Argentina prepares to default on bonds

Axel Kicillof will make one more attempt to restructure $1.3 billion in bonds.
By Ed Adamczyk Follow @adamczyk_ed Contact the Author   |   July 30, 2014 at 11:09 AM

NEW YORK , July 30 (UPI) -- Argentina's economics minister will make one more attempt to prevent the country from defaulting on its bonds Wednesday.

Negotiations in New York, between Axel Kicillof and "hold-out" U.S. hedge fund managers who bought Argentinian bonds inexpensively and never agreed to any restructuring of payment, ended late Tuesday with no settlement on how Argentina can cover the full payout of $1.3 billion. A federal judge ruled the "hold-outs" must be paid in full by Wednesday.

In Buenos Aires, citizens accustomed to government default are resigned to seeing it again. Argentinian economic policy has devalued the currency and deflated the hopes of those saving for a home.

Software company owner Federico Dumas said, "I'm afraid of everything and my customers are not willing to invest, so that will affect my business. But if the country goes into default, I'm very afraid of what's going to happen to my business and my employees."

A default by Argentina could also trigger an acceleration clause, in which creditors demand bond repayment faster than any agreed-upon timetable.

Argentinian President Cristina Fernandez de Kirchner refers to the bondholders as vultures, eager to capitalize on the country's financial fortunes, and while many citizens admit they understand little of financial maneuvers, they understand "fondos buitres," or "vulture funds" in Spanish.

Related UPI Stories
Latest Headlines
Trending Stories
Vatican: Pope's meeting with Kim Davis not a show of support
Potential male contraceptive found in study with mice
Cancer and height are linked, new study shows
Hacker may have exposed data of 15 million T-Mobile customers
Education Secretary Arne Duncan to step down in December