The U.S. judge overseeing lawsuits against Argentina by holders of the country’s defaulted debt will hold a court conference tomorrow, a court clerk said.

Autor: esteban Datum: Heute, 18:49

The U.S. judge overseeing lawsuits against Argentina by holders of the country’s defaulted debt will hold a court conference tomorrow, a court clerk said. U.S. District Judge Thomas Griesa is scheduled to hear from the parties in litigation by Elliott Management Corp.’s NML Capital Fund and other investors who are trying to collect on $1.3 billion in the defaulted bonds. A federal appeals court in New York ruled Oct. 26 that Argentina can’t make payments on its restructured sovereign debt while refusing to pay holders of the defaulted bonds. The appeals court sent the case back to Griesa to clarify how a payment formula is intended to work and to determine how the court’s orders apply to intermediary banks and other third parties. On Nov. 6, lawyers for NML Capital asked Griesa for an expedited decision on those questions, citing press statements by Argentine President Cristina Fernandez de Kirchner and members of her cabinet that, according to NML, show the country is trying to evade the appeals court ruling. In a letter to Griesa dated Nov. 5, Argentina said it’s seeking a rehearing from the three-judge appeals panel that ruled against it or in front of the full New York-based appeals court. In their letters, the two sides disagreed over whether an order staying his earlier decisions against Argentina is still in effect after the appeals court decision.  [Bloomberg]

#3306    Thema: AW: Argentinien

Autor: wally Datum: Heute, 23:09

Nov. 8 (Bloomberg) -- The rout in Argentine bonds is leaving creditors with the biggest emerging-market losses as a decade-long legal battle with billionaire Paul Singer threatens to push the country toward its second default. The South American nation’s dollar bonds lost 4.06 percent this month, with the notes posting their worst five-day slump since the global financial crisis in 2008, after a U.S. appeals court ruled Oct. 26 that so-called holdout creditors from its 2001 default, including Singer’s hedge fund Elliott Management Corp., must be treated equally. Brazilian debt returned 1.36 percent this month, while Mexican debt gained 0.68 percent. President Cristina Fernandez de Kirchner has vowed not to settle with investors she has dubbed “vulture funds” from Argentina’s record $95 billion default. The risk that she may jeopardize payments to current bondholders will keep the notes from rebounding, former undersecretary of finance Miguel Kiguel said. The cost to insure Argentine debt against non-payment for five years was 17.49 percentage points annually yesterday, the highest in the world, according to data compiled by Bloomberg. “The legal matter is too complex to expect bonds to recover,” Kiguel said in a telephone interview yesterday from Buenos Aires. “We may have legal problems, but Argentina has the willingness and ability to pay in dollars. Argentina needs to resolve the holdout issue.” Alfredo Scoccimarro, a presidential spokesman, didn’t return a telephone call seeking comment. ‘Legal Risk’ Concern over the implications of the court ruling for holders of securities issued under international law led Alejandro Urbina, who manages and advises on about $800 million of emerging-market assets at Silva Capital Management in Chicago, to sell Argentine bonds. “The New York ruling introduces legal risk unlike we’d seen before,” Urbina, who owns local Argentine dollar bonds and inflation-linked debt, said. “We cut our position in half.” Argentine bonds have now lost 4.71 percent in 2012 versus an average return of 16.46 percent in emerging markets tracked by JPMorgan Chase & Co.’s EMBI Global index. That’s the worst return among countries that haven’t defaulted on their debt. Last month, the appeals court upheld orders issued by U.S. District Court Judge Thomas Griesa in Manhattan and sent the case back to him to clarify how a payment formula he set is intended to work, including how the orders apply to intermediary banks and other third parties. Singer Letter Fernandez, 59, reiterated on Nov. 1 her willingness to make dollar-denominated bond payments on non-defaulted debt, saying that “vulture funds are orchestrating a campaign against Argentina.” NML Capital Fund, a unit of Singer’s New York-based Elliott Management, sent a letter to Griesa on Nov. 6 asking for an expedited decision, citing public statements by Fernandez and members of her cabinet that they don’t intend to settle. The legal battle in U.S. courts comes as Fernandez’s approval rating remains below 30 percent at home. Argentines will take to the streets today to voice their discontent with her policies in a protest that Buenos Aires polling companies Management & Fit and Carlos Fara & Asociados predict will be the largest since a three-month farm standoff in 2008. Fernandez’s popularity has fallen by more than half since she was re-elected by a landslide in October 2011, according to Management & Fit. Her approval rating fell in October to 28 percent, the poll published Nov. 4 showed, from 63.3 percent when she won a second term by 54 percent of the votes in October 2011. The survey showed a 3 percentage point recovery from a 24.3 percent in September. ‘Massive Protest’ “It’s going to be a massive protest,” Mariel Fornoni, director of Management & Fit, said in a telephone interview from Buenos Aires. Inflation and restrictions for Argentines to buy foreign currency are among the main concerns of the protesters, she said. Private economists estimate inflation is running at more than 20 percent, while the economy is stagnating. During the second quarter, the economy failed to expand for the first time in three years. The bond selloff since the court ruling is attracting some investors, according to Emilio Garcia, a bond trader at BancTrust & Co. in Caracas, who said he bought small blocks of Argentine bonds due in 2017 for clients when they bottomed out at 76 cents on the dollar. He said that he sold a few days later when a rebound lifted them as high as 81 cents. “There were some buyers who thought it was a good time to get in,” Garcia said. “The bonds were attractive to those with a strong stomach.” Yield Spread The extra yield investors demand to hold Argentine government dollar bonds instead of U.S. Treasuries narrowed 17 basis points, or 0.17 percentage point, to 1,132 basis points at 7:55 a.m. in Buenos Aires, according to JPMorgan. The peso was little changed at 4.77 per dollar yesterday. The cost to insure Argentine debt against default has soared 791 basis points since the court ruling, according to data compiled by Bloomberg. It rose 19 basis points yesterday. One basis point equals $1,000 annually on a contract protecting $10 million of debt. The credit-default swaps imply a 71 percent probability Argentina will default in five years, based on the assumption investors will recover 25 percent of the par value of the bond. The surge in default risk following the appeals court ruling reflects investor concern that Fernandez would opt to renege on overseas bond payments instead of paying holdout creditors, according to Joe Kogan, head of emerging-market debt strategy at Scotia Capital in New York. Defaulting on foreign investors wouldn’t have as big of an impact at home, he said. “Do Argentines in general care whether institutional investors in New York are paid?” Kogan said in a telephone interview. “Probably not. This is a very big deal for foreign investors, less so for locals