UPDATE 2-Argentina must pay 'me-too' claims for $5.4 bln - U.S. judge
(Adds quote from hedge fund lawyer, background on debt dispute)
By Joseph Ax
NEW YORK, June 5 (Reuters) - Argentina must pay $5.4 billion to more than 500 "me-too" holders of defaulted debt before it can pay the majority of its creditors, a U.S. judge ruled on Friday, adding to the mounting pressure facing the South American country.
The decision from U.S. District Judge Thomas Griesa in New York is the latest development in long-running litigation by creditors seeking full repayment on Argentina's bonds following its $100 billion default in 2002.
Griesa previously ordered the country not to pay other creditors until it pays $1.33 billion plus interest to a group of holdout hedge funds who refused to exchange their debt.
Argentina again fell into default in July 2014 after refusing to honor those orders, and officials have criticized Griesa as biased.
In Friday's ruling, Griesa said the "me-too" creditors held bonds similar to those held by the hedge funds and thus should be treated the same way. The bonds, he said, contain a clause that requires payment at the same time as creditors who agreed to exchange their debt in 2005 and 2010 restructurings.
Griesa said Argentina has violated that clause by refusing to pay the holdouts while attempting to pay the exchange bondholders, who hold about 92 percent of the defaulted debt worth around $28 billion in outstanding principal.
"By making payments on this superior class of debt, the Republic has violated its promise to rank plaintiffs' bonds equally with its later-issued external indebtedness," Griesa wrote. Continuación...