Loading ...Argentina defaulted for the second time in 12 years after hopes for a midnight deal with holdout creditors were dashed, setting up stock and bond prices for declines on Thursday and raising chances a recession could worsen this year.
After a long legal battle with hedge funds that rejected Argentina’s debt restructuring following its 2002 default, Latin America’s third-biggest economy failed to strike a deal in time to meet a midnight deadline for a coupon payment on exchange bonds.
Even a short default will raise companies’ borrowing costs, pile more pressure on the peso, drain dwindling foreign reserves and fuel one of the world’s highest inflation rates.
However, Argentina is not the only country that has struggled to pay its debt recently. There are 10 other countries currently on Moody’s lists with a rating of Caa1 or worse, meaning they are at risk of default.
Ecuador, Egypt, Pakistan, Venezuela, Belize, Cuba, Cyprus, Greece, Jamaica and Ukraine are all on the verge of a default, according to Moody’s ratings.