Saturday, 26 July 2014
Last updated 15 hours ago
Nov 29 2012 | 1:29pm ET
Just weeks before facing the unpleasant choices of paying the hedge funds it calls "vultures" or defaulting for the second time in a decade, Argentina has won a crucial reprieve.
The same federal appeals court that last month upheld a ruling that requires Argentina to pay holdouts from its debt restructuring, led by hedge funds Elliott Associates and Aurelius Capital Management, reinstated a stay on that ruling that a lower-court judge junked last week. The reprieve, even if it is temporary, means that Argentina will not default on its exchanged debt next month. Its next payment after that is not due until March.
The U.S. Second Circuit Court of Appeals scheduled a hearing for Feb. 27 on the matter. Argentina had asked the court to stay the ruling until it exhausts its appeals, which could feature a rehearing by the full Second Circuit—a three-judge panel of that body rejected Argentina's first appeal in October—or a hearing before the U.S. Supreme Court.
A stay was also pushed for by Argentina's exchange bondholders. While Argentina had no comment on the ruling, a lawyer for its creditors said that the decision "signals [the court's] understanding of the serious constitutional and equitable issues at stake."
The ruling is a blow for Elliott and the holdouts; U.S. District Judge Thomas Griesa had ordered Argentina to pay $1.3 billion into an escrow account to cover payments due them on the defaulted debt. Griesa also signaled that he had run out of patience for Argentina, writing, "the less time Argentina is given to devise means for evasion, the most assurance there is against such evasion."
Jul 8 2014 | 10:48am ET
The surge in derivatives regulation is among the most complex challenges facing the financial services industry today. Northern Trust’s Joshua Satten recently spoke with FINalternatives to share insights into the challenges presented by new regulation and explore how the industry is responding. Read more…