Vulture funds

UK campaigners place advert in Buenos Aires Herald telling vulture funds: ‘Claws off Argentina’

11 January 2013 by Jubilee Debt Campaign

Debt activists welcome Libertad back home, support Argentina’s right to refuse to pay vultures.

Jubilee Debt Campaign has placed a full-page advert in the Buenos Aires Herald today, congratulating Argentina on the return of their ship the Libertad which had been impounded in Ghana following a case brought by vulture fund Vulture funds
Vulture fund
Investment funds who buy, on the secondary markets and at a significant discount, bonds once emitted by countries that are having repayment difficulties, from investors who prefer to cut their losses and take what price they can get in order to unload the risk from their books. The Vulture Funds then pursue the issuing country for the full amount of the debt they have purchased, not hesitating to seek decisions before, usually, British or US courts where the law is favourable to creditors.
NML Capital. [1]

Jubilee Debt Campaign says Argentina is facing an economic war being waged against the country by ‘vulture funds’ who are in the process of securing court judgements which could force the country into another default. Debt campaigners say they support the refusal of Argentina’s government to pay the vulture funds, and condemn the New York court ruling of October 2012 which compels Argentina to repay these funds when they make a payment to other creditors. [2]

The next important stage of the court case, dubbed “the trial of the century” in sovereign debt Sovereign debt Government debts or debts guaranteed by the government. by The Financial Times for its fundamental implications for the whole system of debt payments, will take place on 27 February [3]. If the earlier judgement is confirmed, Argentina will face a choice of making unjust debt payments to vulture funds, in violation of domestic law, or being forced to default on payments to all creditors.

Campaigners believe significant sections of Argentina’s debt are illegitimate, including the debt ‘owed’ to the UK, which was used by the brutal military junta of the late 1970s to buy British weapons. They are calling for a debt audit which would identify such debts. [4]

Nick Dearden, Director of Jubilee Debt Campaign said:
“The vulture funds never ‘lent’ money to Argentina. They speculated on Argentina’s crisis, buying debt very cheap in the hope that the country would go bankrupt, and then refusing to join the vast majority of Argentina’s ’creditors’ in negotiating a reduction in the value of their debt."

“The US court judgement effectively says that the payment of vulture funds supersedes a state’s right to protect its people under international human rights law. If countries want to protect their right and duty to represent their people they must stand up against this bullying.”

For more information contact Nick Dearden on + 44 (0)207 324 4724 or + 44 (0)7932 335 464

In Argentina contact Beverly Keene, Jubilee South on +5411-43071867 // 15-55690140

Jubilee Debt Campaign UK is part of a global movement demanding freedom from the slavery of unjust debts and a new financial system that puts people first. For more information see

jubilee's ad


[1The advert appears on page 5 of the 11 January 2013 edition of the Buenos Aires Herald. It:
- Declares support for Argentina´s right to refuse to pay the vulture funds
- Condemns the decision of the New York Court which implies that the payment of vulture funds supersedes a state’s right to protect its people under international law.
- Calls for a debt audit in Argentina to ascertain the extent of illegitimate debt so that Argentina will no longer be forced to pay this odious debt
For a copy see:

[2Argentina defaulted on its debt at the end of 2001. It’s economy was in turmoil after following a set of policies laid down by the International Monetary Fund. Despite three years of recession, the economy kept contracting. Over half the population - 20 million people - was living below the poverty line. Default was undoubtedly the right thing to do. After several years of stagnation Argentina’s economy started growing within a few months. Argentina became the fastest growing economy in the Americas. Eleven million people were pulled out of poverty and unemployment more than halved in the successive 5 years.
After default, Argentina offered its bondholders a deal - new bonds of lower value in exchange for the old bonds they held. In effect a steep discount on the amount owed. Many took the offer, but not all. One of these companies - called NML Capital - is a subsidiary of Elliott Associates, a US hedge fund that pioneered ’vulture fund’ activity by winning a case against Peru in the 1990s, getting back 400% what they paid for Peru’s debt. NML has been harassing Argentina through foreign courts for years. A recent case involved the impounding of a naval vessel by a court in Ghana. The Libertad was recently released by an international tribunal and returned to Argentina on 9 January. In November 2012 a New York court ruled that Argentina was obliged to pay $1.3bn to NML. It ruled that if the state fails to pay this then it could not make payments on the debt Argentina restructured in 2005 and 2010 and would be judged to have defaulted anew. The ruling also binds the US banks which process the payments. It means such banks could only process payments if Argentina were also paying the vulture funds, something President Cristina Fernández de Kirchner has vowed not to do and which Argentina has a law against doing. The original ruling was to apply to the last debt repayment in December, but a reprieve was given, and a new court date has now been set for 27 February.

[4Last year Jubilee Debt Campaign uncovered documents which showed that Argentina still owes debts to the UK government based on arms sales to the Argentine junta in the years leading up to the Falklands War. Argentina’s £45 million restructured debt includes loans for two Type 42 Destroyers and two Lynx helicopter which were used in the invasion of the Falklands. The archives include a letter from then Foreign Secretary David Owen, showing the British government was keenly aware of the odious nature of the Argentina regime - describing it as ‘worse’ than Pinochet’s Chile - and that conflict over the Falkland Islands was possible. However, Owen states that “complete consistency in our approach” towards Argentina was not possible. The loans were run up by a government department called the Export Credits Guarantee Department - which has recently changed its name to UK Export Finance. The Liberal Democrats have a policy to audit all the debt owed to UK Export Finance and cancel those found to have come from “reckless loans to dictators known not to be committed to spending the funds on development”.

Other articles in English by Jubilee Debt Campaign (39)

0 | 10 | 20 | 30



8 rue Jonfosse
4000 - Liège- Belgique

00324 60 97 96 80