A Connecticut hedge fund is waging a campaign to make Peru pay off land bonds it defaulted on two decades ago, echoing financial firms’ tactics in recent years in Argentina, Greece and Iceland.

About a decade ago, Gramercy Funds Management LLC began buying agrarian bonds held mostly by Peruvians who received them when their family farms were expropriated by the government in the 1960s. Gramercy bought about 20% of the bonds at a fraction of their face value and now says it is owed more than $1 billion, according to people familiar with the matter.

The government disputes that figure, and successive administrations have ignored Peruvian court orders to pay up. At issue is how to adjust bondholder claims for decades of inflation and missed interest payments, with bondholders saying they are owed about $5 billion and the government calculating a far lower sum. Peru stopped paying on the bonds by 1992 in the aftermath of the Latin American debt crisis…

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