The embargo was carried out on funds deposited in the Federal Reserve of New York due to the default on Brady bonds
This new judicial blow further complicates the country's financial situation, which seeks international financing amid an adverse scenario.
Brady Bonds were issued in 1992 during the Government of Carlos Menem, as part of a debt restructuring program promoted by the then U.S. Treasury Secretary, Nicholas Brady.
The United States Justice executed a seizure of USD 209 million on Argentine state assets, in the context of a lawsuit over the default of the 2001 Brady Bonds. The measure was ordered by Judge Loretta Preska, after the U.S. Supreme Court rejected Argentina's appeal in January.
The seizure was carried out on funds deposited in the Federal Reserve of New York, corresponding to the collateral of the Brady Bonds. The Attestor Master Value fund took possession of these assets as compensation for the unpaid debt.
Preska's ruling responds to a long-standing litigation over securities issued in the 1990s and defaulted in 2001. According to analyst Sebastián Maril, the execution of the seizure occurred after Argentina's failure to overturn the ruling in higher courts.
Another fund, Bainbridge Fund, attempted to expand the seizure on the Brady Bonds, but the judge only authorized the retention of USD 100 million.
The objective was to allow the collection of claims by commercial banks through the issuance of new bonds guaranteed with U.S. Treasury securities. However, the agreement imposed burdensome conditions for Argentina, including:
According to debt specialist Alejandro Olmos Gaona, speaking to Infobae, the Brady Plan exemplifies the influence of large financial groups over States, establishing conditions that limit their ability to legally defend themselves in future disputes.
With this new execution, Argentina continues to face the costs of decisions made more than three decades ago, while trying to close open legal fronts abroad.
