Perfil: “’To settle with the Paris Club facilitates credits for Vaca Muerta’” Clarin: “Economy wants funds and at a lower interest rate than YPF” La Nacion: “In Rome and Paris, Cristina seeks to recover the spotlight” Clarin: “The presidential campaign has moved to the United States”

Perfil

“To settle with the Paris Club facilitates credits for Vaca Muerta”

 

Sunday, March 16, 2014

 

By Paola Quain

 

The first formal meeting to start the negotiations between the Paris Club and Argentina over a debt estimated at US$10 billion, which was confirmed for May 26, could be the point of departure for the reopening of lines of credit that are closed off today for key areas like the energy sector.  

 

According to sources from the Economy Ministry, up to yesterday the formal invitation had not yet arrived for Minister Axel Kicillof and it was not officially confirmed that he will travel in the coming days to France, while they were still analyzing what would be the best strategy to follow.  

 

In January, Kicillof had proposed paying 20% of the debt in 12 months starting with the agreement and extending the payments out 15 years in installments or state bonds, an idea that was rejected.  Now, the technical staff are looking at a 20% cash payment on the debt within a year, while the creditors want it in less time.  

 

Even still, it is good news for the government, which is trying to open up a path in the foreign markets for obtaining financing.  

 

On the issue, former Finance secretary Guillermo Nielsen celebrated the progress.

—What are the expectations that this meeting is setting off?

—It’s very good news, the acceptance of sitting down and negotiating an agreement is something that will help Argentina a great deal.  One has to take note that this kind of negotiation, once it starts, has to be concluded.  This means that, beyond what could be an intermediate picture, what is certain is that they will continue until reaching an end.  For that reason, it’s very important to show up well prepared.

 

—What could be the most immediate effects that could come from reaching an agreement?

—I believe that the most important thing is that it will unblock other lines of credit that are of interest to our country, and that are closed off today, especially from the Ex-Im Bank, which we need from countries like Germany, the United States and other G-7 countries, through which we could access the necessary technology for the development of Vaca Muerta, and also in the area of rail systems.  

 

—What view do you have about the IMF warnings on Friday about Argentina’s delay in showing its data before the entity?

—I believe that the drama needs to be reduced around Article IV, which is about communicating the national economy figures to the multilateral credit organization.  It’s something that all the countries do, even France, and while they are criticized, they are a sovereign state.  

 

 

Clarin

Economy wants funds and at a lower interest rate than YPF

“The order is to place debt at one point less than YPF,” is the message to bankers these days.  They are betting on year’s end.

 

Sunday, March 16, 2014

 

Last week, the Finance Secretariat at the Economy Ministry received a group of foreign investors.  Also one of the biggest foreign banks that operates in the country.  Those who participated said that Secretary Pablo López was anxious to seduce the bankers.  He acknowledges that he has the go-ahead “from the top” for placing debt, where the goal is to put together the first operation in the last quarter of the year, and that it only has to comply with one rule: the interest rate has to be one point less than the 8.87% annual that YPF set in December 2013 when it placed US$500 million.

 

Investors heard the following definitions from Lopez and his advisers: “The economic team has the approval of Cristina Kirchner to place debt;” “The condition is that the rate has to be lower than YPF’s (8.87%);”  “The outline of the offer to the Paris Club was accepted by most of the member countries.”

 

At the Economy Ministry they are optimistic over the progress of the negotiations with the Paris Club. And they believe that the new rate of inflation will not only serve to put the relationship with the IMF back on track. It will also serve to start down the path of recovering credibility. "The economic team will seek a more active approach with the banks in the next meeting of the IMF," has a source who was in one of these meetings, in relation to the spring meeting of the IMF and World Bank that will take place in Washington in April.

 

But will there be enough time for the economic team to achieve results before the end of the year?

 

Two experts gave their opinion. One is former Finance Secretary Daniel Marx. "The worst performing countries today are Venezuela, Argentina and Ukraine. You must not make too much out of that lot.” Marx believes that Argentina will get good results from the meeting on May 26 in the Paris Club because once a date is fixed there is a pre-agreement.

 

"The country could be placing debt at around 8% by the end of the year.”

 

In turn, Eduardo Levy Yeyati, director of Elypsis and former economist for the Central Bank, believes that the economic team is underestimating the timing around this transaction. "It is not clear what their road map is in this respect and what would bring in fresh resources, except by postponing the possibility of a default.”

 

At Economy they minimized the rumors about a correction in subsidies in the coming months. And they won’t rule out the possibility of postponing it if economic activity shrinks in the second half of the year. Kicillof was opposed to revising service rates at the beginning of 2012 when, at that time, the economy entered into a six-month recession.

 

With the devaluation, the monetary contraction, and the resolution for the banks to dump their positions in dollars, Kicillof is betting on going out to the markets.

 

 

La Nacion

In Rome and Paris, Cristina seeks to recover the spotlight

After a long time she will make a trip that will link her to relief leaders, like the Pope and Hollande, and will have a positive agenda for the government

 

Sunday, March 16, 2014

 

By Mariana Verón  | LA NACION

 

After two complex months on the domestic front, President Cristina Kirchner will resume her international agenda this week with two high voltage political meetings: tomorrow with Pope Francis and Wednesday with French President François Hollande, two meetings that the government already celebrated in advance.

