US: Credit Market

Argentina wants US court stay so it can pay debt

Argentina's Economy Minister Axel Kicillof.

Argentina will ask a U.S. judge to put a stay on his ruling against the country in its case against "holdout" creditors as it seeks to start negotiations aimed at avoiding a new default, Economy Minister Axel Kicillof said on Monday .

Argentina is locked in a 12-year-old legal fight with investors who declined to participate in debt restructurings after Argentina defaulted on about $100 billion of debt in 2002.

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Without a stay on a ruling against the country by U.S. District Judge Thomas Griesa, Argentina would be unable to make a June 30 coupon payment on its restructured bonds unless it also pays $1.33 billion to holdouts seeking full payment of the debt they hold.

"We consider it essential that Judge Griesa issue a stay so that the Republic of Argentina can continue paying the holders of restructured bonds," Kicillof told reporters.

Argentine President Cristina Fernandez on Friday reversed her long-held policy of shunning negotiations with the holdouts, sparking a rally in local stocks, bonds and the currency on Monday.

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Griesa has appointed a special master to assist with possible talks between Argentina and holdouts. A court official in New York said no hearing was scheduled for Monday.

—By Reuters