BUENOS AIRES: Argentina’s Congress on Thursday passed a new debt bill designed to enable the government to resume debt payments to bondholders in defiance of a US court ruling which tipped the country back into default.
President Cristina Fernandez’s leftist government is in a race against the clock to make a $200 million coupon payment due on Sept.
30 to prevent the default spreading across bond series, which could raise the risk of investors calling for immediate payment on the principal value of their bonds.
But she needs to route the funds through channels beyond the reach of the US judge who ruled that Argentina must settle a legal fight with a group of New York hedge funds over unpaid debt from a massive 2002 default before servicing its performing debt.
After an overnight debate, the legislature’s lower house passed the bill under which the government could make payments on an estimated $29 billion in foreign-held bonds either in Argentina or elsewhere out of US jurisdiction.