Argentina president says country will not go into default because it has paid its debts

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BUENOS AIRES, Argentina – Argentina’s president says her country will not default because it has paid its debts to bondholders.

The government is in negotiations to resolve a dispute with some creditors over $1.5 billion in unpaid debts that could lead to the country’s second default in 13 years.

But President Cristina Fernandez said Wednesday that a new term for default will have to be created to refer to “a debtor that paid and someone who blocked it.”

She was referring to a U.S. judge’s order that Argentina can’t pay investors who accepted lower-valued bonds after a 2001 default unless it also pays off bondholders who didn’t participate in the bond swap.

Many of the latter are hedge funds that bought Argentine bonds on the cheap following Argentina’s record $100 billion default in 2001.

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