US judge Thomas Griesa on Friday accepted the priority repayment claims of hundreds more Argentine bondholders who did not join a huge debt restructuring. The ruling, on 49 complaints representing debt worth $6.1 billion, added fresh pressure on Buenos Aires which has refused to pay off two hedge fund creditors that already won court support for their claims.
New York District Court Judge Griesa said the 530 bondholders behind the 49 complaints have the same claim to be paid the full value of their long-defaulted bonds as NML Capital and Aurelius Capital Management.
In 2012 Griesa ruled that, based on specific terms of its bond contracts, Argentina must pay those two US hedge funds the full face value of the bonds they hold, now worth nearly $1.8 billion, before it pays anything to exchange bondholders.
Those are the large majority of the country's creditors who agreed to a write-down of their bonds in a restructuring of $100 billion in defaulted debt.
Argentina has maintained that the holdouts -- like the hedge funds, which it labels vultures -- do not deserve full payment and has refused to abide by the court's orders.
It lost several appeals and last year Griesa affirmed the rule and effectively blocked a payment to exchange bondholders, forcing the country back into default.
On Friday Griesa said that another 49 cases lodged against Buenos Aires by holdouts -- labelled me-toos -- have the same rights as the hedge funds. That would effectively raise to almost $9 billion Argentina is ordered by the court to pay out before it can repay any of its other creditors.
The court wrote in its decision that Buenos Aires has violated its promise to rank plaintiffs' bonds equally with its later-issued external indebtedness.
It added: The Republic has made clear its intention to defy any money judgment issued by this court, and plaintiff has no other means to enforce its rights.
Argentina has said that the requirement to pay both the hedge funds and the me-toos is too onerous for its Treasury and would harm the Argentine people.
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BCRA spent 6,5 bn USD in October in order to keep the dolar blue at bay, an action pretty much liken to flushing these funds down the toilet. Imagine how much better these dollars would have been spent ridding Argentina of the vulture funds and getting the country out of default. The stupidity of the K-regime has no limits.Oct 31st, 2015 - 12:34 pm 0
What would have been smarter would have been for Nestor to buy the bonds back, specifically the $150 million the NML purchased years ago.Oct 31st, 2015 - 01:15 pm 0
For $150 million we could have avoided this fiasco, but alas he was too busy doing backroom deals with Lazaro Baez.
@2Oct 31st, 2015 - 02:00 pm 0
You would need a time-machine in order to achieve that. What can be done, however, is avoid burning off another 6 bn USD (if there's that much left) in November. Not likely, however. Macri will inherit a huge mess.