ARGENTINA has had plenty of setbacks in its efforts to resolve its mammoth sovereign default of 2001. Although some of its jilted bondholders accepted a big write-down of the money they were owed in restructurings agreed in 2005 and 2010, others held out for full payment. They enlisted the support of an American judge, Thomas Griesa (the original bonds were written under American law). He not only upheld their claim, but barred any banks with operations in America from facilitating payments on the restructured bonds until the holdouts were paid in full. That prompted a fresh default, in 2014. The Argentine president of the day, Cristina Fernández de Kirchner, railed against the “senile” Mr Griesa and the “vulture funds” he was helping. But Mr Griesa has now done Argentina a favour.
On February 19th Mr Griesa said he would lift the injunction that prevents Argentina from servicing its restructured debts under certain conditions. The judgment is a blow to the remaining holdout creditors, led by Elliott Management, a hedge fund, who had used it to press Argentina for full payment. Mr Griesa’s change of heart stems from a change in...Continue reading
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