Holdout bonds’ ruling: Argentina files a retrial petition at the US Court of Appeals
Argentina filed on Tuesday a petition for a retrial at the US Second Circuit Court of Appeals over a debt ruling that would force the country to pay holdout creditors owning bonds in default since 2002.
The court filing said Argentina is seeking a re-trail with the three-judge panel that ruled in favour of the holdouts last month as well as with the entire Second Circuit Court of Appeals.
Argentina in its brief said the earlier appellate ruling last month interpreted a “boilerplate” provision underlying trillions of dollars in debt in a way that was “inconsistent with market understanding.”
If left in place, the Second Circuit’s initial ruling “will exacerbate future sovereign debt crises by making voluntary debt restructuring essentially impossible,” Argentina argued in the brief.
Argentine bonds tied to GDP growth fell by 4.1% on Tuesday, while bonds such as the Boden 2015 lost 0.8%, the Par (which is in Pesos) fell 2% and the Pro 13, 0.8%.
An analyst explained that the reason for the fall “is that Argentina is firmly opposed to conceding any payment to the ‘vulture funds’.” Therefore investors fear that if the holdouts aren’t paid, this will cause an embargo leading to a technical default.
On Monday, President Cristina Fernández, repeated that she will continue to refuse to pay those who did not enter the debt restructuring process, which was accepted by 93% of the bondholders.
Investment fund NML Capital on Tuesday presented US judge Thomas Griesa with a note that indicated how much they demand to be paid for the bonds that did not enter the governments bond-swap deal.
The investment group is responsible for the seizure of the Libertad frigate, after presenting a lawsuit through the Ghanaian judicial system.
Last month, the US appeals court ratified the New York judge‘s verdict, which ruled that Argentina should pay all the bondholders, whether they had entered the bond-swap deal or not.
According to sources, after NML Capital presented their proposal, lawyers representing Argentina have 72 hours to formally respond to the proposal.
At a hearing last Friday, Griesa said he intended to rule before December 2, when Argentina is scheduled to make the first of three interest payments on the exchange bonds, which will total more than 3 billion dollars over the course of the month.
From Buenos Aires Argentina replied saying that the money was deposited in the Central bank and ready to be paid out to the exchange bonds.
In its presentation before the Appeals court Argentina claimed that upholding Griesa’s rulings would undermine its debt agreements, trigger a new financial crisis in the republic and make it impossible for countries including Greece and Spain to restructure their debt in the future.
However Circuit Judge Barrington Parker who wrote for the panel agreeing with Judge Griesa said that “nothing in the record supports Argentina's blanket assertion that the injunctions will plunge the Republic into a new financial and economic crisis” adding that with more than 40 billion dollars in foreign reserves, Argentina has the ability to pay the holdouts
“We hold that Argentina breached its promise,” the appellate court said, summarizing a 29-page ruling that could make it difficult for Argentina to use the US financial system unless it complies.
Griesa said any financial institution that processes Argentina's payments to the holders of restructured bonds must ensure that the holdouts are paid an equal amount to avoid violating the court's order. Effectively, this would force US banks to stop the payments unless Argentina proves it's complying with the ruling.
The appeals court sent the case back to Griesa’s court to clarify how a payment formula set by the judge is intended to work and to determine how the orders apply to intermediary banks and other third parties.
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Does Argentina have to make a token payment to the holdouts?
Or do they have to pay the holdouts the same amount they are paying the restructured bondholders?
What amount is the Argentine Govt. required to pay the holdouts when they pay the restructured bondholders?
perhaps not in Argentina,but in the States yep!
A wiser country would not have signed a loan document with that provision in place. Argentina needs to deal with the terms of the contract they signed. They will not get a new trial because they want a clause in the contract removed.
The simple truth is that there is more than enough funds in the bank to pay all the bond holders. If Argentina is too stupid to pay, then the consequences would be severe.
Without access to the US financial system, Argentina would find it next to impossible to pay for oil imports, let alone the huge number of import/export transactions which would be frozen or impossible without US cooperation.
Argentina will not get any sympathy from Europe if they try to dodge the US system. Bond holders like NML have judgements in the UK courts too and will be able to freeze any financial transactions passing through London or Frankfurt.
Maybe the Judge ought to investigate Argentina's claim that they lack the funds and demand information on CFK's private bank accounts in Switzerland. She engaged in money laundering when she stole $650 million from Sante Fe province decades ago. By now, those funds probably equal a significant proportion of the debt that has to be repaid.
If Argentina won't pay, then the Judge should garnishee CFK's private bank accounts instead. Let's see if the wicked witch like that when her private Swiss piggy bank disappears.
muwahahahahahahahah!
'Oh Friend!', 'Thumbs up Friend!', 'New Car Friend!'
This clause is boilerplate (i.e. it is standard in nearly all bond issuances of this type). The main point here is that normally when you restructure your debt you enter into a negotiation with the bondholders and agree upon a price which is acceptable to all. In this case, Argentina just set a 75% haircut and didn't negotiate. This is where their legal argument should fall down as nearly all other sovereign restructurings are organised on a consultative basis. This one wasn't, it was unilateral.
I think that may be lost on 99% of posters but it's just made me daydream about Emily Atack
Wait...Argentina lied? Really?
“Show me the way to go home!