 

The invitation from the highest authority of the Church to the President will put her back on the world stage and only the predisposition by Francis to greet Cristina Kirchner triggered optimism in the Casa Rosada, where they believe that it will give them a week's respite from the more urgent unresolved issues such as inflation and the collective bargaining with teachers that is still not settled.

 

The President departed yesterday for Rome for the start of a tour that will take her out of the country for five days. In addition to her first stop at the Vatican and the meeting with Hollande, the head of State will have an appointment with businessmen that was set up against the clock to reactivate her return to the world after long months without foreign trips.

 

With a tiny delegation, the President will have her appointment with Francis, the third since he took office as the head of the church a year ago, tomorrow (Monday) at noon, for lunch one-on-one at Santa Marta.

 

With the relationship with the Church more relaxed since the obligatory trip made by Cristina Kirchner to get closer to the Pope, the meeting will seek to reinforce a bond that both have cultivated in private: while the Casa Rosada requested the meeting, the appointment ended up being set almost spontaneously when the President telephoned Francis to congratulate him on his year as Pope, and he invited her, taking advantage of her being in Europe this week. Everything erupted so quickly that the Argentine ambassador to the Holy See, Juan Pablo Cafiero, found out about the invitation once it came together.

 

"There is an affection and a new relationship both are taking care of," said an official from the Casa Rosada in the midst of the clear enthusiasm generated this week by the departure of the President for the Vatican.

 

Inside the government they say that the visit will give Cristina Kirchner a framework of "harmony" and "dialogue" in the new phase that she has decided to embark on, after her speech in the Legislative Assembly on March 1 showed her to be more open to the opposition and she even invited a group of lawmakers along on her last trip to Chile, last week, for the inauguration of Michele Bachelet.

 

The encounter with Francis will have an open agenda, but from the government they suppose that the dialogue could turn to the papal concern over drug trafficking, a problem that the Church has made a central theme in recent days.

 

This time the delegation will be excessively reduced. Foreign Minister Héctor Timerman, the Secretary of Religion, Guillermo Oliveri, and presidential spokesman, Alfredo Scoccimarro traveled in Tango 01. With access restrictions, the list of those going along was already handed over in advance, but, while the whole entourage will greet the Pope, only Cristina will have lunch with him.

 

The one that could also be added to the delegation is Guillermo Moreno, the former Secretary of domestic trade and today the attache at the embassy in Italy, who will reunite with the President after his departure from the government. The same Monday, after lunch, Cristina will go to Paris for the second stop on her tour. She will arrive relieved. The timing of her meeting with Hollande, on Wednesday, could not be more positive for the government: it will come just days after the Paris Club announced that it has accepted a start to negotiations by the debt that the Argentina has with the group of countries. While the issue will be part of the meeting, within the economic team they recognized that the decision announced on Friday cleared an open front for the President.

 

In parallel, while the President was leaving yesterday from Buenos Aires, in the French capital progress was being made on setting up meetings with businessmen, who was still unfinished, for Tuesday, the day off which is located in Paris.

 

With the intention of showing a new face to the markets and economic sectors after the progress in negotiating with the Paris Club and the payment to Repsol on the expropriation of YPF, Cristina will be seen with businessmen in search of investment. The trip will end with a cultural appointment: the President will speak Thursday during the opening of the Paris book fair, which this year has Argentina as guest country of honor.

 

The President’s agenda

Cristina Kirchner will meet with the Pope and François Hollande

 

MONDAY. The head of the state will lunch alone with Pope Francis. It will be their third meeting in Rome.

TUESDAY.  She will meet with businessmen after the announcement of the Paris Club, which agreed to negotiate the Argentine debt.

WEDNESDAY. Cristina Kirchner will meet with French President François Hollande.

THURSDAY. She will speak during the opening of the Paris Book Fair, which has the country as guest of honor.

 

 

Debt Coverage: Bloomberg: “Argentina Awaits Notice From Paris Club to Begin Formal Talks” Buenos Aires Herald: “IMF still supports country” Bloomberg: “Kerry Says State Department Won’t Back Argentina in Debt Case” MercoPress: “US will not side with Argentina in its dispute with hedge funds, says Kerry” Buenos Aires Herald: “Washington 'won't side with Argentina in court,' Kerry affirms on vulture funds dispute”

Bloomberg

Argentina Awaits Notice From Paris Club to Begin Formal Talks

Friday, March 14, 2014

By Pablo Gonzalez

The Argentine government is awaiting formal notice from the Paris Club of creditor nations to begin talks on final terms for the repayment of defaulted debt, Cabinet Chief Jorge Capitanich said.

“Once Argentina receives formal notice, talks on terms, conditions, payment methodology and other details, in order to reach an agreement that satisfies both parties, will start,” Capitanich told reporters today.

The club of 19 creditor nations nations accepted an offer from Argentina to pay debt in default since 2001 in installments, Buenos Aires-based newspaper BAE reported today, citing unidentified foreign diplomatic officials and Argentine government officials. Clotilde L’Angevin, Paris Club’s secretary-general and spokeswoman, declined to comment “at this stage” on the report.

