Friday, March 4th 2016 - 07:02 UTC

Paul Singer will have made a $2.4bn profit with the Argentine defaulted bonds

Elliott Management Corp., a New York-based hedge fund that invested in distressed Argentine government bonds well over a decade ago, will have made a $2.4 billion profit on its wager once this week's settlement is finalized, the Wall Street Journal said.

Paul Singer and Jay Newman, an Elliott portfolio manager, saw an opportunity when Argentina's government debt was trading at 20 cents on the dollar

Elliott will be handsomely rewarded for its patience, WSJ said, adding that the hedge fund will make a gain of “roughly 10 to 15 times its original investment.”

As part of the long-running litigation, Elliot persuaded a court in Ghana to seize an Argentine navy ship when it docked in that West African nation.

 A $4.65 billion settlement was reached Sunday night between business-friendly Argentine President Mauricio Macri's administration and four U.S. hedge funds, including Elliott Management Corp. founder and CEO Paul Singer's NML Capital Ltd.

Those large holdout creditors had successfully sued Argentina in a New York federal court after rejecting debt restructurings in 2005 and 2010, in which 93% of bondholders accepted steep haircuts.

Elliott will be handsomely rewarded for its patience, The Wall Street Journal said Wednesday, adding that the hedge fund will make a gain of “roughly 10 to 15 times its original investment.”

The paper said that profit takes into account “over $100 million for lawyer fees and other considerations.”

The Journal said Singer and Jay Newman, an Elliott portfolio manager, saw an opportunity when Argentina's government debt was trading at 20 cents on the dollar “in the early days of George W. Bush's first term,” or the start of 2001.

The financial daily noted that as part of its long-running effort to get Argentina to make full payment on the debt Elliott even persuaded a court in Ghana to seize an Argentine navy ship when it docked in that West African nation.

As a result of the legal battle waged by Elliott and other holdouts, U.S. District Judge Thomas Griesa in Manhattan issued a ruling in 2012 that blocked Argentina from making interest payments to its exchange bondholders (those that accepted the 2005 and 2010 restructurings) unless it first paid the holdouts in full or settled with them.

He finally moved to lift that injunction last month, just over two months after Macri succeeded populist Cristina Fernandez, who had slammed the hedge funds as “vultures.”

Griesa said in his Feb. 19 decision, which is conditioned on Argentina repealing laws that prevent the country from settling with the holdouts, that Macri's election had “changed everything” and that the country was now making a “good-faith willingness” to negotiate.

Macri moved quickly to reach a settlement to pave the way for Argentina's return to capital markets after a 15-year hiatus.

The judge's ruling put pressure on NML Capital and the three other large holdout hedge funds to settle with Argentina and accept a deal that gave them roughly 75% of their claims.

The origins of Argentina's late 2001 default, which was then the largest in recent history occurred amid a financial meltdown and economic depression.

36 comments Feed

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1 golfcronie (#) Mar 04th, 2016 - 09:52 am Report abuse
It's just business, but big business.
2 ChrisR (#) Mar 04th, 2016 - 10:29 am Report abuse
THIS is what TMBOA cost the country with her stupid actions against the 'vultures', stupid, stupid cunt.

Well done Singer.
3 Moderator (#) Mar 04th, 2016 - 10:37 am Report abuse
It are exactly these pratcices that prompted A Hitler to write Mein Kampf.
Have they learned nothing since WW II?
4 ElaineB (#) Mar 04th, 2016 - 11:05 am Report abuse
@2 Speaking from the gutter where you belong I see.

It is just business but unsavoury. There is no doubt Argentina is paying for foolish and feckless behaviour. Shame is that the people most hurt didn't make the decisions that now affect them so severely.
5 zathras (#) Mar 04th, 2016 - 12:25 pm Report abuse
Just wondering it has gone deathly silent from TMBOA.

Anyone know what she is up to?
6 ChrisR (#) Mar 04th, 2016 - 01:17 pm Report abuse
@ 4 ElaineB

Speaking from the top of the naff plaster of Paris Doric column on your faux mansion then?

