Debt Coverage:
Clarin: “Judge Griesa rules in favor of complaint from the vulture funds”
El Cronista: “Lorenzino builds an ‘anti-vulture’ team”
Buenos Aires Herald: “Scioli please ‘collaboration’ in fight against ‘vulture funds’”
The Wall Street Journal: “If Argentina can’t fight hedge fund buzzards, can Greece? U.S. court ruling favours holders of distressed debt, which bodes ill for countries trying to shed it”
Financial Times: “Poker with Judge Griesa, part two”
Financial Times: “Chronicle of a default foretold?”
Reuters: “Investors flee Argentine debt on default fears”
Bloomberg: “Segura: I’m Afraid Argentina Will Default” (Video)
Madison.com: “NY judge to Argentina: the court will be obeyed”
Financial Times: “Argentina bond case may change rules”
Financial Times: “Cristina’s long, hot summer”
Bloomberg: “Argentina Must Pay $1.33 Billion to Owners of Bonds”
Reuters: “Why we might soon see another Argentine default”
US News: “NY judge to Argentina: the court will be obeyed”
The Wall Street Journal: “U.S. Orders Argentina to Pay All Creditors”
Forecasting World Events: “All You Need to Know About Argentina’s Upcoming ‘Technical Default’”
Financial Times: “‘Reckless’ Argentina risks threat to growth”
Financial Times: “Argentina debt: it’s not just the ruling, it’s the attitude”
Reuters: “Argentina ruling puts pressure on BNY Mellon”
Financial Times: “Ruling raises fear of Argentina default”
· Only Clarin was able to obtain Griesa’s ruling last night in time for its morning edition, but the word is out on radio and TV today in Argentina. The first reaction from the government has come this morning, with Agustin Rossi, the head of the FpV block in the House of Deputies, telling Radio FM Metro that the ruling “is absolutely reprehensible and repugnant on behalf of our government and the whole of the Argentine people, who have made an enormous effort to exit the default.”
Clarin
Judge Griesa rules in favor of complaint from the vulture funds
Thursday, November 22, 2012
By Ana Baron
On the eve of Thanksgiving Day, when nobody expected it, Judge Thomas Griesa ruled that Argentina must pay the holdouts, including the vulture funds, the total of what they are owed, which is to say US$1.33 billion, on December 15. It’s seen as a big reversal for the government of Cristina Fernández de Kirchner.
“In December 2012, there is an interest payment to the holders of restructured bonds for approximately US$3.14 billion. Presumably, Argentina intends to pay 100% of what is owed them. There are currently debts owed to the plaintiffs” (read vulture funds), said the New York judge.
It is seen as a total of US$1.33 billion. “It should be emphasized that these are debts currently owed, not debts spaced out over future periods of time. In order to comply with the terms of the Injunctions, Argentina must pay plaintiffs 100% of that $1.33 billion concurrently with or in advance of the payments on the restructured bonds”, says Griesa in his ruling.
The judge pronounced himself categorically against the US$1.33 billion being paid over time and rejected the arguments from the holders of restructured bonds that complained because they believe that since they accepted a haircut of 70% the fact that the vulture funds would now be paid 100% cannot be considered as “equal treatment”.
Griesa argues that when they entered the swap they were conscious of the fact that there were other bondholder sin default that had decided to reject it. “This is hardly an injustice,” says Griesa. “The holders of restructured bonds made their choice to not follow the same path as the plaintiffs followed,” he adds.
According to Griesa’s decision, Argentina will have to deposit the money for the vulture funds in an escrow account.
More still, Griesa said that Bank of New York and all the other institutions that tried to help Argentina make a payment to the holders of restructured bonds without also paying the vulture funds could be subject to legal action.
The court order that Griesa issued for Argentina to pay the vulture funds says that in the next three days, Argentina must provide a copy of it to all those that participated in the process of paying the holders of restructured bonds. “The Argentine Republic is permanently prohibited from taking actions that evade the directives of this order,” says the ruling.
Also, Griesa rejected Argentina’s request for the court orders to be suspended until such time as the appeals process has ended, which could reach the Supreme Court.
He explained that Argentina had threatened to not honor the court orders, recalling that national officials, including the President herself, said that they will not pay a single dollar to the vulture funds. This means that on December 15, Argentina has to deposit the money for the vulture funds, even if the Court of Appeals or the Supreme Court still hasn’t ruled on this issue at that time.
In this context, all indications are that the Argentine government will appeal this ruling, in an attempt to gain time with the debt maturities that are coming due.
