NEW YORK (Reuters) - Argentine holdout creditor Aurelius Capital Management said on Wednesday that Buenos Aires' decision to offer its investors holding defaulted debt a swap for new notes governed by Argentine law is tantamount to choosing to be an "outlaw."

Late on Tuesday evening, Argentine President Cristina Fernandez unveiled legislation to make it possible to carry out the exchange and allow the government to skirt a U.S. court ruling that prevented her government from paying creditors.

"Argentina's leaders have literally chosen to be outlaws. They have chronically flouted U.S. court orders, lied to our courts, and proclaimed utter disdain for our courts," Aurelius said in a statement.

Argentina slid into default last month after a New York court blocked an interest payment of $539 million owed to holders of debt issued under U.S. legislation that was restructured after the country's 2002 default on approximately $100 billion.

"Mistakes by the Republic's current leaders have already cost the Argentine people far more than what is owed to all so-called holdouts. These officials are now 'doubling down' on an illicit and failed approach, as recommended last May by their U.S. counsel," Aurelius said.

(Reporting By Daniel Bases; Editing by Meredith Mazzilli)