Elliott unit extends legal fight on Argentina debt to China

jueves 28 de agosto de 2014 18:44 GYT

By Davide Scigliuzzo

NEW YORK, Aug 28 (IFR) - A unit of billionaire Paul Singer's Elliott Management, which is Argentina's main holdout creditor, is extending its legal fight with the South American nation to China.

NML Capital served subpoenas this week to Bank of China (BOC) and Industrial and Commercial Bank of China (ICBC) in an effort to obtain information on US$6.8bn in financing for deals signed by the two countries in July.

"We want to understand the mechanics of these credit facilities to establish whether assets to which Argentina has a legal title could surface in jurisdictions where we would be able to attach them," a lawyer advising Elliott told IFR on Thursday.

The subpoenas are aimed at a US$4.7bn facility provided by China Development Bank, ICBC and BOC to finance the construction of two hydroelectric dams in Patagonia and a US$2.1bn loan from China Development Bank and ICBC to finance the Belgrano Cargas railway project.

Both deals were signed by Argentine President Cristina Fernandez and her Chinese counterpart, Xi Jinping, during an official visit of a Chinese delegation to Buenos Aires.

Elliott hopes to be able to track the payment mechanisms and time legal actions in any relevant jurisdiction accordingly.

The hedge fund is also hoping to bring to light disclosures that Argentina may have made to its Chinese creditors with respect to its dispute with the holdouts, which in July pushed Argentina into its second default in 13 years.

"We think that Argentina may have provided some assurances to the lenders that they have plans to evade the pari passu injunction," said the lawyer, referring to an injunction issued in 2012 by US district court Judge Thomas Griesa that prevents Argentina from paying holders of its restructured bonds unless it also makes holdouts whole.   Continuación...