MercoPress. South Atlantic News Agency
Kicillof: “no change of NY jurisdiction, but a change of payment location”
Judge Griesa “clearly benefits” 1% of creditors “that never entered and never wanted to enter” the debt restructurings, claimed Kicillof 
”Paul Singer wants 1,600% profit because he is a vulture. But he can come and get 300% (of profit)” Argentina's new plan to skirt U.S. courts and resume payment on defaulted bonds aims to protect creditors who participated in two debt restructurings, Economy minister Axel Kicillof said on Wednesday. But he also emphasized that the bill sent to Congress did not mean a 'change of jurisdiction' from New York but rather a change of payment 'location'.
“Argentina has proven a massive, almost unanimous and completely successful debt restructuring,” Kicillof assured as he accused US Court District Judge Thomas Griesa of “clearly favoring” so called vulture funds suing the country over its defaulted bonds more than a decade ago.
Saying the ruling by Judge Griesa is “impossible” to comply with as it involves the payment of 1.6 billion dollars to bondholders (including interests) that refused to enter the country’s 2005 and 2010 restructurings, the minister renewed the government’s position that vulture funds never actually intended to accept Argentina's debt swaps.
“These gentlemen bought bonds for 50 million dollars and Griesa says we must pay them now. Griesa says you can't pay the 92% of creditors (that did accept the swaps) if you don’t pay those who bought bonds for 50 million dollars that turned into 800 million dollars. A snowball,” Kicillof affirmed accusing the New York magistrate of holding bondholders “hostages” to push for a solution benefiting hedge funds.
Judge Griesa “clearly benefits” 1% of creditors “that never entered and never wanted to enter” the debt restructurings carried out by the Kirchner administration back in 2005 and 2010.
“We are here to defend our contracts facing a ruling that puts us in a situation of difficulty, to continue honoring (the country’s) commitments. That is the law of sovereign payment that we submitted to Congress and that we will defend,” the head of Argentina’s economic affairs stated adding the bill grants a possibility of “action” to bondholders that have seen their payment held at the Bank of New York as a result of Griesa’s order.
“If the Bank of New York does not change its position, if Griesa does not allow the payment (…), we have ahead the September 30 due date and Argentina will pay,” Kicillof announced ratifying Argentina’s has not defaulted on its sovereign debt and that the Nación Fideicomisos S.A. represents a “safe” channel to secure payment to bondholders, removing the Bank of New York Mellon as payment agent.
Explaining that the government was not changing the payment jurisdiction –Griesa has already threatened a contempt-of-court order in such scenario- but seeking a “change of payment location” for bondholders to “collect” their money. “A government can't be banned from servicing its debt,” he insisted ratifying Argentina’s “unbreakable will” to pay.
Kicillof also explained creditors that refused the 2005 and 2010 swaps – only 7.6% of bondholders– will be now able to access the restructuring. “They can come and exchange their bonds (ruled by Argentina’s legislation) and they will get a 300% profit. Paul Singer wants 1,600% profit because he is a vulture. But he can come and get 300% (of profit),” the economy minister assured now aiming at head of Elliott Management and US billionaire Paul Singer, one of the holdout creditors in the case.
“We will not allow any other country or its justices to put what Argentines have done with so much effort and will continue to do, in jeopardy” Kicillof warned.
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Read all commentsSo no change of jurisdiction?
Aug 21st, 2014 - 08:59 am 0So if Griesa says this cannot happen then Argentina will accept that...... as he is still the judge within the jurisdiction that hasn't been change.
kici: “These gentlemen bought bonds for 50 million dollars and Griesa says we must pay them now. Griesa says you can't pay the 92% of creditors if you don’t pay those who bought bonds for 50 million dollars that turned into 800 million dollars...”
Aug 21st, 2014 - 09:30 am 0kic-ill, you bloody fool, this has been handled so since 1000 years, is handled today and will be handled in the next 1000 years. under NORMAL people, not under argentines robberment gangs.
your change bonds have lost their value since they came on the market. what about them if i buy them now and want to collect 100 %? not possible?
you´re so dumb!
Lets idscuss this like grown ups. Troll, Think etc, I'm not abusing you, just discussing this conceptually.
Aug 21st, 2014 - 09:44 am 01. Changing the place of payment is a change of jurisdiction as you are changing the jurisdiction of the payment. As such, the payment mechanism will be governed by Argentinean law.
2. The actual jurisdiction of the bonds will still be NY. Once you have asked a judge to interpret a private contract such as this what he says goes. Making the payment in BA will be illegal, not just conceptually but illegal under the terms of the bonds as the bondholders and government no longer have control over the process until the court order has been complied with.
3. This payment will be illegal and, as such, an event of default can be called by the bondholders (lets no forget that the Republic is already in default). This can allow them to accelerate. They haven’t done this as yet as they are waiting for the order to be complied with. Changing the place of payment actually affects them as they may not be able to accept this change.
4. Any contempt order from the judge could involve those who accept the new payment jurisdiction and they are assisting in evading the court order (very similar to sanctions where if you restructure to evade sanctions you can still get caught).
5. This could incldue, bonholders who accept payment into a US bank account, those who change payment to EURO and swap into US$, Argentinean entities who accept payments in Argentina and use those payment to find business in the US (obviously corporate veil issues will have an impact here).
6. Lets say that Argentina actually pays off all of its creditors (except holdouts). It will still be I a state of default until those guys have got the money owed to them under the order. This will mean no external funding from external bodies (BRICS might not fund in a case of default), no US$ investment etc. Given the impact the default is starting to have (it will be slow), this could cripple the economy.
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