US hedge fund freezes Argentine bank accounts in Belgium: sources

7th May 2015, Comments 0 comments

A US hedge fund has obtained a freeze order on one or more Argentine embassy bank accounts in Belgium as it pursues a $1.3 billion debt default case against Buenos Aires, sources said Thursday.

The move is the latest chapter in a long, and so far unsuccessful, battle by two US hedge funds that are demanding full repayment of debt defaulted on by Argentina in 2001.

"We have been informed of a preventive closure of one or more bank accounts held by the Argentine embassy," Belgian foreign ministry spokesman Hendrik Van De Velde said.

"We were informed of this order by a notary ... acting for a foreign entity in connection with a foreign default," Van de Velde said, without giving further details.

Sources close to the case told AFP the company involved was hedge fund NML Capital which is pursuing Argentina over bond investments worth $1.3 billion.

Last year, a New York court ruled that an Argentine debt restructuring plan could not go ahead unless the two creditors -- Aurelius Management and NML Capital -- got back in full the $1.3 billion they invested in the country's bonds.

Argentina refuses to pay the hedge funds, arguing that they lost their claim when they refused to join a restructuring of nearly $100 billion in debt the country defaulted on in 2001.

The restructuring plan will pay interest on the bonds and was accepted by more than 90 percent of creditors.

NML Capital took similar action in Belgium in 2012 but a local court ruled against the company on the grounds that the 1961 Vienna Convention prohibited the seizure of diplomatic property.

The sources, who asked not to be named, said Argentina is likely to make the same case again.

Spokesman de Velde said the Belgian foreign ministry was in contact with the Argentine embassy to discuss the issue.

Last month, Argentina's economy minister went to the United Nations to accuse so-called vulture funds of gaining "extortionate power" over countries seeking to restructure their sovereign debt.


© 2015 AFP

0 Comments To This Article