US court clears Argentina to pay hedge funds in debt battle

A US federal appeals court today cleared Argentina to make payments on its debt, paving the way for the country to settle its long battle over bonds defaulted in 2001.
A three-judge panel rejected an appeal from some holdout creditors of a March ruling that removed injunctions blocking the payments.
Argentina will thus be able to follow through on settlement deals with other holdouts over some USD 9 billion in claims.
The appeal had held up the country's plans to raise some USD 12-15 billion on global capital markets to pay off the creditors, who have battled for full compensation for their bonds for years.

Until Argentine President Mauricio Macri took office in December, Buenos Aires had rejected the claims of the holdouts, most of them hedge fund investors, labelling them "vultures" for having refused to support the restructuring of the country's debt.
But the dispute had prevented Argentina from being able to raise any more funds in world capital markets and hobbled its economy.

Reformist Macri opened new talks over more than USD 9 billion in claims for principal and interest on the bonds in February, and has struck compromise deals over most of them.
But some of the creditors were seeking better deals and moved to block the payouts.

Argentina defaulted on close to USD 100 billion in bonds in 2001 and over the subsequent nine years reached international agreements to restructure the debt with about 93 per cent of creditors, who agreed to sharp writedowns of their bonds' value.
Many of the holdouts though bought the bonds at steep discounts after the default and sued for full payment rather than back the restructuring. In a controversial decision in 2012, a New York court backed their claim.