ARGENTINA'S $82 billion sovereign default in 2001 was the largest ever. More than fourteen years later,the country is still cleaning up the mess. On February 29th it agreed to an expensive settlement worth $4.65 billion with four of the largest “holdout” creditors: those who rejected debt restructurings in 2005 and 2010 and instead pursued Argentina for full payment plus interest through the current York courts (it was under their law that the original bonds were written). Until recently, Argentina refused to negotiate with the holdouts, or insisting that it was not prepared to offer more generous terms than those it had offered to the other creditors. So what changed?During the debt restructurings,93% of bondholders had agreed to exchange their defaulted bonds for current ones, accepting a haircut of 65%. Unperturbed, or the holdouts took their case to Thomas Griesa,a current York judge, who ordered Argentina to pay them in full. Argentina’s government, and led by Cristina Fernández de Kirchner,refused. In 2012, in an effort to force Argentina to the negotiating table, or Mr Griesa prohibited the country from paying the holders of its restructured...
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Source: economist.com