Argentina payment plan adds to creditor frustration

martes 23 de septiembre de 2014 16:14 GYT

By Davide Scigliuzzo

NEW YORK, Sept 23 (IFR) - Argentina is expected to deliver a US$200m coupon payment in the next week on its restructured Par bonds, but frustrated investors still have little chance of getting their hands on the money.

After rejecting Bank of New York Mellon as trustee amid a legal battle with holdout creditors, Argentina will now turn to the local affiliated fiduciary of Banco Nacion instead.

The sovereign is expected to deliver the coupon payment to the domestic bank before the September 30 due date, but even bondholders willing to go to Buenos Aires for the cash are likely to come up empty.

"As a practical matter, the chances of the payment reaching the beneficial bondholders seem very remote," said Henry Weisburg, a partner at law firm Shearman & Sterling.

"I don't even know whether any mechanism is in place for bondholders to prove their interest and collect their payment at Banco Nacion."

The coupon payment is intended to show that Argentina has the ability to continue servicing its international debt despite a default in July that grew out of the legal battle.

But observers say it will do little to resolve the fight in the US courts or bring the sovereign any closer to emerging from its debt woes.

"It might be a public relations victory, but it doesn't change the status of the agreement itself," one lawyer said.   Continuación...