Web Sify
Follow us on
Mail
Print

Argentina to court: revert order on debt holdouts

Source : AP
Last Updated: Sat, Dec 29, 2012 15:30 hrs

Argentina is asking a US appeals court to reverse an order for the country to pay $1.33 billion to "holdout" creditors who refused to join two swaps for the country's defaulted debt.

Argentine government lawyers said in papers filed late Friday that the order violates the country's sovereignty. The lawyers say the order also threatens service on at least $24 billion of the county's restructured sovereign debt, impairs the rights of third parties and puts global debt markets at risk.

The U.S. 2nd Circuit Court of Appeals in New York ordered the country on Oct. 26 to pay the holdouts an equal amount whenever it makes payments on other debt that has been restructured since the country's economic collapse 11 years ago.

The ruling gave Argentina a difficult choice: pay all bondholders equally, or paying none of them and risk going into default.

The court then returned the case to U.S. District Judge Thomas Griesa who ordered Argentina to pay the $1.33 billion into escrow for holders of its defaulted debt and banned banks from intervening. The order was later suspended by the appeals court and Argentina sidestepped economic chaos.

To end the lengthy dispute, Argentine government lawyers said in the briefing that the country is willing to ask Congress to give holdout creditors the same treatment as those who joined a 2010 debt swap.

The new arguments are part of the final stage of Argentina's legal battle with NML Capital Ltd., the investment fund that brought the case and that specializes in suing over unpaid sovereign debts.

The US government filed an "amicus," or friends of the court brief, late Friday backing Argentina's request for a rehearing in the case citing that the appeals court order affects US-Argentina relations, threatens the solution of future debt restructurings and blocks the legal immunity given to a sovereign country. It also says that it potentially blemishes the role of New York as financial center.

Argentina tarnished its reputation worldwide by engaging in the biggest sovereign debt default in history.

Argentina has restructured about 92 percent of its world record $95 billion debt default since then.

President Cristina Fernandez refuses to pay the holdouts and uses the term "vulture funds" when she talks about NML Capital and others who have refused two opportunities to swap defaulted bonds for new, less valuable bonds that the government has reliably paid since 2005.




More from Sify:
blog comments powered by Disqus
most popular on facebook
talking point on sify news