Moody’s Lifts Argentina Debt Rating in Fresh Boost to Milei

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Moody’s Ratings upgraded Argentina’s credit score, giving the nation its third sovereign upgrade in less than three months and further validating President Javier Milei’s economic overhaul plan. 

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The South American nation was raised to B3 from Caa1, with a positive outlook. While the upgrade still leaves it deep into speculative territory, all three major credit-rating firms now rate Argentina above the highly distressed category, a milestone for a country that spent years among the riskiest sovereign borrowers in global markets. 

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“The upgrade reflects our assessment that Argentina’s default risk has declined materially as macroeconomic stabilization has advanced beyond the initial adjustment phase into a more durable improvement in credit fundamentals, a sign of improving governance,” analysts wrote on a Tuesday statement. “Prospects for Argentina’s external position have improved markedly, supported by stronger export performance and rising foreign direct investment in the energy and mining sectors, alongside improved access to external financing.”

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The positive outlook, Moody’s added, “reflects the view that Argentina’s credit profile may strengthen further as structural improvements in external finances combine with ongoing macroeconomic stabilization.”

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The move follows Fitch Ratings’ decision in May to lift Argentina to B1 and a similar move by S&P Global Ratings in June, with all of the firms citing Milei’s success in restoring fiscal accounts and bringing inflation down from triple-digit levels. Argentina’s sovereign bond spread over their US counterparts now stands at nearly 400 basis points, the lowest in eight years as the country looks to put years of economic crisis and debt defaults behind it.

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Rear more: Argentina Bonds Jump, 2035s Hit Record High on S&P Upgrade 

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The upgrades broaden the pool of potential investors that can own Argentine debt. While an initial move out of the highly distressed category can begin to attract new buyers, subsequent upgrades typically expand the universe of institutional investors permitted to hold the country’s bonds.

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Milei’s government has maintained fiscal surpluses and relied on local-law dollar debt issuance, repo agreements with international banks and multilateral-backed financing to meet outstanding debt obligations. The central bank has also accelerated reserve accumulation, meeting the government’s target with the International Monetary Fund of purchasing more than $10 billion in foreign currency during the first half of 2026.

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At the same time, the government has gradually eased some capital controls and implemented reforms aimed at normalizing the country’s monetary and exchange-rate regime.

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Moody’s upgrade further strengthens the case for Argentina’s return to international debt markets. Bond spreads tightened materially following the upgrades by Fitch and S&P, with the latter helping drive sovereign risk premium to the lowest levels of the Milei era.