Argentina risks struggling to service some of its debt if it’s forced to pay out US$1.5 billion in damages a UK court awarded to investors last year, lawyers for the South American nation have warned.
Hedge funds including Palladian Partners LP last year won a UK High Court ruling that Argentina must compensate investors for losses in the country’s growth-linked securities after it changed the method of calculating gross domestic product.
But that verdict is being challenged at the Court of Appeal in London and on Tuesday, lawyers for Argentina argued that the ruling could force its government to pay even if the economy were in recession or not growing at all.
The 2023 ruling disconnects actual economic growth from the bonds and unfairly ties the securities to an outdated measure of GDP, Argentina’s lawyers said. Any forced payments in a recession could jeopardise “the Republic’s ability to service both its…
