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Two US hedge funds suing Argentina for full payment on defaulted bonds Friday rejected the country's offer to settle the suit with a deal that would give them just 25 percent of what they were seeking.
"Argentina's years of defiance cannot be cured by a convoluted offer to give (the bond-holders) yet more Argentine IOUs, worth pennies-on-the-dollar," the hedge funds said in a statement filed to a New York court.
That Buenos Aires still has not accepted a court order to pay the bonds in full "only serves to demonstrate that it does not respect its voluntarily assumed obligations or the rule of law."
"The district court's injunction was in no sense an abuse of discretion, and should be affirmed."
US hedge funds NML Capital and Aurelius, which are seeking some $1.3 billion, had been expected to reject the offer, in which Argentina had sought to repay them on similar terms to the majority of holders of bonds who had accepted a bond restructuring after the country defaulted on $100 billion in debt in 2002.
The funds, which Buenos Aires labels "vulture funds," had bought the bonds at a discount and gone to court to seek full repayment.
However, Argentina worries that full repayment would require it to repay the restructured bonds in full as well, which some analysts say could force the country back into default.