The Bank of New York Mellon (BNY) sent a formal letter to holders of Argentina's exchange bonds essentially confirming that the sovereign had defaulted.

Thursday, July 31, 2014

Bank of New York Mellon confirms still holding Argentina's payments

The Bank of New York Mellon (BNY) sent a formal letter to holders of Argentina's exchange bonds essentially confirming that the sovereign had defaulted.

The letter confirmed that BNY, acting as trustee, was still holding the funds that would have covered the payment due by July 30 in the wake of a US court order not to release the funds.

That order came from Judge Thomas Griesa, who ordered Argentina to pay holdout creditors in full when it made its next payment to holders of the exchange, or restructured, bonds.

"Pursuant to the court's earlier orders, the trustee continues to hold the funds," said the letter.

"The funds are held pending any further court order. The nature and timing of any future court order regarding the funds are not yet known," it added.

Argentina slipped into its second default since 2001 when the midnight Wednesday deadline to make the payment to the exchange holders passed without payment being made.