Argentina prepared to reopen bonds’ swap under certain conditions
Economy Minister Hernan Lorenzino described the appeal presented on Monday by Argentina against the ruling of New York Judge Thomas Griesa as “very forceful”, and pointed out that if the magistrate had proposed to treat hedge funds demands under the terms of the 2010 debt-swap, the Argentine congress might then address the option.
Lorenzino said that he does not rule out a possible third debt exchange for those who did not enter the 2005 and 2010 swaps “if required by the Justice of the United States, but only if it contemplates an offer similar to that of 2010 and if the Argentine Congress passed a law approving it”.
The Argentine congress voted a law which clamped any possibility of further negotiations with those bond holders who did not accept any of the swaps.
Lorenzino added that “the solid presentation Argentina filed on Monday in New York underscored the country's sovereignty to dictate its own rules and from that perspective could make a proposal to those bondholders who did not agree to the exchange terms of 2010 but that would be in line with the regulatory background of our country and a thorough Congressional debate”.
The minister described Judge Griesa’s ruling to pay first the hedge funds as “contrary to common sense and Argentine Law” pointing out that a proposal similar to the 2010 exchange “would be in line with the legal system background of Argentina and congressional sovereignty”.
It is crucial that Judge Griesa’s ruling is ‘suspended’ to that Argentina can comply next December 15 with payments to the restructured bond holders as Argentina has been complying regularly since the swaps were agreed”.
The ruling Argentina is appealing refers to Judge Griesa latest decision indicating that the hedge-funds must be paid first and that Argentina must deposit by December 15 the funds in an escrow account.
Lorenzino insisted on the ‘irrationality’ of pretending the ‘pari passu’ clause is applicable, since this is “the closest thing to an arbitrary and unfair decision”. He also revealed that the Argentine writ requests an ‘urgent’ consideration of the matter so “we expect that in the coming two to three days we have a reply from the Appeals court so that we can address payments as we have been doing”.