Wednesday, November 14th 2012 - 23:44 UTC

Holdout bonds’ ruling: Argentina files a retrial petition at the US Court of Appeals

Argentina filed on Tuesday a petition for a retrial at the US Second Circuit Court of Appeals over a debt ruling that would force the country to pay holdout creditors owning bonds in default since 2002.

In the request the administration of Cristina Fernandez argues Judge Griesa ruling makes “voluntary debt restructuring essentially impossible”

The court filing said Argentina is seeking a re-trail with the three-judge panel that ruled in favour of the holdouts last month as well as with the entire Second Circuit Court of Appeals.

Argentina in its brief said the earlier appellate ruling last month interpreted a “boilerplate” provision underlying trillions of dollars in debt in a way that was “inconsistent with market understanding.”

If left in place, the Second Circuit’s initial ruling “will exacerbate future sovereign debt crises by making voluntary debt restructuring essentially impossible,” Argentina argued in the brief.

Argentine bonds tied to GDP growth fell by 4.1% on Tuesday, while bonds such as the Boden 2015 lost 0.8%, the Par (which is in Pesos) fell 2% and the Pro 13, 0.8%.

An analyst explained that the reason for the fall “is that Argentina is firmly opposed to conceding any payment to the ‘vulture funds’.” Therefore investors fear that if the holdouts aren’t paid, this will cause an embargo leading to a technical default.

On Monday, President Cristina Fernández, repeated that she will continue to refuse to pay those who did not enter the debt restructuring process, which was accepted by 93% of the bondholders.

Investment fund NML Capital on Tuesday presented US judge Thomas Griesa with a note that indicated how much they demand to be paid for the bonds that did not enter the governments bond-swap deal.

The investment group is responsible for the seizure of the Libertad frigate, after presenting a lawsuit through the Ghanaian judicial system.

Last month, the US appeals court ratified the New York judge‘s verdict, which ruled that Argentina should pay all the bondholders, whether they had entered the bond-swap deal or not.

According to sources, after NML Capital presented their proposal, lawyers representing Argentina have 72 hours to formally respond to the proposal.

At a hearing last Friday, Griesa said he intended to rule before December 2, when Argentina is scheduled to make the first of three interest payments on the exchange bonds, which will total more than 3 billion dollars over the course of the month.

From Buenos Aires Argentina replied saying that the money was deposited in the Central bank and ready to be paid out to the exchange bonds.

In its presentation before the Appeals court Argentina claimed that upholding Griesa’s rulings would undermine its debt agreements, trigger a new financial crisis in the republic and make it impossible for countries including Greece and Spain to restructure their debt in the future.

However Circuit Judge Barrington Parker who wrote for the panel agreeing with Judge Griesa said that “nothing in the record supports Argentina's blanket assertion that the injunctions will plunge the Republic into a new financial and economic crisis” adding that with more than 40 billion dollars in foreign reserves, Argentina has the ability to pay the holdouts

“We hold that Argentina breached its promise,” the appellate court said, summarizing a 29-page ruling that could make it difficult for Argentina to use the US financial system unless it complies.

Griesa said any financial institution that processes Argentina's payments to the holders of restructured bonds must ensure that the holdouts are paid an equal amount to avoid violating the court's order. Effectively, this would force US banks to stop the payments unless Argentina proves it's complying with the ruling.

The appeals court sent the case back to Griesa’s court to clarify how a payment formula set by the judge is intended to work and to determine how the orders apply to intermediary banks and other third parties.
 

66 comments Feed

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1 bushpilot (#) Nov 15th, 2012 - 12:52 am Report abuse
When the judge ruled that Argentina must also pay the holdouts when they pay bondholders who took a cut,

Does Argentina have to make a token payment to the holdouts?

Or do they have to pay the holdouts the same amount they are paying the restructured bondholders?

What amount is the Argentine Govt. required to pay the holdouts when they pay the restructured bondholders?
2 toxictaxitrader2 (#) Nov 15th, 2012 - 12:56 am Report abuse
Same Judges! maybe same result maybe,
perhaps not in Argentina,but in the States yep!
3 Captain Poppy (#) Nov 15th, 2012 - 01:18 am Report abuse
If left in place, the Second Circuit’s initial ruling “will exacerbate future sovereign debt crises by making voluntary debt restructuring essentially impossible,” Argentina argued in the brief.

A wiser country would not have signed a loan document with that provision in place. Argentina needs to deal with the terms of the contract they signed. They will not get a new trial because they want a clause in the contract removed.
4 nigelpwsmith (#) Nov 15th, 2012 - 02:02 am Report abuse
Quite so, the US courts will take this application as yet another delaying tactic designed to inconvenience the holdouts amoung which is NML Capital.

