* NML Capital seeks Nov. 15 hearing
* Appeals court had said holdout bondholders must be paid
By Jonathan Stempel
Nov 6 (Reuters) - Armed with a favorable court ruling, bondholders who refused to take part in Argentina’s massive restructuring of defaulted debt urged a Manhattan federal judge on Tue sday to force the country to quickly drop its resistance to paying what it owes.
NML Capital Ltd, an affiliate of Elliott Management Corp, made its request on behalf of holders of $1.4 billion of defaulted debt after a federal appeals court last month said Argentina discriminated against bondholders who refused to join 2005 and 2010 debt swaps by deciding to pay them later.
U.S. District Judge Thomas Griesa had early this year ordered Argentina to treat bondholders equally. But he put that decision on hold while Argentina appealed to the 2nd U.S. Circuit Court of Appeals in New York.
That court’s Oct. 26 decision against Argentina caused the country’s bond prices to tumble and prompted Standard & Poor’s to downgrade its sovereign credit rating.
The 2nd Circuit returned the case to Griesa to determine how the payment formula is to work and how his orders apply to third parties such as intermediary banks.
But NML said Argentine President Cristina Fernandez de Kirchner and other cabinet-level officials have pledged “never to comply” with court orders to pay dissident bondholders, including those that officials have labeled “vulture funds.”
NML asked Griesa to schedule a Nov. 15 hearing at which he could lift his earlier stay on payments, before Argentina’s scheduled payment next month of billions of dollars of interest to bondholders who participated in the swaps.
Argentina “will employ and exploit any delay tactics necessary to evade this court,” NML’s lawyer, Robert Cohen, wrote.
Adrian Cosentino, Argentina’s finance secretary, did not immediately respond to requests for comment.
The debt restructurings were intended to help Argentina recover from a roughly $100 billion default a decade ago.
Holders of about 93 percent of that debt participated in the swaps. Since the default, Argentina has stayed out of global credit markets, partly on fear that holdout bondholders could block new debt issues.
The case is NML Capital Ltd et al v. Argentina, U.S. District Court, Southern District of New York, No. 08-06978.