Confirmó el Gobierno que no habrá reapertura del canje hasta marzo
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Freitag, 30. November 2012
kein neuer Umtausch bis März 2013 ?....na ja mal sehen....Confirmó el Gobierno que no habrá reapertura del canje hasta marzo .
Rechtsstreit um Anleiheschulden // Teilerfolg für Argentinien vor Berufungsgericht
Rechtsstreit um AnleiheschuldenTeilerfolg für Argentinien vor Berufungsgericht
29.11.2012 · Ein amerikanisches Berufungsgericht hat entschieden, dass Argentinien seine Gläubiger zunächst noch nicht bedienen muss. Das Urteil könnte künftige Umschuldungen erschweren.
Von CARL MOSES, BUENOS AIRES, STEFAN RUHKAMP, FRANKFURT
Argentinien hat in einem Rechtsstreit um notleidende Anleiheschulden Zeit gewonnen. Ein amerikanisches Berufungsgericht hat ein Urteil des New Yorker Distriktrichters Thomas Griesa ausgesetzt, das Argentinien zur Zahlung von 1,33 Milliarden Dollar an eine Gruppe von Gläubigern verpflichtet, die nach dem Staatsbankrott von 2001 mehrere Umschuldungsangebote Argentiniens mit einem Schuldenschnitt um zwei Drittel abgelehnt hatten.
Griesa hatte vergangene Woche geurteilt, Argentinien müsse den Umschuldungsverweigerern (Holdouts) den vollen Nennwert der Anleiheschulden zuzüglich aller aufgelaufenen Zinsen zahlen. Um die Befolgung seines Urteils sicherzustellen, hatte Griesa überdies bestimmt, Argentinien dürfe keinerlei laufende Schuldenzahlungen mehr leisten, ohne gleichzeitig die Forderungen der Holdouts zu bedienen.
Der Richter geht noch einen Schritt weiter
Das Urteil des 82 Jahre alten Richters wird auf den Finanzmärkten aufmerksam verfolgt, weil es - so die Befürchtung - künftige Umschuldungen erschweren könnte. Kann oder will ein Staat seine Schulden nicht mehr bedienen, versucht er, seine Gläubiger zum Verzicht zu bewegen. Bei solchen Verhandlungen gibt es immer wieder Investoren, die sich in der Hoffnung verweigern, später den vollen Betrag zu erhalten oder zumindest ein besseres Angebot. Diese Strategie ist jedoch dadurch erschwert, dass es weltweit fast unmöglich ist, Vermögenswerte eines ausländischen Staates zu pfänden. Mit anderen Worten: Man kann keinen Gerichtsvollzieher in die argentinische Botschaft schicken.
Nun hat jedoch Richter Griesa eine seit vielen Jahrzehnten in Anleihebedingungen verwendete Klausel neu ausgelegt. Die Pari-Passu-Klausel schreibt die Gleichbehandlung von gleichartigen Forderungen vor. Griesa sieht die Forderungen der Holdouts gleichrangig mit denen der Inhaber der Umschuldungsanleihen. Das verpflichtet zu Zahlungen an beide Investorengruppen. Der Richter geht noch einen Schritt weiter und nimmt auch alle anderen an den Zahlungsvorgängen beteiligten Parteien mit in die Pflicht, dafür zu sorgen, dass sein Urteil vollzogen wird.
Zu allererst ist das in diesem Fall die Bank of New York, die als Treuhänder der Inhaber der Umschuldungsanleihen die argentinischen Zahlungen in Buenos Aires entgegen nimmt und das Geld über Partnerbanken in aller Welt an die Inhaber der Schuldtitel weiterleitet. An diesem Prozess sind dann auch andere Banken und Finanzdienstleister beteiligt. Das können auch europäische Abwickler und deutsche Banken sein. Und all diese Parteien will Griesa an seinen Urteilsspruch binden.
Das Verfahren wird wohl den Supreme Court beschäftigen
Entsprechend groß ist die Aufregung in der Branche, zumal eine Stärkung der Position der Holdouts und damit Komplikationen für künftige Umschuldungen befürchtet werden. Diese Sorge sei jedoch übertrieben, erläutert Adam Lerrick, der als Berater und Vertreter der Anleihegläubiger an der argentinischen Umschuldung beteiligt war. Einfluss habe der mögliche Urteilsspruch und die damit verbundene Rechtsprechung nur auf einen kleinen Teil - etwa 10 Prozent - aller Staatsanleihen und auch nur dann, wenn es zu einer Zahlungsstörung komme und wenn der Gerichtsstand im Ausland sei. Alle anderen hätten keine Pari-Passu-Klausel. Für die Zukunft sei eine Lösung für das Problem, falls es überhaupt zu einem Urteil im Sinne des New Yorker Richters komme, einen anderen Gerichtsstand als New York zu wählen. Dann könnten Holdouts allerdings mit Bezug auf das Urteil auch dort ein ähnliches Verfahren anstrengen.
