Madrid, June 12. (European Press) –
Argentina has lost its bid to overturn a British court order to pay $1.5 billion (€1.385 million) to compensate investors for losses in securities linked to the country’s growth.
An appeals court on Wednesday rejected an appeal over payments to hedge funds, including Palladian Partners LP. The investors alleged the losses were due to a change in the way the country’s gross domestic product is calculated.
The ruling is another setback for the country, which is struggling with annual inflation approaching 300 percent and a recession that is worsening, even after President Javier Milei’s economic shock therapy. State lawyers said last month that the South American nation would face difficulty in repaying part of its debt if it had to pay $1.5 billion in the case.
The case stems from the failure to repay $95 billion (€87,700 million) of the country’s debt in 2001, amid one of the worst financial crises in its history. GDP-linked bonds, which are paid when economic expansion reaches a certain threshold, were part of the restructuring programme.
The dispute arose after Argentina changed the base year for calculating growth in 2013. The hedge funds, which also include HBK Master Fund LP, Hirsh Group LLC and Virtual Emerald International Ltd., alleged that Argentina made the changes to avoid paying bonuses.
Argentine lawyers said the changes were necessary to prevent bond yields from being guided by the “old 1993 GDP measure” until 2035.
Earlier this year, an appeals court ordered the country to deposit 310 million euros ($334 million) into an account before the May hearing.
As ordered by the court, Argentina must now also publish the required GDP data for values for each year starting in 2014, so that payments for those subsequent years can be assessed.
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