Sunday, March 13th 2016 - 22:22 UTC

Argentine bonds: US Appeals court puts on hold Judge Griesa's lifting of injunctions

United States appeals court put on hold a United States District Judge Thomas Griesa ruling lifting injunctions that have restricted Argentina from paying off some debts in light of the country’s US$6.5 billion offer to settle litigation over bonds in default since 2002.

The Second US Circuit Court of Appeals confirmed the March 2 ruling by Griesa until it could hear an appeal by creditors opposed to the lifting of the injunctions.

According to court documents, Argentina did not oppose the creditors’ request to stay the order.

Argentina secured an expedited appeal, arguing that “without prompt resolution, settlement of the largest claims in this long-running litigation may be in jeopardy.”

Most of holdouts appealed arguing that the settlements could fall apart if the remaining plaintiffs, holding 15% of the claims, are not given a chance to settle too.

 The Second US Circuit Court of Appeals in New York confirmed the March 2 ruling by Griesa until it could hear an appeal by creditors opposed to the lifting of the injunctions. Argentina still has until April 14 to pay the US$4.65 billion deal with the largest holdouts.

According to court documents, Argentina did not oppose the creditors’ request to stay the order. It had earlier secured an expedited appeal, arguing that “without prompt resolution, settlement of the largest claims in this long-running litigation may be in jeopardy.”

The Second Circuit, in an order issued earlier set a briefing schedule that would run through March 25. It said the date of any arguments would be determined “at a later time.”

Griesa’s ruling vacating the injunctions was conditioned on Argentina repealing two laws concerning its debts — Sovereign Payment and Padlock— and paying creditors who by February 29 reached settlements with the administration of president Mauricio Macri.

Those laws prevent Argentina from offering holdouts better terms than those offered to entities who agreed to restructure defaulted debt in 2005 and 2010. The Argentine Finance and Budget committees of the Lower House have already cleared for debate government’s bill to lift the two pieces of legislation.

Argentina filed the request to lift the injunctions after offering on February 5 to pay US$6.5 billion to settle lawsuits by various bondholders stemming from its record US$100 billion default in 2002. Argentina has reached agreements in principle to pay more than US$6.4 billion to creditors, including US$4.65 billion to four of the biggest creditors — which have to be paid before April 14.

The injunctions at issue prevented Argentina from servicing its restructured debt until it paid the investors, who spurned its 2005 and 2010 debt restructurings. Those restructurings resulted in 92% of its defaulted debt being swapped and investors being paid less than 30 cents on the dollar.

In 2014, Argentina refused to heed to Griesa’s orders that it must pay the holdout hedge funds — led by NML and Aurelius — at the same time it paid bondholders who participated in the debt exchanges following the country’s earlier default. That order came after the US Supreme Court declined to hear Argentina’s appeal against Griesa’s ruling and settlement talks went nowhere.

Before his ruling, creditors had asked Griesa to delay his decision to lift the injunctions against Argentina for another month, claiming more time was needed for Argentina to reach a deal with the holdouts who haven’t accepted the settlement offer yet.

Nevertheless, the US Judge said “circumstances have changed so significantly as to render the injunctions inequitable and detrimental to the public interest.” He claimed there was a “pressing need for certainty and finality” if the settlements are to succeed and that further delay could “seriously erode” Argentina’s ability to raise capital to fund the deals.

Following his ruling, most of the holdouts appealed, including Elliott Management and Aurelius Capital, arguing that the settlements could fall apart if the remaining plaintiffs, holding 15 percent of the claims in the litigation, are not given a chance to settle too.

22 comments Feed

Note: Comments do not reflect MercoPress’ opinions. They are the personal view of our users. We wish to keep this as open and unregulated as possible. However, rude or foul language, discriminative comments (based on ethnicity, religion, gender, nationality, sexual orientation or the sort), spamming or any other offensive or inappropriate behaviour will not be tolerated. Please report any inadequate posts to the editor. Comments must be in English. Thank you.

1 Marti Llazo (#) Mar 13th, 2016 - 10:53 pm Report abuse
All of which appears to point to the folly of Prat-Gay in rushing a half-baked solution to the Argentine congress and trying hand-wave his way through before tidying things up with the remaining holdouts. Wasn't the toxic detritus of “remaining holdouts” what got them into the last default? That whole rush effort and the appearance of assembling cooperative majorities in both houses now seems at the point of unraveling. Getting the money before 14 April is seeming less likely. Already talk here of the next default.
2 chronic (#) Mar 14th, 2016 - 12:14 am Report abuse
This sounds familiar. Now when was it that I outlined this approximate scenario? February?
3 Marti Llazo (#) Mar 14th, 2016 - 01:30 am Report abuse
@2 Your observations were in good company. Even the government is forecasting deficits for the next several years.
4 Skip (#) Mar 14th, 2016 - 05:06 am Report abuse
Seems Argentina just keeps advancing on this matter. At this rate the matter will be sorted this year. And past history when the next election comes around.

Canny political operator that Macri.
5 Enrique Massot (#) Mar 14th, 2016 - 06:45 am Report abuse
All those Argentina-haters can now rejoice. Macri has agreed to pay Singer everything and then some. All in the name of “returning to the world markets.”
In reality, this is the new chapter of Argentina's new cycle of indebtedness, which is gonna end the same as the previous ones: with a few lining their pockets and the majority going down to poverty and unemployment.
6 gordo1 (#) Mar 14th, 2016 - 07:40 am Report abuse
“gonna” - what does this mean? In which dictionary will I find a translation of this strange word?
7 Redrow (#) Mar 14th, 2016 - 08:55 am Report abuse
@5
“All those Argentina-haters can now rejoice.”
If Argentina left the Falkland Islanders alone I might feel some genuine pity. But Argentina can't be a hateful bully and demand sympathy at the same time.
8 Marti Llazo (#) Mar 14th, 2016 - 01:10 pm Report abuse
@5 “ ....with a few lining their pockets ....”