Deshalb sei die für Emittenten von Staatsanleihen sicherste Lösung, die Pari-Passu-Klausel wegzulassen. Lerrick erwartet aus diesem Grund nicht, dass das New Yorker Verfahren nachhaltigen Einfluss auf die Umschuldungspraxis haben wird. Noch hat sich die Einschätzung des New Yorker Richters ohnehin nicht durchgesetzt. Lerrick rechnet damit, dass das Verfahren den Supreme Court beschäftigen wird.
eine internationale Grossbank bietet ICMA an: Argy für Umtauschspekulationen
erhalten und diesbezüglich mit unserem Handel Kontakt aufgenommen. Gemäss Handel ist es durchaus möglich, die gewünschten Titel zu kaufen. Leider ist es aber nicht sicher, dass Ihnen alle gewünschten Anteile zugeteilt werden, da die Titel sehr illiquid sind. Auch die Preise können sehr varieren. Es ist deshalb viel Vorsicht geboten. Gerne gebe ich Ihnen momentane, ungefähre Kaufpreise wie folgt bekannt:
- 130020 25.00
- 130860 25.00
- 190430 25.00
- 134810 25.50
- 134091 25.50
- 248320 27.50
- 450900 27.50
- 135475 27.00
- 545025 27.00
Ich hoffe, Ihnen mit diesen Angaben dienen zu können. Für weitere Fragen steht
In Battle With Hedge Funds, a Small Victory for Argentina BY STEVEN M. DAVIDOFF
In Battle With Hedge Funds, a Small Victory for Argentina
BY STEVEN M. DAVIDOFF
ReutersAn American hedge fund, a holdout creditor from Argentina’s default a decade ago, won a court order in October to detain the Argentine naval ship ARA Libertad in a Ghana port.
A decade-long quest by hedge funds led by Elliott Management and Aurelius Capital Management to force Argentina to pay up on the country’s defaulted debt is going to last a bit longer.
On Wednesday, the United States Court of Appeals for the Second Circuit issued a stay of a lower court’s order that would have required Argentina to set aside $1.33 billion to pay holders of its old, defaulted debt if and when it made any payments on its new debt.
It’s a minor victory for Argentina, but in this case it may have a ancillary effect, signaling a reversal of fortune for the country.
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To understand the implications of the judicial order, a bit of history is needed.
This litigation arises out of Argentina’s default on $80 billion worth of sovereign bonds in 2001. In 2005 and 2010, Argentina subsequently pushed the holders of this debt to exchange the old bonds for new ones at 25 to 29 cents on the dollar. The stick here was Argentina’s steadfast refusal to pay any amount on the old bonds. Since that time, the remaining holders of the old bonds, including Elliott and Aurelius, have been enmeshed in worldwide litigation against Argentina to force it to pay.
In October, the appeals court handed the two hedge funds a stunning victory. The court ruled that the “pari passu” clause in the bond indenture for Argentina’s old debt required the country to make payments on its old debt any time it made a payment on its new debt. Pari passu is a Latin phrase meaning, roughly, “on equal footing.”
The court also held that, given Argentina’s continued refusal to pay this old debt, the Foreign Sovereign Immunities Act of 1976, which prevents courts from attaching the property of sovereigns, did not prohibit a federal court from ordering Argentina to comply with the pari passu clause by issuing an injunction to such effect.
The appeals court did not hand a complete victory to the hedge funds. It remanded the case to Judge Thomas P. Griesa, the lower court judge hearing the case, to decide two issues: whether the injunction requiring Argentina to make payments on the old bonds applied to third parties, and how much Argentina would be required to pay to holders of the old bonds if it made payments to holders of the new ones.
It appears Judge Griesa had clearly grown tired of Argentina’s intransigence. At a hearing earlier in November, he handed full victory to the plaintiffs. He ruled that Argentina must set aside the full $1.33 billion it owed to the plaintiffs if and when Argentina made a $3 billion payment due on Dec. 15 to holders of the new bonds.
Argentina, as a sovereign, could ignore this order, but Judge Griesa put teeth in it by applying it to third parties. He ordered the bond indenture trustee as well as the clearing systems that transmit money for Argentina to comply with this order.
The judge’s actions were particularly aggressive for two reasons. First, Article 4-A of New York’s Uniform Commercial Code provides a safe harbor for third parties from this type of injunction, the purpose of which is to ensure that only Argentina’s banks are drawn into these disputes. Argentina has argued that the bond indenture trustee is not its bank and so immune from the injunction. Argentina also argues that payment system operators are immune under long-settled New York law.
Judge Griesa additionally ordered the $1.33 billion due and owing to holders of the old bonds to be paid all at once instead of pro rata over time as holders of the new bonds are paid. The judge made the order effective immediately, refusing to stay his order until it had been fully considered by the appellate court. Argentina’s response was to appeal to the Court of Appeals and request an emergency stay.
On Wednesday, the appeals court stayed the implementation of Judge Griesa’s order, and it set up a briefing schedule for the case, to be heard on Feb. 27 by the same judges who previously ruled against Argentina.
At first blush, this is not much of a victory for Argentina. Given what is at stake, it is no surprise that the appeals court would call a break to the confrontation to review Judge Griesa’s order.
