Argentina: Fitch downgrades rating and predicts default – 03/24/2023 – Market
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Fitch Ratings downgraded this Friday (24) Argentina’s foreign currency sovereign debt rating to “C”, from “CCC-“, to reflect its view that a debt default is imminent due to its plans to swap.
The decision is the consequence of a “decree that obliges national public sector entities to carry out operations with their portfolios in sovereign debt securities, which would imply unilateral exchanges and forced currency conversion that constitute events of default, according to Fitch criteria” .
The Argentine government this week published decrees forcing public bodies to exchange debts in dollars for others in pesos, at a time when the country’s central bank continues to lose reserves.
Fitch recalled in a note that the default events considered in its criteria include “a unilateral exchange (…) initiated by the sovereign on a public debt security” and “a forced redenomination of the sovereign debt to a different currency”.
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