Argentina says to bring defaulted debt under national law
President Cristina Fernandez on Tuesday unveiled legislation that seeks to push bondholders to swap defaulted debt for new notes governed by Argentine law, a move aimed at skirting a U.S. ruling that prevented her government from paying its creditors.
Argentina slid into default last month after a New York court blocked an interest payment of $539 million owed to holders of debt issued under U.S. legislation that was restructured after the country’s record 2002 default.
Fernandez has argued Argentina is not in default and has consistently labeled the adverse U.S. court rulings an attack on Argentine sovereignty.
A prolonged debt crisis is seen deepening the country’s economic recession, weakening the ailing currency and sapping thin foreign currency reserves.
The debt saga has strained already difficult relations with the United States.
“Argentina could end up in contempt,” said Alejo Costa, strategy chief at local investment bank Puente in Buenos Aires.
Source: Reuters