The simple truth is that there is more than enough funds in the bank to pay all the bond holders. If Argentina is too stupid to pay, then the consequences would be severe.

Without access to the US financial system, Argentina would find it next to impossible to pay for oil imports, let alone the huge number of import/export transactions which would be frozen or impossible without US cooperation.

Argentina will not get any sympathy from Europe if they try to dodge the US system. Bond holders like NML have judgements in the UK courts too and will be able to freeze any financial transactions passing through London or Frankfurt.

Maybe the Judge ought to investigate Argentina's claim that they lack the funds and demand information on CFK's private bank accounts in Switzerland. She engaged in money laundering when she stole $650 million from Sante Fe province decades ago. By now, those funds probably equal a significant proportion of the debt that has to be repaid.

If Argentina won't pay, then the Judge should garnishee CFK's private bank accounts instead. Let's see if the wicked witch like that when her private Swiss piggy bank disappears.
5 Ayayay (#) Nov 15th, 2012 - 03:59 am Report abuse
@3 Good point. This will ensure that future govs are more- careful-with their citizen's money.
6 KFC de Pollo (#) Nov 15th, 2012 - 04:27 am Report abuse
what a brilliant photo of cristina. She looks like she's about to cry!

muwahahahahahahahah!
7 Huntsman Extraordinaire (#) Nov 15th, 2012 - 08:15 am Report abuse
Not even read the article yet but that face says 'mummy, no one wants to be my frwend'.

'Oh Friend!', 'Thumbs up Friend!', 'New Car Friend!'
8 Welsh Wizard (#) Nov 15th, 2012 - 09:58 am Report abuse
@3-5

This clause is boilerplate (i.e. it is standard in nearly all bond issuances of this type). The main point here is that normally when you restructure your debt you enter into a negotiation with the bondholders and agree upon a price which is acceptable to all. In this case, Argentina just set a 75% haircut and didn't negotiate. This is where their legal argument should fall down as nearly all other sovereign restructurings are organised on a consultative basis. This one wasn't, it was unilateral.
9 Idlehands (#) Nov 15th, 2012 - 10:16 am Report abuse
7 Huntsman Extraordinaire

I think that may be lost on 99% of posters but it's just made me daydream about Emily Atack
10 Welsh Wizard (#) Nov 15th, 2012 - 11:11 am Report abuse
“Holdout friend”...?
11 Foxtrot Indigo (#) Nov 15th, 2012 - 11:38 am Report abuse
”However Circuit Judge Barrington Parker who wrote for the panel agreeing with Judge Griesa said that “nothing in the record supports Argentina's blanket assertion that the injunctions will plunge the Republic into a new financial and economic crisis”

Wait...Argentina lied? Really?
12 Huntsman Extraordinaire (#) Nov 15th, 2012 - 12:03 pm Report abuse
Whats that KFC singing?

“Show me the way to go home!
I'm tired and I want to go to bed!
I had a little drink about an hour ago,
And now I'm totally dead!”
13 Idlehands (#) Nov 15th, 2012 - 12:37 pm Report abuse
Everyone else is singing:

“What's that coming over the hill..................”
14 Pirate Love (#) Nov 15th, 2012 - 12:54 pm Report abuse
this is what happens when a country boxes itself into a corner, options are limited, fight your way out or fall to your knees and argentina are all punched out :) .....Well done Crustina, you get my vote!
15 Conqueror (#) Nov 15th, 2012 - 01:12 pm Report abuse
@1 Read en.mercopress.com/2012/10/26/us-court-rules-against-argentina-all-bondholders-must-be-treated-equally-including-hold-outs

The hedge funds, i.e. the hold-outs, have to be paid equal amounts.
16 yankeeboy (#) Nov 15th, 2012 - 02:03 pm Report abuse
Delay delay delay...they still have to make the interest payments in Dec or risk default.
After 70 meetings all over the USA UK EU, YPF can't find a penny of investment and with ANOTHER default on the horizon I don't see that helping Argentina...
hahahaha
17 Hook (#) Nov 15th, 2012 - 02:23 pm Report abuse
16@ yup, the Argies just love to talk and have endless “reuniones” and talk and talk, whilst not doing anything concrete. To them talking BS is equivalent to doing things.
18 Anbar (#) Nov 15th, 2012 - 02:30 pm Report abuse
“”“” To them talking BS is equivalent to doing things.“””

