Argentina has scored a big victory in its battle with Paul Singer’s Elliott Management.
An appeals court yesterday nixed a ruling by Manhattan federal judge Thomas Griesa requiring the country to put $1.3 billion in escrow to pay Elliott by Dec. 15.
That’s when Argentina is scheduled to pay $3 billion to exchange bondholders who agreed to big writedowns on their debt. Elliott demanded full repayment, and Griesa ruled it was entitled to get that when Argentina paid the others.
Argentina President Cristina Kirchner said that the country would never pay Elliott and the other holdouts, raising concerns that the country would default on its other bonds.
That worry is gone — at least until the next hearing on Feb. 27.
Griesa’s ruling created a storm of complaints from the exchange bondholders, banks, the New York Fed and others who feared it would hurt sovereign-debt restructurings.
“This is a really big victory for us,” said Sean O’Shea, a lawyer for the exchange bondholders who were also granted their request to intervene in the case.