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BUENOS AIRES, July 31 (Reuters) - Argentina's Cabinet chief, Jorge Capitanich, said on Thursday that if a third party bought the debt held by holdout investors there would be no breach of a legal clause that was seen as a major obstacle in their failed debt negotiations.
The so-called RUFO clause prevents Latin-America's No. 3 economy from paying investors better terms than those taken by bondholders who accepted large writedowns in restructurings that followed its last default in 2002.
Argentina defaulted on its debt for the second time in 12 years at midnight on Wednesday. (Reporting by Richard Lough; Editing by Alejandro Lifschitz and W Simon)