Argentina's Congress has approved legislation to restructure the country's debt and sidestep a US court ruling that recently pushed the government into its second default in 13 years.
After a 16-hour debate, the lower house of Congress voted 134-99 in favour of the bill early on Thursday. The measure had already passed the Senate, and President Cristina Fernández de Kirchner formally enacted it later in the day, calling it a "historic event".
"Argentina wants to pay, can pay and is going to pay all its debts to all bondholders," Fernández said. The measure would let Argentina's government pay bondholders locally to skirt the US financial system, which is bound by the US court order restricting Argentina's repayments.
Argentina settled most of its debt with creditors after its 2001 default by trading lower-value bonds for defaulted debt. But a group of holdouts refused to accept that deal and sought about $1.5bn (£0.6bn).
The government said it could not settle with the holdouts without offering similar terms to the others. US district judge Thomas P Griesa ruled that Argentina could not pay the other creditors until it settled with the holdouts.
That triggered a default when Argentina was prevented from paying $539m in interest due by 30 July, threatening to derail an economy already in recession and struggling with double-digit inflation.
Argentina's next debt deadline is 30 September, when the country must pay some $200m. The government sped up the approval of the law seeking to avoid defaulting on those bonds.
The new measure allows creditors abroad to exchange their bonds for new ones under local legislation, and it encourages investors to move their Argentinian debt from the US to Argentina or France through a swap.
theguardian.com
After a 16-hour debate, the lower house of Congress voted 134-99 in favour of the bill early on Thursday. The measure had already passed the Senate, and President Cristina Fernández de Kirchner formally enacted it later in the day, calling it a "historic event".
"Argentina wants to pay, can pay and is going to pay all its debts to all bondholders," Fernández said. The measure would let Argentina's government pay bondholders locally to skirt the US financial system, which is bound by the US court order restricting Argentina's repayments.
Argentina settled most of its debt with creditors after its 2001 default by trading lower-value bonds for defaulted debt. But a group of holdouts refused to accept that deal and sought about $1.5bn (£0.6bn).
The government said it could not settle with the holdouts without offering similar terms to the others. US district judge Thomas P Griesa ruled that Argentina could not pay the other creditors until it settled with the holdouts.
That triggered a default when Argentina was prevented from paying $539m in interest due by 30 July, threatening to derail an economy already in recession and struggling with double-digit inflation.
Argentina's next debt deadline is 30 September, when the country must pay some $200m. The government sped up the approval of the law seeking to avoid defaulting on those bonds.
The new measure allows creditors abroad to exchange their bonds for new ones under local legislation, and it encourages investors to move their Argentinian debt from the US to Argentina or France through a swap.
theguardian.com
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