BUENOS AIRES (AFP) – Argentina’s congress will likely pass Wednesday a measure aimed at side-stepping a US court order that has blocked the country from paying back debt tied up in a feud with hedge funds.
The lower house will vote on legislation approved by the Senate last week that would move the repayment location from New York to either Buenos Aires or Paris.
It is the latest move by President Cristina Kirchner’s administration in a legal tussle with holdout creditors that have refused to join a restructuring deal following Argentina’s 2001 default on $100 billion in debts.
Under the deal, 93 per cent of the country’s creditors have accepted a cut of 70 per cent of the face value of their Argentine holds.
But two foreign hedge funds, NML Capital of US billionaire Paul Singer and US-based Aurelius Capital Management, have refused to accept the write-down on $1.3 billion owed to them and won a court battle that led to a new Argentine default in July.
A New York judge, Thomas Griesa, has ordered Argentina to pay the funds in full and prevented the country from repaying its other creditors until it fulfills the requirement.
To pressure the government, Griesa has frozen $539 million that Buenos Aires deposited at the Bank of New York Mellon (BoNY) to pay the bond holders that accepted debt restructuring deals in 2005 and 2010.