November 22, 2014
Argentina offers to open 'vulture fund' negotiations; Griesa warns against changing payment jurisdiction
48 hours after a US Supreme Court ruling rejected an appeal of Argentina in the case against vulture funds, Argentina's attorneys today informed US Judge Thomas Griesa that government officials plan to travel to New York next week to negotiate with holdouts to solve this situation.
The magistrate in turn warned that reopening swaps to change the debt's jurisdiction to Argentina, as proposed by Economy minister Axel Kicillof, would be considered a breach of the ruling.
"The mechanism of the sort proposed by the finance minister would be a violation of the procedures and orders of the court," Griesa said.
"I have been told the plan is to be here next week to negotiate with the holdouts to resolve this situation," said Carmine Boccuzzi of Cleary Gottlieb Steen & Hamilton at a hearing before Griesa in Manhattan.
The negotiations are part of an attempt by the country to avoid default, though Boccuzzi said "an exchange offer is not happening at this time."
Griesa had ordered Argentina to pay the holdout funds $1.33 billion at the same time it pays bondholders who participated in the 2005 and 2010 restructurings of Argentina's $100 billion of bonds. The restructured bond holders are due a payment on June 30. If the payment isn't made, Argentina would enter a technical default on the restructured debt.
"What I want is a legal mechanism to prevent another situation where the Republic can laugh off another judgment," Griesa said today.
The meeting between the two parties today at 3 pm was confirmed earlier to Buenosairesherald.com.
On Monday, the US Supreme Court declined to hear an appeal by Argentina in its battle against the hedge funds which refused to take part in its debt restructuring. This left intact Griesa's ruling ordering the country to pay the holdouts.
As a result of the Supreme Court's decision, the 2nd US Circuit Court of Appeals in New York formally lifted the stay it had placed on Griesa's injunction that bars payment to exchange bondholders via the US banking system unless holdouts are paid at the same time.
That means Griesa's order that Argentina pay all the bondholders at the same time, including the $1.33 billion to the holdouts, is now in effect.