October 30, 2008 / 10:21 PM / 9 years ago

Judge orders freeze on U.S. assets in Argentine pension funds

NEW YORK (Reuters) - A U.S. judge has ordered the freezing of more than $553 million in U.S. investments held by Argentine pension funds that the government intends to nationalize.

Judge Thomas Griesa of U.S. District Court in Manhattan on Wednesday granted a request by bondholders to freeze the assets. Griesa asked representatives of Argentina to respond in court on Nov 6.

Barry Ostrager, an attorney representing bondholder Aurelius Capital Partners, was not available to comment.

Court documents filed by the attorney said Aurelius and other bondholders asked for $553,989,217 in assets held by the Republic's pension funds to be frozen.

An attorney for the Argentine government could not immediately be reached for comment.

Griesa ordered the blocking of property in the United States "including but not limited to cash, deposits, real property, instruments, securities, security entitlements, security accounts, equity interests, claims, and contractual rights and interest" maintained in the name of the Argentine pension funds.

On Wednesday, Argentina's pension funds said they received government orders to sell foreign assets, and will bring some $500 million into the foreign exchange market in the next few days, potentially supporting the weak peso currency.

The order came as lawmakers debated President Cristina Fernandez's bill for a state takeover of private pension fund administrators, who handle retirement savings that were worth some $25 billion as of October 15.

Most of the funds' foreign investments are in neighboring market, Brazil.

Argentine stocks, bonds and currency plunged last week after the government announced it wanted to take over the South American country's privately-run pension funds, over concerns that liquidity would dry up on local markets where the funds are major players.

Markets also interpreted it as a government move to access funds to meet billions of dollars in debt obligations next year.

Government officials say they want to protect retirement savings and have no need for the money in the pension funds.

The fund administrators said they were operating normally, but with a government auditor at each fund.

Reporting by Grant McCool; editing by Carol Bishopric

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