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Montevideo, December 4th 2016 - 06:07 UTC

Holdout funds want Argentina to deposit 250m by December 10

Monday, December 3rd 2012 - 04:54 UTC
Full article 42 comments
Paul Singer from NML Capital is asking for a proof of good faith from Argentina Paul Singer from NML Capital is asking for a proof of good faith from Argentina

Investment funds suing over Argentina's 2002 debt default have asked a US court to order the country to post a security deposit of at least 250 million dollars by December 10, while an appeal of a lower court's order is pending.

In an emergency motion filed late on Friday, the “holdout” creditors urged the 2nd U.S. Circuit Court of Appeals to modify its ruling from Wednesday that halted an order for Argentina to deposit 1.33 billion into an escrow account by December 15 on the investors' behalf.

The decision eased fears that Argentina could default in the coming weeks, but the holdouts say it is too lenient and gives the government more time to plot a way around court rulings.

The holdouts are seeking to be repaid in full on their defaulted Argentine bonds after spurning debt exchanges in 2005 and 2010 that about 93% of other bondholders accepted. Argentina calls the litigating funds “vultures” and has vowed never to pay them.

The latest battle centers on a ruling that found Argentina violated a bond provision requiring it treat all creditors equally when it paid the exchange bondholders without paying the holdouts. Two US courts have said they should all be paid simultaneously.

On November 21, U.S. District Judge Thomas Griesa ordered Argentina to deposit the 1.33 billion for holdouts including NML Capital Ltd and the Aurelius Capital Management funds by December 15, the same day about 3 billion comes due on growth-linked GDP warrants, issued during Argentina's debt swaps.

This raised fears of another default because if Argentina had refused to pay the holdouts, as expected, US courts could have disrupted payments to the holders of restructured bonds.

Argentina appealed the orders and won an emergency stay, or halt, from the 2nd Circuit Court.

NML and Aurelius argue, however, that Argentina should have to post a security deposit of 1.45 billion, or at least 250 million, by December 10 to ensure the country complies with the court orders if it loses the appeal.

“If Argentina refuses to post even that minimal security even as it prepares to pay more than 3 billion to exchange bondholders, that will amply demonstrate its intention not to comply with this court's mandates and that the stay should be lifted,” lawyers for the holdout investors wrote.
 

Top Comments

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  • ProRG_American

    Won't happen. Court has already decided against vultures. If they want to get paid, join the swap, then move on.

    Dec 03rd, 2012 - 05:43 am 0
  • slattzzz

    will happen pay up and move on

    Dec 03rd, 2012 - 05:45 am 0
  • LEPRecon

    @1 ProRG faker

    What court ruling? There isn't one.

    Sooner or later Argentina will have to cough up the dosh.

    I mean, your President was stupid enough to tell the world that you have the money, so it's now incumbent upon your country Argentina to honour the debts. I mean you took the money, now face the consequences of that, by paying back what you owe.

    The longer it takes you to pay off your debt, the higher it will be due to interest.

    All your government needs to do is make a show of good faith. Unfortunately they only make shows of bad faith at the moment, which is why your credit rating is really crap.

    CFK should write a book titled: How to make a rich country poor in under 5 years.

    The ideal Christmas present for CFK would be: Economics for Dummies.

    Alas I fear it's too late for Argentina, as CFKs miraculous economic model has sent you country spinning into the abyss of financial ruin.

    Dec 03rd, 2012 - 06:54 am 0
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