Argentina vows to service debt despite new legal blow

Mon Jun 16, 2014 11:46pm EDT
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By Lawrence Hurley and Sarah Marsh

WASHINGTON/BUENOS AIRES (Reuters) - President Cristina Fernandez vowed on Monday to find a way to service Argentina's restructured debt despite suffering a major setback in a long legal battle against "holdout" investors that pushed the country closer to a new default.

Hours after the U.S. Supreme Court refused to hear an Argentine appeal aimed at staving off a default, a defiant Fernandez slammed U.S. courts for repeatedly ruling against her government.

She also said Argentina was the victim of "extortion" by holdouts who refused to join debt restructuring deals since the catastrophic 2001-02 default on $100 billion of sovereign debt.

But Fernandez said she was still open to negotiations and insisted she would continue to pay the more than 90 percent of creditors who accepted a renegotiation of the defaulted debt.

"Argentina will fulfill its obligations and it will not default on its restructured debt," she said in a televised speech.

She gave no details on how it would manage that, however, saying only that she had told her economy minister to set up "all the tools needed to make the payment to those who trusted in Argentina."

The Supreme Court's unexpected refusal to hear Argentina's appeal left intact lower court rulings that ordered it to pay holdout hedge funds $1.33 billion.

Argentina has so far refused to pay the holdout investors unless they also agree to a restructuring of the debt.   Continued...

Argentina's President Cristina Fernandez de Kirchner addresses the 68th United Nations General Assembly at U.N. headquarters in New York, September 24, 2013. REUTERS/Eduardo Munoz