Tuesday, February 23rd 2016 - 06:56 UTC

Argentina to issue 15bn in bonds to end litigation with holdouts and return to global money markets

Argentina is planning to issue an estimated 15bn dollars in bonds, with which to pay the bondholders involved in years of litigation, and thus abandon its default situation which impedes it from having access to global money markets. The news was released by the Argentine Ministry of Finance.

The sum should be enough to cancel the 6.5bn dollars demanded by holdouts who have accepted the last pre-accord, with the mediation of Special Master Pollack

Another 8.5bn will be spent in paying debt in the hands of European bondholders and those who still are holding discussions in New York with the Argentine team

Although the Macri administration does not have sufficient votes in Congress, it does have a working support that should enable the lifting of the controversial bills

 The sum should be enough to cancel the 6.5bn dollars demanded by holdouts who have accepted the last pre-accord reached in New York with the mediation of Special Master Daniel Pollack, and who are willing to a 25% 'shave', as proposed by Argentina.

Another 8.5bn will be spent in paying debt in the hands of European bondholders and those who still are holding discussions in New York with the Argentine team of negotiators.

Last Friday New York Federal judge Thomas Griesa ratified his willingness to lift injunctions placed on debt payments owed to creditors that participated in previous restructurings, as long as the Argentine congress lifts the so called 'lock bill' and sovereign payments bill plus complies with the pre-accords reached with the holdouts that accepted the President Macri administration proposal.

This means paying holdouts cash with dollars to be collected from a new issue of bonds once the Argentine congress complies with lifting the controversial bills, which is expected to take place next month when the new legislature is inaugurated.

Although the Macri administration does not have sufficient votes by itself in Congress, apparently it does have a consensus support that will enable the lifting of the controversial bills, as has been worked out for other issues. President Macri and his cabinet are optimistic about reaching the necessary understanding in Congress.

Likewise on Monday Argentina moved to drop its appeal of a US judge's ruling that blocked Citigroup Inc last year from processing interest payments to holders of $2.3 billion in bonds issued under the country's local laws.

A federal appeals court in New York had been set to hear the case on Wednesday. But in court papers, Argentina's lawyers said recently elected President Mauricio Macri's administration had decided not to pursue the appeal.

49 comments Feed

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1 HughJuanCoeurs (#) Feb 23rd, 2016 - 07:22 am Report abuse
So Argentina is going to issue more worthless bonds to pay back the bonds they didn't honour last time? Can anyone see a flaw in this?
2 Skip (#) Feb 23rd, 2016 - 07:32 am Report abuse

As long as someone buys the bonds.
3 Welsh Wizard (#) Feb 23rd, 2016 - 09:37 am Report abuse

Think of it like debt consolidation
4 Captain Poppy (#) Feb 23rd, 2016 - 11:19 am Report abuse
Let's see.....people bought their bonds after the country totally collapsed and they were worthless. Now people are wondering who will buy there bonds as they are moving in the right direction with better management and leadership.....really?
5 T_Paine (#) Feb 23rd, 2016 - 01:04 pm Report abuse
If the price is right someone will buy them. Its really not very much at all and they have do get this mess behind them.
6 ilsen (#) Feb 23rd, 2016 - 01:09 pm Report abuse
best he calls Wonga, or another 'pay-day' loan company...

Still, it is good to see they are facing up to reality at last...
7 Conqueror (#) Feb 23rd, 2016 - 03:16 pm Report abuse
No mention of Elliott Management Corporation or Aurelius! Isn't that another US$10 billion?
8 Klingon (#) Feb 23rd, 2016 - 04:26 pm Report abuse
@7 What does it matter, it's not like that greedy old scrooge Singer is going to give you a cent.
You would only blow it on cheap port and old used Playboys anyway.
9 Marti Llazo (#) Feb 23rd, 2016 - 08:05 pm Report abuse
It looks as though not even the the Argentines trust the Macri government in its proposed debt haircut offer. Which is understandable.

The “Pablo Varela” group of 13 holdout bondholders who have a firm judgment against Argentina for its nonpayment of this debt, have asked the district appellate court in NY to deny Judge Griesa's plan to grant a stay to the injunction that currently has the effect of keeping Argentina from accessing international financing.

In other words, it's not just Singer and the Big Dogs, but the Argentines themselves who don't have one, um, whit of confidence in Argentina's willingness to pay what is owed.
10 Skip (#) Feb 23rd, 2016 - 08:05 pm Report abuse
Not everyone has settled with Argentina. However it is under no obligation to settle with others to get the current injunction lifted.

In addition, it is common if not standard, to issue new bonds to pay bonds due or maturing. I expect Argentina will begin to pay less and less in interest on future bonds as it slowly repairs its standing.
11 T_Paine (#) Feb 23rd, 2016 - 08:25 pm Report abuse
Why don't these fools just pay what they owe and move on?

