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Argentina president says country will not default
Indebted » But she also vows not to sign deal with creditors that puts country at risk.
First Published Jul 23 2014 06:27 pm • Last Updated Jul 23 2014 06:27 pm

Buenos Aires • Argentina’s president said Wednesday her country will not go into default because it has been paying debts to bondholders on time.

The government is in negotiations to resolve a dispute with creditors over $1.5 billion in unpaid debts that could lead Argentina to its second default in 13 years.

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But President Cristina Fernandez said a new term for default will have to be created to call "a debtor who paid and someone who blocked it." She alluded 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 swaps.

"I don’t know what the term is because credit rating agencies and others always find a term to hide what’s really going on. Argentina paid and someone blocked it and won’t let it reach third parties," Fernandez said at the inauguration of a motorcycle factory.

The center-left leader also said she won’t sign any deal with creditors that she often calls "vultures" if it puts the future of Argentines at risk.

"They won’t make me sign just anything threatening me with the world falling apart," she said.

Many of the creditors in the dispute are hedge funds that bought Argentine bonds on the cheap following Argentina’s record $100 billion default in 2001. Fernandez and her predecessor, her late husband Nestor Kirchner, refused to negotiate with the plaintiffs who spent more than a decade litigating for payment in full rather than agreeing to provide Argentina with debt relief.

A U.S. federal judge on Tuesday denied Argentina’s request to extend deadlines to repay a debt to bondholders and ordered around-the-clock negotiations aimed at averting a default on the July 30 deadline.

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