Argentina slams US vulture funds as it seeks to avoid default

Argentina took its full-page advert campaign to European newspapers today, criticising a US court ruling and so-called vulture funds over its ongoing debt saga, as the country seeks to avoid a new default.

Entitled “Argentina wants to continue paying its debts but they won’t let it,” the country, which is already slipping into recession, slammed vulture funds in a repeat of the advertisements which first appeared in US newspapers on Sunday.

Leftist president Cristina Fernandez has long characterised holdout funds as "vultures" for picking over the bones of the 2002 debt crisis, which thrust millions of middle-class Argentines into poverty. New impetus was given to a long-running saga when the US Supreme Court ruled a week ago that the government should pay $1.33 billion to creditors, denying Argentina's appeal challenging court injunctions.

US 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 holdout funds demanding full payment.

Today, adverts appeared in Britain’s Times and Financial Times newspapers, Spain’s El Pais as well as Germany’s Frankfurter Allgemeine Zeitung, criticising the court ruling and slamming the funds involved. “They (vulture funds) purchased bonds in default at obscenely low prices for the sole purpose of engaging in litigation against Argentina and making enormous profit,” the advertisement in the Financial Times read.

“The vulture funds have invested millions of dollars in lobbying and propaganda, trying to make the whole world believe that Argentina does not pays its debts and refuses to negotiate.”

The statements also warned that the ruling would place any other country that had to undertake a restructuring of its debt in a “delicate position.”

Argentina has been locked for more than a decade in a fight in US courts with creditors who refuse to accept a 2005 and 2010 revamp of debt securities and demand to be paid in full.

Yesterday, Argentina asked a US judge to issue a stay of his ruling against the country in its case against “holdout” creditors, as it sought to avoid a new default that would further punish an economy already slipping into recession.

Reuters