You know what they call those in America, don't you: McMansions. so fitting.
7 Marti Llazo (#) Mar 04th, 2016 - 02:15 pm Report abuse
So Mercopiss is citing a WSJ article that is in turn using numbers provided by the Argentine government which are of course purely Machiavellian clockwork. When Argentina presented those numbers they had to reveal that they were guesses and assumptions since they didn't have the data on when the main creditors purchased which bonds and for how much. Sort of reminds us of the new INDEC..... nobody with any sense is going to trust it, particularly after the only competent and honest director of the bunch was fired by the Macri government after revealing what the new government was up to.
8 ElaineB (#) Mar 04th, 2016 - 03:57 pm Report abuse
@6 Your gutter language lets you down. Why are you so obsessed with other people's sex lives? Don't you have one, old man?
9 SebaSvtz (#) Mar 04th, 2016 - 04:33 pm Report abuse
Business is business.

Singer took a serious risk, he court-battled for years, and now he gets a reward. The only one to be blamed here is the Arg gov and its stupidity.

No guts, no glory.

I have nothing against him. I only dislike his stupid move trying to seize our Ship, and a derogatory remark he had against our navy (a small, silly joke I must say, but I didn´t like).

I for one would hire Singer to manage our assets rather than insulting him for doing what he is supposed to do: profit.
10 ChrisR (#) Mar 04th, 2016 - 05:35 pm Report abuse
@ 8 ElaineB
What number is that on your cut and paste list? You use this all the while.

BTW, being in the gutter is much safer than being a prissy stuck on a plaster column: you have father to fall and fall you will with your 'superior' attitude.
11 Vestige (#) Mar 04th, 2016 - 07:19 pm Report abuse
See how the shifty money lender conspired to take from the working people.
When did he arrive.
What tools did he use.
What did he produce.
12 bushpilot (#) Mar 04th, 2016 - 07:52 pm Report abuse
Singer gained, but did Argentina lose something?

Paying what you owe isn't considered losing money.

I want to ask. Did the 25% haircut offset the extra interest accrued by dragging this out all these years?
13 Marti Llazo (#) Mar 04th, 2016 - 11:44 pm Report abuse
The Argentines by and large don't seem to understand that they received a great deal of money and benefit from a long series of loans which, for normal people, carry an understanding of obligation for repayment according to terms of the agreements. Money? What money, asks Alberto the Argento. I deed not geet no steenkin money.

This inability to understand the fundamental principles of finance is one of the things that keeps the Argentines among the lower primates and makes the Bolivians look like fooking economic geniuses in comparison.
14 bushpilot (#) Mar 05th, 2016 - 01:06 am Report abuse
@7 ML

You mentioned an INDEC director who was too “transparent” for the Macri government and was let go for revealing what the Macri govt. was up to.

Do you know the specifics of what he was revealing about the Macri administration? I had the impression this administration was trying to re-establish trust on the world stage but what you are saying seems to say they still will misrepresent the numbers. I suppose all governments spin the numbers to some extent.
15 ilsen (#) Mar 05th, 2016 - 01:54 am Report abuse
I totally support ElaineB's angle on this.
16 Marti Llazo (#) Mar 05th, 2016 - 03:14 am Report abuse
@14 Not “he” but she. Bevacqua.
17 La Patria (#) Mar 05th, 2016 - 04:05 am Report abuse
Are there any figures which show how much extra Argentina is paying now from the years of Kirchner refusal?
She's not affected but the people are
18 Don Alberto (#) Mar 05th, 2016 - 04:46 am Report abuse
@ 16 Marti Llazo wrote: “ Not “he” but she. Bevacqua.”

but did not answer bushpilot's question “Do you know the specifics of what [s]he was revealing about the Macri administration?”

@ 7 Marti Llazo wrote: “When Argentina presented those numbers they had to reveal that they were guesses and assumptions since they didn't have the data on when the main creditors purchased which bonds and for how much. ”

But we do know quite a lot about how much Singer/NML paid, because it is revealed in “Sovereign immunity in NML Capital Ltd v Republic of Argentina - Supreme Court of the United Kingdom - Judgment”: “7. Between 6 June 2001 and 2 September 2003 affiliates of NML bought bonds in the two bond series at prices which were, in aggregate, 55.37% and 62.82% of the face value of the respective series.”

