Euroclear ordered not to process Argentina payments

GMT 03:05 2015 Thursday ,26 March

Arab Today, arab today Euroclear ordered not to process Argentina payments

Bilboard showing a poster from government-related movement San Martin
New York - AFP

New York judge Thomas Griesa on Wednesday barred Euroclear, the giant Belgium-based financial clearing and settlement house, from processing any debt payments by Argentina.
In the newest step tightening Buenos Aires' avenues for avoiding paying off hedge funds on their bonds, Griesa forbade Euroclear from processing "any payments received from any source" in respect to Argentine bonds.
Griesa, judge in the Southern New York Federal District Court, also said that Euroclear has to notify the hedge funds of any transfers of Argentine bonds and identify the parties involved.
The order came after NML Capital, Aurelius Capital Management, and Olifant Fund petitioned Griesa to block the country's bond payments through Euroclear until they are paid for their bonds under Griesa's 2012 ruling.
Buenos Aires has sought to pay most of its creditors who joined its 2005 and 2010 debt restructurings, but has rejected the court's order to pay the hedge funds which refused to join those restructurings, the so-called holdouts.
The holdouts are demanding the full value of their bonds, while those who participated in the restructurings, after Argentina defaulted on $100 billion in debt in 2001, accepted writing off up to 70 percent of the value of their holdings.
Buenos Aires says it would be unfair to creditors who participated in the restructuring, and possibly undermine the restructuring deal, if it meets the hedge funds' demands.
On March 12, Griesa ruled that Citigroup's Argentine subsidiary is not allowed to process payments for the government even on US dollar bonds issued under Argentine law, cutting off one of the country's avenues for avoiding compliance with his order to pay the hedge funds.
Citi has since then announced that it will shut down its Argentine custody business in order to avoid being caught between conflicting laws, those of Argentina and those applied in Griesa's rulings.


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