Fitch downgrades Argentina’s credit rating fearing ‘probable default’
Fitch Ratings agency announced on Tuesday it has downgraded Argentina's long-term foreign currency Issuer Default Rating from “B” to “CC,” with a negative outlook, as it sees a “probable default” if the country misses its payment to holdout investors.
The agency stated in a communiqué that “the increased probability that Argentina will not service its restructured debt securities issued under New York law on a timely basis reflects US District Judge Griesa's decision on Nov. 21 to remove the stay order on the ruling that Argentina must pay 1.33 billion dollars to holdout investors concurrent with or prior to its payments due to holders of the 2005 and 2010 restructured debt.”
Fitch assured that a missed payment could lead to a “cross default on all exchanged debt securities issued under international law.”
“A missed coupon payment of any other external securities would also trigger a cross default on all exchanged bonds issued under international law,” it continued.
Fearing Argentina will disobey his order, Griesa wants 1.33 billion deposited in a US escrow account by Dec. 15 to ensure payment if all appeals trying to overturn or block his decisions fail.
The “holdout” investors are suing to recover the full value of bonds that Argentina stopped paying in 2002, setting up a battle with the country's government which brands them as “vulture funds” and has refused to pay them.
Fitch put a negative outlook on the credit which is two steps away from outright default.
Argentina has vowed not to pay the holdout investors, led by Elliott Management's NML Capital Ltd and Aurelius Capital Management, prompting Griesa to order the payment be made before the 2nd Circuit rules on his decision.
Fitch highlighted Argentina's 2005 “Lock Law” which prohibits “re-opening the exchange or from conducting any type of settlement with holdouts without prior authorization from Congress” as a likely reason that payment will not be made.
If no payment is made a technical default would ensue, with uncertainty remaining over treatment of credit default swap contracts, which have surged in prices as investors scramble for protection from a default or restructuring.
“The uncertainty related to the impact of the US Court ruling is likely to further damage confidence and intensify political and social tensions in the country and undermine growth prospects,” Fitch said in its statement.
“While the authorities have been able to stabilize international reserves by progressively tightening capital controls, this has come at the expense of increased economic distortions. The sustainability of this strategy is also vulnerable to international commodity prices, especially soy,” Fitch said.
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once the Falkland Islands get pushed up the Argentine political agenda it's a sure fire sign of imminent economic meltdown.
Yup, the end is nigh for CFKs inept economic model. Even Venezula hasn't got deep enough pockets to keep bailing her out.
We should know the ILOST result by the end of the week (I'm betting they'll throw it out as not under their jurisdiction), the IMF will cut Argentina out of the international money markets on Dec 17. The future certainly doesn't look good for Argentina right now.
edition.cnn.com/2012/11/27/business/argentina-debt-order/index.html?iref=allsearch
The last paragraph in particular:
“the bondholder group said the court's logic ”makes no sense“ as nobody expected Argentina to pay. They also blasted the judge for the ”level of rancour“ they say he exhibited”
It highlights that CFK has seriously pissed off some people that hold the key to their prosperity. That nobody expects Argentina to pay also highlights they aren't involved in the court procedings in good faith and will ignore it if the finding go against them. Judges don't like that attitude.
its all Fitch fault
says CFK .lol.
Did you accidentally hit submit before finishing????
ARGENTINA ALWAYS THE VICTIM
December will be a merry month indeed.......
Media repression
bond defaults
IMF face off
Let's not forget Christmas
and a happy new new
feliz cumpleanos
People in glass houses should not be throwing stones.
I don't hear any bailiffs at the door.
Sure it will hurt CFK, sure she deserves it (as most of Argentina's woes are thanks to her) but it wont do anybody any good for Argentina to go titsup or default.
You are the fox guarding the hen house. Of course all the “hen” are still alive and well.... according to the fox.
In any case nations with terrorists organizations like CIA, MI6 and mossad should be bared from the capital markets trades.
www.gregpalast.com/the-globalizer-who-came-in-from-the-cold/
As for terrorist.......read more about the RG's you pretend to be
www.gregpalast.com/the-globalizer-who-came-in-from-the-cold/
So why don’t she.
.
If you hate capitalists and western countries, why live in Canada?
Interesting for someone who doesn't live there, doesn't suffer the failed economy or terrible crime levels and is not in touch with Argentine people because its quite clear CFK is no longer supported by the masses in Argentina.
(unlike Fitch or Moody, Dadong is trully independent from the london-new york cabal)
Perhaps you could tell us all about the ANTI Hitler Kirchner feelings in Argentina at the moment or were we immagining the recent HUGE demonstrations.
ARGENTINA ALWAYS THE VICTIM
the same agency that rate Spain the same as the US
Remind me what is CC rating????
Try telling that to your mortgage lender.
Unlike Fitch or Moody, Dagong isn't a ratings agency that affects our actual borrowing rates, so it makes no difference.
However, Like the UK and the USA, Dagong has had reviewed your nation's prospects:
”Dagong Global Credit Rating Co., Ltd. (hereinafter referred to as “Dagong”) decides to downgrade the local and foreign currency sovereign credit ratings of the Republic of Argentina (hereinafter referred to as “Argentina”) from B and B- to B- and CCC, respectively, and each with a negative outlook.”
China owns the whole world,
Seems a lot to have on ones plate ?
Lets just hope she don’t drop it then.
.
Another argie claiming to be American! Or a stupid American failing to understand her own country’s economics.
What currency do the Chin hold masses of? The American dollar.
And who administers the fiat currency of the world for trading purposes? America, it’s the dollar.
Who is most at risk from any reduction in value of the dollar? CHINA.
It is like when you have a small loan off the bank. They can call it in anytime they like and won’t give a toss what happens to you.
However, have a BIG loan off the bank and they will be praying you don’t go under.
Get it now, pippa?
Well, the sun always shines doesn't it? There will be clear blue skies from now on.......Everything is lovely... Move along, move along!!! there is nothing to see here!!
Flagship inpounded, credit rating in the toilet, economy shrinking....... KFC / Ol' Turkey Neck / TMBOA / The Harpy sure got all those boxes ticked don't she?
Pippa is a “sussie” persona.
How's your “Papi”, Sussie ??
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