UPDATE 1-Argentina default spreads to Par bonds, risking payment demands

viernes 31 de octubre de 2014 13:38 GYT

(Adds credit rating downgrade and comments from Fitch)

By Sarah Marsh and Daniel Bases

BUENOS AIRES/NEW YORK Oct 31 (Reuters) - Argentina's debt default spread to its Par bonds on Friday after the country failed to complete an interest payment, raising the risk that creditors could demand that the country's cash-strapped government immediately repay all of its debt.

Argentina deposited a $161 million payment with a newly appointed local trustee last month to try to circumvent U.S. court orders for it to settle with "holdout" investors. The holdouts are suing to get full repayment of bonds from a 2002 default before holders that accepted the terms of a debt restructuring get paid by the government.

But Par bondholders could not collect the $161 million payment due to legal and technical hurdles, and the 30-day grace period since the coupon was originally due expired at midnight Thursday.

Argentina's economy ministry has not said whether any bondholders have come forward to collect.

Argentina had already defaulted in July on its discount notes, but holders of the Par bonds might be more likely to claim accelerated payment of the principal because the Par bonds are trading at a steeper discount to their original value.

Demands for accelerated payment could leave Argentina facing claims of up to $30 billion, more than it holds in foreign reserves.