Every day they don't pay is a day their recovery is stalled.

There's more important things to worry about...

Like keeping the lights on in Buenos Aires.
12 Marti Llazo (#) Feb 23rd, 2016 - 10:01 pm Report abuse
@10 “.... issue new bonds to pay bonds due or maturing. I expect Argentina will begin to pay less and less in interest on future bonds as it slowly repairs its standing.”

Much of the debt in play here has already gone through two or three or more nonperformance crises, multiple restructurings, and in some cases multiple defaults. Some of the debt in this show goes back to defaults in the 1980s. Argentina simply cannot break the habit of serial defaulting. It's in the hierba, the air, the water, the DNA here. Argentinicity is based upon not just default but upon the sternum-thumping and thick spittle-mist of arrogant default. Since this habit is well known as Argentina's most endearing and most enduring national trait, just what sort of probability should we assign to this new restructuring, that it will also not end well? I would say that probability is so high as to be “approaching unity.”
13 chronic (#) Feb 23rd, 2016 - 10:46 pm Report abuse
rgs are like a dog returning to its vomit.
14 T_Paine (#) Feb 23rd, 2016 - 11:44 pm Report abuse
They're selling U$ to support the peso...again.

They are fools
Utter fools
15 Marti Llazo (#) Feb 23rd, 2016 - 11:46 pm Report abuse
So what's a likely interest rate for an unsecured and insanely risky bond debt sale for Argentina? 18 percent?

Maybe they should put up the fragata Libertad as collateral.
16 T_Paine (#) Feb 24th, 2016 - 02:10 pm Report abuse
How do all of these Rgs have time to protest so often? Every day there are 1000s of people in the streets.
Don't they work?

Gov't needs to stop paying them when they strike.
And Fire them when they don't show up

3rd worlders think they have rights...
It's funny...
Like a dog who thinks they are people.
17 golfcronie (#) Feb 24th, 2016 - 05:08 pm Report abuse
It is their National pastime, surprised they are not banging dustbin lids and burning tyres.
18 Captain Poppy (#) Feb 24th, 2016 - 06:28 pm Report abuse
“We have had an agreement on economic terms with Argentina since Thursday,” Matthew McGill, a lawyer representing lead holdout creditors Elliott Management and Aurelius Capital Management said in a hearing before a US Federal Appeals court in Manhattan.

5 Billion, seems like Macri will now be able to move forward. But......there was someone here saying this would never happen and they will get 100%
19 T_Paine (#) Feb 24th, 2016 - 09:50 pm Report abuse
A 30% haircut on 100% interest rate is full payment I think...

They've not come to an agreement yet and who knows how it will come out in the end.

Argentina doesn't deserve a break.

I do think Macri is trying but I don't think its possible to fix.

Argentos are arrogant, stupid and greedy. I don't think the economy can be fixed without first fixing the diseased Society. And I don't think that will ever happen.
20 Marti Llazo (#) Feb 24th, 2016 - 10:25 pm Report abuse
---Quote ----

NEW YORK, Feb. 24, 2016 /PRNewswire/ -- Daniel A. Pollack, Special Master presiding over the settlement negotiations between the Republic of Argentina and its Bondholders, issued the following statement today at 2:15 p.m., EST:

“A lawyer for certain 'holdout' Bondholders made a statement in court this morning to the effect that Argentina and NML had reached an Agreement in Principle on economic terms. That statement violated the confidentiality of the discussions between the parties, which is an inviolable principle of all negotiations through me as Special Master. If and when there is a signed Agreement in Principle reached between those or any other parties, I will announce it as Special Master.”

SOURCE Daniel A. Pollack

-- end quote ---

21 T_Paine (#) Feb 24th, 2016 - 10:53 pm Report abuse
Peso quickly moving to 16/1. What I don't get is why its not worse?
There's absolutely nothing backing it up.
The reserves are already pledged to China/France
There's no exports to speak of
Soy is unprofitable

I don't get it.

I wonder when the rest of the people will catch on?
22 Captain Poppy (#) Feb 24th, 2016 - 10:57 pm Report abuse
We miss the old edgier yiu. These don't work as well.
23 Marti Llazo (#) Feb 24th, 2016 - 11:43 pm Report abuse
It will be interesting now to see just what chance Macri has in getting legislative approval for any eventual package for paying the holdouts. The lower house might be eventually convinced but the Argentine senate could be a harder nut to crack. There is lots of resistance to the idea there, and a lot of popular resistance as well. There is just no telling at this point. There are several measures that have to be dealt with and a congressional stalemate on any one of them could torpedo the entire and rather fragile set of conditional “agreements in principle.”

