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Mittwoch, 31. Oktober 2012

Ambito Financiero Warnings over payment outside New York

Debt Coverage:
Ambito Financiero: “Ruling out payment to the ‘vultures,’ awaiting Griesa’s move”
Ambito Financiero: “Warnings over payment outside New York”
Bloomberg: “Argentina TGN Re-Opens Debt Swap for Defaulted Bonds”
Reuters: “Argentina scorns US debt ruling, vows to pay restructured bonds”
Frigate Libertad:
HedgeCo: “Elliott Management leader digs heels in on acquisition of Argentine Vessel”
Argentine Economy:
NASDAQ: “Downgrade Could Hasten Argentina’s Frontier Departure”
Bloomberg: “Argentina’s Rating Cut to B- by S&P on U.S. Court Ruling”
Bloomberg: “Fitch Cuts Argentina’s Outlook to Negative After Court Ruling”
Press Freedom/Argentine Society:
ABC News: “Argentina’s Clarin Defiant in Face of Gov Threats”
Bloomberg: “Clarin Says Argentina Media Bill Violates Property Rights”
Washington Post: “Argentina’s opposition Grupo Clarin plans to exhaust legal remedies defending its businesses”
·         Two surrogate judges sitting for the court that is to decide the implementation of the Media Law upon Clarin resigned yesterday.  They were judges in line for retirement, and the government has been preparing a bench of candidate judges with ties to Kirchnerism to be ready to replace outgoing judges; so this is expected to gain 2 votes for the government’s strategy to dismantle Clarin Group.
·         The House of Deputies may pass the law to lower the voting age to 16 today.
Global Relations:
MercoPress: “Argentine-Iran dialogue is ‘over.’ Says Jewish community rejecting Teheran’s denial of any involvement”
Buenos Aires Herald: “AMIA: Iran open to cooperate but denies responsibility”
·         In the midst of the closed-door talks in Geneva with Iran, the government in Teheran issued a strong and categorical denial of any involvement whatsoever in the AMIA bombing of 1994.  This set off a wave of new criticism from the Jewish community leaders in Buenos Aires.  The head of the AMIA said the declaration means that “the dialogue is over”.  No comment from the Argentine government.
·         Meanwhile, El Cronista reports that Oil World has reported that Iran is set to buy 110,000 to 120,000 tons of soy oil from Argentina in the last quarter of this year, up from 41,000 the same period last year.
·         Clarin reports that Ambassador Susana Ruiz Cerutti, the legal counsel for the Foreign Ministry, will travel this week to Hamburg to present Argentina’s complaint on the Frigate Libertad before the International Maritime Court.
Cristina Kirchner:
MercoPress: “Cristina Fernandez without a bout of low blood pressure cancels public activities”
·         Cristina suffered another attack of low blood pressure yesterday and cancelled all official activity for 24 hours.  La Nacion reports that sources at the Casa Rosada said it was related to the “emotional toll” of the weekend’s commemoration of the 2nd anniversary of Nestor Kirchner’s death.
JORGE ARGUELLO on Twitter and Blog:
·         He tweets links to a blog post where he notes that he is traveling to Philadelphia tomorrow to open that city’s “Argentina Week”
·         No political topics in today’s top 10

Ambito Financiero
Ruling out payment to the ‘vultures,’ awaiting Griesa’s move”
Wednesday, October 31, 2012
By Guillermo Laborda
The first scenarios have been confirmed, indeed complex ones, which were opened after the historic ruling by the Court of Appeals for the Second District in New York.  Yesterday there were the lowered debt ratings, when in reality they took 24 hours longer to happen.  It was the obvious: after the sentence, the chances grew of breaches in the terms of payment on Argentine debt.  They could have easily done it on Monday.  There wasn’t much to think about.  Another predictable element was learned on Monday night, but not in New York, in San Telmo: Argentina will not pay the vulture funds.
At the Torquato Tasso Cultural Center, on Calle Defensa a few meters from the Parque Lezama, Economy Minister Hernan Lorenzino spoke: “We will continue paying the 93% of the creditors that entered the swap, in dollars, euros and yen, as usual; we will respect the 93% of the bondholders among whom there are many Argentines, who made the effort that want to take advantage that some are alive.”  It was during a dinner organized by the Oesterheld group, in honor of a comic book writer among the ‘disappeareds’ of 1976.  During a little more than an hour of speaking, and after a video was shown on the economic policy of the Kirchner leadership, Lorenzino spoke on various topics, but couldn’t avoid referring to what comes next after the ruling in favor of the vulture funds.  “They want to carry us toward committing another default, but they will not achieve this,” said the head of  the Palacio de Hacienda railing against the risk rating agencies, international organizations with the IMF at the head, and from there, the vulture funds.  “Can you imagine the injustice it would be for those who accepted entering the debt swaps with haircuts that they end up getting less money than the vultures?” he asked the more than 100 people who applauded fervently while Hernán Grecco, the host of the event, made sure everyone was served and well-fed.
