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Argentina says will pay all creditors in Buenos Aires to get around US judge's ruling on its debt

Published on Aug 21, 2014 2:00 AM
 
Argentina's Economy Minister Axel Kicillof gestures as he speaks during a news conference in Buenos Aires on August 20, 2014. President Cristina Kirchner 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 US 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 US$539 million (S$674 million) owed to holders of debt issued under US legislation that was restructured after the country's record 2002 default. -- PHOTO: REUTERS

BUENOS AIRES (AFP) - Argentina said Wednesday it will pay all its creditors in Buenos Aires, seeking to circumvent a US court order barring it from repaying the debt it restructured after its 2001 default.

The move aims to work around US District Court Judge Thomas Griesa's ruling in favour of two hedge funds that refuse to accept a write-down, which has blocked Argentina from servicing its restructured debt and forced it into a new default.

But it is unlikely to resolve the country's dispute with the two American hedge funds, NML Capital and Aurelius Capital Management, which Argentina calls "vulture funds" for buying up its defaulted bonds at pennies on the dollar and suing for full payment of US$1.3 billion (S$1.6 billion).

Under the plan, which President Cristina Kirchner has sent to congress for approval, Argentina would replace Bank of New York Mellon, the bank responsible for transferring its debt payments to creditors, with Argentine state-run Banco Nacion Trust.

 
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