Argentina’s economic minister says the country will default on its debt.
Minister Axel Kicillof said Wednesday the South American country failed to reach agreement with several New York hedge funds before a midnight deadline. He said Argentina “had negotiated in good faith.”
The hedge funds sued, demanding full repayment of their $1.5 billion share of the Argentine debt.
As Argentina’s delegation scrambled in negotiations at a New York office for a last-minute deal, the price of Argentina bonds surged 15 percent to levels not seen in more than three years.
The move higher came as U.S. ratings agency Standard & Poor's downgraded Argentina's credit rating.
This marks the second time in 13 years Argentina has defaulted on its debt.
The country moved money to a New York bank to make the scheduled debt payment, but a federal judge would not allow the country to pay only those bondholders who agreed to its debt restructuring.
Argentina officials said that means they have only partially defaulted.
The downgrade from S&P will require the country to repay some debt early.