Creditors push back in court on Argentine bond tap

viernes 15 de mayo de 2015 12:12 GYT

By Davide Scigliuzzo and Paul Kilby

NEW YORK, May 15 (IFR) - Argentina and its defiant holdout creditors crossed swords again this week, as the latter tried to sabotage the sovereign's successful tap last month of some local law bonds.

NML and Aurelius Capital, two funds at the centre of a long battle with Argentina over its previous debt restructurings, filed a motion in the US courts to broaden a 2012 injunction.

That ruling, which banned Argentina from paying debt-holders that accepted the restructuring without making whole those that didn't, effectively pushed it into its second default in 13 years.

Now, the holdouts want Judge Thomas Griesa to extend that to the local law Bonar 8.75% 2024s, which Argentina tapped last month for US$1.4bn despite the holdouts' strong objections.

"Holdouts will attempt to get Judge Griesa to declare that the last sale of Bonar 2024s was a concealed international distribution, which would mean it is external indebtedness," said Jorge Piedrahita, CEO of brokerage Torino Capital.

"It is highly unlikely that the holdouts will be able to prove such a thing," he wrote in a note to clients. "And even if they did, it has to go through the appeal process."

Priced four years after the second restructuring, the 2024s were not part of that debt exchange and thus were never covered by Griesa's original injunction.

But with the mess around Argentina's debt showing no sign of resolution - and an election coming in October to replace President Cristina Kirchner - the latest legal challenge might dissuade the sovereign from trying to sell more debt.   Continuación...