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U.S. appeals court delays lifting Argentina debt injunctions

Published 03/11/2016, 06:16 PM
Updated 03/11/2016, 06:20 PM
© Reuters. A man crosses the street outside the Argentine Congress in Buenos Aires

By Nate Raymond

NEW YORK (Reuters) - A U.S. appeals court on Friday put on hold a judge's ruling lifting injunctions that have restricted Argentina from paying off some debts in light of the country's $6.5 billion offer to settle litigation over bonds in default since 2002.

The 2nd U.S. Circuit Court of Appeals in New York stayed the March 2 ruling by U.S. District Judge Thomas Griesa until it could hear an appeal by creditors opposed to the lifting of the injunctions.

According to court documents, Argentina did not oppose the creditors' request to stay the order. It had earlier secured an expedited appeal, arguing that "without prompt resolution, settlement of the largest claims in this long-running litigation may be in jeopardy."

Lawyers for Argentina and representatives for various creditors did not immediately respond to request for comment.

The 2nd Circuit, in an order earlier on Friday, set a briefing schedule that would run through March 25. It said the date of any arguments would be determined "at a later time."

Griesa's ruling vacating the injunctions was conditioned on Argentina repealing two laws concerning its debts and paying creditors who by Feb. 29 reached settlements with the country.

Argentina made the request to lift the injunctions after offering on Feb. 5 to pay $6.5 billion to settle lawsuits by various bondholders stemming from its record $100 billion default in 2002.

The injunctions at issue prevented Argentina from servicing its restructured debt until it paid the investors, who spurned its 2005 and 2010 debt restructurings.

Those restructurings resulted in 92 percent of its defaulted debt being swapped and investors being paid less than 30 cents on the dollar.

© Reuters. A man crosses the street outside the Argentine Congress in Buenos Aires

Argentina has reached agreements in principle to pay more than $6.4 billion to creditors, including $4.65 billion to four of the biggest creditors in the dispute, including Elliott Management's NML Capital Ltd and Aurelius Capital Management.

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