Argentina wins court delay over debt

Economy Minister Hernan Lorenzino at a press conference on 22 November 2012 Economy Minister Hernan Lorenzino has said Argentina will fight the US ruling

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Argentina, which is locked in a court battle over its debt, has received more time to argue against paying investors over its defaulted debt.

The nation is appealing against a US ruling ordering it to pay $1.3bn (£800m) to foreign creditors holding bonds that it defaulted on in 2001.

Argentina had been given until 15 December to reimburse the hedge funds, which shunned two previous debt swaps.

But the New York court has now granted a stay while its appeal is heard.

Under the original ruling, Argentina had to place the money in an account while it pursued appeals. President Cristina Fernandez de Kirchner called the ruling "judicial colonialism" and said her government would not pay a single dollar.

Now, the two sides will meet in court to argue the appeal in February.

Argentina defaulted on $100bn of bonds in 2001, a record amount at the time.

But by 2003 a recovery was under way, and the International Monetary Fund (IMF) agreed to a new loan.

Since then, Argentina has restructured its massive debt twice, offering creditors new bonds for the defaulted ones.

These hedge funds have previously rejected exchanges of their defaulted debt in 2005 and 2010. If Argentina is forced to pay in full, other holders of debt totalling more than $11bn are expected to demand immediate payment as well.

Argentine Economy Minister Hernan Lorenzino has said it is illegitimate to pay "vulture funds".

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