Sovereign Debt Update - October 7, 2013

On October 7, 2013, the U.S. Supreme Court denied Argentina's petition for the court to review a October 26, 2012 ruling by the U.S. Court of Appeals for the Second Circuit (see NML Capital, Ltd. v. Republic of Argentina, 699 F.3d 246 (2d Cir. 2012)) upholding a lower court's orders barring Argentina from paying holders of debt restructured in 2005 and 2010 without also paying in full holdout bondholders holding $1.5 billion in defaulted bonds. The Supreme Court's refusal to review the ruling means that litigation in lower courts continues, including an action pending before the Second Circuit in which the court on August 23, 2013 upheld a lower court's order directing Argentina to pay holdout bondholders $1.33 billion, but delayed implementation of its ruling until the U.S. Supreme Court decided whether to hear Argentina's appeal. In its order denying Argentina's petition for a writ of certiorari, the Supreme Court stated merely that the petition was denied and that