MercoPress. South Atlantic News Agency
Judge Griesa looking into latest announcements by president Cristina Fernandez
A court hearing in New York scheduled for Thursday midday between hedge funds holders of Argentine defaulted bond and lawyers for the Argentine government was called off on request from the holdouts. Read full article
Comments
Disclaimer & comment rulesIf you write a bond issue under U,S. law (to con buyers) that is the law you must obey,you gave up sovereignty when you did that
Aug 30th, 2013 - 03:02 am - Link - Report abuse 0stop whingeing!
Would have to be a brave bond holder that moved their agreement solely to Argentinean jurisdiction.
Aug 30th, 2013 - 03:16 am - Link - Report abuse 0(2) Anglo
Aug 30th, 2013 - 03:24 am - Link - Report abuse 0I don't think you understand. They have been moved. That's the way these rg runts work!
3 british bomber
Aug 30th, 2013 - 07:14 am - Link - Report abuse 0I think you are the one who does not understand.
The move to The Dark Country's legal system ONLY applies if the existing bondholders want to reinvest their existing bond at 7% in the “new” bond, in other words to roll it over but under non-NY law.
@3 How do you figure that? As I understand it argieland had previously said that it wouldn't do any more debt swaps. So the “new” debt swap, on the same terms as the previous ones, would have to be accepted by the appropriate bondholders, wouldn't it? Obviously, everything depends on the wording, but I can't see how a “hold-out” bondholder can be forced to agree. That was the whole point of the arguements about pari passu clause and the lack of a boilerplate clause.
Aug 30th, 2013 - 07:17 am - Link - Report abuse 0I hear the real reason the hearing was postponed is Arg is negotiating payment with Singer.
Aug 30th, 2013 - 07:24 am - Link - Report abuse 0That would a good move in the right direction
In the end I don't see CFK living up to whatever is agreed upon
“Minister Lorenzino reiterated that Argentina has no intention of evading or eluding US Justice. But reiterated that the Argentine government has no intention of paying the NML Capital Ltd. and other plaintiffs beforehand, but will do everything it can to ensure timely payments to the other 93%.”
Aug 30th, 2013 - 07:44 am - Link - Report abuse 0Hmm. Let me wrap my mind around that statement. No intention of eluding US justice ( you mean justice as determined by the US court), but nevertheless changing the payment bank to other than the Bank of NY (Banco de la Nacion) so you can avoid having to pay the NML plainitiffs all that they are owed in contravention to the US court's decision...duh?
As I understand the Argie position, it will offer a new bond payable thru Banco Nacion to the original 93 % as well as the 7% holdouts on financial terms identical to the existing debt swap. That's a no brainer for the 93% for whom it changes nothing critical but reiterates the already declined haircut for or the 7% plaintiffs.
CFK and her minions would do well to keep their traps shut. They will never be able to sell new bonds or borrow new money in the international market for a very long time to come.
(4) Chris
Aug 30th, 2013 - 07:51 am - Link - Report abuse 0But the existing bonds are going to be defaulted by the rgs.
@8 I think you're making it up as you go along.
Aug 30th, 2013 - 08:18 am - Link - Report abuse 0(9) Conquer
Aug 30th, 2013 - 08:36 am - Link - Report abuse 0Argentina is going to lose in the supreme court and that will stop payments in America. Default.
@10 bomber
Aug 30th, 2013 - 09:04 am - Link - Report abuse 0You are clutching at straws. Chris and Conq are correct, the bonds have not moved anywhere. As for “Argentina is going to lose in the supreme court” - well the SC hasn't even said if they will hear the case yet.
@5 Conq
“but I can't see how a “hold-out” bondholder can be forced to agree”
They can't, but at some point they might just agree to accept the same rate the re-structureds are getting.
I think I need someone to define “vulture funds” for me:
Aug 30th, 2013 - 09:15 am - Link - Report abuse 0Argentina got 93% of her bondholders to accept a haircut of 65% of their investment, that is they were to be paid 35 cents in the dollar after several years!!!!!
The “Vulture Funds” paid about 30 cents in the dollar CASH!!!!!!!!
Now who the hell are the vultures, NML Capital or the Argentine government???????
12 Simon68
Aug 30th, 2013 - 09:22 am - Link - Report abuse 0I take my hat off to you sir!
Absolutely right: as usual.
(11) Condorito
Aug 30th, 2013 - 09:22 am - Link - Report abuse 0Well if the supreme court does not hear the case then the rgs have already lost. The bonds have moved because to get paid the holders will have to take up the new paper.
