Argentina Set Back over Bond Default

Argentina suffered a setback over its $100 billion bond default in 2001 when the New York State Court of Appeals ruled that the interest from the defaulted bonds will still be owed.  The court also ruled that the interest rates could reasonably be set at 101% annually given the country's default history and need for capital.  


To make matters worse, the UK Supreme Court ruled earlier that Argentina doesn't have debt immunity in Britain and that Argentina's state immunity won't prevent an offshore trade from using British courts to enforce claims over the 2001 default.  The decision reverses a ruling from last year and permits an affiliate of Elliot Associates LP to seivze Argentina's assets in Britain using a $284 million US court judgement.
As shown by the graph below, Argentina's economy bounced back rather quickly from the default, but the country is still paying for the economic disaster a decade later.

Read an article on the UK court ruling here.