S&P: Argentina Foreign Currency Ratings Lowered To ‘SD’ After Holders Of Discount Bonds Did Not Receive Interest Payment
- On June 30, 2014, the Republic of Argentina failed to make a US$539 million interest payment on its discount bonds maturing in December 2033 (Discount Bonds). Standard & Poor’s does not rate the Discount Bonds. The Discount Bonds provide for a 30-day grace period for payment.
- On July 30, the grace period expired with bondholders not receiving their payment.
- We are therefore lowering our long- and short-term foreign currency sovereign credit ratings on Argentina to selective default (‘SD’) from ‘CCC-/C’, indicating that Argentina defaulted on some of its foreign currency obligations. At the same time, we are removing the ‘CCC-/C’ foreign currency ratings from CreditWatch, where they were placed with negative implications on July 1, 2014.
- If and when Argentina cures the payment default on the Discount Bonds, we could revise our ratings on Argentina depending on our assessment at that time of Argentina’s residual litigation risk, its access to international debt markets, and its overall credit profile.