Buenos Aires Herald

IMF still supports country

Friday, March 14, 2014

The International Monetary Fund (IMF) reiterated its support yesterday for the federal government in its lengthy legal battle with hedge funds, citing the impact a negative ruling in the US Supreme Court could have on other debt-restructuring processes. It came only a day after US Secretary of State John Kerry ruled out the Obama administration’s support of Argentina in the courts.

“The Fund is seriously concerned about the wide ranging consequences this judicial decision could have on debt restructuring processes,” Gerry Rice, IMF spokesman toldámbito.com yesterday, avoiding comment on Kerry’s statements.

Bloomberg

Kerry Says State Department Won’t Back Argentina in Debt Case

Thursday, March 13, 2014

By Katia Porzecanski and Greg Stohr

The U.S. State Department won’t side with Argentina in a legal fight with holders of $1.5 billion of the nation’s defaulted debt, Secretary of State John Kerry told lawmakers.

Asked at a House budget hearing yesterday whether the department would back Argentina, which is seeking a U.S. Supreme Court hearing, Kerry answered no. His comments didn’t preclude the possibility of a brief by the U.S. solicitor general, the Justice Department lawyer who makes the final decision on Supreme Court filings.

Argentina is seeking review of a lower-court order requiring the nation to pay holders of defaulted bonds in full if it makes payments on its restructured debt. Kerry said the U.S. has encouraged Argentina to find a resolution with creditors.

MercoPress

US will not side with Argentina in its dispute with hedge funds, says Kerry

Friday, March 14, 2014

During a brief to the US Congress and in reply to a question from Republican Representative Mario Díaz Balart, (hopefully no more 'amicus curiae'), Kerry said that Washington “urged Argentina to pay its public and private debtors”.

And “No, the answer is no. We are not going to”, the state secretary affirmed when we was asked whether Obama’s government would “side with Argentina in the court.”

Buenos Aires Herald

Washington 'won't side with Argentina in court,' Kerry affirms on vulture funds dispute

Thursday, March 13, 2014

The Barack Obama administration will not support Argentina in its long-standing dispute with vulture funds suing the South American country over its defaulted bonds more than a decade ago, US State Secretary John Kerry has warned. Still, the American official praised what he considered some “positive steps” by the Kirchnerite government.

During a brief to the US Congress, Kerry said that Washington “urged Argentina to pay its public and private debtors”. “No, the answer is no. We are not going to”, the state secretary affirmed when we was asked whether Obama’s government would “side with Argentina in the court.”

New York Times

Argentina’s Long and Winding Road (LTEs)

Friday, March 14, 2014

Regarding “Cry for me, Argentina” (Opinion, Feb. 28): After reading Roger Cohen’s ode to the self-destruction of Argentina, I had to run to my computer and perform a quick search. Was I dreaming? Wasn’t the United States deeply involved in Argentina’s political upheavals? Ah yes, here’s some $30 million in annual aid to the military dictators from the Ford and Reagan administrations. After the dictators fall, here’s the United States obstructing efforts to bring them to justice. And the “disappeared” of whom Mr. Cohen speaks with such reverence? The savagery they fell victim to was, according to documents released in 2002, backed by Secretary of State Henry Kissinger, and by many accounts actively supported by the C.I.A. To extend Mr. Cohen’s metaphor of the child who won’t grow up, it is oddly selective and misleading to omit the role of its abusive uncle, Uncle Sam.

Maia Ettinger, Guilford, Conn.

Mr. Cohen manages, in slightly more than 800 words, to reduce an entire country, its people and history into a caricature designed for easy consumption. He indulges in descriptions of Peronism that would each require 800 words to be properly defined. He makes the “Dirty War” into a quaint image of Argentine women sobbing uncontrollably. Even the headline turns Argentina into an antiquated symbol and an image of Madonna singing a pop song.

Marianela D’Aprile Knoxville, Tenn.

Clarin: “Vultures: Kerry did not rule out U.S. intervention in the case” El Cronista: “Kerry controversy: disagreements over its impact on the vulture fight” Telam: “The Department of State clarifies that the Solicitor General is the one that responds to the Supreme Court” Pagina/12: “The United States has not changed its position” El Cronista: “The American Task Force lashes out in the media” (ATFA Ad) BAE Negocios: “The Paris Club accepted the offer and in June the form of payment will be decided” Ambito Financiero: “IMF, concerned over the Argentina vs. vultures case”

Clarin

Vultures: Kerry did not rule out U.S. intervention in the case

He clarified that it will not be voluntary.  But it will happen in case the Supreme Court asks for it.  

Friday, March 14, 2014

By Ana Baron

Washington. Correspondent - The State Department yesterday did not rule out that the United States will intervene in the case of the vulture funds. A spokesman for American diplomacy explained to Clarin that what Secretary of State John Kerry meant to say the day before in Congress was that the U.S. will not voluntarily present an opinion over whether the Supreme Court should or should not take the case. But that doesn't mean the U.S. will not intervene if the Supreme Court asks for its opinion.

