Argentina defaults on its debt for second time in 13 years

Ratings agency S & P declared Argentina in default after the government missed a deadline for paying interest on $13 billion of restructured bonds.

Argentina has defaulted on its debt for the second time in 13 years after last-minute talks in New York with a group of bond-holders ended in failure.

So-called “vulture fund” investors were demanding a full pay-out of $1.3 billion on bonds they hold.

Argentina has said it cannot afford to do so, and has accused them of using its debt problems to make a big profit.

A US judge had set a deadline of 04:00 GMT on Thursday for a deal. The crisis stems from Argentina’s 2001 default.

Late on Wednesday evening, Argentina’s Economy Minister Axel Kicillof said the investors had rejected the government’s latest offer.

Argentina has defaulted on its debt for the second time in 13 years after last-minute talks in New York with a group of bond-holders ended in failure

“Unfortunately, no agreement was reached and the Republic of Argentina will imminently be in default,” Daniel Pollack, the court-appointed mediator in the case, said in a statement on Wednesday evening.

The fresh default is not expected to affect Argentina’s economy in the same way it did in 2001, when dozens were killed in street protests and the authorities froze savers’ accounts to halt a run on the banks.

“The full consequences of default are not predictable, but they certainly are not positive,” Daniel Pollack said.

Speaking at a news conference in New York, Axel Kicillof said Argentina would not do anything illegal.

The investors, also known as “hold-outs”, are US hedge funds that bought debt cheaply after Argentina’s economic crisis.

They never agreed to the restructuring accepted by the majority of bond-holders.

President Cristina Fernandez de Kirchner has described as vultures the minority bond-holders – including Aurelius Capital Management and NML Capital.

She accuses them of taking advantage of Argentina’s debt problems to make large profits.

S&P noted that it could revise the rating if Argentina were to find some way to make the payments.

The hedge funds are demanding Argentina make interest payments on debt which it defaulted on in 2001, even though it was bought at less than face value.

The US courts have blocked payments to other bondholders who agreed a separate deal with Argentina, until agreement with the “hold-outs” is reached.

Axel Kicillof said he planned to return to Argentina after the news conference, saying the country would do what is needed to deal with what he called an unfair situation.

ddIV1MbAIUY iGED4Z6TrtY
Clyde K. Valle

Clyde is a business graduate interested in writing about latest news in politics and business. He enjoys writing and is about to publish his first book. He’s a pet lover and likes to spend time with family. When the time allows he likes to go fishing waiting for the muse to come.

Recent Posts

Donald Trump and Elon Musk Celebrate Election Victory at UFC 309

Image source: Wikimedia Commons President-elect Donald Trump celebrated his election victory at the Ultimate Fighting…

5 days ago

White House 2024: Donald Trump Wins, Kamala Harris Calls Him to Concede Election

Millions of voters across the US chose to return Donald Trump to the White House…

2 weeks ago

Who Won? Donald Trump Declares Victory as He Addresses Jubilant Supporters in Florida

Donald Trump declares victory in the US election as he addresses jubilant supporters in Florida.…

2 weeks ago

Stocks Soaring as Donald Trump Closes in on US Victory

Stocks around the world are rising as Donald Trump appears to be on the cusp…

2 weeks ago

Who Won? Kamala Harris Cancels Election Night Party as Path to Victory Narrows

Donald Trump has won Pennsylvania, North Carolina and Georgia and taken a lead over Kamala…

2 weeks ago

Quincy Jones Dead at 91

Quincy Jones, the celebrated musician and producer who worked with Michael Jackson, Frank Sinatra, Ray…

2 weeks ago