Talks with U.S. creditors collapsed late Thursday, hurling Argentina into its second debt default in 13 years. It's the eighth time the South American country has technically failed to live up to its debt obligations and financial markets, especially in Latin America, were bracing for the impact. Latin America's second-largest economy behind Brazil (according to the IMF) was already dealing with an economic recession and one of the world's highest inflation rates. The default will make matters worse as it could limit the country's access to capital markets and raise the cost of borrowing. Argentina will also face additional pressure to devalue its currency. If it does that, inflation will increase more, putting a further burden on Argentina's population.
The default results from Argentina's failure to comply with a court order that holdout bondholders be paid at the same time as a $539 million payment to those who accepted reduced payments in two prior restructurings. Argentina has called the hedge fund creditors "vultures" and has refused to sign an agreement about the debt that it says would jeopardize its future.
-- NBC News staff, Reuters and The Associated Press