WHY IS THERE TALK OF A NEW DEFAULT?
Normally, any country that didn't pay its bondholders would be in default. Argentina's situation has a wrinkle. The Argentine government maintains it will not default because it has already deposited the payment in a New York bank. If that money fails to reach the creditors, it says, Argentina isn't to blame because the judge has blocked the release of the money.
Argentina's government lined up two more swaps in 2005 and 2010, offering existing creditors new bonds worth much less than the old ones. Critics described Argentina's negotiating style as "take it or leave it". Most investors accepted something is better than nothing and traded in roughly 93 per cent of the defaulted bonds.
Since Griesa refused to suspend his ruling, Argentina must continue negotiations led by a court appointed mediator. The meetings are taking place in New York.
According to analysts, the judge could order that the payment Argentina has deposited in the New York bank be divided among the debt swap creditors and the plaintiffs.
According to private economists, the country's inflation was 30 per cent in 2013. So far in 2014, it Nike Sneakers 2017 For Men
A clause in Argentina's earlier debt restructuring agreements bars the government from voluntarily offering the plaintiffs a better deal than the one given investors in the debt swaps of 2005 and 2010, according to Anna Gelpern, professor at Georgetown University in Washington. The clause expires on December 31. If Argentina fails to abide by that agreement, the other creditors could file claims worth $US120 billion, according to the government.
Argentina asked Griesa to temporarily suspend his order, saying it could not comply because it has legal obligations to creditors who accepted the debt swaps. It says a delay would give it time to solve the problem of the holdouts.
that amount has risen to about $US1.5 billion. The creditors say they are due $US1.6 billion.
One of the biggest differences is that the economy in 2001 was deeper in recession. Unemployment was rampant. The possibility of social unrest was greater.
is 19 per cent. According to the government, the rate in 2014 is 15 per cent.
HOW DID ARGENTINA GET HERE?
HOW MUCH DOES ARGENTINA OWE?
WHAT ARE GRIESA'S OPTIONS IF THE NEGOTIATIONS FAIL?
The US Supreme Court in June refused to overturn Griesa's ruling. The court also allowed the plaintiffs to ask any court in the country to investigate Argentina's assets and subject them to liens to ensure payment of the debt.
Argentina fights with debt holdouts
Gelpern said other countries could find it much more difficult to restructure their debt unless there are changes in laws and financial institutions, which "could take a long time".
As it tried to avoid default in 2001, it arranged a "debt swap," asking investors to trade in bonds coming due for longer term ones. The swap, however, failed to resolve Argentina's troubles. In December 2001, the country declared it would stop making payments on about $US100 billion ($A108.20 billion) of debt.
Ramiro Castineira, of the Buenos Aires consulting agency Econometrica, said that in 2001, Argentina defaulted on its debts "because it was broke, and now it would be because it doesn't comply with a (court) ruling". The financial system, he said, "is better prepared to cope with a default".
Hedge funds began buying Argentina's bonds as the country slid into crisis and kept adding to their holdings after it defaulted. Some, like NML Capital, refused to participate in the exchanges and held out for a better deal.
WHAT IS ARGENTINA'S POSITION ON THE RULING?
WHAT WOULD THIS MEAN FOR OTHER COUNTRIES?
At least two of these groups are in litigation with Argentina: Billionaire Paul Singer's NML Capital, and Aurelius Capital Management.
HOW WOULD A NEW DEFAULT DIFFER FROM THE 2001 DEFAULT?
These holdouts then turned to US courts, seeking to force Argentina to pay up under terms agreed to when the bonds were first sold, before 2001.
US District Court Judge Thomas Griesa in Manhattan ruled in 2012 that the creditors who rejected Argentina's earlier debt swap offers deserved to be paid in full a figure he put at $US1.33 billion. With interest, Nike Shoes Grey And Purple
Economists and businesses warn it would further choke off Argentina's ability to obtain US dollars through international financial markets and would complicate the government's plans to loosen the foreign exchange market, restricted since late 2011. Private businesses and local governments would find it harder to get dollars or international credit, leading Nike Shoes Sale 2017 to fewer jobs. It could drive down the value of Argentina's peso against the scarce dollars and drive inflation even higher.
WHAT COULD THIS MEAN FOR ARGENTINES?
Griesa blocked a $US539 million payment that Argentina was due to make on June 30 to holders of the restructured debt securities. He said it would violate his orders unless Argentina also pays money owed to the plaintiffs. A 30 day grace period for paying the restructured debt expires Wednesday.
WHAT ABOUT THE OTHER BONDHOLDERS?
Argentina's government demonizes the investors as "vulture funds".
In 1998, Argentina fell into recession and faced crushing payments on its international debt. Nike Sneaker Gold
Nike Shoes Grey And White
Nike Shoes Dark Red
Nike Shoes Under 100
Nike Shoes Grey And Gold
Fila Shoes Sale
Fila Statique Cross Trainers - Womens
Fila Yellow Shoes
Nike Shoes Maroon
Girls Nike Shoes
Nike Shoes Low Cut Casual
Nike Sneakers Black And Gold
Fila Mens Shoes Online
Supra Mens Owen Trainers
Shoes Nike Sale