Daniel Scioli, the ruling party candidate in Argentina’s upcoming presidential election blames his rival’s electoral possibilities on the decision from a New York federal judge, ruling that the country owes $6.1 billion to foreign bondholders.
Scioli told a local radio station on Saturday that U.S. District Judge Thomas Griesa’s Friday decision was tied to the possibility that opposition candidate Mauricio Macri could win in the second round next month.
Argentina defaulted on $95 billion in sovereign debt in 2001. The country restructured most of the debt in 2005 and 2010. The holdouts, including U.S. hedge funds, sued for full payment, citing equal treatment — or “pari passu” — clause in the bond documents, preventing Argentina from favoring later bondholders, Bloomberg reports.
Griesa ruled that Argentina cannot pay some bondholders while refusing to pay $6.1 billion in claims by creditors who refused to swap their bonds for steeply discounted replacements in the South American nation.
Argentina’s presidential elections on October 25 deepened investors’ optimism when Mauricio Macri, who has publicly vowed to settle the litigation, finished in a near-tie with Scioli. The two will now face each other in a runoff on November 22.