Argentine President Cristina Fernandez de Kirchner speaks during ‘ government (/ AFP / Archives Daniel Garcia) conference in Buenos Aires, July 31, 2014
Argentina changes strategy: debt repayments transiting the United States being blocked by American justice, President Cristina Kirchner will now offer to repay private creditors in Buenos Aires.
The Argentine government has sent to Congress a bill which aims to spread the payment of debt maturities of the financial center of New York to that of Buenos Aires.
“To save the payment to creditors who accepted the debt restructurings in 2005 and 2010 (Public Bank) Banco Nacion has been designated replacement Bank of New York Mellon, without prejudging what will decide bondholders. It is a measure based on volunteerism, “said the Argentine president.
” The bearer may choose to voluntarily change their labels abroad for securities issued under Argentine law titles ” has she told a radio-television address from the presidential palace.
The final repayment of Argentina’s debt to private creditors $ 539 million, has been blocked since June 26 on a account Bank of New York, on the decision of the American judge Thomas Griesa.
Argentina has been condemned by the American courts to pay $ 1.3 billion to funds “vultures” who hold less one percent of the debt, but she refuses, arguing that the application of judgment would collapse the debt restructuring approved by 93% of creditors.
For a considerable reduction of its public debt after the 2001 economic crisis (a discount of about 70%), Buenos Aires offered its creditors to make the payment of debt maturity on accounts in the USA, as collateral.
The conflict between Argentina and a handful of funds “vultures” conducted by NML and Aurelius Capital Management lasts for years.
The legal victory hedge funds, upheld by the Supreme Court United States, was followed by a phase of trading in New York fell through. Argentine and international banks, then tried to redeem the debt funds “vultures”, without success.
Cristina Kirchner has again accused the judge Griesa uttering an “illegal judgment the exclusive benefit of vulture funds. “
According to the judgment, the ECO fund should reach more than $ 800 million for an initial investment of $ 50 million in 2008, when the funds of the Republican billionaire Paul Singer repurchased debt Argentine at deflated prices.
Declared in “selective default” by rating agencies Standard and Poor’s and Moody’s, Argentina denies this qualification.
Seeking to prove its solvency and willingness to pay its debts, Argentina last week paid $ 3 billion to the World Bank and the Inter-American Development Bank.
Cristina Kirchner, the second and final term which ends in late 2015, said the proposal to pay the debt maturities in Argentina was also valid for 7% of “holdouts”, creditors who have so far refused restructurings 2005 , 2010.
If the bill is passed, the next debt maturity of $ 200 million, will be paid on September 30 creditors through Banco Nacion.
The project has a good chance of being voted as the left coalition of Mrs. Kirchner center, the Front for Victory (FPV) has a majority in the Chamber of Deputies and the Senate.
Last week, holders of European bonds have appealed against the judgment of Judge Griesa, asking him to release the funds they needed cash since late June, saying it does not have jurisdiction with respect to their holdings and their refunds can be frozen.
Buenos Aires lodged a complaint against the United States before the International Court of Justice (ICJ) in The Hague, the highest court of the UN, which Washington does not recognize the <"news-copyright" p class = onclick = "$ (this) .getNext () toggleClass ('hide')."> authority
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