Nor does it mean that it will not intervene later, if the case is accepted, when the underlying question is discussed. Otherwise, as Clarin has been stating all along, whenever the Supreme Court requests the opinion of the Executive Branch, it is the Solicitor General who gives it to them. "If it is not invited to do so, the U.S. will not file an amicus brief on whether the Supreme Court should reverse the ruling of the Court of Appeals on the pari passu case," a State Department official said to Clarin. The official explained, however, that "when the Supreme Court asks for our opinions, the uniform practice is for the Solicitor General to submit a response.”  The big question is the eventual response.

"For more details, I would say call the Department of Justice".

During the hearing in Congress two days ago, Kerry showed that from the political point of view the Department of State is as hardline as the lawmakers that defend the position of the vulture funds. Kerry said that Argentina must resolve the problem of public creditors and private creditors (i.e. the vulture funds). And he will continue to press for it to happen.  In any case, if the Court calls on Solicitor General Donald Verrilli, the legal position will prevail. On two occasions in which he supported the Argentine position before the Appeals court, the Solicitor explained clearly that he didn’t support the government of Cristina Kirchner nor its untidiness. In fact, the U.S. expressed the same concern on two previous occasions that was expressed yesterday by the International Monetary Fund, about the impact that the case can have on future debt restructurings.

El Cronista

Kerry controversy: disagreements over its impact on the vulture fight

At the time of interpreting the statements of the Secretary of State, who rejected the idea of supporting the Argentine position, the most optimistic postures suggest that the legal process will continue unchanged.  But another line of argument suggests that without the support of the U.S. government, Argentina will have less of a chance that the American Supreme Court will take the case or even call on the Solicitor General.  This last option is important, because it will allow for stretching out the procedural timing until next year.  

Friday, March 14, 2014

By Maria Elena Candia

The statements made by Secretary of State John Kerry, at a budget hearing in which he rejected the possibility of the State Department of that country will support the Argentine position in the case it maintains against the vulture funds before U.S. Supreme Court, generated different interpretations among experts that were consulted.

The more optimistic posture argues that Kerry’s comments would have no impact on the legal process that is now in the hands of the High Court, while another view focuses on the political importance of the message that the Secretary of State sent.

According to this line of analysis, Kerry was affirming that the United States government will not make a filing of an "amicus curiae" on behalf of the Argentine government next week. And that is very bad news for Argentina, because the absence of American support would increase the chances that the Supreme Court will not take the case.

“On the basis of press reports, my interpretation is that Kerry said that United States will not make an amicus curiae filing next week urging the Supreme Court to grant the request for a review of the case. That is very significant. This greatly increases the chances that the Supreme Court will refuse to grant Argentina’s appeal, which means that there won’t be any kind of hearing before the Court,” said Richard Samp, Chief Adviser of the Washington Legal Foundation, in an interview with El Cronista.

While Kerry said the State Department would not file a brief in favor of Argentina, the reality is that his agency does not have the authority to do so on its own. The United States has a single voice, that of the Solicitor General. This is why, according to Samp, Kerry said that no sector of the government of the United States will submit an amicus curiae in support of Argentina. This was one of the weapons that the government of Cristina Kirchner had hoped to count on when the justices of the Court decide the case.

However, sources from the U.S. embassy assured that there was no change in the position of the United States on the debt issue.  The United States will not file an amicus curiae that is not solicited by the Supreme Court. In general, if the Court requests it, the Solicitor General presents his opinion.

In the near term, on March 24, other amicus curiae briefs will be filed in favor of Argentina and then the "vulture funds" will have 30 days to respond. From there, the Court will take its time to communicate if it will either take the case, reject it or ask the Solicitor General for his opinion. This option would significantly extend the final resolution of the case, which could take place in 2015.

"Political statements do not have a direct impact on the legal system if they are not filed,” said Marco Schnabl, a lawyer for Skadden. In fact, Schnabl finds it to be positive that the Court has accepted the Discovery case, to analyze the limits of the use of American law, which has a point of contact with the current pari passu case, although it is put forth in a different context.

Telam

The Department of State clarifies that the Solicitor General is the one that responds to the Supreme Court

Friday, March 14, 2014

The State Department said that if the Supreme Court asks for the position of the U.S. Government in the case in which Argentina is facing off against the vulture funds, "it is the practice" that the Solicitor General is the one who lays out the government’s position on the subject.

"We cannot speculate on hypotheticals, but when the Supreme Court invites us to give our views, it is the practice of the Solicitor General (of the state) to file a brief in response," explained a State Department source to Telam, thus denying rumors that circulated in various media that the United States will not support Argentina in its fight with the vulture funds.

The American foreign ministry held that what was said by the Secretary of State, John Kerry, in a presentation to the Congress during the day before, was that his country will not file an 'amicus brief' (friend of the Court) that is not requested, in the case of the pari passu clause, which is currently in the petition stage.

"The United States is not filing an unsolicited amicus" regarding whether the Supreme Court should or should not reverse "the decision of the Second Circuit on the obligations of Argentina to make payments to its bondholders in the so-called pari passu case," said the diplomatic source.

