NEW YORK, Feb 22 (IFR) - Argentina’s bonds rallied by up to two points on Monday after a favorable ruling on Friday in the country’s legal battle against holdout creditors.
Argentina’s 2033 Discount notes were among the most active on Monday morning, jumping by around two points to 120 in early trading. The 2038 Par bonds, meanwhile, rose by about a point to 65.5, according to a New York-based trader.
Late Friday, the judge presiding over Argentina’s decade-long battle with creditors who did not participate in its 2005 and 2010 restructurings, signaled he would be willing to lift an injunction preventing Argentina from servicing its foreign debt.
The injunction - which was meant to bring Argentina and holdouts to the negotiating table - forced the sovereign to default on its restructured bonds in 2014.
US Judge Thomas Griesa said that it would serve the public interest to lift the injunctions, provided that Argentina repeals two laws concerning its debts and pays all creditors who agree by February 29 to settle.
“It was the first favorable ruling from (US judge) Griesa towards Argentina and took the market by surprise,” said Siobhan Morden, head of Latin America fixed income strategy at Nomura.
A key Argentine lawmaker and analysts said on Monday that Congress is likely to repeal the two laws blocking settlements with creditors, Reuters reported.
Some profit-taking emerged after the early rise in prices with the Discounts quoted at 119 as of 09:00am.
“It’s hard to say (if there is more upside),” said a New York-based trader. “Flows here are two-way.” (Reporting by Davide Scigliuzzo; Editing by Jack Doran)