Fernandez says Argentina will not default on restructured debt

President of Argentina, Cristina Fernandez de Kirchner.
Charly Diaz Azcue | LatinContent | Getty Images

President Cristina Fernandez said on Monday that Argentina would honor its payments to holders of its restructured debt and to avoid a default despite suffering a setback in its long-running legal battle against "holdout" investors.

The U.S. Supreme Court earlier on Monday declined to hear Argentina's appeal over its battle with hedge funds that refused to take part in its debt restructurings. The court's decision was unexpected and risks toppling Latin America's No 3 economy into a new default.

"We want to fulfill and honor our debt and we will do that ... I ordered the economy ministry to set up all the tools needed to make the payment to those who trusted in Argentina," Fernandez said in a televised speech, although she did not say how her government would do it.