On Wednesday, a US appellate court cleared the way for Argentina to pay its debts and revive its presence to global credit and capital markets for the first time in more than 15 years. The court favors Argentina by raising as much as $15 billion to pay holdout creditors.
Financial Times reported that the decision was made by the US District Court of Appeals in Manhattan and was affirmed by a judge's ruling to lift an injunction that blocks Argentina from paying certain creditors, which subsequently pressed it into default back in 2014. The ruling followed brief discussions in a courthouse and removed a wild card that investors claimed could unravel months of negotiations and arguments with creditors
Argentina should be able to raise $15 billion through a complex debt sale next week, which will be used to first pay the creditors such as Aurelius Capital Management and Elliott Management's NML. The battle between Argentina and holdout investors, ignited by the nation's 2001 default on more than $95 billion of debt, had prevented the sovereign from raising fresh capital in the past years.
Reuters reported that the ruling bolstered markets and brought relief to President Mauricio Macri, who has spent the first four months of his term resolving a massive amount of litigation. After 15 years, Argentina will launch the sale of its first international bond issue.
Argentina's administration is currently eyeing London and New York to gauge hunger for a bond which could raise up to $15 billion to alleviate the finances of the government and pay $8 billion in settlements to creditors. The court said that the ruling to lift the injunction is conditional on US Judge Thomas Griesa, determining that Argentina has made good on its pledges to pay those who have settled and eradicate all necessary legal impediments, reports The Wall Street Journal.
After the ruling, Argentina's peso firmed as much as 1 percent, making it the strongest level in two months.
