Dec. 13 (Bloomberg) -- Investors who hold Argentina’s restructured bonds were granted permission by a federal court in New York to join their challenge with an appeal filed by Argentina in a case involving the country’s defaulted bonds.
The U.S. Court of Appeals in Manhattan accepted a request by the Exchange Bondholder Group, which agreed to trade its defaulted debt for new bonds, to consolidate the appeals and to consider its arguments alongside Argentina’s at a Feb. 27 hearing.
The one-sentence ruling came in response to a request filed by the group yesterday.
Argentina and the exchange bondholders are fighting rulings by U.S. District Judge Thomas Griesa in New York that would have required the country to pay $1.3 billion owed to defaulted bondholders into an escrow account when it makes payments on the restructured debt.
The exchange bondholders, who aren’t parties to the litigation between Argentina and the defaulted debt-holders, claim that a ruling against the South American nation would threaten their ability to collect.
Argentina won a delay of Griesa’s orders while it appeals. The delay permits it to make scheduled payments on the exchange bonds this month without making the escrow payments.
Also today, the U.S. government said it may wish to file a brief supporting Argentina’s request for a rehearing of the appeals court’s Oct. 26 decision that the nation must pay holders of its defaulted debt if it pays holders of the restructured bonds. The U.S. had supported Argentina’s position on the so-called pari-passu issue.
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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