The same judges who previously ruled against Argentina will now revisit the case. Argentina has already filed a motion asking the entire Court of Appeals to rehear the prior decision of these judges. That motion will probably remain in limbo while Judge Griesa’s order is reviewed.
While on its face the stay is a small matter, the question now is whether it can provide a bigger opening for Argentina.
Judge Griesa’s order is going to require the Court of Appeals to grapple with questions about the scope of the court’s authority that it may not have fully considered earlier. The United States government, third-party financial institutions affected by the judgment and even the holders of new bonds have been energized by the prior ruling.
The appeals court has set a Jan. 4 deadline for the interested third parties to submit their views. Expect all of these parties to now enter the fray with briefs in support of Argentina, with many arguing that applying this injunction to third parties would upset the orderly flow of payments in many other instances.
This will require the appellate court to decide whether this injunction should apply to third parties, an issue the judges already seemed to be uneasy with in their prior opinion.
And if the judges do find that the injunction issued by the lower court should not apply to third parties, then the Court of Appeals is going to have to again confront the basic question of what it is trying to do against Argentina.
The Foreign Sovereign Immunities Act of 1976 prohibits a court from legally attaching sovereign property unless It is used in commercial activity. The act has been used to prevent lawsuits against scores of countries. And even though Argentina submitted to the jurisdiction of the New York courts, it did so after passage of this act, so clearly the parties knew that these limits existed.
If the Court of Appeals is unwilling to apply the injunction to third parties, then it may be required to determine how the lower court’s order is not really just a legal attempt to attach Argentine property – a tactic that could be used against any other sovereign, something the Foreign Sovereign Immunities Act appears to prohibit.
It remains to be seen whether the Court of Appeals will bite at these arguments – some of which it has already rejected. But expect Argentina and its allies, including the United States government, to press the court hard as they attempt to turn the February hearing into a reconsideration of the entire case.
The plaintiffs will no doubt continue to argue forcefully that Argentina is unique because of its egregious behavior and that the actions of the three judges will not have a wider effect on the financial system. They are also likely to argue that the lower court’s order is not an attachment, because Argentina can simply ignore it and refuse to pay on the new and old bonds.
The question now is whether the hedge funds can keep the court focused on the narrow issue of Argentina and the morality of its nonpayment of debt, or whether wider legal issues push the Court of Appeals to reconsider the case. And that is what is really at stake in this February hearing.
Steven M. Davidoff, a professor at the Michael E. Moritz College of Law at Ohio State University, is the author of “Gods at War: Shotgun Takeovers, Government by Deal and the Private Equity Implosion.” E-mail: dealprof@nytimes.com | Twitter: @StevenDavidoff
El Cronista They will await the final verdict of the court before activating the reopening of the swap
El Cronista
They will await the final verdict of the court before activating the reopening of the swap
Thursday, November 29, 2012
Economy Minister Hernán Lorenzino said yesterday that a possible reopening of the debt swap would not happen “while there is no decision” from the Court of Appeals of New York on the lawsuits by the holdouts against Argentina. “We are waiting for the decision from the Court (of Appeals). While there is no decision on that, we’ll have nothing to add to what we have said in these recent days,” argued Lorenzino, in a press conference at the Palacio de Hacienda.
For her part, President Cristina Fernandez emphasized that Argentina has “good will” and “will honor” its payment commitments for public debt during her speech a the annual congress of the Argentine Industrial Union (UIA). The president said “they want to punish” Argentina because “we are building a counter-model from the world where financial capital and its derivatives have become masters and lords.”
Lorenzino yesterday in a radio interview had hinted at the possibility of Argentina being able to suspend the “lock law” in case the Court of Appeals considered the chance of an accord with the holdouts in similar conditions to the swap of 2010. The minister said that “a similar proposal” to the 2010 swap “would be in line with the legal precedents of our country and would be possible to be debated in Congress.” Consequently, the position that the minister reveals that the country will not act until it has a favorable signal from the Court of Appeals in New York.
Meanwhile, with the stay issued yesterday by the Court of Appeals, Argentina gains time and this could allow it to rearm its legal strategy. First, it allows it to make the December 15 payment on the GDP coupon for US$3.3 billion without entering the risk of attachment nor a default.
El Cronista Anthony Costantini: “The Government was ambiguous, but if its talking about another swap, we’re not interested”
Debt Coverage:
La Nacion: “Relief for the government: payment to the holdouts is deferred in the US”
Clarin: “Payment to the vulture funds is halted and Argentina unites itself from default”
Ambito Financiero: “Cristina: ‘We will continue paying debt on time’”
El Cronista: “They will await the final verdict of the court before activating the reopening of the swap”
La Nacion: “Euphoria among the swap bondholders”
El Cronista: Anthony Costantini: ‘The Government was ambiguous, but if its talking about another swap, we’re not interested’
La Nacion: “The moral issue in the management of the debt”
Clarin: “The government’s next steps will have to be careful”
La Nacion: “Argentina seeks to have the IMF postpone the evaluation of the country”
La Nacion
Relief for the government: payment to the holdouts is deferred in the US
Thursday, November 29, 2012
By Martin Kanenguiser
For the first time in various weeks, Economy Minister Hernan Lorenzino could run across last night with a smile from the Palacio de Hacienda to the Casa Rosada. We brought the news to President Cristina Kirchner the news of the decision of the Court of Appeals of New York to reintroduce, at least until the end of February, the stay on the sentence that ordered the government to pay the holdouts.
