Argentina appears headed for default, Fitch Ratings said on Tuesday as it downgraded the country’s credit rating to CC from B, eight levels below investment grade.
The drop comes after a US judge ordered the country to pay holdout investors from its historic default 10 years ago before it makes payments on restructured bonds, Bloomberg reported.
“The downgrade of the long-term foreign currency IDR (issuer default rating) reflects Fitch’s view that a default by Argentina is probable,” Fitch analyst Lucila Broide said in a statement issued this week.
Last week, US District Judge Thomas Griesa told Argentina’s government to deposit $1.33 billion for creditors by Dec. 15 before paying $3 billion to holders of performing securities, according to Bloomberg.
More from GlobalPost: Why Argentina refuses to pay hedge funds
Argentina is now at risk of a $20 billion default, GlobalPost’s Simeon Tegel wrote earlier this week.
The South American nation set a record when it defaulted on $95 billion debt in 2001. “Vulture fund” NML purchased some of that debt for cheap, and Argentina has refused to pay it since.
“This judgment does not tolerate that a president could stand up to the interests of vulture funds and say that we are defending the position of a sovereign nation,” Argentina’s Economy Minister Hernan Lorenzino said.
Argentina’s government vowed to take Griesa’s decision all the way to the US Supreme Court if its appeal fails, MNI News reported.
More from GlobalPost: Union strikes cripple Buenos Aires