Tuesday, November 20th 2012 - 00:02 UTC

Argentina “will not enter in default” and will honour all re-scheduled bonds

“The only possibility” Argentina contemplates regarding its debt is “to honour all payments” of creditors that entered debt swaps after the sovereign default of 2001, said Economy minister Hernan Lorenzino who underlined that Argentina “cannot and will not enter in default”.

Lorenzino accuses speculators are betting Argentina will default on its obligations

“We have an obligation and a commitment to our creditors, who are those who accepted the debt-swaps offered in 2005 and 2010”, Lorenzino said in an interview published by Buenos Aires newspaper Página/12.

The statements came after the presentation by Argentina to New York Judge Thomas Griesa to maintain his order blocking payment on defaulted sovereign bonds to holdout investors until lingering questions are settled in a higher court's appeals process.

Lorenzino also warned that “some are betting a lot of money to get rating agencies say that Argentina defaulted on its obligations since, whether that happens or not, then they’ll be able to cash insurances they bought in the market.”

Anyway, the minister insisted “Argentina will fulfil all obligations to its creditors”, and stressed that “the country not only wants to meet all payments, but also has the means to do it”.

Starting next 2 December Argentina is scheduled to pay interest on re-scheduled sovereign bonds and has repeatedly said it has the funds.

 However on that same week US Judge Griesa, acting on instructions from an Appeals court must implement an equal treatment to creditors clause, that is those who re-scheduled and the holdouts. Argentina calls holdouts ‘vulture funds’ and refuses to pay them.

Adding to the controversy Argentine ambassador to the US Jorge Argüello repeated on Sunday that US President Obama administration has already rejected one of Judge Thomas Griesa’s interpretations of the clause involving equal treatment to creditors for considering it “a potential conflict for the world’s financial markets.”

“The US government has already rejected Judge Thomas Griesa’s ‘new’ interpretation of the ‘pari passu’ clause when vulture funds sue our nation, since it would result in a potential conflict for the world’s financial markets,” the diplomat said in the fourteenth newsletter that the Argentine Embassy in Washington will deliver to US members of Congress and political leaders.

Argüello points out that the US government responded to Griesa’s interpretations this year by filing an “Amicus Curiae” in which they warned of the “possible global financial risks that could result of the distorted interpretation of a clause named ‘pari passu’ (equal conditions), found in several instruments of sovereign debt.”

According to the Argentine Embassy, “the US affirms that the District Court’s interpretation of the ‘pari passu’ clause deviates from market expectations and is contrary to the US economic policy”.

22 comments Feed

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1 Ayayay (#) Nov 20th, 2012 - 12:27 am Report abuse
The U.S. exec branch can only file as a friend “amicus”, it's not in charge of legislative, but dumb people don't know that.
2 ElaineB (#) Nov 20th, 2012 - 12:49 am Report abuse
The holdouts are also creditors, though Argentina refuses to accept that plain fact. They should be grateful that 93% of creditors agreed to accept less rather than bleat about the 7% that didn't. Pay up.
3 toooldtodieyoung (#) Nov 20th, 2012 - 07:20 am Report abuse
so what.......??? Argentina want everyone to bow down and thank them for paying back the money that they owe?

They have created an a big song and dance over something that they should have done anyway.

Just shut up and pay the bill. This is getting so old now...............pay up.
4 Usurping Pirate (#) Nov 20th, 2012 - 08:39 am Report abuse
Argentina “will not enter in default” and will honour all re-scheduled bonds .

Is that a flying pig in the background ?
5 Zaphod102 (#) Nov 20th, 2012 - 08:43 am Report abuse
Interesting artice in the Wall Street Journal “Argentina runs out of other people's money”

6 Acchiappaladri (#) Nov 20th, 2012 - 11:57 am Report abuse
The Ladroprogresista regime is cornered at least with respect to Argentine sovereign bonds : they are going on with their wishful thinking but this time no free way out of the mess they have created.

