Argentina’s Senate has passed a law that will let the country continue paying off its default debt by transferring international bond payments from New York to local banks, which would let other investors buy Argentine debt.
The scheme, to get around a US judge’s order to immediately pay back $1.6 billion to “vulture” hedge funds in Manhattan, is the initiative of President Cristina Fernandez de Kirchner. The bill passed by a vote 39 to 27.
The initiative proposes to begin challenging payments through third parties, and allowing them to trade their bonds for new debt issued under Argentine law. Argentina’s state Banco de la Nacion could become the trustee for payments, replacing the Bank of New York Mellon. Another proposal is to make Paris a main destination for debt payments.