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Argentina faces default for second time in 13 years as 'vulture fund' talks fail

NEW YORK -- Last-ditch talks between Argentina and the U.S. hedge funds it has branded “vultures” failed to reach agreement Wednesday, effectively pushing the country into default.

Ratings agency Standard and Poor's had already placed Argentina in “selective default” when Economy Minister Axel Kicillof emerged from the New York talks to confirm that no deal had been reached.

This left it inevitable that Latin America's third largest economy would be unable to meet its repayment obligations by midnight, placing the country in default for the second time in 13 years.

“Unfortunately, no agreement was reached and the Republic of Argentina will imminently be in default,” said Daniel Pollack, the lawyer appointed by a U.S. court to oversee the talks.

Kicillof complained that the creditors, U.S. hedge funds that bought defaulted Argentine debt at knockdown rates, then went to court to demand full payment, had refused to compromise.

“They were trying to impose on us something illegal,” he declared, confirming that he was heading back to Buenos Aires without a deal.

Kicillof slammed S&P's downgrade, arguing that Argentina could not be regarded as being in default since the money for the repayment was in a U.S. bank account ready to be paid but frozen by court order.

“That money is there. Obviously, if there were a default, the money would not be there,” he stressed, blaming a ruling by U.S. District Judge Thomas Griesa that has prevented its transfer.

“Argentina paid. It has money. It is going to continue to pay. The one who is responsible for this situation is Judge Griesa,” he said.

“We are going to pay those who hold bonds that have been defaulted on, but on reasonable terms, not on terms that amount to extorsion, created under pressure, under a threat,” he said.

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