A long tug of war
On March 3, 2005, then President Kirchner and Economy Minister Roberto Lavagna announced that the debt swap with bondholders was a success: 75% of the creditors accepted changing their warrants, giving up 65% of the value of those papers.
A group of investment funds that didn’t accept the agreement bought warrants and filed lawsuits.
NML, one of the most visible so-called “vulture funds”, made 11 complaints before New York Judge Thomas Griesa. In some cases, they obtained favorable rulings which were then reversed.
Trying to close the case, the government reopened the swap in 2009. And it achieved 92% acceptance.
On October 2, the Frigate Libertad was detained in Ghana by court order.
El Cronista
Lorenzino builds an ‘anti-vulture’ team
Thursday, November 22, 2012
By Carlos Arbia
The highest legal card to play for Argentina in its fight with the vulture funds is the so-called “right of certioriari.” It is a kind of extraordinary recourse that would take the Argentina government before the highest court in the U.S. in face of an adverse ruling in the Court of Appeals. This, according to experts, is the last chance left to avoid a “technical default” in case Judge Griesa upholds payment for the bondholders that didn’t enter the swaps of 2005 and 2010.
Economy Minister Hernán Lorenzino told his aids that this weekend they will have to work hard in the Palacio de Hacienda and maybe in a place close to La Plata as there are only five days until the decision from Griesa is known.
The “anti-vulture team” as they call it at Economy is made up of Finance Secretary Adrián Cosentino; Legal and Administrative Secretary Juan Manuel Prada; Assistant Legal and Administrative Secretary Matías Isasa and the Director of Public Credit, Francisco Egers. The latter was the official that signed the affidavit that was asked of the government from Judge Griesa. All of them are men in Lorenzino’s intimate confidence.
Buenos Aires Herald
Friday, November 23, 2012
Buenos Aires province governor Daniel Scioli rejected the recent ruling in favour of “holdout” bond investors by New York judge Thomas Griesa and called on other provincial governors, mayors and union leaders to “join in collaboration” in order to bring peace of mind to the population.
While visiting the city of San Miguel, Scioli assured that “in Argentina, it’s time for collaboration, not confrontation.”
“We have very complex situations to deal with, such as the President’s struggle with the ruling coming from the so-called vulture funds who speculated in our country and were not related to the economy, production and labour but to the financial gambling,” he said.
The Wall Street Journal
Friday, November 23, 2012
By Carl Mortished
While you were wondering what a Greek sovereign default might look like, an Argentinian one has been brewing in a New York court room. A U.S. District Court judge yesterday ordered that Argentina fully repay $1.3-billion to a group of hedge fund creditors which refused to accept debt restructurings that included savage haircuts. In so doing, the judge tossed a judicial grenade into the precarious matchstick palace that is Argentina’s public finances and sent the country’s bond yields soaring even above the level of Greece.
The ruling doesn’t seem to make practical sense. Without going into legal niceties, it appears to stem from the court’s loss of patience with Argentina, which is refusing to even consider the claims of the “hold-out bond investors,” whom President Cristina Fernandez de Kirchner has denounced as “vultures.” The court has ordered that Argentina must pay $1.3-billion, representing the capital and interest owed. The hedge fund creditors include NML, a fund run by Elliott Associates, a management company that specialises in distressed sovereign debt.
Financial Times
Friday, November 23, 2012
By Joseph Cotterill
Let’s say you took part in Argentina’s original, 2005 debt restructuring.
You exchanged your luckless bonds for securities worth around 30 cents of your original dollar. You took your lumps – and you checked, very carefully, the complicated payment structure designed to ensure the Republic can’t stiff you in the future.
That structure is complicated, and the size of Argentina’s default is massive, but the underlying standard operating procedure here is classic. Sovereigns default; they make their creditors a reduced, like-it-or-lump-it offer with a combination of carrots and sticks. Without being able to seize assets or litigate over unequal payment, most take the offer and life goes on. That’s how sovereign debt restructuring usually works. This stuff is just not neat bankruptcy law.
Financial Times
Friday, November 23, 2012
By Jude Webber
Is the ruling by Judge Thomas Griesa of New York a chronicle of a default foretold, to paraphrase the title of the novel by the magical realism master Gabriel García Márquez.
The tough order, rushed out in 48 hours after he received a slew of briefs, seems to leave Argentina little wiggle room – especially since there is no guarantee that the appeals the government is planning will be heard before the December 15 payment deadline.
