Argentine bonds issued under local law, which have continued to get paid after the country’s July default, declined after hedge fund Aurelius Capital Management said that it’s seeking to block the payments, Bloomberg News reported yesterday. The nation’s 2024 bonds reversed earlier gains and slid 0.25 cent to 98.17 cents on the dollar, pushing yields up 0.05 percentage point to 9.1 percent. Aurelius claims that Argentina’s $1.4 billion of bonds sold in April are subject to U.S. District Court Judge Thomas Griesa’s ruling, which says that some of the country’s performing bonds are subject to equal treatment, or pari passu, with defaulted debt. That means they can’t be serviced unless the nation also pays defaulted bonds from 2001. Aurelius argued Argentine bonds due 2024 should be included in the ruling because they were marketed abroad by Deutsche Bank AG. Economy Minister Axel Kicillof said the April 21 sale of so-called Bonar 24s proved Argentina has access to international financing even after its July default.
