- Argentina’s failed talks with US pushed it into its second debt default in 13 years. It refused to accept the deal with US Hedge Fund creditors and stated that the funds refused a compromised offer and the agreement could jeopardize the future of all Argentines.
- The court appointed mediator stated that the default could cause damage to the bondholders and to the Argentine economy, which is going through recession, shortage of dollars and highest inflation rates.
- Earlier, a US court had prohibited Argentina from making $539 million in interest payments to other bondholders who separately agreed to restructuring plans with the country in 2005 and 2010.
- Hedge funds, who the Argentina president had refused to negotiate with, had refused to participate in the debt restructuring and had earlier won a US court judgement that they be paid the full value of their bonds plus interest, an estimated $1.5 billion.
- Argentina also dismissed the “selective default” rating given to Argentina’s foreign currency credit by the Agency “Standard & Poor’s” as biased.
- Argentina has made efforts to return to global credit markets. It paid its debt to the International monetary fund and is planning to repay debts with the Paris club of creditor nations and Grupo Repsol. As per Analysts, a new default could shatter all these efforts.
- Read at:http://www.thehindu.com/todays-paper/tp-business/argentina-slides-into-default-as-debt-talks-fail/article6270095.ece