Argentina's plan to bypass US court ruling branded 'illegal'
President Cristina Fernandez plans to circumvent judge Griesa by making interest payments to other bondholders in Argentina
Friday 22 August 2014
Argentina's debt battle with the US courts has taken yet another twist after a judge branded its latest efforts to avoid paying the vulture fund holders of bonds from its default in 2001 as “illegal”.
Hedge funds led by New York billionaire Paul Singer’s NML Capital swept up bonds cheaply in the wake of the 2001 default. They have refused to accept a debt restructuring, unlike most other bondholders who exchanged their debt for lower-value bonds.
In 2012 Judge Thomas Griesa ordered Argentina to pay the recalcitrant hedge funds $1.33 billion (£802 million) plus interest when it next made a payment to holders of the exchanged bonds.
Argentina, led by president Cristina Fernandez, has refused to comply as this would trigger much bigger payments to the holders of the exchanged bonds. Griesa froze an interest payment to the holder of exchanged bonds in June, pushing Argentina into a second default in 13 years.
Fernandez this week announced plans to circumvent the judge by making interest payments to other bondholders through her nation’s central bank rather than the US banks subject to Griesa’s orders.
“It is illegal, and the court directs that it cannot be carried out,” Griesa said. The president’s bill would make state-controlled bank Banco Nacion the intermediary for bondholder payments instead of BNY Mellon.
- 1 Planes go hybrid-electric in important step to greener flight
- 2 Antonio Martin shooting: Police and protesters clash over teenager's death just five miles from Ferguson, Missouri
- 4 Hip hop is both racial and political, and for Iggy Azalea to suggest otherwise is insulting
- 5 Man hospitalised with pneumonia after downing eggnog at office Christmas party
British actor Idris Elba cannot star as James Bond because he is black, says shock jock Rush Limbaugh
Rozanne Duncan: Ukip expels councillor for 'jaw-dropping' comments made in BBC TV interview
Germany anti-Islam protests: 17,000 march on Dresden against 'Islamification of the West'
Ukip member gets into Christmas spirit with Union Flag plea to Santa 'for our country back'
BBC director Danny Cohen: Rising UK antisemitism makes me feel more uncomfortable than ever
Alex Salmond has 'broken his word to the Scottish people' says Scottish Lib Dem leader
iJobs Money & Business
Highly Competitive: Selby Jennings: Our client, a leading European Oil trading...
£43500 per annum + pension + holidays: The Jenrick Group: Night Shift Operatio...
£20000 - £25000 per annum + OTE £40,000 + Car + Pension: SThree: SThree are a ...
£20000 - £25000 per annum + OTE £35K: SThree: We consistently strive to be the...