President slams judge's pension asset freeze in US - Argentina

Argentine President Cristina Fernández de Kirchner on Monday criticized a ruling by New York federal judge Thomas Griesa to freeze assets held in the US by the country's recently nationalized AFJP private pension fund managers.

"Maybe in a foreign jurisdiction there is confusion regarding this, the property [of the funds] is always in the hands of retirees, those who contribute to the system," she said in a televised speech from the Casa Rosada presidential palace.

"The administration can be in the hands of the private or public sectors. Now, by decision of the Argentine congress thanks to this government's initiative, it [the government] has regained the administration of these funds, but these funds are Argentines' public savings," she said.

Last week, Griesa granted a request from holders of defaulted Argentine bonds to freeze US$553mn in assets held by the AFJPs in the US.

In a 40-page ruling, Griesa said that funds held in the US for Argentine pensioners can be used to satisfy the vulture funds' previously obtained judgment against the country.

"The court has determined plaintiffs have made a sufficient case that the assets involved in the present applications are subject to attachment and execution and have further made a sufficient showing that the transfer of these assets, particularly out of the US, should be restrained," the ruling reads.

Griesa's decision came in response to a motion filed by hedge fund NML Capital, which represents Argentine bondholders that rejected the country's debt restructuring carried out in 2005.

Bondholder lawyer Barry Ostrager of New York-based Simpson Thacher & Bartlett sought and received an order from Griesa freezing the Argentine pension fund assets after the country announced it was nationalizing its pension system last October.

The AFJP US$24bn funds plus its annual contributions of up to US$5bn and some 9mn affiliate accounts will be transferred to state-run social security agency ANSES.

ANSES lawyers argued the funds did not belong to the republic and therefore should not be subject to a freeze order.

"We are losing 1-0 and we are at half time," Buenos Aires-based newspaper Perfil quoted ANSES attorney Marco Schnabl as saying.

Jorge Porter
Business News Americas

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