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DBRS could cut Argentina
DBRS said it placed its B foreign and local currency debt ratings of the Republic of Argentina's long-term foreign and local currency securities under review with negative implications.
This action reflects DBRS' assessment that following a recent New York court ruling, there is greater uncertainty regarding Argentina's willingness to meet its full debt obligations.
On Oct. 26, the U.S. Court of Appeals for the Southern District of New York enjoined Argentina from making payments on debt issued following the 2005 and 2010 debt restructurings, without also making comparable payments on a portion of its debt that remains in default, the agency said.
The court ruled that pari passu clauses in the bond agreements bar Argentina from discriminating against payments of defaulted bonds held by plaintiffs, the largest of whom is NML Capital, Ltd., in favor of the restructured bonds.
Argentina objected to honoring the plaintiffs' claim.
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