International Financial Law Prof Blog

Editor: William Byrnes
Texas A&M University
School of Law

Saturday, August 2, 2014

Argentina sinks into default, US bondholders seek government assets

512px-Banco_Central_de_la_República_ArgentinaArgentina rating cut to 'selective default' by S&P (Market Watch)

Standard & Poor's Ratings Services cut the credit rating on Argentina's foreign currency bonds to "selective default" on Wednesday due to nonpayment.

Argentina's Default Sends Ripples Through Markets (WSJ)

Argentina's failure to pay its debts sent ripples through financial markets Friday as its bonds fell for a second day and an industry group ruled investors can collect on insurance that protects against a default.

Argentina Is in Default, and Also Maybe in Denial (NY Times)

The_Global_Financial_Context_Paul_SingerThis was the country’s political machine in overdrive after last-ditch mediated talks to avert a default broke down in New York. Argentina has been battling a group of hedge funds — so-called holdouts — who sued the country for a full payment of $1.5 billion on bonds that Argentina defaulted on in 2001. [image of Paul Singer via Wikimedia Commons from WEF

Argentina’s predicament has arisen from a ruling by a federal judge in the United States that it could not make its regular payments on bonds without also paying the hedge fund holdouts.

See U.S. Supreme Court decision on Scotus Blog Republic of Argentina v. NML Capital 2048px-US_Supreme_Court

Holding: The Foreign Sovereign Immunities Act of 1976 does not provide a foreign-sovereign judgment debtor with immunity from post-judgment discovery of information concerning its extraterritorial assets.

JudgmentAffirmed, 7-1, in an opinion by Justice Scalia on June 16, 2014.

See 2nd Cir. Court Appeals decision here

See Scotus Blog - The Argentine bond saga, made simple

How an American hedge fund forced Argentina into default (VOX)

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