LONDON/BUENOS AIRES, April 3 Argentina has made
a scheduled coupon payment on its 2038 Par bonds and will pay
interest on its 2015 Boden bonds later on Wednesday, a
spokeswoman at the country's Economy Ministry said.
Investors are worried the South American country could
trigger a technical default if a U.S. appellate court rules
against it in a case brought by "holdout" creditors suing for
full repayment on bonds in default since 2002.
The coupon on the Par bond came due on March 31, but the
government advised ahead of time it would make the payment on
April 3 due to national holidays on April 1-2.
Argentina issued the Par bond during its 2005 and 2010 debt
exchanges, accepted by about 92 percent of creditors who had
held defaulted Argentine paper.
Earlier on Wednesday, a U.S.-based hedge fund bondholder
confirmed the Par coupon payment had been made. Banking sources
in Buenos Aires also said interest was paid on both the Par and
the Boden bonds.
Argentina's credit default swaps and bond yields fell
sharply on Wednesday on signs that a technical default had been
averted at least until its next bond coupon payment, due in
Hedge funds NML Capital and Aurelius Capital Management have
sued Argentina for $1.3 billion in payments on the defaulted
bonds. On Tuesday, a U.S. appeals court gave the funds until
April 22 to respond to a payment offer made by Buenos Aires.
While the funds are unlikely to accept the proposal, which
would pay them a sixth of what they demand, the deadline in
three weeks delays any definitive ruling from the court until
late-April, which allows Argentina to keep servicing its debt.
The Boden 2015 was issued under Argentine law and is not
seen as being at risk of default because it is not involved in
the U.S. litigation.
The coupon payment on the Boden is still good news, however,
because it shows Argentina is willing to honor is debts and is
still allowing payments to investors abroad, despite tough
domestic currency and capital controls.