Argentina rebuffs US court over debt ruling

Economy ministry says it will appeal US court ruling ordering Argentina to pay defaulted bonds in full.

    Argentina rebuffs US court over debt ruling
    The Economy Ministry said Argentina will take the fight to the US Supreme Court if necessary [Reuters]

    Argentina will appeal a US judge's ruling ordering it to pay $1.33bn to investment funds holding bonds that the country defaulted on in 2001, the economy ministry has said. 

    "We will file an appeal Monday before the court," Hernan Lorenzino, the economy minister, said at a news conference on Thursday.

    "We do not think it is right or legitimate to pay vulture funds," he said.

    "It goes above the laws and sovereignty of Argentina and affects the international financial system"

    - Hernan Lorenzino, Minister of Economy 

    On Wednesday, US District Judge Thomas Griesa ordered Argentina to pay holders of the original defaulted bonds in full - about $1.33bn - next month when interest payments are due to holders of its restructured debt.

    "Argentina owes this and owes it now," Griesa said in his ruling. 

    US District Judge Thomas Griesa also barred Argentina from paying other bondholders until it satisfies this judgment, putting Argentina president Cristina Fernandez in a difficult position: if she does not reverse her longstanding position and pay up, she risks triggering another historic Argentine debt default, this time totalling more than $20bn.

    Argentina, which took the controversial step of defaulting on $100bn in debt in 2001, has since restructured its debt twice.

    NML Capital Limited, a Cayman Islands-based investment fund, and other creditors did not accept bond swaps conducted by the Argentine government in 2005 and 2010 and went to court to demand payment of interest on securities in default.

    At the time payments were stopped, NML Capital Limited held about $170 million in bonds, while another firm, EM Limited, held some $700 million.

    Lorenzino said Argentina would fight the order to pay all the way to the US Supreme Court if necessary.

    At the same time, he attacked Judge Griesa's ruling as "judicial colonialism."

    "It goes above the laws and sovereignty of Argentina and affects the international financial system," he said.

    SOURCE: Agencies


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