that applies to most every politician in the world, its hardly a specialty of Argentina... I mean, just look at the UN talking bollocks whilst thousands die in Syria....
19 briton (#) Nov 15th, 2012 - 02:36 pm Report abuse
All argentina assests should be frozen, untill they pat their debts full stop.
20 Hook (#) Nov 15th, 2012 - 03:11 pm Report abuse
18@ i mean Argentinians in general. They like to talk endless-BS and repeat the same things over and over
21 Captain Poppy (#) Nov 15th, 2012 - 03:14 pm Report abuse
#20 I have to disagree with you there Hook. Most of the RG's I know have personal pride, ashamed of the current state of affairs of Argentina and believe in personal accountability.
22 Hook (#) Nov 15th, 2012 - 03:18 pm Report abuse
21@ you don't know shit about Argentina nor Argentinians, Me thinks you are an Argie yourself
23 bushpilot (#) Nov 15th, 2012 - 03:25 pm Report abuse
@15 C

Thank you for the link. Answers everything.
24 briton (#) Nov 15th, 2012 - 03:31 pm Report abuse
CFK never stops moaning , she is forever slagging of britain, then accuses us of doing it.

they talk but no action,
its simple leave the falklands alone and soddy off.
25 Foxtrot Indigo (#) Nov 15th, 2012 - 04:31 pm Report abuse
@22

Actually C.Poppy is correct, the average RG on the street is more concerned about their lives/problems than the Falklands. I have been to Argentina twice on a ski-ing holiday and I met Argentinans at the international boarding school I went to several years ago. I have told many of the RGs I met that I am a Falkland Islander and they couldn't care less. I made very good friends with the girls who worked at the Hotel I was staying at on my last Ski-ing trip, they were extremly polite and lovely people. They knew I was a Falkland Islander but they didn't make any cracks about Argentina owning the FI or start flag waving.

I have a problem with CFK and the current political situation but I have no problem with Argentina as a whole or its populace. Those Argentians who claim the FI belongs to them annoy me, but their words are empty and threats worthless.
26 Hook (#) Nov 15th, 2012 - 05:05 pm Report abuse
25@ so you have been in Argentina 2x in a holiday? hahaha, let me laugh.
try living there dude.
27 Pirat-Hunter (#) Nov 15th, 2012 - 05:08 pm Report abuse
Argentina should charge a 50% import tax fee from every nation giving the vulture fund help and refuge, the navys family should start a occupy movement to take over the US embassy to set up a furniture Von fire and demand the release of Libertad, occupying american owned property will show a lot of support for the navy, we should show the world how Argentine citizens deal with theft and corruption.
www.gregpalast.com/the-globalizer-who-came-in-from-the-cold/
28 Hook (#) Nov 15th, 2012 - 05:13 pm Report abuse
25@actually, i don't believe you are a Falklander, you are just anti-CFK Argie like most of the posters here... or you are scared Argie-fearing wimp living in Falkands, who knows.
29 Captain Poppy (#) Nov 15th, 2012 - 05:13 pm Report abuse
#22 hook......You are correct that I do not know shit as likely as you know shit as I suspect you and shit are quite close. But I do know Argentines. Ask me if I really care what you and your provinically, feeble single synapses mind is capable and incapable of thinking? If you wish not to ask what I care, then why not return your head back to the warm confines of your outer colon before your head explodes from a cerebral hemorrhage

#25 You are correct. They typical working class Argentine wants to get through there day unscatched like anyone else in the world. My wife is Argentine and we get there once or twice a year. Most people here that blast the RGs base what they know of RGs from what people read here and never even been there. What a strange world we live in when we judge the people by the leaders and news and democracy does not always choose the best but the one who talks the best.
My issues are with not just the president, but most of the peronists.
30 Hook (#) Nov 15th, 2012 - 05:18 pm Report abuse
29@ fuck youuuuuuuuuuuuu....LOL
31 Captain Poppy (#) Nov 15th, 2012 - 05:21 pm Report abuse
Thank you.....If I can piss you off and make you appear smaller minded.....I am quite pleased. So tell me....are you truly as ignorant and ill informed as you come across or just imbicilic by birth?
32 Hook (#) Nov 15th, 2012 - 05:22 pm Report abuse
31@go and take your cheap-visa wife's cock in ya arse, you dirty old fat man
33 agent999 (#) Nov 15th, 2012 - 05:24 pm Report abuse
@29
Most of us do not blast the ordinary Argentinians, most of us cannot comprehend how CFK and her cronies feel they are so superior and that the rest of the world should bow to their every whim.
CFK and her cronies are ruining what should be a good and profitable country just to massage their own egos!
CFK the typical black widow spider - poisonous to everything she touches.
34 Foxtrot Indigo (#) Nov 15th, 2012 - 05:30 pm Report abuse
@28

You are the one who knows nothing. My parents moved to the Falklands from the UK in 1986 and I was born in the Falklands in 1989. I can trace my family history in the UK back hundreds of years. I have lived in the FI all my life and I now have a job here and I intend to live here in peace for as long as I want. I am a Falklands Islander and I am British. I DON'T want to be Argentine and I will fight any RG government to the death to keep the Falklands British or fight for our independence. Do not underestimate my patriotic attachment to my home.

