Argentina and the future of sovereign debt
July 30, 2014 7:11 AM Subscribe
In 2000, Argentina defaulted on international debt, and then renegotiated with most of its bondholders. Some of the rest of the bonds were snapped up by hedge funds at deep discounts. Recently a U.S. district court judge, Thomas Griesa, ruled that Argentina couldn't pay the renegotiating bondholders -- and no bank or other agent could help it pay them -- without paying the hedge funds, too, in full. The 2nd circuit affirmed, the Supreme Court denied appeal, and the ruling could have a major impact on the future of sovereign debt and on the role of the U.S. as a world financial center. If a solution is not found, Argentina will default again today.
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