Gesamtzahl der Seitenaufrufe

Donnerstag, 30. Mai 2013

Reserves fall US$152 million from Global 17 payment // Ecuador is planning to emit sovereign debt, perhaps before the end of the year or in the first quarter of 2014, which would be its return to the international bond markets five years after it did not honor the payment of US$3.2 billion despite having the resources.

Ambito Financiero
Reserves fall US$152 million from Global 17 payment 
Thursday, May 30, 2013
by: Pablo Wende
From a new debt maturity, the reserves fell yesterday another US$152 million and ended up at US$38.557 billion, the lowest level of 2013 and in reality the lowest registered since April 2007.  It was not just another payment, as it corresponded to interest on the Global 2017, one of the warrants emitted under New York legislation and that is found in the middle of the litigation between vulture funds and Argentina.
Most of those dollars went abroad and didn’t have problems in their distribution.  In December is the next interest payment, whose form of payment will depend on what the Court of Appeals in New York determines.  It is estimated that at some point in June the court will rule.  The next bond payments under foreign legislation correspond to the Par and Discount, which pay interest on June 30.  In case the ruling is contrary or that it limits the role of Bank of New York Mellon as pay agent, these obligations would enter into a zone of risk.
With the new decrease registered yesterday, the stock of BCRA reserves accumulated a drop of US$4.733 billion for 2013 and is approaching a breach of US$5 billion, practically US$1 billion per month.  The horizon is not very encouraging and all indications are that the negative trend will continue.  In September, for example, the monetary entity will have to face the biggest payment of the year for US$2 billion, corresponding to the amortization of capital and interest of the Bonar VII.  “If we hadn’t been paying debt since 2010, the reserves now would be above US$70 billion,” the explain on the economic team.
Ambito Financiero
Even Ecuador will go back to placing debt this year
Thursday, May 30, 2013
(Reuters) New York - Ecuador is planning to emit sovereign debt, perhaps before the end of the year or in the first quarter of 2014, which would be its return to the international bond markets five years after it did not honor the payment of US$3.2 billion despite having the resources.
"Yes, we are working on that.  We don’t exactly know in what month, but it could be even at the end of the year or the first quarter of 2013.  Certainly, we have found great appetite for sovereign bonds,” said Ecuador’s ambassador in the United States, Nathalie Cely. "There are a couple of investment banks that have visited me in Washington to talk about that and to let me know that they are awaiting our bond initiative,” Cely said in a meeting with investors in New York.  Cely said that the bonds will be denominated in dollars.  She added that the details of the emission are not yet resolved, but she said that many banks have communicated with the government and that she is in direct contact with Credit Suisse on the issue.
The decision by Rafael Correa in December 2008 to not make payments on Ecuador’s sovereign debt denominated in dollars marked the second time in a decade in which the country didn’t honor its creditors.  On the occasion, the president said that the creditors were “monstrous” and that the debt emitted by previous governments contained “illegalities”.  Since the 2008 default, the financing by the OPEC member has depended on credits from China and other multilateral lenders.

mein neustes Blo.....

Mittwoch, 29. Mai 2013

Many speculate that Argentina may simply find a way to pay exchange bondholders outside the US, without a dime going to the holdouts. // "If Argentina doesn't pay, nobody wins," said Anna Gelpern, a law professor at American University who has written extensively about the case.

Creditors take Argentina to US court

Last updated 16:56 29/05/2013
Argentina debt
WELCOME BACK: President Cristina Fernandez de Kirchner, flanked by cabinet members, at the arrival of Argentine navy ship ARA Libertad.
Argentina debt
BILLION-DOLLAR ISSUE: Argentina's Economy Minister Hernan Lorenzino leaves the US Appeals Court in February.


