The country’s national government payed 9.3 billion dollars to vulture funds, putting an end to its struggle in courts abroad.
The vulture fund saga in Argentina has come to an end, as the government transferred $9.3 billion to vulture fund bank accounts of which $6.2 billion will go to settle disputes with 20 creditors, and the remaining $3.1 billion will go towards other ongoing legal battles
The dispute comes from the Kirchner government, as the economic reforms that took place from 2004 to 2009 were rejected by the creditors, who took the case to a New York court as Argentina refused to pay claiming they were exercising “national sovereignty”.
Under Mauricio Macri’s government policies, which look for greater participation in international markets, paying off the debt to restore creditor’s confidence in Argentina was a key task.
The measures took immediate effect, as Argentinian bonds, which were held in the lowest regard by investors, are now back in demand. The government, through the ministry of finance, emitted four bonds immediately, with terms as long as ten years.
“Argentina’s reclassification as an emerging market will allow investment funds to access the country, which should, in the short term, reach $2 billion in investments. The offers from investment funds received by the government are a measure of trust regarding the country’s future.” Said Mariano Sánchez from KPMG consulting in Argentina.
However, with the expected influx of US dollars, the government will now have to face the task of controlling inflation, which will naturally tend upwards. This should be the next issue in Alfonso Prat-Gay’s agenda.