"We want to pay 100 percent of creditors," Fernandez said in a speech that boosted hopes of a settlement to the legal battle between her government and "holdout" investors who are demanding full payment following Argentina's massive 2002 bond default.

Argentina's financial markets were closed for a holiday, but international bond spreads, which measure default risk, tightened sharply after she spoke.

The country is locked in a 12-year-old fight in U.S. courts with the creditors who refused to accept a 2005 and 2010 revamp of debt securities.

More than 90 percent of creditors accepted the restructurings, which left them with less than a third of the original value of their bonds. But the holdouts demanded full payment and won a series of U.S. court rulings that have brought Argentina to the verge of a new default.