Argentina legal plot moves to its lower house

ARGENTINA’S senate yesterday passed a bill aimed at circumventing US court decisions regarding its defaulted debt by changing payment jurisdiction, sending the proposal to the lower house chamber of deputies for final approval.

The chamber, like the senate, is controlled by government allies who are expected to vote the bill into law. Debate in the lower chamber is set to start next week. The senate vote approving the measure was 39 to 27.

President Cristina Fernandez wants to resume servicing sovereign bonds that were restructured after Argentina’s earlier default in 2002.

Her government missed a coupon payment on its restructured bonds in July, thrusting the South American country into default.

The bill would replace Bank of New York Mellon with state-controlled bank Banco Nacion as trustee for bond payments.

It would also allow holders of restructured bonds governed by foreign law to swap them for paper governed by Argentine law.

Both moves would be in violation of US court orders. US district judge Thomas Griesa banned Argentina from making interest payments on restructured debt until it settles with a group of hedge funds.

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