High court won't hear Argentina appeal over bonds

Written By Unknown on Selasa, 08 Oktober 2013 | 00.33

BUENOS AIRES, Argentina — Argentina lost its first round in a crucial battle over bond payments at the U.S. Supreme Court on Monday.

Justices refused to hear the country's appeal of a ruling that would force Argentines to pay about $1.4 billion in cash to a group of hedge funds, or go into default on most of the other bonds issued to make good on debts stemming from the country's 2001 crisis.

The decision was expected and almost certainly won't be Argentina's last shot at a Supreme Court hearing. While some analysts have said the chances of a different result diminish with each appeal, Argentina still has ways of delaying the final result for months. The government already asked the full U.S. 2nd Court of Appeals in New York to reconsider the finding by one of its three-judge panels, and could appeal that decision in Washington as well.

The justices did not comment on their order Monday.

Nor was there an immediate reaction from the government in Argentina, where uncertainty and secrecy surrounded President Cristina Fernandez. Her doctors ordered her over the weekend to take a month's rest after discovering blood pressing against her brain, a situation that may require surgery. It wasn't clear whether she would hand over government to her vice president, or try to manage the country from the presidential residence.

The Economy Ministry did not immediately respond to questions left by The Associated Press about its next steps following the Supreme Court rejection.

The case stems from Argentina's financial crisis a dozen years ago, when the government defaulted on a record $100 billion in debts, and some investors scooped up nearly worthless Argentine bonds. More than 90 percent of bondholders have been receiving payments for years since agreeing to swap their un-performing paper for new bonds that initially paid less than 30 cents for each dollar of bad debt. Many of the rest, led by NML Capital Ltd., a hedge fund managed by New York billionaire Paul Singer, sued and won their case before U.S. District Judge Thomas Griesa.

Fernandez has repeatedly refused to pay these plaintiffs "a single dollar," calling them vultures who prey on emerging economies, and is prepared to defy the U.S. courts by preparing another debt swap that would be guaranteed instead under Argentine law.

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Mark Sherman reported from Washington, D.C.


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