Wednesday, July 30th 2014 - 08:02 UTC

Argentine private banks prepared to buy holdouts' credit; Kicillof/Pollack talks to continue today

“Special Master” Daniel Pollack, the mediator appointed by US judge Griesa to resolve the dispute between Argentina and the speculative funds' holdouts said the parts talked “face to face” for the first time and assured a new meeting will be confirmed during the day. If a deal is not reached Wednesday sunset Argentina could again fall into default.

 “These were the first face-to-face talks between the parties. There was a frank exchange of views and concerns; issues remain unresolved”, said Pollack

“We are in a recess and we will keep on working,” assured Kicillof who flew to New York from Caracas for the final negotiations.

ADEBA is offering 250 million dollars as guarantee, hoping to avoid the 30 July default

 Pollack published a statement minutes after Economy Minister Axel Kicillof and holdouts representatives left his office following 11 hours of negotiations, early Wednesday.

”A delegation from the Republic of Argentina, led by the Minister of the Economy, Axel Kicillof, and the principals of the large Bondholders met tonight for several hours in my office and in my presence.

“These were the first face-to-face talks between the parties. There was a frank exchange of views and concerns. The issues that divide the parties remain unresolved,” Pollack said, while adding “Whether and when the parties will meet tomorrow (July 30) remains to be determined overnight.“

Kicillof arrived to New York after joining President Cristina Fernández at the Mercosur summit in Venezuela.

“We are in a recess and we will keep on working,” assured Kicillof.

Delegates of the Economy Ministry - Attorney at law Angelina Abbona, Finance Secretary Pablo López and Legal and Administrative Secretary Fedrico Thea had met with Pollack earlier on Tuesday until they were joined by Kicillof, following news that Argentine private banks are prepared to reach an agreement with the holdouts, thus avoiding default at the sunset of Wednesday.

Kicillof following the meeting said he was not going to make any statements since the meeting 'is ongoing there's nothing I can say about the results'. He added “we are working hard”.

From Buenos Aires it was announced that summoned through an emergency meeting, the Argentine private banks association (Adeba) agreed to offer the litigation a 250 million dollar guarantee as a preventive measure to avoid a default.

ADEBA’s 250 million dollars could stimulate NML Elliot hedge fund to request Judge Griesa the reapplication of the ‘stay measure’ in order to prevent future embargos on Argentine assets, and by doing so extend negotiations until January 2015.

Accordingly a meeting of Argentine private banks representatives with holdouts is expected sometime on Wednesday when the two sides would agree on the sale of the defaulted bonds, thus freeing Argentina of any commitment with holdouts and exposure to the RUFO clause Right Upon Final Offer. In other words the 2005 and 2010 restructured bonds are entitled to the same improved (and immediate) conditions of similar bonds.

Since it would be a private to private transaction, if the holdouts approve, Judge Griesa could then re-impose the stay action which means Argentina could then pay the restructured bonds with the blocked funds in New York banks and with no fear of breach of US law or the RUFO clause or the pari-passu ruling.

The 250 million dollar deposit from the Argentine private banks would act as a guarantee for holdouts to engage in negotiations referred to the non re-structured bonds deal with an agreed time limit of 90 days, which would be blessed by Judge Griesa if all sides agree.

If all hopefully works as planned at the most Argentina could be exposed to a one/two day default while negotiations are wrapped up.

51 comments Feed

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1 Welsh Wizard (#) Jul 30th, 2014 - 08:29 am Report abuse
Finally some movement. Well done ADEBA for having the balls the push the government into action. Whether this actually gets done, we'll have to see but it is a move in the right direction.

The only note of caution being the following phrase:

“These were the first face-to-face talks between the parties. There was a frank exchange of views and concerns. The issues that divide the parties remain unresolved,”

And also the fact the CFK spent most of her speach yesterday attacking the Judge and saying the the default won't be a default becuase they aren't clever enough to understand simple concepts...
2 ElaineB (#) Jul 30th, 2014 - 08:41 am Report abuse
From bubblear,com

“In the irony of the century, what could end up saving Argentina from default and a deepening of the current recession is a consortium of banks. These ultra-capitalist, usurers, who apparently symbolize all that is wrong with the neoliberal, capitalist, western-world order that has been exploiting Argentina of its public finances but could end up being its savior. I guess logic and incentives beat populism in the end?”

Full round-up at the website.
3 Idlehands (#) Jul 30th, 2014 - 08:54 am Report abuse
This is worth a read:
4 ChrisR (#) Jul 30th, 2014 - 10:51 am Report abuse
A glimmer of darkness, eh?

