'A US default would have had delicate consequences on global economies,' Gov't says

Economy Minister Amado Boudou referred to the USbdebt deal, which was agreed upon late on Sunday to avoid the country entering default. He also ratified that the Government will pay US$ 2.20 billion corresponding to Boden 2012 bond payments.

“It is always good when jolts don’t happen. I remember the implosion that Argentina went through when then President Adolfo Rodríguez Saá announced the country had entered default,” Boudou said. “If the US had entered default, that would have have delicate consequences in the rest of the World’s economy, therefore the debt deal is important.”

Regarding to the payment of Boden 2012 bonds, President Cristina Fernández de Kirchner’s running mate said that “we’ll pay the next to last instalment on Wednesday with the Excedent Reserve Funds”

Boden 2012 bonds were issued in 2002 and were handed to those who had accounts in foreign currency, in a ten year period and 8 annual payments. Wednesday’s will be the next to last payment. The last one will expire on August 2012.

Boudou predicted that there will be a strong reinvestment of the funds that the Government will assign for the payment. “As years went by, and thanks to the good market conditions, most of the Boden 2012 leaned towards the institutional sector and is largely held in private hands,” sources said.