An Analysis of Argentina’s 2001 Default Resolution

Abstract

Argentina’s 2001 default was followed by a complex debt restructuring that included a long legal dispute with so-called vulture funds and other holdout creditors. The resolution of the sovereign default took almost 15 years—and the case continues to have ramifications that are resulting in new disputes. This paper examines the whole restructuring process. It describes the strategies followed by the debtor and the bondholders, their implications, and the characteristics of the legal disputes. It also analyzes the implications of the default resolution for the functioning of sovereign lending markets.