They will still fail to pay or agree a reasonable settlement with the “vultures”.

But do the private banks HAVE U$D 250 in real notes or has TMBOA plans to 'pesify' it before they cam move it out of harms way?

Wait for the next instalment folks!
5 Conqueror (#) Jul 30th, 2014 - 11:03 am Report abuse
I reckon the holdouts would be daft to accept US$250 million as any sort of guarantee. A quick calculation suggests that argieland owes the holdouts nearly US$1 billion in interest alone. So US$250 million represents only an eighth of what argieland owes.

If you were owed £200, would you accept £25 so that the person who owed you the money could get on and do anything they liked without the £175 they still owe having any effect? I don't think so. Wouldn't you want something more like 50% of what you're owed?
6 Idlehands (#) Jul 30th, 2014 - 11:11 am Report abuse
I'm not sure what this guarantee suggestion is worth - doesn't seem to involve any sort of cash transaction. The other suggestion to privately buy the bonds at full value would be the idea I'd jump at if I were a holdout.
7 SebaSvtz (#) Jul 30th, 2014 - 11:16 am Report abuse
@ 3

Thanks for the link, I´m loving that website´s style and funny approach.
8 Orbit (#) Jul 30th, 2014 - 12:28 pm Report abuse
How embarrassing for CFK. Private Argentine banks trying to save themselves - and by doing so all the little people - from the consequences of default... Whilst the sum total of her input has been to rant at the grown-ups who told her “no Cristina, you can't break a pinky promise”.
9 yankeeboy (#) Jul 30th, 2014 - 12:47 pm Report abuse
What a horrible way to run, a country, a business or even your personal life. Always taking decisions at the very last minute.
There's really something wrong with these people.

Anyhoo...u$250MM is a far cry from U1.6B
a far cry

It also means that the U$ will be spent out of reserves.

Only a few hours left to go.
When do they have to make the wire?
By 1pm I suppose...
10 Trunce! (#) Jul 30th, 2014 - 01:38 pm Report abuse
Midnight (Eastern Standard Time) - according to The Economist.
11 yankeeboy (#) Jul 30th, 2014 - 01:47 pm Report abuse
10. I don't know any banks that process wires at midnight.

You know I was thinking of the bubblear bloggers, if they are living in Argentina they should be very concerned about mocking the Prez and minions. Terrible “accidents” happen to people like that there.
12 ElaineB (#) Jul 30th, 2014 - 02:19 pm Report abuse
@11 I think they all reside there.

I have been reading the blog for some time, not just for the economic articles, and like the style. It is honest about the frustrations and turmoil that is every day life in BsAs but definitely not anti-Argentine. I would imagine it's readers are mainly ex-pats but I have started directing some Argentine friends there. The friends that understand the humour, that is, and won't take it as insulting to say one word against anything Argentine.
13 Welsh Wizard (#) Jul 30th, 2014 - 02:34 pm Report abuse
It seems that this is very much an offer from the private sector without the backing/organisation of the gov. From the recent noises today and last night, the government seem to want to default so that they look strong and like they are the winners. The closer if gets to the final hours, the less reason the holdouts have to acccept anything that isn't a decent offer (again $250mm is way off what they are owed).

@11 - Over here you have to ensure that you wire by 4pm. however, that doesn't guarantee it going through. the closer you get to 4pm the less chance you have.
14 yankeeboy (#) Jul 30th, 2014 - 03:01 pm Report abuse
Somebody is making a killing leaking in the markets with leaked info.

I wonder how much is accurate though.
15 Trunce! (#) Jul 30th, 2014 - 03:38 pm Report abuse
If they reached an agreement at the 11th hour (not that I think they will). Would it make a practical difference if debt was settled next day?
16 tallison46 (#) Jul 30th, 2014 - 03:48 pm Report abuse
I'm proud of the banks. I'm disgusted with CFK and company....
17 Welsh Wizard (#) Jul 30th, 2014 - 03:48 pm Report abuse
@15 they would be in default (ableit only for a couple of days)
18 CabezaDura2 (#) Jul 30th, 2014 - 03:52 pm Report abuse
The holdouts dont want bonds anymore and the Banks have pesos instead of dollars
19 Think (#) Jul 30th, 2014 - 04:45 pm Report abuse
Interesting development indeed....

A “Gramercy Plan” without Gramercy but with Argie private bank capital instead...
If them bankers, in top of all, use some of their many billion U$S being hold abroad to buy the Vultures out, it would be a very nice way to begin paying the social debt they have accumulated with the Argentinean people since the sixties...