Unless a miracle happens in New York courts (plural!), the stay of Judge Griesa's PARI PASSU injunctions will be dissolved in a matter of months, may be (hopefully) weeks, and then they will have to choose and pay a toll:

- new default on exchange bonds (that is: Lorenzino's declarations are lies);
- pay up some holdouts (that is: Lorenzino's declarations are lies ... welcome lies in this case);
- not complying with US court's PARI PASSU injunction (that is: Argentina's affidavit is a lie)

and multiple choices are allowed ;-)

Of course Argentine people is free to let insane robbers rule their country, ignoring their international obligations, all of them ... eventually experimenting the pleasures of living in a novel South American Zimbawe.

Sadly it looks like that patriottic, reasonable Argentines have little chances to change for better their government in the near future.
7 yankeeboy (#) Nov 20th, 2012 - 01:00 pm Report abuse
I learned a long time ago, whenever an RG politician bleats on and on about something it ends up being exactly the opposite of whatever they are trying to convince people to believe.
Also if these people want some respect they should cut and wash their hair, try to wear suits that fit and clean shoes. Rgs are always a mess.
8 LEPRecon (#) Nov 20th, 2012 - 01:54 pm Report abuse
Argentine government and honour is an oxymoron!
9 Welsh Wizard (#) Nov 20th, 2012 - 01:59 pm Report abuse
Surely there would be the standard mandatory prepayment of principal and interest on an event of illegality in the bond docs (i.e . if it becomes illegal to meet your obligations under the documents you shall mandatorily pre-pay)...
10 Conqueror (#) Nov 20th, 2012 - 03:13 pm Report abuse
I know that the word is longer, but shall we rename “argies” as “wrigglies”?
11 Captain Poppy (#) Nov 20th, 2012 - 05:28 pm Report abuse
What are those three biggest lies?

1-the checks in the mail
2-I love you
3-I won't......lol

and now for a new forth
4-Argentina will not default!
12 ChrisR (#) Nov 20th, 2012 - 05:45 pm Report abuse
Closer and closer comes the default!
13 Conqueror (#) Nov 20th, 2012 - 06:49 pm Report abuse
@14 Reported!
14 Ayayay (#) Nov 20th, 2012 - 07:23 pm Report abuse
@14 deported! X)
15 ElaineB (#) Nov 20th, 2012 - 09:11 pm Report abuse
I see CFKC has been bleating on about Argentina being 'forced' into default by dark forces. Why doesn't she out-trick them by just paying up?
16 ProRG_American (#) Nov 20th, 2012 - 09:56 pm Report abuse
17 Captain Poppy (#) Nov 20th, 2012 - 10:09 pm Report abuse
18 Ayayay (#) Nov 21st, 2012 - 01:29 am Report abuse
Btw, the reason why the U.S.- gov- filed amicus is because this ruling is more in favor of individuals, not gov.
The world 'community standard' is trending towards creased individual rights.
19 Captain Poppy (#) Nov 23rd, 2012 - 08:10 pm Report abuse
I think this showdown will prove that Argentina is truly flat broke. Can't pay 10 million dollar and nod paying anyone off, just a bond to relase it. Can't fix her naval corvette in South Africa.....but boy, damn straight the botox flows through the trade routes!!
20 British_Kirchnerist (#) Nov 24th, 2012 - 12:49 am Report abuse
#15 Wonder what gave her that idea. Oh maybe its the fact that these dark foces and their supporters like yankeeboy on here are gleeful about Argentina being forced by Griesa to default...
21 ChrisR (#) Nov 24th, 2012 - 11:03 am Report abuse
@20 BSK

Yes, and the sooner the better.

Get rid of TMBOA and all the crooks with a new government, mend the fences with the real world and get back on another crest for the country.

It will never get better with this bunch of crooks in power.
22 Captain Poppy (#) Nov 24th, 2012 - 02:19 pm Report abuse
No one forced asslips to do anything .....one stupid state leader though they can get away and bail out on their debts without any impact

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