Creditors take Argentina to US courtAussie dollar takes steep diveSigns of strength in US economyMurdoch aims to defy naysayersAlarm over European unemploymentCyber exchange accused of money launderingGE bets big on fracking returnsDrugmaker to buy Bausch & Lomb for US$8.7bTrailblazing electric car company to close87-year-old woman loses case to Donald Trump
Collection agencies profit by buying up old debt, chasing borrowers for payment and, when all else fails, using the courts to recover as much as they can.
It's a business model polished and perfected over decades of litigation. But what if the deadbeat is a sovereign nation of 40 million people whose fiery president has sworn never to pay?
That question now faces the US 2nd Circuit Court of Appeals in New York, which has become an unlikely referee in a high-stakes grudge match pitting Wall Street investors against Argentina. At its heart, the case tests the power of US courts to force other countries to honour their debts.
The outcome could hinder the ability of other struggling nations - including Greece and Cyprus - to renegotiate their commitments, potentially saddling them with crushing obligations they can't escape.
In the buttoned-down world of international finance, the proceedings have been nothing short of a barnburner.
Each side has hired celebrity lawyers, traded insults and engaged in some bare-knuckle tactics, including the attempted seizure of an Argentine naval frigate by bondholders.
Now years of squabbling may be reaching a boiling point: A crucial ruling is expected as early as this week.
"The implications are huge," economist and Nobel laureate Joseph E Stiglitz said.
"This court is balancing the interests of very small groups of creditors against those of entire countries."
Though little-known in the US, the case is a cause celebre in Argentina, where the long battle has taken an economic toll on the nation.
At issue is nearly US$100 billion ($124 billion) in debt on which Argentina defaulted in early 2002 after a prolonged recession and a currency crisis.
It was the largest sovereign default in history. The nation eventually was able to restructure more than 92 percent of that debt by persuading investors to exchange old bonds for new ones worth about two-thirds less.
Bolstered by an economic boom in recent years, Argentina has kept current on the new obligations to what are called the exchange bondholders.
But much of the remaining debt was snapped up at a discount by bargain-hunting investors, who took Argentina to court and demanded full value.
Leading the charge was New York hedge fund Elliott Associates, which has found a lucrative niche forcing debtor nations through litigation to pay up.
The firm has won huge judgments against Peru, the Republic of the Congo and other poor countries. In the developing world, such investors are dubbed vulture funds.
Elliott says Argentina is a bad actor with enough cash to fork over the roughly US$1.4b it owes the fund and several other plaintiffs.
Elliott has made numerous attempts to help collect the debt by seizing Argentine assets, most notably a 340-foot ship, Libertad, held at port in Ghana for two months last year.
But Argentina proved a tenacious foe. Through a United Nations tribunal, it persuaded Ghana to release the ship.
Still, the close call prompted President Cristina Fernandez de Kirchner to travel in a rented jet, leaving her presidential plane out of Elliott's reach.
Frustrated after half a decade of litigation, Elliott and other holdouts tried a novel legal strategy. They argued that under a provision of its debt contracts, Argentina could no longer make payments to the bondholders who had settled unless it also paid the holdouts.
US District Judge Thomas Griesa agreed. In November, the appeals court upheld the ruling and is now considering how to force payment and how much the holdouts should receive.
Experts said the court could oblige Argentina to pay in full, match the deal it gave the exchange bondholders or offer something in between.
The appellate judges also are weighing whether to uphold an injunction Griesa put on Argentina's bank, Bank of New York Mellon, that bars it from paying exchange bondholders unless holdouts also are paid.
If that's upheld, Argentina will be required to fork over something or be held in contempt.
The case is "an important test of the rule of law," said plaintiffs' lawyer Ted Olson, best known for representing George W Bush in the legal challenge to the Florida vote in the 2000 election.
"Argentina believes that, no matter what its contracts say, no matter that it has more than enough to pay all of its obligations, it can simply dictate terms to its creditors," said Olson, who became US solicitor general under Bush.
Fernandez de Kirchner has blasted the rulings, mocked the judges and called the holdouts pirates who have no respect for sovereign rights.
She noted that a 2005 Argentine law prohibits giving holdouts a better deal than those who settled.
That has the exchange bondholders nervous that Argentina might elect to pay nobody rather than making the holdouts whole.
They have hired high-powered litigator David Boies, who was Al Gore's counsel in the 2000 Bush vs Gore case.
Global anti-poverty groups are also worried. They fear that if the court allows the holdouts to get more than the exchange bondholders, it will create a powerful incentive for bondholders to refuse to negotiate when the next sovereign default arises.
That could make it hard for nations facing economic crises to escape crushing debt loads, said Eric LeCompte, executive director of Jubilee USA, an anti-poverty group that advocates sovereign debt cancellation.
Unable to restructure debt, these countries would be required to use money otherwise dedicated for social services, education or public health to pay bondholders.
"Any precedent set here goes way beyond Argentina," said LeCompte, noting that lawsuits mimicking Elliott's tactic have been filed against other countries in recent months.
"This will likely have the most far-reaching impact on global poverty of any ruling in our lifetime."
That opinion is shared by some influential observers, including the US Justice Department.
It filed a brief arguing that the ruling "threatens core US policy regarding international debt restructuring".
Others contend that a more worrisome precedent could be set if the court doesn't force Argentina to pay the holdouts. That could damage the US legal system's credibility and embolden other nations to short change investors, said Hans Humes, head of hedge fund Greylock Capital Management and former co-chair of an Argentine creditors committee.
"This is really a worst-case scenario," he said.
Many speculate that Argentina may simply find a way to pay exchange bondholders outside the US, without a dime going to the holdouts. While critics of hedge funds might like to see Elliott thwarted, legal scholars say it's a slippery slope.
"If Argentina doesn't pay, nobody wins," said Anna Gelpern, a law professor at American University who has written extensively about the case.
In Argentina, Libertad's return to port was celebrated as a victory, and "buitre," or vulture, has entered the popular lexicon.
But the nation is hurting from the battle. Cut off from international credit markets, Argentina has become financial pariah - unable to borrow and forced to print pesos, fuelling inflation.
Desperate for US dollars it needs for trade and other obligations, the government has put strict limits on residents' purchases of foreign currency. That has created a black market in which the dollar's street price is now nearly double the official rate.
To fight inflation, many Argentines travel to neighboring Uruguay to take out dollar advances from ATMs on credit cards, while others have been buying the digital currency Bitcoin.
"It's all connected to the unresolved debt problem," said Matias Tombolini, an economist at the University of Buenos Aires. "The public is suffering from something it cannot control."
No matter the outcome of the appeal, a petition to the Supreme Court is likely.
Many believe the case has helped focus attention on the shortcomings of the international sovereign debt system.
"We've created a totally dysfunctional sovereign debt market," Stiglitz said.
"Whether or not you like what Argentina has done, this is a question of equity."
- LA Times/MCT