Kerry’s statements in the Capitol responded, therefore, to what is established by the Department of Justice, which states that "although the (U.S.) government may file an amicus suggesting that the Court grant or reject a review in a case, the Solicitor General does not usually file an amicus brief in the petition stage unless it is invited to do so by the Supreme Court,” according to the website of the American agency regarding the options which could come with different scenarios.

It is different when the case in question is at the written merits stage and the government can present an "amicus curiae" by its own decision, just as it did days ago in support of Argentina in the case known as "World Discovery."

The administration of Barack Obama, through Solicitor General Donald Varrilli, filed an amicus curiae brief in which he claimed to have "an interest in the correct interpretation and application of the U.S. law on sovereign immunity and the treatment of foreign States" in American courts.

Pagina/12

The United States has not changed its position

The American Secretary of State said that he will not file a brief before the Supreme Court in support of Argentina.  The Argentine government clarified that it never thought of the possibility of such a brief, nor did the statement change the known position of the Obama government.  

Friday, March 14, 2014

By Tomás Lukin

U.S. Secretary of State John Kerry said on Wednesday that the American government will not file a brief before the Supreme Court of that country, backing the Argentine position in the dispute with the vulture funds. The chances that the highest U.S. Court will accept review of the case and to rule on behalf of the Argentina are slim. From the economic team, they acknowledge that the filing of a brief from the Obama administration in line with the official position is a relevant element for reaching that goal. As has already happened in previous instances, "it's practically impossible", they say at the Palacio de Hacienda, that the U.S. will spontaneously file an amicus curiae brief in favor of the country.  For that, beyond the taxing and surprising statements by the diplomat, made during the defense of his department’s budget for 2015, those in the government are not ruling out that the Supreme Court will as the U.S. authorities for their opinion. If that happens, the Department of Justice - not Kerry’s department - is the one in charge of responding through Solicitor General Donald Verrilli. In fact, it happened last week in the satellite case where the vultures are seeking information attach Argentine assets abroad.

Today is the deadline for those wishing to submit an amicus curiae spontaneously before the Supreme Court, although the information will only be made available next week. As it occurred before the Appeals court, it is expected that France will endorse the Argentine position and it cannot be ruled out that other countries will file their own. One of the possible supportive briefs could come from the Government of Mexico. The existence weighty filings increases the chances that the Supreme Court will request the opinion of the United States. But not only are countries presenting amicus curiae briefs. Another possible backing could come from  the IMF, which had already made public its intention to back up Argentina’s position at the appellate stage, although it did not end up filing one. "The Fund is seriously concerned by the widespread systemic implications that could come from a decision by the Court on debt restructuring processes in general," Gerry Rice, the IMF spokesman, responded when asked about Kerry’s statements, although he avoided speaking about a possible amicus curiae from the Fund.

The statements by the U.S. Secretary of State were binding; but diplomatic sources consulted by Pagina/12 said that, for the moment, they did not reveal a change of view by the Obama administration, which already filed two amicus curiae briefs at the request of the Court in the past three months. An important element that was set aside by the statements of the American Secretary of State is the context in which they were made. The official ruled out that his department will support the Argentine position during a hearing of the House Appropriations Committee.

During that meeting with House members, Kerry had to defend his department’s 2015 budget before a Subcommittee where the Republicans are the majority. With Ukraine as a central theme (in its geopolitical dispute with Russia, the Obama administration aims to provide that country with $ 1 billion in credits) the official answered legislators’ questions for two hours. "I want to bring the discussion a little closer to our continent," said Mario Diaz-Balart, asking Kerry about what the Florida congressman considered to be human rights violations in Cuba and Venezuela, as well as the dispute between Argentina and the vulture funds. Before asking about the position of the State Department in the case, the anti-Castro and anti-Chávez Diaz-Balart accused the government of working with "Iran to erase its responsibility in the attack" on the AMIA. "If requested by the courts, will the Department of State again present an amicus curiae, supporting the Argentine position?", asked the Republican legislator. "I can answer that very fast: it will not do so. That is clear," Kerry retorted. In addition, the official emphasized the "pressure" from their country for "Argentina to pay its debt with private creditors and the government of the United States.” In that regard, he recalled the payment agreement through bonds that put an end to ICSID cases with American companies and pondered the "new price index to deal with deficiencies and requirements from the IMF.”

El Cronista

The American Task Force lashes out in the media

Friday, March 14, 2014

In recent days, American Task Force Argentina (ATFA), one of the main political pressure groups of holdouts, resumed its ad campaigns in major American media, like the Wall Street Journal and the Washington Post, that sent blunt messages to politicians in Washington D.C., about their position on Argentina in the U.S. courts.

The ad points out that Argentina's lawyer, Jonathan Blackman, said to a U.S. judge that the country will not obey the American judiciary should it rule that the country must pay its creditors. The ads appear both in print and online, with a link that shows how Blackman told the judge of the Court of Appeals that he will not voluntarily obey a court order.

According to a press release ATFA issued this week, eight US lawmakers wrote a letter requesting that the United States government urge Argentina to honor judicial decisions and their financial obligations with U.S. creditors.

"The Congressmen urged the Treasury Department to prioritize the issue of Argentina’s mistreatment of U.S. investors and the judicial process in the American courts," the organization’s press release said.

