After a historic New York Court of Appeals ruling today allowing Argentina to finally pay the holdout creditors suing Argentina over defaulted bonds, Finance Minister Alfonso Prat-Gay jubilantly announced that the country will begin issuing debt next Monday to pay off the holdouts by next Friday, thereby putting an end to the 15-year dispute.
Outside his hotel in New York, Prat-Gay couldn’t contain his elation following today’s court decision lifting an injunction known as the “stay,” which prevented Argentina from making payments on bonds. The stay was instated during former President Cristina Fernández de Kirchner’s administration when Argentina refused to negotiate with the holdouts, as it considered the affair a matter of national sovereignty. The stay was meant to prevent Argentina from paying other creditors without also paying the holdouts.
The Court convened this morning at 10 AM in New York (11 AM Argentina time) with the decision being made in less than two hours. “We did not expect it [a ruling] so soon, we’re celebrating,” said Prat-Gay outside his Manhattan hotel. This morning’s resolution was an unexpectedly quick decision; rarely are cases in the New York Court of Appeals resolved within a day.
Today’s ruling “is the last step in what was missing during 15 years of being disconnected from the world, of being proud of not paying,” said the minister. “We want to resolve this so that we can return to having credit and relaunch the economy, with infrastructure to grow. This is the first step.”
Yesterday, Prat-Gay wrote a letter to the court asking that it allow Argentina to make the payment. Looks like his effort paid off.
This is it, guys. We’re finally reaching the end of this of what we thought would be a never-ending ordeal.
If, unbelievably, you’ve not read the news for the past 15 years, here’s what is going on: After Argentina’s economic meltdown in 2001, the country defaulted on its international debt. A group of creditors purchased some of the defaulted bonds and refused to accept debt restructuring plans in 2005 and 2010 that would have exchanged the original bonds for bonds worth 30 cents on the dollar, insisting instead the debt be repaid in full. Argentina has been locked in a legal battle ever since and therefore today’s ruling is a historic one because it means that Argentina is now in a position to pay off its debt and subsequently re-enter international markets.
This is what we imagine Prat-Gay is doing in his hotel room right now: