Argentina has reacted angrily to a US court decision awarding hedge fund creditors more than $1.3bn, as bondholders vowed an immediate appeal to prevent the seizure of their interest payments.
The victory for several hedge funds against Argentina has sparked fears that the country could be plunged into yet another debilitating sovereign default, and threatens to make government restructurings more difficult in the future.
In what has been dubbed the “trial of the century” for sovereign debt restructurings, a US district court judge yesterday ordered Argentina to pay the hedge fund creditors – led by Elliott Associates and Aurelius Capital – in mid-December, when it must also pay bondholders. Unlike most of Argentina’s creditors, Elliott Associates and Aurelius Capital did not accept two restructurings in 2005 and 2010, choosing instead to pursue full repayment in the courts.