BAE Negocios

The Paris Club accepted the offer and in June the form of payment will be decided

Friday, March 14, 2014

by Alejandro Bercovich

And the day has finally come. On Tuesday morning, in a private meeting without publicly announcing its decision, the Secretariat of the Paris Club formally approved the beginning of negotiations with Argentina over the debt in default since 2001. According to what BAE Negocios confirmed through foreign diplomatic sources and local officials, the rich creditor countries have set May 26 as the date to begin to define the terms of payment of more than US$ 9 billion owed to them, including principal and late interest. In principle, they agreed that the payment be made in installments and conditioning that the agreement bring fresh dollars in to the Central Bank reserves. The news came hours before President Cristina Kirchner travels to the French capital, invited by her counterpart Françoise Hollande, but the topic is not part of her official agenda.

The information has circulated since Tuesday with absolute secrecy on the economic team and with a handful of embassies from the major creditor countries, where they are closely following the final stretch of negotiations, as subsidized banks and development agencies appropriations are awaiting to be unblocked so that the multinationals headquartered in those countries will invest in Argentina. For the government, the goal is to comply with the specifications which were set by the major Wall Street banks to resume issuing debt at rates that are reasonable for the Argentine government, which included cleaning up the INDEC, the payment of judgments to companies in ICSID, and compensation to Repsol for the expropriation of YPF.  What is left is resumption of negotiations with the vulture funds who rejected the 2005 and 2010 debt swaps.

As reported by this newspaper in late December, Secretariat of the Club changed its intransigent position to a more conciliatory one during that month. It was because the newly promoted Kicillof removed the previous condition that export credit agencies (ECAs) commit to proportional inflows of direct investment to the debt that must be paid to each creditor country. In other words, the offer reformulated by the government no longer required that each nation ensure the inflow of dollars to Argentina of dollars while demanding the payment of late debt at the same time.  According to sources, the payments will continue to be limited to the flows of funds that will enter in the future, but without individualizing them by creditor.

The negotiations are being conducted by Finance Secretary Pablo López, who minimized the role of the former Minister and Ambassador to the European Union, Hernán Lorenzino, in the discussions due to Kicillof’s distrust of him. Officials who were consulted explained that the Economy Ministry approached the Club with several proposals to avoid having the agreement tap the reserves of the Central Bank with a cash payment, as the creditors were initially seeing.   They had all been rejected until December, when the positions got closer together with the first draft that the new Economy Minister sent.

The latest Argentine offer, which the Club discussed in January and that this newspaper published on  February 5th, included:

-Recognizing the total debt without a haircut on the present value, beyond the debate on the amount actually owed in principal and interest.

-Paying everything within a maximum period of 5 years from the signing of the agreement, or in less time when firms based in the creditor countries bring dollars into the country.

-Make a down payment of US$2 billion in the year after the signing of the agreement. It would be the only installment that Cristina Kirchner will have to cover, conditioned to credits in dollars that allow for no impact on the reserves.

-Pay off the remaining amount in annual installments, the first of which should be made within a year after the first payment.

Countries in favor and opposed

On January 20, Economy Minister Axel Kicillof traveled to the French capital and said that his meeting with the representatives of the creditors had been "very positive". But Club spokeswoman, Clotilde L'Angevin, clarified that the negotiations "have not formally begun" and that it was "too early" to respond to Argentina’s proposal.

Following Kicillof’s visit, the creditors met in private and both sides maintained total secrecy before the press. But at that meeting, according to diplomatic sources that were consulted, envoys from a group of countries found that the proposal was acceptable. These were envoys from Germany, Italy, France, the United Kingdom and the United States.

Other creditor governments, like Japan’s, were indifferent. The Netherlands and Spain were more hardline, which are among the biggest creditors. The debt with the Paris Club has origins mostly in loans requested by the last dictatorship from European companies for arms purchases (which in some cases didn’t even arrive) and infrastructure (which, like a massive gas pipeline, were also not carried out), but also includes credits that Madrid extended during the convertibility crisis.

Visit

President Cristina Fernández will travel on Wednesday of next week to Paris, responding to an invitation from the French head of state, François Hollande. The President will inaugurate the Paris book fair and will participate in an official lunch at the Elysee Palace. The heads of state will hold a bilateral meeting with a heavy agenda on relations between Argentina and France, as well as the most important issues in the international arena, but without touching on the Paris Club.

Ambito Financiero

IMF, concerned over the Argentina vs. vultures case

Friday, March 14, 2014

Washington - The International Monetary Fund reiterated its "deep concern" about the "systemic implications" on debt restructuring processes that may come from the judicial dispute being carried out by Argentina and the vulture funds in the U.S. courts.

"The Fund continues to be deeply concerned about the broad systemic implications that the decision of the lower court (in New York) may have for debt restructuring processes in general," said Gerry Rice, spokesman for the Fund, during his weekly press conference held each Thursday.

The IMF, which is closely following the legal dispute between Argentina and bondholders who are still in a default situation, has been warning for some time about the consequences upon the international financial system that could come from the U.S. Supreme Court upholding decisions made by lower courts in Manhattan.

