Argentina is likely to default on its sovereign bonds on Wednesday as hopes fade that a last-minute deal could be worked out with a group of holdout investors.
Officials of the South American nation met a US mediator in New York to hammer out an agreement with hedge funds that bought the country’s bonds at rock-bottom prices in the wake of its financial crisis in 2001 and 2002, The Guardian said.
The creditors are demanding full repayment on their investments, having refused to join the vast majority of Argentina’s bondholders in accepting debt restructuring deals in 2005 and 2010 that would have seen their value slashed, according to the newspaper. The value of the bonds, plus interest, is more than US$1.5 billion.
If Argentina does not pay the amount by Wednesday, it will technically be defaulting on its debt obligations, the report said. It would be the second time in only 12 years, after the country defaulted on about US$100 billion of debt during its previous crisis.
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