Buenos Aires Province Sued in U.S. for Missed Debt Payments
The Steering Committee of the Ad Hoc group of province bondholders submitted two legal claims against the province of Buenos Aires in the U.S District Court for the Southern District of New York after negotiations to restructure $7.1 billion in overseas debt stalled, according to complaints filed Tuesday.
The plan comes after a lack of progress in restructuring talks between the province and investors, more than six months after the federal government struck a deal to restructure $65 billion in sovereign bonds. The province published details of a new proposal shown to one of its largest creditors, GoldenTree Asset Management, on Monday, but the fund rejected the terms and the province didn’t accept a counteroffer that followed.
“Since April, the Province has made virtually no effort to engage in good faith negotiations with the Group to find a mutually agreeable and consensual solution, despite several attempts at engagement by the Group and its advisers,” according to a press statement. “Actions speak louder than words, and it is regrettable that the Provincial leadership has chosen to follow a course of confrontation and default.”
According to the two complaints, the creditors are demanding unpaid interest for $133 million and unpaid principal for $233 million. The complaints were filed separately to mark that the outstanding bonds were issued under two different legal indentures.
The press office for the province of Buenos Aires’ economy ministry didn’t reply to a request for comment. Buenos Aires has extended the deadline for creditors to accept its proposals more than a dozen times since its first offer appeared in April.