Markets

Empresa, BBVA, Other Argentine Stocks Drop as U.S. Supreme Court Delivers Setback for Defaulted Bond Plan

American depository shares of power provider Empresa Distribuidora Y Comercializadora Norte S.A. (Edenor) ( EDN ), ADS of Argentine bank BBVA, and shares of U.S.-listed, Latin America-focused wireless firm NII Holdings ( NIHD ) trade sharply lower late Monday as stock markets react to a setback for Argentina's defaulted bonds. Argentina's broad markets tumbled, taking select U.S. listed stocks lower.

Their stock movement is tied to U.S. Supreme Court action on Monday. The Court left intact rulings that may force Argentina to pay billions of dollars to holders of repudiated bonds. That rejects an appeal in a case that has blocked the country from international debt markets for more than a decade, Bloomberg notes.

The next scheduled payment on the restructured bonds, which is due on June 30, sets an informal deadline for the government to reach a settlement with the holdouts because a lower court ruled that it cannot pay one group of creditors without paying the other. Argentina, seeking to preserve dwindling central bank reserves, says it can't afford to pay both sets of bondholders, Bloomberg reported.

Late in U.S. trade, EDN is down 15% and traded as low as $9.76 earlier. BFR is down 10% late, and traded as low as $9.66. NIHD is off 11%.

Losses were widespread. Argentina's ADR decliners included:

YPF Sociedad Anonima ( YPF ) -11%

Transportadora de Gas ( TGS ) -10%

Petrobras Argentina Sa ( PZE ) -8.4%

Grupo Financiero Galicia Sa (GGAL) -6.9%

Pampa Energia (PAM) - 5.5%

Alto Palermo Sa (APSA) -4.3%

Nortel Inversorsa Sa (NTL) -3.3%

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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