Judge orders Argentina debt negotiations must continue

NEW YORK/BUENOS AIRES, Aug 1 (Reuters) - Argentina's default this week did not "extinguish or reduce" the South American country's debt obligations, a U.S. judge said on Friday, and he ordered negotiations between the country and holdout investors to continue. In a stern tone, U.S. District Judge Thomas Griesa in New York criticized the decision by Latin America's No. 3 economy to default on $29 billion in debt earlier in the week rather than pay the holdouts as ordered. As Griesa was speaking, a committee facilitated by the International Swaps and Derivatives Association (ISDA) declared Argentina's failure to pay an interest payment a "credit event." The move triggers payment on insurance held on Argentine government debt, which analysts estimate could amount to roughly $1 billion. Griesa chided Argentina for making statements only about its obligations to bondholders who took large writedowns after its $100 billion default in 2002, and not the rights of the New York hedge funds at the center of the dispute, which had rejected the bond swaps.

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