expenditure Breakdowna

Consolidated total for 24 jurisdictions; preliminary data.

Spending decentralization may continue to rise and spiking inflation adds

Special Report │ January 11, 2024 fitchratings.com 5

capital markets in previous years. However, 2023 market volatility and

Special Report │ January 11, 2024 fitchratings.com 6

Capital Controls Imposed on LRGs in 2023

Special Report │ January 11, 2024 fitchratings.com 7

Risk Profile and Key Risk Factors

Summary of Debt Sustainability Assessments

Special Report │ January 11, 2024 fitchratings.com 8

Individual Issuer Summaries/Reports

Tierra del Fuego

Source: Fitch Ratings

Special Report │ January 11, 2024 fitchratings.com 9

City of Buenos Aires Issuer Data

Special Report │ January 11, 2024 fitchratings.com 10

Province of Neuquen Issuer Data

Rating Report: Province of Neuquen (December 2022)

Special Report │ January 11, 2024 fitchratings.com 11

Province of Salta Issuer Data

Rating Report: Province of Salta (November 2022)

Special Report │ January 11, 2024 fitchratings.com 12

Province of Entre Rios Issuer Data

Rating Report: Province of Entre Rios (November 2022)

Special Report │ January 11, 2024 fitchratings.com 13

Province of Cordoba Issuer Data

Rating Report: Province of Cordoba (December 2022)

Special Report │ January 11, 2024 fitchratings.com 14

Province of Santa Fe Issuer Data

Special Report │ January 11, 2024 fitchratings.com 15

Province of Chubut Issuer Data

Rating Report: Province of Chubut (January 2023)

Special Report │ January 11, 2024 fitchratings.com 16

Province of Chaco Issuer Data

Rating Report: Province of Chaco (March 2023)

Special Report │ January 11, 2024 fitchratings.com 17

Province of La Rioja Issuer Data

Rating Report: Province of La Rioja (December 2022)

Special Report │ January 11, 2024 fitchratings.com 18

Municipality of Cordoba Issuer Data

Rating Report: Municipality of Cordoba (November 2022)

Special Report │ January 11, 2024 fitchratings.com 19

DISCLAIMER & DISCLOSURES

Special Report │ January 11, 2024 fitchratings.com 20

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