Argentina’s long history of debt defaults

While Argentina is not facing a Covid-19 chaos close to what we have seen in Brazil and Ecuador, the country is mired in yet another financial crisis. On May 22, for the ninth time in its history, Buenos Aires failed to pay interest on its federal debts and began a 30-day countdown to another default. 

According to President Alberto Fernández, however, nothing really changed on Friday, as the country “has already been in default for months,” blaming the press for ignoring the story and only writing about it now. Indeed, Mr. Fernández’s comments hold water, as Argentina’s latest default is the result of a debt snowball that dates back decades. Last week’s unpaid USD 503 million comes from bonds issued in 2016 by then-President Mauricio Macri, in an attempt to write off another, larger debt. 

In all, settling prior liabilities will cost almost USD 69 billion to Argentina’s public coffers. President Fernández is trying to convince creditors to accept new terms of renegotiation.

A long list of defaults

Argentina has gone into default many times in its history, and the compulsory re-profiling of short-term notes by Hernán Lacunza in 2019 and Martín Guzmán in 2020 were clearly another instance of this.

With negotiations ongoing on whether this default will extend to international bonds, we looked at the historical record of Argentina’s default-like events and counted a total of nine — though we interpret that only five should be classed as actual defaults.

The first case dates back to 1827. After its 1816 independence, Argentina had an active presence in international capital markets. Amid a credit boom caused by the end of the Napoleonic wars, Argentina and...