NEW YORK (AP) — A judge Thursday denied Argentina's request to extend deadlines to repay a $1.65 billion debt to U.S. hedge funds, leaving the nation few options and little time to meet a Monday deadline to make a required payment to the majority of its creditors.
U.S. District Judge Thomas Griesa said Argentina's request was "not appropriate" because the requirement to pay U.S. hedge funds involved in the Manhattan litigation was only triggered if Argentina makes a payment to bondholders who exchanged their bonds for bonds of lesser value in the years after Argentina's economy collapsed in 2001.
Argentina's economy minister, Axel Kicillof, said Thursday that Argentina has taken steps to pay $832 million owed by Monday to creditors who participated in debt swaps in 2005 and 2010.
"Not paying while having the resources and forcing a voluntary default is something that is not contemplated in Argentine law," Kicillof said. "It would be a clear violation of the debt prospects."
If Argentina does not also pay the U.S. bondholders who refused to join the debt swaps, the ruling bars it from using the U.S. financial system to pay other bondholders.
Robert A. Cohen, a lawyer for the U.S. hedge funds, told Griesa in a letter Thursday that Kicillof's announcement was a "brazen step in violation of this court's orders and it warrants a swift and decisive response."
Cohen said the plaintiffs in the New York court case brought by the U.S. hedge funds against Argentina had contacted Bank of New York Mellon to remind it that it was not permitted to let Argentina forward money to bondholders who accepted the debt swaps. He said the plaintiffs acted after Kiciloff announced that $539 million of the $832 million payment had been deposited at the bank.