Argentina’s president told a national television audience late Monday that the country would not abide by U.S. court rulings ordering payment of $1.3 billion to disgruntled creditors whose long-running legal battle against the nation received a boost from the U.S. Supreme Court earlier in the day.

In a defiant address, President Cristina Fernández de Kirchner called the court orders “extortion.” But she said her country will continue making payments to holders of its restructured debt.

“We want to fulfill and honor our debt, and we will do that,” she said, according to Reuters news service. “I ordered the economy ministry to set up all the tools needed to make the payment to those who trusted in Argentina.”  

On Monday, the U.S. Supreme Court declined to consider Argentina’s appeal of a U.S. court of appeals order that the country pay bondholders who had refused to accept Argentina’s debt restructuring following a 2001 default. Argentina’s stock market plummeted after the court action was announced on fears of another national default, which Argentine officials had said might occur if they had to pay the debts in full.  

The Supreme Court actions Monday provided a legal victory for hedge fund billionaire Paul Singer and other investors who had pursued litigation against Argentina, insisting that it could afford to pay its obligations and was failing to comply with legal obligations.

The high court left in place an appeals court ruling ordering Argentina to pay the original creditors before paying those who accepted restructured terms after the 2001 default. Argentine officials have said the country cannot afford to pay both sets of bondholders and had warned that paying the holdouts in full would mean a “serious and imminent risk of default.” Some independent analysts have been skeptical of Argentina’s claim that it can’t pay.  

In a related ruling, the Supreme Court said that banks must comply with requests for information from the debtholders. Taken together, the decisions caused stocks to fall about 10 percent in Argentina, along with a 7 percent drop in bonds. Even after Monday evening’s presidential address, it was not clear how precisely Argentina would respond to the situation.  

Fernández  said in her televised speech that the Supreme Court damaged the interests of Argentina and the 92 percent of creditors who had agreed with past debt-restructuring proposals. She said she was willing to negotiate, but added, according to an Associated Press report, “What I cannot do as president is submit the country to such extortion.”

The Supreme Court action set off a spirited round in an ongoing debate about the effect of hedge funds and other investors who push poorer countries to repay their debts.

A spokesman for the leading plaintiffs, Singer’s NML Capital, said in a statement that “America’s highest Court has spoken. Now it is time for Argentina to honor its commitments to its creditors, which would benefit both Argentina’s economy and its international standing.”

Some of Argentina’s allies in the years-long legal action offered emotional and angry reactions.

“For heavily indebted countries trying to support extremely poor people, this is a devastating blow,” said Eric LeCompte, executive director of the religious anti-
poverty organization Jubilee USA. He said the court’s decision threatened a bipartisan understanding that the world’s poorest countries need to have their debt burdens relieved.

The U.S. Court of Appeals for the 2nd Circuit ruled last year that Argentina breached a contractual obligation to treat all bondholders equally. The court rejected Argentina’s request for further review of that decision.

Hedge fund bondholders and their allies argue that they provide a service by identifying how much money is siphoned away from citizens of poor countries through corruption. The effort to learn about the location and status of sovereign assets was the subject of one of the court’s actions Monday.

In a 7-to-1 ruling, the court found that two banks must turn over information to investors about assets that Argentina holds worldwide.

Singer’s hedge fund filed the case, saying it needed information from the banks in order to collect $1.5 billion it won in cases against Argentina. NML sought data from Bank of America and state-owned Banco de la Nación Argentina, which has a branch in New York, about accounts held by Argentine government entities and by indvidual officials.

Argentina argued that it was protected from providing the information by the Foreign Sovereign Immunities Act, which limits lawsuits in U.S. courts against foreign countries. Argentina’s lawyers also argued that if a creditor could not ultimately execute a judgment against certain property, then it had no right to obtain information about it.

But the court, in an opinion by Justice Antonin Scalia, disagreed. “The reason for these subpoenas is that NML does not yet know what property Argentina has and where it is, let alone whether it is executable under the relevant jurisdiction’s law.”

Scalia said the justices did not have to decide what would happen if the assets were beyond the jurisdiction of a U.S. court. He said that would be the work of a district judge after discovery was completed.

Justice Ruth Bader Ginsburg was the lone dissenter. “By what authorization does a court in the United States become a ‘clearinghouse for information’ about any and all property held by Argentina abroad?” she asked.

Justice Sonia Sotomayor did not participate in either Argentina case. As is customary, she gave no reason for her recusal, but both of the long-running cases arise from the court on which she previously served, the U.S. Court of Appeals for 2nd Circuit in New York. Sotomayor has visited Argentina and met with its president, who had previously denounced Singer and others as “vulture investors.”

The country’s international reserves, which it uses to pay creditors, have fallen by nearly 45 percent to just over $28 billion since late 2011. While Argentina would be forced to pay out less than $2 billion as part of the ruling, the decision could create a domino effect in which other bondholders are inspired to raise similar claims.

At the very least, the ruling is likely to force Argentina to the negotiating table. “One option is to simply say that they aren’t going to honor them, that they have no intention of paying,” said Steve Hanke, a Johns Hopkins University economics professor. “But the highest probability is some kind of negotiation.”

Robert Barnes contributed to this report.