Fitch Ratings on Dec. 20 downgraded Argentina's foreign currency issuer default ratings to RD, or restricted default, after the new government of President Alberto Fernández unilaterally extended its repayment of short-term dollar-denominated treasury bills, known as Letes.

The debt repayment extension, announced in a presidential decree, "entails a material reduction in terms, and has been taken to avoid a traditional payment default," which qualifies it as a 'distressed debt exchange.' However, Fitch noted that the presidential decree also "effectively concludes the [distressed debt exchange]" and said that it will upgrade Argentina's foreign currency IDRs to a level appropriate for its debt service payment prospects going forward.

Fitch took a similar action earlier in 2019 after Argentina extended the repayment of its short-term debt. The rating agency downgraded the country's ratings following the decision but returned them to their prior level a few days later.

Argentina's long-term foreign currency issuer default ratings had been at CC prior to the most recent rating downgrade, while its short-term IDR was C.