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S&P Declares ‘Selective Default’ in Argentina

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International rating agency Standard & Poor’s declared Argentina in ‘selective default’ on its bonds, while country’s authorities continue negotiations with hedge fund creditors in New York to reach a deal on restructuring Argentina’s state debt, Agence France-Presse reported late Wednesday.

MOSCOW, July 31 (RIA Novosti) – International rating agency Standard & Poor’s declared Argentina in ‘selective default’ on its bonds, while country’s authorities continue negotiations with hedge fund creditors in New York to reach a deal on restructuring Argentina’s state debt, Agence France-Presse reported late Wednesday.

According to the S&P statement cited by the agency, the final deadline for making a $539 million payment on Argentina’s restructured debt passed, which led to the country being declared in selective default on part of its bonds.

A New York court has earlier ruled that Argentina had to pay $1.33 billion to its 2001 bond holders who did not agree with restructuring deal. Buenos Aires restructured 93 percent of its debt but the creditors holding the rest 7 percent of the bonds did not accept Argentina’s proposal and filed a lawsuit, demanding a full payment.

The US court had also blocked the transfer of the sum that Buenos Aires forwarded in order to cover its restructured debt, forcing the country to start negotiations with the bond creditors who refused the restructuring deal. Argentina attempted to reach an agreement on extension of the payment deadline but still no accord was signed late Wednesday.

Over the last 40 years Argentina went through three major debt crises (1982, 1988 and 2001) with the default declared by the country’s government in 2001 becoming the largest in history.

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