*International credit ratings agency Standard & Poor’s (S&P) has lowered its local currency sovereign issuer credit ratings on Argentina to ‘SD/SD’ (selective default) from ‘CCC-/C’ citing the announcement of a peso-denominated debt exchange earlier this week. The government offered to exchange Ar$55trn (US$65bn) equivalent in peso-denominated debt coming due in the remainder of 2024 for four new debt instruments that mature from late 2025 until mid-2028. It subsequently announced that creditors agreed to exchange 77% of the eligible debt instruments. S&P said that it considers this transaction distressed “based on the likelihood of conventional default - absent participation of creditors - given the sovereign's acute macroeconomic vulnerabilities and limited ability to extend maturity and place paper in the local market without relying on exchanges.” S&P notes that this is the sixth such debt operation since August 2022.
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