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”
TRENDING TOPICS/ARGENTINA on Twitter:
· 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.”
Complications
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.
Bloomberg
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.
Reuters
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.
HedgeCo
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.”
NASDAQ
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."
Bloomberg
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.”
Bloomberg
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.
Bloomberg
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.
MercoPress
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.”
MercoPress
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
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