they sent the warships, which bombarded and blockaded the country until a settlement was reached.

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November 27, 2012 7:47 pm

Markets: An unforgiven debt

A US ruling against Argentina could switch initiative in bond markets back to creditors
A woman looks at old currency during the opening of the Foreign Debt Museum in Buenos Aires, Argentina©AP
When Cipriano Castro, a fearsomely mustachioed strongman from the Andes, seized power in Venezuela in 1899 and defaulted on the government’s foreign debts, the jilted European powers knew how to react: they sent the warships, which bombarded and blockaded the country until a settlement was reached.
The enforcement of creditor rights in sovereign debt restructurings has since become less violent. Gunboats gradually became an unacceptable way of collecting debts. For much of the past century, governments have largely been able to renege on their debts with a degree of impunity, albeit not without some pain.





Yet a decision last week by a New York court could swing the pendulum back towards creditors. Although the case may still end up in the US Supreme Court, the ruling potentially erodes the ability of countries to spurn creditors – and could embolden those hedge funds, known as vultures, that specialise in suing recalcitrant governments.
The case in question is a long-running legal battle between Argentina and several so-called vulture fundsthat refused to join the 93 per cent of creditors that agreed to the punitive restructuring that followed the country’s 2001 default. The US courts have ruled unexpectedly harshly against Argentina, rattling markets and throwing money managers, lawyers and analysts into a spasm of speculation.
“This has the potential to break the paradigm of the sovereign debt world,” says Hans Humes of Greylock Capital Management, a fund that specialises in emerging markets. Mr Humes co-chaired the committee of Argentina’s bondholders and sat on Greece’s creditor committee during its restructuring this year.
“Creditor rights have been methodically stripped away in recent years, but this may bring us back,” he says.
Elliott Associates, the main hedge fund plaintiff, is run by Paul Singer, the US billionaire, and has made extracting money from defaulting governments its calling card. Elliott won the Argentine case through an arguably novel interpretation of a Latin phrase: pari passu. It means “on equal footing” or “in equal step” and is a venerable legal clause in bonds and loans.
In corporate bankruptcies, pari passu creditors rank equally in the queue when companies are dissolved, the assets are sold and proceeds disbursed to lenders. Although countries do not go into bankruptcy, the clause has long featured in government bonds and loans even though lawyers disagree on the clause’s meaning and importance, says Mitu Gulati, a law professor at Duke University and former lawyer at Cleary Gottlieb, Argentina’s counsel.

