Argentina Forks Over $6.2 Billion to Vulture Funds

Argentina repaid its holdout creditors on Friday, ending a 15-year dispute with vulture fund holders who rejected debt restructuring that followed Argentina’s US$100 billion debt default in 2001.

RELATED:
Argentina to Borrow Cash for First Time in 15 Years

"The republic has made full payment in accordance with the specific terms of each such agreement,” Argentina's chief lawyer working on the case said in a statement to a U.S. court on Friday.

Argentina handed over US$6.2 billion to settle disputes with 20 creditors. It is due to pay another US$3.1 billion in the coming days to settle lingering claims, the finance ministry explained in a statement.

The move follows a decision handed down earlier this month by a U.S. court that cleared the way for Argentina to start borrowing again, which had been excluded from international markets after breakdown in talks with the country’s the holdout creditors. 

WATCH: Argentina: Senate Passes Pro Vulture Funds Law

Argentina has since raised US$16.5 billion in funds from international lenders in order to payback the creditors that have been holding out for more than a decade. 

However, the decision by the government of President Mauricio Macri to reopen negotiations with vulture funds has been met with sharp criticism within Argentina. 

Former economy minister Axel Kicillof told Argentine media on Friday that the new debts would be followed by further painful public spending cuts that will affect the poorest Argentines most.

The case also raised crucial questions about contracts and the rights of both borrowers and lenders in the massive and largely unregulated global sovereign debt markets.

Last September, the U.N. General Assembly voted overwhelmingly in favor of a sovereign debt restructuring proposal, which would grant countries the right to design their own macro economic policy, including restructuring its own sovereign debt.