The government of President Cristina Fernandez awaits Judge Griesa's decision after the request to issue a stay on the ruling that orders Argentina to pay all the bondholders at the same time, Argentine Cabinet Chief Jorge Capitanich said in his daily press briefing at Government House on Tuesday.
“I will make no comments on the judicial strategy” said Capitanich. “The government will wait for Judge [Thomas] Griesa’s answer to the formal request delivered yesterday,” he said to reporters.
Argentina asked Griesa for a stay on the country’s case against holdout creditors on Monday in a formal petition stating its willingness to negotiate in good faith, but also warning that without the suspension on the judge’s ruling, the Argentine government would be unable to meet the June 30 deadline set to pay restructured bondholders.
”A stay would provide shelter (a legal umbrella) for negotiations to take place in light of the legal and financial complexity inherent to the process. The Second Circuit's decision requires Argentina, when it makes an interest payment on restructured debt, to pay full principal and interest to all holders of defaulted debt.
The Republic cannot afford to do this, nor can it pay some creditors in full and not others. The total amount due to holdouts from the Republic's debt restructuring exceeds half the country's reserves, said the letter.
In a press conference, Economy Minister Axel Kicillof reiterated Argentina’s willingness to pay 100% of creditors and stressed the importance of a stay for the country to engage in dialogue with the holdouts that have favorable rulings.
Follows the letter to Judge Griesa signed by Carmine D. Boccuzzi Jr, who is one of the several solicitors defending Argentina's case.
BY HAND AND ECF
Honorable Thomas P. Griesa
United States District Court for the Southern District of New York
500 Pearl Street
New York, New York 10007
Re: NML Capital, Ltd. v. Republic ofArgentina, Nos. 08 Civ. 6978 (TPG),
09 Civ. 1707 (TPG) and 09 Civ. 1708 (TPG): and related cases
Dear Judge Griesa:
I write to follow up on my report to the Court during last Wednesday's conference
that the Republic of Argentina (the Republic) is willing to negotiate in good faith. The Republic respectfully requests a stay of the Amended Injunctions to allow the Republic to engage in a dialogue with the plaintiffs in a reasonable timeframe for these kinds of negotiations.
The Republic has recently successfully settled major disputes. including the one with Repsol, which had a claim for $ 10 billion before ICSID for the expropriation of 51% of YPF S.A. shares, $9.7 billion in claims held by the nations that comprise the Paris Club, and hundreds of millions of dollars of ICSID arbitral awards. These recent settlements - which were the product of lengthy negotiations and resulted in necessary haircuts, maturity extensions, and interest rate reductions in line with the Republic's capacity to pay - were breakthroughs that reflect Argentina's focus on emerging from the crisis of 2001 and normalizing its relationship with its creditors. These settlements were voluntary and, therefore, equitable for the parties involved. Argentina wants to emerge from the litigation that has burdened both it and the courts. Hence, the Republic respectfully requests that Your Honor stay the Amended Injunctions.
A stay would provide shelter (a legal umbrella) for negotiations to take place in light of the legal and financial complexity inherent to the process. The Second Circuit's decision requires Argentina, when it makes an interest payment on restructured debt, to pay full principal and interest to all holders of defaulted debt.
The Republic cannot afford to do this, nor can it pay some creditors in full and not others. The total amount due to holdouts from the Republic's debt restructuring exceeds half the country's reserves. No country could pay half of its reserves, and Argentina cannot afford to be left without the means to manage its currency or handle the rest of its economy, including meeting the needs of its citizenry. Nor can Argentina ignore the Rights Upon Future Offers clause (the RUFO clause) governing its New York-law restructured debt, which expires on December 3 1, 2014, as it could give rise to litigation in other jurisdictions that could destroy the successful restructuring of 92% of the Republic's defaulted debt.
Argentina is also subject, as a sovereign nation, to its own Constitutional processes and the laws concerning debt restructuring enacted by its Congress.
Argentina is therefore committed to engaging in a dialogue with plaintiffs that can lead to the resolution of this litigation, if the right circumstances for negotiation contemplating the interests of 100% of its creditors are established as the Republic requests here.
In sum, the Republic is committed to a dialogue that will be followed by what the Republic intends to be a resolution of this litigation and the entirety of its outstanding debt burden, which is a matter of public interest to all Argentine citizens. The Republic has honored its obligations, including to the restructured bondholders, and wants to continue doing so with 100% of its creditors. The Republic accordingly respectfully asks that Your Honor grant this stay to allow for the commencement of good faith negotiations between Argentina and its creditors.