Sovereign paid a second claim to an investment bank on a loan to a sub-sovereign entity in Argentina. For two years after the initial default (when Sovereign paid the first claim – see Non -Payment / Argentina 2002), the loan performed on schedule. When the loan went back into default, the bank attempted to foreclose on certain security and was prevented from doing so by the Argentine Government. Accordingly, Sovereign paid another claim to the insured for the outstanding balance of the defaulted loan. Sovereign is working with its coinsurers and the Insured on recovery strategies.