ALMUDENA CALATRAVA
Associated Press
BUENOS AIRES, Argentina (AP) — Argentina’s president on Tuesday said a U.S. judge’s decision to hold the South American country in contempt for attempting illegal moves to service its debt is pure “silliness.”
“All of this is not casual, and it comes from a senile judge,” President Cristina Fernandez said during an event at the government house. “There are some players in the economy who want to bring down the government and they want to do it with help from abroad.”
Argentina deposited a $161 million bond interest payment with a newly appointed local trustee on Tuesday in defiance of U.S. District Judge Thomas P. Griesa, who found Argentina in contempt on Monday.
Argentina’s economy ministry said the coupon payment on its foreign law Par bonds was deposited into two accounts of the state-run Nacion Fideicomisos S.A. The new trustee replaces The Bank of New York Mellon, which was removed by the government.
The move aims to prove that Argentina can meet its debt locally and sidestep a U.S. court ruling that recently pushed it into its second default in 13 years.
By making the deposit, “Argentina ratifies once again its unshakeable commitment to meet its obligations to bondholders,” the ministry said in a statement.
It was unclear whether the creditors would be paid by the end of the day Tuesday, which is the deadline.
Argentina settled most of its debt with creditors after its 2001 default by trading lower-value bonds for defaulted debt. But a group of holdouts refused to accept bond swaps in 2005 and 2010 and continues to seek about $1.5 billion. The government argues that it cannot settle with the holdouts without offering similar terms to the others.
Griesa ruled that Argentina could not pay the other creditors until it settled with the holdouts. That triggered a default when Argentina was prevented from paying some $540 million in interest due by July 30.
Argentina’s government fought back by approving a law earlier this month that would let Argentina’s government pay bondholders locally to skirt the U.S. financial system, which is bound by the U.S. court order restricting Argentina’s repayments.
But on Monday Griesa found Argentina in contempt for continuing to defy his orders. The judge reserved a decision on sanctions pending further proceedings.
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