NML Capital Asks for Expedited Ruling on Argentine Bonds

Elliott Management Corp.’s NML Capital Fund asked a court for an expedited ruling in a bid by creditors to collect on defaulted Argentine bonds, claiming Argentina’s leaders “have stated their intention never to comply” with a recent court decision in the case.

A federal appeals court in New York ruled Oct. 26 that Argentina can’t make payments on restructured sovereign debt while refusing to pay holders of its defaulted bonds. The decision caused Argentine bonds to drop the most in four months. The appeals court sent the case back to a lower-court judge to clarify how a payment formula is intended to work and to determine how the court’s orders apply to intermediary banks and other third parties.

In a letter to U.S. District Judge Thomas Griesa today, NML asked for an expedited decision, citing press statements by Argentine President Cristina Fernandez de Kirchner and members of her cabinet that, according to NML, show the country is trying to evade the appeals court ruling.

“It is clear that Argentina now is in the process of trying to render the equal treatment orders ineffective and will employ and exploit any delay tactics necessary to evade this court,” NML lawyer Robert A. Cohen said.

2001 Default

The appeals court ruling was a victory for Elliott Management, the $21 billion New York-based hedge founded by billionaire investor Paul Singer, and other investors who declined to participate in two debt restructurings by Argentina, which defaulted on the bonds in 2001.

In the letter, Cohen also asked Griesa to confirm that orders he’d issued requiring Argentina to pay on its defaulted bonds if it makes payments on the restructured debt are now in effect. Griesa’s orders had been stayed during the appeal. According to Cohen, Argentina is obligated to make more than $3.8 billion in payments on the restructured debt next month.

Argentine dollar bonds have lost 17 percent since the court decision, according to data compiled by JPMorgan Chase & Co. Their 2.2 percent loss this month is the biggest among emerging markets tracked by JPMorgan’s EMBI Global index.

Jonathan Blackman, a lawyer for Argentina, declined to comment on the letter.

The case is NML Capital Ltd. v. Republic of Argentina, 12-105, U.S. Court of Appeals for the Second Circuit (Manhattan).

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