Credit risk agency Standard & Poors announced on Thursday that it was slashing Argentina’s long-term credit rating another three notches into the deepest area of junk debt, saying the government’s plan to “unilaterally” extend maturities had triggered a brief default.
The ratings agency said it would consider Argentina’s long-term foreign and local currency issue ratings as CCC- “vulnerable to nonpayment” - starting on Friday following the government’s Wednesday announcement that it wants to “re-profile” some US$ 100 billion in debt.
The plan, which requires congressional approval, has stoked fears of a full-blown financial crisis in Latin America’s third largest economy, two months before business-friendly President Mauricio Macri’s handling of the economy is tested in a general election against a leftist rival.
Argentina’s bonds sunk on Thursday and country risk soared to levels unseen since 2015.
The so called selective default are a consequence of the sustained impossibility to find buyers for short term sovereign bonds in the private sector, and because the Argentine government unilaterally extended the maturities of all short term bonds on 28 August.
Only 15 days ago S&P had downgraded Argentine sovereign bonds from B to -B, given the significant weakening of the already vulnerable financial profile of the sovereign bonds. Fitch has previously cut two degrees from B to CCC, a category which indicates high possibilities of a default.
Top Comments
Disclaimer & comment rulesHere...like others in the past, Mauricio Macri did it again.
Aug 30th, 2019 - 05:07 pm +3But he hasn't done anything again! It is the prospect of the FF ticket that triggered the collapse in confidence in Argentina-fact. As I have mentioned before, Argentina's credit rating improved steadily under Macri from the technical default that CFK left for him-fact.
Zaphod, the Torturer's Tango Duo are incapable of truth...
Aug 31st, 2019 - 06:06 am +3All politicians are the same, the UK included. They are only in it for what they can get out of it.A politician will not answer a direct answer, like so many of our institutions now days. But you have to admit some Latin American countries are the worse than civilized countries. You scratch my back and I will scratch yours.In Argentina if you have money anything goes, incidently where did Cristina get all her millions from, a presidential salary? Does she present Tax returns or not? Or is the President exempt from filing Tax returns? Does anyone know?Or even care, that is the problem in Argentina, no one really cares.
Aug 31st, 2019 - 11:35 am +2Commenting for this story is now closed.
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