Fitch has downgraded the credit rating of Argentina and admitted the country will probably default.
The ratings agency has cut its long-term ratings for Argentina by five notches from B to CC and its short term rating from B to C.
Argentina is appealing against a US ruling ordering it to pay £800m to foreign creditors holding bonds that it defaulted on in 2001. The government has until 15 December to reimburse the hedge funds, which shunned two previous debt swaps. Argentina defaulted on $100bn of bonds in 2001, a record amount at the time.
According to The Telegraph, those investors don’t want to go along with a debt restructuring that followed an Argentine default in 2002. If Argentina is forced to pay in full, other holders of debt totalling more than $11bn are expected to demand immediate payment as well.
Argentine politicians have criticized the judge’s ruling as threatening the success of the debt relief that enabled Argentina to grow again.