A phrase from the minister that gave indications of what could come next: “To plan to make your case to American courts, dismissing Argentine law, is to not know Kirchnerism and to not know what it has done in these last nine years.”  One has to take into account that the ruling from the Court of Appeals in New York found that Argentina has to be authorized to modify the mechanism of debt payment that is being honored today.  Since Lorenzino said that “we will continue honoring our commitments, whatever form they were, as we have been doing since 2003,” one immediately deduces that it is highly likely that the warning from the court will not be honored – a form of “contempt of court” – and that unilateral modifications will be made.
But this scenario will bring collateral effects like the ratings agencies putting the country into selective default, and credit default swaps (CDS) will soar and other blowback from that tremor like “cross default” clauses among different papers, acceleration of payments (by not complying, future maturities are demanded).  It would then open a semantic discussion: the government would certainly say: “I’m honoring payment (in Buenos Aires or wherever) but not in the U.S., because they are not allowing it.”  The ratings agencies will go to the point: “The conditions of payments were altered.”  The markets will have no semantic discussion of any kind.  Prices will fall (they are already doing this in anticipation).
When this will occur matters, but not so much for the markets.  The big question is the attitude that Bank of New York will take in December with this decision.  Will it be excused from making payments on Argentine debt?  It is entering a legal area with uncertain results.  Sources in New York told this newspaper that it was “very likely” that the Bank of New York is giving up continuing to be the debt payer after Friday’s ruling.  It will have to be seen.  What is clear is that with the holidays of Thanksgiving and the end of the year, Thomas Griesa is moving to handing down in January the magic formula with which Argentina’s debt payments will be governed (one part for the bondholders of the debt swaps and another for the vulture funds).  The Court of Appeals will approve it in March.  The magic formula matters little if it isn’t honored.  But the key is how then will Argentina move its pieces after the check-mate it received on Friday.
Ambito Financiero
Warnings over payment outside New York
Wednesday, October 31, 2012
By Pablo Wende
The possibility of making a payment in another jurisdiction to the New York bondholders to elude the vulture funds will have serious complications.  In the last few days different rumors have circulated about the alternative of depositing Argentina’s payments or making them through a transfer at the Bank of International Settlements in Basel.  They’ve even talked about depositing the funds directly in tax havens.
The ruling from the Court of Appeals in New York warns that Argentina has to be authorized to introduce a change in the system of payments for bonds that are not in default today.  In other words, Argentina will have to continue paying the American investors with deposits in Bank of New York.  To pay in a different locale would be equivalent to a default, at least in the case of bonds emitted under American legislation.
The Court of Appeals ordered Griesa to now put forth the manner that must be used to implement the sentence that favors the vulture funds.  In other words, the judge was asked to set forth how Argentina must honor the “holdouts” for them to collect equally with the rest of the bondholders, as required under the “pari passu” clause.  This resolution will take some months and it is most likely that the decision won’t be known until next year.  It’s not seen as a small factor, as in December they’ll have to pay interest on both the Global 2017 and the GDP coupon in December. 
Ex-Finance Secretary Guillermo Nielsen said that the “rulings both in the lower and higher courts are very aggressive against Argentina.  But at the same time they put forth an unprecedented scenario, that the resources moving through the Bank of New York are not those of the entity nor of the country, but of the bondholders.  As such, it’s not going to be easy at all to honor the sentence.”
While from the Economy Ministry they let it be known that they are going to the American Supreme Court for an appeal, nothing indicates that the top court will take up the case.  What is happening with Argentina could end up also complicating debt restructurings taking place in Europe, for example in Greece, and also if Rajoy takes Spain into some similar process.  This is due to the fact that in those restructurings there are also bondholders that are not entering that could repeat these demands.
