By Jonathan Stempel
Nov 6 (Reuters) - Armed with a favorable court ruling,
bondholders who refused to take part in Argentina's massive
restructuring of defaulted debt urged a Manhattan federal judge
on Tuesday to force the country to quickly drop its resistance
to paying what it owes.
NML Capital Ltd, an affiliate of Elliott Management Corp,
made its request on behalf of holders of $1.4 billion of
defaulted debt after a federal appeals court last month said
Argentina discriminated against bondholders who refused to join
2005 and 2010 debt swaps by deciding to pay them later.
U.S. District Judge Thomas Griesa had early this year
ordered Argentina to treat bondholders equally. But he put that
decision on hold while Argentina appealed to the 2nd U.S.
Circuit Court of Appeals in New York.
That court's Oct. 26 decision against Argentina caused the
country's bond prices to tumble and prompted Standard & Poor's
to downgrade its sovereign credit rating.
The 2nd Circuit returned the case to Griesa to determine how
the payment formula is to work and how his orders apply to third
parties such as intermediary banks.
But NML said Argentine President Cristina Fernandez de
Kirchner and other cabinet-level officials have pledged "never
to comply" with court orders to pay dissident bondholders,
including those that officials have labeled "vulture funds."
NML asked Griesa to schedule a Nov. 15 hearing at which he
could lift his earlier stay on payments, before Argentina's
scheduled payment next month of billions of dollars of interest
to bondholders who participated in the swaps.
Argentina "will employ and exploit any delay tactics
necessary to evade this court," NML's lawyer, Robert Cohen,
Adrian Cosentino, Argentina's finance secretary, did not
immediately respond to requests for comment.
The debt restructurings were intended to help Argentina
recover from a roughly $100 billion default a decade ago.
Holders of about 93 percent of that debt participated in the
swaps. Since the default, Argentina has stayed out of global
credit markets, partly on fear that holdout bondholders could
block new debt issues.
The case is NML Capital Ltd et al v. Argentina, U.S.
District Court, Southern District of New York, No. 08-06978.
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