Argentina’s long-festering wound

Argentina has struggled to manage its money throughout its two centuries as an independent nation – and was once so hard-up it tried to swap the Falkland Islands for its debt, writes Jude Webber.
It received its first loan, from Britain, in 1824 but had defaulted by 1890. In 1949 it declared itself debt-free and was even a creditor to Italy, Finland, Belgium and Romania, which had been devastated by war. But by 2001 it had racked up the world’s biggest sovereign default by halting payment on nearly $100bn of foreign debt.
To continue reading, click here
Elliott and Aurelius Capital, its co-plaintiff, founded by a former Elliott trader, successfully argued that the pari passu clause in their defaulted bonds meant that Argentina could not continue to ignore them while paying the holders of its restructured debt.
But District Court Judge Thomas Griesa went further than just finding in favour of the hedge funds. Lawyers say he broke new ground in how widely the clause can be interpreted, and how far creditors can go in seeking redress from defaulting countries.
Lenders can win legal cases against countries, but winning compensation is trickier. Most overseas government assets are protected by sovereign immunity. Vultures typically try to create such legal bother that countries eventually pay them to go away.
But this so-called holdout strategy depends on extreme patience and deep pockets. Argentina, for example, has largely been able to thumb its nose at creditors for almost a decade. Elliott has proved a dogged adversary and even seized an Argentine navy training ship in October after it docked in Ghana. But despite this forceful demonstration of willpower, Elliot has so far failed to extract a single peso from Buenos Aires.
By contrast, Judge Griesa has backed up the bark of his ruling with a sharp bite that may bolster the hedge funds in their showdown with Argentina. The injunction prohibited third parties from “aiding and abetting” any violation of his order.
This was primarily aimed at Bank of New York Mellon, the conduit of Argentina’s payments to the holders of its restructured debts. Unless the appeals court intervenes, Argentina must pay Elliott and the other plaintiffs more than $1.3bn by December 15, BNY Mellon will breach the injunction if it transfers regular payments to Argentina’s lenders due on the same date.
BNY Mellon is unlikely to defy the court, so this essentially means that unless Argentina pays the vulture funds it could default on its international debts once more. Lawyers say that Judge Griesa’s legal dragnet leaves little room for escape, though Argentina and holders of restructured bonds have filed emergency appeals. It also applies to parties in the payments system – the economy’s circulatory system – including overseas clearing houses such as Euroclear.
This has far-reaching implications, says Anna Gelpern, a law professor at American University and Georgetown, previously of the US Treasury and Cleary Gottlieb.
“Grabbing a ship in Ghana is serious, but still a serious nuisance. In contrast, the ability of holdouts to seize money in the payments system is of systemic importance,” Ms Gelpern says. “Gunboats could target individual countries but targeting the payments system is an entirely different kettle of fish.”
In a similar case in 2004, the New York Federal Reserve argued that the vulture funds’ methods represented “terrorism of payments and settlement systems”. Euroclear says it is monitoring the case “closely” but does “not intend to breach this US court order”.
Argentina’s restructured bondholders have reacted with fury, and have hired David Boies, the celebrated litigator who represented Al Gore in the Supreme Court case that decided the 2000 presidential election. In an odd twist, Elliott’s lawyer is Ted Olson, the former US solicitor general who represented George W. Bush.
In the motion to avert the injunction, the bondholders’ lawyers attacked Judge Griesa’s “level of rancour” against Argentina and argued that it could damage foreign relations.
. . .
Other powerful actors could also intervene. Whitney Debevoise, a partner at Arnold & Porter and the former US executive director of the World Bank, argues that the court’s interpretation of pari passu could lead to challenges of the protected status multinational organisations such as the World Bank and the International Monetary Fund enjoy in debt restructurings.
This “seniority” is a longstanding custom that has never been tested. Indeed, even Elliott stated that “commercial creditors never were nor could be on equal footing with the multinational organisations”.