Who knows...
I may even consider shaking the hand of a couple of these bankers next time I meet one... ( if ever ;-)
20 SebaSvtz (#) Jul 30th, 2014 - 04:54 pm Report abuse
@ 19

Hold on; they are not “paying for” anybody, they would be buying the debt, that meaning they will be Argentina´s creditors if they plan sees green light.
No charity here at all.
21 Think (#) Jul 30th, 2014 - 05:09 pm Report abuse
Argie Turnip at (20)

Luckily, this generation of Argie Banksta' seem to be muck less Gangsta' than the previous ones...

Bamo bamo, Argentinaaaaa
Bamo bamo, a ganáááááááá
K'esta barra, kilomberaaara
No te deja de alentáááááááá
22 YoHoYoHo a Pirates life for me (#) Jul 30th, 2014 - 05:11 pm Report abuse
KFC will bring in some law to nationalise the banks. This Bitch in decline bent on stupidity.
23 ChrisR (#) Jul 30th, 2014 - 05:14 pm Report abuse
@ 19 Lunatic
”I may even consider shaking the hand of a couple of these bankers next time I meet one... ( if ever ;-)”

BUT, would they want to shake yours?

24 Captain Poppy (#) Jul 30th, 2014 - 06:12 pm Report abuse
#19 there is not enough disinfectant on the continent if you shake anyone's hands. Are you not aware importing is outlawed.

True mother in law visiting from Argentina had to buy a large supply of hearing aid batteries for her brother because you can't get least in the city of Buenos Aires.
25 Pugol-H (#) Jul 30th, 2014 - 06:12 pm Report abuse
Argy Merchant Bankers to the rescue!!!!

He said, talking rhyming slang.
26 Think (#) Jul 30th, 2014 - 07:54 pm Report abuse
Well... well... well...
Awfully quiet at the turnip patch this afternoon...
Seems to be that my boy Kicillof is pulling this off...
Time soon to concentrate on really important stuff...
...... Like the Occupied Territories and stuff..., ya' know...
27 Welsh Wizard (#) Jul 30th, 2014 - 08:00 pm Report abuse
Looks like he is. In fact, it looks like whatever happens, the Republic is going to have to pay up one way or another. Well done Axel
28 Think (#) Jul 30th, 2014 - 08:37 pm Report abuse
(27) Welsh Wizard

I guess...... it's back to keep your supermarket sales tickets to prove to you In-Laws that the “real” yearly inflation in Argentina is 30% instead for the official 25%.......
............... Or daily checking of the Weather Channel together with YankeeBoy, hoping for a cold spell that makes Argentina collapse...

Chuckle chuckle...
29 Welsh Wizard (#) Jul 30th, 2014 - 08:51 pm Report abuse
Not really. Having just had the in laws over I'm well aware of how difficult life is for them at the moment and how they are suffering. Of course, you would know nothing of this. Just surprised at the fact that you are celebrating negotiating with and, therefore, paying the holdoust. After all, it was you who kept on saying that the Republic wasn't going to pay up...ever...traitor to your own cause. The worse type.
30 Klingon (#) Jul 30th, 2014 - 08:57 pm Report abuse
Yep, If anyone can pull this off it's our boy Killichoff. He pulled the Paris club deal together when everyone was saying it was dead.
Pissed me off as I changed some USD today and only got 12.3.
31 Think (#) Jul 30th, 2014 - 09:03 pm Report abuse
(30) Klingon....

If you ever want to pass as an Argie.... you better learn that it is spelled...“Quebracho Colorado” not “Qué Bracho Rojo”...
32 Klingon (#) Jul 30th, 2014 - 09:09 pm Report abuse
Rojo is easier to write and many around here use that term also.
33 Think (#) Jul 30th, 2014 - 09:15 pm Report abuse
Suuuuure, Klingon, suuuure.....

Why don' you translate something in Spanish to us.... just to prove your Argentinity?
Let's make it easy...
Just translate your above post (32) for us...
Should be a piece of cake for a smart Argie like you...
34 novato1953 (#) Jul 30th, 2014 - 09:30 pm Report abuse
I've been following this story a number of years, figuring eventually the Peso will collapse and I'll finally get to afford a trip to Argentina. But it turns out to be interesting per se. illustrative by way of byzantine rules and blindsiding factors, many of which I was previously ignorant, regarding the respective limits of international banking and sovereign powers. However the NML bonds settle, the whole affair certainly seems to prove that he who has the gold, makes the rules.
35 Welsh Wizard (#) Jul 30th, 2014 - 09:51 pm Report abuse
Agreement reached. Argentina is going to pay the holdouts. The one thing they said they wouldn't do.
36 Condorito (#) Jul 30th, 2014 - 09:56 pm Report abuse
@35 WW
Where did you hear that?
S&P puts Argentina on “selective default” 1 hour ago.
37 Welsh Wizard (#) Jul 30th, 2014 - 10:12 pm Report abuse
My mother in law tells me it's being announced in a press conference now
38 yankeeboy (#) Jul 30th, 2014 - 10:19 pm Report abuse
Austral Elvis is used to talking to people dumber than he is. He is condescending and smug and that's a terrible combination when you have nothing to offer and you're surrounded by people that are much smarter than you.
He is like Patoruzito going to the big city.