With American courts demanding payment to the bondholders that fell outside the operation, there is a particular phenomenon being created, as the bonds emitted with Argentine jurisdiction are becoming more trustworthy than those with American legislation.  It’s no coincidence that the Global 2017 bonds, which came out of the 2010 debt swap, have been more damaged in the last few days.  Overall, the resumption of trading on Wall Street will allow for having a more clear idea of where Argentine bonds have landed after the latest bad news.  Yesterday, added to this true set of dominoes was the news of the decision by Standard & Poor’s to lower the country’s rating.
Tuesday, October 30, 2012
By Camila Russo
Argentine pipeline operator Transportadora de Gas del Norte SA is opening a debt swap for holders of defaulted bonds who didn’t participate in an exchange held in August, according to a filing to the Buenos Aires stock exchange today.
Tuesday, October 30, 2012
Oct 30 (Reuters) - Argentina's economy minister blasted a U.S. court ruling that would force the country to repay creditors who have sued to collect on defaulted Argentine bonds, saying the country will never pay the "vulture funds."
The South American country staged the world's biggest sovereign debt default in 2002 during a deep economic crisis. It has restructured about 93 percent of the roughly $100 billion in default through debt swaps launched in 2005 and 2010.
Tuesday, October 30, 2012
New York (HedgeCo.Net) – Paul Singer, the billionaire manager of Elliot Management, has opened up to his investors about the details surrounding the acquisition of the Argentinian vessel ARA Libertad.
In an investor letter obtained by the NY Post, Singer rationalized their Argentinian bond holdings and their moves to take control of ARA Libertad “We started buying performing Argentine bonds many years ago, because we thought they were cheap relative to Argentina’s vast economic potential,” Paul Singer told his investors, “Since that time, prices have been beaten down by the Argentine government’s protracted process of economic mismanagement, repudiating debts, berating bondholders and litigating with thousands of aggrieved creditors.”
Wednesday, October 31, 2012
Argentina, South America's third-largest economy, could see its tenuous grasp on frontier markets status loosen more rapidly after Standard & Poor's pared the country's credit rating one notch to B- from B on Tuesday.
Following its annual classification review in June, index provider MSCI (NYSE: MSCI ) said Argentina was on review for possible downgrade. In September, FTSE Group echoed those sentiments .
"Argentina is listed for possible demotion from Frontier due to continuing stringent capital controls imposed on international investors and the perceived lack of an independent regulatory authority to protect the rights of shareholders," FTSE said in a statement. "Argentina was demoted from Secondary Emerging to Frontier in 2010."
Tuesday, October 30, 2012
By Camila Russo
Argentina’s credit rating was cut one level by Standard & Poor’s, which cited a U.S. court ruling that prevents the country from honoring its debt without also paying holders of its defaulted bonds.
S&P lowered the country’s rating to B-, six levels below investment grade and in line with that of Jamaica, Pakistan and Belarus, from B, according to an e-mailed statement today.
“The downgrade of Argentina’s unsolicited rating reflects our opinion that the government may face increasing risks in the management of its debt after the U.S. appeals court ruling,” S&P said in the statement. “The decision may effectively increase Argentina’s liabilities and the government’s debt service.”
Tuesday, October 30, 2012
Fitch Ratings cut Argentina’s credit outlook to negative after a U.S. court ruling in favor of holders of the country’s defaulted bonds increased concern the government may not honor its debt.
Argentina’s B rating on its long- and short-term foreign currency debt, which is five levels below investment grade, was placed on credit watch negative, according to a statement today. The local currency debt rating was affirmed at B.
The action “reflects increased uncertainty about Argentina’s ability to service its international securities issued under New York Law on a timely basis using the U.S. financial system following the recent U.S. Appeals court ruling,” analysts Lucila Broide and Santiago Mosquera wrote.
ABC News
Wednesday, October 31, 2012
By Michael Warren
Grupo Clarin executives said Tuesday that they plan to exhaust every legal means possible of defying the Argentine government's Dec. 7 deadline for submitting plans to dismantle the media company that has become President Cristina Fernandez's leading critic.
The conglomerate is entirely focused on persuading the courts to extend an injunction barring enforcement of Argentina's law against media monopolies, company spokesman Martin Etchevers told foreign correspondents he invited to the headquarters of Clarin newspaper.
Grupo Clarin also owns television and radio stations, creates broadcast content, and provides access through its cable network to television channels and the Internet.
Tuesday, October 30, 2012
By Eliana Raszewski
Argentina’s Grupo Clarin SA (GCLA) said the country’s media law, which may require it to sell some television stations, violates private property rights and can’t be enforced.
