Tags: Argentina | Mellon | debt | contract

Argentina Says BNY Mellon Violating Contract as Debt Talks Begin

Monday, 07 Jul 2014 10:43 AM

Argentina said Bank of New York Mellon Corp. is violating its contract as trustee of the country’s debt obligations by withholding a payment to holders of restructured debt that was due June 30.

U.S. District Court Judge Thomas Griesa is exceeding his jurisdiction by blocking payment to holders of bonds issued under U.K. law, President Cristina Fernandez de Kirchner’s government said today in a legal notice published in the country’s newspapers. Last week, holders of Argentina’s euro-denominated bonds asked a U.S. judge for an emergency ruling to help them recover money from the blocked payment.

An Argentine delegation led by Economy Minister Axel Kicillof will meet today with a mediator to seek a negotiated solution to a ruling forcing the country to pay holders of defaulted debt in full when it makes payments on its restructured debt. Griesa on June 27 blocked BNY Mellon from paying $539 million to holders of foreign law restructured bonds until Argentina pays a group of litigators led by billionaire Paul Singer’s Elliott Management Corp. about $1.5 billion.

Argentina has met its obligations to holders of England and Wales law bonds restructured in 2005 and 2010 and “removes itself from any responsibility or incompletion that any ruling or the conduct of the trustee (Bank of New York Mellon) may try to impose on Argentina,” the government said in the notice.

The extra yield investors demand to hold Argentine debt over U.S. Treasurys narrowed 0.02 percentage point to 6.71 percentage points at 11:06 a.m. in Buenos Aires, according to JPMorgan Chase & Co.’s EMBIG Diversified index. The so-called spread fell to the lowest in three years on June 25.

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Argentina said Bank of New York Mellon Corp. is violating its contract as trustee of the country's debt obligations by withholding a payment to holders of restructured debt that was due June 30.
Argentina, Mellon, debt, contract
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2014-43-07
Monday, 07 Jul 2014 10:43 AM
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