Griesa accepts ‘me too’ claims and raises Argentina’s bond debt to US$ 9bn

Argentina has maintained that the “holdouts”, which it labels “vultures”, do not deserve full payment and has refused to abide by the court's orders.

 New York District Court Judge Griesa said the 530 bondholders behind the 49 complaints have the same claim to be paid the full value of their long-defaulted bonds as NML Capital and Aurelius Capital Management.

In 2012 Griesa ruled that, based on specific terms of its bond contracts, Argentina must pay those two US hedge funds the full face value of the bonds they hold, now worth nearly $1.8 billion, before it pays anything to “exchange” bondholders.

Those are the large majority of the country's creditors who agreed to a write-down of their bonds in a restructuring of $100 billion in defaulted debt.

Argentina has maintained that the “holdouts” -- like the hedge funds, which it labels “vultures” -- do not deserve full payment and has refused to abide by the court's orders.

It lost several appeals and last year Griesa affirmed the rule and effectively blocked a payment to exchange bondholders, forcing the country back into default.

On Friday Griesa said that another 49 cases lodged against Buenos Aires by holdouts -- labelled “me-toos” -- have the same rights as the hedge funds. That would effectively raise to almost $9 billion Argentina is ordered by the court to pay out before it can repay any of its other creditors.

The court wrote in its decision that Buenos Aires “has violated its promise to rank plaintiffs' bonds equally with its later-issued external indebtedness.”

It added: “The Republic has made clear its intention to defy any money judgment issued by this court, and plaintiff has no other means to enforce its rights.”

Argentina has said that the requirement to pay both the hedge funds and the “me-toos” is too onerous for its Treasury and would harm the Argentine people.

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