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Argentina reacts to hedge funds attempt to block a fresh debt emission

Tuesday, May 12th 2015 - 06:25 UTC
Full article 25 comments
“It is nothing more than another desperate attempt, after the vulture funds' failure in their efforts to stop the recent auction” said Ministry Kicillof “It is nothing more than another desperate attempt, after the vulture funds' failure in their efforts to stop the recent auction” said Ministry Kicillof
Aurelius Chairman Mark Brodsky argued that Kicillof boasted that the Bonar 24 issuance was international, thus subject to US courts Aurelius Chairman Mark Brodsky argued that Kicillof boasted that the Bonar 24 issuance was international, thus subject to US courts

Argentina has launched a stinging attack on hedge funds attempting to block payment on last month's Bonar 24 debt issuance, stating that the petition shows the 'vulture funds' desperation following the successful auction.

 “It is nothing more than another desperate attempt, after the vulture funds' failure in their efforts to stop the recent auction, in which they openly and unsuccessfully threaten Bonar 24 buyers,” the Economy Ministry led by Axel Kicillof fired on Monday in a press statement.

Earlier on Monday it was reported that a group of hedge funds holding defaulted Argentine debt titles, led by Aurelius Capital, filed a motion which seeks to include the Argentine Bonar 24 issuance within the range of New York district judge Thomas Griesa's pari passu ruling.

That ruling stops Argentina from carrying out debt interest payments until those creditors who did not restructure bonds are compensated in full.

The release further alleges that “in a new attempt at extortion, the vulture funds want Griesa to stop payments of a title that is under Argentine legislation, that was issued through a public auction held in Argentina and whose payments are made in this country.”

“This is internal debt in foreign currency, which has nothing to do with judge Griesa's jurisdiction,” the Ministry warned.

“This presentation confirms that the strategy of extortion designed by the vultures through the pari passu order has not worked, which is why they are increasing their attack in ever more illegal and erratic manners, even in the terms of Griesa's sentence”.

The statement concluded by accusing the holdouts of pushing Argentina even further from negotiating a settlement in the decade-long conflict.

“The vulture funds, instead of negotiating a fair solution have pushed on every occasion for extortive actions that lead nowhere. The measures now requested by Aurelius and Blue Angel do nothing more than deepen the failure of those extortive actions as a way of solving the conflict”, concludes the release.

At issue is the treatment of Argentina's Bonar bonds, which are denominated in US dollars but governed by local law. The Argentine government successfully issued 1.4 billion dollars in Bonar 2024 bonds last month in order to raise needed capital.

”Argentina’s Bonar 2024 Bonds and its other External Indebtedness also are subject to the Equal Treatment Provision (pari-passu), and Argentina can present no reason why it should be allowed to issue more of these bonds and make payments on these bonds without making a ratable payment under Plaintiffs’ bonds,“ Aurelius said in its filing.

Aurelius Chairman Mark Brodsky said in a statement emailed to media organizations that Argentine Economy Minister Axel Kicillof's boasts that Argentina's Bonar 2024 issuance was international proves the point that the government is thumbing its nose at the U.S. courts.

”Mr. Kicillof likes to brag that the recent Bonar 24 offering was international. We agree. That makes those bonds subject to our pari passu covenant. The hedge funds that piled into these richly priced bonds did so with eyes wide open,” said Brodsky.

Top Comments

Disclaimer & comment rules
  • willi1

    the arg robberment under the ck gang is violating contracts with their debtors since 14 years.
    kic-ill is member of the robberment gang and the poodle of ck, barking what she is telling him to say.

    May 12th, 2015 - 09:02 am 0
  • Klingon

    Politics aside it is outside of Gresia's juristriction, so NML don't have a case.
    They arre not going to see a cent until next year

    May 12th, 2015 - 09:44 am 0
  • yankeeboy

    2. Its not this transaction they're really interested in, its the next one where they have to re-fi in Sept. NML is sending out a warning shot to the Int'l banks that they'll get caught up in this mess if they help Arg in the transaction.
    This transaction was tiny the next one isn't so small and if they can't re-fi they will have to declare default.
    That's the game
    Austral Elvis is playing checkers and Singer is playing chess.
    Singer is winning in case anyone is keeping score.

    May 12th, 2015 - 10:23 am 0
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