Argentina asks US court to block bond payments

Argentina asked a judge in New York to deny a request by holders of $5.4bn in claims on defaulted bonds to block the nation from paying its restructured debt unless it also pays them.

Argentina yesterday asked US District Judge Thomas Griesa to deny 37 so-called me-too requests filed by 526 investors, claiming it could be forced to pay at least $10bn in additional claims.

“No country the size of Argentina could afford to pay that amount without subjecting its economy and citizens to an unacceptable degree of catastrophic risk,” it said in court papers.

Griesa in 2012 blocked the South American nation from paying restructured bondholders unless it pays a group led by Paul Singer’s NML Capital that claims $1.7bn in defaulted debt. That ruling triggered a flurry of requests by other defaulted bondholders seeking similar treatment.

Argentina argued most of the 526 claimants have won money judgments and aren’t entitled to further relief. It also said the requests go beyond the rulings of an appeals court in the case.

Argentina hasn’t sold bonds abroad since it defaulted on $95bn in debt in 2001. After the default, holders of about 92% of the repudiated debt agreed to take new bonds, at a discount of about 70%. NML and other hedge funds and individuals sued for full payment in the US.

Bloomberg