This way, the December 15 payment to the bondholders that entered the debt swap for US$3.3 billion will not run the risk of being attached. Those bondholders were recognized yesterday by the Appellate court as “interested third parties”, which means they could intervene in the case.
Without referring to the underlying question, yesterday’s decision in the higher court seems to be a block on the hardline of Judge Thomas Griesa who last week ordered Argentina to pay the holdouts (bondholders and “vulture funds” that didn’t adhere to the swaps of 2005 and 2010) in a lump sum US$1.33 billion plus interest. If Argentina hadn’t honor that payment it would have fallen into what is called “technical default.” Faces with that risk, Lorenzino had announced two days ago the openness to reopening the swap to include the holdouts, a possibility that the government had emphatically rejected.
In a ruling that provoked an immediate positive reaction in the prices of Argentine debt bonds, the American court found that Griesa’s order “is stayed, pending a later order of this Court,” and that at the end of December the Argentine government should present a proposal to resolve the lawsuit.
In the Palacio de Hacienda they pointed out last night the importance of the resolution.
By morning, Minister Lorenzino had put in doubt that the government was going to present a new swap proposal: “We are waiting for the decision of the appellate court, therefore there is no decision on that,” he said in a press conference, one day after saying strictly that they would reopen the swap to exit the default as an alternative to the aggressive proposal by Griesa to pay 100% in mid-December.
In fact, last night, Vice Minister Axel Kicillof took away sense from the possibility of reopening the swap by saying on the program 6,7,8 on public television that “the business of the vulture funds is not to collect but to speculate. We are very content because there has been good news. Now things are in place and we are going to be able to pay,” said the influential official. Then, Economy released a statement in which it explained the reaches of the ruling.
Concretely, the Court of Appeals decided that on February 27 at 2:00pm there will be a hearing in New York among all the parties to newly hear the arguments in the face of a definitive decision.
Attached to this news, in another very positive element, the Second Circuit of New York decided to incorporate the exchange bondholders as interested parties in the case, which will allow them to be heard fully. Both issues – the stay and adding the bondholders – had been denied by Griesa on Monday. So, on the 28th of next month Argentina will have to file its brief, and on January 4 the exchange bondholders will do so and eventually the U.S. government; on January 25 the plaintiffs – vulture funds and small investors – and finally, on February 27, all the parties will meet.
Sean O'Shea, attorney for the bondholders that accepted the swaps, said that “the order of the Second Circuit shows its understanding of the serious constitutional issues and about the fairness that is in play.” He then said that the decision “ensures that the exchange bondholders will get full payment in December and until the court seriously considers that significant and important issues are in consideration until its final decision.” In an interview with LA NACION on the reasons for the ruling yesterday, O’Shea said: “I am sure that the Court was concerned by the fact that Griesa’s order represented an unconstitutional decision.”
O'Shea said that the decision by the court yesterday not only is due to the government’s request but also from the exchange bondholders. “There was a new hearing about this issue, a fact that gratifies the exchange bondholders, in an effort led by the investment fund Gramercy,” he said.
The attorney for the Garrido firm, Eugenio Bruno, had a balanced interpretation of yesterday’s decision. “It means that the Court of Appeals needs more time and as such it’s a procedural victory for Argentina, because it takes away the urgency. In fact, there are bonds to pay until 2038 in New York and as such there isn’t danger, as the plaintiffs warned, if the sentence is delayed.”
Thus, Argentina wouldn’t need to establish an escrow account with money for the holdouts, while the Court of Appeals reviews the arguments of the parties. It is worth recalling, however, that this court which brought good news yesterday was the same that on October 26 determined Argentina’s defeat in the underlying issue, which is to say, which ordered payment to the creditors in default and left to Griesa the formula to do so.
For this reason, Bruno said that “the ruling of the court changes nothing, but that there is a deferral in its execution and until it can ratify the payment formula of Griesa.”
On that, attorney Marcelo Etchebarne explained that “the intervention of the exchange bondholder of the 2010 swap had a critical role in partially reversing the Griesa sentence and extend terms until March or April of 2013.” However, the expert clarified, “this doesn’t mean that the court, if nothing changes, will reverse its own sentence of October 26, when it already condemned the Republic.”
Clarin
Payment to the vulture funds is halted and Argentina unites itself from default
Thursday, November 29, 2012
By Ana Baron
(WASHINGTON) On day after Argentina reaffirmed its will to reopen the swap, the Court of Appeals yesterday suspended, until further notice, the execution of the ruling in which Judge Thomas Griesa ordered the Argentine government to pay US$1.33 billion plus interest on December 15.
The decision of the Court of Appeals represents, without a doubt, a huge relief for Argentina, for the exchange bondholders and for the agents and banks involved in the payments, at the same that it is a big reversal for Griesa.