As I've been saying they needed to pay everything plus attorney fees to Singer. I guess they didn't want to and now they are in default.

It will be interesting to see how this roles out. I don't see any up side for Argentina.

I have to keep a close eye on the DC courts to see when the Rgs will be thrown out of all their non embassy property. I'll pack a lunch and watch from across the street.
It will be fun.

I bet the Ks made a lot of money leaking false information today. If they were in the USA they'd be in jail where they belong.
39 Welsh Wizard (#) Jul 30th, 2014 - 10:45 pm Report abuse
My bad It was being splashed all over the news that an agreement had been reached. Then Axel comes out to say it hasn't. Piss-up, brewery anyone?
40 CabezaDura2 (#) Jul 30th, 2014 - 10:49 pm Report abuse
I guess you should have remained with your mouth shut as it has being for more than a month for a few more hours instead of making such a fool of yourself... as we say in Argentina... “ L.T.A”

41 The Voice (#) Jul 30th, 2014 - 10:49 pm Report abuse
Whadya Think about this Mr Think?
'Offer rejected' on Argentine debt

From a reliable news source…
42 Klingon (#) Jul 30th, 2014 - 10:52 pm Report abuse
Yep I am listening to the live broadcast. Elvis pretty much told the Vultures to “Get Fu****d ”
43 yankeeboy (#) Jul 30th, 2014 - 10:58 pm Report abuse
42. You should have kept you U$.
I am sure that's his version of the story. I bet most of the time they were laughing and rolling their eyes at his stupidity.
44 Klingon (#) Jul 30th, 2014 - 11:02 pm Report abuse
I know Tomorrow the USD will be 13.50
But logistics prevented me from getting the best rate.
Well hopefully I can buy land cheaper soon.
Inflation must be about 40% at the moment, so we will see where it goes from here.
45 yankeeboy (#) Jul 30th, 2014 - 11:06 pm Report abuse
44. They are going to do another huge devaluation to try to goose the economy as this default edges on. I wouldn't buy anything in that country. Come to the USA and buy property. It is a much better investment in the long term.

40. Think is incapable of keeping his idiotic statements to himself. But he is par for the course on his predictions! 100% wrong every time!!
46 Klingon (#) Jul 30th, 2014 - 11:32 pm Report abuse
The banks just announced they have bought the bonds off the vultures for 1.6 Billion.
47 CabezaDura2 (#) Jul 31st, 2014 - 12:53 am Report abuse
46.Dont buy it..
@CamiRusso confirms

48 commonsparrow (#) Jul 31st, 2014 - 01:25 am Report abuse
Argentina issued the original bonds. Argentina accepted that these bonds were going to be governed under US/NY law. Argentina agreed to waive their sovereign immunity to be under the jurisdiction of the NY Courts. Argentina appealed to the NY Courts and The Supreme Court of the USA...they sided with Judge Griesa. Here in NY, you pay back EVERYONE, you cant pick and choose who you want to pay back. Did Argentina ever read the contracts they signed, or did they think the could pull a fast one later on...When the debt burden becomes unsustainable, you refinance your house. Refinance your house Argentina!!!!! Who do they think they are, are they crazy to think that banks and payment processors that want to do business in the USA are going to go against a US court order???????? Judge Griesa is a stern judge, I remember Westway, he was able to kill that project when no one else could, you could pull that story up on the internet. And you know what else I think, I think they Argentina does not want to defy Cristina, look at all the signs plastered all over Buenos Aires, who paid for all those signs “Dont pay the vultures” And now to give in to pay the debt after all that, who will defy Cristina, this monster has put fear in her people.
49 ElaineB (#) Jul 31st, 2014 - 03:16 am Report abuse
The child Kicillof failed miserably. What a twat. He is still claiming that Argentina is not in default, though it is. What a twat.
50 gordo1 (#) Jul 31st, 2014 - 05:44 am Report abuse
51 yankeeboy (#) Jul 31st, 2014 - 01:25 pm Report abuse
What No Think today?
I wonder why?

It must really get under his skin practically everything I post comes to pass.

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