Argentina credit story grows murkier as talks collapse
By Paul Kilby
NEW YORK, July 30 (IFR) - Argentina's murky credit story grew even more complicated Wednesday as the US mediator said the country was headed to default after last-ditch talks with holdout creditors failed.
With years of negotiations appearing to come to nought, Economy Minister Axel Kicillof said the country could not obey a US court order to pay the holdouts in full.
Just hours after S&P downgraded the country to selective default, mediator Daniel Pollack also said Argentina would "imminently" be in default on its obligations.
"The ordinary Argentine citizen will be the real and ultimate victim," said Pollack, after the talks failed to placate the holdouts demanding full payment on their bond holdings.
He said it was "not a mere technical condition but rather a real and painful event that will hurt real people".
Repeatedly calling the holdouts "vulture funds", however, Kicillof rejected the notion that the country was in default and said it had offered the funds the same deal put to other creditors when Argentina restructured its debt in 2005 and 2010.
That offer was not accepted by the funds, which have seen Argentina fight all the way to the US Supreme Court against a ruling by Judge Thomas Griesa that the country must make holdouts whole when it makes its next bond payment.
Failure to make that coupon payment today - after the end of a 30-day grace period - effectively left Argentina in technical default. Continuación...