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The “vulture funds” are tired of being portrayed as the bad guys in Argentina’s debt crisis

  • Tim Fernholz
By Tim Fernholz

Senior reporter

Published Last updated This article is more than 2 years old.

The video above has the look and feel of a political ad for the US elections this fall, but it’s just another tactic in the war over Argentina’s debt.

The country defaulted at the beginning of August after facing a choice between paying all of its creditors, including hold-out funds who refused previous attempts to restructure Argentina’s debt, or none of them—and choosing the latter option. A US court forced Buenos Aires to make that decision at the behest of the hold-out funds, who saw it as their best tactic to get paid. While the story isn’t that simple, the hold-outs—Argentina prefers to call them “vulture funds”—are an easy target for public criticism.

Paul Singer, the billionaire whose investment funds brought the suit and popularized the tactic of buying distressed sovereign debt on the cheap and litigating until collection, is frequently the target here, especially since he is a conservative Republican political donor.

While Singer typically takes a “hater’s gonna hate” attitude to criticism, he may be starting to crack: An investor letter written this summer lamented media misunderstandings of his position, and now American Task Force Argentina, a lobbying group funded by the hold-out funds, released the above ad designed to remind people that Argentina owes money not just to Singer’s funds but a variety of small investors who are less easily tarred as villains.

Of course, if you’re one of the many bondholders who did voluntarily restructure your payments and now aren’t getting paid for the first time in years, you’re probably not super pleased with the scorched-earth tactics that have your payments blocked for the foreseeable future—and there are no doubt some telegenic pensioners in that crowd as well.

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