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July 31, 2014

Argentina in Default After Refusing Order to Pay Vulture Funds 
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Argentina has gone into default on its sovereign debt after failing to
resolve a payment dispute with U.S. investors. A recent Supreme Court
ruling sided with vulture funds that purchased Argentina's debt for
bargain prices after its financial crisis and then refused to cut the
value of their holdings, as most other creditors did. A lower court
judge then barred Argentina from repaying the majority of its creditors
without also repaying the vulture funds. The Argentine government has
refused to fully repay the vulture funds. It has delivered a $539
million interest payment to avoid the default, but the judge's order
bars the payment's release. After failing to meet a midnight deadline,
Argentina went into default for the second time in 13 years.
Negotiations are expected to continue in the coming days.

 

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