Last month, President Cristina Fernandez de Kirchner said Argentina would not bow to "blackmail by vulture funds", amid a row over a seized Argentine navy ship. The ARA Libertad, a training ship, was detained in Ghana in October at the request of creditors who say Argentina still owes them $300m from 2001. Photo: Wikimedia Commons

Fitch Ratings has downgraded Argentina's long-term foreign currency (FC) Issuer Default Rating (IDR) to 'CC' from 'B' and the short-term IDR to 'C' from 'B'.

The downgrade of the long-term foreign currency IDR reflects Fitch's view that a default by Argentina is probable. The increased probability that Argentina will not service its restructured debt securities issued under New York law on a timely basis reflects US District Judge Griesa's decision on Nov. 21 to remove the stay order on the ruling that Argentina must pay US$1.33bn to holdout investors concurrent with or prior to its payments due to holders of the 2005 and 2010 restructured debt. The stay order will be removed with effect from Dec. 15.

Argentina is due to pay approximately USD3 billion of GDP-linked warrants on Dec. 15, 2012. A missed payment on the GDP-linked warrants could trigger a cross default on all exchanged debt securities issued under international law. Subsequently, a missed coupon payment of any other external securities would also trigger a cross default on all exchanged bonds issued under international law.

A hundred years ago if a country was reluctant to pay its debts, gunboats may steam to its shores. Since then sovereign immunity has reigned but the latest development in a legal argument over Argentina's 2001 defaulted debt could shift the balance toward creditors. Reuters reports that investors holding $1bn worth of restructured Argentine debt filed an emergency motion in a US federal appeals court on Monday to fight a ruling that they fear could prevent payment on their bonds and trigger a new default. The move came as Argentina makes a last-ditch attempt this week to stall the US court ruling that has shaken the nation's strategy to put a 2002 debt crisis behind it and fueled fears of a fresh default.

A decade since it triggered the biggest sovereign default in history, Argentina faces a stark choice between depositing $1.3bn before December 15 to pay "holdout" creditors who rejected two debt restructurings, or jeopardizing payments to its other bondholders.

Reuters says that about 93% of bondholders agreed in 2005 and 2010 to swap defaulted debt from the 2002 default for new paper at a steep discount.

However, US District Judge Thomas Griesa last week ordered Argentina to pay the holdouts, led by Elliott Management Corp's NML Capital Ltd and Aurelius Capital Management, who rejected the swaps and are fighting for full repayment in the courts.

Glanbia’s co-op members are voting today to determine whether the co-op should be permitted to reduce its shareholding below the current 51% level in Glanbia Plc.

Liam Igoe of Goodbody comments: "In order to do so, it will require the approval of 75% or more of the attendees at today’s meeting. The results should be available later this evening and if there is sufficient support, the members must vote again in two weeks and again will be required to give a 75% majority in favour of the change.

The decision on whether or not to reduce the co-op’s stake below 51% will have a direct bearing on both the financial structure of the new JV in terms of its debt/ equity mix (as part of the proceeds will be invested in the JV). It will also have some bearing on the future development of the plc itself in that any requirements to raise new equity to fund expansion would be more problematic."

Justin Doyle, Investec Bank Ireland, said today:

1. The markets took few positives from the Greek debt deal yesterday and FX market players spent most of the day unwinding long euro positions after any follow through on the upside failed to materialise.

2. In actual fact most of yesterday was spent digesting negative newsfeed in the dual shapes of lower OECD growth forecasts and more hawkish Fed comments from Dallas Fed President Richard Fisher.

3. Then to top it off in late NY trading, US fiscal cliff issues came firmly back into focus. Senate Majority Leader Harry Reid stuck a pin in what had been a slowly inflating balloon of hope when he said last night that little progress had been made in fiscal cliff negotiations over the last week or so. US and Asian equity markets all closed lower on the day.

4. As ‘fiscal cliff’ deadlines approach fast, President Obama is due to sit down with some very concerned business leaders today. They will obviously be ensuring that he is made fully aware of the extreme sense of urgency that now prevails and will at the very least be looking for some words of reassurance that he will do everything within his powers to avoid a steep drop.

Economic View: Important read-throughs from Greek deal to Ireland; Dermot O'Leary of Goodbody comments - - "Ever since the euro area sovereign crisis began the principle of equality in any assistance that stressed countries received has been an important one. For example, when euro leaders sanctioned an improvement in loan terms for Greece in 2011, an interest rate reduction soon followed for Ireland and Portugal.

It is little wonder then that questions have been asked as to what the most recent deal for Greece means for Ireland and Portugal. Some of the measures have no relevance for Ireland, such as the reduction on interest rates on the initial Greek Loan Facility (GLF). The bond buyback programme is also not relevant for Ireland given that bonds are trading above par across the curve. However, interest deferral and term extension on EFSF loans is relevant for Ireland and indeed Portugal and sets a template for further assistance for these countries. Funding is currently provided to Ireland at the cost of funding for the EFSF, with terms ranging from 5 years to 30 years. The principle of maturity extension has already been accepted for Ireland (and was already accepted for Greece in 2011 too).

It is up to Irish politicians to argue its case for equal treatment for the country at a European level. European policymakers are setting dangerous precedents by granting further assistance to countries whose programmes go off track. Reward should be for good behaviour, not the opposite. At the very least, the decision on Greece on Monday night should help on discussions on restructuring of the promissory notes."