Argentina wins court ruling letting bond sale proceed

epa05188013 Argentinian Public Treasury Minister Alfonso Prat-Gay delivers a presser at the Ministry in Buenos Aires, Argentina, 29 February 2016. The Argentine government has agreed to pay $4.65 billion to four hedge funds who were holding out from debt restructuring accepted by 93 percent of other creditors.  EPA/David Fernández


Argentina can go ahead with a planned $15 billion bond sale to pay off holdout creditors from a 2001 default, ending more than a decade of litigation over repayment of the debt that kept South America’s second-biggest economy out of international credit markets.
The U.S. Court of Appeals in New York cleared the way for the bond sale by upholding a judge’s ruling that allows the republic to repay the holdout creditors, including Elliott Management.
Government officials have held meetings with potential investors in New York and London this week ahead of the sale. The country hopes to issue bonds within a week, Finance Minister Alfonso Prat-Gay told reporters in New York.
The ruling puts an end to a long and bitter court battle that had both blocked Argentina from paying holders of its restructured debt and from issuing new bonds. Argentina and the U.S. government had urged the court to allow the deal to proceed.
A panel of three judges ruled for Argentina less than a half hour after hearing arguments in the appeal. Lawyers for Paul Singer’s Elliott Management and Aurelius Capital Management urged the court to reverse a judge’s decision to drop orders barring Argentina from making payments on its restructured debt before paying off the defaulted bonds.
Argentina’s benchmark defaulted bonds due 2033, which trade with accrued interest, climbed 2.2 cents to a record 123.82 cents on the dollar at 4:15 p.m. in New York following the court’s decision, while Argentina’s benchmark stock index rose to a five-week high.
Argentina plans to start receiving offers for the bonds on Monday, sell the bonds on Tuesday and pay the holdouts on Friday, according to Finance Minister Prat-Gay. The proceeds from the $15 billion bond sale will be used to pay the holdouts, to pay the past due interest to restructured bondholders and for infrastructure projects in Argentina.
The ruling came a day before a payment deadline that gave Elliott Management and three other hedge funds the option to back out of their historic $4.65 billion settlement with Argentina. Lawyers for Elliott Management and Aurelius Capital Management told the judges they won’t cancel the agreement if they’re paid soon.

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