Argentina just conducted its sixth peso-debt exchange since August 2022. We classified it as a distressed exchange given the sovereign's pronounced macroeconomic vulnerabilities and very limited ability to extend maturity and place paper in the local market without relying on exchanges. Following the exchange of new instruments to bondholders, we deem the distressed exchange--tantamount to default under our criteria--as cured. We raised our local currency sovereign credit ratings on Argentina to 'CCC/C' from 'SD/SD', our long-term foreign currency rating to 'CCC' from 'CCC-', and our national scale rating to 'raB+' from 'SD'. The stable outlook on the long-term ratings balances the risks posed by pronounced economic imbalances and policy uncertainties with the favorable change in near-term debt service obligations. On