The economy here is still a mess. Rising unemployment. Manufacturing output way down . Demonstrations looking like the new landscape. Insane acceleration in inflation. Peso crashing. Weak points in infrastructure. Weak markets.

Who is their right mind is going to hold new financing for a perpetually high-risk borrower whose fortunes are not looking so good ? Maybe France. They can afford to risk a few billion in the next default, I mean, restructuring.
24 Captain Poppy (#) Feb 25th, 2016 - 01:30 am Report abuse
If there's a fee to be made by the underwriters and there is, they will be out in force. And as long as there are the likes of scum like singer, there is, they will buy.

Buy hey, the real story is that Macri is ttying just as hard as those who hate Arentina. Somehow I don't think they really care what you guys think. You can't talk something into happening boy, as much as you tried. Only the Islanders hate argentina as much as you.....mmmm.
25 Skip (#) Feb 25th, 2016 - 09:41 am Report abuse
Why did Yankeeboy change his name?

Anyway, a weakening currency is good for Argentina. Will assist exports and make imports more expensive. Argentina is in recession and the last thing that will help is a strong currency.

It's how the market rebalances.
26 T_Paine (#) Feb 25th, 2016 - 11:54 am Report abuse
Weakening can be good for some countries
Not crashing
Along with 40% inflation
Plus they import more than they export.
27 Skip (#) Feb 25th, 2016 - 01:18 pm Report abuse
The inflation was high BEFORE the devaluation.

And thanks for proving my point..... “they import more than they export”.

Will assist exports and make imports more expensive. It's how the market rebalance.

You might have a new name but it's still the same dickhead at the keyboard.
28 T_Paine (#) Feb 25th, 2016 - 01:28 pm Report abuse
Inflation is tracking higher now

What segments of their manufacturing will be better now with a depressed peso?
Please name them so we can track your brilliance
29 Condorito (#) Feb 25th, 2016 - 02:36 pm Report abuse
“Who is their right mind is going to hold new financing for a perpetually high-risk borrower whose fortunes are not looking so good ? ”

You answered your own question @12
“Argentina simply cannot break the habit of serial defaulting”

Serial defaulting is only possible if there are serial lenders who will take the risk...which there will be this time as there were last time and the time before...

@28 yankee-boy
Have you been inspired by Torres del Paine?
30 Marti Llazo (#) Feb 25th, 2016 - 02:54 pm Report abuse
@25 “ weakening currency is good for Argentina. Will assist exports and make imports more expensive.”

So then the trend toward 50 percent annual inflation is also good for Argentina. Because the nature of the devaluation is directly driving this high rate of inflation.

Devaluation can be useful when you are dealing with a strong and/or overvalued currency and you have something to sell. But the ARS is weak, and becoming weaker almost by the day. In order to do anything remotely resembling productive here, Argentina has to import parts. And pay for them (curious concept). And it has to pay for imported energy. Lots of parts and energy. Lots of expensive parts and they don't get their energy cheaply from either domestic or foreign sources. That is making already-inefficient productivity even more costly.

There are now places in Chile that are only accepting ARS at the equivalent of around 18-20 to the dollar, such is the confidence and perceived value of the rapidly inflating Argentine peso. But a crashing peso is good for the country.... hmmmmm.
31 Captain Poppy (#) Feb 25th, 2016 - 11:03 pm Report abuse
Paine you can change your names but you can never change your derogatory manners.

Did an RG really steal your wife? Lol

The world is changing, as is Argentina. Try it.
32 T_Paine (#) Feb 26th, 2016 - 01:16 am Report abuse
75 years of devolving doesn't change with one Prez
33 Captain Poppy (#) Feb 26th, 2016 - 01:39 am Report abuse
Very true.....so why all the hate yb?
34 T_Paine (#) Feb 26th, 2016 - 05:19 pm Report abuse
Market makers are saying they won't be able to get all the U$15B in U$ in the USA they'll have to get some of it in EU.
Probably priced at 8%
Not as bad as it could have been

Argentine Prosecutor now saying that Nisman was murdered.
Like it was ever in doubt
35 Captain Poppy (#) Feb 26th, 2016 - 06:24 pm Report abuse
Maybe the Argentine's will get lucky and they will trace the murder back to cuntlips.
36 T_Paine (#) Feb 26th, 2016 - 09:35 pm Report abuse
If not murder they'll get all of them on something else. They should void all their passports now though.
37 HughJuanCoeurs (#) Feb 26th, 2016 - 11:04 pm Report abuse
I've got lots of Monopoly money I could spend...
38 Marti Llazo (#) Feb 27th, 2016 - 12:29 am Report abuse
Speaking of which, CFK and her buddies have received subpoenas this week on their dealing with contracts for shady “future dollar” contracts, where some US$17 billion was sold for less than market value in the closing days of the CFK government and this now poses an enormous liability for the central bank here, and there is a fraud charge under consideration according to media here. Apparently this is the first such inquest at that level for CFK and a suggestion that deeper investigations might be on the way. Kicillof and Vanoli also got their subpoenas for depositions in April.

