Argentina's Euro Debt Holders Tell Bond Trustee to Step Down

Argentina's Euro Debt Holders Tell Bond Trustee to Step Down
by Katia Porzecanski
October 22, 2015 — 8:07 PM CDT

Holders of Argentina’s euro-denominated debt, led by hedge fund Knighthead Capital Management, told Bank of New York Mellon Corp. it must resign from its role as bond trustee because of its failure to pass along blocked interest payments.

Attorneys for the creditor group told the bank Thursday that its Brussels branch has five days to step down or comply with orders from a Belgian court to pass along payments, according to a letter distributed by Argentina’s economy ministry.

The payments, which are currently in BNY Mellon’s account at the Argentine central bank, have been blocked by a U.S. judge since last year, until the country pays holders of defaulted debt from 2001.

“BNYM continues to refuse to transfer the payments currently in its possession and has clearly indicated its refusal to transfer any future payments that may be made by the Republic,” according to the letter. “BNYM is in ongoing violation of the terms of the indenture to the extent that it purports to continue to act as indenture trustee.”

More:
http://www.bloomberg.com/news/articles/2015-10-23/argentina-s-euro-debt-holders-tell-bond-trustee-to-step-down