January 24, 2018
Monday, July 21, 2014

Argentina repeats 'stay' request ahead of hearing with judge Griesa

Argentina has formally asked judge Thomas Griesa to put on hold an order requiring it to pay the 'vulture funds' who did not participate in debt restructurings, while it seeks a "global resolution" to the ongoing legal dispute.

Lawyers for the country filed papers asking Griesa to stay the ruling that it pay holdout investors, in order to meet obligations to other bondholders currently awaiting payment.

The audience, which will take place at 10.30am ET, was requested by the financial entities that participated in debt restructuring efforts, as they seek an explanation from Griesa over the funds deposited by Argentina for the payment of bondholders who entered debt swaps in 2005 and 2010.

Argentina, which has been in settlement talks, said any deal must take into account other bondholders and factor in a clause in its restructured bonds that could open it up to further liability.

"As those risks remain, so does the necessity and appropriateness of a stay," Argentina's lawyers wrote.

In the presentation, the country maintains that the lifting of the embargo would also allow negotiations with holdouts to prosper.

The document presented by Argentina's lawyers argues that the chances of the conflict being resolved "have been further complicated by an attempt by 'vulture funds' to seize assets from Chevron, which has an exploration agreement with petroleum company YPF.

The payment to the holdouts, led by Elliott Management's NML Capital Ltd and Aurelius Capital Management, was due at the time of Argentina's next payment to the 92 percent of its creditors who participated in debt swaps in 2005 and 2010 following the country's $100 billion default.

Argentina last month attempted to make a $539 million payment to the restructured bondholders due June 30. But Griesa deemed it a violation of his order and told Bank of New York Mellon Corp to return the money.

A 30-day grace period is now in effect before a default can be declared.

In today's court filing, Argentina renewed arguments that the holdouts should not be allowed to put at risk its prior restructurings.

The country's lawyers said any deal needed to resolve not just claims by the plaintiffs but also those of other holdout creditors. Holdout creditor claims total as much as $20 billion globally, Argentina said.

Argentina argued any resolution must also be consistent with a clause in the restructured bonds' contracts that would open it up to billions of dollars in additional claims if triggered before it expires at the end of this year.

Argentina said it continues to participate in settlement talks before a court-appointed mediator, Daniel Pollack.

"But that process must take into account these legal and factual constraints," Argentina's lawyers wrote.

NML did not respond to requests for comment and Aurelius had no immediate comment.

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Tags:  Vulture funds  Argentina  Supreme Court  Griesa  negotiations  

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