In jibberjabber -

39 axel arg (#) Feb 28th, 2016 - 04:01 pm Report abuse
Since they are in office, Macri and his time have shown that they aren't even smart conservatives, in fact, neather the president, nor many of those people who have always defended Griesa's usurious rulling haven't seen yet that if there was a common posture among all politic parties in Argentina, in relation to our conflict with the vultures, perhaps this problem would be solved, without making shameful concessions, however, since Griesa dictated that rulling, Macri and his opportunist acolytes said that it was necesary to go to Griesa's court, and do what he orders, but neather Macri nor the morons who sorround him took into account that in that moment the ruffo article (right uppon future offers) was in force, then, if C. F. K. did what Macri said, many of those holders who accepted some of the two restructurings, had right to demand a simillar payment, than what was paid to the vultures. Even Alfonso Prat Gay presented an amicus curiae in the court from new york in 2013, where he warned that it was unfair to pay more to the vultures, than what was paid to the holders who accepted the offers of 2005 and 2010, however, now that he's Macri's minister, he erases with his elbow, what he wrote with his hand.
In contrary to what some people here, who often insut me believe, i am not socialist, i just have a centre left ideology, and i think that a better capitalism is posible, in fact, it's really pathetic to see many people who defend capitalism, and at the same time they support Griesa's decision, what kind of capitalism is it?, how can they be so donkeys?, how is is posible that they don't see that it's really dangerous for the sistem to legitimate such an usurious rulling?. Anyway, it's necesary to say that if Macri's government wants to solve this problem the soonest possible, is because his true purpose, is to sink the nation again, with the cycle of foreign debt, which damages the future of most of us.
40 Marti Llazo (#) Feb 28th, 2016 - 08:04 pm Report abuse
Axel, mirate en el espejo, sos boludo.
41 T_Paine (#) Feb 29th, 2016 - 12:00 pm Report abuse
Post 39 is a rambling mess of idiocy.

It is no wonder Argentina is a failed state.
42 Captain Poppy (#) Feb 29th, 2016 - 02:57 pm Report abuse
Marti, you don't have a Spanish keyboard?

Axel, tell me what you know about the law in the USA besides....absolutely nothing? Your problem is that you are a Peronist and you are not use to the law NOT being manipulated to suit your needs.

I suggest that you get use to the changes that are underway in Argentina. The biggest is that the DEA is going to be so far up your asses that when you shit you will wipe your mouth and not your ass. Your drug dealing days in government is going to end.

Oh, yeah.....and don't you just love how the Fvp dropped Kirchner like the Black Plague? I've heard you will start seeing party switches as well.
43 Marti Llazo (#) Feb 29th, 2016 - 03:36 pm Report abuse
Yes, but flojera sometimes gets the better of me. And anyway people here are more and more dropping the accented characters when typing quickly and informally.

Mírate vos en el espejo.
44 Captain Poppy (#) Feb 29th, 2016 - 04:33 pm Report abuse
In Argentina? I get dozens of emails every day from Argentina and they all use the accents. Inadvertently as well when they write in English. Just an observation.

I didn't get a chance to see Puerto Madero during my visit. Are the containers moving finally?
45 Marti Llazo (#) Feb 29th, 2016 - 08:15 pm Report abuse
I am over 2500 km from Pto Madero and what happens there somehow manages to escape my notice.
46 Captain Poppy (#) Feb 29th, 2016 - 08:35 pm Report abuse
Containers were sitting there filled with goodies that Ass lips kirchner prevented from getting out. Not news worthy at the time but it was of interest to some watching them gather and rust.
47 Marti Llazo (#) Feb 29th, 2016 - 10:26 pm Report abuse
Looks like the Argentine government didn't treat the Argentine bondholders so well. So not all the holdout agreements, even in principle, are tied up. About 15 percent still unsigned. The Argentine group is asking Griesa to keep the injunction in place. Maybe you have to be a Big Dog to even think about getting paid.

Meanwhile, the peso continues to lose value in spite of Central Bank selling millions of dollars to prop it up. Peso selling at about 15.87 today, the worst yet.

Stay tuned.
48 Captain Poppy (#) Mar 01st, 2016 - 01:22 am Report abuse
Keep us posted Flavius.
49 Marti Llazo (#) Mar 01st, 2016 - 03:30 am Report abuse
Even better: you can read one of the recent articles yourself, and count the ifs:


It is noted here that Argentina will have to pay US$235 million in legal costs to the big four holdout funds. Which, when added to its own legal costs, adds up to a lot of chimichurri.

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