BUENOS AIRES Aug 19 President Cristina
Fernandez said on Tuesday her government will move to service
its defaulted debt in Argentina or allow bondholders to swap
their bonds for new bonds governed by national law in order to
get around a U.S. court order.
Argentina slid into default last month after a New York court
blocked an interest payment owed to holders of debt that was
restructured after the country's record 2002 default. The judge
said Argentina could not pay that debt until it had also settled
with a group of funds that had rejected the restructuring deal
and were demanding full payment.
Fernandez's announcement killed hopes that Argentina might
soon reach a deal with holdouts, enabling it to exit default.
In a televised speech, Fernandez said her government would
send a bill to Congress to remove Bank of New York Mellon as the
exchange bondholders' trustee and replace it with Argentina's
Banco Nacion. Banco Nacion would open up an account at the
country's central bank to enable Argentina to service its
exchange debt there.
Under the proposal, holders of bonds resulting from the 2005
and 2010 debt restructurings could also choose to swap their
bonds for notes with "identical terms and financial conditions,
and with equal nominal value" under Argentine law.
(Reporting by Sarah Marsh and Walter Bianchi; Editing by Kieran
Murray and Ken Wills)