In fact, with its ruling, the Court of Appeals sent a very clear signal that it is ready not only to suspend its execution but also to review and/or reverse the ruling in which Griesa established that Argentina has to pay the vulture funds 100% of what is owed them, in one payment and all of the payment agents could be subject to lawsuits if it pays the exchange bondholders without Argentina paying the vulture funds.
In fact, the ruling issued by the Court of Appeals yesterday asks for all the parties involved in the case to present their positions.
Argentina has until December 28 to do so. The vulture funds must respond before January 25 and Argentina will have until February 1 to comment about the position of the vulture funds. Parallel to the third parties, like the so-called Exchange Bondholder Group and the other interested parties could present their positions and/or amicus curiae before January 4. Finally on February 27 there will be a hearing in which the members of the court could ask for details from the attorneys of all parties, including from the exchange bondholders.
How much does this ruling have to do with the change of attitude of the government, which went from saying that it would not pay the vulture funds anything to offering to pay them the same as the exchange bondholders? In fact, yesterday President Cristina Kirchner reaffirmed the will to honor all international obligations. It’s difficult to know what the impact was on all this. But without a doubt it was positive
Among the attorneys and experts consulted by Clarin this week in New York and Washington the concern was, however, less centered on the ups and downs of the Argentine government than about what Griesa’s ruling could mean for the international financial system.
What seems to be excessive to them is that Griesa was prepared to make all the payment agents, including the clearing houses, could be subject to lawsuits if they make payments to the exchange bondholders without Argentina paying the vulture funds as well.
More still, they fear the impact that all this could have on organizations like the IMF and the World Bank, which while they have always been considered preferred creditors, in reality they are not so under the law.
“It’s impossible to calculate the reach that all this could have, but it’s seen as something very serious, the whole system is in play,” a lawyer said to Clarin who is following this case very closely but asked not to be identified.
Despite the predictions that said that it would passively accept Griesa’s rulings without modifying them, all indications are that the Court of Appeals is ready to act quickly. In fact, in another reversal for Griesa this court yesterday granted EBG, a ground of exchange bondholders, the chance to be officially part of the case with appeal rights, something that the lower court judge had denied.
This was the first indicator that the Court of Appeals is not ready to accept the rulings from Judge Griesa without deeply reviewing them.
The fact that EBG also will be part of the lawsuit is good news for Argentina. Led by Gramercy, an investment fund that has US$1 billion in Argentine bonds, this group has been supporting Argentina’s position, from a principle concerned over the chance of not being able to collect.
“I am very optimistic,” said Sean O’Shea, the attorney with the famous David Boies represents EBG, to Clarin yesterday. “I believe that in the end they will reverse the ruling. It’s not fair that they use our money to pay the holdouts.”
According to O’Shea, Griesa’s ruling “legally and unconstitutionally obstructs the rights of innocent creditors, including EGB, to collect payments that the Republic owes.”
Yesterday, perhaps, another story began to be written.
Ambito Financiero
Cristina: “We will continue paying debt on time”
Thursday, November 29, 2012
More than one businessman sighed in relief: President Cristina de Kirchner said yesterday that Argentina will honor all the scheduled payments of its renegotiated debt. If at that announcement by the President one adds what was said a day before by Economy Minister Hernan Lorenzino regarding the fact that the country will open instances of negotiation with the “holdouts” (the bondholders that chose not to enter the two swap offers made by the government in 2005 and 2010), the financial outlook for the country improved almost immediately.
It’s that the risk of any class of default (technical or real), which hovered over the financial system starting with the ruling from Judge Thomas Griesa last week, seemed to head far from the immediate horizon. It’s worth recalling that the New York judge had ordered Argentina to pay cash and in a few weeks the total debt to the vulture funds. By not doing it, it could also pay the coupon coming due on December 15. However, the ruling that came out yesterday from the appeals court in that city extended the “stay” by which all the bondholders will collect normally without restrictions that Griesa tried to impose.
Punctuality
“We’ve been paying our debt punctually since 2005, with our own resources, and we will continue doing it because we are going to honor our commitments as a country which recovered its self-esteem does,” Cristina emphasized from the podium that was given her by the Argentine Industrial Union (UIA) to close its conference yesterday in far-away Los Cardales.
She also said that what Griesa ordered was not “a pari passu, because the holdouts are placed in a status of privilege that affects 93% of the creditors that accepted the swap offer. Many, at the time, even in the cabinet (Roberto Lavagna?) of that time, criticized Nestor because he said that the offer was reduced, because it was what could be paid.”
Counter-model
The president explained: “We are building a counter-model from a world where financial capital and its derivatives have been turned into masters and lords, and for that they want to punish us.” And she asked developed countries to stop trying to unload the effects of their cuts onto Latin America.
She also admitted to the drop in economic activity, but said that it hadn’t provoked a drop in employment. “We argued for jobs, despite the drop in economic activity from the world crisis,” but she asked them to be “realistic” because “this couldn’t be sustained long term if strategies were not made for the future, not only with Brazil but also with brothers of the Pacific in South America.”
