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Narrow Ruling Opens Door for Single Bond Payment from Argentina

By: PanAm Post Staff - Jul 30, 2014, 8:00 am

EspañolOn Monday, New York Judge Thomas Griesa authorized Argentina to make a one-time payment on bonds issued under the South American country’s law. He did so because those securities could not be distinguished from bonds the country gave Spanish oil company Repsol earlier this year for the expropriation of its local subsidiary.

The green light comes after the judge blocked payments to bondholders under US law until Argentina pays off its debt with holdout creditors.

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US Judge Thomas Griesa. (Diario Veloz)

“This court does not wish to affect the agreement with Repsol,” stated Griesa in his decision. He was referring to the bonds that Cristina Kirchner’s government gave to the Spanish oil company Repsol as compensation in April 2012.

In June of this year, after Griesa’s order, the Bank of New York Mellon returned a payment from Argentina. The intention of the payment was to cancel obligations with bondholders that received bonds issued after the debt restructuring agreements in 2005 and 2010.

However, the recent decision will not avoid Argentina’s imminent default, after a US$1.3 billion debt with the so-called “vulture funds” since 2001.

A delegation comprising Finance Secretary Pablo López, Federico Thea, a representative of the Legal and Administrative Secretariat, and Angelina Abbona, a lawyer from the Treasury, will hold a meeting tomorrow in New York with Special Master Daniel Pollack in last minute negotiations to avoid default.

Sources: Prensa LibreDiario Veloz, Wall Street Journal.