At the same time, Argentina's risk spread widened sharply on JPMorgan's EMBI+ bond index, and the cost of buying protection against an Argentine default surged.
S&P cut Argentina's rating to B-minus from B and gave it a negative outlook, citing increased policy risk and concerns that a recent US appeals court ruling could force the country to repay creditors who have sued to collect on bonds in default since 2002.
Argentina's dollar-denominated 2033 Discount bonds led losses in the local OTC market, shedding 7.1 percent in price , while the 2038 Par bonds fell 4.5 percent .
Both bonds were given to creditors in exchange for their defaulted paper in debt swaps carried out in 2005 and 2010.
The Global 2017 bond, issued during the 2010 swap, was down 4.3 percent in early trade.
Argentina has restructured about 93 percent of the roughly $100 billion it defaulted on a decade ago, but holdout creditors who rejected the swaps continue to press in courts worldwide for full repayment on the bonds.
On Friday, a federal appeals court in New York ruled that Argentina violated bond provisions to treat all creditors equally when it made payments to creditors who accepted the swaps while refusing to pay the holdouts.
Argentine Economy Minister Hernan Lorenzino responded by saying the country will "never pay the vulture funds."