Could Argentina restructure its bonds locally?

Author: Zoe Thomas | Published: 4 Aug 2014

The possibility of Argentina restructuring its US and UK bonds under local law has been met with scepticism due to the sweeping nature of the judge’s order and the anti-evasion clause affecting the institutions involved.

Even before its partial default on Thursday, the government of Argentina raised the prospect of moving its outstanding bonds under local law.

The move would avoid a New York court ruling preventing the country from paying restructured bondholders unless it also paid holdouts.

Argentina failed to reach a settlement with holdout creditors last Wednesday evening that would have allowed them to move forward on payments to all bondholders. The country’s government has engaged in negotiations with the holdouts but the rhetoric from the president and finance minister has remained...