Here is an update article on the situation involving a debt default by Argentina. It appears that Argentina attempted to sidestep the ruling by the US judge in the case. The judge is unhappy and the situation still seems to be unresolved.
From the article:
"Argentina's plan to pay its restructured debt beyond the reach of U.S. courts is illegal, said the judge overseeing litigation stemming from the nation’s 2001 default, while declining to hold the country in contempt."
"U.S. District Judge Thomas Griesa said in Manhattan federal court today that the proposal, announced Aug. 19 by Argentina President Cristina Fernandez de Kirchner, is “invalid, illegal and in violation of current court orders and injunctions.”
“The thing that is of paramount necessity is to have a settlement,” Griesa said. “There must be a settlement.”
"In her Aug. 19 speech, Fernandez said she was introducing legislation to allow the government to swap its restructured debt for bonds that would be issued under local law and paid through a government-controlled bank. The move would violate orders by Griesa that require Argentina to pay NML and the other holdouts more than $1.5 billion when it pays holders of its restructured debt."
"NML’s request comes as Griesa grapples with the legal fallout from Argentina’s latest default, the second in 13 years. The judge, who has presided over lawsuits springing from Argentina’s 2001 default for more than a decade, had said that any plan to pay investors outside his jurisdiction would put Argentina in defiance of U.S. law."
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My added comment: So far there is no known contagion of systemic fallout from this. If there are related derivative products lurking out there tied to this debt, they have yet to surface.
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