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Donnerstag, 14. April 2016

Restructured bondholders now set to cash in pending US$3 billion

Money was deposited in banks but never reached individual accounts

Thursday, April 14, 2016

Restructured bondholders now set to cash in pending US$3 billion

Yesterday’s decision at New York’s Appeals Court ratifying the end of the injunction against Argentina’s restructured debt payments puts the money that the country could not transfer to its creditors back in the spotlight.
Around US$3 billion that should have been paid to holders of Argentina’s restructured debt has been in limbo since June 2014, after District Judge Thomas Griesa’s ruling blocked those transfers.
Argentina deposited US$538 million at the Bank of New York Mellon (BONY) back in June 2014, but Griesa warned the bank not to wire the money to the creditors if it didn’t want to face sanctions.
After those payments could not be materialized, Cristina Fernández de Kirchner’s government passed the Sovereign Payment law through Congress which called for the opening of a new account at the Banco Nación Fideicomiso in order to pay restructured debt holders in Buenos Aires, outside of Griesa’s jurisdiction.
Although Argentina deposited around US$2.5 billion at the Nación Fideicomiso, restructured debt holders did not accept the government’s proposal to be paid within the country.
Now that the Sovereign Payment law has been repealed and the injunction against the country has been lifted, those payments are likely to be completed through BONY again.
As the dollars deposited by Argentina did not reach the individual accounts of the country’s debt holders, the money is still being counted as part of the Central Bank’s foreign currency reserves.
Thus, the monetary authority’s coffers stand to lose US$3 billion when the payments are completed, although if part of the money from next week’s bond issue remains at home then reserves could end up seeing net gains.
No schedule to pay the restructured bondholders has been discussed yet.
Herald with DyN

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