Argentina’s failure to pay bond interest to trigger default insurance settlement

Argentina’s failure to pay interest on its bonds is a credit event that will trigger settlement of $1bn of default insurance, according to the International Swaps & Derivatives Association.

The association’s determinations committee made the ruling in response to a question posed by Swiss bank UBS after the Argentine government missed a July 30 payment deadline on $539m of interest.

Argentina is the first nation to trigger default swaps since Greece restructured its debt in 2012. The ruling was seen by traders as complicated because Argentina made the required payment to the trustee for the bond, Bank of New York Mellon.