Opinion divided on Argentina debt rally after UK ruling

viernes 13 de febrero de 2015 15:03 GYT
 

By Davide Scigliuzzo

NEW YORK, Feb 13 (IFR) - Argentina's defaulted bonds rallied Friday after a UK court ruling on their jurisdiction, surprising many in the market who saw little reason for optimism about the country's debt.

Its euro and dollar-denominated bonds rose in secondary trade after a London judge said the euro notes fell under UK jurisdiction. The euros were up as much as three points.

But market-watchers poured cold water on the rally, saying the ruling had done little to untangle the messy legal fight over Argentina's second default in 13 years.

"The rally in bond prices might be due to a general rosy feeling, but there is no obvious legal basis for it," said Henry Weisburg, a partner at New York law firm Shearman & Sterling.

"The euro bondholders do not obtain any concrete relief from this ruling." The firm is not involved in the case.

Friday's ruling resulted from a UK court challenge by holders of the euro notes, including George Soros's Quantum Partners.

They argued that they were unfairly penalized by a US court injunction preventing Argentina from making scheduled interest payments on the bonds unless other creditors are paid as well.

Those other so-called holdout creditors own some Argentine bonds but have rejected the terms of Argentina's 2005 and 2010 restructurings, which would have left them with just around 30 cents to the dollar on their holdings.   Continuación...