Argentine GDP-Linked Euro Bondholder Seeks to Join Appeal

A holder of Argentine GDP-linked euro bonds asked a U.S. court of appeals for permission to intervene as a nonparty in a lawsuit by holders of defaulted bonds against the country.

ICE Canyon LLC, a Los Angeles-based firm that holds or manages 417 million euros ($550 million) in bonds linked to Argentina’s gross domestic product, filed a request yesterday with the court in New York to be heard in the country’s appeal of a November order that it pay holders of defaulted bonds if it’s going to pay holders of restructured bonds.

The investment management firm said it has interests that are distinct from those of holders of other euro-denominated Argentine exchange bonds, who earlier sought to intervene in the case, because the securities it holds only get paid when Argentina’s gross domestic product meets certain targets.

“No party or intervenor appears to hold the GDP-linked securities affected by the November 21 orders, and those securities are materially different, in ways that may impact the outcome on appeal, than the exchange bonds held by the other entities whom this court already has permitted to intervene,” ICE Canyon said.

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.

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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, has also asked the court for permission to participate in the appeal.

ICE Global said in its filing that the GDP-linked securities affected by Griesa’s order have no nexus to the U.S., are governed by English, Welsh or Argentine law, and are paid through a paying agent in Western Europe.

The appeals court this month delayed the effect of Griesa’s orders and set Feb. 27 for oral argument in the case.

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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