By Marion V. Ali, Staff Reporter
Argentina is on the verge of another default and that country’s President, Cristina Fernandez de Kirchner has said that her government would negotiate with all the country’s creditors. It comes when Argentina may start talks with investors who refused to take part in two restructurings.
Argentina has been in conflict with hedge funds which are demanding full payment for bonds they bought after the country defaulted. The country has been in a 12-year fight in the US courts with hold-outs who declined to participate a 2005 and 2010 revamp of debt securities.
Under the deal, 92 percent of bondholders accepted about a third of the original value of their investment.
However, on Monday, a US Supreme Court ruling sided with bondholders demanding Argentina pay them the full $1.3 billion value. The bondholders also won the right to use the US courts to force Argentina to reveal where it owns assets around the world. The court’s decision means that bondholders should find it easier to collect their debts. Ms. Fernandez has said that government lawyers will go to New York to ask the judge who ordered the payment to give Argentina fair conditions to negotiate with the hold-outs. Following the Supreme Court’s decision, the International Monetary Fund (IMF) warned that Argentina’s legal defeat may have wider implications. The IMF said it was concerned about “broader systemic implications” for other country’s seeking to restructure their debts.
Argentina’s stock market plummetted 10 percent on Monday as the default worries escalated. The country has since managed to reverse some of those losses.