ARGENTINA ON THE BRINK OF DEFAULTING ITS REPAYMENTS

Argentina tries to delay $1.3bn repayment to creditors

18 February 2014 Last updated at 11:03 GMT
http://www.bbc.co.uk/news/business-26225135

Argentina will on Tuesday petition the US courts to try to stall a $1.3bn (£0.8bn) repayment to its creditors.

If the petition to the Supreme Court is not successful, the country risks triggering a default and debt crisis.

The money is owed to creditors who refused to participate in a debt restructuring process arising from the country’s $100bn default 12 years ago.

Most bondholders agreed to accept a hefty discount on what they were owed, but those who held out are demanding to be repaid in full.

President Cristina Fernandez de Kirchner has said her government will honour payments to those who accepted the debt swaps, but will pay nothing to the creditors who held out, including hedge funds NML Capital and Aurelius Capital Management.

She has described the hold-out creditors as “vulture funds”.

Argentina has already defaulted on its debt three times in its history. The last occasion, in 2002, brought the country to its knees.

Meanwhile, inflation is 25% and the peso fell 19% in January.

The president has blamed supermarkets and oil companies, as Nigel Cassidy reports.

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