Strapped In For A Turbulent 2009

The sovereign credit profile in Latin America has deteriorated markedly since the last edition of our proprietary risk ratings, to the point where the region's creditworthiness is now facing its greatest stress test since Argentina's spectacular default in 2001-02. Growing external imbalances have not come as a major surprise to us: indeed, we highlighted back in March 2008 that the triple threat of a US recessionary scenario, commodity price deflation and tighter capital markets would spell danger for emerging market assets, not least sovereign debt. Nonetheless,

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