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Capital Markets

Argentina: Court passes Argentina exchange

You can stop holding your breath now. Two months after Argentina announced the results of its exchange offer, the Second Circuit Court of Appeals in New York finally allowed it to go ahead, unencumbered by attachment proceedings from vulture funds.

The court's decision came in the wake of hundreds of pages of dense legal argument from any number of interested parties. Among them were the Republic of Argentina; bondholders seeking the money they're contractually entitled to; other bondholders seeking the bonds they expected from the exchange; and third parties such as the Clearing House Association.

The final judgment was just three pages long. "We conclude that it is unnecessary to rule definitively on any of the legal issues disputed by the parties," said the court, taking care to make clear that the decision could "not be cited as precedential authority".

In other words, the decision was a triumph of pragmatism over jurisprudential rigour.

Argentina's debt restructuring "is obviously of critical importance to the economic health of a nation," ruled the court, and any ruling which could jeopardize the outcome of the bond exchange should, for that reason alone, not be allowed to stand.

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