(MENAFN- AFP) Holders of Argentine euro-denominated bonds said Friday they were appealing a New York court's freeze on payment by Buenos Aires, an order that has pushed the country into default.
Lawyers for the eurobond holders told the US district court in New York that they would ask an appeals court to overrule Judge Thomas Griesa, who ordered a freeze on their payment last month.
Griesa had ruled that the payment to the eurobond holders could not go ahead unless Argentina simultaneously pays off the hedge funds which had sued the country to demand payment on their bonds.
Argentina placed $539 million into an account of Bank of New York Mellon at the Argentine central bank at the end of June to meet a scheduled payment to holders of the country's restructured bonds.
But Griesa forbade the bank from transferring the money to the bondholders, in line with his previous 2012 ruling.
Argentina, he said, must first comply with an order that hedge funds which did not join the bond restructuring program after the country's 2001 default be paid in full for the $1.3 billion in bonds they hold.
Argentina says the hedge funds, which it labels "vultures", gave up the chance for payment when they rejected the restructuring deal, which was accepted by 92 percent of the country's creditors.
But Griesa has repeatedly ruled in favor of the hedge funds, NML Capital and Aurelius Capital Management, and threatened to hold Bank of New York in contempt of court if it transfers the money.
He also forbade the bank from returning the money to the Argentine government.
Holders of the eurobonds and other non-dollar-denominated Argentine debt say the New York court does not have jurisdiction over their bonds, and that their payments should not be held up by the claims of the hedge funds.
Argentina and the hedge funds have sought to find a compromise, most recently exploring whether another group of investors, mainly banks, could buy the hedge funds' bonds to satisfy their claims.
But those talks went nowhere, leaving the parties at odds as the country - already ruled in default by ratings agencies - approaches new scheduled interest payments in the coming months.
Legal Disclaimer:
MENAFN provides the information “as is” without warranty of any kind. We do not accept any responsibility or liability for the accuracy, content, images, videos, licenses, completeness, legality, or reliability of the information contained in this article. If you have any complaints or copyright issues related to this article, kindly contact the provider above.