News Center

House Bill Would Bar Argentina From US Capital Mkts
Dow Jones Newswires
May 20, 2009

By Michael Casey

http://english.capital.gr/news.asp?id=739651

With Argentina firmly in their sights, a group of Democratic congressmen are seeking to bar debtor countries with long-standing default from accessing U.S. capital markets.

The Judgment-Evading Foreign States Accountability Act, introduced to the House by Rep. Eric Massa, D-N.Y., would bar from U.S. markets any nation that has been in default on U.S. court judgments worth more than $100 million for more than two years.

Accompanying Massa in presenting the bill in the House were five Democratic colleagues from New York - Reps. Paul Tonko, Timothy Bishop, Carolyn Maloney, Dan Maffei and Mike McMahon - as well as Rep. Robert Wexler of Florida.

The American Task Force Argentina, which lobbies on behalf of so-called "holdout" bondholders owed more than $30 billion in defaulted Argentine debt, applauded the move in a press statement Wednesday.

"U.S. taxpayers are still waiting to be repaid money they lent to Argentina in good faith," said ATFA Executive Director Robert Raben. "At the same time, Argentina is saddled with the reputation of a deadbeat because their government defaults on court judgments. This legislation should pave the way for a fair resolution for both countries."

An official at the Argentine Economy Ministry declined to comment.

After announcing the biggest sovereign default in history in December 2001, Argentina held a $100 billion debt exchange in 2005 that was valued at just over 30 cents in the dollar of the bondholders' total claims.

The participation rate in that restructuring failed to surpass 75%, leaving hundreds of thousands of retail and institutional investors in Europe and the U.S. saddled with unpaid bonds.

Various bondholders have since won summary judgments ordering payment of their claims in full and a number have attached Argentine government foreign assets in some as-yet unsuccessful bids to convert those court orders into payment.

Investment firm Elliott Associates, whose NML Capital fund has been one of the most aggressively litigious holdout bondholders, welcomed the bill, treating it as a message for the government of Cristina Fernandez de Kirchner.

"As a large creditor of Argentina, Elliott applauds the introduction of [the legislation]," an Elliott spokesman said in a statement. "The Kirchner administration must recognize that Argentina's attempt to repudiate legitimate debts will have lasting consequences."

U.S. Government
Takes Action

Click here to view letters by the Administration and Members of Congress on Argentina's debt and economic policies.

The Debt and Europe

Click Here To Read More

ATFA Member Spotlight

National Taxpayer's Union

Open Letter to the U.S. House of Representatives: Protect Taxpayers from Judgment-Evading Nations

Click here to view other ATFA member activity

Join Us
Show your support for ATFA and our work regarding debt default by joining our growing list of supporters.

Tell Your Friends
Do you have friends or colleagues who would be interested in supporting ATFA? Send them an invitation to this site by clicking here.