MercoPress. South Atlantic News Agency

US Judge seizes 2.43 billion USD Argentine government deposits in New York

New York federal Judge Thomas Griesa

New York Federal Judge Thomas Griesa seized 2.43 billion US dollars that Argentina’s government owned Banco Nación had deposited in the city in response to a claim presented by a group of Argentine bondholders that did not make it into the debt-swap.

In this way, these funds could be used by the US judiciary to pay bondholders that did not accept the 2005 debt restructuring or the swap launched by the Argentine government this month.

The Argentine Saver's Association explained that Griesa's ruling was claimed for by “the lawyers of the retail bondholders in New York” that would have around US$4.4 billion in Argentine bonds in their possession.

These professionals, according to the entity, represent all those absent bondholders that have not presented an individual claim, which include Argentine, Italian, US, and Swiss retirees and savers.

“The New York justice has ordered a seizure on all Banco de la Nación public and private assets, for considering it as an alter ego of the Argentine Republic,” US bondholders stated in a communiqué.

Also, bondholders remembered that this is the second confirmed seizure in favour of absent bondholders, aside from the seizure on collateral bonds from the Guaranteed Loans.

According to a Buenos Aires city newspaper, all bondholders that do not get an individual trial in New York, but that possess defaulted bonds in Argentina and that have not opted to voluntarily adhere to the debt-swap, “will benefit from these measures.”

However the ruling is basically a freezing of the funds and next June 3 the court reconvenes when Argentina is expected to present an appeal.

Meanwhile, the time given by the Argentine government to bondholders in order to adhere to the debt-swap of defaulted bonds -which amounts to 18.3 billion US dollars, runs out. It was launched last May 7 and will remain open until June 7.

During the first phase, directed at major bondholders, the government obtained an adhesion of only 45% from bondholders, and if the second phase is successful, the acceptance rate would be elevated to 60%.