BUENOS AIRES Aug 5 Argentina said on Tuesday it
will formally demand that intermediary banks charged with
delivering the country's debt payments make hundreds of millions
of dollars in payouts that were due in June but that have been
blocked by a U.S. court.
Argentina defaulted last week after losing a long legal
battle with hedge funds that rejected the terms of debt
restructurings in 2005 and 2010.
The government deposited payments owed to holders of its
restructured bonds with intermediaries Citibank Argentina and
Bank of New York Mellon.
U.S. District Judge Thomas Griesa said the deposits were
illegal because he had ordered Argentina not to pay restructured
bondholders without paying the holdouts at the same time.
The economy ministry late on Tuesday issued a statement
saying it will formally demand that Bank of New York Mellon
and Citibank Argentina make the payouts despite
"The money belongs to the holders of restructured Argentine
bonds," the statement said.
The economically ailing South American country defaulted on
about $100 billion on sovereign bonds in 2002. Most holders of
those bonds accepted less than 30 cents on the dollar in the
2005 and 2010 restructurings. A minority of holders opted to sue
in the U.S. courts for full repayment.
Griesa stepped in on Monday to defend the mediator he
appointed to help settle the dispute after Argentina accused the
go-between of bias.
The country's gross domestic product is expected to shrink
this year, according to the United Nation's body for Latin
America, as fallout from the debt crisis keeps the region's No.
3 economy out of foreign debt markets.
(Reporting by Walter Bianchi, Hugh Bronstein and Daniel Bases;
Editing by Ken Wills)