U.S. judge says Argentina debt swap plan violates court order

jueves 3 de octubre de 2013 19:17 ART

By Nate Raymond

NEW YORK Oct 3 (Reuters) - Argentina's proposal to use a debt swap to pay some of its creditors would violate a U.S. court injunction, a judge in New York said on Thursday.

The order by U.S. District Judge Thomas Griesa came in response to a August proposal by Argentine President Cristina Fernandez that would enable her government to keep paying creditors who participated in restructurings after the country's $100 billion default in 2002.

Argentina's government proposed allowing a voluntary swap of foreign debt in exchange for bonds governed by local law after a U.S. appellate court ruling in August upholding an earlier Griesa decision requiring the country to pay $1.33 billion in favor of holdout bondholders.

Implementation of Fernandez's plan, or anything similar, would violate the earlier injunction, Griesa said in his order, which he said was issued "for the avoidance of doubt" over his court's position on Fernandez's plan.

The decision further muddies a case that could ultimately find itself at the U.S. Supreme Court and has created worries about a potential default by South America's second-largest economy.

During two restructurings in 2005 and 2010, holders of around 93 percent of Argentina's debt agreed to swap their bonds in deals giving them 25 cents to 29 cents on the dollar.

But bondholders who did not swap, led by hedge funds NML and Aurelius Capital Management, instead went to court in New York seeking payment in full.

Argentina has called the so-called holdout bondholders vultures and has vowed not to pay them.   Continuación...