This explains what is going on:
Aug 30th, 2013 - 09:43 am - Link - Report abuse 0http://abcnews.go.com/International/wireStory/argentina-announces-debt-swap-us-law-20076708
14 british bomber (#)
It's an offer to the 93% that few believe they will take up.
In the short term paying up would be cheaper than defaulting but I think the latter is the political choice CFK will make. Whether the other bondholders will try to reclaim their lost 65% in the eventuality that the 7% get paid in full is simply unknown.
(15) Idlehands
Aug 30th, 2013 - 09:58 am - Link - Report abuse 0Already seen it. So the holders of the restructured paper refuse to move to rg land. So now they're not getting paid. Now what?
.....A new debt crisis for Argentina.
Aug 30th, 2013 - 10:41 am - Link - Report abuse 0http://www.forbes.com/sites/halsinger/2013/03/07/argentina-has-the-power-to-avoid-catastrophe/
(17) Idlehands
Aug 30th, 2013 - 10:55 am - Link - Report abuse 0Read that before. The problem is that the rgs see the 2001 default as the path out of disaster. Another default does not scare tmboa. And the bond holders do not get paid.
The default lead to the disaster - they must be a bit thick. Argentina has a way out of this. They've been playing brinkmanship but because the holdouts have held out (and look like they will win) Argentina has to make a choice that is a no brainer to a rational decision maker. They have the reserves to pay - choosing not to would be cutting off their nose to spite their face. Maybe they will. Who knows what CFK is thinking.
Aug 30th, 2013 - 11:13 am - Link - Report abuse 0I think the plan has always been to default 2014 doesn't look good for the trade balance or reserves so they may not have a choice.
Aug 30th, 2013 - 11:28 am - Link - Report abuse 0Next month we should hear from IMF on suspension too
Which means no more WB or IDB loans disbursed.
They have a huge U$ drain coming and not nearly enough coming in.
@14 bomber
Aug 30th, 2013 - 11:36 am - Link - Report abuse 0If the SC does not hear the case (or they hear it and they uphold the previous judgement) then everyone loses. No one gets paid.
The recent maneuver by the RGs to re-issue from Argentina would allow the restructureds to continue to get paid, something that otherwise is looking unlikely. I expect they will reluctantly accept at some point.
(21) Condorito
Aug 30th, 2013 - 11:46 am - Link - Report abuse 0That's why I said that the restructured paper has moved to rg land.
@16 You really don't get it. Let's try to simplify. There is 93% of the original bondholders who have NOTHING to gain from accepting the “new” debt swap. The terms are the same. In fact, they could lose because the “new” debt swap would be under argie law rather than somewhere honest.
Aug 30th, 2013 - 11:49 am - Link - Report abuse 0The 7% “hold-outs” also have nothing to gain. Argieland is “offering” NOTHING. “Take the 30 cents on the dollar like everyone else.” The reasonable response is “Pay what you owe.” Compared to what argieland really owes, US$1.33 billion is nothing. The world should be demanding that argieland pays the remainder of the US$93 billion plus interest, that it owes.
Not sure that's quite correct either. The “bluff” is that the 93% won't get paid if they don't swap to Argentine governed bonds. They do have something to lose and a decision to make.
Aug 30th, 2013 - 11:59 am - Link - Report abuse 0(23) Conqueror
Aug 30th, 2013 - 12:03 pm - Link - Report abuse 0Except that the bonds that get paid in NY are not going to get paid because of the court case. The only paper that is going to be paid is going to be in rg land. That is what the intended rg runts are issuing the new paper for. That's why Singer has put a stop on the case. They need to figure out what to do now.
(20) yankeeboy
It needs more than the IMF. America should embargo rg land like Iran.
Idlehands is correct. The 93% are being faced with a catch 22.
Aug 30th, 2013 - 12:21 pm - Link - Report abuse 0They either move the bonds to Argentina (and risk not being paid) or
They keep the bonds in USA (but CFK refuses to pay anything).
The truth is that CFK opened her big mouth and by making the statement she did, she showed the Judge that she intended to act in contempt of court.
If there is one thing that is guaranteed to upset a judge it is for a litigant to be contemptuous of his rulings.
https://www.youtube.com/watch?v=xC2fyCTkD-o
I cannot see TMBOA winning this one. The Judge can rule Argentina in default and that would have serious consequences for Argentine trade. Looks like they will either do a deal or be in default.