Thomas Laryea, a partner at SNR Denton, the law firm, and former assistant general counsel at the IMF, argues that the official sector’s protection is unharmed by the pari passu argument, and says “the court did a job of avoiding a hot potato”.
Despite the uproar the court case has already caused, many experts caution that the impact could still prove to be limited outside legal academia. They point out several factors that limit its usefulness as a precedent.
The wording of pari passu clauses vary from contract to contract. Argentina’s bonds implied a promise of equal payment, not just equal ranking. This was clearly violated by Argentina’s so-called lock law that in effect prohibits payments to holdouts. Although the courts did not base their rulings on the law, it made a breach much more obvious. Lawyers say other pari passu clause cases may be harder to argue.
Argentina’s obstinacy also makes it an outlier in the history of sovereign restructurings. Most countries quickly – or eventually – pay off holdouts, and restructurings go relatively smoothly despite the presence of vultures, says Charles Blitzer, a former IMF official. Greece, for example, restructured its larger local debts but has chosen to pay international law bonds in full to avoid costly and destabilising suits.
Argentina, on the other hand, boasts a debt museum in Buenos Aires that charts its chequered history of defaults and a board game called Eternal Debt in which players are asked: “Can you beat the IMF?”
The US courts have also argued that the broad interpretation of pari passu will not thwart future sovereign restructurings, pointing out that since 2005 the vast majority of New York law bonds have included collective action clauses. These allow a certain majority of bondholders to force holdouts to sign up to an agreed settlement.
Most of all, the Argentine saga has further to run. The appeals court still has to approve whether third parties and bondholders’ payments can be forcibly enlisted by Judge Griesa to put pressure on Argentina.
Argentina has vowed to appeal all the way to the US Supreme Court if necessary. The highest court normally does not hear contract interpretation cases of this kind but could do so if it thinks the ruling could have a systemic impact on the payments system and the international bond market.
Most sovereign law and restructuring experts agree that the case will inevitably have repercussions.
Collective action clauses, for example, are no panacea because they largely apply only to individual bonds, not a country’s overall debt burden. Hedge funds can still play holdout by gaining a blocking minority in one bond, making a restructuring of that instrument impossible.
. . .
Anne Krueger, a former senior official at the IMF and chief economist at the World Bank, now a professor of economics at Johns Hopkins University, argues that the case “clearly represents an erosion of sovereign immunity” that will embolden vulture funds in the future.
“Unless the Griesa ruling is overturned, this will open up a can of worms that will have to be dealt with,” she warns. “I don’t think it will be a revolution, as enough people have an interest in preserving the status quo. But it will have an impact.”
This may not necessarily be a negative development. Countries will still hold most of the aces in restructurings. The IMF has tallied more than 600 sovereign restructurings in 95 countries between 1950 and 2010. Giving creditors at least one trump to play may on the margins encourage better behaviour.
Any government concerned by the case’s implications can modify or remove the pari passu clauses in future bonds or avoid the New York jurisdiction altogether – perhaps in favour of London, where courts could choose to disregard the US precedent.
A side-effect may be to encourage vulture funds. But in spite of the opprobrium being heaped on these investors, experts for the most part agree that the problems they cause are outweighed by the benefits they bring: Funds such as Elliott are the “bad cops” of sovereign bond markets. The threat of legal battles makes defaults less attractive and encourages countries to treat creditors slightly better when they do have to restructure.
“I wonder why other sovereigns don’t gang up on Argentina and say, ‘for God’s sake stop this, you’re ruining it for all of us,” says one experienced sovereign restructuring expert. “I’ve been doing sovereign restructurings for 30 years and countries have generally had it good. That could change now.”

