MOSCOW, August 20 (RIA Novosti) - Argentine President Cristina Fernandez de Kirchner has come up with a plan to push bondholders to swap their Argentine debt issued under foreign law for bonds of the same value governed by Argentine law.
"If bondholders decide – in individual or collective form – to ask for a change of the legislation and jurisdiction of their bonds ... the Economy Ministry is authorized to implement a swap for new public bonds under local legislation," Fernandez said in a pre-recorded speech aired on nationwide television late Tuesday evening.
Last month Argentina entered default after a New York court blocked an interest payment of $539 million owed to holders of its debt issued under US legislation. Fernandez said Argentina would stop using Bank of New York Mellon, that was supposed to transfer the payment, and would instead make payments on its bonds via an account at Banco de la Nacion in Buenos Aires.
If Congress approves the law proposed by Fernandez, Argentina’s government would deposit payments on the new Argentine bonds in an account at the Central Bank. The new plan thwarts any possible negotiation with the hedge funds that have avoided reaching a default agreement.
The prolonged debt crisis is deepening Argentina’s economic recession. Unemployment in the country is on the rise and annual inflation stands at around 40 percent, according to The Wall Street Journal.
