“”As a result of the sustained inability to place short-term securities with private sector investors, the Argentine government unilaterally extended the maturities of all short-term roles,” the risk qualifier reported Standard & Poor’s by lowering the note for Argentina and placing it in “selective default”.
“That is default according to our criteria,” Argentina’s local and foreign currency sovereign credit note to “SD” said and downed.
According to S&P, “the greatest vulnerabilities in the credit profile come from the rapidly deteriorating financial environment and a lack of confidence in financial markets about policy initiatives under the next administration.”
“The extension of short-term debt repayment terms without compensation is a default.”
This is in addition to the sharp drop in international reserves that was recorded following the announcement of “re-profile” of the debt made on Wednesday by Minister Hernán Lacunza and the collapse of Argentine bonds and shares abroad.
On Friday 16 of this month, after the PASO, Argentina had already been degraded by two of the three most important rating companies. Fitch Ratings then cut Argentina’s rating as a long-term issuer at three levels to CCC from B, which left the country on par with Zambia and The Republic of Congo. S&P, meanwhile, lowered the sovereign rating from B to B- and gave it a negative outlook, until the change this Thursday that anticipates for the next few hours again slobend on the financial front.” As the new terms for short-term debt have already taken effect, we plan to raise sovereign credit ratings from tomorrow to “SD.” Long-term sovereign credit ratings to ‘CCC-‘ and short-term sovereign credit ratings to ‘C’,” the US qualifier’s statement details. It is expected that the fall in the shares of Argentine companies and in bonds will continue and force greater intervention by the Central Bank in the foreign exchange market.