Another Argentine Default
Argentina defaulted on a World Bank loan in November
when it failed to make the full $805 million payment originally
due October 15. Instead, the government made an interest
payment of $79.2 million. Non-payment has probably cut off
Argentina from all further support from multilateral
institutions, its only source of international credit after
last year's $144 billion default on its domestic and
international bonds.The World Bank says it assesses no
penalties on "loan payments made within 30 days of the
scheduled due date. If a payment becomes 30 days overdue, no
new loans to the borrower can be presented to the Bank's
Board." Furthermore, the borrower no longer becomes eligible
for reduced interest charges falling due over the following six
months. World Bank interest charge waivers are only available
to countries that are current with debt payments.
The Argentine government's decision to make only a token
payment came as a surprise because the World Bank had already
earmarked $600 million in fresh...
Already have an account?
Subscribe now for unlimited access to all current and archive news, data and market analysis.
Take a free two-week trial now for the latest news, data and market analysis.