UPDATE 3-U.S. judge says Argentine debt payment illegal, should be returned

viernes 27 de junio de 2014 19:12 GYT

(Adds Argentine government comment)

By Nate Raymond and Joseph Ax

NEW YORK, June 27 (Reuters) - A U.S. judge on Friday called Argentina's decision to make a sovereign debt payment in defiance of a court order an "explosive action" and told Bank of New York Mellon to return the money to the government.

U.S. District Judge Thomas Griesa in New York told lawyers representing Argentina and BNY Mellon that any attempt to make payment to bondholders without complying with his court is illegal.

"It cannot be done and it will not be permitted by this court. I want the banks and all concerned to know that... This payment cannot be made and anybody who attempts to make it will be in contempt of court," said Griesa, who was appointed to the court by U.S. President Richard Nixon in 1972.

On Thursday, Argentina deposited $539 million in BNY Mellon's account at the Central Bank of Argentina intended only for bondholders who participated in two sovereign debt exchanges in 2005 and 2010. In total the government transferred $832 million for payment to various bondholders.

In a statement, Argentina's government fired back, saying Griesa was abusing his power and going beyond his jurisdiction by blocking its attempt to pay holders of its restructured bonds. It said the transferred money no longer belonged to Argentina.

"He has tried to provoke our country to default," the government's statement said, calling Griesa's decision "senseless and unheard of."

Argentina said the deposit was made in order to meet a June 30 coupon payment deadline. There is a 30-day grace period, however, before a default can be declared if exchange bondholders do not receive their money.   Continuación...