Argentina on Friday had a last-ditch chance to salvage its debt standing against a court order to pay out $1.3 billion to holdout bondholders that could force it into default on its other loans.
Buenos Aires has until the end of Friday to submit a plan to settle the claims of two US hedge funds demanding full payment on bonds Argentina defaulted on during its 2001 financial crisis.
Most of the other investors of the bonds had agreed to a restructured payment plan.
The New York law firm of Cleary, Gottlieb, Steen & Hamilton, representing the government, will present the proposal to the New York court of appeals just before midnight (0400 GMT Saturday), sources close to the case told AFP.
Argentine President Cristina Kirchner has said she is willing to re-extend the restructuring terms of 2005 and 2010 to hedge funds NML Capital and Aurelius Capital Management, which she has branded "vultures."
That offer would repay the investors around 70 percent of their capital in nominal terms as the bonds mature in the next 28-33 years.
Those terms were already accepted by holders of 92 percent of the bonds but have been rejected by the holdouts.
If Argentina's latest offer is rejected, the government would be forced to repay the hedge funds in full now, as New York judge Thomas Griesa ordered late last year in a landmark judgment that rocked the world of sovereign debt.
But because of "pari passu" or "equal treatment" clauses in the restructured bond contracts, Buenos Aires could be forced to pay back all others at the same time, possibly forcing it to default on all its debt.
Buenos Aires has fought the ruling, but on March 1 the court gave it until today to spell out how it plans to pay up.
The court ordered Argentina to "submit in writing to the court the precise terms of any alternative payment formula and schedule to which it is prepared to commit" by March 29.
It said Buenos Aires needs to detail how and when it would repay the bonds and what assurances it would give that it would follow through with repayment.
Analysts do not expect the Buenos Aires plan, possibly an offer of long-term replacement bonds, to be accepted, leaving Argentina little legal recourse but to comply and multiply its debt problems or appeal to the US Supreme Court.
"If you have a judgment for $1.3 billion, you are not going to be told that you have to accept, in lieu of your money, new bonds with new terms," said Richard Samp, chief counsel of Washington Legal Foundation.
The case has sent tremors throughout the world of sovereign bonds because of the precedent it could set for the rights and treatment of investors who refuse to go along with debt restructuring pacts after defaults.
If the hedge funds are allowed to collect everything they claim, it could make it impossible for defaulters to restructure their debts without 100 percent participation from investors.
In a letter published in the Financial Times Thursday, Aurelius Capital Chairman Mark Brodsky argued that was not likely to happen.
Even after the Griesa ruling last year, he said, "Greece conducted a restructuring far larger than Argentina's."