US judge tells NY bank to hold onto Argentine bond funds

Written by Reuters | Buenos Aires | Updated: Aug 8 2014, 07:02am hrs
The US judge in charge of Argentina's debt default case on Wednesday ordered Bank of New York Mellon to hold on to money deposited by the government rather than disburse the funds to holders of the country's restructured bonds.

The move by US District Judge Thomas Griesa came after Argentina earlier in the day demanded the intermediary bank deliver $539 million in bond payments that were due in June but blocked by previous court rulings.

Argentina defaulted on its sovereign bonds last week after losing a long legal battle with hedge funds that rejected the terms of debt restructurings in 2005 and 2010.

The government has kept up pressure on Bank of New York Mellon to make payouts to the holders of restructured bonds despite Griesa's order saying it has to pay the holdout hedge funds at the same time.