BUENOS AIRES, Feb 11 (Reuters) - Argentina will file a petition seeking U.S. Supreme Court review of a court order requiring it to pay $1.33 billion to 'holdout' bondholders at the deadline next week, said state news agency Telam late Monday.
Argentina must file its appeal by Monday Feb. 17, the day on which Telam said the petition would be presented.
However, the U.S. Supreme Court is closed on Feb. 17 for the Presidents Day holiday, and a deadline that falls on a federal holiday moves to the next day under court procedure.
The expected filing will be made via U.S. lawyer Paul Clement. One of the best-known lawyers in the United States and a solicitor general under President George W. Bush, he is seen as a potential candidate to fill a Supreme Court vacancy if a Republican becomes president in 2017.
When contacted by Reuters, Clement and the Argentine Economy Ministry declined to comment on the date the petition would be filed.
Telam's report on the filing to the court cited sources close to the government's Debt Restructuring Unit. The unit also declined comment on the Telam report.
The closely watched litigation has triggered concerns about a potential new debt crisis in Argentina, as well as worries that it may set a precedent for other future sovereign debt restructures.
The bondholders- called "vulture funds" by Argentine President Cristina Fernandez - refused to participate in two debt restructurings spinning out of the country's $100 billion 2002 default.
Most creditors agreed to participate in debt swaps in 2005 and 2010 which gave them 25 to 29 cents on the dollar.
But, led by the hedge funds NML Capital Ltd, which is a unit of Paul Singer's Elliott Management Corp, and Aurelius Capital Management, the holdout bondholders are demanding payment in full.
In November 2012, U.S. District Judge Thomas Griesa issued an order requiring Argentina to pay $1.33 billion into a court-controlled escrow account favoring the holdout creditors.
Fernandez has said her government will continue to pay the restructured debt, but will never pay more to the holdouts.
That could result in U.S. courts enforcing injunctions blocking payment overseas to those bondholders who participated in the prior restructurings, possibly causing a new default.
The 2nd U.S. Circuit Court of Appeals in New York denied a petition by Argentina for rehearing in November 2013, setting the stage for Argentina to take its appeal to the U.S. top court.
The Supreme Court likely will not decide whether to hear the case until later in the year. If the justices do agree to hear the case, they are unlikely to hear oral arguments and issue a ruling until the court's new term begins in October 2014.
The U.S. Supreme Court previously declined to hear an earlier appeal by Argentina in October, considered premature by analysts as lower court appeals were still unresolved.
The Argentine government is in desperate need of good news - and dollars. South America's third-largest economy is facing its second major economic crisis in little more than a decade. Reserves are falling, the currency is volatile and inflation is rising fast.
So Buenos Aires is eager to regain access to the international capital markets from which it has been shut out since the 2002 default.
In recent months, the Fernandez government's hardline anti-market stance has softened, with signs of flexibility in dealing with the International Monetary Fund.
It is also negotiating the repayment of $9.5 billion it owes the Paris Club of creditor nations.