...High Capital Controls: Capital controls remain prevalent in both countries as they seek to stem the decline in international reserves. In 2013, Argentina's international reserve levels fell to USD31 billion from USD43 billion, while Venezuela's declined to USD21 billion from USD29 billion. The risk that companies will be prohibited from transferring dollars abroad or converting pesos or bolivars into U.S. dollars or euros to service debt remains high. In both countries it is difficult for international companies to receive hard currency dividends. Manageable Cash Flow Risk: Masisa S.A., Arcos Dorados B.V., Coca-Cola FEMSA S.A.B. de C.V. and Construtora Norberto Odebrecht S.A. have the highest cash flow exposure to Argentina and Venezuela. Among the 26 rated companies with international operations in Argentina, Fitch Ratings estimates only Tenaris S.A., Masisa, Hochschild Mining Plc and Cencosud S.A. generate more than 20% of their EBITDA in that country. In Venezuela, only Masisa and CNO...
