Argentina Won’t Make June 30 Debt Payment After Ruling

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By Camila Russo

 Argentina said it’s “impossible” for it to make a June 30 bond payment as a court order that bans servicing restructured debt without paying defaulted notes goes into effect.

Argentina “regrets” the decision today by a federal appeals court in New York to lift a delay on an order for the country to pay the defaulted debt, according to a statement from the Economy Ministry. President Cristina Fernandez de Kirchner said in a June 16 speech that paying back so-called holdout creditors would cost $15 billion and push the country to default, as the amount represents more than half its international reserves.

The lifting of the stay shows “unwillingness to negotiate different terms” from U.S. District Court Judge Thomas Griesa’s ruling, which calls for Argentina to pay $1.3 billion to the defaulted bondholders, the Economy Ministry said. Argentina’s lawyer said in court today that government officials will travel to New York next week to reach an agreement with the holdouts, including billionaire Paul Singer, who are demanding full payment on their bonds.

Argentina reiterated in today’s statement its willingness to pay creditors under local laws.

Argentina has a 30-day grace period after missing any payment before a default would be declared.

To contact the reporter on this story: Camila Russo in Buenos Aires at [email protected]

To contact the editors responsible for this story: Brendan Walsh at [email protected] Robert Jameson

 

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