(26)nigelpwsmith
Aug 30th, 2013 - 12:32 pm - Link - Report abuse 0What you have got to remember is that Nestor Kitchener was elected after the last default. Tmboa thinks defaults are good. The rgs have already announced that they intend to default.
@22 bomber
Aug 30th, 2013 - 12:40 pm - Link - Report abuse 0“That's why I said that the restructured paper has moved to rg land.”
No, the restructured paper has NOT moved to RGland. It might at some point, but as yet new paper has NOT been issued.
@26 nigel
”They keep the bonds in USA (but CFK refuses to pay anything).“
It is not CFK who refuses to pay. The Argies have met all their commitments to the 93%. The court ruling has blocked future payments to the 93%. It is NML that has put those payments in jeopardy.
I have made this point several times before:
The bond holder's hair cut on the Rg default was not untypical for sovereign defaults and Argentina has met all agreed repayments. You might not like the way it was handled but there are no rules for how to negotiate sovereign defaults. Holders of Greek debt are getting a closer ”shave” than the 93% in this case - furthermore your taxes are paying for their default.
The spanner in the works here is NML and the likes who have blocked payments to the 93% 'cause they want their pound of flesh.
(28) Condorito
Aug 30th, 2013 - 01:03 pm - Link - Report abuse 0Well it looks like tmboa is pressing ahead and Singer won't back down so let's say 'it will have moved' to rg land (in a few weeks time).
I can't see all the 93% accepting so there will still be a technical default and the ensuing economic crisis so those that choose to swap probably won't get paid in the medium term anyway and they'll then be subject to Argentine rather than American justice.
Aug 30th, 2013 - 01:22 pm - Link - Report abuse 0There's also talk of those that do accept being held in contempt of court in the US.
CFK assumed she'd eventually win this case in the US courts - now that looks unlikely she's resorting to bluff.
Nestor was elected after the crash and got the credit for the rebuild - does CFK want to be remembered as the president that caused a crash? All she has to work on now is legacy. All the Campora crap will be for nothing if she causes a disaster and her succesor is routed at the polls.
She wants to be remembered and as influential on Argentine politics as Eva Peron - I believe she will find a way to make a quiet climb down.
If they go ahead with the restructuring by moving the bonds to Arg befreo SCOUTS takes the case they will be in contempt of court.
Aug 30th, 2013 - 01:24 pm - Link - Report abuse 0That would be very very bad for Argentina
Hopefully SCOTUS will let everyone know they are not taking this up by Sept. before the next payment is due.
(30) Idlehands
Aug 30th, 2013 - 01:48 pm - Link - Report abuse 0I think its gone too far for a back down. See the video at http://www.cato.org/blog/bondholders-should-think-twice-about-argentinas-debt-swap-offer
I think tmboa can see herself on the podium.
@31
Aug 30th, 2013 - 03:42 pm - Link - Report abuse 0The point is that attempting to circumvent the appeal court ruling will be taken as an act of bad faith and contempt by SCOTUS as well.
What's to stop TMBOA refusing to comply with the SCOTUS ruling regardless of what they say?
TMBOA has backed herself into a corner and no-one in the US courts is going to help her because she is already acting in contempt.
It's not NML that's preventing the payment, it's TMBOA who is refusing to pay the money to Bank of New York Mellon - who is obliged to follow the court's order and distribute the money to those that agreed the restructure - as well as those that recently benefited from the courts decision.
If TMBOA does not want to find Argentina in default, she will pay.
If she does not, then Argentina will find it next to impossible to get enough imports for the country to continue.
The economic crash will be catastrophic.
All the Falkland Islanders will get to watch as Argentina falls apart.
Oh what fun.
http://www.shearman.com/Dont-Cry-for-Me-Argentine-Bondholders-The-Second-Circuit-Rules-08-27-2013/
Aug 30th, 2013 - 04:04 pm - Link - Report abuse 0for a good analysis of the 2nd Circ opinion and time line, but surprisingly with little discussion of the ramifications of an attempt for a new swap of 2013 Banco de la Nacion payment-made bonds for the existing 2005 and 2010 bonds. In any case Argentina's KFC aka Cretina has shown herself to be much more like an Isabelita Peron than an Evita Peron.
Arrogant , stupid, and incompetent.
2 Anglo TCW have been buying up the paper big time over that last 2 months. They are going with Plan B. They will be swapping.
Aug 31st, 2013 - 09:24 am - Link - Report abuse 0Commenting for this story is now closed.
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