Reuters
Friday, November 23, 2012
By Sujata Rao
(Reuters) - Fears of a looming default on Argentine bonds are sending all but the bravest investors to the exits after a U.S. judge ruled against the country's government in a decade-old dispute over sovereign debt.
Argentine spreads on JP Morgan's EMBI Global sovereign bond index blew out 55 basis points on Thursday to yield 12 percentage points above underlying U.S. Treasuries, heading for a level hit last month that was the widest in three years.
Bloomberg
Friday, November 23, 2012
VIDEO
Thursday, November 22, 2012
Argentina has finally run out of wiggle room in a billion-dollar showdown over foreign debts unpaid since the country's world-record default a decade ago, and the stakes couldn't be higher for President Cristina Fernandez.
A U.S. federal judge in New York late Wednesday ordered Argentina to pay immediately and in full everything it owes to what Fernandez calls "vulture funds" that she blames for much of her country's troubles. That adds up to $1.3 billion, due by Dec. 15.
Financial Times
Thursday, November 22, 2012
By James Mackintosh
Contract law and sovereign debt never sat well together, as states cannot be wound up. A US court this week may have broken the informal structures developed for state insolvency.
Argentina has been the subject of a classic legal battle. US hedge fund Elliott Associates, run by Arsenal fan and billionaire Paul Singer, hoovered up Argentine bonds on the cheap after the country hit crisis and defaulted on its debts in 2001.
Financial Times
Thursday, November 22, 2012
By John Paul Rathbone
For now, Buenos Aires is basking in the balmy mid-20s. But it’s not just because the southern hemisphere summer is coming that the temperature is rising for President Cristina Fernández.
Overnight, a New York court ruling could force Argentina to default again on its debts. This week, the country suffered its first general strike in a decade. And earlier this month, tens of thousands of protesters banged pots and pans in front of the presidential palace. Currency restrictions, high inflation, falling growth, rising protests and Ms Fernandez’s uncompromising political style are leading many to wonder – especially outside the country – how much longer her government might last.
Bloomberg
Thursday, November 22, 2012
By Bob Van Voris, Katia Porzecanski and Daniel Cancel
Argentina’s bonds fell the most in a week and the cost to insure its debt against default surged after a U.S. court ruling ordered the South American country to pay $1.33 billion to holders of defaulted securities.
Argentina must pay so-called holdouts, led by a unit of billionaire hedge fund manager Paul Singer’s Elliott Management Corp., next month if it proceeds with scheduled payments of more than $3 billion to owners of its restructured bonds, according to a copy of the ruling by a U.S. judge obtained by Bloomberg News. District Judge Thomas Griesa in Manhattan ordered Argentina to pay the money into an escrow account while an appeals court considers his rulings in the case. The ruling couldn’t immediately be confirmed in online court records.
Reuters
Thursday, November 22, 2012
By Felix Salmon
Judge Thomas Griesa, of the Southern District court in Manhattan, is mad as hell, and he’s not going to take it any more. Yesterday he unleashed three different orders and declarations on Argentina, all of which might as well have been dictated to him by Elliott Associates, the plaintiff suing Argentina for some $1.3 billion.
You’ll remember that last month, the Second Circuit, upholding one of Griesa’s orders, asked Griesa to clarify a couple of matters before the order could be fully enforced. In April, after Griesa’s orders first came out, I said that they were “notable for their lack of legal reasoning”, and added that “Griesa is throwing his hands in the air, here, and basically punting the whole issue up to the appeals court.”
US News
Thursday, November 22, 2012
By Michael Warren
BUENOS AIRES, Argentina (AP) — Argentina has finally run out of wiggle room in a billion-dollar showdown over foreign debts unpaid since the country's world-record default a decade ago, and the stakes couldn't be higher for President Cristina Fernandez.
A U.S. federal judge in New York late Wednesday ordered Argentina to pay immediately and in full everything it owes to what Fernandez calls "vulture funds" that she blames for much of her country's troubles. That adds up to $1.3 billion, due by Dec. 15.
The Wall Street Journal
Thursday, November 22, 2012
By Ken Parks and David Luhnow
Argentina suffered a setback in its decadelong battle with creditors over the country's 2001 debt default as a U.S. judge ruled that the country has to swiftly pay creditors that never negotiated new terms for their debt alongside those that did, raising fears the South American country will refuse to pay.
U.S. District Judge Thomas Griesa late Wednesday barred the country from making a coming $3 billion payment to investors who own restructured bonds unless it also coughs up some $1.3 billion to be held for investors who never struck a deal and want full repayment.
