Argentina announces payments of over 3.5bn dollars in GDP-linked bonds

Friday, December 14th 2012 - 05:15 UTC

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Minister Lorenzino said it was a triumph over the hedge funds

Economy Minister Hernán Lorenzino announced on Thursday Argentina will be making payments for more than 3.5 billion dollars in GDP-linked bonds, at the Economy Ministry.
Lorenzino presented the payment as a triumph against the hedge-funds.

“Vulture funds couldn’t make us enter a technical debt-default as they wanted. And here is the proof that we do not need from international lenders to pay are debts.”

Though Argentina is officially transferring the funds Thursday, investors will be paid next Monday.

The payment of GDP linked bonds, a coupon that was offered to the bondholders who entered the debt-swap offers of 2005 and 2010, was uncertain after US judge Thomas Griesa ruled in November that Argentina had to pay the hold-out bondholders who had not entered the debt-swaps.

The Judge threatened to order the seizure of funds which Argentina planned to deposit in New York Mellon bank to pay these bondholders.

The GDP-linked bonds were originally created by former Economy Minister Roberto Lavagna in 2005, in order to entice investors to enter the debt-swap offers because the payments would be tied to the growth of the Argentine economy (which had been experiencing over 5% growth rates at that time).

After recent reports that Argentina grew more than 3.26% in 2011, a payment will be made this year. If Argentina does not grow more than that percentage for the 2012 and 2013 fiscal years, it will not have to make payments for that specific bond in 2013 and 2014.

Categories: Economy, Investments, Argentina.

Tags: Argentina, bondholders, Hernán Lorenzino, Roberto Lavagna, Thomas Griesa, Vulture funds.

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reality check
Argentine borrows 6.6B, Argentine pays 3.5b. Robbing Peter to pay Paul??????
Dec 14th, 2012 - 07:46 am 0
Shed-time
It really really says a lot when a country has to have a song and dance about actually making a routine payment on its debts.
Dec 14th, 2012 - 08:31 am 0
LEPRecon
Ah yes, Argentina paying with GDP linked bonds.

And since their GDP is about to be reduced to nothing, that actually means that they won't have to pay anything at all.

So in other words, Argentina is paying sweet FA, and making a big song and dance about it. Typical MO for them though, isn't it?

In other news the ILOST will make its ruling on the Libertad tomorrow. IMO it won't be good news for Argentina.
Dec 14th, 2012 - 10:02 am 0

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