Fitch credit rating agency downgrades Argentina‘s debt to one level above default. Argentina’s foreign currency rating was downgraded to “C” from “CCC-” on Friday. Suggesting that the rating agency believes a default is “imminent. “The country commanded public sector bodies to sell or exchange their holdings of 11 sovereign dollar bonds. Which is to restructure its debt.
Argentina’s inflation rate has risen above 100%, and the country’s overseas reserves have declined.
According to a presidential decree published in the country’s official gazette on Thursday, public sector entities must sell or auction five local law dollar bonds maturing between 2029 and 2041. As well as swap six international law dollar bonds for peso debt.
The International Monetary Fund said on Thursday that it was evaluating Argentina’s debt swap statement. In light of the goals of their $44 billion debt programme.
According to Fitch, the “C” rating indicates an impending default. Because the presidential order would involve one-sided exchanges and forced currency conversions.
“The ‘C’ rating reflects Fitch’s view that a default is imminent,” says Fitch analysts led by Todd Martinez. The rating agency says that Argentina’s score will downgrade to restrictive default when the swap occurs.
The rating agency downgraded Argentina’s long-term sovereign currency rating from “CCC” to “CCC-” in October. Noting deep macroeconomic imbalances and rising risks about Argentina’s ability to make future debt repayments.
Standard & Poor’s credit rating for Argentina stands at CCC+ with negative outlook. Moody’s credit rating for Argentina was last set at Ca with stable outlook.