Argentina’s government says Clarin has until Dec. 7, when a court’s suspension of the new media law ends, to sell the assets and comply with the legislation. Clarin should have one year from Dec. 7 to sell any assets if the law takes effect, company spokesman Martin Etchevers told reporters in Buenos Aires today.
Clarin, Argentina’s biggest media company, has frequently clashed with President Cristina Fernandez de Kirchner’s government since she took power in 2007. When Fernandez visited Angola in May, a member of her entourage handed out socks emblazoned with “Clarin Lies” to children. Vice President Amado Boudou wore a T-shirt with the same logo during the 2011 campaign.
The Washington Post
Tuesday, October 30, 2012
BUENOS AIRES, Argentina — Grupo Clarin executives said Tuesday that they plan to exhaust every legal means possible of defying the Argentine government’s Dec. 7 deadline for submitting plans to dismantle the media company that has become President Cristina Fernandez’s leading critic.
The conglomerate is entirely focused on persuading the courts to extend an injunction barring enforcement of Argentina’s law against media monopolies, company spokesman Martin Etchevers told foreign correspondents he invited to the headquarters of Clarin newspaper.
Wednesday, October 31, 2012
“Sitting at a dialogue table in which we insist we don’t trust at all the presence of Iran and saying that citizens from Iran were not involved in the Buenos Aires attack, is saying that the dialogue table is over”, insisted Borger on Tuesday according to the Jewish Agency News, AJN.
Borger was replying to statements from Teheran’s Foreign Ministry spokesman Ramin Mehmanparast who rejected point blank all the accusations against Iran citizens of involvement in the 1994 attack, the deadliest terrorist action in Argentine soil.
Buenos Aires Herald
Tuesday, October 30, 2012
Iran’s government rejected once more the involvement of any Iranian citizen in the 1994 AMIA Jewish Centre terrorist bombing, but indicated to be ready to help into identifying those who could have committed the attack.
Here, today, we condemn terrorism and reject any accusations against our citizens, and show our willingness to conduct a deep investigation to find ouit who perpetrated the terrorist attack”, indicated in Teheran the Foreign Ministry’s spokesman Ramin Mehmanparast according to local media.
Likewise, Mehmanparast remarked that “negotiations with Argentina will continue until we arrive to a clear conclusion.”
Wednesday, October 31, 2012
“Today, the President of the Nation, Cristina Fernández de Kirchner, was diagnosed with low blood pressure and was recommended complete rest for 24 hours,” the presidential doctors informed in a communiqué.
Cristina Fernandez spent the week-end at her home in the Patagonian province of Santa Cruz and had several political ceremonies scheduled for Tuesday at Government House, Casa Rosada.
Ambito Financiero
Miercoles, 31 de octubre de 2012
Por Guillermo Laborda

Dienstag, 30. Oktober 2012

El Cronista Diego Ferro: “It’s very hard to see the holdouts not collecting what they are demanding in the end”

Debt Coverage:
La Nacion: “Advice is to give payment options to bondholders in default”
El Cronista:  “Diego Ferro: ‘it’s very hard to see the holdouts not collecting what they are demanding in the end”
·         El Cronista and AF report that Argentine bond prices continue to get hammered as more investors are advised to sell their holdings.  Argentina’s CDS prices hit a four-year high.   The Merval fell 2% with a very low trading volume.
Global Relations:
·         Clarin and La Nacion report that the first Argentina-Iran meeting occurred in Geneva yesterday with no word on what was said or the outcome.  The delegations met for an hour.  La Nacion reports that the Jewish community leadership in Buenos Aires is “reconsidering its ties” to the Kirchner government over the dialogue with Iran.  “The way to make progress in the search for justice is not to negotiate with those suspected and accused of attacking our country,” said Sergio Widder of the local Wiesenthal Center.
Argentine Society:
·         The union action that blocked the exit of Clarin and La Nacion editions from the printing plants yesterday was condemned roundly by opposition leaders, ADEPA and IAPA.  Clarin quotes a leader of the union behind the action as saying that “we know that the government is with us on this.”
·         Mariano Obarrio reports in La Nacion that the young organizers of the 8-N protests are working on ways to avoid “infiltration” and “dirty operations” by government supporters to undermine them.  Furthermore they are working to keep the movement without a face or notable leader: “The strategy is that the government not have someone to target with dirty campaigns,” where the Casa Rosada would ‘construct a leader .. to have someone to confront.’”  They are also counseling the participants that, at any sign of violence from inside the crowd, to all sit on the ground immediately in order to isolate the infiltrators.