Dienstag, 28. Mai 2013

Argentina in short....

Argentine Economy:

Reuters: “FINEWS-Argentina sells $550 mln in Treasury bills to state entities”

MercoPress: “Argentina’s industrial production up in April, but down
in four months of 2013”

Wall Street Journal: “Argentina's Stocks End Lower; 'Blue' Dollar Strengthens”

Economic Times: “Rating agencies alert to Argentina debt ruling,
souring economy”

DealBreaker: “Argentina Just Realized That One Of Its Default Holdouts
Owns A Factory In Buenos Aires”

Wall Street Journal: “Citibank Asks U.S. Court for Argentina
Bond-Payment Assurances”

Bloomberg: “Argentina Bond Judge Says He Can’t Rule on Citigroup Request (1)”

Argentine Politics/Corruption:

MercoPress: “Cascade of legal challenges to Cristina Fernandez Council
of Magistrates reform”

MercoPress: “Lawmakers accuse Cristina Fernandez before a federal
court of falsifying stats”

London Times: “Kirchner shakes up the soccer schedule but fails to
kick corruption claims into long grass”

MercoPress: “Program on Kirchnerite corruption exposure beats football
in Argentina”

MercoPress: “CFK calls for ‘empowerment of the people’ and another ten
years of Kirchnerism”

AP: “Huge crowd cheers Argentine leader's 10-year rule”

Buenos Aires Herald: “Challenges ahead after decade of growth”

Quartz: “The No. 1 problem with lists about women: Just because she’s
powerful doesn’t mean she deserves recognition”

Buenos Aires Herald: “A free press ensures a free society”

Buenos Aires Herald: “A decade of Human rights: no turning back”

Buenos Aires Herald: “'We don't want a divided Argentina,' Macri”

The Verge: “Google no longer able to pay Android developers in
Argentina, pulling apps on July 27th”


Bloomberg: “YPF Slumps as Ruling Portends Compensation: Buenos Aires Mover”

Bloomberg: “Argentina, Indonesia Hit With EU Tariffs on Biodiesel”

Fox Business (Reuters): “Argentina's YPF loses arbitration over natgas
exports to Brazil”

Wall Street Journal: “Argentina's YPF Loses International Ruling in
Gas-Exports Case”

Reuters: “UPDATE 1-Petrobras says it has rejected offers for Argentine assets”

Global Relations:

MercoPress: “Argentina and Brazil ‘fear’ a greater integration with
China, says Mujica”

MercoPress: ““The Malvinas are Argentine, but also Latinamerican” says
President Correa”

FINEWS-Argentina sells $550 mln in Treasury bills to state entities

Monday, May 27, 2013

Argentina said it sold two Treasury bills totaling about $550 million
to state entities in recent months, according to resolutions published
in the government's official gazette. The Treasury issued $382.7
million in two-year bills on Jan. 25, selling them directly to
state-owned Banco de la Nacion Argentina.

Argentina’s industrial production up in April, but down in four months of 2013

Monday, May 27, 2013

Compared with March, industrial output inched up 0.1% on a seasonally
adjusted basis, the INDEC national statistics institute said.

Argentina's economy, the third-biggest in Latin America, has slowed
sharply in the past year after booming during most of the last decade.
Analysts ascribe this to soft global demand, high inflation and the
negative impact of currency and trade controls on investment.