In a May 2013 document, the IMF had already stated that upholding New York court rulings "could probably give greater advantage" to bondholders who did not enter the 2005 and 2010 debt swaps. It also indicated that, given that scenario, "could make the process of restructuring more complicated."

Arguments

The 'concern' now raised by the IMF spokesman regarding the case between Argentina and the vulture funds coincides with one of the arguments from lawyers representing the country in the appeal before the Supreme Court on February 18. In it, the Argentine government asked that decisions made by lower courts of New York be reviewed, describing them as "erroneous" since they would prevent the country from making "debt obligation payments, which are being paid on time and in accordance with its terms.”  The decisions challenged by Argentina were issued first by New York Judge Thomas Griesa, and then by the Court of Appeals of the Second Circuit of New York, which established a method of payment to bondholders who did not enter debt swaps, for an approximate amount of US$1.33 billion dollars as compensation for 100% of the bonds in default.

wir werden uns dem Gericht nicht beugen....

http://www.atfa.org/

Ambito Financiero: “Predictable: ruling from Griesa does not apply in Argentina” Debt Coverage/Supreme Court: Global Post (EFE): “Argentina gets U.S. backing in subpoena dispute with holdout creditors” Forbes (Also on Legal Pulse): “Supreme Court Observations: BG Group PLC v. Republic of Argentina” (SAMP)

Ambito Financiero

Predictable: ruling from Griesa does not apply in Argentina

 

Monday, March 10, 2014

 

The Supreme Court of Justice rejected a petition from the U.S. investment fund Claren Corporation which solicited the compliance in the country with a sentence from New York Judge Thomas Griesa.  The judge had ordered the Argentine state to pay public debt bonds held by the company of that country.  The Court understood that Griesa’s sentences cannot be applied in Argentina.

 

In 2007, the judge from the Southern District of New York ordered the Argentine state to pay Claren the total sum of US$7,507,089 in principal and interest on unpaid Negotiable External Global Bonds 1997-2017, which had been acquired by the company.

 

Attorney General Alejandra Gils Carbó had requested that the highest court dismiss the execution – under the name exequátur- demanded by the creditor that was benefited by Griesa’s ruling.  The Court backed the attorney general, who based her argument on the economic emergency law, passed during the 2001 crisis.  For the court, the validity of the law was not even up for debate in Griesa’s jurisdiction. 

 

The complaint before the Court was brought forward by attorney Horacio Liendo, who had worked on the team of Domingo Cavallo at the Economy Ministry.  “The exequátur attempted by Claren does not satisfy the requirement laid out in section 4 of Article 517 of the Civil and Commercial Code, insofar as admitting the attempt by the plaintiff would mean validating that this, through an individual action brought before a foreign court, eludes the process of public debt restructuring put forth by the Argentine state through the emergency laws issued by the competent authorities according to what is established in the national Constitution,” said the justices who signed it.

 

 

Global Post (EFE)

Argentina gets U.S. backing in subpoena dispute with holdout creditors

 

Friday, March 7, 2014

 

Washington, Mar 7 (EFE).- The U.S. government has filed an amicus brief before the Supreme Court supporting Argentina's position in a bank-subpoena dispute with hedge funds that are seeking full payment on defaulted bonds.

 

In the brief, U.S. Solicitor General Donald Verrilli Jr. argued that the U.S. government has a "substantial interest in the correct interpretation and application" of the Foreign Sovereign Immunities Act, or FSIA.

 

 

Forbes (Also on Legal Pulse)

Supreme Court Observations: BG Group PLC v. Republic of Argentina (SAMP)

 

Friday, March 7, 2014

 

By Richard Samp

 

The Supreme Court on Wednesday issued a divided opinion in a case that raised an important issue of arbitration law:  should an arbitrator or a judge decide whether an international treaty requires a private party to bring a commercial dispute before a judge prior to attempting arbitration?  In BG Group PLC v. Republic of Argentina, the Court ruled 7-2 against Argentina, concluding that arbitrators acted within their power when they concluded that a British firm was not required to file suit in Argentina’s courts before seeking arbitration.  Chief Justice Roberts, joined by Justice Kennedy, dissented; they argued that in signing the bilateral UK-Argentina investment treaty, Argentina agreed to arbitration only on condition that investors bring their disputes to an Argentine court first.  But there was one point on which the justices agreed unanimously:  Argentina has a sorry history of living up to its contractual commitments to investors.  That point of agreement does not bode well for Argentina, which in two pending Supreme Court cases is asking the Court to permit it to invoke sovereign immunity as the basis for resisting repayment of sovereign debt.

La Nacion: “The U.S. Supreme Court orders the country to pay US$185 million to British Gas” Clarin: “The U.S. Supreme Court rules against Argentina”

La Nacion

The U.S. Supreme Court orders the country to pay US$185 million to British Gas

The company sued over the pesification and freezing of rates  

 

Thursday, March 6, 2014

 

Por Silvia Pisani  | LA NACION

 

WASHINGTON.- Argentina yesterday lost one of the three cases on the overdue debt which have been filed before the U.S. Supreme Court, and was ordered to pay US$185 million to British Gas. As soon as the decision was known, which was reached by a 7-2 decision among the justices, local legal and diplomatic circles agreed in categorizing what happened as a "very bad sign" for the country, which is facing decisions that, should they be unfavorable, could carry it to "a new default.”

