“We are prepared to do as the judge asked and meet continuously with Argentina and the Special Master to resolve this dispute. We are confident this matter could be resolved quickly if Argentina would join us in settlement discussions,” an NML spokesman said in a statement.
However, analysts said the default is still a likely outcome. Argentine CDS widened further on Tuesday, trading at upfront levels of 37 after a steady rise from a recent low of 21 earlier this month.
“Judge Griesa’s refusal today to grant the Argentine government a stay in the ongoing debt dispute means that it is increasingly likely that the authorities will default on 30th July. Default is another headwind that will prevent a quick recovery from the ongoing recession,” Capital Economics analysts said in a note.
“But the good news is that a meltdown akin to that in 2002, when GDP contracted by almost 11%, seems unlikely.”
Even if Argentina is in better economic shape than when it last defaulted, a new default would have a lasting impact on the country’s ailing economy, said Claudio Loser, who heads the Centennial Group Latin America.
"If no agreement is reached and there is a default, some people would say that when there is a new government by the end of next year, things would move … But that would take time, and the damage of not finding a solution now will continue through certainly the early part of any new government," he said in a media call on Monday. LF