Argentina's Legal Moves Turn Up the Heat on Bond Holdouts

  • Republic announced new $110 million settlement Thursday
  • Macri administraion seeking to get U.S. judge on its side

Argentina’s new administration turned up the pressure on holdout creditors, reaching a $110 million resolution with one bondholder and renewing its call for a U.S. judge to let it resume paying its restructured debt.

Representatives of President Mauricio Macri Friday urged U.S. District Judge Thomas Griesa to drop injunctions barring Argentina from paying holders of its new debt before it pays on bonds the country repudiated in 2001. 

"The injunctions make it effectively impossible for Argentina to access the global capital markets," Argentina said in a filing in Manhattan federal court. "Without access to the international capital markets, the republic cannot finance payments to achieve a global resolution of the claims of the holders of its defaulted debt."

Argentina announced Feb. 5 that it had agreements to resolve more than $1 billion in claims by Dart Management Inc. and Montreux Partners. The government said it reached the $110 million agreement with Capital Markets Financial Services on Thursday.

Argentina said in its filing that it has "engaged in intense negotiations for weeks" with the holdout hedge funds, including Paul Singer’s Elliott Managementand Aurelius Capital Management. An eight-hour session yesterday involved "senior Argentine officials,” according to the filing.

Stephen Spruiell, an Elliott spokesman, didn’t immediately respond to an e-mail seeking comment on Argentina’s filing. Aurelius spokesman Brian Schaffer had no immediate comment.

The case is NML Capital v. Republic of Argentina, 08-cv-06978, U.S. District Court, Southern District of New York (Manhattan).

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