 

Eyes were on two peculiarities of the ruling yesterday. First, what would the Argentine reaction be, whether it will abide by the ruling or not.  At the close of this edition, there was no concrete signal from the government in Buenos Aires.  On condition of anonymity, one of the experts following the case did not hesitate to qualify it as little more than "suicide" if there were any gesture that intimated an intention to defy the ruling. "Argentina is trying to get a favorable position from the Supreme Court in the case of the debt in default in the hands of the holdouts. The worst thing that it could do is defy a ruling simply because it finds it indigestible,” the source said.

 

In diplomatic circles, the reaction was similar. "If Argentina is trying to normalize its relationship with creditors and the financial world, it would not be advisable to ignore a ruling that orders it to pay a creditor,” LA NACION heard.

 

Another peculiarity that was noted in the ruling was the fact that the verdict included a decision by the justices to "ignore" a document from the U.S. government which advised that course. The decision to appeal to the Supreme Court was not Argentina’s, but from British Gas. The company knocked on the door of the Court once a Court of Appeals in this city ruled against the company. When British Gas decided to bring the case before the Court, the United States Government produced an amicus curiae brief which came out against granting review and in favor of upholding the ruling that benefited the country.

 

However, as explained to LA NACION, the Court not only ignored the government's position but it ruled against the country.

 

"It is a fact that should be taken into account," said one of lawyers consulted, recalling the "expectation" that the government of Cristina Kirchner has around an eventual brief from the administration of Barack Obama in support of her position in the battle with the so-called "vulture funds".

 

The decision is the consequence of the favorable decision that British Gas obtained before the Court of the UNCITAR, which resolves trade disputes and which operates within the framework of the United Nations, a sort of parallel entity to the ICSID, at the World Bank. The case was a complaint arising from the freezing of rates after the pesification conducted after the 2001 crisis.

 

British Gas obtained a favorable judgment in 2007. Argentina petitioned for a review and appeals court ruled in its favor. It was then British Gas who appealed to the Supreme Court.

 

Argentine petition before the court

 

Argentina asked the U.S. Supreme Court to reverse the judgment from an appellate court ordering Banco Nacion to disclose Argentine accounts that could be attached, including those of President Cristina Kirchner. It was filed yesterday by lawyers from the firm of Cleary, Gottlieb, Steen & Hamilton.

 

 

Clarin

The U.S. Supreme Court rules against Argentina

It is because it violated a treaty by freezing service rates in 2002.  It will have to pay US$185 million.  

 

Thursday, March 6, 2014

 

by Ana Baron

 

New York. Correspondent – The Argentine government suffered a setback yesterday.  The U.S. Supreme Court announced that Argentina will have to pay the company British Gas US$185,285,485.85  for having broken the contract between both parties by freezing service rates in 2002.

 

What impact could this ruling have on the case of the vulture funds?, asked Clarin.  “They are two totally different cases,” explained a source that requested anonymity.  “But it doesn’t help the Argentine appeal before the Supreme Court that they have so much untidiness from its government on the table for discussion.”  

 

In any case, in the Supreme Court what always prevails are the legal arguments. The case of British Gas v. Argentina began in 2002 when BG held 45.11% of Metrogas. After the freezing of rates, British Gas accused the Argentine government of having violated the contract they had and, consequently, the investment treaty signed between Argentina and Britain in 1991. BG then filed before the Trade Law Commission, a body of arbitration of the United Nations (UNCITRAL according to its acronym in English), asking for compensation for the damage caused. On July 27, 2007, UNCITRAL determined that BG “had not received fair and equal treatment and therefore Argentina had to pay US$185 million plus interest.”

 

Argentina argued that to be able to collect, British Gas should have first gone before the Argentine courts. Then British Gas appeared before a District Court in Washington DC to insist that there was nothing to force it to comply with Argentina’s demands. The Court took its side. But months later the Court of Appeals sided with Argentina.

 

So the case went to the U.S. Supreme Court on July 27, 2012. The decision, announced yesterday, was in favor of BG and written by Democrat Stephen Breyer. Republicans Antonin Scalia, Clarence Thomas and Samuel Alito, and the Democrats Ruth Bader Ginsburg and Elena Kagan, supported it. Democrat Sonia Sotomayor dissented on one point of the ruling, while the Chief Justice of the court, the Republican John Roberts, filed an opinion in opposition, supported by another Republican, Anthony Kennedy.

 

In the case of the vulture funds, Argentina asked the Supreme Court to reverse the ruling that ordered it to pay back all the bondholders who refused to participate in exchanges of 2005 and 2010 at the same time that it pays bondholders that did enter.

 

Unlike what happened in the case of BG, in which the Court of Appeals reversed the judgment of the District Court, in the case of vultures two New York courts agreed to uphold the ruling against Argentina. According to all the experts consulted by Clarin, that greatly reduces the chances that the Supreme Court will accept  hearing the case of the vultures.