I do not however, hate all RGs. To do so would be pathetic and hateful. Just because their government want to colonise the FI and their supports come on here flag waving, does not mean that is how everyone feels. That would be like saying all British people love David Cameron.

If an RG tried to attack my home I would defend it to the hilt. But I will not condemn millions of people because of the actions of a few.
35 Captain Poppy (#) Nov 15th, 2012 - 05:33 pm Report abuse
#33 Agent999

It's absolutley mind boggling that she walks about with that air of superiority. This in itself is what leads me to suspect that the election process in Argentina is suspect at best. In most democracies, elected officials are always careful and the next election is always not far away. She carries about as if elections are moeaningless and of course if they are corrupt, of course they ar meaningless.
36 Hook (#) Nov 15th, 2012 - 05:38 pm Report abuse
Most of these posters are opposition Argies. I knew it..
37 Captain Poppy (#) Nov 15th, 2012 - 05:41 pm Report abuse
so suzzie has returned.....geez and I thought it died.
38 Foxtrot Indigo (#) Nov 15th, 2012 - 05:42 pm Report abuse
@36

Maybe you are the RG here?
39 Hook (#) Nov 15th, 2012 - 05:45 pm Report abuse
38@ maybe i'm your father?
40 Simon68 (#) Nov 15th, 2012 - 05:47 pm Report abuse
Hook seems to be another Conqueror!!!!!

I didn't believe there could be two of them!!!!!
41 Captain Poppy (#) Nov 15th, 2012 - 05:47 pm Report abuse
#38 Fox.....I wouldn't waste my energy. Only one person uses that syntax and grammer.....and it's a troll
42 Yuleno (#) Nov 15th, 2012 - 05:47 pm Report abuse
Poppy when are you taking your wife to Argentina again,as you haven't been for a while.Where does your wife's family live these days.
I believe you are right about argentine people in some cases but it depends on which part of the country you have been.
43 Foxtrot Indigo (#) Nov 15th, 2012 - 05:49 pm Report abuse
@39

Mmmm nope, my father is currently next door talking to some VIPs about things far too important for you to comprehend.

Perhaps you should follow the old saying: “If you have nothing intelligent to say, say nothing at all.”
44 Welsh women are ugly pigs (#) Nov 15th, 2012 - 05:50 pm Report abuse
So the lines of the British are cracking I see??

hmmm
45 Captain Poppy (#) Nov 15th, 2012 - 06:07 pm Report abuse
They are from the BsAs...the city. She is going for the holidays and I am joining her shortly afterward.
I can't say that I know all Argentines......but I have yet to met one that would make me cast a blanket judgement across them all. As I said, I really despise the president and peronists. I would be able to acccept her philosophical differences of political opinions if she was competent, cared about her people, was not suspect with corruption and did not talk down to every this women interacts with that has a different opinion. And she is dafaulting on her countries sovereign debt and every court they go to rules against her, yet she still refuses to accept the inevitable
46 Hook (#) Nov 15th, 2012 - 06:18 pm Report abuse
44@ please don't insult me, i have nothing to do with the Brits, but you're right they're ugly people.
47 Raven (#) Nov 15th, 2012 - 06:23 pm Report abuse
Does CFK REALLY think she can wriggle her way out of this mess ultimately? What will the cost to Argentina be if the US court comes out with the decision she HAS to pay? and at what price for her country?
48 redpoll (#) Nov 15th, 2012 - 06:29 pm Report abuse
@46 Your opinions on the pulcritude of the Brits is your own opinion and you are entitled to it. You sound like the Imam of the Finsbury mosque fighting deportation. In which case just go and sling your hook mate
49 Foxtrot Indigo (#) Nov 15th, 2012 - 06:30 pm Report abuse
If CFK looses the court appeal, will she have to pay the court fees? That's how it works in the UK right? If you lose, you pay.