I'm tired and I want to go to bed!
I had a little drink about an hour ago,
And now I'm totally dead!”
“What's that coming over the hill..................”
The hedge funds, i.e. the hold-outs, have to be paid equal amounts.
After 70 meetings all over the USA UK EU, YPF can't find a penny of investment and with ANOTHER default on the horizon I don't see that helping Argentina...
hahahaha
that applies to most every politician in the world, its hardly a specialty of Argentina... I mean, just look at the UN talking bollocks whilst thousands die in Syria....
Thank you for the link. Answers everything.
they talk but no action,
its simple leave the falklands alone and soddy off.
Actually C.Poppy is correct, the average RG on the street is more concerned about their lives/problems than the Falklands. I have been to Argentina twice on a ski-ing holiday and I met Argentinans at the international boarding school I went to several years ago. I have told many of the RGs I met that I am a Falkland Islander and they couldn't care less. I made very good friends with the girls who worked at the Hotel I was staying at on my last Ski-ing trip, they were extremly polite and lovely people. They knew I was a Falkland Islander but they didn't make any cracks about Argentina owning the FI or start flag waving.
I have a problem with CFK and the current political situation but I have no problem with Argentina as a whole or its populace. Those Argentians who claim the FI belongs to them annoy me, but their words are empty and threats worthless.
try living there dude.
www.gregpalast.com/the-globalizer-who-came-in-from-the-cold/
#25 You are correct. They typical working class Argentine wants to get through there day unscatched like anyone else in the world. My wife is Argentine and we get there once or twice a year. Most people here that blast the RGs base what they know of RGs from what people read here and never even been there. What a strange world we live in when we judge the people by the leaders and news and democracy does not always choose the best but the one who talks the best.
My issues are with not just the president, but most of the peronists.
Most of us do not blast the ordinary Argentinians, most of us cannot comprehend how CFK and her cronies feel they are so superior and that the rest of the world should bow to their every whim.
CFK and her cronies are ruining what should be a good and profitable country just to massage their own egos!
CFK the typical black widow spider - poisonous to everything she touches.
You are the one who knows nothing. My parents moved to the Falklands from the UK in 1986 and I was born in the Falklands in 1989. I can trace my family history in the UK back hundreds of years. I have lived in the FI all my life and I now have a job here and I intend to live here in peace for as long as I want. I am a Falklands Islander and I am British. I DON'T want to be Argentine and I will fight any RG government to the death to keep the Falklands British or fight for our independence. Do not underestimate my patriotic attachment to my home.
I do not however, hate all RGs. To do so would be pathetic and hateful. Just because their government want to colonise the FI and their supports come on here flag waving, does not mean that is how everyone feels. That would be like saying all British people love David Cameron.
If an RG tried to attack my home I would defend it to the hilt. But I will not condemn millions of people because of the actions of a few.
It's absolutley mind boggling that she walks about with that air of superiority. This in itself is what leads me to suspect that the election process in Argentina is suspect at best. In most democracies, elected officials are always careful and the next election is always not far away. She carries about as if elections are moeaningless and of course if they are corrupt, of course they ar meaningless.
Maybe you are the RG here?
I didn't believe there could be two of them!!!!!
I believe you are right about argentine people in some cases but it depends on which part of the country you have been.
Mmmm nope, my father is currently next door talking to some VIPs about things far too important for you to comprehend.
Perhaps you should follow the old saying: “If you have nothing intelligent to say, say nothing at all.”
hmmm
I can't say that I know all Argentines......but I have yet to met one that would make me cast a blanket judgement across them all. As I said, I really despise the president and peronists. I would be able to acccept her philosophical differences of political opinions if she was competent, cared about her people, was not suspect with corruption and did not talk down to every this women interacts with that has a different opinion. And she is dafaulting on her countries sovereign debt and every court they go to rules against her, yet she still refuses to accept the inevitable
Maybe she'll go to court to appeal against having to pay court fees!
Argentina has moré than $ 10 bíllions in US sécurities.
where in CFK's swiss bank account ?
My reséarchs say Kirchners have no any ábroad bank accoúnts
but somé politícians and many businéssmen have.
LOL
@53, It's true they're secret, but there was a whistleblower
what a hystéric namé u have !
whén will u learn many of média publíshings are lié.?
“We do know that, in line with Kirchner’s sloppy
management of public funds, they unwittingly admitted that Santa Cruz’s money was
deposited in the “Private Banking” departments of Credit Suisse and UBS.”
I watch greenish tv channel RussiaToday everyday.
I have never heard any news on about it.
Russian oligarchs--Swiss--Austrian -OffShore --South Cyprus--banking accounts...are there any people who don^t know them ?
this articlé written by Adrian Salbucchi..his openly wéll known claíms.
I read also its all comménts.. explain nót much..
I know Clarin's low-down impartíally...not related to media freedom..
it^s shutting down operation is the Government's own preference.
These type of opérations are made in almost every country sométímes
for example ,the recént cóntra Murdoch Operation in UK....
#56 Thanks for that context, though its counterproductive of mercopress really as it just shows that even moments of great sadness do not mar her beauty
#65 Maxi you're such a mommas boy. Pappa smurf nestor would slap you upside the head is her were alive.....thankful God for small things......one down two to go!
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