Wednesday, July 2, 2014

Buenos Aires, Neuquén confirm payment to bondholders in NY

Argentine provinces of Buenos Aires and Neuquen confirmed they will meet their foreign debt’s deadlines at the end of the month despite the federal government’s risk of default after US Judge Thomas Griesa blocked the funds deposited for restructured bondholders.

Both provincial governments will be the first to pay foreign creditors in New York after Griesa’s decision last week. Buenos Aires faces a 40-million dollars deadline on July 26, while Neuquén has to pay 21,8 million dollars before that date.

Buenos aires “will pay in due time and form,” said a spokesperson from the provincial Economy Ministry, stressing that Griesa’s decision has no effect in the province’s economy.

Meanwhile, Neuquén’s Economy Minister Omar Gutiérrez said the province is not involved in any legal battle with its bondholders and that it is paying “in due time and form, both local and foreign bonds”.

Griesa’s ruling orders the federal government to pay holdout hedge funds and the Judge prohibited New York banks to allow payment on Argentina’s restructured bondholders until holdouts are paid.

Provincial funds are not affected by Griesa’s ruling and cannot be subjected to embargoes since, legally, they are not National government's property.