Schroders: Argentine bonds’ default probability is 85% by 2026

Argentina has a cumulative probability of default of more than 85 percent by 2026 and 60 percent by 2024, according to a report by Schroders' investment team in the country, led by Pablo Albina.

This is because Argentina has to pay US$9.4 billion a year from 2025, or about 2.4 percent of its gross domestic product. 

This will require the country to return to global debt markets by 2025, at least to roll over part of its maturities. If that does not happen, the country will face a new debt restructuring in the next few years, according to Schroders estimates.

An agreement with the International Monetary Fund is a necessary condition to clear near-term maturities and for hard dollar bonds to start discounting a more optimistic scenario, it added.