Argentina Appeals Against US Hedge Fund Ruling

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Argentina has appealed against a US court order forcing it to pay $1.3bn (£810m) to hedge funds holding debts from the country's 2001 default.

The economy minister in Buenos Aires said the US ruling was an "attack on sovereignty" as it filed an appeal in New York on Monday.

Last week, US district judge Thomas Griesa ordered Argentina to pay out $1.3bn to the tiny minority of bondholders who refused to sign up to a hard-fought writedown of its debts after the country's sovereign debt default a decade ago.

About 93% of bondholders agreed to a restructuring that gave them back about 30p in the pound, but some hedge fund creditors refused the deal and are pursing Argentina through courts across the world. Argentina has refused to pay the hedge funds, which it describes as "vultures".

The economic ministry said Griesa's ruling "shows ignorance of the laws passed by our Congress".

Earlier on Monday, investors holding $1bn-worth of restructured Argentine debt filed an emergency motion in a US court to also fight the ruling, which they fear could prevent payment on their bonds and lead to a fresh default.

They are concerned that if Argentina is forced to pay the so-called vulture funds it will reduce the amount of money the country has available to its other lenders, pushing it into a technical default on its existing $60bn of debts.

In his ruling last week, Griesa said: "Argentina owes this and owes it now."

"In accepting the exchange offers of 30 cents on the dollar, the exchange bondholders bargained for certainty and the avoidance of the burden and risk of litigating," he said. "Moreover, it is hardly an injustice to have legal rulings which, at long last, mean that Argentina must pay the debts which it owes. After 10 years of litigation this is a just result."

The judge made his ruling following claims led by Elliott Capital Management and Aurelius Capital Management.

Powered by Guardian.co.ukThis article was written by Rupert Neate, for guardian.co.uk on Tuesday 27th November 2012 09.40 Europe/London

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