U.S. judge rules for more Argentine creditors suing for payment

Reuters News
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Posted: Oct 22, 2015 5:41 PM

By Nate Raymond

NEW YORK (Reuters) - A U.S. judge ruled on Thursday that holders of $234 million in defaulted Argentine bonds suing for full payment had been treated unequally to creditors who had participated in the country's past restructurings.

U.S. District Judge Thomas Griesa in Manhattan ruled that Argentina had made no new arguments to justify treating the creditors in the 15 lawsuits differently than several similar holdouts who held $5.4 billion of defaulted bonds that he granted similar relief to in June.

These holdout bondholders are often called "me-too" creditors for seeking the same relief as several hedge funds who had secured a ruling ordering Argentina to pay it $1.33 billion plus interest.

The latest batch of creditors include Trinity Investments Limited and MCHA Holdings LLC and hold bonds totaling about $235 million in principal, according to court papers.

Anthony Costantini, a lawyer for creditors including Trinity and MCHA, called the ruling "gratifying." A lawyer for Argentina had no immediate comment.

The ruling marked the latest development in long-running litigation by creditors seeking full repayment on Argentine bonds following its $100 billion default in 2002.

Those creditors spurned Argentina's 2005 and 2010 debt restructurings, which resulted in 92 percent of its defaulted debt being swapped and investors being paid less than 30 cents on the dollar.

The country defaulted again in July 2014 after refusing to honor court orders to pay $1.33 billion plus interest to holdouts including Elliott Management's NML Capital Ltd when it paid holders of restructured bonds.

The Argentine government refers to the holdouts as "vultures" for picking over the carcass of its 2002 default that plunged millions of Argentines into poverty.

Griesa has scheduled a hearing for next Wednesday to determine whether to expand that order to apply to other creditors who he ruled were not treated equally as the restructured bond holders.

Earlier on Thursday, Argentina's economy minister said he expected Griesa to expand the amount the country must pay the so-called "me-too" creditors to $8 billion, beyond what it was previously ordered to pay NML and other holdouts.

"This just goes to show it was a trick, paying those $1.6 billion would not have solved anything," said Argentina's Economy Minister Axel Kicillof.

(Reporting by Nate Raymond in New York; additional reporting by Sarah Marsh and Richard Lough in Buenos Aires; Editing by Chris Reese)