-- The Kirchner mafia set a pretty high standard for that sort of thing

www.clarin.com/politica/Kirchnerismo-Cristina_Kirchner-patrimonio-millones-gabinete-funcionarios_K-bienes-Nestor_Kirchner-Juan_Manzur-Ricardo_Echegaray_0_1476452927.html

@5 “ Macri has agreed to pay Singer everything and then some.”

- - Patently false, as usual.

@5 “ All those Argentina-haters can now rejoice.”

-- Hatred is like respect. You have to earn it.
9 chronic (#) Mar 14th, 2016 - 04:01 pm Report abuse
@4 Pollyannaish drivel.
10 Enrique Massot (#) Mar 15th, 2016 - 04:01 am Report abuse
#7 Redrow
“If Argentina left the Falkland Islanders alone...”
Dream on.
11 Redrow (#) Mar 15th, 2016 - 07:29 am Report abuse
Exactly Enrique, so you can cry all you like about Argentina having to pay its debts. No-one else cares.
12 Heisenbergcontext (#) Mar 15th, 2016 - 05:14 pm Report abuse
@Redrow

Touche.
13 Enrique Massot (#) Mar 15th, 2016 - 06:48 pm Report abuse
#11 Redrow
Oh no that's so sad!
I will give Macri a call and tell him to relinquish Argentina's claim on Islas Malvinas, so that Redrow and all his friends and relatives will actually care about Argentina.
And we'll be finally saved.
14 Troy Tempest (#) Mar 15th, 2016 - 06:56 pm Report abuse
@13 Enrique

You seem to have difficulty understanding the concepts of hypocrisy, right & wrong, and other people's property and rights.

By the way, the Cree Nation want your house and property back.
15 Moderator (#) Mar 16th, 2016 - 10:55 am Report abuse
so do the Sioux, Apache, Pawnee etc.
16 Marti Llazo (#) Mar 16th, 2016 - 12:40 pm Report abuse
What is now Argentine patagonia will be returned to the Tehuelches and Mapuche people within 25 years.
17 Enrique Massot (#) Mar 16th, 2016 - 08:21 pm Report abuse
Well. President Macri is one step closer to give the vultures what they wanted, all in the name of “rejoining the world.”
We've seen this movie being played before, and we already know the way it ends; with the country on its knees and begging for help from the IMF.
A troubling scenario indeed.
18 Captain Poppy (#) Mar 16th, 2016 - 08:28 pm Report abuse
Quique you're the kind of Hispanic that most of the world loaths. The kind who do not take responsibility for their own actions, deadbeats.

When is a contract no a contract.......when a South American latin takes the money and runs. That's no different than hitting an old lady in the face and stealing her pocketbook. At any rate, your human waste as you speak in Canada while bitching and moaning about Macri. I;d call you a wetback but Mexicans have better values than you and your find.
19 Marti Llazo (#) Mar 16th, 2016 - 09:31 pm Report abuse
@17 reeky hasn't heard that they're also getting ready to round up the kirchneristas and herd them off in cattle cars to camps in Neuquen where work will set them frei and they will have to buy their own choripan.

Does reeky understand why “We've seen this movie being played before” ?

It's because in the past, it was Peronists who were picking the movies.

While they lined their pockets.

In the voting in the lower house in Argentina today, kirchnerism looked like a hollow shell, a bunch of drunken boy-scouts. Máximo played the complete fool. The vote to approve the three measures to allow the payment of the debt was about two to one against the KK, in favour of the measures. Of course, the latest Griesa decision to deny pari passu protection to several thousand remaining holdouts probably helped.
20 Troy Tempest (#) Mar 16th, 2016 - 10:38 pm Report abuse
@17 Enrique

“We've seen this movie being played before, and we already know the way it ends; with the country on its knees and begging for help from the IMF.
A troubling scenario indeed.”

Trying to pay off your debts to existing creditors, forging trade deals, dialog, negotiation, and selling investment bonds, is a far cry from “begging from the IMF”.

Contrast Macri to CFK and Kiciloff - thumbing their noses at existing creditors because they think Venezuela will back Arg. with Oil $$ (oops!) and begging the Chinese for money.

“A troubling scenario, indeed.”
21 Marti Llazo (#) Mar 17th, 2016 - 12:16 am Report abuse
I see that the central bank is paying the equivalent of 38 percent annual interest on local t-bills in Argentine pesos. What does that tell you about the solid nature of the ARS?
22 Troy Tempest (#) Mar 17th, 2016 - 07:27 pm Report abuse
@17 Enrique

From Canada, blindly defending the K's and the previous government - Enrique is out of touch with the thoughts of the people who live there, and constantly discounts Clarin and media reports he does not agree with.

April 30th, 2014,
A reply to Enrique's comments on his own Facebook page where he says the Arg. media is jumping to conclusions to lay blame for train crash in BA in 2014:

Susana Helbling wrote;

“Enrique aqui en la Argentina todo funciona mal. El paIs esta descontrolado. La presidenta es unay no sabe lo que hace!!!!!”

translated,

“Enrique here in Argentina everything goes wrong. The country is wild. The president is sectarianism, you do not know what she is doing!!!!!”

Commenting for this story is now closed.
If you have a Facebook account, become a fan and comment on our Facebook Page!

Advertisement

Get Email News Reports!

Get our news right on your inbox.
Subscribe Now!

Advertisement