ISIN.net update courtesy of 24 Feb reporting from Bloomberg LP
Bloomberg — Argentina lost a ruling at Germany’s top civil court over payments on bonds it sold to investors in the European country in the late 1990s that don’t have collective bargaining clauses.
The Federal Court of Justice rejected Argentina’s argument that international law allows countries that default to withhold payments on all of its bonds if it reaches an agreement with a majority of creditors, Presiding Judge Hans-Ulrich Joeres said at hearing in Karlsruhe, Germany, on Tuesday.
“Neither the financial crisis in 2008 and 2009, nor the Euro-rescue measures for Greece and Cyprus established a general rule that creditors of a state in an economic and financial distress must participate in a restructuring,” Presiding Judge Hans-Ulrich Joeres said when delivering the ruling.
Argentina’s default on a record $95 billion in 2001 set off more than a decade of litigation over what its creditors should receive, with today’s case being the second in a European court in as many weeks. Euro-denominated Argentina bonds soared to an eight-year high after a London judge ruled last week they were covered by English law.
Today’s cases concern two German consumers who bought bonds in 1996 and 1997. The Deutsche Mark-denominated securities were issued under German law and didn’t have collective bargaining clauses allowing a restructuring by majority vote. Argentina stopped interest payments on both securities in 2002.
The cases are BGH, XI ZR 47/14 and 193/14. The bonds at stake are ISIN: DE0001954907 and ISIN: DE0001348100.