Argentina declared in default

Argentina has defaulted for the second time in 13 years after officials failed to come to an agreement with the country's bondholders.

After frantic last minute talks failed to produce a deal yesterday, Standard & Poor's deemed the country to be in selective default. The change in credit rating is likely to hike Argentina's borrowing costs, and put even more pressure on the country's already-struggling economy.

The South American country failed to get the $539 million payment to bondholders after a U.S. judge ruled that the money couldn’t be distributed unless a group of hedge funds holding defaulted debt also got paid.

Argentina has about $200 billion in foreign-currency debt, including $30 billion of restructured bonds, according to S&P.

The default is expected to worsen an economy already in recession, weaken the currency as more Argentines seek to hold dollars, and put pressure on foreign reserves. It could also raise soybean prices, as the country is the world's third-largest soybean exporter.