JORGE ARGUELLO on Twitter and Blog:
·         He tweeted that the embassy was closed due to the hurricane, and re-tweeted some old items about the Jimmy Carter meeting.
·         No political topics this morning in the top 10.

La Nacion
Advice is to give payment options to bondholders in default
Tuesday, October 30, 2012
By Martin Kanenguiser
The ruling from the U.S. Court of Appeals obliges the government to adopt a decision in the short term, be it to reopen the debt swap, pay the bonds in the country or enter into another default if it keeps to its rhetoric of “no negotiation” with the more aggressive creditors.
Experts consulted by LA NACION indicated that if the government wants to avoid a biggest problem, it will have to put forth a concrete solution to the American judges that have in their hands the resolution of Argentina’s pending debt waiting for payment since 2001.  If not, with the firm ruling, they could attach their payments abroad.
Despite that some official sources speculated on the possibility of delaying a decision, the ruling from the judges indicates that once Judge Thomas Griesa explains how Argentina must pay and what responsibility the banks have which make the payments in the name of the country, the sentence will be executed.  “Once the district court has taken these procedures, the mandate automatically returns to this court for greater consideration of the merits of the remedy, without the need for any notice of appeal,” said the judges in the decision.
There they ruled that Argentina violated the “pari passu” clause – which ensures equality among creditors – by discriminating against the holdouts, both the small investors and the vulture funds, by not paying them in a proportional manner and prioritizing, in turn, those that did accept the swaps of 2005 and 2010.
The possibility of reopening the debt swap, mentioned yesterday by the newspaper El Cronista, doesn’t seem to be in sync with the letter of the ruling.
"Argentina repeatedly expressed its frustration with the plaintiffs for not accepting the offers, but these were completely within their rights to reject a proposal of giving them 25 cents on the dollar.  And since the bonds do not contain any class action clause, Argentina doesn’t have the right to force them to accept a restructuring, even if it was approved by a supermajority,” the judges said.
Beyond the speculations, ex-Finance Secretary Daniel Marx said that “to reopen the swap and suspend the lock law would leave the creditors without an argument before the judges with respect to the country’s good will to solve the problem of pari passu.”
In turn, attorney Pablo Giancaterino, representative of small bondholders, said that “the solution is to sit with the lawyers, before the judge, and agree on payment, because the swap will not solve the problem and only will benefit the speculators.”  “The key thing to understand in Friday’s decision is that the U.S. judiciary wants a concrete solution, that the Argentine government didn’t contribute one.  While the local legal culture points to delays, for the Saxons it’s the opposite,” Giancaterino explained.
For this reason, he said that “possibly when the Court of Appeals saw that in the case of the Frigate Libertad Argentina decided not to pay a bail bond that could have been negotiated to US$8 million, it understood that the strategy is to delay and not settle, harming the country.”  The attorney said that if the government wanted to punish the vulture funds beyond mere words, “it will have to push the case that is with Judge Norberto Oyarbide, which denounced speculative maneuvers in the 2010 swap,” from a filing from leaders Claudio Lozano and Mario Cafiero.
Another attorney also said that “to reopen the swap would serve little purpose” after the ruling, but an analyst at an investment bank said that “this is the time to put it forth to President Cristina Kirchner, because before this there was no margin for it.”
But in the government they said to LA NACION that there is no space to reopen the swap as a signal of negotiation with the bondholders, by which the only option open is to pay those who accepted the swaps in Argentina if going to the U.S. Supreme Court fails.  The last resort would be to enter into default for reasons of “force majeure”.
El Cronista
Diego Ferro: “It’s very hard to see the holdouts not collecting what they are demanding in the end”
Tuesday, October 30, 2012
By Leandro Gabin
Greylock Capital Management is a high-risk fund that has precedents with Argentina.  Led by Hans Humes, this fund that had defaulted Argentine bonds, then entered into the second swap launched in 2010 after resisting in 2005.  Humes even led a bondholder committee that had local debt bonds.  Within the inner circle of this fund, which also led the recent debt swap with Greece, works Argentine Diego Ferro. Currently he is one of three partners in the firm together with Humes and also acts as portfolio manager.  Greylock manages US$500 million in distressed, high-yield debt from emerging markets.  In an interview with El Cronista, Ferro said that the government will try to buy time (appealing) or will seek a way to avoid paying the creditors that won the US decision.  He says that if the country wants to rejoin the capital markets, it will eventually have to settle with the funds.  But in the short term he is not pessimistic over the performing debt (which is being regularly paid) and even believes that one should buy the bonds at these prices.  “I don’t see this government not honoring the debt,” he says.