Cristina de Kirchner lamented the lack of existence at the international level of a system like the one for bankruptcy laws in many countries (including Argentina and the U.S.) by which , if it reaches a certain percentage of acceptance of a debt (in Argentina’s case it was 93%), the rest of the creditors are obliged to accept the offer that a big majority took.
Finally, the President again emphasized the importance of the “internal market, which helped us overcome the crisis that came from outside,” and called for development in “the auto part industry, because the terminals are all foreign and they take profits abroad.” It’s worth recalling that in the last decade production of vehicles in the country grew 480% and for parts only 50% for the lack of competitiveness in prices and production volume that the sector is suffering.
El Cronista
They will await the final verdict of the court before activating the reopening of the swap
Thursday, November 29, 2012
Economy Minister Hernán Lorenzino said yesterday that a possible reopening of the debt swap would not happen “while there is no decision” from the Court of Appeals of New York on the lawsuits by the holdouts against Argentina. “We are waiting for the decision from the Court (of Appeals). While there is no decision on that, we’ll have nothing to add to what we have said in these recent days,” argued Lorenzino, in a press conference at the Palacio de Hacienda.
For her part, President Cristina Fernandez emphasized that Argentina has “good will” and “will honor” its payment commitments for public debt during her speech a the annual congress of the Argentine Industrial Union (UIA). The president said “they want to punish” Argentina because “we are building a counter-model from the world where financial capital and its derivatives have become masters and lords.”
Lorenzino yesterday in a radio interview had hinted at the possibility of Argentina being able to suspend the “lock law” in case the Court of Appeals considered the chance of an accord with the holdouts in similar conditions to the swap of 2010. The minister said that “a similar proposal” to the 2010 swap “would be in line with the legal precedents of our country and would be possible to be debated in Congress.” Consequently, the position that the minister reveals that the country will not act until it has a favorable signal from the Court of Appeals in New York.
Meanwhile, with the stay issued yesterday by the Court of Appeals, Argentina gains time and this could allow it to rearm its legal strategy. First, it allows it to make the December 15 payment on the GDP coupon for US$3.3 billion without entering the risk of attachment nor a default.
La Nacion
Euphoria among the swap bondholders
Thursday, November 29, 2012
By Rafael Mathus Ruiz
NEW YORK.- Exultant, the voice of Sean O’Shea, counsel for the group of bondholders headed up by the Gramercy investment fund, which managed to insert itself into the fight between the “vulture funds”, judge Thomas Griesa and Argentina, left no margin for uncertainty. “Here we have a total victory”.
Just a few minutes ago, O’Shea had received the decision issued by the Court of Appeals of the Second Circuit which allowed the swap bondholders to join the case as “non-interested parties”, as well as the news that Griesa’s ruling was once again on hold, until new reports had been presented and new legal arguments heard in a hearing set for February 27th.
“The December payment will be made. We have our victory. The attempt of the plaintiffs was rejected pending a hearing”, he finished in a phone conversation with LA NACION.
In the last hearing held in Griesa’s court in mid-November, O’Shea had complained to the judge that the bondholders who had accepted the Government’s debt swap were being held hostage by the vulture funds. On Monday, Griesa had said no to the two requests which yesterday got the thumbs up by the Appeals Court.
O’Shea set out a very simple argument, inversely proportional to the size of the dispute. For the Supreme Court, Griesa’s ruling was unconstitutional.
This was a wedge which opened the door towards taking the bondholders’ case to the Supreme Court of Justice, an outcome which would have injected much drama and suspense into the fight between Argentina and Paul Singer, the Wall Street magnate and owner of NML Capital which took the country to Griesa’s court.
One of the best known names in the US highest legal authority appears in the 20-page document presented by O’Shea, alongside that of Argentina, before the Court of Appeals, to request that Griesa’s ruling be suspended.
This is Anthony Kennedy, the magistrate whose vote tends to be a tie-breaker when it comes to the ideological divide in the Supreme Court, where there are four conservative and four progressive judges working together with him.
"As judge Kennedy [?] recognized, a judicial intrusion on the private property of a party violates the guarantees of due procedure”, says the writ.
The arguments
The bondholders had argued that Griesa’s decision to force Argentina to pay some 1450 million dollars to the NML Capital and Aurelius funds, and the other small bondholder plaintiffs, would affect their private property. In other words, that it conditioned the payments they would collect for their bonds, and that this was thus unconstitutional.
The writ also invokes the Fifth Amendment of the United States Constitution, which guarantees that no-one shall be deprived of his private property without “due judicial proceeding”, or in the case of a public expropriation, without fair compensation.
“As a decision which violates the Fifth Amendment, it should be left without effect”, pleaded counsel for the bondholders, in reference to Griesa’s ruling.
In addition to considering that Griesa’s decision was unconstitutional, the writ criticized the judge for giving such importance to the strong statements made by President Cristina Kirchner on a number of occasions.
Also for the implications that this decision would have on the health of the restructuring of sovereign debt and the financial markets.
“Furthermore”, concluded the bondholders’ document, “the level of resentment towards the Argentine Republic shown by the District Court in its requests has implications for issues of cohabitation and external relations”.
A relief, say analysts.
Economists and politicians celebrated the ruling of the New York Court of Appeals, but warned that it would be important to come up with a back-up strategy.
