June 25, 2013 / 3:56 AM / in 6 years

Argentina asks U.S. Supreme Court to hear debt appeal -report

BUENOS AIRES, June 25 (Reuters) - Argentina took its legal
battle with "holdout" creditors to the U.S. Supreme Court on
Monday by appealing an adverse decision handed down by a lower
U.S. court in October of last year, state news service Telam
    "Today Argentina introduced the first special appeal (Writ
of Certiorari) before the Supreme Court of the United States,"
Telam said, citing unnamed sources in the economy ministry.
    The move came while investors are still awaiting a ruling by
the 2nd U.S. Circuit Court of Appeals, which is expected in the
coming weeks. If the Supreme Court decides to hear Argentina's
case, it would not do so until the lower court has ruled.  
    For the last decade, Argentina and the creditors have
sparred in U.S. courts over the South American country's 2002
debt default. U.S. courts last year ruled in favor of the
holdouts, who rejected debt exchanges in 2005 and 2010.
    The creditors are suing to be repaid in full after spurning
the two debt swap offers, which were accepted by about 93
percent of bondholders. 
    A U.S. judge ordered Argentina to pay the holdouts the full
$1.33 billion owed them the next time it serviced restructured
debt. Argentina appealed. 
    Investors are following the case closely because Argentina
appears willing to enter into technical default in order to
avoid paying the holdouts any more than other creditors received
in the 2005 and 2010 exchanges. 
    The nearly 93 percent of bondholders who accepted the terms
of those two debt swaps got returns of as low as 25 cents on the
    In November, U.S. District Judge Thomas Griesa ordered
Argentina to deposit the $1.33 billion owed to holdouts in an
escrow account by Dec. 15, when restructured debt came due. 
    He also required that third parties involved in payments on
Argentina's restructured bonds be held accountable if the court
order were evaded. This included Bank of New York Mellon Corp
, which acts as trustee for the exchange bondholders. 
    The 2nd Circuit suspended these orders under an emergency
judicial stay while reviewing Argentina's appeal. 
   It was not clear if the stay will remain in place now that
Argentina has appealed to the Supreme Court.
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