Wall Street Journal
Argentina's Stocks End Lower; 'Blue' Dollar Strengthens

Friday, May 24, 2013

By Taos Turner

BUENOS AIRES--Argentine stocks fared poorly Friday in light trading
while the black-market dollar continued to strengthen on media reports
that banks will further restrict the ability of customers to withdraw
cash while overseas.

The Merval index fell 1.34% to 3,509.72 in volume totaling ARS31.3
million ($5.9 million).

The power company Pampa Energia SA (PAM, PAMP.BA) led the declines,
sliding 3.4% to ARS1.14. It was followed by Petrobras Argentina SA
(PESA.BA, PZE), which fell 3% to ARS3.79.

Economic Times
Rating agencies alert to Argentina debt ruling, souring economy

Friday, May 24, 2013

Argentina's dismal credit ratings might get a boost if U.S. courts
rule in the country's favor in a long-running dispute with creditors
over a 2002 default, but souring economic conditions could hold the
ratings back, credit analysts said.

Argentina is still struggling with the fallout from its roughly $100
billion sovereign debt default 11 years ago. It has not tapped global
credit markets since then, mainly because of lawsuits by "holdout"
creditors who rejected debt swaps accepted by nearly 93 percent of
bondholders and sought full repayment.

Argentina Just Realized That One Of Its Default Holdouts Owns A
Factory In Buenos Aires

Friday, May 24, 2013

By Jon Shazar

So they raided it, as part of a totally non-retaliatory tax
investigation. So non-retaliatory, in fact, that the federal tax
agency felt it could casually mention in its press release that Ken
Dart is among the “vultures” using “judicial colonialism” to deprive
Argentina of its sovereignty without raising any suspicions at all.

Wall Street Journal
Citibank Asks U.S. Court for Argentina Bond-Payment Assurances

Friday, May 24, 2013

By Ken Parks

BUENOS AIRES--Citibank has asked a U.S. district court to confirm that
its Argentine banking unit isn't bound by a ruling that bars the
Argentine government from making payments on bonds it issued under New
York law.

Despite a previous ruling to that effect, Citibank is once more
seeking assurances that payments made on Argentine law bonds held in
custody at Citibank Argentina are beyond the reach of any restraining
order issued by the U.S. court.

Argentina Bond Judge Says He Can’t Rule on Citigroup Request (1)

Friday, May 24, 2013

By Bob Van Voris

The U.S. judge overseeing litigation over Argentine debt said he won’t
agree to Citigroup Inc. (C)’s request that he declare whether the bank
is affected by his order barring payments to holders of restructured
debt unless holders of defaulted bonds are also paid.

Citigroup this week asked U.S. District Judge Thomas Griesa in
Manhattan for a ruling clarifying decisions in a case against
Argentina led by Elliott Management Corp.’s NML Capital. Citigroup’s
Citibank unit, which said its Argentina branch is custodian for bonds
issued under that country’s laws that are to be paid within Argentina,
isn’t a party to the NML suit.

Cascade of legal challenges to Cristina Fernandez Council of Magistrates reform

Tuesday, May 28, 2013

The Council reform is one of several chapters of the controversial
‘judicial review’ which Cristina Fernandez is pushing through congress
with her operational majority.

“The way the members of the council are to be elected gives absolute
predominance to one political party and is contrary to the spirit of
the constitution” said Luis Maria Cabral, president of the Argentine
Magistrates association.

Lawmakers accuse Cristina Fernandez before a federal court of falsifying stats

Tuesday, May 28, 2013

In a press conference Alfonso Prat-Gay, Ricardo Gil Saavedra, Victoria
Donda and Humberto Tumini said that the report includes the crimes of
‘illicit association; misappropriation of public monies; defrauding
the government and a crime against the economic and financial order
for systematically falsifying Indec stats”.

“It’s impossible to lie with stats unless there is a specific illicit
association of government staff behind, among which is Moreno and
Cristina Fernandez” said Prat-Gay.

