Argentine debt default
Argentine debt default
This is the 2nd insolvency of Argentina in 13 years. In 2001, this country can not pay $ 100 billion, pushing the national financial crisis. Then, Argentine debt restructuring in 2005 and 2010.
To date, more than 90% of creditors have agreed to accept new bonds with lower payments. However, the creditor group led by U.S. investment fund NML Capital, and Aurelius Capital Management refused this agreement and require Argentina to pay all the money, Reuters said.
Argentina Economy Minister – Axel Kicillof not reach agreement yesterday. Photo: Bloomberg
The legal battle between Argentina and the creditor has lasted many years. In 2012, the U.S. Federal Court in Manhattan ruled Argentina must pay the full $ 1.33 billion principal and interest to this group, before making payment to other creditors. Argentina can then appeal to the U.S. Supreme Court, but was rejected.
Argentina Economy Minister – Axel Kicillof said the country has enough dollars to 539 million interest payment before the deadline 30/6. But because of the decision, from the previous month, he had to quickly Kicillof to U.S. talks with creditor groups.
However, the person in charge of court settlement – Daniel Pollack said yesterday that the two sides have not reached an agreement. So, he said Argentina “going bankrupt”.
In a press conference yesterday, said Kicillof Argentina can not fully repay the investment fund, as it will spark a wave of similar demands from other creditors. He called the U.S. team’s creditors “vultures” and said he would not sign an agreement in a “blackmail” like this.
Standard & Poor’s subsequently downgraded the credit rating for long-term and short-term debt of Argentina and C from CCC-down “partial default”. The reason is that Argentina can not pay interest dated 30/6. This rank will be retained until the account is paid off Argentina.
However, bankruptcies are expected to be less than the consequences, because Argentina’s economy was more stable. “We believe that bankruptcies will only happen in the short term and have no great influence on Argentina,” Mauro Roca – senior economist at Goldman Sachs, said on Bloomberg. The country is currently the 3rd largest economy in Latin America.