Argentina plans to pay its foreign-currency bonds locally to sidestep a U.S. court ruling that blocked payments last month and caused the nation to default for a second time in 13 years, Bloomberg News reported today. The government will submit a bill to Congress that lets overseas debt holders swap into new bonds governed by domestic law with the same terms, President Cristina Fernandez de Kirchner said in a nationwide address yesterday. Payments will be made into accounts at the central bank instead of through Bank of New York Mellon Corp., the current trustee. Holders of Argentina’s $30 billion of overseas bonds have been in limbo since U.S. District Court Judge Thomas Griesa blocked the nation’s attempt to pay $539 million in interest due by July 30. His ruling was meant to compel Argentina to resolve unpaid debts from its 2001 default. While most creditors agreed to provide debt relief, hedge funds led by billionaire Paul Singer’s Elliott Management Corp. refused and successfully sued for full repayment in U.S. court.
http://www.bloomberg.com/news/print/2014-08-19/argentina-to-pay-bondhol…
In related news, the International Swaps and Derivatives Association (ISDA) has delayed the auction to settle Argentina's credit default swaps until at least September, Reuters reported yesterday. ISDA's 15-member determinations committee voted unanimously yesterday to postpone the auction until at least after September 2. The committee today began discussing a challenge it received regarding the inclusion of two Japanese-law restructured notes into the list of securities deliverable into the auction. As the challenge needs to be resolved before the auction can take place, the committee opted to postpone the date of the auction, which was originally scheduled for August 21.
http://www.reuters.com/article/2014/08/19/argentina-debt-cds-idUSL2N0QP…