Later acquirements may not be public knowledge.
19 Marti Llazo (#) Mar 05th, 2016 - 04:53 am Report abuse
@17 Figures, yes. I am guessing that with your nick you can read the vernacular. These are the “costs of the litigation conflict since 2010” according to one source, which attributes the “ stagflation” of the economy to the failure to resolve the holdout debt issue. And this is without considering the cost to Argentina in terms of shredding its reputation.

USD 5.600 millones
Esa es la diferencia entre el monto de la deuda original a fines de 2001 de USD 6.400 millones y la oferta de pago con intereses y punitorios de unos USD 12.000 millones

USD 100.000 millones
Fue la pérdida de generación de riqueza por el conjunto de los argentinos desde 2010, cuando se hizo el último canje de deuda y el Gobierno decidió “vivir con lo nuestro”. Se cerró el mercado de deuda internacional. Fueron USD 2.400 menos en cada bolsillo de los argentinos, al contraerse la inversión extranjera directa en más de USD 120.000 millones

1.000.000 de empleos
El estancamiento del PBI en el último quinquenio provocó que se dejaran de crear unos 200.000 puestos por año. El desempleo real se elevó de 7,4% de la oferta laboral a más de 11%, a unas 2 millones de personas. De ahí el salto de la pobreza del 15 a 30% de los hogares y de la indigencia de 5 a 10% de las familias
30% de inflación

La estanflación y la consecuente retracción de la oferta de crédito, junto a una política de clara indisciplina fiscal, deterioraron la capacidad de compra de los salarios y la competitividad de las empresas

USD 13.000 millones
Es el actual nivel de reservas en divisas del Banco Central descontado los USD 11.000 millones del swap del Banco de China y otros USD 5.000 millones de la banca extranjera, luego de haber superado los USD 52.500 millones a fines de 2010, por el uso para pagar deudas y también gasto corriente del Tesoro
20 golfcronie (#) Mar 06th, 2016 - 08:43 pm Report abuse
Who voted the government in then? You get what you vote for.
21 Stevie (#) Mar 07th, 2016 - 03:05 pm Report abuse
As is Cristina was the one issuing the bonds...
You guys don't know what you talk about.
Like in Europe, you shout PILITICALLY CORRECT!! and then pretend to understand what is going on around you...
22 Captain Poppy (#) Mar 07th, 2016 - 04:23 pm Report abuse
Man Gus, MP is really getting desperate for a fan base.
23 axel arg (#) Mar 07th, 2016 - 04:36 pm Report abuse
When i warned about the huge profit that Singer would get in case that the government accepts Griesa's usurious rulling, many people called me moron, as they often do, i hope that now they don't insult mercopress for saying the truth.
Beside, if people like Alfonso Prat Gay, who presented an amicus curiae in the Court from New York in 2013, or Ann Krueger and Chirtine Lagarde supported the argentine posture, it wasn't because they are populist, or idiot people who know so little about how the financial system works, they did it because unless they are better capitalists than many of those donkeys who still criticise us for not accepting Griesa's usurious rulling. Although in the case of Prat Gay, now that he's Macri's minister, he erases with his elbow, what he wrote with his hand.
If it soposes that most of the people defend capitalism, it's really pathetic to see how some of them can't see how dangerous is to legitimate for the system such an usurious decision.
On the other hand, Macri's government can't see either that the rethoric that they use is too dull, in fact, they often say that the country neather grows, nor creates jobs since 4 years ago, which is an absolute lie, but even in case it was true, most of the measures he has taken, just can provoke a recession in our economy (40% of devaluation, elimination of subsides, massive dismissals in statal entities, etc), it's pretty obvious that if he wants to solve the conflict with the vultures the soonest possible, even under shameful concessions, is because his true purpose is to return to the cycle of big foreing debt that ruined the future of millions of us in different opportunities.
24 Marti Llazo (#) Mar 07th, 2016 - 06:11 pm Report abuse
@23. Axel, we still call you moron.
25 Lucifer (#) Mar 07th, 2016 - 06:23 pm Report abuse
The Argentines were always going to pay.
It's simplyNY contract law with 200+ years of precedent.