The market, perhaps the Argentine government, believed that the Court of Appeals would rule in the country’s favor.  Did it underestimate the power of the holdouts?
I don’t believe that the market had this issue as a one of its main concerns when evaluating Argentine risk (pesification, currency clamp, soy prices, international context are more relevant for the majority of operators).  This is a complex issue, that few expect to be clearly resolved in favor of one side or the other in the short term.  It’s clear that the government expected a ruling in its favor, but for those that pay more attention to the process they can see that the tone from Judge Griesa was more firm, and the arguments used by the holdouts (pari passu) were very creative to be able to get a favorable ruling.  We are not surprised by the ruling (perhaps yes in how much in favor of the holdouts it was); but the somewhat unmeasured reaction of the markets surprised us.
Is there a danger that the government will enter into a technical default?  Or do you believe that the government’s appeal could reach the Supreme Court, something many dismiss?
I don’t think that the government wants to enter into a technical default, and its strategy from the start has been to try to delay the legal process and put resources into making the holdouts tire of waiting to collect.  The problem is that the holdouts in this case are professional groups that are accustomed to these tactics and know how to carry on the battle for a long time.  Even if it goes to the Supreme Court, due to the tone of the ruling from the appellate court it would be a bit surprising if it sided with the Argentine government.  But that court could have the government win in one or two years, something consistent with its strategy since the beginning (designed by their legal advisors, Cleary). 
Do you believe that the government should reset its strategy and present a payment plan to these creditors?
By having obtained rulings in the lower and higher courts it’s very hard to see these funds not collecting at some moment by the measure that the country wants to fully re-enter the international capital markets.  It’s been a while that Argentina has been financing itself with internal resources (ANSeS, Central Bank), and thus could ignore the decisions.  The last one complicates payments, but the country could continue putting its resources in and delaying the hour of compliance.  It can also try to design forms of payment or emission without going through the U.S.  But eventually Argentina will have to resolve the fact that a federal courtroom in New York has decided that it owes a big amount to a group of investors.  That doesn’t disappear with time and it has economic value.
Wouldn’t it be unfair for other bondholders that did accept the debt swap in 2005 or in 2010?
Argentina made a restructuring offer that was unilateral and quite aggressive (we could justify the strategy due to the 2001 crisis, but it could have been consensual instead of unilateral).  Many people accepted, and since then they received payments on time as promised by Argentina in 2005.  More people joined the swap in 2010.  Nobody obliged those people to accept those offers; some didn’t, went to a judge and argued that Argentina had promised to return the original value and submitted itself to New York law; and Judge Griesa agreed.  These investors have not received anything since the swap, and has been spending cash on attorneys to defend their case.  It doesn’t seem to be an issue of fairness or not to me, it’s an issue of different strategies to deal with the fact that Argentina decided not to pay its foreign debt at the end of 2001.
Both Judge Griesa as well as the plaintiff attorneys say that the country could pay from having US$45 billion in reserves.  Do you agree with this reading?
The issue of the holdouts is more a political issue than economic.  It’s not only an amount that it could pay, but that by resolving this issue one could expect a reduction in country-risk since Argentina would have no legal barriers to emitting debt in the US market as any other emitter from the region (Bolivia, for example, issued at under 5% in dollars for some years).
How do you think this will be resolved? Will Argentina settle with the funds by paying what they ask or do you believe that it will kick the board and try to dodge the payments?
I think that Argentina will continue trying delay the legal process, and if it cannot perhaps try to make payments through a safe jurisdiction that is not within reach of Griesa’s courtroom.  I don’t see this government not honoring its external obligations, because it was always very clear that this would be one of its priorities.  Personally I think that the sooner this issue (and the Paris Club) the easier it will be to rejoin the international financial system (something that would be good for the country, which seems to be needing cash due to its recent currency policies).
You have performing Argentine debt in your portfolio.  What is your recommendation to investors in this situation?
Yes, we have bonds, and we don’t believe that in the short term the government will do anything to put the next few months’ payments in danger.  For that it seems to us that the drop in prices represented an opportunity for increasing positions, and we will not sell at these prices