Argentine president: Country will avoid debt default

GMT 22:05 2014 Monday ,16 June

Arab Today, arab today Argentine president: Country will avoid debt default

Argentine president: Country will avoid debt default
Buenos Aires - AFP

President Cristina Kirchner said there would be no default in payment of Argentina's restructured debt, after a US Supreme Court ruling piled pressure on the country's finances.
Kirchner also lashed out at efforts at "extortion" in the wake of the court ruling, which turned back Argentina's appeals against paying at least $1.3 billion to hedge fund investors in its defaulted bonds.
"Argentina has shown a more than clear will to pay, but there is a difference between negotiation and extortion," Kirchner said on Monday in a nationally televised address.
Admitting the US Supreme Court ruling was "worrisome," Kirchner said the ruling was "against the interest of 92 percent of the bondholders."
Buenos Aires had argued in court that a ruling for the hedge funds would force it back into default on its debt.
The court dismissed two challenges by Argentina.
One was on whether it had to repayNML Capital and other hedge funds that had refused to participate in a restructuring deal for debt on which Buenos Aires defaulted in 2001 the full value of their bonds while repaying the exchange bondholders much less.
The exchange bondholders were those who joined a 2005 and 2010 restructuring deal.
The second was on whether Argentina is protected under US law from creditors seeking information on Argentine government assets in and outside the United States, in case they seek to seize those assets.
On May 29, Argentina, fighting to stabilize its economy, obtained a deal to clear nearly $10 billion in debt arrears from official creditors in The Paris Club.
But analysts see Argentina's handling of the hedge fund problem as far more significant in terms of whether Buenos Aires might be moving toward greater reliability.
At the end of April, in the first of two US Supreme Court reviews of a dispute with hedge funds, Argentina argued that holders of its defaulted bonds have no right to pursue government assets.
Lawyers for Argentina argued that the government's official assets around the world were protected by sovereign immunity, and as well by the US Foreign Sovereign Immunities Act (FSIA).
But lawyers for the hedge funds, which have won several lower court rounds to compel Buenos Aires to pay up on the bonds, say they have the right to track down assets, such as those held in banks, as they try to recoup their investments.

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