NEW YORK/BUENOS AIRES, June 22 Argentina
splashed advertisements in leading U.S. newspapers over the
weekend to make its case in the ongoing debt saga, slamming
holdout creditors and arguing court rulings could force the
country into another catastrophic default.
Argentina has been locked for more than a decade in a fight
in U.S. courts with creditors who refuse to accept a 2005 and
2010 revamp of debt securities and demand to be repaid in full.
U.S. courts have ruled that Argentina cannot continue to pay
creditors who agreed to restructure their bonds after its
2001-02 default on $100 billion in debt unless it also pays
$1.33 billion to the holdouts demanding full payment.
"Pay(ing) the vulture funds is a path leading to default,
and if they are not paid, (U.S. District Court) Judge Griesa's
order entails jeopardizing the right of the bondholders to
collect their debt restructured in 2005 and 2010," the full-page
advertisement in The New York Times' Sunday issue reads.
The manifesto also lambasted holdout hedge funds, which
leftist president Cristina Fernandez has long characterized as
"vultures" for picking over the bones of the 2002 debt crisis,
which thrust millions of middle-class Argentines into poverty.
"They purchased bonds in default at obscenely low prices for
the sole purpose of engaging in litigation against Argentina and
making an enormous profit," the Times advertisement said.
Latin America's No. 3 economy also took its case to The
Wall Street Journal and The Washington Post.
The timing of the campaign seems somewhat off, as Fernandez
on Friday switched tacks and said she would negotiate with the
funds, something she had previously sworn off.
Analysts say Argentina has been trying to open the door to
negotiations while also giving itself leverage in potential
talks by gaining support for its cause and underscoring
injustice, though they warn the country risks irking U.S. courts
and holdouts in the process.
Previous to Fernandez' conciliatory speech on Friday,
officials had given mixed signals about their willingness to
A leading local newspaper on Sunday said Argentina is
considering making an initial payment to holdouts before asking
to extend negotiations to officially reach a settlement next
While many Argentines detest the holdouts, there is a
growing push for a deal to avert a crisis.
Faced with dwindling foreign exchange reserves, a looming
recession and a $6 billion principal and interest payment on
another bond that matures next year, Argentina cannot risk
closing the door on access to international capital markets,
(Reporting by Daniel Bases, writing by Alexandra Ulmer; Editing
by Nick Zieminski)