June 18 Argentina's debt prices fell again on
Wednesday, as investors reacted to the South American nation's
newest proposal to place its restructured debt under local law
after a series of adverse U.S. court rulings.
Economy Minister Axel Kicillof said on Tuesday that the
country is taking steps to swap bonds governed by U.S. law for
those governed by Argentine law so they would not be subject to
U.S. courts that have made paying existing bondholders more
The U.S. denominated discount bonds due in 2033
fell more than two points in price to 71.33 cents,
boosting its yield to 12.67 percent, according to Thomson
The spreads on Argentina's portion of JP Morgan's emerging
market bond index widened by 0.49 percentage point to yield 9.22
percentage points more than U.S. Treasuries.
The U.S. Supreme Court declined on Monday to hear an appeal
by Argentina in its battle against hedge funds who refused to
take part in its debt restructuring after its catastrophic
2001-02 default. This left a lower court ruling intact ordering
it to pay them $1.33 billion, which Argentina has vowed not to
But the ruling stipulates that Argentina must pay these
holdouts at the same time as the restructured bondholders, who
are due a payment by June 30. If a resolution is not found
before then, Argentina would be barred by the U.S. court
decision from making payments, pushing the country into
technical default 12 years after its devastating debt crisis.
Kicillof said Argentina would also get its lawyers to speak
with U.S. District Judge Thomas Griesa, in a last-ditch attempt
to negotiate a solution to its dispute with hedge funds.
(Reporting By David Gaffen; Editing by Chizu Nomiyama)