Argentina said on Tuesday that it had started to take steps to circumvent a United States court order to avoid a technical default.
Axel Kicillof, the economy minister, said the government would pay bondholders of restructured debt under Argentine legislation. “We are taking the first steps to pay the debt in Argentina,” he said.
A majority of bondholders from Argentina’s $95 billion default in 2001 entered into debt exchanges in 2005 and 2010, taking haircuts of about 70 percent. But a small percentage of what Mr. Kicillof refers to as “vulture funds” have held out for full payment.
On Monday, the United States Supreme Court rejected an appeal from Argentina over a ruling that obliges it to pay the holdouts and the holders of restructured debt at the same time.
Mr. Kicillof said the order, which forces Argentina to pay around $1.3 billion to the litigating holdouts, would be applied more widely. That, he said, meant the country would owe a total of $15 billion.
“It would set off a chain of payments that are unpayable,” he said. “It would push us into a default.”
The economy minister echoed the defiant comments of President Cristina Fernández de Kirchner, who said on Monday that “Argentina has no reason to be submitted to this kind of extortion.”
Mr. Kicillof accused the holdout creditors of wanting “to ruin our restructuring. The vultures are vultures because they do not negotiate.”
“We will impede them,” he said.
Despite the bold declarations, Argentina will most likely find it hard to evade the ruling of the United States courts. The large international banks that handle bond payments have already stated that they will not do anything that could put them in contempt of the American courts.
Dollar payments, even those handled by foreign banks, typically end up being routed through New York, making such flows also vulnerable to the United States courts.
“Even if Argentina is willing to behave like an international pariah, it’s got to find financial intermediaries who are not subject to the court’s reach,” said Mark Weidemaier, an associate professor of law at the University of North Carolina at Chapel Hill. “I have yet to hear the details of any plan that would effectively get around the injunction.”
Mr. Kicillof’s comments that the government was working on plans to pay the exchange bonds under local law may also present challenges. It is not clear how the bondholders would get their money out of Argentina without using third-party foreign banks that have already made it clear that they will obey the United States ruling. Argentina might try to change the terms of the bonds to make payments in its own currency, the peso, but the exchange bondholders might oppose such a change.
“It would be very difficult to find banks who would be willing to participate in a scheme to violate the U.S. court’s order,” said Joshua Rosner of Graham Fisher & Company, in New York.
Still, some legal specialists have said there might be a sliver of room for maneuvering. They note that the United States court ruling does not explicitly aim at the holders of the exchange bonds. As a result, if those investors were somehow able to get their money without using large international institutions, the American courts and the hedge funds might not, in fact, go after the exchange bondholders.
More risky for Argentina is that any attempt to circumvent the court order could prevent Argentina from regaining access to the global lending markets from which it has been locked out since the 2001 default.
The country’s foreign reserves have fallen to critically low levels. They have plunged from $53 billion in 2011 to just $29 billion today. That forced the government to devalue the peso, Argentina’s currency, by nearly 19 percent in January.
On Tuesday, the ratings agency Standard & Poor’s cut its rating on Argentina another two notches to triple C–, citing an increased risk of a default.