(MENAFN - AFP) Argentina has urged a US appeals court to reconsider an order for the country to pay in full holders of 1.47 billion in defaulted debt.
In a petition filed Friday, Argentina pointed to "grave legal errors" in last month's 2nd US Circuit Court of Appeals ruling that ordered Buenos Aires to pay the money to two hedge funds that refused to participate in two debt restructurings.
The case has its roots in Argentina's 2001 default on 100 billion worth of sovereign debt.
The Argentine government has argued that bondholders who took part in the 2005 and 2010 restructuring of the debt, which forced on them huge writedowns of the face value of the bonds, would now be able to lay claim as well for 100 percent compensation.
That could overwhelm the country's finances and lead to a fresh default, according to Buenos Aires.
In the latest filing, Argentina called for a rehearing of the case by the three court judges who made the August 23 ruling, or by a bigger group of 14 judges.
"If the decision is not reversed, the injunction is likely to trigger a default on 65 billion worth of exchange bonds held by innocent third parties," the document read.
"Such a default would have devastating consequences for the EBG (exchange bondholder group), exchange bondholders generally, and for the global economy and the entire system of international sovereign debt restructurings."
It called the injunction "wholly inequitable" because bondholders who participated in the swap were already forced to accept discounts exceeding 70 cents on the dollar on defaulted bonds.
Argentina's Senate approved Wednesday a bill backed by President Cristina Kirchner to provide a bond swap that would offer hold-out bondholders the same terms as the 2010 swap.
Argentina reached a deal with almost all of its private creditors to restructure its debt at a discount of nearly 70 percent in two phases, in 2005 and 2010.
But bondholders led by the NML Capital and Aurelius hedge funds took legal action to obtain payment in full.
Argentina has so far refused to pay the holdouts in full. It has asked the US Supreme Court to weigh in on the case.