Maybe she'll go to court to appeal against having to pay court fees!
50 TipsyThink (#) Nov 15th, 2012 - 06:36 pm Report abuse
No problém for Argentina to pay báck ..

Argentina has moré than $ 10 bíllions in US sécurities.
51 agent999 (#) Nov 15th, 2012 - 06:40 pm Report abuse
@50
where in CFK's swiss bank account ?
52 TipsyThink (#) Nov 15th, 2012 - 06:47 pm Report abuse
51

My reséarchs say Kirchners have no any ábroad bank accoúnts
but somé politícians and many businéssmen have.
53 redpoll (#) Nov 15th, 2012 - 07:00 pm Report abuse
@51 You managed to hack into the Swiss banking system? Tell me more! I think a lot of other people would like to do the same
54 Foxtrot Indigo (#) Nov 15th, 2012 - 07:05 pm Report abuse
@53

LOL
55 Ayayay (#) Nov 15th, 2012 - 07:11 pm Report abuse
@52 That's funny, because there was just an article revealing a PRIVATE account the Kirchners opened using PUBLIC Argentine money back when one of them was in regional gov. Now you're making me go look for it!

@53, It's true they're secret, but there was a whistleblower
56 ProRG_American (#) Nov 15th, 2012 - 07:39 pm Report abuse
How silly of Mercosur. Selecting photos of the president as to show her in moments of distress. This one in particular tries to depict her as in a state of hopelessness. This photo was actually from a recent speech where she mentioned her late husbands legacy. She is always overwhelmed by grief atsuch moments. A sign of true love.
57 TipsyThink (#) Nov 15th, 2012 - 07:55 pm Report abuse
55

what a hystéric namé u have !

whén will u learn many of média publíshings are lié.?
58 Ayayay (#) Nov 15th, 2012 - 08:14 pm Report abuse
@56 You have soooooooo often sounded like “British Kirchnerist” , commenting mainly on the photo's appearance.
59 Hook (#) Nov 15th, 2012 - 08:26 pm Report abuse
48@ just take a look in the mirror, haha..you think all the people laughing at Brits are muzzies, haha.. have you ever been to Germany, France, Spain, Russia, Scandinavia, Italy, Brazil.. your days of greatness are well behind, better stick as mates with USA.
60 Ayayay (#) Nov 15th, 2012 - 08:50 pm Report abuse
@52 Russia Today, (THE leftist newspaper) Op Ed:

“We do know that, in line with Kirchner’s sloppy
management of public funds, they unwittingly admitted that Santa Cruz’s money was
deposited in the “Private Banking” departments of Credit Suisse and UBS.”
61 TipsyThink (#) Nov 15th, 2012 - 09:02 pm Report abuse
60

I watch greenish tv channel RussiaToday everyday.
I have never heard any news on about it.

Russian oligarchs--Swiss--Austrian -OffShore --South Cyprus--banking accounts...are there any people who don^t know them ?
62 Ayayay (#) Nov 15th, 2012 - 09:21 pm Report abuse
And here's the Russia Today link: rt.com/news/kirchner-president-public-argentina-527/
63 TipsyThink (#) Nov 15th, 2012 - 09:48 pm Report abuse
62

this articlé written by Adrian Salbucchi..his openly wéll known claíms.

I read also its all comménts.. explain nót much..

I know Clarin's low-down impartíally...not related to media freedom..
it^s shutting down operation is the Government's own preference.

These type of opérations are made in almost every country sométímes
for example ,the recént cóntra Murdoch Operation in UK....
64 Captain Poppy (#) Nov 16th, 2012 - 12:17 am Report abuse
#56 it is what it is. The media's role is not the make positive or negative.....just present what was. Apparently that is what she was at the time. Deal with it. She is a bag of hot air and speaks so unprofessionally anyway so the picture certainly cannot tarnish her image. Of all people worrying about their tarnished image, she is not one of them. She is a psycho by international standards and law
65 British_Kirchnerist (#) Nov 19th, 2012 - 02:54 pm Report abuse
My solidarity to Cristina and Argentina in this latest legal struggle, they are fighting for all nations and their people against the predatory banks

#56 Thanks for that context, though its counterproductive of mercopress really as it just shows that even moments of great sadness do not mar her beauty
66 Captain Poppy (#) Nov 19th, 2012 - 03:25 pm Report abuse
Imagine the nerve of banks being predatory because they loaned and and had the nerve to expect it back!!! What Shysters and Shylocks!!!

#65 Maxi you're such a mommas boy. Pappa smurf nestor would slap you upside the head is her were alive.....thankful God for small things......one down two to go!

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