Fitch puts Argentina on watch

Fitch Ratings said it placed Argentina's long-term foreign-currency issuer default rating of B, short-term issuer default rating of B and the international bonds issued under New York law on Rating Watch negative.

The agency also said it affirmed Argentina's local-currency issuer default rating at B and country ceiling at B.

The outlook is stable.

The Rating Watch reflects increased uncertainty about Argentina's ability to service its international securities issued under New York law on a timely basis using the U.S. financial system following the recent U.S. Appeals court ruling, Fitch said.

On Oct. 26, the U.S. Court of Appeals for the second circuit in New York upheld a U.S. District judge's ruling that Argentina breached the "Equal Treatment Provision" of the original New York-based law bonds defaulted in 2001, the agency said.

The provision states that the payments rank at all times at least equally with all other present and future unsecured and unsubordinated external indebtedness, according to the court. The remedy of the ruling orders Argentina to make payments to holdouts at the same time as or prior to its payments to holders of the 2005 and 2010 restructured debt.

The Argentine government has stated that it would appeal to the U.S. Supreme Court, but it is unclear at this stage if the Supreme Court will take up the matter, Fitch said.

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