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Montevideo, September 24th 2018 - 09:50 UTC

US Appeals court sends Argentina back to Judge Griesa on BONY's case

Thursday, October 23rd 2014 - 05:57 UTC
Full article 13 comments
In a order the Appeals court said it lacked jurisdiction as the August ruling by District Judge Griesa was a clarification rather than modification In a order the Appeals court said it lacked jurisdiction as the August ruling by District Judge Griesa was a clarification rather than modification
Griesa in his August ruling said BONY's retention of Argentine funds would not violate his prior orders or subject it to liability Griesa in his August ruling said BONY's retention of Argentine funds would not violate his prior orders or subject it to liability

A U.S. appeals court on Wednesday dismissed the Argentine government's appeal of an order directing Bank of New York Mellon Corp to hold onto 539 million dollars the country deposited for its restructured bondholders.

The 2nd U.S. Circuit Court of Appeals in New York in a brief order said it lacked jurisdiction over the appeal as the August ruling by U.S. District Judge Thomas Griesa was a clarification rather than modification of his earlier rulings on the matter.

Griesa had ruled that the 539 million that Argentina deposited in June with BNY Mellon for bondholders who participated in two sovereign debt restructurings was “illegal,” and in an August order, directed the bank to retain the funds. The judge, in his August ruling, also said BNY Mellon's retention of the funds would not violate his prior orders or subject it to liability.

Argentina was declared in technical default in July after refusing to honor court orders to pay 1.33 billion plus interest to U.S. hedge funds suing for full payment on bonds following its earlier 2002 default.

The hedge funds, led by NML and Aurelius Capital Management, had spurned the country's 2005 and 2010 debt restructurings, which resulted in exchanges for about 92% of the country's defaulted debt. Investors who exchanged bonds were paid less than 30 cents on the dollar.

Argentina's most recent default came after the U.S. Supreme Court declined to hear Argentina's appeal of a ruling that it must pay the holdouts when it paid holders of the exchanged bonds.

Griesa subsequently blocked BNY Mellon from processing a 539 million interest payment on what Argentina says is over 28 billion in debt. The order sent Argentina on a course to default after no settlement was reached.

A later order, the one Argentina appealed, set out BNY Mellon's responsibilities to hold onto the money. Judge Griesa said BNY Mellon's retention of the funds would not violate his prior orders or subject it to liability.
 

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  • Holdout.from.Germany

    Why President Kirchner could presumably solve the Holdout problem as soon as possible, may be already in January 2015 (after expiry of the RUFO clause)?

    1, “Contempt of the court” by Judge Griesa should be ASAP revoked

    2, The accelaration of the defaulted swapped bonds (PAR & Disc) should be avoided

    3, An agreement with the Holdouts would be a win-win situation for everybody!

    For Argentina, for the Holdouts and also for the exchange bondholders, whose bonds rates would also be considerably increased.

    4, A completed final agreement with the Holdouts would improve Argentina's ratings, initiate a firework of investments and enable also cheaper credits for argentine companies.

    5, Also seizure risks and a technical Default would be immediately averted. Argentina could immediately return to the capital market and thus Argentina could refinance the payments to the holdouts, without using reserves.

    6, Left glory and honor of finishing the 13 years old default others?
    It would be a historic event and come in the historic books, if President Kirchner after 13 years finally finished this HORROR Default with an amicable agreement with the holdouts.

    HOW COULD BE THE CONDITIONS FOR THE REPAYMENT?

    Argentina owes to today about 230% to the Holdouts (since 2002
    Argentina had not repaid a cent to the holdouts)

    - after the end of RUFO clause Argentina should repay in CASH 100% of the nominal value of the defaulted bonds, which became due before 2015.

    - For the accrued interest between 2002-2015 (until now about 130%), Argentina should emit new bonds with a maturity of 5-7 years.

    Oct 23rd, 2014 - 12:04 pm 0
  • yankeeboy

    Slap

    Rg arrogance makes them stupid, or is it their stupidity makes them arrogant?

    chicken egg, egg chicken
    hmmm

    Oct 23rd, 2014 - 12:13 pm 0
  • chronic

    I didn't see that coming. heee heee heee

    Oct 23rd, 2014 - 01:45 pm 0
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