The London Times
Kirchner shakes up the soccer schedule but fails to kick corruption
claims into long grass

Tuesday, May 28, 2013

By James Hider

Authorities in Argentina switched the kick-off of the biggest Sunday
night football match to make sure that it clashed with a television
documentary setting out devastating corruption allegations against
President Fernández de Kirchner.

Even in football-mad Argentina, however, the gamble did not pay off.
More people tuned in to Jorge Lanata’s Journalism for All than watched
Boca Juniors versus River Plate, two of the country’s biggest teams.

The documentary series has been running for weeks, revealing a
coruscating critique of Mrs Kirchner, who was first elected in 2007
after the death of her husband Nestor, who had run the country since

On Saturday, Mrs Kirchner bussed in hundreds of thousands of
supporters to Buenos Aires for a rally to celebrate 10 years of
Kirchnerism, the left-wing update of Peronism. Her rule has tackled
human rights abuses and poverty and, initially at least, pulled the
country out of a disastrous economic crash.

But Mrs Kirchner has been plagued by accusations of corruption and an
increasingly authoritarian style of governance, while the economy is
in crisis again with spiralling inflation and limited access to
foreign credit.

In a wry nod to the deliberate scheduling clash, Mr Lanata, one of the
country’s leading investigative journalists, dressed in a football
strip to present his show, which accused an aide of the president of
carrying “bags of cash” this year from a vault in a former Kirchner
residence in their southern bastion of Santa Cruz. The cash was said
to have come from corrupt tenders for public works projects.

According to the film, the vault was hastily converted into a wine
cellar, but one of the labourers carrying out the removal of the
strong boxes took pictures with his mobile phone camera, fearing the
consequences of his involvement in the sensitive job. The worker also
filmed the farm house 40 miles away where the contents of the vaults
were said to have been transported.
The TV series runs on a channel owned by the Clarin media group, which
has been highly critical of Mrs Kirchner, who in turn is trying to
pass legislation to break up the powerful media conglomerate.

The documentaries have accused the Kirchners of using a series of
shell companies to funnel millions of dollars to foreign tax havens or
to their base in the south of the country. Mr Lanata said that the
subject of his latest programme, Lazaro Baez, had been a lowly bank
cashier a decade ago, yet now he controlled all the public works in
Santa Cruz province.

Mr Lanata said that, as Mrs Kirchner’s alleged bag man, Mr Baez had
amassed a fortune faster than Henry Ford, and now owned several large
farms, a fleet of Porsches and BMWs and a number of other properties.
Mr Baez has denied the claims as “nonsense”, and Mrs Kirchner’s
administration rejects allegations of corruption.

Mr Lanata says that in 2011, Mr Baez’s business recorded an income of
more than $254.3m from “mysterious” trust funds in Uruguay. However,
the investment, due to come from a Dutch registered company, was never
received, although a failure to record this kept the balance sheets
firmly in order.

With soaring inflation and Mrs Kirchner’s attempts to amend the
constitution to allow her to run for a third term, there have been
mass protests in recent months, with hundreds of thousands taking to
the streets and banging on cooking pots to vent their anger.

Officially, inflation is 10 per cent, but many analysts put the real
figure at closer to 30 per cent, and accuse the government of skewing
the data. The situation has become so dire that Mrs Kirchner has
frozen food prices and called on supporters to patrol supermarkets to
monitor any spikes.

She has also banned the sale of US dollars, driving Argentinians —
haunted by the memory of hyperinflation — across the border to Uruguay
to stock up on greenbacks as a hedge against their own unstable

Like her ideological fellow traveller Hugo Chávez, the late president
of Venezuela, Mrs Kirchner has become a deeply divisive figure,
beloved of the country’s poor but harshly criticised by the middle
classes and many economists.

“No one knows what will happen in Argentina,” said William Eid, an
economist in neighbouring Brazil. “Ever since the Second World War,
Argentinians have always chosen the worst governments. Now you see
Peru, Brazil, Chile and Colombia going in one direction, and Argentina
and Venezuela going in the other direction. I don’t know if they’ll
become the poorest countries in Latin America like that, if they are
so isolated.”