The ruling was the worst possible outcome for Argentina, said Eugenio Bruno, an attorney at Argentine law firm Estudio Garrido, which represents several creditors that accepted the offers.
Forecasting World Events
Thursday, November 22, 2012
By Tyler Durden
Technically, a technical default may still be avoided, but it is now unlikely. As the following presentation from JPM's Vladimir Werning shows, the market has already decided what the "next most likely big picture step" will be.
Financial Times
Thursday, November 22, 2012
When Argentina’s interim president, Adolfo Rodríguez Saá, declared default on nearly $100bn on December 23, 2001, lawmakers gave him a standing ovation.
Few are cheering now at the very real fear of a new Argentine default 11 years later.
A ruling by New York judge Thomas Griesa, ordering that an upcoming payment to holders of the bonds Argentina issued in restructurings in 2005 and 2010 be accompanied by a $1.3bn payment to US funds suing to collect in full, raises the prospect of Buenos Aires choosing to pay no one, analysts and lawyers say.
Financial Times
Thursday, November 22, 2012
By Jude Webber
Argentina’s reaction to Thomas Griesa’s New York court ruling was probably enough to make the octogenarian judge choke on his Thanksgiving turkey.
It was expected that Argentina would promise to fight – but what is surely guaranteed to make the judge’s blood boil was the offended tone Argentina struck.
Reuters
Thursday, November 22, 2012
LONDON, Nov 22 (IFR) - Argentina is likely to default next month unless Bank of New York Mellon and other US payment agents are prepared to defy a court order and pay USD3bn to holders of the country's GDP warrants on December 15.
The odds have jumped after a New York judge set out on Wednesday evening how Argentina should comply with an earlier ruling that it must pay investors in its old defaulted bonds in full at the same time as paying holders of instruments that most investors took in 2005 and 2010 exchanges.
Financial Times
Thursday, November 22, 2012
By Robin Wigglesworth and Jude Webber
A US court has ordered Argentina to pay $1.3bn to hedge funds that refused to restructure its debts after the country’s 2001 default.
The ruling, issued late on Wednesday in New York, raises the spectre that Argentina will default once more on its debt. If the judgment is upheld it could have major implications for other sovereigns.
Clarin
Another reversal in Ghana: court rejects claim of lack of jurisdiction
Thursday, November 22, 2012
By Nathasha Niebieskikwait
The misadventures of the Frigate Libertad in Ghana were the focus yesterday for more annoyance in the government against the media for reporting information that it didn’t like or that isn’t clear. The episode in this opportunity came out of the rejection from a Ghana court of the request by Argentina for the African country to be declared as “out of jurisdiction” to judge the request for attachment of the teaching vessel that was made by the U.S. fund, NML.
The judge’s ruling was known in the morning and was sent out by the correspondent in Africa for Agence France Presse, who indicated that, as had not yet been reported in Argentina until that time, the government was planning on this other strategy, to get the frigate released, something that the judge rejected yesterday, the same judge who has kept it detained in the Port of Tema since October 2. According to AFP, to get Ghana to be declared as out of jurisdiction in this dispute, Argentina needed to have it declared a “conditional” defender in the case presented by NML. “It would be bad faith if this court guaranteed that application,” said Judge Richard Frimpong, then adding that in legal terms, Argentina is “unconditional” since the start and that will not be reversed.
At the same time, according to the statements from Foreign Minister Hector Timerman, yesterday afternoon, at the Casa Rosada, Frimpong did abstain from moving the Frigate to another place in the Port of Tema until this other problem is resolved, responding to an injunction presented by Argentina before the International Tribunal of the Law of the Sea.
This is due to the port authorities asking at the start of the month that Argentina move the ship from its central position that it occupies today in the port, to another location. They said that it was a disturbance and that Argentina hadn’t paid the enormous port costs that this position generated and that they were suffering losses.
Frimpong ruled in their favor, but Argentina appealed.
Timerman said that the court recognized yesterday that the Frigate cannot be moved while this other battle is being resolved, on December 6. He said that the delay is due to the request for the stay formulated for the parties before the Tribunal of the Sea. That “the parties abstain from taking any action to aggravate the controversy,” he said, when in reality it’s a basic rule in all injunctions.
Argentina and Ghana have marked Thursday and Friday of next week before the tribunal, located in Hamburg.
While the government has said that it will not pay NML any bail bond – the fund asks for US$20 million – experts say that this is the only option Argentina has to recover the ship. Others, that the release will have to be solicited before Judge Thomas Griesa in New York, where they started and have been battling the complaints of the vulture funds.
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