FEDERICO STURZENEGGER
Chairman of the Banco Ciudad
"Argentina has an opportunity. Now, if the swap is reopened, will people present themselves voluntarily or will this make the Court force a result?”
JOSÉ IGNACIO DE MENDIGUREN
Chairman of the UIA (Union of Industrialists)
"Griesa’s ruling was impossible to meet. This is just a suspension which gives us time to set a strategy, but we find it reasonable”.
DANIEL MARX
Director of Quantum Finanzas
"Argentina has indicated that it is disposed to pay with an idea of pari passu. In the future, we will have to argue clearly about what constitutes pari passu"
ARNALDO BOCCO
Ex director of the Central Bank
"Griesa’s ruling was inadmissible for the financial system. What the Appeals Court said is not by chance; what was unpredictable was Griesa’s ruling.
RAMIRO CASTIÑEIRA
Estudio Econométrica
"The opening of the swap, on the edge of what is legal, will give Argentina the opportunity of presenting an offer to be litigated. It would be advisable to put the swap on the table.”
FAUSTO SPOTORNO
Orlando Ferreres & Asoc.
"This measure protects the bondholders who entered the swap and who need to collect now. But the underlying issue has to be resolved. “
FEDERICO PINEDO
Congressman (PRO)
"We welcome the ruling of the US Court which put things in their place. We should only pay the vulture funds that entered the swap.”
El Cronista
Anthony Costantini: “The Government was ambiguous, but if its talking about another swap, we’re not interested”
Thursday, November 29, 2012
By Laura Garcia
“We are not in favor of suspending the judge’s order”, states Anthony Costantini, partner at Duane Morris, which represents some 100 individuals, many of them Italian pensioners who decided not to enter the swap.
Barely minutes had passed from the decision of the Court of Appeals which overturned the ruling of judge Thomas Griesa and once again suspended his order to pay the vulture funds.
“It is impossible to infer from the Court’s ruling how long this measure is set to last. We suspect that the Court will consider in great detail NML’s argument why the suspension should be lifted before making a final decision in the short term. But I believe that this speedy resolution is an indication that the Court of Appeals has every intention of taking its decision soon.
“It’s a mistake to talk about vulture funds as this confuses people. And the judge knows this. In fact, many of the swap bondholders might well be categorized as vulture funds. My clients, who are holdouts, are normal people like you and I who felt that the swap did not offer them adequate compensation and preferred to wait”, explains Costantini, who has signed the presentation made by the clients of Duane Morris to Judge
Thomas Griesa supporting the position of NML Capital.
“It's hard to speculate on how much influence the statements made by the Argentine authorities have had, but clearly these did not help the country’s credibility”, points out the lawyer. “What the government said in
its latest presentation is ambiguous. If they are merely talking about the swap offer, our clients would not be interested. If they are saying something more, then they would be prepared to listen”, he says at a point when the Government has for the first time shown a degree of will to pay, and shift its stance of “not a single dollar”.
“If the result of the appeals process were to confirm judge Griesa’s ruling, this would remove most of the obstacles in the cases of my clients, as they are also covered by the pari passu clause. They would not have to present any more suits, but the chances of winning the current lawsuits would increase substantially”, explains Costantini, whose representatives are claiming just under 200 million dollars.
“It’s not true that the swap bondholders are hostages in this situation”, they affirm in relation to the large funds which are today arguing that they are victims of the terrorist strategy adopted by the Judge. Yesterday, without going any further, the Appeals Court decided to admit them as active parties.
“They knew that this arrangement was subject to the challenge posited by the holdouts. And they were conscious of this particular challenge over a year ago, but said nothing until two weeks ago. Furthermore, the Court’s decision contemplates their being paid. But if Argentina decides to disregard this, they will be in the same position as our clients, who are the innocent victims of Argentina’s refusal to accept the ruling made in a jurisdiction it accepted”, says Costantini from New York.
La Nacion
The moral issue in the management of the debt
Thursday, November 29, 2012
If Argentina wants to regain international respect and return to the world scene, it is necessary for its governments to recover its values and honor their commitments.
The first rule of anybody seeking a loan is to honor the debt incurred. In linguistic tradition, the use of the word “honor” as a synonym for return, refers precisely to the honor of people, and by extension, to that of institutions. This was without a doubt the interpretation of president Nicolás Avellaneda when in 1876 he said that there were “two million Argentines who will economize to the point of hunger and thirst in an extreme situation in order to answer for the commitments of our public faith in the foreign markets”.
Carlos Pellegrini, in the most acute moments of the 1890 crisis said: “We have nothing; if we do not pay, we shall go down in the black book of bankrupt nations. I call upon you for help in the name of our Nation!”
Evidently, much water has flown under the bridge since then, and many values have been lost.
The ovation heard in Parliament following the announcement of the default in 2001 left it very clear that a large part of this country has extirpated from its vocabulary the word “honor” when it comes to paying a debt. Everything that has taken place in the official handling of the issue since then confirms that in effect, values have been lost and this loss covers a vast portion of the political spectrum.
