UPDATE 1-Argentina halts bond sale after judge's ruling

jueves 26 de febrero de 2015 09:46 GYT
 

(Adds details on court order)

By Davide Scigliuzzo

NEW YORK, Feb 26 (IFR) - Argentina has halted the planned sale of Bonar 2024 bonds to non-US investors hours after a US judge ordered banks managing the sale to produce documents and witnesses for a deposition.

The banks, Deutsche Bank and JP Morgan, did not provide an explanation for putting the sale on hold, according to two investors with direct knowledge of the deal.

The decision, however, comes after US District Judge Thomas Griesa on Wednesday issued an order requiring the banks to immediately hand over documents related to the transaction and to provide witnesses for a deposition at 15:00 EST (2000 GMT) on Thursday.

The court order came in response to a subpoena served on February 9 by lead holdout creditor NML Capital, a unit of Elliott Management Corp, to the two banks.

In order to avoid legal hurdles in the US, where Argentina is engulfed in a decade-long standoff with creditors who did not participate in its 2005 and 2010 debt restructurings, the banks were marketing the bond issue exclusively to non-US investors.

Argentina, which has been shut out of the capital markets since its 2001 default, was hoping to raise at least US$2bn through the sale, with proceeds expected to refinance upcoming maturities.

It began marketing the transaction on Wednesday.

Deutsche Bank and JP Morgan declined to comment. (Reporting by Davide Scigliuzzo; Editing by Marc Carnegie)