They're lucky Griesa didn't allow Singer to take all their property in the USA.
It was getting close to that point before the adults took over.
26 Marti Llazo (#) Mar 07th, 2016 - 06:42 pm Report abuse
@25 Related to that -- discussion in the media here today about US$260 million in Argentine assets around the world that Singer and company still have under embargo. A small amount when considering what they are due, but evidence of the work they have done to corral Argentine assets. Looks as though those embargoes won't be undone until NML actually gets paid. Assuming they do get paid someday.
27 ChrisR (#) Mar 07th, 2016 - 07:00 pm Report abuse
@ 21 Stevie

Is that you, Gus?

Out of the hospital again I see, just be careful that you don't put yourself back in given that you are already CAPITALISING (shouting!)

Ha, ha, ha,

Still defending the indefensible I see.
28 Captain Poppy (#) Mar 07th, 2016 - 10:47 pm Report abuse
#25. Most appropriate name yet. You can't stay away.....just behave.
29 Marti Llazo (#) Mar 08th, 2016 - 04:09 pm Report abuse
Still arguing in the argento legislature and outcomes far from decided. Getting the legislative approvals and other measures for everything needed to actually pay the bondholders before 14 April is still in doubt. Appropriate concern in the legislature that the 15 percent or so of remaining holdouts without accepted offers could still throw spanners into the works. Much to see yet.
30 Stevie (#) Mar 08th, 2016 - 05:52 pm Report abuse
Marci will sell the country out and you muppets clapping your hands is proof enough it is as bad as it gets.

But hey, it's not the first time, is it?
Nor will it be the last an Argentinean president leaves in a helicopter...
31 Marti Llazo (#) Mar 08th, 2016 - 06:43 pm Report abuse
You have to admit, Macri has been very successful in bringing new “foreign investment” to Argentina. Since December we have over a dozen new Bolivian sidewalk-sellers offering Mexican pencils and Chinese condoms.
32 SebaSvtz (#) Mar 09th, 2016 - 10:42 am Report abuse
Not a single penny out of those MILLIONS borrowed went to highways, hospitals, ports, power stations, schools, etc. Yet we owe now way more.

If we don´t investigate what happened to that money and, if found guilty, hung the responsible, this will keep happening over and over.
33 Marti Llazo (#) Mar 09th, 2016 - 01:42 pm Report abuse
@32 Yes, corruption, economic and monetary mismanagement, corruption, Peronism, corruption, antagonistic foreign policy, corruption, unaffordable social programmes, and corruption are all part of the habitual Argentine panorama, and they involve heavy recurring costs. Trying to prosecute ghosts from 20-40 years ago helps nothing and only creates additional unproductive finger-pointing and another in a long series of distractions.
34 Stevie (#) Mar 10th, 2016 - 08:06 am Report abuse
You talk rubbish, the money was borrowed before Kirchner.

Not a social programme in sight before that. Only people like you lot.
35 Captain Poppy (#) Mar 10th, 2016 - 11:47 am Report abuse
How desperate are the times that the persona “Stevie” shows up. God God MP.......your website is not even good enough to be called a joke!

Get over it. It really does not matter WTF your country did with the money, it only matters ......DID YOU TAKE THE MONEY AND SIGN FOR IT?
36 Marti Llazo (#) Mar 12th, 2016 - 02:49 pm Report abuse
Fat lady has yet to even warm up. Everybody gets paid by 14 April? Not gonna happen.

Reuters: “ U.S. appeals court delays lifting Argentina debt injunctions”

Article: “ A U.S. appeals court on Friday put on hold a judge's ruling lifting injunctions that have restricted Argentina from paying off some debts in light of the country's $6.5 billion offer to settle litigation over bonds in default since 2002.

” The 2nd U.S. Circuit Court of Appeals in New York stayed the March 2 ruling by U.S. District Judge Thomas Griesa until it could hear an appeal by creditors opposed to the lifting of the injunctions.

“ According to court documents, Argentina did not oppose the creditors' request to stay the order. It had earlier secured an expedited appeal, arguing that ”without prompt resolution, settlement of the largest claims in this long-running litigation may be in jeopardy.”

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