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Montevideo, March 24th 2019 - 15:39 UTC

Argentine Euro-bond holders have appealed Griesa's ruling blocking payment

Saturday, August 16th 2014 - 09:01 UTC
Full article 16 comments
Euro bondholders have argued that their bonds should be exempt because they are governed by the laws of England and Wales Euro bondholders have argued that their bonds should be exempt because they are governed by the laws of England and Wales
Argentina argues the country fulfilled its obligations but was blocked by Griesa, whom they have criticized, saying he overstepped his authority. Argentina argues the country fulfilled its obligations but was blocked by Griesa, whom they have criticized, saying he overstepped his authority.

Holders of Euro-denominated Argentine bonds have appealed judge Thomas Griesa's ruling blocking Argentina from making payments on their debt, according to a court filing.

 In a notice filed in Manhattan federal court, lawyers for the bondholders challenged an August 6 ruling from US District Judge Griesa that Argentina cannot pay the bondholders until it also pays holdout investors who refused to restructure their debt in the wake of Argentina's 2001-2002 default.

Meanwhile, Citigroup Inc and Argentina on Friday were granted an expedited appeal of another order from Griesa that barred future payments to holders of certain US dollar-denominated restructured bonds, after the judge allowed the bank to make a one-time payment.

Both appeals will be considered by the 2nd US Circuit Court of Appeals in New York. The court on Friday set oral arguments in the Citibank matter for Sept. 18.

Argentina was considered in default after missing a July 30 deadline for payments on restructured bonds. Argentine officials have claimed the country fulfilled its obligations but was blocked by Griesa, whom they have criticized, saying he overstepped his authority.

In June, Argentina deposited 539 million dollars in Bank of New York Mellon Corp's account at the Central Bank of Argentina, earmarked for bondholders who participated in sovereign debt exchanges in 2005 and 2010. It also deposited funds with Citibank Argentina.

But Judge Griesa blocked the payments, saying Argentina's actions were an “illegal” violation of his prior orders.

The Euro bondholders have argued that their bonds should be exempt because they are governed by the laws of England and Wales and paid through foreign banking institutions.

“At no point in the Euro bonds' payment chain do funds comprise US dollars, enter the US, or flow through US entities,” lawyers for the bondholders argued in a previous court filing in June.

Separately, in July, Griesa permitted Citibank to pay some bondholders because the bank indicated it was unable to differentiate between dollar-denominated exchange bonds and bonds issued as part of a settlement between Argentina and Repsol SA, which are not part of the bond dispute.

However the Judge said he would not allow a second payment and ordered the bank to figure out a way to tell the difference, prompting Argentina and Citibank to appeal.

Top Comments

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  • ChrisR

    Well, we will soon see whether the Euros get a bye.

    I think it will be more of a bye, bye and shut the door on the way out; if only for the fact that all big banks have a branch in NY and the overarching Fed rules will stop them.

    Aug 16th, 2014 - 11:01 am 0
  • Conqueror

    And where is the money? In a U.S. bank. Forget it europrats. Of course, there is an option. Tell argieland to deposit another 539 million dollars in a European bank. If any European bank will accept such a deposit. Meanwhile, the 539 million dollars in the New York bank can be paid to the holdouts. Argieland couldn't stop it. It's “paid”. No longer its money. A quarter of argie debt paid.

    Aug 16th, 2014 - 01:20 pm 0
  • Don Alberto

    There is little doubt that holders of bond under United Kingdom laws are entitled to be paid. Europe is not under US jurisdiction, and jurisdiction is what counts.

    “Governing Law

    ... interpreted in accordance with, the laws of the State of New York or the laws of England and Wales ...
    Jurisdiction, Consent to Service, Enforceability and Immunities from Attachment
    The securities and the indenture provide that, subject to certain exceptions, Argentina will submit to
    the following courts (to which we refer collectively as ””speciÑed courts'') in connection with any suit, legal
    209
    action or proceeding against Argentina or its properties, assets or revenues with respect to the securities or
    the indenture:
    o: with respect to securities governed by New York law, any New York State or U.S. federal court sitting in the Borough of Manhattan, The City of New York and the courts of Argentina; and
    o: with respect to the securities governed by English law, the courts of England and the courts of Argentina.

    2005 Original prospectus for Argentina’s 2005 debt exchange
    http://www.mecon.gov.ar/finanzas/download/us_prospectus_and_prospectus_supplement.pdf

    Aug 16th, 2014 - 07:45 pm 0
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