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NY appeals court stays Argentina debt ruling
Wednesday - 11/28/2012, 6:09pm EST
NEW YORK (AP) - A federal appeals court on Wednesday gave Argentina breathing room in its billion-dollar debt showdown, indefinitely suspending a lower court judge's ruling that threatened to push the country into default.
The one-page order by the appeals court sets a Feb. 27 date for arguments in the case, averting a Dec. 15 deadline for a $1.3 billion payment that Argentina has refused to make despite losing its case in federal court against NML Capital Ltd., an investment fund that specializes in suing over unpaid sovereign debts.
The 2nd U.S. Circuit Court of Appeals stayed a ruling by Judge Thomas Griesa that ordered the government of President Cristina Fernandez to pay the money into an escrow account even as it pursued its final appeals.
Fernandez has called the ruling by Griesa "judicial colonialism." She has refused to pay anything to what she calls "vulture funds," saying that, if allowed to stand, the judge's ruling will give them a huge advantage over countries that need to restructure debts and grow their way out of economic crises.
Griesa's order threatened to set off a crisis, as lawyers representing other holders of defaulted debt, totaling more than $11 billion, were expected to demand immediate payment as well.
Griesa's ruling in favor of NML Capital, a fund run by billionaire Paul Singer, was issued just before the long Thanksgiving weekend, and the consequences for Argentina were severe. The value of Argentina's restructured bonds slipped in Monday trading, and the cost of insuring this debt against default jumped 51 percent on Friday, according to data from Factset.
Argentina's Economy Ministry was closed Monday for another national holiday, Sovereignty Day.
(Copyright 2012 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.)