BUENOS AIRES, Argentina – Argentina’s government said on Thursday that it has begun to process the next payment it owes on its restructured bonds.
Economy Minister Axel Kicillof said that Argentina has taken steps to pay $832 million owed by Monday to creditors who participated in debt swaps in 2005 and 2010.
A U.S. court is ordering Argentina to pay some $1.5 billion to a group of creditors who refused Argentina’s debt swaps after the country went into default in 2001. If Argentina does not pay the plaintiffs, the ruling bars from using the U.S. financial system to pay other bondholders.
“Not paying while having the resources and forcing a voluntary default is something that is not contemplated in Argentine law,” Kicillof said.
“It would be a clear violation of the debt prospects.”
Argentina’s next installment to the majority of its creditors is due June 30, though the government has a 30-day grace period thereafter to avoid going into a catastrophic default.
The winners of the more than decade-long debt battle asked a U.S. judge on Tuesday to deny Argentina’s request for more negotiating time to avoid a default. The plaintiffs said Argentina must first show it’s serious about paying the judgment and that Argentina will only try to evade the court’s orders if it’s given more time.
Kicillof has said that enforcing the deadline could provoke a disorderly default, sinking the nation’s economy and potentially causing financial havoc around the globe.
President Cristina Fernandez has said that she wants the judge’s support for a process that would enable her government to resolve 100 per cent of Argentina’s debts — including holders of the last 7 per cent of bonds that went into default in 2001 and are held by investors who weren’t part of the winning case.