Argentina won’t have to post at least $250 million as security while a U.S. court considers its appeal of rulings requiring that holders of its defaulted bonds be paid when payments are made on its restructured debt.
Holders of the defaulted bonds, which include Paul Singer’s NML Capital Ltd. and Aurelius Capital Management, asked the U.S. Court of Appeals in New York to order that Argentina put up the money to ensure they’ll be paid if the nation loses its appeal. The court denied the request today in a two-sentence order.
U.S. District Judge Thomas Griesa in Manhattan ruled Nov. 21 that Argentina had to pay $1.3 billion claimed by holders of the defaulted debt into an escrow account by Dec. 15 if it made about $3 billion in scheduled payments on the restructured debt this month. The rulings sparked a rout in Argentine bonds and caused Fitch to cut ratings on the country’s debt.
Argentina is appealing Griesa’s decisions, supported by investors who participated in two debt restructurings. Bank of New York Mellon Corp., the trustee for the restructured bonds, yesterday asked the court for permission to participate in the appeal.
The appeals court last week delayed the effect of Griesa’s orders and set Feb. 27 for oral argument in the case.
International law dollar bonds due 2017 rallied to a four-week high, jumping 1.9 cents to 80.35 cents on the dollar at 1:28 p.m. in New York.
The case is NML Capital Ltd. v. Republic of Argentina, 12-105, U.S. Court of Appeals for the Second Circuit (Manhattan).