8/8/2014
BUENOS AIRES – U.S. judicial rulings in a case involving Argentine debt constitute a violation of the South American nation’s sovereignty, Argentina said in a brief filed Thursday with the International Court of Justice in The Hague.
Decisions in favor of hedge funds demanding 100 cents on the dollar for Argentine bonds bought in the wake of Buenos Aires’ 2001 default “violate the Republic of Argentina’s sovereign determination to restructure its external debt,” President Cristina Fernandez’s office said in a statement.
“Given that a state is responsible for the conduct of all of its organs, the violations cited have generated a controversy between the Argentine Republic and the United States, which our country summits to the International Court of Justice for resolution,” the statement said.
Argentina’s filing appears to be largely symbolic, as the ICJ can only hear the case if the U.S. government agrees to accept the court’s jurisdiction.
The tribunal in The Hague will formally notify the United States of the Argentine motion, but Washington is under no obligation to respond, ICJ sources told Efe.
Argentina defaulted on roughly $100 billion in debt in December 2001 – the largest sovereign default in world history – amid a financial meltdown and economic depression.
More than 92 percent of Argentina’s creditors accepted steep haircuts in 2005 and 2010 debt restructurings.
Among the holdout creditors are several hedge funds, led by Elliott Management Corp.’s NML Capital Ltd unit and Aurelius Capital Management, that sued Buenos Aires in the U.S. courts for full payment on bonds they bought at large discounts in 2002.
In 2012, U.S. District Court Judge Thomas Griesa ordered Buenos Aires to repay more than $1.3 billion in defaulted debt to NML, Aurelius Capital and the other litigating hedge funds.
Argentina’s appeal of Griesa’s decision reached the U.S. Supreme Court in June, but the justices declined to hear the challenge.
Buenos Aires then deposited $539 million with a New York bank to cover interest payments due on June 30 to holders of restructured debt, but Griesa has prohibited the bank from distributing those funds until Argentina settles with the hedge funds.
Full payment to the hedge funds would lead other holdout bondholders to demand the same, the Fernandez administration says, representing a potential liability of some $15 billion, equivalent to half of Argentina’s foreign-exchange reserves.
Rating agency Standard & Poor’s last week declared Argentina to be in selective default for failing to make the $539 in interest payments to holders of restructured debt.
Argentina, however, insists it has not defaulted and accuses Griesa of exceeding his authority by standing between the creditors and their money.
The origins of the debt problem go back to Argentina’s 1976-1983 military regime, whose policies spurred a 465-percent explosion in government indebtedness.
source
BUENOS AIRES – U.S. judicial rulings in a case involving Argentine debt constitute a violation of the South American nation’s sovereignty, Argentina said in a brief filed Thursday with the International Court of Justice in The Hague.
Decisions in favor of hedge funds demanding 100 cents on the dollar for Argentine bonds bought in the wake of Buenos Aires’ 2001 default “violate the Republic of Argentina’s sovereign determination to restructure its external debt,” President Cristina Fernandez’s office said in a statement.
“Given that a state is responsible for the conduct of all of its organs, the violations cited have generated a controversy between the Argentine Republic and the United States, which our country summits to the International Court of Justice for resolution,” the statement said.
Argentina’s filing appears to be largely symbolic, as the ICJ can only hear the case if the U.S. government agrees to accept the court’s jurisdiction.
The tribunal in The Hague will formally notify the United States of the Argentine motion, but Washington is under no obligation to respond, ICJ sources told Efe.
Argentina defaulted on roughly $100 billion in debt in December 2001 – the largest sovereign default in world history – amid a financial meltdown and economic depression.
More than 92 percent of Argentina’s creditors accepted steep haircuts in 2005 and 2010 debt restructurings.
Among the holdout creditors are several hedge funds, led by Elliott Management Corp.’s NML Capital Ltd unit and Aurelius Capital Management, that sued Buenos Aires in the U.S. courts for full payment on bonds they bought at large discounts in 2002.
In 2012, U.S. District Court Judge Thomas Griesa ordered Buenos Aires to repay more than $1.3 billion in defaulted debt to NML, Aurelius Capital and the other litigating hedge funds.
Argentina’s appeal of Griesa’s decision reached the U.S. Supreme Court in June, but the justices declined to hear the challenge.
Buenos Aires then deposited $539 million with a New York bank to cover interest payments due on June 30 to holders of restructured debt, but Griesa has prohibited the bank from distributing those funds until Argentina settles with the hedge funds.
Full payment to the hedge funds would lead other holdout bondholders to demand the same, the Fernandez administration says, representing a potential liability of some $15 billion, equivalent to half of Argentina’s foreign-exchange reserves.
Rating agency Standard & Poor’s last week declared Argentina to be in selective default for failing to make the $539 in interest payments to holders of restructured debt.
Argentina, however, insists it has not defaulted and accuses Griesa of exceeding his authority by standing between the creditors and their money.
The origins of the debt problem go back to Argentina’s 1976-1983 military regime, whose policies spurred a 465-percent explosion in government indebtedness.
source
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