There is no other way to describe the disqualification of the recent ruling made by judge Thomas Griesa, who after many years of giving our government one opportunity after another, chose to pass sentence on a country which he considered in his ruling to be virtually a serial embezzler. Between the arguments he used to dictate his sentence, he quoted the “inflamed” statements made by the President and the Minister of Economy, Hernán Lorenzino, who said that if the sentence meant paying the claimants, they would not do so under any circumstances.
Furthermore: Griesa speeded up his ruling and set a very short-term deadline for the sum required to be deposited, arguing that there was no point in giving time to a government capable of coming up with any ruse to avoid payment. Yesterday, the Argentine Government was afforded respite, at least until the end of February, with the decision of the Appeals Court of New York to suspend the execution of the afore-mentioned judge’s ruling until it has resolved the underlying issue.
Neither bankruptcy nor default is immoral, unless it is part of a planned fraudulent maneuver to take advantage of creditors. Insolvency for unwanted and unsought reasons is a daily part of business in any country, and sometimes happens to governments too. In these cases, the debtor should excuse himself before his creditors for the damages caused and must show them that all effort has been made to avoid a cessation of payment. From then on, he should make a proposal for repayment in which the creditors should genuinely receive priority over the debtor. Humility and deference should also accompany the debtor’s actions.
If one seeks to understand why the Argentine Government is unable to find support from any other nations (hence the recent request made by Cristina Kirchner to the countries of the Unasur to debate tomorrow in Lima the issue of “judicial colonialism”, in order to afford the country some form of regional support) one should examine all the official attitudes from the day on which the default was declared, at the end of 2001. Over three years passed before the first swap proposal was made. This was a record delay in the greatest default in history. And today, 11 years later, there has still been no proposal forthcoming to the official creditors in the Paris Club.
On his first foreign visit in 2003, president Nestor Kirchner accused the unpaid bondholders of being guilty of trusting a government that did not deserve to be trusted. Hence, as greedy victimizers rather than victims, they were simply considered as the holders of defaulted bonds. No apology was ever made, and all they got was ill treatment.
The 2005 and 2010 swaps confirmed this ill treatment by proposing them a haircut which reduced the amount recognized to a third of its value, compounded by an obedient majority in Congress which passed the lockout law, ensuring that whoever did not accept this offer would never be able to collect. A curious case, as it is now the Government, in fear of default and apparently unconcerned by its former behavior, which has contradicted itself by saying it would be disposed to reopen the swap for the bondholders which did not enter the 2010 one.
This accumulation of facts showing the total absence of good payer morality is added to a current of thought, somewhat more antiquated, which holds that part of public debt is illegal and should thus be repudiated.
Obviously, one cannot have much faith in the legal continuity of a country which should at all events judge and condemn those who incurred in acts of corruption, if proven. The original payment of high interest rates purported to demonstrate this illegitimacy should be taken in relation not only to the international situation but also with the Argentine country risk every step of the way.
For the country which has committed the largest number of defaults in the world, this risk has always been a high one. In fact, those who hold that the debts undertaken by Argentina at high interest rates in the 70s and 80s are illegitimate, should bear in mind that they were later renegotiated with haircuts and that there was no interest rate high enough to compensate for subsequent losses. The governments which restructured issued new bonds, making it impossible to sustain the illegitimacy argument. This campaign, which is still supported by certain left-wing groups, will inevitably be considered to be one more artifice, used as an excuse to avoid honoring the debt.
If Argentina wants to regain international respect and return to the world, it will be necessary for its governments and institutions to recover their lost moral values, including those about honoring commitments and respecting legal rulings.
Clarin
The government’s next steps will have to be careful
Thursday, November 29, 2012
By Marcelo Etchebarne
Last Monday, the country filed a motion for stay before the Federal Court of the Second Circuit on the application of the court order by Judge Griesa that ordered the making of deposit in escrow of US$1.33 billion before December 15.
These requests are immediate results by a judge confidentially designated. Then it’s reviewable before the panel of three judges that are intervening in the case. The delay of two days to review the issue was unusual and makes one think that it was giving it different treatment. Finally, the same panel of three judges decided to suspend the effect of the measure and fixed a procedural schedule until February 27, 2013. It also reversed Griesa’s order that would prevent the intervention of exchange bondholders from 2005 and 2010. These bondholders intervened through one of the best known and media-famous lawyers in the United States. The new ruling from the court doesn’t mean that they will reverse their own sentence from October 26 where it decreed that Argentina is in violation of the pari passu clause of equal treatment, but about the reach of the injunction on third parties and about the formula of payment but it gives oxygen until March and April 2013 when it issues its final decision. Griesa had ruled on both issues, by delegation from the appellate court, in the widest possible manner against Argentina and in almost record time. Griesa’s behavior was expected. It’s possible that the appellate court could contain his scope. For that it set an adjusted procedural schedule (expedited proceeding) where the parties and third parties will have to present briefs establishing a hearing for 2:00pm on February 27, 2013, where one probably will hear one of the most interesting debates to date about sovereign debt among some of the most highlighted current litigants in the U.S. The next steps for the Republic inside and outside the court until then could be decisive about the final result of this case.
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